ML072920032
| ML072920032 | |
| Person / Time | |
|---|---|
| Issue date: | 10/30/2007 |
| From: | William Reckley NRC/NRO/DNRL |
| To: | Heymer A Nuclear Energy Institute |
| Subbaratnam R NRO/DNRL/NRGA 301-415-1478 | |
| References | |
| COL/DC-ISG-02 | |
| Download: ML072920032 (9) | |
Text
October 30, 2007 Mr. Adrian Heymer, Senior Director New Plant Deployment Nuclear Generation Division Nuclear Energy Institute 1776 I Street NW., Suite 400 Washington, DC 20006
SUBJECT:
INTERIM STAFF GUIDANCE (ISG) ON FINANCIAL QUALIFICATIONS OF APPLICANTS FOR COMBINED LICENSE APPLICATIONS
Dear Mr. Heymer:
The purpose of this letter is to provide you with an opportunity to comment on the proposed combined license and design certification staff guidance (COL/DC-ISG-02, enclosure) on the Interim Staff Guidance on Financial Qualifications for Combined License (COL) Applications.
This COL/DC-ISG summarizes the requirements under 10 CFR 50.33 (f)(1) for COL applicants and corrects the information provided in Section C.IV.5.1 of Regulatory Guide (RG) 1.206, Combined License Applications for Nuclear Power Plants, (RG 1.206).
This proposed COL/DC-ISG does not convey a change in the U.S. Nuclear Regulatory Commissions (NRCs) regulations or how they are being interpreted. It is being provided to assist future applicants in preparing COL applications. As such, we are interested in receiving comments on the proposed COL/DC-ISG within 30 days of its issuance and posting on the NRC web (http://www.nrc.gov/reading-rm/doc-collections/isg/col-app-design-cert.html). The staff plans to incorporate this guidance into a future update of RG 1.206. Because this COL/DC-ISG provides documentation of the existing acceptance review practice in accordance with existing regulations, the staff did not perform a backfit evaluation.
If you have any questions, please contact Ram Subbaratnam at 301-415-1478.
Sincerely,
/RA/
William D. Reckley, Chief Rulemaking, Guidance, and Advance Reactors Branch Division of New Reactor Licensing Office of New Reactors
Enclosure:
As stated cc: w/enclosure: See next page
ML072920032 OFFICE PM:NRCA:DNRL LA:NRCA:DNRL BC:NRCA:DNRL NAME RSubbaratnam:pmm PMagnanelli WReckley DATE 10/22/2007 10/22/2007 10/30/2007
Letter to Adrian Heymer from William D. Reckley dated October 30, 2007.
SUBJECT:
INTERIM STAFF GUIDANCE (ISG) ON FINANCIAL QUALIFICATIONS OF APPLICANTS FOR COMBINED LICENSE (COL)/DESIGN CERTIFICATION (DC) APPLICATIONS Distribution:
NRCA R/F R. Subbaratnam P. Magnanelli W. Reckley P. Madden D. Mattews K. Winsberg RidsNroOd RidsNroDnrl RidsNroDnrlNrga RidsOgcMailCenter RidsAcrsAcnwMailCenter RidsNroDcip RidsNroDe RidsNroDser RidsNroDsra RidsOpaMail
Enclosure Interim Staff Guidance on Financial Qualifications of Applicants For Combined License Applications
Purpose:
The purpose of this interim staff guidance (ISG) is to clarify the U.S. Nuclear Regulatory Commission (NRC) staffs expectations with regard to the financial qualification for combined license (COL) applicants. This guidance provides corrections and clarifications to the previous guidance issued in June 2007 in Regulatory Guide (RG) 1.206, Combined License Applications for Nuclear Power Plants.
Background:
The source document for regulatory guidance for this issue was the recently issued RG 1.206 and Section C.IV.5.1, states:
The COL application must provide the following general information:
name and address of the applicant description of the business or occupation of the applicant class of license applied for use to which the facility will be put period of time for which the license is sought list of other licenses issued or applied for in connection with the proposed facility except for applications submitted by electric utilities, information sufficient to demonstrate the applicants financial qualifications to carry out the activities for which the license is sought, including the following:
estimates of the total construction costs and related fuel cycle costs as well as sources of funds to cover these costs information showing that the applicant possesses or has reasonable assurance of obtaining the funds necessary to cover estimated construction and related fuel cycle costs information showing that the applicant possesses or has reasonable assurance of obtaining the funds necessary to cover the estimated operating costs for the period of the license estimates of the total annual operating costs for each of the first 5 years of operation as well as sources of funds to cover those costs Issue:
The 10 CFR 52.77, Contents of applications - general information stipulates that the COL application must contain all of the information as required by 10 CFR 50.33. The requirements of 10 CFR 50.33(f) are:
(f)
Except for an electric utility applicant for a license to operate a utilization facility of the type described in § 50.21(b) or § 50.22, information sufficient to demonstrate to the Commission the financial qualification of the applicant to carry out, in accordance with regulations in this chapter, the activities for which the permit or license is sought. As applicable, the following should be provided:
(1)
If the application is for a construction permit, the applicant shall submit information that demonstrates that the applicant possesses or has reasonable assurance of obtaining the funds necessary to cover estimated construction costs and related fuel cycle costs. The applicant shall submit estimates of the total construction costs of the facility and related fuel cycle costs, and shall indicate the source(s) of funds to cover these costs.
(2)
If the application is for an operating license, the applicant shall submit information that demonstrates the applicant possesses or has reasonable assurance of obtaining the funds necessary to cover estimated operation costs for the period of the license. The applicant shall submit estimates for total annual operating costs for each of the first five years of operation of the facility. The applicant shall also indicate the source(s) of funds to cover these costs. An applicant seeking to renew or extend the term of an operating license for a power reactor need not submit the financial information that is required in an application for an initial license. Applicants to renew or extend the term of an operating license for a non-power reactor shall include the financial information that is required in an application for an initial license.
(3)
Each application for a construction permit or an operating license submitted by a newly-formed entity organized for the primary purpose of constructing or operating a facility must also include information showing:
(i)
The legal and financial relationships it has or proposes to have with its stockholders or owners; (ii)
Its financial ability to meet any contractual obligation to the entity which they have incurred or proposed to incur; and (iii)
Any other information considered necessary by the Commission to enable it to determine the applicant's financial qualification.
(4)
The Commission may request an established entity or newly-formed entity to submit additional or more detailed information respecting its financial arrangements and status of funds if the Commission considers this information appropriate. This may include information regarding a licensees ability to continue the conduct of the activities authorized by the license and to decommission the facility.
Rationale:
The exception for electric utility applicants is applicable to operating licenses only, not to construction permits. Therefore, electric utility applicants must comply with 10 CFR 50.33(f)(1).
The guidance in RG 1.206, Section C.IV.5.1, incorrectly indicates electric utility applicants are exempt from providing:
estimates of the total construction costs and related fuel cycle costs as well as sources of funds to cover these costs information showing that the applicant possesses or has reasonable assurance of obtaining the funds necessary to cover estimated construction and related fuel cycle costs The guidance in RG 1.206, Section C.IV.5.1, correctly indicates electric utility applicants are exempt from providing:
information showing that the applicant possesses or has reasonable assurance of obtaining the funds necessary to cover the estimated operating costs for the period of the license estimates of the total annual operating costs for each of the first 5 years of operation as well as sources of funds to cover those costs The definition of electric utility is in 10 CFR 50.2 which states:
Electric utility means any entity that generates or distributes electricity and which recovers the cost of this electricity, either directly or indirectly, through rates established by the entity itself or by a separate regulatory authority.
Investor-owned utilities, including generation or distribution subsidiaries, public utility districts, municipalities, rural electric cooperatives, and State and Federal agencies, including associations of any of the foregoing, are included within the meaning of electric utility.
Proposed Interim Staff Guidance:
RG 1.206, Section C.IV.5.1, will be revised to state:
The COL application must provide the following general information:
name and address of the applicant description of the business or occupation of the applicant class of license applied for use to which the facility will be put period of time for which the license is sought list of other licenses issued or applied for in connection with the proposed facility information sufficient to demonstrate the applicants financial qualifications to carry out the activities for which the license is sought, including the following:
estimates of the total construction costs and related fuel cycle costs as well as sources of funds to cover these costs information showing that the applicant possesses or has reasonable assurance of obtaining the funds necessary to cover estimated construction and related fuel cycle costs except for applications submitted by electric utilities, information showing that the applicant possesses or has reasonable assurance of obtaining the funds necessary to cover the estimated operating costs for the period of the license except for applications submitted by electric utilities, estimates of the total annual operating costs for each of the first 5 years of operation as well as sources of funds to cover those costs Final Resolution:
The issue will be resolved in the next update/revision to the RG 1.206.
Applicability:
This ISG is applicable to all combined license applicants.
References:
- 1.
10 CFR 52.77, Contents of applications - general information
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