ML20212G698
| ML20212G698 | |
| Person / Time | |
|---|---|
| Site: | Clinton  |
| Issue date: | 09/20/1999 |
| From: | Rosenblum D AFFILIATION NOT ASSIGNED |
| To: | Vietticook A NRC OFFICE OF THE SECRETARY (SECY) |
| Shared Package | |
| ML20212G680 | List: |
| References | |
| LT, NUDOCS 9909300084 | |
| Download: ML20212G698 (9) | |
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September 20,1999 67 j Annette Vietti-Cook Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Attention: Rulemakings and Adjudications Staff Re:
Illinois Power Company: Notice of Consideration of Approval of Transfer of Facility Operatine License and Issuance of Conformina Amendment and Onnortunity for Hearine - 64 Fed. Rec. 45290 (Aucust 19.1999)
Dear Secretary Vietti Cook:
Illinois Power Company's (IP) application for approval of the transfer of the Clinton Power Station (Clinton) license to AmerGen Energy Company (AmerGen) raises fundamental questions about the structure and safety of the nuclear power industry in a competitive environment. The NRC will determine, in this case, whether the American public should be forced to bear the risk of a consolidated nuclear power industry in which undercapitalized limited liability corporations are entrusted with the enormous responsibility of operating and, eventually, decommissioning a significant portion of this country's nuclear generation plants.
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The Environmental Law and Policy Center of the Midwest (ELPC)' respectfully reqitests that the NRC reject the proposed license transfer and that it unequivocally state that the public's 4
interest in a safe nuclear power industry will not be subordinated to the industry's interest in maximizing profit by limiting potential liability. The proposed license transfer must be rejected because:
(1)
AmerGen has not satisfied the requirement of 10 CFR {50.33(f)(2) that it possesses, or has reasonable assurance of obtaining, the funds necessary to cover the estimated operating costs of Clinton. Specifically, AmerGen has not demonstrated that it has access to sufficient funds to cover the operating costs, or the costs of safe and orderly shutdowns, at Clinton and the other nuclear plants it intends to own and operate in the event of multiple extended outages at those plants.
(2)
AmerGen will be unable to satisfy the requirement of 10 CFR @50.75 that it have sufficient funds to decommission Clinten. Specifically, AmerGen has not demonstrated that it will have sufficient funds to decommission Clinton if decommissioning is required before the end of Clinton's anticipated life and it has not demonstrated how it will funds the cost of maintaining its spent nuclear fuel until the Department of Energy takes control.
If AmerGen wants the opportunity to make a profit on Clinton, as well as Three Mile Island and other plants that it is in the process of purchasing at rock bottom prices, it must commit the money necessary to ensure that the plants are operated and
' ELPC is a Chicago-based regional public interer cigmimon woiing to reduce threats to environrnental quality and public health by promoting sustainable energy resuuices.
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decommissioned safely. AmerGen must be required to ensure that sufficient funds are s
available to maintain and operate all of the plants it owns, even if most of them are shut down for a significant period of time. AmerGen must be required to ensure that sufficient money is available for decommissioning of the plants ifits decommissioning funds are inadequate. AmerGen has not yet made the commitments necessary to protect the public.
ELPC requests that the NRC reject the license transfer application unless AmerGen: (1) provides reasonable assurance that it can obtain the funds necessary to cover the estimated operating costs, including the costs of orderly shutdown, of Clinton and the other nuclear plants it intends to own and operate; and (2) provides reasonable assurance that it can obtain the funds necessary to decommission Clinton, including decommissioning before the end of Clinton's anticipated life and the costs of maintaining Clinton's spent nuclear fuel until the Department of Energy takes control of that fuel.
AmerGen Has Not Demonstrated that It Possesses, or Has Reasonable Assurance of Obtainine. the Funds Necessary to Cover Estimated Operatine Costs AmerGen has apparently prepared a Projected Income Statement for the period January 2000 through December 2004 that indicates that its operating revenues will cover its operating costs. "Apparently", since all of essential information in the Projected Income Statement has been redacted from the version that is made available to the public as Enclosure 6. The Projected Income Statement apparently relies on the income from Clinton capacity sales and energy sales which will come from IP pursuant to the Power Purchase Agreement. To state the obvious, the Power Purchue Agreement provides no basis for assuming that operating revenues will cover AmerGen's operating costs after the expiration of the agreement 3
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Even if AmerGen is able to cover its operating costs with operating revenues when Clinton is operating, it has not demonstrated that it will be able to cover its operating costs if l
Clinton does not operate. This is not a hypothetical scenario, as the NRC knows from Clinton's extraordinarily poor operating history.
Incredibly, AmerGen proposes that the NRC accept a commitment from PECO Energy and British Energy to make $110 million available to cover notjust the operating costs of Clinton, but the costs of Clinton and all ofits other plants. AmerGen is effectively asking the NRC for authorization to overstretch its finances and to put the public at risk for years. The $110 million is supposed to cover the operating costs of Three Mile Island 1, Nine-Mile Point 1, part of the operating costs of N;ue-Mile Point 2 and Clinton. To put that $110 million number in perspective, the application states that the average operating costs for Clinton over a six-month period is approximately $80 million and that AmerGen had access to $65 millionjust for Three Mile Island 1. Application at 16.
The rhetoric in the application is good, stating that "AmerGen's financial goalifications must be evaluated in light ofits planned operation of multiple units at multiple sites." M The rhetoric recognizes the critically important point that as AnierGen purchases more nuclear plants its financial exposure and need for funds increases dramatically. AmerGen's actions do not correspond to its rhetoric. AmerGen's financial qualifications fail miserably when evaluated in light of all ofits proposed purchases. Despite the assertion in the application that the $110 million provides reasonable assurance that AmerGen will have sufficient funds for an extended outage at Clinton (E at 17), the application acknowledges that the $110 million would only be sufficient to fund a "six-month outage at CPS and a simultaneous three-month outage at TMl-1, i
or a six-month outage at TMI-l and a simultaneous four-month outage at CPS." E 4
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. Curiously, the application claims that the $110 million is conservative, "because t
AmerGen contemplates operating several sites and revenues would be available from operations at other sites, such as Nine Mile Point, to fund operating and maintenance expentcs during an o
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outage." E Of course, as demonstrated by the history of extended outages in Illinois over the j
_ past few years, the application's approach is anything but conservative. AmerGen must be required, a' a minimum, to provide access to funds sufficient to cover operating costs ifg!1 ofits t
plants'have simultaneous outages.
Even if history does not repeat itself, AmerGen must be prepared to cover the operating t
costs necessary to assure the safe and orderly shutdown of all four nuclear plants. There is no i
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avoiding the reality that eventually all of the plants will shutdown. The costs of orderly j
shutdown will be very significant, since it will take AmerGen months to continue to safely maintain each ofits plants until it can certify to the NRC that the fuel has been permanently removed from the reactor vessel. AmerGen provides no assurance that such funds will be available.
Illinois Power's ratepayers would have provided access to such funds under regulation.
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The public should not be required to accept less protectionjust because of the move to competition. Competition will provide AmerGen with the opportunity to make more profit than i
l a regulated utility. AmerGen should, at a minimum, be required to provide the same protection j
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that would have existed under regulation.
I 10 CFR 50.33(f)(2) requires "that the applicant shall submit information that demonstrates the applicant possesses or has reasonable assurance of obtaining the funds necessary to cover estimated operation costs for the period of the license." The application does 1
not satisfy the requirements of 10 CFR 50.33(f)(2) and cannot legally be accepted in its current 5
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form. The NRC should reject the license transfer ap;ilication unless AmerGen explicitly l
provides reasonable assurance that it can obtain the funds necessary to cover the operating costs l
and orderly shutdown of Clinton and each of the other nuclear plants that it intends to own and l
operate. AmerGen should be required to provide financial instruments demonstrating commitments from PECO Energy and British Energy to provide the necessary funding.
)
l AmerGen Has Not Demonstrated that it Will Have Sufficient Funds to Decommission Clinton 1
AmerGen has made no attempt to demonstrate that it would have sufficient funds to I
decommission Clinton if Clinton must be decommissioned before the end ofits anticipated life.
j In addition, AmerGen has made no attempt to demonstrate how it would fund the cost of maintaining its spent nuclear fuel until the United States Department of Energy takes control.
The license transfer application merely attempts to demonstrate that AmerGen will have i
decommissioning funds available that exceed the current NRC formula amount for the basic radiological decommissioning of Clinton.
There is, of course, no assurance that Clinton and the other nuclear plants AmerGen intends to own will operate through the end of their anticipated lives. The recent history of the United States nuclear power industry demonstrates that, in addition to the risk of another Three l
Mile Island 2, in a competitive environment some nuclear plants will not survive. AmerGen, l
however, has provided no indication how it could fund decommissioning in the event Clinton 1
must be decommissioned prematurely. Premature decommissioning would require far more money than AmerGen currently has available, since AmerGen assumes that it will accumulate the necessary funds through eamings on its decommissioning funds during the anticipated lifetime of Clinton. If Clinton must be decommissioned prematurely, AmerGen would not have 6
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the opportunity to accumulate that money. AmerGen would not be able to simply wait to decommission Clinton until it had accumulated the money, since it would be incurring significant costs to maintain Clinton during any such waiting period. Similarly, AmerGen would have to continue to maintain the costs ofits spent nuclear fuel until the United States Department of Energy took control of the fuel.
AmerGen is not a utility and will not be able to ask ratepayers for the funds necessary to l
cover early decommissioning and the costs of maintaining spent nuclear fuel. AmerGen is, d
apparently, asking the NRC to simply trust that it will make sufficient funds available to l
decommission its nuclear plants r1nd maintain its spent nuclear fuel as long as necessary.
1 AmerGen will be unable to meet the decommissioning requirements set forth in
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10 CFR 50.75 if Clinton is shutdown before the end ofits anticipated life. The NRC should reject the license transfer application unless AmerGen provides reasonable assurance that it can obtain the funds necessary to decommission Clinton, including decommissioning before the end l
of Clinton's anticipated life and the costs of maintaining Clinton's spent nuclear fuel. The NRC l
should require that AmerGen, through PECO Energy and British Energy, explicitly assume all l
i liability for decommissioning costs and the costs of maintaicing spent nuclear fuel. AmerGen 1
should be required to provide financial instruments demonstrating commitments from PECO Energy and British Energy to provide the necessary funding.
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Conclusion ELPC respectfully requests that the NRC reject the application for license transfer for the above-stated reasons, unless AmerGen agrees to provide the above-described financial instrmnents demonstrating its ability to fund the operation and decor.unissioning of Clinton, etfully submitted, A
Daniel W. Rosenblum Senior Attorney l
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Federal Register /Vol. 64, No? 160/Tliursuay, August 19,1999/ Notices' 9
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[' G' COMMISSION' i' ' A FNUCLEANREGULATORY '
with respect to this' specific license NN amendment application. In light of the request or interve'ntion petition, u
pggf generic determination reflected in to designating the issues for any hearing ' O CFR 2.1315, no public comments with that will be held and designating the j
tillriole Power Company; Notice of -
respect to significant hazards Presiding Officer. A notice granting a
, Consideration of Approvalof Transfer considerations are being solicited.
hearing will be published in the Federal 4
of Facility Operating License and n twithstanding the general comment Register and aerved on the parties to the l
lesuance of Conforming Amendment and Opportunity for Hearing Procedures contained in to CFR 50.91.
hearing.
The filmg of requests for hearing and As an alternative to requests for The U.S. Nuclear Regulatory petitions for leave to intervene, and hearing and petitions to intervene, by written comments with regard to the September 20,1999, persons may Commission (the Commission)is licens9 transfer a submit written comments regarding the considering issuance of an order under discussed below.pplication, are license transfer application, as provided 10 CFR 50.80 approving the transfer of.
. By September 8,1999, any person forin 10 CFR 2.1305. The Commission Fccility Operating License No. NPF-62 i
for the Clinton Power Station (CPS)whoseintorest may be affected by the will consider and, if appropriate, currently hsid byIllinois Power Commission's action on the application respond to these comments, but such l
Company (IP, or the licensee). The.
may request a hearing. and, if not the comments will not otherwise constitute applicants, may petition forleave t partof the decisional record. Comments transfer would be to AmerGen Energy intervene in a heanng procedure on the should be submitted to the Secretary, Company, LLC (AmerGen). The I
Commission is also considering Commission s action. Requests for a U.S. Nuclear Regulatory Commission, cm:nding the license for administrative hearing and petitions for leave t Washington, DC 20555-0001, Attention:
I purposes to reflect the proposed intervene should be filed in accordance Rulemakings and Adjudications Staff, transfer.
with the Commission a rules of practice and should cite the publication date and Undar the proposed transfer, set forth in Subpart M,
- Pubhc page number of this Federal Register AmuGen would be authorized to Notification, Availability of Documents n uca 5
possess, useiand operate CPS under and Records,11 earing Requests and For further details with respect to this
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essentially the same conditions and Procedures for 11 earings on License g
authorizations included in the existing Transfer Applications," of 10 CFR Part action, sm the application dated July 23, t,
1999, available for public inspection at 1
- 2. In particular, such re;uests must the Commission s Public Document p
license. In addition, no physical chenges will be made to CPS as a result comply with the requirements set forth Room, the Gelman Building,2120 L a
of the proposed transfer, and there will in 10 CFR 2.1306, and should address Street, NW., Washington, DC, and at the c.
be no significant changes in the day-to-the considerations contained in 10 CFR1 cal public document room located at p
day operations of CPS. Antitrust 2.1308(a). Untimely requests and p
conditions of the CPS license' ~are petitions may be denied, as provided in the Vespasian Warner Public Library 310 N. Quincy Street, Clinton, IL 61727 proposed to be' deleted because, among 10 CFR 2.1308(b), unless good cause for Dated at Rockville, Maryland, this 12th day
- othrr things,they apply to IP which will failure to file on time is established. Inof August 1999.
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to no Iruger ne the licensee, addition, an untimely request or Pursuant to 10 CFR 50.80, no license, petition should address the factors that For the Nuclear Regulatory Commission.
If or e ny right themunder, shall be the Commission will also consider,in Jon B. Hopkins, bi traf sferred, directly or indirectly, reviewing untimely requests or Senior Project Manager, Section 2, Project thr ugh transfer of control of the petitions, set forth in 10 CFR Directomte m, Division ofLicensing Projects Id
'iconse, unleer the Commission shall 2.1308(b)(1)-(2).
Management, Office of Nuclear Reactor
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Regulation.
Ei giva its consent in writing. The~
Requests for a hearing and petitions A
Commission will approve an for leas e to intervene should be served(FR Doc. 99-21532 Filed s-18-99; Di45 aml application for the transfer of a license, upon John Lamberski, counsel for IP, at sumo coom noew if thiCommission determines that the Troutman Sanders LLP,600 Peachtree
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g" Street, N.E., suite 5200, NationsBank proposed transferee is qualified to hold Plaza, Atlanta,Geor NUCLEAR REGULATORY th3 license, and that the transfer is 404-885-3360; fax: gia 30308-2216 (tel: COMMISSION 404-962-6610; e-otherwise consistent with applicable mail:
provizions of law, regulations, and 01d:rs issned by the Commission john.!amberski@troutmansanders.com)
[ Docket No. 40-75801-fb pursuant thereto; and Kevin P. Gallen, counsel for B: fore issuance of the progosed AmerGen, at Morgan, Lewis & Boclius Finding of No Significant impact for conforming license amendment, the LLP,1800 M Street, NW, Washington, Proposed Decommissioning Activity at Commission will have made findings DC 20036-5869 (tel: 202-467-7462; fax: the Fanstoel Facility in Muskogee, OK 202-467-7176; e-mail:
required by the Atomic Energy Act of kpgallen@mlb.com); the General The U.S. Nuclear Regulatory be 1954, es amended (the Act) and the Commission's regulations.
Counsel, U.S. Nuclear Regulatory' Commission (NRC)is considering an m
As provided in to CFR 2.1315, unless Commission, Washington, DC 20555-amendment to Source Matenal License othstwise determined by the 0001 (e-mail address for filings No. SMB-911 for approval of a
' Commission with regard to a specific regarding license transfer cases only:
decommissioning plan to remediato for unrestricted use under the Site application, the Commission has OGCLTENflC gov); and the Secretary of Decommissioning Management Plan determined that any amendment to the the Commission, U. S. Nuclear ISDMP) Action Plan (57 FR 13389) of f"" >
license of a utilization facility which Regulatory Commission, Washington, the Eastern Property Area of the does no more than conform the licenseD.C.,20555-0001, Attention:
to reflect the transfer action involves no Rulemakings and Adjudications Staff,in Fansteel, Inc., (Fanstoel) facility P"
significant hazards consideration. No accordance with to CFR 2.1313.
Muskogee, Oklahoma. This area covers d"'
appmximately 56.6 acres of the site und i*
contrary determination has been made The Commission will issue a notice or is defined in Revised Figure 3 of for order granting or denying a hearing Fansteel's submittal dated July 16,1999.
"*