ML20044F318

Decommissioning Funding Plan

ML20044F318
Person / Time
Site:	Claiborne
Issue date:	05/20/1993
From:	LOUISIANA ENERGY SERVICES
To:
Shared Package
ML20044F313	List: ML20044F312 ML20044F314 ML20044F317 ML20044F318
References
PROC-930520, NUDOCS 9305280015
Download: ML20044F318 (13)

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.i EXHIBIT I I

TO APPLICATION OF LOUISIANA ENERGY SERVICES I

Decommissioning Funding Plan f

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May 1993 t

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I EXHIBIT I - PAGE 1 TO APPLICATION OF i

LOUISIANA ENERGY SERVICES O

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LOUISIANA ENERGY SERVICES j

CLAIBORNE ENRICHMENT CENTER DECOMMISSIONING FUNDING PLAN L

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Introduction:==

Louisiana Energy Services

(" Application") hereby submits,

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as pursuant to the provisions of the Atomic Energy Act of 1954, amended, and the Rules and Regulations of the Nuclear Regulatory

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Commission, its Decommissioning Funding Plan for the Claiborne

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Enrichment Center.

This Decommissioning Funding Plan (" Plan")

sets forth that information required by 10 CFR Parts 40 and 70 t

regarding the Applicant's plans for funding the ultimate i

decommissioning of the Claiborne Enrichment Center.

As indicated below, Louisiana Energy Services presently I

intends to provide for decommissioning funding through an external trust, coupled with a surety bond, in accordance with i

applicable requirements of 10 CFR Parts 40 and 70.

Appropriate l

model documentation for this funding method is attached hereto.

Upon execution of the funding instruments, Louisiana Energy Services will supplement this portion of its application.

General Information:

i Facility

Description:

Louisiana Energy Services, a Delaware limited partr.ership, was formed to provide uranium enrichment services for commercial nuclear power plants for the purpose of

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1 generating electricity. These services are proposed to be provided at a facility to be known as the "Claiborne Enrichment

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Center," located in Claiborne Parish, Louisiana.1 i

Licensed Material:

The Application for the Claiborne i

Enrichment Center seeks authorization to operate that facility to produce enriched uranium in the U-235 isotope up to a nominal 5.000% enrichment.

The facility, when at full capacity, will i

nominally produce 1,500,000 kilograms of separative work (SWU) per year.

The unsealed uranium source material, and the unsealed special nuclear material, will contain uranium isotopes in i

amounts which exceed 10 times the applicable quantities set l

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Jf Details regarding the planned operations of the Claiborne

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Enrichment Center may be found in the Application for

-i Licenses, and the accompanying Safety Analysis Report - and Environmental Report.

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EXHIBIT I - PAGE 2 t

TO APPLICATION OF LOUISIANA ENERGY SERVICES forth in Appendix C to 10 CFR Part 20.

Accordingly, pursuant to s

10 CFR SS40.36(a) and 70.25(a), a Decommissioning Funding Plan is l

required.2 j

Schedule:

The projected completion date for the Claiborne Enrichment Center is March, 1996.

The facility is expected to reach full capacity in June, 1998.

Period of Operation:

The Application for Operation seeks i

authorization to operate for a period of thirty years.

i Decommissioning Costs:

Louisiana Energy Services has prepared a site-specific decommissioning costs estimate for the ultimate decommissioning of the Claiborne Enrichment Facility.

This cost estimate utilizes current information regarding the

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activities and associated costs of decommissioning.

Louisiana

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Energy Services has utilized both eristing engineering expertise, and actual decommissioning experience, from similar facilities i

decommissioned by Urenco, Ltd., in Europe, to develop this cost estimate.

Of course, the estimate and associated funding l

mechanisms will be adjusted over time, in accordance with the applica)::e provisions of 10 CFR Parts 40 and 70.

O Louisiana Energy Services present3y intends to utilize an Decommissioning Funding:

Is set forth in this Plan,

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external trust, coupled with a surety bond, to provide reasonable assurance of the availability of decommissioning funds when i

needed.

This funding mechanism is intended to satisfy the provisions of 10 CFR Parts 40 and 70 with respect to decommissioning financial assurance for license applicants under-i those provisions.

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The particular isotopes and quantities to be received and processed are described in Section 4.1 of the Safety Analysis Report.

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Decommissioning Cost Estimate:

Pursuant to 10 CFR SS40.36(d) and 70.25(e), Louisiana Energy l

Services has evaluated the estimated costs of decommissioning the l'

Claiborne Enrichment Center.

The facility will be decommissioned such that the site and facilities may be released for unrestricted use.

A summary of the estimated costs of decommissioning, arranged by principal activity, is set forth in the table below.

The sources of the cost estimate data are also provided below.3 As indicated, the total estimated cost of decommissioninr the facility is $409.5 million ($1996).

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Louisiana Energy Services' evaluation of decommissioning costs included an evaluation of current experience by one of the general partners in the project, Urenco, Ltd., at similar facilities in Europe.

Appropriate adjustments have been made to accutnt for cost differences associated with the performance of specific a"tivities in the United States.

Th experience and adjustments are documented in the Urenco paper " Decommissioning and Decontamination of a USJVC Plant," USPDC(89)07, 27 April, 1989.

Cost figure celected from this paper were escalated to 1996 dollars; other ci se, the selected figures were unchanged.

t The escalated figures include:

Decon Facility Capital Cost

$6.8 million System Cleaning

$1.1 million Dismantling

$6.8 million Decontamination

$13.7 million Salvage (aluminum only)

($7.9) million i

Sub-total (from Urenco figures)

$20.5 million In addition to the figures supplied by Urenco, the following

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costs were estimated directly for LES:

Decon Facility Labor Cost

$ 1.4 million This was taken to of capital cost above.

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A detailed description of the activities ascociated with decommissioning is also set forth in Section 11.8 of the Louisiana Energy Services Claiborne Enrichment Center Safety Analysis Report.

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i Decontamination of Decon Facility

$ 0.5 million An indtpendent estimate was provided by Naylor Industrial Services, Inc., transmitted by letter dated September 11, 1990.

Radioactive Waste Disposal

$ 1.4 million 2

This assumes 100 nP 0 $350 per ft, in 1992 dollars, escalated to 1996 dollars.

This cost of disposal is estimated specifically for radioactive waste disposal in the Central States Compact.

(References 5 and 6)

(The Urenco estimate of 200 nf of low-level waste in

't the cited reference was reduced by half due to a closer look at solid arisings from the decontamination process.

A facsimile from Urenco's Almelo facility, 23 August, 1990, provides an estimate of 2 nd of " citric cake" arisings.

This " citric cake" was considered in a

the Urenco cost estimate as a major portion of the low-level solid wastes from decommissioning; thus, it was concluded the estimate of 200 nd was high. )

/~N Hazardous / Mixed Waste Disposal 0.1 million Decontamination and decommissioning processes, as described in this section, do not result in the production of hazardous or mixed wastes for-disposal.

Normal accumulation of hazardous and mixed wastes will occur during the final months of CEC operation.

The volume of these final wastes, not due to D&D activities, are estimated to be approximately equivalent to the annual amounts listed in the CEC Safety Analysis Report, Table 7.1-1.

Tails Disposal

$384.6 million The annual tails disposal cost is estimated to be $12.8 million.

This is multiplied by 30 years to arrive at the $384.6 million figure.

Costs are based on converting UF, to U 0, with subsequent disposal in a 3

facility under cognizance of the NRC (other than a near-surface disposal facility).

U 0, conversion costs 3

are based on estimates by a vendor which could make this service available to LES.

Disposal costs are based on figures in The Energy Policy Act of 1992, Title X. regarding reimbursement made to licensees'for remedial action associated with uranium processing sites.

The figures in Title X also closely match the May 1993 i

EIHIBIT I - PAGE 5 TO APPLICATION OF LOUISIANA ENERGY SERVICES l

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costs of material disposition at a uranium mill.

The conversion and disposal costs are added and escalated to 1996 dollars.

The disposition of tails from the CEC, including potential disposition at the end of facility operation, is an element of authorized normal operating activities.

It involves neither decommissioning waste nor is it a part of decommissioning activities.

The disposal of these tails is analogous to the disposal of radioactive materials generated in the course of normal operations (even including spent fuel in the case of a power reactor), which is authorized by the operating i

license and subject te separate disposition requirements (i.e.,

requirements such as reflected in 10 CFR Part 20).

Such costs are not appropriately included in decommissioning costs (this principle (in the Part 50 context) is discussed in Regulatory Guide 1.159, Section 1.4.2, page 1.159-8).

Further, the

" tails" products from the CEC are not mill tailings, as regulated pursuant to the Uranium Mill Tailings Radiation Control Act, as amended (42 USC 7901, et seq) and 10 CFR Part 40, Appendix A, and are not subject to the financial requirements applicable to mill tailings.

Nevertheless, LES intends to provide during facility life for expected tails disposition costs (even assuming ultimate disposal as waste).

Funds to cover

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these costs, estimated at $12.8 million ($1996) per l

equivalent years of tails production, will be set aside during the operating life of the CEC.

Accordingly, v

tails disposition costs are now explicitly reflected in the funding table (also SAR Table 11.8-2, ER Table 4.4-2), which reflect both decommissioning funding and the separate matter of contingent end-of-life tails disposition funding.

Final Radiation Survey

$ 1.0 million This figure was estimated by two methods, as follows:

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The first method is by extrapolation from l

" Technology and Cost of Termination Surveys Associated With Decommissioning of Nuclear Facilities," NUREG 2241, February, 1982.

The 1980 costs of decommissioning a fuel fabrication facility and a UF6 Production facility were escalated at 5% per year to 1990.

The higher of the two costs, (calculated for a 1 I

mrem and a 5 mrem dose to the public),

were selected b

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and then averaged, for a total of $750,000.

Further escalatior: brings the cost to $950,000.

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The second estimate was roughly approximated at

$725,000, in 1990 dollars, and is escalated to 1996 dollars.

The estimate was based on experience, using the following assumptions:

12,000 hours0 days <br />0 hours <br />0 weeks <br />0 months <br /> for grid of property and gamma count

$23,000 for soil sampling i

150 core holes for depth profile Building size of 750' x 380' t

Workhour rate, including per diem, $60/ hour Extensive use of swiuns Final analyses and report included subtotal (from non-Urenco sources)

$ 389.0 million Total Estimate

$ 409.5 million i

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SUMMARY

OF DECOMMISSIONING COSTS Activity Estimated Cost

($1996)

Planning and Preparation 600,000 Decontamination Facility Installation 8,200,000 System Cleaning, Decontamination and Dismantling of Radioactive Facilities 21,500,000 Sale, Salvage (7.900,000)

Packaging, Shipping, and Disposal of Wastes 1,500,000 Final Radiation Survey 1,000,000 Tails Disposal 384,600,000 l Site Stabilization, and Long-Term Surveillance N/A Total

$409,500,000 l Finally, Louisiana Energy Services recognizes the need to adjust cost estimates and funding levels periodically, pursuant to 10 CFR SS40.36(d) and 70.25(e)..

These measures are described below.

Louisiana Energy Services also recognizes that, pursuant to 10 CFR SS40.42(c) (2) (iii) (d) and 70.38 (c) (2) (iii) (d),

it must update its detailed cost estimate at the time of license termination and provide, if necessary, additional assurance of the availability of adequate funds for completion of decommissioning.

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k Decommissioning Fundina Mechanism:

i Louisiana Energy Services presently intends to utilize an external trust, coupled with a surety bond, to provide reasonable assurance of decommissioning funding, pursuant to 10 CFR SS40.36(e) (3) and 70.25(f)(3). Accordingly, Louisiana Energy Services provides with this application model documentation related to the use of the external trust / surety method of providing decommissioning financial assurance.'

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finalization of the specific funding instruments to be utilized, Louisiana Energy Services will supplement its application to include the executed documentation.

Further, as indicated by the attached material, Louisiana Energy Services intends to provide continuous financial assurance from the time of initial licensing to the completion of decommissioning and termination of the license.

As noted, Louisiana Energy Services presently intends to utilize an external trust coupled with a surety bond to provide financial assurance for decommissioning.

The trust will be used to collect decommissioning funds over the life of the plant.

The surety bond will provide an ultimate guarantee that decommissioning costs will be paid in the event Louisiana Energy Services is unable to meet its decommissioning obligations at the k

time of decommissioning.

The trust and surety bond instruments will become effective upon LES receipt of licensed material.

'A copy of a model trust agreement and a copy of a model surety bond are provided in Appendices A and B, respectively, to this Plan.

Louisiana Energy Services describes below the particular attributes it presently anticipates including in the trust agreement and surety bond.

With respect to the trust, Louisiana Energy Services presently intends to provide for the following attributes.

First, the trust fund will be external to Louisiana Energy i

Services, with fund assets derived from periodic contributions 4/

The model documentation is derived from NRC guidance (see NRC Regulatory Guide 3.66,

" Standard Format and Content of Financial Assurance Mechanisms Required for Decommissioning Under 10 CFR Parts 3 0, 4 0, 7 0 and 72 " (June 1990).)

Lou.isiana Energy Services will consider this model documentati)n as guidance in preparing and executing funding instruments for the Claiborne Enrichment Center.

In the event Louisiana Energy Services ultimately selects another forn-of decommissioning funding, model documentation from Regulatory Guide 3.65 will also be used as guidance in the preparation of funding instruments.

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LOUISIANA LNERGY SERVICES

,r w NJ and administered by a trustee.

Second, the trust will be I

governed by a trust agreement which will provide, among other restrictions, for the distribution of fund assets only upon commencement of decommissioning activities.

Further,.the trust may retain property with face value, and the trustee nay make reasonable prudent investments, with investment income accruing to the trust.

With respect to the Surety Bond, Louiciana Energy Services presently anticipates providing for the following attributes.

First, the bond will be issued by a Company which is listed as a qualified surety listed in the Department of Treasury, Circular 570.

Second, the bond will be written for a specified term and l

will be renewable automatically unless the issuer serves notice i

at least 90 days prior to expiration of an intent not to renew.

Such notice must be served upon the NRC, the trustee of the Standby Trust, and Louisiana Energy Services.

Further, in the event Louisiana Energy Services is unable to provide an acceptable replacement within 30 days of such notice, the full amount of the bond will be payable automatically, prior to expiration, without proof of forfeiture.

The Surety Bond will require that any funds paid under its terns will be deposited directly into the external trust or, if

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necessary or appropriate, a Standby Trust by the surety cor.pany.

A copy of a model Standby Trust is provided as Appendix C to this plan.

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Adiusting Decommissioning Costs and Funding:

Pursuant to 10 CFR 9940.36(d) and 70.25(e), Louisiana Energy Services will update the decommissioning cost estimate for the Claiborne Enrichment Center and the associated funding levels over the life of the facility.

These updates will take into account changes resulting from inflation or site-specific faccors, such as changes in facility conditions or expected decommissioning procedures.

Louisiana Energy Services presently anticipates such updating to occur approximately every five years.

A record of the updating effort and results will be retained for review (see further discussion regarding recordkeeping, below).

The NRC will be notified of any material changes to the decommissioning cost estimate and associated funding levels (e.g.,

significant increases in costs beyond anticipated inflation).

To the extent the underlying instruments are revised to reflect changes in funding levels, the NRC will be notified as appropriate.

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EIBIBIT I - PAGE 11 TO APPLICATION OF LOUISIANA ENERGY SERVICES T

U RecordkeepinQ Plans Related to Decommissioning Fundina:

Pursuant to 10 CFR 5940.36 (f) and 70.25(g), Louisiana Energy Services vi.ll keep records until the termination of the license of information that could have a material effect on the ultimate costs of decommissioning.

These records will include information regarding:

(1) spills or other contamination that cause contaminants to remain following contemporaneous cleanup efforts, (2) as-built drawings of structures and modifications thereto where radioactive contamination exists (e.g.,

from the use or storage of such materials), (3) original and modified cost estimates of decommissioning, and (4) original and modified decommissioning funding instruments and supporting documentation.

Louisiana Energy Services will netify the NRC of material changes to the decommissioning cost estimates or associated funding mechanisms.

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May 1993