ML092650603
| ML092650603 | |
| Person / Time | |
|---|---|
| Site: | Pennsylvania State University |
| Issue date: | 10/31/2008 |
| From: | Unlu K Pennsylvania State Univ |
| To: | William Kennedy Office of Nuclear Reactor Regulation |
| Kennedy W, NRR/ADRA/DPR/PRT, 415-2784 | |
| References | |
| TAC MC9534 | |
| Download: ML092650603 (77) | |
Text
OMM PENNSTATE KENAN IUNLO, KENAN Director, UNLO, Ph.D.
Director, Radiation Ph.D.
Science and Radiation Science Professor, Department Department of and Engineering Engineering Center of Mechanical Mechanical and Center and Nuclear Nuclear Engineering Engineering Phone:
Phone: (814)
Fax:
E-mail:
(814) 865-6351 Fax: (814) 865-6351 (814) 863-4840 863-4840 E-mail: k-unlu(ipsu.edu k-unlu@psu.edu The The Pennsylvania Pennsylvania State State University University University University Park, PA PA 16802-2304 16802-2304 October 31, October 31, 2008 US Nuclear Nuclear Regulatory Commission Regulatory Commission.
ATTN: Mr. William ATTN: William Kenney Kenney Office of Nuclear Office Nuclear Reactor Reactor Regulation Regulation Stop 012-G13 Mail Stop 012-G13 One White Flint North 11555 Rockville Rockville Pike Rockville, MD 20852-273820852-2738
Reference:
Pennsylvania State State University Breazeale Breazeale Nuclear Reactor Reactor Docket No.50-005, License No. R-2 Docket USNRC USNRC Request Request for Additional Information (RAI)
Additional Information (RAI) dated September 9, 2008 dated September
Subject:
Subject:
Dear Mr. Kennedy:
The attachment to this letter answers the questions questions presented in the RAI dated September 9, 2008. If Ifthere there are any questions regarding the information submitted, please contact contactMr. Mr. Mark A. Trump, Associate Director for Operations at RSEC. I declare declare under penalty penalty of perjury that the foregoing is true and correct.
Executed on Executed 001-il 31, 19-09 on _---'()_C_:fr,_h_-er-----:;J'-'-I.....L1-.:/2P
__ ot__---'
Sincerely Sincerely yours,
- /t;t!1~J//J~
Kenan Unlii Director, Radiation Science and Engineering Center Professor, Department of Mechanical Mechanical and Nuclear Engineering Engineering cc: E.J. Pell (w/o)
EJ.
A.A. Atchley (w/o)
D. Sathianathan (w/o)
M.A. Trump (w/o)
Enclosures College of Engineering An Equal Opportunity University An
PSU RESPONSE TO NRC RAI CHAPTER CHAPTER 2 2.1 General meteorological General meteorological information information for the site, other than extremes, is not included included inin the description of site characteristics.
characteristics. Provide information on Provide site information temperature ranges, temperature ranges, humidity, and average average wind wind speed, or justify its exclusion.
exclusion.
Temperatures at State College Temperatures College are representative of those in other valley sections of representative ofthose of Central Pennsylvania, averaging about 4 degrees lower than those in southeastern Pennsylvania, averaging southeastern counties and 2 degrees higher than in areas farther to the northwest. The seasonal temperature temperature change pattern is very regular, and yearly or even monthly deviations from the norm are relatively small. In summer, the days are sometimes oppressive due to a combination of high temperatures, high relative humidity and light winds, however, combination temperatures temperatures generally generally cool to comfortable levels during the night so that heat waves of of the variety, variety occasionally experienced in the southeastern part of the Commonwealth occasionally experienced Commonwealth are extremely rare. Historical temperature data is shown in the table below. (Source PSU PSU Weather Weather Station website)
The Climate of State College, Pennsylvania:
Pennsylvania: 1882-1990 1882-1990 (Source (Source PSU Weather Station Weather Station website) website) ___ ____ __ ________ _ _ _ _ _ _
Monthly DODD I
=Date Dae1~~1 H*
=i
~~g~DL II IlAveragsl.
E Meen]Low an =ow* II Monthly Temperatures Temperatures (Degrees F)
Wrms Warmest[ea
]j
[~~Dn II Extremes Extremes Year IIColdest II II Year] I I Date IIHigh11 January 134.01i 26.3 Mean I[Low II 18.8j Warmest 45.3 II[ Year 1950 JI Coldest II Year 5.4 1977 I I J~nuary 1134.011 26.3 1118.811 45.3 II 1950 II 5.4 ]1 1977 I IFebruary]. ___5 February 11}5.511 27.5 27.5 19-.0 II 19*qJL 44.8 II 1925 II 6.1 II 1934 1 j
March 145_1I March j145~1 36.3 36.3 =259.8 1127AII 59.8 1945 II *1~ul 17.51 19601 17.5 .-JI 1960 I I
1 April 58.2i447.9 1158.211 7.1137.611*
6 II 68.4 68A JtII 1941 1941 II 30.6 1982I I II 1967 1982 I
May 169.911 59.059.0 148._ 78.3 ]71911 419 L May 1169.911 1148.211 78.3 11- 1911 II 41.9 II 1967 I 1 June 8]
1177.811 6I7=2
,67.2 115~1 56.4_ 84.2 JI 1934
.. II 51.7 1[ 751.7 II 1927 1927 I I July 8.0 1182.011 71.2 66 1160.611 L1955 87.7 87.7 II 1955 II 56.8 1918 1 II 1918 I I August 1 680.01_
August 1180.0 II II 69.2 1158.81158.8_ 86.1 ~IJ 1938 .-.-11 1938 46.9 II 1893 I I
ISeptemberl 73 All- 4eptemberl734 52.1 II 62.6 II 52.1[ 80.8 JIj[ 1930 1[
II 46.3 46Ul 1 1963 I I October I61.81.51.5 I 41.51 October 1161.810~1141.511 71.8 ___J
~I 1963 1963 III 33.8 1987 I 11 1987 November]=4851 40.4 It 32.511 INovemberl148.511 32.5I-5 56.6 56.6. ]II 1975 II 26A 26.4 II 1984 1984 I IDecemberl36.811 IDecemberI136.8] 30.0 J2 1122.811 45.5 ][II 1923
_1923 II 12.0 12.0 II11989 1989 I Page 1 of 40
PSU RESPONSE RESPONSE TO NRC RAI RAI Typical Typical wind direction and speed distributions can be interpreted from the two figures below. (Source (Source Office of State Climatologist website)
PLOT: DISPAY DI SPlAY: OATAPERIODS:
DATA PERIODS; J(UNV - U*mity XUNV Putk Ahprnt -"STATE llnIArsltJPorkAitport - -STATE COLLEGE, COLLECE. PAN PA Wind Speed Direction D.+/- from-Dot. 11ty ""1"AIiorw flO'" hourly cbsei'naz Mm S.uadnlabd MeuS * .u.._, 1991- Je 1996&
U91-J_IW6 =2 - 2l5
.. DJ2-Dl5 (blowing from)
(blowing from) a""
o'erteo _ ...,.,.,. pesd periods:
f - - - - - - - - - - - - - - - - - - - - -- - -- --'-----'---=--'-----i .1111991 11111991- dt60199* .nd
- 6I3OI1996"...-.d Lda:hade 49.141; L.1tude: LongItUde: n.arw
- .M"N; Lostuea 7F7AW 11112002 - 12031r=S 11112002 1213112005
- .... * ~*NORi'H****** ..... aewtltion: 12'- (31Jm)
.OBSERVATlONS:
~ aB S ERVAT10N S: CALM VAN C.AOAWlN DO:
O$:
," 67,4011 hours0.0464 days <br />1.114 hours <br />0.00663 weeks <br />0.00153 months <br /> 67.40 22,470/c 22,47%
~ E WIND
-4AOEr SPEED:
WINO SPEED:
."',5.64 knots
~_ ..-. -1 00 5.64 knots 6%" COMdWTS:
6% COMrrIENTS:
AllDosdy An houdy obisnvato.
observation. of of
-cam win*s are calm. winds inou~ded. Each weincluded. ach
'. cl reeadi*g as asesigned celmreadingW'u asrigned a wind direction by wind daeteton by alineer a linear inter-
". 4%
4 polation baxed polation hued onthe meest on the nearest
- (in entime) time)observed noncal-non-calm wind*.
- For the pe:riod.ll1J1991 to
-PotettpnsidlflhJt99 to 613011996 tie 6W30I996 the apot tirport ww" cu.d closed Rbe3X for 0lXI-07OO- 0700LT, tilmief LT, tblmfol'll
bmeJePOrts those iports ev act wsod.ib am DOt <<VaiW:Ile.
EAST:
WINO WI ROSEPREARED NO ROSE PREPNIED SY: ElY:
The Ollie.
Th. Office Ofthe ofth.
Pennsylvania Pennsytvanla Stat. State CilMatologiSt Clim2tolOsUt
%Wt'C SPEED MOELR MOORER:
WNDSP£EO (Knots)
(Knals) AIeamde Al ...nd .. McGimaim Mc:Ginaio
- m
-.22
~22 17-21 17-21 le "M
D r-11--V17 11 7-11 7-11 4-7 4*7 May2007 May 2007 Re,,--
Resulart vectorVecor... SOUTH.. .2 SOUTH
°°" *Clllms 22.47%
0-4
- 0-4 Cats (0-2):
(0-2I "nsYIVa nl a Sl~,
<<*11nnytvanta State t~
I 2M1 degrees 261 degre.s WRPLOT ........ - Laku s,\lironrnlnuf $ott...
Wind Class Class Frequency Frequency Distribution Distribution
-UJ-KU'NV V - State State Colege, College, PA FA 30- 1991 - J-1991-JurMl 1996 e, 2002--
996 Be 2002.-2005 2005 26.4 26.4 25--
22.5 21.6 2'0-18.7 15-10_ 8.9 1.4 Calms 3- '4 4- 7 7 -'11 11-17 17 12 -2 (0 - 2)
Wind Class Wind Class (Knots)
(Source Office Office of State Climatologist website)
Page 2 ofof40 40
PSU RESPONSE TO NRC RAI RAI Relative humidity data for 2007 is shown graphically Relative graphically below and represents typical variations.
State State College 2007 Humidity Humidity Data 120 120 100 100 80 80
?;o
- I'6e -HIGHEST
-HIGHEST RELATIVE HUMIDITY %
RELATIVE %
%'" 60 60 i ~
--- RELATIVE HUMIDITY %
LOWEST RELATIVE LOWEST %
40 AVG AVG DAILY RELATIVE HUMIDITY %
20 00
....0 ....
0 0
0 0
0 0
0 0
0 0
0 0 0 0 0 0 0 0 0 0 0 0 0
~ ~
~
~
~ ~ ~ ~
~ ~ ~ ~
~ M ~ ;;; 5S ;:: ~ iii0) is0 ~
Date (Source WWW.Weatherdata.com)
WWW.Weatherdata.com)
CHAPTER 4 4.1 Section 4.2.2, Control Rods, Page IV-12. Describe how the transient rod responds to a scram signal and loss of site power.
See page IV-12 IV-12 (last paragraph). A three-way solenoid valve applies air to the transient rod air piston in the rod drive cylinder cylinder to allow operation in normal (cylinder following) and pulse (rapid ejection ejection to pre-positioned pre-positioned cylinder cylinder index) modes. On a scram signal or loss of safety system power the solenoid de-energizes solenoid de-energizes and vents air from the cylinder cylinder resulting in gravity return of the rod to the rod bottom position. position. See also SAR Section Section 4.5.1 and Table 4-1 for scram times and reactivity insertion rates. See also the answer to question 13 13.12.12 which discusses discusses protective protective system response on a loss of facility power.
Page 3 of 40
PSU RESPONSE TO PSU RESPONSE NRC RAI TO NRC RAI 4.2 Section 4.3, Reactor Section Pool, Page IV-18.
Reactor Pool, IV-18.
- a. Describe operating restrictions Describe the operating controls regarding restrictions and controls location of the regarding the location the during operation.
reactor during Address the effects of operation. Address radiation damage of radiation damage to thethe concrete pool walls and epoxy concrete liner for the extended epoxy liner 20-year operational extended 20-year operational life.
life.
Operating procedures provide Operating procedures provide controls operating positions in the reactor controls for reactor operating reactor pool.
A position process is used to qualify evaluation process position evaluation qualify new new positions. The process considers positions. The considers factors to ensure the new position does not cause reactor operational issues, reactor operational issues, ALARA ALARA unexpected reactivity concerns, unexpected concerns, reactivity coupling, undesired activation coupling, or create undesired activation of wall materials.
materials.
Currently 4 positions Currently Rabbit one, D20 Tank, Fast Neutron qualified: Rabbit positions are qualified: Irradiation (FNI)
Neutron Irradiation and Fast Flux Tube Tube (FFT).
result in significant operations do not result Reactor operations radiation exposure significant radiation exposure of thethe walls walls or coatings coatings of the pool as the reactor is not operated in close proximately. to the wall.
Also during the 2007 pool drain, testing of the south conducted using micro-south pool was conducted gravity penetrating radar gravity and penetrating indications of structure for voids. No indications radar to examine the structure of degradation or voids were reported.
degradation continued protection To address continued concrete from water damage, the pool coating protection of the concrete modification was conducted on the pool walls and system was upgraded. A multi-stage modification system hydro-active grout to stop through wall floor. The divider wall was injected with hydro-active hydro-lazed to remove loose coatings and a layer of epoxy leakage; the entire pool was hydro-lazed leakage; concrete repair was applied to both sides divider wall (Belzonna concrete Magma-Quartz);
(Belzonna 4111 Magma-Quartz);
entire pool was coated with a nuclear grade waterproof polyurea and finally the entire polyurea liner liner (InstaCote ML-1). This liner material had been previously evaluated (InstaCote@ evaluated by a nuclear nuclear degradation and retained adequate elasticity. Other utility to 200 MRAD with no visible degradation investigated and in some cases areas of the pool which had signs of previous repair were investigated old repair material was removed and new concrete repair material was used (Belzonna (Belzonna@
Magma-Quartz) before the application of the polyurea liner.
4111 Magma-Quartz)
As the original epoxy paint lasted over twenty years with little evidence of degradation degradation from age or radiation (and remains largely intact and in-place), it is anticipated the new anticipated coating will provide similar or improved protection. The concrete walls and floor of the deterioration in areas of higher radiation exposure as pool show no signs of additional deterioration compared to area of low exposure and areas with previous water damage have been degradation of the concrete has been upgraded. Water infiltration that can result in slow degradation addressed by the new pool coating and water loss is monitored on a daily basis (during operation).
Page 4 ofof 40
PSU RESPONSE TO NRC RAI
- b. Provide an evaluation of the age-related degradation of the concrete age-related degradation concrete and reinforcing steel and the ability of the pool to maintain structural in the structural integrity in the event event of design basis seismic activity for the extended extended 20-year operational operational life.
This evaluation evaluation should include include aa discussion discussion of the potential damage and leakageleakage rate from rate design basis from design basis seismic seismic activity.
activity.
As noted in the discussion of the above (4.2.a),
(4.2.a), the integrity of the pool walls and floor evaluated during the 2007 pool drain and refurbishment. The concrete was evaluated concrete walls and and floor of the pool show no signs of structure deterioration structure deterioration from age. No cracking of the structure was in evidence and in general the epoxy coating applied in the 1970's was structure intact and tightly adherent adherent over the vast majority of the pool structure. Some surface and sub-surface (under the epoxy coating) water damage was evident in areas where leakage sub-surface that occurred occurred in the 1960s and early 1970s was repaired. These areas likely had additional additional degradation in the 30+30+ years since the prior inspection and repair. The degradation degradation was located in surface areas of the concrete concrete and structural steel was not exposed. The old repair material material in the degraded degraded areas was removed to expose sound appropriate and repaired concrete where appropriate repaired as described in question 4.2.a response above (Belzonna 4111 Magma-Quartz).
(Belzonna Magma-Quartz). Future water infiltration that can result in slow slow addressed by the new pool coating and water level is monitored deterioration has been addressed monitored on on a daily basis (during operation). Based observed condition of the structure and Based on the observed and testing (penetrating (penetrating radar and micro-gravity micro-gravity in south pool) there is no indication indication ofof structural deterioration that would affect the reactor structural reactor pool's ability to withstand withstand the exceedingly low seismic activity expected in this area (see exceedingly (see SAR Section 2.5.3). We have no specific specific knowledge of any seismic criteria applied applied during the original design.
design .. Pool construction construction drawings, photographs, photographs, and penetrating radar show a robust design with the reinforcement in the original construction significant use of steel reinforcement construction and recent inspection inspection show no sign of structural deterioration.
Below are two images from the original pool drawingsdrawings showing the placement of rebar in the exterior pool wall, floor, and the divider wall.
Page 5 of 4040
PSU RESPONSE TO PSU RESPONSE TO NRC NRC RAI RAI Details DetailsofofPenn PennState StateReactor ReactorConcrete ConcretePool PoolWall WallConstruction Construction Page Page6 6ofof4040
PSU RESPONSE TO NRC RAI 4.3 Section 4.5.1, 4.5.1, Normal Operating Conditions, Page IV-20. Provide an analysis analysis to show worst-case worst-case reactivity reactivity effects of improperly locating the core in the pool, i.e.,
potential interaction interaction between fuel storage and reactor reactor core, or describe the controls (procedural requirements, interlocks, physical (procedural requirements, interlocks, physical barriers, etc.) etc.) that prevent interaction interaction between the core and any fuel in storage.
The reactor reactor core core at the PSBR has four currently allowed allowed operating operating locations:
Location Name Description Description Reactivity Effect Reactivity Effect (Typical)
R1 RI Rabbit 1 Open pool in the south end away from reference ..
None, reference..
walls location FNI Fast Dry 10"10" diameter diameter tube with square face -$0.41 Neutron shielded internally shielded internally from thermal Irradiator Irradiator neutrons and gammas with boron and lead.
FFT Fast Flux Dry 6" 6" diameter diameter tube with round face -$0.30
-$0.30 Tube shielded internally shielded internally from thermal neutrons and gammas with boron boron and lead.
D2 0 D20 Thermal Thermal 24" diameter tank of heavy 24" heavy water +$0.85
+$0.85 Column Qualification of a new operating location is governed governed by operating operating procedures.
procedures. New New locations are analyzed analyzed for reactivity reactivity coupling effects effects in addition to stresses and radiation effects.
Only the D D 2200 tank offers a positive reactivity effect of all other other locations in the pool.
Movement Movement of the reactor is performed only at STANDBY or SHUTDOWN. STANDBY STANDBY is a condition condition defined by procedure procedure that has $4.50 to $5.50 of core reactivity reactivity withdrawn.
Criticality typically occurs occurs at $7.00+/-0.50 depending on core design and time in core life.
SHUTDOWN is defined SHUTDOWN defined as a condition in which the reactor is subcritical subcritical by at least
$1.00 from the reference
$1.00 reference core condition.
If the reactor reactor were at STANDBY STANDBY ($5.50) and moved against against the DD220 Tank, it would would remain shutdown. Alternatively, if the reactor were at full power and accidentally accidentally
.moved away from the FNI (largest (largest negative reactivity reactivity -$0.41
-$0.41 for 2008 Core 53A) or against the D D220 Tank the resulting transient would be well within within the analysis analysis done in the SAR for the Reactivity Reactivity Addition Accident.
Page 7 of40 of 40
PSU RESPONSE TO NRC RAI Page 8 of 40
PSU RESPONSE TO NRC RAI 4.4 Section 4.5.1, Normal Operating Conditions, Page IV-20. What prevents 4.5.1, Normal prevents elements during operation?
movement of fuel elements operation?
Under all conditions (both operating and secured):
~
~ Downward motion of fuel only elements is prevented element is prevented and the element supported by the lower grid plate.
supported
)
~ Lateral motion of the fuel elements is constrained by (lower end of fuel) by a pin lower grid plate and (upper end of fuel) by the upper grid plate.
in the lower
~
) Control rods are vertically supported by the rod drive mechanism with a belowbelow core safety plate installed to prevent the rod from falling through the core in the event of mechanism mechanism failure.
~ Control rod lateral lateral motion is constrained upper and lower grid plates constrained by both the upper (note the transient rod fits inside a guide tube that penetrates through both the upper and lower grid plates) plates)
)
~ Procedures secured or in standby ($4.50 to $5.50 with Procedures require the reactor be secured
>$ 1.00 shutdown) when moving the reactor scrammable reactivity available and ~$1.00 scrammable reactor tower.
Page 9 of 40
RESPONSE TO NRC RAI PSU RESPONSE 4.5 4.5.1, Normal Operating Conditions, Page IV-22, Figure 4-12. What is in Section 4.5.1, in configuration restrictions regarding position E-6 in Core Loading #52? What are the configuration regarding what may be loaded into core grid positions, i.e., must all fuel positions positions be filled with fuel, or can positions be vacant or filled with other reflectors or experiments?
experiments? How is Technical Specification Technical Specification (TS) 5.2 interpreted regarding any restrictions?
restrictions?
Position E-6 in core loading 52 (as well as the current loading 53a) is a normally vacant vacant position (water hole). The position is used for loading of experiments.
core position Section 5 Design Features TS Section Reactor Features describes several features of the facility. TS 5.2 Reactor Core describes describes fuel/core configuration configuration and reflector. TS 5.2 is interpreted interpreted when used in conjunction with TS 1.1.45 and 5.1 to limit the types and concentrations concentrations of fuel, fuel spacing, and reflector reflector to be consistent with the facility design and safety analysis. This specification configurations. Positions in the core specification is not interpreted to limit core physical configurations.
grid may be vacant or contain experiments.
experiments. Experiments loaded into the core must be Experiments loaded accordance with SOP-5 Experiment evaluated in accordance evaluated Evaluation Experiment Evaluation and andAuthorization Authorization which Technical Specifications compliance with Technical experiment for safety and compliance evaluates the experiment (See Specifications (See also TS 3.7 Limitations of Experiments.
Limitations ofExperiments.
4.6 Operating Limits, Page IV-25. Describe any burnup limits on the Section 4.5.3, Operating the fuel and how it is determined when to retire fuel from use in the core.
The fuel at the PSBR has bumups rangmg ranging from ecause of the changing requirements for the reactor Because core, both older and newer fuel elements are typically used in any given core. Only fuel that has failed the PSBR inspection procedure procedure (based on Technical Specifications 3.1.6 Technical Specifications 3.1.6 automatically retired from service.
limits) is automatically service.
4.7 Section Operating Limits, Page IV-25. Provide an evaluation of the Section 4.5.3, Operating the applicability of the General Atomics pulsing temperature limit of 830'C applicability 830°C to the Penn State Breazeale Reactor (PSBR), and ifif applicable, Breazeale describe the impact on the technical applicable, describe specifications and safety analyses. (
Reference:
specifications (
Reference:
"Pulsing Temperature TRIGA Temperature Limit for TRIGA LEU Fuel," TRD 070.01006.05, 070.01006.05, Rev. A.)
General Atomics (GA) publication TRD 070.01006.05 Penn State has reviewed General "Pulsing 070.01006.05 "Pulsing TRIGA LEU Fuel" Temperature Limit for TRIGA Temperature Fuel" and found no basis for additional SAR or or conclusions in the paper.
Technical Specifications limitations based on the conclusions Technical Breazeale Reactor The Penn State Breazeale Reactor (PSBR) is a 1MW 1MW TRIGA Mark III reactor that is approximately 2000MW. The reactor capable of pulsing to approximately capable reactor has been pulsed over 80008000 times since its installation in 1965. The current core (53A (53A - 2008) has 103.5 103.5 fuel normalized power of 1.68 maximum normalized elements with a maximum 1.68 at 600K average fuel temperature.
Transient Rod (pulsing rod) is $2.94 (as reactivity worth of the Transient The reactivity (as measured on on 6/612008). measured peak power and temperature 6/6/2008). The measured 1357MW and temperature for this pulse was 1357MW 460°C with the instrumented 460'C instrumented element maximum elemental power element in the position of maximum power Page 10 of 4040
PSU RESPONSE TO NRC RAI density (MEPD). Given a maximum peak-to-measured peak-to-measured pulse fuel temperature ratio of of 1.6, 1.6, the maximum temperature temperature in the core is no more than 460'C 460°C
- 1.6 = 736'C.
736°C.
In the April 2008 General General Atomics (GA)(GA) publication TRD 070.01006.05 "Pulsing Temperature Temperature Limit for TRIGA LEU Fuel", GA specifically specifically reaffirms their support for the 1150'C safety 1150°C safety limit for stainless stainless steel clad TRIGA fuel. In addition, they recommend recommend a lower temperature temperature constraint for enhanced fuel reliability in pulsing TRIGA reactors of reactors of 830'C.
830°C. This is not a new safety limit, but a way to limit fuel growth during pulsing and extend the useful life of the fuel. For the maximum peak-to-measured pulse fuel maximum peak-to-measured temperature ratio of 1.6 temperature 1.6 referenced in the same document, the result would be a measuredmeasured temperature constraint of temperature constraint 518°C 518'C during a reactor pulse.
Fuel inspection failures (growth or bend bend> > 0.125" 0.125" lAW IAW TS 3.1.6 3.1.6 or difficulty removing removing fuel through the top grid plate) of 12 weight weight percent uranium (w/o) elements elements have occurred occurred at the Breazeale Breazeale Reactor. While While no destructive destructive analysis analysis was conducted, a causal analysis was performed by the staff in 1996. The analysis concluded that operating with analysis concluded "new" 12w/o elements "new" 12w/o elements in the B-ring in the B-ring should should be be avoided due to avoided due the hydrogen to the hydrogen migration migration from pulsing and continued operation at high peaking peaking factors. From 1996 onward, only used 8.5w/o elements are used in the B-ring and 12w/o 12w/o elements are limited to the C-ring and outward. Elements from the set of 12w/o 12w/o elements that had prior use in the B-Ring are not used in the C-Ring either. This fuel management management guidance is expected to provide enhanced enhanced fuel reliability reliability and fewer inspection failures.
In addition, current procedures procedures require the Director's approval for pulsing greater greater than
$2.50 and demonstration demonstration pulses are limited to $2.00. The table below shows values from Core 53A, which are typical for the Penn State Reactor.
TR Reactivity Peak Power Measured Maximum Fuel Pulsed Fuel Temperature Temperature Temperature Temperature (1.6x (1.6x Measured)
$1.50
$1.50 105 MW 105MW 207 0 C 207°C 331 0 C 331°C
$2.00
$2.00 251 MW 286 0 C 286°C 458 0C 458°C
$2.50
$2.50 638 MW 638MW 373 0 C 373°C 597 0C 597°C
$2.75 1065 MW 4070 C 407°C 651 0C 651°C
$2.94 1357 MW 460°C 736°C 736°C Page 11 of 4040
PSU RESPONSE TO NRC RAI 4.8 Section 4.6, Thermal-Hydraulic Section Thermal-Hydraulic Design, Page IV-25. Provide Provide a thermal-hydraulic thermal-hydraulic analysis of the PSBR to demonstrate demonstrate that natural convectionconvection provides provides adequate cooling adequate cooling temperatures below 500°C,
. to maintain clad temperatures 500 °C, as stated in the basis for the fuel fuel temperature temperature safety limit of 1150 0C. °C. Include analysis methods and discussion of the analysis Include a discussion correlations correlations used to determine determine the minimum Critical Heat Heat Flux Ratio (CHFR) for steady-state and transient operation (including (including the reactivity insertion insertion accident). (
Reference:
Reactor Thermal-Hydraulic "TRIGA Reactor Thermal-Hydraulic Study," TRD 070.01006.04, Rev. A.)
Nuclear Reactor is an open-pool TRIGA reactor Breazeale Nuclear The Penn State Breazeale reactor with a hexagonal fuel pitch. The reactor has80-110 fuel elements per core loading. The hexagonal elements are stainless steel clad 8.5 or 12 weight percent Zrl elements Zr1.0H1.65U
.0H 1 65U fuel. The thermal performance of this fuel has been analyzed performance analyzed many times since its first use over fifty years performance of the fuel in the Penn State reactor was investigated by Haag and ago. The performance and Levine in 1973 10. The analysis showed nucleate 197310. nucleate boiling starting starting at 15%
15% power and and continuing up to full power.
continuing The SAR (page XIII-9) states:
The measuredfuel The measured temperature,ttt, fuel temperature, tIC, depends depends on on the temperatureat the temperature at the cladding the cladding surface surface mid-plane, mid-plane, tc. to. Because Because of of the subcooled boiling the subcooled boiling above 200kW, this above 200kW, this temperature rises temperature very slowly.
rises very slowly. The The At is proportional ilt is proportional to -)o"', where (q "')0.33, to (q where thethe ilt At is is difference between the difference the between tc tc and and the coolant saturation the coolant saturationtemperature.
temperature.(14) (14) As As aa result, result, itit is assumed that is assumed that the the surface surface of of the cladding is the cladding is superheated superheated by by aa fixed At degrees fixed ilt degrees and thus and thus at at 11MW, MW, tctc ==140°C.
140°C. This This should should bebe correct correctwithin within +/-1 +/-10Cooe at at 1 1MW MWfor all for all NPj's NPj's greater than 1 greater than 1 and and less than 3.
less than 3.
Reference 14 in the SAR is EI-Wakil Reference El-Wakil "Nuclear "Nuclear Heat Transport" ANS 1978.
The figure below shows the behavior of pool water as the heat flux rises. (DOE-HDBK-Fundamentals Handbook, Thermodynamics, 1012/2-92 DOE Fundamentals Thermodynamics, Heat Transfer, and Fluid Flow, Volume Volume 2 of3).of 3). The figure illustrates the small cladding temperature temperature rise and and change (less then 60 'C) for the large 60°C) large heat flux (over a factor of 10) 10) between between the onset of of nucleate boiling and the departure from nucleate boiling or Critical nucleate Critical Heat Heat Flux (CHF).
Therefore as long as the reactor stays in a region of sub-cooled nucleate Therefore nucleate boiling, cladding temperature will be closely tied to saturation temperature temperature (at ~2 saturation temperature -2 atmospheres) atmospheres) in the core and the cladding cladding will stay below 500'C 500°C as stated in the SAR. If the heat flux reaches CHF, cladding cladding temperatures temperatures will rise rapidly. .
Page 12 of 40
PSU RESPONSE TO NRC RAI RAI 0-4
",:;:@;S3:t,\L-'--+f~-------'----------""~-------'-'----------'-'-~)------'
i;~~':1rQ ']:i?;g; ;\!"Qt?;9~'1~g;~~~9~~;J
',""'~ , ,;" " ,-" '.;,,,';", ir~"'~)'f
.'ter::r,:1,f2e~c,tl:J roe' 0,dIJf\er::.e",.ce ,:\~,Fi;:
Figure 13 from DOE Fundamentals Fundamentals Handbook, Thermodynamics, Thermodynamics, Heat Transfer, and Fluid Flow, Volume 2 of3 of 3 A PSU specific CHF analysis has not been performed. However, the CHF conditions conditions for four other TRIGA reactors was analyzed analyzed in GA document "TRIGA "TRIGA Reactor Thermal-Reactor Thermal-Hydraulic Study" TRD 070.01006.04 070.01006.04 and can be compared compared to the Penn State Br~azeale Breazeale Reactor.
enclosed
- " WSU and TAMU have partially partially open-sided cores cores like Penn State (whiCh (which is open on all sides), but a square pitch of 1.530" 1.530" yielding a channel flow area for the hot 2
0.7390-0.7772in (this gives less flow in the channel, PSU is 1.7" pitch and rod of ofO.7390-0.7772in2 is!.7" flow area of 0.8355in ). 2 2
- OSU has top and bottom grid plate designs much like those at Penn State, but is enclosed thereflector (lower flow into core overall).
enclosed on the sides by the.reflector 070.01006.04 CHFR results for the four reactors are summarized The TRD 070.01006.04 summarized below:
Hot Channel Hot Ch2nnel CHFR CHFU hit (at r2tPd rated now~r~
power)
Reactor Reactor Rated STAT STAT RELAP Minimum Power (McAdams/Bernath) (Bernath/Groen (McAdams/Bernath) (Bernath/Groenveld veld Power at at 1986/2006) 1986/2006) CHF CHF WSU 1.0 MW 1.0MW 4.03/3.41 4.03/3.41 2.76/5.68/3.50 2.76/5.68/3.50 2.76 2.76MWMW OSU 1.0 MW 1.0MW 4.25/2.77 2.36/6.40/3.70 2.36/6.40/3.70 2.36 MW 2.36MW TAMU TAMU 1.0 MW 1.0MW 4.43/3.62 2.87/6.14/3.59 2.87/6.14/3.59 2.87 MW 2.87MW MNRC 2.0 MW 2.0MW 2.45/1.80 2.4511.80 1.75/3.59/1.97
- 1. 75/3.59/1.97 3.50 3.50MWMW The GA document recommends recommends Groenveld Groenveld 2006 be used to analyze analyze hexagonal pitch TRIGA reactors. Bernath is more limiting, so both are shown above.
TRIGA Page 13 of 40
PSU RESPONSE TO NRC RAI PSU RESPONSE RAI conditions for the The conditions The the PennPenn State reactor are State reactor are less restrictive than less restrictive than those shown above above due to the open-sided core and the open-sided and the larger channel size due larger channel hexagonal pitch, so the due to the hexagonal the margin to CHF should be margin higher than any of be higher those shown of those shown above.
The CHF issue issue is also addressed addressed in the Fundamental Fundamental Approach Approach to TRiGA Steady-State to TRIGA Steady-State Thermal-HydraulicCHF Thermal-Hydraulic CHFAnalysisAnalysis -E.E. Feldman (Argonne National
-E.E. Feldman National Laboratory-2007).
Laboratory-2007).
Once again, the Penn State reactor Once specifically analyzed, reactor is not specifically analyzed, but hexagonal pitch but hexagonal pitch TRIGA reactors TRIGA reactors are analyzed analyzed in general. Different Different flow models are used to produce produce rod rod powers for the transition into Critical Critical Heat Flux. Using the the older General General Atomics (GA)Atomics (GA) code STAT code STAT and and the Bernath correlation, the Bernath correlation, lowest rod power that will cause a transition the lowest transition into CHF CHF is 37. 1kW. Using 37.lkW. recommended RELAP5 code and the Groenveld Using the recommended Groenveld 2006 correlation, CHF occurs correlation, occurs at 62. 1kW.
62.1kW.
Since the Technical Specification limit for MEPD Technical Specification MEPD at Penn State State is 24.7kW, there there is a 50% margin 50% margin to CHF in the most conservative conservative prediction, prediction, so no further analysis analysis is warranted warranted and the cladding cladding will not exceed exceed 500°C. 500'C.
Regarding the question of a transient Regarding transient analysisanalysis (reactivity insertion insertion accident), a Penn State State specific CHF analysis for pulsing specific pulsing has not been performed.
General Atomics General Atomics performedperformed extensive extensive pulsing experiments and analysis of TRIGA reactors. In Fuel elements for Fuel elements PulsedTRiGA for Pulsed TRJGA ReactorsReactors GA document E- 117-393, Simnad E-117-393, and others conclude that for a pulse with a peak fuel temperature temperature of almost 1000°C, the 1000°C, maximum cladding temperature temperature only reaches reaches 180°C 180'C at a peak heat flux 2 '
of 0.0125Kw/cm .. The figure below is from'E-117-393.
ofO.0125Kw/cm from E-117-393.
1000r 25, 0 MAXIMUM IUEL TEMPERATURE '*d ,
.ju
- '- x:x
> 5) 600 MAXIMUM HEAT',t;Lux MAXiMUM (W/cm')
HEAT' FLUX (IV/em')
0 <
-400 10 ;2
-COOLANT VELOCITY
'COOLANT VELOCITY (kGIii)
(kG/S)-
'5 MAXiMUM CLAD TEMPERkTUR9 (CC) 0,6L.'" -"--_":'_-.L.._.J' ", ' ,;0:
,lit' ," " , """ "" W' 1 ,t" I10V
'10*'
'O' 10' 10' '10' (siec)
MOTION (soc)
TIME /RO:M:B:~GfNNING'OF TIME FROM 'BEGINNING:'OF ROD MOTION
'FIg;,15:, ~~'Pl!lse, tandlr. pulse hot-elliJ;lent at rcore .edge-m-akixiimu hot-element at';core:edlf!!-malrlmum'temP.Eirature" heat 'flux.
teiiiperature,; lIe'at and coolant Iflux. and velocity ve'rauB' coolant velocity Niersusi time' fiom first,rod tie' fromfirs,t motion. ,
rod ~otio,n, Figure 14 14 from GA E-117-393 E-i 17-393 Fuel Elements for Pulsed Fuel Elements/or PulsedReactorsReactors - Simnad 1976 1976 Page 14 14 of 40
PSU RESPONSE TO NRC RAI The conclusions show relatively relatively low heat flux and considerable considerable margin for cladding temperature temperature even for pulse eventsevents approaching the fuel safety limit. Therefore Therefore an additional additional PSU specific analysis is not warranted.
4.9 Core Configuration Control. Discuss any restrictions regarding reactor condition for fuel movement and explain the purpose of T8 TS 3.2.5.
SOP-3 Core SOP-3 Loading and Core Loading and Fuel Fuel Handling Handlingprovides guidance on core condition during fuel loading.
The following precautions are applicable to the question:
- " The core core neutron source source shall be positioned so that the neutron detector detector measures multiplication.
measures core mUltiplication.
- " The reactor shall be in STANDBY STANDBY condition.
- The minimum minimum count rate interlock may be defeated by momentarily momentarily pushing the LOW COUNT COUNT RATE INTERLOCKINTERLOCK DEFEAT pushbutton.
- " There shall be a minimum minimum of three operable operable control rods in the reactor reactor core.
Anytime an element or group of elements
- Anytime elements is placed in a grid position adjacent to a control rod, that control rod shall be scrammed to check check its operability before further operation is performed.
- Using adequate lighting, all elements loaded loaded into peripheral peripheral positions in the core shall be visually examined seating on the bottom grid plate as each examined for correct seating each element is loaded.
- The visual examination of the peripheral peripheral elements elements shall not be made from the reactor except in the case of elements reactor bridge, except elements that can be viewed using the TV camera and monitor.
- When the keff of the core is less than or equal to 0.99 with all controlcontrol rods atat their upper limit, the fuel maymayor or may not be arranged in a close packed packed array.
The source and detector shall be arranged arranged such that the koff keff of the subcritical assembly shall always be monitored to assure compliance klff < 0.99 when compliance with keff::: when all control rods are fully withdrawn.
As noted above, SOP-3 requires the reactor be at "Standby" "Standby" (defined as $4.50 to $5.50 of of reactivity removed by control rods) to provide insertable insertable reactivity in the event of an unexpected unexpected increase in count rate. TS 3.2.4 Reactor Safety System and Reactor Reactor Safety Reactor Interlocks require that a source level interlock prevent rod withdrawal without neutron Interlocks neutron induced signal on the log power channel. TS 3.2.5 induced 3.2.5 recognizes recognizes that during fuel loading/unloading source count loading/unloading count rate may fall below the interlock interlock setpoint preventing preventing the withdrawal of control rods. TS 3.2.5 allows for momentary withdrawal interlock for momentary defeat of the interlock for control rod withdrawal to "Standby".
control "Standby".
Page 15 of 40
PSU RESPONSE TO NRC RAI CHAPTER CHAPTER 5 5 5.1 Section 5.2, Primary Coolant System, Page V-1. V-1. In In the first paragraph, paragraph, which system is responsible recirculation of the pool water? At the bottom of responsible for the 40 gpm recirculation page page V-3, the last paragraph mentions a primary paragraph mentions primary side flow rate of 400 gpm.
Section 5.2 Primary Coolant System Section System briefly briefly mentions that recirculation recirculation (40 GPM) along with natural natural circulation "some mixing of the pool water". This recirculation circulation provide "some recirculation mentioned is a result of the Primary Coolant Cleanup System System described in detail in described in Section 5.4. Cooling for the pool is provided by the Primary Coolant System Section System which has a flow of 300 to 400 GPM.
5.2 Section Section 5.5, Primary Makeup Water System, Page V-7. What is the Primary Coolant Makeup the power source power source mentioned mentioned for the secondary secondary heat exchanger exchanger pump that is independent independent of secondary pump is listed in Table 8-2 for equipment powered by the site electricity? No secondary the diesel generator.
coolant system pump(s) are located secondary coolant The secondary located offsite (approximately 650 yards away offsite (approximately at the University's University's waste waste water treatment plant) and are powered off the local power power grid backup power source for these pumps. The power in that area. There is no installed backup power supply is independent of facility power in that it is off different different transformers transformers but is not not independent independent of the local power power grid. Provisions Provisions exist at the secondary secondary pump house to temporary power to pumps from a portable generator.
external temporary hook up external CHAPTER CHAPTER 11 11.1 The discussion Chapter 11 of radiation sources of concern focuses almost discussion in Chapter almost Argon-41 , to the exclusion of other radionuclides. However, no mention is entirely upon Argon-41, entirely made of periodic confirmatory made measurements of effluent confirmatory measurements effluent to verify that Argon-41 the Argon-41 is the radionuclide being released.
only radionuclide description of any confirmatory Provide a description released. Provide measurements measurements regarding radionuclides or justify why itit is not needed.
regarding other radionuclides exception of continuous air monitor operation, or specific monitoring designed With the exception designed for an experiment generate an effluent, no periodic confirmatory experiment that might generate confirmatory monitoring monitoring of of airborne releases airborne indications on the air monitors have resulted in releases is conducted. Unusual indications actions to analyze the cause (gamma (gamma spectrum analysis) vicinity of the reactor core during element that passes through or in the vicinity Any element operation during operation may be activated by the high neutron flux levels. For this reason, engineering controls engineering Specifications require a high degree of water purity to minimize and Technical Specifications minimize unintended activation products that may result in loose surface contamination, unintended activation contamination, release to environment or increased radiation exposure to workers. Maintaining the pool water the environment historically prevented unintended activation, contamination, purity has historically contamination, worker exposure environmental release. Water added to the pool is filtered through the and minimized environmental purification system to prevent introduction of undesirable purification undesirable compounds compounds that might result in release.
Page 16 of 4040
PSU RESPONSE RESPONSE TO NRC RAI RAI packaged and disposed of consistent with NRC Any solid wastes (effluents) are packaged regulations.
regulations.
Any Any liquid liquid releases releases (if (if conducted - liquid is typically evaporated as discussed in Section Section 11.1.1.2) would be sampled, analyzed 11.1.1.2) analyzed and transferred transferred to the P A Broadscope PA Broadscope license prior to release.
Section 11.1.1 Radiation Radiation Sources identifies multiple possible release release sources and each source is addressed. Much discussion is focused on Argon-41 Argon-41 due to its prevalence prevalence inin operation, half-life, and percentage percentage of release. Specific Technical Specifications Specific Technical Specifications requirements requirements are in place to evaluate evaluate and control the generation and release of Argon-41.Argon-41.
The facility undertakes undertakes multiple activities to evaluate and minimize the release of Argon-41.
41.
New experiments experiments that might off-gas or generate generate a release evaluated for impact as part release are evaluated of the Experiment Experiment Authorization. During experiments that may generate generate gaseous release, release, additional monitoring may be implemented.
implemented.
Absent Absent an accident scenario scenario or introduction introduction of a contaminant contaminant to the reactor reactor pool through experimental process, Argon-41 remains the major release an experimental release isotope isotope of concern.
11.2 Section 11.2 Section 11.1.4 11.1.4 states the survey equipment equipment that is available and Section 11.1.6 11.1.6 mentions that unannounced radiation and contaminationcontamination surveys are conducted, but but neither section section mentions the minimum frequency frequency of such surveys (i.e., quarterly, annually).
annually). Specify the minimum survey frequency frequency for the controlled controlled areas areas of the PSBR PSBR along along with the basis for the minimum survey frequency.
There There is no internal procedural requirement for unannounced unannounced independent surveys by by Environmental Environmental Health Health and Safety (EHS).
EHS radiation radiation safety personnel personnel perform perform unannounced unannounced radiation and contamination contamination surveys of the facility with a frequency that varies by location location and needs. The most most regular regular survey performed performed by EHS is a (usually) weekly contamination contamination and radiation radiation survey of the facility. This survey includes areas throughout the whole building and the specific locations locations change change slowly with time. The standard frequency frequency for this survey survey is
- weekly, weekly, but due to other work issues probably only 48 - 50 are done a year. The chosen frequency and locations are based upon "good health physics practices," the results of the RSO's RSO's twenty years of experience experience at PSU, and changingchanging research research and vendor support activities at the facility These surveys are in addition to the surveys performed un-contained performed after each use of un-contained radioactive material radioactive material that are performed by the radioactive radioactive material user.
Additionally, operating Additionally, procedures dictate that contamination operating procedures contamination surveys are performed performed daily (Monday through Friday working working days) by the facility staffstaff in multiple in the Permanently installed facility. Permanently installed radiation monitoring is also required to be operational operational perper Technical Specifications.
Page 17 of 4040
PSU RESPONSE TO NRC RAI 11.3 Tritium is an activation product 11.3 product that is generated in the 0 D20 Thermal Column and is monitored periodically. Section 11.4 does does not mention survey surveyor or monitoring monitoring methodology methodology or frequency for tritium. Describe the tritium monitoring methodology and frequency or justify why itit is not needed.
frequency needed.
Operating procedures dictate monthly samples of the D20 Operating D 20 tank. The D 20 tank sample sample is is mixed with liquid scintillation fluid and counted in a liquid scintillation scintillation system with comparison to a known standard.
comparison 11.4 11.4 mention is made of the frequency or criteria for radiation No mention radiation surveys for posting posting beam areas. Describe in beam Describe the minimum frequency frequency or criteria for radiation radiation surveys surveys inin these areas.
Laboratory has a permanently Neutron Beam Laboratory The Neutron permanently installed gamma monitoring system system which is required to be operable operable by TS 3.6.1 3.6.1 Radiation Radiation Monitoring Monitoring Information. This monitor will activate the Building Emergency Emergency Evacuation Sequence if the setpoint is Evacuation Sequence is exceeded. The Beam Port 4 neutron beam exceeded. beam is not accessible to humans during reactor reactor Interlocks will shutdown the reactor if the cave door is opened operation. Interlocks opened (neutron beam port 4 has a large shield structure know as the "beam cave"). The SRO has administrative key control administrative control over the beam cave. Prior to entry into the beam cave following an irradiation, a SRO will move the reactor away, unlock following unlock the cavecave and survey survey the enclosure enclosure for radiation hazards prior to allowing experimenters experimenters to enter the cave.
Access to the Beam Port 7 neutron neutron beam is prevented by permanently permanently installed and locked test equipment and shielding. As noted in SAR Section 11.1.6, locked 11.1.6, unannounced unannounced contamination surveys are conducted radiation and contamination independently by EHS.
conducted independently 11.5 The Controlled Area and Restricted 11.5 Restricted Area as defined in 10 10 CFR 20.1003 are not defined in the SAR. Describe the boundaries defined boundaries of the Controlled and Restricted Areas at the PSBR.
area means "Restrictedarea From 10 CFR 20.1003: "Restricted means an an area, area,access access toto which which isis limited limited by the by the licenseefor licensee purpose ofprotecting the purpose for the individuals against ofprotecting individuals undue risks against undue risks from exposure to from exposure to radiation radiation and radioactivematerials."
and radioactive materials. "
definition in 20.1003, By the definition temporary restricted areas. For example, 20.1003, PSU has only temporary example, during some evolutions personnel during personnel are restricted from entering entering the reactor bay to minimize their exposure and to minimize distractions and exposures exposures to operators. These restrictions within an hour. The neutron beam lab is a restricted area restrictions are normally lifted within when it is posted as a high radiation area. There is no purpose at this facility for a permanent permanent restricted area as defined defined in 110CFR20.1003.
OCFR20.1 003. .
Controlledarea From 10 CFR 20.1003: Controlled area means means anan area, outside of area, outside ofaa restricted restrictedarea area but bitt inside the inside the site boundary, access site boundary, access to to which can be which can limited by be limited by the the licensee licensee for any reason."
for any reason. "
In the sense of the Controlled Area defined defined in 110CFR20.1003, OCFR20.1 003 the area within the facility fence is always controlled by RSEC staff. staff.
Page 18 of 40
RESPONSE TO NRC RAI PSU RESPONSE 11.6 11.6 Chapter 11 does not discuss radiological access access control to the building.
Describe how access control for radiological areas of the building building is accomplished.
accomplished.
All visitors granted access at the fence boundary boundary must report directly to the lobby to sign in. Individuals or groups of individuals are issued electronic educational electronic dosimetry for educational and monitoring purposes. Personnel going beyond the lobby are required to be badged badged and have issued dosimetry or electronic electronic dosimetry. All areas of the building containing radioactive radi material or radiation areas are locked.
Temporary Temporary radiation radiation areas are roped off and placarded, temporary temporary high radiation areas are locked or attended.
11.7 Chapter 11.5 mentions the use of personal dosimetry for those individuals individuals monitored. However, no mention is made if required to be monitored. if the dosimetry is National Voluntary Laboratory Accreditation Voluntary Accreditation Program (NVLAP)(NVLAP) certified as required CFR required by 10 CFR 20.1501(c).
20.1501 (c). Confirm that personal dosimetry used at the PSBR is NVLAP NVLAP certified certified appropriate appropriate for the radiation encountered at PSBR.
radiation encountered Penn State complies with 10 CFR 20.1501(c) 20.1501(c) and uses a NVLAP contract dosimetry supplier.
11.8 The annual 11.8 annual doses on the area dosimeters are lower than natural natural background background
- rates, rates, implying that aa correction implying that correction for natural natural background is being made. Describe this this correction correction and how was it it determined.
The Penn State contract dosimetry supplier follows the standard practice practice of reporting the net exposure exposure for personal and environmental environmental monitoring monitoring dosimeters by subtracting subtracting off the exposure exposure received by the control dosimetry from the exposure received by the individual dosimeter. This includes exposures exposures received received by dosimeters dosimeters in transit from the vendor to Penn State and back to the vendor. The exposuresexposures reported on these dosimeters dosimeters do notnot include include natural background radiation.
11.9 Chapter 11 11.9 Chapter 11 does does notnot mention supplemental supplemental dosimetry dosimetry for multi-badging use such as ring badges. Describe Describe ifif supplemental badges supplemental badges are available available for use.
Supplemental dosimetry Supplemental dosimetry is supplied on an as needed basis. Ring dosimeters are issued to, and required to be worn by, individuals individuals who handle radioactive material in sufficient sufficient quantities that would indicate indicate the possibility possibility of the person exceeding exceeding 10%10% of the annual extremity limit.
Page 19 of 4040
PSU RESPONSE TO NRC RAI 11.10 Section 11.1.5 mounted in select locations dosimeters are mounted 11.1.5 indicates that personal dosimeters locations within the facility to monitor those areas. Describe the provisions made in the the processing routines for these "non-personal" dosimeters that take into account processing account their use manner or justify why such provisions are not needed.
in this manner The area dosimetry dosimetry monitors representative locations for information monitors are mounted in representative gathering purposes gathering purposes and are available available to use in reconstructions of exposures exposures -- although they never have been been needed for that purpose. BasedBased on prospective and retrospective analysis facility exposures, only about six individuals at PSU would require dosimeters analysis of facility at this time.
representative from the dosimetry According to a representative According "area monitors should be dosimetry provider, "area identical to the whole body dosimeters that are being worn by the workforce.
identical workforce. These dosimeters will provide dosimeters provide good estimates of the occupational accuracy ofthe occupational dose. The accuracy of the estimate can be improved if the dosimeters dosimeters are placed placed on phantoms or plastic blocks to backscatter from a human body but this is really only helpful for albedo mimic the backscatter neutrons dosimeters or low energy photons photons fields. If the client fields are medium to high energy photons the phantom energy effect." Since phantom will have little effect." Since the radiation expected to radiation types expected result in individual exposure do not fall into these types, and the area monitors are used only for historical trending, the bare dosimeters dosimeters provide an adequate measurement measurement of of exposure in the areas measured.
exposure 11.11 11.11 Chapter 11 does mention the use of "engineering controls" or minimization does not mention minimization incorporated in the contamination. Describe how these factors are incorporated efforts for control of contamination.
efforts the PSBR radiation protection program.
program.
Specific engineered controls to minimize the spread engineered controls contamination in the reactor spread of contamination reactor facility include the TRIGA TRIGA fuel design and operating operating limits that prevent fuel element element service failure and the purification purification system and coolant coolant operational/Technical operational/Technical Specification Specification limits that virtually eliminate eliminate radioactive material in the pool water and eliminate the pool as a source of contamination.
eliminate contamination. Additionally Additionally engineering controls are engineering controls well integrated Procedures and processes integrated into PSU's radiation safety program. Procedures processes are designed to minimize the direct handling of radioactive designed radioactive material as much as reasonably reasonably achievable. Administrative Administrative controls encapsulation of controls are in place to ensure proper encapsulation of samples for exposure to the core and dry runs are conductedconducted and continuous quality initiatives are applied to situations in which risks of exposure or spread improvement initiatives spread ofof contamination are reasonable.
11.12 Chapter 11 indicates that all persons using radioactive material or persons who 11.12 who are monitored appropriate Radiation Protection Office (RPO) training. The monitored receive appropriate The discussion does not mention refresher radiological mention the period of time before refresher radiological training is required. Describe the periodperiod of time that RPO training is valid before before retraining is required.
working under the R-2 license, there is a regular For operators working regular and detailed bi-annual detailed bi-annual retraining plan approved by the NRC. All individuals, including those under retraining under the R-2 license receive accordance with PSU's Pennsylvania receive annual refresher training in accordance Pennsylvania broadscope broadscope license.
Page 20 of 40
PSU RESPONSE TO NRC RAI CHAPTER 13 CHAPTER 13.1 Section TRIGA Fuel Temperature Section 13.1.A. TRIGA Temperature Analysis of the PSBR. Given all of the the assumptions and uncertainties assumptions uncertainties in deriving Equation (35), i.e., i.e., maximum maximum clad temperature temperature of 140+/-1 ooe, axial peaking 140+/-100C, peaking factor, AA,o &
&B Atg, B,o factors, I:1 experimental measurements, t9 , experimental measurements, measured-to-peak temperature coefficient, initial pool temperature, measured-to-peak factor of 1.6, temperature correlation uncertainty, correlation uncertainty in the maximum fuel uncertainty, etc. What is the overall uncertainty estimates provided temperature estimates temperature Equation 35 (or similar equations for other provided by Equation other instrumented uncertainties in individual instrumented fuel elements)? Discuss the uncertainties individual parameters used in in deriving Equation (35) as necessary deriving necessary to establish the overalloverall uncertainty uncertainty and the the corresponding safety margin.
corresponding equations used in the SAR for determining the measured fuel temperatures The equations temperatures are:
(33) I-14 (33) 1-14 Unburned 12w/o element at steady state 1MW full power power (34) I-14 1-14 Unburned 12w/o element for pulsing (36) I-13 (36) 1-13 Burned (2.2 MW-days)
MW-days) 12w/o element at steady state 1MW 1MW full power (37) 1-13 I-13 Burned (2.2 MW-days) 12w/o 12w/o element for pulsing Equation (35)
(35) is just another form of equation (34). The inherent inherent uncertainty uncertainty in these equations determined by comparing the calculated equations can be determined calculated values to those values measured during the work leading up to the writing of the SAR and is contained in Table measured 13-2.
Steady State Analysis:
Steady
~ ~ ~ ~ ~ ~
~ ~ ~ ~
1-13 1-13 G-8 1.56 1.56 412 412 411 411 0.12%
0.12%
1-13 1-13 G-8 G-8 1.56 411 411 -0.12%
-0.12%
1-13 1-13 G-8 G-8 1.56 411 411 -0.12%
-0.12%
1-13 1-13 G-8 G-8 1.56 411 411 -0.12%
-0.12%
1-13 1-13 G-10 1.39 381 382 -0.24%
-0.24%
1-13 1-13 G-10 G-10 1.39 1.39 382 382 382 382 0.02%
0.02%
~ ~ ~ ~ ~ ~
~ ~ ~ ~
1-14 G-8 G-8 2.01 455 467 -2.6%
-2.6%
1-14 1-14 G-8 G-8 2.01 466 467 -0.2%
-0.2%
1-14 G-10 G-I0 1.84 372* 439 -18.1%*
-18.1%*
1-14 G-10 G-10 1.84 418* 439 -5.1 %*
-5.1%*
1-14 G-10 G-I0 1.84 450 439 2.4%
2.4%
predictions are within 2.4% for new elements The steady state predictions elements and 0.3% 0.3% for used elements. ** Note that the measured measured values 372 and 418°C 418'C for 1-14 I-14 were prior to pulsing.
measurements were performed after the element was conditioned The later measurements conditioned by many 1-13 had already been conditioned pulses. I-13 conditioned by pulsing.
Page 21 of 40 40
RESPONSE TO NRC RAI PSU RESPONSE Pulse Analysis:
~
11!3 ~&uel
-816 Coit ~ $'2. 5 Pulse
.~
0 ~ lHuise l$7.5443 ~
12.9%
~ ~ ~ ~ ~ - ~
1-13 G-8 1.62 509 443 12.9%
1-13 1-13 G-8 G-8 1.62 1.62 511 443 13.2%
13.2%
1-13 1-13 G-8 G-8 1.62 1.62 511 511 443 443 13.2%
13.2%
1-13 1-13 G-10 G-I0 1.54 1.54 453 453 422 422 6.7%
6.7%
1-13 1-13 G-10 G-I0 1.54 1.54 453 453 422 422 6.7%
6.7%
~ ~ ~ ~ ~ ~
~ ~ ~ ~ ~ -~
1-14 1-14 G-8 G-8 2.07 2.07 517 517 518 518 -0.1%
-0.1%
1-14 1-14 G-8 G-8 2.07 2.07 518 518 518 518 0.0%
0.0%
1-14 G-I0 G-10 1.8 456 453 0.7%
0.7%
1-14 G-10 G-I0 1.8 466 453 2.8%
2.8%
The deviations for the burned burned element 1-13 are large in comparison to the unburned element 1-13 1-14. This is explained element 1-14. explained in the SAR as uncertainty uncertainty in the gap temperature and the exact bum-up burn-up effect on the power distribution in the element.
Statereactor Since the Penn State Limiting Safety reactor has set its LimIting Safety System System Setting at 650°C, 650'C, 500'C 500°C below uncertainty is captured in this margin. If we assume a below the Safety Limit, all of the uncertainty maximum measured temperature temperature of 650°C measurement uncertainty 650'C and the maximum measurement uncertainty ofof 13.2%, the maximum temperature 13.2%, temperature at the thermocouple thermocouple location would be only 736°C, over 400'C below the safety 400°C below safety limit. For steady state, the same 650°C650'C maximum maximum temperature uncertainty of 2.4% would yield a maximum temperature with the maximum uncertainty maximum temperature temperature at the thermocouple thermocouple location location would be only 666°C, 484°C below the safety limit.
13.2 Section 13.1.A, TRIGA Temperature Analysis of the PSBR. Explain how TRIGA Fuel Temperature how temperature factor of 1.6 measured-to-peak fuel temperature the measured-to-peak 1.6 for pulses is derived derived from the profile profile described by Equation 4 and the parameters parameters in Table 13-1.
13-1.
The ratio of peak-to-measured peak-to-measured temperature determined by using temperature during a pulse can be determined equation (4) from the SAR. The values for new 8.5 &
equation & 12.0 w/owlo fuel elements are shown in the figure below.
Page 22 of 40 of40
PSU RESPONSE TO NRC RAI RAI Volumetric Heat Generation Generation Rate during Pulsing 20 _
18 18 16 14 12 10 ~
Ego 10 e
.=
o-8.5w/o
- 8.5 w/o 8 g 8 -12.Ow/o 12 - 12.0w/o 66 ~
20 44 2
0 0.00 0.00 0.12 0 .12 00.24
.24 0.36 0.36 0.48 0.60 0.60 0.72 0 .72 Fuel Element Radius (in)
Radius (in1 TemperatureBehavior Levine's paper Temperature Behavior of of 12wlo 12w/o U U TRiGA TRIGA Fuel Fuel (reference 3) states that:
"If a flux depression depression of this magnitude actually occurs within the 12w/o fuel, fuel, the temperature temperature near the surfacesurface of the fuel (maximum fuel temperature temperature during a pulse) would be approximately approximately 1.6 times that measured. The 1.6 increase assumes that adiabatic conditions conditions hold to 89% 89% of the fuel radius."
radius."
This behavior is shown in Figure 14 from the document GA-6216 GA-6216 Characteristics Characteristics ofof Large Reactivity Large Reactivity Insertions Insertions in in aa High PerformanceTRiGA High Performance TRIGA U-ZrH U-ZrH Core.
Core. It shows that the peak temperature temperature is at approximately approximately 89% 89% of the fuel radius immediately immediately following the pulse.
Page 23 of of 40
PSU RESPONSE PSU RESPONSE TO TO NRC NRC RAI RAI
- 150 0' 1500' TMAX:'t50,*C,T'='~50*C
',RAT'COMPUTER CODE 1,600' u:"
U. r---~
0' D% FUEL MI1" 'WATER UJ t=-21-.0 SE.
Sz 30. SE *t >3SEC, 6.0 SEC~" '*t0.075:SEC t ýi SEC/ ..0.601ISEC, OL-__ __ ____ __- L__ ____ __ __
0 6.l 0.3 0.5 0.6 '0.7 0.8 Go* hO
~ -L~~ ~ ~ ~~~ ~ ~
- 0.2 0.4 Q q~~ ;0.2 O,? 0.4 9.50.6 ~0.70.8 O;g 1
- 0 RADIUS, IN.
RADIUS,IN;
.Fig.. i4*Ternpýerazture
~
in fuel meat" oilowihg, pulse
'fig .. J,4~T~mp.eratu~e distribution d~9trib~tion 'inJuelme~doilowingj pulse Figure 14 from GA-6216 Characteristicsof GA-6216 Characteristics Large Reactivity of Large Insertions in Reactivity Insertions a High in a High Performance TRIGA Performance TRIGA U-ZrH U-ZrH Core Core 13.3 Section 13.1.A, 13.1.A, TRIGA Fuel Temperature Temperature Analysis of the PSBR. How How is the the temperature temperature performanceperformance for new fuel batches determined? determined? Does each new batch contain one or more instrumented fuel elements elements that undergo scheme? Is a undergo a calibration scheme?
most limiting instrumented instrumented fuel element selected selected from those available? available?
specific tests are performed No specific performed to determine performance of a new fuel temperature performance determine the temperature batch (meaning shipment or manufacture run). The fuel performance performance in a new batch of of elements is not tested independently, independently, but rather as a part of a new core loading. Each Each new core loading is modeled using a set of proprietary proprietary computercomputer codes (that have been been benchmarked benchmarked against a known core loading) to predict control rod worth, excess reactivity and normalized power. The results are compared to previous core loadings and reactivity Technical Specifications for compliance. New fuel elements are loaded into a new the Technical conservatively to avoid flux and temperature peaking. The instrumented core design conservatively instrumented fuel elements are usually ordered with a new batch of fuel, but it is not a requirement. There is no calibration scheme beyond the in-core measurements and comparison comparison to expected (and predicted) and historical parameter values. New instrumented elements are not assembled and irradiated unless needed to replace the in-use instrumented assembly.
Page 24 24 of of 40
PSU RESPONSE TO NRC RAI Temperature Analysis of the PSBR, Page XIII-17.
13.4 Section 13.1.A, TRIGA Fuel Temperature XII1-17.
How does the data in in lines 9 &
& 10 of Table 13-2 demonstrate the increase in Atg in Lltg diminishes to zero?
deformation of the fuel due to pulsing is well recognized in phenomenon of plastic deformation The phenomenon the TRIGA reactor community. General Atomics discusses an experiment experiment that they performed in GA-6216 Characteristicsof GA -6216 Characteristics of Large Large Reactivity Insertions in Reactivity Insertions in aa High High Performance TRIGA Performance TRIGA U-ZrH Core-1965 (pp U-ZrH Core-1965 30-32). This was 304 stainless steel clad 8.5 (pp 30-32). 8.5 w/o fuel elements, like the Penn State reactor. The Penn State reactor also has 12.0w/o wlo 12.0w/o performance of these elements under pulsing was evaluated by fuel elements. The performance Levine, Geisler and Totenbier behaviorof (Temperature behavior Totenbier at Penn State (Temperature of 12w/o Uranium 12wlo Uranium TRIGA Fuel).
TRIGA Fuel). Their work formed part of the basis of the current Safety Analysis Report (SAR). temperature in an unused fuel element after (SAR). Both works show an increase in fuel temperature after pulsing. The fuel temperature increases asymptotically for pulses of the same magnitude increases asymptotically to a limit after 10-20 pulses. The temperature increase again if the pulse reactivity is temperature will increase previous pulses. Once the new fuel element has been pulsed increased above the previous increased pulsed at the maximum for 10-20 pulses, the temperature will no longer increase. This behavior is consistent temporary swelling of the fuel and the ensuing permanent consistent with temporary plastic permanent plastic deformation of the cladding forming a gap between the fuel and cladding where none was deformation manner to help ensure that "conditions" new fuel elements in this manner present. Penn State "conditions" temperature behavior is consistent over core life.
fuel temperature behavior can be seen in Figure 16 from GA-6216 shown below.
This behavior The pulses in Table 13-2 of the SAR (lines 9-11) 9-11) show the initial temperature of 1-14 at temperature ofl-14 at 372'C 372°C moving to 450°C $2.00-$2.75 pulses. This behavior is in line with 450'C after a series of $2.00-$2.75 elements that were tested to develop the data shown in Figure 3 below.
that of the fuel elements temperature for 1-14 increased by a decreasing amount for each The temperature each set of pulses. After 372-418'C or 12%. The second change temperature went from 372-418°C the first set, the temperature change was 7%,
the third was 2%. Figure 4 below shows that the change change in temperature due to repeated repeated pulsing is not great after the first set of pulses are performed.
Page 25 of 40
PSU RESPONSE TO PSU RESPONSE TO NRC RAI 600 600 FTER 4.00 L-500 ALSE x AFTER 3.00
(.)
'0 I-400 cc ILl
- D 0:,
j 0-.
~
0:
- a. 300 ILl w:E I-ILl I- BEFORE w...J PULSING ILl U.j 200 IL 100 400 600 800 o6oo 1600 1800 IBOO REACTOR POWER, KW REACTOR POWER, KW Fig.
Fig. 16-Fuel 1 ?-Fuel temperature temperature to-obtain to' obtain aa given given steady steady state state reactor reactor power
,power as as aa function function of of transient' tra)lsient'size size performed per"formed on on fuel fuel Figure Figure 16 16 from from GA-6216 GA-6216 F. 500, h.~oI-.
CAIAM TIO kVR h50 t00 3o0 L.
30b 0..
1.
Li 250 (4 1.
4 0-150.1' OCOUpLS 0-iA12f' SRD¶ + 12 WT.% CORK1splMM 6 MUESA12 1 8. ,.'r.%te0 0 10ý wr.% cwg2 A'wr2I *11 lvuaz2
+ .12 Wr.% CIOREIBEFOIC P01111M1 1eo L s;o i, 1)00 01* ~o I 50 50 0 200 0oo0 600 800 1000 0
o 200 1.00 Ge00 8w 000 RF.ACTR0POWEH (KO.
IIA1Yi0lI .OVll (ma) Fiio;urc h-. WF50 STATE MUIL T-li(°ATrURE VS. Pe"Wlo IKd-"L AS A.'F1'krP5 FiISU"~ fl. S'I'F.ADY srATE tUHL TF.'..:tY.RA'l'UftE VS. PoW'JIlJ J.KV';!. AS Ai'iX;1'KD BY BY1*.J1110(
P\JISHl(;
Figures33and Figures and44from fromLevine TemperatureBehavior Levine Temperature Behaviorof of12w/o 12wloUranium UraniumTRIGA TRlGAFuel Fuel Page Page26 26ofof40 40
PSU RESPONSE TO NRC RAI RAI 13.5 Section 13.1.A, TRIGA Temperature Analysis of the PSBR, Page X111-17.
TRIGA Fuel Temperature XIII-17.
The equation equation at the bottom of page XIII-17 uses a tIC ttc of 445°C 445 0C for element 1-14 loaded in in core position G-8. Table 13-2 ttc of 455 13-2 lists a tIC 455°C 0C for element 1-14 1-14 loaded inin core position position G-8. Clarify which is the correct temperature.
The original data sheets are not available, but solving the equation equation at the top of page 445°C yields NPj=
XIII-17 using 445'C NPj = 2.02 as shown in the text. The position of the RSEC staff is that, barring finding the original data sheets showing information information to the contrary, 445'C is the correct 445°C correct temperature.
temperature in question was taken prior to pulsing, the conditions to In addition, since the temperature reproduce it no longer exist. The temperature reproduce determining NP for temperature itself is only useful for determining 1-14 in G-8 in Core 36 and therefore determining the temperature therefore for determining temperature drop across the fuel-cladding temperature drop is used to predict fuel temperatures cladding gap. The gap temperature temperatures using 1-14 as a standard fuel element in any core. This performance performance has been verified elsewhere in the SAR.
Corrected Table 13-2 Corrected 13-2 Fuel Temperature Measurement Data for Loading 36 Temperature Measurement 36 To == 21°C 21'C tpo(°C) Recorder / Meter tpo(OC) Meter ttc( 0 C) ttc(OC) Pulse Fuel Core Pulse Pulse Pulse Element Element Position SS IMW1MW $2.00 $2.25 $2.50 $2.75 1-13 G-8 412 353/379 392/421 3921421 436/467 478/509 1-13 G -8 G-8 411 ..---......
1-13 G-8 411 343/381 387/421 431/461 4311461 478/511 1-13 G-8 G":8 411 350/381 389/419 3891419 435/466 435/466 478/511 1-14 G-8 445 389 427 468 517 517 1-14 G-8 466 395 434 482 518 518 1-13 G-10 G-IO 381 323/333 359/371 359/371 399/412 430/453 1-13 G-10 G-I0 382 311/332 357/373 400/416 400/416 439/453 439/453 1-14 G-10 G-I0 372 339 375 415 456 1-14 G-10 G-I0 418 ---
1-14 G-10 G-I0 450 348 391 425 466 1-14 G-10 G-I0 433 342 373 411 449 Page 27 of 40
PSU RESPONSE TO NRC RAI 13.6 Section Section 13.1.A, TRIGA Temperature Analysis of the PSBR, Page XIII-22.
TRIGA Fuel Temperature XII 1-22.
The maximum fuel temperature 10950C in the first paragraph temperature of 1095°C paragraph is calculated calculated from Equation (35) using a To = = 21'C.
21°C. Describe any restrictions on the initial pool temperature during pulse mode operation temperature 10950C is a operation to ensure the calculated 1095°C conservative maximum?
conservative maximum? .
The pool temperature provides provides a starting temperature for the fuel and is usually discounted in dealing discounted dealing with temperature temperature increases increases due to reactor operation. In Equation Equation temperature increase (35) the pool temperature is added to the temperature (35) increase due to pulsing. On page 22, the temperature temperature of 1095°C determined by multiplying the final measured pulse 1095°C is determined temperature temperature by the internal fuel element correction correction factor of 1.6 l.6 (due to location of the fuel thermocouple). The more correct but less conservative conservative approach Would would be to multiply the only the fuel temperature temperature increase increase by 1.6 and add the pool temperature.
There is no reason to think that the fuel at zero power multiplies the pool temperature There temperature by 1.6, so there is no reason to think that it does so at power. The internal temperature due 1.6, to pulsing pulsing should be corrected corrected by 1.6 only.
temperature difference The result is a temperature described on page difference due to the pulse described page 22 ($3.50 pulse pulse maximum NP =2.2) of 665°C.
on core 36 with a maximum dkp + 0.588)) tt -
- ttcj 140°C 1400C tpoj TPoot=
tpoj -- Tpool 72.2 *
= ((72.2
- dk p + 0.588 * .C Cf f
140 0 C 499 -- 140°C tpoj - TPoot tpoj - TpOOl = (72.2
- 0.007 *
(72.2
- 0.007
- 2.5 + 0.588) *
+ 0.588)
- 1 tpoj - TP001 =665'C.
temperature anywhere The maximum temperature anywhere in the element element (1-14) is given by:
tpoj*
tpoj * (1.6)
(1.6) -- Tpoo1 TPOOl = 6650 C
- 1.6 +
665°C Tpoo1
+ TpOOl = 1064°C + + TPooZ TPOOl temperature could be as high as 86°C before This shows that pool temperature before the safety limit was approached.
approached.
temperature is limited by Technical Pool temperature Technical Specifications Specifications (3.3.6) to 60°C.
60'C.
tpoj * (1.6) - Tpoo 0 0 = 665-C
- 1.6 + 60 C = 1064°C + 60'C = 1124 C 0
Therefore, no additional restriction on pool initial temperatures Therefore, temperatures need be applied.
Page 28 of 40
RESPONSE TO PSU RESPONSE TO NRC NRC RAI RAI 13.7 Section 13.7 Section 13.1.A, 13.1.A, TRIGA TRIGA Fuel Fuel Temperature Analysis of the PSBR, Page Temperature Analysis XIII-22. Is Page XIII-22.
nd Equation (28)
Equation (28) referred referred to in the 22nd paragraph paragraph the correct correct reference reference or should it be or should be Equation (35)?
Equation (35)?
typographical error exists A typographical exists in the SARSAR and the sentence sentence should should refer refer to Equation Equation 35.35.
paragraph should read:
The paragraph The in the future, Equation Thus, in Equation (35)
(35) can used to evaluate can be used evaluate and and predict predict tpoj.
tpoj.
requires placing 1-14 This requires 1-14 in the hottest spot in the the core core and running running at at evaluate tt,.
1MW to evaluate 1MW ttc. Then Then starting withwith aa $2
$2 pulse, Equation (35) pulse, verify Equation (35) and predict predict tpo tpoj 0 j for the high values values of 6kp.
8kp. The The tpoj related related to a $2
$2 pulse will will be more than than 100°C below below tpoj tpoj for a $2.75 pulse pulse and eveneven much lower lower than that for a $3.50 pulse ...
$3.50 pulse...
13.8 Section 13.1.A, TRIGA Fuel Temperature Analysis of the PSBR, Page XIII-24.
13.8 Section 13.1.A, TRIGA Fuel Temperature Analysis of the PSBR, Page XIII-24.
Should the second line in Table 13-6 be position position G-10?
G-10?
typographical error exists in the SAR and the table should read A typographical read as shown below.
Table 13-6 13-6 Evaluation of NPj's from 1-13 Data Evaluation ofNPj's 1-13 (2.2MWD (2.2MWD depleted)
Core Core tt, [0C]
ttc [°C] NPj NPj Steady State NPj (Average)
NPj (Average ) Pulse Position Equation Equation (36) Equation (37)
Equation (37)
G-8 411 1.56 1.56 1.62 1.62 G-10 G-IO 382 1.39 1.39 1.54 1.54 For comparison, see 1-14 data in Table 13-3. 13-3.
13.9 Section 13.1.B,13.1..B, Evaluation of the LSSS, Page XIII-25. In the last paragraph, paragraph, the the temperature for a $3.50 maximum fuel temperature maximum $3.50 pulse is evaluated as 1095°C 10950C using Equation Equation (34) for element 1-14 and a NP of 2.2. Provide a similar calculation for element 1-15 showing the corresponding corresponding equation and values for element 1-15. 1-15.
The instrumented fuel element 1-15 1-15 has approximately 200% of the bumup burnup of element 1- I-of 2008. 1-16 is the instrumented element that feeds the safety system. The 13 as of2008.
burnups bumups are shown below.
Instrumented Current Burnup Loaded Last Core Loaded Fuel Element [MWD/MTU]
1-13 Core 48A (1998) 1-15 Core 53A (2008) 1-16 Core 53A (2008)
Page 29 of40 of 40
PSU RESPONSE TO NRC RAI The equation used for 1-13 1-13 in the SAR is tpoj =
tpoj 1.475x10 4
- NPj
= 1.475xl0 NPj
- dkpuise dkpulse ++ 80
- NPj NPj + + To To (37)
This was developed This developed using equation (4) (4) and different shape coefficients for the radial power shape. Plotting this flatter powerpower shape shows a peak-to-measured peak-to-measured fuel temperature temperature during a pulse of 1.1 - 1. 1. This is much lower than the 1.6-1 for a fresh element. The maximum fuel temperature temperature anywhere anywhere in the element is highest for the bumup elements lowest bumup elements due to the extra peaking. Performing Performing the calculation in Section Section Evaluation 13.1.B, Evaluation 13.1.B, of the LSSS, Page XIII-25, would yield (for 1-13 or 1-16) 1-16) 842°C.
The maximum temperature 1-15 should be even lower since there is considerably temperature for I-IS considerably more bumup and therefore an even flatter power power shape.
13.10 Section 13.1.2, Insertion of Excess Reactivity, Section 13.1.2, Reactivity, Page XIII-33. Provide a more detailed explanation of how the data for the maximum detailed explanation maximum measured $2.25 $2.25 pulse pulse temperature for element temperature 1-15 and Core Loading 47 was used to calculate element 1-15 calculate the maximum maximum temperature for the reactivity insertion accident fuel temperature accident at an initial power of 1.15 MW.
What is the NP for the location location of element 1-15 1-15 in Core Loading 47? Is the reactivity insertion accident based on the TS NP limit of 2.2 and maximum elemental insertion accident elemental power density density of 24.7 kW?
temperature profiles (pulse and steady state) are assumed to be additive. Since The two temperature the shapes of the profiles somewhat opposite, the resulting combined profile is lower profiles are somewhat lower than adding two profiles of similar shapes. The figure below below shows an example of the phenomenon. The precise approximated and do not precise shapes of the profiles are only approximated represent any specific element specific element or core loading. The figure shows only one possible result result phenomenon with a measured pulse peak temperature of the phenomenon 380'C and a measured temperature of 380°C steady steady state temperature of temperature 650°C.650'C. The right end of the plot shows the edge of the interior of the fuel meat and does not include the cladding or the gap. The temperature interior temperature adiabatic limit is shown drop for pulsing outside of the adiabatic shown for illustration only.
Page 30 of of40 40
PSU RESPONSE RESPONSE TO NRC RAI RAI Example Temperature Example Temperature Profile in a Fuel Element Element 1200 -
1000
- 000 8000 --
.so......
~ 800
...CII "8 a::
- J IV 6 00 e - _
ECII
- J Q,
600-600 ';: - - Pulsing PuI5ing Temp.
Temp.
0 E ~
CII I- Jl:i >< - Steady-StateTemp.
Steady-State Temp.
'ii
- J u..
400 ~ 400 - Combined Temp.
--Combined Temp.
200 200 00 0
0 0.12 0.24 0.36 0.36 0.48 0.6 0.6 0.72 0.72 Fuel Element Radius Radius [in]
1-15 in core 47 was in position G-8, the same as 1-13 in Core 36. The cores were similar I-IS in size (Core 36 had 92 fuel elements elements and Core 47 had 94 fuel elements) and I-IS 1-15 and 1-I-13 were both well burned 12w/o elements. elements. Table 13-6 in the SAR gives I-13 1-13's
' s NP in G-8 as 1.56 for core 36. 36. This is a suitable estimate for 1-15 I-IS in G-8 in core 47 since the fuel loadings and locations are similar.
The analysis in the SAR is not based on either the MEPD of 24.7kW/element 24 .7kW/element or the NP limit of 2.2. The instrumented element element used for the measurements measurements for Core 51 and all other pulse measurements measurements in all other cores is in the position of MEPD (Technical (Technical Specifications allows for a different location, but adjustments to the analyses Specifications analyses must be made) and maximum NP since since Penn State uses a 12w/o instrumented instrumented element for safety channel monitoring. Instead, the analysis is based on actual core performance performance for very limiting core conditions (i.e. (i.e. most reactive core loaded since 1995). 1995). This analysis was included in the SAR only as an example of the robustness of the TRIGA fuel design. design. The SAR discusses the reasons why this type of event is highly unlikely at the Penn State reactor.
The following analysesanalyses are included as additional examples of the stability of the fuel using more recent core designs and parameters.
Page 31 of 40
PSU RESPONSE TO NRC RAI Core 51 (2000) was the most reactive core in recent years and can be considered considered a maximum as long as Penn State has a thermal column that adds positive reactivity. It also had the most reactive Transient Rod since 1995. The parametersparameters for Core 51 are shown below:
Core 5151 (2000) Parameter Value Control Rod Worth $13.67
$13.67 Critical Rod Worth $7.14
$7.14 Excess Reactivity Reactivity (cold (cold && clean core) $6.53
$6.53 Shutdown Margin $2.46
$2.46 Worth of Transient Rod $3.08 Projected Measured Measured Fuel Temperature at 535 0 C 535°C 1.15MW 1.15MW Projected Reactivity Loss at 1.15MW 1.15MW $4.85 465 0C Peak Measured Measured Pulse Temperature Temperature at $3.08 465°C If the reactor could pulse from 1.15MW with the full worth of the Transient Rod, the two temperatures temperatures would be added added to yield a final maximum maximum temperature temperature of approximately approximately 1000°C. This would require and excess reactivity reactivity $4.85+$3.08 $7.93, which is far of $4.85+$3.08 = $7.93, beyond the Technical Specifications limit of $7.00 The actual value is always always lower due to the positive reactivity of the thermal thermal column.
column.
For a limiting analysis using a NP = 2.2, the partially partially burned burned element 1- 16 (should element 1-16 (should perform similarly to 1-13 1-13 in the SAR) produces produces the hottest temperatures.
temperatures" Equation (37)
Equation (37) from the SAR is used for this calculation. There is no reference reference power defect for 1.15MW. Since Core 51 was high reactivity reactivity core, those parameters parameters can be used. There are two cases that can be considered considered using the Core 51 data. The first case is a pulse of of
($3.08) from the highest power that can be achieved full worth ($3.08) achieved with three rods (TR on the bottom). The second case is starting from 1.15MW and pulsing with as much worth as is left in the TR (assume (assume a full $7.00 of excess excess reactivity). Both cases are prohibited by by interlocks and procedures. The second second case is physically improbable improbable if not impossible.
Case 1:1:
Excess Reactivity - TR Worth = $6.52-$3.08
$6.52-$3.08 = $3.45
$3.45 Reactor Power at $3.45 = 750kW Fuel Temperature Temperature at 750kW 430'C 750kW = 430°C Peak Pulse temperature temperature for 1-16 at NP=2.2 NP=2.2 and $3.08 = 670°C670'C Final Fuel temperature temperature (sum 1MW SS and pulse) = 1100°C (sum of IMW 100°C Case 2:
Pulse reactivity reactivity remaining (1.15MW (1.15MW = $4.85) = $7.00-$4.85 = $2.15 $2.15 Fuel temperature 1.15MW = 535°C temperature at 1.15MW=
Peak Pulse temperature 1-16 at NP=2.2 temperature for 1-16 NP=2.2 and $2.15 = 458°C458°C Final Fuel temperature (sum (sum of 1MW IMW SS and pulse) = 993°C 993°C Both cases are below the safety limit for the fuel.
Page 32 of40 of 40
PSU RESPONSE TO NRC RAI Section 13.1.3, Loss of Coolant, Page X111-34.
13.11 Section XIII-34. Provide an estimate of the the radiation doses from a loss-of-coolant radiation accident outside the Controlled Area loss-of-coolant accident Area..
The Loss of Coolant Accident Accident as described described in the facility SAR analyzes analyzes a loss of pool water The pool drains "
operator actIOn and no operator IS assumed. The closest uncontrolled area is the fenceline action is fence line to the north of the reactor pool. The fence is about 1100 00 feet from the core in its normal location at the Rl R1 position in the south half of the reactor pool. The exposure rate at this point was calculated calculated using MCNP 5.0 and checked checked by hand using an analytical method method as described described by Foderero in the Photon Shielding Manual(1976).
Photon Shielding Manual(1976}. The MCNP calculations were higher, so they will be used here.
Three scenarios are shown in the figures below. The first case Three case is the activity in the core and related exposure rate at the fence (following a LOCA) for a power history for 168MWHlweek for the week prior to the LOCA. This is far beyond what is possible 168MWH/week given an excess reactivity reactivity limit of $7.00
$7.00 due to xenon poisoning. The second case is for 40MWHlweek. This is probably a practical 40MWH/week. practical limit for operations considering fission operations considering product poisoning. The month with the highest usage in the last four years was July 2008 average of 25MWH/week.
with a weekly average 25 MWHIweek. The average use is 14MWH/week.
14MWH1week. The third case is for 20MWHlweek.
20MWH/week. This is an appropriate case for the way the Penn State reactor reactor tends to operate operate since since greater than ninety-five ninety-five percent percent of all months are below this level calculated using a method found in McClellan operation. Core activity is calculated of operation. McClellan facility SAR.
Page 33 of 40
PSU RESPONSE TO NRC RAI 13.12 13.12 Section 13.1 .7, Loss of Normal Electric Power, Page XIII-44. Assuming the 13.1.7, the shutdown describe if and how the reactor would shutdown reactor is operating, describe on loss of on-site generator functioning, electrical power with the diesel generator generator functioning , and without the diesel generator functioning. How functioning. emergency exhaust How does loss of power to the facility exhaust system, emergency exhaust system, or the continuous air monitors cause a shutdown?
shutdown?
If the reactor is operating and a loss of power to the facility occurs, the UPS will power If the critical reactor safety and instrumentation (including the radiation monitor instrumentation systems (including system). No automatic automatic scam is initiated by a loss of facility power.
exhaust fans, emergency The facility exhaust continuous air monitor pumps emergency exhaust fans, and the continuous receive backup power from a standby facility diesel generator. The diesel was installed receive installed emergency lighting supplies. With the availability of excess to provide fire system and emergency excess capacity capacity on this diesel, the reactor UPS and other important important loads were added (normal capabilities are not assumed nor and emergency ventilation, air monitor pumps). These capabilities nor relied upon to continue operation in the case of loss of site power.
initiate a scram if On a loss of facility power, DCC-X will initiate it senses ifit senses loss of both facility (determined by position switches system fans (determined exhaust system If the diesel switches on the fan louvers). lithe re-powers the fans before the louvers close on both fans the reactor will continue to shutdown the reactor is dictated by procedure.
operate and operator action to shutdown operate On loss of power to both facility exhaust fans, DCC-X will initiate a reactor scram when it senses the louvers are closed.
Page 34 of 40
RESPONSE TO NRC PSU RESPONSE NRC RAI Loss of power Loss power to the emergency exhaust the emergency would cause no automatic alone would exhaust alone action; operator automatic action; operator action to comply comply with the the Technical Specification limits would Technical Specification would be required.
instrumentation is powered continuous air monitor instrumentation The continuous powered from UPS. The air pumps from UPS. pumps are powered from the diesel backed powered air pumps alone would backed distribution. Loss of power to the air would require operator action to comply with the Technical require operator Specification limits.
Technical Specification of 40 Page 35 of40
PSU RESPONSE TO NRC RAI Questions Questions Related to Financial Financial Qualifications Qualifications and Decommissioning Decommissioning Pursuant to 10 CFR 50.33(f)(2),
50.33(f)(2), "applicants to renew or extend the term of an operating license license for a nonpower non power reactor shall include include the financial information that is required for an initial license." To comply comply with this requirement, please please provide the following updated and supplemental information information to the 2005 2005 Pennsylvania State University University (the University) application for aa renewed license license for the PSBR.
- 1. Under 10 10 CFR 50.33(d), certain information information is required by an applicant, the the University, as applicable. The applicationapplication states that the University University is a non-profit non-profit university, organized under the laws of the Commonwealth university, organized Commonwealth of Pennsylvania.
Pennsylvania. To comply comply with 10 CFR 50.33(d), please state the organizationalorganizational form of the University University (e.g.,
corporation) corporation) and if a corporation corporation provide provide the information information required under 10 CFR CFR 50.33(d)(3).
50.33(d)(3). If If none of the provisions provisions of 10 CFR 50.33(d) are applicable, please so state.
None of the business descriptions descriptions listed in 10CFR50.33(d)(3) 10CFR50.33(d)(3) are exactly applicable. The Pennsylvania State University Pennsylvania University was originally chartered by an act of the Legislature of the Commonwealth of Pennsylvania Commonwealth Pennsylvania on February 22, 1855. The Morrill Morrill Act of 1862 (known as the Land Grant Act) of the Congress of the United United States was accepted accepted by the Pennsylvania Legislature Pennsylvania Legislature in 1863 and Penn State was thereafter thereafter designated designated as the institution in Pennsylvania Pennsylvania to receive receive the benefits of the act.
The Board of Trustees Trustees of The Pennsylvania Pennsylvania State University is the corporate State University corporate body established by the charter with complete established responsibility for the government complete responsibility government and welfare of of the University University and all the interests pertaining thereto thereto including students, faculty, staff, staff, and alumni.
Penn State's 32-member 32-member Board of Trustees is composed composed of the following: Five trustees serve in an ex officio capacity capacity by virtue of their position position within within the University University or the Commonwealth of Pennsylvania. They are the President of the University; the Governor Commonwealth Governor Commonwealth; and the state secretaries of the Commonwealth; secretaries of the departments of Agriculture; Education; and Conservation Conservation and Natural Resources. Six trustees are appointed by the Governor; nine trustees are elected by the alumni; six are elected Governor; elected by organized organized agricultural agricultural societies within the Commonwealth; Commonwealth; and six are elected by the Board of of Trustees representing business and industry endeavors. endeavors. More details as to the current current membership of the Board and bibliographicbibliographic information information are available at http://www.psu.edu/trustees/selection.html.
http://www .psu. edu/trusteesl selection.html .
Pennsylvania State University is not owned, controlled, or dominated The Pennsylvania dominated by an alien, a foreign corporation, or foreign government.
Page 36 of 40
PSU RESPONSE TO NRC RAI PSU RESPONSE RAI required by
- 2. As required by 10 10 CFR 50.33(f)(2), applicant shall submit 50.33(f)(2), "the applicant estimates for total submit estimates annual operating annual operating costs for for each of the first five years of operations first five facility." Since operations of the facility." Since information provided the information provided in in the University's University's 2005 2005 submittal license is renewed license submittal for aa renewed is now now out of out of date, provide provide the estimated estimated operating operating costs each of the years costs for each 2009 to 2013 years 2009 2013 five-year period after (the first full five-year after the projected projected date date of license renewal) as well license renewal) well as thethe sources of funding to cover University's sources University's cover the operating costs for the PSBR PSBR for the aboveabove five years.
years.
Radiation Science Radiation Science andand Engineering Engineering Center Center (RSEC) Operational Costs have remained (RSEC) Operational remained relatively stable relatively stable over over the last several several years $1.4 M per year. The approximately $1.4 years at approximately The reactor reactor major portion of this budget support costs are the major support budget but are not separated separated from the the Center.
O&M costs O&M costs are about about $300,000
$300,000 perper year (does not include include utilities or building building maintenance provided maintenance provided by by the University)
University) and unburdened salaries and unburdened salaries support is and student support approximately $1.IM.
approximately $1.1M. Approximately Approximately $700,000 sourced from the College of
$700,000 is sourced of Engineering in salary Engineering salary support support and $700,000 from service activities. In 2007, the University provided University provided nearly $200,000 in additional nearly$200,000 support for refurbishment additional support refurbishment and upgrade reactor pool coatings. Research activities of the reactor activities provide provide additional monies for new new equipment, support, and use.
Year Estimated Costs
- Estimated Costs*
FY 2009 $1.47M
$1.47M FY 2010 $1.54M
$1.54M FY 2011 $1.62M
$1.62M FY 2012 $1.70M
$1.70M FY 2013 $1.79M
$1.79M
- Assumes unburdened salary salary cost, include. utilities does not include utilities or RSEC building maintenance maintenance For information on The Pennsylvania State University attached University financial sources see the attached Statements" document for Fiscal Year Ended June 30, 2007.
"Audited Financial Statements" decommissioning the reactor was
- 3. The application indicates that the cost for decommissioning was
$10,540,718 in 2006 dollars. To comply with 10 CFR 50.75(d), please update
$10,540,718 update the the decommissioning application to 2008 to include: (1) a current (2008) cost estimate for decommissioning application the facility showing costs of labor, waste disposal, other items (such as energy, equipment, and supplies), a contingency factor (normally 25%), and total decommissioning costs in 2008 dollars to meet the NRC's radiological release criteria; decommissioning statement of the decommissioning method to be used (e.g., DECON); and (3) a full (2) a statement identification of the specific means of adjusting identification adjusting the cost estimate (e.g., consumer price price NUREG-1307, or labor price index) periodically over index, waste burial cost data from NUREG-1307, the life of the facility and a numerical example updating the 2008 cost estimate.
The decommissioning decommissioning costs of any license are hard to quantify after completion and even harder to predict. For this reason the costs of previous decommissionings are taken as a basis for estimating PSU's future costs. Actual detailed costs were obtained from the Technology and estimates were obtained from the University of Georgia Institute of Technology of Virginia.
of 40 Page 37 of40
RESPONSE TO NRC RAI PSU RESPONSE decommissioning of the Georgia Institute of Technology The costs for decommissioning Technology 5 MW reactor were Georgia Institute of Technology Georgia Decommissioning Costs Technology 5 MW reactor Decommissioning provided by Bill Miller, project project manager manager in 2001.
Basic Tasks Cost Consultant Support &
Consultant & Characterization Characterization $242,100 Decommissioning Contract Decommissioning Contract $5,948,282
$5,948,282 Executive Engineer $728,682
$728,682 Allowance ALARA Allowance $39,171 Special Special Costs* $161,718
$161,718 Resident Inspector Inspector $21,511
$21,511 Total $7,141,464
$7,141,464
- Health PhYSICISt Overtime, vIdeo Physicist OvertIme, relocate rad storage video record, relocate storage area.
University of Virginia Reactor Decommissioning University Estimates Decommissioning Estimates (Included parts of other licenses) licenses) provided Benneche in 2003.
provided by Paul E. Benneche 2003.
Basic tasks Cost Outside consultant site characterization preparation.
characterization and plan preparation. $250,000 decommissioning the facility (initial External contract for decommissioning (initial $4,500,000
$4,500,000
$3.5M, current estimate of $4.5M.)
estimate of$4.5M.)
- Internal costs (This includes about 10 - 15 person years for overseeing overseeing UV's program and complying complying with reactor reactor license requirements.)
requirements.)
(Assuming $80,000
$80,000
- 1.38 (for benefits)
- 15 years = =
1,656,000) 1,656,000) $1,656,000
$1,656,000 described in a personal
- As described communication from personal communication Paul Benneche, internal costs to UV were not well Benneche, the internal documented. However estimated 10 - 12 person-years However he estimated person-years for UV to oversee the decommissioning. Fifteen person-years assumed.
Total $6,406,000
$6,406,000 There There was considerable concerning the applicability of these Georgia Tech considerable discussion concerning Tech and University of Virginia numbers to the Penn State reactor facility. For the purposes overestimate the cost, but is of this plan, PSU feels that accepting the higher number will overestimate a prudent course of action.
The expectation contractor is contrary to one of Penn State's basic expectation of hiring an outside contractor basic decontamination and assumptions for decommissioning. Penn State expects that the decontamination decommissioning would be performed by reactor staff and tradesmen from the Office decommissioning of Office of Physical services and oversite provided radiological services Physical Plant with radiological Environmental Health provided by Environmental and Safety. Special tasks for which PSU does not have the expertise will of course be compared to the above estimate.
contracted out. This may result in significant savings as compared contracted decommissioning this facility will The actual decision as to the best personnel to use for decommissioning Page 38 of 40
PSU RESPONSE TO NRC RAI be made after the decision decommission has been made. The decision will be based decision to decommission on the level of expertise expertise of the available staff, the finances of the situation, and many many other less quantifiable factors.
Based Based on PennPenn State's long standing standing policy, PSU will decontaminate decontaminate the facility to the point where it will be suitable for free release release with no institutional controls.
To estimate estimate the current (2008) costs, we assume accuracy of the 2001 costs and add an an annual annual 5%5% inflation adjustment to bring the current estimate to about $10M. addition
$1 OM. In addition PSU adds a 25% contingency factor to bring the total current costs to about $12.6 25% contingency $12.6 M.
- 4. The
- 4. The application application statesstates that the University that the University is is using using a self-guaranteeto a self-guarantee to fund and carry fund and carry out its out decommissioning activities.
its decommissioning activities. TheThe NRC NRC staff staff recognizes recognizes that that the the University University is is using using the self-guarantee the self-guarantee for for the PSBR and the PSBR and five other other NRC-licensed NRC-licensed facilities.
facilities. For Forrenewal renewal of of the PSBR the PSBR license, please provide license, please provide the following:
the fol/owing:
- a. An
- a. An updated updated self-guarantee, including the self-guarantee, including the current current (2008) decommissioning cost (2008) decommissioning cost estimate for the PSBR and the most recent decommissioning estimate for the PSBR and the most recent decommissioning cost estimates for cost estimates for the other NRC-licensed facilities the other NRC-licensed covered by facilities covered by the the self-guarantee.
self-guarantee. The The updated updated submittal must submittal must include include aI/ all the the documentation documentation listed listed in in Section Section A. A. 14.3 14.3 of of NUREG-NUREG-1757, Vol.
1757, Vol. 3,3, "Consolidated "ConsolidatedNMSS NMSS Decommissioning Decommissioning Guidance."Guidance."
- b. Documentation
- b. Documentation that the signator that the signa tor of of the the self-guarantee, self-guarantee, if not the if not Chief Executive the Chief Executive Officer or Officer or Chief FinancialOfficer Chief Financial Officer (e.g., corporate controller),
(e.g., corporate controller), hashas the the authority authority to to bind the University in the self-guarantee.
bind the University in the self-guarantee.
If the
- c. If updated self-guarantee the updated self-guaranteeagreement agreement will will be be in in the same format the same format used used inin the the applicant'sJuly applicant's July 12, 12, 2007 2007 self-guarantee self-guaranteeagreement, agreement,make make the the following following revisions to revisions to the the 20072007 format:
format:
Delete the (1) Delete the word word "beneficiary" "beneficiary"in in the first paragraph the first paragraphand and in Recital 13.
in Recital 13.
(2) To comply with To comply Section II.B(3) with Section II.B(3) of Appendix C of Appendix C to to 10 10 CFR CFR 30 30 in in Recital Recital 8,8, change the change the time period that time period that the the guarantor guarantoragrees agrees to to submit financial submit financial statements and statements and financial financial test test data data annually annually from from 180180 days days to to 9090 days days of of the the close of close the University's of the University's fiscal fiscal year.
year.
Delete Recital (3) Delete Recital 10 10 as as these these requirements requirements for for transfer transferof of ownership ownership of of the the licensed activity licensed activity are already covered are already covered under under 10 10 CFR CFR 50.80, 30.34(b), and 50.80, 30.34(b), and 70.32(a)
- 70. 32 (a)(3) (3),, which which requires requiresprior NRC approval.
prior NRC approval.
Commonwealth of Pennsylvania In early 2008, the Commonwealth Pennsylvania was awarded Agreement Agreement State Status.
For F or this reason, PSU now has only two NRC regulated regulated license. PSU is will of course provide the necessary necessary funds for decommissioning decommissioning these licenses. The current estimates for decontamination decontamination and decommissioning decommissioning are shown below. The two letters that supply supply the required certifications and recitals required certifications recitals are attached.
Page 39 of 40 40
PSU RESPONSE RESPONSE TO NRC RAI RAI License ## License Description License Description Estimate based Certified Certified Amounts and Docket ## on year 2001 or Current CostCost dollars Estimates R-2 Research Research Reactor $7,141,464 $10,048,757
$7,141,464 $10,048,757 050-0005 050-0005 SNM-95 Special Nuclear Material Material $15,000 $21,106
$15,000 $21,106 70-113 70-113 Sub total $10,069,864
$10,069,864 25%
25% contingency fund $2,517,466 Total Estimated Costs:
Total $12,587,329
$12,587,329 Penn State's State's 2008 final financial statements statements are not available within 90 days of the close close of the University's University's fiscal year. This is because because of the length of time necessary necessary for auditing the finances of this large and complex institution. The audited financial statement for Fiscal Year 2007 is attached.
References:
References:
- 2. DOE-HDBK-I012/2-92 DOE-HDBK- 1012/2-92 "DOE Fundamentals "DOE Fundamentals Handbook, Thermodynamics, Thermodynamics, Heat Heat Transfer, and Fluid Flow", Volume 2 of Volume 2 of3 3
- 3. Levine, S. "Temperature "Temperature Behavior of 12w/o U TRIGA Fuel"
- 4. GA-6216 "Characteristics Reactivity Insertions in a High Performance "Characteristics of Large Reactivity Performance TRIGA U-ZrH Core"Core" -1965
-1965
- 5. Levine, Geisler and Totenbier, "Temperature
- 6. Foderero, A. "Photon Shielding Manual" (1976)
Manual" (1976)
- 7. EI-Wakil El-Wakil "Nuclear "Nuclear Heat Transport" Transport" ANS 1978 8.
- 8. TRD 070.01006.04 "TRIGA"TRIGA Reactor Thermal-Hydraulic Study" Reactor Thermal-Hydraulic Study"
- 9. Feldman, E.E. "Fundamental Steady-State Thermal-
"Fundamental Approach to TRIGA Steady-State Hydraulic CHF Analysis" Hydraulic Analysis" (Argonne National Laboratory-2007).
Laboratory-2007).
- 10. Haag, J. A., and Levine, S. H.,H., "Thermal Analysis of The Pennsylvania State University Breazeale Breazeale Nuclear Reactor,"
Reactor," Nucl. Technology, Technology, vol. 19, p.66 (July 19, p.
1973).
1973).
Page 40 of 40
PENNSTATE PENN STATE
~
J. Doncsecz Joseph J. Doncsecz Pennsylvania State The Pennsylvania State University 814-865-1355 814-865-1355 Corporate Corporate Controller 408 Old Main Fax: 814-863-0701 University Park, University Park, PA 16802-1505 16802-1505 October 29,2008 October 29, 2008 William Kennedy Research Research and Test Reactors Branch A Policy and Rulemaking Division of Policy Rulemaking Office of Nuclear Reactor Reactor Regulation U.S. Nuclear Nuclear Regulatory Commission Washington, Washington, DC 20555-0001 License License numbers:
R-2 Pennsylvania State University, University Park, PA The Pennsylvania PA SNM-95 SNM-95 The Pennsylvania Pennsylvania State University, University Park, PA University, University PA Pennsylvania State University II am the Corporate Controller of the Pennsylvania "University") located University (the "University")
University at 408 Old Main, University Park, PA 16802, a non-profit 16802, non-profit University. This letter is in support of the letter the University's self-guarantee financial University's use of the self-guarantee financial test to demonstrate demonstrate financial assurance, as specified specified in University has no parent 10 CFR Part 50. The University parent company.
company.
guarantees, through the self-guarantee University guarantees, The University self-guarantee submitted submitted to demonstrate demonstrate compliance decommissioning of the facilities and licenses under 10 CFR Part 50 and 70 the decommissioning licenses listed below that are owned or operated current cost estimates or certified amounts operated by the University. The current amounts forfor decommissioning, so guaranteed, are shown for each facility:
License # Estimate based Certified Current Amounts Cost or or Estimate based and Docket License ## License Description on year 2001 estimat Current Cost an License Description okt#dollars on year 2001 Estimates and Docket # Estimates dollars (5% per year increase)
(5%
R-2 Research Reactor Research Reactor $7,141,464 $10,048,757
$7,141,464 $10,048,757 050-0005 SNM-95 SNM-95 Special Nuclear Material $15,000 $21,106 Special Nuclear Material $15,000 $21,106 70-113 70-113 Sub total $10,069,863
$10,069,863 25% contingency fund 25% $2,517,466 Total Estimated Costs: $12,587,329
$12,587,329 certify that the University is currently I hereby certify concern, and that it possesses positive currently a going concern, positive tangible net worth in the amount of $4,404,363,000.
$4,404,363,000.
This fiscal year of the University University ends on June 30. A copy of the University's most recent recent financial statement statement is enclosed.
University is not required to file a Form 10-K with the U.S. Securities The University Securities and Exchange Commission.
An Equal Opportunity University University
The University satisfies the following self-guarantee self-guarantee test from 10 CFR 30 Appendix Appendix E:
- 0 The current bond rating of most recent uninsured, uncollateralized, uncollateralized, and unencumbered unencumbered issuance issuance of this institution is AA.
- a Name of rating service:
service: Standard & Poor's Poor's
- Date of issuance issuance of bond: April 10, 10, 2008
- Date of maturity of bond: August 15, 2029 15, 2029 I hereby certify that the content of this letter letter is true and correct correct to the best of my knowledge.
Sincerely, HJ J. Doncsecz Joseph J.
Corporate Controller Controller
/
Copy to: Eric Boeldt, Radiation Radiation Safety Officer, Officer, University Park Kenan Unlu, Director, Radiation Radiation Science Science and Engineering Engineering Center
Enclosures:
Self-Guarantee Self-Guarantee Agreement Agreement Audited Financial Statement Statement 2
The Pennsylvania Pennsylvania State University Financial Assurance Decommissioning Activities Assurance for Cost of Decommissioning Self-Guarantee Agreement Self-Guarantee Agreement Guarantee Guarantee made by The Pennsylvania Pennsylvania State University, a nonprofit University, organized organized under under the laws of ofthe the Commonwealth Commonwealth of Pennsylvania, herein referred to as "guarantor,"
"guarantor," to the U. S.
Nuclear Regulatory Commission, on behalf Nuclear behalf of the University University as licensee.
Recitals Recitals
- 1. The guarantor has full authority and capacity capacity to enter into this self-guarantee self-guarantee by the bylaws of the Trustees Trustees of the Pennsylvania Pennsylvania State University.
- 2. self-guarantee is being issued to comply This self-guarantee comply with regulations regulations issued by NRC, an agency agency of the U. S. Government, Government, pursuant pursuant to the Atomic Energy Act of 1954, as amended, and the Reorganization Act of 1974. NRC has promulgated Energy Reorganization promulgated regulations in Title 10, Chapter I of the Code Code ofof Federal FederalRegulations, Regulations, Parts 50 and 70, which which require that a of, or an applicant holder of, applicant for, a materials license issued pursuant to 10 CFR Parts 50 and 70 provide provide assurance that funds will be available available when needed required needed for required decommissioning decommissioning activities.
3.
- 3. The self-guarantee self-guarantee is issued to provide financial assurance for decommissioning decommissioning activities for the licenses and facilities shown.
Certified Amounts or or Estimate based License License # Estimate based Current Cost Cost License Description on year 2001 and Docket ## License Description on year 2001 Estimates dollars (5% per year increase)
(5~operyear increase)
R-2 Research Research Reactor $7,141,464 $10,048,757
$7,141,464 $10,048,757 050-0005 SNM-95 SNM-95 Special Nuclear Material $15,000 $21,106 Special Nuclear Material $15,000 $21,106 70-113 70-113 Sub total $10,069,863
$10,069,863 25%
25% contingency fund $2,517,466
$2,517,466 Total Estimated Costs:
Total Estimated Costs: $12,587,329
$12,587,329
- 4. The guarantor guarantor meets or exceeds the following financial test criteria for a nonprofit nonprofit University University that issues bonds. Specifically, Specifically, the current rating for our most recent uninsured, uncollateralized, uncollateralized, and unencumbered unencumbered bond issuance issuance was AA as issued by Standard & & Poor's, and agrees to comply comply with all notification notification requirements requirements as specified in 10 CFR Part 50, 70, and Appendix A to 10 CFR Part 30 30 5.
- 5. The guarantor does not have a parent company holding majority control of its voting stock.
- 6. Decommissioning activities Decommissioning activities as used below below refer to the activities required required by 10 CFR Part 50 and 70 for decommissioning of the facilities identified identified above.
- 7. Pursuant to the guarantor's authority to enter into this guarantee, Pursuant guarantor guarantees guarantee, the guarantor guarantees to the NRC that the guarantor shall:
(a) carry out the required decommissioning decommissioning activities, as required by the licenses listed above.
8.
- 8. The guarantor agrees to submit revised financial financial statements, financial financial test data annually annually within 180 days of the close of its fiscal year.
- 9. guarantor agrees that if, at the end of any fiscal year before The guarantor before termination of this self-guarantee, self-guarantee, it fails to meet the self-guarantee criteria, it shall send self-guarantee financial test criteria, within 90 days of the end of the fiscal year, by certified certified mail, notice to the NRC that it intends to provide alternative intends specified in 10 CFR Part 30.
financial assurance as specified alternative financial Within 120 days after the end of the fiscal year, the guarantor shall establish such Within such financial financial assurance.
- 10. (deleted)
{deleted}
11.
- 11. The guarantor guarantor agrees that if if it determines, at any time other than as described described in in Recital Recital 9, that it no longer meets the self-guarantee self-guarantee financial test criteria or it is is disallowed from continuing as a self-guarantor, disallowed self-guarantor, it shall establish alternative financial assurance as specified in 10 CFR Parts 50 and 70 within 30 days.
assurance 12.
- 12. The guarantor, as well as its successors and assigns and agrees to remain bound bound jointly and severally severally under this guarantee guarantee notwithstanding notwithstanding any or all of the following:
amendment or modification amendment modification of the license or NRC-approved NRC-approved decommissioning funding plan for that facility, the extension extension or reduction of the time of performance performance of of required required activities, or any other modification modification or alteration of an obligation obligation of the licensee pursuant licensee pursuant to 10 CFR Parts 50 and 70.
13.
- 13. The guarantor agrees that it shall be liable for all litigation costs incurred by the NRC successful effort to enforce in any successful agreement against the guarantor.
enforce the agreement
- 14. The guarantor agrees to remain bound under under this self-guarantee self-guarantee for as long as it, as licensee, must comply comply with the applicable assurance requirements applicable financial assurance requirements of 10 CFR Part 50 and 70, for the previously listed facilities, except that the guarantor guarantor may cancel this self-guarantee cancel self-guarantee by sending notice by certified mail to the NRC, such such cancellation cancellation to become effective effective not before before an alternative financial assurance assurance mechanism has been put in place mechanism place by the guarantor guarantor 15.
- 15. The guarantor agrees agrees that ifif it, as licensee, licensee, fails to provide alternative financial provide alternative assurance specified in 10 CFR Parts 50 and 70 and obtain written approval of assurance as specified of such assurance assurance from the NRC within 90 days after a notice of cancellation cancellation by the 2
guarantor received by the NRC from the guarantor, the guarantor guarantor is received guarantor shall make full self-guarantee.
payment under the self-guarantee.
- 16. guarantor expressly waives notice of acceptance The guarantor self-guarantee by the acceptance of this self-guarantee amendments or modifications NRC. The guarantor also expressly waives notice of amendments of the decommissioning decommissioning requirements.
requirements.
- 17. guarantor files financial reports with the U.S.
If the guarantor U. S. Securities and Exchange Commission, then it shall promptly submit them to its independent independent auditor and to NRC during each year in which this self guarantee guarantee is in effect.
18.
- 18. The guarantor if, at any time before termination of this self-guarantee, guarantor agrees that if, self-guarantee, its most recent bond issuance ceases category of "A" or above by either ceases to be rated in the category either Standard Standard & & Poor's or Moody's, it shall provide notice in writing of such fact to NRC within 20 days after publication of the change by the rating service.
self-guarantee is true and correct to the best of my knowledge.
I hereby certify that this self-guarantee Effective date:
Effective OCT 22 992008 2008 Pennsylvania Pennsylvania State University:
Hi~*
Joseph J. Doncsecz Doncsecz Controller Corporate Controller 33
PENN STATE PENNSTATE
'Audited.
Audited Financial Statements Statements Pennsylvania State University The Penr)s}t!vania Fiscal Year Ended June June 30, 2007
PENNSYLVANIA STATE THE PENNSYLVANIA STATE UNIVERSITY UNIVERSITY UNIVERSITY OFFICERS UNIVERSITY OFFICERS as of September 28, 2007 GRAHAM SPANIER GRAHAM B. SPANIER President of the University RODNEY A. A. ERICKSON Executive Vice President and Provost of the University Provost University RODNEY RODNEY P. KIRSCH Senior Senior Vice President President for Development Development and Alumni Relations and Relations HAROLD L. PAZ HAROLD PAZ Chief Executive Executive Officer, The Milton S.
Hershey Medical Center, and Senior Hershey Medical Senior Vice President President for Health Health Affairs, and Dean of the College of Medicine Medicine EVA J. PELL EVAJ.
Senior Vice President for Research and Dean of the Graduate Graduate School GARY C. SCHULTZ GARY SCHULTZ Senior Senior Vice President President for Finance and Businessffreasurer Finance Business/Treasurer
CONTENTS CONTENTS The University University Dollar 2 Letter of Transmittal Transmittal 4 Independent Auditors' Independent Auditors' Report 5 Consolidated Consolidated Financial Statements:
Statements of Financial Statements Financial Position 6 Statements of Activities Activities 8 Statements.of Cash Flows Statements*of 10 Consolidated Financial Statements Notes To Consolidated 11 11
UNIVERSITY DOLLAR UNIVERSITY DOLLAR SOURCES SOURCES Investment income and gains, net net Government grants 11.Oc 11.0c and contracts Commonwealth Commonwealth of of 12.2c Pennsylvania Pennsylvania appropriations 8.4c Private gifts, grants and contracts Hospital 8.Oc 8.0c operations 21.4c Auxiliary enterprises 7.5c 7.5c Tuition and fees, net of discounts 27.2c 2
2006-2007 2006-2007 USES USES Research Research 19.4c Academic Academic support 8.1c S.lc Hospital operations 25.Oc 25.0c Institutional support 7.Oc 7.0c 1W Student services 3.7c Public service other and other 2.9c Instruction 25.6c APPLICATION BY OBJECT APPLICATION OBJECT Salaries wages and 60.6c fringe benefits Other expenses 39.4C 0o 20 40 60 80 100 100 33
PENNSTATE PENN STATE
~
Joseph J.
Joseph J. Doncsecz Doncsecz The The Pennsylvania Pennsylvania State State University University 814-865-1355 814-865-1355
.Corporate Corporate Controller Controller 408 408 Old Old Main Main Fax:
Fax: 814-863-0701 814-863-0701 University University Park. PA 16802-1505 Park. PA \6802-1505 September September 28,28, 2007 2007 Dr.
Dr. Graham Graham Spanier, Spanier, President President The The Pennsylvania Pennsylvania State State University University Dear Dear Dr.
Dr. Spanier:
Spanier:
The The audited audited consolidated consolidated financial financial statements statements ofof The The Pennsylvania Pennsylvania State State University University and and subsidiaries subsidiaries (the (the "University")
"University") for for the the fiscal fiscal year year ended ended June June 30,30, 2007 2007 areare presented presented on on the the accompanying accompanying pages.
pages. TheseThese financial financial statements statements represent represent aa complete complete and and permanent permanent recordrecord of of the the finances finances of of the the University University forfor the the year.
year. .
These These financial financial statements statements have have been been examined examined by by Deloitte Deloitte & & Touche Touche LLP, LLP, Certified Certified Public Public Accountants Accountants of of Philadelphia, Philadelphia, Pennsylvania, Pennsylvania, and and their their report report hashas been been made made aa part part of of this this record.
record.
Respectfully Respectfully submitted, submitted, Joseph Joseph J. J. Doncsecz Doncsecz Corporate Corporate Controller Controller Albert Albert G.
G. Horvath Horvath Vice Vice President President for for Finance Finance & & Business Business
.~~t[ Jl~["" .
Gary C. Shultz Gary C. Shultz Senior Senior . President President for for . nce nce & & Business/Treasurer Business/Treasurer 44 An An Equal Equal Opportunity Opportunity University University
Deloitte Deloittee De o t e Deloitt e&-Touche LLP Oeloitt e & Touche LLP 1700 Market Street 1700 Market Street Philadelphia, PA 19103-3984 Philadelphia, PA 19103-3984 USA USA Tel:
Tel: +1 215 246 2300
+12152462300 Fax: +1 2152155692441 569 2441 www.deloitte.com www.deloitte.com
/
INDEPENDENT AUDITORS' INDEPENDENT AUDITORS' REPORT REPORT To the the Board Board of of Trustees Trustees of of The Pennsylvania Pennsylvania StateState University University University Park, PA We We havehave audited audited the the accompanying accompanying consolidated consolidated statements statements of of financial financial position posItlOn of of The The Pennsylvania Pennsylvania State State University University and and subsidiaries subsidiaries (the "University")
"University") as of June June 30, 20072007 and and 2006, 2006, and and the the related related consolidated consolidated statements statements of of activities activities and and cash cash flows for the the years years thenthen ended.
ended.
These These financial financial statements statements are are thethe responsibility responsibility of of the management management of of the University.
University. Our Our responsibility is to express an opinion on these financial statements responsibility is to express an opinion on these financial statements based on our audits. based on our audits.
We We conducted conducted our our audits audits inin accordance accordance with with auditing auditing standards standards generally generally accepted accepted in in the the United United States States of America. Those of America. Those standards standards require require thatthat wewe plan plan and and perform perform the the audit audit to to obtain obtain reasonable assurance about reasonable assurance about whether whether the financial statements financial statements are freeare free of material misstatement.
material misstatement.
An An audit audit includes includes consideration consideration of of internal internal control control overover financial financial reporting reporting as as aa basisbasis forfor designing designing audit audit procedures procedures that that are are appropriate appropriate in in the the circumstances, circumstances, but but are are not not for for the the purpose purpose of of expressing expressing an an opinion opinion on on the the effectiveness effectiveness of of the the University's University's internal internal control control overover financial financial reporting. Accordingly, we reporting. Accordingly, we express express no no such such opinion.
opinion. An audit also An audit also includes includes examining, examining, on on aa test test basis, evidence supporting the amounts and disclosures in the financial basis, evidence supporting the amounts and disclosures in the financial statements, assessing the statements, assessing the accounting principles accounting principles used used and and significant estimates made significant estimates made by by management, management, as as well well as as evaluating evaluating the the overall overall financial presentation. We statement presentation.
financial statement We believe believe that that our audits provide our audits provide aa reasonable reasonable basis basis for for our our opinion.
opinion.
As As discussed discussed in Note 99to in Note to the the consolidated consolidated financial statements, during financial statements, during the the year year ended ended June June 30,30, 2007, the 2007, the University University adopted adopted Statement Statement of of Financial Financial Accounting Accounting Standard ("SFAS") No.
Standard ("SFAS") No. 158, 158, "Employers' "Employers' Accounting Accounting for Defined Benefit for Defined Benefit Pension Pension and and Other Postretirement Plans".
Other Postretirement Plans". As As discussed in Note 2, during the year ended June .30, 2006, the discussed in Note 2, during the year ended June .30, 2006, the University adopted Financial University adopted Financial Standards Board Accounting Standards Accounting ("FIN") No.
Interpretation ("FIN")
Board Interpretation No. 47, "Accounting for 47, "Accounting Conditional Asset for Conditional Asset Retirement Retirement Obligations".
Obligations".
In In our opinion, such our opinion, such consolidated consolidated financial financial statements present fairly, statements present fairly, in in all all material respects, the material respects, the financial financial position position of of the University as the University as of of June June 30,30, 2007 2007 and 2006, and and 2006, and thethe changes changes in in its its net net assets assets and its cash and its cash flows flows forfor the the years years then ended in then ended in conformity conformity with with accounting accounting principles principles generally generally accepted accepted inin the the United United States States of ofAmerica.
America.
September28, September 28, 2007 2007 Member Memberofof Deloitte DeloitteTouche ToucheTohmatsu Tohmatsu 55
PENNSYLVANIA STATE THE PENNSYLVANIA STATE UNIVERSITY UNIVERSITY CONSOLIDATED STATEMENTS CONSOLIDATED STATEMENTS OF FINANCIAL FINANCIAL POSITION POSITION ASSETS ASSETS JUNE 30, JUNE 2007 AND 30, 2007 AND 2006 2006 (in thousands)
June 30, 30, 2007 30, 2006 June 30, 2006 Current assets:
Current Cash and cash equivalents in short-term equivalents - in short-term operating portfolios $
$ 622,875 622,875 $ 428,798
$ 428,798 Cash and cash equivalents in operating investment equivalents - in investment portfolios 59,978 36,719 36,719 Deposits 21,104 18,121
$19,599 receivable, net of allowances of $24,139 and $19,599 Accounts receivable, 333,058 333,058 305,601 Contributions receivable, net 42,456 37,774 Loans to students, net of allowances of $4,886
$4,886 and $5,008 11;305 11 "305 _ 11,075 Inventories Inventories 27,916 27,093 Prepaid expenses and other assets 48,857 44,609 Investments Investments held under securities lending lending program 309,682 220,032 220,032 Total. current assets Total current 1,477,231 1,129,822 1,129,822 Noncurrent Noncurrent assets:
Deposits held by bond trustees 18,268 18,268 18,625 Contributions receivable, net Contributions 91,863 72,666
$12,564 and $12,262 Loans to students, net of allowances of $12,564 28,793 27,111 Deferred bond costs 5,106 5,106 5,606 in plant, net Total investment in 2,552,935 2,426,556 2,426,556 Beneficial interest in perpetual trusts in perpetual 17,078 17,078 15,676 15,676 Investments 3,066,165 2,606,418 2,606,418 Total noncurrent noncurrent assets 5,780,208 5,172,658 5,172,658 Total assets i$ 7,257.439 $$ 6.302.480 6,302.480 -
See notes to consolidated financial statements.
statements, 66
PENNSYLVANIA STATE THE PENNSYLVANIA UNIVERSITY STATE UNIVERSITY CONSOLIDATED STATEMENTS CONSOLIDATED STATEMENTS OF FINANCIAL FINANCIAL POSITION POSITION LIABILITIES AND LIABILITIES AND NET NET ASSETSASSETS JUNE 30, JUNE 2007 AND 30, 2007 AND 2006 2006 (in thousands) 30, 2007 June 30. 30, 2006 June 30. 2006 Current liabilities:
Accounts Accounts payable and other accrued expenses expenses $$ 348,112 348,112 $$ 347,576 347,576 Deferred revenue Deferred revenue 193,148 193,148 165,293 165,293 Long-term debt 50,937 47,590 Present value of annuities payablepayable 5,282 4,691 Accrued postretirement benefits postretirement benefits 28,944 28,036 Liability under securities securities lending program 309,682 220,032 Total current current liabilities liabilities 936,105 813,218 813,218 Noncurrent Noncurrent liabilities:
Deposits held in incustody for others others 34,088 31,864 Deferred Deferred revenue revenue 22,396 841 Long-term Long-term debt 860,569 773,610 773,610 Present Present value of annuities payablepayable 36,907 32,106 Accrued postretirement postretirement benefits 805,618 805,618 658,909 Refundable Refundable United States Government student loans Government student loans 32,894 33,104 Other liabilities liabilities 124,499 124,499 117,482 noncurrent liabilities Total noncurrent liabilities 1,916,971 1,647,916 1,647,916 Total liabilities liabilities 2,853,076 2,853,076 2,461,134 2,461,134 Net assets:
assets:
Unrestricted Unrestricted -
Undesignated 950 938 Designated for specific purposes 1,453,003 1,453,003 1,215,547 1,215,547 Net investment investment in in plant 1,524,097 1,524,097 1,463,639 1,463,639 Total unrestricted 2,978,050 2,680,124 2,680,124 Temporarily Temporarily restricted 587,469 400,361 400,361 Permanently restricted 838,844 760,861 assets Total net assets 4,404,363 3,841,346 Total T liabilities and net assets otalliabilities ~ 71,~Z,~~ $~ gl~Q2,~aQ 6.502.480 See notes to consolidated financial statements.
7 7
PENNSYLVANIA STATE THE PENNSYLVANIA STATE UNIVERSITY UNIVERSITY CONSOLIDATED STATEMENT CONSOLIDATED STATEMENT OF ACTIVITIES ACTIVITIES FOR FOR THE THE YEAR ENDED ENDED JUNE JUNE 30, 30, 20072007 (in thousands)
Temporarily Permanently Unrestricted Restricted Restricted Total Total Revenues and other support:
Tuition and fees, net of discounts of $91 $91,906
,906 $$ 1,057,691 $$ $
$ $1,057,691
$1,057,691 Commonwealth of of Pennsylvania Pennsylvania -
Appropriations Appropriations 327,715 327,715 327,715 327,715 Special contracts 108,448 108,448 108,448 Department of Department of General General Services projects projects 7,688 7,688 7,688 States Govemment United States Government grants and contracts contracts 360,026 360,026 360,026 Private gifts, grants and contracts 197,160 197,160 38,455 75,218 75,218 310,833 Endowment income, net 116,526 116,526 163,911 163,911 10,472 290,909 Other investment income, net 127,615 127,615 11,416 11,416 153 139,184 139,184 Sales and services of educational activities educational activities 40,599 40,599 Recovery Recovery of indirect costs 109,634 109,634 109,634 enterprises Auxiliary enterprises 291,773 291,n3 291,n3 291,773.
Hospital operations operations 832,328 832,328 sources Other sources 16,339 1,091 1,412 1,412 18,842 18,842 Net assets released from restrictions restrictions 26,394 26,394 (26,394)
Total revenues and other support 3,619,936 188,479 188,479 87,255 3,895,670 Expenses and Expenses and losses:
losses:
Educational and general -
Instruction 826,097 826,097 826,097 Research 625,519 625,519 625,519 625,519 Public service 79,035 79,035 Academic support 261,816 261,816 261,816 261,816 Student services services 121,785 121,785 121,785 121,785 Institutional Institutional support 225,420 225,420 225,420 Total Total educatonal educational and general 2,139,672 2,139,672 2,139,672 Auxiliary enterprises enterprises 267,671 267,671 Hospital operations Hospital operations 806,062 806,062 806,062 806,062 Write-offs Write-ofts and disposals disposals of assets 5,004 5,004 5,004 Actuarial adjustment adjustment on annuities annuities payable payable 1,371 9,272 10,643 Total expenses expenses and losseslosses 3,218,409 3,218,409 1,371 9,272 3,229,052 3,229,052 Increase Increase in in net assets assets before before cumulative cumulative effect effect 401,527 187,108 187,108 . 77,983 n,983 666,618 666,618 Cumulative effect effect of adoption of new accounting principle accounting principle (103,601)
(103,601) (103,601)
(103,601)
Increase in net assets Increase in net assets 297,926 297,926 187,108 187,108 77,983 n,983 563,017 563,017 Net Net assets assets at the the beginning beginning of the year year 2,680,124 2,680,124 400,361 400,361 760,861 3,841,346 3,841,346 Net assets assets at at the end end of the year year $$ 2,978,050 2,978,050 $ 587,469 $ 838,844 $4,404,363
$4,404,363 See notes to consolidated See consolidated financial financial statements.
88
.THE PENNSYLVANIA STATE THE PENNSYLVANIA STATE UNIVERSITY UNIVERSITY CONSOLIDATED CONSOLIDATED STATEMENT STATEMENT OF ACTIVITIES ACTIVITIES FOR FOR THE YEAR ENDED ENDED JUNE JUNE 30, 30, 2006 2006 (in thousands)
Temporarily Temporarily Permanently Permanently Unrestricted Unrestricted Restricted Restricted Restricted Total Revenues and other Revenu_ supporlt other support:
Tuition and fees, net of discounts of $87,784 Tunion $
$ 949,774 $ $
$ $$ 949,774 Pennsylvania -
Commonwealth of Pennsylvania Commonwealth Appropriations Appropriations 312,026 312,026 312,026 Special contracts contracts 102,279 102,279 102,279 102,279 Department of General Department General Services Services projects 43,776 43,776 Government grants and contracts United States Govemment 355,396 355,396 Private gifts, grants and contracts contracts 187,748 187,748 26,942 41,307 41,307 255,997 Endowment income, net 75,178 64,751 10,158 10,158 150,087 150,087 Other Other investment income, net 45,626 4,592 197 197 50,415 50,415 Sales and services of educational educational activities activities 40,427 40,427 Recovery of indirect costs 106,975 106,975 106,975 106,975 Auxiliary enterprises enterprises 272,703 272,703 Hospital Hospital operations operations 753,704 753,704 Other sources sources 18,280 18,280 365 276 18,921 Net assets released restrictions released from restrictions 23,628 (23,628) revenues Total revenues and other support 3,287,520 73,022 73,022 51,938 3,412,480 3,412,480 Expenses and 1088_=
Expenses losses:
Educational and general Educational general -
Instruction Instruction 807,442 807,442 807,442 Research 616,707 616,707 616,707 Public service 74,148 74,148 74,148 Academic support Academic 266,168 266,168 Student services services 113,785 113,785 113,785 113,785 Institutional support 229,027 229,027 Total educational educational and general 2,107,277 2,107,277 2,107,277 Auxiliary enterprises enterprises 254,698 254,698 254,698 operations Hospital operations 719,097 719,097 719,097 Write-OilS and disposals Write-offs disposals of assets 4,563 4,563 4,563 adjustment on annuities payable Actuarial adjustment Actuarial payable 1,728 4,748 6,476 6,476 expenses and losses Total expenses losses 3,085,635 3,085,635 1,728 4,748 3,092,111 3,092,111 Increase in net assets before cumulative effect Increase 201,885 201,885 71,294 71,294 47,190 320,369 320,369 Cumulative adoption of new accounting Cumulative effect of adoption accounting principle (44,372 (44,372) (44,372)
(44,372)
Increase in net assets Increase 157,513 157,513 71,294 71,294 47,190 275,997 275,997 Net assets at the beginning beginning of the year year 2,522,611 2,522,611 329,067 329,067 713,671 3,565,349 3,565,349.
Net assets at the end of the year year $ 2,680,124
$ 2,680,124 $ 400,361 $ 760,861 $3,841,346
$3,841,346 See notes to consolidated consolidated financial statements.
99
PENNSYLVANIA STATE THE PENNSYLVANIA UNIVERSITY STATE UNIVERSITY CONSOLIDATED STATEMENTS CONSOLIDATED STATEMENTS OF CASH FLOWS CASH FLOWS FOR THE YEARS YEARS ENDED ENDED JUNE JUNE 30, 30, 2007 AND 2006 2007 AND 2006 (in thousands)
(in'thousands)
June 30, June 30, 2007 2007 June 30, 2006 30, 2006 cash flows from operating Cash operating actMtl activities: . .:
Increase Increase inin net assets $$ 563,017 $ 275,997 Adjustments to reconcile reconcile change in in net assets to net cash provided by operating activities -
Actuarial adjustment adjustment on annuities payable payable 10,644 6,476 Contributions Contributions restricted for long-term investment (91,184) (72,616) dividends restricted for long-term Interest and dividends long-term investment (20,955) (17,177)
(17,177)
Net realized and unrealized gains on long-term Net investments long-term investments (270,579) (99,805)
Depreciation and amortization Depreciation amortization expense 169,762 169,762 168,340 168,340 Write-offs and disposals of assets 5,330 5,227 5,227 Contributions of land, buildings and equipment equipment (2,625) (9,323)
Buildings and equipment provided by Pennsylvania General Services Department of General Pennsylvania Department Services (1,785) (14,027) to government Contribution govemment student loan funds funds 254 254 Provision for bad debts 23,871 15,310 15,310 effect of adoption Cumulative effect Cumulative adoption of new accounting principle 103,601 44,372 44,372 Increase Increase in deposits in depoSits (2,984) (1,713)
Increase Increase in receivables in receivables (69,063) (31,688)
Increase Increase in inventories in inventories (824) (9,123)
Increase Increase in expenses and other assets in prepaid expenses aSsets (5,428) (11,644)
Increase Increase in inaccounts accounts payable and other accrued expenses expenses 7,904 4,044 Increase Increase in indeferred deferred revenue revenue 49,410 49,410 15,500 15,500 Increase in Increase inaccrued postretirement benefits accrued postretirement benefits 44,015 44,015 70,507 70,507 Net cash provided by operating activities activities 512,381 338,911 C_h Cash flows from Investing Investing actlvltl activities: . .:
Purchase Purchase of land, buildings and equipmentequipment (254,048) (285,405)
Decrease Decrease in in deposits held by bond trustees trustees 357 209 Advances on student loans Advances (13,465) (14,177)
Collections on student loans Collections loans 10,346 11,434 (Increase)/decrease in (Increase)/decrease securities lending program in investments held under securities (89,650) 12,524 12,524 Increase/(decrease) in Increase/(decrease) in liability under under securities lending lending program 89,650 (12,524)
Purchase of investments (2,399,093) (2,771,709)
Proceeds from sale of investments investments 2,195,405 2,639,922 Net cash used by investing investing activities activities (460,498)
_.. (460,498) (419,726)
Cash flows from financing Cash financing actMtls: actMtl. .:
Contributions restricted for long-term investment 91,184 72,616
. 72,616 Interest and dividends restricted for long-term investment Interest 20,955 17,177 Payments of annuity obligations Payments obligations (5,327) (4,732)
Proceeds Proceeds from issuance of bonds bonds 179,464 4,820 payments-on Principal payments'on notes, bonds and capital leases leases (121,303) (33,411)
(33,411)
Proceeds related to government Proceeds govemment student loan funds, net of collection costs 480 584 provided by financing activities Net cash provided activities 165,453 165,453 57,054 57,054 increasel(decrease) in cash and cash equivalents Net increaseJ(decrease) equivalents 217,336 (23,761)
(23,761)
Cash and cash equivalents equivalents at the beginning beginning of ~f the year year 485,517 465,517 489,278 Cash and cash equivalents equivalents at the end of the year $$ 682,853 $$ 465,517 465,517 consolidated financial statements.
See notes to consolidated 10
THE PENNSYLVANIA STATE THE P*ENNSYLVANIA STATE UNIVERSITY UNIVERSITY NOTES TO CONSOLIDATED NOTES CONSOLIDATED FINANCIAL FINANCIAL STATEMENTS STATEMENTS FOR FOR THE YEA YEARS R SEN ENDED D E D JJUNEUNE 3 30, 0, 2007 2 0 0 7 AND AND 2 2006 006 UNIVERSITY AND
- 1. THE UNIVERSITY
- 1. AND RELATED ENTITIESENTITIES The Pennsylvania Pennsylvania State University University"), which was created University ("the University"), created as an instrumentality instrumentality of the the Commonwealth of Pennsylvania, is organized as a non-profit Commonwealth corporation under non-profit corporation under the laws of the the Commonwealth. As Pennsylvania's Commonwealth. Pennsylvania's land grant university, the University improving the lives University is committed to improving lives of the people of Pennsylvania, the nation and the world through its integrated,integrated, tri-part mission of high-quality high-quality teaching, research and outreach.
The financial statements of the University statements of The University include, on a consolidated basis, the financial statements The Milton S.S. Hershey ("TMSHMC"), a not-for-profit corporation, (see Note 10 for additional Hershey Medical Center ("TMSHMC"),
information TMSHMC) and The Corporation for Penn State and its subsidiaries information about TMSHMC) subsidiaries ("the Corporation").
The Corporation is a non-profit member organized in 1985 for the exclusive member corporation organized exclusive purpose purpose of benefiting and promoting the interests of the University, the Corporation's Corporation's sole member. The Corporation's Corporation's assets and revenues consist primarily assets primarily of the assets and revenues of The Pennsylvania College of Pennsylvania College Technology ("Penn College"), a wholly-owned Technology Corporation. AJI wholly-owned subsidiary of the Corporation. All material transactions transactions between the University, TMSHMC and the CorporationCorporation have been eliminated.
eliminated.
SUMMARY
OF SIGNIFICANT
- 2.
SUMMARY
ACCOUNTING POLICIES SIGNIFICANT ACCOUNTING POLICIES The significant significant accounting policies followed by the University, as summarized accounting policies summarized below, are in accordance accordance with the recommendations included in the Audit and Accounting Guide accounting and reporting included recommendations for accounting Guide for Not-for-Profit Organizations issued by the American Profit OrganizatJons Institute of Certified American Institute Certified Public Accountants.
Accountants.
Basis of Presentation Presentation statements include statements of financial position, University's financial statements The University's position, statements statements of activities activities and statements of cash flows. Net assets and the changes in net assets are classified as permanently statements permanently restricted, restricted, temporarily restricted or unrestricted.
unrestricted.
Permanently restricted Permanently restrictednet assets consist primarily primarily of the historical amounts of endowed gifts. Additiona)ly, Additionally, contributions receivable remainder interests, which are required by donors to be permanently retained, receivable and remainder are included estimated present values.
included at their estimated values*,
Temporarily restricted Temporarily primarily of contributions receivable restricted net assets consist primarily receivable and accumulated endowment endowment gains which can be expended, gains expended, but for which restrictions have not yet been restrictions include been met. Such restrictions include time restrictions imposed by donors donors or implied implied by the nature nature of the gift or by interpretations interpretations of law.
Unrestrictednet assets are all the remaining Unrestricted remaining net assets of the University.
received and either spent or deemed donor-restricted gifts that are received As permitted, donor-restricted deemed spent within the same year unrestricted revenue. Gifts of long-Ijved are reported as unre.stricted unrestricted revenue. Gifts long-lived assets are reported as unrestricted Gifts specified specified for the acquisition or construction of long-lived assets are reported reported as unrestricted net assets assets when the assets are placed placed in service.
11 11
The University maintains various funds and accounts, including endo~ments, University maintains endowments, funds functioning as endowments, departmental funds and related accumulated endowments, departmental accumulated gains, in in accordance accordance with the principles of fund "fund accounting." This is the procedure procedure by which resources resources for various purposes purposes are classified classified for accounting and reporting purposes into funds that are in accordance accordance with specified activities or objectives. Separate accounts are maintained maintained for each fund. Gifts are recorded recorded in funds and investment income income is distributed distributed toto funds throughout the year. Income distributed distributed to funds may be a combination combination of capital appreciation appreciation and University's total return investment earnings pursuant to the University's policy..
investment policy
. Basis of Accounting Accounting The financial statements of the University have been prepared prepar~d on the accrual accrual basis of accounting.
Use of Estimates Estimates The preparation of financial statements statements in conformity with accounting principles generally accounting principles generally accepted in the the United States of America America requires management management to make estimates and assumptions that affect affect the reported amounts on the financial statements amounts disclosure of contingencies statements and the disclosure and 'commitments. Actual results contingencies andCcommitments.
could differ differ from those those estimates.
Revenue Recognition Revenue Recognition Tuition revenue is recognized recognized in the fiscal year in substantial portion of the educational term in which the substantial occurs. Revenues Revenues for auxiliary enterprises recognized as the related enterprises are recognized related goods and services services are delivered delivered and rendered. Grant revenues are recognized as the eligible Grant revenues eligible grant grant activities conducted.. Payments activities are conducted. Payments services are deferred.
received in advance for tuition, goods and services Unconditional Unconditional contributions receivable recognized when received and consist of written or oral promises receivable are recognized promises to contribute University in contribute to the University in the future. Contributions receivable receivable are recorded revenue recorded with the revenue category of restriction. Contributions receivable assigned to the appropriate category after discounting recorded after receivable are recorded discounting to the present value of the future future cash flows.
agreements with third-party payors that provide for payments TMSHMC has agreements payments to TMSHMC at amounts amounts different from its established rates. PaymentPayment arrangements prospectively determined arrangements include prospectively determined rates per discharge, reimbursed discounted charges and per diem payments. Net patient service reimbursed costs, discounted service revenue is estimated net realizable amounts reported at the estimated third-party payors amounts from patients, third-party services payors and others for services rendered, including estimated adjustments under reimbursement agreements with third-party estimated retroactive adjustments third-party payors. Retroactive adjustments are accrued Retroactive adjustments estimated basis in the period the related services accrued on an estimated services are rendered and adjusted in future periods rendered periods as final settlements determined or such estimates settlements are determined estimates change.
TMSHMC has agreements TMSHMC agreements with various Health Maintenance Maintenance Organizations ("HMO's") to provide medical Organizations ("HMO's")
services to subscribing partiCipants.
services agreements, TMSHMC participants. Under these agreements, receives monthly capitation TMSHMC receives capitation payments based on the number payments each HMO's participants, regardless of services actually performed number of each performed by TMSHMC. In addition, the HMO's make fee-for-service payments to TMHSMC for certain covered fee-for-service payments based upon discounted fee schedules.
services based TMSHMC provides care to patients who meet certain criteria under its charity care policy without charge TMSHMC charge or at amounts less than its established rates.
12
Instruments Fair Value of Financial Instruments The University University has provided fair value estimates estimates for certain financial instruments in in the notes to the financial statements. Fair value information presented in the financial financial statements statements is based available based on information available June 30, 2007 and 2006. The carrying amounts of cash and cash equivalents, accounts at June accounts receivable and accounts payable accounts payable are reasonable estimates of their fair value. The carrying values of the amounts amounts of the the University's loans to students are also reasonable estimates of their fair value, because approximately University's approximately 99%
of the total outstanding loans to students as of June 30, 2007 and 2006 2006 have been made at the rates available to students for similar loans at such times. The fair value of investments investments is disclosed disclosed in in Note 3.
University's bonds payable is disclosed in Note The fair value of the University's Note 6.
Cash Flows The following items are included as supplemental The disclosure to the statements of cash flows for the years supplemental disclosure ended June ended June 30:
2007 2006 Interest paid $ 33,932,000 33,932,000 $ 34,326,000 Non-cash Non-cash acquisitions of land, buildings and equipment 3,969,000 3,969,000 19,997,000 19,997,000 Non-cash construction costs/deferred Non-cash obligation at TMSHMC costs/deferred lease obligation TMSHMC 31,324,000 31,324,000 The University defines cash and cash equivalents equivalents based on the primary purpose purpose of the investment portfolio investment portfolio investment strategies portfolio managers, that holds the investment. Due to the investment of portfolio managers, there is $59,978,000 and
$36,719,000
$36,719,000 of cash and cash equivalents equivalents held in operating investment investment portfolios at June June 30, 2007 and 2006, respectively.
respectively. These assets have been separately identified as cash and cash equivalents in the been separately the*
pOSition.
statements of financial position.
Inventories Inventories*
generally on the first-in, Inventories are stated at cost, generally Inventories which is lower than market.
first-in, first-out basis, which Investments Investments The University's University's investments are reported accompanying financial reported at fair market value in the accompanying financial statements.
determinable fair values and all investments Investments in equity securities with readily determinable Investments securities investments in debt securities reported at fair values with gains are reported consolidated statements gains and losses included in the consolidated activities. The statements of activities. The University University records records derivative securities securities at market market value with changeschanges in market value reflected in the the consolidated statements of activities.
consolidated estimated fair value amounts for marketable The estimated University have been marketable debt and equity securities held by the University reviewed by the University and determined reviewed determined using available availal?le market information information as supplied by the various various non-liquid holdings, generally custodians for the University. For non-liquid institutions that act as trustees or custodians financial institutions generally investments in real estate, venture capital and energy limited partnerships, estimated fair value investments value is determined based upon financial information determined provided by the limited partnerships. This financial information information provided includes assumptions includes assumptions and methods that were reviewed by University University management. The University believes University believes that the estimated fair value is a reasonable estimate of market market value as of June 30, 2007 and 2006.
Because the limited partnerships are not readily Because readily marketable, the estimated value is subject to uncertainty uncertainty and, therefore, may differ from the value that would have been used existed, and such used had a ready market existed, differences could be material.
differences material.
13
Beneficial Interest Beneficial Interest in in Perpetual PerDetual Trusts receives endowment The University receives endowment income from investmentsinvestments of $17,078,000
$17,078,000 and $15,676,000
$15,676,000 held by trustees at June 30, outside trustees 30, 2007 and 2006, 2006, respectively.
respectively. The The present value of of expected future cash flows the University to the University from suchsuch investments investments hashas been recorded recorded asas permanently restricted restricted net net assets assets and related trusts in the financial statements.
beneficial interest in perpetual trusts Investment in Plant Investment Plant Fixed assets, including collections, are stated at cost or fair market value at date of gift. Depreciation Depreciation is estimated economic computed over the estimated economic lives of of the assets using the straight-line straight-line method.
method. Total investment investment in plant as of June 30 is in is comprised of the following:
2007 2006 Land $ 90,930,000 $ 87,447,000 87,44 7,000 Buildings 3,197,891,000 2,986,479,000 2,986.4 79,000 Improvements other than buildings 422,692,000 422,692,000 398,502,000 Equipment 805,238,000 782,585,000 Total plant 4,516,751,000 4,516,751,000 4,255,013,000 4,255,013,000 Less accumulated depreciation depreciation (1,963,816,000)
(1,963,816,000) (1,828,457,000)
(1,828.457,000)
Total investment in plant, net $$ 2.552,935.000 2.552.935.00 $$ 2.426.556.000 2,426,556,000 Asset Retirement Retirement Obligation Effective June 30, 2006, the University adopted adopted Financial Accounting Standards *Board "("FASB")
Standards 'Board -("FASB")
Accounting for Interpretation No. 47, Accounting Interpretation for Conditional ConditionalAsset Asset Retirement Retirement Obligations Obligations ("FIN 47"). FIN 47 providesprovides interpretation of Statement an interpretation Statement of Financial Financial Accounting Accounting Standard ("SFAS") No. 143, Accounting Accounting forfor Retirement Obligations, by clarifying that conditional Retirement Obligations, conditional asset retirement obligations meet the definition of aa liability liability even even though uncertainty uncertainty may exist about the timing or method method of settlement. Uhder Under the provisions provisions of FIN 47, the University is obligated to record record a liability for conditional conditional asset retirement obligations. The The University performed an analysis of such obligations and determined University performed determined that asbestos asbestos abatement abatement costs represented the UniverSity's represented University's primary primary source of such liabilities. The University reviewed all facilities and determined the timing, method and cost of asbestos abatement determined abatement using a variety of assumptionsassumptions and estimates. As a result of this process, at June 30, 2006, the University recorded recorded the cumulative effect of conditional asset retirement obligations totaling totaling $44,372,000. The carrying value of the liability at June 30, 2007 is $44,248,000, which includes accretion accretion expense expense of $2,096,000.
Accounting Accounting Pronouncements Pronouncements In June 2006, the FASB issued Interpretation In Accounting for Interpretation No. 48, Accounting for Uncertainty Uncertainty inin Income Income Taxes Taxes - an Interpretation of FASB Interpretation FASB Statement No. 109 ("FIN ("FIN 48"). This interpretation interpretation establishes establishes the accounting accounting for uncertain uncertain tax positions, including including recognition recognition and measurement measurement of their financial financial statement statement effects. TheThe interpretation interpretation will be effective effective for the University University in 2008. University University management evaluating the management is currently evaluating the impact impact of FIN 48, whichwhich is not expected expected to be material.
material.
Reclassifications Reclassifications Certain Certain 20062006 amounts amounts have have been been reclassified reclassified to conform with 2007 presentation of Commonwealth 2007 presentation Commonwealth of Pennsylvania-special contracts Pennsylvania-special contracts and United United States States government government grants and contracts contracts within the the consolidated consolidated statement statement of of activities.
activities.
14
- 3. INVESTMENTS
- 3. INVESTMENTS Investments by major category as of June 30 are summarized Investments summarized as follows:
2007 2006 Money markets markets $ 286,910,000 286,910,000 243,016,000
$ 243,016,000 Fixed income:
government/agency U.S. government/agency 392,430,000 392,430,000 482,256,000 482,256,000 corporate U.S. corporate 278,725,000 278,725,000 312,048,000 312,048,000 Foreign Foreign 66,704,000 66,704,000 59,013,000 Other 617,334,000 617,334,000 319,499,000 319,499,000 Equities Equities 1,002,935,000 1,002,935,000 836,011,000 836,011,000 partnerships Private partnerships 481,105,000 481,105,000 391,294,000 391,294,000 Investments held under securities lending program 309,682,000 309.682.000 220,032,000 220.032.000 Total $3,435,825,000
$3.435.825.000 $2,863,169.000)
$2.863.169.000 investments consist of collateralized Other fixed income investments mortgage obligations, collateralized mortgage mortgage-backed securities, obligations, mortgage-backed asset-backed asset-backed securities and municipal municipal bonds. Equity investments comprised of domestic investments are comprised domestic and foreign common stocks. Private partnerships consist primarily primarily of interests inin real estate, private venture private equity, venture capital, energy and hedge fund limitedlimited partnerships.
The following schedule investment return and summarizes the investment schedule summarizes and its classification in the consolidated statement of activities for the year ended June 30, 2007:
Temporarily Temporarily Permanently Permanently Unrestricted Restricted Restricted Restricted Total Dividends and interest $ 130,700,000
$130,700,000 $ 4,243,000 4,243,000 10,625,000
$ 10,625,000 $$ 145,568,000 145,568,000 realized-gains, including Net realized:gains,including spending endowment spending endowment 38,690,000 38,690,000 53,757,000 53,757,000 92,447,000 92,447,000 gains Net unrealized gains . 74.751.000 74,751,000 117,327,000 117.327.000 192,078,000 192.078.000
$ 175,327=0 $$ 430.093.000 430.093.000 returns Total returns $ 244.141
$ 244.141,000.000 $ 175.327.000 $ 10 625.000
.The following schedule summarizes the investment schedule summarizes investment return and its its classification classification in the consolidated statement of activities for the year ended June 30, 2006:
Temporarily Temporarily Permanently Permanently Unrestricted Unrestricted Restricted Restricted Total Dividends and interest interest $ 84,869,000 $ 3,376,000 3,376,000 $ 9,756,000 9,756,000 98,001,000
$ 98,001,000 Net realized gains, including including endowment spending endowment spending 45,549,000 45,549,000 27,618,000 599,000 73,766,000 73,766,000 unrealized gains/(losses)
Net unrealized gains/(losses) (9,614,000) 38,349,000 28,735,000 28,735,000
$$ 69.343,000 $~ 2QQ,5Q2,QQQ 200,502000 Total returns returns ~ :l2Q,8Q4,QQQ
$120,804,000 69,343,QQQ $10.55.00Q0
~ :lQ,355,QQQ In the management management of investments, the University authorizes certain certain of its investment investment managers to purchase purchase securities to attain a desired market position; and the University may directly *invest derivative securities derivative invest in derivative derivative securities to attain a desired market securities position. The University market position. University does not tradetrade or issue derivative financial other than through the investment management instruments other practices noted above. Gains and losses from management practices derivative derivative instruments reported in the consolidated statements of activities. Futures instruments are reported Futures contracts, which are fully cash collateralized, are marked to market daily and are cash collateralized, included in the carrying value of the University's are included University's investments. The market market value of all derivative instruments is included included in the market value of the the University's investments. Futures University's contracts have Futures contracts because the counterparties have minimal credit risk because counterparties are the the exchanges themselves. The University directly held no derivative exchanges derivative securities at June June 30, 2007. Fully cash derivative securities collateralized derivative collateralized approximately 3.0% of total investments at June securities comprised approximately June 30, 2006.
15
Through an Through an agreement agreement with its primary with its primary investment investment custodian, custodian, the the University University participates participates in in lending lending securities securities to brokers.
to brokers. Collateral Collateral is is generally limited to generally limited to cash, government securities, cash, government securities, andand irrevocable letters of irrevocable letters of credit.
credit.
Both the Both investment custodian the investment custodian and and the the security borrowers have security borrowers have the the right right to to terminate terminate aa specific loan of specific loan of securities at securities time. The any time.
at any University receives The University lending fees receives lending and continues fees and continues to eam interest to eamn interest and dividends on and dividends on the loaned the loaned securities.
securities. At June 30, At June 30, 2007 2007 and 2006, the and 2006, University held the University held $309,682,000
$309,682,000 and and $220,032,000,
$220,032,000, respectively, of respectively, of cash cash andand cash cash equivalents equivalents as collateral deposits as collateral deposits for the securities for the program. The lending program.
securities lending The collateral is collateral is included included as as an an asset asset and and the obligation to the obligation to return return such such collateral collateral isis presented presented as as aa liability in the liability in the statements of consolidated statements consolidated of financial position. The financial position. securities on The securities on loan loan hadhad an an estimated estimated fair fair value value of of
$303,370,000 and
$303,370,000 and $216,174,000
$216,174,000 at June 30, at June 30, 2007 2007 andand 2006, 2006, respectively.
respectively.
- 4. POOLED
- 4. POOLED ASSETSASSETS The The University uses aa "total University uses "total return" approach to return" approach endowment fund to endowment fund investment management. This investment management. approach This approach emphasizes emphasizes total total investment investment returnreturn (current (current income income plusplus oror minus realized and minus realized unrealized capital and unrealized gains and capital gains and losses) as losses) as the the basis for endowment basis for endowment spending.spending. The The University University has has implemented implemented an endowment income an endowment income spending policy whereby spending policy whereby a a predetermined predetermined amount amount is is paid paid out out each each fiscal fiscal year based upon year b.ased upon a prescribed a prescribed formula in formula in accordance accordance with Pennsylvania statutes.
with Pennsylvania statutes.
Investments aggregating $1,587,197,000 Investments aggregating $1,587,197,000 and $1,303,476,000 at and $1,303,476,000 June 30, at June 30, 2007 2007 and 2006, respectively, and 2006, respectively, for for certain endowment certain endowment funds funds andand funds funds functioning functioning as as endowments endowments are pooled on are pooled on a a market value basis, market value basis, with with each individual each individual fund fund subscribing subscribing to to or or disposing disposing of of units units onon thethe basis basis of of the the market market value per unit value per unit atat the the beginning of beginning of the month when the month when the transaction takes the transaction place.
takes place.
The following The schedule summarizes following schedule summarizes certain certain information information about pooled assets about pooled assets on on a a per per unit unit basis basis asas ofof June June I 30:
30:
2007 2007 2006 2006 Market value Market per unit value per unit $ 32.57
$ 32.57 .$$ 28.28 28.28 Annual net Annual net gains gains perper unit unit $
$ 4.294.29 $
$ 2.21 2.21 Average annual Average annual earnings earnings per per unit, unit, exclusive of gains $
exclusive of gains $ 1.421.42
$ 0.85 0.85
° 55.. CONTRIBUTIONS CONTRIBUTIONS RECEIVABLE RECEIVABLE Contributions . receivable Contributions recei vable are are summarized summarized as as follows follows as as ofof June June
. 30: 30:
2007 2007 2006 2006 In one In one year year or or less less $$ 52,568,000 52,568,000 $
$ 45,258,000 45,258,000 Between one Between one year year and and five five years years 64,024,000 64,024,000 47,666,000 47,666,000 More than More than five years five years 76.511.000 76,511.000 70,397.000 70,397,000 193,103,000 193,103,000 163,321,000 163,321,000 Less allowance Less allowance (9,459,000)
(9,459,000) (7,196,000)
(7,196,000)
Less discount Less discount (49,325,000)
(49,325,000) (45.685.000)
(45,685,000)
Contributions receivable, Contributions receivable, net net $143900
$ 134.319,000 Stoo0=
$ 110440,000 At June At 30, 2007 June 30, 2007 andand 2006, 2006, the the University University has has received received bequest bequest intentions intentions andand certain certain other other conditional conditional promises to promises to give give of $30,748,000 and of $30,748,000 and $14,160,000,
$14,160,000, respectively.
respectively. These These intentions intentions and and conditional promises conditional promises to give to giv e are are not not included included in in the the consolidated consolidated financial financial statements.
statements.
16.
16.
- 6. LONG-TERM
- 6. LONG-TERM DEBT The various bond issues, note payable and capital obligations that are included capital lease obligations in included in long-term debt in position consist of the following:
statements of financial position the statements 2007 2006 Penns~vania State Universit~
The Pennsylvania Bonds University Bonds 2007A Series 2007 A $
$ 90,570,000 90,570,000 $
Series 2007B 80,025,000 80,025,000 Series 2005 96,555,000 96,555,000 98,175,000 98,175,000 Series 2004A 59,930,000 59,930,000 60,980,000 60,980,000 Refunding Series 2003 26,260,000 26,260,000 28,130,000 28,130,000 Series of 2002 100,000,000 100,000,000 100,000,000 100,000,000 Refunding Series 2002 126,835,000 126,835,000 140,760,000 140,760,000 Refunding Series 2001 Refunding 34,590,000 34,590,000 42,235,000 42,235,000 Series A of 2001 75,000,000 75,000,000 75,000,000 75,000,000 1997 Series A of 1997 86,750,000 86,750,000 Series B of 1997 1997 8,805,000 8,805,000 9,475,000 9,475,000 Higher Educational Penns~vania Higher Pennsylvania Facilities Educational Facilities Authoritv Universit~
Authority Bonds Revenue Bonds University Revenue Pennsylvania State (issued for The Penns~vania State University)
Series 2006 4,650,000 4,700,000 4,700,000 Series 2004 5,215,000 5,215,000 5,410,000 Series 2002 5,965,000 5,965,000 6,250,000 L~coming County Authority Lycomina Coun~ College Authorit~Coliege Revenue Bonds (issued for Penn College)
Revenue College)
Series 2005 15,225,000 15,225,000 15,555,000 15,555,000 Series 2003 6,495,000 6,495,000 9,565,000 Series Series 2002 29,995,000 29,995,000 30,325,000 30,325,000 Series 2000 39,370,000 39,370,000 39,370,000 1997 Series 1997 11,300,000 11,300,000 11,530,000 11,530,000 1993 Series 1993 11,954,000 11.954,000 11,565,000 11,565,000 payable Total bonds payable 828,739,000 828,739,000 775,775,000 775,775,000 Unamortized bond premiums Unamortized premiums 24,704,000 24,704,000 17,399,000 17,399,000 payable and cagital Note ga~able Note leases capital leases 10,000,000
"- Demand note payable Demand note payable 10,000,000 10,000,000 10,000,000 lease obligations Capital lease obligations 16,739,000 16,739,000 18,026,000 18,026,000 Deferred lease Deferred lease obligation 31,324,000 31,324,000 leases Total note payable and capital leases Total 58,063,000 58,063,000 28,026,000 28,026,000 Total long-term debt ~ 9:1 :1 !5Q6.QQQ $ 82:1 !2QQ.QQQ 17
The Pennsylvania Pennsylvania State State University University Bonds Bonds
- Series 2007 2007A A and 2007B 2007B - general obligation obligation bonds issued in in January 2007 for the the purpose of funding funding renovation projects various construction and renovation projects and for the advance advance refunding refunding ofof the the Series Series 1997 1997A Bonds.
A Bonds.
The University, in conjunction The conjunction with the issuance issuance of of the Series Series 2007B 2007B bonds, legally legally defeased the the Series Series of 1997 A of 1997 Bonds, with an outstanding principal of $84,540,000, by irrevocably depositing $88,341,000 in in an escrow fund to be used used to pay the interest accrued, maturing maturing principal on on and the redemption price of the refunded bonds. As a result result of the advance advance refunding transaction, amounts related to the Series Series 1997A Bonds 1997A Bonds have been removed removed from the University's University's June 30,2007 30, 2007 statement of financial position. position.
payments on the Series 2007 Principal payments 2007A A and 2007B bonds are due annually, annually, in in amounts amounts ranging from
$2,770,000 to $5,955,000 through August 2027, 2027, with additional payments of $11,115,000$11,115,000 due August
$70,905,000 due August 2036. The bonds pay interest at rates 2028 and $70,905,000 rates ranging ranging from 3.55% to 5.25%
redemption beginning and are subject to sinking fund redemption beginning August 2023 and early redemption redemption provisions, at the option of the University, beginning August 2016.
- Series 2005 - general general obligation bonds issued in January 2005 for the purpose of funding various various construction projects. Principal payments are due annually in construction in amounts ranging from $1,670,000 $1,670,000 to
$2,745,000
$2,745,000 through September September 2019, with additional payments payments of $15,990,000,
$15,990,000, $20,550,000 and
$32,485,000 due September 2024, 2029 and 2034, respectively. The bonds pay interest at rates
$32,485,000 rates ranging from 3.00% to 5.00%5.00% and are subject to sinking fund redemption beginning September 2020 redemption provisions, at the option of the University, beginning September and early redemption September 2015.
- Series 2004A - general obligation bonds issued in April 2004 for the purpose of funding various various Principal payments are due annually construction projects. Principal annually inin amounts ranging from $1,085,000 $1,085,000 to
$1,825,000 through September
$1,825,000 September 2019, with additionaladditional payments of $10,625,000,
$10,625,000, $13,635,000
$13,635,000 and
$17,515,000 due September 2024, 2029 and 2034, respectively. The bonds pay interest at rates
$17,515,000 ranging from 2.50% to 5.00% and are subject to sinking fund redemption beginning September September 2020 and early redemption provisions, at the option of the University, beginning September 2014.
beginning September
- Refunding Refunding Series 2003 - generalgeneral obligation bonds issued in March March 2003 for the purpose purpose of refunding refunding the Refunding 1993A and to pay costs associated with issuing the 2003 Refunding Bonds.
Refunding Series 1993A Principal payments are due annually annually in amounts amounts ranging ranging from $1,910,000
$1,910,000 to $2,970,000 through March 2018. The bonds pay interest March interest at rates ranging from 3.25% to 5.25% and are subject to early early redemption provisions, at the option of the University, beginning March redemption March 2013. .
- Series of 2002 and Series A of 2001 - general general obligation bonds issued in May 2002 for the purpose purpose of funding a portion of the costs of the acquisition, acquisition, construction, construction, equipping, renovation renovation and improvement of improvement of certain facilities of the University University andand April 2001 2001 for the purpose of funding various various construction construction projects, projects, respectively. The bonds are currently paying paying interest on a variable rate basis; however, the University University has the option to convert to another another variable rate or to a fixed rate rate basis basis (such rates are generally determined determined on a marketmarket basis). The bonds currently currently pay interest at 3.71 3.7.1 %
with adjustment adjustment on on aa weekly basis basis to thethe rate the the remarketing remarketing agent believes will cause cause the bondsbonds to market value equal have a market equal to the principal principal amount up to a maximummaximum of 12%. 12%. The bondholders have have the right to tender tender bonds at interest interest rate reset dates. The University, University, therefore, therefore, entered entered intointo standby bond purchase agreements with banks to provide liquidity in case of tender. The principal amount purchase agreements amount of the Series Series of 2002 2002 bonds is due March March 2032; and and the the principal amount amount of the Series A of 2001 is due due April 2031.
2031. The bonds bonds are not subject subject to sinking fund redemption; redemption; however, the University has the the option option to redeem redeem the bonds priorprior to their scheduled scheduled maturity.
- Refunding Refunding Series 2002 - generalgeneral obligation obligation bonds bonds issued issued in May May 20022002 for the purpose purpose of refunding refunding the Second Second Refunding Refunding 1992A 1992A Series (such bonds were were previously previously issued issued to refund refund the Second Second Refunding 1988 Series, 1989 Refunding 1988 1989 Series Series and and 1991 1991 Series Series Bonds). Principal payments are due Principal payments due annually, annually, in amounts amounts ranging ranging from from $4,585,000 to to $1*6,540,000
$1.6,540,000 through August 2016. The bonds pay pay interest interest atat rates ranging from 4.73% to 5.25%.5.25%. The bonds are not subject subject to redemption prior to maturity.
maturity.
18 18
- Refunding Series 2001 - general obligation bonds issued in Refunding in December December 2001 for the purposepurpose of refunding the Refunding Series 1992 Bonds (such bonds were previously issued to refund the 1986 1986 Series and the First Refunding Series of 1988 Bonds). Principal payments are due annually, in Principal payments amounts ranging from $8,025,000
$8,025,000 to $9,290,000
$9,290,000 through March 2011.2011. The bonds pay interest at rates 5.25%. The bonds are not subject to optional redemption prior to maturity.
ranging from 5.00% to 5.25%.
- Series B of 1997 - general general obligation obligation bonds issued in December December 19971997 for the purpose purpose of funding funding construction projects and for refunding various construction Principal payments are due 1992B Bonds. Principal refunding the Series 1992B due annually, in amounts ranging from $700,000 $1,090,000 through August 2016. The bonds pay
$700,000 to $1,090,000 interest at rates ranging from 4.60% to 5.00%. The bonds are not subject subject to optional optional redemption redemption prior to maturity.
Pennsylvania Facilities Authority University Revenue Higher Educational Facilities Pennsylvania Higher Bonds (issued for The Revenue Bonds The Pennsylvania Pennsylvania State University)
- Educational Facilities Authority University Series 2006 - Pennsylvania Higher Educational Revenue Bonds University Revenue Bonds issued by the Pennsylvania Pennsylvania State University purpose of funding the costs of sprinkler University in April 2006 for the purpose system installation and repairs University's dormitories repairs in certain of the University's dormitories during the period 2006-2008, related design costs and payment related payment of issuance issuance costs. PrinCipal payments are due annually in Principal payments amounts ranging from $170,000
$170,000 to $280,000 through September 2020, with an additional additional payment of
$1,610,000 due September 2025. The bonds pay interest at rates ranging
$1,610,000 ranging from 3.55% to 5.125%
and are subject to sinking fund redemption redemption beginning September 2021 and early redemption beginning September redemption option of the University, beginning September provisions, at the option September 2016.
- " Series 2004 Pennsylvania Higher 2004 - Pennsylvania Educational Facilities Authority University Revenue Higher Educational Revenue Bonds issued by the Pennsylvania State University Pennsylvania State University in MayMay 2004 for the purpose*
purpose of funding the costs of sprinkler sprinkler certain of the University's dormitories during system installation and repairs in certain during 2004-2005. Principal annually in amounts ranging from $200,000 to $325,000 through September payments are due annually September 2019, with an additional additional payment payment of $1,905,000 September 2024. The bonds pay interest at rates
$1,905,000 due September rates ranging from 3.00% to 5.00% and are subject to sinking fund redemption September 2020 redemption beginning September redemption provisions, at the option of the University, beginning September 2014.
and early redemption
- " Series Series 2002 - Pennsylvania Pennsylvania Higher Higher Educational Educational Facilities Authority University Revenue Bonds University Revenue Bonds issued by the Pennsylvania State University Pennsylvania State June 2002 for the purpose of funding the costs of sprinkler University in June system installation system and repairs installation and certain of the University's dormitories during the period 2002 repairs in certain annually in amounts ranging from $295,000 to $425,000 Principal payments are due annually through 2004. Principal through March 2017, with an additional payment payment of $2,435,000 due March March 2022. The bonds pay interest at rates ranging interest 3*.55% to 5.00% and are subject to sinking fund redemption ranging from 3".55% beginning redemption beginning redemption provisions, at the option of the University, beginning March 2011.
March 2018 and early redemption March 2011.
Lycoming County Authority Lycoming Authority Collecle College Revenue Collegqe)
Revenue Bonds (issued for Penn College)
- Lycoming County Authority College Revenue Bonds issued by Penn Series 2005 - Lycoming Penn College College in February
$7,765,000 of the Authority's College 2005 for the purpose of refunding $7,765,000 Series of 1997, funding College Bonds, Series funding construction and renovation a deposit into the debt service reserve account, funding various construction renovation projects projects and payment of costs of issuance of 2005 2005 Bonds.
Bonds. Principal annually in amounts Principal payments are due annually amounts
$500,000 to $1,855,000 ranging from $500,000 January 2025. The bonds pay
$1,855,000 through January interest at rates ranging pay interest from 3.00% to 5.00%.
- Series 2003 County Authority College Revenue Bonds issued by Penn 2003 - Lycoming County Penn College in February Revenue Bonds, Series of
$17,385,000 of the Authority's College Revenue 2003 for the purpose of refunding $17,385,000 1993 issuance of 2003 Bonds. Principal payments are due annually payment of costs of issuance 1993 and the payment annually in amounts ranging from $3,180,000 $3,315,000 through November 2008. The bonds pay interest
$3,180,000 to $3,315,000 interest at rates ranging from 2.35% to 4.625%.
19
- Series 2002 - Lycoming County County Authority Authority College Revenue Revenue Bonds issued by Penn College in in May May 2002 for the purpose of funding various 2002 various construction Penn College campus. Principal construction projects at the Penn annually in amounts ranging from $345,000 to $2,775,000 through May 2032. The payments are due annually payments The interest at rates ranging from 3.80% to 5.25%.
bonds pay interest
- . Series Series 2000 - Lycoming County Authority College Revenue Bonds issued by Penn College College in December 2000 December purpose of funding various construction projects, refunding the 1996 2000 for the purpose 1996 Lycoming Lycoming County Authority College Revenue Bonds, advance refunding $4,235,000 of the 1997 County 1997 Lycoming County Authority College Revenue Revenue Bonds (1997 (1997 Series Bonds), funding of aa deposit to the debt service fund fund
. reserve account established established under under the indenture and payment of the costs of issuance of the Series Series 2000 Bonds. Principal payments are due annually in amounts ranging from $30,000 to $5,225,000 $5,225,000 through July 2030. The bonds pay interest at rates ranging from 4.75% to 5.50%.
- Series 1997 - Lycoming County Authority College Revenue Revenue Bonds issued by Penn College College in September September 19971997 for the purpose purpose of funding various construction projects at the Penn College campus.
Principal payments are due annually $5,010,000 through July annually in amounts ranging from $275,000 to $5,010,000 2018. The bonds pay interest at rates ranging ranging from 4.90% to 5.25%. The 1997 Series Bonds were partially refunded by the 2000 Series Bonds at par par amounting amounting to $4,235,000.
- 1993 - Lycoming County Authority Series 1993 Authority College Revenue Bonds issued by Penn College Revenue Penn College in 1993 1993 for undertaking a series of capital the purpose of undertaking improvement projects. Principal payments are due capital improvement due annually in amounts amounts ranging from $450,000 to $1,302,000 November 2015. The bonds pay
$1,302,000 through November interest at rates ranging from 6.00% to 6.15%.
interest requirements on bonds payable for each of the next five fiscal years and Maturities and sinking fund requirements summarized as follows:
thereafter are summarized Annual Year Installments Installments 2008 $ 36,935,000 36,935,000 2009 37,345,000 37,345,000 2010 35,780,000 35,780,000 2011 2011 35,600,000.
35,600,000*
2012 28,090,000 28,090,000 Thereafter Thereafter 654,989,000 654,989,000 University's bonds payable is estimated based on current The fair value of the University's offered for similar current rates offered similar issues with similar security, terms and maturities using market information as supplied by the available market using available the various financial institutions who act as trustees or custodians for the University. At June 30, 2007, the financial institutions the carrying value and estimated carrying estimated fair value of the University's bonds payable, including issuance premiums, are
$853,443,000 and $845,086,000, respectively. At June 30, 2006, the carrying value and estimated fair
$853,443,000 University's bonds payable, value of the University's issuance* premiums, payable, including issuance $793,174,000 and premiums, were $793,174,000
$791,870,000, respectively.
$791,870,000, Certain bond issues have associated issuance associated issuance premiums, these issuance issuance premiums total $24,704,000 and $17,399,000$17,399,000 at June 30, 2007 and and 2006, respectively respectively and are presented statement of financial within the statement financial position issuance premiums will be amortized position as long-term debt. . These issuance amortized outstanding bonds.
over the term of the respective outstanding 20 20
Note payable and capital leases leases
$10,000,000 demand note payable A $10,000,000 interest at a variable rate (4.95% at June 30, 2007) is included payable bearing interest in the current portion of long-term long-term debt within the statements statements of financial position.
The University has certain lease lease agreements agreements in effect which are considered considered capital leases leases that are included included as long-term debt in the statements of financial position.
position. These leases have been capitalized at the net been capitalized present value of the minimum lease payments. The University has recorded recorded fixed assets in the amount of
$26,937,000 and $27,122,000
$27,122,000 at June 30, 2007 and 2006, respectively, representing atJune capitalized leases.
representing capitalized Future minimum minimum lease payments payments under under capital leases together with the present value of the net minimum payments as of June 30, 2007 are as follows:
lease payments Year 2008 $ 2,643,000 2,643,000 2009 2,363,000 2,363,000 2010 2,146,000 2,146,000 2011 1,913,000 1,913,000 2012 1,838,000 1,838,000 Thereafter 15,257,000 15.257.000 Total minimum lease payments 26,160,000 Total minimum lease payments 26,160,000 Less imputed interest interest (9,421,000)
Present value of net minimum lease payments $ 16.739;000 The University University has entered into a Master Master Building Sublease Sublease with ADG - Hospital Drive Associates ("ADG- ("ADG-HDA"), a limited partnership (of which the University maintains maintains a 75% interest, carried at $1,329,000
$1,329,000 and
$1,202,000
$1,202,000 in investments at June 30, 2007 and 2006, respectively), which required ADG-HDA to construct the Centre Medical Sciences Sciences Building ("Building")
("Building") and lease lease it to the University University for an initial term of twenty-five years. The Building was constructed constructed on land jOintly jointly owned by the University University and Mount Nittany Nittany Medical Center, which has been leased by ADG-HDA ADG-HDA for a term of sixty years. The University has subleased portions of the Building Building to the Mount Medical Center and other healthcare Mount Nittany Medical healthcare related entities. The The University is required to pay an annual base rent equal University equal to the sum of (1) the principal, principal, interest and and redemption price due due on the Centre" Centre County Higher Higher Education Authority Bonds which were issued issued to finance finance the construction construction of the Building, and (2) an 8% return on the landlord's equity which is included above above as aa capitalized lease.
capitalized During During 2007, TMSHMC enteredentered into a lease agreement agreement for a facility currently under construction located on the Medical Center's campus. As a result of certain provisions contained within the lease lease and related agreements, the Medical Center agreements, Center has accounted for the facility as an owned facility and is therefore therefore recognizing non-cash construction costs incurred recognizing to date (included incurred todate (included as construction construction in progress), together with a corresponding deferred lease obligation, corresponding deferred obligation, as of June June 30, 2007, in the amount of $31,324,000.
30,2007, 21
- 7. OPERATING LEASES LEASES The University has certain lease agreements agreements in effect considered operating effect which are considered operating leases. During the the year ended year ended June 30, 2007, the University University recorded recorded expenses $23,570,000 for leased equipment expenses of $23,570,000 equipment and
$13,541,000
$13,541,000 for leased During the year ended June 30, 2006, the University leased building space. During University recorded expenses of $22,075,000 for leased equipment $13,216,000 for leased building space.
equipment and $13,216,000 Future minimum lease payments opera~ing leases payments under operating leases as of June 30, 2007 are as follows:
Year 2008 $ 14,780,000 14,780,000 2009 10,195,000 10,195,000 2010 7,208,000 7,208,000 2011 5,319,000 5,319,000 2012 4,411,000 Thereafter Thereafter 27.004,000 27,004,000 Total minimum lease payments $$ 68,917,000 68.917.000 RETIREMENT BENEFITS
- 8. RETIREMENT BENEFITS The University provides retirement benefits for substantially all regular employees, primarily through either either
.contributory contributory defined defined benefit plans administered administered by the Commonwealth Commonwealth of Pennsylvania Pennsylvania State Employees' Retirement System and The Public School Employees' Retirement defined contribution Retirement System or defined plans contribution plans administered by the Teachers administered Teachers Insurance Insurance and Annuity Association Association - College Retirement Equity Fund and College Retirement Fidelity Investments. The University estimated actuarial cost of the defined University is billed for its share of the estimated defined
$7,390,000 for the years ended June benefit plans ($9,866,000 and $7,390,000 June 30, 2007 imd respectively). The and 2006, respectively). The
$92,863,000 and $84,871,000 for the benefits, included in expenses, is $92,863,000 University's total cost for retirement benefits, the years ended June 30, 2007 2007 and 2006, respectively.
- 9. POSTRETIREMENT
- 9. POSTRETIREMENT BENEFITS BENEFITS The University sponsors a ~etiree medical plan covering eligible retirees and eligible retiree medical dependents. For the eligible dependents. the 2007 benefit plan year, this program includes includes a Preferred Organization ("PPO") plan for retirees Provider Organization Preferred Provider retirees and their dependents dependents who are are not eligible for Medicare, aa Medicare Private Fee For Service Medicare Advantage Private Service
("PFFS") plan and a Medicare Advantage HMO Medicare Advantage HMO plan. In University provides retiree addition, the University In addition,. life retiree life benefits of $5,000 at no cost to the retiree. A limited number insurance benefits number of retirees $10,000 of life retirees have $10,000 life insurance coverage; $5,000 of which is provided by the University coverage; $5,000 University and $5,000 is paid by the retiree.
insurance after they retire if:
Retirees are eligible for medical coverage and life insurance if:
- they are at least age 60 and have at least 15 years of regular full-time employment employment and and participation in a University-sponsored participation UniverSity-sponsored medical plan immediately immediately preceding preceding the retirement date OR OR
- " have at least 25 years of regular full-time service. The last 10 of those regardless of age, if they have those years of University service must be continuous and they must participate 25 years University -
partiCipate in a University sponsored medical preceding the retirement immediately preceding medical plan during the last 10 years immediately retirement date.
22
The retiree PPO medical plan and the the $5,000 life insurance coverage are self-funded programs, and all insurance coverage medical claims, death benefits benefits and other expenses expenses are paid assets of the unrestricted net assets from the unrestricted the University. The PFFS plan and the Medicare Medicare Advantage HMO plan are fully insured. The retirees retirees contribute varying amounts contribute coverage under the medical plan.
amounts for coverage January 1, 2007, the monthly plan. As of January monthly rates ranged ranged from $8 $8 to $409 depending depending on age and dependent dependent coverage options selected.
Effective June 30, 2007, the UniversityUniversity adopted adopted SFAS No. 158, Employers' Accounting 158, Employers' Accounting for Defined for Defined Pension and Benefit Pension Benefit Other Postretirement and Other Plans - an amendment Postretirement Plans amendment of SFAS No's. 87, 88, 106 and 132(R) 132(R)
("SFAS No. 158").158"). The new standard standard requires recognized as aa requires that the funded status of the plan be fully recognized net asset or liability within the statements of financial position. Additionally, SFAS No. 158 requires an measure the funded status of the plan as of the date of the fiscal year-end statement of employer to measure employer financial position. University has historically position. The University historically measured continues to measure the funded status measured and continues status of the plan as of June 30.
The incremental effect of adopting the provision of SFAS incremental effect SFAS No. 158 on the University's University's statement of position at June 30, 2007 is as follows:
financial position Prior to Effect of of Adoption Ado~tion Adoption Ado~tion Reported As Re~orted Accrued postretirement Accrued benefits postretirement benefits 730,961,000 730,961,000
$$- 103,601,000 103,601,000 $ 834,562,000 Unrestricted Unrestricted net assets $ 3,081,651,000 3,081,651,000 (103,601,000)
$ (103,601,000) $ 2,978,050,000 The following following sets forth the plan's benefit benefit obligation, the reconciled with the obligation, plan assets and funded status reconciled consolidated statements of financial amounts recognized in the University's consolidated financial position at June 30:
Change in benefit obligation:
obligation:
2007 2006 beginning of year Benefit obligation at beginning year $ 822,552,000 822,552,000 $ 805,034,000 805,034,000 Service cost 29,693,000 40,118,000 40,118,000 Interest cost 48,168,000 48,168,000 46,604,000 46,604,000 Actuarial loss loss 72,109,000 3,877,000 Benefits paid Benefits (29,081,000) (28,142,000)
Plan amendment amendment (178,478,000)
(178,478,000) (44,939,000)
Plan assumptions assumptions 69,599,000 69,599,000 obligation at end of year Benefit obligation $$ 834,562,000 834.562,00Q $ 822.552.000 Change Change in in plan assets:
2007 2006
- Fair value of plan assets at beginning
-Fair beginning of year $ - $
contributions Employer contributions 29,081,000 28,142,000 28,142,000 (29,081,000) (28,142,000)
Benefits paid (29,081,000) (28,142,000)
Fair value of plan assets at end of year $ $
Funded status status $ (834,562,000)
(834,562,000) $ (822,552,000)
Unrecognized prior service Unrecognized service cost (benefit) - (41,106,000)
Unrecognized Unrecognized net actuarial loss loss - 176,713,000 176,713,000
$ (834.562.000) $ (686,945,000* "
postretirement benefit Accrued postretirement expense benefit expense ~ (834.562.000) ~ (686 1945 1000) assets at June 30, 2007, are the following amounts that have not yet been unrestricted net assets Included in unrestricted
,recognized in
.recognized in net periodic periodic postretirement postretirement cost: unrecognized prior service cost (benefit) of ($216,018,000) unrecognized prior and unrecognized unrecognized actuarial loss of $319,619,000.
$319,619,000.
23
Net periodic postretirement postretirement cost includes the the following components for the years ended ended June 30:
2007 2006 Service cost Service $$ 29,693,000 $ 40,118,000 40,118,000 Interest cost Interest 48,168,000 48,168,000 46,604,000 46,604,000 Amortization of prior service cost (21,629,000) (3,567,000)
Amortization Amortization 'of unrecognized unrecognized net loss 16,863,000 16,863,000 15.494,000 15,494,000 Net periodic postretirement cost periodic postretirement $$ 73.095,000 Z3.095 000 :s
$ .98.649,000 98, healthcare cost trend rate used in measuring the accumulated The assumed healthcare accumulated postretirement postretirement benefit obligation was 9.50% and 10.00%
obligation 2006-2007 and 2005-2006 10.00% for the 2006-2007 2005-2006 plan years, respectively, respectively, reduced by 0.50% per year to a fixed level of 5.00%. The weighted average average postretirement obligation discount postretirement benefit obligation discount rate was 6.25% for each of the years ended June 30, 2007 and 2006, respectively.
If the healthcare healthcare cost trend rate assumptions assumptions were increased by 1 were increased 1%% in each year, the accumulated accumulated postretirement benefit obligation would be increased by $145,204,000 postretirement $137,520,000 as of June 30,
$145,204,000 and $137,520,000 2007 and 2006, respectively. The effect of this change change on the sum of the service cost and and interest cost components of the net periodic postretirement benefit benefit cost would be an increase $16,311,000 and increase of $16,311,000
$19,146,000 as of June
$19,146,000 respectively. If June 30, 2007 and 2006, respectively. healthcare cost trend rate assumptions were If the healthcare were decreased by 1 decreased 1%% in each year, the accumulated accumulated postretirement postretirement benefit obligation would be decreased decreased by
$110,796,000 as of June
$115,930,000 and $110,796,000
$115,930,000 30, 2007 and 2006, respectively. The effect of this change June 30,2007 change on the sum of the service cost and interest cost components postretirement benefit cost components of the net periodic postretirement would be a decrease decrease of $12,664,000 $14,813,000 as of June
$12,664,000 and $14,813,000 June 30, 2007 and 2006, respectively.
The postretirement postretirement benefits expected expected to be paid in each year for 2008-2012 in each 2008-2012 are $30,162,000,
$30,162,000, $32,259,000,
$37,035,000 and $39,591,000, respectively. The benefits expected
$34,497,000, $37,035,000 expected to be paid in the five five 2013-2017 are $247,686,000.
years from 2013-2017 $247,686,000.
Gains and losses in excess of 10% 10% of the accumulated postretirement benefit obligation are amortized over accumulated postretirement assumed retirement of active service to assumed average future service the average active participants.
amendment included The plan amendment included inin 2006 reflects changes in the premium cost sharing contributions contributions for Medicare-eligible retirees.
Medicare-eligible
- 10. THE MILTON
- 10. MILTON S. S. HERSHEY MEDICAL CENTER HERSHEY MEDICAL CENTER The University's wholly-owned wholly-owned subsidiary, TMSHMC, owns the assets of the clinical enterprise enterprise of the the University owns the Hershey Medical Medical Center complex. The University Hershey Medical Hershey Medical Center complex, including all buildings and landland occupied occupied by the University operates the College of Medicine. The clinical Hospital and operates University Hospital facilities of the Hershey Center complex are leased Hershey Medical Center leased to TMSHMC TMSHMC and TMSHMCTMSHMC makes certain payments to support the College of Medicine.Medicine.
CONTINGENCIES AND
- 11. CONTINGENCIES
- 11. AND COMMITMENTS COMMITMENTS Contractual Obligations Contractual Obligations construction of new buildings and for additions to existing obligations for the construction The University has contractual obligations buildings in the amount of $459,618,000 $294,816,000 has been paid or accrued as of June
$459,618,000 of which $294,816,000 June 30, 2007. The contract costs are being financedfinanced from available resources and from borrowings.
available resources Under the terms of certain limited partnershippartnership agreements, the University is obligated to periodically periodically advance additional advance funding for private equity and real estate investments. The University University has unfunded commitments commitments of approximately approximately $184,477,000
$184,477,000 as of June 30, 2007 for which capital calls have not been exercised. Such exercised. commitments generally have fixed expiration dates Such' commitments dates or other termination clauses. The The maintains sufficient University maintains in its investment portfolio in the event that such calls are exercised.
sufficient liquidity in 24 24
Letters of Credit The University has outstanding letters The letters of credit inin the the amount of $17,328,000
$17,328,000 and $17,976,000 as of June June 2007 and 30, 2007 and 2006, respectively. These These letters letters of credit are used primarily to comply with minimum minimum state and federal regulatory laws laws that that govern govern various various University activities.
activities. The fair value value of these letters letters of of credit credit approximates contract values based on the nature of the fee arrangements approximates arrangements with the issuing banks.
Self-Insurance Self-Insurance The University University has a coordinated coordinated program of commercial and self-insurance self-insurance for medical medical malpractice claims claims at TMSHMC through the use of a qualified trust and a domestic captive insurance insurance company in combination combination with a self-insured retention layer and is supplementing supplementing this program program through participation in* in thethe Pennsylvania Medical Pennsylvania Medical Care Availability and and Reduction Reduction of Error Fund Fund ("Mcare
("Mcare Fund"),
Fund"), formerly .the the Pennsylvania Medical*
Pennsylvania Medical Professional Professional Liability Catastrophe Catastrophe Loss Fund ("CAT Fund"), in accordance accordance with Pennsylvania law.
Pennsylvania law. An estimate of the present value, discounted at 4%, of the medical malpractice malpractice claims claims liability in the amount of $72,877,000 and $71,151,000 is recorded as of June 30, 2007 and 2006, respectively.
On July 1, 2003, TMSHMCTMSHMC* became self-insured for all medical malpractice claims asserted on or after July 1, 2003, for all amounts that are below the coverage of the TMSHMC's TMSHMC's excess insurance insurance policies and not included in the insurance coverage of the Mcare included Mcare Fund. Under the self-insurance self-insurance program, TMSHMC TMSHMC is required to maintain a malpractice trust fund in an amount at least equal to the expected expected loss of known claims. The balance balance of this trust fund was $16,399,000
$16,399,000 and $15,419,000
$15,419,000 at June 30, 2007 and 2006, respectively. TMSHMC intends to fund any claims due during the next year from cash flows from from operations.
With approval from the Pennsylvania Pennsylvania Department of Labor and Industry Industry ("PA-DLI"), the University elected to self-insure self-insure potential obligations applicable applicable to workers' workers' compensation. Certain Certain claims under the program are are contractually administered by a private agency. The University contractually administered University purchased insurance coverage coverage for excess obligations over $600,000 per incident. An estimate of the self-insured compensation claims self-insured workers' compensation claims liability in the amount of $9,662,000 $7,371,000 is recorded
$9,662,000 and $7,371,000 recorded as of June June 30, 2007 and 2006, respectively.
The University has established established a trust fund, in the amountamount of $9,955,000 and $9,348,000$9,348,000 at June 30, 2007 and June June 30, 2006, respectively, as required by PA-DLI, to provide provide for the payment of claims under under this self-insurance program. TMSHMC is self-insured for workers' compensation claims and has purchased insurance purchased an excess policy through aa commercial commercial insurer which covers covers individual individual claims claims in excess of $500,000 $500,000 per incident for workers' compensation incident compensation claims.
The Universityand University and TMSHMC TMSHMC are are self-insured self-insured for certain health health care benefits provided provided to employees.
employees. The The University and TMSHMC have University purchased excess have purchased excess policies which cover cover employee employee healthhealth benefit claims in in excess excess of $500,000
$500,000 and $300,000
$300,000 per employee employee per per year, respectively. University and TMSHMC respectively. The University TMSHMC provide for reported reported claims claims and claims incurred incurred but not reported.
Liti-gation and Contingencies Litigation Contingencies proceedings have arisen Various legal proceedings a~isen in the course course of conducting University University business. The outcome outcome of such litigation litigation is not expected expected to have have a material material effect on the financial position position of the University.
University.
Based on its operation operation of the University University Hospital Hospital (see Note Note 10), the University, like like the healthcare healthcare industry, is subject subject to numerous numerous laws and and regulations regulations of federal, federal, state and and local governments.
governments. Compliance Compliance with with these these laws and and regulations can be subject be subject to government government review and interpretation, interpretation, as well w~1I as regulatory regulatory actions.
Recently, government government reviews reviews ofof healthcare healthcare providers providers for compliance compliance with with regulations have have increased.
increased.
Although Although the University University believes believes it has done done itsits best to comply comply with with these numerous regulations, these numerous regulations, such government reviews government reviews could could result in significant significant repayments repayments of previously previously billed billed and collected collected revenues revenues fromfrom patient patient services.
services.
25 25
PENNSYLVANIA STATE THE PENNSYLVANIA STATE UNIVERSITYUNIVERSITY BOARD BOARD OF TRUSTEESTRUSTEES as of September September 28, 28. 2007 APPOINTED BY THE GOVERNOR APPOINTED GOVERNOR MEMBERS MEMBERS EX OFFICIO OFFICIO ELECTED BY ALUMNI ALUMNI CYNTHIA A. A. BALDWIN BALDWIN EDWARD G. RENDELL EDWARD RENDELL MARIANNE E.
MARIANNE E. ALEXANDER ALEXANDER Justice. Supreme Court of Pennsylvania Justice, Pennsylvania Governor Governor of the Commonwealth* President Emerita President Emerita Public Leadership Education Public Leadership Education Network EUGENE B. CHAIKEN CHAIKEN DENNIS DENNIS C. WOLFF Chainnan/CEO, Almo Chairman/CEO, Alma Corporation Corporation Secretary, Department Secretary. Department of Agriculture Agriculture JESSE ARNELLE H. JESSE ARNELLE Attorney ALVIN ALVIN H.H. CLEMENS CLEMENS GERALD L.
GERALD L. ZAHORCHAK ZAHORCHAK Chariman Chari man and Chief Executive Officer Executive Officer Secretary, Department of Secretary. Department Education of Education STEVE STEVE A. A. GARBAN Health Health Benefits Direct Corporation Senior Vice Vice President for Finance Finance and and MICHAEL MICHAEL DiBERARDINIS DIBERARDINIS Operations/Treasurer Emeritus OperationslTreasurer Emeritus GALEN GALEN T. FOULKE FOULKE Secretary, Department of Secretary. of Conservation The Pennsylvania Pennsylvania State University Graduate Graduate Student and Natural Natural Resources Resources The Pennsylvania Pennsylvania State University State University GEORGE T. HENNING.
HENNING, JR: JR.
GRAHAM SPANIER GRAHAM B. SPANIER Business Consultant and Business Retired CFO and Retired IRA M. LUBERT M. LUBERT President of the University President University LTVCorporation LTV Lubert-Adler Partners, L.P.
Lubert-Adler Partners, ROBERT ROBERT C. C. DANIELS DANIELS DAVIDR. JONES DAVID JONES.
PATRICIA K. K. POPRIK Court of Pennsylvania Judge, Superior Court Pennsylv*ania Assistant Managing Managing Editor Editor (Retired)
(Retired)
President, First American Municipals Inc. *Governor's Non-Voting
- Governor's Representative Non-Voting Representative The New York Times New York Times DAVID DAVID M. M. JOYNER ELECTED BY DELEGATES FROM ELECTED BY BOARD REPRESENTING REPRESENTING Orthopedic OrthopediC Physician AGRICULTURAL AGRICULTURAL SOCIETIES SOCIETIES BUSINESS BUSINESS AND INDUSTRY JOEL JOEL N. MYERS*
MYERS -
KEITH W. ECKEL JAMES S.
JAMES S. BROADHURST BROADHURST President Partner, Fred Partner. Fred W. Eckel Sons W. Eckel Sons Fanns, Farms, Inc.
Inc. Chairman and Chief Executive Officer Chief Executive Officer AccuWeather, AccuWeather, Inc.
Eat'n Park Park Hospitality Hospitality Group, Group, Inc.
SAMUEL E. E. HAYES, HAYES. JR. ANNE RILEY RILEY EDWARD R. HINTZ, EDWARD HINTZ. JR. Teacher BARRON BARRON L. L. HETHERINGTON HETHERINGTON President President Owner, B Owner, B&&R R Farms Farms HHR HHR Asset.Management, Asset,Management, LLC LLC PAUL PAUL V. SUHEY Orthopedic Orthopedic Surgeon BETSY E. HUBER HUBER EDWARD P.
EDWARD JUNKER III P. JUNKER III University University Orthopedics Orthopedics and and Sports Medicine Sports Medidne Master, Pennsylvania Master, Pennsylvania State State Grange Grange Retired Vice Chairman PNC Bank.Corp.
BankCorp.
WALTER N. PEECHATKA PEECHATKA Executive Vice President President ROBERT D.
ROBERT D. METZGAR METZGAR PennAg Pen nAg Industries Association Chief Executive Executive Officer Officer North Penn Pipe North Pipe &&Supply.
Supply, Inc.
Inc.
CARL T. SHAFFER CARLT.SHAFFER President LINDA STRUMPF LINDA B. STRUMPF Pennsylvania Pennsylvania Farm Farm Bureau Vice President and Chief Investment Officer Vice PreSident The Ford Foundation Foundation JOHN JOHN P. SURMA Chairman andand Chief Executive Executive Officer Officer United States Steel Corporation United TRUSTEES EMERITI TRUSTEES MARY G. G. BEAHM ROBERT M. FREY WILLIAM A. SCHREYER SCHREYER Corporate Vice Vice President President ofof Human Resources Human Resources Attorney-at-Law Attorney*at*Law Chairman Emeritus Emeritus C-COR.net C-COR.nel Corp. Merrill Lynch && Co Co.,.* Inc.
J. LLOYD HUCK J. LLOYD HUCK HOWARD HOWARD O. 0. BEAVER, BEAVER. JR. Retired Retired Chairman of the BoardBoard CECILE M. SPRINGER SPRINGER Director and Retired Director and Retired Chairman Chairman of the the Board Board Merck and and Company, Inc.Inc. President, Springer Associates Associates I Carpenter Technology Corporation Carpenter Technology Corporation ROGER A.
ROGER A. MADIGAN MADIGAN HELEN D. WISE HELEN CHARLES CHARLES C. BROSIUS BROSIUS State Se*nator State Senator Former Deputy ChiefChief of Staff for Retired President, Retired President, Marlboro Manboro Mushrooms Mushrooms 23rd 23rd Senatorial District Programs and Secretary Programs Secretary of thethe Cabinet, Governors Office Cabinet, Governor's Office WALTER J.
WALTER J. CONTI BARRY K. ROBINSON ROBINSON Retired Owner Retired Owner Senior Counsel Counsel for Corporate Affairs Affairs BOYD E. WOLFF WOLFF Cross Keys Cross Keys Inn/Pipersville Inn/Pipersville Inn Inn Recording Industry Association Association of America America Retired, Retired, Owner and Operator Operator Farms Wolfden Farms DONALD DONALD M. M. COOK.
COOK, JR. JR. L. J.
J. ROWELL. JR.
Retired President Retired President Retired Chairman and QUENTIN E.
QUENTIN E. WOOD SEMCOR, SEMCOR. Inc. Inc. Chief Executive Officer Chief Executive Officer Retired Chairman Retired Chairman ofof the the Board Board Provident Mutual UfeLife Insurance Insurance Company Quaker State Corporation Quaker MARIAN MARIAN U. U. BARASH BARASH COPPERSMITH COPPERSMITH Chairman of Chairman of the the Board Board STANLEY G.
STANLEY G. SCHAFFER SCHAFFER EDWARD P. ZEMPRELLI EDWARD The Barash Group The Barash Group Retired Retired President President Attorney Attomey Duquesne Ught Duquesne Light Company Company
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tel. (814) 863-0471.
863-0471.