(220 ILCS 5/8-508.1)
(from Ch. 111 2/3, par. 8-508.1)
(a) As used in this Section:
(1) "Decommissioning" means the series of activities undertaken at the
time a nuclear power plant is permanently retired from service to ensure
that the final entombment, decontamination, dismantlement, removal and
disposal of the plant, including the plant site, and of any radioactive
components and materials associated with the plant, is accomplished in
compliance with all applicable Illinois and federal laws, and to ensure
that such final disposition does not pose any threat to the public health
(2) "Decommissioning costs" means all reasonable costs and expenses
incurred in connection with the entombment, decontamination, dismantlement,
removal and disposal of the structures, systems and components of a nuclear
power plant at the time of decommissioning, including all expenses to be
incurred in connection with the preparation for decommissioning, such as
engineering and other planning expenses, and to be incurred after the
actual decommissioning occurs, such as physical security and radiation
monitoring expenses, less proceeds of insurance, salvage or resale of
machinery, construction equipment or apparatus the cost of which was
charged as a decommissioning expense.
(3) "Decommissioning trust" or "trust" means a fiduciary account in a
bank or other financial institution established to hold the decommissioning
funds provided pursuant to subsection (b)(2) of this Section for the
eventual purpose of paying decommissioning costs, which shall be separate
from all other accounts and assets of the public utility establishing the trust.
(4) "Nuclear power plant" or "plant" means a nuclear fission thermal
power plant. Each unit of a multi-unit site shall be considered a separate plant.
(b) By 90 days after the effective date of this amendatory Act of 1988,
or by the date that the unit satisfies the criteria used by the Internal
Revenue Service for determining when depreciation commences for federal
income tax purposes on a new generating unit, whichever is later, every
public utility that owns or operates, in whole or in part, a nuclear
power plant shall:
(1) establish 2 decommissioning trusts, which shall be a "tax qualified"
decommissioning trust and a "non-tax qualified" decommissioning trust and
shall hold the decommissioning funds established by the public utility for
all nuclear power plants pursuant to subsection (b)(2) of this Section;
(2) establish 2 decommissioning funds for each such plant, each of which
shall be held for a plant as a separate account in a decommissioning trust; and
(3) designate an independent trustee, subject to the approval of the
Commission, to administer each of the decommissioning trusts.
(c) The 2 decommissioning trusts shall be known as the "tax qualified"
decommissioning trust and the "non-tax qualified" decommissioning trust
respectively. Each trust shall be established and maintained as follows:
(1) The "tax qualified" trust shall be established and maintained in
accordance with Section 468A of the Internal Revenue Code of 1986 or any
successor thereto and shall be funded by the public utility for each such
power plant through annual payments by the public utility that shall not
exceed the maximum amount allowable as a deduction for federal income tax
purposes for the year for which the payments were made, in accordance with
Section 468A of the Internal Revenue Code of 1986 or any successor thereto.
(2) The "non-tax qualified" decommissioning trust shall be funded by
the public utility for each such power plant through annual payments by the
public utility that shall consist of the difference between the total
amounts of decommissioning expenses collected after the effective date of
this amendatory Act of 1988 through rates and charges from the public
utility's customers as provided by the Commission minus the amounts
contributed to the "tax qualified" trust as provided by subsection (c)(1)
of this Section and deductible for federal income tax purposes in
accordance with Section 468A of the Internal Revenue Code of 1986 or any
(3) The following restrictions shall apply in regard to administration
of each decommissioning trust:
(i) Distributions may be made from a nuclear decommissioning trust only
to satisfy the liabilities of the public utility for nuclear
decommissioning costs relating to the nuclear power plant for which the
decommissioning fund was established and to pay administrative costs,
income taxes and other incidental expenses of the trust.
(ii) Any assets in a nuclear decommissioning trust that exceed the
amount necessary to pay the nuclear decommissioning costs of the nuclear
power plant for which the decommissioning fund was established shall be
refunded to the public utility that established the fund for the purpose of
refunds or credits, as soon as practicable, to the utility's customers.
(iii) In the event a public utility sells or otherwise disposes of its
direct ownership interest, or any part thereof, in a nuclear power plant
with respect to which a nuclear decommissioning fund has been established,
the assets of the fund shall be distributed to the public utility to the
extent of the reductions in its liability for future decommissioning after
taking into account the liabilities of the public utility for future
decommissioning of such nuclear power plant and the liabilities that have
been assumed by another entity. The public utility shall, as soon as
practicable, provide refunds or credits to its customers representing the
full amount of the reductions in its liability for future decommissioning.
(iv) The trustee shall invest the "tax qualified" trust assets only in
secure assets that are prudent investments for assets held in trust and in
such a way as to attempt to maximize the after-tax return on funds
invested, subject to the limitations specified in Section 468A of the
Internal Revenue Code of 1986 or any successor thereto.
(v) The trustee shall invest the "non-tax qualified" trust assets only
in secure assets that are prudent investments for assets held in trust and
in such a way as to attempt to maximize the after-tax return on funds
invested. However the trustee shall not invest any portion of the "non-tax
qualified" trust's funds in the securities or assets of any operator of a
nuclear power plant.
(vi) The "non-tax qualified" trust shall be subject to the prohibitions
against self-dealing applicable to the "tax qualified" trust as specified
in Section 468A of the Internal Revenue Code of 1986, or any successor thereto.
(vii) All income earned by the trust's funds shall become a part of the
trust's funds and subject to the provisions of this Section.
(viii) The Commission may adopt by rule or regulation such further
restrictions as it deems necessary for the sound management of the trust's
funds, consistent with the purposes of this Section.
(d) By 90 days after the effective date of this amendatory Act of 1988,
the Commission shall determine an appropriate method to segregate, either
internally or externally, all decommissioning funds collected prior to the
effective date of this amendatory Act of 1988 by the utility from its
customers, and shall order any change in past decommissioning funding
methods that the Commission finds necessary. In making its determination
of the appropriate funding method, the Commission shall give consideration
to, but not be limited by, all applicable federal regulations. The change
in funding method shall be phased-in over an appropriate period of time.
(e) The trustee of a trust shall report annually to the Commission, or
more frequently if ordered by the Commission. The report shall include:
(1) the trust's State and federal tax returns;
(2) a report on the trust's portfolio of investments and the return thereon;
(3) the date and amount of payments received by the trust from the public utility;
(4) a copy of all correspondence between the trust and the Internal Revenue Service; and
(5) any other information the Commission orders the trust to provide.
(f) A nuclear decommissioning trust established pursuant to this Section
shall be exempt from taxation in Illinois.
(Source: P.A. 85-1400.)