ML20134E635

Partially Deleted Commission Paper Re Financial Assurance for General Atomics Facilities

ML20134E635
Person / Time
Site:	General Atomics, 07000734
Issue date:	06/10/1996
From:	Taylor J NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
To:
Shared Package
ML20128Q115	List: ML20128Q112 ML20134E635 ML20134E647
References
FOIA-96-336 SECY-96-124, SECY-96-124-01, SECY-96-124-1, SECY-96-124-R, NUDOCS 9611010287
Download: ML20134E635 (7)

Text

m ,u n -.a -

l

a. 790

, ~,

l.-

5 l i

l

. . ,- e 1.r u m . _ . ~% ,,,,,/

r l POLICY ISSUE .

(NEGATIVE CONSENT)

~

, . . a.a . : :,e o

~f l l

f June 10, 1996 sed-56-124 l

! fQB: The Cosnissioners l ffE: James M. Taylor l Executive Director for Operations i

i 1

SUBJECT:

FINANCIAL ASSURANCE FOR GENERAL ATOMICS FACILITIES l

o PURPOSE:

$/

i SUPMARY:

r

Contact:

Robert Pierson, NMSS L-415-7190 Seymour Weiss, NRR 6[

/

415-2170 NOTE:

• SEiSITIVE PREDECISIONAL DELIBERATIVE INFORMATION LIMITEDTOTNi(C UNL Tile COPMIS.SION DETERMIN,ES

. s .*

_ .c e ., . . OTHERWISE W

f l

, . . a. .

I i

1 l Information in this record was deleted j in accordance wit e freedEn of Infortnation k Act, exem %5 l F0IA 'Jtions16-336,

! 9611010287 961010 j PDR FOIA

l i

! o ..

4

4. . .. . v .

? I have no objection to the staff's i proposed action in this matter.

p  ; In addition, I concur in the comme- )

s made by the Chairman.

96 JUN 11 M 3:30

• • • • • Kenneth C. Rogers POLICY ISSUE i (NEGATIVE CONSENT) l i

June 10, 1996 SECY-96-124

EQS

The Commissioners EBWl: James M. Taylor Executive Director for Operations 4

1

SUBJECT:

FINANCIAL ASSURANCE FOR GENERAL ATOMICS FACILITIES

*.s.

,f . . , 4 't $

ifk, gj , ,_ . . .

wlY,s'.fh i nfl{s{g,c ru .

.>" aw.. n,aa;,p,ygg; gd m) .w

,.: s c . . , .s y se -

w gg. -

4 i ,jg

' ' O 4:M j%

l

)Y .~ <!?.

Q'; V g- Q: , ., f;' yp j:;.'.Mf Gyp wo;. m,J. a!4 _f.

s V.,

4,g._ m4  ; fps. s h:~.j; k,;{,-

.# -4 .: ..

,;Y' Q{I o . c.a. m s.

, . f, . #g' j I,.;f O,,k.

m r

l? :.

o n.

' ~:

l' yg

+ -. , y,.

.,, e< ;./ ,

y w . . s, ~. . . s#,. , 1

, f, h' n .'* . f} .

p, %. .. i *

".s'

. y,;N.*  :

.c ..

1 ~,$ jf.

• t6 .N; i

$ h -

.a a -

eyj T. it*;

~

^

4 , . y; o,.

~

Gi t" h

l

' '\g. ,,

'} '[

k..

g h - .' "&

i

,,.. .. A[r, ,L I ,

f .,

.. '..:. W ?; s. c, ,o, j'

'd.?

f's O

mlF

'.' i .

., a. . , .. .a a

';:-vgg NWvUw'

~

6 f,jS#et.f%

l lg}

as o e. 'a er ve nancia 's'urance p an ~ at .

combines a partial parent company guarantee with contributions to a sinking fund, on the condition that the staff forbear from taking enforcement action against GA to r la

< re ula i-- - ......(.

I JV 5, l

1 1

BACKGROUND:

l GA is the holder of NRC licenses SNM-696, R-38, and R-67 under 10 C.F.R. Parts 50 and 70 for its two TRIGA research reactors, hot cell facility, fuel fabrication facility, and other related facilities in San Diego, Cal "ornia.

Since the relevant regulations requiring financial assurance for decommissioning at 10 C.F.R. 55 50.75 and 70.25 became effective, GA his opted to provide a parent company guarantee from General Atomics Technologies  ; ,

l Corporation (GATC) to provide financial assurance. In 1995, the amou assurance provided by the parent guarantee was approximatel .f.q DISCUSSION:

~

Government contract work from the Department of Enercjy' irid' Depart' ment of Defense has historica11 rovided GA wi h a d _

income 1 l l

}

1. :

I 4

NOTE: SENSITIVE PREDECISIONAL DELIBERATIVE INFORMATION LIMITED TO NRC UNLESS THE COMMISSION DETERMINES OTHERWISE

\ .

I C __ _ _ -._-, _

I a

j-t

_3_

GA is the third-tier parent of SFC, which operated a uranium conversion j facility in Gore until 1992. Through subsidiary corporations, GA acquired SFC

from Kerr McGee Corporation in 1988. GA did not then become nor has it since l

been a named licensee for the SFC facility. In October 1993, the staff issued i an order, based on facts alleged therein, which asserted that SFC and GA were jointly and severally liable for decommissioning funding and financ'ial

' l '

'asidrancs'for the SFC facility. The order specifically directed GA to provide financial assurance in the amount of $86 million for cleanup of the SFC site.

Both GA and-SFC requested a hearing on the order, and the matter is.now before an. Atomic, Safety and Licensing Board in Docket 40-8027-EA. In August 1995, l SFC entered into a settlement agreement with the staff, which was approved by the Licensing Board and is now being reviewed by the Commission. GA and the i staff entered into good faith settlement negotiations beginning in September l 1995, and have arrived at a tentative settlemerit, notwithstanding GA's legal j position that the NRC lacks jurisdiction over GA to be able to sustain the

! order against it. In general terms, the tentative settlement with GA involves paymen l

' years.p of a significant amount of cash to a trust fund over a period of j the st armation clusio tQ 3 6 fd l

.. MConfidential infor Given the limited resources of GA, the staff has evaluated the relative risks

'/

he SFC site. The staff concluded that L i -

i s

) fug)('

i i

l

' By presenting this paper to the Commission, the staff is not seeking

}

any prejudgment".ofrany.: matters in litigation, including any proposed ,_ _ _ _ _

settlee. lt agreement that may be offered, concerning the Sequoyah Fuels Gore 1 facilit.

l' NOTE: SENSITIVE PREDECISIONAL DELIBERATIVE INFORMATION LIMITED TO NRC UNLESS THE COMMISSION DETERMINES OTHERWISE i

i 1 _ . _ . __ _ .

j . .

_4_

f^

i j litigation, however, GA seeks assurance from the staff prior to implementation j

of the alternative plan that an enforcement action seeking compliance with the i financial assurance regulations will not be brought by the staff against GA.

T lternative ed aren f e es f a sinking fund to w ld er year. Contr sink l

su estimat increase, o contri to e s ng fund would increase accordingly. Withdrawals from the sinking fund to

commissioni ould be a rtain a nnuall mdirectlypayfor t

i l

l GA is currently en in decommissioning its hot cell facility, to which the DOE is contributin of the costs. The research reactor lic are scheduled to ire two and four years; by such ti

m. . . . . .

{ n .m

../

C' l

, l i

i NOTE: SE VE PREDECISIONAL DEllBERATIVE INFORMATION LIMITED TO NRC UNLESS THE COMMISSION DETERMINES OTHERWISE l

4 a

+

! CONCLUSION:

-c.

..L f. 'sc' l

l

~ n]

l l

1 l

. l' NOTE: SENSITIVE PREDECISIONAL DELIBERATIVE INFORMATION LIMITED TO NRC UNLESS THE COMMISSION DETERMINES OTHERWISE

4 O COORDINATION:

The Office of the General Counsel worked closely with staff in developing this paper and the attached proposed staff response and concurs in the planned approach.

/

E~N mes M. T lor xecutive frector i for Operations Attachments:

1. Letter from K. Asmussen to Document Control Desk (May 20,1996) with enclosures l (contains proprietary information)

2. Proposed staff response SECY NOTE: In the absence of instructions to the contrary, SECY will notify the staff on June 24, 1996 that the Commission, by negative consent, assents to the action proposed in this paper.

DISTRIBUTION:

Commissioners OGC OCAA 01c i OPA I OCA )

l EDO SECY l

NOTE: SENSITIVE PREDECISIONAL DELIBERATIVE INFORMATION LIMITED TO NRC UNLESS THE COMMISSION DETERMINES OTHERWISE