Appendix D to Part 30 - Criteria Relating to Use of Financial Tests and Self-Guarantee for Providing Reasonable Assurance of Funds for Decommissioning by Commercial Companies That Have No Outstanding Rated Bonds
10:1.0.1.1.20.2.91.1.18 : Appendix D
Appendix D to Part 30 - Criteria Relating to Use of Financial Tests
and Self-Guarantee for Providing Reasonable Assurance of Funds for
Decommissioning by Commercial Companies That Have No Outstanding
Rated Bonds I. Introduction
An applicant or licensee may provide reasonable assurance of the
availability of funds for decommissioning based on furnishing its
own guarantee that funds will be available for decommissioning
costs and on a demonstration that the company passes the financial
test of Section II of this appendix. The terms of the
self-guarantee are in Section III of this appendix. This appendix
establishes criteria for passing the financial test for the
self-guarantee and establishes the terms for a self-guarantee.
II. Financial Test
A. To pass the financial test a company must meet all of the
criteria set forth in this section. For purposes of applying the
Appendix D criteria, tangible net worth must be calculated to
exclude all intangible assets and the net book value of the nuclear
facility and site, and total net worth, which may include
intangible assets, must be calculated to exclude the net book value
and goodwill of the nuclear facility and site. These criteria
include:
(1) Tangible net worth of at least $21 million, and total net
worth of at least 10 times the amount of decommissioning funds
being assured by a self-guarantee for all decommissioning
activities for which the company is responsible as
self-guaranteeing licensee and as parent-guarantor for the total of
all nuclear facilities or parts thereof (or the current amount
required if certification is used).
(2) Assets located in the United States amounting to at least 90
percent of total assets or at least 10 times the total current
decommissioning cost estimate (or the current amount required if
certification is used) for all decommissioning activities for which
the company is responsible as self-guaranteeing licensee and as
parent-guarantor.
(3) A ratio of cash flow divided by total liabilities greater
than 0.15 and a ratio of total liabilities divided by total net
worth less than 1.5.
B. In addition, to pass the financial test, a company must meet
all of the following requirements:
(1) The company's independent certified public accountant must
compare the data used by the company in the financial test, which
is derived from the independently audited, year-end financial
statements for the latest fiscal year, with the amounts in such
financial statement. The accountant must evaluate the company's
off-balance sheet transactions and provide an opinion on whether
those transactions could materially adversely affect the company's
ability to pay for decommissioning costs. In connection with the
auditing procedure, the licensee must inform the NRC within 90 days
of any matters coming to the auditor's attention which cause the
auditor to believe that the data specified in the financial test
should be adjusted and that the company no longer passes the
test.
(2) After the initial financial test, the company must annually
pass the test and provide documentation of its continued
eligibility to use the self-guarantee to the Commission within 90
days after the close of each succeeding fiscal year.
(3) If the licensee no longer meets the requirements of
paragraph II.A of this appendix, the licensee must send notice to
the NRC of intent to establish alternative financial assurance as
specified in NRC regulations. The notice must be sent by certified
mail, return receipt requested, within 90 days after the end of the
fiscal year for which the year end financial data show that the
licensee no longer meets the financial test requirements. The
licensee must provide alternative financial assurance within 120
days after the end of such fiscal year.
III. Company Self-Guarantee
The terms of a self-guarantee which an applicant or licensee
furnishes must provide that:
A. The guarantee shall remain in force unless the licensee sends
notice of cancellation by certified mail, return receipt requested,
to the NRC. Cancellation may not occur until an alternative
financial assurance mechanism is in place.
B. The licensee shall provide alternative financial assurance as
specified in the regulations within 90 days following receipt by
the NRC of a notice of cancellation of the guarantee.
C. The guarantee and financial test provisions must remain in
effect until the Commission has terminated the license or until
another financial assurance method acceptable to the Commission has
been put in effect by the licensee.
D. The applicant or licensee must provide to the Commission a
written guarantee (a written commitment by a corporate officer)
which states that the licensee will fund and carry out the required
decommissioning activities or, upon issuance of an order by the
Commission, the licensee will fund the standby trust in the amount
of the current cost estimates for decommissioning.
E. A standby trust to protect public health and safety and the
environment must be established for decommissioning costs before
the self-guarantee agreement is submitted. The trustee and trust
must be acceptable to the Commission. An acceptable trustee
includes an appropriate State or Federal Government agency or an
entity which has the authority to act as a trustee and whose trust
operations are regulated and examined by a Federal or State agency.
The Commission will have the right to change the trustee. An
acceptable trust will meet the regulatory criteria established in
the part of these regulations that governs the issuance of the
license for which the guarantor has accepted the obligation to pay
for decommissioning costs.
F. The guarantor must agree that if the guarantor admits in
writing its inability to pay its debts generally, or makes a
general assignment for the benefit of creditors, or any proceeding
is instituted by or against the guarantor seeking to adjudicate it
as bankrupt or insolvent, or seeking dissolution, liquidation,
winding-up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to
bankruptcy, insolvency, or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian, or other similar official for the
guarantor or for any substantial part of its property, or the
guarantor takes any action to authorize or effect any of the
actions stated in this paragraph, then the Commission may:
(1) Declare that the financial assurance guaranteed by the
self-guarantee agreement is immediately due and payable to the
standby trust set up to protect the public health and safety and
the environment, without diligence, presentment, demand, protest or
any other notice of any kind, all of which are expressly waived by
guarantor; and
(2) Exercise any and all of its other rights under applicable
law.
G. The guarantor must notify the NRC, in writing, immediately
following the occurrence of any event listed in paragraph F of this
appendix, and must include a description of the event, including
major creditors, the amounts involved, and the actions taken to
assure that the amount of funds guaranteed by the self-guarantee
agreement for decommissioning will be transferred to the standby
trust as soon as possible.
[63 FR 29542, June 1, 1998, as amended at 76 FR 35567, June 17,
2011]