ML12171A381

Status of Decommissioning Funding Assurance

ML12171A381
Person / Time
Site:	Limerick
Issue date:	06/28/2012
From:	Richard Ennis Plant Licensing Branch 1
To:	Pacilio M Exelon Generation Co
Ennis R
References
TAC ME8248
Download: ML12171A381 (8)

Text

UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555-0001 June 28, 2012 Mr. Michael J. Pacilio President and Chief Nuclear Officer Exelon Generation Company, LLC 4300 Winfield Road Warrenville, IL 60555

SUBJECT:

LIMERICK GENERATING STATION, UNIT NO.1 - STATUS OF DECOMMISSIONING FUNDING ASSURANCE (TAC NO. ME8248)

Dear Mr. Pacilio:

By letter dated March 31,2011 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML110980080), Exelon Generation Company, LLC (Exelon, the licensee) submitted to the U.S. Nuclear Regulatory Commission (NRC) the 2011 Decommissioning Funding Status (DFS) 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." This letter reflected funding considerations as of December 31, 2010. On July 27, 2011 (ADAMS Accession No. ML112092312), Exelon submitted supplemental information in response to a request for additional information (RAI) from the NRC staff regarding the status of the decommissioning funds. Subsequently, by letter dated January 11,2012 (ADAMS Accession No. ML113540721), based on an NRC-calculated shortfall as of December 31, 2010, the NRC requested further information from Exelon.

Specifically, the NRC requested that Exelon provide its most current plan to meet the NRC's financial assurance requirements for LGS, Unit 1. On February 23, 2012 (ADAMS Accession No. ML12054A256), Exelon provided a response to this second RAt. In that letter, Exelon provided its plan, the current decommissioning trust fund amount, and the minimum funding according to the calculation in 10 CFR 50.75(c), as of December 31,2011.

In a letter dated March 27, 2012 (ADAMS Accession No. ML120720382), the NRC staff informed Exelon it had closed out its review of the 2011 DFS report for LGS, Unit 1 (Le., decommissioning information as of December 31,2010). The letter also stated that the NRC staff would continue its review of the decommissioning information provided as of December 31, 2011, for LGS, Unit 1, in order to determine there was reasonable assurance that funds will be available for the decommissioning process.

On April 20, 2012 (ADAMS Accession No. ML121080344), the NRC staff requested additional information from Exelon regarding its submittal dated February 23, 2012. Exelon provided its response to this RAI in a letter dated May 21, 2012 (ADAMS Accession No. ML121420477).

Using the information provided in Exelon's letters dated February 23, and May 21,2012, the NRC staff performed an analysis, equivalent to a DFS report analysis, to determine if the plan of action provided decommissioning funding assurance. The reported amount of decommissioning funds estimated to be required by the formula in 10 CFR 50.75(c) by Exelon was $660.4 million and independently determined by the NRC staff to be $639.1 million. In the May 21, 2012, letter, you stated that the certification amount that must be covered by your financial assurance method is $639.1 million.

M. Pacilio -2 Based on the reported decommissioning trust balance as of December 31,2011, the earnings credit specified under NRC regulations, the parent company guarantee and your filing with the Pennsylvania Public Utilities Commission for a proposed cost adjustment to the collection of annual payments from ratepayers, the NRC determined that the amount of decommissioning financial assurance you provided based on your plan of action was equal to or greater than the minimum required amount based on 10 CFR 50.75(c). As such, the NRC staff concludes that there is reasonable assurance that funds will be available for the decommissioning process for LGS, Unit 1. The NRC staffs DFS report analysis is enclosed.

If you have any questions, please contact me at (301) 415-1420.

Sincerely,

-tJS~

Richard B. Ennis, Senior Project Manager Plant Licensing Branch 1-2 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket No. 50-352

Enclosure:

As stated cc w/encl: Distribution via Listserv

Oatasheet 1 Plant name: Limerick Generating Station, Unit 1 Docket Number: 50-352 The minimum financial assurance (MFA) estimate pursuant to 10 CFR 50 75(b) & (C):l $660.4 million Did the licensee identify the amount ofestimated radiological funds? (Y/N) y 2 The lOtal amount of dollars accumulated at the end of the appropnate year: (see below)

Licensee: Amount in Trust Fund:

ExeJon Generation

$256,541,000 Company, LLC Tatal Trust Fund Balance $2$6,541,000 3 Schedule of the annual amounts remaining to be collected: (provided/none) erov1ded 4 Assumptions used in determining rates of escalation in decommissioning costs. rates of earnings on decommissioning fundS, and rates of other factors used in funding projections. (see below)

Post*RAl Rate of Rate(s} of PUC RAl PUC Allowed Rates Escalation Real Rate Allowed through Oecom Return on Other Verified Needed Verified through Detennined Rate of Return (YiN)

Earnings Factors (YiN) (YiN) (YiN) Decom (YiN) (YiN) 3,00% 3.00% Y Y N 5 Any contracts upon which the licensee is relying? (Y /r--;) N 6 Any modifications to a licensee!s method of providing decommissioning funding assurance? (YIN) y' Any matedal changes to trust agreements? (YIN) N If a change has occurred, the reviewer will document on this sheet that a cbange has occurred and identify the reviev.'er

",no will evaluate the chwlge: (see below)

I Licensee calculated MFA higber than NRC calculations. Justification, including facton used, were provided to NRC (or review. No further review required. Licensee is certifying to NRC calculated minimum 0(S639.lm.

2 Financial Assurance is provided by the external sinking fund method coupled with a parent company guarantee and predicted rate relief Signature: Aaron L Szabo Dete: 5/25/2012 Signature. Jo Ann Simpson Spreadsheet created by: Aaron Szabo, Shawn Harwell Date: 6/1/2012 Fonnulas verified by: Clayton Pittiglio

Datashect2 Plant name: Limerick Generating Station, Unit 1 Docket Number: 50-352 Month: Day Year:

Date of Operation: 12 31 2011 Termination of Operations: 10 26 2024 NRC Minimum: $639,100,000 Site Specific:

Amount of NRC MinimumlSite Licensee! Cal""o SDecific: Amount in Trust Fund:

Exc10n Generation

$639,100,000 $256,541,000 Company, LLC Total Fund Balance: $256,541,000 Step I:

Earnings Credit:

Trust Fund Balance: Does Licensee Pass:

$256,541,000 NO Slep2:

Accumulation:

Number of Annual PaYments:

Years remaining after annUl Total Sleo 2 NIA $110,684,362 Docs Licensee Pass:

NO Step 3:

Decom Period:

Total Eamin~s:

$441,364,297 Total ofStcps 1 thru3: Does Licensee Pass:

5589,176,569 NO SIgnature: Aaron L Szabo Dale: 512512012 Signature: 10 Ann Simpson Spreadsheet created by Aaron Szaho, Shawn Harwell Date: 61112012 Formulas venfied by ClaYlon Pittiglio

Datasheet 2 Plant name: Limerick Generating Station, Unit 1 Docket Number: 50-352 Month: Day Year:

Date of Operation: 12 31 2011 Termination of Operations: 10 26 2024 If licensee is granted greater than 2% RRR Step 4:

EarningJ! Credit:

Trust Fund Balance* Docs Licensee Pas~r

$256,541,000 NO Step 5:

Accumulation:

Value of Annuity per year see annuity sheet Total Annuity See Total Step 4 Does Licensee Pass:

NO Step 6:

Decom Period:

Total Eammgs:

$493,893,410 Parent Company Guarantee Total ofSteos 4 thru 6* Does Licensee Pass SlIS,OOO,OOO $665,660,004 YES Signature: Aaron L Szabo Date: S12Sf20 12 Signature: Jo Ann Simpson Spreadsheet created by: Aaron Szabo, Sbawn Harwell Date: 61112012 Formulas verified by: Clayton Pittiglio

Datasheet 2 ANNUITY Termination of Operations: 10 26 2024 Real Rate Total Year Annuity: of Return: Accumulation 2012 $7,170,000 2% $9,242,383 2013 $8,041,000 2% $10,161,895 2014 $8,041,000 2% $9,962,642 2015 $8,041,000 2% $9,767,296 2016 $8,041,000 2% $9,575,780 2017 $8,041,000 2% $9,388,020 2018 $8,041,000 2% $9,203,941 2019 $8,041,000 2% $9,023,472 2020 $8,041,000 2% $8,846,541 2021 $8,041,000 2% $8,673,079 2022 $8,041,000 2% $8,503,019 2023 $8,041,000 2% $8,336,293 2024 $0 2% $0 Total: $110,684,362 Signature: Aaron L. Szabo Date: 5125/2012 Signature: 10 Ann Simpson Spreadsheet created by: Aaron Szabo, Shawn Harwell Date: 6/112012 Fonnulas verified by: Clayton Pittiglio

Datasheet 2 ANNUITY Termination of Operations: 10 26 2024 Iflicensee is granted greater than 2% RRR Real Rate Total Year Annuity: of Return: Accumulation 2012 $7,170,000 3.00% $10,473,895 2013 $8,041,000 3.00% $1I ,404, 123 2014 $8,041,000 3.00% $11,071,964 2015 $8,041,000 3.00% $10,749,479 2016 $8,041,000 3.00% $10,436,388 2017 $8,041,000 3.00% $10,132,415 2018 $8,041,000 3.00% $9,837,296 2019 $8,041,000 3.00% $9,550,773 2020 $8,041,000 3.00% $9,272,595 2021 $8,041,000 3.00% $9,002,520 2022 $8,041,000 3.00% $8,740,311 2023 $8,041,000 3.00% $8,485,738 2024 $0 3.00% $0 Total: $119,157,498 Signature: Aaron L. Szabo Date: 5125/2012 Signature: Jo Ann Simpson Spreadsheet created by: Aaron Szabo, Shawn Harwell Date: 6/I/2012 Formulas verified by: Clayton Pittiglio

'.. ML12171A381 OFFICE LPL 1-2/PM LPL 1-2/LA IFIB/BC LPL 1-2/BC NAME REnnis ABaxter CRegan MKhanna 6/28/12 06/25/12 6127/12 6/28/12 DATE