RA-13-014, Duke Energy Progress, Inc., and Duke Energy, Florida, Inc.; Response to NRC Request for Additional Information Regarding the 2013 Biennial Decommissioning Financial Assurance Report

Duke Energy Progress, Inc., and Duke Energy, Florida, Inc.; Response to NRC Request for Additional Information Regarding the 2013 Biennial Decommissioning Financial Assurance Report

ML13190A314
Person / Time
Site:	Harris, Brunswick, Crystal River, Robinson
Issue date:	06/26/2013
From:	Annacone M Duke Energy Florida, Duke Energy Progress
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
RA-13-014
Download: ML13190A314 (8)

Text

o DMichael J. Annacone 526 South Church Street ENERGY Charlotte, NC 28202 Mailing Address:

Mail Code EC07H / P.O. Box 1006 Charlotte, NC 28201-1006 980-373-2544 704-382-6056 fax Serial: RA-13-014 June 26, 2013 10 CFR 50.4 10 CFR 50.75 U. S. Nuclear Regulatory Commission Attention: Document Control Desk Washington, D. C. 20555-001 Brunswick Steam Electric Plant, Units 1 and 2 Docket Numbers 50-325, and 50-324/Renewed License Numbers DPR-71, and DPR-62 Crystal River Unit 3 Nuclear Generating Plant Docket Number 50-302/License Number DPR-72 Shearon Harris Nuclear Power Plant, Unit 1 Docket Number 50-400/Renewed License Number NPF-63 H. B. Robinson Steam Electric Plant, Unit 2 Docket Number 50-261/Renewed License Number DPR-23

Subject:

Duke Energy Progress, Inc., and Duke Energy, Florida, Inc.; Response to NRC Request for Additional Information Regarding the 2013 Biennial Decommissioning Financial Assurance Report By letter dated May 29, 2013 (Agencywide Documents Access and Management System (ADAMS) Accession Number ML13135A206), the U. S. Nuclear Regulatory Commission (USNRC) issued a Request for Additional Information (RAI) related to the Biennial Decommissioning Financial Assurance Report submitted by Duke Energy Progress, Inc.,

formerly known as Carolina Power & Light Company, doing business as Progress Energy Carolinas, Inc., and Duke Energy Florida, Inc., formerly known as Florida Power Corporation, doing business as Progress Energy Florida, Inc., for Brunswick Steam Electric Plant, Units 1 and 2, Crystal River Unit 3 Nuclear Generating Plant, Shearon Harris Nuclear Power Plant, Unit 1, and H. B. Robinson Steam Electric Plant, Unit 2 (ADAMS) Accession Number ML13091A025). Response to the NRC Staff's RAI is provided in the enclosure to this letter.

There are no regulatory commitments associated with this letter.

United States Nuclear Regulatory Commission RA-13-014 Page 2 Should you have questions regarding the responses to the NRC Staffs RAI, please contact Paul Guill at (704) 382-4753 (paul.guill@duke-energy.com).

Sincerely, Michael J. Annacone, Vice President - Organizational Effectiveness &

Regulatory Affairs Enclosure

United States Nuclear Regulatory Commission RA-13-014 Page 3 CC (with enclosure):

V. M. McCree, Regional Administrator U.S. Nuclear Regulatory Commission - Region II Marquis One Tower 245 Peachtree Center Ave., NE Suite 1200 Atlanta, Georgia 30303-1257 W. M. Dean, Regional Administrator U.S. Nuclear Regulatory Commission - Region I 2100 Renaissance Boulevard, Suite 100 King of Prussia, PA 19406-2713 S. T. Hammann (DNMS/DB)

U.S. Nuclear Regulatory Commission - Region I 2100 Renaissance Boulevard, Suite 100 King of Prussia, PA 19406-2713 C. Gratton, NRR Project Manager (BSEP and CRNGP, Unit 3)

U. S. Nuclear Regulatory Commission 11555 Rockville Pike Mail Stop 8 D15 Rockville, MD 20852-2738 A. T. Billoch-Colon, NRR Project Manager (HBRSEP, Unit 2 and SHNPP, Unit 1)

U. S. Nuclear Regulatory Commission 11555 Rockville Pike Mail Stop 8 D15 Rockville, MD 20852-2738 M. P. Catts, Senior Resident Inspector Brunswick Steam Electric Plant, Unit Nos. 1 and 2 J. A. Hickey, Senior Resident Inspector H. B. Robinson Steam Electric Plant, Unit No. 2 J. D. Austin, Senior Resident Inspector Shearon Harris Nuclear Power Plant, Unit 1

ENCLOSURE Duke Energy Progress, Inc.

Duke Energy Florida, Inc.

Brunswick Steam Electric Plant, Units 1 and 2 Crystal River Unit 3 Nuclear Generating Plant Shearon Harris Nuclear Power Plant, Unit 1 H. B. Robinson Steam Electric Plant, Unit 2 RESPONSE TO NRC RAI REGARDING THE 2013 BIENNIAL DECOMMISSIONING FINANCIAL ASSURANCE REPORT

RAI-1: Citation for real rate of returns On March 28, 2013, Progress Energy reported various levels of assumed cost escalation rates and assumed earnings rates for the various co-owners and portions of the trust funds; however, Progress Energy did not provide the Public Service Commission of South Carolina the Order that was issued on September 23, 2011, that authorizes Progress Energy to use a real rate of return greater than 2 percent for the South Carolina portion of the qualified decommissioning trust fund. Progress Energy also did not provide the citation(s) for the Crystal River co-owners that allows for a greater than 2 percent real rate of return.

As stated in 10 CFR 50.75(f)(1),

the information in [the DFS] report must include [...] the assumptions used regarding rates of escalation in decommissioning costs, rates of earnings on decommissioning funds, and rates of other factors used in funding projections ...

Provide the citation (e.g., an Order by the rate-regulatory authority) by the regulatory entity that allows for the assumptions used regarding rates of escalation in decommissioning costs, rate of earnings on decommissioning funds and rates of other factors assumed in your DFS report for all owners of Brunswick, Harris, Crystal River, and HBRSEP.

Response to RAI-1:

The Public Service Commission of South Carolina Order that authorizes Progress Energy to use a real rate of return greater than 2 percent for the South Carolina portion of the qualified decommissioning trust fund is Order Number 2011-661 dated September 23, 2011, in Docket Number 2011-224-E (http://dms.psc.sc.gov/pdf/orders/A7546AFC-9DOB-549D-AAD4FAOO3DA443B1 .ldf).

Other rates provided by Progress Energy are unchanged from previous submittals.

A number of the co-owners of Brunswick, Harris and Crystal River units assumed greater than a 2 percent real rate of return on part or all of their decommissioning funds. These 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 March 28, 2013, Biennial Decommissioning Financial Assurance Report were those provided by the co-owners and thus, in themselves, represent the citation of the "rate setting authority."

RAI-2: Amounts accumulated:

In its March 28, 2013, report, Progress Energy provided the amount of decommissioning funds 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), but did not indicate if the amount stated was the before or after-tax balance.

The provisions of 10 CFR 50.75(f)(1)and (2) require the licensee to report the amount of funds accumulated to the end of the calendar year preceding the report.

Indicate if the amounts of decommissioning funds identified within the DFS report are the after-tax amount of funds accumulated through December 31, 2012. If not, provide the after-tax amounts of decommissioning funds accumulated through December 31, 2012, for Brunswick, Harris, Crystal River, and HBRSEP.

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Response to RAI-2:

The amounts reported by Progress Energy in the March 28, 2013, Biennial Decommissioning Financial Assurance Report for Brunswick, Harris, Crystal River and HBRSEP are net of 2012 tax obligations.

The remaining co-owners of Brunswick, Harris, and Crystal River are tax exempt; therefore, the amounts reported by them in the March 28, 2013, Biennial Decommissioning Financial Assurance Report are net of taxes.

RAI-3: Site-Specific Study Per 10 CFR 50.75(e)(1)(i) and (ii), the licensee must specifically describe the safe storage period in order to take credit for projected future earnings when it uses a site-specific estimate as the basis for using the prepayment or external sinking fund methods of financial assurance.

In'the March 31, 2013, submittal, Progress Energy referenced the Crystal River site-specific study that was submitted on November 29, 2011, but did not provide the site-specific cost estimate in 2012 dollars.

Provide the site-specific cost estimate in 2012 dollars for Crystal River, that was previously submitted to the NRC on November 29, 2011 pursuant to 10 CFR 50.75(f)(3). The site specific cost estimate should include a summary schedule of annual expenses, projected earnings, and end-of-year fund balances, expressed in 2012 dollars.

Response to RAI-3:

Table 1 provides a summary of annual expenses, projected earnings, and end-of-year fund balances expressed in 2012 dollars, inflated from the previously-submitted November 29, 2011, Crystal River site-specific cost estimate. The inflation rate was computed by escalating the principal components of the cost estimate, a methodology suggested in Regulatory Guide 1.159, Assuring the Availability of Funds for Decommissioning Nuclear Reactors, using US Bureau of Labor and Statistics inflation indices for most components and observed inflation over time in revisions to NUREG-1307, Report on Waste Burial Charges,for burial.

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RAI request: Annual expenses ProjectedEarnings End-of-yearFund Balances License Termination Annual Earnings on All Owners - Decommissioning Trust Year Cost in 2012 Dollars - Decommissioning Trust Fund Escalated at 2%

1.91% inflation Fund at 2% (minus 100% of expenses)

(in millions) (in millions) (in millions) 2012 $690.648 2013 $13.813 $704.461 2014 $14.089 $718.550 2015 $14.371 $732.921 2016 $4.136 $14.658 $743.444 2017 $54.425 $14.869 $703.888 2018 $44.244 $14.078 $673.722 2019 $5.714 $13.474 $681.482 2020 $5.729 $13.630 $689.382 2021 $5.714 $13.788 $697.456 2022 $5.714 $13.949 $705.691 2023 $5.631 $14.114 $714.174 2024 $5.584 $14.283 $722.874 2025 $5.569 $14.457 $731.762 2026 $5.569 $14.635 $740.828 2027 $5.569 $14.817 $750.075 2028 $5.584 $15.001 $759.493 2029 $5.569 $15.190 $769.113 2030 $5.569 $15.382 $778.926 2031 $5.569 $15.579 $788.935 2032 $5.584 $15.779 $799.130 2033 $5.569 $15.983 $809.544 2034 $5.569 $16.191 $820.165 2035 $5.569 $16.403 $830.999 2036 $5.584 $16.620 $842.035 2037 $5.569 $16.841 $853.307 2038 $5.569 $17.066 $864.803 2039 $5.569 $17.296 $876.530 2040 $5.584 $17.531 $888.477 2041 $5.569 $17.770 $900.677 2042 $5.569 $18.014 $913.121 2043 $5.569 $18.262 $925.814 2044 $5.584 $18.516 $938.747 2045 $5.569 $18.775 $951.953 2046 $5.569 $19.039 $965.422 2047 $5.569 $19.308 $979.161 Page 3 of 4

0 End-of-year Fund Balances License Termination Annual Earnings on All Owners - Decommissioning Trust Cost in 2012 Dollars - Decommissioning Trust Fund Escalated at 2%

Year 1.91% inflation Fund at 2% (minus 100% of expenses)

(in millions) (in millions) (in millions) 2048 $5.584 $19.583 $993.161 2049 $5.569 $19.863 $1,007.455 2050 $5.569 $20.149 $1,022.035 2051 $5.569 $20.441 $1,036.906 2052 $5.584 $20.738 $1,052.060 2053 $5.569 $21.041 $1,067.532 2054 $5.569 $21.351 $1,083.313 2055 $5.569 $21.666 $1,099.410 2056 $5.584 $21.988 $1,115.815 2057 $5.568 $22.316 $1,132.563 2058 $5.538 $22.651 $1,149.676 2059 $5.538 $22.994 $1,167.132 2060 $5.552 $23.343 $1,184.923 2061 $5.538 $23.698 $1,203.083 2062 $5.538 $24.062 $1,221.607 2063 $5.538 $24.432 $1,240.501 2064 $5.552 $24.810 $1,259.759 2065 $5.538 $25.195 $1,279.417 2066 $5.538 $25.588 $1,299.467 2067 $5.538 $25.989 $1,319.919 2068 $5.552 $26.398 $1,340.765 2069 $5.538 $26.815 $1,362.043 2070 $5.538 $27.241 $1,383.746 2071 $7.697 $27.675 $1,403.723 2072 $45.525 $28.074 $1,386.273 2073 $100.652 $27.725 $1,313.346 2074 $110.011 $26.267 $1,229.602 2075 $73.588 $24.592 $1,180.606 2076 $37.621 $23.612 $1,166.597 2077 $0.123 $23.332 $1,189.805 2078 $0.075 $23.796 $1,213.526 Total $768.121 Page 4 of 4