ML23089A304

Decommissioning Fund Status Report

ML23089A304
Person / Time
Site:	Kewaunee
Issue date:	03/30/2023
From:	Hazelhoff A Kewaunee Solutions
To:	Office of Nuclear Material Safety and Safeguards, Office of Nuclear Reactor Regulation, Document Control Desk
References
KS-2023-006
Download: ML23089A304 (1)

Text

Kewaunee Power Station, N490 Highway 42, Kewaunee, WI 54216

\\\\4128-2837-6646 v1 10 CFR 50.75 10 CFR 50.82 March 30, 2023 KS-2023-006 ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, D.C. 20555-0001 Kewaunee Power Station Facility Operating License No. DPR-43 NRC Docket No. 50-305 and 72-64

Subject:

Decommissioning Fund Status Report - Kewaunee Power Station Pursuant to 10 CFR 50.75(f)(1) and 10 CFR 50.82(a)(8)(v)-(vii), Kewaunee Solutions, Inc.

(Kewaunee Solutions or KSI, formerly known as Dominion Energy Kewaunee, Inc. or 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, 2022 Table II Decommissioning Funding Status Report for KPS:

Annual Cash Flow Analysis Starting January 1, 2023, through End of Decommissioning The following information is provided in support and as part of this filing:

1.

The NRC approved on March 31, 2022, an indirect license transfer of KPS License No. DPR-43.

The NRCs Order (ML22014A387) allowed EnergySolutions, LLC to acquire the licensee, DEK, and confirmed that the same legal entity would remain the KPS licensee, and its name would change from DEK to Kewaunee Solutions. As stated in the corresponding Safety Evaluation Report, the purpose of the transaction was to transition to an accelerated decommissioning plan, as described in a revision to the Post-Shutdown Decommissioning Activities Report (PSDAR Revision 2). PSDAR Revision 2 was treated as a supplement to the KPS license transfer application (Letter dated June 6, 2021, ADAMS Accession No. ML21148A074). As a consequence of the underlying transaction and the transition to accelerated decommissioning, this Decommissioning Funding Status Report includes only KSI expenses in the post-transaction spend during the previous year and in the Remaining Decommissioning Estimated Cost.

Kewaunee Solutions KS 2023-006 Page 2 of 4 Kewaunee Power Station, N490 Highway 42, Kewaunee, WI 54216

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2.

Remaining costs in Table I and II are presented in 2023 real dollars and are based on our current estimate.

3.

The growth rate on Trust Funds assumes a 2.0% Real Rate of Return.

4.

No rate regulatory authority citation is referenced because the 2% Real Rate of Return allowed by 10 CFR 50.75(e)(1)(i) is used in the calculations.

5.

By letter dated July 27, 2022, (ML22215A151), EnergySolutions, LLC provided to NRC copies of Executed Financial Assurance Instruments for the Kewaunee License Transfer, License No.

DPR-43.

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 also been adjusted for estimated taxes relating to unrealized gain or loss positions.

8.

Since the previous annual submittal on March 30, 2022 (ML22089A243), there have been no changes to the Trust agreements established for nuclear decommissioning of KPS except (a) to acknowledge that, although the Trust Grantor has not changed, the Trust Grantors name has changed to Kewaunee Solutions, Inc.; (b) although the Trust has not changed, the name of the Trust has changed to the Amended and Restated Kewaunee Solutions, Inc. Qualified Nuclear Decommissioning Trust; and (c) to create a subaccount in the amount of $7 million as required by the NRC in its order dated March 31, 2022, approving the Kewaunee License Transfer.

9.

In 2022 when KSI took over, we commenced the transition from SAFSTOR to Prompt DECON, resulting in significantly higher spend in 2022 than forecasted in the 2022 NRC Funding Status Report. Activities to support the License Transfer and, preparations for Prompt DECON include higher planning, overhead and staffing costs, mobilization of site, site infrastructure upgrades, start of site characterization, start of major equipment procurement, planning and award of early demolition work.

Kewaunee Solutions KS 2023-006 Page 3 of 4 Kewaunee Power Station, N490 Highway 42, Kewaunee, WI 54216

\\\\4128-2837-6646 v1 If there are any questions or if additional information is required, please contact me at 269-370-7445.

Sincerely, Amy C. Hazelhoff Vice President, Regulatory Affairs Kewaunee Solutions, Inc.

Enclosure Commitments made in this letter: None cc:

Karl Sturzebecher NRC Project Manager - Kewaunee Power Station U. S. Nuclear Regulatory Commission One White Flint North, Mail Stop O8-D15 11555 Rockville Pike Rockville, MD 20852-2738 Regional Administrator, Region III U. S. Nuclear Regulatory Commission 2443 Warrenville Road, Suite 210 Lisle, Illinois 60532-4352 Amy C Hazelhoff Digitally signed by Amy C Hazelhoff Date: 2023.03.30 15:27:02 -04'00'

Kewaunee Solutions KS 2023-006 Page 4 of 4 Kewaunee Power Station, N490 Highway 42, Kewaunee, WI 54216

\\\\4128-2837-6646 v1 ENCLOSURE Decommissioning Funding Status Report for Kewaunee Solutions, Inc.

Summary Information as of December 31, 2022 (4 Pages Follow)

KS-2023-006 Docket No.: 50-305 and 72-64 KPS Decommissioning Funding Status Report Enclosure, Page 1 of 4

\\\\4128-2837-6646 v1 Table I. Decommissioning Funding Status Report for Kewaunee Solutions, Inc.:

Summary information as of December 31,2022

[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)(A)

Fund Balance Type of Trusts Comments

$745.6 Qualified fund balance As of: 12/31/2022

$0 Non-qualified fund balance As of: 12/31/2022

$0 Less costs incurred but not yet billed to Trust Actual Cost in: As-Spent Dollars

$745.6 Adjusted decommissioning fund balance As of: 12/31/2022 OTHER FINANCIAL ASSURANCE METHODS BEING RELIED UPON 10 CFR Reference(s): 50.82(a)(8)(v)(A)

Creation of new account with balance of $7M at closing, a parent company support agreement executed at closing for DOE reimbursements for spent fuel management expenses and a $25M performance bond obtained at closing as required pursuant to Section 5.14 of the Share Purchase Agreement dated May 6, 2021. See additional details in KSI Decommissioning Fund Status Report as of 12/31/2022.

PRIOR YEARS DECOMMISSIONING EXPENDITURES 10 CFR Reference(s): 50.82(a}(8)(v)(A)

Total License Term Spent Fuel Mgmt Site Restoration Comments

$77.2

$68.0

$9.2

$0.0 2022 Cost in: 2022 Dollars (KSI Only)

$77.2

$68.0

$9.2

$0.0 Total Prior Year in: As-Spent Dollars Although prior year expenditures above only reflect KSI spend, the qualified fund balance does reflect Dominion spend in prior years. Dominion spend in 2022 and prior years was submitted to the NRC, by Dominion, as part of the transfer approval process at the date of license transfer.

PRIOR YEAR EXPENDITURES -VARIANCE TO ESTIMATED ESCALATED COST 10 CFR Reference(s): 50.82(a)(8)(v)(B)

Total License Term Spent Fuel Mgmt Site Restoration Comments

$77.2

$68.0

$9.2

$0.0 2022 Expenditures

$13.7

$3.4

$10.3

$0.0 Amount Forecast in 2022 NRC Funding Status Report

($63.5)

($64.6)

$1.1

$0.0 Variance Variance: Activities to support License Transfer, Preparations for Prompt DECON including higher planning, overhead and staffing costs, mobilization of site, site infrastructure upgrades, start of site characterization, start of major equipment procurement, planning and award of early demolition work.

REMAINING DECOMMISSIONING ESTIMATED COST 10 CFR Reference(s): 50.82(a)(8)(v)(B); 50.82(a)(B)(vi1)(B)

Total License Term Spent Fuel Mgmt Site Restoration Comments

$727.8

$653.9

$35.7

$38.2 Estimate in: 2023 Dollars

• Spent Fuel Mgmt amounts are costs net of assumed DOE reimbursements.

DECOMMISSIONING CRITERIA UPON WHICH THE ESTIMATEIS BASED 10 CFR Reference(s): 50.82(a)(B)(v)(B)

DECON ANY MODIFICATION To METHOD OF PROVIDING FINANCIAL ASSURANCE 10 CFR Reference(s): 50.82(a)(8)(v)(C)

YES - Creation of new account with balance of $7M at closing, a parent company support agreement executed at closing for DOE reimbursements for spent fuel management expenses and a $25M performance bond obtained at closing as required pursuant to Section 5.14 of the Share Purchase Agreement dated May 6, 2021. See additional details in KSI Decommissioning Fund Status Report as of 12/31/2022.

ANY MATERIAL CHANGES To TRUST AGREEMENT SINCE PREVIOUS REPORT 10 CFR Reference(s): 50.82(a)(B)(v)(D)

See Note 8. on Decommissioning Fund Status Report regarding changes to trust agreement.

NEED FOR ADDITIONAL FINANCIAL ASSURANCE 10 CFR Reference(s): 50.82(a)(8)(vi); 50.82(a)(B)(vii)(C)

NONE

KS-2023-006 Docket No.: 50-305 and 72-64 KPS Decommissioning Funding Status Report Enclosure, Page 2 of 4

\\\\4128-2837-6646 v1 Table II. Decommissioning Funding Status Report for Kewaunee Solutions, Inc.:

Annual Cash Flow Analysis Starting January 1,2023 through End of Decommissioning

[10 CFR 50.82 (a)(8)(v)-(vii)]

(in millions of dollars)

Year Beginning of Year Balance (after tax)

Earnings Withdrawals End of Year Balance 2023

$745.6

$14.1

$78.9

$680.8 2024

$680.8

$12.5

$107.6

$585.8 2025

$585.8

$10.6

$112.1

$484.3 2026

$484.3

$8.6

$110.7

$382.2 2027

$382.2

$6.4

$120.2

$268.5 2028

$268.5

$4.3

$111.9

$160.9 2029

$160.9

$2.2

$98.8

$64.3 2030

$64.3

$0.9

$35.3

$30.0 2031

$30.0

$0.5

$7.6

$22.9 2032

$22.9

$0.5

$0.4

$23.0 2033

$23.0

$0.5

$0.2

$23.3 2034

$23.3

$0.5

$0.2

$23.6 2035

$23.6

$0.5

$0.2

$23.8 2036

$23.8

$0.5

$0.2

$24.2 2037

$24.2

$0.5

$0.2

$24.5 2038

$24.5

$0.5

$0.2

$24.8 2039

$24.8

$0.5

$0.2

$25.1 2040

$25.1

$0.5

$0.2

$25.4 2041

$25.4

$0.5

$0.2

$25.8 2042

$25.8

$0.5

$0.2

$26.1 2043

$26.1

$0.5

$0.2

$26.5 2044

$26.5

$0.5

$0.2

$26.8 2045

$26.8

$0.5

$0.2

$27.2 2046

$27.2

$0.5

$0.2

$27.6 2047

$27.6

$0.5

$0.2

$27.9 2048

$27.9

$0.6

$0.2

$28.3 2049

$28.3

$0.6

$0.1

$28.8 2050

$28.8

$0.5

$3.9

$25.4 2051

$25.4

$0.4

$5.9

$20.0 2052

$20.0

$0.3

$6.6

$13.7 2053

$13.7

$0.2

$3.4

$10.6 2054

$10.6

$0.3

($4.7)

$15.5 2055

$15.5

$0.4

($6.6)

$22.6 Remaining $ in 2023 Dollars

$71.5

$794.5 Est Fund Balance (end of Decommissioning) (in Future $ escalated at 0.0% & 2.0% Real Rate of Return Fund Growth Rate)

$22.6

KS-2023-006 Docket No.: 50-305 and 72-64 KPS Decommissioning Funding Status Report Enclosure, Page 3 of 4

\\\\4128-2837-6646 v1 Table II Definitions:

Column 1 Beginning of Year Balance:

Reflects the beginning-of-year after-tax Trust Fund balance.

Column 2 Earnings on Trust Funds:

Reflects earnings on funds remaining in the Trust. A 2.0% RRoR Fund growth rate is used for 2023 through 2055, which reflects the allowed 2.0% RRoR over a 0.0% cost escalation rate. Earnings are based on a 2.0% rate of return on the average of Beginning Balance and Beginning Balance plus Deposits less Withdrawals.

Column 3 Withdrawals:

Withdrawals include the following:

a.

Annual License Termination Plan cost portion at a 0.0% escalation rate from the Site-Specific Estimate.

b.

Annual Irradiated Fuel Management Plan cost portion at a 0.0%

escalation rate from the Site-Specific Estimate.

c.

Annual Site Restoration Plan cost portion at a 0.0% escalation rate from the Site-Specific Estimate.

d.

Estimated taxes on unrealized gains at a 0.0% escalation rate.

e.

Withdrawal amounts are costs net of assumed DOE reimbursements.

Note: Credit balances in years 2054 and 2055 represent DOE reimbursements in excess of cost for that year.

Column 4 End of Year Balance:

Reflects the end of year Trust Fund balance after projected earnings are added and projected withdrawals are deducted for the year.

KS-2023-006 Docket No.: 50-305 and 72-64 KPS Decommissioning Funding Status Report Enclosure, Page 4 of 4

\\\\4128-2837-6646 v1 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 (ML14118A382) dated April 25, 2014, originally filed by DEK.

Table I Remaining Decommissioning Estimated Cost and Table II are based on a PSDAR, Revision 2 dated May 13, 2021, filed by EnergySolutions, LLC.

2)

The Trust Fund Balance reflects market value on December 31, 2022, net of estimated 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. The cash flow analysis in Table II 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)

On May 21, 2014 (ML13337A287), the NRC granted Dominion Energy Kewaunee, Inc., renamed Kewaunee Solutions, Inc., an exemption allowing the Trust to be used for spent fuel management costs.

6)

By letter dated July 27, 2022, (ML22215A151) EnergySolutions, LLC provided to NRC copies of Executed Financial Assurance Instruments for the Kewaunee License Transfer, License No. DPR-43.

a.

An amendment to the KPS Amended and Restated Qualified Nuclear Decommissioning Trust Agreement was executed effective as of the closing date documenting the creation of a new sub-account with a balance of $7 million;

b.

A parent company support agreement was executed effective as of closing, in the form and substance required by the NRCs Order.; and

c.

EnergySolutions, LLC obtained by closing, a $25M performance bond(s) as required pursuant to Section 5.14 of the Share Purchase Agreement dated as of May 6, 2021, by and between EnergySolutions, LLC and Dominion Nuclear Projects, Inc.

d.

These instruments satisfy Condition (1) of the order dated March 31, 2022, and Condition C.17 of the conforming license amendment to reflect the indirect license transfer.