ML15257A319
| ML15257A319 | |
| Person / Time | |
|---|---|
| Site: | Reed College |
| Issue date: | 09/17/2015 |
| From: | Geoffrey Wertz Research and Test Reactors Branch B |
| To: | Krahenbuhl M Reed College |
| Wertz G, NRR/DPR, 301-415-0893 | |
| References | |
| TAC M79578 | |
| Download: ML15257A319 (5) | |
Text
September 17, 2015 Dr. Melinda Krahenbuhl, Director Reed College Reed Research Reactor 3203 SE Woodstock Blvd.
Portland, OR 97202-8199
SUBJECT:
REED COLLEGE 2014 FINANCIAL ASSURANCE (SELF-GUARANTEE) U.S.
NUCLEAR REGULATORY COMMISSION STAFF REVIEW (TAC NO. M79578)
Dear Dr. Krahenbuhl:
Pursuant to Title 10 of the Code of Federal Regulations (10 CFR) Section 50.75, Reporting and recordkeeping for decommissioning planning, Subsection (e)(1)(iii)(C), and Appendix E to 10 CFR Part 30, Criteria Relating to Use of Financial Tests and Self-Guarantee For Providing Reasonable Assurance of Funds For Decommissioning by Nonprofit Colleges, Universities, and Hospitals, Reed College (the licensee) submitted a self-guarantee letter to the U.S. Nuclear Regulatory Commission (NRC) demonstrating financial assurance for decommissioning on September 17, 2014 (Agencywide Documents Access and Management System (ADAMS)
Accession No. ML14279A025), as supplemented by letter dated March 23, 2015 (ADAMS Accession No. ML15090A113).
The NRC staff completed its review and finds that the Reed College self-guarantee agreement meets the financial test criteria for a non-profit university that issues bonds, is sufficient for providing financial assurance, conforms to the guidance in NUREG-1757, and meets the applicable requirements of 10 CFR 50.75 and Appendix E of 10 CFR Part 30. Enclosed is a summary of the staffs financial review of Reed Colleges submittal.
If you have any questions regarding this matter, please feel free to contact me at 301-415-0893 or by electronic mail at Geoffrey.Wertz@nrc.gov.
Sincerely,
/RA/
Geoffrey Wertz, Project Manager Research and Test Reactors Licensing Branch Division of Policy and Rulemaking Office of Nuclear Reactor Regulation Docket No. 50-288 License No. R-112
Enclosure:
As stated cc: See next page
Reed College Docket No. 50-288 cc:
Mayor of the City of Portland 1220 Southwest 5th Avenue Portland, OR 97204 Dr. Nigel Nicholson, Dean of Faculty Reed College 3203 SE Woodstock Boulevard Portland, OR 97202-8199 John Kroger, President Reed College 3203 SE Woodstock Boulevard Portland, OR 97202-8199 Division Administrator Nuclear Safety Division Oregon Department of Energy 625 Marion Street NE Salem, OR 97301-3737 Program Director Radiation Protection Services Public Health Division Oregon Health Authority 800 NE Oregon Street, Suite 640 Portland, OR 97232-2162 Test, Research, and Training Reactor Newsletter University of Florida 202 Nuclear Sciences Center Gainesville, FL 32611
ML15257A31 *via e-mail NRR-088 OFFICE NRR/DPR/PRLB/PM* NRR/DPR/LA NRR/DIRS/IFIB NRR/DPR/PRLB/BC NRR/DPR/PRLB/PM NAME GWertz NParker ABowers AAdams GWertz DATE 9/15 /2015 9/15/2015 9/16/2015 9/17/2015 9/17/2015
Enclosure REED COLLEGE 2014 FINANCIAL ASSURANCE SELF-GUARANTEE REVIEW DOCKET NO. 50-288 Pursuant to Title 10 of the Code of Federal Regulations (10 CFR) Section 50.75, Reporting and recordkeeping for decommissioning planning, Subsection (e)(1)(iii)(C), and Appendix E to 10 CFR Part 30, Criteria Relating to Use of Financial Tests and Self-Guarantee For Providing Reasonable Assurance of Funds For Decommissioning by Nonprofit Colleges, Universities, and Hospitals, Reed College (the licensee) provided a self-guarantee package to the U.S. Nuclear Regulatory Commission (NRC) to demonstrate financial assurance for decommissioning on September 17, 2014 (Agencywide Documents Access and Management System (ADAMS)
Accession No. ML14279A025).
The requirements of 10 CFR 50.75(e)(1)(iii)(C) state, in part, that a guarantee of funds by the applicant or licensee may be used if the guarantee and test are as contained in Appendix E to 10 CFR Part 30. Appendix E to 10 CFR 30 establishes criteria for passing the financial test for the self-guarantee and establishes its terms. Regulatory guidance contained in NUREG-1757, Volume 3, Revision 1, Consolidated Decommissioning Guidance: Financial Assurance, Recordkeeping, and Timeliness, states, in part, that a submittal used to satisfy the requirements of Appendix E to 10 CFR Part 30 can be verified through the use of the Chief Financial Officers (CFO) Certification, the Independent Auditors Report, and Financial Statements.
The staff reviewed Reed Colleges submittal pursuant to the requirements of Appendix E to 10 CFR Part 30, including the Financial Test, Additional Requirements, and Self-Guarantee requirements contained in Sections (II)(A)(1), II(C), and III, respectively, and the guidance contained in NUREG-1757. The licensees initial submittal did not include all of the required information necessary for the staff to complete its review. Specifically, the staff needed the licensees self-guarantee agreement; an auditors special report confirming the Chief Executive Officer (CEO) or CFO letter and reconciling amounts in the CEO or CFO letter with licensees financial statements; and the licensees audited financial statements for the most recent fiscal year with the auditors opinion on these documents. The staff issued a Request for Additional Information (RAI) by letter dated January 29, 2015 (ADAMS Accession No. ML15027A297) requesting the licensee to provide supporting documents consistent with NRC regulations for a self-guarantee. By letter dated March 23, 2015, Reed College responded to the RAI and submitted the complete information as requested by the NRC (ADAMS Accession No. ML15090A113).
The staff notes that Subsection (II)(C)(1) of Appendix E to 10 CFR Part 30 requires the licensee's independent certified public accountant (CPA) to evaluate the licensee's off-balance sheet transactions and render an opinion on whether those transactions could adversely affect the licensee's ability to pay for decommissioning costs. The guidelines established by the American Institute of Certified Public Accountants prohibit an accountant from rendering such an opinion. However, the Auditors Report did state that the 2013 and 2014 financial statements were presented fairly in all material respects.
The staff also notes that 10 CFR 50.75(e)(1)(iii)(C) includes a provision, which states, in part, that a guarantee by the licensee may not be used in any situation in which the licensee has a parent company holding majority control of voting stock of the company. Reed College does not have a parent company holding majority control of its voting stock. The staffs review confirmed that Reed College has a current rating for its most recent uninsured, uncollateralized, and unencumbered bond issuance of Aa2/VMIGI by Moodys Investor Service. Additionally, Reed College passed the financial test presented in Appendix E to Part 30. Finally, Reed College certified the 2015 decommissioning cost estimate to be $2,263,750.
Based on its review and consideration for the licensees responses to the RAI, the staff finds that the licensee provided complete documentation, including a letter from the CFO containing the self-guarantee financial test; an auditors special report confirming the CFO letter, and reconciling amounts, with the licensees financial statements; and the licensees audited financial statements for the most recent fiscal year. In addition, the staff finds that the licensee does not have a parent company holding majority control of its voting stock and that the amount of the self-guarantee exceeds the required coverage level. In consideration of the exceptions noted above, the staff finds that the self-guarantee agreement meets the financial test criteria for a non-profit university that issues bonds, is sufficient for providing financial assurance, conforms to the guidance in NUREG-1757, and meets the requirements of 10 CFR Section 50.75 and Appendix E of 10 CFR Part 30.