Decommissioning cost is...?

• A. The cost to dismantle and restore site after facility life; crucial for lifecycle cost assessments.
• B. Costs of constructing a new facility
• C. O&M costs during operation
• D. Tax and insurance separately

Answer: (A)

Decommissioning cost is the expense required to dismantle a facility and restore the site after its life ends. This is a future liability that must be planned for because it directly affects the total cost of owning and operating the asset over its entire lifecycle. It includes activities like safely shutting down, removing equipment, cleaning up hazardous materials, disposing of waste, and returning the site to a usable condition under regulatory requirements.

This is why the correct choice is the dismantling and site restoration cost after the facility’s life, which is essential for lifecycle cost assessments. Construction costs, ongoing operating and maintenance costs, and taxes/insurance are separate categories and do not define decommissioning cost itself.