IR 05000255/2024004
| ML25041A225 | |
| Person / Time | |
|---|---|
| Site: | Palisades  |
| Issue date: | 02/14/2025 |
| From: | Dave Hills NRC/RGN-III/DRSS |
| To: | Mlynarek M Holtec Decommissioning International |
| References | |
| IR 2024004 | |
| Download: ML25041A225 (1) | |
Text
SUBJECT:
PALISADES NUCLEAR PLANT - NRC INSPECTION REPORT NOS. 05000255/2024004
Dear Mike Mlynarek:
On December 31, 2024, the U.S. Nuclear Regulatory Commission (NRC) completed an inspection at Palisades Nuclear Plant. On January 08, 2025, the NRC inspectors discussed the results of this inspection with Mike Mlynarek, Site Vice President, and other members of your staff. The results of this inspection are documented in the enclosed report.
During the inspection, the NRC inspectors reviewed the following aspects of onsite activities:
fire protection and decommissioning performance. The inspection consisted of an examination of activities at the site as they relate to safety and compliance with the Commissions rules and regulations.
Based on the results of this inspection, the NRC identified one Severity Level IV violation of NRC requirements. However, because of the very low safety significance and because the issue was entered into your Corrective Action Program (CAP), the NRC is treating the issue as a Non-Cited Violation (NCV), in accordance with Section 2.3.2 of the NRC's Enforcement Policy.
In addition, One Unresolved Item (URI) was opened to seek program office support in evaluating use of the decommissioning trust fund during a restart initiative.
If you contest the violation or severity of the violation, you should provide a response within 30 days of the date of this inspection report, with the basis for your denial, to the U.S. Nuclear Regulatory Commission, ATTN: Document Control Desk, Washington, DC 20555-0001, with copies to the Regional Administrator, Region III; and the Director, Office of Enforcement.
February 14, 2025 This letter, its enclosure, and your response (if any) will be made available for public inspection and copying at http://www.nrc.gov/reading-rm/adams.html and at the NRC Public Document Room in accordance with Title 10 of the Code of Federal Regulations (CFR) 2.390, Public Inspections, Exemptions, Requests for Withholding.
Sincerely, David E. Hills, Chief Decommissioning, Reactor, and ISFSI HP Branch Division of Radiological Safety and Security Docket No: 50-255 License No: DPR-20
Enclosure:
IR Nos. 05000255/2024004
REGION III==
Docket No:
50-255 License No:
DPR-20 Report No:
05000255/2024004 Licensee:
Holtec Decommissioning International, LLC Facility:
Palisades Nuclear Plant Location:
Covert, MI Inspection Dates:
October 1, 2024, to December 31, 2024 Inspectors:
Valerie Myers, Sr Health Physicist Approved by:
David E. Hills, Chief Decommissioning, Reactor, and ISFSI HP Branch Division of Radiological Safety and Security
EXECUTIVE SUMMARY Palisades Nuclear Plant NRC Inspection Report Nos. 05000255/2024004(DRSS)
This U.S. Nuclear Regulatory Commission (NRC) inspection was a routine, announced inspection of decommissioning activities being conducted at the facility. A brief summary of the areas reviewed are described below.
An effective decommissioning Fire Protection Program was maintained and implemented that reasonably prevented fires; provided the capability to rapidly detect, control, and extinguish fires that could result in radiological hazards; and ensured the risk of fire-induced hazards to the public, environment, and plant personnel were minimized.
Decommissioning Performance and Status Review
One Severity Level IV NCV of 10 CFR 50.82(a)(8)(i) was identified because Holtec Decommissioning International (HDI) used the Decommissioning Trust Fund (DTF) for expenses that were not legitimate decommissioning activities. One Unresolved Item (URI)
was opened to address questions related to use of the DTF during a restart initiative.
Report Details Summary of Facility Status The Palisades Nuclear Plant is a permanently shut-down and defueled power reactor. During this inspection period, the licensee did not conduct any major decommissioning activities as defined in 10 CFR 50.2. However, the licensee was performing restart related activities during this period.
4.0 Fire Protection Program at Permanently Shut down Reactors (IP 64704)
4.1 Inspection Scope The purpose of this portion of the inspection was to evaluate the effectiveness of the fire protection program to ensure adequate protection from fire-induced release of radioactive material.
4.2 Observations and Findings In January 2024 Palisades Nuclear Plant transitioned its fire protection program to an incipient fire brigade consistent with reduced risk at the site. The inspectors reviewed fire protection program implementing procedures to assess whether this change was implemented effectively across these procedures. The inspectors performed walkdowns of the auxiliary building to verify fire protection equipment was available as required by the fire protection plan and that combustibles were controlled. In addition, the inspectors reviewed maintenance and testing of various detection and suppression systems.
Training records were reviewed against several shift crews to verify that each shift had the required fire brigade qualified individual. The inspectors reviewed various corrective action program documents to ensure issues were being identified and corrected at the appropriate threshold.
No findings were identified.
4.3 Conclusions An effective decommissioning Fire Protection Program was maintained and implemented that reasonably prevented fires; provided the capability to rapidly detect, control, and extinguish fires that could result in radiological hazards; and ensured the risk of fire-induced hazards to the public, environment, and plant personnel were minimized.
5.0 Decommissioning Performance and Status Review at Permanently Shut down Reactors (IP 71801)
5.1 Inspection Scope The purpose of this portion of the inspection was to evaluate the use of the Palisades Nuclear Plant DFT.
5.2 Observations and Findings During NRC review of the most recent annual financial assurance report, the NRC noted that there was an apparent increase of approximately $50 million in the estimated decommissioning costs in the spent fuel management area. The inspectors discussed this variance with the licensee and reviewed a breakdown of the estimated costs as compared to the original estimate. The approximate values for major contributors to the increase in decommissioning costs in the spent fuel management area included 1) $20 million for ancillary equipment that HDI had not incorporated into its initial estimate as it had planned to use the equipment from another HDI site; however, this equipment is in use at the other site, 2) $12 million for evaluations, licensing, and receipt of canisters designed for high heat load to allow for fuel removal earlier than initially planned, 3) $5 million for additional containers for damaged fuel, and 4) $9 million for the movement of spent fuel from the pool to dry fuel storage, based on lessons learned from other HDI sites that have completed these activities. The inspectors did not identify any issues with these expenditures as the licensee was granted an exemption by letter from the NRC dated December 13, 2021 (ML21286A294 & ML21286A506), to allow use of the DTF for spent fuel management. Further, the NRC concluded in its annual financial assurance report review dated September 18, 2024 (ML24240A169), that the licensee continues to satisfy the decommissioning funding assurance requirements of 10 CFR 50.82. The NRC will continue to perform these annual reviews as future reports are submitted to verify continued adequate funding to complete all NRC-required radiological decommissioning activities.
As Palisades was an industry first in pursuing restart after both 10 CFR 50.82(a)(1)
certifications were filed, the NRC inspectors opted to perform a more in-depth review of DTF expenditures to ascertain how the licensee distinguished decommissioning versus restart activities for that purpose. The inspectors requested information regarding withdrawals made from the Palisades DTF from October 1, 2023, to October 28, 2024.
In March, May, and October of 2024, HDI made withdrawals from the DTF totaling approximately $105 million. These withdrawals were made to reimburse HDI for expenditures HDI incurred from June 28, 2022, through February 2024. The inspectors reviewed invoice descriptions to assess whether the DTF had been used for activities specifically related to the restart initiative. The inspectors did not identify any withdrawals for restart specific activities.
The inspectors determined that the major contributors to the above $105 million included about $56 million related to the ongoing dry fuel storage campaign, which as indicated above was an allowed Palisades DTF expense. About $18 million was for site security, about $13 million was for payroll, and the remainder consisted of expenditures such as electric bills, taxes, environmental monitoring, contract labor force, rental equipment, calibration services, janitorial services, etc. These other expenditures, focused on maintaining the site, supported both decommissioning and restart efforts. The inspectors considered the following circumstances in further evaluating the licensees treatment of these site maintenance expenditures:
- In a letter to the NRC dated February 1, 2023 (ML23032A399), the licensee outlined a proposed regulatory path for the reauthorization of power operations.
- In a letter to the NRC dated September 28, 2023 (ML23271A140), the licensee submitted a request for an exemption from certain requirements in 10 CFR 50.82 to allow for restarting the plant after entering decommissioning. Subsequent to this exemption request, the licensee has submitted various license amendment requests to reauthorize power operations.
- In a letter dated April 9, 2024 (ML24100A689), the licensee noted that on March 27, 2024, the Department of Energy announced issuance of conditional commitment for a DOE load guarantee to Holtec Palisades, and accordingly HDI was now directing most of its Palisades Nuclear Power Plant resources and would be adding substantial additional resources to support the restart project. The letter informed the NRC of HDIs intent to depart from the schedule described in its Post Shutdown Decommissioning Activities Report in order to support plant restart and provided an anticipated schedule for exiting decommissioning.
- As the facility was still in decommissioning status, the licensee continued to incur expenses to the DTF for what it considered legitimate decommissioning activities. As the pace of in-plant restart activities picked up, the licensee later verbally informed the NRC staff that it had decided to stop incurring expenses against the DTF as of June 1, 2024. The inspectors noted examples though of the licensee continuing to reimburse itself from the DTF for expenses incurred prior to that date.
While these site maintenance expenditures were typically legitimate DTF expenses for a site in decommissioning, the inspectors questioned the legitimacy of continuing to rely on DTF funds for these activities for a plant that was focusing on restart, and at what point should that transition away from the DTF use occur. This is considered an unresolved item (URI) pending program office support in evaluating and providing clarification.
(URI 05000255/2024004-01, Use of Decommissioning Trust Fund During Restart Initiative)
In Inspection Report No. 05000255/2023004 dated February 20, 2024 (ML24045A147),
the NRC identified one Severity Level IV Non-Cited Violation involving the licensees use of the Palisades DTF for expenses that were not legitimate decommissioning activities.
This included expenses that were clearly related to plant restart that had been inadvertently mis-coded as well as voluntary contributions to community events/support activities. Subsequent to the NRCs identification of the NCV, the licensee performed its own external audit of the use of the DTF that included DTF withdraw packages created from June 2022 to January 2024. This audit identified withdrawals from the DTF for union dues that were funded from another source, hence were duplicative and additional charitable contribution examples, both of which were not considered legitimate uses of the DTF. The licensee initiated a condition report to document the identified issues and issued a credit letter to the DTF to include the identified amount plus interest.
However, upon review of DTF withdrawals during the inspection, the inspectors identified additional duplicative union dues withdrawals that were not included in the findings from the external audit. After discussion with HDI and the auditor, it was determined that the audit report had inadvertently failed to identify all the duplicative union dues withdrawals. HDI placed this into the CAP as PAL-04802 with actions to update the audit and credit the DTF as necessary. These expenditures constituted a violation of NRC requirements.
Violation 10 CFR 50.82(a)(8)(i) states, in part, that decommissioning trust funds may be used by licensees if the withdrawals are for expenses for legitimate decommissioning activities consistent with the definition of decommissioning in 10 CFR 50.2.
10 CFR 50.2 defines decommissioning as removing a facility or site safely from service and reducing residual radioactivity to a level that permits (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.
Contrary to the above, between June 2022 and October 2024, HDI used the Palisades DTF for expenses that were not legitimate decommissioning activities. Specifically, HDI used funds to purposes that were not related to removing the facility or site safely from service and reducing residual activity to a level that permits release of the property for either unrestricted or restricted conditions and termination of the license. These included withdrawals for duplicate union dues and charitable contributions.
This violation was determined to be a Severity Level IV violation. The NRC considered NRC Enforcement Policy example 6.3.c.1, dated January 14, 2022, regarding a significant failure to meet decommissioning as required by regulation or license condition for materials sites. Additionally, the NRC considered the legitimacy of use, the dollar amount involved compared to the total DTF amount, and programmatic aspects in making this determination. The NRC determined that the DTF was illegitimately used, that the amount is a small fraction of the Palisades DTF and did not represent a significant failure to meet decommissioning, and that this was not a single failure event, there were numerous occurrences. HDI entered this issue into the CAP as PAL-03705 and PAL-04254 and initiated corrective actions to restore the funds back into the DTF.
Since the licensee placed the deficiency into its CAP, the violation was of very low safety significance, and because the violation was not willful or repetitive, this violation is being treated as an NCV, consistent with Section 2.3.2.a of the NRC Enforcement Policy.
(NCV 05000255/2024004-02, Improper Use of Decommissioning Trust Fund)
5.3 Conclusions One Severity Level IV NCV of 10 CFR 50.82(a)(8)(i) was identified because HDI used the DTF for expenses that were not legitimate decommissioning activities. One URI was opened to address questions related to use of the DTF during a restart initiative.
6.0 Exit Meeting The inspectors presented the results of the inspection to Mike Mlynarek and other members of the Palisades Nuclear Plant staff at an exit meeting on January 08, 2025.
The licensee acknowledged the results presented and did not identify any of the information discussed as proprietary.
ATTACHMENT: SUPPLEMENTAL INFORMATION
SUPPLEMENTAL INFORMATION PARTIAL LIST OF PERSONS CONTACTED William Noval, Director of Regulatory Affairs Troy Geauthreaux, Chief Financial Officer Jim Miksa, Regulatory Assurance Manager INSPECTION PROCEDURES (IPs) USED IP 64704 Fire Protection Program at Permanently Shut down Reactors IP 71801 Decommissioning Performance and Status Reviews at Permanently Shutdown Plants ITEMS OPENED, CLOSED, AND DISCUSSED Opened Type Summary 05000255/2024004-01 URI Use of Decommissioning Trust Fund During Restart Initiative 05000255/2024004-02 NCV Improper Use of Decommissioning Trust Fund Closed Type Summary 05000255/2024004-02 NCV Improper Use of Decommissioning Trust Fund
PARTIAL LIST OF DOCUMENTS REVIEWED The following is a partial list of documents reviewed during the inspection. Inclusion on this list does not imply that the NRC inspectors reviewed the documents in their entirety, but rather that selected sections of portions of the documents were evaluated as part of the overall inspection effort. Inclusion of a document on this list does not imply NRC acceptance of the document or any part of it, unless this is stated in the body of the inspection report.
- FPIP-1; Fire Protection Plan, Organization and Responsibilities; Revision 28
- FPIP-2; Fire Protection Implementing Procedure; Revision 27
- FPIP-4; Fire Protection Systems and Fire Protection Equipment; Revision 44
- FPIP-6; Fire Suppression Training; Revision 26
- WO 50083612; Fire Suppression Valve Operation Test; 06/19/2024
- WO 50083615; Fire Suppression Water System Valve Alignment; 07/24/2024
- WO 50083616; Fire Hose Reel/Rack Valve and Station and Fire Hydrant Hose House Inspection; 09/14/2024
- WO 50083624; K-10 (P-41) Inspection and Preventative Maintenance; 11/28/2023
- WO 52957672; Functional Test of Fire Detection in Containment; 08/30/2023
- PL-TRN24-0232; Initial Incipient Fire Brigade Training; 02/12/2024
- Pre-Fire Plans; Revision 6
- Covert Fire Department Letter of Agreement; 03/27/2024
- Decommissioning Trust Fund Extent of Condition Review; 10/09/2024
- DSP-RA-005; Nuclear Decommissioning Trust Fund Reimbursement; Revision 0
- DTF withdraw invoice files; Dates Pulled 3/27/2024 through 10/28/2024
- Palisades DTF Credit Letter; 10/18/2024 LIST OF ACRONYMS USED ADAMS Agencywide Document Access and Management System CAP Corrective Action Program CFR Code of Federal Regulations DRSS Division of Radiological Safety and Security DTF Decommissioning Trust Fund HDI Holtec Decommissioning International IP Inspection Procedure IR
Inspection Report
Non-Cited Violation
NRC
U.S. Nuclear Regulatory Commission
Unresolved Item