ML090920215

Submittal of Decommissioning Funding Status Report

ML090920215
Person / Time
Site:	Browns Ferry, Watts Bar, Sequoyah
Issue date:	03/31/2009
From:	Purcell M Tennessee Valley Authority
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
TAC ME0491, TAC ME0492, TAC ME0493, TAC ME0571, TAC ME0572, TAC ME0587
Download: ML090920215 (7)

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Tennessee Valley Authority, 1101 Market Street, Chattanooga, Tennessee 37402-2801 March 31, 2009 10 CFR 50.75(f)(1)

U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, D.C. 20555-0001 In the Matter of ) Docket Nos. 50-259 50-327 Tennessee Valley Authority ) 50-260 50-328 50-296 50-390 TVA - DECOMMISSIONING FUNDING STATUS:REPORT - BROWNS FERRY (BFN)

(TAC Nos. ME0491, ME0492 and ME0493); SEQUOYAH (SQN) (TAC Nos. ME0571 and ME0572); AND.WATTS BAR (WBN) (TAC No. ME0587) NUCLEAR PLANTS Pursuant to the requirements of 10 CFR 50.75(f)(1), TVA is required to report to NRC on a calendar year basis, beginning on March 31, 1999, and every two years thereafter, on the status of decommissioning funding for each TVA reactor. This report addresses the decommissioning funding status for BFN Units 1, 2, and 3; SQN Units 1 and 2; and WBN Unit 1.

The reporting requirements and corresponding TVA information are provided below.

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

Decommissioning cost estimates were calculated using the formulas taken from NUREG-1 307 R13 for the "Generic LLW Disposal Site, Direct Disposal With Vendors" option. Bureau of Labor Statistics and Energy indices were taken from the web sites referenced by the NUREG at the end of the 2008 calendar year. The estimates in calendar year 2008 dollars are as follows:

ý..Decommissioning Cost Estimates*,

(2008 End-of-Year Dollars, -Millions),.

PatUnits ~ Cost Per Unit -Total Plant Cost ~

Browns Ferry 3 554.6 1663.8 Sequoyah 2 400.5 801.0 Watts Bar 1 400.5 400.5 A00 Printed on recycled paper

U.S. Nuclear Regulatory Commission Page 2 March 31, 2009

2. The amount accumulated in the TVA decommissioning fund at the end of the calendar year 2008 for items included in 10 CFR 50.75 (b) and (c).

drowns i-erry unit 1 I.u(A+

Browns Ferry Unit 2 102.7 Browns Ferry Unit 3 92.5 Sequoyah Unit 1 148.1 Sequoyah Unit 2 140.9 Watts Bar Unit 1 68.9

3. A schedule of the annual amounts remaining to be collected for items in 10 CFR 50.75 (b) and (c).

TVA's decommissioning fund balance was in excess of the projected balance at, the conclusion of calendar year 2007 and, as a result, no amounts were scheduled to be collected. However, financial markets have since experienced a downturn which resulted in lower market valuations for many investments held in TVA's decommissioning trust fund.

TVA recognizes that an appropriate funding strategy must take into account the need to provide additional financial assurance should market improvement fail to be realized in a timely manner. TVA's decommissioning fund strategy has sought to maintain a reasoned balance between the need to ensure the near term adequacy of available decommissioning funds while being mindful that decommissioning funding obligations must be met over the long term so that adequate funds are in place at the time of plant shutdown for ultimately performing decommissioning when those activities will eventually take place. Moreover, NRC's regulatory guidance recognizes that licensees, including those who are rate-regulated by an external rate-setting authority or which set their own rates (as does TVA), may take time (up to several years) to make adjustments to the amounts set aside for decommissioning (NRC Regulatory Guide 1.159, Revision 1).

Moderate market recovery within the near term will help to restore funding.

Accordingly, TVA will continue to monitor its decommissioning fund and make contributions to the decommissioning fund or provide other methods of decommissioning funding assurance consistent with NRC regulations and guidance as appropriate within reasonable timeframes.

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

U. S. Nuclear Regulatory Commission Page 3 March 31, 2009

• The assumed escalation in decommissioning costs is 4 percent.

• TVA assumed a projected annual real rate of return on decommissioning funds of 5 percent, as authorized by the TVA Board of Directors, TVA's rate-making authority. This rate is consistent with the long-term historical investment return associated with U.S. equities.

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

None.

.7.. Any material changes to trust agreements.

The attached documents address the bank merger and reorganization which resulted in The Bank of New York Mellon Corporation becoming the successor to TVA's former trustee, Mellon Bank, N.A., under the terms of TVA's Master Decommissioning Trust Agreement.

If you have any questions regarding this response, please call Fred Mashburn at (423) 751-8817.

Sincerely, Michael A Purcell Senior Licensing Manager Nuclear Power Group Enclosures cc: See page 4

U. S. Nuclear Regulatory Commission Page 4 March 31, 2009 cc (Enclosures):

Ms. Eva A. Brown, Project Manager U. S. Nuclear Regulatory Commission MS 08G9 One White Flint North 11555 Rockville Pike Rockville, Maryland 20852-2739 Mr. Tracy J. Orf, Project Manager U.S. Nuclear Regulatory Commission MS 08G9 One White Flint North 11555 Rockville Pike Rockville, Maryland 20852-2739 Mr. John Lamb, Senior Project Manager U.S. Nuclear Regulatory Commission MS 08G9 One White Flint North 11555 Rockville Pike Rockville, Maryland 20852-2739 Mr. Luis Reyes, Regional Administrator U.S. Nuclear Regulatory Commission Region II Sam Nunn Atlanta Federal Center 61 Forsyth St., SW, Suite 23T85 Atlanta, Georgia 30303-8931

1'BNY MIFT ION

'ASSýET SERVCN March 31, 2008 Mr: Eric-Da',vis Teinessee ValleyAuthoiity

.'400 West Summit Hill'Drive Knoxyi!l-,TN 3790241499

Dear Eric:

I'd like to inform you of upcoming activities; relating to your, Asset Servicing accounts with Mellon' Bank, N.A.

As~you are aware, The Bank of New York Company'and Mellon Financial Corporation cpm*let' d the merger of these two holding companies this past surnmer, forming The Bank-of fedwYork Mellon Corporation. As part of our multi-year.integraton plan, we are reorganizing vaioiius banking~entities.. This consolidation will help.us maximize, operating efficiencies and make it easier for us to'do business with.,our clients around the world.

As'a result of this reorganization, your Asset Servicing accounts currently 'with Mellon Bank will become accouhttSof TheBank of New York Mellon. This consolidation, should be largelytransparent to you.

The legal migration of your accounts, .along with the accounts of other clients and the business operations of Mellon Bank's Asset Servicing business, will happen automatically (by operation of law) on the date of the -reorganization.

Your relationship wll- continue. to be handled by the same employees and supported by'the same systems as are'

'currently employed.by Mellon Bank to provide you.with Asset Servicing products and srniceis 'The Bank of'New

.York'Mellon will:be'the, successorentity'to the claims, rights, obligations and liabilifiesoof MeIlbon Bank's Asset S.ervicingbusiiess.:A brief profile of The Bank.of New York Mellon is enclosed with this lettei- foryour.information.

If you invest in our common or collective funds dr pariipate in our Securities lending program which uses such -funds, note also that as part o'f.this restructuring, TheBBank Iof YNuwY0o&kMelloni will be come successor Trustee of any i.conion trust funds or collective investmentfunds thxain.aied bytMeldr3 Trust of New.England, NaionalAssociation "orMellon Bank. Ap process.,:,

...-o ... f7e k M ll . r .. . ..

For ou part, The.Bak of:New York Mellon Cor-pdratioihis workingrthrugh:the application -andapproval process w,.

i~Ath* *vi*iunkregulators.sWe are also plaping:'th'e0criorate level:actions that illbe neededt6iimplemeitthe r- .! ' ::festucturing.

iThe resfrctiiuring 6of the banks will hoObe'i*iiiiirit&d:nil all regulatory approvals have been received a.ndall requnied. action's hi:ive beentaken. Ourfthagfefediinplernietatio° date for.the bank restructuring is July 1, 2008.

'Ify.0 have any questionso bii-eed further information regardinm tiis reorganization, please do not hesitate to contact Me..

Since 'rely, Amy Aniendola (4,12) 234-1735 Enclosure Cc:. John Hoskins,'

Carlos Pacheco 500 G-r>lý '_treet. One MellonC'enItei Rongm 1315, PIttsburgh, PA 15258 T 4112 234 4100'"wvw'w:bnyreeo1.c

THE BANK OF NEW YOkRK "MNELLON:.:

2 The Bank of ,New York Mellon'  ::BNY Mellon, NationaI Association State chartered banký Nationally chartered'bank:.--

The New*York State, Department of TheQffiqe of th'eTComptroiler oft e.

Banking and a4member of the Federal. pirreny and a- member of the Federal Resere system with deposits insured Reserve Systei With deposits insured by Lby the Fedderal Deposit Insurance, the Federal Deposit lnsu'ranceGcorporation SColrporation ./. .. .

-- The institutional banking businesses The private wealth:and privatePbanking currently conducted by various legacy businesses currently conducted by various3 4Mellon banking entities with the : legacy Mellon banks!and trustcompanies institution al banking business currently conducted by The Bank :of, New York.

Asset Servicing WealthManagement i.Issuer Services Treasury Services R'roker/Dealer & Advisor Services Bank-advised Asset. Management_

- One Wall Street, New York, New York 500,GrantStreet, Pittsburgh, Penhsylvania Based on the consolidating institutional Based on the consolidatin'g private wealth bf5king businesses as of December 31, and pfivate banking businesses as.of-2007 (approximate): Derember 31, 2007(approximate):

- . :$'154.:0 billion " $7.9 billion'.

• -* $1 10.0 billio $5.4 billion; 4* ON/A $3.1

. billioh.

f $14 bi.i

..0 .. $2141billion

-* -$1i22 billion $24SlOillion

"*i8.*4 % "  :: :.:9.3 %'io. . . .. .,. . .' -

S(J 11.6 ,11 ...8/0, Based.on information contained in applications currently pending with appropriate baik regulatory au(fhorities.

2 Based on {iiformation contaiinei.in applications currently pending with aprriate, banek regulatory authorities:

In additiorn to the consolidation and combination of the legacy Mellon priayatte wealth and private banking biininesses, plains are currently being made to migrate The Bank of New York's private wealthband private baniking business to BNY Mellon, National Association sometime duringqcalendar year 2009.

Preparedby CorporateMarketing

Press Release THE BANK.OFNEW YORK MELLONM

Contact:

Ron Gruendl 412-234-7157 ron.gruendl@bnymellon.com The Bank of New York Mellon Completes Bank Consolidation Program NEW YORK, July 1, 2oo8 - The Bank of New York Mellon, the global leader in asset management and securities servicing, has completed the process of consolidating and renaming its principal U.S. bank and trust company subsidiaries into two new principal banks. This consolidation effort, which follows last July's merger of the holding companies of Mellon Financial and The Bank of New York, was an essential part of the Company's overall integration process that required regulatory approvals and was completed on schedule.

"This is another important step in ensuring we meet or exceed the goals we set for integration. The bank charter consolidation provides a more effective and cost-efficient structure to deliver our products and services to our global clients, as well as streamlines our own regulatory and related processes," said Robert P. Kelly, chief executive officer of The Bank of New York Mellon. "These changes will ultimately make it easier for our company to conduct its business and for our customers to conduct their business with us. For most of our clients, the consolidation of these charters was largely transparent and operationally seamless, aside from different entity names appearing on their statements and reports going forward."

The two principal banks formed as a result of the consolidation of the entities, which mainly were U.S.

banks and trust companies, are:

" The Bank of New York Mellon, a New York State chartered bank, which houses institutional businesses including Asset Servicing, Issuer Services, Treasury Services, Broker-Dealer & Advisor Services and the bank-advised businesses of Asset Management.

" BNY Mellon, National Association, which houses Wealth Management, where a national charter is preferable given the scope of that business. Currently, this bank contains only the legacy Mellon private wealth business, as the legacy Bank of New York private wealth business is expected to be added in the first quarter of 2009.

As part of the consolidation, the number of U.S. trust companies was reduced to two companies - The Bank of New York Mellon Trust Company, National Association and BNY Mellon Trust Company of Illinois. These companies house trust products and services across the U.S. Also concentrating on trust products and services will be BNY Mellon Trust of Delaware, a Delaware bank. Most asset management businesses, along with Pershing, will continue to be held outside of the banks, as they are today.

The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than loo markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has more than $23 trillion in assets under custody and administration, more than $i.1 trillion in assets under management and services $12 trillion in outstanding debt. Additional information is available at bnymellon.com.