ML20215N451
| ML20215N451 | |
| Person / Time | |
|---|---|
| Site: | La Crosse File:Dairyland Power Cooperative icon.png |
| Issue date: | 10/28/1986 |
| From: | Taylor J DAIRYLAND POWER COOPERATIVE |
| To: | Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 8611050426 | |
| Download: ML20215N451 (6) | |
Text
._,4 1
D 'DA/RYLAND hh[a/[ COOPERA7/VE
- P O. BOX 817
- 2615 EAST AVE.SO.
- LA (608) 788-4000-JAMES W. TAYLOR General Manager October 28, 1986 Director, Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, D.C.
20555 RE: Dairyland Power Cooperative La Crosse Boiling Water Reactor (LACBWR)
Provisional Operating License Number DPR-45 Application for Exemption from Annual
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Fees Imposed Under 10 CFR Part 171
Dear Sir:
Pursuant to 10 CFR Part 171.11, Dairyland Power Cooperative (DPC), hereby respectfully requests that the Nuclear Regulatory Commission (the " Commission")
exempt the La Crosse Boiling Water Reactor (LACBWR), owned and operated by DPC, from -the annual fee imposed under 10 CFR Part 171 on nuclear power reactors. For the reasons set forth below, DPC believes that it is entitled to this exemption under the criteria set forth in 10 CFR Part 171.11 and that it would be in the public interest to grant this exemption request.
10 CFR Part 171, which became effective on October 20, 1986, imposes an annual fee of $950,000 on each power reactor licensed to operate as of October 1,1986, in addition to the licensing fees already being imposed under 10 CFR Part 170. In adopting this new rule, the commission specifically indicated that it was "not the intent of the Commission to promulgate a fee schedule that could have the effect of imposing fees at such a level that the owners of the handful of small, older reactors would find it in their best economic interest to shut their reactors down."
The Commission indicated that it would consider exemption requests submitted in connection with such reactors and take the following factors into consideration in reviewing such exemption requests:
a.
Age of the reactor.
b.
Size of the reactor, c.
Number of customers in rate base.
d.
Net increase in kWh cost for each customer directly related to the annual fee assessed under this Part.
e.
Any other relevant matter' which the licensee believes justifies the reduction of the annual fee. 10 CFR Part 171.11.
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Director, Nuchar Reactor Regulation Page 2 October 28, 1986 The Commission also indicated that it would grant exemption relief under Part 171.11 if the licensee could demonstrate on the basis of these factors that NRC's regulatory costs for the plant in question are reduced and that the benefits bestowed on the licensee are below that of other plant reactors.
This exemption request will address each of the factors set forth in Part 171.11, and demonstrate (1) that DPC is entitled to favorable consideration under all of these factors, and (2) that the fee requirements of Part 171 should be waived in full with respect to LACBWR or alternatively reduced to-an annual fee of no more than $55,000, a.
Age of the Reactor - LACBWR has been in operation for 17 years.
It is one of the four oldest nuclear power reactors subject to the provisions of Part 171. LACBWR was originally built as a demonstration nuclear plant for the Atomic Energy Commission (AEC) under the Cooperative Power Reactor Development Program.
LACBWR went on line in November 1969, and in 1973 title to LACBWR was transferred from the AEC to DPC. LACBWR is a mature plant with a proven record of operating experience and the Commission is no longer incurring the types of " start-up" regulatory costs associated with new reactor designs and systems.
Moreover, LACBWR is an Allis-Chalmers BWR and DPC receives little, if any, direct benefit from the " generic" regulatory costs associated with Commission-sponsored research activities involving advanced reactor designs and PWR's and BWR's designed by manufacturers of the reactors utilized by other nuclear utilities.
These research costs constitute more than half of the regulatory costs that the Commission is attempting to recover under Part 171.
In addition, because DPC has made significant upgrades to LACBWR over the past ten years in order to meet current regulatory requirements, it is not expected that extensive modifications, like those required in the past, will be undertaken for the remainder of plant life which inight require intensive internal review actions by the NRC.
b.
Size of the Reactor - LACBWR is' the smallest nuclear power reactor subject to the provisions of Part 171. The vast-majority of U.S.
power reactors range in size from 500 to 1200 MW electric. At a rated capacity of 50 MW electric and 165 MW thermal, LACBWR is less than 10% of the size of approximately 90% of all other U.S. power reactors and it is less than 70% of the size of the next largest reactor subject to the new fee schedule. Charging the same fee for LACBWR that is charged to reactors that generate more than 20 times as much power as LACBWR imposes an unfair and disproportionate burden on DPC vis-a-vis 'other nuclear utilities. The flat feo does i
not accurately reflect the lower regulatory costs attributable to the smaller physical size of LACBWR and the reduced number and complexity of systems and components in the plant. Again, there are few, if any, benefits bestowed upon DPC from generic NRC regulatory programs tF at benefit all other nuclear utilities because they involve General Electric, Westinghouse, Babcock & Wilcox, and Combustion Engineering reactors which are an order of magnitude larger in size and more complex than LACBWR.
Director, Nuclear Reactor Regulation Page 3 October 28, 1986 c.
Number of Customers in Rate Base - DPC's service area includes parts of four states in the upper north central region of the U.S.
(i.e. Wisconsin, Minnesota, Iowa and Illinois). DPC, as a generation and transmission cooperative, provides electric service to 29 distribution cooperatives which are members of DPC and which in turn provide electric service to 170,000 customero in this region.
DPC's customer base is considerably smaller than the customer base served by other nuclear utilities, particularly those serving major metropolitan areas, and also considerably less diversified. DPC's customer base is primarily rural in character and has already been under severe economic strain due to the problems besetting the U.S. farm economy in recent years. DPC's system has essentially been in a zero growth mode over the past several years. These new fees would further aggravate the financial problems confronting DPC's member cooperatives and their customers. The additional fees imposed under Part 171 would also place a disproportionato share of the Commission's regulatory costs on DPC's relatively small customer base that receives the benefit of only 50 MW of power production from nuclear energy compared with the customer bases of other nuclear utilities which (1) are much larger, (2) receive the benefit of much more power from nuclear energy, and (3) are in a much better position to absorb the additional costs associated with these fees.
d.
Net Increase in kWh Cost - LACBWR currently has the highest unit power costs of any base load plant on the DPC system. During 1985, the total production costs for power generated at LACBWR were in excess of $0.054 per kWh compared to total production costs of less than $0.023 per kWh from DPC's most efficient coal-fired unit and average revenues of $0.046 per kWh from DPC's member cooperatives. The addition of a $950,000 annual fee under Part 171 would result in approximately a 5.4% increase in LACBWR's unit production costs, or 3 mills more per kWh, which would further increase the cost differential between LACBWR costs, the average costs of its coal-fired units and average system revenues. The increase in cost per kWh at LACBWR will be approximately 15-20 times greater than the increase that will be experienced at other nuclear utilities operating larger reactors where total production costs are already much higher. An increase of this magnitude will have a significant adverse impact on DPC's member cooperatives and customers. LACBWR contributes less than 8.5% of DPC's installed base load generating capacity, but it does reduce DPC's dependence on coal as the primary fuel source for base load plants.
However, the proposed ten-fold cost increase for regulatory services under Part 171, versus the average fees paid under 10 CFR Part 170 in recent years, will - unless waived or substantially reduced by the Commission -- drastically impact the economics associated with the operation of LACBWR.
'l
Director, Nuclear Reactor Regulation Page 4 October 28, 1986 e.
Other Relevant Matters - As noted previously, LACBWR was constructed.by the AEC under the Cooperative Power Reactor Development Program - a government-sponsored program designed to stimulate the development of the nuclear power industry and encourage widespread participation in this development by demonstrating that small-scale nuclear power plants could be economically operated. DPC participated in LACBWR at the urging of the AEC 'and became subject to licensing pursuant to the contractual arrangements with the AEC transferring ownership of the plant and operational responsibilities for the plant to DPC. The imposition of unduly burdensome and disproportionate fees on LACBWR at this juncture could have an adverse impact on the willingness of other utilities to participate in similar government-sponsored energy projects in the future. In addition, LACBWR is unique in many respects. It is the only nuclear power reactor in the United States that is entirely owned and operated by a rural electric generation and transmission cooperative. The continued operation of LACBWR enables DPC to lessen its dependence on coal-fired generating capacity and maintain a more diversified fuel mix for its base load plants. However, the impact of the new fees on the economics associated with continued operation of LACBWR could ultimately force DPC to increase its dependence on coal-fired capacity. Such a development would not be in the best interest of DPC's member cooperatives or the consuming public.
To DPC's knowledge, every other fee imposed upon nuclear utilities by regulatory agencies, other government entities, and private trade associations and industry groups to administer their programs and recover their costs is based upon the number and size of the reactors involved, the gross revenues or total power production of the utility involved, or the total production of the nuclear power plants involved (e.g. the DOE High Level Waste Fund, charges imposed by the Wisconsin Public Service Commission, EEI, EPRI, INPO, etc.).
Yet, the new rule would impose the same $950,000 fee on LACBWR-that is imposed on a typical large reactor such as the 1250 MWe Grand Gulf reactor. Based on the relative size of these two reactors, DPC should only be required to pay 4% of the amount paid for a larger reactor or $38,000. DPC recognizes that the NRC's l
goal is to recover $96 million this year under 10 CFR Part 171.
This $96 million amounts to approximately $1,111 per MWe of installed nuclear generating capacity in the United States. At 50 MWe, the fee imposed on LACBWR would only be around $55,000 if reactor size were the criteria utilized to assess fees. Absent this i
exemption, DPC will, therefore, be required to pay over 17 times the amount that it would otherwise be required to pay under the generally-accepted fee criteria utilized throughout the government and industry.
Director, Nuclear Reactor Regulations Page 5 October 28, 1986 In summary, DPC believes that its situation is unique in many. respects, in light of LACBWR's size, DPC's status as a rural electric cooperative, the size and character of the DPC system and customer base, and the origins of DPC's participation in the nuclear industry. DPC believes that it is. entitled to favorable consideration under all five factors set forth in 10 CFR Part 171.11. DPC should simply not be subjected to the same annual fee imposed i
on other much larger utilities that operate nuclear plants generating far more power than LACBWR and serving much larger and more diverse customer bases which receive far more benefits from nuclear power and which are far more capable of absorbing the fees imposed under Part 171.
For all the foregoing reasons, DPC therefore respectfully requests that the' Commission grant DPC a permanent exemption from the annual fees j
imposed under 10 CFR Part 171 and waive these fees altogether insofar as j
they apply to DPC or, in the alternative, reduce these fees to no more. than
$55,000 per year.
DPC also respectfully requests that DPC not. be required to make the
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first quarterly installment of any payment due under the new rule with 1
respect to LACBWR until ten (10) days after the issuance of a final decision by the Commission on this exemption request.
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Sincerely, 1
i JWT/RES/cls J
l 2
STATE OF WISCONSIN }
}
COUNTY OF'LA CROSSE }
' Personally came before me this N day of
,1986, the above
{
named James W. Taylor to me known to be the person who executed the foregoing instrument and acknowledged the same.
1
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Ann J. Mal (rt' i
Notary Public La Crosse County, Wisconsin My Commission Expires 02/21/88
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s DISTRIBUTION FOR EXEMPTION FROM ANNUAL FEES (dist per R. Diggs)
IMPOSED UNDER 10 CFR PART 171 11/04/86 LTR ENCL V, Stello, EDO *,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
C. J. Holloway,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
J. Roe, EDO,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
P. Norry, ADM,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
P. B i rd, AD M,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 1 1
P. Howe, ADM,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
R Scroggins, RM,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
L. Hiller, RM,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
G. Johnson, RM,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
W. C, Parler, GC.................................. 1 1
T. Ro th s chi l d, OG C,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
R. Fonner, OGC,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
R. Smith, OGC,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
H. Denton, NRR,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
J. Funches, NRR,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,... 1 1
L S o l an d e r, NRR,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 1 1
H. Thompson, NRR,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
G Lear, PAD-1,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
E. McKenna, PAD-1
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
R. Diggs, LFMS,,,,,,,,,,,,,,,,,,,,
,,,,,,,,,,,,,,,3 3
Project Manager, DocketFiles,,,,,,,,,,,,,,,,,,[
@ g n...... 1 1
,,,,,,,,,,,,,,,,,,,,,1 1
NRC PDR,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
LPDR,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
H. Smith, NRR,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,1 1
27 27 1
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