Decommissioning the U.S. nuclear fleet: Financial assurance, corporate structures, and bankruptcy

Abstract

Over the next three decades, it is likely that on the order of 100 U.S. nuclear power reactors—almost the entire U.S. nuclear fleet, which at its peak in 1990 operated 112 commercial reactors—will be shut down and decommissioned. Decommissioning is a costly, time-consuming process that involves removing or decontaminating all radioactive infrastructure and related materials on site to prevent risks to public health so that the land can be safely used for other beneficial purposes. Though federal regulations have required that plant licensees prepare financially for this eventuality, we argue that particularly in light of commonly used corporate structures designed to strictly segregate financial risks, and under the current energy market conditions, the financial regulations in place may be insufficient in some exigent situations to ensure successful decommissioning. We explore available options for legal recourse if funding is inadequate in a corporate law context and pursuant to existing federal law. We comment on the possibility that taxpayers might be required to shoulder all or part of the financial liability at “legacy” plants in the absence of structural changes.