[Federal Register Volume 69, Number 20 (Friday, January 30, 2004)]
[Rules and Regulations]
[Pages 4439-4448]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1942]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 69, No. 20 / Friday, January 30, 2004 / Rules
and Regulations
[[Page 4439]]
NUCLEAR REGULATORY COMMISSION
10 CFR Part 50
RIN 3150-AG84
Financial Information Requirements for Applications To Renew or
Extend the Term of an Operating License for a Power Reactor
AGENCY: Nuclear Regulatory Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Nuclear Regulatory Commission (NRC) is amending its
regulations to remove the requirement that non-electric utility power
reactor licensees submit financial qualifications information in their
license renewal applications, and to add a new requirement that
electric utility licensees of nuclear power reactors who become non-
electric utility entities without a license transfer must notify the
NRC and submit information on their financial qualifications. The final
rule will reduce unnecessary regulatory burden on licensees seeking
renewal of operating licenses and ensure that licensees that become
non-electric utility entities continue to be financially qualified to
operate their facilities and maintain the public health and safety.
EFFECTIVE DATE: March 1, 2004.
FOR FURTHER INFORMATION CONTACT: George J. Mencinsky, Office of Nuclear
Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC
20555-0001, telephone (301) 415-3093, e-mail [email protected].
SUPPLEMENTARY INFORMATION:
Background
Section 182.a. of the Atomic Energy Act of 1954, as amended (AEA),
provides that ``each application for a license * * * shall specifically
state such information as the Commission, by rule or regulation, may
determine to be necessary to decide such of the technical and financial
qualifications of the applicant * * * as the Commission may deem
appropriate for the license.'' The NRC's regulations governing
financial qualifications reviews of applications for licenses to
construct or operate nuclear power plants are provided in 10 CFR
50.33(f).
Section 50.33(f)(2), adopted on September 12, 1984 (49 FR 35747),
requires all applicants for initial operating licenses and renewal of
operating licenses to submit financial qualifications information,
except applicants for and holders of operating licenses for nuclear
power reactors that are electric utilities. The exception for electric
utilities was based on the premise that the cost-of-service ratemaking
process ensures that electric utilities will have funds to operate
their nuclear power plants safely. Because entities other than electric
utilities do not have recourse to such ratemaking, they were required
to submit information on financial qualifications in accordance with
Sec. 50.33(f), and the NRC was required to make a finding of financial
qualification for these non-electric utility entities under Sec.
50.57(a)(4).
In its 1991 License Renewal Rule, 10 CFR part 54 (56 FR 64943;
December 13, 1991), the NRC reaffirmed that the basis of the 1984
rulemaking for eliminating financial qualifications reviews for
electric utilities applies not only for the term of the original
license, but also for the period of operation covered by a renewed
license (56 FR at 64968). The License Renewal Rule left unchanged the
requirement in Sec. 50.33(f)(2) that license renewal applicants that
are not electric utilities must submit financial qualifications
information in their renewal applications. However, the section of the
License Renewal Rule that contains the standards for issuance of a
renewed license, 10 CFR 54.29, does not require a finding regarding
financial qualifications for non-electric utility entities applying for
license renewal. The revisions to 10 CFR part 54 published on May 8,
1995 (60 FR 22461), did not amend the requirements in 10 CFR 54.29.
Thus, while non-electric utility entities are required to submit
financial qualifications information under 10 CFR 50.33, there is no
requirement under 10 CFR 54.29 for a finding of financial
qualifications for non-electric utility entities.
Since the 1995 rulemaking, the NRC has received 40 requests for
license renewals and has granted 23 renewed licenses for twelve plant
sites to electric utilities. However, because of ongoing deregulation
in the power market, new entities other than electric utilities may be
created and become licensees of nuclear power plants. Some of these
entities may decide to renew their licenses. Under the current rule,
these entities would be required to submit financial qualifications
information under Sec. 50.33(f)(2).
NRC's case-by-case determination of financial qualifications is
resource-intensive and may result in delays in approving renewal
applications. The NRC has reviewed the license transfer process to
determine if there is a basis in the regulatory process that would
eliminate the need for such a finding at license renewal. The NRC
determined that, with one exception, it does not need the financial
qualifications information from license renewal applicants that are not
electric utilities. The exception is when an existing nuclear power
licensee transitions from an electric utility to an entity other than
an electric utility without transferring its license. All license
transfers involving non-electric utility applicants require
consideration of the financial qualifications of the non-electric
utility entity that holds or will hold the license. However, an
electric utility licensee transitioning to a non-electric utility
status without a license transfer would not be subject to an NRC review
of financial qualifications for the licensee as a non-electric utility
entity under current NRC rules. If not closed, this regulatory gap
would prevent the NRC from making a generic determination that
financial qualifications review is unnecessary at license renewal.
On June 4, 2002, the NRC published a proposed rule in the Federal
Register (67 FR 38427). The rule proposed to remove the requirement
that non-electric utility power reactor licensees submit financial
qualifications information in their license renewal applications, and
to add a new requirement that licensees of nuclear power reactors who
are electric utilities reorganizing as or changing their status to non-
electric utility entities without a
[[Page 4440]]
license transfer must notify the NRC and submit information on their
financial qualifications. The proposed rule would reduce unnecessary
regulatory burden on licensees seeking renewal of operating licenses
and ensure that licensees reorganizing as or changing to non-electric
utility entities continue to have financial resources to operate their
facilities safely. The public comment period closed on August 19, 2002.
Nine comments were received on the proposed rule.
Discussion
After considering public comment, the NRC has decided to adopt the
proposed rule unchanged as the final rule. The final rule will remove
the requirement that non-electric utility power reactor licensees
submit financial qualifications information in their license renewal
applications. The final rule will also add a new requirement that
licensees of nuclear power reactors who are electric utilities
reorganizing as or changing their status to non-electric utility
entities without a license transfer must notify the NRC and submit
information on their financial qualifications. The final rule reduces
unnecessary regulatory burden on licensees seeking renewal of operating
licenses and ensures that licensees reorganizing as or changing to non-
electric utility entities continue to be financially qualified to
operate their facilities and maintain the public health and safety.
These changes will increase regulatory clarity and strengthen the NRC's
ability to protect public health and safety. The following discussion
presents the basis and rationale for this action.
The NRC's regulations provide for an evaluation of the financial
qualifications of an applicant for a nuclear power reactor operating
license or a licensee at several points during a reactor's operating
lifetime--at initial licensing, before license transfers, and when
circumstances warrant an ad hoc request for additional financial
information. In addition, the NRC monitors the financial trade press
and other sources for information on licensees' financial situations.
Currently, there is one gap in the NRC's regulatory provisions for
evaluating a power reactor licensee's financial qualifications. The
NRC's current regulations do not require a financial qualifications
review when a licensee transitions from an electric utility to an
entity other than an electric utility without transferring control of
its license. This final rule will rectify the regulatory gap by
imposing a requirement that these licensees submit financial
qualifications information to the NRC. With the addition of this
provision, the NRC believes it has a basis for concluding that non-
electric utility licensees that are holders of operating licenses for
nuclear power reactors need not submit financial qualifications
information during the license renewal process.
With this final rule, the NRC believes that review of financial
qualifications of non-electric utility licensee applicants at license
renewal is not necessary. The resulting process for oversight of
financial qualifications is sufficient to ensure that the NRC has
adequate warning of adverse financial impacts so that the NRC can take
timely regulatory action to ensure public health and safety and the
common defense and security. The resulting process has two components:
(1) A formal review of major triggering events, and (2) monitoring of
financial health between the formal reviews due at the ``triggering
events.'' The relevant triggering events are (1) initial operating
license application, (2) license transfer, and (3) transition from an
electric utility to a non-electric utility, either with or without
transfer of control of the license. In addition, the NRC can review a
licensee's financial qualifications at any point during the term of the
license if there is evidence of a decline in the licensee's financial
health. The NRC believes that there are no unique financial
circumstances associated with license renewal because the NRC has no
information indicating a licensee's revenues and expenses change due to
license renewal.
Between major triggering events, the NRC relies upon periodic
monitoring of the financial health of licensees to detect whether
additional regulatory scrutiny and action are necessary to assure
public health and safety and the common defense and security. The NRC's
current regulations require non-electric utility reactor licensees to
submit 5 years of financial projections for license renewal
applications. Because this financial qualifications information ages
quickly and is of limited relevance years later, the NRC relies on a
process of monitoring licensees throughout the term of their licenses
for any indications that they may not have sufficient financial
resources to operate their plants safely.
The current licensee monitoring process involves the review of
financial and industry trade press as well as other publicly available
information, such as Securities and Exchange Commission (SEC)
submissions and Federal Energy Regulatory Commission (FERC)
submissions. The NRC reviews this information to identify changes in
licensees' financial health, as well as indirect indicators of
declining financial health such as layoffs or increasing technical
problems. If the review of any of these sources indicates that a
licensee's financial health may be deteriorating, the NRC can request
additional financial information from the licensee as authorized by 10
CFR 50.33(f)(4) to confirm that a licensee has the financial resources
to operate the facility safely. The financial information that the NRC
can request under 10 CFR 50.33(f)(4) can be the same type of
information required for an initial license application or a license
transfer.
The following sections discuss the times in a licensee's term of
license when financial qualifications are reviewed and the changes made
by this final rule.
Initial Licensing Reviews
The NRC performs financial qualifications reviews during initial
licensing because the startup of a nuclear power reactor is a major
financial undertaking that has significant implications for a company's
financial health. The NRC's financial qualifications review process is
contained in NUREG-1577, ``Standard Review Plan on Power Reactor
Licensee Financial Qualifications and Decommissioning Funding
Assurance,'' March 1999. These reviews form part of the licensing basis
that the licensee must maintain for the 40-year term of the initial
license and for any license renewal period. Financial qualifications
reviews at the operating license stage distinguish between license
applicants that are electric utilities, as defined in 10 CFR 50.2, and
those that are not. Applicants other than electric utilities are
required to submit estimates for total annual operating costs for each
of the first 5 years of operation of the facility and to indicate the
sources of funds to cover these costs. The NRC's evaluation of the
financial qualifications of an entity other than an electric utility
applicant is based on the submitted 5-year projections of income and
expenses. In addition, the NRC considers current information from
several major financial rating service publications, and other relevant
information, may also be considered. As part of its evaluation, the NRC
reviews the reasonableness of an applicant's assumptions and inputs to
its projections. The NRC publishes the results of its evaluation in a
safety evaluation report. The NRC's regulations do not require
additional financial qualifications reviews at scheduled intervals.
[[Page 4441]]
License Transfer Reviews
The NRC reviews financial qualifications during direct license
transfers because a new licensee must be qualified to hold the license.
A plant acquisition or the indirect transfer of a license through a
transfer of control of a licensee can have significant implications for
a licensee's financial health. A license transfer under 10 CFR 50.80
may occur at any time during the period of the license. The NRC reviews
the financial qualifications of non-electric utility applicants seeking
to become licensees through direct license transfers (plant sales), and
considers changes in the financial qualifications of an existing
licensee, whether or not it is an electric utility, that might occur in
connection with an indirect license transfer occurring in connection
with a merger, acquisition, or restructuring action. For license
transfers, a non-electric utility applicant must submit all the
information required under Sec. 50.33(f). As with initial license
financial qualifications reviews, the NRC uses NUREG-1577 as the basis
for its review and publishes the results of its evaluation in a safety
evaluation report. The NRC has performed financial qualifications
reviews on over 75 license transfer applications in the last 5 years.
The NRC expects that it will continue to review numerous licensees'
financial qualifications in the next few years because of license
transfers.
Reviews of Transition From an Electric Utility to a Non-Electric
Utility
The NRC will review financial qualifications when an electric
utility licensee transitions to non-electric utility status without a
license transfer because a licensee is no longer ensured the recovery
of its costs through traditional cost-of-service rate regulation.
Before this final rule, the NRC had no formal automatic process to
evaluate the licensee's financial qualifications if such a transition
occurred in the absence of a license transfer (although the NRC's
monitoring process should identify such transitions and could trigger a
request for additional information pursuant to Sec. 50.33(f)(4)).
Therefore, the NRC is promulgating 10 CFR 50.76, a requirement separate
from Sec. 50.33(f)(2). Section 50.76 requires licensees that are
transitioning from an electric utility to non-electric utility status,
without being required to request approval for license transfers, to
submit financial information sufficient to allow the NRC to determine
whether the licensee remains financially qualified to conduct the
activities authorized by the license. Although the NRC expects that
this type of transition will occur rarely, if at all, this requirement
will ensure that a financial qualifications review for non-electric
utilities results from all relevant triggering events, thereby
enhancing public confidence while maintaining regulatory efficiency and
effectiveness. The relevant triggering events are (1) initial operating
license application, (2) license transfer, and (3) transition from an
electric utility to non-electric utility status without a license
transfer.
Section 50.76 is created separately from Sec. 50.33, because the
latter section focuses on applicants rather than licensees.
Screening of Financial and Nuclear Industry Trade Press and Other
Information Sources
To keep abreast of deregulation and other developments potentially
affecting power reactor licensees, the NRC regularly screens the
financial and trade press (e.g., Wall Street Journal, Barron's, Nuclear
NewsLink, and Nuclear Energy Insight). Other information sources (e.g.,
State legislative reports, SEC and FERC submissions) also can be used.
The NRC uses the foregoing to identify changes in licensees' financial
health. A main purpose of this information review is to provide NRC
with sufficient notification so that it can take regulatory action in a
timely manner, when necessary. The NRC can then request additional
information from licensees under Sec. 50.33(f)(4).
Section 50.33(f)(4) states:
The Commission may request an established entity or newly formed
entity to submit additional or more detailed information respecting
its financial arrangements and status of funds if the Commission
considers this information to be appropriate. This may include
information regarding a licensee's ability to continue the conduct
of the activities authorized by the license and to decommission the
facility.
This section permits the NRC to require license applicants or licensees
to submit relevant financial information on their qualifications to
manage licensed activities safely at any time. The requested additional
information can then be used to conduct a thorough financial
qualifications review.
Retention of Nonpower Reactor Financial Reviews at License Renewal
The NRC will retain the financial qualifications requirements in
Sec. 50.33(f)(2) for nonpower reactor (NPR) applicants that wish to
renew or extend their licenses. There are currently 37 nonpower reactor
licensees. Nonpower reactor licenses are generally renewed for 20
years. The NRC does not normally follow changes in NPR licensee
financial qualifications because NPR owners are primarily financially
stable nonprofit educational or research institutions, either privately
owned (3 corporate licensees and 28 academic licensees), State-owned (1
licensee), or Federally owned (5 licensees), and generally do not
report financial information to sources readily available to the NRC.
The limited publicly available reporting from these types of owners
does not permit the same level of ongoing financial qualifications
oversight as with power reactor licensees. Additionally, license
transfers for NPRs and the associated financial reviews are rare. Given
these factors, financial qualification problems with NPR licensees are
not as likely to become known as problems with power reactor licensees.
In some cases, the NRC has found financial weaknesses or ambiguities
during NPR license renewals that it would not have discovered
otherwise. Therefore, the NRC considers it appropriate to continue to
review the financial qualifications of NPR licensees when they apply to
renew their licenses.
Conclusion
Section 50.33(f) requires all non-electric utility applicants for
initial and renewed operating licenses, and Sec. 50.80, in conjunction
with Sec. 50.33(f), requires all non-electric utility applicants for
transferred licenses, to submit financial qualifications information.
The NRC does not believe that there are any financial circumstances
uniquely associated with license renewal that warrant a separate
financial review. The NRC's regulatory processes for financial
qualifications reviews adequately ensure that the NRC can take
appropriate and timely regulatory action when warranted by changes in a
licensee's financial qualifications. In contrast, there are valid
regulatory reasons for conducting specified financial qualifications
reviews at other license stages. The license stages are (1) at initial
licensing, when an applicant's financial qualifications need to be
determined in accordance with the AEA's requirements; (2) at the time
of a license transfer, when new licensees need to be evaluated, or when
deregulation initiatives may affect an applicant's or licensee's
financial qualifications; or (3) during special circumstances, when ad
hoc reviews under Sec. 50.33(f)(4) may be warranted.
As a result, the NRC is promulgating a change in the requirement in
the last sentence of Sec. 50.33(f)(2) with respect to entities other
than electric utilities seeking renewal of operating licenses for
[[Page 4442]]
nuclear power reactors. The final rule (1) eliminates the need for such
entities to provide financial qualifications information as part of the
license renewal process, (2) retains the existing requirement in Sec.
50.33(f) for nonpower reactors to provide financial qualifications
information, and (3) adds a new Sec. 50.76, ``Licensee's change of
status; financial qualifications.'' Section 50.76 will require that any
electric utility power reactor licensee that becomes an entity other
than an electric utility without transferring control of the license
must provide the same financial information that is required for
obtaining an initial operating license. The final rule will not affect
the submission of financial qualifications information and the need for
a finding of financial qualifications to the extent presently required
for license transfers.
The NRC believes this final rule is consistent with the NRC's
Strategic Goals of making NRC activities and decisions more effective
and efficient and reducing unnecessary regulatory burden. The final
rule will help advance these goals by eliminating the need for
``entities other than electric utilities'' to submit information on
financial qualifications (as is the case now for electric utilities) in
connection with license renewal, and will make the financial
qualifications review requirements consistent with the bases of the
License Renewal Rule in 10 CFR part 54, which does not require a
finding of financial qualifications for those power reactor licensees
applying for a renewed nuclear power plant operating license. The final
rule will not have an adverse impact on maintaining safety. The
provisions in Sec. 50.33(f)(4) already ensure that financial
information can be obtained from a licensee whenever the NRC considers
this information appropriate.
Resolution of Public Comments
The NRC received comments on the proposed rule from nine different
organizations, including one State, three nonprofits, and five
organizations in the nuclear power industry. Five commenters opposed
the changes to Sec. 50.33 and four commenters supported the changes to
Sec. 50.33. Two commenters opposed adding the new Sec. 50.76, three
commenters supported this change, and four commenters were silent on
the creation of the new Sec. 50.76. After considering the public
comments, the NRC has decided to adopt the proposed rule on ``Financial
Information Requirements for Applications To Renew or Extend the Term
of an Operating License for a Power Reactor'' as final without changes.
A summary of the comments and the NRC's responses follows:
Comment 1: Four commenters support the NRC's proposed revisions to
10 CFR 50.33 to eliminate the requirement that non-electric utility
power reactor licensees submit financial qualifications information
during license renewal. One commenter agrees with the NRC's assessment
that there are no unique financial circumstances associated with
license renewal that warrant a separate financial review.
Response: No response necessary.
Comment 2: Two commenters agree with the proposal to add a
requirement in 10 CFR 50.76 that electric utilities that transition to
non-electric utility status without a license transfer should submit
financial qualifications information.
Response: No response necessary.
Comment 3: Five commenters oppose the NRC's proposal to eliminate
submission of financial qualifications information for non-electric
utilities during license renewal. One commenter expresses concern that
the changes to 10 CFR 50.33 would weaken protection of public safety.
Another commenter states that eliminating this requirement will create
an ``information vacuum'' that will place the NRC in a state of
ignorance.
Response: The NRC disagrees that the changes to 10 CFR 50.33 will
weaken protection of public health and safety or deprive the NRC of
necessary information. The NRC's license transfer reviews have provided
the NRC with financial information on current non-electric utility
licensees, and will continue to do so for future license transfers.
Moreover, the NRC's current process for monitoring the financial health
of licensees, as previously described, is effective in ensuring that
licensees have adequate financial resources to operate their facilities
safely and provides sufficient information to allow the NRC to take
timely regulatory action if a licensee's financial health deteriorates.
The commenter implies that the changes to 10 CFR 50.33 will allow
financially weak licensees to continue to operate. The changes to 10
CFR 50.33 relate to when NRC reviews the financial status of licensees,
not necessarily whether the licensee should continue to operate. The
NRC believes that its primary tool for evaluating and ensuring safe
operations at nuclear power reactors is through its inspection and
enforcement programs, which are not affected by this rulemaking.
Comment 4: Two commenters are concerned that in the wake of recent
corporate financial and accounting scandals, the NRC is considering
relaxing its financial oversight of non-electric utility power reactor
licensees. One commenter also states that Congress has acknowledged the
need for more stringent oversight of corporate accounting and that the
NRC's actions are incompatible with Congress's findings.
Response: The NRC disagrees with the commenters that this action is
incompatible with recent experience or Congress's findings about the
need for careful oversight. The NRC's purposes and responsibilities are
different from agencies, such as the Securities and Exchange Commission
(SEC), that are responsible for oversight of companies with respect to
accounting or financial reporting improprieties. The NRC has no
regulatory authority over corporate accounting methods. This action in
no way relaxes the NRC's regulations that require all part 50
applications to be submitted under oath and affirmation (see 10 CFR
50.30) and that require all information submitted to be complete and
accurate in all material respects (see 10 CFR 50.9). The NRC continues
to possess the authority to impose sanctions for the submission of
incomplete or inaccurate information. The NRC does not believe that
this action has any relationship to recent financial reporting and
accounting issues cited by the commenters.
Comment 5: One commenter states that in a U.S. General Accounting
Office (GAO) report on the Commonwealth Edison and PECO merger, GAO
pointed out that the NRC did not validate submitted information and the
NRC approved the license transfers associated with the merger knowing
that submitted pro forma financial information was inaccurate.
Response: The comment addresses whether information submitted to
the NRC for a financial qualifications review is verified for accuracy
and whether the NRC takes licensing actions based on information known
to be inaccurate. The NRC's response to the GAO findings, with which
the NRC disagreed, is contained in the GAO report. With respect to this
rulemaking, however, which deals with the timing of a financial
qualifications review, the comment does not pertain to whether a
financial qualifications review specifically during license renewal is
necessary, and, therefore, the comment is not relevant.
Comment 6: One commenter cites an NRC document (NUREG/CR-6617,
October 1998) that suggests the NRC believes the financial health of
power reactor licensees may suffer from deregulation. According to one
[[Page 4443]]
commenter, the document suggests that the economic pressures in a
deregulated environment might hasten the closure of some power
reactors. The commenter asserts that the fact that the NRC now believes
that financial qualifications reviews are not necessary during license
renewal is incompatible with the earlier findings.
Response: The NRC disagrees that this action is incompatible with
the information in NUREG/CR-6617. The NRC is concerned with assuring
that operating reactors are operated safely. If financial circumstances
force reactors to cease operation, the NRC has other requirements in
place with respect to decommissioning funds that provide reasonable
assurance that a prematurely shutdown reactor is decommissioned and
does not pose a public health and safety risk. The NRC's licensee
monitoring process, as previously described, will provide adequate
warning to ensure that the NRC can respond with timely regulatory
action if a licensee's financial health suffers from deregulation. The
license renewal application event has no particular bearing on a
licensee's financial qualifications. If anything, undertaking to renew
a license suggests that the licensee is projecting future profitability
by continuing to operate the plant beyond its original operating
license.
Comment 7: Three commenters are concerned that the NRC's reliance
on trade press information is inadequate to track the financial health
of non-electric utilities. One commenter states that since power
reactor licensees operate in a competitive environment, they generally
do not disclose financial information unless required to do so. The
commenter states that as a minority owner of two power reactors, it has
difficulty monitoring the financial qualifications of the plant
operators. In addition, since power reactor licensees are generally
organized as part of a complex holding company system, the trade press
does not have sufficient information to report at a level below the
holding company as a whole. One commenter states that the day-to-day
informal monitoring of the trade press and limited annual reviews are
not substitutes for a formal, rigorous, and disciplined review of a
licensee's financial qualifications at license renewal.
Response: The NRC disagrees with the commenter's views that the
NRC's processes are inadequate to monitor the financial health of non-
electric utilities. As previously described, the NRC not only relies
upon the trade press and licensee filings with other government
agencies, it also has the benefit of having onsite inspectors who may
become aware of relevant information. Moreover, the NRC has the
authority to request additional financial information directly from
licensees at any time under 10 CFR 50.33(f)(4).
Monitoring the trade press is a common practice in the financial
and investment community to screen the financial and business
conditions of any business activity or entity. The NRC believes that
its ongoing licensee financial monitoring process is necessary and is a
better use of the NRC's resources than a formal financial
qualifications review at license renewal because license renewal occurs
at an arbitrary point in time during a licensee's operating license. On
average, power reactor licensees apply for license renewal 14 years
before their initial license expires. Thus the 5 years of projected
operating expenses and revenues that non-electric utility power
reactors are currently required to submit do not include the period to
be covered by the renewed license. Therefore the information submitted
is of limited value to the NRC in determining if the licensee will have
adequate financial qualifications in the period to be covered by the
renewed license.
The NRC does not agree that the situation of a minority owner with
respect to financial information is the same as the situation of the
NRC. The NRC possesses regulatory authority under Sec. 50.33(f)(4) to
obtain additional financial information from licensees at any time that
is necessary to determine whether a licensee continues to be
financially qualified.
Comment 8: One commenter states that the aging of power reactors
requires more, not less, financial oversight. The commenter cites the
examples of corrosion in the reactor vessel head at the Davis-Besse
reactor and cracking of reactor pressure vessel head penetration
nozzles in pressurized water reactors. The commenter also states that
as reactors age, licensees have conflicting demands of keeping the
reactors operating and temporarily shutting them down to make necessary
inspections and repairs. Licensees in poor financial health may be more
likely to postpone these inspections and repairs, increasing the
likelihood of an accident.
Response: The NRC disagrees with the commenter. The rule eliminates
the burden of the unnecessary financial review so that the NRC can
focus more resources on the technical aspects of power reactor license
renewal. The Davis-Besse example cited by the commenter is principally
a technical issue. Moreover, there does not appear to be any
information available to the NRC that suggests that the Davis-Besse
situation was caused by a deterioration in the financial health of the
licensee, and the commenter does not present any information today to
show such a causal link. The NRC has not found a consistent correlation
between licensees' poor financial health and poor safety performance.
If a licensee postpones inspections and repairs that are subject to NRC
oversight, the NRC has the authority to shut down the reactor or take
other appropriate action if there is a safety issue.
Comment 9: Three commenters are concerned that non-electric utility
power reactor licensees are organized as single-asset limited liability
companies (LLCs), which they assert are designed to limit the liability
of the parent companies in the event of the financial failure of the
LLC and to shield the power reactor licensee from public scrutiny of
its finances. One commenter states that, in some cases, the LLCs are
foreign companies or exist only on paper. Another commenter states that
a recent report shows that 25 power reactors are owned by LLCs. Another
commenter states that the selection of the limited liability structure
indicates that these owners recognize that their financial health is
subject to substantial change. Because financial well-being is
essential for power reactor licensees, this structure also signals a
significant risk to the health and safety of the public.
Response: While LLCs provide limits on the liability of parent
organizations, the same is true for traditional corporations that have
parent companies. Regardless of whether a power reactor licensee is an
LLC or another corporate form such as a wholly owned corporate
subsidiary, the NRC has essentially the same opportunity to obtain
relevant financial information about the licensee. The NRC may request
and review, on a case-by-case basis, relevant financial information
from the LLC licensee as authorized under 10 CFR 50.33(f)(4).
The NRC does not agree with the commenter's view that the use of
the LLC structure indicates licensees anticipate substantial changes in
financial health and signals significant risk to the health and safety
of the public. The Commission retains the same enforcement and
inspection authority regardless of the corporate structure and can
ultimately shut any reactors down if they are not operated safely.
Comment 10: Two commenters state that because non-electric utility
licensees lack the assured base of funding of electric utility
licensees, they
[[Page 4444]]
increase the risk that there will be insufficient capital resources to
operate the power reactor safely, as the non-electric utility licensees
diversify into telecommunications, commodity and energy trading, high-
risk financial activities, or other activities.
Response: The NRC disagrees with the commenters. The NRC has long
determined that non-electric utilities can be licensed regardless of
the fact that they do not have an assured base of funding. In this
regard, the NRC has a full regulatory regime for licensing non-electric
utilities that requires substantial financial information be submitted
and reviewed, which is not the case for licensing reviews for electric
utilities. In addition, the NRC has no basis for concluding that
diversification will always threaten the financial well being of non-
electric utility power reactor licensees.
Comment 11: One commenter states that disclosure and transparency
to regulators is essential for ensuring that the NRC is not caught
unaware of a deteriorating financial condition. Given the lack of
transparency in the structures and finances of many publicly traded
energy companies, the NRC seems out of step with the widely agreed-upon
need for increased corporate disclosure.
Response: The NRC agrees that the NRC needs to be aware of changes
in the financial condition of licensees and therefore, continues to
monitor licensees' financial health. The NRC does not believe that the
action being taken is somehow ``out of step'' with the ``need for
increased corporate disclosure'' or inconsistent with the NRC's ability
to obtain relevant corporate financial information. This action only
removes one requirement to provide certain financial information at one
point in time; it does not affect in any way the NRC's ability to
require the submission of additional or more detailed financial
information at any time the NRC needs such information.
Comment 12: One commenter believes that the NRC's current review of
financial qualifications at initial licensing, before license
transfers, and on an ad hoc basis is not adequate. The commenter states
that the financial qualifications of a licensee at either initial
licensing or at license transfer may have little relevance to the
licensee's financial qualifications many years later when license
renewal is sought. Because of our dynamic economy, a company's
financial status can change significantly in a matter of months and
thus several-year-old financial information is worthless.
Response: The commenter essentially is questioning the entire NRC
financial qualifications regulatory process because the argument that
financial information quickly becomes stale applies whether or not
there is any decision to renew a license. The NRC agrees with the
commenter that financial qualifications information eventually becomes
out of date and is no longer relevant after the passage of time. That
is the reason why the NRC has a two-pronged process for financial
qualifications, with the second prong being continued monitoring of the
financial health of licensees. This process provides a reasonable
method to keep abreast of licensees' financial health to ensure
sufficient financial resources are available to continue safe operation
of nuclear power plants, as well as decommissioning plants when they
permanently cease operation. For power reactor licensees, financial
qualifications reviews at license renewal, which takes place at an
arbitrary point in time, do not solve the problem raised by the
commenter.
Comment 13: Three commenters state that license renewal is a
particularly appropriate time to evaluate the financial requirements of
power reactor licensees. The commenters state that non-electric utility
power reactor licensee financial qualifications should be evaluated to
ensure that there are sufficient financial resources to continue safe
operation, make capital improvements, add spent fuel storage capacity,
meet additional licensing conditions imposed because of September 11,
2001, events, meet decommissioning obligation, and meet public
liability obligations under the Price-Anderson Act, in light of the
economic conditions at the time of renewal.
Response: The NRC disagrees with the commenters' view that license
renewal is a particularly appropriate time for a financial
qualifications review given that it is just one point in time over
potentially 60 years of plant operation. The NRC's process for regular
monitoring of power reactor licensees meets the need to know whether
licensees may not have sufficient financial qualifications and allows
for adequate warning so that the NRC can request financial
qualifications information and take regulatory action in a timely
manner if necessary. With respect to the scope of financial
qualifications analyses, the NRC is not proposing any changes to its
financial qualifications analyses through this action.
Comment 14: One commenter states that the same rationale used for
maintaining the requirement for nonpower reactor licensees to submit
financial qualifications information during license renewal applies to
non-electric utility power reactors. The commenter notes that the NRC
states in the proposed rule (67 FR 38429) that it has found financial
weaknesses or other ambiguities during the review of nonpower reactor
licensees' financial information in the license renewal process that it
would not have discovered otherwise. The commenter states further that
given the lack of information in the trade press about non-electric
utility power reactors and because of the use of LLCs, a formal review
process at the time of license renewal may disclose financial
weaknesses that otherwise would not be discovered.
Response: The NRC disagrees that the same rationale used for
nonpower reactor licensees applies to non-electric utility power
reactor licensees. There are many nonpower reactor licensees that are
nonprofit educational or research institutions, with either private,
State, or Federal ownership, that do not report financial information
to sources readily available to the NRC. Thus the NRC is not as able to
monitor the financial health of these organizations on an ongoing
basis. In addition, many nonpower reactor licensees are multipurpose,
non-revenue-generating entities that require outside funding for
financial support and thus are economically more risky. Accordingly,
the NRC will continue to perform financial qualifications reviews as
part of the renewal of nonpower reactor licensees, which typically
occurs every 20 years. On the other hand, power reactor licensees are
single-purpose, revenue-generating entities. Therefore, the NRC is able
to review non-electric utility power reactor licensee financial
information more readily on an ongoing basis.
Comment 15: One commenter states that the NRC should establish a
more rigorous financial monitoring system that includes an annual
review by the NRC of licensees' account books. The commenter states
that the NRC needs to know the financial status of non-electric utility
power reactor licensees before the information is published in the
trade press.
Response: The NRC disagrees with the comment. The extensive annual
financial audit process that the commenter suggests is not necessary
for the NRC to achieve its oversight of licensees under the Atomic
Energy Act and to ensure public health and safety and promote the
common defense and security. Nor is it clear why the NRC
[[Page 4445]]
must know the financial status of non-electric utility licensees before
information on their financial health is published in the trade press.
The NRC's regulations require that all part 50 applications be
submitted under oath and affirmation (see 10 CFR 50.30) and that all
information submitted must be complete and accurate in all material
respects (see 10 CFR 50.9). The NRC also possesses the authority to
impose sanctions for incomplete or inaccurate information and, of
course, possesses the authority to take action necessary to ensure the
safe operation of nuclear facilities. For these reasons, the NRC
believes its regulatory process and its financial monitoring system are
adequate and sufficient to meet these goals.
Comment 16: One commenter states that the Regulatory Analysis
disregards the value to the public health and safety of reviewing a
non-electric utility power reactor licensee's financial qualifications
at the time of license renewal.
Response: The NRC disagrees with the commenter that the Regulatory
Analysis disregarded the value to public health and safety of review of
financial qualifications at the time of license renewal. The financial
qualifications review for power reactor relicensing occurs at an
arbitrary point in time that has no distinct link to public health and
safety. Public health and safety are primarily protected through the
NRC's onsite inspection program, and the financial health of a licensee
is verified through NRC's monitoring of publicly available financial
information.
Comment 17: One commenter states that the NRC is not sufficiently
independent of the industry that it regulates. The commenter mentions
that the NRC has stated that case-by-case review of financial
qualifications information might delay the approval of a license
application. The commenter suggests this gives the impression that the
NRC believes its duty is to approve renewal applications and not to
thoroughly review and analyze them prior to accepting or rejecting
applications. The commenter concludes that the license renewal process
should be a truly rigorous process and not simply a rubber-stamping
formality.
Response: The NRC disagrees with the comment that NRC is not
sufficiently independent of the industry. The NRC is a fully
independent regulator of the nuclear power industry. No licensing
application's approval is a foregone conclusion. The NRC will
continually conduct technical reviews until the licensee has performed
all necessary actions as required in the regulations before approving a
license application. No licensing action is approved until all
technical issues have been addressed. The NRC's commitment to thorough
review and analysis of license renewal applications is reflected in the
staff time to review those applications, which is on the order of
19,000 person-hours per application.
Nonetheless, to be an effective regulator, the NRC must also
conduct its regulatory activities in protecting public health and
safety and the common defense and security in a manner that is
efficient and does not impose unnecessary regulatory burdens. This
final rulemaking is directed towards ensuring that the NRC carries out
its regulatory responsibilities in an efficient and cost-effective
manner.
Comment 18: One commenter stated that the proposed regulatory
language in Sec. 50.76 is open ended and could cause confusion at the
end of the 75-day period. The commenter suggested the following
language should be added: ``Financial qualifications information
submitted in accordance with this section shall be regarded as accepted
by the Commission upon receipt of a letter to this effect from the
appropriate reviewing office of the Commission or 75 days after the
submittal to the Commission, whichever occurs first.''
Response: The NRC disagrees with the proposed addition. The NRC
believes that the regulatory language is clear that information must be
submitted no later than 75 days before an electric utility licensee
ceases to be an electric utility. The commenter's proposal would change
the regulation and require the NRC to take action within 75 days.
Comment 19: Two commenters disagree that there is a regulatory gap
that must be filled by the addition of 10 CFR 50.76. One commenter
states that the NRC has sufficient existing authority under 10 CFR
50.33(f)(4) to require applicants or licensees to submit financial
qualifications information. In addition, licensees have an obligation
to inform and obtain approval from the NRC for any changes that would
constitute a transfer of license, and licensees must promptly report
financial qualifications information that may have a significant
implication for public health and safety. Therefore, the commenter
believes the new requirement is unnecessary and unjustified. One
commenter believes the new requirement is unnecessary and unwarranted
and that the gap is perceived and not real since no problems were cited
by the NRC. Thus, the new requirement is not necessary and would create
only unnecessary burden with no benefit.
Response: The NRC disagrees with the commenters regarding the
absence of a regulatory gap. The NRC believes that the transition from
an electric utility to a non-electric utility is a significant event
that requires regulatory review to ensure continued financial
qualifications of the licensee lacking assured cost recovery. The fact
that the NRC has authority to request financial qualification
information is of no relevance in determining whether there is a
regulatory gap. In the NRC's view, the regulatory gap exists because
the current regulatory regime does not compel that the NRC be timely
informed of changes in a licensee's cost recovery status when there is
no license transfer. Because such notification would, in all
likelihood, be followed by an NRC request for information, the final
rule simply provides that electric utility licensees transitioning to
non-electric utility status without a license transfer must provide the
relevant financial qualifications information. The NRC also disagrees
that the regulatory gap is only perceived because no problems have
occurred to date. The lack of examples of problems does not support the
conclusion that a regulatory gap does not exist. With this regulation,
the NRC is being proactive and is attempting to prevent problems from
occurring.
Comment 20: One commenter opposes the addition of 10 CFR 50.76 and
states that the proposed rule would impose unnecessary regulatory costs
due to collecting and submitting financial qualifications information
and that this added burden may impact licensees' business decisions
about whether to seek license renewals.
Response: The NRC disagrees with the commenter that the creation of
10 CFR 50.76 is unnecessary. The NRC strives to ensure that its
regulations meet real regulatory needs and that unnecessary regulations
are avoided. Consistent with this objective, the NRC believes that the
proposed action is necessary to ensure NRC fulfils its regulatory
responsibilities under the Atomic Energy Act. This change complements
the existing regulations requiring power reactor licensees to submit
financial qualifications information when they become non-electric
utilities during a transfer of control of a license. Thus, under the
final rule all licensees that transition from electric utilities to
non-electric utilities will undergo financial qualifications review,
regardless of whether the transition involves the transfer of control
of an NRC license. Nor does the NRC believe that the cost of collecting
and submitting the information to the NRC (see Regulatory
[[Page 4446]]
Analysis for a discussion of the projected costs of compliance with the
final rule) will affect a licensee's decision on whether to seek
renewal of its operating license in any material way.
Comment 21: One commenter states that the new requirement at 10 CFR
50.76 is unnecessary because (1) licensees have an obligation to
inform, and obtain advanced approval from, the NRC of any changes that
would constitute a transfer of the license, directly or indirectly, (2)
licensees have an obligation to inform the NRC if changes in their
financial qualifications may have significant implications for public
health and safety, and (3) the NRC monitors the financial and industry
trade press.
Response: The NRC disagrees with the commenter that the creation of
10 CFR 50.76 is unnecessary. Licensees' obligation to inform and obtain
prior NRC approval of a license transfer is separate from the issue of
the need for licensee notification and provision of information about
financial qualifications when a licensee changes its status from an
electric utility to a non-electric utility without an associated
transfer of control of the license. Although licensees have an
obligation to report significant changes in their financial
qualifications, it is possible that some licensees could believe that
they will remain financially qualified notwithstanding their change in
status from an electric utility to a non-electric utility and thus not
consider that event to be a reportable change in financial
qualifications. Furthermore, while the NRC monitors the financial and
industry trade press, the NRC believes that a licensee transition from
electric utility to non-electric utility status is a significant event
that automatically warrants a separate financial qualifications review.
This type of review already occurs when the transition is associated
with a license transfer. Section 50.76 would simply ensure that
financial qualification reviews occur as part of a transition from an
electric utility to non-electric utility status without a license
transfer.
Comment 22: One commenter states that the new section creates
additional regulatory issues and burdens without any corresponding
safety benefit. A complicating issue that might arise is determining
precisely what types of changes would cause a licensee to cease being
an electric utility. The NRC and the licensee may disagree that a
triggering event has occurred. If so the licensee may not notify the
NRC before the 75-day deadline.
Response: The NRC disagrees with the commenter that the new section
creates additional regulatory issues and burdens without any
corresponding benefit. The benefit of this action is ensuring on at
least one occasion that a licensee who transitions from electric
utility to non-electric utility status without a license transfer will
continue to have the resources necessary to operate the power plant in
a manner that protects public health and safety and is consistent with
the common defense and security.
With respect to disagreement on what constitutes a transition from
electric utility to non-electric utility status, the commenter did not
provide any discussion of such circumstances. The NRC is unaware of any
significant misunderstandings of what constitutes an electric utility
under 10 CFR 50.2. Therefore, the commenter does not appear to raise a
significant issue.
Comment 23: One commenter suggests that, instead of the proposed
regulatory changes, the NRC should update the definition of ``electric
utility'' in 10 CFR 50.2 to reflect the changes that have occurred in
the electric utility industry. For example, the definition should
provide flexibility to include utilities that may no longer be subject
to cost of service rate making. The commenter also suggests that the
definition should be flexible enough to include entities other than
traditional vertically integrated utilities, such as those that have
desegregated their business into generating and transmission/
distribution entities. The commenter concludes that the definition of
electric utility should include (1) a generating company that is part
of a diversified holding company or other corporate structure and (2)
an entity that generates and sells electricity at market-based rates,
at least so long as the company's market-based rate authority is
governed by tariffs that are subject to the jurisdiction of a rate
regulatory agency such as the Federal Energy Regulatory Commission.
Response: The commenter's suggestions would undermine the NRC's
longstanding basis for not requiring financial qualifications reviews
for electric utilities, which is that the recovery of costs is assured.
Accordingly, the NRC does not believe that the commentator's
suggestions warrant further consideration.
Comment 24: One commenter states that if the proposed changes to 10
CFR 50.33 are finalized, then the NRC should adopt and implement
procedures to formally and continually monitor the financial
qualifications of non-electric utility power reactor licensees.
Response: The NRC will consider the commenter's suggestion when the
NRC's internal guidance for reviewing licensees' financial information
is revised.
Section-by-Section Analysis
10 CFR 50.33, Contents of Applications; General Information
Section 50.33(f)(2) is amended to state that power reactor
applicants for license renewal need not provide financial
qualifications information. Nonpower reactor applicants would continue
to submit financial qualifications information in their applications. A
new sentence is added to Sec. 50.33(f)(2) to specify that nonpower
reactor license renewal applicants must continue to submit financial
qualifications information in their applications.
10 CFR 50.76, Licensee's Change of Status; Financial Qualifications
A new Sec. 50.76 requires that a licensee changing from an electric
utility to a non-electric utility entity (i.e., a company that does not
obtain revenue from the cost-of-service rate making process), in a
manner other than a license transfer under 10 CFR 50.80, must submit
the financial information required by Sec. 50.33(f)(2) for obtaining an
operating license. The section also requires that the licensee notify
the NRC 75 days before the transition and provide the financial
information at that time. The language of the proposed rule was changed
slightly to spell out ``seventy-five.''
Availability of Documents
The NRC is making the documents identified below available to
interested persons through one or more of the following:
Public Document Room (PDR). The NRC Public Document Room is located
at 11555 Rockville Pike, Public File Area O-1 F21, Rockville, Maryland.
Rulemaking Web site. The NRC's interactive rulemaking Web site is
located at http://ruleforum.llnl.gov. The documents may be viewed and
downloaded electronically via this Web site.
The NRC's Public Electronic Reading Room (PERR). The NRC's public
electronic Reading Room is located at http://www.nrc.gov/reading-rm.html.
The NRC staff contact (NRC Staff). Single copies of the final rule,
the Regulatory Analysis, and the Environmental Assessment may be
obtained from George J. Mencinsky, Office of Nuclear Reactor
Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001.
[[Page 4447]]
Alternatively, you may contact Mr. Mencinsky at (301) 415-3093 or via
e-mail to [email protected].
----------------------------------------------------------------------------------------------------------------
Document PDR Web PERR NRC Staff
----------------------------------------------------------------------------------------------------------------
Regulatory Analysis................................... X X ML032460795 X
Environmental Assessment.............................. X X ML032460815 X
Public Comments Received.............................. X ............ ML032670833 X
----------------------------------------------------------------------------------------------------------------
Voluntary Consensus Standards
The National Technology Transfer and Advancement Act of 1995, Pub.
L. 104-113, requires that Federal agencies use technical standards that
are developed or adopted by voluntary consensus standard bodies unless
the use of such a standard is inconsistent with applicable law or is
otherwise impractical. In this final rule, the NRC eliminates the
requirement that applicants for power reactor license renewal provide
financial qualifications information and adds a new requirement for
submission of financial information on electric utilities holding
operating licenses for nuclear power reactors if the applicants cease
to be electric utilities in a manner other than a license transfer
under 10 CFR 50.80. This final rule would not constitute a standard
that establishes generally applicable requirements, and the requirement
to use a voluntary consensus standard is not applicable.
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 is not a major Federal
action significantly affecting the quality of the human environment,
and, therefore, an environmental impact statement is not required.
This rulemaking will not increase the probability or consequences
of accidents. No changes are being made in the types of any effluents
that may be released off site, and there is no increase in public
radiation exposure. Therefore, there are no radiological impacts
associated with the action. The rulemaking does not involve
nonradiological plant effluents and has no other environmental impact.
Therefore, no nonradiological impacts are associated with the action.
Therefore, the NRC determines that there will be no off site impact to
the public from this action.
The basis for NRC's finding is set forth in an Environmental
Assessment on this final rule. The Environmental Assessment is
available as indicated in the section under the Availability of
Documents heading. The NRC requested the views of the States on the
environmental assessment for the rule and did not receive any comments
from the States.
Paperwork Reduction Act Statement
This final rule eliminates the burden on non-electric utility power
reactor licensees to submit financial qualifications information upon
license renewal as required by the current Sec. 50.33(f)(2). The public
burden reduction for this information collection is estimated to
average 100 hours per request. Power reactor licensees that transition
from electric utility to non-electric utility power reactor entities
without transferring the license would be required to provide this
information under a new Sec. 50.76. Because the burden reduction for
this information collection is insignificant, Office of Management and
Budget (OMB) clearance is not required. Existing requirements were
approved by the Office of Management and Budget, approval number 3150-
0011.
Public Protection Notification
The NRC may not conduct or sponsor, and a person is not required to
respond to, a request for information or an information collection
requirement unless the requesting document displays a currently valid
OMB control number.
Regulatory Analysis
The Commission has prepared a Regulatory Analysis on this final
regulation. The analysis examines the costs and benefits of the
alternatives considered by the Commission. The Regulatory Analysis may
be examined, and/or copied for a fee, at the NRC's Public Document Room
at One White Flint North, 11555 Rockville Pike (first floor),
Rockville, Maryland. Single copies of the analysis may be obtained from
George J. Mencinsky, Office of Nuclear Reactor Regulation, U.S. Nuclear
Regulatory Commission, telephone (301) 415-3093, e-mail [email protected].
Regulatory Flexibility Certification
In accordance with the Regulatory Flexibility Act of 1980, (5
U.S.C. 605(b)), the Commission certifies that this final rule will not
have a significant economic impact on a substantial number of small
entities. This final rule affects only the licensing and operation of
nuclear power plants. The companies that own these plants do not fall
within the scope of the definition of ``small entities'' set forth in
the Regulatory Flexibility Act or the size standards established by the
NRC (10 CFR 2.810).
Backfit Analysis
The NRC has determined that the backfit rule does not apply to this
final rule. The final rule will (1) permissively relax the current
requirement in Sec. 50.33(f) for submission of financial qualifications
information by entities other than electric utilities seeking renewal
of their nuclear power plant operating licenses, and (2) impose a new
requirement for submission of financial information on electric
utilities who hold operating licenses for nuclear power reactors and,
then cease to be electric utilities in a manner other than a license
transfer under 10 CFR 50.80. These information collection and reporting
requirements do not constitute regulatory actions to which the backfit
rule applies. In addition, with respect to the permissive relaxation in
Sec. 50.33(f), such relaxations do not ``impose'' a requirement, which
is an essential element of ``backfitting'' as defined in Sec.
50.109(a)(1).
Accordingly, the final rule's provisions do not constitute a
backfit and a backfit analysis need not be performed. However, the
staff has prepared a regulatory analysis that identifies the benefits
and costs of the final rule and evaluates other options for addressing
the identified issues. As such, the regulatory analysis constitutes a
``disciplined approach'' for evaluating the merits of the final rule
and is consistent with the intent of the backfit rule.
Small Business Regulatory Enforcement Fairness Act
In accordance with the Small Business Regulatory Enforcement
Fairness Act of 1996, the NRC has determined that this action is not a
major rule and has verified this determination with the Office of
[[Page 4448]]
Information and Regulatory Affairs of OMB.
List of Subjects in 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.
0
For the reasons set forth 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. 552 and 553, the NRC is adopting
the following amendments to 10 CFR part 50.
PART 50--DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION
FACILITIES
0
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. 936, 937,938, 948, 953, 954, 955, 956, as amended, sec. 234,
83 Stat. 444, as amended (42 U.S.C. 2132, 2133, 2134, 2135, 2201,
2232, 2233, 2236, 2239, 2282); secs. 201, as amended, 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 (42 U.S.C. 5841). Section 50.10 also issued under secs. 101,
185, 68 Stat. 955, as amended (42 U.S.C. 2131, 2235); sec. 102, Pub.
L. 91-190, 83 Stat. 853 (42 U.S.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 Q 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 and 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).
0
2. In Sec. 50.33, paragraph (f)(2) is revised to read as follows:
Sec. 50.33. Contents of applications; general information.
* * * * *
(f) * * *
(2) If the application is for an operating license, the applicant
shall submit information that demonstrates the applicant possesses or
has reasonable assurance of obtaining the funds necessary to cover
estimated operation costs for the period of the license. The applicant
shall submit estimates for total annual operating costs for each of the
first five years of operation of the facility. The applicant shall also
indicate the source(s) of funds to cover these costs. An applicant
seeking to renew or extend the term of an operating license for a power
reactor need not submit the financial information that is required in
an application for an initial license. Applicants to renew or extend
the term of an operating license for a nonpower reactor shall include
the financial information that is required in an application for an
initial license.
* * * * *
0
3. Section 50.76 is added to read as follows:
Sec. 50.76. Licensee's change of status; financial qualifications.
An electric utility licensee holding an operating license
(including a renewed license) for a nuclear power reactor, no later
than seventy-five (75) days prior to ceasing to be an electric utility
in any manner not involving a license transfer under Sec. 50.80, shall
provide the NRC with the financial qualifications information that
would be required for obtaining an initial operating license as
specified in Sec. 50.33(f)(2). The financial qualifications information
must address the first full five years of operation after the date the
licensee ceases to be an electric utility.
Dated at Rockville, Maryland, this 26th day of January 2004.
For the Nuclear Regulatory Commission.
Annette L. Vietti-Cook,
Secretary of the Commission.
[FR Doc. 04-1942 Filed 1-29-04; 8:45 am]
BILLING CODE 7590-01-P