ML20155A085

Exemption from 10CFR50.54(w) Requirements Re Increase in Amount of Onsite Property Damage Insurance Required to Be Carried by Licensees

ML20155A085
Person / Time
Site:	Palisades, Big Rock Point, 05000000
Issue date:	09/30/1988
From:	Holahan G Office of Nuclear Reactor Regulation
To:	CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.)
Shared Package
ML20155A076	List: ML20155A072 ML20155A078 ML20155A085
References
NUDOCS 8810050203
Download: ML20155A085 (4)

Text

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7590-01 UNITED STATES OF AMERICA i NUCLEAR REGULATORY COMilSSION In the matter of )

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CONSUMERS POWER COMPAhY ) Docket No. 50-255

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(Palisades Plant) )

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EXEMPTION I.

Consumers Power Coga ,y (the licensee) is the holder of Provisional Operating License No. DPR-20, which authorizes operation of the Palisades Plant. l The license provides, among other things, that the Palisades Plant is subject to ail rules, regulations, and orders of the Nuclear Regulatory Commission (the ,

Commission) now or hereafter in effect. [

The facility consists of a pressurized water reactor at the licensee's site located in Van Buren County, Michigan.

II. ,

1 On August 5, 1987, the Commission published in the FEDERAL REGISTER a final rule amending 10 CFR 50.54(w). The rule increased the amount of on-site i property damage insurance required to be carried by the Commission's power ,

reactor licensees. The rule also required these licensees to obtain by October 4,1988, insurance policies that prioritized insurance proceeds for }

stabilization and decontamination after an accident and provided for payment of proceeds to an independent trustee who would disburse funds for decontamination  !

and cleanup before any other purpose. Subsequent to publicativ of the rule, the Commission has been informed by insurers who offer riuclear property ,

insurance that, despite a good faith effort to obtain trustees required by the ,

rule, the decontamination priority and trusteeship provisions will not be able '

to be incorporated into policies by the time required in the rule. In response 8S10050203 8so93o PDR ADOCK 05000155 PDC '

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.g.

3 to these comments and related petitions for rulemaking, the Commission has proposed a revision of 10 CFR 50.54(w)(5)(1) extending the impienentation schedule for 18 months (53 FR 36338, September 19,1988). However, because it is unlikely that this rulemaking action will be completed by October 4, 1988, the Commission is issuing a temporary n emption from the requirements of 10 CFR 50.54(w)(5)(i) until completion of the pending rulemaking extending the implementation date specified in 10 CFR 50.54(w)(5)(1), but not later than

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1 April 1, 1989. Upon completion of such rulemaking, the licensee shall comply

with the provisions of such rule.

III.

Pursuant to 10 CFR 50.12 "The Commission may, upon application by any j interested person or upon its own initiative, grant exemptions from the requirements of the regulations of (10 CFR Part 50], which are ... Authorized by law, will not present an undue risk to the public health and safety, and ar, consistent with the common defense and security." Further, Section 50.12(a)(2) provides inter alia, "The Comission will not consider granting an exemption unless special circumstances are present. Special circumstances are present whenever ... (v) The exemption would provide only temporary relief from the applicable regulation and the licensee has made good faith efforts to comply with the regulation."

Despite a good faith effort to comply with the provisions of the rule, insurers providing property damage insurance for nuclear power facilities and licensees insured by such insurers have not been able to comply with the regulation and the exemption provides only temporary relief from tne applicable regulation.

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As noted by the Commission in the Supplementary Information accompanying the prcposed rule, there are several reasons for concluding that delaying for i a reasonable time the implementation of the stabilization and decontamination priority and trustesship provisions of Section 50.54(w) will not adversely affect protection of public health and safety. First, during the period of  ;

delay, the licensee will still be required to carry $1.06 billion insurance.

This is a substantial amount of coverage that provides a significant financial cushion to licensees to decont3minate and clean up after an accident even t without the prioritization and trusteeship provisions. Second, nearly 75% of the required coverage is already prioritized under the decontamination liability and excess property insurance language of the Nuclear Electric Insurance '

limited-II policies. Finally, there is only an extremely small probability of a serious accident occurring during the exemption period. Even if a serious i

accident giving rise to substantial insurance claims were to occur, the [

Commission would be able to take appropriate enforcement action to assure r

adequate cleanup to protect public health and safety and the environment. l IV.  !;

Accordingly, the Commission has determined, pursuant to 10 CFR 50.12(a),

that (1) a temporary exemption as described in Section III is authorized by l law, will not pru ent an undue risk to the public health and safety, and is consistent with the common defense and security and (2) in this case, special  ;

circumstances are present as described in Section III. Therefore, the f

Commission hereby grants the following exemption: f I

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a .

Consumers Power Company is exempt from the requirements of 10 CFR 50.54 (w)(5)(i) until the completion of the pending rulemaking extending the implementation date specified in 10 CFR 50.54(w)(5)(i), but not later than April 1, 1989. Upon completion of such rulemaking the licensee shall comply with the provisions of such rule.

Pursuant to 10 CFR 51.32, the Commission has determined that the granting of this exemption will not result in any significant environmental impact

( 53 FR 38118 ).

This exemption is effective upon issuance.

Dated at Rockville, Maryland this'30th day of september , 1988.  !

l FOR THE NUCLEAR REGULATORY COMMISSION bQW  !!' - _

Gary M. Holahan, Acting Director Division of Reactor Projects - III, IV, and Special Projects Office of Nuclear Reactor Regulation l

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