         |
|
|
|
Q: Why is PFS a "limited liability corporation (LLC)?" A: A limited liability corporation is a common form of business structure that is allowed under Utah law. In the case of PFS, responsibility for the spent fuel, and for its eventual disposal, will remain with the utilities that will send their fuel there. The spent fuel will remain the property of the utility that sends it, and through contractual agreements, the utility/owner will be responsible for fees sufficient to cover all costs associated with transportation, storage, decommissioning, and decontamination, as needed. Q: How will PFS ensure that it has sufficient funds to safely operate and later decommission the facility? A: PFS has a financing plan that assures the financial ability required under federal regulations for independent spent fuel storage facilities. The PFS application, available in the public document room at the University of Utah library, presents the types of costs to be incurred for each phase of the project and the method for financing each phase. The application states that construction will not begin without the commitment of sufficient funds to complete the facility in accordance with all NRC safety regulations. Similarly, PFS will not proceed with the operation of the facility unless it has in place long-term Service Agreements, with those utilities that need to store spent fuel there, with prices sufficient to cover the cost of operating and maintaining the facility. PFS's financial qualifications will be one of the issues that the state is litigating at the NRC public hearings. Q: How will PFS ensure that its customers will live up to their Service Agreements? A: A Service Agreement is a legally enforceable contract that will provide assurance for continued payment of sufficient fees to cover annual operating costs by requiring customers to provide annual financial information, meet credit worthiness requirements, or provide other financial assurances if necessary (i.e. advance payment, performance bond, etc.). Q: How will PFS ensure there is money to decommission the facility, especially if one or more PFS members or customers were to go out of business? A: Service Agreements will require that decommissioning costs for the spent fuel will be pre-paid. Approximately $40,000 per storage cask will be put into an escrow account prior to accepting each spent fuel canister at the facility. Customers also will be required to pay the cost of decontaminating any portion of the facility for which they may be responsible for contaminating. Facility decommissioning will be funded through a letter of credit and an external sinking fund. The decommissioning estimates, escrow accounts, etc. will be evaluated annually and adjusted to account for inflation or anticipated changes in costs. Q: Why do federal regulations not require PFS to have all construction, operating, and decommissioning funds in hand prior to receiving a license? A: It is common business practice to collect payment when a contract is signed or when services are provided. The State seems to suggest that PFS should be required to collect all fees from all prospective customers even before the facility receives a license. There is no business precedent for such a ludicrous idea. Before receiving a license, PFS must show that it has sufficient financial commitments to make the project viable. The facility will be built in phases as needed to meet the storage needs of its customers. Q: What would happen to the spent fuel stored at Skull Valley if PFS, or any of its members, were to declare bankruptcy? A: The NRC monitors the financial condition of all companies that it licenses to possess, use, or store special nuclear material. In its annual audit, the NRC must verify that licensees are able to carry out their obligations under the license. Therefore, the chance of bankruptcy to escape financial commitments under the license is extremely remote. Should the NRC audit reveal financial problems, the company will be required to take steps to address any and all concerns. Q: What would happen if a member utility were to decommission its nuclear plant and be unable to take back its spent fuel if necessary? A: Under the service agreement PFS will establish with each user utility, the utility will continue to hold title to its spent fuel until it is transferred to a permanent repository. It is difficult to imagine a scenario in which spent fuel would have to be returned to the utility. However, should that become necessary, the utility would be required, under the PFS agreement, to take its fuel. If the utility had shut down its nuclear plant but was still licensed by the NRC to store special nuclear materials, its spent fuel stored at Skull Valley could be sent back. If the utility's only nuclear reactor were fully decommissioned and therefore the utility no longer held a license from the NRC, it would need to make arrangements for temporary storage at another utility company or interim storage facility, or it could reapply for a license from the NRC to take the spent fuel back and store it. Q: What effect will utility deregulation have on the financial stability and obligations of the members of PFS? A: Deregulation of the electric utility industry no doubt will create many changes in the industry. However, under the PFS agreements, users cannot pass their agreements with PFS to another company or subsidiary without full financial review and approval by PFS. PFS would ensure that any successor company would be bound by the same service agreement as other users, ensuring that PFS would be protected in case of default. Furthermore, even in a deregulated industry, the NRC will continue to oversee the financial condition of utilities that are licensed by the NRC and will assure there is adequate financial capacity to fulfill all obligations under the license. In the development of agreements with user utilities, PFS is protecting the interests of other users, PFS owners, state and federal governments, and, ultimately, the taxpayer. At no time will the spent fuel stored at the Skull Valley facility become the property, the responsibility, or the liability of the Skull Valley Band of Goshutes, Tooele County, or the State of Utah and its citizens. Q: What types of insurance will PFS carry? A: PFS will carry off-site liability insurance to cover the cost of any off-site damages, including clean up costs, in the unlikely event that an accident at the facility caused damage off-site. In addition, PFS also will carry nuclear property insurance to cover the cost of accident clean up in the unlikely event that an accident or incident caused damage at the site. Finally, each utility company that sends spent fuel to the facility is covered by the Price-Anderson Act, which requires the utility to carry liability insurance that would cover any accidents involving its spent fuel during transportation from the reactor to the storage facility. Also under Price-Anderson, if damages due to a transportation accident were to exceed the utility's insurance coverage, a fund set up by the nuclear utility industry would be tapped. The value of that industry fund is currently estimated at $9 billion. PFS will also carry workers compensation and other normal types of business insurance. Q: Why is the PFS business plan considered proprietary? Doesn't this limit public participation and oversight? A: Like most other businesses, PFS has current and future competitors who could benefit from the details of the PFS business plan. Furthermore, PFS vendors also supply goods and services to other customers; release of their confidential bids and estimates on PFS work could place them at a competitive disadvantage with other customers. All confidential and proprietary information has been shared with representatives of the State under a confidentiality agreement. The State has been fully able to examine this information in detail and challenge it before the Licensing Board.
[ About The Project ] [ Who Will Benefit ] [ Voices For PFS ] [ What's New ] [ Helpful Resources ] [ Contact Us ] [ Site Index ] [ Home ] © 2000-2004 Private Fuel Storage, LLC / All rights reserved
|
 |
