| (a) Purpose. The purpose of this section is to establish
the terms for power generation companies (PGCs) that are licensed
by the Nuclear Regulatory Commission for using a PGC decommissioning
trust to satisfy the financial assurance requirements for decommissioning
a nuclear generating unit and to delineate the rights and obligations
of PGCs electing to use a commission-approved method for providing
funds from Texas customers for decommissioning a nuclear generating
unit, as a means of complying with nuclear decommissioning financial
assurance requirements.
(1) A PGC is not required to use the methods set out
in this section and may discontinue the use of the methods set out
in this section, if it chooses to satisfy the financial assurance
requirements of the federal Nuclear Regulatory Commission by using
other methods acceptable to the Nuclear Regulatory Commission.
(2) A PGC decommissioning trust established in accordance
with this section is separate from a Nuclear Decommissioning Trust
created under §25.303 of this title (relating to Nuclear Decommissioning
Following the Transfer of Texas Jurisdictional Nuclear Generating
Plant Assets).
(b) Applicability. A PGC owning all or a portion of
a qualifying nuclear generating unit may use a PGC decommissioning
trust as an external sinking fund in compliance with this section,
provided that the use of the methods of financial assurance set out
in this section shall be available only to the first six nuclear generating
units the construction of which begins on or after January 1, 2013,
and before January 1, 2033, that elect to use a PGC decommissioning
trust.
(c) Definitions.
(1) Decommissioning--includes the safe decommissioning
and decontamination of a nuclear generating unit, equipment, and materials
consistent with federal Nuclear Regulatory Commission requirements.
(2) PGC decommissioning trust--Funds that are contained
in one or more external and irrevocable trusts created for the purpose
of protecting and holding revenue collected from a PGC to cover the
costs of decommissioning a Texas jurisdictional nuclear generating
plant at the end of its useful life. A PGC decommissioning trust is
a type of external sinking fund that is established and maintained
by setting aside funds periodically in an account segregated from
the PGC's assets and outside the PGC's administrative control in which
the total amount of funds would be sufficient to pay decommissioning
costs at the time termination of operations is expected.
(3) Retail electric customer--A retail electric customer
in a geographic area of Texas in which retail customer choice has
been implemented, or a retail electric customer of a municipally-owned
utility or electric cooperative that has an agreement to purchase
power from a nuclear generating unit.
(4) Under construction--A nuclear generating unit for
which the PGC has initiated the pouring of safety-related concrete
for the reactor building.
(d) Application. If a PGC elects to use a PGC decommissioning
trust, the PGC shall submit an application to the commission for an
order establishing the amount of annual decommissioning funding and
approving trust agreements. A PGC may combine applications for more
than one qualifying nuclear generating unit. An application must contain
the following information:
(1) Identification of each nuclear generating unit
included in the application;
(2) Quantification of the PGC's percentage of ownership
of each unit;
(3) Decommissioning cost study using the most currently
available information on the cost of decommissioning each unit as
set out in subsection (h)(2) of this section;
(4) Funding analysis identifying the expected amount
of annual decommissioning funding determined as set out in subsection
(i) of this section;
(5) Description of the method to be used to satisfy
the state assurance obligation set forth in subsection (k) of this
section, including any guarantee agreements, support agreements, credit
agreements, or letters of credit or surety bonds;
(6) Agreements with an institutional trustee and investment
manager to manage the PGC decommissioning trust that are consistent
with this section and the terms and conditions required by the federal
Nuclear Regulatory Commission; and
(7) Projected date for beginning funding of the PGC
decommissioning trust, which must be prior to the commencement of
initial fuel load and commercial operation of the nuclear generating
unit.
(e) Commission Review.
(1) The commission staff will endeavor to recommend
approval, amendment, or disapproval of an application setting annual
decommissioning funding and financial agreements to implement the
trust requirements within 120 days of receipt of a sufficient application,
unless a hearing on the application is required.
(2) A request for hearing shall be filed by the date
specified by the presiding officer which shall be no more than 60
days after the filing of the application. If a hearing is scheduled,
the commission will endeavor to issue a final order within 180 days
after the filing of a request for hearing.
(3) If no hearing is requested, the commission staff
concludes that the application setting annual decommissioning funding
and the trust agreements meet all requirements of this section, and
the commission staff recommends approval, the application may be approved
administratively or informally pursuant to §22.35 of this title
(relating to Informal Disposition).
(4) If the commission staff recommends an amendment
to the funding or trust agreements, within 14 days after filing of
staff's recommendation, the PGC shall either file an amended application
incorporating the staff's proposed amendments or request a hearing.
(5) If no hearing is requested and the PGC files an
amended application that meets all requirements of this section and
incorporates the staff recommendations, the application may be approved
administratively or informally pursuant to §22.35 of this title.
(6) If the commission staff recommends denial and the
PGC requests a hearing, or if the PGC does not file an amended application
incorporating staff's recommendations within 14 days, the request
shall be docketed as a contested case proceeding to approve, modify,
or reject the application.
(f) Order. An order approving the application shall
establish the amount of annual funding necessary to meet the decommissioning
obligations for the nuclear generating unit over the unit's operating
license period as established by the federal Nuclear Regulatory Commission
or over a shorter period of time at the election of the PGC.
(g) Annual Reports. On or before May 1 of each year,
each PGC for which the commission has approved a funding amount and
trust agreements under this section shall file an annual report for
the prior year using a form approved by the commission. The report
shall provide the status of the PGC's decommissioning trusts and any
changes in the administration of the trusts, an update of its ability
to fund the PGC decommissioning trust; and other information specified
by the commission in the form.
(h) Periodic Commission Review. At least once every
three years the PGC shall file a decommissioning cost study and funding
analysis or updates of previous studies using the most current information
reasonably available to the PGC.
(1) The commission shall review the studies submitted
by a PGC and other currently available information using the procedure
provided in subsection (e) of this section.
(2) During the initial and each periodic review of
decommissioning costs, the following information shall be provided:
(A) The decommissioning cost study and funding analysis
accompanied by a report and testimony supporting the analysis and
the requested annual funding amount. The funding analysis shall be
based on the most current information reasonably available concerning
the cost of decommissioning, an allowance for contingencies of not
more than 10% of the cost of decommissioning, the balance of funds
in the decommissioning trusts, anticipated escalation rates, the anticipated
after-tax return on the funds in the trust, and other relevant factors.
In no event will the cost estimate for basic radiological decommissioning
be less than the minimum amount required by the federal Nuclear Regulatory
Commission. The funding analysis shall be accompanied by a description
of the assumptions used in the analysis and shall calculate the required
annual funding amount necessary to ensure sufficient funds to decommission
the nuclear generating plant at the end of its useful life.
(B) A demonstration that the decommissioning funds
are being or will be invested prudently and in compliance with the
investment guidelines in subsection (o) of this section.
Cont'd... |
