NRR-DMPSPEm Resource From: Sent: To: Cc: Subject: Attachments: Andrene Dabaghi Monday, June 18, 2018 11:06 AM Vaidya, Bhalchandra Margrethe Kearney [External_Sender] RE: RE: Citizen Complaint and Request for Enforcement Action Regarding FirstEnergy Nuclear Facility Operations in Ohio and Pennsylvania 1. Peter A. Bradford Declaration.pdf; 2. Callan Institute 2017 NDT Survey.pdf Dear Mr. Vaidya, As discussed, attached please find the following supplemental material in advance of our meeting with the PRB tomorrow: (1) Declaration of Peter A. Bradford (2) Callan Institute 2017 Nuclear Decommissioning Funding Study Best, Andrene Andrene Dabaghi Associate Attorney Environmental Law & Policy Center 35 E Wacker Drive, Suite 1600 Chicago, IL 60601 (312) 795-3702 Notice: This email may contain privileged and/or confidential information and is for the sole use of the intended recipient(s). From: Andrene Dabaghi Sent: Friday, June 15, 2018 1:13 PM To: Vaidya, Bhalchandra Cc: Margrethe Kearney Subject: RE: RE: Citizen Complaint and Request for Enforcement Action Regarding FirstEnergy Nuclear Facility Operations in Ohio and Pennsylvania Dear Mr. Vaidya, As discussed on our call, the names of the attendees for our June 19 meeting with the PRB are as follows: (1) Margrethe Kearney (2) Andrene Dabaghi (3) Peter Bradford 1 We will also plan to send you supplemental information on Monday. Thank you, Andrene From: Vaidya, Bhalchandra [Bhalchandra.Vaidya@nrc.gov] Sent: Friday, June 15, 2018 7:34 AM To: Andrene Dabaghi Cc: Margrethe Kearney Subject: RE: RE: Citizen Complaint and Request for Enforcement Action Regarding FirstEnergy Nuclear Facility Operations in Ohio and Pennsylvania Ms. Dabaghi, Thank you for the update. I am available anytime today until 3 pm eastern time to discuss the logistics of the meeting on June 19, 2018. Please let me know what time you will be calling or whether I should call you. Bhalchandra K. Vaidya Licensing Project Manager NRC/NRR/DORL/LPL3 (301)-415-3308 (O) bhalchandra.vaidya@nrc.gov From: Andrene Dabaghi [mailto:Adabaghi@elpc.org] Sent: Thursday, June 14, 2018 6:42 PM To: Vaidya, Bhalchandra Cc: Margrethe Kearney Subject: [External_Sender] RE: Citizen Complaint and Request for Enforcement Action Regarding FirstEnergy Nuclear Facility Operations in Ohio and Pennsylvania Dear Mr. Vaidya, Per our conversation on Tuesday, I wanted to update you on our motion for relief from the automatic stay before the bankruptcy court. The court entered the attached stipulation today regarding ELPC’s participation in the PRB meeting on June 19. Are you available for a call tomorrow (Friday) afternoon to discuss? Please let us know what time works best for you. Best, Andrene Andrene Dabaghi Associate Attorney Environmental Law & Policy Center 35 E Wacker Drive, Suite 1600 Chicago, IL 60601 (312) 795-3702 Notice: This email may contain privileged and/or confidential information and is for the sole use of the intended recipient(s). 2 From: Margrethe Kearney Sent: Monday, June 04, 2018 4:06 PM To: Vaidya, Bhalchandra; Andrene Dabaghi Subject: RE: Citizen Complaint and Request for Enforcement Action Regarding FirstEnergy Nuclear Facility Operations in Ohio and Pennsylvania Mr. Vaidya – Thanks for your response. We are working with the Debtors in the bankruptcy case to reach a resolution on our motion for relief from the automatic stay. As of now, the stay has not been lifted and it is unclear whether the motion will be resolved at the June 8 hearing. If we are able to confirm either that the stay does not apply or is lifted for purposes of this proceeding, we will attend in person on June 19. I will provide the additional details requested below as they are available. Thank you for your patience during this process. I will keep you updated on the proceedings in front of the bankruptcy court. Margrethe Margrethe K. Kearney Senior Attorney Environmental Law & Policy Center 1514 Wealthy St. SE, Suite 256 Grand Rapids, MI 49506 (773) 726-8701 (mobile) MKearney@elpc.org From: Vaidya, Bhalchandra [mailto:Bhalchandra.Vaidya@nrc.gov] Sent: Thursday, May 31, 2018 9:29 AM To: Andrene Dabaghi; Margrethe Kearney Subject: Citizen Complaint and Request for Enforcement Action Regarding FirstEnergy Nuclear Facility Operations in Ohio and Pennsylvania Margrethe Kearney Andrene Dabaghi Environmental Law & Policy Center 35 E. Wacker Drive, Ste. 1600 Chicago, IL 60601 (312) 673-6500 Dear Margrethe Kearney and Andrene Dabaghi, Thank you for your email dated May 25, 2018. 3 The Petition Review Board (PRB) will be available on Tuesday, June 19, 2018, for you to address the PRB in person or by telephone, from 12:30PM to 1:30 PM. This time period includes time for the PRB’s introductory comments, “Introductions,” and “Questions & Answers,” including those from the PRB, and Public, leaving about 20-30 minutes for you to present additional and/or supplemental information. Please confirm that this date and time is acceptable to you, including whether you will addressing the PRB in person, or by telephone. Also, to make further arrangements, please provide some additional details such as follows: (1) Number of People attending (2) Names of the Presenters (3) Presentation Material, such as Handouts (4) Additional and Supplemental Information Please feel free to contact me, if you have any questions. Thanks. Bhalchandra K. Vaidya Licensing Project Manager NRC/NRR/DORL/LPL3 (301)-415-3308 (O) bhalchandra.vaidya@nrc.gov From: Andrene Dabaghi [mailto:Adabaghi@elpc.org] Sent: Friday, May 25, 2018 10:58 AM To: Vaidya, Bhalchandra ; Margrethe Kearney Cc: Buckberg, Perry Subject: [External_Sender] RE: Citizen Complaint and Request for Enforcement Action Regarding FirstEnergy Nuclear Facility Operations in Ohio and Pennsylvania Dear Mr. Vaidya, Thank you for your email. The following dates after June 8 work best for us to address the PRB in-person: Tuesday, June 19 Wednesday, June 27 Thank you, Andrene Dabaghi Associate Attorney Environmental Law & Policy Center 35 E Wacker Drive, Suite 1600 Chicago, IL 60601 (312) 795-3702 Notice: This email may contain privileged and/or confidential information and is for the sole use of the intended recipient(s). 4 From: Vaidya, Bhalchandra [mailto:Bhalchandra.Vaidya@nrc.gov] Sent: Thursday, May 24, 2018 10:23 AM To: Andrene Dabaghi; Margrethe Kearney Cc: Buckberg, Perry Subject: Citizen Complaint and Request for Enforcement Action Regarding FirstEnergy Nuclear Facility Operations in Ohio and Pennsylvania Margrethe Kearney Andrene Dabaghi Environmental Law & Policy Center 35 E. Wacker Drive, Ste. 1600 Chicago, IL 60601 (312) 673-6500 Dear Margrethe Kearney and Andrene Dabaghi, Thank you for your email dated May 18, 2018. In consideration of your request to address the Petition Review Board (PRB) after June 8, 2018, please note that the PRB would wait to make any decisions regarding “initial recommendations” until after you have had the opportunity to address the PRB. However, consistent with MD 8.11, in order to provide timely response to your petition, please provide a few possible dates soon after June 8, 2018, when you would like to address the PRB, in person or by telephone. Please do not hesitate to contact me if you have any questions on the above or the petition process. Thank you, Bhalchandra K. Vaidya Licensing Project Manager NRC/NRR/DORL/LPL3 (301)-415-3308 (O) bhalchandra.vaidya@nrc.gov 5 Hearing Identifier: Email Number: NRR_DMPS 431 Mail Envelope Properties (B73BB64525149F42989D6BD5C7BCAED101ED145B) Subject: [External_Sender] RE: RE: Citizen Complaint and Request for Enforcement Action Regarding FirstEnergy Nuclear Facility Operations in Ohio and Pennsylvania Sent Date: 6/18/2018 11:06:04 AM Received Date: 6/18/2018 11:07:43 AM From: Andrene Dabaghi Created By: Adabaghi@elpc.org Recipients: "Margrethe Kearney" Tracking Status: None "Vaidya, Bhalchandra" Tracking Status: None Post Office: elpc03 Files Size MESSAGE 7915 1. Peter A. Bradford Declaration.pdf 2. Callan Institute 2017 NDT Survey.pdf Options Priority: Return Notification: Reply Requested: Sensitivity: Expiration Date: Recipients Received: Standard No No Normal Date & Time 6/18/2018 11:07:43 AM 291039 5322293 DECLARATION OF PETER A. BRADFORD I, Peter A. Bradford, pursuant to the provisions of 28 U.S.C. § 1746 do hereby declare as follows: 1. My name is Peter Amory Bradford. I live in Peru, Vermont. My resume is attached to this declaration as Attachment 1. 2. I am President of Bradford Brook Associates, a firm advising on utility regulation and energy policy. 3. I have served as an expert witness on aspects of nuclear power plant regulation and nuclear plant economics in state legislative and regulatory proceedings as well as in court proceedings and before the U.S. Nuclear Regulatory Commission. I have written and advised on nuclear power costs including decommissioning in many U.S. states and abroad. 4. I am a commissioner on the Texas/Vermont Low Level Radioactive Waste Compact Commission, whose responsibilities include the receipt of the eventual decommissioning waste from the closed Vermont Yankee nuclear power plant as well as other present and future decommissioning sites in the U.S. 5. I have taught a course entitled “Nuclear Power and Public Policy” at Vermont Law School. I have been a member of the Keystone Center “Nuclear Power Joint Fact Finding” (June 2007) and the National Research Council of the National Academy of Science’s Committee on “Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs” (June 2006). I was also a member of the International Expert Panel advising the European Bank for Reconstruction and Development assessing the economic case for completing Khmelnitsky 2 and Rovno 4 (K2/R4) – two partly built, Russian designed 1,000 MW VVER nuclear units in Ukraine – to replace the two operational 1,000 MW units at Chernobyl (February 1997). 6. I chaired the New York Public Service Commission (1987-95). During that time, the NYPSC set rates to cover the costs, including decommissioning, of eight nuclear power units, including the now decommissioned Shoreham plant. 7. I served on the Maine Public Utilities Commission (1971-1977 and 1982-1987) and was Chairman in 1974-1975 and 1982-87. During my 1982-87 term, Maine electric rates included payments into the now decommissioned Maine Yankee plant decommissioning trust fund. 1 8. Between 1968 and 1977, I lived within 10 miles of the Maine Yankee nuclear power plant in Wiscasset Maine. Maine Yankee began operating in 1972. I have firsthand familiarity with the awareness and expectations of a host community in that era as to issues that would confront it when the plant closed. 9. I served as a commissioner on the U.S. Nuclear Regulatory Commission (1977-82). During my term, the NRC commenced work on the rulemaking that led to its first comprehensive decommissioning rule. 10. I was a member and sometime chair of Vermont’s Public Oversight Panel on the reliability of the Vermont Yankee nuclear power plant. I advised the Vermont Legislature and the Town of Wiscasset, Maine on issues related to spent nuclear fuel storage. I am also affiliated with the Regulatory Assistance Project, which provides assistance to state and federal energy regulatory commissions regarding economic regulatory policy and environmental protection. 11. I make this declaration based on my own personal knowledge in support of the petition by the Environmental Law & Policy Center (“ELPC”) submitted to the NRC on March 27, 2018 under 10 C.F.R. § 2.206 pertaining to decommissioning funding for the Beaver Valley, Davis-Besse, and Perry nuclear plants. These plants are owned by FirstEnergy Nuclear Generation and operated by FirstEnergy Nuclear Operating Company. 12. The Atomic Energy Act, 42 U.S.C.A. § 2201(x)(1), and NRC regulations, 10 CFR § 50.75, contain provisions outlining nuclear plant licensees’ responsibilities with respect to assurances that funds will be available to decommission their nuclear facilities. 13. Future decommissioning costs are subject to many large uncertainties, including the pace and nonradiological standards of decommissioning that may be required by the host states and localities, the pace at which the federal government is able to carry out its obligation to remove the spent fuel from the reactor sites and the costs of transporting and disposing of radioactive waste other than spent fuel.1 Neither the licensees nor the Nuclear Regulatory Commission control these costs. 14. Decommissioning cost estimates have increased at a compound annual rate of about 6% in recent years, rising from a low of $49.2 billion in 2008 for investor owned 1 One example of these uncertainties with which I am quite familiar is the financial peril which caused the nation’s only licensed repository for class B and class C nuclear waste, an unavoidable product of nuclear plant decommissioning, to describe itself as a “failing company” in court filings in 2015 and 2016. Though the facility has since changed hands, its long-term economic viability is not assured. 2 utilities to $76.0 billion in 2016.2 This rate of escalation is higher than that assumed in NRC regulations. Furthermore, calculations and critiques by credible independent entities indicate that there may be decommissioning-related costs beyond those calculated according to NRC regulations and that NRC formulae may omit some significant cost elements.3 15. The institutional framework within which decommissioning funds have accumulated has changed dramatically in the last half century. 16. When I was on the Nuclear Regulatory Commission, only a handful of very small power reactors had been decommissioned, and there were no requirements for separated decommissioning trust funds that I recall. 17. As recently as 25 years ago, all of the reactors that are the subject of this petition were owned by vertically integrated utilities. The same company that owned the reactors sold electricity to retail customers, who had no choice of suppliers. The NRC by then required that adequate decommissioning trust funds be established and maintained for every power reactor. As to investor-owned reactors, the relevant state or federal utility regulators approved rates that included annual contributions to these decommissioning funds. A goal of the regulatory commission rate decisions with which I am familiar was to assign the costs of accumulating decommissioning trust funds as nearly as possible to the customers who were using the electricity from the nuclear power plants, considering growth in the value of the decommissioning trust funds. Future electric customers who do not use the electricity from today’s nuclear plants should not, to the extent possible, have any of the costs of these nuclear plants reflected in their electric bills. Assigning costs to customers who do not cause them is both unfair and contrary to fundamental principles of economically efficient utility pricing. 18. With the coming of electric industry restructuring and competition in the generation of electricity in the 1980s and 1990s, many power reactors, including those subject to the ELPC petition, were conveyed to nonutility owners who sold the energy and capacity from their plants into power markets rather than to end-use customers. With the ending of the protection of regulated monopoly markets, many of these reactors lost the ability to pass decommissioning fund contributions on to monopoly customers through regulated rates. They often ceased making contributions to the 2 See CALLAN INSTITUTE, 2017 Nuclear Decommissioning Study 9 (2017), https://www.callan.com/wpcontent/uploads/2017/09/Callan-2017-NDT-Survey.pdf. 3 U.S. Gov’t Accountability Off., GAO-12-258, Nuclear Regulation: NRC’s Oversight of Nuclear Power Reactors Could be Further Strengthened 13–15 (2012), https://www.gao.gov/assets/590/589923.pdf. 3 decommissioning funds and represented to the NRC that growth in the value of the funds coupled with guarantees from parent companies would assure that decommissioning costs would be fully covered. 19. On March 31, 2018, FirstEnergy Solutions (“FES”) and its subsidiaries FirstEnergy Nuclear Generation (“NG”) and FirstEnergy Nuclear Operating Company (“FENOC”) filed for bankruptcy. 20. FES has announced plans to retire its nuclear plants soon: 2020 for Davis-Besse and 2021 for Beaver Valley and Perry. The most recent Decommissioning Funding Status Report (“DFS Report”) dated March 2017 for these nuclear plants, see ML17083B221, does not reflect this accelerated decommissioning timeline. This new timeline severely cuts the time available for the funds to grow4 and eliminates any chance that the plants themselves will make contributions based on earnings. The early retirement of these plants means that the time before major expenditures deplete the funds and before complete decommissioning will be shortened by many years. 21. Despite the funding shortfalls occasioned by the aforementioned events, the NRC issued a Preliminary Notification on April 4, 2018 stating “Decommissioning funding for each site continues to be sufficiently funded under NRC regulations,” see ML18094A834. 22. The basis for the NRC’s finding of reasonable assurance of adequate decommissioning funding for Beaver Valley, Davis-Besse, and Perry is not clear from either the 2017 DFS Report or the April 4, 2018 NRC letter. The accelerated decommissioning timelines make it imperative for FENOC and NG to provide updated DFS Reports for Beaver Valley, Davis-Besse and Perry to provide some basis for their belief in adequate assurance of decommissioning funding. 23. Guarantees from parent company FirstEnergy Corporation (“FE”) have in past been used to make up for decommissioning fund shortfalls. However, FE has acknowledged in Ohio regulatory proceedings that its own credit position has weakened, resulting in rating agency downgrades. 24. In addition to nuclear units owned by bankrupt debtors, FE is also among the creditors of troubled coal plants. If these debts are not paid, FE will be less able than 4 Beaver Valley 1 would close in 2021 rather than 2036. Its decommissioning fund would contain $310 million instead of $417 million. If the same decommissioning assumptions are made, large withdrawals will occur 15 years sooner than planned. Decommissioning expenditures will conclude in 2082 instead of 2097. (DFS Report for Beaver Valley 1, March 24, 2017). Beaver Valley 2 will close in 2021 rather than 2047. Davis-Besse would close in 2020 rather than 2037. Perry would close in 2021 rather than 2026. 4 had been assumed to make up shortfalls in decommissioning funding. In particular, FE is now trying to reduce or even escape its exposure as a parent company guarantor.5 Indeed, FE now lists only TMI-2 as a nuclear facility for whose decommissioning costs it may be liable6, though it has in past acknowledged a potential liability for the decommissioning costs of Davis-Besse, Perry and Beaver Valley. FE CEO Chuck Jones has been described as saying that FE, “expects to wash its hands of the troubled generation subsidiary” in the FES bankruptcy filing.7 25. The FES and FENOC bankruptcies raise serious concerns that the company’s nuclear plants will be kept in SAFSTOR much longer than will be in the economic and land use interests of the host states and localities. 26. The use of SAFSTOR to defer the need for decommissioning expenditures (as well as to allow for decay of radioactivity) is a gamble that most units not adjacent to operating plants have preferred to avoid. Prematurely closed plants such as Maine Yankee, Connecticut Yankee and Massachusetts Yankee as well as the Zion units in Illinois preferred the certainty of prompt decommissioning under today’s known rules and funding sources. They did not need to roll the dice in hopes that financial markets would provide the assurance that their past management had not. 27. In addition, the state and local governments with which I am familiar have strongly preferred that closed nuclear power plants be decommissioned as quickly as possible, primarily for economic development reasons, to make the land available for other purposes. Few communities hosting nuclear plants (and none where the plants were sited before the 1980s) were told that decommissioning might last for many decades after the plants were closed. The SAFSTOR option, legal though it may be, is a breach of the faith of any state or locality that expected to be able to devote the entire nuclear plant site to other uses within a decade or two of the plant closing. 28. As far as I know, the NRC has no experience with assuring the adequacy of decommissioning funds in the context of a bankrupt licensee backstopped by ostensible guarantees from a financially stressed parent company. Licensees FENOC 5 FirstEnergy Corp., Form 10Q for the period ending March 31, 2018 at 3. Id. at 37. TMI 2 will be a unique decommissioning project. Experience elsewhere will be of limited assistance in trying to predict the costs. This is the site of the 1979 Three Mile Island accident. The plant only operated for one year before the accident and has not operated since. The used fuel has been removed from the site. However, the accident released far more radioactivity than will be encountered at other sites, and much of it remains in the containment and elsewhere. 7 Anya Litvak, “FirstEnergy’s Bruce Mansfield and Beaver Valley likely headed for bankruptcy next month”, PITTSBURGH POST-GAZETTE (Feb. 21, 2018), http://www.postgazette.com/powersource/companies/2018/02/21/FirstEnergy-s-Bruce-Mansfield-and-Beaver-Valleylikely-to-be-plunged-into-bankruptcy-next-month-coal-nuclear/stories/201802220050. 6 5 and NG have not provided any updated DFS reports for Beaver Valley, Davis-Besse and Perry since March 2017, and therefore have not accounted for early plant retirement in their calculations. It is essential for the NRC to require updated financial information from FES regarding the decommissioning of these plants, so that the agency may properly analyze the availability of decommissioning funds. 29. If FES and FE fail to assure fully adequate funding for all decommissioning contingencies, future customers and taxpayers may be called on to make up shortfalls in the hundreds of millions of dollars. Otherwise, the consequences of inadequate funding will fall upon the neighbors of the nuclear power plants through delayed decommissioning. These are precisely the results that decommissioning legislation and regulation has long sought to avoid. 30. For these reasons, I support the Demands for Information made by ELPC in its 2.206 petition and strongly urge the NRC promptly to request from FES an updated DFS Report for the Beaver Valley, Davis-Besse, and Perry nuclear plants. Because of the bankruptcy of FES and FENOC as well as the financial stress on FE, the NRC should be sure that it takes the full range of potential decommissioning costs into account and that the payment of these costs can be assured through fully protected access to assured funding from a financially reliable source. Any necessary guarantees from FE should be in forms that cannot be undermined by the current bankruptcy proceedings or by the financial stress under which FE finds itself. I declare under penalty of perjury that the foregoing is true and correct. Executed on this _15th__ day of _June__, 2018. Peter A. Bradford 6 ATTACHMENT 1 PETER A. BRADFORD P.O. BOX 497 PERU, VERMONT 05152 (802) 824-4296 PROFESSIONAL EXPERIENCE: Peter Bradford was until 2018 an adjunct professor at Vermont Law School, where he taught “Nuclear Power and Public Policy” and “The Law of Electric Utility Restructuring”. He also advises and teaches on utility regulation, restructuring, nuclear power and energy policy in the U.S. and abroad. He was a member and chair of the Public Oversight Panel for the Comprehensive Vertical Assessment of Vermont Yankee Nuclear Power Plant and has served as an expert witness on investment in new nuclear power plants in several states. He is one of Vermont’s two representatives on the Texas/Vermont Low Level Radioactive Waste Disposal Compact Commission and served on the advisory panel for the Bipartisan Policy Center project on nuclear waste. He has been a visiting lecturer in energy policy and environmental protection at Yale University and served on New York State’s 2012-13 Moreland Commission on Utility Storm Response He served on the U.S. Nuclear Regulatory Commission from 1977 until 1982. During his term, the NRC undertook major upgrading of its regulatory and enforcement processes in the wake of the Three Mile Island accident. He chaired the New York State Public Service Commission from 1987 until 1995 and the Maine Public Utilities Commission from 1982 until 1987. During these years, New York resolved its stalemate over the Shoreham nuclear power plant and Maine resolved its involvement in Seabrook, both on favorable economic terms. He was Maine's Public Advocate in 1982 and was President of the National Association of Regulatory Utility Commissioners during 1987. Prior to becoming a member of the NRC, he had served on the Maine Public Utilities Commission (1971-1977) and was Chairman in 1974-1975. He served on the 2007 Keystone Center fact finding collaboration on nuclear power and the 2006 National Academy of Sciences panel evaluating the alternatives to continued operation of the Indian Point Nuclear Power Plants in New York. He is also affiliated with the Regulatory Assistance Project, which provides assistance to state and federal energy regulatory commissions regarding economic regulatory policy and environmental protection. He served on a panel advising the European Bank for Reconstruction and Development on how best to replace the remaining Chernobyl nuclear plants in Ukraine and also on an expert panel advising the Austrian Institute for Risk Reduction on regulatory agency issues associated with the opening of the Mochovce nuclear power plant in Slovakia. He advised the Vermont Legislature on issues relating to spent fuel storage at Vermont Yankee and the Town of Wiscasset, Maine, on issues related to the storage of spent nuclear fuel at the site of the former Maine Yankee nuclear power plant. He has advised on electric restructuring issues and has testified on aspects of nuclear power, electricity and telecommunications restructuring in many U.S. states. He has also advised on energy, telecommunications and water utility restructuring issues in China, Armenia, Azerbaijan, Canada, Georgia, India, Indonesia, Kazakhstan, Kyrgyzstan, Mongolia, Russia, Samoa, South Africa and Trinidad and Tobago. He is a member of the Policy Advisory Committee of the China Sustainable Energy Program, a joint project of the David and Lucille Packard Foundation and the Energy Foundation. Mr. Bradford was an advisor to Maine Governor Kenneth Curtis from 1968 to 1971, with responsibilities for oil, power and environmental matters. He assisted in preparing landmark Maine laws relating to oil pollution and industrial site selection and was Staff Director of the Governor's Task Force on Energy, Heavy Industry and the Coast of Maine. Mr. Bradford is the author of Fragile Structures: A Story of Oil Refineries, National Security and the Coast of Maine, a book published by Harper's Magazine Press in 1975. His articles on utility regulation and nuclear power have appeared in many publications, including The New York Times, The Washington Post, The Los Angeles Times, The Boston Globe, The Atlanta Journal Constitution, The Bulletin of the Atomic Scientists, and The Electricity Journal. He is a 1964 graduate of Yale University and received his law degree from the Yale Law School in 1968. He is married, has three children and lives in Peru, Vermont. PROFESSIONAL AFFILIATIONS: 2011-present – Commissioner, Texas/Vermont Low Level Radioactive Waste Compact Commission 2013-2015 – Member Bipartisan Policy Center panel on disposal of high level nuclear waste. 1999-2015 - Member, Policy Advisory Committee, China Sustainable Energy Project (funded by the David and Lucille Packard Foundation and the Energy Foundation). 2012-13 – Commissioner, New York State Moreland Commission on Utility Storm Response 2007 – Member, Keystone Center project on the future of nuclear power 2 2006 – Member of the National Research Council Center on Alternatives to the Continued Operation of the Indian Point Nuclear Power Plants 1998-2002 - Member, Advisory Council, New England Independent System Operator Nov. 1986-Nov. 1987 President, National Association of Regulatory Utility Commissioners 1977-1995 NARUC positions, Member, Executive Committee; Member, Electricity Committee (1977-1989); Member, Gas Committee (1989-1993); Member, Communications Committee (1975-1977); Board of Directors, National Regulatory Research Institute (1985-1987). 1975-1977, 1982-1986. Advisory Council, Electric Power Research Institute 1987-1995, Member of New York State Energy Planning Board 1987-1995, Member, Board of Directors, New York State Energy Research and Development Administration !987-1995, Member, New York State Environmental Board; 1987-1995, Chair, New York State Energy Facilities Siting Board 1992-1994, State co-chair, New York State Task Force on Telecommunications Policy Vice-chair, Board of Directors, Union of Concerned Scientists Board of Directors, Nuclear Control Institute EDUCATION: 1964 B.A. History, Yale University, New Haven, CT 1968 L.L.B., Yale University School of Law, New Haven, CT AWARDS: Honorary Degree, Unity College, 1981. Environmental Award, Natural Resources Council of Maine, 1979. PUBLICATIONS Books 3 Fragile Structures: A Story of Oil Refineries, National Security and the Coast of Maine, 1975, Harpers Magazine Press. Law Review Maine's Oil Spill Legislation, Texas International Law Journal, Vol.7, No.1, Summer 1971, pp.29-43. Articles “Wasting Time: Subsidies, Operating Reactors and Melting Ice”, Bulletin of the Atomic Scientists, January, 2017, http://www.tandfonline.com/doi/full/10.1080/00963402.2016.1264207?scroll=top&needAccess= true “Compete or Suckle: Should Troubled Nuclear Power Plants Be Subsidized?”. The Conversation, August 17. 2016; https://theconversation.com/compete-or-suckle-should-troublednuclear-reactors-be-subsidized-62069 “Delivering the Nuclear Promise: TVA’s Sale of the Bellefonte Nuclear Power Plant Site”, Bulletin of the Atomic Scientists, June 1, 2016, http://thebulletin.org/delivering-nuclear-promisetvas-sale-bellefonte-nuclear-power-plant-site9524 “When the Unthinkable is Deemed Impossible: Reflections on Fukushima”, Bulletin of the Atomic Scientists, March 20, 2016, http://thebulletin.org/commentary/when-unthinkabledeemed-impossible-reflecting-fukushima9268 “What the EPA’s Clean Power Plan Means for Nuclear Energy”, Bulletin of the Atomic Scientists, September, 2015 “Why GOP Support for Subsidized Nuclear Energy is Confounding”, Bangor Daily News, July 11, 2015; “Playing Chicken with Illinois Electric Rates Won’t Improve the Climate”, Crain’s Chicago Business, January 7, 2015; “Foreword, World Nuclear Industry Status Report”, July 2013, WNISR, pp. 4-5, http://www.worldnuclearreport.org/IMG/pdf/20130716msc-worldnuclearreport2013-lr-v4.pdf; “How to Close the U.S. Nuclear Industry: Do Nothing”, Bulletin of the Atomic Scientists, March, 2013, pp. 12-21; “Transparency and Nuclear Regulation: A U.S. Perspective”, prepared for International Right to Know Day, Tokyo, September 2012; “The Nuclear Landscape”, Nature, March 8, 2012, p. 151, http://www.nature.com/nature/journal/v483/n7388/full/483151a.html; "Taxpayer Funding for Nuclear Power: Issues and Consequences", Chapter 5 of Nuclear Power's Global Expansion: Weighing Its Risks, Henry Sokolski, ed. http://www.npolicy.org/userfiles/image/Taxpayer%20Financing%20for%20Nuclear%20Power, %20Precedents%20and%20Consequences_pdf.pdf; Book review, The End of Energy, The Wall Street Journal, May, 2011, http://online.wsj.com/news/articles/SB10001424052748703421204576327370005700428; “Nuclear Power’s Search for the Taxpayer’s Wallet”, Blue Ridge Press, November, 2010. “Honey, I Shrunk the Renaissance: Nuclear Revival, Climate Change and Reality”, Electricity Policy.com, October, 2010, http://www.electricitypolicy.com/bradford-5-18-11-final-edit.pdf; 4 “Nuclear Loan Guarantees and Governmental Secrecy”, The Atlanta Journal-Constitution, June 22, 2010, http://www.ajc.com/opinion/we-may-be-on-555182.html; “Minnesota’s Nuclear Moratorium”, Twin Cities Pioneer Press, March 3, 2010, http://www.twincities.com/alllistings/ci_14506848?source=rss; “The Nuclear Renaissance Meets Economic Reality”, Bulletin of the Atomic Scientists, November-December 2009, www.vermontlaw.edu/Documents/IEE/20100109_bradfordArticle.pdf; “Massive Nuclear Subsidies Won’t Solve Climate Change”, Madison Capitol Times, November 3, 2009, http://host.madison.com/ct/news/opinion/column/guest/article_37b3c6b1-dff6-5ef1a21c-8a511e278961.html; “Nuclear Agency Needs Independent Appointees”, Atlanta Journal Constitution, September 17, 2009, http://www.ajc.com/opinion/nuclear-agency-needs-independent-140954.html Contribution to New York Times Forum “Choking on Growth: China and the Environment”, New York Times Online, November 20, 2007, http://china.blogs.nytimes.com/2007/11/20/answers-from-peter-bradford/#more-24 Contributions to the Bulletin of the Atomic Scientists online forum on Nuclear Power and Climate Change, (with Amory Lovins and Stephen Berry), http://www.thebulletin.org/roundtable/nuclear-power-climate-change/, March-August, 2007 The Economics of Nuclear Power (with Steven Thomas, Antony Froggatt, and David Millbrow) for Greenpeace International, May, 2007 Nuclear Power’s Prospects in the Power Markets of the 21st Century, for the Nonproliferation Education Center, February, 2005; China’s National Energy Plan: Some Energy Strategy Considerations, (with Thomas Johansson) The Sinosphere Journal, Spring 2004; Some Environmental Lessons from Electric Restructuring, IUCN Colloquium on Energy Law for Sustainable Development, Winter 2004; Where Have All the Safeguards Gone? Foreword to “Financial Insecurity: The Increasing Use of Limited Liability Companies and Multi-Tiered Holding Companies to Own Nuclear Power Plants” The Star Foundation August 7, 2002 Nuclear Power after September 11, OnEarth, December 2001. The Unfulfilled Promises of Electric Restructuring, Nor’easter, summer 2001. Considerations Regarding Recovery of Strandable Investment, PUR Utility Quarterly, December, 1997. Ships at a Distance: Energy Choice and Economic Challenge, The National Regulatory Research Institute Quarterly Bulletin, Volume 18, Number 3, Fall, 1997, p. 287 (Originally the 1997 George Aiken Lecture at the University of Vermont). Book Review: The British Electricity Experiment - Privatization: the Record, the Issues, the Lessons, Amicus Journal, June, 1997; Gorillas in the Mist: Electric Utility Mergers in Light of State Restructuring Goals, The National Regulatory Research Institute Quarterly Bulletin, Spring, 1997. Til Death Do Us Part or the Emperor's New Suit: Does a Regulatory Compact Compel Strandable Investment Recovery?, PUR Utility Quarterly, October, 1996; Electric Bargain's Cost Is Dirty Air, Newsday, L.A. Times Features Syndicate, 4/18/96. A Regulatory Compact Worthy of the Name, The Electricity Journal, November, 1995, pp.12-15; 5 Paved with Good Intentions: Reflections on FERC's Decisions Reversing State Power Procurement Processes, (with David Moskovitz), The Electricity Journal , August/September, 1995, pp.62-68; That Memorial Needs Some Soldiers and Other Governmental Approaches to Increased Electric Utility Competition, The Electric Industry in Transition, Public Utility Reports & NYSERDA, 1994, pp.7-13; Market-Based Speech, The Electricity Journal, September, 1994, p.85; In Search of an Energy Strategy, Public Utilities Fortnightly, 1/15/92; Parables of Modern Regulation, The Electricity Journal, November 1992, p.73; Foreword to: Regulatory Incentives for Demand Side Management, Nickel, Reid, David Woolcott, American Council for Energy-Efficient Economy, 1992, pp. ix-xi; Boats Against the Current: Energy Strategy in Theory and Practice, The Electricity Journal, October, 1991, p.64; The Shoreham War Has Got to End Now, Newsday, 5/9/89; Parallel to the Nuclear Age, Yale University 25th Reunion book, 1989; Book Review: Safety Second, A Critical Evaluation of the Nuclear Regulatory Commission’s First Decade IEEE Spectrum, February, 1988, p.14; Somewhere Between Ecstasy, Euphoria and the Shredder: Reflections on the Term 'Pronuclear', Journal of the Washington Academy of Sciences, Vol.78, no.2, June 1988, pp. 139-142; Book Review: Power Struggle: The Hundred Year War Over Electricity, Amicus Journal, Winter 1987, pp. 46-47; Wall Street's Flawed Evaluation of State Utility Regulation, Bangor Daily News, September 3, 1984; Reflections on the Indian Point Hearings, New York Times, 1/83; Paradox and Farce: Trends in Federal Nuclear Energy Policy Los Angeles Times, June 6, 1982; Keeping Faith with the Public, Nuclear Safety, March-April, 1981; Regulation or Reassurance, Washington Post, August 16, 1979; Report of the Governor's Task Force on Energy, Heavy Industry and the Maine Coast, 1972; A Measured Response to Oil Port Proposals, Maine Times, July, 1971. Testimony Before Courts, State Utility Regulatory Commissions and the NRC Concerning Nuclear Energy Declaration regarding operation of the Diablo Canyon Nuclear Power Plants in the California power markets, September, 2014 In Re: License Renewal Application Submitted by Entergy Nuclear Indian Point 2 an3 LLCs, NRC Docket Nos. 50-247-LR and 50-286-LR, declarations in November 2007 and February, 2011, testimony December 2012; Entergy Nuclear Vermont Yankee v. Peter Shumlin et al, U.S. District Court for the District of Vermont, September 2011; In the Matter of Revised Application of Duke Energy Carolinas for Approval of Decision to Incur Nuclear Generation Project Development Costs, North Carolina Utilities Commission, March, 2011; In re: Nuclear Cost Recovery Clause, Docket No. 090009-EI, Florida Public Service Commission, July 2009; In re: Petition for Determination of Need for Levy Units 1 and 2 Nuclear Power Plants, Docket No. 080148-EI, Florida Public Service Commission, April, 2008; 6 Application of Duke Energy Carolinas, LLC for Approval of Decision to Incur Nuclear Generation Pre-Construction Costs, Docket No. 2007-440-E, Public Service Commission of South Carolina, March 2008; In the Matter of Application of Duke Energy Carolinas to Recover Necessary Nuclear Generation Expenses, North Carolina Utilities Commission, March, 2008; Investigation into General Order 45 Notice filed by Vermont Yankee Nuclear Power Corporation re: proposed sale of Vermont Yankee Nuclear Power Station and Related Transactions, Testimony Regarding Proposed Paragraph 15 of the Memorandum of Understanding, Docket 6545, Vermont Public Service Board, April, 2002 Selected Other Presentations Concerning Nuclear Energy Did Nuclear Power Jump or Was It Pushed: Some Impacts of the Accident at Three Mile Island; Presentation at Dartmouth College symposium on 35th Anniversary of TMI, March 2014; Nuclear Power and Market Reform: Some Lessons from the U.S. and Europe; Presentation to the Japan Renewable Energy Foundation, Tokyo, February, 2014; Early Cost Recovery for New Nuclear Reactors: The Downside, Presentation to the Southeastern Conference of Utility Regulatory Commissioners, April 15, 2013; Don’t Try This at Home: Japanese Nuclear Power Dilemmas, Nonproliferation Education Center, November 28, 2012; Prices, Prophesies, Principles and the Future of Nuclear Energy, 4th Japan-U.S. Joint Public Policy Forum, Tokyo, October 31, 2012; The Economics of New Nuclear Reactors, St. Petersburg, Russia and Astana, Kazakhstan,, October 2012; Transparency and Nuclear Regulation, International Right to Know Day Presentation, Tokyo, Japan, September 22, 2012; SMR Update: Are We Getting Closer to a Renai$$ance?, Presentation to MidAmerican Regulatory Conference, June, 2012; Leadership in Nuclear Decisionmaking: ASAN Plenum, Seoul, South Korea, April, 2012; New Nuclear Reactors Are to Climate Change What Caviar is to World Hunger, Presentation to Yale Alumni in Energy, March 23, 2012 Schrodinger’s Renaissance: Anatomy of a Public Policy Fiasco, presentation to Princeton Program on Science and Global Security, December, 2011 After-Math: TMI, Fukushima and Nuclear Power’s U.S. Prospects, presentation to the American Bar association, October 2011; How Many Renaissances Will It Take to Build a New U.S. Nuclear Power Plant?, presentation at the Aspen Institute, July 2011; Aside From That, Ms. Lincoln, How Do You Like Nuclear Risk?, presentation to the New York Society of Security Analysts, March 2011; Nuclear Power Is to Fighting Climate Change as Caviar Is to Fighting World Hunger, presentation at Columbia Law School Debate on Nuclear Energy, November, 2010. It’s Not A Renaissance Until You’ve Seen a Masterpiece: Nuclear Power and Climate Change in 2010, Speech, Hannover, Germany, September 2010 Better Never Than Late: Nuclear Power, Energy Policy and Climate Change, Vermont Law School Hot Topics Lecture, June 2010 Nuclear Regulatory Commission Oversight Hearing, Senate Committee on Environment and Public Works, Subcommittee on Clean Air and Nuclear Safety, May, 2010; 7 Testimony on Nuclear Loan Guarantees Before the Domestic Policy Subcommittee of the U.S. House Oversight and Government Reform Committee; Nuclear Renaissance Myths and Realities, Testimony before the Michigan Senate Energy Committee, Lansing Michigan, April 23, 2009; “Three Mile Island: Thirty Years of Lessons Learned”, Testimony before the U.S. Senate Committee on Environment and Public Works, Subcommittee on Clean Air and Nuclear Safety, March 24, 2009; Don’t Call It A Renaissance Until They’ve Shown You a Masterpiece; Italian Embassy/Brookings Institution Forum on “The Rise In Demand for Civil Nuclear Power”, Italian Embassy, December 9, 2008; Subsidies Without Borders: The Case of Nuclear Power, Nonproliferation Policy Education Center and Marshall Institute forum, Washington, D.C., June 13, 2008; Nuclear Power: Are the $tar$ Aligned? Harvard Electricity Policy Group; May 29, 2008; Nuclear Power As “Federal Infrastructure”, Nonproliferation Policy Education Center, Prague, Czech Republic, March 18, 2008; Nuclear Power, Energy Security, and Climate Change, Center for Energy and Environmental Security, University of Colorado Law School, Boulder, Colorado, February 1, 2008; Of Risks, Resources, Renaissances and Reality, Institute of Public Utilities, Charleston, South Carolina, December 4, 2007; Nuclear Power and Climate Change; Chicago Humanities Festival; November 10, 2007 Risks, Rewards, Resources, Reality; Briefing on the Loan Guarantee Provisions of the 2007 Energy Legislation; Environmental and Energy Study Institute; Washington, D.C., October 30, 2007 Fool Me Twice? Rules for an Unruly Renaissance: Carnegie International Nonproliferation Conference, Washington D.C., June 26, 2007 Regulation, Reality and the Rule of Law: Issues for a Nuclear Renaissance: Washington and Lee University, June 23, 2007. The Future of Nuclear Energy, Bulletin of the Atomic Scientists Conference; University of Chicago, November 1, 2006 Nuclear Power and Climate Change, Society of Environmental Journalists, Burlington, Vermont, October 27, 2006 Nuclear Power, Climate Change and Public Policy, National Conference of State Legislatures, April, 2006. Electric Restructuring after Ten Years: Surprises, Shocks and Lessons, State Legislative Leaders’ Foundation, November, 2005; Nuclear Power’s American Prospects, Presentation to the California Energy Commission Nuclear Issues Workshop, August, 2005; Decommissioning Financing: Alternatives and Policies, Conference on the Future of the Medzamor Nuclear Power Plant, Yerevan, Armenia, June 2005; The Value of Sites Capable of Extended Storage of High Level Nuclear Waste, report for the Town of Wiscasset, Maine, December, 2004. Nuclear Power’s Prospects, NPEC/FRS/CAP/CEA Workshop, Paris, October 2004; Did the Butler Really Do It? The Role of Nuclear Regulation in Raising the Cost of Nuclear Power, Cato Institute, Washington D.C. March 2004; China’s Energy Regulatory Framework China Development Forum, Beijing, November 17, 2003; 8 China’s National Energy Plan (with Thomas Johansson) Background Reports to “China’s National Energy Strategy and Reform”, Development Research Center of the State Council, China Development Forum, November, 2003; Repeating History: Nuclear Power’s Prospects in a Carbon-Conscious World Yale School of Forestry and Environmental Studies, Leadership Council Meeting, October 24, 2003; What Nuclear Power Can Learn from Electric Restructuring, and Vice Versa, Aspen Institute, July 5, 2003; Renewal of the Price Anderson Act Testimony before the United States Senate Committee on Environment and Public Works Subcommittee on Transportation, Infrastructure and Nuclear Safety, January 23, 2002; Events Now Long Past: The 20-Year Road from Three Mile Island to Electric Utility Restructuring TMI 20th Anniversary Commemoration, National Press Club, Washington D.C., March 22, 1999; Preparing Nuclear Power for Competition NARUC Conference on “Nuclear Power in a Competitive Era: Asset or Liability?" January 23, 1997; Call Me Ishmael: Reflections on the Role of Obsession in Nuclear Energy Policy, NARUC annual meeting, November 13, 1989; Nuclear Power and Climate Change; Harvard Energy and Environmental Policy Center, January 13, 1989; Somewhere between Ecstasy, Euphoria and the Shredder: Reflections on the Term Pro-Nuclear Symposium on Nuclear Radiation and Public Health Practices and Policies in the Post-Chernobyl World, Georgetown University, September 18, 1987; Searching the Foreseeable Past: Nuclear Power, Investor Confidence and Reality Public Utilities Institute, East Lansing Michigan, July 30, 1987; Where Ignorant Armies Clash by Night: Relationships Among Nuclear Regulators and Regulated NARUC/INPO Seminar on Nuclear Power Plant Safety and Reliability, January 22, 1987; Why Do We Have a Nuclear Waste Problem Conference on Nuclear Waste, Naples, Maine, March 22, 1986; With Friends Like These: Reflections on the Implications of Nuclear Regulation Institute of Public Utilities, Williamsburg, Virginia, December 13, 1982; A Framework for Considering the Economic Regulatory Implications of the Accident at Three Mile Island Iowa State Regulatory Conference, May 20, 1982; The Man/Machine Interface Public Citizen Forum, March 8, 1982; A Perspective on Nuclear Power The Groton School, January 15, 1982; Reasonable Assurance, Regulation and Reality ALI-ABA Course of Study on Atomic Energy Licensing and Regulation, September 24, 1980; Misdefining the National Security in Energy Policy from Machiasport to Three Mile Island Environmental Law Institute, University of Maine, May 1, 1980 Condemned to Repeat It? Haste, Distraction, Rasmussen and Rogovin Risks of Generating Electricity, Seventh Annual National Engineers’ Week Energy Conference, February 21, 1980; Lightening the Nuclear Sled; Some Uses and Misuses of the Accident at Three Mile Island Seminar on the Problems of Energy Policy, New York University, November 21, 1979; The Nuclear Option: Did It Jump or Was It Pushed? NARUC Regulatory Studies Program, August 2, 1979; How a Regulatory View of Nuclear Waste Management is Like a Horse’s Eye View of the Cart 90th NARUC Annual Convention, November 15, 1978; 9 Sentence First: Verdict Later: Some Thoughts on the Level of Acclaim Thus Far Afforded the Nuclear Siting and Licensing Act of 1978 ALI-ABA Course of Study, September 28, 1978; Some Observations on Recent and Proposed Changes in Nuclear Regulatory Commission Jurisdiction, Atomic Industrial Forum Workshop on Reactor Licensing and Safety, April 5, 1978; Other Papers The Nexus between Energy Sector Reform and Democracy & Governance (co-lead author), for USAID, February, 2005; Public Interaction in the Georgian Energy Regulatory Process: Case Study for the USAID Project on the Nexus between Democratic Governance and Energy Sector Reform, April, 2004; Report on the Establishment of the State Energy Regulatory Commission of China (with David Moskovitz, Richard Weston and Wayne Shirley) for the Energy Foundation and the World Bank, January, 2003; A Plan of Action for a Multisector Regulatory Commission in Armenia, for USAID, February 2003. Economic Regulatory Issues in the Armenian Water Supply and Wastewater Treatment Sectors, for USAID, January 2003; Some Potential Approaches to the Enforcement of License Conditions and Regulatory Orders in Armenia, for USAID, June 2002 The Process of Auditing Utilities: A Primer for the Energy Regulatory Commission of Armenia, for USAID, June 2002 Some Potential Approaches to the Difficulties of Enforcement of License Conditions and Regulatory Orders in Georgia and Other NIS Countries, for USAID, December 2000. Public Interaction in the Georgian Energy Regulatory Process, for USAID, September 2000. Regulatory Policy and Energy Efficiency: Considerations for Tariff Setting and Licensing, for USAID, April 2000. Public Interaction in the Armenian Regulatory Process, for USAID, July 1999. The License as an Instrument for Regulation and the Furtherance of Competition in the N.I.S., for USAID, September, 1998. Applicability of U.S. Administrative Law Concepts to Regulatory Systems in the Newly Independent States, for USAID, June 1998. Performance-Based Regulation in a Restructured Electric Industry, (with Bruce Biewald, Paul Chernick, Susan Geller, Jerrold Oppenheim and Tim Woolf) for the National Association of Regulatory Utility Commissioners, November 1997. 10 CALLAN INSTITUTE Study 2017 Nuclear Decommissioning Funding Study NDT Fund Balances, Annual Contributions, and Decommissioning Cost Estimates as of Dec. 31, 2016 Table of Contents Executive Summary 2 Methodology 4 Investor-Owned Utilities 5 Public Power Utilities 6 Fund Balances 7 Contributions 8 Cost Estimates 9 Funding Status 10 Pro Forma vs. Actual Contributions 12 Cost Comparisons 14 Escalation Rates 15 Asset Allocations 16 Investment Returns of Investor-Owned Utilities 17 Global Nuclear Power Generation 19 Endnotes 20 Certain information herein has been compiled by Callan and is based on information provided by a variety of sources believed to be reliable for which Callan has not necessarily verified the accuracy or completeness of or updated. This report is for informational purposes only and should not be construed as legal or tax advice on any matter. Any investment decision you make on the basis of this report is your sole responsibility. You should consult with legal and tax advisers before applying any of this information to your particular situation. Reference in this report to any product, service, or entity should not be construed as a recommendation, approval, affiliation, or endorsement of such product, service, or entity by Callan. Past performance is no guarantee of future results. This report may consist of statements of opinion, which are made as of the date they are expressed and are not statements of fact. The Callan Institute (the “Institute”) is, and will be, the sole owner and copyright holder of all material prepared or developed by the Institute. No party has the right to reproduce, revise, resell, disseminate externally, disseminate to subsidiaries or parents, or post on internal websites any part of any material prepared or developed by the Institute, without the Institute’s permission. Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 1 Executive Summary Callan’s annual Nuclear Decommissioning Funding Study offers key insights into the status of 99 Operating Nuclear Power Reactors in the U.S. nuclear decommissioning funding in the U.S. to make peer comparisons more accurate and rel- (Number of Reactors per State) evant. The 2017 study covers 27 investor-owned and 27 public power utilities (excluding public power owners with small shares)1 with an ownership interest in the 99 operating nuclear reactors West of the Mississippi and 11 of the non-operating reactors in the U.S. The number of utilities with an ownership interest East of the Mississippi declined steadily in the early- to mid-2000s, due primarily to mergers/acquisitions and the sale of 1 3 2 1 1 6 4 1 1 11 2 1 9 2 4 1 2 4 2 After a nuclear power plant is closed, the facility must be decommissioned by safely 7 1 5 fairly steady. What Is Nuclear Decommissioning? 5 4 3 2 4 2 nuclear-generating facilities. However, in recent years the number of these utilities has remained 4 removing it from service and reducing residual radioactivity to a level that permits release of the property and termination of the operating license. Decommissioning 4 involves removing spent fuel from the reactor vessel, dismantling and disposing of Source: Nuclear Energy Institute radioactive components and materials such as the reactor and piping, and cleaning up any radioactive or hazardous contamination that remains on site. Investor-owned vs. Public Power Decommissioning Funding and Reporting The U.S. Nuclear Regulatory Commission (NRC) oversees the decommissioning of nuclear facilities 87% NDT Fund Balances and requires owners to set aside funds for the work. Approximately 70% of licensees are authorized to accumulate decommissioning funds over the operating life of their plants. These owners—gener- 13% ally traditional, rate-regulated utilities—gradually build up money for decommissioning over the plant’s operating life by collecting money from customers through rates that are then placed in a nuclear GHFRPPLVVLRQLQJ WUXVW 1'7 7KH UHPDLQLQJ OLFHQVHHV DSSUR[LPDWHO\ PXVW SURYLGH ¿QDQFLDO assurance through other methods, such as prepaid decommissioning funds and/or a surety method 83% or guarantee. Cost Estimates 17% Knowledge. Experience. Integrity. 1 Public power owners excluded: Dalton Utilities (Edwin Hatch 1 & 2 and Vogtle 1 & 2), Hudson Light and Power Department (Seabrook 1), Seminole Electric Cooperative (Crystal River 3), Taunton Municipal Lighting Plant (Seabrook 1), and seven municipalities in Florida (Crystal River 3). 2017 Nuclear Decommissioning Funding Study 2 Executive Summary Decommissioning Costs Include: Each year, owners must review the decommissioning cost requirements and the status of their decommissioning funding IRU HDFK UHDFWRU RU VKDUH RI D UHDFWRU WKH\ RZQ 7KH ¿QGLQJV PXVW EH UHSRUWHG WR WKH 15& HYHU\ WZR \HDUV RU DQQXDOO\ ZLWKLQ ¿YH \HDUV RI VKXWGRZQ RU RQFH WKH SODQW FHDVHV RSHUDWLRQ Labor Labor, energy, and waste material transportation and disposal are the primary components of decommissioning costs. &RVWV FDQ EH EDVHG RQ HLWKHU WKH 15& PLQLPXP FRVW IRUPXOD RU D VLWH VSHFL¿F FRVW HVWLPDWH FDOFXODWHG E\ DQ HQJLQHHU- Energy LQJ ¿UP²DV ORQJ DV WKDW DPRXQW LV JUHDWHU WKDQ WKH 15& FRVW ¿JXUH 6LWH VSHFL¿F HQJLQHHULQJ VWXGLHV SURYLGH WKH PRVW Waste material transportation & disposal reliable decommissioning cost estimates. These studies often include costs beyond the NRC’s scope of decommissionLQJ VXFK DV VSHQW IXHO PDQDJHPHQW DQG VLWH UHVWRUDWLRQ DOVR NQRZQ DV ³JUHHQ ¿HOGLQJ´ ZKLFK WRJHWKHU FDQ UXQ LQWR WKH hundreds of millions of dollars. Key Findings The shrinking gap between assets and liabilities in 2016 Cost Estimates of Decommissioning 1.3% Increase in costs Increase in funds 6.1% resulted in an increase in the funding level from 67% in 2015 to 70% in 2016 $64 billion $64 million in total NDT funds See pages 7, 9, and 11 for details. 2008: $55 billion In 2016 NDT contributions fell See page 7 for details. See page 8 for details. 2016: $91 billion (2008 v. 2016) = $10 billion See page 9 for details. Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 3 Methodology Lic Exp [Avg Yrs] 5 2044 [28] 1,2 2034-2037 [19] 2,2 2029-2046 [20] 4,1 2032-2045 [17] 6,7 2045 2030-2046 2045-2047 2030-2033 This Nuclear Decommissioning Funding Study covers two types of utilities: Nucle Capac ,QYHVWRU RZQHG XWLOLWLHV ZKLFK DUH SXEOLFO\ WUDGHG FRPSDQLHV WKDW SURYLGH IRU SUR¿W HOHFWULF VHUYLFH DQG 3XEOLF SRZHU XWLOLWLHV ZKLFK DUH RSHUDWHG E\ ORFDO JRYHUQPHQWV WR SURYLGH QRW IRU SUR¿W HOHFWULF VHUYLFH :H OLVW WKHVH FRPSDQLHV LQ DOSKDEHWLFDO RUGHU LQ WZR VHSDUDWH WDEOHV SDJHV DQG )RU HDFK WDEOH WKH ¿UVW FROXPQ provides the range of the years of license expiration (Lic Exp) for each unit owned along with the average years to [28] uclear 1,2 apacity Cost Est [19] 10,1 1,236 $865 [30] 6 2,285 $1,961 [15] 24 4,117 $2,491 Amt/KW expiration in brackets.1 We collected the decommissioning cost estimates, NDT fund balances, and annual contribu- $700 WLRQV IURP VRXUFHV LQFOXGLQJ EXW QRW OLPLWHG WR FRPSDQ\ . ¿OLQJV ZLWK WKH 6HFXULWLHV DQG ([FKDQJH &RPPLV- $858 VLRQ 6(& FRPSDQ\ GHFRPPLVVLRQLQJ UHSRUW ¿OLQJV ZLWK WKH 15& LQ DFFRUGDQFH ZLWK &)5 DQG FRPSDQ\ $605 annual reports. The NRC and Nuclear Energy Institute’s websites were also valuable resources in collecting and 6,726 $4,345 $646 1,217 $1,700 $1,397 10,155 $8,150 $803 665 $433 $651 2,430 $1,798 $740 8QOHVV RWKHUZLVH QRWHG FRVW HVWLPDWHV DUH LQ GROODUV DQG EDVHG RQ VLWH VSHFL¿F VWXGLHV UHSUHVHQWLQJ WKH WRWDO cost (license termination, spent fuel management, and site restoration) to decommission the facility. In order to PDNH WKH GDWD FRPSDUDEOH ZH KDYH FDOFXODWHG D ³SUR IRUPD´ GHFRPPLVVLRQLQJ FRVW HVWLPDWH ZKLFK LV WKH KLJKHU RI Annual Co Pro Forma nd Balance Fund Shortfall ($mm) ($mm) verifying information in this report. either the company cost estimate of decommissioning or $847/kilowatt (KW). We arrived at $847/KW by taking the Current Amount average cost per KW reported for all investor-owned utilities. Trust fund balances represent liquidation values and $557 $489 $7 include any internal reserves dedicated to decommissioning unless otherwise noted. Contributions include those to $1,803 $158 $9 both external trust funds and any internal reserves dedicated to decommissioning. $2,185 $1,301 $0 $4,484 $1,211 $2 $1,291 $409 $0 $6,207 $2,391 $14 $248 $315 $5 3UR IRUPD IXQG VKRUWIDOO LV WKH GLIIHUHQFH EHWZHHQ WKH ³SUR IRUPD´ FRVW HVWLPDWH RI GHFRPPLVVLRQLQJ DQG WKH IXQG balance. Pro forma contribution is the pro forma fund shortfall divided by the average years until license expiration as represented in brackets under the license expiration column. The average years until license expiration weights Annual Contribution ($mm) Current Amount Pro Forma Amount Shortfall/Avg Yrs $7 $18 $9 $8 $0 $66 $2 $70 $ $ Knowledge. Experience. Integrity. each unit’s license by its percent of the total megawatts owned by that particular utility, and takes into account license extensions granted by the NRC as of Dec. 31, 2016. 1 Non-operating units are included in all figures except the range of license expiration years. 2017 Nuclear Decommissioning Funding Study 4 Investor-Owned Utilities Company Lic Exp [Avg Yrs] 1 Ameren Corporation 1, 2 MW Nuclear Capacity Decommissioning Cost Estimate ($mm) Cost Est Amt/KW Cost or $847/KW Pro Forma Fund Balance Fund Shortfall ($mm) ($mm) Annual Contribution ($mm) Current Amount Pro Forma Amount Shortfall/Avg Yrs 2044 [28] 1,236 $865 $700 $1,047 $557 $489 $7 $18 2034-2037 [19] 2,285 $1,961 $858 $1,961 $1,803 $158 $9 $8 2029-2046 [20] 4,117 $2,491 $605 $3,486 $2,185 $1,301 $0 $66 2032-2045 [17] 6,726 $4,345 $646 $5,695 $4,484 $1,211 $2 $70 2045 [28] 1,217 $1,700 $1,397 $1,700 $1,291 $409 $0 $14 6 Duke Energy Corporation 8 2030-2046 [19] 10,155 $8,150 $803 $8,598 $6,207 $2,391 $14 $124 7 El Paso Electric Company 2045-2047 [30] 665 $433 $651 $563 $248 $315 $5 $11 8 Energy Future Holdings Corporation 3 2030-2033 [15] 2,430 $1,798 $740 $2,057 $938 $1,119 $17 $77 9 Entergy Corporation 9 2013-2044 [12] 8,779 $9,241 $1,053 $9,241 $4,910 $4,331 $49 $351 10 Exelon Corporation 5, 10 2026-2049 [22] 18,351 $10,738 $585 $15,538 $8,809 $6,728 $23 $305 11 FirstEnergy Corporation 1, 11 2026-2047 [15] 4,989 $5,260 $1,054 $5,260 $2,511 $2,749 $2 $179 2045 [28] 596 $360 $603 $505 $223 $282 $3 $10 2045 [29] 22 $13 $575 $19 $10 $8 $0 $0 2032 [16] 505 $316 $625 $428 $460 -$32 $2 -$2 15 NextEra Energy 7, 13 2030-2043 [17] 6,494 $5,539 $853 $5,539 $5,410 $129 $0 $7 16 NRG Energy 2, 7, 14 2027-2028 [11] 1,192 $986 $827 $1,009 $610 $399 $1 $35 17 2024-2025 [8] 2,388 $4,423 $1,852 $4,423 $2,606 $1,817 $96 $226 2 American Electric Power Company 3 3 Constellation Energy Nuclear Group 4, 5 4 Dominion Resources 6, 7 5 DTE Energy Company 1, 7 12 Great Plains Energy 1 13 Green Mountain Power Corporation 7, 12 14 MidAmerican Energy Company 4, 7 3DFL¿F *DV DQG (OHFWULF &RPSDQ\ 15 18 Pinnacle West Capital Corporation 2045-2047 [30] 1,225 $696 $568 $1,037 $726 $311 $2 $11 19 Public Service Company of New Mexico 7 2045-2047 [30] 429 $244 $569 $363 $254 $109 $4 $4 20 Public Service Enterprise Group 2033-2046 [23] 3,945 $3,645 $924 $3,645 $1,862 $1,783 $0 $79 [0] 430 $717 $1,666 $717 $751 -$35 $0 N.A. 7 21 San Diego Gas and Electric Company 1, 16 22 SCANA Corporation 2042 [26] 687 $739 $1,076 $739 $123 $616 $3 $24 23 Southern California Edison 16, 17 2045-2047 [8] 2,347 $3,322 $1,415 $3,322 $3,622 -$300 $0 -$36 24 Southern Company 18 2034-2049 [24] 3,699 $3,148 $851 $3,148 $1,604 $1,544 $6 $64 25 Talen Energy Corporation 4, 7 2042-2044 [26] 2,336 $1,200 $514 $1,978 $1,033 $945 $0 $36 7 26 Westar Energy 1 27 Xcel Energy 7 2045 [28] 596 $360 $603 $505 $200 $305 $5 $11 2030-2034 [16] 1,871 $3,271 $1,748 $3,271 $1,861 $1,410 $20 $89 89,712 $75,959 $847 $85,793 $55,298 $30,495 $271 $1,780 Investor-Owned Utilities Totals See page 20 for endnotes. Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 5 Public Power Utilities Decommissioning Cost Estimate ($mm) Pro Forma Fund Balance Fund Shortfall ($mm) ($mm) Annual Contribution ($mm) Lic Exp [Avg Yrs] MW Nuclear Capacity 1 Allegheny Electric Cooperative 1 2042-2044 [26] 260 $133 $513 $220 $124 $96 $0 $4 2 Austin Energy (City of Austin, TX) 2, 3 2027-2028 [11] 433 $359 $828 $367 $212 $155 $0 $14 3 Central Iowa Power Cooperative 2034 [17] 136 $208 $1,533 $208 $113 $96 $0 $6 4 Corn Belt Power Cooperative 4 2034 [17] 68 $76 $1,120 $76 $46 $30 $0 $2 2027-2028 [11] 1,083 $897 $828 $917 $546 $371 $1 $33 2043 [27] 1,200 $584 $486 $1,016 $283 $733 $1 $27 2043 [26] 95 $65 $684 $80 $74 $7 $0 $0 Company 5 CPS Energy (City of San Antonio, TX) 6 Energy Northwest 2, 5 6, 7, 8 7 Florida Municipal Power Agency 9 8 Kansas Electric Power Cooperative 10 9 Long Island Power Authority 11 10 Los Angeles Dept of Water and Power 12 11 Massachusetts Muni Wholesale Elec Co 13 12 Municipal Electric Authority of Georgia 14 13 Nebraska Public Power District 15 16 N Carolina Muni Power Agency No 1 17 17 Oglethorpe Power Corporation 14 18 Old Dominion Electric Cooperative Cost or $847/KW Current Amount Pro Forma Amount Shortfall/Avg Yrs 76 $46 $604 $64 $22 $43 $0 $2 2046 [30] 227 $177 $779 $192 $116 $76 $0 $3 2045-2047 [30] 240 $136 $568 $203 $133 $70 $0 $2 2030-2045 [18] 204 $143 $702 $173 $107 $65 $2 $4 2034-2049 [27] 831 $718 $864 $718 $440 $278 $0 $10 2034 [17] 15 N Carolina Electric Membership Corp 8, 17 Amt/KW 2045 [28] 801 $608 $759 $678 $582 $96 $0 $6 [8] 1,894 $2,126 $1,122 $2,126 $1,504 $622 $0 $80 2043 [27] 741 $434 $585 $627 $201 $427 $3 $16 2015-2034 14 New York Power Authority 16 Cost Est 2043 [27] 904 $529 $585 $765 $326 $440 $6 $16 2034-2049 [26] 1,213 $1,068 $880 $1,068 $458 $610 $5 $23 2038-2040 [22] 227 $125 $550 $192 $159 $33 $0 $1 19 Omaha Public Power District 19 [0] 484 $1,383 $2,858 $1,383 $382 $1,001 $0 N.A. 20 Orlando Utilities Commission 14 2043 [26] 66 $53 $802 $56 $42 $14 $0 $1 21 Piedmont Municipal Power Agency 17 2043 [27] 301 $176 $586 $255 $69 $186 $1 $7 [0] 38 $64 $1,688 $64 $72 -$8 $2 N.A. 2045-2047 [30] 736 $419 $569 $623 $370 $253 $0 $9 24 South Carolina Public Service Authority 2042 [26] 343 $415 $1,210 $415 $218 $197 $3 $8 25 South Mississippi Electric Power Assoc 21 2044 [28] 144 $123 $855 $123 $64 $59 $3 $2 26 Southern Calif. Public Power Authority 12 2045-2047 [30] 249 $141 $568 $211 $175 $36 $0 $1 27 Tennessee Valley Authority 2033-2055 [23] 8,476 $3,863 $456 $7,177 $1,673 $5,503 $0 $239 21,470 $15,070 $702 $20,000 $8,509 $11,490 $27 $514 18 22 Riverside Public Utilities 10, 20 23 Salt River Project 15 Public Power Utilities Totals See page 21 for endnotes. Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 6 Fund Balances NDT fund balances have risen substantially since NDT Fund Balances a sharp decline in 2008. The NDT funds covered in this study totaled nearly $64 billion in 2016. The $3.6 billion (6.1%) increase from a year earlier can Investor-Owned be attributed largely to capital market performance in Public Power Total $70 2016, which saw the U.S. stock and bond markets up roughly 10% and 3%, respectively. Investor-owned $60 funds have accounted for approximately 87% of total NDT fund balances over the past decade, with public ($ billions) $50 power funds accounting for the remainder. $40 $30 Did You Know? $20 2016 U.S. Electricity Generation by Source $10 $0 34% 30% 20% Natural Gas Coal Nuclear 8% 6% Other Renewables Hydroelectric 1% <1% Petroleum Liquids Other Energy 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Investor-Owned ($bn) 38.0 30.0 35.7 39.1 40.9 44.6 50.5 52.8 52.1 55.3 Public Power ($bn) 5.8 4.9 5.5 6.1 6.4 7.0 7.6 8.2 8.0 8.5 Total ($bn) 43.8 34.9 41.1 45.2 47.3 51.6 58.0 61.0 60.2 63.8 Source: U.S. Energy Information Administration Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 7 Contributions Total contributions fell for the second straight year, Annual Contributions to NDT Funds declining almost $64 million in 2016 to below $300 PLOOLRQ IRU WKH ¿UVW WLPH ,Q LQYHVWRU RZQHG contributions were 60% of their 2007 level while Investor-Owned public power contributions were just 25% of their Public Power Total $600 2007 level. $500 ($ millions) $400 $300 $200 $100 Did You Know? $0 7KH WRS ¿YH 8 6 VWDWHV LQ WHUPV RI QXPEHU RI 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Investor-Owned ($mm) 449 461 407 429 424 388 315 344 335 271 Public Power ($mm) 109 101 46 57 20 18 18 25 27 27 Total ($mm) 558 562 453 486 444 406 333 369 362 298 operating nuclear power reactors: 1. Illinois (11) 2. Pennsylvania (9) 3. South Carolina (7) 4. New York (6) 5. Alabama and North Carolina (tie 5 each) Source: Nuclear Energy Institute Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 8 Cost Estimates Total decommissioning cost estimates have risen Cost Estimates of Decommissioning in Current Dollars from a low of $55 billion in 2008, reaching $91 billion in 2016. The modest $1.1 billion (1.3%) increase from the $90 billion in 2015 is likely due to a combi- Investor-Owned QDWLRQ RI XSGDWHG VLWH VSHFL¿F FRVW VWXGLHV E\ VHY- Public Power Total $100 eral owners and NRC minimum amounts that fell from their 2014 estimates. $80 KDYH DFFRXQWHG IRU PRUH WKDQ IRXU ¿IWKV RI WRWDO costs over the past decade, with public power costs accounting for the rest. ($ billions) As with NDT fund balances, investor-owned costs $60 $40 $20 Did You Know? $0 Largest: Palo Verde in Arizona Smallest and Oldest: Oyster Creek in New 2012 2013 2014 2015 2007 2008 2009 2010 2011 Investor-Owned ($bn) 49.2 45.1 50.8 57.7 59.3 64.0 66.6 74.4 76.3 76.0 Public Power ($bn) 9.5 10.0 10.6 11.7 11.2 12.1 12.8 13.6 13.5 15.1 Total ($bn) 58.7 55.1 61.5 69.4 70.5 76.2 79.4 88.1 89.9 91.0 Of the U.S. operating nuclear power plants: 2016 Jersey Newest: Watts Bar in Tennessee Source: Nuclear Energy Institute Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 9 Funding Status Investor-owned assets have lagged behind costs by Decommissioning Funding Status (Assets Less Costs) approximately $11 billion to $24 billion over the past decade. Public power assets have lagged behind costs by approximately $3 billion to $7 billion over the Investor-Owned same period. Public Power Total $0 7KH WRWDO GH¿FLW GHFOLQHG IURP D \HDU KLJK RI DOPRVW -$5 $30 billion in 2015 to $27 billion in 2016. The improvement is due to strong market performance as well as modest growth in costs in 2016. ($ billions) -$10 -$15 -$20 -$25 -$30 Knowledge. Experience. Integrity. 2007 2008 2009 2010 2011 2012 2013 2014 2015 Investor-Owned ($bn) -11.2 -15.2 -15.2 -18.6 -18.5 -19.5 -16.1 -21.6 -24.2 -20.7 Public Power ($bn) -3.7 -5.0 -5.2 -5.6 -4.7 -5.1 -5.3 -5.4 -5.5 -6.6 Total ($bn) -14.9 -20.2 -20.3 -24.2 -23.2 -24.6 -21.4 -27.0 -29.7 -27.2 2016 2017 Nuclear Decommissioning Funding Study 10 Funding Status Assets as a percentage of costs averaged approxi- Decommissioning Funding Status (Assets as Percentage of Costs) mately 71% for investor-owned utilities over the past decade versus just 56% for public power utilities. Total funding stood at approximately 70% in 2016, an improvement from the previous year (67%). The improved funding status is largely due to the strong Investor-Owned Public Power Total 80% market performance of 2016. 70% Did You Know? 60% There are 99 nuclear power reactors operating in the U.S. in 30 states. Watts Bar 2 began commercial operation in WKH ¿UVW QXFOHDU SRZHU SODQW WR FRPH online in the U.S. since Watts Bar 1 in 1996. 2016 also saw the closure of Fort Calhoun in Nebraska, keeping the number of operating reactors in the U.S. at 99. 50% 40% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 65 are pressurized water reactors 34 are boiling water reactors While 4 reactors are under construction (Virgil C. Summer 2 & 3 in South Carolina and Vogtle 3 & 4 in Georgia), a handful of owners say they plan to close a number of plants in the coming years. Investor-Owned 77.3% 66.4% 70.2% 67.8% 68.9% 69.6% 75.8% 70.9% 68.3% 72.8% Public Power 60.9% 49.5% 51.4% 52.2% 57.8% 57.7% 58.8% 60.4% 59.4% 56.5% Total 74.7% 63.3% 66.9% 65.2% 67.1% 67.7% 73.1% 69.3% 66.9% 70.1% Source: Nuclear Energy Institute Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 11 Investor-Owned Pro Forma Contributions vs. Actual Contributions Actual investor-owned contributions outpaced the pro Investor-Owned Utilities forma estimate in the late 1990s before falling behind in 2000. In 2016, actual contributions were $1.5 bilPro Forma 1,780 1,865 1,314 1,430 271 315 388 $400 424 429 407 461 564 $800 449 703 1,160 1,225 1,035 1,003 901 1,137 1,156 1,490 892 889 875 1,123 1,015 1,244 983 ($ millions) $1,600 $1,200 1,615 1,551 2016, the lowest percentage in the 16-year period. 1,748 $2,000 335 tributions were just 15% of the pro forma estimate in Actual 339 lion lower than the pro forma estimate. Actual con- $0 2000 2002 2004 2006 2008 2010 2012 2014 2016 In order to make the data among companies more comparable, we have calculated a “pro forma” decommissioning cost estimate, which is the higher of either the company cost estimate of decommissioning or the product of the company KW times the average cost per KW reported for all investor-owned utilities. In 2016, this average cost was $847/KW. Pro forma contribution is the pro forma fund shortfall (the difference between the “pro forma” cost estimate of decommissioning and the fund balance) divided by the average years until license expiration. The average years until license expiration weights each unit’s license by its percent of the total megawatts owned by that particular utility and takes into account license extensions granted by the NRC as of the end of each year listed. Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 12 Public Power Pro Forma Contributions vs. Actual Contributions Actual public power contributions have lagged well Public Power Utilities behind the pro forma estimate from 2000 to 2016. While pro forma contributions grew from $324 million Pro Forma in 2000 to $514 million in 2016, actual contributions fell Knowledge. Experience. Integrity. 465 426 369 406 386 321 376 405 401 382 27 27 18 57 46 101 109 100 87 84 $0 2000 Source: Data from tables on pages 5-6. 19 Investor-owned 81% 95 $100 96 Public vs. Investor-Owned Generation Capacity 112 $200 111 $300 Did You Know? Public power 19% 383 348 324 ($ millions) $400 402 $500 18 at 35% in 2000, but have fallen to just 5% in 2016. 484 tions as a percentage of the pro forma estimate were 514 543 $600 25 from $112 million to just $27 million. Actual contribu- Actual 2002 2004 2006 2008 2010 2012 2014 2016 In order to make the data among companies more comparable, we have calculated a “pro forma” decommissioning cost estimate, which is the higher of either the company cost estimate of decommissioning or the product of the company KW times the average cost per KW reported for all investor-owned utilities. In 2016, this average cost was $847/KW. Pro forma contribution is the pro forma fund shortfall (the difference between the “pro forma” cost estimate of decommissioning and the fund balance) divided by the average years until license expiration. The average years until license expiration weights each unit’s license by its percent of the total megawatts owned by that particular utility and takes into account license extensions granted by the NRC as of the end of each year listed. 2017 Nuclear Decommissioning Funding Study 13 Cost Comparisons :H JDWKHU ERWK 15& DQG VLWH VSHFL¿F WRWDO FRVW HVWL- Decommissioning Cost Comparisons 6LWH 6SHFL¿F 7RWDO 15& 0LQLPXP mates where possible in order to capture the relative PDJQLWXGH RI WKH WZR ¿JXUHV 7KLV SDJH LV XSGDWHG Investor-Owned Total ELHQQLDOO\ WR FRLQFLGH ZLWK WKH 15&¶V ¿OLQJ VFKHGXOH Public Power 400% Notes 6LWH VSHFL¿F FRVW HVWLPDWHV WRWDOHG DSSUR[LPDWHO\ 300% billion versus $39 billion under the NRC minimum for- This page is updated biennially mula in 2016, a difference of $34 billion. The median 200% VLWH VSHFL¿F WRWDO FRVW HVWLPDWH ZDV DSSUR[LPDWHO\ 100% WR FRLQFLGH ZLWK WKH 15&¶V ¿OLQJ schedule. 1.75 times the NRC minimum formula amount for all Bars depict the full range of cost 0% plants regardless of ownership. Assuming license All Public Power 75th Percentile 220% 224% 220% Median 177% 182% 175% 25th Percentile 156% 156% 157% estimates as a percentage of the Average 190% 189% 204% NRC minimum formula amounts. termination costs (the NRC portion of decommissionLQJ UHSUHVHQW DSSUR[LPDWHO\ RI WRWDO VLWH VSHFL¿F costs, the NRC formula amounts are roughly in line ZLWK WKH VLWH VSHFL¿F HVWLPDWHV IRU OLFHQVH WHUPLQDWLRQ Taking the assumption one step further, if the license WHUPLQDWLRQ SRUWLRQV RI WKH VLWH VSHFL¿F HVWLPDWHV DUH NRC minimum) while the darker shading represents the 25th to 75th percentiles. The percentages WR WKH OHIW VKRZ VLWH VSHFL¿F FRVW The data set includes 2016 cost roughly in line with the NRC formula amounts, then spent fuel management and site restoration costs are FRPSDULVRQV VLWH VSHFL¿F WRWDO InvestorOwned estimates Dataset Breakdown for 62 plants—not necessarily distinct or wholly- what account for most of the additional $34 billion in 100 Total decommissioning costs. 24 Public Power The distributions are positively skewed, which 76 owned—owned by 45 utilities. Investor-Owned UHVXOWV LQ DYHUDJH FRVW FRPSDULVRQ ¿JXUHV WKDW DUH approximately 5%–15% greater in absolute terms than the medians. 45 21 62 16 46 24 Utilities Plants* Reactors* *Not necessarily distinct or wholly owned plants/reactors. Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 14 Escalation Rates Utilities employ escalation rates to forecast future Decommissioning Escalation Rates decommissioning expenditures given current dollar cost estimates. The escalation rates shown to the Total Investor-Owned Public Power ULJKW DUH D EOHQG RI HVFDODWLRQ UDWHV VSHFL¿F WR WKH different cost categories such as labor, energy, and 6% burial. The data set includes escalation rates for 68 5% plants—not necessarily distinct or wholly-owned— 4% owned by 39 utilities. 3% 2% The median escalation rate for all plants is 2.69% with 1% an average of 3.15%. Public power plant escalation 0% rates tend to be approximately 10–20 basis points above those of investor-owned plants. The median Escalation Rates by Plant* public power plant rate is 2.72% and average is 3.26%, All contrasted with the median investor-owned plant esca- Escalation Rates by Owner InvestorOwned Public Power All InvestorOwned Public Power 75th Percentile 4.00% 3.79% 4.00% 4.00% 3.54% 4.00% Median 2.69% 2.60% 2.72% 3.00% 3.00% 2.86% From an owner perspective, the median public power 25th Percentile 2.47% 2.40% 2.49% 2.49% 2.49% 2.49% utility rate is 2.86% and the average is 3.32%, versus a Average 3.15% 3.09% 3.26% 3.26% 3.20% 3.32% median investor-owned utility escalation rate of 3.00% Count 68 43 25 39 19 20 lation rate of 2.60% and average of 3.09%. and average of 3.20%. The median escalation rate for all owners is 3.00% with an average of 3.26%. *Not necessarily distinct or wholly owned plants. Note: Bars depict the full range of escalation rates while the darker shading represents the 25th to 75th percentiles. Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 15 Asset Allocations Asset allocation information is gathered each year for Investor-Owned Utilities’ Asset Allocations (as of 12/31/2016) all NDT owners. Unfortunately, the public power data set is too limited to be meaningful so only investorowned utility asset allocation data is displayed here; 80% 25 of the 27 investor-owned utilities are represented in the data set. $OO 1'7V DUH LQYHVWHG LQ HTXLW\ DQG ¿[HG LQFRPH securities with a median allocation of 56% equity and 60% 40% 20% ¿[HG LQFRPH 0% Approximately two-thirds of the owners reported a cash equivalent allocation that tended to range in the low single digits. Four of the utilities reported allocations to real estate, SULYDWH HTXLW\ DQG RU KHGJH IXQGV ZLWK RQH ¿IWK LQGLFDWLQJ DQ ³RWKHU´ DOORFDWLRQ ,Q PRVW LQVWDQFHV WKH Equity Fixed 75th Percentile 66% 43% 2% 17% 3% Median 56% 39% 1% 12% 2% 25th Percentile 51% 32% 1% 7% 2% Percent Invested 100% 100% 64% 16% 20% 25 25 4 5 Count Cash 16 Alternatives Other other allocation could represent cash, alternatives, or other securities. Note: Bars depict the full range of asset allocations while the darker shading represents the 25th to 75th percentiles. Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 16 Investment Returns of Investor-Owned Utilities We show the range of returns for 23 of the 27 inves- Investor-Owned Utilities’ Returns (Periods ended 12/31/2016) tor-owned utilities for periods ended Dec. 31, 2016. Investor-owned utilities with nuclear power reactors outperformed the S&P 500 Utilities Index over all periods with mixed results compared to the broad market S&P 500 Index. 120% 100% 80% 60% 40% 20% 0% -20% Last Quarter Last Year Last 3 Years Last 5 Years Last 10 Years 75th Percentile 5.6 25.3 18.1 14.8 10.3 Median 0.4 17.8 14.7 12.2 7.9 25th Percentile -1.6 11.9 8.6 5.9 3.1 S&P 500 3.8 12.0 8.9 14.7 6.9 S&P 500 Utilities 0.1 16.3 12.6 10.4 7.0 23 23 23 Count 23 23 Note: Bars depict the range of returns from the 5th to 95th percentile while the darker shading represents the 25th to 75th percentiles. Last year return figures include a 125% return for Talen Energy. Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 17 Investment Returns of Investor-Owned Utilities (Continued) This chart shows the 10-year return and standard devi- Annualized Return vs. Standard Deviation (10 years ended 12/31/2016) ation ended Dec. 31, 2016, for the 23 investor-owned utilities along with the S&P 500 Utilities and S&P 500 Indices. A majority of investor-owned utilities had a Investor-Owned Utilities more volatile (greater standard deviation) return pattern than both the indices over the past 10 years. 20% It is important to note that nuclear power generation 15% accounts for varying degrees of the utilities’ overall Annualized Return businesses. 10% 5% S&P 500 Utilities S&P 500 0% -5% -10% 10% 15% 20% 25% 30% 35% Standard Deviation Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 18 Global Nuclear Power Generation Top 10 Nuclear Generating Countries in 2016 Top 10 Countries by Nuclear Power as a Percentage of Total Electricity Generation Country Share of Total Electricity France Slovakia Ukraine Belgium Hungary Sweden Slovenia Bulgaria Switzerland Finland 72.3% 54.1% 52.3% 51.7% 51.3% 40.0% 35.2% 35.0% 34.4% 33.7% #1 United States 805.3 bn kWh 19.7% total electricity 99 operating units #2 France 384.0 bn kWh 72.3% total electricity 58 operating units #3 China 210.5 bn kWh 3.6% total electricity 36 operating units #4 Russia 179.7 bn kWh 17.1% total electricity 37 operating units #5 South Korea #7 Ukraine 154.3 bn kWh 30.3% total electricity 25 operating units #6 Canada 81.0 bn kWh 52.3% total electricity 15 operating units #8 Germany 97.4 bn kWh 15.6% total electricity 19 operating units 80.1 bn kWh 13.1% total electricity 8 operating units #9 United Kingdom 65.1 bn kWh 20.4% total electricity 15 operating units #10 Sweden 60.6 bn kWh 40.0% total electricity 10 operating units Source: Nuclear Energy Institute Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 19 Endnotes Endnotes from page 5: Knowledge. Experience. Integrity. 1 Cost estimate in 2014 dollars 2 2014 contribution 3 Cost estimate in 2015 dollars 4 NRC mininum cost estimate 5 Fair market value; license termination funds only 6 Includes 660 MW Millstone Unit 1 and 566 MW Kewaunee, which have been shut down permanently. Total cost less certain spent fuel costs expected to be recovered from the Department of Energy. 7 Fair market value 8 Includes 860 MW Crystal River Unit 3, which has been shut down permanently. Cost estimate in 2013 and 2014 dollars. 9 Includes 620 MW Vermont Yankee, which has been shut down permanently. Excludes Indian Point Unit 3 and James A. Fitzpatrick (trust funds retained by New York Power Authority). Cost estimates in 2012 and 2014–2017 dollars. 10 Includes 210 MW Dresden Unit 1 and 115 MW Peach Bottom Unit 1, which have been shut down permaQHQWO\ &RPELQDWLRQ RI VLWH VSHFL¿F OLFHQVH WHUPLQDWLRQ FRVW HVWLPDWHV DQG 15& PLQLPXPV 11 Includes 906 MW Three Mile Island Unit 2, which has been shut down permanently 12 Total cost less certain spent fuel costs expected to be recovered from the Department of Energy &RPELQDWLRQ RI VLWH VSHFL¿F WRWDO FRVW HVWLPDWHV LQ GROODUV DQG 15& PLQLPXPV 14 Cost estimate in 2012 dollars 15 Includes 65 MW Humboldt Bay Unit 3, which has been shut down permanently 16 Includes 1,070 MW San Onofre Unit 2 and 1,080 MW San Onofre Unit 3, which have shut down permanently 17 Cost estimate in 2014 and 2016 dollars 18 Cost estimate in 2013 and 2015 dollars 2017 Nuclear Decommissioning Funding Study 20 Endnotes Endnotes from page 6: Knowledge. Experience. Integrity. 1 NRC mininum cost estimate in 2010 dollars 2 Cost estimate in 2012 dollars 3 Fund balance as of Sept. 30, 2016 4 Cost estimate in 2008 dollars 5 2015 contribution 6 Cost estimate in 2015 dollars 7 Fund balance as of June 30, 2016, and Dec. 31, 2016 8 2014 contribution 9 2015 cost estimate less certain spent fuel costs expected to be recovered from the Department of Energy 10 Cost estimate in 2014 dollars 11 Cost estimate in 2012 dollars and represents license termination costs only 12 Fund balance as of June 30, 2016 13 Cost estimate in 2015 and 2016 dollars 14 Cost estimate in 2015 dollars 15 NRC mininum cost estimate 16 Cost estimate in 2007 and 2012 dollars 17 Cost estimate in 2013 dollars 18 2016 cost estimate less certain spent fuel costs expected to be recovered from the Department of Energy 19 Includes 484 MW Fort Calhoun Unit 1, which shut down permanently in 2016 20 Includes 1,070 MW San Onofre Unit 2 and 1,080 MW San Onofre Unit 3, which shut down permanently in 2013 and are decommissioning 21 Cost estimate in 2017 dollars 2017 Nuclear Decommissioning Funding Study 21 About the Author Julia A. Moriarty, CFA, is a Senior Vice President and Co-Manager of Callan’s Capital Markets Research group. The Capital Markets group helps Callan’s fund sponsor clients with their strategic planning, conducting asset/liability studies, developing optimal investment manager structures, and providing custom research on a variety of investment topics. The group consults to a wide range of FOLHQWV LQFOXGLQJ GH¿QHG EHQH¿W DQG GH¿QHG FRQWULEXWLRQ HPSOR\HH EHQH¿W SODQV FRUSRUDWH SXEOLF and Taft-Hartley), endowments, foundations, insurance, hospitals, health-care systems, and nuclear GHFRPPLVVLRQLQJ WUXVWV -XOLD DOVR FRQGXFWV WDUJHW GDWH DQG GLYHUVL¿HG UHDO UHWXUQ PDQDJHU UHVHDUFK and publishes Callan’s annual Nuclear Decommissioning Funding Study. Julia is a shareholder of the ¿UP DQG LV D PHPEHU RI &DOODQ¶V 0DQDJHPHQW &RPPLWWHH Julia earned an MBA from the University of California at Berkeley’s Haas School of Business and a BS in Finance from California Polytechnic State University at San Luis Obispo. She earned the right to use the Chartered Financial Analyst designation and is a member of the CFA Society of San Francisco and CFA Institute. Knowledge. Experience. Integrity. 2017 Nuclear Decommissioning Funding Study 22 About Callan &DOODQ ZDV IRXQGHG DV DQ HPSOR\HH RZQHG LQYHVWPHQW FRQVXOWLQJ ¿UP LQ (YHU VLQFH ZH KDYH HPSRZHUHG LQVWLWXtional clients with creative, customized investment solutions that are backed by proprietary research, exclusive data, and ongoing education. Today, Callan advises on more than $2 trillion in total fund sponsor assets, which makes it among WKH ODUJHVW LQGHSHQGHQWO\ RZQHG LQYHVWPHQW FRQVXOWLQJ ¿UPV LQ WKH 8 6 &DOODQ XVHV D FOLHQW IRFXVHG FRQVXOWLQJ PRGHO WR VHUYH SHQVLRQ DQG GH¿QHG FRQWULEXWLRQ SODQ VSRQVRUV HQGRZPHQWV IRXQGDWLRQV LQGHSHQGHQW LQYHVWPHQW DGYLVHUV LQYHVWPHQW PDQDJHUV DQG RWKHU DVVHW RZQHUV &DOODQ KDV ¿YH RI¿FHV WKURXJKRXW WKH 8 6 )RU PRUH LQIRUPDWLRQ SOHDVH YLVLW www.callan.com. About the Callan Institute The Callan Institute, established in 1980, is a source of continuing education for those in the institutional investment community. The Institute conducts conferences and workshops and provides published research, surveys, and newsletters. The Institute strives to present the most timely and relevant research and education available so our clients and our associates stay abreast of important trends in the investments industry. For more information about this report, please contact: Your Callan consultant or Julia Moriarty at moriarty@callan.com © 2017 Callan LLC. Corporate Headquarters 5HJLRQDO 2I¿FHV 600 Montgomery Street Suite 800 San Francisco, CA 94111 800.227.3288 415.974.5060 Atlanta 800.522.9782 Denver 855.864.3377 Chicago 800.999.3536 New Jersey 800.274.5878 www.callan.com @CallanLLC Callan