ENOC-09-00024, Decommissioning Funding Assurance Plans

Decommissioning Funding Assurance Plans

ML092260720
Person / Time
Site:	Palisades, Indian Point, Vermont Yankee
Issue date:	08/13/2009
From:	Mccann J Entergy Nuclear Operations, Entergy Operations
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
ENOC-09-00024, FOIA/PA-2010-0090
Download: ML092260720 (14)

Text

Entergy Operations, Inc.

Ent~er~gy Entergy Nuclear Operations, Inc.

440 Hamilton Avenue White Plains, New York 10601 John F. McCann Director Nuclear Safety & Licensing ENOC-09-00024 August 13, 2009 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, DC 20555-0001

SUBJECT:

Decommissioning Funding Assurance Plans Indian Point Nuclear Generating Unit 2 Docket: 50-247 License: DPR-26 Palisades Nuclear Plant Docket: 50-255 License: DPR-20 Vermont Yankee Nuclear Power Station Docket: 50-271 License: DPR-28

References:

1. Entergy letter ENOC-09-00007; "Status of Decommissioning Funding for Plants Operated by Entergy Nuclear Operations, Inc for the Year Ending December 31, 2008," dated March 30, 2009 (ML090920576).

2. NRC letter dated June 18, 2009, regarding Status of Decommissioning Funding Assurance for Indian Point Unit 2 (ML091630533).

3. NRC letter dated June 18, 2009, regarding Status of Decommissioning Funding Assurance for Palisades Nuclear Plant (ML091550675).

4. NRC letter dated June 18, 2009, regarding Status of Decommissioning Funding Assurance for Vermont Yankee Nuclear Power Station (ML091550583).

5. Entergy letter ENOC 09-00022, "Status of Decommissioning Funding Assurance" dated July 6, 2009 (ML091960058).

6. Entergy letter NL-09-068, "Reply to Request for Additional Information Regarding Decommissioning Cost Estimate and Irradiated Fuel Management" dated July 15, 2009 (ML092050204).

Dear Sir or Madam:

Entergy Nuclear Operations, Inc. (Entergy) submitted the biennial report of decommissioning funding status in Reference 1. NRC requested follow up telephone conference calls in References 2, 3, and 4 regarding the decommissioning funding status for the subject plants.

ENOC-09-00024 Page 2 of 3 Entergy letter dated July 6, 2009, Reference 5, confirmed the agreed upon date of August 13, 2009 for Entergy to submit the plans for addressing the current funding status to NRC.

The Attachment 1 Plan for Decommissioning Funding Adjustment for Entergy Nuclear Indian Point Unit 2 (ENIP2) shows that when the July 31, 2009 DTF balance is escalated at the allowable rate and compared against the annual figures for the SAFSTOR period studied in , that an approximately $47.1 million surplus exists at the end of the decommissioning project. Accordingly, ENIP2 concludes that no further action is required at this time to demonstrate adequate funding assurance for decommissioning Indian Point 2.

The Attachment 2 Plan for Decommissioning Funding Adjustment for Palisades Nuclear Plant shows that the increase in trust funds between December 31, 2008 and July 31, 2009, has eliminated any shortfall in the decommissioning funding when compared against the NRC minimum, indicating that there is presently reasonable assurance that funds will be available for the decommissioning process. Accordingly, Entergy Nuclear Palisades (ENP) concludes that no further action is required at this time to demonstrate adequate funding assurance for decommissioning Palisades.

Per the Attachment 3 Plan for Decommissioning Funding Adjustment for Entergy Nuclear Vermont Yankee (ENVY), to address the deficit reflected in Table 1, ENVY plans to put in place a financial assurance mechanism or combination of mechanisms acceptable to the NRC and allowed under 10 CFR 50.75(e)(1) by December 31, 2009, to provide the additional funding necessary to demonstrate adequate funding assurance for decommissioning of Vermont Yankee.

This letter contains one new commitment as documented in Attachment 4. If you have any questions, please contact Mr. Brian Ford at 601-368-5766.

Sincerely, JFM / LAE Attachments

1. Entergy Nuclear Indian Point 2, LLC Indian Point Energy Center, Unit 2, Plan for Decommissioning Funding Adjustment

2. Entergy Palisades, LLC Palisades Nuclear Plant, Plan for Decommissioning Funding Adjustment

3. Entergy Nuclear Vermont Yankee, LLC Vermont Yankee Nuclear Power Station, Plan for Decommissioning Funding Adjustment

4. Regulatory Commitments Enclosure Copy of Enclosure 2 to October 23, 2008 submittal (NL-08-144) cc: next page

ENOC-09-00024 Page 3 of 3 cc:

NRC Regional Administrator, Region I NRC Regional Administrator, Region III NRC NRR Project Manager, Indian Point 2 NRC NRR Project Manager, Palisades NRC NRR Project Manager, Vermont Yankee NRC Resident Inspector's Office, Indian Point 2 NRC Resident Inspector's Office, Palisades NRC Resident Inspector's Office, Vermont Yankee NYS Department of Public Service NYSERDA Michigan Department of Environmental Quality Vermont Department of Public Service Mr. L. Jager Smith, P.E.

ENOC-09-00024 ENTERGY NUCLEAR INDIAN POINT 2. LLC INDIAN POINT ENERGY CENTER, UNIT 2 PLAN FOR DECOMMISSIONING FUNDING ADJUSTMENT On March 30, 2009, Entergy Nuclear Indian Point 2, LLC (ENIP2) submitted its biennial filing for Indian Point Energy Center, Unit 2 (Indian Point 2), pursuant to 10 CFR 50.75(f)

(Accession No. ,ML090920576). On June 18, 2009, the Nuclear Regulatory Commission (NRC) staff sent ENIP2 a letter advising ENIP2 of the need for a telephone conference to discuss the NRC staff's calculations regarding Indian Point 2's decommissioning funding assurance (Accession No. ML091.630533). The telephone conference was held on June 29, 2009. On July 22, 2009, another call was held with the NRC staff that resulted in some of the funding requirement figures being changed, and those changes are reflected in this communication. Also in the staff's letter of June 18, 2009, the staff indicated that if ENIP2 is determined to have a projected decommissioning funding shortfall, it will need to submit a plan to describe how and when the licensee intends to make adjustments to financial assurance mechanisms. This communication addresses the indicated shortfall.

According to the NRC staff's calculations, the staff has concluded that the NRC minimum amount for the 2009 report period for Indian Point Unit 2 is $407,219,844. The staff likewise concluded that the available escalated funding to meet that obligation is $363,279,341, based on the December 31, 2008 Indian Point Unit 2 decommissioning trust fund balances.

The difference in these figures is $43,940,503. ENIP2 has determined that use of a SAFSTOR analysis shows that there is presently reasonable assurance that adequate funds will be available for the decommissioning process in compliance with NRC decommissioning funding assurance rules.

Pursuant to 10 CFR 50.75(e)(1)(i), "A licensee that has prepaid funds based on a site-specific estimate under § 50.75(b)(1) of this section may take, credit for projected earnings on the prepaid decommissioning trust funds, using up to a 2 percent annual real rate of return from the time of future funds' collection through the projected decommissioning period, provided that the site-specific estimate is based on a period of safe storage that is specifically described in the estimate." ENIP2 understands that a facility specific analysis may be used for demonstrating the adequacy of decommissioning funds, provided that "the NRC-required cost estimate for decommissioning costs as defined in 10 CFR 50.2 is equal to or greater than the amount stated in the formulas in 10 CFR 50.75(c)(1) and (2) as the basis for justifying a higher than minimum funding level." (Regulatory Guide 1.159, section 1.1.1; Draft Regulatory Guide-1229, section 1.1.1.) ENIP2 also understands that NRC should be provided the analysis, and that the analysis should include data for each year of the analysis.

On October 23, 2008, ENIP2 submitted a site specific decommissioning cost estimate to the NRC in conjunction with its preliminary decommissioning cost estimate, and spent fuel management plan under 10 CFR 50.75(f)(3) and 10 CFR 50.54(bb) (Accession No. ML083040378, as supplemented by ENIP2's reply to RAIs on July 15, 2009 (Accession No. ML092050204). That submittal contained separate site-specific decommissioning cost estimates for Indian Point 1 and Indian Point 2. The Indian Point 2 site-specific decommissioning cost 'estimate that was submitted as Enclosure 2 to the October 23, 2008 submittal is provided herewith as an Enclosure. The Indian Point 2 site-specific estimate is based on a period of safe storage that is specifically described in the estimate, namely storage until 2064, at which time the plant will be decommissioned and the site released for 1

ENOC-09-00024 alternative use without restriction. Table 4 in the Indian Point 2 site-specific estimate (page 31 of 38) provides the annual license termination phase expenditures for Indian Point 2 in 2007 dollars. Table 1 below escalates those 2007 dollar figures to 2008 dollars using escalation values obtained from data provided by IHS Global Insight. The decommissioning trust fund (DTF) ending balance is escalated each year by the 2% real growth figure allowed pursuant to 10 CFR 50.75(e)(1)(i).1 The decommissioning trust funds for Indian Point 2 have increased since December 31, 2008, as of July 31, 2009. The July 31, 2009 decommissioning trust fund balance for Indian Point 2 is $326,963,974, compared to the December 31, 2008 balance of $312,390,000.

Table 1 below uses the July 31, 2009 Indian Point 2 decommissioning trust fund balance in lieu of the December 31, 2008 balance, and has escalated the funds during the balance of the first year reported below for only 5 months, as compared to the full year. The analysis in Table 1 indicates that there is now a $47.1 million surplus in 2073 in decommissioning trust funds at the end of radiological decommissioning of Indian Point 2.

TABLE 1 SAFSTOR ANALYSIS FOR INDIAN POINT 2 NRC License Termination Cost, $ Millions 2007$ 2008$

Unit 2 Unit 2 Ending DTF Radiological Radiological Balance 2008 326.964 2009 329.689 2010 336.282 2011 343.008 2012 349.868 2013 11.164 11.637 345.228 2014 49.271 51.257 300.876 2015 25.307 26.287 280.606 2016 3.711 3.879 282.339 2017 3.701 3.868 284.118 2018 3.701 3.868 285.932 2019 3.701 3.868 287.783 2020 3.711 3.879 289.660 2021 3.688 3.855 291.598 2022 3.676 3.842 293.588 2023 3.676 3.842 295.617 2024 3.686 3.853 297.677 2025 3.676 3.842 299.788 2026 3.676 3.842 301.941 2027 3.676 3.842 304.138 2028 3.686 3.853 306.368 1 As indicated in the following paragraph, the fund balance as of July 31,2009 is only escalated for a 5-month period at 2%, or 0.8333% for the year, to account for the use of the July 31, 2009 trust fund balance.

2

ENOC-09-00024 Attachment I Table 1 Continued 2029 3.676 3.842 308.653 2030 3.676 3.842 310.983 2031 3.676 3.842 313.361 2032 3.686 3.853 315.775 2033 3.676 3.842 318.248 2034 3.676 3.842 320.771 2035 3.676 3.842 323.344 2036 3.686 3.853 325.958 2037 3.676 3.842 328.635 2038 3.676 3.842 331.365 2039 3.676 3.842 334.150 2040 3.686 3.853 336.980 2041 3.676 3.842 339.877 2042 3.676 3.842 342.832 2043 3.676 3.842 345.847 2044 3.686 3.853 348.911 2045 3.675 3.842 352.047 2046 3.668 3.834 355.253 2047 3.668 3.834 358.524 2048 3.678 3.845 361.850 2049 3.668 3.834 365.252 2050 3.668 3.834 368.723 2051 3.668 3.834 372.263 2052 3.678 3.845 375.863 2053 3.668 3.834 .379.546 2054 3.668 3.834 383.303 2055 3.668 3.834 387.134 2056 3.678 3.845 391.032 2057 3.668 3.834 395.018 2058 3.668 3.834 399.084 2059 3.668 3.834 403.231 2060 3.678 3.845 407.451 2061 3.668 3.834 411.766 2062 3.668 3.834 416.167 2063 3.668 3.834 420.655 2064 24.751 25.806 403.263 2065 55.625 57.823 353.505 2066 168.560 174.284 186.291 2067 71.834 74.458 115.559 2068 25.113 26.059 91.811 2069 6.046 6.262 87.385 2070 6.046 6.262 82.871 2071 6.046 6.262 78.266 2072 6.547 6.780 73.052 2073 26.485 - 27.426 47.086 659.351 685 1611 3

ENOC-09-00024 As can be seen from the information provided in Table 1 above, the required funding for SAFSTOR decommissioning, $685.2 million, is greater than the NRC formula amount per 10 CFR 50.75(b) and 1(c) of $407.2 million, therefore, the site-specific analysis complies with the requirement from Regulatory Guide 1.159 section 1.1.1 previously discussed. Additionally, ENIP2 is providing the supporting documentation for the SAFSTOR analysis in the form of the site-specific decommissioning report, and that report provides annual figures for the entire analysis.

The foregoing SAFSTOR analysis shows that when the July 31, 2009 DTF balance is escalated at the allowable rate and compared against the annual figures for the SAFSTOR period studied in Attachment 1, that an approximately $47.1 million surplus exists at the end of the decommissioning project. Accordingly, ENIP2 concludes that no further action is required at this time to demonstrate adequate funding assurance for decommissioning Indian Point 2.

4

ENOC-09-00024 ENTERGY NUCLEAR PALISADES. LLC PALISADES NUCLEAR PLANT PLAN FOR DECOMMISSIONING FUNDING ADJUSTMENT On March 30, 2009, Entergy Nuclear Palisades, LLC (ENP) submitted its biennial filing for the Palisades Nuclear Plant (Palisades), pursuant to 10 CFR 50.75(f) (Accession No. ML090920576). On June 18, 2009 the Nuclear Regulatory Commission (NRC) staff sent ENP a letter advising ENP of a telephone conference to discuss the NRC staff's calculations regarding Palisades' decommissioning funding assurance (Accession No. ML091550675).

The telephone conference was held on June 29, 2009. On July 22, 2009, another call was held with the NRC staff that resulted in some of the funding requirement figures being changed, and those changes are reflected in this communication. Also in the staff's letter of June 18, 2009, the staff indicated that if ENP is determined to have a projected decommissioning funding shortfall, it will need to submit a plan to describe how and when the licensee intends to make adjustments to financial assurance mechanisms. This communication addresses the indicated shortfall.

According to the NRC staff's calculations, the staff has concluded that the NRC minimum amount for the 2009 report period for Palisades is $376,574,286. The staff likewise concluded that the available escalated funding to meet that obligation is $365,064,227, based on the December 31, 2008 Palisades decommissioning trust fund balances. The difference in these figures is $11,510,059.

The decommissioning trust. funds for Palisades have increased since December 31, 2008, as of July 31, 2009. The July 31, 2009 decommissioning trust fund balance for Palisades is,

$230,766,009, compared to the December 31, 2008 balance of $218,800,000. Table 1 below replicates the calculation sheet provided to ENP by the NRC, and uses the July 31, 2009 Palisades decommissioning trust fund balance in lieu of the December 31, 2008 balance, and has escalated the funds during the balance of the first year reported below for only 5 months, as compared to the full year. The analysis in Table 1 indicates that there is now a $4,041,547 surplus in the decommissioning trust funds over the NRC minimum.

ENP has determined that the increase in trust funds between December 31, 2008 and July 31, 2009 has eliminated any shortfall in the decommissioning funding when compared against the NRC minimum, indicating that there is presently reasonable assurance that funds will be available for the decommissioning process. Accordingly, ENP concludes that no further action is required at this time to demonstrate adequate funding assurance for decommissioning Palisades.

1

ENOC-09-00024 TABLE 1 Plant name: Palisades Nuclear Plant Month Day Year Year of Biennial: 7 31 2009 Termination of Operation: 3 24 2031 MWth 1986$ ECI Base Lx L..x Px Fx EIx B..-x PWR 2565 $97,572,000 107.6 2.08 0.65 2.24 1.649 1.988 0.13 1.791 0.22 9.872 NRC Mimimum: $376ý574,286 Amount of NRC Minimum/Site Licensee:  % Owned: Specific: Amount in Trust Fund:

I Entergy 100.00% $376,574,286 $230,766,009 Step 1:

Earnings Credit:

Real Rate of Years Left Total Real Rate Trust Fund Balance: Return per year in License of Return: Total Earnings:

$230,766,009 2% 21.65 1.53523 $354,277,816 Total Earnings = Trust Fund balance x (l+RRR)AYears left in license Step 2:

Accumulation:

Real Rate of Value of Annuity per year Return per year Years of Annuity: Total Annuity:

$0 2% 0 $0 Step 3:

Decom Period:

Real Rate of Decom Total Real Rate Total Earnings for Total Earnings: Return per year Period: I of Return: I Decon:

$354,277,816 2% 7 0.14869 .1 $26,338,017 I Total Earnings for Decom = (1/2) x Total Earnings x [(I+RRR)ADecom period - 1]

Total of Steps 1 - 3:

$380,615,833 I Total = Total Earnings + Total Earnings for Decom 2

ENOC-09-00024 ENTERGY NUCLEAR VERMONT YANKEE, LLC VERMONT YANKEE NUCLEAR POWER STATION PLAN FOR DECOMMISSIONING FUNDING ADJUSTMENT On March 30, 2009 Entergy Nuclear Vermont Yankee, LLC (ENVY) submitted its biennial filing for the Vermont Yankee Nuclear Power Station (Vermont Yankee), pursuant to 10 CFR 50.75(f) (Accession No. ML090920576). On June 18, 2009 the Nuclear Regulatory Commission (NRC) staff sent ENVY a letter advising ENVY of a telephone conference to discuss the NRC staff's calculations regarding Vermont Yankee's decommissioning funding assurance (Accession No. ML091550583). The telephone conference was held on June 29, 2009. On July 22, 2009, another call was held with the NRC staff that resulted in some of the funding requirement figures being changed, and those changes are reflected in this communication. Also in the staff's letter, the staff indicated that if ENVY is determined to have a projected decommissioning funding shortfall, it will need to submit a plan to describe how and when the licensee intends to make adjustments to financial assurance mechanisms. This communication includes the licensee's plan to address any shortfall.

According to the NRC staff's calculations, the staff has concluded that the NRC minimum amount for the 2009 report period for Vermont Yankee is $513,385,033. The staff likewise concluded that the available escalated funding to meet that obligation is $425,993,159, based on the December 31, 2008 Vermont Yankee decommissioning trust fund balances.

The difference in these figures is $87,391,874.

The decommissioning trust funds for Vermont Yankee have increased since December 31, 2008, as of July 31, 2009. The July 31, 2009 decommissioning trust fund balance for Vermont Yankee is $402,169,338, compared to the December 31, 2008 balance of

$372,010,000. Table 1 below replicates the calculation sheet provided to ENVY by the NRC, and uses the July 31, 2009 Vermont Yankee decommissioning trust fund balance in lieu of the December 31, 2008 balance, and has escalated the funds during the balance of the first year reported below for only 5 months, as compared to the full year. The analysis in Table 1 indicates that there is now a $58,134,967 nominal deficit in the decommissioning trust funds over the NRC minimum.

To address the deficit reflected in Table 1, ENVY plans to put in place a financial assurance mechanism or combination of mechanisms acceptable to the NRC and allowed under 10 CFR 50.75(e)(1) by December 31, 2009, to provide the additional funding necessary to demonstrate adequate funding assurance for decommissioning of Vermont Yankee. Based on the July 31, 2009 Vermont Yankee decommissioning trust fund balances, combined with the proposed additional financial assurance, the decommissioning funding for Vermont Yankee provides reasonable assurance that adequate funds will be available for decommissioning of the plant, consistent with the use of a combination of methods as described in the NRC regulations at 10 CFR 50.75(e)(1)(iv).

ENVY plans to provide a financial assurance mechanism in an amount calculated using the present value method consistent with the methodology used in the NRC safety evaluations that approved: 1) the transfer of the Millstone Nuclear Power Station, Unit Nos. 1, 2 and 3 to Dominion Nuclear Connecticut, Inc. dated March 9, 2001 (Accession No. ML010160314); 2) the transfer of the operating licenses for the Nine Mile Point Nuclear Station Unit Nos. 1 and 2 to Nine Mile Point Nuclear Station, LLC, dated June 22, 2001 (Accession No. 011520030);

and 3) the transfer of the operating licenses for the Beaver Valley Nuclear Power Station 1

ENOC-09-00024 Units Nos. 1 and 2, the Davis Besse Nuclear Power Station, and the Perry Nuclear Power Plant, to the extent held by certain subsidiaries of FirstEnergy Corp., to the FirstEnergy Nuclear Generation Corp., dated December 16, 2005 (Accession No. ML053460182).

ENVY has determined that a present value sum of $51,356,612, when added to the available funding, will result in total available funding equal to the NRC minimum amount.

Therefore, it is the licensee's plan to put in place a financial assurance mechanism acceptable to the NRC and in accordance with 10 CFR §50.75(e)(1) in an amount equal to or greater than the aforementioned present value sum, based on the July 31, 2009 decommissioning trust fund balance. ENVY plans that such mechanism will be put in place by December 31, 2009.

ENVY expects that the operating license for Vermont Yankee will be renewed by the NRC in late 2009 or early 2010. If the Vermont Yankee license is renewed, ENVY expects that any shortfall in decommissioning funding will be diminished or eliminated. In that event, ENVY expects that it will be appropriate to reevaluate any potential shortfall.

By letter dated July 30, 2007, as supplemented on October 31, 2007, ENVY requested NRC consent to the transfer of the Vermont Yankee license to a new company, Enexus Energy Corporation (Enexus). The NRC approved the license transfer in orders dated July 28, 2008. At such point in time that the license transfer to Enexus occurs, ENVY expects that the aforementioned additional financial assurance mechanism, assuming it has not been otherwise canceled or replaced, will be canceled and replaced with other financial assurance from Enexus, such assurance to be acceptable to the NRC and in accordance with the provisions of 10 CFR §50.75(e)(1).

2

ENOC-09-00024 Attachment 3 TABLE 1 Plant name: Vermont Yankee Power Station Month Day Year -

Year of Biennial: 7 31 2009 Termination of Operation: 3 21 2012 BWR MWth 1912 1 1986$

$121,208,000 ECI 109.5 I Base Lx 2.16 I4 0.65 1I Lx 2.37 I

1 Px 1.649 I

Fx 1.988 I

1 II 0.13 I Ex-1 1.805 1 0.22 I

1 1x 11.198 1

-I 1

I NRC Mimimum: $513,385,033 F Licensee:

Entergy Step 1:

% Owned:

100.00%

-4 Amount of NRC Minimum/Site Specific:

$513,385,033 I Amount in Trust Fund:

$402,169,338 Earnings Credit:

I Real Rate of I Years Left ITotal Real Rate I Trust Fund Balance: Return per year in License of Return: Total Earnings:

$402,169,338 2% 2.64 1.05365 $423,747,478 Total Earnings = Trust Fund balance x (1+RRR)AYears left in license Step 2:

Accumulation:

Real Rate of Value of Annuity per year Return per year Years of Annuity: Total Annuity:

$0 e 2% 0 $0 Step 3:

Decomn Period:

Real Rate of Decorn Total Real Rate -

Total Earnings: Return per year Period: of Return: Total Earnings for Decorn:

$423,747,478 2% 7 0.14869 $31,502,588 Total Earnings for Decom = (1/2) x Total Earnings x [(1+RRR)ADecom period - 1]

Total of Steps 1 - 3:

$455,250,066 Total = Total Earnings + Total Earnings for Decom 3

ENOC-09-00024 Regulatory Commitments This table identifies actions discussed in this letter for which Entergy commits to perform.

Any other actions discussed in this submittal are described for the NRC's information and are not commitments.

TYPE (Check one) SCHEDULED COMMITMENT COMPLETION ONE-TIME CONTINUING DATE ACTION COMPLIANCE (If Required)

1. To address the deficit x December 31, reflected in Table 1, ENVY 2009.

plans to put in place a financial assurance mechanism or combination' of mechanisms acceptable to the NRC and allowed under 10 CFR 50.75(e)(1) by December 31, 2009, to provide the additional funding necessary to demonstrate adequate funding assurance for decommissioning of Vermont Yankee.

1

ENOC-09-00024 Enclosure

! Copy of Enclosure 2 to NL-08-144 Preliminary Decommissioning Cost Analysis for the Indian Point Energy Center, Unit 2 October 2008