ML14085A016

Company - Decommissioning Funding Assurance Status Report

ML14085A016
Person / Time
Site:	Maine Yankee
Issue date:	03/12/2014
From:	Pizzella C Maine Yankee Atomic Power Co
To:	Document Control Desk, Office of Nuclear Material Safety and Safeguards
References
OMY-14-027
Download: ML14085A016 (10)

Text

MAINE YANKEE 321 Old Ferry Road, Wiscasset, Maine 04578 March 12, 2014 OMY-14-027 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 Maine Yankee Atomic Power Company Maine Yankee Independent Spent Fuel Storage Installation NRC License No. DPR-36 (NRC Docket Nos. 50-309 and 72-30)

Subject:

Decommissioning Funding Assurance Status Report On August 7, 1997, Maine Yankee Atomic Power Company (Maine Yankee) informed the USNRC that the Board of Directors of Maine Yankee had decided to permanently cease operations at the Maine Yankee Plant 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 Maine Yankee license to permanently withdraw Maine Yankee's authority to operate the reactor. In 1998, Maine Yankee commenced decommissioning the power plant. On September 30, 2005, the NRC amended the Maine Yankee license, releasing 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 Maine Yankee 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, Maine Yankee provides the attached Decommissioning Funding Assurance Status Report for the Maine Yankee 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 commitments.

If you have any questions regarding this letter, please do not hesitate to contact me at (860) 267-6426 x304.

Respectfully, Carla M. Pizzella Vice President, Chief'Financial Officer, and Treasurer

Maine Yankee Atomic Power Company OMY- 14-027\March 12, 2014\Page 2

Attachment:

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

References:

1. Maine Yankee letter to USNRC, "Certifications of Permanent Cessation of Power Operation and Permanent Removal of Fuel from the Reactor," dated August 7, 1997

2. USNRC letter to Maine Yankee, "Issuance of Amendment No. 172, To Facility Operating License No. DPR Maine Yankee Atomic Power Station (TAC NO. M8000," dated September 30, 2005 cc: W. M. Dean, NRC Region I Administrator M. S. Ferdas, Chief, Decommissioning Branch, NRC, Region 1 J. Goshen, NRC Project Manager P. Dostie, State of Maine, Nuclear Safety Inspector J. Hyland, State of Maine, Manager Radiation Control Program

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OMY- 14-027 ATTACHMENT 1 DECOMMISSIONING FUNDING STATUS REPORT FOR THE MAINE YANKEE INDEPENDENT SPENT FUEL STORAGE INSTALLATION (STATUS AS OF 12/31/2013)

March 2014

Attachment I to OMY-14-027 Decommissioning Funding Status Report for the Maine Yankee Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR Requirement I Response Comment 10 CFR 50.75(f)(1) and (2) Requirements

1. The amount of decommissioning $22.7 million 10 CFR 50.75 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 1998, Maine Yankee Atomic Power Company (Maine Yankee) commenced decommissioning the power plant. On September 30, 2005, the NRC amended the Maine Yankee license, releasing most of the formerly licensed land for unrestricted use, shrinking the licensed land to only that associated with the Maine Yankee Independent Spent Fuel Storage Installation (ISFSI). Thus, the only decommissioning activities and decommissioning funding requirements that remain are those associated with the decommissioning of the Maine Yankee 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, Maine Yankee provided a decommissioning funding plan for the Maine Yankee ISFSI in accordance with 10 CFR 72.30(b)(2) that included a revised Decommissioning Cost Estimate (DCE) for the Maine Yankee ISFSI. On January 8, 2013, Maine Yankee submitted a revision to that decommissioning funding plan for the Maine Yankee ISFSI.

2. The amount accumulated at the $25.6 million Maine Yankee has established an account within its Nuclear Decommissioning Trust end of the calendar year preceding (as of (NDT) entitled "ISFSI Radiological Decom" that segregates the funds for the date of the report for items 12/31/13) decommissioning of the ISFSI from the larger balance of funds for ongoing included in management of irradiated fuel and GTCC waste held in the NDT. This market balance 10 CFR 50.75(e)(1)(i). only reflects the funds in the segregated account for decommissioning the ISFSI.

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Attachment 1 to OMY-14-027 Decommissioning Funding Status Report for the Maine Yankee Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR Requirement Response Comment

3. Schedule of the annual amounts $0 No additional comments.

remaining to be collected Including amounts beyond those required in 10 CFR 50.75(e)(1)(i).

1. Years to collect N/A

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 4.5%

decommissioning trust funds, and Other factors assumed. None

5. Any contracts upon which the Yes Maine Yankee is currently collecting funds through its power contracts and amendatory licensee is relying pursuant to agreements under Federal Energy Regulatory Commission (FERC) regulation. The 10 CFR 50.75(e)(1)(ii)(A). power contracts and the amendatory agreements specify the obligations of the purchasers for the costs of Maine Yankee, 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.

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Attachment 1 to OMY-14-027 Decommissioning Funding Status Report for the Maine Yankee Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR Requirement Comment

7. Any material changes to trust No additional comments.

agreements.

10 CFR 50.82(a)(8)(v) (A) through (D) Requirements

1. The amount spent on In 1998, Maine Yankee commenced decommissioning the power plant. On decommissioning, both: September 30, 2005, the NRC amended the Maine Yankee license, releasing most of the formerly licensed land for unrestricted use, shrinking the licensed land to the ISFSI cumulative only. The only decommissioning activities that remain are those associated with the

$0 (Refer to decommissioning of the Maine Yankee ISFSI, which is currently scheduled to be Comment) and completed in calendar year 2032, after the DOE removes 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 are within the control of Operating License No. DPR-36 are those associated with the Maine Yankee ISFSI. Thus, Maine Yankee is only presenting the information associated with the decommissioning of the areas that remain within the control of Operating License No. DPR-36.

Presently, Maine Yankee is storing irradiated fuel and GTCC waste on site until it is removed by the DOE. Decommissioning of the Maine Yankee 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 Maine Yankee ISFSI is $0, and the amount spent in calendar year 2013 is $0.

2. The remaining balance of any $25.6 million Maine Yankee has established an account within its NDT entitled "ISFSI Radiological decommissioning funds. (as of Decom" that segregates the funds for decommissioning of the ISFSI from the larger 12/31/13) 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 OMY-14-027 Decommissioning Funding Status Report for the Maine Yankee Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR Requirement I Response I Comment

3. The amount provided by other $0 As of 12/31/13, Maine Yankee's NDT account entitled "ISFSI Radiological Decom" financial assurance methods being has a 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, Maine Yankee 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 Maine Yankee, including decommissioning. Pursuant to these power contracts, Maine Yankee has the ongoing ability to seek collections from its purchasers for additional funds that may be required to cover these costs.

Second, Maine Yankee 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, Maine Yankee is expecting the proceeds from the successful litigation of the second phase of its breach of contract damages claim against the DOE. Maine Yankee 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, Maine Yankee'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 the ability to apply to FERC for more funding, if necessary. The approved FERC filing also requires Maine Yankee to provide an information filing regarding the adequacy of funding if five years pass without receipt of damage awards from litigation with the DOE.

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Attachment 1 to OMY-14-027 Decommissioning Funding Status Report for the Maine Yankee Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR Requirement Response Comment Third, Maine Yankee 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 $22.7 million On December 17, 2012, Maine Yankee provided a decommissioning funding plan for complete decommissioning, (in 2013 the Maine Yankee ISFSI in accordance with 10 CFR 72.30(b)(2) that included a revised reflecting any difference between dollars) DCE for the Maine Yankee ISFSI. On January 8, 2013, Maine Yankee submitted a actual and estimated costs for revision to that decommissioning funding plan for the Maine Yankee ISFSI.

work performed during the year.

5. The decommissioning criteria 10 CFR The assumptions regarding the decommissioning cost estimate are provided in the upon which the estimate is based. 20.1402 revised DCE for the Maine Yankee ISFSI provided on January 8, 2013.

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 OMY-14-027 Decommissioning Funding Status Report for the Maine Yankee Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR Requirement Response Comment

1. Additional financial assurance None As of 12/31/13, Maine Yankee's NDT account entitled "ISFSI Radiological Decom" required to cover the estimate cost has a 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, Maine Yankee 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 Maine Yankee, including decommissioning. Pursuant to these power contracts, Maine Yankee has the ongoing ability to seek collections from its purchasers for additional funds that may be required to cover these costs.

Second, Maine Yankee 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, Maine Yankee is expecting the proceeds from the successful litigation of the second phase of its breach of contract damages claim against the DOE. Maine Yankee 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, Maine Yankee'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 the ability to apply to FERC for more funding, if necessary. The approved FERC filing also requires Maine Yankee to provide an information filing regarding the adequacy of funding if five years pass without receipt of damage awards from litigation with the Page 6 of 7

Attachment 1 to OMY-14-027 Decommissioning Funding Status Report for the Maine Yankee Independent Spent Fuel Storage Installation (Status as of 12/31/2013) 10 CFR Requirement Response Comment DOE.

Third, Maine Yankee 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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