ML20235J850

Requests Partial Exemption from FY88 Annual Fee Requirements,Per 10CFR171.11,based on Plant Small Size & Old Age

ML20235J850
Person / Time
Site:	Big Rock Point File:Consumers Energy icon.png
Issue date:	09/11/1987
From:	Berry K CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.)
To:	NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
References
NUDOCS 8710020129
Download: ML20235J850 (3)

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( Consumers Power Kenneth W Berry MENSNU Director AIKHNEAN'S PROGRES5 Nuclear Daming General Ofhces: 1945 West Parnalf Road, Jackson, MI 49201 (517) 788 1636 September 11, 1987 -

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Executive Director for Operations US Nuclear Regulatory Commission

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g Washington, DC 20555 N DOCKET 50-155 - LICENSE DPR BIG ROCK POINT PLANT -

10CFR171 FISCAL YEAR 1988 ANNUAL FEE EXEMPTION REQUEST Pursuant to 10CFR171.11, for the reasons set forth herein, Consumer 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 annual 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 13 years of plant operation remaining. Because of Big Rock Point's age, many of the generic costs underlying the annual 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 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 $936,000 in annual license fees incrementally increases Big Rock Point's cost of electrical production by approximately 2.16 mills per

! kilowatt-hour. This surcharge would be in addition to our current average i 10CFR170 fees of approximately $166,000 per year. An increase of this magnitude is unreasonable for a generating plant of this small size. The impact of this surcharge is approximately 12 times as great as it is for a typical modern vintage plant. Even without increased license fees, recent industry analyses have shown Big Rock Point's operating costs on a kilowatt-hour basis to be among the highest in the industry. ,

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. Nuc1' ear Regulatory Commission 2

f Big Rock Point Plant l Annual Fee Exemption Request September 11, 1987

4. Because our currently approved electric rates do not reflect the annual fee, it can 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 problems have created in the state regulatory arena. Also, interveners in a recent fuel and purchased power cost recovery proceeding have contended that Big Rock Point should not be allowed to remain in the rate base due to high operating and maintenance costs of the facility.

S. Big Rock Point's small size and rural location is less of a potential l

hazard to public health and safety than most other commercial nuclear generating plants. Plant age, size and location have also been recognized by the NRC in other regulatory contexts. These include the emergency 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.

7. The NRC previously granted a partial fee exemption for Big Rock Point for fiscal year 1987 in the amount of $81,000 by letter dated April 15, 1987.

The basis for granting this exemption request essentially remains unchanged from those considered in the previously granted exemption.

8. Comparison of the previously approved fee of $81,000 to the $950,000 fee previously charged newer, larger reactors equates to approximately 8.5%.

For Big Rock Point, nothing has changed to warrant adjustment to this percentage.

Because Big Rock Point's kilowatt-hour output is small and the plant is old, the cost-benefit of the new fee should be recognized. As stated in the Federal Register notice which published the annual fee 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 10CFR170 fee structure.

In conclusion, notwithstanding the uncertainty of proposed congressional action on NRC fee collection, Consumer Power Company requests that a partial fee exemption be granted which requires Big Rock Point to pay not more than l 8.5% of the $936,000 value published in the Federal Register on August 28, '

1987 (58FR32626) or $79,560 for fiscal year 1988 annual fees.

Pursuant to the requirements of 10CFR171.19 Consumers Power Company does intend to remit the first quarterly installment of $234,000 when invoiced, 1

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• . Nticfear Regulatory Commission 3 Big Rock Point Plant Annual Fee Exemption Request September 11, 1987 unless we are informed otherwise. Subsequent to NRC action on this exemption request and, if granted, a refund of the difference is hereby requested.

fh Kenneth W Berry Director, Nuclear Licensing i

CC Director, Administration and Resource Management, NRC  !

Document Control Desk, Washington DC, NRC i

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