ML20217P160

Summary of 980326 Meeting W/Nuclear Energy Institute (NEI) in Rockville,Maryland Re Decommissioning Funding Assurance

ML20217P160
Person / Time
Issue date:	04/03/1998
From:	Wen P NRC (Affiliation Not Assigned)
To:	Essig T NRC (Affiliation Not Assigned)
References
NUDOCS 9804090332
Download: ML20217P160 (8)

Text

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UNITED STATES p

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j NUCLEAR REGULATORY.COMMIS810N WASHINGTON, D.C. 20006 4 001

,t April 3, 1998 w

MEMORANDUM TO: Thomas H. Essig, Acting Chief Gerioric issues and Environmental Projects Branch Division of Reactor Program Management Office of Nuclear Reactor Regulation l

FROM:

Peter C. Wen, Project Manager d C. (h L

Generic issues and Environmenta Projects Branch Division of Reactor Program Management Office of Nuclear Reactor Regulation

SUMMARY

OF MARCH 26,1998, MEETING WITH THE NUCLEAR ENERGY INSTITUTE (NEI) REGARDING DECOMMISSIONING FUNDING ASSURANCE l<

On March 26,1998, a public meeting was held at the U.S. Nuclear Regulatory Commission's (NRC's) offices in Rockville, Maryland, between representatives of the NRC, NEl and other interested parties. Attachment 1 provides a list of attendees at the meeting. Attachment 2 is l=

the presentation material provided by NEl for the meeting.

ll.

The purpose of the meeting was to provide NEl the opportunity to comment further on the

!g NRC's proposed rule on decommissioning funding assurance and to have joint NEl/NRC l

discussion of these comments.

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NEl presented three major issues for discussion:

l l

1, Site-specific estimates for decommissioning funding requirements.

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'2..Altemative' financial tests for power reactors for those licensees using parent or self-

-f guarantees, which would be separate from the tests for non-power reactors in relation to

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. decommissioning funding assurance.

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. 3. Financial qualifications for operation'of nuclear power reactors.

jp k NEl noted that its comments'are'not yet final since it is still analyzing inputs from about 15 l.

L t M licensees regarding decommissioning funding assurance. NEl proposed that the rule on l.

W decommissioning funding assurance be a broad framework for implementation, with few details 9frd/

= W1 and much flexibility. More detailed guidelines for implementation could be provided in NRC ~

M regulatory guides or other documents, which would likely require revision as changes in the 1

~k2 electric power industry continue.' NEl also recommends that the proposed rule on

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. CO, decommissioning funding assurance be combined with a rule to allow site-specific

IE ecommissioning cost estimates that are lower, as well as higher than, the generic formula d

1 Wamounts in.10 CFR 50.75(c).

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.T. Essig April 3, 1998 NEl provided the attached draft flowchart (Attachment 2) showing their proposal for an amended 10 CFR 50.75 regulatory process. NEl's proposed process illustrates their view of how the NRC should allow for more options and flexibility in 10 CFR 50.75 with respect to decommissioning funding assurance. NEl also reiterated several points that they have made in -

previous meetings: (1) NEl continues to acknowledge that decommissioning funding assurance is a significant health and safety issue; (2) NEl continues to seek NRC support for Federal legislation to address restructuring issues as they relate to nuclear power plants; and (3) NEl

- believes that some long-term contracts and accelerated funding may be appropriate as funding assurance mechanisms.

Regarding the first issue cited above, NEl stated that 99 licensees use site-specific estimates for decommissioning funding requirements and 6 use the NRC formulas in 10 CFR 50.75. NEl and NRC discussed several examples of plants which provide a basis for comparing actual with

. estimated decommissioning costs, with Fort St. Vrain and Yankee Rowe being cited as two cases in which actual costs were relatively close to estimated costs.

NEl discussed its concem about needing more information on what a licensee should submit for a site-specific estimate to be acceptable to the NRC staff. NEl is developing a Windows

. software package for site-specific estimates to be made available to the NRC and licensees.

Regarding NEl's concem about information requirements on site-specific estimates, NRC noted that it is developing additional details for use by NEl and licensees.

Regarding the second issue cited above, NEl noted that they have been working with a consultant to develop altemative financial tests and criteria for power reactors to differ from those for non-power reactors in relation to decommissioning funding assurance. NEl contends that, while the current NRC tests in 10 CFR 30 do not burden most companies, there are some exceptions--especially for companies with large decommissioning obligations. NEl is still fine-tuning its altemative tests and expects to discuss these with the NRC by late April.

NEl asked if the NRC might allow extension of the June / July time frame for completing the decommissioning funding rule. The NRC stated that the scheduled completion date probably will need to be maintained. NEl again stated that they think it is important to keep the content of the new rule as flexible as possible.

Regarding the third issue cited above, NEl is concemed about ambiguities regarding financial qualifications for operations. NEl stated that the amount spent by companies on operations is

. not necessarily a good indicator of safety and performance, saying that one company may spend over 20 per cent more than another with the same type reactor but still have poorer performance.. NEl claimed that monitoring a plant's performance is a much better safety indicator than the amount of funds spent and that NRC does not need to introduce an additional regulation regarding financial qualifications for operations. NEl stated that it agrees that a company should have adequate initial availability of funding for oper:nions which the NRC NEl raised questions on various other matters, such as the question of whether the NRC will should approve, but that an NRC financial requirement is not needed for ongoing operations.

T. E ssig '

April 3, 1998 NEl raised questions on various other matters, such as the question of whether the NRC will require certain financial qualifications for license renewal. NRC responded that these would not be required since license renewal does not involve a license transfer. NEl asked whether, within the context of financial qualifications, NRR is cooperating with AEOD regarding the AEOD analysis of the relation of financialindicators to safety. NRC responded that NRR is L

coordinating with AEOD on this matter.

L l

NEl concluded by stating that it expects to retum in April with a proposed example of a rule and j.

an associated guidance document so that NEl and NRC can focus on specific language.

Attachments: As stated i

cc w/att: See next page l

l l

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4

T. ' Essig

~.3 April 3, 1998 NEl raised questions on various other matters, such as the_ question of whether the NRC will require certain financial qualifications for license renewal. NRC responded that these would not.

be required since license renewal does not involve a license transfer. NEl asked whether, within the context of financial qualifications, NRR is cooperating with AEOD regarding the AEOD analysis of the relation of financialindicators to safety. NRC responded that NRR is coordinating with AEOD on this matter.-

NEl concluded by stating that it expects to retum in Aprilivith a proposed example of a rule and

- an associated guidance document so.that NEl and NRC can focus on specific language.

Attachments: As stated _

cc w/att: See next page DISTRIBUTION:' See attached page t

DISTRIBUTION: See attached page

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P@ I SC:PGEk[

OFFICE PM:PGEB PGEB NAME PWen:swpcd AMcKeign[ Rhoc FAkstuhcz -

DATE 4/3 /98 4/7 /98 4/$ /98 4/ ')) /98 OFFICAL OFFICE COPY l

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l 1

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Distribution: Mtg. Summary w/ NEl Re Decommissioning Funding Dated __Apr.iL3 _1998 t

Hard Copy l

Docket File PUBLIC PGEB R/F l

OGC ACRS PWen RWood AMcKeigney EMail SCollins/FMiraglia BSheron RZimmerman JRoe DMatthews TEssig FAkstulewicz MMalloy 1

MDusaniwskys SUttal BRichter GTracey, EDO

/

NRC/NEl MEETING ON DECOMMISSIONING FUNDING ASSURANCE LIST OF ATTENDEES March 26,1998 NAME ORGANIZATION Adrian Heymer NEl Lynntte Hendricks NEl Alan Nelson NEl Richard Myers NEl Don Williams ORNL Janet Ecker Morgan L'ewis & Bockins Sara Weinberg Spiegel & McDiarmid Ray Ng Bechtel Power Corp Robert Neibecker Bechtel Power Corp Tony Callendrello North Atlantic Energy Service Corp Milan Straka NUS Info Paul Bailley ICP Tom Harrison McGraw-Hill Lowell Klosky eel Robert Wood NRC/NRR/DRPM Thomas Essig NRC/NRR/DRPM Melinda Malloy NRC/NRR/DRPM Alex McKeigney NRC/NRR/DRPM Michael Dusaniwskyj NRC/NRR/DRPM Brian Richter NRC/NRR/DRPM l

Susan Uttal NRC/OGC l

l f

DRAFT 1

1 FIGURE 1 CURRENT REGULATORY PROCESS Tvoc of Designated Sinking Fund Funding yes Prepayment Utility in,urance Cost of Service Other surety t#tter ofIntent*

no y

Prepayment Sinking fund with surety lasurance Surety Parent /self guarantor Not Satisfied Annual y

3,gg,,

Prepayment,e Guarantor Financial Tests parent

- per Part 30 stisfied guarantor

• For FederalIJcensees TE8 AMENDED REGULATORY PROCESS (650.75)

(industry Proposal)

Tyne of Desienated Funding Qualified yes Cost of Service Nuclear g

Non-bypassable charge Entity Contract for revenue External Sinking Fund, or Other 80 Reg. Alt **

act satisfied Rev satisfied p

As approved by NRC.

any combination

• of:

Case-by-case submission

• Sinking fund with NRC Review *

• Prepay

• Surety Bond

• Insurance tm.m prww.d ie a res- :=*

• Accelerated funding g,

• Parent /self guarantee e.,.a

Nuclear Energy Institute Project No. 689 cc:

Mr. Ralph Beedle Ms. Lynnette Hendricks, Director

- Senior Vice President Plant Support and Chief Nuclear Officer Nuclear Energy Institute Nuclear Energy Institute Suite 400 Suite 400 1776 i Street, NW 1776 l Street, NW Washington, DC 20006-3708 Washington, DC 20006-3708 Mr. Alex Marion, Director Programs Nuclear Energy Institute Suite 400 1776 i Street, NW Washington, DC 20006-3708 Mr. David Modeen, Director Engineering Nuclear Energy Institute Suite 400 1776 i Street, NW Washington, DC 20006-3708 Mr. Anthony Pietrangelo, Director Licensing i

Nuclear Energy Institute Suite 400 1776 i Street, NW Washington, DC 20006-3708 Mr. Nicholas J. Liparuto, Manager i

Nuclear Safety and Regulatory Activities Nuclear and Advanced Technology Division Westinghouse Electric Corporation P.O. Box 355 Pittsburgh, Pennsylvania 15230

)

Mr. Jim Davis, Director Operations Nuclear Energy Institute Suite 400 1776 i Street, NW i

j Washington, DC 20006-3708 i

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1 UNITED STATES

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NUCLEAR REGULATORY COMMISSION A"

WASHINGTON, D.C. 20565 4001

• • • • • ,o April 3, 1998 MEMORANDUM TO: Thomas H. Essig, Acting Chief Generic issues and Environmental Projects Branch Division of Reactor Program Management Office of Nuclear Reactor Regulation FROM:

Peter C. Wen, Project Manager 2[5C.hM~

Generic issues and Environmenta Projects Branch Division of Reactor Program Management Office of Nuclear Reactor Regulation

SUMMARY

OF MARCH 26,1998, MEETING WITH THE NUCLEAR ENERGY INSTITUTE (NEI) REGARDING DECOMMISSIONING FUNDING ASSURANCE l

l On March 26,1998, a public meeting was held at the U.S. Nuclear Regulatory Commission's l

(NRC's) offices in Rockville, Maryland, between representatives of the NRC, NEl and other interested parties. Attachment 1 provides a list of attendaes at the meeting. Attachment 2 is the presentation material provided by NEl for the meeting.

The purpose of the meeting was to provide NEl the opportunity to comment further on the NRC's proposed rule on decommissioning funding assurance and to have joint NEl/NRC discussion of these comments.

l NEl presented three major issues for discussion:

l

1. Site-specific estimates for decommissioning funding requirements.

2. A!!ernative financial tests for power reactors for those licensees using parent or self-guarantees, which would be separate from the tests for non-power reactors in relation to decommissioning funding assurance.

3. Financial qualifications for operation of nuclear power reactors.

NEl noted that its comments are not yet final since it is still analyzing inputs from about 15 licensees regarding decommissioning funding assurance. NEl proposed that the rule on decommissioning funding assurance be a broad framework for implementation, with few details and much flexibility. More detailed guidelines for implementation could be provided in NRC regulatory guides or other documerits, which would likely require revision as changes in the electric power industry continue. NEl also recommends that the proposed rule on decommissioning funding assurance be combined with a rule to allow site-specific decommissioning cost estimates that are lower, as well as higher than, the generic formula amounts in 10 CFR 50.75(c).

T. Essig 2

April 3, 1998 NEl provided the attached draft flowchart (Attachment 2) showing their proposal for an amended 10 CFR 50.75 regulatory process. NEl's proposed process illustrates their view of how the NRC should allow for more options and flexibility in 10 CFR 50.75 with respect to decommissioning funding assurance. NEl also reiterated several points that they have made in previous meetings: (1) NEl continues to acknowledge that decommissioning funding assurance is a significant health and safety issue; (2) NEl continues to seek NRC support for Federal legislation to address restructuring issues as they relate to nuclear power plants; and (3) NEl believes that some long-term contracts and accelerated funding may be appropriate as funding assurance mechanisms.

Regarding the first issue cited above, NEl stated that 99 licensees use site-specific estimates for decommissioning funding requirements and 6 use the NRC formulas in 10 CFR 50.75. NEl and NRC discussed several examples of plants which provide a basis for comparing actual with estimated decommissioning costs, with Fort St. Vrain and Yankee Rowe being cited as two cases in which actual costs were relatively cbse to estimated costs.

NEl discussed its concern about needing more information on what a licensee should submit for a site-specific estimate to be acceptable to the NRC staff. NEl is developing a Windows software package for site-specific estimates to be made available to the NRC and licensees.

Regarding NEl's concern about information requirements on site-spccific estimates, NRC noted that it is developing additional details for use by NEl and licensees.

Regarding the second issue cited above, NEl noted that they have been working with a consultant to develop alternative financial tests and criteria for power reactors to differ from those for non-power reactors in relatinn to dacommissioning funding assurance. NEl contends that, while the current NRC tests in ; a CFR 30 do not burden most companies, there are some exceptions--especially for companies with large decommissioning obligations. NEl is still line-R tuning its attemative tests and expects to discuss these with the NRC by late April.

l NEl asked if the NRC might allow extension of the June / July time frame for completing the l

decommissioning funding mie. The NRC stated that the scheduled completion date probably l

will need to be maintained. NEl again stated that they think it is important to keep the content l

of the new rule as flexible as possible.

l' l

Regarding the third issue cited above, NEl is concemed about ambiguities regarding financial l

qualifications for operations. NEl stated that the amount spent by companies on operations is l

not ecossarily a gooo indicator of safety and performance, saying that one company may spend aver 20 per cent more than another with the same type reactor but still have poorer

. performar.e. NEl claimed that monitoring a plant's performance is a much better safety indicator than the amount of funds spent and that NRC does not need to introduce an additional i

regulation regarding financial qualifications for operations. NEl stated that it agrees that a company snould have adequate initial availability of funding for operations which the NRC NEl raised quections on various other matters, such as the question of whether the NRC will should approve, but that an NRC financial requirement is not needed for ongoing operations.

)

T._ Essig

-3 April 3, 1998 NEl raised questions on various other matters, such as the question of whether the NRC will

. require certain financial qualifications for license renewal. NRC responded that these would not be required since license renewal does not involve a license transfer.' NEl asked whether, within the context of financial qualifications, NRR is cooperating with AEOD regarding the AEOD analysis of the relation of financialindicators to safety. NRC responded that NRR is coordinating with AEOD on this matter.

NEl concluded by stating that it expects to return in April with a prop 3 sed example of a rule and an associated guidance document so that NEl and NRC can focus on specific language.

Attachments: As stated cc w/att: See next page o

i l

l t

l i

I.

T. Essig

-3 April 3, 1998 NEl raised questions on various other matters, such as the question of whether the NRC will require cedain financial qualifications for license renewal. NRC responded that these would not be required s;nce license renewal does not involve a license transfer. NEl asked whether, within the context of financial qualifications, NRR is cooperating with AEOD regarding the AEOD analysis of the relation of financialindicators to safety. NRC responded that NRR is coordinating with AEOD on this matter.

NEl concluded by stating that it expects to return in April with a proposed example of a rule and an associated guidance document so that NEl and NRC can focus on specific language.

Attachments: As stated cc w/att: See next page DISTRIBUTION: See attached page DISTRIBUTION: See attached page

[/

P@ I SC:PGEkM OFFICE PM:PGEB PGEB NAME PWen:swpc d AMcKeign[ Rfooc FAksthicz l

DATE 4/ $ /98 4/? /98 4/') /98 4/ 3 /98 OFFICAL OFFICE COPY l

l I

l I

4 Distribution: Mtg. Summary w/ NEl Re Decommissioning Funding Dated _._ April 3,_J998 i

Hard Copy Docket File PUBUC PGEB R/F J

OGC i

ACRS P5Nen RWood AMcKeigney EMail j

SCollins/FMiraglia BSheron RZimmerman JRoe DMatthews TEssig FAkstulewicz MMalloy MDusaniwskys SUttal BRichter GTracey, EDO pc o

\\

I NRC/NEl MEETING ON DECOMMISSIONING FUNDING ASSURANCE LIST OF ATTENDEES i

March 26,1998 NAME ORGANIZATION Adrian Heymer NEl Lynntte Hendricks NEl Alan Nelson NEl Richard Myers NEl Don Williams ORNL Janet Ecker Morgan Lewis & Bockins Sara Weinberg Spiegel & McDiarmid Ray Ng Bechtel Power Com Robert Neibecker Bechtel Power Corp Tony Callendrello North Atlantic Energy Service Corp Milan Straka NUS Info Paul Bailley ICP Tom Harrison McGraw-Hill Lowell Klosky eel Robert Wood NRC/NRR/DRPM j

Thomas Essig NRC/NRR/DRPM l

Melinda Malloy NRC/NRR/DRPM Alex McKeigney NRC/NRR/DRPM Michael Dusaniwskyj NRC/NRR/DRPM Brian Richter NRC/NRR/DRPM Susan Uttal NRC/OGC i

l l

DRAFT l

FIGURE 1 CURRENT REGULATORY PROCESS l

l i

Troe of Designated Sinking Fund 1

Fundine yes Prepayment Utility 1,,urance Cost of Service l

Other 3,,,,y g,tter of Intent *

- we "

P,.yment f" 'Aing fund with surety insurance l

Surety Parent /selfguarantor Not Satisfied Annual klfor Prepayment g;

'uarantor Financial Tests parent

-lwr Part M atisfied guarantor

• For Federal Licensees QE8 l

AMENDED REGULATORY PROCESS (550.75)

(industry Proposal) lype of Designated l

Fundine Qualified yes Cost of Service Nuclear g

Non-bypassable charge Entity Contract for revenue Esternal 5 inking Fund, or Other Reg. Alt **

Revised satisfied

=

p As approved by NRC.

ay combination

• of:

Case-by case submission

.SinLing food with NRC Review *

• Prepay

• Surety Bond

• Insurance

• pea m prm m a ess-smar

. Accelerated ten: ling

• Parent'self guarantee s.,.un 1

Nuclear Energy Institute Project No. 689 cc:

. Mr. Ralph Beodle Ms. Lynnette Hendricks, Director Senior Vice President '

Plant Support and Chief Nuclear Officer Nuclear Energy institute Nuclear Energy Institute Suite 400 Suite 400 1776 i Street, NW 1776 l Street, NW Washington, DC 20006-3708 Washington, DC. 20006-3708

' Mr. Alex Marion, Director Programs Nuclear Energy Institute Suite 400

- 1776 l Street, NW Washington, DC 20006-3708 Mr.l David Modeen, Director Engineering Nuclear Energy Institute Suite 400 1776 l Street, NW Washington, DC 20006-3708 Mr. Anthony Pietrangelo, Director Licensing Nuclear Energy institute Suite 400 1776 i Street, NW Washington, DC 20006-3708 Mr. Nicholas J. Lipart.!o, Manager Nuclear Safety and Regulatory Activities Nuclear and Advanced Technology Division l

Westinghouse Electric Corporation i

P.O. Box 355 -

Pittsburgh, Pennsylvania 15230 Mr.-Jim Dravis, Director Operations Nuclear Energy Institute Suite 400

(

1776 i Street, NW

. Washington, DC 20006-3708