NG-10-0105, Decommissioning Funding Status Report

Decommissioning Funding Status Report

ML100970069
Person / Time
Site:	Duane Arnold
Issue date:	03/25/2010
From:	Costanzo C Nextera Energy, NextEra Energy Duane Arnold
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
NG-10-0105
Download: ML100970069 (9)

Text

NExTera ENERG--YP, March 25, 2010 NG-10-0105 10 CFR 50.75(f)(1)

U.S. Nuclear Regulatory Commission Attn: Document Control Desk Washington, DC 20555-0001 Duane Arnold Energy Center Docket No. 50-331 License No. DPR-49 Decommissioning Funding Status Report Pursuant to 10.CFR.5,q.75(f), enclosed is the annual Decommiss ning Funding Status Report for the DuaneArn6ld Energy Center (DAEC). Atta6ment 1 provides the NRC minimum amount calculated under 10 CFR 50.75(c)(1).

However, the amount stated in this repol4 (Attachrment 2) 1s ba'sed on a revwsd site-specific cost estimate usingjtbe SAFSTOR method. NextEra-Energy Duane Arnold Subm ttedthe 'revised'Decommissiohing dCst E*tirtra'e Studyifor DAEC to the NRC on Febuý,I,1 ,a0! s s to, "Response to Supplemental Request for Additional.] r~iawion trio Sup ort the Review of the Duane Arnold Energy Center Spent Fuel Management Program and Preliminary Decommissioning Cost Estimate," (ML100540024). The revised Decommissioning Cost Estimate presents results in 2008 dollars. These results were converted into 2009 dollars by using an escalation factor. The amount stated in Attachment 2 is based on the site-speFifipe timate and is greater than that produced using the NRC's formula amount *ipat, sacbment 1.a' "Ain~d,&.,L Cenrlfnt 1o4P 6G e 'ie(IC NextEra Energy Duane 4. , Centra owaPowerCooerative (CIPCO) and Corn Belt Power Cooperatve (Corn Belt) joinfly ow DAEC. ) This report'-

provides the status of decommissioning funding for all' three'owners of thIe"unit:

This letter contains no,.new commitments and no isiojin's to e .i:ting commitments. "... .. ....

NextEra Energy Duane Arnold,: LLC, 3277 DAEC Road, Palo, IA 52324

NG-10-0105 Page 2 of 2 Should you have any questions, please contact Licensing Manager, Steve Catron, at (319) 851-7234.

Christopher R. Costanzo Vice President, Duane Arnold Energy Center NextEra Energy Duane Arnold, LLC Enclosure

ENCLOSURE Duane Arnold Energy Center NextEra Energy Duane Arnold, LLC (Next Era),

Central Iowa Power Cooperative (CIPCO),

Corn Belt Power Cooperative (Corn Belt)

Decommissioning Funding Status Report The minimum decommissioning fund estimate pursuant to 10 CFR 50.75(b) and (c).

Plant Owner (% Ownership) NRC Minimum (a)

NextEra (70%) 355,587,910 ClPCO (20%) 101,596,546 Corn Belt (10%) 50,798,273 Total 507,982,729 (a) Refer to Attachment I for calculation assumptions.

2. The amount accumulated at the end of the calendar year preceding the date of the report.

Plant Owner (% Ownership) Total NextEra (70%) 191,555,496 CIPCO (20%) 33,827,836 Corn Belt (10%) 16,825,491 Total 242,208,823

3. Schedule of the annual amounts remaining to be collected. (b)

Plant Owner (% Ownership) AnnualAnnuity Projected Funds at Shutdown NextEra (70%) $0 CIPCO (20%) (c)

Corn Belt (10%) (c)

Total (b) Refer to Attachment 2 for Decommissioning Funding Plan, SAFSTOR Alternative.

(c) Actual annual contributions to the external sinking fund will vary based upon reassessment of owner's decommissioningfunding obligations in light of NRC requirements, actual inflation, actual fund earnings, and other factors. Attachment 3 provides the funding schedules applicable to each of the Duane Arnold Energy Center Owners.

Page 1 of 3

4. Assumptions used regarding escalation in decommissioning costs, rate of earnings on decommissioning funds and rates of other factors used in funding projections.

Plant Owner (% Ownership) Rate of Earnings Escalation Real Rate of (Nominal Rate Of Factor Return Return) (Inflation) (Projected)

NextEra (see note (d)) (70%) 2%

CIPCO (see note (e)) (20%) 4%

Corn Belt (see note (f)) (10%) 3%

Basis for Allowance:

(d) The real rate of return allowed by 10 CFR 50.75 is 2%.

(e) Central Iowa Power Cooperative (CIPCO) is a public corporation incorporated under Chapter 499 Iowa Code (2009). CIPCO has the authority and is required to fix, establish, and collect adequate rates and other charges for electrical energy or services sold or furnished by it. CIPCO is accordingly authorized to establish its own rates and other charges through which it can recover its cost of service.

CIPCO is governed by a 13 member Board of Directors that are elected by the CIPCO members. The Board of Directors is the rate making authority for CIPCO.

CIPCO rates are not regulated by any state or federal authority. In a Board Resolution dated October 27, 2009, the CIPCO Board of Directors resolved that the rates and other charges for electrical energy services and the decommissioning fund be established assuming a real rate of return on the decommissioning fund of four percent.

(f) Corn Belt Power Cooperative is a public corporation incorporated under Chapter 499 Iowa Code (2009). Corn Belt has the authority and is required to fix, establish, and collect adequate rates and other charges for electrical energy or services sold or furnished by it. Corn Belt is governed by an 11 member Board of Directors who are elected by its members. The Corn Belt Board of Directors is accordingly authorized to establish its own rates and other charges through which it can recover its cost of service and is the rate making authority for the Cooperative.

The Cooperative's rates are not regulated by any state or federal authority. In a Board Resolution dated October 30, 2009, the Corn Belt Board of Directors resolved that the rates and other charges for electrical energy services and the decommissioning fund be established assuming a real rate of return on the decommissioning fund of three percent.

5. Any contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(v). None Page 2 of 3

6. Any modifications to a licensee's method of providing financial assurance occurring since the last submitted report. See response As stated in NextEra's November 5, 2009 Request For Additional Information (RAI) Response (ML093130065), NextEra maintains a $93 million parent guaranty as decommissioning funding assurance, although the parent guaranty is no longer necessary to demonstrate reasonable assurance of decommissioning funding when relying upon the site-specific decommissioning cost estimate.

7. Any material changes to trust agreements.

See response Effective April 16, 2009, the name was changed on the qualified and non-qualified trusts from FPL Energy Duane Arnold, LLC to NextEra Energy Duane Arnold, LLC to reflect a corporate name change. Also, the name of the trustee was changed from, "Mellon Trust of Delaware, National Association," to, "BNY Mellon Trust of Delaware," to reflect a name change that followed the merger of Mellon Trust of Delaware with The Bank of New York (Delaware).

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ATTACHMENT 1 DUANE ARNOLD ENERGY CENTER NRC Minimum Decommissioning Cost Determination NRC Minimum = $121.2 million X (0.65L + 0.13E + 0.22B)

Where:'

$121.2 million is value for reference BWR 1 in 1986 dollars L = Labor escalation factor to current year 2 3 E = Energy escalation factor to current year B = LLRW escalation factor to most recent published year'

1. Item Description Value 1 Labor escalation factor for Quarter 4, 2009 2 108.6 2 Base adjustment factor from NUREG-1307 1 2.08 3 Escalation factor from NUREG-1307 100 4 L = #1 times #2 divided by #3 2.26 5 Electric power escalation factor, 2009 5 187.1 6 Electric power escalation factor for Jan., 1986 from NUREG-1307 114.2 7 Fuel escalation factor for 2009 6 197.7 8 Fuel escalation factor for Jan., 1986 from NUREG-1307 82 9 P = #5 divided by #6 1.64 10 F = #7 divided by #8 2.41 11 E = 0.54P(#9) + 0.46F(#10) per NUREG-1307 1.99 12 Value of B from Table 2.1 of NUREG-1307 4 11.198 1.3 0.65L(#4) + 0.13E(#11) + 0.22B(#12) 4.19 14 1986 minimum-millions of dollars for BWR 121.2 15 2009 minimum-millions of dollars: #13 times #14 507.9 1 NUREG 1307, Rev 13, Table 3.2 2 NUREG 1307 specified that source is Bureau of Labor Statistics Data, Employment Cost Index, Series CIU20100000002301 (Midwest Region).

3 NUREG 1307 specifies that source is a weighted calculation using Bureau of Labor Statistics Data, Producer Price Index-Commodities, Series wpu0573 (light fuel oils) and wpu0543 (industrial electric power).

4 NUREG 1307 provides a value for B in Table 2.1 In the November 2008 revision (Rev. 13) of the NUREG the value is 11.198 for Generic LLW Disposal Site assuming the application of waste vendor services to reduce burial volumes. No value is provided for Envirocare.,

December 2009 value is 187.1. (See note #3) Information was preliminary as of 02/16/10 6 December 2009 value 197.7 (See note #3) Information was preliminary as of 02/16/10 Page 1 of 1

Attachment 2 Duane Arnold Energy Center Decommissioning Funding Plan 1 Page Follows

Attachment 2 Duane Arnold Energy Center Decommissioning Funding Plan Scenario 2: 2014 Shutdown, SAFSTOR Alternative (Thousands of Dollars)

Basis Year 2009 Fund Balance as of 12131/09: (Thousands of Dollars)

Next Era 191,555 70% ownership CIPCO 33,828 20% ownershig Corn Belt 16,825 10% ownership Total Trust Fund Balance 242,208 Annual Escalation 2.7%

Annual Earnings - Next Era 2%

Annual Earnings - CIPCO 4%

Annual Earnings - Corn Belt 3%

A __ _ C I D E F ft H I___ _

CIPCO Corn Belt Next Era Decommissioning Decommissioning Decommissioning Trust Fund Trust Fund Balance Trust Fund Balance escalatec escalated at 3% Total CIPCO Corn Belt Total Cost Balance escalated at 4% minus 20% minus 10% of Decommisioning Decommissioning Decommissioning Escalated at 2% minus 70% of expenses + expenses + Trust Fund minus Trust Fund Trust Fund Year 50.75 Cost at 2.7% expenses Contirbutions Contirbutions 2009 S55 825 2010 01 580 1,000 250 2011 199,294 38,628 18,5071 256,429 1.000 400 2012 41.155 1,000 550 2013 415,56 1,000 700 2014 $44,6301 35,0491- 1,000 850 2015 2016 2017 2018 2019 2020 $2795 2899 169,229 37,244 16,386 2021 $32795 32099 ' 169.884 27,954 16,487 2022 $3,795 32899 170,553 28,692 16,592 2023 $3,795 3,899 1 171,235 39,460 16,700 227,395 2024 40,259 16.811 229.001 2026 41,451 17,106 2026 1 42,812 17.471 236,625 44,227 17,846 240,901 45,698 18,233 245,294 1,488 47,229 18,631 249,809 48.820 19,041 254,448 50,476 19,464 259,217 52,197 19,899 264,117 53,987 20,347 269,155 55,849 20,809 274,334 57,786 21,284 279,658

$1,448 59,800 21,774 285,132 S1.448 22,278 290,761 61 448 22,798 296,549

$1,448 23,333 302,502 S1.440 23,885 308,625 61 448 24,452 314,922

$1,448 1,4881 222,6711 73,692 25,037 321,401 25,639 328,065 26,260 334,922 233,1 26,899 341,978

.236,7 27,557 349,238 240,4 28,235 356,710 2048 1 244,1 91,271 28,933 364,399 248,S 94,624 29,653 3722315 251I c 98,112 30,393 380,462 101,739 31,156 388,850 105,511 397,486 109,434 4066378 113,478 415,357 2055 117,544 423,901 121.772 126.169 130,742 135A498 140,445 145,589 2062 150,939 2063 156,503 2064 162,289 2065 168,307 2066 173,364 2067 $12,229 1 177,786 2068 171,853 2069 162,444 2070 98,643 1 155,701 149,213 2071 2072 2073 Total 5 Calculations:

Column D2= (Column D (Previous year's fund balance)* (1+.02))- (Column C* 0,70) (70% of current year's decommissioning expenditures)

Column E = (Column E (Previous year's fund balance)* (1+.04))- (Column C* 0.20) (20% of current year's decommissioning expenditures)+ Column H (current year's contributions)

Column F= (Column F (Previous year's fund balance)* (1+v03))- (Column C* 0.10) (10% of current year's decommissioning expenditures)+ Column I (current years contributions)

Column G = Column 12+ Column E + Column F

Attachment 3 CIPCO and Corn Belt Decommissioning Trust Fund Contributions (In thousands of dollars)

CIPCO Decommissioning Trust Corn Belt Decommissioning Trust Year Fund Contributions Fund Contributions 2010 1,000 250 2011 1,000 400 2012 1,000 550 2013 1,000 700 2014 1,000 850 Page 1 of 1