LIC-03-0026, Biennial Decommissioning Funding Status Report

Biennial Decommissioning Funding Status Report

ML030640378
Person / Time
Site:	Fort Calhoun
Issue date:	02/28/2003
From:	Ridenoure R Omaha Public Power District
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
LIC-03-0026
Download: ML030640378 (7)

Text

HIPPER Omaha PublicPowerDistnct 444 South 16th Street Mall OtnahaNE 68102-2247 February 28, 2003 LIC-03-0026 U. S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, D.C. 20555

Reference:

Docket No. 50-285

SUBJECT:

Fort Calhoun Station Unit No. 1, 2003 Biennial Decommissioning Funding Status Report.

In accordance with the requirements of 10 CFR 50.75(f), the Omaha Public Power District has attached the Fort Calhoun Station Unit No. 1, 2003 Biennial Decommissioning Funding Status Report.

No commitments are made in this letter. Should you have any questions regarding this matter, please contact Dr. Richard Jaworski at (402) 533-6833.

Sincerely, Operations Attachment c:

S E. W. Merschoff, NRC Regional Administrator, Region IV (w/o Attachment)

A. B. Wang, NRC Project Manager (w/o Attachment)

J. G. Kramer, NRC Senior Resident Inspector (w/o Attachment)

Winston & Strawn (w/o Attachment)

A,o i Employment with Equal Opportunity 4171

February 2003 OMAHA PUBLIC POWER DISTRICT FORT CALHOUN STATION UNIT NO. 1 2003 BIENNIAL DECOMMISSIONING FUNDING STATUS REPORT Based on Nuclear Regulatory Commission (NRC)

Regulation 10 CFR 50.75 (f)

The NRC requires that Omaha Public Power District (OPPD) report by March 31, 2003 and at least once every two years thereafter on the status of its decommissioning funding for as Fort Calhoun Station Unit No. 1. Based on the decommissioning funding requirement outlined in 10 CFR 50.75 (f), OPPD reports the following information:

A. Current Decommissioning Cost Estimate Pursuant to 10 CFR 50.75 (c), the January 2002 estimated minimum decommissioning amount to decommission Fort Calhoun Station Unit No. 1 is $229,348,000. See Attachment A for detailed decommissioning cost calculation.

B. Current Decommissioning Fund Balance The OPPD Decommissioning Fund balance as of December 31, 2002 is $176,650,100.

C. Annual Decommissioning Collections The annual decommissioning collection for 2001 was $3,581,400. There was no annual collection for 2002. (Fort Calhoun Station's scheduled license termination occurs in 2013.)

The revenue source for the collections is "cost-of-service" electric rates. See Attachment B for detail on the annual decommissioning collections from 2001.

D. Rates Used to Escalate Decommissioning Costs and Fund Balances rates The rates used for the escalation of the decommissioning cost estimate and earnings on the Decommissioning Fund are shown in Attachment B. DRI Corporation of Lexington, for Massachusetts provides the decommissioning cost estimate inflation rates forecasts inflation escalation. DRI Corporation also provides the Decommissioning Fund earnings rates forecasts for 3-5 year government bonds. OPPD adjusts the DRI supplied Fund Decommissioning Fund earnings rates to reflect the portion of the Decommissioning both invested in investment-grade credit securities. OPPD's Board of Directors approved the inflation rates and earnings rates in December 2002 as part of OPPD's Corporate Operating Plan.

Omaha Public Power District 2003 Biennial Decommissioning Funding Status Report to NRC Page Two E. Contracts to Help Fund Decommissioning OPPD does not have any contracts pursuant to 10 CFR 50.75 (e)(1)(ii)(C) and is not relying on contracts with a "non-bypassable charge" to fund decommissioning.

F. Modifications to Method of Providing Financial Assurance There have been no modifications to OPPD's method of providing financial assurance since the decommissioning funding plan began in 1982 and continued pursuant to NRC Regulations in 1990.

G. Changes in the Decommissioning Funding Plan Trust Agreement There have been no changes to OPPD's Decommissioning Funding Plan Trust Agreement since the Plan began pursuant to NRC Regulations in 1990.

Dated: ________

C. P. Moriarty Senior Financial Officer

OMAHA PUBLIC POWER DISTRICT FORT CALHOUN STATION UNIT NO. 1 2003 BIENNIAL DECOMMISSIONING FUNDING STATUS REPORT TO NRC ATTACHMENT A 2002 Escalation of the Minimum Decommissioning Amount (MDA) Estimate for Fort Calhoun Station Unit No. 1 Based on Nuclear Regulatory Commission (NRC) Formulas and Application to OPPD The NRC accepted OPPD's Decommissioning Funding Plan in 1990. As part of the Decommissioning Funding Plan, OPPD annually calculates the MDA as follows:

NRC Formula for MDA

$75 million + $8800(P) = MDA for a Pressurized Water Reactor (PWR) Plant where: P = MWt reactor rating Fort Calhoun = 1500 MDA expressed in 1986 Dollars (to be escalated)

Escalation of NRC Formula for MDA Estimated Decommissioning Cost in Year XX = MDA X (.65L + .13E + .22B)

Where: "L"is the Labor factor. The Labor factor is to be obtained from "Monthly Labor Review",

published by the U. S. Department of Labor - Bureau of Labor Statistics. Specifically, the appropriate regional data from the table entitled "Employment Cost Index - Private Nonfarm Workers", subtitled "Compensation" is to be used In OPPD's case, data from the Midwest Region is to be used.

"E"is the Energy factor. The Energy factor is to be obtained from the following two component formula specifically weighted for PWR plants:

.58P + .42F = E (Energy Factor) where: "P" is the component for electric power, and "F"is the component for fuel oil Both "P" and "F" can be found in "Producer Price Indices", published by the U. S. Department of Labor - Bureau of Labor Statistics. "P" is to be obtained from the regional data for the Electric Power Index and "F" is to be obtained from the Light Fuel Oils Index. In OPPD's case, data from the West North Central Region is to be used for the Electric Power Index.

"B" is the Waste Burial factor. The Waste Burial factor is to be obtained from NRC report NUREG-1307, "Report on Waste Burial Charges" or its updates

Attachment A Page Two OPPD's MDA and Escalation MDA = $75 million + $8800(P) (where P = 1500 MWt)

$75 million + $8800(1500)

$75 million + $13.2 million = $88.2 million (1986 Dollars)

OPPD Escalation of MDA = $88.2 million X (.65L + .13E + .22B)

Where "L", "E", and "B" =

"L" = Labor Index Change Employment Cost Index - PrivateNonfarm Workers - Compensation Midwest Region (Quarterly Basis Increase) 12-2001 158.6 = 78.81% increase change 1-1986 88.7 (NRC Interpolated from 12/85 - Rebased 6-89)

"E" = Energy Index Change Energy Index Change = (Electric Power Index Change X 58%) +

(Light Fuel Oils Index Change X 42%)

ProducerPrice Indices Electric Power 1-2002 100.4 = 13.70% increase change West North Central Region 1-1986 88.3 (Previous Industrial Power Index changed to Electric Power Index 12-90)

Light Fuel Oils 1-2002 58.9 = -28.17% decrease change 1-1986 82.0 Application of the formula to 1-2002 leads to Energy = ((100.4/88.3) X .58) + ((58.9/82.0) X .42)

Energy = .6595 + .3017 Energy = .9612 (an decrease of 3.88%) - decrease change

Attachment A Page Three "B" = Waste Burial Index Change NUREG-1307 (Revision 9)

The Waste Burial escalation factor is found in Nuclear Regulation NUREG-1307 and its updates. The original regulation specified three indices based on direct radioactive waste burial at particular burial locations. The base value for January 1986, independent of burial site location, is 1.0. As of January 1993, NUREG-1307 (Revision

3) removed the Nevada Waste Burial Site from the regulation. In 1999, NUREG-1307 (Revision 8) provided indices for using alternative waste vendors for waste disposal in addition to the standard option of direct burial at the two available disposal facilities.

The alternative waste vendor indices are used to determine the 2000 escalation because OPPD will be using waste vendors to support decommissioning. The remaining locations and indices are:

Washington Index 1-00 4.060 = 306.00% increase change (Waste Vendor Index) 1-86 1.000 South Carolina Index 1-00 7.878 = 687.80% increase change (Waste Vendor Index) 1-86 1.000 Given that two Waste Burial indices are provided in the regulation, two separate escalated cost formulas are developed.

Washington Burial Index

$88.2 million + ((88.2 million)(.65(.788)-.13(.0388)+.22(3.06)) = $192.305 million South Carolina Burial Index

$88.2 million + ((88.2 million)(.65(.788)-.13(.0388)+.22(6.878)) = $266.390 million An average of the Escalated Minimum Decommissioning Amount for the two burial sites results in the following average cost:

Washington Burial Index = $192,305,000 South Carolina Burial Index = $266,390,000

$458,695,000 divided by 2 = $229,348,000 In summary, OPPD's Fort Calhoun Station Unit No. 1 NRC Minimum Decommissioning Amount estimate escalated to January 2002 is $229,348,000.

OMAHA PUBLIC POWER DISTRICT FORT CALHOUN STATION UNIT NO. 1 TO NRC 2003 BIENNIAL DECOMMISSIONING FUNDING STATUS REPORT ATTACHMENT B Omaha Public Power District Minimum Decommissioning Amount (MDA) Decommissioning Fund Annual Collections, Inflation Rates and Earnings Rates Decommissioning Fund Annual Collection Inflation Earnings Rate Rate YEAR for NRC MDA 2.30% 4.82%

2001 $3,581,400 2.20% 5.21%

2002 $0 2.40% 6.05%

2003

$0 2.50% 6.34%

2004 $0 2.40% 6.24%

2005

$0 2.40% 6.27%

2006 $0 2.40% 6.29%

2007 $0 2.30% 6.32%

2008 $0 2.30% 6.35%

2009 $0 2.40% 6.38%

2010 $0 2.60% 6.41%

2011 $0 2.70% 6.82%

2012 $0 2.90% 6.93%

2013 $0