[Federal Register Volume 76, Number 117 (Friday, June 17, 2011)]
[Rules and Regulations]
[Pages 35512-35575]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14267]
[[Page 35511]]
Vol. 76
Friday,
No. 117
June 17, 2011
Part II
Nuclear Regulatory Commission
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10 CFR Parts 20, 30, 40, et al.
Decommissioning Planning; Final Rule
Federal Register / Vol. 76 , No. 117 / Friday, June 17, 2011 / Rules
and Regulations
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NUCLEAR REGULATORY COMMISSION
10 CFR Parts 20, 30, 40, 50, 70, and 72
[NRC-2008-0030]
RIN 3150-AI55
Decommissioning Planning
AGENCY: Nuclear Regulatory Commission.
ACTION: Final rule.
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SUMMARY: The U.S. Nuclear Regulatory Commission (NRC or the Commission)
is amending its regulations to improve decommissioning planning and
thereby reduce the likelihood that any current operating facility will
become a legacy site. The amended regulations require licensees to
conduct their operations to minimize the introduction of residual
radioactivity into the site, which includes the site's subsurface soil
and groundwater. Licensees also may be required to perform site surveys
to determine whether residual radioactivity is present in subsurface
areas and to keep records of these surveys with records important for
decommissioning. The amended regulations require licensees to report
additional details in their decommissioning cost estimate (DCE),
eliminate the escrow account and line of credit as approved financial
assurance mechanisms, and modify other financial assurance
requirements. The amended regulations require decommissioning power
reactor licensees to report additional information on the costs of
decommissioning and spent fuel management.
DATES: The final rule is effective on December 17, 2012. Compliance
with the reporting provisions in Title 10 of the Code of Federal
Regulations (10 CFR) 50.82(a)(8)(v) and (vii) is required by March 31,
2013.
ADDRESSES: You can access publicly available documents related to this
document using the following methods:
NRC's Public Document Room (PDR): The public may examine
and have copied, for a fee, publicly available documents at the NRC's
PDR, O1-F21, One White Flint North, 11555 Rockville Pike, Rockville,
Maryland 20852.
NRC's Agencywide Documents Access and Management System
(ADAMS): Publicly available documents created or received at the NRC
are available online in the NRC Library at http://www.nrc.gov/reading-rm/adams.html. From this page, the public can gain entry into ADAMS,
which provides text and image files of the 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 the NRC's PDR reference staff
at 1-800-397-4209, 301-415-4737, or by e-mail to [email protected].
Federal Rulemaking Web Site: Public comments and
supporting materials related to this final rule can be found at http://www.regulations.gov by searching on Docket ID NRC-2008-0030. Address
questions about NRC dockets to Carol Gallagher, telephone: 301-492-
3668; e-mail: [email protected].
FOR FURTHER INFORMATION CONTACT: Robert D. MacDougall, Office of
Federal and State Materials and Environmental Management Programs, U.S.
Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone:
301-415-5175; e-mail: [email protected], or Kevin O'Sullivan,
Office of Federal and State Materials and Environmental Management
Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001, telephone: 301-415-8112; e-mail: [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion
A. What action is the NRC taking?
B. Whom does this action affect?
C. What steps did NRC take to prepare for this rulemaking?
D. What alternatives did NRC consider?
E. What is a legacy site?
F. What are financial assurances?
G. Why might some materials licensees not have funds to
decommission their facility?
H. Why is 10 CFR 50.82 being amended?
I. What changes are being made to 10 CFR 20.1406?
J. Which surveys are required under amended 10 CFR 20.1501(a)?
K. What information must the licensee collect under amended 10
CFR 20.1501?
L. How will licensees report required information to the NRC?
M. What financial assurance information must licensees report to
the NRC?
N. What changes are being made to financial assurance
regulations?
O. Will some licensees who currently do not have financial
assurance need to get financial assurance?
P. What changes are being made with respect to materials
facilities' decommissioning funding plan (DFP) and DCE?
Q. What changes are being made with respect to license transfer
regulations for materials licensees?
R. What changes are being made with respect to permanently
shutdown reactor decommissioning fund status and spent fuel
management plan reporting?
S. When do these actions become effective?
T. Has NRC prepared a cost-benefit analysis of the final rule?
U. Has NRC evaluated the additional paperwork burden to
licensees?
III. Summary and analysis of public comments on the proposed rule
IV. Discussion of Final Amendments by Section
V. Criminal Penalties
VI. Agreement State Compatibility
VII. Voluntary Consensus Standards
VIII. Environmental Assessment and Finding of No Significant
Environmental Impact: Availability
IX. Paperwork Reduction Act Statement
X. Regulatory Analysis
XI. Regulatory Flexibility Certification
XII. Backfit Analysis
XIII. Congressional Review Act
I. Background
The NRC issued comprehensive and risk informed decommissioning
regulations in 1997 as Subpart E of 10 CFR part 20 (62 FR 39058; July
21, 1997). This set of requirements is known as the License Termination
Rule (LTR). The LTR is based on calculated doses, and it established
specific radiological criteria for remediation of lands and structures
to complete site decommissioning and successfully terminate the
license. The LTR provides an overall approach for license termination
for two different site conditions: unrestricted use and restricted
conditions for use after license termination. The LTR applies to the
decommissioning of facilities licensed under the regulations in 10 CFR
parts 30, 40, 50, 60, 61, 63, 70, and 72. In the 1997 LTR final rule,
in response to a public comment that the requirements of then-proposed
regulations in 10 CFR 20.1406 should apply to all licensees rather than
only to applicants for new licenses, the Commission stated:
Applicants and existing licensees, including those making
license renewals, are already required by 10 CFR part 20 to have
radiation protection programs aimed towards reducing exposure and
minimizing waste. In particular, Sec. 20.1101(a) requires
development and implementation of a radiation protection plan
commensurate with the scope and extent of licensed activities and
sufficient to ensure compliance with the provisions of 10 CFR part
20. Section 20.1101(b) requires licensees to use, to the extent
practicable, procedures and engineered controls to achieve public
doses that are [as low as reasonably achievable] ALARA. In addition,
lessons learned and documented in reports such as NUREG-1444
[ML080860275 and ML080860308] have focused attention on the need to
minimize and control waste generation during operations as part of
development of the required radiation protection plans. Furthermore,
the financial assurance requirements issued in the January 27, 1988
(53 FR 24018), rule on planning for decommissioning require
licensees to provide adequate funding for decommissioning. These
funding
[[Page 35513]]
requirements create great incentive to minimize contamination and
the amount of funds set aside and expended on cleanup. (62 FR 39082;
July 21, 1997).
Current 10 CFR 20.1101(a) requires each licensee to implement a
radiation protection program to ensure compliance with the regulations
in 10 CFR part 20. Current Sec. 20.1101(b) requires each licensee to
use, to the extent practical, procedures and engineering controls based
upon sound radiation protection principles to achieve occupational
doses and doses to members of the public that are ALARA. To achieve
doses that are ALARA, licensees are already required to apply operating
procedures and controls to evaluate potential radiological hazards and
methods to minimize and control waste generation during facility
operations.
In a Staff Requirements Memorandum (SRM) for SECY-01-0194, dated
June 18, 2002 (NRC ADAMS Accession Number ML021690563), the Commission
directed the staff to conduct an analysis of LTR issues. The staff
conducted the analysis and presented results and recommendations to the
Commission in SECY-03-0069 (ML030800158), dated May 2, 2003, and known
as the LTR Analysis. One of the recommendations was a set of ``measures
to prevent future legacy sites.'' A legacy site is a facility that is
in decommissioning status with complex issues and an owner who cannot
complete the decommissioning work for technical or financial reasons
(as discussed further in Section II.E of this document). The set of
measures to prevent future legacy sites had two distinct parts: (1) The
need for timely reporting during facility operations of subsurface
contamination that has a potential to complicate future decommissioning
efforts; and (2) The need for more detailed reporting of licensee
financial assurance mechanisms to fund site decommissioning activities
and protection of the committed funds in cases of financial distress.
The need for timely reporting of subsurface contamination during
facility operations was explained in Attachment 8 to SECY-03-0069
(ML030870186). Attachment 8, under the heading ``chronic releases,''
recommended revising the regulations in 10 CFR 20.1406 to extend its
minimization of contamination requirements to cover licensees in
addition to license applicants. Recommendations for more detailed
decommissioning financial assurance requirements are set forth in
Attachment 7 to SECY-03-0069 (ML030870180).
In the SRM for SECY-03-0069 (ML033210595), the Commission approved
the staff's recommendations and authorized development of a technical
basis to support a proposed rule. As pertinent to the then-proposed
regulations in 10 CFR 20.1406 and 10 CFR 20.1501 revisions, the
Commission's SRM states as follows:
The Commission has approved the staff's recommendation related
to changes in licensee operations as described in attachment 8.
However, in addition to incorporating risk-informed approaches, the
staff should ensure that they are performance-based. The staff will
have to be very careful when crafting the guidance documents so that
it is clear to the licensees and to the staff how much
characterization information is enough. The staff should only ask
for limited information. Licensees should not be required to submit
the equivalent of a full scale MARSSIM [Multi-Agency Radiation
Survey and Site Investigation Manual (ML082470583)] survey every
year.
During 2003 and 2004, the NRC staff evaluated the decommissioning
program and assessed the effectiveness of other improvements to protect
public health and safety beyond those identified in the LTR Analysis.
To integrate and track regulatory improvements resulting from the LTR
Analysis and the further evaluation of the decommissioning program, the
NRC adopted an Integrated Decommissioning Improvement Plan (IDIP) for
activities during FY 2004 through 2007 (ML050890051). Among other
actions, the IDIP called for publication of the Decommissioning
Planning proposed rule and written guidance describing changes in the
regulations to prevent future legacy sites.
In 2005 and 2006, the operators of several nuclear power plants
reported that inadvertent and unmonitored radioactive liquid releases,
primarily tritium contained in water, had occurred. In some instances,
the release of radioactive liquid was not recognized by the licensee
until years after the release had apparently started. The NRC Executive
Director for Operations chartered a Task Force to conduct a lessons-
learned review of these incidents. The Task Force final report
(ML062650312) dated September 1, 2006, concluded that the levels of
tritium and other radionuclides measured thus far do not present a
health hazard to the public and presented a list of findings and
recommendations that the Task Force believed would improve plant
operations and public confidence in nuclear plant operations. The
findings and recommendations in the Task Force report identified the
need to clarify existing licensee requirements to demonstrate that they
have achieved public and occupational exposures that are ALARA during
the life cycle of the facility, which includes the decommissioning
phase.
In April 2005, the NRC conducted a 2-day public workshop to solicit
public comments on the technical basis for the proposed rule, covering
changes in licensee operations and financial assurance. A 1-day public
roundtable meeting was held in January 2007 to solicit public comments
on specific topics in the technical basis for the proposed rule.
SECY-07-0177 (ML072390153), dated October 3, 2007, requested
Commission approval to publish a proposed rule consistent with the
recommendations approved in SRM-SECY-03-0069 and the public comments
from the workshop and roundtable meeting noted previously. The
Commission approved staff's request in SRM-SECY-07-0177 (ML073440549),
dated December 10, 2007, and accordingly, the proposed rule was
published for comment in the Federal Register on January 22, 2008 (73
FR 3812).
II. Discussion
A. What action is the NRC taking?
The NRC is amending its regulations to improve decommissioning
planning and thereby reduce the likelihood that facilities under its
jurisdiction will become legacy sites. To help achieve this goal, one
set of complementary amendments revises 10 CFR 20.1406 to make it
applicable to licensees with operating facilities as well as to license
applicants and revises 10 CFR 20.1501(a) by replacing its undefined
term ``radioactive material'' with ``residual radioactivity,'' a term
already defined in 10 CFR part 20. This defined term includes
subsurface contamination within its scope. Both new 10 CFR 20.1406(c)
and amended 10 CFR 20.1501(a) are worded to include subsurface
contamination within their scope by using the term ``residual
radioactivity.'' These changes serve to reinforce the intended linkage
between these provisions, and are consistent with NRC policy that
licensees conduct operations to minimize the generation of waste to
facilitate later facility decommissioning. A second set of amendments
improves decommissioning planning by requiring more detailed reporting
of DCEs and tighter control of financial instruments used to provide
decommissioning financial assurance.
The new 10 CFR 20.1406(c) states as follows:
[[Page 35514]]
(c) Licensees shall, to the extent practical, conduct operations
to minimize the introduction of residual radioactivity into the
site, including the subsurface, in accordance with the existing
radiation protection requirements in Subpart B of this part and
radiological criteria for license termination in Subpart E of this
part.
The amended 10 CFR 20.1501(a) and (b) state as follows:
(a) Each licensee shall make or cause to be made, surveys of
areas, including the subsurface, that--
(1) May be necessary for the licensee to comply with the
regulations in this part; and
(2) Are reasonable under the circumstances to evaluate--
(i) The magnitude and extent of radiation levels; and
(ii) Concentrations or quantities of residual radioactivity; and
(iii) The potential radiological hazards of the radiation levels
and residual radioactivity detected.
(b) Notwithstanding Sec. 20.2103(a) of this part, records from
surveys describing the location and amount of subsurface residual
radioactivity identified at the site must be kept with records
important for decommissioning, and such records must be retained in
accordance with Sec. Sec. 30.35(g), 40.36(f), 50.75(g), 70.25(g),
or 72.30(d), as applicable.
As indicated, use of the term ``residual radioactivity'' is a key
component of the amendments, and this term is discussed below. It is
also discussed in the response to comment G.19 in section III of this
document.
1. Residual Radioactivity
As set forth in 10 CFR 20.1003:
Residual radioactivity means radioactivity in structures,
materials, soils, groundwater, and other media at a site resulting
from activities under the licensee's control. This includes
radioactivity from all licensed and unlicensed sources used by the
licensee, but excludes background radiation. It also includes
radioactive materials remaining at the site as a result of routine
or accidental releases of radioactive material at the site and
previous burials at the site, even if those burials were made in
accordance with the provisions of 10 CFR part 20.
Certain operational events (e.g., slow, long-term leaks),
particularly those that cause subsurface soil and ground-water
contamination, can significantly increase the cost of decommissioning.
To adequately assure that a decommissioning fund will cover the costs
of decommissioning, the owner of a facility must have a reasonably
accurate estimate of the extent to which residual radioactivity is
present at the facility, particularly in the subsurface soil and
groundwater. As reflected previously, the new 10 CFR 20.1406(c)
requires that licensees conduct their operations in a manner that will
minimize the introduction of residual radioactivity into the site.
Section 20.1501(a) has been revised by replacing its undefined term
``radioactive material'' with ``residual radioactivity.'' For some, the
phrase ``residual radioactivity'' may have a connotation implying
radioactive material that is ``left over'' after operations. This is
not the meaning. As reflected in the previously stated definition, the
term ``residual radioactivity'' includes everything that the term
``radioactive material'' implies in this section of the current
regulations plus other radioactive material resulting from activities
under the licensee's control, such as contamination in the subsurface.
The use of the term ``residual radioactivity'' in Sec. 20.1501(a) also
is intended to provide a link with new Sec. 20.1406(c). The amended
Sec. 20.1501(a) retains previous survey requirements, with the
addition that such requirements include consideration of waste in the
form of residual radioactivity. Together, the amended Sec. 20.1501(a)
and the new Sec. 20.1406(c) specify that compliance with 10 CFR part
20 requirements is a necessary part of effectively planning for
decommissioning. The Sec. Sec. 20.1406(c) and 20.1501(a) provisions
are discussed further in Sections II.I and J of this document. These
activities, undertaken during facility operations, will provide a
technical basis for licensees and NRC to understand the effects of
significant residual radioactivity on decommissioning costs, and will
help to determine whether existing financial assurance provided for
site-specific decommissioning is adequate. By using the term ``residual
radioactivity,'' the new Sec. 20.1406(c) and amended Sec. 20.1501(a)
cover any licensed and unlicensed radioactive material that have been
introduced to the site by licensee activities.
New paragraph 10 CFR 20.1501(b) requires licensees to keep records
of surveys of subsurface residual radioactivity identified at the site
with the records important for decommissioning. To remove any ambiguity
about the applicability of record retention requirements, this
paragraph also clarifies that such records must be retained in
accordance with Sec. Sec. 30.35(g), 40.36(f), 50.75(g), 70.25(g), or
72.30(d), as applicable. These provisions specify certain types of
information important to decommissioning and require licensees to keep
records with this information in an identified location until the site
is released for unrestricted use, or in the case of reactors, until the
license is terminated. These decommissioning-related record retention
requirements supersede those of Sec. 20.2103(a), which generically
requires that records of the results of such radiological dose
assessment activities as surveys, air sampling, bioassays, and
calibrations be retained for 3 years after the record is made.
During operations, residual radioactivity that would be significant
for decommissioning planning would be a quantity of radioactive
material that would later require remediation during decommissioning to
meet the unrestricted use criteria of 10 CFR 20.1402. As stated in the
proposed rule, significant residual radioactivity in subsurface media,
such as soil, is a component of waste, because it must be removed and
disposed of to meet unrestricted use criteria in 10 CFR 20.1402 (73 FR
3815; January 22, 2008).
During decommissioning, the licensee must evaluate dose from all
residual radioactivity surveyed at its site using the radiological
criteria in Subpart E to 10 CFR part 20. For contamination migrating
offsite from previous leaks and spills into the subsurface, a licensee
must comply with the applicable license conditions for its facility.
Such offsite contamination, released as an effluent in quantities below
annual regulatory limits, has been a factor in the decommissioning of a
few NRC and Agreement State sites. However, the scope of this
rulemaking does not include offsite contamination discovered during
decommissioning.
The NRC's technical basis for the effect that significant residual
radioactivity in the subsurface has on decommissioning costs is based
on a 2005 NRC staff study, ``General Guidance for Inspections and
Enforcement to Prevent Future Legacy Sites and Indicators of Higher
Risk of Subsurface Contamination'' (ML052630421). The purpose of this
study was to evaluate experience at sites that have undergone, or were
undergoing, decommissioning to identify the types of events that have
caused subsurface contamination. Associating these events with
knowledge of currently operating sites provided a means for NRC staff
to evaluate the potential for future subsurface contamination at
currently operating facilities. This risk-informed approach concluded
that the sites with a higher likelihood of becoming legacy sites shared
the following characteristics: relatively large volumes of low specific
activity radioactively contaminated liquids, large volumes of long-
lived radionuclides, large throughput, liquid processes, or processes
that involve large quantities of solid radioactive material stored
[[Page 35515]]
outdoors. The study identified a number of events that could increase
decommissioning costs by increasing the possibility of soil or ground-
water contamination and concluded that these events should cause the
licensee to reevaluate its DCE. Additional discussion on this topic is
in Sections II.G and II.H of this document.
The changes to 10 CFR 20.1406 and 20.1501 are consistent with
existing NRC policy for operating facilities. Under 10 CFR 20.1101(b),
licensees must use procedures and engineering controls to achieve
occupational doses and doses to members of the public that are ALARA,
during operations and during decommissioning. To accomplish this,
licensees must be able to demonstrate their knowledge of residual
radioactivity in the subsurface, including soil and ground-water
contamination, particularly if the subsurface contamination is a
significant amount that would require remediation during
decommissioning to meet the unrestricted use criteria of 10 CFR
20.1402. This is an extension of the requirements promulgated in the
1997 LTR that were applicable only to license applicants. This action
is needed, because significant subsurface residual radioactivity at
current operating facilities may be a potential radiological hazard.
Such a hazard, if left undetected, could potentially result in a
failure to fully fund decommissioning while the facility is still
operating. The revised requirements implement existing NRC policy by
helping licensees to continue achieving doses that are ALARA and within
dose limits, and helping them to more effectively plan for
decommissioning.
2. Financial Assurance
This final rule (amending Sec. Sec. 30.35, 40.36, 70.25, and
72.30, and Criterion 9 of Appendix A to Part 40) codifies certain
aspects of existing regulatory guidance to improve the quality of the
DFP and applies NRC experience to increase the likelihood that adequate
funds will be available when needed to complete the decommissioning
process. This final rule allows materials licensees to base their
financial assurance for decommissioning on a ``certification amount''
only if the licensee's site surveys do not indicate the presence of
residual radioactivity in amounts that would prevent the site from
meeting the unrestricted use criteria in Sec. 20.1402. This final rule
addresses the potential vulnerability of the parent company guarantee
and the self-guarantee as the financial mechanism for providing
decommissioning funding assurance, in cases where the guarantor falls
into financial distress. This final rule requires all reactor and
materials licensees who use these guarantee mechanisms to establish a
standby trust fund to receive the guaranteed financial assurance amount
should that amount become immediately due and payable.
For licensees with reactors in a decommissioning status, this final
rule institutes additional reporting requirements for decommissioning
fund status, spent fuel management costs, and estimated decommissioning
costs. These new reporting requirements, in part, modify the existing
Post Shutdown Decommissioning Activities Report (PSDAR) requirements
set forth in 10 CFR 50.82(a)(4)(i). Additional reporting requirements
specify that each power reactor licensee undergoing decommissioning
must submit an annual financial assurance status report, as set forth
in new paragraphs 10 CFR 50.82(a)(8)(v) through (a)(8)(vii).
Under this final rule, all licensees decommissioning their
facilities pursuant to 10 CFR 20.1403 restricted release criteria are
required to use a trust fund to meet the financial assurance
requirements. A trust fund is the only financial assurance mechanism
allowed for the long-term maintenance and surveillance of restricted
release sites, unless a government organization either provides a
guarantee of funds or assumes custody and ownership of the site. This
topic is discussed further in Section II.N of this final rule.
B. Whom does this action affect?
By the effective date of this final rule, the NRC believes that the
changes to 10 CFR part 20 will affect a small number of licensees, and
that the changes to financial assurance regulations will affect several
hundred NRC licensees.
Based on the regulatory analysis for the final rule, NRC believes a
small number of materials licensees (a total of about five NRC and
Agreement State licensees) will need to perform additional site surveys
due to the presence of significant residual radioactivity. The
licensees who will need to perform additional surveys were modeled in
the regulatory analysis as rare metal (i.e., rare earth) extraction
facilities with uranium as a soil contaminant. Although the number of
licensees affected by rule changes to 10 CFR part 20 is small, the cost
to States or the Federal Government to enforce and then fully
decommission a single legacy site is much higher than the cost to
prevent the occurrence of a legacy site through amended regulations.
Uranium recovery licensees and applicants will not be subject to
the new 10 CFR 20.1406(c) requirements, just as they are not subject to
the existing 10 CFR 20.1406 requirements. As stated in existing 10 CFR
20.1401(a), uranium and thorium recovery facilities, and uranium
solution extraction facilities, are not subject to the regulations in
10 CFR part 20, Subpart E. Such facilities are and will continue to be
subject to the regulations in the other 10 CFR part 20 subparts, and
the revised survey and monitoring requirements in 10 CFR 20.1501(a) and
new 10 CFR 20.1501(b) will thus be applicable to them. Uranium recovery
licensees are additionally subject to existing monitoring requirements
pertaining to soil and groundwater contamination in Appendix A to 10
CFR part 40. The above issues are discussed further in the response to
Comment G.14 in Section III of this document.
For NRC licensees who have subsurface soil contamination but no
groundwater contamination, a minimal, routine monitoring plan may
remain in effect through license termination. The routine monitoring
plan will be described in DG-4014. Application of a minimal, routine
monitoring plan at sites with no groundwater contamination is meant to
improve licensee decommissioning planning and the basis used for DCEs.
The large majority of NRC and Agreement State licensees are not
expected to have residual radioactivity in soil or groundwater, because
they possess small amounts of short-lived byproduct material or
byproduct material that is encased in a capsule designed to prevent
leakage or escape of the byproduct material (i.e., a sealed source).
This set of licensees is expected to include the non-fuel-cycle nuclear
facilities, which either have no significant residual radioactive
contamination to be cleaned up, or, if there is contamination, it is
localized or will be quickly reduced to low levels by radioactive
decay. Licensees who do not have residual radioactivity in soil or
groundwater, and who do not have an obligation to set aside funds for
decommissioning financial assurance, are not affected by this final
rule.
Approximately 300 NRC materials licensees and over 1,000 Agreement
State licensees have an obligation to set aside funds for
decommissioning financial assurance. Of the NRC licensees,
approximately 50 percent use a certified amount, specified in
regulations, with the remaining 50 percent using a site-specific DFP or
License Termination Plan (LTP) to meet the decommissioning financial
assurance requirements. If there is significant residual radioactivity
at the
[[Page 35516]]
site, the final rule changes in Sec. Sec. 30.35, 40.36, 70.25, and
72.30 require a licensee to switch out of its certified funding amount
and replace the certified amount with a DFP. At this time, the NRC
staff is not aware of any licensees using certified amounts for
decommissioning that need to switch to a DFP because of significant
residual radioactivity.
Licensees using a site-specific DFP or License Termination Plan to
meet decommissioning financial assurance requirements will have
additional reporting requirements based on final rule changes in
Sec. Sec. 30.35, 40.36, 50.82, 70.25, and 72.30. The materials
licensees under 10 CFR parts 30, 40, 70, and 72 will need to provide
more details to support their DCEs, such as the assumed cost of an
independent contractor to perform all decommissioning activities.
Final rule changes to 10 CFR 50.82(a) affect the 12 power reactor
licensees undergoing decommissioning. Such licensees will need to
provide more details regarding their DCEs and will need to provide cost
estimates for managing irradiated fuel. More specifically, licensees
who have submitted a certification of permanent cessation of operations
under 10 CFR 50.82(a) are subject to annual financial assurance
reporting requirements similar to those imposed on operating reactors
under existing 10 CFR 50.75(f). The annual reports must identify yearly
decommissioning expenditures, the remaining balance of decommissioning
funds, and a cost estimate to complete decommissioning. Similar to the
one-time reports required by 10 CFR 50.54(bb), the annual reports
required under 10 CFR 50.82(a)(8) must identify the amount of funds
accumulated to manage irradiated fuel and the projected cost of
managing the irradiated fuel until title and possession is transferred
to the Secretary of Energy.
Approximately 20 NRC licensees use an escrow account as a
prepayment financial mechanism and will be affected by final rule
changes in Sec. Sec. 30.35, 40.36, 70.25, and 72.30 (which eliminate
the escrow account as a prepayment financial assurance method). No NRC
licensees are using a line of credit (which is being eliminated as an
acceptable financial assurance instrument) to provide financial
assurance.
Approximately 45 NRC licensees use a parent company guarantee or
self-guarantee as a financial assurance mechanism. These licensees will
be affected by final rule changes in 10 CFR part 30, Appendices A, C,
D, and E, which require establishment of a standby trust fund before
the guarantee becomes effective, and which contain other new
requirements. The standby trust fund is to be set up for receipt of
funds in the case of financial distress by the guarantor. In the
regulatory analysis and Paperwork Reduction Act burden estimate, NRC
assumed that a total of 25 of these 45 licensees will need to establish
a trust fund to comply with the amended regulations, while the other 20
already have an established trust fund.
The regulatory analysis for this final rule, referenced in Section
X of this document, has detailed cost-benefit estimates regarding the
licensees who will be affected by the amended regulations.
C. What steps did NRC take to prepare for this rulemaking?
The NRC took several initiatives to enhance stakeholder involvement
and to improve efficiency during the rulemaking process. On May 28,
2004, the NRC staff issued Regulatory Information Summary (RIS) 2004-
08, ``Results of the License Termination Rule Analysis'' (ML041460385).
This RIS was the first follow-up action taken in response to the SRM
for SECY-03-0069. The purpose of the RIS was to inform licensees and
stakeholders of NRC's analysis of the issues associated with
implementing the LTR, the Commission's direction to resolve these
issues, the schedule for future actions, and opportunities for
stakeholder comment. The RIS noted that stakeholder involvement would
be an important part of developing the planned rulemaking and guidance.
In April 2005, the NRC conducted a 2-day decommissioning workshop
examining a number of LTR topics, including potential changes in
facility operating requirements and changes to financial assurance to
prevent legacy sites. Stakeholders addressed the issues and potential
resolutions that could be accomplished through rulemaking. Since then,
NRC has maintained a Web page (http://www.nrc.gov/about-nrc/regulatory/decommissioning.html) with information including draft guidance
documents, Commission papers, and a variety of decommissioning program
documents. The NRC presented papers on the technical basis scope of the
rulemaking at American Nuclear Society conferences in 2004, 2005, and
2006, and other stakeholder forums.
In June 2006, the NRC formed a proposed rule Working Group of NRC
staff and one Agreement State representative from the Organization of
Agreement States (OAS). The NRC has held discussions with State and
Federal agencies on their experience with trust funds for long-term
financial assurance, including a discussion with the U.S. Environmental
Protection Agency (EPA) on October 6, 2006.
In January 2007, the NRC held a public roundtable meeting that was
attended by about 40 stakeholders. The meeting was held to solicit
input from stakeholders and interested members of the public regarding
the issues of licensee control and identification of subsurface
residual radioactivity and changes that were being considered in
decommissioning financial assurance requirements. The Summary Notes and
transcript of this public meeting are posted on: http://www.nrc.gov/about-nrc/regulatory/decommissioning/public-involve.html.
D. What alternatives did NRC consider?
The proposed rule Working Group considered three different
alternatives for the rule. Each was evaluated in the environmental
assessment (see Section VIII of this document) and the regulatory
analysis (see Section X of this document). Alternative 2, comprised of
the amendments in this final rule, was assessed to be superior compared
to the other alternatives.
E. What is a legacy site?
A legacy site is a facility that is decommissioning and has an
owner who cannot complete the decommissioning work for technical or
financial reasons. These sites have been materials facilities, not
reactor facilities.
The purpose of this final rule is to improve decommissioning
planning and thereby reduce the likelihood that a site will become a
legacy site, thus avoiding unnecessary expense and promoting more
timely return of licensed sites to other productive uses.
NRC terminates several hundred materials licenses each year. Most
of these are routine actions, and the sites require little, if any,
remediation to meet NRC's unrestricted use criteria. There are other
sites where more complex decommissioning actions are needed. These
complex decommissioning sites are described, along with the objectives
of NRC decommissioning activities, in the ``Status of Decommissioning
Program 2006 Annual Report'' available at: http://www.nrc.gov/about-nrc/regulatory/decommissioning/program-docs.html. This report
identifies and describes the status of 32 complex materials sites
undergoing decommissioning. Of the total 32 complex sites, the NRC
considered 8 of these to be legacy sites as of December 31, 2006. At
the end of 2010, there were 6 legacy sites among the complex
[[Page 35517]]
materials sites undergoing decommissioning.
F. What are financial assurances?
Financial assurances are financial arrangements provided by a
licensee, whereby funds for decommissioning will be available when
needed. Each NRC licensee has a regulatory obligation to properly
decommission its facility. However, only licensees whose
decommissioning cost is likely to exceed a threshold amount must
provide financial assurance. All nuclear power reactors and about 7
percent of NRC materials licensees must provide decommissioning
financial assurance. This financial assurance may be funds set aside by
the licensee or a guarantee that funds will be available when needed.
The guarantee may be provided by a qualified third party or upon
passage of a financial test by the licensee. The third party may be the
parent company of the licensee, which is the case for about 10 percent
of the NRC materials licensees that are obligated to have
decommissioning financial assurance.
Nuclear power reactors have financial assurance obligations that
are different from materials licensees. The minimum amount of financial
assurance for reactors is defined in 10 CFR 50.75, and this rulemaking
does not change this required minimum amount. Acceptable financial
assurance mechanisms for power reactors are defined in Sec.
50.75(e)(1). An external sinking fund is used to provide financial
assurance for about 90 percent of the reactors. The remaining 10
percent of reactors have assurance through prepaid funds and/or
guarantees.
As of December 31, 2006, there were about 300 NRC materials
licensees that had a regulatory obligation to provide approved
financial assurance mechanisms. An acceptable financial assurance
mechanism for unrestricted use decommissioning is any of the following
four types of financial instruments:
A prepayment of the applicable decommissioning costs;
A guarantee to pay the decommissioning costs issued by a
qualified third party or the licensee;
A statement of intent from a Federal, State or local
government licensee; or
An external sinking fund.
The prepayment method is full payment in advance of decommissioning
using an account segregated from licensee assets and outside the
licensee's administrative control. About 11 percent of current
financial assurance mechanisms for materials licensees are prepayment
methods, with most of these being escrow accounts. Currently accepted
prepayment mechanisms include escrow accounts (8 percent), trust funds
(2 percent), certificates of deposit (1 percent), government funds (0
percent), and deposits of government securities (0 percent). This final
rule eliminates all prepayment mechanisms except the trust fund, for
reasons discussed under Section II.N.2 of this document.
The guarantee method can be used by licensees that demonstrate
adequate financial strength through their annual completion of
financial tests contained in Appendices A, C, D, and E of 10 CFR part
30. About 51 percent of current financial assurance mechanisms for
materials licensees are guarantee methods. Currently accepted guarantee
mechanisms include letters of credit (28 percent), parent company
guarantees (8 percent), licensee self-guarantees (7 percent), surety
bonds (8 percent), lines of credit (0 percent), and insurance policies
(0 percent). This final rule eliminates the line of credit as an
acceptable mechanism, for reasons discussed under Section II.N.10 of
this document.
The statement of intent is a commitment from a Federal, State or
local government licensee that it will request and obtain
decommissioning funds from its funding body, when necessary for
decommissioning an NRC licensed site. It is available for use only by
governmental entities. Approximately 38 percent of the NRC materials
licensees who are required to provide financial assurance use the
statement of intent as a means to provide financial assurance.
The external sinking fund is an approved financial assurance method
that allows an NRC licensee to gradually prepay the DCE, but no NRC
materials licensees who have an obligation to provide decommissioning
financial assurance use this option. Before this rulemaking, materials
licensees choosing this option would have to cover amounts that were
not prepaid by a surety mechanism or insurance. The same requirements
apply to power reactor licensees, except that the amounts that are not
prepaid can be covered by a guarantee method as well as by surety or
insurance. This rulemaking provides materials licensees opting to use
the external sinking fund with the same degree of flexibility that
power reactor licensees have had since 1998 (in a final rulemaking for
power reactor financial assurance, the NRC allowed use of a parent
company guarantee or self-guarantee with an external sinking fund (63
FR 50465; September 22, 1998)). This final rule makes conforming
changes in the financial assurance requirements for materials licensees
(10 CFR 30.35, 40.36, 70.25, and 72.30) to provide greater consistency
with the 10 CFR part 50 regulations.
This discussion of financial assurance to decommission a site
pertains only to unrestricted use under 10 CFR 20.1402. If a licensee
can demonstrate its ability to meet the provisions of 10 CFR 20.1403
for restricted use, financial assurance for long-term surveillance and
control may be provided by a trust fund or by a government entity
assuming ownership and custody of the site.
G. Why might some materials licensees not have funds to decommission
their facility?
In SECY-03-0069, the NRC evaluated licensee decommissioning
experience and identified the following five reasons why some licensees
may not have enough funds to complete their decommissioning activities.
1. Licensees at complex sites may underestimate decommissioning
costs, if the assumption that the site will qualify for a restricted
release proves incorrect. The cost for a restricted release is usually
significantly lower than unrestricted release given the high offsite
disposal costs of licensed material when compared to the cost of onsite
controls. If it turns out that the licensee cannot meet the 10 CFR
20.1403 criteria for restricted conditions, the licensee may then not
be able to meet its decommissioning financial obligations. To address
this problem, this final rule amends 10 CFR 30.35, 40.36, 70.25, and
72.30 to require licensees to obtain NRC approval of their DFP based on
a DCE for unrestricted release, unless the ability to meet the
restricted release criteria can be adequately shown.
2. Certain operational events, particularly those that cause soil
or ground-water contamination, can increase decommissioning costs if
not addressed during the life of the facility. If the licensee does not
identify these events, assess the problem in a timely manner, and
update its DCE based on new conditions, the licensee may find it
difficult to later meet its decommissioning obligations. To address
this problem, this final rule amends 10 CFR 20.1406 as discussed
previously in Section II.A of this document. Licensees also are
required, in amendments to 10 CFR 30.35, 40.36, 70.25, and 72.30, to
factor in residual radioactivity information in arriving at DCEs.
[[Page 35518]]
3. Certain financial assurance methods may not be effective in
bankruptcy situations, given that funds held in them may be accessible
to creditors. For example, title to property held in escrow remains
with the licensee, making the property potentially vulnerable to claims
by creditors. Another example is the parent and self-guarantees. The
guarantees promise performance rather than payment. In the past, two
companies used corporate reorganization to isolate the decommissioning
obligations with the subsidiary company, but with insufficient funds to
perform the work. In one case, the parent company reorganized without
NRC approval and transferred to the subsidiary few assets and low
levels of operating profits, so that the subsidiary was able to fund
only a small portion of its decommissioning costs. In the second case,
the parent company purchased the licensee before the financial
assurance regulations went into in effect. The licensee was permanently
shut down after the purchase and was unable to provide full financial
assurance. To address this problem, this final rule amends 10 CFR
30.35, 40.36, 70.25, 72.30, and 10 CFR part 30, Appendices A, C, D, and
E by eliminating the use of an escrow account as a financial assurance
option, and requiring a guarantor, as a condition of using the parent
company guarantee and self-guarantee financial assurance options, to
establish a standby trust fund and to submit to a Commission order, if
the guarantor is in financial distress, to immediately pay the
guaranteed funds into the standby trust.
4. The funds set aside by licensees to carry out decommissioning
may decline in value over time. To address this problem, this final
rule amends 10 CFR 30.35(h), 40.36(f), 70.25(h), and 72.30(g) to
require that a licensee monitor the status of its decommissioning funds
and, if necessary, add funds if the balance falls below the estimated
cost of decommissioning.
5. The initial funding of a trust fund to cover the recurring costs
of long-term surveillance and control for license termination under
restricted release criteria may be inadequate if it assumes a high rate
of return for the trust fund. To address this problem, this final rule
amends 10 CFR 20.1403 to require that licensees assume only a 1 percent
real rate of return in establishing the initial funding amount.
H. Why Is 10 CFR 50.82 being amended?
Several power reactor licensees have successfully decommissioned
their reactor sites consistent with 10 CFR part 20 requirements. In
some cases, reactor decommissioning costs have exceeded the initial
DCE. For example, the Connecticut Yankee Nuclear Plant experienced
higher decommissioning costs than planned, due in part to a larger
volume of contaminated soil than was identified in the initial site
characterization.
In the past, the NRC has not required licensees to submit details
of decommissioning costs on the grounds that the typical reactor
licensee was part of a public utility with access to substantial assets
and revenues and that the minimum required amount for decommissioning
financial assurance was adequate. A licensee's status as a regulated
public utility provided access to cost of service rate recovery to help
provide additional funds. A public utility had access to sales revenues
to fund its obligations, even if rate recovery was limited.
Deregulation of the electric industry now permits a reactor
licensee to operate as a merchant plant not subject to rate regulation
or rate recovery of costs of service. When it ceases operation, it may
have no sales revenues. The licensee may be organized as a separate
company or a subsidiary of a holding company to isolate the risks and
rewards of selling electricity on the open market. Without access to
rate relief, with no sales revenues, and with the licensee's owner
protected by limited liability, shortfalls in decommissioning funding
may jeopardize timely completion of decommissioning. This final rule
provides NRC regulatory authority to perform oversight to assure that
the licensee anticipates potential shortfalls and takes steps to
control costs to stay within its budget or obtain additional funds.
I. What changes are being made to 10 CFR 20.1406?
New 10 CFR 20.1406(c) states as follows:
(c) Licensees shall, to the extent practical, conduct operations
to minimize the introduction of residual radioactivity into the
site, including the subsurface, in accordance with the existing
radiation protection requirements in Subpart B of this part and
radiological criteria for license termination in Subpart E of this
part.
The term ``to the extent practical'' is intended to limit the scope
of this provision to actions that are already manifested in practice or
action. The same phrase is used in existing 10 CFR 20.1101(b), which
requires that licensees keep occupational and public radiological doses
to ALARA levels. This final rule requires licensees to conduct their
operations to minimize the introduction of residual radioactivity into
the site, including the subsurface, to achieve effective
decommissioning planning. For operating facilities, significant
residual radioactivity is a quantity that would later require
remediation during decommissioning to meet the unrestricted use
criteria of 10 CFR 20.1402.
The current 10 CFR 20.1101 requirements are related to those in new
10 CFR 20.1406(c). Section 20.1101(a) requires each licensee to
implement a radiation protection program to ensure compliance with the
regulations in 10 CFR part 20. The current 10 CFR 20.1101(b) requires
each licensee to use, to the extent practical, procedures and
engineering controls based upon sound radiation protection principles
to achieve occupational doses and doses to members of the public that
are ALARA. To achieve doses that are ALARA during facility operations
and decommissioning, the Sec. 20.1101(b) operating procedures and
controls must apply to potential radiological hazards and to methods
used by the licensee to minimize and control waste generation.
In furtherance of these existing requirements, new 10 CFR
20.1406(c) includes the term ``residual radioactivity,'' as discussed
previously in Section II.A of this document. This new section applies
to current licensee operations, in contrast to the Sec. 20.1406(a) and
(b) requirements which are imposed on license applicants. Residual
radioactivity excludes background radiation. The licensees of large
nuclear facilities will have performed an assessment of background
radioactivity at their site as part of an Environmental Impact
Statement required during the license application process. As a matter
of standard operating practice, licensees will document the background
level of radioactivity when a survey is performed at the site. Residual
radioactivity, as defined in 10 CFR 20.1003, is not ``residual
radioactive material'' as defined in 10 CFR 40.4, which is used only
with respect to materials at sites subject to remediation under Title I
of the Uranium Mill Tailings Radiation Control Act of 1978, as amended.
The final rule's use of the term ``subsurface'' designates the area
below the surface by at least 15 centimeters, as defined in NUREG-1575,
``Multi-Agency Radiation Survey and Site Investigation Manual''
(ML070110228). Under this final rule, licensees must conduct their
operations to minimize residual radioactivity that enters the
[[Page 35519]]
subsurface at the site. If there are pathways that would allow the
contamination to migrate, the licensee may need to monitor the
groundwater onsite for contamination based on site specific conditions.
Based on past NRC experience, significant concentrations or quantities
of undetected and unmonitored contamination, caused primarily by
subsurface migration of groundwater, have been a major contributor to a
site's becoming a legacy site and a potential radiological hazard.
Several hundred NRC materials licensees possess radioactive
material and have liquid processes that could cause subsurface
contamination. These licensees generally are compliant with regulations
that limit effluent release to the environment over a specified time.
Some of these licensees may not have documented onsite residual
radioactivity, such as spills, leaks and onsite burials that may be
costly to remediate during decommissioning and should be considered in
arriving at an accurate DCE. There have been instances of previously
unidentified soil and ground-water contamination at uranium recovery
and rare earth metal recovery sites undergoing decommissioning in
several states, notably Colorado and Pennsylvania. Two contributing
factors to the accumulation of unidentified subsurface contamination
are: (1) Reluctance among some licensees to spend funds during
operations to perform surveys and document spills and leaks that may
affect site characterization; and (2) reluctance to implement
procedures for waste minimization.
The vast majority of NRC materials licensees do not have processes
that would cause subsurface contamination. NRC's expectation is that
these licensees, including those that release and monitor effluents of
short-lived radionuclides to municipal sewer systems, will not be
impacted by new 10 CFR 20.1406(c). The accumulation of radionuclides at
municipal waste treatment facilities was the subject of an Interagency
Steering Committee on Radiation Standards (ISCORS) study (NUREG-1775,
November 2003, ML033140171), which concluded that, in general, these
facilities do not have significant concentrations of long-lived
radionuclides. Other classes of licensees that are, in general, not
expected to introduce significant residual radioactivity into the
subsurface include broad scope academic, broad scope medical, and small
research and test reactors. The DG-4014 proposes an acceptable method
for these licensees to evaluate the subsurface residual radioactivity.
Power reactor licensees have exhibited a high level of ALARA
discipline with respect to effluent release and known spills and leaks.
Current NRC regulations in Sec. Sec. 20.1301, 20.1302, and 50.36a
ensure that power reactor licensees maintain adequate monitoring and
surveys of radioactive effluent discharges, with annual reporting
requirements outlined in Sec. 50.36a(2) that are made available to the
public on the NRC Web site. Several nuclear power plants have reported
abnormal releases of liquid tritium, which resulted in ground-water
contamination. On May 5, 2006, the NRC staff issued a revised baseline
inspection module (Procedure 71122.01, ML053490179) used to inspect
leaks and spills at power reactor sites. To further address this issue,
the Nuclear Energy Institute (NEI) developed voluntary guidance for
licensees in the Industry Ground Water Protection Initiative (GPI)
(ML072600295). The voluntary GPI, implemented by all licensed power
reactors as of September 2008, is a site-specific groundwater
protection program to manage situations involving inadvertent releases
of licensed material to groundwater and to provide informal
communication to appropriate State/Local officials, with follow-up
notification to the NRC as appropriate.
J. What surveys are required under amended 10 CFR 20.1501(a)?
Before this final rule, Sec. 20.1501(a) required licensees to
perform surveys necessary to comply with Part 20 requirements,
including surveys reasonable under the circumstances to evaluate
potential radiological hazards. This final rule requires radiological
surveys, reasonable under the circumstances (such as scoping surveys),
sufficient to understand the extent of significant residual
radioactivity, including the subsurface. This final rule does not add
any new requirements regarding extensive site characterization. Slow
and long-lasting leaks of radioactive material into the onsite
subsurface may eventually produce radiological hazards and pose a risk
for creation of a legacy site if contaminant characteristics are not
identified when the facility is operating. The staff views radiological
hazards as including those resulting from subsurface contaminating
events, when these events produce significant residual radioactivity
that would later require remediation during decommissioning to meet the
unrestricted use criteria of 10 CFR 20.1402. An effective approach to
understand the extent of subsurface residual radioactivity is through
the use of radiological surveys.
Appropriate surveys are essential for determining the adequacy of
financial assurance for materials licensees, and need to be done
periodically on a limited basis during operations when the DFP and
financial assurance can be adjusted while the licensee is still
generating revenue. This is far superior to the current practice at
some facilities of delaying even limited survey work at the site until
after the facility has been shut down.
Facilities that process large quantities of licensed material,
especially in fluid form, have the potential for causing significant
environmental contamination. Leaks from these facilities can lead to
large amounts of radioactive contamination entering the subsurface
environment over an extended time. The estimated doses from this
contamination are below the limits in 10 CFR part 20 that would
initiate immediate regulatory action. Another factor the staff
considered in preparing this final rule is the high cost to dispose of
radioactive materials offsite. These costs are a concern, even when the
material contains relatively low concentrations of radioactivity. A
continued trend of high disposal costs could increase the number of
environmental contamination incidents at operating facilities,
resulting in higher decommissioning costs. A third factor that may
contribute to future legacy sites is the delayed identification of
contamination on the site. Over a long time, contamination that
migrates in subsurface soil or groundwater does not cause immediate
exposure to either workers or the public that approaches the limits
specified in 10 CFR part 20. It is only after operations have ceased
when the possible results of unlimited access to the site, and
associated exposure pathways (i.e., ingestion and inhalation) are being
evaluated, that the volume of contamination becomes apparent.
As discussed previously in Section II.A of this document, amended
10 CFR 20.1501(a) requires licensees to perform contamination surveys
to comply with current 10 CFR part 20 requirements and the new Sec.
20.1406(c), if there is a history of leaks or spills to the subsurface
at the site. The magnitude and extent of radiation levels are typically
defined in units of radioactivity measurement, such as in micro-rem per
hour ([micro]rem/hr). The concentrations or quantities of residual
radioactivity are typically defined in units of radioactivity
associated with a specific radionuclide, for example
[[Page 35520]]
picocuries per liter of tritium (pCi/L of H-3).
The amended Sec. 20.1501(a) retains previous survey requirements
and specifies that such requirements include consideration of
subsurface residual radioactivity. Survey requirements may include
ground-water monitoring if reasonable under the site specific
conditions. Soil sampling also may be warranted based on site-specific
conditions--for example, if there is no ground-water monitoring at the
site or if known subsurface contamination has not migrated to the
groundwater. The DG-4014 proposes a variety of acceptable methods to
evaluate subsurface characteristics. The NRC recognizes that ground-
water monitoring may be a surrogate for subsurface monitoring at some
sites, that soil sampling may be appropriate at other sites, and that
there are sites with no subsurface residual radioactivity where the
existing monitoring method is appropriate. Also, the NRC recognizes
that an area within the footprint of a building, during licensed
operations, may not be a suitable area for subsurface residual
radioactivity surveys if the process of sampling would have an adverse
impact on facility operations. The decision to perform subsurface
residual radioactivity sampling in a particular area should be balanced
against the potential to jeopardize the safe operation of the facility.
The purpose of amended 10 CFR 20.1501(a) and new 10 CFR 20.1406(c) is
to specify that compliance with 10 CFR part 20 survey and recordkeeping
requirements is necessary to demonstrate compliance with existing
regulations and to plan effectively for decommissioning, including
effects from subsurface contamination.
Final rule amendments to 10 CFR 30.35(e)(2), 40.36(d)(2),
70.25(e)(2), and 72.30(c) require licensees who have a DFP or a LTP to
factor in the results of surveys, performed under Sec. 20.1501(a), in
estimating decommissioning costs. This requirement applies only to
materials licensees who are required to have a DFP and assures that
these licensees properly consider the extent of subsurface residual
radioactivity in their DCEs, thus improving decommissioning planning
and helping to reduce the likelihood of future legacy sites.
For the materials licensees with a certified amount as
decommissioning financial assurance, the NRC assumes their current
monitoring methods are adequate. If these licensees detect onsite
contamination that would later require remediation during
decommissioning to meet the unrestricted use criteria of 10 CFR
20.1402, then the licensees are required to submit for approval by the
NRC a DFP with a DCE.
Some materials licensees are not required to have financial
assurance for decommissioning based on a license possession limit that
is below the financial assurance threshold values in Appendix B of 10
CFR part 30. For these licensees, the NRC's expectation is that the
monitoring performed under amended Sec. 20.1501(a) would be of a
simple form, as will be discussed in DG-4014. Simple form monitoring is
a method that confirms the absence of leaks or spills to the
subsurface. The risk is low that any of these sites would cause
contamination to create a potential radiological hazard or a future
legacy site.
On the effective date of this final rule, NRC's expectation is that
no additional surveys will be required of power reactor licensees and
fuel cycle facilities. For power reactors, NRC staff concludes that the
monitoring and survey processes and related reports prepared at power
reactor sites will likely contain sufficient information to satisfy new
Sec. 20.1406(c) and amended Sec. 20.1501 requirements. The NRC is not
requiring licensees to submit reports, but the information must be kept
onsite in records that are available for review. It is not expected
that power reactor licensees will need to immediately install
additional monitoring equipment or modify existing operating procedures
to satisfy the amended Sec. 20.1501(a) requirements. It may be
necessary, however, for such licensees to take these actions if, for
example, significant residual radioactivity is identified at a power
reactor site at a level higher than had been previously identified. In
any such situations, the need for additional monitoring will be
determined on a case-by-case basis.
Fuel cycle facilities, such as uranium fuel fabrication plants, the
gaseous diffusion enrichment plants, and the dry process natural
uranium conversion/de-conversion facility, also perform surveys to
detect radioactive releases to the groundwater. NRC staff concludes
that the monitoring and survey processes and related reports prepared
at these facilities would likely contain sufficient information to
satisfy Sec. 20.1406(c) and Sec. 20.1501 requirements. A high level
of ALARA discipline for onsite spills and leaks is expected of the
centrifuge enrichment plants and mixed oxide fabrication plant based on
the information in their license applications (these facilities have
not begun operations).
K. What information must the licensee collect under amended 10 CFR
20.1501?
For facilities having significant subsurface contamination, NRC is
requiring licensee documentation of contaminating events and survey
results, including groundwater monitoring surveys, and the retention of
survey records until license termination, to facilitate later
decommissioning of the facility.
Licensees must be able to demonstrate compliance with the
regulations in 10 CFR part 20 through surveys that evaluate the
magnitude and extent of site radiation levels, including significant
concentrations or quantities of residual radioactivity in the
subsurface. Such surveys would evaluate any potential radiation hazards
of the radiation levels and residual radioactivity detected. The
sampling results should include the date, time, location, contaminants
of interest and contamination levels, and the concentrations at which
action is required to comply with regulations. The contaminants of
interest are those used within the facility with half-lives long enough
that they would require remediation during decommissioning to meet the
unrestricted use criteria under 10 CFR 20.1402. Contaminants may
include both chemicals and radionuclides in the groundwater from
sources upstream of the NRC-licensed site because of the potential for
interaction with releases from other sites. When groundwater is being
monitored, the surveys conducted by the licensee should include hydro-
geologic evaluations that lead to a determination of effective sampling
and analysis, including accurate placement and installation of the
wells, and well locations to determine the nominal groundwater flow
direction and preferential flow paths for each ``aquifer'' underlying
the site. Licensees may need to perform surveys to demonstrate
compliance with the new 10 CFR 20.1406(c).
Under the requirements of Sec. Sec. 30.35(g), 40.36(f), 50.75(g),
70.25(g), and 72.30(d), licensees must designate the records from 10
CFR 20.1501(b) surveys of subsurface residual radioactivity at the site
as records important for decommissioning. Significant residual
radioactivity that must be documented in these records would include
onsite subsurface residual radioactivity that would later require
remediation during decommissioning to meet the unrestricted use
criteria of 10 CFR 20.1402 (73 FR 3815; January 22, 2008). These
records can be as simple as a description of the contaminating event,
[[Page 35521]]
to include date, time, location, and the estimated quantities and
activity levels of radioactive materials that were spilled or leaked.
The documentation may describe the activation of a moisture alarm
system used to indicate the presence of liquid in an area that is
supposed to be dry. Contamination survey results must be included in
these records if the surveys are considered important for
decommissioning planning.
L. How will licensees report required information to the NRC?
There are no reporting requirements for licensees under amendments
to 10 CFR 20.1406(c) and 20.1501.
Instead, the NRC requires licensees to collect information and to
have that information available for review. The information must be
retained by licensees in records important for decommissioning under
Sec. Sec. 30.35(g), 40.36(f), 50.75(g), 70.25(g), and 72.30(d).
Under amendments to financial assurance regulations, under Sec.
30.35(e), Sec. 40.36(d), 10 Part 40 Appendix A Criterion 9(b), Sec.
70.25(e), and Sec. 72.30, reporting requirements would increase for
materials licensees who must prepare a detailed cost estimate for
decommissioning. Reporting requirements also increase based on amended
Sec. 50.82(a) for power reactor licensees who prepare a post-shutdown
decommissioning activities report (PSDAR) or an annual financial
assurance status report.
Under amendments to 10 CFR part 30, Appendix A, licensees who use
the parent company guarantee as financial assurance for decommissioning
will have increased reporting requirements. Increased reporting
requirements will include reporting of off-balance sheet transactions
and verification of bond ratings and annual documentation of continuing
eligibility to use the parent company guarantee. Licensees who use the
self-guarantee as financial assurance for decommissioning under 10 CFR
part 30, Appendices C, D, and E, will have similarly increased
reporting requirements.
Licensees will continue to submit information to the NRC by
certified mail or through approved Electronic Information Exchange
(EIE) methods.
M. What financial assurance information must licensees report to the
NRC?
Materials licensees with a license possession limit that is below
the financial assurance threshold in 10 CFR part 30, Appendix B, are
not required to have financial assurance for decommissioning. Licensees
under 10 CFR parts 30, 40, and 70 with a license possession limit above
the financial assurance threshold in 10 CFR part 30, Appendix B, but
below the threshold requiring a DFP, have an option of providing
financial assurance based on an amount specified by regulation or based
on a DFP with a site-specific cost estimate. Materials licensees with a
licensed possession limit above the financial assurance threshold, and
all 10 CFR part 72 licenses, must submit at intervals not exceeding 3
years a DFP which includes the following: A site-specific cost
estimate, a description of the methods used to assure the funds, and a
description of the means of adjusting the cost estimate. The required
contents of the DFP are changing as a result of this final rule, as
discussed in Section II.P of this document.
Except for 10 CFR part 72 licensees, materials licensees must also
provide a signed original of the financial instrument obtained to
satisfy the financial assurance requirement.
For materials licensees, Chapter 4 in NUREG-1757, Volume 3,
revision 1, ``Consolidated NMSS Decommissioning Guidance,'' provides
details on information necessary to satisfy their financial assurance
requirements. This document is available on the NRC Web site at: http://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1757/. This
document is being updated to include new requirements resulting from
this final rule.
Power reactor licensees are already required by existing 10 CFR
50.75(f)(1) to report on the status of their decommissioning funds at
2-year intervals. A power reactor licensee that is within 5 years of
the end of its projected life, or will close within 5 years (before the
end of its licensed life), or has already closed, must submit the
report of funds status on an annual basis. These requirements are not
being changed.
Applicants for power reactor and non-power reactor licenses and
reactor license holders must submit a decommissioning report as
required by existing 10 CFR 50.33(k), and this provision is not being
changed. The 10 CFR 50.33(k) report is submitted once and contains the
following: Information indicating how reasonable assurance will be
provided that funds will be available to decommission the facility, the
method used to provide funds for decommissioning, and the means for
adjusting periodically the amount to be provided. The reporting
requirements for reactors being decommissioned are changing as a result
of amendments to 10 CFR 50.82, as discussed in Section II.R in this
document.
For nuclear power reactor licensees, Chapter 2 in Regulatory Guide
1.159, ``Assuring the Availability of Funds for Decommissioning Nuclear
Reactors,'' provides details on the information necessary to satisfy
these licensees' financial assurance requirements (ML032790365). This
regulatory guide is being revised. The draft guide (DG-1229) is
available at ML103400008.
N. What changes are being made to financial assurance regulations?
Most of the final rule amendments are changes to financial
assurance regulations for materials licensees. A few changes apply to
decommissioning financial assurance for power reactor licensees. The
changes to financial assurance regulations are discussed in this
section, under the following headings:
N.1 Require a trust fund for decommissioning under restricted release.
N.2 Require a trust fund for the prepayment option.
N.3 Require an upfront standby trust fund for the parent guarantee and
self-guarantee options.
N.4 Require parent company to inform NRC of financial distress and
submit to an Order.
N.5 Require guarantor payment immediately due to standby trust.
N.6 Allow intangible assets, with an investment grade bond, to meet
some financial tests.
N.7 Increase the minimum tangible net worth for the guarantees'
financial tests.
N.8 Clarify guarantors' bond ratings and annual demonstration
submittals.
N.9 Invalidate the use of certification for financial assurance if
there is contamination.
N.10 Other changes to financial assurance regulations.
Many of the financial assurance amendments had been in NRC guidance
and are being codified in this final rule. The amendments strengthen
and clarify the financial assurance requirements. The NRC seeks to
improve decommissioning planning and reduce the number of funding
shortfalls caused in the past by--(1) overly optimistic decommissioning
assumptions; (2) lack of adequate updating of cost estimates during
operation; and (3) licensees' falling into financial distress with
financial assurance funds unavailable for decommissioning. The changes
increase licensee reporting requirements. The added reporting burden is
estimated as part of the Paperwork Reduction Act Statement in Section
IX of this document. The costs
[[Page 35522]]
and benefits of this final rule are evaluated in the regulatory
analysis in Section X of this document.
N.1 Require a Trust Fund for Decommissioning Under Restricted Release
The NRC is amending the regulations related to decommissioning
financial assurance applied to planned restricted release sites.
This final rule requires, under Sec. 20.1403(c), that the funds
for financial assurance of long-term care and maintenance of a
restricted release site must be placed into a trust segregated from the
licensee's assets and outside the licensee's administrative control.
This amendment eliminates, as prepayment options, the escrow
account, sureties and insurance, and the parent company and self-
guarantee methods at restricted release sites. To date, no licensee has
chosen to use these financial assurance mechanisms at a restricted
release site. These mechanisms were eliminated, because they possess
characteristics that make their use inadvisable for the types of long-
term care and maintenance situations involved in restricted release
sites. The final rule continues to permit government entities to use a
statement of intent or to assume custody and ownership of a site.
Escrow accounts are not well suited to the protection of funds over
a long term. The purpose normally served by an escrow is to collect or
hold funds for an expense to be paid in the relatively near future
(e.g., property tax escrows). The EPA concluded that a trust was more
protective of funds because, under trust law, the title to property in
a trust is transferred to the trustee (46 FR 2802, 2827; January 12,
1981). In an escrow account, title to the property remains with the
grantor. Thus, escrow property is more likely to be subject to a
creditor's claim than property held in trust. In addition, the law of
trusts places obligations on the trustee to act in the interest of the
beneficiary. In contrast, an escrow agent is responsible only for what
is specified in the escrow agreement. The EPA concluded that it would
be extremely difficult to draft an escrow agreement that adequately
specifies all the actions that an escrow agent would need to take in
all situations to assure the instrument served its intended purpose.
The surety methods and insurance are also not well suited to
protect funds over the long term, because they depend on contracts made
by the former licensee. There are no actual funds set aside for future
costs; rather, the methods are promises made by the issuer to pay at a
future time. These methods require renewal to remain effective. They
depend on the former licensee continuing to exist to make renewal
payments for the surety or insurance instruments. The instrument lapses
if the payments are not made. Under the existing rule, the NRC may
require the issuer to pay the face amount before the lapse occurs.
However, issuers may resist making the payment, which could delay
obtaining (and possibly reduce) the amount of funds for long-term care
and maintenance. Whether the issuer resists paying or not, when the
funds are paid for the face amount, the funds will be placed into a
trust account. That is, the response to the non-renewal of a surety is
to create a trust to hold funds. The long-term nature of the obligation
increases the possibility that circumstances may arise that would
require a demand for payment. In view of the potential difficulties and
delays and recognizing that a trust fund is the preferred long-term
instrument for holding funds, the surety and insurance methods of
financial assurance for long-term maintenance and control have been
eliminated.
Likewise, the parent company and self-guarantee mechanisms are not
well suited for providing financial assurance at restricted release
sites, because these were designed to assure funding for the relatively
limited time needed to complete most decommissioning projects under 10
CFR 20.1402. The former licensee or its parent must continue to exist
to pay for long-term control and maintenance costs. If the former
licensee or its parent ceases to exist, the self-guarantee or parent
company guarantee has no source of funds to pay the costs. In addition,
these guarantees presume the existence of a licensee subject to NRC
authority. However, when the license is terminated, the NRC has no
regulatory authority over the former licensee. Therefore, the self-
guarantee and parent company guarantee have been eliminated as
financial assurance options at restricted release sites.
In contrast, the trust fund is best suited as a financial mechanism
to assure the necessary long-term care and maintenance at restricted
release sites. The trust fund can exist for long periods without need
for renewal. It exists independently of the former licensee and can
continue to serve the purposes of control and maintenance, even if the
former licensee ceases to exist. The trustee has a fiduciary duty to
serve the beneficiaries of the trust. The funds placed in the trust
become property of the trust and generally cannot be reached by
creditors of the former licensee. Trust funds have traditionally been
used to provide for the long-term care and maintenance of parks and
other public facilities, to care for cemeteries, and for similar
purposes. This final rule requires the use of trust funds for the
financial assurance for long-term care and maintenance at restricted
release sites, unless a government entity provides long-term funding or
assumes custody and ownership of the site.
A further change to 10 CFR 20.1403(c)(1) requires that the initial
amount of the trust fund established for long-term care and maintenance
be based on a 1 percent annual real rate of return on investment. A
similar provision is currently contained in 10 CFR part 40, Appendix A,
Criterion 10, which provides that if a site-specific evaluation shows
that a sum greater than the minimum amount specified in the rule is
necessary for long-term surveillance following decontamination and
decommissioning of a uranium mill site, the total amount to cover the
cost of long-term surveillance must be that amount that would yield
interest in an amount sufficient to cover the annual costs of site
surveillance, assuming a 1 percent annual real rate of interest.
The NRC concluded that a conservative estimate of the annual real
rate of return is justified in the case of financial assurance for
long-term care and maintenance under Sec. 20.1403(c)(1). Although the
NRC in 10 CFR 50.75(e)(1)(ii) allows a licensee of a nuclear power
reactor that is using an external sinking fund to take credit for
projected earnings on the external sinking funds (using up to a 2
percent annual real rate of return from the time of the future fund's
collection through the decommissioning period), the reactor situation
is distinguished by the continuing presence of the reactor licensee,
who is obligated to provide additional funds if necessary. Long-term
trust funds for surveillance and control are created when license
termination relieves the licensee of any further obligation regarding
the site. Therefore, no licensee is available to make up shortfalls in
the fund, which reduces the likelihood that funds will be available
when needed. A long period of low returns could deplete a trust fund so
that later higher returns would be insufficient to return the fund to
the value needed to permit earnings to cover the recurring long-term
costs. Consequently, a conservative rate of return is necessary to
assure that funds will be available when needed. From 1975-2005, the
annual real rate of return was 1.58 for U.S. Treasury Bills and 4.87
for government bonds. Thus, a
[[Page 35523]]
1 percent real rate of return is conservative and appropriate for
assuring funds under the amended Sec. 20.1403(c)(1). The actual rate
of return may exceed the 1 percent real rate. The trust agreement may
contain provisions to return excess funds to the trust grantor if the
fund balance significantly exceeds the amount needed to cover the
recurring costs at the 1 percent rate.
This final rule adds a new Sec. 20.1404(a)(5) specifying one of
the factors that the Commission must consider in determining whether to
terminate a license under alternate criteria. The Commission must
consider whether the licensee has provided sufficient financial
assurance to enable an independent third party (including a government
custodian of a site) to assume and carry out responsibilities for any
necessary control and maintenance of the site. This new section also
explicitly states that the financial assurance be in the form of a
trust fund, as in Sec. 20.1403(c).
N.2 Require a Trust Fund for the Prepayment Option
The final rule amends the list of prepayment financial methods that
may be used to provide financial assurance for decommissioning to
provide that prepayment shall only be in the form of a trust
established for decommissioning costs (Sec. Sec. 30.35(f)(1),
40.36(e)(1), 70.25(f)(1), and 72.30(c)(1)). The final rule eliminates
the four other prepayment options that had been listed in those
sections of the regulations (i.e., the escrow account, government fund,
certificate of deposit, and deposit of government securities). Three of
these options (the government fund, certificate of deposit, and deposit
of government securities) initially were authorized for use to provide
alternatives to licensees that elected not to use a trust fund as their
prepayment mechanism, even though the NRC recognized that in the event
of the licensee's bankruptcy, they provided somewhat less assurance
that the funds would remain available to pay for decommissioning.
However, no NRC licensees have elected to use the government fund and
deposit of government securities options, and only two have used a
certificate of deposit. Because of their relative risk in bankruptcy
and their non-use by licensees, the NRC has eliminated them as
alternatives for providing financial assurance for decommissioning.
The NRC recognizes that the elimination of the escrow account
option will affect some materials licensees who currently use escrows.
Approximately 25 escrows are currently in use as a prepayment option
for decommissioning financial assurance. Because some materials
licensees use more than one escrow, the number of materials licensees
using escrows is slightly less than the number of escrows.
The staff reviewed several studies of the situation of escrows in
bankruptcy and concluded that the most accurate summary of the various
assessments is as follows. The funds contained in escrows that are set
up correctly before a licensee's entry into bankruptcy will likely be
secure from transfer into the bankruptcy estate as assets of the
debtor, and they will not be reachable by the bankruptcy trustee using
doctrines of fraudulent conveyance or voidable preference. However,
correctly setting up an escrow is difficult, as noted in Section II.N.1
of this document. The NRC is also concerned that a determination of the
legal status of an escrow may be subject to considerable delay. In
addition to the time necessary to carry out a legal standing analysis,
a bankruptcy trustee could attempt to use the automatic stay provisions
of the bankruptcy code to stop payment by an escrow agent under the
escrow, if that payment is occurring following the commencement of the
bankruptcy action. While this attempt may fail, it could postpone the
NRC's access to the funds held in the escrow and thereby preclude the
prompt commencement of decommissioning. Finally, the administrative
costs of a trust fund are comparable to an escrow, so there is little
economic benefit to using the escrow.
Elimination of the use of escrow accounts by materials facilities
was discussed at the public stakeholder meeting held January 10, 2007.
No stakeholders objected to the elimination of the escrow as a
financial assurance method. Two comments on this topic were received
during the proposed rule public comment period. Both comments disagreed
with the NRC's elimination of the use of escrow accounts for financial
assurance. For reasons discussed previously, the NRC disagrees with
these comments and has eliminated the escrow as an approved method for
materials licensees to provide financial assurance. The escrow account
may continue to be used by power reactor licensees, pursuant to 10 CFR
50.75. The technical basis for the Decommissioning Planning proposed
rule did not include removal of the escrow account from 10 CFR 50.75,
so this change was not made during this rulemaking.
N.3 Require an Upfront Standby Trust Fund for the Parent Guarantee and
Self-Guarantee Options
The final rule amends Appendices A, C, D, and E to 10 CFR part 30
(amends Section III.D of Appendix A; amends Section III.F and adds a
new Section III.G to Appendix C; amends Section III.D and adds a new
Section III.E to Appendix D; and adds a new Section III.F to Appendix
E). The amendments require a parent company providing a parent company
guarantee and a licensee providing a self-guarantee to--(1) set up a
standby trust before it may rely on the guarantee for financial
assurance, and (2) specify criteria for selecting an acceptable
trustee.
Under current regulations, the guarantor was not required to
establish a standby trust before providing a parent company or self-
guarantee. Instead, a standby trust would be established and used to
hold funds for decommissioning only if the NRC required the guarantor
to provide such funding for decommissioning. Setting up a standby trust
at the time that the guarantee is drawn upon could lead to a
significant delay. Therefore, regulatory guidance recommended the
creation of a standby trust at the commencement of the guarantee. A
standby trust is necessary, because the NRC cannot accept
decommissioning funds directly. Under the ``miscellaneous receipts''
statute (31 U.S.C. 3302(b)), the NRC must turn over all payments
received to the U.S. Treasury. Therefore, a standby trust is necessary
to receive funds if the NRC requires the guarantor to put the funds
into a segregated account. Creating a standby trust before the
guarantee is provided avoids potential delays in initiating
decommissioning. In addition, the use of a trust protects the funds
from creditors' claims, which may be necessary if the guarantor faces
financial distress. Therefore, the final rule requires that the
guarantor set up a standby trust. In addition, the final rule provides
that the Commission has the right to change the trustee of the trust.
That power is necessary to assure that the trustee will faithfully
execute its duties. Finally, to assure that the trust agreement is
adequate, the final rule specifies that an acceptable trust is one that
meets the regulatory requirements of the Commission.
N.4 Require Parent Company to Inform NRC of Financial Distress and
Submit to an Order
Because a parent company is not usually an NRC licensee subject to
the NRC's authority, 10 CFR part 30, Appendix A, Section III.E
(published as
[[Page 35524]]
10 CFR part 30, Appendix A, Section III.F in the proposed rule) is
added to specify that the parent company guarantee option must include
a contractual agreement by the parent company to submit to NRC payment
orders.
Before this final rule, the parent company had no requirement to
inform the NRC of financial distress that may adversely affect its
ability to meet its guarantee obligations. Because the NRC needs to
know if the parent guarantor is in financial distress to take steps to
protect the funds guaranteed for decommissioning, the final rule
requires the parent guarantor to notify the NRC in case of its
financial distress, and its plan to transfer the guaranteed amount to
the standby trust. In these situations, payments from the parent
company are immediately due and payable to the standby trust pursuant
to an acceleration clause, discussed in Section II.N.5 of this
document. A similar notification requirement is not necessary for a
licensee guarantor because NRC regulations under 10 CFR 30.34(h),
40.41(f), 70.32(a)(9), and 72.44(a)(6) already require licensees to
notify NRC of bankruptcy proceedings.
N.5 Require Guarantor Payment Immediately Due to Standby Trust
Before this final rule, the regulations did not address the
possibility that the guarantor of the parent guarantee or self-
guarantee may be in financial distress when it is required to provide
alternate financial assurance. When decommissioning is not being
conducted at the time of an insolvency proceeding, creditors could
argue that the debtor owes performance of decommissioning in the
future, not money at the present time. That argument could potentially
support a finding that no payment is owed to the standby trust. In that
event, a division of assets to satisfy creditors' claims may not
adequately protect resources needed to fund decommissioning. To provide
a money claim on the assets of the guarantor that would cover the cost
of decommissioning at the time of a division of assets, the final rule
authorizes the Commission to make the amount guaranteed immediately due
and payable to the standby trust (i.e., an acceleration clause).
N.6 Allow Intangible Assets, With an Investment Grade Bond, To Meet
Some Financial Tests
The NRC regulations allow guarantees to be used as financial
assurance for decommissioning by companies whose financial statements
demonstrate a low risk of default for corporate obligations. A set of
financial tests are prescribed in 10 CFR part 30, Appendices A, C, D,
and E for companies who may qualify to use the guarantee methods.
Licensees who desire to use the parent company guarantee or self-
guarantee as a financial assurance option must pass the tests on an
annual basis. Some of the financial tests in 10 CFR part 30, Appendices
A, C, and E involve bond valuations. In the past, only tangible assets
were considered within the calculations performed under the financial
tests. In response to an inquiry during the public stakeholder meeting
on January 10, 2007, the NRC staff considered whether allowing the use
of intangible assets would materially increase the risk of a shortfall
in decommissioning funds. The NRC concluded that if a licensee can meet
a minimum tangible net worth requirement, then allowing that licensee
to use intangible assets to meet a total net worth requirement beyond
the minimum tangible net worth amount, in conjunction with certain bond
valuations of the guarantor, would not materially decrease the ability
of the licensee to provide assurance that it will have the requisite
decommissioning funding.
Although the use of a company's bond rating remains a joint
criterion with the use of intangible assets in some of the financial
tests, the NRC is making other changes so that licensees that pass the
tests will have an increased likelihood of providing financial
assurance. Recent data suggests that regulators should not rely on a
bond rating by itself to provide financial assurance, as discussed in
paragraph N.7 of this section. However, an investment grade bond rating
coupled with a minimum amount of tangible net worth does provide an
additional level of assurance. In a 1982 revised interim final rule,
the EPA provided several reasons for accepting a minimum tangible net
worth requirement, which are discussed in Paragraph N.7 of this
section. Once these other components of the financial tests are met,
licensees can use intangible assets for a total net worth requirement
beyond the minimum tangible net worth requirement. Because bond rating
agencies include intangible assets in their evaluation of the financial
stability of a company's bonds, these companies are already given
credit for their intangible assets in the bond rating component of the
test. The minimum tangible net worth component prevents the NRC from
relying too heavily on intangible assets. To further assure the
efficacy of a company's current bond rating, amendments in the final
rule specify that the bond must be uninsured, uncollateralized, and
unencumbered to be used in the financial test. Moreover, the value of
the nuclear facilities, both as tangible and intangible assets, is
excluded from the calculation of net worth, because those assets would
not be available to produce funds for decommissioning after the
facility is shut down. The staff concluded that permitting the use of
intangible assets after the minimum tangible net worth requirement is
met, in conjunction with an investment grade bond rating, would not
materially decrease the ability of the licensee to provide assurance
that it will have adequate decommissioning funding.
With the financial tests required by 10 CFR part 30, Appendices A,
C, and E, the NRC has a greater level of assurance that these companies
will not default on their decommissioning obligations. In addition, the
guarantee methods require annual re-passage of the test. Because a
company that satisfies the minimum tangible net worth criterion and has
an investment grade bond rating is less likely to default in a one-year
period, the annual re-passage requirement will normally provide
adequate time for the guarantor to obtain alternative financial
assurance. In rare cases in which a default may occur in a short time,
the acceleration clause, discussed in paragraphs N.4 and N.5 of this
section, will provide a method to obtain funds in situations of
financial distress.
Therefore, after the minimum tangible net worth requirement is met,
this final rule will allow the use of intangible assets, in conjunction
with an investment grade bond rating, to meet specified criteria in the
financial tests for parent company and self-guarantees.
N.7 Increase the Minimum Tangible Net Worth for the Guarantees'
Financial Tests
Before this final rule, the financial tests in Appendices A and D
to 10 CFR part 30 each require the entity seeking to pass the relevant
financial test to have a tangible net worth of at least $10 million.
The financial test in the current Appendix C to 10 CFR part 30 requires
the applicant or licensee to have a tangible net worth at least 10
times the current DCE or certification amount for decommissioning. The
final rule amendments require a tangible net worth of at least $21
million in each of the financial tests in Appendices A, C, and D to 10
CFR part 30.
The $10 million in tangible net worth requirement was first adopted
by the EPA in 1981, and the financial test adopted by the NRC in 1988
used the same criterion. The NRC believes that the criterion should be
adjusted to
[[Page 35525]]
represent the value in current dollars of $10 million in 1981. For the
proposed rule, the NRC calculated a new tangible net worth amount using
the 2005 Implicit Price Deflator for Gross Domestic Product published
by the U.S. Department of Commerce in its Survey of Current business,
and the equivalent Implicit Price Deflator for 1981, to arrive at a
value of $19 million to represent the $10 million value (1981 dollars)
in 2005 dollars. The NRC agrees with a comment submitted on the
proposed rule to escalate the 1981 dollars to 2007 dollars. This
calculation, rounded up in units of one million dollars, equals $21
million.
The final rule adds a requirement in Section II.A.(1) of Appendix C
to 10 CFR part 30 for applicants or licensees to have a tangible net
worth of at least $21 million. Before this final rule, that component
of the financial test for self-guarantee specified only that the
applicant or licensee must have a tangible net worth at least 10 times
the current DCE or certification amount. The additional requirement has
been added as recent events indicate that the existing requirement in
Section II.A.(3) of Appendix C--that the applicant or licensee must
have a current rating for its most recent bond issuance of AAA, AA, or
A as issued by Standard & Poor's (S&P), or Aaa, Aa, or A as issued by
Moody's --may not be adequate. The NRC has historically relied on the
bond rating component to provide greater assurance that a company with
a qualifying rating will be less likely to fall into bankruptcy within
a one year time period; hence, the regulations require a licensee to
repeat passage of the financial test on an annual basis. Recent trends
suggest that a bond rating may not provide the additional assurance
that the NRC is seeking. For example, companies that provide bond
ratings may be reluctant to downgrade, because a downgrade can have
such an adverse effect on a rated sovereign or corporate issuer that it
can destabilize the issuer or the market for its securities (e.g., AIG)
(Katz, J., Salinas, E., & Stephanou, C., ``Credit Rating Agencies: No
Easy Regulatory Solution,'' Crisis Response: Public Policy for the
Private Sector, Note Number 8, 4-5 (October 2009), http://rru.worldbank.org/documents/CrisisResponse/Note8.pdf). Credit ratings
can also be slow indicators of an entities' financial health (e.g.,
Enron, Worldcom, Parmalat, Lehman Brothers) (Katz; O'Brien, B., ``Fitch
Fells Berkshire's Credit Rating,'' Barron's (March 13, 2009), http://blogs.barrons.com/stockstowatchtoday/2009/03/13/fitch-fells-berkshires-credit-rating/).
Because recent events and trends cause the NRC to question the
adequacy of the bond rating requirement to provide financial assurance,
the NRC concludes that the bond rating requirement in appendix C to 10
CFR part 30 should be coupled with another requirement. The NRC
determined that the tangible net worth requirement found in appendix A
and appendix D to 10 CFR part 30 is an adequate accompaniment. The
basis of this finding is rooted in a 1982 EPA revised interim final
rule (47 FR 15032; April 7, 1982), which provided several reasons for
choosing $10 million in tangible net worth in 1982 dollars as a
financial test. The EPA recognized that the business failure rate for
firms with $10 million (1982 dollars) or more in net worth was
significantly lower than for firms overall. (47 FR 15035; April 7,
1982). Because firms with $10 million or more in net worth were more
stable than companies with less net worth, these larger firms were less
likely to abandon facilities or otherwise avoid closure or post-closure
responsibilities. (47 FR 15035; April 7, 1982). EPA ``furthermore
believes that retaining the $10 million requirement will keep the
burden of administering this new financial assurance mechanism at
manageable levels; monitoring the use of the financial test by less
stable firms can be expected to be more time-consuming and a greater
administrative burden.'' (47 15035; April 7, 1982). Because ``[a]ssets
of firms often include intangibles such as goodwill, patents, and
trademarks which may be difficult to convert into cash to pay for
closure or post-closure costs,'' the EPA concluded that only tangible
net worth could be used to meet its net worth requirements. (47 FR
15035; April 7, 1982).
The data suggests that a high bond rating by itself does not
necessarily signal financial strength. Also, the risk of a shortfall is
expected to be lower for licensees that pass these qualifying tests
than for licensees that do not. Therefore, the NRC has determined that
licensees that can satisfy the $21 million tangible net worth minimum,
together with the other financial tests, will have an increased
likelihood of providing reasonable assurance that the necessary
decommissioning funding will be available when it is needed.
N.8 Clarify Guarantees' Bond Ratings and Annual Demonstration
Submittals
The final rule amendments specify that the current rating of the
most recent bond issuance of AAA, AA, or A by Standard and Poor's could
include adjustments of + or - (i.e., AAA+, AA+, or A+ and AAA-, AA-,
and A- would meet the criterion) and the current rating of Aaa, Aa, or
A by Moody's could include adjustments of 1, 2, or 3.
Standard and Poor's and Moody's have introduced the plus or minus
and numerical adjustments to refine the precision of their ratings. As
a result, licensees have been uncertain whether a rating that includes
these adjustments, and in particular ratings that might be considered
below the unadjusted ratings specified in the appendices (e.g., A-)
could be used. Based on the minimal difference in default rate
associated with the qualifiers, the final rule states that all the
bonds within a specified rating level meet the regulatory standard.
In addition, the final rule amends Section II.A.(2)(i) of Appendix
A to 10 CFR part 30 and Section II.A.(3) of Appendix C to 10 CFR part
30 to require the bond to be the most recent ``uninsured,
uncollateralized, and unencumbered'' bond issuance. This amendment
makes the bond criterion in Appendix A to 10 CFR part 30 and Appendix C
to 10 CFR part 30 consistent with the bond criterion in Appendix E to
10 CFR part 30. As explained in NUREG/CR-6514, when a rated bond has
insurance or pledged assets to provide additional security, the bond
rating may not directly reflect the creditworthiness of the bond
issuer. Therefore, the final rule adds the requirement that the bond
rating used to pass the financial test must be uninsured,
uncollateralized, and unencumbered.
The final rule makes a conforming change in Section III.E. of
Appendix E to 10 CFR part 30 to provide that if, at any time, the
licensee's most recent bond issuance ceases to be rated in any category
of ``A-'' and above by Standard and Poor's or in any category of ``A3''
and above by Moody's, the licensee no longer meets the requirements of
the financial test.
The final rule amendments to the bond rating criterion in
Appendices A and C to 10 CFR part 30 are intended to clarify the intent
of the rule, eliminate an unintended apparent inconsistency among the
different financial tests that may be used, and to make administration
of the financial assurance requirements more efficient by eliminating
recurring questions.
The final rule requires a certified public accountant to verify
that a bond rating, if used to demonstrate passage of the financial
test, meets the requirements. Some financial tests
[[Page 35526]]
received by the NRC did not apply the requirement correctly. Requiring
an audit of the bond rating will minimize the potential that an error
is made in verification of the bond rating.
Before this final rule, the regulations required the licensee to
repeat passage of the financial test each year, but the regulations did
not explicitly state that the licensee must annually submit
documentation to the NRC to verify its passage of the test. However,
the parent company and self-guarantee agreements illustrated in
regulatory guidance include a provision that the licensee will annually
submit to the NRC revised financial statements, financial test data,
and an auditor's special report. Submittal of the documents permits the
NRC to verify the licensee's continuing eligibility to use the parent
company guarantee without incurring the expense of an onsite
inspection. Therefore, the final rule codifies the regulatory guidance
to require annual submittal of documentation that the guarantor passed
the financial test.
Before this final rule, the regulations were unclear about whether
the parent company guarantee and financial test are to remain in effect
until the license is terminated. The final rule clarifies that the
NRC's written acceptance of an alternate financial assurance by the
parent company or licensee allows the guarantee and financial test to
lapse.
N.9 Invalidate the Use of Certification for Financial Assurance if
There Is Contamination
This final rule amends regulations to add new requirements related
to decommissioning financial assurance as applied to certifications.
The changes affect Sec. Sec. 30.35(c)(6), 40.36(c)(5), and
70.25(c)(5).
Before this final rule, the regulations prescribed specific amounts
of financial assurance for licensees that are authorized to possess
relatively small amounts of radioactive material. Licensees authorized
to possess radioactive materials in higher amounts must submit a DFP,
which includes a site-specific cost estimate for decommissioning. The
site-specific cost estimate is almost always higher than the prescribed
certification amounts.
This final rule requires licensees who qualify to use the
certification amounts to submit a DFP in the event that survey results
detect significant residual radioactivity within the site boundary,
including the subsurface. A significant amount would be residual
radioactivity that would, if left uncorrected, prevent the site from
meeting the criteria for unrestricted use. Remediating subsurface
contamination can be very expensive. However, licensees that qualify to
use the certification amounts have no regulatory requirement to
increase the amount of financial assurance to cover subsurface
remediation costs. In the event subsurface contamination occurs at such
a site, this final rule provides the regulatory basis to require these
licensees to cover the full cost, not just the certification amount.
N.10 Other Changes to Financial Assurance Regulations
This final rule eliminates the line of credit option from 10 CFR
30.35(f), 40.36(e), 50.75(e)(1)(iii)(A), 70.25(f), and 72.30(e) from
the list of surety, insurance, or other guarantee methods that may be
used to provide financial assurance for decommissioning. Although the
line of credit was initially authorized for use to provide an
alternative to licensees that elected not to use a surety or letter of
credit, the NRC recognized that it posed a greater risk than the other
two surety methods, because it might be subject to underlying loan
covenants that could make it more vulnerable to cancellation if the
licensee experienced financial difficulties. However, since 1988, no
NRC licensees have elected to use a line of credit to provide financial
assurance for decommissioning. Because of its greater risk of
cancellation and its non-use by licensees, the NRC has decided to
eliminate the line of credit as an alternative for providing financial
assurance for decommissioning.
The final rule excludes, in the financial tests for the parent
guarantee and self-guarantee, the net book value of the nuclear
facility and site from the calculation of tangible net worth. Before
this final rule, the regulations required that the calculation of
tangible net worth must exclude the book value of the ``nuclear
units.'' That requirement leads to confusion, because some interpreted
it to apply to nuclear reactor units and not other kinds of nuclear
facilities. However, other kinds of nuclear facilities should be
excluded from the tangible net worth calculation, because they are
unlikely to provide funds for decommissioning. The existing rule does
not specify whether the nuclear site, as distinguished from the
facility, may be included in the calculation of tangible net worth. The
value of the site is likely to depend on the probability that the
decommissioning will be completed, and is subject to some degree of
uncertainty. Therefore, the calculation of tangible net worth has been
changed to exclude the net book value of the nuclear facility and site.
The final rule requires a certified public accountant to include an
evaluation of off-balance sheet transactions, for the parent guarantee
and self-guarantee. Generally accepted accounting principles (GAAP)
permit certain kinds of transactions to be accounted for off the
company's balance sheet. Many companies, as a means of managing risk
and/or taking advantage of legitimate tax minimization opportunities,
create off-balance-sheet transactions. It is important to understand
the nature and the reason for each off-balance-sheet item and ensure
that any such relationships are adequately disclosed. (Off-Balance
Sheet Arrangements and Other Disclosures, American Institute of
Certified Public Accountants, http://www.aicpa.org/ForThePublic/AuditCommitteeEffectiveness/AuditCommitteeBrief/DownloadableDocuments/Off%20Balance%20Sheet%20Arrangements.pdf, last visited May 9, 2011).
The volume and risk of the off-balance-sheet activities need to be
considered (Risk Management Manual of Examination Policies, Federal
Deposit Insurance Corporation, http://www.fdic.gov/regulations/safety/manual/section3-8.pdf, last visited December 20, 2010). Before this
final rule, the regulations did not require the independent certified
public accountant's special report to examine off-balance sheet
transactions. However, these transactions have the potential to
materially affect the guarantor's ability to fund decommissioning
obligations. Therefore, the final rule requires the auditor to include
an evaluation of off-balance sheet transactions.
O. Will some licensees who currently do not have financial assurance
need to get financial assurance?
No. Licensees who are not required to provide financial assurance
for decommissioning will not have to obtain financial assurance as a
result of amendments in this final rule.
The decommissioning planning and financial assurance amendments in
this final rule only apply to licensees who are or will be subject to
the decommissioning financial assurance requirements under 10 CFR
30.35, 40.36, 50.75, 70.25, and 72.30.
All operating power reactor licensees are required to have
financial assurance, consistent with 10 CFR 50.75(c), and all licensees
with an independent spent fuel storage installation (ISFSI) regulated
under 10 CFR part 72 must have financial assurance for decommissioning
in accordance with 10 CFR 72.30(c).
[[Page 35527]]
P. What changes are being made with respect to materials facilities'
decommissioning funding plan (DFP) and DCE?
This final rule requires certain licensees under 10 CFR part 72 to
adjust their DCEs within 3 years of the previous DCE. This was done by
final rule on October 3, 2003 (68 FR 57327) for licensees under 10 CFR
parts 30, 40, and 70. This provision in the final rule makes the timing
basis for DCE adjustments consistent among all materials facilities.
Regarding DFPs, Sec. Sec. 30.35(e), 40.36(d), 70.25(e), and
72.30(b) are amended to require additional information from licensees.
The NRC's experience indicates that underestimation of decommissioning
costs can occur when the licensee assumes it will qualify for a
restricted site release by meeting all of the 10 CFR 20.1403
requirements. If it turns out that these requirements cannot be met,
and that an unrestricted site release under 10 CFR 20.1402 will be
required, the licensee may not have the ability to fund a potentially
more expensive cleanup. For example, if instead of leaving large
volumes of slightly contaminated soil onsite in a restricted release
decommissioning, the licensee must ship this material offsite for
disposal to support an unrestricted site release, then the
decommissioning will typically be much more expensive due to high
offsite disposal costs. Therefore, the final rule requires the licensee
to estimate and cover the costs to decommission the facility to meet
unrestricted use criteria. The option of meeting the 10 CFR 20.1403
restricted release requirements will be available, but the licensee
would have to demonstrate that it can meet those criteria before a cost
estimate based on that assumption would be acceptable.
In addition, certain operational events can increase
decommissioning costs above the original estimate. These events include
spills, increases in onsite waste inventory, increases in waste
disposal costs, facility modifications, changes in authorized
possession limits, actual remediation costs that exceed the initial
cost estimate, onsite disposal, and use of settling ponds. The final
rule amends 10 CFR 30.35(e)(2), 40.36(d)(2), 70.25(e)(2), and 72.30(b)
to require the 3-year update of the DFP to consider these events for
the effect, if any, they may have on the estimated cost of
decommissioning. Subsurface contamination can be very expensive to
remediate. The new regulations require the licensee to estimate the
volume of contaminated subsurface material that would require
remediation, and provide financial assurance for the estimated cost of
remediation. Early consideration and funding arrangements to cover
increased costs will improve decommissioning planning and increase the
likelihood that funds will be available when needed for site
decommissioning.
Existing regulatory guidance identifies recommended methods for
arriving at DCEs. The NRC is codifying some of these recommended
methods in this final rule. To assure that funds will be adequate to
complete decommissioning in the event the licensee is unable to do so,
cost estimates are required to include contractor overhead and profit.
An adequate contingency factor is necessary to cover unanticipated
costs that can arise after the decommissioning project begins. The key
assumptions underlying the cost estimate would have to be identified to
aid the staff in evaluating the adequacy of the estimate. Codification
of these recommendations will improve the quality of DFP submittals,
facilitate the staff's review of these submittals, and result in
regulatory efficiencies.
The NRC is aware of the records important for decommissioning
reporting requirements that licensees have under Sec. Sec.
30.36(g)(1), 40.36(f)(1), 50.75(g)(1), 70.25(g)(1), and 72.30(d)(1).
The additional reporting requirements in this final rule are designed
to foster a better understanding of the impact the spill or
contaminating event has on the DCE.
Q. What changes are being made with respect to license transfer
regulations for materials licensees?
This final rule makes a set of parallel changes to Sec. Sec.
30.34(b)(2), 40.46(a)(2), and 70.36(a)(2). These changes codify NRC
regulatory guidance to require the licensee to do the following: (1)
Provide information on the proposed transferee's technical and
financial qualifications, and (2) to provide decommissioning financial
assurance as a condition for approval of the transfer if the licensee
is required to have financial assurance. The information and financial
assurance are necessary to evaluate the adequacy of the proposed
transferee. Placing these provisions in the regulation, rather than
keeping them in regulatory guidance, will improve regulatory efficiency
by improving the quality of license transfer requests. It also will
ensure that a prospective license transferee provides to the NRC the
information necessary to determine that public health and safety are
not compromised by the transfer and that the radiation safety aspects
of the program are not degraded.
R. What changes are being made with respect to permanently shutdown
reactor decommissioning fund status and spent fuel management plan
reporting?
The final rule amends Sec. 50.82(a)(4)(i) and adds three new
provisions to Sec. 50.82(a)(8) in Paragraphs (a)(8)(v) through
(a)(8)(vii). The revised Sec. 50.82(a)(4)(i) requires that the PSDAR
include, if applicable, a cost estimate for managing irradiated fuel,
pursuant to Sec. 50.54(bb). Before this final rule, the PSDAR was
required to include a description of the planned decommissioning
activities, a schedule for their accomplishment, and an estimate of
expected costs.
The amendments to Sec. 50.82(a)(8) require each power reactor
licensee undergoing decommissioning to submit, in the form of an annual
financial assurance status report, information (specified further in
this section) regarding its decommissioning funds. Currently, under
Sec. 50.75(f)(1), the information reported to the NRC by power reactor
licensees is focused on collection of funds before permanent shutdown
and does not require information on the actual funds spent. To assess
the adequacy of power reactor decommissioning funding after permanent
shutdown, the NRC needs to know the actual costs being incurred at
decommissioned facilities. To obtain this information, the annual
report is now required to include, among other things, the amount spent
on decommissioning over the previous calendar year, the remaining
balance of any decommissioning funds, and an estimate of the costs to
complete decommissioning. If the annual report reveals a projected
funding shortfall, additional financial assurance to cover the cost to
complete decommissioning must be provided. These changes will improve
NRC oversight of decommissioning planning and increase the likelihood
that funds for decommissioning will be available when needed.
Under new Sec. 50.82(a)(8)(vii), the annual financial assurance
status report must also include the status of funds to manage
irradiated fuel. Due to the cessation of operating revenues, spent fuel
management and related funding are a concern after the reactor is
permanently shut down. Therefore, the final rule requires the
following: (1) That the amount of funds accumulated to cover the cost
of managing the spent fuel be specified; (2) that an estimate of the
projected costs of spent fuel management, until the Department of
Energy takes title to the spent fuel, be
[[Page 35528]]
provided; and (3) that a plan to obtain additional funds if the
accumulated funds do not cover the projected cost be identified. These
changes will increase the likelihood that funds for spent fuel
management will be available when needed.
S. When do these actions become effective?
The effective date of the Decommissioning Planning final rule is
eighteen months after publication of the final rule in the Federal
Register. The NRC considers this an adequate time for licensees to
implement the requirements in the final rule. The 18-month period will
provide licensees sufficient time if there is a need on their part to
review their current methods for radiological surveys and monitoring in
relation to new 10 CFR 20.1406(c) and modified 10 CFR 20.1501(a) and
(b). Also, the 18-month implementation period will accommodate the time
needed to prepare and publish a final version of DG-4014. The DG-4014
contains changes made as a result of public comments received on the
draft guidance released with the Decommissioning Planning proposed
rule. The NRC considered revising Regulatory Guide 4.21, ``Minimization
of Contamination and Radioactive Waste Generation: Life-Cycle
Planning,'' dated June 2008, but considered this inappropriate because
Regulatory Guide 4.21 applies only to certain licensees who submitted
their initial license application after August 20, 1997. The DG-4014
applies to licensees who submitted their initial license application on
or before August 20, 1997, and who were not required to consider in the
early planning stages of the facility specific design features for
contaminant management. Additionally, the 18-month implementation
period will provide sufficient time to licensees who need to--(1)
Switch out of their escrow account into a different financial assurance
mechanism; (2) examine their continued use of a parent guarantee or
self-guarantee as decommissioning financial assurance; or (3) prepare
more detailed information in their DCE or surety supporting their DFP.
Power reactor licensees who are in a shutdown status will need to
submit a report on the status of funding for managing irradiated fuel
by March 31, 2013.
T. Has NRC prepared a cost-benefit analysis of the final rule?
Yes, the NRC staff prepared a draft regulatory analysis for the
proposed rule. Public comments were received on the draft regulatory
analysis and are discussed in Section III.D of this document. The
regulatory analysis was revised for this final rule. Single copies of
the regulatory analysis are available as discussed in Section X of this
document.
The implementation of the final rule by industry, NRC, and
Agreement States was analyzed to cost about $43 million (2007$) over a
15-year analysis period at a 3 percent discount rate. NRC licensee
costs are about $6 million, and NRC costs are about $3 million.
Agreement State licensee costs are about $22 million, and Agreement
State costs are about $12 million. Two alternatives were considered,
each with estimated total costs that were higher than implementation of
this final rule. The primary benefits of the final rule are due to
reduction in the number of legacy sites and higher reliability of
obtaining sufficient funds pledged for decommissioning financial
assurance to complete the decommissioning work through license
termination.
U. Has NRC evaluated the additional paperwork burden to licensees?
This final rule contains new or amended information collection
requirements that are subject to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.). The NRC staff has estimated the impact this
final rule will have on reporting and recordkeeping requirements of NRC
and Agreement State licensees. More information on this subject is in
Sections III.J and IX of this document.
III. Summary and Analysis of Public Comments on the Proposed Rule
The proposed rule on Decommissioning Planning was published on
January 22, 2008 (73 FR 3812), for a 75-day public comment period. The
NEI and several other stakeholders requested an extension of 90 days to
provide review of issues raised in the proposed rule. The NRC extended
the comment period by 30 days, until May 8, 2008 (73 FR 14946). The NRC
received 35 comment letters on the proposed rule. Commenters on the
proposed rule included states, licensees, industry organizations,
environmental advocacy organizations, and one individual.
The comments and responses have been grouped into 11 areas. The NRC
specifically sought comments on the first five areas: (A) The use of
fee incentives to induce licensees to characterize subsurface residual
radioactivity while their facility is operating; (B) licensees' use of
a secure Web site to submit and update decommissioning reporting and
financial assurance requirements; (C) the extent of proprietary data in
the details submitted under new requirements in 10 CFR 50.82(a)(4)(i)
and 50.82(a)(8)(v); (D) the accuracy of input assumptions and
methodology in the regulatory analysis and environmental assessment;
and (E) information regarding significant amounts of radium-226 at
sites that could be considered legacy sites in the regulatory analysis.
The other comment areas are: (F) backfit considerations; (G) need for
10 CFR 20.1403, 20.1406 and 20.1501 amendments; (H) financial assurance
mechanisms and reporting; (I) draft regulatory guidance, (J) OMB
Supporting Statement; and (K) Agreement State compatibility table. To
the extent possible, all of the comments on a particular subject are
grouped together. A discussion of the comments and the NRC staff's
responses follow.
A. Fee Incentives
Comment: In the proposed rule, the NRC specifically invited comment
on whether fee incentives, as permitted in 10 CFR 171.11(b), would be
effective as a means to induce licensees to perform site
characterization work during operations instead of waiting until the
facility is shut down.
Six commenters responded to this topic, and all argued against the
adoption of fee incentives. Some said the concept had not been clearly
explained. Several commenters argued that any incentive should not
reduce financial assurance amounts. Some thought that incentives would
have the effect of transferring the financial burden of meeting the
proposed requirements from licensees who have subsurface residual
radioactivity to those who do not. Monitoring of environmental impacts
during operations, one said, is an essential part of doing business
that should not require incentives. Three commenters thought that the
exemption of annual fees as a ``fee incentive'' to conduct monitoring
during facility operations would be contrary to Congress' requirement
that the NRC collect user fees and would not fit into the narrow range
of exemptions contemplated in 10 CFR 171.11. One commenter said that
the NRC should not give a blanket exemption to all power reactor
licensees under 10 CFR part 171 by characterizing it as a ``fee
incentive'' for complying with a proposed regulation or a volunteer
monitoring program.
Response: The Commission agrees with the commenters that no fee
incentives should be provided as part of this final rule. For any
subsurface monitoring and modeling activities that may be required as a
result of this final
[[Page 35529]]
rule, licensees should fund such activities as an operating and
maintenance expense to help achieve occupational and public doses that
are ALARA.
B. Secure Web Site
Comment: The NRC specifically invited comment on licensees' use of
a secure Web site to submit and update the following: (1)
Decommissioning reporting requirements, and (2) information submitted
to support passing the financial tests in the parent guarantee and
self-guarantee. The NRC received input on this issue from two states
and the Conference of Radiation Control Program Directors, Inc.
(CRCPD). The commenters were not clear on the implementation of the Web
site because this topic was not discussed in the proposed rule. One
commenter supported the concept of using a Web site but questioned
whether states would have access to the information, whether
notifications would be sent electronically when information was
updated, and whether the Web site would be a data transfer tool or
would also contain algorithms for decision logic. One of the state
commenters supported the concept only if the information would be
publicly available.
Response: Public comments were solicited on this topic to provide
initial information regarding the scope of functions for a Web site to
allow materials licensees to submit, revise and update the following:
(1) Information in their DFP, (2) DCEs, (3) information in the
financial tests for the parent company guarantee and self-guarantees,
and (4) decommissioning power reactor annual financial assurance status
reports. For the licensees whose companies are publicly traded, there
appears to be no sensitive or proprietary data in the financial
information reported to support use of the parent guarantee and the
self-guarantee, as much of this information can be obtained in the
public domain. Licensees may request that information submitted to the
NRC be withheld from public disclosure in accordance with 10 CFR
2.390(b). The NRC thanks commenters for responding to this question and
will factor their comments into any plans to modernize the processing
of this information. Currently, there are no plans to develop such a
Web site.
C. Proprietary Data
Comment: NRC specifically invited comment on whether additional
details in new reporting requirements of licensees with a power reactor
in a shut down status would be considered proprietary to the licensees
reporting the information. These new reporting requirements are in 10
CFR 50.82(a)(4)(i) and 50.82(a)(8)(v). One commenter responded to this
question, stating that making more information available for public
review will facilitate better analysis of work scope and cost for
decommissioning planning.
Response: The NRC staff agrees with this comment. The information
required by the new reporting requirements can be conveyed by licensees
in their PSDAR and in their annual financial assurance status report,
with little additional burden. The PSDAR information is publicly
available. The annual financial assurance status report information
submitted to the NRC under revised 10 CFR 50.82(a)(8)(v) and (8)(vii)
will be publicly available, unless the licensee submitting the
information shows that the information should be withheld from public
disclosure in accordance with the regulations in 10 CFR 2.390(b).
D. Regulatory Analysis and the Environmental Assessment
The NRC specifically invited comment on the input assumptions,
methodology, and results of the draft regulatory analysis, including
the backfit analysis, and the environmental assessment. Comments were
received and are discussed below. Comments on the backfit analysis are
discussed in Section III.F of this document.
Comment D.1: The need to install new capital or modify procedures
is not expected.
Several commenters objected to the following statement made by the
NRC in the Executive Summary and again in Section 2 of the regulatory
analysis: ``It is not expected that (power reactor and uranium fuel
fabrication) licensees will need to install new capital or modify
existing operating procedures to satisfy the proposed amendments to 10
CFR 20.1406(c) and 20.1501.'' The commenters interpreted the statement
to mean that those licensees would never need to install new equipment
or modify procedures in order to comply with the new requirements.
Response: The previous statement was made in the context of
anticipated changes that licensees would need to make by the effective
date of the final rule, given information about onsite leaks and spills
known to the NRC when the proposed rule was published. Licensees must
be allowed time to perform scoping surveys and preliminary
characterization of site contamination to determine if their site
contains significant residual radioactivity. Based on the evaluation of
these surveys, additional monitoring and modeling may be required based
on site specific conditions. Page 41 of the draft regulatory analysis
released with the proposed rule states this position by the NRC: ``It
may be necessary for licensees at a time after the effective date of
the final rule to install additional monitoring equipment under some
circumstances. * * * The need for additional monitoring equipment would
be determined on a case-by-case basis by either licensee activities or
after NRC inspection activities.''
Comment D.2: Costs to uranium recovery licensees.
Several commenters stated that the regulatory analysis did not
properly analyze the costs to retrofit and upgrade uranium recovery
facilities.
Response: As discussed in the response to Comment G.14 below, the
NRC has concluded that a uranium recovery licensee's program that
complies with the 10 CFR part 40, Appendix A site remediation criteria
would not be impacted by the revised survey requirements in Sec.
20.1501(a), and such programs would not become more complex or
expensive as a result of this rulemaking. Thus, survey and monitoring
costs at uranium recovery facilities are not expected to change, and
there is no need to revise the regulatory analysis in this regard.
Comment D.3: 10 CFR part 20 changes could affect hundreds, and
costs are underestimated.
Several commenters argued that the proposed changes to 10 CFR part
20 and draft guidance for survey and monitoring could affect hundreds
of licensees, and that the costs of the regulation were underestimated
both for materials licensees and for power reactor licensees. One
commenter stated that the NRC has grossly underestimated the cost to
licensees of achieving compliance. One commenter believes that the
proposed regulations and draft guidance documents appear to leave no
options other than installation of a complicated subsurface monitoring
system to prove that a subsurface monitoring system is not needed. The
commenter stated that industry experience shows that these monitoring
systems can cost from $500,000 to well over $1,000,000. Another
commenter argued that the scope of the proposed rule and guidance is
far more extensive than warranted by the circumstances and is
inconsistent with the NRC's own finding that none of the instances of
inadvertent releases to the environment presented a threat to public
health and safety.
[[Page 35530]]
Response: Section II.B of this document discusses why very few
licensees will be affected by the changes being made to new 10 CFR
20.1406(c) and amended 20.1501. For those licensees who are affected by
the change in 10 CFR part 20 regulations, the revisions made to their
existing monitoring methods will be site-specific and may not require
the installation of a subsurface monitoring system. For example, if a
site contains significant residual radioactivity in the soil, the
monitoring plan likely will require only the specification of sampling
locations and sampling methodology. If the significant residual
radioactivity in the soil has migrated to a groundwater pathway, then a
groundwater monitoring plan will be required that is appropriate for
the affected site. As stated in the preamble to the proposed rule (73
FR 3821; January 22, 2008), the licensees of power reactors and fuel
cycle facilities already perform surveys to detect radioactive releases
to the groundwater or will be performing groundwater surveys by the
effective date of this final rule. It is likely that these surveys will
contain sufficient information to satisfy the final rule requirements
in new 10 CFR 20.1406(c) and amended 20.1501.
The NRC revised the regulatory analysis for this final rule to
include a one-time cost for 500 NRC licensees and 1,000 Agreement State
licensees to do the following: (1) Read the final rule changes in new
10 CFR 20.1406(c) and amended 20.1501 and DG-4014, and (2) to determine
if the licensees are affected by the final rule. The NRC assumed that
these licensees would need 90 minutes each to read the changes to 10
CFR part 20 and DG-4014. This increased the cost estimate in the
regulatory analysis by $270,000 for the preferred alternative but did
not affect the decision rationale that implementation of the final rule
is preferred compared to the other two alternatives.
Comment D.4: Impact of requirements on existing facilities.
One commenter stated that the proposed rule could significantly
affect the existing design of systems, monitoring, surveys, site
characterization, and recordkeeping that are performed to meet existing
regulations. The proposed rules could also ultimately affect the site
release alternatives available at decommissioning. One commenter argued
that for some licensees, such as research and test reactors, the
consequence would be to severely limit or entirely eliminate the
ability of these facilities to perform their mission of research and
education. Another commenter disagreed with the NRC staff's conclusion
that currently operating power reactor licensees' voluntary adherence
to the NEI GPI is sufficient to comply with the proposed amendments to
10 CFR 20.1406 and 20.1501. One commenter representing several States
disagreed with the NRC's statement that survey and monitoring
activities are already taking place, finding it unlikely that
groundwater or subsurface surveys have been an integral part of the
past radiation monitoring programs at facilities. The commenter also
disagreed that adequate current information exists on the spatial
bounds and concentrations of residual radioactivity at sites to enable
decisions to be made about which sites will require remediation.
Response: For the reasons discussed in the response to comment D.3,
and in Section II.B of this document, the NRC believes that very few
licensees will be affected by changes to new 10 CFR 20.1406(c) and
amended 20.1501 by the effective date of the final rule. After the
effective date, as modeled in the regulatory analysis, the NRC believes
licensees of a small number of materials facilities will need to
perform additional monitoring compared to their current practices
because of significant residual radioactivity at their sites. With
respect to information collected by power reactor licensees as part of
the NEI GPI, the NRC will begin to inspect the activities performed by
power reactor licensees compared to their public commitments in the
GPI. The NRC's Temporary Instruction 2515/173 (ML072950622) will be
used by inspectors to assess if licensees have completed the voluntary
industry GPI. The Temporary Instruction includes inspection of
licensees' Annual Reporting whereby the power reactor licensees will
have documented onsite groundwater sample results for each calendar
year in the Annual Radiological Environmental Operating Report (AREOR)
or the Annual Radiological Effluent Release Report (ARERR), as part of
their annual environmental and effluent reports. This information is
publicly available in ADAMS. The NRC agrees with the commenter
representing several States that groundwater or subsurface surveys are
not expected to be performed by materials licensees as an integral part
of their current radiation monitoring programs if there is no evidence
at the site of significant subsurface residual radioactivity. The 10
CFR part 20 changes in this final rule aim to improve licensee
understanding of spatial bounds and concentrations of significant
residual radioactivity at sites during active facility operations.
Comment D.5: Analysis of Voluntary Industry Actions.
One commenter, supported by two other commenters, stated that the
NRC did not properly assess the impact of the rule against current
regulatory requirements. In an apparent reference to the GPI, the
commenter stated that the proposed rule was being improperly analyzed
against a more stringent set of voluntary licensee actions. This
approach is said to have policy implications in that it could have a
chilling effect on licensees' willingness in the future to undertake
voluntary initiatives.
Response: The NRC disagrees with this comment. The NRC staff
evaluated the GPI consistent with the 2004 guidance in NUREG/BR-0058,
``Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory
Commission,'' Revision 4 (http://www.nrc.gov/reading-rm/doc-collections/nuregs/brochures/br0058). Section 4.3.1 of NUREG/BR-0058
describes an acceptable method to analyze voluntary industry
initiatives in estimating values and impacts. Values are benefits, and
impacts are costs. A 1999 staff requirements memorandum (``Treatment of
Voluntary Initiatives in Regulatory Analyses,'' (ML003752222)) had
directed the NRC staff to ensure that NUREG/BR-0058 was revised to
facilitate consistent and predictable treatment of voluntary
initiatives in regulatory analyses. In accordance with NUREG/BR-0058,
the regulatory analysis, in estimating values and impacts of the GPI,
considered two cases: Giving ``no credit'' for the voluntary GPI, and
giving ``full credit'' for the voluntary GPI.
In the regulatory analysis, a ``Baseline'' of No-Action was modeled
as Alternative 1. Alternative 2 was modeled as the preferred
Alternative, consistent with the amendments in this rulemaking.
Alternative 3 was the same as Alternative 2 but added a security
interest in collateral for licensees who use a parent guarantee or a
self guarantee. Table 5-1 in the regulatory analysis itemized the net
impacts of Alternatives 1, 2, and 3. The net impact over a 15-year
analysis period of Alternative 2 was $70 million less than Alternative
1, and the net impact of Alternative 2 was $260 million less than
Alternative 3. These results provided ``no credit'' for the voluntary
activities performed by power reactor licensees under the GPI.
Section 6 of the regulatory analysis provided a description of the
GPI, with Section 6.1 on page 42 identifying the incremental impact of
the voluntary GPI
[[Page 35531]]
based on cost assumptions in Appendix D of the regulatory analysis. No
comments were received during the proposed rule public comment period
regarding the NRC's cost estimates of the GPI. The NRC estimated the
costs of 10 CFR part 50 licensees to implement the GPI over the 15-year
analysis period to be about $105 million (2007$) at a 3 percent
discount rate. ``No credit'' was given for these activities, because
these costs are incurred regardless of the eventual promulgation of
this final rule. The GPI has different objectives than the amendments
in this final rule, and the voluntary activities by power reactor
licensees were undertaken before development of this rulemaking.
If, instead, ``full credit'' was given for the expected costs under
the GPI, the results for Alternative 2 would not change, because no
additional survey and monitoring activities were modeled in any of the
Alternatives for power reactors that are implementing the voluntary
GPI. Based upon the NRC's review of power reactor licensee reports and
information known to the NRC about current conditions at power reactor
sites, the NRC does not believe that any current power reactor licensee
has contamination at its site which exceeds the threshold in the final
rule that would require additional monitoring. Therefore, the
regulatory analysis did not identify any additional costs or benefits
associated with the final rule's survey and monitoring requirements as
applied to current power reactor licensees. Following promulgation of
this final rule, there may be an increase in survey and monitoring
activities at some power reactors and a decrease in activities at other
power reactors. The results for Alternative 2 in the regulatory
analysis show that early detection of significant subsurface
contamination through surveys and monitoring and appropriate response
by the licensee become the preferred approach when the regulatory
objective is to ensure the licensee and the NRC are aware of
contamination that may create conditions that would complicate
decommissioning, and possibly create a legacy site.
The NRC does not agree with the commenter that a ``chilling
effect'' on future voluntary industry initiatives will occur if the NRC
adopts the final survey requirements by rule. As discussed in the
regulatory analysis, the GPI was initiated by power reactor licensees
independent of this rulemaking. The industry operates in an environment
in which there are many factors other than the possibility of NRC
rulemaking that may influence the industry's decision to voluntarily
undertake action. The NRC does not believe it is reasonable to assume
that a rulemaking which overlaps an area of voluntary industry action
will inhibit future voluntary industry initiatives. Moreover, the NRC
believes that any possible disincentive to industry to undertake such
voluntary actions is removed by the NRC performing a regulatory
analysis using two different baselines to account for the industry's
voluntary actions, consistent with the guidance in NUREG/BR-0058.
Comment D.6: Cost of characterization.
Several commenters stated that the cost would be large to perform
site characterization, if required under the proposed rule in 10 CFR
20.1501(a). According to one cost estimate prepared for a 10 CFR part
40 facility, setting up the initial near-surface soil characterization
and installing the necessary monitoring equipment would cost between
$30,000 and $50,000 for a site with a relatively small footprint. This
cost would include obtaining the necessary samples and conducting the
associated laboratory work. Additionally, requiring maintenance and
ongoing monitoring would result in annual expenditures of approximately
$10,000/year. One commenter believed the NRC's estimate of the cost was
too low, and that therefore its cost-benefit analysis was flawed.
Response: The NRC's estimates of one-time monitoring equipment and
annual maintenance costs were almost identical to those cited
previously by the commenter. On page 54 of the regulatory analysis
released with the proposed rule, the one-time capital cost for a
groundwater monitoring system was estimated at $46,000, and the annual
cost for inspection, leak detection and groundwater monitoring was
estimated at $9,500 per year, for the few facilities that were analyzed
to need such monitoring. The actual scope of work that will be
performed by licensees as a result of amended 10 CFR 20.1501(a) in this
final rule covers a broad range of activities, with a broad range of
expected costs. This final rule requires radiological surveys,
reasonable under the circumstances (such as scoping surveys),
sufficient to understand the extent of significant residual
radioactivity, including the subsurface. This final rule does not add
any new requirements regarding extensive site characterization.
Comment D.7: Regulatory analysis examples cannot be generalized to
broad classes of licensees.
One commenter believes that the examples in the regulatory analysis
relate to unusual factual and financial circumstances which cannot be
generalized to broad classes of NRC licensees.
Response: The Commission disagrees with this statement. The legacy
sites modeled in the regulatory analysis were assumed to be rare earth
extraction facilities holding contaminated material in areas of 200
square meters at 0.6 meters depth. This is viewed as being an
acceptably conservative representation of a legacy site for purposes of
performing the regulatory analysis. Without effective regulation, the
technical and financial conditions that contributed to the creation of
legacy sites in the past could occur in the future at sites that are
licensed under 10 CFR parts 30, 40, 50, 70, and 72, especially those
with radioactive material possession limits high enough to require
decommissioning financial assurance.
Comment D.8: Environmental assessment.
One comment received on the environmental assessment agreed that
monitoring wells, if required at licensed sites, will result in small
environmental impacts. Another commenter, a state, disagreed strongly
with the finding in the proposed rule of no significant environmental
impact and stated that such a finding violates the National
Environmental Policy Act (NEPA). The commenter believes that the NRC
must perform additional environmental analyses, because the final rule
does not go far enough in requiring prompt remediation of spills and
leaks during facility operations, and that during any cleanup delays
contamination could spread, resulting in larger impacts on
environmental resources, nearby properties, and public health.
Response: The NRC agrees that the procedures necessary to detect
and monitor subsurface contamination will not have a significant
environmental impact. The initial licensee investigation may involve
only the review of records of past leaks and spills (if any) and
facility inspections to identify potential release points. Physical
sampling, if any, will take place within the boundaries of the site and
will involve small amounts of drilling and analysis. The wastes
generated from sampling and from laboratory analysis of the samples
will be managed according to existing environmental requirements that
have been designed to avoid impacts on the environment. The
environmental impacts of remediation, if it occurs, have already been
reviewed in connection with the LTR (62 FR 39057; July 21, 1997). In
that final rule, a generic Environmental Impact
[[Page 35532]]
Statement evaluated ``the environmental impacts associated with the
remediation of several types of NRC-licensed facilities to a range of
residual radioactivity levels'' (62 FR 39086; July 21, 1997).
The NRC does not agree that absent immediate remediation of all
subsurface contamination there will be a significant impact on the
environment; nor does the NRC agree that the environmental assessment's
finding of no significant impact is incorrect. This final rule allows a
licensee who detects subsurface contamination either to conduct
immediate remediation or to plan for and provide funds in the form of
financial assurance to conduct remediation at a later time, including
at the time of decommissioning. Thus, this final rule creates a
potential incentive for immediate remediation instead of an increased
financial assurance obligation. Whenever the remediation occurs,
however, the licensee is required to ensure that at the time of
decommissioning the annual 25 millirem license termination standard
will be met. This final rule does not change or weaken that
requirement.
E. Radium-226
Comment: The NRC invited comments regarding the description of
sites that are known to have significant amounts of radium-226
contamination from past practices or operations, and whether the
information of these sites could be included as legacy sites in the
regulatory analysis. Two comments were received on this topic. One
comment, from a state, provided limited information on the remediation
of radium contamination at two structures in the state. This commenter
also noted the difference between discrete radium sources that are
considered byproduct material and diffuse radium sources which are not
regulated by the NRC. A second comment, from an organization
representing states, noted that legacy sites exist where discrete
radium was manufactured and that these types of sites should be
included in the regulatory analysis, but no specific information was
provided for use in the regulatory analysis.
Response: The NRC appreciates the comments from states with
qualitative information about radium-226 contaminated sites. No changes
were made in the quantitative results of the regulatory analysis to
include costs and benefits from radium sites, but the analysis was
revised with the qualitative descriptions from these commenters.
F. Backfit Considerations
Comment F.1: Proposed rule and guidance will have substantial
impacts on facilities and procedures.
One commenter (NEI) stated that the proposed rule, coupled with the
survey and monitoring draft guidance, will have substantial impacts on
licensees' facilities and procedures (e.g., new confinement measures;
leak detection equipment; three-dimensional modeling of groundwater
contamination) and would require the preparation of a backfit analysis.
The commenter stated that the proposed rule would codify in the
regulations for power reactor licensees the actions which such
licensees have voluntarily agreed to perform under the GPI. The
commenter further stated that the new 10 CFR 20.1406(c) and amended 10
CFR 20.1501(a) and (b) are not a ``clarification'' of existing
requirements, but rather an effort to impose an expansive regulatory
scheme of ``ongoing decommissioning,'' whereby activities that would
normally take place at the time of decommissioning would have to occur
instead during plant or facility operation. The commenter also stated
that the NRC has made no demonstration that there is a substantial
increase in the protection of the public health and safety, or that the
proposed rule is justified to achieve compliance or ensure adequate
protection of the public health and safety, or that a redefinition of
the level of protection is necessary.
Response: While the commenter is correct that the findings
referenced were not made, these findings are not required here, because
the preparation of a backfit analysis of this rulemaking is not
required, as discussed further in this section.
The NRC disagrees that the new 10 CFR 20.1406(c) and amended 10 CFR
20.1501(a) and (b) will have substantial impacts on facilities and
procedures. As stated in the preamble of the proposed rule, these
proposed requirements ``specify that compliance with 10 CFR part 20
requirements is a necessary part of effectively planning for
decommissioning,'' and that any actions undertaken by licensees during
facility operations to comply with these new requirements would only
``provide a technical basis for licensees and the NRC to understand the
effects of significant residual radioactivity on decommissioning costs,
and to determine whether existing financial assurance provided for site
specific decommissioning is adequate'' (73FR 3814; January 22, 2008).
This final rule requires radiological surveys, reasonable under the
circumstances (such as scoping surveys), sufficient to understand the
extent of significant residual radioactivity, including the subsurface.
The term ``residual radioactivity'' includes radioactivity in soils and
groundwater, which should already be the focus of licensee survey and
monitoring efforts, and minimization efforts, to prevent the subsurface
accumulation of radioactive material that could be a potential
radiological hazard.
Whether significant residual radioactivity exists at a given site
is a complex site-specific issue, and the NRC received no information
during the proposed rule public comment period that any site now has
residual radioactivity at levels that would exceed the 10 CFR 20.1402
dose criteria at the time of facility decommissioning. For operating
facilities, significant residual radioactivity is a quantity of
radioactive material that would later require remediation during
decommissioning to meet the unrestricted use criteria of 10 CFR 20.1402
(73 FR 3835). For example, the sample data from isopleths of subsurface
contamination at Indian Point Energy Center (submitted by the State of
New York, in Exhibit A of its comment (ML081340325)) does not show that
significant levels of residual radioactivity are present there (2008
Indian Point Government to Government Meeting, May 9, 2008
(ML090540162)).
The commenter is correct that the NRC will expect licensees to
apply radiological screening values, or other methods recommended in
guidance, to determine if residual radioactivity at the site has
accumulated or is in groundwater at levels that are considered
significant. But to the extent that the commenter is relying on the
survey and monitoring draft guidance to support its backfit argument,
such reliance is misplaced. Guidance documents do not impose regulatory
requirements.
Moreover, it has never been a policy of the NRC that significant
subsurface contamination may go unmonitored, or that appropriate survey
information not be obtained regarding such contamination, just because
the contamination does not pose an immediate safety or health hazard.
The licensee must have such information to achieve doses that are ALARA
during the life cycle of the facility, including during
decommissioning. Licensee procedures to comply with the ALARA
requirement in 10 CFR 20.1101(b) should be in place at facilities where
there is a reasonable risk that such contamination may occur.
[[Page 35533]]
Regarding the issue of ``ongoing decommissioning,'' the NRC
disagrees that the regulations for this final rule contain such a
requirement. Licensees are not required through this final rule to
perform any new type of extensive characterization or timely
remediation during facility operations. Instead, in DG-4014, the NRC
has proposed for licensees--(1) An acceptable method to determine if
any changes are needed to existing site monitoring practices, and (2)
acceptable approaches to determine the cost-effectiveness of prompt,
compared to deferred, cleanup of contamination based on sample
analysis. The scope of cleanup activities during facility operations is
dependent on site-specific conditions. This final rule does not require
that any new remediation action be undertaken by a licensee during
operations. Remediation of residual radioactivity at the site may occur
during decommissioning, or it may occur during facility operations if
the licensee deems it beneficial to perform sooner rather than later.
If the decision is to remediate later, then a materials licensee must
consider the extent of contamination in its updated DFP.
The final rule does not codify the actions that power reactor
licensees are performing voluntarily under the GPI. New 10 CFR
20.1406(c) requires power reactor licensees to conduct their
operations, to the extent practical, to minimize the introduction of
residual radioactivity into the site, including the subsurface. The GPI
does not specify licensee activities to minimize contamination at the
site. Revised 10 CFR 20.1501(a) specifies that survey and monitoring
requirements must be performed of residual radioactivity in areas,
including the subsurface, that are potential radiological hazards. This
final rule identifies significant residual radioactivity at the site as
a potential radiological hazard. This specification of survey and
monitoring requirements is not part of the GPI.
Comment F.2: Immediate remediation.
Three commenters argued that immediate remediation should be
required after contamination is discovered. One commenter stated that
requiring licensees to immediately remediate the contamination
resulting from any unplanned or unauthorized release would protect the
environment and the public and reduce the likelihood that the NRC and
the Federal taxpayers would be saddled with the responsibility of
decontaminating a spreading plume of radionuclides at legacy sites
several years down the road. Another commenter urged the NRC to include
rules related to the establishment of reclamation milestones. The
commenter stated that the NRC in the past has allowed at least one
licensee to defer the cleanup of off-site tailings until the final
reclamation, even though it was perfectly feasible for the off-site
contamination to be cleaned up and placed on the tailings impoundment.
The result was that the cost from extensive offsite tailings cleanup
was not born by the licensee.
Response: The issue of whether immediate remediation should be
required after contamination is discovered is outside the scope of this
rulemaking. The focus of this rulemaking is on improving the
decommissioning planning process. This rule does not suggest that
immediate remediation is being imposed as a new requirement.
Slow, long-term leaks, particularly those that cause subsurface
soil and ground-water contamination, can significantly increase the
cost of decommissioning (73 FR 3814; January 22, 2008). Such leaks may
eventually produce radiological hazards (73 FR 3820). To adequately
assure that a decommissioning fund will cover the costs of
decommissioning, one must have a reasonably accurate estimate of the
extent to which residual radioactivity is present in the subsurface
soil and groundwater. Together, the proposed requirements in 10 CFR
20.1406(c) and 10 CFR 20.1501(a) specify that compliance with 10 CFR
part 20 requirements is a necessary part of effectively planning for
decommissioning (73 FR 3814). These regulatory changes are consistent
with existing requirements for operating facilities contained in 10 CFR
20.1101(b), requiring licensees to use procedures and engineering
controls to achieve doses to members of the public that are ALARA, both
during operations and during decommissioning. To accomplish this,
licensees must be able to demonstrate their knowledge of residual
radioactivity in the subsurface, including soil and groundwater
contamination, particularly if the subsurface contamination is a
significant amount that would require remediation during
decommissioning to meet the unrestricted use criteria of 10 CFR 20.1402
(73 FR 3815). While leaks from facilities can lead to a large volume of
radioactive contamination entering the subsurface environment over an
extended time, this does not necessarily mean that estimated doses from
this contamination are above the limits in 10 CFR part 20 that would
initiate immediate regulatory action (73 FR 3820).
Moreover, even if the comment pertained to issues within the scope
of this rulemaking, this final rule does not impose immediate
remediation as a regulatory requirement. The NRC's performance-based
regulatory framework provides licensees a measure of flexibility to
determine for themselves the appropriate response to a contaminating
radiological event that does not exceed a regulatory threshold and does
not result in a health or safety concern. By providing this discretion
to licensees instead of a prescriptive approach, the NRC is encouraging
licensees to focus on results and to implement methods that are
effective for them and will result in improved outcomes. The types of
contaminating events that are the focus of this final rule are not an
immediate radiological hazard, but over time they can accumulate in an
inaccessible area or migrate to groundwater pathways to form
significant residual radioactivity at the time of decommissioning.
Licensees are not now required to perform immediate remediation of low-
level contaminating events that do not exceed regulatory thresholds,
and licensees are not required through this final rule to perform any
new type of immediate remediation. If the licensee is aware of
significant subsurface contamination through surveys and decides to
defer cleanup of that contamination to some future date, then the NRC
must ensure that adequate funds are available at the time of
decommissioning in order to complete the work. During facility
operations, it is the responsibility of the NRC staff to ensure that
licensees have adequate decommissioning financial assurance based on
specific regulatory requirements, including in many cases site specific
DCEs. At the start of and during facility decommissioning, the NRC
staff is responsible for ensuring that the DCE is based on reasonable
project milestones to complete the activities within a timely schedule,
to monitor the progress of the licensee against the milestones, and to
require additional decommissioning financial assurance if the schedule
is extended.
Comment F.3: The expanded scope of new 10 CFR 20.1406(c).
Regarding the expanded scope of 10 CFR 20.1406 to include existing
licensees, several commenters argued that this expansion--(1) had not
been adequately analyzed for its impact; (2) was inconsistent with the
NRC's own finding in the Liquid Radioactive Release Lessons Learned
Task Force Final Report (ML062650312) that the releases were not a
threat to public health and safety, and (3) should be evaluated as a
backfit.
[[Page 35534]]
Response: The expanded scope of 10 CFR 20.1406 was evaluated in the
regulatory analysis for the proposed rule. Based on the technical basis
in Section 2 of the regulatory analysis, five operating sites with
licensed rare earth extraction activities were modeled to have residual
radioactivity at a level that would exceed the unrestricted release
criteria of 10 CFR 20.1402, at the time of their decommissioning. The
one-time costs and annual costs for these licensees were modeled over a
15-year analysis period, including groundwater monitoring, and licensee
inspection and leak detection activities at each facility (Regulatory
Analysis, September 2007, page 34, ML072390191). The comments offer no
specific criticisms of this analysis and thus do not call into question
the validity of its findings.
The regulatory analysis for the proposed rule and final rule
included discussion of the findings of the Liquid Radioactive Release
Lessons Learned Task Force Final Report. The regulatory analysis
summarizes the report as having ``identified a large volume of
subsurface and ground-water tritium contamination from power reactors
due to undetected leaks in spent fuel pools, component cooling water
tanks, condensate holding tanks, refueling water storage tanks, borated
water storage tanks, buried piping, and ventilation systems,'' as well
as having ``identified other radionuclides, including mixed fission
products, cobalt-60, cesium-137, and strontium-90, that were
inadvertently released into the onsite environment at two power
plants'' (Regulatory Analysis, September 2007, page 7, ML072390191).
The NRC agrees that one of the conclusions of the Liquid Radioactive
Release Lessons Learned Task Force Final Report was that the report did
not identify any instances of liquid radioactive release where the
health of the public was impacted. However, none of the sites examined
in the report are legacy sites. Based on NRC experience, chronic
radioactive release to the subsurface is a primary contributing cause
to the creation of a legacy site, and a legacy site is a potential
radiological hazard that may be a threat to public health and safety.
The final rule does not require evaluation of a backfit analysis,
because the new or amended regulations in the rule either clarify
existing requirements or require the collection and reporting of
information using existing equipment and procedures. As such, the new
or amended regulations are not regulatory actions that require the
performance of a backfit analysis.
Comment F.4: Agreement that a backfit analysis is not required.
One commenter agreed with the position taken by the NRC that a
backfit analysis is not required for this proposed rule, because the
requirement already exists for licensees to perform waste
characterization and minimization during operations.
Response: The NRC agrees that a backfit analysis is not required
for this proposed rule. But the NRC cannot respond further to the
comment, as it provides no citations to regulatory requirements
referenced in the comment.
G. Need for 10 CFR 20.1403, 20.1406, and 20.1501 Amendments
Comment G.1: Support for amended 10 CFR 20.1403.
Commenters from several States expressed support for the proposed
criteria in Sec. 20.1403 for license termination under restricted
conditions eliminating certain financial assurance methods. Noting that
since September 11, 2001, it has become more difficult for materials
licensees to get any form of surety, the commenters agreed that while
the NRC should be sensitive to this situation, certain financial
assurance methods may not be effective in bankruptcy situations.
Response. The NRC agrees that a trust fund is the financial
assurance mechanism most suitable for use over the relatively long
period required for license termination under restricted conditions.
The trust fund should be a less complicated financial instrument to
establish and fund decommissioning financial assurance compared to
other forms of surety which can be difficult for materials facilities
to maintain over long periods.
Comment G.2: Support for amended 10 CFR 20.1406 and 20.1501.
Several commenters supported the new 10 CFR part 20 regulations,
arguing that residual radioactivity is a problem that should be
addressed promptly. One commenter stated that as time passes, residual
radioactivity can spread vertically and laterally driven by downward
percolating rainfall and snow melt, increasing the volume of materials
requiring excavation. This commenter concluded that licensees should be
compelled to conduct thorough subsurface investigations of their sites
that include drilling, and should residual radioactivity be found,
licensees should be compelled to remediate or otherwise address it
promptly. Commenters from several States also support the proposed
requirements. One commenter stated that a lack of characterization of
subsurface residual radioactivity could lead to a need for additional
unforeseen decommissioning activities, and that the cost of removing
and disposing of residual radioactivity could overwhelm existing
decommissioning funds and lead to the site's becoming a legacy site.
Subsurface investigations should take place when it is known that
residual radioactivity exists, so that mitigating efforts can be put in
place, if necessary, before the situation worsens and revisions to the
decommissioning funding calculations can be made. The cost to enforce
and fully decommission a single legacy site is much higher than the
cost to prevent the occurrence of a legacy site through amended
regulations. A commenter representing several States generally
supported the proposed Sec. 20.1501 requirements, noting that slow and
long-lasting leaks, and leaks from the processing of large quantities
of licensed material, especially in liquid form, did pose particular
risks. Another commenter asserted that events in the last decade have
shown that the key assumptions behind the 1988 and 1998 decommissioning
regulations are no longer accurate, and that the NRC has become aware
of several unpermitted releases at sites across the country.
Response: The Commission agrees that licensees must have, at a
minimum, adequate information about the type and extent of significant
residual radioactivity that is present in the subsurface at their
facility. The licensees can then make informed decisions about whether
to undertake remediation immediately or to plan for remediation at the
time of decommissioning, while revising their DCE and decommissioning
financial assurance to ensure that they will be able to address
effectively the cleanup of the subsurface contamination.
Comment G.3: Support for monitoring and recordkeeping requirements.
One commenter stated that when any subsurface contamination above
background is identified, it should be noted in decommissioning
records, even if it is not otherwise reportable. This is because such
information can be very useful for conducting site characterization for
purposes of license termination and to support decisions on the extent
of site remediation necessary to meet unrestricted use criteria. It is
also useful when planning modifications to a facility. This stems from
the logic that if subsurface contamination exists, then it came from
some plant system that handles that material; therefore, any physical
activity on or near those systems should include provisions for dealing
with the source of contamination. One state commenter provided a
detailed description of a
[[Page 35535]]
situation it had encountered that supported the need for increased
monitoring. It stated further that recording recurring leaks or spills
in decommissioning records or operational logs is neither onerous nor
financially burdensome. Geographic Information Systems (GIS) make
documentation of tracking of spills a relatively easy task, and do not
pose a paperwork burden. Tracking of these data are critical for an
effective Historical Site Assessment under MARSSIM.
Response: The NRC agrees with these comments as they apply to
contamination that may be significant for site specific decommissioning
planning.
Comment G.4: Cost of required activities compared to potential
benefits.
Some commenters argued that the final rule survey and monitoring
requirements, particularly as they were interpreted in the draft survey
and monitoring guidance released with the proposed rule, would be a
tremendous potential financial burden to licensees with no health and
safety benefit to the public. Some commenters stated that sites already
have sufficient existing survey, monitoring and detection programs in
place to assure compliance with current licenses. In addition, the
extent of modeling of the hydrology that would be required to meet the
draft regulatory guidance does not appear to be warranted at sites that
do not have extensive subsurface contamination.
One commenter argued that the scope of the proposed rule and
guidance is far more extensive than what is warranted by the
circumstances, and that both the proposed rule and the guidance are
inconsistent with the NRC's own finding that none of the instances of
inadvertent releases to the environment presented a threat to public
health and safety.
Response: The commenter is correct that the NRC's conclusion in its
Liquid Radioactive Release Lessons Learned Task Force final report
dated September 1, 2006, which was focused on inadvertent and
unmonitored radioactive liquid releases from power reactors, was that
the measured levels of tritium and other radionuclides do not present a
health hazard to the public, and this finding was noted in the preamble
to the proposed rule (73 FR 3814; January 22, 2008). However, as also
noted in the preamble to the proposed rule (73 FR 3820), based on past
NRC experience, significant concentrations or quantities of undetected
and unmonitored contamination, caused primarily by subsurface migration
of groundwater, have been a major contributor to a site becoming a
legacy site. A legacy site is a potential radiological hazard and a
threat to public health and safety.
As discussed in Section II.B of this document, all power reactor
licensees and about 300 NRC and 1,000 Agreement State licensees have an
obligation to set aside funds for decommissioning financial assurance.
These licensees are subject to the amended regulations in 10 CFR part
20 and are already required to have radiation protection programs aimed
toward reducing exposure and minimizing waste at their sites (73 FR
3813). The NRC received no information during the proposed rule public
comment period that any operating facility now has subsurface residual
radioactivity at levels that would exceed the 10 CFR 20.1402 dose
criteria at the time of facility decommissioning. Thus, the NRC
believes there is no incremental burden for these licensees as a result
of final rule amendments to 10 CFR part 20, except to read and
understand the final rule and the survey and monitoring guidance.
If there is a history of subsurface spills at a site, to the extent
that a recurrence could result in significant residual radioactivity,
then the NRC expects appropriate licensee action to comply with the new
survey and monitoring requirements as appropriate for site-specific
conditions. The survey and monitoring requirements in 10 CFR part 20
are broad scope requirements that apply to many types of facilities and
thus cannot be specific to any one type of facility. Therefore, the
extent of compliance with new survey and monitoring requirements and
the level of licensee burden is very much a site-specific issue.
Comment G.5: Indian Point Nuclear Power Plant and Breazeale
Research Reactor.
The State of New York and Riverkeeper cited in their comments on
the proposed rule information about radioactive leaks from the Indian
Point Nuclear Power Plant.
Response: The NRC takes this opportunity to discuss survey and
monitoring requirements in this final rule by using public information
of recent leaks at two nuclear facilities, one at the Indian Point
Nuclear Power Plant and the other at a research and test reactor.
A public meeting was held on May 20, 2008, in Cortlandt, New York,
to discuss the results of the NRC's inspection of the licensee's
performance and the agency's independent assessment of contaminated
groundwater conditions that were first detected by the licensee at the
Indian Point Energy Center in September 2005. The NRC Inspection
Reports Nos. 05000003/2007010 and 05000247/2007010, dated May 13, 2008,
were referenced in this report (ML081340425). The groundwater samples
contained tritium and strontium-90 that were not previously monitored
or detected in groundwater before late 2005. As determined by the
licensee's hydro-geological analysis and independently confirmed by the
NRC, the contaminated groundwater does not migrate off-site, except
directly to the Hudson River. Because there is no current drinking
water pathway derived from groundwater or the Hudson River in the
vicinity influenced by the Indian Point Energy Center, the primary
radiological liquid effluent exposure pathway is through the
consumption of aquatic foods such as fish and invertebrates. The
licensee's radiological assessment of this pathway, performed in
accordance with NRC regulatory requirements and confirmed by NRC
inspection, determined that the radiological consequence of groundwater
migration to the Hudson River was, and continues to be, negligible with
respect to NRC regulatory limits; i.e., the dose consequence to a
hypothetical maximally exposed individual is no more than 0.1 percent
of the NRC regulatory specification for liquid radiological effluent
release.
In view of the potential radiological implications of contaminated
groundwater, the NRC initiated enhanced regulatory oversight at Indian
Point following the licensee's initial reporting of onsite sample data
of groundwater contamination. Subsequently, the licensee initiated a
comprehensive investigation of the extent of onsite groundwater
contamination which included an extensive hydro-geological site
characterization, the installation of several groundwater monitoring
wells, comprehensive radiological assessment, and the establishment of
a long-term monitoring program. As the NRC reported at the May 20,
2008, public meeting (ML081490020), the NRC independently confirmed the
adequacy and acceptability of the licensee's investigation,
radiological assessment, and plans for long-term monitoring of the
contaminant groundwater conditions. The licensee's remediation approach
(i.e., monitored natural attenuation) is considered reasonable by the
NRC. Notwithstanding, the licensee's long term monitoring program
[[Page 35536]]
will continue to be inspected by the NRC.
The State of New York, in Exhibit A of its comment to the
Commission on the proposed rule, cited sample data taken of the
contamination concentration levels. Based on the sample data, this
level of residual radioactivity is likely to be below the 10 CFR
20.1402 unrestricted release dose criteria at the time of Indian Point
decommissioning. On the effective date of the final rule, the licensee
must demonstrate that it is conducting operations, to the extent
practical, to minimize the introduction of residual radioactivity at
the site, including the subsurface (10 CFR 20.1406(c)). The amended 10
CFR 20.1501(a), and the existence of previously undetected groundwater
contamination due to leakage from the Units 1 and 2 spent fuel pools,
requires the licensee to continue monitoring the condition and evaluate
the need for additional monitoring and modeling at the plant in the
event of new or additional leaks, spills, data from existing monitoring
wells, or other information pertaining to residual radioactivity at the
site. The licensee may modify or revise the scope of its monitoring
effort at Indian Point based on demonstrated results, supported by
analysis of sample and survey data, which indicate that operations and
activities are sufficient to minimize the introduction of residual
radioactivity at the site. The sample and survey data is planned to be
publicly available in ADAMS with the annual effluent and environmental
reports.
In October 2007, the Pennsylvania State University Breazeale
Research Reactor facility experienced a minor leak of slightly
radioactive water from the reactor pool lining. In the following 6
weeks, the NRC performed several inspections at the facility
(ML073480163) and determined that the existing environmental monitoring
satisfied licensee and regulatory requirements. The licensee reviewed
its monitoring and decided to take samples from a nearby water well to
assess overall area well quality. Contamination surveys were performed
at the site to understand the migration of the residual radioactivity.
The NRC inspection concluded that the number and location of survey
points were adequate to characterize the radiological conditions. The
NRC inspection report noted that the licensee always investigates
readings above background levels and ensures that contaminated areas
are decontaminated.
Following the effective date of this final rule, this licensee must
demonstrate that, to the extent practical, it is conducting operations
so as to minimize the introduction of residual radioactivity at the
site, including the subsurface. Also, the licensee must perform surveys
sufficient to evaluate the need for additional monitoring and modeling
at the reactor based on future leaks or spills or other information the
licensee has relevant to residual radioactivity at the site.
There have been leaks at other research and test reactors with
outcomes that affected decommissioning planning. For example,
Cintichem, Inc., of Tuxedo, New York, held two NRC licenses, one for
the operation of a 5-megawatt research reactor and another for special
nuclear material. In February 1990, the licensee reported an
unmonitored release of radioactively contaminated water from the
reactor building to an onsite retention pond and a second leak in an
onsite concrete vessel (56 FR 23601; May 22, 1991). In May 1990,
Cintichem informed the NRC that it had decided to decommission the
reactor and related facilities. Over the next several years, Cintichem
conducted cleanup activities and dismantled the reactor. The Cintichem
licenses were terminated in 1998, with the site having been remediated
to levels suitable for unrestricted use (63 FR 45268; August 25, 1998).
Comment G.6: The proposed rule is unnecessary.
One commenter, supported by several additional commenters, stated
that existing decommissioning regulations contain appropriate
requirements to provide reasonable assurance that legacy sites will be
prevented. The programs that NRC licensees already have in place
address all aspects of decommissioning planning, including conduct of
operations to minimize contamination, monitoring and surveillance,
recordkeeping, and financing. These programs are subject to NRC
inspection and oversight. Another commenter argued that the reduction
of radiological risk associated with the proposed rule is extremely
small, yet compliance will be very resource-intensive and costly.
One commenter agreed with the NRC's statement that the vast
majority of NRC materials licensees do not have processes that would
cause subsurface contamination. This same commenter reasoned that
additional surveys should be therefore required only at those limited
sites where subsurface contamination may be a concern. This commenter
also asserted that the requirements in Sec. 20.1406(c) were
unnecessary, because ALARA requirements covered the requirement to
conduct operations to minimize subsurface and other residual
radioactivity. Current regulations include consideration of subsurface
contamination in the DCE, or could be addressed on a case-by-case basis
through license conditions and required materials licensees to minimize
contamination, survey contamination, and keep records. This commenter
believed that the vast majority of licensees would be unlikely to have
a reason for, or a means of determining, the volume of onsite
subsurface material containing residual radioactivity.
Commenters opposing the rule as unnecessary stated that, at a
minimum, the proposed rule and accompanying draft regulatory guidance
should be held in abeyance until the issues identified by the commenter
have been addressed. The commenter stated that the proposed rule and
regulatory guides should be substantially rewritten, and this would
require reissuance for public comment. In addition, the commenter
encouraged the NRC to hold workshops with the affected stakeholders.
Although the commenter believed the rulemaking is unnecessary, issues
of importance to the staff might be pursued in these workshops.
Response: The NRC disagrees with these comments concerning the need
for rulemaking. The ALARA requirements in existing regulations do not
explicitly address subsurface contamination and do not provide adequate
assurance that additional legacy sites will be prevented. Before this
final rule, the NRC regulations did not explicitly specify licensees'
obligations to survey subsurface contamination, nor did the regulations
explicitly specify the requirement of licensees to conduct operations
to minimize residual radioactivity at the site, including the
subsurface. This rulemaking will augment NRC inspection and oversight
activities by defining the regulatory basis to mandate particular
licensee actions on a timely basis to prevent the creation of more
legacy sites. The radiological risk of a legacy site with groundwater
contamination may be significant. The NRC will issue DG-4014 to support
the survey and monitoring requirements in this final rule and will hold
at least one public workshop (details on the public workshop will be
available under Docket ID NRC-2011-0103) to refine that guidance for
issues of importance to stakeholders.
Comment G.7: The proposed rule is unnecessary because NRC could
accomplish its objectives through inspection, oversight, and licensing
activities.
[[Page 35537]]
Several commenters argued that the decommissioning issues raised in
the proposed rule could be better addressed on a case-by-case basis
through the licensing, inspection, and enforcement process for the
unusual licensee that may have those concerns. This would be much more
effective and efficient than attempting to adjust regulations that
23,000 licensees are obliged to read. One commenter stated that the
rule seems to be an overly broad response to a narrow problem. If the
NRC has concerns regarding the potential for ``legacy sites'' for only
five to six licensees, then the more efficient path would be to impose
site-specific and license-specific conditions on the limited set of
facilities, rather than impose regulations on all licensees with
uncertain costs and even more uncertain benefits. Given the limited
scope of the problem as defined by the NRC, it does not make sense to
introduce a new layer of NRC review and approval of survey and
monitoring programs outside of licensing reviews.
Several commenters also recommended that statements should be added
that certain categories of licensees currently satisfy the proposed
requirements. According to one commenter, the NRC should include an
unqualified statement that NRC inspection and oversight programs
provide the necessary guidance and license conditions/requirements to
regulate activities for uranium mills undergoing decommissioning and
remediation. One commenter noted that the issue of controlling or
limiting the release of radioactivity in licensed operations is
different than the issue of intervention to address residual
radioactivity that was previously permitted. In the latter case, no
general solutions are available, and a case-by-case analysis will be
necessary. This is exactly what has taken place at the existing legacy
sites. To the extent that the proposed rule seeks to require
intervention to address residual radioactivity resulting from past,
permissible activities, the rule is unlikely to have any impact on
reducing the cost or complexity of decommissioning. Ultimately, the
NRC's licensing and oversight programs are adequate to reduce
introduction of residual radioactivity from current practices. Finally,
two commenters argued that the proposed rulemaking contradicts the
NRC's policy of risk-based regulation. Each affected licensee will be
required to spend an enormous amount of resources on monitoring
programs to address an issue that by the NRC's own evaluation has no
impact on the health and safety of the public. A more reasonable
approach would be to address subsurface contamination concerns on a
risk-informed basis for individual licensees by means of the existing
inspection and licensing process.
Response: The NRC believes that rulemaking is much more effective
than relying on existing licensing, inspection, the Reactor Oversight
Process and/or enforcement processes to accomplish regulatory
objectives that were stated in the technical basis for the proposed
rule. A legacy site can occur among a broad range of currently
operating licensees. Section II.B in this document identifies the
licensees that are affected by this final rule. The NRC agrees with the
commenter that case-by-case intervention is not an effective regulatory
approach to reduce the cost or complexity of decommissioning. As
discussed in the response to comment G-9 and G-13 below, the NRC
considers this final rule to be risk-informed.
Comment G.8: The proposed rule is not stringent enough.
Several commenters generally opposed the proposed rules because,
they believe that the rules are not stringent enough to protect the
environment or promote safety and will not make NRC actions more
effective, efficient, and realistic. One commenter believes that the
proposed regulations will encourage licensees to postpone the cleanup
of radionuclide leaks until some future date, by which time a plume may
be more difficult and expensive to decontaminate. This commenter argued
that aside from a few modest improvements in limited aspects of the
decommissioning process, the proposed rule does not address, in a
meaningful way, the deficiencies in facility operations that lead to
subsurface contamination, the threats posed by delayed remediation, or
the risks of unfunded subsurface decontamination at nuclear power
plants. This commenter stated that the final rule should require
nuclear power plant owners and other licensees to: (1) Actively prevent
subsurface radionuclide leaks, (2) look for contamination under their
sites, (3) publicly report what they find, (4) immediately clean up
subsurface radionuclide contamination, and (5) increase their
decommissioning funds to cover the costs of historical contamination at
their plants. The commenter also called for the NRC to create an
additional funding requirement when contamination is discovered by
requiring licensees to update decommissioning estimates to keep pace
with the actual subsurface and surface contamination conditions at
their facilities. That is, the NRC should require licensees to set
aside ample funds to cover decontamination and decommissioning as if
decommissioning were occurring now. Monitoring should be required at
least every 2 years.
Response: The NRC agrees that this final rule provides regulatory
flexibility to provide licensees discretion in determining the
appropriate response to a contaminating event that does not pose an
immediate health or safety concern, and licensees may in fact decide to
postpone cleanup activities. The NRC disagrees with the commenter that
the rule does not address events at operating facilities that lead to
subsurface contamination and additional risks later, resulting from
unfunded decommissioning activities. As stated in the proposed rule (73
FR 3814; January 22, 2008), the activities that will be undertaken by
licensees as a result of this final rule will provide a technical basis
for licensees and the NRC to understand the effects of significant
residual radioactivity on decommissioning costs, and to determine
whether existing financial assurance provided for site-specific
decommissioning is adequate. By using the term ``residual
radioactivity,'' the new Sec. 20.1406(c) and Sec. 20.1501(a) cover
any licensed and unlicensed radioactive material that has been
introduced into the site by licensee activities. If operating events
are causing significant amounts of residual radioactivity to accumulate
onsite, those events will need to be mitigated to comply with the new
Sec. 20.1406(c).
This final rule contains provisions in Sec. Sec. 30.35(e)(2),
40.36(d)(2), 70.25(e)(2), and 72.30(c) to require licensees to update
their DFP at least every 3 years to account for changes in costs and
the extent of subsurface contamination. A separate set of similar
funding update requirements is already applicable to power reactors.
Comment G.9: The proposed rules are not sufficiently precise.
Several commenters opposed the use of the phrase ``to the extent
practical'' in proposed 10 CFR 20.1406(c) and the phrase ``reasonable
under the circumstances'' in proposed Sec. 20.1501, because the terms
were too broad. One commenter stated that these phrases created a
loophole that was compounded by use of the term ``minimize,'' as
opposed to ``prevent.'' The commenter stated that these words will
hamper, if not preclude, effective enforcement actions by the NRC or
the U.S. Department of Justice against facilities and operators who
release radionuclides to the subsurface area. A
[[Page 35538]]
commenter representing several States also stated that use of the term
``to the extent practicable'' in the proposed rule could provide
licensees with the leeway to perform very limited sampling or surveys
to verify the extent of any subsurface plume, leading to erroneous
conclusions regarding no significant hazards. Another commenter said
that the survey requirement must be clearly spelled out in the language
of the regulation to make it binding upon licensees. The current
language is unacceptably vague.
Response: The NRC disagrees that the rule language is vague. The
phrases ``to the extent practical'' and ``reasonable under the
circumstances'' are already used in 10 CFR part 20 requirements to
provide flexibility in support of a risk-informed regulatory approach.
The risk-informed approach is more effective at achieving acceptable
results and compliance by licensees compared to a prescriptive
approach, which is cumbersome for licensees and regulators considering
the broad range of licensees using radioactive material. The regulatory
analysis in the proposed rule addressed this specific topic as it
relates to survey requirements. On Page 45, the regulatory analysis
notes that the Commission established a broad regulatory framework when
Sec. 20.1501 was added to the regulations in 1991. This final rule
adds precision to survey requirements by amending Sec. 20.1501(a) to
explicitly include the subsurface at a site as an area that needs to be
surveyed if concentrations or quantities of residual radioactivity in
the subsurface present a radiological hazard. The proposed rule states,
``The staff views radiological hazards as including those resulting
from subsurface contaminating events, when these events produce
subsurface residual radioactivity that would later require remediation
during decommissioning to meet the unrestricted use criteria of 10 CFR
20.1402'' (73 FR 3820; January 22, 2008).
Comment G.10: The proposed rule is based on historical AEC legacy
sites, rather than modern sites.
Several commenters stated that the NRC was basing the proposed rule
on past, rather than current, problems. One commenter asserted that the
very limited ``examples'' cited by the NRC of licensees for which some
concern has existed do not support the broad brush approach proposed by
the NRC in this rulemaking. The cited examples generally relate to
licensees that had been operating long before the current regulations,
comprehensive guidance, discipline in reviewing license applications,
contemporary licensee practices and awareness, and current
decommissioning funding requirements were in place. The commenter
pointed to the example of burial in soil of radiological waste onsite,
even if exceeding ``exempt'' regulatory limits at the time of burial,
which was permitted for over 20 years without prior agency review. The
commenter argued that it was likely that significant changes to the
historical regulatory scheme with respect to onsite radiological waste
disposal were at least factors in some of the site-specific examples of
legacy sites of concern to the NRC, but these examples have been
addressed within the current regulatory framework.
Response: The NRC agrees that previous changes to regulations on
subsurface burials have reduced the likelihood of legacy sites. The NRC
disagrees that the current regulatory framework is sufficient to
provide effective oversight of operating facilities to ensure the
prevention of more legacy sites.
Comment G.11: The proposed rulemaking is a new regulatory scheme
for ongoing decommissioning.
One commenter, supported by several others, argued that the
requirements for extensive subsurface soil characterization (or
remediation) during an operating facility's lifetime is largely
unrealistic. It is not feasible to perform subsurface characterization
without risking the breach of barriers that contain radioactivity,
disrupting the operationally essential equipment, or exacerbating the
migration of contaminants already in the environment. Based on industry
decommissioning experience, the majority of subsurface contamination
(by volume and concentration) would likely be located directly under
structures, systems and components (SSCs) that have leaked, where it
cannot be safely or adequately accessed for characterization purposes.
Even in the case of a reactor undergoing decommissioning, these areas
usually cannot be accessed until late in the decommissioning process,
when many of the SSCs and higher levels of contaminant sources have
been removed. Another commenter stated that the dust and other
materials stirred up during decommissioning could lead to greater
exposures for site personnel, thus obviating much of the already small
benefit of requiring site cleanup while operations are ongoing. The
prospect of ``continual decommissioning'' may also be contrary to the
principles of ALARA embodied elsewhere in 10 CFR part 20. One commenter
requested that licensees be permitted to evaluate normal construction-
related risks associated with any proposed excavation of residual
radioactivity, and that should these risks exceed the risks posed by
the residual contamination itself, the licensee should not be required
to excavate the material.
Response: As indicated in the response to Comment F.2, conducting
remediation actions while a facility continues to operate is not
required by the proposed rule, even if significant amounts of residual
radioactivity are present at a site. Based on the history of
radioactive leaks at power reactors, the leaks can generally be
attributed to the following SSCs: Fuel transfer systems and spent fuel
pools, buried piping, and storage tanks. Existing regulatory
requirements may apply to SSCs that have leaked radioactive liquids,
but determining which requirements apply to a specific facility
requires review of the plant's licensing basis. SSCs that are not
safety-related and are not covered by the licensee's quality assurance
program generally are subject to less maintenance, testing and
inspection than safety-related SSCs. The non-safety related SSCs are
more likely to have a radioactive leak without detection, and a
significant level of contamination from SSCs can migrate through the
subsurface far from the source. One of the findings in the Liquid
Radioactive Release Lessons Learned Task Force (73 FR 3814; January 22,
2008) final report was that a majority of leaks at power reactors are
from non-safety related SSCs that contain radioactive material.
Comment G.12: Variability in licensee practices in documenting
spills and leaks important for decommissioning does not justify new
requirements.
Several commenters stated that the proposed rule applies the same
requirements to all types of licensees despite the inherent differences
in how each type of licensee safely manages radioactive material and/or
the financial assurance instruments for decommissioning. Throughout the
preamble to the proposed rule, the NRC acknowledges that only a few
sites have identified contamination and been faced with hurdles to
releasing the site for unrestricted use. To date, all nuclear
generating facilities have been successful in their decommissioning for
unrestricted use.
Response: The NRC agrees that the 10 CFR part 20 changes in this
final rule apply equally to all NRC and Agreement State licensees
despite the differences in facility operations and the extent of their
radiation safety programs. However, licensees with an obligation to
provide decommissioning financial assurance are likely to be affected
by
[[Page 35539]]
this rulemaking only if they have liquid processes that would
contribute to significant subsurface contamination. The commenters are
correct that no power reactor sites have become legacy sites.
Comment G.13: The proposed rule is based on unusual factual and
economic circumstances that cannot be generalized to broad classes of
licensees.
Several commenters noted that throughout the January 22, 2008,
proposed rule, the NRC acknowledged that only a few facilities have
identified contamination that has resulted in unexpected difficulty in
decommissioning the site, and that the regulatory analysis represented
these facilities as a certain type of licensee (i.e., rare earth
extraction facility). Rather than targeting the proposed rule
accordingly, the scope of the proposed rule includes all types of
licensees, despite the inherent differences in how each type of
licensee controls radioactive material. Another commenter stated that
the proposed rule and draft guidance are attempting to apply a ``one-
size-fits-all'' approach to all NRC-licensed facilities without regard
to the varying processes, radionuclides, and risks at different
categories of licensees. For example, uranium mills, conversion
facilities, and solution mining facilities have unique attributes
making a ``one-size-fits-all'' approach inappropriate.
Response: The NRC used a risk-informed approach in developing the
language for the amendments to 10 CFR part 20 in the proposed rule.
This final rule is not prescriptive but instead applies a broad and
flexible regulatory framework as discussed in the response to Comment
G.9. The NRC agrees in part with the comment regarding the unique
attributes for uranium mills and solution mining facilities, as
discussed further in response to the next comment.
Comment G.14: Applicability to uranium recovery facilities.
Several commenters urged the NRC not to make uranium recovery
facilities subject to the new 10 CFR part 20 requirements, because such
facilities do not process enriched source material. One commenter
stated that the proposed rule should not apply to decommissioning
uranium recovery (UR) facilities. Another commenter requested that UR
facilities (conventional mills, in-situ uranium recovery facilities and
heap leach facilities) be categorically excluded from coverage under
the proposed amendments to 10 CFR 20.1406 and 20.1501 in the final
rule. A commenter stated that NRC inspection and oversight programs,
together with license conditions and existing regulations, adequately
regulate uranium mills undergoing decommissioning and remediation, and
are protective of the public health and safety and the environment. A
commenter stated that the requirements in the proposed rule to address
residual radioactivity during UR operations would result in new
operational restrictions well beyond those imposed by existing
licenses, and that the extreme variability of natural background
radionuclide concentrations, and the presence of Technologically
Enhanced Naturally-Occurring Radioactive Material (TENORM) and
unprocessed ore at a site would introduce new requirements in survey
and monitoring methods. Commenters also stated that the ``routine''
monitoring program described in the guidance would require a more
complex and expensive program than is presently necessary to adequately
characterize contamination or support decommissioning.
Response: The NRC agrees in part with the above comments. In
finalizing the license termination rule, which established 10 CFR part
20 Subpart E in 1997, the NRC recognized that there are unique soil
contamination issues associated with the decommissioning of UR
facilities. For this reason, 10 CFR 20.1401(a) was worded to exclude UR
facilities from the scope of 10 CFR part 20 Subpart E, and the NRC
requested comments on what radiological criteria should be used in
terminating UR facility licenses (62 FR 39093; July 21, 1997). The 10
CFR 20.1401(a) exclusion is not changed by the present rulemaking, and
UR licensees and applicants will not be subject to the new requirements
in 10 CFR 20.1406(c), just as they were not subject to the existing 10
CFR 20.1406 requirements.
As a result of the 1997 request for comments referenced above,
Criterion 6(6) of Appendix A to 10 CFR part 40 was amended in 1999 by
adding its second paragraph, which established total effective dose
equivalent (TEDE) requirements to address the radionuclides of concern
(chiefly uranium and thorium) present in the soils of UR facilities.
See 64 FR 17506 et seq. (April 12, 1999). If UR facilities undergoing
decommissioning have radioactive contamination in their soils
associated with their operations at levels exceeding background by 5
pCi/g of radium-226 (the benchmark dose), then Criterion 6(6) requires
that such contamination be remediated. The present rulemaking does not
change Criterion 6(6). The NRC thus does not agree with the commenter's
concern regarding TENORM and unprocessed ore.
Because the 10 CFR 20.1501 survey and monitoring requirements are
part of 10 CFR part 20 Subpart F rather than Subpart E, they do not
fall within the 10 CFR 20.1401(a) exclusion discussed above. For UR
facilities, these survey and monitoring requirements must be read in
conjunction with the 10 CFR part 40 Appendix A Criterion 7 and 7A
requirements. Together, these 10 CFR part 20 and part 40 requirements
help ensure that issues of soil and groundwater contamination--both at
operating UR facilities and those undergoing decommissioning--are
properly addressed. For example, the operational monitoring and survey
requirements in 10 CFR 20.1501 help ensure that the worker and public
dose limits set forth in Subparts C and D of 10 CFR part 20 are met,
and UR facilities have been subject to these dose limits since 1991,
when Subparts C, D, and F were first established. In that 1991
rulemaking, in response to a comment on then-proposed 10 CFR 20.1501 on
the lack of specific monitoring requirements, the NRC explained that
because 10 CFR part 20 contains the general radiation protection
requirements that apply to all classes of NRC licensees, the wording of
many of its provisions is necessarily general. (56 FR 23360; May 21,
1991). With the limited exception discussed above regarding 10 CFR part
20 Subpart E requirements, 10 CFR part 20 is still the set of general
radiation protection requirements that is applicable to all classes of
NRC licensees, including UR facilities. Accordingly, UR facilities are
and will remain subject to the 10 CFR 20.1501 survey and monitoring
requirements.
However, the revisions to Sec. 20.1501 in the final rule do not
establish any new remediation criteria for UR facilities. Standards for
decommissioning UR facilities, and the various related requirements for
conducting soil and ground-water monitoring at UR facilities, are found
in 10 CFR part 40, Appendix A. The final rulemaking does not change any
of these requirements. A UR licensee's program that complies with the
10 CFR part 40, Appendix A site remediation criteria would thus not be
impacted by Sec. 20.1501(a)'s revised survey requirements, and such
programs would not become more complex or expensive as a result of this
rulemaking. The 10 CFR part 20 worker and public dose requirements are
combined with the remediation criteria for UR facilities in 10 CFR part
40, Appendix A, as has
[[Page 35540]]
been the case previous to this rulemaking.
The change in terminology from ``radioactive material'' to
``residual radioactivity'' in 10 CFR 20.1501(a) will not result in any
new operational restrictions at UR facilities. Residual radioactivity,
as defined in 10 CFR 20.1003, is not ``residual radioactive material''
as defined in 10 CFR 40.4. The latter term is used only with respect to
materials at sites subject to remediation under Title I of the Uranium
Mill Tailings Radiation Control Act of 1978, as amended. The challenge
to determine background levels of radiation at specific UR sites has
not changed as a result of this final rule. Surveys that are reasonable
under the circumstances must be performed if there is a potential
radiological hazard at a site. Commenters expressing concern about the
unlicensed sources that are included in residual radioactivity, such as
TENORM and unprocessed ores at a UR facility, have read more into the
rule change in Sec. 20.1501 than is intended. For example, UR
facilities must currently manage ore, because Criterion 5H requires
that licensees protect underlying soils and groundwater from ore
stockpile contamination. Furthermore, ore remaining at a UR site during
decommissioning is considered 11e.(2) byproduct material and may be
placed into the tailings impoundment, so long as it is not removed from
the site for processing at another facility. As previously stated,
radioactive soil contamination at UR sites undergoing decommissioning
is addressed by Criterion 6(6). None of this is changed by the final
rule.
Comment G.15: Applicability to byproduct manufacturing licensees.
One commenter argued that radionuclide and radiopharmaceutical
manufacturing licensees are within the scope of currently operating
sites that the NRC would not expect to become ``legacy sites.'' The
regulations should therefore categorically exempt them from the
additional residual radioactivity monitoring requirements.
Response: Radionuclide and radiopharmaceutical manufacturing
licensees are byproduct material licensees regulated under the
requirements of 10 CFR part 30. If such a facility has no credible
release scenario that could contribute to significant subsurface
residual radioactivity at the site, then it is likely that the licensee
will not be affected by the final rule changes to 10 CFR part 20.
Comment G.16: Applicability to research and test reactors.
Several commenters argued that research and test reactor licensees
should be exempt from the final rule changes to new 10 CFR 20.1406(c)
and amended 10 CFR 20.1501.
Response: Research and test reactors are licensed under the
requirements of 10 CFR part 50. If a research and test reactor has no
credible release scenario that could contribute to significant
subsurface residual radioactivity at the site, then it is likely that
the licensee of such a reactor will not be affected by the final rule
changes to 10 CFR part 20.
Comment G.17: Applicability to water treatment facilities.
One commenter asked the NRC to address the potential applicability
to licensed water treatment facilities and to make it clear that such
survey and monitoring requirements likely will not be necessary at such
facilities because: (1) Their licensed operations involve the
production of uranium-laden ion exchange (IX) resins that are
substantially similar, if not identical, to those generated at in situ
uranium recovery (ISR) facilities; (2) all equipment that generates
such resins is, by license condition, contained within structures/
buildings that provide primary and secondary containment to minimize,
if not eliminate, potential releases of licensed material; (3) the
resins do not present credible release scenarios where potential
subsurface contamination would be implicated; and (4) the licenses
contain strict monitoring and survey requirements.
Response: Licensees who possess uranium-laden resins at water
treatment plants are source material licensees regulated under 10 CFR
part 40. Licensees possessing uranium-laden resins at water treatment
plants are not subject to the 10 CFR part 40 Appendix A criteria, and
are thus subject to the new 10 CFR part 20 requirements. However, if a
water treatment facility has no credible release scenario that could
contribute to significant subsurface residual radioactivity at the
site, then it is likely that the facility will not be affected by the
final rule changes to 10 CFR part 20.
Comment G.18: Residual radioactivity at publicly owned sewage
treatment works.
A commenter noted that the NRC's conclusion that municipal waste
treatment facilities were unlikely to have significant concentrations
of long-lived radionuclides fails to account for the potential impacts
to such facilities if (1) the new uranium and radium Maximum
Contaminant Levels (MCLs) are enforced effectively by EPA and their
delegated States, and (2) uranium and/or radium water treatment
residuals are released in an uncontrolled manner into sanitary sewers
or other discharge points from which such residuals could migrate.
Response: Regardless of whether the drinking water treatment plant
is: (1) Not removing radium from the drinking water (such as prior to
the new EPA drinking water standards for radionuclides) or (2) removing
radium from drinking water and discharging the radium-laden residuals
to the sanitary sewage system, the amount of radium (or other
radionuclide found in the source water) that reaches the publicly owned
sewage treatment works (POTW) is unchanged. The NRC assumes, for
purposes of this rulemaking, that EPA drinking water standards will be
enforced effectively at municipal water treatment plants, and that any
release of uranium and/or radium residuals will be done in a controlled
manner consistent with license conditions and regulations.
Recommendations are available from the ISCORS regarding actions that a
POTW operator may take to determine if there is radioactive
contamination at its facility and how to interpret the detection
results. The recommendations are contained in ISCORS Technical Report
2004-04 (ML103400184).
Comment G.19: Definition of residual radioactivity.
One commenter, supported by several others, argued that licensees
should not be required to control unlicensed material in a manner that
is substantively different from that required by a non-licensee. This
same commenter stated that the definition of ``residual radioactivity''
in 10 CFR 20.1003 is inconsistent with a risk-informed approach to
regulation and with the recently-issued RIS 2008-03 ``Return/Re-Use of
Previously Discharged Radioactive Effluents'' (ML072120368). In further
support of this argument, the commenter cited the proposed rule's
preamble (73 FR 3815; January 22, 2008) as excluding from the rule's
scope off-site contamination attributable to previously released
effluents, thus demonstrating the inconsistency of requiring the
licensee to control onsite unlicensed material. This commenter
accordingly requested that the NRC revise the definition of ``residual
radioactivity'' by deleting its reference to unlicensed sources, and
its reference to routine releases of radioactive material.
Response: ``Residual radioactivity'' is a term already defined in
10 CFR 20.1003. Because no changes to this term were proposed when this
rulemaking action was published for public comment, the request to now
[[Page 35541]]
change the definition is outside the scope of this rulemaking. In
considering the comment, the NRC re-examined the cited section of the
proposed rule's preamble (73 FR 3815). As stated there, the scope of
this rulemaking ``does not include offsite contamination discovered
during decommissioning.'' The final rule deletes the following text
which conditioned the above statement: ``unless such contamination is
an extension of onsite contamination (e.g., a contaminated groundwater
plume originating from the licensee's facility).'' What the NRC may
later choose to do regarding offsite contamination discovered during
decommissioning is unknown at this point, and making the above deletion
avoids any limitation on future actions the NRC may take on this issue.
When RIS 2008-03 was issued, the term ``radioactive material'' was
used in 10 CFR 20.1501(a), which created the need to differentiate
licensed from unlicensed material. The RIS 2008-03 provides a
distinction between onsite and offsite unlicensed material. Offsite
unlicensed material results primarily from authorized effluent
discharges to unrestricted areas that have been evaluated in accordance
with regulatory requirements. Radioactive effluent discharge controls,
environmental dispersion modeling, and dose assessments ensure that any
public dose is within public radiation protection standards. The
licensed radioactive material that was properly discharged in
accordance with 10 CFR part 20 to the unrestricted area is no longer
the responsibility of the licensee. However, onsite unlicensed material
is sometimes co-mingled with licensed radioactive material (for example
from leaks or spills) and generally cannot be distinguished from or
separated from licensed radioactive material. Both licensed and
unlicensed radioactivity (e.g., from returned or re-used effluents) at
the site are the responsibility of the licensee, during operations and
during decommissioning. Unlicensed radioactivity from the return or
recycle of previously discharged radioactive effluents can be
discharged in liquid or gaseous effluents to the environment in
accordance with RIS 2008-03. The control of residual radioactivity at
the site during operations increases the assurance that the 10 CFR
20.1402 criteria will be met at the time of decommissioning. The
reasons that the NRC is using the term ``residual radioactivity'' in
new Sec. 20.1406(c) and amended Sec. 20.1501 were set forth in the
proposed rule's preamble (73 FR 3814). The NRC does not agree that the
definition of ``residual radioactivity'' in 10 CFR 20.1003 is
inconsistent with RIS 2008-03.
Comment G.20: Clarify what is meant by ``significant'' residual
radioactivity.
A commenter stated that the term ``significant'' is not defined and
may be open to wide interpretation by licensees and others. Similarly,
several other commenters stated that the NRC should define
``significant'' contamination, and should specify: (1) Methods required
to conduct surveys and their frequency, to ensure consistency in the
groundwater monitoring and sampling program; and (2) the constituents
to be sampled, the timing and frequency of the sampling, sampling
techniques, and how to analyze samples.
Response: The intended meaning of the phrase ``significant residual
radioactivity''--which is not a defined regulatory term--is discussed
in the proposed rule's preamble (73 FR 3815 and 3835). As stated there,
``significant'' residual radioactivity is a quantity of radioactive
material that would later require remediation during decommissioning to
meet the unrestricted use criteria of 10 CFR 20.1402. The DG-4014
proposes guidance to licensees on acceptable methods to conduct soil
and groundwater sampling to meet the new survey requirements.
Comment G.21: Subsurface and significant contamination.
One commenter disagreed with the statement in the proposed rule's
preamble (73 FR 3819) that subsurface contamination occurs in an area
at least 15 centimeters (6 inches) below the surface, arguing that
instead it should be defined to, and inclusive of, the groundwater
table. The same commenter noted that ``Significant contamination'' is
not defined, contrary to a recommendation made at Page 22 of the 2006
Final Report of the NRC Liquid Radioactive Release Lessons Learned Task
Force (ML062650312).
Response: The NRC's use of the term ``subsurface'' in the proposed
rule preamble is consistent with the definition of ``subsurface'' used
in NUREG-1575, ``Multi-Agency Radiation Survey and Assessment of
Materials and Equipment Manual (MARSAME)'' (ML070110228). As stated on
Page 3-14 of that manual, the surface layer is represented as the top
15 centimeters (6 in.) and may include gravel fill, waste piles,
concrete, or asphalt paving. Subsurface soil and media are defined on
that same page of the manual as any solid materials not considered
surface soil.
In this rulemaking, the NRC decided not to make ``significant
contamination'' a defined term in the regulations. Instead, the NRC
found that ``residual radioactivity''--which is already a defined
regulatory term--covers the type of subsurface contamination that
prompted the creation of the Liquid Radioactive Release Lessons Learned
Task Force. Additionally, as stated in the response to Comment G.20,
the proposed rule's preamble provides guidance on the level of residual
radioactivity that is considered to be ``significant.''
Comment G.22: Additional site characterization and monitoring not
warranted.
Several commenters stated that the proposed NRC regulations could
have the unintended consequence of triggering performance of extensive
characterization and remediation efforts, without regard to the degree
of actual health and safety impact. The proposed regulations would
require the evaluation of subsurface contamination based on future
decommissioning exposure scenarios, even though no foreseeable
operating exposure limits would be exceeded. Furthermore, due to access
constraints, it is unlikely that subsurface characterization efforts at
an operating reactor would provide any better DCE input data (i.e.,
volumes and locations of subsurface media exceeding decommissioning
criteria) than that produced by experienced decommissioning experts
making engineering judgments using information currently available as
10 CFR 50.75(g) file data.
Response: As stated in the proposed rule's preamble (73 FR 3813),
the NRC identified the need for licensees during facility operations to
timely report the existence of subsurface contamination that has the
potential to complicate future decommissioning efforts. But as
indicated in responses to other comments, these commenters incorrectly
state that the proposed regulations require the immediate evaluation of
subsurface contamination even in cases where no foreseeable operating
exposure limits would be exceeded by the contamination. As stated in
DG-4014, a licensee may decide to perform extensive characterization
following its initial scoping surveys and preliminary characterization
to determine if an area at the site contains significant residual
radioactivity. There may be a need for additional monitoring and
modeling, following evaluation of the initial scoping surveys, based on
the significance of a spill or leak. But if there is no significant
residual radioactivity at a site, then it is likely that the licensee's
current monitoring
[[Page 35542]]
plan is sufficient and no additional surveys or monitoring are
necessary. When there is significant residual radioactivity at a site,
survey results will serve as a technical basis to support the
licensee's estimates of volumes and locations of subsurface
contamination. Such estimates will, in turn, aid the licensee in
arriving at a more accurate DCE.
Comment G.23: Frequency of surveys.
One commenter said that the phrase in 10 CFR 20.1501(b), which
requires licensees to keep records from surveys ``describing the
location and amount of subsurface residual radioactivity identified at
the site,'' does not clarify whether the surveys are to be simply one-
time snapshots of residual radioactivity at one time, or are to be
conducted periodically. The commenter urged the NRC to specify that
surveys are mandatory and to be conducted periodically, and that the
results submitted to the NRC will be made public.
Response: The frequency of surveys is dependent on site-specific
conditions and is a topic discussed in guidance. The survey results
that are included in records important for decommissioning are a
licensee recordkeeping requirement for NRC review. As noted in the
response to Comment D.4, the NRC understands that power reactor
licensees will be submitting the onsite groundwater sampling results as
part of their annual effluent and environmental reports. The NRC
understands that this information is planned to be publicly available
in ADAMS, similar to the annual effluent and environmental reports that
are currently publicly available.
Comment G.24: Assessed background radioactivity prior to operation.
One commenter questioned the NRC statement that materials licensees
already must assess their background radiation prior to operation.
Another commenter argued that materials licensees are not now required
by 10 CFR 20.1301(a)(1) to make comprehensive measurements of
radioactivity in soil or groundwater before operation to distinguish
levels of residual radioactive material from that due to natural
background or the operations of others.
Response: The following statement in the proposed rule's preamble
is not correct: ``All licensees with operating facilities must have
performed an assessment of background radiation prior to operating
their facility, to be compliant with the requirements in 10 CFR
20.1301(a)(1)'' (73 FR 3819). The NRC regrets the error. Measuring
background before plant operation is not a regulatory requirement in 10
CFR parts 20, 50 or 52. Instead, as stated in Regulatory Guide 4.1,
``Programs for Monitoring Radioactivity in the Environs of Nuclear
Power Plants,'' a licensee or license applicant for a nuclear power
plant should initiate preoperational monitoring 2 years before
operations to provide a sufficient data base for comparison with
operational data. This would include surveys of background
radioactivity.
Comment G.25: The proposed rule effectively eliminates the option
to use restricted release for license termination.
A commenter stated that the intent of the proposed rule is to
address significant amounts of residual radioactivity at a site in
order to achieve effective decommissioning planning. The proposed rule
assumes that for operating facilities, these events would result in a
quantity of residual radioactivity that would later require remediation
during decommissioning in order to meet the unrestricted use criteria
of 10 CFR 20.1402. The established approach for determining the cost
under ALARA is not factored into the proposed remediation decision.
Further, as currently worded, the proposed rule and draft regulatory
guidance have the apparently unintended consequence of eliminating the
ability to use the restricted release criteria at license termination,
because a spill has to be remediated to the Derived Concentration
Guideline Levels (DCGLs) for unrestricted release of the site. If the
licensee does not remediate to the screening DCGLs, it must put money
into its decommissioning fund to remediate such that the license can be
terminated for unrestricted use of the site.
Response: The NRC does not agree that it is effectively eliminating
licensees' use of the restricted release option for license
termination. On the contrary, the changes being made to 10 CFR
30.35(e)(1)(i)(B), 40.36(d)(1)(i)(B), 70.25(e)(1)(i)(B), and
72.30(b)(2)(iii) allow licensees during facility operations to base
their DFP on the 10 CFR 20.1403 restricted release criteria, if the
licensee can demonstrate its ability to meet the provisions of Sec.
20.1403. The NRC will accept a reasonable methodology used by a
licensee to (1) evaluate remediation costs that support a licensee's
decision regarding its response to a spill or leak and (2) demonstrate
that the licensee is achieving doses at the site that are ALARA. The
DCGL screening criteria in NUREG 1757, Volume 1, Rev. 1, ``Consolidated
NMSS Decommissioning Guidance,'' apply when the site is a relatively
simple site with residual radioactivity in topsoil, typically in the
top 15 centimeters of surface soils. For more complex sites with deeper
subsurface residual radioactivity, the criteria for significant
residual radioactivity may require an evaluation using a more complex
modeling code, such as RESRAD or its equivalent, to determine whether
the subsurface residual radioactivity is significant with respect to
decommissioning criteria of 25 mrem per year TEDE. The DG-4014 proposes
more guidance to licensees on this topic.
Comment G.26: Reporting and recordkeeping requirements.
Numerous commenters addressed the reporting and recordkeeping
requirements. Most were critical, although for widely differing
reasons. Several commenters criticized the requirements as unnecessary
or too broad. One agreed that documentation of subsurface contamination
should be placed in decommissioning records. However, the commenter
stated that a small leak or spill inside a building that is promptly
cleaned up is not a decommissioning issue. Thus, the commenter objected
to references to ``any'' leakage or spills. Another commenter stated
that licensees are currently required to report significant
environmental impacts to both NRC-Agreement State agencies and the EPA.
A commenter from a power reactor stated that reporting rules under Part
20 were unnecessary because of the requirements already in place in 10
CFR 50.75(g). One commenter also pointed to potential double counting,
noting that 10 CFR part 20 prohibits gaseous effluent releases to the
atmosphere above regulatory limits. In accordance with 10 CFR part 50,
Appendix I, releases within regulatory limits must account for the dose
to the public. Thus, low levels of radioactivity could be deposited
onto the site due to rainout, washout and other means, which could then
leach into the subsoil. The proposed rule does not consider that these
gaseous effluents are accounted for at the time of their release,
causing them to be counted again. Finally, one commenter stated that if
the proposed rule is finalized, more than 60 days will be needed to
implement it. At least a year should be provided to prepare the
required reports.
Response: Licensees are responsible for completing decommissioning
activities and thus must, for decommissioning planning purposes,
determine which leaks and spills must be documented. The NRC has
removed its reference to ``any'' leakage or spills in DG-4014. The NRC
agrees that
[[Page 35543]]
gaseous effluents that are properly discharged in accordance with 10
CFR part 20 to an unrestricted area are no longer the responsibility of
the licensee. However, because onsite unlicensed material is sometimes
co-mingled with licensed radioactive material (for example from leaks
or spills) and generally cannot be distinguished from or separated from
licensed radioactive material, both licensed and unlicensed
radioactivity (e.g., from returned or reused effluents) at the site are
the responsibility of the licensee, during operations and during
decommissioning. The control of residual radioactivity at the site
during operations ensures that the 10 CFR part 20 Subpart E criteria
for unrestricted release will be met at the time of decommissioning.
The NRC agrees with the commenter on the effective date of the final
rule and has established an implementation period of eighteen months
following publication of the final rule in the Federal Register.
Comment G.27: Public documentation of spills and leaks.
Several commenters argued that the proposed rule was inadequate
because, although licensees are required to keep records of spills and
leaks on site, they are not required to notify NRC regional office or
headquarters that such spills and leaks have occurred. Thus,
information about spills and leaks will not be added to the ``public
side'' of the Commission's ADAMS document management system, nor will
the Commission ever ``possess'' a document for purposes of the Federal
Freedom of Information Act. The proposed rule will not enable the
public to see the company's memo documenting the leak, spill, or plume.
These commenters argued that the final rule must require that all
licensees submit their documentation of spills and leaks to the NRC and
that the NRC promptly make such documentation available to the public.
One stated that operating facilities must be required to inform state
and local officials of the following, with follow-up notification to
the NRC: (1) Onsite leaks and spills into groundwater and (2) onsite or
offsite water sample results that exceed established criteria in the
radiological monitoring program. Another said that all surveys and
reports of leaks and spills prepared pursuant to Sec. 20.1406, Sec.
20.1501 and Sec. 50.75(g) must be submitted to the NRC and disclosed
to the general public through publication on the NRC'S ADAMS Database.
Response: The proposed rule did not contain new reporting
requirements regarding spills and leaks, and the issues raised in this
comment are not within the scope of this rulemaking.
H. Financial Assurance Mechanisms and Reporting
Comment H.1: Need for regulations.
Several commenters argued that the current decommissioning rules in
10 CFR parts 20, 30, 50, 70, and 72 already provide reasonable
assurance of adequate protection of public health, safety, and the
environment related to decommissioning, and that therefore new and
additional financial assurance requirements are unnecessary. One
commenter, whose comments were endorsed by several other commenters,
cited that statement in SECY-03-0069 that ``no licensee providing a
parent company or self-guarantee has entered bankruptcy or has failed
to proceed with decommissioning projects in an adequate manner.'' This
commenter further quoted the SECY statement that the NRC ``staff has
not observed an example of an NRC licensee whose decommissioning
funding fell short because of inadequate disclosure of the licensee's
financial position.'' One commenter stated that the proposed rules
contained some modest improvements in financial assurance for materials
facilities and interim spent fuel storage installations but argued that
it did nothing to require licensees of operating power reactors to set
aside sufficient funds for decommissioning.
Response: The proposed rule did not identify any changes to
financial assurance requirements specifically applicable to licensees
of operating power reactors. Thus, comments arguing for such changes
are outside the scope of this rulemaking and will not be considered
here.
The NRC agrees with the other commenters that an extensive revision
to the financial assurance requirements applicable to operating
reactors is not necessary, because in general the current requirements
have worked effectively since they were promulgated in 1988. However,
since then, the financial industry, accounting standards, bankruptcy
law, and commercial law and practices have evolved, and the NRC
periodically amends its financial assurance rules to address these
changes. The NRC disagrees with the commenters that the current rules
are fully adequate and require no changes to update or improve them.
The agency's goal is to address potential risks to the financial
assurance system as they are identified, rather than waiting until the
risks manifest themselves as delays in decommissioning or the addition
of more legacy sites.
Comment H.2: Financial tests.
One commenter stated that the current financial tests in Appendix A
(Parent Company Guarantee) and Appendix C (Self-Guarantee) of Part 30
have proved to be an economical way for materials licensees to
demonstrate financial assurance sufficient to fund decommissioning
efforts. The NRC has not demonstrated a need, and in fact it is
unnecessary, to impose greater restrictions in those tests to provide
reasonable assurance of decommissioning funding. Another commenter
expressed support for the clarification in the proposed rule that
adjustments of ``+'' or ``-'' to bond ratings are included. However,
another commenter questioned the proposed requirement that bond ratings
be for the most recent ``uninsured, uncollateralized, and
unencumbered'' bond issuance. The commenter stated that the NRC had not
presented any evidence concerning the need for this change,
particularly because ratings for senior secured debt are a relevant
indicator of good financial health. The same commenter argued that
although annual reevaluation of the financial test was already the
practice, such reevaluations should not be required to be certified by
an independent Certified Public Accountant (CPA).
Response: Although the NRC agrees that the current parent company
guarantee and self-guarantee mechanisms have been effective means of
demonstrating financial assurance, it believes that the revisions to
the financial tests that determine eligibility to use the guarantees
will strengthen the tests and thereby increase the assurance provided
by the guarantees. Other changes will codify established NRC practice.
The NRC currently allows the use of ``+'' and ``-'' bond ratings. The
requirement for ``uninsured, uncollateralized, and unencumbered'' bonds
is currently part of some, but not all, financial tests used by the
NRC, and the agency is making all the tests consistent with respect to
this criterion. The NRC is convinced that this requirement is desirable
and increases assurance. An uninsured, uncollateralized, and
unencumbered bond rating is an opinion as to the issuer's ability to
meet its repayment obligations in a timely manner. Rating agencies
typically go through an extensive financial evaluation process and
credit analysis before they assign ratings to the debt of an
organization, including meeting with management, examination of
financial statements, research into industry and market conditions, and
review of non-publicly available information obtained from the
[[Page 35544]]
organization. However, bonds that are insured, collateralized, or
encumbered are not rated in the same manner. Instead, the rating of
insured bonds is based on the rating assigned to the insurance company
and can change significantly if that rating changes. The NRC notes
recent public discussions of sudden declines in the rating of insured
debt instruments based on declines in the rating of the insurers.
Similarly, the rating of collateralized bonds depends on an evaluation
of the quality of the collateral, rather than an evaluation of the
underlying financial condition of the bond issuer and can change
quickly and significantly if the quality of the collateral declines.
Bonds issued for certain purposes (usually by public entities) may be
tied (encumbered) to property that is affected by activities paid for
by the revenues from the bonds, and the property may, in turn, serve as
collateral for the bonds. The ratings for such bonds may be affected by
all of these factors. Therefore, the NRC requires that when bonds are
used as part of a demonstration that the firm can pass a financial
test, the bonds are uninsured, uncollateralized, and unencumbered. With
respect to CPA certifications, this requirement is currently part of
the financial tests, and the NRC did not propose to revise it. The
agency, therefore, is going forward with the changes as proposed.
Comment H.3: Insurance.
One commenter addressed the NRC's decision not to require materials
licensees to obtain environmental cleanup insurance/onsite property
damage insurance. The commenter agreed with the NRC's assessment that
the cost of such insurance would be prohibitive for a very rare event.
Response: In the absence of any comments supporting the inclusion
of an insurance requirement, the agency plans to continue tracking the
issue but is not adopting such a requirement at this time.
Comment H.4: License transfer application.
The three commenters who addressed this topic supported the
proposed requirement to supply financial assurance information as part
of a license transfer application. Two comments supported the Sec.
30.34 proposed requirements.
Another commenter supported the proposed addition to 10 CFR 72.50.
This commenter pointed to the possibility of a licensee's spinning off
a merchant nuclear plant into a new holding company with limited
financial assets. The commenter stated that under the current
regulations, it remains unclear what financial assurance applicants
must provide to the NRC in order to address this issue.
Response: The NRC agrees with the commenters that it is important,
before approving a license transfer, to determine whether the proposed
license transferee will be able to provide the required financial
assurance for decommissioning. Therefore, the NRC is adopting this
proposed requirement.
Comment H.5: Tangible net worth requirement increase to $21
Million.
One commenter agreed with the proposal to increase the tangible net
worth requirement in the existing financial tests to address inflation
since the financial tests were adopted, but argued that the amount of
$19 million was based on a calculation performed in 2005. This
commenter stated that the NRC should recalculate the proposed $19
million for tangible net worth on the basis of 2007 or 2008 to ensure
that it is fully current. The commenter estimated that approximately
$21 million would be the more appropriate amount.
Another commenter noted that the proposed rule would also modify
Part 30, Appendix C to add a new criterion to the financial test for an
entity that would provide a self-guarantee. The proposal would add a
requirement for demonstrating a tangible net worth of at least $19
million. The commenter noted that the only basis given for this change
is that it would make Appendix C consistent with the financial tests in
Appendix A (parent company guarantees) and Appendix D (companies with
no outstanding rated bonds). However, the commenter argued that the
proposed change is unnecessary--first, because the proposed test ($19
million) has no correlation to the decommissioning obligation and
second, because a focus on tangible net worth as a measure of financial
stability and risk of default is unnecessary. The commenter stated that
for many companies a $19 million tangible net worth test that excludes
intangible assets would serve little purpose. The commenter concluded
that the NRC should not adopt this requirement.
Response: The NRC agrees with the comment to increase the tangible
net worth requirement to $21 million for the financial tests, as
discussed in section II.N.7 of this document and has made this change
in the final rule text. The NRC disagrees with the second comment
regarding the proposed addition to Appendix C of Part 30 of a
requirement for licensees and applicants to have a tangible net worth
of at least $21 million. Although the $21 million tangible net worth
minimum might in some cases be substantially less than the estimated
costs of decommissioning, the purpose of this requirement is not to
match estimated costs of decommissioning, but rather, as stated in
section II.N.7, to provide greater assurance of financial stability and
hence a lower likelihood of bankruptcy. Further, as discussed in
section II.N.7, the reasons for adopting the tangible net worth test as
one criterion for using a guarantee apply today as much as they did
when the parent guarantee was established in 1988. Because a tangible
net worth of at least $21 million is considered by the NRC as an
effective financial threshold among the other financial tests that may
be applied by licensees to use a guarantee mechanism, the NRC amended
Appendix C of Part 30 to include the $21 million tangible net worth
requirement.
Comment H.6: Inclusion of salvage value.
One commenter argued that the NRC should consider allowing DCEs to
consider the resale value of product and other valuable assets,
determined on a case-by-case basis. The amount could be limited to less
than the contingency factor in the cost estimate.
Response: Since the financial assurance requirements were
promulgated in 1988, the NRC has taken the consistent position,
expressed in guidance until issuance of this proposed rule, that
licensees should not take credit in their DCEs for the value of any
materials that may be byproducts of the decommissioning process (e.g.,
salvage value). Estimates of salvage value are considered extremely
speculative and uncertain, and allowing such estimates to be included
in DCEs as offsets would raise the possibility that the amount of
financial assurance would be inadequate if at the time of
decommissioning such salvage value could not be realized. Allowing
salvage value to be included up to the amount of the contingency factor
would subvert the reason for the contingency factor, because it is
required to address unforeseen technical situations that increase the
cost of decommissioning.
Comment H.7: Assume 1 percent real rate of return in Sec. 20.1403
trust.
Several commenters addressed the proposal to require licensees to
assume only a 1 percent real rate of return on funds set aside to
provide long-term care and maintenance of sites decommissioned for
restricted use. Commenters' positions ranged from support for the
proposal to statements that the 1 percent rate was too high and
statements that it was unnecessarily low.
Comment H.7.1: One commenter who supported the proposal noted that
a
[[Page 35545]]
similar provision is currently contained in 10 CFR part 40, Appendix A,
Criterion 10, which provides that if a site-specific evaluation shows
that a sum greater than the minimum amount specified in the rule is
necessary for long-term surveillance following decontamination and
decommissioning of a uranium mill site, then the total amount to cover
the cost of long-term surveillance must be that amount that would yield
interest in an amount sufficient to cover the annual costs of site
surveillance, assuming a 1 percent annual real rate of interest. The
commenter noted that once reclamation is complete at Title II uranium
mill tailings sites, the licensee is required to transfer the land
containing the 11(e)2 byproduct to the Federal Government/Department of
Energy (DOE) or to the State government (if the State agrees to accept
it) along with funds (a minimum of $250,000 in 1978 dollars or more if
necessary) to fund long-term site monitoring and maintenance, assuming
a 1 percent real rate of return on the funds. The commenter believed
that extending this type of regulation to other licensees is consistent
and fair.
Response: No response is necessary.
Comment H.7.2: One commenter criticized the proposed amendment to
10 CFR 20.1403. This commenter argued that the 30-year period of
interest rates examined by the NRC resulting in the 1 percent proposal
did not adequately represent the highly variable history of interest
rates. The commenter argued that the NRC should incorporate the
uncertainty of predicting future interest rates into its analysis of
the correct rates for long-term care by adopting a sliding and
declining interest rate assumption. The commenter cited an academic
expert's suggestion for a sliding scale of interest rates ranging from
4 percent (years 1-5) to 0 percent (years 300 and over). However, the
commenter did not explicitly endorse the sliding scale provided in its
comments.
Response: For the reasons discussed in the January 22, 2008,
proposed rule, the NRC's view remains that an assumed 1 percent annual
rate of return is an appropriate criterion to qualify for license
termination under restricted conditions. From 1975 to 2005, U.S.
Treasury Bills returned an average of 1.58 percent per year, and
government bonds returned an average of 4.87 percent per year (73 FR
3824; January 22, 2008). Additionally, the method by which the assumed
annual real rate of return would be applied is the same as the method
required by 10 CFR part 40, Appendix A, Criterion 10 (rule for
determining the adequacy of funds provided by a licensee for long-term
surveillance and control of tailings prior to the termination of a
uranium or thorium mill license). NUREG-0706 provides details to
determine the minimum charge for long-term surveillance and control.
Pages 14-12 through 14-16 of NUREG-0706, Volume 1 (ML032751663) provide
examples of the method, including Table 14.2 that shows different
levels of the total fund amount based on three values of annual
monitoring expense and three values for the real rate of return. The
method used to derive the values in Table 14.2 is known as an annuity
that has no definite end, which would be appropriate for long-term
surveillance and control of a site contaminated with uranium or
thorium. An annuity that has no definite end is a ``perpetuity,'' or a
``perpetual annuity.'' The present value of a perpetuity is equal to
the amount of the annual payment, assumed to be in identical amounts
each year, divided by the appropriate rate of return. The perpetuity
acceptable to the NRC includes the annual payments for an independent
third-party to perform the surveillance and control work, including the
25 percent contingency. For example, if the annual payment were
determined to be $200,000 at the time the license was terminated, then
a minimum amount of $20 million would be required at an assumed 1
percent real rate of return. This method to derive the value of an
adequate amount of decommissioning financial assurance is not the same
as a sinking fund method, suggested by the commenter, in which a
sliding scale of interest rates could be applied over a specified
period of time. The NRC considers an assumed annual 1 percent real rate
of return on investment to be appropriate for 10 CFR 20.1403(c)(1), as
it is for 10 CFR part 40, Appendix A, Criterion 10, even if
historically low rates of return prevail for extended periods of time.
The method is well suited for assessment of sites for which restricted
use is planned for license termination. Accordingly, the NRC is making
no change to the rule text in 10 CFR 20.1403(c)(1) in the final rule
compared to the proposed rule.
Comment H.7.3: Some commenters argued that the proposed rate to be
used in determining the appropriate amount to be set aside in a trust
for long-term surveillance and monitoring was too low. They argued that
the trust funds should be managed to the standard of care required by
State or Federal law or one or more State or Federal regulatory
agencies with jurisdiction over the trust funds, or to the standard of
care of that a prudent investor would use in the same circumstances. In
light of these new restrictions on the handling and segregation of
long-term funds, the adequacy of the trust funds should be assessed
based on an assumed annual 2 percent real rate of return on investment.
This would bring the treatment of long-term surveillance and monitoring
funds into line with the other NRC regulatory provisions, such as 10
CFR 50.75(e)(l)(ii), which permit credit for projected earnings using
up to a 2 percent annual real rate of return. One commenter noted that
the 2 percent real rate of return assumption is already very
conservative and is used over very long periods of time, including safe
storage (SAFSTOR) periods for shutdown reactors. The commenter asserted
that the NRC should not depart from a real rate of return standard that
is already adequately conservative. The commenter stated that it did
not find the argument for considering the 1 percent real rate of return
compelling.
Response: For the reasons discussed in the response to Comment
H.7.2, the NRC believes an assumed 1 percent annual rate of return is
an appropriate criterion to qualify for license termination under
restricted conditions.
Comment H.8: Standby trust established for all guarantees.
Several commenters opposed the proposed requirement that a standby
trust fund be set up at the same time that a licensee proposes using a
parent company guarantee for financial assurance. One commenter argued
that to qualify for the parent-company guarantee, the licensee's
guarantor must pass a rigorous financial test with acceptance criteria
that banks, which would engage with licensees to establish the standby
trust fund, may not satisfy. There would be no need for such a company,
particularly with an AAA rating, to establish a trust fund with a bank
with a rating that is at the same level or lower. It makes no sense for
the NRC to prefer to accept this potentially greater vulnerability.
Another commenter noted that a Part 50 reactor licensee may have
established a decommissioning trust and be using a guarantee to provide
financial assurance for the balance of the decommissioning assurance
required. This commenter argued that a standby trust should not be
required to support a parent company guarantee if the licensee has
already established a decommissioning trust. The same commenter also
argues that, for non-reactor licensees, this requirement imposes an
unnecessary burden and significant cost, including the cost to develop
the trust arrangements and ongoing trustee fees. These costs are not
insignificant in the context of the amount of the guarantees
[[Page 35546]]
being provided by many non-reactor licensees. Moreover, the cost is
simply not justified, given the already very high thresholds for
qualifying to give a guarantee (e.g., an investment grade credit
rating). A company that drops to a slightly below-investment-grade
rating is not necessarily in financial distress. This itself is a very
early warning signal, which can be used as the trigger point for
requiring the creation of the trust and setting aside of funds, long
before the company's ability to fund the guarantee can seriously be
questioned. Thus, the commenter suggests that the requirement to
establish a trust be imposed at the time that this advance indicator of
a potential financial issue arises, and payment under a guarantee is
required under the new rules. For reactor licensees, the requirement
for an existing standby trust is not a major issue, because existing
trust arrangements should qualify to serve this purpose. If this
requirement is retained, a clarifying sentence should be added: ``An
existing trust established for purposes of meeting the prepayment or
external sinking fund methods pursuant to 10 CFR 50.75(e)(1) is
acceptable to serve as the ``standby trust.'' This commenter concluded
that there is insufficient justification to require additional standby
trust agreements for financially sound companies well in advance of the
need.
Response: As stated in the proposed rule's preamble, the standby
trust is necessary to ensure that if the entity supplying financial
assurance is required to provide funds, the funds do not need to go
directly to the NRC, which would then be required to remit them to the
U.S. Treasury. For funds placed in a standby trust, the NRC can issue
instructions to the trustee to expend the funds on decommissioning
without facing the possibility of significant delays in carrying out
decommissioning. If the NRC has required the guarantor to fund the
standby trust, it will be because the parent or self-guarantor no
longer can pass the financial test and has not been able to obtain
alternative financial assurance in an approved form. Thus, because the
financial strength of the parent or self-guarantor at that point will
not be sufficient to pass the financial test, the argument about the
financial vulnerability of the guarantor versus the vulnerability of
the trustee is not relevant. Furthermore, the licensee should be able
to set up a standby trust with de minimis funding at relatively little
cost. The NRC is not aware of any reason that a nuclear power reactor
could not revise and use a tax-qualified or non-tax-qualified trust
fund that the reactor already has in place as its standby trust. Having
the trust in place from the beginning of the time that the licensee
relies on a guarantee for its financial assurance will ensure that if
the funds are needed for decommissioning, delays will not occur while
the trust is set up.
Comment H.9: Parent company guarantor is subject to Commission
orders.
One commenter noted that the proposed rule would require that what
is essentially a consent order be entered into by a parent company
seeking to provide a guarantee on behalf of its subsidiary.
Response: A parent company providing a parent company guarantee on
behalf of its subsidiary must agree to be subject to Commission orders
to make payments under the guarantee agreement. The NRC believes that
the parent company's agreement to be subject to such Commission orders
is tantamount to consent to NRC personal jurisdiction. The parent
company would be acknowledging that it is subject to NRC subject matter
jurisdiction, but it would not be waiving any hearing rights or
defenses.
Comment H.10: Joint and several liability for the full cost of
decommissioning.
Comment H.10: Several commenters objected to the proposed addition
of a new joint and several liability provision to Part 30 Appendix A.
The provision (designated as Section III.E in the proposed rule)
pertains to the parent company guarantee option that NRC licensees have
for providing financial assurance, and states as follows:
The guarantor must agree that it is jointly and severally liable
with the licensee for the full cost of decommissioning, and that if
the costs of decommissioning and termination of the license exceed
the amount guaranteed, the guarantor will pay such additional costs
that are not paid by the licensee.
The comments objecting to this provision are collectively
summarized in the following paragraphs.
Adopting the proposed requirement would effectively eliminate the
ability of power reactor licensees to combine use of the parent company
guarantee method with an external sinking fund method for providing
financial assurance. In 1998, NRC changed its rules to specifically
permit the current practice of using a parent guarantee in combination
with a trust fund balance, a practice which had been prohibited until
1998. Now, under existing 10 CFR 50.75(e)(1)(iii)(B), a parent
guarantee for a reactor licensee is expected to conform to the
``guarantee and test as contained in Appendix A to 10 CFR part 30.''
Thus, changing Appendix A to Part 30 impacts how 10 CFR 50.75(e)(1) is
applied with respect to approval of parent company guarantees, in which
a guaranty is typically provided in a limited specified amount in
combination with a trust fund or external sinking fund. For example, if
a licensee's trust balance is $350 million, and the NRC required amount
of assurance is $360 million, a parent company guarantee may be
provided in the amount of $10 million. The parent company is not
guaranteeing the full $360 million. The preamble of the proposed rule
published January 22, 2008 (73 FR 3818) states that no changes to 10
CFR 50.75(e) requirements were being proposed. Imposing the above joint
and several liability requirement on power reactors may thus be an
unintended consequence of this proposed change to Appendix A to 10 CFR
part 30.
Further examples were cited in which parent company guarantees have
been approved by the NRC for power reactor licensees, including Orders
in individual license transfer cases that do not provide for joint and
several liability between a parent guarantor and licensee. In one such
case, a company had acquired an ownership share in a reactor licensee,
and the NRC approved a guaranty (given by the parent company on behalf
of the acquiring company) to provide financial assurance for the
difference between the amount that was deposited in a decommissioning
trust account and the NRC's 10 CFR 50.75(c) formula amount for
decommissioning. Imposition of a new requirement for the parent to
assume joint and several liability above and beyond the amount of the
parent guarantee would be a fundamental change, after the fact, to the
terms of this transaction. There has not been any practical experience
demonstrating a need to impose such a joint and several liability
requirement on parent guarantors. The proposed rule's package provides
no specific evidence of any vulnerability in a parent guarantee
arrangement, only a brief reference to a ``potential'' vulnerability
(73 FR 3815). The NRC has not articulated a factual or legal basis
justifying this proposed change to Part 30.
The parent company guarantee is a legal commitment to cover costs
only up to the guarantee amount. If the proposed requirement is
adopted, financial auditors might consider it necessary to require the
guarantors to reflect the entire projected cost among their liabilities
on their financial statements. This could have the result of negatively
[[Page 35547]]
impacting corporate credit ratings and the guarantor's ability to
borrow.
Response: Between publication of the proposed rule and this final
rule, the NRC staff has reconsidered the joint and several liability
issue. For the reasons discussed below, and in consideration of the
comments summarized previously, the proposed joint and several
liability provision is not included as part of the final rule.
During the 1990's, the NRC took steps to address the deregulation
of electric utilities. As part of this effort, a ``Final Policy
Statement on the Restructuring and Economic Deregulation of the
Electric Utility Industry'' was published on August 19, 1997 (62 FR
44071). In responding to comments on joint ownership issues raised in
the draft policy statement, the NRC stated in the policy preamble as
follows:
The NRC recognizes that co-owners and co-licensees generally
divide costs and output from their facilities by using a
contractually-defined, pro rata share standard. The NRC has
implicitly accepted this practice in the past and believes that it
should continue to be the operative practice, but reserves the
right, in highly unusual situations where adequate protection of
public health and safety would be compromised if such action were
not taken, to consider imposing joint and several liability on co-
owners of more than de minimis shares when one or more co-owners
have defaulted. The NRC is addressing the issue of non-owner
operators separately. (62 FR 44074).
A proposed rule, ``Financial Assurance Requirements for
Decommissioning Nuclear Power Reactors,'' was published on September
10, 1997 (62 FR 47588) wherein the NRC stated in the preamble that:
The regulations do not explicitly impose joint liability on co-
owners and co-licensees. * * * [The NRC] sees no need to impose an
additional regulatory obligation of joint liability on co-owners or
co-licensees. (62 FR 47594).
In response to requested input on how to address the issue of
future funding shortfalls caused by underestimates of decommissioning
costs, the NRC noted in this preamble its authority to require power
reactor licensees to submit their current financial assurance
mechanisms for review and stated the following:
The Commission reserves the right to take the following steps in
order to assure a licensee's adequate accumulation of
decommissioning funds: Review, as needed, the rate of accumulation
of decommissioning funds; and either independently or in cooperation
with either the FERC and the State PUC's, take additional actions as
appropriate on a case-by-case-basis, including modification of a
licensee's schedule for accumulation of decommissioning funds. (62
FR 47597).
In the final rule published on September 22, 1998 (63 FR at 50465
et seq.), ``Financial Assurance Requirements for Decommissioning
Nuclear Power Reactors,'' the above-quoted language from the preamble
was codified as 10 CFR 50.75(e)(2), and this provision remains in place
today.
In the 1998 final rulemaking, rather than revising the Part 50
definition of ``electric utility'' as initially proposed, the NRC
instead amended 10 CFR 50.75 by replacing its references to electric
utilities with references to power reactor licensees. This action had
the effect of separating issues of whether applicants for reactor
licenses are financially qualified under 10 CFR 50.33(f) (where the
definition of ``electric utility'' is still relevant) from financial
assurance issues for decommissioning under 10 CFR 50.75 (63 FR 50466;
September 22, 1998).
In this latter area, the NRC endorsed the need for flexibility
given the ongoing restructuring of the electric power industry. For
example, situations could arise in which the plant operator has greater
financial resources than the plant owner, and the NRC therefore
declined to exempt operator licensees from financial assurance for
decommissioning requirements (63 FR 50468). Among the 1998 amendments,
10 CFR 50.75(e)(1)(vi) was added, and 10 CFR 50.75(e)(1) was otherwise
structured to provide a variety of approved financial assurance
mechanisms (63 FR 50469).
In 1998, the NRC similarly endorsed using combinations of financial
assurance methods. The 1998 rulemaking removed the regulatory
prohibition which did not allow use of either the self-guarantee or
parent company guarantee ``in combination with other mechanisms'' (but
to avoid double counting the same assets, the prohibition on using the
self-guarantee and parent company guarantee ``in combination with each
other'' was retained) (63 FR 50473). The combination of a self-
guarantee or parent company guarantee and an external sinking fund
``appears to provide a relatively low-cost means'' to provide financial
assurance while the reactor licensee continues to ``gradually fund
decommissioning costs over time.'' Accordingly, 10 CFR 50.75(e)(1) was
amended as described above, which ``eliminated the prohibition on
combining parent company or self-guarantees with external sinking
funds'' (63 FR 50473).
The proposed Decommissioning Planning rule was published for
comment on January 22, 2008 (73 FR 3812). The statement in the proposed
rule that no changes to 10 CFR 50.75(e) were being proposed was
accurate. But the staff failed to acknowledge the connection between 10
CFR 50.75(e)(1) and 10 CFR part 30, Appendix A. The existing parent
company guarantee provisions of 10 CFR 50.75(e)(1)(iii) reference 10
CFR part 30, Appendix A. Thus, adding a joint and several liability
provision to the Parent Company Guarantee requirements under Section
III of Appendix A to Part 30 would effectively change the 10 CFR
50.75(e)(1) requirements. No such change in requirements was intended,
and this was not part of the Decommissioning Planning rule's technical
basis.
The decision not to establish a joint and several liability
requirements should not be construed to mean that the NRC will never
seek to impose such liability on the parent corporation of an NRC
licensee. In unusual cases where the legal doctrine known as ``piercing
the corporate veil'' may be applicable, the NRC may pursue such a
remedy (as it has in the past), and the NRC's previous policies and
practices regarding joint and several liability are not being changed
at this time. Thus, in taking this rulemaking action, the NRC intends
no change in its position regarding its legal right to seek funds from
a licensee's corporate parent in appropriate, case-specific
circumstances.
Comment H.11: Issues when guarantor is in financial distress.
One commenter, supported by several additional commenters, argued
that the proposed rule is overly harsh in requiring payment of the
guarantee if a triggering event occurs. Options short of such payment
should include use of a third party letter of credit. The rules should
be revised to provide that upon NRC's determination that the guarantee
is no longer acceptable, it may be replaced by another acceptable form
of financial assurance.
Response: The current decommissioning financial assurance rules
allow a licensee that has previously relied upon a parent guarantee or
self-guarantee, but which no longer can do so because it or its parent
cannot pass the financial test, to obtain a replacement form of
financial assurance. However, if a guarantor's ability to pay its debts
is compromised, then the NRC may seek immediate payment of the entire
DCE, or a lesser amount if the guarantee is combined with another
financial assurance mechanism, to the standby trust. Under the existing
financial assurance requirements, a licensee must notify the NRC in
writing immediately following
[[Page 35548]]
the filing of a bankruptcy action. The revisions to the requirements
provide a more detailed description of the information to be provided
in such a situation, as previously set forth in guidance.
Comment H.12: Elimination of the escrow.
Several commenters supported retention of the escrow as a financial
assurance mechanism. One commenter argued that NRC lacked a clear basis
for eliminating the escrow, stating that the escrow account is a sound
financial instrument that is protected to the same extent as a trust
fund during bankruptcy. It stated that NRC's arguments that a dedicated
trust fund should be outside the reach of creditors in a bankruptcy
also would apply to a dedicated escrow account. The commenter noted
that in cases where the amount of decommissioning funding assurance is
relatively small (e.g., $100,000), use of an escrow account may be less
expensive and more appropriate, because the cost of trust arrangements
and annual trustee fees may be prohibitive. While eliminating the
escrow option would thus particularly impact small materials licensees,
small minority owners of power reactors during decommissioning may also
want to use an escrow account. Two other commenters said that NRC
should not limit the options (instruments) available for financial
assurance, and noted that Agreement State licensees were using escrows.
Response: As stated in the proposed rule's preamble, the NRC does
not agree that escrows are as secure as trust funds in the event of
bankruptcy (73 FR 3819), and the commenter's general statements to the
contrary are not persuasive. While the NRC agrees that a number of
financial assurance options should be available, the NRC must balance
cost and availability with other factors, including especially the
ability of the mechanism to provide funds for decommissioning when
needed. The NRC has evaluated the likelihood that an escrow could
survive the bankruptcy, insolvency, or financial incapacity of the
licensee, and concluded that in comparison to other financial
mechanisms like the trust, surety bond, or letter of credit, the escrow
is significantly less secure. The EPA decided in 1981 not to add the
escrow account as an approved financial assurance mechanism (January
12, 1981; 46 FR 2827). Based on these considerations, the NRC is
removing the escrow from the list of approved mechanisms in 10 CFR
30.35(f)(1), 40.36(e)(1), 70.25(f)(1), and 72.30(e)(1). Note that this
rulemaking does not eliminate use of escrows as an option for Part 50
licensees. Power reactor licensees are allowed to continue their use of
an escrow account, pursuant to 10 CFR 50.75(e), due to an unintentional
omission by the NRC to include paragraphs 10 CFR 50.75(e)(1), (h)(1),
and (h)(2) in the scope of the proposed rule text. The NRC plans to
propose that regulatory change in the future in a separate rulemaking.
Comment H.13: Elimination of the line of credit.
One commenter supported retention of the line of credit, noting
that while no NRC licensees were apparently using a line of credit for
financial assurance, such is not the case with respect to Agreement
State licensees.
Response: The NRC finds that a letter of credit--which will be
available for use--has many of the attributes in terms of cost and
availability as a line of credit, but provides greater security. A line
of credit can be cancelled quickly if certain financial conditions are
not met, while a letter of credit represents a more binding obligation
of the financial institution. Based on these considerations, and those
discussed in the proposed rule's preamble (73 FR 3826), the NRC is
removing the line of credit from the list of approved mechanisms in 10
CFR 30.35(f)(1), 40.36(e)(1), 50.75(e)(1)(iii)(A), 70.25(f)(1), and
72.30(e)(1).
Comment H.14: Allowing intangible assets in the determination of
total net worth.
Some commenters disagreed with the proposal to allow intangible
assets to be used in the determination of total net worth for purposes
of meeting the financial test applied to those seeking to use a parent
company or self-guarantee financial assurance method. Two commenters,
including CRCPD, pointed to recent overvaluing of bundled mortgage
assets and said that in light of this experience, the NRC should
reconsider allowing intangible assets to be used in conjunction with an
investment grade bond rating to meet financial test criteria.
In contrast, several commenters representing both materials
licensees and reactor licensees stated that consideration of intangible
assets should be allowed. One commenter noted that the NRC had already
granted an exemption to one licensee allowing a company with an
investment grade bond rating to consider intangible assets to meet the
10 times ratio test. The commenter noted that intangible assets
generally include assets such as goodwill, brand value, or patents and
that, as recognized in the proposed rule's preamble (73 FR 3812, 3825),
financial accounting standards issued after 1988 (when the NRC's
original decommissioning rule was adopted) provide objective methods
for valuation of such intangible assets. According to the commenter,
for a diversified technology and manufacturing company with a history
of acquisitions intangible, assets are a significant measure of the
financial stability of the company. Another commenter stated that
permitting the consideration of intangible assets is an appropriate
change in light of the development of objective methods to value
intangible assets.
Response: The NRC agrees with this latter set of comments. The NRC
has examined a sample of firm financial reports to ensure that
confirmatory information about intangible assets could be obtained from
publicly available quarterly and annual reports of publicly traded
firms. The NRC finds that bundled mortgage assets are sufficiently
dissimilar to intangible assets that the recent problems associated
with bundled mortgages do not provide a basis for withdrawing this
provision from the final rule. On the basis of these considerations and
those discussed in section II.N.6 of this document, the NRC will allow
the use of intangible assets.
Comment H.15: CPA evaluation of off-balance sheet transactions.
A commenter opposed the requirement that the CPA provide
information about off-balance sheet transactions, stating that it was
already difficult to meet the timetable for annual submittal of the
financial assurance report, which already must be reviewed by a CPA.
The commenter consulted with an independent accountant, who said that
meeting the additional requirements would take considerable more
evaluation time at a greater cost. According to the commenter, if the
proposed provision is adopted, the date for submission of financial
assurance reports will need to be extended by at least one month to
allow reasonable performance of the additional evaluation. Another
commenter argued that CPA certification was an unnecessary burden and
cost, because company officials are already required to submit
information that is complete and accurate in all material respects, and
this should provide adequate assurance that the financial information
is being evaluated by qualified company personnel.
Response: Firms may, as a means of reducing risk or achieving tax
minimization opportunities, account for certain kinds of transactions
off the company's balance sheet. Recent
[[Page 35549]]
experience has shown, however, that such off-balance sheet transactions
may constitute a source of risk to the firm. Information should be
readily available concerning such transactions, particularly for
publicly traded firms. Section 401(a) of the Sarbanes-Oxley Act of 2002
requires disclosure of off-balance sheet transactions that may be
material. In 2003, the Securities and Exchange Commission issued
regulations to implement Section 401(a). The AICPA has prepared
materials for company audit committees and accountants on the
identification and evaluation of such transactions. The NRC therefore
finds that the proposed requirement will be neither difficult nor
unduly expensive for licensees to meet. The NRC is therefore retaining
the proposed requirement in the final rule.
Comment H.16: CPA verification of bond ratings.
One commenter opposed the proposed new requirement for
certification by an independent CPA of a parent company's or a
licensee's bond ratings as part of showing that the criteria for using
a parent company guarantee or self guarantee are met (as set forth in
10 CFR part 30 Appendices A and C, respectively). The commenter stated
that this new requirement would impose an additional unnecessary burden
and cost. Company officials now are required to submit information that
is complete and accurate in all material respects (e.g., 10 CFR 30.10,
40.10, 50.5, 70.10, and 72.12). This should provide adequate assurance
that the specific bond rating is being evaluated by qualified company
personnel, and if the importance of such information needs to be
emphasized the rule could simply require a company to certify its
accuracy.
Response: In the past, those addressing the 10 CFR part 30
Appendices A and C financial test criteria have frequently failed to
correctly apply the requirement to use the current rating of the most
recent bond issuance. As stated in the proposed rule's preamble (73 FR
3826), the NRC finds that requiring an audit of the bond rating will
minimize the potential of future such errors being made. An independent
CPA is already required to audit the financial test data for a parent
company and a self guarantee, and adding the verification of a bond
rating to this existing audit is not a significant burden.
Comment H.17: Requirement to base DFP on unrestricted release.
Two commenters supported the proposal to require licensees to base
their DFPs and DCEs on unrestricted release, unless they can show the
ability to meet the restricted release criteria. Making early funding
arrangements to cover the increased costs of unrestricted release will
increase the likelihood that the funds will be available when needed.
Response: The NRC agrees with these comments. Based on these
considerations, and those discussed in the proposed rule's preamble (73
FR 3818), the NRC is retaining the proposed requirement in the final
rule.
Comment H.18: Basis for the cost estimate in the DFP.
One commenter argued that the DFP should include an estimate of the
funds necessary to pay licensing fees. The public should not have to
pay the costs of inspections, document reviews, license amendments, and
other NRC regulatory activities when a license is taken over by an
independent third party. Nor should a licensee be exempted for annual
fees that ordinarily would have been assessed. Recovery of these fees
should be part of any financial assurance.
Response: Applicable guidance (section A.3.17 of NUREG-1757, Volume
3, Appendix A, ML032471471) specifies that one of the miscellaneous
costs that should be included in the DCE is licensing fees. But making
this a regulatory requirement was not proposed in the draft rules
published for public comment. The NRC thus views this comment as
raising issues that are outside the scope of this rulemaking.
Comment H.19: Basis for certification.
Two commenters argued that DCEs should be based on a licensee's
actual radionuclide inventory, rather than on license limits. Both
stated that, for example, broad scope licensees may be licensed to
possess multi-Ci quantities of a broad range of radionuclides, but may
actually possess only limited quantities of radionuclides in a narrow
range. The DCEs should be based on the historic use as indicated in
licensee inventory records.
Response: This concern is addressed in part by existing regulations
in 10 CFR parts 30, 40, and 70, allowing licensees holding limited
amounts of licensed material to certify and to provide specified
amounts of financial assurance. Such licensees need not submit a DCE
and DFP to the NRC for approval. The NRC recently updated the
certification amounts in another rulemaking, and in the current
rulemaking is updating NUREG-1757, Volume 3, Appendix A, Attachment 1
to reflect those changes to certification amounts. However, the agency
did not propose in this rulemaking to revise the certification amounts
or the basis upon which a licensee determines the certification amount
it must provide. Therefore, the request to base the certification
amounts on actual radionuclide inventory is not within the scope of
this rulemaking.
Comment H.20: Use of third-party costs.
One commenter opposed the proposed requirement in Sec.
30.35(e)(1)(i)(A) that each DFP must be based on the cost of an
independent contractor to perform all decommissioning activities. It
stated that its industry had extensive experience using licensee staff
to perform decommissioning, and made use of custom-designed equipment
that only licensee staff was experienced in using safely. Use of
licensee staff, according to the commenter, provided the optimum cost
effective schedule.
Response: The rule is not intended to preclude the use of licensee
staff to carry out decommissioning activities. However, the financial
assurance requirements are designed to provide the funds necessary to
carry out decommissioning activities even when the licensee is no
longer present or financially able to do so and, as a consequence,
licensee staff are not available to perform decommissioning. Thus, the
NRC has recommended in guidance since 1988 that DFPs be based on the
use of third party contractors, which as the commenter notes are likely
to be more expensive than licensee staff, to ensure that if third party
contractors must be relied upon the necessary funds are available. The
proposed rule codifies the previously mentioned guidance.
Comment H.21: Timing of preparation of DFP and DCE.
One commenter stated that the proposed requirement in Sec.
30.35(e)(2) to submit a DFP at the time of license renewal, in addition
to submitting one at intervals not to exceed 3 years, would cause an
excessive frequency of submissions, because the license renewal
interval is typically 5 years. The commenter suggested that submission
of an updated DFP be required only at the time of license renewal, or
when a substantive change is necessary, or as specified as a license
condition. Of these alternatives, the commenter recommended specifying
the renewal period as a license condition, possibly on the order of 5
to 6 years. The commenter argued that improvements in operations tended
to cancel out inflation in the costs of decommissioning and waste
disposal.
Response: Frequent revisions are desirable to ensure that the DCE
remains accurate and reflects current prices for labor and materials,
even in periods of rapid inflation. On balance, the NRC
[[Page 35550]]
finds that the benefits of frequent revisions to the DCE outweigh the
costs, and that revisions should be submitted as part of a license
renewal request in addition to being submitted every 3 years.
Comment H.22: Status of DFPs for operating power reactors.
One commenter criticized the proposed rule on the basis that it
would require all types of licensees, except licensees of operating
power reactors, to submit a DFP to the NRC if during the site survey
the licensee detects radioactive contamination that would have to be
removed during decommissioning. Under the proposed rule, the licensee
would have a year after detection of the contamination to submit the
funding plan or update to the NRC. The commenter supports this concept,
and notes that it may in some instances serve as an incentive to
minimize contamination so that the licensee does not have to go to the
trouble and expense of preparing or updating a DFP and setting aside
additional decommissioning funds. But, the commenter claims, the flaw
in the NRC's proposed changes to 10 CFR 30.35, 40.36, 70.25, and 72.30
is the apparent exemption being granted to power reactor licensees.
According to the commenter, a survey of a power reactor site may detect
an amount of contamination that materially increases the cost of
decommissioning, yet the NRC proposes to give such a licensee the
option of doing nothing more than recording the information in the
plant's decommissioning planning records. This is not acceptable and is
not protective of long-term public safety.
Another commenter objected to the proposed rule's failure to
require full public reporting of the factors used to estimate
decommissioning costs and the NRC's failure to set a specific and
responsible deadline for licensee submission of DFPs incorporating
costs stemming from known subsurface contamination. The commenter urged
the NRC to require power reactor, dry cask storage, and materials
licensees to thoroughly survey their facilities for contamination
within six months of the final rule's effective date and submit a
survey report and a DFP within a year of that date. The commenter said
that the NRC also should require reactor licensees to submit an updated
DFP to the NRC within a year of discovery of site contamination.
Response: Existing 10 CFR part 50 regulations (e.g. Sec. 50.75 and
Sec. 50.82) contain a comprehensive set of decommissioning
requirements that are unique to power reactors. The NRC does not agree
that these requirements fail to adequately protect public health and
safety. Moreover, in the proposed rule's preamble, the NRC stated that
it was making no changes with respect to the obligated amount for power
reactor decommissioning financial assurance (73 FR 3818). Because the
proposed rule did not address the manner or amount of financial
assurance required for nuclear power reactors, comments seeking such
actions are outside the scope of this rulemaking.
Comment H.23: Potential redundancy in DFP requirements.
Two commenters stated that in proposed Sec. 72.30(b), paragraphs
(b)(1) and (b)(4) are partially redundant and should be merged. The
commenter also noted that the comment also related to the proposed
rules in 10 CFR parts 30, 40, and 70.
Response: The NRC disagrees that paragraphs (b)(1) and (b)(4)
should be merged. Section 72.30(b) previously read as follows:
``(b) The proposed decommissioning plan must also include a
decommissioning funding plan containing information on how
reasonable assurance will be provided that funds will be available
to decommission the ISFSI or MRS. This information must include a
cost estimate for decommissioning and a description of the method of
assuring funds for decommissioning from paragraph (c) of this
section, including means of adjusting cost estimates and associated
funding levels periodically over the life of the ISFSI or MRS.''
In the proposed rule, 10 CFR 72.30(b)'s first sentence has become
paragraph (b)(1), which states the overall general obligation regarding
the DFP. The proposed requirement in paragraph (b)(4) largely repeats
the text in the last sentence of the preceding paragraph, describing in
detail the method of assuring funds. Both paragraphs (b)(1) and (b)(4)
have independent utility--just as the two sentences in the former 10
CFR 72.30(b) had--so no change in the final rule will be made in
response to this comment.
Comment H.24: Implementation schedule for submission of revised
DFPs.
Several commenters addressed the implementation of the revised DCE
and DFP requirements. One commenter urged the NRC to allow at least 1
year for licensees to prepare and submit their first updated DFPs and
to state this submittal time in the final rule. Another suggested that
the NRC should consider a time frame of 5 years for implementation,
because existing sites would face significant costs retrofitting or
upgrading their facilities.
Response: The NRC has established the final rule effective date to
be eighteen months following publication of the final rule in the
Federal Register. This provides sufficient time to respond to the
revised DFP requirements. The NRC concluded that adoption of a period
as long as 5 or 6 years between revisions of the DFP could cause the
DCEs to fall substantially out of date.
Comment H.25: Special requirements for 10 CFR part 72 licensees.
Comment H.25.1: One commenter, supported by several additional
commenters, noted that proposed rule section 10 CFR 72.13 states that
only Sec. 72.30(e) and (f) apply to ISFSI general licensees (holders
of a Part 50 License). The commenter believes that the basis for
excluding ISFSI general licensees from compliance with the new
requirements in proposed rule Sec. 72.30(b), (c), and (g), was that
these licensees have a Part 50 license and, therefore, have accumulated
or have access to adequate funds for decommissioning. However, the
commenter argued that as written the proposed rule Sec. 72.30(b)(2)(i)
would require holders of a Part 50 license, who are also Part 72
specific licensees, to submit a separate DCE for their ISFSI. This
effectively prohibits the Part 50 licensee from continuing to include
in the Part 50 DCE, the ISFSI decommissioning costs and related
assumptions. The commenter urged the NRC to revise the proposed rule to
allow a Part 72 specific licensee, who also holds a Part 50 license, to
continue to include in the Part 50 DCE the ISFSI decommissioning costs
and related assumptions. The same commenter also noted that, as
written, the proposed rule Sec. 72.30(c) would require holders of a
Part 50 license, who are also Part 72 specific licensees, to report
their adjusted ISFSI DCE information to the NRC at intervals not to
exceed 3 years. Part 72 specific licensees that have a Part 50 license
normally have included costs for decommissioning of the ISFSI in their
Part 50 DCE. The proposed rule should be revised to allow a Part 72
specific licensee with a Part 50 license to continue to report their
ISFSI DCE information to the NRC in their Part 50 DCE submittal using
the Part 50 reporting interval.
Response: This rulemaking revises Sec. 72.30(b), and adds new
paragraphs (c), (d), and (g). Existing paragraph (c) is redesignated as
paragraph (e), and existing paragraph (d) is redesignated as paragraph
(f). Section 72.13(b) references the Part 72 provisions applicable to
those holding Part 72 specific licenses, and 10 CFR 72.13(c) references
the Part 72 provisions applicable to those holding Part 72 general
licenses. Thus, any amendments
[[Page 35551]]
to 10 CFR 72.30 need to be reflected in 10 CFR 72.13.
In considering this comment, the NRC realized that the proposed
changes to 10 CFR 72.30--as published in the January 22, 2008, proposed
rule--are not fully reflected in the discussion there of the proposed
amendments to 10 CFR 72.13. While the NRC correctly stated in its
January 2008 proposed rule that 10 CFR 72.13(c) was being amended to
reference 10 CFR 72.30(e) and (f)--reflecting the fact that existing 10
CFR 72.13(c) references 10 CFR 72.30(c) and (d)--the proposed revisions
to paragraph (b), and the addition of new paragraphs (c), (d), and (g)
to 10 CFR 72.30 are not referenced in the discussion of 10 CFR 72.13.
As discussed further in this document, the NRC is correcting the
inadvertent omissions in the final rule, and finds that Part 72 general
licensees were fairly on notice that they were subject to revisions in
DFP requirements due to the provisions of existing Sec. 72.30(d)(4).
As stated previously, existing 10 CFR 72.13(c) references 10 CFR
72.30(d). Thus, those holding Part 72 general licenses are subject to
the 10 CFR 72.30(d) requirements, including the DFP provisions
referenced in 10 CFR 72.30(d)(4). The new provisions in 10 CFR 72.30(b)
provide further details of what initial DFPs must include. New
paragraph (c) of 10 CFR 72.30 provides a set of timing provisions
describing when updated DFPs must be submitted for NRC approval. New
paragraph (d) of 10 CFR 72.30 is a special 1-year DFP update provision
based on 10 CFR 20.1501 survey results. Together, these new DFP
requirements, for purposes of applicability, should be treated the same
as the existing 10 CFR 72.30(d)(4) DFP provisions, as it would make no
sense to have some but not all DFP requirements be applicable to Part
72 general licensees.
Existing 10 CFR part 72 subpart K requirements already impose
similar requirements on Part 72 general licensees. Existing 10 CFR
72.218(a) references 10 CFR 50.54(bb), which is the functional
equivalent of a DFP provision in requiring a one-time report setting
forth the licensee's program to provide funding for management of spent
fuel during the time between when the reactor shuts down and when DOE
accepts title to and takes possession of the spent fuel. Existing 10
CFR 72.218(a) further requires that a plan be identified for removing
spent fuel from the reactor site in connection with decommissioning
activities. Part 72 general licensees are thus already subject to spent
fuel funding requirements. Similarly, 10 CFR 72.218(b) references 10
CFR 50.82, stating that such applications must describe how spent fuel
will eventually be removed from the reactor site.
A further reason that the new 10 CFR 72.30 provisions referenced
previously are applicable to Part 72 general licensees is the
connection that some of the provisions have (10 CFR 72.30(b)(2)(iii)
and (b)(5), and 72.30(d)) with 10 CFR part 20 requirements. Such
requirements are applicable to the Part 72 general licensees, because
Part 20 is applicable to all Part 50 licensees.
Accordingly, the final rule amends 10 CFR 72.13(c) so that it
correctly references 10 CFR 72.30(b), (c), (d), (e), and (f) as being
applicable to holders of Part 72 general licenses.
The requirements of new 10 CFR 72.30(g)--under which licensees must
replenish fund levels if decommissioning funds fall below specified
levels--are unlike the previously referenced DFP and related
requirements in that no similar provisions now exist in either Part 72
or Part 50. Additionally, the January 2008 proposed rule gave no notice
that any such provisions would be added to Part 50, and a Part 72
general licensee can only be subject to requirements that a Part 50
licensee is subject to. Accordingly, new 10 CFR 72.30(g) will be
applicable only to holders of Part 72 specific licenses. There is no
need to amend 10 CFR 72.13(b) in this regard, because it already
specifies that 10 CFR 72.30 requirements apply to holders of Part 72
specific licenses.
Comment H.25.2: Another commenter argued that the NRC had approved
partial exemptions from 10 CFR 72.30(c)(5) for Part 72 specific
licensees to continue to rely on 10 CFR 50.75(e)(1)(ii)(A) as their
exclusive mechanism for providing financial assurance for ISFSI
decommissioning, even after the reactor's Part 50 license was
terminated. This commenter also encouraged the NRC to allow Part 72
specific licensees that no longer have a power reactor license under
Part 50 to continue to use the methods of 10 CFR 50.75(b), (e), and (h)
without the need for an exemption. The commenter provided recommended
wording changes to 10 CFR 72.30(e)(5) to achieve this result.
Response: The NRC agrees with these comments and has made the
suggested changes to the final rule text in Sec. 72.30(e)(5), as
discussed further in Section IV of this document.
Comment H.25.3: A commenter stated that to meet the requirements of
this rule change, a Part 72 specific licensee will need a considerable
amount of time and resources to prepare this DFP and its detailed DCE
for submittal to the NRC. It is recommended that the NRC provide at
least one year following the effective date of the rule change for Part
72 specific licensees to prepare and submit their first updated DFP.
This submittal time should be stated in Sec. 72.30(c) of the final
rule.
Response: NRC agrees with this comment, except that there is no
need to specify a submittal time in Sec. 72.30(c). As explained in
Section II.S of this document, an eighteen-month implementation period
is provided for all of the final rule requirements (except for the
reporting provisions in 10 CFR 50.82(a)(8)(v) and (vii), which are due
by March 31, 2013).
Comment H.25.4: Several commenters cited the proposed provision in
Sec. 72.30(c) which states: ``If the amount of financial assurance
will be adjusted, this cannot be done until the updated decommissioning
funding plan is approved.'' The commenters asked why increases could
not occur before approval of the DFP. One commenter noted that Sec.
72.54(e) currently states that, ``the amount of financial assurance
must be increased, or may be decreased, as appropriate, to cover the
detailed cost estimate for decommissioning * * *'' and recommended that
the wording in the last sentence to proposed Sec. 72.30(c) be changed
to read as follows: ``If the amount of financial assurance will be
decreased, this cannot be done until the updated decommissioning
funding plan is approved.''
Response: The NRC agrees with the commenters that it needs to
approve only reductions in the amount of financial assurance in the
DFP. In conformance with this comment, the NRC has made changes to the
final rule text in Sec. 30.35(e)(2), Sec. 40.36(d)(2), Sec.
70.25(e)(2), and Sec. 72.30(c).
Comment H.25.5: A commenter noted that Part 72 does not have
provisions for an ISFSI licensee to certify to a prescribed amount of
financial assurance like Parts 30, 40, and 70 material licensees do.
Therefore, the Sec. 72.30(f)(4) wording, related to certifying to a
prescribed amount of financial assurance, should be deleted and Sec.
72.30(f)(4) reworded as: ``(4) Records of the cost estimate performed
for the decommissioning funding plan and records of the funding method
used for assuring funds are available for decommissioning.'' The same
commenter recommended changes in cross references in Part 72 to address
proposed rule changes.
Response: The commenter has identified a technical error in the
existing regulations which was not identified in the proposed rule.
Because
[[Page 35552]]
the suggested action to remove ``amount certified for decommissioning''
constitutes a technical correction, the NRC is making the correction in
Part 72, even though it was not previously proposed. The NRC is also
correcting cross references in the final rule.
Comment H.26: Monitor decommissioning fund investment balance.
Comment H.26.1: Several commenters disagreed with the proposed
regulations in 10 CFR 30.35(e)(1)(iv), 40.36(d)(1)(iv),
70.25(e)(1)(iv), and 72.30(b)(6) requiring that if there are changes to
the DCE, the amount of financial assurance must be revised to match the
cost estimate. One commenter agreed that licensees might consider
increasing decommissioning assurance when remediation costs exceed the
initial DCE but said the increase should not be a requirement. The
actual remediation costs could exceed DCEs due to a licensee deciding
for business purposes to choose an expensive method to remediate. This
might be to minimize a business interruption or to organize the
remediation around ongoing operations. Another commenter stated that
the new rules require that additional financial assurance must be
provided each year, if there is any shortfall in existing assurance
levels. An annual assessment of financial assurance is already required
by 10 CFR 50.75(b)(2), but the new rules would impose a firm
requirement, which would be less flexible than the NRC's current case-
by-case evaluation of the funding plans for shutdown reactors. To
assure that the new rule is not interpreted as a departure from current
practice, the commenter recommended that the NRC revise the language to
provide that either additional assurance be provided or that the
licensee submit an acceptable plan for obtaining additional assurance.
Response: Decommissioning financial assurance is required in the
amount of the DCE. Just as a licensee that has not used its financial
assurance proceeds wisely to remediate a site is still required to
provide financial assurance to complete the remediation work, a
licensee that decides to use a more expensive remediation method is
required to provide financial assurance to cover the entire cost
estimate. A plan for obtaining additional assurance is not considered
financial assurance, and allowing a licensee to rely on a mere plan may
result in significant delays and insufficient funds being available for
decommissioning.
Comment H.26.2: Another commenter stated that the new Sec.
72.30(g) of the proposed rule contains excessive requirements for
monitoring and correcting fund balances. It noted that Part 72 specific
licenses are normally 20-year licenses that will need to be renewed or
extended until the U.S. Department of Energy takes title to the spent
nuclear fuel. Based on continuing delays in the scheduled opening of
the Federal repository, a specific and realistic ISFSI facility
decommissioning date cannot be determined; however, it may not occur
until approximately 2030 or 2040. Based on such a long period of ISFSI
licensed operations, the requirements in Sec. 72.30(g) to monitor
decommissioning fund balances ``quarterly'' and ``at any time'' and to
increase fund balances ``within 5 days'' are very excessive. The
commenter recommended several changes to simplify the rule and reduce
an unnecessary burden on Part 72 specific licensees, while still
providing adequate assurance and information to the NRC. The commenter
stated that it was not clear why the requirements in both Sec.
72.30(g)(1) and (g)(2) are needed, because the required action
(increase fund balance within five days) and reporting requirement (30
day report to the NRC) are essentially the same. One monitoring
requirement that requires timely action and adequate reporting should
be sufficient. Based on the long duration of ISFSI operations, an
annual (versus quarterly) monitoring requirement and a 30 day (versus 5
days) requirement to increase the fund balance is considered more
reasonable and adequate. The commenter provided recommended wording
incorporating this recommendation. The commenter also suggested that
the NRC could, if it found it necessary to know when a licensee's fund
balance falls below 75 percent of the required amount, add a new
reporting provision. The commenter recommended language for such a
provision. Finally, the commenter recommended parallel changes to Sec.
30.35(h), Sec. 40.36(g), and Sec. 70.25(h).
Response: While ISFSIs may operate for many years, continuous
access to adequate financial funds is crucial if the creation of
additional legacy sites is to be avoided and funding shortfalls cannot
be tolerated. However, the NRC has considered the fact that some ISFSI
licensees hold both Part 72 general and specific licenses at a single
ISFSI site. With respect to providing financial assurance, Part 72
general licensees are subject to Part 50 requirements and are thus
required by 10 CFR 50.75(b)(2) to adjust their financial assurance
annually using a rate at least equal to formula adjustment factors in
10 CFR 50.75(c). As discussed previously in comment section H.25 of
this document, new 10 CFR 72.30(g) applies only to Part 72 specific
licensees. To achieve greater consistency in how Part 72 general and
specific licensees are regulated in this regard, the NRC is revising
proposed Sec. 72.30(g)(1) in this final rule to require that the fund
balance be monitored every calendar year, rather than every calendar
quarter.
The NRC considers ISFSI operations to be at a lesser risk of
becoming a legacy site compared to other materials licensees, because
many of the Part 72 licensees are also electric utilities and thus can
more easily gain access to decommissioning financial assurance funding
for their ISFSI operations. The proposed quarterly monitoring
requirement is being retained in this final rule for Parts 30, 40, and
70 licensees.
In further response to the comment, the NRC had decided to give
Parts 30, 40, 70, and 72 licensees 30 days--rather than the proposed 5
days--to increase the fund balances when specified funding shortfalls
exist. The process of obtaining access to funds may, in many cases,
take longer than 5 days, and such a short period may have generated an
excessive number of exemption requests for more time. Accordingly, the
proposed 5-day timing provisions are revised to 30 days in 10 CFR
30.35(h), 40.36(g), 70.25(h), and 72.30(g) of this final rule. Thus, if
a fund balance drops by more than 25 percent, the licensee must
increase the balance within 30 days of the occurrence, and the increase
must be sufficient to cover the cost of decommissioning. If a fund
balance drops by 25 percent or less, Parts 30, 40, and 70 licensees
must increase the balance within 30 days after the end of the calendar
quarter, and the increase must be sufficient to cover the cost of
decommissioning. In such cases, Part 72 licensees must increase the
balance within 30 days after the end of the calendar year, and the
increase must be sufficient to cover the cost of decommissioning.
Comment H.26.3: A commenter requested that the following contents
of the financial assurance status reports required by 10 CFR
50.82(a)(8)(v) and (vii) be made available to the public: (1) The
amount of funds accumulated to cover the current cost of managing spent
fuel, (2) The projected costs of spent fuel management until the
Department of Energy takes title to the spent fuel, and (3) The plan to
obtain additional spent fuel management funds if the accumulated funds
do not cover the projected costs. Potential delays in the availability
of a long-term repository, issues of repository capacity, and the
[[Page 35553]]
consequent likelihood of long-term storage of spent fuel at reactor
sites make this information particularly important. This commenter also
stated that the power reactor decommissioning fund should never be
allowed to pay for onsite spent fuel storage.
Response: The financial assurance status report, due annually from
the power reactor licensees under the proposed requirements in 10 CFR
50.82(a)(8)(v) and (vii), will be subject to the public disclosure
requirements in 10 CFR 2.390. If a power reactor licensee considers the
submitted information to be proprietary, the licensee must meet the
requirements in 10 CFR 2.390(b) to support withholding the report from
public disclosure. Absent such a showing, the report will be made
publicly available in ADAMS. As stated by the commenter, this final
rule requires in 10 CFR 72.30(g) that decommissioning financial
assurance funds must be used only for decommissioning activities which
would not include onsite spent fuel storage operations.
Comment H.27: Replenish funds if an external sinking fund is used.
Comment H.27.1: On the proposed requirements to track the level of
decommissioning financial assurance and to replenish the funds if, as a
result of market fluctuations or other causes, they fall below certain
specified levels, almost all of the comments addressed the implications
of the requirement for ISFSI's and related to 10 CFR 72.30(g) in
particular. One commenter noted that the new Sec. 72.30(g)
requirements, which are consistent with the new requirements being
added to Sec. 30.35(h), Sec. 40.36(g), and Sec. 70.25(h) for other
material licensees, would apply only to Part 72 specific licensees.
These new requirements are focused on the portion of a licensee's
decommissioning funds that have been prepaid or collected and are
subject to market variations. The licensee's funds associated with the
prepayment and external sinking fund methods will be invested and may
be subject to market variations. Because the prepayment method is
expected to be fully funded at all times, the commenter believed that
the proposed wording would work for that mechanism. However, in the
case of the external sinking fund method, the fund is not required to
be fully funded until the final facility decommissioning is expected to
begin. Section 72.30(b) of the proposed rule would require a Part 72
specific licensee to have an NRC-approved DFP for their external
sinking fund and to make deposits into the fund at least annually.
Parts 30, 40, and 70 material licensees may also use an external
sinking fund and could have an NRC-approved DFP. The proposed wording
in Sec. 30.35(h), Sec. 40.36(g), Sec. 70.25(h), and Sec. 72.30(g)
does not recognize that a licensee's fund balance for their external
sinking fund is not required to contain ``the amount necessary to cover
the cost of decommissioning'' until the final facility decommissioning
begins. As these proposed rule sections are currently worded, on the
effective date of the rule change, some licensees would be required to
fully fund their external sinking fund to cover the cost of
decommissioning within 5 days and make the 30 day report to the NRC.
The commenter therefore recommended that wording similar to the
following be added to the proposed Sec. 72.30(g)(1) and (g)(2) and the
corresponding sections in Parts 30, 40, and 70: ``If * * *, the fund
balance is below the amount necessary to cover the cost of
decommissioning, or in the case of an external sinking fund the amount
required at that point in time by the approved funding plan, the
licensee must increase the balance to provide the required amount of
funds. * * *''
Response: If funds from a Part 50 external sinking fund are to be
used for Part 72 decommissioning, the funds must be reported separately
under 10 CFR 72.30 for the ISFSI and held in a separate subaccount and
this subaccount must be identified for spent fuel. The certification
for an external sinking fund will include a calculation section in
which the licensee can take credit for future contributions that are
provided by ratepayers and a 2 percent growth rate for the estimated
number of years remaining prior to title transfer and possession of the
fuel by DOE. For the Part 72 specific licensee, if this calculation
yields anything lower than the total cost estimate, than the fund
balance must be increased. If the fund balance is underfunded by more
than 25 percent, the Part 72 specific licensee must fully fund the
balance within 30 days of when such underfunding occurs. If the fund
balance is underfunded by 25 percent or less, than the Part 72 specific
licensee must fully fund the balance within 30 days after the end of
the calendar year.
Comment H.27.2: A commenter stated that the proposed rule was
appropriate only for prepaid funds and should not be applied to ISFSI
general licensee facilities using external sinking funds. The commenter
also argued that the quarterly monitoring requirements and the
reporting requirements were very excessive for ISFSI facilities, which
may not be decommissioned until 2030 or 2040. The commenter stated that
the rule should specify the NRC position/office which should receive
reports and whether a written report is required.
Response: The NRC partially agrees with these comments. The
reporting requirements in Sec. 72.30(b), (c), and (d) apply to Part 72
specific and general licensees. Likewise, the financial assurance
requirements in Sec. 72.30(e), the maintenance of records important
for decommissioning, and the Sec. 72.30(f) DCE funding plan
requirements, apply to Part 72 specific and general licensees. The
final rule language in Sec. 72.30(e)(5), allowing use of the external
sinking fund in 10 CFR 50.75(e)(1)(ii) as the exclusive funding method,
applies to Part 72 licensees who hold a 10 CFR part 50 power reactor
license and to Part 72 specific licensees who meet the Part 50
definition of an ``electric utility.'' Regarding the reporting
requirements in Sec. 72.30(g), which apply to Part 72 specific
licensees, if the decommissioning fund balance needs to be replenished,
the required written report must be submitted to the Director, Office
of Federal and State Materials and Environmental Management Programs.
The NRC is not adopting the commenter's suggestions regarding the
timing of required reports, finding that the quarterly monitoring of
funds is a prudent business practice. Also, the NRC considers the
annual reporting of a financial status report to be a reasonable burden
as part of a licensee's responsibility to maintain an accurate DFP.
Comment H.27.3: Two commenters supported the changes to Sec.
72.30, because they address the concern that--depending on future NRC
actions--spent fuel could remain in dry cask storage at reactors for
decades, providing the potential for additional adverse environmental
impacts whose remediation costs must be assessed and addressed in the
decommissioning plan. This commenter noted that the proposed rule
appears to require more specific reporting requirements for ISFSI
licensees than would be required for power reactor licensees.
Response: The NRC shares the commenter's concern about the length
of time spent fuel may need to be managed at the ISFSI facility. The
NRC provides oversight of the facility operations and decommissioning
to prevent adverse environmental impacts. The commenter is correct that
the content of the spent fuel financial status report to be required by
10 CFR 50.82(a)(8)(vii) differs from the content of decommissioning
financial assurance reports required of power reactor licensees.
[[Page 35554]]
Comment H.28: Support for more detail in the DCE.
Comment H.28.1: Two commenters supported the proposed requirements
in 10 CFR 30.35(e)(2), 40.36(d)(2), 70.25(e)(2), and 72.30(c) requiring
the licensee to address how routine spills and accidental releases
affect the cost of decommissioning. They believed that this requirement
would be a useful reinforcement to the requirements in Sec. 40.36(f)
and Sec. 20.1101(b), which had been interpreted to require reducing
dose to a receptor, but not to be drivers for environmental monitoring
or remediation, particularly if the presumed receptor was not drinking
water from the site. Historically, according to these commenters, sites
were not characterized until shortly before closure, and routine spills
were not considered significant. The commenters believed that the
identification of source terms during operations would reduce the
possibility of underestimation of public dose. In contrast, one
commenter argued that although current regulations do not specifically
require a licensee to increase its decommissioning financial assurance
following a spill if the licensee decides to defer remediation to a
later date, this requirement is covered by broader requirements,
including ALARA provisions and the cradle-to-grave principle in
managing licensed materials. The commenter pointed out that these
provisions can be written into the section of the DFP that specifies
how the cost estimate and funding assurance are maintained and kept
current. Also, the commenter stated that the plan will typically have a
25 percent contingency for unexpected cost increases that would cover
all but the most unusual spill.
Response: The NRC agrees that the documentation of spills and
accidental releases will improve the basis for the DCE, and the
identification of source terms at the site during operations will help
to reduce the possibility of underestimation of public dose due as a
result of contaminant migration beyond the licensed site. The NRC
regulations allow some discretion in the licensee response to a spill
or leak that is not an immediate safety concern. If the licensee
chooses to defer remediation to a later date in such a situation, then
the licensee must document the release in its records important for
decommissioning and the added cost, if any, to remediate the spill or
leak which must be included in the cost estimate, DFP, and financial
instruments used as decommissioning financial assurance.
Comment H.28.2: One commenter stated that the NRC should ensure
that there is a direct correlation between decontamination costs and
decommissioning funding assurances. To implement this, the NRC should
require bi-annual funding reports and a link between the changes
proposed to 10 CFR 20.1501 and the DFP required by 10 CFR 50.75(g).
Response: The NRC agrees with the commenter regarding a direct
correlation between the DCE and the financial assurance provided by the
licensee. New 10 CFR 20.1501(b) provides a link to the existing 10 CFR
50.75(g) provisions in requiring that survey records of subsurface
residual radioactivity be kept with records important for
decommissioning.
Comment H.29: Reporting requirements for shut down power reactors.
Comment H.29.1: One commenter interpreted the proposed 10 CFR
50.82(a)(8) reporting requirements as also creating a requirement that
an operating utility with a shut-down reactor that funds its spent fuel
storage costs from its operating budget, would instead now need to set
aside large amounts of dedicated funding to pre-fund the costs of spent
fuel storage.
Response: The proposed changes in 10 CFR 50.82(a)(8) specify
increased reporting requirements for all licensees with a power reactor
in decommissioning status. These reporting requirements do not change
in any way the existing 10 CFR 50.75 requirements to prepay
decommissioning financial assurance or the existing 10 CFR 50.54(bb)
requirements to provide funding for the management of irradiated fuel
until title and possession of the fuel is transferred to the Secretary
of Energy.
Comment H.29.2: A commenter stated that it is not clear what is
meant by ``the decommissioning criteria upon which the estimate is
based'' in proposed 10 CFR 50.82(a)(8)(v)(B).
Response: The proposed 10 CFR 50.82(a)(8)(v)(B) is a required
element of the annual financial assurance status report to be submitted
by shutdown power reactors, requiring such licensees to update DCEs.
Such estimates must reflect whether the site is planned to be released
for unrestricted use, or is planned to be released under restricted
conditions. Both of these release options are available--based on how
the term ``decommission'' is defined in Sec. 50.2--and the option
chosen will affect decommissioning costs.
Comment H.29.3: One commenter argued that the proposed 10 CFR
50.82(a)(8)(vii) reporting requirement regarding spent fuel management
costs was not necessary for facilities that are owned by operating
utilities with a significant electric sales income and who have access
to rate relief. According to this commenter, for sites owned by an
operating utility, the annual expense for nuclear fuel storage will be
a very small percentage of the utility's total operating budget and
would be included in rate relief proceedings.
Response: Regardless of company size, all licensees must
demonstrate and provide adequate financial assurance for
decommissioning. For facilities that are owned by an electric utility,
as defined in 10 CFR 50.2, this demonstration (described in NUREG-1757,
Volume 3, Revision 1 to be released shortly after the final rule) may
include a calculation for an external sinking fund in which the
licensee can take credit for future contributions that are provided by
ratepayers and a 2 percent growth rate for the estimated number of
years remaining prior to DOE taking title and possession of the spent
fuel. The NRC agrees that the annual expense and future contributions
for nuclear fuel storage will be a small percentage of an electric
utility's total operating budget.
Comment H.29.4: A commenter noted some technical obstacles to the
proposed reporting under 10 CFR 50.82(a)(8). First, because DOE has
provided no reliable basis for determining when it will begin to
perform and complete its obligation to remove the nation's used nuclear
fuel from individual facilities or take title to the fuel, the total
cost of fuel storage cannot be estimated. The total cost is the
summation of annual expenses over time, and because there is a lack of
any definitive information on the duration of the storage periods, it
is unreasonable to require the owners to pay up-front a projected
unknown total cost of nuclear fuel storage. Second, under the DOE
Standard Contract and legal decisions, DOE is liable to pay for the
storage cost for nuclear fuel. Ongoing and possible future litigation
will eventually determine the schedule and amounts for which the DOE is
responsible. For permanently shutdown plants, it is the DOE, not the
utility, which should be required to provide financial assurance for
fuel storage.
Response: The extent to which the DOE may be responsible for onsite
spent fuel storage costs is an issue that is outside the scope of this
rulemaking. Moreover, the NRC disagrees with the claim that total spent
fuel storage costs cannot be estimated. Similar cost estimates for
decommissioning are required by existing regulations (10 CFR
50.82(a)(8)(iii)), and have duly been submitted by NRC licensees. While
[[Page 35555]]
estimates of future costs will always be based on uncertainties to some
extent, this does not mean that no estimate at all can be made. This is
as true for estimated spent fuel storage costs as for any other
estimated cost.
Comment H.29.5: One commenter argued that the NRC is imposing a new
annual reporting requirement on shutdown reactors that requires a
higher level of detail than the annual decommissioning funding status
reports currently required under 10 CFR 50.75(f). It is not clear why
the existing reports are not adequate, but at a minimum, there should
not be duplicative requirements. If the NRC adopts this provision, it
should remove the reporting requirement under 10 CFR 50.75(f). To the
extent that the NRC's desire is to ensure that appropriate funds will
be available by reviewing the historical expenditures, power reactor
licensees are able to provide this information. However, it is unlikely
to be useful other than for interest's sake, and further use of this
data to predict future decommissioning costs may be suspect. The value
of the reporting requirement does not justify burden upon licensees,
because only a few plants have decommissioned to unrestricted release
and this data does not constitute a representative sample. Licensees
will be unduly challenged by rate regulators, financial auditors and
other stakeholders having opposing interests as they relate to funding
decommissioning. The existing NRC minimum funding formulae provide
stability in rate regulation prior to retirement. Estimates of only
forward-looking expenses have provided the same stability for retired
units. This section should be focused only on forward-looking needs to
meet decommissioning liabilities.
Response: The final rule 10 CFR 50.82(a)(8)(v) reporting
requirements do not duplicate the existing 10 CFR 50.75(f) reporting
requirements. As stated in the proposed rule's preamble (73 FR 3828;
January 22, 2008), the reports under 10 CFR 50.75(f) do not require
information on the actual amount of funds spent on decommissioning,
whereas such information is required by proposed 10 CFR 50.82(a)(8)(v).
The new reporting requirements are not intended for comparison between
different power reactor decommissioning costs. The purpose of obtaining
the information reported under 10 CFR 50.82(a)(8)(v) is to identify
actual expenditures at a particular site and projected costs to
complete the decommissioning.
I. Draft Regulatory Guidance
Comment I.1: The survey and monitoring guidance goes beyond what is
required.
Several commenters criticized the draft guidance on subsurface
residual radioactivity. They argued that the guidance went
substantially beyond what the rule required with respect to site
surveys, the timeframe for remediation, retrofitting facilities to
eliminate sources of subsurface residual radioactivity, monitoring, use
of MARSSIM, and remediation during operations. One commenter, who
provided detailed comments on many parts of the guidance, stated that
it described actions that were not necessary to protect public health,
safety, and the environment.
Response: All comments were reviewed and considered by the agency
in preparing DG-4014 to support this final rule.
Comment I.2: The survey and monitoring guidance requires prompt
remediation.
A commenter on the draft guidance on subsurface residual
radioactivity argued that, as written, the remediation language in the
draft regulatory guidance document could have the unintended
consequence of disrupting safe plant operation, without regard to
actual health or environmental impacts. Another commenter, supported by
several additional commenters, argued that the emphasis on ``prompt''
remediation, found especially in the draft guidance, of a leak or spill
is unreasonable and is not always practically achievable. Licensees
should be given the flexibility to define the appropriate timeframe for
clean-up of a spill or leak, taking into consideration ALARA, realistic
exposure pathways, and the site-specific soil and groundwater
characteristics. Another commenter said it makes little sense to
require remediation during the operation of the site. The commenter
noted that the draft guidance encourages licensees to perform cost-
effectiveness analyses of prompt versus delayed clean up of residual
radioactivity at the site.
Response: The NRC is aware that in some cases subsurface residual
radioactivity is located where the only feasible remediation measures
that can be taken without disrupting safe plant operation must occur at
the time of final plant decommissioning. The NRC does not intend that
licensees adopt remediation measures that will disrupt safe plant
operation. The topic of cleanup activities during facility operations,
especially in the context of soil contamination, is very dependent on
site-specific conditions. In response to the commenters, the NRC has
applied a performance-based approach in the DG-4014 survey and
monitoring guidance released for public comment to support this final
rule. Small leaks and spills that have no impact on decommissioning
planning are not within the scope of the guidance, but the larger leaks
and spills to the subsurface that could affect decommissioning planning
are addressed in the guidance. The NRC has placed in DG-4014 a
discussion on different approaches that may be used by licensees to
determine the cost-effectiveness of prompt compared to deferred
cleanup. Licensees should become familiar with this guidance, which can
help them to develop reasoned explanations to support deferral of
cleanup activities where there has been a significant amount of
subsurface contamination.
Comment I.3: The survey and monitoring guidance should clarify
cost-effectiveness calculations.
One commenter stated that the cost-effectiveness calculation
recommended in the guidance will nearly always show that it is more
cost-effective to wait until a site has ceased operations to dispose of
contaminated soil or conduct any remediation. The proposed regulations
would require an evaluation of subsurface contamination based on future
decommissioning exposure scenarios, even though no foreseeable
operating exposure limits would be exceeded. The guidance describes
methods to conduct such evaluations.
Response: The NRC agrees with this comment that it is likely that
licensees will decide to remediate soil contamination during
decommissioning rather than during operations, although this is a site-
specific and licensee-specific decision. The NRC believes it is
beneficial for licensees to remediate certain types of contaminating
events on a timely basis. This certainly includes contaminating events
that have the potential to reach a groundwater pathway or that are
cost-effective to perform earlier rather than later as determined by an
analysis performed by the licensee, as recommended in DG-4014.
Comment I.4: The survey and monitoring guidance is contrary to
Commission direction.
A commenter stated that that the draft guidance's references to
MARSSIM for ``subsurface'' survey requirements, documentation and
quality assurance/quality control requirements are contrary to the
Commission's SRM in SECY-03-0069 regarding MARSSIM.
[[Page 35556]]
Response: This final rule is not requiring any MARSSIM submittals.
The optional use of the MARSSIM screening values is discussed in DG-
4014, along with several other low cost approaches as a means for the
licensee to apply sampling concentration results to dose based results.
The dose-based results are the basis by which the facility will be
evaluated for license termination.
Comment I.5: The financial assurance guidance needs to clarify
acceptable methods for Part 72 licensees.
The comments on the revisions to NUREG-1757, Volume 3, raised
questions concerning how 10 CFR part 72 licensees, and in particular
specific licensees and general licensees, should implement the proposed
rules. The commenters also suggested renumbering of certain sections of
the guidance and pointed out possible typographical errors.
Response: All comments were reviewed and considered by the agency
in preparing Revision 1 to NUREG-1757, Volume 3 to be released shortly
after this final rule. Additional sections have been added to the
guidance document for the Part 72 licensees.
J. OMB Supporting Statement
In comments on the OMB Supporting Statement submitted to OMB, NEI
argued that the NRC's justification for imposing new information
collection requirements was flawed, because the proposed rule,
including the information collection requirements, was designed to
address problems that no longer existed because of intervening
regulatory developments. In addition, the NRC enforcement and oversight
could address any problems more efficiently. Secondly, NEI argued that
the proposed information collection and recordkeeping requirements are
not justified, because current reporting and recordkeeping requirements
are adequate, and any necessary clarification can be achieved in a less
burdensome manner. NEI therefore concluded that the requirements of the
Paperwork Reduction Act were not met, because the required balancing of
the burden against the need for the information showed that the burden
was excessive. NEI argued that the estimate of the burden did not
adequately include costs of new equipment, physical containment
barriers, procedures, and training, which it suggested might total as
much as $500 thousand to $1 million per nuclear power reactor. NEI did
not agree with the NRC's conclusion that the voluntary implementation
of the nuclear industry's GPI will make it unnecessary for nuclear
power reactors to take any additional significant steps to comply with
the reporting and recordkeeping requirements of these rules.
In comments on the January 2008 proposed rule, NEI again addressed
only the reporting and recordkeeping requirements associated with 10
CFR 20.1406 and 20.1501. NEI noted that the estimate for the burden for
Part 50 implementation of those two provisions was zero. NEI then
essentially summarized its previous comments on the OMB Supporting
Statement, although it also addressed in the same comment proposed
implementing guidance. NEI argued that the burden estimate in the
supporting statement for implementation of the Part 20 requirements by
nuclear power reactors was ``grossly inaccurate'' because as ``an
industry, nuclear power plants have spent thousands of person hours and
millions of dollars implementing the Industry Groundwater Protection
Initiative. Given that the GPI is a voluntary effort and, to some
degree, adopts a more graded approach to reevaluation of a site's
hydrogeology, as an example, the amount of time and resources necessary
to implement the proposed rule using the draft guidance are
significantly greater than zero hours.''
Response: The NRC, after careful consideration of the comments, has
concluded that the commenters are correct. The time that certain
licensees will need to spend in order to determine whether a particular
facility is affected by the final rule's Part 20 regulations should
have been included as part of the paperwork burden. Therefore, the
burden estimate has been increased significantly for new Sec.
20.1406(c) and amended Sec. 20.1501(a) to account for the time
necessary to read the regulations, determine their impact, if any, on
the licensee, and prepare a record of this activity. However, the NRC
does not agree with the commenter that time and other resources used to
implement the preexisting voluntary industry groundwater initiative are
properly attributable as reporting or recordkeeping burden for this
rule. Although the NRC received no public comments on the reporting and
recordkeeping requirements in the proposed rule for 10 CFR parts 30,
40, 70, or 72, it has reviewed all of those provisions and in a few
instances increased the burden estimates for particular sections of
those rules. Finally, the NRC has added an estimate of the burden for
10 CFR part 50 licensees of changes to the financial test requirements
in 10 CFR part 30, which are cross-referenced in 10 CFR 50.75.
K. Agreement State Compatibility
Two comments were received on the Agreement State Compatibility
table published with the Decommissioning Planning proposed rule. One of
the commenters, an organization representing multiple states, stated
that it had no issues with the compatibility designations in the
proposed rule. Another commenter stated that the Compatibility Table
for the final rule should be expanded to include 10 CFR 20.1401 and
20.1402 and that these sections should be assigned Agreement State
Compatibility Category B instead of the existing Category C. The
commenter believes this change is needed to eliminate inconsistency in
regulatory approach in the Agreement States. The commenter believes
that some states, using the Compatibility Category C guideline to adopt
the NRC ``essential objectives,'' are regulating site termination and
release under schemes that are unreasonable and impractical, resulting
in excessive burden on licensees without measurable benefit to the
public or the environment.
Response: The commenter is correct that 10 CFR 20.1401 and 20.1402
are both assigned Compatibility Category C. But those two sections were
not included in the technical basis supporting the Decommissioning
Planning proposed rule, and no changes to these regulations were
proposed. The NRC does not have a technical basis to support a
Compatibility Category change for these regulations, and the change
request is outside the scope of this rulemaking. Accordingly, the NRC
is making no change in this final rule to the compatibility
designations for 10 CFR 20.1401 and 20.1402.
V. Discussion of Final Amendments by Section
Section 20.1403 Criteria for License Termination Under Restricted
Conditions
This rulemaking (1) amends Sec. 20.1403(c)(1) to require financial
assurance funds to be placed into a trust segregated from the
licensee's assets and outside the licensee's administrative control;
and (2) eliminates the licensee's option to use other prepayment
financial mechanisms, such as the escrow account, government fund,
certificate of deposit, or deposit of government securities. This
subsection is further amended to require that the initial amount of the
trust fund established for long-term care and maintenance be based on a
conservative assumption of a 1 percent annual real rate of return on
investment.
[[Page 35557]]
The current Sec. 20.1403(c)(2) is deleted to remove the licensee's
option to use a surety method, insurance, or other guarantee method to
provide financial assurance for a restricted release site. The
provisions for government entities to provide financial assurance for
long-term control and maintenance contained in existing Sec.
20.1403(c)(3) and (4) is retained but redesignated as Sec.
20.1403(c)(2) and (3).
Section 20.1404 Alternate Criteria for License Termination
This rulemaking adds a new Sec. 20.1404(a)(5) specifying a fifth
criterion that the NRC must consider in determining whether to
terminate a license under alternate site release criteria. This new
fifth criterion pertains to whether the licensee has provided
sufficient financial assurance in the form of a trust fund to enable an
independent third party, including a government custodian of a site, to
assume and carry out responsibilities for any necessary control and
maintenance of the site.
Section 20.1406 Minimization of Contamination
This rulemaking adds a new Sec. 20.1406(c) to require licensees,
to the extent practical, to conduct operations to minimize the
introduction of residual radioactivity into the site, including the
subsurface. The term ``residual radioactivity,'' defined in 10 CFR part
20, identifies the type and scope of radioactive material that must be
considered by licensees to effectively plan for decommissioning
activities during facility operations. The term includes licensed and
unlicensed radioactive material.
Section 20.1501 General
This rulemaking amends Sec. 20.1501(a) to specify that licensee
survey requirements include consideration of residual radioactivity,
conforming to the new Sec. 20.1406(c). The linkage between new Sec.
20.1406(c) and amended Sec. 20.1501(a) requires that surveys be
performed if there is reason to believe that significant subsurface
contamination is present which constitutes a potential radiological
hazard.
This rulemaking adds a new Sec. 20.1501(b) to require licensees to
maintain records from surveys describing the location and amount of
subsurface residual radioactivity identified at the site with records
important for decommissioning, in Sec. Sec. 30.35(g), 40.36(f),
50.75(g), 70.25(g), or 72.30(d), as applicable . Existing Sec.
20.1501(b) has been redesignated as paragraph (c), and existing Sec.
20.1501(c) has been redesignated as paragraph (d).
Section 30.34 Terms and Conditions of Licenses
Existing Sec. 30.34(b) has been redesignated as paragraph (b)(1)
and a new paragraph (b)(2) has been added to require that an
application for license transfer must include the proposed transferee's
identity, its technical and financial qualifications, and a showing
that it will be able to provide adequate financial assurance for
decommissioning.
Existing Sec. 40.46 and Sec. 70.36 contain parallel provisions to
those in Sec. 30.34(b). Sections 40.46 and 70.36 have been
redesignated as Sec. 40.46(a) and Sec. 70.36(a), respectively. New
Sec. 40.46(b) and Sec. 70.36(b) parallel the new Sec. 30.34(b)(2)
provisions described previously.
Section 30.35 Financial Assurance and Recordkeeping for Decommissioning
A new paragraph (c)(6) has been added to 10 CFR 30.35 (and parallel
Sec. 40.36(c)(5) and Sec. 70.25(c)(5)), to reflect the changes being
made to the Sec. 20.1501(a) survey requirements. If these surveys
detect residual radioactivity at a site at levels that would, if left
uncorrected, prevent the site from meeting the Sec. 20.1402 criteria
for unrestricted use, the licensee must submit a DFP within one year of
when the survey is complete.
Existing Sec. 30.35(e) (and in parallel Sec. 40.36(d)(1) and
(d)(2), Part 40 Appendix A, Sec. 70.25(e)(1) and (e)(2), and Sec.
72.30(b) and (c)) have been amended to contain new paragraphs (e)(1)
and (e)(2). Section 30.35(e)(1) requires that each DFP submitted for
review and approval must contain a DCE based on three cost components.
Two of the cost components (a dollar amount adequate to cover the cost
of an independent contractor to perform all decommissioning activities,
and an adequate contingency factor) are described in existing guidance.
The new cost component is an estimate of the volume of onsite
subsurface material containing residual radioactivity that will require
remediation to meet the decommissioning criteria. Additionally, the DCE
must be based on the cost of meeting the Sec. 20.1402 criteria for
unrestricted use unless it can be adequately shown that the
requirements of Sec. 20.1403 will be met.
A new provision, Sec. 30.35(e)(1)(ii), requires the licensee to
identify and justify the basis for all key assumptions underlying the
DCE.
Section 30.35(e)(1)(iii) retains the existing Sec. 30.35(e)
provision requiring a description of the method of assuring funds for
decommissioning. Section 30.35(e)(1)(iv) retains the existing Sec.
30.35(e) provision requiring a certification by the licensee that
financial assurance for decommissioning has been provided in the amount
of the DCE. Section 30.35(e)(1)(v) retains the existing Sec. 30.35(e)
requirement that the DFP include ``a signed original of the financial
instrument'' being used to provide financial assurance, if it has not
been previously submitted and accepted as the financial instrument to
cover the cost estimate for decommissioning.
New Sec. 30.35(e)(2) requires that the DFP be submitted at the
time of license renewal and at intervals not exceeding 3 years with
adjustments as necessary to account for changes in costs and the extent
of contamination. The updated DFP must specifically consider the effect
of the following events on the cost of decommissioning:
Spills of radioactive material producing additional
residual radioactivity in onsite subsurface material,
Waste inventory increasing above the amount previously
estimated,
Waste disposal costs increasing above the amount
previously estimated,
Facility modifications,
Changes in authorized possession limits,
Actual remediation costs that exceed the previous cost
estimate,
Onsite disposal, and
Use of a settling pond.
As discussed further in this section, this rulemaking amends the
introductory language in 10 CFR 30.35(f) and amends paragraphs (f)(1)
through (f)(3). Parallel changes have been made in Sec. 40.36(e),
Sec. 40.36(e)(1), (e)(2) and (e)(3), Sec. 70.25(f), Sec.
70.25(f)(1), (f)(2) and (f)(3), Sec. 72.30(e), Sec. 72.30(e)(1),
(e)(2) and (e)(3).
Section 30.35(f) is amended to require that the financial
instrument used for decommissioning funding assurance include the
licensee's name, license number, and docket number, and the name,
address, and other contact information of the issuer, and, if a trust
is used, the trustee. If there are any changes to this information, the
licensee must submit financial instruments reflecting these changes
within 30 days.
Section 30.35(f)(1) is amended to require that the prepayment
financial method be in the form of a trust. This language parallels the
rule text change in Sec. 20.1403, eliminating the four other
prepayment mechanisms (i.e., the escrow account, government fund,
[[Page 35558]]
certificate of deposit, and deposit of government securities).
Section 30.35(f)(2) is amended to eliminate the existing line of
credit option as a guarantee method for financial assurance.
Section 30.35(f)(3) is amended to require an external sinking fund
to be in the form of a trust, eliminating the escrow account,
government fund, certificate of deposit, and deposit of government
securities because of their relative risk of loss during bankruptcy.
Section 30.35(h) has been added (and in parallel new Sec. 40.36(f)
and Sec. 70.25(h)) specifying that each licensee must use its
financial assurance funds only for decommissioning activities. The new
section also requires monitoring by the licensee of its investment
balance in the decommissioning trust account. Conservative investments
are expected in the trust account. If the investment balance in the
trust account is below the estimated cost of decommissioning, but is
not below 75 percent of the cost, then the licensee must, within 30
days after the end of the calendar quarter, deposit funds into the
trust account to fully cover the estimated cost. If at any time the
loss results in a balance that is below 75 percent of the amount
necessary to cover the decommissioning cost, the licensee must, within
30 days of such occurrence, deposit funds into the trust account to
fully cover the estimated cost. The licensee must report taking such
actions to the NRC within 30 days of the occurrence.
Part 30 Appendices A, C, D, and E
This rulemaking makes a set of parallel amendments to 10 CFR part
30, Appendices A, C, D, and E. The types of guarantors for which the
financial tests in these appendices apply are:
Appendix A, Parent company guarantees;
Appendix C, Self-guarantees;
Appendix D, Self-guarantees by companies that have no
rated commercial bonds; and
Appendix E, Self-guarantees by non-profit colleges,
universities and hospitals.
In the financial test in Section II.A in Appendices A, C, and D of
Part 30, this rulemaking adds language to allow the inclusion of
intangible assets in the determination of total net worth. Total net
worth is defined to exclude the net book value and goodwill of the
nuclear facility and site. Tangible net worth is defined to exclude all
intangible assets and the net book value of the nuclear facility and
site. In Appendix A of the existing rule, Section II.A.1.(i) provides
that a parent company guaranteeing to fund the cost of decommissioning
must, among other things, have two of three defined financial ratios.
This provision has been revised to clarify that in calculating the
ratio of liabilities to net worth, the parent company must calculate
its total liabilities against its total net worth, which may now
include intangible assets. Section II.A.2.(ii) of Appendix A has also
been revised to require the licensee to perform a total net worth
calculation instead of a tangible net worth calculation. (The parent
company must also have a minimum tangible net worth of $21 million, as
required by Section II.A.(2).(iii) of Appendix A and described in the
next paragraph.) In Appendix D, which establishes financial test
criteria for companies that do not issue bonds, Section II.A.(3) has
been revised to clarify that a self-guaranteeing company must have,
among other things, a ratio of total liabilities divided by total net
worth that is less than 1.5.
In the financial test in Section II.A in Appendices A, C, and D of
Part 30, this rulemaking requires that the guarantor's tangible net
worth be at least $21 million to pass one of the criteria for that
financial test.
Each set of changes to Appendices A, C, D, and E of Part 30
requires the independent CPA (who compares the data used in the
financial tests against data in year-end financial statements) to
evaluate the guarantor's off-balance sheet transactions regarding the
impact these transactions may have on the guarantor's ability to pay
decommissioning costs. The CPA also must verify bond ratings if these
are used to pass the financial test.
For those licensees or guarantors that issue bonds and use the
financial test under Section II.B of Appendices A, C, and E of Part 30,
this rulemaking specifies that the current rating of the most recent
bond issuance of AAA, AA, or A by Standard and Poor's could include
adjustments of + or-(i.e., AAA+, AA+, or A+ and AAA-, AA-, and A- would
meet the criterion) and the current rating of Aaa, Aa, or A by Moody's
could include adjustments of 1, 2, or 3. In each of these appendices,
this rulemaking also requires the bond to be the most recent
``uninsured, uncollateralized, and unencumbered'' bond issuance.
In each Appendix A, C, D, and E of Part 30, this rulemaking makes
changes to the 90 day test to show continued eligibility for the
licensee and guarantor.
In each Appendix A, C, D, and E to Part 30, this rulemaking amends
Section III to clarify that the guarantor is required to set up a
standby trust, with new criteria for selecting an acceptable trustee.
In Appendix A to Part 30, this rulemaking amends Section III to
require that the parent company guarantor agree to make itself subject
to Commission orders (e.g., order to make payments under the guarantee
agreement).
In each Appendix A, C, D, and E to Part 30, this rulemaking amends
Section III to allow the Commission, in cases of the guarantor
company's financial distress, to declare the financial assurance
guaranteed by the guarantor to be immediately due and payable to the
standby trust. The guarantor companies also are required to notify the
NRC, in writing, immediately following the occurrence of events
signifying financial distress.
Section 40.36 Financial Assurance and Recordkeeping for Decommissioning
This rulemaking amends Sec. 40.36(c)(5) in changes that are
parallel to those described under Sec. 30.35(c)(6); amends Sec.
40.36(d)(1) and (d)(2) in changes that are parallel to those described
under Sec. 30.35(e)(1) and (e)(2); amends Sec. 40.36(e) in changes
that are parallel to those described under Sec. 30.35(f); and amends
Sec. 40.36(f) in changes that are parallel to those described under
Sec. 30.35(h).
Section 40.46 Inalienability of Licenses
This rulemaking amends Sec. 40.46. The changes are described under
the section for Sec. 30.34.
Part 40 Appendix A
This rulemaking amends Appendix A, Criterion 9, to Part 40. For the
most part, the changes are parallel to those described under Sec.
30.35(e)(1) and Sec. 30.35(e)(2). However, two errors contained in the
proposed published amendments to Criterion 9 are being corrected.
First, in proposed Criterion 9(b)(2)--relating to financial surety
arrangements that uranium recovery licensees must establish--the term
``residual radioactive material'' was used in describing one of the
items that a Commission-approved cost estimate must contain. This term,
as defined in existing 10 CFR 40.4, applies only to uranium mill sites
that were inactive (so-called Title I sites) as of 1978 when the
Uranium Mill Tailings Radiation Control Act was enacted. To avoid
confusion, the proposed use of ``residual radioactive material'' is
replaced by the phrase ``radioactive contamination'' in Criterion
9(b)(2). Second, in proposed Criterion 9(f)(4)--relating to required
adjustments in surety liability amounts--the term ``residual
radioactivity'' was used in conjunction
[[Page 35559]]
with the phrase ``license termination criteria.'' Such a juxtaposition
is appropriate for 10 CFR part 30 licensees and most others. But
pursuant to 10 CFR 20.1401(a), the scope of 10 CFR part 20 Subpart E,
``Radiological Criteria for License Termination,'' does not include
facilities subject to Part 40 Appendix A, which contains its own set of
provisions governing the long term control and remediation of tailings
and associated contaminants. Accordingly, in Criterion 9(f)(4), the
term ``residual radioactivity'' is replaced by the word
``contamination''; and the phrase ``license termination criteria'' is
replaced by the phrase ``applicable remediation criteria.''
Section 50.75 Reporting and Recordkeeping for Decommissioning Planning
This rulemaking eliminates the line of credit in Sec.
50.75(e)(1)(iii)(A) as a guarantee method for financial assurance.
Additionally, in the parallel provisions of Sec. 50.75(f)(1) and
(f)(2), in each paragraph between its second and third sentences, the
following additional sentence is added: ``If any of the preceding items
is not applicable, the licensee should so state in its report.'' This
change clarifies that not all listed items in Sec. 50.75(f)(1) and
(f)(2) are applicable to all reactor licensees, and resolves an issue
raised in a recent NRC audit of decommissioning funding assurance
requirements. The NRC is also making minor editorial and clarifying
changes in Sec. 50.75(f)(1) and (f)(2) that impose no additional
requirements, and are not substantive modifications.
Section 50.82 Termination of License
This rulemaking revises Sec. 50.82(a)(4)(i) to require that
additional details be included in the PSDAR. The PSDAR must now include
a description of the planned decommissioning activities, a schedule for
their accomplishment, and an estimate of expected costs. As revised,
this regulation will also require that the PSDAR cost estimates include
those for managing irradiated fuel.
This rulemaking also adds paragraphs (v) through (vii) to existing
Sec. 50.82(a)(8). New paragraph (a)(8)(v) requires that a power
reactor licensee, that has submitted its certification of permanent
cessation of operation, must report annually on the status of its
radiological decommissioning funding on a calendar-year basis.
New paragraph (a)(8)(vi) requires that if funds reported in the
financial assurance status report are below the estimated cost to
complete the decommissioning, the licensee must include additional
financial assurance to make up the difference.
New paragraph (a)(8)(vii) requires an annual report on the status
of funds for managing irradiated fuel. This report includes the
accumulated amount, the projected costs until title to the fuel is
transferred to the Secretary of Energy, and the plan to obtain the
necessary additional funds if the total projected cost is higher than
the accumulated amount.
Section 70.25 Financial Assurance and Recordkeeping for Decommissioning
This rulemaking amends Sec. 70.25. The changes are parallel to
those described under Sec. 30.35.
Section 70.36 Inalienability of Licenses
This rulemaking amends Sec. 70.36. The changes are parallel to
those described under Sec. 30.34.
Section 72.13 Applicability
As stated in the January 22, 2008 proposed rule, references in
Sec. 72.13(c) to Sec. 72.30 are being changed to conform with the
revisions to Sec. 72.30, whereby Sec. 72.30(c) is being redesignated
as Sec. 72.30(e), and Sec. 72.30(d) is being redesignated as Sec.
72.30(f). This reflects the fact that existing 10 CFR 72.13(c)
references 10 CFR 72.30(c) and (d).
However, the January 2008 notice's discussion of proposed changes
in the cross-referencing provisions of Sec. 72.13 did not capture all
of the proposed changes to 10 CFR 72.30 (i.e., the revisions to 10 CFR
72.30(b), and the addition of new sections (c), (d), and (g) to 10 CFR
72.30). Section 72.13(b) references the Part 72 provisions applicable
to those holding Part 72 specific licenses, and 10 CFR 72.13(c)
references the Part 72 provisions applicable to those holding Part 72
general licenses. Thus, any amendments to 10 CFR 72.30 need to be
reflected in 10 CFR 72.13. An expanded discussion of the changes in the
cross-referencing provisions of Sec. 72.13 is set forth below (a more
detailed discussion of these and related issues appears in the response
to comment H.25 above).
As stated above, existing 10 CFR 72.13(c) references 10 CFR
72.30(d). Thus, those holding Part 72 general licenses are already
subject to all of the existing 10 CFR 72.30(d) requirements. Such
requirements include the DFP provisions referenced in 10 CFR
72.30(d)(4)--which this rulemaking redesignates as 10 CFR 72.30(f)(4).
The new provisions in 10 CFR 72.30(b) provide further details of what
initial DFPs must include. New section (c) of 10 CFR 72.30 presents a
set of timing provisions describing when updated DFPs must be submitted
for NRC approval. New section (d) of 10 CFR 72.30 is a special 1-year
DFP update provision based on 10 CFR 20.1501 survey results. Together,
these new DFP requirements, along with the 10 CFR 72.30(f)(4) DFP
provisions, will be referenced in 10 CFR 72.13(c), and will thus be
applicable to Part 72 general licensees.
Accordingly, the final rulemaking amends 10 CFR 72.13(c) so that it
correctly includes references 10 CFR 72.30(b), (c), (d), (e), and (f)
that are applicable to holders of Part 72 general licenses.
The requirements of new 10 CFR 72.30(g)--under which licensees must
replenish fund levels if decommissioning funds fall below specified
levels--are unlike the above-referenced DFP requirements in that no
similar provisions now exist in either Part 72 or Part 50. Aside from
requirements listed in 10 CFR 72.13(c), a Part 72 general licensee can
only be subject to requirements that a Part 50 licensee is subject to.
Thus, the new 10 CFR 72.30(g) requirements will be applicable only to
holders of Part 72 specific licenses. No amendment to 10 CFR 72.13(b)
is necessary to reflect this, because existing 10 CFR 72.13(b) lists
Sec. 72.16 through Sec. 72.34 as being among the Part 72 requirements
that are applicable to specific licenses.
Section 72.30 Financial Assurance and Recordkeeping for Decommissioning
This rulemaking amends Sec. 72.30. The changes are similar to
those described under Sec. 30.35(e), and two existing paragraphs are
redesignated.
Additionally, the NRC is amending the newly redesignated Sec.
72.30(e)(5)--formerly Sec. 72.30(c)(5)--to allow a licensee, who is
also an electric utility as defined in 10 CFR part 50, to continue to
rely on Part 50 mechanisms for decommissioning financial assurance. In
the event that funds remaining to be placed into the licensee's ISFSI
decommissioning external sinking fund are no longer approved for
recovery in rates by a competent rate making authority, the licensee
must make changes to provide financial assurance using the methods in
10 CFR 72.30(e). This change was not noticed in the January 2008
proposed rule. It is being made as a result of a public comment on the
proposed rule, regarding acceptable mechanisms in providing
decommissioning financial assurance under Sec. 72.30(e). The commenter
noted that it and another
[[Page 35560]]
licensee, each with Part 72 specific licenses, were granted in 2005
exemptions from 10 CFR 72.30(c)(5)--now 72.30(e)(5)--allowing them to
continue to use 10 CFR 50.75(e)(1)(ii)(A) as the exclusive mechanism
for ISFSI decommissioning financial assurance. This rulemaking change
in Sec. 72.30(e)(5) provides adequate financial assurance for
decommissioning an ISFSI, and will improve regulatory efficiency and
effectiveness by allowing ISFSI licensees who are also an electric
utility to continue their use of the Part 50 sinking fund applied to
ISFSI decommissioning after the power reactor has been decommissioned.
The NRC is amending the newly redesignated Sec. 72.30(f)(4) to
remove the reference to ``the amount certified for decommissioning''
which occurs in the existing regulation, under Sec. 72.30(d)(4). Part
72 does not have provisions for an ISFSI licensee to certify to a
prescribed amount of financial assurance. This rulemaking change is
being made as a technical correction.
New Sec. 72.30(g) states that each licensee with a Part 72
specific license must use its financial assurance funds only for
decommissioning activities. As discussed previously in response to a
comment, the NRC in this final rule is revising the proposed Sec.
72.30(g) to require monitoring by the licensee of its investment
balance in the decommissioning trust account, on an annual rather than
quarterly basis. If, at the end of a calendar year, the investment
balance in the trust account is below the estimated cost of
decommissioning, but is not below 75 percent of the cost, then
licensees must, within 30 days after the end of the calendar year,
deposit funds into the trust account to fully cover the estimated cost.
If at any time the loss results in a balance that is below 75 percent
of the amount necessary to cover the decommissioning cost, the licensee
must, within 30 days of such occurrence, deposit funds into the trust
account to fully cover the estimated cost. The licensee must report
taking such actions to the NRC within 30 days of the occurrence.
Section 72.50 Transfer of License
This rulemaking amends Sec. 72.50 by adding a new paragraph
(b)(3), requiring that the license transfer application describe the
financial assurance that will be provided for the decommissioning under
Sec. 72.30.
Section 72.80 Other Records and Reports
References in Sec. 72.80(e) and (f) are corrected to conform with
the changes to Sec. 72.30, whereby Sec. 72.30(d) would become Sec.
72.30(f).
V. Criminal Penalties
For the purpose of Section 223 of the Atomic Energy Act (AEA), the
Commission is amending 10 CFR parts 20, 30, 40, 50, 70, and 72 under
one or more of Sections 161b, 161i, or 161o of the AEA. Willful
violations of the rule would be subject to criminal enforcement.
VI. Agreement State Compatibility
Under the ``Policy Statement on Adequacy and Compatibility of
Agreement State Programs'' approved by the Commission on June 30, 1997,
and published in the Federal Register on September 3, 1997 (62 FR
46517), this final rule is a matter of compatibility between the NRC
and the Agreement States, thereby providing consistency among the
Agreement States and the NRC requirements. The NRC staff analyzed the
final rule in accordance with the procedure established within Part
III, ``Categorization Process for NRC Program Elements,'' of Handbook
5.9 to Management Directive 5.9, ``Adequacy and Compatibility of
Agreement State Programs'' (a copy of which may be viewed at http://www.nrc.gov/reading-rm/doc-collections/management-directives/volumes/vol-5.html.
The NRC program elements (including regulations) are placed into
four compatibility categories (See the Compatibility Table in this
section). In addition, the NRC program elements also can be identified
as having particular health and safety significance or as being
reserved solely to the NRC. Compatibility Category A establishes
program elements that are basic radiation protection standards and
scientific terms and definitions that are necessary to understand
radiation protection concepts. An Agreement State should adopt Category
A program elements in an essentially identical manner to provide
uniformity in the regulation of agreement material on a nationwide
basis. Compatibility Category B establishes program elements that apply
to activities that have direct and significant effects in multiple
jurisdictions. An Agreement State should adopt Category B program
elements in an essentially identical manner. Compatibility Category C
establishes program elements that do not meet the criteria of Category
A or B, but the essential objectives of which an Agreement State should
adopt to avoid conflict, duplication, gaps, or other conditions that
would jeopardize an orderly pattern in the regulation of agreement
material on a nationwide basis. An Agreement State should adopt the
essential objectives of the Category C program elements. Compatibility
Category D establishes program elements that do not meet any of the
criteria of Category A, B, or C, above, and, thus, do not need to be
adopted by Agreement States for purposes of compatibility.
Health and Safety (H&S) are program elements that are not required
for compatibility but are identified as having a particular health and
safety role (i.e., adequacy) in the regulation of agreement material
within the State. Although not required for compatibility, the State
should adopt program elements in this H&S category based on those of
the NRC that embody the essential objectives of the NRC program
elements, because of particular health and safety considerations.
Compatibility Category NRC establishes program elements that address
areas of regulation that cannot be relinquished to Agreement States
under the Atomic Energy Act, as amended, or provisions of 10 CFR. These
program elements are not adopted by Agreement States.
The following table lists the parts and sections that have been
added or revised by this final rule and their corresponding
categorization under the ``Policy Statement on Adequacy and
Compatibility of Agreement State Programs.''
Compatibility Table for Decommissioning Planning Final Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
Compatibility
Section Change Subject ---------------------------------------------------------
Existing New *
--------------------------------------------------------------------------------------------------------------------------------------------------------
20.1403(c)(1)....................... Amend...................... Trust fund for restricted C.......................... C
use.
20.1403(c)(2)....................... Deleted.................... Acceptable financial C.......................... C
assurance methods.
20.1403(c)(3) & (4)................. Redesignated............... Government entity financial C.......................... C
assurance.
20.1404(a)(5)....................... Add........................ Trust fund for alternate ........................... C
criteria.
[[Page 35561]]
20.1406(c).......................... Add........................ Minimize residual ........................... C
radioactivity.
20.1501(a).......................... Amend...................... Surveys and monitoring..... H&S........................ H&S
20.1501(b).......................... Add........................ Records from surveys....... ........................... H&S
30.34(b)(1)......................... Redesignated............... License transfer C.......................... C
requirements.
30.34(b)(2)......................... Add........................ License transfer ........................... C
requirements.
30.35(c)(6)......................... Add........................ Assess subsurface ........................... D
contamination.
30.35(d)............................ No change.................. Certification amounts H&S **..................... D
financial assurance.
30.35(e)(1)......................... Amend...................... Contents of decommissioning D ***...................... H&S
funding plan.
30.35(e)(2)......................... Amend...................... Updates of decommissioning D ***...................... H&S
funding plan.
30.35(f)............................ Amend...................... Methods for financial D.......................... D
assurance.
30.35(h)............................ Add........................ Monitor the balance of ........................... D
funds.
30 Appendix A....................... Amend...................... Parent company guarantee... D.......................... D
30 Appendix C....................... Amend...................... Self-guarantee with bonds.. D.......................... D
30 Appendix D....................... Amend...................... Self-guarantee without D.......................... D
bonds.
30 Appendix E....................... Amend...................... Self-guarantee nonprofits.. D.......................... D
40.36(c)(5)......................... Add........................ Assess subsurface ........................... D
contamination.
40.36(d)(1)......................... Amend...................... Contents of decommissioning H&S........................ H&S
funding plan.
40.36(d)(2)......................... Amend...................... Updates of decommissioning H&S........................ H&S
funding plan.
40.36(e)............................ Amend...................... Methods for financial D.......................... D
assurance.
40.36(g)............................ Add........................ Monitor the balance of ........................... D
funds.
40.46(a)............................ Redesignated............... License transfer C.......................... C
requirements.
40.46(b)............................ Add........................ License transfer ........................... C
information requirements.
40 Appendix A Criterion 9(b)........ Amend...................... DCEs and financial surety C.......................... C
[with 11e.(2)].
40 Appendix A Criterion 9(b)........ Amend...................... DCEs and financial surety NRC........................ NRC
[without 11e.(2)].
50.75(e) & (f)...................... Amend...................... Surety and reporting of NRC........................ NRC
status of funding.
50.82(a)(4)......................... Amend...................... Cost information in the NRC........................ NRC
PSDAR.
50.82(a)(8)(v), (vi) & (vii)........ Add........................ Cost information in the ........................... NRC
annual financial assurance
status report.
70.25(c)(5)......................... Add........................ Assess subsurface ........................... D
contamination.
70.25(d)............................ No change.................. Certification amounts H&S **..................... D
financial assurance.
70.25(e)(1)......................... Amend...................... Contents of decommissioning D ***...................... H&S
funding plan.
70.25(e)(2)......................... Amend...................... Updates of decommissioning D ***...................... H&S
funding plan.
70.25(f)............................ Amend...................... Methods for financial D.......................... D
assurance.
70.25(h)............................ Add........................ Monitor the balance of ........................... D
funds.
70.36(b)............................ Add........................ License transfer ........................... C
requirements.
72.13 & 72.30(b).................... Amend...................... Applicability and contents NRC........................ NRC
of funding plan.
72.30(c)............................ Add........................ Updates of decommissioning ........................... NRC
funding plan.
72.30(d)............................ Add........................ Assess subsurface ........................... NRC
contamination.
72.30(e)............................ Amend...................... Methods for financial NRC........................ NRC
assurance.
72.30(g)............................ Add........................ Monitor the balance of ........................... NRC
funds.
72.50(b)(3) & 72.80................. Add........................ License transfer and other ........................... NRC
records.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Final rule compatibility category.
** The compatibility category for Sec. 30.35(d) and Sec. 70.25(d) were incorrectly specified in the 68 FR 57334, October 3, 2003, Financial
Assurance for Materials Licensees final rule. The correct category for both of these sections is D.
*** The compatibility category for Sec. 30.35(e) and Sec. 70.25(e) were incorrectly specified in the 68 FR 57334, October 3, 2003, Financial
Assurance for Materials Licensees final rule. The correct category for both of these sections is H&S.
VII. Voluntary Consensus Standards
The National Technology Transfer and Advancement Act of 1995,
Public Law 104-113, requires that Federal agencies use technical
standards developed or adopted by voluntary consensus standards bodies
unless the use of such a standard is inconsistent with applicable law
or otherwise impractical. There are no consensus standards regarding
acceptable methods for radiological surveys across a broad spectrum of
licensed facilities, or for preparing DCEs or providing financial
assurance for decommissioning that would apply to the requirements
imposed by this final rule. Thus, the provisions of the Act do not
apply to this rule.
VIII. Environmental Assessment and 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. The
Commission has prepared an environmental assessment for this final
rule.
The amendments in this final rule require licensees, to the extent
practical, to conduct their operations to minimize the introduction of
residual radioactivity into the site, particularly in the subsurface
soil and groundwater. There are a variety of monitoring methods to
evaluate subsurface characteristics, and these are highly site specific
with respect to their effectiveness. One or more licensees may find
that compliance with the amendments will mean the installation of
groundwater monitoring wells and surface monitoring devices at their
sites. The installation of these monitoring devices and wells is
generally expected
[[Page 35562]]
to result in small environmental impacts due to their very localized
nature.
During sampling and testing, the amendments introduce the potential
for a small amount of increased occupational exposures. These exposures
are expected to remain within 10 CFR part 20 limits and to be ALARA. If
subsurface contamination is detected, licensees may choose to remediate
when contamination levels are lower and more manageable, which could
result in reduced future occupational exposure rates than if the
contamination conditions were allowed to remain and become increasingly
more hazardous. Licensees may alternatively choose to provide adequate
funding in response to their knowledge of the extent of any subsurface
contamination, which will better ensure that the area is remediated
following decommissioning to a degree that supports public health and
safety, and protection of the environment.
If significant onsite residual radioactivity in the subsurface is
found due to the monitoring imposed by these amendments, such knowledge
will better ensure the protection of public health and safety, and
protection of the environment. Identifying and resolving the source of
the contamination will better ensure that waste is not allowed to
migrate offsite. Early identification also provides more time to plan
waste remediation strategies that are both safe and cost effective. The
effect of the amendments is anticipated to be beneficial to the
environment, and it is expected that the overall environmental impacts
will be positive.
Therefore, the determination of the environmental assessment is
that there will be no significant impact to the human environment from
this action.
This conclusion was published in the environmental assessment that
was posted to the NRC rulemaking Web site: http://www.regulations.gov
for 75 days after publication of the proposed rule. Two comments were
received on the content of the environmental assessment. These comments
did not change the conclusion of the environmental assessment. These
comments are discussed in Section III.D of this document.
IX. Paperwork Reduction Act Statement
This final rule contains new or amended information collection
requirements contained in 10 CFR parts 20, 30, 40, 50, 70, and 72, that
are subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et
seq.). These requirements were approved by the Office of Management and
Budget, approval number 3150-0014, -0017, -0020, -0011, -0009, and -
0132.
The burden to the public for these information collections is
estimated to average 12 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
information collection. Send comments on any aspect of these
information collections, including suggestions for reducing the burden,
to the Information Services Branch (T-5 F53), U.S. Nuclear Regulatory
Commission, Washington, DC 20555-0001, or by Internet electronic mail
to [email protected]; and to the Desk Officer, Office of
Information and Regulatory Affairs, NEOB-10202, (3150-0014, -0017, -
0020, -0011, -0009, and -0132), Office of Management and Budget,
Washington, DC 20503 or by Internet electronic mail to
[email protected].
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.
X. Regulatory Analysis
As part of this final rulemaking, the Commission has prepared a
regulatory analysis examining the costs and benefits of the rulemaking
and alternatives considered by the Commission.
The regulatory analysis was performed over a 15-year analysis
period using 2007 dollars. The implementation of the final rule by
industry, the NRC and Agreement States is estimated to cost about $43
million, over the 15-year analysis period at a 3 percent discount rate.
The NRC licensee costs are about $6 million, and the NRC costs are
about $3 million. Agreement State licensee costs are about $22 million,
and Agreement State costs are about $12 million. Virtually all of the
industry costs are due to changes to 10 CFR parts 20 and 30.
The regulatory analysis is available for inspection in the NRC
Public Document Room, 11555 Rockville Pike, Rockville, MD, and may be
downloaded from the NRC rulemaking Web site at http://www.regulations.gov. Single copies of the regulatory analysis are
available from Kevin O'Sullivan, Office of Federal and State Materials
and Environmental Management Programs, U.S. Nuclear Regulatory
Commission, Washington, DC 20555-0001, telephone (301) 415-8112, e-mail
[email protected].
XI. Regulatory Flexibility Certification
In accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C.
605(b)), the Commission certifies that this rule will not have a
significant economic impact on a substantial number of small entities.
Only about 300 NRC materials licensees are required to have
decommissioning financial assurance and the large majority of these
organizations do not fall within the scope of the definition of ``small
entities'' set forth in the Regulatory Flexibility Act or the Small
Business Size Standards set out in regulations issued by the Small
Business Administration at 13 CFR part 121. Based on the regulatory
analysis, the NRC believes that the amendments in this final rule are
the least burdensome, most flexible alternative that would accomplish
the NRC's regulatory objective.
XII. Backfit Analysis
As discussed more fully in the regulatory analysis, the NRC has
determined that the NRC's backfitting rules at issue here (10 CFR
50.109, 70.76, and 72.62) do not require the preparation of a backfit
analysis for this rulemaking. A backfit is the modification of
equipment or procedures required to operate a facility resulting from
new or amended NRC regulations, or the imposition of a regulatory staff
position interpreting the Commission rules that is either new or
different from a previously applicable staff position.
The new or amended regulations in this final rule either clarify
existing requirements, or require the collection and reporting of
information using existing equipment and procedures, or are
administrative matters outside the scope of the backfitting rules. The
amended survey and monitoring requirements in Part 20 of this
rulemaking do not constitute a backfit, because they are information
collection requirements to support licensee and NRC decisions on
decommissioning planning and related activities. The decommissioning
financial assurance requirements being amended in Parts 30, 40, 50, 70,
and 72 of this rulemaking do not entail modifying any equipment or
procedures required to operate the types of NRC-licensed facilities
covered by the backfitting rules. These regulatory changes concern
administrative matters and are not backfits. Therefore, as discussed
further below, the NRC finds that preparation of
[[Page 35563]]
a backfit analysis is not required for this rulemaking.
In part, this rulemaking amends 10 CFR 20.1406 and 20.1501. Section
20.1406, ``Minimization of contamination,'' is amended by adding a new
subsection (c) to read as follows:
(c) Licensees shall, to the extent practical, conduct operations
to minimize the introduction of residual radioactivity into the
site, including the subsurface, in accordance with the existing
radiation protection requirements in Subpart B and radiological
criteria for license termination in Subpart E of this part.
This is not a backfit because it clarifies licensee requirements
under existing regulations applicable to licensed operations. The
current Sec. 20.1101(a) requires each licensee to implement a
radiation protection program to ensure compliance with the regulations
in 10 CFR part 20. The current Sec. 20.1101(b) requires each licensee
to use, to the extent practical, procedures and engineering controls
based upon sound radiation protection principles to achieve
occupational doses and doses to members of the public that are ALARA,
during operations and during decommissioning. These operating
procedures and controls need to include methods to minimize the
introduction of residual radioactivity into the site, including the
subsurface, during active facility operations to achieve doses that are
ALARA. Otherwise, licensees will lack a substantive basis to
demonstrate that they have achieved, during the life cycle of the
facility (which includes decommissioning), public and occupational
exposures that are ALARA. The concept of reducing residual
radioactivity to ALARA levels as part of the decommissioning criteria
has been a position of the NRC since at least 1994 (NUREG-1501, page
iii). Licensees should already have these procedures in place as part
of their radiation protection program, and 10 CFR 20.1406(c) clarifies
this requirement.
As stated previously, this rulemaking also amends 10 CFR 20.1501,
``General'' (part of Subpart F, ``Surveys and Monitoring''). Section
20.1501 is amended by revising subsection (a), and inserting a new
subsection (b), to read as follows:
(a) Each licensee shall make or cause to be made, surveys of
areas, including the subsurface, that--
(1) May be necessary for the licensee to comply with the
regulations in this part; and
(2) Are reasonable under the circumstances to evaluate--
(i) The magnitude and extent of radiation levels; and
(ii) Concentrations or quantities of residual radioactivity; and
(iii) The potential radiological hazards of the radiation levels
and residual radioactivity detected.
(b) Notwithstanding Sec. 20.2103(a) of this part, records from
surveys describing the location and amount of subsurface residual
radioactivity identified at the site must be kept with records
important for decommissioning, and such records must be retained in
accordance with Sec. Sec. 30.35(g), 40.36(f), 50.75(g), 70.25(g),
or 72.30(d), as applicable.
The amended 10 CFR 20.1501(a) replaces the undefined term
``radioactive material'' with ``residual radioactivity,'' a term
already defined in 10 CFR part 20. As defined in existing 10 CFR
20.1003, residual radioactivity includes subsurface contamination
within its scope, and the word ``subsurface'' is being added to 10 CFR
20.1501(a). The current 10 CFR 20.1501(a)(2)(iii) already requires the
evaluation of potential radiological hazards. Thus, as amended, 10 CFR
20.1501(a) makes clear that subsurface residual radioactivity is a
potential radiological hazard that is within the scope of these survey
requirements. This clarification of existing requirements does not
represent a new NRC position and therefore does not fall within the
definition of backfitting as set forth in the applicable backfitting
regulations.
As stated previously, new paragraph (b) to 10 CFR 20.1501 requires
that survey records describing the location and amount of subsurface
residual radioactivity identified at a licensed site be kept with
records important for decommissioning. The NRC licensees are already
required to keep records important for decommissioning. See, e.g., 10
CFR 50.75(g), 70.25(g), and 72.30(d). Moreover, the new 10 CFR
20.1501(b) is not intended to require recordkeeping of any and all
amounts of subsurface residual radioactivity but only amounts that are
significant to achieve effective decommissioning planning and ALARA
dose requirements. Regulatory changes imposing information collection
and reporting requirements do not constitute regulatory actions to
which the backfit rule applies. New subsection 20.1501(b) and amended
section 20.1501(a) contain provisions which require the licensee to
perform surveys to collect data on the location and amount of
subsurface residual radioactivity that may be a radiological hazard and
important for decommissioning planning. Neither of these provisions
constitutes a backfit, because they are information collection
requirements to support licensee and NRC decisions on decommissioning
activities.
This rulemaking also revises decommissioning planning and financial
assurance requirements in 10 CFR parts 30, 40, 50, 70 and 72. These
revisions do not entail modifying any equipment or procedures required
to operate the types of NRC-licensed facilities subject to the
backfitting rules. Therefore, preparation of a backfit analysis is not
required for the proposed revisions to the decommissioning planning and
financial assurance requirements.
Accordingly, the NRC has determined that the final rule's
provisions do not constitute backfitting and do not require the
preparation of a backfit analysis. The regulatory analysis identifies
the benefits and costs of the rulemaking, discusses the voluntary
Industry Ground Water Protection Initiative (GPI), and evaluates other
options for addressing the identified issues. 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.
XIII. Congressional Review Act
In accordance with the Congressional Review Act of 1996, the NRC
has determined that this action is not a major rule and has verified
this determination with the Office of Information and Regulatory
Affairs of OMB.
List of Subjects
10 CFR Part 20
Byproduct material, Criminal penalties, Licensed material, Nuclear
materials, Nuclear power plants and reactors, Occupational safety and
health, Packaging and containers, Radiation protection, Reporting and
recordkeeping requirements, Source material, Special nuclear material,
Waste treatment and disposal.
10 CFR Part 30
Byproduct material, Criminal penalties, Government contracts,
Intergovernmental relations, Isotopes, Nuclear materials, Radiation
protection, Reporting and recordkeeping requirements.
10 CFR Part 40
Criminal penalties, Government contracts, Hazardous materials
transportation, Nuclear materials, Reporting and recordkeeping
requirements, Source material, Uranium.
[[Page 35564]]
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.
10 CFR Part 70
Criminal penalties, Hazardous materials transportation, Material
control and accounting, Nuclear materials, Packaging and containers,
Radiation protection, Reporting and recordkeeping requirements,
Scientific equipment, Security measures, Special nuclear material.
10 CFR Part 72
Administrative practice and procedure, Criminal penalties, Manpower
training programs, Nuclear materials, Occupational safety and health,
Penalties, Radiation protection, Reporting and recordkeeping
requirements, Security measures, Spent fuel, Whistleblowing.
For the reasons set out 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 parts 20, 30, 40, 50, 70, and 72.
PART 20--STANDARDS FOR PROTECTION AGAINST RADIATION
0
1. The authority citation for Part 20 continues to read as follows:
Authority: Secs. 53, 63, 65, 81, 103, 104, 161, 182, 186, 68
Stat. 930, 933, 935, 936, 937, 948, 953, 955, as amended, sec. 1701,
106 Stat. 2951, 2952, 2953 (42 U.S.C. 2073, 2093, 2095, 2111, 2133,
2134, 2201, 2232, 2236, 2297f), secs. 201, as amended, 202, 206, 88
Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846);
sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note), sec. 651(e), Pub.
L. 109-58, 119 Stat. 806-810 (42 U.S.C. 2014, 2021, 2021b, 2111).
0
2. In Sec. 20.1403, paragraph (c)(2) is removed, paragraphs (c)(3) and
(c)(4) are redesignated as paragraphs (c)(2) and (c)(3), and paragraph
(c)(1) is revised to read as follows:
Sec. 20.1403 Criteria for license termination under restricted
conditions.
* * * * *
(c) * * *
(1) Funds placed into a trust segregated from the licensee's assets
and outside the licensee's administrative control, and in which the
adequacy of the trust funds is to be assessed based on an assumed
annual 1 percent real rate of return on investment;
* * * * *
0
3. In Sec. 20.1404, paragraph (a)(5) is added to read as follows:
Sec. 20.1404 Alternate criteria for license termination.
(a) * * *
(5) Has provided sufficient financial assurance in the form of a
trust fund to enable an independent third party, including a
governmental custodian of a site, to assume and carry out
responsibilities for any necessary control and maintenance of the site.
* * * * *
0
4. In Sec. 20.1406, paragraph (c) is added to read as follows:
Sec. 20.1406 Minimization of contamination.
* * * * *
(c) Licensees shall, to the extent practical, conduct operations to
minimize the introduction of residual radioactivity into the site,
including the subsurface, in accordance with the existing radiation
protection requirements in Subpart B and radiological criteria for
license termination in Subpart E of this part.
0
5. In Sec. 20.1501, paragraphs (b) and (c) are redesignated as
paragraphs (c) and (d), paragraphs (a) introductory text, (a)(2)(ii)
and (a)(2)(iii) are revised, and a new paragraph (b) is added to read
as follows:
Sec. 20.1501 General.
(a) Each licensee shall make or cause to be made, surveys of areas,
including the subsurface, that --
* * * * *
(2) * * *
(ii) Concentrations or quantities of residual radioactivity; and
(iii) The potential radiological hazards of the radiation levels
and residual radioactivity detected.
(b) Notwithstanding Sec. 20.2103(a) of this part, records from
surveys describing the location and amount of subsurface residual
radioactivity identified at the site must be kept with records
important for decommissioning, and such records must be retained in
accordance with Sec. Sec. 30.35(g), 40.36(f), 50.75(g), 70.25(g), or
72.30(d), as applicable.
* * * * *
PART 30--RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF
BY-PRODUCT MATERIAL
0
6. The authority citation for part 30 continues to read as follows:
Authority: Secs. 81, 82, 161, 182, 183, 186, 68 Stat. 935, 948,
953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42
U.S.C. 2111, 2112, 2201, 2232, 2233, 2236, 2282); secs. 201, as
amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C.
5841, 5842, 5846); sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note);
Energy Policy Act of 2005, Pub. L. 109-58, 119 Stat. 549 (2005).
Section 30.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat.
2951 as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123 (42
U.S.C. 5851). Section 30.34(b) also issued under sec. 184, 68 Stat.
954, as amended (42 U.S.C. 2234). Section 30.61 also issued under
sec. 187, 68 Stat. 955 (42 U.S.C. 2237).
0
7. In Sec. 30.34, paragraph (b) is redesignated as paragraph (b)(1)
and a new paragraph (b)(2) is added to read as follows:
Sec. 30.34 Terms and conditions of licenses.
* * * * *
(b) * * *
(2) An application for transfer of license must include:
(i) The identity, technical and financial qualifications of the
proposed transferee; and
(ii) Financial assurance for decommissioning information required
by Sec. 30.35.
* * * * *
0
8. In Sec. 30.35, a new paragraph (c)(6) is added, and paragraphs (e),
(f) introductory text, (f)(1), (f)(2) introductory text, and paragraph
(f)(3) are revised, and a new paragraph (h) is added to read as
follows:
Sec. 30.35 Financial assurance and recordkeeping for decommissioning.
* * * * *
(c) * * *
(6) If, in surveys made under 10 CFR 20.1501(a), residual
radioactivity in the facility and environment, including the
subsurface, is detected at levels that would, if left uncorrected,
prevent the site from meeting the 10 CFR 20.1402 criteria for
unrestricted use, the licensee must submit a decommissioning funding
plan within one year of when the survey is completed.
* * * * *
(e)(1) Each decommissioning funding plan must be submitted for
review and approval and must contain --
(i) A detailed cost estimate for decommissioning, in an amount
reflecting:
(A) The cost of an independent contractor to perform all
decommissioning activities;
(B) The cost of meeting the 10 CFR 20.1402 criteria for
unrestricted use, provided that, if the applicant or licensee can
demonstrate its ability to meet the provisions of 10 CFR 20.1403, the
cost estimate may be based on meeting the 10 CFR 20.1403 criteria;
[[Page 35565]]
(C) The volume of onsite subsurface material containing residual
radioactivity that will require remediation to meet the criteria for
license termination; and
(D) An adequate contingency factor.
(ii) Identification of and justification for using the key
assumptions contained in the DCE;
(iii) A description of the method of assuring funds for
decommissioning from paragraph (f) of this section, including means for
adjusting cost estimates and associated funding levels periodically
over the life of the facility;
(iv) A certification by the licensee that financial assurance for
decommissioning has been provided in the amount of the cost estimate
for decommissioning; and
(v) A signed original of the financial instrument obtained to
satisfy the requirements of paragraph (f) of this section (unless a
previously submitted and accepted financial instrument continues to
cover the cost estimate for decommissioning).
(2) At the time of license renewal and at intervals not to exceed 3
years, the decommissioning funding plan must be resubmitted with
adjustments as necessary to account for changes in costs and the extent
of contamination. If the amount of financial assurance will be adjusted
downward, this can not be done until the updated decommissioning
funding plan is approved. The decommissioning funding plan must update
the information submitted with the original or prior approved plan, and
must specifically consider the effect of the following events on
decommissioning costs:
(i) Spills of radioactive material producing additional residual
radioactivity in onsite subsurface material;
(ii) Waste inventory increasing above the amount previously
estimated;
(iii) Waste disposal costs increasing above the amount previously
estimated;
(iv) Facility modifications;
(v) Changes in authorized possession limits;
(vi) Actual remediation costs that exceed the previous cost
estimate;
(vii) Onsite disposal; and
(viii) Use of a settling pond.
(f) The financial instrument must include the licensee's name,
license number, and docket number, and the name, address, and other
contact information of the issuer, and, if a trust is used, the
trustee. When any of the foregoing information changes, the licensee
must, within 30 days, submit financial instruments reflecting such
changes. The financial instrument submitted must be a signed original
or signed original duplicate, except where a copy of the signed
original is specifically permitted. Financial assurance for
decommissioning must be provided by one or more of the following
methods:
(1) Prepayment. Prepayment is the deposit before the start of
operation into an account segregated from licensee assets and outside
the licensee's administrative control of cash or liquid assets such
that the amount of funds would be sufficient to pay decommissioning
costs. Prepayment must be made into a trust account, and the trustee
and the trust must be acceptable to the Commission.
(2) A surety method, insurance, or other guarantee method. These
methods guarantee that decommissioning costs will be paid. A surety
method may be in the form of a surety bond, or letter of credit. A
parent company guarantee of funds for decommissioning costs based on a
financial test may be used if the guarantee and test are as contained
in Appendix A to this part. For commercial corporations that issue
bonds, a guarantee of funds by the applicant or licensee for
decommissioning costs based on a financial test may be used if the
guarantee and test are as contained in Appendix C to this part. For
commercial companies that do not issue bonds, a guarantee of funds by
the applicant or licensee for decommissioning costs may be used if the
guarantee and test are as contained in Appendix D to this part. For
nonprofit entities, such as colleges, universities, and nonprofit
hospitals, a guarantee of funds by the applicant or licensee may be
used if the guarantee and test are as contained in Appendix E to this
part. Except for an external sinking fund, a parent company guarantee
or a guarantee by the applicant or licensee may not be used in
combination with any other financial methods used to satisfy the
requirements of this section. A guarantee by the applicant or licensee
may not be used in any situation where the applicant or licensee has a
parent company holding majority control of the voting stock of the
company. Any surety method or insurance used to provide financial
assurance for decommissioning must contain the following conditions:
* * * * *
(3) An external sinking fund in which deposits are made at least
annually, coupled with a surety method, insurance, or other guarantee
method, the value of which may decrease by the amount being accumulated
in the sinking fund. An external sinking fund is a fund established and
maintained by setting aside funds periodically in an account segregated
from licensee assets and outside the licensee's administrative control
in which the total amount of funds would be sufficient to pay
decommissioning costs at the time termination of operation is expected.
An external sinking fund must be in the form of a trust. If the other
guarantee method is used, no surety or insurance may be combined with
the external sinking fund. The surety, insurance, or other guarantee
provisions must be as stated in paragraph (f)(2) of this section.
* * * * *
(h) In providing financial assurance under this section, each
licensee must use the financial assurance funds only for
decommissioning activities and each licensee must monitor the balance
of funds held to account for market variations. The licensee must
replenish the funds, and report such actions to the NRC, as follows:
(1) If, at the end of a calendar quarter, the fund balance is below
the amount necessary to cover the cost of decommissioning, but is not
below 75 percent of the cost, the licensee must increase the balance to
cover the cost, and must do so within 30 days after the end of the
calendar quarter.
(2) If, at any time, the fund balance falls below 75 percent of the
amount necessary to cover the cost of decommissioning, the licensee
must increase the balance to cover the cost, and must do so within 30
days of the occurrence.
(3) Within 30 days of taking the actions required by paragraph
(h)(1) or (h)(2) of this section, the licensee must provide a written
report of such actions to the Director, Office of Federal and State
Materials and Environmental Management Programs, and state the new
balance of the fund.
0
9. In Appendix A to Part 30, Section II, the introductory text of
paragraph A, paragraphs A.1.(i), A.1.(ii), A.1.(iii), A.2.(i),
A.2.(ii), A.2.(iii), B, and C.1. are revised, in Section III paragraphs
B, C, and D are revised, and new paragraphs E, F, and G are added to
read as follows:
Appendix A to Part 30--Criteria Relating to Use of Financial Tests and
Parent Company Guarantees for Providing Reasonable Assurance of Funds
for Decommissioning
* * * * *
II. * * *
A. To pass the financial test, the parent company must meet the
criteria of either paragraph A.1 or A.2 of this section. For
purposes of applying the Appendix A criteria, tangible net worth
must be
[[Page 35566]]
calculated to exclude all intangible assets and the net book value
of the nuclear facility and site, and total net worth, which may
include intangible assets, must be calculated to exclude the net
book value and goodwill of the nuclear facility and site.
1. * * *
(i) Two of the following three ratios: A ratio of total
liabilities to total net worth less than 2.0; a ratio of the sum of
net income plus depreciation, depletion, and amortization to total
liabilities greater than 0.1; and a ratio of current assets to
current liabilities greater than 1.5; and
(ii) Net working capital and tangible net worth each at least
six times the amount of decommissioning funds being assured by a
parent company guarantee for the total of all nuclear facilities or
parts thereof (or prescribed amount if a certification is used); and
(iii) Tangible net worth of at least $21 million; and
* * * * *
2. * * *
(i) A current rating for its most recent uninsured,
uncollateralized, and unencumbered bond issuance of AAA, AA, A, or
BBB (including adjustments of + and -) as issued by Standard and
Poor's or Aaa, Aa, A, or Baa (including adjustment of 1, 2, or 3) as
issued by Moody's; and
(ii) Total net worth at least six times the amount of
decommissioning funds being assured by a parent company guarantee
for the total of all nuclear facilities or parts thereof (or
prescribed amount if a certification is used); and
(iii) Tangible net worth of at least $21 million; and
* * * * *
B. The parent company's independent certified public accountant
must compare the data used by the parent company in the financial
test, which is derived from the independently audited, year-end
financial statements for the latest fiscal year, with the amounts in
such financial statement. The accountant must evaluate the parent
company's off-balance sheet transactions and provide an opinion on
whether those transactions could materially adversely affect the
parent company's ability to pay for decommissioning costs. The
accountant must verify that a bond rating, if used to demonstrate
passage of the financial test, meets the requirements of paragraph A
of this section. In connection with the auditing procedure, the
licensee must inform the NRC within 90 days of any matters coming to
the auditor's attention which cause the auditor to believe that the
data specified in the financial test should be adjusted and that the
company no longer passes the test.
C.1. After the initial financial test, the parent company must
annually pass the test and provide documentation of its continued
eligibility to use the parent company guarantee to the Commission
within 90 days after the close of each succeeding fiscal year.
* * * * *
III. * * *
* * * * *
B. If the licensee fails to provide alternate financial
assurance as specified in the Commission's regulations within 90
days after receipt by the licensee and Commission of a notice of
cancellation of the parent company guarantee from the guarantor, the
guarantor will provide alternative financial assurance that meets
the provisions of the Commission's regulations in the name of the
licensee.
C. The parent company guarantee and financial test provisions
must remain in effect until the Commission has terminated the
license, accepted in writing the parent company's alternate
financial assurances, or accepted in writing the licensee's
financial assurances.
D. A standby trust to protect public health and safety and the
environment must be established for decommissioning costs before the
parent company guarantee agreement is submitted. The trustee and
trust must be acceptable to the Commission. An acceptable trustee
includes an appropriate State or Federal Government agency or an
entity which has the authority to act as a trustee, whose trust
operations are regulated and examined by a Federal or State agency.
The Commission has the right to change the trustee. An acceptable
trust will meet the regulatory criteria established in these
regulations that govern the issuance of the license for which the
guarantor has accepted the obligation to pay for decommissioning
costs.
E. The guarantor must agree that it would be subject to
Commission orders to make payments under the guarantee agreement.
F. The guarantor must agree that if the guarantor admits in
writing its inability to pay its debts generally, or makes a general
assignment for the benefit of creditors, or any proceeding is
instituted by or against the guarantor seeking to adjudicate it as
bankrupt or insolvent, or seeking dissolution, liquidation, winding-
up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency, or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver,
trustee, custodian, or other similar official for the guarantor or
for any substantial part of its property, or the guarantor takes any
action to authorize or effect any of the actions stated in this
paragraph, then the Commission may:
1. Declare that the financial assurance guaranteed by the parent
company guarantee agreement is immediately due and payable to the
standby trust set up to protect the public health and safety and the
environment, without diligence, presentment, demand, protest or any
other notice of any kind, all of which are expressly waived by
guarantor; and
2. Exercise any and all of its other rights under applicable
law.
G. 1. The guarantor must agree to notify the NRC, in writing,
immediately following the filing of a voluntary or involuntary
petition for bankruptcy under any chapter of title 11 (Bankruptcy)
of the United States Code, or the occurrence of any other event
listed in paragraph F of this Appendix, by or against:
(i) The guarantor;
(ii) The licensee;
(iii) An entity (as that term is defined in 11 U.S.C. 101(14))
controlling the licensee or listing the license or licensee as
property of the estate; or
(iv) An affiliate (as that term is defined in 11 U.S.C. 101(2))
of the licensee.
2. This notification must include:
(i) A description of the event, including major creditors, the
amounts involved, and the actions taken to assure that the amount of
funds guaranteed by the parent company guarantee for decommissioning
will be transferred to the standby trust as soon as possible;
(ii) If a petition of bankruptcy was filed, the identity of the
bankruptcy court in which the petition for bankruptcy was filed; and
(iii) The date of filing of any petitions.
0
10. In Appendix C to part 30, in Section II, paragraphs A., B.(2) and
B.(3) are revised, in Section III, paragraphs E and F are revised, and
paragraphs G, H, and I are added to read as follows:
Appendix C to Part 30--Criteria Relating To Use of Financial Tests and
Self Guarantees for Providing Reasonable Assurance of Funds for
Decommissioning
* * * * *
II. * * *
A. To pass the financial test a company must meet all of the
criteria set forth in this section. For purposes of applying the
Appendix C criteria, tangible net worth must be calculated to
exclude all intangible assets and the net book value of the nuclear
facility and site, and total net worth, which may include intangible
assets, must be calculated to exclude the net book value and
goodwill of the nuclear facility and site. These criteria include:
(1) Tangible net worth of at least $21 million, and total net
worth at least 10 times the amount of decommissioning funds being
assured by a self-guarantee for all decommissioning activities for
which the company is responsible as self-guaranteeing licensee and
as parent-guarantor for the total of all nuclear facilities or parts
thereof (or the current amount required if certification is used).
(2) Assets located in the United States amounting to at least 90
percent of total assets or at least 10 times the amount of
decommissioning funds being assured by a self-guarantee, for all
decommissioning activities for which the company is responsible as
self-guaranteeing licensee and as parent-guarantor for the total of
all nuclear facilities or parts thereof (or the current amount
required if certification is used).
(3) A current rating for its most recent uninsured,
uncollateralized, and unencumbered bond issuance of AAA, AA, or A
(including adjustments of + and -) as issued by Standard and Poor's,
or Aaa, Aa, or A (including adjustments of 1, 2, or 3) as issued by
Moody's.
B. * * *
(2) The company's independent certified public accountant must
compare the data used by the company in the financial test, which is
derived from the independently audited, year-end financial
statements for the latest fiscal year, with the amounts in such
financial statement. The accountant must
[[Page 35567]]
evaluate the company's off-balance sheet transactions and provide an
opinion on whether those transactions could materially adversely
affect the company's ability to pay for decommissioning costs. The
accountant must verify that a bond rating, if used to demonstrate
passage of the financial test, meets the requirements of Section II,
paragraph A of this appendix. In connection with the auditing
procedure, the licensee must inform the NRC within 90 days of any
matters coming to the auditor's attention which cause the auditor to
believe that the data specified in the financial test should be
adjusted and that the company no longer passes the test.
(3) After the initial financial test, the company must annually
pass the test and provide documentation of its continued eligibility
to use the self-guarantee to the Commission within 90 days after the
close of each succeeding fiscal year.
* * * * *
III. * * *
E. (1) If, at any time, the licensee's most recent bond issuance
ceases to be rated in any category of ``A-'' and above by Standard
and Poor's or in any category of ``A3'' and above by Moody's, the
licensee will notify the Commission in writing within 20 days after
publication of the change by the rating service.
(2) If the licensee's most recent bond issuance ceases to be
rated in any category of A or above by both Standard and Poor's and
Moody's, the licensee no longer meets the requirements of Section
II.A. of this appendix.
F. The applicant or licensee must provide to the Commission a
written guarantee (a written commitment by a corporate officer)
which states that the licensee will fund and carry out the required
decommissioning activities or, upon issuance of an order by the
Commission, the licensee will fund the standby trust in the amount
guaranteed by the self-guarantee agreement.
G. (1) A standby trust to protect public health and safety and
the environment must be established for decommissioning costs before
the self-guarantee agreement is submitted.
(2) The trustee and trust must be acceptable to the Commission.
An acceptable trustee includes an appropriate State or Federal
Government agency or an entity which has the authority to act as a
trustee and whose trust operations are regulated and examined by a
Federal or State agency. The Commission has the right to change the
trustee. An acceptable trust will meet the regulatory criteria
established in these regulations that govern the issuance of the
license for which the guarantor has accepted the obligation to pay
for decommissioning costs.
H. The guarantor must agree that if the guarantor admits in
writing its inability to pay its debts generally, or makes a general
assignment for the benefit of creditors, or any proceeding is
instituted by or against the guarantor seeking to adjudicate it as
bankrupt or insolvent, or seeking dissolution, liquidation, winding-
up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency, or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver,
trustee, custodian, or other similar official for the guarantor or
for any substantial part of its property, or the guarantor takes any
action to authorize or effect any of the actions stated in this
paragraph, then the Commission may:
(1) Declare that the financial assurance guaranteed by the self-
guarantee agreement is immediately due and payable to the standby
trust set up to protect the public health and safety and the
environment, without diligence, presentment, demand, protest or any
other notice of any kind, all of which are expressly waived by
guarantor; and
(2) Exercise any and all of its other rights under applicable
law.
I. The guarantor must notify the NRC, in writing, immediately
following the occurrence of any event listed in paragraph H of this
appendix, and must include a description of the event, including
major creditors, the amounts involved, and the actions taken to
assure that the amount of funds guaranteed by the self-guarantee
agreement for decommissioning will be transferred to the standby
trust as soon as possible.
0
11. In Appendix D to Part 30 in Section II, the introductory text of
paragraph A., paragraphs A.(1), A.(3), B.(1), and B.(2) are revised, in
Section III paragraph D is revised and paragraphs E, F, and G are added
to read as follows:
Appendix D to Part 30--Criteria Relating To Use of Financial Tests and
Self-Guarantee for Providing Reasonable Assurance of Funds for
Decommissioning by Commercial Companies That Have No Outstanding Rated
Bonds
* * * * *
II. * * *
A. To pass the financial test a company must meet all of the
criteria set forth in this section. For purposes of applying the
Appendix D criteria, tangible net worth must be calculated to
exclude all intangible assets and the net book value of the nuclear
facility and site, and total net worth, which may include intangible
assets, must be calculated to exclude the net book value and
goodwill of the nuclear facility and site. These criteria include:
(1) Tangible net worth of at least $21 million, and total net
worth of at least 10 times the amount of decommissioning funds being
assured by a self-guarantee for all decommissioning activities for
which the company is responsible as self-guaranteeing licensee and
as parent-guarantor for the total of all nuclear facilities or parts
thereof (or the current amount required if certification is used).
* * * * *
(3) A ratio of cash flow divided by total liabilities greater
than 0.15 and a ratio of total liabilities divided by total net
worth less than 1.5.
B. * * *
(1) The company's independent certified public accountant must
compare the data used by the company in the financial test, which is
derived from the independently audited, year-end financial
statements for the latest fiscal year, with the amounts in such
financial statement. The accountant must evaluate the company's off-
balance sheet transactions and provide an opinion on whether those
transactions could materially adversely affect the company's ability
to pay for decommissioning costs. In connection with the auditing
procedure, the licensee must inform the NRC within 90 days of any
matters coming to the auditor's attention which cause the auditor to
believe that the data specified in the financial test should be
adjusted and that the company no longer passes the test.
(2) After the initial financial test, the company must annually
pass the test and provide documentation of its continued eligibility
to use the self-guarantee to the Commission within 90 days after the
close of each succeeding fiscal year.
* * * * *
III. * * *
D. The applicant or licensee must provide to the Commission a
written guarantee (a written commitment by a corporate officer)
which states that the licensee will fund and carry out the required
decommissioning activities or, upon issuance of an order by the
Commission, the licensee will fund the standby trust in the amount
of the current cost estimates for decommissioning.
E. A standby trust to protect public health and safety and the
environment must be established for decommissioning costs before the
self-guarantee agreement is submitted. The trustee and trust must be
acceptable to the Commission. An acceptable trustee includes an
appropriate State or Federal Government agency or an entity which
has the authority to act as a trustee and whose trust operations are
regulated and examined by a Federal or State agency. The Commission
will have the right to change the trustee. An acceptable trust will
meet the regulatory criteria established in the part of these
regulations that governs the issuance of the license for which the
guarantor has accepted the obligation to pay for decommissioning
costs.
F. The guarantor must agree that if the guarantor admits in
writing its inability to pay its debts generally, or makes a general
assignment for the benefit of creditors, or any proceeding is
instituted by or against the guarantor seeking to adjudicate it as
bankrupt or insolvent, or seeking dissolution, liquidation, winding-
up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency, or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver,
trustee, custodian, or other similar official for the guarantor or
for any substantial part of its property, or the guarantor takes any
action to authorize or effect any of the actions stated in this
paragraph, then the Commission may:
(1) Declare that the financial assurance guaranteed by the self-
guarantee agreement is immediately due and payable to the standby
[[Page 35568]]
trust set up to protect the public health and safety and the
environment, without diligence, presentment, demand, protest or any
other notice of any kind, all of which are expressly waived by
guarantor; and
(2) Exercise any and all of its other rights under applicable
law.
G. The guarantor must notify the NRC, in writing, immediately
following the occurrence of any event listed in paragraph F of this
appendix, and must include a description of the event, including
major creditors, the amounts involved, and the actions taken to
assure that the amount of funds guaranteed by the self-guarantee
agreement for decommissioning will be transferred to the standby
trust as soon as possible.
0
12. In Appendix E to part 30, in Section II, paragraphs A.(1), B.(1),
C.(1), and C.(2) are revised, in Section III, paragraphs D and E are
revised and paragraphs F, G, and H are added to read as follows:
Appendix E to Part 30--Criteria Relating To Use of Financial Tests and
Self-Guarantee for Providing Reasonable Assurance of Funds for
Decommissioning by Nonprofit Colleges, Universities, and Hospitals
* * * * *
II. * * *
A. * * *
(1) For applicants or licensees that issue bonds, a current
rating for its most recent uninsured, uncollateralized, and
unencumbered bond issuance of AAA, AA, or A (including adjustments
of + or -) as issued by Standard and Poor's (S&P) or Aaa, Aa, or A
(including adjustments of 1, 2, or 3) as issued by Moody's.
* * * * *
B. * * *
(1) For applicants or licensees that issue bonds, a current
rating for its most recent uninsured, uncollateralized, and
unencumbered bond issuance of AAA, AA, or A (including adjustments
of + or -) as issued by Standard and Poor's or Aaa, Aa, or A
(including adjustments of 1, 2, or 3) as issued by Moody's.
* * * * *
C. * * *
(1) The licensee's independent certified public accountant must
compare the data used by the licensee in the financial test, which
is derived from the independently audited, year-end financial
statements for the latest fiscal year, with the amounts in such
financial statement. The accountant must evaluate the licensee's
off-balance sheet transactions and provide an opinion on whether
those transactions could materially adversely affect the licensee's
ability to pay for decommissioning costs. The accountant must verify
that a bond rating, if used to demonstrate passage of the financial
test, meets the requirements of Section II of this appendix. In
connection with the auditing procedure, the licensee must inform the
NRC within 90 days of any matters coming to the auditor's attention
which cause the auditor to believe that the data specified in the
financial test should be adjusted and that the licensee no longer
passes the test.
(2) After the initial financial test, the licensee must repeat
passage of the test and provide documentation of its continued
eligibility to use the self-guarantee to the Commission within 90
days after the close of each succeeding fiscal year.
* * * * *
III. * * *
D. The applicant or licensee must provide to the Commission a
written guarantee (a written commitment by a corporate officer or
officer of the institution) which states that the licensee will fund
and carry out the required decommissioning activities or, upon
issuance of an order by the Commission, the licensee will fund the
standby trust in the amount of the current cost estimates for
decommissioning.
E. (1) If, at any time, the licensee's most recent bond issuance
ceases to be rated in any category of ``A'' or above by either
Standard and Poor's or Moody's, the licensee shall notify the
Commission in writing within 20 days after publication of the change
by the rating service.
(2) If the licensee's most recent bond issuance ceases to be
rated in any category of ``A-'' and above by Standard and Poor's or
in any category of ``A3'' and above by Moody's, the licensee no
longer meets the requirements of Section II.A. of this appendix.
F. (1) A standby trust to protect public health and safety and
the environment must be established for decommissioning costs before
the self-guarantee agreement is submitted.
(2) The trustee and trust must be acceptable to the Commission.
An acceptable trustee includes an appropriate State or Federal
Government agency or an entity which has the authority to act as a
trustee and whose trust operations are regulated and examined by a
Federal or State agency. The Commission has the right to change the
trustee. An acceptable trust will meet the regulatory criteria
established in the part of these regulations that governs the
issuance of the license for which the guarantor has accepted the
obligation to pay for decommissioning costs.
G. The guarantor must agree that if the guarantor admits in
writing its inability to pay its debts generally, or makes a general
assignment for the benefit of creditors, or any proceeding is
instituted by or against the guarantor seeking to adjudicate it as
bankrupt or insolvent, or seeking dissolution, liquidation, winding-
up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency, or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver,
trustee, custodian, or other similar official for guarantor or for
any substantial part of its property, or the guarantor takes any
action to authorize or effect any of the actions stated in this
paragraph, then the Commission may:
(1) Declare that the financial assurance guaranteed by the self-
guarantee agreement is immediately due and payable to the standby
trust set up to protect the public health and safety and the
environment, without diligence, presentment, demand, protest or any
other notice of any kind, all of which are expressly waived by
guarantor; and
(2) Exercise any and all of its other rights under applicable
law.
H. The guarantor must notify the NRC, in writing, immediately
following the occurrence of any event listed in paragraph G of this
appendix, and must include a description of the event, including
major creditors, the amounts involved, and the actions taken to
assure that the amount of funds guaranteed by the self-guarantee
agreement for decommissioning will be transferred to the standby
trust as soon as possible.
PART 40--DOMESTIC LICENSING OF SOURCE MATERIAL
0
13. The authority citation for part 40 continues to read as follows:
Authority: Secs. 62, 63, 64, 65, 81, 161, 182, 183, 186, 68
Stat. 932, 933, 935, 948, 953, 954, 955, as amended, secs. 11e(2),
83, 84, Pub. L. 95-604, 92 Stat. 3033, as amended, 3039, sec. 234,
83 Stat. 444, as amended (42 U.S.C. 2014(e)(2), 2092, 2093, 2094,
2095, 2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282); sec. 274,
Pub. L. 86-373, 73 Stat. 688 (42 U.S.C. 2021); secs. 201, as
amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C.
5841, 5842, 5846); sec. 275, 92 Stat. 3021, as amended by Pub. L.
97-415, 96 Stat. 2067 (42 U.S.C. 2022); sec. 193, 104 Stat. 2835, as
amended by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C.
2243); sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note); Energy
Policy Act of 2005, Pub. L. 109-59, 119 Stat. 594 (2005).
Section 40.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat.
2951 as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123 (42
U.S.C. 5851). Section 40.31(g) also issued under sec. 122, 68 Stat.
939 (42 U.S.C. 2152). Section 40.46 also issued under sec. 184, 68
Stat. 954, as amended (42 U.S.C. 2234). Section 40.71 also issued
under sec. 187, 68 Stat. 955 (42 U.S.C. 2237).
0
14. In Sec. 40.36, a new paragraph (c)(5) is added, paragraph (d), the
introductory text in paragraph (e), and paragraphs (e)(1), the
introductory text of paragraph (e)(2) and paragraph (e)(3) are revised,
and a new paragraph (g) is added to read as follows:
Sec. 40.36 Financial assurance and recordkeeping for decommissioning.
* * * * *
(c) * * *
(5) If, in surveys made under 10 CFR 20.1501(a), residual
radioactivity in the facility and environment, including the
subsurface, is detected at levels that would, if left uncorrected,
prevent the site from meeting the 10 CFR 20.1402 criteria for
unrestricted use, the licensee must submit a decommissioning funding
plan within one year of when the survey is completed.
[[Page 35569]]
(d)(1) Each decommissioning funding plan must be submitted for
review and approval and must contain--
(i) A detailed cost estimate for decommissioning, in an amount
reflecting:
(A) The cost of an independent contractor to perform all
decommissioning activities;
(B) The cost of meeting the 10 CFR 20.1402 criteria for
unrestricted use, provided that, if the applicant or licensee can
demonstrate its ability to meet the provisions of 10 CFR 20.1403, the
cost estimate may be based on meeting the 10 CFR 20.1403 criteria;
(C) The volume of onsite subsurface material containing residual
radioactivity that will require remediation; and
(D) An adequate contingency factor.
(ii) Identification of and justification for using the key
assumptions contained in the DCE;
(iii) A description of the method of assuring funds for
decommissioning from paragraph (e) of this section, including means for
adjusting cost estimates and associated funding levels periodically
over the life of the facility;
(iv) A certification by the licensee that financial assurance for
decommissioning has been provided in the amount of the cost estimate
for decommissioning; and
(v) A signed original, or if permitted, a copy, of the financial
instrument obtained to satisfy the requirements of paragraph (e) of
this section (unless a previously submitted and accepted financial
instrument continues to cover the cost estimate for decommissioning).
(2) At the time of license renewal and at intervals not to exceed 3
years, the decommissioning funding plan must be resubmitted with
adjustments as necessary to account for changes in costs and the extent
of contamination. If the amount of financial assurance will be adjusted
downward, this can not be done until the updated decommissioning
funding plan is approved. The decommissioning funding plan must update
the information submitted with the original or prior approved plan, and
must specifically consider the effect of the following events on
decommissioning costs:
(i) Spills of radioactive material producing additional residual
radioactivity in onsite subsurface material;
(ii) Waste inventory increasing above the amount previously
estimated;
(iii) Waste disposal costs increasing above the amount previously
estimated;
(iv) Facility modifications;
(v) Changes in authorized possession limits;
(vi) Actual remediation costs that exceed the previous cost
estimate;
(vii) Onsite disposal; and
(viii) Use of a settling pond.
(e) The financial instrument must include the licensee's name,
license number, and docket number; and the name, address, and other
contact information of the issuer, and, if a trust is used, the
trustee. When any of the foregoing information changes, the licensee
must, within 30 days, submit financial instruments reflecting such
changes. The financial instrument submitted must be a signed original
or signed original duplicate, except where a copy is specifically
permitted. Financial assurance for decommissioning must be provided by
one or more of the following methods:
(1) Prepayment. Prepayment is the deposit before the start of
operation into an account segregated from licensee assets and outside
the licensee's administrative control of cash or liquid assets such
that the amount of funds would be sufficient to pay decommissioning
costs. Prepayment must be made into a trust account, and the trustee
and the trust must be acceptable to the Commission.
(2) A surety method, insurance, or other guarantee method. These
methods guarantee that decommissioning costs will be paid. A surety
method may be in the form of a surety bond, or letter of credit. A
parent company guarantee of funds for decommissioning costs based on a
financial test may be used if the guarantee and test are as contained
in Appendix A to this part. For commercial corporations that issue
bonds, a guarantee of funds by the applicant or licensee for
decommissioning costs based on a financial test may be used if the
guarantee and test are as contained in Appendix C to this part. For
commercial companies that do not issue bonds, a guarantee of funds by
the applicant or licensee for decommissioning costs may be used if the
guarantee and test are as contained in Appendix D to this part. For
nonprofit entities, such as colleges, universities, and nonprofit
hospitals, a guarantee of funds by the applicant or licensee may be
used if the guarantee and test are as contained in Appendix E to this
part. Except for an external sinking fund, a parent company guarantee
or guarantee by the applicant or licensee may not be used in
combination with any other financial methods used to satisfy the
requirements of this section. A guarantee by the applicant or licensee
may not be used in any situation where the applicant or licensee has a
parent company holding majority control of the voting stock of the
company. Any surety method or insurance used to provide financial
assurance for decommissioning must contain the following conditions:
* * * * *
(3) An external sinking fund in which deposits are made at least
annually, coupled with a surety method, insurance, or other guarantee
method, the value of which may decrease by the amount being accumulated
in the sinking fund. An external sinking fund is a fund established and
maintained by setting aside funds periodically in an account segregated
from licensee assets and outside the licensee's administrative control
in which the total amount of funds would be sufficient to pay
decommissioning costs at the time termination of operation is expected.
An external sinking fund must be in the form of a trust. If the other
guarantee method is used, no surety or insurance may be combined with
the external sinking fund. The surety, insurance, or other guarantee
provisions must be as stated in paragraph (e)(2) of this section.
* * * * *
(g) In providing financial assurance under this section, each
licensee must use the financial assurance funds only for
decommissioning activities and each licensee must monitor the balance
of funds held to account for market variations. The licensee must
replenish the funds, and report such actions to the NRC, as follows:
(1) If, at the end of a calendar quarter, the fund balance is below
the amount necessary to cover the cost of decommissioning, but is not
below 75 percent of the cost, the licensee must increase the balance to
cover the cost, and must do so within 30 days after the end of the
calendar quarter.
(2) If, at any time, the fund balance falls below 75 percent of the
amount necessary to cover the cost of decommissioning, the licensee
must increase the balance to cover the cost, and must do so within 30
days of the occurrence.
(3) Within 30 days of taking the actions required by paragraph
(g)(1) or (g)(2) of this section, the licensee must provide a written
report of such actions to the Director, Office of Federal and State
Materials and Environmental Management Programs, and state the new
balance of the fund.
0
15. In Sec. 40.46, the current paragraph is designated as paragraph
(a) and a new paragraph (b) is added to read as follows:
[[Page 35570]]
Sec. 40.46 Inalienability of licenses.
* * * * *
(b) An application for transfer of license must include:
(1) The identity, technical and financial qualifications of the
proposed transferee; and
(2) Financial assurance for decommissioning information required by
Sec. 40.36 or Appendix A to this part, as applicable.
0
16. In Appendix A to part 40, Section II, Criterion 9 is revised to
read as follows:
Appendix A to Part 40--Criteria Relating to the Operation of Uranium
Mills and the Disposition of Tailings or Wastes Produced by the
Extraction or Concentration of Source Material From Ores Processed
Primarily for Their Source Material Content
* * * * *
II. * * *
Criterion 9--(a) Financial surety arrangements must be
established by each mill operator before the commencement of
operations to assure that sufficient funds will be available to
carry out the decontamination and decommissioning of the mill and
site and for the reclamation of any tailings or waste disposal
areas. The amount of funds to be ensured by such surety arrangements
must be based on Commission-approved cost estimates in a Commission-
approved plan, or a proposed revision to the plan submitted to the
Commission for approval, if the proposed revision contains a higher
cost estimate, for:
(1) Decontamination and decommissioning of mill buildings and
the milling site to levels which allow unrestricted use of these
areas upon decommissioning, and
(2) The reclamation of tailings and/or waste areas in accordance
with technical criteria delineated in Section I of this appendix.
(b) Each cost estimate must contain--
(1) A detailed cost estimate for decontamination,
decommissioning, and reclamation, in an amount reflecting:
(i) The cost of an independent contractor to perform the
decontamination, decommissioning and reclamation activities; and
(ii) An adequate contingency factor;
(2) An estimate of the amount of radioactive contamination in
onsite subsurface material;
(3) Identification of and justification for using the key
assumptions contained in the DCE; and
(4) A description of the method of assuring funds for
decontamination, decommissioning, and reclamation.
(c) The licensee shall submit this plan in conjunction with an
environmental report that addresses the expected environmental
impacts of the milling operation, decommissioning and tailings
reclamation, and evaluates alternatives for mitigating these
impacts. The plan must include a signed original of the financial
instrument obtained to satisfy the surety arrangement requirements
of this criterion (unless a previously submitted and approved
financial instrument continues to cover the cost estimate for
decommissioning). The surety arrangement must also cover the cost
estimate and the payment of the charge for long-term surveillance
and control required by Criterion 10 of this section.
(d) To avoid unnecessary duplication and expense, the Commission
may accept financial sureties that have been consolidated with
financial or surety arrangements established to meet requirements of
other Federal or state agencies and/or local governing bodies for
decommissioning, decontamination, reclamation, and long-term site
surveillance and control, provided such arrangements are considered
adequate to satisfy these requirements and that the portion of the
surety which covers the decommissioning and reclamation of the mill,
mill tailings site and associated areas, and the long-term funding
charge is clearly identified and committed for use in accomplishing
these activities.
(e) The licensee's surety mechanism will be reviewed annually by
the Commission to assure, that sufficient funds would be available
for completion of the reclamation plan if the work had to be
performed by an independent contractor.
(f) The amount of surety liability should be adjusted to
recognize any increases or decreases resulting from:
(1) Inflation;
(2) Changes in engineering plans;
(3) Activities performed;
(4) Spills, leakage or migration of radioactive material
producing additional contamination in onsite subsurface material
that must be remediated to meet applicable remediation criteria;
(5) Waste inventory increasing above the amount previously
estimated;
(6) Waste disposal costs increasing above the amount previously
estimated;
(7) Facility modifications;
(8) Changes in authorized possession limits;
(9) Actual remediation costs that exceed the previous cost
estimate;
(10) Onsite disposal; and
(11) Any other conditions affecting costs.
(g) Regardless of whether reclamation is phased through the life
of the operation or takes place at the end of operations, an
appropriate portion of surety liability must be retained until final
compliance with the reclamation plan is determined.
(h) The appropriate portion of surety liability retained until
final compliance with the reclamation plan is determined will be at
least sufficient at all times to cover the costs of decommissioning
and reclamation of the areas that are expected to be disturbed
before the next license renewal. The term of the surety mechanism
must be open ended, unless it can be demonstrated that another
arrangement would provide an equivalent level of assurance. This
assurance would be provided with a surety instrument which is
written for a specified time (e.g., 5 years) and which must be
automatically renewed unless the surety notifies the beneficiary
(the Commission or the State regulatory agency) and the principal
(the licensee) with reasonable time (e.g., 90 days) before the
renewal date of their intention not to renew. In such a situation
the surety requirement still exists and the licensee would be
required to submit an acceptable replacement surety within a brief
time to allow at least 60 days for the regulatory agency to collect.
(i) Proof of forfeiture must not be necessary to collect the
surety. In the event that the licensee can not provide an acceptable
replacement surety within the required time, the surety shall be
automatically collected before its expiration. The surety instrument
must provide for collection of the full face amount immediately on
demand without reduction for any reason, except for trustee fees and
expenses provided for in a trust agreement, and that the surety will
not refuse to make full payment. The conditions described previously
would have to be clearly stated on any surety instrument which is
not open-ended, and must be agreed to by all parties. Financial
surety arrangements generally acceptable to the Commission are:
(1) Trust funds;
(2) Surety bonds;
(3) Irrevocable letters of credit; and
(4) Combinations of the financial surety arrangements or other
types of arrangements as may be approved by the Commission. If a
trust is not used, then a standby trust must be set up to receive
funds in the event the Commission or State regulatory agency
exercises its right to collect the surety. The surety arrangement
and the surety or trustee, as applicable, must be acceptable to the
Commission. Self insurance, or any arrangement which essentially
constitutes self insurance (e.g., a contract with a State or Federal
agency), will not satisfy the surety requirement because this
provides no additional assurance other than that which already
exists through license requirements.
* * * * *
PART 50--DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION
FACILITIES.
0
17. 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);
sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note); Energy Policy Act
of 2005, Pub. L. 109-58, 119 Stat. 194 (2005). Section 50.7 also
issued under Pub. L. 95-601, sec. 10, 92 Stat. 2951 as amended by
Pub. L. 102-486, Sec. 2902, 106 Stat. 3123 (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
[[Page 35571]]
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 50.80-50.81 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
18. In Sec. 50.75, the introductory text of paragraph (e)(1)(iii)(A),
and paragraphs (f)(1) and (f)(2) are revised to read as follows:
Sec. 50.75 Reporting and recordkeeping for decommissioning planning.
* * * * *
(e) * * *
(1) * * *
(iii) * * *
(A) These methods guarantee that decommissioning costs will be
paid. A surety method may be in the form of a surety bond, or letter of
credit. Any surety method or insurance used to provide financial
assurance for decommissioning must contain the following conditions:
* * * * *
(f)(1) Each power reactor licensee shall report, on a calendar-year
basis, to the NRC by March 31, 1999, and at least once every 2 years
thereafter on the status of its decommissioning funding for each
reactor or part of a reactor that it owns. However, each holder of a
combined license under part 52 of this chapter need not begin reporting
until the date that the Commission has made the finding under Sec.
52.103(g) of this chapter. The information in this report must include,
at a minimum, the amount of decommissioning funds estimated to be
required pursuant to 10 CFR 50.75(b) and (c); the amount of
decommissioning funds accumulated to the end of the calendar year
preceding the date of the report; a schedule of the annual amounts
remaining to be collected; the assumptions used regarding rates of
escalation in decommissioning costs, rates of earnings on
decommissioning funds, and rates of other factors used in funding
projections; any contracts upon which the licensee is relying pursuant
to paragraph (e)(1)(v) of this section; any modifications occurring to
a licensee's current method of providing financial assurance since the
last submitted report; and any material changes to trust agreements. If
any of the preceding items is not applicable, the licensee should so
state in its report. Any licensee for a plant that is within 5 years of
the projected end of its operation, or where conditions have changed
such that it will close within 5 years (before the end of its licensed
life), or that has already closed (before the end of its licensed
life), or that is involved in a merger or an acquisition shall submit
this report annually.
(2) Each power reactor licensee shall report, on a calendar-year
basis, to the NRC by March 31, 1999, and at least once every 2 years
thereafter on the status of its decommissioning funding for each
reactor or part of a reactor that it owns. The information in this
report must include, at a minimum, the amount of decommissioning funds
estimated to be required pursuant to 10 CFR 50.75(b) and (c); the
amount of decommissioning funds accumulated to the end of the calendar
year preceding the date of the report; a schedule of the annual amounts
remaining to be collected; the assumptions used regarding rates of
escalation in decommissioning costs, rates of earnings on
decommissioning funds, and rates of other factors used in funding
projections; any contracts upon which the licensee is relying pursuant
to paragraph (e)(1)(v) of this section; any modifications occurring to
a licensee's current method of providing financial assurance since the
last submitted report; and any material changes to trust agreements. If
any of the preceding items is not applicable, the licensee should so
state in its report. Any licensee for a plant that is within 5 years of
the projected end of its operation, or where conditions have changed
such that it will close within 5 years (before the end of its licensed
life), or that has already closed (before the end of its licensed
life), or that is involved in a merger or an acquisition shall submit
this report annually.
* * * * *
0
19. In Sec. 50.82, paragraph (a)(4)(i) is revised, and paragraphs
(a)(8)(v), (a)(8)(vi), and (a)(8)(vii) are added to read as follows:
Sec. 50.82 Termination of license.
* * * * *
(a) * * *
(4)(i) Within 2 years following permanent cessation of operations,
the licensee shall submit a post-shutdown decommissioning activities
report (PSDAR) to the NRC, and a copy to the affected State(s). The
PSDAR must contain a description of the planned decommissioning
activities along with a schedule for their accomplishment, a discussion
that provides the reasons for concluding that the environmental impacts
associated with site-specific decommissioning activities will be
bounded by appropriate previously issued environmental impact
statements, and a site-specific DCE, including the projected cost of
managing irradiated fuel.
* * * * *
(8) * * *
(v) After submitting its site-specific DCE required by paragraph
(a)(4)(i) of this section, and until the licensee has completed its
final radiation survey and demonstrated that residual radioactivity has
been reduced to a level that permits termination of its license, the
licensee must annually submit to the NRC, by March 31, a financial
assurance status report. The report must include the following
information, current through the end of the previous calendar year:
(A) The amount spent on decommissioning, both cumulative and over
the previous calendar year, the remaining balance of any
decommissioning funds, and the amount provided by other financial
assurance methods being relied upon;
(B) An estimate of the costs to complete decommissioning,
reflecting any difference between actual and estimated costs for work
performed during the year, and the decommissioning criteria upon which
the estimate is based;
(C) Any modifications occurring to a licensee's current method of
providing financial assurance since the last submitted report; and
(D) Any material changes to trust agreements or financial assurance
contracts.
(vi) If the sum of the balance of any remaining decommissioning
funds, plus earnings on such funds calculated at not greater than a 2
percent real rate of return, together with the amount provided by other
financial assurance methods being relied upon, does not cover the
estimated cost to complete the decommissioning, the financial assurance
status report must include additional financial assurance to cover the
estimated cost of completion.
(vii) After submitting its site-specific DCE required by paragraph
(a)(4)(i) of this section, the licensee must annually submit to the
NRC, by March 31, a report on the status of its funding for managing
irradiated fuel. The report must include the following information,
current through the end of the previous calendar year:
(A) The amount of funds accumulated to cover the cost of managing
the irradiated fuel;
(B) The projected cost of managing irradiated fuel until title to
the fuel and possession of the fuel is transferred to the Secretary of
Energy; and
[[Page 35572]]
(C) If the funds accumulated do not cover the projected cost, a
plan to obtain additional funds to cover the cost.
* * * * *
PART 70--DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL
0
20. The authority citation for Part 70 continues to read as follows:
Authority: Secs. 51, 53, 161, 182, 183, 68 Stat. 929, 930, 948,
953, 954, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C.
2071, 2073, 2201, 2232, 2233, 2282, 2297f); secs. 201, as amended,
202, 204, 206, 88 Stat. 1242, as amended, 1244, 1245, 1246 (42
U.S.C. 5841, 5842, 5845, 5846). Sec. 193, 104 Stat. 2835, as amended
by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C. 2243); sec.
1704, 112 Stat. 2750 (44 U.S.C. 3504 note).
Sections 70.1(c) and 70.20a(b) also issued under secs. 135, 141,
Pub. L. 97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161).
Section 70.7 is also issued under Pub. L. 95-601, sec. 10, 92 Stat.
2951 as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123 (42
U.S.C. 5851). Section 70.21(g) also issued under sec. 122, 68 Stat.
939 (42 U.S.C. 2152). Section 70.31 also issued under sec. 57d, Pub.
L. 93-377, 88 Stat. 475 (42 U.S.C. 2077). Sections 70.36 and 70.44
also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C.
2234). Section 70.81 also issued under secs. 186, 187, 68 Stat. 955
(42 U.S.C. 2236, 2237). Section 70.82 also issued under sec. 108, 68
Stat. 939, as amended (42 U.S.C. 2138).
0
21. In Sec. 70.25, a new paragraph (c)(5) is added, paragraph (e), the
introductory text in paragraph (f), and paragraph (f)(1), the
introductory text of paragraph (f)(2) and paragraph (f)(3) are revised,
and a new paragraph (h) is added to read as follows:
Sec. 70.25 Financial assurance and recordkeeping for decommissioning.
* * * * *
(c) * * *
(5) If, in surveys made under 10 CFR 20.1501(a), residual
radioactivity in the facility and environment, including the
subsurface, is detected at levels that would, if left uncorrected,
prevent the site from meeting the 10 CFR 20.1402 criteria for
unrestricted use, the licensee must submit a decommissioning funding
plan within one year of when the survey is completed.
* * * * *
(e)(1) Each decommissioning funding plan must be submitted for
review and approval and must contain--
(i) A detailed cost estimate for decommissioning, in an amount
reflecting:
(A) The cost of an independent contractor to perform all
decommissioning activities;
(B) The cost of meeting the 10 CFR 20.1402 criteria for
unrestricted use, provided that, if the applicant or licensee can
demonstrate its ability to meet the provisions of 10 CFR 20.1403, the
cost estimate may be based on meeting the 10 CFR 20.1403 criteria;
(C) The volume of onsite subsurface material containing residual
radioactivity that will require remediation; and
(D) An adequate contingency factor.
(ii) Identification of and justification for using the key
assumptions contained in the DCE;
(iii) A description of the method of assuring funds for
decommissioning from paragraph (f) of this section, including means for
adjusting cost estimates and associated funding levels periodically
over the life of the facility;
(iv) A certification by the licensee that financial assurance for
decommissioning has been provided in the amount of the cost estimate
for decommissioning; and
(v) A signed original, or, if permitted, a copy, of the financial
instrument obtained to satisfy the requirements of paragraph (f) of
this section (unless a previously submitted and accepted financial
instrument continues to cover the cost estimate for decommissioning).
(2) At the time of license renewal and at intervals not to exceed 3
years, the decommissioning funding plan must be resubmitted with
adjustments as necessary to account for changes in costs and the extent
of contamination. If the amount of financial assurance will be adjusted
downward, this can not be done until the updated decommissioning
funding plan is approved. The decommissioning funding plan must update
the information submitted with the original or prior approved plan, and
must specifically consider the effect of the following events on
decommissioning costs:
(i) Spills of radioactive material producing additional residual
radioactivity in onsite subsurface material;
(ii) Waste inventory increasing above the amount previously
estimated;
(iii) Waste disposal costs increasing above the amount previously
estimated;
(iv) Facility modifications;
(v) Changes in authorized possession limits;
(vi) Actual remediation costs that exceed the previous cost
estimate;
(vii) Onsite disposal; and
(viii) Use of a settling pond.
(f) The financial instrument must include the licensee's name,
license number, and docket number; and the name, address, and other
contact information of the issuer, and, if a trust is used, the
trustee. When any of the foregoing information changes, the licensee
must, within 30 days, submit financial instruments reflecting such
changes. Financial assurance for decommissioning must be provided by
one or more of the following methods:
(1) Prepayment. Prepayment is the deposit before the start of
operation into an account segregated from licensee assets and outside
the licensee's administrative control of cash or liquid assets such
that the amount of funds would be sufficient to pay decommissioning
costs. Prepayment must be made into a trust account, and the trustee
and the trust must be acceptable to the Commission.
(2) A surety method, insurance, or other guarantee method. These
methods guarantee that decommissioning costs will be paid. A surety
method may be in the form of a surety bond, or letter of credit. A
parent company guarantee of funds for decommissioning costs based on a
financial test may be used if the guarantee and test are as contained
in Appendix A to this part. For commercial corporations that issue
bonds, a guarantee of funds by the applicant or licensee for
decommissioning costs based on a financial test may be used if the
guarantee and test are as contained in Appendix C to this part. For
commercial companies that do not issue bonds, a guarantee of funds by
the applicant or licensee for decommissioning costs may be used if the
guarantee and test are as contained in Appendix D to this part. For
nonprofit entities, such as colleges, universities, and nonprofit
hospitals, a guarantee of funds by the applicant or licensee may be
used if the guarantee and test are as contained in Appendix E to this
part. Except for an external sinking fund, a parent company guarantee
or a guarantee by the applicant or licensee may not be used in
combination with any other financial methods used to satisfy the
requirements of this section. A guarantee by the applicant or licensee
may not be used in any situation where the applicant or licensee has a
parent company holding majority control of the voting stock of the
company. Any surety method or insurance used to provide financial
assurance for decommissioning must contain the following conditions:
* * * * *
(3) An external sinking fund in which deposits are made at least
annually, coupled with a surety method, insurance, or other guarantee
method, the value of which may decrease by the amount being accumulated
in the sinking fund. An external sinking fund
[[Page 35573]]
is a fund established and maintained by setting aside funds
periodically in an account segregated from licensee assets and outside
the licensee's administrative control in which the total amount of
funds would be sufficient to pay decommissioning costs at the time
termination of operation is expected. An external sinking fund must be
in the form of a trust. If the other guarantee method is used, no
surety or insurance may be combined with the external sinking fund. The
surety, insurance, or other guarantee provisions must be as stated in
paragraph (f)(2) of this section.
* * * * *
(h) In providing financial assurance under this section, each
licensee must use the financial assurance funds only for
decommissioning activities and each licensee must monitor the balance
of funds held to account for market variations. The licensee must
replenish the funds, and report such actions to the NRC, as follows:
(1) If, at the end of a calendar quarter, the fund balance is below
the amount necessary to cover the cost of decommissioning, but is not
below 75 percent of the cost, the licensee must increase the balance to
cover the cost, and must do so within 30 days after the end of the
calendar quarter.
(2) If, at any time, the fund balance falls below 75 percent of the
amount necessary to cover the cost of decommissioning, the licensee
must increase the balance to cover the cost, and must do so within 30
days of the occurrence.
(3) Within 30 days of taking the actions required by paragraph
(h)(1) or (h)(2) of this section, the licensee must provide a written
report of such actions to the Director, Office of Federal and State
Materials and Environmental Management Programs, and state the new
balance of the fund.
0
22. In Sec. 70.36, the current paragraph is designated as paragraph
(a) and a new paragraph (b) is added to read as follows:
Sec. 70.36 Inalienability of licenses.
* * * * *
(b) An application for transfer of license must include:
(1) The identity, technical and financial qualifications of the
proposed transferee; and
(2) Financial assurance for decommissioning information required by
Sec. 70.25.
PART 72--LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF
SPENT NUCLEAR FUEL, HIGH-LEVEL RADIOACTIVE WASTE, AND REACTOR-
RELATED GREATER THAN CLASS C WASTE
0
23. The authority citation for part 72 continues to read as follows:
Authority: Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183,
184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953,
954, 955, as amended; sec. 234, 83 Stat. 444, as amended (42 U.S.C.
2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2232, 2233,
2234, 2236, 2237, 2238, 2282); sec. 274, Pub. L. 86-373, 73 Stat.
688, as amended (42 U.S.C. 2021); sec. 201, as amended; 202, 206, 88
Stat. 1242, as amended; 1244, 1246 (42 U.S.C. 5841, 5842, 5846);
Pub. L. 95-601, sec. 10, 92 Stat. 2951, as amended by Pub. L. 102-
486, sec. 7902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 102, Pub. L.
91-190, 83 Stat. 853 (42 U.S.C. 4332); secs. 131, 132, 133, 135,
137, 141, Pub. L. 97-425, 96 Stat. 2229, 2230, 2232, 2241; sec. 148,
Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10151, 10152, 10153,
10155, 10157, 10161, 10168); sec. 1704, 112 Stat. 2750 (44 U.S.C.
3504 note); Energy Policy Act of 2005, Pub. L. 109-58, 119 Stat. 549
(2005).
Section 72.44(g) also issued under secs. 142(b) and 148(c), (d),
Pub. L. 100-203, 101 Stat. 1330-232, 1330-236 (42 U.S.C. 10162(b),
10168(c), (d)). Section 72.46 also issued under sec. 189, 68 Stat.
955 (42 U.S.C. 2239); sec. 134, Pub. L. 97-425, 96 Stat. 2230 (42
U.S.C. 10154). Section 72.96(d) also issued under sec. 145(g), Pub.
L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10165(g)). Subpart J also
issued under secs. 2(2), 2(15), 2(19), 117(a), 141(h), Pub. L. 97-
425, 96 Stat. 2202, 2203, 2204, 2222, 2224 (42 U.S.C. 10101,
10137(a), 10161(h)). Subparts K and L are also issued under sec.
133, 98 Stat. 2230 (42 U.S.C. 10153) and sec. 218(a), 96 Stat. 2252
(42 U.S.C. 10198).
0
24. In Sec. 72.13, paragraph (c) is revised to read as follows:
Sec. 72.13 Applicability.
* * * * *
(c) The following sections apply to activities associated with a
general license: 72.1; 72.2(a)(1), (b), (c), and (e); 72.3 through
72.6(c)(1); 72.7 through 72.13(a) and (c); 72.30(b), (c), (d), (e) and
(f); 72.32(c) and (d); 72.44(b) and (f); 72.48; 72.50(a); 72.52(a),
(b), (d), and (e); 72.60; 72.62; 72.72 through 72.80(f); 72.82 through
72.86; 72.104; 72.106; 72.122; 72.124; 72.126; 72.140 through 72.176;
72.190; 72.194; 72.210 through 72.220, and 72.240(a).
* * * * *
0
25. In Sec. 72.30, paragraph (b) is revised, paragraph (c) is
redesignated as paragraph (e) and the introductory text of the newly
redesignated paragraph (e), paragraphs (e)(1), the introductory text of
paragraph (e)(2) and paragraph (e)(3) are revised, paragraph (e)(5) is
revised, paragraph (d) is redesignated as paragraph (f) and the newly
redesignated paragraphs (f)(3)(ii) and (f)(4) are revised, and new
paragraphs (c), (d), and (g) are added to read as follows:
Sec. 72.30 Financial assurance and recordkeeping for decommissioning.
* * * * *
(b) Each holder of, or applicant for, a license under this part
must submit for NRC review and approval a decommissioning funding plan
that must contain:
(1) Information on how reasonable assurance will be provided that
funds will be available to decommission the ISFSI or MRS.
(2) A detailed cost estimate for decommissioning, in an amount
reflecting:
(i) The cost of an independent contractor to perform all
decommissioning activities;
(ii) An adequate contingency factor; and
(iii) The cost of meeting the Sec. 20.1402 of this chapter
criteria for unrestricted use, provided that, if the applicant or
licensee can demonstrate its ability to meet the provisions of Sec.
20.1403 of this chapter, the cost estimate may be based on meeting the
Sec. 20.1403 criteria.
(3) Identification of and justification for using the key
assumptions contained in the DCE.
(4) A description of the method of assuring funds for
decommissioning from paragraph (e) of this section, including means for
adjusting cost estimates and associated funding levels periodically
over the life of the facility.
(5) The volume of onsite subsurface material containing residual
radioactivity that will require remediation to meet the criteria for
license termination.
(6) A certification that financial assurance for decommissioning
has been provided in the amount of the cost estimate for
decommissioning.
(c) At the time of license renewal and at intervals not to exceed 3
years, the decommissioning funding plan must be resubmitted with
adjustments as necessary to account for changes in costs and the extent
of contamination. If the amount of financial assurance will be adjusted
downward, this can not be done until the updated decommissioning
funding plan is approved. The decommissioning funding plan must update
the information submitted with the original or prior approved plan and
must specifically consider the effect of the
[[Page 35574]]
following events on decommissioning costs:
(1) Spills of radioactive material producing additional residual
radioactivity in onsite subsurface material.
(2) Facility modifications.
(3) Changes in authorized possession limits.
(4) Actual remediation costs that exceed the previous cost
estimate.
(d) If, in surveys made under 10 CFR 20.1501(a), residual
radioactivity in soils or groundwater is detected at levels that would
require such radioactivity to be reduced to a level permitting release
of the property for unrestricted use under the decommissioning
requirements in part 20 of this chapter, the licensee must submit a new
or revised decommissioning funding plan within one year of when the
survey is completed.
(e) The financial instrument must include the licensee's name,
license number, and docket number; and the name, address, and other
contact information of the issuer, and, if a trust is used, the
trustee. When any of the foregoing information changes, the licensee
must, within 30 days, submit financial instruments reflecting such
changes. Financial assurance for decommissioning must be provided by
one or more of the following methods:
(1) Prepayment. Prepayment is the deposit before the start of
operation into an account segregated from licensee assets and outside
the licensee's administrative control of cash or liquid assets such
that the amount of funds would be sufficient to pay decommissioning
costs. Prepayment must be made into a trust account, and the trustee
and the trust must be acceptable to the Commission.
(2) A surety method, insurance, or other guarantee method. These
methods guarantee that decommissioning costs will be paid. A surety
method may be in the form of a surety bond, or letter of credit. A
parent company guarantee of funds for decommissioning costs based on a
financial test may be used if the guarantee and test are as contained
in Appendix A to part 30 of this chapter. For commercial corporations
that issue bonds, a guarantee of funds by the applicant or licensee for
decommissioning costs based on a financial test may be used if the
guarantee and test are as contained in Appendix C to part 30 of this
chapter. For commercial companies that do not issue bonds, a guarantee
of funds by the applicant or licensee for decommissioning costs may be
used if the guarantee and test are as contained in Appendix D to part
30 of this chapter. Except for an external sinking fund, a parent
company guarantee or a guarantee by the applicant or licensee may not
be used in combination with other financial methods to satisfy the
requirements of this section. A guarantee by the applicant or licensee
may not be used in any situation where the applicant or licensee has a
parent company holding majority control of the voting stock of the
company. Any surety method or insurance used to provide financial
assurance for decommissioning must contain the following conditions:
* * * * *
(3) An external sinking fund in which deposits are made at least
annually, coupled with a surety method, insurance, or other guarantee
method, the value of which may decrease by the amount being accumulated
in the sinking fund. An external sinking fund is a fund established and
maintained by setting aside funds periodically in an account segregated
from licensee assets and outside the licensee's administrative control
in which the total amount of funds would be sufficient to pay
decommissioning costs at the time termination of operation is expected.
An external sinking fund must be in the form of a trust. If the other
guarantee method is used, no surety or insurance may be combined with
the external sinking fund. The surety, insurance, or other guarantee
provisions must be as stated in paragraph (e)(2) of this section.
* * * * *
(5) In the case of licensees who are issued a power reactor license
under part 50 of this chapter or ISFSI licensees who are an electric
utility, as defined in part 50 of this chapter, with a specific license
issued under this part, the methods of 10 CFR 50.75(b), (e), and (h),
as applicable. In the event that funds remaining to be placed into the
licensee's ISFSI decommissioning external sinking fund are no longer
approved for recovery in rates by a competent rate making authority,
the licensee must make changes to provide financial assurance using one
or more of the methods stated in paragraphs (1) through (4) of this
section.
(f) * * *
(3) * * *
(ii) All areas outside of restricted areas that require
documentation under Sec. 72.30(f)(1).
(4) Records of the cost estimate performed for the decommissioning
funding plan and records of the funding method used for assuring funds
are available for decommissioning.
(g) In providing financial assurance under this section, each
licensee must use the financial assurance funds only for
decommissioning activities and each licensee must monitor the balance
of funds held to account for market variations. The licensee must
replenish the funds, and report such actions to the NRC, as follows:
(1) If, at the end of a calendar year, the fund balance is below
the amount necessary to cover the cost of decommissioning, but is not
below 75 percent of the cost, the licensee must increase the balance to
cover the cost, and must do so within 30 days after the end of the
calendar year.
(2) If, at any time, the fund balance falls below 75 percent of the
amount necessary to cover the cost of decommissioning, the licensee
must increase the balance to cover the cost, and must do so within 30
days of the occurrence.
(3) Within 30 days of taking the actions required by paragraph
(g)(1) or (g)(2) of this section, the licensee must provide a written
report of such actions to the Director, Office of Federal and State
Materials and Environmental Management Programs, and state the new
balance of the fund.
0
26. In Sec. 72.50, paragraph (b)(3) is added to read as follows:
Sec. 72.50 Transfer of license.
* * * * *
(b) * * *
(3) The application shall describe the financial assurance that
will be provided for the decommissioning of the facility under Sec.
72.30.
* * * * *
0
27. In Sec. 72.80, paragraphs (e) and (f) are revised to read as
follows:
Sec. 72.80 Other records and reports.
* * * * *
(e) Before license termination, the licensee shall forward records
required by Sec. 20.2103(b)(4), of this chapter, and Sec. 72.30(f) to
the appropriate NRC Regional Office.
(f) If licensed activities are transferred or assigned in
accordance with Sec. 72.44(b)(1), the licensee shall transfer the
records required by Sec. 20.2103(b)(4), of this chapter, and Sec.
72.30(f) to the new licensee and the new licensee will be responsible
for maintaining these records until the license is terminated.
* * * * *
Dated at Rockville, Maryland, this 2nd day of June 2011.
[[Page 35575]]
For the Nuclear Regulatory Commission.
Andrew L. Bates,
Acting Secretary for the Commission.
[FR Doc. 2011-14267 Filed 6-16-11; 8:45 am]
BILLING CODE 7590-01-P