ML091130661

Revised Draft RAI Re. Preliminary Decommissioning Cost Estimate (TAC ME253)

ML091130661
Person / Time
Site:	Monticello
Issue date:	04/23/2009
From:	Tam P Plant Licensing Branch III
To:	Gadzala J, Sly C Dominion Energy Kewaunee
Tam P
References
TAC ME0253
Download: ML091130661 (4)

Text

Accession No. ML091130661 From: Peter Tam Sent: Thursday, April 23, 2009 3:50 PM To: 'Craig.D.Sly@dom.com'; 'Jack.Gadzala@dom.com' Cc: Clayton Pittiglio

Subject:

Kewaunee - Revised RAI re. Preliminary Decommissioning Cost Estimate (TAC ME253)

Craig:

On 4/20/09 the NRC staff discussed with you the draft RAI (Accession No. ML090780862) on Dominion's 12/18/2008 submittal regarding Kewaunee's preliminary decommissioning cost estimate and irradiated fuel management plan in accordance with Title 10 of the Code of Federal Regulations (10 CFR) Part 50, Sections 50.75(f)(3) and 50.54(bb). The NRC staff agreed to revise and finalize some of the questions. Following please find the revised and finalized questions. You may accept these questions as the staff's formal RAI, or request a conference call to discuss and disposition the questions. In either case, please submit your formal response by 6/23/2009.

Kewaunee Preliminary Decommissioning Cost Estimate (08-0702)

RAI No. 1: Page 2 In this submittal, DEK applied a fund growth rate of 6.24 percent for the period from 2008-2013, and 5.233 percent growth rate for the period from 2014 to the end of the projected decommissioning period. For the entire period, DEK applied an escalation cost rate of 3.233 percent. DEK needs to provide a basis that supports using a real rate of return of greater than 2 percent for the period from 2008-2013.

RAI No. 2: Attachment, Page 6, Section 3.2 Escalation to 2008 Dollars In the submittal, DEK references a 2006 EnergySolutions site-specific cost estimate referred to as the 2006 Cost Study, and stated that the costs were escalated to 2008 dollars. However, the 2006 Cost Study was not included as part of the submittal. The 2006 Cost Study with its supporting basis constitutes part of DEKs analyses, and needs to be submitted to substantiate DEKs estimated decommissioning costs. The NRC staff will review the 2006 Cost Study to determine if the estimate and supporting assumptions are reasonable, and may issue additional RAIs on the 2006 Cost Study.

RAI No. 3: Page 6, Attachment, Section 3.2 Escalation to 2008 Dollars This submittal escalates the $334.3 million identified in the 2006 cost estimate in 2005 dollars to

$380.6 million in 2008 dollars based on the following escalation rates: 3.863 percent for the period from 2005 to 2006, 3.80 percent for the period from 2006 to 2007, and 3.814 percent for the period from 2007 to 2008. The formula amount calculated in Table 2 by DEK, as of December 31, 2007, is $327.5 million. The formula amount calculated as of December 31, 2008, is $360.4 million. Since the 2008 formula amount is based on NUREG-1307, Rev. 13, and represents an increase that is greater than 10 percent for the period 2007 to 2008, and the sum of DEKs escalation rates is approximately 13.0 percent for the entire period of 2005-2008,

DEKs escalation rate is significantly lower than the escalation based on NUREG-1307, Rev.

13. DEK needs to provide more detail on what factors its escalation was based on.

RAI No. 4: Page 3, Table 1 - Annual Cash Flow Calculations The staff applied a 2 percent real rate of return to the trust fund balance of $380.7 million as of October 31, 2008, thru the remainder of the operating license period. Following the expiration of the operating license, the staff applied 2 percent real rate of return and deducted the License Termination Expenses identified in Column 6 of Table 1 in 2008 dollars. The staff was not able to reconcile the difference between DEKs analysis and the staffs analysis. The staff also applied the recommended 5.233 percent fund growth rate and escalation factor of 3.233 percent, to compare future dollar analysis, and was still not able to reconcile the difference between the staffs analysis and DEKs analysis. Please reconcile the difference between the staffs and DEKs analyses.

RAI No. 5: Page 3, Table 1 - Annual Cash Flow Calculations The staff requests DEK to address the impacts on its analysis based on the apparent $9.1 million decrease in the DTF balance to $370.0 as of December 31, 2008, identified in DEKs submittal dated March 30, 2009, entitled Decommissioning Funding Status Report. Recognize that if there are changes in the DTF balance that materially impacts the licensees cost analysis, or if new disposal rates are significantly higher, given these considerations, the licensee would be under an obligation under 10 CFR 50.9 to update any changes in projected cost, or available funds.

RAI No. 6: Attachment, Page 4, Table 2-2 DEK has selected immediate dismantlement (DECON) as its decommissioning option. For immediate dismantlement, the cost associated with isolation of the spent fuel pool (wet storage) to support cooling the last core while the plant is being dismantled was not identified as part of KPSs radiological decommissioning cost. The staff disagrees with allocating that cost under spent fuel as it is a necessary step to DECON the plant. DEK has estimated a cost of $20.8 million for fuel pool planning and design, and an additional $103.3 million associated with the cost for fuel cooling, wet storage, and eventual transfer to dry cast storage. The staff has taken the position that these are essential activities necessary to support immediate dismantlement and part of the radiological decommissioning costs, and therefore it is necessary to have the supporting funding set aside as part of the decommissioning trust funds (DTF) to complete radiological decommissioning. When the staff included in its analysis the cost identified in Table 2 of the December 19, 2008 (No. 08-0754) submittal that addressed the annual expenses for spent fuel management for the years from 2013-2020 as part of the radiological decommissioning costs, the DTF balance was not sufficient to address all of the DECON costs.

DEK needs to address the DTF shortfall.

Kewaunee Irradiated Fuel Management Plan (08-0754)

RAI No 7: Attachment, Page 2 In this submittal, DEK references a Parent Support Agreement in the amount of $60.0 million to be used for supplementing DEK in the event of an operational outage lasting more than 6 months and for decommissioning. Provide documentation regarding the Parent Support Agreement and how there is reasonable assurance that these funds will be available in 2013 to

support decommissioning since the funds are also allocated to support an extended outage.

Please identify whether the additional amount of $131.8 million is assured by a financial mechanism, or has it been established to support a spent fuel management program?

RAI No. 8: Submittal 08-0754, Attachment, Page 3, Table 2 In this submittal, Table 2 lists spent fuel management costs of $322.6 million in 2008 dollars.

Based on a DTF balance of $74.5 million in current (2008) dollars combined with a proposed supplement of $60.0 million in 2013 (in 2013 dollars), and an additional $131.8 million, if needed, in 2016 dollars, the total amount of funds available is less than the referenced $322.6 million in 2008 dollars. The total available funds, not withstanding discounting of 2013 and 2016 funds to 2008 dollars, is underfunded by more than $50.0 million dollars. DEK needs to address this funding shortfall.

Peter S. Tam, Senior Project Manager Plant Licensing Branch III-1 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Tel. 301-415-1451 E-mail Properties Mail Envelope Properties (C56E360E9D804F4B95BC673F886381E71F404AA180)

Subject:

Kewaunee - Revised RAI re. Preliminary Decommissioning Cost Estimate (TAC ME253)

Sent Date: 4/23/2009 3:49:35 PM Received Date: 4/23/2009 3:49:00 PM From: Peter Tam Created By: Peter.Tam@nrc.gov Recipients:

Craig.D.Sly@dom.com ('Craig.D.Sly@dom.com')

Tracking Status: None Jack.Gadzala@dom.com ('Jack.Gadzala@dom.com')

Tracking Status: None Clayton.Pittiglio@nrc.gov (Clayton Pittiglio)

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