[Federal Register Volume 84, Number 180 (Tuesday, September 17, 2019)]
[Notices]
[Pages 48955-48959]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20091]
-----------------------------------------------------------------------
NUCLEAR REGULATORY COMMISSION
[Docket Nos. 50-275 and 50-323; NRC-2019-0131]
Pacific Gas and Electric Company; Diablo Canyon Nuclear Power
Plant Units 1 and 2
AGENCY: Nuclear Regulatory Commission.
ACTION: Exemption; issuance.
-----------------------------------------------------------------------
SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) has issued
exemptions in response to a December 13, 2018, request from Pacific Gas
and Electric Company (PG&E or the licensee) from certain regulatory
requirements for the Diablo Canyon Nuclear Power Plant, Units 1 and 2
(Diablo Canyon).
DATES: The exemptions were issued on September 10, 2019.
ADDRESSES: Please refer to Docket ID NRC-2019-0131 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 Website: Go to https://www.regulations.gov and search for Docket ID NRC-2019-0131. Address
questions about NRC docket IDs in Regulations.gov to Jennifer Borges;
telephone: 301-287-9127; 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 https://www.nrc.gov/reading-rm/adams.html. To begin the search, 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 it is mentioned in this document.
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: Balwant K. Singal, Office of Nuclear
Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington DC
20555-0001; telephone: 301-415-3016; email: [email protected].
SUPPLEMENTARY INFORMATION: The text of the exemption is attached.
Dated at Rockville, Maryland, this 12th day of September 2019.
For the Nuclear Regulatory Commission.
Balwant K. Singal,
Senior Project Manager, Plant Licensing Branch IV, Division of
Operating Reactor Licensing, Office of Nuclear Reactor Regulation.
ATTACHMENT--Exemptions
NUCLEAR REGULATORY COMMISSION
Docket Nos. 50-275 and 50-323
Pacific Gas and Electric Company, Diablo Canyon Nuclear Power Plant,
Units 1 and 2 Exemption
I. Background
Pacific Gas and Electric Company (PG&E or the licensee) is the
holder of Facility Operating License Nos. DPR-80 and DPR-82, which
authorizes operation of Diablo Canyon Nuclear Power Plant (Diablo
Canyon), Units 1 and 2, respectively. The licenses provide, among other
things, that Diablo Canyon, Units 1 and 2 are subject to all rules,
regulations, and orders of the U.S. Nuclear Regulatory Commission (NRC
or the Commission) now or hereafter in
[[Page 48956]]
effect. Diablo Canyon is located in San Luis Obispo, California.
By letter dated November 27, 2018 (Agencywide Documents Access and
Management System (ADAMS) Accession No. ML18331A553), the licensee
informed the NRC of its intent to permanently cease operations for
Diablo Canyon, Units 1 and 2, on November 2, 2024, for Unit 1, and
August 26, 2025, for Unit 2.
By letter dated January 29, 2019 (ADAMS Accession No. ML19029A020),
PG&E notified the NRC that a voluntary petition for relief under
Chapter 11 of Title 11 of the United States Code was filed on January
29, 2019, in the United States Bankruptcy Court for the Northern
District of California. The NRC acknowledged PG&E's bankruptcy
notification on February 5, 2019 (ADAMS Accession No. ML19031C816). By
letter dated March 14, 2019, the NRC staff stated that it does not
anticipate that the PG&E bankruptcy filing, including that of its
parent company, will have any adverse safety impacts at Diablo Canyon,
Units 1 and 2 (ADAMS Accession No. ML19074A109). Additionally, the NRC
staff stated that the bankruptcy filing does not relieve PG&E of its
obligations to comply with NRC requirements and that PG&E must continue
to comply with all of its obligations under the Atomic Energy Act of
1954 (AEA) as amended, and the NRC's regulations, including the
obligations relating to decommissioning financial assurance. The NRC
continues to monitor PG&E's decommissioning financial assurance for
Diablo Canyon and continued compliance with NRC's decommissioning
funding requirements.
II. Request/Action
By letter dated December 13, 2018 (ADAMS Accession No.
ML18347B552), PG&E submitted a request for exemptions from the
requirements of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.82(a)(8)(ii) for
Diablo Canyon, Units 1 and 2. The exemptions would allow the licensee
to use an amount of funds from the Diablo Canyon Nuclear
Decommissioning Trust (NDT) \1\ for decommissioning planning above the
amount limitations specified in NRC regulations for operating reactors
and use withdrawals from the NDT for planning activities associated
with spent fuel management and site restoration. Overall, the proposed
action would allow PG&E to withdraw $187.8 million ($2017) from the
Diablo Canyon NDT to fund radiological decommissioning, spent fuel
management, and site restoration planning activities necessary prior to
permanent cessation of operations of Diablo Canyon, Units 1 and 2, in
2024 and 2025, respectively.
---------------------------------------------------------------------------
\1\ The NRC notes that decommissioning trust funds in the NDT
are not property of PG&E's estate and are held in trust for the
exclusive purpose of providing funds for the decommissioning of the
nuclear plants. See 10 CFR 50.75.
---------------------------------------------------------------------------
According to the application, planning activities necessary to
support direct transition to physical decommissioning upon permanent
shut down of Diablo Canyon, Units 1 and 2, include: Obtaining revisions
to NRC licenses and requirements; obtaining state and local permits
required for decommissioning activities and supporting required
stakeholder processes related to future land use and disposition of
facilities; completing engineering design, work plans, technical
evaluations, and procurement to support several major, critical
decommissioning projects scheduled at the front end of the
decommissioning effort; developing and supporting decommissioning cost
estimates and supporting nuclear decommissioning proceedings at the
California Public Utilities Commission (CPUC); and developing detailed
executable work plans for decommissioning work, revising plant
processes and procedures as necessary.
PG&E has estimated that a total of $187.8 million ($2017) would be
required to be spent on pre-shutdown planning activities; $148.4
million would be for radiological decommissioning planning activities,
and $39.4 million would be for spent fuel management and site
restoration planning activities. The estimated $148.4 million amount is
more than 3 percent of the generic minimum decommissioning amount
calculated for an operating reactor using the formula set forth by NRC
regulations at 10 CFR 50.75. Furthermore, withdrawals from the
decommissioning trust fund cannot be used to fund the PG&E estimated
$39.4 million for spent fuel management and site restoration planning
activities absent (1) a clear indication that monies in the fund were
collected for those purposes and are clearly and consistently accounted
for separately,\2\ or (2) an exemption from the requirements of 10 CFR
50.82(a)(8)(i)(A) for use of funds for those purposes.
---------------------------------------------------------------------------
\2\ The NRC does not preclude the commingling of funds
accumulated to comply with NRC radiological decommissioning
requirements and funds accumulated to address site restoration costs
and spent fuel management costs, as long as the licensee is able to
identify and account for the NRC radiological decommissioning funds
that are contained within its single account. See NRC Regulatory
Issue Summary 2001-07, Revision 1, ``10 CFR 50.75 Reporting and
Recordkeeping for Decommissioning Planning,'' dated January 8, 2009
(ADAMS Accession No. ML083440158); Regulatory Guide 1.184, Revision
1, ``Decommissioning of Nuclear Power Reactors,'' dated October 2013
(ADAMS Accession No. ML13144A840).
---------------------------------------------------------------------------
The requirements of 10 CFR 50.82(a)(8)(ii) restrict the use of the
NDT for decommissioning planning to 3 percent of the generic minimum
decommissioning amount calculated using the formula set forth by the
regulations at 10 CFR 50.75. For licensees that have submitted the
certifications required under 10 CFR 50.82(a)(1) and commencing 90 days
after the NRC has received the Post-Shutdown Decommissioning Activities
Report, an additional 20 percent may be used. A site-specific
decommissioning cost estimate must be submitted to the NRC prior to the
licensee using any funding in excess of these amounts. Furthermore, as
required by 10 CFR 50.82(a)(8)(i)(A), decommissioning trust funds may
be used by the licensee if the withdrawals are for legitimate
decommissioning activities, consistent with the definition of
decommissioning in 10 CFR 50.2. The definition in 10 CFR 50.2 states,
that ``Decommission means 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.''
This definition addresses radiological decommissioning and does not
include activities associated with irradiated fuel management or site
restoration activities. Therefore, these regulations would limit
withdrawals from the Diablo Canyon NDT to $37.2 million ($18.6 million
per unit) and would allow spending only on planning activities for
radiological decommissioning. In addition, as noted above, the licensee
does not plan to permanently cease operations for Diablo Canyon, Units
1 and 2, until November 2, 2024 for Unit 1, and August 26, 2025, for
Unit 2. Therefore, exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR
50.82(a)(8)(ii) are needed to allow the licensee to use an amount of
funds from the Diablo Canyon NDT for decommissioning planning above the
3 percent limitation specified in NRC regulations and to use
withdrawals from the NDT for planning activities associated with spent
fuel management and site restoration.
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)
[[Page 48957]]
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, as stated in 10
CFR 50.12(a)(2) include, among other things: (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''; and (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. The Exemptions Are Authorized by Law
The exemptions would allow PG&E to withdraw $187.8 million ($2017)
from the Diablo Canyon NDT to fund planning activities for radiological
decommissioning, spent fuel management, and site restoration prior to
permanent cessation of operations. 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, as explained in Section D below, that
there is reasonable assurance of adequate funding for radiological
decommissioning because PG&E's withdrawal of $187.8 million ($2017)
from the Diablo Canyon NDT for planning activities for radiological
decommissioning, spent fuel management, and site restoration will not
adversely impact PG&E's ability to complete radiological
decommissioning within 60 years of permanent cessation of operations
and terminate the Diablo Canyon licenses. Accordingly, the exemption is
authorized by law because granting 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.
B. The Exemptions Present No Undue Risk to Public Health and Safety
The proposed exemptions would allow PG&E to withdraw $187.8 million
($2017) from the Diablo Canyon NDT to fund planning activities for
radiological decommissioning, spent fuel management, and site
restoration between now and permanent cessation of operations, to
support a safe and efficient transition from operational to
decommissioning status. PG&E has estimated that a total of $187.8
million ($2017) would be needed for pre-shutdown planning activities;
$148.4 million would be for radiological decommissioning planning
activities, and $39.4 million would be for spent fuel management and
site restoration planning activities. According to the licensee,
spending the $187.8 million now will save approximately $166.1 million
($2017) in overall decommissioning cost mainly due to savings on
security, fire protection, and overall staffing costs mainly due to
savings on security, fire protection, and overall staffing costs.
As explained in further detail in Section D below, based on the NRC
staff's review of PG&E's exemption request and site-specific cost
estimate and the staff's independent cash flow analysis, the NRC staff
finds that PG&E's withdrawal of $187.8 million ($2017) from the Diablo
Canyon NDT for planning activities for radiological decommissioning,
spent fuel management, and site restoration, will not adversely impact
PG&E's ability to complete radiological decommissioning within 60 years
of permanent cessation of operations and terminate the Diablo Canyon
licenses. Therefore, the requested exemptions will not present an undue
risk to public health and safety if granted.
In addition, granting the requested exemptions will not alter the
operation of any plant equipment or systems and, therefore, does not
present an undue risk to safety. The proposed exemptions do not
introduce any new industrial, radiological, chemical, or radiological
hazards that would present a health and safety risk nor would granting
the exemptions result in modifying or removing design or operational
controls or safeguards that are intended to mitigate onsite hazards.
This exemption does not diminish the effectiveness of other regulations
that ensure available funding for decommissioning, including 10 CFR
50.82(a)(6), which prohibits licensees from performing any
decommissioning activities that could foreclose release of the site for
possible unrestricted use, result in significant environmental impacts
not previously reviewed, or result in there no longer being reasonable
assurance that adequate funds will be available for decommissioning.
Therefore, the requested exemptions will not present an undue risk to
public health and safety if these exemptions are granted.
C. The Exemptions Are Consistent With the Common Defense and Security
The exemptions, allowing withdrawal of $187.8 million ($2017) of
the Diablo Canyon NDT for planning activities for radiological
decommissioning, spent fuel management, and site restoration do not
alter the design, function, or operation of any structures or plant
equipment that is necessary to maintain the safe and secure status of
the plant and will not adversely affect PG&E's ability to physically
secure the site or protect special nuclear material. Therefore, the
common defense and security is not impacted by the exemptions.
D. Special Circumstances
The regulation under 10 CFR 50.12(a)(2) states, in part, that
``[t]he Commission will not consider granting an exemption unless
special circumstances are present,'' and identifies, in 10 CFR
50.12(a)(2)(i)-(vi), when special circumstances are present. 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.
The underlying purpose of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR
50.82(a)(8)(ii) is to provide reasonable assurance that adequate funds
will be available for radiological decommissioning of power reactors
within 60 years of permanent cessation of operations. Strict
application of these requirements would limit withdrawal from the
Diablo Canyon NDT to $37.2 million ($18.6 million per unit) and would
allow spending only on planning activities for radiological
decommissioning.
The NRC staff performed an independent cash flow analysis using
information provided in PG&E's cash flow statement in Enclosure 2 of
the exemption request, dated December 13, 2018, and information
provided in PG&E's site-specific cost estimate submitted by letter
dated March 26, 2019 (ADAMS Accession No. ML19094B780). The balance in
the NDT as of December 31, 2018, was $1.31 billion for Unit 1 and $1.71
billion for Unit 2. The site-specific cost estimate states that PG&E
plans to deposit $226.7 million per year into the Unit 1 NDT in 2020-
2024, and $151.1 million per year into the Unit 2 NDT in 2020-2025. The
site-specific cost estimate also states that the estimated costs for
radiological decommissioning are $1.581 billion for Unit 1 and $1.578
billion for Unit 2.
Using the costs for radiological decommissioning for both units
provided in the site-specific cost estimate, a 2% rate of return on the
NDT (as allowed by 10 CFR 50.75(e)(1)(ii)), and considering withdrawal
of $187.8
[[Page 48958]]
million ($2017) from the Diablo Canyon NDT for the specified planning
activities, the NRC staff determined that the balance in the NDTs at
the completion of radiological decommissioning in 2038 is expected to
be approximately $1.046 billion for Unit 1 and $1.117 billion for Unit
2 indicating that the licensee will have sufficient funds to complete
radiological decommissioning. In addition, the staff's independent cash
flow analysis projects that the Diablo Canyon NDT would contain
approximately $3.68 billion in 2076 (for both units) when PG&E projects
the site will be fully decommissioned, and all spent fuel will be
removed from the site. Therefore, the NRC staff finds that there is
reasonable assurance of adequate funding for radiological
decommissioning because PG&E's withdrawal of $187.8 million ($2017)
from the Diablo Canyon NDT for radiological decommissioning, spent fuel
management, and site restoration planning activities will not adversely
impact PG&E's ability to complete radiological decommissioning within
60 years of permanent cessation of operations and terminate the Diablo
Canyon licenses.
In addition, under 10 CFR 50.75(f), the licensee will be required
to submit an annual report regarding the status of decommissioning
funding for Unit 1, beginning in 2020, and for Unit 2, beginning in
2021 because the units will be within five years of permanently
shutting down. Also, under 10 CFR 50.75(h)(2), the licensee is required
to provide the NRC with written notice at least 30 business days prior
to any disbursement from the NDT for spent fuel management and site
restoration planning activities. Lastly, the NRC notes that PG&E is an
electric utility as defined by 10 CFR 50.2, and therefore, has the
ability to address any future shortfall in the NDT with the CPUC (who
sets the electric rates for PG&E), should that be necessary in the
future.
In transitioning to and planning for decommissioning activities,
several power reactor licensees have requested exemptions from the
decommissioning funding assurance requirements in 10 CFR 50.75 and 10
CFR 50.82 to allow for the withdrawal of funds from their NDTs for
expenses unrelated to radiological decommissioning as defined in 10 CFR
50.2, such as for spent fuel management and site restoration.
Generally, the NRC has granted these exemption requests, on a case-by-
case basis, finding reasonable assurance that even after the proposed
withdrawals of funds for the requested use (e.g., spent fuel and site
restoration), sufficient funding remains in the NDT to complete
radiological decommissioning and terminate the license.
The Commission addresses a similar issue in Staff Requirements
Memorandum (SRM) SECY-02-0085, ``Recent Issues With Respect to
Decommissioning Funding Assurance That Have Arisen as Part of License
Transfer Applications and Other Licensing Requests,'' dated January 3,
2003 (ADAMS Accession No. ML030030539). In that SRM, the Commission
stated that, ``[t]he staff should continue to review requests for
withdrawal or non-transfer of funds from decommissioning trusts on a
case-by-case basis,'' and ``. . . while a trust is accumulating, our
regulations should be interpreted as strictly as possible to preclude
withdrawals . . . (both radiological and non-radiological).'' The staff
recognizes that PG&E's exemption request has been submitted by the
licensee during the operational life and decommissioning funding-
accumulating phase of the license. However, given the unique
circumstances of PG&E's request, including the known date of shutdown
of the units in advance, the time period until the units are
permanently shut down, PG&E's projected cost savings of $166.1 million
($2017), the current balance of the NDT, the projected balance of the
NDT at license termination based on the staff's independent cash flow
analysis, and PG&E's ability to address any future shortfalls in the
NDT with the CPUC, the NRC staff determined that the request is
justified under the SRM.
In summary, the NRC staff found that reasonable assurance exists
that adequate funds will be available in the Diablo Canyon NDT to
complete radiological decommissioning and terminate the Part 50
license, with sufficient funding available beyond that required under
10 CFR 50.75 to pay for PG&E's proposed planning activities for
radiological decommissioning, spent fuel management, and site
restoration. Accordingly, the NRC staff concludes that application of
the 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.82(a)(8)(ii) requirements
that limit the withdrawal of funds from the Diablo Canyon NDT for
decommissioning planning to 3 percent for operating reactors and
preclude withdrawals from the NDT for planning activities associated
with spent fuel management and site restoration are not necessary to
achieve the underlying purpose of the rule; thus, special circumstances
are present supporting approval of the exemption request.
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 who are similarly situated.
The NRC staff analyzed PG&E's cash flow statements in Enclosure 3
of the application dated December 13, 2018, that compared conducting
planning activities while the units are in operation and spending the
proposed $187.8 million ($2017) over the next few years against waiting
until permanent cessation of operations and then conducting the
planning activities. PG&E's analysis shows that by waiting to conduct
the planning activities, the licensee would need to spend significant
resources ($166.1 million) on various activities (security, operations,
chemical and radiation protection, and fire brigade) that can be
avoided by conducting the planning activities while the units are in
operation. The licensee also stated that executing on planning and
permitting activities between now and permanent shut down would allow
physical decommissioning to begin shortly after permanent shut down.
The licensee estimates this would reduce the duration of the
decommissioning activities by 2 years. Based on the above, the staff
finds that this increased cost would result in undue hardship or other
costs to the licensee that are significantly in excess of those
contemplated when the regulation was adopted as these increased costs
can be avoided by granting the exemption request.
E. Environmental Considerations
In accordance with 10 CFR 51.31(a), the Commission has determined
that granting of these exemptions will not have a significant effect on
the quality of the human environment (see Environmental Assessment and
Finding of No Significant Impact published on August 16, 2019 (84 FR
42025)).
IV. Conclusions
In consideration of the above, the NRC staff finds that PG&E has
provided reasonable assurance that adequate funds will be available for
the radiological decommissioning of Diablo Canyon, even with the
withdrawal of $187.8 million ($2017) from the Diablo Canyon NDT for
planning activities for radiological decommissioning, spent fuel
management, and site restoration.
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
[[Page 48959]]
consistent with the common defense and security. Also, special
circumstances are present. Therefore, the Commission hereby grants PG&E
exemptions from the requirements of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR
50.82(a)(8)(ii) to allow the licensee to use $187.8 million ($2017)
from the Diablo Canyon NDT for decommissioning planning above the 3
percent limitation specified in NRC regulations and for withdrawals
from the NDT for planning activities associated with spent fuel
management and site restoration.
The exemptions are effective upon issuance.
Dated at Rockville, Maryland, this 10th day of September 2019.
For the Nuclear Regulatory Commission.
/RA/
Craig G. Erlanger,
Director, Division of Operating Reactor Licensing, Office of Nuclear
Reactor Regulation.
[FR Doc. 2019-20091 Filed 9-16-19; 8:45 am]
BILLING CODE 7590-01-P