ML20199J283

Draft Revised Directive 8.12, Decommissioning Financial Assurance Instrument Security Program

ML20199J283
Person / Time
Issue date:	07/15/1997
From:	NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS)
To:
Shared Package
ML20199J281	List: ML20199J277 ML20199J283
References
REF-WM-3 8.12-DRFT, NUDOCS 9711280096
Download: ML20199J283 (19)

Text

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Decommissioning Financial 1 . . .

Assurance Instrument Security Program

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Volume 8, Licensee Oversight Programs Decommissioning Financial Assurance Instrument Security Program '

Directive 8.12 i

Contenis Po l i cy . . . . . . . . . . . . . . . . , [ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 . . .

O bj e c t i ve s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Organizational Responsibilities and Delegations of Authority . . . . . . . . . . 2 Executive Director for Operations (EDO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Chief Financial Officer (CFO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-Director, Office of Nuclear Material Safety and Safeguar 's (NMSS) . . . . . . . . . . . 2 Director, Office of Nuclear Reactor Regulation (NRR) . . . . . . . . . . . . . . . . . . . . . . 3 Regional Administ rato rs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 A p pl i ca b il i ty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Ilandbook...................................................... 4 Re fe re n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Approved: June 12,1996 iii (Revised: Draft 7/15/97)

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%,,..# Volume: 8 Licensee Oversight Programs NMSS l

Decommissioning Financial Assurance Instrument Security Program Directive 8.12 Policy (8.12 - 01)

It is the policy of the U.S. Nuclear Regulatory Commission to establish and implement a process for the security of and delegt tion of signature authority for drawing on decommissioning financial assurance instruments, submitted in accordance wit h applicable rules in Title 10 of the Code ofFederal Regulations (10 CFR), and to perform periodic evaiuations of these instruments, in its possession, to ensure they are safeguarded and complete.

Objectives (8.12 - 02) e To ensure that the accepted originally signed decommissioning financial assurance instruments, submi*.ed in accordance with 10 CFR 30.35,40.36, Appendix A to Part 40, 50.75, 61.63, 70.25, and 72.30, are safeguarded and to ensure their use is only for the purposes intended. (021) e To ensure that & commissioning financial assurance instruments are readily available in the event that NRC must draw on them. (022)

• To ensure that the NRC signature authority for drawing on a decommissioning financial assurance instrument is unambiguously determined and, when needed, the appropriate individuals sign the needed documents. (023) e To ensure that monies drawn on decommissioning financial assurance instruments are plaud in standby trust accounts and not transferred directly to the NRC or other parties. (024)

^ pproved: June 12,1996 1

(Revised: Draft 7/15/97)

Vclume 8, Licensee Oversight Programs .

Decommissioning Financial Assurance Instrument Security Program Directive 8.12 )

Objectives (8.12--02) (continued) e To ensure that decommissioning financial anurance instrument evaluations are performed to ascertain Giat the instruments are properly secured and are complete. (025)

Organizational Responsibilities and Delegations of Authority (8.12 - 03)

Executive Director for Operations (EDO)

(031)

Establishes a proces for decommissioning financial assurance instrument security and implements it by the decommissioning financial assurance instrument security (DFAIS) program. The program will include a process for evaluating the security and completeness of the instruments submitted.

Chief Financial Olricer (CFO)

(032)

Approves the process established for decommissioning financial assurance instrument security.

Director, Omcc of Nuclear Material Safety and Safeguards (NMSS)

(033)

. Establishes the DFAIS program and jointly admmisters the I program with the region.11 administrators. (a) e Develops, approves, and maintains procedures governing the DFAIS program as it relates to li:enses administered by NMSS. (b)

• Safeguards decommissioning financial assurance instruments for licenses managed within NMSS and is authorizea to sign documents for drawing on instruments. This signature authority may not be delegated below the deputy office director level. (c)

• Designates decommissioning financial assurance instrument custodians (FAICs), alternate custodians (AFAICs), and FAIC managers, and ensures performance of appropriate program verifications. (d) s Approved: June 12,1996 2

(Revised: Draft 7/15/97)

4

. Volume 8, Licensee Oversight Programs Decommissioning Financial Assurance Instrument Security Program

. Directive 8.12 Director, OfTice of Nuclear Material Safety and Safeguards (NMSS)

(033)(continued) e Provides guidance to decommissioning FAICs, AFAICs, and FAIC managcrs to ensure that instrument evaluations are properly performed. (e)

Director, Office of Nuclear Reactor Regulation (NRR)

(034)

For licenses managed within NRR, is authorized to sign documents for drawing on instruments. This signature authority may not be delegated below the deputy office director level.

Regional Administrators (035) e Jointly miminister the DFAIS with the Director, NMSS. (a) l

. Maintain procedures governing the DFAIS program as it relates to the licenses administered by the respective regions. (b) e Safeguard decommissioning financial assurance instruments for licenses managed within their region. The regional administrator is authorized to sign documents for drawing on instruments. This signature authority may not be delegated below the deputy regional administrator level. (c) e Designate decommissioning FAICs, AFAICs, ard FAIC managers, and ensures performance of appropriate program verifications. (d) e Provides guidance to regional FAICs, AFAICs, and FAIC managers to ensure that instrument evaluations are properly performed. (e)

Applicability (8.12 - 04)

The policy and guidance in this directive and handbook apply to all NRC employees.

Approved: June 12,1996 3

(Revised: Draft 7/15/97)

Vclume 8, Licensee Oversight Programs -

Decommissioning Financial Assurance Instrument Security Program Directive 8.12 ,

Handbook (8.12 - 05)

Handbook 8.12 contains procedures for implementing decommissioning financial assurance instrument security. This document is not intended to deal with the mechanics of drawing on instruments.

References (8.12 - 06)

Atomic Energy Act, Section 161.b, General Provisions.

, Section 161.x.

Code of Fedeml Regulations, Energy, U.S. Government Printing Office, Washington: 1996 (See 10 CFR 30.35,40.36, Appendix A to Part 40,50.75,61.63,70 2< and 72.30).

Management Directive 5.6, " Integrated Materials Performance Evaluation Program (IMPEP)."

Nuclear Waste Pclicy Act, Section 151, Financial Arran3ements for Low Level Radioactive Waste Site Closure.

NUREG-1199, " Standard Format and Content of a License Application for a Low-Level Radioactive Waste Disposal Facility,"

Chapter 10 (10 CFR Part 61), Rev.1, January 1988.

NUREG-1200," Standard Review Plan for the Review of a License Application for a Low-Level Radioactive Waste Disposal Facility,"

Chapter 10 (10 CFR Part 61), Rev. 3, April 1994. .

NUREG-1337," Standard Review Plan for the Review of Financial Assurance Mechanisms for Decommissioning under 10 CFR Parts 30, 40,70, and 72," Rev.1, August 1989.

Regulatory Guide 3.66," Standard Format and Content of Financial Assurance Mechanisms Required for Decommissioning under 10 CFR Parts 30,40,70, and 72," Ju:e 1990.

Technical Position on Financial Assurances for Reclamation, Decommissioning, and Long-Term Surveillan:e and Control of Uranium Recovery Facilities, October 1988 (10 CFR Part 40, Criteria 9 and 10 of Appendix A).

Approved: June 12,1996 t

4 (Revised: Draft 7/15/97) l

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Decommissioning Financial Assurance Instrument Security Program

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Volume 8, Licensee Oversight Programs Decommissioning Financial Assurance Instrument Security Program -

Handbook 8.12 Contents Decommissioning Financial Assurance Instrument Security Program Pu rpo s e ( A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Security of Decommissioning Financial Assurance Instrument (B) . . . . . . . . . . . . 2 Verification of the Decommissioning Financial Assurance Inventory (C). . . . . . . 3 I nve n t o ry Li st ( 1 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 I nve n to ry Log (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Changed or Cancelled Financial Instruments (3). . . . . . . . . . . . . . . . . . . . . . . . 4 Signature for Decommissioning Financial Assurance Instrument (D). . . . . . . . . . 5 An n u al Evaluations (E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Evaluation of the Security of Decommissioning Financial Assurance I n s t ru m e n t s ( 1 ) . . . . . . . . . . . -. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Evaluation of the Decommissioning Financial Assurance Inventory (2) . . . . 5 Evalu a tion Report (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7 Ext e rnal Evaluations (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 lype s of I nst ru m e n t s (F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Exhibits 1 Financial Assurance Inventory - Controlled List . . . . . . . . . . . . . . . . . . . . . . . . 11 2 Financial Assurance Inventory Log . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Approved: June 12,1996 ,,,

(Revised: Draft 7/15/97) 111 1

Volume 8, Licensee Oversight Programs Decommissioning Financial Assurance Instrument Security Program IIandbook 8.12 Decommissioning Financial Assurance Instrument Security Program Pttrp0Se(A)

The U.S. Nuclear Regulatory Commission established technical and financial regulations for decommissioning licensed nuclear facilities (53 FR 24018; June 27,1988) to ensure that the decommissioning of all licensed facilities will be accomplished in a safe and timely manner and that licensees will provide adequate fonds to cover all costs associated with decommissioning. The regulations (10 CFR 30.35, 40.36, Appendix A to Part 40, 50.75, 61.63, 70.25, and 72.30) address decommissioning planning needs, timing, funding methods, and environmental requirements for public and private facilities. They further specify what financial instruments licensees may use to provide financial assurt.nce. As a result of these regulations, the NRC receives financial assurance instruments that require safeguarding to permit ready retrieval when needed and to prevent unauthorized use. (1)

The decommissioning financial assurance instrument security (DFAIS) program provides procedures for the security of instruments submitted by materials and reactor licensees. The procedures prescribe the positions of specific individuals authorized to sign documents for drawing on decommissioning financial assurance instruments. They also address the transfer of monies drawn on instruments so that monies are placed in standby trusts or escrows, and are not transferred directly to the NRC or other parties. (2)

The pror, ram also provides for the designation of financial assurance instrument custodians (FAICs), alternate custodians (AFAICs), and FAIC managers to perform annual evaluations of financial assurance instruments. (3) i Approved: June 12,1996 I

(Revised: 1) raft 7/15/')7)

Volume 8, Licensee Oversight Progrcms -

Decommissioning Financial Assurance Instrument Security Program Ibndbook 8.12 Security of Decommissioning Financial Assurance Instrument (a)

The Director of the Office of Nuclear Material Safety and Safeguards (NMSS) and the regional administrators have responsibility for safeguarding decomrnissioning financial assurance instruments submitted by licensees managed under their programs. These individuals should designate in writing the decommissioning FAICs, AFAICs, and FAIC managers within their office or region. (1)

No one shall have access to the records other than through the FAICs, AFAICs, and FAIC managers Their responsibilities follow. (2)

• Decommissioning Financial Assurance Instrument Custodian (a)

The FAIC is responsible for (i) ensuring that decommissioning financial assurance instruments are properly secured and (ii) for maintaining instrument inventories and logs and performing annual verifications of instrument inventories pee Section (E) of this handbook),

e Alternate Decommissioning Financial Assurance Instrument Custodian (b)

The AFAIC is responsible for assisting the FAIC in maintaining instrument inventories and logs and performing annual verifications of instrument inventories (see Section (E) of this handbook;.

• FAIC Managers (c)

Managers of FAICs are responsible for performing annual i verifications of the DFAIS program and reporting the results to the l

office director or applicable regional administrator (see Section (E) of this handbook).

Licensing project managers or license reviewers are responsible for ensuring that the licensees they manage have submitted required decommissioning financial assurance instruments, and that the instruments are acceptable to NRC. The licensing project managers or license reviewers will provide the originally signed decommissioning financial assurance instruments to the FAIC or AFAIC. The instruments must be stored in a fire-rated safe, defined as having at

, I least a fire rating of 350 degrees for 1 hour1.157407e-5 days <br />2.777778e-4 hours <br />1.653439e-6 weeks <br />3.805e-7 months <br />, or in a security container l

Approved: June 12,1996 2 (Revised: Draft 7/15!97)

Volume 8, Licensee Oversight Programs Decommissioning Finan:lal Assurance Instrument Security Program l Ilandbook 8.12 l Security of Decommissioning Financial Assurance Instrument (B)(continued)

(safe) for classified information as approved by the NRC Division of Facilities and Security (see Management Directive 12.1,"NRC Facility Security Program," handbook Part II(H)). Instruments will be stored in an organized manner so that instruments can be readily retrieved. (3)

Licensing project managers or license reviewers ako will provide a copy of the instrument for the licensing file. The file copies will be stamped " nonnegotiable" and the identification number of the instrument will be blacked out. (4)

The Orfice Director, NMSS, and regional administrators shall designate in writing those individuals authorized to have access to the safe. (5)

Verification of the Decommissioning Financial Assurance Inventory (C)

The FAIC or AFAIC will perform verifications annually of the decommissioning financial assurance inventory to ensure that none of the instruments have been removed from the safe without being properly accounted for. After the verification, the FAIC or AFAIC will prepare a report to the FAIC manager, providing the results of the verification, identifying any discrepancies, and recommending actions to correct the discrepancies.

Inventory List (1)

The FAIC or AFAIC will maintain an inventory list of the decommissioning financial assurance instruments held in the safe. The inventory list shall provide-(a) e The licensee name and license number (i) e The type of instrument submitted (ii) e The name of the entity issuing the instrument (iii) e The issuer's designation of the instrument (usually a number) (iv)

The amount of the instrument (v)

Approved: June 12,1996 (Revised: Draft 7/15/97) 3

Vclume 8, Licensee Oversight Programs -

Decommissioning Financial Assurance Instrument Security Program i llandbook 8.12 -

i i

Verification of the Decommissioning i Financial Assurance Inventory (C)(continued) e Th . date of the instrument issuance, expiration date, and any amendments made to the original instrument (vi)

An example of an acceptable inventorflist is provided in Exhibit 1.The inventory list must be controlled and should be so labeled. (b)

Inventory Log (2)

The FAIC or AFAIC will maintain an inventory log of instrument removals from, and returns to, the safe. Removal of instruments from the safe should be for official use only (e.g., review by project nanager, replacement). The inventory log should indicate the licensee, specifics about tne instrument removed from or returned to the safe, the date and the signature of the person handling the inventory change, and reasons for the change. An example of an acceptable inventory log is

~

provided in Exhibit 2.

Changed or Cancelled Financial Instruments (3)

When licensees change financial assurance instruments, licenses are terminated, or licensees fall below the possession limit thresholds requiring financial assurance, instruments will need to be returned to the licensee. Wher. instruments are removed from the safe to be returned to the licensee, the licensing project manager or licensee reviewer shall be responsible for returning it to the licensee and Scumenting the transaction for the licensing file. (a)

A branch chief is the appropriate level of signature authority for returning financial assurance documents. A cancelled notation or stamp may be used with the appropriate signature affixed below it. All original, executed copies of the applicable financial assurance instrument that are no longer valid shall be returned to the licensee.

Copies of the transmittal letter also should be sent to the issuer of the instrument with copies in the licensing file. Inventory logs should be modified as appropriate. When a licensee replaces one instrument with another, the new instrument shall be fully reviewed and approved before returning the old instrument to the licensee. (b)

Approved: June 12,1996 4

(Revised: Draft 7/15/97)

. Volume 8, Licensee Oversight Programs Decommissioning Financial Assurance Instrument Security Program Ilandbook 8.12 Signature for Decommissioning Financial Assurance Instrument (D)

The Directors, NMSS and NRR, and the regional administrators are authorized to sign documents for drawing on decommissioning financial assurance instruments for licenses under their program responsibilities. This signature authority may not be delegated below the deputy office director or deputy regional administrator level.

Annual Evaluations (E)

Evaluation of the Security of Decommissioning Financial Assurance Instruments (1)

The FAICs, or AFAICs, and FAIC managers shall verify that the financial assurance instruments are safeguarded in a fire-rated safe and that none of the instruments have been removed without being properly accounted for. The financial assurance inventory log will be used to identify any instruments that were not in the safe at the time of the evaluation. (a)

The evaluation will verify that access to the safe is limited and the names of the persons who have access to the safe. The evaluation will verify that the safe has a " security container check sheet" (SF 702), or equivalent, documenting that the safe is checked at least daily. (b)

Two evaluations will be conducted annually, one by the FAIC or AFAIC and one by the FAIC manager. This will constitute a portion of the evaluation report that the FAIC manager will provide to the applicable office director or regional administrator. (c)

Evaluation of the Decommissionha Financial Assurance Inventon (2)

The FAICs, or AFAICs, and FAIC managers will use the financial assurance inventory controlled list to systematically verify whether the instruments provided on the controlled list are in the safe and whether the information related to the instruments is correct, up to date, and complete. (a)

A 100 percent evaluation will be performed of each financial assurance instrument in the safe to-(b)

. Ensure that the current inventory list is up to date and verify the complete instrument is in tha safe (i)

Approved: June 12,1996 5

(Revised: Draft 7/15/97)

Volume 8, Licensee Oversight Programs .

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Decommissioning Financial Assurance Instrument Security Program Ilandbook 8.12 -

Annual Evaluations (E)(continued)

Evahiation of the Decommissioning Financial Assurance Inventory (2)

(continued)

• Ensure that the corporation name is correct and currem on the inventory list (ii) e Verify the instrument type and issue date is correct on the inventory list (iii) e Verify the instrument amount is correct on the inventory list (iv) e Verify the instrument amendments are present and the issue dates are correctly listed on the inventory list (v) e Verify that all instrument documents that accompany the instrument are in the safe (vi) e Verify that the instruments in the safe are the original executed documents or there is an acceptable replacement copy (vii) e Verify that the name of the instrument issuer is correctly listed on inventory list (viii)

- e Verify that the instrument number is correctly listed on inventory list (ix) e Verify that a standby trust instrument has been submitted for all

$ letters of credit and surety bonds (x) e Verify the name of the standL trust trustee (xi) e Verify that the certificate of events, certificate of resolution, trust agreement schedules, and letter of acknowledgment are included with the standby trust (xii) e Verify that parent company guarantees include the parent guarantee, a letter from Chief Executive Officer of the licensee, a letter from Chief Financial Officer (CFO) of the corporate parent, a financial test using either Alternative I or Alternative II, and an auditor's special report by a certified public accountant reconciling amounts contained in the CFO's letter (xiii)

Approved: June 12,1996 6

(Revised: Draft 7/15/97)

I - Volume 8, Licensce Oversight Progratas Decommissioning Financial Assurance Instrument Security Program IIandbook 8.12 Annual Evaluations (E)(continueo)

Fraluation of the Decommissioning Financial Assurance Inventory (2) oontinued) e Review the licensing tracking system (LTS) listing of licenses requiring decommissioning fmancial assurance (xiv)

. Ensure that there is a financial assurance instrument for alllicenses required to have financial assurance (xv) e Verify that the LTS has correct, updated information (xvi)

The results and any discrepancies in the financial assurance inventory also will constitute a portion of the evaluation report. (c)

Evaluation Report (3)

The FAIC manager will prepare a repon providing the results of the evaluation, identifying any discrepancies, and recommending actions to correct the discrepancies. A copy of the repon shall be provided to the office director or applicable regional administrator. All FAIC reports and management reviews shall be provided to the Director, NhtSS.

External Evaluations (4)

NRR shall evaluate the files of the Division of Waste Management and Division of Fuel Cycle Safety and Safeguards, NMSS every 2 years.

Results of the reviews shall be provided to division management with copies to the Director, NMSS. (a)

The Division of Waste Management, NMSS, shall evaluate the regional programs every 2 years through the integrated materials performance evaluation process (IMPEP, see Management Directive 5.6). (b)

Types of Instruments (r)

The following are examples of the types of decommissioning financial assurance instruments the NRC accepts.

Letter of Credit. In an NRC letter of credit, the licensee is the account party, the financial institution is the issuer, and the NRC is the benefierary, The issuer allows the beneficiaiy to draw funds upon presentation of the letter of credit in accwdance with its terms. The

- Approved: June 12,1996 7

(Revised: Draft 7/15/97)

Wlume 8, Licensee Oversight Programs

• Decommissioning Financial Assurance Instrument Security Program llandbook 8.12 -

Types of Instruments (F)(continued) purpose of an NRC letter of credit is to guarantee the availability of funds for certain activities. In general, these funds are deposited into a standby trust fund under the terms of the letter of credit. (1)

Surety liond. A surety bond is a contract providing for monetary compensation or performance should there be a failure to perform any specific act within a specific period. Under the NRC regulations, a surety bond is a contract in which a surety company is liable for the default or debts of a licensee on certain responsibilities, such as for decommissioning. The surety agrees to satisfy these responsibilities if the licensee does not. In general, these funds are deposited into a standby trust fund under the terms of the bonds. (2)

Itrformance liond. A performance bond is a type of surety bond under which the surety agrees either to pay the penal sum of the bond or to perform the required actions if the licensee fails to fulfill its obligation. (3) standby Wust Rmd. Under NRC regulations, a standby trust fund is established to receive funds from a surety bond or letter of credit in the event that NRC draws on such instruments. A standby tmst fund must accompny each surety bond or letter of credit because NRClacks the authority to retain '

funds directly from a surety or bank. Instead, the funds are deposited in the standby trust fund and used at the direction of the NRC (4)

Parent Company Guarantee. This is a document stating that the guarantor-the parent corporation-guarantees that it will meet all financial assurance obligations specified in the regula: ions. (5)

Trust Fund. A trust is a three party agreement whereby one party, called the grantor (sometimes also called the trustor), transfers assets (often money) to a second party, called the trustee, to hold on behalf of a third party, called the beneficiary. In an NRC trust fund, the licensee is the grantor, a bank o other financial institution that fulfills the NRC requirements is the trustee, and NRC is the beneficiary. The licensee, as grantor, pays into the trust fund resources (such as cash or securities acceptable to the trustee) that are mannged by the trustee and will be used to pay for the applicable activities. The licensee usually pays a fee for the trust services provided by the trustee. The arrangement is '.

governed by a trust agreement that sets out the responsibilities and rights of each party. (6)

Appioved: June 12,1996 8

l (Revised: Draft 7/1997)

Volume 8, Licensee Oversight Programs Decommissioning Financial Assurance Instrument Security Program llandbook 8.12

'l) pes OflHStrunlentS (F)(continued)

Self. Guarantee. This is a document stating that the guarantor-the licensee itself-has demonstrated that it possesses the necessary financial strength and will meet all financial assurance obligations specified in the regulations. (7)

Statement ofIntent. This document is allowed for use only by Federal, State, or local government licensees who may certify that the entity will request funds for decommissioning costs sufficantly in advance of decommissioning ta prevent the delay of the required activities. This is not a commitment of funds, but rather a commitment to request decommissioning funds from the funding gosernment body when ,

necessary. The statement of intent is supported by the government's underlying ability to raise the funds necessary to pay for decommissioning cosis, in some cases, commercial licensees may rely on government statements of intent where there are contractual commitments from government entities to fund decommissioning. (8)

Certificate of Deposit (CD). These certificates are deposits of cash made into a bank for a prespecified time. CDs can be negotiable or nonnegotiable. If a CD is negotiable, the issuing bank is obligated to pay the holder, whoever it is, when the CD falls due. If a CD is nonnegotiable, the bank is obligated to pay the designated payee identified on the CD. CDs may be used as an instrument, if accompanied by an escrow account, trust fund, or standby trust agreement. (9)

Government Securities. These securities may be used as an instrument if deposited into a trust fund or escrow account. Acceptable government securities include those backed by the Federal, State, or local government, and include the follo ving: U.S. Trea:.ury bills, notes, and bonds; Government National Mortgage Association and Federal National Mortgage Association bonds and certificates; State or municipal bonds rated BBB or higher by Standard and Poor's or Baa or higher by Moody's Investors Service. (10)

External Sinking Fund. This fund allows a licensee to periodically place funds into e trust fund or escrotv account so that the total amount of funds would be sufficient to pay for decommissioning at the time termination of operations is expected. For materials licensees and nonelectric utility reactor licensees, a sinking fund must be combined Approved: June 12,1996 9

(Revised: Drnft 7/15/97)

Vclume 8, Ucensee Oversight Programs -

Decommissioning Financial Assurance Instrument Security Program llandbook 8.12 . .

'l)fp0S OfInStrumentS (F)(continued) with a surety, insurance, or guarantee instrument so that the decommissioning can be fully funded at any time. As the value of the sinking fund increases with time, the coverage under the surety, insurance, or guarantee instrument may be decreased. (11) l l

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Approved: June 12,1996 10 (Revised: Draft 7/15/97)

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$2,129/43 7, Xy -

John Doc, Inc.

Uc. No. YYYYYYYY liond; No. AAAAA Reliance Insurance &

10-31-90 Until car celled

$43JXX)JXX) 10-31-90 3 C" I[

"7 United Pac. AE 93

< Insurance C w O

$E e oc S*.andby Tr.ist Corestates 11-16-90 Until $31.200,0(X) 11-16 90 - m-Bank cancelled [ ~

w e 1] l

'* ge Ikmd Amendment; Reliance 11-5-92 Until $13,630,000 11-5-92 g f No. AAAAAA Insurance & cancelled J = C; e  ;

United Pac. p -

Insurznce * $eEQ c

's ..-O 4 Ilome Inc. Parent Guarantec Giant ilome 1-25-91 Until $20,000/XX) 1-25-91 C

_ j]# j Co. cancelled -

p.- g {

Chief I'inancial 1-25-91 Until C CC % E Officer's letter cancelled y

,, Q. . .

Auditor's letter 1-30-91 Until m mT l cancelled

• ggj ,

Chief Executive 1-25-91 Until N3 w

Officer's letter canecited %33 a : m 3

M Volurne 8, Licensee Oversight Programs * .

Deconunissioning Financial Assurance Instrument Security Progrant

, llantibook 8.12 E.*;hibits t .

7 '

Exhibit 2 Financial Assurance Inver:ory Log 3

E C

g:k 155 k -

[ bit l 'd pi.ESS WYSE k i=l A

b k

w._fc$

Es EE t:

3 s

Tl a

h}t /.

%Y I

25" Approved: June 12,1996 12 (Revised: October 1,1996)

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