ML100980061

Report on Decommissioning Funding Status

ML100980061
Person / Time
Site:	Rancho Seco
Issue date:	03/25/2010
From:	Ronningen E Sacramento Municipal Utility District (SMUD)
To:	Document Control Desk, NRC/FSME
References
DPG-10-074
Download: ML100980061 (4)

Text

$MUD Pr[ SACRAMENTO MUNICIPAL UTILITY DISTRICT I The Power To Do More.

P.O. Box 15830, Sacramento, CA 95852-1830; 1-888-742-SMUD (7683)

DPG- 10-074 March 25, 2010 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, DC 20555 Docket No. 50-312 Rancho Seco Nuclear Generating Station License No. DPR-54 RANCHO SECO REPORT ON DECOMMISSIONING FUNDING STATUS Attention: John Hickman As required by 10 CFR 50.75(f)(1), we are submitting this report on the status of decommissioning funding for Rancho Seco.

Background

Rancho Seco began commercial power operation in April 1975 and shutdown permanently in June 1989. In 1991, the Sacramento Municipal Utility District (SMUD) submitted the proposed Decommissioning Plan for Rancho Seco, along with a Revised Financial Assurance Plan. The NRC approved the Decommissioning Plan in March 1995, Due to revisions to 10 CFR 50.82, SMUD submitted the Post Shutdown Decommissioning Activities Report for Rancho Seco in March 1997. Rancho Seco has been undergoing decommissioning since February 1997. Phase I of the decommissioning was completed in 2009 when the majority of the facility was released from the license.

The licensed facility now consists of a 1-acre land area containing the Interim Onsite Storage Building (IOSB).

The decommissioning trust fund was fully funded at the end of 2008. However, based upon the lack of an.acceptable low-level radioactive waste disposal facility, SMUD plans to store some Class B and C radioactive waste in the IOSB beyond 2008. When a suitable disposal facility becomes available, the waste will be shipped for disposal and the facility decommissioning will be completed.

Decommissioning Financial Assurance Method and Trust Fund Status SMUD had maintained an internal decommissioning fund since the early 1980s. In 1991, SMUD transferred $90 million from the internal fund into an "External Sinking RANCHO SECO NUCLEAR PLANT

• 14440 Twin Cities Road, Herald,CA 95638-9799; (209) 333-2935

J. Hickman DPG-10-074 Decommissioning Trust Fund" currently maintained by Wells Fargo Bank. Table 1 shows the amount of the trust fund annual contribution and disbursals for the years 1991 through 2008. The total disbursals between 1994 and 2008 are $478.4 million. There was no disbursal made in 2009. At the end of 2009 the trust fund contained $3.8.8 million.

TABLE 1 YEAR ANNUAL ANNUAL DISBURSAL CONTRIBUTION 1991 $90 Million' $0 1992 $12 Million $0 1993 $12 Million $0 1994 $12 Million $35,327,974 1995 $15 Million $24,375,399 1996 $15.5 Million $17,950,000 1997 $16.5 Million $18,400,000 1998 $17.5 Million $21,920,000 1999 $18.5 Million $34,693,319 2000 $18.5 Million $45,847,250 2001 $24.5 Million $36,213,871 2002 $27 Million $40,869,137 2003 $27 Million $23,886,458 2004 $27 Million $31,360,571 2005 $27 Million $34,446,586 2006 $27 Million $31,901,184 2007 $27 Million $44,614,663 2008 $2.25 Million $36,574,857 Cost Estimate TLG Services, Inc. performed the initial cost estimate in 1991, and then performed biennial updates in 1993, 1995, and 1997. When SMUD began decommissioning in 1997, we also began performing annual updates to the decommissioning cost estimate.

SMUD staff performed the 1998 update. TLG performed the 1999 and 2000 annual updates. SMUD staff began performing the annual update beginning with the 2001 cost estimate update through the 2005 cost estimate update with TLG providing quality reviews. The 2006 cost estimate was the first to be finalized without outside agency review. Phase I of decommissioning is now complete with most of the facility released from the license in 2009. The total decommissioning costs are now estimated to be

$503.9 million, including a net increase to future costs of $5.7 million for low-level radioactive waste disposal costs. The portion of this total that is not NRC-defined decommissioning activities (e.g., non-radiological dismantlement, spent fuel storage, etc.)

is $132.5 million, most of which is related to dry fuel storage at our Independent Spent Fuel Storage Installation (ISFSI).

'Initial contribution

-p J. Hickman DPG-10-074 Table 2 shows the history of estimated decommissioning costs for license termination.

The estimated costs do not include site restoration costs.

TABLE 2 YEAR OF COST STUDY ESTIMATED DECOMMISSIONING COST 1991 $281 Million 1993 $365 Million 1995 $441 Million 1997 $452 Million 1998 $459 Million 1999 $458 Million 2000 $495 Million 2001 $504 Million 2002 $519 Million 2003 $524.3 Million 2004 $529.7 Million 2005 $534.1 -Million 2006 $538.1 Million 2007 $522.9 Million 2008 $498.2 Million 2009 $503.9 Million Accumulation of Funds SMUD has accumulated funds in the external trust fund as shown in Table 1. Based on the current decommissioning cost estimate, there are sufficient funds to complete decommissioning Rancho Seco and terminate the 10 CFR Part 50 license.

As stated above, SMUD expects to store some Class B and C radioactive waste in our IOSB until a suitable disposal facility becomes available. Long term storage and disposal costs of the Class B and C radioactive waste are included in the decommissioning costs.

Funding for storage of the spent nuclear fuel at the ISFSI after 2008 is not currently included in the decommissioning fund. SMUD will fund site restoration separately.

Certification of Financial Assurance Certification is hereby made that financial assurance is being provided through an external sinking fund for $25.5 million to complete decommissioning at Rancho Seco and terminate the 10 CFR Part 50 license.

Adjustments to Cost Estimate and Trust Fund Phase I of the decommissioning project is complete. The remaining projected costs include the cost for disposal of the waste stored in the IOSB and the funds necessary to

J. Hickman _4-¸ DPG-10-074 Ji Hickman DPG-1O-074 demonstrate compliance with NRC license termination criteria in Subpart E for the facility that remains under license. Contingency funds are included along with a conservative cost model for the waste disposal due to final costs being unknown at this time.

Administration of the Decommissioning Fund' The trust fund holdings were reviewed at the end of 2009, and the trust fund contained

$38.9 million. The annual contribution amount is reviewed and adjusted as appropriate, to meet the needs of the total estimated decommissioning cost as indicated in Table 1.

SMUD will continue to monitor the adequacy trust fund balance to assure that adequate funds will be available to complete decommissioning and terminate the 10 CFR Part 50 license.

Assumptions Regarding Rates of Trust Fund Escalation and Earnings SMUD has made the following assumptions regarding trust fund escalation and earnings.

Based on historical portfolio performance, SMUD has estimated the rate of return at 4.5%. The decommissioning cost escalation rate is currently estimated at 2.5%. This rate is within an established range and congruent with rates used for other business plans at SMUD. Therefore, SMUD's estimated real rate of return is 2.0%.

Contractual Obligations There are no contractual obligations associated with SMUD's financial assurance plan or the operation of the decommissioning trust fund.

Modifications to Financial Assurance Method In 1991, SMUD submitted its Financial Assurance Plan to the NRC describing the use of an external sinking fund. There have been no significant modifications to SMUD's external sinking fund since our initial submittal. As of 2008, the Trust is fully funded and there are no plans to make additional contributions.

Material Changes tothe Trust Fund Agreement In July 2003,;the trust fund moved from Bankers Trust, N.Y. to Wells Fargo Bank, N.A.

If you or members of your staff have questions requiring additional information or clarification, please contact Leslie England at (916) 732-4860.

Sincerely, Einar T. Ronningen Superintendent, Rancho Seco Assets Cc: NRC, Region IV