ML21140A311

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Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)
ML21140A311
Person / Time
Site: Three Mile Island, 07200077  Constellation icon.png
Issue date: 05/20/2021
From: Gallagher M
Exelon Generation Co
To:
Document Control Desk, Office of Nuclear Material Safety and Safeguards, Office of Nuclear Reactor Regulation
References
TM-21-022
Download: ML21140A311 (19)
v • d • e


Text

Michael P. Gallagher Exelon Nuclear Vice President License Renewal and Decommissioning 200 Exelon Way Kennett Square, PA 19348 610 765 5958 Office 610 765 5658 Fax www.exeloncorp.com michaelp.gallagher@exeloncorp.com 10 CFR 50.12 10 CFR 50.82(a)(8)(i)(A) 10 CFR 50.75(h)(1)(iv)

TM-21-022 May 20, 2021 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, DC 20555-0001 Three Mile Island Nuclear Station, Unit 1 Renewed Facility Operating License No. DPR 50 NRC Docket No. 50-289 and 72-077

Subject:

Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Reference:

1) Letter from Michael P. Gallagher, (Exelon Generation Company, LLC) to U.S.

Nuclear Regulatory Commission - "Site-Specific Decommissioning Cost Estimate for Three Mile Island Nuclear Station, Unit 1," dated April 5, 2019 (ML19095A010)

2) Letter from J. Bradley Fewell (Exelon Generation Company, LLC) to U.S. Nuclear Regulatory Commission, "Certification of Permanent Cessation of Power Operations for Three Mile Island Nuclear Station, Unit 1," dated June 20, 2017 (ML17171A151)
3) Letter from Michael P. Gallagher (Exelon Generation Company, LLC), to U.S.

Nuclear Regulatory Commission, Certification of Permanent Removal of Fuel from the Reactor Vessel for Three Mile Island Nuclear Station, Unit 1, dated September 26, 2019 (ML19269E480)

4) Letter from Justin C. Poole (U.S. Nuclear Regulatory Commission) to Bryan C. Hanson (Exelon Generation Company, LLC), "Three Mile Island Nuclear Station, Unit 1 - Exemptions from the Requirements of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) (EPID L-2019-LLE-0009)," dated October 16, 2019 (ML19259A175)

Pursuant to 10 CFR 50.12, "Specific exemptions," Exelon Generation Company, LLC (Exelon) requests an exemption from 10 CFR 50.82(a)(8)(i)(A) for Three Mile Island Nuclear Station, Unit 1, (TMI-1) to allow use of a portion of the funds from the TMI-1 decommissioning trust fund (DTF) for site restoration based on the TMI-1 decommissioning cost estimate (DCE) (Reference 1). Exelon also requests, pursuant to 10 CFR 50.12, an exemption from 10 CFR 50.75(h)(1)(iv)

U.S. Nuclear Regulatory Commission TMI-1 Request for Exemption Docket No. 50-289 and 72-077 May 20, 2021 Page 2 to allow TMI-1 DTF disbursements for site restoration to be made without prior notice, similar to withdrawals in accordance with 10 CFR 50.82(a)(8).

10 CFR 50.82(a)(8)(i)(A) states that DTFs "may be used by licensees if . . . [t]he withdrawals are for expenses for legitimate decommissioning activities consistent with the definition of decommissioning in § 50.2." The definition of decommissioning in 10 CFR 50.2 pertains to safely removing a facility from service and reducing residual radioactivity for eventual property release (i.e., radiological decommissioning). The U.S. Nuclear Regulatory Commission (NRC) does not construe the 10 CFR 50.2 definition of "decommission" as including activities associated with site restoration.

10 CFR 50.75(h)(1)(iv) similarly requires that trust agreements restrict disbursements (other than for ordinary administrative and other incidental expenses of the fund) to those allowed under Section 50.82(a)(8) and requires a 30-day advance notification to the NRC prior to making disbursements for expenses not covered under Section 50.82(a)(8).

Therefore, exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) are needed to allow Exelon to use DTF for site restoration activities.

The cost estimate provided in Reference 1 discusses estimated costs associated with radiological decommissioning, spent fuel management, and site restoration. Exelon has previously received an exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) that allows use of the DTF for spent fuel management (Reference 4). The Attachment of this letter demonstrates that the DTF contains adequate funds to cover not only the estimated costs of radiological decommissioning and spent fuel management, but also the estimated costs for site restoration activities. Therefore, application of the restrictions in 10 CFR 50.82(a)(8)(i)(A) and 10 CFR50.75(h)(1)(iv) are not necessary to ensure adequate funding for radiological decommissioning of TMI-1. Additionally, the annual reporting requirements in 10 CFR 50.82(a)(8)(v) and (vi) will allow for continued NRC oversight of the status of the DTF.

The requested exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) are permissible under 10 CFR 50.12 because they are authorized by law, will not present an undue risk to the public health and safety, and are consistent with the common defense and security (10 CFR 50.12(a)(1)). In addition, application of the regulations in this particular circumstance is not necessary to achieve the underlying purpose of the rule (10 CFR 50.12(a)(2)(ii)). Since the DTF contains adequate funds to complete radiological decommissioning, spent fuel management, and site restoration activities, these exemptions would not present an undue risk to the public health and safety or prevent decommissioning from being completed as planned.

Exelon recognizes that if this exemption request is approved, amendments to its nuclear decommissioning trust agreements for TMI-1 may be necessary, and that prior notice of material changes to the trust agreements is required by 10 CFR50.75(h)(1)(iii). Based on its preliminary review, Exelon has not identified any amendments to the trust agreements that would be required if the exemption request is approved.

Exelon requests approval of this exemption request by June 10, 2022.

The exemption request is provided in the Attachment to this letter.

This letter contains no new regulatory commitments.

U.S. Nuclear Regulatory Commission TMI-1 Request for Exemption Docket No. 50-289 and 72-077 May 20, 2021 Page 3 If you have any questions concerning this submittal, please contact John Hilditch at (267) 533-5120.

Respectfully, Digitally signed by Gallagher, Gallagher, Michael P Date: 2021.05.20 10:47:52 Michael P

___________________ -04'00' Michael P. Gallagher Vice President, License Renewal & Decommissioning Exelon Generation Company, LLC

Attachment:

Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) cc: w/Attachment Regional Administrator - NRC Region I NRC Project Manager, NMSS/DUWP/RDB - Three Mile Island Director, Bureau of Radiation Protection - PA Department of Environmental Resources

Attachment Three Mile Island Nuclear Station - Unit 1 Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-1 of A-15 1.0 SPECIFIC EXEMPTION REQUEST Pursuant to 10 CFR 50.12, "Specific exemptions, "Exelon Generation Company, LLC (Exelon) requests an exemption from 10 CFR 50.82(a)(8)(i)(A) for Three Mile Island Nuclear Station, Unit 1 (TMI-1) to allow use of a portion of the funds from the TMI-1 decommissioning trust funds (DTF) for site restoration activities. Exelon also requests, pursuant to 10 CFR 50.12, an exemption from 10 CFR 50.75(h)(1)(iv) to allow DTF disbursements for site restoration activities to be made without prior notice, similar to withdrawals in accordance with 10 CFR 50.82(a)(8).

10 CFR 50.82(a)(8)(i)(A) and the applicable provisions of 10 CFR 50.75(h)(1)(iv) are provided below:

Section (a)(8)(i)(A) of 10 CFR 50.82, "Termination of license," states the following:

Decommissioning trust funds may be used by licensees if-- (A) The withdrawals are for expenses for legitimate decommissioning activities consistent with the definition of decommissioning in § 50.2.

10 CFR 50.2, "Definitions," contains the following definition of "decommission:"

to remove a facility or site safely from service and reduce residual radioactivity to a level that permits - (1) Release of the property for unrestricted use and termination of the license; or (2) Release of the property under restricted conditions and termination of the license.

Section (h)(1)(iv) of 10 CFR 50.75, "Reporting and recordkeeping for decommissioning planning,"

states, in part:

Except for withdrawals being made under § 50.82(a)(8) or for payments of ordinary administrative costs (including taxes) and other incidental expenses of the fund (including legal, accounting, actuarial, and trustee expenses) in connection with the operation of the fund, no disbursement or payment may be made from the trust, escrow account, Government fund, or other account used to segregate and manage the funds until written notice of the intention to make a disbursement or payment has been given to the Director, Office of Nuclear Reactor Regulation, Director, Office of New Reactors, or Director, Office of Nuclear Material Safety and Safeguards, as applicable, at least 30 working days before the date of the intended disbursement or payment.

Section (h)(1)(iv) of 10 CFR 50.75 also states, in part:

Disbursements or payments from the trust, escrow account, Government fund, or other account used to segregate and manage the funds, other than for payment of ordinary administrative costs (including taxes) and other incidental expenses of the fund (including legal, accounting, actuarial, and trustee expenses) in connection with the operation of the fund, are restricted to decommissioning expenses or transfer to another financial assurance method acceptable under paragraph (e) of this section until final decommissioning has been completed. After decommissioning has begun and withdrawals from the decommissioning fund are made under § 50.82(a)(8), no further notification need be made to the NRC.

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-2 of A-15 The NRC construes the definition of "decommission" in 10 CFR 50.2 as not including activities associated with site restoration activities.

Exelon has concluded that 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) would prohibit use of DTFs for activities related to site restoration prior to completion of radiological decommissioning. Exelon anticipates maintaining TMI-1 in a safe storage condition (SAFSTOR) for an extended period prior to completion of radiological decommissioning. This will allow radioactive decay to occur, thereby reducing the quantity of contamination and radioactivity that must be disposed of during the decontamination and dismantlement process as well as reducing the associated occupational exposure.

Exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) are requested to allow Exelon to withdraw and use funds from the DTF for site restoration activities. The exemptions would cover all site restoration activities at TMI-1. Table 2 demonstrates that the DTF contains the amount needed to cover the estimated costs of radiological decommissioning (including decommissioning for the proposed Independent Spent Fuel Storage Installation (ISFSI)), spent fuel management activities, and the site restoration activities. Exelon has previously received an exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) that allows use of the DTF for spent fuel management (Reference 1). Since the DTF contains adequate funds to complete radiological decommissioning, spent fuel management activities, and site restoration activities, these exemptions would not present an undue risk to the public health and safety or prevent decommissioning from being completed as planned.

2.0 BACKGROUND

In References 2 and 3, Exelon submitted certifications pursuant to 10 CFR 50.82(a)(1)(i) and (ii),

that TMI-1 has permanently ceased power operations and that all fuel has been permanently removed from the reactor vessel. Therefore, the 10 CFR 50 license for TMI-1 no longer authorizes operation of the reactor or emplacement or retention of fuel into the reactor vessel, as specified in 10 CFR 50.82(a)(2). In Reference 4, the TMI-1 license was amended to allow possession and use the facility for fuel storage and removed the ability to operate the facility.

By letter dated April 5, 2019 (Reference 5), Exelon submitted the TMI-1 Decommissioning Cost Estimate (DCE) pursuant to 10 CFR 50.82(a)(4)(i). The DCE submittal was based on the annual cash flow required for decommissioning TMI-1 based on the retirement date of September 2019 and a SAFSTOR scenario.

3.0 BASIS FOR EXEMPTION REQUEST Exelon continues to anticipate using the SAFSTOR method of decommissioning at TMI-1, which defers completion of radiological decommissioning until after a storage period, thus delaying (absent an exemption) the availability of excess amounts in the DTF for site restoration activities.

Reference 5 provided a site-specific DCE, which estimates the cost of radiological decommissioning, spent fuel management efforts, and site restoration activities.

Table 1 reflects the projected annual expenditures required for radiological decommissioning (including decommissioning for the proposed ISFSI) for TMI-1 based on the SAFSTOR scenario from the Reference 5 cost estimate. The annual expenditures for spent fuel management and site restoration efforts are also reflected in Table 1.

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-3 of A-15 The Reference 5 DCE included costs associated with radiological decommissioning and spent fuel management beginning in 2019. Exelon considers these 2019 and 2020 annual costs to be historical expenditures as of January 1, 2021 and as such they have been excluded from Table

1. As described below, the Trust Fund Value has been adjusted to account for expenditures in those years that have not been reimbursed. None of the Table 1 annual costs associated with radiological decommissioning, spent fuel management, and site restoration in 2021 have been reimbursed from the DTF.

In the Reference 5 DCE, site restoration annual expenditures are projected to begin in 2073.

These costs are reflected in Table 1. However, TMI-1 intends to begin some site restoration activities in 2021 (i.e., removal of emergency sirens, some non-radiological waste, vehicle barrier system (VBS) blocks, and some ancillary buildings). These anticipated early site restoration costs are shown as expenditures in 2021 in Table 1. In total, these costs have been added to the previous site restoration costs from the DCE that were to begin in 2073; the DCE site restoration costs were not adjusted to remove these costs from a later period. This approach is conservative relative to the overall site restoration cost and evaluation of the funds remaining in the DTF after decommissioning.

The Reference 5 DCE is in thousands of June 2018 dollars. The costs in Table 1 have been escalated to December 31, 2020 dollars. The escalation was determined using a forecasted average annual escalation rate of 2.71%. This rate was calculated using the Employment Cost Index Total Compensation Private Industry Workers United States from the North American Industry Classification System (NAICS).

Table 2 provides a cash flow analysis demonstrating that, with credited earnings during the SAFSTOR period, the DTF contains sufficient funds to cover the cost of radiological decommissioning, spent fuel management activities, and site restoration activities.

Table 2 provides the projected annual cash flow from the TMI-1 DTF for decommissioning the site (including radiological decommissioning (including decommissioning for the proposed ISFSI),

spent fuel management, and site restoration) based on the SAFSTOR scenario annual costs from Table 1. The cash flow analysis conservatively assumes all expenses in a year are incurred at the beginning of year (i.e., beginning of year (BOY) convention) during the decommissioning period. A 2% annual real rate of return on the DTF as allowed by 10 CFR 50.75(e)(1)(i) is used in the analysis. Additionally, contributions to the DTF and cost escalation are both assumed to be zero in the Table 2 analysis.

The 2021 BOY Trust Fund Value (analysis starting trust fund balance) in Table 2 is the December 31, 2020 DTF value ($742,497k) less the 2020 site radiological decommissioning costs

($14,663k) and the 2018, 2019, and 2020 spent fuel management costs ($54,673k) that were not yet reimbursed as of December 31. 20201. As of December 31, 2020, a portion of the actual 2020 radiological decommissioning costs for TMI-1 were not yet reimbursed from the DTF due to the timing of the expenses. Therefore, these 2020 radiological decommissioning costs ($14,663k),

are subtracted from the December 31, 2020 DTF balance. Exelon began spent fuel management planning at TMI-1 in 2018, as of December 31, 2020, the actual 2018 and 2019 spent fuel management planning costs for TMI-1 and a portion of the actual 2019 and 2020 spent fuel management costs (costs occurring after permanent defuel) were not yet reimbursed from the 1

The amount not yet reimbursed is an estimate based on the best information obtainable at this time.

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-4 of A-15 DTF as of December 31, 2020. Therefore, these 2018, 2019, and 2020 spent fuel management costs, of $54,673k, are subtracted from the December 31, 2020 DTF balance.

Table 2 demonstrates that the TMI-1 DTF as of December 31, 2020, exceeds the amount required to complete decommissioning (including radiological, spent fuel management, and site restoration) of the site under the SAFSTOR scenario. At the end of the decommissioning project, an estimated $253,689k will remain in the DTF.

4.0 ADJUSTING COST ESTIMATES AND FUNDING LEVELS 10 CFR 50.82(a)(8)(iv) states the following [emphasis added]:

For decommissioning activities that delay completion of decommissioning by including a period of storage or surveillance, the licensee shall provide a means of adjusting cost estimates and associated funding levels over the storage or surveillance period.

Exelon continues to anticipate maintaining TMI-1 in a safe storage condition (SAFSTOR) for an extended period prior to completion of radiological decommissioning. This will allow radioactive decay to occur, thereby reducing the quantity of contamination and radioactivity that must be disposed of during the decontamination and dismantlement process as well as reducing the associated occupational exposure.

Exelons approach to address the requirements of 10 CFR 50.82(a)(8)(iv) with respect to "adjusting [decommissioning] cost estimates and associated funding levels over the storage or surveillance period" is discussed below.

During the SAFSTOR period, the site-specific decommissioning cost estimate will be periodically updated in compliance with Exelon procedures and applicable regulatory requirements.

In accordance with 10 CFR 50.82(a)(8)(iv), decommissioning funding assurance will be reviewed and reported to the NRC annually during the SAFSTOR period. The cost estimates and financial levels will be adjusted in accordance with Regulatory Guide 1.159, "Assuring the Availability of Funds for Decommissioning Nuclear Reactors" (Reference 6) and will be used to demonstrate funding assurance. If the funding assurance demonstration shows the decommissioning trust fund is not sufficient, then an alternate funding mechanism allowed by 10 CFR 50.75(e) and the guidance provided in Regulatory Guide 1.159, will be put in place at an appropriate time.

5.0 JUSTIFICATION FOR EXEMPTIONS AND SPECIAL CIRCUMSTANCES Pursuant to 10 CFR 50.12, the Commission may, upon application by any interested person or upon its own initiative, grant exemptions from the requirements of the regulations of Part 50 which are authorized by law, will not present an undue risk to the public health and safety, and are consistent with the common defense and security. 10 CFR 50.12 also states that the Commission will not consider granting an exemption unless special circumstances are present. As discussed below, this exemption request satisfies the provisions of Section 50.12.

5.1 Exemptions A. The exemptions are authorized by law The proposed exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) would allow Exelon to use a portion of the funds from the decommissioning trust fund for site

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-5 of A-15 restoration activities, consistent with the TMI-1 decommissioning cost estimate. As stated above, 10 CFR 50.12 allows the NRC to grant exemptions from the requirements of 10 CFR Part 50. The proposed exemptions would not result in a violation of the Atomic Energy Act of 1954, as amended, or the Commission's regulations. The NRC has granted exemptions to other licensees to use DTFs for site restoration (see Section 6.0 of this attachment).

Therefore, the exemptions are authorized by law.

B. The exemptions will not present an undue risk to public health and safety The underlying purpose of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50. 75(h)(1)(iv) is to provide reasonable assurance that adequate funds will be available for decommissioning of power reactors within 60 years of cessation of operations. Based on the site-specific cost estimate and the cash flow analysis provided in Tables 1 and 2, use of some of the funds in the trust fund for site restoration activities will not adversely impact Exelon's ability to terminate the TMI-1 license (i.e. complete radiological decommissioning) within 60 years. Furthermore, an exemption from 10 CFR 50.75(h)(1)(iv) to allow Exelon to make withdrawals from the trust fund to cover expenses for site restoration efforts without prior written notification to the NRC will not affect the sufficiency of funds in the trust fund to accomplish radiological decontamination of the site. Additionally, the annual reporting requirements in 10 CFR 50.82(a)(8)(v) and (vi) will allow for continual NRC oversight of the status of the DTF.

Based on the above, no new accident precursors are created by using the trust fund in the proposed manner. Thus, the probability of postulated accidents is not increased. Also, based on the above, the consequences of postulated accidents are not increased. No changes are being made in the types or amounts of effluents that may be released offsite. There is no significant increase in occupational or public radiation exposure. Therefore, the exemptions will not present an undue risk to the public health and safety.

C. The exemptions are consistent with the common defense and security The proposed exemptions would allow Exelon to use a portion of trust funds for site restoration efforts, consistent with the TMI-1 Decommissioning Cost Estimate. This change to enable use of some of the funds in the trust fund for site restoration activities will not alter the scope or availability of sufficient funding for the TMI-1 security program. Therefore, the proposed exemptions are consistent with the common defense and security.

5.2 Special Circumstances Pursuant to 10 CFR 50.12(a)(2), the NRC will not consider granting an exemption to its regulations unless special circumstances are present. Exelon has determined that special circumstances are present as discussed below.

A. Application of the regulation in the particular circumstances would not serve the underlying purpose of the rule or is not necessary to achieve the underlying purpose of the rule. (10 CFR 50.12(a)(2)(ii))

The underlying purpose of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50. 75(h)(1)(iv) is to provide reasonable assurance that adequate funds will be available for decommissioning of power reactors within 60 years of cessation of operations. Strict application of the rule would prohibit withdrawal of funds from the DTF for activities associated with site restoration activities until final radiological decommissioning at TMI-1 has been completed. However, Tables 1 and 2

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-6 of A-15 (as discussed above) demonstrate that adequate funds are available in the DTF to complete radiological decommissioning, spent fuel management activities, and site restoration. The Table 2 cash flow analysis projects that the DTF will contain $253.7 million at the end of the decommissioning project in 2081 (using a 0.0% escalation rate and a 2.0% annual fund growth rate on remaining funds).

The 30-day notification provision in 10 CFR 50.75(h)(1)(iv) was not intended to duplicate other reporting requirements that would exist after a plant commences decommissioning. The underlying purpose of notifying the NRC prior to withdrawal of funds from the DTF is to provide opportunity for NRC intervention, when deemed necessary, if the withdrawals are for expenses other than those authorized by 10 CFR 50.75(h)(1)(iv) and 10 CFR 50.82(a)(8) that could result in insufficient funds in the DTF to accomplish radiological decontamination of the site.

A comment, received during the rulemaking for the Decommissioning Trust Fund Provisions in 10 CFR 50.75(h)(1)(iv), noted that licensees that have complied with the requirements of 10 CFR 50.82(a)(4) regarding submittal of a Post-Shutdown Decommissioning Activities Report (PSDAR) and control disbursements in accordance with the provisions of 10 CFR 50.82(a)(6), (a)(7), and (a)(8) should be exempt from further restrictions on disbursements (Reference 7). The NRC agreed with the comment because requiring notification in such circumstances would not provide any additional assurance that funding is available and would duplicate notification requirements in 10 CFR 50.82. If the NRC grants the requested exemption allowing Exelon to use some of the funds in its DTF for site restoration activities, the same consideration would justify dispensing with the 30-day notification requirement as well. The decommissioning cost estimate identifies the estimated annual expenditures, and the annual reporting requirements in 10 CFR 50.82(a)(8)(v) and (vi) will allow continual NRC oversight of the status of the trust fund. Applying the 30-day advance notification requirement in 10 CFR 50.75(h)(1)(iv) to disbursements for site restoration activities would duplicate these other reporting requirements and is not necessary to achieve the underlying purposes of the rule.

Therefore, since the underlying purposes of the rules would be achieved by allowing Exelon to use the DTF to fund the activities as discussed in the TMI-1 cost estimate, the special circumstances of 10 CFR 50.12(a)(2)(ii) are present.

B. Compliance would result in undue hardship or other costs that are significantly in excess of those contemplated when the regulation was adopted, or that are significantly in excess of those incurred by others similarly situated. (10 CFR 50.12(a)(2)(iii))

The NRC did not intend to prevent the use of these funds solely because they are commingled, and to do so would create an unnecessary financial burden without any corresponding safety benefit. The NRC does not preclude use of funds from the decommissioning trust in excess of those needed for radiological decommissioning for other purposes, such as spent fuel management efforts and site restoration activities. The NRC has stated that funding for spent fuel management activities and site restoration activities may be commingled in the decommissioning trust provided the licensee is able to identify and account for the radiological decommissioning funds separately from the funds set aside for spent fuel

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-7 of A-15 management and site restoration activities (see NRC Regulatory Issue Summary 2001-07, Revision 1, "10 CFR 50.75 Reporting and Recordkeeping for Decommissioning Planning" dated January 8, 2009 (Reference 8), and Regulatory Guide 1.184, Revision 1, "Decommissioning of Nuclear Power Reactors," (Reference 9)). The adequacy of the trust fund to cover the cost of activities associated with radiological decommissioning, spent fuel management, and site restoration is supported by the provided cash flow analysis. The amount of funds required for radiological decommissioning, spent fuel management, and site restoration activities will be identified and accounted for in the annual report required by 10 CFR 50.75(f) and 10 CFR 50.82(a)(8).

If Exelon cannot use its trust fund for site restoration activities, it would be forced to provide additional funding that would not be recoverable from the trust fund until the TMI-1 operating license is terminated. To prevent access to the excess funds in the trust would impose an unnecessary and undue burden in excess of that contemplated when the regulation was adopted without any corresponding safety benefit.

Therefore, compliance with the rule would result in an undue hardship or other costs that are significantly in excess of those contemplated when the regulation was adopted, or that are significantly in excess of those incurred by others similarly situated and the special circumstances of 10 CFR 50.12(a)(2)(iii) are present.

6.0 PRECEDENT The exemption request for 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50. 75(h)(1)(iv) is consistent with exemption requests that recently have been issued by the NRC for other nuclear power reactor facilities beginning decommissioning. Specifically, the NRC granted similar exemptions to Oyster Creek Nuclear Power Station (Reference 10), Florida Power & Light Company for Duane Arnold Energy Center (Reference 11), to Pacific Gas and Electric Company for Diablo Canyon Nuclear Power Plant (Reference 12); and to Entergy Nuclear Operations, Inc for Pilgrim Nuclear Power Station (Reference 13).

7.0 ENVIRONMENTAL ASSESSMENT The proposed exemption meets the eligibility criterion for categorical exclusion set forth in 10 CFR 51.22(c)(25), because the proposed exemption involves: (i) no significant hazards consideration; (ii) no significant change in the types or significant increase in the amounts of any effluents that may be released offsite; (iii) no significant increase in individual or cumulative public or occupational radiation exposure; (iv) no significant construction impact; (v) no significant increase in the potential for or consequences from radiological accidents; and (vi) the requirements from which the exemption is sought involve: (H) surety, insurance, or indemnity requirements.

Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared in connection with the proposed exemption.

(i) No Significant Hazards Consideration Determination Exelon has evaluated the proposed exemption to determine whether or not a significant hazards consideration is involved by focusing on the three standards set forth in 10 CFR 50.92 as discussed below:

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-8 of A-15

1. Does the proposed exemption involve a significant increase in the probability or consequences of an accident previously evaluated?

Response: No.

The proposed exemptions would allow Exelon to withdraw funds from the Three Mile Island Nuclear Station's (TMI-1) decommissioning trust fund (DTF) to conduct activities associated with site restoration in accordance with the TMI-1 decommissioning cost estimate. The proposed exemptions have no effect on plant structures, systems, and components (SSCs) and no effect on the capability of any plant SSC to perform its design function. The proposed exemptions would not increase the likelihood of the malfunction of any plant SSC. The proposed exemptions would have no effect on any of the previously evaluated accidents in the TMI-1 Updated Final Safety Analysis Report. Use of funds in the DTF as allowed under the exemptions will not affect the probability of occurrence of any previously analyzed accident.

Therefore, the proposed exemption does not involve a significant increase in the probability or consequences of an accident previously evaluated.

2. Do the proposed exemptions create the possibility of a new or different kind of accident from any accident previously evaluated?

Response: No.

The proposed exemption does not involve a physical alteration of the plant. No new or different type of equipment will be installed and there are no physical modifications to existing equipment associated with the proposed exemption. Similarly, the proposed exemption will not physically change any SSCs involved in the mitigation of any accidents. Thus, no new initiators or precursors of a new or different kind of accident are created. Furthermore, the proposed exemption does not create the possibility of a new accident as a result of new failure modes associated with any equipment or personnel failures. No changes are being made to parameters within which the plant is normally operated, or in the setpoints which initiate protective or mitigative actions, and no new failure modes are being introduced.

Therefore, the proposed exemption does not create the possibility of a new or different kind of accident from any accident previously evaluated.

3. Do the proposed exemptions involve a significant reduction in a margin of safety?

Response: No.

The proposed exemption does not alter the design basis or any safety limits for the plant. The proposed exemption does not impact station operation or any plant SSC that is relied upon for accident mitigation.

Therefore, the proposed exemption does not involve a significant reduction in a margin of safety.

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-9 of A-15 Based on the above, Exelon concludes that the proposed exemption presents no significant hazards consideration and, accordingly, a finding of "no significant hazards consideration" is justified.

(ii) There is no significant change in the types or significant increase in the amounts of any effluents that may be released offsite.

There are no expected changes in the types, characteristics, or quantities of effluents discharged to the environment associated with the proposed exemption. There are no materials or chemicals introduced into the plant that could affect the characteristics or types of effluents released offsite. In addition, the method of operation of waste processing systems will not be affected by the exemption. The proposed exemption will not result in changes to the design basis requirements of SSCs that function to limit or monitor the release of effluents. All the SSCs associated with limiting the release of effluents will continue to be able to perform their functions. Therefore, the proposed exemption will result in no significant change to the types or significant increase in the amounts of any effluents that may be released offsite.

(iii) There is no significant increase in individual or cumulative public or occupational radiation exposure.

The proposed exemptions do not involve any physical alterations to the plant configuration or any changes to the operation of the facility that could lead to a significant increase in individual or cumulative occupational radiation exposure.

(iv) There is no significant construction impact.

No construction activities are associated with the proposed exemption.

(v) There is no significant increase in the potential for or consequences from radiological accidents.

See the no significant hazards considerations discussion in Item (i)(1) above.

(vi) The requirements from which exemption is sought involve: (H) surety, insurance, or indemnity requirements.

The underlying purpose of the requirements from which exemptions are sought is to provide reasonable assurance that adequate funds will be available for decommissioning of power reactors within 60 years of cessation of operations. These requirements provide surety for decommissioning funding.

8.0 CONCLUSION

The proposed exemptions would allow Exelon to use the TMI-1 decommissioning trust fund for the site restoration as described in the decommissioning cost estimate and to make such disbursements in the same manner as withdrawals for radiological decommissioning.

Granting these exemptions will be consistent with the purposes underlying NRC decommissioning regulations as the exemptions: (1) would not foreclose release of the site for possible unrestricted use; (2) would not result in significant environmental impacts not previously reviewed by the NRC;

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-10 of A-15 and (3) would not undermine the existing and continuing reasonable assurance that adequate funds will be available for decommissioning.

Pursuant to the provisions of 10 CFR 50.12, Exelon is requesting a permanent exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) for TMI-1. Based on the considerations discussed above, the requested exemption is authorized by law, will not present an undue risk to the public health and safety, and is consistent with the common defense and security. In addition, special circumstances are present as set forth in 10 CFR 50.12(a)(2)(ii) and (iii).

9.0 REFERENCES

1. Letter from Justin C. Poole (U.S. Nuclear Regulatory Commission) to Bryan C. Hanson (Exelon Generation Company, LLC), "Three Mile Island Nuclear Station, Unit 1 -

Exemptions from the Requirements of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) (EPID L-2019-LLE-0009)," dated October 16, 2019 (ADAMS Accession No. ML19259A175)

2. Letter from J. Bradley Fewell (Exelon Generation Company, LLC) to U.S. Nuclear Regulatory Commission, "Certification of Permanent Cessation of Power Operations for Three Mile Island Nuclear Station, Unit 1," dated June 20, 2017 (ADAMS Accession No. ML17171A151)
3. Letter from Michael P. Gallagher, (Exelon Generation Company, LLC) to U.S. Nuclear Regulatory Commission - "Certification of Permanent Removal of Fuel from the Reactor Vessel for Three Mile Island Nuclear Station, Unit 1," dated September 26, 2019 (ADAMS Accession No. ML19269E480)
4. Letter from Justin C. Poole (U.S. Nuclear Regulatory Commission) to Bryan C. Hanson (Exelon Generation Company, LLC), "Three Mile Island Nuclear Station, Unit 1 - Issuance of Amendment No. 297 Re: Defueled Technical Specifications and Revised License Conditions (EPID L-2018-LLA-0204)," dated August 29, 2019 (ADAMS Accession No. ML19211D317)
5. Letter from Michael P. Gallagher, (Exelon Generation Company, LLC) to U.S. Nuclear Regulatory Commission - "Site-Specific Decommissioning Cost Estimate for Three Mile Island Nuclear Station, Unit 1," dated April 5, 2019 (ADAMS Accession No. ML19095A010)
6. Regulatory Guide 1.159, "Assuring the Availability of Funds for Decommissioning Nuclear Reactors," Revision 2, dated October 2011 (ADAMS Accession No. ML112160012)
7. Federal Register Notice, 67 FR 78332, Decommissioning Trust Provisions, dated December 24, 2002
8. NRC Regulatory Issue Summary 2001-07, Revision 1, "10 CFR50.75 Reporting and Recordkeeping for Decommissioning Planning," dated January 8, 2009 (ADAMS Accession No. ML083440158)
9. Regulatory Guide 1.184, Revision 1, "Decommissioning of Nuclear Power Reactors,"

dated October 2013 (ADAMS Accession No. ML13144A840)

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-11 of A-15

10. Letter from U.S. Nuclear Regulatory Commission to Bryan C. Hanson, (Exelon Generation, LLC), "Oyster Creek Nuclear Power Station - Issuance of Exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) (EPID L-2018-LLM-0002)," dated June 20, 2019 (ADAMS Accession No. ML19113A204 and ML19170275)
11. Letter from U.S. Nuclear Regulatory Commission to Don Moul (Florida Power & Light Company); "Duane Arnold Energy Center - Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 50.75(h)(1)(iv) (EPID L-2020-LLE-0011)," dated August 12, 2020 (ADAMS Accession No. ML20171A626)
12. Letter from U.S. Nuclear Regulatory Commission to James M. Welsch, (Diablo Canyon Nuclear Power Plant), "Diablo Canyon Nuclear Power Plant, Units 1 and 2 - Exemptions from the Requirements of 10 CFR Part 50, Sections 50.82(a)(8)(i)(A) and 50.82(a)(8)(ii))

(EPID L-2018-LLE-0023)," dated September 10, 2019 (ADAMS Accession No. ML19163A104)

13. Letter from U.S. Nuclear Regulatory Commission to Brian R. Sullivan, (Entergy Nuclear Operations, Inc), "Pilgrim Nuclear Power Station - Request for Exemptions from 10 CFR s 50.82(a)(8)(i)(A) and 50.75(h)(1)(iv) (EPID L-2018-LLE-0020)," dated August 22, 2019 (ADAMS Accession No. ML19192A083)

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-12 of A-15 Table 1 RADIOLOGICAL DECOMMISSIONING, SPENT FUEL MANAGEMENT AND SITE RESTORATION ANNUAL EXPENDITURES FOR SAFSTOR THREE MILE ISLAND NUCLEAR STATION UNIT 1 (December 31, 2020 dollars, thousands)

Radiological Decommissioning Spent Fuel Site Restoration Year Costs Management Costs Costs Total Costs(a) 2021 48,053 26,735 2,135 76,924 2022 40,031 15,752 0 55,784 2023 10,618 129 0 10,748 2024 9,579 1,199 0 10,778 2025 6,376 4,371 0 10,748 2026 6,376 4,371 0 10,748 2027 6,376 4,371 0 10,748 2028 6,394 4,383 0 10,777 2029 6,376 4,371 0 10,748 2030 6,376 4,371 0 10,748 2031 6,376 4,371 0 10,748 2032 6,394 4,383 0 10,777 2033 6,376 4,371 0 10,748 2034 6,371 7,775 0 14,146 2035 6,359 14,511 0 20,870 2036 6,003 0 0 6,003 2037 5,986 0 0 5,986 2038 5,986 0 0 5,986 2039 5,986 0 0 5,986 2040 6,003 0 0 6,003 2041 5,986 0 0 5,986 2042 5,986 0 0 5,986 2043 5,986 0 0 5,986 2044 6,003 0 0 6,003 2045 5,986 0 0 5,986 2046 5,986 0 0 5,986 2047 5,986 0 0 5,986 2048 6,003 0 0 6,003 2049 5,986 0 0 5,986 2050 5,986 0 0 5,986 2051 5,986 0 0 5,986 2052 6,003 0 0 6,003 2053 5,986 0 0 5,986 2054 5,986 0 0 5,986 2055 5,986 0 0 5,986 2056 6,003 0 0 6,003 2057 5,986 0 0 5,986 2058 5,986 0 0 5,986 2059 5,986 0 0 5,986 2060 6,003 0 0 6,003 2061 5,986 0 0 5,986 2062 5,986 0 0 5,986 2063 5,986 0 0 5,986 2064 6,003 0 0 6,003 2065 5,986 0 0 5,986 2066 5,986 0 0 5,986 2067 5,986 0 0 5,986 2068 6,003 0 0 6,003

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-219 and 72-15 Page A-13 of A-15 Table 1 (Continued)

Radiological Decommissioning Spent Fuel Site Restoration Year Costs Management Costs Costs Total Costs(a) 2069 5,986 0 0 5,986 2070 5,986 0 0 5,986 2071 5,986 0 0 5,986 2072 6,003 0 0 6,003 2073 26,013 0 345 26,358 2074 64,456 0 1,392 65,849 2075 158,231 0 2,567 160,798 2076 119,679 0 1,654 121,333 2077 79,864 0 847 80,712 2078 79,681 0 843 80,523 2079 34,545 0 10,716 45,261 2080 140(b) 0 42,155 42,295 2081 100(b) 0 30,172 30,272 Totals(a) 962,798 105,467 92,827 1,161,092 (a)Cash flows may not add due to rounding.

(b)2080 and 2081 Radiological Decommissioning Costs are administrative expenses associated with submitting a final report to the NRC following license termination and do not include any physical decommissioning work.

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-289 and 72-077 Page A-14 of A-15 Table 2 ANNUAL SAFSTOR DECOMMISSIONING FUND CASH FLOW FOR THREE MILE ISLAND NUCLEAR STATION, UNIT 1 (December 31, 2020 dollars, thousands)

Year Total Costs(a) BOY Trust BOY Trust Fund Value Trust Fund EOY Trust Fund Fund Value Less Cost Earnings(b) Value(c) 2021 76,924 673,162(d) 596,238 11,925 608,163 2022 55,784 608,163 552,379 11,048 563,427 2023 10,748 563,427 552,679 11,054 563,733 2024 10,778 563,733 552,955 11,059 564,014 2025 10,748 564,014 553,266 11,065 564,332 2026 10,748 564,332 553,584 11,072 564,656 2027 10,748 564,656 553,908 11,078 564,986 2028 10,777 564,986 554,209 11,084 565,293 2029 10,748 565,293 554,546 11,091 565,637 2030 10,748 565,637 554,889 11,098 565,987 2031 10,748 565,987 555,239 11,105 566,344 2032 10,777 566,344 555,567 11,111 566,678 2033 10,748 566,678 555,931 11,119 567,049 2034 14,146 567,049 552,904 11,058 563,962 2035 20,870 563,962 543,092 10,862 553,954 2036 6,003 553,954 547,951 10,959 558,910 2037 5,986 558,910 552,924 11,058 563,982 2038 5,986 563,982 557,996 11,160 569,156 2039 5,986 569,156 563,170 11,263 574,433 2040 6,003 574,433 568,431 11,369 579,799 2041 5,986 579,799 573,813 11,476 585,289 2042 5,986 585,289 579,303 11,586 590,889 2043 5,986 590,889 584,903 11,698 596,601 2044 6,003 596,601 590,598 11,812 602,410 2045 5,986 602,410 596,424 11,928 608,352 2046 5,986 608,352 602,366 12,047 614,413 2047 5,986 614,413 608,427 12,169 620,595 2048 6,003 620,595 614,593 12,292 626,885 2049 5,986 626,885 620,898 12,418 633,316 2050 5,986 633,316 627,330 12,547 639,877 2051 5,986 639,877 633,890 12,678 646,568 2052 6,003 646,568 640,565 12,811 653,377 2053 5,986 653,377 647,390 12,948 660,338 2054 5,986 660,338 654,352 13,087 667,439 2055 5,986 667,439 661,453 13,229 674,682 2056 6,003 674,682 668,679 13,374 682,053 2057 5,986 682,053 676,066 13,521 689,588 2058 5,986 689,588 683,601 13,672 697,273 2059 5,986 697,273 691,287 13,826 705,113 2060 6,003 705,113 699,110 13,982 713,092 2061 5,986 713,092 707,106 14,142 721,248 2062 5,986 721,248 715,262 14,305 729,567 2063 5,986 729,567 723,581 14,472 738,052 2064 6,003 738,052 732,050 14,641 746,691 2065 5,986 746,691 740,704 14,814 755,518 2066 5,986 755,518 749,532 14,991 764,523 2067 5,986 764,523 758,537 15,171 773,707 2068 6,003 773,707 767,705 15,354 783,059 2069 5,986 783,059 777,072 15,541 792,614 2070 5,986 792,614 786,628 15,733 802,360 2071 5,986 802,360 796,374 15,927 812,301 2072 6,003 812,301 806,299 16,126 822,425

Attachment Request for Exemption from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)

Docket Nos. 50-219 and 72-15 Page A-15 of A-15 Table 2 (Continued)

Year Total Costs(a) BOY Trust BOY Trust Fund Value Trust Fund EOY Trust Fund Fund Value Less Cost Earnings(b) Value(c) 2073 26,358 822,425 796,067 15,921 811,988 2074 65,849 811,988 746,140 14,923 761,062 2075 160,798 761,062 600,265 12,005 612,270 2076 121,333 612,270 490,937 9,819 500,755 2077 80,712 500,755 420,044 8,401 428,445 2078 80,523 428,445 347,922 6,958 354,880 2079 45,261 354,880 309,619 6,192 315,811 2080 42,295 315,811 273,517 5,470 278,987 2081 30,272 278,987 248,715 4,974 253,689 Totals(c) 1,161,092 (a)

Annual SAFSTOR decommissioning cost (radiological + spent fuel + site restoration)

(b) A 2% annual real rate of return is used as allowed by 10 CFR 50.75(e)(1)(i)

(c) Cash flows may not add due to rounding (d) The 2021 BOY Trust Fund Value is the value of the decommissioning trust as of 12/31/2020 less the 2020 radiological decommissioning and 2018, 2019, and 2020 spent fuel management / ISFSI costs that have not yet been reimbursed, $14,663k and $54,673k respectively.

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