ML19198A330

Attachment 1 to Environmental Law & Policy Center Petition to Intervene and Hearing Request -Expert Report of Peter A. Bradford

ML19198A330
Person / Time
Site:	Beaver Valley, Davis Besse, Perry, 07201043, 07200069
Issue date:	07/12/2019
From:	Bradford P Bradford Brook Associates
To:	Atomic Safety and Licensing Board Panel
SECY RAS
References
License Transfer, RAS 55093, Beaver Valley, Davis-Besse, Perry (LT)
Download: ML19198A330 (25)

Text

EXHIBIT 1

1 A.

Introduction and Qualifications

1.

My name is Peter Amory Bradford. I live in Peru, Vermont. My resume is attached to this report as Attachment 1. My resume lists all cases in which I have testified as an expert at trial or by deposition during at least the last four years. My resume also lists most publications I have authored and includes all publications authored within the last ten years.

2.

I am President of Bradford Brook Associates, a firm advising on utility regulation and energy policy. I am being compensated at a rate of $200 per hour.

3.

I have been an expert witness on aspects of nuclear power plant regulation and nuclear plant economics in state legislative and regulatory proceedings and in federal court proceedings and before the U.S. Nuclear Regulatory Commission. I have researched, written about and advised on nuclear power costs including decommissioning in many U.S. states and abroad.

4.

I served as a Commissioner on the U.S. Nuclear Regulatory Commission (NRC) from mid-1977 through March 1982. During my term, the NRC commenced work on the policies that led eventually to regulation of decommissioning funding. This work was driven in part by experience with US Department of Defense nuclear sites and with early civilian nuclear facilities at

2 which very substantial unfunded decommissioning costs had had to be paid by taxpayers.

5.

I served on the Maine Public Utilities Commission from 1971 to 1977 and 1982 to 1987, and served as Chair in 1974-1975 and 1982-87. During my 1982-87 term, Maine electric rates included payments into what became the Maine Yankee nuclear power plant decommissioning trust fund.

6.

I served as chair of the New York Public Service Commission from 1987 until 1995. During that time, the Commission set rates to cover the costs, including decommissioning, of eight nuclear power units, including the now decommissioned Shoreham plant and Indian Point 1, which closed some 45 years ago and remains in SAFSTOR.

7.

I am currently a Commissioner on the Texas/Vermont Low Level Radioactive Waste Compact Commission, whose responsibilities involve a facility in Texas that receives radioactive waste from the closed Vermont Yankee nuclear power plant as well as from other nuclear power plant sites that are being decommissioned in the U.S.

8.

I have taught a course entitled Nuclear Power and Public Policy at Vermont Law School (2008-2013). I have been a member of the Keystone Center Nuclear Power Joint Fact Finding (June 2007) and the National Research Council of the National Academy of Sciences Committee on Alternatives to the

3 Indian Point Energy Center for Meeting New York Electric Power Needs (June 2006). I was also a member of the International Expert Panel advising the European Bank for Reconstruction and Development assessing the economic case for completing Khmelnitsky 2 and Rovno 4 (K2/R4) - two partly built, Russian designed 1,000 MW VVER nuclear units in Ukraine - to replace the two units still operating at Chernobyl after the 1986 accident (February 1997).

9.

I served as a member and sometime Chair of Vermonts Public Oversight Panel assessing the reliability of the Vermont Yankee nuclear power plant. I advised the Vermont Legislature and the Town of Wiscasset, Maine on issues related to spent nuclear fuel storage. I am also affiliated with the Regulatory Assistance Project, which provides assistance to state and federal energy regulatory commissions regarding economic regulatory policy and environmental protection issues.

10.

Between 1968 and 1977, I lived within 10 miles of the Maine Yankee nuclear power plant in Wiscasset, Maine. Maine Yankee began operating in 1972.

I have firsthand familiarity with a host communitys awareness and expectations in that era as to issues that it would confront when the nuclear power plant closed.

11.

In June 2018 I filed a declaration on behalf of the Environmental Law and Policy Center (ELPC) before the NRC as part of a petition questioning the

4 adequacy of the Decommissioning Trust Funds of the David Besse, Perry and Beaver Valley nuclear power plants.

12.

In preparing this report, I have reviewed Debtors March 2019 Decommissioning Trust Fund Reports, Debtors Disclosure Statement and Plan of Reorganization, Debtors License Transfer Application with the NRC, and various other documents related to decommissioning, Debtors nuclear power plant operations, and the bankruptcy proceedings. A list of documents I reviewed in forming my opinions is attached as Attachment 2.

B.

Summary of Opinions

13.

The unfunded decommissioning obligations of the Debtors nuclear plants in this case are potentially much larger than acknowledged by the Plan of Reorganization. As explained in this report, this is both because the costs of decommissioning are conservatively estimated and because there is significant uncertainty regarding future Decommissioning Trust Fund growth.

14.

The nuclear plant licensee that emerges from bankruptcy may not be able to fund decommissioning costs, thereby leaving a substantial risk that significant costs to eventually complete decommissioning will fall on utility customers and on taxpayers in Ohio and Pennsylvania. This risk is exacerbated by the fact that parent company FirstEnergy Corp. removes itself from responsibility for the four nuclear units upon approval of the Plan of Reorganization.

5

15.

The Court should not permit this proceeding to in any way diminish the assurance of adequate decommissioning and decommissioning funds on which the states and localities that have hosted these nuclear sites have long relied.

C.

Background to Decommissioning Cost Policy and Uncertainty Affecting the FirstEnergy Solutions Proposed Plan of Reorganization

16.

The Debtors Plan of Reorganization must meet the minimum decommissioning trust funding requirements of the NRC. The Debtors revised disclosure statement in support of their Plan of Reorganization states, at page 47, that three of their four nuclear units meet NRC minimum funding requirements or have a surplus funding amount. The disclosure statement further states The Debtors will cure any NDT (nuclear decommissioning trust) shortfalls as required by NRC regulations The calculation of whether the NDTs meet minimum funding requirements under NRC regulations is based on certain assumptions set forth in the Funding Status Reports, including the assumed use of the SAFSTOR method to decommission the units over a period of 60 years.

17.

Unfortunately, meeting NRC minimum funding requirements does not assure that costs of decommissioning Debtors nuclear power plants will be fully covered. This full coverage is the amount that the debtors will ultimately have to pay. They had this obligation when they filed for bankruptcy. They should not be permitted to use the bankruptcy process to diminish it. Furthermore, the

6 uncertainties associated with the funding needed to decommission FirstEnergy Solutions nuclear power plants are even larger than those disclosed in the Disclosure Statement and addressed by the Plan of Reorganization.

18.

Throughout its 60-year history, the commercial nuclear power industry has been afflicted by a chronic inability to forecast or to control the cost of major projects. Furthermore, this chronic inability only runs in one direction. The forecasted costs are always too low. This inability has often led to very expensive economic disappointment in light of assurances believed by host states before the projects were completed.

19.

Most of the nuclear power plants operating in the United States today received their construction permits in the 1960s and 1970s. The four operating First Energy Solutions nuclear power plants received construction permits between 1970 (Beaver Valley 1) and 1977 (Perry). In the 1960s and 1970s the focus of the nuclear power industry and its regulators was heavily on commercializing what was expected to be a fleet of as many as 1000 nuclear power reactors and related facilities built in the 30 years before the turn of the century.( In fact, the U.S.

reactor fleet peaked at some 110 units and now numbers 97. Disposing of high-level radioactive waste (primarily the spent fuel rods) received only limited attention. Decommissioning of closed (i.e. no longer operating) nuclear power plants received even less attention, even though in 1977 the General Accounting

7 Office observed that Cleaning up the remains of nuclear activities, however, presents special problems because of radioactivity and contamination which can endanger public health and safety. Some radioactivity remains hazardous for thousands of years making final and absolute disposal a difficult and expensive task1

20.

The general attitude of the nuclear power plant industry and its regulators toward radioactive waste issues, including decommissioning, at the time that the utilities building todays FirstEnergy Solutions plants received construction permits was that the necessary facilities and technologies would become available when they were eventually needed and that no special requirements needed to be imposed during the construction licensing process. Not until the late 1980s did the NRC create firm requirements for decommissioning trust finds to assure that private entities did not abandon their clean-up responsibilities to taxpayers or consumers, as by then had happened in a few instances. If any state or local government had thought to ask, they would have been assured that all high and low-level nuclear waste would be gone from the plant sites within a few years of the plants closing and that the land could rapidly be converted to other productive uses. One expectation might well have been that when the nuclear plants closed, a booming demand for nuclear energy would 1 Cleaning Up the Remains of Nuclear Facilities: A Multibillion Dollar Problem, General Accounting Office, June 16, 1977, p.i, https://www.gao.gov/assets/120/119181.pdf

8 assure that new types of nuclear facilities would be the most likely occupants of their sites.

21.

As nuclear power became more controversial and massive cost-overruns and nuclear plant project abandonments more commonplace, citizens living near nuclear power sites began to demand assurances that money would be available to clean up the nuclear power sites and allow their release for unrestricted other uses. In the late 1980s the NRC required that adequate decommissioning trust funds - carefully separated from all other utility operations - be established and maintained for every nuclear power plant. As to investor-owned reactors, the relevant state or federal utility regulators approved rates that provided for regular periodic contributions to these decommissioning funds. In short, these decommissioning trust funds have been intended by both federal and state regulators to keep faith with the states and localities hosting nuclear power plants to assure that the plants would be cleaned up and decommissioned and the communities would not be left holding a massive radioactive bag when the nuclear power plants ceased operations.

22.

As recently as 25 years ago, all of the nuclear power plants that are part of this proceeding were owned by vertically integrated utilities. The same company that owned the nuclear power plant sold electricity to business and residential retail customers, who had no choice of suppliers. Because regulated

9 utilities could recover their costs in rates charged to customers of the monopoly utility, the level of assurance offered by the rate-regulated decommissioning trust fund model was very high.

23.

A second goal of the public utility regulatory commission rate decisions with which I am familiar was to assign the costs of accumulating decommissioning trust funds as nearly as possible to the customers who were using the electricity from the nuclear power plants. Future electric customers who do not use the electricity from todays nuclear power plants should not, to the extent possible, bear the costs of these nuclear power plants in their electric bills when they are no longer operating. Assigning costs to customers who do not cause them is unfair and contravenes fundamental principles of economically efficient energy pricing.

24.

With the coming of electric industry restructuring and competition in electric power generation in the 1990s, many nuclear power plants, including those now owned by FirstEnergy Solutions, were conveyed to nonutility owners who sold the energy and capacity from their nuclear plants into competitive power markets instead of to monopoly end-use customers. Many of these reactors (including First Energy Solutions lost the ability to pass decommissioning fund contributions on to monopoly utility customers through regulated rates. These nonutility owners often ceased making contributions to the decommissioning trust

10 funds and represented to the NRC that growth in the investment value of the funds coupled with guarantees from parent companies or other surety arrangements would assure that the decommissioning funds would be sufficient to cover the forecasted decommissioning costs.

25.

Now, decades after the creation of the decommissioning trust funds, only four nuclear power plants have been completely decommissioned with the nuclear fuel removed from the sites. Three of these were small experimental or demonstration reactors. The third ran at partial power for only one week and was able to convey its fuel to another plant. Seven others have been decommissioned except for the spent fuel and other high-level radioactive waste, which remain on small areas of the original reactor sites awaiting creation of centralized storage or disposal in the U.S. These small waste storage sites must be monitored and guarded until the high-level radioactive nuclear waste and spent fuel are taken by the federal government, even as the rest of the original reactor site is released for other public uses.

26.

There are three decommissioning methods available to licensees under NRC regulations: DECON, SAFSTOR, and ENTOMB. DECON is immediate dismantling, where soon after the nuclear power plant closes, the equipment, structures, and portions of the facility containing radioactive contaminants are removed or decontaminated to a level that protects the public from any radiation

11 hazard and that permits release of the property and limitation of the NRC license to the spent fuel storage area. SAFSTOR is deferred dismantling, where a nuclear facility is maintained and monitored for decades (up to 60 years) during which some of the radioactivity decays away; afterwards, the plant is dismantled and the property decontaminated. Licensees may combine DECON and SAFSTOR, choosing DECON for some parts of the unit and SAFSTOR for the rest.

ENTOMB permanently encases radioactive contaminants on site in structurally sound material such as concrete. The facility is maintained and monitored until the radioactivity decays to a level permitting restricted release of the property. To date, no NRC-licensed facilities have requested this option.

27.

Regardless of the method of decommissioning, there is significant uncertainty regarding the costs of decommissioning and all other phases of nuclear waste storage and disposal as these items impact the proposed plan of reorganization. One example of this uncertainty - and the degree to which the industry and regulators have failed to forecast or control costs - is the removal of highly radioactive spent nuclear fuel from reactor sites. No site for away-from-reactor storage or disposal of substantial quantities of spent commercial reactor fuel has been licensed in the U.S. Nor is there a meaningful schedule for construction of such facilities. In 1982 Congress required the U.S. Department of Energy (DOE) to develop a permanent disposal site and take title to the spent fuel

12 by 1998. Despite spending more than $10 billion, DOE failed to do this. It has paid out $6.1 billion dollars to reactor owners for this failure and owes the reactor owners far more. High-level waste storage facilities are unlikely to be available before 2030. If and when such storage becomes available, there will be a queue of some sort for the available space, meaning that any particular reactor may have to wait additional years before being able to remove its spent fuel and free up the site completely. No permanent disposal site for high level waste is even on the horizon today.

28.

Nuclear power generation has fallen well short of the expectations of the 1960s and early 1970s largely because of the inability of either the industry or the government to forecast or to control schedules and costs. Indeed, after more than 100 cancellations of nuclear power plants under construction and cost overruns up to US$5 billion apiece, Forbes Magazine in 1985 called nuclear power the greatest managerial disaster in business historyonly the blind, or the biased, can now think that most of the money [$265 billion by 1990] has been well spent.

29.

Despite claims of vast improvements in design and construction techniques, 29 of 31 applications for construction permits pending or expected at the NRC ten years ago have since been cancelled, some after expenditures exceeding a billion dollars. The two surviving nuclear plants are at least five years behind schedule and $13 billion over budget.

13 D.

The unfunded decommissioning obligations of the Debtors nuclear plants in this case are potentially much larger than acknowledged by the Plan of Reorganization.

30.

The Atomic Energy Act, 42 U.S.C.A. § 2201(x)(1), and NRC regulations, 10 CFR § 50.75, contain provisions outlining nuclear power plant licensees responsibilities with respect to assurances that they will in fact have sufficient funds available to decommission their nuclear facilities. These regulations apply to Debtors nuclear decommissioning obligations, and Debtors method of compliance with these regulations is to put sufficient money into the Decommissioning Trust Funds. The amount Debtors are required to put in these Trust Funds is determined by a generally applicable formula based on nuclear power plant type and capacity. When, as here, a licensee plans to stop operating a nuclear power plant, site-specific nuclear decommissioning estimates must be developed.

31.

Here, Debtors decommissioning trust funds fall well short of the site-specific decommissioning cost estimates. At the beginning of 2019, the combined value of the four nuclear power plant decommissioning trust funds was $1.6 billion. The sum of the site-specific decommissioning cost estimates for the four nuclear power plants was $3.2 billion.

32.

Casting further doubt on Debtors ability to fully fund decommissioning costs is the uncertainty as to both the operating life of the four

14 nuclear power plants and the Debtors stated intention to place them SAFSTOR, which defers a significant portion of the cost 60 years into the future.

33.

Decommissioning cost data remains limited because no large operating reactors have been completely decommissioned, and just a handful have been decommissioned to the stage at which only the spent fuel remains. No commercial power reactor has completed a 60-year SAFSTOR decommissioning.

Furthermore, none of the few large plants where only high-level radioactive waste remains are merchant plants (i.e., plants whose cost recovery is not assured by utility rate regulation). All of the FirstEnergy Solutions nuclear power plants are merchant plants. Also, no U.S. boiling water operating reactor (BWR) nearly as large as the Perry nuclear plant has yet been decommissioned.

34.

On March 31, 2018, FirstEnergy Solutions and its subsidiaries FirstEnergy Nuclear Generation (NG) and FirstEnergy Nuclear Operating Company (FENOC) filed for bankruptcy. Bankruptcy is an unusual, but not unprecedented, event for nuclear plant owners. When it has occurred, it has more often than not been brought on by unexpected nuclear costs in excess of what markets or regulators would tolerate.

35.

While nuclear power plants have been involved in other bankruptcy proceedings, I know no U.S. precedent or experience involving decommissioning of a nuclear power plant being undertaken by a company in or emerging from

15 bankruptcy. Moreover, the NRC has little or no experience with assuring the adequacy of decommissioning funds in the context of a bankrupt licensee.

36.

FirstEnergy Solutions has announced plans to retire its nuclear plants soon: 2020 for Davis-Besse and 2021 for Beaver Valley 1 and 2 and for Perry.2 The early retirement of these plants means that the funds will be smaller than expected at the closing date. They will be depleted by major expenditures almost immediately, reducing the principal amount whose growth is required to pay for future expenses. They will no longer earn revenue from which future Decommissioning Trust Fund contributions might be made. Even under the SAFSTOR decommissioning alternative, pursuant to which the licensee has 60 years to complete decommissioning, significant expenditures often occur in the first 6 to 7 years. Having these expenditures deplete the Decommissioning Trust Funds immediately between 2021 and 2028 reduces the likelihood that the Decommissioning Trust Funds can accumulate the necessary funding amounts through growth in value.

37.

The use of SAFSTOR to defer the need for decommissioning expenditures (as well as to allow for decay of radioactivity) is a gamble that most nuclear power units not adjacent to operating plants have avoided. Prematurely closed plants such as Maine Yankee, Connecticut Yankee and Massachusetts 2 Beaver Valley 1 would close in 2021 rather than 2036. Beaver Valley 2 will close in 2021 rather than 2047.

Davis-Besse would close in 2020 rather than 2037. Perry would close in 2021 rather than 2026.

16 Yankee as well as the Zion 1 and Zion 2 nuclear power plants in Illinois preferred the certainty of prompt decommissioning under todays known rules and funding sources. They did not rely on hopes and gambles that the financial markets would provide the financial assurance that their past management had not.

38.

In recent years, companies have been created specially to buy closed nuclear power plants and their Decommissioning Trust Funds for the purpose of decommissioning them. Decommissioning has also been contracted out to companies unconnected to the plant owner. None of these projects have been completed, so forecasting costs based on these new corporate models is highly speculative.

39.

While site-specific cost studies are likely to improve the accuracy of decommissioning cost forecasts, they do not resolve all uncertainties. A number of cost and fund drivers are not under licensee control. Others, such as the extent of past radiation contamination, will not necessarily be revealed by such studies. This is a particular concern at the Davis-Besse nuclear power plant, where past management shortcomings have caused the NRC at times to consider it among the worst managed plants in the U.S.

40.

Future decommissioning costs are subject to many large policy uncertainties, including the land use and non-radiological standards of decommissioning that may be required by the host states and localities, the pace at

17 which the federal government is able to carry out its obligation to remove the spent fuel from the nuclear reactor sites, and the costs and availability of means to transport and dispose of radioactive waste in addition to spent fuel.3 Neither the licensees nor the NRC control these costs.

E.

The nuclear plant licensee that emerges from bankruptcy may not be able to fund decommissioning costs, thereby leaving a substantial risk that significant costs to eventually complete decommissioning will fall on utility customers and taxpayers in Ohio and Pennsylvania. This risk is exacerbated by the fact that parent company FirstEnergy Corp.

removes itself from responsibility for the four nuclear units upon approval of the Plan of Reorganization.

41.

Debtors Plan does not take into consideration the likelihood that decommissioning costs will be higher than those assumed by the NRC.

Decommissioning cost estimates have increased at a compound annual rate of about 5.5% in recent years, rising from a low of $55 billion in 2008 for investor-owned utilities to $89.0 billion in 2017.4 This rate of escalation is higher than that assumed in NRC regulations. Furthermore, calculations and critiques by credible independent entities indicate that there may be decommissioning-related costs 3 One example of these uncertainties with which I am quite familiar is the financial peril that caused the nations only licensed repository for Class B and Class C nuclear waste, an unavoidable product of nuclear plant decommissioning, to describe itself as a failing company in court filings in 2015 and 2016. Though the facility has since changed hands, its long-term economic viability is not assured.

4 See CALLAN INSTITUTE, 2018 Nuclear Decommissioning Study, https://www.callan.com/wp-content/uploads/2017/09/Callan-2017-NDT-Survey.pdf.

18 beyond those calculated according to NRC regulations5 and that the NRC formulae may omit some significant cost elements.6

42.

Despite these risks and uncertainties, the NRC issued a Preliminary Notification on April 4, 2018 stating: Decommissioning funding for each site continues to be sufficiently funded under NRC regulations. See ML18094A834.

As noted earlier, an NRC finding that a plants decommissioning trust fund meets NRC regulations is not a finding that this fund is likely to be sufficient to meet the full costs of site-specific decommissioning, especially if the nuclear power plants close as presently scheduled.

43.

The Environmental Law & Policy Center (ELPC) requested via a petition that the NRC take certain enforcement actions with regard to the FirstEnergy Solutions decommissioning funds. The disclosure petition notes that:

On January 8, 2019, the NRC director for nuclear reactor regulation issued a proposed decision denying the ELPCs petition, concluding that the petition has an insufficient basis on which to take enforcement action, issue civil penalties, or suspend a license, and explaining that the NRC has a thorough regulatory framework in place to monitor licensee decommissioning funding plans and address any shortfalls. In rejecting the ELPC petition, the NRC staff noted that both it and the federal government would be participating in the bankruptcy case 5 Id.

6 NRCs Oversight of Nuclear Power Reactors Could Be Further Strengthened, General Accounting Office, April 2012, https://www.gao.gov/assets/590/589923.pdf.

19 and would take action as necessary to ensure that the licensee remains in compliance with the agencys regulations. Unfortunately, being in compliance with NRC regulations cannot, by itself, assure that adequate funding is available to decommission these plants if they close between now and 2021, as their owners have announced. It is important that the NRC and the federal government are participating in this case, but their participation is not enough to assure that the proposed decommissioning funding is feasible under the proposed plan.

44.

On April 26, 2019, Debtors submitted a license transfer application to the NRC. On May 29, 2019, the NRC informed Debtors that they required additional information before accepting the application for review. In particular, the NRC noted a decommissioning trust fund shortfall of $78 million for Beaver Valley Unit 1. Before accepting the application, the NRC required Debtors to explain if those funds would be available at the time of the license transfer, because any shortfall in decommissioning funding must be corrected by the time of the transfer to demonstrate compliance with NRC decommissioning financial assurance requirements.7

45.

Debtors informed the NRC that they would remedy the shortfall, but did not explain how. Rather, Debtors assured the NRC that they would submit a supplement to the license transfer application describing the proposed funding 7 NRC Supplemental Information Request, May 29, 2019, ML19143A073.

20 mechanism to address any shortfall once that mechanism has been selected.8 As of this writing, Debtors have not submitted the supplement.

46.

Aside from the open question of how Debtors will meet their decommissioning funding requirements, the license transfer process involves several procedural steps and could include a public hearing on the matter. While Debtors state their intention to consummate the license transfer in the fourth quarter of 2019, NRC staff does not expect to complete the review of the application before October 2019. It remains to be seen whether additional requests for information or public engagement will lengthen that timeline. Furthermore, the NRC has not committed to any particular remedies in this review, and it is not clear how the agency would address large decommissioning trust fund shortfalls.

47.

Parental guarantees from FirstEnergy Corp. have in the past been used to make up for decommissioning fund shortfalls. It is my understanding that under Debtors Proposed Plan of Reorganization, FirstEnergy Corp. will provide no such guarantees. Nor are there other specific commitments to make up the large and inevitable differences between the Decommissioning Trust Fund amounts and the decommissioning cost estimates that will occur if these nuclear plants close early, as FirstEnergy Solutions has said that they must without legislative intervention that is uncertain as of this writing.

8 Debtors Response to Supplemental Information Request, May 31, 2019, ML19151A531.

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48.

FristEnergy Corp. appears to be trying to reduce or even escape its exposure as a parent company guarantor.9 Indeed, FirstEnergy Corp. now lists only TMI-2 as a nuclear facility for whose decommissioning costs it may be liable,10 though it has in past acknowledged a potential liability for the decommissioning costs of the Davis-Besse, Perry and Beaver Valley 1 and 2 nuclear power plants. FirstEnergy Corp. CEO Chuck Jones has been described as saying that FirstEnergy Corp., expects to wash its hands of the troubled generation subsidiary in the FirstEnergy Solutions bankruptcy filing.11 F.

The Court should not permit this proceeding to in any way diminish the assurance of adequate decommissioning and decommissioning funds on which the states and localities that have hosted these nuclear sites have long relied.

49.

The state and local governments with which I am familiar have strongly preferred that closed nuclear power plants be decommissioned as quickly as possible, primarily for economic redevelopment reasons and to make the land available for other purposes. Few communities hosting nuclear plants (and none where the plants were sited before the 1980s) were told that decommissioning might last for many decades after the plants were closed. The SAFSTOR option, if 9 FirstEnergy Corp, Form 10Q for the period ending March 31, 2018, pp. 3.

10 Form 10Q, p. 37. TMI 2 will be a unique decommissioning project. Experience elsewhere will be of limited assistance in trying to predict the costs. This is the site of the 1979 Three Mile Island accident. The plant only operated for one year before the accident and has not operated since. The used fuel has been removed from the site.

However, the accident released far more radioactivity than will be encountered at other sites, and much of it remains in the containment and elsewhere.

11 Anya Litvak, FirstEnergys Bruce Mansfield and Beaver Valley likely headed for bankruptcy next month, Pittsburgh Post-Gazette, February 21, 2018, C:\\Users\\Perubrad\\Documents\\Apeter\\ELPC\\NRC\\Declaration\\2a.

Pittsburgh Post-Gazette.pdf.

22 it is completely legal, is a breach of the faith of any state or locality that expected to be able to devote the entire nuclear power plant site to other uses within a decade or two of the plants closing.

50.

Host states and local communities have power to promulgate decommissioning standards as long as they do not regulate radiological health and safety matters. The NRC regulates and provides oversight only over the radiological aspect of the decommissioning process until it agrees to terminate the license. Economics, land planning or aesthetics are examples of areas in which states and localities may impose requirements.12

51.

As of July 1, 2019, the NRC announced that it would be holding 11 public meetings at sites that are in the process of decommissioning nuclear units.

The announcement stated: The purpose of the meetings is to discuss best practices for community boards that would provide advice on decommissioning of the facilities, as required under the Nuclear Energy Innovation and Modernization Act signed into law in January.13 The state and local jurisdictions adjacent to the operating nuclear plants in this case have not yet promulgated their decommissioning standards and requirements, which may be costly.

12 The NRC notes that: Activities that take place after the licensee has demonstrated that the radiological hazard has been removed, and after the license has been terminated, are not within the jurisdiction of the NRC. The NRC has no oversight of these activities once the license is terminated.

https://www.nrc.gov/waste/decommissioning/faq.html 13 https://www.exchangemonitor.com/nrc-readies-public-meetings-decommissioning-advisory-boards/?printmode=1

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52.

If FirstEnergy Corp. and FirstEnergy Solutions fail to reasonably assure fully sufficient funding for all decommissioning contingencies, then future ratepayer and taxpayers may be called on to make up shortfalls in the hundreds of millions of dollars. Otherwise, the consequences of inadequate funding will fall upon the neighbors of the nuclear power plants through delayed decommissioning.

These are precisely the results that decommissioning legislation and regulation has long sought to avoid.

53.

This concludes my report.