ML20209E800

Requests Partial Exemption from Annual Fees,Per 10CFR171.11. Fee Unduly Burdensome.Criteria for Granting Exemption from Fee Listed.Applicability of NRC Activities Funded by 10CFR171 Annual Fees Encl

ML20209E800
Person / Time
Site:	Fort Saint Vrain
Issue date:	01/21/1987
From:	Robert Williams PUBLIC SERVICE CO. OF COLORADO
To:	NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
References
P-87031, NUDOCS 8702040704
Download: ML20209E800 (11)

Text

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O Public Service ~  ::::::.N P.o. Box 840 Denver, Co 80201-0840 2420 W. 26th Avenue, Suite 1000, Denver, Colorado 80211 R.O. WILLIAMS, JR.

VICE PRESIDENT NUCLEAR OPERATIONS January 21, 1987 Fort St. Vrain Unit No. 1 P-87031 Executive Director of Operations U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Docket No. 50-267

SUBJECT:

Partial Exemption From Annual Fees Under 10CFR Part 171

REFERENCE:

Federal Register (51 FR 33223) 10CFR Parts 51 and 171, Final Rule (G-86514)

Dear Sir:

Pursuant to 10 CFR 171.11, Public Service Company of Colorado (Public Service) hereby makes application to the Nuclear Regulatory Commission (Commission) for an exemption regarding the payment of annual fees provided for in 10 CFR 171, et seq. As you know, this recently enacted regulation requires that the fees assessed thereunder shall be reasonably related to the regulatory services provided by the Commission and shall fairly reflect the cost to the Commission of providing such services. While the Commission is concerned with recovery of the costs associated with regulation of power reactors, it was not the intent of the Commission to promulgate a fee schedule that would have the effect of imposing fees of such magnitude that owners of smaller, older reactors would suffer an adverse economic impact.

Public Service believes that the annual fee assessed under 10 CFR 171 is unduly burdensome to Public Service and, as such, requests a partial exemption therefrom so as to eliminate this burden. In support of this request, Public Service states the following. O

. t I I 87020407o4 870121 7 DR ADOCK 0500 m 7& 4A>dl,// s/J. ?25 fd/5)lf EDO 002485

. P-87031' Page 2 January 21, 1987 Public Service's Fort St. Vrain Nuclear Generating Station is unique in the industry in that it is a High Temperature Gas Cooled Reactor (HTGR). Public Service is only permitted by the Colorado Public Utilities Commission (PUC) to sell power generated therefrom at 4.8 cents per kilowatt hour. Furthermore, because of the age and size of Public Service's Fort St. Vrain reactor, Public Service believes that the Commission's general regulatory costs for the plant and the benefits bestowed on Public Service as a result of the general services rendered by the Commission are st.bstantially below that of other power reactors, thus warranting a partial exemption from the above referenced fees.

Under 10 CFR 171.11, Exemption, the criteria for the granting of an exemption from the annual fee include the following:

A) Are of Reactor: Fort St. Vrain first went critical in January 1974. As such it was the first reactor to go initially critical in 1974. Prior to 1970 eight reactors went critical, between 1970 and 1972 fifteen more went critical, and during 1973 eleven reactors went critical. Therefore, of the 107 reactors currently having operating licenses, Fort St. Vrain was the 35th reactor to go critical. This makes Fort St. Vrain among the oldest third of the nuclear units currently licensed.

8) Size of Reactor: Fort St. Vrain is rated at 330 MWe net.

Therefore, only three reactors currently licensed are smaller.

The three smaller reactors are Big Rock Point 1, Lacrosse, and Yankee-Rowe. The reactors that have become critical since 1980 have ranged in size from 829 MW for Farley 2 to 1221 MW for Palo Verde 1 and 2. The newer units are roughly three times the size of the Fort St. Vrain reactor. This factor alone limits the capability of the Fort St. Vrain reactor to produce revenue to offset any licensing fees imposed by the Commission.

C) Number of Customers in Rate Base: The number of customers in rate base is not applicable to Fort St. Vrain. No additional expenses of any kind, including additional fees such as the 10 CFR 171 fees, can be passed on to the Public Service rate payers as the result of a settlement of litigation between Public Service and the PUC, along with other litigants. As a result of the settlement, Fort St. Vrain was removed from the Public Service rate base.

D) Net increase in KWh Cost for Each Customer Directly Related to the Annual Fee Assessed Under This Part: No increase in KWh cost to customers of Public Service will result due to the imposition of the annual fee. Public Service is not permitted to seek '

future rate increases based on increased cests due to Fort St.

Vrain. The Fort St. Vrain Nuclear Station was removed from the

P-87031 Pag? 3 January 21, 1987 Public Service rate base as a result of the settlement of litigation referenced in paragraph C above. Of additional importance is the fact that the PUC has limited Fort St. Vrain cost recovery to 4.8 cents per kilowatt hour produced.

E) Any Other Relevant Matter Which the Licensee Believes Justifies the Reduction of Annual Fee:

1) Fort St. Vrain is an HTGR. Most of the Commission investigations, rule makings, program development, and regulatory research are directed to light water reactors.

The Commission HTGR related research and development activity is directed to advanced HTGR reactors and has little application to Fort St. Vrain. Substantial additional effort must be made on the part of Public Service to analyze the results of the light water reactor determinations in order to apply them to Fort St. Vrain where indicated. The NRC seldom attempts to explicitly define the relevance of a general regulatory activity to an HTGR.

Because the work that is being funded by the Part 171 annual fee is not directed to Fort St. Vrain in most cases, Public Service must incur substantial additional and unusual costs to analyze NRC regulatory information for non-light water reactor applicability and implementation. A reduction in the annual fee should be permitted to help offset the increased expenses that Public Service incurs in this process.

In an attempt to quantify the extent to which the Commission's general work product applies or does not apply to Fort St. Vrain, the Commission budget for 1987, dated February 1986, was analyzed. A document indicating the Commission staff's determination of FY 1987 budgeted costs that are related to nuclear power regulation, dated June 24, 1986, was also analyzed. Public Service then determined the portion of those costs related to nuclear power regulation that are also applicable to the Fort St. Vrain HTGR, that are partially applicable, or that are not applicable to Fort St. Vrain.

The results of the Public Service analysis are shown in Attachments I and II. The NRC allocation figures shown in column 2 of Attachment I are taken from the June 24, 1986 Commission staff document. The other figures shown in column 3 of Attachment I and columns 2, 3, and 4 of Attachment 11 are based on Public Service's analysis of the

P-87031

. Page 4 January 21, 1987 commission budget items as they are presented in the February, 1986 budget publication.

The analysis summarized in Attachments I and II indicates that less than forty percent of the Commission's work product funded by Part 171 is directly applicable to Fort St. Vrain. Included in the directly applicable category are such items as security, power reactor safeguards, and inspection and enforcement activities.

Approximately one third of the Commission budget allocated to nuclear power regulation was determined to be non-applicable to Fort St. Vrain. This category includes items such as Thermal Hydraulic Transients, a large portion of the accident evaluation work, and power reactor casework.

The remaining portion of the Comission's work product is partially applicable to Fort St. Vrain. As stated above, the partially applicable information requires extensive effort on the part of Public Service to analyze and apply the results to the Fort St. Vrain HTGR. i Since only an approximate forty percent of the 1987 budgeted costs related to nuclear power regulation are directly applicable to Fort St. Vrain, a reduction of the Part 171 annual fee is appropriate and requested.

2) The Commission staff has estimated that $37 million will be collected during 1987 from Part 170 fees. The April 23, 1986 Mid-Year Review indicates that $32 million of this will be obtained from Operating Licenses, Part 55 Operator Exams, the Materials Program, and inspections. These items either don't apply to Fort St. Vrain or are completely dependant on the number of operators assigned to the unit or the number of inspections required.

Unusually high user fees are charged to Fort St. Vrain under 10 CFR 170 due to the unit's unique design. Public Service is charged more than the average reactor for services provided by the Commission under Part 170. These charges are for amendments and special projects.

The charge to the approximately 107 reactors during 1987 for amendments and special projects is estimated to be $5 million or $47,000 per reactor. The actual charges paid by Public Service during 1985 (the most recent data available, 1986 billings are estimated by the NRC staff to be much higher) for amendments and special projects totaled

$149,067. The result is $102,000 or more in extra charges

~

. P-87031

. Page 5 January 21, 1987 to Public Service or approximately three times the average charge to a utility utilizing a light water reactor.

Since Public Service is billed approximately $100,000 or more per year more than the average reactor for 10 CFR 170 services, a reduction in annual fee under 10 CFR 171 is appropriate. As the efforts under Part 171 are generally not applicable to the HTGR, Public Service is paying more for the specialized services provided under 10 CFR Part 170.

Public Service's requested reduction in Part 171 annual fee is calculated based on the following formulation. Fort St. Vrain is one third the size of the new reactors and only forty percent of the work product funded by the Part 171 annual fee is directly applicable to Fort St. Vrain (950,000 x .33 x .40 = approximately $125,000). Also, l Fort St. Vrain is billed approximately $100,000 or more per year more than the average reactor for Part 170 fees, is among the older units, cannot recover additional costs from anyone, and must incur additional costs to analyze the Commission's work product.

In summary, due to the size, age, and Colorado regulatory treatment of Fort St. Vrain, as well as the absence of applicability of the Commission expenditures, recovery of which is represented by the assessment under 10 CFR 171, and additional inhouse expenses incurred by Public Service in utilizing the Commission's work product, Public Service hereby requests a reduction in the annual fee payable thereunder from $950,000 for 1987 to $125,000 for 1987 and each year thereafter.

Should you have any questions regarding Public Service's application for partial exemption, please contact Mr. M. H. Holmes at (303) 480-6960.

Very truly yours,

/

R. O. Williams, Jr.

Vice President, Nuclear Operations R0W/JW:jmt

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. Attachment I to P-87031 Page 1 APPLICABILITY OF NRC ACTIVITIES FUNDED BY 10 CFR PART 171 ANNUAL FEES NRC* ' Di rectly**

-Allocation Applicable to Part 171 To FSV (Dollars in Thousands)

1. NUCLEAR REGULATORY RESEARCH Reactor Engineering $ 44,186 .$ 0 Thermal Hydraulic 17,522 0 Transients Accident Evaluation 20,522 0 Reactor Operations 15,085 0 and Risk Waste Management, Earth 14,544 14,544 Sciences and Health less High and Low Level -7,622 -7,622 Waste SUBTOTAL $104,237 $ 6,922

2. NUCLEAR MATERIAL SAFETY AND SAFEGUARDS Power Reactor $ 3,742 $ 3,742 Safeguards

• From U.S. Nuclear Regulatory Commission Funds Related to Operating Reactors, June 24, 1986

• • Public Service Estimate

. Attachment I to P-87031 Page 2 APPLICABILITY OF NRC ACTIVITIES FUNDED BY 10 CFR PART 171 ANNUAL FEES NRC* Directly**

Allocation Applicable to Part 171 To FSV (DollarsinThousands)

3. NUCLEAR REACTOR REGULATION Operating Reactors $ 46,971 $13,325 Operator Licensing 8,019 0 Casework a) Power Reactors 6,045 0 b) All Other 2,227 0 c) Less Other Licenses -1,316 0 Safety Technology 12,941 0 TMI-2 531 0 SUBTOTAL $75,418 $13,325

4. INSPECTION & ENFORCEMENT Reactor Construction $ 2,513 $ 0 Reactor Operations 50,225 50,225 Less Nonpower Inspection -484 -484 Vendor and QA 7,139 7,139

• From U.S. Nuclear Regulatory Commission Funds Related to Operating Reactors, June 24, 1986

• • Public Service Estimate

, Attachment I to P-87031 Page 3 APPLICABILITY OF NRC ACTIVITIES FUNDED BY 10 CFR PART 171 ANNUAL FEES NRC* Directly**

Allocation Applicable to Part 171 To FSV (Dollars in Thousands)

Enforcement, Technical 18,178 18,178 Support and Incident

Response

a) Less Technical -1,175 -1,175 Support to Investigations b) Less Allegation -1,314 -1,314 Follow-Up Specialized Technical 3,890 3,890 Training SUBT0TAL $78,972 $76,459

5. PROGRAM TECHNICAL SUPPORT Analysis and Evaluation $ 7,720 $ 2,700 of Operational Data SUBTOTAL $ 7,720 $ 2,700 GRAND TOTAL $270,089 $103,148

• From U.S. Nuclear Regulatory Commission Funds Related to Operating Reactors, June 24, 1986

• • Public Service Estimate

. Attachment II to P-87031 Page 1 APPLICABILITY OF NRC ACTIVITIES FUNDED BY 10 CFR PART 171 ANNUAL FEES Directly** Partially ** No t**

Applicable Applicable Applicable To FSV To FSV To FSV (Dollars in Thousands)

1. NUCLEAR REGULATORY RESEARCH Reactor Engineering $ 0 $35,200 $ 8,986 Thermal Hydraulic 0 0 17,522 Transients Accident Evaluation 0 1,775 18,747 Reactor Operations 0 13,245 1,840 and Risk Waste. Management Earth 14,544 0 0 Sciences and Health Less High and Low Level -7,622 0 0 Waste ,

SUBTOTAL $ 6,922 $50,220 $47,095

2. NUCLEAR MATERIAL SAFETY AND SAFEGUARDS Power Reactor $ 3,742 $ 0 $ 0 Safeguards ,

i l

• From U.S. Nuclear Regulatory Commission Funds Related to

! Operating Reactors, June 24, 1986

• • Public Service Estimate i

i l

i

Attachment II to P-87031 Page 2 APPLICABILITY OF NRC ACTIVITIES FUNDED 8Y 10 CFR PART 171 ANNUAL FEES Directly** Partially ** Not**

Applicable Applicable Applicable To FSV To FSV To FSV (Dollars in Thousands)

3. NUCLEAR REACTOR REGULATION Operating Reactors $13,325 $ 2,895 30,751 Operator Licensing 0 8,019 0 Casework a Power Reactors 0 0 6,045 b All Other 0 0 2,227 c Less Other Licenses 0 0 -1,316 Safety Technology 0 9,693 3,248 THI-2 0 0 531 SUBTOTAL $13,325 $20,607 $41,486

4. INSPECTION & ENFORCEMENT Reactor Construction $ 0 $ 0 $ 2,513 Reactor Operations 50,225 0 0 Less Nonpower Inspection -484 0 0 Vendor and QA 7,139 0 0 Enforcement Technical 18,178 0 0 From U.S. Nuclear Regulatory Commission Funds Related to Operating Reactors, June 24, 1986

• • Public Service Estimate

f.

' . . ; ', .+ . .

Attachment II' to P-87031 Page 3 APPLICABILITY OF NRC ACTIVITIES FUNDED BY 10 CFR PART 171 ANNUAL FEES Directly** Partially ** Not**

Applicable Applicable Applicable To FSV To FSV To FSV (DollarsinThousands)

Support and Incident

Response

a) Less Technical -1,175 0 0 Support to Investigations b)LessAllegation -1,314 0 0 Follow-Up Specialized Technical 3,890 0 0 Training SUBTOTAL $76,459 0 $ 2,513

5. PROGRAM TECHNICAL SUPPORT Analysis and Evaluation $ 2,700 $ 2,700 $ 2,320 of Operational Data SUBTOTAL $ 2,700 $ 2,700 $ 2,320 GRAND TOTAL $103,148 $73,527 $93,414

• From U.S. Nuclear Regulatory Comission Funds Related to Operating Reactors, June 24, 1986

• • Public Service Estimate