NL-15-0574, Financial Assurance Requirements for Decommissioning Nuclear Power Reactors (10 CFR 50.75(f)(1))

Financial Assurance Requirements for Decommissioning Nuclear Power Reactors (10 CFR 50.75(f)(1))

ML15092A405
Person / Time
Site:	Farley
Issue date:	03/26/2015
From:	Pierce C Southern Co, Southern Nuclear Operating Co
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
NL-15-0574
Download: ML15092A405 (8)

Text

Charles A. Pierce Southern Nuclear Regulatory Affairs Director Operating Company, Inc.

40 Inverness Center Parkway Post Office Box 1295 A

Birmingham, AL 35201 Tel 205.992.7872 Fax 205.992.7601 SOUTHERN COMPANY March 26, 2015 Docket Nos.: 5Q-348 NL-15-0574 50-364 U. S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, D. C. 20555-0001 Joseph M. Farley Nuclear Plant Financial Assurance Requirements for Decommissioning Nuclear Power Reactors (10 CFR 50.75(f)(1))

L adies and Gentlemen:

Pursuant to 10 CFR 50.75(f)(1), each power reactor licensee is required to report to the NRC the status of its decommissioning funding for each reactor or part of each reactor it owns on a calendar year basis, beginning on March 31,1999, and every two years thereafter. Southern Nuclear Operating Company (Southern Nuclear) holds operating licenses NPF-2 and NPF-8 for the Joseph M. Farley Nuclear Plant Unit 1 and Unit 2, respectively, owned by Alabama Power Company. Accordingly, Southern Nuclear provides the enclosed Alabama Power Company submittal in accordance with the requirements of 10 CFR 50.75(f)(1).

This letter contains no NRC commitments. If you have any questions, please contact Ken McElroy at (205) 992-7369.

C. A. Pierce Regulatory Affairs Director CRP/RMJ

Enclosure:

Alabama Power Company Response

U.S. Nuclear Regulatory Commission NL-15-0574 Page 2 cc: Alabama Power Company Ms. A. Allcorn-Walker, Vice President, Comptroller Mr. C. Blake, Assistant Treasurer Southern Nuclear Operating Company Mr.S. E. Kuczynski, Chairman, President & CEO Mr. D. G. Bost, Executive Vice President & Chief Nuclear Officer Ms. C. A. Gayheart, Vice President- Farley Mr. M. D. Meier, Vice President- Regulatory Affairs Mr. D. A. Madison, Vice President- Fleet Operations Mr. B. J. Adams, Vice President- Engineering Mr. A. A. Martin, Regulatory Affairs Manager- Farley RTYPE: CFA04.054 U.S. Nuclear Regulatory Commission Mr. V. M. McCree, Regional Administrator Mr.S. A. Williams, NRR Project Manager- Farley Mr. P. K. Niebaum, Senior Resident Inspector- Farley

Joseph M. Farley Nuclear Plant Financial Assurance Requirements for Decommissioning Nuclear Power Reactors (10 CFR 50.75(f)(1))

Enclosure Alabama Power Company Response

Christopher R. Blake. CPA, CMA 600 North 18th Street Assistant Treasurer Post OHice Box 2641 Treasury SeTVices , Birmingham, Alabama 35291-0040 Tel 205.257.3618 Fax 205.257.2622 ALABAMA POWER A.

March 12, 2015 A SGUYIIERN COMPANY Docket Nos.: 50-348 50-364 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, D.C. 20555 Joseph M. Farley Nuclear Plant Financial Assurance Requirements for Decommissioning Nuclear Power Reactors (10 CFR 50.75(f)(1))

Dear Ladies and Gentlemen:

Pursuant to 10 CFR 50.75(f)(1), each power reactor licensee is required to report to the NRC the status of its decommissioning funding for each reactor or part of each reactor it owns on a calendar year basis, beginning on March 31, 1999, and every two years thereafter. Alabama Power Company (APC) hereby submits the enclosed information in accordance with 10 CFR 50.75(f)(1) for operating licenses DPR-57 and NPF-5 issued for Farley Nuclear Plant Unit 1 and Unit 2, respectively. Southern Nuclear Operating Company, as the operating licensee and as an agent for the owners of Farley Nuclear Plant, is providing this information to the NRC on behalf of APC.

Based on the information presented herein, there is reasonable assurance that the funding necessary for decommissioning the Farley Nuclear Plant, consistent with the NRC prescribed minimum set forth in 10 CFR 50.75(c),

will be available on the expiration date of operating licenses DPR-57 and NPF-5.

Please advise if you have any questions or comments regarding the information provided herein.

RespectftJIIy submitted, Enclosure

Enclosure Alabama Power Company Ownership Percentage -100%

10 CFR 50.75(f)(1) Requirement Unit 1 Unit2 1 The NRC minimum decommissioning estimate,

$490,295,000 ' $490,295,000 2 pursuant to 10 CFR 50.75(b) and (c). 1 2 The amount aumulated at the end of the calendar year preceding the date of the report for

$383,952,164 $369,629,218 items included in 10 CFR 50.75(b) and (c).

3 A schedule of the annual amounts remaining to be See Schedule in See Schedule in collected; for items in 10 CFR 50.75(b) and (c). Attachment 1 Attachment 2 4 The assumptions used regarding:

(a) rates of escalation in decommissioning 4.5% 4 .5%

costs; (b) rates of earnings on decommissioning 7.0% 7.0%

funds; 2.5%3 2.5%3 (c) real rate of return; and (d) rates of other factors used in funding projections. N/A N/A 5 Any contracts upon which the licensee is relying N/A N/A pursuant to 10 CFR 50. 75(e)(1 )(v).

6 Any modifications to a licensee's current method None None of providing financial assurance occurring since the last submitted report.

7 Any material changes to trust agreements. See Attachment 3 See Attachment 3 NOTES:

1 The NRC formulas in section 10 CFR 50.75(c) include only those decommissioning costs incurred by licensees to remove a facility or site safely from service and reduce residual radioactivity to levels that permit: ( 1) release of the property for unrestricted use and termination of the license; or (2) release of the property under restricted conditions and termination of the license. The cost of dismantling or demolishing non-radiological systems and structures is not included in the NRC decommissioning cost estimates. The costs of managing and storing spent fuel on-site until transfer to DOE are not included in the cost formulas.

2 This amount is based on NUREG-1307, Rev. 15, for the burial factor (Option 2) and the December 2014 BLS data for labor and energy.

3 The real rate of return of 2.5% was established by the Alabama Public Service Commission's Order pertaining to Informal Docket U-3295 and subsequent submittals pursuant to that Order, most recently on October 28, 2008.

Attachment 1 Schedule of Annual Amounts Remaining to be Collected Alabama Power Company Farley Nuclear Plant Unit 1 NRC Minimum Beginning Fund Fund Fund Ending Fund Decommissioning Balance Earnings Contributions Balance Estimate 2014 $ 383,952,164 $ 490,295,000 2015 383,952,164 26,876,651 464,149 411,292,964 512,358,275 2016 411,292,964 28,790,508 464,149 440,547,621 535,414,397 2017 440,547,621 30,838,333 464,149 471,850,103 559,508,045 2018 471,850,103 33,029,507 464,149 505,343,759 584,685,907 2019 505,343,759 35,374,063 464,149 541,181,972 610,996,773 2020 541,181,972 37,882,738 464,149 579,528,859 638,491,628 2021 579,528,859 40,567,020 464,149 620,560,028 667,223,751 2022 620,560,028 43,439,202 464,149 664,463,379 697,248,820 2023 664,463,379 46,512,437 464,149 711,439,964 728,625,017 2024 711,439,964 49,800,797 464,149 761,704,911 761,413,143 2025 761,704,911 53,319,344 464,149 815,488,403 795,676,734 2026 815,488,403 57,084,188 464,149 873,036,741 831,482,187 2027 873,036,741 61,112,572 464,149 934,613,462 868,898,885 2028 934,613,462 65,422,942 464,149 1,000,500,553 907,999,335 2029 1,000,500,553 70,035,039 464,149 1,070,999,741 948,859,305 2030 1,070,999,741 74,969,982 464,149 1,146,433,871 991,557,974 2031 1,146,433,871 80,250,371 464,149 1,227,148,391 1,036,178,083 2032 1,227,148,391 85,900,387 464,149 1,313,512,928 1,082,806,097 2033 1,313,512,928 91,945,905 464,149 1,405,922,982 1,131,532,371 2034 1,405,922,982 98,414,609 464,149 1,504,801, 739 1,182,451,328 2035 1,504,801, 739 105,336,122 464,149 1,610,602,010 1,235,661,638 2036 1,610,602,010 112,742,141 464,149 1,723,808,300 1,291,266,411 2037 1, 723,808,300 120,666,581 464,149 1,844,939,030 1,349,373,400 Over(Under)Funded $ 495,565,630

Attachment 2 Schedule of Annual Amounts Remaining to be Collected Alabama Power Company Farley Nuclear Plant Unit 2 NRC Minimum Beginning Fund Fund Fund Ending Fund Decommissioning Balance Earnings Contributions Balance Estimate 2014 $ 369,629,218 s 490,295,000 2015 369,629,218 25,874,045 402,004 395,905,267 512,358,275 2016 395,905,267 27,713,369 402,004 424,020,640 535,414,397 2017 424,020,640 29,681,445 402,004 454,104,089 559,508,045 2018 454,104,089 31,787,286 402,004 486,293,379 584,685,907 2019 486,293,379 34,040,537 402,004 520,735,920 610,996,773 2020 520,735,920 36,451,514 402,004 557,589,438 638,491,628 2021 557,589,438 39,031,261 402,004 597,022,703 667,223,751 2022 597,022,703 41,791,589 402,004 639,216,296 697,248,820 2023 639,216,296 44,745,141 402,004 684,363,441 728,625,017 2024 684,363,441 47,905,441 402,004 732,670,886 761,413,143 2025 732,670,886 51,286,962 402,004 784,359,852 795,676,734 2026 784,359,852 54,905,190 402,004 839,667,045 831,482,187 2027 839,667,045 58,776,693 402,004 898,845,742 868,898,885 2028 898,845,742 62,919,202 402,004 962,166,948 907,999,335 2029 962,166,948 67,351,686 402,004 1,029,920,639 948,859,305 2030 1,029,920,639 72,094,445 402,004 1,102,417,087 991,557,974 2031 1,102,417,087 77,169,196 402,004 1,179,988,287 1,036,178,083 2032 1,179,988,2&7 82,599,180 402,004 1,262,989,472 1,082,806,097 2033 1,262,989,472 88,409,263 402,004 1,351,800,739 1,131,532,371 2034 1,351,800,739 94,626,052 402,004 1,446,828,794 1,182,451,328 2035 1,446,828,794 101,278,016 402,004 1,548,508,814 1,235,661,638 2036 1,548,508,814 108,395,617 402,004 1,657,306,435 1,291,266,411 2037 1,657,306,435 116,011,450 402,004 1,773,719,889 1,349,373,400 2038 1,773,719,889 124,160,392 402,004 1,898,282,286 1,410,095,203 2039 1,898,282,286 132,879,760 402,004 2,031,564,049 1,473,549,487 2040 2,031,564,049 142,209,483 402,004 2,174,175,537 1,539,859,214 2041 2,174,175,537 152,192,288 402,004 2,326,769,829 1,609,152,878 Over (Under)Funded $ 717,616,950

Attachment 3 Material Changes to Trust Agreement December 2013 Added Harbert U.S. Real Estate Fund Vas an Alternative Investment December 2013 Diversfied Fixed Income Management by adding two additional managers, Swarthmore and PIMCO November 2014 Moved funds for Fixed Income Management to Pyramis from PIMCO