L-HU-05-008, Decommissioning Funding Status Reports

Decommissioning Funding Status Reports

ML051110731
Person / Time
Site:	Monticello, Palisades, Kewaunee, Point Beach, Prairie Island, Duane Arnold
Issue date:	03/31/2005
From:	Weinkam E Nuclear Management Co
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
L-HU-05-008
Download: ML051110731 (11)

Text

NMC Committed to NuclearExcellence )

Nuclear Management Company, LLC March 31, 2005 L-HU-05-008 10 CFR 50.75(f)(1)

U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, D.C. 20555-0001 Duane Arnold Energy Center Docket 50-331 License No. DPR-49 Kewaunee Nuclear Power Plant Docket 50-305 License No. DPR-43 Palisades Nuclear Plant Docket 50-255 License No. DPR-20 Monticello Nuclear Generating Plant Docket 50-263 License No. DPR-22 Point Beach Nuclear Plant Units I and 2 Dockets 50-266 and 50-301 License Nos. DPR-24 and DPR-27 Prairie Island Nuclear Plant Units 1 and 2 Dockets 50-282 and 50-306 License Nos. DPR-42 and DPR-60 Decommissioning Funding Status Reports The enclosed decommissioning funding status reports are being submitted in accordance with 10 CFR 50.75, -Reporting and Recordkeeping for Decommissioning Planning,"

Paragraph (fX1), for the aforementioned plants. As holder of the plant operating licenses, Nuclear Management Company, LLC is submitting these reports on behalf of the plant owners and co-owners identified in each respective report. The financial information presented herein, current as of December 31,2004, reflects information provided to Nuclear Management Company, LLC by each respective plant owner or co-owners.

This letter contains no new commitments and no revisions to existing commitments.

EwrJ.

eina

rector, y Services Nuclear Management Company, LLC Enclosures cc:

Administrator, Region l1l, USNRC Project Managers, above listed plants, USNRC NRC Resident Inspectors, above listed plants, USNRC 700 First Street

• Hudson, Wisconsin 54016 Telephone: 715.377.3300 www.nmcco.com 1 D

A4 ENCLOSURES DECOMMISSIONING FUNDING STATUS REPORTS Enclosure Owner(s)

Plant I

Consumers Energy Company Palisades (PNP) 2 Wisconsin Electric Power Company Point Beach 1 (PBNP1) 3 Wisconsin Electric Power Company Point Beach 2 (PBNP2) 4

a. Wisconsin Public Service Corp Kewaunee (KNPP)

b. Wisconsin Power & Light Company (WP&L) 5 Xcel Energy Prairie Island 1 (PH1) 6 Xcel Energy Prairie Island 2 (P12) 7 Xcel Energy Monticello (MNGP) 8

a. Interstate Power and Light (IPL)

Duane Arnold (DAEC)

b. Central Iowa Power Cooperative (CIPCO)

c. Corn Belt Cooperative (Corn Belt) 9 PAGES FOLLOW Page 1 of 10

ENCLOSURE I Consumers Energy Company Palisades Nuclear Plant Docket No. 50-255 License No. DPR-20 Decommissioning Funding Status Report As provided in 10 CFR 50.75(0(1), each power reactor licensee is required to report to the NRC on a calendar year basis beginning March 31, 1999, and every two years thereafter on the status of its decommissioning funding for each reactor or share of reactor it owns.

1.

The minimum decommissioning fund estimate pursuant to 10 CFR 50.75(b) and (c) l $351,1 99,040 l

2.

The amount accumulated at the end of the calendar year preceding the date of the report.

Total Extemal l 1

l Funds l $522,590,585

3.

A schedule of the annual amounts remaining to be collected and deposited in external sinking fund as approved by Michigan Public Service Commission (MPSC) in 1999.

Annual Annuity Years to Collect

$5,500,000 3 yrs 4.

Assumptions used regarding escalation in decommissioning costs, rate of earnings on decommissioning funds and rates of other factors used in funding projections.

Plant Owner (% Ownership)

Rafe of Escalation Real Rate of Earnings Factor Return (Nominal Rate (Inflation)

(Projected)

Of Retum)

Consumers Energy Company (100%)

6.4%

4.54%

1.86%

Basis for Allowance:

The Michigan Public Service Commission approved the escalation factor in its December 16, 1999, Order in Case No. U-1 1662.

5.

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

Consumers Energy has not relied on contract obligations to meet its NRC funding assurance.

None

6.

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

Consumers Energy has not modified Its method of providing financial assurance.

None

7.

Any material changes to trust agreements.

Consumers Energy modified its trust agreement to include NRC notification provision per Regulatory Guide 1.159. The Michigan Public Service Commissioning continues to regulate decommissioning funding for Palisades.

None Page 2 of 10

ENCLOSURE 2 Wisconsin Electric Power Company Point Beach Nuclear Plant, Unit I Docket No. 50-266 License No. DPR-24 Decommissioning Funding Status Report 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.

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

$316,176K, 000l

2.

The amount accumulated at the end of the calendar year preceding the date of the report.

3.

A schedule of the annual amounts remaining to be collected.

4.

Assumptions used regardina escalation in decommis Pre-Tax External l $365,659,295 Annual Years to Annuity Collect

$9,963,385 6 yrs

sionina costs, rate of earnings on decommissioning funds and rates of other factors used in funding projections.

Plant Owner (% Ownership)

Rate of Escalation Real Rate of Earnings Factor Return (Nominal Rate (Inflation)

(Projected)

Of Return)

Wisconsin Electric Power Company (100%)-Point Beach Unit 1 6.31%

6.02%

0.29%

Basis for Allowance:

Wisconsin Electric Power Company average Escalation Factor is 6.02%.

This composite rate is based on rates approved by the Public Service Commission, Wisconsin.

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 method of providing financial assurance occurring since the last submitted report.

Wisconsin Electric continues to use the external sinking fund method of providing decommissioning funding assurance.

None

7.

Any material changes to trust agreements.

The Point Beach Decommissioning Trust Agreement was restated In 2003 to Include NRC notification provision per Regulatory Guide 1.159.

None Page 3 of 10

ENCLOSURE 3 Wisconsin Electric Power Company Point Beach Nuclear Plant, Unit 2 Docket No. 50-301 License No. DPR-27 Decommissioning Funding Status Report 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.

1.

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

$316,110,000

2.

The amount accumulated at the end of the calendar year preceding the date of the report.

3.

A schedule of the annual amounts remaining to be collected.

r Pre-Tax ll External

$372,649,819 l Annual Years to Annuity Collect

$7,630,923 8 yrs

4.

Assumptions used regarding escalation in decommissioning costs, rate of earnings on decommissionina funds and rates of other factors used in funding Droiections.

Plant Owner (% Ownership)

Rate of Escalation Real Rafe of Earnings Factor Return (Nominal Rate (Inflation)

(Projected)

Of Return)

Wisconsin Electric Power Company (100%)-Point Beach Unit 2 6.31%

6.02%

0.29%

Basis for Allowance:

Wisconsin Electric Power Company average Escalation Factor is 6.02%.

This composite rate is based on rates approved by the Public Service Commission, Wisconsin.

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 method of providing financial assurance occurring since the last submitted report.

Wisconsin Electric continues to use the external sinking fund method of providing decommissioning funding assurance.

None

7.

Any material changes to trust agreements.

The Point Beach Decommissioning Trust Agreement was restated In 2003 to include NRC notification provision per Regulatory Guide 1.159.

None Page 4 of 10

ENCLOSURE 4 Wisconsin Public Service Corporation & Wisconsin Power & Light Company Kewaunee Nuclear Power Plant Docket No. 50-305 License No. DPR-43 Decommissioning Funding Status Report 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.

l

1.

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

$ 323,457,000

2.

The amount accumulated at the end of the calendar year Drecedina the date of the report.

3.

4.

Plant Owners Ownership %

External Funds Wisconsin Public Service Corp. (WPSC) 59.0%

$344,479,730 Wisconsin Power & Light Company (WP&L) 41.0%

$252,328,377 Total Pre-Tax:

$596,808,107 A schedule of the annual amounts remaining to be collected.

Plant Owners Annual Annuity Years to Collect (a)

Wisconsin Public Service Corp. (WPSC)

$0.00 0 yrs Wisconsin Power & Light Company (WP&L)

$0.00 o yrs Total

$0.00 0yrs (a) See Item 6 below.

Assumptions used regarding escalation in decommissioning costs, rate of earnings on decommissioning funds and rates of other factors used in funding projections.

Plant Owner (% Ownership)

Rate of Escalation Real Rate of Earnings Factor Return Wisconsin Public Service Corp. (59%)

4.95%

6.08%

(1.13%)

Wisconsin Power & Light (41%)

5.80%

6.50%

(0.70%

Basis for Allowance:

These escalation rates are based on labor, energy, burial and other, rates approved by the Public Service Commission, Wisconsin.

5.

Any contracts upon which the licensee is relying pursuant to10 CFR 50.75(e)(1)(v).

There are no current contracts being relied upon pursuant to 10 CFR 50.75(e)(1)(v) to decommission KNPP.

6.

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

Pending the sale of KNPP, WPSC's combined FERC & PSCW funding requirements are not being collected in rates nor are being contributed to the trust, per rulings from both commissions.

7.

Any material changes to trust agreements.

WPSC and WP&L amended its trust agreements to include NRC notification provision per Regulatory Guide 1.159.

None None None Page 5 of 10

ENCLOSURE 5 Xcel Energy Prairie Island Generating Plant Unit I Docket No. 50-282 License No. DPR-42 Decommissioning Funding Status Report 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 March 31, 1999, and every two years thereafter on the status of its decommissioning funding for each reactor or share of reactor it owns.

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

[

$319, 600,000

2.

The amount accumulated at the end of the calendar year preceding the date of the report.

These funds are being transferred to the external fund on a prescribed schedule, per MPUC Docket# E-0021M-02-1766.

3.

A schedule of the annual amounts remaining to be collected.

External

$279,220,358 Internal

$17,574,226 Total

$296,774,584 Annual Years to Annuity Collect

$22,434,048 8.8 yrs 4.

Assumptions used regarding escalation in decommissioning costs, rate of earnings on decommissioning funds and rates of other factors used in funding projections.

Plant Owner (% Ownership)

Rate of Escalation Real Rate of Earnings Factor Return (Nominal Rate (Inflation)

(Projected)

Of Return)

Xcel Energy (100%)- Prairie Island 1 5.5%

4.19%

1.31%

Basis for Allowance:

Xcel Energy files a triennial decommissioning study with the Minnesota Public Utilities Commission for approval. A portion of the study is dedicated to an internal analysis of inflation factors surrounding the various components necessary to perform the decommissioning function. The analysis utilizes long-range inflation projections published by Global Insight, the Consumer Price Index, and the Chained Price Index for Gross Domestic Product, as well as other forecasted data.

5.

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

6.

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

7.

Any material changes to trust agreements.

Trust agreement amended to Include NRC notification provision per Regulatory Guide 1.159.

None None None Page 6 of 10

ENCLOSURE 6 Xcel Energy Prairie Island Generating Plant Unit 2 Docket 50-306 Ucense DPR-60 Decommissioning Funding Status Report 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 March 31, 1999, and every two years thereafter on the status of its decommissioning funding for each reactor or share of reactor it owns.

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

$319,600,000 l

2. The amount accumulated at the end of the calendar year preceding the date of the report.

These funds are being transferred to the external fund on a prescribed schedule, per MPUC Docket# E-002/M-02-1766.

3. A schedule of the annual amounts remaining to be collected.

External

$295,676,538 l Internal

$16,502,608 Total

$312,179,146 Annual Years to Annuity Collect

$23,093,520 9.8 yrs

4. Assumptions used regarding escalation in decommissioning costs, rate of earnings on decommissioning funds and rates of other factors used in funding projections.

Plant Owner (% Ownership)

Rate of Escalation Real Rate of Earnings Factor Return (Nominal Rate (Inflation)

(Projected)

Of Return)

Xcel Energy (100%)- Prairie Island 2 5.5%

4.19%

1.31%

Basis for Allowance:

Xcel Energy files a triennial decommissioning study with the Minnesota Public Utilities Commission for approval. A portion of the study is dedicated to an internal analysis of inflation factors surrounding the various components necessary to perform the decommissioning function. The analysis utilizes long-range inflation projections published by Global Insight, the Consumer Price Index, and the Chained Price Index for Gross Domestic Product, as well as other forecasted data.

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

6.

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

7. Any material changes to trust agreements.

Trust agreement amended to include NRC notification provision per Regulatory Guide 1.159.

None None None Page 7 of 10

ENCLOSURE 7 Xcel Energy Monticello Generating Plant Docket No. 50-263 License No. DPR-22 Decommissioning Funding Status Report 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 March 31, 1999, and every two years thereafter on the status of its decommissioning funding for each reactor or share of reactor it owns.

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

l $412,600,0010l

2.

The amount accumulated at the end of the calendar year preceding the date of the report.

These funds are being transferred to the external fund on a prescribed schedule, per MPUC Docket# E-0021M-02-1766.

3.

A schedule of the annual amounts remaining to be collected.

External

$343,564,975 Internal

$33,512,074 Total

$377,077,049 Annual Annuity Years to Collect

$35,054,124 5.75 yrs 4.

Assumptions used regarding escalation in decommissioning costs, rate of earnings on decommissioning funds and rates of other factors used in funding projections.

Plant Owner (% Ownership)

Rate of Escalation Real Rate of Earnings Factor Return (Nominal Rate (Inflation)

(Projected)

Of Return)

Xcel Energy (100%)- Monticello 5.5%

4.19%

1.31%

Basis for Allowance:

Xcel Energy files a triennial decommissioning study with the Minnesota Public Utilities Commission for approval. A portion of the study is dedicated to an internal analysis of inflation factors surrounding the various components necessary to perform the decommissioning function. The analysis utilizes long-range inflation projections published by Global Insight, the Consumer Price Index, and the Chained Price Index for Gross Domestic Product, as well as other forecasted data.

5.

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

6.

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

7.

Any material changes to trust agreements.

Trust agreement amended to Include NRC notification provision per Regulatory Guide 1.159.

None None None Page 8 of 10

a ENCLOSURE 8 IPL, CIPCO & Corn Belt Duane Arnold Energy Center Docket No. 50-331 License No. DPR-49 Decommissioning Funding Status Report 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 March 31, 1999, and every two years thereafter on the status of its decommissioning funding for each reactor or share of reactor it owns.

1. The minimum decommissionina fund estimate Dursuant to 10 CFR 50.75(b) and (c).

2.

Utility (% Ownership)

NRC Minimum IPL (70%)

$291,651,660 CIPCO (20%)

83,329,046 Comn Belt (10%)

41,664,522

§

~Total

$416,64.2 The amount accumulated at the end of the calendar year preceding the date of the report.

Utility (% Ownership)

Internal l

External Total IPL (a) (b)

(70%)

$21,709,000

$175,401,574

$197,110,574 CIPCO (b)

(20%)

19,182,112 32,503,586 51,685,698 Corn Belt (a) (b)

(10%)

7,204,320 16,584,154 23,788,474 Total

$48,095,432

- $224,489,314

$272,584,746 (a) IPL & Corn Belt are not relying on Internal Fund Reserve for purposes of meeting NRC decommissioning funding assurance requirements.

(b) These funds have been invested for purposes of funding decommissioning.

3.

4.

Schedule of the annual amounts remaining to be collected. (Beginning 2005 & Ending 2014)

Utility (% Ownership)

Annual Annuity Projected (a)

Funds Ending 2014 IPL (70%)

$13.5 to $13.8 mil

$366,861,719 CIPCO (20%)

$3.2 mil 114,354,783 Corn Belt (10%)

$1.1 to $1.7 mil 71,966,867 Total

$17.8 to $18.7mil

$553,183,369 (a) Actual annual contributions to the external sinking fund will vary based upon reassessment of owner's decommissioning funding obligations in light of NRC requirements, actual inflation, actual fund earnings, and other factors.

Assumptions used regarding escalation in decommissioning costs, rate of earnings on decommissioning funds and rates of other factors used in funding projections.

Plant Owner (% Ownership)

Rate of Escalation Real Rate of Earnings Factor Retum (Nominal Rate (Inflation)

(Projected)

Of Return)

IPL (a)

(70%)

6.39%

2.9%

2%

CIPCO (b)

(20%)

8%

4%

4%

Corn Belt (c) (10%)

10%

5%

5%

Basis for Allowance:

(a) The Iowa Utility Board has the regulatory authority for approving the rate of earnings and escalation factor. The real rate of return allowed by 10 CFR 50.75 is 2%.

Page 9 of 10

04/21/2005 08 09 FAX 7153773314 NUCLEAR MANAGEMENT 16 0 0 1 /0 0 1 ENCLOSURE 8 cont.

(b) Central Iowa Power Cooperative (CIPCO) is a tax-exempt cooperative under IRS section 501 c(1 2). This exempt status allows for a higher rate of earnings that results in higher projected real rates of return. CIPCO's rates are not regulated by any state or federal agency. CIPCO's rates are determined annually based on a budget approved by the Board of Directors. If the cooperative does not obtain the projected earnings rates on the decommissioning fund, it has the ability to increase future funding to meet the decommissioning obligation.

(c) Corn Belt Cooperative is a tax-exempt cooperative under IRS section 501c(12). This exempt status allows for higher rate of earnings that results in higher projected real rates of return. Corn Belt's rates are not regulated by any state or federal agency. Corn Belt's rates are determined annually based on a budget approved by the Board of Directors. If the cooperative does not obtain the projected earnings rates on the decommissioning fund, it has the ability to increase future funding to meet the decommissioning obligation.

5.

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

None IPL, CIPCO and Corn Belt are not relying upon any long term contract for purposes of providing decommissioning funding within the meaning of 10 CFR 50.75(e)(1)(v).

6.

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

None IPL, CIPCO & Corn Belt continue to use the external sinking fund method of providing decommissioning funding assurance.

5.

Any material changes to trust agreements.

None IPL, CIPCO and Corn Belt amended their respective trust agreements to include NRC notification provision per Regulatory Guide 1.159.

CIPCO trust agreements were modified in 2003 to transfer trustee responsibilities to Citicorp Trust Bank.

Corn Belt's trustee changed name due to merger. Corn Belt's investment management responsibilities were transferred to Northwinds Marketing Group, LLC.

Page 10 of 10