ML14156A220
| ML14156A220 | |
| Person / Time | |
|---|---|
| Site: | Dresden, Oyster Creek |
| Issue date: | 05/19/2014 |
| From: | Domeyer T Exelon Corp |
| To: | Joel Wiebe Division of Operating Reactor Licensing |
| References | |
| Download: ML14156A220 (61) | |
Text
NRR-PMDAPEm Resource From: Domeyer, Tamra:(BSC) [Tamra.Domeyer@exeloncorp.com]
Sent: Monday, May 19, 2014 4:37 PM To: Wiebe, Joel Cc: Mozafari, Brenda; Tate, Travis
Subject:
FW: Exelon Enforcement Conference Slides Attachments: Final 04-30-2013 PEC Presentation.pptx Joel:
Thank you for providing Exelon with an opportunity to propose redactions prior to making Exelon Generations presentation public. All of the redactions pertain to personal information that Exelon Generation requests be redacted for personal privacy under 10 CFR 2.390(a)(6).
Thank you.
Tami Tamra Domeyer Associate General Counsel Exelon Nuclear 4300 Winfield Road Warrenville, Illinois 60555 Office: 630.657.3753 l Mobile: 312.622.2312 tamra.domeyer@exeloncorp.com www.exeloncorp.com From: Wiebe, Joel [1]
Sent: Wednesday, May 07, 2014 11:56 AM To: Domeyer, Tamra:(BSC)
Subject:
Exelon Enforcement Conference Slides
- Tami, The NRC has received a request (at this point, I do not know who made the request) to make the attached presentation slides public and we are considering doing so.
Should any information in the attached slides be withheld? If so, could you provide a redacted version?
Joel 1
Hearing Identifier: NRR_PMDA Email Number: 1339 Mail Envelope Properties (357227E21471CD4D92F025B61B5C11E62629BA)
Subject:
FW: Exelon Enforcement Conference Slides Sent Date: 5/19/2014 4:36:43 PM Received Date: 5/19/2014 4:36:57 PM From: Domeyer, Tamra:(BSC)
Created By: Tamra.Domeyer@exeloncorp.com Recipients:
"Mozafari, Brenda" <Brenda.Mozafari@nrc.gov>
Tracking Status: None "Tate, Travis" <Travis.Tate@nrc.gov>
Tracking Status: None "Wiebe, Joel" <Joel.Wiebe@nrc.gov>
Tracking Status: None Post Office: exchm-ccc-21.exelonds.com Files Size Date & Time MESSAGE 1086 5/19/2014 4:36:57 PM Final 04-30-2013 PEC Presentation.pptx 1383446 Options Priority: Standard Return Notification: No Reply Requested: No Sensitivity: Normal Expiration Date:
Recipients Received:
Response to Apparent Violation Exelon Decommissioning Funding Pre-decisional Enforcement Conference Presentation April 30, 2013
Agenda Introduction - Joe Grimes Discussion of Facts - Adam Levin & Jeff Dunlap Review By Independent Expert - Chuck Thebaud Safety Significance/Corrective Actions - Pam Cowan Conclusion - Joe Grimes Appendix
Introduction Exelon understands:
- The importance p of accurate reporting p g and forthright g communications with the NRC.
- The NRC investigation preliminarily concluded that four Exelon Decommissioning Funding Status (DFS) reports are inaccurate.
- The matter at issue here is reporting. The NRC does not take issue with ith the th manner in i whichhi h E Exelon l calculated l l t d the th values l in i its it reports.
t (Jan. 31, 2013 NRC letter to Exelon, at 2 n. 2.)
Exelon Pre-decisional Enforcement Conference Presentation
Introduction Three basic questions arise:
1 Why
- 1. Wh did Exelon E l use the th reporting ti g methodology th d l g it used?
- 2. Was Exelons methodology consistent with the regulations?
- 3. If not, did Exelon submit reports knowing that they were inconsistent with the regulations?
Exelon Pre-decisional Enforcement Conference Presentation
Introduction The Answers:
- 1. We believe that the reporting methodology and the contents of our reports were specifically authorized by the regulations and guidance.
2 NRC acceptance of Exelon
- 2. Exelonss filings supported our belief that our reports were consistent with the regulations.
- 3. No one at Exelon who was involved in the preparation, review, and submittal of the reports doubted the completeness and accuracy of our submittals.
A knowledgeable former NRC Staff subject matter expert agrees that our reports were consistent with both the letter and the purpose off the h regulations.
l i Exelon Pre-decisional Enforcement Conference Presentation
Factual Discussion An Overview of Exelon Submittals and Correspondence with the NRC Introduction - Joe Grimes Discussion of Facts - Adam Levin & Jeff Dunlap Review By Independent Expert - Chuck Thebaud Corrective Actions/Safety Significance - Pam Cowan Conclusion - Joe Grimes Appendix
The Issue
> Amount Minus the credit = Funds Required Formula Cost Site-specific Post-Shutdown Funds Estimated Amount Cost Estimate Credit to be Required per 50.75(c) Amount Dresden $448.5 million N/A ($21.5 million) $427.0 million Unit 2 Oyster Creek $416.1 million $441.6 million ($71.5 million) $370.1 million
- Blue reflects value currentlyy expected p byy NRC Staff.
- Green reflects value reported by Exelon in its 2005 DFS report.
- Red reflects credit deducted from cost amounts.
Exelon Pre-decisional Enforcement Conference Presentation
Overview of Regulatory Reporting Requirements (2009 version)
- The reporting requirement is in 10 CFR 50.75(f)(1), which requires that the information in the report must include:
- the amount of decommissioning funds estimated to be required under 10 CFR 50.75(b) and (c) ; and
- the amount [of decommissioning funds] accumulated to the end of the calendar year preceding the date of the report (i.e., the trust fund balance).
- 10 CFR 50.75(b)(3) requires that the amount must be covered by one or more of the methods described in paragraph (e), which allows the 2% post-sshutdown utdo credit. c ed t Section 50.75(b) has four subparts, including (b)(3) which allows for the post-shutdown post shutdown credit by reference to (e).
Exelon Pre-decisional Enforcement Conference Presentation
How Did We Perform the Calculations for the 2005 Decommissioning Fund Status (DFS) Report?
E Example:l DresdenD d Unit U it 2 (F (Formula l C Costt AAmount) t)
Formula Cost Less The Post- Equals The Amount Amount Shutdown Credit Of Funds Estimated per 50.75(c) To Be Required Under 50.75(b) and (c)
Dresden Unit 2 $448.5 million ($21.5 million) $427.0 million Calculated using Earnings from date Amount of money the formula in of shutdown for 7 required on the date 50.75(c) years (less of shutdown to pay expenditures) - for decommissioning 50.75(b)(3) and activities 50.75(e)
Exelon Pre-decisional Enforcement Conference Presentation
How Did We Perform the Calculations for the 2005 Decommissioning Fund Status (DFS) Report?
Example: Oyster Creek (Site Specific)
Formula Cost Site-Specific Less the Post- Equals the Amount Amount Cost Estimate Shutdown Credit of Funds Estimated per 50.75(c) (If Greater Than (from the site- to be Required Formula Cost specific cost Under 50.75(b) and Amount) estimate) (c)
Oyster Creek $416.1 million $441.6 million ($71.5 million) $370.1 million Calculated Escalated to Earnings from date Amount of money using the 2004 year end of shutdown required on the date formula in dollars through 23 Year of shutdown to pay 50 75( )
50.75(c) SAFSTOR (less (l f decommissioning for d i i i expenditures) - activities 50.75(b)(3) and 50.75(e)
Exelon Pre-decisional Enforcement Conference Presentation
1998 Rulemaking
- Imposed biennial reporting requirement regarding status of decommissioning funding.
-Report prior year trust fund f balance as off 12/31.
12 31
-Report amount estimated to be required for decommissioning activities.
This amount is the certification amount for which financial assurance is required.
- Key requirement is to demonstrate sufficient funds for decommissioning deco ss o g at the t e timet e termination te at o of o operations ope at o s iss expected (shutdown).
- Limited guidance provided in NUREG-1577.
Licensees are to report the amount estimated to be required as of the date of shutdown to pay for decommissioning activities in the future.
Exelon Pre-decisional Enforcement Conference Presentation
NUREG-1577, Rev. 1 (1999)
Exelon Pre-decisional Enforcement Conference Presentation
2002 Amendments to Section 50.75
- Section 50.75 was amended effective December 24, 2003 to clarify the post-shutdown credit allowed under 50.75(e).
Before shutdown
-Licensees may take credit for projected earnings at the rate of a two percent annual real rate of return during operations.
After shutdown
-Following shutdown, licensees may also take credit using the two percent real rate of return:
- through the period of decommissioning (safe storage, final dismantlement, license termination) if reasonable assurance is based on a site specific estimate (1998 rule); or
- for the first seven years after shutdown, recognizing both cash expenditures and earnings, if reasonable assurance is based on the formula f cost amount (2002 2002 rule).
Exelon Pre-decisional Enforcement Conference Presentation
Application of New Rule in Exelons 2005 Decommissioning g Funding g Status Report p
- For operating plants not using a site specific estimate, Exelon based financial assurance on the formula cost amount contained in Section 50.75(c).
- Consistent with the new rule, rule we took the formula cost amount and, in accordance with 50.75(e)(1), applied tthe e authorized aut o ed two t o percent pe ce t post-shutdown post s utdo credit c ed t for o
seven years, recognizing cash expenditures and earnings.
- We reported the amount that reflected the formula cost amount less the post-shutdown credit.
Exelon Pre-decisional Enforcement Conference Presentation
Application of New Rule in Exelons 2005 Decommissioning Funding Status Report
- For the four units that were already shutdown and one operating i unit i ((within i hi fi five years off the h endd off lilicensed d
life), we based financial assurance on site-specific cost estimates.
estimates
- Consistent with 50.75(e)(1), we applied the authorized post shutdown credit to these site-specific post-shutdown site specific cost estimates.
- We reported the amount that reflected the site-specific site specific cost estimate less the post-shutdown credit.
Exelon Pre-decisional Enforcement Conference Presentation
Why Did Exelon Take the Credit on the Cost Side?
- Section 50.75(e) allows licensees to take certain credits, but it does not specify how those credits should be taken.
- What Wh we did k know iis that: h
- Section 50.75(f)(1) makes clear that licensees must report the amount accumulated to the end of the calendar year preceding the date of the report (i.e., the trust fund balances), so the credit cannot be taken on the trust fund balance in the report.
- Licensees are required to report the amount of funds estimated to be required as of the date of shutdown.
- So, consistent with NUREG-1577, we applied the authorized post-shutdown h td credit dit tot theth formula f l costt amountt or to t the th site-specific it ifi cost estimate, yielding the amount of decommissioning funds estimated to be required under 10 CFR 50.75(b) and (c) and to be reported d under d sub-sectionb i 50 50.75(f)(1).
75(f)(1)
Exelon Pre-decisional Enforcement Conference Presentation
How Was This Explained In The 2005 DFS Report?
- The DFS report transmittal letter stated that:
-the values reported in Attachment 1 reflect the amount of decommissioning funds for the operating p g reactors estimated to be required q p pursuant to 10 CFR 50.75(b) and (c).
- In Attachment 1 to the DFS report, Exelon included footnotes explaining that:
-the amount of funds estimated to be required was determined in accordance with 10 CFR 50.75(b) and the applicable formulas in 10 CFR 50.75(c).
-for for Oyster Creek, footnote (4) explained that the site-specific site specific estimate is is
$441.6 million before adjusting for growth of the trust funds through the decommissioning period.
10 CFR 50.75(b)(3) provides that the amount of financial assurance must be covered co e ed using us g a method et od in 10 0 CFR C 50.75(e) 50 5(e) - tthe e regulations egu at o s that t at specifically spec ca y authorize post-shutdown credits.
Exelon Pre-decisional Enforcement Conference Presentation
NRC Response to Exelons 2005 DFS Report
- It was NRC Staffs practice to independently calculate the formula cost amount pursuant to 10 CFR 50.75(c).
-This was documented later in LIC-205.
- Staff does not need information from Exelon to perform the calculation in 50.75(c).
- We knew the NRC staff would recognize that the amounts Exelon reported are not the same as the values established using only 50.75(c).
- We knew the NRC staff was aware of the new post post-shutdown shutdown credit allowed when using the formula cost amount in 50.75(c).
Exelon Pre-decisional Enforcement Conference Presentation
NRC Response To Exelons 2005 DFS Report
- After the NRC completed its analysis, we had discussions about the calculations and values reported and the rate of return applied to Exelons formerly regulated units in Illinois.
- On March 30, 2006, the NRC issued SECY-06-0073, a report to the Commission on the status of decommissioning funding for all power reactors.
- Staff took issue with Exelons use of the higher rate of return during operation for the formerly regulated units in Illinois and required further action for 3 Illinois sites.
- Nevertheless, the Staff concluded that for all remaining sites, including the remaining Exelon sites, when earnings credits and scheduled collections are factored in, decommissioning funding assurance now equals or exceeds the latest available (NRC determined) minimum decommissioning funding estimate (p. 4).
NRC Staff performed its own calculations to determine the 50.75(c) amounts and had to understand the values reported by Exelon.
Th NRC S The Staffff accepted dE Exelons l reported d values.
l Exelon Pre-decisional Enforcement Conference Presentation
2006 Decommissioning Funding Status Report
-For some plants, the formula cost amounts were reported inadvertently.
- In addition, the 2006 transmittal letter explained:
-To address the NRCs concerns arising from the 2005 DFS report, Exelon committed to provide site-specific cost estimates for the 3 Illinois sites at issue.
-Exelon explained that these estimates will be greater than the amount specified in 10 CFR 50.75(c) and will take credit for projected earnings on the external sinking g funds using g a 2.0% annual real rate of return through g
the decommissioning period.
Exelon did not receive any comments from the NRC on the 2006 DFS Report. Report Exelon Pre-decisional Enforcement Conference Presentation
Exelonss February 2007 RAI Responses Exelon
- On December 18, 2006, Exelon submitted site-specific SAFSTOR (60 years) estimates for Braidwood, Byron, and LaSalle.
- The Th NRC iissued daR Requestt ffor Additi Additionall Information I f ti (RAI) to t
Exelon, seeking information about whether the trust funds for Braidwood and Byron were sufficient to assure adequate funding for decommissioning.
- Exelon and NRC Staff held a telephone conference on February 22 2007 tto di 22, discuss th the methodology th d l ffor calculations.
l l ti Exelon Pre-decisional Enforcement Conference Presentation
Exelons February 2007 RAI Responses Our response is critical in considering enforcement action.
- We responded to the NRC NRCss RAI on February 27, 27 2007.
2007
- This was the first time we took post-shutdown credit for an operating plant based on the use of a 60 year SAFSTOR period described in a site-specific study.
- We provided a year year-by-year by year itemization of expenditures from the trust fund, starting at plant shutdown and going through the completion of decommissioning, approximately 60 years later, for Byron, Braidwood, and LaSalle.
Exelon Pre-decisional Enforcement Conference Presentation
Exelons February 2007 RAI Responses Braidwood 1 Amount
($ millions)
Formula cost amount $380.3 Site-specific cost estimate $595.3
[. . .]
Post-shutdown credit ($298.9)
Amount reported in 2007 $296.4 DFS report (site specific cost minus ppost-shutdown credit))
12/31/06 trust fund $297.4 balance + 2% earnings to shutdown in 2026 Actual trust fund balance as $204.1 off 12/31/06 Exelon Pre-decisional Enforcement Conference Presentation
Exelons February 2007 RAI Responses
- The Cash Flows (expenditures) shown on the previous slide are abbreviated for discussion purposes.
- The 2007 RAI Response shows:
-Below the expenditures, we identified the total estimated cost of decommissioningg ((all the expenditures p added together).
g )
-We adjusted the total costs by deducting for the post-shutdown credit, which results in the Funding Required at Shutdown.
-We also reported p the total amount of Fundingg Available at Shutdown, which reflected the estimated value of the trust fund at the time of shutdown based on the trust fund balance as of year end 2006 with projected earnings at the rate of 2% to the date of shutdown.
-The Funding Available at Shutdown exceeded the Funding Required at Shutdown.
Exelon Pre-decisional Enforcement Conference Presentation
2007 Decommissioning Funding Status Report
- The itemization of costs, estimated revenue, and most importantly, the clear identification of the difference between the total estimated cost of decommissioning and the Funding Funding Required at Shutdown in Exelons RAI responses is critical.
- Exelons methodology, terminology and specific calculations were provided in full to the NRC in early 2007.
- Exelon used that same methodology in its 2005, 2006, 2007, and 2009 reports reports.
- The values reported in Exelons March 21, 2007 DFS report as the amount of decommissioningg funds estimated to be required q for Braidwood, Byron, and LaSalle are the same as the Funding Required at Shutdown in its February 27, 2007 RAI Responses.
Exelon Pre-decisional Enforcement Conference Presentation
Comparison of Exelons February 2007 RAI R
Responses and d Its It 2007 DFS R Reportt V Values l
RAI Responses March 21, 2007 DFS Report Februaryy 27,, 2007 Attachment 1 Amount of Funding Required at Decommissioning Funds Shutdown Values Estimated To Be Required
($ thousands) ($ millions)
Braidwood Unit 1 296,449 296.4 Braidwood Unit 2 303,206 303.2 B
Byron U Unit it 1 296 086 296,086 296 1 296.1 Byron Unit 2 299,970 300.0 LaSalle Unit 1 332 895 332,895 332 9 332.9 LaSalle Unit 2 327,489 327.5 The values reported in March 2007 were fully explained in the RAI Response.
Exelon Pre-decisional Enforcement Conference Presentation
April 24, 2007 NRC Acceptance of Exelons Approach Explained In Its 2007 RAI Responses Exelon Pre-decisional Enforcement Conference Presentation
Acceptance of Exelon Exelonss Certification Amounts
- Based on its review and acceptance of Exelons February 27, 2007 RAI Responses Responses, the NRC clearly understood Exelon Exelonss calculations and methodology for determining the amount estimated to be required at shutdown.
- On November 14, 2007, the NRC issued SECY-07-0200, which summarized the staffs review of all of the biennial decommissioningg status reports p submitted in March 2007.
-The staff identified no concerns with the decommissioning funding assurance levels for the 104 operating nuclear power reactors.
Exelon believed that it was accurately reporting the information required for the NRC to make a finding of reasonable assurance, which is the purpose of the regulation.
Exelon Pre-decisional Enforcement Conference Presentation
2009 Decommissioning Funding Status Report
- In September 2008, Jeff Dunlap began assisting Adam Levin with the p preparation p of the DFS reports.
p
- We prepared the 2009 report using the same methodology and reporting p g conventions as p previouslyy employed p y and accepted by the NRC.
Exelon reasonably believed that the reporting method used in its 2007 DFS report would be acceptable for use in its 2009 DFS report.
Exelon Pre-decisional Enforcement Conference Presentation
Explanation In Exelons 2009 DFS Report
- Exelons 2009 Report provided the same explanations used in prior reports.
- Using the same reporting methodology, the 2009 DFS report transmittal letter identified projected funding shortfalls at Braidwood Byron, Braidwood, Byron LaSalle, LaSalle and Limerick. Limerick
-The NRC also identified a shortfall for Clinton, based on the formula cost amount,, as opposed pp to the site-specific p estimate relied upon p byy Exelon.
- The downturn in the financial markets in late-2008 caused these h units i to h have projected j d shortfalls h f ll in i d decommissioning i i i funding assurance.
Exelon Pre-decisional Enforcement Conference Presentation
RAI Responses Following 2009 DFS Report
- As requested, on July 29, 2009, Exelon provided the NRC with a Decommissioning Funding Plan, describing how it would achieve reasonable assurance for decommissioning the affected units.
- The NRC Staff issued multiple RAIs following Exelons submission of its 2009 DFS Report and July 29, 2009 Plan.
Plan
- Exelons 2009 DFS Report, July 29, 2009 Decommissioning Funding Plan, Plan and the associated site-specific cost estimates and RAI Responses all relied upon the methodology approved by the NRC in its April 24, 2007 letter.
Exelon Pre-decisional Enforcement Conference Presentation
August 27, 2009 Clinton Site-Specific Estimate Clinton Amount
($ millions)
Formula cost $576.6 amount Site-specific $798.7
[. . .] cost estimate Post-shutdown ($389.2) credit Amount $409.5 Estimated to Be Required at Shutdown 7/31/09 trust $450.6 fund balance +
2% earnings to shutdown Trust fund $320.6 balance as of 7/31/09 Exelon Pre-decisional Enforcement Conference Presentation
Exelons Site-Specific Cost Estimate for Clinton
- On August 27, 2009, Exelon submitted its site-specific cost estimate for Clinton to current NRC Staff.
-This submission highlighted, once again, Exelons application of the post-shutdown credit.
-The submittal provided a site-specific, year-by-year itemization of expenditures for Clinton, less the post-shutdown credit (also referred to as the decommissioningg p period credit),
), from shutdown through g the completion of decommissioning.
-The submittal clearly identified the post-shutdown credit (decommissioning period credit) used to calculate the amount estimated to be required as of July 31, 2009.
-The credit was based upon a 2% real rate of return and the number of years between shutdown and the year of the expenditure.
Exelon Pre-decisional Enforcement Conference Presentation
NRC Current Staffs December 10, 2009 Acceptance of Clinton Site Site-SpecificSpecific Cost Estimate Exelon Pre-decisional Enforcement Conference Presentation
Summary
- We had a reasonable basis for believing that the DFS Reports and RAI Responses Exelon submitted were consistent with:
- the plain language of the regulations;
-the requirement to provide reasonable assurance;
-NUREG-1577; NUREG 1577; and
-the NRC Staffs repeated conclusions regarding compliance with the requirements of 10 CFR 50.75.
- The current Staffs expectations regarding the contents of the DFS Reports reflects a change from our experience with the prior reports.
-Exelon altered its reporting format for the 2011 DFS Report to be more consistent with the expectations of the current Staff reviewers.
reviewers Exelon Pre-decisional Enforcement Conference Presentation
Review By Independent Expert Introduction - Joe Grimes Discussion of Facts - Adam Levin & Jeff Dunlap Review By Independent Expert - Chuck Thebaud Corrective Actions/Safety Significance - Pam Cowan Conclusion - Joe Grimes Appendix
Robert Wood Report
- Robert S. Wood, a former senior NRC manager, reviewed Exelons 2005,, 2006,, 2007,, and 2009 DFS reports p ((and related documents).
- Mr. Wood was the principal author of the 1998 rule, which created the biennial reporting requirement and authorized the post-shutdown credit for plants using a site-specific estimate.
- Mr.
M Wood W d also l wrote t NUREG-1577 NUREG 1577 and d other th relevant l t documents.
- His views and conclusions deserve considerable weight. weight Exelon Pre-decisional Enforcement Conference Presentation
Key Observations on the Regulations Exelon Pre-decisional Enforcement Conference Presentation
Mr. Woods Conclusions (R
(Report at 9 9.))
(Report at 14.)
Exelon Pre-decisional Enforcement Conference Presentation
Mr. Woods Wood s Conclusion (Report at 15.)
Exelon Pre-decisional Enforcement Conference Presentation
Corrective Actions/Safety Significance Introduction - Joe Grimes Discussion of Facts - Adam Levin & Jeff Dunlap Review By Independent Experts - Chuck Thebaud Corrective Actions/Safety Significance - Pam Cowan Conclusion - Joe Grimes Appendix
Corrective Actions
- In June 2010, prior to the NRC investigation, Exelon initiated a Focused Area Self-Assessment (FASA) of its decommissioning reports.
-The FASA team included Exelon personnel from multiple disciplines.
-The review determined that all regulatory requirements had been met.
-The FASA team made recommendations for reporting that are more consistent with the current Staff Staffss expectations.
expectations
- Exelons March 2011 DFS report reflected changes made based on the recommendations from the self-assessment.
-The NRC has acknowledged that the 2011 report meets the Staffs current reporting expectations.
Exelon Pre-decisional Enforcement Conference Presentation
Corrective Actions
- Exelon has adopted practices for additional levels of internal review of the funding analysis and reports.
-Exelon procedures now require a preparer, an independent reviewer, and an approver.
-The decommissioning funding spreadsheet and calculations have been validated through Exelons Nuclear Software QA Program.
- Exelon E l has h identified id tifi d a computational t ti l issue i ffrom 2011 th thatt Exelon corrected internally and through an amendment to its 2011 report.
Exelon Pre-decisional Enforcement Conference Presentation
Exelons Reporting Had No Adverse Impact On Safety
- The methodology used for reporting did not impact:
-the th actual t l fundingf di status; t t
-the magnitude of any shortfalls identified; or
-Exelonss certification of financial assurance
-Exelon assurance.
- Therefore, no adverse impact to safety or funding assurance.
Exelon Pre-decisional Enforcement Conference Presentation
Conclusion Introduction - Joe Grimes Discussion of Facts - Adam Levin & Jeff Dunlap Review By Independent Expert - Chuck Thebaud Corrective Actions/Safety Significance - Pam Cowan Conclusion - Joe Grimes Appendix
Conclusion
- 1. Why did Exelon use this reporting methodology?
-WeWe read the regulations and NUREG-1577 NUREG 1577 to authorize a credit for post-post shutdown growth.
-Subtracting that credit from the greater of the formula amount or a site-specific estimate provided pro ided the amount amo nt of decommissioning funds f nds estimated to be required at shutdown, and we reported that amount.
-Our correspondence with NRC, and subsequent findings by NRC, supported our belief b li f th thatt our reports t fully f ll compliedli d with ith the th requirements.
i t
- 2. Was Exelons methodology consistent with the regulations?
-Yes - - and a knowledgeable retired NRC subject matter expert agrees.
- 3. If not, did Exelon submit reports knowing that they were inconsistent with the regulations?
Absolutely not.
-Absolutely Exelon Pre-decisional Enforcement Conference Presentation
Conclusion
- Although we dispute these allegations, we do not dispute the importance of accurate reporting and forthright communications with the NRC.
- This is a disagreement over the proper reporting convention.
Thi di This dispute t d does nott warrantt enforcement f t action.
ti
- Exelons reporting convention and format had no effect on the amount of financial assurance required or the amount and adequacy of financial assurance provided.
e o has
- Exelon as consistently co s ste t y provided p o ded reasonable easo ab e assurance assu a ce that t at adequate funds will be available for the decommissioning of its plants, which is the purpose of the rule.
Exelon Pre-decisional Enforcement Conference Presentation
Questions and Answers Exelon Pre-decisional Enforcement Conference Presentation
Appendix Introduction - Joe Grimes Regulatory Background - Pam Cowan Discussion of Facts - Adam Levin & Jeff Dunlap Review By Independent Expert - Chuck Thebaud Conclusion - Joe Grimes Appendix
Overview of Regulatory Requirements
- The purpose of the 50.75 reporting requirements is to provide reasonable assurance that funds will be available for decommissioning 10 CFR 50.75(a).
decommissioning. 50 75(a)
- Reasonable assurance consists of a series of steps as provided in paragraphs (b), (c), (e), and (f) of Section 50.75.
The requirement q is to provide p reasonable assurance. Reasonable assurance, in turn, requires consideration of the requirements in subsections (b), (c), (e), and (f).
Exelon Pre-decisional Enforcement Conference Presentation
Overview Of Regulatory Requirements
- 10 CFR 50.75(b)(1) requires that the report contain certification that financial assurance for decommissioning has been provided in an amount which may be more, more but not less, less than the amount amount resulting from the calculation in 10 CFR 50.75(c) (the formula cost amount).
- 10 CFR 50.75(b)(3) requires that the amount must be covered by one or more of the methods described in paragraph (e).
- 10 CFR 50 50.75(e)75( ) allows ll a credit di when h certifying, if i as ffollows:
ll
-For the formula cost amount: pro-rata credit for projected earnings on the funds at the rate of 2% (or as set by the rate authority) during the first seven years following shutdown
-For a site-specific cost estimate: credit for projected earnings on the funds from the time of shutdown through the projected decommissioning period.
Exelon Pre-decisional Enforcement Conference Presentation
Overview of Regulatory Requirements
- Exelons DFS reports:
-Provided certification of financial assurance for decommissioning that used the formula cost amount in 50.75(c) or a site-specific cost estimate (if greater) and the allowed credit in 10 CFR 50.75(e), as referenced in 50.75(b);
-Identified the amount presented in the report as the Amount of Radiological Decommissioning Funds Estimated To Be R
Requiredi d att the th date d t off shutdown. h td
- Applying the allowed credit to the formula cost amount or site-specific cost estimate was appropriate as it provided what was described in the regulation as the amount of money estimated to be required at the time of shutdown.
Exelon Pre-decisional Enforcement Conference Presentation
Recap of Exelons Position
- The manner in which Exelon reported funding assurance complies with the spirit, intent, and language of Section 50.75.
- We respectfully disagree with an interpretation of the regulations that requires licensees to report the formula cost amount or a greater value.
- Section 50.75 does not say licensees must report the formula cost amount or a greater value.
- Rather, Rather Section 50.75 50 75 requires licensees to certify that financial financial assurance assurance has been provided. The amount of that financial assurance must be based on an amount that is at least as great as the formula cost amount.
- And, Section 50.75 requires that licensees report the amount of funds estimated to be required under 10 CFR 50.75(b) and (c).
- 50.75(b) specifically requires that the amount reported account for the post-shutdown credit authorized in 50.75(e).
- In its DFS reports, reports Exelon reported amounts reflecting the amounts amounts of decommissioning funds estimated to be required under 50.75(b) and (c) and those reported amounts were clearly based on the formula cost amount or a greater site-specific cost estimate.
Exelon Pre-decisional Enforcement Conference Presentation
Executive Positions at Exelon President and Chief Nuclear Officer, Exelon Nuclear Exelon Generation Senior Vice President of Engineering and Technical Executive Positions Ser ices Services Vice President of Nuclear F l Fuels The individuals Director of Spent Fuel and involved in Decommissioning preparing these reports were not Exelon Manager, Spent Fuel and Decommissioning executives.
Exelon Pre-decisional Enforcement Conference Presentation
Florida Power Corporation Violation of 50.75
- Florida Power Corporation (FPC) submitted a decommissioning funding status report on March 25, 2009, in which it asserted that its report complied with the requirement in 50.75(f)(1). 50 75(f)(1)
-50.75(f)(1) requires licensees to report the amount of decommissioning funds accumulated to the end of the calendar year preceding the date of the report report (i.e., (i e the trust fund balance). balance)
- FPC reported a value lower than the actual trust fund balance as of December 31, 2008.
- In a March 14, 2011 letter, the NRC concluded that FPCs failure to accurately report the amount accumulated to the end of the calendar year preceding the date of the report in the 2009 report [was] a violation of 10 CFR 50.75(f)(1).
- Nonetheless, the Staff determined that the regulatory violation was minor and not subject to enforcement action because the actual fund balance was greater than reported and than the minimum amount required under 10 CFR 50.75(b) and (c).
Exelon Pre-decisional Enforcement Conference Presentation
50.75 Reporting Has Required Clarification
- RIS 2001-07, Rev. 1, January 2009 demonstrates that reporting expectations are not always as clear to utilities as exemplified by the statement the the NRC staff has learned that some licensees, licensees in response to the requirement that they report the amount of decommissioning funds accumulated to the end of the calendar year preceding di g th the d date t off theth report, t have h reported t d as partt off that th t amount funds accumulated to address State costs and spent fuel management costs.
- The original RIS stated that licensees are expected to separate funding estimates related to the costs of decommissioning included in the NRCs definition of decommissioningg in 10 CFR 50.2.
Exelon Pre-decisional Enforcement Conference Presentation
Technical Reading of the Reporting Requirement Before September 2007
- Prior to late 2007, Section 50.75(b)(1) required certification that financial assurance for decommissioning had been provided in an amount which may be more but not less than the amount stated in the table in paragraph (c)(1) of this section.
- Subsection (c) contained two subparts: (1) a table of minimum amounts to demonstrate reasonable assurance and (2) an adjustment factor.
- On September 27, 2007 the regulations were changed to require certification in an amount which may be more but not less than the amount stated in the table in paragraph (c)(1) of this section adjusted using a rate at least equal to that stated in paragraph (c)(2) of this section.
Exelon Pre-decisional Enforcement Conference Presentation
Technical Reading of the Reporting Requirement Before September 2007
- If Staff is going to impose an overly technical and limited interpretation of the regulations, regulations then based on that interpretation, no violation can be found with respect to Exelons 2005, 2006, and 2007 DFS Reports.
- Prior to September 2007, the amount to certify decommissioning funding assurance was based only on the value in the table in (c)(1) - without any adjustment for escalation factors.
-The maximum amount stated in the (c)(1) Table is:
- $105 million for PWRs; and
- $135 million for BWRs.
- The Th amounts t Exelon E l reported t d in i 2005-2007 2005 2007 were allll greater t
than these amounts.
Exelon Pre-decisional Enforcement Conference Presentation
Statute of Limitations
- The applicable statute of limitations requires the NRC t initiate to i iti t an action ti iimposing i g a civil i il penalty lt or iissuing i g an order to modify, suspend, or revoke a license, or to prohibit an individuals individual s involvement in licensed activity within 5 years from when the event occurred.
- Accordingly, the statute of limitations has run with regard to the 2005, 2006, and 2007 DFS Reports.
Exelon Pre-decisional Enforcement Conference Presentation