[Federal Register Volume 79, Number 178 (Monday, September 15, 2014)]
[Notices]
[Pages 55019-55022]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-21932]


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NUCLEAR REGULATORY COMMISSION

[Docket Nos. 50-361 and 50-362; NRC-2014-0170]


Southern California Edison Company; San Onofre Nuclear Generating 
Station, Units 2 and 3

AGENCY: Nuclear Regulatory Commission.

ACTION: Exemption; issuance.

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SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) is issuing 
exemptions in response to a February 13, 2014, request from Southern 
California Edison Company (SCE, or the licensee), representing itself 
and the other owners. The exemptions would permit the use of San Onofre 
Nuclear Generating Station (SONGS), Units 2 and 3, decommissioning 
Trust funds for purposes other than decommissioning activities and 
would allow the licensee to use withdrawals from the decommissioning 
Trust funds without prior notification to the NRC. The NRC has reviewed 
the Trusts and determined that, at this time, there is reasonable 
assurance of sufficient financial resources in the Trusts to complete 
decommissioning activities.

ADDRESSES: Please refer to Docket ID NRC-2014-0170 when contacting the 
NRC about the availability of information regarding this document. You 
may access publicly-available information related to this document 
using any of the following methods:
     Federal Rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2014-0170. Address 
questions about NRC dockets to Carol Gallagher; telephone: 301-287-
3422; email: [email protected]. For technical questions, contact 
the individual(s) listed in the FOR FURTHER INFORMATION CONTACT section 
of this document.
     NRC's Agencywide Documents Access and Management System 
(ADAMS): You may access publicly available documents online in the 
ADAMS public documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select ``ADAMS Public Documents'' and 
then select ``Begin Web-based ADAMS Search.'' For problems with ADAMS, 
please contact the NRC's Public Document Room (PDR) reference staff at 
1-800-397-4209, 301-415-4737, or by email to [email protected]rc.gov. The 
ADAMS Accession number for each document referenced in this document 
(if that document is available in ADAMS) is provided the first time 
that a document is referenced.
     NRC's PDR: You may examine and purchase copies of public 
documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 
Rockville Pike, Rockville, Maryland 20852.

FOR FURTHER INFORMATION CONTACT: Thomas Wengert, Office of Nuclear 
Reactor Regulation, 301-415-4037; [email protected]; U.S. Nuclear 
Regulatory Commission, Washington, DC 20555-0001.

[[Page 55020]]


SUPPLEMENTARY INFORMATION:

I. Background

    Southern California Edison Company (SCE), San Diego Gas & Electric 
Company, City of Riverside Utilities Department, and the City of 
Anaheim, California, (the licensees), are the holders of Facility 
Operating License Nos. NPF-10 and NPF-15, for SONGS, Units 2 and 3, 
respectively. SCE is authorized to act as the agent of the other 
owners. By letter dated June 12, 2013 (ADAMS Accession No. 
ML131640201), SCE submitted a certification to the U.S. NRC indicating 
it permanently ceased power operations at the SONGS Units 2 and 3 on 
June 7, 2013. By letters dated July 22, 2013 (ADAMS Accession No. 
ML13204A304), and June 28, 2013 (ADAMS Accession No. ML13183A391), 
respectively, SCE certified that it had permanently defueled the SONGS 
Units 2 and 3 reactor vessels.
    The facility consists of two permanently shutdown and defueled 
pressurized-water reactors located in San Diego County, California.

II. Request/Action

    By letter dated February 13, 2014 (ADAMS Accession No. 
ML14051A632), SCE submitted a request for exemptions from Section 
50.82(a)(8)(i)(A) and Section 50.75(h)(2) of Part 50 of Title 10 of the 
Code of Federal Regulations (10 CFR). The exemptions from 10 CFR 
50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(2) would permit withdrawal and 
the use of a portion of the funds in the SCE Decommissioning Trust 
Funds (Trusts) for financing irradiated fuel management and site 
restoration activities. The licensee's requested exemption from 10 CFR 
50.75(h)(2) would permit Trust withdrawals to be made without prior 
notification of the NRC, in the same manner as withdrawals are made 
under 10 CFR 50.82(a)(8) for decommissioning activities. The licensee 
supplemented this exemption request by letter dated March 12, 2014 
(ADAMS Accession No. ML14078A028).
    The requirements of 10 CFR 50.82(a)(8)(i)(A) restrict the use of 
decommissioning Trust fund withdrawals to expenses for legitimate 
decommissioning activities consistent with the definition of 
decommissioning in 10 CFR 50.2. The definition of ``decommission'' in 
10 CFR 50.2 is as follows: to remove a facility or site safely from 
service and reduce residual radioactivity to a level that permits--
    (1) Release of the property for unrestricted use and termination of 
the license; or
    (2) Release of the property under restricted conditions and 
termination of the license.
    The definition does not include other activities, such as 
irradiated fuel management or site restoration activities. The 
requirements of 10 CFR 50.75(h)(2) also restrict the use of 
decommissioning Trust fund disbursements (other than for ordinary 
administrative costs and incidental expenses) to decommissioning 
expenses until final radiological decommissioning is completed. 
Therefore, exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 
50.75(h)(2) are needed to allow SCE to withdraw funds from the Trusts 
for activities other than decommissioning activities prior to 
completion of all radiological decommissioning activities.
    The requirements of 10 CFR 50.75(h)(2) further provide that, except 
for decommissioning withdrawals being made under 10 CFR 50.82(a)(8) or 
for payment of ordinary and incidental expenses, no disbursement may be 
made from the Trust without written notice to the NRC at least 30 
working days in advance. Therefore an exemption from 10 CFR 50.75(h)(2) 
is also needed to allow SCE to withdraw funds from the Trusts for 
activities other than decommissioning activities without prior NRC 
notification.

III. Discussion

    Pursuant to 10 CFR 50.12, the Commission may, upon application by 
any interested person or upon its own initiative, grant exemptions from 
the requirements of 10 CFR Part 50 when (1) the exemptions are 
authorized by law, will not present an undue risk to public health or 
safety, and are consistent with the common defense and security; and 
(2) any of the special circumstances listed in 10 CFR 50.12(a)(2) are 
present. These special circumstances include, among other things, the 
following:
    (a) Application of the regulation in the particular circumstances 
would not serve the underlying purpose of the rule or is not necessary 
to achieve the underlying purpose of the rule; or
    (b) Compliance would result in undue hardship or other costs that 
are significantly in excess of those contemplated when the regulation 
was adopted, or that are significantly in excess of those incurred by 
others similarly situated.

A. Authorized by Law

    These exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 
50.75(h)(2) would allow SCE to use a portion of the funds from the 
Trusts for activities other than decommissioning activities without 
prior notice to the NRC. As stated above, 10 CFR 50.12 allows the NRC 
to grant exemptions from the requirements of 10 CFR Part 50. The NRC 
staff has determined that granting of the licensee's proposed 
exemptions will not result in a violation of the Atomic Energy Act of 
1954, as amended, or the Commission's regulations. Therefore, the 
exemptions are authorized by law.

B. No Undue Risk to Public Health and Safety

    The underlying purposes of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 
50.75(h)(2) are to provide reasonable assurance that adequate funds 
will be available for radiological decommissioning of power reactors. 
Based on the site-specific cost estimate and the cash flow analysis, 
use of the Trusts in the proposed manner will not adversely impact 
SCE's ability to complete radiological decontamination within 60 years 
and terminate the SONGS licenses. Furthermore, exemption from 10 CFR 
50.75(h)(2) to allow the licensee to make withdrawals from the Trusts 
without prior written notification to the NRC should not affect the 
sufficiency of funds in the Trusts to accomplish radiological 
decontamination of the site.
    Based on the above, no new accident precursors are created by using 
the Trusts in the proposed manner. Thus, the probability of postulated 
accidents is not increased. Also, based on the above, the consequences 
of postulated accidents are not increased. No changes are being made in 
the types or amounts of effluents that may be released offsite. There 
is no significant increase in occupational or public radiation 
exposure. Therefore, there is no undue risk to public health and 
safety.

C. Consistent With the Common Defense and Security

    The proposed exemptions would allow SCE to use funds from the 
Trusts for irradiated fuel management and site restoration. Irradiated 
fuel management under 10 CFR 50.54(bb) is an integral part of the 
planned SCE decommissioning and final license termination process and 
will not adversely affect SCE's ability to physically secure the site 
or protect special nuclear material. This change to enable use of a 
portion of the funds from the Trusts for activities other than 
decommissioning activities will not alter the scope of, or availability 
of funding for the licensee's security program. Therefore, the common 
defense and security is not impacted by this exemption.

[[Page 55021]]

D. Special Circumstances

    Special circumstances, in accordance with 10 CFR 50.12(a)(2), are 
present whenever application of the regulation in the particular 
circumstances is not necessary to achieve the underlying purpose of the 
rule.
    The underlying purposes of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 
50.75(h)(2) are to provide reasonable assurance that adequate funds 
will be available for radiological decommissioning of power reactors. 
Strict application of these requirements would prohibit withdrawal of 
funds from the Trusts for activities other than decommissioning 
activities until final radiological decommissioning at SONGS, Units 2 
and 3 has been completed.
    The SONGS, Units 2 and 3 total Decommissioning Trust Funds balance 
as of December 31, 2013, was $3,926 million in 2013 dollars. The SCE 
analysis projects that the total radiological decommissioning cost of 
SONGS to be approximately $1,769 million (2013 dollars). As required by 
10 CFR 50.54(bb), SCE estimated the costs associated with the long-term 
irradiated fuel management at $1,487 million in (2013 dollars). The 
total expenditures for site restoration are estimated at $1,098 million 
(2013 dollars). The NRC staff performed an independent cash flow 
analysis of the Trusts through 2051 (assuming an annual real rate of 
return of 2%, as allowed by 10 CFR 50.75(e)(1)(ii)) and determined the 
projected earnings of the Trust. The staff confirmed that the current 
funds, planned future contributions and projected earnings of the 
Trusts provide reasonable assurance of adequate funding to complete all 
NRC required decommissioning activities, and that SCE's site-specific 
decommissioning cost analysis demonstrates adequate funds are available 
in the Trusts to also conduct irradiated fuel management and site 
restoration activities. The staff's review and conclusions are based on 
SCE's specific financial situation as described in the February 13, 
2014, and March 12, 2014, letters. Therefore, SCE has demonstrated 
reasonable assurance that sufficient funding will be available for 
radiological decommissioning, irradiated fuel management, and site 
restoration activities and that the exemptions from the requirements of 
10 CFR 50.82(a)(8)(i)(A) and 50.75(h)(2), with respect to the use of 
funds from the Trusts for irradiated fuel management and site 
restoration activities, will still achieve the underlying purposes of 
the rule.
    In its submittal, SCE also requested exemption from the 
requirements of 10 CFR 50.75(h)(2) concerning prior written 
notification to the NRC of withdrawals from the Trusts to fund 
activities other than decommissioning activities. The underlying 
purpose of notifying the NRC prior to withdrawal of funds from the 
Trusts is to provide opportunity for NRC intervention, when deemed 
necessary, if the withdrawals are for expenses other than those 
authorized by 10 CFR 50.75(h)(2) and 10 CFR 50.82(a)(8) that could 
result in insufficient funds in the Trust to accomplish radiological 
decontamination of the site.
    By granting the exemptions to 10 CFR 50.75(h)(2) and 10 CFR 
50.82(a)(8), the staff considers that withdrawals consistent with the 
licensee's submittal dated February 13, 2014, as supplemented on March 
12, 2014, are authorized. As stated previously, the NRC staff has 
determined that there are sufficient funds in the Trusts to complete 
legitimate radiological decommissioning activities and to conduct 
irradiated fuel management and site restoration activities. Pursuant to 
the annual reporting requirements in 10 CFR 50.82(a)(8)(v)-(vii), 
licensees are required to monitor and report the status of the 
decommissioning Trust fund and the funding status for managing 
irradiated fuel. These reports provide the NRC with awareness of and 
the ability to take action on any actual or potential funding 
deficiencies. The requested exemption would not allow withdrawal of 
funds from the SONGS Trusts for any other purpose that is not currently 
authorized in the regulations without prior notification to the NRC. 
Therefore, the granting of this exemption to 10 CFR 50.75(h)(2) to 
allow the licensee to make withdrawals from the Trusts without prior 
written notification to the NRC will still meet the underlying purpose 
of the regulation.
    Special circumstances, in accordance with 10 CFR 50.12(a)(2)(iii) 
are present whenever compliance would result in undue hardship or other 
costs that are significantly in excess of those contemplated when the 
regulation was adopted, or that are significantly in excess of those 
incurred by others similarly situated.
    The licensee states that the Trusts contain funds in excess of the 
estimated costs of radiological decommissioning and that these excess 
funds are needed for irradiated fuel management and site restoration 
activities. The NRC does not preclude use of funds from the 
decommissioning Trust in excess of those needed for radiological 
decommissioning for other purposes, such as irradiated fuel management 
or site restoration. The NRC has stated that funding for irradiated 
fuel management and other site restoration activities may be commingled 
in the decommissioning Trust provided the licensee is able to identify 
and account for the radiological decommissioning funds separately from 
the funds set aside for irradiated fuel management (see NRC Regulatory 
Issue Summary 2001-07, Rev 1, ``10 CFR 50.75 Reporting and 
Recordkeeping for Decommissioning Planning,'' dated January 8, 2009 
[ADAMS Accession No. ML083440158], and Regulatory Guide 1.184, Rev 1, 
``Decommissioning of Nuclear Power Reactors,'' [ADAMS Accession No. 
ML13144A840]). To prevent access to those excess funds in the Trusts 
because irradiated fuel management and site restoration are not 
associated with radiological decommissioning would create an 
unnecessary financial burden without any corresponding safety benefit. 
The adequacy of the Trusts to cover the cost of activities associated 
with irradiated fuel management and site restoration in addition to 
radiological decommissioning is supported by the NRC staff's site-
specific decommissioning cost analysis. If SCE cannot use its Trusts 
for irradiated fuel management and site restoration activities, it 
would need to obtain additional funding that would not be recoverable 
from the Trusts, or SCE would have to modify its decommissioning 
approach and methods. The NRC staff concludes that either outcome would 
impose an unnecessary and undue burden significantly in excess of that 
contemplated when the regulation was adopted.
    Therefore, since the underlying purposes of 10 CFR 
50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(2) would be achieved by allowing 
SCE to use a portion of the Trusts for irradiated fuel management and 
site restoration activities without prior NRC notification, and 
compliance with the rules would result in an undue hardship or other 
costs that are significantly in excess of those contemplated when the 
regulation was adopted, the special circumstances required by 10 CFR 
50.12(a)(2)(ii) and 10 CFR 50.12(a)(2)(iii) exist.

E. Environmental Considerations

    In accordance with 10 CFR 51.31(a), the Commission has determined 
that the granting of this exemption will not have a significant effect 
on the quality of the human environment, (see Environmental Assessment 
and Finding

[[Page 55022]]

of No Significant Impact published on July 23, 2014, 79 FR 42837).

IV. Conclusions

    Accordingly, the Commission has determined that, pursuant to 10 CFR 
50.12(a), the exemptions are authorized by law, will not present an 
undue risk to the public health and safety, and are consistent with the 
common defense and security. Also, special circumstances are present. 
Therefore, the Commission hereby grants SCE exemptions from the 
requirements of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(2) to 
allow withdrawals from the SONGS, Units 2 and 3 Trusts, for irradiated 
fuel management and site restoration activities without prior NRC 
notification.
    The exemptions are effective upon issuance.

    Dated at Rockville, Maryland, this 5th day of September 2014.

    For the Nuclear Regulatory Commission.
A. Louise Lund, Acting Director,
Division of Operating Reactor Licensing, Office of Nuclear Reactor 
Regulation.
[FR Doc. 2014-21932 Filed 9-12-14; 8:45 am]
BILLING CODE 7590-01-P