ML25118A056
| ML25118A056 | |
| Person / Time | |
|---|---|
| Site: | 07000925 |
| Issue date: | 04/28/2025 |
| From: | Melissa Crawford Environmental Properties Management |
| To: | Miller R, James Smith NRC/NMSS/DDUWP/URMDB, State of OK, Dept of Environmental Quality (DEQ) |
| References | |
| Download: ML25118A056 (1) | |
Text
April 28, 2025 Mr. James Smith U.S. Nuclear Regulatory Commission 11555 Rockville Pike Rockville, MD 20852-2738 Ms. Rachel Miller Oklahoma Department of Environmental Quality 707 North Robinson Oklahoma City, OK 73101 Re:
Docket No. 07000925; License No. SNM-928 Cimarron Environmental Response Trust - Proposed Reallocation of Remediation Costs Among Trust Accounts
Dear Recipients:
Solely as Trustee for the Cimarron Environmental Response Trust (CERT), Environmental Properties Management LLC (EPM) submits herein a proposal to revise the allocation of remediation costs between the Federal Environmental Cost Account (herein, the Federal Account) and the State Environmental Cost Account (herein, the State Account). EPM cannot apply the proposed reallocation retroactively but will apply it to charges incurred the month following approval from both the U.S. Nuclear Regulatory Commission (NRC) and the Oklahoma Department of Environmental Quality (DEQ).
Basis for the Existing Allocation of Costs Among Trust Accounts In 2011, when the Cimarron Environmental Response Trust was established, the Consent Decree and Environmental Settlement Agreement (CD-ESA) and the Cimarron Trust Agreement appeared to distinguish between work that would support achievement of Federal goals (decommissioning) and work that would support achievement of State goals (remediation). Payment for decommissioning costs were to be paid from the Federal Account, and payment for remediation costs were to be paid from the State Account.
Prior to the creation of the Trust, the objective of groundwater assessment was to determine the area within which uranium concentrations exceeded the decommissioning criterion stipulated in the NRC license (the NRC Criterion). It was known that there were areas where uranium, nitrate and fluoride exceeded State criteria; however, the full extent of these impacts to groundwater at the site had not been defined. As a result, the State of Oklahoma did not submit a claim that would fund remediation of all contaminants site-wide. Consequently, the funding provided by the CD-ESA and the Cimarron Trust Agreement State Account was inadequate to address State concerns.
April 28, 2025 Page 2 Remediation of groundwater to achieve the NRC Criterion will result in the reduction of other contaminants in groundwater, which will contribute to the achievement of State Criteria, although it is not anticipated that State Criteria will be achieved site-wide. Consequently, the NRC and the DEQ agreed to jointly fund the remediation of groundwater.
Based on the initial funding of the Trust Accounts, EPM calculated the percentage of total funding available for remediation to address Federal and State requirements as follows.
The initial funding for the Federal Account was $6,588,381.00.
The initial funding for the State Account was $746,114.00.
The initial funding for the Standby Trust was $3,600,000.00.
Total funding for all three accounts was $10,934,495.00.
The State Account represented 6.8% of the total funding.
The sum of the Federal Account and Standby Trust Account represented 93.2% of the total funding.
Consequently, in developing the proposed budget for 2012, EPM created budget tasks consisting of categories of work and utilized the above-calculated percentages to allocate the cost for environmental assessment and remediation to the Federal and State Accounts as follows:
The cost of License Compliance activities and NRC oversight and inspection fees will be charged exclusively to the Federal Account.
The cost of State permits and DEQ oversight fees will be charged exclusively to the State Account.
For all other decommissioning/remediation activities, including groundwater assessment, remediation plan development, and Decommissioning Plan development, 93.2% of the cost will be charged to the Federal Account, and 6.8% will be charged to the State Account.
If either the NRC or the DEQ requested work that was not already approved in the budget (unanticipated work), the allocation of costs for that work will be agreed upon by both the NRC and the DEQ.
These remediation allocation cost percentages have remained unchanged since 2012.
Providing Additional Income to the State Account At the time the Trust Accounts were initially funded, the NRC and the DEQ knew that the United States was in litigation with Anadarko Petroleum, who had purchased Kerr-McGee Corporation. Settlement of the Anadarko litigation resulted in a significant increase of funds to the Trust Accounts. However, the CD-ESA and the Cimarron Trust Agreement, based on the DEQs original claim, stipulated the allocation of proceeds from the Anadarko Litigation Trust to each of the accounts. In addition, the interest earned on invested assets associated with each Trust Account is accrued to that account. To address the imbalance in funding between the state and federal accounts described above, the Beneficiaries agreed that all future income received by the Trust would be allocated to the Trust Accounts as follows:
10% of the income will be allocated to the Administrative Account 10% of the income will be allocated to the Federal Account 80% of the income will be allocated to the State Account
April 28, 2025 Page 3 As stated above, the cost for License Compliance activities and NRC oversight and inspection fees are charged exclusively to the Federal Account. These costs are sufficiently significant that even if income to the Trust were not allocated in favor of the State Account, the value of the Federal Account relative to the State Account would decline over time. As a result, the value of the State Account has increased in proportion to the total funding available for remediation.
At the end of 2024:
The value of the Federal Account was $55,210,250.
The value of the State Account was $13,766,662.
The value of the Standby Trust was $3,859,912.
The total of all three accounts was $72,836,824.
Therefore, the State Account now represents 18.9% of the total funding available for site remediation.
(Note: All of the above account values are rounded to the nearest dollar.)
Reallocation of Costs Based on Current Account Values EPM believes it would not be responsible to continue to charge the Federal Account 93.2% of decommissioning/remediation costs; doing so would deplete the Federal Account much more rapidly than the State Account. EPM has considered revising the allocation percentages in the past, but remediation expenditures were not considered to have a significant impact on the relative values of the Federal and State Accounts at that time. Due to costs associated with remediation system construction planned for 2025 and 2026, remediation costs will have a significantly greater impact on the Trust accounts than in past years. Consequently, EPM believes this is an appropriate time to revise the allocation of costs between the Federal and State Accounts.
EPM proposes, for remediation costs incurred on and after January 1, 2025, to charge 18.9% of remediation costs to the State Account, and 81.1% of remediation costs to the Federal Account.
If you have any questions or desire clarification, please call me at 816-652-2784.
Sincerely, Mathew Crawford, Trustee Project Manager cc: (electronic copies only)
Rob Yalen, Office of the United States Attorney for the Southern District of New York Paul Davis, DEQ