[Congressional Record Volume 145, Number 147 (Tuesday, October 26, 1999)]
[Senate]
[Pages S13182-S13184]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DOMENICI:
  S. 1793. A bill to ensure that there will be adequate funding for the 
decommissioning of nuclear power facilities; to the Committee on 
Environment and Public Works.


                 NUCLEAR DECOMMISSIONING ASSURANCE ACT

 Mr. DOMENICI. Mr. President, in an era of deregulation, it is 
imperative that we focus on the public health and safety concerns that 
may surface in the rush to eliminate excess costs in energy production.
  One such concern involves the decommissioning and decontamination 
(D&D) of retired nuclear power plants. The nuclear industry confronts 
not only the difficulty of providing a competitive energy source in a 
changing regulatory environment, the funds accumulated to date to cover 
D&D costs are not sufficient to ensure proper cleanup unless measures 
are put into place that continue fee collection for the duration of 
each plant's service life.
  This bill establishes a framework to ensure adequate fee collection 
to cover nuclear decommissioning and decontamination costs in a 
changing regulatory environment.
  Today, nuclear generating units provide almost a quarter of the 
country's annual electricity generation. Over the next twenty years, a 
substantial number of these nuclear power plants reach the end of their 
40-year licenses. Some will apply for a license renewal, which should 
be a straightforward and expeditious process.
  All plants, at some point, however, will face retirement. Whenever 
retirement occurs, decommissioning follows--this requires safe 
dismantling and disposal of all irradiated components.
  Upon acquiring a license to operate a nuclear power plant, licensees 
also commit to decommission the plant upon closure. Utilities are 
required to set aside funds for decommissioning.
  In the past, State regulators generally allowed fee collection for 
decommissioning obligations through rates over the entire service lives 
of the nuclear power plants. This method spread the costs of 
decommissioning the plant to all the customers served by the plant over 
the entire course of the plant's service life.
  As the electricity market moves toward deregulation, the nuclear 
industry confronts a profound problem. First, fee collection was 
structured such that accrual of sufficient funds required the full life 
of the plant, and regulators often undercut the amount of fees 
collected in order to keep energy prices down.
  Second, under funding also results from escalating decommmissioning 
costs due to expanded regulatory requirements, lower than expected 
growth due to loss of load and customer exodus, rate settlements, and 
the lag in collecting funds due to ratemaking delays.
  Lastly, decommissioning cost recovery for most utilities, including 
nuclear, is ``back-end loaded.'' Meaning, cost recovery is designed to 
generate much larger contributions to the fund in latter years.
  In short, the funding of decommissioning has not kept pace with the 
aging of the units.

[[Page S13183]]

  For example, today, a nuclear plant licensee of a 15-year-old plant 
would have collected only approximately 5 percent of the funds 
necessary to meet decommissioning obligations. In addition, these 
nuclear plant licensees currently have no means of ensuring that they 
can continue to collect fees from consumers to ensure decommissioning 
obligations are met.
  The magnitude of the potential shortfall in cost recovery for 
decommissioning obligations is staggering. On an aggregate basis, 
utilities' decommissioning trust funds currently are funded at 
approximately 25 percent of the estimated costs--about $9 billion. 
Nuclear plants, however, are approximately 43 percent through their 
expected service lives. Total projected D&D costs will exceed $35 
billion, leaving a current shortfall of about $26 billion.
  The monumental size of this problem is underscored by the following 
comparison: FERC allowed recovery of $10 billion of total stranded 
costs during the restructuring of the natural gas industry. the nuclear 
industry's current dilemma is two and a half times greater.
  Two recent publications underscore the critical need to provide 
assurance that decommissioning funds can be collected and are adequate 
to cover costs. A study which I chaired by the Center for Strategic and 
International Studies (CSIS) entitled The Regulatory Process for 
Nuclear Power Reactors addressed this issue.
  The CSIS report stated, ``Restructuring of the electric utility 
industry could exacerbate the problem of adequate decommissioning 
funding and could threaten the ability of nuclear power plant owners to 
recover funds for decommissioning and for nuclear waste disposal in 
electric rates.'' The June 1999 report Nuclear Power Plant 
Decommissioning Under Utility Restructuring by the National Conference 
of State Legislatures strongly urged a ``review of current 
decommissioning legislation, especially if considering or passing 
deregulation.
  The legislation I am introducing today creates a backstop to ensure 
that decommissioning fees can continue to be collected regardless of 
forthcoming changes in the regulatory environment. Because full, safe 
decommissioning is vital to public health and safety, this legislation 
is required to ensure that adequate funds for decommissioning are 
available to power plant licensees upon closure of their nuclear 
plants.
  Let me briefly describe the mechanism established in this bill to 
ensure that adequate funds are collected.
  First, nuclear power plant licensees are allowed to petition the NRC 
for determination of adequacy of their nuclear decommissioning trust 
funds. This petition process allows a full review of licensees' 
decommissioning costs and available funding. The petition process 
allows full public notice and comment.
  In other words, the NRC will determine each licensee's current and 
ongoing revenue requirement necessary to ensure adequate funds are 
accumulated in the trust fund at the appropriate time.
  Second, the Act amends the Federal Power Act to enable licensees to 
apply to the FERC, in the case of wholesale rates, or state 
commissions, for retail rates, for an order establishing rates or 
charges for collection of revenues necessary to meet NRC determined 
requirements.
  Depending on the consumer base served by the nuclear licensee, either 
the FERC or the state PUCs will be required to incorporate the NRC 
determined decommissioning cost and revenue requirements in their rate 
structure.
  This translates into a negligible fee added to consumers' monthly 
bills that will guarantee adequate cleanup upon closure of the nuclear 
plants that met their energy needs. This measure is simple, pragmatic, 
and safeguards our safety and health needs.
  We must act now to ensure adequate funding for the safe 
decommissioning of nuclear units. The awkward jurisdictional position 
of this issue--caught in a gap between federal agencies and state 
regulatory authorities--creates a situation in which inconsistent 
regimes interfere with federally mandated safety measures.
  This situation presents an unacceptable uncertainty and risk for the 
health and safety of the citizens and for the economy. As a matter of 
public policy, to protect public health and safety, as well as to 
preserve sound energy and economic policy, adequate funding of 
decommissioning obligations must be assured.
  This act addresses this concerns and creates a practical mechanism to 
ensure the decommissioning funds will be adequate to safe closure of 
nuclear plants in the future.
  Mr. President, I ask that the bill be printed in the Record.
  The bill follows:

                                S. 1793

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Nuclear Decommissioning 
     Assurance Act of 1999''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) full, safe decommissioning of nuclear power plants is a 
     compelling Federal interest, in that--
       (A) the public health and safety and the protection of the 
     environment can be guaranteed only if nuclear power plants 
     are adequately decommissioned at the end of their useful 
     lives; and
       (B) decommissioning obligations cannot be avoided, 
     abandoned, or mitigated, as a matter of public health and 
     safety;
       (2) electric utilities that own nuclear power plants must 
     be able to collect adequate revenues to ensure that the 
     utilities can satisfy the obligation to fully decommission 
     nuclear power plants in accordance with standards established 
     by the Nuclear Regulatory Commission;
       (3) the authority of the Nuclear Regulatory Commission to 
     ensure that utilities are able to collect adequate funds so 
     that they can satisfy the decommissioning obligation is 
     limited by the fact that the Commission does not directly 
     establish rates for electric services;
       (4) many nuclear decommissioning trust funds are not 
     adequate to meet decommissioning obligations, and the current 
     electric rates of collection are not adequate to ensure that 
     there will be adequate funds at the time of decommissioning.
       (5) potential restructuring of the electric utility 
     industry will exacerbate the problem, because competitive 
     pressure is expected to be placed on current rates, thereby 
     threatening the ability of utility entities to recover funds 
     for decommissioning in electric rates; and
       (6) there is a Federal interest in establishing a national 
     policy to ensure that electric utilities that own nuclear 
     power plants can recover funds sufficient to satisfy the 
     decommissioning obligation.
       (b) Purposes.--The purposes of this Act are--
       (1) to ensure that electric utilities that own commercial 
     nuclear electric generating plants will be able to satisfy 
     the obligation to decommission the plants, as established by 
     the Nuclear Regulatory Commission; and
       (2) to provide rate making bodies, including the Federal 
     Energy Regulatory Commission, with sufficient authority to 
     provide for recovery of funds for decommissioning.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Decommission.--The term ``decommission'' has the 
     meaning given the term in section 50.2 of title 10, Code of 
     Federal Regulations (or any successor regulation).
       (2) Decommissioning obligation.--The term ``decommissioning 
     obligation'' means the obligation to pay costs associated 
     with the measures necessary to ensure the continued 
     protection of the public from the dangers of any residual 
     radioactivity or other hazards present at a facility when a 
     nuclear unit is decommissioned.
       (3) Nuclear decommissioning trust fund.--The term ``nuclear 
     decommissioning trust fund'' has the meaning given the term 
     ``external sinking fund'' in section 50.75(e)(1)(ii) of title 
     10, Code of Federal Regulations (or any successor 
     regulation).
       (4) State Commission.--The term ``State commission'' has 
     the meaning given the term in section 3 of the Federal Power 
     Act (16 U.S.C. 796).

     SEC. 4. NUCLEAR DECOMMISSIONING ASSURANCE DETERMINATION BY 
                   THE NUCLEAR REGULATORY COMMISSION.

       (a) Petition.--
       (1) In general.--A licensee under part 50 of title 10, Code 
     of Federal Regulations may petition the Nuclear Regulatory 
     Commission for a determination of whether--
       (A) adequate amounts have been deposited or are being 
     deposited in the nuclear decommissioning trust fund of the 
     licensee; and
       (B) the future funding for any nuclear power plant owend in 
     whole or in part by the licensee is assured.
       (2) Contents.--A petition under paragraph (1) shall 
     disclose--
       (A) the licensee's current minimum amount established by 
     the Nuclear Regulatory Commission under section 50.75 of 
     title 10, Code of Federal Regulations for each facility for 
     which the licensee holds a license;
       (B) the currently effective rates to recover costs for 
     decommissioning obligations as established by the Commission 
     or State commissions, as appropriate;
       (C) the amount that has been deposited in the nuclear 
     decommissioning trust fund;

[[Page S13184]]

       (D) the planned rate and timing of collection of the costs 
     of the decommissioning obligation through the projected 
     useful life of the facility; and
       (E) any other information pertinent to the continuing 
     assurance of funding of the nuclear decommissioning trust 
     fund.
       (b) Determination.--Not later than 180 days of receipt of a 
     petition under paragraph (1), the Nuclear Regulatory 
     Commission shall issue a determination regarding whether the 
     nuclear decommissioning trust fund and the currently approved 
     level of rates to recover the costs of the decommissioning 
     obligation are adequate to ensure full and safe 
     decommissioning of the facility.
       (c) Considerations.--In making a determination under 
     subsection (b), the Nuclear Regulatory Commission shall 
     consider.--
       (1) the current level of funds in the nuclear 
     decommissioning trust fund;
       (2) the adequacy of the currently approved rates to recover 
     the costs of the decommissioning obligation;
       (3) the assurance of continuing recovery of such costs 
     through rates;
       (4) the timing of the recovery of such costs relative to 
     the projected useful life of the plant; and
       (5) any other information that the Nuclear Regulatory 
     Commission considers pertinent to a determination of the 
     necessary assurance of adequate funding.
       (d) Adequacy of Minimum Amounts.--Nothing in this Act 
     precludes the Nuclear Regulatory Commission from revising or 
     reconsidering the adequacy of the minimum amounts established 
     under section 50.75(c) of title 10, Code of Federal 
     Regulations.
       (e) Notice.--The Nuclear Regulatory Commission shall issue 
     notice of its finding to the licensee, the Federal Energy 
     Regulatory Commission, and any other party of record.

     SEC. 5. AMENDMENT OF THE FEDERAL POWER ACT.

       (a) Declaration.--Section 201 of the Federal Power Act is 
     amended by adding at the end the following:
       ``(h) Declaration Regarding Decommissioning.--The 
     decommissioning of nuclear power plants licensed by the 
     Commission is affected with a public interest, and the 
     Federal regulation of matters relating to decommissioning of 
     nuclear power plants, to the extent provided in this part, is 
     necessary in the pubic interest.''.
       (b) Nuclear Decommissioning Assurance.--Part II of the 
     Federal Power Act (16 U.S.C. 824 et seq.) is amended by 
     adding at the end the following:

     ``SEC. 215. NUCLEAR DECOMMISSIONING ASSURANCE.

       ``(a) Cost Recovery in Wholesale Rates.--
       ``(1) In general.--To the extent that the costs of a 
     decommissioning obligation are recovered in wholesale rates, 
     an electric utility that owns a nuclear power facility in 
     whole or in part may apply to the Commission for an order 
     approving rates and charges in connection with the wholesale 
     transmission or sale of electricity to ensure collection of 
     revenues necessary to ensure that there will be adequate 
     funding to satisfy the decommissioning obligation of the 
     electric utility in establishing rates and charges.
       ``(2) Nuclear decommissioning assurance determination.--In 
     a proceeding under this section, any nuclear decommissioning 
     assurance determination made in a proceeding under section 4 
     of the Nuclear Decommissioning Assurance Act of 1999 shall be 
     conclusive.
       ``(3) Denial of request.--If the Commission, by order or by 
     failure to act with 180 days of the filing of a petition, 
     denies in whole or in part an application under paragraph (1) 
     or otherwise fails to allow collection of costs in rates 
     necessary to ensure adequate funding under section 4 of the 
     Nuclear Decommissioning Assurance Act of 1999, the electric 
     utility may seek review of the action under section 313(b).
       ``(b) Cost Recovery in Retail Rates.--To the extent that 
     the costs of the decommissioning obligation are recovered in 
     retail rates, in a proceeding before a State commission 
     initiated by an electric utility that owns a nuclear power 
     plant in whole or in part for an order approving rates and 
     charges in connection with the distribution of electricity, 
     any nuclear decommissioning assurance determination made by 
     the Commission under section 4 of the Nuclear Decommissioning 
     Assurance Act of 1999 shall be given due consideration, so as 
     to ensure collection of revenues necessary to ensure adequate 
     funding of the nuclear-owning utility's nuclear 
     decommissioning obligations.
       ``(c) Rates, Terms, and Conditions.--
       ``(1) In General.--The Commission and the State commissions 
     shall establish rates, terms, and conditions in response to 
     an application under subsection (a) or (b) not later than 180 
     days after the date of submission of the application.
       ``(2) Failure to act.--For purposes of section 313(b), 
     failure of the Commission to comply with paragraph (1) shall 
     be considered a denial and shall be appealable as a final 
     agency action.
       ``(d) Denial of Request by State Commission.--
     Notwithstanding any other provision of law, if a State 
     commission, by order or by failure to act within 180 days of 
     the filing of a petition, denies in whole or in part the 
     request under subsection (b) or otherwise fails to allow 
     collection of costs in the rates necessary to ensure adequate 
     funding under section 4(b) of the Nuclear Decommissioning 
     Assurance Act of 1999, the electric utility may apply to the 
     United States district court for an order requiring the State 
     commission to establish rates, terms, and conditions 
     necessary to ensure adequate funding under section 4(b) of 
     the Nuclear Decommissioning Assurance Act of 1999.''.
                                 ______