US LLC Rules Allow Nuclear Power Companies To Take Profits, Dump Risk On Taxpayers [09N... - 0 views
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US nuclear power plants mostly exist in a legal “get out of jail free” land of LLC (Legal Liability Corporation) ownership. While big energy conglomerates like Entergy own the bulk of the commercial nuclear power plants in the US, these plants are owned by individual LLC companies that have one asset, the power plant. Through a network of LLC companies and holding companies these energy giants are able to suck all the profits out of these nuclear power plants but shoulder none of the risk if something goes bad.
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The US has a nuclear accident liability law, Price-Anderson. This law sets up a limited fund that all licensed nuclear plant owners would pay into in the event of an accident. They only pay premiums into this fund after an accident happens. Under this law each plant is required to have $300 million in liability insurance that would pay before Price-Anderson would kick in. Proving any other sort of cash reserves, ability to pay for an extended outage or an accident (including Price-Anderson premiums) has been largely voluntary by the power companies. Even when proof of financial assets is asked for by the NRC it is calculated based on projected income estimates done by the power company. The NRC admits they are out of their expertise when it comes to finance and also does no investigation to assure these estimates have any basis in fact. The NRC has also complained repeatedly that deregulation of the energy industry is causing a lack of safety and maintenance to become a large problem as companies try to extract as much profit as possible up and out of these LLC companies to the parent company, leaving insufficient money to safely operate these nuclear plants. Many of these plants in LLC situations are among the aging reactor fleet from the 1960′s & 1970′s. As these plants ask for operating license extensions from the NRC, financial soundness is not part of the review.
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If a nuclear power plant has a major accident, is found to have an expensive damage situation or is facing decommissioning the LLC that owns it can file for bankruptcy and walk away. The parent company has no financial risk or liability. The NRC has expressed doubt about being able to “pierce the corporate veil” in court and has diverted into settlements every time it has run into this issue with an aging plant facing a financial crisis. The NRC also has no special standing in a bankruptcy case where they can compel Price-Anderson premium payments or for the nuclear power company to pay funds towards decommissioning. It is not totally clear where the decommissioning trust fund lies as these funds are “sold” along with the plant when a new company takes over a nuclear power plant.
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