ML20236S435
| ML20236S435 | |
| Person / Time | |
|---|---|
| Site: | Reed College |
| Issue date: | 07/20/1998 |
| From: | Mendonca M NRC (Affiliation Not Assigned) |
| To: | Frantz S REED COLLEGE, PORTLAND, OR |
| References | |
| NUDOCS 9807240339 | |
| Download: ML20236S435 (13) | |
Text
l, : - -,
July 20, 1998 i Mr. Stephen G. Frantz, Director Reed Reactor Facility Reed College 3203 SE Woodstock Blvd.
Portland, Oregon 97202
SUBJECT:
FINANCIAL ASSURANCE FOR DECOMMISSIONING
Dear Mr. Frantz:
Enclosed please find a copy of a recently approved regulation in the Federal Regists, (63 FR 29535, June 1,1998), which permits colleges and universities to self-guarantee i decommissioning costs if certain criteria are met. The criteria are on page 29542 under Appendix E to Part 30, items I, llA, and llc. Also, the requirements in item Ill, "Self- !
Guarantee" needs to be complied with as needed.
If you decide to self-guarantee, please provide which criterion you are using and the j background to support this criterion. Also, a corporate officer has to provide the information required in Appendix E to Part 30, item lilD, of the new regulation.
~ If you have any questions, please call me at (301) 415-1128.
Sincerely, ORIGINAL SIGNED BY: Theodore Michaels for Marvin M. Mendonca, Sr. Project Manager Non-Power Reactors and Decommissioning Project Directorate j Divisica of Reactor Program Management !
Office of Nuclear Reactor Regulation )'
Docket No. 50 288
Enclosure:
As stated / ;
cc: w\ enclosure See next page T /
DISTRIBUTION:
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- TMichaels ton MMendoc SWeiss
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OFFICIAL RECORD COPY DOCUMENT NAME: G:\SECY\MICHAELS\REEDFINA.WPD 9807240339 980720 7 PDR ADOCK 05000208 i P PM ;
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_._____-._____.__________,_________.__.___________._______________q i
pt@ 40 04
[ -rk UNITED STATES s
2 j NUCLEAR REGULATORY COMMISSION WASHINoToN, o.C. 20666-4001
?g . . . . . j/ July 20, 1998 Mr. Stephen G. Frantz, Director 3
Reed Reactor Facility Reed College
.3203 SE Woodstock Blvd.
Portland, Oregon 97202 1
SUBJECT:
FINANCIAL ASSURANCE FOR DECOMMISSIONING
Dear Mr. Frantz:
I l
Enclosed please find a copy of a recently approved regulation in the Federal Reaister, !
(63 FR 29535, June 1,1998), which permits colleges and universities to self guarantee decommissioning costs if certain criteria are met. The criteria are on page 29542 under Appendix E to Part 30, items I, llA, and llc. Also, the requirements in Item lli, "Self-Guarantee" needs to be complied with as needed.
If you decide to self-guarantee, please provide which criterion you are using and the background to support this criterion. Also, a corporate officer has to provide the information required in Appendix E to Part 30, item lilD, of the new regulation.
If you have any questions, please call me at (301) 415-1128. i Sincerely, lk {+-
Marvin M. Mendonca, Sr. Project Manager Non-Power Reactors and Decommissioning Project Directorate Division of Reactor Program Management Office of Nuclear Reactor Regulation Docket No. 50-288
Enclosure:
As stated cc: w/ enclosure See next page l
Reed College Docket No. 50-288 cc:
Mayor of City of Portland 1220 Southwest 5th Avenue Portland, Oregon 97204 1
David Stewart-Smith, Administrator Oregon Office of Energy Energy Resources Division 625 Marion Street,'NE Salem, Oregon 97310 -
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e__-.________________________________ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - . . _ _ __ . _ - _ . . - - - - _ _ _ _ _ _ _ _ _ _ . . . - - - - _ . _ . _ _ _ _ _ _ _ .
Feder-1 Register /Vol. 63; No.104/Mondry, Juns 1,1998/ Rules and Regulations 29535
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Committee's recommendation, and ~ Materials Safety and Safeguards, U.S. Background' ^
Otherinformation,it is found that- Nuclear Regulatory Commission. - . On December 29,1993 (58 FR 687'26).-
'=>. '
finalizing the interim final rule, without Washington, DC 20555-0001, telephone as corrected on Janu 12,1994 (59 FR change, as published in the Federal (301)415-6203, e-mail cwpenrc. gov. 1618), the NRC publ ed a notice of Register (63 FR 11585: March 10,1998) SUPPLEMENTARY INFORMaTION:, . T final rulemaking that allows financially g will tend to effectuate the declared ' Licensees subject to 10 CFR parts 30, strong corporations with A or better 3 policy of the Act. , , 40,70, and 72, whose operations, bond ratings the option of using self-ID List of Subjects in 7 CFR Part 989 involve the use of substantial amounts . guarantee as a mechanism for .
$ of nuclear matenals, and those sub}ect complying with the regulations on '
=> Grapes, Marketing'agmements. -
to to CFR Part 50 who are applicants ;- fmancial assurana for Raisins, Reporting and recordkeeping - for, or holders o' f, operating licenses for - decommissioning. Self-guarantee w'as requirements. production or utilization facilities must added to the list of financial assurance -
PART 989-RAISBNS PRODUCED Provide Anancial assurance for - ', . mechanisms as a cost-saving option for '
5 FROM GRAPES GROWN IN decommisaloning funding by selecung . licensees that are able to meet the CALIFORNIA -
fran a variety M mechanisins: surety . , stringent financial test. . . . .,
bond or letter of credit, pmpayment, u The NRC's decision to add self-Accordir$ gly, the interim final rule insurance, an external sinking fund ' . guarantee to the, list of approved cmending 7 CFR part 989 which was coupled with a surety or insuranced . - financial assurance mechaniams for y published at 63 FR 11585 on March 10, parent company guarantee for licensees qualified licensees came in response to l 1998,is adopted as a final rule without that have a qualifying corporate parent, a petition for rulemaking Sled by -
change _ and, for certain financially strong - , General Electric and Westinghouse l (PRM-30-59, Notice of receipt Dated: May 26,1998. . CorPwations, self-guarantee. A .
Reliert C. Kaemey, . statement ofintent regarding obtaining Published September 25,1991 (56 FR funds to satisfy decommissioning . :., . 48445)). The petition presented a case Deputy Administmtor, Fruit and Vegetable for allowing self-guarantee as a cost-progmm, obligations may be used by some
- licensees that are governmental ent'ities saving option for corporate licensees .
[FR Doc. 98-14422 Filed 5-29-98: 8:45 aml
"" (for example, public universities whose that any able tti pass a stringent financial
/ '
charter provides for a direct link to the test.- ,. . . .
p State Government). , i .. -
Subsequent to the December 29,1993 To date, self guarantee has not baien- final rule, the Commission initiated a EAR REWWM available to nonprofit licensees such as . . study to determine whether criteria '.
CMM -
^ hospitals and universities, or to for. could be developed and applied by NRC 10 CFR Parte 30,40,50,70, and 72 Profit licensees who do not issue bonds, fw nonprofit licensees and non-bond-D- issuing cmnmercial licensees to um self-because the financial test for self. ,
RIN 3180-AFG4 guarantee uses the ruting of the bonds guarantee while snaintaining the
> Self-Guarantes of r. . - __=...m,_ issued by th,e limnsee as one measure the of required availabilitylevel of confidence regarding of decommissioning g,g , gnancg,g ,,,,,,c , 33 , .,
Funding by Nonprofitand Non pond- ability to fund decomml==ioning. ,. funds when needed, h study, I'*"N **'. b NRCis extending the use of self - " Analysis of Potential Self-Guarantae AceNcY:NuclerRegulatory ' ?
- Tests for Demonstrating Financial -
Commluion. .- , ,
barantee, previously limitedtoto. bond- Assurance by Non rofit Co uing industrialcorporations, and.
vorsities d
' ' ^
additional categories of quell 5ed - y ACDON: Final mie.- g 3 propdate
SUMMARY
- & Nuclear Regulatory liconeses. By selecting a[-guarantee, Bonds," NUREGICR-6514 8 Uune 1997),
this financial criteria for sel identified a variety of financial criteria Commission is amending its regulations extension can be made without to allow addidonal materials licensees that could be applied to additional Jeopardizing the present high level of ,
and non-electric utility reactor licen==" financial assurance thatthe ca mies d Hoensees agarding the use b who meet certain Anancial criteria to decommissioning obligation requires. .
da f-guarantee /me ErsanHal crheda self-guarantee funding for . - Allowing qualified nonproSt and non- - in this rule were selected by the NRC
_- decommisaloning. Certain commactal bond-issuing lir=n- to self-guarantee . based on iniminadon in &ls mpato corporate licensees who issue bonds as* will reduce the costs of complying with Poblic f%===nts en the Proposed Rule 7 Pmsently allowed to self guarantee NRC financial assurance requirements ~ "Ihe NRC ublished a notice of funding if they meet stringent Snancial for those who most the speci6ed '
7 criteria. ' mis rule allows nonprofit .. . criteria. - '+*u" -ev - f6$FR posed ru omaking 23394).In response toon thisApril 30',1997, licensees, such as colleges, universities. -
>gr- ..
7 notice,is comments were received: 2' "
y, and hospitals, as well as some - .rar ant to se cra so.rs(exit a d cate unity == usty the '
from States,6 from coll'8 and1
., commerciallimnases who do not issue fundias
)
bonds, to self-guarantee funding .- a' Pair =.no with a aannal enkins'f=nd. . _ . uniorshion,3,fran associadons,3 from D
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provided they most similarly stringent' @m'nNba's"n'i b"ib't'ac- ssinskmphsmp.ww e .
- y. financial criteria. Allowing additional n oo ,,(emposed adamskuse m addrun n enact. copwe m evehbne a cument rum imm qualified licensees to use self-guarantee -
- -- fundias momence insnes abe u.s. cmen at Prtauas omen. P.O. som reduces licensee costs while providing - " tad =lth auctric sitairy sonructurias (me sross,wohinsiaa.ocso on-esas(idepbme -
ad'9uste assurance that funds for i 8'L"'"'' ^"""" ""'3"3""'** 8" -
(2o2) s12-224ek or han &e Neumal Tactukal
. rs.rn-mia.nanlag Nuclear Power Reactore- as F"R information Service be writins NTIS at s2ss Past g decommissioning will be available erses.sepismber so.toerk As ofthi. Royal Road. SprinsBeld. VA 2:181. Copia are when needed. -
proposed rule. tbs NRC is cons ammading its available ter or copying lar a ime from EPPECTIVE DATE: July 1,1998* ' deantuan of *dectric utulty" and clartfying the s. the NRC Public ment Room at :12o t. StmW distincuan between flamar4at assurance NW., washington. DC: the PDR's maillag address is POR PURTHER INFORMATION CONTAci:Dr. m.chaaume appucable to power re caer ti~~ unti stop 1.t-a. washinston. Dc zosss. coo 1:
Clark Prichard, Office of Nuclear and non-power reacter limas ==s. ist phone (2o2) s24-sars: fax tros) as4-3243.
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29536 Federal Regist:r/Vcl. 63. No.104/ Monday, Jun31,1998/Rults end Regulations e4 s
private corporations,1 from a hospital, reasonably assume that such a college or extrapolate these extraordinary returns an ? 1 from the United States university can be allowed to self- into the future and to budget ,
Enrichment Corporation.The guarantee for the costs of . endowment spending accordingly. -
commenters all supported the extensios ,, decommissioning because it possesses However, in this context it is instructive
. ciself-guarantee to qualified nonprofit sufficient financial strength to obtain to note that for a representative group of and non-bond-issuing commercial the necessary funds when they are institutions, the avera e annual real ,
licensees. Although some commenters needed. .
return aAer spending or the 10-year urged NRC to adopt tige proposed rule Even assuming the prem.ise of the period ended June 30,1994, is 4.1 as written, most favored some type of ~ commenter, NRC does not believe that percent, but for the 20 years ended June change to the financial criteria. reducing the multiple to 15, as the 30,1994, it is 0.9 percent." (1994 commenter sugg,ts, is desirable. NACUBO Endowment Study, National
- 2. Finonciol Criterio for Colleges citd Although a real rate of return of 3 Council of College and University Umversities . percent may appear low under the - Business Officers.1995, p. 4)
The financiallest criteria ' proposed for ' market conditions prevailing during Therefore,the NACUBO study colleges and universities were an A or certain periods, there is a substantial recommends strongly that institutions bettir bond rating or, for those not ^ body of empirical evidence indicating keep their spending from endowment having a bond rating, unrestricted that it is a reasonable assumption. If a below the rate proposed by the endrwment of at least $50'million or 30 licensee who has been relying on a self- commenter. The report states that:
times projected decommissioning costs. guarantee is required to fully fund a Historical precedent indicates that a fund whichever was greater.There were no trust fund for decommissioning in the invested ap ximately so percent in .
comments regarding the A or better year before the beginning of domestic anEforeign stocks. 30 percent in bond rating, but several commenters decommissioning, and the licensee fixed income, and to percent in various other objected to the non-bond criteria as too relies on earnings from endowment to esset classes inevitably experiences recurring conservative. ' create the trust,it is the annual earnings periods of absolute decline in market values Comment: A commenter stated that of the endowment for the year over 3 years. Such a decline would trigger a '
the selected multiple of 30 times immediately prior to the reductim in spend for en institution decommissioning costs is excessively decommissioning that must equal the sticking to a licy a spending a fixed.
conservative. NRC's basis for the 30 required amount. NRC has reviewed the 7,"rmTot me val fl I multiple is that an amount of money 30 information provided in Ibbotson yew 1994, the average endowment spending times decommissioning costs invested Associates, Stocks, Bonds, Bills, and rate nported by responding institutions is 6.0 at 3 percent would ytaid an annual inflation 1995 Yearbook,1995, which percent. On avwege, the smallest am unt sufBcient to fund those costs. published a summary of market results endowments (525 miillon and less) spent
% commenter said that it should not for the 69-year period from 1926 to 1995 more (7.2 percent) than the largest (4.5 be difBcult to,obtain secure investments , for five categories ofinvestments: small percent), and public institutions spent more yielding 6 perconti thus an appropriate company stocks,large company stocks, (6.6 percentl than private institutions (5.7 multiple would be 15 based on , long-term government bonds, long-term percent) * *
- With the sole exception of the investment yield. .
corporate bonds, and intermediate-term 4.5 pennt spent by the largwt univwsities, Response: NRC's objective in selecting rament bonds. - >
them spending ratw are not compatible with financial criteria was to provide a level m et institutions
- stated intenti n to preserve On a year by-year basis,less risky.
(f financial assurance risk similar to the investments, such as treasury bills, financial assurance risk in the existing showed the most frequent positive h dQblei t.
possible) for the exceptionally well-managed self-guarantee. However, for colleges - returns but their annual returns also institution to spend s.o percent of a 3. year and universities that do not issue bonds,' were re,latively low. Riskier investments moving everage of endowment market values, lack of appropriate data on default risk showed a broad distribution of returns, and still preserve purchasing power.
made a Anancial assurance risk analysis from very good to very poor. Ovnall, However, it is courting disaster to spend at '
impossible.For these licensees NRC howmr, with the exception of small en annual rate of e.0 percent towaru the tail .
deliberatelychose Anancialcriteria .' and lary corepany stocks,the average , end of a long bull market. (1994 NACtJBO which are conservative. inflation-adjusted earnings (geometric Endowment Study,1995, p. 5)
. NRC did state in the preamble to the mean) for these categories of Based on these considerations, the '
Proposed rule, at 62 FR 32296, that investments wwe less than 3 percent. in NRC continues to believe that a
"(the multiple of 30 has been chosen a number of years, earnings for stocks relatively conservative criterion, such as because this would mean that any level also were less than 3 percent. Thus, real the 30 times requirement,is a of decommissioning costs could be - ' inmtment returns over a one. year reasonable criterion for the covered by the annual return on an period may rot even match conservative decommissioning self-guarantee test for endowment invested at 3 percent." earnings assumptions. colleges and universities. The NRC does !
However,it is important to note that The study of endowment sponsored ' not accept the commenter's NRC was not assuming (1) that ,' by the National Council of College and recommendation to adopt a
- institutions willIn fact finance University Business OfBcers (NACUBO) substantially less stringent criterion. I decommissioning out of endowments. - published in 1995 also emphasized a Comment: A commenter objected to I (2) that endowments can be expected in concern for this earnings variability in - the requirement that unrestricted 5 all circumstances to grow at a rate of et its analysis of college and university endowment be at least $50 million or at I least 3 percent annuallyi or (3) that endowment investment. First, least 30 times the decommissioning cost M institutions can be expected to NACUBO's study noted that current estimate, whichever is greater. The .
reallocate up to 3 percent of their hi 6h rates of return cannot be sicpected requirement should be compliance with f
g spending from endowments in a one- - to continue indefinitely. "At a time either the $50 million figure or the 30
' g year period. Rather, the criterion was when many public and private times decommissioning cost estimate.
selected to serve as a measure of the institutions are searching for ways to (
but not whichever is greater.
cverall financial strength of the bridge the gap between revenues and' Response: As previously stated, NRC institution, indicating that NRC can expenditures,it is tempting to chose conservative financial criteria for f i
. 4 1
is Federal Register /V::1. 63, No.104/ Monday, Jun31,1998/Rul:s cnd Regulations non-bond-issuing colleges and._ _
~
295]
t universities, aimed at assuring the activities are not completed within a .up front even though dec financial viability of a licensee qualified single year. For this reason NRC's . , conservative. It appears to reflect an t-to self-guarantee. This is the only criteria for determining whether & expectation that the decommissioning l.
requirement that would apply to non- '
will take a short time whereas a realistic licensee should be allowed to self '
whereas non-bond-issuing hospitals orbond-1ssuing colleges . NRC should and universities.,
consider a multiple of 30 - or guara commercial licensees would be subject must consider the possibi!!ty that the limnase will be required to fully fund less to be appropriate, to rnultiple financial ratios as financial - -
decommissioning in the -
Re8Ponene mquirmnent dat l tests. !:is designed to capture two ;
immediately prior to the inning of , hospital operating revenues be at least -
measures of financial viability:(t) decommissioning activities. De l
overall financial strength and (2) . 100 times decommissioning costs is a -
financial strength relative to size of licensee would fund a standby trust i.f cnterim est NRCis pmposing to use to decommissioning obligation.He ~ M eihr (1) the licensee no longer determine whether a licensee has f overall financial stre ofan qualifies to use b self-guarantee t'o ,. sufHelent financial strength to self ,
Institution is heavily ependent on the provide financi' al assurance for guarantee. However, a potential
- size ofits unrestrict endowment. decommissioning. even ifit was not yet consequence of self-guaranteeing could Specific ability to fund required to conduct decommissioning, . .be the need to fully fund a trust fund in decommissioning expenses is measured or (2) a licensee using's self-guarantee ; - a short period of time if the hcensee by the ratio of unrestricted endowment is required to carry out . C*ases to be capable of passing the self-i to decommissioning costs. A hada! decommissioning. NRC currently'does guarantee test orif decommluioning '
test based only on ratio to not allow licensees to consider the . must be carried out. As discussed above, .
decorumissioning cost might allo.w an impact of earnings during h "psyouga the operating revenues multiple I institution without adequate financial period (h period during which funds criterion does not reflect an strength to pass ifits decommissi ning are being expended from the Anandal expectatlan macerning the ength of assurance standby trustio pay for time durin size of the unrestricted endowmentcosts were Iow. A test based will only on the ocx:ur.g decommissioning)in which Therefore,NRC decommissioning does not calc l
might be inadequate for those amount of funds that must be set aalde acmpt this recommendation.
lastitutions with the highest for decommissioning. Therefore, the .
decommissioning costs. Both threshold NRC disagrees with the commenter's Comment: A commenter hund'the requirements are needed to provide suggestion that the expected duration of rationale that requires hospitals to meet assurance that an institution can meet decommissioning activities should - all four financial ration tests unclear.- I decommissioning obligations when . apply to the determination of the . - his commenterbelieved that using I sp repriatemultiple. only the operating revenues / "
. decommisaloning costs ratio would
'nt: A commenter stated that NRC's rationale for a multiple of 30 that [ based n th m inati of i Provide reasonable assurana im lies that decommissioning costs are investment yield of 6 percent and ' . *glity'to provide decommissioning p d frominvestment investment yields over 2 to 3 u "" "I year period. However, it is yields more over a 1* rather than 1 year] the multip on l =I ratios test for R*8Ponse:The RaanA j realistic to assume that any factor (bel redumd from 30 to 10 with hospitals in the rule was carefully ample conservatism."
decommissioning activities.whent * .
selected to provide a level of financial Aesponse:For the reasons stated in 11nancial assurana arran8ements are assurance risk similar to the financial -
involved will ulre considerable responses to thp preceding commeots, . assurance risk in the existing self ,
cmrdination wi mgulators and NRC does not accept this .. -
guarantee. The four ratios in financial services involving 2 or 3 years. recommendation.m, ;, ,,
combination represent the financial test to ctmplete. This consideration also .that best achieves this goal. A financial l
- 2. Financial Criterid for Hospitafs' '
implies that the appropriate multiple test using just one of these mtios would should be 15 rather than 30.
Response:NRC recognizes that hospitals was an A or better bond rating. The financial test c decommissioning may occur over a or, for hospitals not having a bond would not provide an adequate level of-pee dIon sLI.an on? year. n o financial assurance. Using only the ratio
'reting, a financial ratios test consisting ' of operating revenues to .
. multi le o 30 was chosen without of(a) theLiquidity--
following:(cur. . .. . decommissioning costs would - I to how many years it would take rent assets and to decommission a facility. The depreciation fund divided by cunent - completely ignore such determinants of liabilities) greater than or equal to 2.55. financial stren g e ey factori Indebtedness' and gth as liquidity' . The profitability appropriate multiple. However.g a an to expendit vid bas ess financial test uned for non-bond-issuing following this line of reasoning. _4_ revenues) gmater than or equal to 0.04. c mmerciallicenseesincludes several- ,
stretching out the time length of (c) Leverage-(Long term debt divided ratios, not just one. The non-bond decommissioning would imply ever by net fixed assets) less than or equal to - financial test forcolleges and decreasing multi les. 0'67. universities does use a single ratio, but NRC's objectiv is to ensure that (d) Operating Revenues at least too it is the ratio of unrestricted endowment decommissioning will take place on a . times decommissioning costs. to decommissioning costs. Unrestricted timely basis. The financial assurance There ware no comments regarding' endowment is a fund readily available regulations are intended to assure that the bond rating criterion but there wer, to meet decommissioning expenses.-
inadequate funding does not prevent several comments on the non-bond . Hospital operating mvenues are criteria.
timely decommissioning. Timely decommissioning may require that all Comment: A commenter believed that s be readily available to me decommissioning funding be available the selected multiple of 100 thospital decommisslor.ing expenses due to other operating revenues at least 100 times. - hospital costs.
.y
'O
t 2'9538 Federal Register /Vol. 63, No.104/M:nday, June 1,1998/Rul:s and Regul tions rating, despite declines in the financial accounting principles to assess
- 3. Prohibition on Using a Guamntee in -
compliance with a financial test Combination With Anothe: Financial . condition of the issuer.- designed using U.S. GAAP. Finally, the Assumnce Mechanism De Problem with an insured bond fr m the standpoint of financial present financial assurance regulations Comment: Some commenters noted assurance is that there is no criterion by allow the use of a broad range of that provisions in 10 CFR 30.35(f)(2), which NRC can identify when a financial assurance n'echanisms in art 40.36(e)(2), 50.75(e)(2)(lii), 70.25(f)(2), licensee / issuer no longer qualifies to to ensure that licensees that are una le and 72.30(c)(2) provide that neither a self-guarantee. He bond can retain its to use a particular mechanism have '
parent company guarantee nor a high rating despite a decline in the other alternatives available. NRC does te b li tm be d of the issuer. not expect firms to change their Q
finandal Furthermore, strenpe insurance coverage, accounting practices in order to make methods to satisfy financial assurance provided by the bond insurer, which is use of the financial test because a '
requirements.These commenters a guarantee of pa' ent of principal and number of other options are available. _
. wanted to know the reasons for these interest in accord ce with the insured mstdctions. ' ent schedule, will not ainancm. lCdterkforNon-Bond-MngC mnercia censees Response:This rule makes no change bond issue's provide any ad pabonal source of in the already existing prohibition funding for decommissioning. NRC does The financial test proposed for non-against combining a parent or self- not agree with the commenter's bond issuing commercial licensees was:
(a) Cash fTow divided by total guarantee with another of financial suggestion that it accept ratings on assurance mechanism. e issue of insured bonds as an acceptable criterion liabilities greater than 0.15.
(b)Totalliabilities divided by net whether or not to allow such a go, ty. guarantee.
worth less than 1.5.
j combination is broader than the focus of 5. Requirements for Financial (c) Net worth greater than $10 million this rule. The NRC has limited or at least to times decommissioning Statements experience with parent and self.
guarantee to date. It is expected that the Comment:Some commenters objected costs, whichever is greater.
Comment: A commenter objected to NRC will periodically reevaluate its to the proposed requirement in financial assurance program in the Appendices D and E to 10 CFR Part 30 the net worth criterion of net worth that licensees must conduct accounting greater than $10 million or at least to future and could reassess the need for times estimated decommissioning costs.
the prohibition. by U.S. generally accepted accounting This discriminates against well funded Principles (GAAP).His does not sma'ller firms that could easily self-
- 4. Insured Bond Ratings remgnize the increasingly multi.
Comment: Some commenters objected national nature of materials licenseen. guarantee smaller decommissioning ta the proposed financial criteria which Fossign ownership of major material projects,but could not meet the $10 deal with bond ratings. As proposed, for licensees is cunently a reality (e.g., million net worth requirement.
Institutions that issue bonds, only a Siemens, ABB, Framatome) and can be Re*Ponse:The NRC's objective in bond issuance that is " uninsured *' msy e ed to increase in the future. The setting financial criteria for non-bond-be used; an " insured" bond rating se on of accounting practices to be issuing commercialIJcensees was to would not be eligible. The justification used is a significant corporate decision make the financial assurance risk of affected by many factors. It is these criteria equal to the financial for this limitation is not warranted ' assurance risk of the financial criteria because bond insurers evaluate the unreasonable to require that corporate financial condition of the prospective ' practices of major multi-national firms for licensees that issue bonds (estimated l
1ssuers and avoid issuing policies to be changed for a licensee to be allowed to be approximately 0.13 percent per l
universities that are not creditworthy. to provide self-guarantee of year). According to the analysis of
' Consequently, the presence of bond d nmmissioning funding.The rule potential financial criteria carried out as i
should allow licensees to certify part of the proposed rule, the fmanc ail insurance indicates that the issuer is in criteria in the proposed rule meet this sound financial condition. . adequate assurance that funds will be Response: Bond insurers evaluate the available by using other recognized and ob}ective.8 Firms with smaller net worth accepted accounting principfes. have a larger default risk than larger financial condition of the issuers of the firms. hus, the $10 million net worth bonds at the time the debt is insured.
- Response: Financial statements Bond rating agencies, such as Moodys - prepared in acrordance with foreign requirement is an essential part of the and Standard and Poors, typically accounting principles rather than U.S. overall financial test. The NRC has CAAP pose two problems from the retained this requirement in the final assign such bonds a triple-A rating -
because of the insured status of the standpoint of a financial test for self- rule.
bond.
guarantee. First, the financial test was 7.hmmissi ning Cost Estimates NRC's concerns with accepting developed based on an analysis of Comment: Several commenters raised inmrod bonds as a criterion of finsacial financial data for U.S. firms. the issue of how decommissioning costs ,
assurance arise from the possibility that, Consequently, the financial test criteria over time, the insured bond rating could may not be applicable or affective when were estimated. The NRC should used in conjunction with financial data encourage best available information mask adverse changes in the financial estimates of decommissioning costs, condition of the bond issuer after the that were prepared in accordance with foreign accounting practices. Second, . based on historic plant experience in ,
debt has been insured.The rule decommissioning and renovation, rather includes a requirement that the licensee allowing firms to rely on financial than commercial estimates by must ascertain whether it continues to statements prepared according to contractors that tend to be too high. ;
'l pass the financial test for self-guarantee accounting principles in use in their J every year. Furthermore, if the licensee own country could place a heavy
" Analysis of Potential saf4uarante Testa kn n3 longer meets the test criteria,it must administrative burden on NRC. He Demonstraung Dnancial Assurance by Nonprofit notify NRC and establish alternative examples cited by the commenter, for financial assurance. However, insured instance, might require NRC to know D,"'fij7s**p'
- "D,j'oMURW . :
and apply German, Swiss, and French CR-4514. p. 4.r. June 199r. ; f bonds would continue to hold their i
r l* !
i l t p, .
2 Feder:1 Regist;r/Voj. 63, No.104/Mond:y, June 1,1998/ Rules-and Regulations' 29539 Conservative assumptions, such as use .
adopt the essential ob}ectives of these
- of rates charged by contractors and high sections inorder to mgintain an . CFR Part 76). USEC stated that it would estimates of waste disposal costs, benefit from the opportunity to reduce
- adequate program.The remaining the costs of complying with NRC should not be used. A commenter also - sections of the rule, inciting thum, ,
noted that assuming a period for short- ficencial assurance requirements, which which allow self-guarantee of certain .
lived isotopes to decay before USEC estimated would pasently cost in decommissioning begins would be a commemial corporate bcensees who . excess of $100,000 per year for letters of issue bonds if they meet stringent . cmdit and surety bonds.
realistic ammption. Also, a typical financial criteria, were designated as. .
liceme will not have the maximum .' Response:Under 10 CFR 76.35(n),
naount of material allowed by the compatibility Category D. Category D ~ USEC (or the Corporation) is required to ifcense at the time of decommissioning. to means the Agreement adopt a compatible rule. . States do not need establish financial surety arrangem Response:This rulemaking makes no The final rule change, which will.. to ensure that sufficient funds will be -
changes in the requirements fr r how. .J extend the self-guarantee financial ' available for the ultimate disposal of -
licensees estimate decommissioning waste and depleted uranium, and assurance option to other material and ,
costs. Decommissioning cost estimates, decontamination and decommissioning non-electric utility reactor licensees that activities that are the financial or use of the certification amounts in to meet certain financial criteria, is also CFR Pad 30, are already required by responsibility of the Corporation. The ~
existing regulations on financial designated as compatibility Category D. fundin8 mechanisms currently listed in Under compatibility category D,- the' regulation as potentially acceptable assurance. This rule simply adds an Agreement States may choose to additional financial assurance _, for use by the Corporation include .
maintain a more stringent rule by not prepayment, surety, insurance, and an mechanism to those already permitted adopting the self-guarantee option. . j in NRC mguladons. y. '
external sinking fund, but do not'
- 9. RequirementforAnnual Pbssage of' include self-guarantee r statement of
- 8. Agreement State Cort. tibilityStatus Financial Test '
ofFinancial Assumace egulations '. .. Comment: A c,omme,nter stated that gj", g (fug$,fg, evallability of funds for any activities that Comment:Some the proposed regulations commenters should be believed SectionsoILC(2) should be modified a qualifying of Appendix E to Part 30 that are req assigned a compatibility status of Level 'the Corporation.
1 with Agreement States, This will limnese would not have to repeat - '
USEC was created pursuant to the passage of the financial test for self-ensure consistent requirements for Energy Policy Act of 1992. It is a wholly financial surety arrangements and will guarantee every year. University ownsd government corporation, whose endowments are very stable. In preclude the unintended creation of vars are vested in a five-member '
addition Section ILC.(3) providen .
competitive disadvantages between of Dimetors appointed by the facilities in Agreement States and Non- sufficient assurance that NRC will be. President of the United States and -
Agreement States. ' notifled when a licensee no longer confirmed by the Senate. However, on meets the criteria for self-guarantee. ' i Response:When the proposed rule Response: Although it is true that - fuly 25,1997 a plan was appmved by * '
was published in the Federal Register , university endowments are relatively the President under which USEC will be (see 62 FR 23394, April 30,1997), it was stable and Section ILC.(3) provides the sold either to another co for public ration or to through a st offering.
desigt.ated item as with in accordanca a Division the 2.,compatibility notification, the provision for qualifying Under the USEC Priva licensees to annually pass the test is - Congrees set certain restrictions'on compatibility policy in effect at that <
retained in the final rule. For a self- foreign involvement in USEC's time. A an allowed Division 2 level Agreement of to State compatibility guarantee program to provide adequate privatization and required that a promulgate equivalent, or more assurance of decommissioning funding, " reliable and economical domestic stringent, financial assurance the annual "requalification" provision . sourm of enrichment servims" exist +
is necessary. NRC must have assurance following privatization.
regulations than those of NRC. . '
Under the new " Policy Statement on of financial strength on a timely basia. Although the NRCis not currently Adequacy and Compatibility A self1uarantee relies solely on the swam of any reason why it would be Agreement State Programs,"y (see 62 FR of . Licensee's ability to fund . ,
. Inappropriate to consider expanding the 46517, September 3,1997) Agreement decommissioning. There is no backup . category of funding mechanisms a States must adopt NRC regulations such as that provided by a third-party available to the Corporation to having particular health and safety financial assurance mechanism. no demonstrate the availability of funds for significance and those necessary to requirement for repeating the financial . the actions required under to CFR maintain compatibility with the test yearly is not unduly burdensome on 76.35(n), NRC does not believe that it .
Commission's regulatory program. a limnsee and gives NRC information on . would be feasible to do so in the current The NRC financial assurance the financial condition of the licensee rule. First, USEC was not included in regulations,in effect when the neW on a timely basis. This requirement is any of the analyses performed to policy was implemented, were T not unique to colleges and universities evaluate potential self-gcarantee tests ,
I designated as having health and safety . or to this nile. It is found in the self. for demonstrating financD1 assurance.
I significance. Specifically, sections (a), guarantee financial tests applicable to e NRC believes that detailed analyses .
other t of licensees, both proSt 'and . should be' undertaken to ensure that all (b), and (d) of Parts 30.35,40.36 and . ~ ~
! nonpro '
- s. m . . critical factors have been considered.
70.25, which require that licerisees must ~
' J0. Use ofSelf-Guarantee by the. United . Second, USEC's current and futum-consider the cost of decommissioning their facilities and that those costs must. StatesEnrichment Corporation situation with respect to the costs that be provided for through a financial , it might incur is substantially different ,,
assurance mechanism, have particular Comment:The United States ( ., from those of the licensees included in health and safety significance and were Enrichment Corporation (USECl s,, . .t ,'the current rulemaking. In panicular, proposed that the NRC modify the t'he scope and type of activities that designeted as category H&S. Under the language of the rule to include . . USEC must carry out under 10 CFR (j H&S category, Agreement .
States should . certificates (regulated by NRC
.~
under 76.35(n) areto,very different from those
.s l
29540 Federd Register /Vsl. 63, Ns. IONMonday, Juna 1,'1998/ Rules and Regulations J ,
conducted by hospitals and universities, which can be used by qualified basis'. Therefore, Category D has been' ,
assigned to these rule provisions. t and the non-bond issuing firms covered nonprofit licensees and non-bond- '" '
Issuing licenstes, pg, din of No Si ificant bynir thek,tohsed t exact sizerule.
of the obli ationa, 8 Appendix D is added to 10 CFR Part Environmentalimpact: Availability . e that USEC might be utred to cover is 30 to establish requirements for self- i determined guarantee by non-bond-issuing The amendments will allow qualified ;
uncertain and will n nonprofit and non-bond-issuing until a later date, although it is known commercialifcensees. Appendix Eis ,
added to 10 CFR Part 30 to establish licensees the option of using self- 3
' that many of the costs will remain the
. . responsibility of the U.S. Department of.,. requirements for self-guarantee for guarantee as a mechanism fo,r financial nonprofit college, university, and assurance for decommissiomng. For-Energy (DOE . Under 10 CFR 76.35(n),
hospital licensees. - Profit corporate licensees that issus DOE is responsible for those aspects of ,
decontamination and decommissioning ## ;. .-
bonds are already allowed to use self- .
"" -- guarantee if they meet the regulatory ;
cf the gaseous diffusion plants (GDPs) ~ . - - - -
criteria. Other licensees currently may assigned to DOE under the Atomic Section 40.36 is amended to permit ;
self-guarantee for financial assurance elect to use a variety of financial ,
Energy Act. DOE also is responsible for which can be used by qualified assurance mechanisms, such as surety all environmental liabilities assodated -
bonds, letters of credit, and escrow with the operniion of the CDPs before nonprofit IIconsees and non-bond.
issuing licensees. . ;. accounts to comply with July 1.1993. According to USEC's '
Annual Report for 1996,"le]xcept for *
,.~ E E" 20 CFR Pmt 50 action is intended to offer nonprofit and certain accrued liabilities that will be non-bond-issuing nuclear materials specified in a memorandum of - 'm. Section 50.M is amended to permit
'm self-guarantee for financial assurance licensees and non-electric utility reactor .
ment entered into prior to tization, all environmental e which can be used by qualified . licensees greater flexibility by allowing ,
liabilities of the Company through the non refit licensees and non-bond - an additional mechanism for licensees ;
iss glicensees, that meet the financial criteria for use of date of privatization will remain obligations of the U.S. Government" ' 20 CFR Part 70 , . .m t. t ' **Ih%t e.
Section 70.25 is amended to permit simply adds one more financ to t Matters) Fu ore. - seU-guarantee nandal assurance assurance mechanism to the -
as efJune 30,1996. USEC had accrued mechanisms current! avallable. It does t 5303 mm which nonprofit can be used by licensees'an hualified non-bond not effect the cost of decommissioning P 9 and ,
materials and non-power reactor issuing licensees, disposition of depleted uranium .x - " ' '
facilities. Allowing self-guarantne for currently stored at the GDPs.20The 1996,'
CFR Pmt 72 additional types of licensees does not ,
Annual Report states that 'USEC is -! Section 72.30 is amended to permit lead to any increase in the effect on the i evaluating various proposals for the self-guarantee for financial assurance environment of the decommissioning disposition of depleted uranium, and ' which can be used by qualified non- activities considered in the final rule d:pending on the outcomeof such bond issuing licensees.- -
put,lished on June 27,1988,(53 FR ,
ev:luations, the Company may be~able a ' 24018) as analyzed in the Final Generic tireduce future cost accruals * * *. ' Coen tibility of Agreement State EnvironmentalImpact Statement on Pursuant to the USEC Privatization Act. Regu ations ,, _
Decommissioning of Nuclear Facilities all costs and liabilities related to the 'The curreat NRC regulation which (NUREG-0586, August 1988).'
disposition of depleted uranium ,
allows self-guarantee of certain . '
Promulgation of this rule does not generated prior to the privatization date. commercial corporate licensees who introduce any impacts on the are the responsibility of DOE." Fourth, issue bonds if they' meet stringent u environment not previously considered until privatization has occurred. ' financial criteria is designated as' by the NRC. Therefore, the Commission important information aboutUSEC's. compatibility Category D. This final rule has determined, under the National future corporate structure and . . change, which willextend the self ' ~ Environmental Policy Act of 1969, as cwnership will remain uncertain. As . guarantee financial assurance option to' amended, and the Commission's noted above. Congress has allowed . other material and non. electric utility regulations in subpart A of 10 CFR part USEC to be sold either to another ~ ' reactor licensees that mut certain . 51, that this rule would not be a major ,'
corporation or to the public through a financial criteria,is also designated as a Federal action significantly affecting the stock offering. Thus, the form in which - compatibility Category D. Category D quality of the human environment, and ~
privatization occurs could affect the - . means the agreement States do not need therefore an environmentalimpact
. NRC's analysis of financial assurance..
to adopt a compatible rule. The Category statement is not required. No other citernatives. Because of the need to D designation was determined in ~ - agencies or persons were contacted in ev:luate all of these factors. NRC l'aa accordance with the new " Policy ' making this determination.The NRC E
. determined not to include 10 CFR part Statsmant on Adequacy and
~
J staffis not aware of any other i 7Jin the current rulemaking- '
-Compatibility of Agreement State '
documents related to the environmental ;
Changes From the F.;'1- f Rule -
Programs," approved by the ' , .
Commission on June 30,1997. The linal' ~ acoptee ere avaiteble at current retes frorn the There am no changes frorn the , . rule change does not involve a basic u.s covemrnent printing omce p.o.nox 270sr.
Proposed rule. " ***hinston. oc to4ca-e32s tielephone (202) sia-radiation protection standard, activities "
Section-by-Section Description of that have direct and significant effects N'bby tfr*s s2 Roy Roe .
Changes tr> multiple jurisdictions, or essential springfield. vA asist. copine ere eveiteble for objectives which an Agreement State In8pecuon or copying for a fee trorn the NRC Public
.30 CFR Pmt 30 .
,7 should adopt to avoid conflicts, gaps, or Docurnent Roarn et 212o 1. Street NW.. Wuhinston. ;
I Section 30.35 is amended to permit' ' duplications in the regulation of N ,7. ,g2'D3$,'p"o$,TonI[M, ~
}
salf-guarantee for financial assurance agreement material on a nationwide. fax (2022 as4-s343. -
s: _ , .
4
. n
.g .* - .
i k e. Fed'eral Register /Vol.' 83,'No.104 2 onday,' June 1,1998/ Rules and ' Regulations 29541 i
imped of this action.no foregoing
^
" - - ' ^
-y Fl=rikility Cert Acation . Radiation protection Reporting and 3 constitutes the environmental .
4 assessment and Bnding of no sigalRcant In accordance wkh b Re'gulatory . recordkeeping requirements. Scientl6c Flexibility Act of 1980 (5 U.S.C 605(b)), equipment,Securit
( impact fw this mie' '
b Coramission arti8es that this rule nuclearmaterial. y measures.Special
!g Paperwork Reduction Act Statement' will not have a signl8 cant economic
!- This Analrule amendsinformation I'8 Ped on a submanual number danaH
,20 CFR Port 72",,~
- 1 -
collecdon requirements that are subject entitim. This rule would expand the Manpower t' raining , Nuclear to the Pa rwork Reduction Act of1995 bor M o memlais Occupu I ad '
(44 U.S.[3501 et seq.). These able,g to H,conses health, Reporting and recordkeeping t',C",["
g ,,,,,, ,3,,,,,, g,, requirements, Security measures. Spent guimmets ce d Managanent were approved and Bu , enhancing the Aexib ty of these I"'I' -
'r ~
) (OMB), approval number 3150-0017J regulations. It is estimated that this rule For"the reasons set out in the - -
. -0020, -0011. -000s, and 0132. - would result in signi8 cant cost'asvings preamble and under the authority of the N public reporting burden for this - to qualifying limaa=== ., .- Atomic Energy Act of 1954, as amended.
l information collection is estimated to ' the Energy Reorganization Act of 1974, i.
avereqe 9 to 14 hours1.62037e-4 days <br />0.00389 hours <br />2.314815e-5 weeks <br />5.327e-6 months <br /> per response, BackSt .*- % '
as amended, and 5 U.S.C 553, the NRC incluaang tinne for revlowing b NRC hs dewmind'gg ,
is ado the following amendments-harkR 30,40,50,70, and 72.
inemctims marchingexisungdata _to to sources, "d 72.82 5the revisions Parts of the(10 CFR 50.100 data neebthering , and completing and maintaining and - the , Canmimim,s mgulades eat am Wag PART 30-4 TULES OF GEN
""' APPLICABluTY TO DotAESTIC reviewing the information collection.
Send ca== ants on any aspect of this [8I* ,,g, "g,*",,, g r'u[dme d
LICENSING OF BYPRODUCT "A
infamade coHecum,inci not impose a backSt as de8aed in to . -
A
" 8
- GR 50.10e(s)(1) or 72.62(a). N rule. 1.N authority citation for Part 30 d d ==+=ada the self. guarantee alternative for continues to read as follows:.
. tYrb (T-4 F33), U.S. denummung decommissiming b NucleInr Regulatory r'ammission. a"ar *I amurence to quaH8ed non- 4. ascs. st, et ist,1st, t et 1es, as sem. ess, ses. Ms. see, ses, as amadal, Washington, DC 20555-0001, or by Rt and non-bend-issuing lar==- sec. 234. sa samt. 444, as ---d d (4 U.s.c i
Internet electronic anaH at the availability of this option att1,at12,sa01,2:32,2:33,22as,tasak
. B)SGNRCCOV; and to the Desk OfBear' does not pose a new burden on secs. act, as anseded, soz. aos. se seat.
OfBee ofInformation and Regulatory Hanum dcmamacial maan 1242, as unseded, t244, t24s (42 U.S.c Affairs NEOS-10202.(3150-4017), windepades spat fu .seet, ases, seest.
OfBoe of Man t and Budget, g,,,y,3,,, gggggg,,), yy , g, . Section 30.7 also is'ouad under Pub. L Washington, 20503. ru does not constitute a harkAt 95-401, sec.10,92 Stat. 2951 (42 U.S.C and a t anal Public Protection Naean,=es== for this Anal rule.ysis was not preparedunder 5851). SectionStaL 30.34(b) also issued sec.184,68 954, as amended
!!a doepment used to impose an . Use ofSubjects "' (42 U.S.C 2234). Section 30.81 also Information collection does not di y imud unde uc.187, es Std. 955 (42 a currently valid OMB control n ,
to CFR Part30 "-
U.S.C 2237). 4 the NRC may not conduct or sponsor, B uctinpterial Criminal ' ,
- 2. In 5 30.s, para and a person is not required to respond read as foHows. . graph (b)is revised t'o ties, Government contracts,'
to, the information collection. '
' c- -t
%., =_3tal relations,Isoto 9as.8 Inenemseensollsseen
,t Regulatory Analysis
- Nuclear materials, Radiation pron reta==. pes.
""T- cess approuet. ,
'the NRC has prepared a Reporting and recordkeeping * * ^1 * ** ' -' * *
- letary . requirmeents.
analysis on this regulation. ysis (b) N ap
- collection ._ proved information examines the costs and beneSts of the 10 &R Part 40 4 . "~ .
^ ts contained in alternatives considered by the NitC N this part appear in $$ 30.9. 30.11,30.15,-
Criminal penalties, Government analysis is available for ins on in~ 30.19,30.20,30.32,30.34,30.35,30.36, contracts Hasardous materials .,
30.37,30.38,30.50,30.51,30.55,30.58, the NRCPublic Document ,2120 transportation, Nuclear matadals, and Appendices A.C,D,and E of this L Street NW (Imwor level), Washington, Reporting and recordkeeping J- part.
DC. ,. -
copies of the anal is may be requirements, Souice snatorial, .- . ..,.. *. .
obtal from Clark Pri , OfBee of . ~;
Uranium. ** ~
Nuclear Materials Safety and '" ' ' ' ' 3. In 5 30.35, the introductory text of Safeguards, U.S. Nuclear Regulatory M CFR P W So *~
^'
Commission, Washington, DC 20555, '
now,P. h (fX2)is revised to road as . -
. Antitrust, Classi8ed information, . - - " - '""'
telephone (301) 415-6203. a Criminal penalties Fire pmtection. -430.as Pinenetsisoeuronesand Small Boeiness Regaletery Enfermannent Fairams Ad I',
p ',',f ,. s . .,
pmtection, Reactor siting criteria, , (f) * *
- In accordance with the Smau Reporting and recordkaoping. .
Business Regulatory Enforcement (2) A surety method, insurance, or -
requirements. . -w other guarantee method. These methods Falmees Act of1996, the NRC has 20 &R Pat M a.- --
guarantee that daWesioning costs determined that this action is not a , ' "
" major rule" and has verified this will be paid. A surety method may be Criminal penalties, Hazardous Mn the form of a surety bond, letter of determination with the Office of ' materials transportation, Material, information and Regulatory Affairs,, credit, or line of credit. A parent control and acx:ounting. Nuclear company guarantee of funds for .
, Of5ce of Management and Budget. materials Packaging and containers, decommissioning costs based on a 1 ,
s . '#
~
l0 c
- y' 29542 Fed;ral Regist
- r/Vol. 63, No '104 / Monday, June 1,1998/Rults and Regulations
> financial test may be used if the .> . company is moponsible as selfparanteeing . Commission. b licenm will setup and
' fund a trust in the amount of the current cost }
guarantee and test are as contained in , liceam and as parent-guarantor. utimates for decommissioning.
. (2) Assets located in the United States cppendix A to this part. A parent
company guarantee may not be used ins *j*d$ , $,*,',IN'0 g ,Pethe tot l cment . Appendix E to Part 30.--Criteria g combination with other financial decommissioning cost estimate (or the Relating to Use of Financial Tests and c methods to satisfy the requirements 'of curant amount required if certification is Self-Guarantee For Providing c used) for all decommissioning activities for Reasonable Assurance of Funds For _ (
this section. For commercial corporations that issue bonds, a
..' which the company is responsible as self- Decommissioning by Nonprofit C guarantee of funds by the applicant or guaranteeing licensee and as parent. .i Colleges, Universities, and Hospitals i guaranta. t licensee for decommissioning costs '
(3) A ratio of cash flow divided by total L Introduction c based on a financial test may be used if liabilities greater than 0.15 and a ratio of total An applicant or licensee may rovide (
th> guarantee and test are as contained . liabilities divided by not worth less than 1.5.
reasonable assurance of the avalfability of -
(
in cppendix C to this part. For B. In addition, to pass the financial test, a funds for decommissioning based on [
commerr.ial companies that do not issue . cocspany must meet all of b following furmshing its own guarantee that funds will bonds, a guarantee of funds by the uirements: -
. be available for decommissioning costs and f
lt) The company's independent certfEed' ' on a demonstration that the applicant or applicant orlicensee for licensee passes the Snancial test of Section decommissioning costs may be used if public accountant must have compamd the 1 data used by the company in the Anancial D of this appendix. The terms of the self.
thJ guarantee and test are as contained tat. which is required to be derived from the guarantee are in Section W of this appendix.
in appendix D tc6 this part. For nonprofit independently audited year end financial - This appendix establishes criteria for passing I entitles, sug as cogeges, univegties, statement based on United States generally ' .the Snancial test for the self- arantee and I and nonprofit hospitals, a guarantee of accooted accounting practices for the latest establishes the terms for a se guarantee.
funds by the applicant or licensee may.. nacal yar, with h amounts in such - g gwh . l be used if the guarantee and test are as anancial statement. fa connection with that A. For colleges and universities, to pass the contained in appendix E to this part. A procmdure, the licenne shall inform NRC Ananefal test a college or universi must guarantee by the applicant or licensee - within 90 days of any matters that may cause meet elbr h criteria in Paragra !!.A.(1)
. the auditor to believe that the data speciSed or the criteria in Paragraph II.A.(2 of this may not be used in combination with in b Anancial test should be adjusted and any other financial methods used to , g 0' ' *
) For app!! cants'or licensees that issue . _
Ahw the dal na th ,
satisfy the requirements or in any situation where the applicant of this . section - company must repeat bonds, passage of the a current rating test for its uninsured, uncollaterallad, and most recent orlicensee has a parent company - within 90 days after the close of each unencumbered bond issuance of AAA,,AA, b:lding majoritycontrol of the voting succeeding fiscal year. or A as issued by Standard and Poors (S&P]
. stock of the company. Any surety (3)If the licensu no longer meets the or Aas. Aa, or A as issued by Moodys.
method or insurance used to provide . requirements of paragraph H.A of this (2) For applicants or licensees that do not financial assurance for appendix, the licenses must send notice to '
decommissioning must contain the the NR o to es mati" cons of set e11 alted
_ RC foHowing con ons: regulations.The notice must be sent States of at least $50 million. or at least 30
- * *- *
- times the total current decommissioning t certiaed mail, return aceipt request ,
if current amo within 90 days after the end of the fiscal year . "timate (w the certification is used), whichever is greater,
- 4. New Appendices D and E to Part 30 I r which the year end financial data show are a ded to read as follows: for au decommissioning activities for which
. that h licensee no longer meets b the college w untmsity is responsible as a
,a-- Har D to Part 30-Criteria ' ' '
anancial test requirements. ne licensee must provide altamauve anancial assurance 8'Iffuamteein icensw.
R2ating To Use of Financial Tests and within 120 days after the end of such Escal For os t s to s th Bnancia st Sdf.Guarasta for Providing ,
Rasseeable Amaurance of Funds for 7- - Paragraph II.B.(1) or the criteria in Paragraph Decennalaaioning by f%==arcial HI. Company SelfCuarantu , . . II.B.(2)of this appendix:
Cosspanies nat Have no Outstanding ne terms of a self arantee which an (1) For applicants or licensees that issue applicant or licensee ishes must provide bonds, a current rating for its most recent Rated Reeds , ; . . ,, .
uninsured.uncollateralized, and
,c s
, .' that: .-
unencumbered bond issuance of AAA, AA, L Introduction -
- A. The guarantee shall remain in force'
~.de unless the licensee sends notice of . or A as issued by Standard and Poors (S&P)
An applicant or licensee may or Asa, Aa,or A as issued by Moodys.
reesonable assuranca of b ability of cancellation by certified mail, return receipt funds for dmmissioning based on requested, to the NRC t'anrulletion may not (2) For applicants or licensees that do not furnishing its own guarantee that funds will occur until an alternative Anancial assurance issue bonds, an the following tests must be -
be available for dammminainning costs and mechanism is in place. .
- met:
on a demonstration that the company passes B. The licensee shall provide alternative , - (a)(Total Revenusa less total expenditures)
Anancial assurance as specified in the divided by total revenues must be equal to the financial test of Section H of this .-
appendix.He terms of the self-guarantee are regulations within 90 days following receipt or greater than 0.04. -
- ~ in Section III of this appendix. This appendix by the NRC of a notics or cancellation of the (b) Long term debt divided by net axed m assets must be less than or equal to 0.67.
establishes criteria for passing the Anancial ., guarantee. . .
- (c)(Current assets and depreciation fund) test for the self-guarantee and establishes the C ne guarantee and financial resi provisions must remain in effect until the divided by current liabilities must be greater terms for a self-guarantee. .
Commission has terminated the license or than or equal to 2.55.
H. Find Tat -
.'" #- -" until another Snancial assurance method acceptable to the Commission has been put (d) Operating revenues must be at least 100 times the total current decommissioning cost
. A. To pass the financial test a company -
must meet the following criteria: in effect by the licensee. estimate (or the current amount required if (1) Tangible not worth greater than $10 D. no applicant or licensee must provide certification is used) for all decommissioning million, or at least to times the total current to the Commi=1on a written guarantee (a activities for which the hospital is .
d:commisaloning cost estimate (or the written commitment by a corporate officer) responsible as a self-guaranteeing license.
current amount required if certification is which states that the licensee will fund and C In addition, to pass the financial test, a used), whic.hever is greater, foi all carry out thu required decommission licensee must meet all the following dernmminstoning activities for which the activities or, upon issuance of an order the requirements:
- *4
W Ig -
- 'T" Federd Regist
- r/Vol. 63, No.104 / Monday, June 1,1998/ Rules and Regulations 29543
$.' (1) The licensee's independent certified Wet Public accountant must have compared the..< PART 40-DOMESTIC LICENSING OF orin any situation where the applicant 1 data used by the licensee in the financial test,. SOURCE MATERIAL.. , . 4 '
or licensee has a parent company l
[. which is required to be derived from the 5. The authority citation for Part 40 holdin jorit trol f th tin l independently audited year end financial , continues to read as follows: stock of the com a y. An surety staternents, based on United States generally ...
method or insura;nce used to provide accepted accounting practices, for the latest , Authority: Secs. 62,63, 64, 65, 81,161', _ financial assurance for p fiscal year, with the amounts in such 182,183,186,68 Stat. 932,933,935,948,'
953,954,955, as amended, secs.11e(2),83, decommissioning must contain the financial statement. In connection with that 84, Pub. L 95-604,92 Stat. 3033, as followl"E conditions
I. procedure, the licensee shall inform NRC '
- amended. 3039, sec. 234,83 Stat. 444, as ' * '
N*
within 90 days of any matters coming to the- amended (42 U.S.C 2014(e)(2),2092,2093,-
1, attention of the auditor that cause the auditor 2094,2005,2111,2113,2114,2201,2232 to Lelieve that the data specified in the PART 50--DOMESTIC 1.lCENSING OF 2233,2236,2282h sec. 274, Pub. L .86-373,
,s.
I financial test should be adjusted and that the 73 Stat. 688 (42 U.S.C 2021); secs. 201, as PRODUCTION AND UTILIZATION !
amended. 202,206,88 Stat.1242, as FACILITIES ,,c
. gj licensee no longer passes the test. ,
3 (2) After the initial financial test, the amended. 1244,1246 (42 U.S.C 5841,~ 5842,. 7. The authority citation for Part 50
- licensee must repeat passage of the test 5846); sec. 275, 92 Stat. 3021, as arnended by . Continues to read as followsr i within 90 days after the close of each Pub. L 97-415,96 Stat. 2067 (42 U.S.C :> -
succeeding fiscal year.
2022). ' ,. -
Autho' rity: Secs. 102,103,104,105,161, i
s .
(3)If the licensee no longer meets the Section 4O.7 also issued under Pub. 182,183,186,189,68 L 95-. Stat. 936,937,938, l R3- 601, sec.10,92 Stat. 2951 (42 U.S.C 5851). 948,953, m,9% 956, as amended, sec.
requirements of Section I of this appendix, Section 40.31(g) also issued under sec.122, 234,83 Stat.1244, as amended (42 U.S.C
" the licensee mu'st send notice to the NRC of 68 Stat. 939 (42 U.S.C 2152). Section 40.46 , 2 02,2133,2 m ,2135,2201,2232,2233, ,
t' its intent to establish alternative financial also issued under sec.184,68 Stat. 954, as 2236,2239, 2282); secs. 201, as amended, assurance as specified in NRC regulations. ded 22 2 b The notice must be sent by certifled mall, g o,n .7 so ' ( U C 5841 2 return receipt requested, within 90 days after 2237)' Section 50.7 also issued under Pub. L 95-
), the end of the fiscal year for which h yeer - 6. In 5 40.36, the introductory text of . 601, sec.10,92 Stat. 2951 (42 U.S.C 5851). ~
end Bnancial data show that the licensee no paragra Section 50.10 also lasued under secs.101, longer meets the financial test requirements. Iollows:ph (e)(2) is revised to read as 185,68 Stat. 936,955, as amended (42 U.S C .
The licensee must provide alternate financial " ' 2131. 2235); sec.102, Pub. L 91-190,83 Stat.'
assurance within 120 days aAer the end of .- 853 (42 U.S.C 4332). Sections 50.13, 9 40.38 Financial eseurones and 50.54(dd), and 50.103 also issued under sec. ,
- o. such fiscal year. f**0n***
Ping 80f ^ ^ Z " 44 108,68 Stat. 939, as amended (42 U.S.C E SelMuaranta M .*. * .
, - 2138). Sections 50.23,50.35,50.55, and 50.56 3
The terms of a self. guarantee which an (e) * * * .,
also issued under sec.185,68 Stat. 955 (42 (2) A surety method, insurance, or U.S.C 2235). Sections 50.33a,50.55a and applicant that- - or licensee furnishes must provide other guarantee method. These methods Appendix Q also issued un i
" A. The guarantee shall remain in force . . guarantee that decommissioning costs L 91-190,83 Stat. 853 (42 U.S.C 4332).
unless the licensee sendr. notice of will be paid. A surety method may be Sections 50.34 and 50.54 also issued under -
cancellation by certified mail, and/or return in the fo 0f 8 8 Y boUd. I8 I* f sec. 204,88 Stat 1245 (42 ES.C 5846 l receipt requested, to the Commission. g
- I '"* Sections 50.58, 50.91, and 50.92 also issued N'" -. under Pub. L 97-415,96 Stat. 2073 (42 Cancellation may not occur unless an .. . C 2Pany guarantee of funds for .
> alternative financial assurancs mechanism is decommisaloning costs based on 3 U.S.C 2239). Section 50.78 also issued under
) . financial test may,be used if the . . - sec.122,68 Stat. 939 (42 U.S.C 2152).
i[e lice hall videal ti guarantee and test are a contained in Sections 50.80-50.81 also issued under sec. 184. 68 Stat. 954, as amended (42 U.S.C financial ass as s scifiedin appendix A to part 30. A parent F leo Ag dersec.
Commission's regulations within 90 days com any guarantee may not be used in following receipt by the Commission of a com ination with other financial , c 8. In 5 50.75, the introductory text of notice of cancellation of the guarantee. methods to satisfy the requirements of C The guarantee and financial test Qgraph. .-, (e)(2)(lii) is revised to read as this section. For commercial. -
provisions must remain in effect until the corporations that issue bonds"a -
Commission has terminated the license or 9 80.78 Meporeng and .- .,for.
guarantee of funds by the applicant or ^ - - -
1,;.., planning. '
until another financial assurance method licensee for decommissioning costs . .- . . .. .
accmptable to the ummiaton has been put
in effect by the 11oonsee. based on a financial test may be used if . (e) = * . *
(2) *
- F^U D. The applicant or licanase must provide . the guarantee and test are as contained to the Commission a written guarantee (a in appendix C to part 30.For. .
(iii) A surety method, insurance, or ,
a written commitment by a corporate officar or commercial companies that donot' issue other guarantee method. These methods '
officer of the institution) which states that bonds, a guarantee of funds by the guarantee that decommissioning costs .
r the lic=nsee will fund and carry out the applicant or licenses for "
will be paid. A surety method may.be f.
7 ,7 d
(
licensee will set up and fund a trust in the decommissioning costs may be used if' Q"{ the guarantee and test are as contained in *PPendix D to part 30. For nonprofit in the form of a surety bond, letter of credit, or line of credit. A parent company guarantee of funds for entitles, such as colleges, universities, amount of the cunent cost estimates for. decommissioning costs based on a I decommissioning. .
and nonprofit hospitals, a guarantee of- financial test may be used if the bond issuanca ceases to be rated in anyE. If. at any time, the guarantee licensee's and test most are recent as contained beinused if the category of "A" or above by either Standard appendix A to part 30. A parent contained in appendix E to part 30. A company guarantee may not be u, sed 1n
~
and Poors or Moodys, the licensee shall . guarantee by the applicant orlicensee provide notice in writing of such fact to the may not be used in combination with ' coInbination with other financial-Commission within 20 days after publication any other financial methods used to methods to satisfy th9 requirements of tf the change by the rating service. this section. For commercial satisfy the requirements of this section corporations that issue bonds,' a
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a
/ e l
29544 Federal Register /Vol. 63. Na.104 /Mdaday, Juns 1,1998/Rults and Regulations
. appendix A to part 30. A parent subpart J also issued under secs. 2(2),2(15),
arantee of funds by the applicant or bconsee for decommissioning costs company guarantee may not be used in 2(19),117(a),141(h). Pub. L 97-425,96 Stat.
2202,2203,2204,2222,2244 (42 U.SE based on a financial test may be used if combination with other financial 10101,10137(a),10161(h)). Subparts K and L th] guarantee and test are as containie methods to sat:sfy the requirements of are also issued under soc.133,98 Stat. 2230 in appendix C to part 30.For this section. For commercial (42.U.Sc 10153) and sec. 218(a),96 Stat.
commercial companies that do not issue corporations that issue bonds, a bonds, a guarantee of funds by the 2252 (42 U.Sn 10198).
guarantee of funds by the applicant or cpplicant or licensee for ucensee for decommissioning costs 12. In 572.30, the introductory text of based on a financial test may be used if paragraph (c)(2) is revised to read as decommissioning costs the guarantee an test are as contained may be used if the guarantee and test are as contained g93 ,
_ in appendix D.to part 30. For nonprofit in appendix C to part 30. For entities, such as colleges, universities, commercial companies that do not issue 9 72.30 Financ'ai eseurence and .'
and nonprofit hospitals, a guarantee of bonds, a guarantee of funds by the reeerokeeping for decommiseloning.
funds by the applicant or licensee may applicant,or licensee for . . . . .
be used if the guarantee and test are as decommissioning costs may be used if contained in appendix E to part 30. A the guarantee and test are as contained (C) * *
- guarantee by the applicant or licensee in appendix D to part 30. For nonprofit (2) A surety method, insurance, or may not be used in combination with other guarantee method. These methods any other financial methods used to entities, suchhospita and nonprofit as colleg;es, universities, s, a guarantee of guarantee that decommissioning costs -
satisfy the requirements of this section funds by the applicant or licensee may will be paid. A surety method may be orin any situation where the applicant be used if the guarantee and test are as in the form of a surety bond, letter of or licensee has a parent company contained in appendix E to part 30. A credit, or line of credit. A parent h:lding majority control of the voting guarantee by the applicant or licensee company guarantee of funds for stock of the company. may not be used in combination with decommissioning costs based on a
. . .- . .- any other financial methods used t financial test may be used if the satisfy the requirements of this section guarantee and test are as contained in -
PART 70- DOMESTIC UCENSING OF or in any situation where the applicant 8PPendix A to part 30. A parent
,
- SPECIAL NUCLEAR MATERIAL or licensee has a parent com any of ung Y 9.The authority citation for Part 70 "j m o[y gy, tion wi other fin a continues to read as follows: methods to satisfy the requirements of
. method orinsurance use to provide
. Authority: Secs. 51,53,181,182,183,68 financial assurance for this section. For commercial Stat. 929,930,948 953,954, as amended'4 decommissioning must contain the corporations that issue bonds, a 8 2 guarantee of funds by the applicant or 3j7,3, Stet; g asQen 5 following conditions:
. . . . c. licensee for decommissioning costs .
201, as amended,202,204,206, a8 Stat.
1242, as amended.1244,1245.1246 (42 based on a financial test may be used if U.SE 5841,5842,5845,5846). PART 72-LICENSING the guarsntee and test are as contained sections 70.1(c) and 70.20a(b) also issued , REQUIREMENTS FOR THE in appendix C to part 30 For under secs. 135,141, Pub. L 97-425,96 Stat. INDEPENDENT STORAGE OF SPENT commercial corporations that do not 2232,2241 (42 U.sn 10155.10181). Section
- NUCLEAR FUEL AND HIGH-LEVEL issue bonds, a guarantee of funds by the 70.7 also issued under Pub. L 95-601, sec- RADIOACTIVE WASTE licant or licensee for 10,92 Stat. 2951 (42 U.SE 5851). Section .
APP 70.21(g) also issued under sec.122,68 Stat 11.The authority citation for Part 72 decommissioning costs may be used if 939 (42 U.SE 2152). Section 70.31 also continues to read as follows: , the guarantee and test are as contained lesund under sec. 57d, Pub. L 93-377,88 in appendix D to part 30. A guarantee Authority: Seca.51,53,57,62,63,65,69, Stat. 475 (42 U.SC 2077). Sections 70.36 and by the applicant or licensee may not be 70.44 also issued under sec.184. 68 Stat. W54, 81,161,182,183,184,186,187,189,68 Stat. u g comgnation wi any other 929,930,932,933,934,935,948,953,954, as amended (42 UAC 2234). Section 70 tot financial methods used to satisfy the 955 as amended. sec. 234,83 Stat. 444, as also issued (42 U.SE under secs.18e,187,68 2236,2237). Section 70.62 also Stat. 955 ' ame,nded (42 U.SC 2071,2073,2077,2092, requirements of this section or in any issued under sec.108,68 Stat. 939, as 2093,2005,2099,2111,2201,2232,2233, situation where the applicant or amended (42 U.SE 2138), ' 2234,2236,2237,2238,2282); sec. 274, Puh. licensee has a parent company holding
- 3
- 10. In S 70.25, the' introductory text of k3d2051 '201 a'sa n ,206, maj rity c ntrol of the voting stcck of 2
Paragraph (f)(2) is revised to road as 88 Stat.1242, as amanded.1244,1246 (42 the cornpany. Any surety method or f:llows: , r.3 . '
UAC 5841,5842,5846h Pub. L 95-601, sec. insurance used to provide financial 10,92 Stat. 2951(42 U.SA 5851); sec.102, assurance for decommissioning must I 1 _ _ _"" an h ., Pub. L 91-190,83 Stat. 853 (42 U.SC 4332); contain the following conditions:
- - "" 7 - Secs.131,132,133,135,137,141, Pub. L . . . . . . . ..
, Sta 2 '
[} . . . ,2.... ,
g 20' 101 t 1$3 235 2 Dated at Rockville, Maryland, this 22nd
- ~ (2) A surety method, insurance, or U.SC 10151,10152,10153,10155, t0157, day of May,1998.
Other guarantee method. These methods ' 10161,10168). For the Nuclear Regulatory Commission.
guarantee that decommissioning costs Section 72.44(g) also issued under secs. g.h, c, gg,yi,*
willbe paid. A surety method may be 142(b) and 148(c). (d), Pub. L 100-203,101 Stat.1330-232,1330-236 (42 U.Sc .Secreryof the Comimssm ..
In the form of a surety bond, letter of 10182(b).10168(c),(d)). Section 72.46 also (FR Doc. 98-14385 Filed 5-29-98; 8:45 aml credit,orline of credit. A arent issued undar sec.189,68 Stat. 955 (42 U.SE anme coes rise.es., f c:mpany 8"arantee of funds for 2239h sec.134, Puh. L 97-425,96 Stat. 2230 .
decommissioning 8 costs based on a ' , (42 U.Sn 10154). Section 72.9s(d) also , t financial test may be used if the - Issued under sec.145(g) Pub. L 100-203,
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guarantee and test are as contained in ~ 101 Stat.1330-235 (42 U.SC 10165(g)).
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