ML20198D808
| ML20198D808 | |
| Person / Time | |
|---|---|
| Site: | Portsmouth Gaseous Diffusion Plant, Paducah Gaseous Diffusion Plant |
| Issue date: | 09/14/1998 |
| From: | Devault R ENERGY, DEPT. OF |
| To: | Pierson R NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS) |
| References | |
| NUDOCS 9812230214 | |
| Download: ML20198D808 (4) | |
Text
~
..y T(w i
/
g Department of Energy ik{4 7 j Oak Ridge Operations f
Post Office Box 62
%n#
Oak Ridge, Tennessee 37831 -8651 September 14, 1993 Mr. Robert C. Pierson Chief, Special Projects Branch Division of Fuel Cycle Safety and Safeguards, NMSS United States Nuclear Regulatory Commission go#
Washington, DC 20555-0001
Dear Mr. Pierson:
TRANSITION COSTS FOR THE GASEOUS DIFFUSION PLANTS The puroose of this letter is to update the information related to the gaseous diffusion plant (GDP) transition costs that was provided to the Nuclear Regulatory Commission (NRC) in the letter to Walter S. Schwink from J. Dale Jackson dated August 9, 1996. Now that the certification process is complete and many of the activities identified in the Department of Energy (D0E) compliance plans for the GDPs have been completed, it is possible to provide a new estimate of the costs for completion of the transition.
Prior to the start of the transition from DOE oversight to NRC regulation, DOE recognized, based upon extensive compliance assessments of the GDPs, that substantial' funding would be required to achieve full compliance with the DOE orders and standards.
Subsequently, during the transition period, the GDPs have further progressed towards compliance with the Regulatory Oversight Agreement (ROA) and progressed toward compliance with the NRC certification standards of 10 CFR 76. Although the R0A incorporated, in a performance oriented manner, DOE orders and nandards required for. safe operation, it did not include all of the administrative requirements (e.g., cost accounting standards, asset protection criteria, project management requirements) within the DOE directives that were associated with DOE operation of the GDPs.
- Thus, there was no period during the transition in which the GDPs were in full compliance with all DOE orders and standards.
Furthermore, the R0A was I
designed so that its requirements were more like the NRC requirements.
This
/
regulatory approach was much more cost-effective in establishing compliance with the DOE standards required for safe operation and in achieving compliance with NRC regulations than requiring that the GDPs achieve full compliance with DOE standards and then requiring that their operations be modified again to achieve compliance with NRC standards.
~
9812230214 900914 PDR ADOCK 07007001.
C PDR L
',*j Mr. Robert C. Pierson September 14, 19H Nevertheless, both DOE and USEC have incurred substantial transition costs in upgrading the GDPs to achieve compliance with NRC standards.
Now that the transition is complete, DOE is in a position to provide updated information regarding these costs.
Based upon current information, the total cost to DOE and USEC associated with the transition of the GDPs from DOE oversight to NRC regulation was approximately $301 million.
The cost to DOE was $228 million, comprising about $183 million for nuclear safety upgrades at the GDPs and about $45 million for direct certification costs, such as preparation of the application and compliance plans mandated by 10 CFR 76 and Special Nuclear Material (SNM) surveys required to demonstrate compliance with the NRC established SNM possession limits.
$220 million of this amount was reimbursed to USEC by DOE in the form of uranium material transfers to USEC as a part of a settlement of the nuclear safety upgrade portion of the DOE statutory liabilities for correction of pre-existing cond tions under the Nemorandum of Agreement Relating to the Transfer of Functions and Activities from the United States Department of Energy to the United States Enrichment Corporation, as amended by Amendment FY 98-1, dated May 18, 1998.
The reimbursed costs include the certification costs, exclusive of the preparation of the DOE Compliance Plans which were funded directly by DOE (approximately $8 million), and the costs for Compliance Plan corrective actions.
The non-reimbursed costs to USEC for transition that DOE is aware of were approximately $73 million.
These costs included $38 million paid to DOE to cover DOE costs for regulatory transition of USEC under the R0A, $34 million for plant and programmatic upgrades that, under the terms of the DOE - USEC agreements did not meet the standards for reimbursable actions to correct pre-existing conditions, and $1 million for application preparation.
It is difficult to clearly separate the costs of meeting NRC regulations from the total transition costs.
However, our analysis indicates that approximately $173 million was spent for activities that would not have been required to meet DOE orders and standards.
This amount consists of: (1) $46 million for direct certification costs ($45 million DOE liability and $1 million USEC liability), including the preparation of the certification applications and compliance plans mandated by 10 CFR 76 and SNM surveys required to demonstrate compliance with the NRC established SNM possession limits; (2) $34 million for plant and programmatic upgrades not meeting the standards for reimbursable actions to correct ore-existing conditions; (3) $55 million for other plant and programmatic upgrades unique to NRC requirements; and (4) $38 million for regulatory transition of USEC under the R0A.
The $173 million transition cost is unique to the certification process for the GDPs
(
,o, eg
,i l'.
l Mr. Robert C. Pierson September 14, 1998 and those costs associated with items 1 and 4 should not be generalized when predicting the costs associated with transition to external regulation for other facilities.
These costs reflect a multi-year effort and the involvement of a new third party (USEC) with a significant learning curve.
It is estimated that the cost _of item 4, the DOE R0A oversight, would have been no l
tuore than $20 million if an initial certification application acceptable to the NRC had been submitted by USEC. Furthermore, DOE would have incurred a portion of these costs of oversight to monitor compliance with DOE orders and standards irrespective of transition. Similarly, tl.e cost for item 1 would have also been considerably reduced since additional expenditur6s were involved in the preparation of the additional applications and the companion L
compliance plans. Also, it should be noted that if the GDPs had been in compliance with DOE orders and standards prior to initiating transition, it is estimated that preparation costs for the compliance plans would have been reduced by about $5 million dollars.
The direct costs in item 1 are those that were included in Mr. Jackson's letter, of August 9, 1996, to Mr. Schwink.
The costs in item 4 above, although clearly not required to meet DOE orders and standards, relate to the way in which the transition was conducted rather than the cost of meeting NRC requirements. The remaining $128 million in transition costs comprises costs that would have been incurred achieving compliance with 00E orders and standards. The transition cost information contained in this letter is summarized in the enclosed table.
If you have questions or need additional information, please contact me at (423) 241-4497.
Sincerely, Yh h
M Randall M. DeVault Regulatory Oversight Manager Office of Assistant Manager for Enrichment Facilities Enclosure ccw/ enclosure:
E. Q. Ten Eyck, NRC, White Flint S. Harlow, NE-40, GTN J. W. Parks, EF-20 l
J. D. Jackson, EF-20
r g
4 4
Table 1. Regulatory Transition Costs for the Gaseous Diffusion Plants DOE USEC Liability Liability Total Liability Transition Costs for Compliance with NRC Requirements Direct Certification Activities
- 1. USEC Certification Application Preparation,
$37,000,000
$1,000,000
$38,000,000 Fees, and related activities
]
- 2. DOE Compliance Plans
$8,000,000
$0
$8,000,000 i
Plant & Programmatic Upgrades (nonreimbursable by SO
$34,000,000
$34,000,000 DOE)
Plant & Programmatic Upgrades (unique to NRC
$55,000,000
$0
$55,000,000 requirements) 1 Other Transition Costs 1
- 1. Regulatory Transition Under ROA
$0
$38,000,000
$38,000,000 Subtotal
$100,000,000
$73,000,000
$173,000,000 Transition Costs for Compliance related to DOE Requirements Plant & Programmatic Upgrades (not unique to NRC
$128,000,000
$0
$128,000,000 requirements-would have been incurred achieving compliance with DOE orders and standards)
Total Transition Costs
$228,000,000
$ 13,000,000
$301,000,000 4
-