ML23076A132

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Fy 2023 Proposed Fee Rule Public Meeting Slides
ML23076A132
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Issue date: 03/17/2023
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FY 2023 Proposed Fee Rule Public Meeting March 21, 2023 10:00 a.m. - 12:00 p.m.

Welcome and Logistics Facilitator

PUBLIC MEETING AGENDA

Notice of Meeting on the FY 2023 Proposed Fee Rule March 21, 2023, 10:00 A.M. to 12:00 P.M.

Virtual Teams Meeting link: Click here to join the meeting Call in number: 301-576-2978; Conference ID: # 979712867#

3 Time Topic Speaker 10:00 AM Welcome Sophie Holiday 10:10 AM Opening Remarks James Corbett 10:15 AM FY 2023 Proposed Fee Rule Overview:

FY 2023 Budgetary Considerations FY 2023 Fees Overview Budget Overview: Operating and New Reactors Business Lines Budget Overview: Fuel Facilities Business Line Budget Overview: Nuclear Materials Users Business Line Jason Shay Christie Galster Brian Smith Carrie Safford Theresa Clark 11:05 AM Proposed Policy Change - Expand 10 CFR 171.15 Anthony Rossi 11:20 AM Q&A Session Sophie Holiday 11:50 AM How to Submit Public Comments Sophie Holiday 11:55 AM CFO Closing Remarks James Corbett 12:00 PM Meeting Adjourned

FY 2023 Proposed Fee Rule James Corbett Acting Chief Financial Officer

Fee Rule Comments

  • In scope comments:

o Focused on methodology for calculating fees o Changes to fee regulations o Fee schedules

  • Out of scope comments:

o General comments on agency efficiencies o Changes to regulatory process o Public participation in budget formulation

  • Use the appropriate venue to receive timely response 5

FY 2023 Budgetary Considerations Jason Shay, Director Division of Budget Office of the Chief Financial Officer

FY 2023 Enacted Budget 7

Major Program FY 2022 Enacted Budget FY 2023 Enacted Budget Delta FY 2023 - FY 2022

$M*

FTE

$M*

FTE

$M*

FTE Nuclear Reactor Safety

$477.4 1,788.1 490.7 1,753.4

$13.3 (34.7)

Nuclear Materials and Waste Safety 132.2 453.0 135.5 464.2 3.3 11.2 Corporate Support 266.3 577.0 285.3 579.0 19.0 2.0 Subtotal

$875.9 2,818.1

$911.5 2,796.6

$35.5 (21.5)

Office of the Inspector General 13.8 63.0 15.8 63.0 2.0 0.0 Subtotal

$13.8 63.0

$15.8 63.0

$2.0 0.0 University Nuclear Leadership Program 16.0 0.0 16.0 0.0 0.0 0.0 Authorized Carryover (16.0) 0.0 (16.0) 0.0 0.0 0.0 Total

$889.7 2,881.1

$927.2 2,859.6

$37.5 (21.5)

$M includes FTE costs as well as contract support and travel. Numbers may not add due to rounding.

Note: For FY 2022, the NRC received a $2.0M Supplemental Appropriation to provide regulatory and technical support for Ukraine, which is not recovered by fees and not included in the fee rule due to the timing of when the Supplemental Appropriation was received.

Net Budget Authority 8

FY 2022 Enacted FY 2023 Enacted Delta FY 2023 - FY 2022

$M*

$M*

$M*

Budget Authority

$889.7

$927.2

$37.5 Offsetting Fees 756.7 790.2 33.5 Net Budget Authority

$133.0

$137.0

$4.0

  • $M includes FTE costs as well as contract support and travel. Numbers may not add due to rounding.

Note: For FY 2022, the NRC received a $2.0M Supplemental Appropriation to provide regulatory and technical support for Ukraine, which is not recovered by fees and not included in the fee rule due to the timing of when the Supplemental Appropriation was received.

FY 2023 Fee Overview Christine Galster, Senior Accountant License Fee Policy Team Division of Budget Office of the Chief Financial Officer

Statutory and Regulatory Framework 10

  • Independent Offices Appropriation Act (IOAA), 1952

o Regulations promulgated under 10 CFR Part 171 o Limits power reactor annual fees at the FY 2015 annual fee amount as adjusted each year thereafter for inflation o Recover, to the maximum extent practicable, 100% of budget authority:

LESS activities NEIMA designated as excluded from recovery

LESS any fee-relief activities identified by the Commission

  • Annual Appropriation

Budget and Fee Recovery Amounts for FY 2023 Proposed Rule

[Dollars in Millions]

11 Total BudgetAuthority Less Budget Authority for Excluded Activities: GHLS, WIR, DNFSB, ARRI and FEE-RELIEF Balance Fee Recovery Rate for FY 2023 TotalAmount to be Recovered For FY 2023 927.2 137.0 790.2 x 100.0%

790.2

+

1.2 Adjustments (Part 171 Collections)

Adjusted RecoveryAmount Less Estimated Part 170 Billings Part 171 Fee Collections Required

$ 791.4 195.4

$ 596.0 Fee-Relief Activities:

Statutory Activities:

Total Budget Authority Excluded Activities (credit) to reduce fee recovery amount 97.1M 39.9M

$ 137.0M

12 Hourly Rate Methodology Mission Direct Program Salaries and Benefits Mission Indirect Program Support Agency Support: Corporate Support and IG Subtotal:

Less: Offsetting Receipts Total Budgeted Resources Included in Professional Hourly Rate

$359.2M 118.8M 299.5M

$777.5M 0.0M

$777.5M Mission Direct FTEs:

Mission Direct FTEs Productive Hours:

Professional Hourly Rate 1,672 FTEs 1,551 Hours

$300 Full Cost FTE Rate = Subtotal divided by Mission Direct FTE

$ 464,926

  • Methodology based on OMB Circular A-25, User Charges
    • Budget included in Hourly Rate calculation excludes Direct Program Contract Costs generally billed to licensees separately

Hourly Rate Comparison 10 CFR Part 170 Professional Hourly Rate Formula Budget Resources

= Professional Hourly Rate Mission Direct FTE Converted to Hours FY 2023 Proposed Rule:

$777.5 million

= $300 hourly rate (1,672 x 1,551)

Direct FTE Productive Hours Productive Hours Total hours = 2087 Less:

  • Training hours
  • Holiday hours
  • Vacation hours
  • Travel hours 13 FY 2022 Final Rule:

$743.3 million (1,696 x 1,510)

= $290 hourly rate

14 Business Lines vs. Fee Classes Percentage of Appropriated Budgeted Resources for FY 2023 Operating Reactors 44%

New Reactors 8%

Inspector General 1%

Corporate Support 31%

Fuel Facilities 2%

Nuclear Material Users 7%

Spent Fuel Storage/Transportation 3%

Decommissioning/LLW 3%

Other 1%

BUSINESS LINE BUDGETS TOTAL $927.2M Power Reactors 85%

Other 1%

Fuel Facilities 4%

Nuclear Material Users 4%

Spent Fuel Storage/Reactor Decommissioning 6%

FEE CLASS BUDGETS TOTAL $790.2M Excluded Budget Total

$137.0M

10 CFR Part 171 Annual Fee Calculation:

Operating Power Reactors Fee Class 15

[Dollars in Millions]

  • Proposed Vogtle Unit 3 addition to the assessment of annual fee fleet FY 2019 FY 2020 FY 2021 FY 2022 FY 2023P Budgeted Resources

$670.2

$623.9

$611.8

$645.4

$665.3 Part 170 Estimated Billings (217.7)

(186.7)

(161.6)

(165.8)

(160.2)

Adjustments 5.1 1.8 (8.6) 0.8 5.1 Part 171 Annual Fee Resources 457.6 439.0 441.7 480.3 510.2 Operating Reactors 98 95 93 93 93*

Annual Fee per Reactor

$4,669,000

$4,621,000

$4,749,000

$5,165,000

$5,486,000

10 CFR Part 171 Annual Fee Calculation:

Non-Power Production or Utilization Facilities Fee Class 16

[Dollars in Millions]

  • Shutdown of Aerotest FY 2019 FY 2020 FY 2021 FY 2022 FY 2023P Budgeted Resources

$0.834

$3.318

$2.897

$6.072

$5.999 Part 170 Estimated Billings (0.538)

(3.030)

(2.576)

(5.804)

(5.751)

Adjustments 0.033 0.037 (0.001) 0.002 0.049 Part 171 Annual Fee Resources 0.329 0.325 0.320 0.270 0.297 Facilities 4

4 4

3*

3 Annual Fee per Facility

$82,400

$81,300

$80,000

$90,100

$98,900

10 CFR Part 171 Annual Fee Calculation:

Fuel Facilities Fee Class 17

[Dollars in Millions]

FY 2019 FY 2020 FY 2021 FY 2022 FY 2023P Budgeted Resources

$30.0

$23.2

$23.3

$22.4

$26.6 Part 170 Estimated Billings (7.3)

(6.8)

(7.3)

(8.0)

(9.0)

Adjustments 1.8 1.7 1.5 2.0 2.3 Part 171 Annual Fee Resources 24.5 18.1 17.5 16.4 19.9 Licensees 7

7 8

8 8

Average Percentage Change (12.4%)

(24.1%)

(8.4%)

(6.6%)

+18.5%

10 CFR Part 171 Annual Fee Calculation:

Material Users Fee Class 18

[Dollars in Millions]

FY 2019*

FY 2020 FY 2021*

FY 2022 FY 2023P*

Budgeted Resources

$36.0

$33.7

$35.1

$34.1

$38.7 Part 170 Estimated Billings (1.1)

(1.0)

(1.0)

(0.9)

(1.2)

Adjustments 1.5 1.4 1.2 1.6 2.1 Part 171 Annual Fee Resources 36.4 34.1 35.3 34.8 39.6 Licensees 2,594 2,519 2,528 2,408 2,423

  • Biennial Review Year

Budget Overview:

Operating and New Reactors Business Lines Brian Smith, Director Division of New and Renewed Licenses Office of Nuclear Reactor Regulation

Operating and New Reactors Business Lines Activities Licensing Oversight License Amendments (including risk-informed)

Inspections License Renewals and Subsequent License Renewals Security Design Certifications and Standard Design Approvals Allegations & Investigations Combined Operating Licenses Event Evaluation Environmental Reviews Construction Oversight Topical Reports Vendor Oversight Digital I&C Modifications Vogtle Units 3 and 4 ITAAC closeout Vogtle Units 3 and 4 License Amendments 20

How are the Operating and New Reactors Business Lines Budgets Developed?

1. Workload Forecasting:

Identification of significant workload drivers Analysis of historical data and trending Communications with stakeholders

2. Estimate Level of Effort:

Estimate level of effort for major projects Yearly recurring activities 21

Budget Development and 10 CFR Part 170 Fee Estimates

  • NRC Budget and 10 CFR Part 170 Fee Estimates are developed on different timelines
  • 10 CFR Part 170 Fee Estimates will vary from the budgeted level of effort due to fact of life changes 22

Operating Reactors Business Line -

Changing Workload

  • FY 2023 Budget:

(-) Plant closures

(-) Licensing action infrastructure

(-) COVID-19 impacts on oversight programs 23

New Reactors Business Line -

Changing Workload

  • FY 2023 Budget:

(+) Part 50 construction permit reviews

(+) Design Certification reviews

(-) Vogtle 3 and 4 construction oversight

(+) Vogtle 3 and 4 delayed transition to operation

(-) Delayed licensing submittals 24

Budget Overview:

Fuel Facilities Business Line Carrie Safford, Deputy Director Division of Fuel Management Office of Nuclear Material Safety and Safeguards

Fuel Facilities Business Line Activities 26 Licensing Oversight Rulemaking Development and maintenance of the Program Development and maintenance of the Oversight Program Rulemaking activities and associated guidance development License Amendments Inspections Decommissioning funding Plans Security Emergency Plans Security Plans License Renewals Environmental Reviews

How is the Fuel Facilities Business Line Budget Developed?

27 1.Workload Forecast:

Number of licensed facilities, letters of intent, communications with stakeholders and external awareness Analysis of historical data

2. Type of Work:

Security, Environmental and Safety Type of Licensing Action Complexity

3. Inspection Work:

Scope of frequency of inspections Number and type of operating facilities

4. Historical Resource Utilization

Fuel Facilities Business Line -

Changing Workload

  • FY 2023 Budget:

(+) Additional HALEU fuel and ATF licensing actions

(+) Restart date for two facilities

  • 2023 Part 170 Fee Estimate:

(+) Shifts in licensing action schedules

(+) Implementation of information security standards 28

Budget Overview:

Nuclear Materials Users Business Line Theresa Clark, Deputy Director Division of Materials Safety, Security, State, and Tribal Programs Office of Nuclear Material Safety and Safeguards

Nuclear Materials Users Business Line Activities 30 Licensing State, Tribal, and Federal Programs

  • New applications
  • Agreement States applications/assistance
  • License amendments
  • IMPEP
  • Implement the Tribal Policy Statement

Nuclear Materials Users Business Line Activities (Continued) 31 Oversight Generic Homeland Security

  • Inspections - Headquarters and Regions
  • ISMP
  • Enforcement activities
  • Radioactive source security

Nuclear Materials Users Business Line Activities (continued) 32 Rulemaking Research

  • Medical and industrial rulemakings
  • Support to high-priority rulemakings and guidance
  • Rulemaking support, including petition reviews
  • Maintenance of health physics codes

How is the Nuclear Materials Users Business Line Budget Developed?

33

1. Data-Driven Workload Forecast:
  • Historical data on licensing and oversighttypes of activities and staff charges
  • Projected number of licensing actions and inspections
  • Licensing and oversight related activities, including staff qualifications, guidance updates, and knowledge management
2. Data-Driven Project Estimates:
  • Informed by budget execution data for prior years
  • Provides resources for specific rulemaking and guidance projects, research supporting near-term regulatory action, and other mission-critical work

Nuclear Materials Users Business Line -

Changing Workload

  • FY 2023 Budget:

(+) Projected workload for inspections, as well as training and qualification of inspectors, determined by a new data-driven resource-estimation tool

(+) Rulemaking activities including decommissioning financial assurance and medical-related requirements, as well as veterinary guidance

(+) Increased Tribal outreach and consultation 34

Nuclear Materials Users Business Line -

Changing Fees

  • Fees increase for FY 2023 based on increases to the fully-costed FTE, which includes salaries and benefits, indirect resources, and agency support o Small changes in the number of licensees and in the fraction of work on the fee base were not significant drivers
  • Within the materials fee class, fees are fairly distributed to various categories of licensees, including both annual and application fees o Fee calculations are updated every 2 years using a rolling 5-year average of licensing and inspection costs o In the 2022 assessment, additional data for FY 2020 and FY 2021 increased average hours in certain categories, which are reflected in fees 35

Proposed Policy Change:

Small Modular Reactor (SMR)

Annual Fees to Amend 10 CFR 171.15 Anthony Rossi, Team Lead License Fee Policy Team Division of Budget Office of the Chief Financial Officer

Policy Change Process 37

  • NRC staff engaged with stakeholders in a multi-year effort to develop a fair and equitable annual fee policy for advanced and very small SMRs
  • Developed various alternatives to the calculation of SMR annual fees and discussed alternatives with stakeholders in multiple public meetings
  • Proposed policy change reflects a consensus approach

38 Current SMR Rule Established in 2016 for light-water SMR Annual Fees Under fee regulations in existence at the time, SMRs would have been required to pay the same annual fees as the current operating reactor fleet for each licensed module Defined SMRs as light-water power reactors that have a licensed thermal power rating of less than or equal to 1,000 MWt (300 MWe)

Scaled annual fees to the size of the reactor based upon its licensed thermal power rating Established the bundled unit concept - based upon the cumulative thermal power rating per site instead of charging an annual fee for each reactor unit on site

39 Proposed Revisions to the SMR Annual Fee Rule

  • Proposes revision to the 2016 SMR Rule definition to be technology inclusive rather than limited to light-water SMRs
  • Proposes a new minimum annual fee for SMRs or bundled units on a single site with a cumulative thermal power rating of less than or equal to 20 MWt
  • Proposes a new variable rate that gradually raises the annual fee for SMRs or bundled units on a single site with a cumulative thermal power rating greater than 20 MWt but less than or equal to 250 MWt
  • Retains all other components of the 2016 SMR annual fee rule

Illustration: Proposed Policy Change 40

QUESTIONS AND ANSWERS

42 Public Comments Submission End of Comment Period: April 3, 2023 Federal Rulemaking Website

  • Address questions to Dawn Forder; telephone: 301-415-3407; e-mail: Dawn.Forder@nrc.gov E-mail Comments
  • Rulemaking.Comments@nrc.gov Fax Comments
  • Secretary, U.S. Nuclear Regulatory Commission at 301-415-1101

43 Public Comments Submission (Continued)

Mail Comments

  • Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, ATTN: Rulemakings and Adjudications Staff Hand Deliver
  • 11555 Rockville Pike, Rockville, Maryland 20852, between 7:30 a.m. and 4:15 p.m. (ET) Federal workdays; telephone: 301-415-1677 Further Information
  • Anthony Rossi, License Fee Policy Team Lead, Office of the Chief Financial Officer; telephone: 301-415-7341, e-mail: Anthony.Rossi@nrc.gov

CFO Closing Remarks

Glossary ARRI Advanced Reactor Regulatory Infrastructure ATF Accident Tolerant Fuel CFR Code of Federal Regulations Digital I&C Digital Instrumentation and Control DNFSB Defense Nuclear Facilities Safety Board FTE Full-Time Equivalent GHLS Generic Homeland Security HALEU High Assay Low-Enrichment Uranium IMPEP Integrated Materials Performance Evaluation Program IOAA Independent Offices Appropriation Act, 1952 ISMP Integrated Source Management Portfolio ITAAC Inspections, Tests, Analyses, and Acceptance Criteria LLW Low-Level Waste Mwe Megawatt Electric MWt Megawatts Thermal NEIMA Nuclear Energy Innovation and Modernization Act NPUF Non-Power Production or Utilization Facilities SMR Small Modular Reactor SPRD Spent Fuel Storage/Reactor Decommissioning WIR Waste Incidental to Reprocessing 45

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