ML13331B009

Requests Partial Exemption from Requirements of 10CFR171.15. Surcharge Levied in Addition to 10CFR171 License Fees Should Not Exceed Listed Amount

ML13331B009
Person / Time
Site:	San Onofre
Issue date:	02/08/1988
From:	Baskin K, Cotton G SAN DIEGO GAS & ELECTRIC CO., SOUTHERN CALIFORNIA EDISON CO.
To:	NRC COMMISSION (OCM)
Shared Package
ML13331B008	List: ML13331B007 ML13331B009
References
TAC-67199, NUDOCS 8802160074
Download: ML13331B009 (7)

Text

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of SOUTHERN CALIFORNIA EDISON COMPANY and SAN DIEGO GAS & ELECTRIC COMPANY Docket No. 50-206 (San Onofre Nuclear Generating License No. DPR-13 Station, Unit No. 1)

APPLICATION FOR PARTIAL EXEMPTION Pursuant to 10 CFR Section 171.11, Southern California Edison Company ("SCE") and San Diego Gas & Electric Company ("SDG&E") hereby apply for a partial exemption from the requirements of Section 171.15 of the Commission's rules and regulations.

Supporting Statement In support of this application, SCE and SDG&E submit the following:

1. SCE and SDG&E are California corporations and are "electric utilities" as defined in 10 CFR Section 2.4(s).

SCE and SDG&E are the holders of Provisional Operating License No. DPR-13, dated March 27, 1967.

2.

Section 171.15 imposes an annual license fee on power reactor licensees, which for fiscal 1988 is projected to e802160074 880208 PDR ADOCK 05000206 P

PDR

-1

be $1,405,000. This fee is in addition to the Commission's Part 170 license fees, which are use related. See Annual Fee for Power Reactor Operating Licenses and Conforming Amendment, 51 Fed. Reg. 33,224 (September 18, 1986) (Final Rule). 1 Section 171.11 provides for exemptions from that annual fee. The exemption provision states as follows:

An exemption under this provision may be granted by the Commission taking into consideration the following factors:

(a) Age of the reactor; (b) Size of the reactor; (c) Number of customers in rate base; (d) Net increase in KWh cost for each customer directly related to the annual fee assessed under this part; and (e) Any other relevant matter which the licensee believes justifies the reduction of the annual fee.

These criteria are addressed in the paragraphs that follow:

3. San Onofre Nuclear Generating Station, Unit 1

("San Onofre") is a 436 net MWe pressurized water reactor that began operation on June 10, 1967.

San Onofre is among the oldest operating commercial nuclear power plants 1/ SCE and SDG&E are seeking judicial review of the final rule imposing the Part 171 license fee, and submission of this exemption application is not intended to waive any of SCE and SDG&E's objections to the rule.

in the United States. San Onofre's operating license expires in 2004.

4. Aside from being among the oldest commercial reactors, San Onofre is among the smallest commercial nuclear power plants in the United States.

5. SCE and SDG&E serve approximately 3,500,000 and 940,000 customers respectively. It is acknowledged that the imposition of the annual license surcharge has a minimal effect on a per customer basis.

6. A surcharge of $1,405,000 in license fees will increase San Onofre's power costs by over one third of a mil per kilowatt hour (KWH).

Please note that this fee is in addition to our current Part 170 license fees of approximately $125,000 per year, based upon the most recent 12 month billing period.

7. An increase of this magnitude is unreasonable for such a small reactor. The impact on San Onofre power costs will be approximately twice as great as it will be for a typical large, current vintage plant.

8. SCE and SDG&E have spent over $550,000,000 in upgrades since the start of San Onofre operation in 1967.

An increase of $1,405,000 in annual license fees on a plant the size of San Onofre will further hurt its economic viability. The intent of the Section 171.11 exemption provision is to avoid such adverse impacts on the operators of small, older reactors. See 51 Fed. Reg.

at 33,227, col. 2.

9. Furthermore, because of its small size, San Onofre poses less of a potential hazard than most other commercial plants (inventory of fission product and source term is proportional to size).

10.

The different status of small, older generation plants has been recognized in other regulatory contexts as well, e.g., the Commission's property insurance and backfitting rules (10 CFR §§ 50.54(w) and 50.109). Simply put, because kilowatt hour production for small, older generation plants is an order of magnitude lower than that of more recent plants, the different cost-benefit relationship of various expenses, including the new Part 171 fees, must be recognized.

11.

Therefore, SCE and SDG&E submit that a surcharge of

$1,405,000 in addition to the current license fees (approximately $125,000 per year) is unreasonable for the San Onofre plant, which has a smaller kilowatt hour production. SCE and SDG&E request that the Part 171 fee imposed on it not exceed $642,000. This fee is determined by a calculational method similar to that used by the NRC in determining an appropriate annual fee for Yankee Nuclear Power Station (See TABLE 1 attached).

We feel that this amount should be more than adequate to recognize the benefit to SCE and SDG&E of the various costs that are to be recovered through the Part 171 fees.

12. In addition, repeating the exemption application process each year would be costly and time consuming for the Staff as well as SCE and SDG&E. For that reason, the partial exemption requested here should be made permanent. The facts that support this application will not change in any way that would undermine the validity of the exemption.

13.

Finally, SCE and SDG&E would welcome the opportunity to meet at the Staff's convenience to discuss this application; if additional information is needed in connection with the application, please contact the undersigned.

Conclusion Based upon the foregoing, SCE and SDG&E respectfully request that they be granted a permanent, partial exemption from the requirements of 10 CFR Section 171.15. It is SCE and SDG&E's position that the surcharge levied in addition to our Part 170 license fees should not exceed $642,000.

Respectfully submitted, SOUTHERN CALIFORNIA EDISON COMPANY By Kenneth P. Baskin Vice President SAN DIEGO GAS & ELECTRIC COMPANY B

Gar D. #eon Senior e President Dated:

February 8,

1988 TABLE 1 Comparison of Adjusted NRC License Fees for SONGS 1 and Yankee-Rowe Methods Used To Determine Adjusted Fee:

Yankee-Rowe SONGS 1

1.

Thermal Megawatt 600 MWth x $1,405K*

1347 MWth x $1,405K Rating Ratio 2671 MWth 2671 MWth (Unit/Average Unit)

= $316K

= $709K

2.

Comparable Impact of

$231K

$575K Annual Fee on Plant Kilowatt Hour Costs

3.

Adjusted Annual Fee -

$274K

$642K Average of Methods 1 and 2 These results are based upon a recalculation of the Yankee-Rowe exemption using the projected fiscal 1988 Part 171 annual fee of $1,405,000.