PLA-6171, Decommissioning Report of Financial Assurance

Decommissioning Report of Financial Assurance

ML070930447
Person / Time
Site:	Susquehanna
Issue date:	03/23/2007
From:	Mckinney B Susquehanna
To:	Document Control Desk, NRC/NRR/ADRO
References
PLA-6171
Download: ML070930447 (7)

Text

SI T Britt T. McKinney PPL Susquehanna, LLC Sr. Vice President & Chief Nuclear Officer 769 Salem Boulevard Berwick, PA 18603 Tel. 570.542.3149 Fax 570.542.1504 .-..

btmckinney@pplweb.com S TM MAR 2 3 2007 Submitted pursuant to 10CFR50.75(f)(1)

U.S. Nuclear Regulatory Commission Attn: Document Control Desk Mail Stop OP1-17 Washington, DC 20555 SUSQUEHANNA STEAM ELECTRIC STATION DECOMMISSIONING REPORT OF FINANCIAL ASSURANCE Docket Nos. 50-387 PLA-6171 and 50-388 In accordance with 10 CFR 50.75(f)(1), attached please find the PPL Susquehanna, LLC decommissioning report of financial assurance for our ninety percent interest in Susquehanna Unit 1 and Unit 2.

If you have any questions regarding our decommissioning report, please direct them to Mr. R. R. Sgarro, Manager - Nuclear Regulatory Affairs, at (610) 774-7552.

Sincerely, B. T. McKinney

Attachment:

Decommissioning Report Copy: Regional Administrator - Region I Mr. A. J. Blamey, NRC Sr. Resident Inspector Mr. R. V. Guzman, NRC Project Manager Mr. R. Janati, DEP/BRP

Attachment 1 to PLA-6171 Page 1 of 2 NRC Decommissioning Funding Status Report December 31, 2006 PPL Susquehanna, LLC Susquehanna Steam Electric Station PPL Susquehanna, LLC hereby submits this Decommissioning Report in compliance with 10 CFR 50.75(f)(1) for its 90% share of Susquehanna Unit 1 and Unit 2.

PPL Susquehanna has analyzed its current funding levels and planned contributions for both Unit 1 and Unit 2 and concluded that these funding levels and planned contributions will be sufficient to pay for the decommissioning costs of each unit at the time permanent termination of operations is expected for each unit, when earnings and inflation is taken into account, if at that time PPL Susquehanna elects to pursue a SAFSTOR option.

The SAFSTOR decommissioning option was developed as part of a Susquehanna Site-Specific Decommissioning Cost Analysis and assumes site license termination 60 years after permanent cessation of operation of Unit 1. After final shutdown of Unit 1, the sequence of events leading to termination of the 10 CFR Part 50 license is assumed to be as follows:

0 1.5 year transition into decommissioning and preparation for safe storage

• 52 year period of dormancy

• 1.5 year period of site reactivation and preparation for decomimissioning

• 5 year period of decontamination and dismantlement culminating in license termination.

These durations are rounded slightly and are for Unit 1. The Unit 2 durations are slightly less in some cases because of the later expected shutdown (about 20 months after Unit 1).

However, license termination for both units still occurs 60 years after Unit 1 shutdown.

The Susquehanna Site-Specific Decommissioning Cost Analysis is confidential and proprietary to PPL Susquehanna, but can be made available for inspection upon request.

Information is submitted to provide Financial Assurance Unit # 1 Unit #2

1. The minimum amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75 (b) and (c).

At December 31, 2006 $482,233,500 $482,233,500 PPL Susquehanna LLC's calculation of the NRC minimum formula is reflected in Exhibit 1.

Attachment 1 to PLA-6171 Page 2 of 2

2. The Amount accumulated at the end of the calendar year preceding the date of the report for items included in 10 CFR 50.75 (b) and (c).

Market Value at Dec. 31, 2006 $244,907,701 $265,351,554

3. See Exhibit 2 for a schedule of the annual amounts remaining to be collected.

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

Estimated Inflation rate for decommissioning costs 4% 4%

Estimated Earnings rates on decommissioning funds 7.5% 7.5%

Rates of other factors used in funding projections None None The Inflation and Earnings Rate are based on an order entered by the Pennsylvania Public Utility Commission (Pa. PUC) on September 27, 1995 at Docket No. R-00943271.

5. Any power sale contracts upon which licensee is None None relying to provide financial assurance.

6. Modifications to licensee's method of providing None None financial assurance since previous report.

7. Material changes to trust agreement. None None

Exhibit 1 Page 1 of 3 Calculation of Escalation Factors Used in Computation of Minimum Financial Assurance Amount for Decommissioning Susquehanna Steam Electric Station Units One And Two Boiling Water Reactor (BWR)

Escalation Factor Formula - 0.65(L) + 0.13(E) + 0.22(B)

Escalation = (.65 x 2.210) + (.13 x 2.206) + (.22 x 10.206)

Escalation = (1.43650 + 0.28678 + 2.24532) = 3.969 (L) - Labor - (Bureau of Labor Statistics, Table 4, Compensation, Employment Cost Index, for total compensation, private industry workers, by bargaining status, region and area size)

Northeast region - September 2006 Index Number 288.4 January 1986 Index Number 130.5 L= 288.4 equals 2.210 130.5 (E) - Energy - (Producer Price Index Commodities, Series ID: WPU0543 and WPU0573)

E= (.54P + .46F)

E= (.54 x 1.578) + (.46 x 2.944)

E= 0.85212 + 1.35424 = 2.206 P - Industrial Power, 500 kW demand - (Commodity 0543)

August 2006 Index Number 180.2 January 1986 Index Number 114.2 (1)

P= 180.2 equals 1.578 114.2

Exhibit 1 Page 2 of 3 F - Light fuel oils - (Commodity 0573)

August 2006 Index Number 241.4 January 1986 Index Number 82.0 F= 241.4 equals 2.944 82.0 (B) Waste Burial NUREG - 1307, Rev. 12, "NRC Report on Waste Burial Charges" Table 2.1 South Carolina Factor 10.206 (1) Represents the national base value of P at January 1986. The base value of P is no longer determined on a regional basis.

Exhibit 1 Page 3 of 3 PPL Susquehanna, LLC Computation of Minimum Financial Assurance Amount for Decommissioning Susquehanna Steam Electric Station Units One and Two Unit 1 Unit 2 Base amount for BWR greater than 3,400 MWt = $135 million The Power Level of Unit 1 and Unit 2 are = 3,489 MWt $135,000,000 $135,000,000 Ownership percentage 90% 90%

Base amount per unit 121,500,000 121,500,000 Escalation Factor 3.969 3.969 Escalated Amount per Unit $482,233,500 $482,233,500 Total Escalated Amount (Unit I + Unit 2) $964,467,000

Exhibit 2 Page 1 of I PPL Nuclear Decommissioning Trust Expected Contributions Unit 1 Unit 2 Grand Total 2007 $6,070,664 $8,998,475 $15,069,139 2008 5,557,640 8,238,025 13,795,665 2009 5,441,813 8,066,330 13,508,143 2007-2009 $17,070,117 $25,302,830 $42,372,947