Decommissioning Funding

Decommissioning Funding

Before a nuclear power plant begins operations, the NRC requires that the licensee must establish or obtain a financial mechanism (such as a trust fund or a guarantee from its parent company) to ensure there will be sufficient money to pay for the ultimate decommissioning of the facility.  Funding for the costs to decommission the Diablo Canyon Power Plant are made available through the Decommissioning Trust Fund. The use of the Trust Fund for decommissioning is mandated by both Federal and State regulations.

Each nuclear power plant licensee must report to the NRC every two years the status of its decommissioning funding for each reactor that it owns. The report must estimate the minimum amount needed for decommissioning by using predetermined formulas.  Licensees may alternatively determine a site-specific funding estimate, provided that amount is greater than the generic decommissioning estimate determined through the formulas.  Approximately 70 percent of licensees are authorized to accumulate decommissioning funds over the operating life of their plants.  The NRC completes an independent analysis to determine whether licensees are providing reasonable “decommissioning funding assurance” for radiological decommissioning of the reactor at the permanent termination of operation. 

In California, the CPUC also regulates and reviews nuclear decommissioning costs and projects, pursuant to the California Nuclear Facility Decommissioning Act.  The California Nuclear Facility Decommissioning Act was passed by state legislation in 1985 to ensure that there is sufficient funding available to decommission nuclear facilities upon shutdown.  As early as 1983, the CPUC ordered PG&E to begin forecasting its nuclear decommissioning costs to make sure that there is adequate funding and that those decommissioning costs would be distributed equitably over time among all customers who benefit from the operation of the DCPP.

Under the 1985 Act, the CPUC established the Nuclear Decommissioning Cost Triennial Proceeding (NDCTP) as a proceeding to examine nuclear decommissioning costs funding levels for the trust fund that each utility establishes to fund decommissioning, and the assumptions associated with that funding level.  Specifically, the NDCTP application includes a decommissioning cost estimate that covers reasonable and prudent decommissioning costs and assumptions around how that cost estimate is developed.  The application also includes a review of any decommissioning projects that were completed since the last application was filed, and any assumptions about the trust fund, the rate of return and funding requirements.  The NDCTP application is filed every three years and the revenue requirement can and will be adjusted every three years with subsequent NDCTP applications as new information becomes available. 

PG&E has collected monthly fees on customers’ electric bills to fund the trust, which are further augmented over the life of the plant from returns on investment in fixed income (bonds) and equity (stocks).  PG&E was required by the CPUC to collect and maintain the Trust Fund while the plant is in operation in preparation for DCPP’s eventual decommissioning.  The purpose of the Trust Fund is to ensure sufficient funding will be available to decommission DCPP.  The Trust Fund currently holds approximately $2.8 billion.

Nuclear Decommissioning Cost Triennial Proceeding (NDCTP)

In California, the California Public Utilities Commission (CPUC) regulates and reviews nuclear decommissioning costs and projects, pursuant to the California Nuclear Facility Decommissioning Act.  The California Nuclear Facility Decommissioning Act was passed by state legislation in 1985 to ensure that there is sufficient funding available to decommission nuclear facilities upon shutdown.  As early as 1983, the CPUC ordered PG&E to begin forecasting its nuclear decommissioning costs to make sure that there is adequate funding and that those decommissioning costs would be distributed equitably over time among all customers who benefit from the operation of the DCPP.

Under the 1985 Act, the CPUC established the Nuclear Decommissioning Cost Triennial Proceeding (NDCTP) as a proceeding to examine nuclear decommissioning costs funding levels for the trust fund that each utility establishes to fund decommissioning, and the assumptions associated with that funding level.  Specifically, the NDCTP application includes a decommissioning cost estimate that covers reasonable and prudent decommissioning costs and assumptions around how that cost estimate is developed.  The application also includes a review of any decommissioning projects that were completed since the last application was filed, and any assumptions about the trust fund, the rate of return and funding requirements.  The NDCTP application is filed every three years and the revenue requirement can and will be adjusted every three years with subsequent NDCTP applications as new information becomes available. PG&E filed a NDCTP application in March of 2016.  The latest filing was on December 13, 2018.

The NDCTP can be found by following this link:  Nuclear Decommissioning Cost Triennial Proceeding

Vision, Goals and Recommendations

Through these vision statements, goals and recommendations, it is the intent of the DCDEP to ensure the health and safety of the community is not compromised and remains a primary consideration, while minimizing impacts to ratepayers.

Vision Statements

  • The health and safety of the community and the environmental quality of the area should be the primary consideration during decommissioning and adequate funding of the Decommissioning Trust Fund should be provided to meet these objectives
  • The most cost-effective methods for decommissioning should be investigated by PG&E in order to save ratepayers money
  • The formulation of all decommissioning costs and decisions should be transparent to ratepayers and the community
  • The existing Decommissioning Trust Fund should be protected, preserved and augmented as appropriate to assure that it remains stable and sufficient in order to adequately finance decommissioning

Goals

  1. The DCDEP, in conjunction with PG&E, should endeavor to assure that the public clearly understands the funding necessary to safely accomplish decommissioning
  2. The funding necessary for critical advance planning decommissioning activities needed to ensure immediate transition to DECON (decommissioning and decontamination) upon plant closure should be made available to PG&E
  3. The Decommissioning Trust Fund should be adequately funded to cover the reasonable cost of completing all the decommissioning activities, including removal, transportation, and disposal of materials in a way that minimizes risk, cost, and disruption to local communities

Recommendations

  1. Recommend that the CPUC assure that the Decommissioning Trust Fund will provide adequate funding to ensure the protection of the health and safety of the community throughout the decommissioning process
  2. Recommend that the CPUC assure that the Decommissioning Trust Fund will provide adequate funding to allow for critical advance planning decommissioning activities needed to continue in order to allow immediate transition to decommissioning when the plant ceases power generation
  3. Recommend that the CPUC ascertain if PG&E has adequately researched and considered costs and community impacts of both land and sea transport of facility components from the site
  4. Recommend that the CPUC assure that the Decommissioning Trust Fund will cover the reasonable cost of completing all the decommissioning activities, including removal, transportation and disposal in a way that minimizes risk and disruption to local communities and cost to ratepayers
Scroll to Top