Attention Businesses: When is your bottom line not the total remaining after expenses? Answer: when government dictates it

February 4th, 2013

NRC targets Exelon over money set aside for nuke plant closings

Two high-level executives of the owner of the Three Mile Island and Peach Bottom nuclear plants deliberately underestimated the amount of money required to be set aside to retire the two plants and others, according to the U.S. Nuclear Regulatory Commission.

The reporting estimates of decommissioning costs, which are required by the NRC, were made by two Exelon executives in its Chicago headquarters, the NRC said.

"Incomplete and inaccurate information" in reports over four years led to a shortfall of about $1 billion in setaside funds, affecting 12 nuclear plants in the Exelon fleet, the NRC said.

After a two-year investigation, the NRC said it had identified multiple instances when Exelon calculated needed funding amounts less than the minimum required. Also, cost estimates for decommissioning were sometimes lower than required under the NRC formula.

The names of the executives were not released by the NRC.

In Pennsylvania, decommissioning funds for the Peach Bottom, TMI and Limerick nuclear plants were affected.

The NRC said it is considering "escalated enforcement action" against Exelon.

One NRC official said fines for the violations could total $140,000 a day.

Exelon has disputed the NRC's findings.

"We are not aware of any evidence supporting a conclusion that Exelon employees performed or condoned deliberate misconduct or intentionally violated regulatory requirements," Exelon spokesman David Tillman said in a statement.

He said Exelon "acted in good faith when providing decommissioning funding data to the NRC, reporting timely and accurate information based on our understanding of the regulations."

The NRC has said Exelon is now in compliance in setting aside required decommissioning funds.

The agency requires the owners of all commercial nuclear plants to be saving money so that adequate funds will be available when the plants are taken out of service and the sites are restored to a safe condition.

The NRC requires a minimum amount be set aside in funds — usually the money is put in trust funds — based on a complicated formula that considers current costs of retiring such facilities.

The NRC estimates closing a nuclear plant to required conditions will cost anywhere from $280 million to $612 million in current dollars.

Before the NRC takes its enforcement action, it will meet privately with Exelon representatives this month to hear their version of events.

TMI's license currently is set to expire in 2034; Peach Bottom's license runs through 2033.

In 2010, Eric Epstein, a Harrisburg-based nuclear watchdog, petitioned the NRC, alleging that the owner of the closed Unit 2 reactor at TMI was not setting aside adequate decommissioning funds. But the NRC ruled that FirstEnergy had adequately provided planned setaside funds so that enough money will be on hand whenever the active TMI plant shuts down.