ML17097A557

Callaway, Unit 1 - Enclosure 1 to ULNRC-06349 - NRC Decommissioning Funding Status Report - 2017

ML17097A557
Person / Time
Site:	Callaway
Issue date:	03/30/2017
From:	Ameren Missouri
To:	Office of Nuclear Reactor Regulation
Shared Package
ML17097A555	List: ML17097A556 ML17097A557 ML17097A558 ML17097A559 ML17097A560 ML17097A561 ML17097A562 ML17097A563 ML17097A564 ML17097A565 ML17097A566 ML17097A567 ML17097A568 ULNRC-06349, Callaway, Unit 1 - Document A22-1690-001, Rev. 0, Decommissioning Cost Analysis for the Callaway Energy Center, Section 3, Page 14 of 30 - Section 5, Page 2 of 6 ULNRC-06349, Callaway, Unit 1 - Enclosure 1 to ULNRC-06349 - NRC Decommissioning Funding Status Report - 2017 ULNRC-06349, Callaway, Unit 1 - Enclosure 2 to ULNRC-06349 - Minimum Decommissioning Cost - Per 10 CFR 50.75 Formula Process ULNRC-06349, Callaway, Unit 1 - Enclosure 3 - Document A22-1690-001, Rev. 0, Decommissioning Cost Analysis for the Callaway Energy Center, Decommissioning Alternatives, Section 2, Pages 1 of 12 - Section 3 Page 13 of 30 ULNRC-06349, Callaway, Unit 1 - Enclosure 3 to ULNRC-06349 - Document A22-1690-001, Rev. 0, Decommissioning Cost Analysis for the Callaway Energy Center, Appendix C, Page 4 of 10 - Appendix E, Page 7 of 10 ULNRC-06349, Callaway, Unit 1 - Enclosure 3 to ULNRC-06349 - Document A22-1690-001, Rev. 0, Decommissioning Cost Analysis for the Callaway Energy Center, Appendix E, Page 8 of 10 - Appendix G, Page 11 of 14 ULNRC-06349, Callaway, Unit 1 - Enclosure 3 to ULNRC-06349 - Document A22-1690-001, Rev. 0, Decommissioning Cost Analysis for the Callaway Energy Center, Appendix G, Page 12 of 14 - Appendix H, Page 20 of 20 ULNRC-06349, Callaway, Unit 1 - Enclosure 3 to ULNRC-06349 - Document A22-1690-001, Rev. 0, Decommissioning Cost Analysis for the Callaway Energy Center, Cover Page - Section 1, Page 8 of 8 ULNRC-06349, Callaway, Unit 1 - Enclosure 3 to ULNRC-06349 - Document A22-1690-001, Rev. 0, Decommissioning Cost Analysis for the Callaway Energy Center, Section 5, Page 3 of 6 - Appendix C, Page 3 of 10 ULNRC-06349, Callaway, Unit 1 - Enclosure 4 to ULNRC-06349 - Statement of Net Assets Available for Benefits ULNRC-06349, Callaway, Unit 1 - Enclosure 6 to ULNRC-06349 - Non-Unanimous Stipulation and Agreement ULNRC-06349, Callaway, Unit 1 - Status of Decommissioning Funding ULNRC-06349, Enclosure 7 - Order Approving Stipulation and Agreement ULNRC-06349, joy-nv Callaway, Unit 1 - Enclosure 5 to ULNRC-06349 - Application for Approval of Decommissioning Cost Estimate for Callaway Energy Center and Funding Level of Nuclear Decommissioning Trust Fund
References
ULNRC-06349
Download: ML17097A557 (9)

Text

ULNRC-06349 Enclosure IPage1of9NRCDecommissioning FundingStatusReport-201710CfR5O.75(f)(1) requireseachpowerreactorlicenseetoreporttotheNRConacalendaryearbasis,beginning onMarch31,1999,andevery2yearsthereafter, onthestatusofitsdecommissioning fundingforeachreactororshareofreactor itowns.UnionElectricCompanydlb/aAmerenMissouri("AmerenMissouri")

herebyreportsthedecommissioning fundingstatusforitsCallawayPlant("Callaway EnergyCenter").

ThescopeoftheAmerenMissouri2017NRCBiennialDecommissioning FundingStatusReportspecifically pertainsonlytothedecommissioning fundingstatusoftheCallawayEnergyCenter,or"plant".Decommissioning fundingfortheindependent spentfuelstorageinstallation (ISFSI)willbefileintheupdateddecommissioning fundingstatusreportfortheISFSIduein2018.AmerenMissouriisrequiredtofileupdatestodecommissioning costestimates andfundingadequacyprojections onatriennial basiswiththeMissouriPublicServiceCommission (MPSC)discussed morefullyinSection2,below.Thescopeofthesetriennial filingsincludesboththeplantandtheISFSI.AmerenMissouriobtainsseparateupdatedsite-specific decommissioning costestimates andpreparesseparateupdatedfundingadequacyanalysesfortheplantandfortheISfSIfortheMPSCtriennial filings.Whenmakingthesefilings,AmerenMissourirequeststhattheMPSCaddresstheplantandISfSIseparately intheirordersissuedpursuanttothefilings.Thedecommissioning trustfundestablished byAmerenMissourihasseparate, segregated sub-accounts forplantandISfSIdecommissioning funding.Thesitespecificdecommissioning studyreferenced inAmerenMissouri's 2017NRCbiennialdecommissioning fundingstatusreportisprovidedforinformation only.Thissitespecificstudywaspartofthedocumentation presented totheMPSCintheCompany's 2014MPSCtriennial updatefiling.Forthisreport,AmerenMissouriisusingtheNRCthreefactorformulafordetermining decommissioning fundingadequacy.

I.AmountofDecommissioning FundsEstimated tobeRequiredPursuantto10CFR50.75(b)and(c)Forthepurposesofthis2017NRCbiennialplantdecommissioning fundingstatusreport,AmerenMissouriisusingthe"three-factor formula"specified in10CFR50.75(b)and(c)'fordetermining decommissioning fundingadequacy.

Theminimumdecommissioning costestimate, pursuanttothe10CFR50.75(b)and(c)methodology, is$492,019,000, intermsof2016dollars.Thedetailedcalculations fromwhichtheaboveestimateisderivedarecontained inEnclosure

2.

ULNRC-06349

.Enclosure 1Page2of9AmerenMissourialsohassitespecificdecommissioning costestimates fordecommissioning oftheCallawayEnergyCenterpreparedbyTLGServices, Inc.ofBridgewater, Connecticut.

Thespecificstudiesareconducted tocomplywithMissouriLaw:4CSR240-3.185 Submission ofReports Pertaining totheDecommissioning ofElectricUtilityPlants(3)OnorbeforeSeptember 1,1990andeverythree(3)yearsafterthat,utilities withdecommissioning trustfundsshallperformandfilewiththecommission coststudiesdetailing theutilities' latestcostestimates fordecommissioning theirnucleargenerating unit(s)alongwiththefundinglevelsnecessary todefraythesedecommissioning costs.Thesestudiesshallbefiledalongwithappropriate tariff(s) effectuating thechangeinratesnecessary toaccomplish thefundingrequired.

Inaddition, thecommission, atanytimeforjustcause,mayrequireautilitytofileanupdateddecommissioning coststudy,fundingrequirement andassociated tariff(s).

Thecurrentsite-specific analysisapprovedbytheMPSCwasperformed inMarch,2015.Itcalculated adecommissioning costestimateof$864,734,000 intermsof2014dollars.2 AmerenMissouriconsiders thissite-specific decommissioning costestimateof$864,734,000 astheestimateforwhichfundingadequacymustbeassuredforMPSCfundingadequacypurposes.

Duetoitssite-specific nature,itisamoreaccurateestimateofprojected decommissioning costs.Thesite-specific estimateisconsidered moreconservative asitincludesnon-radiological siterestoration expensesandspentfuelmanagement

expenses, inadditiontoradiological licensetermination expenses.

Inthe2015study,approximately 80.10%($692,622,000) ofthe$864,734,000 site-specific costestimateisassociated withphysicaldecontamination anddismantling ofradloactive systemsandstructures suchthatthelicensecanbeterminated.

Management andtransferofspentfuelaccountsfor6.67%($57,716,000) ofthesitespecificcostestimate.

Theremaining 13.23%($114,396,000) isfordemolition ofdesignated non-radioactive structures andlimitedsiterestoration.

Thesestudiesareconsidered snapshotsofthedecommissioning costandareusedtodetermine ifanychangesarerequiredinthecontributions tothedecommissioning fund.Duetothecomplexity ofthestudytheuseofanycostescalation factorswouldintroduce considerable uncertainty intotheescalated cost.Sincethisstudyisconducted everythreeyears,Amerendoesnotescalatethestudycostestimates fortheyearsbetweenstudyperiods.Aninformational onlycopyofthe2015Site-Specific Decommissioning CostAnalysisfortheCallawayEnergyCenterisprovidedinEnclosure

3.

ULNRC-06349

.Enclosure 1Page3of92.AmountofDecommissioning FundsAccumulated totheEndoftheCalendarYearPreceding theDateofthisReportThetotalamountaccumulated inthedecommissioning fundasofDecember31,2016is$557,359,488.46.

Thisisan"aftertaxliquidation value"whichreflectsthefinalfundsthatwouldbereceiveduponliquidation ofthefund'sassetsandthepaymentofincometaxesonrealizedcapitalgains.Thisiscalculated asfollows:3 MissourifERCTOTALJurisdictional Jurisdictional OverallSubaccount Subaccount fundMarketValue:$590,948,957.89

$15,527,076.47

$606,476,034.36 Less:BookValue:350,999,418.94 9,893,885.90 360,893,304.84 Equals:Unrealized Gain:$239,949,538.95

$5,633,190.57

$245,582,729.52 IncomeTaxonUnrealized Gain@20%Rate:$47,989,907.79

$1,126,638.1 1$49,116,545.90 After-Tax Liquidation Value:$542,959,050.10

$14,400,438.36

$557,359,488.46 Copiesofthetrustee's "Statement ofNetAssetsAvailable forBenefits" asofDecember31,2016confirming theforegoing valuation amountsisprovidedinEnclosure 4.Thisdecommissioning fundbalanceindicated aboveisatotalamountintendedtocoverthefullgreen-fielding ofthesite.Thefundsinthetrustfundarenotsegregated intosub-accounts forradiological decommissioning versusnon-radiological decommissioning.

Basedontheallocation percentages contained inthe2015sitespecificdecommissioning costestimate, thedollaramountsoftheoveralltrustfundallocated forthedecommissioning costcategories canbederived:Licensetermination:

80.10%of$557,359,428

=$446,444,950 SpentFuelManagement:

6.67%of$557,359,488

$37,175,878 SiteRestoration:

13.23%of$557,359,488

$73,738,660 Missouri's definition ofdecommissioning encompasses boththeradiological andnon-radiological structures, systemsandcomponents oftheplant,asstatedinthefollowing sectionfromtheMissouriCodeofStateRegulations:

ULNRC-06349 Enclosure IPage4of94CSR240-20.070 Decommissioning Trustfunds(1)Asusedinthisrule,decommissioning meansthoseactivities undertaken inconnection withanucleargenerating unit'sretirement fromservicetoensurethatthefinalremoval,disposal, entombment orotherdisposition oftheunitandofanyradioactive components andmaterials associated withtheunit,areaccomplished incompliance withallapplicable laws,andtoensurethatthefinaldisposition doesnotposeanyunduethreattothepublichealthandsafety.Decommissioning includestheremovalanddisposalofthestructures, systemsandcomponents ofanucleargenerating unitatthetimeofdecommissioning.

Missourilawrequirestriennial updatesofthedecommissioning costestimateandoffundingadequacy.

Missourilawalsoprovidesforthechangingofrateschargedtoratepayers torecoveranychangesinfundinglevelsnecessitated bythetriennial updateanalyses.

forthesereasons,AmerenMissouriconsiders theamountinthefundtobefullyadequatetocoverradiological decommissioning withanexcessthatcouldbeappliedtonon-radiological decommissioning.

Thetriennial updateprocessrequiredbyMissouristatutesisconsidered adequatetoensurethatanyfundingshortfalls willbeaddressed andcorrected inatimelymanner.Theapplicable sectionsfromtheMissouriCodeofStateRegulations areasfollows:4CSR240-3.185 Submission ofReports Pertaining totheDecommissioning ofElectricUtilityPlants(3)OnorbeforeSeptember 1,1990andeverythree(3)yearsafterthat,utilities withdecommissioning trustfundsshallperformandfilewiththecommission coststudiesdetailing theutilities' latestcostestimates fordecommissioning theirnucleargenerating unit(s)alongwiththefundinglevelsnecessary todefraythesedecommissioning costs.Thesestudiesshallbefiledalongwithappropriate tariff(s) effectuating thechangeinratesnecessary toaccomplish thefundingrequired.

Inaddition, thecommission, atanytimeforjustcause,mayrequireautilitytofileanupdateddecommissioning coststudy,fundingrequirement andassociated tariff(s).

4CSR240-20.070 Decommissioning Trustfunds(7)Uponthefilingoftheappropriate tariff(s) assetin4CSR240-3.180, thecommission shallestablish ascheduleofproceedings whichshallbelimitedinscopetothefollowing issues:(A)Theextentofanychangeinthelevelorannualaccrualoffundingnecessary fortheutility's decommissioning trustfund;and(B)Thechangesinrateswhichwouldreflectanychangeinthefundingleveloraccrualrate.

ULNRC-06349 Enclosure 1Page5of9Inpasttriennial filings,theMPSChasacceptedthesitespecificdecommissioning costestimates andthefundingadequacyanalysesbasedonfullgreenfieldingoftheunit,aswouldbeindicated underMissouri's legaldefinition ofdecommissioning.

Thereisnobasisforassuminganychangeinthispracticeinthefuture.Consequently, itcanbeconsidered thatthetrustfundbalanceindicated isatotalbalance,notsegregated onthebasisofradiological versusnon-radiological funding.AstheMissourimechanism forassuringfundingadequacyandforrecovering decommissioning expensesfromratepayers includesthenon-radiological decommissioning expensesaswellastheradiological

expenses, itisnotnecessary tosegregate thedecommissioning fundbalances.

Anyshortfalls infundingforfullgreenfieldingareexpectedtoberecovered fromratepayers aspartofthetriennial fundingadequacyupdatingprocess.3.ScheduleoftheAnnualAmountsRemaining tobeCollected:

AsofDecember31,2016,thescheduleoftheannualdecommissioning expenseamountsremaining tobecollected fromratepayers is$6,314,620peryearforyears2017throughyear2043and$5,047,370.92 foryear2044.Astheoperating licenseexpiresOctober18,2044anddecommissioning expensecollections fromratepayers areassumedtoceaseuponthecessation ofplantoperations, 2044isa"partialyear"forcollection andfundingpurposes, withtheannualamountbeingpro-rated forthreecalendarquarterspluseighteendays:(75%x$6,314,620)

+[(18/365) x$6,314,620]

$5,047,370.92 Thefundingadequacyanalysisperformed byAmerenMissouriandapprovedbytheMPSCisbasedoncashflowsdeposited intothedecommissioning trustfund.Quarterly depositsintothefundaremadeonthe25thofthemonthfollowing eachquarter-end.

Therefore, eachyear'scashcontributions tothedecommissioning fundwillreflecttheexpensecollected fromratepayers fromQ4ofthepreceding yearplusthatforQI,Q2andQ3ofthecurrentyear.forthatreason,whenlookingatthefundingadequacyanalysisperformed fortheplant,the"AnnualCashInflowFromContributions ToFund"valuefortheyear2044willindicate$6,626,026.

Thatrepresents theexpensecollected fromratepayers forQ4of2043plustheprorated$5,047,370.92 fortheJanuary1,2044throughOctober18,2044,calculated above.4.ActionsbyRegulatory RateSettingAuthorities, Assumptions UsedRegarding RatesofEscalation inDecommissioningCosts, RatesofEarningsonDecommissioning Funds,andRatesofOtherFactorsUsedinFundingProlections:

ULNRC-06349 Enclosure 1Page6of9Inaccordance withthepreviously cited4CSR240-3.185 requirement, AmerenMissouriwasrequiredtofileanupdateddecommissioning costestimateandfundingadequacyanalysiswiththeMPSCbySeptember 1,2014.However,duetotheanticipated NRCapprovalofAmerenMissouri's licenseextension application withinashorttimeframefollowing thefilingduedate,AmerenMissouriandtheMP$CStaffconcurred thatitwouldbeappropriate todeferthisfilinguntiltheoperating licenseextension wasapproved.

OnMarch6,2015,theNRCapprovedtheCompany's application fora20-yearoperating licenseextension OnApril1,2015,AmerenMissourifiledits"Application forApprovalofDecommissioning CostEstimateforCallawayEnergyCenterandFundingLevelofNuclearDecommissioning Trustfund"(FileNo.E0-2015-0253).

Attachment 1tothisapplication contained theMarch,2015decommissioning costestimatefortheCallawayEnergyCenter.Attachment 2totheapplication contained AmerenMissouri's analysisoftherequiredfundinglevelforthedecommissioning trustfund,including allofthefinancial andeconomicassumptions onwhichthefundinganalysiswasbased.Acopyoftheapplication anditsAttachment 2isprovidedinEnclosure 54PriortotheMPSCissuinganOrderinthecase,theISFSIwascompleted anditwasrecognized thattheMarch2015sitespecificdecommissioning costestimatedidnotincludeanycostsforISFSIdecommissioning.

AmerenMissouriandtheMPSCStaffenterintoa"Non-Unanimous Stipulation andAgreement" toaddressing thecomponents ofplantdecommissioning thathadbeencoveredintheApril1,2015filingandtheadditional scopeoftheISFSIdecommissioning.

Arevisedfundingadequacyanalysiswasdeveloped separately addressing thefundingadequacyofbothplantandISfSIdecommissioning.

OnMarch14,2016,this"Non-Unanimous Stipulation andAgreement" wasfiledwiththeMPSCandwasrevisedonMarch30,2016tocorrectcertainclericalerrors.Acopyofthefinal"Non-Unanimous Stipulation andAgreement" andassociated fundingadequacyanalysisisprovidedinEnclosure 6.OnApril6,2016,theMPSCissuedan"OrderApproving Stipulation andAgreement" (effective May6,2016).IntheOrder,theMPSCapprovedthethefollowing actuarial assumptions usedinbyAmerenMissouriinitsreviseddecommissioning fundingadequacyanalysisfiledwiththe"Non-Unanimous Stipulation andAgreement":6

.TheMissourijurisdictional allocator is100%..Thefederalincometaxrateis20%..Thestateincometaxrateis0%..Thecomposite federal&stateincometaxrateis20%..Anassetallocation of65%equitiesand35%bondsisassumedtoexistthrough2043,atwhichtimeallequityinvestments willbedivested.

.Investment management andtrustfeesareestimated at15basispointsannually.

.Aninflation rateof2.300%isassumedforgeneral("CPI")inflation.

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ULNRC-06349 Enclosure 1Page7of9.Thepre-tax&expensenominalreturnonbondsisassumedtobe3.400%..Thepre-tax&expenserealreturnonbondsisassumedtobe1.100%.Thepre-tax&expensenominalreturnonequitiesisassumedtobe8.500%..Thepre-tax&expenserealreturnonequitiesisassumedtobe6.200%.Thepre-tax&expensenominalweighted-average returnisassumedtobe6.715%throughthe2043dateofdivestiture ofequityinvestments.

.Thepre-tax&expenserealweighted-average returnisassumedtobe4.415%throughthe2043dateofdivestiture ofequityinvestments.

.Thepre-tax&expenserealweighted-average returnisassumedtobe1.100%following the2043dateofdivestiture ofequityinvestments.

Basedontheforegoing assumptions, theanticipated annualdecommissioning contributions wouldbeadequateuptoanannualdecommissioning inflation rateof3.5864%.Theannualized rateofeamingondecommissioning fundreturn(pre-taxandfee)requiredattheabovelevelofinflation is6.242%.AcopyoftheMPSC"OrderApproving Stipulation andAgreement" isprovidedinEnclosure 7.5.AnyContracts UponWhichtheLicenseeisRelyingonPursuantto10CFR50.75(E)(L)(V):

None6.AnyModifications Occurrin%

toaLicensee's CurrentMethodofProviding Financial Assurance SincetheLastSubmitted Report:None.TheCompanyhasusedthe"External Sinkingfund"methodsinceI985.7.AnyMaterialChangestoTrustAgreements:

Therehavebeennomaterialchangestothequalified trustagreement sincethelastreport.Thenon-qualified trustthatwasrequiredbyIllinoishasbeeneliminated, asAmerenMissourinolongerhascustomers inIllinois.

Thisnon-qualified trustwasneverfunded7.8.References 1.ULNRC-06201, "STATUSOFDECOMMISSIONING FUNDING,"

datedMarch30,2015 ULNRC-06349 Enclosure 1.Page8of91TheNRCformulasinsection10CfR50.75(c)includeonlythosedecommissioning costsincurredbylicensees toremoveafacilityorsitesafelyfromserviceandreduceresidualradioactivity tolevelsthatpermit:(1)releaseofthepropertyforunrestricted useandtermination ofthelicense;or(2)releaseofthepropertyunderrestricted conditions andtermination ofthelicense.Thecostofdismantling ordemolishing non-radiological systemsandstructures andthecostsofmanaging andstoringspentfuelonsiteuntiltransfertoDOEarenotincludedinthe10CfR50.75(c)costformulas.

2Thisestimateisapplicable tothe60-yearoperating life,DECONdecommissioning alternative

scenario, andispresented inAppendixGoftheMarch,2015sitespecificdecommissioning costestimate.

ThisistheoptionAmerenMissouriintendstoutilizeforplantdecommissioning.

3Thevaluations oftheMissouriandFERCjurisdictional subaccounts areutilizedinthisreporttocalculate thetotalvaluation oftheplantdecommissioning fundasthetruststatements producedbythetrusteedonotincludeaconsolidated reportthatdoesnotincludetheISfSIdecommissioning subaccounts.

Consequently, toprovidesupporting documentation, itwasnecessary toprovidethetruststatements forthetwocomponent plantdecommissioning funds:theMissouriandFERCsubaccounts andsumtheirvaluations.

4TheMarch,2015sitespecificdecommissioning costestimate(Attachment 1tothe"Application forApprovalofDecommissioning CostEstimateforCallawayEnergyCenterandFundingLevelofNuclear Decommissioning Trustfund")isprovidedinEnclosure 3tothisreport.SAttachments tothe"Non-Unanimous Stipulation andAgreement" thatarenotrelevanttothedecommissioning fundingstatusoftheplantwerenotincludedinEnclosure 7.Specifically, theseweretheISFSIdecommissioning costanalysisandtheupdatedinvestment guidelines forthedecommissioning fundforwhichapprovalwasbeingrequested.

6ThefundingadequacyanalysisfiledwiththeMPSCbytheCompanyinthisCaseNo.E0-2015-0253 wasbasedontheindicated returnassumptions.

TheMPSCorderinthiscaseapprovedtheproposedannualMissouricontribution levelof6,314,620,effective January1,2016.Atthetimeofthisupdatefiling,theMissourijurisdiction isresponsible for100%ofthedecommissioning liability.

7onFebruary10,2005,theMPSCapprovedAmerenMissouri's proposedtransferofitsIllinoiselectricandgasproperties toanIllinoisaffiliate, AmerenIllinois.

TheclosingdateforthepropertytransferwasMay2,2005.Inaccordance withtheMPSCOrder,thetax-qualified decommissioning trust'sIllinoisjurisdictional sub-account waseliminated following theclosing.Ninety-eight percentoftheassetsintheexistingIllinoissubaccount asoftheclosingdatewerereallocated totheMissourisub-account andthe ULNRC-06349 Enclosure 1Page9of9remaining twopercentwerereallocated totheWholesale sub-account.

Asaresultofthetransfer, AmerenMissourinolongerhasanyIllinoisratepayers andwillnolongercollectdecommissioning contributions inIllinoisforitsCallawayPlant,whichislocatedinMissouri.

Thedecommissioning liability previously bornebytheIllinoisratepayers wastransferred toAmerenMissouriandWholesale customers.

Decommissioning expensescollected fromMissourijurisdictional ratepayers wasincreased by$272,194annuallyinaccordance withtheMPSCOrdertoaccountfortheincreased decommissioning liability bornebytheMissouriratepayers following thepropertytransfer.

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