ML20205B998

Informs That Authority & Sce&G Has Ownership Interests of one-third & two-thirds,respectively in VC Summer Nuclear Station.Operating License Scheduled to Expire in 2022.Rept Addresses Decommissioning Cost Estimates & Financing

ML20205B998
Person / Time
Site:	Summer
Issue date:	03/29/1999
From:	Chaplin M External (Affiliation Not Assigned)
To:	NRC
References
NUDOCS 9904010048
Download: ML20205B998 (5)

Text

. _ _ _ _ _ _ _ . _

Santee Cooper.

• one Fbverwood Dnve Po Box 2946101 Moncks Comer. SC 29461-2901 March 29,1999 *43)76'

• U. S. Nuclear Repdatorv Commission One White Flint North 11555 Rockville Pike Rockville, Maryland 20852

Subject:

Virgil C. Su_nmer Nuclear Station Docket No. 50/395 Operating License No. NPF-12 He South Carolina Public Senice Authority's Report Pursuant to 10 CFR { 50.75 (f)(1)

Gentlemen:

As provided in 10 CFR { 50,75 (f)(1), each power reactor licensee is required to report to the Nuclear Regulatory Commission (NRC) on a calendar year basis, beginning March 31,1999, and every 2 years thereafter, on the status ofits decommissioning funding for each reactor or share of reactor it owns. This letter is being filed with the NRC by the South Carolina Public Senice Authority (" Authority") pursuant to that provision. .

The Authority and the South Carolina Electric & Gas Company ("SCE&G") have ownership interests of YV one-third and two-third.s, respectively, in the Virgil C. Summer Nuclear Station ("VCSNS"). VCSNS, located in Jenkinsville, South Carolina, is a pressurized water reactor ("PWR") producing 2,900 MWt.

The operating license is scheduled to expire in 2022.

6[

Thir report addresses decommissioning cost estimates and fmancing arrangements relative to the Authority's one-third ownership share in VCSNS. Attachment 1 provides calculations and other information used to establL,h the current NRC minimum funding requirement. Calculations are revised at least annually in accordance with NRC regulations. Funds accumulated to provide for NRC minimum requirements are retained in an external sinking fund as provided for in 10 CFR { 50.75. The market value of the external fund as of December 31,1998 was $ 24,082,988. As an agency of the State of South Carolina, the Authority is permitted to use an external trust fund to provide fmancial assurancc diat future decommissioning costs are properly funded. See,10 CFR { 50.75(e)(1)(ii)(A). A copy of the trust fund agreement was previously provided to NRC in a filing dated July 26,1990. SCE&G has advised the Authority that it will disclose the required information relative to its two-thirds ownership share in a separate NRC filing.

It is important to note that NRC minimum funding calculations include only those costs incurred by licensees to remove a facility or site safely from senice and reduce residual radioactivity to a level that permits: (1) release of the property for unrestricted use and termination of the license; or (2) release of the property under restricted conditions and termination of the license. The cost of dismantling or demolishing non-radiological systems and structures is not included in the NRC minimum decommissioning cost estimate. Likewise, the cost of managing and storing spent fuel on site until transfer to the Department of Energy for permanent disposal is not included in NRC cost formulas.

9904010048 990329 PDR 4

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We're Putting Our Energy to Work for You.

4 U. S. Nuclear Regulatory Commission March 29,1999 Page Two .

e i Decommissioning costs in excess of NRC minimum requirements were identified in a site-specific study completed in 1991, Based on the site-specific study, the Authority's one-third share of total decommissioning cost is estimated to be approximately $156,500,000 (1998 Dollars). This exceeds NRC minimum funding requirements by approximately $66,000,000 (1998 dollars). The Authority provides for its one-third share of estimated additional costs through an intemal fund. The market value of this internal fund was $35,661,199 as of December 31,1098.

A new site-specific study is now underway. It is expected to be completed in May 1999. The results of this study will provide a better estimate of eventual decommissioning costs.

If there are any questions concerning this report, please contact me at (843) 761-4093 or Michelle

- Leonard at (843) 761-8000, extension 5527.

Sincerely,

/1/.? aJJI C axie C. Chaplin g Senior Vice Presid@'

Generation MCC:ML:sbg -

Attachment cc: L. A. Reyes L.M. Padovan R. S. Wood NRC Resident inspector

.s Attachment 1 9

• 1(a). The minimum decommissioning fund estimate, pursuant to 10 CFR f 50.75 (b) and (c). $9(L531.507 N_between 1.200 MWt and 3.400 MWt Estimated Cost (Year X) = (1986 $ Base Cost)(ALx + BEx + CBx)

= ($100,520,000) ((.65 x 1.558) + (.13 x .848) + (.22 x 7.173)1

= $271,504,520 Authority's one-third ownership share of 1998 Estimated Cost = $90,501,507 Where:

p = 2,900 MWt A = .65 (NUREG 1307 Rev. 8)

B = .13 (NUREG 1307 Rev. 8)

C -= .22 (NUREG 1307 Rev. 8)

Lx = 1.558 (Computed Below)

= .848 (Computed Below)

Ex

= 1.117 (Computed Below)

Px Fx = .478 (Computed Below)

Bx =

7.173 (NUREG 1307 Rev. 8) 1986 $ Base Cost = ($75,000,000 + .0088pmillion)

= ($75,000,000 + 25,520,000) '

= $100,520,000 Lx = (138.1)a im X (1.441)soigr /(127.7)s im

= 1.533

= 12/98 Value / January 1986 Value Px

= 127.5/114.2

= 1.117

= 12/98 Value / January 1986 Value Fx

= 39.2 / 82

= .478

=

Ex ((.58Px) + (.42Fx)}

=

((.58 x 1.117) + (.42 x .478)}

= .848 December 31,1998 values in the following Bureau of Labor Statistics indices were used to compute NRC minimum requirements: 1 Employment Cost Index-South Region SeriesID: ecul32021 Producer Price Index - Commodities Series ID: wpu0543 Producer Price Index - Commodities Series ID: wpu0573 1of3 I

4 Attaclunent 1

, ', I 1(b). Escalation of the Authority's one-third share of the minimum funding requirement to the year 2022.

FV = (PV) (1 + I)"

Where PV = $90,501,507 1 = 3%

n = 23 years FV = ($90,501,507)(1 +.03)"

FV = $178,684,403.

2. The market value of the external trust fund at December 31,1998 for items $ 24.082.988 included in 10 CFR 6 50.75.

(NOTE: Effective yield is applied to book value of portfolio in item 3 below).

3. A schedule of annual amounts remaining to be collected for items in 10 CFR s 50.75.

External Trust .

Monthly Payment Ben. Book Value Annual Pmt Earnings Ending Bal. $141,825 1999 $20,410,468 $1,701,900 $1,370,767 $23,483,135 2000 23,483,135 1,701,900 1,577,127 26,762,162 Rate 2001 26,762,162 1,701,900 1,797,347 30,261,409 0.06716

-2002 30,261,409 1,701,9( 0 2,032,356 33,995,665 2003 33,995,665 1,701,900 2,283,149 37,980,714 'l 2004 37,980,714 1,701,900 2,550,785 42,233,399 2005 42,233,399 1,701,900 2,836,395 46,771,694

'2006 46,771,694 1,701,900 3,141,187 51,614,781 j 2007 51,614,781 1,701,900 3,466,449 56,783,130 2008' 56,783,130 1,701,900 3,813,555 62,298,585 2009 62,298,585 1,701,900 4,183,973 68,184,458 l 2010 68,184,458 1,701,900 4,579,268 74,465,626 2011 74,465,626 1,701,900 5,001,111 81,168,637

.2012 81,168,637 1,701,900 5,451,286 ' 88,321,823 2013 88,321,823 1,701,900 5,931,694 95,955,417 i 2014 95,955,417 1,701,900 6,444,366 104,101,683 l 2015 104,101,683 1,701,900 6,991,469 112,795,052 l 2016 112,795,052 1,701,900 7,575,316 122,072,267 2017 122,072,267 1,701,900 8,198,373 131,972,541 2018 131,972,541- 1,701,900 8,863,276 142,537,717 2019 142,537,717 1,701,900 9,572,833 153,812,450 2020 153,812,450 1,701,900 10,330,044 165,844,394 2021 165,844,394 1,701,900 11,138,109 178,684,403 2022 178,684,403 Total $20,410,468 $39,143,700 - $119,130,235 $178,684,403 2 of 3

'e

. .i Attaclunent 1 4.

The assumptions used regarding escalation in decommissioning cost, rates of earnings on decommissioning funds, and rates of other factors used in funding projections follow:

Costs will escalate with inflation at 3% per year.

Waste vendors will be utilized.

The Authority's Board of Directors is empowcred as a state regulatory authority to set rates and charges necessary to provide for the Authority's expenses and has complete regulatory authority over the utility.

The Board of Directors has authorized use of the effective yield of the trust portfolio for determining future decommissioning funding requirements.

The tmst fund will accrue earnings at the trust portfolio's 12/31/98 effective yield of 6.716*/..

All funds must be available at 2022 when the plant is shut down.

Interest earnings are credited to the trust fund account at the end of each year.

• Levelized payments into the fund.

5.

Contracts upon which the licensee is relying pursuant to 10 CFR f 50.75 (e)(1)(v).

None.

) 6. Modifications to the current funding assurance methods.

None.

7. Material changes to Trust Agreements.

Effective September 1,1990 NationsBank, N.A. (Carolinas) was named the successor trustee to Citizens and Southern National Bank of South Carolina. Effective October 18,1996, NBSC was named successor trustee to NationsBank, N.A. (Carolinas).

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