[Federal Register Volume 70, Number 57 (Friday, March 25, 2005)]
[Notices]
[Pages 15369-15371]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-5901]
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NUCLEAR REGULATORY COMMISSION
[Docket No. 72-17]
Notice of Issuance of Partial Conditional Exemption; Portland
General Electric Company, Trojan Independent Spent Fuel Storage
Facility
AGENCY: Nuclear Regulatory Commission.
ACTION: Notice of partial conditional exemption.
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FOR FURTHER INFORMATION CONTACT: Christopher M. Regan, Senior Project
Manager, Spent Fuel Project Office, Office of Nuclear Material Safety
and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC
20555. Telephone: (301) 415-8500; fax number: (301) 415-8555; e-mail:
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
Portland General Electric Company (PGE) is the licensee and holder
of License No. SNM-2509 for the Trojan Independent Spent Fuel Storage
Facility (Trojan ISFSI). In addition, PGE holds License No. NPF-1,
pursuant to 10 CFR part 50, for the Trojan Nuclear Plant. The licensee
will complete decommissioning of the Trojan Nuclear Plant and intends
to terminate its Part 50 license for the Trojan Nuclear Plant. The
Trojan ISFSI contains the spent fuel removed from the Trojan Nuclear
Plant.
Currently, the licensee provides financial assurance for the Trojan
ISFSI pursuant to 10 CFR 72.30(c)(5), which allows a part 50 license
holder to use the financial assurance provisions of part 50 to provide
financial assurance for an ISFSI. The licensee maintains an external
sinking fund for decommissioning funds pursuant to 10 CFR 50.75(e).
However, when its part 50 license is terminated, it will no longer meet
the condition of 10 CFR 72.30(c)(5) that allows it to use its existing
external sinking fund to provide financial assurance for its ISFSI.
On April 29, 2004, PGE filed a request for NRC approval of a
partial exemption from the provision of 10 CFR 72.30(c)(5) that
requires an ISFSI licensee to additionally hold a part 50 license in
order to use an external sinking fund as the exclusive means of
financial assurance for decommissioning costs of an ISFSI.
II. Requested Action
Pursuant to the requirements of 10 CFR 72.7, PGE requested a
partial exemption from the financial assurance requirements of 10 CFR
72.30(c)(5). The exemption request was ``partial'' because it would
apply only to the requirement that the ISFSI licensee also hold a Part
50 license to use an external sinking fund as its exclusive method of
providing financial assurance for its ISFSI. The licensee will continue
to provide financial assurance conforming to the requirements of 10 CFR
50.75(e) and (h), although it reserved the right to change to another
method as provided in other sections of 10 CFR 72.30(c). The licensee
pointed out that the wording of 10 CFR 72.30(c)(5) allowed an
``electric utility'' to use an external sinking fund as the exclusive
method of providing financial assurance when its part 72 ISFSI license
was first issued. However, the rule was amended effective on December
24, 2003, which resulted in the change of the condition from ``electric
utility'' to ``a part 50 licensee.'' PGE stated that it will remain an
electric utility after the termination of its part 50 license, hence it
will continue to meet the intent of the rule as originally issued.
III. Discussion
The Commission may grant a specific exemption to the financial
assurance requirements of 10 CFR 72.30(c)(5) provided that the
requirements of 10 CFR 72.7 are satisfied. The Commission determined
that a partial exemption from 10 CFR 72.30(c)(5) meets the
[[Page 15370]]
requirements of 10 CFR 72.7, as discussed below:
Specific Exemption Is Authorized by Law
Prior to December 24, 2003, any ISFSI licensee that met the
definition of ``electric utility'' in 10 CFR 50.2 was eligible to use
the financial assurance methods of 10 CFR 50.75(e) to provide financial
assurance for its ISFSI. As a result, the NRC approved use of an
external sinking fund conforming to the requirement of 10 CFR
50.75(e)(1)(ii)(A) as financial assurance for the Trojan ISFSI pursuant
to 10 CFR 72.30(c)(5).
The amendment to 10 CFR 72.30(c)(5) that became effective December
24, 2003, was incidental to the primary changes in Part 50 issued at
the same time with regard to reactor decommissioning trust funds. The
amendment to 10 CFR 72.30(c)(5) was in response to a comment that
suggested the change to maintain consistency between parts 72 and 50,
but did not change the basis of the regulations.
The basis of 10 CFR 50.75(e)(1)(ii)(A) is that a licensee that
recovers decommissioning costs through rates established through ``cost
of service'' or similar rate-making authority may use an external
sinking fund as its exclusive means of financial assurance. A licensee
that is a public utility is presumed to meet that basis. Because PGE
will remain a public utility after termination of its part 50 license,
it will continue to meet the basis for allowing a part 72 licensee to
provide financial assurance using the methods of part 50. Therefore,
the partial exemption from part 72 is authorized by law.
Specific Exemption Will Not Present an Undue Risk to the Public Health
and Safety
The specific exemption requested is administrative in nature. The
exemption does not have any reasonable potential to (1) foreclose
release of the Trojan ISFSI site for unrestricted use; (2) result in
significant environmental impacts not previously reviewed; or (3)
result in there no longer being reasonable assurance that adequate
funds will be available for decommissioning. The exemption will allow
use of a financial assurance method currently in use that has been
approved by the NRC. Therefore, the partial exemption will not present
an undue risk to the public health.
Specific Exemption Will Not Endanger the Common Defense and Security
The partial exemption is administrative in nature and does not
involve information of activities that could potentially impact the
common defense and security of the United States. Therefore, partial
exemption will not endanger the common defense and security.
Specific Exemption Is Otherwise in the Public Interest
PGE's 2003 Annual Financial Statement (Form 10-K, submitted to the
U.S. Securities and Exchange Commission (SEC) on March 19, 2004) stated
that PGE will collect $14 million annually, until 2011, from its
customers to pay for decommissioning. This includes funding for
radiological and non-radiological decontamination as well as on-site
spent nuclear fuel storage. Those collections will occur whether or not
the exemption is granted. However, if the exemption is not granted, PGE
will incur higher costs due to the expense of providing a second
independent financial assurance instrument, which would lead to
unnecessary additional costs. Therefore, the exemption is in the public
interest.
Financial Ability of PGE To Fund the ISFSI Decommissioning Cost
The Trojan ISFSI decommissioning cost estimate was $7.9 million in
1997. Adjusting for inflation to 2004 would increase the cost to about
$10 million. In order to assess the ability of PGE to finance that
cost, the staff reviewed PGE's 2003 Form 10-K. The financial statements
show that PGE possesses $3.37 billion in assets and earns $1.7 billion
annually in revenues. The financial report stated that PGE maintained a
strong financial position with stable cash flow, and will receive $14
million per year through 2011 for decommissioning costs. The cost of
decommissioning the Trojan ISFSI appears well within the licensee's
financial ability.
At the time of filing its exemption request, PGE was a wholly owned
subsidiary of Enron Corporation. The staff determined that Enron's
bankruptcy will not adversely affect PGE's ability to fund
decommissioning of its Trojan ISFSI. Although Enron filed for
bankruptcy protection, PGE did not. Regulatory ``ring-fencing''
effectively insulated PGE and its customers from the effects of Enron's
bankruptcy. (Ring fencing is a state public utility board's regulatory
strategy that prevents a utility's assets from being pledged as
security for a parent company's obligations.) PGE's Quarterly Report,
Form 10-Q, submitted to the SEC on November 5, 2004, states on page 41:
PGE, as a separate corporation, owns or leases the assets used
in its business and PGE's management, separate from Enron, is
responsible for PGE's day-to-day operations. PGE maintains its own
cash management system and finances itself separately from Enron, on
both a short- and long-term basis. Neither PGE nor Enron have
guaranteed the obligations of the other and there are no loans
between them. Under Oregon law and specific conditions imposed on
Enron and PGE by the Oregon Public Utilities Commission (OPUC) in
connection with Enron's acquisition of PGE in the merger of Enron
and Portland General Corporation in 1997, Enron's access to PGE cash
or utility assets (through dividends or otherwise) is limited.
Therefore, PGE's assets will be available to provide funding for
decommissioning if it continues as an Enron subsidiary. However, Enron
entered into an agreement with Oregon Electric Utility Company, LLC, to
sell all issued and outstanding PGE stock to Oregon Electric. In the
event the sale is consummated, the Enron bankruptcy will be of no
further concern.
IV. Conclusion
The Commission determined that the specific exemption to the
financial assurance requirements of 10 CFR 72.30(c)(5) is authorized by
law and will not endanger life or property, or the common defense and
security and is otherwise in the public interest.
In connection with the issuance of the exemption, an Environmental
Assessment and Finding of No Significant Impact was noticed in the
Federal Register on March 17, 2005 (70 FR 13052).
Therefore, the Commission grants a partial exemption from the
requirement of 10 CFR 72.30(c)(5) that the licensee must hold a part 50
license in order to provide financial assurance using the methods of 10
CFR 50.75(e) and (h); however, the exemption is granted subject to the
following two conditions:
1. The exemption shall not become effective until the licensee
submits, within 30 days of the issuance of this grant of exemption,
documentation adequate to demonstrate that funding for the Trojan ISFSI
decommissioning has been approved for recovery in rates by a rate
making authority; and
2. The exemption shall cease to be effective in the event that
funds remaining to be placed into the Trojan ISFSI decommissioning
external sinking fund are no longer approved for recovery in rates by a
competent rate regulating authority.
This exemption is effective upon satisfaction of Condition 1 above,
and shall cease being effective in the event Condition 2 above is
triggered.
Further Information: Supporting documentation, with respect to this
exemption request, is available for
[[Page 15371]]
inspection at NRC's Public Electronic Reading Room at http://www.nrc.gov/reading-rm/ADAMS.html. A copy of the PGE request for NRC
approval of a partial exemption from the provision of 10 CFR
72.30(c)(5), dated April 29, 2004, can be found at this site using the
Agencywide Documents Access and Management System (ADAMS) accession No.
ML041260470. Any questions should be referred to Christopher M. Regan,
Spent Fuel Project Office, Office of Nuclear Material Safety and
Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555,
Mailstop O 13D13, telephone (301) 415-8500, fax (301) 415-8555.
Dated at Rockville, Maryland this 17th day of March, 2005.
For the Nuclear Regulatory Commission.
Christopher M. Regan,
Senior Project Manager, Licensing Section, Spent Fuel Project Office,
Office of Nuclear Material Safety and Safeguards.
[FR Doc. 05-5901 Filed 3-24-05; 8:45 am]
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