ML13098A031

Request for Exemptions from 10 CFR 50.82(a)(8)(i)(A) and 50.75(h)(1)(iv)

ML13098A031
Person / Time
Site:	Kewaunee  (DPR-043)
Issue date:	04/04/2013
From:	Stoddard D Dominion, Dominion Energy Kewaunee
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
13-074
Download: ML13098A031 (17)

Text

Dominion Energy Kewaunee, Inc.

oD minioW 5000 Dominion Boulevard, Glen Allen, VA 23060 Web Address: www.dom.com April 4, 2013 ATTN: Document Control Desk Serial No.13-074 U. S. Nuclear Regulatory Commission LIC/CDS/RO Washington, DC 20555-0001 Docket No.: 50-305 License No.: DPR-43 DOMINION ENERGY KEWAUNEE, INC.

KEWAUNEE POWER STATION REQUEST FOR EXEMPTIONS FROM 10 CFR 50.82(a)(8)(i)(A) AND 50.75(h)(1)(iv)

Pursuant to 10 CFR 50.12, Dominion Energy Kewaunee, Inc. (DEK) requests an exemption from 10 CFR 50.82(a)(8)(i)(A) for Kewaunee Power Station (KPS) to allow DEK to use funds from the KPS decommissioning trust fund (Trust) for irradiated fuel management, consistent with the KPS updated Irradiated Fuel Management Plan and Post-Shutdown Decommissioning Activities Report (PSDAR).

DEK also requests, pursuant to 10 CFR 50.12, an exemption from 10 CFR 50.75(h)(1)(iv) for the same reason, and also to allow Trust disbursements for irradiated fuel management activities to be made without prior notice, similar to withdrawals in accordance with 10 CFR 50.82(a)(8).

By letter dated February 25, 2013, DEK informed the NRC of its intention to permanently cease operation of KPS on May 7, 2013 (Reference 1). Subsequently, by separate letters dated February 26, 2013 (References 2 and 3), DEK submitted an update to the KPS Irradiated Fuel Management Plan (as required by 10 CFR 50.54(bb))

and a PSDAR (as required by 10 CFR 50.82(a)(4)(i)).

The updated Irradiated Fuel Management Plan demonstrates the Trust contains funds in excess of the amount needed to cover the estimated costs of radiological decommissioning, irradiated fuel management, and site restoration. However, 10 CFR 50.82(a)(8)(i)(A) states that decommissioning trust funds may be used by licensees if the withdrawals are for expenses for legitimate decommissioning activities consistent with the definition of decommissioning in 10 CFR 50.2. 10 CFR 50.75(h)(1)(iv) similarly requires that trust agreements restrict disbursements (other than for ordinary and incidental expenses) to decommissioning expenses until final decommissioning is completed. The definition of "decommission" in 10 CFR 50.2 does not include activities associated with irradiated fuel management.

Therefore, exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) are needed to allow DEK to use funds from the Trust for irradiated fuel management.

These requested exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) are permissible under 10 CFR 50.12 because they will not present an undue risk to the public health and safety, and application of the regulations in this particular circumstance is not necessary to achieve the underlying purpose of the rule. The site-specific cost estimate submitted as Attachment 1 to the KPS PSDAR demonstrates that

Serial No.13-074 Request for Exemptions Page 2 of 4 the Trust contains not only adequate funds to cover the estimated costs of radiological decommissioning but also additional funds in excess of the estimated costs for irradiated fuel management (covered by the exemption request) and site restoration (not included in this exemption request), with $52 million left over at completion. Moreover, as indicated in the updated Irradiated Fuel Management Plan, the Parent Support Agreement that DEK has entered into with its parent, Dominion Resources, Inc., will remain in place during decommissioning.

Therefore, application of 10 CFR 50.82(a)(8)(i)(A) and the provision in 10 CFR 50.75(h)(1)(iv) restricting use of the Trust are not necessary to ensure adequate funding for radiological decommissioning of KPS.

Application of the rule would impose an unnecessary burden on DEK to provide additional, unnecessary funding.

10 CFR 50.75(h)(1)(iv) further provides that, except for withdrawals being made under 10 CFR 50.82(a)(8) or for payments of ordinary and incidental expenses, no disbursement may be made from the Trust without written notice to the NRC at least 30 working days in advance.

Because disbursements for irradiated fuel management activities would not be made under 10 CFR 50.82(a)(8), this provision would require advance notice prior to any such disbursement. DEK requests an exemption from this provision so that disbursements for irradiated fuel management are treated the same as those for radiological decommissioning. The requested exemption from this provision in 10 CFR 50.75(h)(1)(iv) is permissible under 10 CFR 50.12 because it will not present an undue risk to the public health and safety, and application of the regulation in this particular circumstance is not necessary to achieve the underlying purpose of the rule.

The PSDAR and updated Irradiated Fuel Management Plan for KPS identify the intended disbursements, and the annual reporting requirements in recently promulgated 10 CFR 50.82(a)(8)(v) and (vi) will allow continual NRC oversight of the status of the Trust.

DEK recognizes that if this exemption request is approved, amendments to its nuclear decommissioning trust agreements for Kewaunee will be necessary, and that prior notice of the amendments is required by 10 CFR 50.75(h)(1)(iii).

The exemption request is contained in the attachment to this letter.

DEK requests approval of this exemption request by September 1, 2013. The plant is scheduled to shutdown on May 7, 2013 and be in a defueled condition several weeks thereafter. As discussed in the KPS Irradiated Fuel Management Plan and PSDAR, DEK plans to begin irradiated fuel management activities shortly after the reactor is defueled. The exemptions are needed as soon as possible in order to allow DEK to use funds from the Trust for these irradiated fuel management activities.

Serial No.13-074 Request for Exemptions Page 3 of 4 If you have any questions or require additional information please contact Mr. Craig Sly at 804-273-2784.

Very truly yours, Daniel G. Stoddard Senior Vice President - Nuclear Operations

Attachment:

1. Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 50.75(h)(1)(iv)

Commitments made by this letter: None

References:

1. Letter from D. G. Stoddard (DEK) to NRC Document Control Desk, "Certification of Permanent Cessation of Power Operations," dated February 25, 2013.

2. Letter from D. G. Stoddard (DEK) to NRC Document Control Desk, "Update to Irradiated Fuel Management Plan Pursuant to 10 CFR 50.54(bb)," dated February 26, 2013.

3. Letter from D. G. Stoddard (DEK) to NRC Document Control Desk, "Kewaunee Power Station Post-Shutdown Decommissioning Activities Report," dated February 26, 2013.

Serial No.13-074 Request for Exemptions Page 4 of 4 cc:

Regional Administrator, Region III U. S. Nuclear Regulatory Commission 2443 Warrenville Road Suite 210 Lisle, IL 60532-4352 Mr. Karl D. Feintuch Project Manager U.S. Nuclear Regulatory Commission One White Flint North, Mail Stop 08-Dl 5 11555 Rockville Pike Rockville, MD 20852-2738 NRC Senior Resident Inspector Kewaunee Power Station

Serial No.13-074 ATTACHMENT 1 REQUEST FOR EXEMPTIONS FROM 10 CFR 50.82(a)(8)(i)(A) AND 50.75(h)(1)(iv)

KEWAUNEE POWER STATION DOMINION ENERGY KEWAUNEE, INC.

Serial No.13-074 Page 1 of 12 Kewaunee Power Station Request for Exemptions from 10 CFR 50.82(a)(8)(i)(A) and 50.75(h)(1)(iv)

I.

DESCRIPTION Pursuant to 10 CFR 50.12 "Specific exemptions," Dominion Energy Kewaunee, Inc.

(DEK) requests an exemption from 10 CFR 50.82(a)(8)(i)(A) to allow DEK to use funds from the Kewaunee Power Station (KPS) decommissioning trust fund (Trust) for irradiated fuel management, consistent with the KPS updated Irradiated Fuel Management Plan and Post-Shutdown Decommissioning Activities Report (PSDAR).

DEK also requests, pursuant to 10 CFR 50.12, an exemption from 10 CFR 50.75(h)(1)(iv) for the same reason, and also to allow Trust disbursements for irradiated fuel management activities to be made without prior notice, similar to withdrawals in accordance with 10 CFR 50.82(a)(8).

By letter dated February 25, 2013, DEK informed the NRC of its intention to permanently cease operation of KPS on May 7, 2013 (Reference 1). Subsequently, by separate letters dated February 26, 2013 (References 2 and 3), DEK submitted an update to the KPS Irradiated Fuel Management Plan (as required by 10 CFR 50.54(bb))

and a PSDAR (as required by 10 CFR 50.82(a)(4)(i)). The updated KPS Irradiated Fuel Management Plan demonstrates the Trust contains funds in excess of the amount needed to cover the estimated costs of radiological decommissioning, irradiated fuel management, and site restoration.

The updated Irradiated Fuel Management Plan reflects DEK's intention to use the Trust for irradiated fuel management and acknowledges the need for NRC approval to do so.

10 CFR 50.82(a)(8)(i)(A) states that decommissioning trust funds may be used by licensees if the withdrawals are for expenses for legitimate decommissioning activities consistent with the definition of decommissioning in 10 CFR 50.2. Similarly, 10 CFR 50.75(h)(1)(iv) requires that decommissioning trust agreements provide that disbursements (other than ordinary and incidental expense) are restricted to decommissioning expenses until final decommissioning is completed. The definition of "decommission" in 10 CFR 50.2 does not include activities associated with irradiated fuel management.

Based on the above, DEK has concluded that 10 CFR 50.75(h)(1)(iv) and 10 CFR 50.82(a)(8)(i)(A) would prohibit use of Trust funds for activities related to irradiated fuel management prior to completion of radiological decommissioning. As discussed in the KPS PSDAR, DEK plans to maintain KPS in a safe storage condition for an extended period prior to completion of radiological decommissioning. This will allow radioactive decay to occur, thereby reducing the quantity of contamination and radioactivity that must be disposed of during the decontamination and dismantlement process as well as reducing the associated occupational exposure.

Serial No.13-074 Page 2 of 12 However, the KPS PSDAR and updated Irradiated Fuel Management Plan contain activities associated with irradiated fuel management that must be accomplished prior to completion of radiological decommissioning. Exemptions from 10 CFR 50.82(a)(8)(i)(A) and 50.75(h)(1)(iv) are requested to allow DEK to withdraw and use Trust funds for these irradiated fuel management activities. As the Trust contains funds in excess of the estimated costs needed to complete both radiological decommissioning and irradiated fuel management, these exemptions would not present an undue risk to the public health and safety or prevent decommissioning from being completed as planned.

I1.

BACKGROUND DEK's original Irradiated Fuel Management Plan (Reference 4), submitted on December 19, 2008 while DEK was pursuing license renewal, assumed that the DECON method of decommissioning would be used, resulting in the Trust becoming available for irradiated fuel management upon completion of the immediate dismantlement period. However, as described in the KPS PSDAR, DEK has now decided to use the SAFSTOR method of decommissioning, which defers completion of radiological decommissioning until after a storage period, thus delaying (absent an exemption) the availability of excess amounts in the Trust for irradiated fuel management.

The PSDAR includes a site-specific decommissioning cost analysis (provided as to the PSDAR), which estimates the cost of radiological decommissioning, irradiated fuel management, and site restoration.

The updated Irradiated Fuel Management Plan includes a cash flow analysis demonstrating that, with credited earnings during the SAFSTOR period, the Trust contains funds in excess of the estimated amount needed to cover all of these activities.

The cash flow analysis from the updated Irradiated Fuel Management Plan is reproduced for convenience in Table 1 below. The analysis shows the beginning and ending Trust balances and the annual decommissioning costs. The analysis includes a separate annual itemization for license termination (radiological decommissioning),

irradiated fuel management, and site restoration. The analysis projects that at the end of decommissioning activities in 2073, about $52.1 million (using a 0.0% escalation rate and a 2.0% Fund Growth Rate on remaining funds) will remain in the Trust.

DEK also has in place a Parent Support Agreement in the amount of $60 million for the purposes of supplementing DEK in the event of; 1) an operational outage lasting six months or more, or 2) for decommissioning of the plant.

This Parent Support Agreement will remain in place and provides additional financial assurance for decommissioning and irradiated fuel management.

Serial No.13-074 Page 3 of 12 Table 1 Annual Cash Flow Analysis Kewaunee - SAFSTOR Methodology Annual Cash Flow Analysis - Total Decomlssioning, Spent Fuel Management and Site Restoration Costs (in Millions of Dolars $

Date Amount Current Value of Qualified Fund as of 1213112012 678.609 Current Value of Non Qualified Fund as of 1213112012 Total Trust Fund Balances as of 12/3112012 678.609 NRC Minimum as of 12/3112012 449.687 Start of Decommissioning 71112013 Decommissioning Funds value at Calculation date 12/3112012 678.609 Total Estimated Costs at Calculation date 12/3112012 919.872 0.000%

Cost Escalation Rate 2.;00%

]Fund Growth Rate Start of Decom to End of Decom - Assumes 0% Decom cost escalation rate Start of Decom to End of Decom - Assumes 2% Real Rate of Return (RRoR)

Kewaunee - SAFSTOR Methodology Annual Cash Flow Analysis - Total Decomissioning, Spent Fuel Management and Site Restoration Costs (in Millions of Dollars $

Column 2 Column 3 Column 4 Column 6 Column 6 Column 8 Column 1 Earnings Total Total Total Total Column 7 Total Beginning on Ucense Termination Spent Fuel Mgt Site Restoration SAFSTOR End SAFSTOR of Year Trust Funds Expenditures Expenditures Expenditures Expenditures of Year Expenditures Year Balance (Reflects 2% RRcR)

(Reflects 0% Ese)

(Reflects 0% Esc)

(Reflects 0% Esc)

(Reflects 0% Esc)

Balance (in 12/31/2012 S) 2013 578.609 11.102 30.849 16.200 47.048 542.662 47.048 2014 542.662 9.875 68.819 29.023 97.842 454.695 97.842 2015 454.695 8.787 4.492 26.163 30.655 432.828 30.655 2016 432.828 8.335 4.492 27.700 32.192 408.971 32.192 2017 408.971 7.858 4.492 27.671 32.163 384.666 32.163 2018 384.666 7.403 4.492 24.510 29.002 363.067 29.002 2019 363.067 7.037 4.492 17.963 22.455 347.649 22.455 2020 347.649 6.684 18.169 8.723 26.891 327.441 26.891 2021 327.441 6.478 1.714 5.404 7.119 326.801 7.119 2022 326.801 6.465 1.714 5.404 7.119 326.147 $

7.119 2023 326.147 6.452 1.714 5.404 7.119 325.480 $

7.119 2024 325.480 6.438 1.714 5.404 7.119 324.800 $

7.119 2025 324.800 6.425 1.714 544 7.119 324.106 $

7.119 2026 324.106 6.411 1.714 5.404 7.119 323.399 7.119 2027 323.399 6.397 1.714 5.404 7.119 322.677 7.119 2028 322.677 6.382 1.714 5.404 7.119 321.941 7.119 2029 321.941 6.368 1.714 5.404 7.119 321.190 7.119 2030 321.190 6.353 1.714 5.404 7.119 320.424 7.119 2031 320.424 6.337 1.714 5.404 7.119 319.642 7.119 2032 319.642 6.322 1.714 5.404 7.119 318.846 7.119 2033 318.846 6.298 2.517 5.404 7.922 317.222 7.922 2034 317.222 6.273 1.714 5.404 7.119 316.376 7.119 2035 316.376 6.256 1.714 5.404 7.119 315.514 7.119 2036 315.514 6.239 1.714 5.404 7.119 314.635 7.119 2037 314.635 6.222 1.714 5.404 7.119 313.738 7.119 2038 313.738 6.204 1.714 5.404 7.119 312.823 7.119 2039 312.823 6.185 1.714 5.404 7.119 311.889 7.119 2040 311.889 6.167 1.714 5.404 7.119 310.937 7.119 2041 310.937 6.148 1.714 5.404 7.119 309.966 7.119 2042 309.966 6.128 1.714 5.404 7.119 308.976 7.119 2043 308.976 6.108 1.714 5.404 7.119 307.966 $

7.119 2044 307.966 6.088 1.714 5.404 7.119 306.935 7.119 2045 306.935 6.068 1.714 5.404 7.119 305.884 7.119 2046 305.884 6.047 1.714 5.404 7.119 304.812 7.119 2047 304.812 6.025 1.714 5.404 7.119 303.719 7.119 2048 303.719 6.003 1.714 5.404 I $

7.119 $

302.604 7.119 2049 302.604 5.978 1.714 5.6621 $

1 $

7.377 301.205 7.377 2050 1 $

301.205 5.960 1.721 4.676 I $

6.398 300.768 6.398

Serial No.13-074 Page 4 of 12 Table 1 Annual Cash Flow Analysis (cont'd)

Kewaunee - SAFSTOR Methodology Annual Cash Flow Analysis - Total Decomissioning, Spent Fuel Management and Site Restoration Costs (in Millions of Dollars $)

Column 2 Column 3 Column 4 Column 6 Column 6 Column 8 Column t Earnings Total Total Total Total Column 7 Total Beginning on License Ternination Spent Fuel Mgt Site Restoration SAFSTOR End SAFSTOR of Year Trust Funds Expenditures Expenditures Expenditures Expenditures of Year Expenditures Year Balance (Reflects 2% RRoR)

(Reflects 0% Esc)

(Reflects 0% Esc)

(Reflects 0% Esc)

(Reflects 0% Esc)

Balance (in 12/3112012 S) 2051 300.768 5.998 1.731 1.731 305.035 1.731 2052 305.035 6.083 1.731 1.731 309.388 1.731 2053 309.388 6.170 1.731 1.731 313.827 1.731 2054 313.827 6.259 1.731 1.731 318.356 1.731 2055 318.356 6.350 1.731 1.731 322.975 1.731 2056 322.975 6.442 1.731 1.731 327.686 1.731 2057 327.686 6.536 1.731 1.731 332.492 1.731 2058 332.492 6.633 1.731 1.731 337.394 1.731 2059 337.394 6.731 1.731 1.731 342.393 1.731 2060 342.393 6.831 1.731 1.731 347.493 1.731 2061 347.493 6.933 1.731 1.731 352.695 1.731 2062 352.695 7.037 1.731 1.731 358.001 1.731 2063 358.001 7.143 1.731 1.731 363.413 1.731 2064 363.413 7.251 1.731 1.731 368.933 $

1.731 2065 368.933 7.361 1.731 1.731 374.563 1.731 2066 374.563 7.474 1.731 1.731 380.307 1.731 2067 380.307 7.474 13.169 13.169 $

374.612 13.169 2068 374.612 7.266 22.670 22.670 359.208 22.670 2069 359.208 6.507 67.698 67.698 298.017 67.698 2070 298.017 4.874 108.612 108.612 $

194.279 108.612 2071 194.279 2.893 99.265 99.265 97.907 99.265 2072 97.907 1.626 11.087 22.132 33.219 66.314 33.219 2073 66.3141I $

1.1721 $

0.1091I $

2.6221 $

12.671 I $

15.402 111111

,Mot; 919.872 Cash Flow Cost Estimate (in 12/31120125)

Cash Flow Cost Estimate (Reflects 0% Escalatlo Estimated Fund Balance - end of Decommission Ing (Reflects 0.0% Escalation & 2.0% Real Rate of Return Fund Growth Rate)

Ing (Discounted to 2013 $)

1 Discount Rate = 2.00%

Estimated Fund Balance - end of Decommission Table 1 Definitions:

Column 1: Beginning of Year Balance Reflects the beginning-of-year Trust Fund balance at a 0.0% escalation rate and 2% Real Rate of Return (RRoR) on fund growth.

Column 2: Earnings on Trust Funds Reflects earnings on funds remaining in the trust.

A 2.0% RRoR Trust Fund growth rate is used for 2013 through 2073 which reflects the allowed 2.0% real rate of return over a 0.0% cost escalation rate. The annual 2.0% RRoR earnings are calculated on the beginning balance plus 50% of the projected annual expenditure for each year.

Column 3: Total License Termination ExDenditures Reflects the annual License Termination Plan cost portion of the EnergySolutions Cost Analysis (Attachment 1 to Reference 3) at a 0.0% escalation rate.

Serial No.13-074 Page 5 of 12 Column 4: Total Spent Fuel Management Expenditures Reflects the annual Irradiated Fuel Management Plan cost portion of the EnergySolutions Cost Analysis (Attachment 1 to Reference 3) at a 0.0% escalation rate.

Column 5: Total Site Restoration Expenditures Reflects the annual Site Restoration Plan cost portion of the EnergySolutions Cost Analysis (Attachment 1 to Reference 3) at a 0.0% escalation rate.

Column 6: Total SAFSTOR Expenditures Reflects the annual Total Decommissioning Plan cost from the EnergySolutions Cost Analysis (Attachment 1 to Reference 3) at a 0.0% escalation rate.

Column 7: End of Year Balance Reflects the end of year Trust Fund Balance after all projected earnings are added and all projected expenditures are deducted for the year specified at a 0.0%

escalation rate and 2.0% RRoR on fund growth.

Column 8: Total SAFSTOR Expenditures Reflects the total of License Termination, Spent Fuel Management, and Site Restoration annual costs from the EnergySolutions Cost Analysis (Attachment 1 to Reference 3) in 2012 dollars.

While this cash flow analysis demonstrates that with earnings, the Trust is sufficient to cover the estimated costs not only of radiological decommissioning but also irradiated fuel management and site restoration, 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) are an impediment to such use.

10 CFR 50.82(a)(8)(i) states (in part) that decommissioning trust funds may be used by licensees if:

(A) The withdrawals are for expenses for legitimate decommissioning activities consistent with the definition of decommissioning in Section 50.2; 10 CFR 50.75(h)(1)(iv) similarly requires that decommissioning trust agreements must provide that disbursements (other than ordinary and incidental expense) are restricted to decommissioning expenses until final decommissioning is completed. 10 CFR 50.2 provides the following definition:

Decommission means to remove a facility or site safely from service and reduce residual radioactivity to a level that permits -

1) Release of the property for unrestricted use and termination of the license; or

Serial No.13-074 Page 6 of 12

2) Release of the property under restricted conditions and termination of the license.

NRC staff guidance regarding the regulations discussed above indicates that decommissioning activities do not include irradiated fuel management, which is considered to be an operational activity. (See, e.g., NUREG-1713, "Standard Review Plan for Decommissioning Cost Estimates for Nuclear Power Reactors," pg. 2 ("Other activities related to facility deactivation and site closure, including operation of the spent fuel storage pool, construction and operation of an independent spent fuel storage installation (ISFSI)... are not included in the NRC definition of decommissioning.').

10 CFR 50.75(h)(1)(iv) further provides that except for withdrawals being made under 10 CFR 50.82(a)(8) or for payments of ordinary and incidental expenses, no disbursement may be made from the trust without written notice to the NRC at least 30 working days in advance.

Because disbursements for irradiated fuel management activities would not be made under 10 CFR 50.82(a)(8), this provision would require advance notice before disbursements for irradiated fuel management but not for radiological decommissioning. If the NRC grants an exemption allowing the Trust to be used for both radiological decommissioning and irradiated fuel management, it would be sensible to treat both types of disbursements in the same manner, eliminating the need for prior notice once decommissioning has commenced and the expenditures have been identified in the PSDAR and Irradiated Fuel Management Plan.

The annual reporting requirements in recently promulgated 10 CFR 50.82(a)(4)(v) and (vi) will allow continual NRC oversight of the status of the Trust funds thereafter.

Ill.

JUSTIFICATION FOR EXEMPTIONS AND SPECIAL CIRCUMSTANCES 10 CFR 50.12 states that the Commission may, upon application by any interested person or upon its own initiative, grant exemptions from the requirements of the regulations of Part 50 which are authorized by law, will not present an undue risk to the public health and safety, and are consistent with the defense and security.

10 CFR 50.12 also states that the Commission will not consider granting an exemption unless special circumstances are present.

As discussed below, this exemption request satisfies the provisions of Section 50.12.

A. The exemptions are authorized by law The proposed exemptions would allow DEK to use funds from the Trust for irradiated fuel management, consistent with the KPS updated Irradiated Fuel Management Plan and PSDAR.

As stated above, 10 CFR 50.12 allows the NRC to grant exemptions from the requirements of 10 CFR Part 50. The proposed exemptions would not result in a violation of the Atomic Energy Act of 1954, as amended, or the Commission's regulations. Therefore, the exemptions are authorized by law.

Serial No.13-074 Page 7 of 12 B. The exemptions will not present an undue risk to public health and safety The underlying purpose of 10 CFR 50.82(a)(8)(i)(A) and 50.75(h)(1)(iv) is to provide reasonable assurance that adequate funds will be available for decommissioning of power reactors within 60 years of cessation of operations. Based on the site-specific cost estimate and the cash flow analysis, use of the Trust in the proposed manner will not adversely impact the DEKs ability to terminate the KPS license (i.e. complete radiological decommissioning) within 60 years, consistent with the schedule and costs contained in the KPS PSDAR.

Therefore, the underlying purpose of the regulations will continue to be met. Since the underlying purpose of the rules will continue to be met, the exemptions will not present an undue risk to the public health and safety.

C. The exemptions are consistent with the common defense and security The proposed exemptions would allow DEK to use Trust funds for irradiated fuel management, consistent with the KPS updated Irradiated Fuel Management Plan and PSDAR. Irradiated fuel management is an integral part of the planned KPS decommissioning process as discussed in the KPS PSDAR, and the updated Irradiated Fuel Management Plan. Use of the Trust as discussed in the Irradiated Fuel Management Plan and PSDAR will not adversely affect DEKs ability to physically secure the site or protect special nuclear material.

Therefore, the proposed exemptions are consistent with the common defense and security.

D. Special Circumstances Pursuant to 10 CFR 50.12(a)(2), the NRC will not consider granting an exemption to its regulations unless special circumstances are present. DEK believes that special circumstances are present as discussed below.

1. Application of the regulation in the particular circumstances would not serve the underlying purpose of the rule or is not necessary to achieve the underlying purpose of the rule. (10 CFR 50.12(a)(2)(ii))

The underlying purpose of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) is to provide reasonable assurance that adequate funds will be available for decommissioning of power reactors within 60 years of cessation of operations.

Strict application of the rule would prohibit withdrawal of funds from the Trust for activities associated with irradiated fuel management until the KPS license has been terminated.

However, the site-specific decommissioning cost analysis (discussed above) demonstrates that adequate funds are available in the Trust to complete all decommissioning activities, including license termination, irradiated fuel management, and site restoration. The analysis projects that at the end of decommissioning activities in 2073, about $52.1 million (using a 0.0% escalation rate and a 2.0% Fund Growth Rate on remaining funds) will remain in the Trust.

Serial No.13-074 Page 8 of 12 In addition, the Parent Support Agreement would provide another $60 million if needed.

The 30-day notification provision in 50.75(h)(1)(iv) was not intended to duplicate other reporting requirements that would exist after a plant commences decommissioning.

During the rulemaking establishing this requirement, a commenter observed that licensees that have complied with the requirements of 10 CFR 50.82(a)(4) regarding submittal of a PSDAR and control disbursements in accordance with the provisions of 10 CFR 50.82(a)(6), (a)(7) and (a)(8) should be exempt from further restrictions on disbursements (67 Fed. Reg. 78,332, 78,335 (Dec. 24, 2002)). The NRC agreed with the comment, because requiring notification in such circumstances would not provide any additional assurance that funding is available and would duplicate notification requirements in 50.82. If the NRC grants the requested exemption allowing DEK to use its Trust for irradiated fuel management, the same consideration would justify dispensing with the 30-day notification requirement as well.

The PSDAR and Irradiated Fuel Management Plan identify the intended disbursements, and the annual reporting requirements recently promulgated in 10 CFR 50.82(a)(4)(v) and (vi) will allow continual NRC oversight of the status of the Trust. Applying the 30-day advance notification requirement in 50.75(h)(1)(iv) to disbursements for irradiated management activities would duplicate these other reporting requirements and is not necessary to achieve the underlying purposes of this rule.

Therefore, since the underlying purposes of the rules would be achieved by allowing DEK to use the Trust to fund the activities as discussed in its updated Irradiated Fuel Management Plan and PSDAR, the special circumstances required by 10 CFR 50.12(a)(2)(ii) exist.

2. Compliance would result in undue hardship or other costs that are significantly in excess of those contemplated when the regulation was adopted, or that are significantly in excess of those incurred by others similarly situated. (10 CFR 50.12(a)(2)(iii))

The NRC did not intend to prevent the use of these funds solely because they are commingled, and to do so would create an unnecessary financial burden without any corresponding safety benefit. The adequacy of Trust to cover the cost of activities associated with the different elements of decommissioning (including the irradiated fuel management) is supported by a site-specific decommissioning cost analysis.

If DEK cannot use its Trust for irradiated fuel management activities, it would be forced to provide additional funding that would not be recoverable from the Trust for nearly 60 years, or to modify its decommissioning methods. Either outcome would impose an unnecessary and undue burden in excess of that contemplated when the regulation was adopted.

Therefore, compliance with the rule would result in an undue hardship or other costs that are significantly in excess of those contemplated when the regulation

Serial No.13-074 Page 9 of 12 was adopted, or that are significantly in excess of those incurred by others similarly situated and the special circumstances required by 10 CFR 50.12(a)(2)(iii) exist.

3. The exemption would result in benefit to the public health and safety that compensates for any decrease in safety that may result from the grant of the exemption. (10 CFR 50.12(a)(2)(iv))

The proposed exemptions would allow the use of the Trust for irradiated fuel management activities in accordance with the KPS updated Irradiated Fuel Management Plan and PSDAR. Adequate funds are available in the Trust to complete all activities associated with license termination, irradiated fuel management, and site restoration. There is no decrease in safety associated with the Trust being used to fund activities associated with irradiated fuel management. The exemptions would allow KPS to manage irradiated fuel in accordance with the updated Irradiated Fuel Management Plan and PSDAR. As discussed in the PSDAR, DEK plans to use a SAFSTOR method of decommissioning.

This method meets the objective of maintaining radiation exposures as low as reasonably achievable pursuant to 10 CFR 20.1101(b) by allowing for the natural decay of radioactively contaminated material prior to beginning radiological decommissioning. This method also reduces the quantity of contamination and radioactivity that must be disposed of at low-level and high-level waste sites during decontamination and dismantlement of the facility.

Therefore, since granting the exemption would result in benefit to the public health and safety and would not result in a decrease in safety, the special circumstances required by 10 CFR 50.12(a)(2)(iv) exist.

IV.

ENVIRONMENTAL CONSIDERATION The proposed exemptions meet the eligibility criterion for categorical exclusion set forth in 10 CFR 51.22(c)(25), because the proposed exemption involves: (i) no significant hazards consideration; (ii) no significant change in the types or significant increase in the amounts of any effluent that may be released offsite; (iii) no significant increase in individual or cumulative occupational radiation exposure; (iv) no significant construction impact; (v) no significant increase in the potential for consequences from radiological accidents; and (vi) the requirements from which the exemption is sought involve surety, insurance or indemnity requirements or other requirements of an administrative nature.

Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared in connection with the proposed exemptions.

Serial No.13-074 Page 10 of 12 No significant hazards consideration DEK has evaluated the proposed exemptions to determine whether or not a significant hazards consideration is involved by focusing on the three standards set forth in 10 CFR 50.92 as discussed below:

1. Do the proposed exemptions involve a significant increase in the probability or consequences of an accident previously evaluated?

The proposed exemptions would allow DEK to withdraw funds from the KIPS decommissioning Trust fund to conduct activities associated with irradiated fuel management in accordance with the KIPS PSDAR and updated Irradiated Fuel Management Plan.

The proposed exemptions have no effect on plant structures, systems, and components (SSCs) and no effect on the capability of any plant SSC to perform its design function. The proposed exemptions would not increase the likelihood of the malfunction of any plant SSC. The proposed exemptions would have no effect on any of the previously evaluated accidents in the KPS Updated Safety Analysis Report.

Use of funds in the Trust as allowed under the exemptions will not affect the probability of occurrence of any previously analyzed accident. The proposed exemptions do not change the requirements pertaining to irradiated fuel management.

Therefore, the proposed exemptions do not involve a significant increase in the probability or consequences of an accident previously evaluated.

2. Do the proposed exemptions create the possibility of a new or different kind of accident from any accident previously evaluated?

The proposed exemption does not involve a physical alteration of the plant. No new or different type of equipment will be installed and there are no physical modifications to existing equipment associated with the proposed exemption.

Similarly, the proposed exemption would not physically change any structures, systems, or components involved in the mitigation of any accidents. Thus, no new initiators or precursors of a new or different kind of accident are created.

Furthermore, the proposed exemption does not create the possibility of a new accident as a result of new failure modes associated with any equipment or personnel failures. No changes are being made to parameters within which the plant is normally operated, or in the setpoints which initiate protective or mitigative actions, and no new failure modes are being introduced.

Therefore, the proposed exemptions do not create the possibility of a new or different kind of accident from any previously evaluated.

Serial No.13-074 Page 11 of 12

3. Do the proposed exemptions involve a significant reduction in a margin of safety?

The proposed exemptions do not alter the design basis or any safety limits for the plant. The proposed exemptions do not impact station operation or any plant SSC that is relied upon for accident mitigation.

Therefore, the proposed exemptions do not involve a significant reduction in a margin of safety.

Based on the above, DEK concludes that the proposed exemptions present no significant hazards consideration, and, accordingly, a finding of "no significant hazards consideration" is justified.

(ii)

There is no significant change in the types or significant increase in the amounts of any effluent that may be released offsite.

There are no expected changes in the types, characteristics, or quantities of effluents discharged to the environment associated with the proposed exemption.

There are no materials or chemicals introduced into the plant that could affect the characteristics or types of effluents released offsite.

In addition, the method of operation of waste processing systems will not be affected by the exemptions. The proposed exemptions will not result in changes to the design basis requirements of SSCs that function to limit or monitor the release of effluents.

All the SSCs associated with limiting the release of effluents will continue to be able to perform their functions. Therefore, the proposed exemptions will result in no significant change to the types or significant increase in the amounts of any effluents that may be released offsite.

(iii) There is no significant increase in individual or cumulative occupational radiation exposure.

The exemptions would result in no expected increases in individual or cumulative occupational radiation exposure on either the workforce or the public. There are no expected changes in normal occupational doses.

Likewise, design basis accident dose is not impacted by the proposed exemption.

(iv) There is no significant construction impact.

There are no construction activities associated with the proposed exemptions.

(v) There is no significant increase in the potential for consequences from radiological accidents.

See the no significant hazards considerations discussion in item 1 above.

Serial No.13-074 Page 12 of 12 (vi) The requirements from which exemptions are sought involve surety, insurance or indemnity requirements or other requirements of an administrative nature.

The underlying purpose of the requirements from which exemptions are sought is to provide reasonable assurance that adequate funds will be available for decommissioning of power reactors within 60 years of cessation of operations.

These requirements provide surety for decommissioning funding.

V.

CONCLUSION Pursuant to the provisions of 10 CFR 50.12, "Specific exemptions," Dominion Energy Kewaunee, Inc. (DEK) is requesting exemptions 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) for Kewaunee Power Station (KPS). The proposed exemptions would allow DEK to use funds from the KPS decommissioning trust fund for irradiated fuel management, consistent with the KPS updated Irradiated Fuel Management Plan and PSDAR, and make such disbursements in the same manner as withdrawals for radiological decommissioning.

Granting these exemptions will be consistent with the purposes underlying NRC decommissioning regulations as it: (1) would not foreclose release of the site for possible unrestricted use; (2) would not result in significant environmental impacts not previously reviewed by the NRC; and (3) would not undermine the existing and continuing reasonable assurance that adequate funds will be available for decommissioning.

The requested exemptions are authorized by law, will not present an undue risk to the public health and safety, and are consistent with the common defense and security, and special circumstances are present as set forth in 10 CFR 50.12(a)(2).

References

1. Letter from Daniel G. Stoddard (DEK) to NRC Document Control Desk, "Certification of Permanent Cessation or Power Operations," dated February 25, 2013.

2. Letter from Daniel G. Stoddard (DEK) to NRC Document Control Desk, "Update to Irradiated Fuel Management Plan Pursuant to 10 CFR 50.54(bb)," dated February 26, 2013.

3. Letter from Daniel G. Stoddard (DEK) to NRC Document Control Desk, "Post-Shutdown Decommissioning Activities Report" (PSDAR), dated February 26, 2013.

4. Letter from J. Alan Price (DEK) to NRC Document Control Desk, "Report Pursuant to 10 CFR 50.54(bb)," dated December 19, 2008.