Methods of Power Reactor Decommissioning Cost Recovery
Electric utilities have for many years accumulated funds in order to pay for the future decommissioning of equipment and/or facilities. The uniqueness of nuclear plant decommissioning is therefore not in the basic concept, but in the unique combination of time duration, the associated uncertainties, and the cost magnitudes associated with nuclear plants. There are two basic elements which govern the decommissioning revenues to be received from the ratepayers who will benefit from use of the facility’s energy output: 1) the actual method and cost of decommissioning and 2) the manner in which the anticipated costs will be collected during the facility’s useful life and used on an interim basis prior to being paid out during decommissioning. The first element will normally involve a reactor-specific engineering cost estimate for decommissioning, based on current costs and regulations, and is a necessary input for the second of these two basic elements. Specifically, the purpose of this paper is to describe the various factors related to the second element including rate-regulatory factors, income taxes, and accounting practices; to analyze alternative interim use of accumulated funds; to examine alternative approaches for cost recovery, and to examine one particular alternative that appears to have unique features. Also, parallels are drawn between decommissioning cost recovery and spent fuel disposal cost recovery.
KeywordsPower Reactor Cost Recovery Annual Charge Cost Change Original Cost
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