ML20213C805

Requests Exemption from Annual Fee Requirements of 10CFR171.15.Increase in Licensing Fees Unreasonable & Overly Burdensome Due to Tenuous Economic Viability of Facility. Facility Has Only 14 of 40 Yrs of Operation Left

ML20213C805
Person / Time
Site:	Big Rock Point File:Consumers Energy icon.png
Issue date:	11/07/1986
From:	Berry K CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.)
To:	NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
References
NUDOCS 8611100286
Download: ML20213C805 (3)

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N av Deensing MMNSAF5 PNSERE55 General Offices: 1945 West Parnali Road. Jackson, MI 49201 e (517) 788-1636 November 7, 1986 Executive Director for Operations US Nuclear Regulatory Commission Washington, DC 20555 DOCKET 50-155 - LICENSE DPR BIG ROCK POINT PLANT -

10CFR171 ANNUAL FEE EXEMPTI('N REQUEST Pursuant to 10CFR171.ll, for the reasons set forth herein, Consumers Power Company requests an exemption from the annual fee requirements of 10CFR171.15 for Big Rock Point. As stated in the Federal Register notice which published the new fee rule, the NRC recognizes the problem that some licensees of smaller reactors may have in paying substantially increased fees and therefore has provided for fee exemptions.

In support of this request, Consumers Power Company submits the following:

1. Big Rock Point is the holder of NRC License No. DPR-6, dated May 1, 1964.

The plant is.the oldest operating General Electric boiling water reactor and one of the oldest operating commercial nuclear generating plants in the United States. Big Rock Point's operating license expires on May 31, 2000. This leaves less than 14 years of plant operation remaining.

Because of Big Rock Point's age, many of the generic costs underlying the new fee rule are not relevant to Big Rock Point.'

2. In addition to being one of the oldest commercial reactors, Big Rock Point is the second smallest operating commercial nuclear generating plant in the United States. Big Rock Point's output is 69 MWe net. This output is more than one order of magnitude less than the average modern vintage commercial generating plant.

3. A surcharge of $950,000 in annual license fees would incrementally increase Big Rock Point's cost of electrical production.by approximately 2.5 mills per kilowatt-hour. This surcharge would be in addition to our current average 10CFR170 fees of approximately $130,000 per year. An 8611100286 861107 DR ADOCK 05000155 PDR \)

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Executive Director for. Operations 2 Big Rock Point Plant-10CFR171 Annual' Fee Exemption Request November 7, 1986 L increase of this magnitude is unreasonable L for a generating plart of this small size. The impact of this surcharge would be approximately 12 times as great as it will~be for a typical modern vintage plant. Even without

. increased license fees,'recent industry analyses have shown Big. Rock 1 Point's operating costs on a kilowatt-hour basis to be among the highest

, in the industry.

4. Because.'our current electric rates do not reflect the new fee,'it could not be passed on to our customers without filing a new rate case with the Michigan Public Service . Commission. At the present time, the regulatory climate within the state is volatile, and the outcome of any new rate case filing would be unpredictable. This is due in part to Consumers Power Company's recent financial problems and the visibility these l problems have' created in.the state regulatory arena. Also, intervenors in a fuel and purchased power cost recovery proceeding are presently

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contending that Big Rock Point should not be allowed to remain in the rate base due to high operating-and maintenance costs of the facility, r i

5. Big Rock Point's small size and rural location is less of a potential hazard to public health and safety than most other commercial nuclear generating plants. Plant age, size and location have also been recog--

nized by the NRC in other regulatory contexts. These include the emer-gency planning zone, insurance and backfitting rules.

6. -Over-the last several years, Big Rock Point performance has been above

average in SALP ratings, capacity factor and availability. This has

resulted in less NRC regulatory effort'being spent on Big Rock Point..

! Because Big Rock Point's kilowatt-hour output is small and the plant is old,

! the cost-benefit of the now fee-should be recognized. ~ As stated in tne Federal Register notice which published the new rule, it is'not the intent of- -

the NRC to promulgate a fee schedule at such a level that smaller, older

reactors would' find it in their best economic interest to shut down. We feel

! that the majority of the regulatory costs and benefit gains associated with Big Rock Point would reasonably be collected under the existing 10CFR170 fee j structure.

I In conclusion, Consumers Power Company contends that because of the tenuous

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economic viability of Big Rock Point, any increase in licensing fees is r unreasonable and overly burdensome. We request that an exemption be granted i that requires Big Rock Point to pay not more than $27,000 in annual-licensing i fees under 10CFR171.. This amount is based on the fact that Big Rock. Point is 69/850 the size of the average plant and has only 14/40 years of operation 4 left [(69/850) x (14/40)'x ($950,000) = $27,000]. The average plant size was ,

calculated from NUREG 0020, June 1986 data [85,190 Mwe/100 plants a 850 average MWe/ plant]. We believe that establishing an annual fee on the basis

of plant size and age is appropriate justification.

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9 Executive Director for Operations 3 Big Rock Point Plant 10CFR171 Annual Fee Exemption Request November 7, 1986 To reduce.the administrative costs of filing an annual exemption request, we also request the exemption be made permanent. Pursuant to.NRC Invoice F0085 dated November 19, 1986, a full quarterly installment of $237,500 will be remitted for Big Rock Point. Subsequent to NRC action on this exemption request, and if the exemption is granted, a refund of the difference is hereby requested.

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Kenneth W Berry Director, Nuclear Licensing CC Director, Nuclear Reactor Regulation Administrator, Region III, USNRC NRC Resident Inspector - Big Rock Point OC1086-0176-NLO2