ML102500270

Letter from University of California, Irvine'S Response to Request for Additional Information Regarding Financials

ML102500270
Person / Time
Site:	University of California - Irvine
Issue date:	08/25/2010
From:	Geoffrey Miller University of California - Irvine
To:	Linh Tran Document Control Desk, Office of Nuclear Reactor Regulation
References
Download: ML102500270 (8)

Text

UNIVERSITY OF CALIFORNIA, IRVINE BERKELEY

• DAVIS IRVINE

• LOS ANGELlS RIVERSIDE SAN DIEGO ° SAN FRANCISCO , SANTA BARBARA

• SANTA CRUZ George E. Miller IRVINE, CA 92697-2025 Senior Lecturer Emeritus (949) 824-6649 or 824-6082 Department of Chemistry and FAX: (949) 824-8571 Director,Nuclear Reactor Facility email : gemiller@uci.edu Faculty Advisor for Science, UCI Centerfor Education Partnerships August 25, 2010 US Nuclear Regulatory Commission Document Control Desk Washington DC 20555 Attention: Linh Tran, Senior Project Manager

Dear Ms Tran:

Please find attached the response regarding financials from the earlier RAI.

The SOI was signed but our administration overlooked that they had to have it notarized, so it is being re-signed and will be sent under separate cover.

I declare under penalty of perjury that the foregoing and the attached is true and correct.

Executed on August 24t 2010 Dr. George E. Miller Director 4aJv(

University of California Irvine Nuclear Reactor Facility License R-116, Docket 50-326 Application for Renewal submitted October 18, 1999 NRC Financial Questions and Comments - dated December 3rd 2009.

Response in Italics - prepared June 2010.

Pursuant to 10 CFR 50.33(f)(2), "applicants to renew or extend the term of an operating license for a nonpower reactor shall include the financial information that is required in an application for an initial license." To comply with this requirement, please provide the following updated and supplemental information to the October 18, 1999, University of California-Irvine (UCI) application (the application) for a renewed license for the University of California-Irvine Nuclear Reactor Facility (UCINRF).

1. The NRC staff will analyze the financial statements for the current year, which are required by 10 CFR 50.71(b), to determine if the applicant is financially qualified to operate the UCINRF.

Since UCI's financial statements were hot included with the October 18, 1999, application, please provide a copy of the latest financial statements.

The complete University of California financialstatement is a 120 page document available on-line at httt ://www.universitvofcalifornia.edulfinreports/index.nhp?file=08-09/pdf/fullreDort 09.Ddf The next page shows the UC Irvine "Factsin Brief" extracted from Page 117 of the above document for the 2008-2009 academic and fiscal year.

UCl CAMPUS FACTS STUDENTS Undergraduate fall enrollment 22,238 Graduate fall enrollment 5,393 Total fall enrollment 27,631 University Extension enrollment 25,664 DEGREES CONFERRED 2007-2008 Bachelor 5,209 Advanced 1,404 Cumulative SINCE 1965 129,002 FACULTY AND STAFF 12,793 LIBRARY VOLUMES (as of June 2008) 2,622,259 CAMPUS LAND AREA (in acres) 1,474 FINANCIAL FACTS IN $THOUSANDS OPERATING EXPENSES BY FUNCTION Instruction 446,395 Research 226,178 Public service 11,349 Academic support 125,854 Student services 58,543 Institutional support 44,805 Operation & maintenance of plant 38,053 Student financial aid 64,346 Medical centers 498,903 Auxiliary enterprises 116,385 Depreciation & amortization 116,691 Other 6,312 Total ($thousands) 1,753,814 GRANTS AND CONTRACTS REVENUE Federal .government 219,802 State government 50,818 Local government 5,025 Private 57,611 Total ($thousands) 333,256 UNIVERSITY ENDOWMENTS Endowments ($thousands) 45,167 Annual income distribution 2,738 CAMPUS FOUNDATIONS' ENDOWMENTS Endowments ($thousands) 161,314 CAPITAL ASSETS ($thousands)

Capital assets, at net book 2,406,782 Capital expenditures 415,525

2. Pursuant to 10 CFR 50.33(f)(2), the regulation states that "the applicant shall submit estimates for total annual operating costs for each of the first five years of operations of the facility." Since the information provided in the 1999 application submittal is out of date, please provide the following additional information:

(a) The estimated operating costs for the UCINRF for each of the fiscal years (FY)I 1 thru FY15 (the first five-year period after the projected license renewal date).

Future operating costs are estimated based on past practice over several years. These practices are expected to continue. There is currently no permanent assigned salarybudget for the facility. The figures given below are for "other'costs as described below Administration of the reactoris the responsibilityof teaching faculty paid from University of Californiainstructionalfunds, with some teachingrelief (20-30% time). Instructionalfunds derive from a state budget allotment to the Regents of the University of Californiabased on enrollment, and include all benefits. Graduateassistants,who may be operators, are employed as research assistants on grants or teaching assistantsin courses and operate the reactoras part of those responsibilities.Such Assistantshipspay all benefits and student fees. The dollarvalue of these assignments (faculty or students) varies with the salary level of the assigned individual.

Radiological Safety oversight is provided by the UCI Environmental, Health and Safety Office at no direct charge to the facility: Emergency and security response is likewise made at no charge (including training)by UCI EH&S, UCIPD, and Orange County Fire Authority units.

All other costs - supplies, maintenance, surveillance, including casual (student)labor, and costs of specialized health physics -assistance(e.g., shipping radioisotopes),and fiscal support (billing and accounting) is provided for by external and internal charges for facility use. The reactor operates as a UC standardrecharge facility (and charge ratesper hour of reactorand/orother facility equipment use have been established for all users. The projection assumes a 3% per annum inflation factor over the 2009-2010 estimate of expenses. However, the recharge system allows for annualreview of charges which can be adjusted to meet actual or projected changes in costs of operation. UCI rechargepolicy may be examined at http.//www. policies.uci.edu/adm/procs/700/703-13g.html 2010-2011 $15,000 2011-2012 $15,450 2012-2013 $15,914 2013-2014 $16,391 2014-2015 $16,883 (b) Confirm that UCI's primary source of funding to cover the operating costs for the above fiscal years will be from the state-funded budget as described in the application.

The sources of funds have been delineated above. They include state-funded budget and recovery of costs from a variety of other sources.

3. The application states that "A revised estimate of costs, adjusted for inflation, is $1.0 M anticipated, based on estimates of increased waste disposal prices." In order for the NRC staff to complete its review of the decommissioning cost estimate, please provide the following information:

(a) A current decommissioning cost estimate (2010 dollars) for the UCINRF to meet the NRC's radiological release criteria for decommissioning the facility for unrestricted use pursuant to 10 CFR 50.75(d)(2). Provide the basis for how the cost estimate was developed, showing costs, in current dollar amounts, specifically broken down into the categories of labor, waste disposal, other items (such as energy, equipment, and supplies), and a contingency factor of at least 25 percent.

The cost estimate, in 2010 dollars, for decommissioning the UCI facility is $2M dollars.

Basis:

The University of Arizona recently (May, 2009) contracted with Enercon Services, Inc., to prepare a decommissioningplan for the University of Arizona (UA) TRIGA reactor. The total cost estimate, including 25% contingency was $1,990,686 (page 12).

The cost breakdown provided is included as Table 1.1 below. This breaks down costs by tasks, and does not completely separatelabor and other costs. Forthe purpose of simplified projection, it is assumed that labor is 50% of the total cost.

Tabke 1-1. Deco mmisiioiniCaOst Estimate Uqior ProiectActividtes Ceot Pmparazwi an aproials of pF31 and poced=6s 113.987 Site mo zannon andi aaiunp4760 Fawtv mamaa LOist, Wat L ý- -iatpd~cýs. etc.) S 109.7217 Pexto M sveme'atarv cd a.tetizatio c S 9,426 Re.:td*, r *.':e=d cour-ol. 3ouddmive rewula. S 44.678 Raemove coo1nj coiUs. iie smnage holscers. andl fu~el tIDras ruk S 63.493 Re.arror coupoeamt remo-ah incluing cowrol rods, iorL chamnbers,, $ 136643 tfsi~oj chatuber., pid pLsres. reftector, rabbiz pipuag, ratary specLin rack, irradatira tube, bzer biack, core su1ppo.

Pool va-*e rewai clanup. and diiposincm S 51.11672 Rema moerniwe liner. cencieve ;suk. cume steel =~4 sofi 263.365 Remo!e e* in *ia ottenla S- 46.0335_

Sdrdaepits decovnamineato ormpoarsl S 47.4t8 Failkv deconcavanate 19.6-60 p_.slfeima Saurceps) ikagtene. oft erstiom. atfh dCsposIi S 1*9.*

___________Coc 63fc9t (b) OiO catewaste Padmisi. EMSPOme a io.hod td S MANrh o Fminastanuin uveys, andi repont j S .2 Feciv res Uaiion (bcall. pfor cmelab.

aDOd o $ f 29.395 uceligcdeoie)

Demtiuaon riorO.

Ute-rsliy ovirirst iks- S 122.000 Estimated Decotienu t neoii t S in 1.59.o9 Cauyk=Nray l 25--i I S 39S.13?

Total Decew niog Cost rith Coeingearcy fu0.6I6S Addendum 1 provides a comparison of the UCI facility with the UA facility as justification for the appropriateness of this estimate for the'UCI facility.

(b) State the decommissioning method to be used (e.g., DECON, or other method).

While the UA plan calls for complete DECON of the facility for unrestricted use it is likely that UCI will continue to utilize the laboratory space in the physical sciences building for alternative radiation/radiochemnistry research purposes for the foreseeable future. In which event, the I immediate reactor structures, including the fuel, control rods, reflectors, rotating rack, neutron, detectors and in-core experimental facilities, would be removed and disposed, but removal of activated concrete and aluminum tank liner would be delayed so substantial decay of these may have occurred,reducing the volume/weight that must be removed and disposed. Fill and/or alternativephysical science or engineering experimental equipment would be installedin the tank under appropriatemonitoring. This is a variation to the SAFSTOR method and overall cost

would be substantially reduced by removing only the more severely contaminatedmaterials and entombing remaininglow level materials. Ongoing health physics surveillance would be carried out as part of the normal survey by UCI Office of EnvironmentalHealth and Safety (EH&S) of laboratoriesutilizing radiationor radioactivity.Any level above backgroundlevels would be cause for Monitoring of any personnel using the space. This cost, as well, would be met, as now, as part of the ongoing budget of EH&S.

(c) A description of the means of adjusting the cost estimate for the UCINRF periodically over the life of the facility (e.g., Consumer Price Indices, U.S. Bureau of Labor Statistics Indices, etc.)

pursuant to 10 CFR 50.75(d)(2).

UCI will adjust appropriateestimates using best available information. At this time it is unlikely that models based on trend data before 2007-8 will accuratelypredict (in a recession/post recession environment) the trends for future use. The university uses figures for short-term (usually up to 5 years) inflation agreed with federal granting agencies and these would be employed for subsequent updates. UCI's policy establishingescalationrates for use in federal or other grant proposals may be examined at http://www. research.uci.edulora/sip/reparinqbudgets. htm#Escalation (d) A numerical example showing how the 2010 decommissioning cost estimate will be updated periodically in the future.

Currently, all grant submissions from UCI for federal support are using a 2% per annum salary inflation and 3% per annum inflation for other costs (see above). Examination of the UA decommissioning plan suggests an approximate breakdown of 50% salary, 50% other costs.

The average of 3% and 2% is 2.5% applied over the total estimate assumed to be in 2010 dollars. Based on this an estimate of $2M + ($2M x 2.5%/year x 20 years) = $3M would be made for 2030 decommissioning at the end of the 20 year license period. As mentioned, the size of the waste volume to be disposed could be reduced by using a variant of SAFSTOR ratherthan DECON to allow for any unexpected, dramaticincreases in solid low level waste disposalprices.

4. The application includes a statement of intent (SOl) as the method to obtain decommissioning funding when necessary to decommission the facility. Where the applicant intends to use a SOl as the method to provide decommissioning funding assurance, as provided.

for by 10 CFR 50.75(e)(1)(iv), the staff must find that the applicant "...is a Federal, State, or local government licensee..." To make this finding, the applicant must state that it is a State government organization and that the decommissioning funding obligations of the applicant are backed by the State government, and also provide corroborating documentation. Further, the applicant must provide documentation verifying that the signator of the statement of intent is authorized to execute said document that binds the applicant. This document may be a governing body resolution, management directives, or other form that provides an equivalent level of assurance. As the application does not include all of the above information, please submit the following:

(a) An updated SOl, which includes: the date of submittal of the SOl; the current cost (2010 dollars) estimate for decommissioning; a statement that funds for decommissioning will be obtained when necessary; typed name and title of the signator, and original signature of the signator; and the signator's oath or affirmation attesting to the information.

This document is being sent under separatecover.. .

(b) Documentation that corroborates the statement in the application that UCI is State agency and a State of California government licensee under 10 CFR 50.75(e)(2)(iv).

The following is taken directly from the on-line searchable version of the Constitution of the State of California at http://www.leginfo. ca. qov/const. html which delineates, in Article 9, Section 9., the status of the University of California as a state Public Trust, the composition of its Board of Regents, and the powers that they hold.

CALIFORNIA CONSTITUTION ARTICLE 9 EDUCATION SEC. 9. (a.) The University of California shall constitute a public trust, to. be administered by the existing corporation known as "The Regents of the University of California," with full powers of organization and government, subject *only to such legislative control as may be necessary to insure the security of its funds and compliance with the terms of the endowments of the university and such competitive bidding procedures as may be made applicable to, the university by statute for the letting of construction contracts, sales of real: property, and purchasing of materials, goods, and services. Said corporation shall be in form a board composed of seven ex officio members, which shall be: the Governor, the Lieutenant Governor, the Speaker of the.Assembly, the Superintendent of Public Instruction, the president and the vice president of the alumni .association of the university and the acting president of the university, and 18 appointive members appointed by the Governor and approved by the Se"nate, a. majority of the membership concurring; provided, however that the present appointive members shall hold office until the expiration of their present terms.

ADDENDUM Comparison of University of Arizona (UA) and UCI Reactor Facilities.

A. Major Similarities Item UA UCI fuel 20% ss clad standard - hydrided same pool Below ground at floor level of building same Pool water Minimal contamination (gamma/beta) same Control rods 2 standard, 1 transient, boron carbide 2 standard 2 transient, boron carbide Reflector Graphite, sealed in aluminum with rotating Same specimen rack embedded Sample transfer system "standard" GA provided, and fast Cd lined same Bridge and deck plates steel and aluminum grids across pool (6 feet) similar, across one section of pool (10 feet)

Storage pits (dry) 6 steel/concrete 5 steel/concrete never used for spent fuel Operations Minimal schedules Minimal schedule Room and associated Minimal contamination - no known spills or same lab facilities leaks B. Maior Differences Item UA UCI Fuel elements 71 (87 on hand) 82 (103 on hand) pool 5000 gallons, 6 feet diameter, 21 25,000 gallons, oval 10 feet by 15 feet, 25 feet deep, feet deep Tank liner Steel Aluminum alloy Reflector and beam Graphite block and vertical tube none tube Cooling Convection only, freon based coils Convection only, external heat exchanger in tank using water SNM non-fuel Substantial holdings None except AmBe source to. be retained on (ca.3 kg) state license*

Operations 243 Mwh total 1,470 Mwh to March 2010 Note: On balance, these two facilities are extremely similar. Although the higher power level and considerable operational program in the 1970's resulted in a significantly higher operation total at UCI, the larger pool and tank, with the absence of cooling coils and aluminum instead of steel liner, means comparable activation (closest distance of tank liner to core at UA is about 1 ft, while at UCI is 2-1/2 ft.) is anticipated with comparable material removal required. The 25% overall contingency factor included in the UA cost estimate should more than compensate for any differences.