ML17072A341
| ML17072A341 | |
| Person / Time | |
|---|---|
| Site: | Reed College |
| Issue date: | 03/23/2017 |
| From: | Geoffrey Wertz NRC/NRR/DPR/PRLB |
| To: | Krahenbuhl M Reed College |
| Wertz G | |
| References | |
| CAC A11010 | |
| Download: ML17072A341 (5) | |
Text
March 23, 2017 Dr. Melinda Krahenbuhl, Director Reed College Reed Research Reactor 3203 SE Woodstock Blvd.
Portland, OR 97202-8199
SUBJECT:
REED COLLEGE 2016 FINANCIAL ASSURANCE (SELF-GUARANTEE) U.S.
NUCLEAR REGULATORY COMMISSION STAFF REVIEW (CAC NO. A11010)
Dear Dr. Krahenbuhl:
Pursuant to Title 10 of the Code of Federal Regulations (10 CFR) 50.75(e)(1)(iii)(C), Reporting and recordkeeping for decommissioning planning, 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 submitted a self-guarantee letter to the U.S. Nuclear Regulatory Commission (NRC) demonstrating financial assurance for decommissioning on November 1, 2016 (Agencywide Documents Access and Management System Accession No. ML16321A408).
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, Volume 3, Revision 1, Consolidated Decommissioning Guidance: Financial Assurance, Recordkeeping, and Timeliness, and meets the applicable requirements of 10 CFR Part 30. Enclosed is a summary of the NRC staffs financial review of Reed Colleges submittal If you have any questions regarding this matter, please contact me at 301-415-0893 or by electronic mail at Geoffrey.Wertz@nrc.gov.
Sincerely,
/RA Alexander Adams Acting for/
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 P.O. Box 118300 University of Florida Gainesville, FL 32611
ML17072A341; *concurred via e-mail NRR-088 OFFICE NRR/DPR/PRLB/PM* NRR/DPR/PRLB/LA* NRR/DPR/PRLB/BC NRR/DPR/PRLB/PM NAME GWertz NParker AAdams (AAdams for) GWertz DATE 3/20/17 3/20/17 3/23/17 3/23/17 REED COLLEGE 2016 FINANCIAL ASSURANCE (SELF GUARANTEE) REVIEW DOCKET NO. 50-288
1.0 INTRODUCTION
By letter dated November 1, 2016 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML16321A408), Reed College provided to the U.S. Nuclear Regulatory Commission (NRC) for review, the required documentation in support of its self-guarantee for demonstrating decommissioning funding assurance, in accordance with NUREG-1757, Volume 3, Revision 1, Financial Assurance, Recordkeeping, and Timeliness, Title 10 of the Code of Federal Regulations (10 CFR), Section 50.75 Reporting and recordkeeping for decommissioning planning, and 10 CFR Part 30, Appendix E, Criteria Relating to Use of Financial Tests and Self Guarantees for Providing Reasonable Assurance of Funds for Decommissioning by Nonprofit Colleges, Universities and Hospitals. This financial test is intended to provide assurance that Reed College can continue maintaining $2,263,750 (2016 dollars) in coverage for decommissioning funding assurance of the research and test reactor and related facilities located at Reed College in Portland, Oregon.
2.0 ANALYSIS The requirements of 10 CFR 50.75(e)(1)(iii)(C), state, in part, that For non-profit entities, such as colleges, universitiesa 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 Part 30 establishes criteria for passing the financial test for the self-guarantee and establishes its terms. Regulatory guidance contained in NUREG-1757, 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.
Appendix E to 10 CFR Part 30 requires a bond issuing licensee to have a current rating for its most recent uninsured, uncollateralized, and unencumbered bond issuance of AAA, AA, or Aas issued by Moodys. The Moodys Investor Service (Moodys) issued Reed College a current rating for its most recent uninsured, uncollateralized, and unencumbered bond of Aa2/VMIGI. When an obligor is rated Aa2/VMIGI, this means it has a strong capacity to meet its financial commitments. Aa2/VMIGI is the third highest issuer credit rating assigned by Moodys. The NRC staff reviewed Reed Colleges submittal pursuant to the elements specified in Appendix E to 10 CFR Part 30, including, the Financial Test, Additional Requirements, and Self-Guarantee requirements contained in Sections II(A)(1) and II(C), respectively, and the guidance contained in NUREG-1757. In part, the licensee provided: a letter from Reed Colleges CFO containing the self-guarantee financial test; an independent auditors 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. The NRC staff notes that the self-guarantee agreement (originally signed duplicate) was not submitted with the application as required by the guidance in NUREG-1757, however, NRC staff confirmed that this agreement is in the NRCs possession and remains unchanged (ADAMS Accession No. ML092200010).
Enclosure
The NRC staff also notes that Subsection II(C)(1) of Appendix E to 10 CFR Part 30 requires the licensees independent certified public accountant to evaluate the licensees off-balance sheet transactions and render an opinion on whether those transactions could adversely affect the licensees 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.
In this regard, Klynveld Peat Marwick Goerdeler (KPMG), the independent auditor retained by Reed College, stated, In our opinion, the financial statements referred to above present fairly in all material respects, the financial position of The Reed Institute. In consideration of the above, Reed College has fulfilled the requirements for a bond issuing university.
3.0 CONCLUSION
The NRC staff has reviewed the decommissioning financial assurance mechanism for the research reactor at Reed College according to NUREG-1757. Based on its review, the NRC staff finds that the licensee provided complete documentation, including a letter from Reed Colleges CFO containing the self-guarantee financial test; an independent auditors 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 NRC 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 for decommissioning of the Reed College facility, and conforms to NRC guidance. Therefore, the NRC staff concludes that Reed College meets the requirements of 10 CFR Part 30 Appendix E and 10 CFR Section 50.75.