ML20207H103

Voided Matls Licensing Action for Frontier Technology Corp. Control:300224

ML20207H103
Person / Time
Site:	07003025
Issue date:	02/23/1999
From:	Gill C NRC OFFICE OF INSPECTION & ENFORCEMENT (IE REGION III)
To:	NRC
References
300224, NUDOCS 9903120243
Download: ML20207H103 (90)

Text

.

-O v0io Saeer O TO: License Fee Management Branch FROM: Rill C888lFT f 6KC l

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SUBJECT:

VOIDED APPLICATION Control Number: 87DddY Applicant: [M4 Mda, foovim .1 / o License Number: JdM-/9M i Docket Number: 090 - O'M2f Date Voided: $8t<w 2 7./f '

77

.9 Reason for Void: //o b. C AI4m Iar::,Ae a .al-w A fal0boawr L1jma$9 u m<.vA /d au >vesm.

ou / p- l l

ha ] b&

s ?bShi' Signature Date l l

Attachment:

Official Record Copy of 1 Volded Action -

FOR LFMB USe ONLY Refund Authorized and processed l

No Refund Due

/

! Fee Exempt or Fee Not Required 0

l Comments: Log completed /

Processed by: I M 3 // ik l l

! ,,,.-4 n 9903120243 990223 l l

PDR ADOCK 07003025 i i C DP 1 Q i

O O '

'r O

(FOR LFMS USE)

Q BETWEEN:

INFORMATION FROM LTS License Fee Management Branch, ARM Program Code: 03212 Q and Regional Licensing Sections i Status Code: 0

Fee Category: 3B ID 3P

Exp. Date: 20020831

Fee Comments: MFC & CAL Q  ::::::::::::::::::::::qd Decom Fin Assur Re Y LICENSE FEE TRANSMITTAL O A. REGION

1. APPLICATION ATTACHED Q Applicant / Licensee: FRONTIER TECHNOLOGY CORPORATION Received Date: 961018 Docket No: 7003025 Control No.: 300224 Q License No.:

Action Type:

SNM-1957 Amendment

2. FEE ATTACHED Q Amountt Check No.: [ ~ ~, _,k[ ~ ~[

l

3. COMMENTS O Signed Date ~~~~(b~~

I-2 Fj~[~~__~

___ _ _~[

Q B. LICENSE FEE MANAGEMENT BRANCH (Check when milestone 03 is entered /__/)

1. Fee Category and Amount:

Q 2. Correct Fee Paid. Application may be processed for:

Amendment ____._____.___

p

3. OTHER __,,______,,,___,____,,____,,,,____

Q Signed D a' >

O O

O O

, s FRONTIER TECHNOLOGY CORPORATION P.O. Box 486

• 1641 Burnett Drive

• Xenia OH 45385 Tel: 937 376-5691 Fax: 937 376-5692 NRC License Number SNM-195 1

The Huntington National Bank Corporate Trust Department 41 South High Street - HClll2 Columbus OH 43215 October 16, 1996 STANDBY TRUST AGREEMENT - AMENDMENT NO. 3 I U.S. Nuclear Regulatory Commission Region III l Attention

Mr. Charles Gill Materials Licensing Section 801 Warrenville Road Lisle Illinois 60532-4351 Gentlemen:

We hereby amend our Standby Trust Agreement issued in favor 4 of the U.S. Regulatory Commission (NRC) to modify the third and {

fourth paragraphs as follows:

"WHEREAS, the Grantor has elected to use a certificate of deposit l to provide all of such financial assurance for the facilities i identified herein; and WHEREAS, when payment is made from a certificate of deposit, this standby trust shall be used for the receipt of such payment; and" ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

This modification replaces Letter of Credit No. issued by Huntington Bank with Certificate of Deposit No issued by Huntington Bank. An original signed copy of Certificate of Deposit No. has been sent to the NRC, Region III. i FRONTIER TECHNOLOGY CORPORATION Edward F. Ja ow President

~ _

Treva L. Janzow, Secretary / Treasurer RECEIVED l

Enclosure:

Certificate of Deposit OCT 181996 N

REGION III P]MfltPyM{Sk t\h $$di A 3gggf DCT 18 IB6

n.onopaks .. .

.B i

FRONIIER TECHNOLOG L RPORATION 31-1119767 - JULY 26 1993 I [ , , ,

L ,- ,  ;, ,

t.3: rir 4

1

, .h .+,

',c[f h N h$s~ deposited the'amcNkof { hj s {

( PO BOX 486 , ;t ', ,*t e

• XENIA OH 45385-0486 <

- . f.,i (,i.,i,1' -<. - $87,000.00r' !!!

' I l l . in a  : i t lr ,' <

,7 .: r- ,,; ,, l idertificate of deposit account with The Huntington National Bank. The terrn of',this acc5ur t is + 12 MONTHS I!

-  ;- , , A .;< s,j., <, ,,'I s;' with ia maturity date of JULY 26 1994 . This account ( ' Y will will not) automatically renew at maturity. The

,i ' ' '

~~

ll , *!

{ +{f;j;5j i

linterest rate for this account is ( X a FlXED rate until the maturity date- ' ' 'a . VARIABLE rate" '

- a STEPPED rate).

r'I'

' .' 6 s . .

'lri'....*h.e',,r'!.i[dfE!Skie!!k: f!i!!b.iffh[fbfll E

. FIXED-RATE ACCOUNT

The interest rate is W s

% with an annual percentage yield of Lan .%.;

,'I ~1l ij f '

.' ((;l' Q,yW;i; t. !

3 VARIABLE-RATE ACCOUNT: The beginning interest rate is  % dvrth an annual percentage yield  %. of ' '

,- The interest rate and annual percentage yield may change as set forth in.the Rules and Regulations,for'this acebunt. if this I "LINEis marked ~

, the beginning interest rateis not based on the index Used to mak$ later'ch'angds. YouIwill l i- '~

.be paid this rate until/ lor  ?' ' '

1. t.'After that $me, the.Intere' sbr' ate aEcf a5n'ual

-l percentage;yleid may change as set forth in the Rules and Regulations , ;Q!Qf)i

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i,$- i f ,; ,' , ,

L il ' s 4?'! W ;1 ia ; ;/ % birti(('M .Wfd b,jii i'  %[ ,f l M ST5PPND-RATE' ACCOUNT: The annual percentage ' ' *2. N I5 yleid EN is! , ' 'bfi kI !I 7:, ,1- Interest Rate: Beginning Date: Ending -Date:: 't_ '

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interest will be computed using a daily rate of ( 1/360th y 1/365 or 1/366 in a leap year) of the annual rate for each day.

I compounded daily

Int *. rest will be ( compounded annually simple interest without compounding). Interest -

) will be paid MONTHLV to/by 01441821627 . This certificate is j ithly, Quanerty, semi-annually, at maturity) (method of disbursement) w 1 NON-NEQOTI4BLE N ANSFE BLE. The minimum opening deposit for this account is $ s10.000.00

, (

, ,3 O AUTHOHi2ED AIGNER ACCOUNT NUMBER l *^""""""**^a^" ACCOUNT REDEMPTION / CLOSURE REQUEST DATE:

05 20502 (nEV Su l

1' FRONTIER TECHNOLOGY CORPORATION 31-1119767 I,

1

PO BOX 486 XENIA OH 45385-0486

] This a a t p orrect copy of the original certificate number 6 l 9 5c23 Philip R.^Teusink Vice President y yy d b ey p l i

) euoonstutut44coutst ron neoturriou '

d k v. V i Ii 3 J

J

(~oonstutumoutsuon atotemo~

5 9 9 9 L. L. 78 78: 1

-. - - . - - . . _ - - . . . - - ._-- - . . . , - _-_. -- . ~ . . . . . . . -.

a.O..

• Baks FRONTIER TECHNOLo v CORPORATION n u. ..

31-1119767 N Dttk""* N S*

• 0 s o:4Esntka JULY 26 1993: '

, .6 ,.

i% f' ; .." has deposited the amount of i i .

PO DOX 486 .> ,,

XENIA OH 45385-0486 ,i S87,000.00

,in a t- '

6 colrtificate of deposit account with The Huntington National Bank. The term of this account is + 12 MONTHS with l- ,, ,. o. ,, , s ia matunty date of JULY 26 1994 . This account ( , Y will ' 'will not) automatically renew at' maturity. The

,6 '

,;o', . ,';

linterest rate for this account is ( X a FIXED rate until the maturity date ' 3Ia VARIABLE rate a STEPPED rate).

II t hQj '! ith U ;tria .

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. .' ' ' g i ! , .' * , , ,,9)f!I[hhtj/ht',il' i le tt

0 ,I ! '

%.j{fil

', I 1L ' FIXED-RATE ACCOUNT: The interest rate is t is  % with ar! annual percentage. yield of _Lan ..

, , ,ti!. .i' ,, , l.  ;-[';ph,.i,  ;, '

lt ' '

• i,

• VARIABtI-RATE ACCOUNT: The beginning interest rate is  % with an annual percentage yield of ' '

r. ' The interest rate and annual percentage yield may chaige as set forth in'the Rules and Regulations for this account. If this

, QNE* is ynarked.L , the beginning interest rate is not based,on the index used to make later changes. You will

',,i-

• i, { ,percentage.. ,be paid thischangerateasuntil/ set forthlor

r. v, ;l'

< t' o i .: ; l -' d j ,7 i a yield rnay f,

in the Rules and Regulations.' , ' ,

.. ,'t' Q U'd 'p , .'.; y'j

', , , After i',.,-

that'*['

',time, the t ,  : -t.. . *1 r. .l' m  ; STEPPED-RATE ACCOUNT: The annual percentage yield is  %.; p ,

J't'  !

,,,7 . interest Rate: Beginning Date: Ending Date:'

, 3,, : ,T : ;

t. .iq .

lotsrest will be computed using a daily rate of ( 1/360th - X 1/365 or 1/366 in a leap year) of the annual rate for each day. I I compounded daily interest will be ( compounded annually simple interest without compounding). Interest will be paid HONTHLY ' to/by 01441821627 Afhonthly, quarterly, somFannualty, at matunty) . This certificate is

- ~~ . (method of disbursement)

NON-NEGOTIABLE ND ANSFE BLE. The minimum opening deposit for this account is $ S10.000.00

%3 _/s'

, ,y -

AllTHOHl2ED blGNER ACCOUNT NUMBER n.m ni ona ._ w mi n""'

ACCOUNT REDEMPTION / CLOSURE REQUEST DATE:

05 200002 (REY 6!93)

FRONTIER TECHNOLOGY CORPORATION 31-1119767 PO BOX 486 XENIA OH 453 5-0486 This is'a EuT4 - o nect copy of the original certificate number 6

.J .

d i Philip R."Tcusink Vice President l  ?. g I

4 j

(NDORSEMLNT/itEQUEST FOR HEDEMPTION .

,( h E i

ENDOHSEMEN14tEQUES1 FOR HEDEMPTION ll 5 9 9 9 1,t. 7 8 78:

(' . ?

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)

/-.%1 10 UNITED STATES O i 6

g NUCLEAR RE2ULATORY COMMISSION '

.<- In REGION lit E {

f 801 WARRENVILLE ROAD  !

$ USLE, ILLINOIS 60532-4351

. . . . . *f ~ FEB 2 3 B99 .

I

)

Edward F. Janzow, Ph.D.

Radiation Safety Officer

' Frontier Technology Corporation 1641 Bumett Dnve

)

Xenia, OH 45385

Dear Dr. Janzow:

We have reviewed your decommissioning firiancial assurance submittal dated June 18,1997, and subsequent submittals dated January 30,1998 and January 25,1999, in response to our letter dated May 22,1997. Within the so>pe of our review, no further dormiencies were

' identified. Your financial assurance inst /uments (Certificate of Deposit and Standby Trust A9tt, ment) are approved by the NRC. A copy of this information will be placed in your license '

file.

In addition, you will note that we are enclosing originally signed, fully executed duplicates of Standby Trust Agreement Amendments No. 01 and 03 (Amendment No. 2 was never issued) to you and The Huntington National Bank. We are also retuming a number of cancelled financial assurance documents you previously submitted. These documents were replaced by submittals listed in the preceding paragraph, and include the following: (1) Irrevocable Letter of Credit dated November 14,1991 and subsequent amendments, and (2) non executed Standby Trust Agreement Amendments No. 01, dated December 22,1992, and No. 03, dated October 16,1996, if you have any questions or require clarification on any of the information stated above, you may contact us at (630) 829-9887.

Sincerely, l

Original signed by Monte P. Phillips, Chief Materials Licensing Branch License No. SNM-1957 i Docket No. 070-03025 l

Enclosures:

as stated cc w/ encl: . The Huntington National Bank 41 South High Street-HC1112 l Columbus, OH 43215 ,

1 m m ww. ,, m.v. p. -. - _ _ _ , , , . , , _

E. J:nzow 2 l

l To receive a copy of this document, indicate in the bos: "C"

• Copy without attachment / enclosure "E" = Copy wth

~~ -te . m .

OFFICE DNMS/ Rill l6 Dipe@/ Rill , lN l l NAME CGill/[CJ) NfPfiW DATE 02/23/99 03723/99 OFFICIAL RECORD COPY I

l t

I i

lllll The Huntington National Bank Huntmgton Huntington Center Columbus, Ohio 43287 ggggg January 25,1999 (614) 480 4 395 l

U. S. Nuclear Regulatory Commission, Region III Attn.: Mr. Charles Gill, Material Licensing Section  ;

801 Waivenville Road  ;

Lisle, IL 60532-4351 l

i RE: Frontier Technology Corporation l

~

Standby Trust Agreement I

Dear Mr. Gill:

I am forwarding for your signature Amendment No. I to the above referenced Standby Trust 4 l

Agreement. Please provide me with written notice to close the Standby Trust once you have executed the enclosed documents.

Should you have any questions, please call.

Sincerely,

( ..]

Rita E. Merry Trust Officer rem Enclosure cc: Treva L. Janzow Frontier Technology Corporation RECEIVED JAN 2 9 599 J

REGION III l

l Take control of your money.-

l l UAN p n vm

, . U U JAN 51999 l

FRONTIER TE<. NLOGY CORPORATION l

1641 Burnett Drive l Xenia OH 45385 -

l 1 .

I Huntington National Bank -

1 Attn: Ms. Rita E. Merry '

l Corporate Trust Dept., HC-1112 41 South High Street l l

Columbus OH 43287- i i

I January 21, 1999 l l

Dear Ms. Merry:

)

L Good morning! Now that the weather is allowing me to get l l back to work, the documents we need to have signed and sent to i the Nuclear Regulatory Commission are enclosed. I sincerely appreciate your getting involved with this paperwork. I'm looking

. forward to closing the matter with the NRC. ,

Please let me know if there is anything more that I can do J to facilitate this or if you have further questions I may be able to answer. Again, thank you very much.

l Respectfully, Treva L. Janzow Secretary / Treasurer l

I l

I l

l

. . _ _ _ . . _ . . . - _ . . . . _ . _ _ _ _ _ . . _ . . _ - _ _ _ _ _ _ - . ____>_m. .m. . . -

FRONTIER TECHNOL OY CORPORATION u n uee.. s u.u.i,37 P.O. Box 486

• 1641 Burnett Driv'e

• Xenta, Olito 45385 * (313) 376 5691

• Telex 11910 333 8287

! THE HUNTINGTON NATIONAL BANK '

CORPORATE TRUST DEPARTHENT l 41 SOUTH HIGH STREET-HC1112 l

COLUMBUS, OHIO 43215 DECEMBER 22, 1992 ,

STANDBY TRUST AGREEMENT - AMENDMENT NO. 1 l l

U.S. NdCLEAR REGULATORY COMMISSION l

WASHINTON, D.C. 20555 l

GENTLEMEN:

WE HEREBY AMEND OUR STANDBY TRUST AGREEMENT ISSUED IN YOUR FAVOR FOR THE ACCOUNT OF FRONTIER TECHNOLOGY CORPORATION TO MODIFY SECTION 5, PARAGRAPH 2 AS FOLLOWS:

l "NO WITHDRAWAL FROM THE FUND CAN EXCEED TEN (10) PERCENT OF THE OUTSTANDING BALANCE OF THE FUND UNLESS NRC APPROVAL IS ATTACHED."

i ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED. ,

1 FRONTIER TECHNOLOGY CORPORATION EDWARD F. JAN W, ESIDENT

, er T VA L. JANZOW, CRETARY/ TREASURER I

HUNTINGTON NATIONAL BANK as Trustee NUCLEAR REGULATORY COMMISSION 4 I

i .

TRUST AGREEMENT NO. 1 12/22/92 l

i l FRONTIER TECHNOLOGY CORPORATION a O nic. u ..e s.n.u. i957 l

! P.O. Box 486

• 1641 Bemett Driv'e* Xenia, Ohio 45385 * (513) 376 5691

• Telen 11910 333 8287 l

THE HUNTINGTON NATIONAL BANK CORPORATE TRUST DEPARTMENT 41 SOUTH HIGH STREET-HC1112 L COLUMBUS, 011I0 43215 DECEMBER 22, 1992 STANDBY TRUST AGREEMENT - AMENDMENT NO. 1 U.S. NUCLEAR REGULATORY COMMISSION WASHINTON, D.C. 20555 GENTLEMEN:

WE 11EREBY AMEND OUR STANDBY TRUST AGREEMENT ISSUED IN YOUR FAVOR FOR THE ACCOUNT OF FRONTIER TECHNOLOGY CORPORATION TO MODIFY SECTION 5, PARAGRAPH 2 AS FOLLOWS "No WITHDRAWAL FROM THE FUND CAN EXCEED TEN (10) PERCENT OF THE OUTSTANDING BALANCE OF THE FUND UNLESS NRC APPROVAL IS ATTACllED."

ALL OTIIER TERMS AND CONDITIONS REHAIN UNCilANGED.

FRONTIER TECHNOLOGY CORPORATION l l

EDWARD F. JANZ , P SIDENT

'v ECRETARY/ TREASURER TREVA L. JANZOW

~

A HUNTINGTON NATIONAL BANK as Trustee i

NUCLEAR REGULATORY COMMISSION f

r I b

TRUS1 AGREEMENT NO. I 12/22/92 I

i

FRONTIER TECHNOLkY CORPORATIONO m, _ _ _ ,,,,

P.O. Box 486

• 1641 Dumett Drive

• Xenia, Ohio 45385 * (513) 376 5691

• Telen 11910 333 8287 THE HUNTINGTON NATIONAL BANK CORPORATE TRUST DEPARTMENT 41 SOUTH HIGH STREET-HC1112 COLUMBUS, OHIO 43215 DECEMBER 22, 1992 STANDBY TRUST AGREEMEhT - AMENDMENT NO. I U.S. HliCLEAR REGULATORY COMMISSION WASHINTON, D.C. 20555 '

GENTLEMEN:

WE HEREBY AMEND OUR STANDBY TRUST AGREEMENT ISSUED IN YOUR '

FAVOR FOR THE ACCOUNT OF FRONTIER TECHNOLOGY CORPORATION TO MODIFY SECTION 5, PARAGRAPH 2 AS FOLLOWS "NO WITHDRAWAL FROM THE FUND CAN EXCEED TEN (10) PERCENT OF THE OUTSTANDING BALANCE OF THE FUND UNLESS NRC APPROVAL IS ATTACHED."

ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

FRONTIER TECHNOLOGY CORPORATION EDWARD F. JANZO , PR IDENT l J

TREVA L. JANZOW, CRETARY/ TREASURER HUNTINGTON NATIONAL BANK as Trustee NUCLEAR REGULATORY COMMISSION g

TRUST AGREEMENT NO. I 12/22/92

(

?

' 1 l

I l

I I

FRONTIER TECHNOLOGY CORPORATION P.O. Box 486

• 1641 Burnett Drive

• Xenia OH 45385 i Tel: 937 376-5691 Fax: 937 376-5692 NRC License Number SNM-1957 The Huntington National Bank Corporate Trust Department 41 South High Street - HC1112 Columbus OH 43215 October 16, 1996 STANDBY TRUST AGREEMENT - AMENDMENT NO. 3 U.S. Nuclear Regulatory Commission Region III Attention: Mr. Charles Gill Materials Licensing Section 801 Warrenville Road Lisle, Illinois 60532-4351 1

Gentlemen We hereby amend our Standby Trust Agreement issued in favor of the U.S. Nuclear Regulatory Commission (NRC) to modify the third and fourth paragrapns as follows:

"WHEREAS, the Grantor has elected to use a certificate of deposit to provide all of such financial assurance for the facilities identified herein; and WHEREAS, when payment is made from a certificate of deposit, this standby trust shall be used for the receipt of such payment; and" ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

This modification replaces Letter of Credit No d by Huntington Bank with certificate of Deposit No.

issued by Hungington Bank. An original signed copy o ficate of Deposit No. I has been sent to the NRC, Region III.

FRONTIER TECHNOLOGY CORPORATION HUNTINGTON NATIONAL BANK as Trustee Edward F. Ja ow, resident

& cd'96 W Treva L. Janzow, Secretary / Treasurer NUCLEAR REGULATORY COMMISSION

Enclosure:

Deposit ggRL M dh  !.t a

l

. V U-FRONTIER TECHNOLOGY CORPORATION P.O. Box 486

• 1641 Burnett Drive

• Xenia OH 45385 Tel 937 376-5691 Fax: 937 376-5692 NRC License Number SNM-1957 The Huntington National Bank Corporate Trust Denartment 41 South High Streat - HC1112 Columbus OH 43215 October 16, 1996 STANDBY TRUST AGREEMENT - AMENDMENT NO. 3 U.S. Nuclear Regulatory Commission Region III Attention: Mr. Charles Gill Materials Licensing Section 801 Warrenville Road Lisle, Illinois 60532-4351 Gentlemen:

We hereby amend our Standby Trust Agreement issued in favor of the U.S. Nuclear Regulatory Commission (NRC) to modify the j third and fourth paragraphs as follows: l 1

"WHEREAS, the Grantor has elected to use a certificate of deposit j to provide all of such financial assurance for the facilities identified herein; and WHEREAS, when payment is made from a certificate of deposit, this standby trust shall be used for the receipt of such payment; and" ALL OTHER TERMS AND CONDITIONS REMAIN UNCilANGED.

This modification replaces Letter of Credit N d by Huntington Bank with Certificate of Deposit No.

issued by Hungin ton Bank. An original signed copy o Certificate of Deposit No. has been sent to the NRC, Region III.

FRONTIER TECHNO OGY CORPORATION HUNTINGTON NATIONAL BANK E J ow, President ,

S Treva L. Janzow, Secretary / Treasurer NUCLEAR REGULATORY COMMISSION

Enclosure:

Certificate of Deposit -

l l

FI'j I j i I l[u Pl a h -

l

tO \

- V U j I

FRONTIER TECHNOLOGY CORPORATION P.O. Box 486

• 1641 Burnett Drive

• Xenia 011 45385 Tel: 937 376-5691 Fax: 937 376-5692 NRC License Number SNM-1957

)

The Huntington' National Bank Corporate Trust Department 41 South High Street - HC1112 Columbus OH 43215 October 16, 1996 STANDBY TRUST AGREEMENT - AMENDMENT NO. 3 U.S. Nuclear Regulatory Commission Region III Attention: Mr. Charles Gill 1 Materials Licensing Section 801 Warrenville Road Lisle, Illinois 60532-4351 Gentlemen j We hereby amend our Standby Trust Agreement issued in favor l of the U.S. Nuclear Regulatory Commission (NRC) to modify the third and fourth paragraphs as follows:  !

4 "WHEREAS, the Grantor has elected to use a certificate of deposit to provide all of such financial assurance for the facilities identified herein; and WHEREAS, when payment is made from a certificate of deposit, this standby trust shall be used for the receipt of such payment; and" ALL OTHER TERMS AND CONDITIOt!S REMAIN UNCHANGED.

This modification replaces Letter of Credit No. ssued by Huntington Bank with Certificate of Deposit No. 1 issued by llungin ton Bank. An original signed copy o icate of Deposit No, I has been sent to the NRC, Region III.

FRONTIER TECHNOLOGY CORPORATION llDNTINGTON NATIONAL BANK

/ as T,Iu ee Edward F. Ja ow, resident /

bd r v Treva L. Janzo , Secretary / Treasurer NUCLEAR REGULATORY COMMISSION

) i I hb # f f~ 8

Enclosure:

Certificate of Deposit I 'a e i lM 1;2 h .

i rs

E

~

. O O fl FRONTIER TECi

, f .

3- :31.1119761

. ' h-k AUGUST 4 1998 $

@ W i Huntmston (These fund'a.f.l10LOGL CORPORAT}gp.

i (J i W (ra.deposite0 % iije,purpone ofnctal' asputaricerfor..the cost of deco 'l l

Banksrequiredi providink' tinder}hTitle' 10lof phii{ Code pf Federal RegttjpedRahd'thlitanfoM 6 70 Or 72) (

$87,090.51 l

.i MM .Byrit{hh klp'idh, % 1,, dei '.:1. itY n in a l j'XpNIA QH'il5 ,h5 ld: p 'e\ ljyj. {i.i.M

g"......

r ; 15 140NTilC (

{ . 'ht.. f with q

certificat$ of deposil ,

}.Jhe acepunl;s.

litinglyi;lJa i 1% ., 4,h {.h.I B}(ukh',Tli4,lerm of this account

, is: _

"U drt will witi not) automatically renew at maturity. The i

) a miturity d t i I '

i

.r.d f" 4.* A:l.i ?, i ' t . .

P inttrist rate for this accouqlisq [Q '

flXEQ $N j.,3 ti.

rate'until {he maturity date ,.a VAFilABLE rate a STEPPED rate).

'N wlDien annual percentage yleid of 5.35

~

t 8  %.

FIXED RATii AC t l k ..

Ili d ItN hh$f flkf"b,y< ' il . JW 6

% with;j, "pr) annual percentage yleid  %. of VAFigilLE BATEi ACQQy,fT1,$p,bgginnl[9 i g j.t3gte is "" ,

q prcen(age yiige asi c61 forth in the Rules and Begulations for this account. Il this The interest rate an annual

@> IM intdiest' rale is not based dn'the Iridex used to make lator changes. You will

'Ut4E' l's roarked $ 6 'I'llt.h tM

~ be' pakijtds raio OEtIj.ko'rhb )OINld [' Vil*]yleidlh(l+ '%f![,l'.i[

}lT After that time, the,Interest' ' rate and annual

} [ ,

5

. STEPPED-RATE ACCQUNT The r ppeente lefd is '  %. . .

• 4 ;pe 10 Date: Ending Date; ,

) i

interect Rat { }ua ,  ; ,

! i bi, I

'h +$.

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.Ii;l$ ' ',8) .' p,k ,

! > C, a i hf F! i[."' p N.

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j Int; test will X' be corpputed 6E1/36pth'- using g:., X 1/365 ordaily 1/366 Iri a leap [ rpte'( b ..jrateIfor('.

year) of the annual eachPt day. f !

l s! nple interot,t withoui compounding). Interest l Int: rest will be ( ' ',.. . D j g , s .cgg;. tjndM * .;,i,,daily, l[ ' . .lcorppounded annually

'^" . This certificate is will be paid ..b jo/by

) (mopthly, quarterly, semi-annually, pnnuall), p (melhod ot disbursement) $10,000. 00 tJONSEGOTIABL A!D N (40ffT'RA' SFERABLE., Trig,t paiurityl Ipirpurn opening deposit for this account is $

l ~@.5237Th: m ^ ""'""""'"

l .y, if. *.H...g., R $?*adF.(i % .,. . ., i WMQ a vena.,Ar - =c ac - - - s -wm - - m - - -rmr -rmr - - - unan - mnenansN-inwmMM3Mg4

, ~

eme cc a es sonoen #wv ten MOOnE' r784995t FRONTIER TECitNOLOGY CORPORATION 31-1119761 l

1641 BURNETT DR XENIA Oli 45385-5691

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CONVERSATION RECORD ITiue IDATE 04:15 06/18/98 03:00 07/17/98 08:45 08/13/98 09:00 10/27/98 08:40 01/20/99 I

O visit O CONFERENCE X TELEPHONE O INCOMING j X OUTGOING E OF PERSON (S) CONTACTED OR IN CONTACT ORGANIZATION (CFFICE. DEPT.ETC ) TELEPHONE NO.

Treva L. Janzow, Sec./ Treasurer Frontier Technology Corporation 937-376-5691 Edward Janzow, President Frontier Technology Corporation 937-376-5691 SUBJECT Financial Assurance: Deficiency Letter dated May 22,1997, SNM-1957, C/N 300224

SUMMARY

On 6/18/98, Ms. Janzow indicated that the bank still does not want to provide the wording requested in our letter dated May 22,1997. I suggested that she contact the bank to see if they had equivalent wording that they wish to use. The NRC lawyers and the ICF contractors could evaluate the equivalent wording for acceptance. I also indicated that she should review the regulations and other instruments.

She will contact the bank or may decide to start with a new bank or a new instrument. Ms. Janzow said she will make a decision and send a letter to us indicating their course of action within the next two weeks.

4 On 7/17/98, Ms. Janzow said she would meet with her banker on 7/22/98 to modify the CD. She also has an appointment with another bank on 7/27/98. The CD matures on 7/26/98. The present bank has not b en helpful. She said we will get our response by early August.

On 8/13/98, I called Ms. Janzow to see why I had not received the modified CD. Ms. Janzow said she had the CD modified on 8/4/98 and had requested the bank to send it to me. She stated that she will call the bank today, fax the status to me, and send a copy of the CD to me.

A telephone call to the licensee on 10/27/98 revealed that the deficiency letter response regarding the financial assurance instruments were sent to be processed by the bank last month. Ms. Janzow agreed to ensure that the bank issued the instruments soon.

On 1/20/99, I called Ms. Janzow to see why I had not received the financial assurance instruments. She said that the bank was not responsive and that she is now working directly with a trust department officer.

The NRC should receive the instruments withh two weeks.

ACTION REQUIRED Respond by July 2,1998 with letter indicating course of action.

R:spond by early August.

Submit financial assurance instruments by January 29,1999.

NAME OF PERSON DOCUMENTING CONVERSATION SIGNATURE DATE Charles F. Gill 1 1 6/18, 7/17, 8/13, & 10/P.7/98; 1/20/99 ACTION T AKEN On 6/23/9'7, NRC received response to 5/22/97 deficiency letter. On 2/6/98, NRC received second response to 5/22/97 deficiency letter. On 1/29/99, NRC received third & finial response; instruments were accepted.

SIGNATURE TITLE DATE Senior Health Physicist 2/23/99

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FRONTIER TECHNOLOGY CORPOHATION 1641 Burnett Drive Xenia CH 45385 January 30, 1998 l

' l Mr. Charles F. Gill Senior Health Physist U.S. Nuclear Regulatory Commission Region III Control No. 300224 801 Warrenv111e Road Docket No. 070-03025 Lisle, IL. 60532-4351 License No. SNM-1957

Dear Mr. Gill:

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This letter is in response to your letter dated May 22, 1997 and I your telephone call of January 15, 1998 regarding required' changes in the certificate of deposit which funds our decommissioning standby trust and execution of two amendments to the trust. j As a result of your May letter, Frontier initiated verbal discussions with the Huntinton National Bank with the intent of having the needed changes and documents made. Frontier, however,  ;

did not adequately follow up and at the time of your January j

-telephone call, no progress had been made. Following your call, 1 Frontier made telephone inquiries to the bank and was told by our '

original contact, Mr. Philip Teusink, that we must now work through a Mr. Ron Melchi. i We have been unable to reach Mr. Melchi by telephone, nor has he responded to our messages to call us. As discussed with you by telephone on January 26, 1998, I have written to Mr. '

Melchi, describing the needed changes / additions, enclosing copies of the pertinent parts of your May 22, 1997 letter and of Regulatory Guide 3.66, and requesting information as to how to get the changes and additions made. Copies of the letter and I enclosures are included with this letter.

Thank you for your patience.

Sincerely Edward F. an ow ,

Presiden j RECEIVED FEB 0 S 1998 REGION III FEB 0 61E0-

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araro n r istic ri un a n os .oav c oses.one m r.: o N 1641 Burnett Drive Xer la OH 45385 January 30, 1998 The Huntington National Bank Attn: Ron Melchi P.O. Box 1127 Springfield, OH 45501-9951 Re: Standby Trust Agreement #1087079002 Certificate of Deposit or j Dear Mr. Melchi j Mr. Philip Teusink referred us to you for matters relating to the referenced standby trust and certificate of deposit.

Frontier has been informed by the U.S. Nuclear Regulatory  !

Commission (NRC) that the referenced certificate of deposit, which supporta Frontier's decommissioning funding assurance Standby Trust, must be revised to incorporate specific wording required by applicable j U.S. Federal Regulations. The NRC also informed us that two amendments i to the standby trust agreement have not been executed by the trustee or l by the NRC, as is required by the regulations.

The changes which must be made to the certificate of deposit, and related actions, are specified in paragraph 4 of a letter from Mr.

Charles Gill of the NRC to Frontier, a copy of the pertinent parts of which is attached. The requirements for execution of amendments are as  !

described ir. paragraph 5 of that letter. Mr. Gill references several  !

pages of NRC Regulatory Guide 3.66. A copy of the pertinent parts of that Guide is attached. Also attached are copies of amendments number 1 and 3 to the trust, which have been executed by Frontier but not by the trustee. The number 3 is misleading; no amendment 2 has ever existed.  ;

while reviewing documents related to the above, I found copies of l two certificates of deposit which are identical except for method of  !

payment of interest and certificate number. Since the dates on the two are identical and I have no records relating to a revision or replace-ment of the certificate, I cannot with certainty det ermine which version  ;

is current. If is the currently va1id certificate, or if the certificato number will change as a result of incorporating the wording required by the NRC, a new amendment to the standby trust will be necessary to reflect the correct certificate number, and will have to l be executed by the trustee.

Please advise us as to how to achieve the rnquired changes / additions.

Sincerely,

,c. 6 J / /

Edward F. an7 President i

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Edward F. Jantow, l'h.D.

Radiation Safety Officer Frontier Technology Corporation P.O. Box 486 164? Burnett Drive Xenia 0ll 45385 ,

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Dear Dr. Janiow:

We reviewed the financial information submitted regarding your revised decommissioning funding plan Bated October 16, 1996. In order 1o complete our review, we need you to provide the following informat 1,on: i

( farag to phs I thro q h 3 c} ele tu{,)

4. Obtain a Revised Certificate of Deposit that is Payable to the Trustee of the Standby Trust and Issued to Provide financial Assurance for Decommissioning, and Provide Evidence from the frustee that the Revised Certificate of Deposit Has Been Placed in the 1 rust (10 Cin 70.25(f)(1) and Begulatory_ Guide __3.66, pages 3-6, 3 7, and 4-11) 10 CfR 70.25(f)(h requires prepayment mechanisms, such as certificates of deposti, to be ' segregated from licensee assets and outside the licensee's administrative control." In addition, to help ensure that a CD used for financial assurance will not be subject to any bank set off right to deposited funds, Eggula_tgry_Gu_Lde_3 66 4 4-11, calls for licensees using non negotiable r. ertificates on pages 3-6, 3 7, and of deposit to (1) ident ify, within the CD, the trustee of a standby Irust (or the escrow agent of an escrow) as payee and (2) inform the issuing bank that the CD is being used to demonstrate financial assurance pursuant to NRC regulations. The recommended. wording on page 411 of Regulatory _Gulde

)_&Q also calls for non negotiable CDs to include the following wording:

These funds are deposited for the purpose of providing financial assurance for the cost of decommissioning l activities as required under Title 10 of the Code of

! Federal Regulations Part [30, 40, 70, or 72].

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.x o o E. Janzow 3-( \

The certificate of deposit submitted by the licensee is not ,ayable to

• the trustee of Ihe licensee's standby trust, but rather to tie licensee.

In addition.

deposited to Ihe submitted CD does not indicate that Ihe funds are

% 3rovide financial assurance for decommissioning activities pursuant to N1C regulations.

i To ensure that funds will be available

! when needed for decommissioning and to help avoid any attempt by the l issuing bank to assert a set off against the demsited funds. please (1) obtain a revised certificate of deposit that is payable to the trustee of the standby trust and issued for the purpose of providing financial assurance for decommissioning activities pursuant to NRC regulations.'and (2) provide a letter from the trusten (or other evidence from ihe trustee) confirming that the revised CD has been placed in the trust and is subject to all conditions (e.g.. use of funds. release of funds) applicable to trust property. as called for by 10 CFR 70.25(f)(1) and hgplatory'G_uLde_3A. pages 3 6. 3 7. and 4-11.

5. Execute.the Amendments to the Stantby Trust Agreement Sect ion 15 of the licensee's standby trust agreement. which follows the recommended wording on page 4 22 of item lalgry_Gu.ide_3.66, states the following:

This Agreement may be' amended by an instrument in writing executed by the Grantor, the Trustee and the NRC. or State agency, or by the Trustee and the NRC or State agency. If the Grantor ceases to exist.

Two appro)riale amendments to the standby trust agreement have been executed 1y 1he licensee but not by the trustee nor NRC. Consequently, the amendments are not yet effective. please execute the amendments in accordance with the amendment provisions in Sction 15 of the agreement by obtaining the signatures of the trustee and an NRC representative on the amendmnnts.

Finally, all documents submitted to the NRC must be originally signed duplicates, as recommended in h gulat liniess Ihe 1

documents have been pro mrly signel. p.Cy_Guld.e_3.66.NRC cannot Te cert ain th financial assurance mecianism is enforceable.

We will continue our review of your submission upon recellt of the information requested in this let ter. Please reply jn._duplica_te, willin 30. days, and i

refer to Control Number 300224. .

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/ O O j E. Janzow'

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If you have any quest ions or require clarification on any of the information stated above, you m.1y contact us at (630) 829 9887.

• - Sincerely.

l feh0 i Charles F. Gill i Senior Health Ph sicist  ;

Nuclear Material Licensing Branch I License No. SNH 1957 Docket No. 070-03075 l

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pa a'og U.S. NUCl EAR REGULATORY COMMISSION June 1990

.< a O j4.y) REGULATORY GUIDE

• • • • • OFFICE OF NUCLEAR REGULATORY RESEARCH  !

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REGULATORY GUIDE 3.66 (Task DG-3002)

STANDARD FORMAT AND CONTE.NT OF FINANCIAL ASSURANCE MECHANISMS FIEOUIRED FOR DECOMMISSIONING UNDER 10 CFR PARTS 30,40,70, AND 72 l

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Reputatory Guertes see leeued to deareibe n+t *nntie available to the gstab-tic methoris acceptat+ne in tt e tlitr: start et o . pie,nenting specific parts of tte Commission's segulate<te a, en sentoente techniques used by the f Powm Moutoes 6 Ps 4um 2 Desensch enet f eet 9 ies. loes 1 1 e , a s v t ih. <

st attGuidance vede in evaluattotnD 't*'~'t'c Pn'b'*"'t apphrne.te '," P"*st eta'f accorfente, or to pre eoutet wy n.vdas see swit substitutes to, 3 Fu It and Metattale ' acIllDec 8 3+ us ih mi t in*ni tegulat6ans, and erwnptinnea with tha n it *

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soauttuns diftetent from theen e*1 av et in the q..uses will to scroptable et 5 M"a'tee inse anet Plant enier unoin -ne o they prowMe a timeis for st* hewt."un ea'198e'ea to et* leenance ce rentsens-ance of a perrnet ce parense by the rewnn.4eu n Cop 6es of le suad Go+*s may t* t uer Os-. I t- m"- . 4 e - .nt t ' e .e.ner This OU'rie was leeued nuer cuneirtee nunn nl emunanie sec-eived t,o.n Ottere at the cureceit GI o rw ec e inhr m o n no . g o ce nas the pubne. Cort'weent e and soqueatu== f<* hopeeveniente in these be ut tahied by a suite sing the ' us wu n u" teos t 8. ' ', .n. .t e , s e r, no t <

guMes are encou'*0*d at m'l Hn** n'"t g eas wilt to sovtsed, se ap- Govmewww*nt tNinting 0 esre, l'e+1 Ostu e s' g te h,e neena. fw proprieto, to scenmentwtop rewv*nnote ar*' on *cheet new entrwmatinn or 70ft li 7"a? telar'hnne (?"?l? f' P'""' ' ' ' '

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3. FINANCIAL ASSURANCE HECHANISHS 1

1 3.1 IN1RODUC110N

. This section describes the financial mechanisms licensees and applicants l may use under 10 CFR Parts 30, 40, 70, and 72 to demonstrate financial assurance l for decommissioning. Descriptions of the allowable categories of financial assurance mechanisms are followed by explanations of each allowable instrument.

A checklist of criteria detailing the provisions that should be included in each specific instrument is contained in an exhibit following the discussion of the instrument. Section 4 of the guide contains samples of recommended wording for allowable instruments. In addition, Appendices B through E list the documents that should be submitted to comply with decommissioning financial assurance requirements, depending on the particular financial instrument used.

3.1.1 Mechanisms Available to Types of Licensees or Applicants All applicants for, or holders of licenses, under 10 CFR Parts 30, 40, 70, and 72 may use one or more of three kinds of mechanit.ms to comply with the financial assurance requirements for decommissioning:

3.1.1.1 Prepayment Method Prepayment is a deposit by the licensee or applicant prior to the start of ks ( operation into a segregated account outside the licensee's or applicant's

/)' ' control. 1he deposit must be cash or liquid assets 2 that will retain their value over the projected operating life of the facility in an amount sufficient to pay estimated or certified decommissioning costs. Prepayment mechanisms include trust funds, escrow accounts, certificates of deposit, government funds, and deposits of government securities.

3.1.1. 2 Surety, Insurance, or Parent Company Guarantee Method A surety method, insurance, or parent company guarantee is an assurance that decommissioning costs will be paid by another party should the licensee default on the responsibility to carry out decommissioning. In addition to insurance, surety methods include payment surety bonds, letters of credit, lines of credit, and parent company guarantees.

3.1.1.3 External Sinking Fund (Combination of Sinking fund Account and Surety Mechanism or Irisurance)

An external sinking fund has two components: (1) a sinking fund account and (2) insurance or a surety mechanism such that the total of both components at least equals, at all times, the cost of decommissioning. The sinking fund account is a segregated account outside the licensee's or applicant's control.

Any of the prepayment mechanisms can be used to hold the assets for the sinking fund account. Thus, the sinking fund account may be in the form of a trust, escrow account, government fund, certificate (s) of deposit, or deposit ,

@y ZLiquid assets are cash or assets readily convertible into cash, such as marketable securities, notes, accounts receivable, or certificates of deposit.

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of governrrent securities. lhe second component of the external sinking fund l i can be insurance or a surety mechanism, i.e., a letter of credit, line of 5 j i credit, or surety bond. As the proportion of the total that is held in the  ;

sinking fund account increases over time, however, the amount in insurance or i j a surety mechanism can decrease, f Part 72 licensees that are electric utilities may use an external sinking j fund"that is not combined with a surety mechanism or insurance (10 CFR 72.30(c)(5)).

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! 3.1.2 Government ticensees or Applicants In addition to the mechanisms described above, Federal, State, and local

government licensees or applicants may' provide financial assurance with a state- l ment of intent. A government licensee or applicant may also combine a statement of intent with another form of financial assurance to satisfy decommissioning l

financial assurance requirements. 4-1

! A statement of intent is a statement from the appropriate lederal, State, l 1 or local government entity indicating that funds for decommissioning will be I j

obtained when necessary. The statement of intent should also include an estimate of decommissioning costs or state the amount of financial assurance ,,

l required by the certification mechanism. )

3.2 DESCRIPTION

OF FINANCIAL ASSURANCE MECHANISM 5  !

' Three categories of financial assurance mechanisms are available to all l licensees or applicant r. for licenses under 10 CFR Parts 30, 40, and 70 and with slight variations, Part 72: (1) prepayment mechanisms; (2) surety methods, l l insurance, and parent company guarantees; and (3) external sinking fund coupled ll with surety bond or insurance. Government licensees or appilcant s may also use a statement of intent to satisfy decommissioning financial assurance l requirements, b

All mechanisms used to comply with decommissioning financial assurance requirements most be at least equal in amount to,the estimated or certified decommissioning costs for the facility. If several mechanisms are uced in combination. their sum must at least equal the total amount required for decom-  !

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.missioning. 1he mechanisms may be used singly or in combination, exc ept for the

parent company guarantee which may not be combined with another financial j assurance instrument.

I Under the decommissioning regulations, "the surety method or insurance

must be payable to a trust established for decommissioning costs" (10 Cf R 30.35(f)(2)(ii), 40.36(e)(2)(ii), 70.25(f)(2)(ii), and 72.30(c)(7)(li)]. This i is because, by law, the Commission and agencies of some States cannot hold seg-i regated funds or accounts, but instead must deposit funds received in the Federal or State treasury as general revenues. Such funds may not be available for i decommissioning as required. Therefore, a special trust is created in which the

' funds can be held and from which they can be taken and used when necessary with-

out being treated as general revenues. The trust established to recnive funds e

from other financial instruments is referred to in this guide as a " standby" 4 trust to distinguish it from a trust fund used as a stand-alone prepayment l

i financial assurance mechanism. Standby trust funds must be established if the e' following inst rument s are used: letters or lines of credit anit surety bonds.

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$y- Standby trust funds should be used with a parent company guarantee. Although not required by the regulation, licensees that use some prepayment mechanisms, i.e., certificates of deposit or government securities deposits, should also l establish a standby trust or an escrow account to avoid the same problem. If the  !

licensee defaults on decommissioning requirements, the issuer or provider will draw on the funds held in these instruments and deposit them directly into the standby trust or escrow account for use as required for decommissioning.

3.2.1 Prepayment Hechanisms Prepayment, in accordance with the decommissioning regulations, is the i' deposit of an amount of cash or liquid assets sufficient to pay decommissioning costs at the time required. If used by an applicant for a license, prepayment must be deposited prior to the start of operations. If used by a current license holder, the prepayment must be deposited prior to the submission of proof of financial assurance (i.e., on or before July 27, 1990, or at the time the license is renewed, whichever is earlier).

The prepayment must be deposited into an account that is segregated from the licensee's or applicant's other assets and outside the licensee's or applicant's control. Several acceptable mechanisms can be used to segregate cash or liquid assets from other assets. These are:

• escrow agreements, e certificates of deposit, 3

• government funds, and h' '

• deposits of government securities, and

• trust funds. l Certain prepayment mechanisms (i.e., cash deposits, certificates of deposit, or inshu.nents held by banks in trust or escrow arrangements) are subject to the l dollar limitation of insurance provided by the Federal Deposit Insurance Corp-oration (FDIC) or the Federal Savings and Loan Insurance Corporation (FSLIC). )

Accordingly, the deposit in each bank will only be insured up to the basic amount l of $100,000 per deposit. The limitations also apply to the interest earned on I

deposits, if the principal is equal to the limit, therefore, the interest is ,

uninsured. Thus, if a licensee is required to have financial assurance in an amount exceeding $100,000, deposits should be split among several institutions so that all funds are fully insured by the FDIC or F5LIC. For example, if a licensee is using certificates of deposit to demonstrate financial assurance, he can procure the CDs directly from different institutions so that each CD is l fully insured. The licensee or applicant can also purchase fully insured CDs issued by various banks through a broker. If $750,000 in financial assurance is required, the licensee or applicant must procure at least eight insured CDs whose ,

total value at the time of financial assurance certification is at least equal to $750,000.

3. 2.1.1 Fscrow Agreements i An escrow account is an account containing funds depos;ted by the licensee or applicant and held by a bank or other financial institution. An escrow $

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account dif fers f rom similar accounts in that the licensee or applicant provides '

funds that are held by the escrow until the happening of a contingency or the 3-3 I

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j performance of a condition, and then released to the grantee. The applicant or '(edB

, licensee deposits cash or other liquid assets in an amount at least equal to the

' certified or estimated cost of decommissioning in an escrow account. The bank or other institution where the funds are deposited is the escrow agent. The escrow itself is the agreement between the applicant or licensee and the escrow agent that specifies that the funds are to be held by the escrow agent until they are required for decommissioning activities or there is a determination by the Commission or State authority of failure by the licensee to satisfactorily perform decommissioning activities.

The escrow fund will be disbursed to the licensee upon presentation of certification to the escrow agent that (1) decommissioning is proceeding accord-ing to an approved plan, (2) the funds withdrawn will be expended for activities undertaken pursuant to the plan, and (3) the Hi<C has been given 30 days prior notice of the licensee's intent to withdraw funds from the escrow.

If the licensee defaults or is otherwise unable to carry out decommis-sioning, the Commission or State regulatory agency will order the escrow agent to release the funds to pay decommissioning costs. The escrow agreement should state that if the licensee does not default or if any funds remain in the escrow when decommissioning is complete, the escrow will be terminated and the funds returned to the licensee.

To be valid in escrow account must be supported by an underlying contractual agreement. For purposes of financial assurance, the The underlying con-escrow becomes a tract in this instance would be the NRC licensing agreement.

irrevocable when the applicant or licensee delivers the deposit to the escrow g agent accompanied by the escrow agreement. The escrow remains irrevocable for i The terms may be amended, the length of time stated in the escrow agreement.

however, by mutual consent of the licensee or applicant and the Commission or l State agency.

A checklist of review criteria for an escrow arrangement is provided in Exhibit 3-1. Samples of an escrow agreement and supporting cont.ract are provided in Section 4.

3.2.1.2 Certificates of Deposit I

A certificate of deposit (CD) is a bank's written acknowledgement of the receipt and deposit of a sum of money by the licensee or applicant and its promise of repayment. When using a CD to demonstrate financial assuiance for decommissioning, the licensee deposits with a bank funds suf firinnt to cover the cost of decommissioning the licensed facility and receives a CD.

receipt of the The wording of the CD may vary, provided it acknowledge, t ho licensee's deposit and contains a promise to pay the funds to @ holder or Ihn licensee named payee upon surrender of the certificate properly endorsed.

or applicant must establish a standby trust The or escrow account Commission to tornive or state agent yfunds drawn from the CD in the event of default. instromonts will draw on certificate (s) of deposit used as financial assurance only if the licensee defaults on decommissioning obilqations.

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O O CDs may be either negotiable or non-negotiable. If a CD is negstiable, the issuing bank is obligated to pay the holder, whoever it is, when the CD falls i due. If a O is non-negotiable, the bank is obligated to pay the designated l payee identified on the certificate.

• Both negotiable and non-negotiable CDs may be used to comply with decommssioning financial assurance requirements. If a nngotiable CD 4 is used, the trustee of a concurrently created standby trust or the escrow agent of an escrow account should have possession of the CD.

If a non-negotiable CD is used, the trustee of a concurrently created standby trust or the escrow agent for an escrew account should be named as payee, unless the appropriate State agency can hold the funds without depositing them in State general revenues. ,

• The CD should be for a limited time period, such as 1 to 5 years, so that the face value can be adjusted for inflation and changes in decommissioning costs.

• Either time or demand CDs may be used for financial assurance. CDs can be payable either at a certain time (time deposits) or on demand after a specified period of time (usually 30 to 90 days) has elapsed (domand deposits). The demand CD allows the holder to withdraw funds at will at any time after the specified period has elapsed.

The demand CD, therefore, may be better suited to the contingency requirements of a decommissioning financial assurance mechanism.

Time CDs may be used, however, if their value is sufficient to cover .g decommissioning costs even if a penalty is incurred for withdrawal -(

prior to the date specified on the certificate (s).  ;

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• CDs should include automatic renewal provisions and provisions i requiring notice, in writing, prior to withdrawal of funds. Un.kr such provisions, the certificate will continue indefinitely until the I!censee defaults and the issuer receives written notice of default i or of termination of the license by the Commission. I The bank issuing the CD generally has a set-off right to the funds that are deposited. A set-off right refers to the general rule that a bank may look to dQosits it holds for the repayment of any indebtedness to it on the part of  ;

the depositor and may apply the debtor's deposit on his debts to the bank as they become due.

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The set-of f right does not apply, however, to special deposits. When  !

money is deposited for a special purpose, a bank is ordinarily precluded from exercising the right of set-off. In addition, in order to warrant a set-off, it is ordinarily necessary that the money deposited belong to the dopositor.

Thus, the set.-off rule does not apply where a bank has knowledge that the I funds are deposited by the depositor for the use of another, or where the bank has knowledge of facts sufficient to put it on notice as to the owna ' hip by someone other than the depositor.

To - vid a bank's right of set-of f, licensees or applicants using non-negotiable CDs as financial assurance instruments should (1) name the trustee 3-6

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) ,of a standby trust or the escrow agent of an escrow account or the l

inform the issuing bank that the certificate is being used to demonstrate financial assurance in compliance with a regulatory requirement. ticensees l

j using negotiable CDs should also inform issuers of the purpose for which the I l CDs are being obtained.

j Criteria for review of certificates of deposit are provided in Exhibit 3-2.

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Examples of certificates of deposit are provided in Section 4.2.

3.2.1.3 Government Securities The licensee wishing to use this mechanism will deposit government securi-ties that have, at the time of deposit, a fair market value at least equal to the certified or estimated cost of decommissioning. In order to ensure that l the securities deposited provide the greatest probability of full value at )

maturity, securities should be limited to securities that are guaranteed by the full faith and credit of the Federal government and adequately rated State or municipal bonds. These securities could be held by a trustee or an appro-i The security holder should be determined during l priate Federal or State agency.

licensing.

Acceptable securities backed by the Federal government include: )

• Treasury bills; I

• Treasury notes, and bonds;

• Government National Mortgage Association pass-through certificates l t (GNMAs); and

• Mortgage-backed bonds issued by the Federal National Mortgage Association (FNMAs) and the Federal Home toan Mortgage Corporation. ,

Acceptable State or municipal bond ratings are:

• BBB or higher as rated by Standard and Poor's Corporation; or

• Baa or higher as rated by Moody's Investors Service, Inc.

A licensee or applicant wishing to use securities to provide evidence of financial responsibility should comply with the following:

• The types of securities to be used must be approved during the licensing process. If used by an applicant for a license, securities must be transferred before the facility becomes operational. If used by a current license holder, securities must be transferred at the time financial assurance is certified.

• The licensee or applicant should establish a standby trust to receive ful.ds if the bonds are cashed so that they will be available to the Commission or the State agency if needed for decommissioning.

(

If the licensee or appifcant uses Treasury securities for financial '

l assurance, procedures for receipt and possible reinvestment of interest should Interest payments on registered Treasury notes and bonds also be estabilshed.

3-7

O O EXHIBIT 3-2 3 CHECKLIST OF CRITERIA FOR REVIEW 0F CERTIFICATES OF DEPOSIT l

• Copy of corporate by-laws or other evidence indicating that parties signing '

the financial instrument (for the applicant) are authorized to represent 4 the organization in tne transaction.

• Evidence that the financial instrument is an originally signed duplicate I (e.g., an executed copy of the instrument).

• Time or demand deposit. J

• Negotiable or non-negotiable instrument.

1 i

• Terms and conditions include:

1. Name and address of bank;

2. Number of certificate;

3. Date of creation;

4. Name of depositor;

5. Name or position of payee; ,

i 6. Sum deposited; I' j 7. Rate of interest;

8. Renewable or nonrenewable at maturity; .  !

1 9. Period of renewal;  !

Power of bank not to renew; 10.

i 11. Limitations on withdrawal;

12. Notice requirements.

• Deposit insurance.

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4.2.2 Draft Non-negotiable Certificate of Deposit Payable on a Certain Date CERTIFICATE OF DEPOSIT

, 19 l Certificate of Deposit has deposited in the bank the sum of

[ Insert name of licensee

~

or applicant])

Dollars (5 _

payable to [ State regulatory agency (if the agency can hold special funds under applicable months state law), trustee after date, of with standby trust, or escrow agent],

percent per annum from date, upon interest thereon at the rate of These funds are deposited j presentation of this certificate properly endorsed. '

for the purpose of providing financial assurance for the cost of decommissioning activities as required under Title 10 of the Code of Federal Regulations Part [ insert 30, 40, 70, or 72].

Accordingly, this certificate will be renewed automatically unless written notice of (1) the default of the

[ insert name of license or applicant] on these obligations; (2) the i

termination oT the facility license; or (3) the substitution of another

!' financial assurance mechanism is received from [the name of the licensee or applicant].

The deposit documented in this certificate is insured by the Federal Deposit Insurance Corporation.

Cashier s

4-11 i

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'FIkONTIE TliCHNO - - - -

GY CORPORATION ti ft C.1 keno S.H.M.1917 P.O. Bon 486

• 1641 Pmencia thive

• Xen6n, a % tilR$ * (511) 176 5691

• Teles 11910 Ill 82A7 u

THE ilUNTINGTON NATIONAL BANK CORPORATE TRUST DEP ARTMENT.

41 SOUTil ll1011 STREET - IlC1112 COLUMBUS. 01110 <l3215 DECEMBER 22. 1992 STANDBY. TRUST AGREEMENT - AMENDMENT No. 1 U.S. NUCLEAR REGULATORY COMMISSION WASHINGTON. D.C. 20555 GENTLEMEN:

WE IIEREDY AMEllD OUR STANDBY TRUST AGREEMENT ISSUED IN Y FAVOR FOR Tile ACCollNT OF FRONTIER TECllNOLOGY CORPORATION MODIFY SECTION 5. PARAGRAPH 2 AS FOLLOWS:

PERCENT OF THE "NO WITHDRAWAL FROM Tile FUND CAN EXCEED TEN (10)

OUTSTANDING BALANCE OF THE FUND UNLESS NRC APPROVAL ALL OTilER TERMS AND CONDITIONS REMAIN UNCilANGED.

l FRONTIER TEClit10 LOGY CORPORATION hxm' < <1s V JANZ P DENT EDWARD F .

• .wi(z,(,, '., },&c )-07C -

TREVA L.-JANZ0W. SECRETARY / TREASURER I l l

i I: G! / 'M ThilGT Alll'.llliMElli' !!it . 1  !

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FRONTIER TECHNOLOGY CORPORATION P.O. Box 486

• I f> 41 HurnettFax:

Drive 937* 376-5692 Xenia Oil 45385 Tel: 937 376-5691 3

HRC 1,lennnn Number SNH-1957 i

The Huntinyton Nat lonal Bank Corporate Trust Dnpartment

41. South litch Strent - 11C1112 l Columbus Oil 4 3215 October 16, 1996 STANDBY TRUST AGREEHENT - AMENDMENT No. 3 U.S. Nuclear Regulatory Cormnission l i

Region III l Attentlon: Mr. Charles Gil1 Materials 1,1 censing Section 801 Warrenviile Road Lisle Illinoin 60532-4351 Gentlemen: lopund in favor ,

We hereby nmnnd our Standby Trust Agreement l Requlatory Cormnission (NRC) to modify t hes t hi rd and l of the U.S.

fourth paragraphs as follows:

of deposit "WHEREAS, the Grantor has elected to utte a certificatn to provide ail of nuch iinancial assurance for the factIltien identifled heretni and WHEREAS, wh9n payment in made from a certificate of. depontt, and" thia standby truni chall be used for the receipt of such payments I ALL OTilER TERMS AND CONDITIONS REMAIN UNCHANGED. M issued No.

Thin modtfIcatton replaces Letter of Credit by Huntington Bank with Cartificate of Deposit No. nan original s issued by fluntington Bank. has been sont to tho NRC, Region III.

of Deposit No.

FRONTIER TECIINOI.OGY CORPORATION m< n jV resident Edward F. Jay.ow, YnffL"

' 2 Janzow, Secretary / Treasurer Treva L.

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Co fIcate of Deposit

Enclosure:

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FRONTIER TECHNOLOGY CORPORATION  !

1641 Burnett Drive  !

Xenia Ohio 45385 {

June 18, 1997  ;

License No. SNM-1957 Docket No. 070-03025 Control No. 300224 U.S. Nuclear Regulatory Commission, Region III  !

duelear Materials Licensing Branch

ATTN

Charles F. Gill, Senior Health Physicist 801 Warrenville Road Lisle, Illinois 60532-4351

Dear Mr. Gill:

We received and have read your letter dated May 22, 1997.

We are surprised and puzzled in that certain of the  !

information provision requirements in your letter appear to be j i based on documents which have been obsolete since mid-1992.

l Specifjcally, your Item 1 is identical (verbatum except that you j use "m " instead of " cubic meters" and number "7.08" instead of i l "7.18") to Item 6.a. of NRC Region III's letter to us dated FEB 1 28, 1992 and signed by Cassandra F. Frazier. Similarly, your Item 2 is virtually identical to Item 6.c. of that letter, and your Item 3 is virtually identical to Item 6.b. of that letter.

In all cases, the references and information provision requirements in the referenced parts of the two letters are the same. He supplied the required-information to the NRC in our letter to Ms. Frazier at NRC Region III dated May 22, 1992. That letter contains two major i subparts, the first'in response to an NRC letter dated December 12, 1992 and the second in response to the Feb. 28, 1992 letter. The information required by the first three parts of your letter is in  ;

subsections 6.(a), 6.(c), and 6.(b), respectively, of the second '

subpart of our letter, and in Appendices E and D and Exhibit 1 to FTC's Decommissioning Funding Plan, Revision 2, a copy of which wss enclosed with our May 22, 1992 letter. The information we submitted j was subsequently reviewed and approved by the NRC.

The revised or replacement certificate of deposit required as specified in your Item 4 requires specific wording which will l l limit " set-off" rights which might otherwise be available to the i l issuing bank. In the past, we have found it necessary to obtain l l NRC assistance in convincing banks that their inclusion of specific i l NRC-specified wording in financial instruments relating to decommissioning is an absolute requirement. We have not as yet

received a response from our bank regarding the revised / replacement CD. If'necessary, we will seek NRC assistance.

l I ECEITrEJD JUN 2 3 997 g g._g-g7 REG 10M3137 4

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The execution of the amendments to the standby trust agreement requires approval by the trustee and by the NRC. We are seeking trustee agreement first. Since the trustee is an officer of the same bank which issued our decommissioning CD, we may need NRC assistance here also.

If so we will request it.

We expect to have the required financial-document changes completed by the end of our current fiscal year, July 31, 1997. Should the bank refuse to incorporated the required wording and/or approve the trust amendments, we will inform you promptly, and very likely request NRC help.

Sincerely, Edward F.

}W anzow President I

e MAY 2 21997 1

Edward F. Janzow Ph.D.

Radiation Safety Officer Frontier Technology Corporation

! P.O. Box 486 1641 Burnett Drive Xenia, OH 45385

Dear Dr. Janzow:

We reviewed the financial information submitted regarding your revised decommissioning funding plan dated October 16, 1996. In order to complete our review, we need you to provide the following information:

1. Revise Estimates for Waste Generated from Decontamination of Laboratory Components and Associated Disposal Costs (NUREG/CR-1754, Addendum 1)

You used the cost estimating tables in Appendix F of Reculatory Guide 3.66 " Standard Format and Content of Financial Assurance Mechanisms Required for Decommissioning Under 10 CFR Parts 30, 40, 70, and 72,"

June 1990, to derive the cost estimate. However, you may have underestimated the amount of waste to be disposed due to the decontamination of individual lab components. You stated that five drums totalling 1.06 m' and a special container holding 7.08 m' (total of 8.14 m') will hold all waste generated from decontaminating the hot cell, floor, walls, and ducts. You did not clearly document the wastes included in this estimated disposal volume.

Using the tables in NUREG/CR-1754 to estimate the amount of waste to be disposed, the NRC estimates total waste generation volume at 19.29 m',

which greatly exceeds your estimate of 8.14 m'. This significant discrepancy also affects transportation and disposal costs and leads to a significant impact (approximately $62,000) on the final cost estimate.

Please use the tables in NUREG/CR 1754 to estimate the quantities of waste generated from decontaminating the laboratory components.

Alternatively, you may justify your existing estimates.

2. Revise the Cost Estimate to Incormrate Costs for the Disposal of All Material (Regulatory Guide 3.66, ) age 1-10)

You did does not include costs for the disposal of usable arCf and '"Am l inthedisposalcosts. In addition, it is unclear whether costs for l disposing "Cs are included in the disposal costs. You stated that

, disposal costs of these materials will not arise because the materials j can all be given away or sold. Your rationale for not including costs 1

. .n * .

E. Janzow  !

I for the disposal of.these materials is equivalent to taking a credit for l salvage value in the amount of the disposal cost. Reaulatory Guide i 1 55, page 1 10, states, however, that the " cost estimate should not I incorporate any salvage value that may be realized with the sale of potential assets." The NRC cannot be certain that you will be able to sell'or give away the materials, and that' disposal costs will not have to be paid. Please eliminate credit taken for salvage value by l

including in the cost estimate disposal costs for all materials.

3. Increase the Contingency Factor Used in Calculating the Total

Decommissioning Cost Estimate (NUREG/CR-1754, Addendum 1)

L You stated that the cost estimate is based on current site conditions, and that contingencies to cover future changes are not necessary for the l l estimate. Due (apparently) to a mathematical error, however, your total l cost estimate is $8,000 above the costs itemized in Section 1.3 of the decommissioning funding plan. The additional $8,000 implies a contingency factor of approximately 10 percent of the cost estimate.

NUREG/CR 1754, Addendum 1, uses a contingency factor of 25 percent in its cost estimates for each of six reference laboratories. An adequate

, contingency. factor must be incorporated into the cost estimate to ensure j that you are prepared for unexpected circumstances that could raise '

l decommissioning costs. Please explicitly incorporate a contingency i factor of 25 mrcent into the decommissioning cost estimate, or to demonstrate w1y a lower factor is appropriate.

l 4. Obtain a Revised Certificate of Deposit that is Payable to the Trustee L of the Standby Trust and Issued to Provide Financial Assurance for  ;

l Decommissioning, and Provide Evidence from the Trustee that the Revised '

l Certificate of Deposit Has Been Placed in the Trust (10 CFR 70.25(f)(1) l and Reaulatory Guide 3.66, pages 3-6, 3-7, and 4-11) i 10 CFR 70.25(f)(1) requires prepayment mechanisms, such as certificates  ;

of deposit, to be " segregated from licensee assets and outside the i licensee's administrative control." In addition, to help ensure that a l CD used for financial assurance will not be subject to any bank set-off right to deposited funds, Reaulatory Guide 3.66, on pages 3 6, 3 7, and 411, calls for licensees using non negotiable certificates of deposit

, to (1) identify, within the CD, the trustee of a standby trust (or the 1 escrow agent of an escrow) as payee and (2) inform the issuing bank that the CD is being used to demonstrate financial assurance pursuant to NRC regulations. The recommended wording on page 4 11 of Reculatory Guide Lf6 also calls for non negotiable CDs to include the following wording:

These funds are deposited for the purpose of providing

financial assurance for the cost of decommissioning a- activities as required under Title 10 of the Code of

Federal Regulations Part [30, 40, 70, or 72].

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. . _ . _ .. _ _.. _._._ ._..______.__.._._____m_m ._ . _ - .

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E. Janzow 3- ,

The certificate of deposit submitted by the licensee is not )ayable to  !

the trustee of the licensee's standby trust, but rather to t1e licensee.

In addition, the submitted CD does not indicate that the funds are deposited to 3rovide financial assurance for decommissioning activities-pursuant to NRC regulations. To ensure that funds will be available  !

when needed for decommissioning and to hel) avoid any. attempt by the i issuing bank to; assert a set off against t1e deposited funds, please (1) obtain a revised certificate of deposit that is payable to the trustee of the standby trust and. issued for the purpose of providing <

financial assurance for decommissioning activities' pursuant to NRC regulations, and (2) provide a letter from the trustee (or other evidence from the trustee) confirming that the revised CD has been

placed in the trust and is subject to all conditions (e.g., use of funds, release of funds) applicable to trust property, as called for by 10 CFR 70.25(f)(1) and Reaulatory Guide 3.66, pages 3 6, 3 7, and 4-11.

5. Execute the Amendments to the Standby Trust Agreement ,

Section 15 of the licensee's standby trust agreement, which follows the recommended wording on page 4 22 of Reaulatory Guide 3.66, states the following:

This Agreement may be amended by an instrument in writing executed by the Grantor, the Trustee:and the NRC, or State agency, or by the Truste and the NRC or

• State agency, if the Grantor ceases to exist.

Two appropriate amendments to the standby trust agreement have been executed by the licensee but not by the trustee nor NRC. Consequently, the amendments are not yet' effective. Please execute the amendments in accordance with the' amendment provisions in Section 15 of the agreement

. by obtaining the signatures of the trustee and an NRC representative on 4 the amendments.

Finally, all documents submitted to the NRC must be originally signed duplicates, as recommended in Reaulatory Guide 3.66. Unless the documents have been pro)erly signed, NRC cannot be certain that the financial assurance meclanism is enforceable.

We will . continue our review of your submission upon receipt of the information requested in this letter. Please reply in duplicate. within 30 days, and refer to Control Number 300224.

- - - - - . ,__----~g ,, - , . m--. , y-q< _, n, ,. ,-

~

~ j E. Janzow 4 If you have any questions or require clarification on any of the information stated above, you may contact us at (630) 829 9887.

Sincerely, 4

Charles F. Gill Senior Health Physicist Nuclear Materials Licensing Branch  ;

License No. SNM 1957 Docket No. 070-03025

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DOCUMENT NAME: M:\07003025.DE7 Te receive a copy of this document, indicate le the bec "C" = Copy without enclosures *E" = Copy with enclosures *N" = No copy OFFICE DNMS/ Rill __ C NAME CGILL: jay (Cp DATE 05/2Y97 OFFICIA RECORD COPY u .__ . _ _

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p UNITED STATES g g NUCLEAR REGULATORY COMMISSION ,

o, f WASHINGTON, D.C. 2066H001 l s*****/ March 6, 1997 l l l l MEMORANDUM T0: Cassandra Frazier l Materials Licensing Section l Division of Radiation Safety l and Safeguards, Region III FROM: Louis M. Bykoski -

5 '

Facilities Decommissioning Section l Low-Level Waste and Decommissioning l Projects Branch Division of Waste Management, NMSS

SUBJECT:

THE OFFICE OF THE GENERAL COUNSEL AND CONTRACTOR COMMENTS ON NON-STANDARD FINANCIAL ASSURANCE SUBMITTALS

/i Our contractor, ICF Incorporated, and the Office of the General Counsel (0GC) have reviewed and provided comments on the Battelle Memorial Institute, Allied Signal Aerospace, Frontier Technoloav. Notre Dame, and Hoechst Marion Roussel nonstandard financial assurance submittals sent to us for review.

The ICF comments are presented in two parts. The first part deals with specific recommendations to current deficiencies. The second part (Other '

Issues) provides a discussion of changes to the standard wording that are acceptable and are not considered to be deficiencies. The OGC comments may include additional deficiencies that need to be corrected by the licensee and j comments for our internal use.

You should carefully review all the comments before preparing the deficiency letter. We have attached both the ICF and 0GC comments to assist you in your review.

Attachments: As stated CONTACT: Louis M. Bykoski, NMSS/DWM 415-6754 Stephen Lewis, 0GC 415-1684

O O i .

4 4

i 3

I 4

4 List OF INSTRUCTIONS i

)

J FRONTIER TECHNOLOGY CORPORATION i

i overlap between ICF and 0GC comments.In reviewing the comment 1

included in the basis for the deffcfency Totter:The following coments should be

1.

ICF comments 1 through 5 plus last paragraph.

2. All OGC comments.

i 1 All other comments and discussions are for reviewer faformation.

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. - . - . - - - . - . - - . - . - . - .. - . . - - - . . ~ . . . - ~ . - . . -

J.:. o o '

MEMO TO: Louis M. Bykoski,' NMSS FROM: OGC RE: REVIEW OF NONSTANDARD SUBMITTALS Frontier Technology: ICF's recomunendation (1) gets into details '

of waste disposal quantities that warrants review by the Region

~

before transmittal to the Licensee. OGC.has no objection to the remainder of ICF's comunents, with the exception that we question the part of recomunendation (4) that the Licensee be required to I

have the Certificate of Deposit placed into the Standby Trust. We have discussed this recomunendation with John Collier, ICF, who indiccted that he believed that the NRC's interests would be best l served by requiring non-negotiable CD's, as well as negotiable-CD's, to be held in Standby Trusts or Escrow Accounts, depending upon the particulars of a licensee's submittal. OGC notes, however, that Regulatory Guide 3.66 currently provides that non-l negotiable CD's do not have to be placed into a standby trust or '

escrow account. See pp . 3 - 6 and 4 -11. While the staff may wish to consider ICF's recoannendation in updating the Regulatory Guide, OGC does not believe that any licensee should be requese.ed at this time to modify its decomunissioning funding arrangement to' place a non-negotiable CD into a standby trust or escrow account. Provided l -

that the CD is otherwise modified as recomunended by ICF so that the standby Trustee is identified as the payee and the purpose of the l CD is- specifically identified, OGC dcas not perceive any i significant risk of nonpayment of the CD amount into the Standby l Trust, should that beconne necessary.

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.- WICF D O l

CONSULTING GROUP. l ICF hnomonited i

93M) Lee llighway i Fainfu, VA 22031-1207- i

! 703/934-3000 Fax 703/934-9740 1 t l

l January 9, 1997 l

.r To: Dr. Lou Bykoski,'NMSS/NRC From: Matt Borick and John Collier, ICF Incorporated

Subject:

Review of Certificate of Deposit Submitted by Frontier Technology l Corporation l l Frontier Technology Corporation in Xenia, Ohio, submitted a non- l negotiable certificate of deposit (CD) in the amount of $87,000, along with~

two amendments to a previously-submitted letter of credit and two amendments  ;

to a prev'ously-submitted i standby trust agreement.1 The submission addresses '

decommissioning costs of $86,332 for license SNM-1957 issued under 10 CFR Part 70.

The submitted certificate of deposit (from The Huntington National Bank) is non negotiable and'is-intended to replace the licensee's previously-submitted letter of credit.(also from The Huntington National Bank), which  ;

expired on November 1, 1996. According to an NRC conversation record included with the submission, the certificate of deposit was previously used as collateral for the letter of credit.

The current submission does not. include a revised decommissioning cost' estimate,;nor does it reflect any. change in the total estimate. Therefore, this memorandum repeats several recommendations previously reported to NRC by ICF on February 7, 1992.

Upon review of the submission, ICF recommends that NRC requira the licensee to modify the submission in the following ways:

(1) Revise estimates for the quantity of waste generated from the decontamination of laboratory components and associated disposa' costs L(NUREG/CR-1754, Addendum 1);

(2) . Revise the cost estimate to incorporate costs for the disposal of all materials (Regulatory Guide 3.66, page 1-10);

1 ICF reviewed two previous submissions from the licensee and reported recommendations to NRC in memoranda dated November 13, 1990, and February 7, 19924

- . - _ . . - . . - _ _ _ _ . - _ ._.-..m..__._.__.--

2 j (3)- Increase the contingency factor used in calculating the  ;

total decommissioning cost estimate (NUREG/CR-1754,

, Addendum 1); {

-(4)~ Obtain a revised certificate of deposit that is payable to i the trustee of the standby trust and issued to provide j financial assurance for decommissioning, and provide evidence from the trustee that the revised certificate of deposit has been placed in the trust (10 CFR 70.25 (f) (1) and l' Regulatory Guide 3. 66, pages 3-6, 3-7, and 4-11); and (5) Execute the amendments to the standby trust agreement. ,

These recommendations and other issues are discussed below.

i (1) Revise Estimates for Maste Generated from Decontamination of Laboratory Components and Associated Disposal Costs (NUREG/CR-1754, Addendum 1)

The licensee used the cost estimating tables in Appendix F of Regulatory Guide 3.66 " Standard Format and Content of Financial Assurance Mechanisms Required for Decommissioning Under 10 CFR Parts 30, 40, 70, and 72," June 1990, to derive its cost estimate.2 However, the licensee may have underestimated the amount of waste to be disposed due to the decontamination of' individual lab components. The licensee states that five drums totalling 1.06 m3 and a special container holding 7.08 m 3(total of 8.14 m 3) will hold all waste generated from decontaminating the hot cell, floor, walls, and '

ducts. The licensee does not clearly document the wastes included in this estimated disposal volume.

Using the tables in NUREG/CR-17543 to estimate the amount of waste to  !

be disposed,' ICF estimates total waste generation volume at 19.29 m 3, which i greatly exceeds the licensee's estimate of 8.14 m3 . This significant 2 ICP assumes that the licensee will'not need to restore contaminated areas on facility grounds, stabilize the site, or perform long-term surveillance to properly decommission its facility because the licensee did not identify the need to conduct such activities in its decommissioning funding plan.

3 NUREG/CR-1754, Addendum 1, Technoloov, Safety and Costs of  !

Decommissionina Reference Non-Fuel-Ovele Nuclear Facilities t Comoendium of Current Information, Pacific Northwest Laboratory, October 1989.

4 NUREG/CR-1754, Addandum 1, Technoloov, Safety and Costs of  ;

Decommissionino Reference Non-Fuel-Ovele Nuclear Facilities: Comoendium of l Current Information, Pacific Northwest Laboratory, October 1989 (see Appendix

! A). NUREG/CR-1754, Addendum 1, provides tables for the quantity of waste t

generated in decontaminating individual facility components.

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I discrepancy also affects transportation and disposal costs and leads to a i significant impact (approximately $62,000) on the final cost estimate. ICF recommends that the licensee use the tables in NUREG/CR-1754 to estimate the quantities of waste generated from decontaminating the laboratory components.

Alternatively, the licensee may justify its existing estimates. ,

l (2) Revise the Cost Estimate to Incorporate Costs for the Disposal of All j l

Material (Regulatory Guide 3.66, Page 1-10) l l l The licensee does not include costs for the disposal of usable 2s2Cf and l 2nJun in its disposal costs. In addition, it is unclear whether costs for j disposing 137 Cs are included in the disposal costs. The licensee states that I disposal costo of these materials will not arise because the materials can all be given away or sold. The licensee's rationale for not including costs for the disposal of these materials is equivalent to taking a credit for salvage value in the amount of the disposal cost. Regulatory Guide 3.66, page 1-10,

-states, however, that the " cost estinate should not incorporate any salvage value that may be realized with the sale of potential assets." NRC cannot be ^

certain that the licensee will be able to sell or give away the materials, and that disposal costs will not have to be paid. ICF recommends that NRC require  ;

the licensee to eliminate credit taken for salvage value by including in the j l cost estimate disposal costs for all materials.

l (3) Increase the Contingency Factor Used in Calculacing the Total Decommissioning Cost Estimate (NUREG/CR-1754, Addendum 1)

The licensee states that the cost estimate is based on current site  ;

conditions, and that contingencies to cover future changes are not necessary l for the estimate. Due (apparently) to a mathematical error, however, the j licensee's total cost estimate is $8,000 above the costs itemized in Section l 1.3 of the decommissioning funding plan. The additional $8,000 implies a contingency factor mz approximate.ly 10 percent of the cost estimate.

NUREG/CR-1754, Addendum 1, uses a contingency factor of 25 percent in its cost {

estimates for each of six reference laboratories. An adequate contingency factor must be incorporated into the cost estimate to ensure that the licensee j is prepared for unexpected circumstances that could raise decommissioning l costs. ICF recommends that NRC require the licensee to explicitly incorporate a contingency factor of 25 percent into its decommissioning cost estimate, or to demonstrate why a lower factor is appropriate.

(4) Obtain a Revised Certificate of Deposit thLt is Payable to the Trustee of the Standby Trust and Issued to Provide Financial Assurance for Decommissioning, and Provide Evidence from the Trustee that the Revised Certificate of Deposit Has Been Placed in the Trust (10 CFR 70.25 (f) (1) '

and Regulatory Guide 3.66, pages 3-6, 3-7, and 4-11) 10 CFR 70.25 (f) (1) requires prepayment mechanisms, such as certificates of deposit, to be " segregated from licensee assets and outside the licensee's

! administrative control." In addition, to help ensure that a CD used for l

I l

l

n o o l

l 4

l ' financial' assurance'will not be subject to any bank set-off right to 5 deposited funds, Regulatory Guide 3.66, on pages 3-6, 3-7, and 4-11, calls for licensees using non-negotiable certificates of deposit to (1) identify,. within the CD. the trustee of a standby trust (or the escrow agent of an escrow) as L payee and - (2) inform the issuing bank that the CD is being used to demonstrate l financial assurance pursuant to NRC regulations. The recommended wording on .3 I

page 4-11 of Regulatory Guide 3.66 also calls for non-negotiable CDs to include the following wording:

These funds are deposited for the purpose of providing financial assurance for the cost of decommissioning activities as required under Title 10 of the Code of rederal Regulations.Part [30, 40, 70, or 72).

.The certificate of deposit submitted by the licensee is not payable to the trustee of.the licensee's standby trust, but-rather to the licensee. In addition, the submitted CD does not indicate that.the funds are deposited to provide financial assurance for decommissioning activities pursuant to NRC regulations. To ensure that tunds will be available when needed for decommissioning and to help avoid any attempt by the issuing bank to assert a

-set-off against the deposited funds, ICF recommends that NRC require the licensee to (1) obtain a revised certificate of deposit that is payable to the trustee of the standby trust and issued for the purpose of providing financial assurance for decommissioning activities pursuant to NRC regulations, and (2) provide a letter.from the trustee (or other evidence from the trustee) confirming.that the revised CD has been placed in the trust and is subject to all conditions (e.g., use of funds, release of funds) applicable to trust property, as called for by 10 CFR 70.25(f) (1) and Regulatory Guide 3.66, pages 3-6, 3-7, and 4-11..

(5)- -Execute the Aeondeants to the Standby Trust Agreement Section 15 of the licensee's standby trust agreement, which follows the recommended wording on page 4-22 of Regulatory Guide 3.66, states the j following: l l

This Agreement'may be amended by an instrument in j writing executed by the Grantor, the Trustee and the l NRC, or State agency, or by the Trustee and the NRC or j State agency, if the Grantor ceases to exist.

I 5

A bank's set-off right refers to the ability of a bank to look to deposits it holds for the repayment of any indebtedness to the bank on the i part of the depositor and to apply the debtor's deposit to these debts as they become due.  !

l i

I

%.) O l

1 5 I

Two appropriate amendments to the standby trust agreement have been i executed by the licensee but not by the trustee nor NRC.' Consequently, the I amendments are not yet effective. ICF recommends that NRC require the j licensee to execute the amendments in accordance with the amendment provisions in Section 15 of the agreement by obtaining the signatures of the trustee and i an NRC representative on the amendments. (See Other Issue c). I Other Issues In addition to the issues raised above, the following issues are noteworthy:

(a) The certificate of deposit submitted by the licensee does not state that ,

it will be automatically renewed unless NRC provides written notice to '

the bank of (1) default on decommissioning obligations, (2) termination of the facility license, or (3) substitution of another financial assurance mechanism. Nonetheless, once Recommendation 4 above has been implemented, the missing non-renewal terms should not decrease the assurance provided to NRC by the mechanism because even if thc CD is not renewed, the CD funds will already be in the trust.

(b) The submitted certificate of deposit does not include the address of the issuing bank, nor does it indicate that the deposit is insured by the Federal Deposit Insurance Corporation (FDIC). However, the bank's address is provided in an October 16, 1996, amendment to the standby j trust agreement. Using that address, ICF determined that the issuing )

bank is an FDIC-insured national bank.

(c) The submission contains two amendments (dated December 22, 1992, and l October 16, 1996) to the licensee's standby trust agreement, one labelled " Amendment No. 1" and one labelled " Amendment No. 3." The submission does not contain an amendment labelled " Amendment No. 2," i however. According to an NRC conversation record included in the i submission, Amendment No. 3 was inadvertently labelled as such and is actually Amendment No. 2 to the standby trust agreement.  ;

l (d) The words "or dollars, whichever is greater," have been omitted from Section 5 of the standby trust agreement. Nevertheless, once Amendment No. I to the agreement has been properly executed, Section 5 will appropriately limit withdrawals from the trust to no more than 10 percent of the trust's value, unless NRC's approval has been attached to the withdrawal request.

i

' The first of these two amendments revises Section 5 of the standby t rust agreement to limit withdrawals to 10 percent of the outstanding balance of the fund without NRC approval. The second amendment revises the i introductory language of the agreement to specify that the licensee is now l using a certificate of deposit, rather than a letter of credit, as the primary l financial assurance mechanism. l 1

1

O O

^

' l.

6 Finally, NRC should ensure that documents submitted by the licensee are origins'ly signed duplicates,-as recommended in Regulatory Guide 3 66. Unless the documents have been properly signed, NRC cannot be certain that the l

financial assurance mechanism is enforceable. Because ICF does not possess l

the original submission, we cannot verify compliance with these requirements.

attachments l

l l

l

^

O

. O REVIEW OF DEColetISS100 TING FUNDING PLAN (DFF)

~~

Name of company or institution: F m 4:e r Co e p.

e d eolo n Number of licenses and applicable regulations: 1 10 CFR Part 30 10 CFR Part 40 10 CFR Part 70 10 CFR Part 72 l

Isotopes handled and possession limits (specify units): ,4tbC .

h ra Lu CO 1 r_ .

1Hi Am 99 1 6, b 6 d O t < Ae c. ;

D .O I C y (',

v i c.

VU 0 %it Ac W

Th wo E_s uc:

Total cost estimat for licenses listed abover S $b .1 il General comments on DFP l

j i

l l

l I

.-=_- . _ . .. .-- . . - . . . -. .. _ _ . - . _ .

CEECKLIST FOR REVIEWING DECOMMISSIONING FUNDING *L%NS (DFP's)

QUESTIONS ColOENTS (1) Does the licensee provide

[

supporting documentation for I

its cost estimates?

[ Yes No (2) Does the licensee use the Appendix F " Cost Estimating Tables?"

Yes No (3) Does the cost estimate include the following major cost elements?

(1) Planning and Preparation?

No sf Yes (ii) Decontamination and/or l Dismantling of Radioactive Facility Components?

/ Yes No (iii) Packaging, Shipping, and Disposal of Radioactive Wastes?

/ Yes No (iv) Restoration of Contaminated Areas on Facility Grounds?

Yes No \/NA (v) Final Radiation Survey?

Yes No

= .- . _ . . _ .

> c.:e inau ..!:2.L:r.. . . .~ : . : :.: ',

.:vs ..1..:u.

Yes _ No NA I

~

~

~

. O O CEECEI.IET FOR REVIEWING DFF's (continued)

QUESTIONS COMMENTS (4) Is the total cost estimate t reasonable for the type (s) and size (s) of facility 9f i U lN licensed?

Yes No Not Sure (5) Are the cost estimates fer hilu d4pos a l d set E ',a individual facility activities and/or components }'*"MI 5 5 ie 3 OL . '$

• reasonable 7 'w e r 2 rge ve< > s - m o t ,4 .f.  : c.

Yes No 'l #i '^ - * " ' #

./NotSure

• ' ^'#' U"i4 'A

^

tu " or5 \vwer d opsal .usq.

(.% cvic u M sr 3  ;-s,-,.3

're t r e c '< ' , 5 L) 4

O O

l CEECKLIST FOR REVIEWING DFP's (continued)

QUESTIONS COMMENTS (6) Do the computations seen C ,s tg Q Es mow L-a e y correct?

l (het*Te I .3 )3 ddIu95 I ' 5 Nd do f#

s ra= l!o N sum u w %l con o; I

h ?b ,3 31.

1 (7) Does the licensee take credit for the potential salvage j value of recovered materials I I

or decontaminated equipment?

Yes No l

l (8) Does the licensee incivde a Na Ert.cy rty tu r. . x c..a-,

contingency factor in the O M,4 i,t .,.r ~ g' . < s , , ,, i ,_

l '

cost estimate?

gc?vpy ir #J" #'

l Sw, $N 5 r

Yes Y No g, ,, g 9 , . g, c 3, \ u ]

. r, ,

L _n

• r , Pe t s

' ' ' J n.

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l

. vaf +, y s v.

L , c ., ' ' i n '> r 1 Ge- ' - ' '""

l

%s a i ,r . u\ Q N, s< ( .. i

'- l

s f s. 49a r y (9) Does the licensee provide a ]

description of the methods i that will be used to adjust the decommissioning cost estimate periodically over the life of the facility?

fyes No 1

_ au- __:-------- ---:-- --

..... _-.-u _ --.2; l

t i

I

O O APPUGIX A CHECKLIST FOR DECOMISSIONING FINANCIAL ASSURANCE NAME OF LICENSEE OR APPLICANT F<av _An km.k '

MAILING ADDRESS E0 b 4IL l(Mi 6u att 0 e, r

b 6 , OH 453M A. Licensee Part (check one of the followino):

Part 30 Licensee or Appifcant K Part 70 Licensee or Applicant Part 40 Licensee or Applicant Part 72 Licensee or Applicant

8. Check appropriate ites in each category (if applicable)

1. Nov. lif(, Date of Financial Assurance Submission

• ' ' N

2. Public Entity ulakt ee e J X Private Entity

• SiF t %d~e 10/15hg ..

3. Certification of Financial Assurance E Decommissioning Funding Plan h TG,3D- od e3b~tt %IJd I ' "*

4. (a)  % Prepayment Option (See Appendix B)

Trust Fund -

Escrow Account w CertificateofDeposit$p, coo gp pg , gI f9*

Government Fund Deposit of Government Securities (b) Sursty/ Insurance /0ther Guarantee (See Appendix C) l Surety bond Letter of Credit Line of Credit . l Parent Company Guarantee / Financial Test i (c) External Sinking Fund, Sinking Account and Surety /

4 Insurance (See. Appendix D)

! Trust Fund Escrow Account Certificate of Deposit

Government Fund

! Deposit of Government Securities i Surety Bond Letter of Credit i Line of Credit (d) Statement of Intent (public entities only),

l "May not be used in combination with any other instrument.

I A-1

l APPENDIX 8 CHECKLIST FOR SUBMISSION OF PREPAYMENT A. Check Appropriate Form of Prepayment Trust Fund Escrow Account x Certificate (s) of Deposit Special Government Fund Deposit of Government Securities B. Check Documents Submitted for Each Prepayment Mechanism

1. Trust Fund Trust Agreement Acknowledgeocot

2. Escrow Account Escrow Agreement

3. Certificate (s) of Deposit X Certificate (s) of Deposit y Trust Agreement .

w Acknowledgement E

Escrow Agreement *

4. Special Government Fund Written Verification and either Trust Agreement and Acknowledgement E

A Escrow Agreement

5. Deposit of Government Securities Verification of Approval of Securities and either .

Trust Agreement and

~ ~ Acknowledgement E

a i Escrow Agreement With verification.

B-1

9 Q

EXHIBIT 3-2 CHECKLIST OF CRITERIA FOR REVIEW OF CERTIFICATES OF DEPOSIT Mk e Copy of corporate by-laws or other evidence indicating that parties signing 1

u0 %tir the financial instrument (for the applicant) are authorized to represent the organization in the transaction.

. Na h Ae4

• Evidence that the financial instrument is an originally signed duplicate

< * < ax < t" ' *< t).

1 (' ~.~"p*u '^I< a.

/* Time or demand deposit.

/* Negotiable or non-negotiable instrument.

• Terms and conditions include:

% JJ,ns 1. Name and address of bank; M.ad . .J 2. Number of certificate;

/ 3. Date of creation; t/ 4. Name of depositor;

/ p 5. Name or position of payee;

/ 6. Sus deposited;

/ 7. Rate of interest; y 8. Renewable or nonrenewable at maturity; 7 9. Period of renewal; l

10. Power of bank not to renew; ,s,f nee 4I p,o.3 11. Limitations on withdrawal; l

i 12. Notice requirements.

1 a Deposit insurance.

i 3-11

I EXHIBIT 3-5  !

l l

CHECKLIST OF CRITERIA FOR REVIEW OF TRUST AGREEMENTSa

/* Copy of corporate by-laws or other evidence indicating that parties signing the financial instrument (for the applicant) are authorized to represent the organization in the transaction, r#Q

• Evidence that the financial instrument is an originally signed

(, y l ..,,p i.i,-) duplicate (e.g., an executed copy of the instrument).

[* Evidence that the financial institution has authority to act as a trustee.

%4d

• Purpose of trust ("whereas" clauses).

p bs)

1. Description

• Grantor or grantors (introductory paragraph).

1. Names

2. Addresses

• Trustee or trustees.

1. Names and addresses

2. Bank or corporate trustee (introductory paragraph) s/

• Identification of facilitiu and cost estimates (Section 2).b a

Adapted from 17A Am Jur Legal Forms 2d (Rev) 5251.94.

Refereces are to recommended wording for trust agreements provided in Section 4.

3-19

o O l l

EXHIBIT 3-5 (continued)

Words of transfer, conveyance, and delivery in trust (Section 3).

%d g)*)

• Payments constituting the trust fund (Section 4).

• Duration of trust.

• Description of trust property.

y,k h Property described in attached schedule (Schedule 8) 3, gad---pl.

2. Cash  !

3. Stock and other securities

• Additions to trust.

• Distribution of trust principal (Section 5).

1. Disbursement to licensee upon proper certification

2. Payment for activities at NRC's direction in writing l

3. Refund to grantor at NRC's specification in writing after comp 1** ion of decommissioning activities O w.bJ J p s.m ~ d ~+ ut,a e pet.,L

• Trust management (Sections 6-8).  :

1. Discretionary powers

2. Fiduciary duty i

3. Commingling and investment l

I i 4. Sale or exchange of trust property Scope of innsteents I

5.

j

6. Express powers of trustee

7. Borrowir.g money and encumbering trust assets

' * (Optional provisions) l

' 3-20 i

i o o i l

l EXHIBIT 3-5 (continued) hd 8. Insurance i

1. ) 9. Operation of business i

, 10. Compromise of claims

\

l l

• Taxes and exoenses (Section 9).

l

• Annual valuation (Section 10).

• Advice of counsel (Section 11). l Authority, compensation, and tenure of trustees (Sections 12-14). l

1. Trustee compensation

2. Successor trustee ..

3. Instructions to trustee

• Amendment of agreement (Section 15).

• Irrevocability and termination (Section 16).

l

• Immunity and indemnification (Section 17).

• t.aw to govern construction and operation of trust (Section 18).

• Interpretation and severability (Section 19).

I i

• Date (signature block).

t

• Signatures (signature block).

j

• Acknowledgements, seals or attestations, if necessary or desired (witness by notary public).

l d

• Acceptance of trust by trustee or trustees (acknowledgment).

3-21

o o l 1

i

,1 j caos ________________ l

! LI:gNSE SCREEN e e _ CECOMMISSICN!NG FINANg;g( gggggg cg l CAMnr.. N 1 _____________, i l _ _ _ ET:

_ _ H9.___ _ __ LI:s

_ _ .!_ _T_IM.}_

........................."................................7.,,'_'_g!___'__--"_----

Occk .0)fil _ ___

Namt: _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _F_l I, FanfY IS5u!NG NECHANISM: Assum fyng i a

NAw

h M %.e d_ M ____________ -ECs ry s : co l a c o n t i _ u s _ii U 2 d _ :. s m _ _ _ _ _ _ _ _ _ _ _ McCM amouNr, 6 4p,.

acoR2s ______________________________ 4**movEn? _ oni-g-- l

. C17Y : _ w b_______________ exp!REs T marr, 6.~u- .nd -

l Starts a z!*: _ m _____ ACTre.1 cA oo C.Cu, 5 gg trE 4

j *e4TY !SSu!NG MECHANISM ASSlJt TYpt 8 ? CERT '

l NAM t _ _ , , _ _ _ _ _ _ _ _ _ _ _ _ MggM Typg_g

e8al. _____________ ___________ =CN AnouMT. o-d c88a28 ______________________________ ***aov80T . oA7Ei 5--

l CITY : _

_ _ _ = GIP!RES 7 oATEs o'~~~

j STATES ,,, z!P _________ ACTION (Ama00 C.CHS D70 b t)

.t ee oco ooo i

3 MJ lluto NUR A,4 RS C9

! 'T f or= Af t enti on . wome to SWi tan # Casture Off f Num e t:

CMOs - _ _ _ _ _ _

LTS = FINANCIAL ASSJtANCE INFORMATION VALID MECNANISM TYPS CODES AND TNE!R MEAN!NOSs l -

t i

l MECN TYPE DESCRIPTION rn TRuSr PuNo l Es -

ESCRou ACCOUNT i

! CB CERTIFICATE OF DEPOSIT I W -

SOVERNMENT PuMD Se

-- DEpeSIT or SovERNMENT SECURTIES l S3 SURETY SOND i LT LETTER QF CREDIT '

, LN LINE F CREDIT 3 Pg = PARENT COMPANY SutRANTEE i SI --

STAi m oF INTENT l

} pmESS AETumN >EY POR FINANCIAL ASSlJtANCE SCREENS i

1 l 9 MJ L1ute 4.a R1 C1 T for aftentsen. Meme to Switan  : Casture 044 g NumF 1 l 1 l

}.

J 4

d.

l .

i _ .

I

l

• 1

/

NOV 141996 MEMORANDUM TO: Dr. Louis Bykoski, Project Officer Low-Level Waste and Decommissioning Projects Branch Division of Waste Management Office of Nuclear Material Safety and Safeguards FROM: B. J. Holt, Chief Nuclear Materials Licensing Branch Civision of Nuclear Materials Safety Region 111

SUBJECT:

REQUEST FOR ASSISTANCE IN PROCESSING AND REVIEW OF NONSTANDARD FINANCIAL ASSURANCE SUBMITTALS RELATED TO THE DECOMMISSIONING RULE Enclosed for your review is one financial assurance submittal from a Region llilicensee.

The licensee is Frontier Technology Corporation, License Number SNM-1957. The licensee replaced its expired irrevocable Standby Letter of Credit with an existing Certificate of Deposit for the same amount. We are enclosing copies of the expired and current financial assurance instruments for your review. The original submittals are secured in the Decommissioning Financial Assurance safe in Region 111.

We ask that you review the enclosed documents for acceptability.

License No. SNM-1957 Docket No. 070-03025 CONTACT: Charles F. Gill (630) 829-9814

Enclosures:

1. Licensee Ltr of Credit (LOC) did 11/14/91

2. LOC Amendment No.1 dtd 06/12/92

3. LOC Amendment No. 2 dtd 09/21/92

4. Bank Ltr to Licensee dtd 07/24/96

5. Standby Trust Agreement (STA) dtd 10/25/91  ;

6. STA Amendment No.1 dtd 12/22/92

7. STA Amendment No. 3 dtd 10/16/06

8. Licensee Certificate of Deposit -

dtd 07/26/93 i DOCUMENT NAME: M:\07003025.FAI To receiw a sepy of this document. Indicate in the bec *C" = Copy without enclosures *E" = Copy with enclosures "N" = No copy OFFICE DNMS/ Rill (- DNMS/ Rill,7, ,Q l NAME CGILL: jaw @ BJHOLT "/7)f]f DATE 11//$/96 11/G'96  ;

l OFFICIAL RECORD COPY

NNVEME*MMMMEN%sv4 *MNNM%sMMMMMMMEV4 AM 6 MM ef k international DMalon (

h S.WJ.F.T. Address \d'.

d HUNTUS33 Telex 245-475

/ Huntineton ~

l Bbks )

d u n t i rq u o Nationt1 Dani.

.LPC f g- -

lThe T r.1 m o i c.n i l Do"priment '

il

. 't i un ::

AAv-% / +f 2<' !

1 2

1 h Irr:s x ater ': u p.i b > t.M t e r of ' recii g '

,. .morr 11. 1991 I

11 . 3 . Nuclear Regulatory Commissjon '

Washington, D.C. 20555 Gent J emen:

We hereby e/Labl.tsh our T r re'. o c u ol e Standby bett.er of Credit No. 6 in your fasor, at the request and for the atcount of Front.ier Technology Corporation, 1611 Purnett Drive. ).enin. Ohio 15385. up t6 .

the a g g re.,n '.e amount of USS37.000.00, available upon presentatinn of: l (1) Your sight draf t , bearing reference to this i.e t t er of Credit No.. M ani (2) Your signed s t a t erne n t r ead i n c; *ts f o l .l o w s ' 'I certify that the amount. of the draft is payable pursuant to regulations issued under authority of the U.S. Nuclear Regulatory Commission."

Tht: Letter of Credit is issued in accordance with regulations i a s uest under the aut.hortt.y of the U.S. Nuclear Regulatory Commission (NRC), an agency of !he U.S. Government, pursuant to the Atomic Energy Act of Ihaspromulgat.ed 1951, as amended, and the Energ, Reorganization Act of 1974.

regulations an Title 10, Chapter 1 of the Code of Federal Regulations, Part 130.-10,70, or 721. which require that a holder of, or an applicant for, a license i :m ue d under 10 CFR Dn c t.s The NRC g

y [30,10,70, or 721 provide issurance that runds will be asailable when

1. needed for derommissioning.

This Letter of Credit. is effective as of November 14, 1991 and shall e.;pi re on November 2, 1992, but such expiration date shnil be

, automatically extended for a period f one year on N o i c m l.e r 2, 1942, /

2 and on each successive expi ra t ion da t e , unless, at least 90 day:. before e

$ the current expirat. ion date, we notify both you and Frontier Technology f, Corparat. ion of our decision not to renew this Letter of Credit., by fp y certified mail, as shown on the signed return receipts. If Frontier f y Technology Corporation is unable t.o secure alternative fina,ncial

~

2 assurance to replare this Letter of Credit within 30 days of

1. notification af our decieion not to renew the NRC may drawn upon the p full val a ,f t.h i s ic+ r- r of Fredit. priar tu its then espir' f a t+ . p wxx=vvemsssvvvsv=ssvvvvvvvvvwasawmt%m n a *vM .s musvvvmavT CAT NO 17-070 H/P.Fl

f% /%

i i  ! \

' ' I STANDBY TRUST AGREEMENT TRUST AGREEMENT, the Agreement entered into as of October 25, 1991 by and between Frontier Technology Corporation, an Ohio Corporatiun, herein referred to as the " Grantor," and the Huntington National Bank, 5 West North Street, P.O. Box 1127, Springfield, Ohio 45501, the " Trustee."

WHEREAS, of the U.S.

the U.S. Nuclear Regulatory Commission (NRC), an agency Government, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, has promulgated regulations in Title 10, Chapter 1 of the Code of Federal Regulations, Part 30. These regulations, applicable to the Grantor, require that a holder of, or an applicant for, a Part 30, 40, 70, or 72 license provide assurance that funds will be available when needed for required deconwaissioning activities.

WHEREAS, the Grantor has elected to use a letter of credit to provide all of such financial assurance for the facilities identified herein; and  ;

WHEREAS, when payment is made under a letter of credit, this -

i standby trust shall be used for the receipt of such payment; aruf l WHEREAS, the Grantor, acting through its duly authorized officers, has selected the Trustee to be the Trustee under this Agreement, and the Trustee is willing to act as trustee, NOW, THEREFORE, the Grantor and the Trustee agree as follows:

Section 12 Definitions. As used in this Agreement:

(a) The term " Grantor" means the NRC licensee who enters i

into this Agreement and any successors or assigns of the Grantor.

(b)

The term " Trustee" means the trustee who enters into this Agreement and any successor Trustee.

Section 2. Costs of Decommissioning. This Agreement pertains to the costs of decommissioning the seaterials and activities identified in License Number SNM-1957 issued pursuant to 10 CFR Part 30 as shown in Schedule A.

Section L Establishment of Fund. The Grantor and the Trust.ee hereby establish a standby trust fund (the Fund) for the benefit of the NRC. The Grantor and the Trustee intend that no third party have access to the Fund except as provided herein.

Section 4. Payments Con =titutino the Fund. Payments made to the Trustee for the Fund shall consist of cash, securitis , or other lio.id assets acceptable to the Trustee. The Fund is established initially as consisting of t,he property, which is acceptable to tSe Trustee, described'in Schedule B attached hereto. Such f II

[i  ;

.,. -. . ~. - . . - - . . - . ~ ~ - ~ -_ _ . _ - . . ._ - - . .

r t property and any other property subsequently transferred to the  !

Trustee are referred to as the " Fund," together with all earnings and profits thereon, less any payments or distributions made by the Trustee pursuant to this Agreement. The Fund shall be held by the Trustee, IN TRUST, as hereinafter provided. The Trustee i shall not be responsible nor shall it undertake any responsibility for the amount of, or adequacy of the Fund, nor any duty to collect from the Grantor, any payments necessary to discharge any liabilities of t,he Grantor est.ablished by the NRC.

l Section 5. Payment for Required Activities Speci fied jLn the Plan.

The Trustee shall make payments from the Fund to the Grantor upon presentation to the Trustee of the following: ,

a. A certificate duly executed by the Secretary of the Depositor attesting to the occurrence of the events, and in the form set forth in the attached Specimen

- Certificate, and l b. A certificat,e attesting - to the following corx11tions; 1 (1) that decommissioning is proceeding pursuant to an NRC-approved plan. .

(2) that the funds withdrawn will be expended for activities undertaken pursuant to that Plan, and (3) that the NRC has been given 30 days prior notice l

' of Frontier Technology Corporation's int.ent to wit,hdraw f unds f rom the escrow f und.

No withdrawal from the fund can exceed twenty-five percent of the j

outstanding balance of the Fund or twenty-five thousand dollars, whichever is greater, unless NRC approval is attached.

.In the event of the Grantor's default or inability to direct decommissioning activities, the Trustee shall make payments from the Fund as the NRC shall direct, in writing, to provide for the l payment of the costs of required activities covered by this l Agreement. The Trustee shall reimburse the Grantor or other persons as specified by the NRC, or State agency, irom the Fund for expenditures for required activities in such amounts as the l- NRC, or State agencey shall direct in writing. In addition, the Trustee shall refund to the Grantor such amounts as the NRC specifies in writing. Upon refund, such f urxis shall wa lorwjer constitute part of the Fund as defined herein.

Section 6. Trust Manaoement. The Trustee shall invest and reinvest the principal and income of the Fund and keep the Fund invested as a single fund, without distinction between principal and income, in accordance with general investment, policies and guidelines which the Grantor may communicat.e in writing to the q

Trustee from time to time, subject, however, to t.he provisions of this section. In investing, reinvesting, exchanging, sel1ing, and managing the Fund, the Trust,ee shal 1 discharge its duties

h i

\. /'

[.'-

. ( .

l i

i with respect to the Fund solely in the interest of the  !

beneficiary and with the care, skill, prudence, and diligence l

under the circumstarces then prevailing which persons of ,

i

. prudence, acting in a like capacity and familiar with such matters, would use in the conduct of a enterprise of a like l character and with like aims; except that: l l

(a) Securities or other obligations of the Grantor, or any ot.ber l

owner or operator of the facilities, or any of their affiliates 1

' as defined in the Investment Company Act of 1940, as amended  !

(15 U.S.C. 80a-2(a)), shall not be acquired or held, unless they are securities or other obligations of the Federal or a  !

l State government; (b)

The Trustee is authorized to invest the Furut in time or  !

demand deposits of the Trustee, to the extent insured by agency of the Federal Government, and in obligations of the Federal Government such as GNMA, FNMA, and FilLM bonds and certificates or State and Municipal bonds rated BBB or higher by Standard and Poors or Baa or higher by Moody's Investment Services; and I

(c) For a-reasonable time, not to exceed 60 days, the Trustee is .

authorized to hold uninvested cash, awaiting investment or distribution, without liability for the payment of interest thereon.

Section Z2 Comminaling and Investment. The Trustee is expressly authorized in its discretion (a)

To transfer from time to time any or all of the assets of the fund to any common, commingled, or collective trust fund created by the Trustee in which the Fund is eligille to participate, subject to al1 of the provisions thereof, to be commingled with the assets of other trusts participating  !

l therein; and (b) To purchase shares in any invetment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), including one that may be created, managed, underwritten, l or to which invest. ment advice is rendered, or the shares of which '

are sold by the Trustee. The Trustee may vot e such shares in its ,

discretion.- l Section 8 2 h eress Powers gf, Trustee. Without in any way limiting the powers and discretion rmnferred upon the Trustee by the other provisions of this Agreement or by law, the Trustee is j expressly authorized and empowerede (a) To sell, exchange, convey, transfer, or otherwise dispose of any property held by it, by public or privat,e sale, as

( necessary to allow duly authorized withdrawals at the joint

( request of the Grantor and the NRC or to reinvest in securities at the. direction of the Grantor;

(b) To make, execute, acknowledge, and deliver any and all documents  !

of transfer and conveyance and any and all other instruments that may be necessary.or appropriate to carry out the powers herein. granted.  ;

(c) .To register any securities held in the Fund in its own name,  !

or in the name of a nominee, and to hold any security in bearer l form or in book entry, or to combine certif icates representing (

such securities with certificates of the same issue held by the i Trustee in other fiduciary capacities, to reinvest interest i payments and funds from natured and redeemed instruents, to file l proper forms concerning securities held in the Fund in a timely l fashion with appropriate government agencies, or to deposit or arrange for the deposit of such securities in a qualified central depository even though, when so deposited, such securities may be merged and held in bulk in the name of the nominee or such depository with other securities deposited 1

therein by another person, or to deposit or arrange ior the deposit of any securities issued by the U.S. Government, or any agency or instrumentality thereof, with a Federal Reserve bank, but the books and records of the Trustee shal1 at alI times show that all such securities are part of the Fund; (d) To deposit any cash in the Fund in interest-bearing accounts maintained or savings certificates issued by the Trustee, in its separate corporate capacity, or in any other banking institutilon affiliated with the Trustee, to the extent insured by an agency of the Federal government; and (e) To compromise or otherwise adjust all claims in favor of or against the Fund.

Section 9. Taxes and Expenses. All taxes of any kind that may i

be assessed or levied against or in respect of the Fund and all brokerage commissions incurred by the Fund shall be paid from the Fund. All other expenses incurred by the Trustee in connection ,

{

with the administration of this Trust, including fees for legal i services rendered to the Trustee, the compensation of the Trustee to the extent not paid directly by the Grantor, and all other i proper charges and disbursements of the Trustee shall be paid j irom the Fund. '

Sgetion 10. Annual Valuation. After payment has been made into this standby trust fund, the Trustee shall annually, at least 30 days before the anniversary date of receipt of payment into the ,

standby trust fund, furnish to the Grantor and to the NRC a statement coniirming the value of the Trust. Any securities in the Fund shall be valued at market value as of no more than 60 days before the anniversary date of the establishment of the Fund. The failure of the Grantor to object in writing to the Trustee within'90 days after the statement has been furnished to the Grantor and the NRC, or State agency, shall constitute a conclusively binding assent by the Grantor, barring the Grantor  ;

from' asserting any claim or liability against the Trustee with '

respect to the matters disclosed ii the statement.

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, (/ V Section ti. Advice of Counsel. The Trustee may from time to time consult with counsel with respect to any question arising as to l the construction of this Agreement or any action to be taken hereunder. The Trustee shall be fully protected, to the extent permitted by law, in acting on the advice of counsel. ~

gection 121 Ipyteg Cgerensating. The. Trustee shalI be .c.i t l e d to reasonable compensation for its services as agreed upon in writing with the Grantor. (See Schedule C.)

Sectigg 13 3 Successor Trustee. Upon 90 days notice to the NRC, the Trustee may resign; upon 90 days notice to NRC and the Trustpe, the Grantor may replace the Trustee; but,such resignation or replacement shall not, be ef f ective until t,he Grantor has appointed a successor Trustee and this successor accept.s t,he appointment. The successor Trustee shall have the same powers and duties as those conferred upon the Trustee hereunder. Upon the successor Trustee's acceptance of the appointment, the Trustee shall assign, transfer, and pay over to the successor Trustee the funds and properties then constituting the Fund. If f or any reason the Grantor cannot or does not act, in the event of the resignation of the Trustee, the Trustee may apply to a court ,

of competent jurisdiction for the appointment of a successor Trustee l or for instructions. The successor Trustee shall specify the date on which it assumes administration of the trust in a writing sent, to the Grantor, the NRC or State agency, and the present Trustee by certified mail 10 days before such change becomes effective. Any expenses incurred by the Trustee as a result of any of the acts contemplated by this section shall be paid as provided in Section 9.

Section 14. Instructions tg the Trustee. All orders, requests, and ihstructions by the Grantor to the Trustee shalI be in writing signed by such persons as are signatories to this agreement rr such other designees as the Grantor may designate in writing. >? Trustee shall be fully protected in acting without inquiry in accordance with the Grantor's orders, requests, and instructions. If the NRC or State agency issues orders, requests, or instructions to the Trustee these shall be in writing, signed by the NRC, or State agency, or their designees, and the Trustee shall act and shall be fully protected in acting in accordance with such orders, requests, and instructi ons.

The Trustee shall have the right to assume, in the absence of written notice to the contrary, that no event constituting a change or a termination of the authority of any person to act, on behali of the Grantor, the NRC, or State agency, hereunder has occurred. The Trustee shalI have no duty to act in the absence of such orders, requests, and instruction from the Grantor and/or the NRC, or State agency, except as provided for herein.

I EE9hi99 1Ez Amendment gf_ Agreement. This Agreesent may be amended by an instrument in writing ex,-ated by the Grantor, r.he Trustee and the NRC, or State agency, or by the Trustee and the NRC or State agency, if the Grantor ceases to exist.

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. O O i Section 16. Irrevocability and Termination. Subject to the right of the parties to amend this Agreement as provided in Section 15, this trust shall be irrevocable and shall continue until terminated at the written agreement of the Grantor, the Trustee, and the NRC, or l

State agency, or by the Trustee and the NRC or State agency, if the Grantor ceases to exist. Upon termination of the trust, alI remaining trust property, less final trust administration expenses, shall be delivered to the Grantor or its successor.

Section 17. Immunity and Indemnification.

The Trustee shall not incur personal liability of cny nature in connection with any act or omission, made in good faith, in the administration of this trust, or in carrying out any directions by the Grantor,, the NRC, or State agency issued in accordance with this Agreement. The Trustee shall be indemnified and saved harmless by the Grantor or from the trust fund, or both, f rom and against any personal liability to which the Trustee may be subjected by reason of any act or conduct in its official capacit". including all expenses reasonably incurred in its defense in the event the Grantor fails to provide such defense.

Section 18. This Agreement shall be administered, construed, and enforced according to the laws of the State of Ohio. .

Section 19. _Internretanion and Severabili h As used in this Agreement, words in the singular include the plural and words in the plural include the sirgular. The descriptive headings for each section of this Agreement shal1 not affect the interpretation or the legal efficacy of this Agreement. If any part of this Agreement is invalid, it shall not affect the remaining provisions which will remain valid and enforceable.

IN WITNESS WHEREOF the parties have caused this Ager w nt to be executed by the respective officers duly authorized and the incorporate seals to be hereunto af fixed and attested as of the date first written above.

TTEST_: _ _ , Frontier Technology Corporation President Mc2 , . UW #

h retaryg/feasu _ -

The Huntington National Bank ATTEST:

M T' ST OFFICER g , ,y T glST OFFICER s

,m e

. U Us i i

ACKNOWLEDGEMENT STATE OF OHIO  !

)

County of Franklin To Wit:

CI TV- OF-WR-144NhD On this 25th day of October, before me, a notary public in and for the city and State aforesaid, personally appeared f.t. D. HOTH ,

and she/he did depose and say that she/he is the TRUSLQEfiUR ,

of the Huntington National Bank, national banking association, I Trustee, which executed the above instrument, that she/he knows the seal of said association; that the seal affixed to such instrument is such corporate seal; that it was so affixed by order of -the association; and that she/he signed bec/his nasse thereto by like order.

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My Commission Expires:

P' 3 D/ j'- CAllERINEE. SCOTT some neur

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TRUST AGREEMENT SCHEDULE SQtjEDUL!i_A This Agreement demonstrates financial assurance for the following site-specific cost estimates for the following licensed activities:

U.S. NUCLEAR NAME AND COST ESTIMATES FOR REGULATORY ADDRESS ADDRESS OF REGULATORY ASSURANCES COMMISSION OF LICENSED DEMONSTRATED BY LICENSE NUMBER LICENSEE ACTIVITY THIS AGREEMENT SNM - 1957 Frontier Technology Corporation S86,332.00 1641 Burnett Drive SAME ADDRESS Xenia, Ohio 45385 The cost estimates listed here were last adjusted and approved on October 9, 1991.

SCHEDULE B AMOUNT: $86,332.00 AS EVIDENCED BY: Site Specific Cost Estimate, Rev. 01 Dated October 9, 1991.

.)

SCHEDULE C The Huntjngt_o_nJ ational Bank , Trustee's fees shall be GjQQ.00 .

annually, payable in advance i

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I SESGiOED Ceetiiicate of Events  !

i The huntai,gton 'Ja ti ona 1 Bank l 5 west twortn ccee-C.O. Box 1127 i

Spr2ngfielo, ~ nic 4550,  !

Attention: Trust Divisar-l l

Gentlemen:

In accordance with Lne terms of tr.e Agreement v i t.S ye.m dated October 25, 1991, I, __ _ ___ _ _ _ _ , Secret,ary ci r romier i

Technology Corporation, pereay certify t,nat the !ollowing events I have occurred:

1. Frontier Technology Corporation is req: i red to cas.rence ths>

ceconunissioning c: its facility located at t o41 Eurnett Orave, Xenia, Onir 4536: IhereEnafter ca! led the decoran tusianinop .

l

2. Tne p l -.ns anc xc:voucev 'or the c onane ncecie n t ano ocnduct l of the dero. m ss ;r ng nave ree- .tppt :;ve d by t~a . .'n itec St a tes Nuclear Regulatory Cormission s or ts successor, or

_____ __.__________._ ____800Cy "I a PU rc^ra l obtachec .

3. The Board of Directors of Frontier Teennnlogy Corporatio-has adopted the attached resol ution au thori r mg tne comtoencement of the decommissioning.

Secretary of Frontier Technology Corporatlion Date L s L.fu. &,

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.. -. . - . - . - . . . ,-._ . . . . . . . . .-. .. ~ ..

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- Certifinat.e of Resolutton  !

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_,,,,_ , do hereby certi f y t.ha t, .I am Secretary of Frontier Technoloay Corporation, an Ohio corporation, and.that the resolution listed below was duly adopted at a meetting.of this Corporation's Board of Directors on .,

19_7__.

In WITNESS WHEREOF, I have hereunto signed my name,and  !

affixed the sea 1 of this Corporation this day of j

_ _ _ , 19 .

j Secretary l RESOLVED, That this Board of Directors hereby authorizes the President, or other employee of the Company as he may designate, to commence decommissioning activities at Frontier Technology Corporation in accordance with the terms and conditions described to this Board of Directors at this meeting and with such other

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. terms'and conditions as the President shall approve with and upon the advice of Counsel.

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1) "The bank shall give immediate notice to the applicant '

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,. , and the (insert NRC or name of State agency) of any i

, notice received or action filed alleging (1) the '

insolvency or bankruptcy of the financial institution, I or (2) any violation of regulatory requirements that I i: '

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charter or license to do business. The financial  ;

'9' ' institution also shall give immediate notice if the

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pl All oller t terms and conditions remain unchanged.

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'd i_ :ndbs Lettcr of Fredit No. M

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f Each draf t must bear on it: face the clause " Drawn under IMtt er of and all oth@er drafdated November 14, 1991, and the total of t.his draft Credit No.

f ts previously drawn g

not exceed US$87,000.00.

unde - t.his Letter of Credi t does

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,s Very.truly yours, The !!untington Nationa.1 Bank b.h4 %hJl_

Internatfional Operations Officer i

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,_-:--------------::------------------------------------------------------~

LAT NO 1/ 010 P

l-FRONTIER TECHi.JLOUY CORPORATIO1.

O O N.R.C Liense S.N.M.1957

. P.O. Box 486

• 1641 Bumert Drive

• Xenia, O$to 45365 * (513) 376 3691

• Telex 11910 333 8267 574 & n i THE HUNTINGTON NATIONAL BANK CORPORATE TRUST DEPARTMENT Qgg I 41 SOUTH HIGH STREET - HC1112 COLUMBUS. OHIO 43215

. DECEMBER 22, 1992 l

STANDBY TRUST AGREEMENT - AMENDMENT No. 1 U.S. NUCLEAR REGULATORY COMMISSION -

WASHINGTON, D.C. 20555 i GENTLEMEN:

WE HEREBY AMEND OUR STANDBY TRUST AGREEMENT ISSUED IN YOUR FAVOR FOR THE ACCOUNT OF FRONTIER TECHNOLOGY CORPORATION TO MODIFY SECTION 5, PARAGRAPH 2 18 FOLLOWS:

1 "No WITHDRAWAL FROM THE FUND CAN EXCEED TEN (10) PERCENT OF THE )

OUTSTANDING BALANCE OF THE FUND UNLESS NRC APPROVAL IS ATTACHED." l ALL OTHER TERMS ~AND CONDITIONS REMAIN UNCHANGED. I i

FRONTIER TECHNOLOGY CORPORATION l EDWARD F. JANZO , PR IDENT TREVA L. JAN20W, SECRETARY / TREASURER I

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TRUST AMENDMENT No. 1 12/52/92

. O O FRONTIER TECHNOLOGY CORPORATION P.O. Box 486

• 1641 Burnett Drive

• Xenia OH 45385 Tel 937 376-5691 Fax: 937 376-5692 NRC License Number SNM-195 The Huntington National Bank Corporate Trust Department l 41 South High Street - HClll2 l CoIumbus OH 43215 October 16, 1996 1

STANDBY TRUST AGREEMENT - AMENDMENT NO. 3 U.S. Nuclear Regulatory Commission 578 Ak *?

l Region III Attention: Mr. Charles Gill Materials Licensing Section du+ /d 9 801 Warrenville Road Lisle Illinois 60532-4351 Gentlemen:

We hereby amend our Standby Trust Agreement issued in favor of the U.S. Regulatory Commission (NRC) to modify the third and.

fourth paragraphs as follows:

"WHEREAS, the Grantor has elected to use a certificate of deposit to provide all of such financial assurance for the facilities identified herein; and WHEREAS, when payment is made from a certificate of deposit, this standby trust shall be used for the receipt of such payment; and" ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

This modification replaces Letter of Credit No. 6 issued by Huntington Bank with Certificate of Deposit No.

issued by Huntin ton Bank. An original signed copy of Certificate of Deposit No. has been sent to the NRC, Region III.

FRONTIER TECHNOLOGY CORPORATION Edward F. Ja ow President

-- et Treva L. Janzow, Secretary /Troasurer l RECEIVED j

Enclosure:

Certificate of Deposit l

M OCT 181996 REGION III v'Me[n Ura j'.."n v 5 p P "

[tI M hh  : ddined OCT 18 86

.- - _ . .. - . . . -- ~ . . - - . -

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FRONTICR TECHNOLOG ~ CORPORATION g.

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JtJLY *)6 1994

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Interest will be computed using a daily rate of ( 1/360th y 1/365 or 1/366 in a leap year) of the annual rate for each day. l X

Interest will be ( compounded daily compounded annual!y simple interest without compoundirIgf.' interest will be paid MONTHLY ' to/by 01441821627 Aonth y, quanerty, semFannuaky, at matunty) . This certificate is (method of disbursement)

NON-NE T d NO A!C Af'OIT LE. The minimum opening deposit for this account is $ s10.000.00 .

% 3 /~

, a wramro swr m .ccou,, ,,-

l ACCOUNT REDEMPTION / CLOSURE REQUEST  :

DATE:

0$Wh02 (REV. 6*H FRONTIER TECHNOLOGY CORPORATION 31-1119767 1

PO BOX 486 XENIA OH 453 5-0486 This s a tp sect copy of the original certificate number 6

%. a.

i Philip R.^hushk Vice President ENDORSEMENTMEOUEST FOR REDEMPDON

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CONVERSATION RECORD lnMa joArs CONVERSATION RECORD 1. 8:05 am' 10/16/% -

, 2.4:40pm 11/04/96  !

3.2:50pm I1/08/96 I

O visrr - L O ca m asses x namowe SC ""

i x ouroomo nAMe ce rsasonm courAcrno on m courAct onornanow mmce.oerrrrc.) rasmown wo.

I.,3. Treva L. Janzow, Sec./freasurer Frontier Technology Corp. 513/376-5691 2,- Edward Janzow, President Frontier Technology Corp. 513/376-5691 .4 l

aumect Financial Assurance Instrument About to Expire; No Replacement FAI Received. l LUMMAaY

1. At 8:05 am on 10/16/96, I informed Mrs. Janzow that NRC/ Region 111 received notification from the Huntington i Natsonal Bank in late July 19% stating that her corporation's FAI letter ofcredit (L.O.C.) would expire on November 1,1996 and would not be renewed. I also informed her that Frontier was required to have a replacement instrument submitted to the NRC before the current FAI expired.

Mrs. Janzow replied that she had not received this notification from the bank and, although she was sure that the letter 3 of credit could be renewed, she would prefer to replace the L.O.C. FAI with an existing certificate of deposit (CD)

FAl. She stated that, independent of NRC requirements, the bank had required Frontier to have a CD for $87,000 in addition to the letter of credit. Mrs. Janzow also stated that the existing standby trust agreement (STA) was written j in manner that would allow for this type ofinstrument replacement.  !

Mrs. Janzow agreed to send, by overnight mail, an originally signed copy of the certificate of deposit to NRC/ Region III, within two days, with a letter stating that Frontier Technology Corporation requests that this instrument replace  ;

their current letter of credit and that her STA would remain in force for the new instrument.

l

2. At 4:40 pm on 11/4/96, after repeated attempts to contact Mrs. Janzow, I spoke with her husband regarding an l apparent problem with their response documentation received on 10/18/96. Iinformed Mr. Janzow that we had '

received STA Amendment No.' 3 dated 10/16/96 and CD dated 7/26/93; however, we had no record of having i l

received STA Amendment No. 2. He said he would have his wife look into the matter and requested that I call her in the aflemoon on i1/8/96.

~ 3. At 2:50 pm on 11/18/96, Mrs. Janzow stated that there was never a STA Amendment No. 2. She said that when the I STA was amended on 10/16/96, the numbering was inadvertently based on the L.O.C. amendment sequence instead  ;

of the STA sequence. The NRC Region 111 office never received STA Amendment No. 2 because it never existed.

Acnow asousso ,

Licensee needs to submit an originally signed copy of the CD and any other documentation necessary to demonstrate that the i STA allows for this type ofinstrument replacement.

' NAME oF PERSON DoCUMININo CONVERSATION SloNATURE DA'lE Charles F. Gill-' l hggg l 10/16,11/4 & 11/8/96

,.1-- ,y- - q&,-.a3 -% , e , e.--+, --gy w-

p

• k kb ACHON TAKEN On 10/18/96, Region ill received STA Amendment No. 3 dated 10/16/96 and CD dated 7/26/93. However, Region Ill had not received a copy of STA Amendment No.2 (see conversation record dated 11/4/96). This matter was resolved when the

. licensee confirmed that STA Amendment No. 3 should have been denoted as No.2 (see conversation SIGNA M TirLE DATE 4

frontier.CFD MM Senior Licensing Reviewer 10/18,i1/4 & 11/8/96 I

i

I,  % g , l V V i i! CONVERSATION RECORD lTa4s lnATs 3 CONVERSATION RECORD 1. 8:05 am 10/16/96

2. 4:40 pm 11/04/96 3.2:50pm 11/08/96 1

O visrr O courr.aruce x nuPHONs

( INCOMINO x OUr00!NO NAME OF PERSON (5) CONTACTED OR IN CONTACT ORGANIZATION (OITICE DEPT.ETC) TELEPHONE NO 1.,3. Treva L. Janzow, Soc./freasurer Frontier Technology Corp. 513/376-5691 1 2. Edward Janzow, President Frontier Technology Corp. 513/376-5691 3 suumer Financial Assurance Instrument About to Expire; No Replacement FAI Received.

SUMMARY

1. At 8:05 am on 10/16/96, I informed Mrs. Janzow that NRC/ Region 111 received notification from the Huntington l National Bank in late July 1996 stating that her corporation's FAI letter of credit (L.O.C.) would expire on November  ;

, 1,1996 and would not be renewed. I also informed her that Frontier was required to have a replacement instrument l submitted to the NRC before the current FAI expired.

Mrs. Janzow replied that she had not received this notification from the bank and, although she was sure that the letter

> of credit could be renewed, she would prefer to replace the L.O.C. FAI with an existing certificate of deposit (CD)

FAl. She stated that, independent of NRC requirements, the bank had required Frontier to have a CD for $87,000 in l addition to the letter of credit. Mrs. Janzow also stated that the existing standby trust agreement (STA) was written in manner that would allow for this type ofinstrument replacement. l I

Mrs. Janzow agreed to send, by overnight mail, an originally signed copy of the certificate of deposit to NRC/ Region III, within two days, with a letter stating that Frontier Technology Corporation requests that this instrument replace their current letter of credit and that her STA would remain in force for the new instrument.

I

2. At 4

40 pm on 11/4/96, after repeated attempts to contact Mrs. Janzow, I spoke with hw husband regarding an apparent problem with their response documentation received on 10/18/96. Iinformed Mr. Janzow that we had received STA Amendment No. 3 dated 10/16/96 and CD dated 7/26/93; however, we had no record of having received STA Amendment No. 2. He said he would have his wife look into the matter and requested that I call her in ,

the afternoon on 11/8/96. I

3. At 2:50 pm on 11/18/96, Mrs. Janzow stated that there was never a STA Amendment No. 2. She said that when the STA was amended on 10/16/96, the numbering was inadvertently based on the L.O.C. amendment sequence instead of the STA sequence. The NRC Region III office never received STA Amendment No. 2 because it never existed.

AcnaN aavuuuso l Licensee needs to submit an originally signed copy of the CD and any other documentation necessary to demonstrate that the l STA allows for this type ofinstrument replacement. '

NAME OF PEIL10N DOCUMENTING (XRJYERSATION SIONATURE DATE i

Charles F. Gill l gg l 10/16,11/4 & 11/8/96 l

T-y.'

i-o o i l j CONVERSATION RECORD jnMs lDArs

CONVERSATION RECORD 1. 8

05 am 10/16/%

i. 2.4:40pm 11/04/96 l4 .,. 2:50 pm 11/08/96

.;. I O ar O comRsNCc x m m oNs y{ INCOMING x Ouroomo NAME OF PER50N(5) CONTACTED OR IN CONTACr ORGANIZATION (OFFICE DEPTETC.) TELEPHONE NO

,l 1.,3. Treva L. Janzow, SeclTreasurer Frontier Technology Corp. 513/376-5691 1 - 2. Edward Janzow, Pnssident Frontier Technology Corp.- $13/376-5691

) suwser Financial Assurance Instrument About to Expire; No Replacement FAI Received.

SUMMARY

[ 1. At 8:05 am on 10/16/96, I informed Mrs. Janzow that NRC/ Region 111 received notification from the Huntington t National Bank in late July 1996 stating that her corporation's FAI letter of credit (L.O.C.) would expire on November j 1,1996 and would not be renewed I also informed her that Frontier was required to have a replacement instrument submitted to the NRC before the current FAI expired.

}

F

' Mrs. Janzow replied that she had not received this notification from the bank and, although she was sure that the letter I of credit could be renewed, she would prefer to replace the L.O.C. FAI with an existing certificate of deposit (CD)  !

1- FAI. She stated that, independent of NRC requirements, the bank had required Frontier to have a CD for $87,000 m  ;

addition to the letter of credit. Mrs. Janzow also stated that the' existing standby trust agreement (STA) was written ]

in manner that would allow for this type ofinstrument replacement.

l ll Mrs. Janzow agreed to send, by overnight mail, an originally signed copy of the certificate of deposit to NRC/ Region I i ;. III, within two days, with a letter stating that Frontier Technology Corporation requests that this instrument replace it their current letter of credit and that her STA would remain in force for the new instrument.

y

2. At 4:40 pm on 11/4/96, aller repeated attempts to contact Mrs. Janzow,I spoke with her husband regarding an apparent problem with their response documentation received on 10/18/96. Iinformed Mr. Janzow that we had j . received STA Amendment No. 3 dated 10/16/96 and CD dated 7/26/93; however, we had no record of having

. received STA Amendment No. 2. He said he would have his wife look into the matter and requested that I call her in l

the afternoon on 11/8/96.

3. At 2:50 pm on i1/18/96, Mrs. Janzow stated that there was never a STA Amendment No. 2. She said that when the

. STA was amend ~i on 10/16/96, the numbering was inadvertently based on the L.O.C. amendment sequence instead

- of the STA sequence The NRC Region III office never received STA Amendment No. 2 because it never existed.

- ACTION REQUIRED

] .

Licensee needs to submit an originally signed copy of the CD and any other documentation necessary to demonstrate that the

{ STA allows for this type ofinstrument replacement.

NAME OF PERSON DOCUMENr1NO CONVERSATION SiONA DATB

[ - Charles F. Gill l 4 g'IURE l 10/16,11/4 & 11/8/96

[

] s l

4 i l

• t** 4m <- vd. 3-*..w ----

3 '

l AcnONTAUN On 10/18/96, Region Ill received STA Amendment No. 3 dated 10/16/96 and CD dated 7/26/93. However, Region 111 had not received a copy of STA Amendment No.2 (see conversation record dated 11/4/96). . This matter was resolved when the i licensee confirmed that STA Amendment No. 3 should have been denoted as No.2 (see conversation record dl

' SIGNAERE tmB DATE .

fumam.cm Mh Senior Licensing Reviewer 10/18, 11/4 & 11/8/96 1

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FRONTIER TECHNOL OY CORPORATION - n.n.c.t,,,,,,s.n.m.,,3, P.O. Box 486

• 1641 Burnett Drivi

• Xenia, Ohio 45385 * (513) 376 5691

• Telex 11910 333 8287 THE HUNTINGTON NATIONAL BANK CORPORATE TRUST DEPARTMENT 41 SOUTH HIGH STREET-HC1112 COLUMBUS, OHIO 43215 DECEMBER 22, 1992

)

STANDBY TRUST AGREEMENT - AMENDMENT NO. 1 U.S. NiiCLEAR REGULATORY COMMISSION ,

WASHINTON, D.C. 20555 GENTLEMEN:

WE HEREBY AMEND OUR STANDBY TRUST AGREEMENT ISSUED IN YOUR FAVOR FOR Tile ACCOUNT OF FRONTIER TECHNOLOGY CORPORATION TO MODIFY SECTION 5, PARAGRAPil 2 AS FOLLOWS:

i "NO WITilDRAHAL FROM THE FUND CAN EXCEED TEN (10) PERCENT OF THE OUTSTANDING BALANCE OF THE FUND UNLESS NRC APPROVAL IS ATTACilED."

ALL OTilER TERMS AND CONDITIONS REMAIN UNCHANGED.

FRONTIER TECHNOLOGY CORPORATION EDWARD F. JANZ ,P SIDENT I

TREVA L. JANZOW ECRETARY/ TREASURER

~

A m i ilUNTINGTON NATIONAL BANK '

as Trustee

- s NUCLEAR REGULATORY COMMISSION 4 ja h TRUST AGREEMENT NO. I 12/22/92

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G U

l FRONTIER TECHNOLOGY CORPORATION P.O. Box 486

• 1641 Burnett Drive

• Xenia OH 45385 Tel: 937 376-5691 Fax: 937 376-5692 NRC License Number SNM-1957 The Huntington N'ational Bank l Corporate Trust Department 41 South High Street - HC1112 Columbus OH 43215 October 16, 1996 STANDBY TRUST AGREEMENT - AMENDMENT NO. 3 U.S. Nuclear Regulatory Commission Region III Attention: Mr. Charles Gill Materials Licensing Section 801 Warrenville Road Lisle, Illinois 60532-4351 Gentlemen We hereby amend'our Standby Trust Agreement issued in favor of the U.S. Nuclear Regulatory Commission (NRC) to modify the third and fourth paragraphs as follows:

"WHEREAS, the Grantor has elected to use a certificate of deposit to provide all of such financial assurance for the facilities I identified herein; and WHEREAS, when payment is made from a certificate of deposit, this standby trust shall be used for the receipt of such payment; and" ,

1 ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

This modification replaces Letter of Credit No. issued by Huntington Bank with Certificate of Deposit No.

Issued by Hungi ton Bank. An original signed copy o cate l of Deposit No. I has been sent to the NRC, Region III.

FRONTIER TECHNOLOGY CORPORATION HUNTINGTON NATIONAL BANK

\ /

Edward F. Ja ow, res ider.t

\ &&

Treva L. Janzo ,

tv Secretary / Treasurer CLEAR REGULATORY COHMISSION

Enclosure:

C Deposit

, LICENSE FILE

l. '

Ildll l PO s"J"af " "'" " "*"" Huntmgion Columbus Ohc 43216 Direct Telephone Number ggg UCENSE FILE

December 24, 1992 1

U.S. Nuclear Regulatory Commission  ;

Region III Material Licensing Section 799 Roosevelt Road Glen Ellyn, IL 60137 Attn: Mr. John Jones

+ r Frontier Technology Corporation ,

1641 Burnett Drive -

P.O. Box 486 ,,

Xenia, Ohio 45385 'Ns '" .

RE: Licens e / SNM-1957 gj I$

y Docket # 070-03025 - 5 P f '

Gentlemen:

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We hereby consent t the' e .ferred to and attached hereto. Please a n ldd' ing and returning in the envelope provid Fy 2

. ny questions, please contact Michael c. ( 4) -4395.

Yours very h

[bly, l f4 Huntington National Bank, as Trustee Acknowledged By N 4 -~ ~

/

U.S. NucIear Aegulatory Comm'ishion _

M y m,sw ama & p/

%W 7(@ga4 CONuko 0 0 L 91

FRONTIER TECHi .kOUY CORPORATIO1, a.c. m_, sxu.1,3 P.O. Box 486 a 1641 Bumen Drive

• Xerde, Ob 45385 * (513) 376 5691

• Telex !! 910 333 6287 6 1

' ~

THE HUNTINGTON NATIONAL BANK CORPORATE TRUST DEPARTMENT l l

41 SOUTH HIGH STREET - HC1112 COLUMBUS. OHIO 43215 i l

DECEMBER 22, 1992 1 STANDBY TRUST AGREEMENT - AMENDMENT No. 1 ,

l U.S. NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555 GENTLEMEN:

WE HEREBY AMEND OUR STANDBY TRUST AGREEMENT I ED IN YOUR FAVOR FOR THE ACCOUNT OF FRONTIER TECHNOLOGY COR ION TO MODIFY SECTION 5, PARAGRAPH 2 AS FOLLOWS: , ,. Sy< fy

.v ': . -

"No WITHDRAWAL FROM THE FUND CAN EXCEED TEN 'Q)HPERCENT F THE OUTSTANDING EALANCE OF THE FUND UNLESS A OVAL IS TACHED."

ALL OTHER TERMS'AND CONDITIONS REMAI U GED.g#

FRONTIER TECHNOLOGY CORPORATION j u

EDWARD F. JANZO , PR IDE h

,pd

_ ,L

_L._ .

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e CONTROL Ros () Q 31j g%

TRUST AMENDMENT No. 1 12/22/92

O O FRONTIER TECHNOLOGY CORPORATION P.O. Box 486

• 1641 Burnett Drive

• Xenia OH 45385 Tel: 937 376-5691 Fax: 937 376-5692 NRC License Number SNM-1957 The Huntington National Bank Corporate Trust Department 41 South High Street - HC1112 Columbus OH 43215 October 16, 1996 STANDBY TRUST AGREEMENT - AMENDMENT NO. 3 U.S. Nuclear Regulatory Commission Region III Attention: Mr. Charles Gill Materials Licensing Section > 6 801 Warrenville Road Y, ', ' @

Lisle Illinois 60532-4351 &,

Teg Y'

Gentlemen: g Id We hereby amend our Standby eeriegt 'g d ed in favor of the U.S. Regulatory Commissi to dlU the third and fourth paragraphs as follows "WHEREAS, the Grantor h c e certificate of deposit to provide all of such I t ce for the facilities identified herein WHEREAS, when is a certificate of deposit, this standby trust be us the receipt of such payments and" ALL OTHER TERMS AND CON IONS REMAIN UNCHANGED.

This modifica n replaces Letter of Credit No. 102763 issued by Huntington Bank with Certificate of Deposit No. 07 44 120856 1 issued by Huntington Bank. An original signed copy of Certificate of Deposit No. 07 44 120856 1 has been sent to the NRC, Region III.

FRONTIER TECHNOLOGY CORPORATION Edward F. J ow President Treva L. Janzow, Secretary / Treasurer RECEIVED J

Enclosure:

Certificate of Deposit 07 44 120856 1 OCT 18 586 REGION III DCT 18196

! MeNMY%%%MM%%%%%%% %MMW%%%%M l i

i I I yE International Diviolon

( S.W.lf.T. Address l HUNTUS33 Telex 245-475 Hisntington l

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V Banks  ;

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t The lluntington National Bank I l

d International Department q 41 S. Iligh Street

Columbus, Ohio 43287 k

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[ 1rrevocable Standby Lett.cr of Credit. 102763 Nov9mb, 4, 1991

.>.4 J

[; l' . S . Nuclear Regulat.ory Commission Washington, D.C. 20555 Yt.#+

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[ Gentlemen:

4 k

We hereby establish our Irrevocable Lett

\/>f Credit No. 102763 in your favor, at the request and fo ] ccrunt .af Frontier Technology Corporation, 1641 Burne d i en a, Ohio 15385. up to the aggregate amount of US$37,00' W av2 i i a upon presentation of:

h* I

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~

(1) Your sight draft, b re 1 e to this Letter i of Credit No. 10276: l I (2) Your signed at em i readi as follows: "I cert.ify j that the amount the dra is payable pursuant to I regulations issued under . u tho ri t,y of the U.S. Nuclear

[i Regulatory Commission."

i:

b This Letter of Credit is isst d in accordance with regulations issued ,

[C under the authority of the U.S. Nuclear Regulatory Commission (NRC), an agency of the U.S. Government, pursuant to t.he Atomic Energy Act of I

M 1954, as amended, and the Energy Reorganization Act of 1974. The NRC O has promulgated regulations in Title 10, Chapter I of the Code of U Federal Regulations, Part [30,40,70, or 72), which require that a holder of, or an applicant for, a license issued under 10 CFR Parts 3( [30,40,70, or 72] provide assurance that funds will be available when  ;

,; needed for decommissioning. I h

U This Letter of Credit is effective as of November 14, 1991 and shalJ M expire on November 2, 1992, but such expiration date shall be automatically extended for a period of one year on November 2, 1992, j and on each successive expiration date, unless, at least 90 days before the current expiration date, we notify both you and Frontier Technology J Corporatien of our decision not to renew t.his Letter of Credit, by 1 certified mail, as shown on the signed return receipts. If Frontier

" Technology Corporation is unable to secure alternative fina'ncial j assurance to replace this Letter of Credit within 30 days of f notification of our decision not to renew the NRC may drawn upon the

j full value of t.his Letter of Credit prior to its,then expiry date.

i  !

h%%%%%%vv%%%%%%%%%%%%%%%VE%4%%V%%4%V%%%%%%%%%%NEWVMMM CAT. NO 17-070 (1/87-

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Banks Page 2 of 1rrevocable St.andby hetter of Credit No. 102763 l Whenever this Le t.t er pf Credit. is drawn on under and in compliance with the t.erms of this i.etter of Credit, the bank shall duly honor such d ra f t. upon its presentation to the bank within 30 days, and we shall deposit the amount of the draft directly into the standby trust fund of Front.ier Technology Corporation.

l Each draf t must bear on its face the clause " Drawn ur Letter of Credit No. 102763 dated November 1 -l , 1991, and the of this draft and all other d ra f t.s previously drawn under this it of Credit does not exceed US$87,000.00. ,I . '

/

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This Letter of Credi t is subject to " Uniform Custom's k,(, P rr ice for Documentary credits, Internat.ional Chamber *o Co;d t.he date of issuance. iff ee" 6

effect on Very,truly yours,  !

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The lluntington National Bank j

b. h. J bbh.L_ '

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Internatfional Operations Officer ., j j ( f

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