ML20113C663

Comments on Proposed Rule 10CFR50 Re Financial Assurance Requirements for Decommissioning Nuclear Power Reactors

ML20113C663
Person / Time
Site:	Peach Bottom
Issue date:	06/24/1996
From:	Hunger G PECO ENERGY CO., (FORMERLY PHILADELPHIA ELECTRIC
To:	Hoyle J NRC OFFICE OF THE SECRETARY (SECY)
References
FRN-61FR15427, FRN-62FR47588, RULE-PR-50 61FR15427-00034, 61FR15427-34, AF41-1-085, AF41-1-85, AF41-1-86, NUDOCS 9607020042
Download: ML20113C663 (3)

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Stition support Departrnent

( . -=h T 00CM5TED l PECO NUCLEAR usmc reco % c . ,a, ,

Nuclear Group Headquarters 965 Chesterbrook Boulevard A UMr or PECO Ewcy Wayrie; PA 19087-5691 g g g p4,.

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DCCKE.'Il'"t ~ June 24,1996 DOCKET NUMBER % .

Mr. John C. Hoyle Secretary of the Commission PROPOSED(JMo6'M ROLE 3+ - _ 9 U.S. Nuclear Regulatory Commission Washington, DC 20555

Subject:

_ Commects Concerning 10CFR50 Advance Nouce of Proposed Rulemaking,

" Financial Assurance Requirements for Decommissioning Nuclear Power Reactors" (61FR15427)

Dear Mr. Hoyle:

t This letter is being submitted in respotise to the NRC's request for comments concerning the 10CFR50 Advance Notice of Proposed Rulemaking," Financial Assurance Requirements for Decommissioning Nuclear Power Reactors," published in the Federal Register (i.e.,61FR15427, dated AprH 8,1996). The NRC is considering amending its regulations regarding decommissioning financial assurance requirements as they relate to electric utHity deregulation.

PECO Energy appreciates the opportunity to comment on this Advance Notice of Proposed Rulemaking conceming financial assurance requirements for decommissioning of nuclear power plants. We offer the following comments for consideration by the NRC.

Comments in general, PECO Energy considers that it is too early for the NRC to make any major changes '

to its financial assurance regulations; however, to the extent that there are changes, they should focus on encouraging the states' Public Utuity Commissions (PUCs) to deal with the potential problem associated with financial aspects of deregulation. If the first few states to implement retaH competition do not address this aspect, then the NRC could revisit the issue at a later time.

PECO Energy also offers the fo; lowing comments in response to the specific issues identified in the Federal Register notice.

A. Timing and Extes% of Electric Utility industry Deregulation There is no definitive time frame for deregulation, just as there is no specific format for deregulatkm. Generauy, wholesale competition wHl come first and then, depending upon the jurisdicton, competition at the retaH level may arrive at a future date for electric generation related services. Absent federal legislation, it is quite possible that some states WHI have retal competition, and some will not.

9607020042 960624 PDR PR D SO 61FR15427 PDR f j

S f June 24,1996 Page 2 B. Stranded Costs The !nitial construction costs for a nuclear power plant will not cause the plant to be uneconomic in a competitive environment. Generally, nuclear plants have low operating costs and would, therefore, continue operating in a competitive environment. The stranded cost for nuclear power is the initial investment which is a ' sunk cost." It is possible that stranded costs will be recovered from customers through a surcharge of some form or combination of forms.

C. Nuclear Financial Qualification and Decommissioning Funding Assurance i

With respect to whether a nuclear plant is retired prematurely, licensees would use accumulated funds to do the decommissioning. Additionally, it is possible that a j surcharge would be placed on customers to recover any additional costs. j Electric utlilty reorganization does not appear to be unreasonable. All that this etiort would achieve is to provide the same level of assurance that electric utHities had in the past. There is no need for stringent financial assurance regulations.

I Currently, there is no need for the NRC to impose standard financial measures that must be met in order to accumulate costs over the remaining life of a nuclear plant.

Oversight by the states' PUCs and the Federal Energy Regulatory Commission (FERC) is more than adequate to assure that funds will be available to decommission nuclear plants. PUCs may or may not be willing to certify that licensees will collect enough money to fully fund decommissioning. Most state regulators recognize that nuclear power plant decommissioning is an issue to resolve in transitioning to a competitive environment.

Accelerating decommissioning funding such that it is completed within ten (10) years will result in a substantial increase in electric utility rates. This is undesirable.

With respect to requiring larger contingency factors, this does not solve the problem.

Funding could be over or under estimates. To the extent that funding is higher than estimated, there could be an excess. Raising the contingency would likely result in excesses.

With respect to PUC and FERC oversight, it is highly unlikely that both FERC and PUC oversight would be eliminated. However, in the unlikely event that FERC and PUC oversight is eliminated, the NRC still has control through licensing constraints.

D. Decommissioning Funding Assurance and a Federal Government Licensee PECO Energy offers no response to this issue.

E. Status of Decommissioning Trust Funds During Safe Storage Period The Advance Notice of Proposed Rulemaking addresses eamings on fund balances during the safe storage period. It is totally appropriate to use eamings in excess of cost escalation to offset annual safe storage costs. Additionally, while not mentioned in the Advance Notice of Proposed Rulemaking, it is also reasonable to take credit for eamings that accrue during the actual decommissioning in the decommissioning scenario.

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' s, t June 24,1996

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l F. Reporting on the Status of Decommissioning Funds l

l PECO Energy believes that licensees should report to the NRC on the status of decommissioning funds at least every five (5) years and when new studies are completed.

If you have any questions, please do not hesitate to contact us.

Very truly yours.

fo G. A. Hunger, Jr.

i Director - Licensing l

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