ML17257A078
| ML17257A078 | |
| Person / Time | |
|---|---|
| Site: | Aerotest |
| Issue date: | 09/27/2017 |
| From: | Alexander Adams NRC/NRR/DPR/PRLB |
| To: | Slaughter D Aerotest |
| Helvenston E | |
| References | |
| CAC MF6254 | |
| Download: ML17257A078 (16) | |
Text
September 27, 2017 Dr. David M. Slaughter, President Aerotest Operations, Inc.
3455 Fostoria Way San Ramon, CA 94583
SUBJECT:
AEROTEST RADIOGRAPHY AND RESEARCH REACTOR-U.S. NUCLEAR REGULATORY COMMISSION REVIEW OF CHANGE IN METHOD OF PROVIDING FINANCIAL PROTECTION (CAC NO. MF6254)
Dear Dr. Slaughter:
Aerotest Operations, Inc. (Aerotest) holds U.S. Nuclear Regulatory Commission (NRC) Facility Operating License No. R-98 for the operation of the Aerotest Radiography and Research Reactor (ARRR). By letter dated May 6, 2015 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML15134A143), Aerotest notified the NRC that, as of 11:59 p.m. on June 5, 2015, Aerotests nuclear liability insurance policies would be cancelled by American Nuclear Insurers. In accordance with Title 10 of the Code of Federal Regulations (10 CFR) 140.14(a)(1), Types of financial protection, Aerotest had been using these policies to provide the financial protection required by 10 CFR 140.11(a)(2), Amounts of financial protection for certain reactors, for the ARRR. Aerotests letter stated that, after June 5, 2015, to substitute for these policies, it would rely on adequate resources to provide financial protection for the ARRR pursuant to 10 CFR 140.14(a)(2). Specifically, Aerotest proposed to provide financial protection based on the resources of its parent company, Autoliv ASP, Inc. (Autoliv ASP) (which is wholly owned by Autoliv, Inc.). Aerotests letter provided, as an attachment, audited financial statements of Autoliv ASP in support of Aerotests change to its method of providing financial protection for the ARRR.
The NRC staff determined that additional information was needed to enable it to complete a review of Aerotests change to its method of providing financial protection for the ARRR.
Therefore, by letter dated January 20, 2016 (ADAMS Accession No. ML15335A453), the NRC staff sent Aerotest a request for additional information (RAI) to ensure that Aerotest was providing financial protection for the ARRR as required by 10 CFR Part 140, Financial Protection Requirements and Indemnity Agreements.
On May 5, 2016, and July 7, 2016, Aerotest and the NRC staff held conference calls (ADAMS Accession Nos. ML16193A020 and ML16193A018, respectively) to discuss questions that Aerotest had regarding the RAI. By letters dated June 15, 2016 (ADAMS Accession Nos. ML16175A583 and ML16179A128), and July 12, 2016 (ADAMS Accession No. ML16203A154), Aerotest provided information in response to the RAI, specifically, additional financial statements of Autoliv ASP, and drafts of documents required for Aerotests use of the adequate resources of Autoliv ASP to provide financial protection for the ARRR pursuant to 10 CFR 140.14(a)(2). However, the NRC staff never approved Aerotests use of the adequate resources method to comply with the financial protection requirements of 10 CFR Part 140.
On February 28, 2017, the NRC staff issued an order consenting, subject to certain conditions, to the indirect transfer of the ARRR license to Nuclear Labyrinth, LLC (Nuclear Labyrinth)
(ADAMS Accession Nos. ML16333A446 and ML16333A448). This license transfer, once consummated, would cause Nuclear Labyrinth, and not Autoliv ASP, to be the parent company of Aerotest. By letter dated October 10, 2016 (ADAMS Accession No. ML16294A250), Aerotest had stated that prior to the consummation of the license transfer, $1,500,000 would be placed in a trust to allow Aerotest to meet the financial protection requirements of 10 CFR Part 140 for the ARRR after the license transfer. Additionally, in its safety evaluation supporting the approval of the license transfer (ADAMS Accession No. ML16333A449), the NRC staff stated that following the transfer, Aerotest would continue to be required to provide evidence that it had obtained the appropriate amount of financial protection for the ARRR in accordance with 10 CFR 140.11(a)(2). Therefore, the NRC staff approval of the license transfer was conditioned on the funding of a financial protection standby trust for the ARRR in the sum of $1,500,000.
The license transfer was subsequently consummated on July 17, 2017 (ADAMS Accession No. ML17138A310).
By letter dated August 15, 2017 (ADAMS Accession No. ML17257A175), Aerotest stated that the financial protection standby trust for the ARRR required as a condition of the license transfer came into effect on July 12, 2017, and, prior to the closing of the license transfer transaction on July 17, 2017, $1,500,000 in funds were made available in the financial protection standby trust.
Pursuant to 10 CFR 140.14(a)(3), the amounts of financial protection required by 10 CFR 140.11 may be furnished and maintained in the form of such type of financial protection as the NRC may approve. The NRC staff finds that Aerotests establishment of a financial protection standby trust for the ARRR that is fully funded for the amount required by 10 CFR 140.11(a)(2) (i.e., $1,500,000) satisfies the financial protection requirements under 10 CFR Part 140. Therefore, the NRC staff concludes that Aerotests change to its method of providing financial protection for the ARRR complies with applicable NRC regulations.
By its letter dated August 15, 2017, Aerotest also stated that on September 20, 2016, prior to the establishment and funding of the financial protection standby trust, it had entered into a standby trust agreement with Wells Fargo Bank, National Association (Wells Fargo). With the subsequent indirect transfer of the ARRR license and the establishment and funding of the financial protection standby trust, this September 20, 2016, standby trust agreement is no longer needed. However, Aerotest stated that the standby trust agreement only permits the termination of the standby trust at the written agreement of (1) Aerotest, (2) Wells Fargo, and (3) the NRC. Because the September 20, 2016, standby trust agreement is no longer needed, and because the September 20, 2016, standby trust agreement may only be terminated with written agreement from the NRC, Aerotest requested written agreement from the NRC that the September 20, 2016, standby trust agreement may be terminated.
Given that, as discussed above, the NRC staff has concluded that Aerotests establishment of a financial protection standby trust for the ARRR that is funded at $1,500,000 satisfies the financial protection requirements under 10 CFR Part 140, the NRC staff finds that the September 20, 2016, standby trust agreement is not required by the NRCs regulations.
Therefore, the NRC agrees to the termination of the September 20, 2016, standby trust agreement.
If you have any questions, please contact Edward Helvenston at 301-415-4067, or by electronic mail at Edward.Helvenston@nrc.gov.
Sincerely,
/RA/
Alexander Adams, Jr., Chief Research and Test Reactors Licensing Branch Division of Policy and Rulemaking Office of Nuclear Reactor Regulation Docket No. 50-228 cc: See next page
Aerotest Operations, Inc.
Docket No. 50-228 Sandra Warren, General Manager Aerotest Operations, Inc.
3455 Fostoria Way San Ramon, CA 94583 Jay E. Silberg Pillsbury Winthrop Shaw Pittman LLP 1200 Seventeenth Street, NW Washington, DC 20036-3006 California Energy Commission 1516 Ninth Street, MS-34 Sacramento, CA 95814 Radiologic Health Branch P.O. Box 997414, MS 7610 Sacramento, CA 95899-7414 Test, Research and Training Reactor Newsletter P.O. Box 118300 University of Florida Gainesville, FL 32611
ML17257A078; *concurred via e-mail OFFICE NRR/DPR/PRLB/PM* NRR/DPR/PRLB/PM* NRR/DIRS/IFIB*
NRR/DPR/LA*
NAME EHelvenston STraiforos (CMontgomery for)
MHenderson NParker DATE 9/18/2017 9/6/2017 9/20/2017 9/18/2017 OFFICE OGC*
NRR/DIRS/IFIB/BC NRR/DPR/PRLB/BC NAME JWachutka ABowers AAdams DATE 9/22/2017 9/27/2017 9/27/2017