ML19085A310
| ML19085A310 | |
| Person / Time | |
|---|---|
| Site: | Callaway  |
| Issue date: | 03/22/2019 |
| From: | Ameren Missouri, Union Electric Co |
| To: | Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML19085A307 | List: |
| References | |
| ULNRC-06494 | |
| Download: ML19085A310 (8) | |
Text
ULNRC-06494 Page 1 of 8 NRC Plant Decommissioning Funding Status Report-2019 10 CPR 50.75(.f)(l) requires each power reactor licensee to report to the NRC on a calendar year basis, beginning on March 31, 1999, and every 2 years thereafter, on the status of its deco1mnissioning funding for each reactor or share of reactor it owns. Union Electric Company d/b/a Ameren Missouri ("Ameren Missouri") hereby reports the decommissioning funding status for its Callaway Plant ("Callaway Energy Center").
The scope of the Ameren Missouri 2019 NRC Biennial Deconunissioning Funding Status Report specifically pe1iains only to the decommissioning funding status of the Callaway Energy Center, or "plant. The decommissioning funding plan for the independent spent fuel storage installation (ISFSI) was submitted on August 6, 2018~ via Ameren Missouri Jetter ULNRC-06447, Subsequeut ISFSI decommissioning funding status reports wil1 be submitted at intervals not to exceed tlu-ee years, in accordance with the requirements of l O CPR 72.30.
Ameren Missouri is required to file updates to decommissioning cost estimates and funding adequacy projections on a triennial basis with the Missouri Public Service Commission (MPSC) as discussed more fully in Section 2 below. The scope of these biennial filings includes both the plant and the ISFSI. Ameren Missouri obtains separate, updated site-specific decommissioning cost estimates and prepares separate, updated, funding adequacy analyses for the plant and for the ISFSI for the MPSC triem1ial filings. When making these filings, Ameren Missouri has requested that the MPSC address the plant and ISFSI separately in their orders issued pursuant to the filings. The decommissioning tt*ust fund established by Ameren Missouri bas separate segregated sub-accounts for plant and ISFSI decommissioning funding.
The site-specific decommissioning study referenced in Ameren Missouti's 2019 NRC biem1ial deconunissioni.ng funding status report (as follows) is provided for infonnation only. This site-specific study was part of the documentation presented to the MPSC in the Company's 2017 MPSC triennial update filing.
For this report, Ameren Missouri is using the NRC three-factor fommla for determining decommissioning funding adequacy.
- 1. Amount of Decommissioning Funds Estimated to be Required Pursuant to 10CFR 50.75 (b) and (c)
For the purposes of this 2019 NRC biennial plant decommissioning funding status rep01i, Ameren Missouri is using the "three-factor fonnula" specified in 10 CFR 50.75(b) and (c) 1 for determining deommnissioning :funding adequacy.
The minimum decommissioning cost estimate, pursuant to the 10 CFR 50. 75(b) and (c) inethodology, is $516,964 000 in terms ofDecember 2018 dollars.
The detailed calculations from which the above estimate is de1ived are contained in.
ULNRC-06494 Page 2 of 8 Ameren Missouri also has site-specific decommissioning cost estimates for decommissioning of the Callaway Energy Center prepared by TLG Services, Inc. of Bridgewater, Connecticut.
The specific studies are conducted to comply with Missouri Law:
4 CSR 240-3.185 Submission of Reports Pertaining to the Decommissioning of Electric Utility Plants (3) On or before September 1, 1990 and every three (3) years after that, utilities with decommissioning trust funds shall perform and file with the commission cost studies detailing the utilities' latest cost estimates for decommissioning their nuclear generating unit(s) along with the funding levels necessary to defray these decommissioning costs. These studies shall be filed along with appropriate tariff(s) effectuating the change in rates necessary to accomplish the funding required. In addition, the commission, at any time for just cause, may require a utility to file an updated decommissioning cost study, funding requirement and associated tariff(s).
The current site-specific analysis approved by the MPSC was performed in August 2017. It calculated a decommissioning cost estimate of $934,296,000 in terms of 2017 dollars.2 Ameren Missouri considers this site-specific decommissioning cost estimate of $934,296,000 as the estimate for which funding adequacy must be assured for MPSC funding adequacy purposes. Due to its site-specific nature, it is a more accurate estimate of projected decommissioning costs.
The site-specific estimate is considered more conservative as it includes non-radiological site restoration expenses and spent fuel management expenses, in addition to radiological license tennination expenses. In the 2017 study, approximately 82.00% ($766,145,000) of the
$934,296,000 site-specific cost estimate is associated with physical decontamination and dismantling of radioactive systems and structures such that the license can be tenninated.
Management and transfer of spent fuel accounts for 7.32% ($68,391,000) of the site specific cost estimate. The remaining 10.68% ($99,760,000) is for demolition of designated non-radioactive structures and limited site restoration.
These studies are considered snap shots of the decommissioning cost and are used to detennine if any changes are required in the contributions to the decommissioning fund. Due to the complexity of the study the use of any cost escalation factors would introduce considerable uncertainty into the escalated cost. Since this study is conducted every three years, Ameren does not escalate the study cost estimates for the years between sh1dy periods.
An informational only copy of the 2017 Site-Specific Decommissioning Cost Analysis for the Callaway Energy Center is provided in Enclosure 3.
- 2. Amount of Decommissioning Funds Accumulated to the End of the Calendar Year Preceding the Date of this Report
ULNRC-06494 Page3 of8 Tbe total amount accumulated in the decommissioning fund as of December J 1, 2018 is
$629,988,615.48. This is an "after tax liquidation value" which reflects the final funds that would be received upon liquidation of the fund's assets and the payment of income taxes on realized capital gains. This is calculated as follows: 3 Market Value:
Less:
Book Value:
Equals:
Umealized Gain:
Income Tax on Unrealized Gain
@ 20% Rate:
After-Tax Liquidation Value:
Missou1i Jurisdictional Sub account
$665,598,529.10 405,096,966.06
$260,501,563.04
$52,100,312.61
$613,498,216.49 FERC TOTAL Jurisdictional Overall Subaccount Fuud
~-----------
~~
$17,197,392.15
$ 682,795,92125 13,662,426.31 418 759,392.37
$ 3 534,965.84
$ 264,036,528.88
$ 706,993.17
$ 52,807 305.78
$ 16,490,398.98
$629,988 615.48 Copies of the trustee's "Statement of Net Assets Available for Benefits" as of December 31 2018 confi11ning the foregoing valuation amounts is provided in Enclosure 4.
This decommissioning fund balance indicated above is a total amow1t intended to cover the full green-fielding of the site. The funds in the trust ft.md are not segregated into sub-accounts for radiological decommissioning versus non-radiological decommissioning.
Based on the estimated plant decommissioning costs contained in the 2017 site specific decommissioning cost estimate allocation percentages for License Terinination, Spent Fuel Management and Site Restoration can be calculated. By applying these percentages to the after-tax liquidation value of the trust fund, the dollar amounts of the overall trust fund a11ocated for the deco1mnissioning cost categories can be derived:
License Termination:
Spent Fuel Management; Site Restoration:
82.00%
7.32%
10.68%
of of of
$ 629,988,615
$ 629,988,615
$ 629,988,615
$ 516,590 664
$ 46,115,167
$ 67,282,784 Missouri's definition of deconunissioning encompasses both the radjological and non-radiological structures systems and components of the plant, as stated in the following section from the Missouri Code of State Regulc.1,tions:
4 CSR 240-20.070 Decommissioning Trnst Funds
( 1) As used in this rule, decommissioning means those activities undertaken in connection with a nuclear generating unit's retirement from service to ensure that the
ULNRC-06494 Page 4 of 8 final removal, disposal, entombment or other disposition of the unit and of any radioactive components and mate1ials associated with the unit, are accomplished in compliance with all applicable laws, and to ensure that the final disposition does not pose any undue threat to the public health and safety. Decommissioning includes the removal and disposal of the strnctures, systems and components of a nuclear generating unit at the time of decommissioning.
Missouri law requires triennial updates of the dec01mnissioning cost estimate and of funding adequacy. Missomi law also provides for the changing of rates charged to ratepayers to recover any changes in funding levels necessitated by the triennial update analyses. For these reasons, Ameren Missouri considers the amount in the fund to be fully adequate to cover radiological decommissioning with an excess that could be applied to non-radiological decommissioning. The triennial update process required by Missouri statutes is considered adequate to ensure that any funding shortfalls will be addressed and corrected in a timely manner. The applicable sections from the Missouri Code of State Regulations are as follows:
4 CSR 240-3.185 Submission of Reports Pertaining to the Decommissioning of Electric Utility Plants (3) On or before September 1, 1990 and every three (3) years after that, utilities with decommissioning trust funds shall perf01m and file with the commission cost studies detailing the utilities' latest cost estimates for decommissioning their nuclear generating unit(s) along with the funding levels necessary to defray these decommissioning costs.
These studies shall be filed along with appropriate tariff(s) effectuating the change in rates necessary to accomplish the funding required. In addition, the commission, at any time for just cause, may require a utility to file an updated decommissioning cost study, funding requirement and associated tariff(s).
4 CSR 240-20.070 Deconunissioning Trust Funds (7) Upon the filing of the appropriate tariff(s) as set in 4 CSR 240-3.180, the commission shall establish a schedule of proceedings which shall be limited in scope to the following issues:
(A) The extent of any change in the level or armual accrual of funding necessary for the utility s decommissioning trnst fund; and (B) The changes in rates which would reflect any change in the funding level or accrual rate.
In past h*iennial filings, the MPSC has accepted the site-specific deconnnissioning cost estimates and the funding adequacy analyses based on full green fielding of the site, as would be indicated under Missouri's legal definition of decommissioning. There is no basis for assuming any change in this practice in the future.
Consequently, it can be considered that the trust fund balance indicated is a total balance, not segregated on the basis of radiological versus non-radiological funding. As the Missouri
ULNRC-06494 Page 5 of8 mechanism for assuring funding adequacy and for recovering decommissioning expenses from ratepayers il1cludes the non-radiologiGal decommissioning expenses as well as the radiological expenses, it is not necessary to segregate the decommissioning fund balances.
Any shortfalls in funding for full green fielding are expected to be recovered from ratepayers as part of the triennial funding adequacy updating process.
- 3. Schedule of the Annual Amounts Remaining to be Collected:
As of December 31, 2018, the schedule of the annual decomrnissioning expense amounts remaining to be collected from ratepayers is $6 323,396 per year for years 2019 through year 2043 and $5,054 386 for year 2044.
As the operating license expires October 18, 2044 and decommissioning expense collections from ratepayers are assumed to cease upon the cessation of plant operations 2044 is a "paiiial year" for collection and funding purposes1 with the annual amount being pro-rated for three calendar quaiiers plus eighteen days:
(75% X $6 323 396) + [(18/365) X $6,323,396] = $5 054 386 The funding adequacy analysis perfonned by Ameren Missouri and approved by the MPSC is based on cash flows deposited into the decommissioning trnst fund. Quarterly deposits into the fund are made on the 25111 of the month following each quarter-end. Therefore, each year's cash contributions to the deconunissioning fund will reflect the expense collected from ratepayers from Q4 of the preceding year plus that for Ql, Q2 and Q3 of the current year. For that reason, when looking at the funding adequacy analysis performed for the plant, the "Annual Cash Inflow from Contributions to Fund" value for the year 2044 will indicate
$6 635,235. That represents the $1.580,849 expense collected from ratepayers for Q4 of 2043 pl us the prorated $5,054 3 86 for the January 1, 2044 through October 18, 2044, calculated above.
- 4. Actions bv Regulatory Rate Setting Authorities, Assumptions Used Regarding Rates of Escalation in Decommissioning Costs, Rates of Earnings on Decommissioning Funds, and Rates of Other Factors Used in Funding Projections:
In accordanc with the IJreviously cited 4 CSR 240-3.185 requirement, Ameren Missouri was required to file its latest updated decommissioning cost estimate and funding adequacy analysis with the MPSC by September 1, 2017.
On September 1, 2017, Ameren Missouri filed its "Application for Acceptance of Decommissioning Cost Estimates for Callaway Energy Center, Including Independent Spent Fuel Storage Installation, and Approval of Funding Level for Nuclear Decommissioning Trust Fund' (File No. E0-2018-0051 ). A copy of the app1ication is provided in Enclosure 5. to this application contained the August, 2017 decommissioning cost estimate for the Callaway Energy Center.4 Attachment 4 to the application contained Ameren MissoU1i's analysis of the required funding level for the decommissioning trust fund,
ULNRC-06494 Page 6 of 8 including all of the financial and economic assumptions on which the funding analysis was based. A copy of the relevant pages of Attachment 4 to the application is provided in Enclosme 6. 5 On January 4, 2018, Ameren Missouri and the MPSC Staff entered into a "Non-Unanimous Stipulation and Agreement" that received Ameren Missouri's application and funding level analyses into evidence and requested the MPSC to approve the funding level requested by Ameren Missouri in the application, as well as the real rate of return and other financial and economic assumptions used in the funding level analysis. A copy of the Non-Unanimous Stipulation and Agreement" is provided in Enclosme 7.
On January 23, 2018, the MPSC issued an "Order Approving Stipulation and Agreement" (effective February 22, 2018) that approved the foregoing "Non-Unanimous Stipulation and Agreement" as well as continuing the contribution to the decommissioning trust fund at the cmrnnt level of$6,758,605 annually (with $6,323,396 allocated to Plant dec01mnissioning and $435,209 allocated to ISFSI decommissioning) and affirming that Missouri is 100%
responsible for the decommissioning liability. T11e MPSC Order also approved the rates of return and other :financial and economic assumptions described in the "Non-Unanimous Stipulation and Agreement" and used in the funding level analysis.
In the Order, the MPSC approved the following actuarial assumptions used by Ameren Missouri in its decommissioning funding adequacy analysis filed with the application and referenced in the Non-Unanimous Stipulation and Agreement:
The Missouri jurisdictional allocator is l 00%.
The federal income tax rate is 20%.
The state income tax rate is 0%.
The composite federal & state income tax rate is 20%.
An asset allocation of 65% equities and 35% bonds is assumed to exist through 2043, at which time all equity investments will be divested.
Investment management and trnst fees are estimated at 15 basis points annually.
An inflation rate of 2.200% is assumed for general ("CPI") inflation.
11m pre-tax & expense nominal return on bonds is assumed to be 3.900%.
The pre-tax & expense real return on bonds is assumed to be 1. 700%.
The pre-tax & expense nominal return on equities is assumed to be 8.600%.
The pre-tax & expense real return on equities is assumed to be 6.400%.
The pre-tax & expense nominal weighted-average return is assumed to be 6.955%
through the 2043 date of divestiture of equity investments.
The pre-tax & expense real weighted-average return is assumed to be 4.755% through the 2043 date of divestiture of equity investments.
The pre-tax & expense real weighted-average return is assumed to be 1.700% following the 2043 date of divestiture of equity investments.
Based on the foregoing assumptions, the anticipated annual decommissioning contributions would be adequate up to an annual decommissioning inflation rate of 4.0519%. The
ULNRC-06494 Page7of8 annualized rate of earning on decommissioning fund return (pre-tax and fee) required at the above level of inflation is 6.511 %.
A copy of the MPSC "Order Approving Stipulation and Agreement is provided in Enclosure
- 8.
As of the March 22, 2019 date of this repmi, the MPSC Order in this Case E0-2018-0051 continues to be the effective ruling establishing state regulatory authority approved return and funding assl.1ll1ptions.
- 5. Anv Contracts Upon Which the Licensee is Relving on Pursuant to 10 CFR 50.75(E)(L)(V):
None
- 6. Any Modifications Occurring to a Licensee's Current Method of Providing Financial Assurance Since the Last Submitted Report:
None.
The Company has used the "External Sinking Fund method since 1985.
- 7. Any Material Changes to Trust Agreements:
There have been oo material changes to the qualified trust agreement since the last report.
The non-qualified trust that was required by lllinois has been eliminated, as Ameren Missouri no longer has customers in Uhnois. This non-qualified trust was never funded. 6
- 8. References
- 1. ULNRC-06201, "Status of Decommissioning Funding," dated March 30 2015
- 2. ULNRC-06349 " Stah1s of Decommissioning Funding," dated March 30, 2017 L The NRC formulas in section 10 CFR 50.75(c) include only those decommissioning costs incuned by licensees to remove a facility or site safely from service and reduce residual radioactivity to levels that pennit: (1) release of the property for unrestricted use and tennination of the license* or (2) release of the property under restricted conditions and termination of the license. The cost of dismantling or demolishing non-radiological systems and struch1res and the costs of managing and storing spent fuel on site until transfer to DOE are not included in the 10 CFR 50.75(c) cost formulas.
ULNRC-06494 Page 8 of 8 2 This estimate is applicable to the 60-year operating life, DECON deconunissioning alternative scenario with low-level radioactive waste processing, and is presented in Appendix C of the August, 2017 site specific decommissioning cost estimate. This is the option Ameren Missomi intends to utilize for plant decommissioning. (Note: The cost estimates shown in Appendix Care consolidated totals for the p1ant and for the ISFSI. The table on page xix of xx of the "Executive Summary" and Tables 3.1, 3.1 a, 3.1 b and 3.1 c in the "Cost Estimate" section of the rep01t show the breakdown of the plant versus ISFSI costs.)
3 The valuations of the Missomi and FERC jmisdictional subaccounts are utilized in this report to calculate the total valuation of the plant decommissioning fund as the trust statements produced by the trustee do not include a consolidated report that does not include the ISFSI decommissioning subaccounts. Consequently, to provide supporting documentation, it was necessary to provide the trust statements for the two component plant decommissioning funds:
the Missouri and FERC subaccounts and sum their valuations.
4 The August 2017 site specific decommissioning cost estimate (Attachment 3 to the "Application for Acceptance of Decommissioning Cost Estimates for Callaway Energy Center, Including Independent Spent Fuel Storage Installation, and Approval of Fm1ding Level for Nuclear Decommissioning Trust Fund") is provided in Enclosure 3 to this report.
5 Enclosure 6 only includes the pages of the funding adequacy model applicable to the plant decommissioning. The portions of the model app1icable to the ISFSI were not included.
6 On February 10, 2005, the MPSC approved Ameren Missouri's proposed transfer of its Illinois electiic and gas properties to an Illinois affiliate, Ameren Illinois. The closing date for the property transfer was May 2, 2005. In accordance with the MPSC Order, the tax-qualified decommissioning trust's Illinois jurisdictional sub-account was eliminated following the closing.
Ninety-eight percent of the assets in the existing Illinois subaccount as of the closing date were reallocated to the Missouri sub-account and the remaining two percent were reallocated to the Wholesale sub-account. As a result of the transfer, Ameren Missouri no longer has any 01.inois ratepayers and will no 1onger collect decommissioning contributions in Illinois for its Callaway Plant, which is located in Missouri. The decommissioning liability previously borne by the Illinois ratepayers was transfe1Ted to Ameren Missouri and Wholesale customers.
Decommissioning expenses collected from Missomi jurisdictional ratepayers was increased by
$272,194 annually in accordance with the MPSC Order to account for the increased decommissioning liability borne by the Missouri ratepayers following the property transfer.