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{{Adams
#REDIRECT [[ULNRC-06349, Callaway, Unit 1 - Enclosure 1 to ULNRC-06349 - NRC Decommissioning Funding Status Report - 2017]]
| number = ML17097A557
| issue date = 03/30/2017
| title = Callaway, Unit 1 - Enclosure 1 to ULNRC-06349 - NRC Decommissioning Funding Status Report - 2017
| author name =
| author affiliation = Ameren Missouri
| addressee name =
| addressee affiliation = NRC/NRR
| docket = 05000483
| license number = NPF-030
| contact person =
| case reference number = ULNRC-06349
| package number = ML17097A555
| document type = Status Report
| page count = 9
}}
 
=Text=
{{#Wiki_filter:ULNRC-06349 Enclosure I Page 1 of9 NRC Decommissioning Funding Status Report-2017 10 CfR 5O.75(f)(1) requires each power reactor licensee to report to the NRC on a calendar year basis, beginning on March 3 1, 1999, and every 2 years thereafter, on the status of its decommissioning funding for each reactor or share ofreactor it owns.Union Electric Company dlb/a Ameren Missouri ("Ameren Missouri")
hereby reports the decommissioning funding status for its Callaway Plant ("Callaway Energy Center").The scope ofthe Ameren Missouri 2017 NRC Biennial Decommissioning Funding Status Report specifically pertains only to the decommissioning funding status ofthe Callaway Energy Center, or"plant".Decommissioning funding for the independent spent fuel storage installation (ISFSI)will be file in the updated decommissioning funding status report for the ISFSI due in 2018.Ameren Missouri is required to file updates to decommissioning cost estimates and funding adequacy projections on a triennial basis with the Missouri Public Service Commission (MPSC)discussed more fully in Section 2, below.The scope of these triennial filings includes both the plant and the ISFSI.Ameren Missouri obtains separate updated site-specific decommissioning cost estimates and prepares separate updated funding adequacy analyses for the plant and for the ISfSI for the MPSC triennial filings.When making these filings, Ameren Missouri requests that the MPSC address the plant and ISfSI separately in their orders issued pursuant to the filings.The decommissioning trust fund established by Ameren Missouri has separate, segregated sub-accounts for plant and ISfSI decommissioning funding.The site specific decommissioning study referenced in Ameren Missouri's 2017 NRC biennial decommissioning funding status report is provided for information only.This site specific study was part ofthe documentation presented to the MPSC in the Company's 2014 MPSC triennial update filing.For this report, Ameren Missouri is using the NRC three factor formula for determining decommissioning funding adequacy.I.Amount of Decommissioning Funds Estimated to be Required Pursuant to 10 CFR 50.75 (b)and (c)For the purposes ofthis 2017 NRC biennial plant decommissioning funding status report, Ameren Missouri is using the"three-factor formula"specified in 10 CFR 50.75(b)and (c)'for determining decommissioning funding adequacy.The minimum decommissioning cost estimate, pursuant to the 10 CFR 50.75(b)and (c)methodology, is$492,019,000, in terms of2016 dollars.The detailed calculations from which the above estimate is derived are contained in Enclosure 2.
ULNRC-06349
.Enclosure 1 Page 2 of 9 Ameren Missouri also has site specific decommissioning cost estimates for decommissioning ofthe Callaway Energy Center prepared by TLG Services, Inc.of Bridgewater, Connecticut.
The specific studies are conducted to comply with Missouri Law: 4 CSR 240-3.185 Submission ofReports Pertaining to the Decommissioning of Electric Utility Plants (3)On or before September 1 , 1990 and every three (3)years after that, utilities with decommissioning trust funds shall perform and file with the commission cost studies detailing the utilities' latest cost estimates for decommissioning their nuclear generating unit(s)along with the funding levels necessary to defray these decommissioning costs.These studies shall be filed along with appropriate tariff(s)effectuating the change in rates necessary to accomplish the funding required.In addition, the commission, at any time forjust cause, may require a utility to file an updated decommissioning cost study, funding requirement and associated tariff(s).
The current site-specific analysis approved by the MPSC was performed in March, 2015.It calculated a decommissioning cost estimate of$864,734,000 in terms of 2014 dollars.2 Ameren Missouri considers this site-specific decommissioning cost estimate of$864,734,000 as the estimate for which funding adequacy must be assured for MPSC funding adequacy purposes.Due to its site-specific nature, it is a more accurate estimate of projected decommissioning costs.The site-specific estimate is considered more conservative as it includes non-radiological site restoration expenses and spent fuel management expenses, in addition to radiological license termination expenses.In the 2015 study, approximately 80.10%($692,622,000) ofthe$864,734,000 site-specific cost estimate is associated with physical decontamination and dismantling ofradloactive systems and structures such that the license can be terminated.
Management and transfer of spent fuel accounts for 6.67%($57,716,000) ofthe site specific cost estimate.The remaining 13.23%($114,396,000) is for demolition ofdesignated non-radioactive structures and limited site restoration.
These studies are considered snap shots of the decommissioning cost and are used to determine if any changes are required in the contributions to the decommissioning fund.Due to the complexity of the study the use of any cost escalation factors would introduce considerable uncertainty into the escalated cost.Since this study is conducted every three years, Ameren does not escalate the study cost estimates for the years between study periods.An informational only copy ofthe 2015 Site-Specific Decommissioning Cost Analysis for the Callaway Energy Center is provided in Enclosure 3.
ULNRC-06349
.Enclosure 1 Page 3 of 9 2.Amount ofDecommissioning Funds Accumulated to the End ofthe Calendar Year Preceding the Date of this Report The total amount accumulated in the decommissioning fund as of December 3 1, 2016 is$557,359,488.46.
This is an"after tax liquidation value"which reflects the final funds that would be received upon liquidation ofthe fund's assets and the payment of income taxes on realized capital gains.This is calculated as follows:3 Missouri fERC TOTAL Jurisdictional Jurisdictional Overall Subaccount Subaccount fund Market Value:$590,948,957.89
$1 5,527,076.47
$606,476,034.36 Less: Book Value: 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 Income Tax on Unrealized 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 Copies ofthe trustee's"Statement ofNet Assets Available for Benefits"as of December 3 1, 2016 confirming the foregoing valuation amounts is provided in Enclosure 4.This decommissioning fund balance indicated above is a total amount intended to cover the full green-fielding ofthe site.The funds in the trust fund are not segregated into sub-accounts for radiological decommissioning versus non-radiological decommissioning.
Based on the allocation percentages contained in the 2015 site specific decommissioning cost estimate, the dollar amounts ofthe overall trust fund allocated for the decommissioning cost categories can be derived: License termination:
80.10%of$557,359,428
=$446,444,950 SpentFuelManagement:
6.67%of$557,359,488
$37,175,878 Site Restoration:
13.23%of$557,359,488
$73,738,660 Missouri's definition of decommissioning encompasses both the radiological and non-radiological structures, systems and components ofthe plant, as stated in the following section from the Missouri Code of State Regulations:
ULNRC-06349 Enclosure I Page 4 of 9 4 CSR 240-20.070 Decommissioning Trust funds (1)As used in this rule, decommissioning means those activities undertaken in connection with a nuclear generating unit's retirement from service to ensure that the final removal, disposal, entombment or other disposition ofthe unit and of any radioactive components and materials associated with the unit, are accomplished in compliance with all applicable laws, and to ensure that the final disposition does not pose any undue threat to the public health and safety.Decommissioning includes the removal and disposal ofthe structures, systems and components of a nuclear generating unit at the time of decommissioning.
Missouri law requires triennial updates ofthe decommissioning cost estimate and of funding adequacy.Missouri law also provides for the changing of rates charged to ratepayers to recover any changes in funding levels necessitated by the triennial update analyses.for these reasons, Ameren Missouri considers the amount in the fund to be fully adequate to cover radiological decommissioning with an excess that could be applied to non-radiological decommissioning.
The triennial update process required by Missouri statutes is considered adequate to ensure that any funding shortfalls will be addressed and corrected in a timely manner.The applicable sections from the Missouri Code of State Regulations are as follows: 4 CSR 240-3.185 Submission ofReports Pertaining to the Decommissioning of Electric Utility Plants (3)On or before September 1, 1990 and every three (3)years after that, utilities with decommissioning trust funds shall perform and file with the commission cost studies detailing the utilities' latest cost estimates for decommissioning their nuclear generating unit(s)along with the funding levels necessary to defray these decommissioning costs.These studies shall be filed along with appropriate tariff(s)effectuating the change in rates necessary to accomplish the funding required.In addition, the commission, at any time forjust cause, may require a utility to file an updated decommissioning cost study, funding requirement and associated tariff(s).
4 CSR 240-20.070 Decommissioning Trust funds (7)Upon the filing ofthe appropriate tariff(s)as set in 4 CSR 240-3.180, the commission shall establish a schedule ofproceedings which shall be limited in scope to the following issues: (A)The extent of any change in the level or annual accrual of funding necessary for the utility's decommissioning trust fund;and (B)The changes in rates which would reflect any change in the funding level or accrual rate.
ULNRC-06349 Page5of9 In past triennial filings, the MPSC has accepted the site specific decommissioning cost estimates and the funding adequacy analyses based on full green fielding of the unit, as would be indicated under Missouri's legal definition of decommissioning.
There is no basis for assuming any change in this practice in the future.Consequently, it can be considered that the trust fund balance indicated is a total balance, not segregated on the basis of radiological versus non-radiological funding.As the Missouri mechanism for assuring funding adequacy and for recovering decommissioning expenses from ratepayers includes the non-radiological decommissioning expenses as well as the radiological expenses, it is not necessary to segregate the decommissioning fund balances.Any shortfalls in funding for full green fielding are expected to be recovered from ratepayers as part ofthe triennial funding adequacy updating process.3.Schedule ofthe Annual Amounts Remaining to be Collected:
As of December 3 1, 2016, the schedule of the annual decommissioning expense amounts remaining to be collected from ratepayers is$6,3 14,620 per year for years 2017 through year 2043 and$5,047,370.92 for year 2044.As the operating license expires October 18, 2044 and decommissioning expense collections from ratepayers are assumed to cease upon the cessation of plant operations, 2044 is a"partial year"for collection and funding purposes, with the annual amount being pro-rated for three calendar quarters plus eighteen days: (75%x$6,314,620)
+[(18/365)x$6,314,620]
$5,047,370.92 The funding adequacy analysis performed by Ameren Missouri and approved by the MPSC is based on cash flows deposited into the decommissioning trust fund.Quarterly deposits into the fund are made on the 25th ofthe month following each quarter-end.
Therefore, each year's cash contributions to the decommissioning fund will reflect the expense collected from ratepayers from Q4 of the preceding year plus that for QI, Q2 and Q3 ofthe current year.for that reason, when looking at the funding adequacy analysis performed for the plant, the"Annual Cash Inflow From Contributions To Fund"value for the year 2044 will indicate$6,626,026.
That represents the expense collected from ratepayers for Q4 of 2043 plus the prorated$5,047,370.92 for the January 1, 2044 through October 1 8, 2044, calculated above.4.Actions by Regulatory Rate Setting Authorities, Assumptions Used Regarding Rates of Escalation in DecommissioningCosts, Rates of Earnings on Decommissioning Funds, and Rates of Other Factors Used in Funding Prolections:
ULNRC-06349  Page 6 of 9 In accordance with the previously cited 4 CSR 240-3.185 requirement, Ameren Missouri was required to file an updated decommissioning cost estimate and funding adequacy analysis with the MPSC by September 1, 2014.However, due to the anticipated NRC approval ofAmeren Missouri's license extension application within a short time frame following the filing due date, Ameren Missouri and the MP$C Staff concurred that it would be appropriate to defer this filing until the operating license extension was approved.On March 6, 2015, the NRC approved the Company's application for a 20-year operating license extension On April 1, 2015, Ameren Missouri filed its"Application for Approval of Decommissioning Cost Estimate for Callaway Energy Center and Funding Level of Nuclear Decommissioning Trust fund"(File No.E0-2015-0253).
Attachment 1 to this application contained the March, 2015 decommissioning cost estimate for the Callaway Energy Center.Attachment 2 to the application contained Ameren Missouri's analysis ofthe required funding level for the decommissioning trust fund, including all ofthe financial and economic assumptions on which the funding analysis was based.A copy ofthe application and its Attachment 2 is provided in Enclosure 54 Prior to the MPSC issuing an Order in the case, the ISFSI was completed and it was recognized that the March 2015 site specific decommissioning cost estimate did not include any costs for ISFSI decommissioning.
Ameren Missouri and the MPSC Staff enter into a"Non-Unanimous Stipulation and Agreement" to addressing the components ofplant decommissioning that had been covered in the April 1, 2015 filing and the additional scope ofthe ISFSI decommissioning.
A revised funding adequacy analysis was developed separately addressing the funding adequacy of both plant and ISfSI decommissioning.
On March 14, 2016, this"Non-Unanimous Stipulation and Agreement" was filed with the MPSC and was revised on March 30, 2016 to correct certain clerical errors.A copy ofthe final"Non-Unanimous Stipulation and Agreement" and associated funding adequacy analysis is provided in Enclosure 6.On April 6, 2016, the MPSC issued an"Order Approving Stipulation and Agreement"(effective May 6, 20 1 6).In the Order, the MPSC approved the the following actuarial assumptions used in by Ameren Missouri in its revised decommissioning funding adequacy analysis filed with the"Non-Unanimous Stipulation and Agreement":6
.The Missouri jurisdictional allocator is 100%..The federal income tax rate is 20%..The state income tax rate is 0%..The composite federal&state income tax rate is 20%..An asset allocation of 65%equities and 35%bonds is assumed to exist through 2043, at which time all equity investments will be divested..Investment management and trust fees are estimated at 1 5 basis points annually..An inflation rate of2.300%is assumed for general ("CPI")inflation.
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ULNRC-06349  Page7of9.The pre-tax&expense nominal return on bonds is assumed to be 3.400%..The pre-tax&expense real return on bonds is assumed to be 1.100%.The pre-tax&expense nominal return on equities is assumed to be 8.500%..The pre-tax&expense real return on equities is assumed to be 6.200%.The pre-tax&expense nominal weighted-average return is assumed to be 6.7 15%through the 2043 date of divestiture of equity investments.
.The pre-tax&expense real weighted-average return is assumed to be 4.4 15%through the 2043 date of divestiture of equity investments.
.The pre-tax&expense real weighted-average return is assumed to be 1.100%following the 2043 date of divestiture of equity investments.
Based on the foregoing assumptions, the anticipated annual decommissioning contributions would be adequate up to an annual decommissioning inflation rate of 3.5864%.The annualized rate ofeaming on decommissioning fund return (pre-tax and fee)required at the above level of inflation is 6.242%.A copy ofthe MPSC"Order Approving Stipulation and Agreement" is provided in Enclosure 7.5.Any Contracts Upon Which the Licensee is Relying on Pursuant to 10 CFR 50.75(E)(L)(V):
None 6.Any Modifications Occurrin%to a Licensee's Current Method of Providing Financial Assurance Since the Last Submitted Report: None.The Company has used the"External Sinking fund"method since I 985.7.Any Material Changes to Trust Agreements:
There have been no material changes to the qualified trust agreement since the last report.The non-qualified trust that was required by Illinois has been eliminated, as Ameren Missouri no longer has customers in Illinois.This non-qualified trust was never funded7.8.References 1.ULNRC-06201,"STATUS OF DECOMMISSIONING FUNDING,"dated March 30,2015 ULNRC-06349 .Page 8 of 9 1 The NRC formulas in section 10 CfR 50.75(c)include only those decommissioning costs incurred by licensees to remove a facility or site safely from service and reduce residual radioactivity to levels that permit: (1)release ofthe property for unrestricted use and termination ofthe license;or (2)release ofthe property under restricted conditions and termination ofthe license.The cost ofdismantling or demolishing non-radiological systems and structures and the costs ofmanaging and storing spent fuel on site until transfer to DOE are not included in the 10 CfR 50.75(c)cost formulas.2 This estimate is applicable to the 60-year operating life, DECON decommissioning alternative scenario, and is presented in Appendix G ofthe March, 2015 site specific decommissioning cost estimate.This is the option Ameren Missouri intends to utilize for plant decommissioning.
3 The valuations ofthe Missouri and FERC jurisdictional subaccounts are utilized in this report to calculate the total valuation ofthe plant decommissioning fund as the trust statements produced by the trustee do not include a consolidated report that does not include the ISfSI decommissioning subaccounts.
Consequently, to provide supporting documentation, it was necessary to provide the trust statements for the two component plant decommissioning funds: the Missouri and FERC subaccounts and sum their valuations.
4 The March, 2015 site specific decommissioning cost estimate (Attachment 1 to the"Application for Approval ofDecommissioning Cost Estimate for Callaway Energy Center and Funding Level ofNuclear Decommissioning Trust fund")is provided in Enclosure 3 to this report.S Attachments to the"Non-Unanimous Stipulation and Agreement" that are not relevant to the decommissioning funding status ofthe plant were not included in Enclosure 7.Specifically, these were the ISFSI decommissioning cost analysis and the updated investment guidelines for the decommissioning fund for which approval was being requested.
6 The funding adequacy analysis filed with the MPSC by the Company in this Case No.E0-2015-0253 was based on the indicated return assumptions.
The MPSC order in this case approved the proposed annual Missouri contribution level of6,3 14,620, effective January 1, 2016.At the time ofthis update filing, the Missouri jurisdiction is responsible for 100%ofthe decommissioning liability.
7 on February 10, 2005, the MPSC approved Ameren Missouri's proposed transfer of its Illinois electric and gas properties to an Illinois affiliate, Ameren Illinois.The closing date for the property transfer was May 2, 2005.In accordance with the MPSC Order, the tax-qualified decommissioning trust's Illinois jurisdictional sub-account was eliminated following the closing.Ninety-eight percent ofthe assets in the existing Illinois subaccount as ofthe closing date were reallocated to the Missouri sub-account and the ULNRC-06349  Page 9 of 9 remaining two percent were reallocated to the Wholesale sub-account.
As a result of the transfer, Ameren Missouri no longer has any Illinois ratepayers and will no longer collect decommissioning contributions in Illinois for its Callaway Plant, which is located in Missouri.The decommissioning liability previously borne by the Illinois ratepayers was transferred to Ameren Missouri and Wholesale customers.
Decommissioning expenses collected from Missouri jurisdictional ratepayers was increased by$272,194 annually in accordance with the MPSC Order to account for the increased decommissioning liability borne by the Missouri ratepayers following the property transfer.-----__}}

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