ML24116A171

Cimarron Environmental Response Trust Updated Decommissioning Cost Estimate

ML24116A171
Person / Time
Site:	07000925
Issue date:	04/24/2024
From:	Lux J Environmental Properties Management
To:	James Smith Office of Nuclear Material Safety and Safeguards, Document Control Desk
References
Download: ML24116A171 (1)

Text

April 24, 2024

Mr. James Smith U.S. Nuclear Regulatory Commission 11555 Rockville Pike Rockville, MD 20852-2738

Ms. Rachel Miller Oklahoma Department of Environmental Quality 707 North Robinson Oklahoma City, OK 73101

Re: Docket No. 07000925; License No. SNM-928 Cimarron Environmental Response Trust Updated Decommissioning Cost Estimate

Dear Recipients:

Solely as Trustee for the Cimarron Environmental Response Trust (CERT), Environmental Properties Management LLC (EPM) submits herein an updated decommissioning cost estimate (DCE) for the decommissioning of the Cimarron site. Facility Decommissioning Plan - Rev 3 (the D-Plan, accession number ML22287A079) included a DCE in Table 16-5.

The DCE presented in Table 16-5 assumed that the return on invested funds would average approximately 1% per annum and that the cost of goods and services would average approximately 3% per annum. The U. S. Nuclear Regulatory Commission (NRC), in the process of reviewing the D-Plan, noted that available funding was not sufficient to reduce the concentration of uranium in groundwater to less than the decommissioning criteria stipulated in License Condition 27(b) (the NRC Criterion).

In a letter dated April 18, 2023, (accession number ML22287A079), the CERT requested exemption from NRC oversight fees. Exhibit C in that submittal provided the cost estimate presented in Tables 16-5a and 16-5b of the D-Plan (which included NRC oversight fees),

followed by the same DCE with no NRC fees. That submittal indicated that funding may be sufficient to enable the CERT to achieve the NRC Criterion, although funding was not likely sufficient to conduct the post-remediation monitoring and final status surveys proposed in the D-Plan.

These cost estimates did not include Table 16-5c, which included a 25% contingency fee. The purpose of that submittal was to demonstrate that exemption from NRC oversight fees may enable the licensee to achieve the NRC Criterion based on the licensees estimated cost. If every one of the 15 years required to achieve the NRC Criterion cost 25% more than estimated, funding would not be sufficient to achieve the NRC Criterion even without the exemption.

9400 Ward Parkway

• Kansas City, MO 64114 Tel: 405-642-5152

• jlux@envpm.com

The NRC granted the requested exemption from NRC oversight fees, and the Oklahoma Department of Environmental Quality (DEQ), followed suit, exempting the CERT from State oversight fees.

The NRC noted that the DCE will likely be updated when the D-Plan is revised to include information provided in responses to agency re quests for additional information (RAIs). NRC requested confirmation that it is likely that this revised DCE will show that license termination is possible within the available funds. This submittal provides an update of the DCE that shows it is likely that groundwater remediation, plus some post-remediation activities, can be completed with available funding.

The DCE presented in the D-Plan assumed that the design of groundwater remediation and water treatment facilities would be advanced to 90% design status in 2023. However, advancing the designs was delayed as the CERT focused on responding to RAIs as well as ongoing agency requests for information; consequently, expenditures in 2023 were well below those projected in the DCE. The result is that the available funding at the beginning of 2024 is over $4,000,000 greater than had been assumed in the D-Plan.

The most significant impact to maintaining sufficient funding is the cost of construction, which represents approximately one-third of the total available funding. EPM will obtain competitively bid cost estimates for each aspect of construction in 2024; these costs estimates will be significant in the revision of the DCE upon issuance of the amended license.

EPM updated the DCE presented in the D-Plan, assuming that the 2022 cost estimates for work proposed in the D-Plan (with escalation) are still appropriate. A return on the invested funds of approximately 1% per annum and a rate of escalation of 3% per annum was assumed in the updated DCE. Since 2017, the return on the invested funds averaged approximately 1.9%,

including year 2021, when the return was only 0.2%. Consequently, the use of a 1% return through the duration of the project is a conservative assumption. to this letter presents a revised version of Tables 16-5a and 16-5b. The tables begin with the funding available at the beginning of 2024, the budgeted costs for 2024, and projected costs for construction and operations per the D-Plan. includes no costs for NRC or DEQ oversight fees. It does include the cost to apply for a State discharge permit in 2025 and annua l permit fees thereafter (until groundwater remediation ends in 2038). It assumes an escalation rate of 3% for discharge permit fees; this is likely excessive, but the cost is negligible relative to total annual costs.

The total funding available for decommissioning activ ities consists of the funds in the Federal Environmental Cost Account, the State Environmental Cost Account, and the Standby Trust Account. The value of each of these accounts as of December 31, 2023, was:

9400 Ward Parkway

• Kansas City, MO 64114 Tel: 405-642-5152

• jlux@envpm.com

Federal Environmental Cost Account - $55,430,195 State Environmental Cost Account - $13,225,465 Standby Trust Account - $3,717,857 The total value of all three accounts at the beginning of 2024 was $72,373,517. Amounts shown in Attachment 1 in bold font represent the total funding available at the end of each year.

The duration of groundwater remediation is projected to mid-2038. Attachment 1 indicates that there should be several million dollars availabl e at that time, which would provide funding for some post-remediation work (e.g., post-remediation groundwater monitoring, survey and disposal of processing equipment, etc.). EPM believes that optimization of remediation operations can reduce the time required for remediation, providing additional funding for the post-remediation activities presented in the D-Plan.

Note: Revising the return on Trust investments to the average (since 2017) of 1.88% indicates that nearly $3,000,000 will be available at the end of 2040, an increase in funding at that time of over $5,000,000.

If you have any questions or desire clarification, please call me at (405) 642-5152.

Sincerely,

Jeff Lux Project Manager

cc: (electronic copies only)

Stephanie Anderson and Linda Gersey, NRC Region IV Paul Davis, Keisha Cornelius, Lee Dooley, David Cates, and Jonathan Reid, DEQ NRC Public Document Room vcpsubmittals@deq.ok.gov

9400 Ward Parkway

• Kansas City, MO 64114 Tel: 405-642-5152

• jlux@envpm.com

ATTACHMENT 1 CIMARRON ENVIRONMENTAL RESPONSE TRUST DECOMMISSIONING COST ESTIMATE ELIMINATING OVERSIGHT FEES

9400 Ward Parkway

• Kansas City, MO 64114 Tel: 405-642-5152

• jlux@envpm.com