ML12356A039

Decommissioning Funding Plans for Independent Spent Fuel Storage Installations

ML12356A039
Person / Time
Site:	Browns Ferry, Sequoyah
Issue date:	12/17/2012
From:	James Shea Tennessee Valley Authority
To:	Document Control Desk, NRC/NMSS/SFST
References
Download: ML12356A039 (33)

Text

Tennessee Valley Authority, 1101 Market Street, Chattanooga, Tennessee 37402 December 17, 2012 10 CFR 72.30(b)

ATTN: Document Control Desk Director, Division of Spent Fuel Storage and Transportation Office of Nuclear Material Safety and Safeguards U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Browns Ferry Nuclear Plant, Units 1, 2, and 3 Facility Operating License Nos. DPR-33, DPR-52, and DPR-68 NRC Docket Nos. 50-259, 50-260, and 50-296 Sequoyah Nuclear Plant, Units 1 and 2 Facility Operating License Nos. DPR-77 and DPR-79 NRC Docket Nos. 50-327 and 50-328

Subject:

Decommissioning Funding Plans for Independent Spent Fuel Storage Installations

Reference:

Nuclear Regulatory Commission Final Rule, "Decommissioning Planning,"

published on June 17, 2011 (76 FR 35512)

In accordance with provisions of 10 CFR 72.30(b) which become effective on December 17, 2012, the Tennessee Valley Authority (TVA) is submitting for Nuclear Regulatory Commission (NRC) review and approval decommissioning funding plans for the Independent Spent Fuel Storage Installations (ISFSls) at Browns Ferry Nuclear Plant (BFN) and Sequoyah Nuclear Plant (SQN).

The decommissioning funding plan for the ISFSI at BFN is provided in Enclosure 1. The decommissioning fund plan for the ISFSI at SQN is provided in Enclosure 2.

Printed on recycled paper

U.S. Nuclear Regulatory Commission Page 2 December 17, 2012 If you have any questions regarding this matter, please contact Josh Perrel at 423-751-7737.

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1.

Browns Ferry Nuclear Plant Independent Spent Fuel Storage Installation Decommissioning Funding Plan

2.

Sequoyah Nuclear Plant Independent Spent Fuel Storage Installation Decommissioning Funding Plan cc:

NRC NRC NRC NRC Project Manager - Browns Ferry Nuclear Plant Senior Resident Inspector - Browns Ferry Nuclear Plant Project Manager - Sequoyah Nuclear Plant Senior Resident Inspector - Sequoyah Nuclear Plant Browns Ferry Nuclear Plant Independent Spent Fuel Storage Installation Decommissioning Funding Plan

Tennessee Valley Authority Browns Ferry Nuclear Plant ISFSI BROWNS FERRY NUCLEAR PLANT Independent Spent Fuel Storage Installation Decommissioning Funding Plan

1.

Background and Introduction The Nuclear Regulatory Commission (NRC) issued its final rule on Decommissioning Planning on June 17, 2011,[1] with the rule becoming effective on December 17, 2012.

Subpart 72.30, "Financial assurance and recordkeeping for decommissioning," requires that each holder of, or applicant for, a license under this part must submit for NRC review and approval a decommissioning funding plan that contains information on how reasonable assurance will be provided that funds will be available to decommission the Independent Spent Fuel Storage Installation (ISFSI).

In accordance with the rule, this enclosure provides a detailed cost estimate for decommissioning the ISFSI at Browns Ferry Nuclear Plant (Browns Ferry) in an amount reflecting:

1. The work is performed by an independent contractor;

2. An adequate contingency factor; and

3. Release of the facility and dry storage systems for unrestricted use, as specified in 10 CFR Part 20.1402.

This enclosure also provides:

1. Identification of and justification for using the key assumptions contained in the cost estimate;

2. 'A description of the method of assuring funds for decommissioning, including means for adjusting the cost estimate and associated funding levels periodically over the life of the facility; and

3. The volume of onsite subsurface material containing residual radioactivity, if any, that will require remediation to meet the criteria for license termination.

The material in Sections 1 through 6, and Tables 1 and 2, herein, were prepared based on evaluations conducted by TLG Services, Inc. Section 7, containing the financial assurance information, was prepared by the Tennessee Valley Authority (TVA).

2.

Spent Fuel Management Strategy The operating licenses for Browns Ferry Units 1, 2 and 3 are currently set to expire on December 20, 2033, June 28, 2034, and July 2, 2036, respectively. Approximately 21,868 spent fuel assemblies are currently projected to be generated over the life of the U.S. Code of Federal Regulations, Title 10, Parts 20, 30, 40, 50, 70 and 72 "Decommissioning Planning,"

Nuclear Regulatory Commission, Federal Register Volume 76, Number 117 (p 35512 et seq.), June 17, 2011 E1-1

Tennessee Valley Authority Browns Ferry Nuclear Plant ISFSI three units. In the absence of a firm plan by the Department of Energy (DOE) for removing spent fuel from the site, an ISFSI has been constructed to support continued plant operations. Based upon the current projection of the DOE's ability to remove spent fuel from the site, this estimate includes, for financial planning purposes, future expansion of the existing pad and the construction of a second pad to support decommissioning of Browns Ferry Units 1, 2 and 3. The ISFSI is operated under a Part 50 General License (in accordance with 10 CFR 72, Subpart K121).

Because the DOE has not yet begun removing spent fuel from the site, it is envisioned that the spent fuel pools will contain a significant number of spent fuel assemblies at the time of expiration of the current operating licenses in 2033 for Unit 1, 2034 for Unit 2, and 2036 for Unit 3, assuming the units operate to those dates, and including assemblies off-loaded from the reactor vessels. To facilitate immediate dismantling operations or safe-storage operations, the fuel is assumed to be packaged in dry storage casks for interim storage at the ISFSI. Once the spent fuel pools are emptied, the spent fuel pool systems and fuel pool areas can be either decontaminated and dismantled or prepared for long-term storage.

Completion of the ISFSI decommissioning process is dependent upon the DOE's ability to remove spent fuel from the site. DOE's repository program assumes that spent fuel allocations will be accepted for disposal from the nation's commercial nuclear plants, with limited exceptions, in the order (the "queue") in which it was discharged from the reactor.

13 The current TVA spent fuel management plan for Browns Ferry spent fuel assumes that the last of the spent fuel will be removed from the site within approximately fifty years of the shutdown of Unit 1. This ensures that spent fuel is off site prior to commencing decommissioning operations in the SAFSTOR alternative.

TVA's position is that the DOE has a contractual obligation to accept the spent fuel earlier than the projections set out above consistent with its contract commitments. No assumption made in this submittal should be interpreted to be inconsistent with this claim.

3.

ISFSI Decommissioning Strategy At the conclusion of the spent fuel transfer process, the ISFSI pads will be promptly decommissioned (similar to the power reactor DECON alternative).

For purposes of the funding plan, financial assurance is provided on the basis of a prompt ISFSI decommissioning scenario, i.e., independent of other station decommissioning strategies. ISFSI decommissioning is considered an independent 2

U.S. Code of Federal Regulations, Title 10, Part 72, Subpart K, "General License for Storage of Spent Fuel at Power Reactor Sites."

U.S. Code of Federal Regulations, Title 10, Part 961.11, Article IV-Responsibilities of the Parties, B. DOE Responsibilities, 5.(a)... DOE shall issue an annual acceptance priority ranking for receipt of SNF and/or HLW at the DOE repository. This priority ranking shall be based on the age of SNF and/or HLW as calculated from the date of discharge of such materials from the civilian nudear power reactor. The oldest fuel or waste will have the highest priority for acceptance, except as..."

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Tennessee Valley Authority Browns Ferry Nuclear Plant ISFSI project, regardless of the decommissioning alternative identified for the nuclear power plant.

4.

ISFSI Description The ISFSI at Browns Ferry is comprised of numerous contiguous pads that, for the purpose of the ISFSI decommissioning estimate, are considered a single pad. It is assumed that this ISFSI area will be expanded to a larger pad, and an additional pad added to provide sufficient storage capacity. The design and capacity of the dry storage modules on the pads is based upon the Holtec HI-STORM 100S dry cask storage system. The system consists of a multi-purpose canister (MPC), with a nominal capacity of 68 fuel assemblies, and a steel-lined concrete storage overpack.

The MPCs are assumed to be transferred directly to the DOE and not returned to the station. Some of the overpacks are assumed to have residual radioactivity due to some minor level of neutron-induced activation as a result of the long-term storage of the fuel.

The cost to dispose of residual radioactivity, and to verify that the remaining facility and surrounding environs meet the NRC's radiological limits established for unrestricted use, forms the basis of the ISFSI decommissioning estimate.

TVA's current spent fuel management plan for Browns Ferry spent fuel would result in 322 MPCs and overpacks being placed on the storage pads at the site. This represents 100% of the total spent fuel projected to be generated during the currently licensed operating period. This scenario would allow the spent fuel storage pools to be emptied within approximately five and one-half years following the permanent cessation of operations.

The 322 casks projected to be on the ISFSI pads after shutdown excludes any additional casks that may be used for Greater-than-Class-C (GTCC) storage. The storage overpacks used for the GTCC canisters (estimated quantity of 15) are not expected to have any interior contamination or residual activation and can be reused or disposed of by conventional means after a final status survey.

Table 1 provides the significant quantities and physical dimensions used as the basis in developing the ISFSI decommissioning estimate.

5.

Key Assumptions / Estimating Approach The decommissioning estimate is based on the configuration of the ISFSI expected after all spent fuel and GTCC material has been removed from the site. The configuration of the ISFSI is based on Browns Ferry operating until the end of its current licenses (2033, 2034, and 2036) and the DOE's spent fuel acceptance assumptions, as previously described.

The dry storage vendor, Holtec International, does not expect the overpacks to have any interior or exterior radioactive surface contamination. Any neutron activation of the steel E1-3

Tennessee Valley Authority Browns Ferry Nuclear Plant ISFSI and concrete is expected to be extremely small.E41 This assumption is adopted for this analysis.

The decommissioning estimate is based on the premise that some of the inner steel-liners of the concrete overpacks will contain low levels of neutron-induced residual radioactivity that would necessitate remediation at the time of decommissioning. As an allowance, 36 of the 322 overpack liners are assumed to be affected, i.e., contain residual radioactivity. The allowance quantity is based upon the number of casks required for the final core off-load (i.e., 764 offloaded assemblies per reactor, 68 assemblies per cask, 3 reactors) which results in 36 overpacks. It is assumed that these are the final casks offloaded; consequently they have the least time for radioactive decay of the neutron activation products.

Holtec does not expect any residual contamination to be left on the concrete ISFSI pads.I]5 It would be expected that this assumption would be confirmed as a result of good radiological practice of surveying potentially impacted areas after each spent fuel transfer campaign. It is assumed for this analysis that the ISFSI pads will not be contaminated. As such, only verification surveys are included for the pads in the decommissioning estimate. An allowance is also included for surveying any transfer equipment.

The estimate is limited to costs necessary to terminate the ISFSI's NRC license and meet the §20.1402 criteria for unrestricted use. Disposition of released material and structures is outside the scope of the estimate.

Based on TVA's review of the records maintained in accordance with §50.75(g)(1), there is no known subsurface material containing residual radioactivity in the proximity of the ISFSI that would require remediation. As such, there is no allowance for soil remediation in the estimate to decommission the ISFSI.

Low-level radioactive waste disposal costs are based on TVA's negotiated rates with EnergySolutions.

Decommissioning is assumed to be performed by an independent contractor. As such, labor, equipment, and material costs are based on national averages, i.e., costs from national publications such as R.S. Means' Building Construction Cost Data (adjusted for regional variations), and laboratory service costs are based on vendor price lists. TVA, as licensee, will oversee the site activities.

HI-STORM FSAR, Holtec International, Report HI-2002444, Rev. 7, at page 2.4-1 (Accession Number ML082401629)

HI-STORM FSAR, Holtec International, Report HI-2002444, Rev. 7, at page 2.4-2 (Accession Number ML082401629)

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Tennessee Valley Authority Browns Ferry Nuclear Plant ISFSI Contingency has been added at an overall rate of 25%. This is consistent with the contingency evaluation criteria referenced by the NRC in NUREG-1757.16,

Costs are reported in 2012 dollars and based upon an ongoing decommissioning analysis being prepared for Browns Ferry. Activity costs originally reported in 2011 dollars have been escalated to 2012 dollars using the Consumer Price Index, Services.[71

6.

Cost Considerations The estimated cost to decommission the ISFSI pads and release the facility for unrestricted use is provided in Table 2. The cost includes an initial planning phase.

During this phase the empty overpacks, ISFSI pads, and surrounding environs are characterized, and the activity specifications and work procedures for the decontamination (liner removal) are developed.

The next phase includes the cost for craft labor to remove the activated liners, package in certified waste containers, transportation to the Clive, Utah site, disposal, as well as the costs for the supporting equipment, materials and supplies.

The final phase includes the cost for the license termination survey, verification survey, and the associated equipment and laboratory support.

The estimate also contains costs for the NRC (and NRC contractor), TVA's oversight staff, site security (industrial), and other site operating costs.

For estimating purposes it is conservatively assumed that all expenditures will be incurred in the year 2083 (following removal of all spent fuel).

7.

Financial Assurance The construction and operation of the ISFSI at Browns Ferry were the result of the DOE's failure to remove spent nuclear fuel from the site in a timely manner under the terms of the Standard Contract. TVA filed suit for DOE's failure to begin accepting and disposing of spent nuclear fuel from Browns Ferry and Sequoyah Nuclear Plants in the Court of Federal Claims in April 2001. In January 2006, the Court determined that TVA would not have built ISFSIs at Browns Ferry or Sequoyah but for DOE's delay and held that most costs associated with the ISFSIs were recoverable. The Court awarded TVA approximately $35 million for costs incurred through FY2004 with the understanding that additional costs in future years could be claimed as they were incurred. As a result of submitting subsequent claims, TVA has.received payments totaling an additional

$72 million to date as a result of DOE's delay. TVA continues to submit claims for operating costs of the ISFSIs and once they are no longer needed and decommissioning-related costs are incurred, TVA anticipates filing claims for such costs 6

"Consolidated Decommissioning Guidance, Financial Assurance, Recordkeeping, and Timeliness," U.S. Nuclear Regulatory Commission's Office of Federal and State Materials and Environmental Management Programs, NUREG-1757, Volume 3, Revision 1, February 2012 Bureau of Labor Statistics, Consumer Price Index - All Urban Consumers, Services, Series ID: CUUROOOOSAS E1-5

Tennessee Valley Authority Browns Ferry Nuclear Plant ISFSI because they, too, are directly related to DOE's delay in accepting and disposing of the plants' spent nuclear fuel.

Independent of TVA's anticipated claims to recover costs associated with decommissioning the Browns Ferry ISFSI, and in accordance with §72.30(b)(4), TVA has provided a statement of intent indicating that funds for decommissioning will be obtained when necessary. This method for assuring ISFSI decommissioning funding is provided for in §72.30(e)(4) in the case of Federal, State, or local government licensees.

Under the provisions of the Tennessee Valley Authority Act of 1933, as amended, 16 U.S.C. §§ 831-831ee (2006 & Supp. V 2011), TVA is a corporate agency and instrumentality of the United States Government.

As shown in Table 2, the cost to decommission the ISFSI at Browns Ferry Nuclear Plant is estimated to be $7,435,000. A statement of intent for this amount is provided in Attachment A. Additionally, as required by §72.30(b)(6), a certification of financial assurance is provided in Attachment B.

TVA plans to adjust the cost estimate every three years to account for changes in the costs and the extent of contamination. Following changes to the cost estimate, funding levels will be evaluated to determine if additional funding or use of a different funding mechanism is warranted.

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Tennessee Valley Authority Browns Ferry Nuclear Plant ISFSI Table 1 Significant Quantities and Physical Dimensions ISFSI Pad Residual Item Length (ft)

Width (ft)

Radioactivity ISFSI Pad (assumed size at shutdown, existing pad expanded) 708 166 No ISFSI Storage Overpack (Holtec HI-STORM 1OOS)

Item Value Notes Overall Height (inches) 218.5 Dimensions are nominal Outside Diameter (inches) 132.5 Dimensions are nominal Inside Diameter (inches) 73.5 Dimensions are nominal Inner Liner Thickness (inches) 1.0 Dimensions are nominal Quantity (total) 337 322 spent fuel + 15 GTCC Equivalent to the number of overpacks used Quantity (with residual radioactivity) 36 to store last complete core offload Total Surface Area of Overpack Liner with Residual Radioactivity (square feet) 11,830 Low-Level Radioactive Waste (cubic feet) 6,244 Low-Level Radioactive Waste (packaged density) 84 Average weight density Other Potentially Impacted Items Item Value Notes Number of Overpacks used for GTCC storage 15 No residual radioactivity E1-7

Tennessee Valley Authority Browns Ferry Nuclear Plant ISFSI Table 2 ISFSI Decommissioning Costs and Waste Volumes Costs Waste (thousands, 2012 dollars)

Volume Person-Hours NRC / NRC Removal Packaging Transport Disposal Other Total (ft3)

Contractor Licensee Contractor Decommissioning Contractor Planning (characterization, specs and procedures) 707 707 1,720 Decontamination/Demolition (activated liner removal) 290 17 131 972 53 1,463 6,244 1,902 License Termination (radiological surveys) 2,962 2,962.3 28,968 Subtotal 290 17 131 972 3,722 5,131 6,244 32,590 Supporting Costs NRC and NRC Contractor Fees and Costs 461.3 461.3 776 Insurance 63.2 63.2 Security (industrial) 77.6 77.6 4,165 TVA Oversight Staff 214.3 214.3 3,159 Subtotal 816.5 816.5 4,165 3,159 776 Total (w/o contingency) 290 17 131 972 4,538 5,948 6,244 36,754 3,159 776 Total (w/25% contingency) 7,435.0 I 1 El1-8

Tennessee Valley Authority Browns Ferry Nuclear Plant ISFSI Attachment A ATTACHMENT A Tennessee Valley Authority 400 West Summit Hill Drive Knoxville, TN 37902 (865) 632-2101 Browns Ferry Nuclear Plant, Units 1, 2, and 3 Facility Operating License Nos. DPR-33, DPR-52, and DPR-68 NRC Docket Nos. 50-259, 50-260, and 50-296 STATEMENT OF INTENT The Tennessee Valley Authority (TVA) is a corporate agency and instrumentality of the United States Government created pursuant to the Tennessee Valley Authority Act of 1933, as amended, 16 U.S.C. §§ 831-831ee (2006 & Supp. V 2011). Under the terms of the TVA Act, the TVA Board of Directors is duly empowered to direct the exercise of all of the powers of TVA.

Under the terms of the Government Corporation Control Act, 31 U.S.C. § 9103 (2006), TVA's Board of Directors is also authorized to submit yearly budgets to the President for inclusion in the President's annual budget submission to Congress which could include, among other things, requests for appropriations needed to restore capital impairments. Such appropriations could include funds for decommissioning activities associated with operations authorized by the U.S.

Nuclear Regulatory Commission (NRC) under Facility Operating License Nos. DPR-33, DPR-52, and DPR-68.

Pursuant to its authority, the TVA Board of Directors established a TVA Board Practice system, as amended on November 17, 2011, which provides, among other things, guidance to the TVA Chief Executive Officer (CEO) as to what capital projects the TVA Board considers to be within the CEO's approval authority under Section 3.2(i) of the TVA Bylaws. (Section 3.2(i) of the TVA Bylaws states that the CEO has all authorities and duties "necessary or appropriate to carry out projects and activities approved by the Board of Directors or to maintain continuity and/or reliability of ongoing operations.") Under the TVA Board Practice entitled Capital Projects Approvals, the CEO has the authority to approve any capital project provided the project amount does not exceed $50 million. In addition, the TVA Board Practice on Procurement Contract Approvals authorizes the CEO to approve any procurement contract that does not exceed $100 million if its term does not exceed 5 years, and any contract that does not exceed

$25 million if its term exceeds 5 years.

Based upon the $7,435,000 cost estimate for decommissioning the Browns Ferry Nuclear Plant Independent Spent Fuel Storage Installation (ISFSI), approval of capital project funding and/or the approval of procurement contracts to accomplish such decommissioning falls well within the TVA CEO's authority.

Accordingly, in accordance with the above authorities and the TVA CEO's express delegation of authority to me as Chief Nuclear Officer (CNO), I hereby state TVA's intention to ensure that funds will be obtained and made available when necessary in the amount of $7,435,000 to E1-9

Tennessee Valley Authority Browns Ferry Nuclear Plant ISFSI Attachment A decommission the Browns Ferry Nuclear Plant ISFSI as prescribed by NRC regulations. These funds will be obtained and made available sufficiently in advance of decommissioning to prevent the delay of required activities.

A copy of the Delegation of Authority from the CEO to the CNO is provided in Exhibit A as evidence that I am authorized to represent TVA in this transaction. The TVA Board Practice Amendments referenced above are included as an attachment to Exhibit A.

Preston D. Swafford Chief Nuclear Officer Tennessee Valley Authority December 17, 2012 Exhibit A:

Memo Delegating Authority from the Chief Executive Officer to the Chief Nuclear Officer El-10

Tennessee Valley Authority Browns Ferry Nuclear Plant ISFSI Attachment B ATTACHMENT B Tennessee Valley Authority 400 West Summit Hill Drive Knoxville, TN 37902 (865) 632-2101 Browns Ferry Nuclear Plant, Units 1, 2, and 3 Facility Operating License Nos. DPR-33, DPR-52, and DPR-68 NRC Docket Nos. 50-259, 50-260, and 50-296 CERTIFICATION OF FINANCIAL ASSURANCE I certify that Browns Ferry Nuclear Plant is licensed to receive title to and own spent nuclear fuel, high-level radioactive waste, and reactor-related greater than Class C waste as a 10 CFR Part 50 General Licensee under the provisions of 10 CFR Part 72. I also certify. that financial assurance in the amount of $7,435,000 will be made available when necessary to decommission the Browns Ferry Nuclear Plant Independent Spent Fuel Storage Installation using the financial assurance method set forth in 10 CFR 72.30(e)(4).

Should additional information be needed regarding this certification of financial assurance by the Tennessee Valley Authority, contact Joseph W. Shea, Vice President, Nuclear Licensing, at (423) 751-6887.

Preston D. Swaff d Chief Nuclear Officer Tennessee Valley Authority December 17, 2012 El-11 Sequoyah Nuclear Plant Independent Spent Fuel Storage Installation Decommissioning Funding Plan

Tennessee Valley Authority Sequoyah Nuclear Plant ISFSI SEQUOYAH NUCLEAR PLANT Independent Spent Fuel Storage Installation Decommissioning Funding Plan

1.

Background and Introduction The Nuclear Regulatory Commission (NRC) issued its final rule on Decommissioning Planning on June 17, 2011,[11 with the rule becoming effective on December 17, 2012.

Subpart 72.30, "Financial assurance and recordkeeping for decommissioning," requires that each holder of, or applicant for, a license under this part must submit for NRC review and approval a decommissioning funding plan that contains information on how reasonable assurance will be provided that funds will be available to decommission the Independent Spent Fuel Storage Installation (ISFSI).

In accordance with the rule, this enclosure provides a detailed cost estimate for decommissioning the ISFSI at Sequoyah Nuclear Plant (Sequoyah) in an amount reflecting:

1. The work is performed by an independent contractor;

2. An adequate contingency factor; and

3. Release of the facility and dry storage systems for unrestricted use, as specified in 10 CFR Part 20.1402.

This enclosure also provides:

1. Identification of and justification for using the key assumptions contained in the cost estimate;

2. A description of the method of assuring funds for decommissioning, including means for adjusting the cost estimate and associated funding levels periodically over the life of the facility; and

3. The volume of onsite subsurface material containing residual radioactivity, if any, that will require remediation to meet the criteria for license termination.

The material in Sections 1 through 6, and Tables 1 and 2, herein, were prepared based on evaluations conducted by TLG Services, Inc. Section 7, containing the financial assurance information, was prepared by the Tennessee Valley Authority (TVA).

2.

Spent Fuel Management Strategy The operating licenses for Sequoyah Units 1 and 2 are currently set to expire on September 17, 2020, and September 15, 2021, respectively. Approximately 4,272 spent fuel assemblies are currently projected to be generated over the life of the two units. In U.S. Code of Federal Regulations, Title 10, Parts 20, 30, 40, 50, 70 and 72 "Decommissioning Planning,"

Nuclear Regulatory Commission, Federal Register Volume 76, Number 117 (p 35512 et seq.), June 17, 2011 E2-1

Tennessee Valley Authority Sequoyah Nuclear Plant ISFSI the absence of a firm plan by the Department of Energy (DOE) for removing spent fuel from the site, an ISFSI has been constructed to support continued plant operations. Based upon the current projection of the DOE's ability to remove spent fuel from the site, this estimate includes, for financial planning purposes, future expansion to the existing pad to support decommissioning of Sequoyah Units 1 and 2. The ISFSI is operated under a Part 50 General License (in accordance with 10 CFR 72, Subpart K[21).

Because the DOE has not yet begun removing spent fuel from the site, it is envisioned that the spent fuel pool will contain a significant number of spent fuel assemblies at the time of expiration of the current operating licenses in 2020 for Unit 1 and 2021 for Unit 2, assuming the units operate to those dates, and including assemblies off-loaded from the reactor vessels. To facilitate immediate dismantling operations or safe-storage operations, the fuel is assumed to be packaged in dry storage casks for interim storage at the ISFSI. Once the spent fuel pool is emptied, the spent fuel pool systems and fuel pool areas can be either decontaminated and dismantled or prepared for long-term storage.

Completion of the ISFSI decommissioning process is dependent upon the DOE's ability to remove spent fuel from the site. DOE's repository program assumes that spent fuel allocations will be accepted for disposal from the nation's commercial nuclear plants, with limited exceptions, in the order (the "queue") in which it was discharged from the reactor.?3 ] The current TVA spent fuel management plan for Sequoyah assumes that the last of the spent fuel will be removed from the site within approximately fifty years of the shutdown of Unit 1. This ensures that spent fuel is off site prior to commencing decommissioning of Sequoyah Units 1 and 2 in the SAFSTOR alternative.

TVA's position is that the DOE has a contractual obligation to accept the spent fuel earlier than the projections set out above consistent with its contract commitments. No assumption made in this submittal should be interpreted to be inconsistent with this claim.

3.

ISFSI Decommissioning Strategy At the conclusion of the spent fuel transfer process the ISFSI pad will be promptly decommissioned (similar to the power reactor DECON alternative).

For purposes of the funding plan, financial assurance is provided on the basis of a prompt ISFSI decommissioning scenario, i.e., independent of other station decommissioning strategies. ISFSI decommissioning is considered an independent project, regardless of the decommissioning alternative identified for the nuclear power plant.

2 U.S. Code of Federal Regulations, Title 10, Part 72, Subpart K, "General License for Storage of Spent Fuel at Power Reactor Sites."

U.S. Code of Federal Regulations, Title 10, Part 961.11, Article IV - Responsibilities of the Parties, B. DOE Responsibilities, 5.(a)... DOE shall issue an annual acceptance priority ranking for receipt of SNF and/or HLW at the DOE repository. This priority ranking shall be based on the age of SNF and/or HLW as calculated from the date of discharge of such materials from the civilian nuclear power reactor. The oldest fuel or waste will have the highest priority for acceptance, except as..."

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Tennessee Valley Authority Sequoyah Nuclear Plant ISFSI

4.

ISFSI Description The ISFSI at Sequoyah is comprised of numerous contiguous pads that for the purpose of the ISFSI decommissioning estimate are considered a single pad. The design and capacity of the dry storage modules on the pad is based upon the Holtec HI-STORM 100S dry cask storage system. The system consists of a multi-purpose canister (MPC),

with a nominal capacity of 32 fuel assemblies, and a steel-lined concrete storage overpack.

The MPCs are assumed to be transferred directly to the DOE and not returned to the station. Some of the overpacks are assumed to have residual radioactivity due to some minor level of neutron-induced activation as a result of the long-term storage of the fuel.

The cost to dispose of residual radioactivity, and to verify that the remaining facility and surrounding environs meet the NRC's radiological limits established for unrestricted use, forms the basis of the ISFSI decommissioning estimate.

TVA's current spent fuel management plan for Sequoyah spent fuel would result in 134 MPCs and overpacks being placed on the storage pad at the site. This represents 100%

of the total spent fuel projected to be generated during the currently licensed operating period. This scenario would allow the spent fuel storage pools to be emptied within approximately five and one-half years following the permanent cessation of operations.

The 134 casks projected to be on the ISFSI pad after shutdown excludes any additional casks that may be used for Greater-than-Class-C (GTCC) storage. The storage overpacks used for the GTCC canisters (estimated quantity of 10) are not expected to have any interior contamination or residual activation and can be reused or disposed of by conventional means after a final status survey.

Table 1 provides the significant quantities and physical dimensions used as the basis in developing the ISFSI decommissioning estimate.

5.

Key Assumptions / Estimating Approach The decommissioning estimate is based on the configuration of the ISFSI expected after all spent fuel and GTCC material has been removed from the site. The configuration of the ISFSI is based on Sequoyah operating until the end of its current licenses (2020 and 2021) and the DOE's spent fuel acceptance assumptions, as previously described.

The dry storage vendor, Holtec International, does not expect the overpacks to have any interior or exterior radioactive surface contamination. Any neutron activation of the steel and concrete is expected to be extremely small.I41 This assumption is adopted for this analysis.

The decommissioning estimate is based on the premise that some of the inner steel-liners of the concrete overpacks will contain low levels of neutron-induced residual HI-STORM FSAR, Holtec International, Report HI-2002444, Rev. 7, at page 2.4-1 (Accession Number ML082401629)

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Tennessee Valley Authority Sequoyah Nuclear Plant ISFSI radioactivity that would necessitate remediation at the time of decommissioning. As an allowance, 14 of the 134 overpack liners are assumed to be affected, i.e., contain residual radioactivity. The allowance quantity is based upon the number of casks required for the final core off-load (i.e., 193 offloaded assemblies per reactor, 32 assemblies per cask, 2 reactors) which results in 14 overpacks. It is assumed that these are the final casks offloaded; consequently they have the least time for radioactive decay of the neutron activation products.

Holtec does not expect any residual contamination to be left on the concrete ISFSI pad.[51 It would be expected that this assumption would be confirmed as a result of good radiological practice of surveying potentially impacted areas after each spent fuel transfer campaign. It is assumed for this analysis that the ISFSI pad will not be contaminated. As such, only verification surveys are included for the pad in the decommissioning estimate. An allowance is also included for surveying any transfer equipment.

The estimate is limited to costs necessary to terminate the ISFSI's NRC license and meet the §20.1402 criteria for unrestricted use. Disposition of released material and structures is outside the scope of the estimate.

Based on TVA's review of the records maintained in accordance with §50.75(g)(1), there is no known subsurface material containing residual radioactivity in the proximity of the ISFSI that would require remediation. As such, there is no allowance for soil remediation in the estimate to decommission the ISFSI.

Low-level radioactive waste disposal costs are based on TVA's negotiated rates with EnergySolutions.

Decommissioning is assumed to be performed by an independent contractor. As such, labor, equipment, and material costs are based on national averages, i.e., costs from national publications such as R.S. Means' Building Construction Cost Data (adjusted for regional variations), and laboratory service costs are based on vendor price lists. TVA, as licensee, will oversee the site activities.

Contingency has been added at an overall rate of 25%. This is consistent with the contingency evaluation criteria referenced by the NRC in NUREG-1757.(61 Costs are reported in 2012 dollars and based upon an ongoing decommissioning analysis being prepared for Sequoyah. Activity costs originally reported in 2011 dollars have been escalated to 2012 dollars using the Consumer Price Index, Services.[]

5 HI-STORM FSAR, Holtec International, Report HI-2002444, Rev. 7, at page 2.4-2 (Accession Number ML082401629) 6 "Consolidated Decommissioning Guidance, Financial Assurance, Recordkeeping, and Timeliness," U.S. Nuclear Regulatory Commission's Office of Federal and State Materials and Environmental Management Programs, NUREG-1757, Volume 3, Revision 1, February 2012 Bureau of Labor Statistics, Consumer Price Index - All Urban Consumers, Services, Series ID: CUUROOOOSAS E2-4

Tennessee Valley Authority Sequoyah Nuclear Plant ISFSI

6.

Cost Considerations The estimated cost to decommission the ISFSI pad and release the facility for unrestricted use is provided in Table 2. The cost includes an initial planning phase.

During this phase the empty overpacks, ISFSI pad, and surrounding environs are characterized, and the activity specifications and work procedures for the decontamination (liner removal) are developed.

The next phase includes the cost for craft labor to remove the activated liners, package in certified waste containers, transportation to the Clive, Utah site, disposal, as well as the costs for the supporting equipment, materials and supplies.

The final phase includes the cost for the license termination survey, verification survey, and the associated equipment and laboratory support.

The estimate also contains costs for the NRC (and NRC contractor), TVA's oversight staff, site security (industrial), and other site operating costs.

For estimating purposes it is conservatively assumed that all expenditures will be incurred in the year 2074 (following removal of all spent fuel).

7.

Financial Assurance The construction and operation of the ISFSI at Sequoyah were the result of the DOE's failure to remove spent nuclear fuel from the site in a timely manner under the terms of the Standard Contract. TVA filed suit for DOE's failure to begin accepting and disposing of spent nuclear fuel from Sequoyah and Browns Ferry Nuclear Plants in the Court of Federal Claims in April 2001. In January 2006, the Court determined that WVA would not have built ISFSIs at Sequoyah or Browns Ferry but for DOE's delay and held that most costs associated with the ISFSIs were recoverable. The Court awarded TVA approximately $35 million for costs incurred through FY2004 with the understanding that additional costs in future years could be claimed as they were incurred. As a result of submitting subsequent claims, TVA has received payments totaling an additional

$72 million to date as a result of DOE's delay. TVA continues to submit claims for operating costs of the ISFSls and once they are no longer needed and decommissioning-related costs are incurred, TVA anticipates filing claims for such costs because they, too, are directly related to DOE's delay in accepting and disposing of the plants' spent nuclear fuel.

Independent of WVA's anticipated claims to recover costs associated with decommissioning the Sequoyah ISFSI, and in accordance with §72.30(b)(4), WVA has provided a statement of intent indicating that funds for decommissioning will be obtained when necessary. This method for assuring ISFSI decommissioning funding is provided for in §72.30(e)(4) in the case of Federal, State, or local government licensees. Under the provisions of the Tennessee Valley Authority Act of 1933, as amended, 16 U.S.C.

§§ 831-831ee (2006 & Supp. V 2011), WVA is a corporate agency and instrumentality of the United States Government.

E2-5

Tennessee Valley Authority Sequoyah Nuclear Plant ISFSI As shown in Table 2, the cost to decommission the ISFSI at Sequoyah Nuclear Plant is estimated to be $4,728, 100. A statement of intent for this amount is provided in Attachment A. Additionally, as required by §72.30(b)(6), a certification of financial assurance is provided in Attachment B.

TVA plans to adjust the cost estimate every three years to account for changes in the costs and the extent of contamination. Following changes to the cost estimate, funding levels will be evaluated to determine if additional funding or use of a different funding mechanism is warranted.

E2-6

Tennessee Valley Authority Sequoyah Nuclear Plant ISFSI Table I Significant Quantities and Physical Dimensions ISFSI Pad Residual Item Length (ft)

Width (ft)

Radioactivity ISFSI Pad (existing pad w/ expansion) 452 115 No ISFSI Storage Overpack (Holtec HI-STORM 100S)

Item Value Notes Overall Height (inches) 218.5 Dimensions are nominal Outside Diameter (inches) 132.50 Dimensions are nominal Inside Diameter (inches) 73.50 Dimensions are nominal Inner Liner Thickness (inches) 1.0 Dimensions are nominal Quantity (total) 144 134 spent fuel + 10 GTCC Equivalent to the number of overpacks used Quantity (with residual radioactivity) 14 to store last complete core offload Total Surface Area of Overpack Liner with Residual Radioactivity (square feet) 4,601 Low-Level Radioactive Waste (cubic feet) 2,428 Low-Level Radioactive Waste (packaged density) 84 Average weight density Other Potentially Impacted Items Item Value Notes Number of Overpacks used for GTCC storage 10 No residual radioactivity E2-7

Tennessee Valley Authority Sequoyah Nuclear Plant ISFSI Table 2 ISFSI Decommissioning Costs and Waste Volumes Costs Waste (thousands, 2012 dollars)

Volume Person-Hours NRC / NRC Removal Packaging Transport Disposal Other Total (ft3)

Contractor Licensee Contractor Decommissioning Contractor Planning (characterization, specs and procedures) 374 374 1,264 Decontamination/Demolition (activated liner removal) 135 8

52 376 53 624 2,428 741 License Termination (radiological surveys) 1,961 1,961.0 14,788 Subtotal 135 8

52 376 2,388 2,959 2,428 16,794 Supporting Costs NRC and NRC Contractor Fees and Costs 431.9 431.9 776 Insurance 63.2 63.2 Security (industrial) 87.3 87.3 4,685 TVA Oversight Staff 241.1 241.1 3,554 Subtotal 823.5 823.5 4,685 3,554 776 Total (w/o contingency) 135 8

52 376 3,211 3,782 2,428 21,479 3,554 776 Total (w125% contingency)

I 4,728.1 1i1 E2-8

Tennessee Valley Authority Sequoyah Nuclear Plant ISFSI Attachment A ATTACHMENT A Tennessee Valley Authority 400 West Summit Hill Drive Knoxville, TN 37902 (865) 632-2101 Sequoyah Nuclear Plant, Units 1 and 2 Facility Operating License Nos. DPR-77 and DPR-79 NRC Docket Nos. 50-327 and 50-328 STATEMENT OF INTENT The Tennessee Valley Authority (TVA) is a corporate agency and instrumentality of the United States Government created pursuant to the Tennessee Valley Authority Act of 1933, as amended, 16 U.S.C. §§ 831-831ee (2006 & Supp. V 2011). Under the terms of the TVA Act, the TVA Board of Directors is duly empowered to direct the exercise of all of the powers of TVA.

Under the terms of the Government Corporation Control Act, 31 U.S.C. § 9103 (2006), TVA's Board of Directors is also authorized to submit yearly budgets to the President for inclusion in the President's annual budget submission to Congress which could include, among other things, requests for appropriations needed to restore capital impairments. Such appropriations could include funds for decommissioning activities associated with operations authorized by the U.S.

Nuclear Regulatory Commission (NRC) under Facility Operating License Nos. DPR-77 and DPR-79.

Pursuant to its authority, the TVA Board of Directors established a TVA Board Practice system, as amended on November 17, 2011, which provides, among other things, guidance to the TVA Chief Executive Officer (CEO) as to what capital projects the TVA Board considers to be within the CEO's approval authority under Section 3.2(i) of the TVA Bylaws. (Section 3.2(i) of the TVA Bylaws states that the CEO has all authorities and duties "necessary or appropriate to carry out projects and activities approved by the Board of Directors or to maintain continuity and/or reliability of ongoing operations.") Under the TVA Board Practice entitled Capital Projects Approvals, the CEO has the authority to approve any capital project provided the project amount does not exceed $50 million. In addition, the TVA Board Practice on Procurement Contract Approvals authorizes the CEO to approve any procurement contract that does not exceed $100 million if its term does not exceed 5 years, and any contract that does not exceed

$25 million if its term exceeds 5 years.

Based upon the $4,728,100 cost estimate for decommissioning the Sequoyah Nuclear Plant Independent Spent Fuel Storage Installation (ISFSI), approval of capital project funding and/or the approval of procurement contracts to accomplish such decommissioning falls well within the TVA CEO's authority.

Accordingly, in accordance with the above authorities and the TVA CEO's express delegation of authority to me as Chief Nuclear Officer (CNO), I hereby state TVA's intention to ensure that funds will be obtained and made available when necessary in the amount of $4,728,100 to E2-9

Tennessee Valley Authority Sequoyah Nuclear Plant ISFSI Attachment A decommission the Sequoyah Nuclear Plant ISFSI as prescribed by NRC regulations. These funds will be obtained and made available sufficiently in advance of decommissioning to prevent the delay of required activities.

A copy of the Delegation of Authority from the CEO to the CNO is provided in Exhibit A as evidence that I am authorized to represent TVA in this transaction. The TVA Board Practice Amendments referenced above are included as an attachment to Exhibit A.

Preston D. Swafford Chief Nuclear Officer Tennessee Valley Authority December 17, 2012 Exhibit A:

Memo Delegating Authority from the Chief Executive Officer to the Chief Nuclear Officer E2-10

Tennessee Valley Authority Sequoyah Nuclear Plant ISFSI Attachment B ATTACHMENT B Tennessee Valley Authority 400 West Summit Hill Drive Knoxville, TN 37902 (865) 632-2101 Sequoyah Nuclear Plant, Units 1 and 2 Facility Operating License Nos. DPR-77 and DPR-79 NRC Docket Nos. 50-327 and 50-328 CERTIFICATION OF FINANCIAL ASSURANCE I certify that Sequoyah Nuclear Plant is licensed to receive title to and own spent nuclear fuel, high-level radioactive waste, and reactor-related greater than Class C waste as a 10 CFR Part 50 General Licensee under the provisions of 10 CFR Part 72. I also certify that financial assurance in the amount of $4,728,100 will be made available when necessary to decommission the Sequoyah Nuclear Plant Independent Spent Fuel Storage Installation using the financial assurance method set forth in 10 CFR 72.30(e)(4).

Should additional information be needed regarding this certification of financial assurance by the Tennessee Valley Authority, contact Joseph W. Shea, Vice President, Nuclear Licensing, at (423) 751-6887.

Preston D. Swaffor Chief Nuclear Officer Tennessee Valley Authority December 17, 2012 E2-11

Exhibit A TENNESSEE VALLEY AUTHORITY Memo Delegating Authority from the Chief Executive Officer to the Chief Nuclear Officer

December'10, 2012 Tom Kilgore, WT 7B-K FUNDING OF ESTIMATED-COSTS FOR DECOMMISSIONINGTVA'S INDEPENDENT SPENT FUEL STORAGE INSTALLATIONS AT BROWNS FERRY AND SEQUOYAH NUCLEAR PLANTS Pursuant to new Nuclear Regulatory Commission requirements, TVA is required to submit decommissioning.funding, plans tothe NRC on or before December"17, 2012. The purposeof-the funding plans is to provide reasonable assurance that funds will be available to decommission the-Independent Spent Fuel Storage Installations. (ISFSIs)zat the Browns Ferry and Sequoyah Nuclear Plants, within a period Of time after both plants eventually cease operations.. The funding plans will contain -a cost estimate for decommissioning each ISFSI as well as a statement of intent indicating that sufficient-funds for decommissioning will be obtained when necessary.

.Cost studies performed to, date~estimate that approximately $7.4 million and $4.7 million will, be required tO decommission the ISFSIs at Browns Ferry and Sequoyah, respectively. Authority to, approve-decommissioning projects, in these amounts is within your authority under.the TVAi Board Practice entitled Capital Projects Approvals. (originally approved by the Board on January 25, 2007 and amended on November 17, 2011). In particular,'the-Board Practice; provides that the Chief'Executive. Officer: (CEO) -has the authority to~approve any capital project provided the project amount does not exceed $50 million. Further, with regard to the authority

-to contract for.the ISFSIs, the TVABoardPractice on: Procurement Contract Approvals (originally approved by'the Boardon November 30, 2006 and amended, on November 17, 2011) authorizes the CEO-to approve any procurement contract that does, not exceed $100million if its term does, not exceed 5 years, and any, contract thatdoes not exceed,$25 million if its term exceeds 5 years. I have.attached the appropriate TVA Board Practice documents for ease of reference.

Based upon the above-mentioned.iSFSI decommissioning cost estimates, the approval of capital project'funding and/or the approval of procurement contracts to accomplish any necessary, and-separate, decommissioning activities for each project would fall well,within theý.

CEO'slauthority -under the applicable TVA Board Practices. Accordingly; I am asking that you

'indicate your-support for such ISFSI projects andthat you delegate to. the Chief: Nuclear Officer (CNO) the.' authority to submit appropriate certification statements and statements of intent for the Browns Ferry Nuclear Plant-and, Sequoyah Nuclear Plant ISFS1s in-the amounts-of'$7.4 million and $4.7"million, respectively. Because these-are first-time estimates that will likely be; subject to. future revision-as ongoing decommissioning studies and changing requirements impact costs, I also ask that you delegate to the CNO the authority to-submit any future certification statements and statements of intent fortwice the stated amounts ($14,84millionand Exhibit A, Page 1

Tom Kilgore Page 2 December 10, 2012

$9.4 million) for each ISFSI project. Such amounts remain well below the CEO's authority under the applicable TVA Board Practices.

Your signature below jpdicates your approval.

Preston 0. Swafford Executive Vice Presid t and Chief Nuclear Officer LP 3R-C JAP Attachments cc:

J. W. Shea, LP 3D-C E. J. Vigluicci, WT 6A-K EDMS, WT CA-K Approved:

Tom Kilgore, Chief crF'ecutive Officer Date:

/z//71

-- 72 Exhibit A, Page 2

PROPOSED BOARD RESOLUTION (TVA Board Practice Amendments)

WHEREAS the Board has from time to time adopted certain practices to address various Board and Board Committee processes and activities or to provide guidance in interpreting provisions of the Bylaws of the Tennessee Valley Authority; and WHEREAS the Board has reviewed the existing practices and desires to make amendments to reflect the functions of the various Board Committees rather than the formal Committee names; and WHEREAS the Board believes it would be useful and appropriate to adopt a practice allowing the grouping of non-controversial, ministerial items together for Board consideration at a public board meeting when considered appropriate by the Chairman of the Board and the Chief Executive Officer; BE IT RESOLVED, That the Board hereby amends the TVA Board Practices to make such administrative changes as reflected in the document attached hereto and filed with the records of the Board as Exhibit I.-1'7-l IR

and BE IT RESOLVED, FURTHER, That the Board hereby adopts the TVA Board Practice entitled Consent Agenda as reflected in the same Exhibit.

0 i-- 4 --D-o NOQV V' 2011 Exhibit A, Page 3

Ek:;-4 Resolution of The Board of Directors of the Tennessee Valley Authority (Establishing the Board Practice System)

WHEREAS the Board, from time to time, may choose to adopt certain practices to govern various Board and Board Committee processes and activities or to interpret provisions of the Bylaws of The Tennessee Valley Authority in order to provide guidance to Board Members or the Chief Executive Officer in those cases where an amendment to the Bylaws to accomplish such purposes might not be necessary; and WHEREAS the Board believes that it would be useful and appropriate to establish a system for compiling and maintaining these various practices that the Board may approve in the future; BE IT RESOLVED, That the Board hereby establishes a TVA Board Practices system, into which all future actions by the Board in adopting such practices or providing such interpretative guidance regarding the Bylaws of The Tennessee Valley Authority shall be compiled, indexed, and maintained by the Corporate Secretary in a manner that shall assure convenient access for Board Members and for the Chief Executive Officer and TVA management.

Approved by the Board of Directors of the Tennessee Valley Authority November 30, 2006 Exhibit A, Page 4

U TVA Board Practice Capital Projects Approvals

Background

Section 3.2(i) of the Bylaws of The Tennessee Valley Authority provides, among other things, that TVA's Chief Executive Officer (CEO) has all authorities and duties "necessary or appropriate to carry out projects and activities approved by the Board of Directors or to maintain continuity and/or reliability of ongoing operations."

The Board acknowledges that a routine part of maintaining continuity and/or reliability of ongoing operations involves undertaking capital projects. By adopting this TVA Board Practice, the Board is providing more definitive guidance to the CEO as to what capital projects the Board generally considers to be within the CEO's approval authority under Section 3.2(i) of the Bylaws. It is intended by the Board to enable the CEO to assume authority to approve capital projects up to a specified dollar amount.

Guidance 0

The CEO may approve a capital project that has been specified by line-item in a Board-approved budget, provided that capital projects in amounts greater than $100 million will be presented for review to the committee with oversight responsibility for the budget Op..atienc, ER,.VI,.RO....

ad Sfot',

mm.tee-(in coordination with other Board Committees, as appropriate).

0 The CEO may assume the authority to approve any capital project not specified by line-item in a Board-approved budget provided the project amount does not exceed

$50 million.

Notwithstanding the foregoing, the CEO may determine that a capital project should be submitted to the Board for its consideration and approval on the grounds that new, special, or novel considerations are involved.

Approved by the Board of Directors of the Tennessee Valley Authority January 25, 2007 Exhibit A, Page 5

TVA Board Practice Procurement Contract Approvals

Background

Section 3.2(i).of the Bylaws of The Tennessee Valley Authority provides, among other things, that TVA's Chief Executive Officer (CEO) has all authorities and duties "necessary or appropriate to carry out projects and activities approved by the Board of Directors or to maintain continuity and/or reliability of ongoing operations."

The Board acknowledges that a routine part of carrying out approved projects and activities and I

maintaining continuity and/or reliability of ongoing operations involves committing TVA to contracts under which TVA purchases or sells products or services (Procurement Contracts).

For the purposes of this TVA Board Practice, Procurement Contracts do not include contracts for fuel-related transactions or contracts for the purchase or sale of electric power.

.The Board further acknowledges that, in the absence of guidance from the Board, many Procurement Contracts into which TVA enters could reasonably be considered to fall within the scope of the CEO's authorities under Section 3.2(i) of the Bylaws, regardless of the dollar amount to which the particular Procurement Contract would commit TVA or the length of its term.

By adopting this TVA Board Practice, the Board is providing more definitive guidance to the CEO as to what Procurement Contracts the Board generally considers to be within the CEO's approval authority under Section 3.2(i) of the Bylaws. It is intended by the Board to enable the CEO to assume authority to approve a Procurement Contract that commits TVA up to a specified dollar amount or for a term of up to a specified number of years.

Guidance The CEO may approve any Procurement Contract which falls within the following parameters, as applicable:

The contract amount does not exceed $100 million and its term does not exceed 5 years.

The contract amount does not exceed $25 million and its term exceeds 5 years.

Notwithstanding the foregoing, the CEO may determine that a Procurement Contract, as described above, should be submitted to the Board for its consideration and approval on the grounds that new, special, or novel considerations are involved.

Approved by the Board of Directors of the Tennessee Valley Authority November 30, 2006 Exhibit A, Page 6