ML18092A082

Decommissioning Funding Status Report, Financial Test and Independent Public Accountants' Letter of Attestation

ML18092A082
Person / Time
Site:	Kewaunee
Issue date:	03/23/2018
From:	Stoddard D G Dominion Energy Kewaunee
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
18-089
Download: ML18092A082 (12)

Text

Dominion Energy Kewaunee, Inc. 5000 Dominion Boulevard, Glen Allen, VA 23060 Dominion Energy.com March 23, 2018 Dominion ;iiiii" Energy United States Nuclear Regulatory Commission Attentic,m:

Document Control Desk Washimgton, D. C. 20555-0001 Serial No.18-089 NRA/T JS Rev. 0 Docket No. 50-305 License No. DPR-43 DOMINION ENERGY KEWAUNEE, INC. KEWA:UNEE POWER STATION DECOiVIMISSIONING FUNDING STATUS REPORT, FINANCIAL TEST AND INDEP:ENDENT PUBLIC ACCOUNTANTS' LETTER OF ATTESTATION Pursuant to 10 CFR 50. 75(f)(1) and 10 CFR 50.82(a)(8)(v)-(vii), Dominion Energy Kewaunee, Inc. (DEK) is providing this report on the status of decommissioning funding for Kewaunee Power Station (KPS). Enclosure 1 provides the following information for KPS: Table I -Decommissioning Funding Status Report for KPS Summary Information as of December 31, 2017 Table II -Decommissioning Funding Status Report for KPS Annual Cash Flow Analysis Starting January 1, 2018 through End of Decommissioning The fol.lowing information is provided in support and as part of this filing: 1. The escalation of decommissioning costs from the Cost Study's 2012 dollars to 2(1)18 dollars is 1.59% and is based upon the average of CPI-U rates for that pE~riod. The mnemonics are "FCPIU.US, CPI: Urban Consumer -All Items (Index, 1S~82-84=100, SA)." 2. The escalation of decommissioning costs shown in Table II is held at 0.0% based or,1 assuming a 2.0% Real Rate of Return. 3. The growth rate on Trust Funds is held at the allowed 2.0% Real Rate of Return over the escalation rate. 4. No rate regulatory authority citation for KPS is referenced because KPS is* a merchant unit. 5. There are no contracts upon which DEK is relying under paragraph 10 CFR 5~).75(e)(1)(v) and there were no modifications to the current method of providing fin1ancial assurance since the last submitted report. 6. There are no annual funding amounts for KPS. 7. Trust Fund balances shown in this report are market value and after-tax on re,alized gains and losses. The Trust Fund balances have not been adjusted for umrealized gain or loss positions not currently taxable. 8. Since the previous annual submittal .on March 31, 2017 (Serial No.17-080, A(DAMS Accession No. ML 17100A308) there have been no changes to the Trust a~reements established for nuclear decommissioning of KPS. )O d / ;v/!l Serial No.18-089 KPS Decommissioning Funding Status Report Page 2 of 2 9. RE~maining Decommissioning Estimated Cost is adjusted to reflect timing di1ferences and higher costs during .Plant dormancy.

Additionally, in a submittal dated January 28, 2015 (Serial No.15-001, ADAMS Accession No. ML 15034A312), Dominion Resources, Inc. (now known as Dominion Energy, Inc.) committed to provide ongoing information pertaining to its continuing ability to provide additional financial assurance by submitting, by March 31 of each year in com,ection with DE K's annual financial assurance status report; (1) information demonstrating the results of the financial test in either Paragraph 11.A.1 or Paragraph 11.A.2 of Appendix A to 10 CFR Part 30 for the immediately preceding calendar year, and; (2) a letter from its independent certified public accountant attesting to the data and accurac,~y of the financial test1. This information is included in Attachments 1 and 2, respectively.

Please contact Mr. Craig D. Sly at (804) 273-2784 if you have any questions or require additiornal information.

Sincerely, Q.,._~ D. G. Stoddard Senior Vice President and Chief Nuclear Officer Dominion Energy Kewaunee, Inc.

Enclosure:

1. De~commissioning Funding Status Report for KPS Summary Information as of De~cember 31, 2017 Attachments:

1. Financial Test for Year Ended December 31, 2017, Paragraph 11.A.2 of Appendix A to 10 CFR Part 30 2. De~loitte

& Touche LLP Attesting Letter of Accuracy of the Financial Test Commitments made in this letter: None cc: l 1 J. S. Nuclear Regulatory Commission fRegion Ill ~~443 Warrenville Road, Suite 210 Lisle, IL 60532-4352 Mr. T. H. Carter NRC Senior Project Manager (KPS) U.S. Nuclear Regulatory Commission, Mail Stop T-8 F5 Two White Flint North '11545 Rockville Pike Rockville, MD 20852-2738 1 DEK is aware that the American Institute of Certified Public Accountants (AICPA) has informed the NRC that certified public accountants are precluded from issuing any form of report or assurance on matters related to solvency. (See ADAMS Accession No. ML 13094A316.)

Serial No.18-089 KPS Decommissioning Funding Status Report Enclosure 1 Decommissioning Funding Status Report for KPS Summary Information as of December 31, 2017 Kewaunee Power Station Dominion Energy Kewaunee, Inc. (DEK)

Serial No.18-089 Enclosure 1 Page 1 of 3 Kewaunee Power Station Decommissioning Funding Status Report as of December 31, 2017 Table I Decommissioning Funding Status Report for KPS Summary Information as of December 31, 2017 10 CFR 50.82 (a)(8)(v)-(vii) (in millions)

Decomrnissionin c1 Trust Fund Balances 10 CFR Reference ls0.82(a)(8)(v)(A)

I s0.82(a)(8)(vii)(A)

Fund Elalance Tvoe of Trusts Comments $ 773.112 Qualified fund balance As of: 12/31/2017

$ -Non-aualified fund balance As of: 12/31/2017

$ 134.960 Less costs incurred prior years but not vet billed to Trust Actual Cost in: As Scent Dollars $ 638.152 Adiusted decommissionina fund balance As of: 12/31/2017 Other Financial Assurance Methods BeinQ Relied Upon 10 CFR Reference I 50.82(a)(8)(v)(A)

I Nc,ne Prior Years Decommissionina Expenditures 10 CFR Reference I 50.82(a)(8)(v)(A)

I To,tal License Term Spent Fuel Mgmt Site Restoration Comments $ 48.542 $ 9.062 $ 39.480 $ -2017 Cost in: 2017 Dollars $ 203.298 $ 93.642 $ 109.656 $ -2012-2016 Cost in: As Scent Dollars $ 251.840 $ 102.704 $ 149.136 $ -Total Prior Year in: As Scent Dollars Prior Year Expenditures

-Variance to Estimated Escalated Cost 10 CFR Reference I 50.82(a)(8)(v)(B)

I To,tal License Term Spent Fuel Mgmt Site Restoration Comments $ 48.542 $ 9.062 $ 39.480 $ -Actual Cost in: 2017 Dollars $ 24.240 $ 16.396 $ 7.844 $ -NRC Auth. $ in: 2017 Dollars $ 24.302 $ (7.334) $ 31.636 $ -Variance1:

License Termination and Spent Fuel Management due to delay in spent fuel pool off-load campaign.

Remaining Decommissioning Estimated Cost <11 10 CFR Reference I so.82(a)(8)(v)(B) 1 s0.82(a)(8)(vii)(B)

Total <2 J License Term Soent Fuel Mgmt Site Restoration Corrunents

$ 828.393 $ 473.044 $ 317.081 $ 38.268 Estimate in: 2018 Dollars DecomrnissioninQ Criteria Upon Which the Estimate is Based 10 CFR Reference I 50.82(a)(8)(v)(B)

I SAFSTOR Any Modification To Method of Providing Financial Assurance 10 CFR Reference I 50.82(a)(B)(v)(C)

I Nc,ne Anv Material Chanaes To Trust AQreement Since Previous Report 10 CFR Reference I 50.82(a)(B)(v)(D)

I Nc,ne Need For Additional Financial Assurance 10 CFR Reference l50.82(a)(B)(vi)

I 50.82(a)(B)(vii)(C)

Nc,ne See Annual Cash Flow Analvsis in Table II Inputs tc, Remainina Cost and Fundina Analysis I I 2018 Start vear of analvsis 1.59% Escalate study dollars from 2012$ to Start Year of Analysis usinQ CPI averaQe (2012 to Start Year of Analysis) 0.00% Escalation rate 2018 & bevond 2.00% Fund Qrowth rate 2018 & beyond (Reflects NRC allowed 2% Real Rate of Return) Annual ex1Jenditures Projected ann*1al expenditures

-see Annual Cash Flow Analysis in Table II (1) Remaining Decommissioning Estimated Cost is adjusted to reflect timing differences and higher costs during plant dormancy.

(2) Differenc:es are due to rounding.

Serial No.18-089 Enclosure 1 Page 2 of 3 Year 2018 2019 2020 2021 2022 2023 2024 2025 2026 20:a 2028 2029 20<10 20<11 20:12 20,13 20,14 20:15 20:16 20:11 20:18 20:l9 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 2061 2062 2063 2064 2065 2066 2067 2068 2069 2070 2071 2072 2073 Kewaunee Power Station Decommissioning Funding Status Report as of December 31, 2017 Table II Decommissioning Funding Status Report for KPS Annual Cash Flow Analysis Starting January 1, 2018 through End of Decommissioning 10 CFR 50.82 (a)(8){v)-(vii)

!In millions)

Column 3 Column 1 Column 2 Remaining Column 4 Column 5 Column 6 Beginning Earnings License Remaining Remaining Remaining of on Tennlnation Spent Fuel Mgmt Site Restoration SAFSTOR Year Trust Funds Expenditures Elcpe ndltures Expenditures Expenditures Balance (Reflects 2% RRoRl (Reflects 0% Escl (Reflects 0% Escl (Reflects 0% Escl (Reflects 0% Escl $ 638.152 $ 12.519 $ 7.167 $ 17.214 $ -$ 24.381 $ $ 626.290 $ 12.392 $ 3.140 $ 10.283 $ -$ 13.424 $ $ 625.258 $ 12.371 $ 3.291 $ 10.155 $ -$ 13.446 $ $ 624.183 $ 12.352 $ 3.208 $ 9.960 $ -$ 13.168 $ $ 623.367 $ 12.337 $ 3.125 $ 9.900 $ -$ 13.025 $ $ 622.679 $ 12.324 $ 3.109 $ 9.896 $ -$ 13.004 $ $ 621.998 $ 12.310 $ 3.109 $ 9.896 $ -$ 13.004 $ $ 621.304 $ 12.296 $ 3.109 $ 9.896 $ -$ 13.004 $ $ 620.596 $ 12.284 $ 2.859 $ 9.896 $ -$ 12.754 $ $ 620.126 $ 12.275 $ 2.859 $ 9.896 $ -$ 12.754 $ $ 619.646 $ 12.271 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 619.723 $ 12.273 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 619.801 $ 12.274 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 619.881 $ 12.276 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 619.962 $ 12.277 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 620.045 $ 12.271 $ 3.102 $ 9.896 $ -$ 12.997 $ $ 619.319 $ 12.264 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 619.389 $ 12.266 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 619.461 $ 12.267 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 619.534 $ 12.269 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 619.608 $ 12.270 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 619.684 $ 12.272 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 619.761 $ 12.273 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 619.840 $ 12.275 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 619.921 $ 12.276 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 620.003 $ 12.278 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 620.087 $ 12.280 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 620.172 $ 12.282 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 620.260 $ 12.283 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 620.348 $ 12.285 $ 2.299 $ 9.896 $ -$ 12.194 $ $ 620.439 $ 12.287 $ 2.310 $ 9.896 $ -$ 12.206 $ $ 620.520 $ 12.391 $ 1.903 $ -$ -$ 1.903 $ $ 631.008 $ 12.601 $ 1.903 $ -$ -$ 1.903 $ $ 641.706 $ 12.815 $ 1.903 $ -$ -$ 1.903 $ $ 652.618 $ 13.033 $ 1.903 $ -$ -$ 1.903 $ $ 663.749 $ 13.256 $ 1.903 $ -$ -$ 1.903 $ $ 675.102 $ 13.483 $ 1.903 $ -$ -$ 1.903 $ $ 686.681 $ 13.715 $ 1.903 $ -$ -$ 1.903 $ $ 698.493 $ 13.951 $ 1.903 $ -$ -$ 1.903 $ $ 710.541 $ 14.192 $ 1.903 $ -$ -$ 1.903 $ $ 722.830 $ 14.438 $ 1.903 $ -$ -$ 1.903 $ $ 735.364 $ 14.688 $ 1.903 $ -$ -$ 1.903 $ $ 748.149 $ 14.944 $ 1.903 $ -$ -$ 1.903 $ $ 761.190 $ 15.205 $ 1.903 $ -$ -$ 1.903. $ $ 774.492 $ 15.471 $ 1.903 $ -$ -$ 1.903 $ $ 788.060 $ 15.742 $ 1.903 $ -$ -$ 1.903 $ $ 801.899 $ 16.019 $ 1.903 $ -$ -$ 1.903 $ $ 816.015 $ 16.301 $ 1.903 $ -$ -$ 1.903 $ $ 830.413 $ 16.589 $ 1.903 $ -$ -$ 1.903 $ $ 845.099 $ 16.762 $ 13.961 $ -$ -$ 13.961 $ $ 847.900 $ 16.707 $ 25.123 $ -$ -$ 25.123 $ $ 839.484 $ 16.302 $ 48.724 $ -$ -$ 48.724 $ $ 807.063 $ 15.028 $ 111.344 $ -$ -$ 111.344 $ $ 710.746 $ 13.199 $ 101.608 $ -$ -$ 101.608 $ $ 622.338 $ 11.786 $ 53.852 $ -$ 12.269 $ 66.121 $ $ 568.002 $ 11.076 $ 0.120 $ 2.278 $ 25.999 $ 28.397 $ Remaining$

in 2018 Dollars $ 473.044 $ 317.081 $ 38.268 $ 828.393 Est. Fund Balance (end of Deconmissioning) (in Future$ escalated at 0.0% & 2.0% Real Rate of Return Fund Growth Rate) $ Est. Futnd Balance (end of Decorrrnissioning) discount to 2018 Dollars Discount Rate = 2.00% $ Column 7 End of Year Balance 626.290 625.258 624.183 623.367 622.679 621.998 621.304 620.596 620.126 619.646 619.723 619.801 619.881 619.962 620.045 619.319 619.389 619.461 619.534 619.608 619.684 619.761 619.840 619.921 620.003 620.087 620.172 620.260 620.348 620.439 620.520 631.008 641.706 652.618 663.749 675.102 686.681 698.493 710.541 722.830 735.364 748.149 761.190 774.492 788.060 801.899 816.015 830.413 845.099 847.900 839.484 807.063 710.746 622.338 568.002 550.681 550.681 185.306 Serial No.18-089 Enclosure 1 Page 3 of 3 Table II Definitions:

Column 1: Column 2: Column 3: Column 4: Column 5: Column 6: Column 7: Beginning o.f Year Balance: Reflects the beginning-of-year Trust Fund balance at a 0.0% cost escalation rate and a 2.0% Real Rate of Return (RRoR) on fund growth. Earnings on Trust Funds: Reflects earnings on funds remaining in the Trust. A 2.0% RRoR Fund growth rate is used for 2018 through 2073 which reflects the allowed 2.0% RRoR over a 0.0% cost escalation rate. The annual 2.0% RRoR earnings are calculated on the beginning balance less 50% of the projected annual expenditure for each year. Remaining License Termination Expenditures:

Reflects the. annual License Termination Plan cost portion at a 0.0% escalation rate from the Site Specific Estimate.

Remaining Spent Fuel Management Expenditures:

Reflects the annual Irradiated Fuel Management Plan cost portion at a 0.0% escalation rate from the Site Specific Estimate.

This column provides information related to funding for managing irradiated fuel as required by 10 CFR 50.82(a){8)(vii).

Remaining Site Restoration Expenditures:

Reflects the annual Site Restoration Plan cost portion at a 0.0% escalation rate from the Site Specific Estimate.

Remaining SAFSTOR Expenditures:

Reflects the annual SAFSTOR Decommissioning Plan cost at a 0.0% escalation rate from the Site Specific Estimate.

End of Year Balance: Reflects the end of year Trust Fund balance after all projected earnings are added and all projected expenditures are deducted for the year specified at a 0.0% escalation rate and a 2.0% RRoR on fund growth. Tables I and II General Notes: (Any minor differences in totals are due to rounding.)

1) The cost estimates contained in Tables I and II are obtained from revised site-specific cost and schedule tables that were provided in an update to the KPS Post-Shutdown Decommissioning Activities Report (Serial No.14-116, ADAMS Accession No. ML 14118A382) dated April 25, 2014. Further revisions are made with this filing to reflect timing differences and higher costs during plant dormancy.

2) The Trust Fund Balance reflects market value on December 31, 2017, net of taxes on realized gains and losses. 3) The 2.0% RRoR is based on the rate allowed by 10 CFR 50.75(e)(1){i) and 10 CFR 50.82(a)(8)(vi) and not on any order by a rate setting authority.

4) The funding method for providing financial assurance for decommissioning KPS remains prepayment.

This cash flow analysis demonstrates that the amounts accumulated in the Trust are sufficient, with credited earnings at a 2.0% RRoR, to cover the estimated cost of radiological decommissioning, spent fuel management and site restoration.

5) By letter dated January 28, 2015 (ADAMS Accession No. ML 15034A312)

DEK submitted a Commitment to establish a Parent Company Guarantee (PCG) and a Notice of Request to Discontinue an Existing Parent Support Agreement (PSA) from Dominion Resources, Inc. (DRI). The PCG provides additional financial assurance to address any potential shortfalls in decommissioning funding assurance for KPS, up to $60 million. By letter dated December 14, 2015 (ADAMS Accession No. ML 15344A503), the NRC notified DEK that it had no objection to the cancellation of the $60 million PSA, issued by DRI, for KPS. 6) The cash flow analysis in Table II shows that the funds accumulated in the Trust are sufficient, with credited earnings at a 2.0% real rate of return, to cover the estimated cost of radiological decommissioning, spent fuel management and site restoration.

7) On May 21, 2014 (ADAMS Accession No. ML 13337A287), the NRC granted DEK an exemption allowing the Trust to be used for spent fuel management costs.

• Serial No.18-089 KPS Decommissioning Funding Status Report Attachment 1 Financial Test for Year Ended December 31, 2017 Paragraph 11.A.2 of Appendix A to 1 O CFR Part 30 Kewaunee Power Station Dominion Energy Kewaunee, Inc. (DEK)

James R C:hapman Senior Vic13 President

-Mergers and Acquisitions and Treasurer 120 Trede!Jar Street, Richmond VA 23219 Dominion :;iii"' Energy DominionEnergy.com March 15, 2018 FINANCIAL TEST FOR VEAR ENDED DECEMBER 31, 2017 Paragraph II. A.2 of Appendix A to 10 CFR Part 30 A. 1\/laximum Guarantee Amount for Facility License No. DPR-43: $60 million 8. Dominion Energy Inc. issued $300,000,000 of 3 year unsecured senior notes December 6, 2017. The issuances were rated BBB by Standard and Peer's and Baa2 by Moody's ait the time of settlement and maintain these ratings today. C. DEi's tangible net worth (millions of dollars):

Total Equity Less: Net Book Value of the Nuclear Facility and Site (KPS) Goodwill of the Nuclear Facility and Site (KPS) (i) Total Net Worth Less: Goodwill Intangible Assets (ii) Tangible Net Worth DEi Total Assets $ 76,585 Less: Foreign Assets Total US Assets $ 76,585 FINANCIAL TESTS 1. Is line C (ii) at least $21 Million? 2. Is line C (i) at least 6 times the guarantee amount of $60 million? 3. a. Are at least 90 percent of the firm's assets located in the U.S.? or, b. Is line C (i) at least 6 times the guarantee amount of $60 million? $19,370 $19,370 6,405 685 $ 12.280 YES 181 181 181 NO D D D D

4. a. Are bond ratings BBB (including

+/-adjustments) or above as issued by Standard and Poor's or, b. Are bond ratings Baa (including

+/-adjustments) or above as issued by Moody's D D I hereby certify that the content of this Financial Test: Paragraph 11.A.2 of Appendix A to 10 CFR Pa

• r e nd correct to the best of my knowledge.

ergers & Acquisitions and Treasurer, Attachment 2 Serial No.18-089 Decommissioning Funding Status Report Deloitte & Touclne LLP Attesting Letter of Accuracy of the Financial Test Kewaunee Power Station Dominion Energy Kewaunee, Inc. (DEK)

Deloitte.

Deloitte & Touche LLP Suite 820 901 East Byrd Street Richmond, VA23219 USA Tel: +1 804 697 1500 Fax: +1 804 697 1825 www.deloitte.com INDE1l'ENDENT ACCOUNTANTS' REPORT ON APPLYING AGREED-UPON PROCEDURES To the Board of Directors of Dominion Energy, Inc. Richmond, Virginia We have performed the procedures enumerated below, which were agreed to by Dominion Energy, Inc. ("Dominion Energy"), as parent company of Dominion Energy Kewaunee, Inc., licensed operator of the Kewaunee Power Station, solely to assist the U.S. Nuclear Regulatory Commission in evaluating Dominion Energy's compliance with the financial test to demonstrate financial assurance for the year ended December 31, 2017, as specified in Appendix A, Part 30 of Title 10 of the U.S. Code of Federal Regulations (the "Financial Test"), dated March 15, 2018 from James Chapman, Senior Vice President Mergers & Acquisitions and Treasurer of Dominion Energy, Inc. and included as Attachment 1 to financial assurance letter for Dominion Energy Kewaunee, Inc. dated March 23, 2018 to the U.S. Nuclear Regulatory Commission (the "Financial Assurance Letter").

Dominion Energy's management is responsible for the Financial Test and compliance with the associated requin:ments.

The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of ,the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures that we performed and related findings are as follows: 1. We compared the bond rating in Attachment 1 to Dominion Energy's Financial Assurance Letter to third-party sources, noting no differences.

2. We compared amounts identified as "Total Equity", "Goodwill", "Intangible Assets", and "DEI Total Assets" in Attachment 1 to Dominion Energy's Financial Assurance Letter to the corresponding amounts in Dominion Energy's audited consolidated financial statements as of December 31, 2017, on which we have issued our report dated February, 27, 2018, noting no differences.

3. We compared amounts identified as Net Book Value of the Nuclear Facility and Site (KPS)", "Goodwill of the Nuclear Facility and Site (KPS)", and "Foreign Assets" in Attachment 1 to Dominion Energy's Financial Assurance Letter to the corresponding amounts in a schedule prepared by Dominion Energy. We agreed the total shown in the schedule to the corresponding amount in Dominion Energy's audited consolidated financial statements as of December 31, 2017, on which we have issued our report dated February 27, 2018, noting no differences.

Member of Deloitte Touche Tohmatsu Limited

4. We recomputed the mathematical accuracy of the amounts identified as "Total Net Worth", "Tangible Net Worth", and "Total US Assets" in Attachment 1 to Dominion Energy's Financial Assurance Letter, noting no differences.

With respect to procedures outlined in Paragraph II.B of Appendix A, Part 30 of Title 10 of the United States Code of Federal Regulations, professional standards preclude us from providing any form ofreport or assurance on matters relating to solvency.

Accordingly, no such form of report or assurance is provided.

This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.

We were not engaged to and did not conduct an examination or review, the objective of which would be the expres:,ion of an opinion or conclusion, respectively, on compliance of the Financial Test. Accordingly, we do not express such an opinion or conclusion.

Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the board of directors and manag,ement of Dominion Energy and Dominion Energy Kewaunee, Inc., and the U.S. Nuclear Regulatory Commission, and is not intended to be and should not be used by anyone other than these specified parties. I t. 1~ LL'P

• March 23, 2018