ML25177A090

Encl 4 - HALEU Phase III - Safety Evaluation Report Amendment 29 Redacted (Public)

ML25177A090
Person / Time
Site:	07007004
Issue date:	06/26/2025
From:	NRC/NMSS/DFM/FFLB
To:	American Centrifuge Operating
References
EPID L-2025-LLA-0000
Download: ML25177A090 (1)

Text

1 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:

THE NUCLEAR REGULATORY COMMISSIONS AUTHORIZATION FOR PHASE III OF THE AMERICAN CENTRIFUGE OPERATINGS HIGH ASSAY LOW-ENRICHED URANIUM DEMONSTRATION PROGRAM

1.0 INTRODUCTION

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 December 19, 2024, for the American Centrifuge Plant (ACP) located in Piketon, Ohio (Agencywide Documents Access and Management System (ADAMS)

Accession No. ML24366A040) and supplemented by letter dated June 12, 2025 (ML25164A029).

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 non-public). ACO initially submitted an amendment request seeking authorization for the High Assay Low-Enriched Uranium (HALEU) demonstration 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 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 28, 2022, ACO requested an extension of the NRCs authorization for the HALEU demonstration program through November 30, 2022 (ML22123A143). By letter dated August 11, 2022 (ML22208A057), the NRC staff approved the extension of the HALEU demonstration 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 the DOEs HALEU demonstration contract through November 30, 2022 (ML22208A060).

On November 30, 2022, ACO requested an extension of the NRCs authorization for the HALEU demonstration program from November 30, 2022 (ML22340A461) through December 31, 2024, or until production of the licensed amount of HALEU is reached,

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OFFICIAL USE ONLYSECURITY-RELATED INFORMATION whichever comes first. The NRC granted the extension of the HALEU authorization on March 30, 2023 (ML23083B966). On September 12, 2024, ACO requested an extension of the NRCs authorization for the HALEU demonstration program from December 31, 2024 (ML24262A084) through June 30, 2025. The NRC granted the extension of the HALEU authorization on December 31, 2024 (ML24345A252, ML24345A256).

The NRC staff accepted ACOs current LAR (ML24366A040) for detailed technical review on February 10, 2025 (ML25042A390). The LAR requested an extension of the NRCs authorization under the ACP Materials License SNM-2011 for the HALEU demonstration program for three, 3-year optional periods (total of 9 years) starting July 1, 2025, or until the possession limits for byproduct, source and special nuclear material in Section 6.a of (ML24366A044 non-public) of the application, including up to [REDACTED] of HALEU, are reached, whichever comes first.

By letter dated May 20, 2025 (ML25162A275 non-public), the DOE notified ACO that it still intended to exercise the HALEU demonstration contract for the first 3-year optional period 1 of Phase 3 starting on July 1, 2025. By letter dated June 12, 2025 (ML25164A029), ACO supplemented its LAR by clarifying in the license application document that its possession limits contained in the LAR were for operations conducted during the entire 9-year period of Phase III. In addition, ACO clarified in LC 31, that if during Phase III, there were substantive changes made to the contract, such as a significant decrease in the DOEs funding of Phase III operations, ACO will submit a request to the NRC to amend the licensing documentation.

The modified LC 31 is as follows:

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 and the DOE funding at similar or higher levels for additional option periods. Such written notifications shall include the anticipated or needed changes to the contract and the status of the DOEs review with respect to a proposed change. Should substantive changes be made to the HALEU Demonstration contract that affects the NRCs prior authorization to increase the possession limits of Phase III in its entirety, ACO shall submit a request to amend the necessary licensing documentation.

On June 17, 2025, the DOE and ACO signed the contract for the first 3-year operational period of Phase III which ACO submitted to the NRC on June 17, 2025 as a supplement to the LAR (ML25169A055). The modified contract continues to indemnify ACOs financial qualifications, decommissioning financial assurance, and nuclear liability for the first 3-year optional period of Phase III i.e. through June 30, 2028.

The NRC staff undertook a financial analysis of the updated contract and lease agreement between the DOE and ACO, which supplemented the LAR. The NRC staffs financial analysis is presented in Section 2.1 of this SER.

The NRC staff reviewed the integrated safety analysis summary, and the radiation protection, criticality safety, chemical safety, fire protection and emergency response sections of the application in light of the proposed increase in possession limits to account for nine years of continued operation. The NRC staffs analysis of these changes is presented in Section 2.2.

The NRC staff reviewed changes made to the fundamental nuclear material control plan (ML24366A046 non-public), classified matter protection plan (ML24366A042 non-public),

and the physical security plan (Safeguards Information - not in ADAMS) and determined the changes to be non-substantive and therefore not needing prior NRC review and approval (ML25120A398 non-public).

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2.0 REGULATORY EVALUATION

2.1 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) provides financial assurance for decommissioning funding when a governmental entity agrees to assume custody and ownership of a site, provided the arrangement is deemed acceptable by the 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) provides the types of financial protection the Commission may approve.

NRC Guidance The NRC staff evaluated the applicants financial qualifications, and the 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.

2.1.1 Financial Qualifications and Decommissioning Funding The NRC staff most recently reviewed ACOs financial qualifications for the production of HALEU through June 30, 2025, and found ACO financially qualified to continue its HALEU enrichment licensed activities at the ACP through June 30, 2025 (ML24345A251). 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.

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OFFICIAL USE ONLYSECURITY-RELATED INFORMATION 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:

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.1 LC 17 of SNM-2011 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 June 30, 2028. DOEs indemnification of decommissioning includes the dispositioning of any depleted UF6 tails generated from the HALEU demonstration cascade.

For these reasons, the NRC staff determined that ACO does not need 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 June 30, 2028. DOEs indemnification of all costs includes the dispositioning of any depleted UF6 tails generated from the HALEU demonstration 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.

2.1.2 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 the 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 the DOE continues to provide indemnity for the HALEU demonstration 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 the DOE will indemnify ACO for nuclear liability through June 30, 2028, as stipulated in Amendment 3 to the GCEP lease agreement and the revised HALEU contract 1 The GCEP lease agreement for ACP facility provides that it would expire a year after the DOE-ACO contract expiration date. In addition, the DOEs assumption of all liability for the decontamination and decommissioning would continue. Operations of the HALEU demonstration program would be subject to the duration of the extended contract and any other modifications.

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OFFICIAL USE ONLYSECURITY-RELATED INFORMATION (ML24324A321).2 The NRC concludes that ACO appears to be financially qualified to operate the ACP HALEU demonstration cascade (consisting of 16 operating centrifuges and 2 spares) for the duration of its contract with the DOE. Therefore, the NRC finds that ACO has satisfied the nuclear liability insurance requirements of 10 CFR 140.13b and 140.14(a)(3).

2.2 ISA Summary, Radiation Protection, Criticality Safety, Chemical Safety, Fire Protection and Emergency Response This section of the SER discusses the safety review the NRC staff conducted in the areas of integrated safety analysis, radiation protection, criticality safety, chemical safety, fire protection and emergency response for the proposed ACO license amendment that would authorize Phase III of the HALEU demonstration program. These safety topics were examined as part of the initial safety review for the HALEU demonstration program in 2021.

The NRC staff prepared an SER (ML21148A291) following this initial review of the HALEU demonstration program. This 2021 review examined the HALEU demonstration facility design and proposed operation of the facility. It also examined and evaluated the ACO programs, commitments and analyses related to integrated safety analysis, radiation protection, criticality safety, chemical safety, fire protection and emergency management for the HALEU demonstration program. The NRC staff documented the results of this initial 2021 review in the SER which concluded that the requirements of 10 CFR Part 70 related to these safety topics would be met for the proposed ACO HALEU demonstration program.

The NRC staff conducted an additional accident analysis review of these safety topics as part of the review of ACOs LAR for Phase II (ML24068A189) which involved an increase of the possession limits along with an extension of the durational period of the ACO HALEU demonstration program. While the Phase II amendment proposed increasing the possession limits and extending the duration of the HALEU demonstration program, the nature and size of the HALEU demonstration cascade was maintained along with previous ACO commitments to its various safety programs. The accident analysis safety review for Phase II concluded that the HALEU demonstration operations would continue to meet the requirements of Part 70 even with the proposed increase in the possession limits and extended duration of operation.

The Phase III LAR proposed to further increase the possession limits and further extend the timeframe for the HALEU demonstration program. Phase III would continue to use the same HALEU demonstration facility, process, equipment and would continue to comply with the safety commitments made in the original HALEU demonstration license application.

Based on the NRC staffs review of ACOs commitments for the proposed Phase III of the HALEU demonstration program (i.e., no changes in the facility design or operation and no changes in the commitments to safety programs), the NRC staff concludes with reasonable assurance that ACO will continue to meet the requirements of 10 CFR Part 70 for the integrated safety analysis and for the radiation protection, criticality safety, chemical safety, fire protection and emergency management programs during the proposed Phase III of the HALEU demonstration program.

2 The GCEP lease agreement for ACP facility provides that it would expire a year after the DOE-ACO contract expiration date. In addition, the DOE will indemnify ACO for nuclear liability through December 31, 2026. Operations of the HALEU demonstration program would be subject to the duration of the extended contract and any other modifications.

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OFFICIAL USE ONLYSECURITY-RELATED INFORMATION 3.0 ENVIRONMENTAL REVIEW The NRC staff prepared an environmental assessment (EA) to determine whether there would be any significant environmental impacts associated with the NRCs authorization for Phase III of the HALEU demonstration program through June 30, 2034. Although the current DOE-ACO contract is for the first 3-year optional period of Phase III through June 30, 2028, the NRC staff evaluated potential impacts for the additional six years of operations in the event the DOE-ACO contract is extended through the second and third 3-year optional periods of Phase III. The NRC staff made a finding of no significant impact (FONSI) on the environment from HALEU demonstration operations through June 30, 2034.

The EA was made available in ADAMS at ML25084A113 and on the NRCs webpage for ACOs ACP on June 16, 2025. The EA and FONSI was published in the Federal Register on June 24, 2025 (ML25113A006).

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.

4.0 CONCLUSION

The NRC staff evaluated ACOs financial qualifications, and the indemnification of its decommissioning funding and nuclear insurance obligations by the 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 the 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 during the first optional 3-year period of Phase III 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 the DOEs contractual commitment to assume liability for the decontamination and decommissioning of the HALEU demonstration program facilities and equipment, are sufficient to satisfy the decommissioning funding requirements in 10 CFR 70.25(a)(1), (d), (e), (f)(5);

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).

In addition, the NRC finds ACOs proposed revision to LC 31 acceptable and will add the revised LC 31 to SNM-2011.

Based on the staffs review of the ACO commitments made for the proposed Phase III of the HALEU demonstration program, the staff concludes with reasonable assurance that ACO will continue to meet the requirements of 10 CFR Part 70 for integrated safety analysis and for the radiation protection, criticality safety, chemical safety, fire protection and emergency management programs during the proposed Phase III of the HALEU demonstration program.

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OFFICIAL USE ONLYSECURITY-RELATED INFORMATION This amendment 29 will become effective on July 1, 2025. ACO is authorized to continue the HALEU demonstration operations until June 30, 2034, or until production of the licensed amount of HALEU is reached or until any substantial safety or security-related contractual changes are made. However, if during this time period, there are safety or security-significant changes made to the contract between ACO and the DOE, then ACO would need the NRC to review and confirm, as a minimum, that ACO is in compliance with all applicable requirements.

Principle Contributors:

Yawar Faraz NMSS/DFM/FFLB James Hammelman NMSS/DFM/CTCFB Steve McCarthy NMSS/REFS/FAB Isaac Johnston NMSS/REFS/EPMB2