ML24075A173
| ML24075A173 | |
| Person / Time | |
|---|---|
| Issue date: | 03/18/2024 |
| From: | NRC/NRR/DANU/UNPL |
| To: | |
| Cindy Montgomery, NRR/DANU | |
| Shared Package | |
| ML24075A168 | List: |
| References | |
| Download: ML24075A173 (1) | |
Text
1 Alternatives to the Use of Credit Ratings 10 CFR Part 30 Final Rule
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Background===
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank)
NRC Decommissioning Funding Assurance Requirements and the Use of Credit Ratings
NRC Regulations Impacted by Dodd-Frank
The NRC's Rulemaking - Alternatives to the Use of Credit Ratings Agenda 2
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Background===
What is the Dodd-Frank Act?
Which NRC regulations are impacted?
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SEC. 939. REMOVAL OF STATUTORY REFERENCES TO CREDIT RATINGS.
SEC. 939A. REVIEW OF RELIANCE ON RATINGS.
Each Federal Agency shall:
- 1. Review any regulation that requires use of credit-worthiness and references regarding credit ratings
- 2. Modify Regulations - remove reference to or requirement of reliance on credit ratings and substitute a standard of credit-worthiness that each respective agency shall determine as appropriate for such regulations
- 3. Transmit a report to Congress containing a description of modifications made to its regulations Dodd-Frank Impact on Federal Agency Regulations 4
NRC Decommissioning Funding Assurance Requirements and Surety Instruments NRC decommissioning funding assurance regulations:
Byproduct Material Licensees - 10 CFR 30.35(f)(2)
Source Material Licensees - 10 CFR 40.36(e)(2)
Production and Utilization Licensees -10 CFR 50.75(e)(1)(iii)
Special Nuclear Material Licensees - 10 CFR 70.25(f)(2)
Spent Fuel, HLW and GTCC Licensees - 10 CFR 72.30(e)(2)
Surety Instruments Prepayment External Sinking Fund Other Surety Methods
Surety bond
Letter of credit
Insurance Self Guarantee (SG) and Parent Company Guarantee (PCG) 5
NRC Regulations Impacted by Dodd-Frank 10 CFR Part 30, Appendix A - Parent Company Guarantee 10 CFR Part 30, Appendix C - Financial Tests and Self Guarantee (Corporations) 10 CFR Part 30, Appendix E - Financial Tests and Self Guarantee (Hospitals, Universities, Nonprofit Colleges) 6
The NRC's Rulemaking -
Alternatives to the Use of Credit Ratings 7
The Rule will:
Remove Bond Rating Criteria for use of Guarantee Mechanisms currently cited in Appendices A, C, E
Those criteria are AAA, AA, A, or BBB Standard and Poor's rating and Aaa, Aa, A, or Baa Moody's rating.
Replace with new creditworthiness criteria standard
"Creditworthiness that demonstrates an adequate capacity to provide full and timely payment of the amount guaranteed, if necessary."
NRC to assess creditworthiness and make determination based on information submitted by the applicant/licensee
As proposed Financial Tests Appendix A Parent Company To pass the financial test, the parent company must meet the criteria of either paragraph A.1 or A.2. The proposed rule impacts the financial test in A.2 which includes:
Creditworthiness that demonstrates an adequate capacity to provide full and timely payment of the amount guaranteed, if necessary; and
Total net worth at least six times the amount of decommissioning funds being assured by a parent company guarantee for the total of all nuclear facilities or parts thereof (or prescribed amount if a certification is used); and
Tangible net worth of at least $21 million; and
Assets located in the United States amounting to at least 90 percent of the total 8
As proposed Self Guarantee for Commercial Companies in Appendix C
(1) Tangible net worth of at least $21 million, and total net worth at least 10 times the amount of decommissioning funds being assured by a self-guarantee for all decommissioning activities for which the company is responsible as self-guaranteeing licensee and as parent-guarantor for the total of all nuclear facilities or parts thereof (or the current amount required if certification is used) (and)
(2) Assets located in the United States amounting to at least 90 percent of total assets or at least 10 times the amount of decommissioning funds being assured by a self-guarantee, for all decommissioning activities for which the company is responsible as self-guaranteeing licensee and as parent-guarantor for the total of all nuclear facilities or parts thereof (or the current amount required if certification is used) (and)
(3) Creditworthiness that demonstrates an adequate capacity to provide full and timely payment of the amount guaranteed, if necessary.
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As proposed Appendix E Criteria for Nonprofit Colleges, Hospitals, and Universities (2) Creditworthiness that demonstrates an adequate capacity to provide full and timely payment of the amount guaranteed, if necessary.
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Final Rulemaking Once the final rule is issued, licensees will have one year from issuance to comply with the new requirements.
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Questions?
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