[Federal Register Volume 81, Number 181 (Monday, September 19, 2016)]
[Notices]
[Pages 64212-64215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-22486]
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NUCLEAR REGULATORY COMMISSION
[Docket Nos. 50-327 and 50-328; NRC-2016-0199]
Tennessee Valley Authority; Sequoyah Nuclear Plant, Units 1 and 2
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 March 10, 2016, request, as supplemented by
letter dated June 24, 2016, from the Tennessee Valley Authority (TVA or
the licensee). The exemption permits a one-time reallocation of surplus
funds from the nuclear decommissioning trust funds (DTFs) for the
Sequoyah Nuclear Plant (SQN), Units 1 and 2, to the DTFs for the Browns
Ferry Nuclear Plant (BFN), Units 1, 2, and 3, and the Watts Bar Nuclear
Plant (WBN), Units 1 and 2.
DATES: This exemption was issued on September 9, 2016.
ADDRESSES: Please refer to Docket ID NRC-2016-0199 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-2016-0199. 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 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: Andrew Hon, Office of Nuclear Reactor
Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001; telephone: 301-415-8480; email: [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The Commission's regulations at Sec. Sec. 50.75 and 50.82 of title
10 of the Code of Federal Regulations (10 CFR), provide that
disbursements or payments from a DTF, other than for payment of
ordinary administrative costs (including taxes) and other incidental
expenses of the fund (including legal, accounting, actuarial, and
trustee expenses) in connection with the operation of the DTF, are
restricted to expenses for legitimate decommissioning activities
consistent with the definition of decommissioning in 10 CFR 50.2 or
transfer to another financial assurance method until final
decommissioning has been completed. According to 10 CFR 50.2,
``decommission'' means to remove a facility or site safely from service
and reduce residual radioactivity to a level that permits release of
the property for unrestricted use and termination of the license or
release of the property under restricted conditions and termination of
the license. A strict interpretation of this regulatory language would
prohibit a licensee from transferring funds from the DTF for one
facility to the DTF for another facility. Therefore, an exemption from
10 CFR 50.75(h)(2) and 10 CFR 50.82(a)(8) is needed to allow TVA to
reallocate surplus funds from the DTFs for SQN Units 1 and 2 to the
DTFs for BFN Units 1, 2, and 3 and WBN Units 1 and 2.
II. Request/Action
In accordance with 10 CFR 50.12, ``Specific exemptions,'' TVA has,
by letter dated March 10, 2016 (ADAMS Accession No. ML16071A237), as
supplemented by letter dated June 24, 2016 (ADAMS Accession No.
ML16179A346), requested that the NRC grant it a one-time exemption from
the requirements of 10 CFR 50.75(h)(2) and 10 CFR 50.82(a)(8) so that
it may reallocate surplus funds from the DTFs for SQN Units 1 and 2 to
the DTFs for BFN Units 1, 2, and 3 and WBN Units 1 and 2. TVA stated
that the purpose of
[[Page 64213]]
the proposed reallocation of surplus funds is to proportionally balance
the DTFs for all of its nuclear power reactor facilities. According to
TVA, two events have occurred that prompted their request for the
proposed reallocation of surplus funds: (1) The issuance of renewed
operating licenses for SQN Units 1 and 2, authorizing their operation
for an additional 20 years; and (2) the issuance of the operating
license for WBN Unit 2. TVA stated that the issuance of the SQN Units 1
and 2 renewed operating licenses resulted in an immediate projected
overfunding of the DTFs for these units because they now have an
additional 20 years to accrue earnings. Conversely, the DTF for WBN
Unit 2, because of the recent issuance of an operating license for WBN
Unit 2, currently requires annual contributions of approximately $3.5
million. TVA claims that if an exemption allowing the reallocation of
some of the surplus funds from the DTFs for SQN Units 1 and 2 to the
DTF for WBN Unit 2 is not granted, then TVA and its ratepayers would
bear unnecessary costs to augment the DTF for WBN Unit 2.
The TVA asserted that special circumstances are present that
warrant the grant of the requested exemption. Specifically, TVA stated,
in part, that the reallocation of surplus funds from the DTFs for SQN
Units 1 and 2 to the DTFs for BFN Units 1, 2, and 3 and WBN Units 1 and
2 is consistent with the underlying purpose of the NRC's
decommissioning rules, which is to provide reasonable assurance that
adequate funds will be available to complete decommissioning and thus
protect the public and the environment (61 FR 39278, 39281; July 29,
1996). Additionally, TVA claimed that compliance with an interpretation
of the regulations that would prohibit the proposed reallocation of
surplus funds would result in undue hardship and other costs that are
significantly in excess of those contemplated when the regulations were
adopted. Finally, TVA stated that the requested exemption from 10 CFR
50.75(h)(2) and 10 CFR 50.82(a)(8) would be a one-time exemption and
that TVA will continue to comply with the external sinking fund method
of decommissioning funding assurance in accordance with 10 CFR
50.75(e)(1)(ii).\1\
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\1\ As support for its request, TVA cited a letter from NRC to
Arizona Public Service Company, ``Palo Verde Nuclear Generating
Station, Unit 1--Decommissioning Trust Fund Balance (TAC No.
MB3158),'' December 11, 2001 (ADAMS Accession No. ML013340484) and a
letter from NRC to Southern California Edison Company, ``San Onofre
Nuclear Generating Station, Units 2 and 3--Exemptions from the
Requirements of 10 CFR part 50, Sections 50.82(a)(8)(i)(A) and
Section 50.75(h)(2) (TAC Nos. MF3544 and MF3545),'' September 5,
2014 (ADAMS Accession No. ML14101A132).
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III. Discussion
In accordance with 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 the
public health and 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 are:
(i) Application of the regulation in the particular circumstances
conflicts with other rules or requirements of the Commission; or
(ii) 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
(iii) 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; or
(iv) The exemption would result in benefit to the public health and
safety that compensates for any decrease in safety that may result from
the grant of the exemption; or
(v) The exemption would provide only temporary relief from the
applicable regulation and the licensee or applicant has made good faith
efforts to comply with the regulation; or
(vi) There is present any other material circumstance not
considered when the regulation was adopted for which it would be in the
public interest to grant an exemption. If such condition is relied on
exclusively for satisfying paragraph (a)(2) of this section, the
exemption may not be granted until the Executive Director for
Operations has consulted with the Commission.
Authorized by Law
In accordance with 10 CFR 50.12, the NRC may grant an exemption
from the requirements of 10 CFR part 50, if the exemption is authorized
by law. The exemption requested in this instance is authorized by law
because no other prohibition of law exists to preclude the activities
which would be authorized by the exemption. Specifically, the requested
exemption would allow the one-time reallocation of surplus funds from
the DTFs for SQN Units 1 and 2 to the DTFs for BFN Units 1, 2, and 3
and WBN Units 1 and 2 such that each fund would separately satisfy the
NRC's minimum funding assurance requirements with a projected excess
available to address site-specific costs to decommission the facility.
In addition to the NRC's regulations at 10 CFR 50.75 and 10 CFR 50.82,
from which TVA is requesting an exemption, the regulations of the
Federal Energy Regulatory Commission (FERC) at 18 CFR 35.32 and 18 CFR
35.33 also address the use of nuclear power plant DTFs. It states in 18
CFR 35.32(a)(6), in pertinent part, that ``[a]bsent the express
authorization of the [FERC], no part of the assets of the [DTF] may be
used for, or diverted to, any purpose other than to fund the costs of
decommissioning the nuclear power plant to which the [DTF] relates, and
to pay administrative costs and other incidental expenses, including
taxes, of the Fund.'' It states in 18 CFR 35.33, in pertinent part,
that the trustee of the DTF may use the DTF assets only to ``[s]atisfy
the liability of a utility for decommissioning costs of the nuclear
power plant to which the [DTF] relates as provided by [18 CFR] 35.32;
and [p]ay administrative costs and other incidental expenses, including
taxes, of the [DTF] as provided by [18 CFR] 35.32.'' \2\ By prohibiting
the use of the assets of a DTF to fund the costs of decommissioning
nuclear power plants other than the nuclear power plant to which the
DTF relates, these regulations would preclude the reallocation of
surplus funds that is proposed by TVA with its requested exemption.
TVA, though, as a Federally owned corporation, is exempt from these
regulations (16 U.S.C. 824(f)). Therefore, the requested exemption is
not precluded by any other prohibition of law and is, thus, authorized
by law.
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\2\ The NRC's regulations recognize the applicability of such
non-NRC rules to power reactor licensees by stating in 10 CFR
50.75(a) that, ``[f]unding for the decommissioning of power reactors
may also be subject to the regulation of Federal or State Government
agencies (e.g., Federal Energy Regulatory Commission (FERC) and
State Public Utility Commissions) that have jurisdiction over rate
regulation. The requirements of this section . . . are in addition
to, and not substitution for, other requirements, and are not
intended to be used by themselves or by other agencies to establish
rates.''
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No Undue Risk to the Public Health and Safety
The underlying purpose of the NRC's decommissioning rules is to
provide reasonable assurance that adequate funds will be available to
complete decommissioning and thus protect the
[[Page 64214]]
public and the environment (61 FR 39278, 39281; July 29, 1996). The NRC
has determined by rule at 10 CFR 50.75 that, for power reactor
licensees, reasonable assurance of funds for decommissioning is
demonstrated when a power reactor licensee covers, using one of the
methods of 10 CFR 50.75(e), including the external sinking fund method
used by TVA, an amount which may be more, but not less, than the amount
stated in the table in 10 CFR 50.75(c)(1) adjusted using a rate at
least equal to that stated in 10 CFR 50.75(c)(2). This is known as the
formula amount. This reasonable assurance is then maintained by the
requirement that each power reactor licensee report to the NRC every
two years on, among other things, the updated formula amount, the
amount of decommissioning funds accumulated to the end of the calendar
year, the schedule of the annual amounts remaining to be collected,
and, if necessary, plans for adjusting levels of funds assured for
decommissioning to demonstrate that a reasonable level of assurance
will be provided that funds will be available when needed to cover the
cost of decommissioning. Reasonable assurance is also maintained by
restricting disbursements or payments from a DTF, other than for
payment of ordinary administrative costs (including taxes) and other
incidental expenses of the fund (including legal, accounting,
actuarial, and trustee expenses) in connection with the operation of
the fund, to expenses for legitimate decommissioning activities. Based
on this regulatory structure, there is no undue risk to the public
health and safety when a power reactor licensee covers by the external
sinking fund method an amount greater than or equal to the formula
amount.
The requested exemption to allow a one-time reallocation of surplus
funds from the DTFs for SQN Units 1 and 2, to the DTFs for BFN Units 1,
2, and 3 and WBN Units 1 and 2 will not present an undue risk to the
public health and safety because, as reallocated, each of these DTFs
would separately satisfy the minimum formula amount with a projected
excess available to address site-specific costs to decommission the
facility. This was verified by the NRC staff, which independently
performed a decommissioning funding assurance analysis for each unit,
using the proposed DTF reallocation amounts. The analysis included an
independent calculation of the formula amount for each unit using the
equation and adjustment factor in 10 CFR 50.75(c) and the most recent
labor and energy and waste burial data available from the U.S.
Department of Labor, Bureau of Labor Statistics, and NUREG-1307,
``Report on Waste Burial Charges'' (ADAMS Accession No. ML13023A030),
respectively, and an independent fund growth analysis through the
permanent termination of operations (assuming an annual real rate of
return of 5%, as allowed by 10 CFR 50.75(e)(1)(ii) and authorized by
the TVA Board of Directors, TVA's rate-setting authority). In each
calculation, the NRC staff found that the projected fund balance for
each of the reallocated DTFs exceeded the NRC's formula amount, which
is, by rule, the minimum requirement to demonstrate reasonable
assurance of funds for decommissioning. Moreover, TVA has rate-setting
authority and the requested exemption does not foreclose the option for
ratepayer contributions in order to fund any potential future
shortfalls. Therefore, the NRC staff concludes that there is reasonable
assurance that the bulk amount of the funds necessary to complete
radiological decommissioning will be available for each unit after the
proposed reallocation and, thus, that the requested exemption will not
present an undue risk to the public health and safety.
Consistent With the Common Defense and Security
The requested exemption would grant a one-time exemption from the
requirements of 10 CFR 50.75(h)(2) and 10 CFR 50.82(a)(8) to allow the
reallocation of surplus funds from the DTFs for SQN Units 1 and 2 to
the DTFs for BFN Units 1, 2, and 3 and WBN Units 1 and 2. Neither the
regulation nor the proposed exemption has any relation to security
issues. Therefore, the common defense and security is not impacted by
the requested exemption.
Special Circumstances
Special circumstances, in accordance with 10 CFR 50.12(a)(2)(ii),
are present whenever 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. As
explained above, the underlying purpose of the NRC's decommissioning
rules is to provide reasonable assurance that adequate funds will be
available to complete decommissioning. This underlying purpose is
achieved by requiring power reactor licensees to cover, using one of
the methods of 10 CFR 50.75(e), an amount which may be more, but not
less, than the formula amount, to report biennially regarding the
amount covered and whether adjustment is necessary, and to make
disbursements or payments from a DTF only for decommissioning
activities. Under the particular circumstances, however, prohibiting
the proposed reallocation of funds is not necessary to achieve the
underlying purpose of the decommissioning regulations of maintaining
reasonable assurance that adequate funds will be available to complete
decommissioning.
The TVA proposed to reallocate funds from the DTFs for SQN Units 1
and 2 to the DTFs for BFN Units 1, 2, and 3 and WBN Units 1 and 2.
Although this would be prohibited by a strict interpretation of the
NRC's decommissioning rules, such a prohibition is not necessary to
achieve the underlying purpose of those rules because, as reallocated,
each of the DTFs would separately satisfy the minimum formula amount
with a projected excess available to address site-specific costs to
decommission the facility. As discussed above, this was verified by the
NRC staff, which independently performed a decommissioning funding
assurance analysis for each unit, using the proposed DTF reallocation
amounts, and found that the projected fund balance for each DTF, as
reallocated, would exceed the NRC minimum funding assurance
requirements. Therefore, the NRC staff concludes that prohibiting the
proposed reallocation of funds through the application of 10 CFR
50.75(h)(2) and 10 CFR 50.82(a)(8) would not be necessary to achieve
the underlying purpose of these regulations; instead, the proposed
reallocation would provide reasonable assurance that adequate funds
will be available for the radiological decommissioning of the reactors.
Environmental Considerations
With respect to its impact on the quality of the human environment,
the NRC has determined that the issuance of the exemption discussed
herein meets the eligibility criteria for categorical exclusion set
forth in 10 CFR 51.22(c)(25). Under 10 CFR 51.22(c)(25), the granting
of an exemption from the requirements of any regulation of 10 CFR
Chapter I is an action that 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)
[[Page 64215]]
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 those types of requirements identified in
10 CFR 51.22(c)(25)(vi).
The exemption allows the licensee to reallocate surplus funds from
the DTFs for SQN Units 1 and 2 to the DTFs for BFN Units 1, 2, and 3
and WBN Units 1 and 2. Neither the regulation nor the exemption has any
relation to the operation of the facilities. Therefore, the Director,
Division of Operating Reactor Licensing, Office of Nuclear Reactor
Regulation, has determined that approval of the exemption request
involves no significant hazards consideration because it does not (1)
involve a significant increase in the probability or consequences of an
accident previously evaluated; or (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.
Similarly, as a result of the exemption, which is not related to
facility operation, there is no significant change in the types or
significant increase in the amounts of any effluents that may be
released offsite and there is 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 mitigation. Therefore, there is no significant increase
in the potential for or consequences from radiological accidents.
Finally, the requirements for using DTFs for decommissioning activities
from which the exemption is sought involve recordkeeping requirements,
reporting requirements, or other requirements of an administrative,
managerial, or organizational nature.
Based on the above, the NRC staff concludes that the exemption
meets the eligibility criteria for the categorical exclusion set forth
in 10 CFR 51.22(c)(25). Therefore, in accordance with 10 CFR 51.22(b),
no environmental impact statement or environmental assessment need be
prepared in connection with the approval of this exemption request.
IV. Conclusions
The NRC has determined that, pursuant to 10 CFR 50.12(a), the
exemption is authorized by law, will not present an undue risk to the
public health and safety, and is consistent with the common defense and
security. Also, special circumstances pursuant to 10 CFR
50.12(a)(2)(ii) are present. Therefore, the NRC hereby grants TVA a
one-time exemption from the requirements of 10 CFR 50.75(h)(2) and 10
CFR 50.82(a)(8) to allow the requested reallocation of surplus funds
from the DTFs for SQN Units 1 and 2 to the DTFs for BFN Units 1, 2, and
3 and WBN Units 1 and 2.
Dated at Rockville, Maryland, this 9th day of September 2016.
For the Nuclear Regulatory Commission.
Anne T. Boland,
Director, Division of Operating Reactor Licensing, Office of Nuclear
Reactor Regulation.
[FR Doc. 2016-22486 Filed 9-16-16; 8:45 am]
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