ML20210M757

Forwards Response to Requesting Addl Info Re Status of Decommissioning Funding for Lgs,Pbaps & Sngs. Attachment Provides Restatement of Questions Followed by Response

ML20210M757
Person / Time
Site:	Peach Bottom, Salem, Limerick
Issue date:	08/04/1999
From:	Hutton J PECO ENERGY CO., (FORMERLY PHILADELPHIA ELECTRIC
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
NUDOCS 9908100169
Download: ML20210M757 (11)

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PECO NUCLEAR- ecco e"e'av comae"v 965 Chesterbrook Boulevard A Unit of PECO Energy wayne. PA 90er.sc91 August 4,1999 Docket Nos. 50-352 50-353 50-171 50-277 50-278 50-272 50-311 License Nos. NPF-39 NPF-85 DPR-12 DPR-44 DPR-56 DPR-70 DPR 75 U.S. Nuclear Regulatory Commission Attn: Document Control Desk Washington, DC 20555

Subject:

LimerirA Generating Station, Units 1 and 2 Peach Bottom Atomic Power Station, Units 1,2 and 3 Salem Generating Station, Units 1 and 2 Response to Request for Additional Information Regarding Status of Decommissioning Funding

Reference:

Letter from Bartholomew C. Buckley, USNRC, to Garrett D. Edwards, PECO Energy Company (PECO Energy) dated July 1,1999

Dear Sir / Madam:

The reference letter requested additional information regarding the status of decommissioning funding for Limerick Generating Station, Units 1 and 2, Peach Bottom Atomic Power Station, Units 1,2, end 3, and Salem Nuclear Generating Station, Units 1 and 2. Attachment 1 provides a restatement of the questions followed by our response. If you have any questions, please do not hesitate to contact us.

Very truly yours, mes A. Hutton, Jr.

irector- Licensing i Enclosure cc H. J. Miller, Administrator, Region I, USNRC ,oh A. L. Burritt, USNRC Senior Resident inspector, LGS A. C. McMurtray, USNRC Senior Resident inspector, PBAPS S. A. Morris, USNRC Senior Resident Inspector, SGS 9968500169 990804 PDR ADOCK 05000171 P PDR 1.

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i ATTACHMENTI Limerick Generating Station, Units 1 and 2 Peach Bottom Atomic Power Station, Units 1,2 and 3 i

Salem Generating Station, Units 1 and 2 Docket Nos. 50-352 4 1

50-353 50-171 50-277 50-278 50-272 50-311 License Nos. NPF-39 NPF-85 DPR-12 DPR-44 DPR-56 DPR-70 DPR-75 i

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Response to Request for Additional Information Limerick Generating Station, Units 1 and 2 Peach Bottom Atomic Power Station, Units 1,2 and 3 Salem Generating Station, Units 1 and 2

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j Decommissioning Funding i l

Question 1' As stipulated in 10 CFR 57.75 (e)(1)(ii), the regulations allow an annual Rate of Retum (interest samed) of 2 percent. Please explain why a 4 percent annual Rate of Retum was assumed in the Decommissioning Cost Estimate Calculations in your March 31,1999, submittal and confirm that this rate was approved by the State Public Utility Commission.

Response 1 in our recently settled restructuring case before the Pennsylvania Public Utility Commission (Pa PUC), the basis for the agreed upon decommissioning amount was an inflation factor of 3.5% and an eamings rate on our investments of 7.5%, assuming favorable tax treatment by the intamal Revenue Service The net of these two assumptions yield a real annual rate of retum of 4%.

Additionally, our actual experience for the last two years has been as follows:

1997 - Eamings Rate = 12.3% Inflation Rate = 2.1% Real Rate of Retum = 10.2% ,

1998 - Eamings Rate = 11.9% Inflation Rate = 2.3% Real Rate of Retum = 9.6% l l

Given the above information, we felt it was reasonable to assume a 4% Real Annual Rate of  ;

Retum.

t Question 2 Please explain the shortfall between the " Average Calculated Deposit Per Year" and the

" Current projected annual deposit"in pages 2 and 3 of Exhibit 2 of your submittal.

Response 2 Based on the 1998 funding allowances, combined with a 4% real rate of retum, both Limerick Generating Station, Unit 2, and Peach Bottom Atomic Power Station, Unit 1, show annual shortfalls. However, use of the current funding effective January 1,1999, results in all the units (with the exception of Peach Bottom Atomic Power Station, Unit 2) having a " Current '

Projected Annual Deposit"in excess of the " Average Calculated Deposit Per Year" on a recalculated basis. A revised Exhibit 2 is attached to highlight this information.

In the case of Peach Bottom Atomic Power Station, Unit 2, the shortfall is less than $42,000 per year. In this regard, the Pa PUC order approving the collection of decommissioning funds gives us the right to seek additional funds for decommissioning if assumptions used in

. establishing required decommissioning amounts change.

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EXHIBIT 2 Decommissioning Cost Estimate Calculations Schedule of Payments Limerick Generating Station, Units 1 and 2 Peach Bottom Atomic Power Station, Units 1,2, and 3 Salem Generating Station, Units 1 and 2

Limerick Generating Station, Unit 1 Revised 1999 Fundina NRC Minimum Amount 367,949,698 ,

Balance in Trust- December 31,1998 92,504,353 Remainder to be funded 275,445,345 Remaining years for collection of Decommissioning Costs 1999-2024 26 Average Calculated Deposit per Year 10,594,052 Current Sources of Funding:

Annual Funding 5,822,000 4,403,000 Effective annual retum of 6.8% on balance in Trust") 6,290,296 Current projected annual deposit 12,112,296 10,693,296 I

0) Based on a projected real Rate of Retum of 4% per year

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Limerick Generating Station, Unit 2 l

Revised 1999 Fundina NRC Minimum Amount 367,949,698 Balance in Trust - December 31,1998 54,819,839 Remainderto be funded 313,129,859 Remaining years for collection of -

Decommissioning Costs 1999-2029 31 AveraQe Calculated Deposit per Year 10,100,963 Current Sources of Funding:

Annual Funding 4,763,000 8,043,000 Effective annual retum of 7.7% on balance in TrustW 4,221,128 Current projected annual deposit 8,984,128 12,264.128 I

N Based on a projected real Rate of Retum of 4% per year I

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Peach Bottom Atomic Power Station, Unit 1 Revised 1999 Fundina NRC Minimum Amount 48,852,963 Balance in Trust - December 31,1998 11,392,599 Remainder to be funded 37,460,364 Remaining years for collection of Decommissioning Costs 1999-2013 15 Average Calculated Deposit per Year 2,497,358 Current Sources of Funding:

Annual Funding 740,000 2,992,000 Effective annual retum of 5.3% on balance in Trust (" 603,808 Current projected annual deposit 1,343,808 3,595,808 l (U Based on a projected real Rate of Retum of 4% per year i

Peach Bottom Atomic Power Station, Unit 2 Revised 1999 Fundina NRC Minimum Amount 156,341,827 2 Balance in Trust - December 31,1998 65,121,824 Remainder to be funded 91,220,003 Remaining years for collection of Decommissioning Costs 1999-2013 15 Average Calculated Deposit per Year 6,081,334 Current Sources of Funding:

Annual Funding 2,775,000 2,588,000 Effective annual retum of 5.3% on balance in Trust") 3,451,457 Current projected annual deposit 6,226,457 6,039,457

") Based on a projected Real Retum of 4% per year

• Reflects funds available to decommission Peach Bottom Unit 2 and 50% of Common Plant. PECO share of decommissioning costs - 42.49% ownership

Peach Bottom Atomic Power Station, Unit 3 Revised 1999 Fundina ,

1 NRC Minimum Amount 156,341,827 A i l

Balance in Trust - December 31,1998 65,345,228 l j Remainder to be funded 90,996,599 l

Remaining years for collection of l Decommissioning Costs 1999-2013 15  !

Average Calculated Deposit per Year 6,066,440 Current Sources of Funding:

Annual Funding 2,775,000 5,976,000 Effective annual retum of 5.3% on balance in Trust") 3,463,297 l

Current projected annual deposit 6,238,297 9,439,297 l

U) Based on a projected real Rate of Retum of 4% per year A Reflects funds available to decommission Peach Bottom Unit 3 and 50% of Common Piant. PECO

, share of decommissioning costs 42.49% ownership

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Salem Generating Station, Unit 1 Revised l 1999 Fundina l NRC Minimum Amount 124,040,287m Balance in Trust - December 31,1998 49,147,619 Remainder to be funded 74,892,668 Remaining years for collection of Decommissioning Costs 1999-2010 18 Average Calculated Deposit per Year 4,160,704 Current Sources of Funding:

Annual Funding 1,962,000 2,651,000 Effective annual retum of 5.7% on balance in TrustW 2,801,414 Current projected annual deposit 4,763,414 5,452,414 l N Based on a projected real Rate of Retum of 4% per year A Reflects funds available to decommission Salem Unit 1 and 50% of Common Plant.

PECO share of decommissioning costs - 42.59% ownership.

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Salem Generating Station, Unit 2 Revised 1999 Fundino NRC Minimum Amount 124,040,287*

Balance in Trust - December 31,1998 41,613,435 Remainder to be funded 82,426,852 Remaining years for collection of Decommissioning Costs 1999-2020 22 Average Calculated Deposit per Year 3,746,675 Current Sources of Funding:

Annual Funding 1,851,000 2,509.000 Effective annual retum of 6.2% on balance in Trust") 2,580,033 Current projected annual deposit 4,431,033 5,089,033 "I

Based on a projected Real Retum of 4% per year

• Reflects funds available to decommission Salem Unit 1 and 50% of Common Plant.

PECO share of decommissioning costs - 42.59% ownership.

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