ML20058N421
| ML20058N421 | |
| Person / Time | |
|---|---|
| Issue date: | 07/19/1990 |
| From: | Curtiss J NRC COMMISSION (OCM) |
| To: | Chilk S NRC OFFICE OF THE SECRETARY (SECY) |
| References | |
| NUDOCS 9008140131 | |
| Download: ML20058N421 (3) | |
Text
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7 NOTATION V 0 T g,,,,, EASED TO THE PDR-REL
!._11fd_.___.Ad1 i
RESPONSE sugg7 initials
-1 date T0:
-SAMUEL J. CHILK, SECRETARY OF-THE COMMISSION l
FROM:
COM4ISSIONER CURTISS
SUBJECT:
SECY-90-217 - GENERAL ELECTRIC REQUEST FOR l
SPECIFIC EXEMPTIONS UNDER 10 CFR PARTS 50 AND-70 APPROVED DISAPPROVED X/with ABSTAIN l-conunents 1
i l
NOT-PARTICIPATING REQUEST DISCUSSION COM4ENTS:
See attached.
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i-900814o131 900719
$8RheESEN$eNSE'Poc SIGNATURE L
-RELEASE VOTE
/X/
July 19,1990 DATE WITHHOLD VOTE
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O ENTERED ON "AS" YES x
NO Qpt
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' Commissioner Curtiss' comments on SECY-90-217:
1 disapprove the staff's proposal to deny GE's request for an exemption from the regulations.equiring licensees to establish external funds or use some other independent, external mechanism to ensure the availability of funds for decommissioning.
.Although I am aware of the' fact that the Commission specifically-
- considered and rejected rulemaking proposals that would have permitted the use of internal reserves or "self-insurance" for decommissioning funding, as GE proposes in its application for exemption, several considerations lead me to the conclusion that the concerns that the Commission had about internal reserves and t
self-insurance should not preclude GE from using such
' decommissioning funding methods here.
In particular, I would note the following:
1.
The NRC staff's consultant on methods to finance decommissioning has concluded that the use of internal reserves "is acceptable and provides excellent assurance of avai.1 ability of funds."
Utility Financial utability and the Availability of Funds for Decommicsloning, September 1984, p. 13).
Despite the fact that internal reserves cannot be effectively protected from creditors.in the event of bankruptcy by the licensee, the NRC staff concluded that the internal reserve approach provides reasonable assurance that decommissioning funds will be available.
When they are needed by licensees and recommended that the final decommissioning rules allow the use of internal reserves (SECY-87-309: proposed Final Rules on Decommissioning,. December 17, 1987, Appendix pp.
5-7, 8-13).
The Commission's concern in rejecting that staff recommendation -- that a financially-troubled licensee might find it necessary to divert its decommissioning reservesEto other purposes -- would not seem to apply to a licensee that has exhibited the level of financial stability and assets of GE.
'2.
In promulgating decommissioning funding requirements in the low-level waste area, the Commission decided not to permit, on a generic basis, the "use of stand alone self-insurance" '
fund low-level waste site stabilization ar closure.
At the same time, the
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Commission did indicate that it would evaluate the use L
of financial tests and self-insurance " proposed by licensees on a case-by-case basis."
(Statements of Consideration: Licensing Requirements for Land Disposal
~
of Low-Level Waste, 47 Fed.Rea. 57446, December 27, 1982).
Thus, despite its lack of confidence that the self-insurance approach would provide the necessery reasonable assurance that all licensees would have site closure funds available when needed, the Commission held open the possibility that the self-insurance approach could be-justified for licensees who
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_(SECY-90-217) m a
demonstrate their financial qualifications.
In my i
view, the logic.of the approach taken for low-level waste decommissioning applies withcequal. force here,
.where GE has made just such.a demonstration ~with regard' to the licenses which it holds.
3.
While:the decommissioning regulations do not~ allow the use of internal reserves or self-guarantees, they do permit non-licensee parent company guarantees where a
-parent organization meets certain financial tests set out-in 10 CFR Part 30, Appendix A.
'GE's assets and i
financial qualifications far exceed those required to satisfy:these financial = tests for parent company guarantees.
In fact, GE will. satisfy the
' decommissioning funding requirements for_a GE subsidiary, Reuter-Stokes, by providing a parent company guarantee based on GE's own internal financial capabilities.
It would be an anomaly ~to permit GE to provide _an internally-funded parent company guarantee for a subsidiary but require'GE to establish external reserves to fund decom:nisioning where GE itself is the u
named licensee.
L 4.
Finally, it appears to me that the. degree of financial assurance that we would have if we-were to grant this s
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-exemption is no less than'that which would be afforded by the option of a parent company guarantee, an option that is explicitly allowed by:the decommissioning rules. 1[n fact, the very concerns that-nave been expressed about granting this type ~of exemption -- that-a company might declare bankruptcy, thereby placing
-decommissioning funds at the risk of creditors' superior claims -- are no different than the situation
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.that we would face under the option of a parent company L
guarantee.
The_ Commission found that' risk to be tolerable for a parent company-guarantee;lE see no reason to differentiate the situation-here, particularly in view of'the undisputed financial health of the applicant.
i ForLthe foregoing reasons, I:would grant the exemption, subject:
to the1 requirement that GE be required to recertify on an annual basis.that it meets the financiel test criteria as required 1by 10 CFR Part 30, App. A, sections II.A.1 and A.2 C.
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