DCL-11-071, Response to Requests for Additional Information Related to Decommissioning Funding Status Report
| ML111640428 | |
| Person / Time | |
|---|---|
| Site: | Diablo Canyon  |
| Issue date: | 06/10/2011 |
| From: | Becker J Pacific Gas & Electric Co |
| To: | Office of Nuclear Reactor Regulation, Document Control Desk |
| References | |
| DCL-11-071, TAC ME5476, TAC ME5477 | |
| Download: ML111640428 (10) | |
Text
Pacific Gas and Electric Company June 10, 2011 PG&E letter DCl-11-071 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, DC 20555-0001 Docket No. 50-275, Ol-DPR-80 Docket No. 50-323, Ol-DPR-82 Diablo Canyon Units 1 and 2 James R. Becker Site Vice President Diablo Canyon Power Plant Mail Code 104/5/601
- p. O. Box 56 Avila Beach, CA 93424 805.545.3462 Internal: 691.3462 Fax: 805.545.6445 10 CFR 50.75 Response to Requests for Additional Information Related to the Diablo Canyon Nuclear Power Plant. Units 1 and 2. 2011 Decommissioning Funding Status Report (TAC Nos. ME5476 and ME5477)
Dear Commissioners and Staff:
Pacific Gas & Electric Company (PG&E) submitted PG&E letter DCl 11-039, dated March 31,2011, for the 2011 Decommissioning Funding Status Report for Diablo Canyon Power Plant (DCPP), Unit Nos. 1 and 2, as required under 10 CFR 50.75(f)(1 ).
By NRC letter dated May 13, 2011, the NRC staff has reviewed the submittal and determined that additional information is required in order to complete its review.
The NRC requested that a response would be provided within 30 days of receipt of the letter transmitting the request for additional information. The attached enclosure provides the PG&E response for the request for additional information.
If you have any questions regarding this response, please contact Mr. Thomas Baldwin, Regulatory Service Manager at (805) 545-4720.
I declare under penalty of perjury that the foregoing is true and correct.
Executed on June 10, 2011.
A member of the STARS (Strategic Teaming and Resource Sharing)
Alliance Callaway
- Comanche Peak
- Diablo Canyon
- Palo Verde
- San Onofre
- South Texas Project
- Wolf Creek
Document Control Desk June 10, 2011 Page 2 SWH/50398418 Enclosure cc:
Diablo Distribution PG&E Letter DCL-11-071 cc/enc: Elmo E. Collins, NRC Region IV Regional Administrator Michael S. Peck, NRC Senior Resident Inspector James T. Polickoski, NRR Project Manager Alan B. Wang, NRR Project Manager A
member of the STARS (Strategic Teaming and Resource Sharing)
Alliance Callaway
- Comanche Peak
- Diablo Canyon
- Palo Verde
- San Onofre
- South Texas Project
- Wolf Creek
Enclosure PG&E Letter DCL-11-071 Page 1 of 8 NRC RAI1: Minimum Decommissioning Financial Assurance (DFA) calculation:
Please provide the basis for the burial factor used in calculating the minimum requirement for DFA and, if necessary, a corrected submittal for that part of the DFS report.
By letter dated March 31,2011, PG&E reported the amounts of decommissioning funds for DCPP, Units 1 and 2, estimated to be required under 10 CFR 50.75(b) and (c),
greater than the amount calculated by the NRC staff. Within its DFS report submittal, PG&E used the Direct Disposal factor (27.292), calculated the factor to 2011 by applying the average percent change between 2008 and 2010 and applying to the 2008 base factor, and restated the 2011 factor to 1986 (16.8999), which is not a current value within NUREG-1307, "Report on Waste Burial Charges: Changes in Decommissioning Waste Disposal Costs at Low-Level Waste Burial Facilities," Rev. 14 (ADAMS Accession No. ML103220151).
NUREG-1307, page IV, states, in part, that: "For plants that have no disposal site available for LLW [low-level waste] (e.g., plants not located within the Atlantic, Northwest, and Rocky Mountain Compacts), NUREG-1307, Rev. 14 assumes the costs for disposal is the same as that provided for the Atlantic Compact. for lack of a better alternative at this time. "
According to 10 CFR 50.75 (f)(1), the amount provided in the DFS report should be "the amount of decommissioning funds estimated to be required under 10 CFR 50.75(b) and (c)."
PG&E Response NUREG-1307, page 3 states, "Effective July 1,2008, waste from states that are not members of the Atlantic Compact was not[sic] longer accepted at the South Carolina disposal site. Licensees not located in either the Northwest, Rocky Mountain, or Atlantic Compacts should use the Bx values for the Generic LLW Disposal Site". The Bx Values for Generic LLW Disposal Site and the Atlantic Compact Direct Disposal are exactly the same for a PWR in 2008 and 2010.
DCPP calculations were based on the Generic LLW Disposal Site, escalating the values in the Generic LLW Disposal Site table from 2010 (the most current information in the table) to an assumed value for 2011 based on the increase reflected in the table between 2008 and 2010.
NRC RAI2: After-tax decommissioning funds as of December 31,2010:
Please indicate if the amount of decommissioning funds identified within the DFS report for DCPP are the after-tax amounts of decommissioning funds accumulated through
Enclosure PG&E Letter DCL-11-071 Page 2 of 8 December 31, 2010. If not, please provide the after-tax amounts of decommissioning funds accumulated through December 31,2010.
On March 31,2011, PG&E reported the amounts of decommissioning funds accumulated as of December 31,2010, for DCPP but did not indicate if the amounts stated were the before or after-tax balances.
The provisions of 10 CFR 50. 75(f)(1) and (2) require the licensee to report the amount of funds accumulated to the end of the calendar year preceding the report.
PG&E Response The amounts reported in the DFS report represented the market value of the funds:
Market Value (December 201 0 dollars)
The after-tax, liquidation value of the funds are:
Liquidation Value (December 201 0 dollars)
NRC RAI 3: Citation for real rate of return:
Unit 1 $
807.5 Unit 2 $ 1,083.1 Unit 1 $
738.9 Unit 2 $
989.6 Please provide the citation (e.g., an Order by the rate-regulatory authority) by the regulatory entity that allows for the assumptions used regarding rates of escalation in decommissioning costs, rate of earnings on decommissioning funds, and rates of other factors assumed within PG&E's DFS report for DCPP. Also, please include the rate of earnings on the decommissioning funds and annual real rate of return, and confirm if the real rate of return is allowed by PG&E's regulatory authority for both the annual collections as well as the decommissioning trust funds for DCPP.
While PG&E's DFS report provides variable escalation rates for DCPP from 2010 through 2025, the rate of earnings and real rate of return on decommissioning funds were not provided within the DFS report.
As stated in 10 CFR 50.75(f)(1): "... the information in [the DFS] report must include [... ]
the assumptions used regarding rates of escalation in decommissioning costs, rates of earnings on decommissioning funds, and rates of other factors used in funding projections... "
PG&E Response California Public Utilities Commission ("CPUC") D.1 0-07 -04 7 authorized the assumptions used regarding rates of escalation in decommissioning costs, rate of
Enclosure PG&E Letter OCL-11-071 Page 3 of 8 earnings on decommissioning funds, and rates of other factors assumed within PG&E's OFS report for OCPP.
0.10-07-047 assumed the following rates of return for OCPP Unit 1:
Year After-tax Annualized Rate of Return 2010 5.01%,
2011 4.96%
2012 4.920/0 2013 4.88%,
2014 4.85%
2015 4.820/0 2016 4.800/0 2017 4.780/0 2018 4.77%
2019 4.75%,
2020 4.370/0 2021 4.01%
2022 3.670/0 2023 3.35%
2024 3.050/0 2025 2.950/0 0.10-07-047 assumed the following rates of return for OCPP Unit 2:
Year After-tax Annualized Rate of Retu rn 2010 5.01%
2011 4.96%
2012 4.91%
2013 4.88%
2014 4.850/0 2015 4.820/0 2016 4.80%
2017 4.780/0 2018 4.77%
2019 4.75%
2020 4.37%
2021 4.01%
2022 3.67%
2023 3.35%
2024 3.05%
2025 2.95%
Enclosure PG&E Letter DCL-11-071 Page 4 of 8 Following is the after-tax rate of return earned by the assets of the DCPP Unit 1 Fund from the date of the initial contribution through 2010:
Year After-tax Annualized Rate of Return Qualified Fund 1988 7.10%
1989 6.30%
1990 8.000/0 1991 9.08%
1992 7.470/0 1993 9.39%
1994
-0.84%
1995 20.07%
1996 9.210/0 1997 15.94%
1998 13.910/0 1999 8.930/0 2000 0.75%
2001
-2.920/0 2002
-3.620/0 2003 15.730/0 2004 7.720/0 2005 4.84%
2006 9.55%
2007 5.690/0 2008
-19.910/0 2009 18.420/0 2010 10.9%
Following is the after-tax rate of return earned by the assets of the DCPP Unit 2 Fund from the date of the initial contribution through 2010:
Year After-tax Annualized Rate of Return Qualified Fund 1988 7.10%
1989 6.300/0 1990 8.00%
1991 9.080/0 1992 7.470/0 1993 9.39%
1994
-0.840/0 1995 20.070/0 1996 9.21%
1997 15.94%
1998 13.910/0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 8.930/0 0.750/0
-2.92%
-3.62%
15.73%
7.720/0 4.84%
9.550/0 5.69%
-19.910/0 18.420/0 10.9%
Enclosure PG&E Letter DCL-11-071 Page 5 of 8 Amounts contributed to the decommissioning funds are based on the assumptions adopted by the CPUC. The annual collections are based on the assumed after-tax rate of returns. On a triennial basis, the CPUC conducts a Nuclear Decommissioning Cost Proceeding to review the prior proceeding's assumptions, as well as actual performance of the fund. At that time, future contributions to the funds are adjusted to reflect annual real rates of return for the prior three years.
NRC RAI 4: Summary of annual expenses:
Please provide a summary schedule of annual expenses, projected earnings, and end-of-year fund balances in 2010 dollars, for radiological decommissioning regarding the site-specific cost estimate of DCPP, in order for the NRC staff to evaluate the amount of earnings credit available during the decommissioning period.
Within its DFS report, PG&E included a site-specific cost estimate (SSCE) that was escalated into 2011 dollars for DCPP, Units 1 and 2, but did not include a summary schedule of annual expenses, projected earnings, and end-of-year fund balances.
Per 10 CFR 50. 75( e)( 1 )(i) and (ii), the licensee must specifically describe the safe storage period in order to take credit for projected future earnings when it uses a site-specific estimate as the basis for using the prepayment or external sinking fund methods of financial assurance.
PG&E Response The following tables provides a summary schedule of projected earnings and end-of-year fund balances using 2010 liquidation values, costs in 2010 dollars and the assumptions adopted by the CPUC in D.1 0-07-047:
Year Liquidation Value 12/31/2010 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 DCPP UNIT 1 DCPP #1 Capital Gain Projected YE Bal Tax from Withdrawal Earnings Before +/-
Liquidation (at YE) 1.0507 1.0500 1.0495 1.0491 1.0488 1.0485 1.0482 1.0480 1.0478 1.0477 1.0475 1.0437 1.0401 1.0367 1.0335 1.0305 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 738.9 738.9 775.9 819.2 864.4 911.4 960.5 1011.7 1065.1 1120.9 1179.2 1240.2 1296.2 1348.0 1395.2 1437.2 1453.6 1349.5 1048.7 701.5 545.2 403.8 394.5 384.5 373.7 362.3 350.1 337.1 323.2 271.4 152.9 106.2 57.9 43.6 31.6 18.9 5.4
-8.9
-23.9
-39.9
-56.7
-74.4
-93.1
-137.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
-3.0
-4.8
-6.9
-9.3
-11.9
-4.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 19.4 142.4 330.9 367.4 171.9 153.0 20.7 21.0 21.5 21.8 22.2 22.7 23.2 59.5 122.9 49.7 50.0 15.5 12.9 13.3 13.7 14.0 14.4 14.8 15.2 15.6 16.0 40.5 27.4 Enclosure PG&E Letter DCL-11-071 Page 6 of 8 Contrib.
(at YE) 0.000 4.658 4.658 4.658 4.658 4.658 4.658 4.658 4.658 4.658 4.658 4.658 4.658 4.658 4.658 4.269 Remaining Assets 653.8 738.9 780.5 823.9 869.0 916.1 965.1 1016.3 1069.8 1125.6 1183.9 1241.9 1296.0 1345.8 1390.6 1410.5 1310.8 1018.7 681.4 529.6 392.3 383.2 373.5 363.0 351.9 340.0 327.4 313.9 263.6 148.5 103.2 56.2 42.3 30.7 18.3 5.2
-8.6
-23.3
-38.7
-55.1
-72.3
-90.4
-133.5
-164.9
Year Liquidation Value 12/31/2010 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 DCPP UNIT 2 DCPP#2 Capital Gain Projected YE Bal Tax from Withdrawal Earnings Before +/-
Liquidation (at YE) 1.0507 1.0500 1.0495 1.0491 1.0488 1.0485 1.0482 1.0480 1.0478 1.0477 1.0475 1.0437 1.0401 1.0367 1.0335 1.0305 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 1.0295 989.6 989.6 1039.1 1095.1 1153.5 1214.3 1277.7 1343.9 1413.0 1485.1 1560.4 1639.1 1711.1 1777.6 1837.9 1891.3 1937.4 1946.6 1835.1 1493.7 1159.8 964.9 820.2 791.0 759.5 725.8 689.7 651.0 609.3 529.4 369.2 199.8 19.1
-6.8
-20.2
-34.3
-49.2
-64.9
-81.5
-98.9
-117.4
-136.7
-157.0
-202.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
-4.0
-6.4
-9.2
-12.3
-15.6
-6.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 41.9 164.1 384.2 367.2 222.6 168.2 51.8 53.3 54.5 55.9 57.4 59.1 95.1 170.8 175.1 181.3 25.7 12.8 13.1 13.5 13.8 14.2 14.6 15.0 15.4 15.8 39.3 27.2 Enclosure PG&E letter Del-ii-07i Page 7 of 8 Contrib.
(at YE) 0.000 4.350 4.350 4.350 4.350 4.350 4.350 4.350 4.350 4.350 4.350 4.350 4.350 4.350 4.350 1.450 Remaining Assets 886.1 989.6 1043.4 1099.5 1157.8 1218.7 1282.1 1348.2 1417.3 1489.4 1564.7 1639.4 1709.0 1772.8 1829.9 1880.0 1890.8 1782.5 1450.9 1126.5 937.2 796.7 768.4 737.7 705.0 669.9 632.3 591.8 514.2 358.6 194.1 18.6
-6.6
-19.6
-33.3
-47.8
-63.1
-79.2
-96.1
-114.0
-132.8
-152.5
-196.3
-229.3
NRC RAI 5: Site-specific study - DCPP, Unit No.2:
Enclosure PG&E Letter DCL-11-071 Page 8 of 8 Please clarify why the site-specific cost estimate for DCPP, Unit No.2 is less than the minimum decommissioning financial assurance amount calculated by PG&E for radiological decommissioning.
Within its DFS report, PG&E stated that the minimum decommissioning amount for DCPP, Unit No.2 is $580.3 million, which was calculated pursuant to the requirements specified under 10 CFR 50.75(c). However, based on site-specific cost estimates prepared by TLG Services, Inc., and the NDCTP Decision, PG&E estimated that the decommissioning cost for DCPP, Unit No.2 is approximately $546.5 million.
As stated under 10 CFR 50. 75(b)( 1): "... [f]inancial assurance for decommissioning will be [... J provided in an amount which may be more, but not less than the amount stated in the table in paragraph (c)( 1)... "
PG&E Response The reasons that the site-specific cost estimate for DCPP Unit 2 is less than the minimum decommissioning financial assurance amount are that the common facility costs are included in the Unit 1 portion of the estimate and the current estimate assumes that much of the structures at DCPP will be used as backfill at the site (thus no disposal costs). Also, DCPP has assumed all security costs in the Spent Fuel Management scope of work.
PG&E was in error in stating that the site-specific cost estimate for Unit 2 was greater than the calculated minimum decommissioning cost pursuant to the requirements of 10 CFR 50.75(e) as indicated by the calculated value ($580.3 million) and the site-specific estimate ($546.5 million).
Per 10 CFR 50.75 (b)(4) "... The amount stated in the applicant's or licensee's certification may be based on a cost estimate for decommissioning the facility. As part of the certification a copy of the financial instrument obtained to satisfy the requirements of paragraph (e) of this section must be submitted... ". The assumption that PG&E must collect funding to the amount calculated by 10 CFR 50.75(c) requirements would result in excess funding in the Trust accounts that would have to be returned to rate payers at a later date (not necessarily those who paid) based on the current site-specific cost estimate.
PG&E included the TLG Services cost estimate that was approved by the California Public Utilities Commission (CPU C) in the most recent Nuclear Decommissioning Cost Triennial Proceeding (NDCTP)