DCL-99-038, Forwards Decommissioning Funding Repts for Diablo Canyon Power Plant,Units 1 & 2 & Humboldt Bay Power Plant,Unit 3, Per Requirements of 10CFR50.75(f)

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Forwards Decommissioning Funding Repts for Diablo Canyon Power Plant,Units 1 & 2 & Humboldt Bay Power Plant,Unit 3, Per Requirements of 10CFR50.75(f)
ML20205F579
Person / Time
Site: Diablo Canyon, Humboldt Bay
Issue date: 03/31/1999
From: Womack L
PACIFIC GAS & ELECTRIC CO.
To:
NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
Shared Package
ML20205F584 List:
References
DCL-99-038, DCL-99-38, HBL-99-004, HBL-99-4, NUDOCS 9904060321
Download: ML20205F579 (7)
v • d • e


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March 31,1999 PG&E Letter DCL-99-038 PG&E Letter HBL-99-004 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, DC 20555-0001 Dacket No. 50-275, OL-DPR-80 Docket No. 50-323, OL-DPR-82 Diablo Canyon Units 1 and 2 Docket No. 50-133, OL-DPR-7 Humboldt Bay Unit 3 Decommissionino Fundina Reports for Diablo Canyon Power Plant Units 1 and 2 and Humboldt Bay Power Plant Unit 3

Dear Commissioners and Staff:

PG&E is submitting the decommissioning fund reports for Diablo Canyon Power Plant (DCPP) Units 1 and 2, and Humboldt Bay Power Plant (HBPP) Unit 3, pursuant to the requirements of 10 CFR 50.75(f).

Diablo Canyon Units 1 and 2 At the end of calendar year 1998, the market value of the DCPP Units 1 (3488 MWt) and 2 (3568 MWt) decommissioning trust fund was $1,079.7 million (1998 dollars). j/

PG&E is in the midst of a California Public Utilities Commission (CPUC) assessnient of I decommissioning costs, collections, and trust fund performance. If PG&E's recommendations are accepted, it is anticipated that an additional $524.8 million (

dollars) will be ccilected over the next sixteen years to coincide with a postulated decommissioning in 2015 (currently, DCPP Units 1 and 2 have an operating license to 2021 and 2025, respectively).

PG&E is confident that the DCPP Units 1 and 2 decomrnissioning trust fund balance in 2015 will meet the minimum annount of $673.3 million (1999 dollars) that was calculated pursuant to the requirements specified in 10 CFR 50.75(c).

9904060321 9903317 PDR ADOCK 05000133 I PDR

' Docum::nt Control Desk DCL-99-038 Mirch 31,1999 HBL-99-004 Page 2 Humboldt Bay Unit 3 At the end of calendar year 1998, the market value of the HBPP Unit 3 (220 MWt) decommissioning trust funds was $202.5 million. This figure is lower than the $352.7 million (1999 dallars) that was calculated pursuant to the requirements specified in 10.CFR 50.75(c), which is based on a minimum 1200 MWt plant. However, HBPP is only a 220 MWt plant; thus using the 1200 MWt calculational number produces an inappropriately large decommissioning cost estimate. Additionally, HBPP Unit 3 was last operated in July 1976, taken out of service in June 1983, and has been partially dismantled. PG&E believes that sufficient funding remains in the trust funds to ensure successful decommicsioning in 2015 based on a site specific decommissioning cost estimate prepared by TLG Services, Inc.

Supportina Cost Estimates Based on site-specific cost estimates prepared by TLG Services, Inc., PG&E has determined that the decommissioning costs are approximately $877.6 million for DCPP Units 1 and 2, and $197.6 million for HBPP Unit 3 in 1999 dollars These costs do not include dismantling or demolishing the non-nuclear portions of the facilities.

To assure that sufficient funds will be available for decommissioning, PG&E has .

established separate external sinking trust fund accounts for DCPP Units 1 and 2, and l HBPP Unit 3.

Supportina Enclosures Supporting documentation for this report is included as Enclosures 1 through 5.

i Enclosures 1 and 2 provide decommissioning funding status information in a format suggested by NEl and the NRC. The enclosures are for DCPP Units 1 and 2 and HBPP Unit 3, respectively.

Enclosures 3 and 4 are the TLG Services, Inc. decommissioning cost estimate reports prepared for PG&E for the DCPP Units 1 and 2 and HBPP Unit 3, respectively. The reports provide cost estimates for decommissioning of both the nuclear and non-nuclear facilities.

Encicsure 5 provides information on the escalation of the required decommissinning

- funding amounts from 1986 dollars to 1999 dollars. As required by 10 CFR 50.75(c)(2), the information includes escalation factors for energy, labor, and

_ waste burial costs.

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Docum::nt Control Desk DCL-99-038 March 31,1999 ' HBL-99-004 Page 3 Sincerely, Lawrence F. Womack cc: Steven D. Bloom Ellis W. Merschoff David L. Proulx Louis L. Wheeler Robert S. Wood Diablo Distribution INPO Enclosures wec/2148

Enclosure 1 DCL-99-038 HBL-99-004 NRC Decommissioning Funding Status Report Diablo Canyon Power Plant - Units 1 (3488 MWt) & 2 (3568 MWt)

As provided in 10 CFR 50.75(f)(1), each power reactor licensee is required to report to the NRC on a calendar year basis, beginning on March 31,1999, and every 2 years thereafter, on the status of its decommissioning funding for each reactor or share of reactor it owns.

$ in Millions e

1. The minimum decommissioning fund estimate, pursuant to 10 CFR 50.75 (b) and (c)'.  ;

January 1999 dollars $ 673.3 l

2. The amount accumulated at the end of the calendar year preceding the date of the report for items included in 10 CFR 50.75 (b) and (c). (Alternatively, the total amount accumulated at the end of the ca'endar ycar preceding the date of the report '

can be reported here if the cover letter transmitting the report provides the total estimate and indicates what portion of that estimate is for items not included in 10 CFR 50.75 (b) and (c)).

Market Value (December 1998 dollars) $ 1.079.7 l

3. A set..dule of the annual amounts remaining to be collected i l

for items in 10 CFR 50.75 (b) and (c). (Altematively, the annual amounts remaining to be collected can include items beyond those required in 10 CFR 50.75 (b) and (c) if the cover letter transmitting the report provides a total cost estimate and I indicates what portion of that estimate is for items that are not I included in 10 GFR 50.75 (b) and (c)). PG&E is in the midst of )

a CPUC assessment of decommissioning costs, collections, and trust fund performance. If PG&E's recommendations are accepted, it is anticipated that an additional $524.8 million (1998 dollars) will be collected over the next 16 years. ,

Amount remaining S 524.8 Number of years to collect 16 years ,

' The NRC formulas in 10 CFR 50.75(c) include only those decommissioning costs incurred by licensees to remove a facility or site safely from service and reduce residual radioactivity to levels that permit: (1) release of the property for unrestricted use and termination of the license; or (2) release of the property under restricted conditions and termination of the license. The cost of dismantling or demolishing non-radiological systems and structures is not included in the NRC decommissioning cost estimates. The costs of managing and storing spent fuel on site until transfer to DOE ace not included in the cost formulas.

1

Enclosure 1 DCL-99-038 HBL-99-004

4. The assumptions used regarding escalation in decommissioning l cost, rates of earnings on decommissioning funds, and rates of I other factors used in funding projections; Escalation in decommissioning costs 5.5%

Rate of Return on Qualified Trust 6.16 %

5. Any contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(v); 1 None
6. Any modifications to a licensee's current method providing ,

financial assurance occurring since the last submitted report. l None i

7. Any material changes to trust agreements.

None l

Additional Site-Specific Cost Information S in Millions l

8. TLG Cost Study (1997 dollars)

Total Project (Decommission in 2015) $ 1,048.7 ,

Scope Excluded from NRC calculations S 332.0 l Total NRC Decommissioning Costs $ 716.7 NRC Decommissioning Costs Escalated to 1999 $ 744.3

9. CPUC Submittal (1999 dollars) i Total Project (Decommission in 2015) $ 1,284.2 Scope Excluded from NRC calculations S 406.6 Total NRC Decommissioning Costs $ 877.6 The cost differential between the TLG Study and the CPUC submittal is that the TLG estimate does not include contingency for financial risk. Financial risk includes, but is not limited to:

. Costs associated with delays in approval of the decommissioning plan

. Changes in the project work scope from the baseline estimate including discovery of unexpected levels of contaminants

. Contamination in places not previously expected

. Regulatory changes

. Policy decisions at the federal and state level which could affect the Utility's ability or timeframe to process certain waste forms for disposal

. Changes in the cost of disposal of low-level radioactive waste 2

Enclosure 2 DCL-99-038 HBL-99-004 NRC Decommissioning Funding Status Report Humboldt Bay Power Plant - Unit 3 (220 MWt)

As provided in 10 CFR 50.75(f)(1), each power reactor licensee is required to report to the NRC on a calendar year basis, beginning on March 31,1999, and every year thereafter, on the status of its decommissioning funding for each reactor or share of l reactor it owns.

l $ in Millions

1. The minimum decommissioning fund estimate, l pursuant to 10 CFR 50.75 (b) and (c) .  !

January 1999 dollars $ 352.7  !

i 1 I

(HBPP is a shufJown unit with a Site-Specific Cost Study, therefore the minimum decommissioning fund estimate is based on the Site-Specific Cost Study shown in item 8 of this enclosure.)

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2. The amount accumulatad at the end of the calendar year preceding the date of the report for items included in 10 CFR 50.75 (b) and (c). (Alternatively, the total amount accumulated at the end of the calendar year preceding the date of the report can be reported here if the cover letter transmitting tne report i provides the total esfmate and indicates what portion of that estimate is for items i ot included in 10 CFR 50.75 (b) and (c)). i Market Value (December 1998 dollars) $ 202.5 1
3. A schedule of the annual amounts remaining to be collected for items in 10 CFR 50.75 (b) and (c). (Alternatively, the annual amounts remaining to be collected can include items beyond those required in 10 CFR 50.75 (b) and (c) if the cover letter transmitting the report provides a total cost estimate and  !

indicates what portion of that estimate is for items that are not included in 10 CFR 50.75 (b) and (c)).  !

Amount remaining $ 0.0 Number of years to cr.: lect N/A l

' The NRC formulas in 10 CFR 50.75(c) include only those decommissioning costs incurred by licensees i to remove a facility or site safely from service and reduce residual radioactivity to levels that permit: (1) release 'f the property for unrestricted use and termination of the license; or (2) release of the property under restricted conditions and termination of the license. The cost of dismantling or demolishing non-radiological systems and structures is not included in the NRC decommissioning cost estimates. The costs of managing and storing spent fuel on site until transfer to DOE are not included in the cost formulas.

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l Enclosura 2 DCL-99-038 HBL-99-004

4. The assumptions used regarding escalation in decommissioning cost, rates of earnings on decommissioning funds, and rates of other factors used in funding projections; Escalation in decommissioning costs 5.5%

Rate of Return on Qualified Trust 6.1%

Rate of Return on Non-Qualified Trust 5.21 %

5. Any contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(v);

None

6. Any modifications to a licensee's current method providing financial assurance occurring since the last submitted report.

None

7. Any material changes to trust agreements. j None  !

i Additional Site-Specific Cost Information

$ in Millions 1

8. TLG Site-Specific Cost Study (1997 dollars)

(Excludes CPUC disallowed scope) l Total Project (Decommission in 2015) $ 165.9 Scope Excluded from NRC Calculations $ 2.8 Total NRC Decommissioning Costs $ 163.1 NRC Decommissioning Escalated to 1999 $ 169.6

9. CPUC Submittal (1999 dollars)

Total Project (Decommission in 2015) $ 200.9 Scope Excluded from NRC calculations $ 3.4 Total NRC Decommissioning Costs $ 197.5 The cost differential between the TLG Study and the CPUC Submittal is that the TLG estimate does not include contingency for financial risk. Financial risk includes but is not limited to:

. Costs associated with delays in approval of the decommissioning plan

. Changes in the project work scope from the baseline estimate including discovery of unexpected levels of contaminants

. Contamination in places not previously expected

. Regulatory changes

. Policy decisions at the federal and state level which could affect the Utility's ability or timeframe to process certain waste forms for disposal

. Changes in the cost of disposti of low-level radioactive waste 2

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