ML23151A577

PRM-050-057 - 57FR02059 - North Carolina Public Staff Utility Commission; Filing of Petition for Rulemaking

ML23151A577
Person / Time
Issue date:	01/17/1992
From:	Chilk S NRC/SECY
To:
References
PRM-050-057, 57FR02059
Download: ML23151A577 (1)

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ADAMS Template: SECY-067 DOCUMENT DATE: 01/17/1992 TITLE: PRM-050-057 - 57FR02059 - NORTH CAROLINA PUBLIC STAFF UTILITY COMMISSION; FILING OF PETITION FOR RULEMAKING CASE

REFERENCE:

PRM-050-057 57FR02059 KEYWORD: RULEMAKING COMMENTS Document Sensitivity: Non-sensitive - SUNS! Review Complete

STATUS OF RULEMAKING PROPOSED RULE: PRM-050-057 OPEN ITEM (Y/N) N RULB NAME: NORTH CAROLINA PUBLIC STAPF UTILITY COMMISSION; FILING OP PETITION FOR RULEMAKING PROPOSED RULE FED REG CITE: 57FR02059 PROPOSED RULE PUBLICATION DATE: 01/17/92 NUMBER OF COMMENTS: 15 ORIGINAL DATE FOR COMMENTS: 03/17/92 EXTENSION DATE: I I FINAL RULB FED. REG. CITE: FINAL RULE PUBLICATION DATE: I I NOTES ON PETITION REQUESTS THAT NRC REDUCE OR ELIMINATE INSURANCE REQUIREME ATUS NTS FOR NUCLEAR POWER PLANTS THAT ARE SHUT DOWN AND FROM WHICH THE RULE FUEL HAS BEEN REMOVED. FILE LOCATED ON 16-G.

TO FIND THE STAFF CONTACT OR VIEW THE RULEMAKING HISTORY PRESS PAGE DOWN KEY HISTORY OF THE RULE PART AFFECTED: PRM-050-057 RULE TITLE: NORTH CAROLINA PUBLIC STAPP UTILITY COMMISSION; FILING OF PETITION FOR RULEMAKING

.OPOSED RULE PROPOSED RULE DATE PROPOSED RULE SECY PAPER: SRM DATE: I I SIGNED BY SECRETARY: 01/10/92 FINAL RULB FINAL RULE DATE FINAL RULE SECY PAPER: SRM DATE: I I SIGNED BY SECRETARY: I I STAFF CONTACTS ON THE RULE CONTACTl: MICHAEL T. LESAR MAIL STOP: P-223 PHONE: 492-7758 CONTACT2: MAIL STOP: PHONE:

DOCKET NO. PRM-050-057 (57FR02059)

In the Matter of NORTH CAROLINA PUBLIC STAFF UTILITY COMMISSION; FILING OF PETITION FOR RULEMAKING DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT 10/02/91 09/25/91 LTR ROBERT P. GRUBER TO SECRETARY CONSTITUTING THE PETITION FOR RULEMAKING, SUBMITTED BY THE NORTH CAROLINA PUBLIC STAFF UTILITIES COMMISSION 01/15/92 01/10/92 FEDERAL REGISTER NOTICE - RECEIPT OF PETITION FOR RULEMAKING 03/17/92 03/17/92 COMMENT OF EDISON ELECTRIC INSTITUTE

{DAVID K. OWENS) { 1) 03/17/92 03/17/92 COMMENT OF UTILITY DECOMMISSIONING GROUP & 3 OTHER (JOESPH B. KNOTTS, JR.) ( 2) 03/17/92 03/17/92 COMMENT OF U.S. COUNCIL FOR ENERGY AWARENESS (MARVIN S. FERTEL, VICE PRESIDENT) ( 8)

- 03/17/92 03/17/92 COMMENT OF NUCLEAR MANAGEMENT AND RESOURCES COUNCIL (THOMAS E. TIPTON) ( 4) 03/17/92 03/17/92 COMMENT OF OMAHA PUBLIC POWER DISTRICT

{HARRY H. VOIGT) ( 5) 03/17/92 03/17/92 COMMENT OF SOUTHERN NUCLEAR OPERATING COMPANY

{J. D. WOODARD) ( 6) 03/17/92 03/17/92 COMMENT OF GEORGIA POWER COMPANY (C. K. MCCOY) ( 7) 03/17/92 03/17/92 COMMENT #3 WAS A FAX COPY OF COMMENT NO. 8.

COMMENT NO. 3 HAS BEEN REMOVED FROM THE FILE.

03/19/92 03/13/92 COMMENT OF FLORIDA POWRE & LIGHT COMPANY

{W. H. BOHLKE, VICE PRESIDENT) { 9) 03/19/92 03/16/92 COMMENT OF TU ELECTRIC (WILLIAM J. CAHILL, JR.) { 10) 03/20/92 03/17/92 COMMENT OF DUKE POWER COMPANY (ALBERT V. CARR, JR.) ( 11}

03/20/92 03/17/92 COMMENT OF SACRAMENTO MUNICIPAL UTILITY DISTRICT (JAMES R. SHETLER) { 12)

DOCKET NO. PRM-050-057 (57FR02059)

DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT 03/23/92 03/17/92 COMMENT OF PHILADELPHIA ELECTRIC COMPANY (G. J. BECK, MANAGER) ( 13) 03/23/92 03/19/92 COMMENT OF ANI/MAELU (JOSEPH MARRONE) ( 14) 03/25/92 03/15/92 COMMENT OF MARV IN I. LEWIS ( 15)

DOCKET NUMBER PETITION RULE PRM £, o .,,,§ 7 c \

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• 92 MAR 25 A9 :30 Marvin I. Lewis CFF!Ct- OF StC R TAI~..,,

7801 Roosevelt Boulevard 0-0CK[ i !NG l.r: Si:.flV ICf 8HA NCH Suite 62 Phila., PA 19152 (215)624-1574 Secretary USNRC Washington, D. C. 20555 Dear Mr. Secretary; Docket PRM 50 57 is a petition for relief from insuran~e a equirements. The petitic,n ignc,res many facts. Cc,ntaminatic,n has

• :curred at many nuclear facilities, and the Department of Energy and the Department of Defense are admitting to cleanups which will cost in excess of $150,000,000,000.00.

Hanford tanks may explode causing radioactive waste accidents 1n excess of those at Kyshtym in the Urals.

We have had too many nuclear surprises of late. We do not need to meet more nuclear surprises without sufficient insurance to assuage the injured parties.

I, respectfully, request that the NRC deny this petition for cause and with prejudice.

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DOCKEi NUMBER PETITION RULE PRM 5 D- 5 7 AMERICAN / 57 ;:,,e z.os'IJ C.. JOSEPH MARRONE NUCLEAR OOCKETU1 USNhC Senior Vice President and General Counsel INSURERS

'92 MAR 23 A9 :42 March 19, 1992 Secretary U.S. Nuclear Regulatory Commission

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Washington, DC 20555 Attention: Docketing & Service Branch COMMENT ON PETITION FOR RULEMAKING OF NORTH CAROLINA PUBLIC STAFF UTILITY COMMISSION (DOCKET NO. PRM-50-57)

American Nuclear Insurers (ANI) and Mutual Atomic Energy Liability Underwriters (MAELU) have provided nuclear liability insurance and property insurance to the nuclear industry since 1957. ANI and MAELU have actively participated in the discussions leading to modifications, from time to time, in the Price-Anderson Law and in regulations that set forth insurance requirements.

While we do not make a recommendation respecting the NRC's response to the petition, we offer comment on the issues that underlie the NRC's consideration of the matter. Our interest is that changes made in insurance requirements not detract from the soundness of the system in place to assure protection for the public and for those who may be liable.

General Observations As respects the petition for change in the stabilization and decontamination insurance required by section 10CFR 50.54(w), we note that section 50.12 (Specific Exemptions) grants the NRC broad authority to exempt a licensee from the requirements of Part 50. As respects the second petition concerned with nuclear liability insurance required by 10 CFR 140.ll(a) (4), section 140.8 (Specific Exemptions) similarly authorizes broad authority to exempt a licensee from the requirements of Part 140.

Petitioners have not elected to leave it to the licensees to apply for specific exemption. The reasons offered for the proposed changes in insurance requirements would have broad application, and consideration of generic rulemaking at some point, after appropriate study, may be warranted. If generic rulemaking proves inappropriate, application for specific exemption remains avail-able.

The petitioners would have the NRC decide now what its insurance requirements for licensees will be far into the future at the time a nuclear facility is shut down and all fuel is removed from the APR 15 1992 ._

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Town Center, Suite 300S / 29 South Main Street / West Hartford. CT 06107-2445 / (203) 561 -3433 FAX (203) 561-4655

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2 site. The petitioner is concerned that charges to utility ratepayers in current operating years for future insurance costs may be excessive. They believe this may be so because there will either be no need for any insurance, or lesser amounts of insurance would suffice. Projections for these costs might then be reduced, benefiting current and future utility ratepayers.

An important factor that must be weighed by those who are concerned with future decommissioning costs, is not simply the amount of required insurance, but also the price of the future insurance.

The insurance premium for a nuclear facility that has ceased operations under normal conditions, and has all fuel removed from the site, would be much less than the premium for an operating reactor. The property insurance that a licensee would purchase at the time of SAFSTOR would likely not include much coverage for physical damage to the property in SAFSTOR because it presumably has limited insurable value. The main area of coverage would probably be to insure the iicensee' s obligations under 10CFR50.54(w), and the premium would reflect reduced coverage as well as reduced activity at the facility.

It would be erroneous by a wide margin to use insurance costs for an operating nuclear facility to estimate future insurance premium during SAFSTOR (with spent fuel removed) when there is reduced activity at the site. Better information respecting the difference in premium should produce more accurate projections that would result in more equitable assignment of costs. This may alleviate much of the concern of the petitioner.

I. comments on Proposed Change to 10CFR50.54(w)

The purpose of this regulation is to assure that there are sufficient funds to remedy conditions on a nuclear facility that pose a threat to the public as the result of a severe nuclear accident. In circumstances where the licensee has suffered a great financial loss this regulation assures the adequacy of resources ($1.06 billion) to remove the danger.

However, if circumstances are such that a severe nuclear accident cannot occur, it would be reasonable to substantially reduce, and possibly, eliminate the insurance requirement.

Were a lesser incident to occur, such as a fire that might further spread contamination on-site, the licensee would likely have the resources to remove any plausible threat to the public since the licensee has not simultaneously suftered the great financial loss that would result from a major nuclear accident.

In summary, we believe that substantially reducing, and possibly even eliminating tne insurance requirement under section 50. 54 (w), is unlikely to compromise the protection for the public in circumstances where a facility has had a normal end-of-life shutdown and all fuel is removed from the site.

3 Our view of this issue is not materially different if a Licensed Independent Spent Fuel Storage Installation for the site operator's spent fuel is established at the location.

Though this poses more risk than having no fuel on the site,*

it is likely the licensee, assuming normal financial conditions, would have adequate resources to rectify conditions on-site that pose a threat to the public.

II. Petition for Amendment of 10 CFR 140.11 Nuclear liability insurance provided by the Pools under the Facility Form has been utilized by all nuclear power reactor operators as primary financial protection to satisfy the first layer of the financial protection requirements of the Price-Anderson Law. In addition, the Pools administer the secondary layer of financial protection by means of a Nuclear Energy Liability Insurance policy in which all funds required to pay claims and claims expense are provided by retrospective premiums paid by licensees of power reactors as required by section 170b. of the Atomic Energy Law.

Amending the level of required financial protection poses more complex questions than the change requested in 10 CFR50. 54 (w)

• The insurance required by 10 CFR 50.54(w) is only activated by a major reactor accident. The insurance is dormant until such time. The financial protection required pursuant to 10 CFR 140.11, however, has applied throughout the operating life of the reactor. During that period controlled amounts of nuclear material have been released to the environment in the course of normal operations, and persons on-site received controlled occupational exposures.

In addition, unlike the protection required by 10CFRS0.54(w) which insures only the licensee, this regulation requires financial protection that includes as an insured all private entities that may be liable. Changes in 10CFR140.11 thus could' adversely affect a much wider range of interests.

Tort liability claims by the public or on-site workers may allege harm caused at any time in the operating history of the reactor. Such claims might be asserted many years after the alleged exposure occurred. If the financial protection provided through policies issued by ANI and MAELU was terminated, as suggested by the petitioner, only claims for injury or damage caused during the policy period which are asserted within 10 years of the end of the policy period would be covered. 1 1 As respects claims arising out of an "Extraordinary Nuclear Occurrence", the ten-year period is extended to twenty years.

4 other compiications arise from terminating the policies.

For example, a claimant demands damages for alleged harm from contact with nuclear material both during and after the policy period. The terminated policies cover only liability for bodily injury or property damage during the policy period (the time the policies are in effect). The policies do not cover that part of the claim for harm caused after the end of the policy period.

or, nuclear material may have been released while the policy was in effect, but the all~ged contact with the material, and hence, the harm, was ,caused after termination of the policies.

There would be no coverage under the policies for this claim .

• The need to retain the primary layer of financial protection is reinforced by circumstances where a continuing risk is present in the form of a Licensed Independent Spent Fu.el Storage Installation at the location.

So long as private insurance is available at reasonable cost and on reasonable terms, it should be utilized before the application of government indemnity. Assuming that these qualifying conditions are satisfied, the primary layer of financial protection_ of $200 million, whether satisfied by our policies, or by other means, should be continued. The desirable result would be uninterrupted primary financial protection from private 'sources from the time new fuel is first shipped to the site until such time as the facility is released for unrestricted use. The ten-year discovery period which limits coverage to claims brought within ten years after the end of the pollcy period would only begin to run at that late date.

III. secondary Layer of Financial Protection The petitioner urges that a licensee not continue to be liable for retrospective assessments in the second layer of financial protection if all power reactors at its site have been shut down with all fuel removed from the location. The licensee would then be relieved of the assessment liability prescribed in Section 170b. of the Atomic Energy Law to contribute to the indemnity and claims expense due to nuclear incidents at ~ny li9ensed power reactor.

It is reasonable that a licensee of a power reactor which is shutdown Uhder normal conditions, and has had all fuel removed from the location, be relieved from having to continue its participation in the second layer. The relief afforded would be as respects liability for assessments for nuclear incidents that occur after a spe~ified date. Assume, for example, t~at all fuel has been shipped from the site of the shutdown reactor and delivered elsewhere by December 31, 199.5. The

5 licensee could be relieved of liability arising from nuclear incidents which occur after that date. Its Certificate of Insurance evidencing participation in the Second Layer of Protection would be terminated as of December 31, 1995.

our view is the same in circumstances where a Licensed Independent Spent Fuel Storage Installation is established at the location. The risk to the public is orders of magnitude less than that of an operating reactor, and does not equitably support continuing the liability of the licensee for new events in the second layer of financial protection.

Though relieved of liability for future incidents, under the terms of the licensee's Certificate of Insurance, the licensee continues to be liable for claims which arise from nuclear incidents during the time its Certificate was in effect if such claims are brought within ten years after the Certificate is terminated. 2 In summary, as respects section 10CFR140.11, it is important that the requirement for the full amount of the primary layer of financial protection be continued. This assumes that the financial protection available to licensees continues to be provided at reasonable cost and on reasonable terms.

We appreciate this opportunity to offer comment, and have sought to be constructive in our remarks.

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ident eral Counsel JM/jr 2 With respect to claims that arise from an Extraordinary Nuclear Occurrence, the Second Layer of Financial Protection provides coverage for claims brought without limitation as to time.

DOCKET NUMBER PETITION RULE PAM 5o-..5 7 PHILADELPIIlA ELECTRIC COMP~ ; ? . osi)

NUCLEAR GROUP HEADQUARTERS  ; uC KL i LU 955-65 CHESTERBROOK BLVD. U:> NRC WAYNE. PA 19087-5691 (215) 640-6000 "92 MAR 23 Al1 :4 7 vfr!C!:: OF St Ci<!- lAt~Y DOCK[1 !NG:,,. S[h v If.I NUCLEAR ENGINEERING & SERVICES DEPAKfMENT BR.A M arcNChl-l 1 7 , 1992 Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Attn: Docketing and Serv i ce Branch Washington, DC 20555

Subject:

Philadelphia Electric Company Comments Concerning the Nuclear Regulatory Commission's 10 CFR 50 and 140 Petition for Rulemaking by the North Carolina Public Staff Utility Commission (57 FR 2059)

Dear Mr. Chilk:

This letter is being submitted in response to the Nuclear Regulatory Commission's (NRC's) request for comments concerning the 10 CFR 50 and 140 Petition for Rulemaking (PRM) by the North Carolina Public Staff Utility Commission published in the Federal Register (57 FR 2059, dated January 17, 1992).

Philadelphia Electric Company (PECo) appreciates the opportunity to comment on this PRM. The North Carolina Public Staff Utility Commission filed this PRM with the NRC on September 25, 1991,

• requesting that the NRC substantially reduce or eliminate insurance requirements for nuclear power reactors when all the reactors on a site have been shut down and are awaiting decommissioning and all nuclear fuel has been removed from the site. PECo does not consider that rulemak ing, as proposed, is needed at this time and provides the following discussion in support of our position.

Although this PRM requests that the level of insurance for permanently shut down nuclear reactors be reduced or eliminated, a utility's best interest may best be served by maintaining a level of i nsurance coverage commensurate with any potential risks (i.e.,

flooding, fire, etc.) which could result in the spread of contamination. Insurance rates should reflect the level of potential risk. currently, during an outage, insurers provide reduced premiums through use of shutdown credits. Depending on the activities performed during an outage, the shutdown credit can be significant. Therefore, when a l l the nuclear fuel is removed from a reactor site, insurers should reduce the rates associated with nuclear liability and property insurance coverage. We consider that maintaining nuclear liability

~PR 15 1991 -

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U.S. Nuclear Regulatory Commiss ion March 17, 1992 Mr. Samuel J. Chilk Page 2 insurance coverage after a reactor has been permanently shut down may be necessary in order to provide adequate coverage for late reported claims related to reactor operation but not identified until many years later. Furthermore, rulemaking as requested by this PRM may not be necessary, since under the current regulations the NRC may grant exemptions to licensees to reduce the amount of liability and property insurance coverage on a case-by-case basis. Finally, we support the Nuclear Management and Resources Council's (NUMARC's) position and comments regarding this PRM.

If you have any questions, please do not hesitate to contact us .

• Very truly yours,

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Manager Licensing Section

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SACRAMEN TO MUNICIPAL UTILITY DISTRICT O 620 1 S Street, P.O.)~oJJ rslfao, Sacramento CA 95 852-18 30, (916) 4 52 -3 211 AN ELECTRIC SYSTEM SERVING THE HEART OF CALIFORNIA

-S2 tr : 20 P 4 :C4 DAGM/NUC 92-055 March 17, 1992 @

Mr. Samuel J. Chilk Secretary U.S. Nuclear Regulatory Commission Washington, DC 20555 Attention: Docketing and Services Branch COMMENTS ON THE PETITION FOR RULEMAKING REGARDING THE REDUCTION OF INSURANCE REQUIREMENTS FOR PERMANENTLY SHUTDOWN NUCLEAR POWER REACTORS

Dear Mr. Chilk:

The Sacramento Municipal Utility District (District) generally agrees with the North Carolina Public Utility Commission's petition for rulemaking. The NRC should include provisions in 10 CFR 50.54(w) and 10 CFR 140 for reducing the insurance requirements for nuclear power reactors that have shut down permanently and have removed all of the fuel from the reactor.

The regulatory requirements for onsite decontamination and property insurance, and primary liability coverage and secondary protection were predicated on accident conditions that coul d exist at an operating facility. The requirements of 1 0 CFR 50. 54 (w) are intended to ensure that an electric utility licensed under 10 CFR 50 has sufficient property and decontamination insurance to protect the licensee's obligation to stabilize and decontaminate the reactor in the event of an accident. The requirements in 10 CFR 140 are intended to indemnify and limit third party liabi l ity regarding the costs of third party liability for extraordinary nuclear occurrence or nuclear i ncident.

These insurance and financial protection requirements were based on the design basis accidents for operating nuclear power plants.

After a nuclear power facility has shut down permanently, and the reactor has been completely defueled, the number of credible accidents that could pose a threat to public health and safety is reduced substantially. In many cases, there are no c r edibl e accidents that could exceed 10 CFR 100 l imits.

The amount of coverage and financial protection required by the regulations is based on an operating faci l ity. The amount of APR 15 1992 Acknowledged by card ....."."""'"""'"""'"'

RANCHO SECO NUCLEAR GENERATING STATION 14440 Twin Cities Road , Herald, CA 95638-9799; (209) 333 -2935

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S. Chilk DAGM/NUC 92-055 coverage that should be required for a permanently shut down facility should be significantly less than that considered when the rule was contemplated and subsequently amended. Literal compliance with these requirements could result in undue financial hardship, because the cost to the ratepayers to maintain the required insurance and financial protection i s significantly in excess of that contemplated when the rule was adopted. Moreover, it would not be reasonable to require a non-operating plant to participate in the secondary financial protection program with a financial exposure of up to $66 million per accident when the same plant creates no credible risk of retrospective assessments against other reactor operators.

While the District does not favor automatic blanket exemptions from property/decontamination and liability insurance/retrospective assessments, specific relief is warranted. Utilities that have a permanently shutdown reactor should be allowed to develop and evaluate appropriate maximum foreseeable property loss and liability scenarios to determine the effects (e.g., property loss, radiological consequences, liability) of credible accidents, and determine appropriate property and liability insurance protection requirements. NRC regulations should provide for a reduction in the insurance requirements commensurate with the results of the evaluation.

Members of your staff with questions requiring additional information or clarification may contact Bob Jones at (916)452-3211, extension 4676.

Sincerely,

~C#

James R. Shetler Deputy Assistant General Manager Nuclear cc: J. B. Martin, NRC, Walnut Creek

s. Weiss, NRC, Washington

DOCKET NUMBER II PETITION RULE PAM 5"__ O-- 5' ~ '\ I Duke Power Company  ?;°7 r ~ ;l o5J__.,J (704)382_-8137Fax Legal Department 422 South Church Street DOCKETED STEVE C. GRIFFITH, JR.

Charlotte, NC 28242-0001 USNHC LEWIS F. CAMP, JR.

RAYMOND A. Joar, JR.

W EDWARD POE, JR.

ELLEN T. RUFF DUKEPOWER

• 92 MAR 20 P3 :27 WIUIAM LARRY PORTER JOHN E. LANSCHE ALBERT V CARR, JR.

04/382-8129 WILLIAM J. BOWMAN, JR.

ROBERT M. BISANAR EDWARD M. MARSH, JR.

RONALD V SHEARIN Ma rch 17, 1992 W WALLACE GREGORY, JR.

JEFFERSON D. GRIFFITH, Ill JEFFREY M. TREPEL PAULR. NEWT'ON GARRY S. RICE Mr. Samuel J. Chil k LISA A. FINGER Secretary of the Commiss i on KAROL P. MACK U. S. Nuc l ear Reg ula to ry Commission CHRISTIN J. BRAMLETT Wash i ngton, DC 20555 OF COUNSEL Will/AM I. WARD, JR.

GEORGE W FERGUSON, JR.

Attn: Docke t ing and Service Branch Re: Notice of Receipt of Petition for Rulemaking Insurance Requirements for Shutdown Reactors (PRM-50-37) 57 Fed. Reg. 2,059 (Jan. 17. 1992)

Dear Mr. Chilk:

In accordance with the above-referenced Notice of Petition for Rulemaking, I hereby submit the following comments on behalf of Duke Power Company (Duke). The Petition, whic h was filed by the Public Staff of the North Carolina Utilities Commission (Public Staff), requests that the Commission initiate a rulemaki ng which would reduce or eliminate insurance requirements for nuclear power reactors if all the nuclear reactors on a particular station site have been shut down and are awaiting decommissioning, and all nuclear fuel has been removed from the site. The effect of such a rule, according to Public Staff, would be to encourage utilities to adopt the SAFSTOR decommissioning option through reduction of SAFSTOR costs by the am ount of insurance coverage now required to be carried.

For the reasons set forth herein, Duke op poses the Petition. While there may be some merit to the 11 cost-savingi: aspect of the regulation proposed by the Public Staff in those i nstances in which current insurance requirements are truly unnecessary, Duke does not be 1i eve that a rulemaking is warranted. Duke believes the current regulatory mechanism (i.e . , the exemption process) already permits licensees to seek the appropriate rel i ef from in su rance requirements on a case-by-case basis. Because the exemp tion process exists and because the Commission already has utilized that process in allowing utilities to reduce coverage in appropriate circumstances, Duke does not believe any need has been demonstrated for adopt i on of a generic rule for removal of coverage . Indeed, adop tion of such a rule would remove the flex i bility that now ex i sts to address each licensee's situat i on on an indiv i dual basis .

~PR 15 199Z ,

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Summary of Petition for Rulemaking The Petition for Rulemaking requests that the Commission initiate a rulemaking which would propose changes to 10 C.F.R. §50.54(w) and to 10 C.F.R. §140.11 which (1) would waive the requirements to maintain

$1.06 billion in insurance for on-site property insurance and (2) would waive the requirement Linder the Price-Anderson Act to maintain $200 million in primary liability insurance protection (and secondary coverage in the form of a potential $63 million retrospective premium assessment in the event of an extraordinary nuclear occurrence). The Petition proposes that these requirements be waived if "all nuclear reactors on a station site have been shutdown and all nuclear fuel has been removed from the reactor station site except as may be stored in a licensed Independent Spent Fuel Storage Installation (ISFSI). 11 The proposal assumes that, during SAFSTOR, the spent nuclear fuel will be stored in an ISFSI.

As the basis for the proposal, the Petition asserts that there are no health and safety reasons that would require maintenance of the on-site property damage insurance at a reactor that has been shut down with no nuclear fuel on site. The petition also asserts that in the case of public liability insurance, it would be unreasonable for the owner of a permanently shutdown reactor to continue to be liable for retrospective premium charges in the event of an accident at an operating reactor elsewhere when the occurrence of an accident is not considered possible at the reactor that has been shut down.

The Petition asserts that the proposal is of immedi ate importance in that the in"surance required during SAFSTOR decommissioning will result in significant collections from utility rate payers during current operating years.

Comments on Petition for Rulemaking The Commission requires that electric utility licensees take reasonable steps to obtain "property" or 11 on-site 11 i nsurance coverage to be used to stabi 1i ze and decontaminate the reactor and reactor station site in the event of a nuclear accident. 10 C.F.R. §50.54(w).

The Price-Anderson Act, as amended, 42 U.S .C. §2210, and the NRC' s implementing regulations, 10 C.F.R. §140 .ll(a)(4), require each licensee having a nuclear plant that is "designed for producing substantial amounts of electricity," 42 U.S.C. §2210(b)(l)(C), to maintain primary and secondary financial protection in specified amounts.

There is no need for the Commission t o initiate a proceeding to consider whether adoption of a generic rule for exemption from these requirements is neces~ary. First, contary to the implications in the Petition, the costs referenced by the Public Staff are not a significa nt factor in the context of the decommi ssi oni ng funding requirements established by the NRC. Moreover, and most importantly, the Commission currently has the authority to consider, on a case-by-case basis, whether specific conditions applicable to specific licensees warrant partial or total relief from the existing generic requirements.

With respect to property insurance, the Commission already has found in several individual cases (Rancho Seco, Shoreham, Humboldt Bay and Seabrook) that where a licensee has shut down and defueled a large light water reactor, the possibility for an accident that would necessitate full insurance coverage as required in 10 C. F. R. §50.54(w) is substantially reduced and, therefore, partial exemptions from Section 50 . 54(w) are warranted. The current regulatory scheme also allows the Commission, in the case of a reactor which has been shut down, to consider reduction or elimination of Price-Anderson coverage through the exemption process. 1/ Consequently, it is unnecessary for the Commission to initiate rulemaking to enable licensees to pursue reduction of such coverage.

Because the Commission's exemption process allows licensees, based on their specific situation, to pursue reduction i~ the required property insurance coverages and/or Price-Anderson coverages, there is no need for the Commission to initiate a proceeding to adopt a generic rule to provide for such reduction. Indeed, to adopt such a rule would remove the already-existing flexibility from licensees and the Commission to deal with individual circumstances in a way that best meets the needs of all concerned. For both Price-Anderson and property insurance coverages, the better regulatory scheme is for licensees to continue to pursue reduction of such coverages on a case-by-case basis, using the existing exemption process, if necessary, so as to take into account considerations unique to each faci l ity.

Conclusion and Recommendation

• For the reasons set forth above, Duke urges the Commission not to undertake the rulemaking requested by the Petition. Given *the present 1/ The NRC has permitted withdrawal from the secondary insurance program for Indian Point Unit I, a reactor which has been shut down.

In that case, other reactors (Indi an Point Units 2 and 3) continue to operate at the site, the licensee still possesses a provisional operati ng license for the plant, has spent fuel on site, and intends to undertake actual decommissioning in the next century. The Commission reviewed that specific situation and concluded that 11 no participation in the secondary financial protection program shall be requ ired with respect to a reactor wh ich has been permanently shut down, and where the licensee's authority to operate the unit as a power reactor has been revoked by the Commission." This situation is noteworthy, and highlights the benefit of case-by-case review, in that such relief would not be available under the conditions contemplated by the Petition because there are still reactors operating at the station site.

existence of a regulatory mechanism to obtain the relief sought by the Petition, the resources that would be dedicated to a rulemaking effort would not be justified.

We would urge the Commission, upon denial of the Petition, to reiterate the availability of the exemption process and encourage licensees to utilize that mechanism when appropriate for reducing insurance obligations. Such a statement of intent would serve to reconfirm the viability of the current regulatory scheme.

We appreciate the opportunity to comment on this Petition for Rulemaking.

dill ur

• AVC , Jr ./ sj r Albert V. Car Associate Gen DOCKET NUMBER 7 PETITION RULE PRM 5 V- 5 :Ct l

(.! ? f/1< ;)o5;/

- -- Log fl TXX -92152 File# 10185

(, CI\EiLO US NRC

'92 MAR 19 P 2 :4

'ffJELECTRIC March 16, 1992 WIiiiam J. Cahlll, Jr.

Gro11p Vice Pre$ident U. S. Nuc l ear Regulatory Commission ATTN: Docketing and Service Branch Washington, DC 20555

SUBJECT:

COMANCHE PEAK STEAM ELECTRIC STATION (CPSES)

NORTH CAROLINA PUBLIC UTILITY COMMISSION; FILING OF PETITION FOR RULEMAK ING Gentlemen:

On January 17, 1992 the NRC published for public comment in the Federal Register (57FR2059) a request for rulemaking from th~ North Carolina Public Utility Commission (NCPUC). TU Electric, by this letter provides comment to this petition for Rulemaking.

The NCPUC has requested that the insurance requirements of 10CFR50.54 and 10CFR140.ll be substantially reduced or preferably eliminated for a nuclear plant where all the fuel has been remov ed from the site. The NCPUC states that in the absence of fuel the insurance requirements of 10CFR50.54, whose purpose is for the stabilization of the reactor and decontamination of the reactor and the station in the event of a nuclear accident, seem unreasonable and requests the requirement be waived.

The petitioner is correct in stating that there is no criticality risk associated with an empty vessel or fuel pool. However, even after the fuel is removed there is still the risk. although reduced, of airborne contamination or accidental spills for which some type of property insurance is needed. The NRC has provisions in 10CFR50.12 and has granted case by case exemptions from the requirements of 10CFR50.54 to Shoreham, Rancho Seco, and Fort St. Vrain.

The NCPUC also petitions that the requir eme nts for public offsite liability insurance required under 10CFR140.ll be wai ved for a reactor awaiting decommissioning when all fuel has been re moved from the site. 10CFR140.ll requires licensees to have and maintain financial protection of $200 million plus the amount available as secondary financial protection. This secondary financial protection is available under an industry retrospective plan where each licensee is liable for a pro-rata share of the aggregate public liability in the event of an accident. The NCPUC states that in the absence of fuel at the site it is unreasonable that the owner of a dormant reactor continue for many years to be liable for a pro-rata share of the secondary financial protection plan. Again, 10CFR50.12, as well as the Price-Anderson Act do allow case by case exemptions from the requirements of 10CFR140.ll.

Therefore, no rulemaking is needed to assure that waivers of this requirement are granted by the NRC at the ap propriate time.

APR 15 1992 400 N. Olive Street LB. 81 Dallas, Texas 75201 Acknowledged by card ..........- **--..- .......

,,.JL, L L t\* , ..:.t;iJLATORY COMM1s;:;:8r.

DOC KE flNG & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postmark Date _ 3-4-_1_7_ _ _ __

Copies Received _ _/~ - - - - -

Add'I Copies Reproduced _ 5_____

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TXX - 92152 Page 2 of 2 In addition, allowing automatic waivers from the requirements of 10CFR140.ll would have the effect of shrinking the secondary insurance pool as more plants reach their end of life. The alternative would be for Congress to increase the liability for the remaining operating plants to the point where the cost of the financial protection would be prohibitive. Those plants reaching end of life an d decommissioning early, although not the most advanced design, have had the protection of and enjoyed the collective security of the secondary protection plan. Thus, it is not necessarily fair to exempt plants from the secondary insurance pool to the determent of the remaining plants.

Sincerely, William J. Cahill, Jr.

By9/tr--Ur J. S. Marshall Generic Licensing Manager JDR/grp c - Mr. R. D. Martin, Region IV Resident Inspectors, CPSES (2)

DOCt-<ET NUMBER PETITION RULE PRM 5"' (} ~ 5 77 ~ /2 ~ o Si)

P.O. Box 14000, Juno Beac , FL 33408-0420 LO ChL l U:

US Nf C

• 92 MAR 19 P2 :58 MAR 1 3 1992 L-92-69 Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attention: Docketing and Service Branch Re: Notice of Receipt of Petition for Rulemaking from the North Carolina Public Staff Utility Commission {57 Fed. Reg. 2059. January 17. 1992)

Dear Mr. Chilk:

On January 17, 1992, the U.S. Nuclear Regulatory Commission (NRC) published for public comment a notice of receipt of petition for rulemaking from the North Carolina Public Staff Utility Commission (57 Fed. Reg. 2059). These comments are submitted on behalf of Florida Power & Light Company (FPL), a licensed operator of two nuclear power plant units in Dade County, Florida and two units in st . Lucie county, Florida.

The petitioner requests that sections 10 CFR 50.54(w) and 10 CFR 140.11 be ame nded to reduce or eliminate insurance requirements for nuclear power reactors when all nuclear reactors on a reactor station site have been shut down and all nuclear fue l has been removed except as may be stored in a licensed Independent Spent Fuel Storage I nstallation. In this particular circumstance, the petitioner requests that paragraph 10 CFR 50.54(w) be amended to eliminate the need for insurance to cover the licensee's obligation, in the event of an accident at the licensee's nuclear reactor, to stabilize and decontaminate the reactor and the reactor station site. The petitioner also requests that 10 CFR 140.11 be amended to eliminate the need for a licensee to maintain financial protection, as that term is defined in NRC regulations.

FPL supports an undertaking by the Commission to study revising the limits of insurance coverage required of reactor licensees when a reactor has been permanently shut down, defueled, and awaiting decommissioning. However, the Commission should defer issuance of a proposed rule for comment until the completion of such a study, Ak APR 15 1992

• an FPL Group company C nowledged by eard ......."""""""'"'""m~

. NUCLEAR REGULATORY COMMISSIOt-.

DOCKETING & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics tmark Date _3-+-:-J - ~- - - - -

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and the formulation of a comprehensive and adequate basis for the type of action requested by the petitioner. The following points are pertinent to FPL's position:

(1) There may be additiona l , generically-applicable circumstances where relief from the present requirements is appropriate. Such circumstances should also be reflected in any rule changes.

( 2) The nature of the protection addressed in 10 CFR 50. 54 (w) differs from that covered by 10 CFR 140.11. The former concerns a licensee's obligations for on-site property damage in the event of an accident at the licensee's reactor. The latter is pertinent to a licensee's ability to respond, in damages, for public liability.

consequently, in certain circumstances it may be appropriate to continue requiring insurance coverage of one type, while eliminating the requirement for the other.

(3) There is no urgent need for revised regulations.

Licensees currently have the option of seeking appropriate exemptions from the Commission's requirements when special circumstances are presented.

(4) Modification of the regulations requires more detailed analysis of the risks associated with particular scenarios than the petitioner has presented in support of the suggested changes.

In conclusion, FPL supports and would encourage the undertaking by the Commission of a study to investigate the possible revision of insurance coverage required of a licensee when a reactor has been permanently shut down, defueled, and is awaiting decommissioning.

This effort should include an opportunity for public input.

Publication of a specific rule for comment, however, should await completion of such a study.

Very truly yours, W.H. Bohlke Vice President Nuclear Engineering and Licensing WHB/J AD/vmg

,)OGKl:f NUMl::3t:H ~

1 PETITION RULE PAM :::> (J - 7

• * ,.J!lfltl_.A bi a_TT_a U.S. Council for Energy Awareness

=, ([;7 Fl< 1051)

Swte400 1776 I Street.NW Washington, DC 20006-2495 (202) 293-0770 Marvin S. Fertel ViceP* 1t, Technical Programs FAX (202) 785-4019 OF~ !C::. OF SLCiU. IAt,-,, (202) 785-4113 DOCK[!ING tx S[t*'VICT 8RANCH March 17, 1992 Mr. Samuel J . Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attention: Docketing and Service Branch

Reference:

Petition for Rulemaking North Carolina Public Staff Utility Commission 57 Fed. Reg. 2059 (January 17, 1992)

Request for Comments

Dear Mr. Chilk:

These comments are submitted by the U.S. Council for Energy Awareness (USCEA) on behalf of its Nuclear Insurance and Indemnity Committee. They are in response to the U .S. Nuclear Regulatory Commission's (NRC) request for comments on the North Carolina Public Staff Utility Commission's Petition for Rulemak.ing (57 Federal Register 2059) concerning insurance requirements for shutdown reactors.

The USCEA Nuclear Insurance and Indemnity Committee is comprised of utilities, architect -

engineering firms, insurers, law finns, nuclear steam supply system vendors, and consultants.

The Committee monitors and provides its perspectives on the developments, changes, and impacts of federal regulations, insurance industry practices, and public acceptance in the area of liability and workers compensation as it applies to radiation.

While USCEA supports the use of well-defined rulemakings to improve efficiency and stability in the regulatory process, the situation covered by the proposed petition does not currently warrant such action by the NRC. Therefore, USCEA recommends that the petition be denied.

The basis for this recommendation is that current NRC regulations appropriately provide for relief from unnecessary insurance requirements for a shutdown reactor. Case-by-case exemptions to both liability insurance requirements and property damage insurance requirements are currently permitted under NRC rules in 10 CFR 140.8 and 10 CFR 50.1 2(a), respectively.

APR 15 1992 Acknowledged by card .............,...........,.11.qe

ll.S NU(,LEAR REGULATORY COMMISSIOt\

DOCKETiNG & SERVICE SECTION OFFICE OF THE SECRETARY Of THE COMM!SSK>N Document Statistics Postmark Date -';./ _ ...,.O_____

Copies Received__,_ _ _ _ __

Add'! Copies Reproduced - ----.,,..-

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Mr. Samuel J. Chilk March 17, 1992 Page Two A number of plants such as Indian Point 1, Rancho Seco, and Fort St. Vrain have taken advantage of these rules and have received the necessary and appropriate exemptions. We believe experience with these plants and possibly the few others that over the next ten years will be placed in SAFSTOR and/or issued a possession only license provides the NRC with an opportunity to better define the issues that need to be addressed in such a rulemaking. The NRC should consider generic rulemaking on insurance requirements for plants being decommissioned after it gains experience with these facilities.

In conclusion. we helieve the oetition should be denied. However. the NRC should consider the benefits of a generic rulemakfug in the future after more experience with shutdown plants and exemptions to property and liability insurance has been gained.

We appreciate the opportunity to comment on the proposed petition for rulemaking. If there are any questions regarding these comments please contact Felix Killar, or me.

Sincerely, Marvin S. Fertel

Georgia Power Company UU\IKET NUMBER r_-(/ ~

40 Inverness Center Parkway Post Office Box 1295 PETITION RULE PRM :::> , , ; v 7q 1 Birmingham, Alabama 35201 Telephone 205 877-7122

( 57 Fl{_ :io 5 1/

C. K. McCoy Georgia Power

.\

Vice President, Nuclear Vogtle Project rhe sourhern eiecrnc sysrem March 17, 1992 Docket Nos. 50-321 50-424 HL-2120 50-366 50-425 ELV-03575 Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission (j)

Washington, DC 20555 ATTENTION: Docketing and Service Branch Comments on "North Carolina Public Staff Utility Commission; Filing of Petition for Rulemaking" (57 Federal Register 2059 of January 17, 1992)

Dear Mr. Chilk:

Georgia Power Company has reviewed the proposed rule, 10 CFR Parts 50 and 140, "North Carolina Public Staff Util ity Commission; Filing of Petition for Rulemaking" published in the Federal Register on January 17, 1992. In accordance with the request for comments, Georgia Power Company is in total agreement with the NUMARC comments which are to be provided to the NRC.

Should you have any questions, please advise.

Respectfully submitted, CKM/JDK APR 15 1992 -

Acknowledged by card ..,.._"""""'"""'":;:

U.S. NUCLEAR REGULATORY COMMJSS10t-.

DOCKETING & SERVICE SECTION OFFICE Of THE SECRETARV Of rHE COMMISS()N Document Statistics Postmarl( Date _{_,.ft_"l-_ _( __,3,......

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Mr. Samuel J. Chilk U.S. Nuclear Regulatory Commission Page 2 cc: Georgia Power Company Mr. J. T. Beckham, Jr., Vice President, Plant Hatch Mr. W. B. Shipman, General Manager - Plant Vogtle Mr. H. L. Sumner, Jr., General Manager - Plant Hatch NORMS U. S, Nuclear Regulatory Commission, Washington, DC Mr. K. N. Jabbour, Licensing Project Manager - Hatch Mr. D.S. Hood, Licensing Project Manager - Vogtle

u. s. Nuclear Regulatory Commission, Region II Mr. S. D. Ebneter, Regional Administrator Mr. L. D. Wert, Senior Resident Inspector - Hatch Mr. B. R. Bonser, Senior Resident Inspector - Vogtle

Southern Nuclear Operating Company Post Office Box 1295 DOCKET NUMBER PETITION RULE PRM 5 (r ~ 51c 't ')

Birmingham, Alabama 35201 Telephone 205 868-5086 (___6'>7~R~"~

Southern Nuclear Operating Company

,\

J. D. Woodard Vice President the southern electric system Farley Project March 17, 1992 Docket Nos. 50-348 50-364 Hr. Samuel J. Chilk Secretary of the Convnission U.S. Nuclear Regulatory Convnission Washington, DC 20555 ATTENTION: Docketing and Service Branch Comments on "North Carol ina Public Staff Utility Commission; Filing of Petition for Rul emaki ng "

(57 Federal Register 2059 of Januarv 17, 1992)

Dear Mr. Chilk:

Southern Nuclear Operating Company has reviewed the proposed rule, 10 CFR Parts 50 and 140, "North Carolina Public Staff Utili ty Commi ssion; Filing of Petition for Rulemaking" published in the Federal Reg ister on January 17, 1992. In accordance with the request for comments, Southern Nuclear Operating Company is in total agreement with the NUMARC comments which are to be provided to the NRC.

Should you have any questions, please advise.

J. D. W JDW/JDK cc: Mr. S. D. Ebneter Mr. S. T. Hoffman Mr. G. F. Maxwell APR 15 1992 ......

Acknowledged by card ......--""""""""

U.S. NUCLEAR REGULATORY COMMISSIO~

DOCKETING l SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postmark Date ( ft- K ~ /* ~

Copies Reoeived.__ l --c------

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• PETITION RULE PRM t;°O - G 7

( ~ 7 Ft?;i o~_j)

LEBOEUF, L AMB, LE IBY & MACRAE A PARTNERSHIP INCLUDI NG PROFESSIONAL CORPORATIONS EASTERN U.S. : 18 75 CONN ECTI CU T A VE NU E, N .W . WESTERN U . S. :

NEW YORK, NY WAS HI NG T O N, D C 2 0 0 0 9 -5 728 LOS ANGELES. CA WASHINGTON. DC SALT LAKE CITY. UT (202) 986-8000 ALBANY, NY SAN FRANC I SCO, CA TELEX: 440274 FACSIMILE : (202) 986

• 8102 BOSTON . MA EUROPEAN COMMUNITY : BRUSSELS, BELGIUM AN D LONDON. ENGLAND SOUTHERN U.S .:

HARRISBURG, PA

.JACKS ONVILLE. FL HA RT F O R D .CT USSR : MOSCOW RALEIGH. NC NEWARK,N.J DIRECT DIAL March 17, 1992 The Honorable Samuel J. Chilk Secretary U.S. Nuclear Regulatory Commission Washington, D.C. 20555

~*

MAR \ 7 199

~=

Attention: Docketing and Service Branch Re: Petition for Rulemaking, Docket No. PRM-50-57 (2)

Dear Mr. Chilk:

On January 17, 1992, the Nuclear Regulatory Commission published for comment a petition for rulemaking filed by the Public Staff of the North Carolina Utility Commission on October 4, 1991. 57 Fed. Reg. 2,059 (1992). Omaha Public Power District

("the District"), the licensee for the Fort Calhoun Station nuclear power reactor, hereby files its comments in response to the Commission's notice.

The petition for rulemaking asks the Commission to amend its regulations to eliminate the requirements for property damage and public liability insurance where all nuclear reactors have been shut down and all nuclear fuel has been removed from the site, except for fuel that may be stored in an Independent Spent Fuel Storage Installation. The District supports the petition for rulemaking and urges the Commission to adopt the amendments suggested by petitioner and set forth in the Commission's notice.

As proposed by petitioner, elimination of the requirements for property damage and public liability insurance would not apply to a site where all reactors are shut down, but nuclear fuel remains on s i te in reactor spent fuel storage. The District submits that the proposed amendments should be expanded to eliminate, or at least greatly reduce, the insurance requirements for all reactors that have been permanently shut down, whether or not spent fuel has been removed from the site.

APR 15 1 ~

Acknowledged by card n"'""-fftffllmnnnn

U.3, f*, UCLEAH HEGULATORY COMMl~StON DOCKETING & SERVICE SECTION OFFICE OF THE SECRETARY

~ THE COMMISSION Document Stalisiics P

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The Honorable Samuel J. Chilk March 17, 1992 Page 2 The Commission has already had substantial experience in dealing with reduced insurance coverage requirements for defueled reactors. For example, partial exemptions from 10 C.F.R. S 50.54(w) have been granted in a number of instances.

~ , 56 Fed. Reg. 2,962 (1991) (Fort st. Vrain); 56 Fed. Reg.

2,566 (1991) (Rancho Seco); 55 Fed. Reg. 18,993 (1990)

(Shoreham). With regard to the requirements for public liability insurance, the District understands that Indian Point 1 has been granted a waiver of participation in the secondary financial protection program under the Price-Anderson Act.

These exemptions or waivers have been granted even through spent fuel remains on the site in a spent fuel pool and even though, in the case of Indian Point, other reactors continue to operate on-site. Thus, the Commission has recognized that the risk to be evaluated is the risk (or lack thereof) posed by the defueled, shut-down reactor, not the risk associated with other licensed facilities on the same site. The District submits that the Commission's experience in processing waivers or exemptions on a case-by-case basis supports both the amendments requested by petitioner and the expansion thereof requested by the District.

Until recently, early decommissioning of commercial nuclear reactors has been in response to events beyond the control of individual licensees. Now, however, older reactors are being voluntarily shut down early for economic reasons, as is the case with San Onofre Unit 1 and Yankee Rowe. Amending the regulations to give notice, in advance, of any insurance requirements that will be eliminated or reduced will assist licensees in evaluating the option of early decommissioning for economic reasons. Continued insistence upon a case-by-case approach is unnecessary and simply complicates the planning process. Amending the regulations also would eliminate the need for repeated individual requests for exemptions, thereby reducing the administrative burden for both licensees and the Commission.

Accordingly, the District recommends that the Commission either (1) adopt the amendments proposed by petitioner and institute a rulemaking to obtain comment upon additional amendments as discussed above, or (2) initiate a rulemaking to make effective both the amendments requested by petitioner and the additional amendments discussed above.

The Honorable Samuel J. Chilk March 17, 1992 Page 3 The District appreciates the opportunity to comment upon the petition for rulemaking.

Respectfully submitted, LeBOEUF, LAMB, LEIBY & MacRAE Attorneys for Omaha Public Power District cc: Mr. Michael T. Lesar Chief, Rules Review Section Mail stop P-223

DOCKET NUMBER

- - - - - ETITION RULE PAM 5 o- S ?

( 5 7,- R). o s__!)

DOCKETED USNRC NUCLEAR MANAGEMENT AND RESOURCES COUNCIL 1776 Eye Street. NW.

• Suite 300

• Washington. DC 20006-2~ MAR 17 p 4 :27 (202) 872-1280 Thomas E. Tipton Vice President & Director OFF1C:: OF SE CHE fAiiv JOCKETING ,\ SEfsVlf.L Operations. Management and BRANCH Support SeNices Division March 17, 1992 Mr. Samuel J. Chilk Secretary U.S. Nuclear Regulatory Commission G)

Washington, DC 20555 ATTENTION: Docketing and Service Branch RE: Notice of Receipt of Petition for Rulemaking North Carolina Public Staff Utility Commission; Filing of Petition for Rulemaking, 57 Fed. Reg. 2059 (January 17, 1992),

Request for Comments

Dear Mr. Chilk:

These comments are submitted by the Nuclear Management and Resources Council, Inc. (NUMARC) 1 in response to the request of the U.S. Nuclear Regulatory Commission (NRC) for comments (57 Federal Register 2059) on the North Carolina Public Staff Utility Commission's Petition for Rulemaking regarding insurance requirements for shutdown reactors.

In the situation where a commercial nuclear facility has been issued a possession only license (POL}, the provisions of existing regulations permit the NRC to grant licensee requests for exemptions to reduce property and liability insurance coverage within regulations. Reduction of insurance coverage should be at the owner's discretion on a case-by-case basis. As described in Attachment A the existing regulations already provide opportunity for a licensee to request and for the NRC to grant appropriate insurance relief based on case-by-case conditions. Therefore, a proposed rule as requested by the petition is not required. We believe that a generic rulemaking may be appropriate, but only after sufficient research has been conducted to determine the proper scope of such a rulemaking (e.g., what level, if any, of property insurance should be required for a facility in the decommissioning process; whether a licensee undertaking decommissioning should 1

NUMARC is the organization of the nuclear power industry that is responsible for coordinating the combined efforts of all utilities licensed by the NRC to construct or operate nuclear power plants and of other nuclear industry organizations in all matters involving generic regulatory policy issues and on the regulatory aspects of generic operational and technical issues affecting the nuclear power industry. Every utility responsible for constructing or operating a commercial nuclear power plant in the United States is a member of NUMARC. In addition, NUMARC's members include major architect-engineering firms and all of the major nuclear steam supply system vendors.

APR 15 1992 Acknowledged by card ............"..............-

U.S. NUCLEAR REGULATORY COMMISSIOf','

DOCKETING & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics fl I>_ _ _ __

Postmark Date - '-----<,___

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Mr. Samuel J. Chilk March 17, 1992 Page 2 be li able for the retrospective assessments in the secondary layer of financial protection).

We reco11111end that the petition be denied but that a study be undertaken by the NRC to determine whether a generi c rul emaking would be appropriate and, if so, the proper scope of that regulatory action. However, if the NRC decides to proceed with the petitioned r ulemaking, we reco11111end that the proposed rule, when published for public comment, be expanded to allow reduction or termination of insurance requirements when the spent fuel is in any NRC approved fuel storage configurations, not solely a licensed Independent Spent Fuel Storage Installation . The wording of the proposed rule should reflect t his by allowing the same insurance relief whether fuel is "stored in a licensed Independent Spent Fuel Storage Installation, or other approved storage configuration for which criticality is not a credible event."

We further recommend the property insurance and secondary financial protection requirements be evaluated on a per un it basis rather than only being appl icable when all units at a site have been permanently shutdown.

We appreciate the opportunity to comment on the proposed petition for rulemaking regarding insurance requirements for shutdown reactors. If there are any questions regarding the comments provided in this letter, please contact Alan Nelson or me. We are avail able to meet with the NRC and discuss the issue further if desired.

TET\APN:mls

Attachment A Existing Insurance Regulations The following discussion describes the current regulatory requirements for the insurance under discussion, the process by which a licensee may request NRC approval of a case-by-case reduction in liability (Price-Anderson) and property damage (10 CFR § 50.54(w)) insurance, and potential areas which the NRC should study to determine whether a generic rulemaking would be appropriate.

Price-Anderson Liability Insurance Regulatory Requirements 10 CFR Part 140 establishes the financial protection, indemnification, and liability coverage requirements for licensees authorized to operate a nuclear reactor. These regulations require primary financial liability protection of $200 million and participation in the industry retrospective rating plan to provide additional public liability coverage. The secondary liability coverage requires each licensee to be liable for paying up to $63 million per accident in annual installments of up to $10 million per reactor.

The 10 CFR Part 140 primary and secondary liability insurance coverage limits are predicated on accidents that can occur at an operating nuclear power plant and specifically to cover public liability claims for extraordinary nuclear occurrences. Therefore, nuclear power plants no longer authorized to operate can justify obtaining relief from these regulations, based on the much smaller projected public liability associated with potential accidents credible for a reactor in a permanently shutdown condition.

Basis for Regulatory Relief Part 10 CFR § 140.8 allows licensees to obtain specific exemptions from 10 CFR Part 140 requirements that are allowed by law and are otherwise in the public interest. Once a licensee receives a POL, compliance with the full provisions of 10 CFR Part 140 would constitute an undue financial hardship and is not necessary to meet the underlying purpose of the rule. In the past, licensees in this condition have been able to demonstrate why they are entitled to a reduction in the 10 CFR Part 140 financial protection requirements, and the NRC has granted exemption from 10 CFR Part 140. Even though it can reasonably be expected that the NRC would continue to do so in the future, it may be appropriate, and cons istent with the goals of regulatory stability and the economical use of resources, to establish the criteria and appropriate results by rulemaking rather than address each application for exemption individually.

Property Damage Insurance Regulatory Requirements 10 CFR § 50.54(w) (l ) requires each nuclear plant licensee to maintain

$1 .06 billion in property damage insurance. This insurance coverage provides

an assured source of funds for stabilizing and decontaminating a nuclear power reactor following an accident. The $1.06 billion coverage is based on the estimated damage resulting from a severe accident.

Basjs for Regulatory Relief The basis for the full $1 .06 billion property damage insurance limit does not apply to a permanently shutdown nuclear power plant because it is physically impossible for the severe accident to occur which served as the basis for requiring $1.06 bil l i on of property damage insurance. A licensee may, pursuant to the provisions of 10 CFR § 50.12(a), obtain a partial exemption from 10 CFR 50.54(w) (l) based on a worst case shutdown condition radiological accident and associated site specific property damage estimate evaluation. Obtaining approval of significantly lower property damage insurance coverage will substantially, and appropriately, reduce the insurance premium costs associated with 10 CFR 50.54(w)(l) property damage insurance .

G0\.lr.ET NUMt3tH PETITION RULE PRM 5 (J ... 5 ?c- c; \

57F1<~0~

WINSTON & S T ~

FREDERICK H. WINSlON (1853-1886) 1400 L STREET, NW. CHICAGO OFFICE SILAS H. STRAWN (1891-1946) WASHINGTON , D.C. 20005-350 2

• 92 tll\R 17 P4 :05 3 5 WEST WACKER DRIVE CHICAGO, ILLINOIS 60601 (312) 558-5600 (202) 371-5700 NEW YORK OFFICE FACSIMILE (202) 371-5950 175 WATER STREET WAITER ' S DIRECT DIAL NUMBER NEW YORK. NY 10038-4981 (212) 269-2500 March 17, 1992 Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attention: Docketing and Service Branch Subj: Notice of Receipt of Petition for Rulemaking Insurance Requirements for Shutdown Reactors (PRM-50-57) 57 Fed. Reg. 2,059 (Jan. 17. 1992)

Dear Mr. Chilk:

In accordance with the above-referenced Notice of Petition for Rulemaking, we hereby submit the following comments on behalf of the members of the Utility Decommissioning Group (Group) and thr1j other utilities, all of which are NRC power reactor licensees.-

The Petition requests the initiation of rulemaking that would reduce, or eliminate, property and liability insurance (both primary and secondary, or excess, coverages) requirements for facilities shut down for the purpose of decommissioning.

For the reasons set forth herein, we oppose the Petition. In short, current regulatory mechanisms (i.e., the exemption process) already permit licensees to seek relief from either of the above insurance requirements on a case-by-case basis. Further, the blanket elimination of insurance requirements for shutdown facilities could create difficulties for those utilities in justifying insurance for certain, albeit generally significantly 1/ The members of the Utility Decommissioning Group are: Duke Power Company, Entergy Operations, Inc. (formerly Arkansas Power & Light, Louisiana Power & Light, and System Energy Resources, Inc.), Florida Power & Light Co., Northeast Utilities, Pacific Gas & Electric, TU Electric, and Virginia Power. In addition, these comments are submitted on behal f of Publ i c Service Electric & Gas Co. , South Carolina Electric & Gas Co., and Washington Public Power Supply System .

APR 15 1992_

Acknowledged by card ..............,_............."

NUCLEAR REGULATORY COMMISSIO~

DOCKETING & SERVICE SECTION OFFICE OF THE SECRE1 ARY OF THE COMMISSION Documert Stat:stics mark Date __.__ ,__,__{)_ _ _ _ __

es Received_/_ _ _ _ _ __

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\VINSTON & STRAWN Mr. Samuel J. Chilk March 17, 1992 Page 2 reduced, risks that may nonetheless remain during shutdown. In our view, the expenditure of resources t o develop generic regulatory standards for the stated purposes is not justified given the availability of existing procedures to achieve appropriate reductions in insurance requirements on a case-by - case basis.

Comments on Petition for Rulemaking

1. Summa:r:y of Petition for Rulemaking The Petition for Rulemaking s uggests changes to 10 C.F.R. §

50. 54 (w) and to 10 C. F .R. § 140 .11 that (1) would waive the requirement to maintain $1. 06 billion in insurance for on- site property insurance, and (2) would waive the requirement to maintain

$200 million in primary liability insurance protection (and a potential $63 million retrospective premium assessment in the event of an extraordinary nuclear occurrence (ENO)). Under the proposal ,

these requirements would be waived if "all nuclear reactors on a station site have been shut down and all nuclear fuel has been removed from the reactor station site except as may be stored in a licensed Independent Spent Fuel Storage Installation (ISFSI) ."

As the basis for the proposal, the Petition asserts that there are no health a nd safety reasons that would require maintenance of the on-site property damage insurance at a reactor that has been shut down wit h no nuclear fuel on-site. Further, the petition asserts that in the case of public liability insurance, it would be unreasonable for the owner of a permanently shutdown reactor to continue to be liable for retrospective premium charges in the event of an accident at an operating reactor elsewhere when the occurrence of a n accident is not considered possible at the reactor that has been shut down.

The Petition also asserts that the proposal is of immediate importance in that the insurance required during SAFSTOR decommissioning will result in signifi cant collections from utility ratepayers during current operating years. In this regard, the Petition asserts that the cost of t hi s insurance may discourage or preclude the SAFSTOR decommissioning option, and, accordingly, utilities wi l l not be ab l e to take advantage of (1) reduced occupational exposure during decommis sioning and (2) reduced low-level radioactive waste storage requirements. The proposal assumes that, dur i ng SAFSTOR, the spent nuclear fuel will be stored in an ISFSI.

WINSTON & STRAWN Mr. Samuel J. Chilk March 17, 1992 Page 3

2. The Commission Has Recognized That Maximum "Property Insurance" Coverage for Nucl ear Accidents May Be Unnecessary Where a Reactor Has Been Shut Down The Commission's requirements for "property insurance" coverage (more properly, post-accident decontamination liability insurance - - hereinafter on-site insurance) are set out in 10 C.F.R. § 50.54(w), which requires that electric utility licensees take reasonable steps to obtain insurance, with a minimum coverag e limit for each reactor site of $1.06 billion or whatever amount of insurance is generally available f rom private sources, whichever is less. 10 C.F.R. § 50.54(w) (1). This insurance coverage is intended to be used to stabilize and decontaminate the reactor and reactor station site in the event of a nuclear accident. 10 C.F.R.

§ 50. 54 (w) .

The Commission already has found in individual cases that where a /icensee has shut down and defueled a large light water reacto~ the possibility for an accident that would warrant full insurance coverage as required in 10 C.F.R. § 50.54(w) is substantially reduc 3

ep. In these cases, the ~C has authorized partial exemptions- from Section 50.54(w) .! Nevertheless, 11 The $1.06 billion amount was established to cover accidents at large light water reactors operating at full power. See NUREG/CR-2601, "Technology, Safety, and Costs of Decommissioning Reference Li ght Water Reactors Following Postulated Accidents," Main Report (Oct. 1982) and Addendum 1 (Dec. 1990).

The NRC may issue exemptions f rom its regulations in 10 C.F.R. Part 50 that are authorized by l aw, will not present an undue risk to the public hea l th and safety, are consistent with the common defense and security, and where special circumstances are present. 10 C.F.R. § 50.12(a).

!/ See, ~ , 56 Fed. Reg. 2, 96 2 (Jan. 25, 1991) (partial exemption from 10 C.F.R. § 50.54(w) for Fort St. Vrain -- shut down and partially defueled); 56 Fed. Reg. 2,566 (Jan. 23, 1991) (partial exemption from 10 C.F.R. § 50.54(w) for Rancho Seco -- shut down and defueled); 55 Fed. Reg. 18,993 (May 7, 1990) (partial exemption from 10 C.F.R. § 50.54(w) for Shoreham -- shut down and defueled); 54 Fed. Reg. 35,738 (Aug.

29, 1989) (partial exemption from 10 C.F.R. § 50.54 (w) for Humboldt Bay -- shut down and defueled); 53 Fed. Reg. 21,955 (June 10, 1988) (partial exempt ion from 10 C.F.R. § 50.54(w) for Shoreham holder of operating license authorizing (continued ... )

\VINSTON & STRAWN Mr. Samuel J. Chilk March 17, 1992 Page 4 inherent in these partial exemptions is a recognition that there is some residual risk that warrants maintenance of a reduced level of on-site insurance, based on plant-specific considerations, i.e.,

maximum credible accidents for the particular reactor site under circumstances of permanent shutdown. Further, since nuclear on-site insurance covers nonradiological risks, it may be the only source of fire insurance for a shutdown plant. Thus, contrary to the assertions by the Petitioner, t he re are risks, albeit reduced, following shutdown for which licensees may reasonably conclude that some appropriate level of on- site nuclear insurance should be maintained.

In contrast, the Petition seeks development of a regulatory standard that would generically e liminate any on-site insurance coverage requirements fallowing shutdown. This approach could have the undesired effect of permitting state regulators to block inclusion of expenditures for reasonable and prudent insurance coverages within the reasonable and customary costs of service.

In our view, the Commission need not grant the Petition to reduce post shutdown insurance requi rements; it should continue permitt i ng reduction of the on-site insurance coverage limits on a case- by-case basis, where justified. A licensee will then be able to employ site-specific considerations to arrive at a level of on-site insurance coverage fo ll owing shutdown deemed most appropriate, and pursue proper NRC approval.

3. Current Regulations Allow for Consideration of Reducing Liability Insurance for Shutdown Reactors The Price-Anderson Act, as amended, 42 U.S.C. § 2210, and the NRC's implementing regulations, 10 C.F.R. § 140.ll(a) (4), require each licensee having a nuclear plant that is "designed for producing substantial amounts of electricity," 42 u.s.c. § 2210 (b) (1) (C), to maintain primary financial protection in the amount equal to the sum of $200 mil lion and the amount available as secondary financial protection (i.e., retrospective premiums not to exceed $63 million per nuclear incident (including an ENO), and not to exceed $10 million per year). The current amount available through insurance for compensation in the event of a catastrophic ENO is approximately $7.1 billion. This scheme assures that the

!/( ... continued) operat ions at not more than five percent power); 53 Fed. Reg.

19,631 (May 27, 1988) (partial exemption from 10 C.F.R. § 50.54(w) for Seabrook -- then holder of low-power license

- until receipt of full-power operating license).

WINSTON & STRAWN Mr. Samuel J. Chilk March 17, 1992 Page 5 maximum amount of insurance will be available in the event of an accident covered under the statute without regard to fault.

As in the case of on-site insurance requirements, the current regulatory scheme already allows for consideration of reducing or eliminating primary and secondary i nsurance coverage in thft case of a shutdown reactor (i.e., through the exemption process).- For example, the NRC has permitted withdrawal from the secondary insurance program for Indian Point Unit 1. In that case the licensee still possesses a provisional operating license for the plant, has spent fuel on-site, and inti7ds to undertake actual decommissioning in the next century.- This situation is noteworthy, and highlights the benefit of case-by-case review, in that such relief would not be available under the conditions contemplated by the Petition b ecause there are still reactors operating at the station site (Indian Point Units 2 and 3).

Further, those licensees will likely wish to retain some level of liability coverage even after shutdown, e.g., for latent injury claims beyond the ten-year period following policy cancellation that would otherwise apply. The Petition does not contemplate this consideration.

Therefore, in our view, it is unnecessary for the NRC to initiate rulemaking to enable licensees to pursue reduction of Price-Anderson coverage at shutdown reactor facilities. The expenditure of resources to develop generic guidance in this area at this time simply would not b e justified.

In sum, the better regulatory scheme is for licensees to continue to pursue reduction of such coverage on a case-by-case basis, using the existing exemption p rocess if necessary, so as to take into account considerations u ni que to each facility.

The NRC may provide exemptions from the regulations in Part 140 that are authorized by law and are in the public interest.

10 C.F.R. § 140.8.

See Amendment No. 23 to Indemnity Agreement B-19 for Indian Point Unit 1, dated Dec. 19, 1989 (providing that "no participation in the secondary financial protection program shall be required with respect to a reactor which has been permanently shut down, and where the licensee's authority to operate the unit as a power reactor has been revoked by the Commission."). Authority to operate the facility was revoked by NRC order dated June 19, 1980.

\VINSTON & STRAWN Mr. Samuel J. Chilk March 17, 1992 Page 6

4. There Is No Urgent Need fo r Ru l emaking In Any Event The Petition asserts that the need for rulemaking in this area is of immediate importance, in that the cost of maintaining on-site and liability insurance over the period of SAFSTOR, will discourage licensees from using the SAFSTOR decommissioning option.

We disagree with the Petitioner's rationale for urgency.

In the first instance, it is not the Commission 1 si901icy to encourage one form of decommissioning over another. - The Petitioner, however, seeks specific rulemaking on the premise that SAFSTOR should be encouraged. The Commission should not permit such arguments to enter the decisionmaking process.

Further, with respect to the concern regarding costs, the Commission's mandate is premised o n the protection of the public health and safety, 42 U.S .C. § 2012(e), and not on the ratemaking process. 10 C.F.R. § 50.75(a); 53 Fed. Reg. at 24,030. Thus, reliance on t he Petitioner's rate concerns would be inappropriate to support the initiation of rulemaking.

Finally, as noted, the Commission already has acknowledged its willingness to consider relief from its insurance requirements, through the issuance of exemptions. Accordingly, the relief sought is not essential to reducing insurance requirements following shutdown. Indeed, there is no apparent immediate need to revise the regulatory structure to provide licensees a means of relief which they already have available.!1 In denying the Petition, 1./ See 53 Fed. Reg. 24,018, 24,020, 24,021 (June 27, 1988);

NUREG-1221, "Summary, Analysis, and Response to Public Comments on Proposed Amendments to 10 CFR Parts 30, 40, 50, 51, 70, and 72," June 1988, §§ B.3.3, B.4.1, at B-9-10. In the promulgation of the NRC's f inal decommissioning rule, the Commission indicated that t he intent of the rule was to provide general guidelines wi th regard to the use of all three decommissioning alternatives (DECON, SAFSTOR, ENTOMB) in a manner which protects the public health and safety. Therein it is noted that the selection of a particular decommissioning alternative is to be evaluated on a case-by-case basis, and the Commission does not prefer any particular alternative over another alternative.

Most nuclear plants will not reach the end of their license terms for several years, and many are likely to pursue license renewal for an additional 20-year term. Thus, the concern (continued ... )

\VINSTON & STRAWN Mr. Samuel J. Chilk March 17, 1992 Page 7 therefore, the Commission should note that licensees may continue to avail themselves of this option, when appropriate.

Conclusion and Recommendation For the reasons set forth above, we urge the Commission not to undertake rulemaking. The resources that would be dedicated to the completion of such an effort woul d not be justified given the present existence of a mechanism to obtain the relief sought.

Indeed, we oppose any rulemaking that could serve to transfer

• oversight of utilities' nuclear on-site or nuclear liability insurance decisions to state economic regulatory agencies who are not in a position to evaluate the risks for which coverage is needed.

We would urge the Commission, upon denial of the Petition, to reiterate the availability of the exemption process and encourage licensees to utilize that mechanism when appropriate for reducing insurance obligations. Such a statement of intent would serve t o reconfirm the viability of the current regulatory scheme.

We appreciate the opportunity to comment on this Petition for Rulemaking .

• OS i

h B. Knott ,

liam A. Horin Mitchel l s. Ross 11 ( ... continued) sought to be addressed by the Petition, except as it involves the unsubstantiated assertion of significant current financial impacts, is not likely to arise for many years.

701 Pennsylvania Avenue, NW. 00CKET NUMBER Washington D.C. 20004-2696 PETITION RULE PRM .f; O- £ 7 a )

Telephone 202-508-5527 C t:7 Fl?. :i. 0 51/

LuCK.Lil i.i USNHC EDISON ELECTRIC INSTITUTE "92 MAR 17 P4 :14 DAVID K. OWENS

([)

Senior Vice President Finance, Regulation, and March 17, 1992 Power Supply Policy The Honorable Samuel J. Chilk Secretary U.S. Nuclear Regulatory Commission

• Washington, D.C. 20555 Attention: Docketing and Service Branch Re: Petition for Proposed Rulemaking - Docket Number PRM-50-57

Dear Mr. Secretary:

The Edison Electric Institute (EEi) is submitting these comments in response to the North Carolina Public Staff Utility Commission's proposed amendments to 10 CFR Parts 50.54 and 140.11 concerning the waiver of the insurance requirements for shut reactors which have had all fuel removed from the reactor station site. EEi is the association of electric utility companies. Its members serve ninety-eight percent of all customers served by the investor-owned segment of the industry.

• They generate approximately seventy-eight percent of all the electricity in the country and provide service to seventy-five percent of all ultimate customers in the nation. In addition, EEi's member companies own either fully or partially eighty-five percent of the nuclear power reactors in the U.S.

EEi disagrees with the position of the petitioner and feels that such amendments are unnecessary and would be inappropriate. The major reason that we believe this to be unnecessary is that the NRC has, in prior instances where the licensee has shut down and defueled a reactor, granted exemptions from both the Price-Anderson Act and nuclear property insurance coverage. A current example of an exemption from Price-Anderson would be the case of Indian Point Unit Number One. Current examples of partial exemptions with respect to nuclear property insurance coverage are the Fort St. Vrain, Rancho Seco, and Shoreham units. The NRC has the tacit authority to review the site specific data applicable to any such licensee's petition and can make final judgement as to what is prudent and appropriate with respect to maintaining on-site insurance coverage. Further, the examples of exemptions mentioned above indicate that the NRC has already recognized that the minimum funding property insurance limit of $1.06 billion may APR 15 1992 .,

Acknowledged by cam .."ww,musmhlliihhiiill"'

U.S. NUCLEAR REGULATORY COMMISSIOt-,,

DOCKETING & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMiSSION Document StaF*t;c.,

Postmark Date ~ - _D ______

Copies Received I _______

Add'I Cop:es Reproduced ~ 3~ ~ - - -

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The Honorable Samuel Chilk March 17, 1992 Page Two not be necessary when a reactor has been shut down. However, in order to protect the public, the NRC must be allowed to continue to do this on a site specific basis.

We believe that it would be inappropriate to allow licensees to automatically withdraw from the Price Anderson Act. The petitioner's request ignores the fact that a shut plant has an existing nuclear liability exposure and a continuing liability arising from past operations which could warrant continuation of an appropriate level of coverage under the Price-Anderson Act. The need for nuclear liability insurance continues well after shut down and fuel removal. If this protection is

• terminated when fuel is removed from the reactor, coverage will continue only for ten years from the policy cancellation date and there are potential latent injury claims which could manifest themselves well beyond that time period.

The petitioner also suggests that the utility which has defueled its reactor(s)be allowed to withdraw from the nuclear liability insurance programs, including both the $200 million primary and the secondary protection layers of Price-Anderson, during a period of SAFSTOR. However, it should be noted that even though a nuclear unit is in SAFSTOR, there may be a continuing need for some amount of insurance coverage which should be assessed by the licensee. The licensee should have site specific studies performed prior to decommissioning a unit to determine a level of insurance coverage which is both necessary and prudent and then pursue the necessary NRC approval for maintaining that limit of coverage.

Conclusion There are existing procedures that allow the NRC to give case-by-case site specific exemptions to insurance requirements for shut reactors which have removed fuel from the site. It is in the best interests of the public and the industry that these procedures be applied based on actual judgements made by the NRC and not on a blanket waiver basis. Therefore, EEi recommends that the Commission deny the petition and make the petitioner aware of the existing exemption process and further encourage all licensees to utilize that mechanism to reduce their insurance requirements where deemed appropriate.

Sincerely,

()~(/J~

David K. Owens DKO:lki

UV\.,l\C I NUM01:t1 PETITION RULE PAM 5 o- 5 7 (5?r"f?;,. csr)

OOCKEiEO USNRC NUCLEAR REGULATORY COMMISSION

[Docket No. PRM-50-57]

North Carolina Public Staff Utility Commission; Filing of Petition for Rulemaking AGENCY: Nuclear Reg~latory Commission.

ACTION: Notice of receipt of petition for rulemaking.

SUMMARY

The Commission is publishing for public comment a notice of receipt of a petition for rulernaking. The petition, dated September 25, 1991, was f iled with the Commission by the North Carolina Public Staff Utility Commission and was assigned Docket No. PRM-50-57 on October 2, 1991. The petitioner requests that the Commission substantially reduce or eliminate insurance requirements for nuclear power reactors when all the nuclear reactors on a reactor station site have been shut down and are awaiting decommissioning and all the nuclear fuel has been remove~ from the reactor site.

3/11/'i .2..

DATE: Submit comments by (60 days after publication in the Federal Register).

Comments received after this date will be considered if it i s practical to do so, but assurance of consideration cannot be given except as to comments received on or before this date.

1

ADDRESS: Submit comments to: Secretary, U.S. Nuclear Regulatory Co1m1ission, Washington, DC 20555. Attention: Docketing and Service Branch, For a copy of the petition, write: Rules Review Section, Regulatory Publications Branch, Division of Freedom of Information and Publication Services, Office of Administration, U.S. Nuclear Regulatory Commission, Washington, DC 20555.

FOR FURTHER INFORMATION CONTACT: Michael T. Lesar, Chief, Rules Review Section, Regulatory Publications Branch, Division of Freedom of Information and Publications Services, Office of Administration, U.S. Nuclear Regulatory Cor.lfllission, Washington, DC 20555, Telephone: 301-492-7758 or Toll Free:

800-368-5642 .

SUPPLEMENTARY INFORMATION:

Background

The Commission's regulations require that each nuclear reactor li censee, as a condition of its license, meet certain on-site property dama~e insurance requirements for each of its nuclear reactor station sites. Utilities licensed by the NRC to operate nuclear power plants are required by the provisions of 10 CFR 50.54(w) to maintain $1.06 billion in property insu rance to cover the on-site stabilization and decontamir.etion of the reactor facility in the event of an acci dent.

Each power reactor licensee also is required by 10 CFR 140.ll(a)(4) to maintain primary financial protection in the amount of $200 million to cover 2

public liability claims that may resuit from a nuclear incident or precautionary evacuation. In addition, §140.ll(a )( 4) requ i res these licensees to have and maintain secondary financial protection (in the form of private liability insurance available under an industry retrospective rating plan providing for deferred premium charges equa l to the licen see's pro rata share of the aggregate public liability claims in excess of $200 mill i on) for each nuclear power reactor the licensee is authorized to operate up to $63 million per nuclear incident.

The pet i tioner asserts thdt the insurance requirements of (1) $1.06 billion to stabilize and decontaminate a power reactor site and (2) $200 mi llio n per site (with a~ added potential $3 million per powtr reactor per ir.cident ) to satisfy public liability claims should be substantially reduced or ~l imi r.ated in i nstances where all nuclear reactors on a reactor station site have been shut down and all the nuclear fuel has been removed from the site.

Basis for Petition On-Site Property Dama9e The petitioner bel ieves that there are no health or safety reasons t hat would require extraordinary accident insurancE protection when a reactor station is without fuel, in a shutdown or dormant condition, and the licensee holds a possession only l icense awaiting decommissioning. The petitioner be l ieves that there is no risk of an empty reactor vessel or an empty fuel pool achieving criticality. Therefore, the petitioner recommends that the Commission consi der reduc i ng substantial ly , or eliminating entirely, the requirement that a power reactor li censee maintain "~i nimum coverage l imit f or each reactor site of either 3

$1.06 billion or whatever amount of insurance is generally available from private sources, whichever is less." The petitioner further states that Commission regulations do not require accident insurance protection for other types of f aci l ities that may be contaminated to some degree where the risk of criticality is absent. The petitioner also notes that the Commission regulations do not require insurance coverage for an Independent Spent Fuel Storage Installation licensed under 10 CFR Part 72.

Public Liabili,!l: Insurance The petitioner states that there appears no reasonable risk of criticality which could produce a major nuclear incident, for which the $200 million of primary liability insurance protection is intended, at a shutdown or dormant reactor when no nuclear fuel remains on the reactor site. The petitioner offErs that, in the absence of in-reactor or in-pool fuel, it appears to be unreasonable for the owner of a permanently shutdown reactor, during many years of reactor dormancy, to ccntinue to be liable for retrospective premium charges for a pro-rata share of the $7.6 billion of secondary liability financial protection in the event of a nuclear accident at some 2£er!!i~g reactor el$ewhere in the industry when the occurrence of a nuclear accident is net considered possible at the dormant, unfueled reactor.

Conclusion Because the Department of Erergy does not have a facility that is ready to receive high-level radioactive waste such as commercially generated spnt fuel, the petitioner states that amendment of the NRC regulations to revise both en-site property dar.iage insurance and public liability insurance requirements 4

is of immediate importance. The petitioner asserts that the insurance now required by the rrnc auring an extended period of SAFSTOR dormancy wi ll result in significant collections from ut i l i ty ratepayers during the reactor's current operating years. The petitioner believes that the cost of this insurance may discourage or preclude altogether the election of the SAFSTOR decommissioning option. The petitoner sta t es that the SAFSTOR option could reduce worker exposure to radioactiv i ty during decommissioning considerably and also reduce low level radioactive waste storage requirements substa ntial ly.

Proposed Amendments t c 10 CFR Parts 50 and 140 The following language has been suggested by the petitioner to accomplish the desired amendments. The NRC has corrected the petitioner's suggested langu age by removing the term "Intermediate" and replacing it with the term "Independent ." This correction is necessary to reflect the correct desig nation of the cited f aci lity .

The petitioner proposes that in§ 50.54 a new paragraph (w)(5) be added to read as follows:

§50.54 Conditions of licenses.

(w) * * *

(5) When all nuclear reactors on a reactor station site have been shut down arid all nuclear fuel has been removed from the reactor ~tati on site 5

except as may be stored in a licensed Independent Spent Fuel Storage Installati on, the requirement of paragraph (w) that each reactor site must have insurance or equivalent protection to stabilize and decontaminate the reactor and the site in the event an accident is waived.

The petitioner proposes that in§ 140.11, a new paragraph (c) be added to read as follows:

§ 140.11 Amounts of financial protection for certain reactors.

(c) In any case when all licensed electric power producing nuclear reactors at the same location have been s hu t down and all nuclear fuel has been removed from the location except for fuel as may be stored in a licensed Independent Spent Fuel Storage Installation, the requirement the licensees have and maintain financial protection in the amount set forth in paragraph (a)(4) of this section is waived.

1992.

For the Nu clea r Re£ula tory Corrmission.

(a_ <::-,_______

Samue J.-Ch l"f;______

Secretary of he Commission.

6

DOCKET NUMBER PETITION RULE PRM 5b -S?q J Ct 1 F ,1o5y RfCLI /£0 NORTH CAROLINA Pusuc STAFF SEP 3 0 1. g UTILITIES CoMMISSION omce ot the secreta September 25, 1991 Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 ATTENTION: Chief of Docketing and Service Branch

SUBJECT:

Petition for Rulemaking under 10 CFR 2.802 Herewith is respectfully submitted a petition for a generic rulemaking to substantially reduce or preferably eliminate the $1.06 billion of reactor on-site stabilization and accident decontamination insurance required by 10 CFR 50.54(w) in instances where all nuclear reactors on a reactor station site have been shut down and all nuclear fuel has been removed from the site.

It is not apparent to the petitioner that, when a reactor station is without fuel and in a shutdown or dormant condition, for instance with a possession-only license awaiting decommissioning, that any health or safety reason would require extraordinary accident insurance protection. Since in the absence of fuel there is no reasonable risk of an empty reactor vessel or an empty fuel pool achieving criticality, the petitioner recommends that the Commission consider reducing substantially or eliminating entirely the "minimum coverage limit for each reactor site of either $1.06 billion or whatever amount of insurance is generally available from private sources, whichever is less."

In further support of this petition, it should be pointed out that regulations do not require accident insurance protection for other types of facilities that may be to some degree contaminated where the risk of criticality is absent. Nor do regulations require such insurance coverage for a licensed Intermediate Spent Fuel Storage Installation.

By a concurrent or separate rulemaking, the undersigned likewise petitions that the requirement for public off-site liability insurance to cover an extraordinary nuclear incident under 10 CFR 140.ll(a)(4) be substantially reduced or preferably eliminated for shutdown or dormant reactors when no nuclear fuel remains on the reactor site.

Roben P. Gruber, Executive Director P.O. Box 29520

• Raleigh, Nonh Carolina 27626-0520

• 919/7 33-2435 An Equal Opponunity/ Affirmative Action Employer

u.S. UCLE. R 1E.GULATORY COMMISSION DOCKETING & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postmalt Date-~ '----_.,__.__/_ _

Copies Received __________

Add'I Copies Reproduced _ 3 _ _ __

S iel Dlstribut1on_'..;_+>

i> ..:...-.4'-~~~-

Secretary of the Commission Page 2 September 25, 1991 There appears to be no reasonable r i sk of criticality which could produce a major nuclear incident for which the $200 million of primary liabil ity insurance protection is intended. Also, in the absence of in-reactor or in-pool fuel, it seems unreasonable for the owner of a permanently shut down reactor to continue during many years of reactor dormancy to be liable for retrospective premium charges for a pro-rata share of the $7.6 billion of secondary liability finan cial protection in the event of a nuclear accident at some operating reactor elsewhere in the industry when the occurrence of a like accident is not considered possible at the dormant, unfuel ed reactor.

While at the moment there is no Department of Energy facility ready to receive commercially generated spent fuel, revisi on of both of these insurance requirements is of immediate importance. The insurance now required by 10 CFR 50.54(w) and 10 CFR 140.ll(a)(4) during an extended period of SAFSTOR dormancy will result in significant collections from utility ratepayers during th e reactor's current operating years. The cost of this insurance may very well discourage or preclude altogether the election of the SAFSTOR decommissioning option, an option which could otherwise reduce considerably worker exposure to radioactivity during decommissioning and could also reduce substantially low level radioactive waste storage requirements.

An example of how the regulations may be amended to achieve the petitioned improvements is attached as Exhibit A.

Your prompt and favorable consideration of these two revisions in reactor insurance regulations would be appreciated.

Yours very truly,

~/!tJMA~

Robert P. Gruber Executive Director RPG:cj Attachment

Exhibit A 10 CFR 50.54, Conditions of licenses, is amended by adding a new subparagraph (w)(5) to read as follows:

(5) When all nuclear reactors on a reactor station site have been shut down and all nuclear fue l has been removed from the reactor station site except as may be stored in a l icensed Intermediate Spent Fuel Storage Installation, the requirement of this subparagraph (w) that each reactor site must have insurance or equivalent protect ion to stabi l ize and decontaminate the reactor and the site in the event of an accident is waived.

10 CFR 140. 11, Amounts of financial protection for certain reactors, is ame nded by adding a new subparagraph (c) to read as follows:

(c) In any case when all licensed electric power producing nuclear reactors at the same location have been shut down and all nuclear fuel has been removed from the location except for fuel as may be stored in a licensed Intermediate Spent Fuel Storage Installation, the requirement that the licensee have and maintain financial protection in the amount set forth in subsection 140.ll(a)(4) is waived.

Note: The suggested language above is just one way to modify the rules to implement t he recommendation cited in the Petition and is not intended to foreclose consideration of other alternat i ve wordings.