The Clinton Administration has published a proposed bill on the restructuring of the United States’ electric utility industry. It is a revised version of a bill which was rejected by the last Congress. The White House has avoided controversial issues such as the stranded costs associated with nuclear assets, arguing that this issue should be sorted out at the level of the state and the utility rather than through the federal government. Instead the bill is designed to allow consumers the freedom to choose their power supply.
The Nuclear Energy Institute (NEI) gave the bill a qualified welcome. Marvin Fertel, senior vice president of NEI, described it as “a good first step” but added that “there is ample opportunity to improve this legislation”.
“The bill must include essential provisions that ensure that nuclear power plants are not placed at competitive disadvantage during a transition to competition and to provide plant owners with the best possible flexibility to reposition their assets,” he continued.
Fertel pointed out that the new legislation will result in changes to the Atomic Energy Act, removing the requirement of the Nuclear Regulatory Commission to conduct antitrust reviews in licence transfer proceedings. Other changes were also necessary to allow nuclear power to compete on an equal footing with other sources of generation.
“These include removing the prohibition on foreign ownership of commercial nuclear power plants, clarifying NRC authority to determine what type of review is required for licence transfer proceedings, and creating a mechanism to ensure NRC authority over former licencees with plant decommissioning obligations,” said Fertel.
Furthermore, the tax codes must be amended to ensure that the transfer of plant ownership does not lead to an increase in decommissioning costs.
“The ownership transfer of Three Mile Island Unit 1 from GPU Nuclear to AmerGen and of the Pilgrim Nuclear Power Plant form Boston Edison to Entergy Corp, underscores the importance of allowing tax-free transfers of decommissioning trusts,” he added.