ML23152A133

PR-050, 140 - 62FR58690 - Financial Protection Requirements for Permanently Shutdown Nuclear Power Reactors

ML23152A133
Person / Time
Issue date:	10/30/1997
From:	Hoyle J NRC/SECY
To:
References
62FR58690, PR-050, PR-140
Download: ML23152A133 (1)

Text

ADAMS Template: SECY-067 DOCUMENT DATE: 10/30/1997 TITLE: PR-050, 140 - 62FR58690 - FINANCIAL PROTECTION REQUIREMENTS FOR PERMANENTLY SHUTDOWN NUCLEAR POWER REACTORS CASE

REFERENCE:

PR-050, 140 62FR58690 KEYWORD: RULEMAKING COMMENTS Document Sensitivity: Non-sensitive - SUNSI Review Complete

DOCKET NO. PR-050, 140

{62FR58690)

In t he Matter of FINANCIAL PROTECTION REQUIREMENTS FOR PERMANENTLY SHUTDOWN NUCLEAR POWER REACTORS DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT 10/27/97 10/23/97 FEDERAL REGISTER NOTICE - PROPOSED RULE 11/03/97 10/31/97 COMMENT OF THE PENNSYLVANIA TRANSPORTATION INSTITUTE

{MICHAEL D. CASPER) { 1) 01/12/98 01/09/98 COMMENT OF NUCLEAR ENERGY INSTITUTE

{LYNNETTE HENDRICKS) { 2) 01/15/98 01/13/98 COMMENT OF CARL STEPHENSON { 3) 01/20/98 01/13/98 COMMENT OF ENTERGY OPERATIONS, INC.

{JERROLD G. DEWEASE, VP - OPS) { 4) 01/20/98 01/16/98 COMMENT OF UTILITY DECOMMISSIONING GROUP

{JOSEPH B. KNOTTS, JR., ESQ.; ET AL.) { 5) 1/20/98 01/13/98 COMMENT OF COMMONWEALTH EDISON COMPANY

{KENNETH A. AINGER) { 6) 01/29/98 01/27/98 COMMENT OF NAT. ASSOC. OF REGULATORY UTILITY COMMISSIONERS

{CHARLES D. GRAY, ESQ.) { 7) 04/20/98 04/17/98 COMMENT OF NUCLEAR ENERGY INSTITUTE

{LYNNETTE HENDRICKS) ( 8)

NEI DOCKETED US . RC NUCLEAR ENE RGY I N S TI TUTE Lynnette Hendricks

'98 APR 20 P1 :NUCLEARn ri ~PPORT GENERATION DIVISION OFF ..

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Mr. John C. Hoyle 0CKETNll.f Secretary ..,ROPOSED RULE So.; /L/0 U.S. Nuclear Regulatory Commission ( IP :2F~ ss1pe,o)

Washington, D.C. 20555-0001 ATTENTION: Rulemakings and Adjudications Staff

REFERENCE:

Request for Comments on Proposed Rule, "Financial Protection Requirements for Permanently Shutdown Nuclear Power Reactors," 62 Fed. Reg. 58690 (October 30, 1997)

Dear Mr. Hoyle:

The Nuclear Energy Institute (NEl), 1 submits the following comments on the proposed rule, "Financial Protection Requirements for Permanently Shutdown Nuclear Power Reactors,"

published in the Federal Register on October 30, 1997. These comments supplement the comments that NEI submitted on January 9, 1998.

As stated in our earlier comments, industry fully supports reduced property and liability insurance coverage levels for permanently shutdown plants. We also agree that the reduced coverage levels should be based on clearly defined operating status configurations so that reduced coverage can be implemented in a straightforward manner. However, in our view, NRC created too many configurations, has overstated the risk posed by sites in all configurations, and has based coverage levels on new requirements that should have been subjected to a backfit analysis.

Requirement for Backfit Analysis As a matter oflaw, the proposed revisions to Section 50.54(w) would constitute a backfit, and therefore a backfitting analysis is required prior to their adoption. Paragraph (a)(l) of ii

- Section 50.109 states that, "[b]ackfitting is defined as the modification of or addition to systems, structures, components ... or the procedures ... required to design, construct or 1 NEI is the organization responsible for establishing unified nuclear industry policy on matters affecting the nuclear energy industry, including the regulatory aspects of generic operational and technical issues. NEI's members include all utilities licensed to operate commercial nuclear power plants in the United States, nuclear plant designers, major architect/engineering firms , fuel fabrication facilities, materials licensees, and other organizations and individuals involved in the nuclear energy industry.

I 776 I STREET. NW SUITE 400 WASHINGTON DC 20006-3708 PHONE 202 739 8000 FAX 202 785 4019

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Mr. John C. Hoyle April 17, 1998 Page 2 operate a facility; any of which may result from a new or amended provisions in the Commission rules ... "

NRC has proposed new requirements for spent fuel storage pools, to address a postulated zircoloy fire scenario, notwithstanding the fact that the NRC concluded in an earlier analysis in NUREG 13532 that there is neither a substantial increase in the overall protection of the public health and safety, nor are the direct and indirect costs of implementation justified (see 10CFR 50.109).

NRC opined in the statement of considerations for the proposed rule that the backfit rule did not apply because 10 CFR 50.109 applies only to design, construction and operation of a facility. No rationale or justification was provided to support this opinion. Further, there is no historical record in the promulgation of Section 50.109 to support the statement that the application of the backfit rule was meant to be narrowly applied only to the literal operation of the reactor. While certain operational activities no longer apply to the permanently shutdown configuration, a multitude of operational activities such as maintenance, spent fuel management, and radiation protection define the permanently shutdown phase.

The NRC's own actions belie its contention that the backfit rule does not apply to decommissioning reactors. In fact, the Commission chose to apply backfit provisions to spent fuel management requirements in 10 CFR Part 72. This demonstrates that backfit provisions in 10 CFR 50.109 have been applied by the agency to circumstances well beyond "reactor operations" and related activities. The agency's current position is not supported by the backfit rule's original documentation. Equally important, the considerations upon which the backfit rule was based are as relevant to a decommissioning plant as an operating plant. In neither case should the agency be permitted to impose new obligations on licensees or change an existing agency interpretation with similar effect, without first considering whether the action will provide a substantial increase in the public health and safety and be cost-effective in its implementation.

We are aware that NRC's Office of General Counsel has the issue of application ofbackfit requirements to decommissioning issues under consideration. Publication of this rule without re-examining the need for performing a backfit analysis issue would be inappropriate.

Cost Benefit of Proposed Configurations Costs associated with coverage levels for onsite and offsite liability are not commensurate with risk, and hence represent large and unnecessary financial burdens for utilities proceeding through the decommissioning process. NRC's, in our view, inflated view of risk posed by these sites in turn leads to overstated views of the government's risk of indemnity for offsite liability.

Financial Protection Requirements Apply to Site Not Reactor 2 Regulatory Analysis for the Resolution of Generic Issue 82, Beyond Design Basis Accidents in Spent Fuel Pool.

Mr. John C. Hoyle April 17, 1998 Page3 We believe the NRC was in error in stating that the financial protection requirements would apply on a per reactor basis. With the exception of the secondary coverage for offsite damages (participation in the industry retrospective rating plan), coverage has always been provided on a site basis, not a reactor basis, with adjustment in premiums based on the number of operating reactors on the site.

Release of Permanently Shutdown Plants from Secondary Financial Protection Permanently shutdown plants should not be required to maintain secondary financial protection by participating in the industry retrospective rating plan in any configuration.

Industry objects to the proposed rule stipulation that plants would not be released from participation until fuel decay heat is such that the fuel cannot reach temperatures in excess of 565 degrees C, the self ignition temperature for zircoloy cladding ifno cooling is provided.

This scenario is beyond-design-basis. As stated below, this scenario is not plausible and hence is not a reasonable basis for releasing plants from participation in the secondary financial protection plan.

In addition, we object to NRC's conditioning release from the secondary financial protection plan on whether other operating plants are on the site. This is a burdensome and unnecessary requirement since other operating plants would still be participating in the plan, and the plan is intended to address the cumulative risk of all operating plants.

Two Shutdown Configurations for Reduced Coverage Levels An accurate reflection of risk posed by shutdown plants leads to a much simpler system for reduced coverage levels. We believe only two configurations need be considered when realistic risk insights are used as the basis for establishing shutdown configurations. The first operating status configuration is for plants that still have spent fuel in pools. The second risk informed configuration is for plants that have removed fuel offsite or have placed fuel in an onsite ISFISI.

Under Configuration 1, Spent Fuel in Pool, we propose that onsite coverage be reduced to

$25M and offsite coverage be reduced to $5-l0M.

For Configuration 2, "Fuel Offsite or in Onsite ISFISI," we recommend onsite coverage be reduced to $25M while the site still contains significant sources of radioactive material (more than 1000 gallons of contaminated liquids). Onsite coverage should be reduced to zero when there are no sources exceeding 1000 gallons of liquid. Offsite coverage should be reduced to $5-l0M for plants in shutdown Configuration 2.

Onsite Coverage for Configuration 1, Fuel In Pool Industry is proposing reduction in coverage that realistically reflects the risk, i.e., the probability and consequences of postulated events. Industry does not believe that any plausible event for permanently shutdown plants could have significant offsite consequences. Therefore, our proposed value of $25M for onsite recovery efforts is an extremely conservative value. In addition, this coverage is in the range where utilities would have the option to self insure and avoid costly premiums for specialty nuclear insurance.

Mr. John C. Hoyle April 17, 1998 Page4 Industry disagrees with NRC's assertion that a shutdown plant with "fresh spent fuel" in the pool poses risk comparable to an operating reactor. NRC's "same risk as an operating reactor" assumption is based on a premise that the zircoloy fire resulting from draining the pool disperses an amount of radioactive material that is comparable to the amount released from severe accidents at operating plants. We do not dispute the serious consequences of the postulated accident, however, we believe that the NRC ignored the probability factor in the risk equation for the accident scenario for the zircoloy fire.

Namely, the regulatory analysis assumes that a beyond design basis earthquake completely drains the pool, and apparently, assumes that no action is taken to replace the coolant in the interim period during which the fuel heats up to the point where the zircoloy cladding catches fire, namely 565 degrees Celsius. Use ofbeyond-design-basis initiating events coupled with an assumption that licensees would take no recovery actions to replace cooling water is not in keeping with the agency's broader goals of using risk insights to establish better regulations.

The appropriate limiting event for the "Spent Fuel in the Pool" configuration is a fuel handling event. We agree with the NRC's conclusion that a fuel handling event is unlikely to have any offsite consequences. It also would not result in any significant release of radioactive materials that would require a significant expenditure of funds for remediation.

NRC's configurations included a scenario for release of 1000 gallons of slightly contaminated liquid. While such an event may be plausible during decommissioning activities, we do not agree with NRC's conclusion that cleanups costs for the liquid spill would be $50M. There has never been a spill in the operating history of commercial plants that resulted in remediation costs that approached this magnitude. NRC's regulatory analysis arrived at this cost by using overly simplistic assumptions, namely that large quantities of soil would be contaminated, and that all such soil would be sent offsite to burial at a Barnwell type facility that is capable of accepting type Band C high activity wastes, at a cost of $300 per cubic foot. A very small area immediately around the spill path might be contaminated to such a level it would require burial in a Barnwell type facility. A small portion of the large remaining volumes could be sent to a lower cost Envirocare type facility for disposal. Most would be stored on site and reconsidered at the point of license termination under the 25 mrem site release standard. Using these more realistic assumptions, our proposed value of $25M is more appropriate and still very conservative.

Under the proposed rule, the NRC would still require $50 million of property and $100 million of liability insurance for each reactor on site if a fuel handling incident could occur.

As stated above, this requirement is not based on use of reasonable risk insights. In addition, it would require coverage in primary liability insurance beyond what is commercially available for multi unit sites. For example, if the site has three shutdown reactors it would require $150 million of property insurance and $300 million of primary liability insurance. While the $150 million of property insurance is commercially available the $300 million in primary liability insurance is not. Only $200 million of primary liability is per site is commercially available.

Mr. John C. Hoyle April 17, 1998 Page5 We believe this is further testament to our earlier assertion that the reduced requirements for permanently shutdown plants apply on a per site basis, and hence, would only come into effect when all reactors on a site are shutdown. Shutdown of one reactor on a multi reactor site where other reactors continue to operate would reduce the premium for site coverage.

The exception to the site basis coverage is the requirement for plants to participate in the pool for secondary coverage for offsite damages. We believe a permanently shutdown facility should be able to immediately withdraw from this fund.

Offsite Coverage for Configuration 1. "Fuel in Pool."

As stated above, industry does not agree that fuel in the pool poses a risk that is comparable to the risk posed by plants during operations. NRC arrives at that conclusion by assuming beyond-design-basis events and further assuming that the licensees fails to take any recovery actions, e.g., use of a fire hose or trucking in water if necessary, to replace water in the pool. Absent this implausible scenario, NRC concedes there are no events that pose offsite consequences once a plant is permanently shut down.

NEI is proposing offsite coverage levels of $5-l0M for the "Spent Fuel in Pool" configuration. The basis for recommending this level of coverage is twofold. One, incidents with any offsite effects are implausible, and, two, the historical absence of claims based on an assertion of damages after an incident where there are no off site consequences. With the exception ofTMI, the industry has not expended significant resources to defend trivial damage claims from members of the public after an incident where there are no offsite consequences. The $5-lOM value we are proposing should be more than adequate to cover legal fees and other costs in the unlikely event that claims are brought forward.

NRC's regulatory analysis lists public perception as a justification for not reducing offsite liability coverage to the levels NEI is proposing. Industry finds this justification

• particularly troubling. NRC's responsibility is to protect public health and safety. The public looks to the NRC to accurately evaluate and communicate the risk. NRC does the public a disservice if it permits itself to be driven by perception issues.

NRC states in its regulatory analysis that the cost associated with increasing coverage levels to the limits it is proposing, above the $5-lOM that the industry is recommending, equates to $48M in cost to the industry. NRC also states that it has not quantified the risk oflitigation which drives the NRC to require the higher limits of coverage. We believe historical data proves that NRC's risk of indemnifying reactor licensees is negligible. In addition, surely an additional cost of $48M to the industry should warrant action on the part of the NRC to carefully quantify the risk of litigation prior to imposing such a large cost burden on the industry.

Onsite and Offsite Coverage for Configuration 2. Fuel Offsite or in Onsite ISFISI The only plausible event of any significance for this configuration is NRC's postulated spill of 1000 gallons of slightly contaminated liquid. As stated above, this event would have no offsite consequences and industry believes a $25M limit is an extremely conservative value for remediation of such an event. Consequently, we are recommending the onsite coverage limits proposed by NRC for its Configuration 4, namely, $25M until the site has less than

Mr. John C. Hoyle April 17, 1998 Page6 1000 gallons of liquid material onsite, at which time the onsite coverage should be reduced to zero.

There are no plausible events that pose offsite consequences. We are recommending the same offsite coverage levels be applied in either Configuration 1 or 2. As we stated above, the $5-l0M value is a very conservative value to cover legal fees and other costs in the unlikely event that a claim is brought forward in the absence of any offsite effects.

Grandfathering of Exemptions The proposed rule provides no indication of how the "new" requirements will affect operating plants that have already been granted financial protection exemptions. By virtue of having been granted these exemptions, these plants have been evaluated and have been found to have adequate coverage at their respective reduced levels. As stated in the Regulatory Analysis for Rulemaking, the primary objective of this proposed rule is to eliminate unnecessary regulatory burdens for permanently shutdown facilities by allowing reduced onsite and offsite liability coverage without having to go through the exemption process. Therefore, the proposed rule needs to be modified to clearly state facilities that have been granted financial protection exemptions, either while operating or shutdown, will have the option to maintain those exemptions or use coverage levels promulgated in the final rule.

We appreciate this opportunity to comment and would be pleased to discuss these comments and to respond to any questions the NRC may have.

Sincerely, Lynnette Hendricks LH/tnb

Mr. John C. Hoyle April 17, 1998 Page 7 be: NEI Risk Managers NEI Decommissioning Issues Task Force NEI Administrative Points of Contact Marvin S. Fertel

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DOCl(l!ID NUCLEAR REGULATORY COMMISSION 1 JAN 2 9 1998 Washington, D.C.

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The National Association of Regulatory Utility Commissioners (NARUC) hereby submits its comments in response to the Proposed Rulemaking (Notice) issued by the

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Nuclear Regulatory Commission (NRC or the Commission) in the above-captioned proceeding on October 30, 1997. 62 Fed.Reg. 58690-58694 (October 30, 1997).

NATURE OF THE PROCEEDING By the Notice, the Commission has announced its intention to allow nuclear reactor licensees to reduce onsite and offsite liability coverage during permanent shutdown of the reactors if they meet specified reactor configurations. This proposed amendment would reduce the level of insurance coverage commensurate with the risk reduction after the appropriate spent fuel cooling period following permanent shutdown of the reactor.

INTEREST OF THE NARUC The NARUC is a quasi-governmental nonprofit organization founded in 1889.

Within its membership are the governmental bodies of the fifty States engaged in the economic and safety regulation of carriers and utilities. The mission of the NARUC is to serve the public interest by seeking to improve the quality and effectiveness of public regulation in America. More specifically, the NARUC contains the State officials charged with the duty of regulating the retail rates and services of electric utilities operating within their jurisdictions. These officials have the obligation under State law to assure the establishment and maintenance of utility services as may be required by the public convenience and necessity, and to ensure that such services are provided at rates and conditions which are just, reasonable, and nondiscriminatory for all consumers.

COMMENTS The NARUC appreciates this opportunity to respond to the issues raised by the Commission in its Notice. The NARUC fully supports the Commission's proposal to allow nuclear reactor licensees to reduce onsite and offsite liability coverage during permanent shutdown of the reactors if they meet specified reactor configurations. We agree that it is appropriate and reasonable for licensees to be able to reduce the level of Acknowfedged by card ..... !!...;),J?,9l 2l;t

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U.S. NUCLEAR REGULATORY COMMISSION RULEMAKINGS & ADJUDICATIONS STAFF OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postmark Date , / ;)1 '6 Coples Receiv8d _ ' __,_ __

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insurance coverage commensurate with the risk reduction after the appropriate spent fuel cooling period following permanent shutdown of the reactor. We commend the Commission for considering this proposed rule to reduce and/or eliminate costs that are unnecessary and have no measurable relationship to enhancing public health and safety.

More broadly, the NARUC appreciates the ongoing opportunities we have had to work with the NRC Commissioners and staff to address issues of common concern in this era of rapid change. We pledge our continued efforts to work with the Commission, the nuclear industry and all affected parties to ensure that changes in the structure and operation of the electric utility industry do not compromise the safe operation of nuclear facilities, nor jeopardize their safe shutdown and decommissioning. We look forward to a continuing dialogue with the NRC on these and related issues.

u ful y Submitted, Chfil ~ ;.tJ ~7 General Counsel es Bra o Assistant Genera o National Association of Regulatory Utility Commissioners 1100 Pennsylvania A venue, N. W.

Suite 603 P.O. Box 684 Washington, D.C. 20044-0684 (202) 898-2200 January 27, 1998 2

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NRC Proposed Rule, 10 CFR Parts 50 and 140 "Financial Protection Requirements for Permanently Shutdown Nuclear Power Reactors" (62 Fed . Reg . 58690-October 30 , 1997)

Dear Mr. Hoyle:

Com Ed appreciates the opportunity to comment concerning the subject NRC rulemaking .

ComEd endorses the intent to reduce the property and liability insurance coverage levels for permanently shutdown power reactors. For permanently shutdown reactors, there will be fewer risks and lower consequences compared to operating reactors. Therefore, a commensurate reduction in insurance coverage levels is appropriate.

ComEd supports the comments submitted by the Nuclear Energy Institute. In addition , ComEd provides the following specifi c comment:

Elimination of the Secondary Level of Liability Protection On the basis of the supplementary information provided in the Federal Register notice and previous exemptions approved by the NRC 1 , one intent of this subject rulemaking was to eliminate the requirement of secondary liability protection for permanently shutdown reactors.

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However, the proposed change to Part 140 does not eliminate specifically this requirement. As worded, the proposed change will reduce the combined total amount of secondary liability protection for all power reactors with rated capacity at or above 100,000 kWe. This is accomplished by classifying permanently shutdown reactors as having zero-rated capacity electric, thus reducing the required total amount of secondary liability protection which is determined by

$75.5 million times the number of power reactors rated at or above 100,000 kWe.

For permanently shutdown reactors, this change does not eliminate directly the potential for deferred premiums associated with the requirement for secondary liability protection.

The following wording is suggested to clarify the intent of the changes to Part 140.

§ 140.11 (a)(5) .....

(Such reactors being classified as having zero electric power level rated capacity and the amount of secondary financial protection required as WQ).

If you would like to discuss these comments further, please contact me at 630-663-5217 or Jim Abel at 630-663-5690.

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Sincerely,.

Kenneth A.

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Decommissioning Services Licensing Manager

35 WEST WACKER DRI VE 1400 L STREET, N.W. 6 , RU E DU C IRQUE CH ICAGO, ILLI NOIS 60601-9703 WASHINGTON , D.C. 20005-3502 '98 JAN 20 A 750 08 PARIS, FRANCE 9:27 -

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FROM: Joseph B. Knotts, Jr.

William A. Horin J1/t1 Robert K. Temple f.¥ DATE: January 16, 1998 RE: Final Comments of the Proposed Rule on Financial Protection for Permanently Shutdown Nuclear Power Reactors, 62 FR 58690, Oct. 30, 1997 Enclosed for your records are the final comments of the Proposed Rule on Financial Protection for Permanently Shutdown Nuclear Power Reactors, 62 FR 58690, Oct. 30, 1997. These comments were filed electronically on January 16, 1998, and subsequently filed by paper on January 16, 1998.

The comments filed are changed, relative to those comments distributed in draft, only with respect to the agreement with NEI's comments filed on January 16, 1998, in particular with respect to the "Grandfathering of Exemptions."

Please give us a call if you have any further questions.

Enclosure Acknowledged by cam ...~...: 3..  !~~!

U.S. UCLEAR REGULATORY COMMIS IJ AULEMAKINGS & ADJUDICATIO S TAFF OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postmark Date _ _ __ __

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WINSTON & STRAWN 35 WEST WACKER DRIVE 1400 L STREET, NW. 6, RUE DU CIRQUE CHICAGO, ILLINOIS 60601*9703 WASHINGTON, D.C. 20005*3502 75008 PARIS, FRANCE 200 PARK AVENUE (202) 371-5700 43, RUE DU R HONE NEW YORK, NY 10166*4193 1204 GENEVA, SWITZERLAND FACSIMILE (202) 371 . 5950 JOSEPH B. KNOTTS, JR .

(202) 371-5731 jknotts@winston.com (202) 371-5709 (312) 558-6346 January 16, 1998 Mr. John C. Hoyle Secretary, U.S. Nuclear Regulatory Commission Washington, D.C. 20555-0001 Attention: Rulemakings and Adjudications Staff Re: Proposed Rule on Financial Protection for Permanently Shutdown Nuclear Power Reactors, 62 FR 58690, Oct. 30, 1997.

Dear Mr. Hoyle:

On behalf ofthe Utility Decommissioning Group,1' we hereby submit these comments regarding the proposed rule on Financial Protection for Permanently Shutdown Nuclear Power Reactors. A copy of these comments were filed electronically on January 16, 1998. The Utility Decommissioning Group is responding to the Staff request for comment in the Federal Register notice announcing this proposed rule. 62 FR 58690 (Oct. 30, 1997). Overall, the Utility Decommissioning Group agrees with the Staff that this proposed rule "eliminate[s] unnecessary regulatory burdens for power reactor facilities that are permanently shutdown and in the process of decommissioning," and we congratulate Staff for this progressive rulemaking. As explained in detail below, the Utility Decommissioning Group believes that only a few issues require further clarification, and its comments are as follows:

l/ The Group is comprised of several holders of NRC power reactor operating licenses.

WINSTON & STRAWN Mr. John C. Hoyle January 16, 1998 Page2

1. Trigger Points for Reduction in Compulsory Insurance Coverage. The trigger points for reduction of compulsory insurance coverage in the proposed rule appear overly conservative. Insufficient credit is provided for the reduced threat associated with permanent cessation of operations (i.e., entry into "Reactor Configuration l 11) since the same amount of insurance coverage is required whether all fuel is permanently removed to the spent fuel storage pool or the reactor is operating at full power.

2. An Interim Decay Heat Production Level Should Be Established. An interim level of decay heat production in Reactor Configuration 1, when a reduced risk from a postulated Spent Fuel Storage Pool accident relative to a postulated release following power operation can clearly be identified, should be established to eliminate unnecessary regulatory burden. The Utility Decommissioning Group recommends that Staff acknowledge the reduced risk from a postulated Spent Fuel Storage Pool accident and work with licensees and fuel vendors to identify the appropriate point for lowering compulsory insurance coverage requirements in Reactor Configuration 1.

3. Lower Compulsory Onsite Insurance Requirements When Configuration 3 is Reached. Maintaining onsite coverage requirements for insurance coverage at the same level in Reactor Configuration 2 as in Reactor Configuration 3 fails to recognize the lower risk of substantial harm from "a rupture ofa large slightly contaminated liquid storage tank," as compared with events postulated when the facility is in Reactor Configuration 2. Once all spent fuel is moved offsite or to an onsite dry storage independent fuel storage installation, the onsite compulsory insurance level should be reduced.

4. Once Negligible Offsite Consequence From Postulated Events are Calculated, Lower the Insurance Requirement. Offsite insurance requirements should not be held at a $25 million level in Reactor Configuration 4 when there are "negligible offsite consequences" from any postulated event. Holding compulsory insurance at this level for the purpose of settling "possible litigation and avoiding indemnity involvement" in excess of any established level of risk of harm from a postulated event is unduly constrictive. Thus the proposed rule makes compulsory the purchase of insurance coverage well in excess of the identified health and safety risk, and therefore in excess of the reasonable risk for litigation or settlement. Requirements for insurance coverage should better approximate the risks of harm to the health and safety of the public and not be based on postulated worst-case litigation.

5. Make Clear the NRC Action or Approval for Reaching Reactor Configurations.

The proposed rule is silent on whether insurance reductions require NRC action, such as the granting of an exemption. Licenses are not told whether they can simply notify the NRC when trigger points are reached or whether certain action by the NRC is required. Licensees are also subject to second-guessing by inspectors if they act on their own.

WINSTON & STRAWN Mr. John C. Hoyle January 16, 1998 Page 3

6. Establish Administrative Reporting Requirements for Reaching Reactor Configurations. The proposed rule does not address whether insurance reductions must be reported to the NRC or otherwise documented. Minor additions to the proposed rule would resolve this ambiguity.

7. Grandfathering of Exemptions. The Utility Decommissioning Group agrees with the comments submitted to the NRC by the Nuclear Energy Institute in their letter dated January 16, 1998, in particular with respect to the "Grandfathering of Exemptions." Recognition of exemptions previously considered and granted by the NRC is consistent with past NRC practice in rulemaking and such recognition in this case would not contradict the intent of the NRC's actions in this proposed rulemaking.

The Utility Decommissioning Group looks forward to continued rulemaking that gives licensees credit for the reduction in risk associated with the various reactor configurations established as decommissioning progresses. With the minor changes noted above, the proposed rule on Financial Protection for Permanently Shutdown Nuclear Power Reactors is a substantial step forward for the NRC and for licensees. The Utility Decommissioning Group appreciates the efforts of Staff in bringing forth such a progressive proposed rule.

Sincerely, PbrJ_p_

Joseph B. Knotts, Jr.

William A. Horin Robert K. Temple WINSTON & STRAWN Legal Counsel To The Utility Decommissioning Group

- - * - ~ I NIS&IP / 13 / 98 13:36 F.U 2022933431

--- --*.- - - ~004 Januazy 16 1 1998 M:r. John C. H~yle Secretary U.S. Nuclear Regulatory Commi8aion Washington, D.C. 20555-0001 ATTENTION: Rulemakings and Adjudications Staff

REFERENCE:

Request for Comments on Proposed Rule, ..Financial Protection Requirements fur Permanently Shutdown Nuclear Power Reactors," 62 Fed. Reg. 58690 (October 30, 1997)

Dear Mr. Hoyle:

The N uclea.r Energy Institute (NEI), 1 is submitting the following coDllllents on the proposed rule, "Financial Protection Requirements for Permanently Shutdown Nuclear Power Reactors," which was published in the Federal Register on October 30, 1997. These comments supplement the comments that NEI submitted on January 9, 1998. It is appropriate that the Nuclear Regulatory Cornrnisi;ion (NRC) update the regulations to reflect the financial requirements fot ehutdown nuclear power reactors as a number of plants will reach the end of the operating liceJJ.88 term after the turn of the century. Shortly beiore permanent shutdown. one of the issues to be addressed is; Wliat is the financial protection requirements for a shutdown nuclear reactor(s)?"'

NEI endorses the NRC proposed rulemaking to reduce the requirements for property and liability insurance coverage once the reactor enters a permanently shutdown classification. A/4 p.tesented in the proposal, it is important for the reactor operator to know specifically what the requirements axe and what phase of shutdown the plant needs t.o be in order t-0 take advantage of the reduction. It is a justifiable cost savings associated with reduced coverage because of reduced potential for exposures from a permanently shutdown reactor. The aniount of insurance should be commensurate to the risk.

1 NEI ie the organization responsible fer establishing unified nucleaz industry policy on matters affecting the nuclear energy industry, mcludm~ the regulatory aspects of cene~ operational and technical :iaa\l.e&. NEI's members include all utilities licensed tc operate CODUZLercial nu.clear power pLanta iD the United Stat.es, nuclear plant desicners, major arcbitect/encmeering firm.a, fud fabrication. facilities. materials lic:emeea, and other organize:tiom lllld individuals involved in the nuclear ener~ induatry.

1

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• ___!§_I NI S&IP Mr. John Hoyle January 16, 1998 The following specific comments are provided:

Grandfathering of Exemptions In addition to the comment on grandfathering for shutdown reactors, the proposed rule provides no indication of how the requirements will affect operating plants that have been grantad financial protection exemptions. By virtue of having been granted these exemptione, the plants have been evaluated and found to have adequate coverage at the respective reduced levels. As etated in the Regulatory Analysis for Rulemaking, the primary objective of this proposed rule is to eliminate unnecessary regulatory burdens for permanently shutdown facilities by allowing reduced onsite and offs:ite liability coverage without havint to go through the exemption process. The proposed :rllle therefore, needs ta* be modified to clearly state that facilities which have been granted financial protection exemptions, either while operating or shutdown, will have the option to maintain those exemptions or use what is promulgated in the final .rule.

Releasa From Participation in Secondazy Financial Protection The NRC has proposed that the facility be released from participation in the Secondary Financial Protection (SFP) program when the reactor has been defueled, permanently shutdown, no reactor operations are on the site and :fuel cladding temperature is 565°C or less, (as this would assure that a postulated loss-of-fuel cooling event would not have sigoificant offsite impact). NEI supports the removal of a reactor from the SFP. However, the conditions for removal proposed by the NRC should be reduced. NEI agrees with the NRC that the reactor should be defueled and pe:,manently shutdown, but does not agree that removing the reactor from participation in the SFP should be dependent on other reactors operating on the site, or be a function of the fuel cladding temperature.

The operations of other reactors on the site have no impact 011 the need for participation by the ehutd.own reactor in the SFP. The NRC has accepted this situation already by releasing a number of reactors from the SFP while othex reactors are operational on the same site i.e. TMI-2, San Onofre 1 and Indian Point 1.

The Regulatory .t\.nalysis discussed the loss of spent fuel pool coolant, howe-ver the proposed rule refers to loss of spent fuel pool cooling. Loss of spent fuel pool coolant is beyond design basis events and is not considered a credible event. To put restrictions on the liability requiraments due to a non-credible event is not l"8asonable. In the event of a loss of spent fuel pool cooling, it would take considerable tune before a zircaloy cladding fire or gap release could occur, thexe:fo:re, it would be an incredible event as well-

0 1 / 1.5 / 98 15 : 37 F.U 2022933431 _ _NE_____I __NI S&I ~

- - - --- - - - - llJ006 Mr. John Hoy\!

January 16, 1998 Based on the above NEI recommends that the proposed rule be revised to allow that once the reactor has been defueled and permanently shutdown it can be released from participating in the SFP. Each reactor is issued an insurance certification which provides for participation in the SFP, therefore, the certification can be revised to relieve the reactor from participating in the SFP without impacting the

$200 million site primary liability limit.

Shutdown Reactor Risks The proposed rule allows for reductions in the liability and property insurance levels as the site goes tlu-ough the phase$ of decommissio::oing. Per the proposed rule the first :reduction is available when the reactor has been defuele~

permanently 15hutdown, no operating reactors are on the sit.e, and the fuel cladding has cooled to less than 565°C. In this case the reactors can discontinue participation in t.h8 SFP however, the site is required to have $50 million of property insurance and $100 mflHon of liability insurance for each reactoi: on site.

This requirement is not :reasonable. If the site has three shutdown reactors it would require $150 million of property insurance which is available, but $300 million of primary liability insurance is not comIJJ.ercially available. The next reduction occurs when the spent fuel is either shipped off site or placed in dry cask storage and there ia 1,000 gall.on or greater radioactive liquid onsite. At this stage clle site requirements are for $50 million of property and $50 million of liability insurance for each reactor. This also is not reasonable. _..\.s discussed in the Regulatory .Analysis the only accident that may significant consequences would be a fuel handling accident. The proposed regulation howe-ver requires that the fuel has been eithel' shipped off site ot placed in dry cask storage, this negates the probability of a fuel handling accident. The reduction to $25 million liability coverage and $25 million of property coverage per reactor occurs when the site inventory ofradioa.cti.ve liquids have been reduced to less than 1,000 gallons, with further reduction to no property insurance reqwrements i! the site is in the confirmatory survey phase. NE! believes that insurance requirements once a site has gone into decommissioning amounts to contingency on top of contingency. The decommissioning plan provides for spills and other upset conditions with contingency funding fbr these events, therefore, having insurance in addition to the decommissioning funding is double contingency and not a reasonable expectation.

Based on the above NE! recommends that the proposed rule be revised to allow that when a reactor is defueled and permanently shutdown, the fuel has been shipped offsite or is in onsite dry cask storage and there are no operating reactors on site the:re a.re no longer any requirements for property or liability insurance.

- - - 01 / 13 / 98  : 38 F.U 2022933431

---

NEI NIS&IP

--- ~007 Mr.Job.D.Hoy1.e January 16, 1998 We would be pleased to discuss these comments and to respond to any questions the NRC may have.

Sincerely,

• Lynnette Hendricks

Entergy Operations, Inc.

P.O. Box 31995

-===- ENTERGY DOCKETED Jackson, MS 39286-1995 Tel 601 368 5760 USNRC Fax 601 368 5768 Jerrold G. Dewease

'98 JAN 20 A9 :43 Vice President Operations Support January 13, 1998 Mr. John C. Hoyle Secretary of the Commission DOCKET UMB U.S. Nuclear Regulatory Commission Washington, D.C. 20555-0001 PROPOSED RULE p 5 0 "° I LI 0

( <P~F~ 5f!'11o ATTN: Rulemakings and Adjudications Staff

Subject:

Entergy Operations, Inc. Comments on proposed rule " Financial Protection Requirements for Permanently Shutdown Nuclear Power Reactors."

Reference:

Federal Register Volume 62, Page 58690, dated October 30, 1997 CNRO-98/00002

Dear Mr. Hoyle:

Entergy offers the following comments to the proposed rule on Financial Protection Requirements for Permanently Shutdown Nuclear Power Reactors. The proposed rule is one that is generally less burdensome, more flexible and, most likely, less costly than the current provisions.

Entergy believes that the proposed rule will be beneficial for single unit sites, but that additional consideration is needed for multi-unit sites. It appears that the proposed rule would shift the current per-site requirements to per-unit. If the coverage were structured on a per unit basis, claims activity could potentially leave limits for one unit intact but unavailable for the other units losses. The current per-site structure eliminates this problem by making the entire policy limit available to all units at the insured site Also, it is not clear that the NRC indemnification would continue to apply. Currently, any reactor that has been permanently closed enjoys the benefit of$560 million in NRC indemnity, which applies excess of the insurance kept in place by the plant. It is not clear that this would continue to be the case. If these sites are removed from the Price-Anderson Secondary Financial Protection program, they would no longer be eligible for the $8.9 billion in capacity currently available. It is strongly urged that this should continue as part of the NRC proposal.

P'ES - 3 ,9 Acknowledged by card....... .. ,,,,,,,,,,,,,,,,, ...

U.S. UCLEAR REGULATORYCO ISSIO RULEMAKINGS &ADJUDICATIO SSTAFF OFFICEOFTHESECRETARY OF THE COMMISSION Oocunent Statistics Postmark Date a iB s, ~Y\'l _* )

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Mr. John C. Hoyle January 13, 1998 CNRO-98/00002 Page 2 of2 Entergy has participated in development of the Nuclear Energy Institute's ( NEI) comments on this subject and supports the positions represented therein.

Entergy appreciates this opportunity to comment on the Commission's proposed rulemaking. Should you have any questions regarding these comments, please contact Les England at (601) 368-5766.

Very truly yours, JGD/LAE/sh Attachment cc: Mr. J. L. Blount Mr. J. G. Dewease Mr. J. N. Donohew Mr. C. M. Dugger Mr. J. Hagan Mr. D. C. Hintz Mr. C. R. Hutchinson Mr. J. R. McGaha Mr. E. W. Merschoff Mr. G. J. Mencinsky (via e-mail)

Mr. C. P. Patel Mr. W. D. Reckley Mr. N. S. Reynolds Mr. D. L. Wigginton Mr. J. W. Yelverton

DOCKETED USNRC "98 JAN 15 P4 :55 January 13, 1998 Trojan Nuclear PlanP FFIC = ;x* *1f *_.,; ,'" *. ~

RULL.1 if . .. ,,

Docket 50-344 AOJL ryc "i: . ~-- . ,J.f-F 1

License NPF-1 Secretary, U.S. Nuclear Regulatory Commission Attention: Rulemakings and Adjudications Staff Washington, DC 20555-0001 So J-140

( <t, P..F~ ,511:,qo)

Dear Sirs:

Proposed Rule Change Issues The following are current rulemaking issues that may have an impact on the Trojan Nuclear Plant operations, procedures, and insurance requirements:

RIN 3150-AF79 (FR Vol. 62, No. 210, Page 58690, dated October 30, 1997)

"Financial Protection Requirements for Permanently Shutdown Nuclear Power Reactors" Comment: The Trojan Nuclear Plant is in "Configuration 2" described in the proposed rule.

Spent nuclear fuel is currently in storage in the spent fuel pool, and this fuel has decayed sufficient to preclude any potential clad oxidation events. PGE has received a site specific exemption to the financial protection requirements of the rule ( 10 CFR 140.11 ), by letter dated November 2, 1995 and an Amendment to Indemnity Agreement No. B-78, dated January 3, 1996 as well as an exemption to 10 CFR 50.54(w) by letter dated November 17, 1993. The NRC Staff concluded that $100 million primary financial protection was all that was needed and that participation in the industry retrospective rating plan (secondary level financial protection) was no longer required. The specific spent fuel cladding temperature criteria of the proposed rule was not explicitly stated in the PGE exemption, though both PGE and the NRC Staff concluded that zirconium fuel cladding fires are no longer a concern since the fuel has cooled for more than 3 years. Even though the 565 degree C criteria, for the spent fuel in the proposed rule, is not explicitly stated in the past NRC Staff exemptions, new analyses should not be required to satisfy the any final rule.

Since the previous actions by the NRC Staff relate to the applicability of the current rules to the Trojan facility, and the rule change is forward looking, to reduce the level ofNRC Staff actions for plant specific exemptions to 10 CFR 50 and 140, the Trojan staff is of the opinion that the rule change is not intended to apply to plants similar to Trojan. It is recommended that the proposed rule be revised to clarify applicability for plants that have received NRC Staff actions (e.g., exemptions). Specifically, the final rule should have a provision that excludes from the scope of the rule any facility that has received NRC exemptions related to the application of 10 CFR 50.54(w) and 10 CFR 140.l l(a)(4). This could also be accomplished by the final rule permitting lesser limits to be granted, if warranted, on a case-by-case basis.

The criteria described in the Trojan exemption requests were limited to spent fuel pool water inventory loss or fuel handling type of events. The new rule has introduced liquid radioactive inventory incidents as an additional criteria. This represents imposition of new requirements not currently being applied to the Trojan facility. The 'backfit analysis' discussion does not reflect

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these new requirements for facilities that have exemptions to the existing rules. In the case of 10 CFR 50.54(w) 'on-site' stabilization fund requirements, the proposed rule represents a factor of 10 increase in insurance requirements for the Trojan facility. The additional premium costs would have a potential negative impact on decommissioning funds. The limiting events for on-site stabilization are related to solid waste fire events and not liquid releases. The NRC and PGE analyses of these events reflect that financial requirements for on-site cleanup costs are approximately $5 million. The proposed on-site insurance protection requirement of $50 million is not consistent with past NRC Staff actions and is not needed to ensure the protection of the public health and safety.

If there are any questions related to these comments, please contact Mr. H. R. Pate at (503) 556-7480 or Mr. C. J. Stephenson at (503) 556-7465.

- (Retrieved from interactive rulemakin g website -- ATB)

Commenter:

Carl Stephenson Portland General Electric 71760 Columbia River Highway Rainier, OR 97048

January 14. 1998 NOTE TO: Emile Juli an Chief. Docketing and Services Branch FROM: Carol Gallagher RES. ORA v~

SUBJECT:

DOCKETING OF COMMENT ON PROPOSED RULE Attached for docketing is a comment letter related to the Proposed Rule on Financial Protection Requirements for Permanently Shutdown Nuclear Power Reactors. This letter was received via t he rulemaking website on January 13.

1998. The commenter's name is Carl Stephenson. Portland General Electric.

71760 Columbia River Highway, Rainier . OR 97048 . Please send a copy of the docketed comment to George Mencinsky (mai l stop T9-F-31) for his records.

Attachment:

As stated cc w/o attachment:

G. Mencinsky

0 NUCLEAR EN ERG Y IN S TI TU T E "98 JAN 12 AlO :4a Lynnette Hendricks DIRECTOR, PLANT SUPPORT Of-F1 ~, , )~- ~- 1T NUCLEAR GENERATION RUL L ._ ' I AOJUD ,. J...,. '* ** . ...

• L*

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FF January 9, 1998 DOCKET N _

PROPOSED b t> J- I '10 Mr. John C. Hoyle (It,-;;_ Fl<. 5~fo'1o)

Secretary U.S . Nuclear Regulatory Oomll).ission Washington, DC 20555-0001 ATI'ENTION: Rulemakings &nd Adjudications Staff

SUBJECT:

NRC Proposed Rule, 10 CFR P&rts 50 and 140 "Finapcial Protection Requirements fo:r Permapently Shutdown Nuclear Power Re&ctors," (6!2~..&g.58690-0ctober30, 1997)

Regu~st for Qomme.qts

Dear Mr. Hoyle:

The Nuclear Energy Institute (NEI)* S\lbmits these comments on behalf of the nuclear energy industry. We have reviewed the proposed ru.le 10 CFR 50 and 140, "Financial Protection Requ irements for P~rmanently Shutdown Nuclear Power Reactors,"

62 Fed. Reg. 58690 - October 30, 1997.

NEI endorses the NRC proposed rll,lemaking related to reduced property and liability insurance coverage levels once the nuclear reactor enters a permanently shutdown classification. As prescribed in the proposal, it is imperative to have established categories, such a s the four different reactor operating status configurations, so that there is predictability of interpretation of the rules that result in financial equity. Each reactor operator would then know how to plan around a permanently shutdown event, and wou ld be able to realize substantial, justifiable cost savings associated with reduced coverage levels. This is justifiable because of the reduced potential for exposures from a permanently shutdown reactor. Fixed cost of insurance should be commensurate with the risks.

• NEI is t he or ganization r esponsible for establishing unified nuclear industry policy on matters affecting the nuclear energy industry, including regulatory aspects of generic operational and technical issues. NEI members include all utilities licensed to operate commercial n uclear power plants in the United States, nucl ear pl a nt designers, major architect/engineering fir ms, fuel fabrication facilities, materials licensees, and other organizations an d individuals involved in the nuclear energy indu stry.

owt&dg JAN 2 9 1998 1776 I STREET NW SUITE 400 WASHINGTON, DC 20006-3708 PHONE 202 739 8000 FAX 202 785 4019

U.S. NUCLEAR REGULATORY COMMISSIOlt AULEMAKINGS &AilJUOICA11CWS STAFF OFFICE OF THE SECRETARY OF THE COMMISSION

Mr. John C. Hoyle January 9, 1998 Page2 The following specific comments are provided:

Coverage Levels and Methods 10 CFR 50.54(w) was adopted to ensure that a property loss at a nuclear facility that was significant enough to challenge the financial integrity of its operator would not leave the federal and associated state government with the liability for a contaminated site. The $50 million in first party (property damage and decontamination) coverage proposed for Configuration 3 approaches an amount that would not be considered catastrophic for many nuclear operators. It is, in fact, well below recent hurricane losses experienced at nuclear power plants. The insurance to meet this requirement is only available from two domestic sources, and is several times more costly than conventional property coverage. Licensees should have the option to self-insure the first party (onsite) radiological decontamination beginning with decommissioning Configuration 3. Furthermore, $50 million in decontamination expense for a postulated Configuration 3 event is overly conservative. Only a handful of events, none of which involved radiological release other than TMI, have exceeded this level in the history of the domestic nuclear industry. The industry suggests a measure of objective financial evaluation incorporated into Configuration 3 requirements in order to allow financially sound operators to self-insure this exposure.

Grandfathering Exemptions The proposed rule provides no indication of how the requirements will affect permanently shutdown plants that have been granted financial protection exemptions.

By virtue of having been granted these exemptions, the permanently shutdown plants have a lready been evaluated and were found to have adequate coverage at their respective reduced coverage levels. As stated in the Regulatory Analysis for Rulemaking, the primary objective of this proposed rulemaking is to eliminate unnecessary regulatory burdens for permanently shutdown facilities by allowing reduced onsite and offsite liability coverage without having to go through the exemption process. Section 140.ll(a)(5) of the proposed rule should be modified to clearly state that permanently shutdown facilities which have been granted financial protection exemptions will be able to maintain their exempted onsite and offsite liability coverage levels after promulgation of the proposed rule by inserting "unless the licensee has previously been granted financial protection levels via the exemption process" immediately following the word "requirements."

Recognize Level of Risk The proposed rule should provide an opportunity for a licensee with permanently shutdown reactor(s) to withdraw from the secondary financial protection. Similar actions have already been approved through the exemption process for permanently shutdown reactors at multi-reactor sites as indicated in SECY-93-127 (San Onofre 1, TMI-2 and Indian Point 1). This action should be permitted because in the regulations all that is required is the cooling time of the fuel in the pool. In this case the potential hazards and consequences are greatly reduced such that the reactor does not contribute

Mr. John C. Hoyle January 9, 1998 Page 3 a level of risk to the participants in the secondary pool proportionate to that of an operating reactor and relief from financial requirements is warranted.

A licensee with a defueled reactor should not be required to carry $75.5 million retrospective coverage (PWR 17 months, BWR 7 months) following permanent shutdown because of the greatly reduced risk of the single postulated accident vis a vis the risk of accidents during operation. Such a retrospective assessment, as required by the Price-Anderson Act, should be commensurate with the likelihood of a major accident. A defueled reactor would have a significantly lower probability of such an occurrence.

Notification Reguirements The rule should clearly state that there are no requirements for notification for moving from Reactor Configuration 1 through 4. The proposed rule provides clear conditions for the insurance coverage. A licensee, using these conditions, would by determine by calculation at what time the fuel cladding will not exceed 565° C and proceed to provide the minimum coverage. In a similar manner, a licensee could, by determining that the amount of radioactive liquid inventory is less than 1000 gallons, satisfy the other requirements, and provide the minimum coverage. The NRC would have an opportunity for review of licensee' records during its routine inspection process.

We appreciate the opportunity to comment on the proposed rulemaking. If you would like to discuss our comments further, please contact me at (202) 739-8109 or Alan Nelson at (202) 739-8110 or by e-mail (apn@nei.org).

Sincerely, .

~~

- Lynnette Hendricks LH/APN/tnb

PENN STATE

--.-G The Pennsylvania Transportation Institute (814) 865-1891 Fax: (8J_4_) 8653039 _

The Pennsylvania State University Research Office Building University Park, PA 16802-4710 October 31, 1997 A,.

DOCKETED Rulemakings and Adjudications Staff -~ - ,. 1997 Office of the Secretary RULEMAKINGSAND U .S. Nuclear Regulatory Commission ADJUOIOAll STAFF

$.SJ:/i.<NRC Washington, DC 20555-0001.

Dear Sir/Madam:

I am writing to formally oppose the proposed amendment to the NRC's current regulations that would allow nuclear reactor licensees to reduce onsite and offsite liability coverage during permanent shutdown of the reactors after the "appropriate spent fuel cooling period."

It is known that spent fuel from such a reactor is highly radioactive, even after the "appropriate spent fuel cooling period." It is also known that accidents involving spent fuel can be much more serious than a reactor meltdown because of the high volume of "dirty" fuel.

This initiative is dangerous and should not be approved.

Sincerely, Michael D. Casper Information Specialist Pennsylvania Transportation Institute Acinowledged bycmd _ NOV_ 2 I_ 1817 An Equal Opportunity University

°97 OCT 27 P4 :37 NUCLEAR REGULATORY COMMISSION 10 CFR Parts 50 and 140 RIN 3150-AF79 Financial Protection Requirements for Permanently Shutdown Nuclear Power Reactors AGENCY: Nuclear Regulatory Commission.

ACTION: Proposed rule.

SUMMARY

The Nuclear Regulatory Commission (NRC) is proposing to amend its regulations to allow nuclear reactor licensees to reduce onsite and offsite liability coverage during permanent shutdown of the reactors if they meet specified reactor configurations. This proposed amendment would reduce the e level of insurance coverage commensurate with the risk reduction after the appropriate spent fuel cooling period fol lowing permanent shutdown of the reactor.

I /13/ct ~

DATES: The comment period expires (75 days after publication). Comments received after this date will be considered if it is practical to do so. but the Commission is able to assure consideration only for comments received on or before this date.

ADDRESSES: Send comments by mail or addressed to the Secretary. U.S. Nuclear Regulatory Cormnission. Washington. DC 20555-0001. Attention: Rulemakings and Adjudications Staff.

Hand-deliver comments to: 11555 Rockville Pike. Rockville. Maryland.

between 7:30 am and 4:15 pm on Federal workdays.

You may also provide corrrnents via the NRC's interactive rulemaking web site through the NRC home page (http://Ww'W.nrc.gov). This site proviaes the availability to upload corrments as files (any format). if your web browser supports that function. For information about the interactive rulemaking site. contact Ms. Carol Gallagher. (301) 415-6215: e-mail CAG@nrc.gov.

Certain documents related to this rulemaking, including comments received and the environmental assessment and finding of no significant impact. may be examined at the NRC Public Document Room. 2120 L Street NW ..

(Lower Level). Washington. DC. These same documents also may be viewed and downloaded electronically via the interactive rulemaking website established by NRC for this rulemaking.

FOR FURTHER INFORMATION CONTACT: George Mencinsky, Office of Nuclear Regulatory Research. U.S. Nuclear Regulatory Corrrrnission. Washington. DC 20555-0001. telephone: (301) 415-6206. e-mail GJM@nrc.gov.: Stephen Lewis.

Office of the General Counsel. U.S. Nuclear Regulatory Commission.

Washington. DC 20555-0001, telephone: (301) 415-1684.e-mailSHL@nrc.gov.;

Ira Dinitz. Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington. DC 20555-0001, telephone: (301) 415-1289, e-mail IPDl@nrc.gov.

SUPPLEMENTARY INFORMATION:

Background

The current regulations governing insurance coverage for nuclear power reactors are contained 1n 10 CFR 50.54(w) and 10 CFR 140.11. These regulations do not take into consideration the reduced risk associated with permanently shutdown plants. The exemption process allows reduced insurance coverage for these plants.

Consideration of whether financial protection coverage should be reduced for permanently shutdown plants must take into account the preservation of the solvency of the organization responsible for maintaining and decommissioning these facilities in the unlikely event of a nuclear incident. In addition.

consideration would be given to timely payment for valid damage claims by members of the public and minimization of the likelihood that Federal Government indemnity would be exercised for satisfaction of claims for damages.

The regulations in 10 CFR 140.11 require that the licensees of facilities designed to produce substantial amounts of electricity. a rated capacity of 100.000 kWe or more. must have and maintain a primary insurance coverage of $200 million from private sources to protect against offsite liability. In addition. licensees must maintain secondary financial protection in the form of private liability insurance available under an industry retrospective rating plan. The current maximum obligation for secondary financial protection for a licensee in this plan is $75.5 million with respect to any nuclear incident. Thus. the total financial protection for offsite liability for any incident would be the primary layer of $200 million. plus the secondary layer of $75.5 million multiplied by the number of licensed power reactors with a rated capacity of 100,000 kWe or higher.

Under 10 CFR 50.54(w). power reactor licensees must obtain insurance coverage from private sources to provide protection against onsite damage in the event of an accident. These monies would allow the licensee to stabilize and decontaminate the reactor and reactor station site in the event of an accident. The minimum amount of insurance coverage is the lesser of $1.06 billion or the maximum amount of insurance generally available from private sources.

This proposed rule is part of the NRC effort to eliminate unnecessary regulatory burdens for power reactor facilities that are permanently shutdown and in the process of decommissioning. This would complement other amendments for decommissioning. such as the final rule that was published in the Federal Register (61 FR 39278) on July 29. 1996, which clarified the procedures leading to permanent shutdown and, eventually. to the termination of an operating license for nuclear power reactors.

This proposed rule would also address a petition for rulemaking (PRM-50-57) submitted by the North Carolina Public Staff Utilities Corrunission.

The petition requested reduction or. preferably, elimination of the $1.06 billion of insurance for onsite reactor stabilization and accident decontamination that is required by 10 CFR 50.54(w) when all nuclear fuel has been removed from the site. The petitioner also requested that the offsite primary and secondary liability coverages required under 10 CFR 140.ll(a)(4) be reduced or. preferably, eliminated for shutdown reactors when no nuclear fuel is on the reactqr site.

~

The propos~d rule does not address the financial protection requirements for Independent Spent Fuel Storage Installations (ISFSis). This subject will be addressed after efforts dealing with technical and licensing issues for ISFSis are resolved in areas of safeguards requirements. emergency planning.

and potential fuel storage handling activities.

Discussion Several different configurations for permanently shutdown reactors are being established that encompass anticipated spent fuel characteristics and storage modes during the period between permanent shutdown and termination of the license. They are as follows:

Reactor Configuration 1: the reactor is defueled. permanently shutdown.

and spent fuel in the spent fuel pool is susceptible to a zircaloy cladding fire if the spent fuel pool is drained accidentally. This configuration encompasses the period from iIT111ediately after the core is offloaded to just e before the decay heat of the hottest assemblies is low enough that no rapid zircaloy oxidation will take place. and the fuel cladding will remain intact with no gap release if water in the spent fuel pool is lost.

Reactor Configuration 2: The reactor is defueled. permanently shutdown.

and spent fuel is in the spent fuel pool but is not susceptible to a zircaloy cladding fire or gap release caused by an incipient fuel cladding failure in the event the spent fuel pool is drained accidentally. In this configuration, the spent fuel can be stored long-term in the spent fuel pool without the possibility of initiating a z1rcaloy fire or significant fuel cladding failure. In addition, the site may contain a radioactive inventory of liquid radwaste, activated reactor components, and contaminated structural materials.

The radioactive inventory during this configuration may change depending on the licensee's proposed shutdown activities and schedule.

Reactor Configuration 3: The reactor is permanently shutdown and no spent fuel is in the reactor or the spent fuel pool. All spent fuel has been removed to an offsite or onsite dry storage independent spent fuel storage installation (ISFSI) or to a DOE high-level repository. The remaining radioactive inventory depends on the decommissioning status and may include liquid radwaste. activated reactor components. and contaminated structural materials.

Re?ctor Configuration 4: Same as reactor configuration 3, except the reactor site has no significant mobile sources of radioactivity such as contaminated liquids (less than 1000 gallons).

There are potential onsite and offsite radiological consequences that could be associated with the onsite storage of the spent fuel in the spent fuel pool for some time after permanent shutdown. In Reactor Configuration 1.

in the event of a complete loss of spent fuel pool coolant inventory such as from a beyond-design-basis e~rthquake scenario, there is a potential for overheating the fuel by decay heat. This sequence could result in a zircaloy cladding fire that may have significant onsite and offsite consequences.

To prevent fuel rod cladding failure leading to a zircaloy-cladding fire 1f all spent fuel pool water is lost. the rod cladding temperature must not exceed 565°C. The rod cladding temperature is an important factor that must be considered in modifying the financial protection requirements for permanently shutdown reactors.

In Reactor Configuration 2. the spent fuel has decay heat sufficiently low that the cladding will remain intact even if all spent fuel pool water is lost. However. if there are significant sources of radioactive material stored onsite, it would be appropriate to maintain an adequate level of onsite insurance coverage. Although the offsite consequences are negligible in the Reactor Configuration 2 , because the spent fuel pool is operational and an 4t inventory of radioactive materials exists onsite, an appropriate level of offsite financial protection 1s required to account for the potential for significant judgments or settlements from litigation that might be instituted and to protect the Federal government from indemnity claims.

In Reactor Configuration 3. when spent fuel is no longer stored 1n the spent fuel pool, the potential for a radiological incident is primarily in mobile sources of radioactivity onsite at permanently shutdown nuclear reactors. The offsite cleanup costs were found to be negligible for Reactor Configuration 3. but as was noted in Reactor Configuration 2. an appropriate level of offsite financial protection is still required to account for the potential for significant judgments or settlements from litigation that might be instituted and also to protect the Federal government from indemnity claims. Because the level of risk has decreased vis-a-vis the Reactor Configuration 2 by having no spent fuel in the spent fuel pool. the level of offsite financial protection required is being reduced by taking into account only the mobile radioactive inventory onsite.

In the Reactor Configuration 4. with no significant amount of mobile sources of radioactivity such as contaminated l1qu1ds onsite. there is no need to maintain the same level of insurance coverage for onsite or offsite financial protection as in Reactor Configuration 3. The basis for the transition from Reactor Configuration 3 to Reactor Configuration 4 is the point at which there is less than 1000 gallons of liquid radwaste stored onsite. A limiting value of 1000 gallons has been considered because it constitutes approximately a factor of 500 reduction in volume from the large volume tank used as the basis for the Reactor Configuration 3 limiting event.

In Reactor Configuration 4. if the licensee has cleaned the site to unrestricted release levels and is awaiting a confirmatory survey for terminating the license, the necessary level of onsite insurance coverage at this stage would be less than when 1000 gallons of liquid radwaste were stored onsite. Under these circumstances. the onsite coverage could be further reduced or eliminated to account for negligible onsite consequences. However, for offsite financial protection requirements. although the offsite consequences are negligible. some level of public liability financial

- protection must be maintained as long as there remains 1n effect a nuclear reactor license issued pursuant to 10 CFR Part 50 under the authority of Section 103 or 104 of the Atomic Energy Act (42 U.S.C. 2133. 2134). See Section 170a of that Act (42 U.S.C. 2210a). Section 170 is commonly referred to as the "Price-Anderson Act."

Proposed Regulatory Action The proposed amendments would adjust the onsite insurance coverage requirements and the offsite financial protection requirements for permanently shutdown reactors based on limiting the spent fuel cladding temperatures for accidents involving loss of spent fuel pool water and the amount of onsite radioactive inventory such as liquid radwaste in post shutdown modes: The insurance amounts are based on the estimated cost of recovery from limiting hypothetical events for specific reactor configurations.

The proposed amendments would also address "rated capacity" in 10 CFR 140.11 as used in Section 170a of the Atomic Energy Act to indicate that a permanently shutdown nuclear reactor has a "rated capacity" of zero.

The proposed financial protection requirements are as follows.

Reactor Configuration 1 - Fuel in spent fuel pool not sufficiently cool.

e The requirements for onsite insurance coverage and offsite financial protection remain as presently specified in 10 CFR 50.54(w) and 10 CFR 140.11, respectively.

Reactor Configuration 2 - Fuel could tolerate a complete loss of water in the spent fuel pool.

~ The onsite insurance coverage requirements is $50 million. The amount of $50 million is to recover from a postulated accident in the spent fuel pool.

The offsite financial protection requirement is $100 million. based on the potential for significant judgments or settlements resulting from litigation despite negligible offsite consequences.

Reactor Configuration 3 - No fuel in spent fuel pool. risk dependent on radioactive inventory at plant site in decommissioning status.

The onsite insurance coverage requirement is $50 million. The amount of $50 million is the estimated amount needed to recover from a postulated onsite event of a rupture of a large slightly contaminated liquid storage

- tank.

- The offsite financial protection requirement is $50 million. based on the potential for significant judgments or settlements resulting from litigation that might still be instituted despite negligible offsite consequences; however the liability risk is considered less than in Reactor Configuration 2.

Reactor Configuration 4 - No fuel in the spent fuel pool and no

- significant source of mobile radioactive material.

- The onsite insurance coverage requirements is either $25 million or is eliminated. The amount of $25 million 1s based on the possibility of having to clean up onsite contamination from an accidental rupture of a less-than-1000-gallon contaminated liquid storage tank during shutdown activities.

Elimination of onsite insurance coverage would be warranted when a licensee is awaiting a confirmatory survey for license termination.

- The offsite financial protection requirement is $25 million. based on the potential for claims arising from asserted offsite consequences. This would minimize the possibility that Federal Government indemnification would be required. As noted above. the Atomic Energy Act does not allow a 10 CFR Part 50 licensee to drop this coverage entirely, only to reduce it.

Discussion This proposed rule would allow power reactor licensees to reduce their onsite insurance coverage and offsite financial protection requirements during permanent shutdown without resorting to the exemption process. The level of financial protection would be determined for permanently shutdown reactors at

- a level that coincides with their actual configuration stage.

During Reactor Configuration 1. licensees would be required to maintain

)

onsite insurance coverage and offs1te financial protection at the levels currently required by 10 CFR 50.54(w) and 10 CFR 140.11. respectively. This is because the radiological consequences during this stage of permanent shutdown approximate the magnitude of a severe core damage accident.

After allowing the spent fuel to cool down to the point that the maximum spent fuel cladding temperature will not exceed 565°c in the event of a loss of water in the spent fuel pool (Reactor Configuration 2). power reactor licensees would be allowed under 10 CFR 50.54(w) to reduce their onsite insurance coverage from $1.06 billion to $50 million. The reason for this reduction in insurance coverage is that the rapid clad oxidation event of Reactor Configuration 1 is not possible. Insurance coverage requirements for Reactor Configuration 2 are based on the fact that there is a possibility for a fuel handling accident in the spent fuel pool. and significant amounts of mobile radioactive sources remain ons1te that have a potential for release during this period. The $50 million coverage would be adequate to clean up the site in the eyent of a fuel handling accident. an accidental release of cooling water from the spent fuel pool. or a rupture of a large slightly contaminated liquid storage tank.

The proposed insurance coverage requirement for Reactor Configuration 2 does not take into account the reduction in radioactive decay of the spent fuel assemblies with the passage of time during that period. 'The insurance coverage requirements are based on the conservative assumption of a fuel handling accident shortly after the transition to Reactor Configuration 2.

Adjusting insurance requirements during Reactor Configuration 2 based on the decay level of the spent fuel would be burdensome from a regulatory standpoint, as opposed to selecting a bounding figure to encompass any unexpected events concerning the spent *fuel pool.

In Reactor Configuration 2. the offsite financial protection requirements set forth in 10 CFR 140.11 would be reduced from $200 million to

$100 million for the primary liability coverage. and the licensee would be allowed to withdraw from the secondary liability coverage under Price-Anderson.

In Reactor Configuration 3. when all the spent fuel has been removed to an onsite or offsite dry storage ISFSI or to a DOE high level repository and the onsite radioactive inventory is greater than 1000 gallons. the onsite insurance coverage requirements would be $50 mill.ion under the proposed 10 CFR 50.54(w). This.a100unt is based on the fact that there are still mobile radioactive sources onsite that have the potential to contaminate the site.

(

The maximum cleanup costs associated with Reactor Configuration 3 are estimated at approximately $50 million. The conservative limiting event is the rupture of a large contaminated liquid storage tank that causes soil contamination and the potential to contaminate groundwater. The offsite financial protection requirements under the proposed Section 140.11 would be reduced from $100 million to $50 million. and the licensee would not be

~

required to maintain secondary liability coverage under the Price-Anderson Act for Reactor Configuration 3. With no spent fuel in the spent fuel pool. the risks of offsite contamination have been reduced considerably for this configuration.

~ In Reactor Configuration 4, there are no significant mobile sources of radioactivity, such as liquid contaminants. onsite. Thus, the potential for onsite and offsite radiological impacts is limited. In this situation. onsite insurance coverage requirements either would be $25 million or would be completely eliminated under the proposed 10 CFR 50.54(w). The amount in each case would be based on information provided by the licensee and evaluated by the staff for the particular circumstances of the shutdown reactor. The $25 million onsite insurance coverage would be required if liquid radwaste remained stored onsite. usually 1,000 gallons or less of radwaste. that may be susceptible to an accidental spill and the consequent need for cleanup'of the e contaminated site. Elimination of required onsite insurance coverage would be based on the licensee's submittal of its terminal radiation survey to the NRC stating that the site has been cleaned to unrestricted release levels and is awaiting a confirmatory survey for termination of the license. In either case. the onsite and offsite _consequences would be negligible.

In Reactor Configuration 4. the required offsite financial protection would be reduced to $25 million to account for the continuing potential for claims based on asserted offsite consequences. A minimum of $25 million in coverage would minimize the possibility that Federal Government indemnification would be required and would be consistent with the requirements of Section 170 of the Atomic Energy Act that power reactor licensees maintain some level of public liability financial protection. The licensee would not be required to maintain secondary liability coverage under Price-Anderson for Reactor Configuration 4.

In addition. "rated capacity" would be addressed in 10 CFR Part 140 to indicate that permanently shutdown nuclear power plants have "zero" rated capacity. The effect of this amendment would be ~o allow the NRC to permit reduction of the primary liability coverage and elimination of the requirement for participation in the secondary liability coverage for nuclear power plants that had made the certifications under 10 CFR 50.82(a)(l)(i) and (ii).

However, for reasons stated above. the NRC does not propose to permit this reduction and withdrawal until a reactor has entered the Reactor Configuration

2. At that point the NRC proposes that the reactor no longer be subject to the requirements to maintain primary financial protection in the "maximum amount available at reasonable cost and on reasonable terms from private sources" or to participate in the secondary financial protection public liability system under Section 170 of the Atomic Energy Act. The C00111ission has already approved, in response to site-specific requests. these adjustments in the primary and secondary public liability insurance regime, and this clarification in Part 140, as requested by the CO!Tlllission, places into the Coomission's regulations a statement that a permanently shutdown nuclear power plant is no longer considered to have any "rated capacity."

The petition for rulernaking submitted by the North Carolina Public Staff Utilities Commission would be substantially granted in that the insurance requirements would be significantly reduced. as requested. H'ever, the petition could not be fully granted because of the Price-Anderson statutory provisions that do not allow licensees who continue to hold 10 CFR Part 50 licenses to drop the offsite public liability coverage entirely.

Finding of No Significant Environmental Impact: Availability The Corrmiss1on has determined under the National Environmental Policy Act of 1969. as amended. and the ColTITlission's regulations in Subpart A of 10 CFR Part 51. that this rule. if adopted. would not be a major Federal action significantly affecting the quality of the human environment. and therefore. an environmental impact statement is not required. The proposed rule change would allow licensees to seek reductions in onsite and offsite insurance coverage following permanent shutdown if they meet specified reactor configurations because of the reduced risk associated with permanently shutdown reactors. The proposed rule change would require no changes in hardware. procedures. organization. or operation of nuclear power reactors.

It would not affect the-safety requirements for nuclear power reactors because of the significantly reduced risks to the public health and safety in Reactor Configurations 2. 3. and 4 and it would not affect the likelihood. magnitude.

or consequences of accidents at the permanently shutdown nuclear power reactors. Although the proposed rule change would reduce the level of financial protection available to pay for environmental or other consequences that may result from accidents at permanently shutdown nuclear power reactors, the Co!TITlission considers the reduced required insurance and financial protection coverage to be fully adequate and commensurate with the reduced consequences of potential accidents at permanently shutdown nuclear reactors 15

and that the environment will not be negatively affected. Accordingly, the Commission has determined that the proposed rulemaking would have no significant impacts on the quality of the environment.

The environmental assessment and finding of no significant impact on which this determination is based are available for inspection at the NRC Public Document Room. 2120 L Street NW. (Lower Level). Washington, DC. Single copies of the environmental assessment and the finding of no significant impact are available from George Mencinsky. Office of Nuclear Regulatory Research. U.S. Nuclear Regulatory Co111Tiiss1on, Washington. DC 20555 0001, telephone (301) 415-6206.

Paperwork Reduction Act Statement This proposed rule does not contain a new or amended information collection requirement subJect to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Existing requirements were approved by the Office of Management and Budget. approval numbers 3150-0011 and 3150 0039.

Public Protection Notification The NRC may not conduct or sponsor. and a person is not required to respond to, an information collection unless it displays a currently valid 0MB control number.

Regulatory Analysis The Commission has prepared a draft regulatory analysis on this proposed regulation. The analysis examines the costs and benefits of the alternatives considered by the Corrunission. The draft analysis is available for inspection in the NRC Public Document Room, 2120 L Street NW. (Lower Level). Washington.

DC. Single copies of the draft analysis may be obtained from George Mencinsky, Office of Nuclear Regulatory Research. U.S. Nuclear Regulatory Commission. Washington. DC 20555-0001. telephone (301) 415-6206.

The Commission requests public corrment on the draft regulatory analysis.

Corrments on the draft analysis may be submitted to the NRC as indicated under the ADDRESSES heading.

Regulatory Flexibility Certification As required by the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)).

the Commission certifies that this rule. if adopted. will not have a significant economic impact upon a substantial number of small entities. The proposed rule only affects NRC power reactor licensees, which are not "small entities."

Backfit Analysis The NRC has determined that the backfit rule. 10 CFR 50.109. does not apply to this proposed rule because the backfit rule is limited in scope to construction and operation of nuclear reactors. This rule would only apply to reactors that have permanently ceased operations. Therefore, a backfit analysis is not required because these amendments do not involve any provisions that would impose backfits as defined in 10 CFR 50.109(a)(l).

List of Subjects 10 CFR Part 50 Antitrust, Clas~ified information. Criminal penalties. Fire protection, Incorporation by reference, Intergovernmental relations. Nuclear power plants and reactors, Radiation protection. Reactor siting criteria. Reporting and recordkeeping requirements.

10 CFR Part 140 Criminal penalties. Extraordinary nuclear occurrence. Insurance, Intergovernmental relations. Nuclear materials, Nuclear power plants and reactors. Reporting and recordkeeping requirements.

- For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974, as amended, and 5 U.S.C. 553. the NRC is proposing to adopt the following amendments to 10 CFR Parts 50 and 140.

PART 50--[)(J,1ESTIC LICENSING OF PRODUCTION AND UTILIZATION FACILITIES

1. The authority citation for Part 50 continues to read as follows:

AUTHORITY: Secs. 102, 103, 104, 105, 161, 182, 183, 186, 189, 68 Stat.

936. 937. 938, 948. 953. 954. 955. 956. as amended. sec. 234. 83 Stat. 444. as amended (42 U.S.C. 2132. 2133. 2134. 2135. 2201. 2232. 2233. 2236. 2239.

2282); secs. 201. as amended, 202. 206. 88 Stat. 1242 ..as amended 1244. 1246.

(42 U.S.C. 5841. 5842. 5846).

Section 50.7 also issued under Pub. L.95-601. sec. 10. 92 Stat. 2951, (42 U.S.C. 5851). Sections 50.10 also issued under secs. 101. 185. 68 Stat.

955. as amended (42 U.S.C. 2131. 2235); sec. 102. Pub. L.91-190, 83 Stat. 853 (42 U.S.C. 4332). Sections 50.13. 50.54(dd). and 50.103 also issued under sec. 108. 68 Stat. 939. as amended (42 U.S.C. 2138). Sections 50.23. 50.35.

50.55, and 50.56 also issued under sec. 185. 68 Stat. 955 (42 U.S.C. 2235).

Sections 50.33a. 50:55a and Appendix Q also issued under sec. 102. Pub. L.91-190. 83 Stat. 853 (42 U.S.C. 4332). Sections 50.34 and 50.54 also issued under sec. 204. 88 Stat. 1245 (42 U.S.C. 5844). Sections 50.58, 50.91. and 50.92 also issued under Pub. L.97-415. 96 Stat. 2073 (42 U.S.C. 2239).

Section 50.78 also issued under sec. 122. 68 Stat. 939 (42 U.S.C. 2152).

Sections 50.80-50.81 also issued under sec. 184. 68 Stat. 954. as amended (42 U.S.C. 2234). Appendix Falso issued under sec. 187. 68 Stat. 955 (42 U.S.C.

- 2237).

2. In§ 50.54(w). paragraph (5) is added to read as follows:

§ 50.54 Conditions of licenses.

(w) * * *

(5) For the specified reactor configurations during permanent shutdown. licensees shall maintain the following insurance requirements notwithstanding paragraph (w)(l):

(i) For Reactor Configuration 1: when the reactor is defueled, permanently shutdown. and the spent fuel cladding temperature in the spent fuel pool is 565°C or greater for a postulated loss of spent fuel pool cooling event. the insurance coverage must be as specified in paragraph (w)(l).

(ii) For Reactor Configuration 2: when the reactor is defueled and permanently shutdown. no operating reactors are on the site. and the spent fuel cladding temperature in the spent fuel pool does not exceed 565°c for a postulated loss-of-spent-fuel-pool-cooling event, the minimum insurance coverage limit for each reactor must be $50 million.

(iii) For Reactor Configuration 3: when the reactor is defueled and permanently shutdown. no operating reactors are on the site. no fuel is in the spent fuel pool. and the radioactive liquid inventory onsite_ is 1.000 gallons or greater. the minimum insurance coverage for each reactor must be $50 million.

(iv) For Reactor Configuration 4: when the reactor is defueled and permanently shutdown. no operating reactors are on the site. no fuel is in the spent fuel pool. and the radioactive liquid inventory onsite is less.than 1,000 gallons. the minimum insurance coverage for each reactor must be $25 million. For sites awftiting license termination. no insurance coverage is required if the licensee has completed its terminal radiation survey and the site is ready for the confirmatory survey for license termination.

PART 140--FINANCIAL PROTECTION REQUIREMENTS AND INDEMNITY AGREEMENTS

1. The authority citation for Part 140 continues to read as follows:

AUTHORITY: Secs. 161. 170. 68 Stat. 948. 71 Stat. 576. as amended (42 U.S.C. 2201. 2210); secs. 201. as amended. 202. 88 Stat. 1242. as amended.

1244 (42 U.S.C. 5841. 5842).

2. In § 140. ll(a). remove "and" at the end of paragraph (3). change "."

at end of paragraph (4) to "; and" and add paragraph (5) to read as follows:

§ 140.11 Amounts of financial protection for certain* reactors.

(a) * * *

(5) For the specified reactor configurations during permanent shutdown of nuclear power reactors (such reactors being classified as having zero electric power level rated capacity) that were covered during their operation by paragraph (a)(4):

Ci) For Reactor Configuration 1: when the reactor is defueled.

permanently shutdown. and the spent fuel cladding temperature in the spent fuel pool is 565°C or greater for a postulated loss of spent fuel pool cooling event. in the amount as specified in paragraph (a)(4).

- 21

(ii) For Reactor Configuration 2: when the reactor is defueled and permanently shutdown, no operating reactors are on the site. and the spent fuel cladding temperature in the spent fuel pool does not exceed 565°C for a postulated loss-of-spent-fuel-pool-cooling event. in the amount of $100 million for each reactor.

(iii) For Reactor Configuration 3: when the reactor is defueled and permanently shutdown. no operating reactors are on the site. no fuel is in the spent fuel pool. and the radioactive liquid inventory onsite is 1.000 gallons or greater. in the amount of $50 million for each reactor.

(iv) For Reactor Configuration 4: when the reactor is defueled and permanently shutdown, no operating reactors are on the site. no fuel is in the spent fuel pool. and the radioactive liquid inventory onsite is less than 1,000 gallons. in the amount of $25 million for each reactor.

Dated at Rockville. Maryland, this ;:z.~~ay of October. 1997.

For the Nuclear Regulatory Commission.

John -

Seer rrmission.