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American Electric Power Nuclear Decommissioning Trust
The American Electric Power Nuclear Decommissioning Trust (NDT) was established to fund the eventual decommissioning of the Donald C.
American Electric Power Nuclear Decommissioning Trust
The American Electric Power Nuclear Decommissioning Trust (NDT) was established to fund the eventual decommissioning of the Donald C. Cook Nuclear Plant, a dual-unit facility in Bridgman, Michigan, owned by AEP subsidiary Indiana Michigan Power Company. The trust is a qualified fund, meaning its investment earnings accumulate free of federal income tax, provided all corpus and earnings are ultimately spent on decommissioning activities. Aaron L. Hill, as Director of Trusts and Investments for AEP Service Corporation, manages the trust's portfolio alongside the AEP System Retirement Plan. The trust's mandate spans a broad asset mix calibrated for long-term, liability-driven returns. Its portfolio includes public equities, fixed income securities, and a significant alternatives sleeve that touches private equity, venture capital — from seed to late-stage — buyouts, distressed debt, mezzanine, special situations, and natural resources. The trust participates in direct co-investments and fund-of-funds structures, notably through the global alternative investment portfolio. While specific fund commitments are rarely publicized, the trust's strategy reflects a hybrid posture balancing near-certain liability outflows against multi-decade return-seeking capital. AEP's NDT adheres to annual contribution guidelines and periodic funding-assurance tests governed by the Nuclear Regulatory Commission (NRC) and state public utility commissions. The trust's funding target is site-specific, based on an NRC-approved decommissioning cost estimate for Cook's two pressurized water reactors. In recent years, the trust's funded status has been affected by market volatility, cost escalation in the nuclear services sector, and revised decommissioning timelines. September 2024: AEP filed its latest triennial decommissioning cost estimate with the NRC, reflecting updated site-restoration projections for the Cook plant. The structural differentiator is the trust's mandatory spend-down profile: unlike a perpetual endowment or growing pension, this vehicle must eventually liquidate to zero over a 60-year SAFSTOR horizon. This creates a unique investment governance challenge — managing a partially illiquid alternative portfolio while maintaining sufficient liquidity for escalating radiological dismantlement costs decades into the future, all under the oversight of a utility holding company's treasury function.
General information
Firm type
Investment Trust
Year founded
1940
AUM
$4.1B (Altss estimate)
Location
Region
North America
Country
United States
City
Columbus
Corporate office
Columbus, OH, United States
Principals
Aaron L. Hill
Director of Trusts and Investments, American Electric Power Service Corporation
Sector focus
Frequently asked questions
Who runs investment decisions at the American Electric Power Nuclear Decommissioning Trust?
Aaron L. Hill, Director of Trusts and Investments for American Electric Power Service Corporation (AEPSC), has fiduciary responsibility for the NDT portfolio. He also manages the AEP System Retirement Plan and reports through AEPSC's treasury and finance hierarchy. External managers run segregated mandates, but asset allocation and manager selection are overseen by Hill's team.
What is the legal purpose of the trust, and how does it constrain investment strategy?
The trust exists solely to fund the radiological decommissioning of the Cook Nuclear Plant under Nuclear Regulatory Commission rules. All corpus and earnings must be used for decommissioning, which means the trust is on a finite, multi-decade spend-down path. This constrains liquidity planning far more than a typical pension fund — the trust must ensure it can meet escalating dismantlement costs decades from now while still pursuing private-market returns in the interim.
Does the trust commit to private equity and venture capital funds, or does it invest directly?
The trust does both. Its alternative investment portfolio spans fund-of-funds commitments, direct co-investments, and allocations to buyout, growth, venture capital (seed through late-stage), and distressed strategies. The trust also holds natural resources and real assets, consistent with liability-driven investors seeking inflation-hedging characteristics over extremely long horizons.
How is the trust funded, and what happens if it falls short?
Funding comes from ratepayer contributions collected through Indiana Michigan Power's electricity rates, together with accumulated investment earnings. The NRC requires triennial cost-estimate filings and minimum funding assurance. If a shortfall emerges — due to market losses or higher-than-expected decommissioning costs — the utility sponsor must either increase its rate-recovery collections or secure a parent-company guarantee or surety bond to close the gap.
What is the relationship between the trust and the American Electric Power Foundation?
The two are legally and functionally separate. The AEP Foundation is a philanthropic vehicle funded by corporate contributions from American Electric Power. The NDT is a qualified trust whose assets are restricted by federal law to decommissioning purposes only. There is no commingling of assets or shared investment mandates.
What is the decommissioning timeline for the Cook plant, and how does it affect portfolio construction?
The Cook plant is expected to follow a SAFSTOR decommissioning approach, under which major dismantlement is deferred for up to 60 years while the trust grows through market returns. This long horizon allows the trust to hold illiquid alternative assets, but it also requires a glide path toward greater liquidity as the major dismantlement period approaches. The plant's current operating licenses extend into the 2030s, meaning the drawdown phase is still decades away.
Is the trust's AUM publicly disclosed by AEP?
AEP does not disclose a consolidated AUM figure for the NDT as a single number in annual reports. Instead, it reports trust balances, annual contributions, and funded status in its regulatory filings. Third-party estimates place the trust at approximately $4.1 billion, though this figure fluctuates with market conditions and annual contribution levels.
Profile maintained by Altss using OSINT (open-source intelligence), regulatory filings, licensed data partners, and verified direct submissions. Read the methodology. Last updated: . Continuous refresh with full update cycles at least every 30 days.
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