RA-12-013, Decommissioning Funding Status Report

Decommissioning Funding Status Report

ML12100A159
Person / Time
Site:	Crystal River
Issue date:	03/26/2012
From:	Alexander D Progress Energy Carolinas
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
RA-12-013
Download: ML12100A159 (13)

Text

Progress Energy ogres Enrgy10 CFR 50.75(f)(1)

PO Box 1551 411 Fayetteville Street Mall Raleigh NC 27602 Serial: RA-12-013 March 26, 2012 United States Nuclear Regulatory Commission ATTENTION: Document Control Desk Washington, DC 20555-0001 CRYSTAL RIVER UNIT 3 NUCLEAR GENERATING PLANT DOCKET NO. 50-302 / LICENSE NO. DPR-72 DECOMMISSIONING FUNDING STATUS REPORT Ladies and Gentlemen:

Pursuant to 10 CFR 50.75(f)(1), Florida Power Corporation, now doing business as Progress Energy Florida, Inc., submits this status report for funding the decommissioning of Crystal River Unit 3 Nuclear Generating Plant (CR-3). CR-3 is within five years of its operating license expiration date of December 3, 2016. Therefore, until license renewal is obtained, the status report for funding the decommissioning of CR-3 must be submitted annually in accordance with 10 CFR 50.75(f)(1). The specific information required by 10 CFR 50.75(f)(1) is listed in the attachment to this letter.

As of December 31, 2011, the total assets in the Florida Power Corporation qualified decommissioning trust funds were approximately allocated as 55%, 33%, and 12% in Domestic Equity, Fixed Income, and International Equity, respectively. As of December 31, 2011, the total assets in the Florida Power Corporation non-qualified decommissioning trust funds were approximately allocated as 100.0% in Municipal Bonds.

Also enclosed, as a convenience to the NRC staff, is the status report from each co-owner for funding the decommissioning of CR-3. None of the co-owners assumes any responsibility for the information contained in any other co-owner's report.

A number of the co-owners of CR-3 assumed greater than a 2% real rate of return on part or all of their decommissioning funds. In accordance with 10 CFR 50.75(e):

A licensee ... may take creditfor collected earningson the decommissioningfunds using up to a 2 percent annual real rate of return ... A licensee may use a credit ofgreater than 2 percent if the licensee's rate-settingauthority has specifically authorizeda higher rate.

The below listed co-owners are municipally owned or cooperative electric providers that set their own rates and assumptions regarding needs for decommissioning. The rates provided in the enclosures are those provided by the co-owners and thus, in themselves, represent the citation of the "rate-setting authority."

City of Alachua (3.972% real rate of return)

City of Bushnell (3.972% real rate of return)

United States Nuclear Regulatory Commission RA-12-013 Page 2 City of Gainesville (3.972% real rate of return)

City of Kissimmee (3.972% real rate of return)

City of Leesburg (3.972% real rate of return)

City of Ocala (3.972% real rate of return)

Seminole Electric Cooperative, Inc. (4.55% real rate of return)

Additionally, as further evidence of the rate setting authority's approval of a greater than 2 percent real rate of return, the City of Alachua, City of Bushnell, City of Gainesville, City of Kissimmee, City of Leesburg, and City of Ocala, through their agent, the Florida Municipal Power Agency, are partners in a Forward Delivery Agreement that guarantees a 7.422% rate of return through September 2016. The Forward Delivery Agreement was previously provided to the staff in a letter dated July 20, 2011, (ML11208B460).

This document contains no new regulatory commitments.

Please contact me at (919) 546-5357 if you need additional information concerning this report.

Sincerely, Donna Alexander Manager - Nuclear Regulatory Affairs DBM

Attachment:

0 Status of Financial Assurance Mechanism, Crystal River Unit 3 Nuclear Generating Plant

Enclosures:

• City of Alachua, Status of Financial Assurance Mechanism (1 page)

" City of Bushnell, Status of Financial Assurance Mechanism (1 page)

" City of Gainesville, Status of Financial Assurance Mechanism (1 page)

" City of Kissimmee, Status of Financial Assurance Mechanism (1 page)

• City of Leesburg, Status of Financial Assurance Mechanism (1 page)

" City of New Smyrna Beach, Status of Financial Assurance Mechanism (1 page)

• City of Ocala, Status of Financial Assurance Mechanism (1 page)

" Orlando Utilities Commission, Status of Financial Assurance Mechanism (1 page)

" Seminole Electric Cooperative, Inc., Status of Financial Assurance Mechanism (1 page)

United States Nuclear Regulatory Commission RA-12-013 Page 3 c: USNRC Region II USNRC Resident Inspector - CR3 F. Saba, NRR Project Manager - CR3 R. Bris6- Chairman, Florida Public Service Commission

United States Nuclear Regulatory Commission Attachment to RA- 12-013 Page 1 of 1 Attachment Status of Financial Assurance Mechanism Crystal River Unit 3 Nuclear Generating Plant Docket No. 50-302 / License No. DPR-72

• Amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75(b) and (c) and NUREG-1307, Rev. 14:

$442.5 million at expiration of current license, December 3, 2016 Progress Energy Florida, Inc. share (91.7806%) = $406.1 million

" Amount of decommissioning funds accumulated as of December 31, 20111:

$559,052,592 (Net of 2011 tax obligations.)

• Schedule of the annual amounts remaining to be collected None

• Assumptions used regarding rates of escalation in decommissioning costs, rates of earnings on decommissioning funds, and rates of other factors used in funding projections Rate of escalation in decommissioning costs = 0%

Rate of earnings on decommissioning funds = 2%

• Contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(v)

None

• Modifications occurring to a licensee's current method of providing financial assurance since the last submitted report None

• Material changes to trust agreements None The Funds shown reflect the total amount of funds in the Trust, all of which are available for Radiological Decommissioning, if needed.

United States Nuclear Regulatory Commission RA-12-013 Enclosure Page 1 of 1 CITY OF ALACHUA Status of Financial Assurance Mechanism Crystal River Plant -- Docket No. 50-302 / License No. DPR-72

1) Amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75(b) and (c) and NUREG-1307, Rev. 14.

$ 442.5 million at expiration of current license on December 3, 2016.

City of Alachua share (0.0779%) = $344,700.

2) Fund Balance for the amount of funds accumulated in the decommissioning trust fund at the end of December 31, 2011':

$245,721 (Assumed earnings rate is 7.422% through September 2016 and 4.00% thereafter.)

$328,910 (Assumed earnings rate is 4.00%.)

$574,631 (Total: The sum may differ from the total due to rounding. This total is net of taxes as the co-owner is tax exempt.)

3) Annual amounts remaining to be collected:

None

4) Assumptions:

The assumed Cost Escalation Rate is 3.45%.

The assumed earnings rate is 7.422% for the portion invested at a guaranteed fixed rate through 2016 (guaranteed by a forward delivery agreement) and 4.00% for the rest.

5) Contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(v):

None

6) Modifications occurring to a licensee's current method of providing financial assurance since the last submitted report:

None

7) Material changes to trust agreements:

None The Funds shown reflect the total amount of funds in the Trust, all of which are available for Radiological Decommissioning, if needed.

United States Nuclear Regulatory Commission RA-12-013 Enclosure Page 1 of 1 CITY OF BUSHNELL Status of Financial Assurance Mechanism Crystal River Plant -- Docket No. 50-302 / License No. DPR-72

1) Amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75(b) and (c) and NUREG-1307, Rev. 14.

$442.5 million at expiration of current license on December 3, 2016.

City of Bushnell share (0.0388%) = $171,687.

2) Fund Balance for the amount of funds accumulated in the decommissioning trust fund at the end of December 31, 20111:

$122,387 (Assumed earnings rate is 7.422% through September 2016 and 4.00% thereafter.)

$162,588 (Assumed earnings rate is 4.00%.)

$284,975 (Total: The sum may differ from the total due to rounding. This total is net of taxes as the co-owner is tax exempt.)

3) Annual amounts remaining to be collected:

None

4) Assumptions:

The assumed Cost Escalation Rate is 3.45%.

The assumed earnings rate is 7.422% for the portion invested at a guaranteed fixed rate through 2016 (guaranteed by a forward delivery agreement) and 4.00% for the rest.

5) Contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(v):

None

6) Modifications occurring to a licensee's current method of providing financial assurance since the last submitted report:

None

7) Material changes to trust agreements:

None The Funds shown reflect the total amount of funds in the Trust, all of which are available for Radiological Decommissioning, if needed.

United States Nuclear Regulatory Commission RA-12-013 Enclosure Page 1 of 1 CITY OF GAINESVILLE Status of Financial Assurance Mechanism Crystal River Plant -- Docket No. 50-302 / License No. DPR-72

1) Amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75(b) and (c) and NUREG-1307, Rev. 14.

$442.5 million at expiration of current license on December 3, 2016.

City of Gainesville share (1.4079%) = $6,229,831.

2) Fund Balance for the amount of funds accumulated in the decommissioning trust fund at the end of December 31, 20111:

$4,440,963 (Assumed earnings rate is 7.422% through September 2016 and 4.00% thereafter.)

$5,646,213 (Assumed earnings rate is 4.00%.)

$10,087,176 (Total: The sum may differ from the total due to rounding. This total is net of taxes as the co-owner is tax exempt.)

3) Annual amounts remaining to be collected:

None

4) Assumptions:

The assumed Cost Escalation Rate is 3.45%.

The assumed earnings rate is 7.422% for the portion invested at a guaranteed fixed rate through 2016 (guaranteed by a forward delivery agreement) and 4.00% for the rest.

5) Contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(v):

None

6) Modifications occurring to a licensee's current method of providing financial assurance since the last submitted report:

None

7) Material changes to trust agreements:

None 1The Funds shown reflect the total amount of funds in the Trust, all of which are available for Radiological Decommissioning, if needed.

United States Nuclear Regulatory Commission RA-12-013 Enclosure Page 1 of 1 CITY OF KISSIMMEE Status of Financial Assurance Mechanism Crystal River Plant -- Docket No. 50-302 / License No. DPR-72

1) Amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75(b) and (c) and NUREG-1307, Rev. 14.

$442.5 million at expiration of current license on December 3, 2016.

City of Kissimmee share (0.6754%) = $2,988,584.

2) Fund Balance for the amount of funds accumulated in the decommissioning trust fund at the end of December 31, 2011':

$2,130,426 (Assumed earnings rate is 7.422% through September 2016 and 4.00% thereafter.)

$3,172,164 (Assumed earnings rate is 4.00%.)

$5,302,590 (Total: The sum may differ from the total due to rounding. This total is net of taxes as the co-owner is tax exempt.)

3) Annual amounts remaining to be collected:

None

4) Assumptions:

The assumed Cost Escalation Rate is 3.45%.

The assumed earnings rate is 7.422% for the portion invested at a guaranteed fixed rate through 2016 (guaranteed by a forward delivery agreement) and 4.00% for the rest.

5) Contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(v):

None

6) Modifications occurring to a licensee's current method of providing financial assurance since the last submitted report:

None

7) Material changes to trust agreements:

None The Funds shown reflect the total amount of funds in the Trust, all of which are available for Radiological Decommissioning, if needed.

United States Nuclear Regulatory Commission RA-12-013 Enclosure Page 1 of 1 CITY OF LEESBURG Status of Financial Assurance Mechanism Crystal River Plant -- Docket No. 50-302 / License No. DPR-72

1) Amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75(b) and (c) and NUREG-1307, Rev. 14.

$442.5 million at expiration of current license on December 3, 2016.

City of Leesburg share (0.8244%) = $3,647,896.

2) Fund Balance for the amount of funds accumulated in the decommissioning trust fund at the end of December 31, 20101:

$2,600,419 (Assumed earnings rate is 7.422% through September 2016 and 4.00% thereafter.)

$3,324,743 (Assumed earnings rate is 4.00%.)

$5,925,162 (Total: The sum may differ from the total due to rounding. This total is net of taxes as the co-owner is tax exempt.)

3) Annual amounts remaining to be collected:

None

4) Assumptions:

The assumed Cost Escalation Rate is 3.45%.

The assumed earnings rate is 7.422% for the portion invested at a guaranteed fixed rate through 2016 (guaranteed by a forward delivery agreement) and 4.00% for the rest.

5) Contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(l)(v):

None

6) Modifications occurring to a licensee's current method of providing financial assurance since the last submitted report:

None

7) Material changes to trust agreements:

None The Funds shown reflect the total amount of funds in the Trust, all of which are available for Radiological Decommissioning, if needed.

United States Nuclear Regulatory Commission RA-12-013 Enclosure Page 1 of 1 CITY OF NEW SMYRNA BEACH Status of Financial Assurance Mechanism Crystal River Plant -- Docket No. 50-302 / License No. DPR-72

1) Amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75(b) and (c) and NUREG-1307, Rev. 14.

$442.5 million at expiration of current license on December 3, 2016.

City of New Smyrna Beach share (0.5608%) = $2,481,490.

2) Fund Balance for the amount of funds accumulated in the decommissioning trust fund at the end of December 31, 2011':

$3,996,001 (Net of taxes as the co-owner is tax exempt.)

3) Annual amounts remaining to be collected:

None

4) Assumptions:

The assumed cost escalation rate is 3.45%.

The assumed earnings rate is 0.1%.

5) Contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(I )(v):

None

6) Modifications occurring to a licensee's current method of providing financial assurance since the last submitted report:

None

7) Material changes to trust agreements:

None The Funds shown reflect the total amount of funds in the Trust, all of which are available for Radiological Decommissioning, if needed.

United States Nuclear Regulatory Commission RA-12-013 Enclosure Page 1 of 1 CITY OF OCALA Status of Financial Assurance Mechanism Crystal River Plant -- Docket No. 50-302 / License No. DPR-72

1) Amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75(b) and (c) and NUREG-1307, Rev. 14.

$442.5 million at expiration of current license on December 3, 2016.

City of Ocala share (1.3333%) = $5,899,733.

2) Fund Balance for the amount of funds accumulated in the decommissioning trust fund at the end of December 31, 20101:

$4,205,651 (Assumed earnings rate is 7.422% through September 2016 and 4.00% thereafter.)

$5,339,555 (Assumed earnings rate is 4.00%.)

$9,545,206 (Total: The sum may differ from the total due to rounding. This total is net of taxes as the co-owner is tax exempt.)

3) Annual amounts remaining to be collected:

None

4) Assumptions:

The assumed Cost Escalation Rate is 3.45%.

The assumed earnings rate is 7.422% for the portion invested at a guaranteed fixed rate through 2016 (guaranteed by a forward delivery agreement) and 4.00% for the rest.

5) Contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(v):

None

6) Modifications occurring to a licensee's current method of providing financial assurance since the last submitted report:

None

7) Material changes to trust agreements:

None

'The Funds shown reflect the total amount of funds in the Trust, all of which are available for Radiological Decommissioning, if needed.

United States Nuclear Regulatory Commission RA-12-013 Enclosure Page 1 of 1 ORLANDO UTILITIES COMMISSION Status of Financial Assurance Mechanism Crystal River Plant -- Docket No. 50-302 / License No. DPR-72

1) Amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75(b) and (c) and NUREG-1307, Rev. 14.

$442.5 million at expiration of current license on December 3, 2016.

Orlando Utilities Commission share (1.6015%) = $7,086,493.

2) Fund Balance for the amount of funds accumulated in the decommissioning trust fund at the end of December 31, 20101:

$12,849,522 (Net of taxes as the co-owner is tax exempt.)

3) Annual amounts remaining to be collected:

None

4) Assumptions:

The assumed cost escalation rate is 2.97%.

The assumed earnings rate is 1.50% in 2012, 2.75% in 2013, and 3.25% in 2014 and 4.00% thereafter.

5) Contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(v):

None

6) Modifications occurring to a licensee's current method of providing financial assurance since the last submitted report:

None

7) Material changes to trust agreements:

As of October 3, 2011, OUC amended and restated the Decommissioning Trust Agreement to transfer trust duties to Wells Fargo from Regions Bank.

1The Funds shown reflect the total amount of funds in the Trust, all of which are available for Radiological Decommissioning, if needed.

United States Nuclear Regulatory Commission RA-12-013 Enclosure Page 1 of 1 SEMINOLE ELECTRIC COOPERATIVE, INC.

Status of Financial Assurance Mechanism Crystal River Plant -- Docket No. 50-302 / License No. DPR-72

1) Amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75(b) and (c) and NUREG-1307, Rev. 14.

$442.5 million at expiration of current license on December 3, 2016.

Seminole Electric Cooperative, Inc. share (1.6994%) = $7,519,692.

2) Fund Balance for the amount of funds accumulated in the decommissioning trust fund at the end of December 31, 2011 :

$10,395,834 (Net of taxes as the co-owner is tax exempt.)

3) Annual amounts remaining to be collected:

None

4) Assumptions:

The assumed cost escalation rate is 3.45%.

The assumed earnings rate is 8.00%.

5) Contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(v):

None

6) Modifications occurring to a licensee's current method of providing financial assurance since the last submitted report:

None

7) Material changes to trust agreements:

None The Funds shown reflect the total amount of funds in the Trust, all of which are available for Radiological Decommissioning, if needed.