ML20205K538
| ML20205K538 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 03/31/1999 |
| From: | Feigenbaum T NORTH ATLANTIC ENERGY SERVICE CORP. (NAESCO) |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| Shared Package | |
| ML20205K542 | List: |
| References | |
| RTR-NUREG-1307 NYN-99027, NUDOCS 9904130262 | |
| Download: ML20205K538 (10) | |
Text
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Docket No. 50-443 NYN-99027 United States Nuclear Regulatory Commission Attention: Document Control Desk Washington, D.C. 205$5 Seabrook Station, Unit No.1 Decommissioninc Fundine Status Report North Atlantic Energy Service Corporation (North Atlantic), as agent for the Joint Owners of Seabrook Station, Unit No.1, provides as Enclosure (1) the decommissioning funding status report pursuant to 10 CFR 50.75(f)(1). Also provided in support of the attached ftmding status report is Enclosure (2), a copy of North Atlantic's March, 1999 Seabrook Station Decommissioning Update which is also being submitted to the State of New Ilampshire's Nuclear Decommissioning Financing Committee (NDFC) pursuant to New llampshire Revised Statute (Annotated), RSA 162-F. In accordance with RSA 162-F and a 1995 NDFC order, North Atlantic submits an annual decommissioning update to the NDFC, and every four years, this annual update also includes a comprehensive review and recalculation of the decommissioning cost estimate. North Atlantic's update to the NDFC in 1998 included the comprehensive review and recalculation of the site-specific cost estimate. The 1999 filing is an update to the comprehensive review of the cost estimate to reflect the current DOE projected schedule for acceptance of spent fuel. The report to the NDFC is pertinent to this submittal since much of the material provided to the NDFC is directly responsive to the information required by 10 CFR 50.75(f)(2). Enclosure (1) provides references to the applicable material in Enclosure (2), the report to the NDFC.
Seabrook Stat'on's total site specific cost estimate is $524.8 million in 1999 dollars. North Atlantic's decommissioning cost estimate and fund.ng schedule not only covers the re iuired g 1 scope per 10 CFR 50.75(b) and (c), but also provides funding for on-site storage of spent fuel j
during the decommissiEning period, for demolition and removal of systems, components, and I.
structures that are beyond the scope of 10 CFR 50.75, and for restoration of the site. Table 9 of the report to the NDFC provides a reconciliation of the site-specific estimate and the requirements of 10 CFR 50.75. As indicated in this table, $376.2 million of the total site-specific zo*g' estimate is allocated to decommissioning activities that must be performed under the 10 CFR i
50.75 requirements. Using the methodology in NUREG-1307, Revision 8, the minimum amount 9904130262 99033143j PDR ADOCP. 0 m
b U.S. Nuclear Regulatory Commission t
NYN-99027 / Page 2 required by 10CFR50.75 to perform these same activities is $290.7 million in 1999 dollars, or about $85.5 million less. Including the remaining site-specific costs results in a total site-specific estimate for Seabrook Station that is approximately $234 million greater than the NRC minimum amount.
In its 1998 submittal to the NDFC North Atlantic's site-specific estimate was $473.6 million in 1998 dollars versus a 10 CFR 50.75 minimum value of $489 million in 1998 dollars calculated using NUREG-1307, Revision 7 guidelines. Accordingly, North Atlantic proposed to fund to the
$489 million value. A decision from the NDFC on the 1998 preposed funding schedules has not yet been issued. Pending a decision from the NDFC, the Joint Owners of Seabrook Station are continuing to fund on the basis of the last approved schedule (approved November,1997 with effective date of January,1998) with the exception of Great Bay Power which is funding its entire decommissioning obligation on an accelerated basis (25 years), and New England Power which is funding a small portion ofits decommissioning obligation on an cccelerated basis (25 years). Under the last approved funding schedule, the site-specific decommissioning cost estimate of $450.6 million in 1997 dollars ($473.1 million in 1998 dollars or $496.8 million in f
1999 dollars) is currently being used as the basis for funding. When the NDFC rules on the funding schedules submitted in March 1998, the Joint Owners will make adjustments to their funding schedules as required.
The funding achedules proposed in Enclosure (2) would become effective January, 2000 if approved by the NDFC. An NDFC ruling on the currently pending funding schedule; submitted in 1995 could impact the funding schedules in Enclosure (2). These funding schedules will be revised as necessary to accommodate the pending NDFC order on the funding schedules submitted in 1998.
Should you have any questions regarding this letter, please contact Mr. Anthony M. Callendrello, Licensing Manager at (603) 773-7751.
Very truly yours, NORTil ATL ANTIC ENERGY SERVICE CORP.
W M
Ted C. Feigenba Executive Vi President And Chief Nuclear Officer j
i Enclosures L-
U.S. Nuclear Regulatory Commission NYN-99027 / Page 3 cc:
- 11. J. Miller, NRC Regional Administrator J. T. Harrison, NRC Project Manager, Project Directorate 1-3 R. W. Lorson, NRC Senior Residen.t Inspector Mr. Steven R. Hom, Esquire J
Office of General Counsel United States Nuclear Regulatory Commission Wa shington, DC 20555-0001 Mr. Robert S. Wood Office of Nuclear Reactor Regulation United States Nuclear Regulatory Commission Washington, DC 20555-0001 Mr. Douglas Patch, Chairman Nuclear Decommissioning Financing Committee NII Public Utilities Commission 8 Old Suncook Road Concord, NH 03301 Mr. Edward A. Haffer Sheehan Phinney Bass & Green 1000 Elm Street Manchester, NH 03105-3701 e
r NYN-99027 J
l i
Decommissioning Funding Status Report Cook,N.
e-mail Cuoco, L. M.
e-mail Garfield, G. G.
e-mail Gillespie, J.
Millstone 475/5 l
Kacich, R. M.
e-mail Millstone Nuclear Licensing e-mail Quinlan, W. J.
e-mail Letter Distribution e-mail File 0001 01-48 File 0052G 01-48 Joint Owner Decomm. Working Group Keane, J.
NU Lesy, L.
- NU k'nste, W.
NU 44D 02-06 l
I t
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Seabrook Station Unit 1: Decommissioning Funding Status Report
- 1. The minimum decommissioning fund estimate, pursuant to 10 CFR 50.75(b) and (c):
$290.7 million 1999 dollars (see Table 8 of Enclosure (2) for calculation)
- 2. The total amount accumulated in the decommissioning fund as of the end of1998:
594.4 million (see Page I-10 of Enclosure (2) for supporting information)
As indicated in this table, $376.2 million (~77%) of the total site-specific estimate of $524.8 million is allocated to decommissioning activities that must be performed under the 10 CFR 50.75 requirements (see Enclosure (2), Table 9). Using the methodology in NUREG-1307, Revision 8, the minimum amount required by 10CFR50.75 to perform these same activities is
$290.7 million in 1999 dollars, (see Enclosure (2), Table 8) which is ~55% of the total site-specific estimate. These same percentages can be applied to the $94.4 million fund balance.
- 3. The schedule of the annual amounts remaining to be collected:
Based upon the current site-specific estimate of $524.8 million 1999 dollars, $430.4 million remains to be collected. Again, as indicated in Enclosure (2), Table 9, only $290.7 million
(~55%) of the total site-specific estimate of $524.8 million is needed to comply with the NRC minimum value. Table 9 also indicates that, on a site-specific basis, North Atlantic estimates that a larger portion, $376.2 million (~77%), will be needed for the decommissioning activities that form the bais for the NRC minimum value. These same percentages can be applied to the amounts remaining to be collected. Attachment D in Enclosure (2) provides the proposed funding schedules for years 1999 through 2026 needed to provide the balance of the funding by the currently planned plant permanent shutdown date of October,2026. Attachment D provides the overall composite funding schedules and related information and provides the corresponding information applicable to each of the Seabrook Station Joint Owners. The components and mechanics of the funding schedules are discussed in detail at Page I-7 of Enclosure (2).
- 4. The assumptions used regarding rates of escalation in decommissioning cost, rates of earnings on decommissioning funds, and rates of other factors used in funding projections:
Decommissioning costs are assumed to escalate at 5% per year. This rate is based upon the application of cost escalation factors in several cost categories using DRI data for years 1999 through 2026 applied to the projected decommissioning costs in these categories. The basis for the 5%Ts discussed on Page IV-2 of Enclosure (2). The calculated components of the cost escalation and the DRI data are provided in Tables 3 and 4, respectively, of Enclosure (2).
2/18/99 I
t Seabrook Station Unit 1: Decommissioning Funding Status Report Attachment C of Enclosure (2) provides a report on the investment consultant's review of the funding schedule and investment assumptions. The report includes a detailed discussion of pertinent matters including inflation, investment return assumptions, key assumptions for the funding schedules, and conclusions.
- 5. Any contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(v):
There is one such contract for Seabrook Station. The contract consists of an agreement among Public Service of New Hampshire, North Atlantic Energy Corporation, and the State of New Hampshire. The agreement obligates Public Service of New Ilampshire (the buyer) to purchase the 35.98201% share of Seabrook Station's unit capability and actual net energy output owned by North Atlantic Energy Corporation (the seller). Both Public Service of New Ilampshire and North Atlantic Energy Corporation are wholly owned subsidiaries of Northeast Ut. ' ties. A copy of the agreement is provided as Enclosure (3). Pertinent provisions of the agreemei as it relates to decommissioning costs are as follow ~
During the term of the contract, the buyer purchases and accepts from the seller and seller e
sells and delivers to buyer all of the seller's ownership share of the capability of Seabrook j
Station and the actual net energy output of Seabrook Station (Section 3, pages 5-6).
The buyer pays the seller's cost of sersice which specifically includes the seller's portion of the decommissioning costs (Section 6, page 7 and Schedule I (termination costs, page 2S and decommissioning costs, page 4S)).
In the event the ter:.. of the contract ends at a time when the seller continues to incur decommissioning expenses, the buyer will continue 6 pay such amounts to the seller for so long as the seller continues to incur such expenses (Section 6, pages 7-8).
This agreement was approved by the New Ilampshire Public Utilities Commission in Order No.
19,889 of July,1990 concerning NH PUC docket 89-244. The agreement was also approved by the Federal Energy Regulatory Commission in Opinion No. 364 of August,1991 concerning FERC docket numbers EC90-10-000, ER90-143-006, ER90-144-000, ER90445-000, and EL90-9-000.
- 6. Any modifications to a licensee's current method of providing financial assurance occurring sin e the last submitted report.
This is the initial status report for Seabrook Station. Thus, there have been no changes since a prior report. With the exception of Great Bay Power, all of the Seabrook Station owners 2/18/99 2
1
Seabrook Station Unit 1: Decommissioning Funding Status Report currently rely upon traditional cost-of-service ratemaking to comply with the NRC's financial assurance requirements. Great Bay Power does not have a franchise territory and cannot rely upon cost-of-service ratemaking. New Hampshire has enacted legislation requiring the remaining joint owners of Seabrook Station to be proportional guarantors of Great Bay Power's decommissioning obligations in the event Great Bay Power is unable to meet these obligations.
The NRC has deterrained that this legislation constitutes an acceptable financial assurance methodology for Great Bay Power.
- 7. Any material changes to trust agreements.
This is the initial status renort for Seabrook Station. Thus, there are no material changes to trust agreements since the last report.
- 8. Other matters.
Attachment C to Enclosure (2) provides a review of the funding schedule and investment assumptions for Seabrook Station. For certain of the sinking funds available for election by the joint owners, the assumed real rates of return are greater than 2%. Attachment B to Enclosure (2) provides documentation that the State of New Hampshire's Treasurer has concurred in the assumed real rates of return for each of the available decommissioning trust funds. Certain of the currently approved trust fimds submitted by North Atlantic in March 1997 and approved by the NH NDFC in November 1997, also have assumed real rates of return which exceed 2%. This is also the case for certain of the funds associated with the pending funding schedules submitted by North Atlantic in March 1998. Thejoint owners of Seabrook Station fund to the funding schedules approved by the NDFC. Certain of the joint owners may, if they elect to do so, fund at a rate higher than the funding schedules approved by the NDFC.
2/18/99 3
Seabrook Station Unit 1: Decommissioning Update-March 1999 t
2/18/99 i
l SHEEHAN j
PHINNEY BASS +
Writer's Direct Dial GREEN (603) 627-8115
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ASSOCIATION March 31,1999 D+
Douglas Patch, Chairman AMRNEYS AT LAW Nuclear Decommissioning Financing Committee WO Eue SmrT NH Public Utilities Commission PO B
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8 Old Suncook Road.
MANCHESTER N m H - nar Concord, NH 03301 03105-3701 603-668-0300 fax 60.t627-8121 Re: 1999 Seabrook Station Decommissioning Update "3*'"""^EM
Dear Mr. Patch:
New HmHas 303s}:$$
Enclosed is Seabrook Station's 1999 Decommissioning Annual Update. For 3
Fu 603-2244899 1999 the update does not include a comprehensive review and recalculation of the 1Ho m Puce Cost estim-te, but the cost estimate has been updated to reflect the latest proje ',
for the removal of spent fuel based upon information in the Department of Ent,, f s consuocrn NmHwmm December 1998 viability assessment of Yucca Mountain. The content and format of 6c$$3$!
this report are in accordar.ce with the Nuclear Decommissioning Financing fax 603-433-3126 Committee's Fourth Supplemental Order, dated November 21,1995. In accordance with the commitments in the 9S-1 proceedings, North Atlantic has provided a
% p, graphic representation of the interfaces between and among the parties discussed i-so0-625-srac wonto wn wes snt:
under " Roles and Responsibilities" in Section I of the report, and the pages in the http //www.sheehan.com report, including attachments, have been consecutively numbered.
The 1999 update consists of four sections:
Section 1 (Introduction) provides basic information and definitions of terms related to the decommissioning fund and assumptions underlying the fund and funding schedule.
Section 2 (Financial) provides, by reference to attachments, the Annual Report on financial aspects of the update, including the Investment Consultant's report and the proposed ftmding schedule.
Section 3 (Technical Issuu Update) provides a summary status on Low and High Levd Radioactive Waste disposal issues, a review of State and Federal regulatory issues, and the status of decommissioned commercial nuclear reactors in the United States.
Section 4 (Cost Update) updates the March 1998 site-specific cost estimate based upon the currently projected schedule for the removr.1 of spent fuel from Seabrook Station.
I Douglas Patch, Chairman March 31,1999 Page 2 l
The total projected site-specific decommissioning cost for 1999 is $524.8 million in 1999 dollars, about 2.2% higher than the 5489 million in the 1998 estimate when expressed in 1999 dollars. The D98 estimate was based upon the calculated NRC minimum value per 10 CFR 50.75 since the 1998 site-specific estimate was lower than the NRC minimum value. Because of a significant change to the NRC's guidance document since the 1998 update, the 1999 NRC minimum value is now well below Seabrook Station's 1999 site-specific estimate. Therefore, the site-specific estimate is again the basis for the proposed funding schedule.
The proposed funding schedule has been revised to reflect actual fund balances as of December 31,1998 and changes in fund elections by certain of the Joint Owners. Since the NDFC has not yet issued an order for proceeding 98-1, the proposed funding schedules do not reflect the higher funding that North Atlantic proposed for years 1999 and 2000. Also, the funding schedules continue to reflect a 36 year funding period with the exception of Great Bay Power for which a 25 year funding period is applied. Although New England Power is on record as supporting a 25 year funding period, and has committed to fund its Granite State Electric portion over 25 years, the funding schedules included herein, assume that New England I
Power is funding over a 36 year period. The proposed funding schedule also reflects a change in the assumed time period over which decommissioning funds will be expended. The currently approved schedule assumes a decommissioning period from 2026 to 2032. The pending funding schedule submitted in 1998 assumed a base decommissioning period from 2026 to 2037 and an additional decommissioning delay contingency that extended the decommissioning period to 2042. The increased base decommissioning period and the delay contingency resulted from assumed delays in removing spent fuel from the site. For 1999, an additional delay of 4 years has been applied based upon the latest projections for the removal of spent fuel from the site. Thus the 1999 funding schedules proposals assume funds will be expended over the period 2026 to 2046. All other assumptions in the funding schedule--
inflation rate, decommissioning cost escalation, and fund earnings assumptions--
remain consistent with those previously approved by the NDFC.
Sincerel >
(/
Edwar A.Haffer
/
EAH/Imm Enclosures I
cc w/ enclosures by maih Attached Service List L