US NRC PR on Self-Guarantee re Decommissioning

[Mike Grissom <mikeg@SLAC.Stanford.EDU>]

Radsafers,

Related to an earlier note on radsafe, the following
U.S. NRC Press Release may be of interest:

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Nuclear Regulatory Commission
Office of Public Affairs
Washington DC 20555
Telephone: 301/415-8200 -- E-mail: opa@nrc.gov
No. 98-82
May 26, 1998

NRC TO ALLOW MORE LICENSEES TO USE SELF-GUARANTEE
FOR DECOMMISSIONING FUNDING

The Nuclear Regulatory Commission is amending its
regulations to allow additional licensees who meet stringent
financial criteria to self-guarantee adequate funds for
decommissioning.

The amendments extend the option of using a self-guarantee
to non-profit licensees, such as universities and hospitals,
and to for-profit licensees who do not issue bonds.

Since 1993, NRC regulations have permitted financially
strong for-profit corporate licensees (other than electric
utilities), with bond ratings of A or better, to use a
procedure called "self-guarantee" to ensure that adequate
funds will be available for decommissioning. Other
methods--available to all licensees--include a surety bond
or letter of credit, prepayment, insurance, or external
sinking fund.

Under a self-guarantee, the licensee gives the Commission a
written commitment that the licensee will fund and carry
out the required decommissioning activities. Licensees who
use this option must pass an annual financial test and
report promptly to the NRC any deterioration in financial
condition.

Licensees affected by the amended regulations would have to
meet the following financial criteria:

--For colleges and universities, either (1) a bond
rating of A or better; or (2) for institutions
that do not issue bonds, an unrestricted endowment
of at least $50 million or at least 30 times the
estimated decommissioning costs, whichever is
greater.

--For hospitals, either (1) a bond rating of A or
better; or (2) for hospitals that do not issue
bonds, satisfaction of four tests specified in the
regulations for liquidity, net revenue, leverage,
and size.

--For industrial corporations that do not issue
bonds, satisfaction of the following tests: net
worth would have to be greater than $10 million or
at least 10 times the estimated decommissioning
costs, whichever is greater; cash flow would have
to be more than 15% of liabilities; and liabilities
would have to be less than 150% of net worth.

The NRC estimates that 25 to 30 college and university
licensees, 10 to 14 hospitals, and two to four
non-bond-issuing industrial companies might qualify for
self-guarantee.

Further details on the rule are contained in a Federal
Register notice to be published shortly. The revisions will
be effective 30 days after the Federal Register notice.

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