Pennsylvania Nuclear Decommissioning Underfunded

The General Accounting Office identified significant funding shortfalls in nuclear decommissioning funds throughout the nation. Among the plants with inadequate trust fund balances: Limerick 1 & 2; Peach Bottom 1; Three Mile Island-2; and Susquehanna 1-& 2. The GAO estimated that the combined value of all owners' decommissioning fund accounts in 2000--about $27 billion--was less than half of what would be projected to be sufficient to ensure adequate funds would be available for eventual decommissioning. The report is on GAO's Web site (

Eric Epstein, Chairman of TMI-Alert and expert witness before the Pennsylvania Public Utility Commission on nuclear decommissions, stated: "This report verifies our research over the last 20 years (Please refer to Table 1), and points to a substantial underfunding on the scale of 1980s Savings & Loan collapse." Epstein added, "Our position remains steadfast: Shareholders, and not rate payers, are liable for inadequate funding and dubious accounting methods."

Epstein noted, "The shortfall is actually worse than the GAO reported because the NRC estimates are based on partial projections knows as 'targeted funding levels'".

1 GAO-04-032, Decommissioning Nuclear Power Plants, Appendix I & II, pp. 28-40.)

Decommissioning Shortfalls
Limerick 1 & 2 , Peach Bottom 2 & 3, Susquehanna 1 & 2, and Three Mile Island 1

Generating Station(s)1985 Study/1995 Study$ Increase
Limerick 1 & 2$272m/$986m$714m
Peach Bottom 2 & 3$273m/$947m$674m
Salem 1 & 2$271m/$701m$430m
Three Mile Island 1(a)$60m(b)/$368m or $431m(c)$308-$371
(a) GPU reported that the cost to decommission TMI-2 more than doubled in 48 months. By 1997, the decommissioning estimate had risen 110% in four years to $433 million, 1997, GPU Annual Report.

(b) TMI-1 total, projected decommissioning expense based on ENTOMB, 1986, GPU Annual Report, p. 39.

(c) TLGıs estimate as referenced in the 1998, GPU Annual Report, p. 59. (Source: PECO Energyıs Response to EE-I-4)

Sources: Annual Reports, the Nuclear Regulatory Commission, and Pennsylvania Public Utility Commission.

Table 2
Limerick 1 & 2 , Peach Bottom 2 & 3, Susquehanna 1 & 2, and Three Mile Island 1

ReactorType/Mfg./AEMW/Life & Death
Limerick 1*(BWR/GE/Bechtel)1,055+/2/86-2024
Limerick 2*(BWR/GE/Bechtel)1,055+/1/90-2029
Note: 100% owned and operated by PECO Energy/Exelon Generation.
Peach Bottom 1(HighTempGraphiteMod)40/(1966-1974)
Peach Bottom 2*(BWR/GE/Bechtel)1,065+/7/74(2014; 2034)
Peach Bottom 3*(BWR/GE/Bechtel)1,065+/1274(2014; 2034)
Note: Connectiv sold 7.5% per unit share of Peach Bottom 2 & 3 to Exelon and PSEG. Although there is joint ownership, 50%/50% Exelon operates Peach Bottom 2 & 3. Connectiv sold 7.5% per unit share of Peach Bottom 2 & 3 to Exelon and PSEG. PSEG is the majority owner (57.51%) and operates Salem 1 & 2).
Susquehanna 1*(BWR/GE/Bechtel)1,032+/6/83-2023
Susquehanna 2*(BWR/GE/Bechtel)1,091+/2/85-2025
Note: PPL owns 90% of both units and the Allegheny Electric Cooperative owns the remaining 10%.
Three Mile Island -1*(PWR/B&W/B&R)819+/40/ 1974-2014
Note: 100% owned and operated by AmerGen/Exelon Generation.
Three Mile Island-2*(PWR/B&W/B&R)Off line: 3/28/79
Note: 100% owned by FirstEnergy Corporation.
Source: Annual Reports, the Nuclear Regulatory Commission, and Pennsylvania Public Utility Commission.

Nuke fund falls short of target, report says

Owners required to set aside money to dismantle plants

Friday, December 05, 2003
Of The Patriot-News

The owners of a third of the nation's nuclear plants, including the damaged reactor at Three Mile Island, aren't setting aside enough money to dismantle the plants when they close, according to a new federal study.

That could mean higher electric rates for some Pennsylvanians if companies increase their annual contributions to catch up. From Our Advertiser

If the companies don't close the shortfall, the study warns, taxpayers may face billions in cleanup costs when the plants' useful lives are ended, most likely decades from now.

Nuclear plant owners are required to make payments into a trust fund, based on the estimated cost of decommissioning their plants. Thirty-three owners who control all or part of 42 nuclear stations are behind in those payments, according to the General Accounting Office, the nonpartisan investigative arm of Congress.

The total decommissioning bill for all existing plants is estimated to be $33 billion.

The lifetime of a nuclear power plant is estimated to be 40-60 years. At that age, industry experts say, facility wear and fatigue can make continued operation unsafe. The plants are licensed by the federal Nuclear Regulatory Commission for 40 years, with the opportunity to apply for extensions.

Under federal law, decommissioned plants must be dismantled and the land returned to pristine condition.

Pennsylvania plants that are under-funded, according to the GAO report, are Limerick 1 and 2 in Montgomery County; Peach Bottom 1 in York County; Three Mile Island 2, and Susquehanna 1 and 2 near Berwick.

The TMI-2 unit, closed since the 1979 accident at the plant, is in "monitored storage" status. It will not go through the decommissioning process until the adjacent TMI-1 unit closes.

TMI-2 is jointly owned by Metropolitan-Edison, Pennsylvania Electric and Jersey Power and Light, which are subsidiaries of First Energy Corp. The GAO said the companies' payments to the trust fund were up to 25 percent below what is needed.

Declining investments for First Energy's trust fund diminished its value in recent years, spokesman Scott Shields said. But the fund was not in danger, he said.

"We are aware of our commitments [to save for decommissioning] and are taking the necessary steps to do that," Shields said.

The GAO report was sharply criticized by the NRC and by Exelon Nuclear, which owns controlling interests in the undamaged TMI-1, and the Peach Bottom and Limerick stations.

"All of our sites are fully funded for decommissioning," said Exelon spokesman Craig Nesbitt. "They are on track to be fully funded now, and they will be fully funded when the time comes to decommission."

The operating license for TMI-1 is scheduled to expire in 2014; Exelon has not announced a decision on seeking renewal.

Nesbitt said the GAO report failed to account for the fact that companies vary their funding strategies, depending on the makeup of their plants. For example, he said, most plants have two or more reactors that share equipment. Plus, two-reactor plants will not be decommissioned until both units are spent.

The GAO used the contributions made by nuclear plant operators for 1999 and 2000 to calculate how the funds would accumulate by the time each plant's license expired, said Tim Guinane of the GAO.

The agency found that nuclear plant operators had set aside about $26.9 billion as of 2000, about 47 percent more than needed. But the total was misleading, the report said, because many companies were underfunded and the money is not transferable.

The GAO findings were disputed by the NRC, which reported in 2001 that owners' contributions were on track to meet their financial obligations. The NRC used a different method of assessment, and did not accept the GAO's version, said William D. Travers, NRC executive director for operations.

The GAO said the NRC's method of tracking owner contributions was ineffective because they were based on financial pledges and not on actual dollars.

Both the GAO and the NRC projections could be wrong. No one knows for sure how much it will cost to decommission a nuclear plant, because it has not been done.

"Estimates are based on the volume of materials that would have to be shipped and stored," Exelon's Nesbitt said. "... Nobody really knows [what the cost will be.] You base it on the best data you have available."

Eric Epstein, president of Three Mile Island Alert, and founder of the EFMR Monitoring Fund, who has helped negotiate cost-recovery plans for nuclear plants before the Pennsylvania Utilities Commission, estimates that the industry is billions short of what will be needed.

Estimates are based on plans that assume that low-level nuclear waste from Pennsylvania plants will be shipped to a dump site that doesn't exist, Epstein said. The estimate also assumes there will be a place to store the spent fuel rods and other high-level wastes. The federal government has yet to build such a site.