ML121040307
| ML121040307 | |
| Person / Time | |
|---|---|
| Site: | Limerick  |
| Issue date: | 04/12/2012 |
| From: | Richard Ennis Plant Licensing Branch 1 |
| To: | Meena Khanna Plant Licensing Branch 1 |
| Ennis R, NRR/DORL, 415-1420 | |
| References | |
| TAC ME8248 | |
| Download: ML121040307 (6) | |
Text
April 12, 2012 MEMORANDUM TO:
Meena K. Khanna, Chief Plant Licensing Branch I-2 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation FROM:
Richard B. Ennis, Senior Project Manager /ra/
Plant Licensing Branch I-2 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation
SUBJECT:
LIMERICK GENERATING STATION, DRAFT REQUEST FOR ADDITIONAL INFORMATION (TAC NO. ME8248)
The attached draft request for additional information (RAI) was transmitted on April 12, 2012, to Mr. David Helker of Exelon Generation Company, LLC (Exelon, the licensee). This information was transmitted to facilitate an upcoming conference call in order to clarify the licensee=s letter dated February 23, 2012, for Limerick Generating Station (LGS), Unit 1. The licensees letter provided information regarding the decommissioning funding assurance status for LGS, Unit 1.
The RAI was sent to Exelon to ensure that the questions are understandable, the regulatory basis for the questions is clear, and to determine if the information was previously docketed.
This memorandum and the attachment do not convey or represent an NRC staff position regarding the licensees request.
Docket No. 50-352
Attachment:
Draft RAI
ML121040307 OFFICE LPL1-2/PM NAME REnnis DATE 4/12/12
DRAFT REQUEST FOR ADDITIONAL INFORMATION REGARDING 2011 DECOMMISSIONING FUNDING STATUS REPORT LIMERICK GENERATING STATION, UNIT 1 DOCKET NO. 50-352 By letter dated February 23, 2012 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML12054A256), Exelon Generation Company, LLC (Exelon, the licensee) submitted a response to an Nuclear Regulatory Commission (NRC) staff Request for Additional Information (RAI) dated January 11, 2012 (ADAMS Accession No. ML113540721),
regarding the 2011 Decommissioning Funding Status report for Limerick Generating Station (LGS), Unit 1, as required under Title 10 of the Code of Federal Regulations (10 CFR)
Section 50.75, Reporting and recordkeeping for decommissioning planning.
The NRC has reviewed and analyzed the decommissioning cost estimate derived from the regulatory formula contained in 10 CFR 50.75(c), and Exelons plan for continuing to provide decommissioning funding assurance for LGS, Unit 1, provided in the letter dated February 23, 2012, consistent with 10 CFR 50.75(e)(2) that states, in part:
The NRC reserves the right to take the following steps in order to ensure a licensees adequate accumulation of decommissioning funds: review, as needed, the rate of accumulation of funds;...
With respect to the amounts of future collections that may be used to provide financial assurance for decommissioning, 10 CFR 50.75(e)(1) states, in part:
(ii) External sinking fund. This method may be used as the exclusive mechanism relied upon for providing financial assurance for decommissioning in the following circumstances:
(A) By a licensee that recovers, either directly or indirectly, the estimated total cost of decommissioning through rates established by "cost of service" or similar ratemaking regulation. Public utility districts, municipalities, rural electric cooperatives, and State and Federal agencies, including associations of any of the foregoing, that establish their own rates and are able to recover their cost of service allocable to decommissioning, are assumed to meet this condition.
(B) By a licensee whose source of revenues for its external sinking fund is a "non-bypassable charge," the total amount of which will provide funds estimated to be needed for decommissioning pursuant to §§ 50.75(c), 50.75(f), or 50.82 of this part.
With respect to combinations of mechanisms used for financial assurance, 10 CFR 50.75(e)(1)(vi) states:
Any other mechanism, or combination of mechanisms, that provides, as determined by the NRC upon its evaluation of the specific circumstances of each licensee submittal, assurance of decommissioning funding equivalent to that provided by the mechanisms specified in paragraphs (e)(1)(i) through (v) of this Attachment
section. Licensees who do not have sources of funding described in paragraph (e)(1)(ii) of this section may use an external sinking fund in combination with a guarantee mechanism, as specified in paragraph (e)(1)(iii) of this section, provided that the total amount of funds estimated to be necessary for decommissioning is assured.
According to Exelons response, Exelons decommissioning trust fund is $256.5 million, as of December 31, 2011. Also stated in Exelons response, the amount required at the termination of operations to provide the minimum funding according to 10 CFR 50.75(c) is $660.4 million, as of December 31, 2011. Exelon stated that a preliminary adjusted amount to be collected from ratepayers for LGS, Unit 1 has been determined. Based on the preliminary calculation, Exelons plan was to request a parent company guarantee (PCG) of $115 million to meet the NRC minimum funding assurance requirements for LGS, Unit 1.
The NRC staff is reviewing your submittal and has determined that additional information is needed to complete its review. The specific information requested is addressed below.
RAI #1: Minimum DFA calculation Within Exelons response, Exelon reported, as December 31, 2011, an amount of decommissioning funding estimated to be required under 10 CFR 50.75(b) and (c). The amount of decommissioning funds estimated was greater than the amount calculated by the NRC staff for LGS, Unit 1. Provide the labor, energy and burial factors used in Exelons calculation of the minimum requirement for decommissioning financial assurance for LGS, Unit 1; address how the calculation methodology used deviated from that described in NUREG-1307, Report on Waste Burial Charges, Revision 14; and provide a statement certifying to the minimum amount of decommissioning funding assurance provided.
RAI #2: Assumptions Please provide the following:
- a.
Provide the assumptions used regarding the rates of escalation in decommissioning costs, rates of earnings on decommissioning funds, and rates of any other factors used in funding projections.
- b.
Provide an annual schedule of amounts authorized to be collected by the Pennsylvania Public Utilities Commission (PAPUC) as of December 31, 2011.
- c.
Provide the citations for the filing with the PAPUC which contain Exelons request for an increase in the amounts to be collected for decommissioning LGS, Unit 1.
RAI #3: Calculation of Parent Company Guarantee Amount Provide the details of the calculations used to determine the amount of the parent company guarantee (PCG). In addition to hard copy suitable for entry into the docket, provide the calculation spreadsheets in electronic form, including the formulas, in a form suitable for the NRC to analyze and verify the information, and a written description of the calculations performed.
RAI #4: Limitation on Collections for Decommissioning Exelons Form 10-K, filed with the U.S. Securities and Exchange Commission on February 9, 2012, states, on page 291:
Any shortfall of funds necessary for decommissioning, determined for each generating station unit, is ultimately required to be funded by Generation.
Generation has recourse to collect additional amounts from PECO customers related to a shortfall of NDT funds for the former PECO units, subject to certain limitations and thresholds, as prescribed by an order from the PAPUC. Generally, PECO will not be allowed to collect amounts associated with the first $50 million of any shortfall of trust funds, on an aggregate basis for all former PECO units, compared to decommissioning obligations, as well as 5% of any additional shortfalls. This initial $50 million and up to 5% of any additional shortfalls would be borne by Generation.
Provide financial assurance for LGS, Unit 1 to cover the decommissioning costs that PAPUC has excluded from collection from PECOs customers.
RAI #5: Parent Company Guarantee Agreement The PCG agreement and supporting documents deviates from the guidance of Regulatory Guide (RG) 1.159, Revision. 2 (ADAMS Accession No. ML112160012). Provide the following revisions to the PCG and supporting documents:
Option 1:
- a.
How Exelon deviated from RG 1.159 in relation to the information provided; and
- b.
How the information provided by Exelon is at least equivalent to the guidance in RG 1.159.
Or Option 2:
- a.
Letter from the chief financial officer of corporate parent, including cost estimates and data from audited financial statements (see Appendix A-6.1 to RG 1.159); and
- b.
The date of issuance and date of maturity of the most recent bond issuance used to establish the bond ratings reported in the financial test (see Appendix A-6-3 to RG 1.159); and
- c.
Exelon Corporation is not a licensee and does not have authority to carry out decommissioning activities. Remove PCG Paragraph 7.a from the PCG, (see Appendix A-6.5 to RG 1.159); and
- d.
Add a provision to the PCG to state, The Guarantor agrees to submit revised financial statements, financial test data, and a special auditors report and reconciling schedule to the NRC annually within 90 days of the close of the parent Guarantors fiscal year, (see Appendix A-6.5, paragraph (8) to RG 1.159).
RAI #6: Attachment 3, 10 CFR Appendix A Financial Tests for Parent Company Guarantee The amounts shown in the tables of tangible net worth and assets do not state whether they are actual amounts or abbreviated amounts in thousands or millions. Provide clarification of the amounts.