ML15090A197

Report of Status of Decommissioning Funding

ML15090A197
Person / Time
Site:	Summer
Issue date:	03/27/2015
From:	Crosby M Santee Cooper
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
Download: ML15090A197 (5)

Text

4santee cooper" March 27, 2015 Michael R. Crosby Document Control Desk Senior Vice President U. S. Nuclear Regulatory Commission Nuclear Energy Washington, D. C. 20555 (843) 761-4126 fax: (843) 761-7037

Subject:

Virgil C. Summer Nuclear Station Unit 1 mrcrosby@santeecooper.com Docket No. 50/395 Operating License No. NPF-12 Report of Status of Decommissioning Funding

Dear Sir/Madam:

The South Carolina Public Service Authority (Authority) and South Carolina Electric & Gas Company (SCE&G) have ownership interests of one-third and two-thirds, respectively, in the Virgil C. Summer Nuclear Station Unit 1 (VCSNS-1). As provided in 10 CFR § 50.75 (f)(1), each power reactor licensee is required to report to the Nuclear Regulatory Commission (NRC) on a calendar year basis, beginning March 31, 1999, and every two years thereafter, the status of its decommissioning funding for each reactor or share of reactor it owns. SCE&G has advised the Authority that it will disclose the required information relative to its two-thirds ownership share in a separate submittal.

The Authority's one-third share using the NRC formula for the minimum funding required for license termination is approximately $165 million as of December 31, 2014. This one-third liability is funded by payments to an external sinking fund as provided for in 10 CFR § 50.75. The escalated one-third liability for license termination costs is expected to total $560 million, stated in dollars of the year of expenditure. The market value of the external fund was approximately $123 million as of December 31, 2014. (Please see .)

A site-specific decommissioning study completed in 2012 identified the total decommissioning costs for the site. Total site decommissioning includes license termination, spent fuel management and site restoration.

The total costs identified by the study are in excess of NRC formula for minimum funding requirements.

Further, as the result of a 2006 settlement with the Department of Energy (DOE), the Authority expects to receive reimbursement for spent fuel management costs incurred that would have been avoided had the DOE met its contractual obligation to store spent fuel. The one-third liability in excess of the NRC minimum funding requirements less DOE reimbursements is estimated by the Authority to be approximately $71 million as of December 31, 2014. The escalated one-third liability is expected to be approximately $1.016 billion, stated in dollars of the year of expenditure. The market value of the Authority's internal fund, designated for spent fuel management and site restoration, was approximately $84 million as of December 31, 2014. (Please see Attachment 1.)

If there are any questions concerning this report, please contact me at (843) 761-4126.

Michael R. Crosby Senior Vice President Nuclear Energy MRC:trw Attachment cc: Victor M. McCree Shawn A. Williams A b NRC Resident Inspector One Riverwood Drive I Moncks Corner, SC 29461-2901 (843) 761-8000 PRO.Box 2946101 Moncks Corner, SC 29461-6101

Attachment I 1 (a). The minimum decommissioning fund estimate, pursuant to 10 CFR § 50.75 (b) and (c). $164,953,320 Base Amount for PWR between 1,200 MWt and 3,400 MWt Estimated Cost (Year X) = (1986 $ Base Cost) (AL., + BE, + CBx)

= ($100,520,000) t(.65 x 2.429) + (.13 x 2.222) + (.22 x 13.885)k

$494,859,960 Authority's one-third share of 2012 Estimated Cost = $164,953,320 Where:

A .65 10 CFR § 50.75 (c)(2)

B .13 10 CFR § 50.75 (c)(2)

C .22 10 CFR § 50.75 (c)(2)

L,, 2.429 (Computed Below)

E., 2.222 (Computed Below)

Px 1.880 (Computed Below)

F,, 2.695 (Computed Below)

B, 13.885 (NUREG 1307 Rev. 15) 1986 $ Base Cost = ($75,000,000 + .0088Pmillion)

= ($75,000,000 + 25,520,000)

= $100,520,000 P = 2,900 MWt

= Base L, (Dec 2005) x ECI(Qtr 4 2014) / 100

= 1.98 x 122.7 / 100 2.429 Px = December 2014 Value / January 1986 Value

= 214.7 / 114.2

= 1.880 Fx December 2014 Value / January 1986 Value 221.0 / 82.0 2.695 E., = {(.58Px) + (.42F.,)}

J(.58 x 1.880) + (.42 x 2.695)}

2.222 Fourth Quarter 2014 / December 2014 values in the following Bureau of Labor Statistics indices were used to compute NRC minimum requirements:

Employment Cost Index - Total compensation, private industry, South region Series ID: CIU20100000002201 Producer Price Index - Commodities (Industrial electric power)

Series ID: wpu0543 Producer Price Index - Commodities (Light fuel oils)

Series ID: wpu0573 1 of 5

Attachment 1 1(b). Escalation of the Authority's one-third share of the minimum funding requirement through the end of decommissioning.

Cost categories Labor, Equipment & Materials, Burial, and Other were estimated in a site-specific decommissioning study. These costs were escalated through the end of the decommissioning period based on various indices and estimates. Ultimate decommissioning costs to be funded from the external trust are estimated at $560,456,582 in escalated dollars.

2. Market value of the external trust fund at December 31, 2014 for items included in 10 CFR § 50.75. $123,008,921

3. Schedule of annual amounts remaining to be collected for items in 10 CFR § 50.75.

2014 Dollars

.,Beginning.. Decommissioning Annua " . Ending RealRates.

Year Balance Expenditures Deposits Earnings- Balance 'of Return 2015 123,008,921 2,198,280 511,102 125,718,303 0.0042 2016 125,718,303 2,626,140 719,109 129,063,552 0.0057 2017 129,063,552 2,626,140 521,417 132,211,109 0.0040 2018 132,211,109 2,626,140 387,379 135,224,627 0.0029 2019 135,224,627 2,626,140 508,445 138,359,212 0.0038 2020 138,359,212 2,626,140 641,987 141,627,338 0.0046 2021 141,627,338 2,626,140 642,988 144,896,467 0.0045 2022 144,896,467 2,626,140 698,401 148,221,007 0.0048 2023 148,221,007 2,626,140 752,963 151,600,110 0.0051 2024 151,600,110 2,626,140 754,969 154,981,219 0.0050 2025 154,981,219 2,626,140 756,308 158,363,667 0.0049 2026 158,363,667 2,626,140 741,142 161,730,949 0.0047 2027 161,730,949 2,626,140 740,728 165,097,817 0.0046 2028 165,097,817 2,626,140 739,638 168,463,595 0.0045 2029 168,463,595 2,626,140 721,024 171,810,759 0.0043 2030 171,810,759 2,626,140 718,169 175,155,068 0.0042 2031 175,155,068 2,626,140 714,633 178,495,841 0.0041 2032 178,495,841 2,626,140 692,564 181,814,545 0.0039 2033 181,814,545 2,626,140 687,259 185,127,944 0.0038 2034 185,127,944 2,626,140 662,758 188,416,842 0.0036 2035 188,416,842 2,626,140 655,691 191,698,672 0.0035 2036 191,698,672 2,626,140 628,772 194,953,584 0.0033 2037 194,953,584 2,626,140 619,952 198,199,676 0.0032 2038 198,199,676 2,626,140 590,635 201,416,451 0.0030 2039 201,416,451 2,626,140 580,079 204,622,671 0.0029 2040 204,622,671 2,626,140 548,389 207,797,200 0.0027 2041 207,797,200 2,626,140 536,117 210,959,456 0.0026 2042 210,959,456 9,818,650 478,715 201,619,521 0.0024 2043 201,619,521 23,564,760 405,965 178,460,726 0.0023 2044 178,460,726 23,564,760 322,184 155,218,150 0.0021 2045 155,218,150 23,564,760 260,674 131,914,064 0.0020 2046 131,914,064 23,564,760 192,862 108,542,165 0.0018 2047 108,542,165 23,564,760 142,762 85,120,167 0.0017 2 of 5

Attachment I 2048 85,120,167 23,564,760 91,102 61,646,509 0.0015 1 2049 1 61,646,5091 13,746,1101 1 66,103 [ 47,966,5021 0.0014 Beg'inng . Decommissioning "4Annual Ending Year.'- 0Balarince ,,'Expenditures -Deposits- -Earnirngs- %o "Baanle Total 123,008,921 164,953,320 70,477,920 19,432,981 47,966,502

4. The assumptions used regarding escalation in decommissioning cost, rates of earnings on decommissioning funds, and rates of other factors used in funding projections follow:

The plant will be decommissioned immediately upon license expiration (DECON alternative).

Costs are escalated by the four categories identified in the 2012 site-specific study using the following rates: labor (3.1%), equipment and materials (6.0%), waste burial (2.9%)

and other (5.0%). These rates were proposed in an internal memorandum and approved on July 25, 2013 by the Vice President of Nuclear Operations and Construction and represent the Authority's best estimate of future cost increases. The schedule below shows weighted average escalation rates reflecting the above cost categories weighted by individual category costs over the sum of the four categories.

Waste vendors will be utilized.

The trust fund accrues earnings in accordance with estimated effective yield (approximately 4.4% as shown below). The Authority's Board of Directors approves all customer rates. As the rate-regulatory authority, the Board adopted on March 22, 1999 a resolution containing the following language: "Upon recommendation of management, the Board of Directors authorizes the use of the effective yield of the trust portfolio for purposes of determining future decommissioning funding needs."

All necessary funds will be on deposit at the time the plant is shut down.

A B (A-B)

Projected Weighted&Average Year Earning Rates Escalation Rates Real, Rates of Return 2015 0.0417 0.0375 0.0042 2016 0.0433 0.0376 0.0057 2017 0.0417 0.0377 0.0040 2018 0.0408 0.0379 0.0029 2019 0.0418 0.0380 0.0038 2020 0.0427 0.0381 0.0046 2021 0.0427 0.0382 0.0045 2022 0.0432 0.0384 0.0048 2023 0.0436 0.0385 0.0051 2024 0.0436 0.0386 0.0050 2025 0.0436 0.0387 0.0049 2026 0.0436 0.0389 0.0047 2027 0.0436 0.0390 0.0046 2028 0.0436 0.0391 0.0045 2029 0.0436 0.0393 0.0043 2030 0.0436 0.0394 0.0042 3 of 5

Attachment 1 2031 0.0436 0.0395 0.0041 2032 0.0436 0.0397 0.0039 2033 0.0436 0.0398 0.0038 2034 0.0436 0.0400 0.0036 2035 0.0436 0.0401 0.0035 2036 0.0436 0.0403 0.0033 2037 0.0436 0.0404 0.0032 2038 0.0436 0.0406 0.0030 2039 0.0436 0.0407 0.0029 2040 0.0436 0.0409 0.0027 2041 0.0436 0.0410 0.0026 2042 0.0436 0.0412 0.0024 2043 0.0436 0.0413 0.0023 2044 0.0436 0.0415 0.0021 2045 0.0436 0.0416 0.0020 2046 0.0436 0.0418 0.0018 2047 0.0436 0.0419 0.0017 2048 0.0436 0.0421 0.0015 2049 0.0436 0.0422 0.0014

5. Contracts upon which the licensee is relaying pursuant to 10 CFR § 50.75 (e) (1) (v).

None.

6. Modifications to the current funding assurance methods.

None.

7. Material changes to Trust Agreements.

None.

8. Authority's one-third share of the 2012 Site-Specific Study.

Year of

.2014 'Expenditure Dollars Dollars NRC Minimum Funding Requirements - License Termination (radiological decommissioning costs) (1) 164,953,320 560,456,582 Excess Site-Specific Study Costs (license termination, spent fuel management and site restoration costs) Net of Estimated DOE Reimbursements (spent fuel management costs) (2) 71,410,123 1,016,013,134 2012 Site-Specific Study Costs (license termination, spent fuel management and site restoration costs) Net of Estimated DOE Reimbursements (spent fuel management costs) (2) 236,363,443 1,576,469,716 (1) Expenditure years are 2042-2049 (2) Expenditure years are 2042-2096 4 of 5