ML19078A084

Report of Status of Decommissioning Funding

ML19078A084
Person / Time
Site:	Summer
Issue date:	03/18/2019
From:	Crosby M Santee Cooper
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
Download: ML19078A084 (5)

Text

~~antee cooper" March 18, 2019 Michael R. Crosby Document Control Desk Senior Vice President U. S. Nuclear Regulatory Commission Nuclear Energy Washington, D. C. 20555 (843) 761-4126 fax: (843) 761-7037

Subject:

Virgil C. Summer Nuclear Station Unit 1 mrcrosby@santeecooper.com Docket No. 50/395 Operating License No. NPF-12 Report of Status of Decommissioning Funding Ladies and Gentlemen:

The South Carolina Public Service Authority (Authority) and South Carolina Electric & Gas Company (SCE&G) have ownership interests of one-third and two-thirds, respectively, in the Virgil C. Summer Nuclear Station, Unit 1. Due to the merger of Dominion Energy, Inc. and SCANA, SCE&G is now a subsidiary of Dominion Energy. As provided in 10 CFR § 50.75 (f)(l), each power reactor licensee is required to report to the Nuclear Regulatory Commission (NRC) on a calendar year basis, beginning March 31, 1999, and every two years thereafter, the status of its decommissioning funding for each reactor or share of reactor it owns. SCE&G has advised the Authority that it will disclose the* required information relative to its two-thirds ownership share in a separate submittal.

The Authority's one-third share using the NRC formula for the m1mmum funding required for license termination is approximately $153 million as of December 31, 2018. This one-third liability is funded by payments to an external sinking fund as provided for in 10 CFR § 50.75. The escalated one-third liability for license termination costs is expected to total $316 million, stated in dollars of the year of expenditure. The market value of the external fund was approximately $131 million as of December 31, 2018. (Please see Attachment 1.)

A site-specific decommissioning study completed in 2016 identified the total decommissioning costs for the site. Total site decommissioning includes license termination, spent fuel management and site restoration.

The total costs identified by the study are in excess of NRC formula for minimum funding requirements.

Further, as the result of a 2006 settlement with the Department of Energy (DOE), the Authority expects to receive reimbursement for spent fuel management costs incurred that would have been avoided had the DOE

. met its contractual obligation to store spent fuel. The one-third liability in excess of the NRC minimum funding requirements less DOE reimbursements is estimated by the Authority to be approximately $182 million as of December 31, 2018. The escalated one-third liability is expected to be approximately $1.769 billion, stated in dollars of the year of expenditure. The market value of the Authority's internal fund, designated for spent fuel management and site restoration, was approximately $78 million as of December 31, 2018. (Please see Attachment 1.)

If there are any questions concerning this report, please contact me at (843) 761-4126.

s* er~ly, /j~~

'11.!:t-~ii.

chael R. ros y Senior Vice President Nuclear Energy MRC:trw Attachment cc: Catherine Haney Shawn A. Williams NRC Resident Inspector One Riverwood Drive I Moncks Corner, SC 29461-2901 I (843) 761-8000 I P.O. Box 2946101 I Moncks Corner, SC 29461-6101

Attachment 1 l(a). The minimum decommissioning fund estimate, pursuant to 10 CFR § 50.75 (b) and (c). $153,024.947 Base Amount for PWR between 1,200 MWt and 3,400 MWt Estimated Cost (Year X) (1986 $ Base Cost) (ALx + BEx + CBx)

($100,520,000) {(.65 X 2.624) + (.13 X 2.365) + (.22 X 11.607)}

$459,074,840

• Authority's one-third share of2016 Estimated Cost= $153,024,947 Where:

A .65 10 CFR § 50.75 (c)(2)

B .13 10 CFR § 50.75 (c)(2)

C .22 10 CFR § 50.75 (c)(2)

Lx 2.624 (Computed Below)

Ex 2.365 (Computed Below)

Px 2.103 (Computed Below)

Fx 2.727 (Computed Below)

Bx 11.607 (NUREG 1307 Rev. 17) 1986 $ Base Cost ($75,000,000 + .0088Pmillion)

($75,000,000 + 25,520,000)

$100,520,000 p 2,900MWt Lx Base Lx (Dec 2005) x ECI(Qtr 4 2018) / 100 1.98 X 132.5 / 100 2.624 December 2018 Value/ January 1986 Value 240.2 I 114.2 2.103 December 2018 Value/ January 1986 Value 223.6 I 82.0 2.727

{(.58Px) + (.42Fx)}

{(.58 X 2.103) + (.42 X 2.727)}

(1.220 + 1.145) 2.365 Fourth Quarter 2018 / December 2018 values in the following Bureau of Labor Statistics indices were used to compute NRC minimum requirements:

Employment Cost Index -Total compensation, private industry, South region SeriesID: CIU2010000000220I Producer Price Index - Commodities (Industrial electric power)

SeriesID: wpu0543 Producer Price Index - Commodities (Light fuel oils)

SeriesID: wpu0573 1 of4

Attachment 1 l(b). Escalation of the Authority's one-third share of the minimum funding requirement through the end of decommissioning.

Cost categories Labor, Equipment & Materials, Burial, and Other were estimated in a site-specific decommissioning study. These costs were escalated through the end of the decommissioning period based on various indices and estimates. Ultimate decommissioning costs to be funded from the external trust are estimated at $315,828,342 in escalated dollars.

2. Market value of the external trust fund at December 31, 2018 for items included in 10 CFR § 50.75. $130,713.506

3. Schedule of annual amounts remaining to be collected for items in 10 CFR § 50.75.

2018 Dollars Beginning (?ecommissioning ; Annual Ending Real Rates Year Balance Expenditures Deposits Earninas Balance of Return 2019 130,713,506 0 1,151,433 131,864,939 0.0088 2020 131,864,939 115,260 1,146,632 133,126,831 0.0087 2021 133,126,831 115,260 1,163,657 134,405,748 0.0087 2022 134,405,748 115,260 1,086,344 135,607,351 0.0081 2023 135,607,351 115,260 1,083,797 136,806,408 0.0080 2024 136,806,408 115,260 1,016,705 137,938,373 0.0074 2025 137,938,373 115,260 994,358 139,047,991 0.0072 2026 139,047,991 115,260 1,006,760 140,170,011 0.0072 2027 140,170,011 115,260 985,280 141,270,551 0.0070 2028 141,270,551 115,260 894,903 142,280,714 0.0063 2029 142,280,714 115,260 901,302 143,297,275 0.0063 2030 143,297,275 115,260 907,741 144,320,276 0.0063 2031 144,320,276 115,260 899,790 145,335,326 0.0062 2032 145,335,326 115,260 906,118 146,356,704 0.0062 2033 146,356,704 115,260 912,486 147,384,450 0.0062 2034 147,384,450 115,260 918,894 148,418,604 0.0062 2035 148,418, 604 115,260 910,499 149,444,363 0.0061 2036 149,444,363 115,260 916,792 150,476,415 0.0061 2037 150,476,415 115,260 923,123 151,514,799 0.0061 2038 151,514,799 115,260 914,342 152,544,401 0.0060 2039 152,544,401 115,260 920,555 153,580,216 0.0060 2040 153,580,216 115,260 926,806 154,622,282 0.0060 2041 154,622,282 115,260 917,633 155,655,175 0.0059 2042 155,655, 175 9,108,627 869,706 147,416,254 0.0059 2043 147,416,254 21,860,707 745,131 126,300,677 ' 0.0059 2044 126,300,677 21,860,707 619,817 105,059,787 0.0059 2045 105,059,787 21,860,707 485,439 83,684,520 0.0058 2046 83,684,520 21,860,707 360,722 62,184,534 0.0058 2047 62,184,534 21,860,707 235,276 40,559,104 0.0058 2048 40,559,104 21,860,707 107,229 18,805,626 0.0057 2049 18,805,626 12,752,078 34,715 6,088,263 0.0057 Total 130,713,506 153,024,947 2,535,720 25,863,984 6,088,263 2 of4

Attachment 1

4. The assumptions used regarding escalation fo decommissioning cost, rates of earnings on decommissioning funds, and rates of other factors used in funding projections follow:

• The previous schedule of annual amounts remaining to be collected is based on a DECON method of decommissioning. In contrast, the Authority currently intends to utilize a SAFSTOR method of decommissioning.

• Costs are escalated by four categories identified in the 2016 site-specific study using the following rates: labor (2.7%), equipment and materials (1.2%), waste burial (3.8%) and other (2.8%). These rates were proposed in an internal memorandum and approved on March 27, 2017 by the Senior Vice President of Nuclear Energy and represent the Authority's best estimate of future cost increases. The schedule below shows weighted average escalation rates reflecting the above cost categories weighted by individual category costs over the sum of the four categories.

• LLW will be disposed of using a combination of compact-affiliated and non-compact disposal facilities.

• The trust fund accrues earnings in accordance with estimated effective yield (approximately 3.3% as shown below). The Authority's Board of Directors approves all customer rates. As the rate-regulatory authority, the Board adopted on March 22, 1999 a resolution containing the following language: "Upon recommendation of management, the Board of Directors authorizes the use of the effective yield of the trust portfolio for purposes of determining future decommissioning funding needs." -

A B ( A- B)

Projected Weighted Average Year Earnina Rates Escalation: Rates

• Real Rates of Return 2019 0.0350 0.0262 0.0088 2020 0.0349 0.0262 0.0087 2021 0.0349 0.0262 0.0087 2022 0.0344 0.0263 0.0081 2023 0.0343 0.0263 0.0080 2024 0.0337 0.0263 0.0074 2025 0.0336 0.0264 0.0072 2026 0.0336 0.0264 0.0072 2027 0.0334 0.0264 0.0070 2028 0.0328 0.0265 0.0063 2029 0.0328 0.0265 0.0063 2030 0.0328 0.0265 0.0063 2031 0.0328 0.0266 0.0062 2032 0.0328 0.0266 0.0062 2033 0.0328 0.0266 0.0062 2034 0.0328 0.0266 0.0062 2035 0.0328 0.0267 0.0061 2036 0.0328 0.0267 0.0061 2037 0.0328 0.0267 0.0061 2038 0.0328 0.0268 0.0060 2039 0.0328 0.0268 0.0060 2040 0.0328 0.0268 0.0060 2041 0.0328 0.0269 0.0059 3 of4

Attachment 1 2042 0.0328 0.0269 0.0059 2043 0.0328 0.0269 0.0059 2044 0.0328 0.0269 0.0059 2045 0.0328 0.0270 0.0058 2046 0.0328 0.0270 0.0058 2047 0.0328 0.0270 0.0058 2048 0.0328 0.0271 0.0057 2049 0.0328 0.0271 0.0057

5. Contracts upon which the licensee is relaying pursuant to 10 CFR § 50.75 (e) (1) (v).

None.

6. Modifications to the current funding assurance methods.

None.

7. Material changes to Trust Agreements.

None.

8. Authority's one-third share of the 2016 Site-Specific Study (SAFSTOR method).

Y.ear of 2018 Expenditure Do.llars Dollars NRC Minimum Funding Requirements - License Termination (radiological decommissioning costs) (1) 153,024,947 315,828,342 Excess Site-Specific Study Costs (license termination, spent fuel management and site restoration costs) Net of Estimated DOE Reimbursements (spent fuel management costs) (2) 182,408,315 1,769,018,507 2016 Site-Specific Study Costs (license termination, spent fuel management and site restoration costs) Net of Estimated DOE Reimbursements (spent fuel management costs) (2) 335,433,262 2,084,846,849 (1) Expenditure years are 2042-2049 (2) Expenditure years are 2042-2104

9. Market value of the internal fund at December 31, 2018 for spent fuel management and site restoration $78,355.998 4of4