CP-201100646, Response to Request for Additional Information Regarding Biennial Decommissioning Report

Response to Request for Additional Information Regarding Biennial Decommissioning Report

ML11161A153
Person / Time
Site:	Comanche Peak
Issue date:	06/06/2011
From:	Lucas M Luminant Power, Luminant Generation Co
To:	Office of Nuclear Reactor Regulation, Document Control Desk
References
TXX-11056, CP-201100646
Download: ML11161A153 (9)

Text

Rafael Flores Luminant Power Senior Vice President P 0 Box 1002

& Chief Nuclear Officer 6322 North FM 56 Luminant rafael.flores@Luminant.com Glen Rose, TX 76043 T 254 897 5550 C 817 559 0403 F 254 897 6652 CP- 201100646 Ref: #10CFR50.75(f)

Log # TXX-11056 June 6, 2011 U. S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, DC 20555

SUBJECT:

COMANCHE PEAK NUCLEAR POWER PLANT DOCKET NOS. 50-445 AND 50-446 RESPONSE TO REQUEST FOR ADDITIONAL INFORMATION REGARDING THE CPNPP BIENNIAL DECOMMISSIONING REPORT REF: Letter logged TXX-11033, Dated March 24, 2011 from Rafael Flores of Luminant Power to the Nuclear Regulatory Commission

Dear Sir or Madam:

Per Reference letter, Luminant Generation Company LLC (Luminant Power) submitted the biennial decommissioning report for Comanche Peak Units 1 and 2. In an email from Mr. Balwant Singal of the NRC, Luminant Power received a request for additional information regarding the subject referenced submittal. The additional information requested is provided in the attachment and enclosures to this letter.

This communication contains no new license basis commitments for Comanche Peak Units 1 and 2.

Should you have any questions, please contact Mr. J. D. Seawright at (254) 897-0140.

A member of the STARS (Strategic Teaming and Resource Sharing) Alliance AO00 1 Callaway - Comanche Peak - Diablo Canyon

• Palo Verde

• San Onofre

• South Texas Project

• Wolf Creek

U. S. Nuclear Regulatory Commission TXX-11056 Page 2 June 6, 2011 Sincerely, Luminant Generation Company LLC Rafael Flores,,/,*

By:

Mitch L. Lucas Site Vice President Attachment

Enclosures:

1. Luminant Filing with the Public Utility Commission of Texas Dated June 17, 2010

2. Public Utility Commission of Texas Final Order for Docket Number 22350 dated October 3, 2001

3. Application of TXU Electric Company for approval of unbundled cost of service rate pursuant to PURA §39.201 and Public Utility Commission Substantive Rule §25.344

4. JP Morgan's Long-term Capital MarketReturns c- E. E. Collins, Region IV B. K. Singal, NRR Resident Inspectors, Comanche Peak

Attachment to TXX- 11056 Page 1 of 4 CPNPP Response to Request for Additional Information RAI #1: Citation for real rate of returns:

Please provide the basis for the assumptions used regarding rates of escalation in decommissioning costs, rate of earnings on decommissioning funds and rates of other factors assumed in your Decommissioning Funding Status (DFS) report.

By letter dated March 28, 2011, Luminant Generation Company, LLC (Luminant) reported the following:

2.5248% rate of escalation in decommissioning costs for Unit 1, 2.5043% rate of escalation in decommissioning costs for Unit 2, 4.83% rate of earnings on decommissioning funds for years 2011 through 2028, 3.99% rate of earnings on decommissioning funds for years 2029 through 2059, and 3.07% rate of earnings on decommissioning funds for years 2060 and thereafter.

As stated in Title 10 of the Code of FederalRegulations (10CFR) Paragraph 50.75(f)(1),

the information in [the DFS] report must include [... ] the assumptions used regarding rates of escalation in decommissioning costs, rates of earnings on decommissioning funds, and rates of other factors used in funding projections...

Response to RAI #1:

The rate of escalation in decommissioning costs for Unit 1 and 2 are provided in Enclosure 1, page 198. See the Financial Escalation Analysis Document Ll 1-1162-002, Rev 0 Page 17 of 33.

The rate of earnings on decommissioning funds are provided in Enclosure 1, page 226. See the Funding Analysis for Comanche Peak Nuclear Power Plant, page 9 of 18, Exhibit 2.

RAI #2: Citation for Site-Specific Study:

Please provide the site specific cost estimate for Comanche Peak Nuclear Power Plant (CPNPP),

unless it was previously submitted to U.S. Nuclear Regulatory Commission (NRC). If the cost estimate was previously submitted to NRC, then provide a reference to its submittal. The site specific cost estimate should include a summary schedule of annual expenses, projected earnings, and end-of-year fund balances, expressed in 2010 dollars.

By letter dated March 28, 2011, Luminant provided a site-specific cost estimate for the minimum amount of decommissioning funds estimated to be required.

Attachment to TXX-11056 Page 2 of 4 CPNPP Response to Request for Additional Information Per 10 CFR 50.75(e)(1)(i) and (ii), the licensee must specifically describe the safe storage period in order to take credit for projected future earnings when it uses a site-specific estimate as the basis for using the prepayment or external sinking fund methods of financial assurance.

Response to RAI #2:

The site specific cost estimate for Comanche Peak Nuclear Power Plant (CPNPP) is provided below. The Projected future earnings during a safe storage period were not used to meet the NRC financial assurance requirements. The summary schedules of annual expenses expressed in 2009 dollars are provided in Enclosure 1, pages 189-192. The calculation to inflate to 2010 dollars is shown in the table below. (see referenced notes for the Table below)

Site-Specific Cost Unit # 1 ,Unit # 2

1. Decommissioning Cost (2009 $'s) $ 564,159,000 $ 660,283,000

2. Inflation assumption 102.5248% 102.5043%

3. 2010 Decommissioning Cost $ 578,402,886 $ 676,818,467 Based on the 2009 Site-specific study.

Line 1: Enclosure 1, page 189-192 - Financial Escalation Analysis Document L11-1162-002, Rev. 0 Pages 8-11 of 33 Line 2: Enclosure 1, page 198 - Financial Escalation Analysis Document L11-1162-002, Rev. 0 Page 17 of 33 Line 3: The calculation of the 2010 dollar cost is equal to the 2009 dollar cost times (1 + inflation)

RAI#3: Citation for collection of non-bypassable charges:

Please provide the citation (e.g., an Order by the rate-regulatory authority) by the regulatory authority that allows for the collection of non-bypassable charges that are to be credited to, among other things, a trust fund established for the collection of decommissioning funds estimated to be required under 10 CFR 50.75(b) and (c).

By letter dated March 28, 2011, Luminant included a schedule of annual amounts remaining to be collected for items in 10 CFR 50.75 (b) and (c); however, Luminant Power did not provide citation of non-bypassable charge collection authorization by the appropriate regulatory authority.

As stated in 10 CFR 50.75(f)(1),

the information in [the DFS] report must include [...] a schedule of the annual amounts remaining to be collected...

Attachment to TXX-11056 Page 3 of 4 CPNPP Response to Request for Additional Information Response to RAI #3:

The citation (e.g., an Order by the rate-regulatory authority) by the regulatory authority that allows for the collection of non-bypassable charges established for the collection of decommissioning funds estimated to be required under 10 CFR 50.75(b) and (c) is provided below.

The distribution utility will collect from customers and the generation company will contribute all funds collected to the decommissioning trust fund.

Enclosure 2, Page 160 paragraph #138 The annual collection rate for each unit Enclosure 3, page 2707 - Oliver Exhibits - Schedule II-H-2, Attachment (g), Page 1 of 1 Establish a Rider NDF for billing the nuclear decommissioning fee charge factor.

Enclosure 2, Page 170 paragraph #189 The non-bypassable charge is reasonable Enclosure 2, Page 190 paragraph #24 Filings with the Public Utility Commission of Texas in 2005 and 2010 requested no change in the non-bypassable charge established in the 2001, and none was ordered. The 2010 filing established the required contributions, but requested no change in the non-bypassable charge because it was very close to the current collection rate. See Enclosure 1, page 235 - Funding Analysis for Comanche Peak Nuclear Power Plant, page 18 of 18, Exhibit 4 Line 6.

RAI #4: Amounts accumulated:

Please provide the after-tax amount of funds accumulated through December 31, 2010.

By letter dated March 28, Luminant did not state if the amount of decommissioning funds accumulated was an after-tax amount.

The provisions of 10 CFR 50.75(f)(1) and (2) require the licensee to report the amount of funds accumulated to the end of the calendar year preceding the report.

Attachment to TXX-1 1056 Page 4 of 4 CPNPP Response to Request for Additional Information Response to RAI #4:

The after-tax amount of funds accumulated through December 31, 2010 is provided below.

December 31, 2010 Tax Basis Market Value After Tax-I Unit#1 $ 195,326,033 $ 249,902,009w 238,986,814 Unit #2 239,018,871 286,027,579 276,625,837 Total Trust at 12/31/10 $ 434,344,904 $ 535,929,587, $ 515,612,651 Note: The calculation of the after-tax balance below uses the 20% tax rate Additional Information Provided:

The source of the forecast returns are the JP Morgan's Long-term Capital Market Returns .

The Radiological cost component breakdown of the 2009 Site Specific cost is included in the 2010 Financial Assurance filing in Enclosure 1, page 021.

Enclosure 1 to TXX-11056 Luminant Filing with the Public Utility Commission of Texas Dated June 17, 2010 (Nuclear Decommissioning Cost Study and Funding Analysis)

Thomas E. Oney Luminant VP - Regulatory Law 500 N. Akard St.

Thomas.oney@luminant.com 10" Floor Dallas, Texas 75201 T 214-875-9086 C 972-365-8505 F 214-875-9042 June 17, 2010 Filing Clerk Public Utility Commission of Texas 1701 Congress Ave.

P.O. Box 13326 Austin, TX 78711-3326 RE: Nuclear Decommissioning Cost Study and Funding Analysis Filing Made Pursuant to Commission Substantive Rule 25.303(f)(2)

In compliance with Substantive Rule 25.303(f)(2) of the Public Utility Commission of Texas

("PUCT"), Luminant Generation Company LLC ("Luminant") hereby files:

(1) a study of the decommissioning costs of Comanche Peak Nuclear Power Plant

("CPNPP"), the Decommissioning Cost Study for the Comanche Peak Nuclear Power Plant, prepared by TLG Services, Inc. dated June 2010

("Decommissioning Study") (Attachment A); and (2) a financial escalation analysis of the decommissioning costs of CPNPP, the Financial Escalation Analysis for the Comanche Peak Nuclear Power Plant, prepared by TLG Services, Inc. dated June 2010 ("Financial Escalation Analysis") (Attachment B); and (3) an updated funding analysis, the Funding Analysis for Comanche Peak Nuclear Power Plant, prepared by Lunminant dated June 2010 ("Funding Analysis") (Attachment C).

The Funding Analysis calculates the required annual funding amount necessary to ensure sufficient funds to decommission both units of CPNPP, which, according to the Decommissioning Study, is $1,224,442,000 in 2009 dollars. As shown on page 18 of Exhibit 4 of the Funding Analysis, an annual amount of $14,720,918 throughout the operating life of CPNPP is necessary to fully fund the anticipated decommissioning costs for CPNPP Units 1 and 2.

The Funding Analysis additionally contains within the study a description of the assumptions used in the analysis. Although the Decommissioning Study recommended an appropriate contingency of approximately 18.4 percent for the DECON alternative, in compliance with PUCT Substantive Rule 25.303(f)(2), an allowance for contingency of 10 percent was used in the 001

Thomas E. Oney Page 2 June 17, 2010 Financial Escalation Analysis and Funding Analysis. In addition, because there is only a 2.9%

difference between the level of CPNPP decommissioning fund collection approved by the Commission in 2005 and the required funding levels resulting from the 2010 Funding Analysis and because of the assumptions in the Decommissioning Study, Financial Escalation Analysis, and Funding Analysis likely have inherent and considerable uncertainty based on the predictability of long-term costs and market conditions, Luminant proposes no change in the current collection rate, although Luminant does propose a slight change in the allocation between the Unit 1 and Unit 2 decommissioning funds.

If you have any questions or require additional information concerning this filing, please contact me at 214.875.9086.

Respectfully submitted, Thomas E. Oney Vice President - Regulatory Law Luminant Generation Company LLC 500 N. Akard St., 1Oth Floor Dallas, Texas 75201 Tel. 214.875.9086 Fax 214.812.6032 Enc.

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