ML20211M634

Rulemaking Plan for Amending Nuclear Power Reactor Decommissioning Cost Requirements

ML20211M634
Person / Time
Issue date:	07/25/1995
From:	Cyr K, Morrison D, Russell W NRC (Affiliation Not Assigned), NRC OFFICE OF NUCLEAR REGULATORY RESEARCH (RES), NRC OFFICE OF THE GENERAL COUNSEL (OGC)
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References
FRN-62FR47588, RULE-PR-50 AF41-1-006, AF41-1-6, PROC-950725, NUDOCS 9710150078
Download: ML20211M634 (13)

Text

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t B RULEMAKING PLAN FOR AMENDING NUCLEAR POWER v.dACTOR DECOMMISSIONING COST REQUIREMENTS l

l Lead Office: Office of Nuclear Regulatory Research Staff

Contact:

Brian Richter, RDB

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Concurrences: t' s

\ D. Morrison, RES Date' l M 9fSf9(

W.Rusgl,'t47 Date g$n,3 l 6. / IL 3 7/2r/7>

K. Cyr, OGC Date Approval:

J. Taylor Date 9710150078 971003 PDR PR 50 62FR47588 PDR ,

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RULEMAKING PLAN FOR AMENDING NUCLEAR POWER REACTOR DECOMMISSIONING COST REQUIREMENTS REGbtA10RY PROBLEM AND ISSUES TO BE RESOLVED The staff has determined that there is a need to update NRC's financial assurance requirements for the decommissioning of nuclear power plants.

Recent studies have shown that the present decommissioning cost requirements are outdated and not based on the most recent technology. Also, the impact of deregulation of the power generating industry has created additional uncertainty with respect to the availability of decommissioning funds. As a result, the staff is planning to make two amendments to 10 CFR 50.75 to L address these concerns. The first proposed amendment to modify the value of i the funds required to accomplish the decommiss;oning is addressed in this '

rulemaking plan. The second to modify the financial mechanism required to provide the decommissioning funds when needed, along with-the monitoring of such a mechanism, is being addressed in another plan.

Current rule requirements.

Requirements pertaining to financial assurance for the decommissioning of nuclear power reactors are contained in 5 50.75, which among other things, specifies generic decommissioning costs for_PWR's and BWR's of $105 million and $135 million, respectively (1986 $). An inflation formula is also prescribed (that accounts for the cost of labor, energy, and waste burial) in 5 50.75 for licensees to use in performing annual updates of their decommissioning cost estimates.

Regulatory Problem to be resolved.

For the following reasons, the staff is considering amending the rule. ,

First, the_ decommissioning cost estimates used in 5 50.75 were based on

-Battelle Pacific Northwest Laboratory (PNL) studies completed in 1978 for the reference PWR (NUREG/CR-0130) and in 1980 for the referenct BWR (NUREG/CR-0672). The 1986 cost numbers currently-in 5 50.75 were based only on inflationary adjustments to these earlier studies. At the time the studies

- were done, waste disposal was not considered a problem. It was assumed that low level waste could be. disposed of easily and at reasonable costs and that spent fuel would be sent to a high level waste repository.

Because the situation with respect to waste disposal has- drastically changed since the original PNL estimates were completed (i.e., more information is known about decommissioning activities and contamination characterization and some technological improvements have occurred), the NRC staff contracteo v.ith <

PNL to revise its decommissioning cost analyses for the reference PWR and BWR plants (i.e., Trojan and WNP-2) using their site-specific considerations.

-Several considerations were taken into account, including: (1) how long fuel was to remain in the spent fuel pool before removing it to an independent spent fuel installaticn (ISFSI) (e.g., 7 years for Trojan, based on Trojan's actual plans), (2) what specifica'lly needed removal (3) how much concrete required removal, and (4) how densely could metal waste components be packed.

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Recognizing that low level waste (LLW) disposal was very costly, a premium was put on reducing waste such that for the reference PWR, for example, the waste +

disposal volume from the original study of approximately 17,000 cubic n,eters was reduced to 7000 cubic meters. Parallelling the studies, computer codes ,

that ce run on PCs were also developed that allow for a wide variety of parameters to be considered to account for reactor facility site-specific situations. k A final report for the reference PWR is about to be published (NUREG/CR-5884) and a draf t report is being revised to include resolution of public comments for the reference BWR (NUREG/CR-6174). The PNL results from the revised '

analysis (Table 1) indicate that the cost of decommissioning Trojan, with ,

weste being shipped to the Hanford site, is about $125 million in 1994 dollars. The amount required under the current rule for a camparable situation is about $167 million. If the waste were required to la shipped to the Barnwell waste burial site, an additienal $80 million would be required, bringing the revised estimate to $205 millir The amount required unuer the l carrent rule for shipment to Barnwell would De $384 million due to the higher -

correction factor in the existing formula.

l TABLE 1 j

DECOMMISSIONING COST ESTIMATES' Current Rule Current Rule Revised PNL Estimates (1986 $) Comparables (1994 $)

(1994 $)

Hanford Barnwell Hanford Barnwell PWR 5105 $167 $384 $125 $205

, BWR $135 $207 $430 $158 $305 Sources: 10 CFR 50.75.

U.S. NRC, " Revised Analyses of Decommissioning for the Reference ,

Pressurized Water Reactor Power Station," (Draft Report for '

Comment) NUREG/CR-5884 (PNL-8742), Vols.1 and 2, Oct.1993.

U.S. NRC, " Revised Analyses of Decommissioning for the ' Mrence Boiling Water Reactor Power Station," (Draft Report fut .amment)

NUREG/CR-6174 (PNL-9975), Vols. 1 and 2, Sept. 1994.

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• Values are expressed in millions of dollars.

The results for the revised BWR case are abou* $33 million higher than the PWR '

estimate, similar to the difference in the current rule, and produce a cost of -

about $158 million for burial at the Hanford site. The amount required under the current rule for a comparat,le situation would be about $207 million.

Disposal of the waste at the Barnwell site would add about S150 million, 1

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resulting in a decommissioning cost of $305 million for the revised study estimate. 'For comparison, the required amount under the current rule for shipment to Barnwell'would be about $430 million. These lower costs, especially for burial at Barnwell, arise because the revised analysis assumes that' a lower volume of waste for disposal is generated, compensating for the currently high cost of waste disposal per unit volume.

Also, in preparing the above referenced NUREG/CRs, PNL performed detailed technical studies of decommissioning costs, with the information availt.ble at that time, using two model facilities (the Trojan reactor for the PWR case and i

WNP-2 for the BWR case). In situations where data was scarce, assumptions were used to obtain conservative, but reasonable bounds on the decommissioning l costs. These calculations were intended to be one-time estimates and thus l parameter variability, as it might pertain to other reactor decommissioning l situations, was not considered to any significant extent /a.g., use of unit cost-factors for performing repetitive tasks, amount and s,ee of piping requiring cutting and disposal, etc.).

Site-specific decommissioning cost estimates have also been developed since the PNL studies were completed. TIG Corporation has performed the majority of the decommissioning cost estimates for industry. Their estimates are site-sp9cific and are done through the use of a computer code which can handle a variety of parameters for customizing'the calculations to the particular i

reactor facility under consideration. The TLG cost estimates have j_ consistently been higher than the PNL estimates. The statements of consideration to the 1988 decommissioning rule (53 FR 24018; June 27,1988) indicated that the intent of the financial assurance provision is not to precisely estimate decommissioning costs, but to ensure that the bulk of the funds will be available for decommissioning.

Because of the apparent disparity between many industry cost estimates, primarily done by TLG, and the PNL results, a detailed decommissioning cost  ;

comparison of the PNL and TLG results was done by PNL for the reference BWR j ded in the earlier PNL-study (NUREG/CR-0672, Addendum 4; December 1990).- The j resultsofthatcomparisonindicatedthatthePNLestimatesareabout30%,5/)3, f lower than the TLG ones, primarily caused by large differencas in labor costs.

While PNL gives reasons for the comparative cost differences,. ultimately they arise because of reasonable, but differing, engineering judgements "oreov given the impreciseness of some of these estimates, a difference of 30%~9%gr., V

-reasonable. It should be noted that the PNL and TLG comparisons were performed for the same facility to eliminate cost contributors that can occur because of site-specific differences. However, there can be considerable variability in site-specific situations and the licensee's choice of decommissioning methodology can affect the decommissioning cost, causing it to differ from generic or idealized estimates.

Finally, a number of factors have contributed to some public confusion concerning decommissioning costs. Aside from some estimates giving higher costs, many licensees include other contributors sucn as maintenance and storage of the spent fuel and green field costs to their decommissioning cost estimates. Such costs are not included in the PNL estimates nor required by the NRC. Often, these costs are included in a licensee's decommissioning cost 3

estimate so that it is difficult to separate out the cost elements that the licensee is responsible for under their NRC license.

PREllMINARY REGULATORY ANALYSIS Alternetives.

Based on the above, the alternatives for the power reactor decommissioning cost requirements may be listed as follows:

(1) Retain the current decommissioning cost estimating methodology; (2) Use the PNL reevaluation results to replace the PWR and BWR

! fur. ding amounts prescribed in the current rule; (3) Same as Alternative (2) but also allow licensees to submit esse-specific decommissioninc cost estimates; (4) In addition to either Alternative (2) or (3) include the cost of the maintenance and storage of the spent fuel that has been permanently removed from the reactor vessel to be a required decommissinning cost; and (5) Require the cost of restoring the site to a green field condition to be a decommissioning cost.

The preferred option, Alternative (3), would not require any action on the part of the licensea because the required level of funding would be reduced frem current values or could, at the licensee's discretion ta based on a site-specific analysis. This would be accomplished at no change in risk to the public's health and safety. Therefore, Alternative (3) would not constitute a backfit.

It should be noted that all options, including the no action alternative, Alternative (1) call for removal of the inflation formula and the reference to NUREG-1307 presented in the rule. The inflation formula contains parameters that have changed with the reevaluation of decommissioning costs. NUREG-1307 provides low-level waste costs. Unfortunately, only the original version of NUREG-1307 is referenced in the rule. Since NUREG-1307 is updated periodically to reflect ' changes in LLW f acility burial costs, the licensee should be able to use the current values in the annual updates of their decommissioning cost estimate. In addition, to make changes in the factors used in the inflation formula would currently require a revision to the regulations. By placing the formula in a regulatory guide, the formula could be updated on a more frequent basis.

The pror and cons of Alternatives (1)-(5) follow.

-Alternative (1): Retain the current decommissioning cost estimating methodology, but remove the inflation formula from the rule. This option, essentially the no action alternative, would leave the constant dollar amounts 4

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for decommissioning: funding alone, as specified in 5 50,15(c)(1)~, but = remove ithe inflation' formula and the reference to_ NUREG-1307.- presented there.

- Pro v e -The current estimates in_the_ rule,_while higher than-the estimates in NUREG/CR-5884 and:6174, could continue to be used for ensuring-

-that adequate funds areLin. place.

Con -

-* The amounts currently used in-the rule do not' reflect an appropriate consideration of the uncertain costs. associated with-LLW disposal, or the current technology and industry practices in i

l decommissioning.

• Current-methodology cannot easily deal with site-specific power

,- reactor situations such as larger inventories of piping, different; degrees of concrete removal, and various packaging and ]'

shipment situations.

• Retaining this= option may:be placing an unnecessary burden on-ratepayers.

Alternative.(2): Use the PNL reevaluation results to: replace the PWR and BWR constant dol.lar funding amounts prescribed in 5 50.75 of, the current rule. As liscussed in Alternative (1), no inflation formula would be included in-the-amended rule. However,- the decommissioning cost would require' annual updating-tand an inflation formula would be included in a regulatory guide.

Pro -

• - Results of the PNL' reevaluation more accurately reflect'the - _ _.

current conditions concerning'~the uncertain costs associated with 1 waste disposal. They also reflect'use of current decommissioning

_ technology and industry practices regarding use of labor.

!*- The PNL reevaluation used reduced' radioactive waste volumes and, depending on the buri.al costs, could result in.a considerable-reduction in decommissioning cost estimates.

Con -

• . The PNL reeva' ation is site-specific for the Trojan reactor facility representing the PWR decommissioning-cost-estimate and the WNP-2 reactor facility for the BWR estimate and may not be fully representative of other rea~c tor situations. The results in the older PNL studies made an attempt to encompass more generic '

situations,.

• .Use'of specific dollar amounts that are based on the reevaluttien

. does not allow for adjustment to -site-specific considerations.

Alternative _ (3): Same as Alternative (2) but also allows for site-specific decommissioning cost estimates-by_the licensee in-addition to the constant 5

dollar amounts specified in 6 50.75, that give the minimum amounts of decommissioning funds for which the licensee must provide assurance.

Acceptable cost-estimate methods will be provided in a regulatory guide to minimize NRC and licensee resources in developing and reviewing the cost estimates. Note that even for-the site-specific cost estimates, annual decommissioning cost updates would be required. __

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• The same arguments in favor of Alternative (2) also apply here.

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• Since there can be considerable variation among the elements that are needed to calculate decommissioning costs, the use of site-specific information would result in more accurate estimates.

• The reevaluation modeling has been translated into computer codes that can easily be used by the NRC staff to evaluate the licensee's required amount of decommissioning funding, and can also be used by licensees to prepare their estimates. These codes, which can be run en a PC, allow for considerable variability of input parameters, allowing the results to more closely represent site-specific decommissioning cost estimates.

• The NRC would minimize resources needed for review of licensees'

ost estimates by including acceptable methods for these cost l

estimates in a regulatory guide and relying on periodic audits to confirm compliance.

• This manner of funding would provide flexibility for licensees to take into account site-specific features such as differences in decommissioning methodology, expected waste volumes, and anticipated labor efforts.

• By allowino licensees to use site-specific data, this option would be more fair to ratepayers.

Con -

• Even through reliance on periodic audits, if a large enough number of licensees elect to use the site-specific funding option for decommissioning cost estimates, additional NRC staff resources will be needed for tha review.

Alternative (4): Require the cost of maintenance and storage of the spent fuel to be a decommissioning cost. Currently, a general requirement for financial assurance for maintenance and storage of spent fuel is covered under 5 50.54(bb), where it is required that such assurance be provided 5 years before expiration of a license or within 2 years following permanent cessation of the reactor. This option would eliminate the 5 50.54(bb) requirement and replace it with the more specific and rigorous requirement in 5 50.75 which would ir.clude the cost of maintenance and storage of the spent fuel as part of the decommissioning cost. This could either be done through a generic fixed cost amount or a case specific estimate.

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Pro -

• Storage and maintenance of spent fuel is a health and safety concern. If decommissioning health and safety concerns require funding assurance, then the cost of maintenance and storage, which is a similar nealth and safety concern should also be considered.

• The costs associated with the maintenance and storage of the spent E fuel can be substantial, depending on how long the fuel must be stored before it is disposed of through shipment to a DOE disposal facility. Presently, DOE is unprepared to receive the spent fuel and even when they can accept the fuel there will be delay caused by the need to accommodate the various reactor facilities which

! now have surplus fuel. Such fuel acceptance will be accomplished l

by DOE on a priority basis. Requiring collection of funds for maintenance and storage of the spent fuel will provide a longer lead time to collect these costs than is currently required, {

resulting in greater financial assurance needs.

Con -

• The current rule already addresses funding provisions for the cost of storage and maintenance of spent fuel as an operating cost, 550.54(bb).

• The length of time that spent fuel woc.d be required to be maintained, based on when the DOE would have an appropriate storage facility, is uncertain. While there is also uncertainty with respect to predicting funding costs for decommissioning, such estimates are more reasonable to make because aside from site-specific adjustments to the estimated cost near the time of "

decommissioning, there is a predictable end point to the process.

It is not apparent when the end of storage and maintenance of spent fuel occurs and therefore, what amount should be specified to provide financial assurance.

Alternative (5): Require the restoration of the site to a green field condition to be a deccmmissioning cost. The current rule has no provision concerning the cost of restoring the site to a green field condition. The position the NRC has taken is that once the residual radioactivity at the reactor facility has been removed to an acceptable level, the facility can be released for unrestricted access and the license terminated. This option would require that the green field cost be included as a decommissioning cost (modifying the current rule definition of decommissioning as stated in 550.2). This would also mean that there would be no choice regarding the restoration of the site to a green field condition before the license could be terminated.

Pro -

• Restoring the site to natural conditions is of concern to the public and could be taken into account through decommissioning cost requirements.

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• Once radioactive contamination of the reacto, facility is removed to a level acceptable to the NRC, there is no longer a health and safety concern preventing the NRC license from being terminated.

• Leaving non-radioactive structures in place may be more cost-effective than removing them. J$

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• Licensees may be able to use existing structures for other power I generation considerations. Also, there may be other uses for these remaining structures.

Decision criteria.

Alternatives (1) and (2): The regulatory analysis for these two alternatives '

has already been considered in the 1988 decommissioning rulemaking (Alternative (2) is similar to Alternative (1) in replacing the constant up-front required decommissioning costs with the revised PNL numoers). The annual inflation formula specified in 5 50.75 to update the up-front decommissioning costs would be removed through amendment in Alternative (1) and not included in Alternative (2). This formula would be included in a q regulatory guide.

Alternative (3): This option gives more flexibility to the licensee than Alternatives (1) or (2) by hllowing the licensee to submit a site-specific decommissioning cost analysis in lieu of the generic values. Alternative (3) may provide savings to the licensee because the required level of decommissioning funding may be reduced. Using a site-specific cost estimate would provide the licensee greater flexibility in dealing with site-specific issues and, perhaps, allow the licensees to be more realistic in their decommissioning cost estimating. It could permit licenseas to use a lower a cost estimate than the generic one provided in the rule. Moreover, licensees would be able to use the PNL code to incorporate site-specific conditions into their cost estimate.

For licensee submittal of site-specific decommissioning cost estimates, the burden on the NRC staff nay be lessened by issuance of a regulatory guide endorsing use the PNL code for their evaluations, using either their own ccde input parameters or licensee supplied ones.

Assuming the licensee elected to use a site-specific cost estimate and used the PNL code, it is estimated that the licensee burden would be about 40 hours4.62963e-4 days <br />0.0111 hours <br />6.613757e-5 weeks <br />1.522e-5 months <br /> to input and run the PNL code. If the licensee were required to provide NRC specified input parameters with their cost estimate, it is estimated that, for those licensee cost estimates that the NRC staff choose to audit, the NRC staff burden to input and run the PNL code would be about 8 hours9.259259e-5 days <br />0.00222 hours <br />1.322751e-5 weeks <br />3.044e-6 months <br />. The requirements for code use and input parameter specifications would be described in a regulatory guide.

Further, the staff intends to ask for comments on the merits of using one or both of the elements of Alternative (3).

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Alternative (4): The requirement for providing financial assurance for the maintenance and storage of spent fuel after the reactor permanently ceases operation is already containad in 5 50.54(bb). Including this cost up-front would place' additional burden on licensees because it would increase the amount of decommissioning funds for which a licensee must provide early financial assurance. Also, the large uncertainty in predicting what an i

appropriate decommissioning cost would be for the maintenance and storage of spent fuel is another factor in not considering this as a viable alternative.

However, as in the current rale regarding financial assurance for power reactor decommissioning, a licensee can provide this assurance through an accumulation of funds in an external reserve acc9unt.

Alternative (5): The requirement for providing up-front funding for restoring the site to green field would be totally new. If such a requirement were codified, then the licensee would have no choice but to demolish all

, structures that had been decontaminated to acceptable residual radioactivity l- . levels regardless of any use one might usefully envisage for them. An estimate of the cost for restoration of the site can certainly be done on a case-specific basis or alternatively on a generic basis. Obviously, a generic cost estimate would be easier to implement and a case-specific estimate might not differ significantly from such a result From the point of view of the )

HRC, approval of a licensee's case-specific estimate would be burdensome. A l compromise might be appropriate where the licensee is given the choice of l complying with a rule-specified minimum amount. It should be noted that the PNL modeling for decommissioning costs did not assume restoration to green field as a starting. objective. Thus, PNL would be required to re-analyze their current decommissioning cost results. Perhaps most co;dpelling against this alternative is the fact that once radioactive contamination of the reactor facility is removed to a level acceptable to the NRC, there is no longer a health and safety concern preventing the NRC license from being terminated. Therefore, it is recommended that such costs not be included as decommissioning costs.

0GC'S LEGAL SUFFICIENCY ANALYSIS DEMONSTRATING THAT P0 KNOWN BASIS EXISTS FOR.

LEGAL OBJECTION As discussed below, several issues must be kept _in mind as the alternatives suggested in this rulemaking plan are pursued. Subject to addressing the issues discussed below as the rule is developed, the alternatives for the rulemakings delineated in this plan are within the authority of the Commission, granted to the agency to protect the public health and safety i through licensing of commercial production and utilization facilities under the Atomic Energy Act of 1954, as amended.

Of primary concern in developing the proposed rule is the question of the backfit justification.for the proposed rule. Since the primary impetas for the rulemaking appears to be the newly developed corporate organizations and newly developed cost estimates associated with decommissioning reactor facilities, the proposal seems to be a prime candidate for justification as changes necessary to maintain " adequate safety". For the alternatives addressing new corporate organizations and new cost estimates, the staff 9

. i should plan to explicitly address the question of " adequate protection of public health and safety" in discussing the applicability of backfit rule.

, The staff should also be aware that, should the alternative to include " green l fields" restoration (not currently recommended) develop into an option to be pursued, a beckfit analysis will have to justify that rulemaking option. It

! is not obvious at this time what significant improvement in public health and l safety will justify the costs associated with # green fields" goals, so such a justification may not be a routine backfit question.

i The staff will need to consider and get appropriate OMB approvals related to l paperwork reduction activities as the financial reporting alternatives are pursued.

As the staff pursues the options related to various corporate organizations, it will be necessary to develop strong justifications for why various reactor owners and operators are being treated differently. These justifications will provide input for the backfit discussions to the extent the justifications are used to explain the basis for concluding that " adequate public health and safety" considerations satisfy backfit questions associated with this rulemaking.

While the above issues must be addressed as the alternatives in this plan are pursued, there is nothing evident at this time to indicate that these legal issues will prevent successful pursuit of the course of action recommended in this rulemaking plan.

AGREEMENT STATE CONSIDERATIONS None. Agreement States do not license power reactors.

SUPPORTING DOCUMENTS For Alternative (3), a regulatory guide on the implementation of the financial assurance methodology would be appropriate.

RESOURCES REQUIRED Resources are included in the current Five Year Plan to complete and implement the rulemaking. The offices involved are RES, NRR, and OGC.

IS IT RECOMMENDED THAT THE EDO ISSUE THE RULE IN ACCORDANCE WITH MANAGEMENT DIRECTIVE 9.17 Yes. This is regarded as a minor amendment providing the licensees with greater flexibility of implementation.

LEAD OFFICE STAFF AND STAFF WITHIN EACH OFFICE WHO WILL BE INVOLVED RES/DR( Thomas Martin Brian Richter /

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NRR Seymour Weiss Anthony Markley/ Robert Wood OGC Stewart Treby Bradley Jones USE OF STEERING GROUP No. These rule amendments are not considered to be either complex or I controversial.

ENHANCED PUBLIC PARTICIPATION No. The impacts of up-front decommissioning funding haie already been accounted for in earlier decommissioning rulemaking. These proposed amendments are considered to be of a minor nature in providing the licensees with 3: eater flexibility of implementation.

SCHEDULE Assumes approval of Rulemaking Plan in July 1995.

Proposed rule to EDO, includes Regulatory Guide January 1996 Public comment period ends April 1996 Final rule to ED0 July 1996 11

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Attachment 3 Rulemaking Plan for Amending Nuclear Power Reactor-Decommissioning Financial Assurance implementation Requirements.

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