ML24080A070

Decommissioning Trust Fund Annual Report

ML24080A070
Person / Time
Site:	Kewaunee
Issue date:	03/20/2024
From:	Jeffery Lynch EnergySolutions, Kewaunee Solutions
To:	Office of Nuclear Material Safety and Safeguards, Office of Nuclear Reactor Regulation, Document Control Desk
References
KS-2024-006
Download: ML24080A070 (1)

Text

March 20, 2024 KS-2024-006 10 CFR 50.75(f)(1) 10 CFR 50.82(a)(8)

U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, DC 20555-0001 Kewaunee Power Station Facility Operating License No. DPR-43 NRC Docket Nos. 50-305 and 72-64

Subject:

Decommissioning Trust Fund Annual Report In accordance with 10 CFR 50.75(f)(1), and 10 CFR 50.82(a)(8)(v) - (vii), Kewaunee Solutions, Inc, (KS) is submitting the annual status of decommissioning funding, status of funding for managing irradiated fuel, and financial assurance report for Kewaunee Power Station (KPS) as of December 31, 2023. The report is provided in Enclosure 1 to this letter.

The estimates provided in Enclosure 1 using December 31, 2023, trust fund balances, indicate that KPS has met the NRCs funding requirements. Accordingly, KS concludes that no further action is currently required to demonstrate adequate funding assurance for decommissioning.

This letter contains no new regulatory commitments. If you have any questions with respect to the contents of this letter, please contact me at 508-728-1421 or jrlynch@energysolutions.com.

Respectfully, Joseph R. Lynch Regulatory Affairs/Licensing Director (D&D)

EnergySolutions JRL/bed cc:

NRC Regional Administrator - Region III NRC Lead Inspector - Kewaunee Power Station NRC Project Manager - Kewaunee Power Station

Decommissioning Fund Status and Financial Assurance Report - Kewaunee Power Station Joseph R. Lynch Digitally signed by Joseph R. Lynch Date: 2024.03.20 07:20:05 -04'00' Kewaunee Power Station Annual Decommissioning Fund Status and Financial Assurance Report As of December 31, 2023 Page 1 of 3 As required by 10 CFR 50.75(f), and 50.82(a)(8), Kewaunee Solutions, Inc. (KS) reports the following information for Kewaunee Power Station (KPS):

A. Formula Cost Amount per 10 CFR 50.75(c)

KS does not use the calculation in 10 CFR 50.75(c) for any decommissioning cost estimates or evaluations.

B. Current Decommissioning Cost Estimate The required minimum funding assurance amount for KPS, as of December 31, 2023, is based on the site-specific Decommissioning Cost Estimate (DCE) developed in accordance with 10 CFR 50.82(a) and included in the Post-Shutdown Decommissioning Activities Report (PSDAR) Revision 2 (Reference 1). Additional cost information was provided in a recent response to a request for additional information related to the exemption for use of funds from the decommissioning trust fund (DTF) for site restoration activities. (Reference 2).

Additional reporting requirements are documented on Table 1 of this Enclosure. Table 1 provides the KS revised total estimate information as required by 10 CFR 50.82. The revised total estimate to complete decommissioning for the KPS site is $912.0M (in 2024 dollars, net of Department of Energy (DOE) reimbursements) as shown in the cash flow analysis in Table 1 and as described below. Of that total cost estimate, the revised estimate includes the following expenses:

$785.6M for license termination (the cumulative decommissioning expenditures in the amount of 149.6M and the remaining decommissioning estimated cost of 636.0M). The remaining decommissioning estimated cost of $636.0M was a product of inflation to 2024 dollars, supply chain impacts, procurement cost increases, and actual contract costs versus original estimates in the PSDAR.

$85.4M for spent fuel management (the cumulative decommissioning expenditures in the amount of 19.7M and the remaining decommissioning estimated cost of 65.7M)

$41.0M for the decommissioning cost estimate for site restoration. There have been no cumulative site restoration expenditures.

C. Current Decommissioning Fund Balance The KPS Decommissioning Trust Fund (DTF) balance as of December 31, 2023, was

$801.4M. This amount represents the market value of the DTF fund, net of any material current income tax liability on realized gains, interest, dividends, and other income of the trust. The trust fund amount is the total available for decommissioning including costs of license termination, spent fuel management, and site restoration activities. Note that KS Kewaunee Power Station Annual Decommissioning Fund Status and Financial Assurance Report As of December 31, 2023 Page 2 of 3 received exemptions from 10 CFR 50.82(a)(8)(i)(A) to allow the KPS DTF to be used for site irradiated fuel management and site restoration costs (References 3 and 4, respectively).

D. Assumptions Used Regarding Rates of Escalation for Decommissioning Costs, Earnings on Funds, and Other Factors Used in Funding Projections KS has assumed a 2% real rate of return as allowed by 10 CFR 50.75(e)(1)(i).

E. Rates used to Inflate Decommissioning Costs The estimates in the 2021 KPS Revised PSDAR (Reference 1) were provided in 2021 dollars. The estimates provided in Table 1 of this Enclosure have been inflated to 2024 dollars. The Bureau of Labor Statistics (BLS) data provided the basis for the decommissioning cost estimate inflation rate forecast. Decommissioning costs are inflated using a weighted average of BLS indices for Labor, Energy, Consumer Price Index, Materials, and Equipment. For burial inflation factor, KS utilized NUREG-1307, Report on Waste Burial Charges: Changes in Decommissioning Waste Disposal Costs at Low-Level Waste Burial Facilities, Revision 19. KS has used a factor of 1.02125 to calculate the inflation to 2024 dollars.

F. Current ISFSI Decommissioning Cost The current site-specific Independent Spent Fuel Storage Installation (ISFSI) decommissioning cost estimate is $85.4M (2024 dollars, net current projections of DOE reimbursements). The ISFSI estimated costs are based on the estimated costs provided in Reference 1 which were inflated using published inflation indices as previously discussed in Item E.

G. Decommissioning Financial Assurance Financial assurance for decommissioning is provided by the prepayment method, coupled with an external trust fund, in accordance with 10 CFR 50.75(e)(1)(i) and 10 CFR 72.30(e)(1) as approved by NRC in their approval of the license transfer to KS.

H. Changes in the Decommissioning Funding Plan Trust Agreement There are no changes to the Decommissioning Funding Plan Trust Agreement.

Refer to Tables 1 and 2 of this Enclosure for additional required reporting data. Table 2 provides a cash flow analysis using the revised decommissioning cost estimates developed by KS. This cash flow analysis demonstrates that the KPS decommissioning trust fund is sufficiently funded to cover costs as estimated for the license termination, Kewaunee Power Station Annual Decommissioning Fund Status and Financial Assurance Report As of December 31, 2023 Page 3 of 3 spent fuel management and site restoration activities necessary to complete safe and compliant decommissioning of the site.

References

1. Letter ES-2021-002 from Gerard van Noordennen, EnergySolutions to Document Control Desk, USNRC, Notification of Amended Post-Shutdown Decommissioning Activities Report (Revision 2) for Kewaunee Power Station, dated May 13, 2021 (ML21145A083)

2. Letter KS-2023-020 from Amy C. Hazelhoff, EnergySolutions to Document Control Desk, USNRC, Response to Request for Additional Information (RAI) Application for Kewaunee Solutions (KS) Site Restoration Activities (EPID NO. L-2023-LLE-0008),

dated October 5, 2023 (ML23278A100)

3. Letter from Christopher Gratton, USNRC, to David A. Heacock, Dominion Energy Kewaunee, Inc, Kewaunee Power Station - Exemptions from the Requirements of 10 CFR Part 50, Section 50.82(a)(8)(i)(A) and Section 50.75(h)(1)(iv) (TAC No. MF1438),

dated May 21, 2014 (ML13337A287)

4. Letter from Karl Sturzebecher, USNRC, to Amy C. Hazelhoff, EnergySolutions, Kewaunee Power Station - Exemption to Allow Use of Funds from the Nuclear Decommissioning Trust for Site Restoration and to Remove a Notification Requirement for the Disbursal of Funds from the Decommissioning Trust (EPID No. L-2023-LLE-0008), dated January 26, 2024 (ML23339A133)

Page 1 of 1 Year Type of Trust Comments 2023 Decommissioning Trust $ 801.4 As of 12/31/2023; net of tax liabilities on realized gains Year License Termination Spent Fuel Mgmt Site Restoration Total Comments 2022

$ 68.0 $ 9.2 0.00 $ 77.2 2022 costs in as-spent dollars 2023

$ 81.6 $ 10.5 0.00 $ 92.1 2023 costs in as-spent dollars Total to Date

$ 149.6 $ 19.7 0.00 $ 169.3 As-Spent Dollars Year License Termination Spent Fuel Mgmt Site Restoration Total Comments 2023 Est.

$ 66.6 $ 10.3 $ 1.9 $ 78.8 Estimate in 2023 Dollars 2023 Actuals

$ 81.6 $ 10.5 0.00 $ 92.1 Inflation and cost escalation higher than originally anticipated.

Additionally, some work was accelerated into 2023 from later years.

Year License Termination Spent Fuel Mgmt Site Restoration Total Comments 2023

$ 636.0 $ 65.7 $ 41.0 $ 742.7 Estimate in 2024 Dollars. Columns may not add due to rounding.

No need for additional financial assurance.

Spent Fuel Mgmt net of DOE reimbursements.

Decommissioning Criteria Upon Which the Estimate is Based 10 CFR 50.75(f)(1) and 10 CFR 50.82(a)(8)(v)(B)

DECON Any Modification to Method of Providing Financial Assurance 10 CFR 50.75(f)(1) and 10 CFR 50.82(a)(8)(v)(C)

No modification to method of providing financial assurance.

Any Material Changes to Trust Agreement Since Previous Report 10 CFR 50.75(f)(1) and 10 CFR 50.82(a)(8)(v)(D)

No material changes to trust agreement since previous report.

Need for Additional Financial Assurance 10 CFR 50.75(f)(1) and 10 CFR 50.82(a)(8)(v)(C) / (vii)(C)

ENCLOSURE 1 Table 1 Kewaunee Solutions, Inc - Kewaunee Power Station Summary Information as of December 31, 2023 All values in Millions of Dollars Remaining Decommissioning Estimated Cost 10 CFR 50.82(a)(8)(v)(B)-(vii)(B)

Decommissioning Trust Fund Balance 10 CFR 50.75(f)(1) and 10 CFR 50.82(a)(8)(v)(A) / (vii)(A)

Fund Balance (2023 $)

Other Contracts or Financial Assurance Methods Being Relied Upon 10 CFR 50.75(f)(1) and 10 CFR 50.82(a)(8)(v)(A)

None are being relied upon. Parent company support agreement and performance bond remain in place from the closing as required pursuant to Section 5.14 of the Share Purchase Agreement dated May 6, 2021.

ES Decommissioning Expenditures 10 CFR 50.82(a)(8)(v)(A) Since License Transfer Prior Year Expenditures Variance to Total ES Estimated Cost 10 CFR 50.82(a)(8)(v)(B)

Page 1 of 1 1 NDT earnings reflect an assumed 2% Real Rate of Return (RRR) Net of Taxes on realized gains 2 2024 Beginning of Year NDT Balance is net of realized tax liabilities 3 Columns may not add due to rounding 4 Withdrawals includes estimated payments for taxes on unrealized gains and any estimated deposits into the NDT fund 5 Spent Fuel Management Cost negative years include DOE reimbursements in excess of spend due to timing of reimbursements Year License Termination Cost Spent Fuel Management Cost(5)

Site Restoration Cost Total Costs Beginning of Year NDT Balance Withdrawals(4)

NDT Earnings(1)

Year Ending NDT Balance(2)(3) 2024 132.1 11.4 10.0 153.5 801.4 (153.5) 14.5 662.4 2025 89.1 10.4 7.8 107.4 662.4 (107.4) 12.0 567.1 2026 109.4 10.5 3.8 123.7 567.1 (123.7) 9.6 453.0 2027 106.9 10.6 4.5 121.9 453.0 (135.5) 6.9 324.5 2028 81.0 10.7 4.5 96.2 324.5 (116.7) 4.5 212.2 2029 70.4 10.8 5.1 86.3 212.2 (108.1) 2.4 106.5 2030 39.8 1.1 4.1 44.9 106.5 (63.3) 0.9 44.1 2031 7.2 (1.1) 1.3 7.4 44.1 (24.0) 0.4 20.5 2032 0.0 (0.2) 0.0 (0.2) 20.5 (4.6) 0.3 16.3 2033 0.0 (0.1) 0.0 (0.1) 16.3 0.1 0.3 16.8 2034 0.0 (0.1) 0.0 (0.1) 16.8 0.1 0.3 17.2 2035 0.0 (0.1) 0.0 (0.1) 17.2 0.1 0.3 17.7 2036 0.0 (0.1) 0.0 (0.1) 17.7 0.1 0.4 18.1 2037 0.0 (0.1) 0.0 (0.1) 18.1 0.1 0.4 18.6 2038 0.0 (0.1) 0.0 (0.1) 18.6 0.1 0.4 19.1 2039 0.0 (0.1) 0.0 (0.1) 19.1 0.1 0.4 19.6 2040 0.0 (0.1) 0.0 (0.1) 19.6 0.1 0.4 20.1 2041 0.0 (0.1) 0.0 (0.1) 20.1 0.1 0.4 20.7 2042 0.0 (0.1) 0.0 (0.1) 20.7 0.1 0.4 21.2 2043 0.0 (0.1) 0.0 (0.1) 21.2 0.1 0.4 21.7 2044 0.0 (0.1) 0.0 (0.1) 21.7 0.1 0.4 22.3 2045 0.0 (0.1) 0.0 (0.1) 22.3 0.1 0.4 22.9 2046 0.0 (0.1) 0.0 (0.1) 22.9 0.1 0.5 23.4 2047 0.0 (0.1) 0.0 (0.1) 23.4 0.1 0.5 24.0 2048 0.0 (0.1) 0.0 (0.1) 24.0 0.1 0.5 24.6 2049 0.0 (0.1) 0.0 (0.1) 24.6 0.1 0.5 25.2 2050 0.0 2.9 0.0 2.9 25.2 (2.9) 0.5 22.8 2051 0.0 3.2 0.0 3.2 22.8 (3.2) 0.4 20.0 2052 0.0 4.4 0.0 4.4 20.0 (4.4) 0.4 16.0 2053 0.0 2.4 0.0 2.4 16.0 (2.4) 0.3 13.8 2054 0.0 (2.5) 0.0 (2.5) 13.8 2.5 0.3 16.6 2055 0.0 (6.8) 0.0 (6.8) 16.6 6.8 0.4 23.8 Total 636.0 65.7 41.0 742.7 (838.3) 60.7 ENCLOSURE 1 Table 2 Kewaunee Power Station - DECON Method Annual Cash Flow in Millions (2024 Dollars )