ML20210Q930

Forwards Final Statement of Policy Re Restructuring & Economic Deregulation of Electric Util Industry.Nrc Has Concerns About Possible Effects That Rate Deregulation & Disaggregation Resulting from Various Restructuring Actions

ML20210Q930
Person / Time
Issue date:	08/20/1997
From:	Bangart R NRC OFFICE OF STATE PROGRAMS (OSP)
To:	GENERAL
References
SP-97-060, SP-97-60, NUDOCS 9709020212
Download: ML20210Q930 (19)

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{{#Wiki_filter:.. [806,10 W STATE LIAISON OFFICERS STATE PUBLIC UTILITY COMMISSIONS FINAL POLICY STATEMENT ON THE RESTRUCTURING AND ECONOMIC DEREGULATION OF 1HE ELECTRIC UTILITY INDUSTRY (SP-97-060 ) The U.S. Nuclear Regulatory Commission (NRC) is issuing this final statement of policy regarding its expectations for, and intended approach to, its power reactor licensees as the electric utility industry moves from an environment of rate regulation toward greater competition. The NRC has concerns about possible effects that rate deregulation and disaggregation resulting from various restructuring actions involving power reactor licensees could have on the protection of public health and safety. Enclosed for your information is a copy of the Commission's policy statement which becomes effective on October 20,1997. W W RICHARDL ANGAN Richard L. Bangart, Director Office of State Programs

Enclosure:

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WASHINGTON, D.C. 2056fHm01 %,,,9 August 20, 1997 STATE LIAISON OFFICERS STATE PUBLIC UTILITY COMMISSIONS FINAL POLICY STATEMENT ON THE RESTRUCTURING AND ECONOMIC DEREGULATION OF THE ELECTRIC UTILITY INDUSTRY (SP 97-060) The U.S. Nuclear Regulatory Commission (NRC) is issuing this final statement of policy regarding its expectations for, and intended approach to, its power reactor licensees as the electric utility industry moves from an environment of rate regulation toward greater competition. The NRC has concerns about possible effects that rate deregulation and disaggregation resulting from various restructuring actions involving power reactor licensees could have on the protection of public health and safety. Enclosed for your information is a copy of the Commission's policy statement which becomes effective on October 20,'6997. ict a / L Evenyak i t Richard L. Bangart, Director Office of State Programs

Enclosure:

As stated s 4 + b

Fed:ral Regist:r / Vol. 62. No.100 / Tutsday, August 19, 1997 / Ruhs and Regulations 44071 (i) Collect 1 chick box paper for each restructuring of the electric utility reasons for the NRC's concerns. Some to boxes of chicks placed in a house industry and the means by which NRC directly supported the NRC's overall and place the chick papers immediately intends to address those concerns. approach, particularly the five actions into large plastic bags and seal the bags. Because of the interest expressed by listed in Section Ill. Commenter 14, for (ii) Place the plastic bags containing several commenters, the NRC extended example, stated that these five actions the chick box papers 1n a clean box and the public comment period to Tebruary r.hould provide sufficient focus for NRC transport them within 48 hours to a 9,1997, e actions. Commenter 5 believes that the laboratory.The plastic bags do not require refrigeration.

11. Summary of and Response to NRC's current authority is sufficient to D'"*'"l" cope with any safety issues raised by

'd rate deregulation. Commenter 31 shares Buys uberOSY The NRC received 32 ublic the NRC's concerns but indicated that d tro 7) comments on the draft licy statement: the draft he key issue, namely, whether olicy statement did not Don n 'ashington, DC, this 13th day of 14 from electric utility icensees or their address t 8" T'"7 bl'7' 1 representatives,8 from State public economic deregulation of nuclear power utility commissions (PUCs) or other is compatible with the protection of Admhustrator, Animaland Plant Heohh State agencies,5 from public interest public health and safety. I" W " (FR Doc. 97-21902 Filed 8-18-97; 8 45 am) groups,4 from private consultants and Other comments, particularly froIn individuals, t.nd 1 from a labor union.. electric utility licensees and their

• • • 8C"'*"*-**

The following list provides the names representatives, suggested that some and comment numbers referenced in. NRC concerns are overstated. For this notice: example Commenter 4 recommended NUCLEAR REGULATORY COMMISSION

1. Nuclear Information and Resource elimination of language in the policy Service-comment extension rl;uest statement that implies that deregulation 10 CFR Part 60 only is inevitable. Other commenters

2. Public Service Commission of Wisconsin suggested that the policy statement Final Policy Statement on the

3. Enginnring Applied Sciences,Inc.

should recognize that change will occur

4. TU Electric Restructuring and Economic at different rates and, therefore, the NRC

s. Public Service Electric & Cas Cornpany should individually evaluate Deregulation of the Electric Utility

6. Minnesota Department of Public Service restructuring as it affects each nuclear Industry 7.Spt el a McDiarmid on behalf of 5 plant, in any case, restructuring will not ises.IN, Citizens Action. occur so rapidly or secretly that the NRC AGENCY: Nuclear Regulatory

8. IPAl Commission.

Coalition of$ndiana, Inc., and Public will not know about it. Others stated A0TtON: Final Policy Statement. Citizen. Inc. that many services will remain

9. Wisconsin Emergency Management, regulated and that the PUCs will act

SUMMARY

The U.S. Nuclear Regulatory Bureau of Technological Hazards respc nsibly. Further, there is no basis Commission (NRC) is issuing this final

10. Illinois Department of Nuclear Safety for the NRC to conclude that licensees statement of policy regarding its

11. International Brotherhood of Electrical will be unable to provide adequate expectations for, and intended approach W 'k'r8 financial assurance for safe operations to,its power reactor licensees as the

12. Consolidated Edison Coropany of New and decommissioning. The National electric utility industry moves from an 11 dn't 't or ' ner3 Association of Regulatory Utility E

environment of rate regulation toward

14. GPU Nuclear Commissioners (NARUC) stated that in greater competition. The NRC has 15 Commonwealth Edison Company view of the experimental nature of many concems about the possible effects that

16. Vermont Department of Public Service State actions, the NRC should approach rate deregulation and disaggregation

17. Marilyn Elle.

deregulation cautiously. Finally, several resulting from various restructuring

18. GE Stockholders' Alliance for a commenters asked the NRC to avoirl actions involving power reactor Sustainable Nuclear. Free Future actions that would serve as licensees could have on the protection

19. W men Speak Out for Peace and lustice impediments to deregulation, of public health and safety,

20. New England Power Com any Commenters representing public If ation and esource,

EFFECTIVE DATE:Th's policy statement Servi interest gro ps generally thought that becomes effective on October 20,1997,

22. New Jersey Division of the Ratepayer fo'ou8.n ad IressinE safetI oncerns FOR FURTHER INFORMATION CONTACTt

Advocate Robert S. Wood Office of Nuclear

23. Southem California Edison Company related to deregulation. These Reactor Regulation, U.S. Nuclear

24. Entergy Operations. Inc.

commenters stated that the NRC should Regulatory Commission Washington,

25. Nuclear Energy institute take immediate action with respect to DC 20555-0001, telephone (301) 415-

26. Arizona Public Service Company on line maintenance fowntime during ractices, extended 1255, e-mail RSW t@nrc. gov.

27. M ssachusetts Office of the Attorney refueling cycles and c General.

refueling, and up front funding of SUPPLEMENTARY INFORMAT'ON:

28. Winston and Strawn on behalf of the decommissioning. among other issues.

Utili Decommissioning Group I. Background

29. Dave rawford and Diane Peterson Some suggested that the policy statement specifically include On September 23,1996, the NRC 30.N l'

I P' ' ' discussion of possible negative safety Asso at a Issued a draft policy s'atement for public comment (61 FR 49711). The

31. Schlissel Technical Consulting. Inc.

risks from economic deregulation, such. purpose of the draft policy statement

32. National Association of Regulatory Utility as cutting corners and deferring capital Commissioners investments. These commenters also was to provide a discussion of the urged the NRC to expand its inspection NRC's concems regarding the potential Generol Comments and compliance resources to counter the safety impacts on NRC power reactor Most commenters viewed the adverse safety impacts that these licensees which could result from the issuance of the draft policy statement as commenters believe will result from eccnomic deregulation and timely and appeared to understand the deregulation.

l

44072 Fadir:1 Register /_Vol. 62 No.160 / Tuesday, August 19, 1997 / Rules and Regulations NRC's Response to Cennal Comments stated that the emphasis and focus on potentialimpact of economic l Regarding the issue of whether the merSenCY P anning ma lessen, deregulation on specific safety programs Policy statement should address the Commenter to suggeste that the NRC's and practices. As discussed in the compatibility etween econom;c shift to performance based and risk. NRC s response to general comments, informed regulations may potentially the N'RC will coatinue to evaluate Prot n $1 h a h and afe y R threaten established safety rdargins. specific safety cancerns or to CFR 50.59 blieves that economic deregulation This commenter u ed the NRC to review rocesses as art of its safety does not preclude adequate rotection establish current,y gorous robabilistic oversig t progrems or example, on-risk assessments (PRAs) to dentify the line maintenance and increased fuel of public heslth and safety, owever' risks, which would be used in all burnu are being considered Girough due to the increased uncertainty engendered by state by state appropriate areas of plant operation as the N1 C's safety review and inspection a cornerstone to maintaining cost. oversight programs. Reductions in de egulati a of the ele powe effective safety margins in a changing manpower and training costs, and other l'Y ut anvironment, reductions in operation and the possible impact on the protection of Many commenters did not view maintenance (O&M) and capital public health and safety. Thus,in the deregulation as necessarily a additions budgets are of continuing draft policy statement, the NRC expressed itsgeneral concerns about the disincentive to safe operation.They concern to the NRC. The NRC is cited the incentive to operate safely and considering changes to the Senior possible effects of deregulation, use preventive maintenance due to the Manroement Meeting process that realizing that such concerns can be premium placed on unit availability. wouldinclude consideration of either vitiated or exacerbated depending Another commenter expressed the belief economic tren Is. However, because the on specific deregulation approaches that that near term economic incentives exist safety concerns that commenters are implemented. In this respect, the for expenditures to maintain reliable expressed exist,in many cases, NRC recognizes that deregulation will operation. However, this incentive independently of economic occur at different times,in different decreases as a plant ages and thus is of deregulation, the NRC believes that degrees, and in some lunsdictions. greater concern later in a plant's life. - these issues have been and are more perhaps not at all, and the final policy Commenter 23 suggested that the policy appropriately considered in other NRC statement more explicitly recognizes statement be modified to support a progrnms. Also independently of these facts. With respect to the concerns licensee's use of the 10 CFR 50.59 economic deregulation, the NRC is expressed by public interest groups review process to determine that striving to make its regulatory program about the impact of certain potential establishment of an Independent System as efficient and effective as possible-safety practices, such as on line Operator (ISO) does not involve an through use of risk analysis and other maintenana and outage duration, the unreviewed safety question. techniques-to that the resources of the NRC has addressed, and will continue Other commenters indicated that agency and of licensees are devoted to 13 address, these issues as safety issues-disincentives to safe operation should the most safety-significant matters. This policy statement is not meant to be be dealt with by limiting reactor The NRC has extensively reviewed a substitute for regulatory remedies to operating cycles to 18 months and State performance incentive programs specific safety problems. requiring at least 250 hours for refueling and does not beheve significant Sufficiency of Current Regulatory outages. These commenters also additional review is warranted at this Finmework andlncentives for Safe CPgsed on-line maintenance. time. (See footnote 2 in the Policy 0 #"6#" ther commenter expressed Statement below.) F concern that deregulation would be a Although most commenters indicated disincentive to continuing cooperation FinancialQualificotions that the NRC's current regulatory among nuclear tranerators, such as early Commenters expressed varied framework is adequate to protect public reporting of safety and operationally opinions. Although some viewed the health and safety, others disagreed. significant events and continuation of NRC's current financial qualifications Commenter 21. for example, cited the the Institute of Nuclear Power regulatory fremework as sufficient, experience with the Millstone facility Operations (INPO). Additionally,the others believed that additional measures and indicated that it is "of increasing pressure on the NRC to rede costs to may be necessary Commenter 20 concern that NRC cannot accurately licensees willincrease, as will ressure indicatnd that the critical question for determine the extent and scope that to reduce use of the "w tch list " This the NRC is whether. in the absence of economics plays in the reductions of commenter cited the an 'legy of Ae independent financial assurances to the reactor safety margins and the deferral resultant events at the 7 detal N.. tion NRC from its limnases, rate regulators of safety significant issues." This Administration (FAA) w sen tb> airlines have committed to provide licensees commenter concluded that the policy were deregulated and uiged se NRC to with sufficient financial resources. statement has not adequately addressed avoid the FAA's mistakes. this Commenter 2 stated that if recovery of safety hazards brought about by commenter also suggested ? hat incentive stranded costs is not allowed or is ' managerial malpractice in response to regulation of nuclear plants uay become severely restricted, a large number of economic pressures. Other commenters an alternative to full deregulation and Premature shutdowns may occur, stated that the NRC must contmus to that the NRC should study incentive further straining licensees' financial ensure that its own inspection and programs used at Diablo Canyon and qualifications and diminishing their cvers1 ht programs identify when a Pilgrim. ability to decommission safely. In this 8 licensee is falling to devote sufficient vein, Cornmenter 15 urged that the NRC resources to ensuring safe operations, Es Response to Comments on aggressivaly affirm that stranded capital specifically as a result of deficiericles Sufficiency of Curnnt Regulatory costs muut be recovered by utilities. resulting from economic pressure. When I'umcwort oud incentivesfor Safe Commenter 16 Indicated that those necessary, the NRC should seek Opemdon nuclear plant licensees that are no additional inspection and compliance The NRC shares many of the concerns longer rate regulated should have resources from Congress. Commenter 9 expressed by commenters about the sufficient buffering funds to proceed l l

Fed;ral Regist;r / Vol. 62, No.160 / Tuesday, August 19, 1997 / Rules and Regulations 44073 safely from cperations to obligations in its d: liberations on does not believe that S:ction 184 of tha decommissioning. Commenter 8 stated financial qualifications. Atomic Energy Act of1954, as amended, that the NRC should shut down the lants of licensees with questionable NRC's Respense to Comments on allows the NRC to approve transfers by bnancial ability to sustain safe yjnonelg @ggc tions nehative consent. T e NRC will continue to use its operations in a competitive The NRC remains concemed about current method of evaluating a environment and should require them to the impacts of deregulation on its power licensee's cash flow under to CFR decommission their facilities. Operating reactor licensees' financial 140.21 to deterrnine a licensee's ability costs that cannot be recovered qualifications. The NRC's existing to pay deferred premiums under the competitively should be bome by the regulatory frarnework under 10 CFR Price-Anderson Act. licensee, not the ratepayer or the 50.33(0 requires financial qualifications taxpayer. Cornmenter 22 believes that reviews for those licensees that no. Decommissioning Tunding Assuronce the NRC should institute ongoing longer meet the de6nition of" electric The consensus appeared to be that the financial qualifications reviews every 2 utility" at the ating license (OL) NRC should work closely with State to 5 years for all power reactor stage. Paragra 4 of 10 CFR 50.33(0 regulators to provide for assurance of licensees, including those that still meet also provides at the NRC may seek decommissioning funding. Commenter the NRC's definition of" electric add 2tional or more detailed information 13 recommended that the policy utility." Commenter 31 recommends respecting an applicant's or a licensee's statement include a call for the that the NRC cntnine whether mergers financial arrangements and status of continued recovery of decommissioning and joint operating agreements would funds if the Commission considers this costs through regulated rates and tariffs dilute or weaken units and utilities that information appropriate. The NRC will in alllurisdictions. Similarly, are performing well by spreadin8 or evaluate additional rulemaking, separate Commenter 16 suggested that the NRC diverting existing management from the proposed rulemaking on maintain awareness of State attention, personnel, and other financial assurance requirements for decommissioning proceedings, monitor resources over a larger number of units, decommissioning, to determine whether funding adequacy based on the Other commenters appeared quite enhancements to its financial estimates produced in State optimistic that additional financial qualificatinns requirements are proceedings, and work with the host qualifications reviews would be necessary in anticipadon that some State to ensure that adequate amounts unnecessary. Commenter 15 auggested power reactor licensees will no longer are provided in decommissioning trust that the NRC should avoid conflicts . be " electric utilities." However, the funds. Another commenter stated that with other agencies having jurisdiction NRC continues to believe that its additional decommissioning funding over financial qualifications and should primary tool for evaluating and ensuring assurance should be te utred on an ad not condition license transfers. safe operations at its licensed facihties hoc basis and that the RC should not . Commenter 25 and others indicated that is through its inspection and = require accelerated decommissioning holding companies should not be enforcement programs. In its previous funding. subject to 10 CFR 50.80 license transfer - experience, the NRC has found that Many State and licensee commenters reviews. At most, the NRC should use there is only an indirect relationship asked the NRC to accept non bypassable a " negative consent" approach to between financial qualifications and charges or other mechanisms, such as formation of holding companies. This operational safety, but it is continuing 1o dedicated tevenue streams, as proof of commenter also recommended that the study this issue. Although enhanced decommissioning funding assurance. NRC provide more explicit guidance on financial qualifications reviews may Similarly, those licensees whose States the "no significant hazards" criteria that Provide the NRC with valuable require such mechanisms should be are used with license amendments. additionalinsights on a licensee's considered " electric utilities" under the Commenter 23 asked that the NRC general qualifications to operate.its NRC's regulations. Many commenters adopt clear criteria for approval of facilities safely,it is not clear that also suggested that the NRC take a more license transfer requests and use clear. - enhanced financial quali5 cations proactive role with the Congress, the unambiguous standards for license programs by themselves would prove to - Executive Branch, and others in order to transfers to nnn utility licensees such as be a sufficient indicator of general increase assurance of decommissioning those offered in the Draft Standard ability to operate a facihty safely, funds. Review Plan (SRP) on Financial With nspect to the issue of Most public interest group Qualifications and Decommissioning decommissioning and stranded costs, commenters advocated that the NRC Funding Assurance (61 FR 68309, many states are considering end " fund-as you-go" decommissioning December 27.1996). The regulations in securitization as a non bypassable by requiring full, up front 10 CFR 50.33(f) for non utility licensees charge mechanism to fund the recovery decommissioning for unfunded should be modified and should include of decommissioning, and other stranded balances. These commenters also asked standards for extended, unplanned costs. The NRC believes that that any stranded cost recm ery be outages, such as minimum amounts for 2ecuritization has the potential to applied to external decommissioning retained earnings, insurance, and ' provide an acceptable method of trusts and that investors bear the greater contractual arrangements, decommissionin Commenter 22 suggested that although otherm/unding assurance,share in funding any decommissioning echanisms that involve shortfall. Other comments sought the "securitization" may be an non bypassable charges may provide elimination ofinternal advantageous method of reducing comparable levels of assurance and decommissioning funding and asked stranded cost charges to customers. should not be excluded from that decommissioning be funded at a Consequently, the NRC should endorse consideration by State authorities, level that would permit a third party to securitization as permissible from a With respect to transfers of a license complete decommissioning regulatory, legal, and public policy under 10 CFR 50.80, the NRC must Other specific comments in the perspective. review and approve in writing all such decommissioning area included (1) a Finally, two commenters urged the transfers,if such transfers meet the recommendation that the NRC add an NRC to factor in Price Anderson appropriate NRC standards. The NRC explicit statement to the policy

44074 f eo:ral Register / Vol 62 No.160 / Tu:sday, August to, :*t97 / Rules and ' Regulations l y statement that would inform licensen should take a more proactive role and alt:r, and likely i:opardite, the businen of the NRC's rigM o assess the tirning that the NRC can play a special role in arrangements tr at underpin co-and liquidity of oecommissioning funds educating r4 e rsgulators. Commenter 22 ownership. Several of those who (Commenter 3);(2) a recommendation proposed that the NRC maintain a comrnented on this issue also pointed to tot an increase in decommissioning diafogue with all classes of ratepayers, the tmnkruptcy laws as one way of tsporting requirements and assurance perhaps through the National ensuring that co owners pay their pm thet funds are not diverted to non-Assocletion of State Utility Consun et rata share, although Commenter 22 decomm'ssioning uses; (3) recognition Advocates. Other suggested venues for suggested that recent NRC experience that if charEes are placed on cunent NRC State regulatory interface included with banktJpt licensus iney not hold electricity customers while competition the NationalGovernors Association,the true in the future. No one directly tecnson, consumers will avoid nuclear National Conference of State commented on the issue of non owner p:wer end will, thmfon, avoid Isegislatures, the American 14gislative operators, although 3 comments conhibuting to dowmmisstorir.3 Exchange, and similar groups addressed this lasuo peripherally, fundug; and (4) recognition that (Commenter 25 Commenter 15 decommissioning is not a stranded cost,- suggested that e NRC and NARUC NRC's Response to Comments on folnf tocause stranded costs are known and convene a joint conference on stranded g.nershiP rnessurable costs that have alread" been capital cost recovery, As pnviously The NRC recognises that co owners incurred, wheins decommissioning mentioned, uveral commenters and co licensee generally divide costs to be incurred. y known and have yetirdicated that the NRC should act to and output from ths!r lacllities by using c.osts are not full educate Congrua and mek legislation in a contactually defined, pro reta share NHC,s Response to Comments on areas relevant to plant safety and standard.The NRC has implicitly becommissioning funding Assumnce restructuring. for erample, e national accepted this practice in the put and exclu~ tax to fund decommlesioning. bellevos that it should continue to be Many of these comments parallel Finally, Commenter 22 suggested that the operative practice, but reserves the comments received on the Advance the NRC review the States' plans for cost right,in highly unusual situation 6 Notice of Proposed Rulemaking (ANpR) recovery to ensure that, once recovered where adequate protection of public (61 FR 16427 April 4.1996) that sought through ratu, these revenues are health and safety would be comment on rest rirg lasues as they employed for the purpose for which compromised if such action were not may relate to dec uloning funding they were ccllected, two, to consider imposing joint and assurance. The Ni developing a seves.1 hbility on co-owners of more propoud rule that siders rnost of E's Response to Comments on than de s.ilnlmis shans when one or these comments. Wiw respnt to the Regulatorytnterface more co owners have defaulted. The speellic comment that the polley The NRC believes that the policy NRC is addressing the issue of non-statement should indicate that NRC statement adequately cove Sd the NRC's owner operators separately, retains the right to assess the timing and intent to work closely with rate liquidity of decommissioning funds, the regulators and others as deregulation Antitrust NRC ogrees and will add such a proceeds. The NRC will consider Most commenters viewed NRC statement. Because of the long history of expanding contacts to include the other antitrust reviews es redundant to those tflective rate regulatory overright and groups identified. Although the NRC ps, formed by other agencies, especially recovery of ufety.related expenses will testify before Congress when asked in view of FERC Order 888, and through rates,in the 1988 to speak on its views on deregulation as recommended that the NRC act to decommissioning rule ($3 FR 24018, related to protecting public health and eliminate this redundancy. Commenter June 27.1988), the NRC deferred to the sa fety, the NRC is evaluating whether it 22 suggestad that the NRC develop a PUCs and the Federal Energy Regulatory should mak e specific recommendations memorandum of understanding with Commission (FERC) on the timing and on mechanisms to handle FERC and the Securities and Exchange liquidity of decommissioning trust fund decommissioning costs and operational Commission (SEC) that would allow the deposits. However, the NRC has the costs. The NRC recognizes that Federal NRC to rely on the judgments of these authority 1o assess the timing and legislattu might be of benefit in agencies about market power that do not liquidity of such deposits by its resolving these issues. However, the raise issues unique to the NRC's licensees, and Intends to exercise this NRC also recognizes the vital role that mandate. Anothercommenter authority with thou licanues who lou States have played and will continue to recommended working with the rate regulatory oversight. Sitallarly,10 play in resolving these issues and is Department of Justice to develop a bst CFR 60.82 specifies a schedule for fully prepared to work with the States of guidelines and critaria to evaluate decomndssioning trust fund through eithes State or federally requests for ownership changes, withdrawals and the NRC will thus sponsored initiatives. co 1 e to suas the timing of such gg.s Response to Comments on ' Joint Ownership Antitrust Virtually all who commented in thl The NRC is statutorily required under Regua. torylnterface area believe that the NRC should not the Atomic Energy Act of1954,as Most comrnenters support NRC's impose joint and severalliability on co-amended (AEA),in connection with an working clowly with State and Federal owners of nuclear plants. Rather, each application for a license to construct or rate regulators, ahhough some public co-owner abould be limited to its pro operate a facility under section 103, to interest groups stated that such an effort rata share of operating and evaluate an applicant's or a licensee's would offer scant protection to the decommissioning expenses. The NRC activities under the NRC license to public (Commenter 17). Many thought should not look to one owner to " ball determine that thew activities do not that the focus of this cooperation should out" another owner. Corsmenter 28 create or maintain a situation be on the sesvrance of recovery of suggested that any effort to alter the inconsistent with the antitrust laws of decommissioning costs. Some current legal and financial relationship the United States. However, the NRC commenters believe that the NRC among co owners would retroactively has begun to work with FERC, SEC, and J

Feder:I Rsist:r / Vol. 62, No.100 / Tuesday, August 19, 1997 / Ruls:'and Regulations 44075 the Departrnent eljustico to develop Disa2regation may involve utility require its other licennes (with the snethods by which the NRC c:n resuucturing, mergers, and corporate added exception of State and Federal minimise duplication of effort on spinoffs that lead to changes in owners government licensees of certeln antitrust issues, while carrying out its or operators of licensed power tsactors facilities) to provide funding usurance statutory responsibilities. The NRC will and may cause some licensees, for the full estimated cost of also consider seeking lepsletion to including owners, to ceste being an decommissioning, either through full eliminate its review to tne extent that its " electric utility" as defined in to CFR up front funding or by some allowable review duplicates the efforts of other 50.2.8 Such changes may affect the guarantee or surety mechanism. federal egencies, licensin basis under which the NRC A discussion of the NRC review g Otherissues original found a licenm to be procen is contained in two draft financia y qualified, either as an m adard Review Plans (SRPs) that the Sevent commenters made " electric utility" or otherwise, to NtC issued for comment: NUREG-1677, observations not directly addressed in construct, operate, or own its power " Stat.dstd Review Plan on Power the draft policy statement. Commenter 8 plant, as well as to accumulate edeouste Reactor 1.loenm Financial stated that nuclear plant operators in the funds to ensure decommissioning al the Qualificadons and Decommissioning Northeast United States are subsidirJng end of twetor life. (See dlacussion Funding As.1.rance"(January 1997); dirtier coal generation from Westere below.) and NUREG-1574," Standard Review U.S. generators. Accordingly, the NRC Rate regulators heve typically allt,wed Plan on Antitrust"(January 1997). In snould articulate its views on the need an electric utility to. recover prudently addition, the NRC issued an for nuclear power and its value for fuel incurred costs of generating, Adrsinistrative latter on June 21,1996, divmity and environmental protection., transrNtting. and distributing electric that informed power reactor licenms of Commenter 16 recommended that the servics,. Conseguently, in 1984, the their ongoing responsibility to inform NRC urge the Departenent of Energy to NRC eliminated financial qualifications and obtain edvance opproval from the proceed with interim spent fuel storage nviews et the OL stage for thow NRC for any changes that would to reduce uncertainty and costs facing licenms that met the definitiond. constitute a transfer of the license, nucient plant operatora.

• electric utility"in to CFR 50.2 (49 FR directly or indirectly, through transfer of NHC"s Response to Comments on Other 35747, September 12,1984). The NRC control of the NRC license to any person issues based this decision on tia assumption pursuant to 10 CFR 60 80. This that "the rete process assures that funds administrative letter also reminded

'Ihe NRC does not have a role in advocating the positions stated in the e. needed for esfe operation will be made Mdrostees of their responsibility to evallable to Ngulated electric utillues" ensure that information regarding a comments. (49 FR 35747, et 36750). However, the licanm's financial qualifications and Policy Statement NRC recognl ed that financial decommissioning funding assurance quellfications teviews for OL spplicants that may have e significant implication

1. Sosis might be appropriate in particular cases 'orpublic heahh and ufety is promptly a

This policy statement recognises the ' in which, for nample,"the local public reported to the NRC. c.hanges that are occurring in the electric utility commission will not allow the utility industry and the importance total cost of operating the facility to be gg gpe@,pgcjes these changes may heve for the NRC and recovered through rates"(49 FR 35747 The NRCis concerned about the its licensees. The NRC's principal at 35751). The Commission also has Potential impact of utility restructuring mission is to mgulate the netton's upressed concern about various State on public hulth and safety. The NRC civillen use of byproduct, source, and proposals toimplernent economic has not found a consistut relationship special nuclear materials to ensure performance incentive programs.s Imween a lloonm's financial health adequate protection of public hulth and in its 1988 decommissioning rule,the aini general indicators of. safety such as safety, to promote the common defense NRC ogain distinguished between the NRC's Systematic Assessment of and security, and to protect the electric utilities and other licensees by License: Performance. The NRC has environmtnt. As part of carrying out allowing "alectric utilities" to treditianally rolled on its inspection this mission, the NRC must monitor accumulate funds for decommissioning process to indicate when safety licensee activities and soy changu in over the remaining terms of their Performance has begun to show adverse licensee activities, as well es external operating licenses. NRC regulations trends. On the basis ofinspection factors that may affect the ability of program ruults, the NRC can take individual licensees to safely operate i sation so.: dertnes *en.ctric vittny u *en, oppropriate action, including, ""gth*' s* ***' "' dbu doctricg' and ultimately, and decommission licensed power public healglant shutdown, to protectand safety.H production facilities. N. coy",[.'4 M*M*,'j'l,$fb.d by lP ant is ermanently shut down, that 'h' "" F "W "' by a u &.BocAgr und au thwir'y. "ta vuiar.wuSmin.s ui.iUing plant's I consee(s) may no longer have ituu. tac The electric utility industry is sea *rotion and distribunen subsid,ariu puhus access to adequate revenues or other

• • 'IF d"' '***P'I" '.g1 electric entering a period of economic ur sources of funds for decommissioning

'Yi$','r",d c(" the facility. If rete deregulation and

• lc'Ci7 dmgulation and restrticturing that 1:

n t intended to lead toincrused includ. within the en ning or w.etric uuttry,"- orgartizational divestiture occur competition in the ind ustry, increasing e see routbie seiny impets er sconomic concurrently with the shutdown of a campetition may force integrated power Pertermance ancanovu: ran i Potier si.e.nant. Is* nuclear plant either by NRC action or by I' ,,d"*,'.[.g*181"$"b',,N"gC.ando ng p,,,r m.. Mac understands that lic systems to separate (or "disaggregate") ' y*, a licenwe's economic decision, that their systems into functional areas. Thus, some licennes may divut stain tuututed many of th. prosraras as e mune adequate assurance af decommissioning electrical generation asats from of accurasins doctric utitina to lown *lutric funds. Thus, the NRC believes that its transmission and distribution assets by "'I'n'lj,"g,"3,jnjl.lg "'("$','d',cyg concems about deregulation and 8 d forming separate subsidiaries or even p.rtormac, incenove pectrams untruicy may b, restructuring lie in the areas of separate companies for generation. reptead by futiinarket camp.unon. edequacy of decommissioning funds

44070 federal Register / Vol. 62. No.160 / Tuesday, August 19, 1997 / Rules and Regulations and the potential effect that ec:nirnic In c:nsideradon of then c:nc:rns. D. NRC Resp:nsibiliti;s Vis a Vis Stat deregulation may have on operational the NRC will evaluate deregulation and and FederalEconomic Regulators j

safety, restructuring activides as they evolve.

The NRC has recognitted the primar l As the electric utility industry snoves Recognialng that the electric utility role that State and Federal economn. y It:m an environrnent of substantial industry is likely to undergo great ec:nomic regulation to one of increand c.hange, as restructuring progresses, the regulators have served, and in many cases will continue to serve,in setting compeution, the NRC is concerned NRC will continue to evaluate the need rates that include appropriate levels of about the pace of restructuring and rate for regulatory or policy changes to meet funding for Safe operation and deregulation Approvalof organlaational the effects of deregulation.'Ibo NRC 6 commissioning. For exsmpledhe and nie dereguladon changes may will take all oppropriate aedons to carry preamble to the 1988 decommissioning occus rapidly, The pace and degree of out its mist:en to protect the health and rule contained the following statement: such changes could affect the factual safety of the public and, to the extent of "The rule, and the NRC's underpinnings of the NRC's previous its statutory mandate,to ensure - implementation of it, does not dul with - conclusions that power reactor licensees constatency with Federal antitrust laws. financial ratemaking issues such as rate have access to adequate funds for of fund collection, procedures for fund cperations and can reliably accumulete N NRCintends toimplernent adequate funds for decommissionin8 cies and take action as descrited in c llecuan, cost to retepayers, taution over the operatinglives of their is policy statement to ensure that its effects, equitability between early and les ratepayers, accountinbprocedures, facilities. For example, rete deregttletion power reactorlicensees remain n m ms e ckhol could cresta situations in which a . financially qualified to ensure const eretions, resfmilar concerna onsiveness to licenses that previously met the NRC's continued safe operations and t,.hanle and other s def nition of an " electric utility" under decommissioning. In summary, the NRC 10 CFR 60.2 may, at some point, no will- . These matters are outside NRC's lurisdiction and are the rnponalbility of 1:nger qualify for such status. At that e Conunue to conduct its financial the State PUCa and (the Federal Energy point, the NRC will require bcensees to qualificadons, decommissioning Regulatory Commission) PERC"(63 FR submit proof pursuant to 10 CFR funding and antitrust nylows se . 24010. June 27,1988, at 24038). 60.33(f)(4) that they remain financially dueribed in the SRPs developed in Notwithstanding the primary role of quahfied and will requite them to meet concert with this policy statement; economic regulators in rate matters, the the more stringent decommissioning

• Identil all owners indirect as wall NRC has suu otity under the AEA to funding assurance requirements of 10 as dinct, ofnuclear power plants; take actions that may affect a licensee's CFR 60.76 that are applicable to non' finant:al situation when these actions electric utilities.
• Establish and maintaid working Although new and unique reladonthlps with State and Tednal rate an warranted to protect pubhc hulth restructuring proposals wH1 necessarily regulators;and and safety.To date,the NRC has found

. no significant instances in which Stato invaive case by-case teviewe by the e Reevaluate its regulations for their or Federal rate regulation has led to NRC, the NRC staff will advise the adequacy to address changes tesulting disallowance of funds for safety related Commission of such proposals so that from rate deregulation. operadonal and decommissioning the Coromission will have the option of expenses. Some rate regulators may exercising direct oversight of such A. Adequacy of Current Regulatory have chosen to reduce allowable profit reviews to maintain consistent NRC Framework policy toward new endtles. As patterns margins through nie disallowances, or w T' & NRC believes that its regulato licensees have for other reasons cf restructurin begin to eme e, the framework is generally sufficient, at bis encountered financial difficulty, NRC will cons der standardia ng its framework further to streamune, where time, to addnss the restructurings and in ordet for the NRC to make its safety possible,its case-b. case review rear 5anisations that will hkely arise as views known and to encourage rate Absent changes to the RC,regu1adom refulators to continue their practice of protos.The NRC as considend,and a nsu1t of e1ectric utiht de scheme, the NRC s review process wil[ al owing adequate expenditures s regulator will continue to consider rnergers and. nuclear plant safety as electric utilities the outright sales of factlities, or portions of facilldes, to require NRC follow the current framework. The NRC face deregulation, the NRC has taken a noufication and prior approvalin behnes that its financial quahtications number of actions toincrease accordance with to CFR 50.80 in order requirements are sufficiently 1, road as to coopersuon with State and Federal rate la ensure that the transferee or licensee provide an adequate framework to and financial regulators to promote distofe, regulation or other actions thate and minimize is appropriately quahfied for example, adequately review new or uni ue rate in certain merger situations, the NRC situations that are not explici covered determines whether the surviving in 10 CFR 50.33(0 and append x C to would have an adverse effect on safety. The NRC intends to continue to work art 50. for financial qualifications, and organization will remain'an " electric utility" as defined tri 10 CFR 50.2. If a pn 10 CFR 50.75 for decommissioning and consult with the State PUCs, license applicant or a licensee falls to funding assurance. However,in order to individually or through NARUC, and meet this definition, the NRC will seek remove any ambiguitiesinits with FERC and other Federal agencies to additional assurance of financial regulations sad to address those coordinate activities and exchange information. However, the Commission qualifications to operate and situations that may not be adequately also reserves the flexibility to take decommission the facility pursuant to covered under current regulations, the - appropriate steps in order to assure a 10 CFR 50.33(0 and 50.75 and as NRC is considering rulemaking to revise licensee's adequate accumulation of discussed in more detallin its SRP on its decommissioning funding assurance decommissionir.g funds, these subjects, The~NRC has also - requirements, as described in Section advised licensees that the formation of Ill.t. The NRC is evaluating whether C. Co-Owner Division of Responsibihty holding companies requires notification rnodification toits financial Many of the NRC's powe'r nactor and approval pursuant to 10 CFR 50.80. qualifications regulat!ans are warranted. licensees own their plants jointly with

Federal Regist:r / Vol. 62 Na.160 / Tuesday, Aug st 19, 1997 / Rules and Regulations 44077 other, unrelat:d crgantr%ns c.tthou,h capability for safe e perati:n and F. Antitrust Reviews some co owners rmy on ' S authorized decommissioning ht could arise from The NRC is statutorily required under to have an ownership im. ast in the rate deregulation end restructuring. the AEA,in conntiction wnh an nuclear facility and its nuclear material. Section 184 of the AEA and to CFR application for a licenu to comtruct or and not to operate it, the NRC views all 50 80 provide that no licenu shall be operate a facility under section 103. to co owners as co licensees who are transferred, directly or indirectly, evaluate an applicant's or a licensee's ruponsible for complying with the through transfer of control of the activities under the NRClicense to terms of their licenses. See l'ubhc license, unless the Commission determine whether ha activides Servke Company offndfono,Inc. consents in writing. The NRC will crute or maintain a situation (Marble 11111 Nuclur Generat(NRC 179, ng Station, continue to review transfers to inconsistent with the antitrust laws of Units 1 and 2), ALAD-459,7 determine their potendal impact on the the United States. However, the NRC 200-201 (1978) The NRC is concerad licensee's ability both to maintain will explors with FERC, SEC, and the about the effects on the availability of adequate technical qualifications and Department of Justice rnethods by which operating and decommissiodng funds, organisational control and authority the NRC can minimite duplication of and about the division of responsibility over the facility and to provide adequate effort on antitrust issues, while for operating and decommissioning funds for safe operation and maintaining its statutory funds, when co-owners file for decommissioning. Such consent is responsibilities. The NRC will consider bankruptcy or otherwise encounter clearly required when a corpors e entity neking legislation eliminating its financial difficulty.s The NRC meeks to 'ransfer a licenu it holds to a review mandate to the extent that NRC recognises that co owws and co-diffuent corporate entity. See len# reviews sto duplicated by other licennes generally dolde cosa and Island lJghung Co. (Shoreham Nuclear

apnctu, outpu' from their facihtles using e power Station, Unit 1) CU-92-4,35 The NRC anticipates that competitive contractually defined, pro rata share NRC 69 (1992).The NRC staff has reviews over the next 5 to 10 years will standard. The NRC has implicitly advised licensees that egency consent arise primarily from changes in control accepted this practice in h past and snust be sought and obtained under to of licemed facilitin. The regulatory believes that it should continue to be CFR 50.80 for the formation of a new r? view addressing transfer of control of the operative practico, but reserves the holding company over an existing licenses under to CFR 50.80 will be right,in highly unusual situations licensee. Other types of transactions, und to determine whether new owners where edoquate protection of public including where non licensee or operators will be sub}ect to an NRC beelth and safey would be orBanlutics are proposed to have some review with respect to antitrust matters.

compromised if such,ction were not degree of involvement in the talen, to consider imposing joint and mangement or operation of the plant, Small Businese Regulatory Enforcement uveralliability on co owners of more have been considued by the staff on a Fairness Act than de minimis shues when one or case by can basis to determine whether in acx:ordance with the Small more co owners have defaulted. to CFp 50.80 consent is required. The Business Regulatory Enforcement Act of D. Financial Qualifications Reviews NRC is evaluating what types of 1998, the NRC has determined that this transfers or astructurings should be action is not a " major rule" and has The NRC believes that ta, s existing sub}ect to 10 CFR 50.80 review, The verified this determination with the regulatory framework contained in to NRC staff wlllinform the Commission Office of Information and Regulatory CFR 50.33(f) and in the guidance in to of unique or unusuallicensee Affairs. Office of Management and CFR part 50, Appendix C le pnerally restructuring actions. Budget. sumclent at this time to provide reasonable assurance of the financial E. Decommissioning Funding Assurance Electronic Access qualifications of both electric' utility and Reviews no NRC electronic Bulletin Board non electric utility applicants and The NRC believes that the existing System (BBS) on FedWorld may be licensees under b various ownership decommissioning funding assurance scoesud by using a personal computer, arrangements of which h staffis provisions in to CFR 50.75 pnerally a modem, and one of b commonly currently aware. Ucensees that remain provide an adequate regulatory basis for evallable communications software "electdc utilities" will not be sub}ect to existing and possible new licensees to packages, or directly by wey of Internet. NRC financial qualifications review, provide rusonable assurance of Baclypound documents on the final other than to determine ht such licensees, in fact, remain " electric dacommlastoning funds, However, to policy statement are also available, as examine this and other issues related to practical, for downloading and viewing utilities."!!owever, the NRC is decommissioning funding assurance in on the bulletin board. evaluating h need tp develop additional requirements to ensur' anticipatic i of rete deregulation, the if usin modem, g a persom! computer and NRC published an ANPR (61 FR 15477, the NRC subsystem on against potential dilution of the April 8,1996). De NRC is considering FedWorld can be accessed directly by a proposed rulemaking developed in dialing the toll frw number (800) 303-

• The NaC has had e team wuh three response to the comments received on 9672. Communication software

. N Ea Yor"o Y.w E s $nN "[ 4. the ANPR. In addition, the NRC wishes eters should be set as follows: al.d under chwin ti ef t nkrupicy ce to emphastre that it retains the right to to none, data bits to 0, and stop Pubhc sorrice dampen er New Ha*P* hire nuess the timing of decommissioning bits to 1 (N,8,1). tJsing ANSI or VF-100 (PsNHL e coewnw p opersta of the Eastwook hiU.N. dItIniNMufgMW the liquidity of decommissioGg fundstrust fund deposits and withdrawals and termina can then be accessed b selecting the cooper oo tc.dt e co.wnw of the sunt send for those licensees that no longst have " Rules Menu" option bm the "NRC pl nt. noth rsun ud trcc comunued their pro rate regulatory oversight and insofar as Main Menu." Many NRC subsystems nia conuhuana in the operettns and such timing would potentiali irr.kactend databases also have a "lielp/ the protection of public health an Information Canter" option ht is t[Ds7trYotIn$IyNiua nm.tas te 5=e atrupicy.

safety, tailored to the particular subsystem.

l

44078 Federal Register / Vol. 62. No.100 / Tu:sday, August 19, 1997 / Rul:s and ' Regulations ~ The NRC subsyst:m cn FedW;rld can DEPARTMENT CF TRANSPOT)TATION body of technical regulations for which also be accessed by a direct dial frequent and routine amendments are tiphone number for the main Federal Aviation Administration necessary to keep them operationally FedWorld BDS,(703) 321-3339, or by current. Therefore, this regulation-41) 14 CFR Part 71 using Telnet via Internet: fedworld gov, is not a "significant rtSulatory action" If using (703) 321-3339 to contact (Alrapace Docket No. 97-AOL-2) under Ext cutive Order 12866; (2) is not FcdWorld,the NRC subsystem will be a "significant rule" under DOT accessed from the main FedWorld menu Ron'ovalof Class D Airspace; Regulatory Policies and Procedures (44 by selecting the " Regulatory, Glenview,IL FR 11034;I ebruary 26,1979); and (3) Government Administration and State P Systems,, then selecting,' Regulatory Administration (FAA) DOT, gul ory v tfo s ti e ant cipated AGENCYFederal Aviation impact is so minimal. Since this is a A a tu n 1 dis la ed a has an taune maun est wW mly aHect alt cption "U.S. Nuclear Regulatory

SUMMARY

This' action removes Class D

$"," j", wYn 't ae Commission," which will take you to airspeca at Glenview,IL This airspace a sigrtificant economic impact on a the NRC on line main menu. The NRC is ren.vved due to the closing of the Air substantial number of small entitles On.line area also can be accessed Traffic Control Tower at Glenview Coast directly by typing "/go nrc" at a Guard Air Field (CGAF), Glenview,IL under the criteria of the Regulatory FedWorld command line. lf you access The intended effect of thl actionis to Flexibility Act. NRC from FedWorld's main menu, you provide an accurate description of List of Subjecta in 14 CFR Pari 71 may return to FedWorld by selecting the, controlled altspace for Glenview,IL Airspace, incorporation by reference, " Return to FedWorld" option from the EFFECTIVE DATE: 0901 UTC, September Navigation (alt). NRC cn line main menu. flowever,il 18,1997, ' Adoption of the Amendment you access NRC at TedWorld by using FOR FURTHER INFORMaTION CONT ACT! NRC's toll free number, you will have Michelle Behm, Air Traffic D vision, In Con 81d8T8 tion DIthe foreEolng, the full access to all NRC systems, but you Altenace Branch, AGL-520. Federal Federal Aviation Administration I will not have access to the main Avia' tion Administration,2300 East amends 14 CFR part 71 as follows: FedWorld system. Devon Avenue, Des Plaines, Illinois If you contact FedWorld using Telnet, 60018, telephone (847) 294-7568. PART 71--{ AMENDED)

• ou will see the NRC area and menus, SUPPLEMENTARY INFORMATION:.

1 The authority citatin for part 71 ncludin the Rules menu. Although c niinues to read as follows: you will e able to download ggist ry Authority 4 9 U.S C.10 Mal. 40103. 40113, documents and leave messages, you will On Monday, January 27.1997, the 401:0. E o 10854,24 rR 9565. 3 CTR.1959-n!t be able to write comments or upload FAA proposed to amend part 71 of the 1963 Comp 4 p. 389. fil;s (comtnents). If you contact Federal Aviation Regulations (14 CFR 671.1 (Amendedl FedWorld using ITP, all files can be {an 71) t remove Class D altspace at

2. The incorporation by reference in lenview,IL (62 FR 3840). The proposal 14 CFR 71.1 of the Federal Aviation accessed and downloaded but uploads are not allowed; all you will see is a list was intended to provide an accurate of files without descriptions (normal descri tion of controlled altspace for Administration Order 7400.9D, Altspace Gopher look). An indeu file listing all Glenv ew lb Interested parties were Designations and Reporting Points.

dated September 4,1996, and eIfective fil;s within a subdirectory, with ' }tember 1,6,1996,is amended as descriptions, is available. There is a 15' pr ceeding s ntn r te minute time limit for ITP access. comments on the proposal to the FAA. PorosroP $56 Class D Airspace No comments objecting to the proposal h Although FedWorld can also be were received. Class D altspace accessed through the World Wide Web, designatlans are published in paragraph like FTP, that mode only provides 5000 of FAA Order 7400.9D, dated AGl.!L D Glenview,II. [Removedl access for downloading files and does Septemberf,1996, and effective not display the NRC Rules menu. September 16,1996, which is issued in Des Plaines. Illinois on luly 16*

ggy, For more information on NRC bulletin I"0 T rated by reference in 14 CFR y,

wg,, (I I' gf,d in this becrds call Mr. Arthur Davis, Systems ment il Manager, Anmffic Wsion. Integration and Development Branch' NRC, Washington, DC 20555-0001, published subsequently in the Order. [FR Dx 97-21863 Filed 8-16-97; 6 45 aml amuseo coot 4m.ta a telephone (301) 415-5780; e mail The Rule AXD3@nrc gov-This amendment to art 71 of the Dated at Rockville, Maryland, this 13th day Federal Aviation Regu ations (14 CFR DEPARTMENT OF TRANSPORTATION of August,1997, part 71) removes Class D airspace at For the Nuctear Regulatory Commission. Glenview IL This altspace is removed Federal Avlation Administration g gigi,* due to the closing of the Air Traffic 14 CFR Part 71 Secretary of the commission. Control Tower at Glenview CGAF, Glenview,IL The intended effect of this (Akopace Dedet No17-AR-12) (FR Doc. 97-21679 Filed 8-15-97; 8 45 am) action is to provide an accurate satmo coor mo euu description of controlled airspace for YhIhahment of Ctaan E Altspace; I Glenview,IL The FAA has determined that this AGENOY3 Federal Aviation rvgulation only involves an established Administration (FAA), DOT. J

8 i 's l W,8 9 E STATE LIAISON OFFICERS STATE PUBLIC UTILITY COMMISSION'c FINAL POLICY STATEMENT ON THE RESTRUCTURING AND ECONOMIC DEREGULATION OF THE ELECTRIC UTILITY INDUSTRY (SP 97 060 ) The U.S. Nuclear Regulatory Commicslon (NRC)is issuing this final statement of policy regarding its expectations for, and intended approach to, its power reactor licensees as the electric utility industry moves from an. environment of rate regulation toward greater competition. The NRC has concerns about possible effects that rate deregulation and disaggregation resulting from various restructuring actions involving power reactor licensees could have on the protection of public health and safety. Enclosed for your information is a copy of the Commission's policy statement which becomes effective on October 20,1997. W RICHARD L NG Richard L. Bangart, Director Office of State Programs

Enclosure:

As stated Distribution: DIR RF Agreement State File SLO File DCD (SP03) PDR (YES/) DOCUMENT NAME: G:\\SCD\\ POLICY T2,eceive e copy of thne document. kid 6cate h the boa

cpy without ettschtnant/ enclosure

'E' = Copy with attachmentrenclosure

• N' e No copy omct 9 ose 1

ya wn 1 ose. ope 1 i NAME 6 C Droggitis 'Od PHL o@ut RLBangart iMO oA16 ooasi oazz ger osppsi QFF6CahL HEGQMD GQPi 05P F6LE GQPL 5F.A 4 EP 5-pg IRC RE CENTER C0in

Tederal Register / Vol. 62, No.100 / Tuesday, August 19, 1997 / Rules and Regulations 44071 o (i) Collect I chick box paper for each restructuring cf the electric uulity reasons for the NRC's c:ncerns. Some 10 boxes of chicks placed in a house industry and the sneans by which NRC directly supported the NRC's overall and place the chick papers immediately intends to address thou ccmcerns, approac.h, particularly the five actions into larp plastic bags and seal the bags. Becaun of the internt expreued by listed in Section III. Commenter 14. fer (ii) Place the plasuc bags containing uveral commenters, the NRC extended esample, stated that these five actions the chick box papersin a clean box and the public comment parlod to February thould provide sufficient focus for NRC transport them within 48 hours to a 9,1997, actions. Commenter $ believes that the laboratory. The.plutic bags do ata require refrigeradon. II, Summary of and Ruponse to NRC's current authority is sufficient to Comments cope with any ufetyluun raised by rate deregulation. Commenter 31 shares Bufg ber 0sb'ry The NRC received 32 ublic the NRC's concems but indicated that und otr Donein W comments on the draft licy statements the draft olicy statement did not ,,"I g, yy, ashiegton, DC, this 13th day of 3 9,,,, 3,, 14 from electric utility census or their addreu e keyissue,namely whether 'I' reprewatatives,8 from State public economic deregulati, n of nuclear power Administrator, AnfinalendtlantHuhh uulity commissions (PUCs)or other is compatible with th iprotection of

1. ^'P'**"

• State agencies,5 from public interest public health and sali ty.

if R Doc. 9T-21901 Filed 6-1s eri a 45 aml (oups,4 from private consultants and other comments, pa ticularly from dWiduala, and 1 from a labor union, electric utility licensus and their

• "** 8088 *"* **-8 The following list provido the names repinentatives, suggested that some and comment numbers referenced in.

NRC concems are overstats d. For this notice: NUCLE AR REQULATORY example. Commenter 4 recommended COMMISSION

t. Nuclear Informauos and Resourta elimination of language in the polley Service-<omment extension request statement that implies that deregulation 10 CFR Part 60 on1 is inevitable. Other commenters

2. Pubb Service Commission of Wisconsin suggested that the policy statement Final Polle Statement on the 8 Ertsinnrtna Appued Sciences,inc should recognire that change will occur

4. W Electric at different rates and, therefore, the NRC Restructor ng and Economio s Pubhc service Electric & Cao Company should individually evaluate Deregulation of the Electric Utility

6. Minnesota Department of Pubhc service Industry 7, spie el a McDiarmid on behalf of 6

,, structuring as it affects each nuclear pi4nt. in any case, restructuring will not ActNCyr Nuclear Regulatory a (PA1 n1e ins,'l c 'Cititens Action. occur so rapidly or secretl that the NRC Commission. Coalition of$ndiana, Inc., and Public will not know about it. O ers stated ACTION: Pinal Polley Statement, Citizen, inc, that many services will remain 9 Wiscon:La Emergency Managernent, regulated and that the PUCs will act suMuaRt:The U.S. Nuclear Regulatory Burnu of Technological Huards responsibly, further, there is no basis Commission (NRC) is issuing this final

10. Ilhnois Department of Nuclut Safety for the NRC to conclude that licensees statement of policy regarding its it. International Brotherhood of Electrical will be unable to provide adequate expectations for, and intended approach Workers to,its power reactor licensees as the 12 Consohdated Edison Cornpany of New financial assurance for safe operations and decommluloning. The hational electric utility industry snoves from an n'orUe environment of rate regulation toward

14. GPU Nuclea, m Association of Regulatory Utility 1

t Commissioners (N ARUC) stated that in greater competition. Trie NRC has

15. Commonwnith Edison Company view of the experimental nature of many concems about the possible eflects that 16 vermont Department of Pubbe service State actions, the NRC should approach rate deregulation and disaggtvgstion t r. Mardyn Eha deregulation cautiously. Finally, several resulting from various restructuring 18 CE Stockholden' Alliance for a commenters asked the NRC to avoid actions involving power reactor Sustainable Nuclear Fru Future actions that would serve as licensees could have on the protection

19. Women Spuk Out for Puce and jusute of public health and safety.

24 New Engtand Powat Com any im(nediments to deregulation, ,,ommenters representing public EFFECTIVE DATE:Thl olicy statement s"erfija"D't!**Dd"ur"' interest oups generally thought that becomes effective on ober 20,1997.

22. New lorsey Division of the Ratepayer the dra olicy statement did not go far FOR FURTHER INFORMaTION CCWTACT

. Advocate enough i addressing safety concerns Robert S. Wood Office of Nuclear

23. Southern Cahfornie Edison Company related to deregulation. Thne commenters stated that the NRC should Reactor Regulation U.S. Nuclear 88 ED'"EY D '""0D'uInc.

P

25. Nuclear Energy las tute take immediate action with respect to Regulato#Y ommission'ne (301)EIon' C

Wohin

26. Arizona Pubhc Service ComNorney y

on line maintenance rectices, extended DC 20555-0001, telepho 415-27 Mas schuutu Office of the refueling cycles and owntime during 1255, e. mail RSW14nte gov. Gennel ! refueling, and up front funding of SUPPLEMENT ARY INFORMATION:

26. Winston and $trawn onbehalf of the

l. Background Utility Decotnmissioning Group decommissioning, among other issues.

29. Dave Cnwford and Diane Peluson Some suggested that the polic '

f; j) gj g 'd! u lon os1s b On September 23,1996, the NRC 34 Nau nl Electric Coopenun egative safety g, lasued a draft polley statement for public comment (61 FR 49711). The

31. Schusul Technical Consulting. loc.

risks from economic deregulation, such' purpose of the draft policy statement

32. National Association of Regulatory Utility as cutting comers and deferring capital Commissionus investments. These commenten also was to provide a discussion of the NRC's concems regarding the potential Genero/ Commenfs urged the NRC to expand its inspection and compliance resources to counter the safety impacts on NRC power reactur Most commenters viewed the adverse safety impacts that these licensees which could result from the issuance of the draft policy statement as commenters believe will result from t'conomic deregulation and timely and appeared to understand the deregulation.

44072 rederal Regi2r / V:1. 02, No.160 / Tuesday August 19, 1997 / Rules and Regulations NRC's Asponse o Gen:talComments stated ht 6 mphasis and focus on potendellmpact tf eennomic Re arding the issue of whether the mugency planning rne Insen, deregulation on specific safety programs P011CY 't't'*'"t should address the Commenter 10 suggeste that the NRC's and practices. As discussed in the compatibility between economic shift to pulormance band and risk. NRC's response to general comments, dereguladon and the protection g informed regulations may potentially the NRC will continue to evalusto public health and sefety, the NRC thneten established safety niar ins. specific safety concerns or 10 CTR 50.59 This commenter u7gorous fdrobabillatic oversig t programs. h ed 6 NR to review rocesses as believu that econornic deregulation establish cu...at, v or example, on. does not reclude adequate rotection risk auessments (pRAs) to entify the line ma atenance and increased fuel cf public ealth and ufety, lowever, due to the increased uncertainty risks,which would be used in all burnup m being considmd through engendered by state by. state appropriate ainas of plant operation as the NRC's safety review and inspction deregulation of the electric power a cornerstone to maintaining cost-oversight programs. Reductions in the NRCis concerned about effeedve safety margins in a changing manpower end training costs, and other industry,ble impact on the protection of environment. reductions in oberetion and the possi Many commenters did not view maintenance ( M) and capital public health and safety. Thus in the deregulation as necessarily a additions budgets m cf continuing draft policy statement, the NRC expresud ltagennel concerns about the disincentive to safe operadon.They concem to the NRC. The NRC is poutble effects of dwegulation. -died the incentive to opnete niely and considering changes to the Senior mallrJng that such concems can be use preventive maintenance due to the woulfement Muting process that Mane premium placed on unit evallability, lief economic trends. Ilowever, because the include consideradon of either vitiated or exacerbated depending Anobt commenter exprnud the be on specific dmgulation opproachu that that near. term economic incendus exist ufety concerns that commentus an implemented. In this respect, the for expendituns to maintain reliable expressed exist,in many cases, NRC recognizes that deregulation will occur at diffmnt times,in difiennt opustion. However, this incentive independently of economic decrwoes as a plant ages and thus le of deregulation, the NRC believes that degrws, and in some turisdictions, erseter concern latn in a plant's life. - thus issues han bun and are more pnhaps not at all, and the final policy (;ommenter 23 suasested that the policy appropriately considered in other NRC statement mora explicitly recognius statement be modified to support a programs. Also independently of these facts. With nspect to the concerns licensee's use of the 10 CTR 50.59 oconomic deregulauon, the NRC is expresud by public intmst groups review process to determine that striving to make its regulatory program cbout the impact of certain potential establishment of an indepndent System as efficient and effectin as poulble-ufety pmetices, such as on4ine Opnetor(150) does not involn an through use of risk analysis and other maintenance and outage duration, the unnviewed safety question. techniquu-so ht b ruources of the NRC has addrneed, and will continue Other commentus indicated that agency and oflicensees an devoted to to addnss, bu issun as ufety issues. disincentins to ufe opusuon should the most safety-significant matters. Als polley statement is not meant to be be dult with by limiting ructor The NRC has extensively reviewed a substitute for regulatory remedies to operating cycles to 18 months and State performance incentive programs specific safety problems. requiring at lent 250 hours for refueling and does not believe significant Srfficien of Current Regulatory outages. These commentus also additional nview is warranted at this framewo andlncentives for Safe opposed on line maintenance. time. (See footnote 2 in the polley 0 eroUon Another commenter exprweed Statement below.) P concnn that daragulation would be a Although most commenters indicated disincentive to continuing coepnation Mnonclo@alificadons that the NRC's curtsnt regulatory among nuclear generetors, such as early Commenters expressed varied framework to adequate to protect public nporting of ufety and opuntionally opinions. Although some viewed b hulth and safety, others dingreed. significant events and continustion of NRC's current financial qualifications Commenter 21 for example, cited the b institute of Nuclear power lato framework as sufficient, cxperience with the Millstone facility Opustions (INPO). Addidonally,the Zrs lEleved that additional measures and indicated that it is "ofincrusing prusure on b NRC to mduce costs to may be necessary. Commenter 20 concern that NRC cannot scxurately licensees willincrease, as will prusur, indicated that b critical question for determine the extent and scope that to r, duce use of the " watch list." This the NRC is whether. Ln the absence of econamics plays in the mouctions of commenter cited the analogy of b independent financial assurances to the

• • actor safety margins and the deferral resultant events at the Federal Aviation NRC from its litansees, rete regulators of safety significant 1: sues." nis Administration (FAA) when the airlines han committed to provide licensees commentu concluded that the polley were deregulakd and uryd b NRC to with sufficient financial resources, statement has not adequately sodressed avoid b FAA's mistakes.nis Commenter 2 stated that!!reconry of aslety harards brought about by commenter also suggested that incentive etranded costs is not allowed oris

' managa,ial malpractics in response to segulation of nuclear plants may become severely restricted, a large number of economic prwsures. Other commenters an altamative to full deregulation and premature shutdowns may occur. stated that the NRC must continue to that the NRC should study incentive further straining licensus' financial ensure that its own inspection and programs used at Disblo Canyon and qualifications and dhntnishin their i ovnsight programs identify when a Pilgrim. anility to decommission safel. In this licenue is falling to devote eufficient vein,Commenter 15 uryd th t the NRC resources to ensuring safe operations, NRCs Respese to Comments on aggrwsively aftirm that stranded capital specifically as a result of deficiericles Sufficiencyof Current Regulatory costs must be recovered by utilities. neulting from economic pressure. When.frumeett andinceaunsfor Sof' Conunenter 1B indicated bt those necessuy, the NRC should asek Opnadon nuclear plant licensees that are no additionalinspection and compliance The NRC shares rnany of the concerns longer rete regulated should have enources from Congren. Commentst 9 expreued by commenters about the aufficient buffering funds to proceed

Federal Register / Vol. 62. No.160 / Tuesday August 19, 1997 / Rules and Regulations 44073 ufely from cperati:ns t3 obligstlinsinits deliberati:ns on does n:t believe that Sectirn 184 of 6 decommissioning. Comrnenter g stated financial qualifications. Atomic Energy Act of 1954, as amended. bt the NRC should shut down the knancial ability to sustain safelants oflicensees with questionable ggg.s Response to Comments on allows the NRC to e,pprove transfers by F/"#"##a1 Qualifi#####"8 twhadve cuunt T e NRC will continue to use its operationsin a compedtive The NRC remains concerned about current method of evaluating a environment and should requin them to the impacts of deregulation on its power licenm's cash flow under to CFR decommission their facilldes. Operating res: tor licensets' financial 140.21 to determine a licensee's ability costs that cannot be recovered qualificadons. The NRC's existing to pay deferred pnmiums under b compeduvely should be borne by b regulatory framework under 10 CTR. Price Anderson Act, licensee, not the ratepayer or the 50.33(0 requires financial qualifications the Nker. Commentet 22 believes that reviews for thon licensees that no. Decommissioning Tunding Assurunce tax a C should institute ongoing longer meet the definition of" electric The consensus appeared to be that 6 l !Lnancial quabficauona toviews every 2 utility"at b operating licenu (OL) NRC should work clowly with State to 5 years for all power reactor stage. Paragra also Provios ph 4 of 10 CFR 50.33(0 regulators to provide for assurance of incensees, includlng those that still meet 61the NRC may mk . decommissioning funding. Commenter the NRC's definition of" electric additional 04 more detailed information 13 recommended that the policy uulity." Commenter 31 recommends respecting an applicant's or a licenm'a statement include a call for the that b NRC examine whebt mergers financial arrangements and status of continued recovery of decommissioning and joint operating agreements would funds 11b Commlaalon conalders this costs throuth regulated rates and tariffs dilute or weaken units and utilldes that information appropriete.The NRC will ' in alllurisdictions. Similarly, he NRC evaluate addiuonal rulemaking, separate Commenter 16 suggested that t are performing wellby spreading or diverting existing management from the propowd rulemaking on maintain swarenns of State attention, pmonnel, and other financial assurance requirements for decommissioning procodings, monitor resources over a larger number of units.. decommissioning, to determine whether funding adequacy based on b Other commentm appemd quite enhancements toits financial estimates produced in State optimistic that addidonal financial quali$ cations requirements are proceedings, and work with 6 host qualifica0ons reviews would be necessary in anticipauon that some State to ensure that adequate amounts unnecessary. Commenter 15 suggested Power reactor licensees will no longer are provided.in decommissioning trust that the NRC should avoid conibcts . be " electric utilides." However, the funds. Another commenter stated that with obr agencies hwing jurisdiction NRC continues to believe that its additional decommissioning funding over financial qualifications and should Primary tool for evaluatics and ensuring assurance should be requind on an ad not condluon license transfers, nie operations at its liconed facilldes. hoc basis and that the hRC should not . Commenter 23 and others indicated that is through its inspection and require accelerated decommissioning holding compantes should not be enforcement programs. In its previous funding. sub)ect to 10 CFR 50.80 license transfer experience, the NRC has found that . Many State and licensu commenters reviews. At most, the NRC should use there is only an indirect roladonship asked b NRC to accept non bypassable a " negative consent" approach to between financial qualifications and charges or other mechanisms, such as formadon of holding companias. This operational safety, but it is continuing to dedicated revenue strums, as proof of commenter also recommended that the study this issue. Although enhanced decommissioning funding assurance. NRC provide roore explicit guidance on financial qualificadons nylews may Similarly, those licensees whose States the "no significant hazards' criteria that provide the NRC with valuable require such mechanisms should be are used with license amendments. additionalinsights on a licensee's considmd " electric utilities" under b Commenter 23 asked that b NRC geners) quahlications to operate its NRC's regulations. Many commenters adopt clear criteria for approval of facilities safely,it is not clear that also suggested that the NRC take a more license transfer requests and use clear. - enhanced financialqualifications proactive A with the Congress, the unambiguous standards for license programs by themselves would prove to Executive Branch, and others in order to transfm to non utthty licenms such as be a sufficientindicator of general increase assurance of decommissioning those offered in the Draft Standard ability to oparete a facility safely, bds. Review Plan (SRP) on Financial With respect to the issue of Most public inte'nst group Quahlications and Decommissioning decommissioning and stranded costs, commenters advocated that the NRC Funding Assurance (61 FR 68309, many states am considering end" fund es you go" decommissioning December 27,1996). The regulat%:in securitisation as a non bypassable by 3, quiring full, up front to CFR 50.33lf) for non utihty bd.msees charge mechanism to fund b recovery decommissioning for unfunded abould be modified and should include of decommissioning, and other stranded balances Thue commenters also asked standards for entended, unplanned costs. The NRC believes that that any atranded cost memery be outages, such as minimum amounts for iecuritization has b potential to applied to external decommissioning retained urnings, insurance, and provide an acceptable method of trusts and that invutors bear the greater contractual arrangements, decommissioning funding assurance, shars in funding any decommissioning Commenter 22 sugguted that although obr mechanisms that involve abortfall. Obr comments sought the "securitization" may be an non bypassable charges may provide elimination ofinternal advantageous method of reducing compueblo levels of assurance and decommissioning funding and asked stranded cost charges to customers. . abould not be excluded from that decommissioning be funded at a Consequently, the NRC should endoree consideration by State authorities. regulatory, legal, permissible from aWith pspect to transfers of a license level that would permit a third party to securitlzadon as complete decommissioning'n the and public policy under to CFR 50.80, b NRC must Other specific comments i perspective. review and approve in writing all auch decommissioning area included (1) a finally, two commenters urged b transfers,if such transfers meet the recommendation that the NRC add an NRC to factor in Price Anderson appropriate NRC standards. The NRC explicit statament to the policy o

44074 Federal Regist:r / Vd. 62. N:.160 / Tuesday, August 19, 1997 / Rules and Regulations statement bt w:uld inform licensus sh uld take a m:re proactive roie and alter, and likely D:pardite, the business cf the NRC's right to assess the timing that the NRC can play a special role in anangements that underpin co-and liquidity of decommissioning hmd: educating rate regulators. Commenter 22 ownership. Sevnal of thou who (Commenter 3);(2) e recommendadon proposed thatthe NRC maintain a commented on this issue also pointed to f:t an increase in decommissioning dialogue with all classes of ratepayers, 6 bankmptcy laws as one way of reporting nquirements and assurance perhaps through the National ensuring that co owners pay their pro that funds are not diverted to non. Association of State Utility Consumer rate shm, although Commenter 22 decommissioning uses; (3) recognition Advocatu. Other suggested venues for suggested that recent NRC experience that if charges are placed on current NRC State regulatory interface included with bankrupt licensees rney not hold electricity customers while competiden the National Govunors Association, the true in h future. No one directly incnsus, consumns will avoid nuclear NationalConference of State commented on the issue of non owner power and will, therefon, avoid Legislatures, the American 14gislative operators, although 3 ccmments l contributing to decommlastoning Exchange, and similar groups addrened this luus peripherally. funding, and (4) recognluon that (Commentu 25 Commenter 15 decommissioning is not a stranded cost,. suggested that e NRC and NARUC ppg.s Response to Comments on folnf because stranded costs m known and convene a joint conference on stranded % 7,3jP musurable costa that have already been capital cost recovery. As previously The NRC recognises that co owners incarnd, whmas decommissioning mentioned, several commenters and co.llcanms generally divide costs costs are not fully known and have yet indicated that the NRC should act to and output from their facilities by using to be incumd. . educate Congresa and seek legislation in a contractually defined, pro rata share MC'8 Re8Ponse to Comments on areas relevant to plant safety and standard.The NRC has implicitly Decommlasfoning Punding Assurance restructuring, for example, a national accepted this practice in the past and exctn' tax to fund decommlastoning. bellevos bt it should continue to be Many of these comments parallel Finally.Commenter 22 ausgested that the operative practice, but resmos the comments received on 6 Advance the NRC review the States' plans for cost h riS t,in highly unusual attuations Nodce of Proposed Rulemaking(ANPR) recovery to ensure that, once romvered when adequate protection of public (61 FR 15427, April 8,1996) that sought through rates, thm revenues are health and ufety would be comment on restructuring issues u they employed for the purpon for which compromlad if such action were not rney

• elate to decommisaloning funding they wue collected.

taken, to consider imposing joint and assurance. The NRC is developing a propoud rule that conalders most of NRC's Response to Comments on severalliability on c& owners of more thue comments. With respect to the Reguloforyinferfoe' than de minimis shares when one or . more co-ownws have defaulted The specific comment that the polley The NRC believes that the policy NRC is addrusing b issue of non-statement should indicate that NRC statement adequately covmd W NRC's owner operators separately. retains the right to asps: the timing and intent to wrk clouly with rate liquidity of decommissionina funds, the regulators and others as dmgulation Ant / trust NRC agrees and will add such a proceeds. The NRC will consider Most commentus viewed NRC statement. Because of 6 tong history of expanding contacts to include the other antitrust reviews a redundant to those <ffe tive rete regulatory oversight and groups identlBod. Although the NRC perfonned by othw agencies, especially recovery of safety.related expenses will testify before Congress when asked in view of FERC Ordu 888, and through rates,in the 1988 to speak on its views on dagulation as recommended that the NRC act to decommissioning rule (53 FR 24018, plated to protecting public health and eliminate this redundancy. Commenter June 27,1988). the NRC defernd to the safety,6 NRC is evaluating whebt it 22 suggested that the NRC develop a PUCs and the Federal Energy Regulatory should snake specific recommendations memorandum of understanding with Commission (FERC) on the timing and on mechanisms to handle FERC and the Securities and Exchange liquidity of decommissioning trust fund decommisaloning costs and operational Commission (SEC) that would eJ1ow b d: posits. Howsver, the NRC has 6 costs.The NRC reco;;nitas 61 Fedwal NRC to rely on the judgments of these authority to auess b timing and legislation might be of benefit in agencies about market power that do not liquidity of such deposits by its resolving thm lesues. However, the raise lasues unique to the NRC's licensees, and intends to exacise this NRC also recognizes the vital role that mandate. Anobtcommenter authority with those licensees who lose States have played and will continue to recommended working with the rate regulatory.ovnsight. Similarly,10 play in nsolving thwe issues and is Department of Justice to develop a list CFR 50.82 specifies a schedule for fully propmd to work with the States of guidelines and criteria to evaluate decommissioning trust fund through albr State or federally requests for ownership changes. withdrawals and the NRC willthus sponsored inittadvu. uu6 i 3 e h C'g"thd'w'als Joint Ownenhlp s Virtually all who commented in this The NRC is statutorily required under Regulatoryinterfac' aru belleve that b NRC should not the Atomic Energy Act of1954 as Most commenters support NRC's impose joint and several liability on co-amended (AEA),in connection with an working clowly with State and Fedwal owners of nuclear plants. Rabr, wch application for a license to construct or Tate regulators, although some public . co-ownar abould be limited to its pro' ovaluate an applicant's or a licensee's opuste a facility under section 103, to interest groups stated thm such an effort rata share of operating and w:uld offer scant protection 'o the decommisaloning expenses. The NRC acuvidu under the NRClicense to public (Commenter 17). Many thought abould not look to one ownn to " ball detumine that then activities do not that the focus of this cooperation should out" another owner. Commenter 28 caste or maintain a situation be on the assurance of recovery of suggested that any effort to alter the inconsistent with the antitrust laws of decommissioning costs. Sorne current legal and financial raladonship the United States. However, the NRC c:mmenters believe that the NRC among co-owners would retroactively has begun to work with FERC SEC, and

Federal Reglier / Vol. 62. No.160 / Tuesday August 19, 1997 / Rules 'and Regulations 44075 e Department cf Justice la devel p Dissggregatirn may inv:lve utility require its cther licensees (with the m:thods by which the NRC can restructuring, mergers, and corporate added excep!!censees of certain tion of State and Federal minimite duplication of effort on spinoffs that lead to changes in ownen government antitrust issues, while carrying out its or operators oflicennd pcwer reactors facilities) to provide funding assurance statutory nsponsibilities.the NRC will and may cause some licensos, for the full utimated cost of also consider seeking legislation to including owners, to cease boing an decommissioning, either theough full eliminate its review to the extent that its " electric utility" as defined in to CFR up front funding or by some allowable nyiew duplicates the efforts of other 50.2J Such changes may affect the guarantee or surety mechanism. federal egencies, licensin basis under which the NRC A discussion of the NRC review Ochtluues original found a licensee to be Procen is containsd in two draft financia y qualified, either as an Standard Review Plans (SRPs) that the Sever:1commenters mede " electric utility" or otherwise, to NRC issued for comment: NUPIG-1577, observations not directly addressed la construct, operate, or own its power " Standard Review Plan on Power the draft policy statement. Commenter & plant, as well as to accumulate adequate Reactor 1.loenne Financial stated that nuclear plant operators in the funds to ensure decommissioning at the Qualifications and Decommissioning Northeast United States are subsidizina and of ructor life. (See discussion Funding Assurance"(January 1997); dirtier coal generation from Western below.) and NUREG-1574 " Standard Review U.S. generators. Accordingly,the NRC Rate regulators heve typically allowed Plan on Antitrust"(January 1997). In should articulate its views on the need an electric utility to.rocover prudently addition, the NRC issued an for nuclear power and its value for fuel incurred costs of generating, Administrative Letter on June 21,1996, diversity and environmental protection, transmitting, and distributing electric that informed power reactor licensees of Commenter 16 recommended that the services. Conuquently,In 1984, the their ongoing responsibility to inform NRC urge the Department of Energy to NRC elimineted financial qualifications and obtain advance approval from the proceed with interim spent fuel storagt. reviews at the OL, stage for those NRC for any changes that would to reduce uncertainty and costs facing licensees that met the definitionel. constitute a transfer of the license, nuclear plant operators. " electric utility"In to CFR 50.2 (40 FR directly or indirectly, through transfer of NRC's flesponse to Comments on Other 35747, September 12,1984).The NRC control of the NRC License to any person 1ssues based this decision on the assumption pursuant to 10 CFR 50.80. This that "the rate process assures that funds administrative letter also reminded The NRC does not have a rolein advocating the positions stated in thes*. needed for sefe operation will be madeaddressees of their responsibility to evallable to ngulated electric utilities" ensure that informouon regarding a comments. (49 FR 35747, et 35750). However, the licensee's financial qualifications and Policy Statement NRC neognized that financial decommissinning funding assurance quali.6cauons toviews for OL applicants that may have e significant impilcation L Basis might be appropriate in particular cases forpubuc health and safety is promptly a This policy statement recognires the ' in which, for asample, *the local public nported to the NRC. changes that are occurring in the electric utility commission will not allow the utility industry and the importance total cost of opersting the facility to be yg,gE'#$,p,jj,j'# these changes may have for the NRC and recovend through rates"(49 FR 35747 The NRC is concerned about the its licensees. The NRC's principal at 35751).The Commission also has Potential impact of utility restructuring mission is to regulats the nation's expressed concern about various State on public health and safety.The NRC civilian use of byproduct, sourts, and proposals to implement economic has not found a consistent nlationthlp special nuclear materials to ensun perfsinence incentive programs.: between a licensee's financial health adequate protection of public health and in its 1988 decommissioning rule,the and general indicators of. safety such as safety, to promote the common defense NRC again distinguished between the NRC's Systematic Assessment of and security, and to protect M - electic utilities and other licensees by 1.lconwe Performance. The NRC has environment, As part of carrying out allowing "slectric utilities" to traditionally relied on its inspecuon this mission, the NRC must monitor accumulate funds for decommiss!oning process to indicate when safety licenne activides and any changes in over the remaining terms of their Performance has begun to show adverse licensee actividas, as well as extemal operating licenses. NRC regulations trends. On the bests of inspection factors that may affect the ability of Program results, the NRC can tale ind viduallicensees to safely opera's iswoon so.s detta= t.cirte nutity u eny appropriate action, including, and decommission licensed power ""gth*' 8***'**** or distrhin.1.ctricagand ultimately, tant shutdown,to protect Production facilities. 7w,"l,*MN{','j,'",f,'E.b.dh Tublic heel and safety. However,if a

• ""'F "4 w bya w
• is msula, pant h pumanendy ab down, that authwiry. "tamuw +wn.Eiualm, tac 0 ins plant's licensee (s) may no longer have il Bock und 8

The electric utility industry is eener* tion ud distrhuan absidar$=. pubhc access to adequate revenues or other dct* '***1c'Pah'y" '*2%"T"' entering a period of economic Stu7 8 u'*! *!*ctr58 sources of funds for decommissioning 7E*,d*;"'d8td' *r",d the facility. If rete deregulation and deregulauon and restructuring that is intended to land to increased incaud.d withto ih in ning et.i.ct,tc uunty. - organizational divestiture occur competition in the industry. Incrsasing a sa pontbh senery impacu of Econwnic concurrently with the shutdown of a compeution may force integrated power Pariwintaca tacanti'** Final Policy seat.mont. (se nuclear plant either by NRC action or by systems to separate (or "disaggregate") ' ' M,8';8$l"the a licensee'a economic decision, that e thalt systems into functional areas. eindud: ud prosram Mac under iends et licensee may not be able to provide Thus, some licensees may divest siain tuuivi.d nany of ha prosrsrns u e means adequate assurance of decommissioning electrical generation assets from of ucourasins el.:srte utinun to tonr ei.nue funds. Thus, the NRC belleves that its transmission and distribution assets by Nu'. $$."'"*M$1 *ib"N'nQ concerns about derejulation and forrning separate subsidiaries or even perforrnuc. incenuve presrarns ehtrnately sney b. restructuring lie in u1e areas of separate companies for generation. eenaced by tau inarket comp.ution. adequacy of decommissioning fu."4 4 V

44076 Federal Regiter / V*l. 62. NL 160 / Tuesday, August 19, 1997 / Rules and Regulations and the potendal eflect bt economic in considmdon of then co:cerns, B. NRC Responsibilities Vis a Vis $tste dmgulation may have on opersuonal the NRC will evaluate dereguladon and and FederalEconomic Regulators

safety, restructuring actMtles as they evolve.

The NRC has recognind b primary As the electric utility industry moves Recognizing that the electric utility role that State and Federal economic from en environment of substantial. Industryis likely to undergo great regulaton beve prved, and in many economic regulation to one of increased c.bange, as restructuring progresses, the caps will continue to serve,in utting compettuon,6 NRCis concerned NRC will conunue to evaluate 6 need rates that include appropriate Imis of about the pace of restructuring and rate for regulatory or polley chango to meet funding for safe operadon and deregulauon. Approval of organissuonal b effects of dereguladon. The NRC decommissioning. For exunple,the and tuto dmguladon changes mey will take all appropriate actions to carry preamble to the 1988 decommissioning occur rapidly. The pace and degrw of out it:2nission to protect b health and rule contained the following statement: such changes could affect b factual safety of the public and, to b extent of "The rule, and the NRC's underpinnings of the NRC's previous its statutory mandate,to ensure. implementation of it, does not dul with - conclusions that power reactor licanwes consistency with Federal antitrust laws, financial retemaking issues such as rate heve accesa to adequete funds for DII"Dd COIIil0"'ntepaym tissu"on operadone and can reliably accumulate Tbe NRCintends toimplement PC'd"#" IO' I "d collechn, cost to adequate funds for decommissioning policies and tako eetion as deactbd in rating lives of their this pobey statement to ensure that its effects, equitability between early and over the oNr example, rete deregulation late ratepayers, secountin procedures, incillues. power reactorlicenms mmeln . ratepahmereersus stockholker could create situationsin which e ,. financially qualified to ensure consi dons,res onsiveness to licenne that previously met the NRC's conunued safe operadone and defintuon of an " electric utjllty" unde, decommissioning. In summary, the NRC c.hanIe and other sfmilar concems to CFR 50.2 may, at some point, no Will- .Tbm matters m outside NRC's lurisdicuon and are the responsibility of longer qualify for such status. At that e CanWous to conductits financial the State FUCs and (the Federal Energy point the NRC will require licennes to qualifications, decommissioning = Regulatory Commission) FERC"(53 FR oubmit proof pursuant to 10 CFR funding and antitrust reviews as . 240t8, hme 27.1968, at 24038). 50.33lf)(4) that they remain financially described in the SRPs developed in Notwitbatanding b primary role of qualified and will require them to meet the more stringent decommissioning concert with this policy statement economic reguistors in rete matters, the funding assurance requirements of 10 e Identlfy all owners, indirect as well

• NRC has authority under b AEA to CFR 50.75 that are applicable to non*

as direct, oI nuclear power plants *, take acdons that may affect a licensee's Clectric utilities.

• Establish and mainttid working financial situeuon when bse actions Although new and unique plationships with State and Federal rate an warranted to protect public health restructuring proposals will necessarily regulators; and and safety.To date,the NRC has found

. Do significant instances in which State invilve ce6e by cass reviewe by the e Reevaluate its regulations for their or Federal rate regulation has led to NRC, the NRC staff will edvise the adequacy to address changes resulung disallowance of funds for safety related Commission of such proposals so that from rate deregulation, operational and decommissioning the Commission will beve the option of expenses. Some rate regulators may exercising direct oversight of such A. Adequacy of Current Reguletory have chosen to nduce allowable profit reviews to maintain consistent NRC Framework policy toward new entides. As patterns margins through rate disallowances, or cf restructurin begin to emerge,the The NRC believes that its regulato licensees have for other reasons NRC will cons der standardizingits framawodis generally sufMenh at is encountered financial difficulty. ID Did" Ni views known..the NRC to make its safety framework further to streamline, where. time, to address b restructurings and .and to encourage nie possible,its case b norgerduhm bt wul hkdy adu as process. The NRC facase review n lators to continue their practice of a nsuIt of Wecidc uthy dmguIadon, Absent changes to the NRC's regulator [,3{ wing adequate s considered, and will continue to consider mergers and. scheme, the NnC s review process wil nuclear plant safety as electric utilides b cutright sales of facilities, or portions of facilities, to require NRC follow the curnnt framework. The NRC fece deregulation, the NRC has taken a atificadon and prior e provelin bellens that its Enancial qualmcadons nuh of achns toincnm accordance with 10 CF 50.80 in order requirements are sufficiently broad as to cooperation with State and Federal rate to ensure that the transferee or licensee Provide an adequate framework to and financial regulators to promote dialo rate kregulation or other actions thate and minimi e b po is appropriately qualified. For example, adequately review new or uni us in certain merger situations, the NRC altuations that are not explicit covered determines whether the surviving . In 10 CFR 50.33(f) and appen x C to. would have an advme effect on safety, art 50, for financial quahScations, and The NRCintends to continue to work organtution will remain'an ** electric utility" as defined tri 10 CFR 50.2. If a {n 10 CFR 50.75 for decommissionin8 and consult with the State PUCs, license applicant or a licensee falls to funding assurance. However,in order to individually or through NARUC, and meet this definition, the NRC will seek remove any ambiguities in its with FERC and other Federal agencies to regulations and to address those coordinate activities and exchange additional assurance of financial ' .informauon. However, b Commission qualificadons to operate and - situations that may not be adequately ' also reserves b flexibility to take dec:mmission b facility pursuant to covmd under current regulauons, b. 10 CFR 50.33(f) and 50.75 and as NRC is considering rulemaking to revise appropriate steps in order to assure a beensee's adequate accumulation of discussed in mo e detailin its SRP on its decammissioning funding assurance decommissioning funds. bu subjects. ThiNRC has also. requinments, as described in Section advised licennes that the formation of III.E. The NRC is evaluating whether C. Co-Owner Division of Responsibility h:Iding companies requires notification mndification to its financial Many of b NRC's powe'r reat'or and approval pursuant to lo CFR 50.80. qualifications regulations are warranted. licensees own their plants jointly vith

Federal Register / Vol. 62, N3.160 / Tuesday August 19, 1997 / Rules and Regulations 44077 4ther, unnlated organlutlins. Althrugh capbility for safe cpersti:n and F. Antitrust Reviews some c:-:wrcrs me only be authorized dec:mmisslining that could arise from The NRCis statutorily nguired under to have an ownersh interest in b rate deregulation and restructuring. b AEA,in connecuon with an nuclear facility and ts nuclear material, Section 184 of the AEA and to CFR spplication for a license to construct or and not to operate it, b NRC views all 50.80 provide that no license shall be operste a facihty under section 101,to co owners as co licennes who are transferred, directly or indirectly, evaluate an snplicants or a licenm's responalble for complying with b through transfer of control of the activities under the NRC license to terms of their licenses. See PuNic licenu, unlus the Commission detsimine whebt thm activities Service Company offndiano,Inc. consents in writing. The NRC will create or maintain a situation (Marble Ilill Nuclear Generstlng Station, continue to soview transfers to inconsistent with the satitrust laws of Units 1 and 21. ALAB-459,7 NRC 179, determine their potential impact on the the United States. However, b NRC 200-201 (1978). The NRC la concerned hcanm's ability both to maintain will explore with FERC, SEC, and b about the efrects on the availability of adequate technical qualifkauons and 0,panment of Juuce methods by which operating and decommlutoning funds, organizational control and authority the NRC can minimite duplication of and abtat the division of ruponsibility over the facility and to provide adequate effort on antitrust issues, while for operating and decommissioning funds for ufe opnadon and maintaining its statutory funds, when co-owners file for decommission 1 rig. Such consent is responsibilities. The NRC will consider bankruptcy er otherwise encounter clearly regulrod when a corporste entity miing legislation eliminating its financial efficulty.8 The NRC seeks to transfer a license it holds to a review mandsta to the extent bt NRC recognl es that co ownns and co-different rete entity, ham Nuclearrniews aso duplicated by other seelen# licensen generally divide costs and Island flg Co. (Shore agencies. output frorn thelt facillues using a Pown Stado, Unit 1) CLI-92-4,35 The NRC anticipates that compeutive contractually defined, pro reta share NRC 89 (1992).no NRC staff has nviews over the next 8 to 10 years will standard. The NRC has implicitly advind licensees bt agency conunt artu primarily from changes in control accepted this pactice in 6 past and must be sought and obtained under 10 of licensed facilities. The :*gulatory belims that it should continue to be CFR $0.60 for the formadon of a new to view addressing transfer of control of the opusuve practice, but reserves the holding company over an existing licenas under 10 CFR 50.80 will be right,in highly unusual situations licenm. Other types of transacdons, und to determine whether new owners whne odoquate protection of public including where non licenue or operators willbe subject to an NRC besith and safety would be organluuons are proposed to beve some envlow with twpect to antitrust matters. compromind if such acdon wns not degrw ofinvolvement in the taken, to consider troposing joint and mr.nagernent or operation of the plant, Small Business Regulatory Enforcement uveral liability on co owners of roots have been considered by the staff on a Fairness Act than de minimis shares when one or case-bv cou basis to determine whebt in accordance with the Small mors co-owners have defaulted. to CFh $0.80 consent is requitsd. The Business Regulatory Enforcement Act of D. Financial Qual!!1 cations Reviews NRus paluaung whsMypn of 1998, the NRC has determined that this transfers or restructurings should be action is not a " major rule" and has The NRC believes that the existing regulatory framework contained in to. subject to 10 CFR 60.80 rsview, The vuified this determination with b NRC staff willlaform the Commission Office of information and Reguletory CFR $0.33(f) and in the guidance in 10 of unique or unusuallicensee Affairs. Office of Management and CFR part 50, Appendix C,is generally restructuring actions.

Budget, sufficient at this time to provide reasonable assurance of thdinancial Ehmmtestoning Funding Assuranca Electroalc Accese qualifications of both electric utility and Reviews The NRC electronic Bulletin Board non electric utility applicants'and The NRC believes that b existing System (BBS) on FedWorld may be licensees under the various ownmhlP decomtrissioning funding assurance accessed by u Ing a personal computer, arrangements of which b staff it currently awan. Licanms that nmaln provisions in to CFR 50.75 generally a modem, and one of the commonly

• electric utilities" will not be subject to provide an adequate regulatory basta for svallt.ble communications software existing and possible new licensees to packages, or directly oy way of internet.

NRC financial qualifications review obt than to determine that such provide runonable apurance of Background documents on the final s licensees, in fact, remain " electric decommissioning hmds. Howsvor, to policy statement are also evallable, as examine this and other inaues related to practical, for downloadtog and viewing utiliues." Howner, the NRC is decommluloning funding tasurance in on the bulletin board. evaluatina the need tp dmloP antici ation of rete deregulation,the if using a additional requirements to ensurs NRC shed an ANFR (81 FR 18427, anodem, tho' personal coroputer and NRC subsystem on against potential dilution of the Apri 8,1996). The NRC is considering FedWorld can be accessed directly by

• Th NRC has bad ogwienn wLth thru a proposed rulemaking developed in dialing the toll free number (800) 303-responte to the comments rec 31Ved on 9672.Cornmunicatlon Software N'M",$" 87,1Y,w b ANPR. In addluon, the NRC wishes parametsrs should be set as follows:

an d udw chapa u erEuA mankapacy c.de: to emphasins that it retains the right to Parity to none, data bits to 8, and stop Pubh brvka camp af New Hampahlre tPsNHL e co.*wnw tga op.m of the sesM gegens the timing of deCCmmisslonlng bits to 1 (N,8,1). Using ANSI or VT-100 NaNvNkatI. n[Q[gM trust fund deposlts and Withdrawals and termlnal emulstlon,6 NRC.rubsystem the liquidity of decommissioning funds. can then be accessed by selecting the cooperatin Icalunt a coewnw of the suver ser,d for those licansees that no longer have " Rules Manu" option from b "NRC plant, noth PSNH and EPEC confiaued their pm gate regulatory oversight and insofar as Maln Menu." Many NRC subsystsms nta contritnat6ans la the operatins and such timing would potentially impact and databeses also have a " Help / rematas tok. w sEmNMiv, the protection of public health and information Center" option that is fY' atrvpicy. safety. tailored to the particular subsystem. m_._,_.._.._ ' - ~ ~ ~ ~ ~~

44078 Federal Register / Vol. 62. No.160 / Tuesday, August 19, 1997 / Rules and 'Regulati:ns ~ The NRC subsystem on FedWorld can DEPARTMENT OF TRANSPORTATION body tf technical reguistlins f:r which i also be aconsed by a direct. dial frequent and routine amendments are telephone number for the main F*deral Avletion Adminletration necessary to keep them operationally FedWorld BBS,(703) 321-3339, or by current. Thmfore, this regulation--(t) 14 CFR Part 71 using Telnet via Internet: fedworld. gov. 1s not a "significant regulatory (action" If tsing(d,the NRC subsystem will be under Executive Order 12866: 2)is not 703) 321-3339 to contact (Airspees Doohet No. 97-A01.-2) FedW:rl a "significant rule" under DOT accessed from the main FedWorld menu Removalof Class D Alrepoco; Regulatory Policies and Procedures (44 by selecting the " Regulatory, menyleg bl. FR 11034; February 26,1979); and (3) Government Administration and State Assucra Federal Aviation Systems, then se g 1,fo[yN,P tfelpated tlo e the InformationMall.,lecting RegulatoryAdministration (FAA), DOT, tropect is ao minimal. Since this is e At that point, a AcmoN: Final rule, menu will be displayed that has an routine matter that will only affect att option "U.S. Nuclear Regulatory auensARY1 Dis actlon removes Class D trame romiures and air navigation,it Commission," which will take you to alrepace at Glenview,IL This airspace is oord ed that thls rule willnot have the NRC on.Line main menu. The NRC is removed due to the closing of the Air a algniDeant economicim act on a On.line arts also can be accesud Traffic Control Tower at Glenview Coast substantial number of amtll entitles directly by typing "/go arc" at a Guard Air Field (CGAF Glenview, L under the criteria of the Tagulatory Flexibility Act* FedWorld command line. If you accus ' The intended effect of s action is to NRC from FedWorld's main menu, you Provide an accurate dncription of IJet o(Subjects in 14 CTR Part 71 may return to FedWorld by olecting the mntrolled airspace for Glenview, L Airspace,1ncorporadon by nference, " Return to FedWorld" option from the 'EPPECTivE Daft: 0901 UTC, September Navigation (alt). NRC on.line main menu. However,il 18,1997. Adopuon of the Amendment y:u scons NRC at TedWorld by using Pom runTwen poposesAnoN ooNTACil NRC's toll. free number, you will have Michelle Bohm Air Traffic Division, in concideration of the foregoing, the full access to all NRC systems, but you Altspace Branch, ACI-520 Federal Federal Aviadon Administration will not have accus to the main Aviation Administration,2300 East amends 14 CFR part 71 as follow:: FedWorld system. Devon Avenue, Des Plaines, Illinois If you contact FedWorld using Telnet, 60018, telephone (847) 294-7568. PART 71-[ AMENDED) aj** for part 71 you will see the NRC ana and menus, sumpt.ansaNTAmy sePonasAnoN:, including the Rules rnenu. Although HistM7 co un w'8 y u will be ableio download Authority: 4 9 U.S C.1063). 40:03,40113. documents and Inve messages, you will On Monday, January 27,1997, the 40:23. E O.10:54,24 FR 9563,3 CFR,1959-not be able to write comments or upload FAA proposed to amend part 71 of the d63 Comp., p. 389. files (comments),if you contact Federal Aviation Regulations (14 CFR g 71,1 (Amended) FedWorld using FTP, all files can be { art 71)to nmove Class D altspace at

2. The inco 14 CFR 71.1 o7the Federal Aviationoration by reference accessed and downloaded but uploads lenview,II. (62 FR 3840). The proposal are not allowed; all you will see is a list was intended to provide an accurate duct tion of controlled altspace for Administration Order 7400.9D, Altspace cf files without ductlptions (normal Dest ations and Reporting Points.

dateISeptember 4,1996, and effective Gopher lookl. An index file listing all dtE l tmst(dga s" files within a subdirector ci ducriptions,is available.y, with procnding by su$m,itting written b'g{tember 1,6,1996,is amended as Thm is a 15* minute time limit for FTP access. comments on the proposal to the FAA. No comments objecting to the proposal Parryoph 5500.' Class D Altspace Although FedWorld can also be won received. Class D airspace ' accessed through the World Wide Web, designations are published in paragraph like ITP,that mode only provides 5000 of FAA Order 7400.9D, dated AGLn. D Glenview,H. [Removedl access for downloading files and does September,4,19t'6, and effective tot display the NRC Rules menu. September 16,1996, which is g, issued in Des Plaines' Illinois on July 16' 97 For more information on NRC bulletin I"C0& 'eied by refenncein 14 CFRg,M pde, [I I lbE[ din th a d mntYil Monosn, Air TroMe Nstonc boards call Mr. Anthur Devis, System s Integration and Development Branch, NRC, % ashington DC 20555-0001, published subsequently in the Order, p DocM7-21863 Filed 6-18-97; s.45 mm1 eauuscons.a u telephone (301) 415-5780; e mail The Rule AXD39nrc. gov. This amendment to art 71 of the ' Deted at Rockville, Maryland, this 13th day Federal Aviation Regu ations (14 CFR DEPARTMENT OF TRANSPORTATION of August.1997., part 71) removes Class D altspace at For the Nuclear Regulatory Commission. Glenview, L This Airspace is mmov,ed Federal Aviation Adminletration due to the closing of the Air Traffic 14 CFR Part T1 Ma C. H@' S0cretaryofthe Commission. Control Tower t.t Glenview CGAF, Glenview, L The intended aflect of this 'Akepeos Demt NoJ7-A0bt2) (FR Doc. 97-21879 Filed 8-16-97; 8 45 ami actionis to provide an accurata tio Eetablishment of Class E Alrepece; asuus oaos voso.ei.u decrifew,n of controlled airspace forEly, MN Clenv L The FAA has determined that this. AGENCY: Federal Aviation regulation only involves an established Administration (FAAl, DOT. _m__ - _ _ _ _. _ _. _ _ _ _ _ _ _ _ _ _ _ _ _ _}}