Utility receives more time to request revised nuclear decommissioning fund amounts

Plain-English summary

A utility was required to request a revised schedule of deductible nuclear decommissioning fund contributions after the operating license for a generating unit was extended. It could not complete the request by the regulatory deadline because an updated decommissioning study and the related funding analysis were not yet available, which also prevented the public utility commission from approving revised costs. The utility requested discretionary extension relief before the IRS discovered the failure and represented that the delay resulted from events beyond its control. It also represented that relief would not lower its aggregate tax liability and that the affected assessment periods remained open. The IRS found that the utility acted reasonably and in good faith and that relief would not prejudice the government. It granted the extension to file the revised-schedule request.

Ruling snapshot

• Question: May the utility receive an extension to request a revised schedule of ruling amounts for its qualified nuclear decommissioning fund?
• Outcome: Approved
• Key authorities: IRC § 468A(d)(1); Treas. Reg. §§ 1.468A-3(f)(1)(iv) and 301.9100-1 through 301.9100-3

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202632003 Third Party Communication: None
Release Date: 8/7/2026 Date of Communication: Not Applicable
Index Number: 9100.00-00 Person To Contact:
------------------------, ID No. -----------------
Telephone Number:

------------------------------------------------- --------------------
Refer Reply To:
------------------------ CC:ECE:B2
----------------------- PLR-102553-26

                                                             Date:
                                                             May 12, 2026

In Re: Extension of Time to Make Election

Legend:

Taxpayer = --------------------------------------------------
Subsidiary = ------------------------------------------------
Company A = ---------------------------------------------------------------------------------

Company B = ------------------------------
Company C = --------------------------------------------------
Company D = ------------------------------------------------
Company E = -------------------------
Commission = ----------------------------------------------
Order = ---------------------------------------------------------------------------------

Docket = ------------------------
Fund = ---------------------------------------------------------------------------------

State A = -------------
State B = --------
Unit = -----------------------------------------------------------
Submission Date = --------------------------
Supplement Date = ----------------
Date 1 = -------------------
Date 2 = ----------------------
Date 3 = ------------------
Date 4 = -----------------------
Date 5 = ---------------------------

                                                     2

PLR-102553-26
Date 6 = ---------------------
Date 7 = --------------------
Year 1 = -------
Year 2 = -------

Dear ------------:

  This letter responds to your request, dated Submission Date, as supplemented

by an additional submission on Supplement Date, for an extension of time, pursuant to
§§ 301.9100-1 and 301.9100-3 of the Procedure and Administration Regulations,1 for
Taxpayer to file a revised schedule of ruling amounts under § 468A(d)(1) of the Internal
Revenue Code and § 1.468A-3(f)(1) of the Income Tax Regulations with respect to a
nuclear decommissioning reserve fund that Taxpayer has established for Unit.

                                 FACTUAL BACKGROUND

    Taxpayer represents the following facts:

    Taxpayer, a State A corporation, is the common parent of an affiliated group of

entities that files a consolidated federal income tax return. Taxpayer is the parent of
Subsidiary, a limited liability company organized under the laws of State A and
classified as a corporation for federal income tax purposes. Pursuant to an internal
reorganization to facilitate an acquisition transaction effective as of Date 1, Subsidiary
owns all of the interests in Company A, a limited liability company organized under the
laws of State A and engaged in the generation and sale of electric energy in State B.
Company A is disregarded entity for federal income tax purposes, employs the accrual
method of accounting and is included on the tax return of Taxpayer that is filed on a
calendar year basis.

    Company A is the successor to a structurally-separated and unregulated

generation business formerly conducted by Company B. The transmission and
distribution businesses formerly conducted by Company B is currently conducted by an
entity unrelated to Taxpayer, Company C, and is regulated as to rates and conditions of
service by Commission.

     In Year 2, Company D, a limited liability company and a disregarded entity for

federal income tax purposes, transferred ownership of Unit and its decommissioning
liability to Company A. Company A owns Fund subject to the requirements of Section
468A to fund the decommissioning of Unit.

  Company C includes the costs to decommission Company A’s nuclear

generating units including Unit, in its Commission rate proceedings. Company A and
Company C are parties to a decommissioning funds collection agent agreement
whereby Company C collects an amount intended to fund the cost of decommissioning
1 Unless otherwise specified, all “section” or “§” references are to sections of the Code or the Income Tax

or to the Procedure and Administration Regulations.

                                        3

PLR-102553-26
Unit that Company C must immediately remit to Company A upon receipt. Company A
deposits the amounts received into Fund. The annual amount collected by Company C
to cover the cost of nuclear decommissioning is allocated between two units, as
approved by Commission.

   Taxpayer, as the parent of Company A, sought a revised schedule of ruling

amounts following the transfer of ownership of Unit. The Service issued a private letter
ruling approving the revised schedule of rulings amount from the Service on Date 2.

    On Date 3, the Nuclear Regulatory Commission renewed and extended the

Facility Operating License for Unit to Date 4. Following the renewal, Company A
undertook Year 1 Decommissioning Study. Company A also undertook a Year 1
funding analysis for Fund, which assumed that the decommissioning costs to be
included in the cost of service for ratemaking purposes for Unit as required by Order
under Docket dated Date 5 were collected and contributed to Fund for Unit through
Year 1. Order also adjusted the allocation within Fund.

   Under § 1.468A-3(f)(1)(iv), the renewal of the operating license for Unit required

Taxpayer to request a revised schedule of ruling amounts no later than Date 6. On
Date 7, Taxpayer contracted with Company E to produce a new decommissioning study
for Unit. By early Year 1, Taxpayer had not yet received the updated decommissioning
study for Unit. The completion of the updated decommissioning study was critical to
informing the completion of the updated funding analysis, which used contributions
determined in a prior schedule of rulings amounts for taxable year through Year 1.
Without completion of the updated decommissioning study and updated funding
analysis, taxpayer was unable to present the Commission with updated
decommissioning costs for Unit and Commission is not able to approve the updated
decommissioning cost for Unit based on Unit’s updated license to Date 4. Taxpayer
represents that these are intervening events beyond Taxpayer’s control that prevent
them from filing a timely revised schedule of rulings amount by Date 6 pursuant to
§ 1.468A-3(f)(1)(iv).

                            RULING REQUESTED

   Pursuant to §§ 301.9100-1 and 301.9100-3, Taxpayer requests an extension of

time to file a request for a revised schedule of ruling amounts for purposes of § 468A
and § 1.468A-3(f)(1)(i).

                             LAW AND ANALYSIS

   Sections 468A(a) and 1.468A-1(a) provide that a taxpayer that elects the

application of § 468A shall be allowed as a deduction for any taxable year the amount of
any payments made by the taxpayer to a nuclear decommissioning fund during such
taxable year. Section 1.468A-1(b)(1) provides that an eligible taxpayer is a taxpayer
that possesses a qualifying interest in a nuclear power plant. Under § 1.468A-1(b)(2),
the definition of the term “qualifying interest” includes a direct ownership interest.

                                         4

PLR-102553-26

   Sections 468A(b) and 1.468A-2(b)(1) provide that the amount of payments made

(or deemed made) by a taxpayer to a nuclear decommissioning fund during any taxable
year shall not exceed the ruling amount applicable to such fund for such taxable year.

   Section 468A(d)(1) provides that no deduction shall be allowed for any payment

to a nuclear decommissioning fund unless the taxpayer requests and receives from the
Secretary a schedule of ruling amounts. Section 468A(d)(1) further requires a Taxpayer
to request a revised schedule of ruling amounts upon renewal of a nuclear power plant
operating license.

   Section 1.468A-3(f)(1)(iv) requires that a taxpayer who receives a renewal of an

operating license of a nuclear power plant to which a qualified nuclear decommissioning
fund relates must request a revised schedule of ruling amounts on or before the
deemed payment deadline for the taxable year that includes the date on which the
license was extended. In this case, Taxpayer was required to request the revised
schedule of ruling amounts by Date 6.

   Sections 301.9100-1 through 301.9100-3 provide the standards used to

determine whether to grant an extension of time to make a regulatory election. Section
301.9100-1(a). Section 301.9100-2 allows automatic extensions of time for making
certain elections. Section 301.9100-3 provides rules for requesting extensions of time
for regulatory elections that do not meet the requirements of § 301.9100-2.

   Section 301.9100-1(c) provides that the Commissioner has discretion to grant a

reasonable extension of time under the rules set forth in §§ 301.9100-2 and 301.9100-3
to make certain regulatory elections. Section 301.9100-1(b) defines a “regulatory
election” as an election with a due date that is prescribed by a regulation published in
the Federal Register, or a revenue ruling, revenue procedure, notice or announcement
published in the Internal Revenue Bulletin.

    Section 301.9100-3(a) provides that requests for relief under § 301.9100-3 will be

granted when the taxpayer provides evidence to establish to the satisfaction of the
Commissioner that the taxpayer acted reasonably and in good faith, and that granting
relief will not prejudice the interests of the Government.

    Section 301.9100-3(b)(1) provides, in part, that a taxpayer is deemed to have

acted reasonably and in good faith if the taxpayer requests relief before the failure to
make the regulatory election is discovered by the Service or reasonably relied on a
qualified tax professional, including a tax professional employed by the taxpayer, and
the tax professional failed to make, or advise the taxpayer to make, the election.

   Section 301.9100-3(b)(3) provides that a taxpayer will not be considered to have

acted reasonably and in good faith if the taxpayer: (i) seeks to alter a return position for
which an accuracy-related penalty has been or could be imposed under § 6662 at the
time the taxpayer requests relief (taking into account § 1.6664-2(c)(3)) and the new

                                          5

PLR-102553-26
position requires or permits a regulatory election for which relief is requested, (ii) was
informed in all material respects of the required election and related tax consequences,
but chose not to file the election, or (iii) uses hindsight in requesting relief. If specific
facts have changed since the original deadline that make the election advantageous to
a taxpayer, the Service will not ordinarily grant relief.

    Section 301.9100-3(c)(1)(i) provides that the interests of the government are

prejudiced if granting relief would result in the taxpayer having a lower tax liability in the
aggregate for all taxable years affected by the election than the taxpayer would have
had if the election had been timely made. Section 301.9100-3(c)(1)(ii) provides that the
interests of the government are ordinarily prejudiced if the taxable year in which the
regulatory election should have been made or any taxable years that would have been
affected by the election had it been timely made are closed by the period of limitations
on assessment.

  Taxpayer's election is a regulatory election, as defined under § 301.9100-1(b),

because the due date of the election is prescribed in § 1.468A-3(f)(1)(iv).

   Taxpayer represents that it requested relief before the failure to make the

regulatory election was discovered by the Service and that it failed to make the election
because of intervening events beyond the taxpayer’s control. Thus, under §§ 301.9100-
3(b)(1)(i) and (ii), Taxpayer is deemed to have acted reasonably and in good faith.
Taxpayer has also represented that none of the circumstances listed in § 301.9100-
3(b)(3) apply.

    Based on the information and representations made by Taxpayer, granting an

extension of time to file the election will not prejudice the interests of the government
under § 301.9100-3(c)(1). Taxpayer has represented that granting relief would not
result in a lower tax liability in the aggregate for all taxable years affected by the election
than Taxpayer would have had if the election had been timely made (taking into account
the time value of money). Furthermore, Taxpayer has represented that the taxable year
in which the regulatory election should have been made and any taxable years that
would have been affected had it been timely made, are not closed by the period of
assessment. Accordingly, Taxpayer's request for an extension of time to make a
revised schedule of ruling amounts request is granted.

  The rulings contained in this letter are based upon information and

representations submitted by Taxpayer and accompanied by a penalties of perjury
statement executed by an appropriate party. While this office has not verified any of the
material submitted in support of the request for rulings, it is subject to verification on
examination.

   This ruling is directed only to the Taxpayer who requested it. Section 6110(k)(3)

of the Code provides it may not be used or cited as precedent. In accordance with the
power of attorney on file with this office, a copy of this letter is being sent to your
authorized representatives.

                  6

PLR-102553-26

            Sincerely,



            Maggie Stehn
            Senior Counsel, Branch 2
            Office of Associate Chief Counsel
            Energy, Credits, & Excise Tax)

                                                    7

PLR-102553-26
cc: --------------------
----------------------------
------------------------------------
--------------------------------
-------------------------

  ----------------------------
  ----------------------------
  -------------------------------------
  --------------------------------
  -------------------------

  -------------------------------------------------------------