ML20141A447

Requests Concurrence on Pr, Financial Protection for Permanently Shutdown Np Reactors,10CFR50.54(W) & 10CFR140.11

ML20141A447
Person / Time
Issue date:	06/17/1997
From:	Thadani A NRC OFFICE OF NUCLEAR REGULATORY RESEARCH (RES)
To:	Collins S, Olmstead W, Paperiello C NRC (Affiliation Not Assigned), NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS), NRC OFFICE OF THE GENERAL COUNSEL (OGC)
References
NUDOCS 9706200297
Download: ML20141A447 (56)

Text

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p et:q g t. UNITED STATES g j f

NUCLEAR REGULATORY COMMISSION o WASHINGTON, D.C. 2066dHm01 k

9 . . . , + ,o June 17,1997 MEMORANDUM TO: Samuel J. Collins, Director Office of Nuclear Reactor Regulation Carl J. Paperiello, Director _

Office of Nuclear Material Safety ~~ .

t and Safeguards l William J. Olmstead, Associate General Counsel for Licensing and Regulation, Office of the General Counsel .

Denwood F. Ross, Director Office of Analysis and Evaluation of Operational Data James Lieberman, Director Office of Enforcement Richard L. Bangart, Director Office of State Programs

• Jesse L. Funches Chief Financial Officer Anthony J. Galante Chief Information Officer David L. Meyer, Chief Rules Review and Directives Branch Division of Freedom of Information and Publications Services Office of Administration Brenda Jo. Shelton, Chief Information and Records Management Branch Office of Information Resources Management FROM: Ashok C. Thadani, Acting Director l h"ME Office of Nuclear Regulatory Research

SUBJECT:

PROPOSED RULE - FINANCIAL PROTECTION REQUIREMENTS FOR I PERMANENTLY SHUTDOWN NUCLEAR POWER REACTORS, 10 CFR 50.54(W)

AND 10 CFR 140.11 l

Your concurrence is requested on the attached proposed rule. Also, the i directors of the program offices should obtain input from the Regions on this l proposed rule, if appropriate. jj (;$- 2 M 9706200297 970617 If 20 PDR ORG f#tEB NRC HLE CENTER COPY o%<

Samuel J. Collins, et al. {

Backaround: The proposed rule would specify appropriate levels of liability  ;

coverage required of licensees that meet specified reactor configurations '

during permanent shutdown. This would allow nuclear reactor licensees a i reduction in onsite and offsite liability coverage during permanent shutdown -

without resorting to the exemption process. j The following is a summary of this request.

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Title:

Proposed Rule, " Financial Protection Requirements for l Permanently Shutdown Nuclear Power Reactors"

2. Task Leader: George J. Mencinsky (415-6206)

3. Workino Group Members: Ira Dinitz and Richard Dudley, NRR '

Andrew Persinko, NMSS Stephen Lewis, OGC l

4. Steerina Group Members: No l

5. Enhanced Public Participation: No

6. Level 1 or 2 Item of Compatibility for Aareement States: N/A

7. Reauested Action: Office Concurrence on the Proposed Rule l 8. Reauested Completion Date: Twenty days after date of this memorandum ,

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9. Resources and Coordination: Estimated resou.ces to complete this i rulemaking are 1.0 FTEs. Contractor support is needed. Copies of this '

concurrence package have been forwarded to the ACRS, ACNW, and the IG l for information.

Attachments: DISTRIBUTION:

Commission Paper w/atts. Centra File PDR (gf/No cc w/ attachment: RAuluck H. Bell, IG LRiani W. Beecher, OPA CGallagher J. Larkins, ACRS & ACNW DMendiola H. Miller, Region I/0RA RDB R/F '

l L. Reyes, Region II/0RA FCostanzi I l A. Beach, Region III/0RA Working Group Members 4 l E. Merschcoff, Region IV/0RA E. Jordan, DEDE

DOCUMENT NAME: 0:\MENCINSK\PRINS\0FFICEl.PR i To reades a copy of this document, indicate in the boa: "C" = Copy without attachtnent/ enclosure "E" = Copy with attachment / enclosure "N" = No copy i

0FFICE RDB:DRA , l6 /C:RDB:DRA_ l D:DR%/ l D:RES %i l

! NAME GMencinskynip YSBahadur 6 0 0 JMl#(i691 Alhadani *

DATE (f / N' /97 (o/11 /97 &/ // /97 / /i( /97 i j OFFICIAL RECORD COPY RES FILE CODE

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i fDB: The Commissioners j

fM: L. Joseph Callan j Executive Director for Operations  ;

3!) LEI: CHANGES TO THE FINANCIAL PROTECTION REQUIREMENTS FOR PERMANENTLY i SHUTDOWN NUCLEAR POWER REACTORS, 10 CFR 50.54(w) AND 10 CFR 140.11 l

PURPOSE: [

To request Commission approval to issue a proposed rule that would amend l l

financial protection requirements for permanently shutdown (PSD) nuclear power '

reactors.

l CATEGORY:

This paper covers a major policy question requiring Commission consideration.

I BACKGROUND: l l This proposed rulemaking is consistent with an SRM dated January 28, 1997, in  !

which the Commission approved a staff recommendation in SECY-96-256 to i l implement Option 2 for making changes to the financial protection requirements in 10 CFR 50.54(w) and 10 CFR 140.11 for permanently shutdown nuclear power i reactors.  ;

DISCUSSION: I The proposed rule would specify appropriate levels of liability coverage that l would be required of licensees that meet specified reactor configurations during permanent shutdown. This would allow nuclear reactor licensees a ,

reduction in onsite and offsite liability coverage during permanent shutdown  :

without resorting to the exemption process.  ;

CONTACTS:

George Mencinsky, RES, 415-6206 ,

Stephen Lewis, OGC, 415-1684 1 Ira Dinitz, NRR, 415-1289 4

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l The Commissioners 2 COORDINATION:

The Office of the General Counsel has no legal objection to the proposed rulemaking. The Office of the Chief Financial Officer has no resource-related '

objection to this rulemaking. The Office of the Chief Information Officer concurs that there will b: n:- information technology impacts.  :

RECOMMENDATION:

That the Commission:  !

1. Approve for publication in the Federal Reaister the proposed amendments to 10 CFR Part 50.54(w) and 10 CFR 140.11 on financial protection  :

requirements for permanently shutdown nuclear power reactors  !

(Attachment 1). '

2. Mala:

a. That the proposed amendments will be published in the Federal l Reaister allowing 75 days for public comment.  ;

b. That the Chief Counsel for Advocacy of the Small Business Administration will be informed of the certification and the reasons for it, as required by the Regulatory Flexibility Act, 5 U.S.C. 605(b).

c. That a regulatory analysis has been prepared for this rulemaking l (Attachment 2).

d. That an Environmental Assessment has been prepared for this l rulemaking (Attachment 3). t

e. The appropriate Congressional committees will be informed of this action (Attachment 4).

f. That a public announcement will be issued by the Office of Public Affairs when the proposed rulemaking is filed with the Office of the Federal Register (Attachment 5).

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The Commissioners 3

g. That resources to complete and implement this rulemaking are included in the current budget.

L. Joseph Callan Executive Director for Operations Attachments: As stated (5) 1 l

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ATTACHMENT 1 l FEDERAL REG STER NOTICE

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[7590 01 P] l

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NUCLEAR REGULATORY COMMISSION [

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{ 10 CFR Part 50 and 10 CFR Part 140 RIN XXXXX l

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l Financial Protection Requirements for i Permanently Shutdown Nuclear Power Reactors .

i AGENCY: Nuclear Regulatory Comission.

i ACTION: Proposed rule, t

SUMMARY

The Nuclear Regulatory Comission (NRC) is proposing to amend its  ;

regulations to allow nuclear reactor licensees a reduction in onsite and offsite i 1

liability coverage during permanent shutdown if they meet specified reactor configurations. This amendment is being proposed to recognize the need for a j l

reduced level of insurance coverage commensurate with the risk reduction after l the appropriate spent fuel cooling period following permanent shutdown.  !

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. DATES: The coment period expires (75 days after publication). Coments received after this date will be considered if it is practical to do so. but the Comission is able to assure consideration only for comments received on or before this date.

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ADDRESSES: Send comments by mail, telegram or facsimile addressed to the Secretary. U.S. Nuclear Regulatory Comission. Washington. DC 20555-0001.

Attention: Rulemakings and Adjudications Staff. '

Hand deliver comments to: 11555 Rockville Pike. Rockville. Maryland, between 7:45 am and 4:15 pm on Federal workdays.

For information on submitting comments electronically, see the discussion under Electronic Access in the Supplementary Information Section.

Certain documents related to this rulemaking. including comments received and the environmental assessment and finding of no significant impact, may be examined at the NRC Public Document Room. 2120 L Street NW. (Lower Level).

Washington. DC. These same documents may also be viewed and downloaded electronically via the Electronic Bulletin Board established by NRC for this rulemaking as discussed under Electronic Access in the Supplementary Information

Section, l

FOR FURTHER INFORMATION CONTACT: George Mencinsky. Office of Nuclear Regulatory Research. U.S. Nuclear Regulatory Commission. Washington, DC 20555-0001, telephone: (301) 415-6206, e-mail GJM@nrc. gov.: Stephen Lewis. Office of General

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Counsel U.S. Nuclear Regulatory Commission. Washington, DC 20555-0001, l l

telephone: (301) 415-1684, e-mail SHL0nrc. gov.: Ira Dinitz Office of Nuclear Reactor Regulation. U.S. Nuclear Regulatory Commission. Washington, DC 20555-0001, telephone: (301) 415-1289. e-mail IPD10nrc. gov.

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1 SUPPLEMENTARY INFORMATION:

Background

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The current insurance coverage regulations for nuclear power reactors are l contained in 10 CFR 50.54(w) and 10 CFR 140.11. These regulations do not take ,

i into consideration the reduced risk associated with permanently shutdown plants.  !

i f Reduced insurance coverage for,such plants has been allowed through the exemption process'.

l Consideration of whether financial protection coverage should be reduced t

for permanently shutdown plants must take into account the preservation of the  !

solvency of the organization responsible for maintaining and decommissioning these facilities in the unlikely event of a nuclear incident. In addition.  ;

timely payment for valid damage claims by members of the public and minimization of the likelihood that Federal Government indemnity would be called upon for satisfaction of claims for damages would have to be considered.

i The regulations in 10 CFR 140.11 require that the licensees of facilities designed to produce substantial amounts of electricity, a rated capacity of 100.000 kWe or more, must have and maintain a primary insurance coverage of $200 -

l million from private sources to protect against offsite liability. In addition.

licensees must maintain secondary financial protection in the form of private f liability insurance available under an industry retrospective rating plan. The l current maximum obligation for secondary financial protection for a licensee in this plan is $75.5 million with respect to any nuclear incident. Thus, the total l

l financial protection for offsite liability for any incident would be the primary 7 layer of $200 million, plus the secondary layer of $75.5 million multiplied by l

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the number of licensed power reactors with a rated capacity of 100.000 kWe or higher.

Under 10 CFR 50.5'(w).

4 power reactor licensees must obtain insurance coverage from private sources to provide protection against onsite damage in the event of an accident. These monies would allow the licensee to stabilize and decontaminate the reactor and reactor station site in the event of an accident.

The minimum amount of insurance coverage is the lesser of $1.06 billion or the maximum amount of insurance generally available from private sources.

The proposed rule is part of the NRC effort to eliminate unnecessary regulatory burdens for power reactor facilities that are permanently shutdown an1 in the process of decommissioning. This would complement other. amendments for l decommissioning, such as the final rule that was publish- in the Federal l

l Register (61 FR 39278) on July 29. 1996, which clarifieo ~ procedures leading to permanent shutdown and eventually. to the termination of an operating license for nuclear power reactors.

This proposed rule also addresses a petition submitted by the North Carolina Public Staff Utilities Commission. The petition. PRM-50-57. requested reduction or, preferably, elimination of the $1.06 billion of insurance for onsite reactor stabilization and accident decontamination that is required by 10 ,

CFR 50.54(w) when all nuclear fuel has been removed from the site. The petitioner also requested that the offsite primary and secondary liability coverages required under 10 CFR 140.11(a)(4) be reduced or, preferably, eliminated for shutdown reactors when no nuclear fuel is on the reactor site.

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Discussion Seve'ral different configurations for permanently shutdown reactors are being established that encompass anticipated spent fuel characteristics and storage modes during the period between permanent shutdown and termination of the license. They are as follows:

Reactor Confiouration 1: Reactor is defueled, permanently shutdown, and spent fuel in the spent fuel pool is susceptible to a zircaloy cladding fire if the spent fuel pool is drained accidentally. This configuration encompasses the period from immediately after the core is offloaded to just before the decay heat of the hottest assemblies is low enough that no rapid zircaloy oxidation will take place and the fuel cladding will remain intact, with no gap release if water in the spent fuel pool is lost.

l Reactor Confiouration 2: Reactor is defueled. permanently shutdown, and

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spent fuel is in the spent fuel pool but is not susceptible to a zircaloy ing fire or gap release caused by an incipient fuel cladding failure in the event the spent fuel pool is drained accidentally. In this configuration, the spent fuel can be stored long-term in the spent fuel pool without the possibility of initiating a zircaloy fire or significant fuel cladding failure. In addition.

l the site may contain a radioactive inventory of liquid radwaste, activated reactor components, and contaminated structural materials. The radioactive

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inventory during this configuration may change depending on the licensee *s I proposed shutdown activities and schedule.

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l Reactor Confiouration 3: Reactor is permanently shutdown and no spent fuel  !

l 1s in the reactor or the spent fuel pool. All spent fuel has been removed to an l

offsite or Onsite dry storage independent spent fuel storage installation (ISFSI) or to a DOE high-level repository. The remaining radioactive inventory depends

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on the decommissioning status and may include liquid radwaste, activated reactor '

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components, and contaminated structural materials.

Reactor Confiauration 4: Same as reactor configuratio - 3. except the reactor site has no significant mobile sources of radioactivity such as contaminated liquids (less than 1000 gallons).

There are potential onsite and offsite radiological consequences that could be associated with the onsite storage of the spent fuel in the spent fuel pool  ;

for some time after permanent shutdown. In Reactor Configuration 1. in the event of a complete loss of spent fuel pool coolant inventory such as from a beyond design basis earthquake scenario, there is a potential for overheating the fuel by decay heat. This sequence could result in a zircafoy cladding fire that may i have significant onsite and offsite consequences.

To prevent fuel rod cladding failure leading to a zircaloy cladding fire if all spent fuel pool water is lost. the rod cladding temperature must not exceed 565'C . The rod cladding temperature is an important factor that must be l considered in modifying the financial protection requirements for permanently shutdown reactors.

For Reactor Configuration 2. the spent fuel has decay heat sufficiently low that the cladding will remain intact even if all spent fuel pool water is lost.

1 However, if there are significant sources of radioactive material stored onsite, ,

i it would be appropriate to maintain an adequate level of onsite insurance

coverage. Even though the offsite consequences are negligible in Reactor Configuration 2 , because the spent fuel pool is operational and an inventory of radioactive materials exists onsite, an appropriate level of offsite financial protection is required to account for the potential for significant judgments or settlements from litigation that might be instituted and to protect the Federal Government from indemnity claims. ~~

For Reactor Configuration 3, when spent fuel is no longer stored in the spent fuel pool, the potential for a radiological incident is primarily in mobile sources of radioactivity onsite at permanently shutdown nuclear reactors. The offsite cleanup costs were found to be negligible for Reactor Configuration 3, but as was noted in Reactor Configuration 2. an appropriate level of offsite financial protection is still required to account for the potential for significant judgments or settlements from litigation that might be instituted and also to protect the Federal Government from indemnity claims. Because the level of risk has decreased from Reactor Configuration 2 by having no spent fuel in the spent fuel pool, the level of offsite financial protection required is being reduced by taking into account only the mobile radioactive inventory onsite.

For Reactor Configuration 4. with no significant amount of mobile sources of radioactivity such as contaminated liquids onsite, there is no need to maintain the same level of insurance coverage for onsite or offsite financial pretecticn as in Reactor Configuration 3. The basis for the transition from Reactor Configuration 3 to Reactor Configuration 4 is the point at which there is less than 1000 gallons of liquid radwaste stored onsite. A limiting value of 1000 gallons has been considered because it constitutes approximately a factor of 500 reduction in volume from the large volume tank used as the basis for the Reactor Configuration 3 limiting event.

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In Reactor Configuration 4 if the licensee has cleaned the site to  !

unrestricted release levels and is awaiting a confirmatory survey for terminating the license, the necessary level of onsite insurance coverage at this stage would be less than when 1000 gallons of liquid radwaste were stored onsite. Under these circumstances, the onsite coverage could be further reduced or eliminated to account for negligible onsite consequences. However, for ditsite financial protection requirements, even though the offsite consequences are negligible, some level of public liability financial protection must be maintained as long as there remains in effect a nuclear reactor license issued pursuant to 10 CFR Part 50 under the authority of Section 103 or 104 of the Atomic Energy Act (42 U.S.C. l 2133, 2134), Section 170 of that Act (42 U.S.C. 2210, commonly referred to as the

" Price-Anderson Act").

Proposed Regulatory Action The proposed amendments would adjust the onsite insurance coverage l requirements and the offsite financial protection requirements for permanently l shutdown reactors based on limiting the spent fuel cladding temperatures for  ;

accidents involving loss of spent fuel pool water, the possibility of onsite dry j storage of spent fuel, and the amount of onsite radioactive inventory such as liquid radwaste in post shutdown modes. The insurance amounts are based on the 1

estimated cost of recovery from limiting hypothetical events for specific reactor configurations.

J The proposed amendments would also address " rated capacity" in 10 CFR 140.11 as used in Section 170a of the Atomic Energy Act to indicate that a l permanently shutdown nuclear reactor has a " rated capacity" of zero.

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l The proposed financial protection requirements are as follows.

Reactor Confiauration 1 - Fuel in scent fuel 0001 not sufficiently cool.

Requirements for onsite insurance coverage and offsite financial protection remain as presently specified in 10 CFR 50.54(w) and 10 CFR 140.11.

respectively.

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Reactor Conficuration 2 - Fuel could tolerate a comolete loss of water in the soent fuel cool.

Onsite insurance coverage requirements is $50 million. The amount of

$50 million is to recover from a postulated accident in the spent fuel pool.

Offsite financial protection requirement is $100 million, based on the potential for significant judgments or settlements resulting from litigation despite negligible offsite consequences.

l Reactor Confiouration 3 - No fuel in soent fuel D001. risk deoendent on radioactive inventory at olant site in decommissionina status.

- Onsite insurance coverage requirement is $50 million. The amount of $50 million is the amount estimated to recover from a postulated onsite event of a ,

rupture of a large slightly contaminated liquid storage tank.

- Offsite financial protection requirement is $50 million, based on the 1

potential for significant judgments or settlements resulting from litigation that I might still be instituted despite negligible offsite consequences; but the liability risk is considered less than in Reactor Configuration 2.

Reactor Confiauration 4 - No fuel in the scent fuel 0001 and no sionificant source of mobile radioactive material.

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- The onsite insurance coverage requirements is either $25 million or is eliminated. The amount of $25 million is based on the possibility of having to clean up onsite contamination from an accidental rupture of a less-than-1000- ,

gallon contaminated liquio std'rdge tank during shutdown activities. Elimination of onsite insurance coverage would be warranted when a licensee is awaiting a confirmatory survey for license termination.

- Offsite financial protection requirement is $25 million, based on the potential for claims arising fran asserted offsite consequences. This would minimize the possibility that Federal Government indemnification would be j i

required. As noted above, the Atomic Energy Act does not allow a 10 CFR Part 50 l l

licensee to drop this coverage entirely, only to reduce it.

Discussion This proposed rule would allow power reactor licensees to reduce their onsite insurance coverage and offsite financial protection requirements during permanent shutdown without resorting to the exemption process. The level of financial protection would be determined for permanently shutdown reactors at a level that coincides with their actual configuration stage.

During Reactor Configuration 1. licensees would be required to maintain onsite insurance coverage and offsite financial protection at the levels .

currently required by 10 CFR 50.54(w) and 10 CFR 140.11, respectively. This is because the radiological consequences during this stage of permanent shutdown approximate the magnitude of a severe core damage accident.

After allowing the spent fuel to cool down to the point that the maximum spent fuel cladding temperature will not exceed 565 C in the event of a loss of i

r water in the spent fuel pool (Reactor Configuration 2), power reactor licensees would be allowed under 10 CFR 50.54(w) to reduce their onsite insurance coverage from $1.06 billion to $50 million. The reason for this reduction in insurance coverage is that the rapid clad oxidation event of Reactor Configuration 1 is not possible. Insurance coverage requirements for Reactor Configuration 2 are based on the tact tnat lnere is a possibility for a fuel handling accident in the spent fuel pool, and significant amounts of mobile radioactive sources remain onsite that have a potential for release during this period. The $50 million coverage would be adequate to clean up the site in the event of a fuel handling accident, an accidental release of cooling water from the spent fuel pool, or a rupture of a large slightly contaminated liquid storage tank.

The proposed insurance coverage requirement for Reactor Configuration 2

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does not take into account the reduction in radioactive decay of the spent fuel j assemblies with the passage of time during that period. The insurance coverage j requirements are based on the conservative assumption of a fuel handling accident l

shortly after the transition to Reactor Configuration 2. Adjusting insurance requirements during Reactor Configuration 2 b.ased on the decay level of the spent fuel would be burdensome from a regulatory standpoint, as opposed to selecting a bounding figure to encompass any unexpected events concerning the spent fuel pool.

For Reactor Configuration 2. the offsite financial protection requirements set forth in 10 CFR 140.11 would be reduced from $200 million to $100 million for j the primary liability coverage, and the licensee would be allowed to withdraw from the secondary liability coverage under Price-Anderson.

For Reactor Configuration 3 when all the spent fuel has been removed to an onsite or offsite dry storage ISFSI or to a DOE high-level' repository and the onsite radioactive inventory is greater than 1000 gallons, the onsite insurance coverage requirements would be $50 million under the proposed 10 CFR 50.54(w).

This amount is based on the fact that there are still mobile radioactive sources onsite that have the potential to contaminate the site. The maximum cleanu costs associated with Reactor Configuration 3 are estimated at approximately $50 million. The conservative limiting event is the rupture of a large contaminated 11gD1a storage tank that causes soil contamination and the potential to contaminate groundwater. The offsite financial protection requirements under the l

proposed Section 140.11 would be reduced from $100 million to $50 million, and the licensee would not be required to maintain secondary liability coverage under Price-Anderson under Reactor Configuration 3. With no spent fuel in the spent fuel pool, the risks of offsite contamination have been reduced considerably for  ;

N s configuration.

For Reactor Configuration 4, there ara no significant mobile sources of radioactivity. such as liquid contaminants, ensite. Thus, the potential for onsite and offsite radiological impacts is limited. In this situation, onsite 1

insurance coverage requirements either would be $25 million or would be completely eliminated under the proposed 10 CFR 50.54(w). The amount in each case would be based on information provided by the licensee and evaluated by the staff for the particular circumstances of the shutdown reactor. The 525 million  !

onsite insurance coverage would be required if liquid radwaste remained stored l onsite, usually 1000 gallons or less of radwaste. that may be susceptible to an  !

I accidental spill and the consequent need for cleanup of the contaminated site. l l

Elimination of required onsite insurance coverage would be based.on the licensee's certification to the NRC that the site has been cleaned to unrestricted release levels and is awaiting a confirmatory survey for termination of the license. In either case, the onsite and offsite consequences would be negligible.

d For Reactor Configuration 4. the required offsite financial protection would be reduced to $25 million to account for the continuing potential for claims based on asserted offsite consequences. A minimum of $25 million in 4

coverage would minimize the possibility that Federal Government indemnification 4 would be required and would be consistent with the requirements of Section 170 of the Atomic Energy Act that power reactor licensees maintain some level of public liability financial protection. The licensee would not be required to maintain secondary liability coverage under Price-Anderson for Reactor Configuration 4.

1 In addition. " rated capacity" would be addressed in 10 CFR Part 140 to indicate that permanently shutdown nuclear power plants have "zero" rated capacity. Once the reactor entered Reactor Configuration 2. it would no longer be subject to the requirements to maintain primary financial protection in the l 4

" maximum amount available at reasonable cost and on reasonable terms from private

sources" or to participate in a secondary financial protection public liability system under Section 170 of the Atomic Energy Act. The Commission has already j approved in response to site specific requests these adjustments in the primary and secondary public liability insurance regime, and this clarification in Part I

140, as requested by the Commission, places into the Commission's regulations a statement that a permanently shutdown nuclear power plant is no longer considered to have any " rated capacity."

! Electronic Access Comments may be submitted electronically. in either ASCII text or Wordperfect format (version 5.1 or later). by calling the NRC Electronic Bulletin Board (BBS) on FedWorld or connecting to the NRC interactive rulemaking web site.

"Ruleni6kirig Forum. " The bulletin board may be accessed using a personal computer, a modem, and one of the commonly available communications software packages. or directly via Internet. Background documents on the rulemaking are also available, as practical. for downloading 'and viewing on the bulletin board.

If using a personal computer and modem the NRC rulemaking subsystem on FedWorld can be accessed directly by dialing the toll free number (800) 303-9672.

Comunication software parameters should be set as follows: parity to none, data bits to 8, and stop bits to 1 (N,,8.1). Using ANSI or VT-100 terminal emulation. '

the NRC rulemaking subsystem can then be accessed by selecting the " Rules Menu" option from the "NRC Main Menu." Users will find the "FedWorld Online User's Guides" particularly helpful. Many NRC subsystems and data bases also have a

" Help /Information Center" option that is tailored to the particular subsystem.

The NRC subsystem on FedWorld also can be accessed by a direct dial phone number for the main FedWorld BBS. (703) 321-3339. or by using Telnet via Internet: fedworld. gov. If using (703) 321-3339 to contact FedWorld. the NRC subsystem will be accessed from the main FedWorld menu by selecting the

" Regulatory. Government Administration and State Systems." then selecting

" Regulatory Information Mall." At that point a menu will be displayed that has an option "U.S. Nuclear Regulatory Commission" that will take you to the NRC Online main menu. The NRC Online area also can be accessed directly by typing

"/go nrc" at a FedWorld command line. If you access NRC from FedWorld's main menu. you may return to FedWorld by selecting the " Return to FedWorld" option from the NRC Online Main Menu. However, if you access NRC at FedWorld by using NRC's toll-free number, you will have full access to all NRC systems, but you will not have access to the main FedWorld system.

If you contact FedWorld using Telnet. you will see the NRC area and menus, including the Rules Menu. Although you will be able to download documents and leave messages, you will not be able to write comments or upload files (comments). If you contact FedWorld using FTP all files can be accessed and downloaded but uploads are not allowed: all you will see is a list of files without descriptions (normal Gopher look). An index file listing all files within a subdirectory, with descriptions, is available. There is a 15-minute time limit for FTP access.

Although FedWorld also can be accessed through the World Wide Web, like FTP. that mode only provides access for downloading files and does not display the NRC Rules Menu.

You may also access the NRC's interactive rulemaking web site through the NRC home page (http://www.nrc. gov). This site provides the same access as the FedWorld bulletin board, including the facility to upload comments as files (any format) if your web browser supports that function.

For more information on the NRC bull.etin boards call Mr. Arthur Davis.

Systems Integration and Development Branch NRC. Washington. DC 20555-0001, telephone (301) 415-5780: e-mail AXD30nrc. gov. For information about the interactive rulemaking site, contact Ms. Carol Gallagher. (301) 415-6215: e-mail CAG@nrc. gov.

Finding of No Significant Environmental Impact: Availability The Commission has determined under the National Environmental Policy Act of 1969, as amended, and the Commission's regulations in Subpart A of 10 CFR Part 51, that this rule. if adopted, would not be a major Federal action significantly affecting the quality of the human environment, and therefore, an environmental impact statement is not required. The proposed rule change would allow licensee to seek reductions in onsite and offsite insurance coverage following permanent i

shutdown if they meet specified reactor configurations because of the reduced t

risk associated with permanently shutdown reactors.

The envirorimental assessment and finding of no significant impact on which this determination is based are available for inspection at the NRC Public Document Room. 2120 L Street NW (Lower Level). Washington. DC. Single copies of the environmental assessment and the finding of no significant impact are available from George Mencinsky. Office of Nuclear Regulatory Research U.S.

l Nuclear Regulatory Conrnission. Washington, DC 20555-0001. telephone (301) 415-  !

6206.  ;

1 Paperwork Reduction Act Statement This proposed rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Existing requirements were approved by the Office of Management and Budget, approval numbers 3150-0011 and 3150-0039.

Public Protection Notification The NRC may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

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l Regulatory Analysis The Commission has prepared a draft regulatory analysis on this proposed regulation. The analysis examines the costs and benefits of the alternatives i considered by the Commission. The draft analysis is available for inspection in the NRC Public Document Room. 2120 L Street NW. (Lower Level). Washington. DC.

Single copies of the draft analysis may be obtained from George Mencinsky. Office of Nuclear Regulatory Research. U.S. Nuclear Regulatory Commission. Washington, DC 20555-0001. telephone (301) 415-6206.

The Commission requests public comment on the draft regulatory analysis.

Comments on the draft analysis may be submitted to the NRC as indicated under the ADDRESSES heading.

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

the Commission certifies that this rule. if adopted, will not have a significant economic impact upon a substantial number of small entities. The rulemaking only  !

affects NRC power reactor licensees, which are not "small entities." )

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Backfit Analysis The backfit rule. 10 CFR 50.109. does not apply to this proposed rule because the backfit rule is limited in scope to construction and operation of nuclear reactors. This rule would only apply to reactors that have permanently ceased operations. Therefore, a backfit analysis is not required because these 4

amendments do not involve any provisions that would impose backfits as defined in 10 CFR 50,109(a)(1).

List of Subjects 10 CFR Part 50 Antitrust, Classified Information, Criminal penalties Fire protection, Intergovernmental relations, Nuclear power plants and reactors, Radiation protection, Reactor siting criteria, Reporting and recordkeeping requirements, 10 CFR Part 140 Criminal penalties, Extraordinary nuclear occurrence, Insurance, Intergovernmental relations Nuclear materials, Nuclear power plants and reactors, Reporting and recordkeeping requirements.

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 50 and 140.

PART 50--DOMESTIC LICENSING 0F PRODUCTION AND UTILIZATION FACILITIES

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

AUTHORITY: Secs. 102, 103, 104, 105, 161, 182, 183, 186, 189, 68 Stat.

1 936, 937, 938, 948, 953, 954, 955, 956, as amended, sec. 234, 83 Stat. 444, as i amended (42 U.S.C. 2132, 2133, 2134, 2135, 2201, 2232, 2233, 2236, 2239, 2282):

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secs. 201 as amerded. 202, 206. 88 Stat. 1242, as amended 1244, 1246. (42 U.S.C.

5841, 5842. 5846).

Section 50.7 also issued under Pub. L.95-601 sec. 10. 92 Stat. 2951, as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123. (42 U.S.C. 5851).

Sections 50.10 also issued under secs. 101, 185. 68 Stat. 936, 955, as amended (42 U.S.C. 2131, 2235); sec. 102. Pub. L.91-190. 83 Stat. 853 (42 U.d.C. 4332).

Sections 50.13, 50.54(dd), and 50.103 also issued under sec. 108, 68 Stat. 939, as amended (42 U.S.C. 2138). Sections 50.23, 50.35, 50.55. and 50.56 also issued under sec. 185. 68 Stat. 955 (42 U.S.C. 2235). Sections 50.33a. 50.55a and Appendix 0 also issued under sec. 102. Pub. L.91-190. 83 Stat. 853 (42 U.S.C.

4332). Sections 50.34 and 50.54 also issued under sec. 204. 88 Stat. 1245 (42 U.S.C. 5844). Sections 50.58. 50.91, and 50.92 also issued under Pub. L.97-415, 96 Stat. 2073 (42 U.S.C. 2239). 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). Appendix F also issued under sec. 187.

68 Stat. 955 (42 U.S.C. 2237).

2. In 10 CFR 50.54(w). paragraph (5) is added to read as follows:

S 50.54 Conditions of licenses.'

(w) * * * *

(5) For the specified reactor configurations during permanent shutdown.

licensees shall maintain the following insurance requirements:

(1) For Reactor Configuration 1 when the reactor is defueled. permanently shutdown, and the spent fuel cladding temperature in the spent fuel pool is 565'C 1

I or greater for a postulated loss of spent fuel pool cooling event, the insurance coverage shall be as specified in paragraph (w)(1).

(ii) For Reactor Configuration 2 when the reactor is defueled and permanently shutdown, no operating reactors are on the site, and the spent fuel cladding temperature in the spent fuel pool does not exceed 565 C for a postulated loss-of-spent-fuel-pool-cooling event, the minimudi insurance coverage limit for each reactor shall be $50 million.

(iii) For Reactor Configuration 3 when the reactor is defueled and permanently shutdown, no operating reactors are on the site. no fuel is in the spent fuel pool, and the radioactive liquid inventory onsite is 1000 gallons or greater, the minimum insurance coverage for each reactor shall be $50 million.

(iv) For Reactor Configuration 4 when the reactor is defueled and permanently shutdown, no operating reactors are on the site, no fuel is in the spent fuel pool, and the radioactive liquid inventory onsite is less than 1000 gallons, the minimum insurance coverage for each reactor shall be $25 million.

For sites awaiting license termination, no insurance coverage is required if the licensee provides certification that the site is ready for the confirmatory survey for license termination.  ;

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PART 140--FINANCIAL PROTECTION REQUIREMENTS AND INDEMNITY AGREEMENTS

1. The authority citation for Part 140 continues to read as follows:

AUTHORITY: Secs. 161, 170. 68 Stat. 948, 71 Stat. 5/6. as amended (42 U.S.C. 2201. 2210); secs. 201, as amended. 202. 88 Stat. 1242, as amended. 1244 l (42 U.S.C. 5842, 5842).

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2. In 10 CFR 140.11(a), paragraphs (5) and (6) are added to read as follows:

6 140.11 Amounts of financial orotection for certain reactors.

(a) * * * * ~~

(5) For the specified reactor configurations during permanent shutdown.

licensees shall maintain the following financial protection requirements :

(1) For Reactor Configuration I when the reactor is defueled permanently shutdown, and the spent fuel cladding temperature in the spent fuel pool is 565'C or greater for a postulated loss of spent fuel pool cooling event, the financial l protection shall be as specified in paragraphs (a)(1), (a)(2). (a)(3), and (a)(4) i of this section.

(ii) For Reactor Configuration 2 when the reactor is defueled and permanently shutdown. no operating reactors are on the site, and the spent fuel l

cladding temperature in the spent fuel pool does not exceed 565"C for a l 1

postulated loss-of-spent-fuel-pool-cooling event the required financial protection for each reactor shall be $100 million and the secondary liability I l

coverage under Price-Anderson shall not be required.  ;

(iii) For Reactor Configuration 3 when the reactor is defueled and permanently shutdown, no operating reactors are on the site, no fuel is in the spent fuel pool, and the radioactive liquid inventory onsite is 1000 galluns or greater, the required financial protection for each reactor shall be $50 million and the secondary liability coverage under Price-Anderson shall not be required.

! (iv) For Reactor Configuration 4 when the reactor is defueled and permanently shutdown, no operating reactors are on the site, no fuel is in the spent fuel pool, and the radioactive liquid inventory onsite is less than 1000

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

gallons. the required financial protection for each reactor shall be $25 million  !

and the secondary liability. coverage under Price-Anderson shall not be required.

(6) Power reactors that are defueled and permanently shutdown shall be -

classified as having zero thermal power level rated capacity.

f Dated at Rockville. Maryland, this day of . 1997.

For the Nuclear Regulatory Commission.

John C. Hoyle.

Secretary of the Commission.

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ATTACHMENT 2  :

REGULATORY ANALYSIS l

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Draft report to be provided at a later date.

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ATTACHMENT 3 i

ENVIRONMENTAL ASSESSMENT I

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i ATTACHMENT 4 CONGRESSIONAL LETTERS

p Moo g q\ UNITED STATES j

g NUCLEAR REGULATORY COMMISSION

• WASHINGTON. D.C. 20566 0001 4

4 . . . . . ,o The Honorable Dan Schaefer, Chairman Subcommittee on Energy and Power Committee on Commerce United States House of Representatives Washington, DC 20515

Dear Mr. Chairman:

The NRC has sent to the Office of the Federal Register for publication and comment the enclosed proposed amendments to the Commission's rules in 10 CFR Part 50 and 10 CFR Part 140. The amendments, if adopted, would specify levels of liability coverage that would be required of licensees that meet specified reactor configurations during permanent shutdown. This would allow nuclear reactor licensees a reduction in onsite and offsite liability coverage during permanent shutdown without resorting to the exemption process.

The proposed rule would amend 10 CFR 50.54(w) to allow nuclear reactor licensees to lower the onsite insurance requirements based on several different configurations that encompass spent fuel characteristics and storage modes following permanent shutdown. In parallel, offsite financial protection requirements as specified in 10 CFR 140.11 would also be adjusted to allow licensees to lower their primary insurance coverage and be able to withdraw from the industry rotrospective rating plan, based on satisfying the ,

requirements specified for several different configurations during permanent j shutdown. In addition, ti.e proposed offsite insurance requirements would '

continue to provide the Federal Government protection from indemnity claims even though the NRC staff considers that such events would be rare and would

have negligible offsite consequences.

l Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

Federal Register Notice L

, cc: Representative Ralph Hall '

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The Honorable Dan Schaefer, Chairman '

Subcommittee on Energy and Power Committee on Commerce United States House of Representatives i Washington, DC 20515 '

Dear Mr. Chairman:

The NRC has sent to the Office of the Federal Register for publication and

~ comment the enclosed proposed amendments to the Commission's rules in 10 CFR

" Part 50 and 10 CFR Part 140. The amendments, if adopted, would specify levels l of liability coverage that would be required of licensees that meet specified reactor configurations during permanent shutdown. This would allow nuclear reactor licensees a reduction in onsite and offsite liability coverage during permanent shutdown without resorting to the exemption process.

I The proposed rule would amend 10 CFR 50.54(w) to allow nuclear reactor licensees to lower the onsite insurance requirements based on several different configurations that encompass spent fuel characteristics and storage modes following permanent shutdown. In parallel, offsite financial protection requirements as specified in 10 CFR 140.11 would also be adjusted to allow licensees to lower their primary insurance coverage and be able to withdraw  :'

from the industry retrospective rating plan, based on satisfying the requirements specified for several different configurations during permanent shutdown. In addition, the proposed offsite insurance requirements would l

continue to provide the Federal Government protection from indemnity claims even though the NRC staff considers that such events would be rare and would have negligible offsite consequences.

Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

DISTRIBUTION:

Federal Register Notice Central File FCostanzi RDB R/F cc: Representative Ralph Hall' ED0 R/F EJordan, DEDE RAuluck LRiani CGallagher DMendiola DOCUMENT NAME: 0:\MENCINSK\ PRISS \CGLSCH.PR Ts receivi a copy of this document, Indicate in the g "C" = Copy without attachment / enclosure *E* = Copy with attachrnent/ enclosure "N* = No copy 0FFICE RDB:DRA ,_ j4$9ff:DRA o u D,tch D:RES( G ,,l D:0CA l NAME GMencinsk9:ngN5Bahadur M ' Wy$fif AThadahi' W DRathbun DATE 4 /rp /97 (a/Il/97 /6/ // /97 6//0 /97 / /97 0FFICIAL RECORD COPY pf s% up 4

goctcoq g-  % UNITED STATES j

s* NUCLEAR REGULATORY COMMISSION l

• WASHINGTON, D.C. 20555 0001 l

\...../ .

The Honorable James M. Inhofe, Chairman Subcommittee on Clean Air, Wetlands, Private Property and Nuclear Safety Committee on Environment and Public Works United States Senate Washington, DC 20510

Dear Mr. Chairman:

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The NRC has sent to the Office of the Federal Register for publication and comment the enclosed proposed amendments to the Commission's rules in 10 CFR Part 50 and 10 CFR Part 140. The amendments, if adopted, would specify levels of liability coverage that would be required of licensees that meet specified reactor configurations during permanent shutdown. This would allow nuclear reactor licensees a reduction in onsite and offsite liability coverage during permanent shutdown without resorting to the exemption process.

The proposed rule would amend 10 CFR 50.54(w) to allow nuclear reactor licensees to lower the onsite insurance requirements based on several i different configurations that encompass spent fuel characteristics and storage '

modes following permanent shutdown. In parallel, offsite financial protection requirements as specified in 10 CFR 140.11 would also be adjusted to allow licensees to lower their primary insurance coverage and be able to withdraw from the industry retrospective rating plan, based on satisfying the requirements specified for several different configurations during permanent shutdown. In addition, the proposed offsite insurance requirements would continue to provide the Federal Government protection from indemnity claims even though the NRC staff considers that such events would be rare and would have negligible offsite consequences.

Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

Federal Register Notice cc: Senator Bob Graham

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The Honorabh "mes M. Inhofe, Chairman  !

Subcommittee on Clean Air, Wetlands, Private l Property and Nuclear Safety l Committee on Environment and Public Works )

United States Senate Washington, DC 20510 l

Dear Mr. Chairman:

l The NRC has sent to the Office of. tha N<iar=1 Register for publication and '

comment the enclosed proposed amendments to the Commission's rules in 10 CFR Part 50 and 10 CFR Part 140. The amendments, if adopted, would specify levels of liability coverage that would be required of licensees that meet specified reactor configurations during permanen, iiiutuown. This would allow nuclear reactor licensees a reduction in onsite and offsite liability coverage during permanent shutdown without resorting to the exemption process.

The proposed rule would amend 10 CFR 50.54(w) to allow nuclear reactor licensees to lower the onsite insurance requirements based on several different configurations that encompass spent fuel characteristics and storage modes following par =aner,t shutdown. In parallel, offsite financial protection requirements as specified in 10 CFR 140.11 would also be adjusted to allow licensees to lower their primary insurance coverage and be able to withdraw from the industry retrospective rating plan, based on satisfying the requirements specified for several different configurations during permanent shutdown. In addition, the proposed offsite insurance requirements would continue to provide the Federal Government protection from indemnity claims even though the NRC staff considers that such events would be rare and would have negligible offsite consequences.

Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

DISTRIBUTION: l Federal Register Notice Central File FCostanzi l RDB R/F cc: Senator Bob Graham EDO R/F EJordan, DEDE RAuluck LRiani CGallagher DMendiol a

)

DOCUMENT NAME: 0:\MENCINSK\PRINS\CGLINH.PR is receiva e copy of this document indicate in the box: "C" = Copy without attachment / enclosure "E" = Copy with attachment / enclosure 'N' = No copy l OFFICE RDB:DRA ,, l ,y;$9B:DRA , m D:D%Jgs l D:RES &l D:0CA l NAME GMenciosfy:ng ' SSahadur M ' JMttr M ' ' AThadani 6 DRathbun i DATE g/d'/97 to / O /97 /J // /97 4 / H /97 / /97 l OFFICIAL RECDIID COPY l 1

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l ATTACHMENT 5 PUBLIC ANNOUNCEMENT i

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.i Draft report to be provided at a later date.

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U The Commissioners 3

g. That resources to complete and implement this rulemaking are included in the current budget.

L. Joseph Callan Executive Director for Operations Attachments: As stated (5)

DISTRIBUTION:

Central f/c RDB r/f EDO r/f EJordan. OE00  !

AThadani FCostanzi i LRiani CGallagher DMendiola ASummercur I l

RECORD NOTE: A draft copy of the proposed rule was sent to 0IG for information on .

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l DOU.NENT NAME: 0:\MENCINSK\PRINS\COMM2.PR i To r:cilve a copy of this document, indicate in the box: "C" = Copy without attachment / enclosure *E" = Copy with attachment / enclosure 1

'_N* = No copy ,,lj OFFICE DRA:RDB /m F, $ A:RDB , D:SF l D:NRR 1 D:NMSS l

NAME GMencinskf: fig v5Bahadur N 7 dblurlhy SCollins CJPaperiello DATE 4 / /0 /97 b/ ll /97 f 6/ // /97 / /97 / /97 0FFICE OGC D:AE00 D:0E D:0SP CF0 CIO l NAME WJ0lmstead Dross JLieberman RBangart JFunches AJGalante DATE / /97 / /97 / /97 / /97 / /97 / /97 1 0FFICE ADM IRM D:RES ED0 l l NAME DMeyer BJShelton AThadani LJCallan DATE / /97 / /97 / /97 / /97 ,

OFFICIA_ RECORD COPY  :

(RES File Code) RES i (If more than one File Code) RES I

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WSSSYMMSSSMMMMMMS i #" "%

RULEMAKING ISSUE (NEGATIVE CONSENT)

December 17, 1996 --

SECY-96-256 FOR: The Commissioners FROM: James M. Taylor Executive Director for Operations

SUBJECT:

CHANGES TO THE FINANCIAL PROTECTION REQUIREMENTS FOR PERMANENTLY SHUTDOWN NUCLEAR POWER REACTORS, 10 CFR 50.54(W) AND 10.CFR 140.11 PURPOSE:

To inform the Commission of the staff's rulemaking plan for amending financial protection requirements for permanently shutdown (PSD) nuclear power reactors.

BACKGROUND:

In an SRM dated July 13, 1993, the Commission approved staff recommendations j to: (1) allow licensees that have permanently shut down to withdraw from the i secondary financial protection layer under the Price Anderson Act (section 170 of the Atomic Energy Act, as amended), (2) reduce the required primary l financial protection coverage under Price Anderson to $100 million after an i appropriate spent fuel cooling period, and (3) proceed with rulemaking to determine appropriate further reductions in the level of insurance coverage after the appropriate spent fuel cooling period. The Commission also requested that the staff determine whether there is a need for financial protection for ISFSIs and requested clarification of the term " rated capacity," as applied to permanently shutdown reactors. This rulemaking plan responds to item 3 in the SRM for PSD plants. The staff will address the fina,cial protection requirements for ISFSIs after current efforts dealing witt technical and licensing issues for ISFSIs are resolved in the areas of safeguard requirements, emergency planning, and potential fuel storage handling activities. The results of these efforts will provide the staff with  !

information for evaluating the need for financial protection requirements. '

Items 1 and 2 of the SRM were addressed previously in a memorandum dated August 4, 1993 from the ED0 to the Commission.

CONTACT:

George Mencinsky, RES/DRA NOTE: TO BE MADE PUBLICLY AVAILABLE 415-6206 . WHEN THE FINAL SRM IS MADE AVAILABLE l

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1 The Commissioners ~

The staff has determined that there is a need to modify existing regulations for insurance coverage and financial protection requirements in 10 CFR 50.54(w) and 10 CFR 140.11 because of reduced risk associated with permanentlyshutdown reactors. Th'e staff proposes to allow licensees to reduce the level of liability coverage based on several different reactor 1 configurations that are anticipated following permanent shutdown. I DISCUSSION: J The staff has made an evaluation of the radiological and economic consequences that may occur during various post snutdown~ scenarios. The staff recommends specified levels of liability coverage that should be required of the )

licensees that meet specified reacter configurations during permanent ,

shutdown. This would allow nuclear reactor licensees a reduction in onsite and offsite liability coverage during permanent shutdown without resorting to the exemption process. l Specifically, the staff plans to amend 10 CFR 50.54(w) to allow nuclear j reactor licensees to lower the onsite insurance requirements based on several different configurations that encompass spent fuel characteristics and storage modes following permanent shutdown. In parallel, offsite financial protection requirements as specified in 10 CFR 140.11 would also be adjusted to allow licensees to lower their primary insurance coverage and be able to withdraw from the industry retrospective rating plan based on satisfying the l requirements as specified for the several different configurations during permanent shutdown. In addition, the proposed offsite insurance requirements would continue to provide protection to the Federal government from indemnity claims even though the NRC staff considers that such events would be rare and ,

would have negligible offsite consequences. 1 COORDINATION:

The Office of the General Counsel has no legal objection to the Rulemaking Plan.

RECOMMENDATION:

I intend to proceed with the development of the rule as described in the attached Rulemaking Plan unless otherwise directed by the Commission within 10 days from the date of this paper.

/_

es .T lor ecutive irector for Operations i l

Attachment:

As stated SECY NOTE: In the absence of instructions to the I DISTRIBUTION:

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" anua

" ###7', a e ssion, h n g a m e Comissioners OCA OGC nsent, assents to the action proposed in this ACRS Paper.

OCAA EDO OIG SECY OPA

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RULEMAKING PLAN AMENDING FINANCIAL PROTECTION REQUIREMENTS FOR PERMANENTLY SHUTDOWN NUCLEAR POWER REACTORS AND INDEPENDENT SPENT FUEL STORAGE FACILITIES Lead Office: Office of Nuclear Regulatory Research Staff

Contact:

George Mencinsky, RDB Concurrences: d['*> Ol-%d" 'L[d '

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D. Morrison, RES Date WW~ l'lt 7}rl CL)

F. Miraglia, NRR '

'Date I t k w $ lb w l b>6x m m V2f4psl. '

J. Lieberman, Of' Da(e bk W *~ />lSk b y 5, %

W. Olmstead, 0GC / / Date k u w w e >~- ///4/4/ tw A. AOk l

C. Paperiello, NMSS / / Dats

• Approval: / 7/

J. lor,/00 / Da'te l

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RULEMAKING PLAN FOR AMENDING FINANCIAL PROTECTION REQUIREMENTS FOR PERMANENTLY SHUTDOWN NUCLEAR POWER REACTORS 1

ISSUES TO BE RESOLVED l The current insurance coverage regulations for nuclear power reactors do not take into consideration the reduced risk associated with permanently shutdown (PSD) plants. -Cadaced insurance coverage for these plants has been allowed through the exemption process.

Consideration of whether financial protection coverage should be reduced for l PSD plants needs to take into account the preservation of the solvency of the l organization responsible for maintaining and decommissioning these facilities in the unlikely event of a nuclear incident. Timely payment Jor valid damage claims by members of the public and minimization of the likelihood that Federal government indemnity would be called upon for satisfaction of claims l for damages would have to be considered. '

In addition, the existing requirements for offsite financial protection apply to power reactors with a specified " rated capacity" in terms of electrical  ;

1 kilowatts. The use of the term " rated capacity" needs to be modified to 1 address indemnity for permanently shutdown plants.

l CURRENT RULE RE0VIREMENTS I Licensees of facilities designed to produce substantial amounts of electricity, a rated capacity of 100,000 kWe or more, must have and maintain, according to 10 CFR 140.11, a primary insurance coverage of $200 million from

private sources to protect against offsite liability. In addition, licensees 4

must maintain secondary financial protection in the form of private liability insurance available under an industry retrospective rating plan. The current maximum obligation for secondary financial protection for a licensee in this 3

plan is $75.5 million with respect to any nuclear incident. Thus, the total financial protection for offsite liability for any incident would be the primary layer of $200 million, plus the secondary layer of $75.5 million multiplied by the number of licensed power reactors with a rated capacity of

. 100,000 kWe or higher.

Under 10 CFR 50.54(w), power reactor licensees must obtain insurance coverage from private sources to provide protection against onsite damage in the event of an accident. These monies would allow the licensee to stabilize and decontaminate the reactor and reactor station site in the event of an accident. The minimum amount of insurance coverage is the lesser of either

$1.06 billion or whatever amount of insurance is generally available from private sources.

BACKGROUND

This rulemaking plan is part of a broad effort to eliminate unnecessary regulatory burdens for power reactor facilities that are permanently shutdown

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and in the process of decommissioning. This plan complements other amendments

for decommissioning, such as the final rule that was published in the Federal Register (61 FR 39278) on July 29, 1996, that clarified the procedures that lead to permanent shutdown and eventually to the termination of an operating license for nuclear power reactors. Under that rule, permanent shutdown would become a codified status of a reactor when a licensee has certified that. all fuel has been removed from the reactor core and that it has permanently ceased power operations.

In an SRM' dated July 13, 1993, the Commission approved staff recommendations to: (1) allow licensees that have permanently shut down to withdraw from the seEondary financial protection layer under the Price Anderson Act (section 170 of the Atomic Energy Act, as amended), (2) reduce the required primary financial protection coverage under Price Anderson to $100 million after an appropriate spent fuel cooling period, and (3) proceed with rulemaking to determine appropriate further reductions in the level of insurance coverage after the appropriate spent fuel cooling period. The Commission also requested that the staff determine whether there is a need for financial protection for ISFSIs and requested clarification of the term " rated capacity," as applied to permanently shutdown reactors.

This rulemaking plan responds to above item 3 in the SRM for PSD plants. The staff will address the financial protection requirements for ISFSIs after current efforts dealing with technical and licensing issues for ISFSIs are resolved in the areas of safeguard requirements, emergency planning, and potential fuel storage handling activities. The results of these efforts will provide the staff with information for evaluating the need for financial protection requirements. Items 1 and 2 of the SRM were addressed previously in a memorandum dated August 4, 1993, from the ED0 to the Commission. This 4

rulemaking will also address a petition submitted by the North Carolina Public Staff Utilities Commission. The petition, PRM-50-57, requested reduction or, preferably, elimination of the $1.06 billion of insurance for onsite reactor stabilization and accident decontamination that is required by 10 CFR 50.54(w) in instances when all nuclear fuel has been removed from the site. The petitioner also requested that the requirement for offsite primary and secondary liability coverages required under 10 CFR 140.11(a)(4) be reduced or, preferably, eliminated for shutdown reactors when no nuclear fuel is on the reactor site.

DISCUSSION For the purpose of discussion, several different configurations for permanently shutdown reactors have been established that encompass anticipated spent fuel characteristics and storage modes following permanent shutdown.

They are as follows:

Reactor Confiauration 1: Reactor is defueled, permanently shutdown, and spent fuel in the spent fuel pool is susceptible to a zircaloy cladding fire if the spent fuel pool is drained accidentally. This configuration

'SRM dated July 13,1993, "SECY-93-127, Financial Protection Required of )

Licensees of Large Nuclear Power Plants During Decommissioning."

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encompasses the period commencing immediately after the offload of the core to just prior to when the decay 'iat of the hottest assemblies is low enough that no rapid zircaloy oxiddion will take place and the fuel cladding will remain intact, such as no gap release, in the event of loss of water in the spent fuel pool. -

Reactor Confiauration 2: Reactor is defueled, permanently shutdown, and spent fuel is in the spent fuel pool but is not susceptible to a zircaloy cladding fire or gap release caused by an incipient fuel l ~~ cladding failure in the event the spent fuel pool is drained accidentally. In this configuration, the spent fuel can be stored on a long-term basis in the spent fuel pool without the possibility of initiating a zircaloy fire or significant fuel cladding failure. In  ;

addition, the site may contain a radioactive inventory of liquid j radwaste, activated reactor components, and contaminated structural 4 material s. The radioactive inventory during this configuration may change depending on the licensee's proposed shutdown activities and '

schedule.

Reactor Confiauration 3: Reactor is permanently shutdown and no spent  !

fuel is in the reactor or the spent fuel pool. All spent fuel has been removed to an offsite or onsite dry storage ISFSI or to a DOE high-level repository. The remaining radioactive inventory depends on the decommissioning status and will include liquid radwaste, activated reactor components, and contaminated structural materials.

Reactor Confiauration 4: Same as reactor configuration 3, except the reactor site has no significant amount of mobile sources of ,

radioactivity such as contaminated liquids (less than 1000 gallons).

There are potential onsite and offsite radiological consequences that could be associated with the onsite storage of the spent fuel in the spent fuel pool for some time after permanent shutdown. In reactor configuration 1, in the event of a complete loss of spent fuel pool coolant inventory such as from a  ;

beyond design basis earthquake scenario, there is a potential for overheating of the fuel by decay heat. This sequence could result in a zircaloy cladding fire that could have significant onsite and offsite consequences. The probability of a zircaloy cladding fire, resulting from the loss4 of water frca the spent fuel pool, is estimated to have a mean value of 2x10 ,per reactor year The information in NUREG-1353, " Regulatory Analysis for the Resolution of Generic Issue 82, Beyond Design Basis Accidents in Spent Fuel Pools,"

indicated that a potential hazard associated with spent fuel storage would remain for some time after a reactor has been shutdown. Once the requisite cooling period for the spent fuel had elapsed after reactor shutdown, the 2

NUREG-1353, " Regulatory Analysis for the Resolution of Generic Issue 82,

< Beyond Design Basis Accidents in Spent Fuel Pools," April 1989.

potential zircaloy cladding fire sequence would no longer be a concern since air would cool the spent fuel sufficiently to avoid zircaloy cladding combustion.

A recent analysis by Brookhaven National Laboratory (BNL) estimates that, in order to prevent fuel rod cladding failure leading to a zircaloy cladding fire given the loss 8of all spent fuel pool water, the rod cladding temperature must not exceed 565 C. This cladding temperature would be reached for reactor configuration 1 after a decay period of approximately 7 months for BWRs and 17 months for PWRs. These time estimates were based on a set of conservative assumptions such as high density fuel racking geometries, high burnup fuel, 60,000 MWD /MTV for PWRs and 40 000 MWD /MTV for BWRs, and postulated incipient spent fuel clad failure at 565 C.d The time periods for spent fuel cooldown and rod cladding temperature are important factors in the consideration of modifying the financial protection requirements for permanently shutdown reactors. For reactor configuration 1, the possible radiological consequences as analyzed by BNL could, in certain cases, approach thosp of a severe core damage accident which might occur during plant operation For reactor configuration 2, the spent fuel has decay heat sufficiently low that the cladding will remain intact even if all spent fuel pool water is lost. The postulated accident scenario for this configuration is assumed to be a single assembly dropped in the spent fuel pool, resulting in damage to 100 percent of the rods in the affected assembly. The onsite cleanup costs are estimated from $9 to 24 million, a d there are negligible offsite costs associated with this postulated event.p,4.5 This would be the controlling accident scenario in reactor configuration 2 if the radioactive inventory onsite was negligible. It may be plausible that the licensee would take this course of action during reactor configuration 2 to reduce the radioactive inventory onsite in order to take advantage of offsite disposal costs early in the decommissioning process. However, if there are significant sources of radioactive material stored onsite, then it would be appropriate to have a l higher level of onsite insurance coverage than the estimated $9 to $24 i million. Previous analyses have shown that radiological and nonradiological l safety impacts from normal decommissioning operations and potential accidents '

are extremely small .6'7 Taking the conservative approach, a scenario of the l

3 NUREG/CR-6451, "A Safety and Regulatory Assessment of Generic BWR and PWR Permanently Shutdown Nuclear Power Plants," U.S. Nuclear Regulatory Commission Report by Brookhaven National Laboratory (to be published in 1996).

'BNL Technical Letter Report dated 12/29/95, " Task 2 - Permanent ShutJown Program: Transmittal of Onsite Property Damage Insurance Recommendations."

5 BNL Technical Letter Report dated 1/22/96, " Task 2 - Permar.ent Shutdown Program: Transmittal of Offsite Liability Insurance Recommendations."

6 NUGEG/CR-0130, " Technology, Safety and Costs of Decommissioning a Reference Pressurized Water Reactor Power Station," June 1978.

rupture of a large liquid radwaste storage tank, discussed as part of reactor configuration 3, was selected as conceivable also under reactor configuration

2. That postulated event was estimated to result in an onsite waste cleanup cost of approximately $50 million with negligible radiological consequences offsite. In economic terms, it surpassed the cleanup costs associated with a fuel handling accident discussed above and it has been taken into account in determining the upper bound level of onsite insurance coverage required in reactor configuration 2.

Even though the offsite consequences are negligible in reactor configuration 2 for the events cited above, because the spent fuel pool is operational and an inventory of radioactive materials exists onsite an appropriate level of offsite financial protection is required to account for the potential for significant judgements or settlements from litigation that might be instituted and to protect the Federal government from indemnity claims.

For reactor configuration 3, when spent fuel is no longer stored in the spent fuel pool, the potential for a radiological incident is primarily focused on mobile sources of radioactivity onsite at permanently shutdown nuclear reactors. For estimating accident cleanup costs, the limiting event considered is the rupture of a borated water storage tank, releasing 450,000 gallons of slightly radioactive water that causes soil contamination and potential contamination of the groundwater table. The onsite cleanup costs are estimated at approximately $50 million.' Although not all reactor sites have a borated water storage tank, the rupture of other large tanks of slightly contaminated water could result in similar consequences.

The offsite cleanup costs were found to be negligible 5 for reactor configuration 3 but as was noted in reactor configuration 2, an appropriate level of offsite financial protection is still required to account for the potential for significant judgements or settlements from litigation that might be instituted and also to protect the Federal government from indemnity claims. Because the level of risk has decreased from reactor configuration 2 by having no spent fuel in the spent fuel pool, the level of offsite financial protection required can be reduced by taking only into account the mobile radioactive inventory onsite.

For reactor configuration 4, it is postulated that, with no significant amount of mobile sources of radioactivity such as contaminated liquids onsite, and a fire protection program in effect, there is no event that would require maintaining the same level of insurance coverage for onsite or offsite i financial protection as in reactor configuration 3. The basis for the transition from reactor configuration 3 to reactor configuration 4 is assumed to be the point at which there is less than 1000 gallons of liquid radwaste stored onsite. This number was chosen because it constitutes approximately a factor of 500 reduction in volume from the large volume tank used as the basis ,

for the reactor configuration 3 limiting event. The postulated rupture of  !

this much smaller tank is estimated to have at least 2 orders of magnitude 7

NUREG/CR-0672, " Technology, Safety and Costs of Decommissioning a Reference Boiling Water Reactor Power Station," June 1980.

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less impact than the rupture of the large tank,-such that onsite cleanup costs would not necessitate a level of insurance coverage as specified in reactor configuration 3. Therefore, the coverage would be reduced further to account for the potential of onsite cleanup of an accidental rupture of a less than 1000 gallon tank during this period.

During reactor configuration 4, it may also be assumed that the licensee has ,

cleaned the site to unrestricted release levels and is awaiting a confirmatory '

survey for termination of license. The level of onsite insurance coverage at this stage would be less than the scenario for the 1000 gallons of liquid radwaste stored onsite. Under these circumstances the onsite coverage could be further reduced to account for negligible onsite and offsite consequences.

However, for offsite financial protection requirements, even though the offsite consequences are negligible, adequate coverage would still be required because of the litigious nature of our society.

PRELIMINARY REGULATORY ANALYSIS 1

Ootions  !

Based on the above, the following options were considered for power reactors ,

that were permanently shutdown: )1 Issue A. Financial Protection Requirements For Reactor Configurations 1, 2, 1 3, & 4

1. No action. Maintain onsite insurance coverage requirements and .

offsite financial protection requirements for permanently shutdown j nuclear reactors as prescribed by 10 CFR 50.54(w) and 10 CFR l 140.11. Provide relief from regulatory requirements on a case-by-  !

case basis through the exemption process.

2. Adjust onsite insurance coverage requirements and offsite I financial protection requirements on a generic basis for  !

pern;anently shutdown reactors based on limiting the spent fuel j cladding temperatures for accidents involving loss of spent fuel <

pool water, the possibility of onsite dry storage of spent fuel, l and the amount of liquid radwaste stored onsite in post shutdown ,

modes. The insurance coverage requirements are based on the J estimated cost of recovery from limiting hypothetical events for <

reactor configurations described below and due to intangible l elements related to the assumption that claims by members of the  !

public might be filed for offsite consequences from nuclear energy I hazards. TMI-2 has shown that significant amounts can be involved i (settlements in the THI case) even though the offsite consequences  !

were negligible. i l

Clarify the definition as stated in section 170(a) of the Atomic Energy Act of " facilities designed for producing substantial j amounts of electricity and having a rated capacity of 100,000 )

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electrical kilowatts or more" in 10 CFR 50.2 and 10 CFR 140.3 to indicate that a permanently shutdown nuclear reactor has a " rated capacity" of zero.  !

The following financial protection requirement would be specified:

Reactor Confiauration 1 - fuel in spent fuel cool not sufficient 1v Cool,

- Onsite insurance coverage requirements and offsite financial protection requirements remain as presently specified in 10 CFR 50.54(w) and 10 CFR 140.11, respectively.

Reactor Confiauration 2 - fuel could tolerate a comolete loss of water in the spent fuel pool.

- Onsite insurance coverage requirements - $25/$50 million.

The amount of $25 million based on the estimated amount to recover from a postulated fuel handling accident in the spent fuel pool and an onsite radioactive liquid inventory of less than 1000 gallons. The amount of $50 million to account for a rupture of a large slightly contaminated radioactive waste storage tank.

- Offsite financial protection reauirements - $100 million based on the potential for significaf judgements or settlements resulting from litigation, despite negligible offsite consequences.

Reactor Confiauration 3 - no fuel in spent fuel nool. risk dependent on radioactive inventory at plant site in decommissionino status.

- Onsite insurance coverage requirements - $50/$25 million.

The amount of $50 million based on the estimated amount to recover from a postulated onsite event of a rupture of a large slightly contaminated radioactive waste storage tank.

If the onsite radioactive liquid inventory is less than 1000 gallons, the insurance amount will be $25 million. *

- Offsite financial protection requirements - $50 million based on the potential for significant judgements or settlements resulting from litigation that might still be instituted, but where the liability risk is considered less than in reactor configuration 2, despite negligible offsite consequences.

Reactor Confiauration 4 - no fuel in the spent fuel pool and no sianificant source of mobile radioactive material.

- Onsite insurance coverage requirements - $25/$0 million.

The amount of $25 million based on the possibility of having to cleanup onsite contamination from an accidental rupture '

of a less than 1000 gallon radwaste tank during shutdown activities. Elimination of onsite insurance coverage when  !

licensee is awaiting confirmatory survey for license termination.

- Offsite financial protection requirements - $25 million I

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based on the potential for claims based upon asserted offsite consequences. This would minimize the possibility that the Federal government indemnification would be required. It should also be noted that the Atomic Energy Act does not allow a 10 CFR Part 50 licensee to entirely drop this coverage, only to reduce it.

3. Same as option 2 but would allow licensees to reduce further their offsite financial protection requirements during permanent shutdown without resorting to the exemption process. This option

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sets a de minimis level of liability insurance for offsite -

coverage on the order of $5-10 million for reactor configurations 2, 3, and 4, consistent with the analyses that offsite radiological consequences are negligible and it would provide the Federal government with a minimal threshold of protection to financial risk from public indemnity claims. This alternative essentially endorses eliminating offsite financial protection requirements for permanently shutdown reactors in reactor

, configurations 2, 3, and 4, but maintains some required coverage to satisfy the legal requirements of the Price Anderson Act, which requires some level of public liability protection in effect.

4 Decision Criteria Financial Protection Requirements for Permanently Shutdown Reactors (Reactor Configurations 1, 2, 3, and 4)

Ootion 1: The no action option retains the same financial protection l requirements regardless of whether the power reactor is permanently shutdown or operating. Power reactor licensees would continue to be required to maintain coverage at the prescribed levels specified in the regulations during permanent shutdown. For each power reactor, that would amount to $1.06 billion of onsite insurance coverage and primary offsite liability coverage of  !

$200 million plus $75.5 million in secondary financial liability. In certain permanently shutdown scenarios, the above amount of financial coverage required of licensees would be more than necessary and costly based on analyses performed g3 r the staff and the level of perceived risk during pereanent shutdown. Power reactor licensees would have the opportunity to ,

request an exemption from the above requirements. A number of licensees have '

used this process to obtain regulatory relief (Table 1). While exemptions could continue to provide regulatory relief, Option 1 would do so with far d

less regulatory certainty than Option 2 discussed below. Further, it poses a potential for inconsistencies among licensees, and would result in higher costs to both the licensee population and the NRC because of the cost inefficiencies of dealing with this issue on an individual plant basis.

, Option 2: This option allows power reactor licensees to reduce their onsite insurance coverage and offsite financial protection requirements during permanent shutdown without resorting to the exemption process. The level of financial protection would be determined for permanently shutdown reactors at a level that coincides with their specified configuration stage.

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During reactor configuration 1, licensees would be required to maintain onsite ,

insurance coverage and offsite financial protection at the levels currently l required by 10 CFR 50.54(w) and 10 CFR 140.11, respectively. This is because )

the radiological consequences during this stage of permanen} shutdown approximate the magnitude of a severe core damage ticident After allowing the spent fuel to cool down and reach a point that the maximum spent fuel cladding temperature will not exceed 565 C in the event of a loss of water in the spent fuel pool (reactor configuration 2), power reactor licensees would be allowed to reduce their onsite insurance coverage under 10 CFR 50.54(w) from $1.06 billion to $25 million or $50 million depending on the --

l status of the spent fuel pool and the radioactive inventory onsite. The reason for this reduction in insurance coverage is that the rapid clad oxidation event of reactor configuration 1 is not possible. Insurance coverage l requirements for reactor configuration 2 are based on the fact that there is a possibility for a fuel handling accident in the spent fuel pool, and there are l

significant amounts of mobile radioactive sources onsite that have a potential for release during this period. The $25 million or $50 million coverage would I

be an adequate amount of insurance coverage to clean up the site in the event l of a fuel handling accident or a rupture of a large radioactively contaminated l waste storage tank, respectively. The $25 million insurance coverage would be sufficient to cover the cleanup costs from a fuel handling accident and the )

$50 million would be required if the site had a significant amount of mobile l radioactive waste inventory onsite such as the 450,000 gallon slightly j contaminated radwaste storage tank that was postulated to rupture during )

reactor configuration 2.

The above proposed insurance coverage requirements for onsite coverage are higher than the amounts that were approved through the exemption process for Trojan and Yankee Rowe nuclear power plants (Table 1). Both plants received NRC approval to reduce onsite coverage to $5 million. The exemption request was approved after the licensees provided site specific information as to the cleanup costs from hypothetical accident scenarios that might occur during permanent shutdown. The analyses took into account the passage of time to account for the radioactive inventory onsite from the date the units ceased ,

operation in order to arrive at their cleanup cost estimates. l The proposed insuranco coverage requirement for reactor configuration 2 does not take into account the reduction in radioactive decay of the spent fuel assemblies with the passage of time to proportion the insurance requirements during that period. The insurance coverage requirements are based on the conservative assumption of a fuel handling accident shortly after the transition to reactor configuration 2. Adjusting insurance requirements during reactor configuration 2 based on the decay level of the spent fuel would be burdensome from a regulatory standpoint as opposed to selecting a bounding figure to encompass any unexpected events concerning the spent fuel pool. j For reactor configuration 2, the offsite financial protection requirements set l forth in 10 CFR 140.11 would be reduced from $200 million to $100 million for the primary liability coverage and the licensee would be allowed to withdraw from the secondary liability coverage under Price-Anderson for reactor

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configuration 2. Analyses have shown that the offsit i I' and conservative postulated accidents are negligible,yd pp,apts

• from However, it limitingis reasonable to assume that there may still be lawsuits for alleged damages from

. offsite releases from a facility. TMI-2 has shown that significant judgements <

can be awarded, even } hough the BNL technical assessment reported negligible j- offsite consequences. Under this configuration, the staff estimates  !

L licensees may be able to reduce their insurance premiums from about $750K/ year 4

to approximately $350K/ year.

I For reactor configuration 3, when all the spent' fuel has been remosed to an l l onsite or offsite dry storage ISFSI or to a DOE high-level reposito.y, und the  ;

i onsite radioactive inventory is greater than 1000 gallons, the onsite insurance coverage requirements would be required at a level of $50 million i j under 650.54(w). This amount is based on the fact that there are still mobile

radioactive sources onsite that have the potential to contaminate the site.  ;

j Maximum cleanup costs associated with reactor configuration 3 are estimated at j

approximately $50 million. The conservative limiting event is the rupture of a contaminated storage tank that causes soil contamination and potential l contamination of the ground-water table. If the onsite radioactive. liquid

{ inventory is less than 1000 gallons, the insurance amount would be reduced to j $25 million to account for less impact to cleanup' the site. The offsite a

financial protection requirements under section 140.11 would be reduced from i'

$100 million to $50 million under reactor configuration 3. Some lawsuits should still be assumed even though the radiological consequences offsite are considered negligible, but the liability risk is considered less than under reactor configuration 2. With no spent fuel in the spent fuel pool, the risks of offsite contamination have been reduced considerably for this

! configuration. Under this configuration, licensees may be able to reduce their insurance premiums further to approximately $250K/ year.

l For reactor configuration 4, there are no significant mobile sources of l j radioactivity such as liquid contattinants onsite. Thus, the potential for ,

l onsite and offsite radiological impacts is limited. Under this situation,

onsite insurance coverage requirements would be either $25 million or i i completely eliminated under section 50.54(w). The amount would be determined i based upon information provided by a licensee and evaluated by the staff as to l

the particular circumstances of the shutdown reactor. The amount of $25 j million onsite insurance coverage requirements would be based on the amount of i stored liquid radwaste onsite, usually 1000 gallons or less of radwaste, that may be susceptible to an accidental spill and cleanup of the contaminated i site. The elimination of onsite insurance coverage requirements would be l based on the condition that the site has been cleaned to unrestricted release

[ levels and is awaiting a confirmatory survey for termination of license. In j either case, the onsite and offsite consequences would be negligible.

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! In SECY-95-048, the staff recommended that there was no need to establish

financial . assurance for cleanup of accidents for material licensees. The

, recommendation to eliminate onsite insurance coverage for reactor configuration 4 in certain circumstances complements this action since  ;

l imposition of financial assurance would be of no benefit to licensees, the '

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NRC, or the public because the licensee would have adequate resources for cleanup. There would not be a public health or safety issue, and the Federal government would not incur a financial risk.

For reactor configuration 4, the offsite financial protection requirements would be reduced to $25 million to account for the continuing potential for claims based upon asserted offsite consequences. Requiring a minimum of $25 million in coverage would minimize the possibility that the Federal government indemnification would be required. It should also be noted that the Atomic Energy Act does not allow a 10 CFR Part 50 licensee to entirely drop this coverage, only to reduce it. Under this configuration, licensees may be able to reduce their insurance premiums below $250K/ year.

In addition, " rated capacity" would be clarified in 10 CFR Part 140 to indicate that permanently shutdown nuclear power plants have zero " rated capacity." Once the reactor entered into reactor configuration 2, it would no longer be subject to the requirements to maintain primary financial protection in the " maximum amount available at reasonable cost and on reasonable terms from private sources" and, further, to participate in a secondary financial protection public liability system under section 170 of the Atomic Energy Act.

The Commission has already approved these adjustments in the primary and r.econdary public liability insurance regime and this clarification in Part 140, as requested by the Commission, places into the Commission's regulations a statement that a permanently shutdown nuclear power plant is no longer considered to have any " rated capacity."

Based on a preliminary cost benefit analysis, Option 2 will result in cost savings to the affected licensee population and the NRC because of the regulatory efficiencies associated with codifying the regulation. Option 2 will eliminate the need for most individual plant exemption requests thereby eliminating the development of exemption packages on behalf of licensees and their review and evaluation on behalf of the NRC. The staff's estimate of the savings per exem9 tion request assumes a licensee's and NRC's level of effort of 4 person . seeks and 1 person-week, respectively. Based on labor rates of

$70/ hour (1996 dollars) for both licensees and the NRC, each exemption request would cost a licensee and the NRC about $11 thousand and $3 thousand, respectively. Assuming that under Option 1, approximately 100 new exemption requests would be processed, suggests savings on the order of $1.1 million to industry and $300 thousand to the NRC. These savings would most likely be spread out over the next 20 to 30 years assuming license renewal is not widely implemented. In addition, Option 2 would result in greater regulatory certainty than Option 1, ensure consistent treatment among all power reactor licensees, and eliminate the potential for costly delays in effecting this appropriate regulatory relief. l Also, although an apparent strong economic incentive exists, there is no I usurance or guarantee that all licensees would seek an exemption request if ,

the no action option were retained. An exemption request is, after all, l voluntary on industry's part and requires a licensee's initiation. To the l extent certain licensees do not apply for exemptions, or delays occur in initiation, processing, or NRC approval, Option 2 would result in significant reductions in insurance premiums to the licensees relative to the no action l

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l' alternative. Annual savings in insurance premiums per reactor are estimated to range from about $400 thousand to $750 thousand depending on the reactor configuration. If one assumed that 10 percent of the affected reactor l i

population of 100 did not pursue an exempti~on under the no action alternative, )

industry-wide savings from Option 2 could eventually approximate $4 million to

$7.5 million per year. Further, given the tendency on the part of industry to delay decommissioning, these annual savings could persist for decades as reactors remain in a permanently shutdown mode. Similarly, if the exemption process results in delays in regulatory relief, the annual per reactor savings of $400 thousand to $750 thousand would apply, prorated over the length of the del ay. "-

Ootion 3: This option allows power reactor licensees to reduce further their offsite financial protection requirements during permanent shutdown without .

resorting to the exemption process but would require onsite insurance coverage I the same as in Option 2.  ;

The Price Anderson Act requires that all Part 50 licensees have public  !

liability financial protection coverage and that the Federal government assume responsibility for the liability claims that exceed that level of coverage.

By reducing the offsite financial protection coverage under reactor configurations 2, 3, and 4 to the $5-10 million range, a licensee's premiums would be reduced, although not necessarily linearly. Alternatively, on an expected value basis, Option 3 increases the likelihood that the Federal government would have to bear some of the financial risk. A comparison of the ,

expected public cost versus the private costs of Options 2 and 3 shows a clear net savings to licensees by shifting some of the risk to the public sector.

However this would be accomplished at the expense of increasing to some extent the potential for Federal government involvement in satisfying public liability claims. Furthermore, lowering the licensees' liability in the event of an accident could be problematic in terms of the public's perception.

Preferred Option: Given these considerations, the staff concludes that the preferred option is Option 2. It provides licensees with a significant amount of relief in reduced insurance premiums following permanent shutdown, and unlike Option 3, does so without shifting any of the risks to the public  ;

sector or jeopardizing the financial protection requirements during this t period. It further provides a simplified approach for implement 1 tion by limiting the critical cladding temperature of the spent fuel before reducing financial protection requirements and focuses on the onsite mobile sources of radioactivity and site activities. It provides licensees a reduced financial '

burden with no compromise in health and safety. Licensees will have an option  ;

to use a computer code developed by BNL for the NRC to calculate the transition time period from reactor configuration 1 to reactor configuration 2 for their facilities. In addition, a new section 6140,ll(a)(5) will be added which will specify financial protection requirements for permanently shutdown reactors which are not authorized to operate. ,

1 The amounts proposed for offsite coverage requirements for reactor l configurations 2, 3, and 4 were developed to ensure the public is fully j protected against low probability events even though the NRC staff considers ,

that any such events would have negligible offsite consequences, and to 3

protect the Federal government from indemnity claims. The burden would remain on licensees to maintain adequate coverage for payment of claims in the event a licensee experiences an unlikely nuclear incident, whether or not there are any detrimental consequences.

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These recommendations apply only to permanently shutdown nuclear power *

reactors. The staff will address the financial protection requirements for ISFSIs after current efforts dealing with technical and licensing issues for ISFSIs are resolved in the areas of safeguard requirements, emergency planning, and potential fuel storage handling activities. The results of i

! these efforts will provide the dafi' wah information for evaluating the need for financial protection requirements.

I OGC'S LEGAL SUFFICIENCY ANALYSIS DEMONSTRATING THAT N0 KNOWN BASIS EXISTS FOR ,

j LEGAL OBJECTION l

The options for the rulemaking delineated in this plan are within the

. authority of the Commission, granted to the agency to protect the public health and safety through licensing of commercial production and utilization '

facilities under the Atomic Energy Act of 1954, as amended, and within the provisions of section 170 of that Act (Price Anderson).

This rulemaking would amend the financial protection requirements associated i with permanently shutdown facilities permitting burden reductions for licensees. The scope of the backfit provisions in 10 CFR 50.109 is limited to construction and operation of n; clear reactors. This rulemaking would only apply to reactors that have permanently ceased operations. Therefore, the backfit rule does not apply to these proposed changes.

i AGREEMENT STATE CONSIDERATIONS 1

Although Agreement States do not license power reactors, agencies of such

States are involved in overseeing rate cases related to these facilities.

Input from the Agreement States will be sought on this plan, i SUPPORTING DOCUMENTS i

] A regulatory analysis, environmental assessment, and an OMB package would be

! required to support the rulemaking.

f RESOURCES REOUIRED l

Resources are included in the current Five-Year Plan to complete the  !

rulemaking. The offices involved are RES, NRR, NMSS, and OGC.

IS IT RECOMMENDED THAT THE EDO ISStjE_IHE RULE IN ACCORDANCE WITH MANAGEMENT DIRECTIVE 9,177 No. The rulemaking considers a significant question of policy and should require a notation vote by the Commission.

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LEAD OFFICE STAFF AND STAFF 'sITHIN EACH OFFICE WHO WILL BE INVOLVED Working Group Office Concurrence '

RES George Mencinsky/Rajender Auluck D.L. Morrison NRR Singh Bajwa/ Ira Dinitz F.J. Miraglia NMSS -Andrew Persinko C.A. Paperielio OGC ~ 5tepnen 1.ewis L'.'J. Olmstead USE OF STEERING GROUP No. This rulemaking effort would not be expected to benefit from the use of a steerir.g group.

PUBLIC PARTICIPATION This Rulemaking Plan will_ be placed on an electronic bulletin board following

. EDO approval and Commission review. The public will have the opportunity to comment on the proposed rule after it is published in the Federal Reaister.

SCHEDULE Expressed in terms of time from approval of the Rulemaking Plan.

Proposed rule to EDO 5 months Public-comment period ends 8 months Final rule to EDO 1 year 4

i TABLE I FINANCIAL PROTECTION EXEMPTIONS IN EFFECT AT PERMANENTLY SHUTDOWN PLAN _TS i PLANTS ONSITE (50.54(W)) 0FFSITE (140.11 - PRICE ANDERSON)

PRIMARY SECONDARY INSURANCE COVERAGE FINANCIAL PROTECTION FINANCIAL PROTECTION

( $ MILLION ) ( $ MILLION ) ( YES/NO )

RANCHO SECO 50.0 100 N0 LACROSSE 180.0 30.6 NO YANKEE R0WE 5.0 100 N0 i HUMBOLT BAY 63.2 -

50 NO TROJAN 5.0 100 N0 t

NOTE: Plants listed above have spent fuel stored onsite in the spent fuel pool.

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l January 9, 1997

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C O R R E C T I O N N O T I C E 1

TO ALL HOLDERS OF  !

SECY-96-256 - CHANGES TO THE FINANCIAL PROTECTION REOUIREMENTS FOR PEPMANENTLY SHUTDOWN NUCI. EAR POWER REACTORS, 10 CFR 50. 54 (W) AND 10 CFR 140.11 PLEASE REPLACE PAGES 1 THROUGH 14 AND TABLE 1 OF ATTACHMENT 1 TO  !

SECY-96-256 WITH THE ATTACHED REPLACEMENT PAGES. A NEW DUE DATE l

- HAS BEEN ESTABLISHED AT JANUARY 17, 1997. ,

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RULEMAKING PLAN FOR AMENDING FINANCIAL PROTECTION REQUIREMENTS FOR PERMANENTLY SHUTDOWN NUCLEAR POWER REACTORS ISSUES TO BE RESOLVED The current insurance coverage regulations for nuclear power reactors do not tak: ir.t> :onsideration the reduced risk associated with permanently shutdown (PSD) plants. Reduced insurance coverage for these plants has been allowed through the exemption process.

Consideration of whether financial protection coverage should be reduced for PSD plants needs to take into account the preservation of the solvency of the organization responsible for maintaining and decommissioning these facilities in the unlikely event of a nuclear incident. Timely payment for valid damage claims by members of the public and minimization of the likelihood that Federal government indemnity would be called upon for satisfaction of claims for damages would have to be considered.

in addition, the existing requirements for offsite financial protection apply to power reactors with a specified " rated capacity" in terms of electrical kil owatt's . The use of the term " rated capacity" needs to be modified to address indemnity for permanently shutdown plants.

CURRENT RULE RE0VIREMENTS Licensees of facilities ' designed to produce substantial amounts of electricity, a rated capacity of 100,000 kWe or more, must have and maintain, according to 10 CFR 140.11, a primary insurance coverage of $200 million from private sources to protect against offsite liability. In addition, licensees must maintain secondary financial protection in the form of private liability insurance availab a under an industry retrospective rating plan. The current maximum obligation for secondary financial protection for a licensee in this plan is $75.5 million with respect to any nuclear incident. Thus, the total financial protection for offsite liability for any incident would be the primary layer of $200 million, plus the secondary layer of $75.5 million multiplied by the number of licensed power reactors with a rated capacity of 100,000 kWe or higher.

Under 10 CFR 50.54(w), power reactor licensees must obtain insurance coverage from private sources to provide protection against onsite damage in the event of an accident. These monies would allow the licensee to stabilize and decontaminate the reac;or and reactor station site in the event of an accident. The minimum amount of insurance coverage is the lesser of either

$1.06 billion or whatever amount of insurance is generally available from private sources.

BACKGROUND This rulemaking plan is part of a broad effort to eliminate unnecessary regulatory burdens for power reactor facilities that are permanently shutdown and in the process of decommissioning. This plan complements other amendments

for decommissioning, such as the final rule that was published in the Federal Register (61 FR 39278) on July 29, 1996, that clarified the procedures that i

lead to permanent shutdown and eventually to the termination of an operating i license for nuclear power reactors. Under that rule, permanent s,hutdown would become a codified natus of a reactor when a licensee has certified that all fuel N.3 been removed from the reactor core and that it has permanently ceased

power operations.

1 In an SRM' dated July 13, 1993, the Commission approved staff recommendations to: (1) allow licensees that have permanently shut down to withdraw from the 4

secondary financial protection layer under the Price Anderson Act (section 170

! of the Atomic Energy Act, as amended), (2) reduce the required primary financial protection coverage under Price Anderson to $100 million after an appropriate spent fuel cooling period, and (3) proceed with rulemaking to determine appropriate further reductions in the level of insurance coverage after the appropriate spent fuel cooling period. The Commission also i requested that the staff determine whether there is a need for financial j protection for ISFSIs and requested k rification of the term " rated capacity," as applied to permanently shutdown reactors.

This rulemaking plan responds to above item 3 in the SRM for PSD plants. The staff will address the financial protection requirements for ISFSIs after current efforts dealing with technical and licensing issues for ISFSIs are resolved in the areas of safeguard requirements, emergency planning, and 1 potential fuel storage handling activities. The results of these efforts will I

provide the staff with information for evaluating the need for financial

! protection requirements. Items 1 and 2 of the SRM were addressed previously in a memorandum dated August 4,1993, from the ED0 to the Commission. This

rulemaking will also address a petition submitted by the North Carolina Public 4

Staff Utilities Commission. The petition, PRM-50-57, requested reduction or, i preferably, elimination of the $1.06 billion of insurance for onsite reactor

stabilization and accident decontamination that is required by 10 CFR 50.54(w) 4 in instances when all nuclear fuel has been removed from the site. The j petitioner also requested that the requirement for offsite primary and secondary liability coverages required under 10 CFR 140.11(a)(4) be reduced or, preferably, eliminated for shutdown reactors when no nuclear fuel is on i the reactor site.

DISCUSSION i For the purpose of discussion, several different configurations for l permanently shutdown reactors have been established that encompass anticipated

spent fuel characteristics and storage modes following permanent shutdown.

They are as follows:

Reactor Confiauration 1: Reactor is defueled, permanently shutdown, and spent fuel in the spent fuel pool is susceptible to a zircaloy cladding fire if the spent fuel pool is drained accidentally. This configuration

'SRM dated July 13,1993, "SECY-93-127, Financial Protection Required of Licensees of Large Nuclear Power Plants During Decommissioning."

)

ncompasses the period commencing iminediately after the offload of the ,

core to just prior to when the decay heat of the hottest assemblies is I low enough that no rapid zircaloy oxidation will take place and the fuel cladding will remain intact, such as no gap release, in the event of loss of water in the spent fuel pool. j Reactor Confiauration 2: Reactor is defueled, permanently shutdown and s ]

spent fuel is in the spent fuel pool but is not susceptible to a )

zircaloy cladding fire or gap release caused by an incipient fuel I cladding failure in the event the spent fuel pool is drained i accidentally. In this configuration, the spent fuel can be stored on a  !

long-term basis in the spent fuel pool without the possibility of i

. initiating a zircaloy fire or significant fuel cladding failure. In J addition, the site may contain a radioactive inventory of liquid radwaste, activated reactor components, and contaminated structural materials. The radioactive inventory during this configuration may i l hange depending on the licensee's proposed shutdown activities and schedule. l 4

Reactor Confiauration 3: Reactor is permanently shutdown and no spent j fuel is in the reactor or the spent fuel pool. All spent fuel has been

! removed to an offsite or onsite dry storage ISFSI or to a DOE high-level i j repository. The remaining radioactive inventory depends on the decommissioning status and will include liquid radwarte, activated reactor components, and contaminated structural materials.

Reactor Conficuration 4: Same as reactor configuration 3, except the reactor site has no significant amount of mobile cources of radioactivity such as contaminated liquids (less than 1000 gallons).

There are potential onsite and offsite radiological consequences that could be associated with the onsite storage of the spent fuel in the spent fuel pool

for some time after permanent shutdown. In reactor configuration 1, in the event of a complete loss of spent fuel pool coolant inventory such as from a j beyond design basis earthquake scenario, there is a potential for overheating of the fuel by decay heat. This sequence could result in a zircaloy cladding fire that could have significant onsite and offsite consequences. The 4 probability of a zircaloy cladding fire, resulting from the loss of water from the spent fuel pool, is estimated to have a mean value of 2x10-' per reactor year The information in NUREG-1353, " Regulatory Analysis for the Resolution of Generic Issue 82, deyond Design Basis Accidents in Spent Fuel Pools,"

indicated that a potential hazard associated with spent fuel storage would i remain for some time after a reactor has been shutdown. Once the requisite cooling period for the spent fuel had elapsed after reactor shutdown, the potential zircaloy cladding fire sequence would no longer be a concern since air would cool the spent fuel sufficiently to avoid zircaloy cladding

'NUREG-1353, " Regulatory Analysis for the Resolution of Generic Issue 82, Beyond Design Basis Accidents in Spent Fuel Pools," April 1989.

combustion.

A recent analysis by Brookhaven National Laboratory (BNL) estimates that, in order to prevent fuel rod cladding failure leading to a zircaloy cladding fire given the loss of all spent fuel pool water, the rod cladding temperature must not exceed 565'C. This cladding temperature would be reached for reactor configuration 1 after a decay period of approximately 7 months for BWRs and 17 months for PWRs.' These time estimates were based on a set of conservative assumptions such as high density fuel racking geometries, high burnup fuel, 60,000 MWD /MTU for PWRs and 40 g 000 MWD /MTV for BWRs, and postulated incipient spent fuel clad failure at 565 C. The time periods for spent fuel cooldown and rod cladding temperature are important factors in the consideration of modifying the financial protection requirements for permanently shutdown reactors. For reactor configuration 1, the possible radiological consequences as analyzed by BNL could, in certain cases, approach those of a severe core damage accident which might occur during plant operation.'

For reactor configuration 2, the spent fuel has decay heat sufficiently low that the cladding will remain intact even if all spent fuel pool water is lost. The postulated accident scenario for this configuration is assumed to be a single assemtly dropped in the spent fuel o001, resulting in damage to 100 percent of the rods in the affected asseniv.y. The onsite cleanup costs are estimated from $9 to 24 million, and there are negligible offsite costs associated with this postulated event.'^* This would be the controlling accident scenario in reactor configuration 2 if the radioactive inventory onsite was negligible. It may be plausible that the licensee would take this course of action during reactor configuration 2 to reduce the radioactive inventory onsite in order to take advantage of offsite disposal co.sts early in the decommissioning process. However, if there are significant sources of radioactive material stored onsite, then it would be appropriate to have a higher level of onsite insurancs coverage than the estimated $9 to $24 million. Previous analyses have shown that radiological and nonradiological safety impacts from normal decommissioning operations and potential accidents are extremely small.'d Taking the conservative approach, a scenario of the rupture of a large slightly contaminated liquid storage tank, discussed as

'NUREG/CR-6451, "A Safety and Regulatory Assessment of Generic BWR and PWR Permanently Shutdown Nuclear Power Plants," U.S. Nuclear Regulatory Commission Report by Brookhaven National Laboratory (to be published in 1996).

'BNL Technical Letter Report dated 12/29/95, " Task 2 - Permanent Shutdown Program: Transmittal of Onsite Property Damage Insurance Recommendations."

'BNL Technical Letter Report dated 1/22/96, " Task 2 - Permanent Shutdown Program: Transmittal of Offsite Liability Insurance Recommendations."

'NUGEG/CR-0130, " Technology, Safety and Costs of Decommissioning a Reference Pressurized Water Reactor Power Station," June 1978.

'NUREG/CR-0672, " Technology, Safety and Costs of Decommissioning a Reference Boiling Water Reactor Power Station," June 1980.

1 l

1

part of reactor configuration 3, was selected as conceivable also under reactor configuration 2. That postulated event was estimated to result in an onsite waste cleanup cost of approximately $50 million with negligible radiological consequences offsite. In economic terms, it surpassed the

, cleanup costs associated with a fuel handling accident discussed above and it has been taken into account in determining the upper bound level of onsite insurance coverage required in reactor configuratien 2. A similar event to the rupture of the large slightly contaminated liquid storage tank would be an i

accidental release of the large volume of water from the spent fuel pool.

This event would have similar cleanup costs as associated with the rupture of the large slightly contaminated liquid storage tank.

l Even though the offsite consequences are negligible in reactor configuration 2 for the events cited above, because the spent fuel pooT is operational and an

inventory of radioactive materials exists onsite an appropriate level of offsite financial protection is required to account for the potential for significant judgements or settlements from litigation thst might be instituted and to protect the Federal governmerit from 'ndemnity claims.

For reactor configuration 3, when spent fuel is no longer stored in the spent fuel pool, the potential for a radiological incident is primarily focused on mobile sources of radioactivity onsue at permanently shutc'own nuclear reactors. For estimating accident cleanup costs, the limiting event considered is the rupture of a borated water storage tank, releasing 450,000 gallons of slightly radioactive water that causes soil contamination and i potential contamination of the groundwater table. The onsite cleanup costs l are estimated at approximately $50 million.' Although not all reactor sites .

have a borated water storage tank, the rupture of other large tanks of slightly contaminated water could result in similar consequences. l 5

The offsite cleanup costs were found to be negligible for reactor l configuration 3 but as was noted in reactor configuration 2, an appropriate level of offsite financial protection is still required to accotnt for the potential for significant judgements or settlements from litigation that might i be instituted and also to protect the Federal government from intiemnity I cl aims. Because the level of risk has decreased from reactor cor,figuratio, 2 by having no spent fuel in the spent fuel pool, the level of offsite financial protection required can be reduced by taking only into account the mobile 1 radioactive inventory onsite. l For reactor configuration 4, it is postulated that, with no significant amount  !

of mobile sources of radioactivity such as contaminated liquids onsite, and a l fire protection program in effect, there is no event that would require maintaining the same level of insurance coverage for onsite or offsite financial protection as in reactor configuration 3. The basis for the transition from reactor configuration 3 to reactor configuration 4 is assumed to be the point at which there is less than 1000 gallons of liquid radwaste stored onsite. This number was chosen because it constitutes approximately a factor of 500 reduction in volume from the large volume tank used as the basis for the reactor configuration 3 limiting event. The postulated rupture of this much smaller tank is estimated to have at least 2 orders of magnitude less impact than the rupture of the large tank, such that onsite cleanup costs I

1 i

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4 i

l would not necessitate a level of insurance coverage as specified in reactor configuration 3. Therefore, the coverage would be reduced further to account for the potential of onsite cleanup of an accidental rupture of a less than 1000 gallon tank during this period.

During reactor configuration 4, it may also be assumed that the licensee has cleaned the site to unrestricted release levels and is awaiting a confirmatory survey for termination of license. The level of onsite insurance coverage at this stage would be less than the scenario for the 1000 gallons of liquid radwaste stored onsite. Under these circumstances the onsite coverage could be further reduced to account for negligible onsite and offsite consequences.

However, for offsite financial protection requirements, even though the offsite consequences are negligible, adequate coverage would still be required  !

because of the litigious nature of our society.

PRELIMINAR) REGULATORY ANALYSIS l Options Based on the above, the following options were considered for power reactors that were permanently shutdown:

Issue A. Financial Protection Requirements For Reactor Configurations 1, 2,  !

3, & 4

1. No action. Maintain onsite insurance coverage requirements and offsite financial protection requirements for permanently shutdown nuclear reactors as prescribed by 10 CFR 50.54(w) and 10 CFR 140.11. Provide relief from regulatory requirements on a case-by-case basis through the exemption process.

2. Adjust onsite insurance coverage requirements and offsite financial protection requirements on a generic basis for permanently shutdown reactors based on limiting the spent fuel cladding temperatures for accidents involving loss of spent fuel pool water, the possibility of onsite dry storage of spent fuel, and the amount of liquid radwaste stored onsite in post shutdown modes. The insurance coverage requirements are based on the estimated cost of recovery from limiting hypothetical events for reactor configurations described below and due to intangible .

elements related to the assumption that claims by members of the public might be filed for offsite consequences from nuclear energy hazards. THI-2 has shown that significant amounts can be involved (settlements in the TMI case) even though the offsite consequences were negligible.  ;

1 Clarify the definition as stated in section 170(a) of the Atomic Energy Act of " facilities designed for producing substantial amounts of electricity and having a rated capacity of 100,000 .

electrical kilowatts or more" in 10 CFR 50.2 and 10 CFR 140.3 to indicate that a permanently shutdown nuclear reactor has a " rated capacity" of zero.

f

~ The following financial protection requirement would be specified: -

1 Reactor Confiauration 1 - fuel in spent fuel cool not sufficiently l Cool.. Onsite insurance coverage requirements and offsite financial protection requirements remain as presently.specified in 10 1 CFR 50.54(w) and 10 CFR 140.11, respectively.

Reactor Confiauration 2 - fuel could tolerate a complete loss of water in the spent fuel cool.

- Onsite insurance coverage requirements - $50 million. The ,

amount of $50.million to account for a rupture of a large i slightly contaminated liquid storage tank, or recover from a i postulated accident in the spent fuel pool.  !

- Offsite financial protection requirements - $100 million i t

based on the potential for significant judgements or settlements resulting from' litigation despite negligible ,

offsite consequences, j ERAC. tor Confiauration 3 - no fuel in scent fuel oool. risk '

deoendent on radioactive inventory at olant site in decommissionina status. .

- Onsite insurance coverage requireinents - $50/$25 million. .

The amount of $50 million based on the estimated amount to-recover from a postulated onsite event of a rupture of a large slightly contaminated liquid storage tank. If the  ;

onsite radioactive liquid inventory is less than 1000 )

gallons, the insurance amount will be $25 million. t

- Offsite financial protection' requirements - $50 million based on the potential for significant judgements or settlements resulting from litigation that might still be instituted, but where the liability risk-is considered less than in reactor configuration 2, despite negligible offsite consequences.

Reactor Confiauration 4 - no fuel in the spent fuel pool and no sianificant source of mobile radioactive material.

- Onsite insurance coverage requirements - $25/$0 million.

The amount of $25 million based on the possibility of having to cleanup onsite contamination from an accidental rupture of a less than 1000 gallon contaminated liquid storage tank during shutdown activities. Elimination of onsite insurance coverage when licensee is awaiting confirmatory survey for license termination.

- Offsite financial protection requirements - $25 million based on the potential for claims based upon asserted  ;

offsite consequences. This would minimize the possibility j that the Federal government indemnification would be i required. It should also be noted that the Atomic Energy  ;

Act does not allow a 10 CFR Part 50 licensee to entirely i drop this coverage, only to reduce it. l 1

3. Same as option 2 but would allow licensees to reduce further their offsite financial protection requirements during permanent shutdown without resorting to the exemption process. This option sets a de minimis level of liability insurance for offsite coverage on the order of $5-10 million for reactor configurations 2, 3, and 4, consistent with the analyses that offsite radiological consequences are negligible and it would provide the Federal government with a minimal threshold of protection to financial risk from public indemnity claims. This alternative essentially endorses eliminating offsite financial protection ._

requirements for permanently shutdown reactors in reactor configerations 2, 3, and 4, but maintains some required coverage to satisfy the legal requirements of the Price Anderson Act, which requires some level of public liability protection in effect.

Decision Criteria Financial Protection Requirements for Pernianently Shutdown Reactors .(Reactor Configurations 1, 2, 3, and 4)

Ootion 1: The no action option retains the same financial protection requirements regardless of whether the power rehetor is permanently shutdown or operating. Power reactor licensees would continue to be required to maintain coverage at the prescribed levels specified in the regulations during permanent shutdown. For each power reactor, that would amount to $1.06 billion of onsite insurance coverage and primary offsite liability coverage of

$200 million plus $75.5 million in secondary financial liability. In certain permanently shutdown scenarios, the above amount of financial coverage required of licensees would be more than necessary and costly based on analyses performed for the staff and the level of perceived risk during permanent shutdown.'^' Power reactor licensees would have the opportunity to request an exemption from the above requirements. A number of licensees have used this process to obtain regulatory relief (Table 1). While exemptions could continue to provide regulatory relief, Option I would do so with far less regulatory certainty than Option 2 discussed below. Further, it poses a potential for inconsistencies among licensees, and would result in higher costs to both the licensee population and the NRC because of the cost inefficiencies of dealing with this issue on an individual plant basis.

Ootion 2: This option allows power reactor licensees to reduce their onsite insurance coverage and offsite financial protection requirements during permanent shutdown without resorting to the exemption process. The level of financial protection would be determined for permanently shutdown reactors at a level that coincides with their specified configuration stage.

During reaci.or configuration 1, licensees would be required to maintain onsite insurance coverage and offsite financial protection at the levels currently required by 10 CFR 50.54(w) and 10 CFR 140.11, respectively. This is because the radiological consequences during this stage of permanent shutdown approximate the magnitude of a severe core damage accident.'

After allowing the spent fuel to cool down and reach a point that the maximum spent fuel cladding temperature will not exceed 565 C in the event of a loss of water in the spent fuel pool (reactor configuration 2), power reactor licensees would be allowed to reduce their onsite insurance coverage under 10 CFR 50.54(w) from $1.06 billion to $50 million. The reason for this reduction in insurance coverage is that the rapid clad oxidation event of reactor configuration 1 is not possible. Insurance c,verage reau"ements for reactor configuration 2 are based on the fact that there is a possibility for a fuel  :

handling accident in the spent fuel pool, and there are significant amounts cf I mobile radioactive sources onsite that have a potential for release during this period. The $50 million coverage would be an adequate amount..of ,

insurance coverage to clean up the site in the event of a fuel handling l accident, accidental release of cooling water from the spent fuel pool, or a .

rupture of a large slightly contaminated liquid storage tank.  !

The above proposed insurance coverage requirements for onsite coverage are  !

higher than the amounts that were approved through the exemption process for l Trojan and Yankee Rowe nuclear power plants (Table 1). Both plants received  !

NRC approval to reduce onsite coverage to $5 million. The exemption request j was approved after the licensees provided site specific information'as to the cleanup costs from hypothetical accident scenarios that might occur during permanent shutdown. The analyses took into account the passage of time to .

account for the radioactive inventory onsite from the date the units ceased l operation in order to arrive at their cleanup cost estimates.

The proposed insurance coverage requirement for reactor configuration 2 does i I

not take into account the reduction in radioactive decay of the spent fuel assemblies with the passage of time to proportion the insurance requirements during that period. The insurance coverage requirements are basea on the conservative assumption of a fuel handling accident shortly after the transition to reactor configuration 2. Adjusting insurance requirements l

during reactor configuration 2 based on the decay level of the spent fuel would be burdensome from a regulatory standpoint as opposed to selecting a bounding figure to encompass any unexpected events concerning the spent fuel pool.

{

For reactor configuration 2, the offsite financial protection requirements set forth in 10 CFR 140.11 would be reduced from $200 million to $100 million for the primary liability coverage and the licensee would be allowed to withdraw from the secondary liability coverage under Price-Anderson for reactor configuration 2. Analyses have shown that the offsite im acts from limiting and conservative postulated accidents are negligible.'^'p# However, it is reasonable to assume that there may still be lawsuits for alleged damages from l offsite releases from a facility. THI-2 has shown that significant i settlements can be awarded, even though the BNL technical assessment reported negligible offsite consequences.' Under this configuration, the staff estimates licensees may be able to reduce their insurance premiums from about

$750K/ year to approximately $350K/ year.

For reactor configuration 3, when all the spent fuel has been removed to an onsite or offsite dry storage ISFSI or to a DOE high-level repository, and the onsite radioactive inventory is greater than 1000 gallons, the onsite insurance coverage requirements would be required at a level of $50 million l

\

under 550.54(w). This amount is based on the fact that there are still mobile radioactive sources onsite that have the potential to contaminate the site. Maximum cleanup costs associated with reactor configuration 3 are estimated at approximately $50 million. The conservative limiting event is the rupture of a large contaminated liquid storage tank that causes soil contandnation and potential contamination of the ground-water table. If the onsite radioactive liquid inventory is less than 1000 gallons, the insurance amount would be reduced to $25 million to account for less impact to cleanup the site. The offsite financial protection requirements under section 140.11 would be reduced from $100 million to $50 million undgr_ reactor configuration

3. Some lawsuits should still be assumed even though the radiological consequences offsite are considered negligible, but the liability risk is considered less than under reactor configuration 2. With no spent fuel in the spent fuel pool, the risks of offs contamination have been reduced considerably for this configuration. Under this configuration, licensees may be able to reduce their insurance premiums ferther to approximately

$250K/ year.

For reactor configuration 4, there are no significant mobile sources' of radioactivity such as liquid contaminants onsite. Thus, the potential for onsite and offsite radiological impacts is limited. Under this situation, onsite insuraace coverage requirements wauld be either $25 million or completely eliminated under section 50.54(w). The amount would be determined based upon information provided by a licensee and evaluated by the staff as to the particular circumstances of the shutdown reactor. The amount of $25 million onsite insurance coverage requirements would be based on the amount of stored liquid radwaste onsite, usually 1000 gallons or less of radwaste, that may be susceptible to an accidental spill and cleanup of the contaminated site. The elimination of onsite insurance coverage requirements would be based on the condition that the site has been cleaned to unrestricted release levels and is awaiting a confirmatory survey for termination of license. In either case, the onsite and offsite consequences would be negligible.

In SECY-95-048, the staff recommended that there was no need to establish financial assurance for cleanup of accidents for material licensees. The recommendation to eliminate onsite insurance coverage for reactor configuration 4 in certain circumstances complements this action since imposition of financial assurance would be of no benefit to licensees, the NRC, or the public because the licensee would have adequate resources for cleanup. There would not be a public health or safety issue, and the Federal government would not incur a financial risk.

For reactor configuration 4, the offsite financial protection requirements would be reduced to $25 million to account for the continuing potential for claims based upon asserted offsite consequences. Requiring a minimum of $25 million in coverage would minimize the possibility that the Federal government indemnification would be required. It should also be noted that the Atomic Energy Act does not allow a 10 CFR Part 50 licensee to entirely drop this coverage, only to reduce it. Under this configuration, licensees may be able to reduce their insurance premiums below $250K/ year. l l

1

i 4

l In addition, " rated capacity" would be clarified in 10 CFR Part 140 to l indicate that permanently shutdown nuclear power plants have zero " rated capacity." Once the reactor entered into reactor configuration 2, it would no longer be subject to the requirements to maintain primary financial protection in the " maximum amount available at reasonable cost and on reasonable terms l f: om p. ivate sources" and, further, to participate in a secondary financial 1

protection public liability system under section 170 of the Atomic Energy Act.

The Commission has already approved these adjustments in the primary and secondary public liability insurance regime and this clarification in Part 140, as requested by the Commissic ., p'n:c into the Commission's regulations 1 i a statement that a permanently shutdown nuclear power plant is no longer i considered to have any " rated capacity." , j l Based on a preliminary cast benefit analysis, Option 2 will result in cost l savings to the affected licensee population and the NRC because of the  ;

i regulatory efficiencies associated with codifying the regulation. Option 2 l

> will eliminate the need for most individual plant exemption requests thereby eliminating the development of exempic, packages on behalf of licensees and

. their review and evaluation on behalf of the NRC. The staff's estimate of the i j savings per exemption request assumes a licensee's and NRC's level of effort of 4 person-weeks and 3 person-week, respectively. Based on labor rates of

$128/ hour (1996 dollars) for both licensees and the NRC, each exemption request would cost a licensee and the NRC about $20 thousand and $15 thousand, 1

respectively. Assuming that under Option 1, approximately 100 new exemption requests would be processed, suggests savings on the order of $2.0 million to  ;

industry and $1.5 million to the NRC. These savings would most likely be spread out over the next 20 to 30 years assuming license renewal is not widely

implemented. In addition, Option 2 would result in greater regulatory certainty than Option 1, ensure consistent treatment among all power reactor

licensees, and eliminate the potential for costly delays in effecting this

] appropriate regulatory relief.

l Also, although an apparent strong economic incentive exists, there is no assurance or guarantee that all licensees would seek an exemption request if

- the no action option were retained. An exemption request is, after all,

voluntary on industry's part and requires a licensee's initiation. To the j extent certain licensecs do not apply for exemptions, or delays occur in

initiation, processing, or NRC approval, Option 2 would result in significant reductions in insurance premiums to the licensees relative to the no action

alternative. Annual savings in insurance premiums per reactor are estimated

to range from about $400 thousand to $750 thousand depending on the reactor configuration. If one assumed that 10 percent of the affected reactor i population of 100 did not pursue an exemption under the no action alternative, industry-wide savings from Option 2 could eventually approximate $4 million to a $7.5 million per year. Further, given the tendency on the part of industry to

delay decommissioning, these annual savings could persist for decades as '

reactors remain in a permanently shutdown mode. Similarly, if the exemption process results in delays in regulatory relief, the annual per reactor savings of $400 thousand to $750 thousand would apply, prorated over the length of the 3

delay.

Option 3: This option allows power reactor licensees to reduce further their l

d offsite financial protection requirements during permanent shutdown without

resorting to the exemption process but would require onsite insurance coverage the same as in Option 2.

j The Price Anderson Act requires that all Part 50 licensees have public 4 liability financial protection coverage and that the Federal government assume

, responsibility for the liability claims that exceed that level of coverage.

By reducing the offsite financial protection coverage under reactor

. configurations 2, 3, and 4 to the $5-10 million range, a licensee's premiums would be reduced, aitnougir nut necessarily linedy. Alternatively, on an i expected value basis, Option 3 increases the lu.A 1 hood that the Federal government would have to bear some of the financial risk. A comparison of the i expected public cost versus the private costs of Options 2 and 3 shows a clear net savings to licensees by shifting some of the risk to the public sector.

However this would be accomplished at the expense of increasing to some extent the potential for Federal government involvement in satisfying public liability claims. Furthermore, lowering the licensees' liability in the event i of an accident could be problematic in term of the public's perception.

4 Preferred Option: Given these considerations, the staff concludes that the preferred option is Option 2. It provides li.msees with a significant amount i of relief in reduced insurance premiums following permanent shutdown, and <

unlike Option 3, does so without shifting any of the risks to the public ,

j sectnr o'r jeopardizing the financial protection requirements during this j period. It further provides a simplified approach for implementation by l limiting the critical cladding temperature of the spent fuel before reducing

- financial protection requirements and focuses on the onsite mobile sources of

, radioactivity and site activities. It provides licensees a reduced financial l l

burden with no compromise in health and safety. Licensees will have an option 1 j to use a computer code developed by BNL for the NRC to calculate the i 4 transition time period from reactor configuration 1 to reactor configuration 2 '

l for their facilities. In addition, a new section 1140.11(a)(5) will be added i which will specify financial protection requirements for permanently shutdown

retctors which are not authorized to operate.

i The amounts proposed for offsite coverage requirements for reactor I i

configurations 2, 3, and 4 were developed to ensure the public is fully i protected against low probability events even though the NRC staff considers 4 that any such events would have negligible offsite consequences, and to

, protect the Federal government from indemnity claims. The burden would remain on licensees to maintain adequate coverage for payment of claims in the event

< a licensee experiences an unlikely nuclear incident, whether or not there are any detrimental consequences.

)

ihese recommendations apply only to permanently shutdown nuclear power reactors. The staff will address the financial protection requirements for ISFSIs after current efforts dealing with technical and licensing issues for ISFSIs are resolved in the areas of safeguard requirements, emergency planning, and potential fuel storage handling activities. The results of these efforts will provide the staff with information for evaluating the need j for financial protection requirements, i ,

OGC'S LEGAL SUFFICIENCY ANALYSIS DEMONSTRATING THAT NO KNOWN BASIS EXISTS FOR LEGAL OBJECTION The options for the rulemaking delineated in this plan are within the authority of the Commission, granted to the agency to protect the public ,

. health and safety through licensing of commercial production and utilization 4

facilities under the Atomic Energy Act of 1954, as amended, and within the i provisions of section 170 of that Act (Price Anderson).

l This rulemaking would amend the financial protection requireinents associated

with permanent?y shutdown facilities permitting burden reductions for

licensees. The scope of the backfit provisions in 10 CFR 50.109 is limited to construction and operation of nuclear reactors. This rulemaking would only apply to reactors that have permanently ceased operations. Therefore, the backfit rule does not apply to these proposed changes.

&QREEMENT STATE CONSIDERATIONS Although Agreement . States do not license pc ver reactors, agencies of such States are involved in overseeing rate cases related to these facilities.

Input from the Agreement States will be sought on this plan.

SUPPORTING DOCUMENTS A regulatory analysis, environmental assessment, and an OMB package would be required to support the rulemaking.

RESOURCES RE0VIRED Resources are included in the current Five-Year Plan to complete the rulemaking. The offices involved are RES, NRR, NMSS, and OGC.

IS IT RECOMMENDED THAT THE EDO ISSUE THE ROLE IN ACCORDANCE WITH MANAGEMENT DIRECTIVE 9.177 No. The rulemaking considers a significant question of policy and should require a notation vote by the Commission.

LEAD OFFICE STAFF AND STAFF WITHIN EACH OFFICE WHO WILL BE INVOLVED Working Group Office Concurrence RES George Mencinsky/Rajender Auluck D.L. Morrison NRR Singh Bajwa/ Ira Dinitz F.J. Miraglia NMSS Andrew Persinko C.A. Paperiello 0GC Stephen Lewis W.J. Olmstead USE OF STEERING GROUP No. This rulemaking effort would not be expected to benefit from the use of a

l steering group.

l PUBLIC PARTICIPATION l .

l This Rulemaking Plan will be placed on an electronic bulletin board following l EDO approval and Commission review. The public will have the opportunity to l comment on the proposed rule after it is published in the Federal Reaister. ,

l

! SCHEDULE 1

l Expressed in terms of time from approval of the Rulemaking Plan.

l t

l

-Proposed rule to ED0 5 months

• Public comment period ends 8 months  ;

Final rule to EDO 1 year ,

[

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TABLE 1 FINANCIAL PROTECTION EXEMPTIONS IN EFFECT AT PERMANENTLY SHUTDOWN PLANTS PLANTS ONSITE (50.54(W)) 0FFSITE (140.11 - PRICE ANDERSON)

PRIMARY SECONDARY INSURANCE COVERAGE FINANCIAL PROTECTION FINANCIAL PROTECTION

( $ MILLION ) ( $ MILLION ) ( YES/NO )

RANCHO SECO 50.0 100 NO LACROSSE 180.0 30.6 NO 1 YANKEE R0WE 5.0 100 NO 63.2 50 NO HUMBOLT BAY 5.0 100 NO TROJAN

• NOTE: Plants listed above have spent fuel stored onsite in the spent fuel pool.

_ _ _ _ _ _ - _ - _ _ _ _