ML20204E403

Submits Rept of Status of Decommissioning Funding for Rancho Seco,As Required by 10CFR50.75(f)(1).Plant Is Currently in Safstor, with Operating License Scheduled to Expire in Oct 2008

ML20204E403
Person / Time
Site:	Rancho Seco
Issue date:	03/16/1999
From:	Redeker S SACRAMENTO MUNICIPAL UTILITY DISTRICT
To:	Weiss S NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
MPC&D-99-043, MPC&D-99-43, NUDOCS 9903250029
Download: ML20204E403 (5)

Text

n L)SMUDSACRAMENTO MUNICIPAL UTIUTY DISTRICT O P. O. Box 15830, Sacramento CA 95852-1830, (916) 452-3211

.* AN ELECTRIC SYSTEM SERVING THE HEART OF CALIFORNIA MPCe D 99-043 March 16,1999 U.S. Nuclear Regulatory Commission Attn.: Document Control Desk Washington, DC 20555 Docket No. 50-312 Rancho Seco Nuclear Generating Station License No. DPR-54 RANCIIO SECO REPORT ON DECOMMISSIONING FUNDING STATUS Attention: Seymour Weiss As required by 10 CFR 50.75(f)(1), we are submitting this report on the status of decommissioning funding for Rancho Seco.

Rancho Seco began commercial power operation in April 1975, and shutdown permanently in June 1989, as the result of a public referendum. In 1991, SMUD l submitted the proposed Decommissioning Plan for Rancho Seco, along with a Revised Financial Assurance Plan. The NRC approved the Decommissioning Plan in March 1995. Due to revisions to the 10 CFR 50.82,in March 1997 SMUD submitted the Post Shutdown Decommissioning Activities Report for Rancho Seco.

Rancho Seco is currently in "SAFSTOR," with the operating license scheduled to expire  ;

in October 2008. Rancho Seco will remain in SAFSTOR until 2008, at which time j

" Deferred DECON" will begin. DECON is scheduled to be complete, the 10 CFR 50 l license terminated, and the site " free-released" by 2012. j l

In addition, SMUD is currently engaged in an interim " Incremental Decommissioning" project to remove plant equipment and components with low levels of radioactivity.

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N Decommissionicy Financial Assurance Method and Trust Fund Status j' SMUD had maintained an internd " commissioning fund since the early 1980s. In 1991, SMUD transferred $90 million fror.. E internal fund into an "Extemal Sinking 9903250029 990316 I PDR ADOCK 05000312 s W PDR j RANCHO .SECO NUCLEAR GENERATING STATION O 14440 Twin Cites Road, Herald. CA 9438-9799, (209) 333-2935 l J

S. Weiss MPC&D 99-043 Decornmissioning Trust Fund," maintair:ed by Bankers Trust of New York. Table I shdws the' amount of the trust fund annu otribution and disbursals for the years 1991 through 1998. In 1999, SMUD increasec un annual contribution to $18.5 million. i As of December 31,1998, the trust fund contained $127.95 million. The primary reason for the increase in the annual contribution was the increased cost of low level radioactive waste disposal. SMUD has incurred costs and withdrawn approximately $117.9 million from the trust fund between 1994 and 1998.

Table 1 Year Annual Contribution Annual Disbursal 1991 $90 Million* $0 1992 $12 Million $0 1993 $12 Million $0 1994. $12 Million $35,327,974 1995 $15 Million $24,375,399 1996 $15.5 Million $17,950,000 1

1997 $16.5 Million $18,400,000 i 1998 $17.5 Million $21,920,000

• Initial contribution Cost Estimate SMUD elected to perform a " Site Specific Cost Estimate Study" to determine the estimated cost to decommission Rancho Seco. TLG Services Inc. performed the cost study for SMUD. TLG performed the initial cost estimate in 1991, and updated the cost estimate in 1993,1995, and 1997. SMUD staff performed an interim cost estimate update in 1998', to reflect delays in the spent fuel dry storage program and savings from the incremental decommissioning project.

' The 1998 cost estimate update remains in 1997 dollars.

L

S. Weiss MPC&D 99-043 Tabl,e 2 sho,ws the estimated decommissioning costs for license termination. The estimated costs include spent fuel sturage through 2012, but do not including site restoration costs.

Table 2 Year of Cost Study Estimated Decommissioning Cost 1991 $281 million 1993 $365 million 1995 $441 million 1997 $452 million 1998 $459 million (1997 dollars)*

• SMUD staff performed the 1998 cost estimate Accumulation of Funds Based on decommissioning cost estimate and the use of the external trust fund, SMUD plans to accumulate sufficient funds to store spent nuclear fuel, decommission Rancho Seco, and terminate the 10 CFR 50 license. Additional funds may be required if the Department of Energy does not accept Rancho Seco's spent iuel by the termination of the 10 CFR 50 license, currently planned for 2012. SMUD plans to fund site restoration separately, after the NRC terminates Rancho Seco's 10 CFR 50 license.

Certification of Financial Assurance Certification is hereby made that financial assurance will be provided through an extemal sinking fund in the amount of $459 million to decommission Rancho Seco and terminate the 10 CFR 50 license. The $459 million currently estimated to decommission Rancho Seco exceeds the $99.53 million that can be calculated from the table in 10 CFR 50.75(c)(1).

l Adjustments to Cost Estimate and Trust Fund As can be seen from Table 2, SMUD has adjusted the cost estimate approximately every two years. The decommissioning cost sttJy update is based on actual forecast annualized I

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1 S. Weiss MPC&D 09-043 i

costs for labor and actual costs for low level radioactive waste disposal, as best as can be derbrmined. SMUD considers " energy" to be an overhead cost and is not included in the  !

decommissioning cost study estimate. l l

Administration of the Decommissioning Fund Table 3 provides a general overview of the administration of the Rancho Seco Decommissioning Trust Fund. Table 3 shows the amount to decommission Rancho Seco is $459 million,in 1997 dollars. Additionally, Table 3 indicates that approximately

$126.37 million was forecast to be in the trust fund at the end of 1998. The trust fund holdings were reviewed at the end of 1998, and the trust fund contained $127.95 million,  !

a difference of $1.58 million more than the forecasted $126.37 million. l Additionally, Table 3 shows that SMUD will increase the annual contribution to the trust l fund from $17.5 million in 1998, to $18.5 million in 1999. We assume that the annual l contribution will remain constant until the end of the collection period in 2008. At the end of the collection period, sufficient funds to decommission the facility should be available.

Assumptions Regarding Rates of Trust Fund Escalation and Earnings l SMUD has made the following assumptions regarding trust fund escalation and earnings.

SMUD has currently estimated the rate of return at 5.4%. This rate is based on historical portfolio performance per the fund manager. The decommissioning cost escalation rate is currently estimated at 2.7%. This rate is within an established range and congruent with l rates used for other business plans at SMUD. Therefore, SMUD's real rate of return is 2.7%.

Contractual Obilgations There are no contractual obligations associated with SMUD's financial assurance plan or the operation of the decommissioning trust fund.

Modifications to Financial Assurance Method In 1991, SMUD submitted its Financial Assurance Plan to the NRC describing the use of an external sinking fund. There have been no significant modifications to SMUD's external sinking fund since our ir.itial submittal.

f*t j l . .

1 S. Weiss MPC&D 99-043 Material Changes to the Trust Fund Agreement There have been nc changes to the Trust Fund Agreement If you, or members of your staff, have questions requiring additional information or clarification, please contact Ken Miller at (916) 732-4818.

1 Sincerely, 1

J \ j Steve J. Redeker  ;

Manager, Plant Closure and Decommissioning Cc: E.W. Merschoff, NRC, Region IV, Arlington R. Dudley, NRC, Rockville ,

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