ML20155D381

Temporary Exemption from Schedular Requirements of Property Insurance Rule Effective 881004 (10CFR50.54)

ML20155D381
Person / Time
Site:	Millstone
Issue date:	10/03/1988
From:	Varga S Office of Nuclear Reactor Regulation
To:	NORTHEAST NUCLEAR ENERGY CO.
Shared Package
ML20155D369	List: ML20155D365 ML20155D381
References
NUDOCS 8810110236
Download: ML20155D381 (4)

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7590-01 UNITED STATES OF AMEl'ICA NUCLEAR REGULAT0ftY COMMISSION in the matter of NORTHEAST NUCLEAR ENEf'.GY Docket Nos. 50-245, 50-336 COMPANY g and 50-423

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(MillstoneUnits1,2and3) [

J EXEMPTION Northeast Nuclear Energy Company (the licensee) is the holder of Facility Operating License Nos. DPR-21. DPR-65, and NPF-49, which authorize operation of Millstone Units 1, 2, and 3. The licenses provide, among other things, that they are subject to all rules, regulations, and orders of the Comission new or hereafter in effect.

The facilities consist of a boiling water reactor (M11stene 1) and pressuized water reactors (Millstone 2 and 3) at the licensee's site located in New London County, Conrecticut.

On August S.1987, the NRC published in the FEDERAL REGISTER a fir.al rule l arending 10 CFR 50.54(w). The rule increased the amount of on-site property damage insurance required to be carried by NRC's power reactor licensees. The rule also required these licensees to obtain by October 4,1980 insurance policies that prioritized insurance proceeds for stabilization and decontanination after an accident and provided for pepent of proceeds to an independent trustee whc would disburse funds for decontamination and cleanup before any other purpose.

Subsequent to publication of the rule, the NRC has been infonred by insurers who offer nuclear property insurance that, despite a good faith effort to obtain trustees required by the rule, the decontamination priority and trusteeship provisions will not be able to be incorporated into policies by the time required in the rule. In response to these coerents and related petitions for rulemaking, 8810110236 891003 PDR ADOCK 05000245 J PDC

7590-01 i UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the matter of NORTHEAST NUCLEAR ENERGY Docket Nos. 50-245, 50-336 COMPANY and 50-423 (MillstoneUnits1,2and3)

EXEMPTION Northeast Nuclear Energy Company (the licensee) is the holder of Facility Operating License Nos. DPR-21, DPR-65, and NPF-49, which authorize operation of Millstone Units 1, 2, and 3. The licenses provide, among other things, that i they arc subject to all rules, regulations, and orders of the Comission now or hereafter in effect.

The facilities consist of a boiling water reactor (Millstene 1) arj pressuized water reactors (Millstone 2 and 3) at the licensee's site locaied in New London County, Connecticut.

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On August 5,1987, the NRC published in the FEDERAL REGISTER a final rule arending10CFR50.54(w). The rule increased the amount of on-site property damage insurance required to be carried by NRC's power reactor licensees. The rule also required these licensees to obtain by October 4,1988 insurance policies that prioriti:ed insurance proceeds for stabilization and decontanination after an accident and provided for paynent of proceeds to en independent trustee who would disburse funds for decontamination and cleanup before any other purpose.

Subsequent to publication of the rule, the NRC has been infonred by insurers .<ho offer nuclear property insurance that, despite a good faith effort to obtain trustees required by the rule, the decontamination priority and trusteeship provisions will not be able to be incorporated into policies by the time required in the rule. In response to these comments and related petitions for rulemaking, 8G10110236 881003 PDR ADOCK 05000245 J PDC

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the Comission has proposed a revision of 10 CFR 50.54(w)(5)(1) extending the implementation schedule for 18 months (53 FR 36338, Septenber 19,1988).

However, because it is unlikely that this rulemaking action will be completed by October 4,1988, the Comission 15 issuing a terporary exwnption from the requirements of 10 CFR 50.54(w)(5)(1) until completion of the pending rulemaking extendingtheimplementationdatespecifiedin10CFR50.54(w)(5)(1),butnot

!ater than April 1, 1989. Upon completion of such rulemaking, the licensee shell comply with the provisions of such rule. '

Pursuant to 10 CFR 50.12. "The Comission may, upon application by any interested person or upon its own initiative, grant exemptions from the requirements of the regulations of [10 CFR part 50), which are ... Authorized h law, will not present an undue risk to the public health and safety, and are I consistent with the comon defense and security." Furthtr,Section50.12(a)(2) provides inter alia, "The Comission will not consider granting an exemption unless special circumstances are present. Special circumstances are present whenever ... (v) The exemption would provide only temporary relief from the applicable regulation and the ifcensee has made good faith efforts to comply with the regulation."

Despite a good faith effort to comply with the provisions of the rule, insurers providing property damage insurance for nuclear power facilities and licensees insured by such insurers have not been able to comply with the regulation and the 3xeeption provides only temporary reitef from the applicable regulation.

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As noted by the Commission in the Supplementary Infonnation accompanying the proposed rule, there are several reasons for concluding that delaying for l I i

a reasonable time the implementation of the stabilization and decontamination

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a priority and trusteeship provisions of Section 50.54(w) will not adversely j affect protection of pubite health and safety. First, during the period of 1

i delay, the licensee will still be required to carry $1.06 billion insurance.

i i This is a substantial amount of coverage that provides a significant financial l 3

cushion to licensees to decontaminate and clean up after an accident even without the prioritization and trusteeship provisions. Second, nearly 75% of the required coverage is already prioritized under the decontamination liability

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l 2.nd excess property insurance language of the Nuclear Electric Insurance j Limited-II policies. Finally, there is only an extremely small probability of 3

a serious accident occurring during the exemption period. Even if a serious accident giving rise to substantial insurance claims were to occur NRC would be 4

able to take appropriate enforcement action to assure adequate cleanup to protect  !

] public health and safety and the environment.

f i IV. t Accordingly, the Comission has detemined, pursuant to 10 CFR 50.12(a). l t

i that (1) a temporary exemption as described in Section !!!. is authorized by i i

law, will not present an undue risk to the public health and safety, and is '

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! consistent with the comon dre fense and security and (2) in this case, special l circumstances are present at described in Section III. Therefore, the 1

! Corsnistion hereby grants the following exemption:

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~4-Northeast Nuclear Energy Company is exempt from the requirements of 10 CFR 50.54(w)(5)(1) until the completion of the pending rulemaking extending 4 1

the implementation date specified in 10 CFR 50.54(w)(5)(1), but not later '

than April 1, 1989. Upon completion of such rulemaking the licensee shall comply with the provisions of such rule.

I Pursuant to 10 CFR 51.32, the Comission has detennined that the granting j of this exemption will not result in any significant environmental impact l

( 53 FR 38814 ).

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J This exerption is effective upon issuance. ,

1 l Dated at Rockvilia, Maryland this 3rd day of October , 1988.

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t FOR THE NUCLEAR REGULATORY cot!SSION l I

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ara \,kirec Division of Reactor Pr i ts I/II j Office of Nuclear Reactor Regulatten l

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