ML18106B143

Forwards Pse&G Rept on Financial Min Assurance for Period Ending 981231 for Hope Creek,Salem,Units 1 & 2 & Pbaps,Units 2 & 3,IAW 10CFR50.75

ML18106B143
Person / Time
Site:	Peach Bottom, Salem, Hope Creek
Issue date:	03/31/1999
From:	DELANY F E Public Service Enterprise Group
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
LR-N99155, NUDOCS 9904060119
Download: ML18106B143 (8)

Text

Public Service Electric and Gas Company

• Francis E. Delany, Jr. Vice President and 80 Park Plaza, Newark, NJ 07102 I 973-430-6155 Fax No. 973-648-0838 fdelany@pseg.com Mailing Address: P.O. Box 570, Newark, NJ 07101 Corporate Rate Counsel United States Nuclear Regulatory Commission Attention:

Document Control Desk

• Washington, D. C. 20555-0001

Dear Sir:

' ' LR-N99155 March 31, 1999 Enclosed in this filing b(!fore the United States Nuclear Regulatory Commission

• (NRC), please fmd the Public Service Electric and Gas Company (PSE&G) Report on Financial Minimum Assurance for the period ending December 31, 1998 in accordance with 10 CFR 50.75. The Report provides assurance regarding the following requirements of

• 50.75(f)(l) at December 31, 1998: . .

• PSE&G nlinimum decommissioning fund estimate ) / / *

• The amount accumulated in qualified and non-qualified independent external / trust:funds

• Amounts collected on an annual basis in the rate setting process

• Assumptions used in escalation of assets and liability

• Changes in contracts, license or trust agreements.

Allu) If you have any questions or require additional information, I may be reached at (973) 430'."6155.

Sincerely, .L (;: !

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SERVICE LIST: Mr. H.J. Miller, Administrator-Region 1 U. S. Nuclear Regulatory Commission 475 Allendale Road King of Prussia, Pa. 19406 Mr. P. Milano, Licensing Project Manager -Salem U. S. Nuclear Regulatory Commission One White Flint North . Mail Stop 14E21 115 5 5 Rockville Pike Rockville, Md. 20852 Mr. E. Ennis, Licensing Project Manager -Hope Creek U.S. Nuclear Regulatory Commission One White Flint North Mail Stop 14 E21 115 5 5 Rockville Pike Rockville, Md. 20852 Mr. Robert Wood U. S. Nuclear Regulatory Commission Mail Stop 011"'.Fl Washington, D.C. 20555-0001 USNRC Senior Resident Inspector

-Salem (X24) Mr. S. Morris USNRC Senior Resident Inspector

-Hope Creek (X24) Mr. S. Pindale Mr. Albert F. Kirby, Director Supply Engineering and Support P. 0. Box 6066 Newark, De 19714-6066 Mr. K. Tosch, Manager IV Bureau of Nuclear Engineering P. 0. Box415 Trenton, NJ 08625

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-. SERV.ICE LIST: Roberta A. Kankus PECO Energy 965 Chesterbrook Blvd 636-2 \Vayne,Pa.

19087-5691 R. I. McLean MD Power Plant Siting Program Tawes State Office Building Annapolis, Md. 21401 R. R .. J anati, Director BRP P. 0. Box 2063 Harrisburg, Pa. 17120 George Shicora PECO ENERGY 2301 Market Street Philadelphia, Pa. 19101-6899 Louis M. \V alters, Treasurer Conectiv 800 King Street P. 0. Box231 \Vilmington, De 19899 LN-N99155 Public Service Electric and Gas Company NRC Decommissioning Funding Status Report March 31, 1999 As provided in 10 CFR each power reactor is required to report to the Nuclear Regulatory Commission (NRC) on a calendar year basis, beginning on March 31, 1999, and every 2 years thereafter, on the status of its decommissioning funding for each reactor or share of reactor it owns. 1. The minimum decommissioning fund estimate, pursuant to 10 CFR 50.75 (b) and (c)1. In accordance with formula requirements identified in 10 CFR 50.75 (c), Public Service Electric and Gas Company (PSE&G) has prepaid its nuclear decommissioning liability in the amount (aggregate) by $204.6 million, as of December 31, 1998. The calculation is supported

• in Appendix A and Appendix B. Applying the NRC 2% Test, in accordance with 10 CFR 50.75(e)(1)(ii), PSE&G has calculated a liability of $1.72 billion in order to meet the minimum financial assurance requirements at license termination.

The $1. 72 billion liability is based on the NRC's formula calculated at December 31, 1998, escalated through license termination.

The Company believes the amount collected was established by its rate setting authority (New Jersey Board of Public Utilities), will fully fund its independent external trust funds (including earnings on the assets) in order to meet the nuclear decommissioning liability through license termination.

The amount collected through the rate setting process associated with nuclear decommissioning was awarded based on site specific studies, including the removal of high level and low level radioactive waste, as well as the removal of all facilities, and returning the property to a Green Field status. The liability associated with site-specific studies is estimated at $2.3 billion through license termination.

1 *The NRC formulas in section 10CFR50.75(c) include only those decommissioning costsfucurred by licensees to _ remove a facility _or site safely from service and reduce residual radioactivity to levels that permit: (1) release of the. ' property for unrestricted use and termination of the license; or (2) release of the property under restricted conditions and termination of the license. The cost of dismantling or demolishing non-radiological systems and structures is not included in the NRC decommissioning cost estimates.

The costs of managing and storing spent fuel on site until transfer to DOE are not included in the cost formulas.

1 ;:.I I I '

LN-N99155

2. The amount accumulated at the end of the calendar year preceding the date of the report for *items included in 10 CFR 50.75 (b) and (c). (Alternatively, the total amount accumulated at the end of the calendar year preceding the date of the report* can be reported here if the cover letter transmitting the report provides the total estimate and indicates what portion of that estimate is for items not included in 10 CFR 50.75 (b) and (c)). ,., . The amount accumulated in both Qualified and Non-Qualified Trusts at December 31, 1998, for each respective Unit, is disclosed in the following Table: Plant Hope Creek Salem Unit #1 Salem Unit #2 Peach Bottom Unit #2 Peach Bottom Unit #3 Total ($Millions)

Qualified Trust Non-Qualified Trust 154.4 4.6 76.5 37.0 76.2 12.6 66.7 25.6 68.9 19.2 442.7 . 99.0 Total 159.0 113.5 88.8 92.3 88.1 541.7 3. A schedule of the annual amounts remaining to be collected; for items in 10 CFR 50.75 (b) and (c). (Alternatively, the annual amounts remaining to be collected can include items beyond those required in 10 CFR 50.75 (b) and (c) if the cover letter transmitting the report provides a total cost estimate and indicates what portion of that estimate is for items that are not included in 10 CFR 50.75 (b) and (c)). The following schedule, showing amounts to be collected by PSE&G, has been authorized by its rate setting authority, the New Jersey Board of Public Utilities, effective January 1, 1993, based on a site specific nuclear decommissioning study. The amount of collection remained in effect at December 31, 1998. Plant Hope Creek Salem Unit #1 Salem Unit #2 ($ Millions)

Peach Bottom Unit #2 Peach Bottom Unit #3 Total Collections 13.4 2.5 4.2 4.3 5.2 29.6 2 LN-N99155

4. The assumptions used regarding escalation in decommissioning costs, rates of earnings on

• decommissioning funds, and rates of other factors used in funding projections; The assumptions associated with the escalation in decommissioning costs vary in magnitude due to the difference in the remaining license lives.of the .. Company's respective share in each nuclear unit. The following escalation rates, on average, have been used to project future costs . to decommission the Company's respective share of 5 nuclear units: labor 3.36%; low level radioactive waste disposal 3. 75%; energy costs 3.24 % and Producer Price Index at 2.67%. In the rate setting process, the New Jersey Board of Public Utilities authorized a 6.1 % after-tax rate of return for trust funds. PSE&G, in performing the NRC 2% Test, applied a more conservative earnings rate on its Trust Fund assets, equal to 2% plus an average Producer Price Index of 2.67%, for a total asset earnings rate of 4.67%. No other factors were considered in funding projections other than those identified above. 5. Any contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(ii)(c);

The licensee is not relying upon any contracts pursuant to 10 CFR 50.75(e)(1)(ii)(c).

6. Any modifications to a licensee's current method providing financial assurance occurring since the last submitted report. There have been no modifications to the licensee's current method of providing financial assurance since December 31, 1998. 7. Any material changes to trust agreements.

There have been no changes, material or otherwise, to the Master Trust Agreements.

3 Calculation of NRG Funding Requirements for Year 1998 (OOO's) LR-N99155 Appendix A

• I Market Value External Fund Station and Unit December 31 1998 1991 Hope Creek Unit No. 1 $158,977 Salem Unit No. 1 $113,548 Salem Unit No. 2 $88,805 Peach Bottom Unit No. 2 $92,276 Peach Bottom Unit No. 3 $88,074 Compliance/(Non-Compliance) of NRC Funding Requirements in Year 1998 (OOO's) less: Annual NRC Requirements in Years -1W3. 1995. illfil2. $fil!Zl U1.2B2.

!U.Q.Zfil llW.§2, llQ.1.a§ . ' , < LR-N99155 Appendix B Prepayment Balance at lfill-6. 1WZ 1W6. December 31 1998 m..m Sil22 -$M.2fil! :i.12.rn ll(l..§Z !UQ.Ifil fil28.6.