SNRC-1754, Requests That Annual License Fee for FY91 Be Held in Abeyance Pending Disposition of 900105 Amend Request

Requests That Annual License Fee for FY91 Be Held in Abeyance Pending Disposition of 900105 Amend Request

ML20059G682
Person / Time
Site:	Shoreham File:Long Island Lighting Company icon.png
Issue date:	09/07/1990
From:	Leonard J LONG ISLAND LIGHTING CO.
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
SNRC-1754, NUDOCS 9009130064
Download: ML20059G682 (6)

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,_s -9 LONG S O WGWNG COMPM

, SHOREHAM NUCLEAR POWER STATION z L

P.O. BOX 618.' NORTH COUNTRY ROAD

• WADING RIVER. N.Y. I 1792,

' JOHN D. LEONARD, JR.

4 =VCE PRE $0ENT.CMCE OF CORPORATE SERVCES

<. AND.

VCE PNSIDENT OFFCE OF NUCL4 W

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U.S; NuclearVAegulatory Commission.

. ATTN- ;Documrant Control Desk'  %

Washington, 0.1C. 20555:

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LILCO's Request ThatlThe Annual License Fee For FY'1991L For'Shoreham Be> Held In-Abeyance Pending-Disposition of LILCO's January 5, 1990' License' Amendment: Application,- ~

Or, In The--Alternative,' Request For An Exemption From The Annual-Licensing Fee:. Requirement Of 10 CFRLPart: 171- .

Shoreham Nucl~ ear 4 Power Station - Unit-l< j '

Docket-No 50-322i Ref: LILCO-letter SNRC-1664= dated, January 5, 1990'it oLU.S.-Nuclear, -

j Regulatory Commission fromtW. E. Steiger, Jr.[ subbcts' i License Change-Application Gentlemen:

By this letter, Long-Island Lighting Company (LILCO or'the .

Company) respectfully requests that'the requirement:that it pay.

the annual operating license' fee for FY 1991 be held in abeyance l o pending disposition of LILCO's January 5, 1990 application >for-a  ;

" possession only" license (POL)' for the Shoreham Nuclear Power l Station. In the alternative, LILCO requests,, pursuant-to 10 CFR 1 171.11, an exemption from the annual operating license fee requirement of 10 CFR Part 171 pending disposition'of:LILCO's POL q application.

~On August 17,.1990, the HRC issued a notice in the Federal Register in which it listed the annual license fees for, operating power reactors. 55 Fed. Reg. 33789 (Aug. 17, 1990). In-this notice the NRC stated that the assessed fee for Shoreham was

$719,000. Id. LILCO's first quarterly payment is due on~ October 1, 1990. Id. at 33790. Thus, LILCO respectfully requests that:

before October 1, 1990, the NRC confirm 1that the Company need not. i submit the first scheduled quarterly payment while the NRC is considering LILCO's January 5, 1990 request. J 1

9009130064 900907 (

gDR ADOCK 05000322 i h i ibe ., . PDC ,. 3

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SNRC-1754 Page12-Holding the-annualifee in abeyance is appropriate while tgy NRC-is considering LILCO's POL license amendmentLapplication.-

Under the regulations,' holders of_ POLS are:not required to pay )

the annual' fee. Specifically, 10 CFR'171.'3 states that the1PartL ]

-171' regulations " apply to~any person holding an operating license for a power reactor as defined in~this Part." In turn, S 171".5 defines." operating license" as meaning

having a111 cense issued pursuant to'S 50.57 of this chapter. .It does not include li-censes that only authorize possession of special nuclear material after the Commission J has received a request fr om the;1icensee txt ' l amend its licensee (sic) to permanentlys with-draw its authority 1to operate or the Commis-sion has permanently revoked such authority.

i 10 C.F.R. S 171.5. Thus, if LILCO's January 5 application is approved, LIpy0 will no longer be subject to the annual fee )

requirement.- l 1/ On. August 15 the NRC made a proposed' determination that LILCO's January 5 license amendment application involves "no. i significant hazards consideration." 55 Fed. 34,098_(Aug. 21, 1990). The NRC has provided a 30-day. comment. period on this proposed determination, after which time it may make a final determination of "no significant hazards consideration"-(if a request for a hearing is received) and issue the1 proposed i amendment, to be effective upon issuance.

2/ Arguably, LILCO is already not subject to the fee requirement. This is because the definition of " operating -

license" in S 171.5 could be read as, meaning that a-. licensee who j

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has merely applied (but not yet received) a POL is not considered to hold an operating license for purposes of the annual fee regulations. Such an interpretation is bolstered by language in i S 171.17, which states, in relevant part, that " (1)icenses revoked, suspended, or for which the licensee.has requested amendment to permanently withdraw operating authority during the FY will not result in any refund of the annual fee or any portion thereof." 10 C.F.R. S 171.17 (emphasis added). Seemingly, it would be necessary to specify that an applicant for a POL will not receive a prorated refund for the fiscal year only if, in fact, application for a POL is itself sufficient to bring a licensee out from under the regulatory definition of holding an

" operating license." The Supplementary Information that accompanied promulgation of the final rule can also be read as i supporting this interpretation. In particular, it states, in relevant part, that

SNRC-1754 .

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I In addition, on MarchL29, 19;n, the NRC-issued"a Confirmatory

-Order prohibiting.LILCO from piacing fuel back into the Shoreham reactor vessel without first obtaining NRC~permissi'on. 551 Fed.-

Reg. 12,758 (April 5, 1990)'._ The NRC issued this order in .. l response to a. letter. submitted by LILC01 on January 12, 1990, in which LILCO " reaffirm (ed);its commitment not to_ place nuclear- j fuel back into the Shoreham reactor" and " agree (d)- to a .  !

requirement" never to so do "without prior NRC approval." Letter from. William E. Steiger, Jr., Assistant Vice_ President-Nuclear Operations, to NRC _(SNRC-1674). LILCO had requested such anL order as far back=as_ September 19,.1989, when it " urge (d). the Commission, in its discretion, to issue a directive prohibiting LILCO from operating cr refueling the plant."1_ Letter from:

. Anthony F. Earley, Jr., LILCO. President, to Thomas E._Murley, Director of Nuclear Reactor Regulation, at 6. .This Confirmatory Order has'the practical effect of~ nullifying the full power authorization presently contained in NPF-82, 2.C. (1) , 'and constitutps a separate basis forethe NRC to grant LILCO's request.-

The NRC's regulations do not, appear'to allow a refund of any.

amount of the annualafee should a licensee obtainfa POL after the fee payment schedule has begun. For instance,.S 171.7 states, in relevant part:

-a/ (Continued)

(i) f a power reactor licensee has only 'the ' l authority to possess nuclear material and the Commission has received a request-from the licensee to amend its' license _to permanently withdraw its authority to operate the' reactor

. . . the licensee is not subject to_the annual fee under this part for that power _i reactor. Such reactors no longer benefit from the regulatory services that are the '

i basis for the annual fee.

51 Fed. Reg. 33228 (Sept. 18, 1986). In recent correspondence with the NRC, the licensee of the Fort St. Vrain facility has argued that the term " operating license," as defined by S 171.5, does not apply to a licensee who has r.pplied for a POL. See Letter from A. Clegg Crawford, Vice. President-Nuclear Operations, Public Service Co. of Colorado, to NRC (July 13, 1990) at 3 (arguing that "ia)s defiacd in Part 171.5, (operating license) does not' include licensees that have requested a license amendment for permanent withdrawal of authority to operate").

3/ In fact, as of August 26, 1990, NRC oversight of Shoreham is-no longer the responsibility of the Division of Reactor Projects-i I/II. Rather, responsibility for Shoreham-now rests with the Division of Reactor Projects-III/IV/V and Special Projects and, more specifically, with the Non-Power Reactors, Decommissioning and Environmental Project Directorate.

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SNRC E i754 ,

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l The l annuall fee for , a power L reactor gra'nted?

.its;1icense to, operate 1after October-1 of a.

FY.shall be prorated on-the.basistofLthe>

number of days remaining.in-that FY.1 7. .

. Licenses 1 revoked,' suspended, or for whichJthe'  :

licensee has requested ~ amendment to per- , f manently-withdraw operat'ing-authority during/ ' '

the FY will not result in any refund-of'the- <

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annual fee or;any portion 1thereof.

i 10 C.F.R.JS 171.17 (emphasisEadded). Accordingly, LILCO ' urges: ~ ',

thatLpayment of the annual fee!for-Shoreham be,placed in% abeyance-

' in order to avoid an unfair burden to.LILCO's.ratepayers. .

' In the alternative, pursua/t.to 10 C.F.R. S 171.11, LILCO respectfully requests :an c.amption from the annual fee requirement.. ~Section'171.11 provides?that the1NRC may, upon application, grant an exemptioni=in part, from the: annual fee-required-pursuant:

to this part.- ,An exemption under.this provi-i sion may be< granted by the Commission taking into consideration the following--factors:

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-(e) Any other relevant matter which the li-censee believes justifies the reduccion of the annual' fee.

10 C.F.R.-S 171.11. Obviously, the most " relevant matter" con-cerning Shoreham is that the plant has been permanentlyfdefueled and is to be decommissioned as soon as the NRC. authorizes.it.

Under LILCO's Settlement Agreement with'the State of New. York, LILCO will never operate Shoreham at any power level'. Thus, for all practical purposes, LILCO no longer holds an " operating.

. license" for Shoreham. As noted, LILCO's application forLa POL

- is currencly being assessed by the.NRC, and the Staff ~has made a proposed determination that.the amendment presents "no L significant hazards consideration." Moreover, the NRC itself has. -

prohibited LILCO from placing fuel back into the reactor vessel.

It follows that LILCO should not be subject to the users fee system, which is plainly directed towards utilities'with l functioning facilities.

A prior request by LILCO for an exemption from the.Part 171. fee requirement has been made,.and rejected, under different

' circumstances. See Letter from John D. Leonard, Jr., LILCO Vice l' President-Nuclear Operations, to Victor Stello, Jr., NRC

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i Execut{yeDirector,forOperations,-dated = June 19,.1989 (SNRC-

-1605).- This previous denial of a S 171 ll: exemption, however, is not. controlling here.g. In rejecting LILCO's prior request, the '

NRC-stated'that,its denialfwas basnd'on'the:factithatt " (t) here is currently no Federal restriction preventing full power operation of Choreham." -Letter from Victor Stello, Jr.~i to John D. '

~ Leor,ard, Jr. , dated July - 31, 1989. .The NRC reasoned.that the: '

decision not to operate Shoreham was "self-imposed ~and for_the convenie -This-rationale, of course, no longer applies.gpe ofToLILCO."

the acatrary,- as noted above, there is now a- ,

federal restriction preventing Shoreham's operation.- Ethe NRC's -

March.29, 1990 Confirmatory Order --Tand?LILCO's' request forLa POL is currentlyLundrargoing NRC. review.

LILCO respectfully requests that before October:1, 1990 the NRC-  ;

confirm that the Company,need not submit the first scheduled ,

quarterly payment'while the NRC:is.considering'this request'. .

i LILCO believes that this is' consistent with the.NRC's practice regarding previous requests by LILCO for a S 171.17 exemption (when Shoreham~was limited to 5% power). See, e.g.,. Letter:from C. James Holloway, Jr., Chief, License Fee Management' Branch, to John D. Leonard, Jr., dated December 14, 1988 (stating _that LILCO "will not be billed for any annual fee payments for Shoreham for FY 1989 while your application is _ under: consideration") .

It is also consistent with the NRC's handling of-Public Service Co of Colorado's most recent request for a S 171.17 exemption-for . ort =

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. t l 4/ In SNRC-1605, LILCO argued that, given:the Settlement i Agreement with the State of New York,= pursuant to which LILCO is prohibited from ever operating Shoreham, "the imposition of=the users fee requirements of 10 CFR 171 poses an undue ~ financial ~ I burden on the Company and its ratepayers." SNRC-1605 at 2. 1 q

i Ji/ Indeed, the NRC has previously recognized changed circumstances with respect to LILCO's. request for an exemption from the onsite property insurance requirements of 10 C.F.R. S 1 L

l 50.54(w). On May 22, 1989, LILCO requested an exemption from L this provision, based on the fact that LILCO had agreed never to

operate Shoreham and that, with-the plant in a defueled _

E condition, there was no health and safety need to carry the full. i amount of.the property insurance. Letter-from John D. Leonard, q l 1 I Jr., to NRC (SNRC-1596). On July 7, 1989, the NRC denied LILCO's' request, stating that it viewed "LILCO's current'non-operating restriction" as being "self-imposed-and for the convenience of- ,

LILCO." Letter from Walter R. Butler, Director,. Project Directorate I-2, to John D. Leonard , Jr. at - 2.- Upon LILCO's renewed request for an exemption on September 8, 1989 --

submitted.after (1) the Settlement Agreement bad become' fully effective and (2) LILCO had completed the defueling of the ,

reactor vessel -- the NRC granted LILCO's request on April 30, 1990. 55 Fed. Reg. 18,993 (May 7, 1990)-,

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[SNRC-1754' Page 6 ,

St.EVrain.: See Letter from-Diane'B;.Dandois, Chief, License Fee

.and Debt Collection Branch,.to A'. Clegg Crawford, dated' July.31,

.1990. (stating that~the " annual = fee-for FY~1990iwill:not be billed while:your' request is:under review")'.

LILCO will continue,;of! course, to; pay'those~ fees that become due

, for pertinent.NRC licensing services: under .the schedules ,

establi'shed -in- 10 ' C.F.R-. Part 170.' t Should you have any questions'or requireiadditional-  ;

clarification, please do not hesitate-to contact myfoffice.- ,

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Very truly.yours,

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. q$ / i o D. Le nard,.J .-

Vi e President - Off, of Corporate-Services i and Office.of Nuclea H ap

l. cci S. Brown T. T. Martin.

B. Norris .

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