ML12354A129

Independent Spent Fuel Storage Installation - Decommissioning Funding Status Report - 2012

ML12354A129
Person / Time
Site:	Palo Verde
Issue date:	12/14/2012
From:	Weber T Arizona Public Service Co, Pinnacle West Capital Corp
To:	Document Control Desk, NRC/NMSS/SFST
References
102-06633-TNW/RKR
Download: ML12354A129 (14)

Text

10 CFR 72.30 AA subsidiaryof Pinnacle West CapitalCorporation Thomas N. Weber Mail Station 7636 Palo Verde Nuclear Department Leader Tel. 623-393-5764 PO Box 52034 Generating Station Regulatory Affairs Fax 623-393-5442 Phoenix, Arizona 85072-2034 102-06633-TNW/RKR December 14, 2012 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Director, Division of Spent Fuel Storage and Transportation Office of Nuclear Material Safety and Safeguards Washington, DC 20555-0001 Dear Sirs

Subject:

Palo Verde Nuclear Generating Station Units 1, 2, and 3 Docket Nos. STN 50-528, 50-529, 50-530 and 72-44 Independent Spent Fuel Storage Installation Decommissioning Funding Status Report - 2012 Pursuant to the requirements of 10 CFR 72.30, Arizona Public Service Company (APS) is submitting the 2012 Decommissioning Funding Status Report for the Independent Spent Fuel Storage Installation (ISFSI) at Palo Verde Nuclear Generating Station (PVNGS). APS is relying upon information provided by the Participant Owners of PVNGS and the PVNGS ISFSI, in providing the information in this report. The enclosure to this letter contains the information required by 10 CFR 72.30(b) and (c).

No commitments are being made to the NRC in this letter. Should you need further information regarding this submittal, please contact Robert K. Roehler, Licensing Section Leader, at (623) 393-5241.

Sincerely, TNW/RKR/hsc A member of the STARS (Strategic Teaming and Resource Sharing) Alliance Callaway

• Comanche Peak

• Diablo Canyon

• Palo Verde

• San Onofre

• South Texas

• Wolf Creek

U. S. Nuclear Regulatory Commission ATTN: Document Control Desk Independent Spent Fuel Storage Installation Decommissioning Funding Status Report - 2012 Page 2

Enclosure:

2012 Decommissioning Funding Status Report for the Independent Spent Fuel Storage Installation at Palo Verde Nuclear Generating cc: E. E. Collins Jr. NRC Region IV Regional Administrator L. K. Gibson NRC NRR Project Manager M. A. Brown NRC Senior Resident Inspector for PVNGS

Enclosure 2012 Decommissioning Funding Status Report for the Independent Spent Fuel Storage Installation at Palo Verde Nuclear Generating Station

Enclosure - ISFSI 2012 Decommissioning Funding Status Report Pursuant to 10 CFR 72.30, each licensee for an Independent Spent Fuel Storage Installation (ISFSI), including an ISFSI licensed under the General License provided for in 10 CFR Part 72, Subpart K, is required, at intervals not to exceed 3 years, to submit a decommissioning funding plan with adjustments as necessary to account for changes in costs and the extent of contamination, as well as information regarding the financial assurance provided for funding such costs. On behalf of the owners of Palo Verde Nuclear Generating Station (PVNGS) and the PVNGS ISFSI, Arizona Public Service Company (APS) provides the requested information below:

1. Information on how reasonable assurance will be provided that funds will be available to decommission the ISFSI:

See response to number 4 below, which discusses the appropriate method of financial assurance contemplated under 10 CFR 72.30(e).

2. A detailed cost estimate (DCE) for decommissioning:

In 1998, TLG Services, Inc. (TLG) prepared a site-specific Decommissioning Cost Study for the PVNGS (DCE), which included the costs of decommissioning the ISFSI. This report has been updated, most recently in 2011. The most recent TLG Report found that the total cost of decommissioning the PVNGS ISFSI after sixty years of operation would be $11.5 million in ;2010 dollars, including site restoration costs (non-radiological decommissioning). With an escalation factor of 3.5 percent, this cost is approximately $12.3 million in 2012 dollars. This cost estimate includes the cost of an independent contractor to perform all decommissioning activities, an adequate contingency factor of 14.9 percent, and the cost of meeting the 10 CFR 20.1402 criteria for unrestricted release.

Below is the effect of the following on the detailed cost estimate since the previous report:

a. Spills of radioactive material producing additional residual radioactivity in onsite subsurface material: None

b. Facility modifications: None

c. Changes in authorized possession limits: None

d. Actual remediation costs that exceed the previous cost estimate: None Page 1

Enclosure - ISFSI 2012 Decommissioning Funding Status Report

3. Identification of and justification for using the key assumptions contained in the decommissioning cost estimate:

The key ISFSI assumption from the 2010 Decommissioning Cost Study is that some activation of the liner material in the casks is assumed to occur over the dry storage period of the spent fuel. The cost of the disposition of this material, as well as the conventional demolition of the ISFSI facility, is included in the estimate.

4. A description of the method of assuring funds for decommissioning from 10 CFR 72.30(e), including means of adjusting cost estimates and associated funding levels periodically over the life of the facility:

The PVNGS owners are using the external sinking fund method as authorized in 10 CFR 72.30(e)(5) and 50.75(e)(1)(ii). The owners recover their costs for decommissioning through cost of service ratemaking, including the estimated costs to decommission the PVNGS ISFSI, which are included in the TLG Report.

APS notes that Section 1.6 of the Public Service Company of New Mexico's (PNM) Annual Funding Status Report, which is provided as Attachment 5 to the decommissioning funding status report provided as the Enclosure to the APS letter dated March 30, 2011 (ADAMS Accession No. 110950393), provides the basis for its using the external sinking fund method as follows:

Costs associatedwith [Public Service Company of New Mexico's (PNM)] interest in Unit 3 have never been in retailrates and such costs were permanently excluded from New Mexico retailrates by an [New Mexico Public Regulation Commission] order issued in 1989. Effective January30, 2009, PNM sold its naturalgas utility operations to a thirdparty. PNM in the year 2010 collected about 84 percent of its electric utility revenues from cost-of-service based rates. As a consequence, PNM collects the vast majority of its Unit 3 decommissioning costs through cost-of-service based revenues within the meaning of 10 CFR 50.75(e)(1)(ii)(A), notwithstanding the exclusion of PVNGS Unit 3 from retailrates. PNM's electric revenues from its interest in Unit 3 represented8 percent of PNM's electric revenues in the year2010.

In the event that funds remaining to be placed into the PVNGS owners' external sinking funds are no longer approved for recovery in rates by competent rate making authorities, the PVNGS owners will make changes to provide financial assurance using one or more of the methods stated in 10 CFR 72.30(e)(1)-(4).

The Participation Agreement governing the obligations of the PVNGS owners requires that the site-specific DCE for PVNGS be updated once every three years. This provides the means for updating the cost estimate and required funding levels associated with the decommissioning of the PVNGS ISFSI.

Page 2

Enclosure - ISFSI 2012 Decommissioning Funding Status Report

5. The volume of onsite subsurface material containing residual radioactivity that will require remediation to meet the criteria for license termination:

APS assumes that there is no volume of onsite subsurface material containing residual radioactivity that will require remediation to meet the criteria for license termination. r

6. A certification that financial assurance for decommission has been provided in the amount of the cost estimate for decommissioning:

Pursuant to the Participation Agreement governing the obligations of the PVNGS owners, each owner is required to establish and maintain Termination Fund(s) for the accumulation of funds to decommission PVNGS, including a requirement that such funds meet the regulatory requirements of the NRC for providing financial assurance for decommissioning, as well as other requirements. Every year, each PVNGS owner provides an Annual Decommissioning Funding Report and certifies compliance with these requirements. Copies of the most recent certifications for the 2011 reports are provided as Appendix A to this Report.

Page 3

APpendix A Certifications

ARIZONA PUBLIC SERVICE COMPANY'S CERTIFICATE FOR ANNUAL FUNDING STATUS REPORT FOR PERIOD ENDING DECEMBER 31,2011 Lee R. Nickloy, Vice President and Treasurer of Arizona Public Service Company certifies on behalf of Arizona Public Service Company that the provisions of trust agreements establishing, and all other instruments providing for investment management of the Termination Funds of Arizona Public Service Company, taken together, comply with Section 8A.7.2.2 and all other provisions of the Arizona Nuclear Project Participation Agreement, dated as of August 23, 1973, as amended by Amendment Nos. 1 through 14, establishing requirements for such agreements and instruments; and further certifies that, to the best of the knowledge of Lee R.

Nickloy, the information contained in the report to which this Certificate is attached is true and correct and accurately sets forth the status of the Termination Funds of Arizona Public Service Company as of the date stated.

DATED: May 3, 2012 Lee R. Nickloy Vice President & Treasurer

SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT'S CERTIFICATE FOR ANNUAL FUNDING STATUS REPORT FOR PERIOD ENDING DECEMBER 31,2011 Dean Duncan, Treasurer and Senior Director of Financial Services, Salt River Project Agricultural Improvement and Power District, certifies on behalf of Salt River Project Agricultural Improvement and Power District that the provisions of the trust agreement establishing, and all other instruments providing for investment management of, the Termination Fund of Salt River Project Agricultural Improvement and Power District, taken together, comply with Section 8A.7.2.2. and all other provisions of the Arizona Nuclear Power Project Participation Agreement, dated as of August 23, 1973, as amended by Amendment Nos. 1 through 13, establishing requirements for such agreements and instruments; and further certifies that, to the best of the knowledge of Dean Duncan, the information contained in the report to which this Certificate is attached is true and correct and accurately sets forth the status of the Termination Fund of the Salt River Project Agricultural Improvement and Power District as of the date stated.

Dated: - /

Dean Duncan, Treasurer & Senior Director, Financial Services

EL PASO ELECTRIC COMPANY CERTIFICATE FOR ANNUAL FUNDING STATUS REPORT FOR PERIOD ENDING DECEMBER 31,2011 Steven P. Busser, Vice President-Treasurer, certifies on behalf of El Paso Electric Company that the provisions of trust agreements establishing, and all other instruments providing for investment management of, the Tertnination Funds of El Paso Electric Company, taken together, comply with Section 8A.7.2.2 and all other provisions of the Arizona Nuclear Power Project Participation Agreement, dated as of August 23, 1973, as amended by Amendment Nos.

1 through 14, establishing requirements for such agreements and instruments; and further certifies that, to the best of the knowledge of Steven P. Busser, the information contained in the report to which this Certificate is attached is true and correct and accurately set forth the status of the Termination Funds of El Paso Electric Company as of the date stated.

DATED: June 6,2012 Steven P. Busser Vice President-Treasurer

Southern California Edison Company Certificate for Annual Funding Status Report For the Period Ending December 31, 2011 Robert 'C. Boada, Vice President and Treasurer of Southern California Edison, certifies on behalf of Southern California Edison that the provisions of the trust agreement establishing, and all other instruments providing for investment management, of the Termination Funds of Southern California Edison Company, taken together, comply with Section 8.A.7.2.2 and all other provisions of the Arizona Nuclear Power Project Participation Agreement, dated as of August 23, 1973, as amended by Amendments No. 1 through 14, establishing requirements for such agreements and instruments; and further certifies tlat, to the best of the knowledge of Robert C. Boada, the information contained in the report to which this Certificate is attached is true and correct and accurately sets forth the status of the Termination Funds of Southern California Edison Company as of the date stated.

Dated: May 4, 2012 ROBERT C. BOADA Vice President and Treasurer Soluthern California Edison Company N)

PNw Resources PNM Resources Alvarado Square MS 1120 Albuquerque, NM 87158 FAX (505)241-4386 MANUAL OF THE TERMINATION FUNDING COMMITTEE Public Service Company of New Mexico Certificate for Annual Funding Status Report For Period Ending December 31, 2011 Ronald N. Darnell, SVP, Public Policy of Public Service Company of New Mexico, certifies on behalf of the Public Service Company of New Mexico, that the provisions of the trust agreement establishing, and all other instruments providing for investment management of, the Termination Funds of Public Service Company of New Mexico, taken together, comply with Section 8A.7.2.2 and all other provisions of the Arizona Nuclear Power Project Participation Agreement, dated as of August 23, 1973, as amended by Amendment Nos. 1 through 15, establishing requirements for such agreements and instruments; and further certifies that, to the best of the knowledge of Terry R. Horn, the information contained in the report to which this Certificate is attached is true and correct and accurately sets forth the status of the Termination Funds of Public Service Company of New Mexico as of the date stated.

Dated: Ž Ronald N. Darnell SVP, Public Policy

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)CP (626) 793-9364 - Fax: (626) 793-9461 Vnwww,.scppa.org SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY CERTIFICATE FOR ANNUAL FUNDING STATUS REPORT FOR THE PERIOD ENDING DECEMBER 31, 2011 Bill D. Carnahan, Executive Director of Southern California Public Power Authority certifies on behalf of Southern California Public Power Authority that all other instruments providing for investment management of the Termination Funds of Southern California Public Power Authority, taken together, comply with Section 8A.7.2.2 and all other provisions of the Arizona Nuclear Project Participation Agreement dated as of August 23, 1973, as amended by Amendment Nos. 1 through 13 establishing requirements for such agreements and instruments; and further certifies that, to the best of the knowledge of Bill D. Carnahan, the information contained in the report to which this certificate is attached is true and correct and accurately sets forth the status of the Termination Fund of So California Public Power Authority as of the date stated.

Dated: February 28, 2012 BILL D. HAN Executive Director of Southern California Public Power Authority

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LOS ANGELES DEPARTMENT OF WATER & POWER CERTIFICATE FOR ANNUAL FUNDING STATUS REPORT FOR THE PERIOD ENDING DECEMBER 31, 2011 Philip Leiber, Chief Financial Officer of Los Angeles Department of Water and Power certifies on behalf of Los Angeles Department of Water and Power that all other instruments providing for investment management of the Termination Funds of Los Angeles Department of Water and Power, taken together, comply with Section 8A.7.2.2 and all other provisions of the Arizona Nuclear Project Participants agreement, dated August 23, 1973, as amended by Amendments Nos. 1 through 13, establishing requirements for such agreements and instruments; and further certifies that, to the best of his knowledge, the information contained in the report to which this certificate is attached is true and correct and accurately sets forth the status of the Termination Funds of Los Angeles Department of Water and Power as of the date stated.

Dated: March 19, 2012 PHILIP LEIBER aW~Thj~x~ ~LJ~~ '~A)i II] NoriliIlope Sliree. I.o. Arli-,lces. Cailforaiia 90012.2607 ii'4ailing addI'?ss: Box 5I1111. Los Angeck. 000SI-5700 7iW eplmnn: (213) 367 -4211 Cable addres sr:DIFW APOLA oI! A mu kz qc w 4