ML100120101
| ML100120101 | |
| Person / Time | |
|---|---|
| Site: | Rancho Seco |
| Issue date: | 11/19/2009 |
| From: | Flake S Sacramento Municipal Utility District (SMUD) |
| To: | John Hickman Document Control Desk, NRC/FSME/DWMEP |
| References | |
| DPG 09-336 | |
| Download: ML100120101 (6) | |
Text
USMUD SACRAMENTO MUNICIPAL UTILITY DISTRICT PThe Power To Do More.P P.O. Box 15830, Sacranmento, "CAI 95852-1830; 1-888-742-SMUD ( 7683)
DPG 09-336 Noverber 19,2009 U.S.,Nuclear Regulatory Commission Attn.: Document Control Desk Washington, DC 20555-0001 Docket No. 50-3,12 -
RanchoSeco Nuclear Generating Siation LicenseNd. DPR-54 RANCHO SECO NUCLEAR GENERATINGI STATION REQUEST FOR EXEMPTION FROM 10 CFR50.75(h)(2)
Attention: John Hickm.an In:ac.cordance with Title 10, ýCode of Federal Regulations (CFR) section 50.1i2 "Specific Exemptions" the Sacrento Municip al Utilitv District (SMUD) is requesting a one-timeexemption from 410 CFR 50.75(h)(2), which limits withdrawals from a Decommissioning Trust-Fund to decommissioning expenses only. Approvallof this -request Would allow SMUD to-make a6one-time withdrawal of unspent, excess decommissioning funds in the amount of $18,698,000 from the Trust.
On September,25; 2009, he NUclear Regulatory Commission (NkC) approved removal of a pbrtion of the Rancho Seco Nuclear Generating Station (Rancho Seco) site from the 10 CFR.Part 50 license.DPR-54. This effectively signifiedMthe completion of Phase i of the license termination process at Rancho Seco as described in theiNRC-approved License:Termination Plan for Rancho Seco.
With t he completion of Phase I of decommissioning, all projects that have historically presented amajor cost. risk at power reactor decommissionings have been completed. As of the completibn of Phase!, the Decommissioning Trust Fund contained over $38 MM.
Attached to this letteris Table 2 ofthe 2009 Decommissioning Cost Estimate Update, which summarizes all future anticipated decommissioning costs and provides the schedule ofexpenditures. Compa'ed to $21.8 MM estimated cost f6r the remaihing license termination~acfivities', the Trust is significantly over-funded. These funidsare not simply "excess" funds, but representamoney that would have been spent and subsequently-withdrawn from the Trust, if not for SMUD completing decommissioning in a cost effective manner.
DISTRICT HEADQUARTERS,6201 SStreet, SaCTamento CA 95817-1899 To illustrate the extent to which SMUD performed decommissioning at costs well below industry experience, the estimaited and actual costs are compared below for the-Reactor Vessel andReactor Vessel Internals projects. These projects were selected because they represent activities-withhistorically high cost riskkfor large reactor decommissionings.
Actual vs. Estimated Costs ($1,000's)
Project Estimated Costs Actual Costs Unspent Funds Reactor Vessel
$19,301
$5,041
$14,260 Reactor Vessel Internals
$32,741
$18,313
$14,428 The current book value of the Decommissioning Trust Fund is $38,650,428. Given market rates at November 20, 2009, the expected one-time, withdrawal amount (separate from any reimbursementof actual, decommissioning expenses), is $18,698,000. This leaves $19,952, 428 in the, Decommissioning Trust Fund, which will be inv.estedin U.S.
Treasury Stri'ps(an acronym for Separate Trading of Registered Interest and Principal
'Securities). Treasury Strips, are zero coupon instruments which are bought at a discount.
The U.S. Treasury Strip investments will be structured to mature on November 15th of each year in the amount of the :estimated decommissioning costs as presented in the attached table. The.use ofStrips will completely eliminate reinvestment risk and will provide:an exact amount of funds at maturity. U.S. Treasury securities are considered risk free investments and provide more-than reasonable assurance that cash flows will be available to meet the estimated decommissioning expenses.
In summary, all decommissioning activities with significant cost risk haye been
,completed well below estimated costs,:and the Trust Fund will still provide reasonable assurance that remaining decommissioning costs will be funded following a responsible, one-time withdrawal. Asdetailed below, SMUD's exemption request meets the standards of 10 CFR 50.12, and should be approved.
Bases for Specific Exemption Request 10 CFR 50.12(2) states in pertinent part:that:
"The Commission will not consider granting an exemption unless special circumstances are present. Special, circumstances are present whenever...
(ii) Application of the regulation in the particular circumstances would not serve the underlying purpose of the rule or isnot necessary to achieve the underlying purpose of the rule; or (iii) Compliance would result in undue hardship or other costs that are significantly in excess.of those contemplated when the regulation was adopted, or that are significantly in excess of those incurred by others similarly situated;..."
10 CFR 50.75(a) begins: "This section establishes requirements for indicating to NRC how a licensee will providereasonable assurance that funds will be available -for the decommissioning process." 10 CFR 50,75(h)(2) states, in part:: "Disbursements or payments from the trust, escrow account, Government fun d,or other account used to segregate and manage the funds, other than for payment of ordinary administrative costs (including taxes) and other incidental expenses of the fund (includinglegal, accounting, actuariali and trustee expenses) in connection with the operation of the fund, are restricted to decommissioning exnenses or transfer to another financial assurance method acceptable under paragraph (e) of this section until final decommissioning. has been completed." (emphasis added).
Arguments for Specific Exemption Addressing 10 CFR 50.12(2)(ii)" As demonstrated previously,,a withdrawal not strictly defined ash "decommissioning expenses" can be made from-the Trust that will still provide "reasonable assurance that funds Will be availablefor the decommissioning process." Therefore, application of the regulation in this particular circumstance does not serve the underlying purpose of the rule'.
By the same arguments, it is clear thatapplication of 10 CFR 50.75(h)(2) (i.e.,
disallowing a withdraWal).is not necessary to achieve the underlying purpose of the rule.; it is-very clearl that a responsible withdrawal can be made from the Trust that still provides reasonable assuriance that funds'will be available for the remaining decommissioning process.
Addressing 10 CFR 50.1 2(2)(iii): SMUD acted responsibly in complying with the intent of 10 CFR 50.75 by funding the Decommissioning Trust Fund to the level required to complete all decommissioning activities at industry standard costs.
However, it has been demonstrated that SMUD was able.to complete decommissioning at costs well below industry benchmarks. Notelthat SMUD is not-for-profit, and is publicly owned. By keeping costs down, SMUD was acting responsibly on behalf ofits ownef-ratepayers. However, a strict application of10 CFR,:50.75(h)(2) Wouldpenalize SMUD and its owner-ratepayers by locking:away the millions of dollars that remain unspent because of the cost-effective decommissioning of Rancho Seco, ultimately resulting in higher electric costs -for the community.
Because the intent of the regulations can clearly be met by allowing a responsible withdrawal from the. Trust Fund, strict application of the rule, wotild result in an undue hardship to SMUD's owner-ratepayers that could not have'been anticipated when the rule was promulgated.
Summryr Clearly, "special circumstances" are present according to. 10 CFR.50. 12. It.has also been shown that application of 10 CFR 50.75(h)(2) does not serve the underlying purpose of the ruleý,nor is strict application of therule necessary to achieve reasonable assurance that future decommissioning costs-are funded. By acting responsibiy in both fully funding. the Trust, and completing deconminssioniing activities in a cost-effective manner, strict application of the rule would increase costs to SMUDowner-ratepayers by unnecessarily preventing access to funds that are not needed to provide reasonable assurance thatall decommissioning activities will be fully funded.
If you, or members of your staff, have questions requiring additional information or claificqtiOn,-please contact Einar Ronningenat (916) 732-4817.
Sincerely, Scott Flake, P.E.
Manager, Power Generation cc:
John Hickman, NRC Headquarters NRC, Region IV Attachments: Table 2 from the 2009 Decommissioning Cost Estimate Update
- Rancho Seco Nuclear Generatinig Station Area Based Decommissioning Cost Estiiate DPG.09-329 Page.17.of 26 Table. 2 Decommissioning CostEstimate-Phase II (Thousahds of 2009 Dollars-)
Waste Disposal Contract OVERSIGHT SHIP BURY STAFF CNTGCY CNTGCY DESC TOTAL IOSB (part 50 license)
StoredWaste Oversight-Resin Disposal RVI Disposal Part 50 License termination Totals ISFSi (part:72 license)
GTCC Disposal Part 72 License termination Totals TOTAL COST (CE 2009) 2,259 2,259 115 3,019 337 6,550 4
26 456 9,594 143
,396 2,760 3,299 1,534, 1,534 982
.138 1;120, 2,259 3,277 13%'
.8,265 5%0 2,928 7%
16.7.30 34%
- 3,195
--1,835 190/i 5,031
.10%
21,761
.15
- 15 2,386 286 2;672 808 808 2,259 471
'12,267 4,834 1,928
Rancho Seco Nuclear Generating Staiion Area. Based DecommiSsioning Cost Estimate::
DPG 09w329ý Page. 18 of 26 Table 2 Decommissioning Cost Estimate - Phase II (Thousands of 2009 Dollars)
DESC-2009 2010 2011 2012 2013 2014 20115 2016 2017 2018 2019 2020-2026 2027
- 2028, TOTAL IOSBe(part 50 license)
Stored.Waste Over~ight Resin Disposal RVI Disposal Pait 50. License terrfinatior Totals-ISFSI (part 72 license)
GTCC. Disposal Part.72 License terminatior Totals TOTAL. COST (CE 2009) 113 113 113 113-113 113.
113 113:
113 113 113 3,277 791 113 1.13 21259 73,277 8,265 8j265 2,928 "21928 791 113 11,306 16,730 1131 113 113 3,390 113 113 113 113 113 113 113-3,195 3,195 918 918 1i835
- 4,113
.918, 5,03.1 113 113 113 3,390 113 113 113 113 113 113.
113 791 4,226 12,224 21,761