Bill Text: IL SB1851 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Public Utilities Act. Makes a technical change in the definition of "decommissioning".

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2021-01-13 - Session Sine Die [SB1851 Detail]

Download: Illinois-2019-SB1851-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 SB1851 Introduced 2/15/2019, by Sen. Sue Rezin SYNOPSIS AS INTRODUCED:
220 ILCS 5/8-508.1 from Ch. 111 2/3, par. 8-508.1
Amends the Public Utilities Act. Makes a technical change in the definition of "decommissioning".
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A BILL FOR
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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Public Utilities Act is amended by changing
Section 8-508.1 as follows:
(220 ILCS 5/8-508.1) (from Ch. 111 2/3, par. 8-508.1)
Sec. 8-508.1. (a) As used in this Section:
(1) "Decommissioning" means the 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 and safety.
(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

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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

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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

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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 successor thereto.
(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

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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.

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(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

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to provide.
(f) A nuclear decommissioning trust established pursuant
to this Section shall be exempt from taxation in Illinois.
(Source: P.A. 85-1400.)