Asset Retirement Obligations

August 4, 2026

2026-17625

Audit

According to Title 10 of the Code of Federal Regulations, Section 50.75 (10 CFR § 50.75), nuclear licensees that operate nuclear facilities will provide reasonable assurance that funds will be available for the decommissioning of its licensed nuclear units and provides guidance for a minimum funding amount for the decommissioning.  The Tennessee Valley Authority (TVA) established the Nuclear Decommissioning Trust (NDT) to be used to retire long-lived nuclear assets. Additionally, TVA established an Asset Retirement Trust (ART) to cover any additional decommissioning costs not covered by the minimum required funding of the NDT.  The ART can also be used to cover decommissioning costs of non‑nuclear long-lived assets.  As of December 31, 2025, the investment assets of these two trusts totaled about $5.6 billion ($3.8 billion for the NDT and $1.8 billion for ART).  Due to the critical importance of managing asset retirement obligations for accurate financial reporting, regulatory compliance, and ensuring sufficient funds are available for the substantial costs associated with retiring long-lived assets, we conducted an audit to evaluate the operational effectiveness of controls for managing the NDT and ART. The objective of our audit was to evaluate the operational effectiveness of controls for managing the NDT and ART. Our audit scope focused on key controls governing the management of the NDT and ART during calendar year 2025. We identified eight key controls related to the administration of the NDT and ART in the following categories:  (1) analysis of funding levels and projected liabilities, (2) investment manager performance evaluation, and (3) investment asset valuation.  We determined the eight key controls tested were operating effectively as intended.

No

Yes (agency-wide)

$0

$0