ML24345A256
| ML24345A256 | |
| Person / Time | |
|---|---|
| Site: | 07007004 |
| Issue date: | 12/31/2024 |
| From: | Yawar Faraz, Steve Mccarthy NRC/NMSS/DFM/FFLB |
| To: | American Centrifuge Operating |
| Shared Package | |
| ML24345A251 | List: |
| References | |
| EPID L-2024-LRM-0078 | |
| Download: ML24345A256 (1) | |
Text
OFFICIAL USE ONLYSECURITY-RELATED INFORMATION OFFICIAL USE ONLYSECURITY-RELATED INFORMATION SAFETY EVALUATION REPORT DOCKET NO.:
70-7004 LICENSE NO.:
SNM-2011 LICENSEE:
AMERICAN CENTRIFUGE OPERATING, LLC
SUBJECT:
EXTENSION OF THE NUCLEAR REGULATORY COMMISSIONS AUTHORIZATION FOR THE AMERICAN CENTRIFUGE OPERATINGS HIGH ASSAY LOW-ENRICHED URANIUM PROGRAM
1.0 BACKGROUND
This Safety Evaluation Report (SER) documents the U.S. Nuclear Regulatory Commission (NRC) staffs review of American Centrifuge Operating, LLCs (ACOs) license amendment request (LAR) dated September 12, 2024, for the American Centrifuge Plant (ACP) located in Piketon, Ohio (Agencywide Documents Access and Management System [ADAMS] Accession No. ML24262A084) and supplemented by letters dated November 7, 2024 (ML24324A321) and November 21, 2024 (ML24331A050).
The ACP license was issued in 2007 under Title 10 of the Code of Federal Regulations (10 CFR), Parts 30, 40 and 70 for a period of 30 years (ML070400284). ACO initially submitted an amendment request seeking authorization for the High Assay Low-Enriched Uranium (HALEU) program under its ACP Materials License SNM-2011 between December 2019 and June 2020 (ML19352G024, ML20125A103, ML20125A108, ML20125A116, ML20125A105, ML20139A100, ML20139A098). The NRC staff completed its reviews of these submittals and approved the HALEU demonstration program on June 11, 2021 (ML21138A827). The June 2021 amendment authorized possession of licensed material for the purpose of demonstrating production of up to [REDACTED] of HALEU (uranium). ACOs License Condition (LC) 15 was amended to authorize the HALEU demonstration cascade operations until expiration of the U.S. Department of Energy (DOE) HALEU demonstration contract through May 31, 2022 (ML21138A828).
On September 9, 2021, ACO had submitted Amendment 2, Appendix 1 of the Gas Centrifuge Enrichment Plant (GCEP) lease agreement that extended the duration of ACOs lease for the DOEs Piketon facility to December 31, 2025 (ML22123A147 Non-Public). The public version of the DOE-ACO lease agreement is available (see ML22123A143).
On April 25, 2022, DOE extended the DOE-ACO contract through November 30, 2022, adding provisions for an increased cost-sharing arrangement and indemnifying ACOs decommissioning financial assurance and nuclear liability for the HALEU demonstration program (ML22123A143). On April 28, 2022, ACO requested an extension of the NRCs authorization for the HALEU program through November 30, 2022 (ML22123A143). By letter dated August 11, 2022 (ML22208A057), the NRC staff approved the extension of the HALEU program authorization until November 30, 2022 supported by an SER (ML22216A220). ACOs LC 15 was amended to authorize the HALEU demonstration cascade operations until expiration of DOEs HALEU demonstration contract through November 30, 2022 (ML22208060).
On November 30, 2022, ACO requested an extension of the NRCs authorization for the HALEU program from November 30, 2022 (ML22340A461) through December 31, 2024, or
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OFFICIAL USE ONLYSECURITY-RELATED INFORMATION until production of the licensed amount of HALEU is reached, whichever comes first. The NRC granted the extension of the HALEU authorization on March 30, 2023 (ML23083B966).
The NRC staff accepted ACOs current LAR (ML24262A084) for detailed technical review by letter dated October 21, 2024 (ML24298A160). The LAR requested an extension of the NRCs authorization under the ACP Materials License SNM-2011 for the HALEU program through June 30, 2025, or until production of [REDACTED] uranium of HALEU is reached, whichever comes first. On November 4, 2024, DOE and ACO signed an extension to the contract for the HALEU program, which ACO submitted to the NRC on November 7, 2024, as a supplement to the LAR (ML24324A321). The modified contract continues to indemnify ACOs financial qualifications, decommissioning financial assurance, and nuclear liability for the Phase 2 of the HALEU program through June 30, 2025. On November 21, 2024, ACO submitted a request for a new LC (ML24331A050).
(The LAR and its supplements requested (1) removal of the expiration date of the DOE-ACO contract1 for the HALEU program from LC 15, and (2) inclusion of the new LC 31, that requires ACO to provide prior notification to the NRC about anticipated contractual changes that are material to the ACP license SNM-2011.)
The NRC staff undertook a financial analysis of the updated contract and lease agreement between DOE and ACO, which supplemented the LAR. The NRC staffs financial analysis is presented in Sections 3.0, and 4.0 of this SER. The NRC staff also reviewed ACOs proposed removal of the contract expiration date from LC 15. In addition, the staff reviewed ACOs proposed LC to require that NRC be provided prior notification of any contract changes that are material to the license (ML24331A050). The staffs reviews of the removal of the expiration date in LC 15 and the new proposed LC are presented in Section 5.0.
2.0 REGULATORY EVALUATION
Financial Qualifications, Decommissioning Financial Assurance, and Nuclear Liability Insurance Regulatory Requirements The NRCs regulations at 10 CFR 70.35 state that in considering an amendment to a license the Commission will apply the criteria in 10 CFR 70.23. For this reason, ACO is required by 10 CFR 70.23(a)(5) to demonstrate financial qualifications to engage in the proposed activities. Under 10 CFR 70.25(a)(1), each applicant for a specific license for a uranium enrichment facility must submit either a decommissioning funding plan as described in paragraph (e) of that section or submit a certification of financial assurance in the amount prescribed in paragraph (d) of that section. Under 10 CFR 70.25(e), the funding plan must include a cost estimate of all decommissioning activities and a financial instrument that satisfies the requirements in paragraph (f) of that section. The regulations in 10 CFR 70.25(f)(5), in turn, provide that financial assurance for decommissioning funding may be provided when a governmental entity is assuming custody and ownership of a site, an arrangement that is deemed acceptable by such governmental entity. The NRCs regulations at 10 CFR 140.13b require licensees for uranium enrichment facilities to provide and maintain nuclear liability insurance and 10 CFR 140.14(a)(3) permits the use of types of financial protection the Commission may approve.
1 The HALEU Demonstration Contract Number 89243223CNE000030, Modification #P00013 was executed on November 4, 2024, and was forwarded to the NRC on November 7, 2024 (ML24324A321).
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OFFICIAL USE ONLYSECURITY-RELATED INFORMATION NRC Guidance The NRC staff evaluated the applicants financial qualifications, and DOEs indemnification of ACOs decommissioning financial assurance and nuclear liability using the following NRC guidance document:
NUREG 1520 - Standard Review Plan for Fuel Cycle Facilities License Applications, Revision 2, June 2015.
3.0 FINANCIAL QUALIFICATIONS AND DECOMMISSIONING FUNDING The NRC staff most recently reviewed ACOs financial qualifications for the production of HALEU through December 31, 2024, and found ACO financially qualified to continue its HALEU enrichment licensed activities at the ACP through December 31, 2024 (ML23083B961). In conducting the review of the current LAR, the NRC staff examined ACOs current contractual arrangements with the DOE to determine whether changes had occurred that would change the NRCs finding.
Amendment 3, Appendix 1 of the GCEP lease agreement was signed on November 30, 2022. By letter dated December 8, 2022, ACO submitted Amendment 3 to Appendix 1 to the GCEP lease agreement and HALEU contract (ML22353A529). The Lease Agreement includes language relevant to DOEs indemnification of decommissioning funding and nuclear liability insurance:
The Department hereby assumes all liabilities for the decontamination and decommissioning of the facilities and equipment installed and any work performed, under the HALEU Ops Contract with the Department including any materials or environmental hazards on the site.
No financial assurance for any liability or lease turnover conditions shall be required from the Corporation or Sublessee.
It is noted that the Lease Agreement also includes the following statement:
- 5. If the Department exercises its option(s) to extend the term of the HALEU Ops Contract beyond the completion of Phase 2 of the HALEU Ops Contract, the expiration of the GCEP Lease term shall extend to one calendar year beyond the last day of the applicable HALEU Ops Contract option period.2 LC 17 of SNM-20011 requires ACO to provide annual updates to the decommissioning funding plan cost estimates up to full capacity operations for the commercial ACP (ML24262A084). Amendment 3 of Appendix 1 to the GCEP lease agreement provides that DOE assumes all liability for the decontamination and decommissioning of such facilities and equipment installed, and any work performed, under the HALEU contract with the DOE including any materials or environmental hazards on the site. DOE accepts full responsibility for the decommissioning of all existing equipment and materials under the GCEP lease agreement through December 31, 2025. DOEs indemnification of decommissioning includes the dispositioning of any depleted UF6 tails generated from the HALEU cascade. For these reasons, the NRC staff determined that ACO does not need 2 The GCEP lease agreement for ACP facility provides that if the DOE-ACO contract is extended beyond the completion of Phase 2 of the HALEU Ops Contract (the DOE-ACO contract), the lease agreement would expire on December 31, 2026. In addition, the DOEs assumption of all liability for the decontamination and decommissioning would continue. Operations of the HALEU program would be subject to the duration of the extended contract and any other modifications.
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to revise and submit a decommissioning funding plan at this time and LC 17 is unchanged.
LC 16 requires ACO to provide copies of proposed financial assurance instruments to the NRC for review at least 6 months prior to the planned date of obtaining licensed material (ML24262A084). DOE accepts full responsibility for the costs of decommissioning all existing equipment and dispositioning radioactive materials under the GCEP lease agreement until December 31, 2025. DOEs indemnification of all costs includes the dispositioning of any depleted UF6 tails generated from the HALEU cascade. For these reasons, ACO is not required to submit financial assurance instruments for the HALEU contract (ML24324A321) under LC 16 at this time. LC 16 is unchanged and continues to be applicable to the commercial ACP.
4.0 NUCLEAR INSURANCE
AND INDEMNITY By letter dated December 8, 2022, ACO submitted Amendment 3 to Appendix 1 to the GCEP lease agreement and HALEU contract (ML22353A529) to demonstrate DOEs indemnification of nuclear liability for the duration of the HALEU contract, pursuant to the Price-Anderson Act. The NRC staff evaluated ACOs LAR, as supplemented, and finds ACO remains in compliance with the liability insurance requirements in 10 CFR 140.13b because DOE continues to provide indemnity for the HALEU program.
The staff reviewed the nuclear liability insurance information provided in the LAR, as supplemented, and finds that it meets the applicable regulations of 10 CFR Part 140 and is consistent with the guidance in Section 1.2.4 of NUREG-1520 Revision 2. The NRC staff confirmed that DOE will indemnify ACO for nuclear liability through December 31, 2025, as stipulated in Amendment 3 to the GCEP lease agreement and the revised HALEU contract (ML24324A321).3 The NRC concludes that ACO appears to be financially qualified to operate the ACP HALEU 16-centrifuge cascade (and 2 spares) for the duration of its contract with DOE. Therefore, the NRC finds that ACO has satisfied the nuclear liability insurance requirements of 10 CFR 140.13b and 140.14(a)(3).
5.0 LICENSE CONDITION 15 ACO supplemented its LAR with a proposal to delete the expiration date of DOEs HALEU demonstration contract in LC 15 of SNM-2011 (ML24228A133-public, ML24228A132-non-public) as follows:
Operation of the ACP, with the exception of operation of the HALEU demonstration cascade until expiration of DOEs HALEU demonstration contract on December 31, 2024, or up to the currently authorized possession limits defined with this Materials License (whichever comes first), shall not commence until the Licensee has in place either: (1) long term contracts lasting five years or more that provide sufficient funding for the estimated cost of operating the facility for the five year period; (2) documentation of the availability of one or more alternative sources of funds that provide sufficient funding for the estimated cost of operating the facility for five years; or (3) some combination of (1) and (2).
3 The GCEP lease agreement for ACP facility provides that if the DOE-ACO contract is extended beyond the completion of Phase 2 of the HALEU Ops Contract (the DOE-ACO contract), the lease agreement would expire on December 31, 2026. In addition, the DOE will indemnify ACO for nuclear liability through would continue through December 31, 2026. Operations of the HALEU program would be subject to the duration of the extended contract and any other modifications.
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The NRC staff conducted two conference calls with ACO on November 15 and 20, 2024 to discuss the proposed removal of the contract expiration date from LC 15 (ML24339A067).
During the November 15th conference call, the NRC staff indicated that the removal of the contract termination date from LC 15 would be acceptable as long as ACO commits to providing the NRC prior notification of planned or anticipated changes to the contract that are material to the ACP license SNM-2011, including the contract termination date. The advance notice would provide the NRC staff time to review the contract terms and determine whether an LAR is needed. During the November 20th conference call, ACO discussed the following new LC:
ACO shall provide at least a 30-day prior written notification to the NRC of anticipated or needed changes to its HALEU demonstration contract that are material to ACOs license, including contract completion date extensions. Such written notifications shall include the anticipated or needed changes to the contract and the status of DOEs review with respect to a proposed change. If it is not possible for ACO to provide the 30-day prior notification, ACO shall provide the prior notification before the change is made, and as early as possible, with an explanation of why the required 30-day notification time period could not be met.
ACO submitted the text of the LC to the NRC by letter dated November 21, 2024 (ML24331A050).
ACO proposed removal of the termination date for the DOE-ACO contract from LC 15 because inclusion of the date typically requires a license amendment each time DOE changes the termination date. The NRC staff concludes that the removal of the contract termination date in LC 15 is acceptable because the prior notification required by the proposed LC [LC 31] provides the staff time to assess the contract change and determine whether an LAR is needed. ACOs proposed LC streamlines the NRC staffs review of future ACO contract modifications for minor, non-safety-related and non-security-related changes to the contract, such as a simple 6-month contract extension.
6.0 ENVIRONMENTAL REVIEW The NRC staff prepared an environmental assessment (EA) to determine whether there would be any significant environmental impacts associated with extending the NRCs authorization for Phase II of the HALEU program through December 31, 2025. Although the current DOE-ACO contract continues through June 30, 2025, the NRC staff evaluated potential impacts for the additional six months of operations in the event the DOE-ACO contract expiration date is extended. The NRC staff made a finding of no significant impact (FONSI) on the environment from HALEU operations through December 31, 2025. The EA was made available in ADAMS at ML24358A175 and on the NRCs webpage for ACOs ACP on December 26, 2024. The EA and FONSI was published in the Federal Register on December 31, 2024 (https://www.federalregister.gov/d/2024-31376).
The NRC staff also considered environmental impacts associated with the financial documentation provided with this LAR. The licensing action involves the review of updated documents which demonstrate ACOs financial qualifications, decommissioning funding, and nuclear insurance and indemnification. The NRC staff finds ACOs financial qualifications, decommissioning funding, and nuclear insurance indemnification are categorically excluded from environmental review under NRCs regulation in 10 CFR 51.22(c)(10)(i) that applies to a surety, insurance, and/or indemnity.
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7.0 CONCLUSION
The NRC staff evaluated ACOs financial qualifications, and the indemnification of its decommissioning funding and nuclear insurance obligations by DOE submitted with the amendment request in making its determination on the proposed action.
For the reasons set forth in this SER, the NRC staff finds that:
- 1. Based on the revised HALEU contract between DOE and ACO, ACO appears to be financially qualified to provide the financial resources necessary to carry out the proposed action in a safe and secure manner throughout Phase 2 of the HALEU contract, as required by 10 CFR 70.35 and 70.23(a)(5);
- 2. The provisions in Amendment 3 to Appendix 1 of the GCEP lease agreement, which stipulates DOEs contractual commitment to assume liability for the decontamination and decommissioning of the HALEU program facilities and equipment, are sufficient to satisfy the decommissioning funding requirements in 10 CFR 70.25(a)(1), (d), (e),
(f)(5); and
- 3. The liability coverage information provided in the current LAR, as supplemented, demonstrates that ACO has satisfied the liability insurance requirements of 10 CFR 140.13b and 140.14(a)(3).
The NRC staff reviewed ACOs proposed removal of the contract expiration date from LC 15 and the new LC 31 requiring ACO to provide the NRC prior notification of any contract changes that are material to the ACP license SNM-2011. The NRC staff finds the removal of the contract expiration date from LC 15 and the addition of LC 31 to be appropriate and adequately protective.
This amendment 27 will become effective on January 1, 2025. ACO is authorized to continue the HALEU operations until June 30, 2025, or until production of the licensed amount of HALEU is reached. However, ACOs HALEU operations may continue if ACO provides prior written notification to the NRC of proposed changes to the DOE-ACO HALEU demonstration contract as required under LC 31, and the contract modifications are non-safety-related and non-security-related, such as a simple contract extension. The NRC staff will confirm that with the proposed modification(s) to the DOE-ACO contract, the requirements for Financial Qualification (10 CFR 70.22(a)(8) and 10 CFR 70.23(a)(5)),
Decommissioning Financial Assurance (10 CFR 70.25(a)(1), (d), (e), (f)(5)); and Nuclear Liability Insurance (10 CFR 140.13b and 140.14(a)(3)), will continue to be met.
Principle Contributors:
Steve McCarthy NMSS/REFS/FAB Yawar Faraz NMSS/DFM/FFLB