ML17102B416

NRC Decommissioning Funding Status Report

ML17102B416
Person / Time
Site:	Susquehanna
Issue date:	03/29/2017
From:	Lyzinski D Allegheny Electric Cooperative
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
Download: ML17102B416 (9)

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ELECTRIC COOPERATIVE, INC.

212 LOCUST ST.

• P.O. BOX 1266

• HARRISBURG, PA 17108-1266

• PHONE 717/233-5704

• FAX 717/234-1309 Submitted pursuant to 10 CFR 50.75 March 29, 2017

. U. S. Nuclear Regulatory Commission Document Control Desk Washington, DC 20555-0001 SUSQUEHANNA STEAM ELECTRIC STATION Docket Nos. 50-387 NRC DECOMMISSIONING FUNDING STATUS REPORT and 50-388 This letter provides decommissioning information for the Allegheny Electric Cooperative, Inc. (AEC) ten percent interest in Susquehanna Unit 1 and Unit 2 (SSES) as required by 10 CFR 50.75 "Reporting and Recordkeeping for Decommissioning Planning," section (f)(l).*

Attachment 1 contains the AEC decommissioning funding status report at December 31, 2016, submitted biennially to comply with 10 CFR 50.75(f)(l).

If you have any questions regarding the decommissioning report, please direct them to the undersigned.

Sincerely, Daniel Lyzinski Vice President - Finance & Accounting Attachment 1: NRC Decommissioning Funding Status Report December 31, 2016 Copy:

NRCRegionI Ms. L. H. Micewski, NRC Sr. Resident Inspector Ms. T.E. Hood, NRC Project Manager Mr. M. Shields, PA DEP/BRP

Attachment 1 to NRC Decommissioning Funding Status Report December 31, 2016

Attachment 1 Page 1 of 3 NRC Decommissioning Funding Status Report December 31, 2016 Allegheny Electric Cooperative, Inc.

Susquehanna Steam Electric Station Allegheny Electric Cooperative, Inc. (AEC) hereby submits this Decommissioning Report in compliance with 10 CFR 50.75(f)(l) for its 10% share of Susquehanna (SSES)

Unit 1 and Unit 2.

AEC has analyze~ its current funding levels for both SSES units and concluded that these funding levels plus net earnings from trust investments 'will be sufficient to pay for the decommissioning costs of each unit at the time permanent termination of operations is expected for each unit, consistent with the NRC prescribed minimum set forth in 10 CFR 50.75(c).

Attachment 1 Page 2of3 Information is submitted to provide Financial Assurance Unit# 1 Unit #2

1. The minimum amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75 (b) and (c) at December 31, 2016. $66,676,500 $66,676,500 Allegheny Electric Cooperative, Inc.'s (AEC) calculation of the NRC minimum formula is reflected in Exhibit 1 (behind this Attachment).

2. The amount accumulated at the end of the calendar year preceding the date of the report, net of taxes paid on realized gains and losses, for items included in 10 CFR 50.75 (b) and (c).

Market Value at December 31, 2016 $62,247'134 $62,247,134

3. AEC has determined the trust with expected future None None earnings (net of expenses and taxes) to be fully funded. (See Exhibit 2)

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

Estimated inflation rate for decommissioningcosts 5.0% 5.0%

Estimated earnings rate on decommissioning funds 7.0% 7.0%

per 10 CFR 50.75(e)(l)(ii) which are credited up to the time of permanent termination of operations along with a pro-rata credit during the dismantlement period.

Rates of other factors used in funding projections None None

5. Any power sale contracts upon which licensee is (see below) (see below) relying to provide financial assurance.

AEC is the wholesale power supplier for the 14 rural electric cooperatives in Pennsylvania and New Jersey. AEC has wholesale power contracts with its 14 member distribution cooperatives, which is the source for funding the Trust Fund.

Attachment 1 Page 3 of3 Information is submitted to provide Financial Assurance Unit# 1 Unit #2

6. Modifications to licensee's method of providing None None financial assurance since previous report.

7. Material changes to trust agreement. None None

Attachment 1 Exhibit 1 Page 1of3 Calculation of Escalation Factors Used in Computation of Minimum Financial Assurance Amount for Decommissioning Susquehanna Steam Electric Station Units land 2 Boiling Water Reactor (BWR)

Escalation Factor Formula- 0.65(L) + 0.13(E) + 0.22(B)

Escalation= (.65 x 2.780) + (.13 x 1.870) + (.22 x 13.132)

Escalation= (1.807 + .243 + 2.889) = 4.939 (L) - Labor - (Bureau of Labor Statistics, Table 6, Compensation, Employment Cost Index, for total compensation, private industry workers, by bargaining status, region and area size)

Northeast region - December 2016 Index Number 128.7 December 2005 Index Number 100.0 December 2005 Base 2.16 L= 128.7 times 2.16 Equals 2.780 100.0 (E) - Energy - (Producer Price Index Commodities, Series ID: WPU0543 and WPU0573)

E= (.54P + .46F)

E= (.54 x 1.883) + (.46 x 1.854)

E= 1.017 + .853 = 1.870 P - Industrial Power, 500 kW Demand - (Commodity 0543)

December 2016 Index Number 215 .0 January 1986 Index Number 114.2 (1)

P= 215.0 equals 1.883 114.2

Attachment 1 Exhibit 1 Page 2 of3 F - Light Fuel Oils - (Commodity 0573)

December 2014 Index Number 152.0 January 1986 Index Number 82.0 F= 152.0 equals 1.854 82.0 (B) Waste Burial NUREG - 1307, Rev. 16, "NRC Report on Waste Burial Charges" Table 2.1- Generators Located in Unaffiliated States and those in Compact States having No Disposal Facility 13 .13 2 (1) Represents the national base value of Pat January 1986. The base value of Pis no longer determined on a regional basis.

• Attachment 1 Exhibit 1 Page 3 of3 Allegheny Electric Cooperative, Inc.

Computation of Minimum Financial Assurance Amount for Decommissioning Susquehanna Steam Electric Station Units 1and2 Unit 1 Unit2 Base amount for BWR greater than 3,400 MWt = $135 million The Power Level of Unit 1 = 3,952 MWt and Unit 2 = 3,952 MWt $135,000,000 $135,000,000 Ownership Percentage 10% 10%

Base Amount per Unit $13,500,000 $13,500,000 Escalation Factor 4.939 4.939 Escalated Amount per Unit $66,676,500 $66,676,500 Total Escalated Amount (Unit 1 + Unit 2) $133,353,000

Attachment 1 Exhibit 2 Page 1of1 Based on current funding and projected earnings, the Trust is considered to be sufficiently funded. AEC reviews the actual cost inflation and earnings performance periodically and adjusts the future funding schedule accordingly.