Constellation short on decommissioning funds

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The recession is taking its toll on some owners of nuclear power plants, including Constellation Energy Group of Baltimore.
The U.S. Nuclear Regulatory Commission says the owners of 26 reactors nationwide - including four of the five owned by Constellation - don't have enough money set aside to permanently close, or decommission, those reactors. The cleanup costs can reach into the hundreds of millions of dollars.
The recession and market declines caused the apparent funding shortfalls, said Maureen Brown, a Constellation spokeswoman. However, the company is confident that as the economy improves, the funds will be boosted to adequate levels, she said.
"A similar situation happened after [the terrorist attacks on] Sept. 11, 2001," Brown said. "After Sept. 11, the funds returned to appropriate levels as markets rebounded."
Constellation has already met with NRC officials to discuss the situation and plans to issue a formal response by July 31, she said.
Owners of nuclear plants are required to maintain adequate decommissioning funds to pay cleanup costs when the reactors are permanently shut down.
A potential decommissioning funding shortfall "does not affect safe operations" of nuclear reactors, Douglas Pickett, a senior project manager in the NRC's Office of Nuclear Reactor Regulation, said in a recent letter to James Spina, vice president of Constellation's Calvert Cliffs Nuclear Power Plant near Lusby.
However, "adequate decommissioning funding assurance is important to ensure a plant will eventually be decommissioned safely," Pickett said.
Constellation owns two reactors at Calvert Cliffs Nuclear Power Plant, along with three reactors in New York. The Calvert Cliffs Unit 2 plant was Constellation's only reactor not on the NRC fund list. That unit's decommissioning fund had about $43 million more in it than the Unit 1 fund, as of Dec. 31, according to documents filed with the NRC.
Still, Calvert Unit 2's level was well below the $376.7 million that Constellation estimated it will cost to decommission that reactor, as of Dec. 31, according to the documents.
The second reactor has common facilities that both units use, thus contributions to that reactor's fund have been made at a higher level, Brown said. Markets have improved since December, so there could be a change in the funds since then, Brown said. Constellation does not manage investments for the funds, as that is handled by an independent manager, she noted.