ML20212E776
| ML20212E776 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 09/03/1997 |
| From: | Backus R BACKUS, MEYER & SOLOMON |
| To: | Shirley Ann Jackson, The Chairman NRC COMMISSION (OCM) |
| Shared Package | |
| ML20212E774 | List: |
| References | |
| NUDOCS 9711040055 | |
| Download: ML20212E776 (5) | |
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- L W September 3, 1997 Honorable Shirley Jackson Chairman U.S. Nuclear Regulatory Commission Hashington, DC 20555 Ret Great Bay Power Decommissioning Funding Exemption
Dear Chairman Jackson:
This letter is a follow up to my letters to you of July 28 and August 1, expressing concern about the staff decision to grant e l
As one year exemption from the requirements of 10 CFR 5 50.75.
you know, the staff had determined, based upon the inability of Great Bay Power, a non utility twelve percent owner of Seabrook to obtain surety bond or pre-fund its share of the decommissioning obligation, that it would waive the requirement of this regulation.
Although I have had no reply from you, I have now been furnished with the commission's final policy statement on restructuring and deregulation which appeared in the Federal Register on August 19, 1997.
The final policy statement, as published, discusses a possible resolution of the Great Bay Power decommission funding namely, joint and several problem which I had suggested:
liability among the Seabrook joint owners for decommissioning.
The statement includes the following:
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WOW "The NRC recognit.es that co-owners and co-licensees M
generally divide costs and output from their facilities by using a contractually defined, pro rata share standard.
The NRC has implicitly accepted this practice in the past and believes that it should be the gh operative practice, but reserves the right, in highly unusual situations where adequate protection of the o-a:
EE6 public health and safety would be compromised if such action were not taken, to consider imposing joint and en.u 9/8....To ED0/0CC to Prepare Response f or Chairman's Signature...Date due Comm:
Sept 22...Cpy to: Chairman, RF. SECY to Ack... 97-0900 1m _
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!i several liability on co-owners of more than de minimis shares when one or more co-owners have defaulted."
I am pleased to see that the Commission has at least left the door slightly ajar to consider joint and several liability.
I am also certain the Commission would agree that Great Bay Power, as a twelve percent owner, would not be considered a "de minimis" owner.
it is a matter of concern that the possibility On the other hand, imposing joint and several liability appears to be limited to of Obviously, the only a situation where an owner has defaulted.
entire purpose of assuring decommissioning funding is to protect against the possibility of a default, when the problem of addressing a funding shortfall may be much more difficult.
However, my major concern is the Cornission's reluctance tg.,
endorse joint and several liability as a necessary response to the inability of a non utility owner, such as Great Bay Power, to obtain a bond or other external assurance of decommissioning i
funding.
Although the policy statement acknowledges that the NRC has traditionally accepted pro rata liability, rather than joint and several, it offers no basis for its conclusion that this is a good policy in regard to decommissioning funding.
I am aware that, in describing the comments received on the policy statement, most commentors would oppose it, because, obviously, most of those commentors are utilities who do not want to see liability extended beyond their ownership share of a nuclear plant.
Insofar as most obligations are concerned, this may be acceptable.
Decommissioning funding, however, is different.
Funding for decommissioning should be assured prior to the need for the expenditure of funds.
obviously, the time when the need for decommissioning arises is also the time when, by definition, revenues from the facility to pay the expenses will be ending, at least for those nuclear plant owners who are not electric utilities with cost based rate regulation.
The Commission's regulation in 10 CPR 50.75 recognizes this, and the Great Bay situation is exactly the situation which the regulation was intended to address.
As I have previously mentioned, it was Great Bay Power's own predecessor, EUA Power which previously defaulted on its obligations for construction funding under the joint ownership In that situation, certain of the other joint owners agreement.
paid the bills, due to their interest in seeing that the construction schedule not be slowed.
In a decommissioning situation, there will be no such incentive, and therefore the Commission needs to exercise its authority, to make sure that the necessary funding is assured prior to the permanent shutdown of the plant.
If, as now appears, Great Bay is unable to do this on
its own, the commission should exercise its authority to make sure another mechanism, whether joint and several liability, or something else, comes into play.
I do hope you will have time to Despite your busy schedule, respond to this letter and my letters of July 28 and August 1 in the near future.
Very trul
- purs,
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Robert A. Backus RAB/jc cet Governor JeannEJ haheen Congressman Ed Markey Congressman Joe Kennedy George Iverson SAPL other commissioners Ed Hafer, Esq.
Steve Camerino, Esq.
Dick Henry s