[Federal Register Volume 81, Number 79 (Monday, April 25, 2016)]
[Notices]
[Pages 24141-24145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09556]



[[Page 24141]]

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NUCLEAR REGULATORY COMMISSION

[Docket No. 50-271; NRC-2016-0017]


Entergy Nuclear Operations, Inc.; Vermont Yankee Nuclear Power 
Station

AGENCY: Nuclear Regulatory Commission.

ACTION: Exemption; issuance.

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SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) is issuing an 
exemption in response to a letter from Entergy Nuclear Operations, Inc. 
(ENO), dated April 17, 2014, requesting an exemption from the NRC's 
regulations regarding the required level of primary financial 
protection. An exemption from these regulations would permit Vermont 
Yankee Nuclear Power Station (VY) to reduce the required level of 
primary financial protection from $375,000,000 to $100,000,000, and to 
withdraw from participation in the secondary layer of financial 
protection, no earlier than April 15, 2016.

DATES: April 25, 2016.

ADDRESSES: Please refer to Docket ID NRC-2016-0017 when contacting the 
NRC about the availability of information regarding this document. You 
may obtain 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-2016-0017. Address 
questions about NRC dockets to Carol Gallagher; telephone: 301-415-
3463; email: [email protected]. For technical questions, contact 
the individual listed in the FOR FURTHER INFORMATION CONTACT section of 
this document.
     NRC's Agencywide Documents Access and Management System 
(ADAMS): You may obtain 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]. The 
ADAMS Accession number for each document referenced (if it 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: Jack D. Parrott, Office of Nuclear 
Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, 
Washington, DC 20555-0001; telephone: 301-415-6634, email: 
[email protected].

I. Background

    The VY site is a single unit facility located near the town of 
Vernon, Vermont. The site is situated in Windham County on the western 
shore of the Connecticut River, immediately upstream of the Vernon 
Hydroelectric Station. The VY facility employs a General Electric 
boiling water reactor nuclear steam supply system licensed to generate 
1,912 megawatts-thermal. The boiling water reactor and supporting 
facilities are owned and operated by Entergy Vermont Yankee, a 
subsidiary of ENO. The licensee, ENO, is the holder of the Vermont 
Yankee Renewed Facility Operating License No. DPR-28. The license 
provides, among other things, that the facility is subject to all 
rules, regulations, and orders of the NRC now or hereafter in effect.
    By letter dated September 23, 2013 (ADAMS Accession No. 
ML13273A204), ENO submitted a notification to the NRC indicating that 
it would permanently shut down Vermont Yankee in the fourth calendar 
quarter of 2014. On December 29, 2014, ENO permanently ceased power 
operations at VY. On January 12, 2015, ENO certified that it had 
permanently defueled the Vermont Yankee reactor vessel and placed the 
fuel in the Spent Fuel Pool (SFP) (ADAMS Accession No. ML15013A426). 
Accordingly, pursuant to Sec.  50.82(a)(2) of title 10 of the Code of 
Federal Regulations (10 CFR), the VY renewed facility operating license 
no longer authorizes operation of the reactor or emplacement or 
retention of fuel in the reactor vessel. However, the licensee is still 
authorized to possess and store irradiated nuclear fuel. Irradiated 
fuel is currently being stored onsite in a SFP and in independent spent 
fuel storage installation dry casks.

II. Request/Action

    Pursuant to 10 CFR 140.8, ``Specific exemptions,'' ENO has 
requested an exemption from 10 CFR 140.11(a)(4), by letter dated April 
17, 2014 (ADAMS Accession No. ML14111A400). The exemption from 10 CFR 
140.11(a)(4) would permit the licensee to reduce the required level of 
primary financial protection from $375,000,000 to $100,000,000, and to 
withdraw from participation in the secondary layer of financial 
protection (also known as the secondary retrospective rating pool for 
deferred premium charges), no earlier than April 15, 2016.
    The regulation in 10 CFR 140.11(a)(4) requires each licensee to 
have and maintain financial protection. For a single unit reactor site, 
which has a rated capacity of 100,000 kilowatts electric or more, 10 
CFR 140.11(a)(4) requires the licensee to maintain $375 million in 
primary financial protection. In addition, the licensee is required to 
participate in a secondary retrospective rating pool (secondary 
financial protection) that commits each licensee to additional 
indemnification for damages that may exceed primary insurance coverage. 
Participation in the secondary retrospective rating pool could 
potentially subject ENO to deferred premium charges up to a maximum 
total deferred premium of $121,255,000 with respect to any nuclear 
incident at any operating nuclear power plant, and up to a maximum 
annual deferred premium of $18,963,000 per incident.
    The licensee states that the risk of an offsite radiological 
release is significantly lower at a nuclear power reactor that has 
permanently shut down and defueled, when compared to an operating power 
reactor. Similarly, it states that the associated risk of offsite 
liability damages that require insurance indemnification is 
commensurately lower for permanently shut down and defueled plants. The 
licensee has therefore requested an exemption from 10 CFR 140.11(a)(4) 
to allow a reduction in offsite liability insurance coverage 
commensurate with the significantly reduced risks associated with a 
permanently defueled reactor.

III. Discussion

    Pursuant to 10 CFR 140.8, the Commission may, upon application of 
any interested person or upon its own initiative, grant such exemptions 
from the requirements of the regulations in 10 CFR part 140, when the 
exemptions are authorized by law and are otherwise in the public 
interest. The NRC staff has reviewed ENO's request for an exemption 
from 10 CFR 140.11(a)(4) and has concluded that the requested exemption 
is authorized by law and is otherwise in the public interest.
    The Price Anderson Act of 1957 (PAA) requires that nuclear power 
reactor licensees have insurance to compensate the public for damages 
arising from a nuclear incident. Specifically, the PAA requires 
licensees of facilities with a ``rated capacity of 100,000 electrical 
kilowatts or more'' to maintain the maximum amount of primary offsite 
liability insurance commercially available (currently,

[[Page 24142]]

$375,000,000) and a specified amount of secondary insurance coverage 
(currently, up to $121,255,000 per reactor). In the event of an 
accident causing offsite damages in excess of $375,000,000, each 
licensee would be assessed a prorated share of the excess damages, up 
to $121,255,000 per reactor, for a total of approximately $13 billion 
per nuclear incident. The NRC's regulations at 10 CFR 140.11(a)(4) 
implement these PAA insurance requirements and set forth the amount of 
primary and secondary insurance each power reactor licensee must have.
    As noted above, the PAA requirements with respect to primary and 
secondary insurance, and the implementing regulations at 10 CFR 
140.11(a)(4), apply to licensees of facilities with a ``rated capacity 
of 100,000 electrical kilowatts or more.'' When the NRC issues a 
license amendment to a decommissioning licensee to reflect the defueled 
status of the facility, the license amendment includes removal of the 
rated capacity of the reactor from the license. Accordingly, a reactor 
that is undergoing decommissioning has no ``rated capacity.'' Removal 
of the rated capacity from the facility of a decommissioning licensee, 
thus, allows the NRC to take the reactor licensee out of the category 
of reactor licensees that are required to maintain the maximum 
available insurance and to participate in the secondary retrospective 
insurance pool under the PAA, subject to a technical finding that 
lesser potential hazards exist at the facility after termination of 
operations.
    The financial protection limits of 10 CFR 140.11(a)(4) were 
established to require a licensee to maintain sufficient insurance, as 
specified under the PAA, to satisfy liability claims by members of the 
public for personal injury, property damage, and the legal cost 
associated with lawsuits, as the result of a nuclear accident at an 
operating reactor with a rated capacity of 100,000 kilowatts electric 
(or greater). Thus, the insurance levels established by this 
regulation, as required by the PAA, were associated with the risks and 
potential consequences of an accident at an operating reactor with a 
rated capacity of 100,000 kilowatts electric (or greater). The legal 
and associated technical basis for granting exemptions from 10 CFR part 
140 is set forth in SECY-93-127. The legal analysis underlying SECY-93-
127 concluded that, upon a technical finding that lesser potential 
hazards exist after termination of operations (and removal of the rated 
capacity), the Commission has the discretion under the PAA to reduce 
the amount of insurance required of a licensee undergoing 
decommissioning.
    As a technical matter, the fact that a reactor has permanently 
ceased operation is not itself determinative as to whether a licensee 
may cease providing the offsite liability coverage required by the PAA 
and 10 CFR 140.11(a)(4). In light of the presence of freshly discharged 
irradiated fuel in the spent fuel pool at a recently shutdown reactor, 
the primary consideration is the risk of offsite radiological release 
from a zirconium fire. That risk generally remains for about 15 to 18 
months of decay time for the fuel used in the last cycle of power 
operation. After that time, the offsite consequences of an offsite 
radiological release from a zirconium fire are negligible for shutdown 
reactors, but the spent fuel pool is still operational and an inventory 
of radioactive materials still exists onsite. Therefore, an evaluation 
of the potential for offsite damage is necessary to determine the 
appropriate level of offsite insurance post shutdown, in accordance 
with the Commission's discretionary authority under the PAA to 
establish an appropriate level of required financial protection for 
such shutdown facilities.
    The NRC staff has conducted an evaluation and concluded that, aside 
from the handling, storage, and transportation of spent fuel and 
radioactive materials for a permanently shut down and defueled reactor, 
no reasonably conceivable potential accident exists that could cause 
significant offsite damage. During normal power reactor operations, the 
forced flow of water through the Reactor Coolant System (RCS) removes 
heat generated by the reactor. The RCS transfers this heat away from 
the reactor core by converting reactor feedwater to steam, which then 
flows to the main turbine generator to produce electricity. Most of the 
accident scenarios postulated for operating power reactors involve 
failures or malfunctions of systems that could affect the fuel in the 
reactor core, which in the most severe postulated accidents, would 
involve the release of large quantities of fission products. With the 
permanent cessation of reactor operations at VY and the permanent 
removal of the fuel from the reactor core, such accidents are no longer 
possible. The reactor, RCS, and supporting systems no longer operate 
and have no function related to the storage of the irradiated fuel. 
Therefore, postulated accidents involving failure or malfunction of the 
reactor, RCS, or supporting systems are no longer applicable.
    During reactor decommissioning, the principal radiological risks 
are associated with the storage of spent fuel onsite. On a case-by-case 
basis, licensees undergoing decommissioning have been granted 
permission to reduce the required amount of primary offsite liability 
insurance coverage from $375,000,000 to $100,000,000 and to withdraw 
from the secondary insurance pool.\1\ One of the technical criteria for 
granting the exemption is that the possibility of a design-basis event 
that could cause significant offsite damage has been eliminated. In its 
April 17, 2014, exemption request, ENO describes both design-basis and 
beyond-design-basis events involving irradiated fuel stored in the SFP. 
The staff independently evaluated the offsite consequences associated 
with various decommissioning activities, design basis accidents, and 
beyond design basis accidents at VY, in consideration of its 
permanently shut down and defueled status. The possible design-basis 
and beyond design basis accident scenarios at VY show that the 
radiological consequences of these accidents are greatly reduced at a 
permanently shut down and defueled reactor, in comparison to a fueled 
reactor. Further, the staff has used the offsite radiological release 
limits established by the U.S. Environmental Protection Agency (EPA) 
early-phase Protective Action Guidelines (PAGs) of one roentgen 
equivalent man (rem) at the exclusion area boundary in determining that 
any possible radiological releases would be minimal and would not 
require precautionary protective actions (e.g., sheltering in place or 
evacuation), which could result in offsite liability.
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    \1\ See Memorandum from William D. Travers, Executive Director 
for Operations, to the Commission (August 16, 2002) (ADAMS Accession 
No. ML030550706).
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    The only design-basis accident that could potentially result in an 
offsite radiological release at VY, following its permanent shutdown 
and defueling, is a Fuel Handling Accident (FHA). However, ENO 
performed an analysis demonstrating that 17 days after shutdown, the 
radiological consequences of a FHA would not exceed the limits 
established by the EPA PAGs at the exclusion area boundary. 
Accordingly, based on the time that VY has been permanently shutdown 
(approximately 15 months), the staff has determined that the 
possibility of an offsite radiological release from a design-basis 
accident that could exceed the EPA PAGs has been eliminated. Therefore, 
any offsite consequence from a design basis radiological release is

[[Page 24143]]

unlikely, and a significant amount of offsite liability insurance 
coverage is not required.
    The only beyond design-basis event that has the potential to lead 
to a significant radiological release at a permanently shut down and 
defueled (decommissioning) reactor is a zirconium fire. The zirconium 
fire scenario is a postulated, but highly unlikely, accident scenario 
that involves the loss of water inventory from the SFP, resulting in a 
significant heat-up of the spent fuel and culminating in substantial 
zirconium cladding oxidation and fuel damage. The probability of a 
zirconium fire scenario is related to the decay heat of the irradiated 
fuel stored in the SFP. Therefore, the risks from a zirconium fire 
scenario continue to decrease as a function of the time that VY has 
been permanently shut down. The licensee's adiabatic heat-up analyses 
demonstrate that as of April 15, 2016, there would be at least 10 hours 
after the loss of all means of cooling (both air and/or water), before 
the spent fuel cladding would reach a temperature where the potential 
for a significant offsite radiological release could occur. The NRC 
staff has confirmed the reduced risks at VY by comparing the generic 
risk assumptions in the analyses in NUREG-1738, ``Technical Study of 
Spent Fuel Pool Accident Risk at Decommissioning Nuclear Power 
Plants,'' dated February 28, 2001 (ADAMS Accession No. ML010430066) to 
site-specific conditions at VY; based on this assessment, the staff 
determined that the risk values in NUREG-1738 bound the risks presented 
by VY. As indicated by the results of research conducted for NUREG-1738 
and more recently, for NUREG-2161, ``Consequence Study of a Beyond-
Design-Basis Earthquake Affecting the Spent Fuel Pool for a U.S. Mark I 
Boiling Water Reactor'' (ADAMS Accession No. ML14255A365), ENO's 
analysis of a beyond-design-basis accident involving a complete loss of 
SFP water inventory, where adequate fuel handling building air exchange 
with the environment and air cooling of the stored fuel are available, 
the analyses show that within 15.4 months after shutdown, air cooling 
of the spent fuel assemblies was sufficient to keep the fuel within a 
safe temperature range, indefinitely, without fuel cladding damage or 
offsite radiological release.
    In this regard, one technical criterion for relieving 
decommissioning reactor licensees from the insurance obligations 
applicable to an operating reactor is a finding that the heat generated 
by the SFP has decayed to the point where the possibility of a 
zirconium fire is highly unlikely. This was addressed in SECY-93-127, 
where the NRC staff concluded that there was a low likelihood and 
reduced short-term public health consequences of a zirconium fire once 
a decommissioning plant's spent fuel has sufficiently decayed. In its 
Staff Requirements Memorandum ``Financial Protection Required of 
Licensees of Large Nuclear Power Plants during Decommissioning,'' dated 
July 13, 1993 (ADAMS Accession No. ML003760936), the Commission 
approved a policy that authorized, through the exemption process, 
withdrawal from participation in the secondary insurance layer and a 
reduction in commercial liability insurance coverage to $100 million, 
when a licensee is able to demonstrate that the spent fuel could be 
air-cooled if the SFP was drained of water. The staff has used this 
technical criterion to grant similar exemptions to other 
decommissioning reactors (e.g., Maine Yankee Atomic Power Station, 
published in the Federal Register on January 19, 1999 (64 FR 2920); 
Zion Nuclear Power Station, published in the Federal Register on 
December 28, 1999 (64 FR 72700); Kewaunee Power Station, published in 
the Federal Register on March 24, 2015 (80 FR 15638); and Crystal River 
Unit 3 Nuclear Generation Plant, published in the Federal Register on 
May 6, 2015 (80 FR 26100)). Additional discussions of other 
decommissioning reactor licensees that have received exemptions to 
reduce their primary insurance level to $100 million are provided in 
SECY-96-256, ``Changes to the Financial Protection Requirements for 
Permanently Shutdown Nuclear Power Reactors, 10 CFR 50.54(w) and 10 CFR 
140.11,'' dated December 17, 1996 (ADAMS Accession No. ML15062A483). 
These prior exemptions were based on the licensee demonstrating that 
the SFP could be air-cooled, consistent with the technical criterion 
discussed above.
    The NRC staff has determined that the fuel stored in the VY SFP 
will have decayed sufficiently by the requested effective exemption 
date of April 15, 2016, to support a reduction in the required 
insurance. The licensee determined that by April 15, 2016, the fuel 
removed from the reactor would have sufficiently decayed by 15.4 months 
after shutdown so as to significantly reduce the risk from SFP draining 
events (ADAMS Accession No. ML14080A141). The NRC staff has evaluated 
the issue of zirconium fires in SFPs and presented an independent 
evaluation of a SFP subject to a severe earthquake in NUREG-2161, 
``Consequence Study of a Beyond-Design-Basis Earthquake Affecting the 
Spent Fuel Pool for a U.S. Mark l Boiling Water Reactor,'' dated 
September 2014 (ADAMS Accession No. ML14255A365). This evaluation 
concluded that, for a representative Boiling-Water Reactor (BWR), fuel 
in a dispersed high-density configuration would be adequately cooled by 
natural circulation air flow within several months after discharge from 
a reactor if the pool was drained of water. By letter dated November 
23, 2015 (ADAMS Accession No. ML15329A167), ENO confirmed that the 
plant design and fuel storage configuration considered in NUREG-2161 
were consistent with the VY plant design and fuel storage 
configurations to be used in the decommissioning of VY. The staff 
independently confirmed that the VY fuel assembly decay levels are also 
consistent with the spent fuel considered in NUREG-2161. Thus, the 
staff has determined that after 15.4 months decay, which will be 
reached by the requested effective date of April 15, 2016, the fuel 
stored in the VY SFP will be able to adequately be cooled by air in the 
unlikely event of pool drainage.
    In SECY-00-0145, ``Integrated Rulemaking Plan for Nuclear Power 
Plant Decommissioning,'' dated June 28, 2000, and SECY-01-0100, 
``Policy Issues Related to Safeguards, Insurance, and Emergency 
Preparedness Regulations at Decommissioning Nuclear Power Plants 
Storing Fuel in Spent Fuel Pools,'' dated June 4, 2001 (ADAMS Accession 
Nos. ML003721626 and ML011450420, respectively), the staff discussed 
additional information concerning SFP zirconium fire risks at 
decommissioning reactors and associated implications for offsite 
insurance. Analyzing when the spent fuel stored in the SFP is capable 
of adequate air-cooling is one measure that demonstrates when the 
probability of a zirconium fire would be exceedingly low.
    The licensee's analyses referenced in its exemption request 
demonstrate that under conditions where the SFP water inventory has 
drained and only air-cooling of the stored irradiated fuel is 
available, there is reasonable assurance as of April 15, 2016, that the 
VY spent fuel will remain at temperatures far below those associated 
with a significant radiological release. In addition, the licensee 
performed adiabatic heat-up analyses, in which a complete drainage of 
the SFP is combined with rearrangement of spent fuel rack geometry and/
or the addition of rubble to the SFP; this type of analysis postulates 
that decay heat

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transfer from the spent fuel via conduction, convection, or radiation 
would be impeded. The licensee's adiabatic heat-up analyses demonstrate 
that as of April 15, 2016, there would be at least 10 hours after the 
loss of all means of cooling (both air and/or water), before the spent 
fuel cladding would reach a temperature where the potential for a 
significant offsite radiological release could occur. In ENO's letter 
dated March 14, 2014 (ADAMS Accession No. ML14080A141), the licensee 
furnished information concerning its SFP inventory makeup strategies. 
Several sources of makeup to the pool are available, such as the 
Service Water (SW) system, which has redundant pumping capability and 
power supplies to ensure alternative SFP makeup function. The SW system 
runs continuously, thus allowing for constant monitoring. Additionally, 
there are electric-driven and diesel-driven fire pumps that can supply 
makeup water to the SFP via the SW system or the fire water system. In 
its letter dated August 29, 2014 (ADAMS Accession No. ML14246A176), the 
licensee also stated that, considering the very low-probability of 
beyond design-basis accidents affecting the SFP, these diverse 
strategies provide defense-in-depth and time to mitigate and prevent a 
zirconium fire, using makeup or spray into the SFP before the onset of 
zirconium cladding rapid oxidation.
    In the NRC staff's safety evaluation of the licensee's March 14, 
2014 (as later supplemented) request for exemptions from certain 
emergency planning requirements dated December 10, 2015 (ADAMS 
Accession No. ML15180A054), the NRC staff assessed the ENO accident 
analyses associated with the radiological risks from a zirconium fire 
at the permanently shut down and defueled VY site. For the very 
unlikely beyond design-basis accident scenario where the SFP coolant 
inventory is lost in such a manner that all methods of heat removal 
from the spent fuel are no longer available, the staff found there will 
be a minimum of 10 hours from the initiation of the accident until the 
cladding reaches a temperature where offsite radiological release might 
occur. The staff finds that 10 hours is sufficient time to support 
deployment of mitigation equipment, consistent with plant conditions, 
to prevent the zirconium cladding from reaching a point of rapid 
oxidation.
    The staff has determined that the licensee's proposed reduction in 
primary offsite liability coverage to a level of $100 million, and the 
licensee's proposed withdrawal from participation in the secondary 
insurance pool for offsite financial protection, are consistent with 
the policy established in SECY-93-127 and subsequent insurance 
considerations resulting from zirconium fire risks, as discussed in 
SECY-00-0145 and SECY-01-0100. The NRC has previously determined in 
SECY-00-0145 that the minimum offsite financial protection requirement 
may be reduced to $100 million and that secondary insurance is not 
required, once it is determined that the spent fuel in the spent fuel 
pool is no longer thermal-hydraulically capable of sustaining a 
zirconium fire based on a plant-specific analysis. In addition, the NRC 
staff notes that there is a well-established precedent of granting a 
similar exemption from these insurance requirements, to other 
permanently shutdown and defueled power reactors, upon satisfactory 
demonstration that zirconium fire risk from the irradiated fuel stored 
in the SFP is of negligible concern.

A. Authorized by Law

    The PAA, and its implementing regulations in 10 CFR 140.11(a)(4), 
require licensees of nuclear reactors that have a rated capacity of 
100,000 kilowatts electric or more to have and maintain $375 million in 
primary financial protection and to participate in a secondary 
retrospective insurance pool. In accordance with 10 CFR 140.8, the 
Commission may grant exemptions from the regulations in 10 CFR part 
140, as the Commission determines are authorized by law. The legal and 
associated technical basis for granting exemptions from 10 CFR part 140 
are set forth in SECY-93-127. The legal analysis underlying SECY-93-127 
concluded that, upon a technical finding that lesser potential hazards 
exist after termination of operations, the Commission has the 
discretion under the Price-Anderson Act to reduce the amount of 
insurance required of a licensee undergoing decommissioning.
    Based on its review of ENO's exemption request, the staff concludes 
that the technical criteria for relieving ENO from its existing primary 
and secondary insurance obligations have been met. As explained above, 
the staff has concluded that no reasonably conceivable design-basis 
accident exists that could cause an offsite release greater than the 
EPA PAGs, and therefore, that any offsite consequence from a design 
basis radiological release is unlikely, and the need for a significant 
amount of offsite liability insurance coverage is unwarranted. 
Additionally, the Staff determined that, after 15.4 months decay, which 
will be reached by the requested effective date of April 15, 2016, the 
fuel stored in the VY SFP will be able to adequately be cooled by air 
in the unlikely event of pool drainage. Moreover, in the very unlikely 
beyond design-basis accident scenario where the SFP coolant inventory 
is lost in such a manner that all methods of heat removal from the 
spent fuel are no longer available, the staff has determined that 10 
hours would be available and is sufficient time to support deployment 
of mitigation equipment, consistent with plant conditions, to prevent 
the zirconium cladding from reaching a point of rapid oxidation. Thus, 
the staff concludes that the fuel stored in the VY SFP will have 
decayed sufficiently by the requested effective exemption date of April 
15, 2016, to support a reduction in the required insurance consistent 
with SECY-00-0145.
    The NRC staff has determined that granting of the licensee's 
proposed exemption will not result in a violation of the Atomic Energy 
Act of 1954, Section 170, or other laws, as amended, which require 
licensees to maintain adequate financial protection. Accordingly, 
consistent with the legal standard presented in SECY-93-127, under 
which decommissioning reactor licensees may be relieved of the 
requirements to carry the maximum amount of insurance available and to 
participate in the secondary retrospective premium pool where there is 
sufficient technical justification, the NRC staff concludes that the 
requested exemption is authorized by law.

B. Is Otherwise in the Public Interest

    The financial protection limits of 10 CFR 140.11 were established 
to require licensees to maintain sufficient offsite liability insurance 
to ensure adequate funding for offsite liability claims, following an 
accident at an operating reactor. However, the regulation does not 
consider the reduced potential for and consequence of nuclear incidents 
at permanently shutdown and decommissioning reactors.
    SECY-93-127, SECY-00-0145, and SECY-01-0100 provide a basis for 
allowing licensees of decommissioning plants to reduce their primary 
offsite liability insurance and to withdraw from participation in the 
retrospective rating pool for deferred premium charges. As discussed in 
these documents, once the zirconium fire concern is determined to be 
negligible, possible accident scenario risks at permanently shutdown 
and defueled reactors are greatly reduced, when compared to the risks 
at operating reactors, and the associated potential for offsite 
financial liabilities from an

[[Page 24145]]

accident are commensurately less. The licensee has analyzed and the 
staff has confirmed that the risks of accidents that could result in an 
offsite radiological risk are minimal, thereby justifying the proposed 
reductions in offsite primary liability insurance and withdrawal from 
participation in the secondary retrospective rating pool for deferred 
premium charges.
    Additionally, participation in the secondary retrospective rating 
pool could potentially have adverse consequences on the safe and timely 
completion of decommissioning. If a nuclear incident sufficient to 
trigger the secondary insurance layer occurred at another nuclear power 
plant, the licensee could incur financial liability of up to 
$121,255,000. However, because VY is permanently shut down, it cannot 
produce revenue from electricity generation sales to cover such a 
liability. Therefore, such liability if subsequently incurred, could 
significantly affect the ability of the facility to conduct and 
complete timely radiological decontamination and decommissioning 
activities. In addition, as SECY-93-127 concluded, the shared financial 
risk exposure to ENO is greatly disproportionate to the radiological 
risk posed by VY, when compared to operating reactors.
    The reduced overall risk to the public at decommissioning power 
plants does not warrant that ENO be required to carry full operating 
reactor insurance coverage, after the requisite spent fuel cooling 
period has elapsed following final reactor shutdown. The licensee's 
proposed financial protection limits will maintain a level of liability 
insurance coverage commensurate with the risk to the public. These 
changes are consistent with previous NRC policy as discussed in NUREG-
00-0145, and exemptions approved for other decommissioning reactors. 
Thus, the underlying purpose of the regulations will not be adversely 
affected by the reductions in insurance coverage. Accordingly, an 
exemption from participation in the secondary insurance pool and a 
reduction in the primary insurance to $100 million, a value more in 
line with the potential consequences of accidents, would be in the 
public interest in that this assures there will be adequate funds to 
address any of those consequences and helps to assure the safe and 
timely decommissioning of the reactor.
    Therefore, the NRC staff has concluded that an exemption from 10 
CFR 140.11(a)(4), which would permit ENO to lower the VY primary 
insurance levels and to withdraw from the secondary retrospective 
premium pool at the requested effective date of April 15, 2016, is in 
the public interest.

C. Environmental Considerations

    NRC approval of an exemption from insurance or indemnity 
requirements belongs to a category of actions that the Commission, by 
rule or regulation, has declared to be a categorical exclusion, after 
first finding that the category of actions does not individually or 
cumulatively have a significant effect on the human environment. 
Specifically, the exemption is categorically excluded from the 
requirement to prepare an environmental assessment or environmental 
impact statement, in accordance with 10 CFR 51.22(c)(25).
    Under 10 CFR 51.22(c)(25), granting of an exemption from the 
requirements of any regulation of Chapter I to 10 CFR is a categorical 
exclusion provided that: (i) There is no significant hazards 
consideration; (ii) there is no significant change in the types or 
significant increase in the amounts of any effluents that may be 
released offsite; (iii) there is no significant increase in individual 
or cumulative public or occupational radiation exposure; (iv) there is 
no significant construction impact; (v) there is no significant 
increase in the potential for or consequences from radiological 
accidents; and (vi) the requirements from which an exemption is sought 
involve surety, insurance, or indemnity requirements.
    The Director, Division of Decommissioning, Uranium Recovery and 
Waste Programs, Office of Nuclear Material Safety and Safeguards, has 
determined that approval of the exemption request involves no 
significant hazards consideration, as defined in 10 CFR 50.92, because 
reducing a licensee's offsite liability requirements at VY does not: 
(1) Involve a significant increase in the probability or consequences 
of an accident previously evaluated; (2) create the possibility of a 
new or different kind of accident from any accident previously 
evaluated; or (3) involve a significant reduction in a margin of 
safety. The exempted financial protection regulation is unrelated to 
the operation of VY or site activities. Accordingly, there is no 
significant change in the types or significant increase in the amounts 
of any effluents that may be released offsite, and no significant 
increase in individual or cumulative public or occupational radiation 
exposure. The exempted regulation is not associated with construction, 
so there is no significant construction impact. The exempted regulation 
does not concern the source term (i.e., potential amount of radiation 
in an accident), nor any activities conducted at the site. Therefore, 
there is no significant increase in the potential for, or consequences 
of, a radiological accident. In addition, there would be no significant 
impacts to biota, water resources, historic properties, cultural 
resources, or socioeconomic conditions in the region resulting from 
issuance of the requested exemption. The requirement for offsite 
liability insurance involves surety, insurance, or indemnity matters 
only.
    Therefore, pursuant to 10 CFR 51.22(b) and 51.22(c)(25), no 
environmental impact statement or environmental assessment need be 
prepared in connection with the approval of this exemption request.

IV. Conclusions

    Accordingly, the Commission has determined that, pursuant to 10 CFR 
140.8, the exemption is authorized by law, and is otherwise in the 
public interest. Therefore, the Commission hereby grants ENO an 
exemption from the requirements of 10 CFR 140.11(a)(4) for VY. The 
exemption from 10 CFR 140.11(a)(4) permits VY to reduce the required 
level of primary financial protection, from $375,000,000 to 
$100,000,000, and to withdraw from participation in the secondary layer 
of financial protection no earlier than April 15, 2016.
    The exemption is effective upon issuance.

    Dated at Rockville, Maryland, this 15th day of April, 2016.

    For the Nuclear Regulatory Commission.
John R. Tappert,
Director, Division of Decommissioning, Uranium Recovery and Waste 
Programs, Office of Nuclear Material Safety and Safeguards.
[FR Doc. 2016-09556 Filed 4-22-16; 8:45 am]
 BILLING CODE 7590-01-P