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Publicatie Laka-bibliotheek:
The Liability Equivalence of Unfunded Decommissioning Costs (1999)

AuteurKhurana, Pettway, Ramann
6-01-0-10-67.pdf
Datum1999
Classificatie 6.01.0.10/67 (KOSTEN)
Voorkant

Uit de publicatie:

                       THE LIABILITY EQUIVALENCE OF
                  UNFUNDED NUCLEAR DECOMMISSIONING COSTS




                                     Inder K. Khurana
                                   University of Missouri

                                    Richard H. Pettway
                                   University of Missouri

                                      K. K. Raman*
                                 University of North Texas




*Authors’ names are listed alphabetically. We gratefully acknowledge the helpful comments
and suggestions of Rashad Abdel-khalik, Jim Boatsman, Jere Francis, Phil Regier, Earl
Wilson, two anonymous reviewers and workshop participants at the University of Missouri-
Columbia and University of Alabama-Tuscaloosa. Professors Khurana and Pettway
gratefully acknowledges the financial support of the Public Utility Division of the Financial
Research Institute at the University of Missouri-Columbia and Professor Raman gratefully
acknowledges summer research support provided by the Dept. of Accounting at the
University of North Texas.
                         THE LIABILITY EQUIVALENCE OF
                    UNFUNDED NUCLEAR DECOMMISSIONING COSTS



                                               Abstract

        For public health and safety reasons, a nuclear power plant needs to be decommissioned at

the end of its useful life. In a recent report, the General Accounting Office (GAO 1999, p. 16) has

called into question the adequacy of funding for decommissioning. In the context of the ongoing

deregulation of the electric utility industry, there is considerable uncertainty at this time as to how

much of the unfunded decommissioning costs will be recovered from ratepayers.

        In this study, we utilize alternative current cost and present value estimates of unfunded

decommissioning costs to investigate whether investors are cognizant of these potential claims on

utility net assets. Our findings are largely consistent with