ML060820303
| ML060820303 | |
| Person / Time | |
|---|---|
| Site: | Big Rock Point File:Consumers Energy icon.png |
| Issue date: | 03/21/2005 |
| From: | Haas K Consumers Energy |
| To: | Document Control Desk, NRC/FSME |
| References | |
| Download: ML060820303 (4) | |
Text
Cosmr Energ A CMS Energy Company Kurt M. Haas General Manager March 21, 2005 U.S. Nuclear Regulatory Commission Document Control Desk Washington, DC 20555-0001 DOCKETS 50-155 AND 72-043 - LICENSE DPR BIG ROCK POINT PLANT -
CERTIFICATION OF FINANCIAL ASSURANCE FOR DECOMMISSIONING PURSUANT TO 10 CFR 50.75(f)(1)
Pursuant to 10 CFR 50.75(f)(1) the attachment to this letter serves as an annual report to the NRC on the status of Big Rock Point Plant's financial assurance for decommissioning. This report addresses financial status as of December 31, 2005.
If you have any questions or comments on this report, please contact William J. Trubilowicz, Cost, Scheduling, and Purchasing Manager at 231-547-8341.
Kurt M. Haas Site General Manager cc: Administrator, Region III, USNRC NRC Decommissioning Inspector, Big Rock Point NRC NMSS Project Manager Big Rock Point Restoration Project a 10269 US-31 North
- Charlevoix, MI 49720
- wwconsumersenergycom P IU65 01%
ATTACHMENT 1 CONSUMERS ENERGY BIG ROCKPOINT DOCKET NUMBER 50-155 CERTIFICATION OF FINANCIAL ASSURANCE FOR DECOMMISSIONING March 21, 2006 2 Pages
CONSUMERS ENERGY COMPANY Big Rock Point Plant Docket 50-155 License DPR-6 CERTIFICATION-OF FINANCIAL ASSURANCE FOR DECOMMISSIONING March 2006 Consumers Energy Company (Consumers Energy or Company) submits this certification of financial assurance for decommissioning in compliance with 10 CFR 50.75(f)(1).
- 1. Consumers Energy owns a 100% undivided interest in the Big Rock Point Plant (Big Rock) and provides financial assurance for decommissioning through the use of an external sinking fund that was funded by rates that were established by cost of service ratemaking regulation. On August 29, 1997, Consumers Energy voluntarily shut Big Rock down and began to decommission it pursuant to the Post Shutdown Decommissioning Activities Report that was submitted to the NRC.
- 2. The Michigan Public Service Commission (MPSC) regulates decommissioning funding for Big Rock.
- 3. The amount of decommissioning funds estimated to be required, based on a 2003 TLG site-specific decommissioning study and updated by Consumers Energy in October 2005, is $469.2 million. Costs are in year of expenditure dollars. The site-specific study included all costs necessary to restore the Big Rock site to a greenfield condition. Included in the October 2005 updated estimate are $358.1 million of NRC radiological decommissioning costs, $73.6 million for spent fuel storage costs, $36.0 million of greenfield costs, and $1.6 million of post September 11, 2001 (Post 9-11) incremental security costs. Based upon a review of radiological costs through February 2006 and projected remaining radiological decommissioning costs, the decommissioning funds currently estimated to be required for radiological decommissioning are
$352.5 million. This reflects a decrease for NRC radiological decommissioning costs of approximately $5.6 million from the October 2005 estimate of $358.1 million,
- 4. MCL 460.10d(4), effective December 20, 2002, provides for the separate recovery from ratepayers of enhanced security costs that are incurred before January 1, 2006 and are a result of federal or state regulatory security requirements issued after September 11, 2001. Consumers Energy has calculated that the $1.6 million of Post 9-11 incremental security costs included in the estimate are recoverable from ratepayers pursuant to MCL 460.1 Od(4).
- 5. Of the $352.5 million of NRC radiological decommissioning costs which are currently estimated to be required, $317.8 million had been withdrawn from the MPSC jurisdictional external sinking fund and $8.8 million of Federal Energy Regulatory Commission jurisdictional expenditures had been made by December 31, 2005, leaving a remaining cost of $25.9 million. Financial assurance for the $25.9 million of remaining NRC radiological decommissioning costs has been provided for through funds in the external sinking fund and assumed fund earnings. At the end of 2005, the balance in the Company's external sinking fund was $10.5 million, based on State Street Bank and Trust, December 31, 2005 Annual Reports. The year-end balance reflects withdrawals of $317.8 million to cover NRC radiological decommissioning expenditures incurred through December 31, 2005. In March 2006, Consumers Energy deposited an additional $15.5 million into the decommissioning trust to provide full funding for the remaining $25.9 million of NRC radiological decommissioning costs. Should additional funding for radiological decommissioning be needed, Consumers Energy plans to provide such funding. Consumers Energy anticipates that expenditures for radiological decommissioning will be completed during the first quarter of 2007.
C:\Documents and Settings\kmhaas\My Documents\BRP 2006 Certification.doc 1
- 6. Based on the MPSC's March 22, 1999 Order in Case No. U-1 1662, Consumers Energy discontinued decommissioning funding effective December 31, 2000 and had been relying solely on the fund earnings to cover the remaining amount of decommissioning expenditures.
- 7. On March 31, 2004, Consumers Energy filed with the MPSC its "2004 Report on the Adequacy of the Existing Provision for Nuclear Plant Decommissioning" for Big Rock. This report included the 2003 TLG site-specific decommissioning study results and assumed a 2.8% decommissioning cost escalation rate for the remaining cost, an 8.5% before tax earnings rate for the equity portion of its Qualified trust, and a 1.5% after tax earnings rate for the fixed income portion of its Qualified trust.
The $15.5 million of new funding placed in the Non-Qualified trust in March 2006 has an assumed 2.93% after tax earnings rate.
- 8. Consumers Energy has not relied on any contract obligations pursuant to 10 CFR 50.75(e)(v) to meet its NRC decommissioning funding assurance.
- 9. Since the last Certification of Financial Assurance for Decommissioning Was filed with the NRC on March 31, 2005, Consumers Energy has not modified its method of providing financial assurance and there have been no changes to the January 1, 2004 amended and restated Trust Agreement between Consumers Energy Company and State Street Bank and Trust Company.
To the best of my knowledge, information and belief, the foregoing statements are true and correct.
-- obert A. Fenech Senior Vice President Nuclear, Fossil and Hydro Operations
- Sworn
- and subscribed to this the 20th day of March, 2006 Lin a J. Richis, Notary Public, Jackson County, Michigan My Commission Expires: 07/30/2006 Acting in the County of Jackson C:\Documents and Settings\kmhaas\My Documents\BRP 2006 Certification.doc 2