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A BILL TO BE ENTITLED
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AN ACT
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relating to regulation of the decommissioning costs of certain |
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nuclear-powered commercial electric generation units. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter E, Chapter 39, Utilities Code, is |
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amended by adding Section 39.206 to read as follows: |
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Sec. 39.206. NUCLEAR-POWERED ELECTRIC GENERATION UNIT |
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DECOMMISSIONING COSTS. (a) In this section: |
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(1) "Electric customer" means all retail electric |
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customers in this state. |
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(2) "Decommissioning" includes decommissioning and |
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decontamination of a nuclear generating unit consistent with |
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federal Nuclear Regulatory Commission requirements. |
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(3) "Nuclear decommissioning trust" means an external |
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and irrevocable trust created for the purpose of funding |
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decommissioning obligations for a nuclear generating unit, |
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consistent with federal Nuclear Regulatory Commission |
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requirements. |
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(4) "Nuclear generating unit" means an electric |
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generating facility that uses nuclear energy to generate |
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electricity for sale and is permitted by the Nuclear Regulatory |
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Commission. |
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(b) This section applies only to a nuclear generating unit |
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that: |
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(1) is constructed in this state after January 1, |
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2002; and |
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(2) is owned by a power generation company. |
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(c) A power generation company that owns a nuclear |
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generating unit shall fund out of operating revenues on an annual |
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basis: |
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(1) the costs associated with funding the |
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decommissioning obligations for the nuclear generating unit; or |
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(2) the power generation company's portion of the |
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decommissioning costs for the nuclear generating unit in proportion |
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to the company's ownership interest in the nuclear generating unit |
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if the unit is owned by more than one person. |
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(3) The obligation to fund a nuclear decommissioning |
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trust fund is not dischargeable in bankruptcy. |
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(d) The power generation company shall establish a nuclear |
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decommissioning trust for a nuclear generating unit it owns or for |
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the proportionate share of a nuclear generating unit of which it |
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owns a part. The funding obligations for the trust must begin |
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before the nuclear generating unit receives its initial fuel load |
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and begins commercial operation to generate power for sale. The |
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terms of the trust must be consistent with trust terms and |
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conditions the federal Nuclear Regulatory Commission requires for |
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providing financial assurance for decommissioning. |
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(e) The commission by order shall establish for a nuclear |
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generating unit the amount of annual decommissioning funding |
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necessary to meet the decommissioning obligations for the nuclear |
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generating unit over the unit's operating license period as |
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established by the federal Nuclear Regulatory Commission. The |
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power generating company shall perform a study on the cost of |
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decommissioning to establish the decommissioning obligations |
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before the nuclear generating unit begins commercial operation to |
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generate power for sale. The study shall be performed by the power |
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generating company at least once in each three year period during |
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the unit's operating license period using the most current |
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reasonably available information on the cost of decommissioning. |
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The commission shall conduct a proceeding at least once in each |
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three-year period to review the study and other current reasonably |
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available information on the cost of decommissioning and determine |
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the reasonableness of the study. |
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(f) The power generating company shall file an annual report |
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to provide the status of the decommissioning trust fund and to |
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update the commission as to its financial condition and ability to |
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fund the decommissioning trust fund. In determining the amount of |
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the annual decommissioning funding under this subsection, at least |
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once in each three-year period, the commission shall conduct a |
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proceeding to review the balance of each nuclear decommissioning |
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trust and the projected amount of annual decommissioning funding |
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for the associated nuclear generating unit as well as the financial |
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condition of the power generating company. On the conclusion of the |
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review proceeding, the commission by order shall revise the amount |
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of annual funding for the nuclear generating unit as necessary and |
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in order to ensure that the nuclear decommissioning trust fund is |
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adequately funded. |
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(g) A power generation company that owns all or part of a |
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nuclear generating unit shall remit the appropriate amount of |
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annual decommissioning funding to the nuclear decommissioning |
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trust created for its proportionate ownership position in a nuclear |
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generating unit in accordance with the commission's funding order |
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issued under Subsection (e) or (f). The commission shall take any |
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and all appropriate actions to ensure proper funding of the nuclear |
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decommissioning trust, including possibly terminating the power |
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generation company's registration to operate, if the company |
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violates this subsection. |
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(h) A power generation company that owns a nuclear |
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generating unit is the funds administrator of the nuclear |
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decommissioning trust for the associated nuclear generating unit. |
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The company as funds administrator shall invest the trust funds in |
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accordance with guidelines established by commission rule and |
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consistent with the federal Nuclear Regulatory Commission |
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guidelines so that the decommissioning funds, plus the amounts |
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earned from investment of the funds, will be available at the time |
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of decommissioning. The commission shall adopt rules to define the |
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company's specific duties as funds administrator and requirements |
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regarding prudent management and investment of nuclear |
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decommissioning trust funds. |
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(i) The commission shall adopt rules |
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necessary to ensure that: |
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(1) sufficient funds are remitted to a nuclear |
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decommissioning trust on an annual basis to cover the cost of |
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decommissioning a nuclear generating unit at the end of its |
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operating license period in accordance with applicable state and |
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federal laws and regulations; |
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(2) the periodic cost studies and reviews described in |
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Subsections (e) and (f) include all current reasonably available |
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information as determined necessary and appropriate by the |
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commission; |
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(3) all funds remitted to a nuclear decommissioning |
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trust are prudently managed and spent for their intended purpose; |
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(4) the funds remitted to a nuclear decommissioning |
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trust and the amounts earned from investing the funds, will be |
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available for, and restricted to the purpose of decommissioning of |
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the associated nuclear generating unit, including if the trust or |
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nuclear generating unit is transferred to another person. |
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(j) Electric Customer Recourse. |
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(1) This Subsection does not apply to a power |
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generation company that elects not be subject to this Subsection. |
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(2) In addition to the information required under |
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Subsection (f), a power generation company that elects to be |
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subject to this Subsection shall file annually a complete |
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accounting of its operating costs and revenues and any other |
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information the commission deems necessary in order to minimize the |
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potential for electric customers to have to fund nuclear |
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decommissioning under this subsection. |
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(3) The commission shall consider the information |
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filed under subsection (j)(2) in determining the amount of funding |
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to be provided annually by the power generation company, which |
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shall be calculated to ensure that the nuclear decommissioning |
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trust fund is funded in the most expedient manner and that electric |
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customers have the least potential to have to fund nuclear |
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decommissioning under this subsection. |
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(4) The commission shall determine the manner in which |
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any shortfall in the actual cost of decommissioning a nuclear |
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generating unit shall be recovered from a power generation company |
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subject to this Subsection and electric customers. For power |
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generation companies that elect to be subject to this section, to |
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the extent that no recourse exists to the power generation company |
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subject to this subsection, or its parent or affiliates, electric |
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customers may be responsible for funding any shortfall in the cost |
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of decommissioning the nuclear generating unit if the nuclear |
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generating unit is being decommissioned and the balance of the |
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nuclear decommissioning trust is not sufficient to fund the cost of |
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decommissioning. |
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(k) If electric customers become responsible for the costs |
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of decommissioning a nuclear generating unit and incur costs under |
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Subsection (j) and the nuclear generating unit becomes operational |
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by the power generation company described by Subsection (j)(1) or |
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under new ownership, as a condition of operating the generating |
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unit, the power generation company or new owner shall repay the |
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costs the retail electric customers incurred in the manner |
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determined by the commission. The commission may authorize the |
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repayment to occur over a period established by the commission. |
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SECTION 2. This Act takes effect September 1, 2007. |