ML20129A398
| ML20129A398 | |
| Person / Time | |
|---|---|
| Issue date: | 10/24/1984 |
| From: | Dircks W NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| To: | Asselstine, Palladino, Roberts NRC COMMISSION (OCM) |
| Shared Package | |
| ML20129A330 | List: |
| References | |
| FOIA-EAT85-270 NUDOCS 8507270217 | |
| Download: ML20129A398 (1) | |
Text
[
i. (,[
NUCLEAR REGULAiOR COMMISSION
-(
g.e caswiwarow.e. e.ross.
- g,..c b
OCT 2 41984 l'EMORANDUN FOR:
Chairnan Pilladino Cormiissior : o berts o
Corvr.issioner Asselstine Commissioner Eernthal Conc.issioner Zech FRCP.:
llilliac: J. Dircks Executive Director for Lperations
SUBJECT:
TRANSMITTAL OF ILFORPATICF REQUESTED AT COPAISSIUliidEETING ON OCTOBER 10, 1984 At the Corcission reetino on October 10, 1984, vhere the staff presented a review of the proposed rule setting forth technicel and financial criteria for cecorsissioning nuclear facilities, Con..issioner Asselstine requestec that the staf f ascertain where licensees are estdblishing their reserve funds for decorrissioning financial assurance and what types cf assets are acquired by utilities using internal reserve fur.as.
The use of internal reserve funds received by utilities for decoci..issionino was discussed with Richarc Drat 2, Vice Presicent, Finance, of tiie Edison Electric Institute; Scott DuBoff, berber of the tirr of bishop, Liberpan, Cook, Purcell anc Reynolds, attorneys for the Electric Decorriissioning Group; and hilliam Stir. art, Vice President, Pegulatcry Affairs, Duke Power Co.
We also discussed this with Dr. J. Siegel of the knarten School whorn we have consulted with before on financial affairs.
They stated that the funds received frcw ratep6yers to' cover necou..issioring 6.oulo be useo to increase the net worth of the utility.
This is done by investing in new utility assets such as power plants and electrical transmission and distributien systercs or by retiring debt.
They also incicated that decorrissioning funds would not be reedec to cover current expenses such as salaries and overhead since these are covered by the rates set by the public utility conraissions or Federtl Eners) Regulatory Corrission and that the decorcissioniny funos cannot be usec by utilities to diversify as those funds can only core out of corpany profits.
l (Siped William L Direkt killiara J. Dircks Executive Lirector
~
for Operations cc:
General Counsel Director, Policy Evaluation Office of the Secretar of the Commission l
l 8507270217 850605 PDR FDIA l
VANEATO85-270 PDR
- ~
x y
~
. s
_v, 4
r I
~
.1 3 t*Y e
September 7, 1984
,/
.SECY'84-354 RULEMAKING ISSUE (Notation Vote)
For:
The Commissioners From:
William J. Dircks, Executive Director for Operations
Subject:
PROPOSED AMENDMENTS TO 10 CFR PARTS.30, 40, 50, 51, 70, AND 72:
DECOMMISSIONING CRIIERIA FOR NUCLEAR FACILITIES
Purpose:
To obtain Comission approval to publish for public comment proposed amendments to 10 CFR Parts 30, 40, 50, 51, 70, and 72 setting forth technical and financial criteria for decomissioning nuclear facilities.
Category:
This paper covers a minor policy, question requiring Commission approval. Resource estimates: Category 1, preliminary.
Issue:
Should financial assurance for decommissioning be required
...-------and-should~more _ specific technical req _uirements fordecont-__
missioning be codified.
Discussion:
Background.
In March 1978, the Commission announced in the Federal Register (43 FR 10370) its intention to reevaluate its decommiss1oning policy and to consider amending its regulations in this regard. Additionally, on June 22, 1979 (44 FR 36523) the Comission responded to a petition for rulemaking (PRM 50-22) concerning decommissioning financial l'
et al. on June 5,1977, by granting that issues and funding assurance, filed by the Public Interest Research Group, alternatives raised by the petitioners would be considered within the context of this decommissioning rulemaking.
The policy reevaluation included the development of an infor-mation base, a series of studies by Battelle Pacific-Northwest Laboratories on the technology, safety and costs of decommissioning various types of nuclear facilities, and the preparation of a draft generic environmental impact statement (January 1981).
Development of the data base is essentially complete.
The staff believes it is appropriate at this time to publish a proposed rule setting forth decommissioning M@'
Contacts:
K. G. Steyer, RES, 443-7918 C. R. Mattsen, RES, 443-7910 alz l
/
e
.e
(.
The Commissioners criteria for nuclear facilities. This includes all facilities except waste disposal facilities which have been covered separately in Parts 60 and 61. Also, major decommissioning issues such as financial assurance are already covered for uranium mills ty Appendix A of Part 40.
Five major issues evolved from the policy reevaluation, namely, alternative methods of decomissioning, timing, planning (at licensing and just prior to decommissioning), financial assurance, and acceptable levels of residual radioactivity for l
release of property for unrestricted use. More specific requirements and guidance are needed in these areas.
Additionally, in light of the information in the data base and the draft generic environmental impact statement and as a result of the requirements in the proposed amendments, it became apparent that environmental review requirements related to NEPA could be reduced.
This proposed rule addresses all'of i
these issues except that of residual radioactivity limits, which is being addressed in a separate rulemaking as an amendment to Part 20.
)
Proposed Regulations.
In the areas of decommissioning alternatives and timing it is proposed that all alternatives be defined as leading to release of the site for unrestricted use and termination of license. Delays in attaining unrestricted release conditions would be limited to situations
.__. here there._is a compen_ sating benefit _ such as reduced w
occupational exposures, i
Planning would be more completely specified both at the licensing stage and at the end of operation.
Information on funding methods for providing financial assurance for decom-missioning would be submitted in applications for operating licenses and by existing reactor licensees within two years i
of the effective date of the rule.
This information would show how reasonable assurance of funds for decommissioning will be provided, and would be in the form of a funding plan i
proposing an appropriate level of assurance based on a cost estimate for the particular facility or, in the case of power reactors, may consist of a certification of financial assurance in a prescribed amount proposed at $100 million using a funding method acceptable to the Comission.
i For those materials facilities where major decommissioning costs are likely, financial ' assurance for decomissioning would also be required. Applicants and licensees (within one year) would be required to submit either a certification of financial assurance in a prescribed amount or a funding plan showing reasonable assurance of funds for decomissioning. Certain of these licensees, specified in the rule by types and quantities i
of materials, would be required to submit a funding plan rather than the certification at the time of license renewal to better assure that the funding level is appropriate for the specific j
facility.
l
4 The Commissioners i All. licensees would be required to keep records of information important to decomissioning in orders to minimize both the costs and health and safety impacts of decommissioning.
i Under the proposed amendment, decommissioning plans would be submitted at the end of operation by Part 50 and 72 licensees whether or not the actual dismantling is to be delayed. Thus, decommissioning alternatives involving delay could be used only with Comission approval.
Under the existing regulations, the ultimate disposition need not be planned at the end of operation.
Reactors can 1
be put into " storage" indefinitely, normally with an amendment to " possession only" status; plans are then submitted only when the licensee desires to dismantle.
Under the proposed amendments a safe storage period j
would still be allowed when ap,propriate and in this case more detailed plans and specifications for the actual dismantlement procedure could still be deferred i
until needed.
(These could be considered an addendum to
]
the decomissioning plan and the timing for this would be spelled out in the plan.)
The proposed rule also codifies i
in more detail the contents of decomissioning plans.
In Parts 30, 40, and 70 plans for decomissioning would be required only when a significant health and safety question p.._.
may exist.___
A means of providing financial assurance for decommissioning will be provided by a decomissioning funding plan or a certification of financial assurance. A number of acceptable methods are specified in the proposed rule amendments with some differences for utility licensees versus non-utility licensees.
While it is believed that these methods provide reasonable assurance that licensees will have funds available when needed to perform decomissioning, they do not create a lien on the property or constitute an absolute guarantee that protected priority money will be available solely for the purpose of decomissioning. A regulatory guide is being prepared which will identify various types of responsible l
organizations, such as, for example, chartered banks and t
licensed insurance companies, with which financial assurance arrangements acceptable to the Commission may be made.
The guide also indicates how cost estimates submitted as part of j
a funding plan can be based on generic studies adjusted for facility specific differences such as reactor size, local labor costs, and differing waste disposal charges and cost of energy.
The issue of which specific funding methods should be allowed for utilities has been of particular interest and l.
is discussed in an Appendix for Comission information.
The draft Federal Register Notice includes a specific request l
for comments _on this issue as well as on the issue of whether to include the option of providing financial assurance in a q
prescribed amount.
.,. _. _ _ - m I
e The Commissioners 4-The proposed rule would reduce specific environmental review requirements in the area of decommissioning.
Decommis-sioning of reactors and certain materials facilities would no longer reouire environmental impact statements.
Instead, in accordance with the procedures in revised Part 51, an environmental assessment would be prepared which would supplement the environmental impact statements previously prepared in connection with the issuance of the construction permit or operating 1.icense for the facility.
Although this environmental review procedure is expected to accommodate most decommissioning actions, it should be noted that unoer the criteria in revised Part 51 an environmental assessment may result in a conclusion that an environmental impact statement is reouired in the particular circumstances of the proposed Federal decommissioning action.
(Environmental impact statements would continue to be required for the decommissioning of waste disposal facilities only.)
Information on environmental impacts would be submitted by licensees as a supplement to previously submitted environ-mental reports.
Resource Reouirements The prop _csed_ rule _will have some i_mpact on manpower needs in NRR, NMSS, the Regions, SP, IE, and RES.
Because the rule would provide for more efficient and effective licensing action at the time of decommissioning and reduces some requirements for environmental reviews, the overall net change in manpower needs as a result of this rule if made effective is estimated to be insignificant over the long term.
The most significant impact on resource requirements is the review of decommissioning funding plans for existing licensees.
This is estimated to involve approximately 5 man-years effort per year over a 2-5 year period following the effective date of the final rule (24 man-years total), these responsibilities being in NRR, NMSS, the Regions, and SP (SP will review funding methods for reactors and may provide assistance to NMSS or the Regions in this area).
In addition, a number of regulatory guides are planned to be published in connection with this rule.
Updating of the information base which aids in the development and review of decommissioning cost estimates is also planned.
This would require manpower in RES, NRR, and NMSS, a continuation of the present level for these activities of 5 man-years per year over the next few years.
Even if no additional rules or regulatory guides were to be published resource requirements related to decommissioning would increase in the future as more major facilities reach the end of operating life.
, The Commissioners Recommendations:
That the Comission Approve publication of a notice of the proposed 1.
amendments in the Federal Register (Enclosure A);
2.
Note:
I (a) The notice of proposed rulemaking in Enclosure A will be published in the Federal Register with a 90-day comment period.
(b) A preliminary analysis has been made on the impact of the proposed rule, if adopted, on small entities.
It is not expected that there will be a significant impact on a sub-stantial number of small entities.
- However, since definitive information is not available, comment will be requested specifically of small entities..The Chief Counsel for Advocacy of the Small Business Administration wfil be informed of the rule and the, analysis of impacts on small entities.
(c) A draft generic environmental impact statement (DGEIS), NUREG-0586, was published in January 1981 and made available for public coment in February 1981 (46 FR 11666).
The proposed rule reflects comments received on the DGEIS.
(d) The Agreement States have reviewed a draft of the proposed rule and will be informed when the proposed rule is published.
The final rule will be made a matter of compatibility for Agreement States.
(e) The Subcommittee on Nuclear Regulation of the Senate Committee on Environment and Public Works, the Subcommittee on Energy and the Environment of the House Interior and Insular Aff airs Committee, the Subcommittee on Energy Conservation and Power of the House Energy and Commerce Committee, and the Subcommittee on Energy, Nuclear Proliferation and Government Processes of the Governmental Affairs Committee will be informed of the Commission's action by letter such as Enclosure C.
..- - =,
.a.
_=
i The Commissioners.
(f) This proposed rule amends information requirements that are subject to the Paperwork Reduction Act of 1980 (44 U.S.
C. 3501 et seq.).
The proposed rule has been submitted to OMB for review and approval of the information collection requirements.
(g) The Federal Register notice of proposed rulemaking will be distributed to affected licensees and other interesteo parties.
(h) A public announcement, such as Enclosure D, will be issued at the same time the notice of proposed rulemaking is published in the Federal Register.
(1) A copy of the proposed rule was provided to the ACRS for their information.
The ACRS indicated that they did not need to review the proposed rule.
Scheduling:
If scheduled on the Commission agenda,. recommend this
-~
paper be considered at an open" meet 1ng.
No specifTc
~
~
~
circumstance is known to staff which would require Commission action by any particular date in the near term.
i l
l Will J. Dircks Executive Director for Operations
Enclosures:
"A" - Federal Register Notice "B" - Draft Regulatory Analysis i
"C" - Draft Congressional Letter "D" - Draft Public Announcement i
l l
i f
r
=.
e Commissioners' comments or consent should be provided directly to the Office of the Secretary by Tuesday, October 16, 1984.
Commission Staff Office comments, if any, should be submitted to the Commissioners NLT Friday, September 28, 1984, with an information copy to the Office of the Secretary.
If the paper is of such a nature that it requires additional time for analytical review and comment, the Commissioners and the Secretariat should be apprised of when comments may be expected.
This paper is tentatively scheduled for discussion at Open
-.;... Meetings on Thursday, September 20, 1984 and Tuesday, October 9, 1984.
DISTRIBUTION:
Commissioners OGC OPE OI OCA OIA OPA REGIONAL OFFICES EDO ELD ACRS
. ~. _..
ASLAP SECY E.
e e
.--......__=...-...-----n..
, APPENDIX DISCUSSION OF METHODS OF FINANCIAL ASSURANCE FOR DECOMMISSIONING ALLOWED FOR ELECTRIC UTILITY LICENSEES The methods of providing financial assurance fall into three general types:
(1) deposit of funds (either at startup or over plant life) into accounts separate from licensee assets and control; (2) holding of funas by the licensee as part of his assets and under his control, referred to as internal reserves; or (3) some form of guarantee of funds such as insurance or sureties.
The following are the major options considered with regard to funding reouirements for electric utility licensees:
A.
Permit licensees to use only those methods in which deposits.are in accounts separate from licensee control, or guarantee methods (types 1 and 3 noted above);
B.
Same as Option A, except that methods allowing accounts to be under licensee control (type 2) are also permittea for most ut,ilities (i.e., not including utilities owning only a single generating facility).
'-~~
Permitting the licensees to use only those methods indicated in Option A is considered to provide better assurance of availability of funds since those methods are n.ot subject to problems which may occur with a utility's finances.
However, under most assumptions, use of the additional method permitted in Option B is less expensive by between a factor of 2 and 3 because a utility can usually earn more from its own capital structure than by investing in higher grade commercial securities outside the company.
The recent promulgation of 10 CFR 50.54(w) which requires that electric utilities maintain insurance for post-accident decontamination increases confidence in utility financial viability even under the severe circumstances of an accident.
In addition, it was concludeo by a recent consultant study that even if the extreme levels of financial stress currently being experienced by some utilities were to exist at the time a utility needed to decommission a reactor, the assets of the utility would be more than sufficient to cover decommis-sioning costs.
These factors, coupled with capability of utilities, in general, to recover costs of providing electricity from their consumers, leads to the conclusion that an internal reserve also provides reasonable assurance and is more cost effective. Thus, the staff recommends Option B and has included in the proposed rule internal reserve as an acceptable funding method for utilities owning more than one generating facility.
In addition to the above, if a utility licensee proposes to delay completion of decommissioning, there is the Question of what funding methods should be permitted by NRC for maintaining a decommissioning fund during a long term (30 years or more) decommissioning storage period.
There are three major options for consideration:
.. ~. _ _. - _ -
1.
Permit licensees,to use the methods listed in A above; 2.
Permit licensees to use the methods listed in B above; 3.
Leave the acceptability of funding methods during long term storage for case-by-case determination, thus permitting use of internal reserve if it can be shown to provide reasonable assurance.
Option 2 is not advisable because case-s' ecific consideration may be p
important before internal reserve is permitted for a long period after the end of operation when the reactor is no longer producing revenue.
Option 3 allows the Commission flexibility to consider case-specific information.
Internal reserve may provide an adequate level of assurance in some cases and potentially at a lower cost.
However, significantly more administrative effort would be required on the part of Commission staff than with Option 1.
Questions relateo
~
to financial qualifications may have to be considered, although the Commission is eliminating all review of financial qualifications for utilities at the operating license stage. Also, periodic review of funding during the storage period would have to include reconsideration of the adequacy of the internal reserve method.
Since funds (or credited accounts) for decommissioning would
~
have already been collected during reactor operation, it appears reasonable to eliminate internal. reserve specifically in the regulations for a long term
-- decommissioning period.
Thus,- Option 1 -is recommendedi since a-higher level of assurance will be provided with less administrative effort.
APPENDIX e
_m y-.
-v--
.m----.
6 O
P 9
e c,
k; 7
ENCLOSURE A M
e+
_.--._-----y-m.-
.w
[7590-01]
NUCLEAR REGULATORY COMISSION 10 CFR Parts 30, 40, 50, 51, 70, and 72 Decommissioning Criteria for Nuclear' Facilities AGENCY:
Nuclear Regulatory Commission.
ACTION:
Proposed rule.
SU M ARY: The Nuclear Regulatory Commission is proposing amendments to its regulations that would set forth technical and financial criteria for decommissioning licensed facilities.
The proposed amendments address decommissioning planning needs, timing, funding mechanisms, and environ-mental review requirements.
The intent of the proposed amendments is to assure that decommissioning of all licensed facilities will be accomp-lished in a safe and timely manner and that adequate licensee funds L
wiU_be. available_for_this_ purpose._The_ proposed _ rule _also contains.a _
response to a petition for rulemaking (PRM-50-22), concerning decommis-sioning financial assurance, initially filed by the Public Interest Research Group (PIRG), et al. on July 5, 1977.
l I
DATE:
Comments must be received on or before [ insert a date to allow 90 days for public comment].
Comments received after this date will be considered if it is practical to do so.
Assurance of-consideration is possible only if comments are received on or before this date.
ADDRESSES:
Submit written comments to the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555, Attention:
1 Docketing and Services Branch.
Copies of comments received and the i
generic environmental impact statement may be examined in the Commis-sion's Public Document Room at 1717 H Street NW., Washington, DC.
8/17/84 1
Enclosure A
[7590-01]
FOR FURTHER INFORMATION CONTACT:
Keith G. Steyer or Catherine R. Mattsen, Office of Nuclear Regulatory Research, U.S. Nuclear Regulatory Commission, Washington, DC 20555, telephone (301)443-7910.
SUPPLEMENTARY INFORMATI0A:
b Backaround On March 13, 1978, the Commission published an Advance Notice of k
Proposed Rulemaking in the Federal Register (43 FR 10370] stating that the Commission was reevaluating its decommissioning policy and consider-ing amendments to its regulations to provide more specific requirements relating to the decommissioning of nuclear facilities.
The plan for the i
reevaluation included the development of an 'nformation base and the preparation of a generic environmental impact statement (GEIS), and based l
on these, the development of proposed amendments to the regulations.
The information base for rulemaking is essentially complete and consists i
primarily of a series of NUREG/CR reports on studies of the technology, safety, and costs of decommissioning various kinds of nuclear facilities.
These reRoyts were_ prepared _by..Battelle.Pacif.ic..Nor.thwest Laboratories.
(PNL).1 On February 10, 1981, the Commission announced the availability of the draft GEIS for public comment (46 FR 11666].
Section 15 of the draft GEIS recommends certain policy considerations. These recommenda-tions, as modified by comments received on the draft GEIS and other sources, provide the basis for the proposed amendments to the Commission's I
regulations...The proposed amendments cover a number of topics related to decommissioning.
However, acceptable levels of residual radioactivity for
)
release of property for unrestricted use are not being proposed as part l
of this rulemaking.
This issue will be dealt with in a separate rule-making action which will propose amending 10 CFR Part 20 to specify limits of residual radioactivity for decommissioning.
l 2A bibliography of these reports and other background documents is included These documents are avail-at the end of the supplementary information.
able for inspection and copying for a fee in the Commission's Public Docu-i ment Room at 1717 H Street NW, Washington, DC 20555.
2 1
Enclosure A 8/17/94 2
=
In the course of this reevaluation, the staff has maintained a dialogue with the States and the public during the early, formative time of decisionmaking on critical issues.
Preliminary staff positions on the major decommissioning issues have been presented in staff (NUREG) reports.2 Decommissioning as defined in this proposed rule means to remove nuclear facilities safely from service and reduce residual radioactivity to a level that permits release of the property for unrestricted use and termination of license.
For the purposes of this proposed rule, the term ' nuclear facilities' is used to refer to the site, buildings and contents, and equipment associ-ated with any NRC licensed activity.
Decommissioning activities are initiated when a licensee decides to terminate licensed activities.
If nuclear facilities are to be reused for nuclear purposes, applications for license renewal or amendment or for a new license are submitted according to the appropriate existing l
- regulation.
Reuse of a nuclear facility for other nuclear purposes is not considered decommissioning.
-These proposed amendments apply to decommissioning of power reactors,.
n8npower reactors, fuel reprocessing plants, fuel fabrication plarits, i
uranium hexafluoride production plants, independent spent fuel storage installations, and non-fuel-cycle nuclear facilities.
The decommission-ing of uranium mills and mill tailings, low-level waste burial facilities, or high-level waste repositories, has been treated in separate regulatory 4
actions.
However, the general technical criteria in this proposed rule will apply to uranium mills in addition to the technical and financial criteria contained in Appendix A of Part 40.
i The proposed amendments apply to nuclear facilities that operate through their normal lifetime, as well as to those that may be shut down prematurely.
It is expected that nearly all facilities will operate through their normal lifetime.
However, the activities following prema-ture shutdown of a facility as a result of an accident are somewhat different than those of a routine decommissioning.
There are three
.- -- u stages involved:
a stabilization period, during which accident condi-
- tions are brought under control if necessary; &n accident cleanup period; 8/17/84 3
Enclosure A
f
[7590-L J and a decommissioning period.
During the accident cleanup, the major portion of contamination resulting from the accident is cleaned up and the associated wastes are processed.
Following accident cleanup, the A
facility may either be recovered for reuse or be decommissioned.
detailed study of reactor decommissioning following accident cleanup (NUREG/CR-2601 - Reference 7) indicated that there may be differences in some of the specific aspects of decommissioning such as the spread of However, the report contamination, waste volumes, exposures, and costs.
D also indicates that the technology exists to accomplish the decommis-sioning and that the safety and costs of decommissioning following the i
accident cleanup do not vary significantly from that following normal j
['
operations.
l f
Current regulations cover the requirements and criteria for'decom-missioning in only a limited fashion.
Although decommissioning is not an imminent health and safety problem, specific requirements related to decommissioning have had to be determined on a case-by-case basis.
l.
Revision of current regulations is necessary to clarify these require-l ments and to provide for consistent and efficient regulatory actions i
related to _decommi.ssioning,_TheJecessary._ amendments could be. issued as I
However, the policy devel-a new part of the Commission's regulations.
(
oped as a result of the reevaluation will directly affect licensing l
activities under 10 CFR Parts 30, 40, 50, 51, 70, and 72. Accordingly, l
amendments to each of these parts, rather than a new part, will facili-tate use by NRC staff and licensees.
Classes of facilities licensed under Parts 50 and 72 are consid major facilities all of which will require a significant decommissioning Activities licensed under Parts 30, 40, and 70, however, enver effort.
Termination of the majority of these licenses requires a wide range.
For these reasons it was relatively simple decommissioning procedures.
necessary to take a somewhat different regulatory approach in these parts to implement the same generic policy.
Description of Policy and Proposed Rul_e Five major issues evolved from the policy reevaluation, namely, decom-missioning alternatives, timing, planning, financial assurance, and resi-In addition, it became apparent that environmental dual radioactivity.
i Enclosure A 4
8/17/84
[7590-01) review requirements could be reduced.
These subjects are discussed in the following paragraphs.
A.
Decommissioning' Alternatives 4
..-More than one alternative method of decommissioning may be acceptable
- depending on t.he type of radioactive contamination present at shutdown i.
-and other factors.
The proposed rule indicates that use of alternatives in which unrestricted release is postponed for a significant period of
- time following cessation of operations would be acceptable in cases where sufficient benefit results.
Possible benefits include such things as reduction in occupational exposure or waste volume. Alternatives and factors affecting their acceptability will be dealt with in a revision
)
of Regulatory Guide 1.86 on termination of licenses for nuclear reactors, I
and in a similar document to be developed for materials facilities.
The alternatives considered are essentially the same ~as those which I
have been used in the past except that they have been redefined to include all-activities leading to termination of license in keeping with the defini-tion of decommissioning contained in this proposed rule.
1 B.
Timina
{
Timing refers to the length of the decommissioning period, that is, the time from permanent cessation of operations to license termination.
Each type of nuclear facility has characteristic radionuclides that will affect the selection of the decommissioning alternative and the length of time acceptable to delay license termination.
These proposed rules require f
that: decommissioning begin shortly after permanent cessation of operations and significant delays in completion of decommissioning would be accept-
~
able if there is some compensating benefit.
8eyond this, factors affecting timing will be considered in the related regulatory guides to be issued, since the acceptability of alternatives and overall timing may involve r
case-by-case considerations.
C.
Planning Preliminary planning at the licensing stage and over facility life is r-important to ensure that decommissioning can be accomplished safely.
Information on funding methods for providing financial assurance for 4
8/17/84 5
Enclosure A
[7590-01]
i decommissioning will be submitted with applications for new licenses for production and utilization facilities.
For existing licenses under Part 50, this information will be submitted within a reasonable period of time after the rule becomes effective.
The time period suggested in This information will consist of a thisgopged rule is two years.
costafor decommissioning either as prescribed in the regulations or as estimated by the applicant or licensee and a descripti'on of the method of assuring funds for decommissioning.A Applicants for independent spent fuel storage installation (ISFSI) licenses will include plans for providing financial assurance for decommissioning in a decommissioning plan submitted at licensing as is currently required.
Similarly, some material licensees licensed under Parts 30, 40, and 70 will either provide financial assurance in prescribed amounts or submit a decommissioning funding plan showing the basis for a proposed amount.
Details of financial assurance requirements are discussed in the next section.
Licentau under Parts 30, 40, 50, 70, and 72 will be required to keep records which could be important at the time of decommissioning.
App.licants _and_1]censees_shoul d _al so_consi detother_ aspects _ of operating procedures as well as design features which could facilitate decommissioning as part of overall programs to protect the health and safety of the public and to keep radiation exposures and effluents "as low as reasonably achievable," however, no specific requirements would be added to the regulations.
Decommissioning plans will be submitted by all Parts 50 and 72 licensees at the time of written notification that the. licensee desires to terminate the license as is the current licensing practice.
This proposed rule would require that this notification be made within two years following permanent cessation of operation or one year prior to license expiration, whichever occurs first.
For Part 50 licensees, the present practice would continue of also applying for an amendment to restrict operation of the facility, thus changing the operating license to what is referred to as a " possession only" license, under which required controls and limits are modified as appropriate to planned procedures.
Licensees under Parts 30, 40, and 70 engaged in activities resulting in 8/17/84-6 Enclosure A
[7590-Oi]
4 major decommissioning considerations will also submit plans for comple-4 tion of decommissioning.
These will be required if a potential for significant health and safety impacts exists and will be submitted promptly after the end of operational activities and prior to the license expira-tion date.
Decommissioning plans will contain sufficient detail to demonstra,te that decommissioning can be accomplished safely.
Major elements f
of decommissioning plans are specified in the proposed rules.
Additional guidance will be made available in planned regulatory guides on standard format and content of decommissioning plans.
I i
In addition to specifying decommissioning plans, other amend-ments related to license termination are proposed for Parts 30, 40, and 70 primarily for clarity and uniformity.
These changes would somewhat l~
modify the procedures established for the termination of a license contained in a final rule publishedJon July 15, 1983 (48 FR 32324).
The requirement for notification of intent to terminate contained in
-- existing paragraph (c) of $$ 30.36, 40.42, and 70.38 will be removed.
Although it may be practical in most cases for operational activities to cease and initial cleanup and survey to be completed at least 30 days j
. prior to Munse termination, the requirement as it exists may result in- ~
' licensees submitting a separate notification of intention not to renew -
t 30 days prior to expiration plus the submission of information concerning residual contamination sometime in the next 30 days.
This separate notification is not considered necessary.
Additior.41 modifications to the requirements contained in existing paragraphs (d)(2) and (3) of El 30.36, 40.42, and 70.38 are made to insert
- the standard for submission of decommissioning plans'and to clarify --
1.
That, whether or not the licensee has detected residual radio-activity, the licensee is responsible for controlling the site until the Commission terminates the license; and l
2c- -That, in all cases, the same standards for termination of license C... rapply, as stated in proposed paragraph (f) of 56 30.36, 40.42, and 70.38:
that radioactive material has been properly disposed'of, reasonable effort
- - has been made to remove any residual contamination, and information exists
+-
" which demonstrates that the premises are suitable for release for unre-stricted use.
i 8/17/84 7
Enclosure A a
k
_-=-
1 e
I
[7590-01]
D.
Financial Assurance The objective of the proposed rule on financing the decommissioning of nuclear facilities is to require licensees to provide reasonable assur-ance that adequate funds are available to ensure that decommissioning' can be accomplished in a safe manner and that lack of funds does not result in' delays that may cause potential health and safety problems. The licensee is responsible for completing decommissioning in a manner that protects health and safety.
At this time the Commission wishes to make clear that the issues raised by the recent decision of the U.S. Court of Appeals for the District of Columbia Circuit in Ngy England Coalition on Nuclear 4
Pollution, et al. v. Nuclear Regulhtory Commission et al., No. 82-1581 (D.C. Cir, February 7,1984), which invalidated the Commission's rule j
respecting the financial qualifications of electric utilities, fall i
outside the scope of this rulemaking proceeding.
As explained in the preamble of the, financial qualifications rule (47 FR 13750, March 31, i__ _... _ _ _ _
1982),_it_was,the. Commission's.. intent ta consider-the-issue -of financial requirements for decommissioning separately in the context of.,,
[
a generic rulemaking proceeding on decommissioning.
There are several different methods for providing financial assurance.
Because of the variety of facility types and licensee financial situations, different methods are considered acceptable for providing reasonable assur-ance of the availability of funds.
The funding methods specified in the j
proposed rule meet the criteria respecting assurance and cost which are 1
described more fully under the subject heading " Criteria for Funding
. Methods." Although the provisions of the proposed rule do not preclude U
review of financial qualifications of a licensee with respect to the ability of the licensee to provide adequate funds to perform decommission-i ing, it is expected that review of a licensee's qualifications will not be necessary if the licensee elects a funding method specified as accept-able in S 50.33(k).
Paragraph 50.33(f) is amended for clarity only.
Information on funding methods will be provided by all applicants for operating licenses and existing licensees for production and
?
8/17/84 8
Enclosure A
prerwmsy l
utilization facilities.
For electric utility applicants and licensees, the amount of funds assured can be based either on an amount prescribed in the regulations, proposed to be $100 million,3 or'on a facility-specific cost estimate.
Plans for financial assurance for decommissioning are alreadyrequiredforindependentspentfuelstorag[instaflations.
Certain applicants and existing licensees under Parts 30, 40, and 70 will also be required to submit a decommissioning funding plan.
The rule specifies that funding plans will be required of licensees author-ized to use unsealed materials of half-life greater than 120 days in quantities exceeding 105 times the applicable quantities in Appendix C of Part 20.
The note to Appendix C concerning the " rule' of ratios" used for purposes of 5 20.303 is not applied in this' case.
For the purposes of this requirement, plated foils would not be considered unsealed material.
In Part 40, the funding plan requirement applies to licensees authorized to use rcre than 10 mci of source material in a readily dispersible form.
IIf the license authorizes processing of materials, although initially sealed or non-dispersible, the processing would be assumed to result in unsealed or readily d.ispersible material.
These licensees.will have the following options:
(1) submitting the funding plan within one year following the effective date of the final rule or (2) submitting a certi'-
fication of financial assurance for decommissioning in an amount of at least $500,000, within one year of the effective date of the final rule, deferring the funding plan until application for renewal is made.
Finan-cial assurance requirements for mills are contained in Appendix A to
/
Part 40 and are not covered by this proposed rule.
Certain other materials licensees will be required to submit either
.a certification that a means of assuring funds in a prescribed amount has been provided or a decommissioning funding plan.
Licensees using between 104 and 105 times Appendix ~C values of unsealed byproduct or special nuclear material must provide assurance of funds ~in the amount of G
.$500,0008 or submit a decommissioning funding plan.'
Licensees using between 103 and 104 times Appendix C values of unsealed byproduct or
~
- special nuclear material or between 10 mCiYd 100 mci'of source material in readily-dispersible form must provide assurance of funds in the amount of $100,0008 or submit a funding plan.
Licensees using sealed sources 3The bases for selecting this prescribed amount and those noted below for materials facilities are, described more fully under the subject heading
" Mechanisms for Requiring Financial Assurance."
e s
i
[7590-01]
4 containing byproduct material in quantities exceeding 1010 times Appen-dix C values must provide assurance of funds in the amount of $50,0008 or submit a funding plan.
l This proposed rule specifies acceptable funding methods in the In order to assure appropriate sections for various types of licensees.
that the funds will be adequate at the time of decommissioning, the pro-B posed rule provides that decommissioning funding plans include provisions for adjusting cost estimates and associated funding levels over the life i
l of-the facility.4 Additional guidance on financial assurance is also i
planned to be provided in regulatory guides.
At the time of final shutdown, or cessation of operations, decom-i missioning plans, when required, will provide an updated, more accurate cost estimate, and some adjustment may need to be made in the decom-missioning fund.
Parts 50 and 72 specifically state that if an alter-l native is chosen which significantly delays completion of decommissioning, means must be included to continue periodic review and adjustment of l
In Part 50, funding level over the extended decommissioning period.
j where internal reserve is allowed for utilities during operation, it f__
'is_specifically requjred_that_the _ funds be_placed _in_an_ account _ separate.
from licensee assets during the prolonged decommissioning period or i
that assurance be providert by a surety or insurance method.
i l
l E.
Residual Radioactivity-A primary objective after permanent cessation of operations is l
For all facilities covered by this.
authorized termination of a license.
rule, all premises must be suitable for release for unrestricted use before a license can be terminated. To release property for unrestricted use a permissible level of residual radioactivity must be established.
These levels are not proposed in this rule, but are being developed in a separate rulemaking action.
In the past, limits have been provided as guidance in such documents as Regulatory Guide 1.86, and have sometimes been determined on a case-by-case basis.
Enclosure A 10 8/17/84
.~-
[7590-011 F.
Environmental Review Requirements The proposed rule would reduce the environmental review requirements (National Environmental Policy Act of 1969, as amended) ~related to decom-missioning by amending Part 51..
n The overall impacts of decommissioning would continue to be addressed in the environmental reviews for the licensing of major facilities.
No additional detail would specifically be required.
Except to the extent required by special circumstances, preparation of env'ironmental impact statements for the decommissioning of production and utilization facili-ties and independent spent. fuel storage insta11ations' would no longer be
-required.
Instead, in accordance with the procedures'in the recently revised Part 51 of the Commission's regulations, an environmental assess-
. ment would be prepared.
This environmental assessment ~would supplement the environmental impact statements previously prepared in connection
- with the issuance of the construction permit and operating license for
-the. facility.
It should be noted that pursuant to cr'iteria in revised ~
~
, 10 CFR Part 51 environmental assessments may result in a conclusion that an environmental impact statement is required in the particular circum-stances of the proposed Federal action. _Information con ~cerning envfron-mental impacts of decommissioning would be submitted by~the licensee in a supplement to environmental reports previously submitte~d.
Environmental impact statements would continue to be required for the decommissioning of waste disposal facilities only.
The proposed rule also indicates that there would be no additional environmental review requirements connected with the new decommissioning requirements, specifically, that approval of decommis~sioning funding
-plans be categorically excluded from requirements for environmental ~
impact statements or environmental assessments.
-"L Rationale for the Proposed Rule Changes
~~
- "~
A.
Decommissioning Alternatives r
_ Decommissioning alternatives are categorized into three major classi-
-y fications which are referred to as DECON, SAFSTOR, an~d ENTOMB.
This terminology was introduced to reduce the confusion an~d misunderstanding
-- 8/17/84 11 Enclosure A
[7590-01]
l that existed with the previous terms used to designate decommissioning These terms have the following meanings:
alternatives.
DECON is the alternative in which the equipment, structures, and j
i t
e
. portions of a facility and site containing radioactive contam nan s ar removed or decontaminated to a level that permits the property to be released for unrestricted use shortly after cessation of operations.
SAFSTOR is the alternative in which the nuclear facility is placed and maintained in such condition that the nuclear facility can be safely E<
stored and subsequently decontaminated (deferred decontamination) to levels that permit ' release for unrestricted use.
ENTOMB is the alternative in which radioactive contarrinants are The encased in a structurally long-lived material, such as concrete.
entombed structure is appropriately maintained and continued surveil-
'i lance is carried out until the radioactivity decays to a level permit-
{l Thisaliernativewouldbe ting unrestricted release of the property.
allowable for nuclear facilities contaminated with relatively short-lived radionuclides such that all contaminants would decay to levels permissible for unrestricted use within a period on the order of 100 years.
I<
i i
-._ Based on an analysis of the technical data base, decommiss on ng can be. accomplished safely and at reasonable cost shortly after cessa DECON has certain benefits in that it would prepare of facility operation.
the property for unrestricted use in a much shorter time period than SAFSTOR or ENTOMB sith acceptable effects on occupational and public Completing decommissioning and releasing the property health and safety.
for unrestricted use eliminates the potential problems that may result f
from an increasing number of sites contaminated with radioactive ma as well as eliminating potential health, safety, regulatory, and econam problems associated with maintaining the nuclear facility.
Delay in the completion of decommissioning, as in the case of SAFSTOR or ENTOMB, would be acceptable primarily for reasons of occupj tional health and safety, since it is recognized that with delay there will be reduction in occupational dose and radioactive waste volume f In addition, SAFSTOR some nuclear facilities due to radioactive decay.
i may have some advantage where there are other operational n ties at the same site, and may also become necessary in other case The there is a shortage of radioactive waste disposal space offsite.
Enclosure A 12 8/17/84
[7590-01],
4 appropriate delay will depend on the type of facility and the contaminant isotopes involved, but should not be greater than about 100 years as this is considered a reasonable time period for reliance on institutional con-trol (Ref. 19).
One of the difficulties with ENTOMB for any complex struc-ture such as a reactor is that the radioactive materials remaining in the entombed structure would need to be characterized well enough to be sure that they will have decayed to acceptable levels at the end of the surveil-lance period (up to about than 100 years).
If this cannot be done ade-quately deferred decontamination would become necessary, which could make ENT0MB more difficult and costly than DECON or SAFSTOR.
B.
Timing The issue of timing concerns what amount of time would be.appro--
I priate to allow for completion of decommissioning including the entire period between final shutdown and license termination.
The primary consideration is the decay of radioactivity which may result in reduc-tions in occupational exposure and waste needing disposal.
Facilities differ regarding the particular radionuclides most critical to decom-
__missioning.
For light water power reactors Co-60, with a half-life of 5.3 years, is the nuclide that has the most effect on decontamination efforts and is referred to as the critical / abundant nuclide.
Other isotopes that can affect decommissioning efforts are Cs-137 (30 year half-life) and the long-lived isotopes Nb-94 and Ni-59.
As discussed above, a review of the technical data base shows that, for DECON, occupational exposure can be kept reasonable.
For example, studies indicate that occupational doses from decommissioning light water
- power reactors would be about 400 man-rem per year (1200-1900 man-rem over 4-5 years for large reactors). This is generally less than current annual
.. doses at operating reactors.
SAFSTOR will result in: reduced occupational dose and amount of radioactively contaminated waste..' Based on the half '
1.ife of.the critical / abundant nuclide, the reduction of. occupational doses beyond about 30 years would be marginally significant although a signifi-
. cant volume reduction in contaminated waste would result from 50 years in
- safe-storage.
It appears that DECON or 30 to 50 year SAFSTOR are reasonable options for decommissioning a light water power reactor.
Generally for reactors, the overall impact of either of these alternatives is similar, 8/17/84 13 Enclosure A
[7590-01]
f with the lower occupational dose and wastes with SAFSTOR compensating for the costs and uncertainties of controlling the site for a long period.
The choice of alternative in individual cases will depend on a number of t
factors specific,to the particular reactor, site, and time of decommission-ing, for example, a longer SAFSTOR period may be acceptable if the safety of an adjacent reactor might be affected by dismantlement procedures.
L With regard to the ENTOM8 alternative, long-lived activation products contained in reactor internals, such as Nb-94 and Ni-59, would probably preclude the use of ENTOMB for power reactors unless reactor internals l
were removed.
If reactor interna 1s are removed, some method would have'to t
be provided to demonstrate that the entombed radioactivity will decay to levels permitting release of the property for unrestricted use within about 100 years, which, as noted above, would be difficult.
For testing facilities and ISFSIs, occupational doses would be much less significant and much easier to manage than for power reactors.
- Thus, 1
DECON is considered the most reasonable option.
SAFSTOR could be justified in some cases.
ENTOMB is not expected to be viable for ISFSIs and is also unlikely to be a reasonable option for testing facilities as the cost would
_._ _ _not.be justified.
For materials facilities associated with licenses under Parts 30, 40, and 70, occupational doses are also quite low in most cases, and DECON the most likely option.
SAFSTOR is possible for short-lived materials, but any extended delay would rarely be justifiable.
For these reasons the proposed amendments to Parts 30, 40, and 70 do not mention alternatives or have special requirements for extended delays.
4 If after disposing of inventory and some preliminary decontamination, contamination from relatively short-lived materials is reported, the Commission will determine whether allowing a period for decay is an i
appropriate means of completing decommissioning.
It is expected however that for most licenses under these parts it will be practical to complete decontamination to levels suitable for unrestricted release prior to reporting levels of residual radioactivity to the Commission.
A survey must be carried out and reported on promptly after the end of operations and prior to the expiration of the license.
1 i
8/17/84 14 Enclosure A
[7590-01)
C.
Planning Planning for decommissioning is a critical item for ensuring that the decommissioning activities can be accomplished in'a safe and timely manner.
Development of detailed plans at the application stage is not
..possible because many factors (e.g., technology, regulatory requirements, economics) will change before the license period ends.
Thus, most of the planning for the actual decommissioning will occur near final shutdown.
However, a certain amount of preliminary planning should be done at the application stage.
Preliminary Planning The availability of adequate funds is important in assuring that decommissioning will be carried out in a safe and timely manner.
There are also aspects of design and operations that could affect decommission-ing in terms of improved health and safety and reduction in the amount of radioactive waste.
Information on decommissioning funding methods, described below, w411 be submitted with an application for an' operating license for a production or. utilization facility.
An application f~ r an independent o
spent fuel storage installation will include a decommissioning plan including financial plans as is presently required.
In the case of existing Part 50 licensees, information on funding methods would need to be submitted within a reasonable time period following the' effective date of this rule.
This information will be provided in the form of a decommi_ssioning funding plan or, in the case of electric utility applicants
.and licensees, may be provided as a certification of financial ~ assurance.
A certification will indicate that the amount prescribed in the regulation,
$100.million, is being used, and will include a oescription of the method o.f assuring funds for decommissioning.
A funding plan will include an initial cost estimate and also provide a description of the method of assuring funds for decommissioning including means ofiadjusting cost r-estimates and associated funding levels over the life of the-facility.
The initial cost estimate is intended to provide an a'pproximate estimate of the decommissioning cost.
Initial estimates may be based on informa-tion from the literature (e.g., generic studies, licensee models, experience, etc.) which provide a reasonable estimate.of the cost of j
8/17/84 15 Enclosure A
-l l
)
f i
[7590-01]
J decommissioning.
The PNL decommissioning studies can be used for initial estimates with suitable adjustments for inflation and for site-specific factors.
The proposed regulations require that over the ope ~ rating life l
of the facility, the cost estima,te be periodically updated by the licensee to take into account factors which could affect the cost of decommissioning.
In this manner it is expected that the amounts being assured by the funding method will reach a level at the end of life which is approximately equal to th,e actual costs of decommissioning.
Acceptable methods of providing j
financial assurance are specified in the rule and are discussed further 1
in the following section on financial assurances.
j For most facilities associated with licenses under Parts 30, 40, l
and 70, decommissioning is much less involved, and has much less impact than the decommissioning of a reactor, for example.
A decommissioning i
funding plan i.s being required for certain facilities where decommis-sioning costs could be very high.
Financial assurance is also required j
without the submittal of a funding plan for certain other materials l
licensees as discussed in the next section.
The studies performed as part of the policy reevaluation have shown
'..._ __..._. _.that facilitation.of. decommissioning in the design of.a facility or_ during its operation can be beneficial in reduction of operational exposures and waste volumes requiring disposal at the time of decommissioning.
In addi-tion, facilitation can improve financial assurance by keeping actual costs of decommissioning in line with the estimated costs on which the levels of financial assurance are based.
Although no specific requirement is being proposed, the effects of operational procedures on decommissioning should be considered by licensees as part of their program to maintain radiation exposures and effluents "as low as reasonably achievable." The'facilita-l tion of decommissioning in the design of facilities can be considered under the general standard for issuance of license that equipment and facilities he adequate to protect the health and safety of the public contained in l
SS 30.33(a)(2), 40.32(c), 50.40(a), 70.23(a)(3), and 72.31(a)(10).
i Suggestions for facilitation are presented in the PNL studies, including l
a preliminary study on facilitation of reactor decommissioning.
l In particular, experience has shown that an important aspect of opera-tion is the maintenance of adequate information on the design and current I
l l
8/17/84 16 Enclosure A
[7590-01) condition of the facility and site, so that decommissioning can be care-fully planned and carried out.
The rule thus specifically requires that records of relevant operational information helpful in facilitating decom-missioning be kept.
Plans should be developed to collect, maintain, and
'[
recall records and archive files which include complete' as-built and as-
~
revised drawings and specifications and significant o'perational occurrences.
The. rule specifically allows the use of references to relevant informa-tion and locations in order to avoid unnecessary dupfication of records kept for other purposes. The rule also specifies that referencing of drawings need not include indexing of each individual relevant document.
The intent of this requirement is to assure that all important information is kept until termination of license and that it be readily accessible when needed.
~
Final Plannina Final decommissioning planning will involve greater technical detail than preliminary planning.
Decommissioning plans shduld b'e submitted'in a timely way for review and approval prior to the initiation of any major decommissioning activity to avoid delay of decommissioning after shutdown.
For a power reactor,_ review and approval could take up to a year.
Thus, it would be beneficial to submit plans a year prior to planned termination of operation, if possible.
4 The proposed rule would require decommissioning plans for production I
and utilization facilities and ISFSIs to be submitted within two years following penanent cessation of operation or one year prior to operating license expiration.
The decision as to whether a shutdown will be permanent
~
i is, of course, the licensee's.
This provision does not l'imit how long a licensee can have a facility shut down under his operating license but means.
only that when a facility is permanently removed from ~ operational status, plans need to be made as to how the ultimate terminatiidn'-of license will
. be attained.
Upon approval of the plans, the license wfil be modified t'a reflect the approved decommissioning alternative auth'orizing continued possession until the approved alternative has been carried 'out.
This reflects current licensing practice.
For reactors wh'ich h' ave 'e'rmanently
~
p shut down prior to the effective date of the final rule, no' time limit is given for application for license. termination and no additional-planning is r
C 8/17/84 17 Enclosure A
[7590-01]
However, the Commis-specifically required until such application is made.
sion may require additional planning, particularly in the area of financial assurance, on a case-by-case basis as' appropriate or practical,for partially decommissioned facilities in line with the policy represented by this rule if made effective.
The level of detail required would be appropriately less for the delayed decontamination activities if SAFSTOR is the proposed alternative, however, preliminary aspects of planning would have to be included for the E'
entire decommissioning procedure.
Updated and more complete plans for delayed decontamination activities would be submitted towards the end of the safe storage period and would have to be approved by NRC before the start of the major decontamination activities.
Decommissioning plans must address the following:
i 1.
Decommissioning alternative.
A description of the alternative l
~
Plans for processing to be used for decommissioning must be presented.
and disposing of radioactive waste must also be described. Waste disposal If waste plans must assess the availability of waste burial grounds.
l burial space is unavailable, then contingency plans must be presented I
b ur.d waste storage or
.__..... _ that address use of available temporary a ove gro
- i !
some other method.
Depending on a variety of circumstances, temporary i
above-ground waste storage may be accomplished offsite or onsite and may require Commission review and approval.
Controls and limits on" 2.
Technical and environmental plans.
procedures and equipment to ensure occupational and public safety and to j
protect the environment during decommissioning must be proposed by the As part of this, details of a quality assurance program should licensee.
Changes to procedures for safeguarding special nuclear also be submitted.
material should be included when appropriate.
l 3.
Terminal radiation survey.
A plan for a final radiation suryey must also be presented to ensure that remaining residual radie sctivity is within levels permitted for releasing the property for unrest'ricted use.
Unrestricted access to portions of the property may be' desirable prior to full decommissioning.
A separate termination survey'would be necessary for those areas.
Enclosure A 8/17/84 18
[7590-01) 4.
Cost estimate.
An updated cost estimate must be incimded along with a plan to ensure that adequate decommissioning funds are available to carry out the decommissioning operations.
This plan would show how any deficit in present funding would be covered.
If delayed decommissioning is proposed, a method for securing the fund would be proposed.
Plans for adjusting funds over the storage period are also needed.
For specific licenses under Parts 30, 40, and 70 detailed plans for the completion of decommissioning are only required where decommission-ing coul'd significantly increase health and safety imp' acts over those of
~
normal operation or if the Commission has previously det' ermined a need for such plans and required them by a license condition. These plans would contain essentially the same information as described above for Parts 50
- I and 72 licenses.
For materials licensees, those plans are not required
(
until after inventories of radioactive materials have been disposed of,
- preliminary decontamination procedures have been carried out, and con-tamination remaining after these procedures has been a's~ses~sedi 'However, it would be advantageous to licensees and the Commission for decommission-ing plans to be submitted prior to the end of operational activities, if
- possible.
It is_ expected that the need.for such a pian will in most cases be anticipated and that a reasonably accurate appraisal of what will be necessary can be accompli.shed prior to the end of operation.
It would l
therefore be possible for the licensee to submit plaris early and obtain approval of these plans in time for decommissioning to proceed promptly following the end of operational activities.
~
No amendments are proposed which specify limitations on occupational or pubite doses or effluents to the environment.
It is : considered suffi-cient that the requirements of Part 20 continue to apply until the license is terminated by the Commission.
The proposed planning requirements are considered appropriate means of assuring that the decommis'sioning will be carried out in accordance with Part 20 and specifica1Ty that doses will be kept as low as reasonably achievable.
i-D.
Financial Assurance
~
L. ~ '
In accordance with its responsibilities as defined by the: Atomic Energy Act, the primary responsibility of the NRC with respect to decom-missioning is to protect the health and safety of the public.
An important 8/17/84 19 Enclosure A
[7590-01]
aspect of this responsibility is to have reasonable assurance that at y
the time of termination of operations (including premature closure of l
the nuclear facility) adequate funds are available so that decommission-ing can be carried out in a safe and timely manner.
Without this, assurance, there could be uncertainties concerning the availability of funds at the time of decommissioning.
These uncertainties are of two The first is that the financial condition of a particular general types.
]
organization is difficult to predict y, ears into the future when decom-I missioning is likely to occur.
As a result it is possible that there may be priority or competing claims to these assets.
The second type of uncertainty is the possibility that the nuclear facility could be forced I
to shut down prematurely, thus reducing the time for collecting funds.
The availability of funds for post-accident cleanup is related to financial assurance for decommissioning. The costs of post-accident cleanup can be substantially larger than the costs of decommissioning and the availability of funds for accident cleanup can impact a licensee's
^
Assurance capability to decommission the facility following the cleanup.
of funds for post-accident cleanup 'is more properly covered by use of insurance.... Post-accident cleanup activities are broader in scope than 2
l decommissioning, that is, they can lead ultimately'to either reuse or
]
decommissioning.
Accordingly, the funding requirements for accident cleanup are not included in this proposed rule but are contained in 10 CFR 50.54(w) which requires that utility licensees for production and f
l utilization facilities obtain insurance to cover decontamination and cleanup costs associated with onsite property damage resulting from an As discussed below, the acceptability of certain of the fund-l accident.
ing methods allowed in the proposed regulations depends on this accident l
cleanup insurance requirement.
Accident cleanup insurance for other l~
types of licensees is under consideration in a separate action; an advanced notice of proposed rulemaking is being developed.
Mechanisms for Requirino Financial Assurance As discussed earlier, financial assurance for the decommissioning f
of major facilities will be provided by implementation of a funding method with a funding level based on expected decommissioning costs.
l This includes all Parts 50 and 72 licensees, as well as those licensees Enclosure A 1
20 8/17/84
[7i n..1-]
under Parts 30, 40, and 70 which are expected to have ~significant decom-missioning costs.
Electric utility and some material licensees are given the option of providing financial assurance in a prescribed amount or submitting a decommissioning funding plan which contains a*n estimate based on a facility-specific evaluation.
If financial assurance is provided in the prescribed amount, only a certification pertaining to~ financial assurance is submitted.
This approach is proposed in order ~to minimize the administrative effort of licensees and the Commission of obtaining reasonable financial assu'rance for decommissioning and is based on the
~
significant data base on decommissioning developed as part'of the policy reevaluation.
The specified amounts are chosen to provide sufficient funds to cover decommissioning costs for most of the licensees in each category.
For
. power reactors the amount of $100 million was chosen based on data in NUREG/CR-0130 and -0672 (References 2 and 3), which analyze the costs of -
decommissioning PWRs and BWRs, respectively.
This figure also takes
?
into account escalation of these costs to 1984 dollars, additional costs of engineering and planning, use of contractors, and variations in local 1 abor _ rates,_in_ waste. transportation costs, and in local power costs.
This amount does not account for costs of shipment of spent fuel which are assumed to be part of operational costs or the costs of demolition of nonradioactive structures which is not required for NRC license termination.
For research and testing facilities a specific amount is not set due to the large diversity of facility types.
~
The amounts for materials licensees were chosen based primarily on data in NUREG/CR-1754 (Reference 12) and on licensing experience.
Based -
on estimates in NUREG/CR-1754, a single major processing laboratory wou1d
~
. -cost in a range approaching $100,000 to decommission.- It is expected that the majority of licensees for which a certification of $100,000 is
.specified would have only one major laboratory or processing area and a very limited potential for site contamination.
For those licensed mate-
- rials for which assurance of $500,000 is specified, it is expected that several laboratories would typically be involved in radioactive material processing or handling.
In some cases, a large number of individual rooms or laboratories may be used in connection with licensed activities, however, only.a few would require a major decontamination effort such as the example 8/17/84 21 Enclosure A
[7590-01]
laboratories stucied in NUkEG/CR-1754.
The 550,000 specified for very large sealed sources is based on licensing experience and is the 8
estimated maximum cost to decommission a large pool-type irradiator.
It is anticipated that these prescribed levels of assurance will be updated as cost factors change, for example, increase in costs of low-level waste burial.
Licensees a
Ofcourse,manyfactorswillaffectdecommissioningcosts.
who can demonstrate that the expecteti. decommissioning costs for their D
facility are significantly lower than the applicable prescribed amount have the option of doing so by submitting a decommissioning funding plan.
An additional means of reducing administrative effort which has been incorporated into the proposed rule is allowing those materials licensees for which a decommissioning funding plan is required to first supply financial assurance for $500,000 and delay submitting the funding plan until application for license renewal is made, at which time the funding plan can be more efficiently reviewed together with the renewal l
application.
Fundi ng Methods - - -
The wide diversity in types of nuclear facilities necessitates that the NRC allow latitude in the use of funding methods.
In analyzing funding methods which would provide reasonable assurance, NRC has developed the following major classification of funding alternatives:
Cash or other liquid assets that will retain their 1.
Prepayment.
value for the projected operating life of the nuclear facility are deposited prior to startup into an account segregated from licensee assets and outside its administrative control.
Periodic review and adjustment of the fund is necessary to assure the adequacy of the fund. Prepayment can be in the form of a trust, certificate of deposit, government security, escrow account, or government fund.
2.
External sinking funds.
The external sinking fund requires that a prescribed amount of funds be set aside in an account at fixed intervals over the life of the f acility, such that the funds plus accumulated interest would be sufficient to pay for decommissioning costs The account would at the time termination of operation is anticipated.
Enclosure A 22 8/17/84
[7590-01]
3 be segregated from licensee assets and outside licensee control.
Types
=
l of accounts could be similar to those described above for: prepayment.
~
3.
Internal reserve. This approach usually uses negatire._ne.t_
salvage value depreciation that allows estimated decommissioning costs to be accumulated over the life of the nuclear facility.
In-this method, i.
the funds are not segregated from the company's assets, rather they are
. invested in its assets. At the and p the nuclear facility's life, bonds are issued against these as:;ets and the funds raised'are used to. pay for decommissioning.
This approach can also take the form of a-segregated r
int.ernal reserve, which is similar to an external sinking fund, except that funds are held by the company.
-~
M Insurance, surety bonds, letters of credit, and lines'of..
4.
credit and other guarantee methods.
Insurance could be.used.to provide __
coverage for premature decommissioning expenses.
An; insurance-type mechanism might also be used for all decommissioning expenses, including those planned under normal circumstances.
The surety bond, credit methods, and other guarantee methods assures that the decommissioning costs will be paid should the licensee default.
The licensee would still be respon-l sible to pay for decommissioning.
With~ respect to power reactors,-it-l appears questionable that bonds of the size necessary and for the time i
involved will be available.
However, surety bonds or credit methods I
appear to be available for nuclear facilities that involve smaller costs
{
and shorter time periods.
Contractual arrangements must provide that
[
NRC be notified prior to cancellation, must ensure that a surety bond or credit method remains in effect until the license is terminated, and must be set up such that the beneficiary would be a trustee acceptable to the-Commission.
l
- - The types of surety arrangements being considered in this proposed ~ ~
l rule are similar to those contained in the Commission's recently enacted requirements in 10 CFR Part 61.
The Commission found in developing those requirements that self insurance for a private sector applicant or licensee 1
l would not be an acceptable form of surety.
- Another potential funding method of this type is for a licensee, l
where practical, to obtain a guarantee thati the local, state, or Federal government will assume financial responsibility for decommissioning the l
facility.
This would most likely be possible when the licensee is a local, 8/17/84 23 Enclosure A
[7590-01]
v State, or Feoeral agency or a state-affiliated organization, such'as a university or hospital.
r Criteria for Funding Methods The NRC staff considers two primary criteria in evaluating funding:'
methods.
These criteria are the degree of assurance of the availability of funds and the cost of providing assurance.
The degree of assurance is a measure of how effective ~ the-funding --
s I
method is in providing assurance that funds for decommissioning will be available when needed.
From the Commission's perspective, assurance is t
~~
~
the most important criterion.
Prepayment provides the greatest assurance that funds will actually 6
i be available for either normal or premature decommissioning since the necessary funds are deposited' at startup.
Some adjustment'will likely I
be necessary over the period of licensing because of uncertainties in cost estimates and changes in inflation and interest ~ rates.
The insurance alternative also provides excellent assurance in that it could provide coverage for premature decommissioning costs and for licensee-default.- For electric utility licensees,- the property-damage E - - - --
insurance required by 10 CFR 50.54(w) provides reasonable assurance of funds for the potentially large costas of decontamination leading up to premature decommissioning.
In some instances, such as in the case of.
government licensees, guarantees of financial responsibility by the
- appropriate local, State, or Federal government entities-are considered adequate in providing assurance.
As discussed above~, self-insurance is not considered adequate.
Surety methods (for example, surety bonds, lines of credit,-letters
- of credit, secured interests, or other guarantees) can provide adequate
- assurance to cover default for those licensees to whom'they'are available.
j uHowever, from the standpoint of acceptability, sureties-have certain dis-l!.
.. advantages that must be considered.
In particular, contractual 1 arrange-
- ments will have to be written such that the surety bond.or credit
~ ~ ~
mechanism cannot be terminated by the surety company' or bank prior to
-other arrangements being made, that a surety bond or credit ~ mechanism remains in effect until the license is terminated, and that the surety company itself is financially stable.
8/17/84 24 Enclosure A
_. ~
[7590-01i The external sinking fund option provides a good level of assurance.
Because the external sinking fund is' held outside thi' licensee's assets and control, it would not be vulnerable under most Ifkely trust arrange-ments if the licensee went bankrupt.
On the other hand, in the event of
~
premature decommissioning, there would be a greater Tfkelihood than with the prepayment method that. insufficient funds had beeri accumulated. 'This
~
. situation would be mitigated if the fund was either structured so that r, higher payments were made earlier inta facility's life,r~or coupled with a' deposit or insurance or surety.
~C:-
~-'
Providing lesser assurance is the internal reserve.
Under' normal: P - -
circumstances, the internal reserve would be similar to~:tfie external
- sinking fund in the pattern of funds set aside and should" provide ade-quate funds if a nuclear facility is decommissioned at the end of its expected life.
However, because it depends on financing internal to the licensee, the internal reserve is vulnerable to events'or situations that undermine the ' financial solvency of a licensee. JA bankrupt'or~
financially troubled licensee would have difficulty in raising capital against its' decommissioning reserv*e and even a segregated internal ~
- reserve-fund may not be available to pay for decbamisisforiing costs.~~ ~ ~
Thus, the internal reserve is acceptable only if supplemented by a mechanism providing additional assurance such as insurance or surety arrangement.
P I'*
For electric utilities, the insurance required by 5 50.54(w) is' considered sufficient to allow the use of internal reserve. -For other licensees, internal reserve would not provide adequate ~ assurance unless backed up by a surety or insurance covering decommissioning-costs.
In this case, however, it is the surety or insurance that provides the assurance; although the licensee may use an internalireseYve to accumu-late funds, only the surety or insurance need be reported ~to NRC; Cost of assuring funds is an important consideration:from the standpoint that an alternative must be reasonably costteffective'in order'-
to be acceptable.
Cost of a funding method is defined as theiincremental
- revenue requirements that result from using a particular funding ~ method, other factors being equal.. (Administrative costs to the NRC'and other regulatory agencies are also included.) Cost is sensitive to even
- relatively small variations in assumed inflation rates, interest and 8/17/84 25 Enclosure A
[7590-01]
i
- dis;ount rates, expected facility life, Federal tax policies, deprecia -
l-l tion.and amortization ' schedules, and other accounting procedures. : Based i
l on these variations, each of the funding alternatives has a fairly wide l
calculated cost range.
Taxation policies can have a significant effect on the cost of funding alternatives.
The internal reserve method tends to be less expensive than external 1
l-sinking funds or prepayment since a company can normally earn'more from its own capital structure than by iibesting in higher grade commercial securities outside the company.
The cost of guarantee methods, such as b:
sureties, letters of credit, or insurance, would be in addition to normal j
decommissioning expense.
i Funding methods considered acceptable in providing reasonable levels of assurance may be different for different types of facilities.
For l
example, the situation for a large power reactor, can be significantly different than that for a small testing facility.
Generally for power reactors,. state utility commissions regulate retail rates thus permitting 1
utilities to recover the cost of providing electricity from their customorr.
the decommissioning costs are higher, and the licensees are required by.
e _10 CFR_50.54(w) to carry insurance-for-post-accident decontamination-and J-. -
lg _:
~. _ _ _
cleanup.
Even financially troubled utilities have sufficient assets to cover the costs of decommissioning.
Among utilities, there are also differences, such as multi-asset versus single-asset utilities (i.e...a utfTity with a single generating facility) or public versus investor-j owned utilities.
Based on the above considerations, this proposed decommissioning rule l
permits a range of, options which are expected to provide reasonable assur-l ance of the availability of funds for decommissioning.
The acceptable l:-
options are specified in the proposed rule.
Planned regulatory guides will These l
provide guidance on how these funding methods will be implemented.
requirements and the planned accompanying guidance are similar to those for 10 CFR Part 61.
Periodic Review l
The proposed rule would require that decommissioning funding plans I
contain provisions for periodic review and adjustment in order to assure l
r 8/17/84 26 Enclosure A
[7590-01h that funds will be adequate at the time of decommiss'ioning'.
Appropriate" -
periods for review and the level of effort necessary'will vary for 1
different types of licensees and financial considerations'. ' For many cases,'
routine adjustments for changes in inflation and int'erest rates might be '
~
done annually by the licensee and could be reported in~the' annual financial report without the need for NRC approval.
A technic'al' Feview of the
, information in the preliminary planspr the cost estiinate for a funding' plan could be done less frequently and submitted to NRC fo' approval.
~
r t
For the shorter term materials licenses, the renewal process'may be sufficient for technical reviews.
l Existino Licensees
)
Particular consideration has been given to the case of existing ~
{
licensees whose funding methods will need to provide an: adequate level of i
assurance within a shorter time frame.
The proposed rule-would require that a funding method be proposed within two years following the effec-tive date of this rule for production and utilizatio~n facilities and i
- within one year for other licensees for which it is required and estab-5_._
-.-11shed ~as 'soon as ' approved by NRC-- F6r~ funding methods' in ithich funds would normally be accumulated over the entire life of the facility, larger periodic payments would, of course, be necessary in order to
'{
accumulate the total decommissioning costs within the-remaining lifetime of the facility.
When such methods are not coupled with a surety or other
{
guarantee as is allowed in the case of utilities, adequate assurance should be provided by building up the fund to the level that would have l
been attained if accumulation of funds had been started at the' beginning l
of facility life.
Establishment of these decommissioning funds by use '
j of prepayment or accelerated sinking fund by all existing' licensees, within a short time following issu'ance of this rule could have a significant impact on capital markets.
To alleviate ~this impact, existing licensees with estimated decommissioning costs'of'5 million 1
l dollars or more would be allowed to accumulate an adequate decommissioning fund, as discussed above, over a reasonable period o~f time following the initial establishment of the fund.
If more than 5 years remain prior to
]
i license expiration an acceptable period of time would be 5 years or one-l third of the remaining license period, whichever is greater.
8/17/84 27 Enclosure A
- ~
[7590-01]
g d
- D i
{
Extended Decc,mmissioning Period When decommissioning is to be carried out over an extended period f.
-of time such as with SAFSTOR, the proposed rule would requir.s -that the le decommissioning fund be in an external account unlest assurance is being.
provided by a surety, insurance, or certification method.:: In this way, a-for a facility which is no longer producing revenue, the funds would be i
This would be done at the protected irrespective of licensee stability.
- beginning of the storage or surveil 1a'oce period.
Review and adjustmen't
~
D of funding level must continue over the extended decommissioning period.
l i
Request for Comment The regulatory approach for assuring funds for decommissioning has -
been particularly difficult to resolve.
The issues af concern are:
which 4
funding methods to allow for utilities during operation and during any. lone l
term decommissioning, and whether to set a prescribed amount for the level j
Additional information and comments are specifically of assurance.
i, requested by the Commission on the costs and adequacy of assurance of the.
l various funding methods.
l__
PIRG, et al., Petition for Rulemakino, Docket No. PRM-50-22.
On July 5,1977, as supplemented October 7,1977, and January 3 l
1978, the Public Interest Research Group (PIRG), Ariz6nans for Safe Energy, Citizens United Against Radioactive Environment, Community Action Research Group, Critical Mass Energy Project, Environmental Action Foun-dation, Environmental Action, Inc., New Mexico Public Interest Research l
Grcop," New York Public Interest Research Group, North Anna Environmental Coalition, Texas Public Interest Research Group, and National Consumer l
l Law Center Energy Project (hereinafter the ' petitioners'), petitioned -
f the Commission to initiate rulemaking to promulgate regulations for nuclear power plant decommissioning which would require plant operators -::-
to post bonds, to be held in escrow, to ensure that. funds would be.
)~
- available for proper and adequate isolation of radioactive material.upon:-
j.
each plant's decommissioning.
On June 22, 1979, the Commission pub lished in the Federal Register (44 FR 36523) a partial denial of the --
l In this notice the Commission specifically denied petitioners' request.
the petitioners' request to immediately initiate rulemaking to implement i
Enclosure A 28 8/17/84
[7590-01j a specific decommissioning funding plan that would require nuclear power
- plant operators to post surety bonds to cover decommissioning costs.
The
- . Commission granted the petitioners' request to reconsider the adequacy of its regulations on decommissioning.
The Commission indicated that other issues and funding alternatives raised by the petitioners would be con-sidered within the context. of the NRC decommissioning rulemaking
, proceedings.
?
In addition to surety bonds, th'e' petitioners advanced two other options to finance nuclear power react 6r decommissioning:
(1) funds in an amourit sufficient to pay for projected decommissioning would be set '
aside in an escrow account before commencing reactor operations, and (2) funds would be accumulated in a sinking fund during the life of the plant supplemented by a surety arrangement as necessary to allow for the risk of a licensed utility going bankrupt before the sinking fund had accumu-lated sufficient funds. The petitioners indicated that the require-ments should apply to existing licensees as well as future licensees.
The petitioners also raised the issue of the Commission's jurisdiction to regulate the arrangements for decommissioning.
The original petitioners' joined by others7 submitted comments-in response-to-the-Federal Register notice (44 FR 36523, June 22, 1979).
These comments were received on November 21, 1979.. The comments discussed NPC's jurisdiction to promul-gate rul'es mandating specific requirements covering decommissioning costs, theneeEforNRCtoestablisharulerequiringitslicenseestomakespe-cific financial plans to meet decommissioning costs, surety bonds as a supplementary option, and the disadvantage of unfunde'd alternatives.
The PIRG petition.and the petitioners' supplementary' comments were considered in the development of this proposed rule.. The Commission agrees that its regulations should be amended to require that licensees-plan for decommissioning and provide reasonable assurance that funds will
-be av'ailable to cover decommissioning costs when needed.
For reasons discussed in the prev.ious section, the Commission does not believe it is necessary, or desirable, to require a specific financial method for col-1ecting decomMssioning funds.
The proposed amendments would require licensees to submit a cost estimate and a proposed financial method for assuring that funds will be available for decommissioning.
A number of 8/17/84 29 Enclosure A
[7590-01) acceptabl,e methods are indicated.
The Commission wit) 'r'eview the '1fcensees '
funding methoos and evaluate them with respect to the new requirements.
i A.11censee's method for providing decommissioning funds must be acceptable This procedure covers all applic' ants for opera 1!ing
i
..ta the Commission.
~
. licenses and existing licensees under Part 50.
To th'e ~ extent'that the'
~
~
~
.., g.,
. petitioners would require promulgation of a specific' met' hod' for financing power reactor decommissioning, the p.etition is denied. ^ To' ~th'e extent ^
i that the proposed amendments would allow consideratfo'n' of the p'etitioners -
]..
suggest,ed financing methods, including ' surety bonds lf' they ~are 'available, the petition is granted.
This action would complete-NRC consideration ~
of the issues raised in PRM-50-22.
'" f.
E.
Residual Radioactivity Levels Although residual radioactivity limits are being developed'in' a
~
separate action, much consideration has been given td this' issue as part I
of the overall reevaluation of decommissioning polic'. t Although an' upper y
limit in terms of dose is being considered, actual l'evels attained in l
any case should be as low as reasonably achievable.
Bas'e'd on the infor '
j
_ -mation-developed, it is expected that contamination ' levels 'c'onsideFed ~ ~
j
. suitable for release for unrestricted use will not be changed'signifi-l cantly enough to affect cost estimates for decommissfo'ning, nor conclu-i sions of the generic environmental impact statement iconcerning overall
)
i.mpac_ts of decommissioning.
Whatever criteria are applicable, the" survey' I
which verifies that these criteria are met and serves' as the primary'-
basis.of termination of the license must be carefully' designed'to provide' j
- 'n-u a high degree of reliability.
1
~ ~ ~ ~ ~ " '
F.
Environmental Review Requirements
l M'
Jn the course of development of this proposed rule, it'became~ apparent
,r. that the requirements for environmental. reviews relat'ed to' decommissioning M '
I' i: -
could be reduced.
t Environmental Review Requirements at Licensing P
' ~ ~ ' '
" ~
~
Decommissioning is the inevitable result of having b'ufit and cperated
..a. nuclear facility.
The GEIS and its supporting technica1 ' data' base 1
1 i
Enclosure A 8/17/84 30
[7590-01]
i
. assessed all of the costs and environmental impacts occurring.at the time of decommissioning.
These overall impacts, although dependent.on'the specific decommissioning procedures, are essentially the result of opera-tion and accordingly should be addressed prior to licensing.
I As is the present licensing practice, environmental reports and environmental impact statements which are developed in connection with the licensing of major facilities will include the major environmental impacts expected at decommissioning.? The major impacts, of which the l
wastes needing controlled disposal are the most significant,-can be reasonably assessed.
At the time a facility is licensed, however, it is j
impractical to plan in detail what specific procedures will' be used at decommissioning since decommissioning will not be carried out until many l
years later.
Thus, at this time, it is also impractical to attempt to l
develop highly detailed analyses'of the environmental. impacts of specific decommissioning procedures.
Since the GEIS and its supporting data base
~
showed that the costs and environmental impacts at decommissioning are small compared to the total costs and impacts of building and operating
, a major facility.such at a reactor, the availability of more 4 tatiad l-information concerning impacts at decommissioning would not.a)te ' tt
~
NEPA cost-benefit balance.
Thus, no amendment to the regulation-it being proposed in regard to the considevation of decommissioning impacts in environmental reviews at licensing, r
Environmental Reviews at Decommissionina At the end of operation, when a facility must be decommissioned,
_ application for termination of license is made and, in the case of major facilities, a detailed decommissioning plan is submitted.
As stated I
above, the overall environmental impacts occurring at: decommissioning, of which the radioactive wastes resulting from operation and needing con-I trolled disposal are the most significant, have already been evaluated j
in environmental impact statements prepared in connection with the issu-ance of the construction permit and operating license-for the facility.
l In view of these circumstances and on the basis of information 'in the f
draft GEIS and its supporting technical data base indicating that the environmental impacts associated with decommissioning are unlikely to be i
significant, the Commission is of the opinion that there is no need, 8/17/84 31 Enclosure A
_ - - - ~
~
[7590- C
... absent special circumstances, to prepare an environmental iapact statemenE ';
~ ~
~
in connection with the issuance of a license amendment dr'or' der authoriz-I
_ing the decommissioning of a facility other than a waste disposal facility.
In most cases, preparation of an environmental assessment which supplements the previously prepared environmental impact statements should be suffi-cient.
The Commission notes, however, that there may be situations in which' the special nature of the deco,emissioning action necessitates the preparation of an environmental impa'et statement.
' '[
t This proposed rule has been developed to assure that decommissioning can and will be accomplished in a safe and efficient manner and that the impacts at decommissioning will be minimized to the extent practical.
The draft GEIS indicates that for any viable decommissioning a1ternative, ra-dioactivity released to the environment and associatef radiation doses are substantially less than those associated with operation and maintenance of a reactor during its lifetime and that public doses during decommissioning are negligible (calculated in the background documents as roughly a few-micro-rem to the maximally exposed individual).
Occupational doses during the decommissic'ing of a reactor are, for the short period cf active dis i
n mantlement',~ comparable to that occurring during operation an5 ' maintenance,
~~ ~
and over the longer period of a safe storage period ire much lower.
Since in most instances environmental impacts are unlikely to be significant'enough to warrant the development of an'invironme,tal impact statement, the rule proposes that the Commission no longer be required ~~
to prepara environmental impact statements in connection with the issu-ance of license amendments or orders authorizing thi' decommissioning of Instead,M he' Commission would facilities licensed under Parts 50 and 72.
t prepare environmental assessments which would supplimint'envirtnmental impact statements previously prepared in connection'Gith the:fa-ility.
..Although this environmental review procedure is expectid to iccommodate
most decommissioning actions, it should be noted that under the criteria '
in revised 10 CFR Part 51 an environmental assessment miy fesuit in a '
conclusion that an environmental impact ' statement is~fequirid in the' particular circumstances of the proposed Federal dec6mmissioning~nction.
The environmental assessment would be based on infoi1iiation provided by:
8/17/84 32 Enclosure A
[7590-01)
_i the licensee in a supplement to the environmental report submitted at 4
the decomissioning stage.
The information submitted by -the. Iicensee would take account of any changes to the estimated environmuntal impacts based on the information in the decommissioning plan. -
The information in the data base and the conclusions of the GEIS
'will also assist in evaluating decommissioning plans.
If unique methods I
are proposed by a licensee which are significantly different from those i
studied by the Commission, the Commisssion retains discretion.to require an environmental impact statement in special circumstances.
1 Categorical Exclusion from Environmental Reviews The Commission has identified a category of actions connected with J
the proposed requirements which appears to meet the criterion for cate-gorical exclusion set out in 10 CFR 51.22(a).
Presently there are eighteen categories of actions designated as such, thus the following category of actions is designated Category 19:
]
Category of Actions 19FApprovals ~of decommissToning funding ~ plans ~.-~ --~ ~ ~ ~~-' ~
Discussion and Finding Although decommissioning funding plans concern how licensees expect to carry out the activities required to decommission their facilities, t'he approval of these plans does not authorize a licenses to perform 1
these activities.
The principal purpose of considering decomissioning I
activities at this time is to provide information which'will enable the Commission to determine whether the licensee's plan for assuring funds
]
for decommissioning is adequate.
Approval of a decommissioning funding plan affects'the financial arrangements of the licensee but does not j
affect the scope and nature of the licensed activity.
These actions in and of themselves do not have an environmental impact.'
Accordingly, the Commission finds that approvals of decommissioning
~
funding plans (Category 19) comprisc a category of actions which do not J
individually or cumulatively have a significant effect on the human envi-ronment, designates Category 19 as a categorical exclusion, and directs that Category 19 be liste.d in 10 CFR 51.22(c) as a categorical exclusion.
8/17/84 33 Enclosure A
4
[7590-013 l
1 i
References 1.
Plan for Reevaluation of NRC Policy on Decommissionin6.of. Nuclear
.. Facilities, NUREG 30436, Revision 1. U.S. Nuclear Regulatory. Commis-
=..
J.:. sion, December 19 i, and Supplement 1. July 1980, and Supplement 2, j ~
~
~
March 1981.
\\
l i
2.
R.1. Smith, G. J. Konzek, and W. E. Kennedy, Jr., Technoloay, Safety,
- nd-Costs of Decommissionina a Reference Pressurized. Water Reactor Power Station, NUREG/CR-0130, Prepared by Pacific Natthwest. Laboratory i
i for the U.S. Nuclear Regulatory Commission, June 1978 Addendum 1,
~
August 1979, and Addendum 2, July 1983.
i j
3.
H. D. Oak, et al., Technology, Safety, and Costs of Decommissionina 3..
..._ ___.- r Reference Boilina Water Reactor Power Station, NUREG/CR-0672, Prepared by Pacific Northwest Laboratory for the U.S. Nuclear Regula-l tory Commission, June 1980, and Addendum, July 1983.
4..
G. J.. Konzek, Technology Safety, and Costs of-Decommissioning Refer-1
-- --- - ence Nuclear Research and Test Reactors, NUREG/CR-1756,.preparad..by._
Pacific Northwest Laboratory for the U.S. Nuclear Regulatory j
Commission, February 1982, and Addendum, July 1983.
"~
5.
Nors G. 'Wittenbrock, et al., Technology, Safety, and Costs of
~
4.._....._..'-. --. Decommissionino Licht Water Reactors at a Multiple Reactor Station,.
~
j
.- NUREG/CR-17E5, prepared by Pacific Northwest Laboratory for U.S.-
Nuclear Regulatory Commission, January 1982.
6.
Emmett B. Moore, Jr., Facilitation of Decommissionina of Licht Water
- - ~ -
"-' Reactors, NUREG/CR-0569, Pacific Northwest Laboratory..for.U.S. Nuclear Regulatory Commission, December 1979.
7.
E.* 5. Murphy, Technolony Safety, and costs of Decommissioning Refer.__.
~ ~ ~ ence Licht Water Reactors Followina Accidents, NUREG/CR-2601 frepared by Pacific Northwest Laboratory for U.S. Nuclear Regulatory Commission, November 1982.
i K. J. Schneider and C. E. Jenkins, Technology, Safety, and Costs of 4
8..
- Decommissionina a Reference Nuclear Fuel Reprocessina Plant. NUREG-0276.__
c, Prepared by Pacific Northwest Laboratory for U.S. Nuclear Regulatory
!"~
Commission, October 1977.
2
- 9.. H..R. Elder and D. E. Blahnik, Technology, Safety, and Costs of Decom- ^
missioning a Reference Uranium Fuel Fabrication Plant._NUREG/CR-1266.
Pacific Northwest Laboratory for U.S. Nuclear Regulatory Commission, 2.
l October 1980.
10.
H. R. Elder, Technolocy Safety, and Costs of Decommissioriina a Reference Uranium Hexafluoride Conversion Plant, NUREG/CR.1757........__
~ - " '
Prepared by Pacific Northwest Laboratory for U.S. Nuclear Regulatory Commission, October 1981.
I l
8/17/84 34 Enclosure A
[7590-01]
,C'. E. JenkIns, E. S. Murphy, and K. J. Schneider, Technolony, safety, s'
11.
end Costrof Decommissionino a Reference Small Mixed _0xios.JueL s
FaDrication Plant, NUREG/CR-0129, Prepared by Pacific Northwest._.
v--'-
Lacoratory for U.S. Nuclear Regulatory Commission, February 1979.
12..
E. S. Murphy, Technolony, Safety, and Costs of Decommissionino Refer __.. --.
-- ence Non-Fuel-Cycle Nuclear Facilities, NUREG/CR-1754,-. Prepared _by _ __ -... u Pacific horthwest Laboratory for U.S. Nuclear Regulatory Commission, February 1981'
'13.
J. D. Ludwick and E. 8. Moore, Technolony, Safety and Costs of Decom-missioning Reference Independent 1ipent Fuel Storace Installations,..
1 NUREG/CR-2210, Prepared by Pacific Northwest Laboratory for the 3
U.S. Nuclear Regulatory Commission, January 1984.
i --
14.
Robert 5. Wood, Assuring the Availability of Funds for Decommissionina...-
Nuclear Facilities Draft Re > ort, NUREG-0584, Revision 3,.U.S.. Nuclear Regulatory Commission, Marci 1983.
15.
Financing Stratectes For Nuclear Power Plant Decommissionina,- -
NUREG/CR-1481, Prepared by Temple, Barker, and Sloan, Inc., for the New England Conference of Public Utilities Commissioners;'Inc., for U.S. Nuclear Regulatory Commission, July 1980.
~
16.
P. L. Chernick, et al., Design, Costs and Acceptability of an Electric Utility Pool for Assuring the Adequacy of Funds for Nuclear Power Plant Decomissioning Ex >ense; NUREG/CR-2370, Prepared by Analysis... _.
-and -Inference,-Ine.7for U.S.-- tuclear Regulatory Commission, December 1981.
17.
C. F. Holoway ana J. Witherspoon, Monitorina for Com>11ance with DecooM ssioning 1'ermination Survey Criteria, NUREG/Ct-2082,.
Prepared by Oak Ridge National Laboratory for the U.S. Nuclear....
Aegulatory Commission, June 1981.
18.
J. P. Witherspoon, Technolony'and Cost of Termination Surveys A3sociated With Decommissioning of Nuclear Facilities, NUREG/CR-2241, Frepared by Oak Ridge National Laboratory for U.S. Nuclear Regulatory Commission, January 1982.
1 19.
Draft Generic Environmental Impact Statement on Decommissionina Nuclear Facilities, U.S. Nuclear Regulatory Commission, NUREG-0586,.
January 1981.
NOTE:
Free single copies of reference items 14 and 19','to the exte' t of n
supply, may be requested by writing to the Publication services Secti'on, Division of Technical Information and Document Control, U.S. Nuclear Regulatory Commission, Washington, DC 20555.
~
k 8/17/84 35 Enclosure A
_ _ ___ = __ _ - - _ - - - -
.._. ~ _-
i
[7590-01) i i
Copies of all other referenced documents sey be purch'ased by calling i
.(301) 492-9530 or by writing to the Publication Services Section, Division i
of Technical Information and Document Control, U.S. Nuclearilegulatory j
Commission, Washington, DC 20555, or purchased from the National Tech '
j l
nical Infomation Service, Department of Commerce, 5285 Port Royal Road, Springfield, VA 22161.
i i
w.
j Environmental Impact Statement:
Availability As required by the National Environmental Policy Act of 1969, as amended, and the Commission's regulations in 10 CFR Part 51, the NRC has
- L prepared a draft environmental impact statement on the decommissioning l
of nuclear facilities.
l This draft environmental impact statement is available for inspection l
7 and copying for a fee in the NRC Public Document Room, 1717 H Street NW.,
j_
Washington, DC.
Single copies of the draft environmental impact statement may be obtained from Carl Feldman, Office of Nuclear Regulatory Research, I
U.S. Nuclear Regulatory Commission, Washington, DC 20555; telephone
~
(301)443-7910.
[
Paperwork Reduction Act Statement
. l -._ _
l This proposed rule amends information collection requirements that l
are subject to the Paperwork Reduction Act of 1980 (44 U.S.C 3501 et seq.).
,This rule has been submitted to the Office of Management and Budget for-review and approval of the paperwork requirements.
a i
Reaulatory Analysis l
The commission has prepared'a draft regulatory analysis on this pro-
, posed regulation.
The analysis examines the costs ind benefits of the alternatives considered by the Commission.
The draft analysis is i
available for inspection and copying for a fee in the NRC Public Document-
).....
- h. Room,1717HStreetNW., Washington,DC.
Single copie's of h e analysis f.
- . may be obtained from C. R. Mattsen, Office of Nuclear Regulatory Research, U.S. Nuclear Regulatory Cormission, Washington, DC 20555, telephone j
(301)443-7910.
i i
36 Enclosure A
. 8/ 17/ 84
[7590-01]
The Commission requests public comments on the draft reguistory
. analysis.
Comments on the draf t analysis may be subailtted to the NRC as indicated under the ADDRESSES heading.
Reoulatory Rexibility Analysis As required by the Regulatory Flexibility Act of 1980, 5 0.5.'C.605(b),
the NRC has carefully considered the,.effect on sma11 ' entities in; developing the proposed rule and has attempted t'o tier the requ6e' men'ts'to reduce' the impact on small entities to the extent possible whiile adequately protecting health and safety.
M-#
~
Based on the information presently available, it is no't' expected that this proposed rule, if promulgated, will have a 'significani.' economic impact on a substantial number of small entities.
Aithough the impac't may be considered significant to some, for the large majority of small entities, it is expected to be minimal.
E The proposed rulemaking would broadly affect all Commission applicants and licensees and, because Agreement States will be required to maintain-compatibility with the proposed changes,*the proposed rule would also
-affact-Agreement-State applicants and licenseesrThere are approximatTly 9,000 Commission licenses, which include about 5200 byproduct material licenses under Parts 30 through 34, 2,500 medical licenses under Part 35, 400 source material licenses under Part 40, 200 production and utilization licenses (including approximately 50 applications in various stages of re' view) under Part 50, 700 special nuclear material licenses under Part 70, and 1 license and approximately 5 potential applicants under Part 72.
Between 11,000 and 12,000 Agreement States licensees would also be affected.
The Commission estimates that approximately 43 percent of~its licensees would be considered small entities under the criteria set out in the size standards by the Small Business Administration in 13 CFR Part 121 (e.g., for most licensees less than 500 employees, for hospitals ~
less than.150 beds, and for other medical licensees less than $1.5 million annual gross receipts).
Licensees under 10 CFR Parts 50 and 72 would not be considered small entities.
All licensees including small entities will be required to keep records important to decommissioning.
In general, for small licensees, 8/17/84 37 Enclosure A
!':90-013 such recordkeeping is " good practice" and should not' constitht'e a ~significaM
~
,. ; change in operation.
Generally,. keeping records important to becommissionitig ~
.. reduces both the costs and health end safety impacts of decoinmissioning
,......-.. and can, a,1so result in savings in coses or costs during operation'.
Costs F
~
of recordkeeping would tend to be recouped either in operation-or at
.n.,
~
i decommissioning.
The changes proposed in' this rule at the time of terminati~on of '
1icense will affect few small entities.
These changes consist prisiarily y
of specifying in more detail contents 'of decommissio~ning plans, presently called " decontamination plans."
Although more detailed plans may be required than have been considered acceptable in the past, there will also be a reduction in administrative effort because there will be'less uncertainty as to what is expected.
Overall, these changes are not expected to have a significant impact.
The most significant impact of this rule on licensees is likely to result from the financial assurance requirements.
A cost estimate for decommissioning and a method of providing assurance of funds for decommis-l sioning will be required of roughly 830 Commission licensees of which few~rif~any will be small entities.
Roughly another 660 Commission licensen including about 280 small entities will have the option of providing financial assurance in a prescribed amount and submitting a certification to that effect or submitting a funding plan to support a lower amount.
A similar number of Agreement State licensees would also be affected.
Those small entities affected would be almost exclusively industrial licensees. Because the historical information indicates that such small
. industrial licensees are the most likely to default, it is particularly The
.important that financial assurance be provided by these licensees.
- rule-allows as much flexibility as possible to licensees for providing financial assurance, in order to reduce the impact. ~~Also, the economic
~
impact of making cost estimates can be reduced by using the data base which has been developed.
- .The cost of this requirement depen'ds on the method used.. A surety or insurance method is likely to be used by small entities; it is esti-mated to cost approximately 1 to 2% of the face value, or 1 to 2%'of decommissioning costs annually, plus the administrative cost of either rvasuno m
Enclosure A
[7590-01) developing a cost estimate and reporting on the funding methods to NRC The c'st of a surety using the prescribed or of making a certification.
o amounts proposed in the rule would thus be in the range of-5500 - $10,000 per year.
For a few small entities affected this woisld be a significant economic impact, however, these cases would present the highest risk of default.
A more detailed ~ analysis of impacts to small entities is included in the Regulatory Analysis.
Because of the widely differing conditions under which the licensees covered by this proposed regulation operate, the Comission is particularly seeking comment from small entities as to how the regulations will affect them and how the regulations may be tiered or~otherwise modified to impose less stringent requirements on small entities while still ade-quately protecting the public health and safety.
Those small entities which offer comments on how the regulations could be modified to take into account the differing needs of small entities shou 1d specifically
~
discuss the following items:
~
t (a) The size of their business and how the proposed regulations would
" - " ~ - - ~ ~ ~ ~ ~ ~ -
resultln~a s~ignificint economiEbuiden upolihem as compared to.
~
~
~
larger organizations in the same' business community.
(b) How the proposed regulations could be modifie.d to take into account their differing needs or capabilities.
(c) The benefits that.would accrue, or the detriments that would be avoided, if the proposed regulations were modified as suggested by the commenter.
(d) How the proposed regulations,. as modified, would~ more closely equalize the impact of NRC regulations or create more equal ~ access' to the benefits of Federal programs as opposed to providing'special advantages to any individuals or groups.
..(e)- How the proposed regulations, as modified, would still adequately protect the public health and safety.
~
The comments should be sent to the Secretary of the Commission, U.S.
Nuclear Regulatory Commission, Washington, DC 20555, Attention:
Docketing and Service Branch.
8/17/84 39 Enclosure A
[759C-01)
LIST OF SUBJECTS B
- Part 30 - Byproduct material, Government contracts, Intergovern-mental relations, Isotopes", Nuclear materials, Penalty, Radiation pro-tection, Reporting and recordkeeping requirements.
. - Part 40 - Government contracts, Hazardous materials - transportation,
-. Nuclear materials, Penalty, Reportinq and recordkeeping requirements, q
r-g Source material, Uranium.
Part 50 - Antitrust, Classified information, Fire prevention, 3.
. -Incorporation by reference, Intergovernmental relations,' Nuclear power r plants and reactors, Penalty,, Radiation protection, Reactor sitin~g crite-i-
ria, Reporting and recordkeeping requirements.
Part 51 - Administrative practice and procedure, Environmen'tal-
-impact statement, Nuclear materials, Nuclear power plants and: reactors, Reporting and recordkeeping requirements.
- ~
Part 70 - Hazardous materials - transportation, Nuclear m'aterials',
- Packaging and containers, Penal.ty, Radiation protection,? Reporting and recordkeeping requirements, Scientific equipment', Security measures, Special nuclear materiaf.
~~ ' ~ -
-Part 72 - Manpower training programs, Nuclear materials, Occupat'ional
. safety and health, Reporting and recordkeeping requirements, Security measures, Spent fuel.
For the reasons set out in the preamble and under the authority of
- the. Atomic Energy Act of 1954, as amended, the Energy-Reorganization Act
. of-1974, as amended, and 5 U.S.C. 553, the NRC is proposing to adopt the
~
following amendments to 10 CFR Parts 30, 40, 50, 51,- 70, and 72.
Enclosure A
. rv3L52K 0 40
[7590-01) 8 PART 30 - RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF BYPRODUCT MATERIAL 1.
The authority citation for Part 30 is revised to read as follows:
AUTHORITY:
Secs. 81, 82, 161, 182, 183, 186, 68 Stat. 935, 948, 953, 954, 955, as amended, sec.'234, 83 Stat. 444, as amended (42 U.S.C. 2111, 2112, 2201, 2232, 2233, 2236, 2282);fsecs. 201, as amended,' 202,-206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846).
Section 30.7 also issued under Pub. L.95-601, sec. 10, 92 Stat.
~
2951 (42.U.S.C. 5851).
Section 30.34(b) also issued under sec.' 184, 68 Stat. 954, as amended (42 U.S.C. 2234).
Section 30.61 also issued under sec. 187, 68 Stat. 955 (42 U.S.C. 2237).
For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C.
2273), g6 30.3, 30.34(b) and (c), 30.41(a) and (c), and 30.53 are issued under sec.' 161b, 68 Stat. 948 as amended (42 U.S.C. 2iO1(b)); and $$ 30.36, 30.51, 30.52, and 30.55 issued under sec. 161o, 68 State 950, as amended (42 U.S.C. 2201(oy).
~
i 2.
Section 30.4 is amended by adding a new paragraph (y)'to read ~
as follows:*
S 30.4 Definitions.
n a
.n n
n (y) " Decommission" means to remove (as a facility) safely from -------- -
~ ~ ~~ ~
service and reduce residual radioactivity to a level-that-permits-release -- --
of the property for unrestricted use and termination-of-1-icenser-
~
3.
Section 30.32 is amended by adding a new paragraph (g) to read "
as follows:
" Proposed rule changes are shown in comparative text;, deletions.are
~
~. _..
bracketed and lined through and additions are underli.ned; where exten-sive revision has been made to existing paragraphs, only the revised
. version is shown.
Comparative text will be removed before submittal to the Office of the Federal Register.
8/17/84 41 Enclosure A
[7590-01) 6 30.32 Application for specific licenses.
n n
n n
n (g) As provided by 9 30.35. certain aoolications for. specific. licenses _.
'~
' filed und$E"this part and Parts 32 through 35 of thiS_ chapter must_ con-
~
~ ~ ~
tain a orocosed decommissioning fundino plan or a ce:rtification of finan ______
~ ~~
~
cial assurance for decommissioning. In the case of renewal appl.ications'... _.. _ _ _ _
submitted before [ insert a date one year af ter the ef fective date'.of the_.______
final rule] this submittal may foll6w. the renewal apD11 Cation but must be ___.._.
submitted on or before [ insert a date'one year after!_th'el effective date___
'~
~
'~~
of the final rule).
4.
Section 30.33 is amended by deleting the word "and" following paragraph (a)(4), replacing.the period following para ~ graph (a)(5) with a semi-colon, adding the word "and" following paragraph (a)(5), and adding a new paragraph (a)(6) to read as follows:
5 30.33 General requirements for issuance of specific licenses.
(a) An application for a specific license will be approved if:
A
=A (6) -The applicant's proposed' decommissioning funding plan or. _..
_ certification of financial assurance for decommissioning, if required _.
by 6 30.35(a) or (b'), includes sufficient information to demonstrate _
that the proposed funding method will provide reasonable assurance._
.- that funds will be available to decommission the facility in a safe and timely manner.
n n
n n
s 5.
Section 30.34 is amended by adding new paragraphs (h) and (i) to read as follows:
s 30.34 Terms and conditions of licenses.
(h)(1)
Each holder of a specific license issued on or after [ insert._ __.
a date 1 year after the effective date of the final rule] which is of a____
type described in S30.35(a) or (b), shall provide financial assurance for
_ _ _... decommissioning in accordance with the criteria set forth in 630.35.
(2) On or before [ insert a date one year after the effective date of the final rule), each holder of a specific license of a type described, _ _ _
in 6 30.35(a) shall submit a decommissioning funding plan or a certification _
_ 1 8/17/84 42 Enclosure A
[7590-01) of financial assurance for decommissioning in an amount at least equal
__ to $500,000 in accordan'ce with the criteria set forth in 6 30.35.
If the_ _,._
licensee submits the certification of financial assurance rather than a _,
,,_ decommissioning funding plan at this time, the licensee shall include
- a__,
decommissioning funding plan in any application for license renewal.
(3) On or before [ insert a date 1 year after the effective date of,, _
the final rule), each holder of a specific license of a type described in 530.35(b) shall submit a certificition of financial assurance for decommissioning or a decommissioning funding plan in accordance with the criteria set forth in 6 30.35.
_ (4) As of [ insert a date 1 year after the effective date of the final rule], each licensee covered by $30.35(a) or (b) shall provide financial assurance for decommissioning as a condition of license.
If a decommissioning funding plan has been submitted to the Commission, implementing the plan becomes a condition of the license upon approval of the plan.
(i)
Each person licensed under this part or Parts 32 through 35 of. this chapter shall keep records of information important to the safe and effective decommissioning of the facility in a file explicitly for.
. this purpose until the license is terminated by the Commission.
If records of relevant information are kept for other purposes, refer-ence to such records and their locations may be substituted.
Informa tion the Commission considers important to decommissioning consists of--
(1)
Records of spills or other unusual occurrences involving the _
_ spread of contamination in and around the facility, equipment, or site.
._These records may be limited to instances when significant contamination l.._.._.._
__. remains after any cleanup procedures or when there is reasonable likeli-hood that contaminants may have spread to inaccessible areas as in the __
l _
~
case of possible seepage into porous materials such as concrete.
These f _ _.. _.
.. ____ records must include any known information on identification of involved nuclides, quantities, forms, and concentrations.
.. _. _ _. (2) As-built drawings and modifications of structures and equipment
_ _..._. _ in high radiation areas and of locations of possible inaccessible contam- _
i _ _... _
.__._.ination such as buried pipes which may be subject to contamination.
If
' referencing such drawings, it is not necessary to index each individual _
. _ _ _ _ _. __ relevant document.
If drawings are not available, the licensee shall-.
l 8/17/84 43 Enclosure A t
[::42-i. ]
I l
. substitute aooropriate records of available information concerning these___
~
'~ '
~
areas and locations.
1
\\
l 6.
A new 5 30.35 is added to read as follows:
S 30.35 Financial assurance for decommissioning.
(a) Each acolicant for a specific license authorizing.the_pos's'e~ssion.____
aAd use of unsealed byproduct material of half-life. greater..than _120_ days..
' ' ~
and in quantities exceeding 105 timet.the applicableEcuantities set forth__ _a__
"~
in Appendix C of Part 20 shall submit a decommissioning funding plan as__.____l_
described in paragraph (d) of this section.
Each holder..of_ such a' li~ cense.
shall provide financial assurance for decommissioningt required subm'ittals..__
for providing financial assurance are set out in 6 30.34(h)(2)...
(b)
Each applicant for or holder of a specific license authorizing..____
possession and use of byproduct material of half-life _ greater than.120. days...
and in. quantities specified in paragraph (c) of this~ section shall either- _.
(1) Submit a decommissioning funding plan as described.in paragraph (()___
of this section; or (2) Submit a certification that financial assurance.for._
decommissioning has been provided in the amount presEr.~ibe~d.by.~ paragraph :(c)__ _~_.
of this section usina one of the methods described in paragraph _(e) of._. _..___ _
this section.
For an applicant, this certification may state.that the'
. _ _ _i appropriate assurance will be obtained after the appl-ication has been _:
approved and the license issued but prior to the receipt _of _ licensed material.
(c) Table of required amounts of financial assurance for. decommis-.___
sioning by quantity of material.
greater than 104 but less than or
- _$500,000____.
equal to 105 times the applicable
~~-
quantities of Appendix C of Part 20 in ' unsealed form i
3 but less than or
$100,000 greater than 10 equal to 104 times the applicable l
i quantities of Appendix C of Part 20
~ - {
in unsealed form
)
)
8/17/84 44 Enclosure A
l
[7590-01) i l
greater than 1010 times the applicable 1350,000_
ouantitiet of Aooendix C of Part 20 in sealed sources (d) Each decommissioning funding plan must contain A_ cost estimate.
for decommissioning and a description of the method of.. ass' ring funds for.._ _-_
u decommissioning including means of adjusting cost es_timates..and associated.__.._
fundinglevelscverthelifeofthehacility.
Financial assurance for decoinmissioning must bear _ovided by.._..._.
(e) one or more of the following methods:
~~
(1) Prepayment.
Prepayment is the deposit prior to.lthe start of operation into an account segregated from licensee as' sets and outside.__. _ _ _.
I the licensee's administrative control of cash or liquid. assets that will retain their value over the projected operating life _of.the facility and that are in amount such that the principal plus accumulated earnings would
.._l be sufficient to pay decommissioning costs.
Prepayment may be in_the form. __
of a trust, escrow account, government fund, certificate of deposit, or deposit of government securities.
(2) - A surety-method-or-insurance.-A-surety method or-insurance is a guarantee that decommissioning costs will be paid should the licensee _ _...
default.
A surety method may be in the form of a surety bond, letter of. _ __.
credit, line of credit, secured interest, or other quarantee method.
Any surety method or insurance used to provide financial assurance for decommissioning must contain the following conditions:
The surety or insurance must be open-ended or, if written for (i) a specified term, such as five years, must be renewed automatically....__ _
_ unless 90 days or more prior to the renewal date, the iss_uer notifies the_
Commission, the beneficiary, and the li~censee of itsl intention not to ___..___ i The surety or insurance must also provide that the beneficiary renew.
may automatically collect prior to the expiration without proof of for-
_ _ _feiture if the licensee fails to provide a replacement acceptable to the Commission within 30 days after receipt'of notification of cancellation. __.
(ii) The beneficiary of the surety or insurance must be a trustee acceptable to the Comniission such as an appropriate state or Federal _._ -~
Hovernment agency or a major financial organization. ___.. _ _ _ _ _ _.
1 8/17/84 45 Enclosure A i
[7590-01]
(iii) The surety or insurance must remain in effect_until-.the Commission has terminated the license.
(3) An external sinking fund in which deoosits are ma<ie. at..least_._.
annually. couoled with a surety method or insurance,._the_value of which may decrease by the amount being accumulated in the sinkino fund..._.
~ " ~
n external sinking fund is a fund established and maintained.by.the..
. periodic deposit of a prescribed amount into an account segregated from__......._.
licensee assets and outside the licensee's administrative control in___.._..
which the total amount of the periodic deposits plus..atcumulated earnings _
~ ~I wA'uId be sufficient to pay decommissioning costs at the time termination _
-of operation is expected.
An external sinking fund may be in the form of.._
a trust, escrow account, government fund, certificate of deposit, or.. _ _.. _
deposit of government securities.
(4)
In the case of Federal, State, or local government licensees, a __._.
certification that the appropriate government entity will be guarantor _..._
~
of decommissioning funds.
(5) Other funding methods which are demonstrated by the _... _ _ _ _ _ _ _..
applicant or licensee to provide comparable assurance..to methods. listed._'_ _.__
- in~ paragraphs-(c)(1) through (3)~of this section.'
- ~
'.1_
_____...____~1____
7.
Section 30.36 is revised to read as follows:
5 30.36 Expiration and termination of licenses.
(a)
Except as provided in S 30.37(b) and paragraph [(d3(33] (e) of this section, each specific license expires at the end of the day, in the month and year stated in the license.
~
(b) Each licensee shall notify the Commission [immediately] promptly, in writing under 5 30.6, and request termination of the license when the
~
licensee decides to. terminate all activities involving materials autho-rized under the license.
This notification and request for termination of the license must include the reports and information specified in paragraphs [(d)](c)(1)(iv) and (v) of this section [-]'and a plan for compTetion of decommissioning if required by paragraph.(c)(2) of this __._.___,
section or by license condition.
[The-licensee-is-subje_ct.-to _the provisions-of paragraphs-(d3-and-f e)-ef-this-section--as-applicable-]
8/17/84 46 Enclosure A
i
[7590-01]
[f c3--No-iess-then-30-days-before-the expiration-date-specified-in ' ~ "- '
a-specific-iicense;-the-iicensee sNn either -
' - - " ~
'-" -'~- -- - ~~
(13--Submit-en application-(er-license-renewai ender-SBB-397 er '
(23--Notify-the-Eemmissier.--in.-writing ander-S30-6--if-the-licensee ~: -
decides not-to-renew-the-license-]
[(d3] (c)(1)
If a licensee does not submit an applicatiortfor license renewal under 5 30.37, the 1;icensee shall on or before the expiration date specified in the license -
i-(i) Terminate use of byproduct m'aterial; (ii) Remove radioactive contamination to the extent practicable except for those procedures covered by paragraph (t)(2)(i) of this section;_ _
(iii)
Properly dispose of byproduct material; (iv) Submit a completed form NRC-314, which certifies information -
o concerning the disposition of materials; and (v)
[ Submit-a-radiation-survey report-to-confirm-the absence-of radioactive-materiais-er-to estabiish-the-leveis of-residuai ridioactive contamination] Conduct a radiation survey of the premises where the.
licensed activities were carriid out and submit *a report of the results _
of this-survey--unless-theiicensee-demonstrates [the-absence-of-residual radioactive-contamination] that the premises are suitable for release for unrestricted use in some other manner.
The licensee shall.,_as _
appropriate -
(A) Report levels of radiation in units of microrads per hour of beta and gamma radiation at one centimeter and gamma radiation at one meter from surfaces, and report levels of radioactivity in units of disintegrations per minute (or microcuries) per 100 square centimeters removable and fixed [en] for surfaces, microcuries per milliliter [in]
for water, and picocuries per gram for [in-centaminated] solids such as soils or concrete; and (B) Specify the survey instrument (s) used and certify that each instrument is properly calibrated and tested.
[(23--If no residuai radioactive-contamination attributable-te- -
s
- - - acti vi ti e s - co ndcete d-unde r-the-i i c e ns e-i s - de te c te d-- the-ii e e ns e e-s hal l submit a-certification-that-no-detectable-radioactive-contaminatien-was
~
8/17/84 47 Enclosure A
[7590-01]
1 feendr--if-the-information-submitted encer-this paragraph-and' para -' ' " ~~ ~
graphs-(d3(13(iv3-and-(v3-of-this section-is-adequatt;-the-Eemmission wiii-notify-the-licensee-in writing-that-the-license-is"terminatedr' (3)(43--if-detectabie-ieveis-of resideaf radienctive-contamination attributable-te-activities-conducted-ander-the-license are-feend;-the iieense centinues-in effect-beyond-the-expiration-date;-if-necessary;
.with-respect-to possession-of resideni-byproduct-materiai present-as contamination-entil-the-Eemmission-notifies-the-licensee-in-writing-that
- the-license-is-terminatedr--Bering-this-time;-the-licensee-is sebject-to the pro' visions-of paragraph-(e3-of-this sectient
(-ii3--in addition-to-the-information-sebmitted-ender paragraphs-(d3 (13(iv3-and-(v3-of-this section-the-iicensee shaii-submit-a pian-for
. decontamination;-if-required;-as regards residuai-radioactive-contamina-tion remaining-at-the-time-the-license expiresr]
~
(2)(i)
In addition to the information required under para-graphs (c)(1)(iv) and (v) of this section, the licen'see shall submit.. _. _ _ _ _
a plan for completion of decommissioning if the procedures necessary_. __.
to carry out decommitsioning have not been previousl_y approved by the NRC;'are ' extensive, and could significantly increase __' potential health -
=~~r--~~
and safety impacts to workers or to the public such~as in cases ~where - _. ___ _
(A) workers would be entering areas n6t normally occupied where surface contamination and radiation levels are significantly higher than routinely encountered during operation; or (B) procedures could result in significantly greater airborne _
concentrations of radioactive materials than are present during opera '.
tion; or 1
(C) procedures could result in significantly greater releases of radioactive material to the environment than those associated with operation; or t:
(D) procedures would involve technicues not applied routinely during maintenance operations.
r 7_
(ii)
Procedures with potential health and safety impacts may not be carried out prior to approval of the decommissioning plan.
(iii) The proposed decommissioning plan, if required by paragraph (c) __..__
(2)(i) of this section or by license condition, must include--
8/17/84 48 Enclosure A
[7590-01]
(A) Discussion of planned decommissioning activitiest___. _.... _.... _
(B).
.. Descriotion of methods used to assure protection of. workers.and _ _
. _.the environment against radiation hazards during decommiss_ioning;. _.
(C)
A descriotion of the planned final radiation survey; and (D) An updated detailed cost estimate for decommissioning, comparison of that estimate with oresent funds set aside for decommis-
~
~
'~sioning, and plan for assuring the availability of adequate funds for completion of decommissioning.
I.
The proposed decommissionin' plan will be approved by the (iv) a Commission if the information therein demonstrates that the decommis-sioning will be completed as soon as is reasonable and that the health and safety of workers and the public will be adequately protected.
(3)
Upon approval of the decommissioning plan by the Commission, the licensee shall complete decommissioning in accordance with the approved plan.
As a final step in decommissioning, the licensee shall again submit the information required in paragraph (c)(1)(v) of this.section and shall certify the disposition of accumulated wastes from decommissioning.
~
(d)
If the information submitted under paragraphs (c)(1)(v) or_..
. 1.
(c)(3) of this section does not adequately demonstrate that-the premises---
are suitable for release for unrestricted use, the Commission will inform the licensee of the appropriate further actions required for termination j
of license.
'~
(e)
[Each-licensee-who possesses residual-byproduct-material under paragraph-(d)(33 of-this section--following-the expiration-date-specified in-the-ficense-shaii---] Each specific license continues in effect
.. beyond the expiration date if necessary with respect _to possession of__...._.. __.
residual byproduct material present as contamination 'until the Commission. _. _.
notifies the licensee in writing that the license is terminated. ___f During this time, the licensee shall--
(1)
Limit actions involving byproduct material to those related
--- to [ decontamination and-other activities reinted-to preparation-for reiease-for-enrestricted-use] decommissioning; and - ~ ~
(2) Continue to control entry to restricted areas until they are suitable for release for unrestricted use and the Commission notifies the licensee in writing that the license is terminated.
~
-8/17/84
-~
49 Enclosure A
^
'~
' ~ '
[7590-01)
(f) Specific licenses will-be terminated by written _ notice _to the__ __. __.
licensee when the Commission determines that--
(1) Byeroduct material has been orocerly disposed; (2)
Reasonable effort has been made to eliminate residual. radio _ ____..___
active contamination, if present: and (3)(i) A radiation survey has been performed which demonstrates _
that the premises are suitable for release for unrestricted use; or (ii) Other information submitt'ed by the licensee is sufficient to _.
~~'
' ~ ~
demonstrate that the premises are suit'ble for release.for unrestricted -
a use.
PART 40 - DOMESTIC LICENSING OF SOURCE MATERIAL 8.
The authority citation for Part 40 continues to read as follows:
AUTHORITY:
Secs. 62, 63, 64, 65, 81, 161, 182, 183, 186, 68 Stat.
932, 933, 935, 948, 953, 954, 955, as amended, secs. 11e(2), 83, 84, Pub. L.95-604, 92 Stat. 3033, as amended, 3039, sec.- 234, 83 Stat. 444, as amended (42 U.S.C. 2014(e)(2), 2092, 2093, 2094, 2095, 2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282); secs. 274, Pub.-L.86-373, 73 Stat.
688 (42 U.S.C. ~2021)~;-' secs.~ 201 as~ameinde~d-2027206,~ 88 Stat.' 1242,~ ~ ~ ~
~~~
~
as amended, 1244,1246 (42 U.S.C. 5841, 5842, 5846).:
~
Section 40.7 also issued under Pub. L.95-601, sec. 10, 92 Stat.
2951.(42 U.S.C. 5851).
Section 40.31 (g) also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152).
Section 40.46 also issued.under sec. 184,.
- 68. Stat. 954, as amended (42 U.S.C. 2234).
Section 40.71'also issued
~
under sec. 187, 68 Stat. 955 (42 U.S.C. 2237).
For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C.
2273); SS an.3, 40.25(d)(1)-(3), 40.35(a)-(d), 40.41(b) and (c), 40.46,.
40.51(a) and (c), and 40.63 are issued under sec. 161b,.68 Stat. 948, as amended, (42 U.S.C. 2201(b)); and SS 40.25(c) and (d)(3)~and (4),
40.26(c)(2), 40.35(e), 40.42, 40.61, 40.62, 40.64 and 40.65 are issued under sec. 161o, 68 Stat. 950, as amended (42 U.S.C. 2201(o-)). '_:.
9.
Section 40.4 is amended by adding a new paragraph (r)- to read as follows:
S 40.4 Definitions.
50 Enclosure A
---8/17/84
[7590-01)
" Decommission"~means to remove (as a facility) safely from
.. (r) service and reduce residual radioactivity to a leveli.tbat_pormits.._ ___ __._
release of the property for unrestricted use and terniination.of license.____. _
10.
Section 40.31 is amended by adding a new paragraph (i) to read as follows:
i 5 40.31 Applications for specific 1.icenses.
~
~~
m a
I-m n
(i)
~
As provided by 6 40.36, cert'ain applications for_ specific _
1[censesfiledunderthispartmustcontainaproposed~ decommissioning __
funding plan or a certification of financial assurance:for decommissioning..
In the case of renewal applic'ations submitted beforel[irisert a date one ___... _
~
year after the effective date of the final rule] this submittal may fol. low _.
the renewal application but must be submitted on or before [ insert a date___'..
one year after the effective date of the final rule]i_ _
11.
Section 40.32 is amended by adding a new paragraph (g)-to read -
as follows:
1: '
S 40.32 General requirements for issuance of specific-licenses.
_ _ _...___... An application for-a-specific-1icense will-be-approved if:-C- ---
a a
a n
(g) The applicant's proposed decommissioning funding plan or certi-fication of financial assurance for decommissioning,11f_ required by_
6 40.36(a) or (b), includes sufficient information to_. demonstrate that the proposed funding method will provide reasonable assurance that. funds will be available to decommission the facility in a saf.e.and;. timely _ manner. -
12.
A new $ 40.36 is added to read as follows:
M 6 40.36 Financial assurance for decommissioning.
Except for licenses authorizing the receipt, possession,: and use of 1
- source material for uranium or thorium milling, or byproduct material. at
. sites formerly associated with such milling, for whic_h fin _ancial assurance requirements are set forth in Appendix A of this part Ucriteria for pro-viding financial assurance for decommissioning are as_follows:_ _ _.
8/17/84 51 Enclosure A
~
~_
t s
[7590-01) v (a) Each applicant for a specific license authorizing the. posses.
sion and use of more than 100 mci of source material in a readily disoe_rf-Each holoer of such
__ _ _ ible form shall submit a decommissioning funaing plan.
a license shall provide financial assurance for decommissioning; required submittals for providing financial assurance are set out in 6 40.41(f)(2).
(b) Each applicant for or holder of a specific license authorizing
_,...... _.. _. _...possession and use of quantities of source material greater than 10 mci ______._.
but less than or equal to 100 mci is'a readily dispersible form shall __.
either--
(1) Submit a decommissioning funding plan as described in paragraph (cl__
of this section; or (2) Submit a certificat' ion that financial assurance for decommission;__.
irIg has been provided in the amount of $100,000 using one of the methods _
described in paragraph (d) of this section.
For an applicant, this certifi._.
cation may state that the appropriate assurance will.be obtained after the application has been approved and the license issued but prior to the -
receipt of licensed material.
, (c) Tach decommissioning funding plan must contain a cost estimate _ ____
I a - ~.- -_; _ -. _
_ for decommissioning and-a description of-the method of assuring funds for decommissioning including means of adjusting cost estimates and associated
~~~
f funding levels over the life of the facility.
(d)
Financial assurance for decommissioning must be provided by one i
or more of the following methods:
I (1) Prepayment.
Prepayment is the deposit prior to the start of _
operation into an account segregated from licensee assets and outside the licensee's administrative control of cash or liquid assets that wil-1
. retain their value over the projected operating life of the facility and, ____
that are in amount such that the principal plus accumulated earnings would.__
be sufficient to pay decommissioning costs.
Prepayment may be in the form __.
of. a trust, escrow account, government fund, certificate of deposit, or j_ _
deposit of government securities.
- (2) A surety method or insurance.
A surety method or insurance Jis a guarantee that decommissioning costs will be paid should the licensee __
default.
A surety method may be in the form of a surety bond, letter of l
credit, line of credit, secured interest, or other guarantee method. _
i Enclosure A 52 8/ 17/84 4
I
[7590-01) l
/ ny surety method or insurance used to provide financiaLa'ssurance._
3 3;
for decommissioning must contain the following condttions t..
(i) The surety or insurance must be oDen-ended or, if wr.itten.for._...___
a specified term, such as five years, must be renewed automatically.
~
~~
.$[nless90daysormorepriortotherenewaldate,the.issuernotifiesthe_....._
.._ Commission, the beneficiary, and the licensee of its intention not to renew.
The surety or insurance must also provide that the beneficiary may automatically collect prior to the ex'piration without proof of forfeiture.____ _ _
~~
_g; if the licensee fails to provide a replacement acceptable to.the Commis-
._.. sion within 30 days after receipt of notification of_ cancellation.
(ii) The beneficiary of the surety or insurance must be a trustee ac$eptabletotheCommissionsuchasanappropriatestateorfed'eral government agency or a ma.for financial organization. _._._...._.
(iii)
The surety or insurance must remain in effect until the Commission has terminated the license.
(3) An external sinking fund in which deposits are made at least
_anNally, coupled with a surety method or insurance,' the value of which _._._..
may decrease by the amount being accumulated in the. sinking fund.
An
.__I.'-external sinking fund is -a-fund established and maintained by the periodic.. ~ ~-
. deposit of a prescribed amount into an account segregated from licens'ee assets and outside the licensee's administrative control in which the total amount of the periodic deposits plus accumulated earnings would be suffi _. _ _ _.
cient to pay decommissioning costs at the time termination of operation is expected.
An external sinking fund may be in the form of a trust,_.
_. escrow ac:ount, government fund, certificate of deposit, or deposit of_ [_ _
government securities.
.(4)
In the case of Federal, State, or local government licensees, a _____
. certification that the appropriate government entitytwill be guarantor _
of decommissioning funds.
~
(5) Other funding methods which are demonstrated by the. applicant.
_ e.
or licensee to provide comparable assurance to methods. listed in para-
~
graphs (c)(1) through (3) of this section.
~~
- 8/17/84 53 Enclosure A
[7590-01) 13.
Section 40.41 is amended by adding new paragraphs (f) ~and (g) to read as follows:
~
5 40.41 Terms and conditions of licenses.
a
=
a
=
x
.(f)(1)
Each holder of a specific license issued on.or_af.tet_[Inserti...
a date 1 year after the effective date of the final _r_dl'e].which__is. covered
,by 6 40.36(e) or (b), shall provide financial assurance _f.or decommission-ing in accordance with the criteria ' set forth in 6 4L36 -:
______.....i (2) On or before [ insert a date one year after the. effective _date..___. _._.
.. _. _.. _ _ _ _. _ _..of the final rule], each holder of a specific licenia_ covered _by. f 40.36(a) ____
shall submit a decommissioning funding plan or certi11 cation af.. financial.
assurance for decommissioning in an amount at least :aqual._to $500,000.'. __.. _ _ _
in accordance with the criteria set forth in 6 40.36.__TLthe_Ticensee__.
submits the certification of financial assurance ratheV_than 'a..dec~ommis.___. _ _ _.
sioning funding plan at this time, the licensee sha1]_3ncludela~ decommis _..
j sioning funding plan in any application for license _ren~ewal. ~~
(3) On or before [ insert'a date 1 year after the effective _date.of.
~
the final rule], each holder of a specific license cavered by.6.30m26(b)
- ~shall~ submit' a certification of financial assurance Yor_ decommi.ss_ionina_i_.____
or a decommissioning funding plan in accordance with_the. criteria set ___.._
forth in 6 40.36.
i (4) As of [ insert date 1 year after the effective date _of. the_f.inal.__
rule], each licensee covered by 6 40.36(a) or (b) shallprovide_ financial ______
assurance for decommissioning as a condition of liceLnse.
If a decommis _
__ 1
_~_
sioning funding plan has been submitted to the Commission, implementing __
_ _, _ _,, _ _ _ _.the plan becomes a condition of the license upon approval of the.~ plan _, ~ ~
Each person licensed under this part shall keep _ records.of ' -
(c)
-:-~-
information important to the safe and effective decommissionina of;the-l facility in a file explicitly for this purpose untiT.the_ license is terminated by the Commission.
If records of relevant information are -
kept for other purposes, reference to such records anditheirf_ locations ~
may be substituted.
Information the Commission consider _s important-
- - ~ ~
to decommissioning consists of--
~
(1)
Records of spills or other unusual occurrences _ involving thef, spread of contamination in and around the facility, equipment, or site.
J_
... These records may be limited to instances when significant contamination ___.
[7590 __'.
remains after any cleanuo orocedures or when there is reasonable _likeli -
~
hood that contaminants may have scread to inaccessible. areas.as.in the.
case of oossible seeoaoe into corous materials such a.s. concrete.
These__._
records must include any known information on identification of involved ___
nuclides, quantities, forms, and concentrations.
(2) As-built drawings and modifications of structures and equip _.
ment in high radiation areas and of locations of possible inaccessible contamin'ation such as buried pipes which may be subject _ to contamina-If ref,erencing such drawings, it is not necessary to index each.
tion.
individual relevant document.
If drawings are not available, the___.__.
licensee shall substitute appropriate records of available information concerning these areas and locations.
14.
Section 40.42 is revised to read as follows:
5 40.42 Expiration and termination of licenses.
(a)
Exceptasprovidedin540.43(b)andparagraph[(d)(33]lel of this section, each specific license expires at the end of the day, in the month and year stated in the license.
~-
(b) Each licensee shall notify the Commissior [immediately]
promptly, in writing under S 40.5, and request termination-of the license when the licensee decides to terminate all activities involving materials authorized under the license.
This notification and-request for termina-tion of the license must include the reports and information specified in
,_ paragraphs [(d3]icl(1)(iv)and(v)ofthissection[-]'andaplanfor
_ _.. _ completion of decommissioning, if required by paragraph (c)(2) of this section or by license condition.
[The-ficensee-is-subiect-to.the__.
-provisions-of paragraphs-(d)-and-fe)-of-this-section;-as-appiicable.]
l
[fc3] No-iess-than-30-days-before-the-expiration-date-specified-in l
a-specific-license;-the-iicensee-shali-either --
- ::r t
t
- (13 --S abmi t-an-ap pli c ati o n-f o r-ii ce ns e-re n ewai-under 38:SY;-or
- :(23--Notify-the-Eemmission;-in writing-under-5-SS-6;-if-the-iicensee decides not-to-renew-the-ficenser) l
[(d3]-(c)(1) If a licensee does not submit an application.for license renewal under S 40.43, the licensee shall on or before the expiration date specified in the license--
j
-(i) Terminate use of source material-8/17/84 55 Enclosure A
[7590-01]
(ii)
Remove radioactive contamination to the extent practicable ~
except for those procedures covered 'bv oaracraoh (c)(2)(i) of_ tttis.__
section:
(iii)
Properly dispose of source material;
-(iv) Submit a completed form NRC-314, which certifies information concernino the disoosition of materials; and (v)
[Sebmit-a-radiation-serveg-report-to-confirm-the-absence of radi o acti v e-mate ri ai s - e r-to-es tabli s h.- the-i ev ei s - o f-resi duai-radi o acti v e I
contamination,] Conduct a radiation su'rvey of the premises where the licensed activities were carried out and submit a report of the results
.of this survey, unless the licensee demonstrates [the-absence-of-resieeni radioactive-centamination] that the premises are suitable for release for unrestricted use in some other manner.
The licensee _shall,. as appropriate--
(A) Report levels of radiation in units of microrads per hour of beta and gamma radiation at one centimeter and gamma radiation at one metei from surfaces, and report levels of radioactivity in units of disintegra-tions per minute (or microcuries) per 100 square centimeters removable and fixed [en} for surfa'ces, microcuries per milliliter [in] for water,
~~1and picocuries per gram for~[in-contaminated] solids such as soils or concrete; and (B)
Specify the survey instrument (s) used and certify that each instrument is properly calibrated and tested.
E( 23 --if-no-re s i d e ai-radi o a c ti v e-c o n t ami nati o n-attri butabi e-te activities-conducted-ender-the-iicense-is-detected;-the-iicensee shali s ubmi t-a- c erti ficati o n-that-n o-dete ctabl e-radi c activ e-contami nati on-was feend:--if-the-information-submitted-ender-this paragraph-and paragraphs (d3(13(iv3-and-(v3-of-this-section-is-adequate;-the-Sommission wiii notify-the-iicensee-in-writing-that-the-iicense-is-terminated.
(33 f i 3 --i f-d e t e c tabl e-l e v ei s - o f-r e s i d u ai-ra di o a cti v e-co ntami nati o n attributable-to-activities-conducted-ander-the-iicense are-feend;-the
-license-continues-in-effect-beyond-the expiration-date;-if necessary; with-respect-to possession-of-resideai-bypredeet-meteriai present as -'
contamination-entii-the-Eemmission-notifies-the-iicensee-in writing-that
- the-ficense-is-terminated:--Bering-this-time;-the-iicensee-is-subject-te-the provisions-of paragraph-(e3-of-this-section:-
- - - - - ~
N E m1m ure A
[7590-01]
(ii3--in-addition-to-the-inform. tion submitted ender paragraphs' (d3fi3(iv3 and-tv3-ef-this section-tne-iicensee-sheil submit a pian-for-
-eecentaminatien--if required-as-regards resideal-radienctive-centamination'
~
remaining st-the-time-the-license expires-)
~
~
{2)(i) In addition to the information reouired under para-graohs (c)(1)(iv) and (v) of this section, the licensee shall submit.___.
a plan for completion of decommissioning if the procedures _necessary _..___.___
.... _... _ _ _. _. to carry out decommissioning have nok been previously approved by the.___
i __ _
_.. NRC, are exterisive, and could signific'antly increase potential health..___..___._.
and safety impacts to workers or to the public such as in_ cases where --
(A) workers would be entering areas not normally occupied where _.
surface contamination and radiation levels are signif_icantly higher than.
routinely encountered during operation; or fB) procedures could result in significantly greater airborne __ _. _.
concentrations of radioactive materials than are present during opera _ _.
tion; or (C) procedures could result in significantly greater releases 'of._
radioactive material to the environment than those associated with ope rati o n ; --o'r ---- --
(D) procedures would involve techniques not applied routinely ____..__ __
during maintenance operations.
(ii) Procedures with potential health and safety impacts may not.___
e carried out prior to approval of the decommissioning plan. _ _ _ _ _ _ _ _ _
(iii) The proposed decommissioning plan, if required by paragraph (c) _ __
(2)(i) of this section or by license condition, must include--
(A) Discussion of planned decommissioning activities:
. B) Description of methods used to assure orotection of workers __
(
. _.. _. _ _ _ _.... and the environment against radiation hazards during-decommissioning; (C) A description of the planned final radiation survey; and '
(D) An updated detailed cost estimate for decommissioning, comoarison of that estimate with present funds set aside for decommis-
-sioning, and plan for assuring the availability of adequate funds for completion of decommissioning.
~
8/17/84 57 Enclosure A
[7590-01)
The orocosed decommissioning Dlan will be acor.oved _by_.the_._____..___.
(iv) i F
~~
~
Commission if the information thereib demonstrates th'at the decomm s ___...._
sioninc will be completed as soon as is reasonable and_that the health and safety of workers and the Dublic will be adeouat~el'y.orotected.__
Uoon accroval of the decommissioning clan by the. Commission, 7.____
(3)
I the licensee shall complete decommissioning in accordance with the approved _
m As a final step in decommissioning, the licensee shall again submit ___
. plan.
the information reouired in paragraoh (c)(1)(v) of this section and shall
. gy certify the disposition of accumulated wastes from decommissioning.
If the information submitted under paragraphs (c)(1)(v) or (d) e' (c)(3) of this section does not adequately demonstrate that the premises are suitable for release for unrestricted use, the C~ommission will inform
..the licensee of the appropriate further actions required for termination of license.
(e) [Each-iicensee-who possesses-resideai-searce-materiai-ender p arag ra ph-f d3 ( S 3 -o f-thi s -s e cti en-- f eil ewi ng-the-expi rati o n-d ate-sp in-the-iicense-shali -] Each specific license continues in effect beyond
.l the expiration date if necessary with respect to possession of residual _
l source material present as contamination until the Commission notifies
~
During this ' time, the licensee in writing that the license is terminated.
thd licensee shall--
Limit actions involving source material to those related (1) to [decentamination-and-other-activities-reisted-to preparation-for release-for-entestricted-use] decommissioning; and Continue to control entry to restricted areas until they are (2) suitable for release for unrestricted use and the Commission notifies the licensee in writing that the license is terminated.
Specific licenses will be terminated by written notice to (f) the licensee when the Commission determines that-- -
Source material has been properly disposed; (1)
Reasonable effort has been made to eliminate residual radio-(2)
~ _. _ _ _ _
active contamination, if present; and A radiation survey has been performed which demonstrates (3)(i) that the premises are suitable for release for unrestricted use; or Enclosure A
~~~
as
[, 7590-01]
(ii) Other information submitted by the licensee is sufficient to l-'
__.~' dem_pnstrate that the cremises are suitable for release for unrestricted,
use.
PART 50 - DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION FACILITIES
+.
~ :
~
15.
The authority citation for P, art 50 continues to. read as follows:
. AUTHORITY:
Secs. 103, 104, 161, 182, 183, 186, 189, 68 Stat. 936, 937, 948,~ 953, 954, 955, 956, as amended, sec. 234, 83 Stat. 1244, as amended
--(42 U.S.C. 2133, 2134, 2201, 2232, 2233, 2236, 2239, 2282); secs. 201, 202, 206, 88 Stat. 1242, 1244, 1246, as amended (42 U.S.C. 5841, 5842, 5846), unless otherwise noted.
Section 50.7 also issued under Pub. L.95-601, sec. 10, 92 Stat.
2951 (42 U.S.C. 5851).
Sections 50.57(d), 50.58, 50.91, and 50.32 also
--issue'd under Pub. L.97-415, 96 Stat. 2071, 2073 (42 U.S.C. 2133, 2139).
l Section,50.78 also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152).
Sections 50.80-50.81 also issued under s'ec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234).
Sections 50.100-50.102 also issued under sec. 186, ~ ~ '
~
~
~
l 68 Stat. 955 (42 U.S.C. 2236).
For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C.
2273), $$ 50.10(a), (b), and (c), 50.44, 50.46, 50.48, 50.54, and.
50.80(a) are issued under sec. 161b, 68 Stat. 948, as amended (42 U.S.C.
2201(b)); SS 50.10(b) and (c) and 50.54 are issued under sec. 161i, 68 St't. 949, as amended (42 U.S.C. 2201(1)); and 6550.55(e), 50.59(b),
j
~
a 50.70, 50.71, 50.72, 50.73, and 50.78 are issued under sec. 161o, 68 Stat.
950, as amended (42 U.S.C. 2201(o)).
M':
16.
Section 50.2 is amended by adding a new paragraph (y) to read as follows:
$ 50.2 Definitions.
i a
a a
a a
~ _ (y)
" Decommission" means to remove (as a facility) safely from
~
._ ___.. service and reduce residual radioactivity to a leve1 that permits i. _.. _. _.
~
release.of the property for unrestricted use and termination of 1icense. _
l 8/17/84 59
- Enclosure A
1
[7590-01]
~
17.
Section 50.33 is amended by revising the introductory text of paragraph (f)(1), revising paragraohs (f)(1)(ii) and (f)~(3) and adding paragraph (k) to read as follows:
! 50.33 Contents of applications; general information~.
Each application shall state:
R R
R R
R (f)(1)
Information sufficient to demonstrate to the Commission the I
financial qualifications of the applicant to carry out, in accordance with regulations in this chapter, the activities for which the permit or
. license is sought.
However, no information on financial qualifications, including that in paragraphs (f)(1)(i) and (ii) of this section, is required in any application, [ner-shali-any-financial-review-be-conducted]
if the applicant is an electric utility applicant for a license to con ~
struct or operate a production or utilization facility of the type described in S 50.21(b) or 6 50.22, and no review of: financial qualifica-
~'
~'
tions will be conducted, notwithstanding that a cost estimate and funding. _ _.. _
method for decommissioning are required of any applicant for an operating. _.._
license for a production or utilization faci.lity by paragraph (k) of this_--
.. = _ -...
"A (ii)
If the application is for an operating license, the applicant shall submit information that demonstrates the applicant possesses or has reasonable assurance of obtaining the funds necessary to' cover estimated operation costs for the period of the license, plus the estimated costs of decommissioning [ permanently-shutting] the facilitym_
[dewn-and-maintaining-it-in-a-safe-condition] The applicant shall submit estimates for total annual operating costs for each of the ~first five years of operation of the facility and estimates of the costs to decommission [per.manently-shut-down] the facility. _[and-maintain-it-in
~ -
a-safe-condition] The applicant shall also indicate the ' source (s) of funds to cover these costs.
An application to renew or extend the: term -
- of an operating license must include the same financiai information as required in an application for an initial license.
a l
5 90-01]
5
- (3)
( Except-that-f or-ei e c tri c-etiii ty-appii ca nts-f or-cons treetion permits-and-operating-licenses] Tne Commission may request an -established entity or newly-formed entity to submit additional or more detailed information respecting its financial arrangements and stat,us of funds if the Commission considers this information appropriate. This may include information regarding a licensee's ability to continue the conduct of the activities authorized by the license and to decommission [permanentiy-shot-
.._.down] the facility.
[and-mai ntai n-It,-i n-a-s a f e-c ondi ti o $.
A request for financial information addressed to an ' electric utility applicant for a construction permit or an operating license will be -limited to information_ _,
directly related to providing financial assurance for decommissioning. _,__,
2 A
A A
R (k)(1) For an applica~ tion for an operating license for a production or utilization facility, information on how reasonable assurance will be
.provided that funds will be available to decommission the facility.
This _
information must consist of either a proposed decommissioning funding plan that contains a cost estimate for decommissioning and a description-l, of the method of assuring funds for decommissioning including means _
i------
- -of-adjusting cost estimates and associated funding. levels over the life; _
of the facility, or, in the case of an electric utility, a certifica.....
tion that financial assurance for decommissioning will be provided in the amount of $100,000,000 using a means acceptable to the Commission for providing such assurance as specified in. paragraphs (k)(2) and (4) of this section.
(2) As provided in paragraphs (k)(3) and (4) of this section,
._.m financial assurance may be provided by the following methods:
_.(i)
Prepayment.
Prepayment is the deposit prior to the start of_, _ _
..._. operation into an account segregated from licensee assets and outside
.. ____ the licensee's administrative control of cash or liquid assets that
..l will retain their value over the projected operating life of the facility _ _
l
. _ _... and that are in amount such that the principal plus -accumulated earnings _
._...would be sufficient to pay decommissioning costs.
Prepayment may be in, _
-. _ _ __. __.. the form of a trust, escrow account, government fund, certificate of deposit, or deposit of government securities.
l 8/17/84 61 Enclosure A
[7590-01]
l (ii) External sinking fund.
An external sinking fund _.is a fund _
established and maintained by the periodic deposit of_a. prescribed. __ ________
. - -. - amount into an account segregated from licensee assets and outside
~. _
the licensee's administrative control in which the total amount of the __.._
_ periodic deposits plus accumulated earnings would be' sufficient to pay decommissioning costs at the time termination of operation is expected. __.
l An external sinking fund may be in tbe form of a trust, escrow account, _ _
i government fund, certificate of depolit, or deposit of government __
t securities.
(iii) A surety method or insurance.
A surety method or insurance ___1._
is a guarantee that decommissioning costs will be paid should the_ licensee'_
A surety method may be in the form of a surety bond, letter of_..__.
default.
credit, line of credit, secured interest, or other quarantee method.__ ___ ___.
t Any surety method or insurance used to provide financial insurance for. _..
i decommissioning must contain the following conditions:.. _. _ _ _. _ _. _. __ _ _.
(A) The surety or insurance must be open-ended or, if written _., _.
for a specified term, such as five years, must be renewed automatically ____
. unless 90 days or scre prior to the renewal date, the issuer notifics the Commissionv the beneficiary,'who must be a Commission-approved trustee-,
and the licensee of its intention not to renew.
The surety or insurance _.__._
must also provide that the beneficiary may automatically collect prior to__
_ the expiration without proof of forfeiture if the licensee fails to_
_ provide a replacement acceptable to the Commission within 30 days after _
, -- receipt of notification of cancellation.
(B) The surety or insurance must remain in effect until the.
~
Commission has terminated the license.
~
_ _a _
(iv)
Internal reserve.
Internal reserve is a fund established and maintained by the periodic deposit or crediting of a prescribed amount ___,__
into an account or reserve which is not segregated from licensee assets and is within the licensee's administrative control in which the total amount t _
- of the periodic deposits or funds reserved plus accumulated earnings.would ___
be sufficient to pay for decommissioning at the time: termination of l
operation is expected.
This method may use negative: net salvage value,_
depreciation in which funds are invested in licensee assets, and at the end of facility life, bonds are issued against these: assets and the funds raised are used to pay for decommissioning.
An internal reserve i; - -. --...
a 8/17/84 62 Enclosure A i
[7590-51]
.._...______ _ may also be in the form of an internal sinking fund which is similar to,
an external sinkinc fund exceot that the fund is held and invested bv the licensee.
_ (3)
Exceot for an electric utility, acceptable methods of providino, _ _
financial assurance for decommissioning are--
(i)
Prepayment;
.(ii) An external sinking fundyn which deposits are made at least __
annually, coupled with a surety metliod or insurance, the value of which ___
..__.may decrease by the amount being accumulated in the sinking fund, (iii) A surety method or insurance; (iv)
In the case of Federal, State, or local government licensees,
. certification that the appropriate government entity will be guarantor of _
decommissioning funds; and L_
(v) Other funding methods which are demonstrated by the applicant or licensee to provide comparable assurance to methods listed in paragraphs __,
(k)(3)(i) through (iv) of this section.
_ __1 (4)
For an electric utility, acceptable methods of providing financial assurance for decommissioning are--
~ -
- - -(i)
Prepayment,
. (ii) An external sinking fund in which deposits are made at least _ _ _ _ _ _ _
annually; (iii)
A surety method or insurance; (iv)
For an electric utility owning more than one generating
. _... facility, an internal reserve in which deposits are made at )past annually; and
~ " ' _. _ _ _
_____ -(v).0ther funding methods which are demonstrated by the applicant 1
_..__or licensee to provide comparable assurance to methods listed in paragraphs (k)(4)(i) through (iv) of this section.
18.
Section 50.51 is revised to read as follows:
5 50.51 Duration of license, renewal.
Each license will be issued for a' fixed period of time to be speci-
~
I
~~~
fied in the license but in no case to exceed 40 years from the date of
~~
~ '
' issuance.
Where the operation of a facility is involved the Commission
~
~';
~:!
will issue the li. cense for the term requested by the applicant or for the estimated useful life of the facility if the Commission determines
~
8/17/84 63 Enclosure A
J
[7590-01) that;the estimated useful life is less than the term requested.
Where
- - construction of a facility is involved, the Commission may-specify in the construction permit the period for which the license will be issued if.. approved pursuant to 550.56.
Licenses may be renewed by the Commis-sion.upon the expiration of the period.
Unless application for renewal 3
has been made, application for termination of license pursuant to 6 50.82 _ __
must be made no later than one year prior to the license._ expiration date._
i
' 9.
Section 50.54 is amended by adding new paragraphs (bb)~and (cc) 1 4
to read as follows:
5 50.54 Conditions of licenses.
Whether stated therein or not, the following shall be deemed condi-
~
tions in every license issued:
1 m
a a
a a
(bb)(1) Each holder of an operating license for a production or utilization facility issued on or after [ insert a date 2_~ years after the___ __.
.. _..._ _ _. effective date of the final rule] shall provide fina_nciaT assurance for decommissioning in accordance with an approved
---or by means of a certification as provided in 6 50.33(_k)(1).
1..
(2) On or before [ insert a date two years after the effective date of the final rule), each holder of an operating lice _nse for a production __. _
or utilization facility in effect on [ insert date immediately preceding._..___
, _ _, _ the date two years after the effective date of the final _ rule] shall.. _
submit information on providing financial assurance for decommissioning.
as specified in 6 50.33(k).
Upon approval of a decommissioning funding __ _._..
plan by the Commission, the licensee shall implement procedures for
[ _ _ _ providing financial assurance for decommissioning in accordance with..__.
the plan.
In each certification of financial assurance, the licensee
, shall indicate that the means of providing financial assurance for decommissioning are in place.
(3) A decommissioning funding plan will be approved if it includes _
_ sufficient information to demonstrate that a reasonable level of assurance 4
will be provided that fundt will be available when needed to cover the costs of decommissioning.
(cc)
Each licensee shall keep records of information important to i..
..__ _ _____ the safe and effective decommissioning of the facility in a file explicitly _
~
8/17/84 64 Enclosure A
4
[7590-01]
for this ourpose until the license is terminated by the. Commission._ I f_._ _......
- records of relevant information are kept for other purposes reference to such records and their locations may be substituted..:Ir.fonmatior, the
. Commission considers important to decommissioning consists of --
(1)
Records of spills or other unusual occurrences involving the _.._. _ _ _..
spread of contamination in and around the facility, equipment, or site.
These records may be limited to instances when significant contamination i
remains after any cleanup procedures or when there is reasonable. likelihood.
that contaminants may have spread to inaccessible areas _as in the case of possible seepage into porous materials such as concrete,. These records....__..._
must _ include any known information on identification ~of _ involved nuclides, quantities, forms, and concentrations.
~
. (2) As-built drawings and modifications ~of structures and equipment 2_. __ _ _ _ _.. _ _
_{n high radiation areas and of locations of possible. inaccessible con _
tamination such as buried pipes which may be subject.to contamination.
If referencing such drawings, it is not necessary to.index each indi-vidual relevant document.
If drawings are not available, the licensee shall substitute appropriate records of available information concerning these areas and locations. --
_T_ '_'_T_.
1 -
- J 20.
Section 50.55 is amended by revising paragraph (c) to read as follows:
5 50.55 Conditions of construction permits.
Each construction permit shall be subject to the following terms and conditions:
a a
-(c)- Except as modified by this section and S 50.55a, the:construc ~
. tion permit shall be subject to the same conditions to which a license is subject, not including 6 50.54(bb).
A A
A A
A 21.
Section 50.82 is revised to read as follows:
~
g 50.82 Applications for termination of licenses.
(a) Any licensee may apply to the Commission for authority to__..
surrender a license voluntarily and to decommission the facility.
For a
-rfacility that permanently ceases operation afwer [ insert effective date 8/17/84 65 Enclosure A
i
[7590-0T.
of the final rule] this application must be made wit _h_in two years follow-
-- ino-oermanent cessation of operations, and in no case later than one year __.. _
prior to expiration of the operating license.
Each application for _
-terminatien of license must be accompanied, or preceded, by a proposed _. -
- y decommissioning plan.
For a facility which has permanently ceased _
-operation prior to [ insert effective date of the final rule], require-ments for contents of the decommissioning plan as specified in.
~
paragraphs (b) through (d) of this section may be modified with approval._.. _.
of the Commission to reflect the fact that the decommissicning process __.
has previously been initiated.
(b) The proposed decommissioning plan must include-(1) The choice of the alternative for decommissioning with a_
- description of activities involved.
Alternative methods for'decom-
-missioning which significantly delay completion of decommissioning such as use of a storage period, will be acceptable if sufficient benefit._1__ _
results;
_ - (2) A description of controls and limits on procedures and equip-ment to protect occupational and public health and safety;
- ~ ---
(3) A description of the planned final radiation survey, _;___ _____.._.
f4) An updated cost estimate for the chosen alternative for decommissioning, comparison of that estimate with present funds set _
aside for decommissioning, and plan for assuring the availability of _ _ _ __
adequate funds for completion of decommissioning.
(c) Decommissioning plans which propose an alternative tha*. delays. __
completion of decommissioning by including a period.of storage or long term surveillance must provide that--
. (1) Funds needed to complete decommissioning be placed into an raccount segregated from licensee assets and outside the. licensee's admin-istrative control during the storage or surveillance period, or a surety method or fund certif; cation be maintained in accordance with the criteria _ _
of 6 50.33(k); and
- - (2) Means be included for adiustirig cost estimates and associated-
"-:+:
funding levels over the storage or surveillance period.
8/17/84 66 Enclosure A
~
[7590-01]
(d)
For decommissioning plans in which the major dismantlement _______
activities are delayed by first placing the f acility__in. storage, olan._,._
l ning for these delayed activities may be less detailed. _. Updated detailed
)
plans must be submitted and accroved orior to the start.of these activities.
(e)
If the decommissioning plan demonstrates that the. decommissioning _
... i
'~
~~
will be performed in accordance with the regulations..in.this. chapter and.
.l_ _
will not be inimical to the common defense and secur.ity.or to the health.
and safety'of the public, and after hotice to interested persons, the.._ _______
Commission will issue an order authoriiing the decommissioning. _..__.
The Commission will terminate the license if it determines that--
(f)
~
~'.
~ ~ ~ ~ ~
The decommissioning has been performed in accordance with an._.
(1)
~
~
'.~a~pproved decommissioning plan and any conditions in.th'e. order authorizing.
decommissioning; and (2) The terminal radiation survey and associated documentation demonstrates that the facility and site are suitable _for release for unrestricted use.
PART 51 - ENVIRONMENTAL PROTECTION REGULATIONS FOR DOMESTIC
~
LICENSING AND RELATED REGULATORY FUNCTIONS 22.
The authority citation for Part 51 continues to read as follows:
AUTHORITY:
Sec. 161, 68 Stat. 948, as amended (42 U.S.C. 2201);
secs. 201, as amended, 202, 88 Stat. 1242, as amended, 1244 (42 U.S.C.
5841, 5842).
Subpart A also issued under National Environmental Policy Act of 1969, secs. 102, 104, 105, 83 Stat. 853-854, as amended (42 U.S.C. 4332, 4334, 4335); and Pub. L.95-604, Title II, 92 Stat. 3033-3041.
Section 51.22
~
also issued under sec. 274, 73 Stat. 688, as amended by S2 Stat. 3036-
~
3038 (42 U.S.C. 2021).
551.20 [ Amended]
23.
Section 51.20 is amended by removing paragraphs (b)(5) and (10).
8/17/84 67 Enclosure A
[7590-01)
. 24.
Section 51.22 is amended by adding a new paragr'aph (c)(19) to -
read as follows:
_.3.51.22 Criterion for and identification of licensing and
- regulatory I
actions eligible for categorical exclusion.
m a
a a
=
(c) The following categories of actions are categorical ~ exclusions:
i A-n n
e s
n y
(19) Approvals of decommissionino funding plans.
25.
Section 51.53 is revisid to read as follows:
S 51.53 Supplement to Environmental Report. [--Operating-iicense-stage-]
(a) Operating license stage Each applicant for a license or for renewal of a license to operate a production or utilization facility covered by 5 51.20 shall submit with its application the number of copies, as specified in f 51.55, of a separate document, entitled " Supplement to Applicant's Environmental Report - Operating License Stage," which wil'1 update " Applicant's
- Environmental Report - Construction Permit ~ Stage."- ifnless-the applicant -~
requests the renewal of an operating license or unless otherwise required by the Commission, the applicant for an operating license for a nuclear power reactor shall submit this report only in connection with the first.
. licensing action authorizing full power operation.
In this report, the applicant shall discuss the same matters described in SS 51.45, 51.51 and 51.52, but only to the extent that they differ from those discussed or reflect new information in addition to that discussed in the final
- environmental impact statement prepared by the Commission in connection
- with-the construction permit.
Unless otherwise required by the Commis-
.sion, no discussion of need for power or alternative energy sources or alternative sites for the facility is required in this report.
The
~
" Supplement to Applicant's Environmental Report - Operating License -
Stage" may incorporate by reference any information contained in the
- ~
"Applicart's Environmental Report - Construction Permit Stage," final environmental impact statement or record of decision previously prepared in connection with the construction permit.
-N 68 Enclosure A j
~
[7590-01)
(b) Decommissioning stage.
Each aoplicant for a license amendment _
authorizing the decommissioning of a oroduction or utilization facility ~
covered by 6 51.20 shall submit with its acolication the number of cooies._.
as specified in f 51.55, of a seoarate document, entitled " Supplement to Aco'licant's Environmental Report - Decommissioning Stage," which will update " Applicant's Environmental Report - Construction Permit Stage" and " Supplement to Applicant's Environmental Report - Operating License _ _ _
Stage," as appropriate, to reflect aIy new information or significant __ _ _
environmental change associated with the applicant's proposed decom-missioning activities.
The " Supplement to Applicant's Environmental _ _ _
Report - Decommissioning Stage" may incorporate by reference any informa-tion contained in the "Applic' nt's Environmental Report - Construction a
Permit Stage," " Supplement'to Applicant's Environmental Report - Operat-ing License Stage," final environmental impact statement, or record of
, decision previously prepared in connection with the construction permit or the operating license.
26.
In 5 51.55, paragraph (a) is revised to read as follows:
___S. 5L55_Envir6nmental Report - Number. of copies; Distribution.
(a) Each applicant for a license to construct and operate a produc-tion or utilization facility covered by paragraphs (b)(1), (b)(2), (b)(3) or (b)(4) of 6 51.20 [or-for a-iicense-amendment-covered-by paragraph (b3(53.of-9-ShE8] and each applicant for a license amendment authoriz._
ing the decommissioning of a production or utilization facility covered by -f 51.20 shall submit to the Director of Nuclear Reactor. Regulation or-
-- the Director of Nuclear Material Safety and Safeguards, as appropriate, in accordance with 5 50.30(c)(1)(iv) of Part 50 of this chapter, forty-one (41) copies of an environmental report, or any supplement to an envi-ronmental report.
The applicant shall retain an addi-tional 109 copies of the environmental report or any supplement to the environmental report for j
- distribution to parties and Boards in the NRC proceeding, Federal, State,
. and local officials and any affected Indian tribes, in accordance with written instructions issued by the Director of Nuclear Reactor Regulation i
or the Director of Nuclear Material Safety and Safeguards, as appropriate.
i s
a s
s n
8/17/84 69 Enclosure A
[7590-01)
In 5 51.60, paragraph (a) is revised to read as follows: ~
27.
f 51.60 Environmental Report - Materials licenses.
Each applicant for a license or other form of permission, or an (a)
- amendment to or renewal of a license or other form of permission' issued i
h t 30, 32, 33, 34, 35, 40, 61, 70 and/or 72 of th s c ap er,
. pursuant to Part,s and covered by paragraphs (b)(1)-(b)(6) of this section, shall submit B
with its application to the Directog,of Nuclear Material Safety and Safe-guards the number of copies,.as specified in 5 51.66, of a separate docu-E ment, entitled " Applicant's Environmen'tal Report" or Supplement to Appli-cant's Environmental Report," as appropriate.
The " Applicant's Environ-If mental Report" shall contain,the information specifie'd in 5 51.45.
the application is for an amendment to or a renewal of a license or other form of permission for which the applicant has previ'o'usly submitted an environmental report, the supplement to applicant's environmental report -
may be limited to incorporating by reference, updating or supplementing the information previcusly submitted to reflect any significant environ-mental change, including any significant environmental change resulting from operational experience or a change in operations [-] or proposed-
- ~~'-.z_._.____-
decommissioning activities.
l a
a a
i PART 70 - 00MESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL The authority section for Part 70 is revised to read as:follows:
28.
Secs. 51, 53, 161, 182, 183, 68 Stat. 929, 930, 9'48, 953, AUTHORITY:
954,. as' amended, Sec. 234, 83 Stat. 444, as amended (42 U.S.C.-207 202,204,.206, 88 Stat.
2201, 2232, 2233, 2282); secs. 201, as amended, 1244, 1245, 1246 (42. U.S.C. 5841,.5842,- 5845, 5846).
1242, as amended, Section 70.7 also issued under Pub. L.95-601, sec.10, 92 Stat.
Section 70.21(g) also issued.under.Sec. 122;.
2951 (42 U.S.C. 5851).
Section 70.31 also fsseed under sec. 57d, 68 Stat. 939 (42 U.S.C. 2152).
Sections.70.36'&nd 70.44 Pub. 'L.93-377, 88 Stat. 475 (42 U.S.C. 2077).
4).
, al.so issued under sec.184, 68 Stat. 954, as amended (42 U.S.C. 223 Enclosure A 70
~nunn
,[7590-01)
Section 70.61 also issued under secs. 186, 187, 68 Stat. 955 (42 U.S.C.
2235, 2237).
Section 70.62 also. issued under sec. 108, 68 Stat. 939, as amended (42 U.S.,C. 2138).
For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C.
2273), SS 70.3, 70.19(c), 70.21(c), 70.22(a), (b), (d)-(k), 70.24(a) and (b), 70.32(a)(3), (5), (6), (d), and (i), 70.36, 70.39(b) and (c),
70.41(a), 70.42(a) and (c), 70.56, 79 57(b), (c) and (d), 70.58(a)-(g)(3),
e'..
and (h)-(j) are issued under sec. 161b, 68 Stat. 948-as amended (42 U.S.C.
_2201(b)); SS 70.7, 70.20a(a) and (d), 70.20b (c) and (e), 70.21(c), 70.24(b),
70:32(a)(6), (c), (d), (e), and (g), 70.36,70.51(c)-(g),70.56,70.57(b) a.nd (d) and.70.58(a)-(g)(3), and (h)-(j) are issued under sec.161i, 68 Stt'..
949; as amended (42 U.S.C. 2201(i)); and SS 70.20b(d) and (e), 7'O.51(b) and (i), 70.52, 70.53, 70.54, 70.55, 70.58(g)(4), (k), and (1), 70.59 and
- 70.60.(b) and (c) are issued under sec. 1610, 68 Stat. 950, as amended (42 U.S.C. 2201(o)).
29..
Section 70.4 is amended by adding a new paragraph (x) to read as follows:
- $_70.4 -Definitions.
a a
a
_.(x) " Decommission" means to remove (as a facility) safaly from service and reduce residual radioactivity to a. level that permits release of the property for unrestricted use and termination of license.
3.0.
'Section-70.22 is amended by adding a new paragraph (a)(9) to read as follows:
S 70.22 Contents of applications.
~
(a)
Each application for a license shall contain the following information:
a a
(9) As provided by 6 70.25, certain aoplications for specific licenses filed under this part must contain a proposed decommissioning funding plan or a certification of financial assurance _for decommissioning, 8/17/84 71 Enclosure A
i E -;~)
In the case of renewal applications submitted before_linsert_.a._date_one__
year after the effective date of the final rule] this. submittal. may follow.____
the renewal application but must be submitted on or lefore [ insert.a date.
one year after the effective date of the final ruleTJ
~
~
a a
a m
a i
f.
31.
Section 70.23 is amended by. adding a new paragraph (a)(12) to E-read as follows:
6 70.23 Requirements for the approval of applications. -
(a) An application for a license will be approved if the Commission s
determines that:
A A
A A
A (12) The applicant's proposed decommissioning funding plan __or _ _ __.
certification of financial assurance for decommissioning;_if reouired_by_.
9 70.25(a) or (b), includes sufficient information tofdemonstrate that the
. proposed funding method will provide reasonable assuranc'e that~ sufficient,______.
funds will be available to decommission the facility __in a safe aIid timely.._._ _ _
manner.
n a
r.
n s
32.
A new 9 70.25 is added to read as follows:
S 70.25 Financial assurance for decommissioning.
~
(a)
Each applicant for a specific license authorizing the possession _ ___
and use of unsealed special nuclear material in quantities exceeding. _ _ __ _ _
105 times the applicable quantities set forth in Appendix-C of Part 20 shall submit a decommissioning funding plan as described in paragraph (d) of-this section.
Each holder of such a license shall provide: financial assurance for decommissioning; required submittals for providing financial __
assurance are set out in 6 70.32(k)(2).
-())
Each applicant for or holder of a specific license authorizing possession and use of unsealed special nuclear material in quantities specified in paragraph (c) of this sect' ion shall either--
(1)' Submit a decommissioning funding plan as described in paragraph _._ _
(d) of this section; or evaE2rw 9F>
fhmRremet1J.L
[7590-01)
- (2)
Submit a certification that financial assurance.for decommission.
ino has been provided in the amount prescribed by paragraph (C) of this___..___.
section usino one of the methods described in paragraph (e) of this _. _ ___.__
section.
For an aoplicant. this certification may state.that the aporc-priate assurance will be obtained after the acolicati_onfhas been....
~~
~
. approved and the license issued but prior to the receipt of licensed material.
g,
- -- (c) Table of required amounts 'of financial assurance for decommis. ___ __
sioning by quantity of material.
~
greater than 104 but less than or equal to
$500,000._._
105 times the applicable quantities of Appendix C of Part 20
_.1._.__..c.___._...._..
greater than 103 but less than or equal to
$100,000___
104 times the applicable quantities of Ag endix C of Part 20 (d) Each decommissioning funding plan must contain a cost estimate' _. __
r-for decommissioning and a description of the method of' assuring funds for
-. _. -. _ _. _ _. decommissioning including means of adjusting cost estimates and assoc'iated funding levels over the life of the facility.
(e) Financial assurance for decommissioning must be _provided by one or more of the following methods:
(1)
Prepayment.
Prepayment is the deposit prior to the start of operation into an account segregated from licensee assets and outside the..
licensee's administrative control of cash or liquid assets that will retain
.their value over the projected operating life of the:-facility and that are in amount such that the principal plus accumulated earnings'would be sufficient tn pay decommissioning costs.
Prepayecatlmay be 'in the form. _ _...
of a trust, escrow account, government fund, certificate _of deposit, or_. _
deposit of government securities.
PM ' '
(2) A t..'-ty method or insurance.
A surety method or insurance is.
_ _. _ _ _..a guarantee that decommissioning costs will be paid should the licensee A.su_tj(y method may be in the form of a surety bond, letter of default.
credit, line 63 credit, secured interest, or other guarantee method. - Any.
~
8/17/84 73 Enclosure A
[7590-01]
surety method or insurance used to provide financial _as'surance'.for decommissioning must contain the following condition'sF' (i) The surety or insurance must be open-ended or, if_* written _for a soecified term, such as five years, must be renewed _'a'utomatically_
'~un1ess 90 days or more prior to the renewal date. the. issuer _notifiet_the ~~
Commission, the beneficiary, and the licensee of its. intention.n'ot_to.__ _.__'.
The surety or insurance must,also prov,de that.the_ beneficiary ___ _,__..
renew.
may automatically collect prior to the expiration withoutuprooL_of forfei __ __
ture if the licensee fails to provide a replacement acceptahle to.the
~
Commission within 30 days after receipt of notificatio~iof_ cancellation,
-(ii) The beneficiary of the surety or insurance must be a trustee _.___.__
acceptable to the Commission such as an appropriate st' ate or federal _ _._ ___..
~ government ager.cy or a major financial organization.
^
(iii) The surety or insurance must remain in ef fect _until..the.. ___ _ _____
Commission has terminated the license.
(3) An external sinking fund in which deposits are made at least_
annually, coupled with a surety method or insurance cthe.'value'.of which___ _ ___.
may decrease by the amount being accumulated in the ' sinking fund
.An
~
~~
external-sinking fund is a fund established and maintained-by the periodic ~
deposit of a prescribed amount into an account segregated from licensee _ ___
assets and outside the licensee's administrative control in_which the_ total amount of the periodic deposits plus accumulated earnings would be suffi _.
_.. _.._ ___.cient to pay decommissioning costs at the time termination of_ operation is expected.
An external sinking fund may be in the form of_ a _ trust,______.__ _ __
-escrow account, covernment fund, certificate of deposit, or _ deposit of government securities.
(4) In the case of Federal, State, or local government licensee ~s, a.__._.
certification that the appropriate government entity will be guarantor of decommissioning funds.
(5) Other funding methods which are demonstrated by the applicant or licensee to provide comparable as'surance to methods listed in para _
graphs (c)(1) through (3) of this section.
__ J '
rvarub%
M Enclosure A
[7590-01:
- 33.
Section 70.32 is amended by adding new paragraphs (k)~and (1) to read as follows:
5 70.32 Conditions of licenses.
n n
a a
n (k)(1)
Each holder of a specific license issued on or after [ insert a date 1 year after the effective dt.te of the final rule] which is of a type described in't 70.25(a) or (b),i shall provide financial assurance for decommissioning in accordance with' the criteria set forth in 6 70.25.
(2) On or before [ insert a date 1 year after the effective date of
, the final rule] each holder of a specific license of~a type described
.-... -..in f 70.25(a) shall submit a decommissioning funding plan or certifica-tion of financial assurance for decommissioning in an amount at least equal to $500,000 in accordance with the criteria set forth in 6 70.25.
If the licensee submits the certification of financial assurance rather than a decommissioning funding plan at this time, the licensee shall. _ _...
include a decommissioning funding plan in any application for license renewal.
(3) On or before [ insert a date 1 year after the effective 'date. _ ;--
of the final rule] each holder of a specific license of a type described in 6 70.25(b) shall submit a certification of financial assurance for j,
_ decommissioning or a decommissioning funding plan in accordance with the.
criteria set forth in f 70.25.
4
,_ _(4) As of [ insert a date 1 year after the effective date of the.._,
l
._. final rule] each licensee covered by 6 70.25(a) or (b) shall provide financial assurance for decommissioning as a condition of license.
If _ _
a decommissioning funding plan has been submitted to the Commission, j
implementing the plan becomes a condition of the license ~upon approval _._.
of the plan.
l
_,,. _._,, _... _ (1) Each person licensed under this part shall keep records of
_ information important to the safe and effective decommissioning of the facility in a file explicitly for this ' purpose until the license is
. _ _.:. terminated by the Commission.
If records of relevant information are.__
l l
._...____...___. kept for other purposes, reference to such records and their locations., _.. _
i
, _,_ may be substituted.
Information the Commission considers important to __,
de ommissioning consists of--
i 8/17/84 75 Enclosure A
~
[7590-01]
(1)
Records of spills or other unusual occurrences involving _the.
~
scread of contamination in and around the facility, eouipment,.or site..___
These records may be limited to instances when signif.icant_ contamination __
remains af ter any cleanuo orocedures or when there is' reasonable likeli.-
hood.that contaminants may have scread to inaccessible areas as in the._ _._..
case of possible seepage into porous materials such.as concrete.
These records must include any known information on identification of involved nuclides, cuantities, forms, and conbentrations.
(2) As-built drawings and modifications of structures.and equip-..
ment in high radiation areas and of locations of possible inaccessible __ ___
contamination such as buried pipes which may be subject to contamination.
If referencing such drawings, it is not necessary to index each individual relevant document.
If drawings are not available, the licensee shall substitute appropriate records of available information concerning these areas and locations.
34.
Section 70.38 is revised to read as follows:
S 70.38 Expira, tion and termination of licenses.
(a) Except as provided in'S 70.33(b) and paragraph ~[(d3(33] (e) ~
..n e -
.o.f.thi section, each specific license expires at the end of the day, in the month and year stated in the license.
(b) Each licensee shall notify the Commission [immediately]
promptly,. in writing under S 70.5, and request termination. of the license when the. licensee decides to terminate all activities involving materials authorized under the license.
This notification and request for termi-nation of the license must include the reports and information specified l'nparagr_aphs[(d3]_(d(1)(iv)and(v)ofthissection[-]andaplanfor completion of decommissioning if required by paragraph (c)(2) of this-.,
-r
- -- section or by license condition.
[The-iicensee-is-sobject-to-the.
~.:-- provisions-of paragraphs-(d3-and-(e)-of-this-section;-as-applicabie ]
.[(e3--No-iess-than-30-days-before-the expiration-date-specified-in
__....:7...
a specific-iicense--the-licensee-shaii either -
......... (43.-Sebmit-an application-for-iicense renewai-ender-9-30-377-or
.... (g3.. Notify-the-Eemmission;-in-writing onder-g-38-67-if-the-ficensee
. s, decides-not-to-renew-the-iicenser]
rva9Frvt W
Enclosure A
[7590-01]
[(d3 M (1)
If a licensee coes not submit an application.for license renewal unoer ! 70.33, the licensee shall on or before the expiration cate specified in the license--
(i) Terminate use of special nuclear material; (ii) kemove radioactive contamination to the extent practicable except for those procedures covered by paragraph (c)(2)(i) of this.
section;'
4
+.
(iii) Properly dispose of speciai. nuclear material; (iv) Submit a completed form NRC-314, which certifies information concerning the disposition of materials; and (v)
[Sebmit a radiation servey report-to-confirm-the absence-ef radioactive-materiais-or-to establish-the-ieveis of-residuai-radioactive contamination,] Conduct a radiation sur~vey of the premises where the licensed activities were carried out and submit a report of the results of this survey, unless the licensee demonstrates [the-absence-of-residual radicactive-contamination] that the premises are suitable for release for unrastricted use in some other manner.
The licensee.shall, as appropriate--
__. ___ _(A)__Repor.t_ level's of. radiation..in units of microrads - per-hour-of beta and gamma radiation at one centimater and gamma radiation at one meter from, surfaces, and report levels of radioactivity in uiits of dis-integrations per minute (or microcuries) per 100 square centimeters removable and fixed [en] for surfaces, microcuries per milliliter [in]
for water, and picocuries per gram for [in-contaminated] solids such as soils or concrete; and (B) Specify the survey instrument (s) used and certify that each instrument is properly calibrated and tested.
f(23--if-no residuai-radioactive-contamination-attributabie-to activities-conducted-ender-the-ficense-is-detected--the-ficensee-shall submit-a-certification-that no-detectabie-radioactive-contamination was found---if-the-information-submitted ender-this paragraph-and paragraphs (d3(13(iv3 and-(v3-of-this-section-is adequate--the-Eemmission-wiii notify-the-licensee-in-writing-that-the-iicense-is-terminated.
(3)(i3--if-detectable-leveis-of residuai-radioactive-contamination attributable-to-activities-conducted ander-the-ficense are-found--the 8/17/84 77 Enclosv.e A
[7590-01) iicense-continues-in-eff ect-beyond-the-expiration-datet-if-necess~aryf "
u with-respect-te possessien-of" esiduai-byproduct-material-present-as' ee ntemi n ati e n-entii-the-E e mmi s si e n-no ti f i e s-the-i i c e n s e e-i n-wri ti ng-tha t the-li cens e-i s - te mi nated--- Bu ri ng-thi s - ti me-- the-l i c ens e e-i s-s ub j e ct-te--
the provisiens-of paragraph-fe)-ef-this-sectien-
-~
(ii)--in-addition-to-the-information-submitted-ender paragraphs (d-)(1)(iv3-and-(v)-of-this-section-tAe-iicensee-shali-submit-a pian-for -
I de c o ntami n ati o n--i f-requi re d-- a s-r e g'ards-re si du ai-ra di o a cti v e-c o ntami n ati o remaining-at-the-time-the-iicense-expires-]
-~
^
l (2)(i) In addition to th'e information required under_ para-graohs (c)(1)(iv) and (v) of this section, the licensee shall_ submit _._..__
._ j a plan for completion of decommissioning if the procedures necessary__....
to carry out decommissioning have not been previously approved by the i
__ NRC, are extensive and could significantly increase potential health.._. _._._
workers or to the public such as in cases where --
_ __... _ _... _.. and safety impa workers w.d be entering areas not normally occupied where _.. _
(A) surface contamination and radiation levels are significantly higher than routinely encountered during operation; or
~~~----(BY 'procedur'e's could result fri significantly greater airborne __.,_ _____.__
~
~
il than are present during opera __.
... concentrations of radioactive mater a s tion; or procedures could result in significantly o'reater releases of (C) radioactive material to the environment than those associated with _ ___ _.
operation; or procedures would involve techniques not applied routinely.__ _ ___ _
g) during maintenance operations.
Procedures with potential health and safety impacts may not (ii) be carried out prior to approval of the decommissioning plan.
The proposed decommissioning plan, if required by paragraph (c) _1._
(iii)
(2)(i) of this section or by licensa condition, must include- _
Discussion of planned decommissioning activities; (A)
Description of methods used to assure protection of workers and (B) the environment against radiation hazards during decommissioning; __
A description of the planned final radiation survey; and _ _
(C) i
~-
[7590-Oi]
- (D) An updated detailed cost estimate for decommissioning, compari_. _ _ _.
son of that estimate with present funds set aside for decommissioning,.
-.. _.- and plan for assuring the availability of adeouate funds for completion of decommissioning.
(iv) The oroposed decommissioning plan will be approved by the Commission if the information therein demonstrates 'that the decommis-sioning will be completed as soon as is reasonable and that the health v.
, _ _, and safety of workers and the publiciwill be adequately. protected.
. _ _ _ _ _ _ {3) Upon approval of the decommissioning plan by the Commission, the licensee shall complete decommissioning in accordance with the approved plan.
As a final step in decommissioning, the licensee shall again submit.
i l,.
the infomation required in paragraph'(c)(1)(v) of this section and shall
.. _.. certify the disposition of accumulated wastes from decommissioning.
(d)
If the information submitted under paragraphs (c)(1)(v) or._.
-. _. _. _(c)(3) of this section does not adequately demonstrate that the premises are suitable for release for unrestricted use, the Commission will inform..
, the licensee of the appropriate further actions required for termination of. license.
_. ___(e) _[Each.ficensee who possesses-resideai-bypredact-material-ander p ara gr ap h-( d)(33-o f-thi s-s e c ti o n-- f oli ewi n g-the-expi rati on-date-s pe ci fi e d in-the-iicense shali--] Each specific license continues in effect beyond the expiration da'te if necessary with respect to possession of residual _______
special nuclear material present as contamination until the Commission
[
,[ notifies the licensee in writing that the license is terminated.
During _.
this time, the licensee shall--
(1);; Limit actions involving special nuclear material to those related to [ decontamination-and-other-activities reinted-to preparation-for release-for enrestricted-use] decommissioning; and
- (2) Continue to control entry to restricted areas until they are suitable for release for unrestricted use and the Commission notifies the licensee in writing that the license is terminated.
(f) Specific licenses will be terminated by written notice to the licensee when the Commission determines that--
(1)
Special nuclear material has been properly disposed; (2)
Reasonable effort has been made to eliminate residual radioactive contamination, if present, and 8/17/84
_ 79 Enclosure.A
[7590-01]
(3)(i) A radiation survey has been performed which demonstrate _s._ ____ _,_
. that the premises are suitable for release for unrestricted use; or_
(ii) Other information submitted by the licensee is sufficient to i _.
demonstrate that the premises are suitable for release for unrestricted..
use.
PART 72 - LICENSING REQUIREMENTS FOR THE STORAGE OF SPENTFUELINANINDEPENDENTSkENTFUELSTORAGEINSTALLATION 35.
The authority citation for Part 72 is revised to read as follows:
AUTHORITY:
Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 184,186,187,189, 68 Stat. 929, 93'0, 932, 933, 934, 935, 948, 953, 954,
~
955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 2077, 2092, 2095, 2099, 2111, 2201, 2232, 2233, 2234,~2236, 2237, 2239, 2282); sec. 274, Pub. L. P1-273, 73 Stat. 688, as amended by (42 U.S.C.
2021); secs. 201, as amended, 202, 206, Pub. L.93-438, 88 Stat. 1242, as amended,.1244, 1246 (42 U.S.C. 5841, 5842, 5846); Pub. L.95-601, sec. 10, 92 Stat. 2951 (42 U.S.C. 5851).
36.
Section 72.3 is amended by adding a new paragraph (y) to read as follows:
6 72.3 Definitions.
(y) " Decommission" means to remove (as a facility) safely.from
_ _,[
ervice and reduce residual radioactivity to a level-that. permits release of the property for unrestricted use and termination of license.
- 37.. Section 72.14 is amended by revising paragraph.(e)(3).to read as follows:
5'72.14 Contents of application:
General and financial:information.
I:
(e)***
(3)
Estimated [ shutdown-and] decommissioning costs,.and.the neces-sary financial arrangements to provide reasonable assurance; prior to V.3,
[7590-01) licensing that [shetoown--eecentamination--and] decommissioning will be carried out after the removal of spent fuel from storage.
~
38.
Section 72.18 is revised by revising paragraph (b) and adding a -
new paragraph (c) to read as follows:
5 72.18 Decommissioning plan, including financing af-a w
a a
(b) The decommissioning plan must contain information on how reason-able assurance vill be provided that funds will be available to decommission the ISFSI. ' This information must include a cost estimate for decommission- -_.
ing and a descriotion of the method of assurina funds _for. decommissioning including means of adjusting cost estimates and associated funding levels over the life of the ISFSI.
(c)
Financial assurance for decommissioning must be provided by one or more of the following methods:
~ ~.1...
(1) Prepayment.
Prepayment is the deposit prior to the start of operation into an account segregated from licensee assets and outside
. _the licensee's administrative control of cash or liquid _ assets that will retain their value over the projected operating life _of the ISFSI and that are in amount such that the principal plus accumulated earnings would be sufficient to pay decommissioning costs.
Prepayment may be in the fonn of a trust, escrow account, government fundmcertificate of deposit, or deposit of government securities.
(2) A surety method or insurance.
A surety method or insurance is a guarantee that decommissioning costs will be paid _should the..__..
licensee default.
A surety method may be in the form of'a surety bonds _.
letter of credit, line of credit, secured interest, or_other__ guarantee _......_ _..
method.
Any surety method or insurance used to provide. financial...___.
insurance for decommissioning must contain the following conditions: __._
(i) The surety or insurance must be open-ended or, if_ written _ for _...
a specified term, such as five years, must be renewed _ automatically ___.... _ _._.
unless 90 days or more prior to the renewal date, the__ issuer notifies the_.... _
Commission, the beneficiary, which shall be a Commiss_i_on-approved trustee,. _..
and the licensee of it.s intention not to renew.
The surety or insurance....
must also provide that the beneficiary may automatically _ collect prior to 8/17/84 81 Enclosure A
[7590-01) the expiration without proof of forteiture if the licensee. fails to providt_ __.
a.reolacement acceptable to tne Commission within 30_ days after. receipt of_.
notification of cancellation.
~
(.ii) The surety or insurance must remain in effect until.the Commis _____
sion has terminated the license.
(3) An external sinking fund in which deposits are made at least. _ __ _
annually, coup' led with a surety method or insurance,1the value of which.______..
__ __may decrease by the amount being acc'dmulated in the Sinking fund.
A n __ _..
external sinking fund is a fund established and maint.ained by the periodic deposit of a prescribed amount into an acco~unt segregated from __
_ _ _. _. licensee assets and outside the licensee's administrative control in which _
the total amount of the perio'dic dep'osits plus accum:ulated earnings. _. __._____
would be sufficient to pay decommissioning costs at the time termination _.......
-of operation is expected.
An external sinking fund may be in the form __..__...
______ of a trust, escrow account, government fund, certiff.cate of deposit, or.__ _
deposit of government securities.
(4)
In the case of Federal, State, or local government licensees
[cerkification that the appropriate" government entity ~ will be quarantor._ _.
of decommissioning funds.. _ - -..
._(5)
Other funding methods which are demonstrated by the applicant ____
or licensee to provide comparable assurance to methods listed in para-graphs (c)(1) through (3) of this section.
39.
In S 72.33 new paragraphs (b)(6) and (7) are added to read as
- follows:
$ 72.33 License conditions.
(b) Every license issued under this part shall be subject to the i fo11owing conditions, even if they are not explicitly stated therein:
4 (6) The licensee shall implement procedures for providing financial
~
assurance for decommissioning in accordance with the approved preliminary'___ _.
decommissioning plan.
(7) Each lice,see shall keep records of information important to ______,
__ _ _ _ _ _.. _the safe and effective decommissioning of the facility in a file explicitly. _
_, __ _ 8/17/84. _
_ _ _, 82 Enclosure. A.
~
. = _ - - -.
4 j
[759.
f l
for this purpose until the license is terminated by the Commission._._If.._
records of relevant information are kept for other Durposes. reference _.to_..
3 sucn records and their locations may be substituted. _Information the._.
. Commission considers imoortant to decommissioning consists.of _......._...
(i)
Records of spills or other unusual occurrences involving the. _
spread of contamination in and around the facility, equipment, or site....._
i These records may be limited to instances when significant contamination...
remains after any cleanup procedures *or when there is. reasonable likelihood g
-that contaminants may have spread to inaccessible areas _ as in~the case of 4
possible seepage into porous materials such as concrete._ These records...__ _ _.
must include any known information on identification 1of. involved nuclides,_
t 2._._..
quantities, forms, and concentrations.
As-built drawings and modifications of structurn and equip...._...
Q,i T Jh radiation areas and of locations of pos ible. inaccessible._..
s ment aion such as buried pipes which may be subject to contamination..
I
- contam,
. _..If referencing such drawings, it is not necessary to index each individual If drawings are not available, the licensee shall...._.
relevant document.
substitute approbriate records of available information concerning thesti.
l
_i 2__.
areas and locations.-
-ft__f.-
r _ _._ _. r - - -
A A
A A
A
~
40.
Section 72.38 is revised to read as follows:
5 72.38 Applications for termination of licenses.
(a) Any licensee may apply to the Commission for authority to.....
Thi s...
surrender a license voluntarily and to decommission the ISFSI.
_ application must be made within two years following permanent cessation of operations, and in no case later than one year prior to expiration of i
Each application for termination of license must be accom-
- g.. _
the license.
t.._.-.-_
panied, or preceded, by a proposed final decommissioning plan., _..__ ___ _
The proposed final decommissioning plan must include-(b)
The choice of the alternative 'for decommissioning with a.___ __ _.._.__.
(1) description of activities involved.
Alternative methods for decommis-sioning which significantly delay completion of decommissioning, such as use of a storage period, will be acceptable if sufficient benefit.
results; Enclosure A 83 8/17/84
[7590-01)
(2) A description of controls and limits on proceduras_andi J_. _ __ ^._
eouioment to orotect occuoational and public health and_ safe.tyl-t.-....._
(3) A description of the planned final radiation survey. Land' o__..___..
(4) An updated detailed cost estimate for the chosen _ alternative _.for_
decommissioning, comoarison of that estimate with present. funds _ set.aside 4
for decommissioning, and plan for assuring the availability.lof.. adequate.
funds for completion of decommissioning including meansiforf. adjusting _-
i_
3..._.._.
l cost estimates and associated fundind. levels over anvistorage or-
~ '
surveillance period.
(c) For final decommissioning plans in which the maior_ dismantle j _. _ _....
ment activities are delayed by first placing the ISFSLinistorageL -
planning for these delayed activities may be less detaileo. _ Updated __.____ _
- l..... _ _.
detailed plans must be submitted and approved prior touthe start of_
such activities.
(d)
If the final decommissioning plan demonstrates that the..___
~
decommissioning will be performed in accordance withithe regulations.
security or to the health and safety of the public, and after'*
in this chapter and will not be inimical to the common defense and-5
. -notice t'o-interested persons, the Commission will issue an order ~ ' '
~_
~~~'
authorizing the decommissioning.
(e) The Commission will terminate the license if'it determines l
that--
l C) The decommissioning has been performed in accordance with 3n approved final decommissioning plan and any conditions in the_otder authorizing decommissioning; and j
(2) The terminal radiation survey and associated documen'tation___
l demonstrates that the ISFSI and site are suitable for release for____ _
unrestricted use.
j Dated at Washington, D.C. this day of
- 1984~.'
l For the Nuclear Regulatory Commission.
i s
i Samuel J. Chilk, Secretary of the Commission.
i 8/17/84 84 Enclosure A
1 9
4 l
e o
O G
ENCLOSURE B
=
'a
==.-.
e - e
=*
l
, Regulatory Analysis
~
Amendments to 10 CFR Parts 30, 40, 50, 51, 70, and 77 Specifying Licensee-Responsibility and Procedures for Decommissioning a Nuclear Facility 1.
Statement of Problem The nuclear industry is maturing ar.d the number and ' complexity of facilities that will require decommissioning is expected to increase in the near future.
There are many aspects of facility activities that require consideration now -
with. respect to decommissioning.
These aspects are assurance of funding,
~
6
. facilitation considerations, recordkeeping, planning, and procedures for license termination.
Inadequate or untimely consideration of these decom-missioning elements could result in significant adverse health, safety, and i.
environmental impacts.
These impacts could lead to larger ~ occupational and
~
publi,c doses, larger amounts of radioactive waste to' be disposed of, prolif-l era 1 Hon of contaminated sites, and economic and sociopolitical pr'oblems for
~
~
j the states and Federal Government.
4 Current regulations as specified under 10 CFR Parts 30, 40, 50, 51, 70, and i
72 cover decommissioning in a limited, vague, or ina'pprcpriate way and are not fully adequate in dealing with licensee decommissioning requirements.
Many l
licensing' activities concerning decommissioning have been made on a case-by-
{
case basis in direct response to licensee's requests:to decommission and l
in current licensing hearing cases.
This procedure results in a lack of -
]
- uniformity of application, inefficiency on the part of the licensee ~ and NRC
-~
l in implementation, and finally a lack of timeliness 'and tomprehensiveness that affects proper application of the ALARA principle in carrying out NRC licensing responsibilities.
In the case of a few non-fuel-cycle licensees,
~
both a. lack of available funds to carry out decommissioning and improper
~
~
termination procedures have occurred.
~
In considering the current decommissioning needs of the nuclear industry, the
~
1ack of explicit enough regulatory guidance available, and the nonuniform, 8/17/84 1
Enclosure,_B - _ _
~ -. _
=_
i inefficient and noncomprehensive approach that case-by-case considerations ~can-result in, the staff recommends that more explicit rQ1es be proposedithat'would provide guidance to the licensee on careful, timely and comprehensive planning i
and. implementation of facility decommissioning.
Facilitation of-decommission-
)
. ing, while an important aspect to consider, will not'be included as'a' rule amendment requirement.
However, in keeping with the as~ low as is reasonably achievable (ALARA) concept, decommissioning facilitation should be used'to-implenient protection of health and safety..The rules would deal with require-i ments on financial assurance, planning, recordkeeping, and termination proce-dures.
Their implementation through the NRC licensing process would~ assurei' that decommissioning would be handled by the licensee in a.way that would
~
result in minimal or even negligible. impact on health, safety
..d the
~
j environment.
" Decommissioning" as defined in the proposed rule means'to remove safely from service and reduce residual radioactivity to a level that permits release of the property for unrestricted use and termination of' license by the NRC.
At -
the end of the useful life of a facility, decommissioning activities should be performed which will ultimately result in terminationtof the NRC-license.-
- -- t It is the responsibility of the NRC to ensure that these activities are l
performed by the licensee with minimal adverse impact on the health and safety of workers and the public, and on the environment.
A power reactor has potential for substantial health, safety, and environ-mental impact if decommissioning'is improperly performed.
This requires major regulatory consideration because of the large number of reactors (approximately 80 operating and 60 under construction), the quantity.and radiation level of radioactive materials, size and complexity of the structure, and^the proximity -
to populated areas.
Most fuel cycle facilities contain low intensity radio-
- active materials.
Most non-fuel-cycle facilities usually contain small amounts of very short-lived radioactive materials; a few contain Targe amcunts of very-low intensity materials.
There are also seve~ral fuel. cycle facilities such as scrap recovery, fuel fabrication, and ufs conversion plants that already have been or are being decommissioned.
Finally, there are approximately 20,000 non-
. fuel-cycle licensees (including Agreement State licensees) of which several hundred are decommissioned annually.
8/17/84 2
Enclosure B l
.Rianning for decommissioning and its proper implementation by the licensee at the. earliest practical stage of facility licensing can avoid many potential problems resulting from decommissioning.
In this regard concerns are that
,1) funds will be available for cecommissioning at the end of useful facility
(
, life becausa a lack of funds can affect a licensee's ability to select and complete an appropriate decommissioning alternative;7(2)ifacilitation, whili not a proposed rule requirement, is considered because this can lead to reduction
~
of oc,cupational and public dose, and reduction of waste ' volumes through'such' --
activities at the design, construction, operation, and actual decommissioning; (3) records are maintained during operation containing information impo tant to performance of eventual decommissioning; (4) planning is performed with details commensurate with complexity of the faciliti,' which could include
~
choice,of decommissioning alternative, procedures, schedules, work plans, and off-site radioactive waste accommodations and; (5) termination procedures-
~
are prescribed which besides administrative reporting aspects and approvals include termination survey plans, their reliability and-validation.
~
It has already been noted that the present rules do not adequately address all' the re, quired elements that a licensee must consider in dealing with decommis- - -
sioning.
Case-by-case licensing considerations are also inadequate because' they are inefficient and nonuniform.
The staff believes that amended rules backed up by regulatory guides will provide proper guidance to the licensees, --
Federal government, state and local agencies, and information for the general-public.
Moreover, the staff has assessed the impacts from decommissioning ~
through a_ comprehensive information base on the technology,-safety and costs of decommissioning nuclear facilities, numerous interactions with the states, '-
Industry, federal agencies, the general public, and development of a draft GEIS.
Based on these efforts, the staff reached the conclusion that'if
~-
guidance through rules is provided in essential areas relevant to decommis-sioning, then decommissioning can be accomplished with very small impact on the public and environment and in a cost effective way.-
The proposed rule, when implemented, would allow for reduction of 10 CFR Part 51 NEPA requirements, categorical exclusion of approval of a decommissioning
)
funding plan, and elimination of the mandatory requirement for an environmental impact statement at the time of decommissioning for 10 CFR Part 50 and 72 licenses.
8/17/84 3
Enclosure B
~ _ _. _._
Finaljy,itshouldbenotedthatresidualradioactivitylimitsforunrestricted use.are being addressed in a separate.rulemaking involving amendment:of 10 CFR -
Part 20.
2.
Obiectives The. staff focused on the following objectives in developing these-proposed rule
~
i~'
amendments:
t 2.1 Selection of the appropriate regulatory method for implementing decommissioning requirements.
^"
~
2.1.1 no change 2.1.2 amendment of licenses 2.1.3 provide additional guidance through regulatory guides
~
2.1.4 amendments of regulations in 10 CFR Parts 30, 40, 50',~51',
70, and 72 for clarification and specifications of require- '
ments for licensees on:
~
2.1.4.1 assurance of funds for decommissioning 2.1.4.2 facilitation of decommissioning 2.1.4.3 decommissioning plans 2.1.4.4 termination of license 2.2 Reduction of 10 CFR Part 51 NEPA requirements regarding decommissioning.
i i;
.2. 3 Consideration of the economic impact on licensees, especially~ ~
.3 small licensees.
U-2.4 Promulgation of regulatory requirements commensurate with the
^
~
Commission's responsibility for public health and safety.
^
8/17/84 4
Enclosure B
4 3.
Alternatives 1
1
- s
. 3.1--The alternatives considered in determining the-need fo'r regulation with respect to dec'ommissioning are as follows:
1.
No action 2.
Amendment of licenses
-~
3.
Use of only regulatory guides l
4.
Amendment of regulations and preparation of regulatofy guides 3.1.1 No change in regulations
..lt has.already been noted that decommissioning guidanc6:is needed in the areas
- l of. financial assurance, facilitation, planning, recordkeeping, and termination
-procedures.
Current requirements.are brief, non-sp6cific or limited such as' those-in: -(1) requirements in 10 CFR Part 50.82, Application for Termination
.of-License and in 10 CFR Part 72, Section 72.76, Criteria (for Dicommissioning,
~
an'd (2).recent amendments to 10,CFR Parts 30, 40, and 70 specif9ing licensee
-.... - -gesponsibility for nuclear materials and procedures fot termination of -- -< -
= '
.specified-licenses.
This situation requires'the licensee and the Commis'sion
- staff to work on a case-by-case basis in the development of information needed
-by the Commission for terminating a license.
Thus,:a time 19;' orderly, and '
comprehensive. management of licensee decommissioning:iction~may not be possible because of a-lack of guidance on decommissioning elemints'needing consideration.
- The: net result is that case-by-case treatment can result-in inefficient'and non-
- --uniform. actions by the licensee, the NRC and others t.uch'as-state, federal or
--+
public-involved parties.
Finally, it should be noted:that the Commission in
- 3 promulgating 10 CFR Part 50.54(w), which requires that~the: licensee ~have~onsite -
. property damage insurance to cover the cost of radi6 active contamination: clean Sup following-an accident (47 FR 13750), indicated in the Supplementary Informa-
- -. tion-that decommissioning financial requirements were not dealt:with and'new
^
-commission rulemaking in that area would include this consideration.
l 18/17/81 m
@;d awrn D
~
3.1.2 Amendment of licenses Amendment of licenses is an alternative available to cover decommissioning reouirements of licenses.
This alternative is already being used and requires specific actions for each licensee.
This can result in~ repetitive effort and t
. inefficient use of Commission and licensee staff time and could result in an inconsistent application of policy.
~
3.1.3 Provide additional guidance through regulatory guides
~
i Some of the specific elements of the proposed rule could reasonably be in the form of guidance.
However, the NRC position that the licensee provide decommissioning funding assurance could not be effectively accomplished in this way.
Even for those provisions which could conceivably be in the form of guidance, codification would provide a legal basis and assure more consistent '
application.
Regulatory guides are planned to support this rule which would provide guidance to licensees and licensing staff on~how these' requirements can b'e implemented.
3.1.4 Amendment of regulations
~
This is the recommended alternative.
Amendment of regulations and p~ reparation of supporting regulatory guides presents a regulatory method for clearly delineating explicit regulatory requirements in a way that-is comprehensive, l
uniform and efficient in dealing with the decommissioning of all nuclear l
facilities which are licensed or use licensed materials.
Requirements are '-
needed for all types of nuclear facilities except waste: disposal fa'cilties for e
. which. requirements are already in place.
These requirements could be as r'~
-. amendments to 10 CFR Parts 30, 40, 50, 70, and 72 involving clarification and l
addition to the existing rules as follows:
l l
3.1.4.1 Assurance of funds for decommissioning l
(
Licensees should provide reasonable assurance at all times during facility l
. life, including decommissioning, that adequate funds are available to ensure
-that decommissioning can be accomplished in a safe and timely manner.
Lack of -
l Enclosure B l
8/17/84
.6 L
funds can cause delay and may result in potential health, s'afety,- en'viron
~
d
- mental, and socio political problems..The licensee'should arrange to ass'ure that funds are available through one or more of the followin'g i~nstruments:
(1) Prepayment.
Prepayment is the deposit prior to the ~s~t'a~rt of opera-tion into an account segregated from licensee assets and outside-the licensee's control of cash or liquid assets that will retain their value over the projected operating life of the facility and that are in amount such that the principal plus accumulated earnings would be sufficient to pay decom missioning costs.
Prepayment may be in the form of a trust, escrow account, government' fund,' certificate of deposit, or depos.it 'of government securities'.
(2).Ex'ternal sinking fund.
An external sinking fund is a fund establi,shed and maintained by the periodic deposit of a prescribed amount into an account segregated.from licensee assets and outside the licen'see's'~ control in which the total amount of the periodic deposits plus accumulated earnings would be sufficient to pay decommissioning costs at the time-termi~ nation of operation is expected.
An external sinking fund may.be in the form of a trust, escrow account, government fund, certificate of deposit, or deposit of'g~overnment securities.
(3) Surety method or insurance.
A surety method or insurance is a
~
guarante.e that decommissioning costs will be paid should the licens'ee' default.
A surety method may be in the form of a surety bond, letter of' credit, line of
~~
~~
credit, secured interest, or other guarantee method. -
(4)
Internal reserve.
Internal reserve is a fund established and-
- ~
maintained by the periodic deposit or crediting of a prescribed amount into an:-
_ account or reserve which is not segregated from licensee assets -and is within
~
the licensee's control in which the total amount of the periodic deposits or funds reserved plus accumulated earnings would be sufficient to pay for -decom-r 3-missioning at the time termination of operation is expected.
This method niay use negative net salvage value depreciation in which funds are invested in
~
licensee assets, and at the end of facility life, bonds are issued against these assets and the funds raised are used to pay for decommissioning.
An 8SE86 7
Enclosure B
internal reserve may also be in the form of an interna 1'sinkirig fund which is
~
I similar to an external sinking fund except that the fund is held and invested by the licensee.
(5) Other methods.
The licensee might propose a different method, but should proivde information to demonstrate that the assurance provided would be comparable to that of other acceptable methods.
The amount and degree of assurance should be commensurate with potential
~
adverse impact that could occur if the licensee were ~ unable to decommission because of a lack of funds as well as other financial resources available to the licensee.
For example, for a utility with more than one power generat.ing station which is regulated by the State Public Utility Commission and collects
^
at established rates (and is protected by postacciderit decontamination insurance required by 10 CFR Part 50.54('w)) an internal reserve would constitute reasonable financial assurance; accident cleanup insurance for material facility-licensees f
is under consideration in a separate action and an advanced notice of proposed rulemaking is being developed.
For a non-fue1~-cycle facility (which is-a
"~
- privately owned business), insurance or bonding would be a reasonable /foHn~6f-funding assurance.
It is recommended that the rule specify acceptable methods for different categories of licensees (i.e., utilities vs. non-utilities).
In developing a rule that would assure that all facilities will be decommis-sioned in a safe and timely way, it is necessary to determine which licensees need to submit funding plans.
Various options determining which licensees
~
must provide financial assurance have been considered,- ranging from'only-those likely to hive very large decommissioning costs, such as those licensees
~~
presentlytrequired to submit radiological contingency plans, to a11' licensees.
~
~- -
To requir,e all licensees to submit funding plans would not be cost-effective;
~~
the health and safety of the public can be adequately protected by limiting the requirements to those licensees likely to have substantial-decommissioning costs.
If costs are low, lack of funds is less likeT9 to result in default or abandonment, and in cases where defaults do occur, the NRC or state regulatory agency can take over control in order to protect health and safety relatively easily..However... the historical record indicates that.relatively small licensees (that do-not require a radiological contingency plan) may default' and may~ have I
8/17/84 8
Enclosure B
- ~
i 1
l i
-the: potential;for a substantial contamination proble'm.
It is believed important
-..that some form of funding assurance be.provided by these licensees.
1
.The rule allows flexibility t'o ljcensees for providing such assurance to reduce
-,the impact and a data base has been developed to reduce the impact of making
. cost. estimates.
For power reactor applicants and licensees, for example, the l
rule would allow a certification of a prescribed amount of available funding; for;the non reactor licensees the rule would also allow a certification of
- prescribed. amounts of available funding for the majority of licensees based on
-the radioactive material possession limits allowed by their license.
Thus these licensees can be generically treated and would not be ' required to submit a decommissioning funding estimate.
However, all these licensees would have the option of submitting a funding estimate for approval, if a lower amount than is prescribed is anticipated.
All other applicants and licensees such as -
non power-reactor licensees (Part 50) and independent ' spent fuel-storage facility licensees (Part 72) as well as material licensees with potential for sub-stantial -decommissioning costs would be required to submit a decommissioning funding assurance plan consisting of a cost estimate and method of providing
- - -- --assurance.
All material licensees required to submit a -funding plan.could
- 7--
initially, prior to license renewal, submit a certification of'a prescribed amount.
Accordingtotheproposedrules, Parts 50and72liEenseesandapplicantswould, submit information concerning funding assurance in a decommissioning funding plan.
Material licensees with potential for substantial decommissioning costs would also be required to provide funding assurance.
3.1.4.2 Facilitation of decommissioning
~:
It_is recognized that planning for decommissioning at an early a stage of facility construction and operation is desirable.
This is expecially true of -
facilitation aspects (in particular, features ~that could reduce radiation
~~
doses -and waste volumes resulting from decommissioning).
Features that are -
reasonable in cost and effective in implementation can be more easily incor-porated at early stages.
However, at any stage of facility life, considera-tion of facilitation by the licensee is important, particularly if by its r.c]Lgc e
(ima5LcammJD
implementation, operational and decommissioriing cost 'savi~ngs can be obtainad.
. Implementation of facilitation considerations can result in lower radiation
~
doses as well as reduction of radioactive waste volumes during the actual l
decommissioning process.
No additional rule amendments are be~ing proposed
~
except certain recordkeeping requirements; all licensee ~s~should, howev'er,'
consider other ways of facilitating decommissioning in the'~ design and opera-
)
tions of the facility.
This is in keeping.with the "as low as is reasonably
. achievable" (ALARA) concept when implementing protection ~of-health and safety.
4 Keeping records of information which may be importantiat the tim'e'~of 'decommis-sioning-should.be required because it allows for more 'e~fficient and comprehen-9
~
sive decommissioning plannjng and can result in a reduction o~f impacts ~to
~~
health, safety, and economics during decommissioning.'i:In complying with this requirement, the licensee would keep records of infofniation (which could be a i
relatively simple reference file) containing materiai:important to safe and effective decommissioning such as unusual occurrences involving the' spread of
- contamination in and around the facility, as-built drawings and updates of any chandes,etc.
Other aspects of facilitation may be more affected by facilityt '
specific considerations, thus, no other specific procedu'res should~be req 0 ired-
~~'~
for all licensees.
i i
3.1.4.3 Decommissioning plans
~
Planning for decommissioning is necessary to ensure that all decommissioning activities are accomplished in a safe, timely, and efficient manner.
As mentioned above, financial, facilitation, and recordkeepi,ng considerations need to be addressed at licensing or as soon as possible for existing licensees.
I Licensees that require a plan are required to take into account financial and technical situation at the time of actual decommissioning.
The plans need to address:
~-
E
~
Discussion of planned decommissioning activities.
. - Description of methods used to assure protection of workers and the environment against radiation hazards during decommissioning.
A description of the planned final radiation survey. -
8/17/84 10 Enclosure B
.An updated detailed cost estimate for decommissioning, comparison of
-...-r that estimate with present funds set aside for decommissioning. and plan for assuring tne availability of adequate funds for completion of decommissioning.
It is expected, however, that operators of a large number of' simpler ~faciliti's!
e would be able to accomplish all or much of their decommissioning using-tech-
- niques the same as during routine operation and not need a decommissioning ~
i plan.
3.1.4.4 Termination of Licenses
~
~^
~
Explicit procedures and requirements _for a licensee to~ terminate a:1icense must be clearly delineated.
These include the licensee request to terminate a
-license and submittal and approval of plans including a-termination survey
. plan.
Surveys submitted for termination must be designed to demonstrate with a high degree of confidence that the property is suita'ble for' release for unrestricted use.
The plan including termination survey: details should'be commensurate with the type of facility and its potential for adverse effects'. '
____ Ear _many.non-fuel-cycle facilities, decommissioning could--involve 4ittle more than notification that the licensee wishes to terminate the license.
3.2 Reduction of 10 CFR Part 51 NEPA Requirements Approval of the decommissioning funding plan for Part 30, 40, 50, and 70 licenses does not change the nature or the scope of the licensed activity.
The principal purpose of these plans is the provide 'information to the
- Commission which will enable them to determine whether the licensees funding plans-for decommissioning are adequate.
These actions:in and of themselves do.
not have an environmental impact and therefore can be categorically excluded from 10 CFR Part 51 NEPA requirements.
~
If-proper consideration and implementation is'given to decommissioning elements -
.t.
(as specified in Section 2.1.3 of this document), the environmental impacts from decommissioning are expected to be small and elimination from 10 CFR Part 511of the mandatory requirement for an environmental impact statement 8/17/84 11 Enclosure B
(EIS) at-the time of decommissioning for Part 50 and 72 licenses is warranted.
Environmental assessments would still be required but these would not-necessarily lead to an EIS.
4.
Consecuences 4.1 Benefits and Costs 4.1.1 Benefits 4.1.1.1. NRC i-The proposed amendments to 10 CFR Parts 30, 40, 50, 51, 70, and 72 will-clarify and specify NRC requirements and licensee responsibilities for decom-missioning nuclear facilities. _The proposed rule amendments set.forth requirements and procedures the licensee must follow at.all licensing stages relating to decommissioning.
This will reduce uncertainties in the licensing process, reduce the need for the Commission to' request additional information '
from licensees, provide for uniform, comprehensive and efficient licensing implementation, and ensure that the application of the as low as reasonably achievable principle is. effectively considered in areas of health, safety, and the environment.
Finally, these amendments will allow for termination of licenses in as prompt a manner as possible.
4.1.1.2 Other Government and State Agencies
-The-rule will affect other Federal agencies if they are NRC licensees.- For agencies.1jcensed by the NRC the benefits are similar-to those for Industry.
The clarification of existing licensee responsibility, particularly in the areas of funding assurance and environmental impacts!will benefit espec.ially the-Federal. Energy Regulatory Commission, which regulates rates on interstate power, and the EPA, which regulates environmental factors affecting the public
.. sector and sets radiation standards.
Other agencies such as DOE and 000 will also benefit by having examples of decommissioning requirements to follow in the areas of planning and facilitation.
12 Enclosure B 8/17/84
l The; ru.le.wi.11 affect state agencies in providing for explicit licensee' require2N~~
, ments. particularly in the area of funding assurance; This requirement will s
t>en.efit,th,e states in allowing for uniform applicabil-fty and adequate planning ~
in.. rate collection requirements (especially for Public Vtility Commission rate- -
regulated reactors).
Moreover, planning and requirements for the termination
+'
I...
of.1icense will ensure that decommissionings will be performed as promptly~as M:P possib.le with minimal adverse impact on the state and ensure that'tNe' health' and. safety of the public and the environment are adequately protected.-.
4 4.1.1.3 Industry The proposed rule would require licensees to consider particulars'of compliance' in the areas.of funding assurance, planning, recordkeeping,'a'nd licainse termina'i tion procedures-including termination surveys.
Currently, regulations concernind ~ ~
decommissioning requirements are limited or vague.
Case-by-case ' action has "
l been used to effect licen' sing requirements.
The proposed amendments would'
]
allow licensees to satisfy decommissioning requirements, many of which<are D C' already required on an hoc basis, more efficiently and cost-effectively.
In:'t-situatio.ns. where additional-requirements would be imposed, such as iri: areas'of funding assurance, requirements have been kept to the' minimum that-ensures that i
health, safety, or the environment are not compromised.
Finally, an additional ~
benefit of these amendments is that licensee compliance would eliminate some 4
of the 10 CFR Part 51 requirements concerning decommissioning.
~
)
Amendments can be classified into two basic types:
type 1 - those which relate to the 1.icensing of any facility under 10 CFR Parts 50 ~and 72; ~ type 2 -
1
{
those-which relate to licensing possession and use of radioactive materials ~ast:
l in 10 CFR Parts 30, 40, and 70.
r- -
The majority of type 1 licenses are power and research and test reactors.
-: t-s Non-fuel-cycle facilities and fuel-cycle facilities, except fuel reprocessing 1-
~
-plants, fall into type 2 category.
There are' only a small number of fuel ni :
cycle facilities; however, there are approximately 20,000 non-fuel-cycle-facilities (including Agreement State licenses).
It is estimated'that' approx ~
j imately 43% of. these could be considered small entities under the criteria set-out.in the size standards by the Small Business Administration in 13'.CFR: -
i.-.
8/17/84 13 Enclosure B
[
Part 121 (e.g., for most licensees less than 500 employees, for hospitals less than 150 beds, and for other medical licensees less than 51.5~million annual gross receipts).
The benefits of the proposed rule requirements.for the major
~
decommissioning elements, using the classifications are:~
Funding Assurance - The regulations require as a condi. tion _of_ license either (1) a certification that the licensee has provided financial ~ assurance in the amount and methods prescribed in the rule or, (2) approval of a funding plan (with periodic update) requiring an estimate of decommissioning cost as well as a prescribed method for providing assurance.
For power reactor licensees,'
type 1, a rule prescribed amount for certification, $100 million, c'an' be used.
This amount is based on the most current information available and the exten-sive NRC data base developed in support of this rulemaking.
It is-not intended that the prescribed amount be exact but rather that it cover the bulk of the expected decommissioning cost within the context of reasonable funding assurance.
It is intended that as economic factorschange the amount R
will be appropriately u'pdated by an ammendment to the rul.
For research and test reactors there i.s a wide diversity of types and it is difficult to prescribe-a single meaningful certification amount.
It is also not likely for this situation as compared with power reactors, that licensees would choose a precribed certification amount.
For these reasons research and test reactors must submit funding plans.
Similarly, for these same reasons material licensees (type 2) having large potential for radioactive contamination would also be required to submit funding plans.
The majority of type 2 licensees are excepted from this requirement.
A wide latitude of methods for providing funding will be allowed within the bounds of reasonable assurance that funds will be avail-able to decommission the facility in a safe and timely manner (including provision for premature closure).
The funding assurance requirements allow the licensee to implement a method of funding with long lead time and during the time that the facility is operating so that funding requirements can be considered with other revenue requirements.
For type 1 licenses - reasonable assurance of funding capability allows utilities to use the internal reserve funding method in which the. collection of fees from the rategpayer can be invested in company assets.
Assuming such funds earn a reasonable rate of return then, the incremental cost'of such a funding method 8/17/84 14 Enclosure B
(compareo;to no rule) is zero.
This method of funding costs less' than other alternative choices such as external funds or prepayment, (by a factor of 2 or
- 3) Decause a utility can usually earn more investing in its own Essets.
For
~
example,. for an estimated decommissioning cost of $50 million for a modern day 1200 MWe PWR in 1979 dollars and which is assumed to operate for 30 years, internal reserve funding could result in a saving of $200 million.
For-the approximately 80 operating reactor plants and 60 undergoing construction, this could-result in an overall saving of $28 bil. lion.
Moreover, with respect to premature closure the reasonable assurance requirement takes into consideration the recently promulgated rule 10 CFR 50.54(w) that requires an electric utility to obtain onsite property damage insurance.
In egeparison to possible costs that would result from accident clea'nup, decommissioning costs are small (on order $50 million compared to as much as $1 billion).
It is expected that required on-site property damage insurance for such accident cleanup would allow a uti.11ty to remain financially solvent even in the case of an accident.
Thus a utility should have adequate financial resources to pay for the cost of decommissioning following accident cleanup.
An exception to the above is a single asset utility,-i.e.; one which owns only one generating facility, where external funding or other guarantee would be required.
While there could be some initial economic impact in meeting this requirement, there are only a few single asset utilities and so the overall impact is very small.
Moreover, the impact on the individual rate payer is also very small and estimated to result in an increase in rates over an inter-nal reserve. funding mechanism of no more than 0.2% of the consumer electrical usage rate.
Finally, recognition by the utility at -an early time of the
~
c.
necessity of including decommissioning costs into the rate base would further-
-i:- minimize overall economic impact.
For research and test reactors, most are
. :. federal or state owned or are part of large universities.
State or federal certification that funds for decommissioning-will be made available would be'
. c.:
r considered reasonable assurance for funding; knowledge of the funding require-t
--.n
. ment by appropriate agencies would allow for adequate budget planning.
For-
.- independent spent fuel installations, of which there~is one under Part 72 license, the funding assurance is essentially the same as that already required in 10 CFR Part 72.18(b).
~
8/17/84 15 Enclosure B
For type 2 licenses - the majority of type 2 licensees, while financially responsible for decommissioning costs,.are excepted from funding assurance requirements.
For the other licensees (about 1500 NRC licenses),some type of j
funding assurance is required., However, for many of those a certification that the licensee has provided financial assurance in the' amount and methods i
prescribed in the rule would be sufficient.
For the remainder (about 828 NRC licenses) a financial plan indicating amounts and methods of assurance for l
providing decommissioning funds would be required.
All sealed source users, j
except those using source material greater than 1010 appendix C values of 10 CFR Part 20 (10,000 Ci for Co-60 and 100,000 Ci for Cs-137) would be excepted.
Also excepted would be plated foils or-equivalent source' material j.
in a non-readily-dispersible form.
Moreover, all licensees with materials of l
half-lives not exceeding 120 days would also be excepted as would those l
licensees with possession limits less than or equal to 108 times the curie content specified in 10 CFR Part 20, Appendix C for Part 30, 40, and 70 licenses.
Thus the majority of small businesses would be excepted, especially hospitals which primarily possess short half-life radioactive materials.
Specification of a tiered system based on possession limits for fixed amounts of required financial assurance, aside from eliminating a majority of type 2' licensees-,
I having minimal risk, results in a more implementible ' system both for the licensee who does not have to provide the NRC with a decommissioning funding l
estimate as well as the NRC in the administration of the requirement to ensure
]
that the licensee has provided adequate financial assurance.
Moreover, for I
those licensees requiring a financ'ial assurance plan, the plan would only be required at li'ense renewal at which time it is much more efficient for the c
i j
licensee and staff to implement as part of the overall renewal effort. ~All j
affected licensees, including those requiring a funding plan at' renewal would have a-year from the date that the rule becomes effective to -acquire prescribed funding assurance.
Those licensees requiring a funding plan would provide to the NRC a funding certification for $500,000 until a funding plan was submitted at license renewal.
In general, funding assurance amounts:have been based on the PNL data base. Decommissioning a typical laboratory of a : facility in 1983 dollars is estimated to cost about $100,000 and this :is the requirement for those Part 30 and 70 licensees having possession limits greater than 1000 but less than or equal to 10,000 times the curie limits prescribed in 10 CFR Part 20 Appendix C.
For Part 40 licensees, this is also the prescribed amount
^
8/17/84 16 Enclosure B
Q for those licensees having source material limits greate^r' than 10'inti but less
- than.or eoual to 100 mci; for those Part 40 licensees having possession limits
~
. greater,than 100 mci a financial plan would be required.
Fo'r Part 30 and 70
. licensees having possession limits greater than 10,000 but less than 'or equal
, to 100,000 times the possession limit values of 10 CFR Part 20 Appendix C, the amount of assurance required would be $500,000 (the equivalent cost of decom~
missioning 5 major laboratories); for those above this limit a funding plan would be required.
All affected licensees who do not' require a funding plan may still submit one for approval if they feel the prescribed assurance costs are too'high. It is not expected that many would do thist however, because it is felt that the prescribed costs are reasonable. -If a ~ surety method were used for providing this assurance which costs about 1-2% 'an~nually of~the value of the surety, then this further reduces any incentive to su~bmit a funding plan, especially when it is recognized that the cost of the surety is a business expense and is tax deductible; depending on the size of-the -licensee such deduction would be in the 25-50% tax bracket.
Recordkeeping - The 1icensee is already required to Aeep_teggnis for various limited. times of such things as unusual occurrences involving the spread of~ ~
~
contamination and as-built drawings or other information which can affect operational health and safety.
Proposed rule requirements on recordkeeping could be satisfied by keeping a central updated reference file of already generated records that have potential for relevance to decommissioning such as instances when significant contamination remains after~any cleanup procedures or when.there is reasonable likelihood that contaminants may have spread to inaccessible areas as in the case of seepage into porous material such as concrete.
Relevant records must be kept until the facility is decommissioned.
This information could minimize radiation exposure as well as' greatly-reduce actual decommissioning costs.
Decommissioning experience has'shown that.a e_ lack of sufficient historical information can result.in increased dose to
- occupational workers, difficulty in planning and cost. estimating, inefficiency.
in the decommissioning process and delay in completing ' decommissioning.
Planning planning for decommissioning requires two main, phases because certain aspects of decommissioning should be considered early such as recordkeeping m
n m
and funding assurance; while other aspects concerning' actual decommissioning are best considered when decommissioning is imminent.
At this time, if decommissioning is complex and costig final planning'is'needed ttjat takes into account relevant technical and financial considerations at that~ time.
For type 1 licensees - besides the initial planning of recordkeeping and funding assurance final planning would be required.
Final planning is already required but only when the licensee desires to dismantle.
For a power reactor such planning would be elaborate because of the complexity of the facility being decommissioned.
Preparation of such a plan allows for a'more efficient and direct use of licensee time.
For type 2 licensees - as with type 1 licensees, aside from funding assurance and recordkeeping considerations, decommissioning plans may'be required at the time of decommissioning and would depend on the complexity of the decommissioning.
Such plan requirements have already been approved by some case-by-case licensing decisions.
For the large number of non-fuel-cycle licensees, plans would not be required because the decommissioning work could be performed prior to requesting license termination.-- All that might be required is a notification of a desire to terminate the license as well as a termination survey or other information that demonstrates that the facility is suitable for unrestricted use.
Termination Procedures - Specific requirements as to..how a.. licensee car) terminate a license including administrative procedures as well as technical requirements should result in efficient, less costly efforts.
Specifically in the technical area, requirements for the performance of acceptable termination-surveys can speed up the NRC termination of license.
For type 1 licensees - a survey plan would be required for NRC approval.
Proper implementation of this plan by the licensee would allow the NRC to terminate the license promptly.
For type 2 licensees - For some licensees, submittal of a final decommis-sioning plan would be required.
However, for most licensees only the results 8/17/84 18 Enclosure B
of. a termination survey or other information of an equivalent nature would be
- needed.
For the more complex facilities, or those where large areas need.to
- be surveyed, the licensee may choose to have a termination survey plan approved
- by the NRC prior to execution so that the license could be terminated whert the survey was properly implemented.
It should be _noted that specific criteria for residual radiation limits acceptable for terminating a license are being proposed in.10 CFR Part 20 in a separate rulemaking action.
Other Considerations - Mitigation of adverse envir.onmental. impact from_decom-missioning will occur provided that the proposed rule amendments are imple-mented.
Reduction of 10 CFR Part 51 requirements through categorical exclu-sion of the funding plan approval for type 1 licenses and the funding plan approval for. type 2 licenses as well as elimination of the mandatory requirement for an environmental impact statement for type 1 licenses is warranted and will eliminate some requirements for such considerations in environmental reports,' assessments and impact statements.
4.1.1.4 Public The requirements set forth in this proposed rule will minimize licensee decom-missioning im" pacts on health, safety and the environment.
Moreover, financial requirements will ensure that decommissioning is done as promptly as reasonable and that a non-operational facility does not become a public burden.
From a financial aspect, especially for power reactors, requirements.for funding m
assurance will minimize rate payer costs relating to. decommissioning. -
4.1.2 Costs
..The major cost impact of the proposed rule amendments is in the arer:of. funding assurance.
N For type 1 licensees - other cost impacts for existing licenses are associated with recordkeeping.
Also, at the end of facility life, the new requirements 8/17/84 19 Enclosure B
could add some additional requirements to what is presently required of licensees.
For type 2 licenses - other cost impacts are in the area of recordkeeping.
Also, at the end of facility life, for those licensees requiring a final plan, some additional requirements could be incorporated into the licensing require-ments beyond those incorporated into present licensing conditions, f
Detailed considerations of cost impact for the NRC, other government and state agencies, the industry, and the general public are presented in the remainder of this chapter.
General estimating data relative to interpreting results presented is the use of a 235 day work year (49-5 day weeks less 10 holidays) and a worker rate of
$40/hr which is aimed at the technical staff thought to be needed level for the majority of the required efforts described.
Thus a man year of effort results in a cost of $75,000.
4.1.2.1 NRC For type 1 licenses - the major resource impacts are estimated to occur within the first 2 to 5 years following promulgation of the final rule amendments during whien time decommissioning certification or funding plans would be required of all licensees (and would be submitted within 2 years from effective date of rule).
In 1984 there are approximately 80 operating power reactor licenses (and about 60 under construction 50% of which are 2/3 completed) and NRC review and approval of the operating license required funding plan will result in an esti-mated 6-day effort or a 3-day effort for certification.
For purposes of impact estimating it is assumed that 50% of the power reactors under construction,
.about 30, will be affected by this rule along with the already operating power reactors resulting in a total of 110 power reactors.
Use of regulatory guides on financial assurance has been assumed in this estimate.
Thus for all presently operating power reactors this results in about 1.4 to 2.8 man-years effort and a cost of about $105,000 to $210,000.
Estimating that this effort occurs over 8/17/84 20 Enclosure B
i 3 years results in an expenditure of about $35,000 to $70,000/yr.
Ther;e are-
~
also approximately 75 research and test reactors of varying size and compTexity.
Using an. average of 4 days of effort for review and approval of th~e fundin~g plan results,in an estimated effort of about 1 man year at--a cost of about '575,000 resulting in an annual cost of approximately $25,000 spread over 3 ye'ars.
W Thus the total effort is estimated as 2.4 to 3.8 man years at a cost of about
~
$180,000 to $285,000 or $60,000 to $95,000/ year over.3 years.-
Other impacts were estimated at the operating and decommissioning stages' but were all judged minor for the following reasoos:-
~"
(1): During reactor operations, total NRC staff requirements' are estimated at
-~
0.4 person year / year (about 1/2 day per facility) or $30,000/yr for ensuring that NRC approved plan requirements are bei~ng implemented.
(2) At the decommissioning stage, it is expected that there will be a con-
.sideratile spread in time when actual decommissionings take place and its '
---impact on an annual-basis-should be-small. - Decommissioning has to be reviewed even under existing regulations and overall administrative effort should be reduced at this time because of more specific require-
- ments.
Elimination of the mandatory requirement for an environmental impact statement will result in routine use of the simpler environmental assessment.
This is all that has been required in the past (prior to a recent revision to 10 CFR Part 51).
For type 2 licenses - the major resource impacts are estimated to cccur within "r
1 to 5 years following rule amendment finalization primarily from funding assurance requirements for existing material licenses that have not been excepted.
.It is estimated that a funding plan consisting of a cost estimate and a method of providing assurance will be required of'about 828 licenses.
Funding plans would be required at the time of license renews 1 (once every 5 years) and so efficiency of staff effort would be optimized.
Moreover, it is expected that funding plan updates at license renewal would be very minimal
'and woul.d primarily be based on considerations of inflation.
Thus, no cost is considered for NRC funding plan cost estimate update review at license renewal.
~
8/17/84 21 Enclosure B
Licensees that require a plan as well as those affected but not'requirin'ga plan would require a certification that funds have been assured'by prescribed methods and amounts specified in the rule.
This would require ljttle NRC
. staff effort.
It is estimated that staff effort in evaluating and approving of a funding plan would require about 6 man days on average resulting in about 21 man years at a cost of approximately $1.6 million spread over 5 years or
$320,000/yr.
Other impacts were estimated during plant operation a~nd decommissioning, but were all judged minor for the following reasons:
-i (1) During plant operation, NRC inspection staff req'uirements'are estimated as 0.9 person year / year (1/4 day per facility) or about $68,000~for assuring that rule amendment requirements are being implemented.
~
(2) At the decommissioning stage it.is estimated that there will be consider-able spread in time when actual decommissioning occurs.
It is also expected that except for the complex and costly facilities to decommis-
_sion,. primarily fuel cycle or large non-fuel cycle ones (of which there are only few), most licensees will complete decommissioning requirements prior to their request for license termination and all that will be required is confirmation that an acceptable termination survey had been done, or equivalent proof of acceptability, and residual radioactivity levels allow for unrestricted use of the facility and termination of license.
The requirement for a decommissioning plan is.already required in the recent amendments to 10 CFR Part 30, 40, and 70 specifying -
licensee responsibility for nuclear materials and procedures for termination of of specific licenses (48 FR 32324, July:15,'1983).
These amendments have been incorporated into the proposed rules to ensure uniformity of style as well as completeness.
A summary table of NRC manpower effort for type 1 and 2 licenses in terms of manpower and cost is presented in Attachment B.
8/17/84 22 Enclosure B
4.1.2.2 Other Government and State Agencies 1
- Oth.e.r stat.e or government agencies are not expected to be si'gnifitantly cost
)
n ; impacted.:,For state or Federal licensees, such as test'or research reactors;
~
f.unding assurance allowing for state or Federal agency' certification will
- 't l
- limit imp. acts and provide for a more efficient method' ~of fun' ding preparation.
~
j I.t is.e.s_ti. mated that 75% of research and test reactor licen~ 'esare federal or s
.. state owned and that funding plans plus recordkeepingVrequir~ements for the
,approximately $0 reactors would cost $75,000/yr over23 years (see sec-m -
tion 4.1.2.3, 3rd paragraph).
- 7 - :
j Agreement -states must maintain comparable requirements', and 'wi1T have' sfailar ~
- .impac.ts.a.s that to NRC to implement these requirement ~s.
Type 2 licensees only' t
are involved and a similar number are expected to beaffected.- Thus,-the l.
total impacts to all Agreement States would be simila'r to the impacts to NRC ~
associated with type 2 licensees.
I.;-'"-
' ~
4.1.2.3 Industry
" ' ~
]
For type 1 licenses - major impacts would be in the funding plan requirements l
and for recordkeeping.
For funding assurance plans an initial ~ cost e~ stimate l
is required together with a method for providing reasonable assuranc~e that '
such funds will be available for decommmissioning.
Licensees and applicants
]
l can base estimates of decommissioning costs on the Battelle Pacific Northwest i
Laboratory reports on technology, safety and costs for decommissioning as well as a regulatory guide.
The proposed amendments indicate that c~ollection of
't funds which can be kept in an internal reserve account provides reasonable u
assurance of availability of funds.
It is recognized that'some " phasing in" i
j time for power reactor funding assurance is required'for' existing operating reactor licensees because otherwise this could have an immediate capital. -.
l market resource impact.
Therefore, within the inter'pretation of : reasonable funding assurance, the NRC would recognize (for facilities where decommission--
)
ing costs would be $5 million or more) a period of 5 years 'or one-third of the i
l
- remainder of years until license expiration, whichever is greater, as the time
the licensee would have to make up funding costs in'an annual sinking fund l
8/17/84 23 Enclosure B
tnat would bring the fund to adequate current funding levels.
As part of the NRC's elimination of the requirement fo_r financial qualifications (47 FR 13750 Maren 1982) the Commission noted that requirements for decommissioning funding would be. included in proposed' rule amendments.
Use of the option of unsegregated internal reserve collected for this purpose with gradual phasing in of reserve amounts required over a 5 year or greater period minimizes any impact that might result from this requirement.
The majority of licensed test and research reactors are owned by the State, Federal Government, or large universities.
Reasonable funding for those not owned by the State or Federal Government would require a funding assurance method.
This could be in the form of, a bro'ad variety of alternatives prescribed in the rule but does not include internal reserve as in the case of a multi-asseted utility.
However in the most costly case, such as a surety, an annual cost of 1-2% of the face value of the surety would result (which for most would not exceed $20,000/yr) and could be reduced as funds are set aside in an external sinking fund to pay for the cost of decommissioning so long as the surety coverage plus accumulated funds are adequate.
It is estimated that a certification or funding plan as well as implementation of recordkeeping for power reactors would take about 14 to 22 days to develop (including 4 days on recordkeeping, 8 days on cost estimating, and 10 days on planimplementation).Thiswouldresultinaneffortfortheapproximately 110 operating reactors (includes 30 under construction) of about 6.6 to j
10.3 man years at a cost of approximately $495,000 to $773,000.
When spread over 3 years this would result in a cost of $188,000/yr.
For research and test l
l reactors, the funding plan as well as the recordkeeping effort is estimated at I
about 11 days on average resulting in a cost of about $3,700 per reactor.
Assuming 25% of these are industry owned, this would-result in a cost of
$75,000 which when spread over 3 years results in a relatively minor cost of.
$25,000/yr.
Other impacts were estimated at the operating and decommissioning stages but were all judged minor for the following reasons:
l (1) During the operational stage costs (primarily financial update) are j
estimated *as less than 0.5 person year / year ($38,000/yr) for the total industry.
8/17/84 24 Enclosure B t
..... ~..
(2) At the decommissioning stage, plans are already required. : Explicit requirements would make this process more efficient.
Moreover, it is
.. expected that such explicit requirements would allow for a.* simpler presentation of environinental report requirements resulting in some reduction in cost.
For type 2. licenses - major impacts would be in the funding assurance require-ments.
Details of the results presented here can be found in Attachment A.
A cost estimate for decommissioning and a method of providing assurance would be required of about 1656 such licensees; it was estimated that the number of NRC and state licenses are comparable.
Based on this,it is also estimated that an additional 252 licensees will require cert'ification of funding assurance of 5500,000 and about 468 others will require assurance of $100,000.
Also for affected large sealed sources licensees (about 602),-assurance of $50,000 will be required.
The proposed rule amendments allow as much flexibility as possibic for providing such assurance, in order to reduce the impacts.
It is likely that many licensees (especially small licensees) will choose a surety or other guarantee. method.
This is estimated to cost 1-2% of its face value annually.
_However,.this cost can be considered an operating business expense and is tax deductible, resulting in a saving of between about 25-50% depending on the size of the licensee.
If a surety method is used, then this is estimated to cost
$10.6 million annually ($1,500 to $5,000 per licensee).
Licensees requiring plans are expected to utilize other allowed funding methods such as external sinking funds which may reduce funding assurance costs.
It is also expected that many other licensees will use other allowable funding assurance methods, thereby reducing these estimated costs.
For small entities, it is expected that the majority will be excepted (especially for medical licensees) because
,of the. exception.for half-lives less than 120 days, most sealed sources, Part 301 and 70 licensees po,ssessing material less than or equal to 1000 Appendix C values of 10'CFR 20, and Part 40 licensees possessing source materials less than.or equal to 10 mC1.
For those small entities affected'(about 276 licenses)
, it is estimated that at worst the annual cost of maintainin0 sureties;istabout'
$560,000 annually ($1,500 for the majority of licensees).
These.small entities would be almost exclusively industrial licensees.
Historical information indi-cates that such small industrial licensees are the most likely to' default and it is particularly important that these licensees provide: financial assurance 8/17/84 25 Enclosure B
~
to ensure that health and safety will not be compromised because of a lack of funds to decommission.
For those licensees where a f'unding plan is required, it is estimated that the cost of developing such a plan based on a 12 day effort is about 85 man years.
at a cost of 56.4 million or spread over 5 years, $1.28 million/yr.
No cost is considered for funding plan cost estimate updates because this occurs at license renewal and efficiency of effort can be optimized.
Moreover, it is expected that this effort will be very minor and primarily pertain to con-sideration of inflation.
Other additional requirements such as recordkeeping considerations are expected to have minor impact and are considered to be consistent with good' practices.
No' plan is required and recordkeeping can be as simple as maintenance of a centralized reference file.
~
Impacts during operation or termination of license ar'e judged minor.
For the majority of licensees, decontamination and surveys can be conducted under the '
operating license and no plan will need to be submitted.
For those facilities which are complex and costly to decommission, detailed plans are already required., These requirements have recently been included in amendments to 10 CFR 30, 40, and 70 and have been incorporated into this proposed rule for uniformity and completeness.
4.1.2.4 Public The public, as user of electricity, has to pay for the cost of decommissioning as a routine cost and thus decommissioning costs in themselves do~not constitute a special impact.
However, major potential cost to the public~could come from a lack of financial assurance resulting in inadequate or nonexisting licensee
. decommissioning funds and lead to an inability to expediently deccmmission.
Such:a situation would result in a public burden.
Use of proper ~ practices through regulatory requirements would minimize this~ possibility as'well as tend to keep decommissioning costs to a minimum.
8/17/84 26 Enclosure B i
5.
Decision Rationale
____._l_
an assessment of the costs and benefits of the proposed amendmenfs le' ads to the conclusion that overall there will be a moderate increase in costs to the NRC,. State and Federal agencies, industry, and other licensees and an important increase in the effectiveness of decommissioning activities that will ensure that impacts on health, safety and the environment are minor.
Therefore, the proposed action is recommended.
No alternatives, other than rule amendments were judged to be satisfactory.
This decision is supported by both quantified
-cost data and a reasoned judgment on improvements to health, safety and the environment.
6.
Implementation (a) Schedule No implementation problems are anticipated.
The framework for implemen-tation is already established in the NRC, State and Federal agencies, and the industry.- Major impact-from initiating the rule has been minimized by allowing phase in time of requirements after rule finalization.
Fo'r stype 1 licensees, this is 2 years for submittal of a funding plan.
For type 2 licensees, financial assurance requirements become effective 1 year after.the rule becomes final.
For those licensees requiring a funding pl.an~, such plans are required to be submitted at the time of license renewal.
(b)
Relationship to Other Schedules It is intended that an FEIS on decommissioning be issued which will consider comments from these proposed amendments.
Issuance of final amendments will occur after the FEIS has been issued / No effect on other schedules is anticipated.
8/17/84 27 Enclosure B
r ATTACHMENT A Cost to A,ffected NRC Material Licenseest Total Cost * - Millions Number of of Dollars (2% of Surety Licenses less tax rebates)
Licensees requiring plans and/or certification for $500,000 828 4.1 Licensees requiring certification
~
for $500,000 126 0.63 Total 4.7
' Licensees requiring certification 234 0.~ 35 '
of $100,000 Sealed Source licensees requiring certification of $50,000 301 0.23 Overall' 5.3 "For licensees requiring $500,000 certification or more use 50% tax bracket.
~--- For licensees requiring $100,000 or less use 25% tax bracket.
. " ~
tit is estimated that Agreement State licensees are equal in number and that Agreement States would have equal costs.
Estimate that the number of Agreement State licensees are equal in number and thus overall cost impact is doubled.
Therefore, surety cost for all affected licensees would be 2 x $5.3 million or about $10.6 million annually.
For small businesses, it is estimated that 50% of the-licenses' requiring L
$100,000 certification plus 10% of those requiring $500,000 certificition plus 1% o.f those requiring a plan are affected.
This results 'in about-138 affected!
NRC small. business licenses and a surety cost of 1% of 4.1 million plus 10%*
1 of $0.63 million plus 50% of $0.35 million or about $0.28 million/yr.
- Thus, doubling these numbers results in an estimated total'of small business licenses' of 276 at an annual cost of $0.56 million.
8/17/84 28 Enclosure B
ATTACHMENT B Effect and Cost of Proposed Rules to NRC
' Manpower Cost Duration License Tyce NRC Office (man-year)
(thousands /yr)
(years)
Part 50 and 72 NRR 0.7 18 3
(certification) 2.5 (plan) 63 SP 1.7 43 3
(certification) 1.3 (plan) 33 Regions 0.15 operating 12.'5 over period life of reactor of license SP 0.15 operating 12.5 over period life of reactor of license NMSS negligible Part 30,'40,
.. _ _...___ _ _ a n d_7 0_. __ _ __. _ _.
NMSS or Regions 4.2 funding 320 5
plan Regions 0.9 operating 68 over period life of facility of license Enclosure B 8/17/84 29
e 8
0 e
O O
O ENCLOSURE C
__~.-
8e 0
e i
I
{
Am o
DRAFT CONGRESSIONAL LETTER
Dear Mr. Chairman:
Enclosed for your information is a copy of a Notice of Proposed Rulemaking
~
pertaining to decommissioning of nuclear facilit1es.
The proposed, rule sets forth financial and technical criteria for the decommissioning of licensed facilities and is a result of a reevaluation of the Commission's decommissioning policy.
An Advance Notice of Proposed Rulemaking was published on March 13,1978 (43 FR 103/0) announcing that the Commission was reevaluating its decommissioning policy. A Draft Generic Environmental Impact Statement (GEIS) was. published, and a notice published _ announcing its availability for public comment on February 10,1981 (46 FR 11666).
This proposed rule is based on an extensive data base which has been developed as part of the reevaluation and considers comments received on the Advance Notice, GEIS and discussions with the states at 5 workshops.
The proposed rule defines decommissioning as always leading to unrestricted use of property.
The proposed rule would require that financial assurance for decommis-sioning be provided by reactor licensees and other licensees with potential for major decommissioning costs. A number of alternative methods of providing this assurance would be allowed.
Enclosure C e
The proposed rule would also require that appropriate records be kept to be sure adequate information is available at the time of decommissioning.
More specific criteria for planning for decommissioning are also provided.
The enclosed Federal Register Notice allows 90 days for public comment.
Also enclosed is a copy of a public announcement that will be released by the Commission in the next few days.
Sincerely, Robert 8. Minogue,' Director Office of Nuclear Regulatory Research Enclosur'es: As stated O
a Enclosure C
h m..
4 o
S e
o e
ENCLOSURE D 9
1._
e'
Draft Public Announcement NRC PROPUSES DECOMMISSIONING CRITERIA i
.The Nuclear Regulatory Commission is proposing to amend its regulations to include technical and financial criteria for decommissioning licensed nuclear facilities.
The existing regulations cover decommissioning requirements only in a limited way.
As proposed, the decommissioning guidance would deal with planning needs, timing, funding mechanisms and environmental review requirements.
If adopted, the rules would assure that licensed nuclear facilities would be decommissioned in a safe and timely manner add that adequate funds would be available for decommissioning purposes.
The proposed amendments would apply to all NRC licensees except licensees for low-level radioactive waste burial facilities and high-level radioactive waste repositories which have been addressed in separate regulatory actions.
The proposed rule defines decommissioning as removing from service and reducing residual radioactivity to a level that would permit release of the property for unrestricted use and termination of license.
1 1
Three acceptable decommissioning alternatives are contemplated but not sp@cified'in the proposed rules.
They are:
Enclosure D
2 DECON:
under this alternative, equipment, structures, and portions of the site contaminated with radioactivity would be removed or decontaminated to a level which would permit the property to be released for unrestricted use shortly after operations have been terminated.
It would satisfy the objective of unrestricted release of the property in a much shorter time period than the other' alternatives while protecting the health and safety of workers and members of the public.
SAFSTOR:
under this alternative, the nuclear facility would be placed and maintained in such a condition that it could be safely stored and d2 contaminated to levels which would permit release for unrestricted use at a--later date. -It-would-be an-acceptable alternative-if-radiation doses to w3rkers involved in the decommissioning process would be reduced significantly or in cases where almost all of the radioactivity would decay within a few months or years.
It could also become necessary in other cases such as if there were a shortage of offsite radioactive waste disposal space.
ENTOM8:
under this alternative, radioactive materials would be encased in a structurally long-lived material such as concrete and the structure would b2 raaintained and surveyed until the radioactivity had decayed to a level per-f mitting the unrestricted release of the property.
This alternative could reduce radiation doses to workers as well as the volume of radioactive waste but would be expected to be little used because of practical considerations.
Enclosure D
~
3 The proposed rules would require that decommissioning begin shortly after nuclear facility operations have been terminated and that the time to reach unrestricted use be minimized.
As proposed, planning for decommissioning would be divided into two parts:
preliminary and final.
Preliminary aspects of planning are financia,1 planning and facilitation of decommissioning. Current license holders and applicants for new licenses would have to submit either funding plans or certification of financial assurance in amounts specified in the proposed rules.
Funding plans would have to include a
~
cost estimate an'd means of providing financial assurance for decommissioning.._ _ ___.
Generally, facilitation of decommissioning should be considered under the principle of keeping exposures t'o radiation as low as reasonably acnievable; the rule would require specifically only that relevant records be kept to assure adequate information is available at the time of decommissioning.
Final planning would involve the submission of decommissioning plans for review and approval in advance of initiation of any major decommissioning activity where a significant health and safety question could be involved.
These final plans would have to include as appropriate:
Enclosure D
~
(1) a description of decommissioning procedures to be used including plans for processing and disposing of the radioactive waste; (2) a description of methods used to ensure the safety of workers and members of the public; (3) a plan for a final radiation survey to ensure that the property is suitable for release for unrestricted use; and (4) a cost estimate to ensure that adequate funds would be available before decommissioning ' activities weh' initiated.
A number of alternative methods for assuring that funds for decommissioning--
either prematurely or at the end of operations--would be available are set forth in the proposed rules.
They include:
Enclosure D L
o 5
(1) Prepayment--under this alternative, funds would be set aside, prior to commencement of operations, in an account segregated from other licensee funds.
(2) Surety or iniurance--this alternative involves a method to guarantee that decommissioning costs will be paid should the licensee default.
(3) External sinking fund--under this alternative, funds would be set aside periodically over the life of the facility in an account segregated from other licensee funds. This segregated account would be coupled with a surety guaranteeing funds for decommissioning in the event of licensee default unless the licensee is an electric utility.
(4) Internal reserve--under this alternative, allowed only for utilities, funds would be set aside periodically over the life of the facility in an account which would be part of or invested in licensee assets.
(5) Federal, state, or local certification of the availability of funds for decommissioning.
(6) Other funding methods which an applicant could demonstrate would provide comparable assurance to the other alternatives.
If adopted, the new requirements would reduce the specific requirements for environmental reviews related to decommissioning by:
Enclosure D
6 (1) Providing that the decommissioning of reactors and certain materials facilities would no longer require environmental impact statements unless specifically determined by the Commission; environmental assessments would be prepared, however.
(2) Providing that information concerning environmental impacts would be submitted by licensees as a supplement to previously developed environmental reports.
(3) Providing that approval of funding plans would be a categorical exclusion (a category of action which does not individually or cumulatively have a significant effec't on the human environment and no environmental review is required).
Writt'en comments on the proposed decommissioning criteria, written as amendments to Parts 30, 40, 50, 51, 70 and 72 of the NRC's regulations, should be submitted by (date)
They should be addressed to the Secretary of the Commission, Nuclear Regulatory Commission, Washington, DC 20555, Attention:
Docketing and Service Branch.
Enclosure D T
I
-i
\\
y-SEac/%\\\\Em m
~
g e "*
UNITED STATES t
NUCLEAR REGULATORY COMMISSION g
WASHINGTON. D. C. 20555 y
a t'.....f JUN 18 B84
~
i MEMORANDUM FOR:
Chairman Palladino Commissioner Gilinsky Commissioner Roberts Commissioner Asselstine Corsnissioner Bernthal FROM:
William J. Dircks Executive Director for Operations
SUBJECT:
TRANSMITTAL OF DOCUMENT REQUESTED AT COMMISSION BRIEFING ON JUNE 11, 1984 At the Commission briefing In decommissioning rulemaking presented by the Office of Nuclear Regulatory Research on June 11, 1984, it was requested that ycu be provided with c5' pies of an RES contractor report referred to in the briefing.
This document, entitled "The Impact of NRC Estimates of Decomissioning Costs on Ratepayers and the Regulatory Process" by
~Dr. J. Siegel, the Wharton School, University of Pennsylvania, is enclosed for your information.
(Signed) Jack W. Roe
[NilliamJ.Dircks
' Executive Director for Operations
(
Enclosure:
as stated l
cc:
General Cornsel Director, Policy Evaluation
~
>0ffice of the Secretary l
of the. Commission 6
l sp c-k l
1 e.
o 1
1 i
THE IMPACT OF NRC ESTIMATES OF DECOMMISSIONING COSTS ON RATEPAYERS AND THE REGULATORY PROCESS Prepared for:
Chemical Engineering Branch Office of Nuclear Regulatory Research by Jeremy J. Siegel' Ph.D.
Associate Professor of Finance The Wharton School University of Pennsylvania i
i May 14, 1984 l
l l
The listing of the Wharton School and the University of Pennsylvania is for identification purposes only.
Neither the School nor the University has passed any judgements
~
on the merits of this research.
l Engineering and Economics Research, Inc.
1951 Kidwell Drive Vienna, VA 22180 Tel:
(703) 893-8600
\\eG Q(m J'
%\\nSW
The Nuclear Regulatory Commission (NRC) is developing s set of rules pertaining to the decommissioning of nuclear powet plants.
These rules could require that licensees either set aside a
prescribed amount of funds, or permit licensees to make facility specific cost estimates.
Either of these approaches would require i
collection of funds over the operating life of the facility in either an external or internal account, unless the total costs were borne solely at the time of decommissioning.
I have been requested by the NRC to evaluate these two approaches and include the following considerations:
4 f
o The potential impact, on the utility and the ratepayer in dollars of the two different approaches; o The impact on the ratepayer, both from a financial and an equity standpoint, if the NRC prescribed amount turns out to be different from the actual costs incurred at the time of j
decommissioning; o The potential infringement of the NRC regulation on the normal functioning of the public utility commissions, and other impacts on the ratemaking process; and o Summary and opinion based on the,above analysis.
1
e 1.
Differential lapact of NRC versus Utility Specific Cost Estimates There are essentially three effects of misestianting the true costs of decommissioning.
The first directly involves the timing of the collections of revenues through time by the utility from the rate-payer to generate either an external or internal fund for decommis-1 sioning.
The timing influences whether early users, i.e., those who purchase electricity in the early part of the plant's life, bear a greater or lesser burden than late users.
There is even some possi-bility that those who use electricity after the plant has been decommissioned will be influenced by this policy.
I shall refer to this group as the "after-users".
The second effect of differential estimates involves the effect on the,-cos t of capital is passed through to the ratepayer, this will also influence the timing and dis-tribution of the burden on the early and late users.
The third effect stems from the difference in tax treatment resulting from the dif ferential estimates.
As long as the real costs of decommissioning above involve a distributional effect between the ratepayers, the utility" and the government.
A.
Timing of collections from ratepayer i
The influence of a larger than needed decommissioning allocation on the relative burden among ratepayers is generally to increase the
-relative burden on early users and decrease the burden on late or af ter-users.
This will be particularly true in the NRC estimate of the cost eventually converges to the utilities' cost estinate over time.
If this occurs, early collections will be excessive and must be offset by smaller later collections of funds.
If the NRC cost 2
estimate alvsys remains above the utilities' cost e s tima te by the same percentage, then all generations of users will experience an increase in their burden.
When the true cost of decommissiening is revealed, the utility m2st undertake refunds, a situation which will be discussed in Section II below.
The Appendix illustrates the effects on the funds collected by the utility under various assumptions.
If decommissioning costs are rising at 10% per year, while general inflation is rising at 8% per year, a $120 million current cost estimate will have a real value of
$208.1 million at the end of 30 years.
He most equitable way to fund this cost is for ratepayers to pay into a fund $5.13 million per year, escalated each year by 8%, the rate of inflation, so that the real costs of contribution remain unchanged.
This involves an equal burden between early, ratepayers.
If this method were and late chosen, then an overestimate by the NRC would raise the burden equally among r.11 ratepayers, except that the stun left over af ter decommissioning would have to be distributed.
Unfortunately, the above method of, allocating costs is not fre-
.quently used by utilities in calculating decommissioning funding.
Instead, a future cost net negative salvage value method is used.
This method involves the use of level dollar f unding, which amount to annual contribution of $12.73 million.
His means that the early users will pay 248% of the ideal funding requirements while late users will pay as little as 24.7% of their ideal funding require-ments.
If the future cost net negative salvage value method is used, then an NRC overestimate of the true cos'ts will worsen the relative imbalance between early and late users.
If the future cost method 3
l were used, based on $120 million, while the true current costs of decommissiong were only $100 million, then early ratepayers would pay 297% of the ideal burden while late ratepsyers would pay on1y 29.6%
of the true burden.
In other words, early ratepayers' burden would rise under NRC estimates by 49 percentage points while late rate-payers' burden would rise by only 5 percentage points.
Therefore an NRC provided overestimate would worsen the distributional conse-t quences among ratepayers.
If the Public Utility Commission (PUC) permitted a collection procedure which required lower than ideal early collections and higher than ideal late collections, and NRC overestiaste of decom-missioning costs would tend,.to of fset this bias.
This type of situation could develop if the costs of decommissioning increased at a rate f ar more rapidly than expected, so that early contributions were actually insufficient to cover the actual costs as later experienced.
In this case an " overestimate" by the NRC acutally is closer to the true costs of decommissioning.
B.
Impact on the Cost of Capital f
In general, the impact of a higher than true estiaste of the costs of decommissioning is influenced by whether the funding is done internally or externally.
If the PDC (or the NRC) requires that fund-
- ing be external, and maintained in very high grade taxable government or corporate bonds, then the effect of a higher NRC estimate would be to lower the average rate of return to capital for the utility. This occurs since the borrowing rate of utilities (particularly today for those with high nuclear power plant exposure) is higher than the rate 4
of return earned on the assets invested in the decommissioning fund.
The establishment of an external decommissioning fund actually redis-tributes the overall return of the utility away from the junior bond-holders and equity holders and towards the senior bondholders.
In the event of bankruptcy, the senior bondholders are now more secure than they would have been otherwise, and the price of their bonds would rise in the market.
Since the difference between the long-term gove rnment bond rate and the rate of Baa (Moody rated) utilities is i
i now almost 2%, this amount could become significant as the decommis-sioning fund accumulates through time.
In fact, in the final year of the fund, the differential interest re t' urn would be about $4.2 million (2% of the real cost,.of decommi,ssioning) which is 82% of the amount collected in the final year.
If funding is accomplished internally, so that the revenue i
inflow from ratepayers is used to retire existing utility debt or borrow less than otherwise, the problem of dif ferential yields does not arise.
Of course in this situation the NRC does not have the same degree of as'surance that funds will be available for decommis-sioning in the event of the utilities' bankruptcy.
I believe that
' the possibility of insufficient decommissioning funds is extraordi-narily unlikely, particularly for large ongoing utilities which have other assets. However, this question involves issues that are beyond the scope of this study.
If external funding is required, then the relative burden of f
collections for the fund. would depend on the type of collection pro-cedure used by the utility, as outlined above.
If, in our example, the utility were able to invest in 12% securities instead of 10%
5
securities, the ideal yearly burden would f all to $3.71 million f rom
$5.13 million.
If calculeted properly, the reduction in the annual collections would be proportional to the ideal collection pattern, so that the relative burden on ratepayers remains unchanged.
Howeve r,
if the future cost net negative salvage value procedure is chosen, then allowing the utility to invest in higher interest bonds would decrease the yearly nominal payments to $8.68 million, or 32%. This would decrease the relative burden of the early users, although they would still shoulder a greater burden than from the ideal collection procedure.
This occurs because any collection plan that involves a constant dollar collection will mean less real dollars in the later years than earlier years.
If,, the utility is permitted to invest in higher yielding securities (which would occur in the funding was done internally) then the reduction in annual collections would aman more i
real dollars to the early users than the late users.
However, as already cited, a higher than actual cost estiaste by the NRC auto-natically means a greater relative burden for the early users in the case of future cost net negative salvage value accounting.
There-fore, internal funding will only partially of fset this extra burden imposed by the higher NRC estieste.
C.
Tax lapacts Some of the above results concerning the costs of external and internal funding may be reversed when tax considerations are included.
If the utility is allowed to invest its external decommis-sioning fund in tax-exempt securities, then this may offer a better return than can be obtained from internal funding.
For example, if 6
i
~
l the debt costs of the utility are 16%, a utility in the 50% marginal 1
tax bracket has a net debt cost of only 8%.
If tax-exempt securities are available with a 10% yield, than this is a preferable investment.
This occurs because the utility is essentially performing " tax arbi-1 trage,"
i.e.,
borrow with tax deductible interest to buy tax-free securities.
This is prohibited by the Internal Revenue Service for individuals, but may not be for utilities for the purpose of establishing a decommissioning fund.
Under current IRS regulations, decommissioning costs can only be expensed by the utility at the time they physically occur.
Up to that time, the income received by the utility from the ratepayers is taxable. Although some have observed that this requires nearly $2 of ratepayer contribution for every one dollar of net revenue' collected into the decommissioning fund, this is wrong since it ignores that total costs of decommissioning are deductible to the utility at the time they occur.
Therefore, a $2 decommissioning expense costs the utility only one dollar.
The true costs of the IRS method of tax treatment depends on two consideration.s:
(1) the extent to which individuals receive a greater af ter-tax return than the utility, and (2) the extent to which the utility can utilize the full tax benefit of the decommissioning costs at the time they occur.
I In respect to (1) above, one must determine whether the individ-ual is in a lower marginal tax bracket than the utility. Since this
{
will' in general, be true, an individual can accumulate funds, for l
the same level of risk.. at a greater rate than can the utility.
In 1
l our example above, if an individual is in the 30% marginal tax i
l bracket, if he invests in a 16% utility bond, he will receive an 11.2 l
l 7
w - -.,
-4,-
,,,,e
,y n---
-,,,.,.,-,-,,,.,,.,,,.,,,w,.
,pyg,w-,,.,_.my p
,__, ~ _,.
,_-,,,,,m,y,-e o--mm
after-tax rate of return.
If one assines that the utility chooses i
external f unding, so that it invests in 10% tax-fre< securities, the individual will accumulate his investment at a rate 1.2% above the rate for the utility.
Using our example in the Appendix, this means that ratepayers would have to contribute at a rate of only $4.23 i
million per year, in real te rms, or about 17 1/2% below the rate required by the utility.
Point (2) above can only be answered by knowing the taxable income of the utility at the time of decommissioning.
If the utili-ties' net income is less than the decommissioning cost, then the tax i
loss may be carried forward, but under these circumstances the as well as not utility will lose interest es,rned on the tax benefit,
]
enjoy the full maximum tax benefit (due to graduated rates) of the deduction that can be taken at the time of decommissioning.
In general, it can be concluded that current tax law discriai-i l
notes against the collection (either internal or external) of a l
decommissioning fund.
This causes more taxes to be paid to the federal government than would occur if the costs were just collected at the time of decommissioning.
Therefore, an NRC overestimate of the decommissioning costs would cause increased taxes to the utility, which will eventually be passed on to the ratepayer.
This is, how-ever, a complicated question involving assumptions about the marginal tax rates of individuals and utilities, as well as the taxable and tax-exempt yields available to both these groups.
Further study of this problem is certainly warranted.
8
i 1
i D.
Summary From the above discussion, it is clear that a higher decommis-sioning fund will probably raise the costs to both the ra'tepayers, especially the estly users, and to the utility, which will seek to pass these costs on to the ratepayers.
Despite this, it is probable i
that the utility will seek the largest possible decommissioning fund to be approved by the PUC.
The reason for this is that if the actual 4
costs of decommissioning turn out to be greater than estimated, the PDC may not allow the utility to recover the difference.
This would j
occur for two reasons.
First, if actual costs exceeded estimates, the utility could be challenged that it d'id tot decommission in the most cost-effective manner,,.a charge.,-if substantiated, would not permit recovery from the ratepayer.
Furthermore, even if decommis-i j
sioning were cost-effective, it may be politically impossible for the utility to backcharge earlier users or surcharge af ter-users for the i
difference.
The utility would greatly prefer to be in the position of overestiasting costs and then remitting refunds at some future date.
Of course, if there were competition in the distribution of i
electricity, then it. would be in the interest of the utility to collect the lowest feasible decommissioning funding from its custo-l l
mers, so as to increase its customer base.
However, under current i
l ratemaking procedures, the considerations analysed above would indicate that the utility would prefer to overcharge early customers I
i than risk never collecting the difference.
II.
Effects of Fund Balance Differing from Decommissioning Costs If the actual costs of decommissioning turn out to be less than p
l 9
l
\\
those estimated by the NRC, then the public utility commissions will demand that the dif ference be refunded to the customers.
How this is done will depend on circumstances.
Ideally, the refund would be made to all customers who have used electricity from the date the nuclear reactor was commissioned, but this is administratively impossible.
The next choice would be to search back as f ar as practical, say a year or two, and refund late users.
In practice, some refunds would probably be made to individuals who have not used power produced by the nuclear plant.
These after-users would get a benefit, even though they any not have shared any of the costs of providing such i
energy.
If the NRC estimate turned out.to.be less than the actual decoe-missioning costs, then the utility will seek to recover the dif fer-ence from the ratepayer.
It would be very difficult, if not politi-cally infeasible, to collect the difference from past ratepayers since many of them any have left the area.
Therefore the collection would have to be attempted from the af ter-user group, who any very well object since they did not share in any of the benefits of the plant.
As mentioned above, this may be one reason why utilities may choose the highest decommissioning cost estimate possible, to avoid the possibility that they any never be able to collect the defi-ciency.
In fact, unless the NRC estimates were carefully worded, the NRC may incur a legal liability in the case the utility used the NRC J
estimate and was unable to recover the deficiency.
It should be noted that the problems noted above, i.e.,
the f
actual de. commissioning costs differeing from those estimated, may l
occur whether or not the NRC provides an estimate of these costs.
10 l
7_
However, the greater the deviation of the NRC estimated costs from 1,
i the true costs, the more likely the above problems would arise.
In 4
particular, since the utility would probably want to choose the high-f est estiaste available, the result would be an even greater burden on i
the early ratepayers.
In this case the very later users, and the af ter-users, would gain the primary benefit of such an overestiaste i
when the FUC orders a refund.
III. Ef fect on the FUC Ratemaking Process There is no doubt that the NRC estimate will have a significant I
impact on the decision of the FUC regarding the magnitude of the decommissioning fund.
In my experience in PDC proceedings, estimates made by govenannt or quasi-government agencies have
'a strong influence on final decisions.
The determination of the size of the
]
decommissioning fund, and therefore the amount to be collected from ratepayers, normally occurs when the utility seeks a change in i
tariffs. The following procedure occurs in the state of Pennsylvania and is very similar to that used 'in other states.
At the point the
. utility files a tarif f change it met present its best estiaste of
. its total expenses. -revenues, capital expenditures, and costs of financial capital to the FUC.
Among the items considered would be the size of the decommissioning fund.
At this point, plaintiffs f
against the utility, as well as the FUC, can challenge the utility estimates before an administrative, law judge.
These hearings i
normally take several months.
Infrequently a settlement is reached by the parties involved before a formal' ruling by the FUC is mode.
I If a settlement is not reached, the administrative law judge will j!
11
render an opinion.
This is then sent to the FUC, along with comments and exceptions by all parties involved, for a final decision.
The
~
decision of the FUC is usually final, although it may be appealed to the state Supreme Court.
Since, as noted abovt, it is probably in the interest of the I
utility to obtain the highest possible estiente of the decommission-ing fund, the utility will use the NRC estimate even though it may be higher than the utilities' internally generated estieste.
This occurs since the utility correctly perceives it as difficult, if not i
impos sible, to recover decommissioning costs exceedir.3 those esti-l mated.
Of course, if the plaintiffs in the rate hearings also believe that the decommissioning estias,,te is too high, this estimate will be challenged and the utility will be forced to justify its estieste.
However, the burden of proof would be shif ted signifi-cantly, to the plaintiffs to prove that the NRC estimate is too high and not applicable to the particular plant being considered.
ilhen-ever figures requiring judgement are in contention in a rate hearing, J
the administrative law judge, as well as the PUC, often taka simple averages of well-informed opinion to arrive at a consensus estimate.
l This is no question, therefore, that an NRC estiaste above that which l
would be estimated by the utility alone will result in a higher decommissioning fund than in the absence of an NRC estieste.
There i
will have generally unfavorable effects on ratepayers as analyzed in i
Sections I and II above.
i IV.
Summary and Conclusions The analysis presented in Sections I, II, and III above support 12
l
)
l f
the following conclusions:
o Utilities normally desire the highest possible. decommission-
)
ing fund so that there will be a lower probability of an I
underfinanced fund from which the deficiency may not be collectible.
o The establishment of an NRC estimate will influence PUC pro-ceedings and the final cost estiaste of the decommissioning fund awarded by the PUC.
3 in general, the higher the level of the decommissicains fund, o
the higher will be the costs to the ratepayers due to the lower marginal rate of return on the fund's assets and the unf avorable tax treatment accorded by the IRS.
o Most procedures for funding the decommissioning fund result In a relatively he avier burden on early ratepayer s.
If actual. decommissioning expenses differ from the final fund balance, there are difficulties in properly distributing the excess equitably among ratepayers.
o[ a utilitf adopting an NRC estiente of Therefore, the effect the decommissioning costs which exceeds that which would have been developed by the utility will generally result in:
i (1) Righer energy-costs to all ratepayers (2) Greater relative burden of decommissioning costs on early l
ratepayers (3) More paperwo rk.
and hearings as the' NRC estimate is challenged by the PUC and other interested parties, and (4) A greater assurance the funds will be available for decor missioning, if the fund.is esternally financed.
l l
It is my opinion that unless the last point is of overriding i
importance, it would not be in the best, interest of the ratepayer to have the NRC develop an estimate of decossissioning costs, especially I
if that estimate would not be tailored to the plan in question and l
l tended to overestimate the'true costs of decommissioning.
I 13 l
,y m
w.m
.,..m._,y
.._._,c,..mw-n.
,,.y,
.m,-,y, _ _
m
-__,--m-,
m
i o
APFENDIX The example in the body of the report is analyzed with the following parameters:
Length of Life of Reactor 30 years overall Inflation Rate (yearly) 8%
Decommissioning Inflation Rate 10%
l Current NRC estimate of decom costs
$120 million l
Current utility estimate of decom costs
$100 million The following results follow from the above asstanptions 1
NRC Estimate Utility Estiente (alllions) 8 l
Money Cost of Decom 30 years Nnce 2',094 1,745 Real cost of Decom 30 years hence 208.1 173.4 Annual Funding Using Future Cost Negative 18et Salvage Value (Constant Nominal Dollars) at 10% interest 12.73 10.61 12% interest 8.68 7.23 t
11.2% interest 10.12 8.44 Annual Funding Using Ideal Price Escalated Methods (Constant Real Dollars) at 10% interest 5.13 4.28 12% interest 3.71 3.09 11.2% interest 4.23 3.53 e
9 f
14
.