Funded Decommissioning
All nuclear power stations have a finite life beyond which it is not safe or economically feasible for them to continue to operate. After this period, the power station must be decommissioned. Prospective operators of nuclear power stations are obliged to submit a funded decommissioning programme to the Secretary of State. This must set out the site operator’s costed plans for dealing with its future liabilities in relation to decommissioning, waste management and waste disposal, and how the operator will make financial provision to meet those liabilities. The programme must be approved by the Secretary of State before construction on the power station can start. The policy was legislated for in the 2008 Energy Act.
	Sections 46 and 48 of the 2008 Energy Act give the Secretary of State the power to unilaterally modify an FDP, both at the time of its original approval and at any point thereafter. In particular, the Secretary of State has the power to make modifications to an FDP to impose obligations on bodies corporate which are "associated" with the site operator.
	The Government considers that the original intention behind these provisions was to provide the Secretary of State with flexibility to impose FDP obligations, where necessary, on entities who would be expected to have a substantial degree of influence over the operator’s normal activities, for example the operator’s group companies and substantial equity investors.
	However, it is possible that the legislation could potentially be interpreted in such a way that other participants in the financing for a new nuclear project, such as security trustees and secured creditors, could be at risk of falling within the scope of the definition of bodies corporate ‘associated’ with the site operator due to the action they take, or are entitled to take, with regard to the management and enforcement of security. Neither of these types of entities would have a substantial degree of control over the operator’s normal activities. Given the potentially large costs that could be imposed through this power, their potential inclusion within the scope of Section 67 has made it much less likely that bodies of this type will become involved in the financing of new nuclear projects. The Act therefore clarifies that entities like secured creditors and security trustees will not be classed as being ‘associated’ with a site operator simply by virtue of rights, powers or shares that they hold in connection with the management and enforcement of security interests relating to a project. This will facilitate the ability of projects to raise senior debt.