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Unit 2 decommission cost is $1.26 billion; it’s been 39 years since TMI accident, but process hasn’t officially started

By Dan Miller

danmiller@pressandjournal.com

717-944-4628
Posted 3/27/18

It was 39 years ago Wednesday, March 28, that the historic accident at Three Mile Island occurred as Unit 2’s reactor partially melted down.

Despite the fact that the Unit 2 reactor coolant …

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Unit 2 decommission cost is $1.26 billion; it’s been 39 years since TMI accident, but process hasn’t officially started

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It was 39 years ago Wednesday, March 28, that the historic accident at Three Mile Island occurred as Unit 2’s reactor partially melted down.

Despite the fact that the Unit 2 reactor coolant system is drained and its radioactive waste was shipped away long ago, the process of decommissioning Unit 2 has not yet begun.

But when it does, it will come with an eye-popping price tag: a total of $1.266 billion from 2018 to 2053, according to an analysis released March 26 by the Nuclear Regulatory Commission.

That money is already set aside in what is known as a decommissioning trust fund, so ratepayers — and taxpayers — won’t have to pay it.

If the decommissioning ends up costing more than what Unit 2 owner GPU Nuclear has projected, then GPU Nuclear is responsible for covering that gap — not the U.S. government and not ratepayers, NRC spokesman Neil Sheehan told the Press & Journal on Tuesday, March 27.

“We (the NRC) would hold the company to that,” he noted, adding that the NRC “would work with the Department of Justice if the owner is unable to live up to its obligations” of paying for the decommissioning, which includes tearing down all the remaining structures and maintaining spent fuel on site.

Since May 30, 2017, when TMI owner Exelon announced plans to close the plant by September 2019, the focus has been on the economic impact of shutting down the still-functioning Unit 1 reactor. However, Unit 2 cannot be decommissioned as long as Unit 1 continues to function.

GPU Nuclear has up to 60 years to complete Unit 2 decommissioning, Sheehan said.

The analysis released by the NRC is an update provided by GPU Nuclear regarding the status of Unit 2’s decommissioning trust fund. GPU Nuclear is a subsidiary of FirstEnergy. While Exelon owns the functioning part of the nuclear facility, GPU Nuclear still owns Unit 2 and contracts its monitoring to Exelon.

Unit 1 will shut down in September 2019, Exelon has said, barring some kind of action by the state of Pennsylvania to address its nuclear energy policy. TMI has not made a profit in five years, Exelon said during the plant-closing announcement in May 2017.

About a dozen nuclear reactors have been fully decommissioned across the United States, but there is no precedent in this country for TMI, where the decommissioning of one reactor dormant for 39 years now has been held up until the other reactor can be shut down, Sheehan said.

Time frame

All nuclear reactors are required to have a decommissioning trust fund.

Exelon is required to submit an update of the fund for Unit 1 by the end of March, Sheehan said, and the NRC is expected to release it soon after that.

Under the fund update timetable presented by GPU, the physical process of decommissioning doesn’t really begin until 2040, when annual withdrawals from the trust fund increase from about $3.4 million a year to $59 million.

During the years 2018 through 2039, GPU is continuing to wait until radioactive decay levels “decrease sufficiently” at Unit 2 “to allow for a more effective clean up of the facility,” Sheehan said.

After the March 1979 accident, a cleanup was undertaken of Unit 2, with damaged high-level fuel from the reactor sent to a facility in Idaho where the fuel remains stored in dry casks today.

What remains to be done through the process of decommissioning is the physical dismantling of the Unit 2 reactor and cooling tower, any remaining cleanup, and the sending of low-level radioactive waste to facilities in Utah and in Texas, Sheehan said.

Since the accident, GPU has been only monitoring and maintaining security at Unit 2. That will remain the case until 2040 when the physical process of decommissioning and tearing down the stricken reactor can begin, according to the GPU trust fund update.

Paying in

Rate payers — electric customers of the companies — contributed to the fund over many decades, but that would have stopped in 1997, when the market for electricity in Pennsylvania was deregulated, Sheehan said.

The trust fund update notes, “there are no longer any funds being collected from the ratepayers” although the update does not provide a date for when collections from ratepayers would have stopped.

In general, owners of nuclear reactors such as Unit 1 and Unit 2 are no longer contributing new money to these decommissioning trust funds, Sheehan said.

However, owners such as GPU are required by the NRC to invest money from the trust fund in what Sheehan described as “conservative investment tools” such as bonds that show annual growth of about 2 percent a year.

Because of this conservative strategy, these trust funds “would not have been hit the way other funds may have been” during the Great Recession of 2008. Instead, these funds continued to show growth, although the growth would not be as great compared to other funds allowed to be invested in a more aggressive manner.

By the numbers

The update projects annual withdrawals from the Unit 2 decommissioning fund of $97 million in 2041 and increasing to a peak of roughly $124 million from 2042 through 2045, when the bulk of the decommissioning is to take place.

The annual withdrawals decline to $81.6 million from 2047 through 2050, then to $79 million in 2051 and $22.5 million in 2052 before returning to $3.2 million in 2053.

At that point, dry casks holding the remaining spent fuel will either be shipped from TMI to a federal repository — if one exists — or the dry casks will stay at TMI and the owners of Unit 2 would have to continue providing security for it.

NRC’s focus for the decommissioning is on the radiological cleanup — making sure that any fuel that remains is within “allowable levels,” Sheehan said.

Beyond that, any consideration of the land Unit 2 now sits on reverting to green space would be a state responsibility, he noted.

The trust fund has a balance of $834,857,154 as of 2018, according to the update provided by GPU. Money in the fund comes from Metropolitan Edison, Pennsylvania Electric Company, and Jersey Central Power & Light Company, according to the update. They are all owned by FirstEnergy.

A portion of the Unit 2 decommissioning trust fund could also have been funded by a settlement that occurred at the time of the accident, although Sheehan could not say for certain.

If so, that is another aspect that makes the decommissioning of Unit 2 “unique” compared to any other nuclear reactor in the United States, he added.

The trust fund update projects investment earnings of roughly $16.7 million a year, an amount projected to peak to $23.4 million a year in 2039 before the amount begins to decline.