Salt River Project Nuclear Decommissioning Trust

The trust exists exclusively to accumulate and invest funds for the future decommissioning of Salt River Project's 29.2% ownership share of the Palo Verde Generating Station. Under NRC regulations, the funds can only be used for radiological decommissioning, spent fuel management, and site restoration. No other investment objective or distribution purpose is permitted.

SRP's elected board of directors holds ultimate fiduciary authority, though the utility's financial management division administers external manager selection and asset allocation. The trust is subject to NRC and Internal Revenue Code Section 468A regulations that restrict eligible investments and require periodic funding-assurance filings with the NRC and the Arizona Corporation Commission.

Each of the four co-owners — SRP, Arizona Public Service, Southern California Edison, and Public Service Company of New Mexico — maintains its own qualified nuclear decommissioning trust proportional to its ownership share. The trusts are legally separate, but their liabilities are linked to the same facility and coordinated through APS as the operating agent. Aggregate decommissioning obligations across all co-owners are significant, given Palo Verde's status as the largest U.S. nuclear plant by net generation.

The trust likely employs a liability-driven investment approach using liquid and fixed-income instruments to match the duration and risk profile of the decommissioning obligation. NRC regulations and tax code restrictions limit the universe of permissible investments, favoring high-grade fixed-income and diversified equity strategies over direct or illiquid alternatives. Precise asset allocation is not publicly disclosed.

NRC regulations require licensees to demonstrate reasonable assurance that decommissioning funds will be available when needed. If a funding shortfall emerges, SRP would be required to adjust contribution rates, seek alternative financial assurance mechanisms such as surety bonds or letters of credit, or request NRC approval for a revised funding plan. The regulatory framework is designed to prevent shortfalls from falling to taxpayers.