ML12097A242

Report on Decommissioning Funding Status

ML12097A242
Person / Time
Site:	Rancho Seco
Issue date:	03/29/2012
From:	Ronningen E Sacramento Municipal Utility District (SMUD)
To:	John Hickman Document Control Desk, NRC/FSME
References
DPG 12-193
Download: ML12097A242 (5)

Text

Powering forward. Together.

OsMuD" DPG 12-193 March 29, 2012 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), this letter provides the information 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.

In April 2006, SMUD submitted the License Termination Plan for Rancho Seco outlining a phased approach to decommissioning. Phase I of the decommissioning was completed in 2009 when the majority of the facility land area, including the major plant systems and structures, was released from the license. The facility remaining under the Part 50 license now consists of a 1-acre land area that contains 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 continue to store some Class B and Class C radioactive waste in the IOSB. When a suitable disposal facility becomes available, the waste will be shipped for disposal and the facility decommissioning will be completed.

Rancho Seco Nuclear Generating Station 114440 Twin Cities Road I Herald, CA 95638-9799 I 1.209.333.2935 I smud.org

DPG 12-193 Page 2 of 5 Decommissioning Financial Assurance Method and Trust Fund Status SMUD had maintained an internal decommissioning fund since the early 1980's. In 1991, SMUD transferred $90 million from the internal fund into an "External Sinking Decommissioning Trust Fund" currently maintained by Wells Fargo Bank. Per the Financial Assurance Plan, SMUD made contributions to the Trust Fund through 2008, at which time it was considered to be fully funded. At this time, no future contributions are planned but SMUD will continue to perform Decommissioning Cost Estimates and compare the results with the available funds in the Decommissioning Trust to ensure reasonable financial assurance.

Administration of the Decommissioning Fund The trust fund holdings were reviewed at the end of 2011, and the trust fund contained

$30.9 million. As discussed below, this exceeds the amount of funding estimated as required to complete decommissioning. If during the annual review the cost to complete decommissioning exceeded the available funds, a single contribution would be made the following calendar year to provide reasonable financial assurance.

Estimating Required Decommissioning Funding 10 CFR 50.75(c) provides the calculation basis for determining minimum amounts of funding required to demonstrate reasonable assurance of funds for decommissioning.

However, the calculation does not take into consideration work that has already been completed. For Rancho Seco, of the total estimated costs to complete decommissioning based on the site-specific Cost Estimate, 99.994% of the total costs have already been expended.

To demonstrate reasonable financial assurance in accordance with the regulation, these comparisons will be made:

" Minimum estimated amount per 50.75(c) vs. total site-specific estimate

" Site-specific estimate for remaining work vs. currently available funds For comparison purposes, this report will determine "total site specific estimate" by addition of previously expended funds with the current estimate for remaining work to complete decommissioning. It should be noted that the "previously expended funds" represent the total of actual expenditures made as a sum of annual expenditures: these annual expenditures represent actual costs incurred in the year they were incurred and no attempt has been made to inflate the expenditures to current-year dollars.

These comparisons will demonstrate that the site-specific estimate is conservative compared to 50.75(c), and that sufficient funding is available to complete remaining

DPG 12-193 Page 3 of 5 estimated decommissioning work, thereby providing better assurance than a simple comparison against the minimum amount required.

Minimum Funding Required per 10 CFR 50.75(c)

Utilizing the guidance of NUREG-1307, Revision 14 the determination of the minimum funding required to demonstrate reasonable assurance of funds for decommissioning was calculated as outlined below and determined to be $455.1 million.

Estimated Cost = [1986 Cost]*(A Lx + B Ex + C Bx)

Per 10 CFR 50.75(c)(2)

A = 0.65 B = 0.13 C = 0.22 Calculation of Lx Base Lx 2.06 For West Region, from Table 3.2 of NUREG-1307, Rev. 14 ECI 115.1 BLS Data for Series ID CIU20100000002401 Latest available data = Q4 2011 Current Lx 2.37 Calculation of Ex Ex = 0.58Px + 0.42 Fx From Section 3.2 of NUREG-1307, Rev. 14 P 1986 114.2 BLS Data for January 1986 from Series ID WPU0543 P 2011 204.0 BLS Data for December 2011 from Series ID WPU0543 Data indicated as "Preliminary" Px I 1.79 F 1986 82 BLS Data for January 1986 from Series ID WPU0573 F 2011 301.5 BLS Data for December 2011 from Series ID WPU0573 Data indicated as "Preliminary" Fx 3.68 Ex 2.58

DPG 12-193 Page 4 of 5 Calculation of Bx 1From Table 2.1 of NUREG-1307, Rev. 14 for Bx 12.28 2010 Direct Disposal with Vendors Option Current 50.75(c) Decommissioning Cost Estimate 2011 Decommissioning Estimate $ 455.087 Million Site-Specific Decommissioning Cost Estimate A copy of the 2011 Decommissioning Cost Estimate for Rancho Seco is included as . The costs are summarized as follows:

Total Acutal Expenditures: $487.2 million Total Remaining Costs: $ 29.9 million Total Site Specific Estimate: $517.1 million Certification of Financial Assurance The Total Site Specific Estimate exceeds the minimum estimated amount as calculated per 10 CFR 50.75(c). Therefore, funding that meets or exceeds the site-specific amount provides reasonable assurance that sufficient funding is available to complete decommissioning.

As of December 31, 2011 the available funds in the Decommissioning Trust Fund were

$30.9 million which exceeds the estimated funding needed to complete decommissioning.

Certification is hereby made that financial assurance is being provided through an external sinking fund for $29.9 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 demonstrate compliance with NRC license termination criteria in Subpart E.

Contingency funds are included along with a conservative cost model for the waste disposal based on currently available information on disposal costs at the recently licensed low-level radioactive waste facility in Andrews, TX and operated by Waste Control Specialists, Inc. The available information indicates disposal costs at this facility

DPG 12-193 Page 5 of 5 to be significantly higher than the costs for disposal at the Barnwell, SC facility, so the Estimate was updated to conservatively include the higher costs.

AssumDtions Reaarding Rates of Trust Fund Escalation and Earnings Since the Trust Fund contains sufficient funding to complete all decommissioning work, no assumptions are necessary concerning the rate of return to demonstrate sufficient funding.

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 No modifications have been made since last year's report. The Trust has been fully funded since 2008 and remains in an external sinking fund as previously described.

Material Changes to the Trust Fund Agreement No material changes to the Trust Fund Agreement have been made since last year's report. The Trust remains with Wells Fargo Bank, N.A.

If you or members of your staff have questions or require additional information, please contact me by email at einar.ronninaena-smud.ora or by phone at (916) 732-4817.

Sincerely, Einar T. Ronningen Superintendent, Rancho Seco Assets

Attachment:

DPG 11-732, 2011 Rancho Seco Decommissioning Cost Estimate CC with

Attachment:

NRC, Region IV