ML23004A151
| ML23004A151 | |
| Person / Time | |
|---|---|
| Site: | Palisades, Big Rock Point File:Consumers Energy icon.png |
| Issue date: | 11/18/2022 |
| From: | King J, Moody M, Nessel D State of MI, Dept of Attorney General |
| To: | Atomic Safety and Licensing Board Panel |
| SECY RAS | |
| References | |
| License Transfer, RAS 56587, 50-255-LT-2, 50-155-LT-2, 72-007-LT, 72-043-LT-2, ASLBP 22-974-01-LT-BD01 | |
| Download: ML23004A151 (0) | |
Text
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION
Before the Atomic Safety and Licensing Board
In the Matter of ) Docket Nos. 50-255-LT-2 ENTERGY NUCLEAR OPERATIONS, ) 50- 155-LT-2 INC., ENTERGY NUCLEAR ) 72- 007-LT PALISADES, LLC, HOLTEC ) 72- 043-LT-2 INTERNATIONAL, and HOLTEC )
DECOMMISSIONING ) ASLBP No.22-974 LT-BD01 INTERNATIONAL, LLC )
(Palisades Nuclear Plant and Big )
Rock Point Site) )
)
MICHIGAN ATTORNEY GENERALS INITIAL WRITTEN STATEMENTS OF POSITION AND WRITTEN TESTIMONY WITH SUPPORTING AFFIDAVIT
Dana Nessel Attorney General State of Michigan
Michael E. Moody Joel B. King Assistant Attorneys General Special Litigation Division P.O. Box 30755 Lansing, Michigan 48909 MoodyM2@michigan.gov KingJ38@michigan.gov (517) 335-7627 Dated: November 18, 2022
TABLE OF CONTENTS
Page
List of Abbreviations and Acronyms............................................................................. ii
Introduction...................................................................................................................1
Initial Written Statements of Positions........................................................................6
Conclusion.................................................................................................................... 18
i LIST OF A BBREVIATIONS AND A CRONYMS
Applicants Entergy Nuclear Operations, Inc.; Entergy Nuclear Palisades, LLC; Holtec International; and Holtec Decommissioning International, LLC
ASLB Atomic Safety and Licensing Board
BWR Boiling water reactor
CDI Comprehensive Decommissioning International, LLC
DCE Decommissioning Cost Estimate
DOE United States Department of Energy
Enbridge Enbridge, Inc.
ENOI Entergy Nuclear Operations, Inc.
Entergy Entergy Nuclear Operations, Inc.; and Entergy Nuclear Palisades
FERC Federal Energy Regulatory Commission
GAO Government Accounting Office
GTCC Greater-than-class-C waste
HDI Holtec Decommissioning International, LLC
Holtec Holtec Intl; CDI; HDI; or Holtec Palisades
Holtec Intl Holtec International
Holtec Palisades Holtec Palisades, LLC
ISFSI Independent spent fuel storage installation
LTA License transfer application
MPSC Michigan Public Service Commission
NAMCo Nuclear Asset Management Company, LLC
NRC United States Nuclear Regulatory Commission
Oyster Creek Oyster Creek Nuclear Generating Station (New Jersey)
ii PFAS Per-and polyfluorinated alkyl substances
PHMSA Pipeline and Hazardous Materials Safety Administration
Pilgrim Pilgrim Nuclear Power Station (Massachusetts)
PNNL Pacific Northwest National Laboratory
PSDAR Post-shutdown decommissioning activities report
PWR Pressurized water reactor
State State of Michigan
TVA Tennessee Valley Authority
iii INTRODUCTION
The Nuclear Regulatory Commission (NRC) is considering whether to grant an
application by Entergy Nuclear Operations, Inc. (ENOI); Entergy Nuclear
Palisades, LLC (ENP) (together Entergy); Holtec International (Holtec); and
Holtec Decommissioning International, LLC (HDI), (collectively Applicants)
requesting approval to transfer the operating licenses for the Palisades Nuclear
Plant, Big Rock Point Plant, and associated independent spent fuel storage
installation (ISFSI) from Entergy to Holtec and HDI. 1 The license transfer
application notes that Entergy plans to transfer all of the assets and liabilities of
ENP to a new entity that will become Holtec Palisades, LLC (Holtec Palisades). 2
The LTA also notes that Nuclear Asset Management Company, LLC (NAMCo), a
wholly-owned subsidiary of Holtec, will acquire the equity interests in either the
new Holtec Palisades or the parent company owner of Holtec Palisades; either way,
emerging as the direct parent company of Holtec Palisades. 3 Holtec plans to engag e
another Holtec subsidiary, Comprehensive Decommissioning International, LLC
(CDI) to decommission the single unit at Palisades, restore the site, and manage on-
1 License Transfer Application (LTA) at 12 (Dec. 23, 2020).
2 LTA at 2 (Dec. 23, 2020).
3 LTA at 2 (Dec. 23, 2020).
1 site spent nuclear fuel. 4 Holtec 5 represents that it will release the site for
unrestricted use by approximately 2041. 6
On February 24, 2021, the Michigan Attorney General (Attorney General,
MIAG, or AG) filed with the NRC a petition for leave to intervene and request for a
hearing. 7 In December 2021, the NRC Staff issued an order approving both the
transfer of the licenses and draft conforming license amendments as well as
approving a related regulatory exemption requested by HDI in support of the
license transfer application.8 Although the Staff issued this order, the NRC
explained that the staffs order approving the license transfer... remains subject
to our authority to rescind, modify, or condition the approved transfer based on the
outcome of this adjudicatory proceeding. 9
On July 15, 2022, the NRC issued its Memorandum and Order granting the
Attorney Generals petition to intervene and request for a hearing.10 In the order,
the NRC explained that an application for a license transfer must contain
sufficient information to demonstrate that the applicant has the financial
4 LTA at 2-3 (Dec. 23, 2020). As noted in the NRCs Memorandum and Order in this case, HDI later informed the NRC that HDI no longer plans to contract with CDI to serve as the decommissioning general contractor for Palisades and that HDI is absorbing CDIs resources and will directly employ site personnel to perform the scope of work previou sly planned to be executed by CDI. In the matter of Entergy Nuclear Operations, Inc., Entergy Nuclear Nuclear Palisdades, LLC, Holtec International, and Holtec Decommissioning International, LLC (Palisades Nuclear Plant and Big Rock Point Site),
CLI 08 (2022), p 5.
5 Throughout this petition, use of the term Holtec refers to any or all of Holtec Intl, CDI, HDI, or Holtec Palisades unless otherwise specified.
6 LTA at 3 (Dec. 23, 2020).
7 Petition of the Michigan Attorney General for Leave to Intervene and for a Hearing, February 24, 2021.
8 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 1.
9 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 2.
10 In the matter of Entergy Nuclear Operations, CLI 08 (2022).
2 qualifications to carry out the activities for which the license is sought, and the
application also must provide reasonable assurance that funds will be available to
decommission the facility including any ISFSI. 11 The NRC further explained that
its license transfer regulations do not require an applicant to demonstrate financial
qualifications to cover site restoration costs, but that in this case [s]ite restoration
costs nonetheless are relevant to this proceeding because Holtec intends to pay for
those costs with the Palisades decommissioning trust, on which Holtec relies for its
showing of financial qualifications. 12
Although the Attorney General raised two contentions with the first
contention containing nine issues, the NRC admitted only four issues raised in the
first contention as follows: (1) the applicants estimated 11-year timeframe for the
removal by DOE of all of the spent fuel at Palisades; (2) the reasonableness of the
site-specific decommissioning cost estimates falling well below the minimum
formula amount; (3) the 12% contingency allowance allocated to the radiological
decommissioning, spent fuel management, and site restoration cost estimate; and
(4) the applicants description of their planned means to adjust funding if necessary
to complete decommissioning and terminate the license. 13 After summarizing the
parties arguments in their briefs, the NRC set forth the following scope of the
hearing:
11 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 7.
12 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 10.
13 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p18.
3 The hearing will be limited to the following four challenges to the application as summarized below and as addressed in more detail in the applicable sections of this decision:
(a) The projected length of the time f or transfer of all spent fuel off of the Palisades site:
The applicants should address how the determined that the estimated 11-year spent fuel transfer period constitutes a plausible timeframe for removal of all Palisades spent fuel. In their description, the applicants should clarify the assumptions on which they relied, including what fuel acceptance priority and fuel allocation or transfer rate they assumed for their schedule.
In assessing financial qualifications for a license transfer we accept plausible forecasts. The parties arguments therefore should address whether the estimated 11-year period reflects a plausible timeframe to complete the fuel transfer.
(b) Reasonableness of the site-specific decommissioning cost estimate falling below the minimum formula amount:
The applicants should provide a detailed explanation of the primary reasons that the cost estimate falls significantly below the minimum formula amount. We also direct the parties and invite the staff to address whether the minimum formula regulation in section 50.75(b) applies to this application.
(c) Adequacy of contingency funding:
The applicants should explain how they calculated and derived the 12% level applied for contingency and concluded that this amou nt for contingency is reasonably adequate for Palisades. The parties should address relevant industry norms, practices, and standards for the contingency amount added to reactor decommissioning cost estimates at a similar project stage.
The parties should address whether the 12% funding added reflects a plausible amount of funding for covering the contingency costs reasonably expected to be incurred at Palisades.
(d) Ability to provide additional financial assurance as a means to adjust funding:
The applicants should describe how they will ensure that sufficient additional funding will be available as a means to adjust funding if
4 needed. As part of their description, the applicants should address the issues described at the end of Section III.C.1.h. The parties additionally should address whether license conditions or forms of assurances are warranted. 14
As stated in her Petition, the Attorney General supports prompt, thorough,
and safe decommissioning and site restoration at Palisades and Big Rock, but she
does not believe Holtec possesses the financial qualifications or assurances
necessary to complete such a risk-intensive project. Accordingly, the Attorney
General appreciates that the NRC granted her petition and that it is seeking
further answers from the applicants to the arguments raised in the Attorney
Generals petition. In this written statement, the Attorney General will address the
questions posed by the NRC in its order based on her review of the mandatory
disclosures and will respond to the applicants answers to these questions in the
written responses and rebuttal testimony due on December 16, 2022.
14 In the matter of Entergy Nuclear Operations, CLI 08 (2022), pp 134-135.
5 INITIAL WRITTEN STATEMENTS OF POSITIONS
A. The projected length of the time for transfer of all spent fuel off of the Palisades site:
The applicants should address how the determined that the estimated 11-year spent fuel transfer period constitutes a plausible timeframe for removal of all Palisades spent fuel. In their description, the applicants should clarify the assumptions on which they relied, including what fuel acceptance priority and fuel allocation or transfer rate they assumed for their schedule.
In assessing financial qualifications for a license transfer we accept plausible forecasts. The parties arguments therefore should address whether the estimated 11-year period reflects a plausible timeframe to complete the fuel transfer.
As noted by the NRC in its o rder, the Attorney Generals argument is that
Holtecs projected 11-year spent fuel removal period is unreasonably short and that
this acceptance period results in significantly understated spent fuel management
costs. 15 In addition, there is no commitment by Holtec to use any costs recovered by
the DOE or any other financial assurance commitment to address this issue in its
application. 16
In attached testimony by Attorney General expert witness Nicholas Capik,
Mr. Capik explains that the current owner of all Palisades spent fuel will incur
costs to safely store that fuel until title to all of that spent fuel is transferred to
DOE. 17 Thus, Hotecs projected 11-year period for transfer of all spent fuel off the
15 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 28.
16 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 33.
17 Exhibit MICH001, p 3.
6 Palisades site is important in determining the financial qualifications for a license
transfer. Accordingly, Mr. Capik examined the underlying assumptions of Holtecs
11-year projection.
Holtec states that the 2040 final acceptance date is based on DOE accepting
spent fuel according to the Oldest Fuel First (OFF) priority ranking developed by
DOE. 18 In reviewing DOEs contracts with utilities for accepting spent fuel and
DOE 1987 Annual Capacity Report which provides acceptance rates, it is clear that
a 2040 dat e is not plausible. Assuming DOE starts accepting spent fuel in 2030
(the Holtec assumption in its DCE) and accepts 18,600 MTU of spent fuel in the
first ten year (the contract rate) following by 3,000 MTU of spent fuel each year
thereafter (the general rate assumed), the last fuel discharged by Palisades would
not be accepted until 2064 using OFF (the Holtec assumption). 19If the spent fuel
removal is delayed from 2040 to 2064, then additional costs will be incurred for the
additional 24 years of ISFSI security, operation, and maintenance as well as the
decommissioning of the ISFSI itself being delayed.20 As explained by Mr. Capik,
Holtec has failed to provide any contingency or financial assurance to account for
this added cost. 21 Moreover, Mr. Capik explained that the only way the 2040 date
can be realized with a 2030 DOE acceptance start date is if the DOE accepts about
8,363 MTU of spent fuel each year during the first 11 -years of acceptance which is
not plausible because of the lack of a ramp -up in acceptance rate, capabilities of the
18 Exhibit MICH001, p 4.
19 Exhibit MICH001, p 5.
20 Exhibit MICH001, p 5.
21 Exhibit MICH001, p 5.
7 facilities likely to be designed and constructed by DOE, the lack of any firm pla ns
that DOE would give priority to shutdown reactors, and that priority would match
the 11-year period assumed by Holtec.22
B. Reasonableness of the site-specific decommissioning cost estimate falling below the minimum formula amount:
The applicants should provide a detailed explanation of the primary reasons that the cost estimate falls significantly below the minimum formula amount. We also direct the parties and invite the staff to address whether the minimum formula regulation in section 50.75(b) applies to this application.
As the NRC explained in its order, one of the key requirements is to ensure
that adequate funds are accumulated for, or a holder of, an operating lice nse under
Part 50 provide a certification of decommissioning funding in an amount which
may be more, but not less, than the amount stated in the NRCs table of minimum
amounts provided for in section 50.75(c)(1) and (c)(2). 23 The purpose of this
minimum formula is to provide a method with clear criteria that would both
provide a reasonable assurance of decommissioning funding while also minimizing
licensee and NRC administrative effort. 24 Thus, [w]het her a site-specific cost
estimate meets the minimum formula amount therefore bears on whether a site -
specific estimate is acceptable. 25 The NRC explained that Holtecs claim that the
site-specific estimate is more reliable that the minimum formula because it is a site-
22 Exhibit MICH001, p 6.
23 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 34.
24 In the matter of Entergy Nuclear Operations, CLI 08 (2022), pp 34-35.
25 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 40.
8 specific estimate effectively renders meaningless the NRC guidance on site-specific
decommissioning cost estimates, which calls for an adequate justification if a site-
specific cost estimate falls below the formula. 26
Mr. Capik similarly explains that the intent of the minimum formula
amounts is to ensure that utilities can provide financial assurance for the bulk of
the funds required for decommissioni ng. 27 He explains however, that comparisons
of these formula amounts to site-specific estimates show that 75% of the time the
formula amounts are less than site-specific DCEs with the formula reflecting from
57 to 91 percent of the site-specific estimates. E xperience demonstrates that the
minimum formula amount is generally insufficient, and thus Holtecs reliance on a
site-specific estimate that is less than the minimum means that Holtec is assuming
significantly less funds are required for decommissioning with no explanation or
support for this unreasonably low estimate. 28
Moreover, Mr. Capik notes that Holtecs entire calculated license termination
cost of $443.215 million should not be compared to the NRC formula amount
without excluding the ten -year dormancy period assumed by Holtec in its DCE.29 A
valid comparison would be to exclude these dormancy costs. Excluding the annual
expenses during the dormancy years results in a calculated cost of $388.159 million
for the scope comparable to the NRC formula. 30 This number is $98.571 million
26 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 41.
27 Exhibit MICH001, p 7.
28 Exhibit MICH001, p 7.
29 Exhibit MICH001, p 7.
30 Exhibit MICH001, p 7.
9 less than the comparable NRC formula amount of $486.730 million, and th us 20
percent less funding than the NRC formula dictates. 31 Mr. Capik explains that lack
of justification for this substantial difference and the lack of detail in the DCE
makes substantive comparison of the DCE costs to the NRC formula difficult.32 He
further opined that any claim by Holtec that lessons learned or experience gained
with other Holtec projects that could reduce costs fails to consider the delay due to
the dormancy period that Holtec is proposing with Palisades. 33 Thus, it is likely
that much of the experience gained or lessons learned will not effectively reduce
costs years into the future. 34
The NRC also directed the parties to address in their submissions to the
Presiding Officer, as part of the hearing record, their views on the applicability of
the section 50.75(b) minimum funding requirement to this application. 35 As
explained by the NRC the order in this case, [o]ne of the NRCs key requirements
to ensure that adequate funds are accumulated for decommissioning is the
requirement in 10 C.F.R § 50.75(b)(1) that an applicant for, or a holder of, an
operating license under Part 50 provide a certification of decommissioning funding
in an amount which may be more, but not less, than the amount stated in the
NRCs table of minimum amounts in section 50.75(c)(1),... 36
31 Exhibit MICH001, p 7.
32 Exhibit MICH001, p 7.
33 Exhibit MICH001, p 7.
34 Exhibit MICH001, p 7.
35 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 42.
36 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 34.
10 The NRC inquired of the party whether the minimum formula regulation in
section 50.75(b) require the application to provide decommissioning financial
assurance at least to the level of the minimum formula amount. 37 The NRC noted
that the application stated that the minimum formular amount did not apply
because by the time the projected license transfer closing, decommissioning funding
will be governed by section 50.82. 38 In response, the NRC explained that the
regulations themselves leave unclear exactly when the section 50.75(b)-(c) minimum
formula amount floor for decommissioning funding assurance may cease to apply. 39
First, as noted by the NRC, its guidance on site-specific decommissioning
cost estimates calls for a comparison of the estimate to the minimum formula, and
this guidance expressly applies to the site -specific cost estimates submitted under
the decommissioning regulations in section 50.82. 40 Second, any ambiguity should
be resolved in further protecting the public and not reducing those protections.
Given the NRCs commitment to protecting public health and safety from nuclear
materials throughout this nation and its stated mission, under 62 FR 46517, to
assure that civilian use of nuclear materials in the United States is carried out with
adequate protection of public health and safety, the NRC should apply this
minimum formula amount to Holtec in this case. 41
37 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 42.
38 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 42.
39 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 42.
40 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 39.
41 Shieldalloy Metallurgical Corp. v. NRC, 624 F.3d 489, 496 (2010).
11 C. Adequacy of contingency funding:
The applicants should explain how they calculated and derived the 12% level applied for contingency and concluded that this amount for contingency is reasonably adequate for Palisades. The parties should address relevant industry norms, practices, and standards for the contingency amount added to reactor decommissioning cost estimates at a similar project stage.
The parties should address whether the 12% funding added reflects a plausible amount of funding for covering the contingency costs reasonably expected to be incurred at Palisades.
In its order, the NRC explained that site -specific decommissioning cost
estimates include an amount added under the title of contingency to cover
unknown costs. 42 Thus, the identified continge ncy value, expressed as a
percentage, reflects the percentage of the overall final cost estimate that was added
as a margin to cover unknown costs. 43 Here, the NRC agreed with the Attorney
General that neither the applicants answer nor the contingency analysis identifies
support for the 12% level that is used by Holtec in this proceeding.44
Attorney General expert witness Nicholas Capik explains that Holtec has
included contingency in its DCE to address the estimate for defined scope of work
and execution strategy. 45 The problem with this definition is that it fails to account
for scope changes, general inflation, or cost escalation over the course of the
project. 46 Mr. Capik notes that Holtec fails to address changes in scope and
42 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 43.
43 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 43.
44 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 47.
45 Exhibit MICH001, p 9.
46 Exhibit MICH001, p 9.
12 unrealistically relies on addressing escalation or inflation using the nuclear
decommissioning trust (NDT) fund earnings (after taxes and fees) which could lead
to insufficient funding. 47
In addition to these limitations to the contingency, Mr. Capik explains that
the 12 percent contingency used by Holtec for Palisades is inconsistent with
industry norms, practices, and standards.48 For example, the Association for the
Advancement of Cost Engineering (AACE) in AACE International Recommended
Practice No. 18R-97, provides guidelines for identifying proper contingency for
various phases of project estimation. 49 Mr. Capik opines that Holtecs contingency
would be classified a s a Class 2 estimate under the AACE guidelines which means
that there is a 20 percent probability that costs will ultimately be better than 15
percent below the estimate or worse than 20 percent above the estimate. 50 In
addition, Holtecs 12 percent contingency is significantly less than the NRC 25
percent contingency guidance for ISFIS decommissioning in NUREG -1757. 51
Moreover, Holtecs 12 percent contingency is unexplainably lower than the 19
percent contingency Holtec itself used for the Indian Point project which is the same
reactor type as Palisades. 52 It is also lower than Holtecs Oyster Creek (15 percent)
and Pilgrim (17 percent) projects. 53 Not only is Holtecs contingency for Palisades
lower than its other decommissioning projects, but also the majority of work for
47 Exhibit MICH001, p 9.
48 Exhibit MICH001, p 9.
49 Exhibit MICH001, p 9.
50 Exhibit MICH001, p 10.
51 Exhibit MICH001, p 10.
52 Exhibit MICH001, p 11.
53 Exhibit MICH001, p 11.
13 Palisades will not be performed until over 15 years after the estimate was created,
thus creating more estimating uncertainty for Palisades compared to other Holtec
projects.54 Mr. Capik further notes that Holtecs Palisades DCE could not have
benefitted from lessons learned from these other Holtec projects because at the time
Holtec submitted the Paliades DCE, sufficient progress had not yet been made at
these other projects to allow for any more accurate estimation for Palisades.55
Accordingly, Mr. Capik concludes that a 12 percent contingency is not reasonable
given the proposed timing of decommissioning activities and apparent state of
contracting. 57
D. Ability to provide additional financial assurance as a means to adjust funding:
The applicants should describe how they will ensure that sufficient additional funding will be available as a means to adjust funding if needed. As part of their description, the applicants should address the issues described at the end of Section III.C.1.h. The parties additionally should address whether license conditions or forms of assurances are warranted.
54 Exhibit MICH001, p 11.
55 Exhibit MICH001, p 12.
57 Exhibit MICH001, p 12.
14 In its order, the NRC stated that Holtecs projects major decommissioning
activities begin in December 2035, following the dormancy period, with final license
termination to occur in 2041.58 Under NRC regulations, for decommissioning
activities that delay completion of decommissioning by includ ed a period of storage
or surveillance, the licensee must provide a means of adjusting cost estimates and
of adjusting the associated funding levels over the storage or surveillance period. 59
And, NRC guidance instructs the staff to determine whether the means described
by the licensee provides adequate assurance that funds will be available for
decommissioning activities at the time they are needed. 60 Thus, the NRC explained
that for this hearing, the applicants should describe how they will ensure that
sufficient additional funding will be available to use at the time of decommissioning
if additional funding proves necessary to complete decommissioning. 61
Attorney General expert witness Nicholas Capik testi fies that there are
numerous reasons that Holtecs DCE could understate actual costs, including
increase in scope due to unforeseen conditions, any delay in performance of
activities, inflation beyond whats assumed with two percent real growth of the
NDT, or higher than anticipated actual costs 14 years from now when
decommissioning activities commence. 62 He explains that delaying
decommissioning activities (beyond Holtecs 10 -year dormancy period) will not
58 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 74.
59 In the matter of Entergy Nuclear Operations, CLI 08 (2022), pp 74-75.
60 In the matter of Entergy Nuclear Operations, CLI 08 (2022), pp 79-80.
61 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 81.
62 Exhibit MICH001, p 13.
15 address a situation with insufficient funds because two percent real growth on
$325.5 million (the amount Holtec projects for the end of the dormancy period) will
only grow by $6.3 million a year which is barely enough to cover the $4.4 million a
year to store and maintain the facility as estimated by Holtec. 63 Thus, it would
require many years of dormancy to address a shortfall in funding.
As to the spent fuel management costs from DOE that Holtec relies upon,
there are two significant problems. First, any recovery on a Holtec claim for ISFSI
construction costs and cask loading (the largest portion of spent fuel management
costs) would be paid many years before decommissioning activities, and thus not
necessarily available unless recovered funds were segregated and could not be
withdrawn for other purposes. 64 As noted by the NRC, its guidance requires its
staff to determine whether the means described by the licensee provides adequate
assurance that funds will be available for decommissioning activities at the time
they are needed. 65 Here, there is no commitment by Holtec that these funds will be
available. Second, Mr. Capik notes that a sizeable portion of the projected spent
fuel management costs (specifically related to transfer of spent fuel to DOE) may
not be recovered from DOE or could be subject to an offset that significantly reduces
recovery. 66 Accordingly, as noted by the NRC, the applicants should describe how
they will ensure that sufficient funding will be available to use at the time of
63 Exhibit MICH001, p 13.
64 Exhibit MICH001, p 13.
65 In the matter of Entergy Nuclear Operations, CLI 08 (2022), pp 79-80.
66 Exhibit MICH001, p 14.
16 decommissioning if additiona l funding proves necessary to complete
decommissioning. 67
Mr. Capik explained that for several other nuclear decommissionings, some of
which Holtec is involved with, the company performing the decommissioing has
provided financial assurances. 68 For exam ple, Mr. Capik explained that for the
Vermont Yankee, NorthStars financial assurance included a parental support
agreement of $140 million, escrow accounts of at least $55 million, performance
bonds of approximately $400 million, a $25 million letter of credit, retained DOE
proceeds, and a commitment not to withdraw funds for any task exceeding the
allocated cost in a schedule provided. 69 For Indian Point, which has $2.4 billion in
the NDT) Holtec agreed to minimum NDT balances of $400 million at 10 years and
$360 million at Partial Site Release (PSR), when the operating license footprint is
reduced to the ISFSI, and return of 50 percent of the DOE recoveries to the NDT. 70
For Pilgrim, Holtec agreed to minimum NDT balances ($193.3 million 2019 dollars
at PSR adjusted as decommissioning proceeds, as well as a minimum balance until
all fuel is removed from the site), use of DOE recoveries if needed to maintain the
minimum balances, performance bonds, $30 million of insurance, and additional
financial reporting requirements.71 These financial assurances were in add ition to
starting with a NDT balance of approximately $1 billion which is significantly more
67 In the matter of Entergy Nuclear Operations, CLI 08 (2022), p 81.
68 Exhibit MICH001, p 14.
69 Exhibit MICH001, p 14.
70 Exhibit MICH001, p 14.
71 Exhibit MICH001, p 15.
17 than for Palisades. 72 As noted by Mr. Capik, the Palisades NDT is substantially
smaller than most other sites, and thus the risk associated with any unexpected
costs is more significant, and the potential need for additional financial assurance
more likely. 73
CONCLUSION
Given the nonstandard risks associated with nuclear power plant
decommissioning and related activities, the consequences of which may not be
apparent for decades, and in view of the structure of the proposed transfer, the
Applicants sole reliance on the trust funds to demonstrate financial qualification
does not meet regulatory standards. 74
In the likely event of a cost overrun, the license transfer application fails to
establish that Holtec will be financially healthy enough to provide additional
financial assurance as required pursuant to 10 C.F.R. §§ 50.82(a)(8)(vi) and (vii).
Due to these concerns and on behalf of the People of the State of Michigan,
Attorney General Dana Nessel requests that the Commission require the
Applicants to provide additional forms of financial insurance.
72 Exhibit MICH001, p 15.
73 Exhibit MICH001, p 15.
74 See 10 C.F.R. § 50.33(f).
18 Respectfully submitted,
Dana Nessel Attorney General State of Michigan
Signed (electronically) by
/s/ Michael E. Moody Michael E. Moody Assistant Attorney General Special Litigation Division P.O. Box 30755 Lansing, Michigan 48909 MoodyM2@michigan.gov (517) 335-7627 Dated: November 1 8, 2022
19 STATES OF AMERICA NUCLEAR REGULATORY COMMISSION
Before the Atomic Safety and Licensing Board
In the Matter of ) Docket Nos. 50-255-LT-2 ENTERGY NUCLEAR OPERATIONS, ) 50- 155-LT-2 INC., ENTERGY NUCLEAR ) 72- 007-LT PALISADES, LLC, HOLTEC ) 72- 043-LT-2 INTERNATIONAL, and HOLTEC )
DECOMMISSIONING ) ASLBP No.22-974 LT-BD01 INTERNATIONAL, LLC )
(Palisades Nuclear Plant and Big )
Rock Point Site) )
)
CERTIFICATION OF SERVICE
Pursuant to 10 C.F.R. § 2.305, I certify that I served the Michigan Attorney
Generals initial written statements of position and written testimony with
supporting affidavit in the above-captioned proceeding via the NRCs Electronic
Information Exchange on November 18, 2022.
Signed (electronically) by
/s/ Michael E. Moody Michael E. Moody Assistant Attorney General Special Litigation Division P.O. Box 30755 Lansing, Michigan 48909 MoodyM2@michigan.gov (517) 335-7627 Dated: November 18, 2022
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