Text

Yankee Nuclear Power Station Independent Spent Fuel Storage Installation - Decommissioning Funding Assurance Status Report
	ML16076A274
Person / Time
Site:	Yankee Rowe
Issue date:	03/09/2016
From:	Pizzella C; Yankee Atomic Electric Co
To:	; Document Control Desk, Office of Nuclear Material Safety and Safeguards
References
	BYR 2016-014
	Download: ML16076A274 (10)
	v • d • e

-4*

YANKEE ATOMIC ELECTRIC COMPANY 0..

MY Ii__

fl-49 Yankee Road, Rowe, Massachusetts 01367 March 9, 2016 BYR 2016-014 10 CFR 50.4 10 CFR 50.75(f)(1) and (2) 10 CFR 50.82(a)(S)(v) and (vi)

ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 20555 - 0001 Yankee Atomic Electric Company Yankee Nuclear Power Station Independent Spent Fuel Storage Installation NRC License No. DPR-3 (NRC Docket Nos.50-029)

Subject:

Decommissioning Funding Assurance Status Report On February 26, 1992, Yankee Atomic Electric Company (YAEC) informed the USNRC that the Board of Directors of YAEC had decided to permanently cease operations at the Yankee Nuclear

Power Station and that fuel had been permanently removed from the reactor (Reference 1). In accordance with 10 CFR 50.82(a)(2), the certifications in the letter modified the YAEC license to permanently withdraw YAEC's authority to operate the reactor. In 1993, YAEC commenced decommissioning the power plant. On August 10, 2007, the NRC released most of the formerly licensed land for unrestricted use, shrinking the licensed land to the Independent Spent Fuel Storage Installation (1SFSI1) only (Reference 2). The only decommissioning activities that remain are those associated with the decommissioning of the Yankee Nuclear Power Station 1SF SI, which is currently scheduled to occur after the Department of Energy (DOE) removes the irradiated fuel and Greater than Class C (GTCC) waste.

In Attachment 1, YAEC provides the attached Decommissioning Funding Assurance Status Report for the Yankee Nuclear Power Station ISFSI to comply with 10 CFR 50.75(t)(1) and (2) and 10 CFR 50.82(a)(8)(v) and (vi).

This letter contains no regulatory commitments.

"- Yankee Atomic Electric Company BYR 2016-014\\March 9, 2016\\Page 2 If you have any questions regarding this letter, please do not hesitate to contact me at (860) 267-6426 x304.

Rsespectfully, Carla M. Pizzella Vice President, Chief Financial Officer, and Treasurer

Attachment:

1. Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2015)

References:

1. A. C. Kadak (YAEC) letter to USNRC, "Penmanent Cessation of Power Operations at the Yankee Nuclear Power Station," BYR-92-024, dated February 26, 1992

2. USINRC letter to Yankee Atomic Power Company, "Yankee Nuclear Power Station - Release of Land from Part 50 License," dated August 10, 2007 cc:

D. H. Dorman, NRC Region I Administrator R. Powell, Chief, Decommissioning Branch, NRC, Region 1 J. Goshen, NRC Project Manager J. Giarrusso, Planning, Preparedness & Nuclear Section Chief, MEMA J. Cope-Flanagan, Assistant General Counsel, MDPU J. Reyes, State of Massachusetts Office of the Attorney General

ATTACHMENT 1 TO BYR 2016-014 DECOMMISSIONING FUNDING STATUS REPORT FOR THE YANKEE NUCLEAR POWER STATION INDEPENDENT SPENT FUEL STORAGE INSTALLATION (STATUS AS OF 12/31/2015) to BYR 2016-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2015) 10 CFR Requirement

Response

[Comment 10 CFR 50.75(f")(1) and (2) Requirements

1. The amount of deconmmissioning ~-$8.6 million 10 CER 50.75(c) provides the calculation basis for determining minimum amounts of funds estimated to be required (in 2015 funding required to demonstrate reasonable assurance of funds for decommissioning.

pursuant to 10 CFR 50.75 (b) and dollars)

However, the methodology does not take into consideration work that has already been (c) completed. In 1993, YAEC commenced decommissioning the power plant. On August 10, 2007, the NRC released most of the formerly licensed land for unrestricted use, shrinking the licensed land to the Independent Fuel Storage Installation (ISFSID. Thus, the only decommissioning activities and decommissioning funding requirements that remain are those associated with the decommissioning of the Yankee Nuclear Power Station ISFSI, which is currently scheduled to occur after the Department of Energy (DOE) removes the irradiated fuel and Greater than Class C (GTCC) waste.

On December 14, 2015, Yankee Atomic Electric Company (YAEC) provided a three-year update to the decommissioning funding plan for the Yankee Nuclear Power Station 1SF SI in accordance with 10 CFR 72.30(c) that included a revised Decommissioning Cost Estimate (DCE) for the Yankee Nuclear Power Station ISFSI.

2. The amount accumulated at the 4$11.4 million YAEC has established an account within its Nuclear Decommissioning Trust (NDT) end of the calendar year preceding (as of entitled "ISFSI Radiological Decom" that segregates the funds for radiological the date of the report for items 12/31/15) decommissioning of the ISFSI from the larger balance of funds for ongoing included in 10 CFR 50.75 management of irradiated fuel and GTCC waste held in the NDT. This market balance (e)(1)(i) only reflects the funds in the segregated account for radiological decommissioning of the ISFSI.

3.

Schedule of the annual amounts

$0 No additional comments.

remaining to be collected Including amounts beyond those required in 10 CFR 50.75(e)(1)(i)

Years to collect N/A Page 1 of 7 to BYR 2016-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2015) 10 CFR Requirement

Response

Comment

4. The assumptions used regarding No additional comments.

escalation of the decommissioning cost estimate, rates of earnings on decommissioning funds, and rates of other factors used in funding projections are:

Annual escalation rate 2.5%

Annual after-tax earnings rate on decommissioning trust funds 4.5%

Other factors assumed None

5.

Any contracts upon which the Yes YAEC may collect funds through its power contracts and amendatory agreements under licensee is relying pursuant to FERC regulation. The power contracts and the amendatory agreements specify the 10 CFR 50.75(e)(1)(ii)(A) obligations of the purchasers for the costs of YAEC, including decommissioning costs.

Such contracts have been filed with FERC.

6.

Any modifications to a licensee's None No additional comments.

current method of providing financial assurance occurring since the last submitted report.______________________________________

7. Any material changes to trust None No additional comments.

agreements.______________________________________

Page 2 of 7 to BYR 2016-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2015) 4 10 CFR Requirement

Response

Comment 10 CFR 50.82(a)(8)(v) (A) through (D) Requirements

1. The amount spent onl In 1993, YAEC commenced decommissioning the power plant. On August 10, 2007, decommissioning, both:

the NRC released most of the formerly licensed land for unrestricted use, shrinking the licensed land to the ISFSI. The only deconmiissioning activities that remain are those Cumulative

$0(ee o associated with the decommissioning of the Yankee Nuclear Power Station ISESI,

$0 (Reer to which is currently scheduled to occur after the DOE removes the irradiated fuel and and Comment)

GTCC waste.

Overtheprevouscalndaryea

$010 CFR 50.82(a)(8)(v) became effective on December 17, 2012. At that time, the only areas that were within the control of the Operating License No. DPR-3 were those associated with the Yankee Nuclear Power Station ISFSI. Thus, YAEC is only presenting the information associated with the decommissioning of the areas that remain within the control of Operating License No. DPR-3.

Presently, YAEC is storing irradiated fuel and GTCC waste on site until it is removed by the DOE. Decommissioning of the Yankee Nuclear Power Station ISFSI is currently scheduled to be completed in calendar year 2032, after the DOE removes the irradiated fuel and GTCC waste. Thus, the cumulative cost spent on decommissioning the Yankee Nuclear Power Station ISFSI is $0, and the amount spent in calendar year 2015 is $0.

2. The remaining balance of any

-$ 11.4 million YAEC has established an account within its NDT entitled "ISFSJ Radiological Decom" decommissioning funds.

(as of that segregates the funds for radiological decommissioning of the ISFSI from the larger 12/31/15) balance of funds for ongoing management of irradiated fuel and GTCC waste held in the NDT. This market balance only reflects the funds in the segregated account for

_____________________________________radiological decommissioning of the 1SF SI.

Page 3 of 7 to BYR 2016-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2015) 10 CFR Requirement

]Response Comment

3. The amount provided by other

$0 As of 12/31/15, YAEC's NDT account entitled "ISFSI Radiological Decom" has a financial assurance methods being balance sufficient to cover the estimated cost of the remaining radiological relied upon decommissioning of the 1SF SI. However, if in the future, the balance in the account is not fully funded to cover the estimated cost of the remaining radiological decommissioning of the ISFSI, the Company has several methods of obtaining additional funds, if required, to cover projected costs.

First, YAEC may collect funds through its power contracts and amendatory agreements under FERC regulation. The power contracts and the amendatory agreements specify the obligations of the purchasers for the costs of YAEC, including decommissioning.

Pursuant to these power contracts, YAEC has the ongoing ability to seek collections from its purchasers for additional funds that may be required to cover these costs.

Second, YAEC has received proceeds from the successful litigation of the first and second phases of its breach of contract damages claims against the DOE for failure to begin the removal of spent nuclear fuel (SNF) and GTCC waste from the site in 1998.

YAEC will continue to file claims against the DOE as long as the DOE continues to breach its contract obligations related to SNF and GTCC waste. To that end, in August, 2013 the Company filed a third round of claims against the DOE seeking damages for the years 2009 - 2012. The phase three trial was held on June 30 and July 1, 2015. Two rounds of post-trial briefings were completed on February 16, 2016, and an oral argument on the second round was held on February 19, 2016. The case is currently with the Judge for a decision. Each of the prospective claims will likely result in the receipt of proceeds that can be used to offset future costs, if required.

Accordingly, YAEC' s most recent FERC filing which was approved in June, 2013, implemented a fifteen year funding mechanism. Until the 2013 FERC filing, the Company had employed a "full funding" assumption in developing funding requirements. The fifteen year funding mechanism was put in place to incorporate the potential for the receipt of future DOE breach of contract damages as a source of funding as discussed below. If future damage recovery does not occur, the Company has Page 4 of 7 to BYR 2016-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2015) 10 CFR Requirement

Response

Comment the ability to apply to FERC for more funding, if necessary. The approved FERC filing also requires YAEC to provide an information filing regarding the adequacy of funding if five years pass without receipt of damage awards from litigation with the DOE.

Third, YAEC expects to utilize the investment return on Decommissioning Trust assets as a funding source. The current assumed rate of investment return, after fees and taxes, is 4.5%.

4. An estimate of the costs to

-'$8.6 million On December 14, 2015, YAEC provided a three-year update to the decommissioning complete decommissioning, (in 2015 funding plan in accordance with 10 CFR 72.3 0(c) that included a revised DCE for the reflecting any difference between dollars)

Yankee Nuclear Power Station ISFSI.

actual and estimated costs for work performed during the year.

5. The decommissioning criteria 10 CFR The assumptions regarding the decommissioning cost estimate are provided in the DCE upon Which the estimate is based 20.1402 for the Yankee Nuclear Power Station ISFSI provided on December 14, 2015.

6.

Any modifications occurring to a None No additional comment.

licensee's current method of providing financial assurance since the last submitted report.

7. Any material changes to trust None No additional comment agreements or financial assurance contracts.

Page 5 of 7 to BYR 2016-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2015) 10 CFR 50.82(a)(8)(vi) Requirement

1. Additional financial assurance None As of 12/31/15, YAEC's NDT account entitled "ISFSI Radiological Decom" has a required to cover the estimate cost balance sufficient to cover the estimated cost of the remaining radiological of completion.

decommissioning of the ISFSI. However, if in the future, the balance in the account is not fully funded to cover the estimated cost of the remaining radiological decommissioning of the 1SF SI, the Company has several methods of obtaining additional funds, if required, to cover projected costs.

First, YAEC may collect funds through its power contracts and amendatory agreements under FERC regulation. The power contracts and the amendatory agreements specify the obligations of the purchasers for the costs of YAEC, including decommissioning.

Pursuant to these power contracts, YAEC has the ongoing ability to seek collections from its purchasers for additional funds that may be required to cover these costs.

Second, YAEC has received proceeds from the successful litigation of the first and second phases of its breach of contract damages claims against the DOE for failure to begin the removal of spent nuclear fuel (SNF) and GTCC waste from the site in 1998.

YAEC will continue to file claims against the DOE as long as the DOE continues to breach its contract obligations related to SNF and GTCC waste. To that end, in August, 2013 the Company filed a third round of claims against the DOE seeking damages for the years 2009 - 2012. The phase three trial was held on June 30 and July 1, 2015. Two rounds of post-trial briefings were completed on February 16, 2016, and an oral argument on the second round was held on February 19, 2016. The case is currently with the Judge for a decision. Each of the prospective claims will likely result in the receipt of proceeds that can be used to offset future costs, if required.

Accordingly, YAEC's most recent FERC filing which was approved in June, 2013, implemented a fifteen year funding mechanism. Until the 2013 FERC filing, the Company had employed a "full funding" assumption in developing funding requirements. The fifteen year funding mechanism was put in place to incorporate the potential for the receipt of future DOE breach of contract damages as a source of funding as discussed below. If future damage recovery does not occur, the Company has Page 6 of 7 to BYR 2016-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2015) the ability to apply to FERC for more funding, if necessary. The approved FERC filing also requires YAEC to provide an information filing regarding the adequacy of funding if five years pass without receipt of damage awards from litigation with the DOE.

Third, YAEC expects to utilize the investment return on Decommissioning Trust assets as a funding source. The current assumed rate of investment return, after fees and taxes, is 4.5%.

Page 7 of 7

-4*

YANKEE ATOMIC ELECTRIC COMPANY 0..

MY Ii__

fl-49 Yankee Road, Rowe, Massachusetts 01367 March 9, 2016 BYR 2016-014 10 CFR 50.4 10 CFR 50.75(f)(1) and (2) 10 CFR 50.82(a)(S)(v) and (vi)

ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 20555 - 0001 Yankee Atomic Electric Company Yankee Nuclear Power Station Independent Spent Fuel Storage Installation NRC License No. DPR-3 (NRC Docket Nos.50-029)

Subject:

Decommissioning Funding Assurance Status Report On February 26, 1992, Yankee Atomic Electric Company (YAEC) informed the USNRC that the Board of Directors of YAEC had decided to permanently cease operations at the Yankee Nuclear

Power Station and that fuel had been permanently removed from the reactor (Reference 1). In accordance with 10 CFR 50.82(a)(2), the certifications in the letter modified the YAEC license to permanently withdraw YAEC's authority to operate the reactor. In 1993, YAEC commenced decommissioning the power plant. On August 10, 2007, the NRC released most of the formerly licensed land for unrestricted use, shrinking the licensed land to the Independent Spent Fuel Storage Installation (1SFSI1) only (Reference 2). The only decommissioning activities that remain are those associated with the decommissioning of the Yankee Nuclear Power Station 1SF SI, which is currently scheduled to occur after the Department of Energy (DOE) removes the irradiated fuel and Greater than Class C (GTCC) waste.

In Attachment 1, YAEC provides the attached Decommissioning Funding Assurance Status Report for the Yankee Nuclear Power Station ISFSI to comply with 10 CFR 50.75(t)(1) and (2) and 10 CFR 50.82(a)(8)(v) and (vi).

This letter contains no regulatory commitments.

"- Yankee Atomic Electric Company BYR 2016-014\\March 9, 2016\\Page 2 If you have any questions regarding this letter, please do not hesitate to contact me at (860) 267-6426 x304.

Rsespectfully, Carla M. Pizzella Vice President, Chief Financial Officer, and Treasurer

Attachment:

1. Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2015)

References:

1. A. C. Kadak (YAEC) letter to USNRC, "Penmanent Cessation of Power Operations at the Yankee Nuclear Power Station," BYR-92-024, dated February 26, 1992

2. USINRC letter to Yankee Atomic Power Company, "Yankee Nuclear Power Station - Release of Land from Part 50 License," dated August 10, 2007 cc:

D. H. Dorman, NRC Region I Administrator R. Powell, Chief, Decommissioning Branch, NRC, Region 1 J. Goshen, NRC Project Manager J. Giarrusso, Planning, Preparedness & Nuclear Section Chief, MEMA J. Cope-Flanagan, Assistant General Counsel, MDPU J. Reyes, State of Massachusetts Office of the Attorney General

ATTACHMENT 1 TO BYR 2016-014 DECOMMISSIONING FUNDING STATUS REPORT FOR THE YANKEE NUCLEAR POWER STATION INDEPENDENT SPENT FUEL STORAGE INSTALLATION (STATUS AS OF 12/31/2015) to BYR 2016-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2015) 10 CFR Requirement

Response

[Comment 10 CFR 50.75(f")(1) and (2) Requirements

1. The amount of deconmmissioning ~-$8.6 million 10 CER 50.75(c) provides the calculation basis for determining minimum amounts of funds estimated to be required (in 2015 funding required to demonstrate reasonable assurance of funds for decommissioning.

pursuant to 10 CFR 50.75 (b) and dollars)

However, the methodology does not take into consideration work that has already been (c) completed. In 1993, YAEC commenced decommissioning the power plant. On August 10, 2007, the NRC released most of the formerly licensed land for unrestricted use, shrinking the licensed land to the Independent Fuel Storage Installation (ISFSID. Thus, the only decommissioning activities and decommissioning funding requirements that remain are those associated with the decommissioning of the Yankee Nuclear Power Station ISFSI, which is currently scheduled to occur after the Department of Energy (DOE) removes the irradiated fuel and Greater than Class C (GTCC) waste.

On December 14, 2015, Yankee Atomic Electric Company (YAEC) provided a three-year update to the decommissioning funding plan for the Yankee Nuclear Power Station 1SF SI in accordance with 10 CFR 72.30(c) that included a revised Decommissioning Cost Estimate (DCE) for the Yankee Nuclear Power Station ISFSI.

2. The amount accumulated at the 4$11.4 million YAEC has established an account within its Nuclear Decommissioning Trust (NDT) end of the calendar year preceding (as of entitled "ISFSI Radiological Decom" that segregates the funds for radiological the date of the report for items 12/31/15) decommissioning of the ISFSI from the larger balance of funds for ongoing included in 10 CFR 50.75 management of irradiated fuel and GTCC waste held in the NDT. This market balance (e)(1)(i) only reflects the funds in the segregated account for radiological decommissioning of the ISFSI.

3.

Schedule of the annual amounts

$0 No additional comments.

remaining to be collected Including amounts beyond those required in 10 CFR 50.75(e)(1)(i)

Years to collect N/A Page 1 of 7 to BYR 2016-014 Decommissioning Funding Status Report for the Yankee Nuclear Power Station Independent Spent Fuel Storage Installation (Status as of 12/31/2015) 10 CFR Requirement