[Federal Register Volume 69, Number 137 (Monday, July 19, 2004)]
[Notices]
[Pages 43278-43282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-16302]
[[Page 43277]]
-----------------------------------------------------------------------
Part V
Nuclear Regulatory Commission
-----------------------------------------------------------------------
Issuance of Draft Supplement Standard Review Plan; Notices
Federal Register / Vol. 69, No. 137 / Monday, July 19, 2004 /
Notices
[[Page 43278]]
-----------------------------------------------------------------------
NUCLEAR REGULATORY COMMISSION
Issuance of Draft Supplement Standard Review Plan
AGENCY: Nuclear Regulatory Commission.
ACTION: Issuance of draft supplement to Standard Review Plan for public
comment.
-----------------------------------------------------------------------
SUMMARY: The Nuclear Regulatory Commission (NRC) is issuing a draft
supplement to the Standard Review Plan (SRP) which expands NUREG-1577,
Rev. 1, ``Standard Review Plan on Power Reactor Licensee Financial
Qualifications and Decommissioning Funding Assurance.'' The proposed
draft supplement to the SRP provides criteria for evaluating the use of
an insurance policy to provide decommissioning funding assurance under
10 CFR 50.75. The NRC finds that the proposed criteria will enable the
staff to determine whether through the use of an insurance policy,
there is reasonable assurance of providing decommissioning funding to
ensure adequate protection of public health and safety. The NRC is
interested in stakeholder comments that will improve the safety
benefits, effectiveness, and efficiency of the review of insurance
policies to provide decommissioning funding assurance.
DATES: Submit comments by August 18, 2004. Comments received after this
date will be considered if it is practical to do so, but the NRC is
able to assure consideration only for the comments received before this
date.
ADDRESSES: You may submit comments by any one of the following methods.
Please include the following reference, NUREG-1577, Rev. 1, in the
subject line of your comments. Comments on the draft supplement in
writing or in electronic form will be available for public inspection.
Because your comments will not be edited to remove identifying or
contact information, the NRC cautions you against including any
information in your submission that you do not want to be publicly
disclosed.
Mail comments to: Chief, Rules and Directives Branch, Mail Stop TG-
D59, Nuclear Regulatory Commission, Washington, DC 20555-0001.
E-mail comments to: [email protected]. You may also submit comments
via the NRC's rulemaking Web site at http://ruleforum.llnl.gov. This
site provides the capability to upload comments as files (any format),
if your Web browser supports that function. Address questions about the
rulemaking Web site to Carol Gallagher at (301) 415-5905; e-mail
[email protected].
Hand deliver comments to: One White Flint North, 11555 Rockville
Pike, Rockville, Maryland, 20852, between 7:30 a.m. and 4:15 p.m. on
Federal workdays, telephone (301) 415-1966.
Fax comments to: Chief, RDB, Nuclear Regulatory Commission at (301)
415-5144.
Copies of the draft supplement specified in this notice and other
publicly available documents related to this draft supplement,
including public comments received, can be viewed electronically on
public computers in the NRC Public Document Room (PDR), located at One
White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852,
Room O-1F21, and open to the public on Federal workdays from 7:45 a.m.
until 4:15 p.m. The PDR reproduction contractor will make copies of
documents for a fee. Selected documents, including public comments on
the draft supplement, can be viewed and downloaded electronically via
the NRC's rulemaking Web site at http://ruleforum.llnl.gov.
Publicly available NRC documents created or received in connection
with this draft supplement are also available electronically via the
NRC's Electronic Reading Room at http://www.nrc.gov/reading-rm/adams.html. From this site, the public can gain entry into the NRC's
Agencywide Document Access and Management System (ADAMS), which
provides text and image files of NRC's public documents. If you do not
have access to ADAMS, or if there are problems in accessing the
documents located in ADAMS, contact NRC PDR Reference staff at (800)
397-4209, (301) 415-4737 or by e-mail at [email protected].
FOR FURTHER INFORMATION CONTACT: Michael A. Dusaniwskyj, Office of
Nuclear Reactor Regulation, Mail Stop O-12D3, United States Nuclear
Regulatory Commission, Washington, DC 20555-0001, telephone (301) 415-
1260, or e-mail [email protected].
SUPPLEMENTARY INFORMATION:
Abstract
The NRC is issuing this draft supplement to the SRP to provide
criteria that will be used to review the insurance method of providing
decommissioning funding assurance. This draft supplement reflects
current regulations and policy, and will be updated for any future
initiatives.
Proposed Supplement to Standard Review Plan: Decommissioning Funding
Insurance for Power Reactors
I. Areas of Review
The NRC is issuing this draft supplement to describe criteria that
will be used by the staff to review power reactor license applicants'
and licensees' insurance methods of providing required decommissioning
funding assurance. This document provides detailed criteria with
respect to section III.2(f)(4) of NUREG-1577, Rev. 1 and as such will
supplement NUREG-1577, Rev. 1, ``Standard Review Plan on Power Reactor
Licensee Financial Qualifications and Decommissioning Funding
Assurance'' (October 2003).
II. Acceptance Criteria
Decommissioning funding insurance may be referred to by different
names such as ``decommissioning insurance,'' ``decommissioning
liability insurance,'' ``decommissioning expense liability policy,''
etc. The label is much less important than (1) the terms and conditions
of the policy relating to (a) the amount and scope of coverage and (b)
the certainty of availability of funds, and (2) the qualifications of
the issuer of the insurance policy. For these key elements, acceptance
criteria are provided below.
Amount and Scope of Insurance Coverage
1. Per 10 CFR 50.75(b)(1), Amount of Coverage Equal or Greater than
Table of Minimum Amounts (Sec. 50.75(c)) for NRC Sec. 50.2
Decommissioning Costs (e.g., excluding cost of removal and disposal of
spent fuel and non-radioactive structures and materials beyond that
necessary to terminate the license) or a Site-Specific Decommissioning
Cost Estimate (Sec. 50.75(b)(4)).
Confirm that the policy provides an adequate amount of coverage
(``liability limit'') for NRC decommissioning costs, which is an amount
not less than the table of minimum amounts (Sec. 50.75(b)(1)).
Although the ``Declarations'' section of the policy (often the cover
page) typically shows the ``limit of liability'' or ``face amount,'' it
is important to review the entire policy. The amount of coverage should
be a specific dollar number and not be a schedule or formula contingent
on projected earnings under the policy. Coverage for amounts only in
excess of the minimum amounts (or site-specific cost estimate) and up
to the actual cost of decommissioning does not satisfy the regulations.
The insurance policy should guarantee at least the total amount of
currently estimated
[[Page 43279]]
decommissioning costs (NUREG-1577, Rev. 1 Sec. III.2.f(2)).
Determine whether the amount of coverage includes both NRC and non-
NRC costs. If a policy covers both NRC and non-NRC costs, they should
be separately identified and only NRC-required costs should be assessed
as equal to or greater than the minimum amount. See Sec. Sec. 2.1.2
and 2.1.7 NUREG 1.159 Rev. 1 and NUREG-1577, Rev. 1 Sec. III.2.a(3).
The same approach should be used if the amount of coverage includes
costs for onsite spent fuel management (see NUREG-1700, Rev. 1).
Evaluate whether there are any stated sublimits. In particular, a
policy containing a sublimit for NRC costs lower than the minimum
amount may render the policy non-compliant, even if the sublimit
applies only in the event of premature closure or only in the event of
cancellation, termination, non-renewal or rescission of the policy.
Different limits for decommissioning that occur during the initial
license period or during the period of license renewal are acceptable
if they are for amounts not less than the NRC minimum amounts.
The amount of coverage should be capable of being adjusted (Sec.
50.75(b)(2) and Sec. 2.1.5, Reg. Guide 1.159, Rev. 1). The policy
language may not be clear on whether and how the limits of liability
may be adjusted. Typically, this is done through ``endorsement.'' Find
any ``changes'' clause (see 14 below). A policy with limits
that can be adjusted down but not upwards would require that another
financial assurance mechanism make up the difference.
Determine whether there are any ``deductibles.'' A deductible may
be called a ``retention,'' a ``self-insured retention,'' ``self-
insurance,'' or other euphemism. Typically, the deductible is expressed
as a flat dollar amount that must be paid by the insured before the
insurer's liability under the policy is triggered. A deductible is
acceptable if the policy provides ``first dollar coverage'' of the
deductible by the insurer. First dollar coverage means that the insurer
is responsible for paying the deductible amount (e.g., into the standby
trust fund), while the insured is separately responsible for
reimbursing the insurer for the amount of the deductible. Another type
of deductible involves the insured sharing in some defined proportion
of the decommissioning expenses from a dollar starting point (termed
the ``attachment point'') until some defined dollar ending point.
Absent first dollar coverage expressly provided by the policy, the
licensee must provide another assurance mechanism in combination with
insurance to cover deductible amounts or demonstrate that its sinking
funds can cover the deductible(s) (Sec. 50.75(e)(1)(vi)). The combined
amount should at least equal currently estimated decommissioning costs
(NUREG-1577, Rev. 1 Sec. 111.2.f(2)).
2. Annual Adjustment of Minimum Amount of Coverage (Sec.
50.75(c)(2)).
If this is not the first year the policy is used, determine whether
the amount of coverage provided satisfies the adjusted required minimum
amount.
3. Scope of Coverage (Sec. 50.2).
Verify the scope of coverage, which should be for NRC (Sec. 50.2)
defined decommissioning costs. Relevant language defining the scope may
appear in different sections of the policy, such as under ``Insuring
Agreement, Definitions, Exclusions, Conditions, and Declarations.''
Review any policy language that defines covered decommissioning
costs only as those incurred by reason of work performed during the
policy period; such a limit is inconsistent with the payment of funds
into the standby trust prior to decommissioning costs being incurred by
the licensee by reason of work actually performed.
If the scope of the policy covers non-NRC (i.e., greenfield costs)
costs as well as NRC costs, verify that coverage of non-NRC costs is
limited in amount so that those costs do not draw on money intended for
NRC costs. Similarly, if the policy covers spent fuel management
financial assurance (Sec. 50.54(bb)), verify that coverage of these
costs will not draw on money intended for coverage under Sec. 50.75
(see C.11 ``Use of Funds'' NUREG 1.184).
Determine if the scope of coverage has been unduly restricted by
any ``exclusions'' written into the policy. Exclusions of costs not
intended to be covered under decommissioning, not appropriate for
coverage under decommissioning insurance, and costs covered under other
insurance programs should be acceptable.
Costs NOT intended to be covered under decommissioning include:
Operational expenses.
Accident response (see Sec. 50.54(w)).
Repair or replacement of damaged property.
On-site spent nuclear fuel management (see Sec.
50.54(bb)).
Decontamination or cleanup prior to permanent cessation of
operations.
Transportation and disposal of spent fuel.
Costs not appropriate under insurance for decommissioning funding:
Costs due to fraudulent, dishonest, or criminal acts,
unless such acts result in decommissioning.
Fines, penalties, etc. imposed for violation of Federal or
State law.
Intentional, willful, or deliberate non-compliance, unless
such acts result in decommissioning.
Bodily injury/property damage*.
Workers compensation, disability benefits, unemployment
compensation*.
Post-accident decommissioning*.
Note: *Costs covered under other insurance.
It is common to find legal fees excluded from insurance coverage in
liability policies. However, such costs related to decommissioning must
be covered by decommissioning insurance if incurred.
NRC review should be based on the entire policy and all
endorsements and not solely on any Certificate of Insurance provided or
solely on the Declarations page.
Certainty of Coverage: Issuer Qualifications
4. Issuer Qualifications.
Determine the identity of the issuer of the policy (not to be
confused with any broker or agent involved in the transaction). The
name and address of the issuer should be included in the policy (Sec.
A.12.3, NUREG-1757).
Determine the ``domicile'' of the insurer, which may be a U.S.
state or a foreign country where the insurer is incorporated. Special
terms and conditions are appropriate for insurers domiciled outside of
the U.S.
The insurer must be ``licensed'' by authorities of the State where
the relevant nuclear plant is located to transact the business of
insurance, (Sec. 2.3.3, NUREG 1.159 Rev. 1). One can verify that the
insurer is licensed by checking with the insurance commission or agency
in that state; many states provide on-line directories of their
licensed insurers.
Where practical, review databases or reference documents to
determine whether the insurer is a commercial firm capable of selling
policies to anyone or is instead an organization-- termed a
``captive,'' a ``risk retention group (RRG),'' or ``mutual'' insurer--
that can sell insurance only to one or a limited number of reactor
owners.
A policy issued by a captive insurer that covers only a single
owner's reactor(s), often termed a ``pure captive,'' will be
problematic. Such a policy is synonymous to self-insurance, which NRC
regulations do not permit.
A mutual, captive, or RRG that can insure more than a single
owner's reactors also may be problematic unless the insurer covers a
relatively large number of owners and reactors.
[[Page 43280]]
A group captive, RRG, or mutual insurer is acceptable if:
(a) The Internal Revenue Service has issued a letter ruling finding
that premiums paid to the insurer will be considered deductible for tax
purposes, and
(b) The issuer of the insurance policy has received a financial
strength or safety rating of A-or better from A.M. Best, A-or better
from Standard & Poor's, A-3 or better from Moody's, A-or better from
Fitch, or B-or better from Weiss Rating, as its most recent, issuer-
specific rating.
Note: The issuer of the policy must be acceptable to the NRC. As
required for nuclear energy liability insurance, the Commission may
require proof that the organization or organizations which have
issued policies are legally authorized to issue them and do business
in the United States and have clear ability to meet their
obligations (Sec. 140.18(a)).
5. The Trustee of the Standby Trust Must Be Acceptable to NRC
(Sec. 50.75(e)(1)(iii)(A)(2)).
An acceptable trustee includes (1) an appropriate State or Federal
government entity or (2) an entity that has the authority to act as a
trustee and whose trust operations are regulated and examined by a
Federal or State Agency (Sec. 50.75(e)(1)(iii)(A)(2)). See Sec. 2.2.6
of NUREG 1.159 Rev. 1 for information on verifying the acceptability of
financial institutions as trustees. One can also use Sec. 4.3.2.15 of
NUREG-1757, Vol. 3 to determine the acceptability of a non-government
trustee.
Certainty of Coverage: Terms and Conditions of Policy
6. Covered Licensee(s).
The policy must include the name and address of the covered
licensee(s), their NRC license number(s), and the name(s) and
address(es) of the covered facility(ies), (Sec. A.12.3, NUREG-1757).
7. Licensee's Regulatory Obligations.
The policy should contain a statement of the licensee(s)'
regulatory obligations as the reason for the policy.
8. Duration/Term of Coverage (Sec. 50.75(e)(1)(iii)(A)(1)).
The policy must state an ``effective date'' (or ``inception date'')
and may state an expiration or termination date.
Verify that the term of coverage either is open-ended, or, if
written for a specified term ending on a particular date, that the
policy is automatically renewed, unless the issuer notifies NRC, the
beneficiary, and the licensee of its intent not to renew; as stated by
Sec. 50.75(e)(1)(iii)(A)(1), such a provision must require notice at
least 90 days prior to the renewal date, which is best evidenced by
return receipts.
9. Cancellation/Termination and Non-Renewal.
The policy should require a minimum of 90 days prior notice to NRC,
as evidenced by return receipts, of the insurer's or the insured's
intent to cancel, non-renew, or terminate the policy (Sec. A.12.3,
NUREG-1757, Vol. 3, & Sec. 50.75(e)(1)(iii)(A)(1) (for non-renewal
only)).
It is acceptable if the policy states that the insurer may cancel
or terminate the policy if the premium is not paid. Some policies may
provide only a short period (e.g., 10 days) prior to cancellation/
termination in the event of non-payment of premium or
misrepresentation/fraud.\1\ Such a short period is not acceptable,
because it does not allow sufficient time for the licensee to arrange
alternative coverage or for NRC to take appropriate action prior to its
cancellation/termination if the licensee fails to provide an acceptable
substitute. A period of 90 days should be the minimum following notice
to NRC and the insured. A provision stating that the insurer may not
cancel, terminate, or non-renew the policy if the licensee is named as
a ``debtor in bankruptcy proceedings'' is desirable.
---------------------------------------------------------------------------
\1\ Misrepresentation/fraud is a basis for declaring an
insurance policy null and void through the legal process of
rescission.
---------------------------------------------------------------------------
10. Automatic Payment Prior to Cancellation/Termination/Non-renewal
(Sec. 50.75(e)(1)(iii)(A)(1)).
The insurance policy must provide that the full ``face amount'' for
NRC decommissioning costs be paid to the beneficiary (i.e.,
decommissioning trust) automatically prior to policy cancellation/
termination/non-renewal ``without proof of forfeiture'' if the licensee
fails to provide a replacement acceptable to the NRC within 30 days
after the licensee or NRC receives notice of cancellation/termination/
non-renewal, as evidenced by return receipts (Sec.
50.75(e)(1)(iii)(A)(1) provides 30 days after notice of intent to
cancel).
11. Beneficiary.
The ``beneficiary'' should be the standby trust, but may be defined
as the licensee of the covered facility. A policy should be acceptable
even if it does not designate a beneficiary, so long as it guarantees
that funds drawn from the policy must be paid into the standby trust
(see 20 below).
12. Bankruptcy or Insolvency of the Insured.
The policy should contain a provision to the effect that bankruptcy
or insolvency (a condition of financial distress) of the insured does
not relieve the insurer of any of its obligations.
13. Primary Not Excess Insurance.
The policy should not contain a clause to the effect that if the
licensee has other valid and collectible insurance applicable to
decommissioning, then the decommissioning insurance under review shall
be ``excess insurance'' over such other coverage. Because licensee
property insurance (e.g., Nuclear Electric Insurance Limited) may cover
decommissioning in certain situations, certainty and timeliness of
decommissioning coverage may be impeded by having to resolve which
insurance coverage is primary or excess.
14. Changes.
The policy should state that its terms shall not be waived or
changed except by written ``endorsement'' \2\ issued to form a part of
the policy and unless sixty days prior written notice has been given to
the NRC, and the NRC has not objected within that time. A clause that
permits the insurer and the insured to agree to changes in the policy
against the disapproval of the NRC is not acceptable.
---------------------------------------------------------------------------
\2\ An ``endorsement'' is a document that is treated as an
integral part of the policy although it typically is issued later.
Endorsements will be labeled as such and numbered.
---------------------------------------------------------------------------
15. Designated Agent.
The policy should identify an agent of the insurer who is to
receive all notices and other required communications and whose
requests, demands, and agreements are deemed to have been made directly
by the insurer (see, for example, clause 16 in 10 CFR 140.91). Complete
contact information should be provided in the policy.
16. Authorized Signatories (Sec. 2.1.3, NUREG 1.159, Rev. 1).
The policy must be signed and dated. The parties signing the policy
must be authorized to act for the licensee and the insurer in the
transactions. A duly authorized representative may be either a named
individual or any individual occupying a named position. All required
signatures should be notarized. For a licensee that is a corporation or
limited liability company, a principal executive officer of at least
the level of vice president should sign; for a licensee that is a
municipality, State, Federal, or other public agency, either a
principal executive officer or ranking elected official should sign. A
person is deemed to be a duly authorized representative if the person
is authorized in writing by an individual described above, and the
authorization specifies either an individual or a position having
responsibility for the overall operation of the reactor or power
company, such as the position of plant manager, a superintendent, or
person of equivalent responsibility.
[[Page 43281]]
17. Original, Conformed Copy, or Photocopy of Original (Sec.
2.1.4, NUREG 1.159, Rev. 1).
NRC may review the original, a conformed copy, or a photocopy of
the original policy. A conformed copy is a word for word copy of a
document, which may be marked ``conformed copy.'' A conformed copy may
substitute the printed or typewritten name of each signatory in place
of each signature. If the copies are not signed, they should be
accompanied by a declaration signed by an officer authorized to sign
for the organization, certifying that they are ``complete and accurate
copies'' of the original document. A photocopy is produced by a process
that accurately reproduces the original and is marked as a ``copy.'' An
originally signed duplicate is a conformed copy or photocopy that bears
originally handwritten signatures.
18. Policy Must Conform to Applicable State Law (Sec. 2.3.1, NUREG
1.159, Rev. 1).
A determination that the policy conforms to applicable state law
can be based on opinion letters, which are best provided by an
independent law firm or lawyer that practices insurance law and/or by
an insurance broker's in-house counsel. The opinion letter should
identify the state whose law is applicable (e.g., the state where the
reactor is located, the state where the policy is issued) and should
state that the policy conforms to the laws of that state. The counsel
signing the letter should be admitted to the bar of the state whose law
is at issue and the letter should so state; NRC can confirm the
lawyer's qualifications by contacting the state bar association or by
checking with legal reference books (e.g., Martindale-Hubbell Law
Directory).
19. State Public Utility Commission Approval or Non-objection.
For electric utility licensees with access to non-bypassable
charges, the licensee's State public utility commission must have
approved the use of the insurance policy or raised no objection to the
use of the particular policy. There should be some documentation of
such approval or non-objection (e.g., correspondence between the
licensee and Public Utility Commission).
20. Assignment.
The policy should contain a provision allowing ``assignment''
(i.e., transfer) of the policy to a successor licensee. The policy may
specify that the assignment is conditional upon the consent of the
insurer so long as the policy also states that such consent ``will not
be unreasonably refused.'' Right of assignment enables a licensee to
redeem value from the policy if ownership or operation of the covered
facility is transferred to a new party. The insurer may want the right
to consent to or refuse assignment in order to protect itself against
transfers of ownership or operation that would unfairly prejudice the
interests of the insurer in a manner not contemplated originally (e.g.,
transfer of the facility to an insolvent owner). Refusal to consent to
assignment would be ``unreasonable'' where the interests of the insurer
are not prejudiced by a successor licensee replacing the original
insured party.
21. Proceeds Payable to a Decommissioning Trust Fund (Sec.
50.75(e)(1)(iii)(A)(2)).
The insurance policy must be payable to a trust established for
decommissioning costs (Sec. 50.75(e)(1)(iii)(A)(2)). The trust may or
may not be identified in the policy as the ``beneficiary'' of the
insurance.
If there are any conditions or limitations in the policy regarding
payments to the trust fund, these should be assessed for their impact
on availability and certainty of financial assurance. For example, it
is preferable that the policy does not state that payments shall be
made only on the ``default'' of the licensee to satisfy decommissioning
requirements.
A policy may identify several different parties to whom proceeds
are payable, and these will need to be reviewed and clarified; NRC
should expect that improvements in drafting can eliminate any
ambiguities and inconsistencies in the policy.
Although the regulations clearly state that the insurance must be
payable to a decommissioning trust, they do not state when or how to
make the payments. Any policy terms that would impact the timing and
amount of payments into the trust fund should be reviewed from the
point of view of the guiding principle of having reasonable assurance
of having funds when needed. The NRC's decommissioning regulations
contemplate that decommissioning payments will be made from the trust
and not by the insurer, so the insurer must timely transfer ample funds
to the trust, if not all the funds covered by the policy at once, on a
schedule consistent with access to funds allowed by Sec. 50.82(a)(8).
For funds not required to meet near term pay-out needs, it is
acceptable if the policy offers the option of retaining those funds in
the insurance mechanism.
22. Role and Rights of the Insurer.
The insurer must invest all NRC decommissioning funds transferred
from prepaid funds or an external sinking fund, and all earnings
thereon, consistent with the prudent investor standard set forth in 18
CFR part 35 subpart E. This should be stated as a condition in the
policy.
The policy may give the insurer the right to monitor all aspects of
decommissioning to which the policy applies, and the right of
reasonable access to the site. Moreover, the insured may be required to
seek the insurer's review and approval of individuals and firms under
consideration to perform decommissioning. Such provisions are subject
to negotiation between the insurer and the insured and are problematic
only if they interfere with NRC's regulatory controls and oversight of
decommissioning or the decommissioning flexibility granted by Sec.
50.59.
The staff shall evaluate whether there are policy provisions
relating to ``claims procedures'' or ``claims management,'' which
indicate that the insurer will be involved directly in the review,
adjustment, approval, and payment of claims for decommissioning
expenses. These provisions are subject to negotiation between the
insurer and the insured; however, actual payment of claims (i.e.,
cutting and sending checks) may best be performed through the trust.
These provisions are problematic if they undermine the system of
financial controls established under Sec. 50.82(a)(8), or if they
interfere with the insured's ability to complete decommissioning in a
timely manner and/or to perform decommissioning activities under plans
approved by the NRC or orders issued by the NRC.
Note: The terms and conditions of the policy must be acceptable
to the NRC. The NRC reserves the right to take the following steps
to ensure an acceptable policy: either independently or in
cooperation with the Federal Energy Regulatory Commission and the
licensee's state Public Utility Commission, take additional actions
as appropriate on a case-by-case basis, including ensuring or
directing the addition or removal of clauses through written
endorsement.
23. The Standby Trust Must Be Acceptable to NRC (Sec.
50.75(e)(1)(iii)(A)(2)).
The terms of an acceptable standby trust would be similar to the
sample standby trust language contained in Appendix B-3.2 of NUREG
1.159, Rev. 1. Licensees that are ``electric utilities'' (as defined in
Sec. 50.2) that use prepayment or external sinking fund trusts must
include the terms and conditions found in Sec. 50.75(h)(2) relating to
disbursement or payments. Note that amended regulations applicable to
decommissioning trusts of electric utility and non-electric utility
[[Page 43282]]
licensees became effective on December 24, 2003. Section 50.75 requires
that licensees that are not ``electric utilities'' (as defined in Sec.
50.2) must include in their trusts the terms and conditions found in
Sec. 50.75(h)(1) relating to investment of funds (Sec.
50.75(h)(1)(i)), management of funds (Sec. 50.75(h)(1)(ii)), amendment
of trusts (Sec. 50.75(h)(1)(iii)), and disbursement or payments from
trusts (Sec. 50.75(h)(1)(iv)).
A tax-qualified decommissioning trust set up under 468A of the
Internal Revenue Code and associated regulations is not likely capable
of serving as a standby trust because the amounts that can be placed in
such a trust are limited by the Commissioner of Internal Revenue.
However, a non-tax qualified trust potentially could serve as a
standby trust if it meets the requirements noted above.
III. Evaluation Findings
The reviewer verifies that sufficient information has been provided
to satisfy the requirements of this Standard Review Plan section and
the underlying regulations, and concludes that his or her evaluation is
sufficiently complete and adequate to support the conclusion to be
included in the staff's safety evaluation report that the applicant has
satisfied the NRC's decommissioning funding assurance requirements
using insurance.
IV. Implementation
The following is intended to provide guidance to applicants and
licensees regarding the NRC staffs plans for using this SRP.
Except in those cases in which the applicant proposes an acceptable
alternative method for complying with specified portions of the NRC's
regulations, the method described herein will be used by the staff in
its evaluation of conformance with Commission regulations.
V. References
U.S. Nuclear Regulatory Commission, Standard Review Plan on Power
Reactor Licensee Financial Qualifications and Decommissioning
Funding Assurance, NUREG-1577, Rev. 1.
C.L. Pittiglio, Standard Review Plan for Evaluating Nuclear Power
Reactor License Termination Plans, NUREG-1700, Rev. 1 (April 2000).
U.S. Nuclear Regulatory Commission, Assuring the Availability of
Funds for Decommissioning Nuclear Reactors, Regulatory Guide 1.159,
Rev. 1 (October 2003).
U.S. Nuclear Regulatory Commission, Decommissioning of Nuclear Power
Reactors, Regulatory Guide 1.184 (July 2000).
U.S. Nuclear Regulatory Commission, Consolidated NMSS
Decommissioning Guidance: Financial Assurance, Recordkeeping, and
Timeliness (Vol. 3), NUREG-1757 (September 2003).
Dated in Rockville, Maryland, this 12th day of July, 2004.
For the Nuclear Regulatory Commission.
Catherine Haney,
Program Director, Policy and Rulemaking Program.
[FR Doc. 04-16302 Filed 7-16-04; 8:45 am]
BILLING CODE 7590-01-P