ML20046A919

Comment on Proposed Rules 10CFR170 & 171 Re NRC Fee Policy. Opposes Rule

ML20046A919
Person / Time
Site:	San Onofre
Issue date:	07/19/1993
From:	Marsh H SOUTHERN CALIFORNIA EDISON CO.
To:	NRC OFFICE OF THE SECRETARY (SECY)
References
FRN-58FR21116, RULE-PR-170, RULE-PR-171 58FR21116-00508, 58FR21116-508, NUDOCS 9308020099
Download: ML20046A919 (4)

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i Secretary U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Attn: Docketing and Service Branch Gentlemen:

Subject:

Comments on NRC Fee Policy and Legislation, 10 CFR 171

Reference:

Federal Register Notice, 58 FR 21116, dated April 19, 1993 This letter transmits our comments on the NRC annual fee requirements specified in Part 171 of Title 10 of the Code of Federal Regulations.

Comments on the need for changes to the NRC annual fee policy and associated legislation were solicited by the referenced Federal Register Notice.

BACKGROUND I

The holder of a license to operate a power reactor is required by Part 171 to remit an annual fee to pay for NRC generic regulatory activities and other NRC i

expenses.

Part 171 is derived from the Omnibus Budget Reconciliation Act (0 BRA) of 1990.

This act directs the NRC to " establish a schedule of annual charges that fairly and equitably allocates the aggregate amount of charges among licensees and, to the maximum extent practicable, reasonably reflects the cost of providing services to such licensees or classes of licensees" (Public Law 101-508, dated November 5, 1990, Subtitle B, Section 6101, j

Subsection (c)(3)).

The Part 171 fee assessed to licensees of power reactors consists of a base annual fee and an annual surcharge. The base annual fee is assessed for generic NRC activities pertaining to power reactors.

These generic activities do not include inspections and licensing actions for individual power reactor licenses which are subject to Part 170 fees. The annual surcharge is assessed for generic NRC activities which are not attributable to a specific class of license, and for specific NRC inspection and licensing activities.for facilities other than power reactors, such as non-profit educational institutions and small entities which are not assessed fees because of their limited ability to pass regulatory costs to their clients.

Payment of Part 171 fees is not required following the federal fiscal. year in which a power reactor permanently ceases operation.

Proration of fees is-permitted, by subpart 171.17, for the fiscal year in which a power reactor receives an operating license. This subpart also prohibits proration of fees for the fiscal year in which a licensee requests an amendment to permanently 1

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R21116 PDR 10

Secretary remove its operating authority. However, Part 171 does not address proration of fees for the fiscal year in which authorization to operate the facility is actually removed.

The NRC has solicited public comment, via the referenced notice, on the need for changes to its fee policy and associated legislation. As stated in the notice, comments are to focus on a central question:

"Given that user fees will be assessed to NRC licensees, what specific legislative or NRC policy changes are needed to eliminate any unfair burden?" Although the notice provides specific topics for comment, the notice also states that " comments may be made on any and all aspects of the existing NRC fee policy and the existing laws upon which the fees are based."

COMMENT Part 171 should be clarified to address proration of fees for the fiscal year in which authorization to operate the facility is

'tually removed.

The-i clarification should allow such proration, since imposition of full annual fees on these licensees would constitute an unfair burden on the ratepayers, and would be contrary to the OBRA directive to allocate charges fairly and equitably.

This burden would be unfair because, during the portion of the fiscal year following removal of authorization to operate the facility, the benefits received by ratepayers are significantly reduced, and the facility should no longer be considered an " operating reactor" when assessing charges which benefit facilities other than power reactors.

Reduction in Benefits to Rate Payers The Part 171 fees assessed to licensees of power reactors are properly considered as an operating expense and passed on to the ratepayers.

It is appropriate that the ratepayers pay these fees, since they can receive benefit in the form of electrical energy from operation of the facility. Also, the ratepayers are usually located within an area which could be significantly affected, environmentally and economically, if an unsafe condition were to occur at the facility. As a result, the ratepayers also derive benefit from the safety enhancement provided by NRC activities.

As discussed below, when authorization to operate the facility is removed the ratepayers can no longer receive an energy benefit from the facility, and the safety benefit received from NRC generic activities is significantly reduced.

The relationship between Part 171 fees and the associated energy benefit may be quantitatively illustrated by comparing the theoretical Part 171 cost to ratepayers, per kilowatt-hour (kWh), for two identical power plants rated at 436 net electrical megawatts. One of the plants is assumed to operate at full power for an entire fiscal year, and the other is assumed to operate at full power for only two months of a fiscal year prior to permanent shutdown. The Part 171 fee for each plant is assumed to be $3.12 million for the fiscal year.

r Secretary The ratepayers of the operational plant would be subject to approximately 0.08 cents /kWh in Part 171 fees, while the ratepayers of the shut down plant would be subject to approximately 0.5 cents /kWh in Part 171 fees.

Alternatively expressed, the ratepayers of the shut down plant would be charged almost $2.6 million in Part 171 fees without receiving the associated energy benefits from the plant. Thus, the ratepayers of the shut down plant would bear an unfair burden of the Part 171 fees relative to the energy benefit received.

In addition to losing the ability to receive energy benefits, ratepayers also receive fewer safety benefits from NRC generic activities when authorization to operate the facility is removed.

The reduction in safety benefits received is difficult to quantify, and will therefore be discussed qualitatively.

Most of the NRC activities funded by Part 171 are appropriately focused on operational power reactors, since a reactor which has permanently ceased operation presents far fewer safety concerns. As a result, the safety benefit provided by most of these NRC activities is not applicable to reactors which are no longer authorized to operate.

This was acknowledged by the NRC in the initial publication of Part 171, as indicated by the statement that "Such reactors no longer benefit from the services that are the basis for the annual fee" (51 FR 33228). Since the ratepayers will not receive all safety benefits resulting from NRC generic activities, imposition of full Part 171 fees for the fiscal year in which authorization to operate the facility is removed would constitute an unfair burden.

Elimination of " Operating Reactor" Status The NRC elected to assess power reactors fees for expenses incurred for facilities other than power reactors based on its criteria of "who can equitably and practicably afford to pay" (56 FR 31487). Application of this criteria lead the NRC to " allocate the cost to operating reactors" (56 FR 31487). However, upon removal of its authorization to operate, a facility is no longer an operating power reactor.

Therefore, assessment of these fees to power reactors during the remainder of the fiscal year following removal of authorization to operate the facility would be contrary to the stated policy of allocating the cost to operating reactors.

Conclusion To meet the OBRA objective of fair and equitable allocation of charges, i

Part 171 should be clarified to require that licensees be charged annual fees only for that portion of the fiscal year when the ratepayers can receive 4

energy benefits from the facility and can receive full safety benefits from generic NRC activities, and when the facility can be considered to be an operating reactor, i.e., during the portion of the fiscal year prior to removal of authorization to operate the facility.

This may result in an occasional shortfall in the NRC's annual budget due to unanticipated permanent shutdowns during the fiscal year.

However, the NRC could compensate for any such shortfalls by assessing additional surcharges to operational power reactors, as is the current practice when a shortfall occurs for other reasons.

I i

Secretary

-4 Part 171 should therefore be clarified to provide for proration of both the base annual rate and the annual surcharge, based on the fraction of the fiscal year prior to removal of authorization to operate the facility.

If you have questions or comments please do not hesitate to contact me.

Sincerely, h0' cc:

B. H. Faulkenberry, Regional Administrator, NRC-Region V S. W. Brown, NRC Project Manager, San Onofre Unit 1 C. W. Caldwell, NRC Senior Resident Inspector, San Onofre Units 1, 2&3 R. F. Dudley, Jr., Section Chief, Non-Power, Decommissioning, and Environmental Project, Directorate of Reactor Projects - 3, 4 and 5 4

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