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| Public Act 101-0044 | ||||
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Public Utilities Act is amended by changing | ||||
Section 8-508.1 as follows:
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(220 ILCS 5/8-508.1) (from Ch. 111 2/3, par. 8-508.1)
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Sec. 8-508.1. (a) As used in this Section:
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(1) "Decommissioning" means the series of activities | ||||
undertaken at the
time a nuclear power plant is permanently | ||||
retired from service to ensure
that the final entombment, | ||||
decontamination, dismantlement, removal and
disposal of | ||||
the plant, including the plant site, and of any radioactive
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components and materials associated with the plant, is | ||||
accomplished in
compliance with all applicable Illinois | ||||
and federal laws, and to ensure
that such final disposition | ||||
does not pose any threat to the public health
and safety.
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(2) "Decommissioning costs" means all reasonable costs | ||||
and expenses
incurred in connection with the entombment, | ||||
decontamination, dismantlement,
removal and disposal of | ||||
the structures, systems and components of a nuclear
power | ||||
plant at the time of decommissioning, including all | ||||
expenses to be
incurred in connection with the preparation | ||||
for decommissioning, such as
engineering and other | ||||
planning expenses, and to be incurred after the
actual | ||
decommissioning occurs, such as physical security and | ||
radiation
monitoring expenses, less proceeds of insurance, | ||
salvage or resale of
machinery, construction equipment or | ||
apparatus the cost of which was
charged as a | ||
decommissioning expense.
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(3) "Decommissioning trust" or "trust" means a | ||
fiduciary account in a
bank or other financial institution | ||
established to hold the decommissioning
funds provided | ||
pursuant to subsection (b)(2) of this Section for the
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eventual purpose of paying decommissioning costs, which | ||
shall be separate
from all other accounts and assets of the | ||
public utility establishing the trust.
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(4) "Nuclear power plant" or "plant" means a nuclear | ||
fission thermal
power plant. Each unit of a multi-unit site | ||
shall be considered a separate plant.
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(b) By 90 days after the effective date of this amendatory | ||
Act of 1988,
or by the date that the unit satisfies the | ||
criteria used by the Internal
Revenue Service for determining | ||
when depreciation commences for federal
income tax purposes on | ||
a new generating unit, whichever is later, every
public utility | ||
that owns or operates, in whole or in part, a nuclear
power | ||
plant shall:
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(1) establish 2 decommissioning trusts, which shall be | ||
a "tax qualified"
decommissioning trust and a "non-tax | ||
qualified" decommissioning trust and
shall hold the | ||
decommissioning funds established by the public utility | ||
for
all nuclear power plants pursuant to subsection (b)(2) | ||
of this Section;
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(2) establish 2 decommissioning funds for each such | ||
plant, each of which
shall be held for a plant as a | ||
separate account in a decommissioning trust; and
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(3) designate an independent trustee, subject to the | ||
approval of the
Commission, to administer each of the | ||
decommissioning trusts.
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(c) The 2 decommissioning trusts shall be known as the "tax | ||
qualified"
decommissioning trust and the "non-tax qualified" | ||
decommissioning trust
respectively. Each trust shall be | ||
established and maintained as follows:
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(1) The "tax qualified" trust shall be established and | ||
maintained in
accordance with Section 468A of the Internal | ||
Revenue Code of 1986 or any
successor thereto and shall be | ||
funded by the public utility for each such
power plant | ||
through annual payments by the public utility that shall | ||
not
exceed the maximum amount allowable as a deduction for | ||
federal income tax
purposes for the year for which the | ||
payments were made, in accordance with
Section 468A of the | ||
Internal Revenue Code of 1986 or any successor thereto.
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(2) The "non-tax qualified" decommissioning trust | ||
shall be funded by
the public utility for each such power | ||
plant through annual payments by the
public utility that | ||
shall consist of the difference between the total
amounts | ||
of decommissioning expenses collected after the effective | ||
date of
this amendatory Act of 1988 through rates and | ||
charges from the public
utility's customers as provided by | ||
the Commission minus the amounts
contributed to the "tax | ||
qualified" trust as provided by subsection (c)(1)
of this | ||
Section and deductible for federal income tax purposes in
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accordance with Section 468A of the Internal Revenue Code | ||
of 1986 or any
successor thereto.
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(3) The following restrictions shall apply in regard to | ||
administration
of each decommissioning trust:
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(i) Distributions may be made from a nuclear | ||
decommissioning trust only
to satisfy the liabilities | ||
of the public utility for nuclear
decommissioning | ||
costs relating to the nuclear power plant for which the
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decommissioning fund was established and to pay | ||
administrative costs,
income taxes and other | ||
incidental expenses of the trust.
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(ii) Any assets in a nuclear decommissioning trust | ||
that exceed the
amount necessary to pay the nuclear | ||
decommissioning costs of the nuclear
power plant for | ||
which the decommissioning fund was established shall | ||
be
refunded to the public utility that established the | ||
fund for the purpose of
refunds or credits, as soon as | ||
practicable, to the utility's customers.
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(iii) In the event a public utility sells or | ||
otherwise disposes of its
direct ownership interest, | ||
or any part thereof, in a nuclear power plant
with | ||
respect to which a nuclear decommissioning fund has | ||
been established,
the assets of the fund shall be | ||
distributed to the public utility to the
extent of the | ||
reductions in its liability for future decommissioning | ||
after
taking into account the liabilities of the public | ||
utility for future
decommissioning of such nuclear | ||
power plant and the liabilities that have
been assumed | ||
by another entity. The public utility shall, as soon as
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practicable, provide refunds or credits to its | ||
customers representing the
full amount of the | ||
reductions in its liability for future | ||
decommissioning.
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(iv) The trustee shall invest the "tax qualified" | ||
trust assets only in
secure assets that are prudent | ||
investments for assets held in trust and in
such a way | ||
as to attempt to maximize the after-tax return on funds
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invested, subject to the limitations specified in | ||
Section 468A of the
Internal Revenue Code of 1986 or | ||
any successor thereto.
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(v) The trustee shall invest the "non-tax | ||
qualified" trust assets only
in secure assets that are | ||
prudent investments for assets held in trust and
in | ||
such a way as to attempt to maximize the after-tax | ||
return on funds
invested. However the trustee shall not | ||
invest any portion of the "non-tax
qualified" trust's | ||
funds in the securities or assets of any operator of a
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nuclear power plant.
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(vi) The "non-tax qualified" trust shall be | ||
subject to the prohibitions
against self-dealing | ||
applicable to the "tax qualified" trust as specified
in | ||
Section 468A of the Internal Revenue Code of 1986, or | ||
any successor thereto.
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(vii) All income earned by the trust's funds shall | ||
become a part of the
trust's funds and subject to the | ||
provisions of this Section.
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(viii) The Commission may adopt by rule or | ||
regulation such further
restrictions as it deems | ||
necessary for the sound management of the trust's
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funds, consistent with the purposes of this Section.
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(d) By 90 days after the effective date of this amendatory | ||
Act of 1988,
the Commission shall determine an appropriate | ||
method to segregate, either
internally or externally, all | ||
decommissioning funds collected prior to the
effective date of | ||
this amendatory Act of 1988 by the utility from its
customers, | ||
and shall order any change in past decommissioning funding
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methods that the Commission finds necessary. In making its | ||
determination
of the appropriate funding method, the | ||
Commission shall give consideration
to, but not be limited by, | ||
all applicable federal regulations. The change
in funding | ||
method shall be phased-in over an appropriate period of time.
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(e) The trustee of a trust shall report annually to the | ||
Commission, or
more frequently if ordered by the Commission. | ||
The report shall include:
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(1) the trust's State and federal tax returns;
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(2) a report on the trust's portfolio of investments | ||
and the return thereon;
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(3) the date and amount of payments received by the | ||
trust from the public utility;
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(4) a copy of all correspondence between the trust and | ||
the Internal Revenue Service; and
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(5) any other information the Commission orders the | ||
trust to provide.
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(f) A nuclear decommissioning trust established pursuant | ||
to this Section
shall be exempt from taxation in Illinois.
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(g) Beginning on or before May 1, 2020, and every 2 years | ||
thereafter, the owner or operator of each nuclear power plant | ||
in this State shall provide the Commission with a copy of the | ||
nuclear decommissioning funding assurance status report | ||
submitted to the Nuclear Regulatory Commission and, as | ||
applicable, to the Federal Energy Regulatory Commission. | ||
Beginning June 1, 2020, and every 2 years thereafter, the | ||
Commission shall provide the General Assembly with a copy of | ||
the nuclear decommissioning funding assurance status report | ||
for shutdown units as submitted by the owner or operator of a | ||
nuclear power plant in this State to the Nuclear Regulatory | ||
Commission and, as applicable, to the Federal Energy Regulatory | ||
Commission. | ||
(Source: P.A. 85-1400.)
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