View source for SNRC-1605, Submits Request for Exemption from Payment of Annual License Fee Under 10CFR171.11 for Plant

{{Adams
| number = ML20247E477
| issue date = 06/19/1989
| title = Submits Request for Exemption from Payment of Annual License Fee Under 10CFR171.11 for Plant
| author name = Leonard J
| author affiliation = LONG ISLAND LIGHTING CO.
| addressee name = Stello V
| addressee affiliation = NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
| docket = 05000322
| license number = 
| contact person = 
| document report number = SNRC-1605, NUDOCS 8907260189
| package number = ML20247E470
| document type = CORRESPONDENCE-LETTERS, INCOMING CORRESPONDENCE, UTILITY TO NRC
| page count = 6
| project = 
| stage = Request
}}

=Text=
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ggj@                    LONG ISLAND LIGHTING COM PANY
__ ,4,g                    ' SHOREHAM NUCLEAR POWER STATION P.O. DOX 618, NORTH COUNTRY ROAD
* WADING RIVER, N.Y.11792 1
                                                                                                                                     ')
MHN D. LEON ARD, JR.
VtCE PRE 310ENT . NUCLE AR OPE R ATIONS SNRC-1605        i JUN 191999 Mr. Victor Stello, Jr.
Executive Director for Operations U.S. Nuclear Regulatory Commission Washington, D.C..                 20555 Request for Exemption from Payment of the Annual License Fee Under 10 CFR Part 171 for the Shoreham Nuclear Power Station Operating License NPF-82 Shoreham Nuclear Power Station - Unit 1
                                                                         . Docket No. 50-322

==Dear Mr. Stello:==
j The Long Island Lighting Company (LILCO), which is licensed under NRC Facility Operating License NPF-82 respectfully requests an exemption from the Annual License fee required under 10 CFR 171.
LILCO requests that this exemption be effective ae long as Shoreham remains subject to the Settlement Agreement with New YorkLState.
Under the provisions of section 171.11, the Commission may grant an exemption from or reduction in the annual fee by taking into consideration the following factors:
(a)       Age of reactor (b)        Size of the reactor (c)        Number of customers in the rate base (d)        Net increase in kwh cost for each customer directly related to the annual fee assessed under this part (e)        Any other relevant matter which the licensee believes justifies the reduction of the annual fee
                                        '8907260189 890724 PDR         ADOCK 05000322PDL                                ISO--- 0 0 4 5 6 0 7
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SNRC-1605 Page 2 1
LILCO believes that several of these factors justify an exemption          j from the annual fee for LILCO's Shoreham Nuclear Power Plant at this time.

===Background===
On April 20, 1987 and February 23, 1988, the Nuclear Regulatory Commission ("NRC") granted Long Island Lighting Company ("LILCO" or "the company") an exemption from the Annual Fee requirements of 10 CFR 171. This exemption was based on the Shoreham Nuclear Power Station ("Shoreham") being limited to 5% operation while issues regarding offsite emergency planning were reviewed by the NRC. The exemption remained in effect until April 21, 1989 when those issues were resolved and a full power operating license for Shoreham was issued.
LILCO now requests a similar exemption from the fee requirements of 10 CFR 171 in light of the Settlement Agreement entered into between LILCO and the State of New York. As is described more fully below, the Settlement Agreement' currently prohibits LILCO from operating Shoreham at any power level.          Unless the Settlement Agreement is disapproved by LILCO's shareholders or the Settlement Agreement otherwise does not become effective, the Company will continue to be prohibited from operating Shoreham at all.       Therefore, the imposition of the users fee requirements of 10 CFR 171 poses an undue financial burden on the Company and its ratepayers.
The Shoreham Settlement The many years of litigation over Shoreham's licensing had a debilitating effect on the Company. Thus, on February 28, 1989, LILCO entered into a Settlement Agreement with the State of New York regarding the resolution of various Shoreham-related issues.
On March 1, 1989 LILCO sent a copy of the Settlement Agreement to the Commission. The Settlement Agreement contemplates, among other things, the transfer of Shoreham to the Long Island Power       i Authority for decommissioning.                                        l a
The Settlement Agreement provides that LILCO:
                                        " ...will not operate Shoreham pursuant to any authorization to operate Shoreham that may be or has been granted by the Nuclear Regulatory Commission, provided that all approvals    ;
l                                       except shareowners approval are received by April 15, 1989. l If all approvals, except shareowner approval, are received by ]
April 15, 1989, LILCO will not operate Shoreham unless this   l Agreement is disapproved by LILCO's shareowners."             j l
'                                 The Settlement Agreement has been approved by all necessary         i parties except for LILCO's shareholders.       Thus, the Company is currently prohibited from operating Shoreham at any power level. l

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SNRC-1605 Page 3 f                                         If the shareholders approve the Settlement Agreement, it will become effective and the Company will continue to be prohibited from operating Shoreham at any power level and will be required to transfer Shoreham to the Long Island Power Authority (LIPA or an entity designated by LIPA) for decommissioning. Therefore, the Settlement Agreement has the effect of aging and reducing the t
size of the Shoreham reactor to the point where it is unable to fulfill its useful purpose.
Financial and Other Relevant Consideration                              i Financial considerations (factors c and d) are pertinent.               i Because, under the Settlement, Shoreham cannot currently operate at any power level, it is prevented from producing marketable electrical energy from its nuclear reactor.        Therefore, Shoreham's operating costs continue to accrue but are not passed through to ratepayers as normal utility operating expenses.
Rather, they are capital expenditures that are a cash drain on LILCO now and ultimately would increase the burden on ratepayers           i later if the Settlement did not become effective. If the                f Settlement does become effective, these additional costs on            q Shoreham would be borne by the Company's shareholders. LILCO            '
requests an exemption from the annual license fee to reduce this financial burden.                                                      J LILCO further believes that factor (e) of 10 CFR 171.11 permits consideration of the demand upon the NRC staff review time due to a lack of plant operation. Clearly, Shoreham's demands on the staff activity is lessened by the lack of operation.        Low power testing is complete but the power ascension test program cannot begin unless the shareholders reject the Settlement Agreement.
Thus, plant activities are much more limited than for any other plant with a full power license.       Similarly, the review and analysis of periodic plant performance' reports to the NRC would appear to be much less time consuming for the staff since many of the entries are either negligible or nonexistent.
Bases For The Prior NRC Exemption On The Annual User's Fee In your {{letter dated|date=April 20, 1987|text=April 20, 1987 letter}} granting LILCO an exemption from the annual fees for FY 1987 you state, "In reaching our conclusion on your request, we took into consideration the unique       i circumstances associated with the protracted licensing proceedings and the fact that the 5% power limitation on your            i operation of Shoreham is not due to any failure or negligence on LILCO's part in fulfilling the requirements of 10 CFR 50 and other applicable NRC regulations."
The bases for reaching this conclusion remain the same today as i
they did then. First, Shoreham's protracted licensing proceedings caused the unique circumstances which gave rise to the Settlement Agreement. Second, the fact that Shoreham is not          l in operation is not due to any failure or negligence on LILCO's

SNRC 1605 Page 4 part in fulfilling the requirements of the Commission's regulations.                                                        t conclusion                                                          ,
As described above, the reasons for granting the previous exemption from the annual users fee remain the same. Similar to the prior exemotion request, this exemption request meets the two-tier crJteria of 50.12. The proposal is authorized by law, has no impH. cn the common defense and security and poses no undue risk v: t he public health and safety. Furthermore, adherence to the regulation as-is may result in undue hardship on LILCO's customers.                                                 ;
In light of the above, LILCO requests that while Shoreham is subject to the Settlement Agreement, the required annual users fees be waived.
Very truly yours, J           ,
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                                                                      . Leonard, Jr.
                                                                                     /,
o n Vi'pe President - Nuc(e r Operations
                                                                                      ~.
GJG/ap cc: S. Brown W. T. Russell                                       i F. Crescenzo i
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