ML20058N430
| ML20058N430 | |
| Person / Time | |
|---|---|
| Issue date: | 07/30/1990 |
| From: | Chilk S NRC OFFICE OF THE SECRETARY (SECY) |
| To: | Taylor J NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| References | |
| REF-10CFR9.7 NUDOCS 9008140135 | |
| Download: ML20058N430 (3) | |
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UNITED STATES 7,
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July 30, 1990 1
'VFICE OF THE SECRETARY i
MEMORANDUM FOR:
James M. Taylor Executive Director for Operations
[I FROM:
uel J.
Chilk, Secretary
SUBJECT:
SECY-90-217 - GENERAL ELECTRIC REQUEST FOR SPECIFIC EXEMPTIONS UNDER 10 CFR PARTS 50 AND 70 t
This is to advise you that the Commission (with Chairman Carr and commissioners Rogers and Remick approving and Commissioner Curtiss disapproving) has agrood with the staff's recommendation that the exemptions request be denied.
Commissioner Curtiss would have granted the exemptions, subject to the requirement t
that GE be required to recertify on an annual basis that it meets the financial test criteria as required by 10 CFR Part 30 Appendix A, Section II.A.1 and A.2.c.
Commissioner Curtiss' additional comments are attached.
Attachment:
As stated cc:
Chairman Carr Commissioner Rogcra Commissioner Curtiss Commissioner Remick OGC GPA i
l NOTE:
THIS SRM, SUBJECT SECY PAPER, AND THE VOTE SHEETS OF CHAIRMAN CARR, COMMISSIONERS ROGERS, AND CURTISS WILL BE MADE PUBLICLY AVAILABLE IN 10 WORKING DAYS FROM THE DATE oand >90F THIS SRM 4606140135 90073o S
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Commissioner Curtiss' comments on SECY-90-217:
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I disapprove the staff's proposal to deny GE's request for an exemption from the regulations requiring licensees to establish external funds or use some other independent, external mechanism l
to ensure the availability of funds for decommissioning.
Although I an aware of the fact that the Commission specifically considered and. rejected rulemaking proposals that would have i
permitted the use of internal reserves or "self-insurance" for decommissioning funding, as GE proposes in its application for i
exemption the concer,ns that the Commission had about internal reserves andsevj self-insurance should not preclude GE from using such decommissioning funding methods here.
In particular, I would-1
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note the following:
.a 1.
The NRC staff's consultant on methods to finance decommissioning has concluded that the uss. of internal reserves "is acceptable and provides excellent assurance of availability of funds."
i Utility Financial Stability and the Availability of Funds for Decommissioning, September 1984, p. 13),
Despite the fact that internal reserves cannot be i
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, I,
8-13).
The Commission's conc,ern in rejecting that staff recommendation -- that a financially-troubled licensee might find it necessary to divert ~its decommissioning reserves to 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" to fund low-level waste site stabilization and closure.
At the same time, the Commission did indicate that it would evaluate the use 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.Ree 57446, December 27, m
1982).
Thus despite its lack of confidence that the self-insuranc,e approach would provide the necessary reasonable assurance that all' licensees would have site closure funds available when needed,-.the commission held open the possibility that the self-insurance approacn could be justified for licensees who
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t (SECY-90-217),
4 demonstrate their financial qualifications.
In my view, the logic of the approach taken for low-level waste decomuissioning applies with equal 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 financial guslifications far exceed those required to satisfy these financial tests for parent company J
guarantees.
In fact, GE will satisfy the I
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decommissioning funding requirements for a GE
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subsidiary, Reuter-Stokes, by providing a parent company guarantee based on GE's own internal financial d
capabilities.
It would be an anomaly to permit GE to provide an internally-funded parent company guarantee 4
for a subsidiary but require GE to establish external
.reserven to fund decommisioning where GE itself is the l
named licensee.
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4.
Finally, it appears to me that the degree of financial assurance tnat we would have if we were to grant this 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.
In fact, the very concerns that have 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 that we would face under the option of a parent company i
guarantee.
The Commission found that-risk to be tolerable for a parent company guarantee; I see no
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reason to differentiate the situation here, particularly in riew of the undisputed financial health of the applicant.
For the foregoing reasons, I would grant the exemption, subject to the requirement that GE be required to racertify on an annual basis that it meets the financial test criteria as required by 10 1
CFR Part 30, App. A, sections II. A.1 and A.2 C.
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