ML070930697

Report of Status of Decommissioning Funding

ML070930697
Person / Time
Site:	Summer
Issue date:	03/30/2007
From:	Chaplin M Santee Cooper
To:	Document Control Desk, NRC/NRR/ADRO
References
Download: ML070930697 (3)

Text

9C Santee e Maxie C. Chaplin I p oopero Senior Vice President Generation One Riverwood Drive Post Office Box 2946101 Moncks Corner, SC 29461-2901 (843) 761-4093 March 30, 2007 Document Control Desk U. S. Nuclear Regulatory Commission Washington, D. C. 20555

Subject:

Virgil C. Summer Nuclear Station Docket No. 50/395 Operating License No. NPF-12 Report of Status of Decommissioning Funding Gentlemen:

The South Carolina Public Service Authority (Authority) and South Carolina Electric & Gas Company (SCE&G) have ownership interests of one-third and two-thirds, respectively, in the Virgil C. Summer Nuclear Station (VCSNS). As provided in 10 CFR § 50.75 (t)(1), each power reactor licensee is required to report to the Nuclear Regulatory Commission (NRC) on a calendar year basis, beginning March 31, 1999, and every two years thereafter, the status of its decommissioning funding for each reactor or share of reactor it owns. SCE&G has advised the Authority that it will disclose the required information relative to its two-thirds ownership share in a separate submittal.

The Authority's one-third share of the NRC formula minimum funding requirement is approximately $116 million as of December 31, 2006. This liability is funded by payments to an external sinking fund as provided for in 10 CFR § 50.75. The escalated liability for these costs is expected to total $456 million, stated in dollars of the year of expenditure. The market value of the external fund was approximately $72 million as of December 31, 2006.

A site-specific decommissioning study completed in 2006 identified the Authority's share of decommissioning costs which are in excess of NRC formula minimum funding requirements. This additional liability is estimated by the Authority to be approximately $69 million as of December 31, 2006. The escalated liability for excess costs is expected to total approximately $352 million, stated in dollars of the year of expenditure. The market value of the internal fund was approximately $57 million as of December 31, 2006 and the book value was approximately $52 million.

If there are any questions concerning this report, please contact me at (843)761-4093.

Sincerely,

)ax~ie C. ýChaplin4 Senior Vice President Generation MCC:trw Attachment cc: W. D. Travers R. E. Martin NRC' Resident Inspector We're Putting Our Energy to Work for You.

Attachment 1 1(a). The minimum decommissioning fund estimate, pursuant to 10 CFR § 50.75 (b) and (c). $1 16.234.627 Base Amount for PWR between 1,200 MWt and 3,400 MWt Estimated Cost (Year X) = (1986 $ Base Cost) (ALx + BEx + CBx)

= ($100,520,000) {(.65 x 2.049) + (.13 x 1.883) + (.22 x 8.600)}

$348,703,880 Authority's one-third share of 2006 Estimated Cost = $116,234,627 Where:

A = .65 (NUREG 1307 Rev. 12)

B = .13 (NUREG 1307 Rev. 12)

C = .22 (NUREG 1307 Rev. 12)

Lx, 2.049 (Computed Below)

Ex = 1.883 (Computed Below)

Px = 1.468 (Computed Below)

Fx = 2.456 (Computed Below)

B,. = 8.600 (NUREG 1307 Rev. 12) 1986 $ Base Cost = ($75,000,000 + .0088Pmillion)

= ($75,000,000 + 25,520,000)

= $100,520,000 P = 2,900 MWt

= Dec 2006 Base Lx X Dec 2006 Value / Dec 2005 Value

= 1.98 X 103.5 / 100 2.049 Px = December 2006 Value / January 1986 Value 167.6/ 114.2 1.468 F,, December 2006 Value / January 1986 Value

= 201.4/82.0

= 2.456 E = {(.58Px) + (.42F,,)}

f{(.58 x 1.468) + (.42 x 2.456)}

= 1.883 December 31, 2006 values in the following Bureau of Labor Statistics indices were used to compute NRC minimum requirements:

Employment Cost Index - Total compensation, private industry, South region Series ID: CIU2010000000220I Producer Price Index - Commodities (Industrial electric power)

Series ID: wpu0543 Producer Price Index - Commodities (Light fuel oils)

Series ID: wpu0573 1 of 2

4 Attachment I 1(b). Escalation of the Authority's one-third share of the minimum funding requirement through the end of decommissioning.

Cost categories Labor, Equipment & Materials, Burial, and Other were estimated in a site-specific decommissioning study. These costs were escalated through the end of the decommissioning period based on various indices and estimates. Ultimate decommissioning costs to be funded from the external trust are estimated at $455,647,453 in escalated dollars.

2. Market value of the external trust fund at December 31, 2006 for items included in 10 CFR § 50.75. $

3. Schedule of annual amounts remaining to be collected for items in 10 CFR § 50.75.

The current amount on deposit in the external trust, together with estimated future earnings, is deemed sufficient to fund the estimated future decommissioning liability. Escalation and earnings assumptions will be reviewed on a regular basis to determine if future deposits will be required.

4. The assumptions used regarding escalation in decommissioning cost, rates of earnings on decommissioning funds, and rates of other factors used in funding projections follow:

• The plant will be decommissioned immediately upon license expiration (DECON alternative).

• Costs will escalate in accordance with the estimated future behavior of applicable indices for labor (4.6%), equipment and materials (0.4%), waste burial (2.9%) and other (3.5 %).

• Waste vendors will be utilized.

• The trust fund will accrue earnings in accordance with estimated effective yield (approximately 6.0%).

• All necessary funds will be on deposit at the time the plant is shut down.

5. Contracts upon which the licensee is relaying pursuant to 10 CFR § 50.75 (e) (1) (v).

None.

6. Modifications to the current funding assurance methods.

None.

7. Material changes to Trust Agreements.

None.

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