ComEd 2015 Annual Report Download - page 109

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3. SAFSTOR—a method of decommissioning in which the nuclear facility is placed and maintained in such condition that the nuclear
facility can be safely stored and subsequently decontaminated to levels that permit release for unrestricted use generally within 60
years after cessation of operations.
The actual decommissioning approach selected once a nuclear facility is shutdown will be determined by Generation at the time of shutdown
and may be influenced by multiple factors including the funding status of the nuclear decommissioning trust fund at the time of shutdown.
The assumed plant shutdown timing scenarios have historically included the following two alternatives: (1) the probability of operating
through the original 40-year nuclear license term, and (2) the probability of operating through an extended 60-year nuclear license term (regardless
of whether such 20-year license extension had been received for each unit). During 2015, due to changing market conditions and regulatory
environments, Generation began to consider and incorporate assumptions regarding plant shutdown timing scenarios for certain plants other than
just the two scenarios historically considered. In addition to potential early shutdown scenarios, Generation also began in 2015 to incorporate into
its ARO estimates some probability of a second, 20-year license renewal for some nuclear units. The successful operation of nuclear plants in the
U.S. beyond the initial 40-year license terms has prompted the NRC to consider regulatory and technical requirements for potential plant operations
for an 80-year nuclear operating term. As power market and regulatory environment developments occur, Generation evaluates and incorporates,
as necessary, the impacts of such developments into its nuclear ARO assumptions and estimates.
Generation’s probabilistic cash flow models also include an assessment of the timing of DOE acceptance of SNF for disposal. Generation
currently assumes DOE will begin accepting SNF in 2025. The SNF acceptance date assumption was based on management’s estimates of the
amount of time required for DOE to select a site location and develop the necessary infrastructure for long-term SNF storage. For more information
regarding the estimated date that DOE will begin accepting SNF, see Note 23—Commitments and Contingencies of the Combined Notes to
Consolidated Financial Statements.
License Renewals. Generation has received, has applied for, or plans to seek, 20-year license renewals for all of its nuclear units.
Generation has successfully secured 20-year operating license renewal extensions (i.e., extending the total license term to 60 years) for twenty-
one of its nuclear units (including the two Salem units co-owned by Generation, but operated by PSEG and Braidwood Units 1 and 2 for which the
NRC approved the renewed license on January 27, 2016). None of Generation’s previous applications for an operating license extension has been
denied. The 20-year license renewal for Oyster Creek nuclear unit was obtained in 2009, however, operations will cease by the end of 2019. For its
remaining three operating units, Generation is in various stages of the process of pursuing similar extensions and has filed license renewal
applications for two operating nuclear units and has until 2021 to seek license renewal for one remaining operating nuclear unit. Generation’s
assumptions regarding successful license extension for the remaining three operating units for ARO determination purposes is based in part on the
good current physical condition and high performance of these nuclear units, the favorable status of the ongoing license renewal proceedings with
the NRC, and the successful renewals for twenty-one units to date.
Generation estimates that the failure to obtain initial license renewals to extend the operating life from 40 years to 60 years at any of its
remaining nuclear units (assuming all other assumptions remain constant) would increase its ARO on average approximately $300 million per unit
as of December 31, 2015. The size of the increase to the ARO for a particular nuclear unit is dependent upon the current stage in its original
license term and its specific decommissioning cost estimates. If Generation does not receive license renewal on a particular unit, the increase to
the ARO may be mitigated by Generation’s ability to delay ultimate decommissioning activities under a SAFSTOR method of decommissioning.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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