ML21095A216
| ML21095A216 | |
| Person / Time | |
|---|---|
| Site: | SHINE Medical Technologies |
| Issue date: | 03/23/2021 |
| From: | SHINE Medical Technologies |
| To: | Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML21095A241 | List: |
| References | |
| 2021-SMT-0032 | |
| Download: ML21095A216 (15) | |
Text
FINANCIAL QUALIFICATIONS TABLE OF CONTENTS tion Title Page 1 FINANCIAL ABILITY TO CONSTRUCT THE SHINE FACILITY ........................ 15.1-1 2 FINANCIAL ABILITY TO OPERATE THE SHINE FACILITY .............................. 15.2-1 15.2.1 ESTIMATE OF OPERATING COSTS .............................................. 15.2-1 15.2.2 FUNDS TO COVER ESTIMATED OPERATION COSTS ................ 15.2-2 3 FINANCIAL ABILITY TO DECOMMISSION THE SHINE FACILITY .................. 15.3-1 15.3.1 DECOMMISSIONING REPORT ....................................................... 15.3-1 4 FOREIGN OWNERSHIP, CONTROL, OR DOMINATION ................................. 15.4-1 5 NUCLEAR INSURANCE AND INDEMNITY ...................................................... 15.5-1 6 REFERENCES ................................................................................................... 15.6-1 NE Medical Technologies 15-i Rev. 0
mber Title 2-1 Operating Costs for the First Five Years of Operation 2-2 Estimated Funding for the First Five Years of Operation NE Medical Technologies 15-ii Rev. 0
mber Title e
NE Medical Technologies 15-iii Rev. 0
onym/Abbreviation Definition A The Atomic Energy Act of 1954 GS cost of goods sold Construction Permit E decommissioning cost estimate CD Foreign Ownership, Control, or Domination information technology low-enriched uranium 99 molybdenum-99 AS neutron driver assembly system Operating License 99m technetium-99m NE Medical Technologies 15-iv Rev. 0
purpose of this chapter is to present the financial information for the SHINE medical isotope lity, which establishes that SHINE is financially qualified to own, construct, operate, and ommission the facility. The following information regarding financial qualifications is cribed in this chapter:
- a. The financial ability to construct the facility, as authorized by the Construction Permit (CP).
- b. The financial ability to safely operate the facility.
- c. The financial ability to safely decommission the facility at the end of the facilitys operating license.
- d. Information regarding Foreign Ownership, Control, or Domination (FOCD).
- e. Information regarding Nuclear Insurance and Indemnity.
SHINE financial information is provided in accordance with 10 CFR 50.33(d)(3)(iii),
CFR 50.33(f) and (k), and the implementing regulations regarding the Price-Anderson Act tained in 10 CFR 140.
1 FINANCIAL ABILITY TO CONSTRUCT THE SHINE FACILITY NRC has set forth requirements for applicants for a construction permit pursuant to CFR 50.33(f) to submit sufficient information to demonstrate that the applicant possesses or reasonable assurance of obtaining the funds necessary to cover estimated construction ts and related fuel cycle costs. Additionally, the applicant should indicate the source(s) of ds to cover these costs. The NRC has previously concluded that SHINE is financially lified to engage in the activities authorized under the terms of the construction permit NRC, 2016).
NE provided updated financial qualification information to the NRC in an application for sfer of control of the SHINE construction permit, submitted in accordance with 10 CFR 50.80 INE, 2018a and SHINE, 2019). SHINE maintains the financial qualification to construct the NE facility, consistent with the NRC construction permit determination.
NE Medical Technologies 15.1-1 Rev. 0
SHINE facility is licensed as a Class 103 facility in accordance with 10 CFR 50.22, for mercial and industrial facilities. The costs of owning and operating the facility are devoted to mercial activities. SHINE has requested an Operating License (OL) for a term of 30 years.
SHINE facility produces medical isotopes, primarily molybdenum-99 (Mo-99). Mo-99 is the cursor of the diagnostic imaging isotope technetium-99m (Tc-99m), which is used in medical cedures worldwide.
ancial reports and certified financial statements are submitted annually in accordance with CFR 50.71(b). The total annual operating costs for each of the first five years of operation of SHINE facility have been estimated. Operating costs will be funded from the expected enues associated with the sale of Mo-99 and other radioisotopes produced by the facility.
NE expects that this revenue will be more than the operating costs incurred. The information w demonstrates that SHINE has reasonable assurance of obtaining the funds necessary to er estimated operation costs for the period of the license.
2.1 ESTIMATE OF OPERATING COSTS le 15.2-1 provides the budgetary estimate of operating costs for the first five years of ration of the SHINE facility. The estimated costs presented in Table 15.2-1 are divided into primary categories: costs of goods sold (COGS) and organizational expenses. The bases for estimated operational costs of the facility for the first five years are discussed below as they te to these categories.
COGS is comprised of three key elements:
- Production personnel costs are based on an estimate of the number of employees required for the SHINE facility. This estimate includes personnel performing duties related to operations, engineering, radiation protection, and maintenance, as well as supervisory and management personnel. The production personnel cost estimate includes salary and benefits.
- Irradiation and processing costs include maintenance, replacement, and consumable costs associated with neutron driver assembly system (NDAS) main components, low-enriched uranium (LEU), and consumable supplies. As described in Table 15.2-1, the first year costs under this category are significantly lower than later years, as expected, based on minimal first year replacement projections.
- For NDAS main components, SHINE has a binding contract with Phoenix, LLC that specifies the costs of NDAS main components on a firm-fixed basis. The contract with Phoenix, LLC serves as the basis for this operating cost estimate.
- The LEU cost estimate is based on the total amount of LEU expected to be consumed within the SHINE facility and information provided during discussions with the U.S. Department of Energy/National Nuclear Security Administration Production Office and Y-12 National Security Complex in Oak Ridge, Tennessee.
- Consumables consist of chemicals and materials used to produce, process, or refine medical isotopes or target solution, including tritium. This category also includes disposable or frequently replaced materials and chemicals that are used in facility operations or systems.
NE Medical Technologies 15.2-1 Rev. 1
- The SHINE facility utility costs are based on the estimated nominal electricity consumption of the facility (including NDAS operational requirements) and a quote from Alliant Energy, the SHINE facility electricity provider.
- General facility and equipment maintenance and repair costs consist of component and part replacements based on preventative and corrective maintenance estimates.
The maintenance and repair costs were estimated at system levels and compiled for the entire facility.
- Property taxes as estimated as a percentage of the cost of the SHINE facility real property and local tax rates as provided by the City of Janesville.
SHINE facility organizational expenses are comprised of two key elements:
- Logistical personnel costs include individuals performing duties such as: finance, accounting, licensing, quality, information technology (IT), human resources, and other business supporting roles, as well as supervisory, management, and executive personnel. The SHINE facility logistical personnel cost estimate includes salary and benefits.
- Other administrative costs include insurance costs, IT equipment expenses, legal support, and other costs related to general support of business operations.
2.2 FUNDS TO COVER ESTIMATED OPERATION COSTS NE intends to cover its operating costs through the sale of medical isotopes, primarily Mo-99.
NE has entered into contracts to sell Mo-99 to three customers: GE Healthcare; Lantheus dical Imaging, Inc.; and HTA Co., Ltd. [
]PROP The SHINE facility has significant duction capacity, in excess of the contract obligations, that is available for additional sales to cover the expected operating costs.
le 15.2-2 provides the first five years of Mo-99 sales covered under these contracts, as well he excess production capacity available within this timeframe, and minimum projected itional sales based on available production capacity for the first five years of operation. [
]PROP SHINE is confident of obtaining the funding necessary to cover its expected rating costs by either expanding its existing Mo-99 sales contracts or entering into new Mo-99 s contracts. Medical isotopes sales will fully cover the expected operating costs of the SHINE lity.
NE Medical Technologies 15.2-2 Rev. 1
]PROP he unlikely event that SHINE fails to obtain additional financing or is unable to establish itional Mo-99 sales contracts, SHINE will not be able to operate its facility.
NE Medical Technologies 15.2-3 Rev. 1
Table 15.2 Operating Costs for the First Five Years of Operation (in $ thousands)
Year 1 Year 2 Year 3 Year 4 Year 5 st of Goods Sold (COGS) duction Personnel [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP diation and Processing [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP er Fixed Costs [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP al [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP anizational Expenses ministrative Personnel [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP er Administrative [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP al [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP al Operating Costs [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP NE Medical Technologies 15.2-4 Rev. 1
Table 15.2 Estimated Funding for the First Five Years of Operation (in $ thousands)
Year 1 Year 2 Year 3 Year 4 Year 5 ntract Revenue imum Contract Revenue [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP ximum Contract Revenue [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP jected Additional Mo-99 Sales ilable Facility Production Capacity [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP er maximum contract obligation met) itional Sales Needed [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP erating Costs al Operating Costs [ ]PROP [ ]PROP [ ]PROP [ ]PROP [ ]PROP NE Medical Technologies 15.2-5 Rev. 1
3.1 DECOMMISSIONING REPORT decommissioning report contains information, in accordance with 10 CFR 50.33(k),
cribing how SHINE will provide reasonable assurance that funds will be available for the ommissioning process. The decommissioning report includes:
- a cost estimate for decommissioning the facility;
- the method or methods described in 10 CFR 50.75(e), as applicable, that will be used to provide funds for decommissioning; and
- a description of the means of adjusting the cost estimate and associated funding level periodically over the life of the facility.
3.1.1 Decommissioning Cost Estimate decommissioning cost estimate (DCE) for the SHINE facility is $50,058,000. The estimate siders costs for decommissioning activities as described in NUREG-1757, Volume 3, tion 4.1 and Appendix A.3 (USNRC, 2012), including planning and preparation, ontamination and dismantling of facility components, costs of equipment and supplies, oactive waste characterization, waste packaging and shipment, waste disposal, contingency ts, contractor costs, and radiation surveys. The DCE assumes that decommissioning vities begin immediately after radioisotope production activities and operations involving oactive materials cease. The DCE encompasses the costs necessary to decommission and ase the site for unrestricted use in accordance with 10 CFR 20.1402.
3.1.2 Method to Provide Funds for Decommissioning ccordance with 10 CFR 50.75(e), SHINE will maintain an external escrow account in which osits will be made periodically, coupled with a surety method, insurance, or some other form uarantee. This escrow account, coupled with a surety method, insurance, or some other form uarantee, is intended to provide reasonable assurance that funds will be available to ommission the facility.
3.1.3 Means of Adjusting Decommissioning Cost Estimate and Funding Level decommissioning funding level will be adjusted every three years, or when the amounts or s of materials at the facility change, to demonstrate that a reasonable level of assurance will provided that funds will be available when needed to cover the cost of decommissioning. The nnial adjustments account for inflation, for other changes in the prices of goods and services
., disposal cost increases), for changes in facility conditions or operations, and for changes in ected decommissioning procedures, as applicable. The triennial adjustments account for nges such as:
- leaks and spills of radioactive material producing additional facility contamination or residual radioactivity in on-site subsurface material;
- newly detected facility, soil, or groundwater contamination;
- waste inventory increasing above the amount estimated;
- waste disposal costs increasing above the amount previously estimated, including any additional costs associated with the availability of disposal facilities; NE Medical Technologies 15.3-1 Rev. 1
- on-site disposal remediation costs that exceed previous cost estimates.
NE Medical Technologies 15.3-2 Rev. 1
NE is not owned, controlled, or dominated by an alien, a foreign corporation, or a foreign ernment. SHINE is not acting as an agent or representative of another person in filing this lication.
NE Medical Technologies 15.4-1 Rev. 0
insurance and financial protection requirements of the Price-Anderson Act, pursuant to tion 170 of The Atomic Energy Act (AEA) of 1954, as amended, are applicable to SHINE.
NE has determined that maintaining financial protection in the amount of $1.5M, covering h of the eight utilization facilities and the production facility, satisfies the financial protection uirements of the Price-Anderson Act (SHINE, 2018b). SHINE will also maintain an mnification agreement with the NRC that extends for the life of the license.
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NE, 2018a. Application for Order Approving Indirect Transfer of Control of Construction mit and Conforming Administrative Construction Permit Amendment, SHINE Medical hnologies, Inc., December 11, 2018 (ML18347A215).
NE, 2018b. Request for Confirmation of the 10 CFR Part 140 Financial Protection uirements for the SHINE Facility, SHINE Medical Technologies, Inc., August 27, 2018 18239A219).
NE, 2019. SHINE Medical Technologies, Inc. Application for Order Approving Indirect nsfer of Control of Construction Permit Response to Request for Additional Information, NE Medical Technologies, Inc., March 8, 2019 (ML19071A055).
NRC, 2012. Consolidated Decommissioning Guidance - Financial Assurance, ordkeeping, and Timeliness, NUREG-1757, Volume 3, Revision 1, U.S. Nuclear Regulatory mmission, February 2012 (ML12048A683).
NRC, 2016. Commission Memorandum and Order, CLI-16-04, U.S. Nuclear Regulatory mmission, February 25, 2016 (ML16056A094).
NE Medical Technologies 15.6-1 Rev. 0