ML20216E748

Submits Response to Concerns Re Regulatory Guide 3.66 with Resident Authority on Decommissioning Funding Plan & Decommissioning Financial Assurance Guidance

ML20216E748
Person / Time
Site:	07001201
Issue date:	09/13/1999
From:	Mendelsohn B NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS)
To:	Hunel J FRAMATOME COGEMA FUELS (FORMERLY B&W FUEL CO.)
References
RTR-REGGD-03.066 TAC-L31233, NUDOCS 9909170170
Download: ML20216E748 (3)

Text

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[.M ,A.j UNITED STATES NUCLEAR REGULATORY COMMISSION g, l g '4' WASHINGTON / D.C. 20556-0001 '

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[# September 13, 1999 Mr. Jean-Claude Hunel, Treasurer Framatome Cogema Fuels ,

3315 Old Forest Road l

. P.O. Box 10935 '

Lynchburg, VA 24506-0935  ;

SUBJECT:

DECOMMISSIONING FUNDING ASSURANCE OPTIONS (TAC NO. L31233)

Dear Mr. Hunel:

' I have discussed your August 18,1999, letter conceming Regulatory Guide 3.66 with our 4 resident authority on this document and its decommissioning financial assurance guidance. As you know, any change that you wish to make to your financial assurance mechanism as a result of your review of Regulatory Guide 3.66, or of its draft replacement, DG-3014 (which was l Issued for comment on July 14,1999), would require you to submit for NRC approval a proposed revision to your Decommissioning Funding Plan and financial surety arrangements.

Following are some answers to your questions on the prepayment mechanism of a trust fund:

1. Are investments limited to obligations of the Federal Government and State and Municipal bonds as specifically delineated on page 4-20 in Section 6 (b)? This definition is not present on page 4-14 in Section 6 of the Trust Fund Agreement and the inclusion of the prudent investorlanguage would seem to indicate that otherinvestments would be allowed. Also, Exhibit 3-5 provides for stock and other securities to be listed in the description of trust property section. We would appreciate any clarification of this issue that can be provided. No, investments are not limited to obligations of the Federal Govemment and State and Municipal bonds, but the investments should be sufficiently prudent to give assurance that decommissioning funds will be available. The Trust Management guidance for a Trust Fund Agreement (Section 4.3.1 of Regulatory Guide .

3.66) and for a Standby Trust Agreement (Section 4.3.2) were meant to be identical.

This has been corrected in the revised draft DG-3014 where the Trust Management sections of the Model Trust Fund Agreement (Section 4.4) and of the Model Standby Trust Agreement (Section 17.4) are worded identically.

2. After the annual valuation of the Trust Fund, what are the available options if the value of the Trust greatly exceeds the value required for the assurance of decommissioning?

Is there any provision made for the potential removal of this excess value from the trust before decommissioning begins? We could not find this iss NRC approval, excess value may be remove Qssed. Subject to

'e decommissioning

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p-o c Jean-Claude Hunel l 2

3. It is also our understanding from Section 3.2.5 that we can use the prepayment trust 1

. fund mechanism and the curmnt surety standby trust letter of credit method in '

combination as long as the total of the two provides sufficient financial assurance for decommissioning costs. is this understanding correct? Yes, provided that this is consistent with your approved Decommissioning Funding Plan and financial surety j arrangements.

- I hope that this letter helps you in your deliberations regarding meeting our requirements in a least burdensome manner.

4 Sincerely, <

Original signed by:

Barry T. Mendelsohn, Project Manager Licensing Team 1 Licensing and International Safeguards Branch Division of Fuel Cycle Safety and Safeguards, NMSS .

Docket 70-1201 ,

i License SNM-1168 cc:cc: Mr. Charles A. Armontrout, Manager J Licensing and Quality Systems ,

Framatome Cogema Fuels r Lynchburg Manufacturing Facility i L P.O. Box 11646 )

Lynchburg, Virginia 24506-1646 {

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DISTRIBUTION: (Control No. A60S) '

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l Jean Claude Hunel 2

3. It is also our understanding from Section 3.2.5 that we can use the prepayment trust

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fund mechanism and the current surety standby trust letter of credit method in combination as long as the total of the two provides sufficient financial assurance for decommissioning costs is this understanding correct? Yes, provided that this is consistent with your approved Decommissioning Funding Plan and financial surety arrangements.

I hope that this letter helps you in your deliberations regarding meeting our requirements in a least burdensome manner.

Sincerely, T l' Barry T. Mendelsohn, Project Manager Licensing Team 1 Licensing and International Safeguards Branch Division of Fuel Cycle Safety and Safeguards, NMSS Docket 70-1201 License SNM-1168 cc: Mr. Charles A. Armontrout, Manager Licensing and Quality Systems Framatome Cogema Fuels Lynchburg Manufacturing Facility P.O. Box 11646 ,

Lynchburg, Virginia 24506-1646