LIC-03-0156, 2003 Biennial Decommissioning Funding Status Report, Revised

2003 Biennial Decommissioning Funding Status Report, Revised

ML033300385
Person / Time
Site:	Fort Calhoun
Issue date:	11/21/2003
From:	Ridenoure R Omaha Public Power District
To:	Dusaniwskyj M Division of Regulatory Improvement Programs
References
LIC-03-0156
Download: ML033300385 (8)

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Omaha Public Poer Distnct 444 South 16th Street Afall Omaha NE 68102-2247 November 21, 2003 LIC-03-0156 U. S. Nuclear Regulatory Commission Attn: Michael. A. Dusaniwskyj Division of Regulatory Improvement Program Financial Regulatory Analysis Section Mail Stop OWFN - 12D1 Washington, DC 20555

Reference:

1. Docket No. 50-285

2. Letter from OPPD (R. T. Ridenoure) to NRC (DCD), Fort Calhoun Station Unit No. 1, 2003 Biennial Decommissioning Funding Status Report, Dated February 28, 2003 (LIC-03-0026)

SUBJECT:

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

As requested in a telephone conservation with Michael. A. Dusaniwskyj on October 21, 2003, Omaha Public Power District has attached the revised Fort Calhoun Station Unit No. 1, 2003 Biennial Decommissioning Funding Status Report. The previous Report was based upon an average of the cost of all burial sites. This revision reflects the use of only the Barnwell, South Carolina waste burial location. The Report also indicates that as of the required calculation date ofDecember 31, 2002, the Decommissioning Fund would need projected annual collections of S938,000 from 2004-2012. However, as indicated in OPPD's Report, the collections will not be necessary due to Fort Calhoun Station's recent 20-year license renewal.

Aco Employgent vith Equal Opportunity

U. S. Nuclear Regulatory Commission LIC-03-0156 Page 2 No commitments are made in this letter. Should you have any questions regarding this matter, please contact Dr. Richard Jaworski at (402) 533-6833.

D vision Marager 14 uclear pe tions Attac ment: Fort Calhoun Station Unit No. 1, 2003 Biennial Decommissioning Funding Status Report, Revised November 2003 c: B. S. Mallett, NRC Regional Administrator, Region IV A. B. Wang, NRC Project Manager J. G. Kramer, NRC Senior Resident Inspector Document Control Desk

Revised November 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 Fort Calhoun Station Unit No. 1. Based on the decommissioning funding requirement as outlined in 10 CFR 50.75 (f), OPPD reports the following information:

A. Current Decommissioninq Cost Estimate Pursuant to 10 CFR 50.75 (c), the January 2003 estimated minimum decommissioning amount to decommission Fort Calhoun Station Unit No. 1 is $303,899,000. 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 was in 2013 as of December 2002. Fort Calhoun Station's license was renewed for 20 years as of November 2003.) 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 The rates used for the escalation of the decommissioning cost estimate and earnings rates on the Decommissioning Fund are shown in Attachment B. DRI Corporation of Lexington, Massachusetts provides the decommissioning cost estimate inflation rates forecasts for inflation escalation. DRI Corporation also provides the Decommissioning Fund earnings rates forecasts for 3-5 year government bonds. OPPD adjusts the DRI supplied Decommissioning Fund earnings rates to reflect the portion of the Decommissioning Fund invested in investrnent-grade credit securities. *OPPD's Board of Directors approved both 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 tb NRC Page Two E. Contracts to Help Fund Decommissioninq 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. Chanqes 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 2003 Escalation of the Minimum Decommissioning Amount (MDA) Estimate for Fort Calhoun Station Unit No. 1 Based on Nuclear Regulat6ry 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 Industrial Electric Power Index and "F"is to be obtained from the Light Fuel Oils Index.

"B" is the Waste Burial factor. The Waste Burial factor is to be obtained from NRC report NUREG-1 307, "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 - Private Nonfarm Workers - Compensation Midwest Region (Quarterly Basis Increase) 12-2002 164.6 = 1.8557 (an increase of 85.57%)

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%)

Producer Price Indices Industrial Electric Power 1-2003 139.7 = 22.33% increase change 1-1986 114.2 Light Fuel Oils 1-2003 96.7 = 17.93% increase change 1-1986 82.0 Application of the formula to 1-2003 leads to Energy = ((139.7/114.2)X .58) + ((96.7/82.0) X .42)

Energy = .7095 + .4953 Energy = 1.2048 (anincrease of 20.48%)

Attachment A Page Three "B" = Waste Burial Index Change NUREG-1307 (Revision 10)

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 2002 escalation

• because OPPD will be using waste vendors to support decommissioning. OPPD's Decommissioning Funding Plan approved by the NRC in 1990 uses the. average of all waste burial sites in calculating the NRC Minimum Decommissioning Amount. Due to conversations in October 2003 with Mr. Mike Dusaniwskyj of the NRC, OPPD's Biennial Decommissioning Funding Status Report will use the South Carolina Index (the only location that OPPD is permitted to send waste) in calculating the NRC Minimum Decommissioning Amount.

South Carolina Index 1-02 9.467 = 9.467 (an increase of 846.7%)

(Waste Vendor Index) 1-86 1.000 The escalated cost formula is as foll6ws:

South Carolina Burial Index

$88.2 million x (.65(1.8557)+.13(1.2048)+.22(9.467)) = $303.899 million In summary, OPPD's Fort Calhoun Station Unit No. 1 NRC Minimum Decommissioning Amount estimate escalated to January 2003 is $303,899,000.

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

• Rate Rate 2001 $3,581,400 2.30% 4.82%

2002 $0 2.20% 5.21%

2003 $0 2.40% 6.05%

2004 $938,000 2.50% 6.34%

2005 $938,000 2.40% 6.24%

2006 $938,000 2.40% 6.27%

2007 $938,000 2.40% 6.29%

2008 $938,000 2.30% 6.32%

2009 $938,000- 2.30% 6.35%

2010 $938,000 2.40% 6.38%

2011 $938,000 2.60% 6.41%

2012 $938,000 2.70% 6.82%

2013 $0 2.90% 6.93%

• Due to Fort Calhoun Station's recent 20-year license renewal, the projected collections will not be necessary.