ML20212A696
| ML20212A696 | |
| Person / Time | |
|---|---|
| Site: | Portsmouth Gaseous Diffusion Plant, Paducah Gaseous Diffusion Plant |
| Issue date: | 10/21/1997 |
| From: | Rifakes G UNITED STATES ENRICHMENT CORP. (USEC) |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| References | |
| GDP-97-0183, GDP-97-183, NUDOCS 9710240169 | |
| Download: ML20212A696 (10) | |
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United St:l:s Enrichment Corporatn 2 Democr:cy Center 6903 Rockledge Drive Bethesda MD20817 Tel. (3011564 3200 Fax:(301)564 3201 George P. Rifakes Dir. (301) 664-3301 Executive Vice President, Operations rax: 1301) 5713208 October 21.1997 U.S. Nuclear Regulatory Commission SERIA1: GDP 97-0183 Attention: Document Control Desk Washington, D.C. 20555 0001 Paducah Gascous Diffusion Plant (PGDP) l Portsmouth Gascous Diffusion Plant (PORTS)
Docket Nos. 70 7001 and 70-7002 Request for Exemption from Annual Fee Regulations Pursuant to 10 CFR 171.ll(d)
Dear Sir:
In accordance with 10 CFR 171.11(d), the United States Enrichment Corporation (USEC) hereby submits the enclosed request for exemption from the annual fee regulations for the Paducah and Portsmouth Gaseous Diffusion Plants.
For the reasons discussed within, USEC respectfully requests that the NRC grant exemptions from its fiscal year 1997 annual fee mle as follows:
(1) the annual fee of $2,606,000 for the GDPs should b t rede ed to it,D,,000 commensurate with the fee for LEU fuel facilitics, (2) a single fee should be assessed covering both of the GDPs opera'.d by USEC, rather than a separate fee for each facility.
I
/J rM 9710240169 971021
{DR ADOCK 0700700' PDR b
!!!, !!h ll Offices in Livermore. California Paducah. Kentucky Portsmouth, Oh6o Washington, DC
U.S. Nuclear llegulatory Comraission
.' October 21,1997 GDP 97 0183 Page 2 There are no new commitments made in this letter. Any questions related to this subject should be directed to Ms. Lisa Jarriel at (301) 564 3247.
Sincerely, dw-~
Ocorge P. Itifakes Executive Vice l' resident, Operations
Enclosure:
As stated cc (w/o enclosures):
NitC llegion 111 Office NRC llesident inspector PODP NitC llesident inspector - PollTS
f d
e UNITED STATES ENRICilMENT CORPORATION REQUEST FOR EXEMPTION FROM NRC ANNUAL, FEE REGULATIONS PURSUANT TO 10 CFR $ 171.11(d) l.
Introductio11 On February 27,1997, the Nuclear Regulatory Commission (NRC) published a proposed rule establishing annual fees for fiscal year 1997 (62 Fed. Reg 8885). The rule proposed annual fees for each of the gaseous diffusion uranium enrichment plants (GDPs) operated by the United States Enrichment Corporation (USEC) at $2,606,000 per GDP. USEC commented on the proposed rule in a letter dated March 31,1997 and recommended, among other things, that:
(1) the proposed annual fees of $2,606,000 for the GDPs be reduced to $1,276,000, commensurate with the proposed fee for low enriched uranium (LEU) fuel fabrication facilities; and (2) a single fee be assessed covering both of the GDPs operated by USEC, rather than duplicate fees for each GDP facility, in its final fee rule published on May 29,1997 (62 Fed. Reg. 29194), the NRC rejected USEC's comments and maintained the 1997 annual fees at $2,606,000 per GDP facility. As a result, USEC will be required to pay total annual fees for fiscal year 1997 of $5,212,000. The NRC also stated that USEC could submit a request for exemption from the annual fee rule ifit desired.
Therefore, in accordance with 10 CFR 6171.ll(d), USEC hereby requests an exemption from the provisions of the annual fee rule setting fees for the GDPs at $2,606,000 per facility, if granted in its entirety, the effect of the exemption would be an assessment of a single annual fee of $1,276,000, covering both GDPs.
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Jiasis for the Exunption 10 CFR N 171.ll(d) states that the NRC may grant an exemption from the annual fee ifit determines that the fee is not based on "a fair and equitable allocation of the NRC costs... " In addition, the Omnibus Budget Reconciliation Act (OllRA) of 1990 mandates that the NRC assess only those fees which have a reasonable relationship to the cost of providing regulatory services. The relevant section of the statute states:
To the maximum extent practicable, the charges shall have a reasonable relationship to the cost of providing regulatory services and may be based on the Commission's allocation of the resources among licensees or classes oflicensees- (Section 6101(c)(3), Omnibus Budget Reconciliation Act (OllRA) of1990, Pub. L No. 101 508.)
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USl!C Request for liwmption from Enclosute to UDP 971 N3 NRC Anmd l'ee Regulations l' arc 2 of M In detennining whether to grant an exemption under section 171.ll(d), the NRC considers three factors:'
(A) whether there are data specifically indicating that the annual fee will result in a significantly disproportionate allocation of costs to the licensee; (B) whether there is clear and convincing evidence that the budgeted generic costs attributable to the class of licensees are neither directly or indirectly related to the licensee nor explicitly allocated to the licensee by Commission policy decisions; or (C) any other relevant matter that the licensee believes shows that the annual fee was not br. sed l
on a fair and equitable allocation of NRC costs.
As discussed below, the criteria for the issuance of an exemption from the annual fee mie have been met.
A.
The Annual Fee Will Result in a Significantly Disproportionate Allocation of Costs to USEC There are two bases for concluding that the annual fees to be assessed against USEC will result in a "significantly disproportionate allocation of costs" to USEC. First, assessing two separate fees does not recognize that the two GDPs are,in fact, the operational equivalent of a single plant.
Second, the hazards associated with operating the GDPs are comparable to those at LEU fuel facilitics, yet USEC's fees far exceed those set for such facilities. Each of these bases is discussed below.
1.
The GDPs Are the Operational Enuivalent of a Sinule Plant in Allied-Signal v NRC. 988 F.2d 146 (D.C. Cir.1992), the United States Court of Appeals for the District ofColumbia Circuit directed the NRC to grant an exemption under Section 171.11. In that case, the NRC had assessed fees for two LEU fuel fabrication facilities owned by Combustion Engineering, based on the fact that each plant had its own, separate NRC license. The court recognized that both plants were, in the aggregate, part of one process and therefore the operational equivalent of a single plant. Furthermore it concluded that the NRC was not able to point to any greater regulatory costs associated with regulating a second plant. The court held that the NRC had levied a double assessment against the licensee and directed the NRC to grant an exemption from the additional fees related to the second plant.
In pa.rticular, the court stated:
The Commission's own criteria call for an exemption if the licensee can show that "the assessment of the annual fee
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i w[ould] result in a significantly disproportionate allocation of costs to the licensee....Against this (double assessment 1
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These three fetors are " independent considerations" any of w hich may support the granting of an exemption. Albed Sienal inc v NRC,988 F.2d 146,154 at n.5 (D C. Cir.1992)
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i USlic Request for themptkin f orn linclostue to GDP 9b183 NRC Annuoiiec Regulations Page 3 of 8 t
levied against Combustion Engineering) the Commission is i
able to point to almost nothing by way of greater costs...The double burden for Combustion measured against de minimis additional burdens for the Commission, amply overcomes the hurdle established by 10 CFR { 171.11(d).
Allied-Signal 988 F.2d at 154.
l The two GDPs are, like the Combustion Engineering plants, component parts of a single process in this case a process to produce enriched uranium product suitable for i
fabrication nflight water reactor fuel. The GDP located at Paducah, Kentucky, produces feed mi,terial for subsequent processing at the Portsmouth, Ohio GDP. (Paducah SAR at 3.1.3) This feed material enters the cascade feed of the Portsmouth plant as enriched stream assay. (Portsmouth SAR at 3.1.1.1.3) At the Portsmouth GDP, this feed is further enriched and then the tails are sent to Paducah for further stripping. As discussed more fully below, the two GDPs use the same technology and have the same design. Thus, the two plants are operationally the equivalent of one plant and one process.
In AllinLSgnal, the court noted that the two Combustion Engineering plants had separate licennwher than a single license due to " historical chance."2 Allied Signal,989 F. 2d I
at 153, Smsrly,it was not necessary to have two certiGcates of compliance for the GDPs.
Indeed, the Atomic Energy Act, speaks in the singular, to "a certiGcation process" and an
" Annual Application for Certificate of Compliance", and requires USEC to apply "for a certificate of compliance.. " 42 U.S.C. s 2297F(c)(1997). While separate certi0 cates are permissible and raay have been more practical under the circumstances, separate certiGeates were not required as a matter of statute Thus, because the GDPs are operationally equivalent to a sinrje plant, the NRC's assessment of separate fees for both sites imposes a signincantly disproportionate allocation of costs upon USEC.
2.
The GDP liazards are Comparable to LEU Fuel Facilities 13ut the Fees Far Exceed Those imposed on Such Facilities.
The GDPs contain hazards very comparable to those found at LEU fuel fabrication facilities.
At an LEU fuel facility, the predominant chemical hazard is uranium hexafluoride (UF ).
(NUREG-il40 at 2.1.2)
Similarly, at the GDPs, UF is the 6
predominant hazard.
Src, Portsmouth SAR at 5.6.13.2 (noting that "[u]ranium hexanuoride (UF )is the most abundan; hazardous material on site); see also Paducah S AR at 5.613.2 (same). In NUREG 1140, the NRC coacedes that the types of potential accidents at enrichment plants "are similar to those at con eersion plants and fuel fabrication plants " For purposes of setting the annual fees, the GI'Ps should be treated similarly to these comparable facilities.
2 Combustion explamed that it had two hcenses because it had purchasvi a company mth a separate license almost 20 years before the htigation. Allied Sicnal. 988 F. 2d at 153
(El?C Requct for IIxemptic from linchisure to GDP 97183 NRC Annual Tee Regulations l'ere 4 of 8 4
llowever, under the annual fee rule, USEC must pay over fmli times what an LEU fuel licensee pays, and about sight times what a uranium conversion facility pays.' Indeed, even as compared to high enriched uranium (llEU) fuel facilities, USEC will pay twice what those licensees pay. The very substantial differential between the fees assessed against USEC and those assessed against similar NRC licensees is not warranted by any comparable difference in generic, programmatic regulatory costs attributable to NRC regulation of the GDPs, Thus, contrary to OBRA and as discussed in section C, the NRC fees do not bear a " reasonable relationship to the cost of presiding regulatory sersices.. "
This, coupled with the disproponlonate allocation of costs to USEC, warrants granting the reo"ested exemption D.
Iludgeted Generic Costs Attributable to USEC are Neither Directly or Indirectly Related to the Specific Class of Licensee Nor Explicitly Allocated to USEC by Commission Policy Decisions Under section 171.ll(d), an alternative and independently sufricient criterion for granting an exemption is whether there is clear and convincing evidence that:
l-the budgeted generic costs attributable to the class oflicensees are neither directly or indirectly related to the specific class oflicensee nor explicitly allocated to the licensee by Commission policy decisions..10 CFR Q 171.11(d)(2).
USEC is aware of no Commission policy decision that explicitly allocates any budgeted generic t
costs to USEC. As for the relationship between the NRC's budgeted generic costs and USEC's activities, the budgeted generic cost of regulating the two GDPs does not correspond to the actual generic costs associated with regulating the GDPs In particular, such generic costs are not markedly higher because there are two GDPs, as opposed to one.
The NRC has not prosided any basis for concluding that the generic costs of regulating two GDPs are higher than for one plant. Furthermore, the GDPs have a highly uniform design. Both the Paducah and Ponsmouth plants employ the same gaseous difrusion technology. (Portsmouth SAR at 3,1) The UF. molecules are separated according to their isotopic forms by ditrusing them through a repetitive series of porous barriers. hl As the overall design is efTectively the same from plant to plant, the existence of a second plant and a second certificate does not significantly increase the NRC's generic regulatory burden. In effect, the generic, programmatic costs of regulating two plants should be about the same as the costs of regulating one. Notably, the annual fee rule does not explain which generic costs are significantly higher because USEC operates two facilities, and possesses two certificates.
Although uranium com crsion facihties do not use enriched uranium, they do possess substantial quantities of t%.
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USEC Request for themption f om Enciosure to GDP 97183 NRC Annual Fee Regulttions Page 5 of 8 e
Even if there are certain increased costs, there is no basis for concluding that they warrant the dramatic differences in fees between USEC and comparable licensees which have been established by the NRC. For this reason as well, the requested exemption should be granted There Are Other Factors Which Show that the Annual Fee is not 11ased on a Fair and C.
Equitable Allocation of NRC Costs The third anernative and independently sufficient basis for granting an exemption is the existence of any other factor that demonstrates that the annual fee is not based on a fair and equitable allocation of NRC costs.10 CFR Q 171.ll(d)(3). A number of such factors exist in this case:
1.
Weighted Safeguards and Security Factors First, the GDPs employ safety and safeguards measures which are directly comparable to LEU fuel facilities, and, because of the absence of strategic special nuclear material, are much less stringent than those required at ilEU fuel facilities. The NRC considers the relative weighted safety and safeguard factors at a facility when it places a facility in a particular fee category. The methodology used by the NRC was described in its Fiscal 1995 final fee rule and involves: (1) a categorization of facilities into a fee category based upon nuclear material type, enrichment, form, quantity and use/ associated activity; and (2) a determination of the " relative programmatic efTort" associated with the fee category.
This determination of relative programmatic effort is intended to reflect the " safety and safeguards significance" of the licensee's authorized activities.. " 60 Fed. Reg. 32235.
Both the GDPs and the LEU fuel facilities are safeguards category 111 facilities and require considerably less stringent safeguards than their HEU counterparts. The NRC "does not dispute that the GDP. have been certified as low enriched uranium f cilities with corresponding safeguards measures for category til facilities." 62 Fed. Reg. 29197.
Despite this recognition, however, the NRC states that this information is not "the determining factor" in setting fees. The fact that the GDPs are certified as, and possess only, category til special nuclear material should be a very significsnt factor in setting the appropriate fees.* From the NRC's final rulemaking notice, it appears that little or no weight was given to this factor in setting the fees.
2.
Generic Regulatory Programmatic EfTegl The NRC goes on to state that despite the less stringent requirements of USEC's certificates, other factors warrant placing the GDPs in a higher fee category than an LEU fuel facility. In particular, the NRC states that the " scope, depth of coverage, and rigor of generic regulatory programmatic efrort applicable to the GDPs....is approximately equivalent to that of a high enriched fuel fabrication." It also states that "[t]his level of d
Although the D rtsmouth facihty has some llEU on site, the NRC has recogmzed that the o
Department of Energy is solely responsible for regulatinF the 1IEU that exists at the Portsmouth plant. 62 Fed. Reg. 29197.
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USEC Request for Exemption from Enclosure to GDP 97183 NRC AnnuMee Regulations Page 6 of 8 generic effort is the basis for assigning the two GDPs to the high enriched fuel facility
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category.. " M (Emphasis added).
The NRC first states that this increased programmatic effort is necessitated by the fact that the GDPs are " subject to a relatively large number of credible accident:, most of which have multiple initiating events." M USEC is aware of no ar.alysis which shows that the 4
number of potential accidents at the GDPs exceeds that of an LEU fuel facility, or is comparable to that of an IIEU facility. On the contrary, it appears that the number of accidents described in the applicatie i or license of other LEU fuel facilities does compare with the GDPs, with most ranging between 5 to 10 analyzed accident scenarios. The multiple initiating events for the 7 accidents described in the GDP SARs only reflect the comprehensive hazard assessment performed for the GDPs. Other LEU licensees' accident
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analyses do not address such depth and are therefore, not analogous. Indeed, the NRC recognizes that the risks associated with other LEU fuel facilities are not well defined and has initiated rulemaking to require performance of an integrated safety analysis (ISA) to address this concern. The GDPs hve already performed this in-depth analysis.
Secondly, the NRC claims that the " potential onsite and offsite consequences" of these l
accidents are"significantly greater" than for an LEU fuel facility. As described in the GDP SARs, there are few if any credible accidents that could produce any serious ofTsite t
consec,uences at the GDPs. (Paducah SAR at 4.9, Portsmouth SAR at 4.7) Furthermore, tho potential accident scenarios at the GDPs are largely a function of the type of material and enrichment levels at the plants. LEU, in the form of UF, is the same predominant 6
hazard present at both the GDPs and the LEU fuel facilities. HEU facilities, of course, possess more highly enriched materials that pose greater hazards. The NRC has provided no basis for concluding that the potential consequences of accidents at the GDPs are comparable to HEU facilities.
The NRC next states that "the large size and scope of the GDP operations require substantially more effort for the development ofinspection procedures, guidance, and schedules... " In this regard, it should be noted that in initially rejecting Combustion Engineering's exemption request, the NRC stated that "the NRC does not agree....that annual fees should be based on a licensee's size [or] production capacity.. " and that the
" amount of[the NRC's] generic regulatory" costs is not materially affected by a facility's LEU fuel fabrication capacity.
"5 If the relatively small size and capacity of the Combuen Engineering plants did not warrant a reduction in its fees, it is not clear why the relfvely large size of the GDPs, in and ofitself, warrants a fee increase over and above the fees for LEU fuel fabricators.
A rewiew of NRC inspection procedures applicable to the GDPs reveals that almost all the procedures are existing procedures used for the inspection of fuel fabrication facilities.'
8 Letter, James M. Taylor to Richard S. Siudek, December 17,1991.
The remaining seven inspection procedures are tr. lated to the existence of the NRC Resident inspector and derive from existing reactor inspection procedures.
USEC Request for Exemption f om Enclosure to GDP 97-183 NRC Annual Fee Regulations Page 7 of M According to the NRC, the "large size and sr * ! f the GDPs]is also expected to result in a higher number of reportable events that tL E aC Stafimust review." Such an NRC position serves to discourage a conservative approach to reporting events. The NRC assumed regulatory oversight of the GDPs only six months ago, and it is too early to determine whether or not the GDPs will produce a substantially larger number of reportable events than other comparable facilities. Indeed, as USEC continues to gain experience in operating under NRC regulation, it is possible that the number of reportable events will decrease and will remain comparable to that of the LEU fuel facilities. In any event, the NRC's ruiemaking notice does not explain the cost or scope of effort required of the NRC Staff to review reportable events, and i: does not appear that the potential burden involved justifws an effective doubling of fees over and above those assessed against LEU fuel facilities 3.
Other Facten The NRC's rulemaking notice states that the " factors for placing a licensee into a fee category include " nuclear material type, enrichment, form, quantity, and use/ associated l
activity.. " 62 Fed. Reg. 29197, in reciting these factors, the NRC states that "[t]he nuclear material u i activity at the GDPs, authorized by the certificates, does not automatically place the facilities into the high enriched fuel category." 62 Fed. Reg I
29197. There is, however, no further discussion of these factors as a basis for establishing the fees applicable to the GDPs USEC's review of these factors suggests that they provide no basis for treating the GDPs like HEU fuel facilities, rather than 1;ke LEU facilities in assessing annual fees, The GDPs, as well as LEU fuel and HEU fuel facilities, possess and utilize special nuclear material in the form of UFe This similarity among all three types of facili:ies provides no basis for distinguishing among any of them in assessing fees. Furthermore, while the principal "use/ activity" at the GDPs is, of course, uranium enrichment rather than fuel fabrication, this factor provids no basis for treating the GDPs like llEU, as opposed to, LEU fuel facilities. The principal determinant in assessing fees should be the presence of, and need for NRC regulation of HEU.' In this regard, of course, the GDPs are much more akin to LEU fuel facilities.
IIL Conclusinn The GDPs should rnt be assessed separate annual fees, but should instead tm assessed a single fee, commensurate with the reasoning in Allied Siunal as well as the requirements of the OBRA and 10 CFR f 171.ll(d). In addition, under the OBRA and section 171.ll(d), the annual fee assessed should be comparable to that imposed upon LEU fuel facilities rather than on HEU fuel facilities. According; for the reasons discussed above, namely:
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USEC presumes tha.t this is the principal factor used by the NRC in decidmg to assess fees against iIEU fuct fabricators that are more than double those applied to LEU fuel facilities
USEC Request for Exemption from : -i~
Enclosure to GDP 97183
';NRC Annu:1 Fee Regulations Page 8 of 8
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- 1 the two GDPs are the operational equivalent of a single plantt
- LUSEC is appropriatelylicensed as an LEU facility commensurate with the hazards associated with LEU fuel facilities, namely predominantly UF.;
- the GDPs and the LEU fuel facilities are safeguards category III facilities and require considerably less stringent safeguards than their HEU counterparts; and
- the NRC's programmatic effort is not increased in that the number of analyzed accident scenarios for the GDPs is within the range of other LEU fuel facilities and the inspection procedures were pre'-existing;
- USEC respectfully requests that the NRC grant exemptions from its fiscal year 1997 annual fee rule as follows::
(1)-
the annual fee of $2,606,000 for the GDPs should be reduced to $ 1;276,000 commensurate with the fee for LEU fuel facilities; (2) a single fee should be assessed covering both of the GDPs operated by USEC, rather than -
a separate fee for each facility.
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