ML20117P096

Comment on Proposed Rule 10CFR50, Financial Assurance Requirements for Decommissioning Nuclear Power Reactors. Any Addl Costs Imposed on Licensee Due to Change in Decommissioning Funding Will Aggravate Potential Investment

ML20117P096
Person / Time
Site:	Fort Calhoun
Issue date:	06/18/1996
From:	Tira Patterson OMAHA PUBLIC POWER DISTRICT
To:	NRC OFFICE OF THE SECRETARY (SECY)
References
FRN-61FR15427, FRN-62FR47588, RULE-PR-50 61FR15427-00011, 61FR15427-11, AF41-1-062, AF41-1-62, AF41-1-63, NUDOCS 9606250188
Download: ML20117P096 (5)

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• % DUN 20 ?? ;58 444 South 16th Street Mall Omaha NE68102-2247 0FFIC[. U Z^?.EIARY June 18, 1996 DUCKEIIM a JERVICE BRANCH LIC-96-0082 DOCKET NW.BER, pgpOSED RtjlE So -

U. S. Nuclear Regulatory Comission gpg g4W1) g\ )

The Secretary of the Comission Attn: Docketing and Service Branch Washington, D.C. 20555-0001

References:

1. Docket No. 50-285

2. Federal Register Volume 61, Nr 68, dated April 8, 1996 (61 FR 15427)

SUBJECT:

Comments on Proposed Rulemaking Hegarding Financial Assurance Requirements for Decomissioning Nuclear Power Reactors The Omaha Public Power District (0 PPD) has reviewed Reference 2 regarding the financial assurance requirements for decomissioning nuclear power plants. The NRC issued this advan e notice of proposed rulemaking to invite public coment on issues pertaining to the form and content of the NRC's nuclear power reactor decomissioning financial assurance requirements as they relate to electric utility deregulation. Reference 2 also solicited coments and supporting reasons on a series of questions arranged by topic. Please find OPPD's coments on the NRC's specific proposal and considerations attached. ,

1 If you should have any questions, please contact me. 4 Sincerely, l m nn

-Q tv-

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l T. L. Patterson Division Manager Nuclear Operations TLP/dll Attachment i

-c: Winston & Strawn L. J. Callan, NRC Regional Administrator, Region IV l L. R. Wharton, NRC Project Manager W. C. Walker, NRC Senior Resident Inspector .

Document Control Desk 9606250188 960618 PDR PR 50 61FR15427 PDR Employment with Equal opportunny 9O

- LIC-96-0082 Attachment .

Page 1

-0MAHA PUBLIC POWER DISTRICT l Fort Calhoun Station Unit No.1 Coments on Proposed Rulemaking:

Financial Assurance Requirements for Decommissioning Nuclear Power Reactors j

Soecific ProDosal:

s.

l The NRC is considering amending.10 CFR 50.2, 50.75 and 50.82 to:

1) Require that electric utility reactor ifcensees provide assurance that the i full estimated cost of decommissioning will be available through an  ;

acceptable guarantee mechanism if the licensees are no longer subject to rate regulation by State pub 1ic uti1f ty conarissions (PUCs) or the Federal Energy Regulatory Conarission (FERC), and do not have a guaranteed source of fncome.

OPPD's comments:

The supposition that a licensee might not be subject to regulation by a PUC or FERC, or might not have a guaranteed source of income in .the future, should not precipitate the imposition of additional decommis-sioning funding requirements or guarantees on the licensee before such a situation develops. The NRC should recognize that all electric utility reactor licensees will not be in this situation; therefore, any such requirement (s) should offer the utilities flexibility in recovering decommissioning funds. Each situation should be assessed if and when it occurs on a case-by-case basis. Any additional costs imposed on a licensee due to a change in decommissioning funding will aggravate i I

potential stranded investment.

2) Allow licensees to assume a positive real rate of return on decomals-i sioning funds during the safe storage period.

i OPPD's comments:

If the safe storage period includes the actual decommissioning period, such a change, based on inflation and investment returns determined by an acceptable third party makes good economic sense, i

3) Establish a periodic reporting requirement.

OPPD's comments:

OPPD's Decommissioning Funding Plan presently provides for two annual reports to the NRC, a Trust Accounting and an independent audit. OPPD considers these to be good practices.

. LIC-96-0082 Attachment Page 2 Specific Considerations:

The NRC solicited comments and supporting reasons on the following questions arranged by topic.

A. Timing and Extent of Electric Utility Industry Deregulation A.1 What is the likely timetable for industry restructuring and deregulation?

Unknown. It is too early in the deregulation effort to make meaningful predictions.

A.2 Will the electric utility industry go through several phases as it responds to deregulation and other competitive pressures?

Unknown.

A.3 Some States appear to oppose deregulation. Will they be able to maintain their opposition if neighboring States deregulate?

Unknown.

B. Stranded Costs B.1 How will restructuring affect large baseload plants that currently '

receive rate relief to cover construction costs or have a portion yet to be phased into the rate base?... What will be the source of  :

funds to prematurely and safely shut down an uneconomic plant? l l

Federal and State regulators and legislators are debating the issue j of stranded investment. If and how their costs might be recovered f through surcharges or other mechanisms is unknown at this time.  !

I J

C. Nuclear Financial Qualifications and Decommissioning Funding Assurance C.1 If nuclear plants are shutdown prematurely, how will licensees who can no longer pass costs through to ratepayers provide for a shortfall of decommissioning funds?

A proper funding mechanism would have to be implemented at the shutdown. Depending upon the reason and timing of the shutdown, the funding mechanisms could vary considerably.

i I C.2 At what point does an operator of a nuclear power plant cease to be a " utility" as defined in 10CFR50.2?

OPPD would continue to be a utility. l

. ~ _ - - -. - . - - . _ - - _. . _ ,

i V LIC-96-0082 Attachment Page 3 C.3 ... would it be appropriate to require financial assurance for the '

decomissioning costs in full prior to NRC approval of such reorgan-izations?... Should the NRC require, as a condition of approval of  ;

certain reorganizations involving the transfer of control of a i nuclear power plant, that newly created organizations or holding companies sign a binding agreement that holds them jointly liable for decomissioning costs associated with that nuclear power plant?

See OPPD's response to Specific Proposal #1. ,

C.4 Should the NRC require a licensee to provide a reasonable assurance of the availability of funds for decomissioning by imposing a min-imum level of net worth, cash flow, or other financial measure...?

See OPPD's response to Specific Proposal #1.

C. 5 Would PUCs and FERC be willing to certify that licensees under their jurisdictions, both electric utility and Part 50 licensees other i than electric utilities, would be allowed to collect sufficient l

^

revenues through rates to complete decomissioning funding?

Unknown. 6 C. 6 What would be the impact if the NRC required licensees to accelerate collection of decomissioning funds such that decomissioning funding for all plants would be complete within 10 years (or some other time period)? ,

r Any earlier funding period will aggravate the issue of stranded cost '

nuclear units'.

C.7 ...If these estimates turn out to be low far in the future (for example, if final dismantlement occurs after a 50-year safe storage period), how will underfunding be remedied?

Funds should be accumulated based on best current estimates and any i shortfalls handled through appropriate funding mechanisms, if they l occur. Again, imposition of additional costs on the licensees will I only aggravate potential stranded investments.

C. 8 Would it be feasible for the nuclear industry to develop a captive insurance pool to pay for de:omissioning funding shortfalls that result from premature decomissioning? Could such a pool be structured similarly to Nuclear Mutual Limited (NML) and Nuclear Electric Insurance Limited (NEIL)...? .. .

This would probably not be feasible as this is different from  !

insurance where minimums are set. j l

l

, LIC-96-0082 Attachment Page 4 r

C. 9 If PUC or FERC oversight is either substantially limited or '

\

eliminated, are there any other options for financial assurance of decomissioning that the NRC should consider.

No comment.

D. Decomissioning Funding Assurance and a Federal Government Licensee D.1 ...should the regulations continue to permit the provision of a statement of intent as the method by which these'11censees provide financial assurance for decomissioning...Does this fact or any other factors militate for or against allowing Federal utility l licensees to continue to use statements of intent as the method by which financial assurance for decomissioning is provided?

No comment.

E. Status of Decomissioning Trust Funds During Safe Storage Period i E.1 What real rate (s) of return should the NRC a110w licensees to use as credit for earnings on the decomissioning trust funds during the  ;

extended safe storage period? '

i See OPPD's response to Specific Proposal #2. i E. 2 What time period (s) should the NRC allow licensees to use in estimating the credit for earnings on the decomissioning trust funds during the extended safe storage period?

The time period should include the actual decomissioning period.

F. Reporting on the Status of Decomissioning Funds F.1 What information should the NRC require to be included in the periodic reporting requirements?

An annual accounting from the Trustee and an annual external audit.

(See OPPD's response to Specific Proposal #3.)

l F.2 How often should the NRC require licensees to report on the status i of decomissioning funding? l Annually (See OPPD's response to F.1).