ML20129A382

Forwards Rule Package for Proposed Amends to 10CFR30,40,50, 51,70 & 72 Re Decommissioning Criteria for Nuclear Facilities.Proposed Amends Ready for Commission Action

ML20129A382
Person / Time
Issue date:	08/28/1984
From:	Minogue R NRC OFFICE OF NUCLEAR REGULATORY RESEARCH (RES)
To:	Dircks W NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
Shared Package
ML20129A330	List: ML20129A325 ML20129A336 ML20129A354 ML20129A382 ML20129A398
References
FOIA-EAT85-270 NUDOCS 8507270213
Download: ML20129A382 (131)

Text

n h een88

'o, UNITED STATES e

/ ,

o NUCLEAR REGULATORY COMMISSION

{. .E WASHINGTON, D. C. 20656

\,**- /

AUG 2 81984 14EMORANDUM FOR: William J. Dircks /

Executive Director far Operations FRCM: Robert B. Minogue, Director Office of Nuclear Regulatory Research

SUBJECT:

PROPOSED AMENDNENTS TO 10 CFR PARTS 30, 40, 50, 51, 70

• AND 72: DECOP. MISSION!NG CRITERIA FOR NUCLEAR FACILITIES RES has prepared amendments to the regulations concerning decomissioning criteria for nuclear facilities. The arrendments were concurred in by the Offices of State Programs, Administration, Inspection and Enforcement, Nuclear Reactor Regulation, and Nuclear Material Safety and Safeguards, and two meetings were held with the Committee to Review Generic Reouirements (CRGR). By my memo of August 20, 1984 to Victor Stello, it was indicated that recommendations on the amendments made by the CRGR have been incorporated into the rule package. Following CRGR review, the Office of the Executive Legal Director has indicated there is no legal objection. These proposed rule amendments are now ready for Commission action.

The enclosure contains the rule package consisting of the following items:

1. The Commission paper with an Appendix on financial assurance for utilities;

2. Federal Register Notice consisting of the supplementary information and the regulation amendments;

3. The Regulatory Analysis;

4. A Draft Congressional Letter;

5. A Draft Public Announcement.

fh f Robert 8. fiinogue, Director Office of Nuclear Regulatory Research

Enclosure:

as stated h M 3 850605 VANEATDB5-270 PDR

s ta IBUTION: RES RDG/ ALPHA CEBR RDG/SUBJ bcc: R. Minogue R. Page G.' Arlotto K. Steyer g/

D. Ross P. Erickson H. Denton J. Saltzman C. Mattsen J. Davis Z. Rosztoczy C. Feldman R. DeYoung J. Mapes F. Card 11e -

r V J W. Kerr R. Wood P. Norry W. Schwink AUG 2 81984 ', p V. Stello D. Sly e

N r,. Cunningham h 0"'

MEh0RANDUM FOR: k1111ar J. Dircks

• Executive Director for Operations

- FkON: Robert B. Minogue, Director Office of Nuclear Regulatory Research '

SUBJECl PRCPOSED AhEhDMENTS TO 10 CFR PARTS 30, 40, 60, bl. 70 - ,

AND 72: DECOMHISSIONIhc CRITERIA F0k WUCLEAR FACILITIES RES has prepared amendments to the regulations cor.cerntng decosar,1ssioning criteria for nuclear f acilities. The seensents were concurred in by the Offices of State Programs, Ada.inistration, Inspection and Enforcerent, Nuclear Reactor Regulation, and Nuclear Material Safety and Safeguards, and two meetings were held with the Coswittee to Review Generic Recuirements (CRGR). By my mese of August 20, 1984 to Victor Stello, it was indicated 3 hat recom endations on the amendeents made by the CNGR have been incorporated tn'to the rule package. Following CRGR review, the Office of the Executive -

Legal Director has inoicated there is no legal objection. These proposed

- rule acendments are now ready for Cowstssion action. .

The enclosure contains the rule package consisting of the following items:

1. The Consission paper with an Appendix on financial assurance for utilities;

2. Federal Register Motice consisting of the supplementary infonpation and the regulation ameneents;

3. The Regulatory Analysis;

4. A Draft Congressional Letter;

6. A Draft Pub 11c Announcerent.

Originals 4 M W 301337 B. gt:cWE Robert B. Minogue, Director Office of huclear Regulatory Research

Enclosure:

as s

) ./ )

'"'*** RES:CEBg RES:Cg ,, ,,GRESDh,j,,,,RENDD',,,,,,,,,hES:DM

, , , Eg: } ,,,

.C.ar.dileft

~~> .. R.BMino ue. . . ..G'Cu n ningh an).. ..F B..l11.nggu t

............h.....KGS tek.er ... . .V. -

../. ..rl Io, t..t.o 1~u DFR..o s.s/. s/ ._

.m> o ,en ,o h ,n t,o. , 4 s/2.7 /84 _ 8/ 6 84

i For: The Commissioners From: William J. Dircks, Executive Director for Operations

Subject:

PROPOSED AMEhDMEhTS TO 10 CFR PARTS 30, 40, 60, bl. 70, AND 72: DECOMMISSIONING CRITERIA FOR NUCLEAR FACILITIES

Purpose:

To obtain Commission approval to publish for public comment proposed amendments to 10 CFR Parts 30, 40, 50, 51, 70, and 72 setting forth technical and financial criteria for decommissioning nuclear facilities.

Category: This paper covers a minor policy cuestion reauiring Commission approval. Resource estimates: Category 1, prelimina ry.

Issue: Should financial assurance "for decommissioning be required and should more specific technical requirements for decom-missioning be codified.

Discussion: Background. In March 1978, the Commission announced in the Federal Register (43 FR 10370) its intention to reevaluate its decommissioning policy and to consider amending its regulations in this regard. Additionally, on June 22, 1979 (44 FR 36523) the Commission responded to a petition for rulemaking (PRM 50-22) concerning decommissioning financial assurance, filed by the Public Interest Research Group, et al. on June 5,1977, by granting that issues and funding alternatives raised by the petitioners would be considered within the context of this decommissioning rulemaking. The policy reevaluation included the development of an infor-mation base, a series of studies by Battelle Pacific Northwest Laboratories on the technology, safety and costs of decommissioning various types of nuclear facilities, and the preparation of a draft generic environmental impact statement (January 1981). Development of the data base is essentially complete. The staff believes it is appropriate at this time to publish a proposed rule setting forth decommissioning Contacts:

K. G. Steyer, RES, 443 7918 C. R. Mattsen, RES, 443-7910

r l \ ,

The Commissioners  ! criteria for nuclear facilities. This includes all facilities except waste disposal facilities which have been covered separately in Parts 60 and 61. Also, major decommissioning issues such as financial assurance are already covered for uranium mills by Appendix A of Part 40.

l Five major issues evolved from the policy reevaluation, namely, alternative methoos of decommissioning, timing, planning (at licensing and just prior to decommissioning), financial assurance, and acceptable levels of residual radioactivity for release of property for unrestricted use. More specific requirements and guidance are needed in these areas.

Additionally, in light of the information in the data base and the draft generic environmental impact statement and as a result of the requirements in the proposed amendments, it became apparent that environmental review requirements related to NEPA could be reduced. This proposed rule addresses all of these issues except that of residual radioactivity limits, which is being addressed in a separate rulemaking as an amendment to Part 20.

Proposed Regulations. In the areas of decommissioning alternatives and timing it is proposed that all alternatives be defined as leading to release of the site for unrestricted use and termination of license. Delays in attaining unrestricted release conditions would be limited to situations I

where there is a compensating benefit such as reduced occupational exposures.

Planning would be more completely specified both at the licensing stage and at the end of operation. Information on funding methods for providing financial assurance for decom-missioning would be submitted in applications for operating licenses and by existing reactor licensees within two years of the effective date of the rule. This information would show how reasonable assurance of funds for decommissioning -

will be provided, and would be in the form of a funding plan proposing an appropriate level of assurance based on a cost estimate for the particular facility or, in the case of power reactors, may consist of a certification of financial assurance in a prescribed amount proposed at 5100 million using a funding method acceptable to the Comission.

For those materials facilities where major decomissioning costs are likely, financial assurance for decomissioning would also be required. Applicants and licensees (within one year) would be required to submit either a certification of financial assurance in a prescribed amount or a funding plan showing reasonable assurance of funas for decomissioning. Certain of these licensees, specified in the rule by types and cuantities of materials, would be required to submit a funding plan rather than the certification at the time of license renewal to better assure that the funding level is appropriate for the specific facility.

i ,

The Commissioners .

All licensees would be required to keep records of information important to cecomissioning in order to minimize both the costs and health and safety impacts of decomissioning.

Under the proposed amendment, decommissioning plans would be submitted at the end of operation by Part 50 and 72 licensees whether or not the actual dismantling is to be delayed. Thus, decommissioning alternatives involving delay could be used only with Commission approval.

Under the existing regulations, the ultimate disposition need not be planned at the end of operation. Reactors can be put into " storage" Indefinitely, normally with an amendment to " possession-only" status; plans are then submitted only when the licensee desires to dismantle.

Under the proposed amendments, a safe storage period would still be allowed when appropriate and in this case more detailed plans and specifications for the actual dismantlement procedure could still be deferred until needed. (These could be considered an addendum to the decomissioning plan and the timing for this would be spelled out in the plan.) The proposed rule also codifies in more' detail the contents of decomissioning plans. In Parts 30, 40, and 10 plans for decomissioning would be required only when a significant health and safety question may exist.

A means of providing financial assurance for decomissioning will be provided by a decomissioning funding plan or a certification of financial assurance. A number of acceptable methods are specified in the proposed rule amendments with some differences for utility licensees versus non-utility licensees. While it is believed that these methods provide reasonable assurance that licensees will have funds available when needed to perfom decommissioning, they oc not create a -

lien on the property or constitute an absolute guarantee that protected priority money will be available solely for the purpose of decommissioning. A regulatory guide is being prepared which will identify various types of responsible organizations, sucn as, for example, chartered banks and licensed insurance companies, with which financial assurance arrangements acceptable to the Commission may be made. The guide also indicates how cost estimates submitted as part of a funding plan can be based on generic studies adjusted for facility specific differences such as reactor size, local labor costs, and differing waste disposal charges and cost of energy. The issue of which specific funding methods should be allowed for utilities has been of particular interest and is discussed in an Appendix for Comission information.

The draft Federal Recister Notice includes a specific request for coments on this issue as well as on the issue of whether to include the option of providing financial assurance in a prescribed amount.

e .

The Commissioners The proposed rule would reduce specific environ $ ental review requirements in the area of decommissioning. Decommis-sioning of reactors and certain materials facilities would no longer recuire environmental impact statements. Instead, in accordance with the procedures in revised Part bl. an environmental assessment woulo be prepared which would supplement the environmental impact statements previously prepared in connection with the issuance of the construction permit or operating license for the facility. Although this environmental review procedure is expected to accommodate most decommissioning actions, it should be noted that unoer the criteria in revised Part 51 an environnental assessment may result in a conclusion that an environmental impact statement is recuired in the particular circumstances of the

' proposed Federal decommissioning action. (Environmental impact statements would continue to be reautred for the decommissioning of waste disposal fac111 ties only.)

Information on environmental impacts would be submitted by '

licensees as a supplement to previously submitted environ-mental reports.

Resource Recuirements The proposed rule will have some impact on manpower needs in NRR, NMSS, the Regions, SP, IE, anc RES. Because the rule woulo provide for more efficient and effective licensing action at the time of decommissioning and reduces some requirements for environmental reviews, the overall net change in manpower needs as a result of this rule if made effective is estimated to be insignificant over the long term. The nest significant impact on resource reautrements is the review of decommissioning funding plans for existing licensees. This is estimated to involve approximately 5 man-years effort per year over a 2-5 year period following the effective date of the final rule (24 man-years total), these responsibilities being in NRR, NMSS, the Regions, and SP (SP will review funding methods for reactors and say provice assistance to hMSS or the Regions in this area).

In addition, a number of regulatory guides are planneo to be published in connection with this rule. Updating of the information base which aids in the development and review of decommissioning cost estimates is also planned. This would reautre manpower in RES, NRR, and hMSS, a continuation of the present level for these activities of 6 man-years per year over the next few years. Even if no additional rules or regulatory guides were to be published resource requirerents related to decornissioning would increase in the future as more major facilities reach the end of operating life.

l

The Comissioners .

Recomendations: That the Comission

1. Approve publication of a notice of the proposed amendments in the Federal Register (Enclosure A);

2. Note:

(a) The notice of proposed rulemaking in Enclosure A will be published in the Federal Registy with a 90-day coment per100.

(b) A preliminary analysis has been made on the impact of the proposed rule, if adopted, on small entities. It is not expected that there will be a significant impact on a sub-stantial number of small entities. However, since definitive information is not available, coment will be reouested specifically of srall entities. The Chief Counsel for Advocacy of the Small Business Administration will be informed of the rule and the analysis of

. impacts on small entities.

(c) A draft generic environmental impact statement .

(DGEIS), NUREG-0586, was published in January 1981 and made available for public coment in February 1981 (46 FR 11666). The proposed rule reflects coments received on the DGEIS.

(d) The Agreement States have reviewed a draft of the proposed rule and will be informed when the proposed rule is published. The final rule will be made a matter of compatibility for Agreement States.

(e) The Subcomittee on huclear Regulation of the Senate Comittee on Environment and Public korks, the Subcomittee on Energy and the Environment of the House Interior and Insular Affairs Comittee, the Subcomittee on Energy Conservation and Power of the House Energy and Comerce Comittee, and the Subcomittee on Energy, huclear Proliferation and Government Processes of the Governn. ental Affairs Committee will be informed of the Comission's action by letter such as Enclosure C.

q

The Commissioners (f) This proposed rule amends information*

requirements that are subject to the Paperwork Reduction Act of 1980 (44 U.S.

C. 3501 et sec.). The proposed rule has been submitted to DMB for review and approval of the information collection requi rements.

(g) The Federal Reoister notice of proposed rulemaking will be distributed to affected ~

licensees and other interested parties.

(h) A public announcement, such as Enclosure D, will be issued at the same time the notice of proposed rulemaking is published in the Federal Reoister.

(1) A copy of the proposed rule was provided to the ACRS for their information. The ACRS indicated that they did not need to review the proposed rule.

Scheduling: If scheduled on the Commission agenda, recommend this paper be considered at an open meeting. No specific circumstance is known to staff which would require Commission action by any particular date in the near term.

William J. Dircks Executive Director for Operations

Enclosures:

"A" - Federal Reflister Notice "B" - Draf t Regu' atory Analysis "C" - Draft Congressional Letter "D" - Draft Public Announcement

APFthulX DISCUS $10N OF METHODS OF FINANCIAL ASSURANCE FOR DECOMMISSION!hG ALL0kED FOR ELECTRIC UTILITY LICENSEES The methods of providing financial assurance fall into three general types : (1) deposit of funds (either at startup or over plant Itf e) into accounts separate from 11censee assets and control; (2) holding of funds by the licensee as part of his assets and under his control, referred to as internal reserves; or (3) some form of guarantee of funds such as insurance or surettes.

The following are the major options considered with regard to funding requirements for electric utility licensees:

A. Permit licensees to use only those methods in which deposits are in accounts separate from licensee control, or guarantee methods (types I and 3 noted above);

8. Same as Option A, except that methods allowing accounts to be under licensee control (type 2) are also permitted for most utilities (i.e., not including utilities owning only a single generating facility).

Permitting the licensees to use only those methods indicated in Option A is considered to provide better assurance of availability of funds since those methods are not subject to problems which may occur with a utility's finances.

However, under most assumptions, use of the additional method permitted in Option 8 is less expensive by between a factor of 2 and 3 because a utility can usually earn more from its own capital structure than by investing in higher grade comercial securities outside the company. The recent promulgation of 10 CFR 50.54(w) which reovires that electric utilities maintain insurance for post-accident decontamination increases confidence in utility financial viability even under the severe circumstances of an accident.

In addition, it was concluded by a recent consultant study that even if the extreme levels of financial stress currently being experienced by some utilities were to exist at the time a utility needed to decommission a reactor, the assets of the utility would be more than sufficient to cover decommis-sioning costs. These factors, coupled with capability of utilities, in general, to recover costs of providing electricity from their consumers, leads to the conclusion that an internal reserve also provides reasonable assurance and is more cost effective. Thus, the staff recommends Option B and has included in the proposed rule internal reserve as an acceptable funding method for utilities owning more than one generating facility.

In addition to the above, if a utility licensee proposes to delay completion of decommissioning, there is the duestion of what funding methods should be permitted by NRC for maintaining a decommissioning fund during a long ters (30 years or more) decommissioning storage period. There are three major options for consideration:

o .

2

1. Permit licensees to use the methods listed in A above;

2. Permit licensees to use the methods listed in B above;

3. Leave the acceptability of funding methods during long term storage for case-by-case determination, thus permitting use of internal reserve if it can be shown to provide reasonable assurance.

Option 2 is not advisable because case-specific consideration may be important before internal reserve is permitted for a long period after the end of operation when the reactor is no longer producing revenue. Option 3 allows the Commission flexibility to consider case-specific information. Internal reserve may provide an adeouate level of assurance in some cases and potentially at a lower cost. However, significantly more administrative ef fort would be required on the part of Coceission staff than with Option 1. Questions relatea to financial cualifications may have to be considered, although the Commission is eliminating all review of financial cualifications for utilities at the

operating license stage. Also, periodic review of funding during the storage I period would have to include reconsideration of the adequacy of the internal 1

reserve method. Since funds (or credited accounts) for decommissioning would have already been collected during reactor operation, it appears reasonable to eliminate internal reserve specifically in the regulations for a long term decommissioning period. Thus, Option 1 is recommended, since a higher level of assurance will be provided with less administrative effort.

I i

i d

l II APPENDIX

(7590-01]

NUCLEAR REGULATORY C0tNISSION 10 CFR Parts 30, 40, 50, 51, 70, and 72 ,

Decommissioning Criteria for Nuclear Facilities AGENCY: Nuclear Regulatory Commission.

ACTION: Proposed rule.

SutMARY: The Nuclear Regulatory Commission is proposing amendments to its regulations that would set forth technical and financial criteria for decommissioning licensed facilities. The proposed amendments address decommissioning planning needs, timing, funding mechanisms, and environ-mental review requirements. The intent of the proposed amendments is to assurethatdecommissioningofalllicensedfacilitieswillbe$ccomp-j lished in a safe and timely manner and that adequate licensee funds

! will be available for this purpose. The proposed ruJe also contains a response to a petition for rulemaking (PRM-50-22), concerning decommis-sioning financial assurance, initially filed by the Public Interest Research Group (PIRG), et al. on July 5, 1977.

DATE: Comments must be received on or before (insert a date to allow 90 days for public comment]. Comments received after this date will be considered if it is practical to do so. Assurance of censideration is possible only if comments are received on or before this date.

ADDRESSES: Submit written comments to the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555, Attention:

Docketing and Services Branch. Copies of comments received and the generic environmental impact statement may be examined in the Commis-sion's Public Document Room at 1717 H Street NW., Washington, DC.

l 8/17/84 1 Enclosure A

[7590-01]

FOR FURTHER INFORMATION CONTACT: Keith G. Steyer or Catherine R. Mattsen, Office of Nuclear Regulatory Research, U.S. Nuclear Regulatory Commission, Washington, DC 20555, telephone (301)443-7910. .

SUPPLEMENTARY INFORMATION:

Background

On March 13, 1978, the Commission published an Advance Notice of Proposed Rulemaking in the Federal Register [43 FR 10370] stating that the Commission was reevaluating its decommissioning policy and consider-ing amendments to its regulations to provide more specific requirements relating to the decommissioning of nuclear facilities. The plan for the reevaluation included the development of an information base and the preparation of a generic environmental impact statement (GEIS), and based on these, the development of proposed amendments to the regulations.

The information base for rulemaking is essentially complete and consists primarily of a series of NUREG/CR reports on studies of the technology, safety, and costs of decommissioning various kinds of nuclear facilities.

l These reports were prepared by Battelle Pacific Northwest Laboratories

! . (PNL).1 On February 10, 1981, the Commission announced the availability i

of the draft GEIS for public comment [46 FR 11666]. Section 15 of the draft GEIS recommends certain policy considerations. These recommenda-tions, as modified by comments received on the draft GEIS and other sources, provide the basis for the proposed amendments to the Commission's regulations. .The proposed amendments cover a number of topics related to decommissioning. However, acceptable levels of residual radioactivity for release of property for unrestricted use are not being proposed as part of this rulemaking. This issue will be dealt with in a separate rule-making action which will propose amending 10 CFR Part 20 to specify limits of residual radioactivity for decommissioning.

2A bibliography of th':se reports and other background documents is included at the end of the si,wlementary information. These documents are avail-able for inspection und copying for a fee in the Commission's Public Docu-ment Room at 1717 H Street NW, Washington, DC 20555.

8/17/84 2 Enclosure A

[7590-01]

In the course of this reevaluation, the staff has maintained a dialogue with the States and the public during the early, formative time of decisionmaking on critical issues. Preliminary staff positions on the major decommissioning issues have been presented in staff (NUREG)

{

reports.2 ,

l Decommissioning as defined in this proposed rule means to remove nuclear facilities safely from service and reduce residual radioactivity to a level that permits release of the property for unrestricted use and temination of license. For the purposes of this proposed rule, the term ' nuclear facilities' is used to refer to the site, buildings and contents, and equipment associ-ated with any NRC licensed activity.

Decommissioning activities are initiated when a licensee decides to terminate licensed activities. If nuclear facilities are to be reused for nuclear purposes, applications for license renewal or amendment or for a new license are submitted according to the appropriate existing regulation. Reuse of a nuclear facility for other nuclear purposes is

not considered decommissioning.

These proposed amendments apply to decommissioning of power reactors,

. nonpower reactors, fuel reprocessing plants, fuel fabrication plants, uranium hexafluoride production plants, independent spent fuel storage installations, and non-fuel-cycle nuclear facilities. The decommission-ing of uranium mills and mill tailings, low-level waste burial facilities, or high-level waste repositories, has been treated in separate regulatory actions. However, the general technical criteria in this proposed rule will apply to uranium mills in addition to the technical and financial criteria contained in Appendix A of Part 40.

The proposed amendments apply to nuclear facilities that operate through their normal lifetime, as well as to those that may be shut down prematurely. It is expected that nearly all facilities will operate through their normal lifetime. However, the activities following prema-ture shutdown of a facility as a result of an accident are somewhat different than those of a routine decommissioning. There are three stages involved: a stabilization period, during which accident condi-tions are brought under control if necessary; an accident cleanup period; ZIbid.

8/17/84 3 Enclosure A

(7590...

and a decommissioning period. During the accident cleanup, the major portion of contamination resulting from the accident is cleaned up and the associated wastes are processed. Following accident cleanup, the facility may either be recovered for reuse or be decommissioned. A detailed study of reactor decommissioning following accident cleanup (NUREG/CR-2601 - Reference 7) indicated that there may be differences in some of the specific aspects of decommissioning such as the spread of contamination, waste volumes, exposures, and costs. However, the report also indicates that the technology exists to accomplish the decommis-sioning and that the safety and costs of decommissioning following the .

accident cleanup do not vary significantly from that following normal operations.

Current regulations cover the requirements and criteria for decom-missioning in only a limited fashion. Although decommissioning is not an imminent health and safety problem, specific requirements related to decommissioning have had to be determined on a case-by-case basis.

Revision of current regulations is necessary to clarify these require-ments and to provide for consistent and efficient regulatory actions related to decommissioning. The necessary amendments could be issued as a new part of the Commission's regulations. However, the policy devel-oped as a result of the reevaluation will directly affect licensing activities under 10 CFR Parts 30, 40, 50, 51, 70, and 72. Accordingly, amendments to each of these parts, rather than a new part, will facili-tate use by NRC staff and licensees.

Classes of facilities licensed under Parts 50 and 72 are considered major facilities all of which will require a significant decommissioning effort. Activities licensed under Parts 30, 40, and 70, however, cover a wide range. Termination of the majority of these licenses requires relatively simple decommissioning procedures. For these reasons it was necessary to take a somewhat different regulatory approach in these parts to implement the same generic policy.

Description of Policy and Proposed Rule Five major issues evolved from the policy reevaluation, namely, decom-missioning alternatives, timing, planning, financial assurance, and resi-dual radioactivity. In addition, it became apparent that environmental l

8/17/84 4 Enclosure A

[7590-01]

review requirements could be reduced. These subjects are discussed in the following paragraphs.

A. Decommissionino Alternatives More than one alternative method of decommissioning may be acceptable depending on the type of radioactive contamination present at shutdown and other factors. The proposed rule indicates that use of alternatives in which unrestricted release is postponed for a significant period of time following cessation of operations would be acceptable in cases where sufficient benefit results. Possible benefits include such things as reduction in occupational exposure or waste volume. Alternatives and factors affecting their acceptability will be dealt with in a revision of Regulatory Guide 1.86 on termination of licenses for nuclear reactors, and in a similar document to be developed for materials facilities.

The alternatives considered are essentially the same as those which have been used in the past except that they have been redefined to include all activities leading to termination of license in keeping with the defini-tion of decommissioning contained in this proposed rule.

B. Timina Timing refers to the length of the decommissioning period, that is, the time from permanent cessation of operations to license termination.

Each type of nuclear facility has characteristic radionuclides that will affect the selection of the decommissioning alternative and the length of time acceptable to delay license termination. These proposed rules require that decommissioning begin shortly after permanent cessation of operations i and significant delays in completion of decommissioning would be accept-able if there is sche compensating benefit. Beyond this, factors affecting timing will be considered in the related regulatory guides to be issued, since the acceptability of alternatives and overall timing may involve i case-by-case considerations.

C. Plannina Preliminary planning at the licensing stage and over facility life is important to ensure that decommissioning can be accomplished safely.

Information on funding methods for providing financial assurance for 8/17/84 5 Enclosure A

- - . . . ~ . - - - - . .- . - - - ._ - . . - _.. - - - - . - - . _ - - _ . -

[7590-01]

decommissioning will be submitted with applications for new licenses for production and utilization facilities. For existing licenses under Part 50, this information will be submitted within a reasonable period

~

of time after the rule becomes effective. The time period suggested in thispgpgedruleistwoyears. This information will consist of a costhfordecommissioningeitherasprescribedintheregulationsoras estimated by the applicant or licensee and a description of the method of assuring funds for decommissioning. Applicants for independent spent fuel storage installation (ISFSI) licenses will include plans for providing financial assurance for decommissioning in a decommissioning plan submitted at licensing as is currently required.

Similarly, some material licensees licensed under Parts 30, 40, and 70 will either provide financial assurance in prescribed amounts or submit a decommissioning funding plan showing the basis for a proposed amount. Details of financial assurance requirements are discussed in the next section.

Licensees under Parts 30, 40, 50, 70, and 72 will be required to keep records which could be important at the time of decommissioning.

Applicants and licensees should also consider other aspects of operating procedures as well as design features which could facilitate decommissioning as part of overall programs to protect the health and safety of the public and to keep radiation exposures and effluents "as low as reasonably achievable," however, no specific requirements would be added to the regulations.

l Decommissioning plans will be submitted by all Parts 50 and 72 licensees at the time of written notification that the licensee desires to terminate the license as is the current licensing practice. This proposed rule would require that this notification be made within two years following permanent cessation of operation or one year prior to license expiration, whichever occurs first. For Part 50 licensees, the present practice would continue of also applying for an amendment to restrict operation of the facility, thus changing the operating license to what is referred to as a " possession only" license, under which required controls and limits are modified as appropriate to planned procedures.

Licensees under Parts 30, 40, and 70 engaged in activities resulting in 8/17/84 6 Enclosure A i

[7590-01]

major decommissioning considerations will also submit plans for comple-tion of decommissioning. These will be required if a potential for significant health and safety impacts exists and will be submitted promptly after the end of operational activities and prior to the license expira-tion date. Decommissioning plans will contain sufficient detail to demonstrate that decommissioning can be accomplished safely. Major elements of decommissioning plans are specified in the proposed rules. Additional guidance will be made available in planned regulatory guides on standard format and content of decommissioning plans.

In addition to specifying decommissioning plans, other amend-ments related to license termination are proposed for Parts 30, 40, and 70 primarily for clarity and uniformity. These changes would somewhat modify the procedures established for the termination of a license contained in a final rule published on July 15, 1983 (48 FR 32324). The requirement for notification of intent to terminate contained in existing paragraph (c) of $$ 30.36, 40.42, and 70.38 will be removed.

Although it may be practical in most cases for operational activities to cease and initial cleanup and survey to be completed at least 30 days prior to license termination, the requirement as it exists may result in licensees submitting a separate notification of intention not to renew 30 days prior to expiration plus the submission of information concerning residual contamination sometime in the next 30 days. This separate notification is not considered necessary.

Additional modifications to the requirements contained in existing paragraphs (d)(2) and (3) of $$ 30.36, 40.42, and 70.38 are made to insert the standard for submission of decommissioning plans and to clarify -- ,

1. That, whether or not the licensee has detected residual radio-activity, the licensee is responsible for controlling the site until the Commission terminates the license; and

2. That, in all cases, the same standards for termination of license apply, as stated in proposed paragraph (f) of 95 30.36, 40.42, and 70.38:

that radioactive material has been properly disposed of, reasonable effort

, has been made to remove any residual contamination, and information exists which demonstrates that the premises are suitable for release for unre-i stricted use.

i 8/17/84 7 Enclosure A

i

[7590-01]

D. Financial Assurance The objective of the proposed rule on financing the decommissioning of nuclear facilities is to require licensees to provide reasonable assur-ance that adequate funds are available to ensure that decommissioning can be accomplished in a safe manner and that lack of funds does not result in delays that may cause potential health and safety problems. The licensee is responsible for completing decommissioning in a manner that protects health and safety. At this time the Commission wishes to make clear that the issues raised by the recent decision of the U.S. Court of Appeals for the District of Columbia Circuit in New England Coalition on Nuclear Pollution, et al. v. Nuclear Regulhtory Commission et al., No. 82-1581 (D.C. Cir, February 7,1984), which invalidated the Commission's rule respecting the financial qualifications of electric utilities, fall outside the scope of this rulemaking proceeding. As explained in the preamble of the financial qualifications rule (47 FR 13750, March 31, 1982), it was the Commission's intent to consider the issue of .

financial requirements for decommissioning separately in the context of a generic rulemaking proceeding on decommissioning.

There are several different methods for providing financial assurance.

Because of the variety of facility types and licensee financial situations, different methods are considered acceptable for providing reasonable assur-ance of the availability of funds. The funding methods specified in the proposed rule meet the criteria respecting assurance and cost which are described more fully under the subject heading " Criteria for Funding

. Methods." Although the provisions of the proposed rule do not preclude review of financial qualifications of a licensee with respect to the ability of the licensee to provide adequate funds to perform decommission-ing, it is expected that review of a licensee's qualifications will not be necessary if the licensee elects a funding method specified as accept-able in S 50.33(k). Paragraph 50.33(f) is amended for clarity only.

Information on funding methods will be provided by all applicants for operating licenses and existing licensees for production and 8/17/84 8 Enclosure A

L 7M0-01] .

1 utilization facilities. For electric utility applicants and licensees, 4

the amount of funds assured can be based either on an amount prescribed in the regulations, proposed to be $100 million,a or on a facility-specific cost estimate. Plans for financial assurance for decommis,sioning are already required for independent spent fuel storage installations.

! Certain applicants and existing licensees under Parts 30, 40, and i

70 will also be required to submit a decommissioning funding plan. The rule specifies that funding plans will be required of licensees author-

, ized to use unsealed materials of half-life greater than 120 days in j quantities exceeding 105 times the applicable quantities in Appendix C of Part 20. The note to Appendix C concerning the " rule of ratios" used

, for purposes of 6 20.303 is not applied in this case. For the purposes of this requirement, plated foils would not be considered unsealed material.

In Part 40, the funding plan requirement applies to licensees authorized to use more than 10 mci of source material in a readily dispersible form.

If the license aut.horizes processing of materials, although initially sealed or non-dispersible, the processing would be assumed to result in unsealed or readily dispersible material. These licensees will have the

.following options: (1) submitting the funding plan within one year ~

following the effective date of the final rule or (2) submitting a certi'-

fication of financial assurance for decommissioning in an amount of at-least $500,000, within one year of the effective date of the final rule, deferring the funding plan until application for renewal is made. Finan-cial assurance requirements for mills are contained in Appendix A to .

Part 40 and are not covered by this proposed rule.

Certain other materials licensees will be required to submit either a certification that a means of assuring funds in a prescribed amount has been provided or a decommissioning funding plan. Licensees using between 104 and 10s times Appendix C values of unsealed byproduct or special nuclear material must provide assurance of funds in the amount of

$500,000s or submit a decommissioning funding plan. Licensees using between 108 and 104 times Appendix C values of unsealed byproduct or

.special nuclear material or between 10 mci ~and 100 mci of source material in readily dispersible form must provide assurance of funds in the amount of $100,0008 or submit a funding plan. Licensees using sealed sources 4 3The bases for selecting this prescribed amount and those noted below for materials facilities are described more fully under the subject 'neading

" Mechanisms for Requiring Financial Assurance."

j 8/17/84 9 Enclosure A

U.4-01] ~

containing byproduct material in quantities exceeding 1010 times Appen-dix C values must provide assurance of funds in the amount of $50,0008 or submit a funding plan.

This proposed rule specifies acceptable funding method's in the appropriate sections for various types of licensees. In order to assure that the funds will be adequate at the time of decommissioning, the pro-posed rule provides that decommissioning funding plans include provisions for adjusting cost estimates and associated funding levels over the life of the facility. Additional guidance on financial assurance is also planned to be provided in regulatory guides.

At the time of final shutdown, or cessation of operations, decom-missioning plans, when required, will provide an updated, more accurate cost estimate, and some adjustment may need to be made in the decom-missioning fund. Parts 50 and 72 specifically state that if an alter-native is chosen which significantly delays completion of decommissioning, means must be included to continue periodic review and adjustment of funding level over the extended decommissioning period. In Part 50,

- where internal reserve is allowed for utilities during operation, it is specifically required that the funds be placed in an account separate '

from licensee assets during the prolonged deconnissioning period or that assurance be provided by a surety or insurance method.

E. Residual Radioactivity A primary objective after permanent cessation of operations is authorized termination of a license. For all facilities covered by this

! rule, all premises must be suitable for release for unrestricted use before a license can be terminated. To release property for unrestricted

! use a permissible level of residual radioactivity must be established.

These levels are not proposed in this rule, but are being developed in j a separate rulemaking action. In the past, limits have been provided as guidance in such documents as Regulatory Guide 1.86, and have sometimes been determined on a case-by-case basis.

4 l

8/17/84 10 Enclosure A  !

_--w- - - , -,,-e --.,. y---,__.,_ _,,,_.,,.__y___..,__m_,,w _,-,,,w,._,,_-,,,,_, , , _ , _ _ _ . - , , , . - _ , , . _ _ . , , - . , _ , _ , , . - - . . - . , . . _ , - . - . - , _ - _ . - , , , , . _ , - ,w___,_,. -..

[7590-01]

F. Environmental Review Requirements

'The proposed rule would reduce the environmental review requirements j (National Environmental Policy Act of 1969, as amended) relAted to decom- l missioning by amending Part 51.

The overall impacts of decommissioning would continue to be addressed l

in the environmental reviews for the licensing of major facilities. No additional detail would specifically be required. Except to the extent required by special circumstances, preparation of environmental impact statements for the decommissioning of production and utilization facili-ties and independent spent fuel storage installations would no longer be required. Instead, in a::cordance with the procedures in the recently revised Part 51 of the Commission's regulations, an environmental assess-ment would be prepared. This environmental assessment would supplement the environmental Impact statements previously prepared in connection with the issuance of the construction permit and operating license for the facility. It should be noted that pursuant to criteria in revised 10 CFR Part 51 environmental assessments may result in a conclusion that an environmental impact statement is required in the particular circum-stances of the proposed Federal action. Information concerning environ-l mental impacts of decommissioning would be submitted by the licensee in a supplement to environmental reports previously submitted. Environmental impact statements would continue to be required for the decommissioning of waste disposal facilities only.

The proposed rule also indicates that there would be no additional environmental review requirements connected with the new decommissioning requirements, specifically, that approval of decommissioning funding plans be categorically excluded from requirements for environmental impact statements or environmental assessments.

Rationale for the Proposed Rule Chances A. Decommissionina Alternatives Decommissioning alternatives are categorized into three major classi-fications which are referred to as DECON, SAFSTOR, and ENTOMB. This terminology was introduced to reduce the confusion and misunderstanding 8/17/84 11 Enclosure A

[7590-01]

I that existed with the previous terms used to designate decommissioning alternatives. These terms have the following meanings:

DECON is the alternative in which the equipment, structures, and portions of a facility and site containing radioactive contaminants are removed or decontaminated to a level that permits the property to be released for unrestricted use shortly after cessation of operations.

SAFSTOR is the alternative in which the nuclear facility is placed and maintained in such condition that the nuclear facility can be safely stored and subsequently decontaminated (deferred decontamination) to levels that permit release for unrestricted use.

ENTOMB is the alternative in which radioactive contaminants are encased in a structurally long-lived material, such as concrete. The.

entombed structure is appropriately maintained and continued surveil-lance is carried out until the radioactivity decays to a level permit-ting unrestricted release of the property. This alternative would be allowable for nuclear facilities contaminated with relatively short-lived radionuclides such that all contaminants would decay to levels permissible for unrestricted use within a period on the order of 100 years.

Based on an analysis of the technical data base, decommissioning can be accomplished safely and at reasonable cost shortly after cessation of facility operation. DECON has certain benefits in that it would prepare the property for unrestricted use in a much shorter time period than j SAFSTOR or ENTOMB with acceptable effects on occupational and public health and safety. Completing decommissioning and releasing the property for unrestricted use eliminates the potential problems that may result from an increasing number of sites contaminated with radioactive material, as well as eliminating potential health, safety, regulatory, and economic problems associated with maintaining the nuclear facility.

Delay in the completion of decommissioning, as in the case of SAFSTOR or ENTOMB, would be acceptable primarily for reasons of occupa-tional health and safety, since it is recognized that with delay there will be reduction in occupational dos'e and radioactive waste volume for some nuclear facilities due to radioactive decay. In addition, SAFSTOR may have some advantage where there are other operational nuclear facili-I ties at the same site, and may also become necessary in other cases if there is a shortage of radioactive waste disposal space offsite. The 8/17/84 12 Enclosure A 1

[7590-01]

appropriate delay will depend on the type of facility and the contaminant isotopes involved, but should not be greater than about 100 years as this is considered a reasonable time period for reliance on instJtutional con-trol (Ref. 19). One of the difficulties with ENTOMB for any complex struc-ture such as a reactor is that the radioactive materials remaining in the entombed structure would need to be characterized well enough to be sure that they will have decayed to acceptable levels at the end of the surveil-lance period (up to about than 100 years). If this cannot be done ade-quately deferred decontamination would become necessary, which could make ENTOMB more difficult and costly than DECON or SAFSTOR.

B. Timing The issue of timing concerns what amount of time would be appro-priate to allow for completion of decommissioning including the entire period between final shutdown and license termination. The primary consideration is the decay of radioactivity which may result in reduc-

. tions in occupational exposure and waste needing disposal. Facilities differ regarding the particular radionuclides most critical to decom-missioning. For light water power reactors Co-60, with a half-life of 5.3 years, is the nuclide that has the most effect on decontamination efforts and is referred to as the critical / abundant nuclide. Other isotopes that can affect decommissioning efforts are Cs-137 (30 year half-life) and the long-lived isotopes Nb-94 and Ni-59.

As discussed above, a review of the technical data base shows that, for DECON, occupational exposure can be kept reasonable. For example, studies indicate that occupational doses fram decommissioning light water power reactors would be about 400 man-rem per year (1200-1900 man-rem over l

4-5 years for large reactors). This is generally less than current annual doses at operating reactors. SAFSTOR will result in reduced occupational dose and amount of radioactively contaminated waste. Based on the half-life of the critical / abundant nuclide, the reduction of occupational doses beyond about 30 years would be marginally significant although a signifi-l cant volume reduction in contaminated waste would result from 50 years in safe storage. It appears that DECON or 30 to 50 year SAFSTOR are reasonable options for decommissioning a light water power reactor. Generally for reactors, the overall impact of either of these alternatives is similar, l

8/17/84 13 Enclosure A I

e - - - - - - -, ,- -- ,,---,,,,-,,,,,g ,, - - _ - , , - _ p,

[7590-01]

l with the lower occupational dose and wastes with SAFSTOR compensating for the costs and uncertainties of controlling the site for a long period.

The choice of alternative in individual cases will depend on a number of factors specific to the particular reactor, site, and time of decommission-ing, for example, a longer SAFSTOR period may be acceptable if the safety of an adjacent reactor might be affected by dismantlement procedures.

With regard to the ENTOMB alternative, long-lived activation products contained in reactor internals, such as Nb-94 and Ni-59, would probably preclude the use of ENTOMB for power reactors unless reactor internals were removed. If reactor internals are removed, some method would have to be provided to demonstrate that the entombed radioactivity will decay to levels permitting release of the property for unrestricted use within about 100 years, which, as noted above, would be difficult.

For testing facilities and ISFSIs, occupational doses'would be much less significant and much easier to manage than for power reactors. Thus, DECON is considered the most reasonable option. SAFSTOR could be justified in some cases. ENTOMB is not expected to be viable for ISFSIs and is also unlikely to be a reasonable option for testing facilities as the cost would not be justified.

For materials facilities associated with licenses under Parts 30, 40, and 70, occupational doses are also quite low in most cases, and DECON the most likely option. SAFSTOR is possible for short-lived materials, but any extended delay would rarely be justifiable. .For these reasons the proposed amendments to Parts 30, 40, and 70 do not mention alternatives or have special requirements for extended Celays.

If after disposing of inventory and some preliminary decontamination, contamination from relatively short-lived materials is reported, the Commission will determine whether allowing a period for decay is an appropriate means of completing decommissioning. It is expected however that for most licenses under these parts it will be practical to complete decontamination to levels suitable for unrestricted release prior to reporting levels of residual radioactivity to the Commission. A survey must be carried out and reported on promptly after the end of operations and prior to the expiration of the license.

8/17/84 14 Enclosure A

[7590-01)

C. Planning Planning for decommissioning is a critical item for ensuring that the decommissioning activities can be accomplished in a safe and timely manner. Development of detailed plans at the application stage is not possible because many factors (e.g., technology, regulatory requirements, economics) will change before the license period ends. Thus, most of the planning for the actual decommissioning will occur near final shutdown.

However, a certain amount of preliminary planning should be done at the application stage.

4 Preliminary Planning The availability of adequate funds is important in assuring that decommissioning will be carried out in a safe and timely manner. There are also aspects of design and operations that could affect decommission-ing in tems of improved health and safety and reduction in the amount of radioactive waste.

Information on decommissioning funding methods, described below, will be submitted with an application for an operating license for a production or utilization facility. An application for an independent spent fuel storage installation will include a decommissioning plan -

] including financial plans as is presently required. In the case of

. existing Part 50 licensees, information on funding methods would need to be submitted within a reasonable time period following the effective date of this rule. This information will be provided in the form of a decommissioning funding plan or, in the case of electric utility applicants and licensees, may be provided as a certification of financial assurance.

A certification will indicate that the amount prescribed in the regulation,

$100 million, is being used, and will include a description of the method of assuring funds for decommissioning. A funding plan will include an initial cost estimate and also provide a description of the method of assuring funds for decommissioning including means of adjusting cost estimates and associated funding levels over the life of the facility.

The initial cost estimate is intended to provide an approximate estimate of the decommissioning cost. Initial estimates may be based on informa-l tion from the literature (e.g., generic studies, licensee models, experience, etc.) which provide a reasonable estimate of the cost of 8/17/84 15 Enclosure A

.n- - . ,, .._ . , - . . . - . , . . - . , . , - ,, , - . _ . - . . - , - . - - , - - , - . - - . . , - , _ - - - - - - _ . . . , _ . . - . , _ , - - - . . . , . . - -

[7590-01]

decommissioning. The PNL decommissioning studies can be used for initial estimates with suitable adjustments for inflation and for site-specific factors. The proposed regulations require that over the ogerating life of the facility, the cost estimate be periodically updated by the licensee to take into account factors which could affect the cost of decommissioning.

In this manner it is expected that the amounts being assured by the funding method will reach a level at the end of life which is approximately equal to the actual costs of decommissioning. Acceptable methods of providing financial assurance are specified in the rule and are discussed further in the following section on financial assurances. -

For most facilities associated with licenses under Parts 30, 40, and 70, decommissioning is much less involved, and has much less impact than the decommissioning of a reactor, for example. A decommissioning funding plan is being required for certain facilities where decommis-sioning costs could be very high. Financial assurance is also required without the submittal of a funding plan for certain other materials licensees as discussed in the next section.

The studies performed as part of the policy reevaluation have shown

! that facilitation of decommissioning in the design of a facility or during its operation can be beneficial in reduction of operational exposures and waste volumes requiring disposal at the time of decommissioning. In addi-tion, facilitation can improve financial assurance by keeping actual costs of decommissioning in line with the estimated costs on which the levels of l financial assurance are based. Although no specific requirement is being proposed, the effects of operational procedures on decommissioning should be considered by licensees as part of their program to maintain radiation exposures and effluents "as low as reasonably achievable." The facilita-tion of decommissioning in the design of facilities can be considered under the general standard for issuance of license that equipment and facilities be adequate to protect the health and safety of the public contained in

$$ 30.33(a)(2), 40.32(c), 50.40(a), 70.23(a)(3), and 72.31(a)(10).

Suggestions for facilitation are presented in the PNL studies, including a preliminary study on facilitation of reactor decommissioning.

In particular, experience has shown that an important aspect of opera-tion is the maintenance of adequate information on the design and current 8/17/84 16 Enclosure A

[7590-01]

condition of the facility and site, so that decommissioning can be care- ,

fully planned and carried out. The rule thus specifically requires that records of relevant operational information helpful in facilitating decom-missioning be kept. Plans should be developed to collect, maintain, and recall records and archive files which include complete as-built and as-

! revised drawings and specifications and significant operational occurrences.

l The rule specifically allows the use of references to relevant informa-tion and locations in order to avoid unnecessary duplication of records kept for other purposes. The rule also specifies that referencing of drawings

need not include indexing of each individual relevant document. The intent ,

, of this requirement is to assure that all important information is kept until termination of license and that it be readily accessible when needed.

Final Plannina Final decommissioning planning will involve greater technical detail than preliminary planning. Decommissioning plans should be submitted in 4

a timely way for review and approval prior to the initiation of any major decommissioning activity to avoid delay of decommissioning after shutdown.

For a power reactor, review and approval could take up to a year. Thus, it would be beneficial to submit plans a year prior to planned termination of operation, if possible.

The proposed rule would require decommissioning plans for production 4

and utilization facilities and ISFSIs to be submitted within two years following permanent cessation of operation or one year prior to operating license expiration. The decision as to whether a shutdown will be permanent is, of course, the' licensee's. This provision does not limit how long a licensee can have a facility sh'ut down under his operating license but means only that when a facility is permanently removed from operational status, plans need to be made as to how the ultimate termination of license will be attained. Upon approval of the plans, the license will be modified to reflect the approved decommissioning alternative authorizing continued possession until the approved alternative has been carried out. This reflects current licensing practice. For reactors which have permanently

, shut down prior to the effective date of the final rule, no time limit is l given for application for license; termination and no additional planning is 8/17/84 17 Enclosure A

3

[7590-01]

specifically required until such application is made. However, the Commis-sion may require additional planning, particularly in the area of financial

! assurance, on a case-by-case basis as appropriate or practical for partially decommissioned facilities in line with the policy represented by this rule if made effective.

The level of detail required would be appropriately less for the dalayed decontamination activities if SAFSTOR is the proposed alternative, l however, preliminary aspects of planning would have to be included for the entire decommissioning procedure. Updated and more complete plans for '

delayed decontamination activities would be submitted towards the end of the safe storage period and would have to be approved by NRC before the start of the major decontamination activities.

Decommissioning plans must address the following:

1. Decommissioning alternative. A description of the alternative to be used for decommissioning must be presented. Plans for processing and disposing of radioactive waste must also be described. Waste disposal plans must assess the availability of waste burial grounds. If waste i

burial space is unavailable, then contingency plans must be presented that address use of available temporary above ground waste storage or some other method. Depending on a variety of circumstances, temporary above ground waste storage may be accomplished offsite or onsite and may require Commission review and approval.

2. Technical and environmental plans. Controls and limits on procedures and equipment to ensure occupational and public safety and to

?

protect the environment during decommissioning must be proposed by the licensee. As part of this, details of a quality assurance program should also be submitted. Changes to procedures for safeguarding special nuclear material should be included when appropriate.

3. Terminal radiation survey. A plan for a final radiation survey must also be presented to ensure that remaining residual radioactivity is within levels permitted for releasing the property for unrestricted use.

Unrestricted access to portions of the property may be desirable prior to full decommissioning. A separate termination survey would be necessary for those areas.

8/17/84 18 Enclosure A

[7590-01]

4. Cost estimate. An updated cost estimate must be included along with a plan to ensure that adequate decommissioning funds are available to carry out the decommissioning operations. This plan would show how any deficit in present funding would be covered. If delayed d(commissioning is proposed, a method for securing the fund would be proposed. Plans for adjusting funds over the storage period are also needed.

For specific licenses under Parts 30, 40, and 70 detailed plans for the completion of decommissioning are only required where decommission-

ing could significantly increase health and safety impacts over those of normal operation or if the Commission has previously determined a need for  !

such plans and required them by a license condition. These plans would

, contain essentially the same information as described above for Parts 50 and 72 licenses. For materials licensees, those plans are not required until after inventories of radioactive materials have been disposed of, preliminary decontamination procedures have been carried out, and con-tamination remaining after these procedures has been assessed. However, it would be advantageous to licensees and the Commission for decommission-ing plans to be submitted prior to the end of operational activities, if possible. It is expected that the need for such a plan will in most cases be anticipated and that a reasonably accurate appraisal of what will be l necessary can be accomplished prior to the end of operation. It would therefore be possible for the licensee to submit plans early and obtain j approval of these plans in time for decommissioning to proceed promptly following the end of operational activities.

No amendments are proposed which specify limitations on occupational or public doses or effluents to the environment. It is considered suffi-cient that the requirements of Part 20 continue to apply until the license is terminated by the Commission. The proposed planning requirements are j considered appropriate means of assuring that the decommissioning will be l

carried out in accordance with Part 20 and specifically that doses will be kept as low as reasonably achievable.

D. Financial Assurance In accordance with its responsibilities as defined by the Atomic Energy Act, the primary responsibility of the NRC with respect to decom-missioning is to protect the health and safety of the public. An important 8/17/84 19 Enclosure A

[7590-01) aspect of this responsibility is to have reasonable assurance that at 1 l the time of termination of operations (including premature closure of the nuclear facility) adequate funds are available so that decommission-

! ing can be carried out in a safe and timely manner. Without this assurance, there could be uncertainties concerning the availability of funds at the time of decommissioning. These uncertainties are of two general types. The first is that the financial condition of a particular 2 organization is difficult to predict years into the future when decom-missioning is likely to occur. As a result it is possible that there may be priority or competing claims to these assets. The second type of uncertainty is the possibility that the nuclear facility could be forced to shut down prematurely, thus reducing the time for collecting funds.

The availability of funds for post-accident cleanup is related to financial assurance for decommissioning. The costs of post-accident f cleanup can be substantially larger than the costs of decommissioning and the availability of funds for accident cleanup can impact a licensee's capability to decommission the facility following the cleanup. Assurance of funds for post-accident cleanup is more properly covered by use of insurance. Post-accident cleanup activities are broader in scope than decommissioning, that is, they can lead ultimately to either reuse or decommissioning. Accordingly, the funding requirements for accident l cleanup are not included in this proposed rule but are contained in 10 CFR 50.54(w) which requires that utility licensees for production and utilization facilities obtain insurance to cover decontamination and i cleanup costs associated with onsite property damage resulting from an accident. As discussed below, the acceptability of certain of the fund-ing methods allowed in the proposed regulations depends on this accident cleanup insurance requirement. Accident cleanup insurance for other types of licensees is under consideration in a separate action; an advanced notice of proposed rulemaking is being developed.

Mechanisms for Requirino Financial Assurance As discussed earlier, financial assurance for the decommissioning of major facilities will be provided by implementation of a funding l

method with a funding level based on expected decommissioning costs.

l This includes all Parts 50 and 72 licensees, as well as those licensees 8/17/84 20 Enclosure A

l' . . . ,

under Parts 30, 40, and 70 which are expected to have significant decom-missioning costs. Electric utility and some material licensees are given the option of providing financial assurance in a prescribed amount or submitting a decommissioning funding plan which contains an estimate based o'n a facility-specific evaluation. If financial assurance is provided in the prescribed amount, only a certification pertaining to financial assurance is submitted. This approach is proposed in order to minimize the administrative effort of licensees and the Commission of obtaining reasonable financial assurance for decommissioning and is ' based on the significant data base on decommissioning developed as part of the policy reevaluation.

The specified amounts are chosen to provide sufficient funds to cover decommissioning costs for most of the licensees in each category. For power reactors the amount of $100 million was chosen based on data in NUREG/CR-0130 and -0672 (References 2 and 3), which analyze the costs of decommissioning PWRs and BWRs, respectively. This figure also takes into account escalation of these costs to 1984 dollars, additional costs of engineering and planning, use of contractors, and variations in local

. labor rates, in waste transportation costs, and in local power costs.

This amount does not account for. costs of shipment of spent fuel which .

are assumed to be part of operational costs or the costs of demolition of nonradioactive structures which is not required for NRC license termination. For research and testing facilities a specific amount is not set due to the large diversity of facility types.

l The amounts for materials licensees were chosen based primarily on

(, data in NUREG/CR-1754 (Reference 12) and on licensing experience. Based on estimates in NUREG/CR-1754, a single major processing laboratory would cost in a range approaching $100,000 to decommission. It is expected that the majority of licensees for which a certification of $100,000 is i specified would have only one major laboratory or processing area and a very limited potential for site contamination. For those licensed mate-rials for which assurance of $500,000 is specified, it is expected that several laboratories would typically be involved in radioactive material processing or handling. In some cases, a large number of individual rooms or laboratories may be used in connection with licensed activities, however, only a few would require a major decontamination effort such as the example

8/17/84 21 Enclosure A 4

L

i [7590-01]

1; laboratories studied in NUREG/CR-1754. The $50,000 specified for  !

j very large sealed sources is based on licensing experience and is the estimated maximum cost to decommission a large pool-type ir. radiator, j It is anticipated that these prescribed levels of assurance will be

} updated as cost factors change, for example, increase in costs of low-level waste burial.

Of course, many factors will affect decommissioning costs. Licensees who can demonstrate that the expected decommissioning costs for their l

facility are significantly lower than the applicable prescribed amount have the option of doing so by submitting a decommissioning funding plan.

! An additional means of reducing administrative effort which has been

incorporated into the proposed rule is allowing those materials licensees for which a decommissioning funding plan is required to first supply financial assurance for $500,000 and delay submitting the funding plan

until application for license renewal is made, at which time the funding plan can be more efficiently reviewed together with the renewal application.

. Funding Methods The wide diversity in types of nuclear facilities necessitates that i the NRC allow latitude in the use of funding methods. In analyzing funding methods which would provide reasonable assurance, NRC has developed the following major classification of funding alternatives:

1. Prepayment. Cash or other liquid assets that will retain their value for the projected operating life of the nuclear facility are deposited prior to startup into an account segregated from licensee assets and outside its administrative control. Periodic review and adjustment of the fund is necessary to assure the adequacy of the fund. Prepayment can be in the form of a trust, certificate of deposit, government security, escrow account, or government fund.

2. External sinking funds. The external sinking fund requires that a prescribed amount of funds be set aside in an account at fixed i intervals over the life of the facility, such that the funds plus accumulated interest would be sufficient to pay for decommissioning costs

! at the time termination of operation is anticipated. The account would 8/17/81 22 Enclosure A l

[7590-01]

l be segregated from licensee assets and outside licensee control. Types

of accounts could be similar to those described above for prepayment,

3. Internal reserve. This approach usually uses negative net salvage value depreciation that allows estimated decommissioning costs i to be accumulated over the life of the nuclear facility. In this method,

} the funds are not segregated from the company's assets, rather they are

! invested in its assets. At the end of the nuclear facility's life, bonds are issued against these assets and the funds raised are used to pay for j decommissioning. This approach can also take the form of a segregated  !

internal reserve, which is similar to an external sinking fund, except that funds are held by the company. I

4. Insurance, surety bonds, letters of credit, and lines of credit and other guarantee methods. Insurance could be used to provide l l coverage for premature decommissioning expenses. An insurance-type i mechanism might also be used for all decommissioning expenses, including  !

! those planned under normal circumstances. The surety bond, credit methods,

and other guarantee methods assures that the decommissioning costs will j be paid should the licensee default. The licensee would still be respon-sible to pay for decommissioning. With respect to power reactors, it appears questionable that bonds of the size necessary and for the time i involved will be available. However, surety bonds or credit methods i appear to be available for nuclear facilities that involve smaller costs and shorter time periods. Contractual arrangements must provide that J

NRC be notified prior to cancellation, must ensure that a surety bond or credit method remains in effect until the license is terminated, and must be set up such that the beneficiary would be a trustee acceptable to the Commission.

The types of surety arrangements being considered in this proposed rule are similar to those contained in the Commission's recently enacted requirements in 10 CFR Part 61. The Commission found in developing those

. requirements that self insurance for a private sector applicant or licensee would not be an acceptable form of surety.

Another potential funding method of this type is for a licensee, where practical, to obtain a guarantee that the local, state, or Federal l

government will assume financial responsibility for decommissioning the facility. This would most likely be possible when the licensee is a local, 4

8/17/84 23 Enclosure A

[7590-01]

State, or Federal agency or a state-affiliated organization, such as a university or hospital.

Criteria for Funding Methods The NRC staff considers two primary criteria in evaluating funding methods. These criteria are the degree of assurance of the availability of funds and the cost of providing assurance.

The degree of assurance is a measure of how effective the funding method is in providing assurance that funds for decommissioning will be available when needed. From the Commission's perspective, assurance is the most important criterion.

Prepayment provides the greatest assurance that funds will actually be available for either normal or premature decommissioning since the necessary funds are deposited at startup. Some adjustment will likely be necessary over the period of licensing because of uncertainties in cost estimates and changes in inflation and interest rates.

The insurance alternative.also provides excellent assurance in that it could provide coverage for premature decommissioning costs and for licensee default. For electric utility licensees, the property damage insurance required by 10 CFR 50.54(w) provides reasonable assurance of funds for the potentially large costs of decontamination leading up to premature decommissioning. In some instances, such as in the case of government licensees, guarantees of financial responsibility by the appropriate local, State, or Federal government entities are considered adequate in providing assurance. As discussed above, self-insurance is not considered adequate.

Surety methods (for example, surety bonds, lines of credit, letters of credit, secured interests, or other guarantees) can provide adequate assurance to cover default for those licensees to whom they are available.

However, from the standpoint of acceptability, sureties have certain dis-advantages that must be considered. In particular, contractual arrange-ments will have to be written such that the surety bond or credit mechanism cannot be terminated by the surety company or bank prior to other arrangements being made, that a surety bond or credit mechanism remains in effect until the license is terminated, and that the surety company itself is financially stable.

8/17/84 24 Enclosure A

_- - - - - , >-,.-..---r-. -.---e, -- ---,------wwe- wc-w s--,--- w ww e---------. y - - - - - - , - r --w ia -w-y---- -----v-rv+-w--

[7590-01]

The external sinking fund option provides a good level of assurance.

Because the external sinking fund is held outside the licensee's assets and control, it would not be vulnerable under most likely trust arrange-ments if the licensee went bankrupt. On the other hand, in the event of premature decommissioning, there would be a greater likelihood than with the prepayment method that insufficient funds had been accumulated. This situation would be mitigated "if the fund was either structured so that t

higher payments were made earlier in a facility's life, or coupled with a deposit or insurance or surety.

Providing lesser assurance is the internal reserve. Under normal circumstances, the internal reserve would be similar to the external

sinking fund in the pattern of funds set aside and should provide ade-quate funds if a nuclear facility is decommissioned at the end of its i expected life. However, because it depends on financing internal to the licensee, the internal reserve is vulnerable to events or situations i that undermine the financial solvency of a licensee. A bankrupt or financially troubled licensee would have difficulty in raising capital against its decommissioning reserve and even a segregated internal reserve fund may not be available to pay for decommissioning costs.

Thus, the internal reserve is acceptable only if supplemented by a mechanism providing additional assurance such as insurance or surety arrangement.

For electric utilities, the insurance required by 5 50.54(w) is considered sufficient to allow the use of internal reserve. For other licensees, internal reserve would not provide adequate assurance unless backed up by a surety or insurance covering decommissioning costs.

In this case, however, it is the surety or insurance that provides the assurance; although the licensee may use an internal reserve to accumu-late funds, only the surety or insurance need be reported to NRC.

Cost of assuring funds is an important consideration from the standpoint that an alternative must be reasonably cost effective in order to be acceptable. Cost of a funding method is defined as the incremental revenue requirements that result from using a particular funding method, other factors being equal. (Administrative costs to the NRC and other regulatory agencies are also included.) Cost is sensitive to even relatively small variations in assumed inflation rates, interest and 8/17/84 25 Enclosure A

- - - - .m.,__, m.7,. .-___,.,7-_ , , , . . _ . , , . , . , , , , . _ . , , , . - . , , . , , , _ _ . , , , _

[7590-01]

discount rates, expected facility life, Federal tax policies, deprecia-  !

tion and amortization schedules, and other accounting procedures. Based on these variations, each of the funding alternatives has a fairly wide calculated cost range. Taxation policies can have a significant effect j on the cost of funding alternatives.

The internal reserve method tends to be less expensive than external sinking funds or prepayment since a company can normally earn more from its own capital structure than by investing in higher grade commercial securities outside the company. The cost of guarantee methods, such as sureties, letters of credit, or insurance, would be in addition to normal decommissioning expense.

Funding methods considered acceptable in providing reasonable levels

of assurance may be different for different types of facilities. For example, the situation for a large power reactor, can be significantly I

different than that for a small testing facility. Generally for power reactors, state utility commissions regulate retail rates thus permitting i utilities to recover the cost of providing electricity from their customers,

! the decommissioning costs are higher, and the licensees are required by l 10 CFR 50.54(w) to carry insurance for post accident decontamination and cleanup. Even financially troubled utilities have sufficient assets to l cover the costs of decommissioning. Among utilities, there are also

differences, such as multi-asset versus single-asset utilities (i.e., a

. utility with a single generating facility) or public versus investor-owned utilities.

Based on the above considerations, this proposed decommissioning rule permits a range of options which are expected to provide reasonable assur-ance of the availability of funds for decommissioning. The acceptable

options are specified in the proposed rule. Planned regulatory guides will provide guidance on how these funding methods will be implemented. These i

requirements and the planned accompanying guidance are similar to those for 10 CFR Part 61.

Periodic Review l The proposed rule would require that decommissioning funding plans contain provisions for periodic review and adjustment in order to assure 1

8/17/84 26 Enclosure A i

[7590-01) j .

I that funds will be adequate at the time of decommissioning. Appropriate periods for review and the level of effort necessary will vary for different types of licensees and financial considerations. For many cases, routine adjustments for changes in inflation and interest rates might be done annually by the licensee and could be reported in the annual financial r

report without the need for NRC approval. A technical review of the information in the preliminary plans or the cost estimate for a funding plan could be done less frequently and submitted to NRC for approval.

For the shorter term materials licenses, the renewal process may be sufficient for technical reviews.

J Existina Licensees Particular consideration has been given to the case of existing licensees whose funding methods will need to provide an adequate level of assurance within a shorter time frame. The proposed rule would require j that a funding method be proposed within two years following the effec-tive date of this rule for production and utilization facilities and wit'in h one year for other licensees for which it is required and estab-lished as soon as approved by NRC. For funding methods in which funds would normally be accumulated over the entire life of the facility, _

larger periodic payments would, of course, be necessary in order to accumulate the total decommissioning costs within the remaining lifetime i

of the facility. When such methods are not coupled with a surety or other j guarantee as is allowed in the case of utilities, adequate assurance should be provided by building up the fund to the level that would have been attained if accumulation of funds had been started at the beginning of facility life. Establishment of these decommissioning funds by use of prepayment or accelerated sinking fund by all existing licensees, within a short time following issu~ance of this rule could have a si pificant impact on capital markets. To alleviate this impact, existing licensees with estimated decommissioning costs of 5 million dollars or more would be allowed to accumulate an adequate decommissioning fund, as discussed above, over a reasonable period of time following the f initial establishment of the fund. If more than 5 years remain prior to l license expiration an acceptable period of time would be 5 years or one-

! third of the remaining license period, whichever is greater.

8/17/84 27 Enclosure A

--e =

[7590-01]

Extended Decommissionina Period When decommissioning is to be carried out over an extended period of time such as with SAFSTOR, the proposed rule would require that the

~

decommissioning fund be in an external account unless assurance is being provided by a surety, insurance, or certification method. In this way, for a facility which is no longer producing revenue, the funds would be protected irrespective of licensee stability. This would be done at the beginning of the storage or surveillance period. Review and adjustment of funding level must continue over the extended decommissioning period.

Request for Comment The regulatory approach for assuring funds for decommissioning has been particularly difficult to resolve. The issues of concern are: which funding methods to allow for utilities during operation and during any long term decommissioning, and whether to set a prescribed amount for the level of assurance. Additional information and comments are specifically requested by the Commission on the costs and adequacy of assurance of the various funding methods.

i PIRG, et al. , Petition for Rulemakina. Docket No. PRM-50-22.

On July 5,1977, as supplemented October 7,1977, and January 3, l

1978, the Public Interest Research Group (PIRG), Arizonans for Safe Energy, Citizens United Against Radioactive Environment, Community Action

! Research Group, Critical Mass Energy Project, Environmental Action Foun-dation, Environmental Action, Inc. , New Mexico Public Interest Research l

Group, New York Public Interest Research Group, North Anna Environmental l Coalition, Texas Public Interest Research Group, and National Consumer Law Center Energy Project (hereinafter the ' petitioners'), petitioned the Commission to initiate rulemaking to promulgate regulations for l -

nuclear power plant decommissioning which would require plant operators l

to post bonds, to be held in escrow, to ensure that funds would be i

available for proper and adequate isolation of radioactive material upon l

each plant's decommissioning. On June 22, 1979, the Commission pub-

lished in the Federal Register (44 FR 36523) a partial denial of the petitioners' request. In this notice the Commission specifically denied 7

the petitioners' request to immediately initiate rulemaking to implement 28 Enclosure A 8/17/84

[7590-01]

a specific decommissioning funding plan that would require nuclear power plant operators to post surety bonds to cover decommissioning costs. The Commission granted the petitioners' request to reconsider the adequacy of

~

its regulations on decommissioning. The Commission indicated that other issues and funding alternatives raised by the petitioners would be con-sidered within the context of the NRC decommissioning rulemaking proceedings.

In addition to surety bonds, the petitioners advanced two other options to finance nuclear power reactor decommissioning: (1) funds in an amount sufficient to pay for projected decommissioning would be set aside in an escrow account before commencing reactor operations, and (2)

. funds would be accumulated in a sinking fund during the life of the plant supplemented by a surety arrangement as necessary to allow for the risk of a licensed utility going bankrupt before the sinking fund had accumu-lated sufficient funds. The petitioners indicated that the require-ments should apply to existing licensees as well as future licensees.

The petitioners also raised the issue of the Commission's jurisdiction to regulate the arrangements for decommissioning. The original petitioners joined by others, submitted comments in response to the Federal Register notice (44 FR 36523, June 22, 1979). These comments were received on November 21, 1979. The comments discussed NRC's jurisdiction to promul-gate rules mandating specific requirements covering decommissioning costs, the need for NRC to establish a rule requiring its licensees to make spe-cific financial plans to meet decommissioning costs, surety bonds as a supplementary option, and the disadvantage of unfunded alternatives.

The PIRG petition and the petitioners' supplementary comments were considered in the development c' U is proposed rule. The Commission agrees that its regulation. O tui; be amended to require that licensees plan for decommissioning L.9 prse reasonable assurance that funds will be available to cover decommissioning costs when needed. For reasons

discussed in the previous section, the Commission does not believe it is l

necessary, or desirable, to require a specific financial method for col-1ecting decomm(ssioning funds. The proposed amendments would require licensees to submit a cost estimate and a proposed financial method for assuring that funds will be available for decommissioning. A number of 8/17/84 29 Enclosure A

[7590-01]

acceptable methods are indicated. The Commission will review the licensees' funding methods and evaluate them with respect to the new requirements.

A licensee's method for providing decommissioning funds must be acceptable

~

to the Commission. This procedure covers all applicants for operating licenses and existing licensees under Part 50. To the extent that the petitioners would require promulgation of a specific method for financing power reactor decommissioning, the petition is denied. To the extent that the proposed amendments would allow consideration of the petitioners suggested financing methods, including surety bonds if they are available, the petition is granted. This action would complete NRC consideration of the issues raised in PRM-50-22.

E. Residual Radioactivity Levels Although residual radioactivity limits are being developed in a separate action, much consideration has been given to this issue as part of the overall reevaluation of decommissioning policy. Although an upper limit in terms of dose is being. considered, actual levels attained in any case should be as low as reasonably achievable. Based on the infor-

{ mation developed, it is expected that contamination levels considered suitable for release for unrestricted use will not be changed signifi-cantly enough to affect cost estimates for decommissioning, nor conclu-sions of the generic environmental impact statement concerning overall impacts of decommissioning. Whatever criteria are applicable, the survey which verifies that these criteria are met and serves as the primary basis of termination of the license must be carefully designed to provide a high degree of reliability.

F. Environmental Review Requirements In the course of development of this proposed rule, it became apparent that the requirements for environmental reviews related to decommissioning could be reduced.

Environmental Review Requirements at Licensing Decommissioning is the inevitable result of having built and operated a nuclear facility. The GEIS and its supporting technical data base 8/17/84 30 Enclosure A

[7590-01) l assessed all of the costs and environmental impacts occurring at the time of decommissioning. These overall impacts, although dependent on the specific decommissioning procedures, are essentially the result of opera-tion and accordingly should be addressed prior to licensing.

I As is the present licensing practice, environmental reports and l environmental impact statements which are developed in connection with the licensing of major facilities will include the major environmental impacts expected at decommissioning. The major impacts, of which the wastes needing controlled disposal are the most significant, can be j reasonably assessed. At the time a facility is licensed, however, it is impractical to plan in detail what specific procedures will be used at decommissioning since decommissioning will not be carried out until many years later. Thus, at this time, it is also impractical to attempt to develop highly detailed analyses of the environmental impacts of specific decommissioning procedures. Since the GEIS and its supporting data base showed that the costs and environmental impacts at decommissioning are small compared to the total costs and impacts of building and operating a major facility such as a reactor, the availability of more detailed information concerning impacts at decommissioning would not affect the NEPA cost-benefit balance. Thus, no amendment to the regulations is being proposed in regard to the consideration of decommissioning impacts in environmental reviews at licensing.

Environmental Reviews at Decommissioning At the end of operation, when a facility must be decommissioned, application for termination of license is made and, in the case of major facilities, a detailed decommissioning plan is submitted. As stated above, the overall environmental impacts occurring at decommissioning, of which the radioactive wastes resulting from operation and needing con-trolled disposal are the most significant, have already been evaluated in environmental impact statements prepared in connection with the issu-ance of the construction permit and operating license for the facility.

In view of these circumstances and on the basis of information 'in the draft GEIS and its supporting technical data base indicating that the environmental impacts associated with decommissioning are unlikely to be significant, the Commission is of the opinion that there is no need, 8/17/84 31 Enclosure A

[7590-01) absent special circumstances, to prepare an environmental impact statement in connection with the issuance of a license amendment or order authoriz-ing the decommissioning of a facility other than a waste di,sposal facility.

In most cases, preparation of an environmental assessment which supplements the previously prepared environmental impact statements should be suffi-cient. The Commission notes, however, that there may be situations in

which the special nature of the decommissioning action necessitates the preparation of an environmental impact statement.

This proposed rule has been developed to assure that decommissioning can and will be accomplished in a safe and efficient manner and that the impacts at decommissioning will be minimized to the extant practical. The draft GEIS indicates that for any viable decommissioning alternative, ra-dioactivity released to the environment and associated radiation doses are

substantially less than those associated with operation and maintenance of a reactor during its lifetime and that public doses during decommissioning are negligible (calculated in the background documents as roughly a few micro-rem to the maximally exposed individual). Occupational doses during I

the decommissioning of a reactor are, for the short period of active dis-santlement, comparable to that occurring during operation and maintenance, and over the longer period of a safe storage period are much lower.

Since in most instances environmental impacts are unlikely to be j significant enough to warrant the development of an environmental impact

! statement, the rule proposes that the Commission no longer be required to prepare environmental impact statements in connection with the issu-ance of license amendments or orders authorizing the decommissioning of facilities licensed under Parts 50 and 72. An. stead, the Commission would prepare environmental assessments which would supplement environmental impact statements previously prepared in connection with the facility.

Although this environmental review procedure is expected to accommodate j most decommissioning actions, it should be noted that under the criteria in revised 10 CFR Part 51 an environmental assessment may result in a conclusion that an environmental impact statement is required in the particular circumstances of the proposed Federal decommissioning action.

The environmental assessment would be based on information provided by 8/17/84 32 Enclosure A l

. - - - = .- ,-,_,- . - . , - - -.- - - . --.-.--w ,

_ _ _ . . _=- .

[7590-01]

1 the licensee in a supplement to the environmental report submitted at the decommissioning stage. The information submitted by the licensee would take account of any changes to the estimated environmental impacts based on the information in the decommissioning plan.

The information in the data base and the conclusions of the GEIS will also assist in evaluating decommissioning plans. If unique methods are proposed by a licensee which are significantly different from those rtudied by the Commission, the Commission retains discretion to require an environmental impact statement in special circumstances.

Categorical Exclusion from Environmental Reviews

_ The Commission has identified a category of actions connected with the proposed requirements which appears to meet the criterion for cate-gorical exclusion set out in 10 CFR 51.22(a). Presently there are eighteen categories of actions designated as such, thus the following category of actions is designated Category 19

Category of Actions 4

19. Approvals of decommissioning funding plans.

Discussion and Findina Although decommissioning funding plans concern how licensees expect to carry out the activities required to decommission their facilities, the approval of these plans does not authorize a licensee to perform these activities. The principal purpose of considering decommissioning activities at this time is to provide information which will enable the ,

Commission to determine whether the licensee's plan for assuring funds 4

for decommissioning is adequate. Approval of a decommissioning funding plan affects the financial arrangements of the licensee but does not affect the scope and nature of the licensed activity. These actions in and of themselves do not have an environmental impact.

Accordingly, the Commission finds that approvals of decommissioning funding plans (Category 19) comprise a category of actions which do not

) individually or cumulatively have a significant effect on the human envi-i

- ronment, designates Category 19 as a categorical exclusion, and directs that Category 19 be listed in 10 CFR 51.22(c) as a categorical exclusion.

8/17/84 33 Enclosure A

[7590-01]

References

1. Plan for Reevaluation of NRC Policy on Decommissionino of Nuclear Facilities, NUREG-0436, Revision 1. U.S. Nuclear Regulatory Commis-sion, December 1978, and Supplement 1 July 1980, and Supplement 2, March 1981.

2. R. I. Smith, G. J. Konzek, and W. E. Kennedy, Jr. , Technology, Safety, and Costs of Decommissioning a Reference Pressurized Water Reactor Power Station, NUREG/CR-0130, Prepared by Pacific Northwest Laboratory

, for the U.S. Nuclear Regulatory Commission, June 1978, Addendum 1, August 1979, and Addendum 2, July 1983.

3. H. D. Oak, et al., Technology, Safety, and Costs of Decommissioning <

a Reference Boilina Water Reactor Power Station, NUREG/CR-0672, I

Prepared by Pacific Northwest Laboratory for the U.S. Nuclear Regula-

tory Commission, June 1980, and Addendum, July 1983.

4. G. J. Konzek, Technolocy, Safety, and Costs of Decommissionino Refer-ence Nuclear Research and Test Reactors, NUREG/CR-1756, prepared by Pacific Northwest Laboratory for the U.S. Nuclear Regulatory Commission, February 1982, and Addendum, July 1983.

5. Nom G. Wittenbrock, et al. , Technology, Safety, and Costs of Decommissioning Licht Water Reactors at a Multiple Reactor Station, NUREG/CR-1755, prepared by Pacific Northwest Laboratory for U.S.

Nuclear Regulatory Commission, January 1982.

6. Emmett 8. Moore, Jr. , Facilitation of Decommissioning of Licht Water Reactors, NUREG/CR-0569, Pacific Northwest Laboratory for U.S. Nuclear Regulatory Commission, December 1979.

7. E. S. Murphy, Technology, Safety, and Costs of Decommissionina Refer-ence Light Water Reactors Following Accidents, NUREG/CR-2601, Prepared

)'

by Pacific Northwest Laboratory for U.S. Nuclear Regulatory Commission, November 1982.

) 8. K. J. Schneider and C. E. Jenkins, Technolony, Safety, and Costs of Decommissionina a Reference Nuclear Fuel Reprocessina Plant, NUREG-0278, Prepared by Pacific Northwest Laboratory for U.S. Nuclear Regulatory Commission, October 1977.

9. H. R. Elder and D. E. Blahnik, Technolony, Safety, and Costs of Decom-missionina a Reference Uranium Fuel Fabrication Plant, NUREG/CR-1266, Pacific Northwest Laboratory for U.S. Nuclear Regulatory Commission,

, October 1980.

10. H. R. Elder, Technology, Safety, and Costs of Decommissioning a Reference Uranium Hexafluoride Conversion Plant, NUREG/CR-1757,  !

Prepared by Pacific Northwest Laboratory for U.S. Nuclear Regulatory Commission, October 1981. J i

i 8/17/84 34 Enclosure A

[7590-01]

11. C. E. Jenkins, E. S. Murphy, and K. J. Schneider, Technology, Safety, and Costs of Decommissioning a Reference Small Mixed Oxide Fuel Fabrication Plant, NUREG/CR-0129, Prepared by Pacific Northwest Laboratory for U.S. Nuclear Regulatory Commission, February 1979.

12. E. S. Murphy, Technology, Safety, and Costs of Decommissioning Refer-ence Non-Fuel-Cycle Nuclear Facilities, NUREG/CR-1754, Prepared by Pacific Northwest Laboratory for U.S. Nuclear Regulatory Commission, February 1981.  :

i

13. J. D. Ludwick and E. B. Moore, Technology, Safety and Costs of Decom-missionina Reference Independent Spent Fuel Storage Installations, NUREG/CR-2210, Prepared by Pacific Northwest Laboratory for the i

U.S. Nuclear Regulatory Commission, January 1984.

14. Robert S. Wo od, Assuring the Availability of Funds for Decommissionina Nuclear Facilities Draft Re) ort, NUREG-0584, Revision 3, U.S. Nuclear Regulatory Commission, Marc 1 1983.

15. Financina Strateates For Nuclear Power Plant Decommissioning, NUREG/CR-1481, Prepared by Temple, Barker, and Sloan, Inc. , for the New England Conference of Public Utilities Commissioners, Inc., for U.S. Nuclear Regulatory Commission, July 1980.

16. P. L. Chernick, et al., Desion, Costs and Acceptability of an Electric Utility Pool for Assuring the Adequacy of Funds for Nuclear Power Plant Decommissioning Ex>ense; NUREG/CR-2370, Prepared by Analysis and Inference, Inc., for U.S. tuclear Regulatory Commission, December 1981.

17. C. F. Holoway and J. Witherspoon, Monitorina for Com)11ance with Decommissioning Termination Survey Criteria, NUREG/Cl-2082, Prepared by Oak Ridge National Laboratory for the U.S. Nuclear Regulatory Commission, June 1981.

18. J. P. Witherspoon, Technolony and Cost of Termination Surveys Associated With Decommissioning of Nuclear Facilities, NUREG/CR-2241, .

Prepared by Oak Ridge National Laboratory for U.S. Nuclear Regulatory

Commission, January 1982.

19. Draft Generic Environmental Impact Statement on Decommissioning Nuclear Facilities, U.S. Nuclear Regulatory Commission, NUREG-0586, January 1981.

NOTE: Free single copies of reference items 14 and 19, to the extent of supply, may be requested by writing to the Publication Services Section, Division of Technical Information and Document Control, U.S. Nuclear Regulatory Commission, Washington, DC 20555.

8/17/84 35 Enclosure A

[7590-01]

1 Copies of all other referenced documents may be purchased by calling I (301) 492-9530 or by writing to the Publication Services Section, Division I of Technical Information and Document Control, U.S. Nucleaf Regulatory Commission, Washington, DC 20555, or purchased from the National Tech-1 nical Information Service, Department of Commerce, 5285 Port Royal Road, '

Springfield, VA 22161.

Environmental Impact Statement: Availability As required by the National Environmental Policy Act of 1969, as amended, and the Commission's regulations in 10 CFR Part 51, the NRC has prepared a draft environmental impact statement on the decommissioning of nuclear facilities.

This draft environmental impact statement is available for inspection and copying for a fee in the NRC Public Document Room, 1717 H Street NW.,

Washington, DC. Single copies of the draft environmental impact statement may be obtained from Carl Feldman, Office of Nuclear Regulatory Research, U.S. Nuclear Regulatory Commission, Washington, DC 20555, telephone (301)443-7910.

Paperwork Reduction Act Statement

• This proposed rule amends information collection requirements that are subject to the Paperwork Reduction Act of 1980 (44 U.S.C 3501 et seq.).

This rule has been submitted to the Office of Management and Budget for review and approval of the paperwork requirements.

Regulatory Analysis The Commission has prepared a draft regulatory analysis on this pro-posed regulation. The analysis examines the costs and benefits of the alternatives considered by the Commission. The draft analysis is available for inspection and copying for a fee in the NRC Public Document Room, 1717 H Street NW., Washington, DC. Single copies of the analysis may be obtained from C. R. Mattsen, Office of Nuclear Regulatory Research, U.S. Nuclear Regulatory Commission, Washington, DC 20555, telephone (301)443-7910.

1 8/17/84 36 Enclosure A

,, -- , , - , --. ..,,..,_m ',.,.___.we, ..-m,.,m+, .,-.. ..v-, _,,.__-mme___.m ,_m ..,-..,..,,,.m . - . .

9

[7590-01)

The Commission requests public comments on the draft regulatory analysis. Comments on the draft analysis may be submitted to the NRC as

~

indicated under the ADDRESSES heading.

l Regulatory Flexibility Analysis As required by the Regulatory Flexibility Act of 1980, 5 U.S.C.605(b),

the NRC has carefully considered the effect on small entities in developing the proposed rule and has attempted to tier the requirements to reduce

' the impact on small entities to the extent possible while adequately protecting health and safety.

Based on the information presently available, it is not expected that this proposed rule, if promulgated, will have a significant economic impact on a substantial number of small entities. Although the impact may be considered significant to some, for the large majority of small entities, it is expected to be minimal.

The proposed rulemaking would broadly affect all Commission applicants and licensees and, because Agreement States will be required to maintain '

compatibility with the proposed changes, the proposed rule would also affect Agreement State applicants and licensees. There are approximately 9,000 Commiss!on licenses, which include about 5200 byproduct material licenses under Parts 30 through 34, 2,500 medical licenses under Part 35, 400 source material licenses under Part 40, 200 production and utilization 4

licenses (including approximately 50 applications in various stages of review) under Part 50, 700 special nuclear material licenses under Part 70, and 1 license and approximately 5 potential applicants under Part 72. Between 11,000 and 12,000 Agreement States' licensees would also be affected.

The Commission estimates that approximately 43 percent of its licensees would be considered small entities under the criteria set out in the size standards by the Small Business Administration in 13 CFR Part 121 (e.g. , for most licensees less than 500 employees, for hospitals less than 150 beds, and for other medical licensees less than $1.5 million annual gross receipts). Licensees under 10 CFR Parts 50 and 72 would l not be considered small entities.

l All licensees including small entities will be required to keep '

q records important to decommissioning. In general, for small licensees, 8/17/84 37 Enclosure A  !

l

. :90-01) such recordkeeping is " good practice" and should not constitute a significant change in operation. Generally, keeping records important to decommissioning reduces both the costs and health and safety impacts of de~ commissioning and can also result in savings in doses or costs during operation. Costs of recordkeeping would tend to be recouped either in operation or at decommissioning.

The changes proposed in this rule at the time of termination of license will affect few small entities. These changes consist primarily of specifying in more detail contents of decommissioning plans, presently called " decontamination plans." Although more detailed plans may be required than have been considered acceptable in the past, there will s

also be a reduction in administrative effort because there will be less uncertainty as to what is expected. Overall, these changes are not expected to have a significant impact.

The most significant impact of this rule on licensees is likely to result from the financial assurance requirements. A cost estimate for decommissioning and a method of providing assurance of funds for decommis-sioning will be required of roughly 830 Commission licensees of which few if any will be small entities. Roughly another 660 Commission licensees including about 280 small entities will have the option of providing financial assurance in a prescribed amount and submitting a certification to that effect or submittir.g a funding plan to support a lower amount.

A similar number of Agreement State licensees would also be affected.

Those small entities affected would be almost exclusively industrial l licensees. Because the historical information indicates that such small industrial licensees are the most likely to default, it is particularly important that financial assurance be provided by these licensees. The

! rule allows as much flexibility as possible to licensees for providing financial assurance, in order to reduce the impact. Also, the economic impact of making cost estimates can be reduced by using the data base which has been developed.

The cost of this requirement depends on the method used. A surety or insurance method is likely to be used by small entities; it is esti-mated to cost approximately 1 to 2% of the face value, or 1 to 2% of

, decommissioning costs annually, plus the administrative cost of either 8/17/84 38 Enclosure A 4

e r r - -- -- y , -m-e--r,r - - - - ----- - - - - - - - - ----------e-,-,-,---.. * - ,--------.---w-----------------+w---,--,---m-w--,.

[7590-01]

developing a cost estimate and reporting on the funding methods to NRC l or of making a certification. The cost of a surety using the prescribed

~

t amounts proposed in the rule would thus be in the range of $500 - $10,000 per year. For a few small entities affected this would be a significant l economic impact, .however, these cases would present the highest risk of default.

. A more detailed analysis of impacts to small entities is included i in the Regulatory Analysis.

Because of the widely differing conditions under which the licensees

. covered by this proposed regulation operate, the Commission is particularly i seeking comment from small entities as to how the regulations will affect them and how the regulations may be tiered or otherwise modified to impose less stringent requirements on small entities while still ade-quately protecting the public health and safety. Those small entities which offer comments on how the regulations could be modified to take into account the differing needs of small entities should specifically discuss the following items

'

(a) The size of their business and how the proposed regulations would result in a significant economic burden upon them as compared to

) larger organizations in the same business community.

(b) How the proposed regulations could be modified to take into account their differing needs or capabilities.

(c) The benefits that.would accrue, or the detriments that would be avoided, if the proposed regulations were modified as suggested by the commenter.

(d) How the proposed regulations, as modified, would more closely equalize the impact of NRC regulations or create more equal access to the benefits of Federal programs as opposed to providing special l advantages to any individuals or groups.

l (e) How the proposed regalations, as modified, would still adequately protect the public health and safety.

The comments should be sent to the Secretary of the Commission, U.S.

Nuclear Regulatory Commission, Washington, DC 20555, Attention: Docketing and Service Branch.

I 8/17/84 39 Enclosure A 1

i

o ,

[7590-01]

LIST OF SUBJECTS Part 30 - Byproduct material, Government contracts, Intergovern-mental relations, Isotopes, Nuclear materials, Penalty, Radiation pro-tection, Reporting and recordkeeping requirements.

Part 40 - Government contracts, Hazardous materials - transportation,

, Nuclear materials, Penalty, Reporting and recordkeeping requirements, Source material, Uranium.

Part 50 - Antitrust, Classified information, Fire prevention, Incorporation by reference, Intergovernmental relations, Nuclear power plants and reactors, Penalty, Radiation protection, Reactor siting crite-ria, Reporting and recordkeeping requirements.

Part 51 - Administrative practice and procedure, Environmental impact statement, Nuclear materials, Nuclear power plants and reactors, Reporting and recordkeeping requirements.

Part 70 - Hazardous materials - transportation, Nuclear materials, Packaging and containers, Penalty, Radiation protection, Reporting

, and recordkeeping requirements, Scientific equipment, Security measures, Special nuclear material.

. Part 72 - Manpower training programs, Nuclear materials, Occupational safety and health, Reporting and recordkeeping requirements, Security measures, Spent fuel.

! For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act -

of 1974, as amended, and 5 U.S.C. 553, the NRC is proposing to adopt the following amendments to'10 CFR Parts 30, 40, 50, 51, 70, and 72.

t 1

4 8/17/84 40 Enclosure A

. _. _ _ . _ _ . _ _ _ _ . . _ - _ _ _ _ - . _ - _ _ _ _ . - - _ _ _ _ - _ . _.____. _ _ _ _ _ ~

[7590-01)

PART 30 - RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF BYPRODUCT MATERIAL

1. The authority citation for Part 30 is revised to read as follows:

AUTHORITY: Secs. 81, 82, 161, 182, 183, 186, 68 Stat. 935, 948, 953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2111, 2112,_2201, 2232, 2233, 2236, 2282); secs. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846).

Section 30.7 also issued under Pub. L.95-601, sec. 10, 92 Stat.

4 2951 (42 U.S.C. 5851). Section 30.34(b) also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234). Section 30.61 also issued under sec. 187, 68 Stat. 955 (42 U.S.C. 2237).

For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C.

4 2273), li 30.3, 30.34(b) and (c), 30.41(a) and (c), and 30.53 are issued under sec. 161b, 68 Stat. 948 as amended (42 U.S.C. 2201(b)); and SS 30.36, 30.51, 30.52, and 30.55 issued under sec. 1610, 68 Stat. 950, as amended (42 U.S.C. 2201(o)).

2. Section 30.4 is amended by adding a new paragraph (y) to read _

as follows:*

5 30.4 Definitions.

m a a a m (y) " Decommission" means to remove (as a facility) safely from service and reduce residual radioactivity to a level that permits release

of the property for unrestricted use and termination of license.

3. Section 30.32 is amended by adding a new paragraph (g) to read as follows:

i x

Proposed rule changes are shown in comparative text; deletions are bracketed and lined through and additions are underlined; where exten-i sive revision has been made to existing paragraphs, only the revised

! version is shown. Comparative text will be removed before submittal to the Office of the Federal Register.

i l

f l 8/17/84 41 Enclosure A

. .- . 1

[7590-01]

9 30.32 Application for specific licenses.

A A A A A (a) As provided by 6 30.35, certain applications for. specific licenses filed under this part and Parts 32 through 35 of this chapter must con-tain a proposed decommissionina funding plan or a certification of finan-cial assurance for decommissioning. In the case of renewal applications submitted before [ insert a date one year after the effective date of the final rule] this submittal may follow the renewal application but must be submitted on or before [ insert a date one year after the effective date of the final rule]. -

4. Section 30.33 is amended by deleting the word "and" following paragraph (a)(4), replacing the period following paragraph (a)(5) with a semi-colon, adding the word "and" following paragraph (a)(5), and adding a new paragraph (a)(6) to read as follows:

5 30.33 General requirements for issuance of specific licenses.

(a) An application for a specific license will be approved if:

a a a a *

(6) The applicant's proposed decommissioning funding plan or certification of financial assurance for decommissioning, if required by 6 30.35(a) or (b), includes sufficient information to demonstrate that the proposed funding method will provide reasonable assurance that funds will be available to decommission the facility in a safe and timely manner.

m a a a a i 5. Section 30.34 is amended by adding new paragraphs (h) and (i) to read as follows:

5 30.34 Terms and conditions of licenses.

A A A A A (h)(1) Each holder of a specific license issued on or after [ insert a date 1 year after the effective date of the final rule] which is of a type described in $30.35(a) or (b), shall provide financial assurance for decommissioning in accordance with the criteria set forth in S30.35.

(2) On or before [ insert a date one year after the effective date of the final rule], each holder of a specific license of a type described in 6 30.35(a) shall submit a decommissioning funding plan or a certificatiqn 8/17/84 42 Enclosure A

[7590-01) of financial assurance for decommissioning in an amount at least equal to $500,000 in accordance with the criteria set forth in 6 30.35. If the 2 licensee submits the certification of financial assurance rather than a

~

i decommissioning funding plan at this time, the licensee sha11 include a I

decommissioning funding plan in any application for license renewal. J

$ (3) On or before [ insert a date 1 year after the effective date of l l

< the final rule], each holder of a specific license of a type described in 530.35(b) shall submit a certification of financial assurance for l decommissioning or a decommissioning funding plan in accordance with s

the criteria set forth in 6 30.35. 1 (4) As of [ insert a date 1 year af ter the effective date of the final rule], each licensee covered by $30.35(a) or (b) shall provide i

financial assurance for decommissioning as a condition of license. If a decommissioning fundina plan has been submitted to the Commission,

! implementing the plan becomes a condition of the license upon approval j of the plan.

(1) Each person licensed under this part or Parts 32 through 35 l of this chapter shall keep records of information important to the safe and effective decommissioning of the facility in a file explicitly for

]

thispuboseuntilthelicenseisterminatedbytheCommission.

If

records of relevant information are kept for other purposes, refer-i ence to such records and their locations may be substituted. Informa- ,

tion the Commission considers important to decommissioning consists of--

(1) Records of spills or other unusual occurrences involving the spread of contamination in and around the facility, equipment, or site.

i These records may be limited to instances when significant contamination remains after any cleanup procedures or when there is reasonable likeli- l i hood that contaminants may have spread to inaccessible areas as in the i

j case of possible seepage into porous materials such as concrete. These records must include any known information on identification of involved nuclides, quantities, forms, and concentrations.

(2) As-built drawings and modifications of structures and equipment j

in high radiation areas and of locations of possible inaccessible contam-

! ination such as buried pipes which may be subject to contamination. If

! referencing such drawings, it is not necessary to index each individual relevant document. If drawings are not available, the licensee shall 8/17/84 43 Enclosure A l

[ . ae -i;]

substitute appropriate records of available information concernina these areas and locations.

i -

6. A new $ 30.35 is added to read as follows:

a 6 30.35 Financial assurance for decommissionina.

(a) Each applicant for a specific license authorizing the possession and use of unsealed byproduct material of half-life areater than 120 days l

j and in quantities exceedina 105 times the applicable quantities set forth in Appendix C of Part 20 shall submit a decommissioning funding plan as described in paragraph (d) of this section. Each holder of such a license shall provide financial assurance for decommissioning; required submittals for providing financial assurance are set out in 5 30.34(h)(2).

(b) Each applicant for or holder of a specific license authorizina possession and use of byproduct material of half-life areater than 120 days and in quantities specified in paracraph (c) of this section shall either--

(1) Submit a decommissioning fundina plan as described in paracraph (d) l

, of this section; or (2) Submit a certification that financial assurance for decommissioning has been provided in the amount prescribed by paragraph (c) of this section usina one of the methods described in paragraph (e) of this section. For an applicant, this certification may state that the appropriate assurance will be obtained after the application has been approved and the license issued but prior to the receipt of licensed 3

material.

l (c) Table of required amounts of financial assurance for decommis-j sionina by quantity of material.

i

creater than 104 but less than or $500,000 equal to 105 times the applicable j quantities of Appendix C of Part 20 in unsealed form areater than 103 but less than or $100,000 equal to 104 times the applicable cuantities of Appendix C of Part 20

• in unsealed form l

! 8/17/84 44 Enclosure A i

1

[7590-01) 1 areater than 1010 times the applicable $50,000 quantities of Appendix C of Part 20 in sealed sources -

(d) Each decommissioning funding plan must contain a cost estimate for decommissioning and a description of the method of assuring funds for decommissioning includina means of adjusting cost estimates and associated fundina levels over the life of the facility.

(e) Financial assurance for decommissioning must be provided by one or more of the following methods:

(1) Prepayment. Prepayment is the deposit prior to the start of

. operation into an account secrecated from licensee assets and outside the licensee's administrative control of cash or liquid assets that will retain their value over the projected operatina life of the facility and that are in amount such that the principal plus accumulated earnings would

be sufficient to pay decommissioning costs. Prepayment may be in the form i of a trust, escrow account, covernment fund, certificate of deposit, or deposit of covernment securities.

(2) A surety method or insurance. A surety method or insurance is a guarantee that decommissionina costs will be paid should the licensee l-default. A surety method may be in the form of a surety bond, letter of i- credit, line of credit, secured interest, or other cuarantee method.

! Any surety method or insurance used to provide financial assurance

! for decommissioning must contain the following conditions:

(i) The surety or insurance must he open-ended or, if written for a specified term, such as five years, must be renewed automatically unless 90 days or more prior to the renewal date, the issuer notifies the Commission, the beneficiary, and the licensee of its intention not to renew. The surety or insurance must also provide that the beneficiary may automatically collect prior to the expiration without proof of for-feiture if the licensee fails to provide a replacement acceptable to the Commission within 30 days after receipt of notification of cancellation.

(ii) The beneficiary of the surety or insurance must be a trustee acceptable to the Commission such as an appropriate state or Federal government agency or a major financial organization.

8/17/84 45 Enclosure A

[7590-01]

4 (iii) The surety or insurance must remain in effect until the Commission has terminated the license.

(3) An external sinking fund in which deposits are made at least annually, coupled with a surety method or insurance, the value of which may decrease by the amount being accumulated in the sinking fund.

An external sinking fund is a fund established and maintained by the  !

periodic deposit of a prescribed amount into an account segregated from licensee assets and outside the licensee's administrative control in which the total amount of the periodic deposits plus accumulated earnings would be sufficient to pay decommissioning costs at the time termination j of operation is expected. An external sinking fund may be in the form of a trust, escrow account, covernment fund, certificate of deposit, or deposit of government securities.

(4) In the case of Federal, State, or local government licensees, a certification that the appropriate government entity will be guarantor of decommissioning funds.

t (5) Other funding methods which are demonstrated by the applicant or licensee to provide comparable assurance to methods listed in paragraphs (c)(1) through (3) of this section.

l 4

7. Section 30.36 is revised to read as follows:

! $ 30.36 Expiration and termination of licenses.

! (a) Except as provided in 6 30.37(b) and paragraph [(d3(3)] (e) of this

, section, each specific license expires at the enc of the day, in the month and year stated in the license.

,i (b) Each licensee shall notify the Commission [immediately] promptly, in writing under i 30.6, and request termination of the license when the licensee decides to terminate all activities involving materials autho-rized under the license. This notification and request for termination l of the license must include the reports and information specified in l

l paragraphs [(d)](c)(1)(iv) and (v) of this section [-] and a plan for completion of decommissioning if required by paragraph (c)(2) of this l

section or by license condition. [The-iieensee-is-subject-to-the provisions-of paragraphs-(d3-snd-fe)-of-this-section--as-appifeebie-]

l l 8/17/84 46 Enclosure A i

[7590-01]

[(e)--No-iess-than-38-days-before-the-expiration-date-specified-in a-specific-license--the-iicensee-shall-either -

(13--Sebmit-en-application-for-iieense-renewei under-530:37--or (23--Notify-the-Eemmission--in-writing under-530:6--if-the-licensee decides-not-to-renew-the-ficense ]

[fd)] M (1) If a licensee does not submit an application for license renewal under 9 30.37, the licensee shall on or before the expiration date specified in the lic'ense -

(i) Terminate use of byproduct material; (ii) Remove radioactive contamination to the extent practicable except for those procedures covered by paragraph (c)(2)(i) of this section;

- (iii) Properly dispose of byproduct material; (iv) Submit a completed form NRC-314, which certifies information concerning the disposition of materials; and (v) [ Submit-a-radiation-survey-report-to-confirm-the-absence-of radioactive-materiais or-to-establish-the-ieveis-of-residuai-ridioactive contamination] Conduct a radiation survey of the premises where the licensed activities were carried out and submit a report of the results of this survey, unless the licensee demonstrates [the-absence-of-residual radioactive-contamination] that the premises are suitable for release -

for unrestricted use in some other manner. The licensee shall, as appropriate -

(A) Report levels of radiation in units of microrads per hour of beta and gamma radiation at one centimeter and gamma radiation at one meter from surfaces, and report levels of radioactivity in units of disintegrations per minute (or microcuries) per 100 square centimeters l removable and fixed [en] for surfaces, microcuries per milliliter [in]

l j for water, and picocuries per gram for [in-contaminated] solids such as I soils or concrete; and I

(B) Specify the survey instrument (s) used and certify that each instrument is properly calibrated and tested.

l [ff)--if-no-residuais radioactive-contamination-attributabie-to activities-conducted-ander-the-iicense-is-detected--the-iicensee-shall submit-a-certification-that-no-detectable-radioactive-contamination was l

8/17/84 47 Enclosure A i __ .. . - - - -

[7590-01]

1 found;--if-the-information-submitted-ander-this paragraph-and para-graphs-(d)(1)(iv)-and-(v) of-this-section-is-adequate--the-Eemmission wiii- no ti fy- the-ii c ens ee-i n-wri ti ng- th a t-t he-ii cen s e-i s- te mi n a t e d:

(S)(i)--if-detectabie-levels-of-residual-radioactive-contamination attributable-to-activities-conducted-ander-the-iicense-are-found--the license-centinues-in-effect-beyond-the-expiration-date--if-necessary-with-respect-to possession-of-residuai-byproduct-meterial present-as contamination-until-the-Eemmission-notifies-the-ficensee-in-writing-that the-license-is-terminated:--Baring-this-time--the-licensee-is-subject-to the provisions-of paragraph-(e)-of-this-section: '

(ii)--in-addition-to-the-information-submitted-under paragraphs-(d)

(1)(iv)-and-fv)-of-this-sectien-the-ficensee-shalf-submit-a plan-for decontamination--if-required--as-regards-residuai-radioactive-centamina-tion-remaining-at-the-time-the-iieense-expires ]

(2)(1) In addition to the information required under para-graphs (c)(1)(iv) and (v) of this section, the licensee shall submit a plan for completion of decommissioning if the procedures necessary to carry out decommissioning have not been previously approved by the NRC, are extensive, and could significantly increase potential health and safety impacts to workers or to the public such as in cases where --

(A) workers would be entering areas not normally occupied where surface contamination and radiation levels are significantly higher than routinely encountered during operation; or (B) procedures could result in significantly greater airborne concentrations of radioactive materials than are present during opera-tion; or (C) procedures could result in significantly greater releases of radioactive material to the environment than those associated with operation; or (D) procedures would involve techniques not applied routinely i during maintenance operations.

(ii) Procedures with potential health and safety impacts may not be carried out prior to approval of the decommissioning plan.

(iii) The proposed decommissioning plan, if required by paragraph (c)

(2)(i) of this section or by license condition, must include--

8/17/84 48 Enclosure A

i

[7590-01]

i 1

(A) Discussion of planned decommissionina activities:

(B) Description of methods used to assure protection of workers and the environment aaainst radiation hazards durina decommissionino:

i (C) A description of the planned final radiation survey: and (D) An updated detailed cost estimate for decommissioning, comparison of that estimate with present funds set aside for decomis- l sioning, and plan for assurina the availability of adequate funds for completion of decommissionina. i (iv) The proposed decommissioning plan will be approved by the Commission if the information therein demonstrates that the decommis-sioning will be completed as soon as is reasonable and that the health

and safety of workers and the public will be adequately protected.

(3) Upon approval of the decommissionina plan by the Commission, the licensee shall complete decommissionino in accordance with the approved plan. As a final step in decomissioning, the licensee shall aaain submit

the information required in paraaraoh (c)(1)(v) of this section and shall certify the disposition of accumulated wastes from decommissionina.

(d) If the information submitted under paragraphs (c)(1)(v) or (c)(3) of this section does not adequately demonstrate that the premises are suitable for release for unrestricted use, the Commission will inform j the licensee of the appropriate further actions required for termination of license.

(e) [Esch-licensee-who possesses-residosi-byprednet-meteriai-under paragraph-(d3(33 of-this-section--following-the-expiration-date-specified in-the-ifeense-shali---] Each specific license continues in effect l beyond the expiration date if necessary with respect to possession of

residual byproduct material present as contamination until the Comission l

notifies the licensee in writing that the license is terminated.

l During this time, the licensee shall--

(1) Limit actions involving byproduct material to those related l

to [ decontamination-and-other-activities-related-to preparation-for reiease-for-unrestricted-use] decomissioning; and j (2) Continue to control entry to restricted areas until they are suitable for release for unrestricted use and the Commission notifies

! the licensee in writing that the license is terminated.

l l

l

8/17/84 49 Enclosure A i

, , _...-,-.--_m.-- . - _ , _ - . - - . ._m., _ - . . - . --________-J

[7590-01]

(f) Specific licenses will be terminated by written notice to the licensee when the Commission determines that--

(1) Byproduct material has been properly disposed; *

(2) Reasonable effort has been made to eliminate residual radio-active contamination. if present; and (3)(i) A radiation survey has been performed which demonstrates that the premises are suitable for release for unrestricted use; or (ii) Other information submitted by the licensee is sufficient to demonstrate that the premises are suitable for release for unrestricted use.

PART 40 - DOMESTIC LICENSING OF SOURCE MATERIAL

8. The authority citation for Part 40 continues to read as follows:

AUTHORITY: Secs. 62, 63, 64, 65, 81, 161, 182, 183, 186, 68 Stat.

932, 933, 935, 948, 953, 954, 955, as amended, secs. 11e(2), 83, 84, Pub. L.95-604, 92 Stat. 3033, as amended, 3039, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2014(e)(2), 2092, 2093, 2094, 2095, 2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282); secs. 274, Pub. L.86-373, 73 Stat.

688 (42 U.S.C. 2021); secs. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846).

Section 40.7 also issued under Pub. L.95-601, sec. 10, 92 Stat.

2951 (42 U.S.C. 5851). Section 40.31 (g) also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152). Section 40.46 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234). Section 40.71 also issued under sec. 187, 68 Stat. 955 (42 U.S.C. 2237).

For the purposes of sec. 223, 68 Stat. 958, as ar. ended (42 U.S.C.

2273); $$ 40.3, 40.25(d)(1)-(3), 40.35(a)-(d), 40.41(b) and (c), 40.46, 40.51(a) and (c), and 40.63 are issued under sec. 161b, 68 Stat. 948, as amended, (42 U.S.C. 2201(b)); and $$ 40.25(c) and (d)(3) and (4),

40.26(c)(2), 40.35(e), 40.42, 40.61, 40.62, 40.64 and 40.65 are issued under sec. 161o, 68 Stat. 950, as amended (42 U.S.C. 2201(o)).

9. Section 40.4 is amended by adding a new paragraph (r) to read as follows:

6 40.4 Definitions.

A A A A A 8/17/84 50 Enclosure A

1 l

[7590-01]

(r) " Decommission" means to remove (as a facility) safely from service and reduce residual radioactivity to a level that permits

~

release of the property for unrestricted use and termination of license.

10. Section 40.31 is amended by adding a new paragraph (i) to read as follows:

$ 40.31 Applications for. specific licenses.

A A A R 2 (i) As provided by 6 40.36, certain applications for specific licenses filed under this part must contain a proposed decommissionina funding plan or a certification of financial assurance for decommissioning.

In the case of renewal applications submitted before [ insert a date one year after the effective date of the final rule] this submittal may follow the renewal application but must be submitted on or before [ insert a date one year after the effective date of the final rule].

11. Section 40.32 is amended by adding a new paragraph (g) to read as follows:

$ 40.32 General requirements for issuance of specific licenses.

An application for a specific license will be approved if:.

a n m a ,a (a) The applicant's proposed decommissioning funding plan or certi-fication of financial assurance for decommissionina, if required by E 40.36(a) or (b), includes sufficient information to demonstrate that the proposed funding method will provide reasonable assurance that funds will be available to decommission the facility in a safe and timely manner.

12. A new $ 40.36 is added to read as follows:

E 40.36 Financial assurance for decommissioning.

Except for licenses authorizina the receipt, possession, and use of source material for uranium or thorium millina, or byproduct material at sites formerly associated with such millina, for which financial assurance requirements are set forth in Appendix A of this part, criteria for pro-vidina financial assurance for decommissionina are as follows:

8/17/84 51 Enclosure A

[7590-01]

(a) Each applicant for a specific license authorizing the posses-sion and use of more than 100 mci of source material in a readily dispers-ible form shall submit a decommissioning funding plan. Each holder of such l a license shall provide financial assurance for decommissionina; required submittals for providina financial assurance are set out in i 40.41(f)(2).

(b) Each applicant for or holder of a specific license authorizina possession and use of quantities of source material areater than 10 mci but less than or equal to 100 sci in a readily dispersible form shall ei ther--

(1) Submit a decommissionina fundina plan as described in paraaraoh (c) of this section; or (2) Submit a certification that financial assurance for decommission-ina has been provided in the amount of $100,000 usina one of the methods described in paragraph (d) of this section. For an applicant, this certifi-cation may state that the appropriate assurance will be obtained after the application has been approved and the license issued but prior to the receipt of licensed material.

(c) Each decommissionina fundina plan must contain a cost estimate ,

for decommissioning and a description of the method of assurina funds for decommissionina including means of adjustina cost estimates and associated fundina levels over the life of the facility.

(d) Financial assurance for decommissionina must be provided by one or more of the following methods:

(1) Prepayment. Prepayment is the deposit prior to the start of l

operation into an account secrecated from licensee assets and outside l t

the licensee's administrative control of cash or liquid assets that will retain their value over the projected operatina life of the facility and that a_r_e in amount such that the principal plus accumulated earnings would be sufficient to pay decommissioning costs. Prepayment may be in the form j of a trust, escrow account, covernment fund, certificate of deposit, or deposit of government securities.

(2) A surety method or insurance. A surety method or insurance j

is a cuarantee that decommissionina costs will be paid should the licensee r default. A surety method may be in the form of a surety bond, letter of l credit, line of credit, secured interest, or other Quarantee method.

8/17/84 52 Enclosure A l __

[7590-01]

Any surety method or insurance used to provide financial assurance for decommissioning must contain the following conditions:

(i) The surety or insurance must be open-ended or, if written for a specified term, such as five years, must be renewed automatically unless 90 days or more prior to the renewal date, the issuer notifies the Commission, the beneficiary, and the licensee of its intention not to renew. The surety or insurance must also provide that the beneficiary may automatically collect prior to the expiration without proof of forfeiture if the licensee fails to provide a replacement acceptable to the Commis-sion within 30 days after receipt of notification of cancellation.

(ii) The beneficiary of the surety or insurance must be a trustee acceptable to the Commission such as an appropriate state or federal government agency or a major financial organization.

(iii) The surety or insurance must remain in effect until the '

Commission has terminated the license.

(3) An external sinking fund in which deposits are made at least annually, coupled with a surety method or insurance, the value of which may decrease by the amount being accumulated in the sinking fund. An external sinking fund is a fund established and maintained by the periodic deposit of a prescribed amount into an account segregated from licensee assets and outside the licensee's administrative control in which the total amount of the periodic deposits plus accumulated earnings would be suffi-cient to pay decommissioning costs at the time termination of operation is expected. An external sinking fund may be in the form of a trust, escrow account, government fund, certificate of deposit, or deposit of government securities.

(4) In the case of Federal, State, or local government licensees, a certification that the appropriate government entity will be guarantor of decommissioning funds.

(5) Other funding methods which are demonstrated by the applicant or licensee to provide comparable assurance to methods listed in para-graphs (c)(1) through (3) of this section.

8/17/84 53 Enclosure A

[7590-01]

i 1

13. Section 40.41 is amended by adding new paragraphs (f) and (g) to read as follows: , ,

5 40.41 Terms and conditions of licenses.

a a a a a j (f)(1) Each holder of a specific license issued on or after [ insert a date 1 year after the effective date of the final rule] which is covered by 6 40.36(a) or (b), shall provide financial assurance for decommission- l ina in accordance with the criteria set forth in 6 40.36.

(2) On or before [ insert a date one year after the effective date, of the final rule], each holder of a specific license covered by 6 40.36(a) shall submit a decommissioning funding plan or certification of financial assurance for decommissioning in an amount at least equal to $500,000 in accordance with the criteria set forth in 6 40.36. If the licensee submits the certification of financial assurance rather than a decommis-sioning fundina plan at this time, the licensee shall include a decommis-sioning funding plan in any application for license renewal.

(3) On or before [ insert a date 1 year after the effective date of the final rule], each holder of a specific license covered by 6 40.36(b) shall submit a certification of financial assurance for decommissionina ,

or a decommissioning funding plan in accordance with the criteria set forth in 6 40.36.

(4) As of [ insert date 1 year after the effective date of the final rule], each licensee covered by 6 40.36(a) or (b) shall provide financial assurance for decommissioning as a condition of license. If a decommis-sioning funding plan has been submitted to the Commission, implementing the plan becomes a condition of the license upon approval of the plan.

(a) Each person licensed under this part shall keep records of information important to the safe and effective decommissioning of the facility in a file explicitly for this purpose until the license is terminated by the Commission. If records of relevant information are kept for other purposes, reference to such records and their locations may be substituted. Information the Commission considers important to decommissioning consists of--

(1) Records of spills or other unusual occurrences involvina the spread of contamination in and around the facility, equipment, or site.

These records may be limited to instances when significant contamination 8/17/84 54 Enclosure A

[7590 ...

remains af ter any cleanup procedures or when there is reasonable likeli-hood that contaminants may have spread to inaccessible areas as in the case of possible seepage into porous materials such as concrete. These records must include any known information on identification of involved nuclides, quantities, forms, and concentrations.

(2) As-built drawings and modifications of structures and equip-ment in high radiation areas and of locations of possible inaccessible contamination such as buried pipes which may be subject to contamina-tion. If referencina such drawings, it is not necessary to index each individual relevant document. If drawings are not available, the licensee shall substitute appropriate records of available information concerning these areas and locations.

14 Section 40.42 is revised to read as follows:

5 40.42 Expiration and termination of licenses.

(a) Except as provided in 5 40.43(b) and paragraph [(d)(3)] M of this section, each specific license expires at the end of the day, in the month and year stated in the license.

(b) Each licensee shall notify the Commission [immediately]

promptly, in writing under 9 40.5, and request termination of the license when the licensee decides to terminate all activities involving materials authorized under the license. This notification and request for termina-tion of the license must include the reports and information specified in paragraphs [(d)] [cl (1)(iv) and (v) of this section[:] and a plan for completion of decommissioning, if required by paraaraph (c)(2) of this section or by license condition. [The-ficensee-is-subject-to-the provisions-of paragraphs-(d)-and-(e)-of-this-section;-as-applienbie.]

[(c)] No-iess-than-S0-days-before-the-expiration-date-specified-in e-specifie-iicense;-the-iicensee-shali-either --

-(13--Sebsit-en-application-for-iieense-renewei-ender-9-30:371-or l ( E)-- No ti fy- the - E emmi s s i o n;-i n-wri ti ng- ande r 30- 6;-i f- the-li c e n s e e de c i de s - no t- to- re new- t he-li c e ns e- ]

l [(d)] M (1) If a licensee does not submit an application for license renewal under 9 40.43, the licens*e shall on or before the expiration l date specified in the license--

! (i) Terminate use of source material; l

l 8/17/84 55 Enclosure A

i j .

[7590-01]

i (ii) Remove radioactive contamination to the extent practicable f except for those procedures covered by paragraph (c)(2)(1) of this

section; (iii) Properly dispose of source material; j (iv) Submit a completed form NRC-314, which certifies information i concerning the disposition of materials; and (v) [ Submit-a-rediation-servey-report-to-confira-the-absence-of i

radio acti ve-mate *i si s-of-to-es tabli s h-the-i eweis-of-resi dual-radi oacti v e

! contamination,] Conduct a radiation survey of the premises where the 4

licensed activities were carried out and submit a report of the results of this survey, unless the licensee demonstrates [the-absence-of-residuai

] radionetive-contamination] that the premises are suitable for release for iI unrestricted use in some'other manner. The licensee shall, as appropriate--

(A) Report levels of radiation in units of microrads per hour of beta and gamma radiation at one centimeter and gamma radiation at one meter from surfaces, and report levels of radioactivity in units of disintegra-tions per minute (or microcuries) per 100 square centimeters removable j and fixed [en] for surfaces, microcuries per milliliter [in] for water, and picocuries per gram for [in-contaminated] solids such as soils or cify the survey instrument (s) used and certify that each

instrument is properly calibrated and tested.

Eff3--if-no-resideai-radioactive-contamination-attributable-to

activities-conducted-ender-the-ficense-is-detected;-the-iicensee-shali

! submit-a-certification-that-no-detectabie-radioactive-contamination-was found;--if-the-information-submitted-ander-this paragraph-and paragraphs (d)(1)(iv3-and-(v)-of-this-section-is-adequate;-the-6ommission-wiii notify-the-iieensee-in-writing-that-the-iicense-is-terminated (3)(43--if-detectabie-ieveis-of-resideal-radioactive-contamination

! attributable-to-activities-conducted ander-the-license-are-found;-the l iicense-continues-in-effect-beyond-the-expiration-date;-if-necessary; with-respect-to possession-of residasi-byprodnet-meterial present-as co ntami nati o n- untii- the-6 ommi s s i on- noti fies-the-fi c ens ee-i n-wri ti ng-t h at I

the-ii cens e-i s-termi nated:-- Bari ng- thi s- time;-the-ii t. en s ee-i s-s ab j ec t- t o the provisions-of paragraph-(e)-of-this-section:-

8/17/84 56 Enclosure A

[7590-01]

i (ii)--in-addition-to-the-information-submitted-ander paragraphs (d)(1)(iv)-and-(v)-of-this-ssecien-the-iicensee-shell-submit-a pian-for decentsmination--if-required--as-regards-residuai-radioactfve-contamination remai ni ng- st- the- ti me- the-li c e ns e- ex p i re s - ]

(2)(i) In addition to the information required under para-graphs (c)(1)(iv) and (v) of this section, the licensee shall submit a plan for completion of decommissioning if the procedures necessary to carry out decommissioning have not been previously approved by the NRC, are extensive, and could significantly increase potential health ayd safety impacts to workers or to the public such as in cases where --

(A) workers would be entering areas not normally occupied where surface contamination and radiation levels are significantly higher than routinely encountered during operation; or (B) procedures could result in significantly greater airborne concentrations of radioactive materials than are present during opera-tion; or (C) procedures could result in significantly greater releases of radioactive material to the environment than those associated with operation; or (D) procedures would involve techniques not applied routinely during maintenance operations.

(ii) Procedures with potential health and safety impacts may not be carried out prior to approval of the decommissioning plan.

(iii) Theproposeddecommissioningplan,ifrequiredbyparagraph(c}

(2)(1) of this section or by license condition, must include--

(A) Discussion of planned decommissioning activities; (B) Description of methods used to assure protection of workers and the environment against radiation hazards during decommissioning; (C) A description of the planned final radiation survey; and (D) An updated detailed cost estimate for decommissioning, comparison of that estimate with present funds set aside for decommis-sioning, and plan for assuring the availability of adequate funds for completion of decommissioning.

i 8/17/84 57 Enclosure A

[7590-01)

(iv) The proposed decommissioning plan will be approved by the I

Commission if the information therein demonstrates that the decommis-sioning will be completed as soon as is reasonable and that the health and safety of workers and the public will be adequately protected.

(3) Upon approval of the decommissioning plan by the Commission, the licensee shall complete decommissioning in accordance with the approved plan. As a final step in decommissioning, the licensee shall again submit the information required in paragraph (c)(1)(v) of this section and shall certify the disposition of accumulated wastes from decommissioning.

(d) If the information submitted under paragraphs (c)(1)(v) or (c)(3) of this section does not adequately demonstrate that the premises are suitable for release for unrestricted use, the Commission will inform the licensee of the appropriate further actions required for termination of license.

(e) [Each-licensee-who possesses-residuai-source-material-under p a rag ra p h-( d)( 33 - o f-thi s- s e cti o n--f eli ewi n g- th e- e xpi rati o n-da te-s peci fi e d in-the-iicense-shali -] Each specific license continues in effect beyond the expiration date if necessary with respect to possession of residual source material present.as contamination until the Commission notifies the licensee in writing that the license is terminated. During this time, the licensee shall--

(1) Limit actions involving source material to those related to [ decontamination-and-other-activities-reisted-to preparation-for release-for-unrestricted-use] decommissioning; and (2) Continue to control entry to restricted areas until they are suitable for release for unrestricted use and the Commission notifies the licensee in writing that the license is terminated.

(f) Specific licenses will be terminated by written notice to the licensee when the Commission determines that--

(11_ Source material has been properly disposed; (2) Reasonable effort has been made to eliminate residual radio-active contamination, if present; and (3)(i) A radiation survey has been performed which demonstrates that the premises are suitable for release for unrestricted use; or 8/17/84 58 Enclosure A

[7590-01]

(ii) Other information submitted by the licensee is sufficient to demonstrate that the premises are suitable for release for unrestricted use. -

PART 50 - DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION FACILITIES

15. The authority citation for Part 50 continues to read as follows:

AUTHORITY: Secs. 103, 104, 161, 182, 183, 186, 189, 68 Stat. 936, 937, 948, 953, 954, 955, 956, as amended, sec. 234, 83 Stat. 1244, as amended (42 U.S.C. 213,1, 2134, 2201, 2232, 2233, 2236, 2239, 2282); secs. 201, 202, 206, 88 Stat. 1242, 1244, 1246, as amended (42 U.S.C. 5841, 5842, 5846), unless otherwise noted.

Section 50.7 also issued under Pub. L.95-601, sec. 10, 92 Stat.

2951 (42 U.S.C. 5851). Sections 50.57(d), 50.58, 50.91, and 50.92 also issued under Pub. L.97-415, 96 Stat. 2071, 2073 (42 U.S.C. 2133, 2139).

Section 50.78 also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152).

Sections 50.80-50.81 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234). Sections 50.100-50.102 also issued under sec. 186, ~

68 Stat. 955 (42 U.S.C. 2236).

For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C.

2273), SS 50.10(a), (b), and (c), 50.44, 50.46, 50.48, 50.54, and 50.80(a) are issued under sec. 161b, 68 Stat. 948, as amended (42 U.S.C.

2201(b)); $$ 50.10(b) and (c) and 50.54 are issued under sec. 1611, 68 Stat. 949, as amended (42 U.S.C. 2201(i)); and S$50.55(e), 50.59(b),

50.70, 50.71, 50.72, 50.73, and 50.78 are issued under sec. 161o, 68 Stat.

950, as amended (42 U.S.C. 2201(o)).

16. Section 50.2 is amended by adding a new paragraph (y) to read as follows:

5 50.2 Definitions.

a a a m m

(y) " Decommission" means to remove (as a facility) safely from service and reduce residual radioactivity to a level that permits release of the property for unrestricted use and termination of license.

8/17/84 59 Enclosure A

[7590-01]

17. Section 50.33 is amended by revising the introductory text of paragraph (f)(1), revising paragraphs (f)(1)(ii) and (f)(3) and adding paragraph (k) to read as follows:

• 5 50.33 Contents of applications; general information.

Each application shall state:

a a a a =

(f)(1) Information sufficient to demonstrate to the Commission the financial qualifications of the applicant to carry out, in accordance with regulations in this chapter, the activities for which the permit or license is sought. However, no information on financial qualifications,'

including that in paragraphs (f)(1)(i) and (ii) of this section, is required in any application, [nor-shali-any-financial-review-be-conducted]

if the applicant is an electric utility applicant for a license to con-struct or operate a production or utilization facility of the type described in 6 50.21(b) or 9 50.22, and no review of financial qualifica-tions will be conducted, notwithstanding that a cost estimate and funding method for decommissioning are required of any applicant for an operatina license for a production or utilization facility by paragraph (k) of this sectio'n.  !

a a a a m (ii) If the application is for an operating license, the applicarit shall submit information that demonstrates the applicant possesses or has reasonable assurance of obtaining the funds necessary to cover estimated operation costs for the period of the license, plus the estimated costs of decommissioning [ptemenentiy-shutting] the facility.

[down-and-mai ntai ni ng-i t-in- a-s af e-condi tion] The applicant shall

. submit estimates for total annual operating costs for each of the first

! five years of operation of the facility and estimates of the costs to 1

l decommission [ permanently-shut-down] the facility. [and-maintain-it-in l a-safe-condition] The applicant shall also indicate the source (s) of funds to cover these costs. An application to renew or extend the term of an operating license must include the same financial information as required in an application for an initial license.

m a a a a 8/17/84 60 Enclosure A l

l . _

.-590-01]

(3) ( Except- that- f or- el ectri e- atili ty- appli c a nts- f or- ce ns truc ti o n permits-and-operating-iicenses] The Commission may request an established entity or newly-formed entity to submit additional or more* detailed information respecting its financial arrangements and status of funds if the Commission considers this information appropriate. This may include information regarding a licensee's ability to continue the conduct of the activities authorized by the license and to decommission [ permanently-shut-down] the facility. [ an d- mai ntai n-i t-i n- a- s a f e- c o n di ti o $ . A request for financial information addressed to an electric utility applicant for a construction permit or an operating license will be limited to information directly related to providing financial assurance for de ommissioning.

A A A R R (k)(1) For an application for an operating license for a production or utilization facility, information on how reasonable assurance will be provided that funds will be available to decommission the facility. This information must consist of eif.her a proposed decommissioning funding plan that contains a cost estimate for decommissioning and a description of the method of assuring funds for decommissioning including means of adjusting cost estimates and associated funding levels over the life of the facility, or, in the case of an electric utility, a certifica-tion that financial assurance for decommissioning will be provided in the amount of $100,000,000 using a means acceptable to the Commission for providing such assurance as specified in paragraphs (k)(2) and (4) of this section.

(2) As provided in paragraphs (k)(3) and (4) of this section, financial assurance may be provided by the following methods:

(i) Prepayment. Prepayment is the deposit prior to the start of operation into an account segregated from licensee assets and outside the licensee's administrative control of cash or liquid assets that will retain their value over the projected operating life of the facility and that are in amount such that the principal plus accumulated earnings would be sufficient to pay decommissioning costs. Prepayment may be in  ;

the form of a trust, escrow account, government fund, certificate of f deposit, or deposit of government securities.

8/17/84 61 Enclosure A l

[7590-01)

(ii) External sinking fund. An external sinking fund is a fund established and maintained by the periodic deposit of a prescribed amount into an account segregated from licensee assets and outside the licensee's administrative control in which the total amount of the  ;

periodic deposits plus accumulated earnings would be sufficient to pay '

decommissioning costs at the time termination of operation is expected.

An external sinking fund may be in the form of a trust, escrow account, government fund, certificate of deposit, or deposit of government securities.

(iii) A surety method or insurance. A surety method or insurance is a guarantee that decommissioning costs will be paid should the licensee default. A surety method may be in the form of a surety bond, letter of credit, line of credit, secured interest, or other guarantee method.

Any surety method or insurance used to provide financial insurance for decommissioning must contain the following conditions:

(A) The surety or insurance must be open-ended or, if written for a specified term, such as"five years, must be renewed automatically unless 90 days or more prior to the renewal date, the issuer notifies the Commission, the beneficiary, who must be a Commission-approved trustee, "

and the licensee of its intention not to renew. The surety or insurance must also provide that the beneficiary may automatically collect prior to the expiration without proof of forfeiture if the licensee fails to provide a replacement acceptable to the Commission within 30 days after receipt of notification of cancellation.

(B) The surety or insurance must remain in effect until the Commission has terminated the license.

(iv) Internal reserve. Internal reserve is a fund established and maintained by the periodic deposit or crediting of a prescribed amount into an account or reserve which is not segregated from licensee assets and is within the licensee's administrative control in which the total amount of the periodic deposits or funds reserved plus accumulated earnings would be sufficient to pay for decommissioning at the time termination of operation is expected. This method may use negative net salvage value depreciation in which funds are invested in licensee assets, and at the end of facility life, bonds are issued against these assets and the funds raised are used to pay for decommissioning. An internal reserve 8/17/84 62 Enclosure A

b 4

[7590-01]

I may also be in the form of an internal sinking fund which is similar to an external sinking fund except that the fund is he?d and invested by the licensee. -

(3) Except for an electric utility, acceptable methods of providing financial assurance for decommissioning are--

(i) Prepayment; ,

(ii) An external sinking fund, in which deposits are made at least  !

annually, coupled with a surety method or insurance, the value of which i

may decrease by the amount oeing accumulated in the sinking fund, (iii) A surety method or insurance;

- (iv) In the case of Federal, State, or local government licensees, certification that the appropriate government entity will be quarantor of decommissioning funds; and (v) Other funding methods which are demonstrated by the applicant or licensee to provide comparable assurance to methods listed in paragraphs (k)(3)(1) through (iv) of this section.

l

> (4) For an electric utility, acceptable methods of providing financial assurance for decommissioning are--

(i) Prepayment; a

(ii) An external sinking fund in which deposits are made at least annually; (iii) A surety method or insurance; (iv) For an electric utility owning more than one generating facility, an internal reserve in which deposits are made at least annually; and (v) Other funding methods which are demonstrated by the applicant 1

or licensee to provide comparable assurance to methods listed in paragraphs (k)(4)(i) through (iv) of this section.

18. Section 50.51 is revised to read as follows:

$ 50.51 Duration of license, renewal.

Each license will be issued for a fixed period of time to be speci-fied in the license but in no case to exceed 40 years from the date of issuance. Where the operation of a facility is involved the Commission will issue the license for the term requested by the applicant or for the estimated useful life of the facility if the Commission determines 8/17/84 63 Enclosure A 1 - + r --w. -r-- --.--,.-.,--.3 ---i,. a

[7590-01]

that the estimated useful life is less than the term requested. Where construction of a facility is involved, the Commission may specify in the construction permit the period for which the license will be issued if approved pursuant to 650.56. Licenses may be renewed by the Commis-sion upon the expiration of the period. Unless application for renewal has been made, application for termination of license pursuant to 6 50.82 must be made no later than one year prior to the license expiration date.

19. Section 50.54 is amended by adding new paragraphs (bb) and (cc) to read as follows:

9 50.54 Conditions of licenses.

Whether stated therein or not, the following shall be deemed condi-tions in every license issued:

a a a a m

(bb)(1) Each holder of an operating license for a production or utilization facility issued on or after [ insert a date 2 years after the effective date of the final rule] shall provide financial assurance for decommissioning in accordance with an approved decommissioning funding plan or by means of a certification as provided in 6 50.33(k)(1).

1 (2) On or before [ insert a date two years after the effective date of the final rule], each holder of an operating license for a production or utilization facility in effect on [ insert date immediately preceding the date two years after the effective date of the final rule] shall i submit information on providina financial assurance for decommissioning

! as specified in 6 50.33(k). Upon approval of a decommissioning fundina plan by the Commission, the licensee shall implement procedures for providing financial assurance for decommissionina in accordance with the plan. In each certification of financial assurance, the licensee i

shall indicate that the means of providing financial assurance for decommissioning are in place.

(3) A decommissioning funding plan will be approved if it includes sufficient information to demonstrate that a reasonable level of assurance will be provided that funds will be available when needed to cover the

~ costs of decommissioning.

(cc) Each licensee shall keep records of information important to the safe and effective decommissioning of the facility in a file explicitly 8/17/84 64 Enclosure A

• o

[7590-01) for this purpose until the license is terminated by the Commission. If records of relevant information are kept for other purposes, reference to such records and their locations may be substituted. Infor~mation the Commission considers important to deccamissioning consists of -- ,

(1) Records of spills or other unusual occurrences involving the spread of contamination in and around the facility, equipment, or site.

These records may be limited to instances when significant contamination remains after any cleanup procedures or when there is reasonable likelihood that contaminants may have spread to inaccessible areas as in the case of possible seepage into porous materials such as concrete. These records must include any known information on identification of involved nuclides, quantities, forms, and concentrations.

(2) As-built drawings and modifications of structures and equipment in high radiation areas and of locations of possible inaccessible con-tamination such as buried pipes which may be subject to contamination. .

If referencing such drawings, it is not necessary to index each indi-vidual relevant document. If drawings are not available, the licensee shall substitute appropriate records of available information concerning these areas and locations.

20. Section 50.55 is amended by revising paragraph (c) to read as follows:

9 50.55 Conditions of construction permits.

Each const*uction permit shall be subject to the following terms and conditions:

a a a a a l (c) Except as modified by this section and 9 50.55a, the construc-l tion permit shall be subject to tne same conditions to which a license

! is subject, not including 9 50.54(bb).

a a a a a

21. Section 50.82 is revised to read as follows:

6 50.82 Applications for termination of licenses.

(a) Any licensee may apply to the Commission for authority to l

i surrender a license voluntarily and to decommission the facility. For a t

l facility that permanently ceases operation after [ insert effective date 8/17/84 65 Enclosure A

o . .

[7590-01 of the final rule] this application must be made within two years follow-ina permanent cessation of operations, and in no case later than one year prior to expiration of the operating license. Each application for termination of license must be accompanied, or preceded, by a proposed decommissioning plan. For a facility which has permanently ceased

, operation prior to [ insert effective date of the final rule], require-ments for contents of the decommissioning plan as specified in ,

paragraphs (b) through (d) of this section may be modified with approval of the Commission to reflect the fact that the decommissionina precess .

has previously been initiated.

(b) The proposed decommissionina plan must include--

(1) The choice of the alternative for decommissioning with a description of activities involved. Alternative methods for decom-missionina which sianificantly delay completion of decommissionina such as use of a storage period, will be acceptable if sufficient benefit i results; (2) A description of controls and limits on procedures and equip-ment to protect occupational and public health and safety; (3) A description of the planned final radiation survey; (4) An updated cost estimate for the chosen alternative for decommissioning, comparison of that estimate with present funds set aside for decommissionina, and plan for assuring the availability of adequate funds for completion of decommissioning.

(c) Decommissionina plans which propose an alternative that delays completion of decommissionina by includina a period of storace or long-term surveillance must provide that--

(1) Funds needed to complete decommissionina be placed into an account secreaated from licensee assets and outside the licensee's admin-istrative control during the storace or surveillance period, or a surety method or fund certification be maintained in accordance with the criteria of f 50.33(k); and

- (2) Means be included for adjusting cost estimates and associated fundina levels over the storaae or surveillance period. l l

l \

l 8/17/84 66 Enclosure A

. _ ~ _ _ ._ __ _

[7590-01)

(d) For decommissioning plans in which the major dismantlement activities are delayed by first placing the facility in storage, plan-ning for these delayed activities may be less detailed. Up' dated detailed plans must be submitted and approved prior to the start of these activities.

(e) If the decommissioning plan demonstrates that the decomitisioning will be performed in accordance with the regulations in this chapter and will not be inimical to the common defense and security or to the health and safety of the public, and after notice to interested persons, the Commission will issue an order authorizing the decommissioning.

(f) The Commission will terminate the license if it determines that--

(1) The decommissioning has been performed in accordance with an approved decommissioning plan and any conditions in the order authorizing decommissioning; and (2) The terminal radiation survey and associated documentation demonstrates that the facility and site are suitable for release for unrestricted use.

PART 51 - ENVIRONMENTAL PROTECTION REGULATIONS FOR DOMESTIC LICENSING AND RELATED REGULATORY FUNCTIONS

22. The authority citation for Part 51 continues to read as follows:

AUTHORITY: Sec. 161, 68 Stat. 948, as amended (42 U.S.C. 2201);

secs. 201, as amended, 202, 88 Stat. 1242, as amended, 1244 (42 U.S.C.

5841,5842).

Subpart A also issued under National Environmental Policy Act of 1969',

secs. 102, 104, 105, 83 Stat. 853-854, as amended (42 U.S.C. 4332, 4334, 4335); and Pub. L.95-604, Title II, 92 Stat. 3033-3041. Section 51.22 i also issued under sec. 274, 73 Stat. 688, as amended by 92 Stat. 3036-

3038 (42 U.S.C. 2021).

$51.20 [ Amended]

23. Section 51.20 is amended by removing paragraphs (b)(5) and (10).

8/17/84 67 Enclosure A

[7590-01]

24. Section 51.22 is amended by adding a new paragraph (c)(19) to read as follows:

$ 51.22 Criterion for and identification of licensing and regulatory actions eligible for categorical exclusion.

a a a a n (c) The following categories of actions are categorical exclusions:

a a a a *

(19) Approvals of decommissioning funding plans.

25. Section 51.53 is revised to read as follows:

$ 51.53 Supplement to Environmental Report. [--Sperating-iieense-stage-]

(a) Operating license stage Each applicant for a license or for renewal of a license to operate a production or utilization facility covered by 5 51.20 shall submit with its application the number of copies, as specified in 5 51.55, of a separate document, entitled " Supplement to Applicant's Environmental Report - Operating License Stage," which will update " Applicant's Environmental Report - Construction Permit Stage." Unless the applicant

$ requests the renewal of an operating license or unless otherwise required

! by the Commission, the applicant for an operating. license for a nuclear power reactor shall submit this report only in connection with the first i licensing action authorizing full power operation. In this report, the applicant shall discuss the same matters described in $5 51.45, 51.51 and 51.52, but only to the extent that they differ from those discussed or reflect new information in addition to that discussed in the final environmental impact statement prepared by the Commission in connection with the construction permit. Unless otherwise required by the Commis-sion, no discussion of need for power or alternative energy sources or alternative sites for the facility is required in this report.

The

" Supplement to Applicant's Environmental Report - Operating License Stage" may incorporate by reference any information contained in the

" Applicant's Environmental Report - Construction Permit Stage," final environmental impact statement or record of decision previously prepared in connection with the construction permit.

s 8/17/84 68 Enclosure A

[7590-01)

(b) Decommissioning stage. Each applicant for a license amendment authorizing the decommissioning of a production or utilization facility covered by 6 51.20 shall submit with its application the number of copies, as specified in f 51.55, of a separate document, entitled " Supplement to Applicant's Environmental Report - Decommissioning Stage," which will update " Applicant's Environmental Report - Construction Permit Stage" and " Supplement to Applicant's Environmental Report - Operating License Stage," as appropriate, to reflect any new information or significant environmental change associated with the applicant's proposed decom-missioning activities. The " Supplement to Applicant's Environmental Report - Decommissioning Stage" may incorporate by reference any informa-tion contained in the " Applicant's Environmental Report - Constructi,on Permit Stage," " Supplement to Applicant's Environmental Report - Operat-ing License Stage," final environmental impact statement, or record of decision previously prepared in connection with the construction per,ait or the operating license.

26. In 5 51.55, paragraph (a) is revised to read as follows:

9 51.55 Environmental Report - Number of copies; Distribution.

(a) Each applicant for a license to construct and operate a produc-tion or utilization facility covered by paragraphs (b)(1), (b)(2), (b)(3) or (b)(4) of 6 51.20 [or-for-a-iicense amendment-covered-by paragraph (b3(53-of-9-51-20] and each applicant for a license amendment authoriz-ing the decommissioning of a production or utilization facility covered by 6 51.20 shall submit to the Director of Nuclear Reactor Regulation or the Director of Nuclear Material Safety and Safeguards, as appropriate, in accordance with 6 50.30(c)(1)(iv) of Part 50 of this chapter, forty-one (41) copies of an environmental report, or any supplement to an envi-ronmental report. The applicant shall retain an additional 109 copies of the environmental report or any supplement to the environmental report for ,

distribution to parties and Boards in the NRC proceeding, Federal, State, and local officials and any affected Indian tribes, in accordance with written instructions issued by the Director of Nuclear Reactor Regulation or the Director of Nuclear Material Safety and Safeguards, as appropriate.

a a a a a 8/17/84 69 / Enclosure A

_ _ - . _ ,O__..- - - _

[7590-01]

27. In S 51.60, paragraph (a) is revised to read as follows:

6 51.60 Environmental Report - Materials licenses.

(a) Each applicant for a license or other form of pe~rmission, or an amendment to or renewal of a license or other form of permission issued pursuant to Parts 30, 32, 33, 34, 35, 40, 61, 70 and/or 72 of this chapter, and covered by paragraphs (b)(1)-(b)(6) of this section, shall submit with its application to the Director of Nuclear Material Safety and Safe-guards the number of copies, as specified in S 51.66, of a separate docu-ment, entitled " Applicant's Environmental Report" or " Supplement to Appli-cant's Environmental Report," as appropriate. The " Applicant's Environ-mental Report" shall contain the information specified in S 51.45. If the application is for an amendment to or a renewal of a license or other form of permission for which the applicant has previously submitted an environmental report, the supplement to applicant's environmental report may be limited to incorporating by reference, updating or supplementing the information previously submitted to reflect any significant environ-mental change, including any significant environmental change resulting from operational experience or a change in operations [-] or proposed decommissioning activities.

n a a a a PART 70 - DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL

28. The authority section for Part 70 is revised to read as follows:

AUTHORITY: Secs. 51, 53, 161, 182,-183, 68 Stat. 929, 930, 9'48, 953, , .

954, as anended, Sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 2201, 2232, 2233, 2282); secs. 201, as amended, 202, 204, 206, 88 Stat.

1242, as amended, 1244, 1245, 1246 (42. U.S.C. 5841, 5842, 5845, 5846).

Section 70.7 also issued under Pub. L.95-601, sec. 10, 92 Stat.

2951 (42 U.S.C. 5851). Section 70.21(g) also issued under Sec. 122, 68 Stat. 939 (42 U.S.C. 2152). Section 70.31 also issued under sec. 57d, Pub. L.93-377, 88 Stat. 475 (42 U.S.C. 2077). Sections 70.36 and 70.44 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234).

8/17/84 70 Enclosure A

[7590-01]

Section 70.61 also issued under secs. 186, 187, 68 Stat. 955 (42 U.S.C.

2236,2237). Section 70.62 also issued under sec. 108, 68, Stat. 939, as amended (42 U.S.C. 2138).

For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C.

2273), SS 70.3, 70.19(c), 70.21(c), 70.22(a), (b), (d)-(k), 70.24(a) and (b), 70.32(a)(3), (5), (6), (d), and (i), 70.36, 70.39(b) and (c),

70.41(a), 70.42(a) and (c), 70.56, 70.57(b), (c) and (d), 70.58(a)-(g)(3),

and (h)-(j) are issued under sec. 161b, 68 Stat. 948 as amended (42 U.S.C.

2201(b)); SS 70.7, 70.20a(a) and (d), 70.20b (c) and (e), 70.21(c), 70.24(b),

70.32(a)(6), (c), (d), (e), and (g), 70.36,70.51(c)-(g),70.56,70.57(b) and (d) and 70.58(a)-(g)(3), and (h)-(j) are issued under sec. 1611, 68 Stat.

~

949, as amended (42 U.S.C. 2201(i)); and SS 70.20b(d) and (e), 70.51(b) and (i), 70.52, 70.53, 70.54, 70.55, 70.58(g)(4), (k), and (1), 70.59 and 70.60(b) and (c) are issued under sec. 1610, 68 Stat. 950, as amended (42 U.S.C. 2201(o)).

29. Section 70.4 is amended by adding a new paragraph (x) to read

. as follows:

6 70.4 Definitions. ,

a a a * *

(x) " Decommission" means to remove (as a facility) safely from service and reduce residual radioactivity to a level that permits release of the property for unrestricted use and termination of license.

l

30. Section 70.22 is amended by adding a new paragraph (a)(9) to l read as follows:

$ 70.22 Contents of applications.

(a) Each application for a license shall contain the following information:

a a a a *

(9) As provided by 6 70.25, certain applications for specific licenses filed under this part must contain a proposed decommissioning funding plan or a certification of financial assurance for decommissioning, l

l 8/17/84 71 Enclosure A l

i

-= . . - _-- _ . - .

l':h-31]

In the case of renewal applications submitted before [ insert a date one year after the effective date of the final rule] this submittal may follow the renewal application but must be submitted on or before [ insert a date one year after the effective date of the final rule].

• * *

• a

31. Section 70.23 is amended by adding a new paragraph (a)(12) to read as follows: -

6 70.23 Requirements for the approval of applications.

(a) An application for a license will be approved if the Commission determines that; a a a a a (12) The applicant's proposed decommissioning funding plan or certification of financial assurance for decommissioning, if required by 6 70.25(a) or (b), includes sufficient information to demonstrate that the proposed funding method will provide reasonable assurance that sufficient funds will be available to decommission the facility in a safe and timely manner.

• *

• a a

32. A new $ 70.25 is added to read as follows: ,

9 70.25 Financial assurance for decommissioning.

(a) Each applicant for a specific license authorizing the possession and use of unsealed special nuclear material in quantities exceeding .

105 times the applicable quantities set forth in Appendix C of Part 20 shall submit a decommissioning funding plan as described in paragraph

! (d) of this section. Each holder of such a license shall provide financial l assurance for decommissioning; required submittals for providing financial j assurance are set out in 6 70.32(k)(2).

l (b) Each applicant for or holder of a specific license authorizing possession and use of unsealed special nuclear material in quantities specified in paragraph (c) of this section shall either--

i (1) Submit a decommissioning funding plan as described in paragraph (d) of this section; or l

l l

8/17/84 72 Enclosure A l

? -, -_-. - - _ _ _ _ - . . _ _ - - - _. . - , __ -- -_

(7590-01]

(2) Submit a certification that financial assurance for decommission-ing has been provided in the amount prescribed by paragraph (c) of this section using one of the methods described in paragraph (e) of this section. For an applicant, this certification may state that the appro-priate assurance will be obtained after the application has been approved and the license issued but prior to the receipt of licensed material.

(c) Table of required amounts of financial assurance for decommis-sioning by quantity of material.

greater than 104 but less than or equal to $500,000 105 times the applicable quantities of Appendix C of Part 20 greater than 103 but less than or equal to $100,000 104 times the applicable quantities of Appendix C of Part 20 (d) Each decommissioning funding plan must contain a cost estimate for decommissioning and a description of the method of assuring funds for decommissioning including means of adjusting cost estimates and associated funding levels over the life of the facility.

(e) Financial assurance for decommissioning must be provided by one or more of the following methods:

-(1) Prepayment. Prepayment is the deposit prior to the start of operation into an account segregated from licensee assets and outside the licensee's administrative control of cash or liquid assets that will retain their value over the projected operating life of the facility and that are in amount such that the principal plus accumulated earnings would be sufficient to pay decommissioning costs. Prepayment may be in the form of a trust, escrow account, government fund, certificate of deposit, or deposit of government securities.

(2) A surety method or insurance. A surety method or insurance is a guarantee that decommissioning costs will be paid should the licensee default. A surety method may be in the form of a surety bond, letter of credit, line of credit, secured interest, or other guarantee method. Any 8/17/84 73 Enclosure A

[7590-01]

surety method or insurance used to provide financial assurance for decommissioning must contain the following conditions:

~

(i) The surety or insurance must be open-ended or, if written for a specified term, such as five years, must be renewed automatically unless 90 days or more prior to the renewal date, the issuer notifies the Commission, the beneficiary, and the licensee of its intention not to renew. The surety or insurance must also provide that the beneficiary may automatically collect prior to the expiration without proof of forfei-ture if the licensee fails to provide a replacement acceptable to the Commission within 30 days after receipt of notification of cancellation.

(ii) The beneficiary of the surety or insurance must be a trustee acceptable to the Commission such as a'n appropriate state or federal government agency or a major financial organization.

(iii) The surety or insurance must remain in effect until the Commission has terminated the license.

(3) An external sinking fund in which deposits are made at least annually, coupled with a surety method or insurance, the v$lue of which may decrease by the amount being accumulated in the sinking fund. An external sinking fund is a fund established and, maintained by the periodic deposit of a prescribed amount into an account segregated from licensee assets and outside the licensee's administrative control in which the total amount of the periodic deposits plus accumulated earnings would be suffi-cient to pay decommissioning costs at the time termination of operation is expected. An external sinking fund may be in the form of a trust, escrow account, government fund, certificate of deposit, or deposit of government securities.

(4) In the case of Federal, State, or local government licensees, a certification that the appropriate government entity will be guarantor of decommissionina funds.

(5) Other funding methods which are demonstrated by the applicant or licensee to provide comparable assurance to methods listed in para-graphs (c)(1) through (3) of this section.

l 8/17/84 74 Enclosure A

4

[7590-01] j

33. Section 70.32 is amended by adding new paragraphs (k) and (1) to read as follows:

' ~

$ 70.32 Conditions of licenses.

{ a a a a a (k)(1) Each holder of a specific license issued on or after [ insert a date 1 year after the effective date of the final rule] which is of a type described in 6 70.25(a) or (b), shall provide financial assurance j for decommissioning in accordance with the criteria set forth in 6 70.25.

(2) On or before [ insert a date 1 year after the effective date of 1 the final rule] each holder of a specific license of a type described in 6 70.25(a) shall submit a decommissioning funding plan or certifica-tion of financial assurance for decommissioning in an amount at least equal to $500,000 in accordance with the criteria set forth in 6 70.25.

]

If the licensee submits the certification of financial assurance rather than a decommissioning fundina plan at this time, the licensee shall include a decommissioning funding plan in any application for license renewal.

(3) On or before [ insert a date 1 year after the effective date of the final rule] each holder of a specific license of a type described in 6 70.25(b) shall submit a certification of financial assurance for decommissioning or a decommissioning funding plan in accordance with the criteria set forth in 6 70.25.

(4) As of [ insert a date 1 year after the effective date of the final rule] each licensee covered by 6 70.25(a) or (b) shall provide financial assurance for decommissioning as a condition of license. If a decommissioning funding plan has been submitted to the Commission, implementing the plan becomes a condition of the license upon approval of the plan.

(1) Each person licensed under this part shall keep records of information important to the safe and effective decommissioning of the facility in a file explicitly for this purpose until the license is terminated by the Commission. If records of relevant information are kept for other purposes, reference to such records and their locations may be substituted. Information the Commission considers important to decommissioning consists of--

8/17/84 75 Enclosure A

[7590-01]

(1) Records of spills or other unusual occurrences involving the spread of contamination in and around the facility, equipment, or site.

These records may be limited to instances when significant " contamination remains after any cleanup procedures or when there is reasonable likeli-hood that contaminants may have spread to inaccessible areas as in the case of possible seepage into porous materials such as concrete. These records must include any known information on identification of involved nuclides, quantities, forms, and concentrations.

(2) As-built drawings and modifications of structures and equip-ment in high radiation areas and of locations of possible inaccessible contamination such as buried pipes which may be subject to contamination.

If referencing such drawings, it is not necessary to index each individual relevant document. If drawings are not available, the licensee shall substitute appropriate records of available information concerning these areas and locations.

34. Section 70.38 is revised to read as follows:

6 70.38 Expiration and termination of licenses.

(a) Except as provided in S 70.33(b) and paragraph [(d)(33]{el of this section, each specific license expires at the end of the day, in the month and year stated in the license.

(b) Each licensee shall notify the Commission [immediateiy]

promptly, in writing under 6 70.5, and request termination of the license when the licensee decides to terminate all activities involving matarials authorized under the license. This notification and request for termi-nation of the license must include the reports and information specified l~n paragraphs [(d)] {c}(1)(iv) and (v) of this section [-] and a plan for completion of decommissioning if required by paragraph (c)(2) of this section or by license condition. [The-ficensee-is-subject-to-the provisions-of paragraphs-(d)-and-(e)-of-this-section--as-appliesbie-]

[(c3--No-iess-than-30-days-before-the-expiration-date-specified-in a-specific-license;-the-ficensee-shali-either -

(i)-- S abmi t- an- appl i c a ti o n- f o r-ii c e n s e- renewsi- a nde r 30- S Y;- o r

( 23 -- No ti fy- the- Ee mmi s s i o n;-i n-wri ti ng- unde r 30- 67 -i f- the-l i c e n s e e decides-not-to renew-the-ficense-]

8/17/84 76 Enclosure A

[7590-01]

[(d) M (1) If a licensee does not submit an application for license renewal under S 70.33, the licensee shall on or before the expiration date specified in the license--

(i) Terminate use of special nuclear material; (ii) Remove radioactive contamination to the extent practicable except for those procedures covered by paragraph (c)(2)(i) of this section; (iii) Properly dispose of special nuclear material; (iv) Submit a completed form NRC-314, which certifies information concerning the disposition of materials; and (v) [ S abmi t- a- ra di ati o n- s urv ey- re po rt- t o-confi rm- t h e- a b s e nc e- o f ra di o a c ti v e-ma te ri ai s-e r-to- es t abli s h- the-l e v el s -o f-re si d u ai- radi o a c ti v e contamination,] Conduct a radiation survey of the premises where the licensed activities were carried out and submit a report of the results of this survey, unless the licensee demonstrates [the-absence-of-residual radioactive-contamination) that the premises are suitable for release for unrestricted use in some other manner. The licensee shall, as appropriate--

(A) Report levels of radiation in units of microrads per hour of beta and gamma radiation at one centimeter and gamma radiation at one _

meter from surfaces, and report levels of radioactivity in units of dis-integrations per minute (or microcuries) per 100 square centimeters removable and fixed [en] for surfaces, microcuries per milliliter [in]

for water, and picocuries per gram for [in-contaminated] solids such as soils or concrete; and (B) Specify the survey instrument (s) used and certify that each instrument is properly calibrated and tested.

f ( 23--i f-no-re s i du ai-radi o a c ti ve-contami nati on-attri b utabi e- te activities-conducted-ander-the-iicense-is-detected--the-licensee-shall s ubmi t- a-c e rti fi c ati o n- t ha t-no-de te c tabl e-radi oacti v e-c ontami nati o n-was found---if-the-information-submitted-under-this paragraph-and paragraphs l ( d3(13 (i v3- and-(v3- e f- thi s-s e cti e n-i s- adequate--the- Eemmi s si on-wiii

( no ti fy- the- f i cens e e-i n-wri ti ng- th at- the-ii ce ns e-i s - te rmi n a te d .

(3)(i3--if-detectable-leveis-of-residuai-radienetive-centamination attri butab i e- t o- acti vi ti e s - c o nduc te d-a nde r- the-i i c e ns e- are- f o und-- th e j 8/17/84 77 Enclosure A

T e

[7590-01]

iicense-continues-in effect-beyond-the-expiration-date--if-necessary-

)

with-respect-to possession-of-residual-byproduct-material present-as l contamination-untii-the-Eemmission-notifies-the-licensee-in-writing-that the-l i ce ns e-i s - te rmi na t e d--- Buri ng- thi s - ti me-- the-li c e ns e e-i s - s ub j e c t- te j the provisions-of paragraph-fe)-of-this-section- ,

(ii3--in-addition-to-the-information-submitted ander paragraphs (d3(13(iv3-and-(v3-of-this-section-the-licensee-shail-submit-a pian-for dec e nt ami nati o n--i f-requi re d-- a s- re g a rds- re si duai- radi o a c ti v e- co nt ami n ati o n

~

remai ni ng- s t- t he- ti me- the-l i c e ns e- exp i res- ]

(2)(i) In addition to the information required under para-graphs (c)(1)(iv) and (v) of this section, the licensee shall submit a plan for completion of decommissioning if the procedures necessary to carry out decommissioning have not been previously approved by the NRC, are exiansive, and could significantly increase potential health and safety impacts to workers or to the public such as in cases where --

(A) workers would be entering areas not normally occupied where surface contamination and radiation levels are sign'ificantly higher than routinely encountered during operation; or (B) procedures could result in significantly greater airborne concentrations of radioactive materials than are present during opera-tion; or (C) procedures could result in significantly greater releases of radioactive material to the environment than those associated with operation; or (D) procedures would involve techniques not applied routinely during maintenance operations.

(ii) Procedures with potential health and safety impacts may not be carried out prior to approval of the decommissioning plan.

(iii) The proposed decommissioning plan, if required by paragraph (c)

(2)(i) of this section or by license condition, must include--

(A) Discussion of planned decommissioning activities; (B) Description of methods used to assure protection of workers and the environment against radiation hazards during decommissioning; (C) A description of the planned final radiation survey; and 8/17/84 78 Enclosure A

[7590-01]

(D) An updated detailed cost estimate for decommissioning, compari-son of that estimate with present funds set aside for decommissioning, and plan for assuring the availability of adequate funds for completion of decommissioning.

(iv) The proposed decommissioning plan will be approved by the Commission if the information therein demonstrates that the decommis-sioning will be completed as soon as is reasonable and that the health and safety of workers and the public will be adequately protected.

(3) Upon approval of the decommissioning plan by the Commission, the licensee shall complete decommissioning in accordance with the approved plan. As a final step in decommissioning, the licensee shall again submit the infomation required in paragraph (c)(1)(v) of this section and shall certify the disposition of accumulated wastes from decommissioning.

(d) If the information :ubmitted under paragraphs (c)(1)(v) or, (c)(3) of this section does not adequately demonstrate that the premises are suitable for release for unrestricted use, the Commission will inform the licensee of the appropriate further actions required for termination of license.

(e) [Each-licensee-who possesses residual-byproduct-materiai-under

, paragraph-fd)(33 of-this-sectien--following-the-expiration-date-specified in-the-iieense-shail--] Each specific license continues in effect beyond the expiration date if necessary with respect to possession of residual special nuclear material present as contamination until the Commission notifies the licensee in writing that the license is terminated. During this time, the licensee shall--

(1) Limit actions involving special nuclear material to those related to [ decontamination-and-other-activities-related-to preparation-for release-for-unrestricted-use] decommissioning; and l

(2) Continue to control entry to restricted areas until they are suitable for release for unrestricted use and the Commission notifies the licensee in writing that the license is terminated.

(f) Specific licenses will be terminated by written notice to the licensee when the Commission determines that--

(1) Special nuclear material has been properly disposed;

(2) Reasonable effort has been made to eliminate residual

! radioactive contamination, if present, and l

8/17/84 79 Enclosure A

[7590-01]

(3)(i) A radiatica survey has been performed which demonstrates that the premises are suitable for release for unrestricted use; or (ii) Other information submitted by the licensee is sufficient to demonstrate that the premises are suitable for release for unrestricted use.

PART 72 - LICENSING REQUIREMENTS FOR THE STORAGE OF SPENT FUEL IN AN INDEPENDENT SPENT FUEL STORAGE INSTALLATION

35. The authority citation for Part 72 is revised to read as follows:

AUTHORITY: Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183,.

184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 2077, 2092, 2095, 2099, 2111, 2201, 2232, 2233, 2234, 2236, 2237, 2239, 2282); sec. 274, Pub. L.86-273, 73 Stat. 688, as amended by (42 U.S.C.

2021); secs. 201, as amended, 202, 206, Pub. L.93-438, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846); Pub. L.95-601, sec. 10, 92 Stat. 2951 (42 U.S.,C. 5851).

36. Section 72.3 is amended by adding a new paragraph (y) to read as follows:

6 72.3 Definitions.

A A A A 2 (y) " Decommission" means to remove (as a facility) safely from service and reduce residual radioactivity to a level that permits release of the property for unrestricted use and termination of license.

37. Section 72.14 is amended by revising paragraph (e)(3) to read as follows:

$ 72.14 Contents of application: General and financial information.

m a a a m (e)***

(3) Estimated [ shutdown-and] decommissioning costs, and the neces-sary financial arrangements to provide reasonable assurance prior to 8/17/84 80 Enclosure A

[7590-01]

licensing that (shutdown--decontamination--and] decommissioning will be carried out after the removal of spent fuel from storage. -

38. Section 72.18 is revised by revising paragraph (b) and adding a new paragraph (c) to read as follows:

g 72.18 Decommissioning plan, including financing

a a a

(b) The decommissioning plan must contain information on how reason-able assurance will be provided that funds will be available to decommission the ISFSI. This information must include a cost estimate for decommission-ing and a description of the method of assuring funds for decommissioning includino means of adjustina cost estimates and associated funding levels over the life of the ISFSI.

(c) Financial assurance for_, decommissioning must be provided by one or more of the following methcdsi s (1) Prepayment. Prepayment is the deposit prior to the start of operation into an account sectegated from licensee assets and outside the licensee's administrative conttol of cash or liquid assets that will retain their value over the projected operating life of the ISFSI and that are in amount such that the principal plus accumulated earnings would be sufficient to pay decommissioning costs. Prepayment may be in the form of a trust, escrow account, government fund, certificate of deposit, or deposit of government securities.

(2) A surety method or insurance. A surety method or insurance is a guarantee that decommissioning costs will be paid should the licensee default. A surety method may be in the form of a surety bond, letter of credit, line of credit, secured interest, or other guarantee method. Any surety method or insurance used to provide financial insurance for decommissioning must contain the following conditions:

(i) The surety or insurance must be open-ended or, if written for a specified term, such as five years, must be renewed automatically unless 90 days or more prior to the renewal date, the issuer notifies the Commission, the beneficiary, which shall be a Commission-approved trustee, and the licensee of its intention not to renew. The surety or insurance must also provide that the beneficiary may automatically collect prior to 8/17/84 81 Enclosure A

[7590-01]

the expiration without proof of forteiture if the licensee fails to provide a replacement acceptable to the Commission within 30 days after receipt of notification of cancellation.

(ii) The surety or insurance must remain in effect until the Commis-sion has terminated the license.

(3) An external sinking fund in which deposits are made at least annually, coupled with a surety method or insurance, the value of which may decrease by the amount being accumulated in the sinking fund. An external sinking fund is a fund established and maintained by the periodic deposit of a prescribed amount into an account segregated from licensee assets and outside the licensee's administrative control in which the total amount of the periodic deposits plus accumulated earnings would be sufficient to pay decommissioning costs at the time termination of operation is expected. An external sinking fund may be in the form of a trust, escrow account, government fund, certificate of deposit, or deposit of government securities.

> (4) In the case of Federal, State, or local government licensees certification that the appropriate government entity will be guarantor of decommissioning funds.

(5) Other funding methods which are demonstrated by the applicant or licensee to provide comparable assurance to methods listed in para-

! graphs (c)(1) through (3) of this section.

39. In 6 72.33 new paragraphs (b)(6) and (7) are added to read as follows:

5 72.33 License conditions.

m a a e n (b) Every license issued under this part shall be subject to the following conditions, even if they are not explicitly stated therein:

a a a = *

(6) The licensee shall implement procedures for providing financial assurance for decommissioning in accordance with the approved preliminary decommissioning plan.

(7) Each licensee shall keep records of information important to the safe and effective decommissioning of the facility in a file explicitly l

8/17/84 82 Enclosure A

[759. 2 for this purpose until the license is terminated by the Commission. If records of Televant information are kept for other purposes, reference to such records and their locations may be substituted. Information the Commission considers important to decommissioning consists of --

(i) Records of spills or other unusual occurrences involving the spread of contamination in and around the facility, equipment, or site.

These records may be limited to instances when significant contamination remains after any cleanup procedures or when there is reasonable likelihood that contaminants may have spread tn inaccessible areas as in the case of possible seepage into porous materials such as concrete. These records must include any known information on identification of involved nuclides, quantities, forms, and concentrations.

(ii) As-built drawings and modifications of structures and equip-ment in high radiation areas and of locations of possible inaccessible contamination such as buried pipes which may be subject to contamination.

If referencing such drawings, it is not necessary to index each individual relevant document. If drawings are not available, the licensee shall substitute appropriate records of available information concerning these areas and locations. -

• a- * *

40. Section 72.38 is revised to read as follows:

l 9 72.38 Applications for termination of licenses.

(a) Any licensee may apply to the Commission for authority to surrender a license voluntarily and to decommission the ISFSI. This application must be made within two years following permanent cessation of operations, and-in no case later than one year prior to expiration of l

the license. Each application for termination of license must be accom-panied, or preceded, by a proposed final decommissioning plan.

(b) The proposed final decommissioning plan must include--

(1) The choice of the alternative for decommissioning with a description of activities involved. Alternative methods for decommis-sioning which significantly delay completion of decommissioning, such as use of a storage period, will be acceptable if sufficient benefit results; 8/17/84 83 Enclosure A

[7590-01]

(2) A description of controls and limits on procedures and equipment to protect occupational and public health and safety; (3) A description of the planned final radiation survey; and (4) An updated detailed cost estimate for the chosen alternative for decommissionina, comparison of that estimate with present funds set aside for decommissioning, and plan for assurina the availability of adequate funds for completion of decommissioning including means for adjustina cost estimates and associated fundina levels over any storage or surveillance period.

(c) For final decommissionina plans in which the major dismantle-ment activities are delayed by first placing the ISFSI in storace, planning for these delayed activities may be less detailed. Updated detailed plans must be submitted and approved prior to the start of such activities.

(d) If the final decommissioning plan demonstrates that the decommissioning will be performed in accordance with the regulations in this chapter and will not be inimical to the common defense and security or to the health and safety of the public, and after notice to interested persons, the Commission will issue an order authorizing the decommissioning.

(e) The Commission will terminate the license if it determines that--

(1) The decommissioning has been performed in accordance with an approved final deccomissioning plan and any conditions in the order .

authorizina decommissioning; and (2) The terminal radiation survey and associated documentation demonstrates that the ISFSI and site are suitable for release'for unrestricted use. -

Dated at Washington, D.C. this day of 1984.

For the Nuclear Regulatory Commission.

Samuel J. Chilk, Secretary of the Commission.

8/17/84 84 Enclosure A

Regulatory Analysis Amendments to 10 CFR Parts 30, 40, 50, 51, 70, and 72 Specifying Licensee Responsibility and Procedures for Decommissioning a Nuclear Facility

1. Statement of Problem The nuclear industry is maturing and the number end complexity of facilities that will require decommissioning is expected to increase in the near future.

There are many aspects of facility activities that require consideration now with respect to decommissioning. These aspects are assurance of funding, facilitation considerations, recordkeeping, planning, and procedures for license termination. Inadequate or untimely consideration of these decom-missioning elements could result in significant adverse health, safety, and environmental impacts. These impacts could lead to larger occupational and public doses, larger amounts of radioactive waste to be disposed of, prolif-eration of contaminated sites, and economic and sociopolitical problems for the states and Federal Government.

Current regulations as specified under 10 CFR Parts 30, 40, 50, 51, 70, and I

72 cover decommissioning in a limited, vague, or inappropriate way and are not ful,ly adequate in dealing with licensee decommissioning requirements. Many licensing activities concerning decommissioning have been made on a case-by-case basis in direct response to licensee's requests to decommission and in current licensing hearing cases. This procedure results in a lack of uniformity of application, inefficiency on the part of the licensee and NRC in implementation, and finally a lack of timeliness and comprehensiveness that affects proper application of the ALARA principle in carrying out NRC licensing responsibilities. In the case of a few non-fuel-cycle licensees, both a lack of available funds to carry out decommissioning and improper termination procedures have occurred.

In considering the current decommissioning needs of the nuclear industry, the lack of explicit enough regulatory guidance available, and the nonuniform, I 8/17/84 1 Enclosure B l

inefficient and noncomprehensive approach that case-by-case considerations can result in, the staff recommends that more explicit rules be proposed that would provide guidance to the licensee on careful, timely and comprehensive planning and implementation of facility decommissioning. Facilitation of decommission-ing, while an important aspect to consider, will not be included as a rule amendment requirement. However, in keeping with the as low as is reasonably achievable (ALARA) concept, decommissioning facilitation should be used to implement protection of health and safety. The rules would deal with require-ments on financial assurance, planning, recordkeeping, and termination proce-dures. Their implementation through the NRC licensing process would assure that decommissioning would be handled by the licensee in a way that would result in minimal or even negligible impact on health, safety and the environment.

" Decommissioning" as defined in the proposed rule means to remove safely from service and reduce residual radioact.ivity to a level that permits release of the property for unrestricted use and termination of license by the NRC. At the end of the useful life of a facility, decommissioning activities should be performed which will ultimately result in termination of the NRC license.

It is the responsibility of the NRC to ensure that these activities are performed by the licensee with minimal adverse impact on the health and safety of workers and the public, and on the environment.

A power reactor has potential for substantial health, safety, and environ-mental impact if decommissioning is improperly performed. This requires major regulatory consideration because of the large number of reactors (approximately 80 operating and 60 under construction), the quantity and radiation level of radioactive materials, size and complexity of the structure, and the proximity to populated areas. Most fuel cycle facilities contain low intensity radio-active materials. Most non-fuel-cycle facilities usually contain small amounts of very short-lived radioactive materials; a few contain large amounts of very low intensity materials. There are also several fuel cycle facilities such as scrap recovery, fuel fabrication, and UFs conversion plants that already have been or are being decommissioned. Finally, there are approximately 20,000 non-fuel-cycle licensees (including Agreement State licensees) of which several hundred are decommissioned annually.

8/17/84 2 Enclosure B

Planning for decorilssionig and its proper implementation by the licensee at the earliest practical stage of facility licensing can avoid many potential problems resulting from decommissioning. In this regara concerns are that (1) funds will be available for decommissioning at the end of useful facility life because a lack of funds can affect a licensee's ability to select and complete an appropriate decommissioning alternative; (2) facilitation, while not a proposed rule requiren.ont, is considered because this can lead to reduction of occupational and public dose, and reduction of waste volumes through such activities at the design, construction, operation, and actual decomissioning; (3) records are maintained during operation containing information important to performance of eventual decommissioning; (4) planning is performed with details commensurate with complexity of the facility, which could include choice of decommissioning alternative, procedures, schedules, work plans, and off-site radioactive waste accommodations and; (5) termination procedures are prescribed which besides administrative reporting aspects and approvals include termination survey plans, their reliability and validation.

It has already been noted that the present rules do not adequately address all the required elements that a licensee must consider in dealing with decommis-sioning. Case-by-case licensing considerations are also inadequate because they are inefficient and nonuniform. The staff believes that amended rules backed up by regulatory guides will provide proper guidance to the licensees, Federal government, state and local agencies, and information for the general public. Moreover, the staff has assessed the impacts from decommissioning through a comprehensive information base on the technology, safety and costs of decommissioning nuclear facilities, numerous interactions with the states, industry, federal agencies, the general public, and development of a draft GEIS. Based on these efforts, the staff reached the conclusion that if guidance through rules is provided in essential areas relevant to decommis-sioning, then decommissioning can be accomplished with very small impact on the public and environment and in a cost effective way.

The proposed rule, when implemented, would allow for reduction of 10 CFR Part 51 NEPA requirements, categorical exclusion of approval of a decommissioning funding plan, and elimination of the mandatory requirement for an environmental impact statement at the time of decommissioning for 10 CFR Part 50 and 72 licenses.

8/17/84 3 Enclosure B

8 -

Finally, it should be noted that residual radioactivity limits for unrestricted use are being addressed in a separate rulemaking involving amendment of 10 CFR Part 20. .

l

2. Objectives The staff focused on the following objectives in developing these proposed rule amendments:

2.1 Selection of the appropriate regulatory method for implementing ~

decommissioning requirements.

2.1.1 no change 2.1.2 amendment of licenses 2.1.3 provide additional guidance through regulatory guides 2.1.4 amendments of regulations in 10 CFR Parts 30, 40, 50, 51, 70, and 72 for clarification and specifications of require-ments for licensees on:

2.1.4.1 assurance of funds for decommissioning 2.1.4.2 facilitation of decommissioning 2.1.4.3 decommissioning plans 2.1.4.4 termination of license 2.2 Reduction of 10 CFR Part 51 NEPA requirements regarding decommissioning.

2.3 Consideration of the economic impact on licensees, especially small licensees.

2.4 Promulgation of regulatory requirements commensurate with the Commission's responsibility for public health and safsty.

8/17/84 4 Enclosure B

3. Alternatives

. 3.1 The alternatives considered in determining the need for regulation with respect to decommissioning are as follows:

1. No action

2. Amendment of licenses

3. Use of only regulatory guides

4. Amendment of regulations and preparation of regulatory guides 3.1.1 No change in regulations It has already been noted that decommissioning guidance is needed in the areas of financial assurance, facilitation, planning, recordkeeping, and termination procedures. Current requirements are brief, non-specific or limited such as those in: (1) requirements in 10 CFR Part 50.82, Application for Termination of License and in 10 CFR Part 72, Section 72.76, Criteria for Decommissioning, I

and (2) recent amendments to 10 CFR Parts 30, 40, and 70 specifying licensee responsibility for nuclear materials and procedures for termination of specified licenses. This situation requires the licensee and the Commission staff to work on a case-by-case basis in the development of information needed by the Commission for terminating a license. Thus, a timely, orderly, and comprehensive management of licensee decommissioning action may not be possible because of a lack of guidance on decommissioning elements needing consideration.

The net result is that case-by-case treatment can result in inefficient and non -

uniform actions by the licensee, the NRC and others such as state, federal or public involved parties. Finally, it should be noted that the Commission in promulgating 10 CFR Part 50.54(w), which requires that the licensee have onsite property damage insurance to cover the cost of radioactive contamination clean up following an accident (47 FR 13750), indicated in the Supplementary Informa-

tion that decommissioning financial requirements were not dealt with and new l commission rulemaking in that area would include this consideration.

l 8/17/84 5 Enclosure B

3.1.2 Amendment of licenses Amendment of licenses is an alternative available to cover decommissioning requirements of licenses. This alternative is already being used and requires specific actions for each licensee. This can result in repetitive effort and inefficient use of Commission and licensee staff time and could result in an inconsistent application of policy.

3.1. 3 Provide additional guidance through regulatory guides Some of the specific elements of the proposed rule could reasonably be in the form of guidance. However, the NRC position that the licensee provide decommissioning funding assurance could not be effectively accomplished in this way. Even for those provisions which could conceivably be in the form of guidance, codification would provide a legal basis and assure more consistent application. Regulatory guides are planned to support this rule which would provide guidance to licensees and licensing staff on how these requirements can be implemented.

3.1.4 Amendment of regulations -

This is the recommended alternative. Amendment of regulations and preparation of supporting regulatory guides presents a regulatory method for clearly delineating explicit regulatory requirements in a way that is comprehensive, uniform and efficient in dealing with the decommissioning of all nuclear facilities which are licensed or use licensed materials. Requirements are needed for all types of nuclear facilities except waste disposal facilties for which requirements are already in place. These requirements could be as amendments to 10 CFR Parts 30, 40, 50, 70, and 72 involving clarification and addition to the existing rules as follows:

3.1.4.1 Assurance of funds for decommissioning Licensees should provide reasonable assurance at all times during facility life, including decommissioning, that adequate funds are available to ensure that decommissioning can be accomplished in a safe and timely manner. Lack of 8/17/84 6 Enclosure B

funds can cause delay and may result in potential health, safety, environ-mental, and socio political problems. The licensee should arrange to assure that funds are available through one or more of the following instruments:

(1) Prepayment. Prepayment is the deposit prior to the start of opera-  !

tion into an account segregated from licensee assets and outside the ,

licensee's control of cash or liquid assets that will retain their value over the projected operating life of the facility arid that are in amount such that the principal plus accumulated earnings would be sufficient to pay decom-missioning costs. Prepayment may be in the form of a trust, escrow account, government fund, certificate of deposit, or deposit of government securities.

(2) External sinking fund. An external sinking fund is a fund established and maintained by the periodic deposit of a prescribed amount into an account segregated from licensee assets and outside the licensee's control in which l the total amount of the periodic deposits plus accumulated earnings would be 2

sufficient to pay decommissioning costs at the time termination of operation j is expected. An external sinking fund may be in the form of a trust, escrow account, government fund, certificate of deposit, or deposit of government securities.

d (3) Surety methcd or insurance. A surety method or insurance is a guarantee that decommissioning costs will be paid should the licensee default.

A surety method may be in the form of a surety bond, letter of credit, line of

- -- credit, secured interest, or other guarantee method.

(4) Internal reserve. Internal reserve is a fund established and maintained by the periodic deposit or crediting of a prescribed amount into an account or reserve which is not segregated from licensee assets and is within the licensee's control in which the total amount of the periodic deposits or funds reserved plus accumulated earnings would be sufficient to pay for decom-missioning at the time termination of operation is expected. This method may

, use negative net salvage value depreciation in which funds are invested in i

licensee assets, and at the end of facility life, bonds are issued against these assets and the funds raised are used to pay for decommissioning. An 8/17/84 7 Enclosure B

e internal reserve may also be in the form of an internal sinking fund which is similar to an external sinking fund except that the fund is held and invested by the licensee. -

(5) Other methods. The licensee might propose a different method, but should proivde information to demonstrate that the assurance provided would be comparable to that of other acceptable methods.

The amount and degree of assurance should be commensurate with potential adverse impact that could occur if the licensee were unable to decommission because of a lack of funds as well as other financial resources available to the licensee. For example, for a utility with more than one power generating station which is regulated by the State Public Utility. Commission and collects at established rates (and is protected by postaccident decontamination insurance required by 10 CFR Part 50.54(w)) an internal reserve would constitute reasonable financial assurance; accident cleanup insurance for material facility licensees is under consideration in a separate action and an advanced r.otice of proposed rulemaking is being developed. For a non-fuel-cycle facility (which is a privately owned business), insurance or bonding would be a reasonable form of funding assurance. It is recommended that the rule specify acceptable methods ,

j for different categories of licensees (i.e. , utilities vs. non-utilities).

In developing a rule that would assure that all facilities will be decommis-stoned in a safe and timely way, it is necessary to determine which licensees 4

need to submit funding plans. Various options determining which licensees must provide financial assurance have been considered, ranging from only those likely to have very large decommissioning cssts, such as those licensees presently required to submit radiological contingency plans, to all licensees.

To require all licensees to submit funding plans would not be cost-effective; the health and safety of the public can be adequately protected by limiting the requirements to those licensees likely to have substantial decommissioning costs. If costs are low, lack of funds is less likely to result in default.or abandonment, and in cases where defaults do occur, the NRC or state regulatory agency can take over control in order to protect health and safety relatively I

easily. However, the historical record indicates that relatively small licensees

] (that do not require a radiological contingency plan) may default and may have 4

8/17/84 8 Enclosure B l.

y w ,.9-%.------.- -7g -p v ,7,wy ,-.,-.v.,.,-, ,. ,- ,, , y we - ,maq - - - .,g - - , _ . _-._

97.,yyg-nq-gywe,w,ygy-.7gymy-g,<--.g. .,,we4yg,*eq..m,---- --

+

)

l l

l the potential for a substantial contamination problem. It is believed important that some form of funding assurance be provided by these licensees.

The rule allows flexibility to licensees for providing such assurance to reduce the impact and a data base has been developed to reduce the impact of making cost estimates. For power reactor applicants and licensees, for example, the rule would allow a certification of a prescribed amount of available funding; for the non-reactor licensees the rule would also allow a certification of prescribed amounts of available funding for the majority of licensees based on the radioactive material possession limits allowed by their license. Thus these licensees can be generically treated and would not be required to submit a decomissioning funding estimate. However, all these licensees would have the option of submitting a funding estimate for approval, if a lower amount than ,

is prescribed is anticipated. All other' applicants and licensees such as non power reactor licensees (Part 50) and independent spent fuel storage facility licensees (Part 72) as well as material licensees with potential for sub-stantial decommissioning costs would be required to submit a decommissionin'g funding assurance plan consisting of a cost estimate and method of providing assurance. All material licensees required to submit a funding . plan could

~

initially, prior to license renewal, submit a certification of a prescribed amount.

According to the proposed rules, Parts 50 and 72 licensees and applicants would submit information concerning funding assurance in a decommissioning funding

! plan. Material licensees with potential for substantial decommissioning costs '

l would also be required to provide funding assurance.

3.1.4.2 Facilitation of decommissioning It is recognized that planning for decommissioning at an early a stage of facility construction and operation is desirable. This is expecially true of facilitation aspects (in particular, features that could reduce radiation doses and waste volumes resulting from decommissioning). Features that are

~

reasonable in cost and effet tive in implementation can be more easily incor-porated at early stages. However, at any stage of facility life, considera-tion of facilitation by the licensee is important, particularly if by its 8/17/84 9 Enclosure B f

l

implementation, operational and decommissioriing cost savings can be obtained.

Implementation of facilitation considerations can result in lower radiation doses as well as reduction of radioactive waste volumes during thd actual decomissioning process. No additional rule amendments are being proposed except certain recordkeeping requirements; all licensees should, however, consider other ways of facilitating decomissioning in the design and opera-tions of the facility. This is in keeping with the "as low as is reasonably achievable" (ALARA) concept when implementing protection of health and safety.

Keeping records of information which may be important at the time of decomis- .

sioning should be required because it allows for more efficient and comprehen-sive decomissioning planning and can result in a reduction of impacts to health, safety, and economics during decommissioning. In complying with this requirement, the licensee would keep records of information (which could be a relatively simple reference file) containing material important to safe and effective decomissioning such as unusual occurrences involving the spread of contamination in and around the facility, as-built drawings and updates of any changes, etc. Other aspects of facilitation may be more affected by facility-specific considerations, thus, no other specific procedures should be required for all. licensees.

3.1.4.3 Decomissioning plans Planning for decomissioning is necessary to ensure that all decomissioning activities are accomplished in a safe, timely, and efficient manner. As mentioned above, financial, facilitation, and recordkeepi,ng considerations need to be addressed at licensing or as soon as possible for existing licensees.

Licensees that require a plan are required to take into account financial and technical situation at the time of actual decommissioning.

The plans need to address:

Discussion of planned decomissioning activities.

Description of methods used to assure protection of workers and the ,

environment against radiation hazards during decomissioning.

A description of the planned final radiation survey.

8/17/84 10 Enclosure B

An updated detailed cost estimate for decomissioning, comparison of that estimate with present funds set aside for decommissioning, and plan for assuring the availability of adequate funds for completion of decomissioning.

It is expected, however, that operators of a large number of simpler facilities would be able to accomplish all or much of their decommissioning using tech-niques the same as during routine operation and not need a decommissioning plan.

3.1.4.4 Termination of Licenses Explicit procedures and requirements for a licensee to terminate a license must be clearly delineated. These include the licensee request to terminate a license and submittal and approval of plans including a termination survey plan. Surveys submitted for termination must be designed to demonstrate with a high degree of confidence that the property is suitable for release for unrestricted use. The plan including termination survey details should be commensurate with the type of facility and its potential for adverse effects.

For many non-fuel-cycle facilities, decommissioning could involve little more than notification that the licensee wishes to terminate the license.

3.2 Reduction of 10 CFR Part 51 NEPA Requirements Approval of the decomissioning funding plan for Part 30, 40, 50, and 70 licenses does not change the nature or the scope of the licensed activity.

The principal purpose of these plans is the provide information to the Commission which will enable them to determine whether the licensees funding plans for decommissioning are adequate. These actions in and of themselves do not have an environmental impact and therefore can be categorically excluded from 10 CFR Part 51 NEPA requirements.

If proper consideration and implementation is given to decommissioning elements (as specified in Section 2.1.3 of this document), the environmental impacts from decommissioning are expected to be small and elimination from 10 CFR Part 51 of the mandatory requirement for an environmental impact statement 8/17/84 11 Enclosure B

(EIS) at the time of decommissioning for Part 50 and 72 licenses is warranted.

Environmental assessments would still be required but these would not necessarily lead to an EIS. -

4. Consequences 4.1 Benefits and Costs 4.1.1 Benefits 4.1.1.1 NRC The proposed amendments to 10 CFR Parts 30, 40, 50, 51, 70, and 72 will clarify and specify NRC requirements and licensee responsibilities for decom-missioning nuclear facilities. The prcposed rule amendments set forth requirements and procedures the licensee must follow at all licensing stages relating to decommissioning. This will reduce uncertainties in the licensing procer,s, reduce the need for the Commission to request additional information from licensees, provide for uniform, comprehensive and efficient licensing implementation, and ensure that the application of the as low as reasonably achievable principle is effectively considered in areas of health, safety, and the environment. Finally, these amendments will allow for termination of licenses in as prompt a manner as possible.

4.1.1.2 Other Government and State Agencies The rule will affect other Federal agencies if they are NRC licensees. For agencies licensed by the NRC the benefits are similar to those for Industry.

The clarification of existing licensee responsibility, particularly in the areas of funding assurance and environmental impacts will benefit especially the Federal Energy Regulatory Commission, which regulates rates on interstate power, and the EPA, which regulates environmental factors affecting the public sector and sets radiation standards. Other agencies such as DOE and D00 will l also benefit by having examples of decommissioning requirements to follow in the areas of planning and facilitation.

( 8/17/84 12 Enclosure B

i The rule will affect state agencies in providing for explicit licensee require- ,

ments, particularly in the area of funding assurance. This requirement will benefit the ' states in allowing for uniform applicability and adequate planning in rate collection requirements (especially for Public Utility Commission rate regulated reactors). Moreover, planning and requirements for the termination of license will ensure that decommissionings will be performed as promptly as possible with minimal adverse impact on the state and ensure that the health and safety of the public and the environment are adequately protected.

4.1.1.3 Industry

• The proposed rule would require licensees to consider oarticulars of compliance in the areas of funding assurance, planning, recordkeeping, and license termina-tion procedures including termination surveys. Currently, regulations concerning decommissioning requirements are limited or vague. Case-by-case action has been used to effect licensing requirements. The proposed amendments would allow licensees to satisfy. decommissioning requirements, many of which are already required on an hoc basis, more efficiently and cost-effectively. In situations where additional requirements would be imposed, such as in areas of funding assurance, reqLirements have been kept to the minimum that ensures that health, safety, or the environment are not compromised. Finally, an additional

, benefit of these amendments is that licensee compliance would eliminate some of the 10 CFR Part 51 requirements concerning decommissioning.

i l Amendments can be classified into two basic types: type 1 - those which -

L relate to the licensing of any facility under 10 CFR Parts 50 and 72; type 2 -

those which relate to licensing possession and use of radioactive materials as in 10 CFR Parts 30, 40, and 70.

The majority of type 1 licenses are power and research and test reactors.

Non-fuel-cycle facilities and fuel-cycle facilities, except fuel reprocessing plants, fall into type 2 category. There are only a small number of fuel cycle facilities; however, there are approximately 20,000 non-fuel-cycle facilities (including Agreement State licenses). It is estimated that approx-imately 43% of these could be considered small entities under the criteria set out in the size standards by the Small Business Administration in 13 CFR 8/17/84 13 Enclosure B

,,,-- _ ----.. ,. , , , _ . . _ . - , , , _ ..,,,_,,.,,_..______.____,_._____m

_ r-____.-

Part 121 (e.g. , for most licensees less than 500 employees, for hospitals less than 150 beds, and for other medical licensees less than $1.5 million annual gross receipts). The benefits of the proposed rule requirements *for the major decommissioning elements, using the classifications are:

Funding Assurance - The regulations require as a condition of license either (1) a certification that the licensee has provided financial assurance in the amount and methods prescribed in the rule or, (2) approval of a funding plan I

(with periodic update) requiring an estimate of decommissioning cost as well as a prescribed method for providing assurance. For power reactor licensees, type 1, a rule prescribed amount for certification, $100 million, can be used.

This amount is based on the most current information available and the exten-sive NRC data base developed in support of this rulemaking. It is not intended that the prescribed amount be exact but rather that it cover the

] bulk of the expected decommissioning cost within the context of reasonable

funding assurance. It is intended that as economic facto change the amount k will be appropriately updated by an ammendment to the ruld. For research and test reactors there is a wide diversity of types and it is difficult to prescribe a single meaningful certification amount. It is also not likely for this situation as compared with power reactors, that licensees would choose a precribed certification amount. For these reasons research and test reactors must submit funding plans. Similarly, for these same reasons material licensees (type 2) having large potential for radioactive contamination would also be required to submit funding plans. The majority of type 2 licer,ees are excepted

from this requirement. A wide latitude of methods for providing funding will a

be allowed within th bounds of reasonable assurance that funds will be avail-j able to decommission the facility in a safe and timely manner (including i

provision for premature closure). The funding assurance requirements allow the f licensee to implement a method of funding with long lead time and during the i time that the facility is operating so that funding requirements can be l considered with other revenue requirements.

For type 1 licenses - reasonable assurance of funding capability allows utilities to use the internal reserve funding method in which the collection of fees from the rate payer can be invested in company assets. Assuming such funds earn a l reasonable rate of return then, the incremental cost of such a funding method l

8/17/84 14 Enclosure B

o .

(compared to no rule) is zero. This method of funding costs less than other alternative choices such as external funds or prepayment, (by a factor of 2 or

.3) because a utility can usually earn more investing in its own assets. For example, for an estimated decommissioning cost of $50 million for a modern day 1200 MWe PWR in 1979 dollars and which is assumed to operate for 30 years, internal reserve funding could result in a saving of $200 million. For the approximately 80 operating reactor plants and 60 undergoing construction, this could result in an overall saving of $28 billion. Moreover, with respect to premature closure the reasonable assurance requirement takes into consideration the recently promulgated rule 10 CFR 50.54(w) that requires an electric utility to obtain onsite property damage insurance. In comparison to possible costs that would result from accident cleanup, decommissioning costs are small (on order $50 million compared to as much as $1 billion). It is expected that required on-site property damage insurance for such accident cleanup would allow a utility to remain financially solvent even in the case of an accident.

Thus a utility should have adequate financial resources to pay for the cost of decommissioning following accident cleanup.

~ '

An exception to the above is a single asset utility, i.e., one which owns only one generating facility, where external funding or other guarantee would be ~

required. While there could be some initial economic impact in meeting this requirement, there are only a few single asset utilities and so the overall impact is very small. Moreover, the impact on the individual rate payer is also very small and estimated to result in an increase in rates over an inter-nal reserve funding wchanism of no more than 0.2% of the consumer electrical usage rate. Finally, recognition by the utility at an early time of the necessity of including decommissioning costs into the rate base would further minimize overall economic impact. For research and test reactors, most are federal or state owned or are part of large universities. State or federal certification that funds for decommissioning will be made available would be

considered reasonable assurance for funding; knowledge of the funding require-ment by appropriate agencies would allow for adequate budget planning. For independent spent fuel installations, of which there is one under Part 72 license, the funding assurance is essentially the same as that already required in 10 CFR Part 72.18(b).

8/17/84 15 Enclosure B

I o o.

I l

l l

For type 2 licenses - the majority of type 2 licensees, while financially responsible for decommissioning costs, are excepted from funding assurance requirements. For the other licensees (about 1500 NRC licenses)*some type of funding assurance is required. However, for many of those a certification that the licensee has provided financial assurance in the amo'nt and methods prescribed in the rule would be sufficient. For the remainder (about 828 NRC licenses) a financial plan indicating amounts and methods of assurance for providing decommissioning funds would be required. All sealed source users, except those using source material greater than 1010 appendix C values of 10 CFR Part 20 (10,000 Ci for Co-60 and 100,000 Ci for Cs-137) would be excepted. Also excepted would be plated foils or equivalent source material in a non-readily-dispersible form. Moreover, all licensees with materials of half-lives not exceeding 120 days would also be excepted as would those licensees with possession limits less than or equal to 108 times the curie content specified in 10 CFR Part 20, Appendix C for Part 30, 40, and 70 licenses.

Thus the majority of small businesses would be excepted, especially hospitals which primarily possess short half-life radioactive materials. Specification of a tiered system based on possession limits for fixed amounts of required financial assurance, aside from eliminating a majority of type 2 licensees having minimal risk, results in a more implementible system both for the licensee who does not have to provide the NRC with a decommissioning funding estimate as well as the NRC in the administration of the requirement to ensure that the licensee has provided adequate financial assurance. Moreover, for those licensees requiring a financial assurance plan, the plan would only be required at license renewal at which time it is much more efficient for the licensee and staff to implement as part of the overall renewal effort. All affacted licensees, including those requiring a funding plan at renewal would have a year from the date that the rule becomes effective to acquire prescribed funding assurance. Those licensees requiring a funding plan would provide to the NRC a funding certification for $500,000 until a funding plan was submitted at license renewal. In general, funding assurance amounts have been based on the PNL data base. Decommissioning a typical laboratory cf a facility in 1983 dollars is estimated to cost about $100,000 and this is the requirement for those Part 30 and 70 licensees having possession limits greater than 1000 but less than or equal to 10,000 times the curie limits prescribed in 10 CFR Part 20 Appendix C. For Part 40 licensees, this is also the prescribed amount

! 8/17/84 16 Enclosure B vgr-r e-, or r ---- w prew-c-.,,=.----ew.---,- e-eeey -=-.,.ee - - - - - - ---,--e

for those licensees having source material limits greater than 10 mci but less, than or equal to 100 mci; for those Part 40 licensees having possession limits greater than 100 mci a financial plan would be required. For Part 30 and 70 licensees having possession limits greater than 10,000 but less than or equal to 100,000 times the possession limit values of 10 CFR Part 20 Appendix C, the amount of assurance required would be $500,000 (the equivalent cost of decem-missioning 5 major laboratories); for those above this limit a funding plan would be required. All affected licensees who do not require a funding plan may still submit one for approval if they feel the prescribed assurance costs are too high. It is not expected that many would do this, however, because it i

is felt that the prescribed costs are reasonable. If a surety method were used for providing this assurance which costs about 1-2% annually of the value of the surety, then this further reduces any incentive to submit a funding plan, especially when it is recognized that the cost of the surety is a business expense and is tax deductible; depending on the size of the licensee such deduction would be in the 25-50% tax bracket.

Recordkeepina - The licensee is already required to keep records for various limitedtimesofsuchthingsasunusualoccurrencesinvolvingthespreadof contamination and as-built drawings or other information which can affect operational health and safety. Proposed rule, requirements on recordkeeping could be satisfied by keeping a central updated reference file of already generated records that have potential for relevance to decommissicning such as instances when significant contamination remains after any cleanup procedures or when there is reasonable likelihood that contaminants may havtr spread to inaccessible areas as in the case of seepage into porous material such,as concrete. Relevant records must be kept until the facility is tjecommissioned.

This information could minimize radiation exposure as well as greatly reduce actual decommissioning costs. Decommissioning experience has t.hown that a lack of sufficient histnrical information can result in increased dose to occupational workers, difficulty in planning and cost estimating, inefficiency in the decommissioning process and delay in completing decommissioning.

Plannina planning for decommissioning requires two main phases because certain aspects of decommissioning should be considered early such as recordkeeping 8/17/84 17 Enclosure B

and funding assurance; while other aspects concerning actual decommissioning are best considered when decommissioning is imminent. At this time, if decommissioningiscomplexandcostigfinalplanningisneededt6attakesinto account relevant technical and financial considerations at that time.

For type 1 licensees - besides the initial planning of recordkeeping and funding assurance final planning would be required. Final planning is already required but only when the licensee desires to dismantle. For a power reactor

, such planning would be elaborate because of the complexity of the facility j being decommissioned. Preparation of such a plan allows for a more efficient and direct use of licensee time.

For type 2 Ifcensees - as with type 1 licensees, aside from funding assurance and recordkeeping considerations, decommissioning plans may be required at the time of decommissioning and would depend on the complexity of the decommissioning.

4 Such plan requirements have already been approved by some case-by-case licensing decisions. For the large number of non-fuel-cycle licensees, plans would not be required because the decommissioning work could be performed orior to i requesting license termination. All that might be required is a notification 5

of a desire to terminate the license as well as a termination survey or other information that demonstrates that the facility is suitable for unrestricted .

4 use.

I

, Termination Procedures - Specific requirements as to how a licensee can terminate a license including administrative procedures as well as technical requirements should result in efficient, less costly efforts. Specifically in the technical area, requirements for the performance of acceptable termination surveys can speed up the NRC termination of license.

For type 1 licensees - a survey plan would be required for NRC approval.

Proper implementation of this plan by the licensee would allow the NRC to terminate the license promptly.

For type 2 licensees - For some licensees, submittal of a final decommis-sioning plan would be required. However, for most licensees only the results 8/17/84 18 Enclosure B

of a termination survey or other information of an equivalent nature would be needed. For the more complex facilities, or those where large areas need to be surveyed, the licensee may choose to have a termination survey ~ plan approved by the NRC prior to execution so that the license could be terminated when the survey was properly implemented.

It should be noted that specific criteria for residual radiation limits acceptable for terminating a license are being proposed in 10 CFR Part 20 in a separate rulemaking action.

, Other Considerations - Mitigation of adverse environmental impact from decom-missioning will occur provided that the proposed rule amendments are imple-mented. Reduction of 10 CFR Part 51 requirements through categorical exclu-sion of the funding plan approval for type 1 licenses and the funding plan approval for type 2 licenses as well as elimination of the mandatory requirement for an environmental impact statement for type 1 licenses is warranted and will eliminate some requirements for such considerations in environmental reports, assessments and impact statements.

4.1.1.4 Public The requirements set forth in this proposed rule will minimize licensee decom-missioning impacts on health, safety and the environment. Moreover, financial requirements will ensure that decommissioning is done as promptly as reasonable and that a non-operational facility does not become a public burden. From a financial aspect, especially for power reactors, requirements for funding assurance will minimize rate payer costs relating to decommissioning.

4.1.2 Costs The major cost impact of the proposed rule amendments is in the area of funding assurance.

For type 1 licensees - other cost impacts for existing licenses are associated with recordkeeping. Also, at the end of facility life, the new requirements 8/17/84 19 Enclosure B

I

\

could add some additional requirements to what is presently required of )

licensees.  !

~

For type 2 licenses - other cost impacts are in the area of recordkeeping.

Also, at the end of facility life, for those licensees requiring a final plan, some additional requirements could be incorporated into the licensing require-ments beyond those incorporated into present licensing conditions.

Detailed considerations of cost impact for the NRC, other government and state agencies, the industry, and the general public are presented in the remainder of this chapter.

General estimating data relative to interpreting results presented is the use of a 235 day work year (49-5 day weeks less 10 holidays) and a worker rate of

$40/hr which is aimed at the technical staff thought to be needed level for the majority of the required efforts described. Thus a man year of effort results in a cost of $75,000.

4.1.2.1 NRC For type 1 licenses - the major resource impacts are estimated to occur within the first 2 to 5 years following promulgation of the final rule amendment's during which time decommissioning certification or funding plans would be required of all licensees (and would be submitted within 2 years from effective date of rule).

In 1984 there are approximately 80 operating power reactor licenses (and about 60 under construction 50% of which are 2/3 completed) and NRC review and approval of the operating license required funding plan will result in an esti-mated 6-day effort or a 3-day effort for certification. For purposes of impact estimating it is assumed that 50% of the power reactors under construction, about 30, will be affected by this rule along with the already operating power reactors resulting in a total of 110 power reactors. Use of regulatory guides on financial assurance has been assumed in this estimate. Thus for all present y operating power reactors this results in about 1.4 to 2.8 man years effort and a cost of about $105,000 to $210,000. Estimating that this effort occurs over 8/17/84 20 Enclosure B

3 years results in an expenditure of about $35,000 to $70,000/yr. There are also approximately 75 research and test reactors of varying size and complexity.

Using an avera'ge of 4 days of effort for review and approval of t'he funding plan results in an estimated effort of about 1 man year at a cost of about $75,000 resulting in an annual cost of approximately $25,000 spread over 3 years.

Thus the total effort is estimated as 2.4 to 3.8 man years at a cost of about

$180,000 to $285,000 or $60,000 to $95,000/ year over 3 years.

Other impacts were estimated at the operating and decommissioning stages but were all judged minor for the following reasons:

(1) During reactor operations, total NRC staff requirements are estimated at 0.4 person year / year (about 1/2 day per facility) or $30,000/yr for ensuring that NRC approved plan requirements are being implemented.

(2) At the decommissioning s'tage, it is expected that there will be a con-siderable spread in time when actual decommissionings take place and its impact on an, annual basis should be small. Decommissioning has to be

~

reviewed even under existing regulations and overall administrative effort should be reduced at this time because of more specific require-ments. Elimination of the mandatory requirement for an environmental impact statement will result in routine use of the simpler environmental assessment. This is all that has been required in the past (prior to a recent revision to 10 CFR Part 51).

For type 2 licenses - the major resource impacts are estimated to occur within 1 to 5 years following rule amendment finalization primarily from funding

. assurance requirements for existing material licenses that have not been excepted. It is estimated that a funding plan consisting of a cost estimate and a method of providing assurance will be required of about 828 licenses.

Funding plans would be required at the time of license renewal (once every 5 years) and so efficiency of staff effort would be optimized. Moreover, it is expected that funding plan updates at license renewal would be very minimal and would primarily be based on considerations of inflation. Thus, no cost is considered for NRC funding plan cost estimate update review at license renewal.

8/17/84 21 Enclosure B

Licensees that require a plan as well as these affected but not requiring a plan would require a certification that funds have been assured by prescribed

~

methods and amounts specified in the rule. This would require little NRC staff effort. It is estimated that staff effort in evaluating and approving of a funding plan would require about 6 man days on average resulting in about 21 man years at a cost of approximately $1.6 million spread over 5 years or

$320,000/yr.

Other impacts were estimated during plant operation and decomissioning, but ,

were all judged minor for the following reasons:

(1) During plant operation, NRC inspection staff requirements are estimated as 0.9 person year / year (1/4 day per facility) or about $68,000 for assuring that rule amendment requirements are being implemented.

(2) At the decommissioning stage it is estimated that there will be consider-able spread in time when actual decommissioning occurs. It is also expected that except for the complex and costly facilities to decommis-sion, primarily fuel cycle or large non-fuel cycle ones (of which there are only few), most licensees will complete decommissioning requirements prior to their request for license termination and all that will be required is confirmation that an acceptable termination survey had been done, or equivalent proof of acceptability, and residual radioactivity levels allow for unrestricted use of the facility and termination of license. The requirement for a decommissioning plan is already required in the recent amendments to 10 CFR Part 30, 40, and 70 specifying licensee responsibility for nuclear materials and procedures for termination of of specific licenses (48 FR 32324, July 15, 1983). These amendments have been incorporated into the proposed rules to ensure uniformity of style as well as completeness.

A summary table of NRC manpower effort for type 1 and 2 licenses in terms of manpower and cost is presented in Attachment B.

8/17/84 22 Enclosure B

_ _ _ _ _ _ . _ _ . . _ _ - - _ ~ , , _ . _ _ _ - - - _ _ , _ _ _ _ - . .__ __ _ _ _ _ . - _ _. , _ _ _ . _ . . _ - . _ . _ _ - .

l l

4.1.2.2 Other Government and State Agencies Other state or government agencies are not expected to be significantly cost impacted. For state or Federal licensees, such as test or research reactors, funding assurance allowing for state or Federal agency certification will limit impacts and provide for a more efficient method of funding preparation.

It is estimated that 75% of research and test reactor licenses are federal or state owned and that funding plans plus recordkeeping requirements for the approximately 60 reactors would cost $75,000/yr over 3 years (see sec-tion 4.1.2.3, 3rd paragraph).

Agreement states must maintain comparable requirements, and will have similar impacts as that to NRC to implement these requirements. Type 2 licensees only are involved and a similar number are expected to be affected. Thus, the total impacts to all Agreement States would be similar to the impacts to NRC associated with type 2 licensees.

4.1.2.3 Industry For type 1 licenses - major impacts would be in the funding plan requirements and for recordkeeping. For funding assurance plans an initial cost estimate is required together with a method for providing reasonable assurance that such funds will be available for decommmissioning. Licensees and applicants can base estimates of decommissioning costs on the Battelle Pacific Northwest Laboratory reports on technology, safety and costs for decommissioning as well as a regulatory guide. The proposed amendments indicate that collection of

funds which can be kept in an internal reserve account provides reasonable

! assurance of availability of funds. It is recognized that some " phasing in" time for power reactor funding assurance is required for existing operating reactor licensees because otherwise this could have an immediate capital

! market resource impact. Therefore, within the interpretation of reasonable funding assurance, the NRC would recognize (for facilities where decommission-ing costs would be $5 million or more) a period of 5 years or one-third of the l remainder of years until license expiration, whichever is greater, as the time the licensee would have to make up funding costs in an annual sinking fund 8/17/84 23 Enclosure B

that would bring the fund to adequate current funding levels. As part of the NRC's elimination of the requirement for financial qualifications (47 FR 13750 March 1982) the Commission noted that requirements for decommissioning funding would be included in proposed rule amendments. Use of the option of unsegregated internal reserve collected for this purpose with gradual phasing in of reserve amounts required over a 5 year or greater period minimizes any impact that might result from this requirement.

The majority of licensed test and research reactors are owned by the State, Federal Government, or large universities. Reasonable funding for those not owned by the State or Federal Government would require a funding assurance method. This could be in the form of a broad variety of alternatives prescribed in the rule but does not include internal reserve as in the case of a multi-asseted utility. However in the most costly case, such as a surety, an annual cost of 1-2% of the face value of the surety would result (which for most would not exceed $20,000/yr) and could be reduced as funds are set aside in an external sinking fund to pay for the cost of decommissioning so long as the surety coverage plus accumulated funds are adequate.

It is estimated that a certification or funding plan as well as implementation of recordkeeping for power reactors would take about 14 to 22 days to develop (including 4 days on recordkeeping, 8 days on cost estima'.ing, and 10 days on plan implementation). This would result in an effort for the approximately 110 operating reactors (includes 30 under construction) of about 6.6 to 10.3 man years at a cost of approximately $495,000 to $773,000. When spread over 3 years this would result in a cost of'$188,000/yr. For research and test reactors, the funding plan as well as the recordkeeping effort is estimated at about 11 days on average resulting in a cost of about $3,700 per reactor.

Assuming 25% of these are industry owned, this would result in a cost of

$75,000 which when spread over 3 years results in a relatively minor cost of

$25,000/yr. Other impacts were estimated at the operating and decommissioning stages but were all judged minor for the following reasons:

(1) During the operational stage costs (primarily financial update) are estimated *as less than 0.5 person year / year ($38,000/yr) for the total industry.

8/17/84 24 Enclosure B 4

, --,rr--r-,. - - . , . . - - - - - - , - - - , - _ _ , . _ , . - - - - - _ _ - ~ - . - - . - _ - - . , - . _ - - _ --

(2) At the decommissioning stage, plans are already required. Explicit requirements would make this process more efficient. Moreover, it is expected that such explicit requirements would allow for a

• simpler presentation of environmental report requirements resulting in some reduction in cost.

For type 2 licenses - major impacts would be in the funding assurance require-ments. Details of the results presented here can be found in Attachment A. A cost estimate for decommissioning and a method of providing assurance would be required of about 1656 such licensees; it was estinated that the number of NRC and state licenses are comparable. Based on this it is also estimated that an additional 252 licensees will require certification of funding assurance of

$500,000 and about 468 others will require assurance of $100,000. Also for affected large sealed sources licensees (about 602), assurance of $50,000 will be required. The proposed rule amendments allow as much flexibility as possible for providing such assurance, in order to reduce the impacts. It is likely that many licensees (especially small licensees) will choose a surety or other guarantee method. This is estimated to cost 1-2% of its face value annually.

However, this cost can be considered an operating business expense and is tax deductible, resulting in a saving of between about 25-50% depending on the size of the licensee. If a surety method is used, then this is estimated to cost

$10.6 million annually ($1,500 to $5,000 per licensee). Licensees requiring plans are expected to utilize other allowed funding methods such as external sinking funds which may reduce funding assurance costs. It is also expected that many other licensees will use other allowable funding assurance methods, thereby reducing these estimated costs. For small entities, it is expected that the majority will be excepted (especially for medical licensees) because l

of the exception for half-lives less than 120 days, most sealed sources, Part 30

! and 70 licensees pqssessing material less than or equal to 1000 Appendix C values of 10 CFR 20, and Part 40 licensees possessing source materials less

! than or equal to 10 mCl. For those small entities affected (about 276 licenses) it is estimated that at worst the annual cost of maintaining sureties is about i

$560,000 annually ($1,500 for the majority of licensees). These small entities would be almost exclusively industrial licensees. Historical information indi-cates that such small industrial licensees are the most likely to default and it is particularly important that these licensees provide financial assurance 8/17/84 25 Enclosure B

i to ensure that health and safety will not be compromised because of a lack of funds to decommission.

For those licensees where a funding plan is required, it is estimated that the cost of developing such a plan based on a 12 day effort is about 85 man years at a cost of $6.4 million or spread over 5 years, $1.28 million/yr. No cost is considered for funding plan cost estimate updates because this occurs at license renewal and efficiency of effort can be optimized. Moreover, it is expected that this effort will be very minor and primarily pertain to con-sideration of inflation.

Other additional requirements such as recordkeeping considerations are expected to have minor impact and are considered to be consistent with good practices.

No plan is required and recordkeeping can be as simple as maintenance of a centralized reference file.

Impacts during operation or termination of license are judged minor. For the majority of licensees, decontamination and surveys can be conducted under the operating license and no plan will need to be submitted. For those facilities

which are complex and costly to decommission, detailed plans are already required. These requirements have recently been included in amendments to 10 CFR 30, 40, and 70 and have been incorporated into this proposed rule for uniformity and completeness.

4.1.2.4 Public The public, as user of electricity, has to pay for the cost of decommissioning as a routine cost and thus decommissioning costs in themselves do not constitute a special impact. However, major potential cost to the public could come from a lack of financial assurance resulting in inadequate or nonexisting licensee decommissioning funds and lead to an inability to expediently decommission.

Such a situation would result in a public burden. Use of proper practices through regulatory requirements would minimize this possibility as well as tend to keep decommissioning costs to a minimum.

8/17/84 26 Enclosure B

5. Decision Rationale An assessment of th'e costs and benefits of the proposed amendments leads to the conclusion that overall there will be a moderate increase in costs to the NRC, State and Federal agencies, industry, and other licensees and an important increase in the effectiveness of decommissioning activities that will ensure that impacts on health, safety and the environment are minor. Therefore, the proposed action is recommended. No alternatives, other than rule amendments were judged to be satisfactory. This decision is supported by both quantified cost data and a reasoned judgment on improvements to health, safety and the environment.

1

6. Implementation (a) Schedule No implementation problems are anticipated. The framework for implemen-tation is already established in the NRC, State and Federal agencies, and the industry. Major impact from initiating the rule has been minimized by allowing phase in time of requirements after rule finalization. For ~

type 1 licensees, this is 2 years for submittal of a funding plan.

For type 2 licensees, financial assurance requirements become effective 1 year after the rule becomes final. For those licensees requiring a

funding plan, such plans are required to be submitted at the time of license renewal.

(b) Relationship to Other Schedules

. It is intended that an FEIS on decommissioning be issued which will consider comments from these proposed amendments. Issuance of final amendments will occur after the FEIS has been issued. No effect on other schedules is anticipated.

8/17/84 27 Enclosure B

s s

ATTACHMENT A Cost to Affected NRC Material Licenseest .

Total Cost * - Millions Number of of Dollars (2% of Surety Licenses less tax rebates)

Licensees requiring plans and/or certification for $500,000 828 4.1 Licensees requiring certification .

for $500,000 126 0.63 Total 4.7 Licensees requiring certification 234 0.35 of $100,000 Sealed Source licensees requiring certification of $50,000 301 0.23 Overall 5.3 "For licensees requiring $500,000 certification or more use 50% tax bracket.

For licensees requiring $100,000 or less use 25% tax bracket.

tit is estimated that Agreement State licensees are equal in number and that Agreement States would have equal costs.

Estimate that the number of Agreement State licensees are equal in number and thus overall cost impact is doubled. Therefore, surety cost for all affected licenstes would be 2.x $5.3 million or about $10.6 million annually.

For small businesses, it is estimated that 50% of the licenses requiring

$100,000 certification plus 10% of those requiring $500,000 certification plus 1% of those requiring a plan are affected. This results in about 138 affected NRC small business licenses and a surety cost of 1% of 4.1 million plus 10%

of $0.63 million plus 50% of $0.35 million or about $0.28 million/yr. Thus, doubling these numbers results in an estimated total of small business licenses i of 276 at an annual cost of $0.56 million.

i 8/17/84 28 Enclosure B

ATTACHMENT B Effect and Cost of Proposed Rules to NRC -

l Manpower Cost Duration License Type NRC Office (man-year) (thousands /yr) (years)

Part 50 and 72 NRR 0.7 18 3 (certification) 2.5 (plan) 63 '

', SP 1.7 43 3 (certification) 1.3 (plan) 33 Regions 0.15 operating 12.5 over period life of reactor of license SP 0.15 operating 12:5 over period life of reactor of license i

NMSS negligible Part.30, 40, and 70 NMSS or Regions 4.2 funding 320 5 plan Regions 0.9 operating 68 over period life of facility of license 8/17/84 29 Enclosure B

DRAFT CONGRESSI0hAL LETTER I

Dear Mr. Chairman:

Enclosed for your information is a copy of a Notice of Proposed Rulemaking pertaining to decommissioning of nuclear facilities.

4 The proposed rule sets forth financial and technical criteria for the decommissioning of licensed facilities and is a result of a reevaluation of the Commission's decommissioning policy. An Advance Notice of Proposed Rulemaking was published on March 13,1918 (43 FR 103/0) announcing that the Commission was reevaluating its decommissioning policy. A Draft Generic Environmental Impact Statement (GEIS) was published, and a notice published announcing its availability for public comment o'n February 10,1981 (46 FR 11666). This proposed rule is based on an extensive data base which has been developed as part of the reevaluation and considers comments received on the Advance Notice, GEIS ano discussions with the states at 5 workshops. .

I The proposed rule defines decommissioning as always leading to unrestricted use of property. The proposed rule would require that financial assurance for decommis-sioning be provided by reactor licensees and other licensees with potential for major decommissioning costs. A number of alternative methods of providing this assurance would be allowed.

Enclosure C s - , . - - , _ - _ - - _ - - - , , . , - - - - . . . _ . , , , , , . . _ _

, , . - . . _ _ . _ , , ,, ---...-, ._e,_--_,. . _ . _ _ , - . . - . _ _ , , , - . , _ .

The proposed rule would also reouire that appropriate records be kept to be sure adequate information is available at the time of decommissioning.

More specific criteria for planning for decommissioning are also provided.

The enclosed Federal Register Notice allows 90 days for public comment.

Also enclosed is a copy of a public announcement that will be released by the Commission in the next few days.

Sincerely, Robert B. Minogue, Director Office of Nuclear Regulatory Research

Enclosures:

As stated .

Enclosure C

Draft Public Announcement NRC PROPOSES DECOMMISSIONING CRITERIA The Nuclear Regulatory Commission is proposing to amend its regulations to include technical and financial criteria for decommissioning licensed nuclear facilities. The existing regulations cover decommissioning requirements only in a limited way.

As proposed, the decommissioning guidance would deal with planning needs, timing, funding mechanisms and environmental review requirements. If adopted, the rules would assure that licensed nuclear facilities would be decommissioned in a safe and timely manner and that adequate funds would be available for decommissioning purposes.

The proposed amendments would apply to all NRC licensees except licensees for low-level radioactive waste burial facilities and high-level radioactive waste repositories which have been addressed in separate regulatory actions.

The proposed rule defines decommissioning as removing from service and reducing residual radioactivity to a level that would permit release of the property for unrestricted use and termination of license.

Three acceptable decommissioning alternatives are contemplated but not specified in the proposed rules. They are:

Enclosure D

. 2 ,

DECON: under this alternative, equipment, structures, and portions of the site contaminated with radioactivity would be removed or decontaminated to a level which would permit the property to be released for unrestricted use shortly after operations have been terminated. It would satisfy the objective of unrestricted release of the property in a much shorter time period than the other alternatives while protecting the health and safety of workers and members of the public.

SAFSTOR: under this alternative, the nuclear facility would be placed

~

and maintained in su,ch a condition that it could be safely stored and decontaminated to levels which would permit release for unrestricted use at 4

a later date. It would be an acceptable alternative if radiation doses to workers involved in the decommissioning process would be reduced significantly or in cases where almost all of the radioactivity would decay within a few months or years. It could also become necessary in other cases such as if there were a shortage of offsite radioactive waste disposal space.

ENTOMB: under this alternative, radioactive materials would be encased in a structurally long-lived material such as concrete and the structure would be maintained and surveyed until the radioactivity had decayed to a level per-mitting the unrestricted release of the property. This alternative could reduce radiation doses to workers as well as the volume of radioactive waste but would be expected to be little used because of practical considerations.

Enclosure D

r 3 .

The proposed rules would require that decommissioning begin shortly after nuclear facility operations have been terminated and that the time to reach unrestricted use be minimized.

As proposed, planning for decommissioning would be divided into two parts:

preliminary and final.

Preliminary aspects of planning are financial planning and facilitation of decommissioning. Current license holders and applicants for new licenses would have to submit either funding plans or certification of financial assurance in amounts specified in the proposed rules. Funding plans would have to include a cost estimate and means of providing financial assurance for decommissioning.

Generally, facilitation of decommissioning should be considered under the principle of keeping exposures to radiation as low as reasonably achievable; the rule would require specifically only that relevant records be kept to assure adequate information is available at the time of decommissioning.

Final planning would involve the submission of decommissioning plans for review and approval in advance of initiation of any major decommissioning activity where a significant health and safety question could be involved. These final plans would have to include as appropriate:

Enclosure D

~

o (1) a description of decommissioning procedures to be used including plans for processing and disposing of the radioactive waste; (2) a description of methods used to ensure the safety of workers and members of the public; (3) a plan for a final radiation survey to ensure that the property is suitable for release for unrestricted use; and (4) a cost estimate to ensure that adequate funds would be available before decommissioning activities were initiated.

A number of alternative methods for assuring that funds for decommissioning--

either prematurely or at the end of operations--would be available are set forth in the proposed rules. They include:

l

[

Enclosure D

a 5

(1) Prepayment--under this alternative, funds would be set aside, prior to canmencement of operations, in an account segregated from other licensee funds.

(2) Surety or insurance--this alternative involves a method to guarantee that decommissioning costs will be paid should the licensee default.

(3) External sinking fund--under this alternative, funds would be set aside periodically over the life of the facility in an account segregated from other licensee funds. This segregated account would be coupled with a surety guaranteeing funds for decommissioning in the event of licensee detault unless the licensee is an electric utility.

(4) Internal reserve--under this alternative, allowed only for utilities, funds would be set aside periodically over the life of the facility in an account which would be part of or invested in licensee assets.

l (5) Federal, state, or local certification of the availability of funds for decommissioning.

(6) Other funding methods which an applicant could demonstrate would provide l comparable assurance to the other alternatives'.

! If adopted, the new requirements would reduce the specific requirements for environmental reviews related to decommissioning by:

l Enclosure D l

l t

e-l l

l i

6 (1) Providing that the decommissioning of reactors and certain materials facilities would no longer require environmental impact statements unless specifically determined by the Commission; environmental assessments would be prepared, however.

(2) Providing that information cor.cerning environmental impacts would be submitted by licensees as a supplement to previously developed environmental reports.

(3) Providing that approval of funding plans would be a categorical exclusion (a category of action which does not individually or cumulatively have a significant effect on the human environment and no environmental review is required).

Written comments on the proposed decommissioning criteria, written as ,

amendments to Parts 30, 40, 50, 51, 70 and 72 of the NRC's regulations, should be submitted by (date) . They should be addressed to the Secretary of the Commission, Nuclear Regulatory Commission, Washington, DC 20555,

' Attention: Docketing and Service Branch.

Enclosure D a

_ ._ ._. _. __