ML010470183

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SECY-01-0049-Attachment 4-Draft Regulatory Guide DG-1106
ML010470183
Person / Time
Issue date: 03/23/2001
From:
Office of Nuclear Regulatory Research
To:
Richter B, NRC/NRR/DRIP/RGEB, 415-1978
References
DG-1106, SECY-01-0049 RG-1.159
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Thisregulatoryguideisbeingissuedindraftformtoinvolvethepublicintheearlystagesofthedevelopmentofaregulatorypositioninthisarea.It hasnotreceivedcompletestaffrevieworapprovalanddoesnotrepresentanofficialNRCstaffposition.Publiccommentsarebeingsolicitedonthisdraftguide(includinganyimplementationschedule)anditsassociatedregulatoryanalysisorvalue/impactstatement.Commentsshouldbeaccompaniedbyappropriatesupportingdata.WrittencommentsmaybesubmittedtotheRulesandDirectives Branch,OfficeofAdministration,U.S.NuclearRegulatoryCommission,Washington,DC20555-0001.Commentsmaybesubmittedelectronicallyor downloadedthroughtheNRC'sinteractivewebsiteat<WWW.NRC.GOV>throughRulemaking.CopiesofcommentsreceivedmaybeexaminedattheNRCPublicDocumentRoom,11555RockvillePike,Rockville,MD.CommentswillbemosthelpfulifreceivedbyRequestsforsinglecopiesofdraftoractiveregulatoryguides(whichmaybereproduced)orforplacementonanautomaticdistributionlistforsinglecopiesoffuturedraftguidesinspecificdivisionsshouldbemadetotheU.S.NuclearRegulatoryCommission,Washington,DC20555, Attention:ReproductionandDistributionServicesSection,orbyfaxto(301)415-2289;orbyemailtoDISTRIBUTION@NRC.GOV.ElectroniccopiesofthisdraftguideareavailablethroughNRC'sinteractivewebsite(seeabove),ontheNRC'swebsite<www.nrc.gov>intheReferenceLibraryunderRegulatoryGuides,andinNRC'sPublicElectronicReadingRoomatthesamewebsite.U.S.NUCLEARREGULATORYCOMMISSIONFebruary2001OFFICEOFNUCLEARREGULATORYRESEARCHDivision1DraftDG-1106DRAFTREGULATORYGUIDEContact:B.J.Richter(301)415-197802/14/01DRAFTREGULATORYGUIDEDG-1106(ProposedRevision1ofRegulatoryGuide1.159)ASSURINGTHEAVAILABILITYOFFUNDSFORDECOMMISSIONINGNUCLEARREACTORSPREPUBLICATION

ÿTABLEOFCONTENTSPageA.INTRODUCTIONB.DISCUSSION1.AmountofFundsforDecommissioning2.MethodsofFinancialAssuranceC.REGULATORYPOSITION1.AmountofFundsforDecommissioning1.1FundingRequirementsfortheDecommissioningReport/InitialAmountsToBeSetAside1.2AdjustmentstoCertificationAmountsorSite-SpecificEstimates1.3DecommissioningCostEstimates1.4BasisforDecommissioningCostEstimates1.5AdjustmentstoCostEstimates2.MethodsofFinancialAssurance2.1GuidanceApplicabletoAllMethodsofFinancialAssurance2.2PrepaymentandExternalSinkingFund2.3GuaranteeMethods 2.4StandbyTrust 2.5GovernmentalStatementofIntent 2.6ProposedDecommissioningPlans 2.7ProceduresforShutdownReactorsD.IMPLEMENTATIONReferencesAppendixA--GlossaryofFinancialTermsAppendixB--ExamplesofFinancialAssuranceInstrumentsB.1SampleEscrowAgreementB-2B.1.1SpecimenCertificateofEventsB-7B.1.2SpecimenCertificateofResolutionB-8B.2SampleCertificatesofDepositB-9B.2.1SampleNegotiableCertificateofDepositB-9 B.2.2SampleNonnegotiableCertificateofDepositB-10B.3SampleTrustFundandStandbyTrustAgreementsB-11B.3.1SampleTrustFundAgreementB-11B.3.2SampleStandbyTrustAgreementB-17 B.3.3SampleofAcknowledgmentB-20B.4SamplePaymentSuretyBondB-21 B.5SampleIrrevocableStandbyLetterofCreditB-24 B.6SampleDocumentsRecommendedtoSupportCorporateGuaranteeB-26B.6.1SampleLetterfromChiefFinancialOfficerB-26B.6.2FinancialTest:AlternativeIB-27B.6.3FinancialTest:AlternativeIIB-28B.6.4SampleofAuditor'sSpecialReportbyCertifiedPublicAccountantB-29 B.6.5SampleParentCompanyGuaranteeB-31Value/ImpactStatementV/I-1 1A.INTRODUCTIONThegeneralrequirementsforapplicationsforlicenseterminationanddecommissioningnuclearpower,research,andtestreactorsarecontainedin10CFR Part50,"DomesticLicensingofProductionandUtilizationFacilities."OnJune27,1988, theCommissionpublishedamendmentsto10CFRPart50(53FR24018)concerning specificcriteriafordecommissioningnuclearfacilities.Subsequentamendmentstothese requirementshavebeenpromulgated,mostrecentlyonSeptember22,1998(63FR 50465).Amended10CFR50.33(k),50.75,and50.82(b)requireoperatinglicenseapplicantsandexistinglicenseestosubmitinformationonhowreasonableassurancewill beprovidedthatfundsareavailabletodecommissionthefacility.Amended10CFR 50.75establishesrequirementsforindicatinghowthisassurancewillbeprovided,namely theamountoffundsthatmustbeprovided,includingupdates,andthemethodstobe usedforassuringfunds.ThisregulatoryguidewasdevelopedinconjunctionwiththeruleamendmentsandwasoriginallypublishedforpubliccommentinMay1989andininitialeffectiveformin August1990.Itspurposeistoprovideguidancetoapplicantsandlicenseesofnuclear power,research,andtestreactorsconcerningmethodsacceptabletotheNRCstafffor complyingwithrequirementsintheamendedruleregardingtheamountoffundsfor decommissioning.Italsoprovidesguidanceonthecontentandformofthefinancial assurancemechanismsindicatedintheruleamendments.Asaguidancedocument,thisregulatoryguideanditsprovisionsarenotdesignedtoberestrictiveortorepresentbindingrequirements.Theguidepresentsmethods acceptabletotheNRCstaffforcomplyingwiththedecommissioningregulations.The NRCstaffrecognizesthatincertaincircumstances(e.g.,tomeetrequirements establishedbyFederalorStateeconomicregulatoryagenciesortocomplywithother applicablelaws)otherapproachesmaybenecessary.Theinformationcollectionscontainedinthisdraftregulatoryguidearecoveredbytherequirementsof10CFRPart50,whichwereapprovedbytheOfficeofManagementandBudget, approvalnumber3150-0011.Ifameansusedtoimposeaninformationcollectiondoesnot displayacurrentlyvalidOMBcontrolnumber,theNRCmaynotconductorsponsor,anda personisnotrequiredtorespondto,theinformationcollection.B.DISCUSSIONDecommissioningmeanstosafelyremoveafacilityorsitefromserviceandtoreduceresidualradioactivitytoalevelthatpermitsreleaseofthepropertyforunrestricted useandterminationofthelicense,orreleaseofthepropertyunderrestrictedconditions andterminationofthelicense.Asusedinthiscontext,"facility"referstothe contaminatedcomponents(ornon-contaminatedcomponentsrequiredtobedismantled toobtainaccesstocontaminatedcomponents)ofthesite,buildingsandcontents,and equipmentassociatedwithallNRC-licensedactivitieswithinthescopeof10CFR50.75.

2Therearethreeprimarymethodsofdecommissioningnuclearreactors.DECONisthemethodinwhichtheequipment,structures,andportionsofafacilityandsitecontainingradioactivecontaminantsareremovedordecontaminatedtoalevel thatpermitsthepropertytobereleasedforuseinaccordancewiththeNRC'sdefinitionof decommissioning,shortlyaftercessationofoperations.SAFSTORisthemethodinwhichthenuclearfacilityisplacedandmaintainedinaconditionthatallowsthenuclearfacilitytobesafelystoredandsubsequently decontaminated(deferreddecontamination)tolevelsthatpermitreleaseforusein accordancewiththeNRC'sdefinitionofdecommissioning.ENTOMBisthemethodinwhichradioactivecontaminantsareencasedinastructurallylong-livedmaterial,suchasconcrete.Theentombedstructureis appropriatelymaintained,andcontinuedsurveillanceiscarriedoutuntiltheradioactivity decaystoalevelpermittingreleaseofthepropertyinaccordancewiththeNRC's definitionofdecommissioning.Sothatalackoffundsdoesnotresultindelaysinorimproperconductofdecommissioningthatmayadverselyaffectpublichealthandsafety,therule amendmentsondecommissioningrequirethatapplicantsandlicenseesprovide reasonableassurancethatadequatefundsforperformingdecommissioningwillbe availableattheendofoperation.Toprovidethisassurance,therulerequiresthattwo factorsbeconsidered,namely,theamountoffundsneededfordecommissioningandthe methodusedtoprovidefinancialassurance.AMOUNTOFFUNDSFORDECOMMISSIONINGEstimatingthecorrectamountoffundsneededfordecommissioningisimportanttopreventfundingshortfallsthatcouldadverselyaffectpublichealthandsafety.

Requirementsforestablishingfundingamountsfordecommissioningaresetoutin10 CFR50.33(k),50.75,50.82(a)(4),50.82(a)(8),and50.82(a)(9).Theseinclude:a.Aninitialcertificationamount(or,fornon-powerreactors,asite-specificestimate)establishedattheoperatinglicensestage(forexistinglicensees, byJuly26,1990)(10CFR50.75(b)and50.75(c)(1)).b.Adjustmentstothecertificationamount(orsite-specificestimate)overtheoperatinglifeandstorageperiod,ifany,ofthefacility.Specifically,10CFR 50.75(b)requireseachlicenseetoannuallyadjusttheinitialcertification amountbyuseoftheequationin10CFR50.75(c)(2),whichprovidesfor escalationfactorsforlabor,energy,andwasteburial;inaddition,10CFR 50.75(f)requireseachlicenseetosubmit,about5yearspriortothe projectedendofoperation,apreliminarydecommissioningcostestimate thatincludesanup-to-dateassessmentofthemajorfactorsthatcouldaffect thecosttodecommission.

3c.Apost-shutdowndecommissioningactivitiesreport(PSDAR)tobesubmittedbythelicenseetotheNRC,andacopytotheaffectedStates.

Thismustbedonepriortoorwithin2yearsfollowingpermanentcessation ofoperations.ThePSDARmustincludeadescriptionoftheplanned decommissioningactivitiesalongwithaschedulefortheiraccomplishment, anestimateofexpectedcosts,andadiscussionthatprovidesthereasons forconcludingthattheenvironmentalimpactsassociatedwithsite-specific decommissioningactivitieswillbeboundedbyappropriatepreviouslyissued environmentalimpactstatements.(10CFR50.82(a)(4)).d.Asite-specificdecommissioningcostestimatemustbesubmittedtotheNRCpriortothelicenseeusinganyfundsinexcessofamountsdescribed in10CFR50.82(a)(8)(ii).Also,suchacostestimateisrequiredtobe submittedwithin2yearsfollowingpermanentcessationofoperations,ifnot alreadysubmitted.(10CFR50.82(a)(8)).e.Alicenseeisrequiredby10CFR50.82(a)(9)(ii)(F)toprovide"[a]nupdatedsite-specificestimateofremainingdecommissioningcosts..."aspartofa licenseterminationplan(LTP).Inaddition,10CFR50.82(a)(9)(i)requires thatalicenseemustsubmititsLTPatleast2yearsbeforethedateof terminationofthelicense.Asindicatedin10CFR50.75(b),eachpowerreactorapplicantandlicenseeistoprovidecertificationoffinancialassurance.Thespecificinformationnotedinbthroughe abovemustalsobeprovidedattheappropriatetime.Thecertificationamountsin10 CFR50.75(c)(1)actasthresholdreviewlevels.Whilenotnecessarilyrepresentingthe actualcostofdecommissioningforspecificreactors,thesecertificationamountsprovide assurancethatlicenseesareabletodemonstrateadequatefinancialresponsibilityinthat thebulkofthefundsnecessaryforasafedecommissioningarebeingconsideredand plannedforearlyinfacilitylife,thusprovidingadequateassurancethatthefacilitywould notbecomearisktopublichealthandsafetywhenitisdecommissioned.Toestimate increasesinthecostofdecommissioningovertheoperatinglifeofthefacility,10CFR 50.75(c)(2)containsaformulatoaccountforinflationthathasoccurredinthelabor, energy,andwasteburialcomponentsofdecommissioningcosts.Asindicatedin10CFR50.75(d),eachnon-powerreactorapplicantandlicenseeistosubmitacostestimatefordecommissioningitsfacility.Forthepurposesofthis guidance,non-powerreactorapplicantsandlicenseesarelicenseapplicantsforor licenseesoftestandresearchreactorswhoseprimarypurposeisnottoproduce electricity.Thisinitialcostestimateisnotanexactaccountingoftheactualcostof decommissioningbutisintendedtoprovideandapproximationofwhatdecommissioning thereactorwillcostattheproposedtimeofdecommissioning.Thisestimatemaybe basedoninformationfromtheliterature(e.g.,genericstudies,licenseemodels, experience).PacificNorthwestNationalLaboratoryhasmadeadetailedcostestimateof theconceptualdecommissioningforresearchandtestreactors(Ref.1)thatcanbeused asabasis,forregulatorypurposes,fordevelopingestimatesofthecostsof decommissioning.

4Useofthecertificationapproachisafirststepinprovidingreasonableassuranceofdecommissioningfunds.Thesecondstepisthat,fiveyearspriortotheexpectedend ofoperations,licenseesarerequiredtosubmit(orfornon-powerreactors,toupdate)a preliminarydecommissioningcostestimatethatincludesanup-to-dateassessmentofthe majorfactorsthatcouldaffectthecosttodecommissionandtheplansforadjustinglevels offunds.Inaccordancewith10CFR50.82(c),forlicenseesthatshutdowntheirreactors prematurely,thecollectionperiodforanyshortfalloffundswillbedeterminedonacase-by-casebasisuponapplicationbythelicensee,takingintoaccountthespecificfinancial situationofeachlicensee.Asrequiredby10CFR50.75(f),thisestimatedamountof decommissioningfundsistobebasedonathen-currentassessmentofmajorfactorsthat couldaffectdecommissioningcostandistoincluderelevant,up-to-dateinformation.The thirdstepisalicenseeevaluationofspecificdecommissioningprovisionsclosetothe commencementofdecommissioning.(Pursuantto10CFR50.82(a),licenseesmustalso submitalicenseterminationplanatleast2yearsbeforetheexpecteddateoftermination ofthelicense.)Together,thesestepsprovidereasonableassurancethattheNRC's objectivewillbemet--namely,atthetimeofpermanentendofoperations,sufficientfunds areavailabletodecommissionthereactorinamannerthatprotectspublichealthand safety.METHODSOFFINANCIALASSURANCENRCrulesin10CFR50.75specifythegeneralrequirementsformethodsthatareconsideredacceptableforprovidingreasonableassuranceoftheavailabilityoffundsfor decommissioningnuclearreactors.Thesemethodsandhowtheyareevaluatedare discussedindetailinthesupplementaryinformationtotheNRCrulemakingactionthat establishedtherequirements("GeneralRequirementsforDecommissioningNuclear Facilities"(53FR24018,June27,1988;61FR39301,July29,1996;and62FR39091, July21,1997);andtheactionthatrecentlyamendedtherequirements("Financial AssuranceRequirementsforDecommissioningNuclearPowerReactors:FinalRule"(63 FR50465,September22,1998)),inanNRCstaffreport(Ref.2),andintheGeneric EnvironmentalImpactStatementonDecommissioningNuclearFacilities(Ref.3).These documentspresentarationalefortheacceptabilityofmethodsforprovidingfinancial assurance.TheSupplementaryInformationaccompanyingthefinaldecommissioning ruleindicatesthat,althoughsomemethodsforprovidingfundingassurancenowmaynot beavailable,theyareallowedintheeventthattheybecomeavailable.Thisguide addressesthemorefeasiblealternativesingreaterdetail.Licenseesare,ofcourse,free touseanyacceptablemethodasitbecomesavailable.Section50.75indicatesthatthefollowingmethodsareacceptableforreactors(aglossaryofthesetermsisprovidedinAppendixA).

ÿPrepayment-Thedepositprecedingthestartofoperationintoanaccountsegregatedfromthelicensee'sassetsandoutsidethelicensee'sadministrativecontrolofcashorliquidassetssuchthattheamountoffunds wouldbesufficienttopaydecommissioningcosts.Prepaymentcanbein theformofatrust,escrowaccount,orgovernment-heldfundusing certificatesofdeposit,depositsofgovernmentsecurities,orotherliquid investments.

5ÿExternalSinkingFund-Afundestablishedandmaintainedinanaccountsegregatedfromthelicensee'sassetsandoutsidethelicensee'sadministrativecontrol.Thefundmaybeintheformofaccountsor investmentsacceptabletotheNRC,similartothosedescribedabovefor prepaymentbutwhicharecollectedovertheremainingoperatinglifeofthe reactoror,inthecaseofapermanentlyshutdownpowerreactor,overa periodtobedeterminedbythelicenseeandsubjecttoNRCapproval.

ÿGuaranteeMethod-canbeintheformofsuretybonds,lettersofcredit,orinsurance;fornon-electric-utilityapplicantsandlicensees,parentcompanyguaranteesmaybeusedwhenafinancialtestspecifiedinAppendixAto 10CFRPart30isused.

ÿStatementofIntentbyagovernmentagency,ifapplicable,indicatesthatfundsfordecommissioningwillbeobtainedwhennecessary.Tosimplifythepreparation,submittal,andreviewofinformationonfundingmethodsacceptableforitsnon-reactorlicensees,theNRChaspreparedRegulatory Guide3.66,"StandardFormatandContentofFinancialAssuranceMechanismsRequired forDecommissioningUnder10CFRParts30,40,70,and72"(Ref.4).Thisdocument containsrecommendedwordingforfinancialassuranceinstruments.Theinstrumentsin RegulatoryGuide3.66areincludedinmodifiedforminthisregulatoryguideinAppendix BandarereferencedinRegulatoryPosition2.Becauseofthemoreextensiveeconomic regulationfacedbypowerreactorlicenseesasopposedtomaterialslicensees,the samplewordingisprovidedforillustrationandisnotnecessarilyrecommendedforuseby anyindividuallicensee.C.REGULATORYPOSITIONThissectiondescribesmethodsofimplementingthegeneralrequirementsforfinancialassurancefordecommissioningforreactorlicenseesandapplicantswhomust complywith10CFRPart50.RegulatoryPosition1providesguidancetoapplicantsandlicenseesonestablishingtheamountoffundsnecessaryfordecommissioningasrequiredbythe regulations.RegulatoryPosition2providesguidanceonmethodsacceptabletotheNRC forassuringfunds.1.AMOUNTOFFUNDSFORDECOMMISSIONING1.1FundingRequirementsfortheDecommissioningReport/InitialAmounts1.1.1PowerReactorApplicantsandLicenseesForpowerreactorapplicantsandlicensees,theinitialcertificationamountoffundsfordecommissioningisbasedontheequationsin10CFR50.75(c)(1)andrepresentsthe minimumfundinglevelthatapplicantandlicenseesmustmeet.

1ThederivationoftheadjustmentfactorsisexplainedingreaterdetailinSections3.1-3.5of"ReportonWasteBurialCharges,"NUREG-1307,Revision9,September2000(Reference5).

6Atitsdiscretion,apowerreactorlicenseemaysubmitacertificationbasedeitherontheformulasprovidedin10CFR.75(c)(1)and(2)or,whenahigherfundinglevelis desired,onafacility-specificcostestimatethatisequaltoorgreaterthanthatcalculated intheformulain10CFR50.75(c)(1)or(2).Afacility-specificcostestimatemayinclude non-NRC-requiredcosts,butsuchcostsshouldbeidentified.Ifsuchacombined submittalisused,licenseesshouldensurethattheNRC-requiredcostestimatefor decommissioningcostsasdefinedin10CFR50.2isequaltoorgreaterthantheamount statedintheformulasin10CFR50.75(c)(1)and(2)asthebasisforjustifyingahigher thanminimumfundinglevel.Forcertificationamountsbelowtheamountstatedinthe formulasin10CFR50.75(c)(1)and(2),licenseesmustsubmitanexemptionrequest containingdetailsasoutlinedinRegulatoryPosition1.4.Thepurposeofthedecommissioningreportrequiredunder10CFR50.33(k)anddescribedin10CFR50.75(b)and(c)istoprovidereasonableassurancethatlicensees haveaviableplantoaccumulatefundsinthecertificationamount,adjustedforinflation, bytheprojectedtimeofpermanentcessationofoperations.Eachlicenseeshouldsubmit astatementindicatingthecertificationamountandinflationadjustmentappropriateforits reactororreactorstogetherwithaphotocopyorconformedcopyoftheinstrumentbeing usedtoprovideassuranceofdecommissioningfunding.Ifanexternalsinkingfundis beingused,theproposedamountofannual(ormorefrequent)paymentsshouldbe provided.1.1.2Non-PowerReactorApplicantsandLicenseesFornon-power-reactorapplicantsandlicensees,theamountoffundsistobebasedonacostestimatefordecommissioningthefacilityandsubmittedtotheNRCina reportrequiredby10CFR50.33(k).Thecostestimatefordecommissioningneednotbe anexactaccountingoftheactualcostofdecommissioning,butratheranestimateofthe costsfordecommissioningthereactor.ThePNLstudies(Ref.1)maybeusedby applicantsorlicenseesforinitialcostestimateswithsuitableadjustmentstoaccountfor thefacility-specificdifferencesasdiscussedinRegulatoryPosition1.4.2.Thelevelof detailnecessarytosupportthecostestimateisdiscussedinRegulatoryPosition1.4.1.2AdjustmentstoCertificationAmountsandLicenseesForelectricutilityapplicantsandlicensees,certificationamountsdescribedinRegulatoryPosition1.1aretobeadjustedannuallybasedon10CFR50.75(b)and(c)(2) andshouldbeavailableforNRCinspection,asrequested.Theadjustmentfactorin 10CFR50.75(c)(2)is0.65L+0.13E+0.22B,whereL,E,andBareescalationfactorsfor labor,energy,andwasteburialcostsrespectively.Althoughtheseadjustmentsaretobe madeannually,theyneednotbesubmittedtotheNRC.Reasonablyrecenteditionsof thedocumentscitedbelowshouldbeused.Theadjustmentfactor 1forlabor,L,canbeobtainedfrom"MonthlyLaborReview,"publishedbytheU.S.DepartmentofLabor,BureauofLaborStatistics(BLS).

Specifically,theappropriateregionaldatafromthetable(currentlyTable24)entitled "EmploymentCostIndex,PrivateNonfarmWorkers,byBargainingStatus,Region,and AreaSize,"subtitled"Compensation,"shouldbeused.(Reference5containsinformation 2TheseequationsarederivedfromTable6.3ofNUREG/CR-0130,Addendum4(Reference6),andTable5.3ofNUREG/CR-0672,Addendum3(Reference7),respectively.

7onobtainingthelaboradjustmentfactorsthatareavailableontheWorldWideWeb.)LshouldbeadjustedfromabasevalueinTable24correspondingtotheamountsinthe decommissioningruleamendmentsthatareinJanuary1986dollars.Thebasevaluesof LfromtheBLSdatacorrespondingtoJanuary1986are130.5,127.7,125.0,and130.1 fortheNortheast,South,Midwest,andWestregions,respectively.However,the1999 BLSindexvaluesarebasedonanindexvalueof100inJune1989.TheJune1989base valuesare144.3,143.0,146.3,and144.7forthesamerespectiveregions.The respectivescalingfactorsare1.555,1.441,1.409,and1.449.AvalueofLmaybe calculatedforeachregionbymultiplyingthe1989valuebythescalingfactorandthen dividingbythereference1981value.Forexample,thevalueofLintheNortheastregion is144.3x1.555÷130.5=1.719.ThisvalueofLcouldthenbeusedintheequationin paragraph50.75(c)(2)oftheruleamendmentsfordecommissioninganuclearpowerplant locatedintheNortheastregionoftheU.S.Theadjustmentfactorforenergy,E,canbeobtainedfromthe"ProducerPriceIndexes,"publishedbytheU.S.DepartmentofLabor,BureauofLaborStatistics(BLS).

Specifically,datafromthetable(currentlyTable6)entitled"ProducerPriceIndexesand PercentChangesforCommodityGroupingsandIndividualItems"(PPI)shouldbeused.

Theenergyterm,E,ismadeupoftwocomponents,namelyelectricpower,P,andfueloil, F.Hence,EshouldbeobtainedfromtheBLSdatabyusingthefollowingequations:for thereferencePWR,[0.58P+0.42F],andforthereferenceBWR,[0.54P+0.46F].

2 Pshouldbetakenfromappropriateregionaldataforindustrialpower(Commoditycode 0543inTable6)andFshouldbetakenfromdataforlightfueloils(Commoditycode0573 inTable6).TheseenergyadjustmentfactorscanalsobeobtainedfromBLSdatabases madeavailableontheWorldWideWeb(SeeReference5,AppendixCforfurther information).AsdiscussedforLintheprecedingparagraph,PandFshouldbeadjusted fromabasevalueintheBLStablecorrespondingtotheamounts,asspecifiedin10CFR 50.75(c)(1),thatareinJanuary1986dollars.ThebasevaluesofPandFfromtheBLS datacorrespondingtoJanuary1986are114.2and82.0respectively.NoregionalBLS dataforthesePPIcommoditycodesarecurrentlyavailable.AllPPIvaluesarebasedon avalueof100fortheyear1982(Base1982=100).Thus,thevalueofPandFfor December1999are126.5÷114.2=1.108andthevalueofFis72.9÷82.0=0.889; thereforethevalueofEinthiscasefortheequationin10CFR50.75(c)forthereference PWRis[0.58x1.108+0.42x0.889]=1.016.Theescalationfactorforwasteburial,B,canbetakendirectlyfromdataontheappropriatewasteburiallocationinTable2.1ofNUREG-1307,"ReportonWasteBurial Charges"(Ref.5).ThebasevalueofBforJanuary1986is1.0.Thiscorrespondstothe valueusedinthecalculationofthewasteburialcostfordecommissioningin10CFR 50.75(c)andreflectsthebasecostforwasteburialattheWashingtonsite.Forexample, thevalueofBinJanuary2000fortheWashingtonburialsiteforaPWRis2.223÷1.0=

2.223.Similarly,forSouthCarolinathevaluesforaPWRinJanuary2000(Atlantic Compact)is17.922÷1.0.ThesevaluesforBcouldthenbeusedintheequationin10 CFR50.75(c)(2).Becausethisformuladoesnotprovideforestimatesoffutureinflationbutonlyofinflationthathasalreadyoccurred,licenseesshouldrecalculatethecertificationamount eachyearusingthepreviousyear'sdataasdescribedin10CFR50.75(c)(2).This 8recalculationisforcertificationpurposesonlyanddoesnotaffectestimatedfutureinflationthatalicenseemaycalculatetoestablishamortizationorcollectionschedulesfor rate-makingpurposes.Fornon-electric-utilityapplicantsandlicenseeswhohavepreparedadecommissioningcostestimate,adjustmentstothecostestimateshouldalsobeprepared annuallybutneednotbesubmittedtotheNRCstaff(seeRegulatoryPosition1.5).

However,updatedcalculationsbasedontheformulasin10CFR50.75(c)oronsite-specificestimatesaretobesubmittedevery2yearsaspartofthebiennialreportrequired in10CFR50.75(f)(1).1.3DecommissioningCostEstimatesFivedecommissioningcostestimatesarerequiredtobedevelopedandsubmittedforNRCreview:*Aninitialestimateisrequiredthatmaybecalculatedaccordingto10CFR50.75(c)ortheestimatemaybesite-specificandatleastequaltothedecommissioningcost from10CFR50.75(c).*Preliminarydecommissioningcostestimateatorabout5yearsbeforetheprojectedendofoperationsinaccordancewith10CFR50.75(f)(2).*EstimateofexpectedcostscontainedinthePost-ShutdownDecommissioningActivitiesReport(PSDAR)inaccordancewith10CFR50.82(a)(4)(i).*Site-specificdecommissioningcostestimatewithin2yearsfollowingpermanentcessationofoperationsinaccordancewith10CFR50.82(a)(8)(iii).*Updatedsite-specificestimateofremainingdecommissioningcostscontainedintheLicenseTerminationPlan(LTP)inaccordancewith10CFR50.82(a)(9)(ii)(F).GuidancethatisacceptabletotheNRCstaffisbeingdevelopedtoprovidedetailsoncontentandformatforthereportingofthesecostestimates.DraftRegulatoryGuide DG-1085,"StandardFormatandContentofDecommissioningCostEstimatesforNuclear PowerReactors,"isexpectedtobeissuedshortly.Ingeneral,decommissioningcostestimatesareprovidedbymajoractivityandmajordecommissioningphaseortimeperiod.Thecostestimatemustaccountforthe entiredecommissioningworkscope,butnotforitemsthatareoutsidethescopeofthe decommissioningprocess,suchasthemaintenanceandstorageofspentfuelinthe spentfuelpool,thedesignorconstructionofspentfueldrystoragefacilities,orother activitiesnotdirectlyrelatedtothelong-termstorage,radiologicaldecontaminationand dismantlement(D&D)ofthefacility,orradiologicaldecontaminationofthesite.Ifnon-decommissioningcostitemsareincluded,theseitemsshouldbeidentifiedseparately.Costestimatesshouldprovidecostsforeachofthefollowing(orsimilar)majoractivitiesandphaseswithalevelofdetailappropriatetothetypeofcostestimate.

9*Majorradioactivecomponentremoval-Reactorvesselandinternals,steamgenerators,pressurizers,largeborereactorcoolantsystempiping,andotherlarge componentsthatareradioactivetoacomparabledegree.*RadiologicalD&D-Removalofremainingradioactiveplantsystems,includingradiologicaldecontamination.*Managementandsupport(undistributedcosts)-Laborcostsofutilitysupportstaffanddecommissioningcontractorstaff,energycosts,regulatorycosts,small tools,insurance,etc.*Wastepackaging/shipping-Placingwasteinpackagesandshippingtowastevendorsorburialsite.*Wasteburialorwastevendor-Wasteburialcharges,includingwastevendors'processingfees.*Contingency-Allowanceforunexpectedcosts.Costestimatesshouldalsoincludetheassumptions,references,andbasesforunitcostsusedindevelopingtheestimates,aswellasadescriptionofhowinflationis accountedforinthecostestimate.Thecostestimateshouldbeprovidedincurrent-year dollars.Escalationofthewastedispositioncostsareconsideredseparatelyfromthe generalinflationrateapplicabhletolabor,material,andenergycosts.Escalationfactors arediscussedinRegulatoryPosition1.2.1.4AdjustmentstoCostEstimatesInordertomaintainadequatefundsuntilcompletionofdecommissioning,fundingprovisionsshouldcontainproceduresforperiodicreviewandadjustmentoftheinitial estimateandsubsequentamountssetaside,duringbothoperationandanystorage periods,basedonthefollowing.1.4.1InflationTheeffectofinflationontheestimatedcostshouldbedetermined.Forthoselicenseessubjecttothecertificationrequirementsof10CFR50.75(b),thecertification amountshouldbeadjustedannuallyusingtheformulain10CFR50.75(c)(2)(see RegulatoryPosition1.2).Forlicenseesusingsite-specificcostestimates(i.e.,research andtestreactorlicensees,powerreactorlicenseesnotcoveredby10CFR50.75(c),or licenseessubmittingpreliminaryorproposeddecommissioningplanspursuantto10CFR 50.75(f)and50.82(a)),newcostestimatestudiesshouldbeconductedperiodicallyto determinewhethertheestimatereflectscostchangesfrominflationorotherfactors.As analternativetoperformingnewsite-specificcostestimates,licenseesmayusestandard measuresofpriceindexingsuchastheannualConsumerPriceIndexpublishedbythe U.S.DepartmentofLabor,BureauofLaborStatistics,ortheinflationfactorderivedfrom theImplicitPriceDeflatorfortheGrossNationalProductaspublishedinthe"Surveyof CurrentBusiness"bytheU.S.DepartmentofCommerceorin"EconomicIndicators"by theCouncilofEconomicAdvisors.Thelicenseemayalsousethefactorsindicatedin RegulatoryPosition1.2forescalatingtheprincipalcomponentsofthecostestimate.

Estimatesoffutureinflationshouldbearareasonablerelationshiptorecent(i.e.,within10 years)economicperformanceorotherrelevanteconomicconditionsandfactors.The 10licenseeshoulddocumentthebasesforallestimatesofpastandfutureinflation.1.4.2TechnologicalandStatusChangesForplant-specificdecommissioningcostestimates,theeffectoftechnologicalchangesorchangesinplantstatus(e.g.,whethertheplanthasbeenshutdownforan extendedperiod)onthecostestimateshouldbedetermined.Thiscouldinclude reasonablydeterminedrecentdevelopmentsindecontamination,wasteprocessingand disposal,orcutting-equipmentandothertechnology,updatedinformationaboutthefacility conditionssuchaslargerlevelsofcontaminationthananticipated,updatedwaste disposalconditions,updatedresidualradioactivitylimits,andexperiencegainedfrom actuallydecommissioningsimilarfacilities.1.4.3FrequencyofAdjustmentAdjustmenttothecertificationamountandsite-specificcostestimatesshouldbemadeatleastonceayearfortheeffectsdescribedinRegulatoryPosition1.5.1.

Adjustmenttosite-specificcostestimatesfortheeffectsdescribedinRegulatoryPosition 1.5.2shouldbemadeaccordingtotheamountofchangeexperienced,asappropriate, butatleastonceevery5years.Adjustmentstofundinglevelstoaccountforadjustments tothecertificationamountorsite-specificcostestimatesareaddressedinRegulatory Position2.2.5.2.METHODSOFFINANCIALASSURANCEMethodsthatareconsideredacceptableforreactorsforassuringtheavailabilityoffundsfordecommissioningarein10CFR50.75.Thefollowingsectionsprovidespecific guidancetolicenseesforcomplyingwiththevarioustypesofmethodsspecifiedin10 CFR50.75.2.1GuidanceApplicabletoAllMethodsofFinancialAssurance2.1.1Ifmorethanonelicenseeownsafacility,themethodshouldprovideclearindicationofthefundingprovisionsmadebyeachlicenseeoragentactingforalicensee.Multiplelicenseesmay,attheirdiscretion,pooldecommissioningfundsforajointly-owned facilityorfacilitiesaslongasthecontributionofeachlicenseeandeachfacilityare separatelyidentifiablewithinthemethodsbeingused.Decommissioningfundingplans maybesubmittedeitherjointlyorseparatelybyco-licensees.However,eachlicensee shouldensuretheaccuracyofitsproratashareofthetotalNRC-requiredamountbeing certifiedplusperiodicadjustments.2.1.2Theapplicantorlicenseeshouldindicatethatthemethodusedprovides,orwillprovideattheprojectedcessationofoperations,anamountatleastequaltotheestimatedorcertifieddecommissioningcostforthefacility.Ifalicenseeusesa combinationofdifferentmethodsforassuringdecommissioningfunds,thecombinedtotal ofthemethodsbeingusedshouldequalthecertificationamount,plusadjustments projectedtobeneeded.Atitsdiscretion,alicenseemayuseanassurancemethodto providefundsfortheadjustedcertificationamountplusnon-NRC-required decommissioningcosts.2.1.3Theapplicantorlicenseeshouldprovideevidencethatthepartiessigningthefinancialinstrument(fortheapplicantorlicensee)areauthorizedtorepresenttheorganizationinthetransaction.

112.1.4Theapplicantorlicenseeshouldprovideevidencethatthefinancialinstrumentiseitheraconformedcopyorphotocopyoftheoriginalinstrument.2.1.5Eachofthemethodsoffinancialassuranceshouldbecapableofbeingadjustedtotakeintoaccountvariationsinearningsandadjustmentsintheamountoffundsbeingsetasidefordecommissioningbothduringoperationandduringstorage periods,ifany(seeRegulatoryPosition1.5).Adjustmentstotheannualamountoffunds beingsetasidemaybemadetocoincidewithratecasesconsideredbyalicensee's publicutilitycommission(PUC)orbytheFederalEnergyRegulatoryCommission (FERC).Adjustmentsalsomaybemadetoreflectthescheduleof"rulingamounts" establishedbytheInternalRevenueServiceunderSection468AoftheInternalRevenue CodeforaqualifiedNuclearDecommissioningReserveFund.However,thesumofthe adjustedrulingamountinaqualifiedaccountplusthetargetamountinanon-qualified accountshouldatleastequaltheamountindicatedin10CFR50.75(c).Ineverycase, adjustmentstotheamountoffundssetasideshouldbemadeatleastonceeveryyearfor licenseesthatarenolongerrate-regulatedordonothaveaccesstoanon-bypassable charge,andatleastonceevery5yearsforlicenseesthatarerate-regulated(see RegulatoryPosition1.5).2.1.6Thelicenseeshouldmaintaincontinuityinthefundingmethodasfollows:2.1.6.1.Ifthelicenseedecidestochangethefundingmethodduringthelifeofthefacilityorduringthestorageperiod,thelicenseeshouldnotifytheDirector,OfficeofNuclearReactorRegulation,ortheDirector,OfficeofNuclearMaterialSafetyand Safeguards,asapplicable,ofthischangeatleast30workingdaysinadvanceofits effectivedate.Significantmodificationstoafundingmethodshouldalsobesubmittedto theDirector,OfficeofNuclearReactorRegulation,ortheDirector,OfficeofNuclear MaterialsSafetyandSafeguards,asappropriate,atleast30workingdayspriortothe proposedeffectivedateoftheamendment,providingthetextoftheamendmentanda statementofthereasonfortheproposedamendment.2.1.6.2.Ifownershiporoperatingresponsibilityofafacilityistransferred,theexistingfinancialassurancemethodistobemaintaineduntilsuchtransferisapprovedbytheNRCpursuantto10CFR50.80andthetransferhasbeeneffected.(Sale-leaseback agreementsdonotrequireneworamendedfinancialassurancemechanismsunlessso providedbysuchagreements.)2.1.6.3.AnacceptableassurancemethodistobemaintaineduntilthePart50licenseisterminated.2.2PrepaymentandExternalSinkingFundThesefundingmethodsshouldhavethefollowingcharacteristics.2.2.1.Anapplicantorlicenseeusingatrustagreement,escrowaccount,orcertificateofdeposittosatisfy10CFR50.75(c)mayusethesamplewordingforthosemethodscontainedinAppendicesB.1,B.2,andB.3ofthisguide.Thesesampleforms havebeenprovidedforgeneralguidance.Specificprovisionsmaynotbeapplicableto particularlicenseesandmaybemodifiedasalicensee'sspecificsituationwarrants.NRC expectsthatallprepaymentorexternalsinkingfundmechanismswill,ataminimum, satisfythefollowingconditions:(a)TheinstrumentwillmeettherequirementsofState 12lawforthatinstrument,(b)itwillprovideforthesegregationofdecommissioningfundsfromthelicensee'sotherassets,(c)itwillensurethatthefundsareoutsidethe administrativecontrolofthelicensee,(d)itwillensurethatspecialcareistakento safeguardthefundsfrominvestmentrisks,(e)itwillensurethatadequateinformation concerningthefundsisprovidedtoNRC,and(f)itwillprovidesafeguardsagainst improperpaymentsfromthefunds.Theconditionstipulatedin10CFR50.75(e)(1)(ii)thatanexternalsinkingfundbe"segregatedfromlicenseeassets"isintendedtoensurethattheintegrityof decommissioningfundswillbemaintained,especiallywithrespecttoprotectionfrom creditorsinabankruptcysituationandtoensurecontinuityoffundingduringlicense transfers.Acase-by-case"reasonableness"standardwillbeappliedtolicensee compliancewiththisprovision.Keyindiciaofsegregationincludeseparationofthefunds fromtheotherassetsofthelicenseethroughatransfertoanindependentcustodianor managerandseparateaccounting.Thephrase"segregationfromlicenseeassets"does notrequirethatthefundbeplacedinanentity,suchasagrantortrust,thatisestablished asaseparatetax-payingentity.Licenseesshouldbeaware,however,thatsuchatrust willprovidegreaterprotectioninbankruptcythantheescroworcertificateofdeposit.2.2.2Thefollowingkeyprovisionsshouldbeincludedinthetrustinstrument(or,whenrelevant,totheescroworgovernmentfundagreement)toensurethatitisacceptabletoNRC:2.2.2.1.ThetrustagreementshouldstatethepurposeofthetrustandthenuclearfacilitymustbeidentifiedbylicenseorNRCdocketnumber.AnacceptablestatementofpurposeisthestatementrequiredforatrustagreementtoqualifyasaNuclear DecommissioningReserveFundunderSection468AoftheInternalRevenueCode.To qualifyunderSection468A,thetrustagreementshouldstatethatthetrustisestablished fortheexclusivepurposeofprovidingfundsforthedecommissioningofoneormore nuclearplants.2.2.2.2.Thetrustagreementshouldspecifythatthetrustfundisestablishedforthebenefitofthelicenseeofthefacilityand/ortheNRC.Morethanonelicenseemaybeidentified.UnderSection468Aasingletrustagreementmayestablishtwoormore NuclearDecommissioningFundswhenanuclearpowerplantisownedbytwoormore licensees.Similarly,atrustagreementmaycontainbothqualifiedandnon-qualified decommissioningfunds.2.2.2.3.Thetrustagreementshouldspecifytheobligationsofthetrusteewithrespecttoinvestments,asdescribedbelowunderRegulatoryPosition2.2.3.2.2.2.4.Thetrustagreementshouldspecifythecircumstancesunderwhichpaymentswillbemadefromthetrust.ItmustprovidethatnodisbursementsorpaymentsmaybemadefromthetrustbythetrusteeuntilthetrusteehasfirstgiventheNRC30 workingdayswrittennotice,andthatnodisbursementsorpaymentsfromthetrustmay bemadeifthetrusteereceivespriorwrittennoticeofobjectionfromtheDirector,Officeof NuclearReactorRegulation,ortheDirector,OfficeofNuclearMaterialSafetyand Safeguards,asappropriate.(Reasonableadministrativeexpensesandtaxesontrust fundearningsmaybepaidfromthetrustwithoutpriornotificationtotheNRC.)After decommissioninghasbegunandwithdrawalsfromthedecommissioningfundarebeing madepursuantto10CFR50.82(a)(8)(i),nofurthernotificationneedbemadetotheNRC.

13IfthetrustisaqualifiedNuclearDecommissioningFundunderSection468A,itmustprovidethattheassetsinthefundwillbeusedonlyasauthorizedbySection468A andregulationsthereunder.2.2.2.5.Thetrustagreementmustspecifythatamendmentstothetrustmustbeexecutedinwriting,andthattheagreementcannotbeamendedinanymaterialrespectwithout30workingdayspriorwrittennotificationtotheDirector,OfficeofNuclearReactor Regulation,ortheDirector,OfficeofNuclearMaterialSafetyandSafeguards,as appropriate.Anamendmentismaterialifitrevisesanykeyprovisionofthetrust, particularlyincludingtheinvestmentprovisions,termsrelatingtotheprovisionof informationtoNRC,termsrelatingtopaymentsfromthetrust,andtermsrelatingto amendmentstothetrust.Licenseesshouldinterpretthephrase"amendedinany materialrespect"broadly.2.2.3Thetrustagreementshouldspecifythatthetrustee'sobligationswithrespecttoinvestmentsinclude(1)day-to-dayinvestmentmanagementofthefund,guidedbygeneralinvestmentinstructionsthatthetrusteemayreceivefromthelicenseeora licensee'sdesignatedinvestmentmanager,(2)theobligationofthetrusteetoselect investmentsandperformtrustmanagementunderthe"prudentinvestor"rule,and(3)the obligationofthetrusteetoavoidspecificallyprohibitedinvestments,asdescribedbelow.2.2.3.1.Therequirementthatthetrustshouldnotbeunderthe"administrativecontrolofthelicensee"willbemetifday-to-dayinvestmentdecisionsaremadebythetrusteeorinvestmentmanagerandnotbythelicensee.Licenseesmayexercisegeneral managementoversightoftrustfundinvestmentstotheextentallowedunderStatetrust law.TheNRCstaffrecognizesthatlicenseeshavelegitimateinterestsand responsibilitiesinensuringappropriateinvestmentstrategiesforthesefundsand monitoringtheprogressofinvestments.However,licenseesshouldavoidactive day-to-daymanagementofthesefunds.Inthisregard,ifatrusteeisunabletoactasan investmentmanager,useofaprofessionalinvestmentmanagerwillbenecessary.2.2.3.2.Thetrustagreementmustprohibitinvestmentsinsecuritiesorotherobligationsofthelicenseeoranyotherowneroroperatorofthefacilityaswellastheiraffiliates,subsidiaries,successorsorassignees.Anaffiliateisanycompanythat controls,iscontrolledby,orisundercommoncontrolwiththelicenseeoranyother owneroroperatorofthefacility.Asubsidiaryisanycompanythatisownedorcontrolled directlyorindirectlybythelicenseeoranyotherowneroroperatorofthefacility.A successororassigneeisacompanythathasacquiredpossessoryrightstothelicensee, thefacility,oranyotherowneroroperatorofthefacility.2.2.3.3.Thetrustagreementmustprohibitinvestmentsinsecuritiesofotherpowerreactorlicenseesoranyentityowningoroperatingoneormorenuclearpowerplants,exceptforinvestmentstiedtomarketindicesorinvestmentsinnon-nuclear mutualfunds.2.2.3.4.InvestmentsselectedwiththeapprovaloforguidancefromtheStatePUCwithjurisdictionoverthelicenseeorfromFERCwouldbeacceptabletotheNRCstaff.2.2.3.5.LicenseesthatarenotsubjecttoPUCorFERCjurisdictionshouldlimitinvestmentsto"investment-grade"securities,suchasinvestment-gradebondsandpreferredstocks,whicharethoseratedatleast"BBB"orequivalentbyanationalrating 14service.Speculativeissuesofcommonstocks(e.g.,"bulletinboard"stocksontheNASDAQexchange,"pinksheet"stocks,andstocksnottradedonmajorexchanges)and highyield("junk")bondsshouldbeavoided.2.2.4Theescrowaccount,certificateofdeposit,ortrustagreementmustcomplywithapplicablestatelawforsuchinstruments.2.2.5Thefinancialassuranceinstrument,signedbyindividualsauthorizedtoactfortheappropriateparties,shouldbemaintainedinthelicensee'srecordsandbeavailableforinspectionuntilterminationofthePart50license.Iffeasible,recordsor duplicatesshouldbemaintainedonsite.2.2.6ThetrusteeofafundshouldbeanentitythathastheauthoritytoactasatrusteeandwhosetrustoperationsareregulatedorexaminedbyaStateorFederalagencyor,ifagovernmentfundisbeingused,theappropriateStateorFederal governmentagency.Theword"national"inthetitleofafinancialinstitutionsignalsthat theinstitutionisfederallyregulated,asdotheinitials"N.A.,"orthewords"National Association,"or"anationalbankingassociation."The"examinations"departmentofthe appropriatedistrictofficeoftheOfficeoftheComptrolleroftheCurrencycanprovide informationaboutwhethertheinstitutionhastrustpowers.Theword"State"inthetitleof afinancialinstitutionsignalsthattheinstitutionisStateregulated.Theexaminations departmentoftheapplicableStatebankingauthoritycanprovideinformationabout whethertheinstitutionhastrustpowers.Domesticbranchesofforeignbanksmaybe eitherFederallyregulatedorStateregulated.Eligibilityofaninstitutioncanbechecked throughthe"TrustInstitutionsSearch"database,at http://www2.fdic.gov/structur/trust/index.html.2.2.7.Atrustagreementshouldincludeaclauseinwhichthetrusteeacceptstheresponsibilityoftrusteeship.2.2.8.Annualdepositsinanexternalsinkingfund,includingprojectedearnings,shouldattempttoapproximatethetotalamountremainingtobeaccumulated,dividedbytheremainingyearsofthelicense,asdeterminedbytheinitialandupdatedcertification amountspecifiedin10CFR50.75(c)(1)and(2).Arithmeticprecisionisnotrequiredforfundaccumulationrates.If,duringthecourseofcollectingfunds,alicenseehasaccumulatedsignificantlygreater decommissioningfundsthananticipated,itmayreduceitsremainingcontributions commensurately.Likewise,ifalicenseeissignificantlybehindincollections,increased contributionsshouldbeusedtomakeupthedeficit.Areasonabletimemaybeusedto makeupanydeficit,consistentwithgood-faitheffortstoobtainappropriateraterelief.

However,licenseesshouldavoidunduerelianceuponcontributionsweightedinconstant dollarstowardtheendofprojectedfacilityoperatinglife.Additionally,theNRCstaff considersrelianceonanestimatedtaxdeductionfordecommissioningexpensesatthe timesuchexpensesareincurredtobeaformofinternalreserveandthusnotallowed under10CFR50.75(e).IfsufficientratereliefbyaStatePUCorFERCisultimatelynot obtained,licensee'sstockholderswillbeexpectedtocoverdecommissioningcosts throughreducedreturnonequity.Projectedratesofearningsonanexternalsinkingfund duringplantoperationshouldreasonablyapproximatethehistoricalrealrateofearnings (i.e.,afterinflation)obtainedbyagiventypeofinvestment.

15Licenseesandlicenseapplicantswhouseeitherprepaymentoranexternalsinkingfundasamethodforprovidingdecommissioningfundingassuranceareallowed totakea2percentrealrateofreturncredit(i.e.,nominalrateofreturnlessinflation)for futureearningsonthedecommissioningtrustfund.(See10CFR50.75(e)(1)(i)and(ii).)

Duringplantoperation,thiscreditshouldbetakenfortheremainingyearsleftonthe operatinglicense,suchthattheamountoffundswouldbesufficienttopay decommissioningcostsatthetimeterminationofoperationisexpected.Thatis,during plantoperation,the2percentcreditmaynotbetakenforanyperiod,suchasextended safestorage,thatgoesbeyondexpectedterminationofoperationasspecifiedinthe operatinglicense.IflicenserenewalforaplanthasbeenapprovedbytheNRC,the licenseemayusetheextendedlicenseperiodasthebasisforcalculatingtheremaining amounttobecollected.Asthecostestimatefordecommissioningisadjustedannually pursuantto10CFR50.75(b)(2),theadjustedestimate,lessamountsalready accumulatedandtakingintoaccountthe2percentcredit,shouldformthebasisoffuture collections,fundsalreadyaccumulated,plusprojectedfuturetrustfundcontributions,plus futureprojectedearningsattheallowed2percentrealrate,shouldbesufficienttopay decommissioningcostsatthetimeterminationofoperationisexpected.However, pursuantto10CFR50.75(f)(2),whenalicenseeiswithin5yearsoftheprojectedendof operationsandsubmitsitspreliminarydecommissioningcostestimate,thelicenseemay takethe2percentearningscreditoverastorageperiod,aslongasthestorageperiod anditscostimplicationsfortotaldecommissioningcostarespecificallyaddressedinthe preliminarydecommissioningcostestimate.2.3GuaranteeMethodsGuaranteemethodsincludesuretybonds,lettersofcredit,linesofcredit,andinsurance.Acceptableguaranteemethodsshouldhavethefollowingcharacteristics.2.3.1Anapplicantorlicenseeusingasuretybond,letterofcredit,orparentguaranteemayusethesamplewordingforthesemethodscontainedinAppendicesB.4,B.5,andB.6,respectively.Thesesampleformshavebeenprovidedforillustrative purposes.Specificprovisionsmaynotbeapplicabletoparticularlicenseesandmaybe modifiedasalicensee'sspecificsituationwarrants.However,eachlicenseeshouldbe surethattheinstrumentbeingusedconformstoapplicableStatelaw.2.3.2Thefollowingdocumentsshouldbemaintainedinthelicensee'srecordsandbeavailableforinspectionbytheNRC:

ÿForsuretybonds:Anoriginallysignedduplicateorconformedcopyofthesuretybondsignedbyindividualsauthorizedtoactforthelicenseeandthe suretycompany.

ÿForlettersofcredit,anoriginallysignedduplicateorconformedcopyoftheletterofcreditsignedbyindividualsauthorizedtoactforthelicenseeand thefinancialinstitution.

ÿForinsurance,individualsauthorizedtoactforthelicenseeandtheinsureroraconformedcopyofsuch.

ÿAstandbytrustfundtoreceivefundsifthesurety,letterofcredit,orinsuranceisdrawnupon.

162.3.3Thefollowingshouldbeconsideredforfinancialinstitutionsusedasguarantors:

ÿForsuretybonds:ThesuretycompanymustbelistedbytheU.S.DepartmentoftheTreasuryinthemostrecenteditionofCircular570and haveacoveragelimitsufficienttocoverthecostestimatesforwhich assuranceissought.Circular570ispublishedannuallyaboutJuly1andis updatedintheFederalRegister

.ÿForlettersofcredit:Theissuinginstitutionmustbeanentitythathastheauthoritytoissuealetterofcreditandwhoseletterofcreditoperationsare regulatedandexaminedbyaFederalorStateagency.

ÿForinsurance:TheinsurancecompanymustbelicensedbyStateregulatoryauthoritiestotransactbusinessasaninsurerinoneormore States.2.3.4Iflinesofcreditareused,theapplicantorlicenseeshouldobtainfromthelenderawrittencommitmenttoprovidefundsforalldecommissioningexpendituresrequiredbytherule.2.4StandbyTrust2.4.1Underthedecommissioningregulations,alicenseeorapplicantusingasuretybond,letterofcredit,lineofcredit,orinsurancemustestablisha"standby"trustfundtoreceivefundsfromtheotherfinancialinstruments,ifnecessary.Underthis arrangement,ifalicenseedefaultsondecommissioningrequirements,theissueror provideroftheinstrument(orbeneficiary,ifappropriate)willdrawonthefundsheldinthe instrumentslistedanddepositthemdirectlyintothestandbytrustforuseasrequiredfor decommissioning.Inadditiontotheinstrumentslisted,applicantsorlicenseesusing parentcompanyguarantees,certificatesofdeposit,orgovernmentsecuritiesshould establishastandbytrust.2.4.2AnapplicantorlicenseeestablishingastandbytrustisdirectedtothesamplewordingfortheinstrumentcontainedinAppendixB.3.2.2.4.3Appropriatedocumentationregardingthestandbytrustshouldbemaintainedinthelicensee'srecordsasindicatedinRegulatoryPosition2.2.2.2.5GovernmentalStatementofIntentAgovernmentlicenseeorlicenseapplicantasdesignatedin10CFR50.75(e)cansubmitastatementofintentthatcontainsacostestimatefordecommissioningand indicatesthatfundsfordecommissioningwillbeobtainedwhennecessary.Federal licenseesofpowerreactorsaretheonlygovernmentlicenseesallowedtousea statementofintent.Asdefinedin10CFR50.2,a"federallicenseemeansanyNRC licensee,theobligationsofwhichareguaranteedbyandsupportedbythefullfaithand creditoftheUnitedStatesGovernment."Non-powerreactorlicenseesusingastatement ofintentmaybeFederal,State,orlocalgovernmententities.Thestatementofintent shouldcontainthefollowing:

3Totheextentthatpowerreactorlicenseeshavereceivedrateregulatorapprovaltousemarket-basedratesforasignificantportionoftheirnuclear-relatedrevenues(i.e.,greaterthan20percent),theNRCwillnotconsiderthemto besubjecttotraditionalcost-of-servicerateregulationforthatportionoftheirrates.

17ÿIdentificationofthefacilityorfacilitiesforwhichitprovidesthefinancialassuranceandthecorrespondingdecommissioningcosts.

ÿAnindicationthatfundsfordecommissioningwillberequestedandobtainedsufficientlyinadvanceofdecommissioningtopreventdelayof requiredactivities.

ÿEvidenceoftheauthorityoftheofficialofthegovernmententitytosignthestatementofintent.Asignedcopyofthestatementofintentthatfundswillbeobtainedwhennecessaryshouldbemaintainedinthelicensee'srecordsandbeavailableforinspection.2.6BiennialReports2.6.1Asprovidedin10CFR50.75(f)(1),eachpowerreactorlicenseeisrequiredtoreporttotheNRConacalendaryearbasis,beginningonMarch31,1999,andevery2yearsthereafter,onthestatusofitsdecommissioningfundingforeachreactororshareof areactorthatitowns.Theinformationinthisreportmustinclude,ataminimum,the amountofdecommissioningfundsestimatedtoberequired,pursuantto10CFR50.75(b) and(c),orasite-specificestimate,ifgreaterthantheamountin10CFR50.75(c),as appropriate;theamountaccumulatedtotheendofthecalendaryearprecedingthedate ofthereport;ascheduleoftheannualamountsremainingtobecollected;the assumptionsusedregardingratesofescalationindecommissioningcosts,ratesof earningsondecommissioningfunds,andratesofotherfactorsusedinfunding projections;anycontractsuponwhichthelicenseeisrelyingpursuantto10CFR 50.75(e)(1)(ii)(C);andanymodificationstoalicensee'scurrentmethodofproviding financialassuranceoccurringsincethelastsubmittedreport,includingmaterial modificationstodecommissioningtrustagreements.Anylicenseewhoseplantiswithin5 yearsoftheprojectedendofoperation,orwhenconditionshavechangedsuchthatitwill closewithin5yearsorhasalreadyclosed,isrequiredtosubmitthereportannually.

Licenseesofplantsinvolvedinmergersoracquisitionsarealsorequiredtosubmitthis reportannuallyuntiltheNRChasapprovedthemergeroracquisitionpursuantto10CFR 50.80.Forsuchlicensees,thisreportmaybesubmittedaspartofthelicensee'slicense transferapplication,providedthatitcontainstheinformationdescribedabove.2.6.2Aslongastheinformationdescribedaboveisincludedinthereport,nospecificreportingformatisrequired.Aspartofthereport,licenseesdonotneedtosubmitacompletelistingofallinvestments,althoughtheyshouldindicatebroad categoriesofinvestmentsasapercentofthetotaltrustportfolio(e.g.,equitiesequal20 percentofthetotalvalueofthetrust,FederalGovernmentbondsandnotesequal50 percentofthetotalvalueofthetrust).Additionally,eachlicenseeshouldindicatethe assurancemechanismbeingusedasasourceofrevenuesfortheexternalsinkingfund (e.g.,traditional"cost-of-service"ratemaking,anon-bypassablecharge,long-term contractsthattheNRChasfoundtobeacceptablepursuantto10CFR50.75(e)(1)(v)).

3Iftheassumedrealearningsrateonanexternalsinkingfundexceeds2percent,each licenseeshouldindicatethespecificraterulingordecisionbyitsrateregulatorthat 18documentstheearningsratebeingused,asprovidedin10CFR50.75(e)(1)(I)or(ii).Ifalicenseeisusinganassurancemechanismotherthananexternalsinkingfund,itshould includeadjustmentstotheassurancemechanisms(e.g.,asuretybondorletterofcredit) aspartofthereporttoaccountforanyescalationsincethepreviousreport.2.7LicenseTerminationPlansIn10CFR50.82(a)(9),submittalofalicenseterminationplanisrequiredatthetimealicenseeappliesforterminationofalicense.Theplanistoincludeprovisionsfor funding.Thefollowingshouldbeincluded:

ÿAsitecharacterization;

ÿIdentificationofremainingdismantlementactivities;

ÿPlansforsiteremediation;

ÿDetailedplansforthefinalradiationsurvey;

ÿAdescriptionoftheenduseofthesite,ifrestricted;

ÿAnupdatedsite-specificestimateofremainingdecommissioningcosts;and

ÿAsupplementtotheenvironmentalreport,pursuantto10CFR51.53,describinganynewinformationorsignificantenvironmentalchange associatedwiththelicensee'sproposedterminationactivities.2.8ProceduresforPrematurelyorPreviouslyShutdownReactorsThefundingrequirementsof10CFR50.75and50.82applytoallreactors,includingthosethatwereshutdownpriortotheeffectivedateofthefinalrule(July27, 1988),becausethesereactorspossessaPart50license,albeitmodified.Asindicatedin theSupplementaryInformationtothefinalrule,detailsconcerningfinancialassurance, primarilythetimeperiodforaccumulatingfundsnotsetasideduringoperation,wouldbe decidedonacase-by-casebasis.InafinalrulepublishedJuly9,1992(57FR30383),

thiscase-by-caseapproachwasextendedtolicenseesofallpowerreactorsthatshut downprematurely.Eachlicenseeshouldprovide:2.8.1Informationonhowreasonableassurancewillbeprovidedthatfundswillbeavailabletodecommissionthefacility.2.8.2Informationontheamountoffundsfordecommissioningasrequiredby10CFR50.75(f).Thatis,acostestimatethatincludesprovisionsforadjustingtheestimateshouldbesubmittedbasedonRegulatoryPosition1.2.8.3Informationonthemethodoffinancialassurancetobeusedasrequiredby10CFR50.75(e).Thatis,fundsneededtocompletedecommissioningaretobeplacedinanaccountsegregatedfromlicenseeassetsandoutsidethelicensee'sadministrative control,orasuretymethodorfundstatementofintentshouldbemaintainedbasedon RegulatoryPosition2.

19D.IMPLEMENTATIONThepurposeofthissectionistoprovideinformationtoapplicantsandlicenseesregardingtheNRCstaff'splansforusingthisregulatoryguide.ThisproposedrevisionhasbeenreleasedtoprovideinformationtoapplicantsregardingtheNRCstaff'splansforusingthisregulatoryguide.Exceptinthosecasesin whichanapplicantorlicenseeproposesanacceptablealternativemethodforcomplying withthespecifiedportionsoftheNRC'sregulations,themethodtobedescribedinthe activeguidereflectingpubliccommentswillbeusedtoevaluatecompliancewiththe requirementsof10CFR50.33(k),50.75,and50.82applicabletothefollowingnuclear reactors:(1)AllplantshavinganoperatinglicenseineffectonJuly27,1990,orlater.

(2)AllplantsforwhichanapplicationforanoperatinglicenseissubmittedorunderNRCreviewaftertheJuly27,1988,effectivedateofthefinal decommissioningrule(53FR24018,June27,1988).

1CopiesareavailableatcurrentratesfromtheU.S.GovernmentPrintingOffice,P.O.Box37082,Washington,DC20402-9328(telephone(202)512-1800);orfromtheNationalTechnicalInformationServicebywritingNTISat5285 PortRoyalRoad,Springfield,VA22161;<http://www.ntis.gov/ordernow>;telephone(703)487-4650;.CopiesareavailableforinspectionorcopyingforafeefromtheNRCPublicDocumentRoomat11555RockvillePike, Rockville,MD;thePDR'smailingaddressisUSNRCPDR,Washington,DC20555;telephone(301)415-4737or (800)397-4209;fax(301)415-3548;emailisPDR@NRC.GOV.

2Singlecopiesofregulatoryguides,bothactiveanddraft,anddraftNUREGdocumentsmaybeobtainedfreeofchargebywritingtheReproductionandDistributionServicesSection,OCIO,USNRC,Washington,DC20555-0001, orbyfaxto(301)415-2289,orbyemailto<DISTRIBUTION@NRC.GOV>.Activeguidesmayalsobepurchased fromtheNationalTechnicalInformationServiceonastandingorderbasis.Detailsonthisservicemaybeobtained bywritingNTIS,5285PortRoyalRoad,Springfield,VA22161;telephone(703)487-4650;online

<http://www.ntis.gov/ordernow>.CopiesofactiveanddraftguidesareavailableforinspectionorcopyingforafeefromtheNRCPublicDocumentRoomat2120LStreetNW.,Washington,DC;thePDR'smailingaddressisMail StopLL-6,Washington,DC20555;telephone(202)634-3273or(800)397-4209;fax(202)634-3343;email

<PDR@NRC.GOV>.

20 REFERENCES1.G.J.Konzek,"Technology,Safety,andCostsofDecommissioningReferenceNuclearResearchandTestReactors"(preparedbyPacificNorthwestLaboratory fortheU.S.NuclearRegulatoryCommission),NUREG/CR-1756,March1982,and Addendum1,July1983.

12.RobertS.Wood,"AssuringtheAvailabilityofFundsforDecommissioningNuclearFacilities,"U.S.NuclearRegulatoryCommission,DraftReport,NUREG-0584, Rev.3,March1983.

23.U.S.NuclearRegulatoryCommission,"FinalGenericEnvironmentalImpactStatementonDecommissioningofNuclearFacilities,"NUREG-0586,August

1988.14.U.S.NuclearRegulatoryCommission,"StandardFormatandContentofFinancialAssuranceMechanismsRequiredforDecommissioningUnder10CFRParts30, 40,70,and72,"RegulatoryGuide3.66,June1990.

25.U.S.NuclearRegulatoryCommission,"ReportonWasteBurialCharges,"NUREG-1307,Revision9,September2000.

16.R.I.Smith,G.J.Konzek,andW.E.Kennedy,Jr.,"Technology,Safety,andCostsofDecommissioningaReferencePressurizedWaterReactorPowerStation" (preparedbyPacificNorthwestLaboratoryfortheU.S.NuclearRegulatory Commission),NUREG/CR-0130,June1978;andAddendum1,July1979, Addendum2,July1983;Addendum3,September1984;andAddendum4,July

1988.17.H.D.Oaketal.,"Technology,Safety,andCostsofDecommissioningaReferenceBoilingWaterReactorPowerStation"(preparedbyPacificNorthwestLaboratory fortheU.S.NuclearRegulatoryCommission),NUREG/CR-0672,June1980; Addendum1,July1983;Addendum2,September1984;andAddendum3,July

1988.1 21APPENDIXAGLOSSARYOFFINANCIALTERMSCertificateofDeposit(CD)-Abank'sorotherfinancialinstitution'swrittenacknowledgmentofthereceiptanddepositofasumofmoneybythelicenseeorapplicantanditspromiseofrepayment.WhenusingaCDtodemonstrate financialassurancefordecommissioning,thelicenseedepositswithabankor otherfinancialinstitutionfundssufficienttocoverthecertificationamountor site-specificcostofdecommissioningthelicensedfacilityandreceivesaCD.EscrowAccount-Anaccountcontainingfundsdepositedbythelicenseeorapplicantandheldbyabankorotherfinancialinstitution.Anescrowaccountdiffersfromsimilaraccountsinthatthelicenseeorapplicantprovidesfundsthatareheldby theescrowuntilthehappeningofacontingencyortheperformanceofacondition suchascommencementofdecommissioning,andthenthefundsarereleasedto thegrantororthegrantor'sdesigneeor,ifappropriate,placedinthestandbytrust.ExternalSinkingFund-Afundestablishedandmaintainedbyperiodicallysettingfundsasideinanaccountsegregatedfromlicenseeassetsandoutsidethelicensee'sadministrativecontrol.Thetotalexternalsinkingfundshouldbesufficienttopay decommissioningcostsattheexpectedtimeofterminationofoperation.An externalsinkingfundmaybeintheformofatrust,escrowaccount,government fund,certificateofdeposit,ordepositsofgovernmentorcorporatesecurities.FinancialTest-Anaccountingratiorequirement,networthrequirement,bondratingrequirement,orsimilarrequirementorcombinationofrequirementsthatmeasuresthefinancialstrengthofafirmprovidingfinancialassurance.Thefinancialtestis usedbyafirmthatprovidesaguaranteetoalicenseetoshowitsownfinancial strengthanditsabilitytosupporttheguarantee.Thismechanismisunavailableto electricutility(powerreactor)licensees.(SeeAppendixAto10CFRPart30.)Insurance-Insuranceinthiscasewouldbesimilartosuretybondingasdiscussedbelowinthatitwouldguaranteethatdecommissioningcostswillbepaidtoatrusteeshouldthelicenseedefault.LetterofCredit-Abindingagreementbywhichtheissuingparty,suchasabankorotherfinancialinstitution,agreesonbehalfoftheapplicantorlicensee(theaccountparty)topayagovernmentalorgovernment-approvedauthority(thebeneficiary)in theeventofanydefaultbythelicenseeintheperformanceofdecommissioning.LineofCredit-Anarrangementofthelicenseewithalender(abankorotherfinancialinstitution)inwhichthelenderagreestoprovidefundsrequiredfordecommissioningofthelicensee'sfacility.Themaximumamountofcreditstated inthecontractbetweentheapplicantorlicenseeandthelendermustbeatleast sufficienttoequalthecertifiedorestimatedcostofdecommissioning.ParentCompanyGuarantee-Apromisebyoneparty(theguarantor)topayspecifieddebtsorperformspecifiedobligationsofanotherparty(theprincipal)intheeventthattheprincipalfailstosatisfythedebtsorobligations.Specifically,tosatisfythe 22decommissioningregulations,anapplicant'sorlicensee'sparentcorporationguaranteesprovidingspecifieddollaramountstofundperformanceof decommissioningintheeventofthelicensee'sdefault.Aparentcompany guaranteecanonlybeusediftheparentcompanypassesafinancialtest.(See AppendixAto10CFRPart30.)Prepayment-Thedepositpriortothestartofoperation(or,forexistingfacilities,byaspecifiedtimeprovidedintheregulations)intoanaccount,segregatedfromlicenseeassetsandoutsidethelicensee'sadministrativecontrol,ofcashorliquid assetssuchthattheamountoffundsshouldbesufficienttopaydecommissioning costs.Typesofaccountscanbesimilartothosedescribedaboveforanexternal sinkingfund.StandbyTrustFund-Atrustfund(seebelow)setuptoreceivefundsfromasurety,letterofcredit,insurance,orguaranteewhenpaymentismadefromthemtoensurethatthefundsremainavailablefordecommissioning.SuretyBond-Aguaranteethatdecommissioningcostswillbepaidshouldthelicenseedefault.Thesuretybondisacontractthatthelicenseeorapplicant(theprincipal)entersintowithaqualifiedsuretycompany(thesurety)toassuretheCommission orStateregulatoryagencythatthelicenseewillfulfillitsdecommissioning obligations.Intheeventofthelicensee'sdefault,thesuretyguaranteesthat decommissioningcostswillbepaid.TrustFund-Athree-partyagreementwherebythelicenseeorapplicant,calledthegrantorortrustor,transfersassetstoatrustee,suchasabank,otherfinancialinstitution,orgovernmentalauthority,toholdonbehalfofthebeneficiary(e.g.,the CommissionoraStateagency).Theassetsmaybeatleastequaltothecostof decommissioning(prepayment)ormaybuildupovertimesuchthattheamountof fundsshouldbesufficienttopaydecommissioningcosts(externalsinkingfund).

23APPENDIXBEXAMPLESOFFINANCIALASSURANCEINSTRUMENTSThefollowingformatsforfinancialassuranceinstrumentsprovidesamplesoflanguageandprovisionsforcompliancewithfinancialassurancerequirementsfor decommissioning.Althoughthesamplelanguageisnotrequiredbydecommissioning regulations,exceptforcertainprovisionsintheparentguarantee,applicantsand licenseeswillfindthatitsusewillsimplifythesubmittalprocess.Licenseesmayadd, delete,ormodifysampleprovisionsastheircircumstanceswarrant.However,licensees shouldensurethatthefinancialassuranceinstrumentsbeingusedarevalidunder applicableStatelawandcomplywithNRC'sdecommissioningregulationsin10CFR 50.33,50.75,and50.82.

24APPENDIXB-1SAMPLEESCROWAGREEMENTESCROWNUMBER___________Paragraph1.EstablishmentofEscrowAccountItisagreedbetweenthepartiesthat[insertnameoflicensee],licensee,haselectedtoestablishanescrowaccountwith[insertname,address,andpositionofescrowagent]to providefinancialassurancefordecommissioningofthefacility(ies)intheamountsshown below:[Foreachfacilityforwhichfinancialassuranceisprovidedbytheescrowagreement,listfacilityname,address,andlicenseand/ordocketnumber, correspondingestimatedorcertifieddecommissioningcosts,andindicateamount offinancialassuranceprovidedbytheescrowaccount.]Paragraph2.DescriptionofPropertyinEscrowAccountItisherebyacknowledgedbythepartiesthat[listtheassetsthathavebeendeliveredtotheescrowagentandindicatethevalueofeachitem]has(have)beendeliveredto escrowandwillremainintheescrowaccountcreatedbythisagreementuntiloneofthe twoconditionsstatedinParagraph3ofthisagreementhasbeensatisfied.[Insertnameoflicensee]warrantstoandagreeswith[insertnameofescrowagent]that,unlessotherwiseexpresslysetforthinthisAgreement:thereisnosecurityinterestinthe propertyintheescrowaccountoranypartthereof;nofinancingstatementunderthe UniformCommercialCodeisonfileinanyjurisdictionclaimingasecurityinterestinor describing(whetherspecificallyorgenerally)theescrowaccountoranypartthereof;and theescrowagentshallhavenoresponsibilityatanytimetoascertainwhetherornotany securityinterestexistsortofileanyfinancingstatementundertheUniformCommercial Codewithrespecttotheescrowaccountoranypartthereof.Paragraph3.ConditionsofEscrowAgreementThepropertydescribedinParagraph2,above,willremainintheescrowaccountcreatedbythisagreementuntiloneofthetwofollowingconditionshasbeensatisfied:(1)the decommissioningactivitiesrequiredby10CFRPart50havebeenauthorizedpursuantto paragraph4orcompleted,thelicensehasbeenterminated,thefacilitysiteisavailable foruseforpublicorprivatepurpose,pursuanttoNRCregulations,ortheescrowaccount hasbeenterminatedbynotice,inwriting,from[insertnameoflicensee]or(2)theescrow agent,[insertnameoftheescrowagent]hasbeennotifiedbythe[insertNRCornameof theStateregulatoryagency]inwriting,thatthelicensee,[nameoflicensee]hasdefaulted ontheagreedobligationtocarryoutthedecommissioningfortheabovelisted facility(ies).Paragraph4.DisbursementofPropertyinEscrowAccountThe[insertnameofescrowagent]shallmakepaymentsfromtheescrowaccountuponthepresentationofacertificatedulyexecutedbytheSecretaryorappropriateOfficerof the[insertnameoflicensee]attestingtotheoccurrenceoftheevents,andintheformset AppendixB-1 25forthintheattachedSpecimenCertificate,anduponpresentationofacertificationattestingtothefollowingconditions:(1)thatdecommissioningisproceedingpursuanttoanNRC-noticedor-approvedplan,and(2)thatthefundswithdrawnwillbeexpendedforactivitiesundertakenpursuanttothatplan.Orupon[insertnameofescrowagent]receivingwrittennotificationoflicenseedefaultfromthe[insertNRCorStateregulatoryagency],[insertnameofescrowagent]shall makepaymentsfromtheescrowaccountasthe[insertNRCornameofStateregulatory agency]shalldirect,inwriting,toprovideforthepaymentofthecostsoftherequired decommissioningactivitiescoveredbythisagreement.Theescrowagentshall reimbursethelicenseeorotherpersonsasspecifiedbythe[insertNRCorState regulatoryagency]fromtheescrowaccountforexpensesforrequiredactivitiesinsuch amountsasthe[insertNRCornameoftheStateregulatoryagency]shalldirectin writing.Inaddition,theescrowagentshallrefundto[insertnameoflicensee]such amountsasthe[insertNRCorthenameoftheStateregulatoryagency]specifies,in writing.Uponrefund,suchfundsshallnolongerconstitutepartoftheescrowaccountas describedinparagraph2,above.Paragraph5.IrrevocabilityItisalsoagreedbetweenthepartiesthatthisescrowisrevocableupondeliveryto[insertnameofescrowagent],theescrowagent,onlyontheoccurrenceofoneoftheconditions describedinParagraph3aboveorbytransferofthefundsheldinescrowtoanother financialassurancemechanismpermittedunder10CFR50.75(e).Paragraph6.PowersoftheEscrowAgentTheonlypowersanddutiesoftheescrowagentshallbetoholdtheescrowpropertyandtoinvestanddisposeofitinaccordancewiththetermsofthisagreement.EscrowAccountManagementTheescrowagentshallinvestandreinvesttheprincipalandincomeoftheescrowaccountandkeeptheescrowaccountinvestedasasinglefund,withoutdistinction betweenprincipalandincome,inaccordancewithgeneralinvestmentpoliciesand guidelineswhichthe(insertnameoflicensee]maycommunicateinwritingtotheescrow agentfromtimetotime,subject,however,totheprovisionsoftheescrowaccount;the escrowagentshalldischargeitsdutieswithrespecttotheescrowaccountsolelyinthe interestof(insertnameoflicensee's]decommissioningobligationandwiththecare,skill, prudence,anddiligence,underthecircumstancesthenprevailing,thatpersonsof prudence,actinginlikecapacityandfamiliarwithsuchmatters,woulduseintheconduct ofanenterpriseof likecharacterandwithlikeaims;exceptthat:(a)Securitiesorotherobligationsofthelicensee,oranyotherowneroroperatorofthelicensedfacility(ies),oranyoftheiraffiliatesasdefinedintheInvestment 26AppendixB-1(b)CompanyActof1940,asamended(15U.S.C.80A.2(a)),shallnotbeacquiredorheld,unlesstheyaresecuritiesorotherobligationsoftheFederalgovernment;(c)Theescrowagentisauthorizedtoholdcash,awaitinginvestmentordistributionuninvested,for___daysandwithoutliabilityforthepaymentofinterestthereon.ExpressPoweroftheEscrowAgentWithoutinanywaylimitingthepowersanddiscretionconferredupontheescrowagentbyotherprovisionsofthisagreementorbylaw,theescrowagentisexpresslyauthorized andempowered:(a)Toregisteranysecuritiesheldintheescrowaccountinitsownnameandtoholdanysecurityinbearerformorinbookentry,ortodepositorarrangeforthe depositofanysecuritiesissuedbytheU.S.Government,oranyagencyor instrumentalitythereof,withaFederalReservebank,butthebooksandrecordsof theescrowagentshallatalltimesshowthatallsuchsecuritiesarepartofthe escrowaccount;(b)Todepositanycashintheescrowaccountininterest-bearingaccountsorsavingscertificates;(c)Topaytaxes,fromtheaccount,ofanykindthatmaybeassessedorleviedagainsttheescrowaccountandallbrokeragecommissionsincurredbytheescrow account.Paragraph7.AnnualValuationAfterdeliveryhasbeenmadeintothisescrowaccount,theescrowagentshall[monthly,quarterly,annually]furnishtothelicenseeastatementconfirmingthevalueoftheescrow account.Anysecuritiesintheaccountshallbevaluedatmarketvaluewithina reasonabletimebeforeissuanceofsuchstatement.Thefailureofthelicenseetoobject inwritingtotheescrowagentwithin90daysafterthestatementhasbeenfurnishedto thelicenseeshallconstituteaconclusivelybindingassentbythelicensee,barringthe licenseefromassertinganyclaimorliabilityagainsttheescrowagentwithrespecttothe mattersdisclosedinthestatement.Paragraph8.SuccessorEscrowAgentUpon90dayspriornoticetothelicensee,[insertnameoflicensee],theescrowagentmayresign;upon90daysnoticetotheescrowagent,thelicensee,[insertnameof licensee],mayreplacetheescrowagentprovidedthatsuchresignationorreplacementis noteffectiveuntiltheescrowagenthasappointedasuccessorescrowagentandthis successoracceptstheappointmentoranotherfinancialassuranceinstrumenthasbeen securedpursuanttoparagraph5.Thesuccessorescrowagentshallhavethesame powersanddutiesasthoseconferredupontheescrowagentunderthisagreement.

Uponthesuccessor'sacceptanceoftheappointment,theescrowagentshallassign1 transfer,andpayovertothesuccessorthefundsandpropertiesthenconstitutingthe escrowaccount.Ifforanyreasonthelicenseecannotordoesnotactintheeventofthe 27AppendixB-1resignationoftheescrowagent,theescrowagentmayapplytoacourtofcompetentjurisdictionfortheappointmentofasuccessor,orforinstructions.Thesuccessorescrow agentshallspecifythedateonwhichitassumesadministrationoftheescrowaccountin awritingsenttothelicenseeandthecurrentescrowagentbycertifiedmail10days beforethechangebecomeseffective.Anyexpenseincurredbytheescrowagentasa resultofanyoftheactscontemplatedbythisparagraphshallbepaidasprovidedin Paragraph10ofthisagreement.Paragraph9.InstructionstotheEscrowAgentAllorders,requests,andinstructionsfromthelicenseetotheescrowagentshallbeinwriting,signedbysuchpersonsasaresignatoriestothisagreement,orsuchother designeesasthelicenseemaydesignateinwriting.Allorders,requests,andinstructions fromthe[inserttheNRCorthenameoftheStateregulatoryagency]shallbeinwriting, signedbythedesigneesofthe[insertNRCorthenameoftheStateregulatoryagency].

Theescrowagentshallbefullyprotectedinactinginaccordancewithsuchorders, requests,andinstructions.Theescrowagentshallhavetherighttoassume,inthe absenceofwrittennoticetothecontrary,thatnoeventconstitutingachangeora terminationoftheauthorityofanypersontoactonbehalfofthelicenseeor[insertthe NRCorthenameoftheStateregulatoryagency]underthisagreementhasoccurred.

Theescrowagentshallhavenodutytoactintheabsenceofsuchorders,requests,and instructionsfromthelicenseeand/or[inserttheNRCorthenameoftheStateregulatory agency],exceptasprovidedinthisagreement.Paragraph10.CompensationandExpensesoftheEscrowAgentThefeeoftheescrowagentforitsservicesinestablishingtheescrowaccountshallbe$_____,payableatthetimeoftheexecutionofthisagreement,tobeborneby[insertthe nameofthelicensee],licensee.Expensesoftheescrowagentfortheadministrationoftheescrowaccount,thecompensationoftheescrowagentforservicessubsequenttotheestablishingofthe escrowaccounttotheextentnotpaiddirectlybythelicensee,andallotherproper chargesanddisbursementsshallbepaidfromtheescrowaccount.Paragraph11.AmendmentToThisAgreementThisagreementmaybeamendedbyaninstrumentinwritingexecutedbythelicenseeandtheescrowagent.Paragraph12.TerminationThisagreementcanbeterminatedbywrittennoticeofterminationtotheescrowagentsignedby[insertthenameoflicensee],licensee,andbythe[insertNRCorthenameof theStateregulatoryagency]alone,ifthelicenseehasceasedtoexist.

28AppendixB-1Paragraph13.InterpretationThisescrowagreementconstitutestheentireagreementbetween[insertthenameoflicensee]and[insertthenameoftheescrowagent].Theescrowagentshallnotbe boundbyanyotheragreementorcontractenteredintoby[insertnameoflicensee]and theonlydocumentthatmaybereferencedincaseofambiguityinthisescrowagreement isthelicensingagreementbetween[insertnameoflicensee]andtheUnitedStates NuclearRegulatoryCommission,oritssuccessor.Paragraph14.AcceptanceofAppointmentbyEscrowAgent[Insertname,address,andpositionofescrowagent]doesherebyacknowledgeitsappointmentby[insertnameoflicensee],thelicenseetoserveasescrowagentforthe escrowaccountcreatedunderthisagreementandagreestocarryoutitsobligationsand dutiesasstatedinthisescrowagreement.Paragraph15.SeverabilityIfanypartofthisagreementisinvalid,itshallnotaffecttheremainingprovisions,whichremainvalidandenforceable.Paragraph16.EffectivenessThisagreementshallnotbecomeeffective(andtheescrowagentshallhavenoresponsibilityhereunderexcepttoreturntheescrowpropertytothe[insertnameof licensee])untiltheescrowagentshallhavereceivedthefollowingandshallhaveadvised

[insertnameoflicensee]inwritingthatthesameareinformandsubstancesatisfactory totheescrowagent:CertifiedresolutionofitsBoardofDirectorsauthorizingthemakingandperformanceofthisAgreement;CertificateastothenamesandspecimensignaturesofitsofficersorrepresentativeauthorizedtosignthisAgreementandnotices,instructionsand othercommunicationshereunder.[Signaturesandpositionsofthedesigneesofthelicenseeandtheescrowagent.]

[Insertnameofescrowagent][Insertnameoflicensee]By____________________________By_________________________

Name_________________________Name_______________________

Title___________________________Title________________________Date.

WitnessbyNotaryPublic.

29APPENDIXB-1.1SPECIMENCERTIFICATEOFEVENTS[Insertnameandaddressofescrowagent]

Attention:EscrowDivision Gentlemen:InaccordancewiththetermsoftheAgreementwithyoudated________,I,____________,[AuthorizedOfficer]of[insertnameoflicensee],herebycertifythatthe followingeventshaveoccurred:1.[Insertnameoflicensee]isrequiredtocommencethedecommissioningofitsfacilitieslocatedat[insertlocationoffacility](hereinaftercalledthe decommissioning).2.NinetydaysaftertheplansandproceduresforthecommencementandconductofthedecommissioninghavebeeneithernoticedintheFederalRegisterbytheUnitedStatesNuclearRegulatoryCommission,oritssuccessor(copyofnoticeattached),orinthecaseofalicensetermination plan,approvedbytheNRC,oritssuccessor(copyofapprovalattached).3.TheBoardofDirectorsof[insertnameoflicensee]hasadoptedtheattachedresolutionauthorizingthecommencingofthedecommissioning.

___________________[AuthorizedOfficer]of[insertnameoflicensee]

___________________Date 30APPENDIXB-1.2SPECIMENCERTIFICATEOFRESOLUTIONI,____________,doherebycertifythatIam[AuthorizedOfficer]of[insertnameoflicensee],a[insertstateofincorporation]corporation,andthattheresolutionlisted belowwasdulyadoptedatameetingofthisCorporation'sBoardofDirectorson

___________,20__.INWITNESSWHEREOF,IhavehereuntosignedmynameandaffixedthesealofthisCorporationthis_____dayof_____________,20__.

___________________[AuthorizedOfficer]of[insertnameoflicensee]RESOLVED,thatthisBoardofDirectorsherebyauthorizesthePresidentorsuchotheremployeeoftheCompanyashemaydesignate[insertname,asappropriate,"to enterintoanescrowagreement,"or"tocommencedecommissioningactivitiesat(name offacility)]withthe[insertnameofescrowagent]inaccordancewiththetermsand conditionsdescribedtothisBoardofDirectorsatthismeetingandwithsuchotherterms andconditionsasthePresidentshallhaveapprovedwithandupontheadviceof

Counsel.

31APPENDIXB-2SAMPLECERTIFICATESOFDEPOSITAPPENDIXB-2.1SAMPLENEGOTIABLECERTIFICATEOFDEPOSITPAYABLEATTHEEXPIRATIONOFASPECIFIEDTIMECERTIFICATEOFDEPOSIT

__________________(FinancialInstitution)Place________________________________________No.

_______________

____________(Date)[Insertnameoflicenseeorapplicant]hasdepositednotsubjecttocheck_________Dollars($)payabletotheorderoftheholderincurrentfundsnotlessthan30daysdaysafterdate,uponsurrenderofthiscertificateproperlyendorsed,withinterestattherateof____percentperannumfromdatetomaturityonly.Therateofinterest payablehereunderissubjecttochangebythebanktosuchextentasmaybenecessary tocomplywithrequirementsoftheFederalReserveBoardmadefromtimetotime pursuanttotheFederalReserveAct.ThesefundsaredepositedforthepurposeofprovidingfinancialassuranceforthecostofdecommissioningactivitiesasrequiredunderTitle10oftheCodeofFederalRegulations, Part50.Accordingly,thiscertificatewillberenewedautomaticallyunlesswrittennotice of(1)thedefaultofthe[insertnameoflicenseeorapplicant]ontheseobligations;(2)the terminationofthefacilitylicense;or(3)thesubstitutionofanotherfinancialassurance mechanismisreceivedfrom[thenameoflicenseeorapplicant]

________________CashierorOfficerNote:

ThenegotiableCertificateofDepositshouldbeinthepossessionofthetrusteeoftheconcurrentlycreatedstandbytrustortheescrowagentofanescrowaccount.Thecertificateshouldbeforalimitedtimeperiod,suchas1to5years,sothatthefacevaluecanbeadjusted.

32APPENDIXB-2.2SAMPLENONNEGOTIABLECERTIFICATEOFDEPOSITPAYABLEONACERTAINDATECERTIFICATEOFDEPOSIT(FinancialInstitution)CertificateofDeposit_________________________,20__

[Insertnameoflicenseeorapplicant]hasdepositedinthefinancialinstitutionthesumof_______________Dollars($________)payableto[Stateregulatoryagency(ifthe agencycanholdspecialfundsunderapplicablestatelaw),trusteeofstandbytrust,or escrowagent]_________________monthsafterdate,withinterestthereonattherateof

_____percentperannumfromdate,uponpresentationofthiscertificateproperly endorsed.Thesefundsaredepositedforthepurposeofprovidingfinancialassurancefor thecostofdecommissioningactivitiesasrequiredunderTitle10oftheCodeofFederal RegulationsPart50.Accordingly,thiscertificatewillberenewedautomaticallyunless writtennoticeof(1)thedefaultofthe[insertnameoflicenseeorapplicant]onthese obligations;(2)theterminationofthefacilitylicense;or(3)thesubstitutionofanother financialassurancemechanismisreceivedfrom[thenameofthelicenseeorapplicant].CashierorOfficerNote:Thecertificateshouldbeforalimitedtimeperiod,suchas1to5years,sothatthefacevaluecanbeadjusted.

33APPENDIXB-3SAMPLETRUSTFUNDANDSTANDBYTRUSTAGREEMENTSAPPENDIXB-3.1SAMPLETRUSTFUNDAGREEMENTTRUSTAGREEMENT,theAgreementisenteredintoasof[date]byandbetween[nameofNRClicensee],a[nameofState][insert"corporation,""partnership,""association,"or "proprietorship"],hereinreferredtoasthe"Grantor,"and[nameandaddressofan appropriateStateorFederalgovernmentagencyoranentitythathastheauthoritytoact astrusteeandwhosetrustoperationsareregulatedorexaminedbyaStateorFederal agency],the"Trustee."WHEREAS,theU.S.NuclearRegulatoryCommission(NRC),anagencyoftheU.S.Government,pursuanttotheAtomicEnergyActof1954,asamended,andtheEnergy ReorganizationActof1974,haspromulgatedregulationsinTitle10,ChapterIofthe CodeofFederalRegulations,Part50.Theseregulations,applicabletotheGrantor, requirethataholderof,oranapplicantforalicenseissuedpursuantto10CFRPart50 provideassurancethatfundswillbeavailablewhenneededforrequired decommissioningactivities.WHEREAS,theGrantorhaselectedtouseatrustfundtoprovide[insert"all"or"part"]ofsuchfinancialassuranceforthefacilitiesidentifiedhereinandalsoprovidesuch additionaldecommissioningfundsnotrequiredbytheNRCastheGrantormayelect;WHEREAS,theGrantor,actingthroughitsdulyauthorizedofficers,hasselectedtheTrusteetobethetrusteeunderthisAgreement,andtheTrusteeiswillingtoactas trustee,NOW,THEREFORE,theGrantorandtheTrusteeagreeasfollows:

Section1.Definitions.AsusedinthisAgreement:(a)Theterm"Grantor"meanstheNRClicenseewhoentersintothisAgreementandanysuccessorsorassignsoftheGrantor.(b)Theterm"Trustee"meansthetrusteewhoentersintothisAgreementandanysuccessorTrustee.Section2.CostsofDecommissioning.ThisAgreementpertainstothecostsofdecommissioningthefacilityidentifiedinLicenseNumber[insertlicensenumber]issued pursuantto10CFRPart50.Section3.EstablishmentofFund.TheGrantorandTrusteeherebyestablishaTrustFund(theFund)forthebenefitof[inserttheGrantororotherappropriatebeneficiarysuch asaStateagencyortheNRC].TheGrantorandtheTrusteeintendthatnothirdparty shallhaveaccesstotheFundexceptasprovidedherein.[Modificationofthisprovision tocoversale-leasebackagreementsshouldbemadecontingentuponcontinued dedicationofthetrusttoprovidefundsfordecommissioning.]

34AppendixB-3.1Section4.PaymentsConstitutingtheFund.PaymentsmadetotheTrusteefortheFundshallconsistofcash,securities,orotherliquidassetsacceptabletotheTrustee.The FundisestablishedinitiallyasconsistingofpropertyacceptabletotheTrustee.Such propertyandanyotherpropertysubsequentlytransferredtotheTrusteearereferredto asthe"Fund,"togetherwithallearningsandprofitsthereon,lessanypaymentsor distributionsmadebytheTrusteepursuanttothisAgreement.TheFundshallbeheldby theTrustee,INTRUST,ashereinafterprovided.Section5.PaymentforRequiredActivitiesSpecifiedinthePlan.TheTrusteeshallmakepaymentsfromtheFundtotheGrantorortoadecommissioningcontractorofthe GrantorastheGrantormaydesignateuponpresentationtotheTrusteeofthefollowing:a.Acertificatedulyexecutedbythe[AuthorizedOfficer]oftheGrantorattestingtotheoccurrenceoftheevents,andintheformsetforthinthe attachedSpecimenCertificate(seecertificatefollowingstandbytrust),andb.Acertificateattestingtothefollowingconditions;(1)thatdecommissioningisproceedingpursuanttoanNRC-noticedplan, and (2)thatthefundswithdrawnwillbeexpendedforactivitiesundertaken pursuanttothatPlan.IntheeventoftheGrantor'sdefaultorinabilitytodirectdecommissioningactivities,theTrusteeshall:(1)makepaymentsfromtheFundastheNRCorStateagencyshall direct,inwriting,toprovideforthepaymentofthecostsofrequiredactivitiescoveredby thisAgreement;(2)makedisbursementstotheGrantororotherpersonsasspecifiedby theNRC,orStateagency,fromtheFundforexpendituresforrequiredactivitiesinsuch amountsastheNRC,orStateagency,shalldirectinwriting;and(3)refundtothe GrantorsuchamountsremainingafterthelicensehasbeenterminatedorastheNRCor StateAgencyspecifiesinwriting.Uponrefund,suchfundsshallnolongerconstitutepart oftheFundasdefinedherein.Section6.TrustManagement.TheTrusteeshallinvestandreinvesttheprincipalandincomeoftheFundandkeeptheFundinvestedasasinglefund,withoutdistinction betweenprincipalandincome,inaccordancewithgeneralinvestmentpoliciesand guidelineswhichtheGrantormaycommunicateinwritingtotheTrusteefromtimeto time,subject,however,totheprovisionsofthissection.Ininvesting,reinvesting, exchanging,selling,andmanagingtheFund,theTrusteeshalldischargeitsdutieswith respecttotheFundinthebestinterestofthebeneficiaryandwiththecare,skill, prudence,anddiligenceunderthecircumstancesthenprevailingwhichpersonsof prudence,actinginalikecapacityandfamiliarwithsuchmatters,woulduseinthe conductofanenterpriseofalikecharacterandwithlikeaims;exceptthat:(a)SecuritiesorotherobligationsoftheGrantor,oranyotherowneroroperatorofthefacilities,oranyoftheiraffiliatesasdefinedintheInvestmentCompanyActof 35AppendixB-3.11940,asamended(15US.C.80A-2(a)),shallnotbeacquiredorheld,unlesstheyaresecuritiesorotherobligationsoftheFederaloraStategovernment;and(b)Forareasonabletime,nottoexceed___days,theTrusteeisauthorizedtoholduninvestedcash,awaitinginvestmentordistribution,withoutliabilityforthe paymentofinterestthereon.(c)Investingthefundsinsecuritiesorotherobligationsofthelicenseeoranyotherowneroroperatorofthepowerreactorortheiraffiliates,subsidiaries,successors orassignees,orinsecuritiesofanyotherentityowningoneormorenuclearpower plants,exceptforinvestmentstiedtomarketindicesornon-nuclearsectormutual fundsisprohibited.Section7.ComminglingandInvestment.TheTrusteeisexpresslyauthorizedinitsdiscretion:(a)Totransferfromtimetotimeanyoralloftheassetsofthefundtoanycommon,commingled,orcollectivetrustfundcreatedbytheTrusteeinwhichtheFundis eligibletoparticipate,subjecttoalloftheprovisionsthereof,tobecommingled withtheassetsofothertrustsparticipatingtherein;and(b)TopurchasesharesinanyinvestmentcompanyregisteredundertheInvestmentCompanyActof1940(15U.S.C.80A-1etseq.),includingonethatmaybe created,managed,underwritten,ortowhichinvestmentadviceisrendered,orthe sharesofwhicharesoldbytheTrustee.TheTrusteemayvotesuchsharesinits discretion.Section8.ExpressPowersofTrustee.WithoutinanywaylimitingthepowersanddiscretionconferredupontheTrusteebytheotherprovisionsofthisAgreementorby law,theTrusteeisexpresslyauthorizedandempowered:(a)Tosell,exchange,convey,transfer,orotherwisedisposeofanypropertyheldbyit,bypublicorprivatesale,asnecessary,forprudentmanagementoftheFund;(b)Tomake,execute,acknowledge,anddeliveranyandalldocumentsoftransferandconveyanceandanyandallotherinstrumentsthatmaybenecessaryor appropriatetocarryoutthepowershereingranted;(c)ToregisteranysecuritiesheldintheFundinitsownname,orinthenameofanominee,andtoholdanysecurityinbearerformorinbookentry,ortocombine certificatesrepresentingsuchsecuritieswithcertificatesofthesameissueheldby theTrusteeinotherfiduciarycapacities,toreinvestinterestanddividends paymentsandfundsfrommaturedandredeemedinstruments,tofileproperforms concerningsecuritiesheldintheFundinatimelyfashionwithappropriate governmentagencies,ortodepositorarrangeforthedepositofsuchsecuritiesin aqualified 36AppendixB-3.1centraldepositoryeventhough,whensodeposited,suchsecuritiesmaybemergedandheldinbulkinthenameofthenomineeorsuchdepositorywithothersecurities depositedthereinbyanotherperson,ortodepositorarrangeforthedepositofany securitiesissuedbytheU.S.Government,oranyagencyorinstrumentalitythereof,with aFederalReservebank,butthebooksandrecordsoftheTrusteeshallatalltimesshow thatallsuchsecuritiesarepartoftheFund;(a)TodepositanycashintheFundininterest-bearingaccountsmaintainedorsavingscertificatesissuedbytheTrustee,initsseparatecorporatecapacity,orin anyotherbankinginstitutionaffiliatedwiththeTrustee;and(b)TocompromiseorotherwiseadjustallclaimsinfavoroforagainsttheFund.

Section9.TaxesandExpenses.AlltaxesofanykindthatmaybeassessedorleviedagainstorinrespectoftheFundandallbrokeragecommissionsincurredbytheFund maybepaidfromtheFund.AllotherexpensesincurredbytheTrusteeinconnection withtheadministrationofthisTrust,includingfeesforlegalservicesrenderedtothe Trustee,thecompensationoftheTrusteetotheextentnotpaiddirectlybytheGrantor, andallotherproperchargesanddisbursementsoftheTrusteemaybepaidfromthe

Fund.Section10.AnnualValuation.AfterpaymenthasbeenmadeintothisTrustFund,theTrusteeshall[monthly,quarterly,annually]furnishtotheGrantorastatementconfirming thevalueoftheTrust.AnysecuritiesintheFundshallbevaluedatmarketvaluewithina reasonabletimeofsuchstatement.ThefailureoftheGrantortoobjectinwritingtothe Trusteewithin__daysafterthestatementhasbeenfurnishedtotheGrantorshall constituteaconclusivelybindingassentbytheGrantor,barringthegrantorfromasserting anyclaimorliabilityagainsttheTrusteewithrespecttothemattersdisclosedinthe statement.Section11.AdviceofCounsel.TheTrusteemayfromtimetotimeconsultwithcounsel,whomaybecounseltothegrantor,withrespecttoanyquestionarisingastothe constructionofthisAgreementoranyactiontobetakenhereunder.TheTrusteeshallbe fullyprotected,totheextentpermittedbylaw,inactingontheadviceofcounsel.Section12.TrusteeCompensation.TheTrusteeshallbeentitledtoreasonablecompensationforitsservicesasagreeduponinwritingfromtimetotimewiththe Grantor.Section13.SuccessorTrustee.Upon__daysnoticetotheGrantor,theTrusteemayresign;upon__daysnoticetotheTrustee,theGrantormayreplacetheTrustee;but suchresignationorreplacementshallnotbeeffectiveuntiltheGrantorhaseither appointedasuccessorTrusteeandthissuccessoracceptstheappointmentor implementsanotherfinancialassurancemechanismspecifiedinTitle10,ChapterI,Code ofFederalRegulations,Section50.75(e).ThesuccessorTrusteeshallhavethesame powersanddutiesasthoseconferredupontheTrusteehereunder.Uponthesuccessor Trustee'sacceptanceoftheappointment,theTrusteeshallassign,transfer,andpayover tothe 37AppendixB-3.1successorTrusteethefundsandpropertiesthenconstitutingtheFund.IfforanyreasontheGrantorcannotordoesnotactintheeventoftheresignationoftheTrustee,the Trusteemayapplytoacourtofcompetentjurisdictionfortheappointmentofasuccessor Trusteeorforinstructions.ThesuccessorTrusteeshallspecifythedateonwhichit assumesadministrationofthetrustinawritingsenttotheGrantorandthepresent Trusteebycertifiedmail__daysbeforesuchchangebecomeseffective.Anyexpenses incurredbytheTrusteeasaresultofanyoftheactscontemplatedbythissectionshall bepaidasprovidedinSection9.Section14.InstructionstotheTrustee.Allorders,requests,andinstructionsbytheGrantortotheTrusteeshallbeinwriting,signedbysuchpersonsasaresignatoriesto thisagreementorsuchotherdesigneesastheGrantormaydesignateinwriting.The TrusteeshallbefullyprotectedinactingwithoutinquiryinaccordancewiththeGrantor's orders,requests,andinstructions.IftheNRCorStateagencyissuesorders,requests, orinstructionstotheTrusteeintheeventofGrantordefault,theseshallbeinwriting, signedbytheNRC,Stateagency,ortheirdesignees,andtheTrusteeshallactandshall befullyprotectedinacting,inaccordancewithsuchordersrequests,andinstructions.

TheTrusteeshallhavetherighttoassume,intheabsenceofwrittennoticetothe contrary,thatnoeventconstitutingachangeoraterminationoftheauthorityofany persontoactonbehalfoftheGrantor,theNRC,orStateagency,hereunderhas occurred.TheTrusteeshallhavenodutytoactintheabsenceofsuchorders,requests, andinstructionsfromtheGrantorand/ortheNRC,orStateagency,exceptasprovided forherein.Section15.AmendmentofAgreement.ThisAgreementmaybeamendedbyaninstrumentinwritingexecutedbytheGrantor,theTrusteeand,ifapplicable,theNRCor Stateagency,orbytheTrusteeandtheNRCorStateagencyiftheGrantorceasesto exist.Section16.Termination.ThistrustagreementshallcontinueuntilterminatedatthewrittenagreementoftheGrantor,theTrusteeand,ifapplicable,theNRCorState agency,orbytheTrusteeandtheNRCorStateagencyifthegrantorceasestoexist.

Uponterminationofthetrust,allremainingtrustproperty,lessfinaltrustadministration expenses,shallbedeliveredtotheGrantororitssuccessor,ortransferredtoanother financialassurancemechanismspecifiedin10CFR50.75(e),asappropriate.Section17.ImmunityandIndemnification.TheTrusteeshallnotincurpersonalliabilityofanynatureinconnectionwithanyactoromission,madeingoodfaith,inthe administrationofthistrust,orincarryingoutanydirectionsbytheGrantor,theNRC,or Stateagency,issuedinaccordancewiththisAgreement.TheTrusteeshallbe indemnifiedandsavedharmlessbytheGrantororfromthetrustfund,orboth,fromand againstanypersonalliabilitytowhichtheTrusteemaybesubjectedbyreasonofanyact orconductinitsofficialcapacity,includingallexpensesreasonablyincurredinits defenseintheeventtheGrantorfailstoprovidesuchdefense.Section18.ChoiceofLaw.ThisAgreementshallbeadministered,construed,andenforcedaccordingtothelawsoftheStateof[insertnameofState].

38AppendixB-3.1Section19.InterpretationandSeverability.AsusedinthisAgreement,wordsinthesingularincludethepluralandwordsinthepluralincludethesingular.Thedescriptive headingsforeachsectionofthisAgreementshallnotaffecttheinterpretationorthelegal efficacyofthisAgreement.Ifanypartofthisagreementisinvalid,itshallnotaffectthe remainingprovisionswhichwillremainvalidandenforceable.INWITNESSWHEREOFthepartieshavecausedthisAgreementtobeexecutedbytherespectiveofficersdulyauthorizedandtheincorporatesealstobehereuntoaffixedand attestedasofthedatefirstwrittenabove.ATTEST:[Insertnameoflicensee(Grantor)][SignatureofrepresentativeofGrantor]

[Title][Title][Seal][InsertnameofTrustee][SignatureofrepresentativeofTrustee]

[Title]ATTEST:

[Title][Seal]

39APPENDIXB-3.2SAMPLESTANDBYTRUSTAGREEMENTTRUSTAGREEMENT,theAgreemententeredintoasof[date]byandbetween[nameofNRClicensee],a[nameofState][insert"corporation,""partnership,""association,"or "proprietorship"],hereinreferredtoasthe"Grantor,"and[nameandaddressofan appropriateStateorFederalgovernmentagencyoranentitythathastheauthoritytoact astrusteeandwhosetrustoperationsareregulatedorexaminedbyaStateorFederal agency],the"Trustee."WHEREAS,theU.S.NuclearRegulatoryCommission(NRC),anagencyoftheU.S.Government,pursuanttotheAtomicEnergyActof1954,asamended,andtheEnergy ReorganizationActof1974,haspromulgatedregulationsinTitle10,ChapterIofthe CodeofFederalRegulations,Part50.Theseregulations,applicabletotheGrantor, requirethataholderof,oranapplicantfor,aPart50licenseprovideassurancethat fundswillbeavailablewhenneededforrequireddecommissioningactivities.WHEREAS,theGrantorhaselectedtousea[insert"letterofcredit,""lineofcredit,""suretybond,""insurancepolicy,""parentguarantee,""certificateofdeposit,"or"deposit ofgovernmentsecurities"]toprovide[insert"all"or"part"]ofsuchfinancialassurancefor thefacilitiesidentifiedherein;andWHEREAS,whenpaymentismadeundera[insert"letterofcredit,""lineofcredit,""suretybond,""insurancepolicy,"certificate(s)ofdeposit,""depositofgovernment securities,"or"parentguarantee"],thisstandbytrustshallbeusedforthereceiptofsuch payment;andWHEREAS,theGrantor,actingthroughitsdulyauthorizedofficers,hasselectedtheTrusteetobethetrusteeunderthisAgreement,andtheTrusteeiswillingtoactas trustee,NOW,THEREFORE,theGrantorandtheTrusteeagreeasfollows:

[TheremainderoftherecommendedwordingfortheStandbyTrustAgreementisasindicatedinB.3.1fortheTrustFundAgreementexceptthatthewords"StandbyTrust Fund"shouldbesubstitutedinSection3andSection10inplaceofthewords"Trust Fund."]

40APPENDIXB-3.2.1SPECIMENCERTIFICATEOFEVENTS[Insertnameandaddressoftrustee]Attention:TrustDivision Gentlemen:InaccordancewiththetermsoftheAgreementwithyoudated_________,I,______________,[AuthorizedOfficer]of[insertnameoflicensee],herebycertifythatthe followingeventshaveoccurred:1.[Insertnameoflicensee]isrequiredtocommencethedecommissioningofitsfacilitylocatedat[insertlocationoffacility](hereinaftercalledthe decommissioning).2.TheplansandproceduresforthecommencementandconductofthedecommissioninghavebeennoticedandapprovedbytheUnitedStates NuclearRegulatoryCommission,oritssuccessor,on________________

(copyofapprovalattached).3.TheBoardofDirectorsof[insertnameoflicensee]hasadoptedtheattachedresolutionauthorizingthecommencementofthe decommissioning.

_____________________________________[AuthorizedOfficer]of[insertnameoflicensee]

_____________________________________Date 41APPENDIXB.3.2.2SAMPLECERTIFICATEOFRESOLUTIONI,_____________doherebycertifythatIam[AuthorizedOfficer]of[insertnameoflicensee],a[insertstateofincorporation)corporation,andthattheresolutionlisted belowwasdulyadoptedatameetingofthisCorporation'sBoardofDirectorson

____________,20__.INWITNESSWHEREOF,IhavehereuntosignedmynameandaffixedthesealofthisCorporationthis____dayof_____________,20__.

_________________________[AuthorizedOfficer]RESOLVED,thatthisBoardofDirectorsherebyauthorizesthePresident,orsuchotheremployeeoftheCompanyashemaydesignate,tocommencedecommissioning activitiesat[insertnameoffacility)inaccordancewiththetermsandconditionsdescribed tothisBoardofDirectorsatthismeetingandwithsuchothertermsandconditionsasthe PresidentshallapprovewithandupontheadviceofCounsel.

42APPENDIXB.3.3SAMPLEOFACKNOWLEDGMENTACKNOWLEDGMENT[Thefollowingisanexampleoftheacknowledgmentthatshouldaccompanythetrustagreementforastandbytrustfundortrustfund.]STATEOF___________

ToWit_________

CITYOF__________Onthis______dayof_________,beforeme,anotarypublicinandforthecityandStateaforesaid,personallyappeared___________,andshe/hediddeposeandsaythat she/heisthe[title],of[financialinstitution],Trustee,whichexecutedtheabove instrument,thatshe/heknowsthesealofsaidassociation;thatthesealaffixedtosuch instrumentissuchcorporateseal;thatitwassoaffixedbyorderoftheassociation;and thatshe/hesignedher/hisnametheretobylikeorder.

______________________[Signatureofnotarypublic]MyCommissionExpires:

___________________________[Date]

43APPENDIXB-4SAMPLEPAYMENTSURETYBONDPAYMENTSURETYBONDDatebondexecuted:_________________________Effectivedate:_______________________

Principal:[legalnameandbusinessaddressoflicenseeorapplicant]

Typeoforganization:[insert"proprietorship,""jointventure,""partnership"or"corporation"]Stateofincorporation:___________________(ifapplicable)

NRClicensenumber,nameandaddressoffacility,andamount(s)fordecommissioningactivityguaranteedbythisbond:_____________________Surety(ies)[name(s)andbusinessaddress(es)]

Typeoforganization:[insert"proprietorship,""jointventure,""partnership"or"corporation"]Stateofincorporation:__________________(ifapplicable)

Surety'squalificationinjurisdictionwherelicensedfacility(ies)is(arelocated)

Surety'sbondnumber:_________________Totalpenalsumofbond:$________________Knowallpersonsbythesepresents,Thatwe,thePrincipalandSurety(ies)hereto,arefirmlyboundtothe[insertU.S.NuclearRegulatoryCommission(hereinaftercalledNRC) orthenameoftheStateagency]intheabovepenalsumforthepaymentofwhichwe bindourselves,ourheirs,executors,administrators,successors,andassignsjointlyand severally;providedthat,wheretheSuretiesarecorporationsactingasco-sureties,we, theSureties,bindourselvesinsuchsum"jointlyandseverally"onlyforthepurposeof allowingajointactionoractionsagainstanyorallofus,andforallotherpurposeseach Suretybindsitself,jointlyandseverallywiththePrincipal,forthepaymentofsuchsum onlyasissetforthoppositethenameofsuchSurety;butifnolimitofliabilityisindicated, thelimitofliabilityshallbethefullamountofthepenalsum.WHEREAS,theU.S.NuclearRegulatoryCommission,anagencyoftheU.S.Government,pursuanttotheAtomicEnergyActof1954,asamended,andtheEnergy ReorganizationActof1974,haspromulgatedregulationsinTitle10,ChapterIofthe CodeofFederalRegulations,Part50,applicabletothePrincipal,whichrequirethata licenseholderoranapplicantforalicenseprovidefinancialassurancethatfundswillbe availablewhenneededforfacilitydecommissioning; 44AppendixB-4NOW,THEREFORE,theconditionsoftheobligationaresuchthatifthePrincipalshallfaithfully,beforethebeginningofdecommissioningofeachfacilityidentifiedabove,fund thestandbytrustfundintheamount(s)identifiedaboveforthefacility;Or,ifthePrincipalshallfundthestandbytrustfundinsuchamount(s)afteranordertobeginfacilitydecommissioningisissuedby[insert"theNRC"orthenameoftheState agency]oraU.S.districtcourtorothercourtofcompetentjurisdiction;Or,ifthePrincipalshallprovidealternativefinancialassuranceandobtainthewrittenapprovalofthe[insert"NRC"orthenameoftheStateagency]ofsuchassurance,within 30daysafterthedateanoticeofcancellationfromtheSurety(ies)isreceivedbyboththe Principalandthe[insert"NRC"orthenameoftheStateagency],thenthisobligation shallbenullandvoid;otherwiseitistoremaininfullforceandeffect.TheSurety(ies)shallbecomeliableonthisbondobligationonlywhenthePrincipalhasfailedtofulfilltheconditionsdescribedabove.Uponnotificationbythe[insert"NRC"or thenameoftheStateagency]thatthePrincipalhasfailedtoperformasguaranteedby thisbond,theSurety(ies)shallplacefundsintheamountguaranteedforthefacility(ies) intothestandbytrustfund.TheliabilityoftheSurety(ies)shallnotbedischargedbyanypaymentorsuccessionofpaymentshereunder,unlessanduntilsuchpaymentorpaymentsshallamountinthe aggregatetothepenalsumofthebond,butinnoeventshalltheobligationofthe Surety(ies)hereunderexceedtheamountofsaidpenalsum.TheSurety(ies)maycancelthebondbysendingnoticeofcancellationbycertifiedmailtothePrincipalandtothe[insert"NRC"orthenameoftheStateagency]provided, however,thatcancellationshallnotoccurduringthe90daysbeginningonthedateof receiptofthenoticeofcancellationbyboththePrincipalandthe[insert"NRC"orthe nameoftheStateagency],asevidencedbythereturnreceipts.ThePrincipalmayterminatethisbondbysendingwrittennoticetothe[insert"NRC"ornameofStateagency]andtoSurety(ies)90dayspriortotheproposeddateof termination,provided,however,thatnosuchnoticeshallbecomeeffectiveuntilthe Surety(ies)receive(s)writtenauthorizationforterminationofthebondfromthe[insert "NRC"orthenameoftheStateagency].ThePrincipalandSurety(ies)herebyagreetoadjustthepenalsumofthebondyearlysothatitguaranteesanewamount,providedthatthepenalsumdoesnotincreasebymore than20percentinanyoneyear.InWitnessWhereof,thePrincipalandSurety(ies)haveexecutedthisfinancialguaranteebondandhaveaffixedtheirsealsonthedatesetforthabove.

45AppendixB-4ThepersonswhosesignaturesappearbelowherebycertifythattheyareauthorizedtoexecutethissuretybondonbehalfofthePrincipalandSurety(ies).Principal

[Signature(s)]

[Name(s)]

[Title(s)]

[Corporateseal]

CorporateSurety(ies)

[Nameandaddress]

Stateofincorporation:_________________

Liabilitylimit:$_________________

[Signature(s)]

[Name(s)andtitle(s)]

[Corporateseal]

[Foreveryco-surety,providesignature(s),corporateseal,andotherinformationinthesamemannerasforSurety(ies)above.]Bondpremium:$_______________

46APPENDIXB-5SAMPLEIRREVOCABLESTANDBYLETTEROFCREDITSTANDBYLETTEROFCREDITNO.[INSERTNO.]ThisCreditExpires[insertdate

]IssuedTo:[InsertU.S.NuclearRegulatoryCommission;Washington,DC20555,ornameandaddressofappropriateStateagency.]

DearSirorMadam:

WeherebyestablishourStandbyLetterofCreditNo._________________inyourfavor,attherequestandfortheaccountof[applicant'snameandaddress]uptotheaggregate amountof[inwords],U.S.dollars$___________availableuponpresentationof:(1)yoursightdraft,bearingreferencetothisLetterofCreditNo.__________and (2)yoursignedstatementreadingasfollows:"Icertifythattheamountofthedraftispayablepursuanttoregulationsissuedunderauthorityof__________________.ThisletterofcreditisissuedinaccordancewithregulationsissuedundertheauthorityoftheU.S.NuclearRegulatoryCommission(NRC),anagencyoftheU.S.Government, pursuanttotheAtomicEnergyActof1954,asamended,andtheEnergyReorganization Actof1974.TheNRChaspromulgatedregulationsinTitle10,ChapterIoftheCodeof FederalRegulations,Part50,whichrequirethataholderof,oranapplicantfor,alicense issuedunder10CFRPart50provideassurancethatfundswillbeavailablewhenneeded fordecommissioning.Thisletterofcreditiseffectiveasof[date]andshallexpireon[dateatleast1yearlater],butsuchexpirationdateshallbeautomaticallyextendedforaperiodof[atleast1year]

on[date]andoneachsuccessiveexpirationdate,unless,atleast90daysbeforethe currentexpirationdate,wenotifybothyouand[licensee'sname],asshownonthesigned returnreceipts.If[licensee'sname]isunabletosecurealternativefinancialassuranceto replacethisletterofcreditwithin30daysofnotificationofcancellation,theNRCmay drawuponthefullvalueofthisletterofcreditpriortocancellation.Weshallgive immediatenoticetotheapplicantandthe[insert"NRC"ornameofStateagency]ofany noticereceivedoractionfiledalleging(1)theinsolvencyorbankruptcyofthefinancial institutionor(2)anyviolationsofregulatoryrequirementsthatcouldresultinsuspension orrevocationofthebank'scharterorlicensetodobusiness.Wealsoshallgive immediatenoticeifwe,foranyreason,becomeunabletofulfillourobligationunderthe letterofcredit.

47AppendixB-5Wheneverthisletterofcreditisdrawnon,under,andincompliancewiththetermsofthisletterofcredit,weshalldulyhonorsuchdraftuponitspresentationtouswithin30days, andweshalldeposittheamountofthedraftdirectlyintothestandbytrustfundof

[licensee'sname]inaccordancewithyourinstructions.Eachdraftmustbearonitsfacetheclause:"DrawnunderLetterofCreditNo.______,dated___________,andthetotalofthisdraftandallotherdraftspreviouslydrawn underthisletterofcreditdoesnotexceed[fillinamount]."[Signature(s)andtitle(s)ofofficial(s)ofissuinginstitution]

[Date]

Thiscreditissubjectto[insert"themostrecenteditionoftheUniformCustomsandPracticeforDocumentaryCredits,publishedbytheInternationalChamberof Commerce,"or"theUniformCommercialCode"].

48APPENDIXB-6SAMPLEDOCUMENTSRECOMMENDEDTOSUPPORTCORPORATEGUARANTEEAPPENDIXB-6.1SAMPLELETTERFROMCHIEFFINANCIALOFFICEROFCORPORATEPARENT,INCLUDINGCOSTESTIMATESANDDATAFROMAUDITEDFINANCIALSTATEMENTS[AddresstoU.S.NuclearRegulatoryCommissionorStateregulatoryagency]Iamthechieffinancialofficerof[nameandaddressoffirm],a[insert"proprietorship,""jointventure,""partnership,"or"corporation"].Thisletterisinsupportofthisfirm'suse ofthefinancialtesttodemonstratefinancialassurance,asspecifiedin10CFRPart50.[Completethefollowingparagraphregardingfacility(ies)andassociatedcostestimates.Foreachfacility,includeitslicensenumber,name,address,andcurrentcostestimates forthespecifiedactivities.]Thisfirmguarantees,throughtheparentcompanyguaranteesubmittedtodemonstratecomplianceunder10CFRPart50,thedecommissioningofthefollowingfacility(ies) ownedoroperatedbysubsidiary(ies)ofthisfirm.Thecurrentcostestimatesorcertified amountsfordecommissioning,andtheamountsbeingguaranteed,areshownforeach facility:NameofLocationofCurrentAmountBeingFacilityFacilityCostEstimatesGuaranteedThisfirm[insert"isrequired"or"isnotrequired"]tofileaForm10KwiththeU.S.

SecuritiesandExchangeCommissionforthelatestfiscalyear.Thisfiscalyearofthisfirmendson[month,day].Thefiguresforthefollowingitemsmarkedwithanasteriskarederivedfromthisfirm'sindependentlyaudited,year-end financialstatementsandfootnotesforthelatestcompletedfiscalyear,ended[date].[InsertcompletedAlternativeIorAlternativeII.]

Iherebycertifythatthecontentofthisletteristrueandcorrecttothebestofmyknowledge.

[Signature]

[Name]

[Title]

[Date]

49APPENDIXB-6.2FINANCIALTEST:ALTERNATIVEI1.Decommissioningcostestimatesorguaranteedamountforfacility[insertlicensenumber](totalofallcostestimatesshowninparagraphabove)$*2.Totalliabilities(ifanyportionofthecostestimatesfordecommissioningisincludedintotalliabilitiesonyourfirm'sfinancialstatements,youmay deducttheamountofthatportionfromthislineandaddthatamountto lines3and4)$*3.Tangiblenetworth**$*4.Networth$*5.Currentassets$*6.Currentliabilities$*7.Networkingcapital(line5minusline6)$*8.Thesumofnetincomeplusdepreciation,depletion,andamortization$*9.TotalassetsinUnitedStates(requiredonlyiflessthan90percentoffirm'sassetsarelocatedintheUnitedStates)$

Yes No10.Isline3atleast$10million?11.Isline3atleast6timesline1?12.Isline7atleast6timesline1?13.Areatleast90percentoffirms'sassetslocatedintheUnitedStates?Ifnot,completeline14.14.Isline9atleast6timesline1?Guarantormustmeettwoofthefollowingthreeratios:15.Isline2dividedbyline4lessthan2.0?16.Isline8dividedbyline2greaterthan0.1?17.Isline5dividedbyline6greaterthan1.5?*Denotesfiguresderivedfromfinancialstatements.

    • Tangiblenetworthisdefinedasnetworthminusgoodwill,patents,trademarks,and copyrights.

50APPENDIXB-6.3FINANCIALTEST:ALTERNATIVEII1.Decommissioningcostestimatesorguaranteedamountforfacility[insertlicensenumber](totalcostofallcostestimatesshouldbestatedinparagraphsabove)$2.CurrentbondratingofmostrecentunsecuredissuanceofthisfirmRatingNameofratingservice3.Dateofissuanceofbond4.Dateofmaturityofbond*5.Tangiblenetworth**(ifanyportionofestimatesfordecommissioningisincludedintotalliabilitiesonyourfirm'sfinancialstatements,youmay addtheamountofthatportiontothisline)$*6.TotalassetsinUnitedStates(requiredonlyiflessthan90percentoffirm'sassetsarelocatedintheUnitedStates)

Yes No7.Isline5atleast$10million?8.Isline5atleast6timesline1?9.Areatleast90percentoffirm'sassetslocatedintheUnitedStates?Ifnot,completeline10.10.Isline6atleast6timesline1?11.Istheratingspecifiedonline2"BBB"orbetter(ifissuedbyStandard&Poor's)or"Baa"orbetter(ifissuedbyMoody's)?*Denotesfiguresderivedfromfinancialstatements.

    • Tangiblenetworthisdefinedasnetworthminusgoodwill,patents,trademarks,and copyrights.

51APPENDIXB-6.4SAMPLEOFAUDITOR'SSPECIALREPORTBYCERTIFIEDPUBLICACCOUNTANTCONFIRMATIONOFCHIEFFINANCIALOFFICER'SLETTERWehaveexaminedthefinancialstatementsof[companyname]fortheyearended[date],andhaveissuedourreportthereondated[date].Ourexaminationwasmadein accordancewithgenerallyacceptedauditingstandardsand,accordingly,includedsuch testsoftheaccountingrecordsandsuchotherauditingproceduresasweconsidered necessary.The[companyname]hasprepareddocumentstodemonstrateitsfinancialresponsibilityundertheNRC'sfinancialassuranceregulations,10CFRPart50.Thisletterisfurnished toassistthelicensee[insertNRClicensenumberandname]incomplyingwiththese regulationsandshouldnotbeusedforotherpurposes.Theattachedschedulereconcilesthespecifiedinformationfurnishedinthechieffinancialofficer's(CFO's)letterinresponsetotheregulationswiththecompany'sfinancial statements.Inconnectiontherewith,wehave1.Confirmedthattheamountsinthecolumn"PerFinancialStatements"agreewithamountscontainedinthecompany'sfinancialstatementsfortheyearended

[date];2.Confirmedthattheamountinthecolumn"PerCEO'sLetter"agreeswiththeletterpreparedinresponsetotheNRC'srequest;3.Confirmedthattheamountinthecolumn"ReconcilingItems"agreeswithanalysespreparedbythecompanysettingforththeindicateditems;and4.Recomputedthetotalsandpercentages.

Becausetheproceduresin1-4abovedonotconstituteafullexaminationmadeinaccordancewithgenerallyacceptedauditingstandards,wedonotexpressanopinionon themannerinwhichtheamountswerederivedintheitemsreferredtoabove.In connectionwiththeproceduresreferredtoabove,nomatterscametoourattentionthat causeustobelievethatthechieffinancialofficer'sletterandsupportinginformation shouldbeadjusted.

____________________Signature____________________Date 52APPENDIXB-6.4.1SAMPLESCHEDULERECONCILINGAMOUNTSCONTAINEDINCFO'sLETTERWITHAMOUNTSINFINANCIALSTATEMENTSThisillustratestheformofschedulethatiscontemplated.Detailsandreconcilingitemswilldifferinspecificsituations.XYZCOMPANYYEARENDEDDECEMBER31,20XXPerRecon-PerLineNumberinFinancialcilingCFO's CFO'sLetterStatementsItemsLetterTotalcurrentliabilitiesX Long-termdebtX DeferredincometaxesX XXAccrueddecommissioningcostsincludedincurrent liabilitiesXTotalliabilities(lessaccrueddecommissioningcosts)XNetworthXXLess:CostinexcessofvalueoftangibleassetsacquiredX XAccrueddecommissioningcostsincludedincurrent liabilitiesXTangiblenetworth(plusdecommissioningcosts)XX(Balanceofscheduleisnotillustrated.)

53APPENDIXB-6.5SAMPLEPARENTCOMPANYGUARANTEEPARENTCOMPANYGUARANTEEGuaranteemadethis[date]by[nameofguaranteeingentity]a[insert"proprietorship,""jointventure,""partnership,"or"corporation"]organizedunderthelawsoftheStateof

[insertnameofState],hereinreferredtoas"guarantor,"totheUS.NuclearRegulatory Commission(NRC),orStateagencyfoundacceptabletotheNRC,[insertnameofState agency],obligee,onbehalfofoursubsidiary[licensee]of[businessaddress].Recitals1.Theguarantorhasfullauthorityandcapacitytoenterintothisguarantee[ifguarantorisacorporation,addthefollowingphrase"underitsbylaws,articlesof incorporation,andthelawsoftheStateof[insertguarantor'sstateof incorporation],itsStateofincorporation"].[IftheguarantorhasaBoardof Directors,insertthefollowing:"GuarantorhasapprovalfromitsBoardofDirectors toenterintothisguarantee."]2.ThisguaranteeisbeingissuedtocomplywithregulationsissuedbytheNRC,anagencyoftheU.S.Government,pursuanttotheAtomicEnergyActof1954,as amended,andtheEnergyReorganizationActof1974.NRChaspromulgated regulationsinTitle10,ChapterIoftheCodeofFederalRegulations,Part50, whichrequirethataholderof,oranapplicantfor,alicenseissuedpursuantto10 CFRPart50provideassurancethatfundswillbeavailablewhenneededfor requireddecommissioningactivities.3.Theguaranteeisissuedtoprovidefinancialassurancefordecommissioningactivitiesfor[identifylicensedfacility(ies)]asrequiredby10CFRPart50.The decommissioningcostsandguaranteeamountforwhichareasfollows:[insert amountofdecommissioningcostguaranteedforeachidentifiedfacility].4.Theguarantormeetsorexceedsthefollowingfinancialtestcriteria[insertstatementindicatingwhichfinancialtestisbeingused]andagreestocomplywith allnotificationrequirementsasspecifiedin10CFRPart50.Theguarantorshallmeetoneofthefollowingtwofinancialtests:(a)(i)AcurrentratingofitsmostrecentbondissuanceofAAA,AA,A,orBBBasissuedbyStandardandPoor's,orAaa,Aa,A,orBaaasratedbyMoody's;

and(ii)Tangiblenetworthisatleast$10millionandatleastsixtimesthecurrentdecommissioningcostestimateorguaranteeamount(orprescribedamount ifacertificationisused);and 54AppendixB-6.5(iii)AssetslocatedintheUnitedStatesamountingtoatleast90percentofitstotalassetsoratleastsixtimesthecurrentdecommissioningcostor guaranteeamount(orprescribedamountifcertificationisused).or(b)(i)Networkingcapitalandtangiblenetwortheachatleastsixtimesthecurrentdecommissioningcostestimatesorguaranteeamounts(or prescribedamountifcertificationisused);and(ii)AssetslocatedintheUnitedStatesamountingtoatleast90percentofitstotalassetsoratleastsixtimestheamountofthecurrentdecommissioning costestimatesorguaranteeamounts(orprescribedamountifcertification isused);and(iii)Meetstwoofthefollowingthreeratios:aratiooftotalliabilitiestonetworthlessthan2.0;aratioofthesumofnetincomeplusdepreciation,depletion, andamortizationtototalliabilitiesthatisgreaterthan0.1;andaratioof currentassetstocurrentliabilitiesthatisgreaterthan1.5;and(iv)Tangiblenetworthofatleast$10million.4.Theguarantorhasmajoritycontrolofthevotingstockforthefollowinglicensee(s)coveredbythisguarantee.(Listforeachlicensee:name,address,thefacility(ies) ownedoroperatedbyeachlicensee,andthecorrespondinglicensenumber(s).]5.Decommissioningactivitiesasusedbelowreferstotheactivitiesrequiredby10CFRPart50fordecommissioningoffacility(ies)identifiedabove.6.Forvaluereceivedfrom[licensees](iftheguarantorisacorporation,add"andpursuanttotheauthorityconferredupontheguarantorby("theunanimous resolutionofitsdirectors"or"themajorityvoteofitsshareholders"),acertified copyofwhichisattached"),theguarantorguaranteestothe[insert"NRC"orthe nameoftheStateagency]thatifthelicenseefailstoperformtherequired decommissioningactivities,asrequiredbyLicenseNo.[insertlicensenumber],the guarantorshall(a)carryouttherequiredactivities,or (b)setupatrustfundinfavoroftheaboveidentifiedbeneficiaryintheamountofthesecurrentcostestimatesorguaranteeamountfortheseactivities.[If aStateisthenamedbeneficiary,theguaranteedocumentationshould includewrittenverificationfromtheStateagreeingtousethetrustfundsto carryouttherequireddecommissioningactivitiesforthenamed facility(ies).]7.Theguarantoragreestosubmitrevisedfinancialstatements,financialtestdata,andaspecialauditor'sreportandreconcilingscheduleannuallywithin90daysof thecloseoftheparentguarantor'sfiscalyear.

55AppendixB-6.58.Theguarantoragreesthatif,attheendofanyfiscalyearbeforeterminationofthisguarantee,itfailstomeetthefinancialtestcriteria,thelicenseeshallsendwithin 90daysoftheendofthefiscalyear,bycertifiedmail,noticetothe[insert"NRC" orthenameoftheStateagency]thatthelicenseeintendstoprovidealternative financialassuranceasspecifiedin10CFRPart50.Within120daysaftertheend ofthefiscalyear,theguarantorshallestablishsuchfinancialassuranceifthe

[licensee]hasnotdoneso.9.Theguarantoralsoagreestonotifythebeneficiarypromptlyiftheownershipofthelicenseeortheparentfirmistransferredandtomaintainthisguaranteeuntilthe newparentfirmorthelicenseeprovidesalternativefinancialassuranceacceptable tothebeneficiary.10.Theguarantoragreesthatwithin30daysafterbeingnotifiedbythe[insert"NRC"orthenameoftheStateagency]ofadeterminationthatitnolongermeetsthe financialtestcriteriaorthatitisdisallowedfromcontinuingasaguarantorforthe facilityunderLicenseNo.[insertlicensenumber],itshallestablishanalternative financialassuranceasspecifiedin10CFRPart50asapplicable,inthenameof

[licensee]unless[licensee]hasdoneso.11.Theguarantoraswellasitssuccessorsandassignsagreetoremainboundjointlyandseverallyunderthisguaranteenotwithstandinganyorallofthefollowing:

amendmentormodificationoflicenseorNRC-approveddecommissioningfunding planforthatfacility,theextensionorreductionofthetimeofperformanceof requiredactivities,oranyothermodificationoralterationofanobligationofthe licenseepursuantto10CFRPart50.12.Theguarantoragreesthatallboundpartiesshallbejointlyandseverallyliableforalllitigationcostsincurredbythebeneficiary[insertname]inanysuccessfuleffort toenforcetheagreementagainsttheguarantor.13.Theguarantoragreestoremainboundunderthisguaranteeforaslongas[licensee]mustcomplywiththeapplicablefinancialassurancerequirementsof10 CFRPart50,forthepreviouslylistedfacility(ies),exceptthattheguarantormay cancelthisguaranteebysendingnoticebycertifiedmailtothe[insert"NRC"orthe nameoftheStateagency]andto[licensee],suchcancellationtobecomeeffective noearlierthan120daysafterreceiptofsuchnoticebyboththe[insert"NRC"or thenameoftheStateagency]and[licensee]asevidencedbythereturnreceipts.14.Theguarantoragreesthatif[licensee]failstoprovidealternativefinancialassuranceasspecifiedin10CFRPart50,asapplicable,andobtainwritten approvalofsuchassurancefromthe[insert"NRC,"orthenameoftheState agency]within90daysafteranoticeofcancellationbytheguarantorisreceived bythe[insert"NRC"orthenameoftheStateagency]fromtheguarantor,the guarantorshallprovidesuchalternativefinancialassuranceinthenameof

[licensee]ormakefullpaymentundertheguarantee.

56AppendixB-6.515.Theguarantorexpresslywaivesnoticeofacceptanceofthisguaranteebythe[insert"NRC"orthenameoftheStateagency]orby[licensee].Theguarantor alsoexpresslywaivesnoticeofamendmentsormodificationofthe decommissioningrequirementsandofamendmentsormodificationsofthe

license.16.IftheguarantorfilesfinancialreportswiththeU.S.SecuritiesandExchangeCommission,thenitshallpromptlysubmitthemtothe[insert"NRC,"orthename oftheStateagency]duringeachyearinwhichthisguaranteeisineffect.Iherebycertifythatthisguaranteeistrueandcorrecttothebestofmyknowledge.Effectivedate:________________________

[Nameofguarantor]

[Authorizedsignatureforguarantor]

[Nameofpersonsigning]

[Titleofpersonsigning]

Signatureofwitnessornotary:______________________

57VALUE/IMPACTSTATEMENTAdraftvalue/impactstatementwaspublishedwiththepreviousdraftofthisguide,DG-1106,whenthedraftguidewaspublishedforpubliccommentinMay1989.No changeswerenecessarywhentheguidewaspublishedinitsfinalforminAugust1990, soaseparatevalue/impactstatementforthefinalguidehadnotbeenprepared.

However,adraftregulatoryimpactanalysishasbeenpublishedforpubliccommenton thecorrespondingproposedruleonDecommissioningTrustProvisions,whichincludes theimpactsofthisrevisedguideaswell.Theanalysisexaminesthecostsandbenefits ofthealternativesconsideredbytheCommission.Thedraftanalysisisavailablefor inspectionintheNRCPublicDocumentRoom,11555RockvillePike,Rockville,MD.

SinglecopiesoftheanalysismaybeobtainedfromBrianJ.Richter,OfficeofNuclear ReactorRegulation,U.S.NuclearRegulatoryCommission,Washington,DC20555-0001, telephone(301)415-1978,e-mailbjr@nrc.gov.

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