ML22089A243
| ML22089A243 | |
| Person / Time | |
|---|---|
| Site: | Kewaunee  |
| Issue date: | 03/30/2022 |
| From: | Lawrence D Dominion Energy Kewaunee |
| To: | Document Control Desk, Office of Nuclear Reactor Regulation |
| References | |
| 22-053 | |
| Download: ML22089A243 (1) | |
Text
Dominion Energy Kewaunee, Inc.
5000 Dominion Boulevard, Glen Allen, VA 23060 DominionEnergy.com
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Dominion
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Energy"'
March 30, 2022 U.S. Nuclear Regulatory Commission Attention: Document Control Desk Washington, D. C. 20555-0001 DOMINION ENERGY KEWAUNEE, INC.
KEWAUNEE POWER STATION Serial No.:
NRA/ENC:
Docket No.:
License No.:
DECOMMISSIONING FUNDING STATUS REPORT, FINANCIAL TEST AND INDEPENDENT PUBLIC ACCOUNTANTS' LETTER OF ATTESTATION 22-053 RO 50-305 DPR-43 Pursuant to 10 CFR 50.75(f)(1) and 10 CFR 50.82(a)(8)(v)-(vii), Dominion Energy Kewaunee, Inc. (DEK) is providing this report on the status of decommissioning funding for Kewaunee Power Station (KPS). provides the following information for KPS:
Table I Decommissioning Funding Status Report for KPS:
Summary Information as of December 31, 2021 Table II Decommissioning Funding Status Report for KPS:
Annual Cash Flow Analysis Starting January 1, 2022 through End of Decommissioning The following information is provided in support and as part of this filing:
- 1.
The escalation of decommissioning costs from the Cost Study's 2018 dollars to 2022 dollars is 2.88% and is based upon the average of CPI-U rates, Bureau of Labor Statistics, FCPIU.US CPI: Consumer Price Index for All Urban Consumers, (Index, 1982-84=100, SA) for that period.
- 2.
The escalation of decommissioning costs shown in Table II is held at 0.0% based on assuming a 2.0% Real Rate of Return (RRoR).
- 3.
The growth rate on Trust Funds is held at the allowed 2.0% Real Rate of Return over the escalation rate.
- 4.
No rate regulatory authority citation for KPS is referenced because KPS is a merchant unit.
- 5.
There are no contracts upon which DEK is relying under paragraph 10 CFR 50.75(e)(1)(v) and there were no modifications to the current methbd of providing financial assurance since the last submitted report.
Serial No.: 22-053 Docket No.: 50-305 KPS Decommissioning Funding Status Report Page 2 of 3
- 6.
There are no annual funding amounts for KPS.
- 7.
Trust Fund balances shown in this report are market value and after-tax on realized gains and losses. The Trust Fund balances have not been adjusted for unrealized gain or loss positions not currently taxable.
- 8.
Since the previous annual submittal on March 25, 2021 (Serial No.21-081, ADAMS Accession No. ML21084A800) there have been no changes to the Trust agreements established for nuclear decommissioning of KPS.
Additionally, in a submittal dated January 28, 2015 (Serial No.15-001, ADAMS Accession No. ML15034A312), Dominion Resources, Inc. (now known as Dominion Energy, Inc.)
committed to provide ongoing information pertaining to its continuing ability to provide additional financial assurance by submitting, by March 31 of each year, in connection with DEK's annual financial assurance status report; (1) Information demonstrating the results of the financial test in either Paragraph I1.A.1 or Paragraph I1.A.2 of Appendix A to 10 CFR Part 30 for the immediately preceding calendar year, and; (2) A letter from its independent certified public accountant attesting to the data and accuracy of the financial test1. This information is included in Attachments 1 and 2, respectively.
Please contact Mr. Craig D. Sly at (804) 273-2784 if you have any questions or require additional information.
Sincerely, Vice President - Nuclear Engineering and Fleet Support Dominion Energy Kewaunee, Inc.
Enclosure:
- 1.
Decommissioning Funding Status Report for KPS: Summary Information as of December 31, 2021 1 DEK is aware that the American Institute of Certified Public Accountants (AICPA) has informed the NRC that certified public accountants are precluded from issuing any form of report or assurance on matters related to solvency. (See ADAMS Accession No. ML13094A316.)
Attachments:
Serial No.: 22-053 Docket No.: 50-305 KPS Decommissioning Funding Status Report Page 3 of 3
- 1.
Financial Test for Year Ended December 31, 2021, Paragraph I1.A.2 of Appendix A to 10 CFR Part 30
- 2.
Deloitte & Touche LLP Attesting Letter of Accuracy of the Financial Test Commitments made in this letter: None cc:
U.S. Nuclear Regulatory Commission, Region Ill 2443 Warrenville Road, Suite 210 Lisle, Illinois 60532-4352 Ms. Marlayna Doell NRC Senior Project Manager - Kewaunee Power Station U.S. Nuclear Regulatory Commission Mail Stop T-5A 10 Washington, DC 20555-0001
ENCLOSURE Serial No.: 22-053 Docket No.: 50-305 Decommissioning Funding Status Report for KPS:
Summary Information as of December 31, 2021 Kewaunee Power Station Dominion Energy Kewaunee, Inc. (DEK)
Serial No.: 22-053 Docket No.: 50-305 KPS Decommissioning Funding Status Report Enclosure, Page 1 of 4 Table I. Decommissioning Funding Status Report for KPS: Summary Information as of December 31, 2021
[10 CFR 50.82 (a)(8)(v)-(vii)]
(in millions of dollars)
DECOMMISSIONING TRUST FUND BALANCES 10 CFR Reference(s): 50.82(a)(B)(v)(A); 50.82(a)(8)(vii)(AJ Fund Balance Type of Trusts Comments 971.8 Qualified fund balance As of:
12/31/2021 Non-qualified fund balance As of:
12/31/2021 136.6 Less costs incurred but not yet billed to Trust Actual Cost in:
As-Spent Dollars 835.2 Adjusted decommissioning fund balance As of:
12/31/2021 OTHER FINANCIAL ASSURANCE METHODS BEING RELIED UPON 10 CFR Reference(s): 50.82(a)(8)(v)(A)
None PRIOR YEARS DECOMMISSIONING EXPENDITURES 10 CFR Reference(s): 50.82(a){8)(v)(A)
Total License Tenn Spent Fuel Mgmt Site Restoration Comments 22.0 14.0 8.0 2021 Cost in:
2021 Dollars 302.1 117.2 184.9 2001-2020 Cost in:
As-Spent Dollars 324.1 131.2 192.9 Total Prior Year in:
As-Spent Dollars PRIOR YEAR ExPENDITURES-VARIANCE TO ESTIMATED ESCALATED COST 10 CFR Reference(s): 50.82(a)(8)(v)(B)
Total License Tenn Spent Fuel Mgmt Site Restoration Comments s
22.0 14.0 8.0 Actual Cost in:
2021 Dollars s
8.2 s 2.0 6.2 NRC Auth $ in:
2021 Dollars 13.8 12.0 1.8 Variance: Higher planning, overhead, t8JCes, and staffing costs REMAINING DECOMMISSIONING ESTIMATED COST 10 CFR Reference(s): 50.82(a)(8)(v)(B); 50.82(a)(8)(vi1)(B)
Total License Tenn Spent Fuel Mgmt Site Restoration Comments 951.7 594.0 s 314.9 s
42.8 Estimate in:
2022 Dollars DECOMMISSIONING CRITERIA UPON WHICH THE ESTIMATE IS BASED 10 CFR Reference(s): 50.82(a)(B)(v)(B)
SAFSTOR ANY MODIFICATION To METHOD OF PROVIDING FINANCIAL ASSURANCE 10 CFR Reference(s): 50.82(a)(8)(v)(C)
None ANY MATERIAL CHANGES To TRUST AGREEMENT SINCE PREVIOUS REPORT 10 CFR Reference(s): 50.82(a)(8)(v)(D)
None NEED FOR ADDITIONAL FINANCIAL ASSURANCE 10 CFR Reference(s): 50.82(a)(8)(vi); 50.82(a)(8)(vii)(C)
None See Annual Cash Flow Analysis in Table II INPUTS TO REMAINING COST AND FUNDING ANALYSIS 2022 Start year of analysis 2.88%
Escalate study dollars from 2018% to Start Year of Analysis using CPI average (2018 to 2022) 0.00%
Escalation rate 2022
& Beyond 2.00%
Fund growth rate 2022
& Beyond (Reflects NRC allowed 2% Real Rate of Return (RRoR))
annual expenditures Projected annual expenditures - see Annual Cash Flow Analysis in Table II
Year 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 2061 2062 2063 2064 2065 2066 2067 2068 2069 2070 2071 2072 2073 Remaining $ in Serial No.: 22-053 Docket No.: 50-305 KPS Decommissioning Funding Status Report Enclosure, Page 2 of 4 Table 2. Decommissioning Funding Status Report for KPS:
Annual Cash Flow Analysis Starting January 1, 2022 through End of Decommissioning
[10 CFR 50.82 (a)(S)(v)-(vii)]
(in millions of dollars)
CO!.UMN 1 COLUMN2 COLUMN3 COLUMN4 COLUMNS COLUMNS COLUMN7 Beginning Earnings Remaining Remaining Remaining Remaining End License of on Tennlnation Spent Fuel Mgmt Site Restoration SAFSTOR of Year Trust Funds Expenditures Expenditures Expenditures Expenditures Year Balance (Reflects 2% RRoR)
(Reflects 0% Esc)
(Reflects 0% Esc)
(Reflects 0% Esc)
(Reflects 0-k Esc)
Balance 835.2 s
16.6 3.4 10.3 s
13.7 838.1 s
838.1 16.6 3.8 10.4 s
14.2 840.5 840.5 16.7 3.5 10.3 13.8 843.4 843.4 16.7 3.2 10.4 s
13.6 s
846.5 846.5 16.8 3.2 10.3 13.5 849.8 849.8 16.9 s
2.4 9.5 11.9 s
854.8 854.8 17.0 2.8 10.0 12.8 859.0 859.0 17.1 2.3 s
9.5 s
11.8 864.3 864.3 17.2 2.4 9.5 11.9 869.6 869.6 17.3 2.4 9.5 11.8 875.0 875.0 17.4 2.4 9.5 11.9 880.5 880.5 17.5 3.6 11.2 14.8 883.1 883.1 17.5 2.4 9.5 11.9 888.7 888.7 17.7 2.3 9.5 s
11.8 894.6 894.6 17.8 2.4 9.9 s
12.3 900.0 900.0 17.9 2.4 9.5 11.9 906.0 s
906.0 s
18.0 2.5 9.6 s
12.1 911.9 911.9 18.1 2.2 9.5 11.6 918.4 918.4 18.2 2.2 9.5 11.7 924.9 924.9 18.4 2.2 9.8 12.0 s
931.2 931.2 18.5 2.2 9.5 11.7 938.1 938.1 s
18.6 2.5 9.6 s
12.1 s
944.7 944.7 18.8 2.2 9.5 11.6 s
951.8 951.8 18.9 2.3 9.8 s
12.1 958.6 958.6 19.1 2.2 9.8 12.0 965.7 965.7 19.2 2.2 9.5 s
11.7 973.1 s
973.1 19.3 2.7 s
10.9 13.6 978.9 978.9 s
19.5 2.2 9.5 s
11.7 986.6 986.6 s
19.6 2.2 9.5 11.6 994.6 994.6 s
19.8 2.2 9.8 12.0 1.002.4 1,002.4 19.9 2.2 14.8 17.0 1,005.2 1,005.2 20.1 4.3 s
4.3 1,021.0 1,021.0 s
20.4 s
3.9 s
s s
3.9 1,037.5 s
1,037.5 20.7 3.8 s
s 3.8 1,054.4 1,054.4 21.1 3.8 s
3.8 1,071.7 1,071.7 21.4 3.8 3.8 1,089.3 s
1,089.3 s
21.7 4.1 s
s 4.1 1,107.0 1,107.0 22.1 3.8 s
3.8 1,125.3 s
1,125.3 22.5 3.9 s
3.9 1,143.9 1,143.9 s
22.8 s
3.8 s
s 3.8 1,162.9 s
1,162.9 23.2 3.8 s
3.8 1,182.4 s
1,182.4 s
23.6 s
4.1 s
s 4.1 1,201.9 1,201.9 s
24.0 s
3.8 s
3.8 1,222.1 s
1,222.1 24.4 3.8 s
3.8 1,242.7 1,242.7 24.8 5.3 5.3 1,262.2 1,262.2 25.1 11.3 11.3 1,276.0 1,276.0 25.0 48.3 48.3 s
1,252.7 1,252.7 24.0 105.1 105.1 s
1,171.7 1,171.7 s
22.2 123.6 s
0.6 124.1 1,069.7 s
1,069.7 20.3 103.3 1.3 s
6.9 111.6 978.4 978.4 s
18.6 s
64.4 3.5 s
24.7 92.6 904.5 904.5 s
17.9 3.4 s
0.1 11.1 14.6 907.8 2022 Dollars 594.0 314.9 42.8 951.7 Est Fund Balance (end of Decommissioning) Qn Future$ escalated at 0.0% & 2.0% Real Rate of Return Fund Growth Rate) 907.8 Esl Fund Balance (end of Decommissioning) discounted to 2022 Dollars Discount Rate =
2.00%
330.7
Table II Definitions:
Column 1 Beginning of Year Balance:
Serial No.: 22-053 Docket No.: 50-305 KPS Decommissioning Funding Status Report Enclosure, Page 3 of 4 Reflects the beginning-of-year Trust Fund balance at a 0.0% cost escalation rate and a 2.0% Real Rate of Return (RRoR) on fund growth.
Column 2 Earnings on Trust Funds:
Reflects earnings on funds remaining in the Trust. A 2.0% RRoR Fund growth rate is used for 2022 through 2073 which reflects the allowed 2.0% RRoR over a 0.0%
cost escalation rate. The annual 2.0% RRoR earnings are calculated on the beginning balance less 50% of the projected annual expenditure for each year.
Column 3 Remaining License Termination Expenditures:
Reflects the annual License Termination Plan cost portion at a 0.0% escalation rate from the Site-Specific Estimate.
Column 4 Remaining Spent Fuel Management Expenditures:
Reflects the annual Irradiated Fuel Management Plan cost portion at a 0.0%
escalation rate from the Site-Specific Estimate. This column provides information related to funding for managing irradiated fuel as required by 10 CFR 50.82(a)(8)(vii).
Column 5 Remaining Site Restoration Expenditures:
Reflects the annual Site Restoration Plan cost portion at a 0.0% escalation rate from the Site-Specific Estimate.
Column 6 Remaining SAFSTOR Expenditures:
Reflects the annual SAFSTOR Decommissioning Plan cost at a 0.0% escalation rate from the Site-Specific Estimate.
Column 7 End of Year Balance:
Reflects the end of year Trust Fund balance after projected earnings are added and projected expenditures are deducted for the year specified at a 0.0%
escalation rate and a 2.0% RRoR on fund growth.
Serial No.: 22-053 Docket No.: 50-305 KPS Decommissioning Funding Status Report Enclosure, Page 4 of 4 Tables I and II General Notes: (Any minor differences in totals are due to rounding.)
- 1)
Table I Prior Year Expenditures - Variance to Estimated Escalated Cost compares actual expenditures to estimates obtained from revised site-specific cost and schedule tables that were provided in an update to the KPS Post-Shutdown Decommissioning Activities Report (Serial No.14-116, ADAMS Accession No. ML14118A382) dated April 25, 2014. Table I Remaining Decommissioning Estimated Cost and Table 11 are based on a
Decommissioning Cost Estimate dated November 22, 2018.
- 2)
The Trust Fund Balance reflects market value on December 31, 2021, net of taxes on realized gains and losses.
- 3)
The 2.0% RRoR is based on the rate allowed by 10 CFR 50.75(e)(1)(i) and 10 CFR 50.82(a)(8)(vi) and not on any order by a rate setting authority.
- 4)
The funding method for providing financial assurance for decommissioning KPS remains prepayment. This cash flow analysis demonstrates that the amounts accumulated in the Trust are sufficient, with credited earnings at a 2.0% RRoR, to cover the estimated cost of radiological decommissioning, spent fuel management and site restoration.
- 5)
By letter dated January 28, 2015 (ADAMS Accession No. ML15034A312) DEK submitted a Commitment to establish a Parent Company Guarantee (PCG) and a Notice of Request to Discontinue an Existing Parent Support Agreement (PSA) from Dominion Resources, Inc. (ORI). The PCG provides additional financial assurance to address any potential shortfalls in decommissioning funding assurance for KPS, up to $60 million. By letter dated December 14, 2015 (ADAMS Accession No. ML15294A304 and ML15344A503), the NRC notified DEK that it had no objection to the cancellation of the $60 million PSA, issued by ORI, for KPS.
- 6)
The cash flow analysis in Table II shows that the funds accumulated in the Trust are sufficient, with credited earnings at a 2.0% real rate of return, to cover the estimated cost of radiological decommissioning, spent fuel management and site restoration.
- 7)
On May 21, 2014 (ADAMS Accession No. ML13337A287), the NRC granted DEK an exemption allowing the Trust to be used for spent fuel management costs.
ATTACHMENT 1 Financial Test for Year Ended December 31, 2021 Paragraph I1.A.2 of Appendix A to 10 CFR Part 30 Kewaunee Power Station Dominion Energy Kewaunee, Inc. (DEK)
Serial No.: 22-053 Docket No.: 50-305
Serial No.: 22-053 Docket No.: 50-305 Page 1 of 2 Dominion Energy Services, Inc.
707 E. Main Street, Richmond, VA 23219 DominionEnergy.com
!rie Dominion p
Energy March 30, 2022 FINANCIAL TEST FOR YEAR ENDED DECEMBER 31, 2021 Paragraph II. A.2 of Appendix A to 10 CFR Part 30 A. Maximum Guarantee Amount for Facility License No. DPR-43: $60 million B. Dominion Energy Inc. issued $1,000,000,000 of 10 year unsecured senior notes on August 12, 2021. The issuance was rated BBB by Standard and Poor's and Baa2 by Moody's at the time of settlement and maintains these ratings today.
C. DEi's tangible net worth (millions of dollars):
Total Equity Less:
Net Book Value of the Nuclear Facility and Site (KPS)
Goodwill of the Nuclear Facility and Site (KPS)
(i) Total Net Worth Less:
Goodwill Intangible Assets (ii) Tangible Net Worth DEi Total Assets
$99,590 Less: Foreign Assets Total US Assets
$99,590 FINANCIAL TESTS
- 1. Is line C (ii) at least $21 Million?
- 2. Is line C (i) at least 6 times the guarantee amount of $60 million?
$27,308
$27,308 7,405 784
$19,119 YES
~
NO
- 3. a. Are at least 90 percent of the firm's assets located in the U.S.?
or,
- b. Is line C (i) at least 6 times the guarantee amount of $60 million?
- 4. a. Are bond ratings BBB (including+/- adjustments) or above as issued by Standard and Poor's or,
- b. Are bond ratings Baa (including+/- adjustments) or above as issued by Moody's Serial No.: 22-053 Docket No.: 50-305 Page 2 of 2 I hereby certify that the content of this Financial Test: Paragraph I1.A.2 of Appendix A to 10 CFR Part 30 is true and correct to the best of my knowledge.
~
Executive Vice President, Chief Financial Officer and Treasurer Dominion Energy, Inc.
ATTACHMENT 2 Deloitte & Touche LLP Serial No.: 22-053 Docket No.: 50-305 Attesting Letter of Accuracy of the Financial Test Kewaunee Power Station Dominion Energy Kewaunee, Inc. (DEK)
Deloitte.
INDEPENDENT ACCOUNTANT'S REPORT To the Board of Directors of Dominion Energy, Inc.
Richmond, Virginia Deloitte & Touche LLP Suite 820 901 East Byrd Street Richmond, VA23219 USA Tel: +1 804 697 1500 Fax: +1804697 1825 www.deloitte.com We have performed the procedures specified below which are required by the U.S. Nuclear Regulatory Commission, related to Dominion Energy, lnc.'s (
11Dominion Energy") as parent company guarantor of Dominion Energy Kewaunee, Inc. licensed operator of the Kewaunee Power Station compliance with the financial test option as of December 31, 2021 (
11the subject matter"), included in the accompanying letter dated March 30, 2022 from James Chapman, Executive Vice President, Chief Financial Officer and Treasurer of Dominion Energy, Inc. Management is responsible for the subject matter.
Dominion Energy has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting Dominion Energy in its evaluation of the subject matter. The procedures performed are specified in Appendix A, Part 30 of Title 10 of the U.S. Code of Federal Regulations and are required by the U.S. Nuclear Regulatory Commission.
We make no representation regarding the appropriateness of the procedures either for the purpose for which our report has been requested or for any other purpose. Accordingly, this report may not be suitable for either the purpose of which this report has been requested or for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and the associated findings are as follows:
- 1.
We compared the bond rating in Attachment 1 to Dominion Energy's Financial Assurance Letter to the most recently issued reports of S&P and Moody's covering Dominion Energy, noting no differences.
- 2.
We compared amounts identified as 'Total Equity",
11Goodwill",
11lntangible Assets", and 11DEI Total Assets" in Attachment 1 to Dominion Energy's Financial Assurance Letter to the corresponding amounts in the consolidated financial statements of Dominion Energy as of December 31, 2021, on which we have issued our report dated February 24, 2022 (the "audited consolidated financial statements"), noting no differences.
- 3.
We compared amounts identified as "Net Book Value of the Nuclear Facility and Site (KPS)",
"Goodwill of the Nuclear Facility and Site (KPS)", and 11Foreign Assets" in Attachment 1 to Dominion Energy's Financial Assurance Letter to the corresponding amounts in a schedule prepared by Dominion Energy. We agreed the total shown in the schedule to the corresponding amount in audited consolidated financial statements, noting no differences.
- 4.
We recomputed the mathematical accuracy of the amounts identified as 'Total Net Worth",
"Tangible Net Worth", and "Total US Assets" in Attachment 1 to Dominion Energy's Financial Assurance Letter without exception.
We were engaged by Dominion Energy to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the subject matter. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
With respect to procedures outlined in Paragraph 11.B of Appendix A, Part 30 of Title 10 of the United States Code of Federal Regulations, professional standards preclude us from providing any form of report or assurance on matters relating to solvency. Accordingly, no such form of report or assurance is provided.
We are required to be independent of Dominion Energy and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
This report is intended solely for the information and use of Board of Directors and management of Dominion Energy and the U.S. Nuclear Regulatory Commission and is not intended to be, and should not be, used by anyone other than these specified parties.
March 30, 2022 2