ML20058P938
| ML20058P938 | |
| Person / Time | |
|---|---|
| Issue date: | 08/15/1990 |
| From: | Carr K NRC COMMISSION (OCM) |
| To: | Young D HOUSE OF REP. |
| Shared Package | |
| ML20058P940 | List: |
| References | |
| NUDOCS 9008210023 | |
| Download: ML20058P938 (2) | |
Text
.
- "%g.
o,,
UNITED STATES NUCLEAR REGULATORY COMMISSION-w AsHINGTON, 0, C. 20655
%,.....,,od August ' 15, 1990 i
- CHAIRMAN 1
The Honorable Don Young U.S. House of-Representatives Washington, D.C.
~20515
Dear Congressman-Young:
1:am responding 'to your letter of July 18, 1990, in which you k
expressed concern-about1e statement in the-U.S. Nuclear Regulatory Commi ssion 's (NRC 's), fina 1 Regu la tory 1 Guide t " Assuring the Availability of_. Funds for Decommissioning-Nuciaar Reactors."
.Whi-le I cannot comment;on the intent of Congressiin revising the Internal Revenue Code in 1984, I can explain 7the basis for the NRC position on-reliance.on estinated tax l deductions toifund' decommissioning.
Before the Commission promulgate'd its decommissioning regulations in 1988, it carefelly considered the options to' ensure that funds would be available.
Irr the preamble to~itsc final"rulema king: on-i decommissioning, the Commission' concluded that:-
1 the: internal reserve does not provide 1 reasonable assurance that funds will be available.when.needed, to pay the costs of decommissioning and herice doesf not provide reasonable 1 assurance that decommissioning, i
will:be carried out inna: manner which protects"public health and safety.
Accordingly, the proposedirule7 har been modified to eliminate the-internal reserve as a possible method of providing funds formdecommissioning, g
a In reaching this conclusion, the Commission noted 'that:
although the Atomic-Energy Act and Energy Reorganization Act do cot. permit the FRC to regulate i
rates or to supersede:the decisionsLof State or Federal agencies respecting the economicsHof nuclear;
- anwar, they de authcr r
'Sc o!RC t: ^:!n 8 ': tr -
d regulatory actions may 1be necessary, to protect the public health _and safety, including the promulgation of rules prescribing allowable funaing methods for meeting. decommissioning costs.
'53 FR 24018 at p. 24033, June 27, 1988' Sections 50.75(e)(1)(ii)'and 50.82(c)('1) of 10 CFR also provide that funds needed for decommissioning are to be accumulated.by the time of permanent shutdown.
N
/01 Qnn*as g#
900e210023 900eis PDR COMMS NRCC CORRESPONDENCE PDC I
.. - ~
' l The Commission believes that relying on future tax deductions which may become available at the time the plant is decommissioned is a form of internal reserve and thus prohibited by the NRC's decommissioning rule.
Funds generated by tax deductions would i
flow directly to a company and thus, by definition, are internal i
rather than external reserves.
In addition, such tax deductions would not accrue until after decommissioning work was completed for a particular tax year.
Thus, such tax deductions could not be used to satisfy the regulatory recuirement that necessery decommissioning funds be accumulated before the start of the decommissioning process.
We also note that decommissioning activities will not commence until weli into the next century.
It is difficult to predict both future tax rates and a utility's financial ability to convert tax deductions into astual funds that the utility could use to finance decommissioning activities if, for example,
't dic not have sufficient income from which to ceduct decor.missioning expenses.
We believe that the value of tax i
deductions so far in the future is subject to considerable uncertainty, thereby further reducing the assurance that-funds may be available for decommissioning.
It should be noted that our decommissioning funding regulations in Part 50 impose requiremd0rs with regard to funds needed for the safe removal of a nucleet facility from service and the reduction of residual radioactivity to a level that permits release of
e property for unrestricted use and termination of the license.
Those regulations do not impose requirements on funding such activities as demolition of non-radioactive structures, site restoration, and removal of spent fuel f rom the reactor.
These latter activities have been estimated to cost as much as $50 million to $60 million at some sites.
Utilities would not be restricted by the NRC in using f unds generated from tax deductions for these types of activities.
In conclusion, we believe that the staff guideline c u r r e cc '.y 1
interprets the Atomic Energy Act of 1954, as amendea, the Energy l
Reorganization Act of 1974, as amended, and the Commission's l
existing decommissioning funding regulations.
I trust that this exolains the basis for the NRC position in this matter.,
+
Sincerely,
-w Kenneth M. Carr
.