ML23159A105

PR-050 59FR05216 - Use of Decommissioning Trust Funds Before Decommissioning Plan Approval (Draft Policy Statement)

ML23159A105
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Issue date:	02/03/1994
From:	Blaha J NRC/EDO
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PR-050, 59FR05216
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ADAMS Template: SECY-067 02/03/1994 PR-050 - 59FR05216 - USE OF DECOMMISSIONING TRUST FUNDS BEFOREDECOMMISSIONING PLAN APPROVAL (DRAFT POLICY STATEMENT)

PR-050 59FR05216 RULEMAKING COMMENTS Document Sensitivity: Non-sensitive - SUNSI Review Complete

DOCKET NO. PR-050 (59FR05216)

In the Matter of USE OF DECOMMISSIONING TRUST FUNDS BEFORE DECOMMISSIONING PLAN APPROVAL (DRAFT POLICY STATEMENT)

DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT

02/01/94 01/12/94 DRAFT POLICY STATEMENT 04/18/94 04/15/94 COMMENT OF MICHIGAN PUBLIC SERVICE COMM (HASSO C. BHATIA, PHO) (

1) 04/18/94 04/15/94 COMMENT OF CITIZENS AWARENESS NETWORK 04/18/94 04/18/94 (DEBORAH KATZ, PRESIDENT) (

2)

COMMENT OF DON'T WASTE MICHIGAN (MARY P. SINCLAIR, CO-CHAIR) (

3) 04/18/94 04/18/94 COMMENT OF DETROIT ED CO. (DOUGLAS R. GIPSON, VP) (

4) 04/18/94 04/18/94 COMMENT OF COMMITTEE FOR SAFE ENERGY FUTURE 04/18/94 04/19/94 04/16/94 04/19/94 (WILLIAMS. LINNELL, II) (

5)

COMMENT OF JON BLOCK, ESQUIRE (

COMMENT OF NEI (THOMAS E. TIPTON) (

6)

7) 04/19/94 04/19/94 COMMENT OF YANKEE (RUSSELL MELLOR, PROJ. MANAGER) (

8) 04/21/94 04/18/94 COMMENT OF VIRGINIA POWER (M.L. BOWLING, MANAGER) (

9) 04/21/94 04/18/94 04/21/94 04/19/94 05/02/94 04/19/94 05/03/94 04/28/94 05/09/94 05/02/94 COMMENT OF NEW ENGLAND COALITION ON NCUELAR POLLUT (JAMES PERKINS, PRESIDENT) (

10)

COMMENT OF UTILITY DECOMMISSIONING GROUP (JOSEPH B. KNOTTS, JR., ET AL) (

11)

COMMENT OF CONSOLIDATE EDISON (STEPHEN 8. BRAM, VP) (

12)

COMMENT OF MD DEPT OF ENVIR (ROLAND G. FLETCHER, ADMINISTRATOR) (

13)

COMMENT OF TU ELECTRIC (D. R. WOODLAN) (

14)

OOCKET NUMBER PR PROPOSED AULE...;;...;;.;.'""""'---

(S&f f R.!J.216}

Log Fi l e

1. TXX -94128

1. 10185 DOCKETED USNRC

• 94 MAY -9 A10 :36 William J. Cahill, Jr.

Group Vice President 1UELECTRIC U. S. Nuclear Regulatory Commission Attn:

Docketing and Service Branch Washington, DC 20555 May 2, 1994 OFFICE F SECRETARY DOCKETING & SFRVICE BRANCH

SUBJECT:

COMMENTS ON DRAFT POLICY STATEMENT: "USE OF DECOMMISSIONING TRUST FUNDS BEFORE DECOMMISSIONING PLAN APPROVAL."

Gentlemen:

TU Electric welcomes the opportunity to provide comments to the Draft Policy Statement; "USE OF DECOMMISSIONING TRUST FUNDS BEFORE DECOMMISSIONING PLAN APPROVAL."

Decommissioning trust funds should be used. prior to decommissioning plan approval. for all activities related to decommissioning within certain restrictions.

In the ancillary issues section, the NRC states that it believes licensees should be allowed to withdraw funds from the trust funds for preparation of the 10CFR50.82 decommissioning plan and other post shutdown administrative costs (59 Fed. Reg at 5218).

The section lists criteria that effectively define boundaries or conditions under which licensees can use funds to pay for the decommissioning plan without jeopardizing the ability to ensure adequate funds are available for decommissioning.

The staff should develop and set similar boundaries for other areas that are typically performed very early in the decommissioning process.

The overlying criteria for these withdrawals should be that: 1) the activity for which the funds are withdrawn does not impact or adversely affect *public health and safety; 2) and that adequate funds are maintained to place the facility in a safe storage configuration in case decommissioning activities are interrupted unexpectedly or unforseen conditions or expenses arise.

The NRC should issue, for public comment, criteria similar to that published in the ancillary issues section of this draft policy.

The NRC believes they should review decommissioning expenditures prior to decommissioning plan approval. yet the draft policy is not clear as to the purpose of the review.

The NRC purports to review the expenditures to ensure that they are within a normal range and similar to those incurred by similar facilities for similar activities.

The draft policy does not mention what action would be taken if the expenditure does not fall within this range.

Further, NRC states it is not reviewing these expenditures for misuse of funds or excessive cost overruns, preferring to leave those functions to regulatory agencies which L 2 1 1994 400 N. Olive Street L.B. 81 Dallas, Texas 75201 knowl~"ed b d

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TXX-94128 Page 2 of 3 have rate setting authority such as the Federal Energy Regulatory Commission (FERC) and state Public Utility Commissions (PUCs) and their oversight and prudency functions.

Additionally, in the statement of policy, the NRC further acknowledges that utilities have an incentive to spend the decommissioning funds prudently as the stock holders are liable for the decommissioning costs in excess of those in the trust.

The only reason for the review, given in the statement of policy, is to ensure the health and safety of the general public.

There are other regulatory mechanisms for evaluating the activity for which the funds are withdrawn without reviewing the actual withdrawal from the fund.

The expenditure of decommissioning trust funds for legitimate decommissioning activities is an economic and not a safety concern.

In the draft policy the NRC establishes criteria with which to evaluate licensing requests for early withdrawal of decommissioning funds prior to plan approval.

TU Electric offers the following comments.

Criterion No. 1 of the draft policy is overly restrictive and burdensome.

Criterion No. 1 of the draft statement states that a licensee must demonstrate that the expenditure is for an activity that would occur under a reasonable decommissioning scenario.

The NRC believes that this will prevent funds for being used for any activity that does not reduce radioactivity at the site. This statement is overly restrictive in that it excludes some activities that. while they do not directly remove radioactivity, are dedicated to the decommissioning effort.

Attempting to prevent activities that would preclude release of the site for unrestricted use by limiting the funds available for that activity is not effective as the utility could always use funds other than decommissioning trust funds.

If the NRC wants to prevent activities that preclude release of the site for restricted use or are not in support of decommissioning efforts it should require review of the activity itself through any of the other available mechanisms such as 10CFR50.59 or special rulemaking.

Requiring the utility to provide documentation to demonstrate that the proposed activity is a legitimate decommissioning activity is burdensome.

NRC should go back to the basic premise of this draft policy.

The basic premise is that in the event that there are circumstances or conditions which delay or preclude proceeding with the decommissioning effort there will be funds available to place the plant in a storage condition until the event or circumstance is resolved.

Thus, as long as the value of the fund does not fall below the regulatory required amount in effect at the time of the request the withdrawal should be allowed.

Thus. the only requirement should be that the utility document that activity was a legitimate decommissioning activity and the expenditure was reasonable.

Criterion No. 2 misuses the term SAFESTOR.

In criterion No. 2, the NRC purports to require that the expenditure of decommissioning funds not reduce the value of the trust below an amount necessary to maintain the reactor in a safe storage condition if unforseen

TXX-94128 Page 3 of 3 or unexpected situations arise.

The discussion in the Criterion No. 2 section implies that the licensee have sufficient funds to maintain the reactor in a safe condition while the unforseen situation is resolved and that the delay in the decommissioning not preclude returning the site to unrestricted use.

The NRC calls this temporary storage condition SAFESTOR.

TU Electric believes that calling this temporary storage condition, while the unanticipated situation is being resolved, SAFESTOR is in error.

SAFESTOR is a decommissioning alternative where the plant is placed in storage for a period of time until the associated radioactivity decays to a safe level.

If you have any questions on these comments please contact Mr. Jose' D.

Rodriguez at (214) 812-8674.

Sincerely, William J. Cahill, Jr.

By:~~

D. R. Woodlan Docket Licensing Manager JDR/

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MARYLAND DEPARTMENT OF THE JOO~fHfr8tvrENT (i5) 2500 Broening Highway

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/ J (410) 631-3000 William Donald Schaefer Governor April 28, 1994 Secretary U.S. Nuclear Regulatory Commission Attention: Docketing and Service Branch Washington D.C. 20595

Dear Sir:

OFFICE OF SECRETARY DOCKETING & SERVICE BRANCH David A.C. Carroll Secretary

SUBJECT:

Request for Comments on the U.S. Nuclear Regulatory Commission (NRC)

Document SP-94-024 The Maryland Department of the Environment Radiological Health Program has reviewed the "Draft Policy Statement: Use of Decommissioning Trust Funds Before Decommissioning Plan", and submits the following comments:

1.

It does not seem necessary that NRC approve requests for the withdrawal of decommissioning funds for early equipment removal, prior to approval of the utilities decommissioning plans. This does not seem in concert with the intent of the sample statement under Background "... the fund trustee should only release funds upon certification that decommissioning is proceeding pursuant to an NRC-approved plan."

2.

Under Ancillary Issue, the section dealing with "de minimis" withdrawals for developing the decommissioning plan also seems to be outside the original intent for use of these funds. These withdrawals may seem to be a minor portion of funds allocated for decommissioning, but it starts a process that would allow utilities to tap these funds, if they can fit activities into the definition of decommissioning or simply request an amendment to use these funds for other purposes. The future costs and expenses of decommissioning are not at all well known or defined, and are, at best, only estimates. In fact, decommissioning activities that have been carried to completion to date have almost always ranged far in excess of planned amounts. Therefore, other uses are unacceptable, even if they are subject to prior regulator approval.

3.

A ruling to permit prior use of these funds could affect Agreement states in two ways. There could be insufficient financial resources remaining to decommission Nuclear Power Plants thus creating a potential burden on the state and, serious impairment of radioactive material licensee's ability to complete decommissioning. Most existing decommissioning "certifications and funding plans" are generally acknowledged by the NRC to already be severely UNDERFUNDED. This rule would exacerbate that situation.

MAY 1 O 1994 Acknowledged by card......... _,,.,,,.m..,:;;;

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4.

As an Agreement State, this ruling may be judged by the NRC as an item of Compatibility. Since Maryland regulations, policies, etc. are expected to closely follow federal rules and procedures, we would be forced to adopt and allow our licensees to use the same principle.

A prime example is Neutron Products, Inc. (NPI), where the decommissioning certification amount will only be $750,000.00 and the estimated decommissioning costs could range from $20-50,000,000.00. The current proposed Maryland regualtion on decommissioning closely follows its federal counterpart.

Roland G. Fletcher, Administrator Radiological Health Program cc: Richard Bangart, Director

@ RECYCLED PAPER

Stephen B. Bram Vice President DOCKET NUMBER p PROPOSED RULE..:....::.:.~

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consoIidated Edison Company of New York, Inc_( 5 q FR S 1-J 6)

DOCKETED USHRC Indian Point Station April 19, 1994 Broadway & Bleakley Avenue Buchanan, NY 10511 Telephone (914) 734-5340 Samuel Chilk Secretary Re:

US Nuclear Regulatory Commission Washington, DC Indian Point U~ 1r1JAY 22 p 4 :10 Docket No. 50-247 OFF ICE OF SECRETARY DOCKETING & SERVICE BRANCH Attention:

Docketing and Services Branch

SUBJECT:

NRC Draft Policy Statement on the Use of Decommissioning Trust Funds Before Decommissioning Plan Approval We have reviewed the subject matter as reflected in Federal Register notice 59 FR 5216 and fully support its objective of allowing the use of external nuclear decommissioning trust funds to pay for the removal of components and other decommissioning related activities before NRC approval of a licensee's decommissioning plan.

As you are aware, Consolidated Edison operates a multi-unit site consisting of Indian Point Units 1 and 2.

While Indian Point Unit 2 is still operating, Indian Point Unit 1 was effectively shut down by NRC Confirmatory Order Dated June 19, 1980.

A decommissioning plan was submitted in connection with this order, pursuant to 10 CFR 50. 82, on October 17, 1980.

This decommissioning plan is still pending before the Commission.

As noted in the Indian Point Unit 1 decommissioning plan, we continue to utilize Unit 1 systems and structures to support ongoing activities on Unit 2.

These endeavors sometime involve the removal of, or modifications to, Unit 1

systems/structures/components which benefit future decommissioning activities and Con Edison's current objective to permit the release of the property for unrestricted use after decommissioning.

Thus, similar to other utilities with both operating facilities and shut down facilities with unapproved decommissioning plans, we have an ongoing need to address the current use of decommissioning funds to benefit, shorten or simplify future decommissioning activities.

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We therefore welcome the clarification and guidance provided in the subject policy statement.

In this regard, we submit that criterion No.

1 (59 FR 5217) may be unnecessarily stringent, in that it would limit trust withdrawals to decommissioning activities as defined in 10 CFR 50. 2.

We submit that trust withdrawals should also be permitted for early decommissioning related activities which, although not themselves directly reducing radioactivity at the site, will significantly facilitate such activities when they subsequently occur.

We also urge the Commission to clarify footnote number two of its draft policy statement (50 FR 5216), which nominally states that the policy statement does not apply to licensees with operating nuclear reactors.

There will be many instances where utilities owning all or part of more than one reactor will wish to avail themselves of the Commission's policies pertaining to pre-plan approval use of decommissioning trust funds for shut down reactors.

So long as usage of trust withdrawals is identifiable with the shut down reactor and does not diminish decontamination funding subsequently available for reactors which are continuing to

operate, there is no reason why multi-reactor licensees should be treated differently than single-reactor licensees for purposes of this policy statement.

This clarification can be afforded in the Commission's final policy statement without affecting the broader (and independent) issue of the use of decommissioning trust funds for operating plants.

We appreciate the opportunity to comment on this important matter and look forward to the finalization and issuance of this policy statement.

Very truly yours,

FREDERICK H. WINSIDN (1853-1886)

SILAS H. STRAWN (1891-1946)

Samuel J. Chilk WINSTON & STRAWN 1400 L STREET, N.W.

WASHINGTON, D.C. 20005-3502 (202i 311-~

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April 19, 1994 Secretary, U.S. Nuclear Regulatory Commission Washington, D.C.

20555 ATTN:

Docketing and Services Branch Re:

Use of Decomaissioning Trust Funds Before Daco-issioning Plan Approval; Draft Policy statement; 59 Fed. Reg. 5216 (February 3, 1994)

Dear Mr. Chilk:

CHICAGO OFFICE 35 WEST WACKER DRIVE CHICAGO, ILLINOIS 60601 (312) 558-5600 NEW YORK OFFICE 175 WATER STREET NEW YORK, NY 10038-4981 (212) 269-2500 On February 3, 1994, the Nuclear Regulatory Commission

("NRC") published in the Federal Register a notice of availability of, and opportunity to comment on, a draft policy statement on power reactor licensees' use of decommissioning funds to pay for decommissioning activities undertaken prior to Decommissioning Plan approval.

59 Fed. Reg. 5216 (1994).

on behalf of the Utility Decommissioning Group

("Group"),!' we submit the following comments on the draft policy statement.

1.

The Elements of the Proposed Policy statement That Call For NRC Review of Decommissioning Fund Withdrawals Are unnecessary.

The provisions of the draft policy statement that call for prior NRC review of decommissioning fund expenditures to pay for decommissioning activities undertaken prior to Decommissioning Plan approval are unnecessary.

The policy statement should be limited to identifying those decommissioning activities that can be The members of the Utility Decommissioning Group are Duke Power Company; Florida Power and Light Company; Northeast Utilities; Texas Utilities Electric Company; and Virginia Electric and Power Company.

Each Group member company owns or operates one or more nuclear power plants subject to NRC regulation.

MAY 1 0 1994.,

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WINSTON & STRAWN undertaken prior to Decommissioning Plan approval or, at most, to noting the considerations that should apply to decommissioning fund expenditures for such activities.

The draft policy statement provides no basis for the NRC's conclusion that prior NRC review of pre-Plan-approval decommissioning fund expenditures should be required.

As the NRC has acknowledged, licensees already have adequate incentives, including rate regulatory constraints, to prevent imprudent or inappropriate decommissioning fund expenditures.

59 Fed. Reg. 5216, 5217.

Further, performance of activities that fall outside the bounds of "decommissioning" could jeopardize licensees' use of a qualified fund under Internal Revenue Code

§ 468A, and the attendant tax benefits. Thus, licensees have little if anything to gain, and face the potential for substantial losses, if they misapply their decommissioning funds.

In any event, the NRC recognizes that prior NRC approval of decommissioning fund expenditures would not likely prevent misuse or waste of decommissioning funds.

Id.

While the draft policy states that it is consistent with the Commission's directive that the NRC Staff develop guidance on decommissioning fund withdrawals to pay for pre-Plan-approval decommissioning activities, prior NRC review or approval of such expenditures need not be part of that guidance.

In a Staff Requirements Memorandum

("SRM")

dated January 14,

1993, the Commission directed the Staff to develop guidance addressing "what activities should be permitted prior to approval of a

decommissioning plan and address, as well, the availability and use of money from the licensee's decommissioning fund for activities normally associated with decommissioning before approval of the decommissioning plan." The January 1993 SRM also provided that, in the interim prior to development of this guidance, "[t]he Staff may permit licensees to use their decommissioning funds" for acceptable pre-Plan-approval decommissioning activities. SRM at 2. While the draft policy statement may, as it suggests, be "consistent with" the Commission's directives in the January 14 SRM (59 Fed. Reg. 5217), the Commission did not direct the Staff to seek prior review and approval of such expenditures. The draft policy statement need not do so in order to satisfy the Commission's directives. 1'

'l:.'

Indeed, interposing NRC "approval" over activities properly performed under 10 C.F.R.

S 50.59 conflicts with the philosophy of that provision. Simply providing guidance as to which activities may be performed with decommissioning funds is sufficient direction for licensees.

2 -

WINSTON & STRAWN

2.

If the nc Believes That l!fRC Review and Approval of Pre-Plan-Approval DecolDJllissioning Expenditures Is Necessary, It Should Act Through Ruleaaking Rather Than Policy.

While the draft policy statement reflects the NRC' s conclusion "that withdrawal of funds for decommissioning activities before a decommissioning plan is developed and approved should require NRC review" (59 Fed. Reg. at 5217), a policy statement will not establish such a requirement.

If the NRC's intent is to require licensees to submit their decommissioning fund withdrawal proposals for prior NRC review, that intent should be pursued through rulemaking.

As the NRC has acknowledged, there currently is no NRC requirement that a

licensee obtain prior NRC approval for decommissioning fund disbursements.

See SECY-93-137, "Use of Decommissioning Trust Funds Before Decommissioning Plan Approval,"

May 18, 1993, at 6 ("[T]he regulations do not expressly require nor has the staff required a licensee to obtain formal approval for decommissioning trust fund withdrawals."); see also 59 Fed. Reg. 5216 (Feb. 3, 1994)

("NRC decommissioning regulations * *. are silent on whether approval of the decommissioning plan must precede withdrawals from the decommissioning trust fund.

• The NRC believes that withdrawal of funds for decommissioning activities before a decommissioning plan is developed and approved should require NRC review.").

In addition, the NRC has found acceptable decommissioning fund trust agreements that do not contain language requiring such prior NRC approval, although the sample trust provisions in NRC guidance contain such language.

59 Fed. Reg. 5216 (" [M] any licensees have acceptable trusts that nevertheless do not expressly limit the withdrawal of trust funds before NRC approves a decommissioning plan.").

Since prior NRC review of decommissioning fund withdrawals is not currently required, if the NRC wishes to impose such a requirement, it should initiate rulemaking to revise the decommissioning regulations accordingly.

3

• The "Tacit consent" Approach for Reviewing Licensee EXpenditure Plans is Inappropriate.

In the same vein, the asserted distinction in the draft policy statement between NRC "tacit consent" and "approval" of decommissioning fund expenditures is not supported and may, from a legal standpoint, be meaningless. The draft policy states that the "NRC would permit the licensee to use decommissioning funds and to undertake the proposed activities by tacitly consenting to the proposed withdrawals by not interposing, within a specified time, an objection to the licensee's proposal."

59 Fed. Reg. at 5218 (emphasis added).

By preserving expressly the possibility that it would take action to prevent a fund withdrawal, the NRC blurs the asserted distinction between review and approval.

3 -

WINSTON & STRAWN In an earlier discussion on the draft policy, the NRC offered two reasons for providing "tacit consent" rather than "formal approval." See SECY-93-137, "Use of Decommissioning Trust Funds Before Decommissioning Plan Approval," May 18, 1993. First, it was noted that "the regulations do not expressly require nor has the staff required a licensee to obtain formal approval for decommissioning trust fund withdrawals." Id. at 6.

Thus, the NRC determined that it "would be inconsistent with this regulatory scheme to require approval of fund withdrawals only during one stage of a plant's operation or decommissioning."

Id.

Second, it was asserted that "by issuing a formal approval, the NRC would arguably be taking a 'licensing' action that could be subject to a hearing and would require an environmental review."

Id.

Neither of these reasons provides an adequate basis for the proposed "tacit consent" procedure. First, while we agree that it would be "inconsistent" to seek formal approval of pre-Plan-approval expenditures only, it would be equally inconsistent to call for "tacit consent" of pre-Plan-approval expenditures only.

As the NRC acknowledges, its review of a proposed Decommissioning Plan "is not focused on examining the timing, scope, and cost of specific component removal or other decommissioning activities,"

and "the NRC does not supervise or review the actual expenditure of funds during decommissioning."

59 Fed.

Reg.

5216, 5217.

Characterization of NRC action as "tacit consent" rather than "approval" for pre-Plan-approval withdrawals only does not avoid the potential inconsistency noted by the NRC.

Second, it is not clear that there is a legal distinction between "tacit consent" and "approval" for purposes of determining whether the NRC is engaged in a "licensing action" that could involve public participation and environmental review.

While we believe that such decommissioning fund expenditures for pre-Plan approvals do not require licensing action and do not involve hearing opportunities or require environmental reviews, this conclusion is not dependent upon whether NRC review is characterized as "tacit consent" or "approval."

However, by appearing to require prior NRC review and approval (albeit in the form of policy), the NRC creates the potential for disagreement on this point.

4.

The Proposed Policy Governing "De Minimis" Expenditures, If Adopted, Should Be Made Expressly Applicable to Operating Plants.

The NRC should revise the policy statement to specify that the "ancillary" policy governing withdrawals from decommissioning funds to pay for the development of a

Decommissioning Plan and for "other post-shutdown administrative expenses" (emphasis added) is applicable to operating plants.

The 4 -

WINSTON & STRAWN draft policy is limited expressly to "licensees with operating reactors" (a misleading stipulation, as discussed below) and there is no indication that this limitation does not apply to the "ancillary" policy.

In addition, the policy itself refers to "other post-shutdown administrative expenses."

This limitation is inconsistent with the NRC's decommissioning regulations which provide that, except with respect to prematurely shut down plants, licensees must submit a proposed Decommissioning Plan no later than one year prior to expiration of the operating license.

Thus, under the "post-shutdown" limitation in the draft policy, licensees would be precluded from using decommissioning funds to pay the cost of developing the Decommissioning Plan unless they shut down prematurely.

The policy should be revised to provide that decommissioning funds may be utilized to pay the costs of developing a

Decommissioning Plan and for other legitimate administrative expenses associated with decommissioning, regardless of whether the plant in question is operating or permanently shut down.

We suggest that the term "post-shutdown" be removed from this aspect of the policy.

s.

The criteria set Forth in The Proposed Policy are Duplicative and In some Respects warrant Clarification.

The four criteria proposed in the draft policy for reviewing pre-Plan-approval decommissioning expenditures appear duplicative.

The Group believes that a policy setting forth (and perhaps expanding on) the considerations in Criterion 4, governing acceptable pre-Plan-approval activities, would be adequate to address this issue and, if properly constructed, would obviate additional criteria on decommissioning fund expenditures associated with those activities.

Examples of redundancy in the criteria include the following:

Criterion 1, which calls for a showing that a proposed expenditure is for legitimate decommissioning activities, seems duplicative of Criterion 4, which provides that withdrawals should be for acceptable pre-Plan-approval decommissioning activities only.

If an activity is a legitimate pre-Plan-approval decommissioning activity as called for in Criterion 4, it must be a legitimate decommissioning activity; therefore, Criterion 1 is unnecessary.

Criterion 3 "encompasses the principle that activities allowed before approval of the decommissioning plan 5 -

WINSTON & STRAWN

[should]

not significantly increase decommissioning costs."

This principle is already captured in Criterion 4 which provides that the activity to be funded should not significantly increase decommissioning costs.

Therefore, Criterion 3 is unnecessary.

Criterion 2 appears to address the same concern as Criterion 3 -- integrity and adequacy of decommissioning funds. If an expenditure does not significantly increase decommissioning costs it should not adversely affect a licensee's ability to accumulate sufficient decommissioning funds.

Therefore Criterion 2, like criterion 3, appears duplicative of Criterion 4.

Redundancy among the proposed criteria could be eliminated by distilling the criteria into Criterion 4, which provides that pre-Plan-approval withdrawals should be for acceptable pre-Plan-approval activities only.

By developing guidance to define such acceptable pre-Plan-approval activities, the NRC could greatly simplify the Commission's policy.

In this regard, the draft policy statement is premature, since it would establish as one criterion for review of decommissioning fund withdrawals a determination of whether the activity to be funded constitutes an acceptable pre-Plan-approval decommissioning activity, the guidance for which has not yet been developed.

In SECY-93-137, the NRC recognized that "[i]ssues concerning the oversight of the use of decommissioning funds are matters that should be considered as part of the general review [of NRC decommissioning funding regulations]

requested by the Commission" in response to SECY-92-382 and other NRC initiatives on clarification of the decommissioning regulations.

We understand that the NRC is presently developing proposed revisions to NRC decommissioning regulations and guidance to address the Commission's request and that the proposed revisions will include more definitive guidance on acceptable pre-Plan-approval decommissioning activities. See SRM dated June 22, 1993, "SECY 137 -- Use of Decommissioning Trust Funds Before Decommissioning Plan Approval."

While the Group believes that this forthcoming guidance on acceptable decommissioning activities should eliminate the need for separate guidance on associated decommissioning fund withdrawals, at a minimum the current draft policy should be tabled until the guidance that it "incorporates by reference" in proposed Criterion 4 --

on acceptable pre-Plan-approval decommissioning activities -- is developed.

6 -

WINSTON & STRAWN Several other aspects of the proposed criteria should be modified or clarified:

If Criterion 1 is retained, it should be revised to eliminate the provision that withdrawals must be for activities "that would necessarily occur under most reasonable decommissioning scenarios." This phrase adds nothing to the preceding provision that the withdrawal must be for "legitimate decommissioning activities" as defined in NRC regulations and suggests that a

decommissioning expenditure is only allowable if it would be incurred by most licensees.

Because licensees may face decommissioning expenditures for activities that are within the NRC's definition of decommissioning but nonetheless unique to their plant(s), the proposed provision is inappropriately restrictive.

The NRC should review its use of the term "unrestricted use" in the draft policy.

In some instances, the draft policy limits decommissioning activities and fund withdrawals to those that do not "foreclose the release of the site for possible unrestricted use."

These references may be appropriate.

However, in connection with Criterion 1 of the draft policy, the NRC states that the policy is intended to "prevent funds being used for activities that do not *.. ultimately permit release of the property for unrestricted use." 59 Fed. Reg. at 5217 (col. 2).

In view of the fact that the NRC is currently considering, as part of its "enhanced participatory rulemaking" to develop residual radioactivity standards for decommissioning, the possibility of allowing "restricted-use" decommissioning, this language may be overly restrictive.

While it may be appropriate to preclude withdrawals that could prevent unrestricted-use decommissioning (where restricted-use decommissioning has not yet been approved), it does not seem appropriate to allow withdrawals only for activities that ultimately permit unrestricted use.

The NRC should revise the policy to make clear that a licensee need not demonstrate that the action to be funded will lead to unrestricted use, as long as it will not preclude that option.

Alternatively, the policy could be revised to refer to "decommissioning and license termination" rather than "release for unrestricted use."

Similarly, the discussion associated with Criterion 1 of the draft policy should be revised to eliminate the suggestion that the policy is intended to "prevent funds being used for activities that do not reduce radioactivity at the site."

This statement is overly 7 -

WINSTON & STRAWN restrictive in that it appears to preclude withdrawals for pre-Plan-approval expenses such as planning costs that are expressly contemplated elsewhere in the draft policy or for other activities only indirectly related to the removal of radioactivity but within the NRC's definition of decommissioning.

The draft policy misuses the term SAFSTOR to mean maintenance of a site in a safe storage condition prior to receipt of Decommissioning Plan approval and commencement of decommissioning. While the draft policy would provide that fund withdrawals not impair the licensee's ability to pay for contingencies such as return of waste shipments, the policy should not describe the licensee's ability to handle those contingencies as "SAFSTOR. 11 SAFSTOR has been used to date to describe a decommissioning alternative that is addressed in a Decommissioning Plan and approved by NRC.

It should not be used as a general reference to safe conditions at a shut down plant site.

By misapplying the term SAFSTOR, the policy suggests that a licensee may not withdraw funds to cover pre-Plan-approval decommissioning expenses unless it has accumulated all funds necessary to effect SAFSTOR as defined in the Statement of Considerations accompanying the decommissioning regulations and in NRC guidance on decommissioning.

Such a showing should not be necessary as long as the licensee can satisfy the (potentially lesser) standard that it has sufficient funds available to maintain the plant in a safe condition in the face of any contingencies potentially arising from its pre-Plan-approval activities.

In

addition, the explicit characterization as a

decommissioning "contingency" of the funding "necessary to maintain the status quo" could be construed inappropriately to require that licensees include funding for that purpose in their decommissioning funds (59 Fed.

Reg.

at 5217, col. 3).

Whether or not intended, licensees may be compelled, either independently or by rate regulatory bodies, to increase their funding levels and conduct additional planning to address this scenario.

We recommend that, if this criterion is retained, the language regarding provisions for this contingency be deleted from the policy statement.

8 -

WINSTON & STRAWN

6.

Tb* Language seeking To Li.ai t Applical)ili ty of the Policy stateaent to Expenditures for Shut DoWD Plants is Iaprecise.

The NRC seeks to limit the proposed policy statement to decommissioning expenditures associated with plants that are permanently shut down.

However, the proposed policy statement states that it "does not apply to licensees with operating nuclear reactors." Clearly, this is not the intended limitation, since it would preclude a licensee with multiple plants, any of which was operating, from proceeding in accordance with the policy statement with respect to a permanently shut down plant. The footnote should be revised to specify that the policy statement does not apply "to licensee withdrawals from decommissioning funds for operating plants. 11J/

We appreciate the opportunity to comment on these matters of importance to the decommissioning process.

Si~JL a.

Joseph B. Knott~

William A. Horin Robert L. Draper Counsel to the Utility Decommissioning Group

~

This raises the question whether operating plants, not being subject to the policy statement, are somehow precluded from expending decommissioning funds prior to Decommissioning Plan approval, even though, as the Commission has recognized, there is no requirement, and perhaps no trust agreement provision, precluding such expenditures. Should the NRC decide to pursue this matter through policy rather than rulemaking, it would be helpful for the NRC to articulate its position on this matter in the final policy statement.

9 -

New England Coalition on Nuclear Po11ution00cKETED ~

PO Box 545 Brattleboro, Vermont 05302 USNRC l!_y Secretary of the Commission T NUuBER USNRC DOCKE M

p Apr*1 18, 1994

""V-

• 94 APR 21 P 3 :23 Washington DC 20555 PROPOSED RULE~-=----

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OFFICE OF SECRETARY OOCKETIHG & ~ERVI CE Please include the following as comments on a Federal Register notice that has come to our attention by a roundabout route We were told that comments are due tomorrow, April 19.

The notice apparently addresses the distribution of decommissioning funds to utilities.

We will continue to try to find the relevant citation information. but request that you include these couents for the proper matter.

BRANCH It seems clear that no funds should ever be disbursed for any decoDissioning activity that is undertaken before a utility has prepared all the requisite plans for the proposed deconissioning; before the relevant regulatory agencies have received and e,aalua.ted the plans, or before the public has had a full opportunity to inspect, comment upon and receive proper assessment of the plans.

It makes a m.ockery of the "planning" require:m.ent for decoJlllllissioning and of the fundamental concepts of regulatory and fiduciary oversight, to fund any utility or other licensee to proceed without a full analysis of the proposed pathway before it is taken.

This comment is made especially in light of the premature and ongoing de facto decoDissioning of Yankee Rowe.

The NRC has completely shortcircuited its supposed requirements for decoJD.issioning.

At workshops held last fall in Boston and around the country, NRC Staffers presented the purported decomai.ssioning guidelines that clearly outlined a step-by-8tep process analogous to the EPA's Superfund process.

The wholesale d.1smantling of Yankee Rowe prior to any agency-sponsored review process has been most unsettling.

'!bat the NRC should now be considering releasing funds for such activities is further evidence that the agency's mindset is one of facilitation for any licensee and any activity.

Damn the process; full speed ahead!

For the New England Coa_1t1on on Nuclear Pollution Jam.es Perkins, President of the Board of Trustees MAY 1 D 1994, Acknowledged by card uttHtftHHHHfllttHntnmn

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OOCK~ I I \\ !'* :,tRVl~E SECTION OFFICE OF THE SECRETARY OF THE COMMISSION f'ostmaik C&~:: !d /1.!L--J-q-=--L/:...---

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April 18, 1994 Secretary U.S. Nuclear Regulatory Commission Washington, DC 20555 Attention: Docketing and Service Branch Gentlemen:

DOCKETED USNRC

• 94 APR 21 AlO :34 OFFICE OF SECRETARY DOCKET! G & SERVICE BRANCH 5000 Dominion Bouk1Jard Glen Allen, Virginia 23060 VIRGINIA POWEil Serial No.94-084 NL&P/EJL Use of Decommissioning Trust Funds Before Decommissioning Plan Approval Draft Policy Statement Request For Comments Federal Register/ Vol. 59, No. 23, p 5216 / February 3, 1994 We appreciate the opportunity to comment on the subject draft policy statement.

We note that the Background section acknowledges that the NRG has previously evaluated decommissioning trust agreements as required by 1 0 CFR 50.75 (b), and has found the trusts to be acceptable if they contained language limiting fund withdrawals to legitimate decommissioning purposes. The Statement of Policy section acknowledges that there appears to be little motivation for utilities to misuse these funds. It recognizes that there is little financial incentive for a licensee to "pad" or dissipate collected decommissioning funds to increase the rate base, because the stockholders would not benefit. It also recognizes that a utility has an incentive to spend decommissioning funds prudently if it knows that its stockholders will be liable for decommissioning costs in excess of those already collected from ratepayers. We agree with all of the above.

In contrast to this, the Statement of Policy section also expresses that the NRG believes that it should guard against the misuse or waste of decommissioning trust funds by licensees, and that withdrawal of funds for decommissioning activities before a decommissioning plan is developed and approved should require NRG review. The Statement of Policy goes on to acknowledge that NRG approval of the decommissioning plan does not ensure prevention of misuse or waste of decommissioning funds, and that the NRG does not supervise or review the actual expenditure of funds during decommissioning and would not have an opportunity to identify serious cost overruns that might jeopardize the adequacy of funding available for the remaining decommissioning activities.

MAY 1 0 19941 Acknowledged by card.. ID.......

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The draft policy statement proceeds to present the criteria and supporting rationale that would be used by the NRC to evaluate proposals for early withdrawals from the decommissioning trusts. These criteria would provide a very detailed level of oversight to the NRC to assure that the funds from the decommissioning trusts were being used appropriately and not being wasted or misused.

We agree that the NRC should be concerned about the misuse or waste of decommissioning trust funds - as we are.

However, we believe that adequate safeguards are in place.

Our concern with the draft policy statement is that the NRC has neither articulated the reasons why this detailed level of oversight is needed, nor has the NRC provided specific examples of potential waste and misuse of funds that would warrant their proposed oversight. Quite to the contrary, the draft policy statement goes into great detail regarding the licensee's responsibilities relative to the use of the funds in the decommissioning trust, and the potentially significant penalties associated with misuse.

Absent an appropriate justification for the implementation of this policy statement, it is our judgment that this policy statement represents regulation without benefit. There is no demonstrated need for these new requirements.

We understand the NRC's concerns associated with the criteria in the draft policy statement. However, we believe that these concerns are not tangible for decommissioning. Respectfully, we recommend that the policy statement not be issued.

Again, we appreciate the opportunity to make comments on this subject. If you have any questions regarding this, please contact us.

M. L. Bowling, Manager Nuclear Licensing & Programs cc:

Mr. R. L. Draper Winston & Strawn 1400 L. Street, N.W.

Washington, DC 20005-3502

YANKEE ATOMIC ELECTRIC COMPANY Telephone (508) 779-6711 TWX 710-380-7619 580 Main Street, Bolton, Massachusetts 01740-1398 DOCKET NUMBER PR PROPOSED RULE S-0 (s-CJ Fl< ~116)

Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Attention:

Docketing and Service Branch

Subject:

Yankee Atomic Electric Company Comments on the U.S. Nuclear Regulatory Commission Draft Policy Statement, '1Jse of Decommissioning Trust Funds Before Decommissioning Plan Approval" (59FR5216)

Dear Mr. Chilk:

Yankee Atomic Electric Company (Yankee) appreciates the opportunity to comment in response to the subject draft policy statement regarding the use of decommissioning trust funds by permanently shutdown commercial nuclear power plants. Yankee is the owner of the Yankee Nuclear Power Station in Rowe, Massachusetts and provides engineering and licensing services to nuclear power plants in New England. Because the Rowe facility has been shut down permanently, we are particularly interested in the policy the Commission proposes to follow in addressing future requests to withdraw monies from external trust funds prior to NRC approval of decommissioning plans.

In general, Yankee supports a Cnmmission policy that permits licensees of permanently shutdown reactors to use their trust funds for decommissioning activities prior to NRC approval of the decommissioning plan. Yankee's comments and recommendations regarding the subject draft policy statement are detailed below. In addition, as a member of the Nuclear Energy Institute, Yankee has contributed to and supports the industry comments filed in this matter.

The draft policy states that, "If a licensee of a permanently shutdown facility spends decommissioning funds on legitimate decommissioning activities, the timing of these expenditures, either before or after NRC approves a licensee's decnmmissioning plan, should not adversely affect public health and safety, provided adequate funds are maintained to restore the facility to a safe storage configuration in case decommissioning activities are interrupted unexpectedly (emphasis added)."

Yankee proposes that this statement be modified to focus solely on the use of decommissioning funds before NRC approval of a decommissioning plan. The need for the policy statement to specifically address the assurance of additional fund availability to C76\\397 (j)

MAY 1 0 1994 Acknowledged by card........_"""'"""'mnlf

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United States Nuclear Regulatory Commission Mr. Samuel J. Chilk April 19, 1994 Page 2 restore the facility to a safe storage configuration during decommissioning, after the plan has NRC approval, is unnecessary.

After NRC approval of a decommissioning plan, it is not necessary to allocate additional monies to restore the facility to a safe storage configuration at any time during decommissioning activities. The decommissioning plan presents the programs, processes, and procedures that will be used to decommission the plant without adversely affecting the public health and safety. The plan also presents the limitations under which dismantlement activities will occur. These limitations provide reasonable assurance that dismantlement activities can be completed without having to assure that funds are available to suspend the activities and return the facility to a safe storage configuration.

Contingencies used in decommissioning cost estimates assure that adequate funds are available to account for unforeseen events (e.g., weather related delays, labor disputes, equipment breakdowns). The contingencies applied to decommissioning cost estimates typically do not include the expense of returning a facility to a safe storage configuration.

Inclusion of this in decommissioning cost estimates could increase the cost of decommissioning by several million dollars for no apparent increase in public health and safety.

Yankee offers no comment or objection to the first three criteria stated in the proposed policy that establish the basis and rationale to evaluate licensee proposals for early withdrawal from external decommissioning funds. However, Yankee does not believe that Criterion 4 should be included in the policy statement.

Criterion 4 states that licensees can undertake decommissioning activities that do not result in any of the following:

(a)

Foreclosure of ability to the release of the site for unrestricted use.

(b)

Significant increase in the cost of decommissioning.

(c)

Cause of any environmental impact not previously reviewed.

(d)

Violation of the terms of the licensee's license or 10CFR50.59 as applied to the existing license.

The criteria section also states that "after review of the licensee's proposed activities and fund withdrawal using the above criteria, the NRC would permit the licensee to use the decommissioning funds and to undertake the proposed activities."

Such a review by the NRC prior to permitting use of decommissioning funds is not necessary. Items (a) and (b) are presented in Criteria 1 and 3 respectively and therefore C78\\897

United States Nuclear Regulatory Commission Mr. Samuel J. Chilk April 19, 1994 Page 3 constitute a redundant review. Items (c) and (d) must be met prior to initiating any activity to assure that implementation will not violate the terms of the operating license.

Items (c) and (d) are fundamental to both power operations as well as decommissioning activities. Licensees maintain programs and procedures to assure that the considerations implicit in these items are reviewed prior to initiating any activities.

These programs and procedures and the specific reviews are available for audit and have been extensively audited by the NRC. Additionally, the staff requirements memorandum allowing implementation of activities prior to NRC approval of a decommissioning plan (M921124, January 14, 1993) requires a licensee review of the items presented in Criterion 4 before implementation.

Accordingly, Yankee recommends that Criterion 4 be deleted from the draft policy statement. At a minimum, the statement should clearly indicate that Items (c) and (d) are review items that do not require NRC approval prior to undertaking the proposed activities.

In SECY-93-137, the Staff recommended that the Commission approve "the proposed criteria for allowing certain de minimis withdrawals for decommissioning planning and administration without requiring prior staff review (emphasis added)." In a subsequent Staff Requirements Memorandum to the NRC Staff, the Commission approved the recommendation. Yankee agrees that below a certain financial threshold, it is appropriate to permit licensees use of decommissioning trust funds without prior NRC permission. However, the policy discussion in the section entitled, "Ancillary Issue," does not definitively indicate the Commission's and Staff's intent. The policy statement should be revised to specifically state that if a licensee determines that the criteria as outlined are met, the licensee does not need to request permission from the NRC to use the subject funds.

DWE/dhm C76\\S97 Very truly your,

~

'~

Russell Mellor Project Manager Yankee Rowe Project

NUCLEAR ENERGY INSTITUTE DOCKET NUMBER PR f o PROPOSED RULE_!..!!..:.-::;..._--

{_ S '{ F l< f1Jt:)

Mr. Samuel J. Chilk Secretary U.S. Nuclear Regulatory Commission Washington, DC 20555 April 19, 1994 ATTENTION:

Docketing and Services Branch DOCKETED USURC

• 94 APR 19 P4 :24 OFFICE OF SECRETARY DOCKETING & S::HV!rE BRM!Ch

SUBJECT:

U.S. Nuclear Regulatory Commission Draft Policy Statement, "Use of Decommissioning Trust Funds Before Decommissioning Plan Approval" 59 Fed. Reg. 5216, February 3, 1994, Request for Comments

Dear Mr. Chilk:

The Nuclear Energy Institute (NEI) 1 submits these comments on behalf of the nuclear power industry. We have reviewed the Nuclear Regulatory Commission's (NRC) proposed policy to clarify 10 CFR 50. 75, 50.82, and Regulatory Guide 1.159 (59 Fed.

Reg. 5216, February 3, 1994). The proposed policy would permit use of decommissioning trust funds prior to approval of the decommissioning plan under specific circumstances.

We support the NRC's approach to permit utilities seeking to withdraw money from their trust funds before their decommissioning plans are approved by NRC, provided the withdrawal satisfies the rationale provided in the draft policy statement. We request the NRC to develop a similar policy for operating plants. We believe that the 1 NEI is the successor organization to the Nuclear Management and Resources Council (NUMARC). NUMARC was the organization of the nuclear industry responsible for coordinating the 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 the regulatory aspects of generic operational and technical issues affecting the nuclear industry. NEl's members include every utility licensed to operate a commercial nuclear power plant in the United States, the major nuclear steam supply system vendors, major architect/engineering firms, fuel fabrication facilities, materials licensees and other holders of NRC licenses, and other individuals and organizations involved in the nuclear energy industry.

1776 I STRFET, NW SUI TE 4 00 WAS H INGTON, DC 20D06-3708 PHONE 702 7 39 8000 FAX 202 785 40 19

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Mr. Samuel J. Chilk April 19, 1994 Page 2 expenditure of decommissioning trust funds for operating plants can potentially reduce radiological exposure and decommissioning costs. It may not be justifiable, nor cost effective to postpone selected component removal that are obsolete and no longer functional.

The draft policy statement provides criteria by which to evaluate early withdrawal of decommissioning funds prior to the decommissioning plan approval. Each criterion includes a statement that withdrawals for early decommissioning activities should not be permitted if they do not ultimately permit release of the property for unrestricted use.

This appears to be based on the assumption that for the life of this policy statement the definition of decommissioning contained in the current 10 CFR 50.2 will apply. This may not be the case. A broader definition was provided in the staff's draft proposed rule on Radiological Criteria for Decommissioning ofNRC-licensed Facilities, announced in the Federal Register Notice of Availability, February 2, 1994 (59 Fed. Reg. 4868). It would provide a definition at 10 CFR 20.1003 (presumably accompanied by a conforming change to 10 CFR 50.2) as follows: "Decommissioning means to remove a facility or site safely from service and reduce residual radioactivity to a level that permits

( 1) release of the property for unrestricted use and termination of the license, or (2) release of the property under restricted conditions and termination of the license"

( emphasis added).

The following recommendation will avoid potential premature obsolescence of the policy statement, while maintaining its intended careful consideration of proposed early withdrawals to ensure they support decommissioning of the site. Replace all references to release for unrestricted use of the site with "decommissioning of the site consistent with the definition in 10 CFR Part 50.2" or similar language.

The draft policy states the following: "If a licensee of a permanently shutdown facility spends decommissioning trust funds on legitimate decommissioning activities, the timing of these expenditures, either before or after NRC approves a licensee's decommissioning plan, should not adversely affect public health and safety, provided adequate funds are maintained to restore the facility to a safe storage configuration in case decommissioning activities are interrupted unexpectedly" ( emphasis added.) It is appropriate to assure the availability of funds to not only complete activities initiated prior to decommissioning plan approval by the NRC, but also to place the facility in a safe storage configuration at any time during the preparation for or completion of the decommissioning activities. This additional assurance should be applied for activities implemented before NRC approval of a decommissioning plan. After NRC approval of a decommissioning plan, implementation of the plan's decommissioning option will ensure protection of public health and safety. Maintaining a viable SAFSTOR option beyond

Mr. Samuel J. Chilk April 19, 1994 Page 3 plan approval should not be required for cases where another option has been approved byNRC.

Criterion 4 (59 Fed. Reg. 5218) states that licensees can undertake decommissioning activities that do not result in any of the following: "(a) Foreclosure of the release of the site for possible unrestricted use, (b) significantly increase decommissioning costs, ( c) cause any significant environmental impact not previously reviewed, or (d) violate the terms of the licensee's existing license (e.g., OL, POL, or OL with confirmatory shutdown order) or 10 CFR 50.59 as applied to the existing license."

Criterion 4 should be deleted from the draft policy statement since it is redundant. Items (a) and (b) are adequately provided in Criteria 1 and 3. Items (c) and (d) must be met prior to initiating any activity to ensure that implementation will not violate the terms of the license, and are fundamental to both power operations and decommissioning activities. Licensees maintain programs and procedures to assure that the considerations implicit in these items are reviewed prior to initiating any decommissioning activities.

We support NRC's approach to the Ancillary Issue (59 Fed. Reg. 5218) to enable licensees to informally withdraw funds in order to develop decommissioning plans and for other administrative expenses prior to NRC approval of the final decommissioning plan. We believe the Ancillary Issue should apply to both operating plants and plants preparing for decommissioning. The draft policy Ancillary Issue should be expanded to include a number of expenses that are paid out of decommissioning trusts by operating plants well in advance of the decommissioning plan. These expenses include, but are not limited to, trust fees, investment manager fees, income taxes and periodic site specific studies. These expenses are either ongoing costs of external trust funds or are planning expenses to determine the level of funding necessary for nuclear decommissioning.

Withdrawals for such expenses should be allowed without requiring the licensee to document and justify these withdrawals. This will avoid needless administrative burden on utilities without corresponding benefit.

The draft policy statement states in footnote number two (59 Fed. Reg. 5216) that, "This policy statement does not apply to licensees with operating nuclear reactors. The staff is separately evaluating the issue of whether and under what circumstances the NRC should allow licensees of operating plants to withdraw decommissioning trust funds." It may be neither cost/effective nor in the best interest of the rate payer to wait until the end of plant life to dismantle and dispose of structures and equipment no longer being used.

The licensee should have the option to use decommissioning funds to complete these activities during plant operation. If the licensee is required to wait until the end of life to remove them during decommissioning the same funds would ultimately be used.

However, the costs to perform the same activity could escalate considerably due to increased labor rates and future disposal costs. Since this is not ~ health and safety issue

Mr. Samuel J. Chilk April 19, 1994 Page4 and the activity meets the intent of maintaining decommissioning funds for decommissioning purposes, the licensee should be allowed to use these funds for this type of activity.

The industly anticipates an opportunity to review the proposed policy statement on this separate issue during the public comment period.

If there are any questions regarding the comments provided in this letter, please contact Alan Nelson, John Schmitt, or me. We are available to meet with the NRC and discuss the issue further if desired.

TET/APN:slr Sincerely, cif~Ti!J Vice President and D

• ector Operations, Management and Support Services

Jonathan M Block, Attorney TO:

S. Chilk, U.S. NRC c/o J.E. Taylor, 301-504-2162

EDO, 04/16/1994 11:19:08 PM P.l DOCKET NUMBER PR 5 0 PROPOSED RULE..:..:.:.-.....,.;:=

u. s. NRC {_sq FI<. 5:Ll 6)

OJ FROM:

Jon Block, Attorney at Law RFD 2 Box 1370 Putney, VT 05346-9536 DATE:

04/16/1994

-ber of Pages:

1 Message:

Please provide the following fax before April 19th to Secretary Chilk to convey all appropriate parties re: comment on draft policy statement on use of decommissioning trust funds before decommissioning plan approval --SP-94-024.

Thank you for your assistance in this matter.

Jacsimi{e Cover Sheet MAY 1 0 19941 Acknowledged by card... -"-'"".. "'~

Jonathan M Block, Attorney 04/16/1994 11:37:26 PM P.l FROM:

TO:

RE:

J. Block, Attorney at Law SECRETARY CHILK, Washington, D.C.

U.S. Nuclear Regulatory Commission 20555 BY FAX 3015042162 USE OF DECOMMISSIONING FUNDS PRIOR TO APPROVAL OF DECOMMISSIONING PLAN, COMMENT ON PROPOSED RULE DRAFT POLICY STATEMENT SP-94-024 WE OPPOSE THE RELEASE OF DECOMMISSIONING FUNDS PRIOR TO AN NRC ENVIRONMENTAL ASSESSMENT OF THE CHOSEN DECOMMISSIONING ALTERNATIVE.

EXISTING RULES IN TITLE TEN OF THE CODE OF FEDERAL REGULATIONS AND THE STATEMENT OF CONSIDERATION PUBLISHED IN THE COURSE OF DUE - PROCESS PROMULGATION OF THE RULES STATED THAT THE UTILITY MAY ONLY CONDUCT LIMITED ACTIVITES PRIOR TO APPROVAL OF A DECOMMISSIONING PLAN.

PARTICULARLY, THE LICENSEE MAY PROCEED WITH SOME ACTIVITIES SUCH AS ONTAMINATION, MINOR COMPONENT DISASSEMBLY, AND PMENT AND STORAGE OF SPENT FUEL.

THIS SHOULD NOT BE QUALIFIED IN ANY WAY.

IT IS SUFFICIENT PROTECTION FOR WORKERS AND THE PUBLIC.

UNTIL NRC DOES AN ENVIRONMENTAL ASSESSMENT OF THE DECOMMISSIONING ALTERNATIVE, THERE IS NO NEED FOR ANY OTHER ACTIVITY TO TAKE PLACE.

REASONABLE INTERPRETATIONS OF THE RULES DO NOT REQUIRE EXPANSION OF 10 CFR 50.59 AND/OR ACTIVITIES PERMITTED UNDER A PARTICULAR LICENSE AND/OR ACTIVITIES PERMITTED UNDER STAFF GUIDANCE.

NO DECOMMISSIONING ACTIVITIES SHOULD TAKE PLACE PRIOR TO HAVING AN APPROVED DECOMMISSION PLAN IN PLACE, INCLUDING AN NRC SITE-SPECIFIC ENVIRONMENTAL ASSESSMENT OF THE PLAN, AND, AS NEEDED, A SUPPLEMENTAL ENVIRONMENTAL IMPACT STATEMENT.

DECOMMISSIONING FUNDS SHOULD BE USED UNTIL THERE IS AN R

ROVED PLAN IN PLACE.

Jonathan M Block, Attorney 04/16/1994 11:22:46 PM P.1 FROM:

J. Block, Attorney at Law TO:

SECRETARY CHILK, U.S. Nuclear Regulatory Commission Washington, D.C.

20555 BY FAX 3015042162 RE:

USE OF DECOMMISSIONING FUNDS PRIOR TO APPROVAL OF DECOMMISSIONING PLAN, COMMENT ON PROPOSED RULE DRAFT POLICY STATEMENT SP 024 WE OPPOSE THE RELEASE OF DECOMMISSIONING FUNDS PRIOR TO AN NRC ENVIRONMENTAL ASSESSMENT OF THE CHOSEN DECOMMISSIONING ALTERNATIVE.

EXISTING RULES IN TITLE TEN OF THE CODE OF FEDERAL REGULATIONS AND THE STATEMENT OF CONSIDERATION PUBLISHED IN THE COURSE OF DUE-PROCESS PROMULGATION OF THE RULES STATED THAT THE UTILITY MAY ONLY CONDUCT LIMITED ACTIVITES PRIOR TO APPROVAL OF A DECOMMISSIONING PLAN.

THE LICENSEE MAY PROCEED WITH SOME ACTIVITIES ONTAMINATION, MINOR COMPONENT DISASSEMBLY, PMENT AND STORAGE OF SPENT FUEL.

PARTICULARLY, SUCH AS AND THIS SHOULD NOT BE QUALIFIED IN ANY WAY.

IT IS SUFFICIENT PROTECTION FOR WORKERS AND THE PUBLIC.

UNTIL NRC DOES AN ENVIRONMENTAL ASSESSMENT OF THE DECOMMISSIONING ALTERNATIVE, THERE IS NO NEED FOR ANY OTHER ACTIVITY TO TAKE PLACE.

REASONABLE INTERPRETATIONS OF THE RULES DO NOT REQUIRE EXPANSION OF 10 CFR 50.59 AND/OR ACTIVITIES PERMITTED UNDER A PARTICULAR LICENSE AND/OR ACTIVITIES PERMITTED UNDER STAFF GUIDANCE.

NO DECOMMISSIONING ACTIVITIES SHOULD TAKE PLACE PRIOR TO HAVING AN APPROVED DECOMMISSION PLAN IN PLACE, INCLUDING AN NRC SITE-SPECIFIC ENVIRONMENTAL ASSESSMENT OF THE PLAN, AND, AS NEEDED, A SUPPLEMENTAL ENVIRONMENTAL IMPACT STATEMENT.

DECOMMISSIONING FUNDS SHOULD BE USED UNTIL THERE IS AN ROVED PLAN IN PLACE.

TEL: -------------------------

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Secretary Chilk

. TNUMBERp r A April 18, 1994 T1 U.S. Nuclear Regulatory Commi "~~"~SEDRULE

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Washington, D.C. 20555

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( rq FR.51-l6)

Re: Use of Decommissioning Funds Prior to Approval of Decommissioning Plan, Comment on Proposed Rule Draft Policy Statement SP-94-024 Dear Secretary Ch1lk We oppose the release of decommissioning funds prior to an NRC environmental assessment of the chosen decoMmissioning alternative.

Existing rules in Title Ten of the Code or Federal Regulations and the statement of Consideration published in the course of due-process promulgation of the rules stated that the utlility may only conduct

, llmited activities prior to approval of a decommissioning plan.

Particularly, the Licensee may proceed with some activities such as decontamination. minor component disassembly, and shipMent and storage of spent fue].

This should not be qualified in any way.

Jt fg suffjcient protection for workers and the public. Until the NRC does an environmental Assesament of the decommissioning alternative, there is no need tor any other activity to take place.

Reasonable interpretations of the rules do not require expansion of 10 CPR 50.59 and/or activities permitted under staff guidance.

No decommissioning activities should take place prior to havine an approved decommissioning plan in place, including an NRC sJte-specific environmental assessment of the plan, and, as needed, a supplemental environmental impact statement.

No decommissioning funds should be used until there is an approved plan in place.

Sincerely, William S. Linnell II Spokesperson and Board Member, Committee for a Safe Energy Future decom$

MAY 1 0 19941 Acknowledged by card... ~

Detroit Edison Douglas R. Gipson Senior Vice President Nuclear Generation Fermi 2 6400 North Dixie Highway Newport, Michigan 48166 (313) 586-5249

• 94 OFFICE OF SECRETARY DOCKETING & SERVICE April 18, 1994 BRANCH NRC-94-0031 Secretary U.S. Nuclear Regulatory Commission Washington, D. C.

20555 Attn:

Docketing and Service Branch

Subject:

NRC Docket No. 50-341 NRC License No. NPF-43 Detroit Edison Comments on NRC Draft Policy Statement Entitled "Use of Decommissioning Trust Funds Before Decommissioning Plan Approval; Draft Policy Statement" (59 FR 5216, February 3, 1994)

The Detroit Edison Company (Edison) is pleased to submit these comments in response to the NRC's draft policy statement entitled "Use of Decommissioning Trust Funds Before Decommissioning Plan Approval; Draft Policy Statement".

Edison possesses an undivided qualifying interest in Fermi 1 and Fermi 2 located in Frenchtown Township, Monroe County, Michigan.

Fermi 1 was a sodium cooled, fast breeder reactor that has been shut down since 1972.

Edison intends to retain Fermi 1 in safe storage (SASTOR) status until the Fermi 2 unit is shut down and decommissioned.

Fermi 2 is a nuclear generating unit (BWR) having a nominal capacity rating of 1,139 megawatts.

This draft policy statement presents the criteria the NRC proposes to follow in addressing requests from power reactor licensees that have permanently shut down their power reactors to make withdrawals from external decommissioning funds before the NRC approves their decommissioning plans.

Edison is requesting that the NRC expand its policy statement to include withdrawals of funds prior to permanent shut down or prior to the shutdown planning stage to be used for the purpose of disposal of low level radioactive waste generated during plant operation if the State Regulatory Commission or the FERC has authorized contributions to decommissioning trust funds specifically for this purpose and these funds are kept in a separate account.

Currently, all nuclear plants in Michigan must store their low level radioactive waste onsite.

Eventually, the lack of storage will require construction of additional storage facilities.

By order of the Michigan Public Service Commission, Edison is contributing funds to its external trusts for the explicit purpose of low level

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Secretary, USNRC April 18, 1994 NRC-94-0031 Page 2 radioactive waste disposal.

These funds are accounted for separately from other "traditional" decommissioning costs.

Low level radioactive waste disposal should be explicitly permitted by the NRC as this disposal is not only an activity that does not "significantly increase decommissioning costs," it could actually decrease decommissioning costs by potentially leaving fewer structures to be decommissioned.

Additionally, less radioactive waste would require disposal at the time of decommissioning if operating waste was disposed of during plant operation.

However, it is appropriate to consider cost of disposal of low level waste generated during operation as decommissioning costs when the waste cannot be disposed of during plant operation, but will need to be removed from the facility before the site can be released for unrestricted use, a condition required by the NRC definition of decommissioning.

If a site were to become available, Edison's intention is to ship its accumulated low level radioactive waste offsite as quickly as possible. Lack of flexibility could actually increase the cost and time needed for decommissioning.

Edison requests that disposal of low level radioactive waste be explicitly mentioned as a legitimate use of decommissioning funds by the NRC in their policy statement without the need for a 60-day waiting period.

The policy statement states that "A licensee that has not yet completed its (Section) 50.82 decommissioning plan would have to provide other documentation to demonstrate that its proposed activities were clearly decommissioning activities".

Edison believes that low level radioactive waste disposal is clearly a decommissioning activity because it reduces residual radioactivity at the site and, therefore, no special review should be needed at the time of disposal.

Other than the comments on availability of decommissioning trust funds for disposal of low level radioactive waste generated during operation and the related limitation on the use of decommissioning funds to permanently shut down reactors or for costs related to the decommissioning plan, Edison feels that the remaining discussion by the NRC Staff is reasonable and in the public interest.

If you have any questions, please contact Ms. Evelyn F. Madsen at (313) 586-4205.

cc:

T. G. Colburn J.B. Martin M. P. Phillips K. R. Riemer Sincerely,

07/02/89 07:44 5178357954 AADE COMMUNICATIONS PAGE 02 DOCKET NUMBER PR PROPOSED RULE SO

{sqFRs-216_)

Memo to S. Chilk, Secre1ary U.S. Nuclear Regulatory Commission Washington, D. C. 20555 From: Mary P. Sinclair Co-chair, Don't Waste Michigan 5711 Summerset Dr.

Midland, Ml 48640 Date: Apri 1 1 R, 1994 DOCKETED USNRC

• 94 APR 18 P 4 : l O OFFICE OF SECRETARY DOCKETING & SERVICE BRANCH Re: Comment on proposed rule draft policy sta.temont SP-94-024, Use of Decommissioning Funds Prior to Approval of Decommissioning PJan No decommissioning activities should take place before the NRC has approved a decommissioning plan, including a site-specific environmental assessment of the plan.

We oppose the release of decommissioning funds prlor to an Environmental assessment of the chosen decommissionina alternative.

Existing rules in Title Ten of the Code of Federal Regulations state that the utility m*y uuly cuuducl limited acth*itics prior to approval of a decommissioning plan.

Until the NRC does an environmental assessment of the decommissioning plan, there is no need for any other activity to take place.

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Bea Cevasco, Director Michael Collins, Director Kate Harris, Director CITIZENS AWARENESS NETWORK Randy Laikind, Director Amy Reiser, Director

,l4~Schaktman, Director Ted Harrison, Director RRl Box 83 Shelburne Falls MA 01370 Deborah Katz, President OQCJ(t!.

n (5qfR S"J-16) Feb. J [7590-01] NUCLEAR REGULATORY COMMISSION USE OF DECOMMISSIONING TRUST FUNDS BEFORE DECOMMISSIONING PLAN APPROVAL DRAFT POLICY STATEMENT AGENCY: Nuclear Regulatory Commission. ACTION: Draft policy statement.

SUMMARY

This draft policy statement presents the criteria the U.S. Nuclear Regulatory Commission (NRC} proposes to follow in addressing requests from power reactor licensees that have permanently shut down their power reactors to make withdrawals from external decommissioning sinking funds to pay for the removal of components and other decommissioning-related activities before the NRC approves these licensees' decommissioning plans submitted pursuant to 10 CFR 50.82. This draft policy statement also covers de minimis withdrawals from external decommissioning sinking funds to pay for developing the 10 CFR 50.82 decommissioning plan and for other post-shutdown administrative expenses.

2 1-./ / I q / tf '-1 DATE:

Comment period expires [date 75 days after publication in the Federal Register].

Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration.only for comments received on or before this date.

ADDRESSES:

Mail written comments to: Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555, Attention: Docketing and Service Branch.

Deliver comments to:

11555 Rockville Pike, Rockville, Maryland, between 7:45 am and 4:15 pm on Federal workdays.

FOR FURTHER INFORMATION CONTACT:

Robert Wood, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555, telephone:

(301) 504-1255.

SUPPLEMENTARY INFORMATION:

Background

The NRC decommissioning regulations in 10 CFR 50.75 and 50.82 are silent on whether approval of the decommissioning plan must precede withdrawals from the decommissioning trust fund.

Appendix B.3.1, p. B-12 of Regulatory Guide 1.159, "Assuring the Availability of Funds for Decommissioning Nuclear Reactors," contains sample trust language that indicates that the fund trustee should only release funds upon certification "that decommissioning is proceeding pursuant to an NRC-approved plan." However, not all licensees have

3 used this sample language.

When the NRC evaluated trust funds as part of the initial certification required by 10 CFR 50.75(b) and submitted in July 1990, it found trusts acceptable if, along with other provisions, they conta~ned language limiting trust fund withdrawals to legitimate decommissioning purposes.

Thus, many licensees have acceptable trusts that nevertheless do not expressly limit the withdrawal of trust funds before NRC approves a decommissioning plan.

Because of a request by Yankee Atomic Electric Company (YAEC) 1 and in anticipation of future requests by other power reactor licensees of permanently shutdown facilities, the Commission directed the NRC staff to provide an analysis and recommendation to the Commission on permitting licensees to use their decommissioning funds for decommissioning activities prior to approval of the decommissioning plans. The Commission approved the criteria developed by the staff to evaluate early withdrawals from external decommissioning sinking funds and directed the staff to publish the details of this policy in the Federal Register for information and public comment. 2 This proposed policy and implementing criteria are provided below:

1 In a letter to the Commission dated November 25, 1992, YAEC stated its intention to use its decommissioning trust funds to remove reactor core internals, steam generators and the pressurizer from Yankee-Rowe before the NRC approves YAEC's decommissioning plan. (YAEC plans to submit its decommissioning plan for NRC review in late 1993.) By letter dated April 16, 1993, the NRC did not object to YAEC's proposed use of decommissioning trust funds before NRC approval of the Yankee-Rowe decommissioning plan, using criteria consistent with those discussed in this policy statement.

2This policy statement does not apply to licensees with operating nuclear reactors.

The staff is separately evaluating the issue of whether and under what circumstances the NRC should allow licensees of operating plants to withdraw decommissioning trust funds.

4 Statement of Policy If a licensee of a permanently shutdown facility spends decommissioning trust funds on legitimate decommissioning activities, the timing of these expenditures, either before or after NRC approves a licensee's decommissioning plan, should not adversely affect public health and safety, provided adequate funds are maintained to restore the facility to a safe storage configuration in case decommissioning activities are interrupted unexpectedly.

Consequently, the timing of the NRC review of a licensee's decommissioning plan in relation to withdrawals from trust funds is not as important as the purpose of those withdrawals.

In its decommissioning plan reviews, the NRC evaluates proposed licensee activities in the planned decommissioning process to determine whether the proposed plan adequately ensures protection of public health and safety. The NRC will also assess a licensee's overall decommissioning fund balance in relation to total cost. The NRC review of decommissioning costs is focused on seeing that they fall within a normal range of costs and is not focused on examining the timing, scope, and cost of specific component removal or other decommissioning activities. Therefore, although the NRC believes that it should guard against misuse or waste of decommissioning trust funds by licensees, it is not clear that prior NRC review of the decommissioning plan would identify such misuse or waste unless it resulted in costs far higher than would normally be expected.

The NRC would find it difficult to identify the misuse of funds if a licensee's estimates were within a reasonable range

5 of the costs estimated for similar facilities. Further, the NRC does not supervise or review the actual expenditure of funds during decommissioning and would not have an opportunity to identify serious cost overruns that m~ght jeopardize the adequacy of funding available for remaining decommissioning activities.

However, there appears to be little motivation for utilities to misuse these funds.

Most NRC power reactor licensees are subject to rate regulation by State public utility commissions (PUCs) or the Federal Energy Regulatory Commission (FERC).

Utilities are normally allowed to earn a return on assets, including nuclear plants, once they are determined to be "used and useful" and placed in the rate base.

Decommissioning costs, however, are normally treated by PUCs and FERC as non-rate-base expenses.

They are passed on to ratepayers as expenses, but the utility and its stockholders do not earn a return on these collections. Consequently, there is little financial incentive for a licensee to "pad" or dissipate collected decommissioning funds to increase the rate base, because the stockholders would not benefit.

Further, PUCs and FERC are unlikely to allow utilities under their jurisdictions to squander funds obtained from ratepayers. Rate regulators hold prudency reviews to determine whether utilities have spent funds properly throughout all aspects of plant operation, from initial planning to final decommissioning.

The NRC expects that PUCs and FERC will continue to exercise their oversight of utilities' expenditures, including those being paid from decommissioning trust funds, throughout the decommissioning process. A utility has an incentive to spend decommissioning funds prudently if it knows

6 that its stockholders will be liable for decommissioning costs in excess of those already collected from ratepayers.

Although NRC approval of the decommissioning plan does not ensure prevention of misuse or waste of decommissioning funds, the NRC believes that withdrawal of funds for decommissioning activities before a decommissioning plan is developed and approved should require NRC review.

This is consistent with Commission guidance which provided that the staff may permit licensees to use their decommissioning funds for the decommissioning permitted above (as the term decommission is defined in 10 CFR 50.2), notwithstanding the fact that their decommissioning plans have not yet been approved by the NRC.

Criteria The criteria and supporting rationale developed to evaluate licensee proposals for early withdrawals from external decommissioning sinking funds are as follows:

1.

The withdrawals are for expenses for legitimate decomissioning activities as defined in 10 CFR 50.2 that would necessarily occur under most reasonable decomissioning scenarios. Section 10 CFR 50.2 defines Hdecommission" as meaning "to remove (as a facility) safely from service and reduce residual radioactivity to a level that permits release of the property for unrestricted use and termination of licensee.H

7 This criterion calls for a licensee to demonstrate that the early withdrawal is for activities that would occur under reasonable decommissioning scenarios and would prevent funds being used for activities that do not reduce -

radioactivity at the site and ultimately permit release of the property for unrestricted use. A licensee that has already prepared its §50.82 decommissioning plan (which must be submitted within 2 years after a permanent cessation of operations) could reference the appropriate part of this plan. A licensee that has not yet completed its §50.82 decommissioning plan would have to provide other documentation to demonstrate that its proposed activities were clearly decommissioning activities.

2.

The expenditures would not reduce the value of the deco11111issioning trust below an amount necessary to place and maintain the licensee's reactor in a safe storage (SAFSTOR) condition if unforeseen conditions or expenses arise.

(For example, if the waste shipments were rejected by the disposal site because of lack of storage space or legal impediments, a licensee would have to show it had the funds to return and store any affected components on site and to store any radioactive components and materials that had remained on site.)

Consistent with the purpose of the decommissioning funding regulations, assurance of availability of funds to safely decommission a facility, and the principle that a preapproval activity does not foreclose the release of the site for possible unrestricted use, this criterion calls for a licensee to show that it can maintain the status quo at a facility and that the proposed activities will not preclude the ultimate unrestricted use of the site. A

8 licensee would have to document the rationale for the minimum amount estimated to be needed to return to a safe storage condition if decontamination or removal activities are interrupted and the components and equipment involved have to be stored safely at the site. Such on site storage after shipment could, in the worst case, require construction of a storage facility. This criterion ensures that decommissioning activities that occur before approval of the §50.82 decommissioning plan do not reduce funds below a level that would ensure continued maintenance of safety at a defueled, shutdown facility until the decommissioning plan is reviewed and approved.

A licensee could satisfy this criterion by demonstrating that it has sufficient funds in either its decommissioning fund or other available funds to maintain the status quo at the facility, that is, maintain safety in the defueled, shutdown condition.

It should be noted that this criterion is also pertinent to the normal, end-of-life decommissioning; licensees are to accommodate the possibility of unforeseen occurrences by providing for contingencies.

(See Regulatory Guide 1.159 at 1.159-10, Item 1.4.4.3. The general guidance of Regulatory Guide 1.159 concerning provisions for "contingencies," however, does not explicitly identify the nature of such contingencies.

The NRC's proposed criterion is more explicit.)

The NRC notes that 10 CFR 50.82(c)(l) requires that, "funds needed to complete decommissioning be placed into an account segregated from licensee assets and outside the licensee's administrative control during the storage or surveillance period, or a surety method or fund statement of intent be maintained in accordance with the criteria of §50.75(e)." Because the definition of decommissioning in 10 CFR 50.2 implicitly includes the costs of

9 placing and maintaining a reactor in safe storage, a licensee should continue to provide assurance of adequate funds for these expenses at all times during the SAFSTOR period. Thus, licensees are required to maintain this assurance both before and after the NRC approves a licensee's §50.82 decommissioning plan.

3.

The withdrawals would not inhibit the ability of the licensee to complete funding of any shortfalls in the decomissioning trust needed to ensure availability of funds to ultimately release the site for unrestricted use.

This criterion encompasses the principle that activities allowed before approval of the decommissioning plan do not significantly increase decommissioning costs. A licensee would be required to document the effect of the withdrawals on the decommissioning funding plan, addressing the current fund balance and collection schedule, and demonstrate that the use of funds before NRC approval of a decommissioning plan for the facility would not impair the licensee's ability to fully fund the plan submitted to the NRC {or, if no plan has been filed, the actions necessary to permit release of the site for unrestricted use). A licensee would, for example, have to show that the decommissioning actions potentially taken out of sequence of any decommissioning plan submitted (or reasonable decommissioning alternatives if no plan has been submitted) would not significantly increase decommissioning costs or impair its ability to obtain the funds necessary to complete decommissioning.

10

4.

Before the NRC approves a deco11111issioning plan, licensees can be allowed to undertake any deco11111issioning activity (as the term adeco11111ission° is defined in 10 CFR 50.2) that does not (a) foreclose the release of the site for possible unrestricted use, (b) significantly increase deco11111issioning costs, (c) cause any significant environmental impact not previously reviewed, or (d) violate the terms of the licensee's existing license (e.g., OL, POL, or OL with confirmatory shutdown order) or 10 CFR 50.59 as applied to the existing license.

This criterion seeks to ensure that funds are only used for those decommissioning activities that would be allowed to proceed before the NRC approves a decommissioning plan.

Items (a) and (b) have already been addressed by this policy statement.

For items (c) and (d), a licensee and the NRC would evaluate the proposed activity to ensure that the activity may proceed under the current license and that the proposed activity will not result in any significant environmental impact not previously reviewed.

As stated above, the NRC may permit licensees to use their decommissioning funds for the decommissioning activities permitted above (as the term "decommission" is defined in 10 CFR 50.2), notwithstanding the fact that their decommissioning plans have not yet been approved by the NRC.

After review of the licensee's proposed activities and fund withdrawal using the above criteria, the NRC would permit the licensee to use decommissioning funds and to undertake the proposed activities by tacitly consenting to the proposed withdrawals by not interposing, within a specified time, an objection to the licensee's proposal.

The NRC would need 60 days to complete an effective

11 review of a licensee's proposal and justification of how the above criteria will be met.

Ancillary Issue In the past, licensees have asked the NRC informally whether they would be able to withdraw funds from their trusts to pay for developing the §50.82 decommissioning plan and for other post-shutdown administrative expenses.

The NRC believes that these withdrawals should be allowed before the NRC approves the final decommissioning plan, provided the licensee meets the following guidelines:

1.

The sum of withdrawals for such purposes should be de minimis, that is, less than $5 million. 3

2.

The decommissioning trust balance would not fall below an amount needed for safe storage.

3In talking informally with several licensees, the NRC understands that most licensees expect to spend from $1 million to $3 million for completing decommissioning plans and for immediate post-shutdown administrative expenses.

The amount of $5 million, therefore, is based on a "best-guess" estimate, but is small enough not to significantly deplete the decommissioning trust.

12

3.

The licensee provided for these costs in its site-specific decommissioning cost estimate and increased its overall trust fund balances accordingly.

Dated at Rockville, Maryland, this 1k day of~,, 1994.

For the Nuclear Regulatory Commission

~i-~

Ja es L. Blaha

(.11:;xecutive Director for Operations