ML14085A017

Yankee - Decommissioning Funding Assurance Status Report

ML14085A017
Person / Time
Site:	Yankee Rowe
Issue date:	03/11/2014
From:	Pizzella C Yankee Atomic Electric Co
To:	Document Control Desk, Office of Nuclear Material Safety and Safeguards
References
BYR 2014-014
Download: ML14085A017 (10)

Text

C Y A YANKEE ATOMIC 49 Yankee Road, ELECTRIC01367 Rowe, Massachusetts COMPANY March 11, 2014 BYR 2014-014 10 CFR 50.4 10 CFR 50.75(f)(1) and (2) 10 CFR 50.82(a)(8)(v) and (vi)

ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 20555 - 0001 Yankee Atomic Electric Company Yankee Nuclear Power Station Independent Spent Fuel Storage Installation NRC License No. DPR-3 (NRC Docket Nos.50-029 and 72-31)

Subject:

Decommissioning Funding Assurance Status Report On February 26, 1992, Yankee Atomic Electric Company (YAEC) informed the USNRC that the Board of Directors of YAEC had decided to permanently cease operations at the Yankee Nuclear Power Station and that fuel had been permanently removed from the reactor (Reference 1). In accordance with 10 CFR 50.82(a)(2), the certifications in the letter modified the YAEC license to permanently withdraw YAEC's authority to operate the reactor. In 1993, YAEC commenced decommissioning the power plant. On August 10, 2007, the NRC released most of the formerly licensed land for unrestricted use, shrinking the licensed land to the Independent Spent Fuel Storage Installation (ISFSI) only (Reference 2). The only decommissioning activities that remain are those associated with the decommissioning of the Yankee Nuclear Power Station ISFSI, which is currently scheduled to be completed in calendar year 2032, after the Department of Energy (DOE) removes the irradiated fuel and Greater than Class C (GTCC) waste.

In Attachment 1, YAEC provides the attached Decommissioning Funding Assurance Status Report for the Yankee Nuclear Power Station ISFSI to comply with 10 CFR 50.75(f)(1) and (2) and 10 CFR 50.82(a)(8)(v) and (vi).

This letter contains no regulatory commitment If you have any questions regarding this letter, please do not hesitate to contact me at (860) 267-6426 x304.

R.sp tfully, Carla 4M. izzella Vice President, Chief inancial Officer, and Treasurer

Yankee Atomic Electric Company BYR 2014-014\March 11, 2014\Page 2

Attachment:

1. Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2013)

References:

1. A. C. Kadak (YAEC) letter to USNRC, "Permanent Cessation of Power Operations at the Yankee Nuclear Power Station," BYR-92-024, dated February 26, 1992

2. USNRC letter to Yankee Atomic Power Company, "Yankee Nuclear Power Station - Release of Land from Part 50 License," dated August 10, 2007 i

cc: W. M. Dean, NRC Region I Administrator M. S. Ferdas, Chief, Decommissioning Branch, NRC, Region 1 J. Goshen, NRC Project Manager J. Giarrusso, Planning, Preparedness & Nuclear Section Chief, MEMA J. Cope-Flanagan, Assistant General Counsel, MDPU J. Reyes, State of Massachusetts Office of the Attorney General

BYR 2014-014 ATTACHMENT 1 DECOMMISSIONING FUNDING STATUS REPORT FOR THE YANKEE NUCLEAR POWER STATION INDEPENDENT SPENT FUEL STORAGE INSTALLATION (STATUS AS OF 12/31/2013)

March 2014

Attachment 1 to BYR 2014-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR Requirement Response Comment 10 CFR 50.75(0(1) and (2) Requirements

1. The amount of decommissioning $8.7 million 10 CFR 50.75(c) provides the calculation basis for determining minimum amounts of funds estimated to be required (in 2013 funding required to demonstrate reasonable assurance of funds for decommissioning.

pursuant to 10 CFR 50.75 (b) and dollars) However, the methodology does not take into consideration work that has already been (c) completed. In 1993, YAEC commenced decommissioning the power plant. On August 10, 2007, the NRC released most of the formerly licensed land for unrestricted use, shrinking the licensed land to the Independent Fuel Storage Installation (ISFSI). Thus, the only decommissioning activities and decommissioning funding requirements that remain are those associated with the decommissioning of the Yankee Nuclear Power Station ISFSI, which is currently scheduled to be completed in calendar year 2032, after the Department of Energy (DOE) removes the irradiated fuel and Greater than Class C (GTCC) waste.

On December 17, 2012, YAEC provided a decommissioning funding plan for the Yankee Nuclear Power Station ISFSI in accordance with 10 CFR 72.30(b)(2) that included a revised Decommissioning Cost Estimate (DCE) for the Yankee Nuclear Power Station ISFSI.

2. The amount accumulated at the $9.8 million Yankee Atomic Electric Company (YAEC) has established an account within its end of the calendar year preceding (as of Nuclear Decommissioning Trust (NDT) entitled "ISFSI Radiological Decom" that the date of the report for items 12/31/13) segregates the funds for decommissioning of the ISFSI from the larger balance of funds included in 10 CFR 50.75 for ongoing management of irradiated fuel and GTCC waste held in the NDT. This (e)(1)(i) market balance only reflects the funds in the segregated account for decommissioning the ISFSI.

3. Schedule of the annual amounts $3.0 million Pursuant to YAEC's most recent FERC filing that was approved in June, 2013, YAEC remaining to be collected is collecting $252,542 per month through 2014.

Including amounts beyond those required in 10 CFR 50.75(e)(1)(i)

1. Years to collect 1 Year Page 1 of 7

Attachment 1 to BYR 2014-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR Requirement Response Comment

4. The assumptions used regarding No additional comments.

escalation of the decommissioning cost estimate, rates of earnings on decommissioning funds, and rates of other factors used in funding projections are:

Annual escalation rate 2.5%

Annual after-tax earnings rate on decommissioning trust funds 4.5%

Other factors assumed None

5. Any contracts upon which the Yes YAEC is currently collecting funds through its power contracts and amendatory licensee is relying pursuant to 10 agreements under FERC regulation. The power contracts and the amendatory CFR 50. 75(e)(1)(ii)(A) agreements specify the obligations of the purchasers for the costs of YAEC, including decommissioning costs. Such contracts have been filed with FERC.

6. Any modifications to a licensee's None No additional comments.

current method of providing financial assurance occurring since the last submitted report.

7. Any material changes to trust None No additional comments.

agreements.

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Attachment 1 to BYR 2014-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR Requirement Response Comment 10 CFR 50.82(a)(8)(v) (A) through (D Requirements

1. The amount spent on In 1993, YAEC commenced decommissioning the power plant. On August 10, 2007, decommissioning, both: the NRC released most of the formerly licensed land for unrestricted use, shrinking the licensed land to the ISFSI. The only decommissioning activities that remain are those Cumulative $0 (Refer to associated with the decommissioning of the Yankee Nuclear Power Station ISFSI, dComment) which is currently scheduled to be completed in calendar year 2032, after the DOE and Cremoves the irradiated fuel and GTCC waste.

Over the previous calendar year $0 10 CFR 50.82(a)(8)(v) became effective on December 17, 2012. At that time, the only areas that were within the control of the Operating License No. DPR-3 were those associated with the Yankee Nuclear Power Station ISFSI. Thus, YAEC is only presenting the information associated with the decommissioning of the areas that remain within the control of Operating License No. DPR-3.

Presently, YAEC is storing irradiated fuel and GTCC waste on site until it is removed by the DOE. Decommissioning of the Yankee Nuclear Power Station ISFSI is currently scheduled to be completed in calendar year 2032, after the DOE removes the irradiated fuel and GTCC waste. Thus, the cumulative cost spent on decommissioning the Yankee Nuclear Power Station ISFSI is $0, and the amount spent in calendar year 2013 is $0.

2. The remaining balance of any $9.8 million YAEC has established an account within its NDT entitled "ISFSI Radiological Decom" decommissioning funds. that segregates the funds for decommissioning of the ISFSI from the larger balance of funds for ongoing management of irradiated fuel and GTCC waste held in the NDT.

This market balance only reflects the funds in the segregated account for decommissioning the ISFSI.

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Attachment 1 to BYR 2014-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR Requirement I Response [ Comment

3. The amount provided by other $0 As of 12/31/13, YAEC's NDT account entitled "ISFSI Radiological Decom" has a financial assurance methods being balance sufficient to cover the estimated cost of the remaining radiological relied upon decommissioning of the ISFSI. However, if in the future, the balance in the account is not fully funded to cover the estimated cost of the remaining radiological decommissioning of the ISFSI, the Company has several methods of obtaining additional funds, if required, to cover projected costs.

First, YAEC is currently collecting funds through its power contracts and amendatory agreements under FERC regulation. The power contracts and the amendatory agreements specify the obligations of the purchasers for the costs of YAEC, including decommissioning. Pursuant to these power contracts, YAEC has the ongoing ability to seek collections from its purchasers for additional funds that may be required to cover these costs.

Second, YAEC has received proceeds from the successful litigation of the first phase of its breach of contract damages claims against the DOE for failure to begin the removal of spent nuclear fuel (SNF) and GTCC waste from the site in 1998. In addition, YAEC is expecting the proceeds from the successful litigation of the second phase of its breach of contract damages claim against the DOE. YAEC will continue to file claims against the DOE as long as the DOE continues to breach its contract obligations related to SNF and GTCC waste. To that end, in August, 2013 the Company filed a third round of claims against the DOE seeking damages for the years 2009 - 2012. Each of these prospective claims will likely result in the receipt of proceeds that can be used to offset future costs, if required.

Accordingly, YAEC's most recent FERC filing which was approved in June, 2013, implemented a fifteen year funding mechanism. Until the 2013 FERC filing, the Company had employed a "full funding" assumption in developing funding requirements. The fifteen year funding mechanism was put in place to incorporate the potential for the receipt of future DOE breach of contract damages as a source of funding as discussed above. If future damage recovery does not occur, the Company has Page 4 of 7

Attachment 1 to BYR 2014-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR Requirement Response Comment the ability to apply to FERC for more funding, if necessary. The approved FERC filing also requires YAEC to provide an information filing regarding the adequacy of funding if five years pass without receipt of damage awards from litigation with the DOE.

Third, YAEC expects to utilize the investment return on Decommissioning Trust assets as a funding source. The current assumed rate of investment return, after fees and taxes, is 4.5%.

4. An estimate of the costs to $8.7 million On December 17, 2012, YAEC provided a decommissioning funding plan in complete decommissioning, (in 2013 accordance with 10 CFR 72.30(b)(2) that included a revised DCE for the Yankee Nuclear reflecting any difference between dollars) Power Station ISFSI.

actual and estimated costs for work performed during the year.

5. The decommissioning criteria 10 CFR The assumptions regarding the decommissioning cost estimate are provided in the DCE upon which the estimate is based 20.1402 for the Yankee Nuclear Power Station ISFSI provided on December 17, 2012.

6. Any modifications occurring to a None No additional comment.

licensee's current method of providing financial assurance since the last submitted report.

7. Any material changes to trust None No additional comment agreements or financial assurance contracts.

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Attachment 1 to BYR 2014-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR 50.82(a)(8)(vi) Requirement

1. Additional financial assurance None As of 12/31/13, YAEC's NDT account entitled "ISFSI Radiological Decom" has a required to cover the estimate cost balance sufficient to cover the estimated cost of the remaining radiological of completion. decommissioning of the ISFSI. However, if in the future, the balance in the account is not fully funded to cover the estimated cost of the remaining radiological decommissioning of the ISFSI, the Company has several methods of obtaining additional funds, if required, to cover projected costs.

First, YAEC is currently collecting funds through its power contracts and amendatory agreements under FERC regulation. The power contracts and the amendatory agreements specify the obligations of the purchasers for the costs of YAEC, including decommissioning. Pursuant to these power contracts, YAEC has the ongoing ability to seek collections from its purchasers for additional funds that may be required to cover these costs.

Second, YAEC has received proceeds from the successful litigation of the first phase of its breach of contract damages claims against the DOE for failure to begin the removal of spent nuclear fuel (SNF) and GTCC waste from the site in 1998. In addition, YAEC is expecting the proceeds from the successful litigation of the second phase of its breach of contract damages claim against the DOE. YAEC will continue to file claims against the DOE as long as the DOE continues to breach its contract obligations related to SNF and GTCC waste. To that end, in August, 2013 the Company filed a third round of claims against the DOE seeking damages for the years 2009 - 2012. Each of these prospective claims will likely result in the receipt of proceeds that can be used to offset future costs, if required.

Accordingly, YAEC's most recent FERC filing which was approved in June, 2013, implemented a fifteen year funding mechanism. Until the 2013 FERC filing, the Company had employed a "full funding" assumption in developing funding requirements. The fifteen year funding mechanism was put in place to incorporate the potential for the receipt of future DOE breach of contract damages as a source of funding as discussed above. If future damage recovery does not occur, the Company has Page 6 of 7

Attachment 1 to BYR 2014-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2013) the ability to apply to FERC for more funding, if necessary. The approved FERC filing also requires YAEC to provide an information filing regarding the adequacy of funding if five years pass without receipt of damage awards from litigation with the DOE.

Third, YAEC expects to utilize the investment return on Decommissioning Trust assets as a funding source. The current assumed rate of investment return, after fees and taxes, is 4.5%.

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