View source for B17887, Requests Exemption from Requirements of 10CFR140.11(a)(4) Which Requires Licensees to Maintain Secondary Financial Protection Beyond Primary Layer

{{Adams
| number = ML20216J377
| issue date = 09/28/1999
| title = Requests Exemption from Requirements of 10CFR140.11(a)(4) Which Requires Licensees to Maintain Secondary Financial Protection Beyond Primary Layer
| author name = Necci R
| author affiliation = NORTHEAST NUCLEAR ENERGY CO.
| addressee name = 
| addressee affiliation = NRC OFFICE OF NUCLEAR MATERIAL SAFETY &amp; SAFEGUARDS (NMSS)
| docket = 05000245
| license number = 
| contact person = 
| document report number = B17887, NUDOCS 9910050079
| document type = CORRESPONDENCE-LETTERS, INCOMING CORRESPONDENCE
| page count = 8
| project = 
| stage = Other
}}

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D         Nr@ea8g                                                Rope Ferry Rd. (Houte 156), Tcterford, CT 06385 h    Nuclear Energy                                         niiistone Nociear Po er siation                      {
Nor'heast Nudear Energy Company l
P O. Box 128 l
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* Waterford. CT 06385 0128                             '
(860) 447 1791 Fax (860) 444 4277 The Nonheast Utilities Sysicm                        i SEP 2 81999                 i Docket No. 50-245 B17887               j Re: 10CFR140.8                      l 10CFR140.11                   !
Director of Nuciear Material Safety and Safeguards U.S. Nuclear Regulatory Commission                                                                                :
Washington, D. C. 20555                                                                                           l l
Millstone Nuclear Power Station, Unit No.1 Request For Exemption                                                            )
From The Financial Protection Reauirements Of 10CFR140.11 Pursuant to 10CFR140.8, Northeast Nuclear Energy Company (NNECO) requests an                                      I exemption from the requirement of 10 CFR 140.11(a)(4) for Millstone Unit No.1.
10CFR140.11(a)(4) requires licensees to maintain secondary financial protection (in the form of private liability insurance under an industry retrospective rating plan p oviding for deferred premium charges on a pro rata share of costs and claims)                                   i beyond the primary layer of $200 million in offsite financial protection.
As described in the attachment to this.!etter, NNECO requests that Millstone Unit No.1 be allowed to withdrew from this secondary layer of coverage.
There are no regulatory commitmants contained within this letter.
If you have any questions, please contact Mr. Bryan S. Ford at (860) 437-5895.
Very truly yours,                                                      f, Northeast Nuclear Energy Company
                                                                 . ;,n
                                                               . hO V - t r 09d                    R. P. Necci 00 Vice President Nuclear Oversight and Regulatory Affairs cc:    See page 2 9910050079 990929 PDR     ADOCK 05000245                                                                                              l J                   PDR l

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U.S. R::gul: tory Commission
        . B17887/Page 2 -
        . cc:   ' H. J. Miller, NRC Region i Administrator L. L. Wheeler, NRC Project Manager, Millstone Station Unit 1 P. C. Cataldo, NRC Resident inspector U.S. Nuclear Regulatory Commission Attention: Document Control Desk Washington, D. C. 20555 Director, Bureau of Air Management Monitoring and Radiation Division Department of Environments.1 Protection
                - 79 Elm Street Hartford, CT 06106-5127 l
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Docket No. 50-245 B17887 1
                          >                                    t Attachment 1 Millstone Nuclear Power Station, Unit No.1 Request For Exemption From the Financial Protection Requirements of 10CFR140.11 1
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l September 1999
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U.S. Regulatory Commission B17887/ Attachment 1/Pcge 1 Request For Exemption From The Financial Protection Requirements Of 10CFR140.11                      l l
A. Background                                                                           l On November 4,1995, Millstone Unit No.1 was shut down and has not restarted or returned to power operation.' Soon after the shutdown, all fuel in the reactor vessel was transferred into the spent fuel pool where it remains.
              ; Northeast Nuclear Energy Company (NNECO) notified the USNRC by letter               ,
dated July 21,1998, that it had permanently ceased operations and would no           l longer operate Millstone Unit No.1. Consequently, Millstone Unit No.1 is now         l licensed as a possession only facility. In its current state, the unit is defueled and in an inherently stable condition suitable for long-term decommissioning.
B. Request i
Pursuant to 10CFR140.8, NNECO requests an exemption from the requirement             I of 10CFR140.11(a)(4). 10CFR140.11(a)(4) requires licensees to maintain               I secondary financial protection (in the form of private liability insurance under an industry retrospective rating plan providing for deferred premium charges on a pro rata share of costs and claims) beyond the primary layer of $200 million in      ;
offsite financial protection. NNECO requests that Millstone Unit No.1 be             j permitted to withdraw frnm this secondary layer of coverage.                         ;
i C. Discussion and Justification
: 1. Current Requirements 10CFR140.11(a)(4) requires licensees of reactors with a rated capacity of 100,000 electrical kilowatts or more to participate in a secondary insurance pool. The current maximum obligation for secondary financial protection is $83.9 rnillion with respect to any nuclear incident. The total financial protection required by regulation for offsite liability for any incident at Millstone Unit 1 would be tne primary layer of $200 million, plus the secondary layer of $83.9 million multiplied by the number of licensed power reactors participating in the pool.
The underlying purpose of Section 140.11 is to provide sufficient liability insurance to ensure funding for claims resulting from a nuc! ear incident or a precautionary evacuation.
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U.S. Regulatory Commission
: B17887/ Attachment 1/Pcge 2
: 2. '
Plant Status Special circumstances exist because of the permanently shutdown and defueled condition of Millstone Unit No.1. In-a permanently shutdown and defueled ' reactor facility, the reactor system will never again be operated, thus eliminating the possibility of accidents involving the reactor. ; A further reduction in risk occurs because decay heat from the
                           . spent fuel decreases over time.
This reduction in decay heat reduces the amount of energy available to heat up the spent fuel to a temperature that could compromise the ability of the fuel cladding to retain fission products. In the case of Millstone Unit No.1, the uni: has not operated, and has been defueled since late 1995.
L                           The risk of a radiological release declines substantially after a plant L                            permanently defuels its reactor. - The short-lived radionuclides contained in the spent fuel decay away, thereby reducing the inventory' of
                                                    ~
l                            radioactive materials that could be released to the environment. This is of i
                           . particular importance with regard to noble gases and volatile isotopes.
1 3c        Previous NRC Determinations The requested exemption to the secondary financial protection layer has          ;
!                            been granted to other similarly positioned NRC licensees (e.g., Maine Yankee and Connecticut Yankee). The NRC has found in such cases l                           that this action is authorized by law, and the withdrawal of licensees from
;                            the secondary financial protection layer requirements of Part 140.11(a)(4)
!                            is in the public interest.
: 4.        Design Basis Accidents -                                                       '
NNECO updated the Fimi Safety Analysis Report (FSAR) for scenarios involving a- spent fuel handling accident. The FSAR analysis, which became the bounding design basis accident, reflects the current shutdown configuration of the piant. . A summary of' the analysis, assumptions, and result.s were submitted with the proposed Technical Specifications for the permanently defueled condition by {{letter dated|date=April 19, 1999|text=letter dated April 19,1999}}, and supplemented by {{letter dated|date=August 25, 1999|text=letter dated August 25,1999}}.
The new accid'ent scenario results in a negligible site boundary dose and minimal risk to the public health and safety. Therefore, tnere is sufficient
                           . justification .for the reduction in the financial protection requirements
                           ; applicable to Millstone Unit No.1.

U.S. Ragulatory Commission B17887/Attrchment 1/Page 3'
: 5. -    Beyond Design Basis Accidents NNECO has conducted a plant specific evaluation of the potential for a "beyond design basis" zircalloy fire following the postulated complete loss of_the spent fuel pool inventory. Millstone Unit No.1 was permanently shutdown on November 4,1995, almost four years ago. The Millstone Unit No.1 reactor fuel has not operated for a perion well beyond the decay time necessary to preclude a zircalloy fire as established in the plant specific evaluation and generic evaluations such as the one in NUREG-1353, Regulatory Analysis for the Resolution of Generic Issue
                      ' 82, "Beyond Design Basis Accidents in Spent Fuel Pools."
Since air would cool the spent fuel sufficiently to avoid combustion, the      l potential loss of spent fuel pool' water inventory is no longer a major        {
concern with regard to offsite dose. NRC-sponsored analyses support            l the conclusion that the rapid oxidation of the fuel cladding is no longer      !
possible.                                                                      l The NRC staff has also previously deternined that participation in the secondary insurance pool for offsite financial protection is not required for  l a permanently shutdown and defueled plant after the time that air cooling of the spent fuel is sufficient to maintain the integrity of the fuel cladding.
As previously noted, sufficient time has already elapsed to ensure the integrity of tho Mi!lstone Unit No.1 spent fuel cladding.
: 6. Cleanup Costs
_ The NRC staff has generically estimated the cleanup costs of accidents Econsidered to be the most costly at a permanently defueled site with spent fuel stored in the spent fuel pool. In SECY 96-256, " Changes to the Financial Protection Requirements for Permanently Shutdown Nuclear Power Reactors,10 CFR 50.54(w) and 10 CFR 140.11," dated December
                      -17, 1996, the NRC staff found negligible cleanup costs for the accident scenarios previously discussed. However, even in the case of negligible offsite damage, lawsuits could result from offsite releases. An appropriate level of financial liability coverage is therefore needed to account for potential judgments, settlements and other claims. The primary financial protection covering the site will remain at $200 million because there are other reactors licensed to operate at the Millstone site. This amount of financial protection _is sufficient for any postulated incident occurring at Millstone Unit No.1.
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U.S. R:gul tory Commission B17887/Att: chm:nt 1/Paga 4 D.
* Exemption Request The specific requirements for granting exemptions from Part 140 regulations are set forth in 10CFR140.8. The commission is authorized to grant an exemption upon a determination that the exemption: (a) is authorized by law; and (b) is otherwise in the public interest. The following supports a finding by the NRC staff that an exemption should be authorized:
: 1.      The requested exemption is authorized by law and has been previously and routinely granted by the Commission. Other permanently shutdown               )
plants granted insurance exemptions include Maine Yankee and                      l Connecticut Yankee, among others. In addition, the requested exemption is consistent with the guidelines presented by the NRC staff in SECY 96-256 and the NRC proposed rule for 10CFR Parts 50 and 140, noticed in the Federal Reaister on October 30,1997,
: 2.      The requested exemption produces no undue risk to the public health and           i safety. As stated above, the risks associated with Millstone Unit No.1 in its current condition and the possible resulting damage to property are greatly reduced from those that existed during power operations. Primary coverage for offsite damage claims will be retained on a site basis. The elimination cf secondary coverage is commensurate with the reduction in the risk and consequences of an accident. NRC-sponsored analyses support this determination. There would be no physical change to the plant or its stored spent fuel as a result of this exemption.
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: 3.      The reque.sted exemption is consistent with the public interest by eliminating a potential unr'ecessary financial burden associated with insurance requirements that are excessive for a permanently shutdown l               and defueled facility. ' This financial liability has no benefit to the licensee, i               the public, or the Federal government. As such', the financial exposure of l               the specified insurance requirement represents a hardship not appropriate for a permanently shutdown and defueled facility.
! E. Environmental Impact Pursuant to 10CFR140.8, NNECO is requesting an exemption to the requirements of 'iOCFR140.11(e)(4) regarding secondary financial protection coverage for offsite liability. The proposed exemption is exempt from requiring consideration of environmentalimpacts as provided by 10CFR51.22(c)(10). The proposed exemption will only permit changes to the insurance and/or indemnity requirements applicable to Millstone Unit No.1.

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U.S. R:gulatory Commission B17887/Att:chment 1/Page 5 F. -  Conclusion The risks for which 10CFR140.11 require a licensee to obtain specific financial protection for an operating plant are no longer applicable to Millstone Unit No.1.
Therefore, NNECO has concluded that this level of financial protection is unnecessary. Accordingly, NNECO requed the NRC Staff to exempt Millstone Unit No. 1 from the secondary financial protection requirements more appropriate for an operating plant and approve elimination of the need for secondary offsite financial protection.          Specifically, the exemption to 10CFR140.11 will allow withdrawal from the secondary insurance pool for offsite liability and its retrospective premium liability. The exemption will reduce the financial burden not appropriate for a permanently defueled plant by eliminating requirements that do not serve the underlying purpose of the regulation. The remaining $200 million in primary offsite insurance provides sufficient financial  ,
protection to account for potential judgements, settlements, or claims.            l 4}}