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US: NRC Cites Utility Shortfalls

by Rebecca SmithWall Street Journal
June 20th, 2009

The U.S. Nuclear Regulatory Commission told six utility companies that they have until year-end to explain how they will remedy shortfalls in nuclear decommissioning funds. The under funding reflects reduced returns on investments.

The NRC didn't divulge the collective shortfall but said amounts ranged from $12 million to $204 million for each of 26 reactors at 18 sites on the list -- one-quarter of the nation's reactors in service. That suggests the total shortfall is at least $500 million and, possibly, several billion dollars.

Companies owning the nation's 104 power reactors had set aside $41 billion in decommissioning funds, which they controlled, at the end of 2008.

Agence France-Presse/Getty Images

Reserves to decommission 26 nuclear plants, such as Exelon's Byron, Ill., reactor, are inadequate, the NRC said.

Scott Burnell, a spokesman for the NRC, said the number in arrears is "more than normal" and that the situation "needs to be resolved in the near future."

The license holders receiving notice -- Exelon Corp., Entergy Corp., Constellation Energy Group Inc., FPL Group, First Energy and Tennessee Valley Authority -- include some of the industry's biggest names, and most have announced they are considering building additional reactors in coming years.

A spokesman for FPL said his company is "fully committed to meeting our obligations" and blamed "market conditions" for the under funding for its Point Beach and Duane Arnold units in Two Creeks, Wisc., and near Cedar Rapids, Iowa.

The NRC requires companies to sock money away to cover the anticipated cost of taking plants out of service and, eventually, razing them. Roughly half the nation's reactors have gotten 20-year extensions on original 40-year licenses, meaning that decommissioning periods have been pushed off.

The NRC requires operators to update it on decommissioning funds at least every two years and the latest batch of public reports was filed in March and April.

"We do have some time to recover that shortfall," said Adrian Heymer, senior director of strategic programs for the Nuclear Energy Institute, a trade association. Companies have up to 60 years to tear down plants, once they are taken out of service.

An Exelon spokesman said his firm cured shortfalls at three reactors recently but still must satisfy the NRC on two plants.

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