ML18150A315

Request for Exemption from 10 CFR 50.82(a)(8)(i)(A)

ML18150A315
Person / Time
Site:	Vermont Yankee
Issue date:	05/25/2018
From:	State S Entergy Nuclear Vermont Yankee, NorthStar Group Services, NorthStar Vermont Yankee
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
BY 18-023, EPID L-2017-LLM-0002
Download: ML18150A315 (18)

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NorthStar Scott E. State CEO Northstar Group Services, Inc.

370 7th Avenue, Suite 1803 New York, NY 10001 Phone (212) 951-3660 Fax (212) 951-8923 www.northstar.com 10 CFR 50.12 10 CFR 50.82(a)(8)(i)(A)

BW 18-023 May 25, 2018 ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 20555-0001

SUBJECT:

Request for Exemption from 10 CFR 50.82(a)(8)(i)(A)

(EPID No. L-2017-LLM-0002)

Vermont Yankee Nuclear Power Station Docket No. 50-271 License No. DPR-28

REFERENCES:

1. Letter, Entergy Nuclear Operations, Inc. to USNRC, "Application for Order Consenting to Direct and Indirect Transfers of Control of Licenses and Approving Conforming License Amendment and Notification of Amendment to Decommissioning Trust Agreement,"

BW 17-005, dated February 9, 2017 (ML17045A140)

2. Letter, Northstar Group Services, Inc. to USN RC, "Notification of Revised Post-Shutdown Decommissioning Activities Report (Revised PSDAR)," dated April 6, 2017 (ML17096A394)

3. Letter, Northstar Group Services, Inc. to USNRC, "Response to Request for Additional Information Regarding the Request for Direct and Indirect License Transfer from Entergy to Northstar (EPIC No. L-2017-LLM-0002)," BW 18-016, dated May 21, 2018

4. Letter, USNRC to Entergy Nuclear Operations, Inc., "Exemptions from the Requirements of 10 CFR Part 50, Sections 50.82(a)(8)(i)(A) and 50.75(h)(1)(iv)," NW 15-075, dated June 17, 2015 (ML15128A219)

Dear Sir or Madam:

Pursuant to 10 CFR 50.12, Northstar Group Services, Inc. (Northstar), on behalf of Entergy Nuclear Vermont Yankee, LLC (to be known as Northstar Vermont Yankee, LLC) requests an exemption from 10 CFR 50.82(a)(8)(i)(A) for Vermont Yankee Nuclear Power Station (WNPS)

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BVY 18-023 / page 2 of 3 to allow use of up to $20 million of funds from the VYNPS nuclear decommissioning trust fund (NOT, or trust fund) for purposes of managing irradiated fuel on a "revolving" basis. The exemption requested in the attachment to this letter would only apply if the transfer of the VYNPS licenses to Northstar, if approved by the NRG, as discussed below, is granted.

Reference 1 is a request for direct and indirect transfers of control of the VYNPS licenses to Northstar, and Reference 1 provided information regarding the projected cost of decommissioning following the transfers. In addition, by letter dated April 6, 2017 (Reference 2), Northstar submitted a Revised Post-shutdown Decommissioning Activities Report (PSDAR) with a site specific decommissioning cost estimate and a description of its plans for decommissioning and irradiated fuel management, as an update pursuant to 1O GFR 50.82(a)(7) if the application for license transfers is approved. In response to an NRG request for additional information (RAI) related to the review of the license transfer application, Northstar stated that it would submit an exemption request for the use of up to $20 million from the VYNPS trust fund for spent fuel management (Reference 3, Response to RAl-3).

10 GFR 50.82(a)(8)(i)(A) states that decommissioning trust funds may be used by licensees if the withdrawals are for expenses for legitimate decommissioning activities consistent with the definition of decommissioning in 1O GFR 50.2. The definition of "decommission" in 10 GFR 50.2 does not include activities associated with irradiated fuel management. Therefore, an exemption from 1O GFR 50.82(a)(8)(i)(A) is needed to allow Northstar to use trust funds for irradiated fuel management. By letter dated June 17, 2015 (Reference 4), NRG granted an exemption to Entergy Nuclear Operations, Inc. (ENOI) to authorize the use of approximately

$225 million in projected trust funds to pay for operations and maintenance costs incurred in the management of irradiated fuel during an assumed 60-year SAFSTOR period. However, a new exemption is required to support the proposed license transfer, because Northstar plans to promptly commence decommissioning, which will reduce the projected earnings on NOT assets over time.

Northstar agrees that its use of NOT funds for irradiated fuel management costs will not exceed

$20 million at any given time, and proposes that this "not to exceed" limitation be applied on a revolving basis, i.e., if Northstar returns funds to the NOT, this would reduce the amount deemed withdrawn under the cumulative limitation. The attached exemption request includes an annual cash flow analysis that demonstrates that the trust fund contains the amount needed to cover the estimated costs of radiological decommissioning and $20 million in irradiated fuel management activities.

The requested exemption from 10 GFR 50.82(a)(8)(i)(A) is permissible under 1O GFR 50.12, because it will not present an undue risk to the public health and safety, and application of the regulation in this particular circumstance is not necessary to achieve the underlying purpose of the rule. The supporting cash flow analysis provided as Enclosure 1 to the attached exemption request is reproduced for convenience from Enclosure 1 provided with the response to RAl-1 in Reference 3. This analysis demonstrates that the trust fund contains adequate funds to cover the estimated costs of radiological decommissioning and the additional funds for $20 million in irradiated fuel management activities that are covered by the exemption request. Therefore, application of 10 GFR 50.82(a)(8)(i)(A) restricting use of the trust fund is not necessary to ensure adequate funding for radiological decommissioning of VYNPS. Application of the rule would impose an unnecessary burden on Northstar to provide additional, unnecessary funding for irradiated fuel management activities. Thus, special circumstances are present.

The requested exemption is consistent with the Revised PSDAR (Reference 3), and it would only apply upon the transfer of the VYNPS licenses to Northstar (Reference 1). This exemption request does not affect the terms or basis for the exemption from 10 GFR 50.82(a)(8)(i)(A)

BVY 18-023 I page 3 of 3 previously granted to ENOI to allow use of WNPS NOT withdrawals for certain irradiated fuel management expenses (Reference 4), which is expected to remain in effect until the transfer of the WNPS licenses to Northstar, if approved.

The annual reporting requirements in 10 CFR 50.82(a)(8)(v) and (vi) will allow continual NRC oversight of the status of the trust fund.

Northstar requests approval of this exemption request by August 31, 2018, or on a schedule to support the ongoing review of Reference 1. The proposed transfer of the WNPS licenses is expected to occur by the end of 2018, after the movement of all spent nuclear fuel to the Independent Spent Fuel Storage Installation (ISFSI) is expected to be complete, contingent upon obtaining the required regulatory approvals. The exemption is needed in order to allow Northstar to use a portion of the funds from the trust fund up to $20 million for ongoing operation and maintenance of the ISFSI.

This letter contains no new regulatory commitments.

Should you have any questions concerning this letter or require additional information, please contact Mr. Gregory G. DiCarlo at 203-222-0584 or gdicarlo@NorthStar.com.

Sincerely,

Attachment:

Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) cc: Regional Administrator, Region 1 U.S. Nuclear Regulatory Commission 2100 Renaissance Blvd, Suite 100 King of Prussia, PA 19406-2713 Mr. Jack D. Parrott, Sr. Project Manager Office of Nuclear Material Safety and Safeguards U.S. Nuclear Regulatory Commission Mail Stop T-5A 10 Washington, DC 20555 Ms. June Tierney, Commissioner Vermont Department of Public Service 112 State Street - Drawer 20 Montpelier, Vermont 05602-2601

BVY 18-023 Docket no. 50-271 Attachment 1 Vermont Yankee Nuclear Power Station Request for Exemption from 10 CFR 50.82(a)(8)(i)(A)

Vermont Yankee Nuclear Power Station Request for Exemption from 10 CFR 50.82(a)(8)(i}(A)

I. DESCRIPTION Pursuant to 10 CFR 50.12, Northstar Group Services, Inc. (Northstar), on behalf of Entergy Nuclear Vermont Yankee, LLC (to be known as Northstar Vermont Yankee, LLC) (Northstar VY) requests an exemption from 10 CFR 50.82(a)(8)(i)(A) for Vermont Yankee Power Station (VYNPS) to allow use of up to $20 million of funds from the VYNPS nuclear decommissioning trust fund (NOT, or trust fund) for purposes of managing irradiated fuel.

By letter dated January 12, 2015 (Reference 1), Entergy Nuclear Operations, Inc. (ENOI) submitted certifications for permanent cessation of reactor operations at VYNPS and permanent removal of fuel from the reactor vessel pursuant to 10 CFR 50.82(a)(1 ). Therefore, as specified in 10 CFR 50.82(a)(2), the 10 CFR Part 50 license for VY no longer authorizes operation of the reactor or emplacement or retention of fuel into the reactor vessel.

Thereafter, Entergy and Northstar agreed to a transaction whereby VYNPS would be transferred to Northstar, and Northstar would commence the prompt decommissioning of VYNPS. NRC's approval for this transaction was requested in Reference 2, and information regarding the NorthStar's projections of the cost of decommissioning was provided in Reference 2. In addition, NorthStar's detailed site specific decommissioning cost estimate and

• a description of its plans for irradiated fuel management were provided in a VYNPS Revised Post-Shutdown Decommissioning Activities Report (Revised PSDAR) (Reference 3). The requested exemption is consistent with the Revised PSDAR, and it would only apply upon the transfer of the VYNPS licenses, if approved.

In Reference 4, NRC granted an exemption to ENOI to authorize the use of a projected approximately $225 million in commingled trust funds to pay for operations and maintenance costs incurred in the management of irradiated fuel during an assumed 60.year SAFSTOR period. A new exemption is required, because NorthStar plans to promptly commence decommissioning, which will reduce the projected earnings on NOT assets over time. But, Northstar agrees that its use of commingled NOT funds for irradiated fuel management costs will not exceed $20 million. Northstar proposes that this "not to exceed" limitation be applied on a revolving basis, i.e., if Northstar returns funds to the NOT, this would be a credit against past withdrawals under the cumulative limitation.

The annual cash flow analysis demonstrates that the trust fund contains the amount needed to cover the estimated costs of radiological decommissioning and the $20 million in irradiated fuel management activities that are within the scope of this exemption request. However, 10 CFR 50.82(a)(8)(i)(A) states that decommissioning trust funds may be used by licensees if the withdrawals are for expenses for legitimate decommissioning activities consistent with the definition of decommissioning in 10 CFR 50.2.

The definition of "decommission" in 10 CFR 50.2 does not include activities associated with irradiated fuel management. Therefore, an exemption from 10 CFR 50.82(a)(8)(i)(A) is needed to allow Northstar to use trust funds for irradiated fuel management. The exemption would only cover those irradiated fuel management activities described in the Revised PSDAR that will be funded by the trust. Irradiated fuel management activities that are planned to be funded from sources other than the trust fund are not within the scope of this exemption request.

The requested exemption from 10 CFR 50.82(a)(8)(i)(A) is permissible under 10 CFR 50.12, because it will not present an undue risk to the public health and safety, and application of the

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BVY 18-023 / Attachment 1 / Page 2 of 12 regulation in this particular circumstance is not necessary to achieve the underlying purpose of the rule. The cash flow analysis provided as Enclosure .1 demonstrates that the trust fund contains adequate funds to cover not only the estimated costs of radiological decommissioning but also additional funds for the proposed $20 million in irradiated fuel management activities that are covered by the exemption request. Therefore, application of 10 CFR 50.82(a)(8)(i)(A) restricting use of the trust fund is not necessary to ensure adequate funding for radiological decommissioning of VYNPS. Application of the rule would impose an unnecessary burden on Northstar to provide additional, unnecessary funding for irradiated fuel management activities.

Therefore, there are special circumstances.

The annual reporting requirements in 10 CFR 50.82(a)(8)(v) and (vi) will allow continuous NRC oversight of the status of the trust fund.

II. BACKGROUND As described in the VYNPS Revised PSDAR (Reference 3), Northstar has decided to use the DEGON method of decommissioning. It plans to commence prompt activities in order to complete decommissioning by as early as 2026. Thereafter, Northstar will maintain an ISFSI until .the Secretary of Energy takes title to the irradiated fuel. This would delay (absent an exemption) the availability of excess amounts in the trust fund for irradiated fuel management.

The Revised PSDAR includes a site-specific decommissioning cost estimate (provided as Attachment 1 to the Revised PSDAR), which estimates the cost of radiological decommissioning, irradiated fuel management, and site restoration. The annual cash flow analysis provided in Enclosure 1 to this exemption request demonstrates that, with credited earnings during the DEGON period, the trust fund contains sufficient funds needed to cover the cost of radiological decommissioning and the irradiated fuel management activities that are within the scope of this exemption request ($20 million).

The analysis shows the beginning and ending trust fund balances and the annual decommissioning costs for radiological decommissioning. The analysis excludes other costs, such as Site Restoration costs or any irradiated fuel management costs in excess of $20 million.

In addition, the analysis does not take into account the $30 million escrow account that Northstar VY will establish at the time of license transfer and. does not take credit for the planned additional payments of $25 million to the escrow account. Entergy has agreed to contribute $20 million to this escrow account, and NorthStar has agreed to provide $10 million to this escrow account. After Northstar VY has withdrawn the first $100 million from the NOT, the payment to Northstar NOC for 10% of each invoice it issues will be deferred, and instead, these amounts will be deposited into the escrow account until an additional $25 million has been contributed.

The escrow account is projected to reach $55 million by the end of 2024, and it provides

. additional financial assurance for decommissioning. The escrow account will be available throughout the period of active decommissioning until NRC approves partial license termination, and certain site restoration activities have been completed, which is projected for 2026. At that time, the remaining facility would be only an ISFSI, and the escrow account would be expected to be released. Until that time, the analysis in Enclosure 1 shows a minimum combined surplus of NOT balance and escrow account that is projected to be at least $85 million. This represents a considerable surplus to the amounts required for radiological decommissioning.

BVY 18-023 / Attachment 1 / Page 3 of 12 The following are definitions for Enclosure 1: Definitions:

Column 1: 50.75 License Termination Cost Reflects the Total Annual License Termination Plan cost in 2016 dollars at a 0.0%

escalation rate Column 2: 50.54 (bb) Spent Fuel Management Cost Reflects the irradiated fuel management costs charged to trust ($20 million) in 2016 dollars at a 0.0% escalation rate Column 3: Total Withdrawals Total of Columns 1 and 2 Column 4: Beginning of Year Trust Fund Balance Reflects the beginning of year Trust Fund balance in 2016 dollars at a 0.0% escalation rate and 2.0% Fund Earnings Column 5: Total Withdraws Reflects the annual expenditures from the Trust Fund in 2016 dollars at a 0.0%

escalation rate (equals Column 4)

Column 6: DOE Recovery Reflects no recovery of damages from DOE Column 7: Trust Fund Earnings Reflects earnings on funds remaining in the trust. A 2.0% Earnings rate is used over a 0.0% cost escalation rate. The Annual 2.0% earnings are calculated on the beginning balance less 50% of the projected annual expenditure for each year. (Column 5 - 50% of Column 6

• 2.0%)

Column 8: Year Ending Trust Fund Balance Reflects the end of year Trust Fund balance after all projected earnings are added and all projected expenditures are deducted for year end specified at a 0.0% escalation rate and 2.0% Fund Earnings in 2014 dollars. (Column 5 - Column 6 + Column 7 + Column 8)

While this cash flow analysis demonstrates that with earnings the trust fund is sufficient to cover the estimated costs not only of radiological decommissioning, but also up to the $20 million in irradiated fuel management activities that are within the scope of the exemption request, 10 CFR 50.82(a)(8)(i)(A) is an impediment to such use.

10 CFR 50.82(a)(8)(i) states (in part) that decommissioning trust funds may be used by licensees if:

(A) The withdrawals are for expenses for legitimate decommissioning activities consistent with the definition of decommissioning in Section 50.2; 10 CFR 50.2 provides the following definition:

BVY 18-023 I Attachment 1 / Page 4 of 12 Decommission means to remove a facility or site safely from service and reduce residual radioactivity to a level that permits -

1) Release of the property for unrestricted use and termination of the license; or

2) Release of the property under restricted conditions and termination of the license.

NRC staff guidance regarding the regulations discussed above indicates that decommissioning activities do not include irradiated fuel management. (See, e.g., NUREG-1713, "Standard Review Plan for Decommissioning Cost Estimates for Nuclear Power Reactors," pg. 2 ("Other activities related to facility deactivation and site closure, including operation of the spent fuel storage pool, construction and operation of an independent spent fuel storage installation (ISFSI) ... are not included in the NRG definition of decommissioning. '1 (Reference 5).

Ill. REASONABLE ASSURANCE THAT ADEQUATE FUNDS WILL BE AVAILABLE FOR DECOMMISSIONING The exemption request does not involve any changes to other regulations that serve to provide reasonable assurance that adequate funds will be available for decommissioning:

10 CFR 50.82(a)(8)(v) states the following:

"After submitting its site-specific DGE required by paragraph (a)(4)(i) of this section, and until the licensee has completed its final radiation survey and demonstrated that residual radioactivity has been reduced to a level that permits termination of its license, the licensee must annually submit to the NRG, by March 31, a financial assurance status report. The report must include the following information, current through the end of the previous calendar year:

(A) The amount spent on decommissioning, both cumulative and over the previous calendar year, the remaining balance of any decommissioning funds, and the amount provided by other financial assurance methods being relied upon; (B) An estimate of the costs to complete decommissioning, reflecting any difference between actual and estimated costs for work performed during the year, and the decommissioning criteria upon which the estimate is based; (G) Any modifications occurring to a licensee's current method of providing financial assurance since the last submitted report; and (D) Any material changes to trust agreements or financial assurance contracts."

10 CFR 50.82(a)(8)(vi) states that:

"If the sum of the balance of any remaining decommissioning funds, plus earnings on such funds calculated at not greater than a 2 percent real rate of return, together with the amount provided by other financial assurance methods being relied upon, does not cover the estimated cost to complete the decommissioning, the financial assurance status report must include additional financial assurance to cover the estimated cost of completion."

BVY 18-023 / Attachment 1 / Page 5 of 12 These requirements serve to periodically inform the NRC of the status of the decommissioning activities and trust fund performance, as well as any changes to the financial arrangements related to the establishment and maintenance of the trust fund. These periodic reports also require licensees to provide additional financial assurance if the trust fund does not cover the estimated cost to complete decommissioning. It is also noted that 10 CFR 50.82(a)(vii) requires an annual report on the status of funding for irradiated fuel management.

Additionally, 10 CFR 50.82(a)(6) prohibits licensees from performing any decommissioning activities that foreclose unrestricted site release, result in significant environmental impacts not previously reviewed, or result in there no longer being reasonable assurance that adequate funds will be available. Also, 10 CFR 50.82(a)(7) requires notification to NRC and affected State(s) prior to any changes that significantly increase the decommissioning cost. These regulations provide assurance that, once the exemption is approved, reasonable assurance of adequate funding to complete decommissioning will be maintained.

As discussed in the VYNPS Revised PSDAR, Northstar plans to commence DECON of VYNPS, without an extended storage (SAFSTOR) period.

In the event that additional financial assurance beyond the amounts contained in the remaining trust fund for VYNPS is required pursuant to NRC regulations, Northstar VY would assess other available sources of financial assurance. For example, the balances available in the escrow account of initially $30 million and then increasing through earnings and additional periodic deposits of a cumulative amount of $25*million would qualify as financial assurance equivalent to using the prepayment method. If the $55 million plus earnings would be insufficient to provide adequate financial assurance, Northstar VY will obtain resources from its parent company to provide the required amount of financial assurance using a method approved in 10 CFR 50.75(e)(1). For example, it could deposit additional funds into a segregated account that satisfies the prepayment method in compliance with 10 CFR 50.75(e)(1)(i).

Northstar and Northstar VY have agreed to execute a financial Support Agreement in the amount of $140 million in which Northstar makes a legally binding and enforceable commitment to provide funding to Northstar VY for Decommissioning Costs as defined therein.

Decommissioning Costs are defined to include the funds needed "to pay the expenses of maintaining and decommissioning VYNPS safely and protecting the public health and safety and to meet Nuclear Regulatory Commission ("NRC") and State of Vermont requirements until the NRC License is terminated and site restoration under state-law requirements is complete."

Thus, Northstar VY is confident that its parent company will provide financial support, if needed to meet NRC's minimum financial assurance requirements.

IV. PRECEDENT This request is consistent with the recently approved exemptions for VYNPS (Reference 4),

Kewaunee Power Station (Reference 6), and Zion Nuclear Power Station, Units 1 and 2 (Reference 7).

V. JUSTIFICATION FOR EXEMPTION AND SPECIAL CIRCUMSTANCES Pursuant to 10 CFR 50.12, the Commission may, .upon application by any interested person or upon its own initiative, grant exemptions from the requirements of the regulations of Part 50 which are authorized by law, will not present an undue risk to the public health and safety, and are consistent with the common defense and security. 10 CFR 50.12 also states that the Commission will not consider granting an exemption unless special circumstances are present.

BVY 18-023 / Attachment 1 / Page 6 of 12 As discussed below, this exemption request satisfies the provisions of 10 CFR 50.12.

A. The exemption is authorized by law The proposed exemption from 10 CFR 50.82(a)(8)(i)(A) would allow Northstar to use a portion of the funds from the decommissioning trust fund for irradiated fuel management, consistent with the VYNPS Revised PSDAR. As stated above, 10 CFR 50.12 allows the NRC to grant exemptions from the requirements of 10 CFR Part 50. The proposed exemption would not result in a violation of the Atomic Energy Act of 1954, as amended, or the Commission's regulations. Therefore, the exemption is authorized by law.

B. The exemption will not present an undue risk to public health and safety The underlying purpose of 10 CFR 50.82(a)(8)(i)(A) is to provide reasonable assurance that adequate funds will be available for decommissioning of power reactors. Based on the site-specific cost estimate and the cash flow analysis provided in the Enclosure 1, use of a portion of the trust fund for irradiated fuel management activities will not adversely impact NorthStar's ability to terminate the VYNPS license (i.e., complete radiological decommissioning) as planned, consistent with the schedule and costs contained in the VYNPS Revised PSDAR.

The exemption does not involve any significant changes to the types or amounts of effluents that may be released offsite as a result of site activities associated with radiological decommissioning and irradiated fuel management, only the potential funding sources for those activities. Similarly, there is no significant increase in occupational or public radiation exposure. This exemption does not diminish the effectiveness of other regulations that ensure available funding for decommissioning, include 10 CFR 50.82(a)(6) which prohibits licensees from performing any decommissioning activities that could foreclose unrestricted release of the site, result in significant environmental impacts not previously reviewed, or result in there no longer being reasonable assurance that adequate funds will be available for decommissioning. Therefore, the exemption will not present an undue risk to the public health and safety.

C. The exemption is consistent with the common defense and security The proposed exemption would allow Northstar to use a portion of the trust funds for irradiated fuel management, consistent with the VYNPS Revised PSDAR. Irradiated fuel management is an integral part of the planned VYNPS decommissioning process as discussed in the VYNPS Revised PSDAR. The exemption to enable use of a portion of the funds in the trust fund for irradiated fuel management does not involve any significant changes to the VYNPS security plans, and therefore will not adversely affect NorthStar's ability to physically secure the site and to protect special nuclear material.

Therefore, the proposed exemption is consistent with the common defense and security.

D. Special Circumstances Pursuant to 10 CFR 50.12(a)(2), the NRC will not consider granting an exemption to its regulations unless special circumstances are present. Special circumstances are present as discussed below.

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BVY 18-023 / Attachment 1 / Page 7 of 12

1. Application of the regulation in the particular circumstances would not serve the underlying purpose of the rule or is not necessary to achieve the underlying purpose of the rule. (1 O CFR 50.12(a)(2)(ii))

The underlying purpose of 10 CFR 50.82(a)(8)(i)(A) is to provide reasonable assurance that adequate funds will be available for decommissioning of power reactors. Strict application of the rule would prohibit withdrawal of funds from the trust fund for activities associated with irradiated fuel management until final radiological decommissioning at VYNPS has been completed. However, Enclosure 1 demonstrates that adequate funds are available in the trust fund to complete license termination and the irradiated fuel management activities within the scope of this exemption request ($20 million). The Enclosure 1 cash flow analysis projects that the trust fund will contain $49 million at the end of license termination activities in 2053 (using a 0.0% escalation rate and a 2.0%

annual fund growth rate on remaining funds). In this analysis, assuming the $20 million was withdrawn by 2022, the trust fund balance nevertheless remains positive through 2053.

This determination of reasonable assurance that adequate funds will be available for decommissioning also does not take into to account the $30 million escrow account, an additional $25 million of contributions to the escrow account by 2023, and earnings on the escrow account balances. The analysis shows that the combined NOT and escrow balances would have more than $85 million in excess funds at the time partial license termination is anticipated to be approved by NRC in 2026.

Therefore, since the underlying purposes of the rule would be achieved by allowing Northstar to use the trust fund to fund the irradiated fuel management activities within the scope of the exemption, the special circumstances of 10 CFR 50.12(a)(2)(ii) are present, provided that the amounts withdrawn are limited to a total of $20 million at any given time.

2. Compliance would result in undue hardship or other costs that are significantly in excess of those contemplated when the regulation was adopted, or that are significantly in excess of those incurred by others similarly situated. (1 O CFR 50.12(a)(2}(iii))

The NRC has stated that funding for irradiated fuel management may be commingled in the decommissioning trust provided the licensee is able to identify and account for the radiological decommissioning funds separately from the funds set aside for irradiated fuel management (see NRC Regulatory Issue Summary 2001-07, Rev 1, "10 CFR 50.75 Reporting and Recordkeeping for Decommissioning Planning," dated January 8, 2009 (Reference 8), and Regulatory Guide 1.184, Rev 1, "Decommissioning of Nuclear Power Reactors," (Reference 9)). As such, the NRC did not intend to prevent the use of these funds solely because they are commingled, and to do so would create an unnecessary financial burden without any corresponding safety benefit. Consistent with this guidance, the NRC does not preclude use of funds from the decommissioning trust in excess of those needed for radiological decommissioning for other purposes, such as irradiated fuel management.

The adequacy of the trust fund to cover both the cost of activities associated with decommissioning and the irradiated fuel management activities within the scope of this request is supported by the cash flow analysis in Enclosure 1.

BVY 18-023 / Attachment 1 / Page 8 of 12 If Northstar cannot use-its trust fund for irradiated fuel management a~tivities, it would be forced to provide additional funding that would not be recoverable from the trust fund until the VYNPS operating license is terminated. To prevent access to the excess funds in the trust would impose an unnecessary and undue burden in excess of that contemplated when the regulation was adopted without any corresponding safety

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• Therefore, compliance with the rule would result in an undue hardship or other costs that are significantly in excess of those contemplated when the regulation was adopted, or that are significantly in excess of those incurred by others similarly situated, and the special circumstances required by 10 CFR 50.12(a)(2)(iii) are present.

VI. ENVIRONMENTAL ASSESSMENT A. Environmental Considerations Consistent with the Environmental Assessment prepared by NRC staff to document its environmental review (Reference 10) for the granting of the previous exemption from 10 CFR 50.82(a)(8)(i)(A) to ENOI allowing use of the VYNPS trust fund for certain irradiated fuel management activities (Reference 4), and pursuant to 10 CFR 51.21, the following environmental considerations are provided.

1. Description of the Action Northstar VY requests an exemption from the requirements set forth in 10 CFR 50.82(a)(8)(i)(A) restricting the use of decommissioning trust funds. Specifically, the exemption would allow Northstar VY to use funds from the Vermont Yankee Nuclear Power Station (VYNPS) trust fund for irradiated fuel management activities, not associated with radiological decommissioning.

2. Need for the Action By letter dated January 12, 2015 (Reference 1), ENOI submitted certifications to the NRC that it had permanently ceased power operations at VY and that the VY reactor vessel had been permanently defueled.

An exemption is needed to access up to $20 million in the trust fund, in excess of those funds needed for radiological decommissioning, to fund irradiated fuel management activities, which are not associated with radiological decommissioning, in order to avoid an unnecessary financial burden. As required by 10 CFR 50.82(a)(8)(i)(A),

decommissioning trust funds may be used by a licensee if the withdrawals are for expenses for legitimate decommissioning activities consistent with the definition of decommissioning in 10 CFR 50.2. This definition addresses radiological decommissioning and does not include activities associated with irradiated fuel management. Therefore, Northstar VY needs an exemption from 10 CFR 50.82(a)(8)(i)(A) to allow the use of funds from the trust fund for irradiated fuel management activities.

3. Environmental Impacts of the Action The exemption is of a financial nature and would allow Northstar VY to use the trust fund for irradiated fuel management activities. The exemption does not authorize any additional regulatory or land-disturbing activities, but would allow Northstar VY to

BVY 18-023 / Attachment 1 / Page 9 of 12 finance irradiated fuel management activities, which supports decommissioning. The analysis provided in support of the exemption shows that the existing funds, planned future contributions, and projected earnings of the trust fund provide reasonable assurance of adequate funding to complete all NRC required decommissioning activities and to use up to $20 million for irradiated fuel management. Consequently, Northstar VY has determined that application of the 10 CFR 50.82(a)(8)(i)(A) requirement that funds from the Trust only be used for decommissioning activities and not for irradiated fuel management is not necessary to provide reasonable assurance that adequate funds will be available for the radiological decommissioning of VY.

Northstar VY's determination is supported by the fact that it will maintain a comprehensive, regulation-based decommissioning funding oversight program to provide reasonable assurance that sufficient funding will be available for the radiological decommissioning of VY. After the site-specific Decommissioning Cost Estimate as required by 10 CFR 50.82(a)(8)(iii) is submitted, and until completing its final radiation survey and demonstrating that residual radioactivity has been reduced to a level that permits termination of its license as required by 10 CFR 50.82(a)(11 ), financial assurance status reports must be submitted to the NRC annually as required by 10 CFR 50.82(a)(8)(v). The report must include, among other things, amounts spent on decommissioning, the remaining trust fund balance, and estimated costs to complete radiological decommissioning. If the remaining trust fund balance, plus earnings on such funds calculated at not greater than a 2 percent real rate of return, plus any other financial assurance methods being relied upon, does not cover the estimated costs to complete radiological decommissioning, 10 CFR 50.82(a)(8)(vi) requires that additional financial assurance to cover the estimated costs to complete radiological decommissioning must be provided. These annual reports provide a means for the NRC to monitor the adequacy of the funding available for the radiological decommissioning of VYNPS notwithstanding the exemption allowing Northstar VY to use funds for irradiated fuel management activities from the trust fund.

The environmental impacts of decommissioning have been generically evaluated by the NRC and documented in NUREG-0586, Supplement 1, Generic Environmental Impact Statement (GEIS) on Decommissioning of Nuclear Facilities (Decommissioning GEIS)

(Reference 11 ). Northstar VY's Revised Post-Shutdown Decommissioning Activity Report (Revised PS DAR) (Reference 3) discussed that the impacts from the planned decommissioning activities at VY are less than and bounded by the impacts considered in the Decommissioning GEIS and NUREG-1496, Generic Environmental Impact Statement in Support of Rulemaking on Radiological Criteria for License Termination of NRC Licensed Nuclear Facilities (Reference 12). Northstar VY believes that the Revised PSDAR contained the required information, including a discussion that provides the reasons for concluding that the environmental impacts associated with the decommissioning activities at VY will be bounded by previous analyses.

The exemption does not authorize NorthStar VY to perform new land-disturbing activities that could affect land use, soils and geology, water resources, ecological resources, or historic and cultural resources. The exemption does not authorize Northstar VY to conduct additional regulatory activities, outside those already licensed by the NRC; therefore, there are no incremental effects to air quality, traffic and transportation, socioeconomics, environmental justice, or accidents. The exemption only changes the source of funds allowed for managing irradiated fuel activities. The exemption will not increase the probability or consequences of accidents and does not result in any significant changes in the types or amounts of effluents that are, or may be, released offsite. Northstar VY must continue to comply with all appropriate NRC regulations

BVY 18-023 / Attachment 1 / Page 10 of 12 related to occupational and public radiation exposure, and thus, the exemption will not result in an increase to occupational or public doses. Finally, Northstar VY is required to maintain adequate funding for the radiological decommissioning of VY and to provide information regarding this funding to the NRC. Accordingly, Northstar VY has determined that there are no potential incremental environmental impacts that would result from granting of the requested exemption.

4. Environmental Impacts of the Alternatives to the Action As an alternative to the action, the NRC staff could deny Northstar VY's exemption request. Denial of the exemption request would result in Northstar VY using funds from the trust only for radiological decommissioning and not also for irradiated fuel management activities as described in the exemption request. The environmental impacts of this alternative would be substantively the same as the environmental impacts for granting the exemption request, because there are no potential incremental environmental impacts as a result of granting the exemption request. Therefore, the environmental impacts of the alternative to the action would be the same as those already considered by the previous environmental analyses.

5. Alternative Use of Resources The requested action only involves a change in the source of funds allowed for managing irradiated fuel activities, and therefore does not involve the use of any different resources than those previously considered.

B. Analysis The request for exemption from 10 CFR 50.82(a)(8)(i)(A) to allow use of VYNPS nuclear decommissioning trust funds for management of irradiated fuel activities up to

$20 million has no adverse impact to the environment. Approval of the exemption request would allow Northstar VY access to excess funds in the trust, based on projected trust fund growth, future contributions, and estimated expenditures, while continuing to demonstrate reasonable assurance of available trust funds to complete radiological decommissioning. The proposed action would not result in an adverse impact to the environment, unexpected expenditures, or other uncertainties or risks.

Since the proposed exemption relates solely to the source of funding for irradiated fuel management in the specified amount, it does not result in there no longer being reasonable assurance of sufficient trust funds to complete radiological decommissioning of the VYNPS site, and does not significantly affect any of the decommissioning activities or processes previously reviewed. On this basis, the proposed exemption will not have a significant effect on the quality of the human environment.

As a result of the environmental considerations discussed above, Northstar VY concludes that the proposed exemption, which will allow for the use of the VYNPS trust fund for expenditures associated with irradiated fuel management up to $20 million, is in the public interest in that it allows Northstar VY to avoid unnecessary and undue costs to cover these expenses from other sources, with no potential incremental environmental impacts.

The proposed exemption does not require any additional Federal permits, licenses, approvals, or other entitlements, except that it would only apply upon the transfer of the VYNPS licenses (Reference 2), if approved.

BVY 18-023 / Attachment 1 / Page 11 of 12 VII. CONCLUSION The proposed exemption from 10 CFR 50.82(a)(8)(i)(A) would allow Northstar VY to use up to

$20 million from the VYNPS decommissioning trust fund for the management of irradiated fuel.

Granting this exemption will be consistent with the underlying purposes of NRC decommissioning regulations as it; (1) would not foreclose release of the site for possible unrestricted use; (2) would not result in significant environmental impacts not previously reviewed by the NRC; and (3) would not undermine the existing and continuing reasonable assurance that adequate funds will be available for decommissioning.

Pursuant to 10 CFR 50.12, the requested exemption is authorized by law, will not present an undue risk to the public health and safety, and is consistent with the common defense and security. Special circumstances are present as set forth in 10 CFR 50.12(a)(2)(ii) and (iii).

References

1. Letter, Entergy Nuclear Operations, Inc. to USNRC, "Application for Order Consenting to Direct and Indirect Transfers of Control of Licenses and Approving Conforming License Amendment and Notification of Amendment to Decommissioning Trust Agreement,"

BVY 17-0.05, dated February 9, 2017 (ML17045A140)

2. Letter, Northstar Group Services, Inc. to USNRC, "Notification of Revised Post-Shutdown Decommissioning Activities Report (Revised PSDAR)," dated April 6, 2017 (ML17096A394)

3. Letter, Entergy Nuclear Operations, Inc. to USNRC, "Certifications of Permanent Cessation of Power Operations *and Permanent Removal of Fuel from the Reactor Vessel," BVY 15-001, dated January 12, 2015 (ML15013A426)

4. Letter, USNRC to Entergy Nuclear Operations, Inc., "Exemptions from the Requirements of 10 CFR Part 50, Sections 50.82(a)(8)(i)(A) and 50.75(h)(1)(iv)," NVY 15-075, dated June 17, 2015 (ML15128A219)

5. NUREG-1713, "Standard Review Plan for Decommissioning Cost Estimates for Nuclear Power Reactors," dated December 2004

6. Letter, NRC to Dominion Energy Kewaunee, Inc., "Kewaunee Power Station -

Exemptions from the Requirements of 10 CFR 50, Section 50.82(a)(8)(i)(A) and Section 50.75(h)(1)(iv) (TAC No. MF1438)," dated May 21, 2014 (ML13337A287)

7. Letter, NRC to ZionSolutions LLC, "Zion Nuclear Power Station, Units 1 and 2 - Request for Exemption from Certain Decommissioning Trust Fund Requirements of the Decommissioning Regulations (TAC Nos. J52941 and J52942)," dated July 21, 2014 (ML14030A590)

8. NRC Regulatory Issue Summary 2001-07, Rev 1, "10 CFR 50.75 Reporting and Recordkeeping for Decommissioning Planning," dated January 8, 2009 (ML083440158)

9. Regulatory Guide 1.184, Rev 1, "Decommissioning of Nuclear Power Reactors,"

(ML13144A840)

10. Federal Register Vol. 82, No. 246, page 61040 (82 FR 61040), Nuclear Regulatory

BVY 18-023 / Attachment 1 / Page 12 of 12 Commission, Final environmental assessment and finding of no significant impact; issuance, Entergy Nuclear Operations, Inc.; Vermont Yankee Nuclear Power Station, Docket No. 50-271, NRC-2015-0157, dated December 26, 2017 (corrected by 83 FR 3368, dated January 24, 2018)

11. NUREG-0586, Final Generic Environmental Impact Statement on Decommissioning of Nuclear Facilities: Supplement 1, Regarding the Decommissioning of Nuclear Power Reactors, Final Report, November 2002

12. NUREG-1496, Generic Environmental Impact Statement in Support of Rulemaking on Radiological Criteria for License Termination of NRG-Licensed Nuclear Facilities, July 1997

BVY 18-023 / Attachment 1 / Enclosures Enclosure 1 Cash Flow Analysis (License Termination Plus $20 million for Spent Fuel)

ENCLOSURE 1 Northstar Nuclear Power Station - Prompt D&D Methodology Annual Cash Flow Analysis - Total License Termination, Spent Fuel Management less Dry Fuel Costs (In Thousands of Period of Performance Dollars)

Base Case NDT Model - $20M Spent Fuel Management Withdrawals Column 2 Column 3 Column 4 Column 1 Column 7 Column 8 50.54 (bb) Total Beginning of Column 5 Column 6 50.75 Trust Fund Vear Ending Vear Spent Fuel Withdrawals Vear Trust Fund Total DOE License Earnings Trust Fund Management Cost (Sum of Balance Withdraws Recovery Termination Cost (4) Balance (1) (2) Columns 1-2) (3) 2019 66,672 9,241 75,913 513 350 (75,913) 0 8,749 446,186 2020 65,612 6,141 71,753 446,186 (71,753) 0 7,489 381,921 2021 69,745 4,241 73,986 381,921 (73,986) 0 6, 159 314,094 2022 78,438 377 78,815 314,094 (78,815) 0 4,706 239,985 2023 87,519 - 87,519 239,985 (87,519) 0 3,049 155,515 2024 76,253 - 76,253 155,515 (76,253) 0 1,585 80,847 2025 41,369 - 41,369 80,847 (41,369) 0 790 40,268 2026 9,390 - 9,390 40,268 (9,390) 0 618 31,495 2027 0 - 0 31,495 0 0 630 32,125 2028 0 - 0 32,125 0 0 643 32,768 2029 0 - 0 32,768 0 0 655 33,423 2030 0 - 0 33,423 0 0 668 34,092 2031 0 - 0 34,092 0 0 682 34,773 2032 0 - 0 34,773 0 0 695 35,469 2033 0 - 0 35,469 0 0 709 36,178 2034 0 - 0 36,178 0 0 724 36,902 2035 0 - 0 36,902 0 0 738 37,640 2036 0 - 0 37,640 0 0 753 38,393 2037 0 - 0 38,393 0 0 768 39,161 2038 0 - 0 39,161 0 0 783 39,944 2039 0 - 0 39,944 0 0 799 40,743 2040 0 - 0 40,743 0 0 815 41,557 2041 0 - 0 41,557 0 0 831 42,389 2042 0 - 0 42,389 0 0 848 43,236 2043 0 - 0 43,236 0 0 865 44,101 2044 0 - 0 44,101 0 0 882 44,983 2045 0 - 0 44,983 0 0 900 45,883 2046 0 - 0 45,883 0 0 918 46,800 2047 0 - 0 46,800 0 0 936 47,736 2048 0 - 0 47,736 0 0 955 48,691 2049 0 - 0 48,691 0 0 974 49,665 2050 0 - 0 49,665 0 0 993 50,658 2051 0 - 0 50,658 0 0 1,013 51,671 2052 3,454 - 3,454 51,671 (3,454) 0 964 49,182 2053 498,452 20,000 518,452 513,3 50 (518,452) 0 54,284 49,112 518,452 Footnotes: (1) Annual Spent ISFSI Operations Costs (2) ISFSI Costs Paid from NDT limited to $20 million (3) Beginning NDT Balance of $513 million is the minimum pre-tax balance requi red pursuant to MIPA/DCAA (4) 2% annual earnings rate