NRC-09-0019, Decommissioning Funding Status Report

Decommissioning Funding Status Report

ML090970293
Person / Time
Site:	Fermi
Issue date:	03/31/2009
From:	Plona J DTE Energy
To:	Document Control Desk, NRC/FSME
References
NRC-09-0019
Download: ML090970293 (8)

Text

Joseph H. Plona Site Vice President 6400 N.Dixie Highway, Newport, MI 48166 Tel: 734.586.5910 Fax: 734.586.4172 DTE Energy-7;.iý1 10 CFR 50.75(f)(1)

March 31, 2009 NRC-09-0019 U. S. Nuclear Regulatory Commission Attention: Document Control Desk Washington D C 20555-0001

References:

1) Enrico Fermi Atomic Power Plant, Unit No. 1 NRC Docket No. 50-16 NRC License No. DPR-9

Subject:

Decommissioning Funding Status Report for Fermi 1 This letter provides the report required by 10 CFR 50.75(f)(1) on the status of Detroit Edison's decommissioning fund for Fermi 1.

Fermi 1 is a permanently shutdown experimental sodium cooled breeder reactor, which last operated in 1972. It is in the SAFSTOR status and its possession-only license expires in 2025. Decommissioning activities are being performed with the goal of removing the radioactive material and terminating the Fermi 1 license. The cost of decommissioning was based on the existing site-specific estimate, adjusted by an engineering review and the full nuclear decommissioning schedule.

USNRC NRC-09-0019 March 31, 2009 Page 2 The requested annual decommissioning fund information for Fermi 1, reported in 2008 dollars, is provided as an enclosure to this letter. The prepayment trust method and Detroit Edison funding combined with a DTE Energy guarantee is providing funding assurance.

Documentation of the financial test for this guarantee is also provided as an enclosure to this letter.

Should you have any questions or require additional information, please contact Ms. Lynne Goodman of my staff at (734) 586-1205.

Sincerely, Joseph H. Plona Site Vice President JHP/DTB/dtb Enclosures (1)

Attachment (2) cc: T. Smith P. Lee (NRC Region III)

T. Strong (State of Michigan)

Regional Administrator, Region Ill NRC Resident Office

USNRC NRC-09-0019 March 31, 2009 Page 3 bcc: A. Bodipo-Memba P. Cavazos W. A. Colonnello J. M. Davis L. S. Goodman R. Johnson T. Maloche A. Moore J. J. Musial K. L. O'Neill R. Pelzer J. Plona L. D. Schenk S. Stasek K. Stump Fermi 1 Staff Information Management (140 NOC) [Fermi 1 Decommissioning Funding Records]

NRR Chron File NRC Notebook (Fermi 1) to NRC-09-0019 Page 1 ENCLOSURE FERMI 1 NRC DECOMMISSIONING FUNDING STATUS REPORT Enrico Fermi Atomic Power Plant, Unit 1 NRC Docket No. 50-16 NRC License No. DPR-9 to NRC-09-OO 19 Page 2 NRC Decommissioning Funding Status Report Fermi 1 (Millions of Dollars)

1. The decommissioning cost estimate for Fermi 1 is based on a site-specific estimate adjusted by an engineering review. The estimated remaining decommissioning cost in both nominal and 2008 dollars. -$28

2. The market value of the Fermi 1 trust fund was approximately $2.5 million as of December 31, 2008. -$2.5

4. Amount fund is above (or below) estimated remaining costs. -$(26)

A DTE Energy guarantee has been chosen as the assurance method for Fermi l's shortfall.

5. The assumptions used regarding escalation in decommissioning cost, rates of earnings on decommissioning fund, and rates of other factors used in funding projections.

Non-fixed price decommissioning costs were assumed to increase at a rate equal to 4%

per year with earnings on decommissioning fund to be equal to 0%. Detroit Edison is currently using a 3.3% factor for annual inflation projections.

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

7. Any material changes to the trust agreement: None

Attachment 1 Page 1 of 2 NRC-09-0019 Letter from David E. Meador, Chief Financial Officer of DTE Energy Company, Corporate Parent of The Detroit Edison Company, Including Costs Estimates and Data From Audited Financial Statements U.S. Nuclear Regulatory Commission Attn: Document Control Desk Washington, D.C. 20555-0001 I am the Chief Financial Officer of DTE Energy Company (DTE or firm), One Energy Plaza, Detroit, MI 48226-1279, a Michigan corporation. This letter is in support of this firm's use of the financial test to demonstrate financial assurance, as specified in 10 CFR Part 50.

DTE guarantees, through the parent company guarantee submitted to demonstrate compliance under 10 CFR Part 50, the decommissioning of the following facility owned by The Detroit Edison Company, a Michigan corporation and wholly-owned subsidiary of this firm. The current cost estimates for decommissioning, and the amounts being guaranteed, are shown for each facility:

Name of Location of Current Amount Being Facility _ Facility Cost Estimates Guaranteed Enrico Fermi 6400 N. Dixie Hwy $28,000,000 $30,000,000 Atomic Power Newport, MI 48166 Plant Unit 1 This firm is required to file a Form 10K with the U.S. Securities and Exchange Commission for the latest fiscal year 2008.

This fiscal year of this firm ended on December 31. The figures for the following items marked with an asterisk are derived from this firm's independently audited, year-end financial statements and footnotes for the latest completed fiscal year, ended December 31, 2008.

FINANCIAL TEST: ALTERNATIVE II

1. Decommissioning cost estimates or guaranteed amount for facility

[license number DPR 9] $30,000,000

2. Current notes rating of most recent unsecured issuance of this firm Rating BBB-/Baa2 Name of rating service Standard & Poor's and Moody's Investors Service

3. Date of issuance of notes May 2006

4. Date of maturity of notes June 1, 2016

Attachrrent 1 Page 2 of 2 NRC-09-0019 5". Tangible net worth** $3,881,000,000 6*. Total assets in the United States $24,567,000,000 Yes No

7. Is line 5 at least $10 million? X

8. Is line 5 at least 6 times line 1? X

9. Are at least 90 percent of firm's assets located in the United States? If not, complete line 10. ' X

10. Is line 6 at least 6 times line 1? X

11. Is the rating specified on line 2 "BBB" or better (if issued by Standard & Poor's) or "Baa" or better (if issued by Moody's)*** X denotes figures derived from financial statements Tangible net worth is defined as net worth minus goodwill, patents, trademarks, and copyrights "BBB" and "Baa" are rating categories, not specific ratings, so DTE Energy has interpreted the criteria to be that the ratings are within the BBB category or Baa category or better. DTE meets this standard.

I certify that the information is true and correct to the best of my knowledge.

DTE Energy Company By____

David E. Meador Executive Vice President and Chief Financial Officer, DTE Energy Company March 27, 2009

Attachrent Page 1 of 1 ie roitte. Deloitte & Touche LLP Suite 900 600 Renaissance Center Detroit, MI 48243-1895 USA Tel: +1 313 396 3000 Fax: +1 313 396 3618 www.deloitte.com INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES The DTE Energy Company Detroit, Michigan We have performed the procedures included in the U.S. Nuclear Regulatory Commission ("NRC") Regulatory Guide 1.159 Assuring The Availability Of Funds For Decommissioning Nuclear Reactors, and enumerated below, which were agreed to by DTE Energy Company ("DTE"), solely to assist the specified parties in evaluating DTE's compliance with the financial test option as of December 31, 2008, included in the accompanying letter dated March 27, 2009 from Mr. David Meador, Chief Financial Officer of DTE. DTE's management is responsible for DTE's compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

The procedures that we performed and related findings are as follows:

1. We recomputed from, or reconciled to, the audited consolidated financial statements of DTE as of and for the year ended December 31, 2008, on which we have issued our report dated February 27, 2009 (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the adoption of new accounting standards) the information included in items 5 and 6 under the caption Alternative II in the letter referred to above. We noted no differences, after rounding to the nearest $1 million.

We were not engaged to, and did not, conduct an examination, the objective of which would be the expression of an opinion on the accompanying letter dated March 27, 2009. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the information use of the specified parties listed above and is not intended to be and should not be used by anyone other than these specified parties.

March 27, 2009 Member of Deloitte Touche Tohmatsu