[Federal Register Volume 84, Number 228 (Tuesday, November 26, 2019)]
[Proposed Rules]
[Pages 65032-65034]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25581]


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NUCLEAR REGULATORY COMMISSION

10 CFR Part 171

[Docket No. PRM-171-1; NRC-2019-0084]


Nuclear Power Plant License Fees Upon Commencing Commercial 
Operation

AGENCY: Nuclear Regulatory Commission.

ACTION: Petition for rulemaking; partial consideration in the 
rulemaking process.

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SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) will consider in 
its rulemaking process one issue raised in a petition for rulemaking, 
PRM-171-1, dated February 28, 2019, submitted by Dr. Michael D. Meier 
on behalf of the Southern Nuclear Operating Company (the petitioner), 
and is denying the remaining issue in PRM-171-1. The petitioner 
requested that the NRC amend its regulations related to the start of 
the assessment of annual fees for certain nuclear power plants.

DATES: The docket for the petition for rulemaking PRM-171-1 is closed 
on November 26, 2019.

ADDRESSES: Please refer to Docket ID NRC-2019-0084 when contacting the 
NRC about the availability of information for this action. You may 
obtain publicly-available information related to this action by any of 
the following methods:
     Federal Rulemaking Website: Go to https://www.regulations.gov/ and search for Docket ID NRC-2019-0084. 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 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, at 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 the SUPPLEMENTARY INFORMATION 
section.
     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: Dennis Andrukat, Office of Nuclear 
Material Safety and Safeguards, telephone: 301-415-1325, email: 
[email protected], or Jo A. Jacobs, Office of the Chief Financial 
Officer, telephone: 301-415-8388; email: [email protected]. Both are 
staff of the U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. The Petition
II. Public Comments on the Petition
III. Reasons for Consideration
IV. Reasons for Denial
V. Conclusion

I. The Petition

    The NRC received and docketed a petition for rulemaking (PRM), 
dated February 28, 2019 (ADAMS Accession No. ML19081A015) filed by Dr. 
Michael D. Meier, on behalf of the Southern Nuclear Operating Company 
(the petitioner). The NRC published a notice of docketing and request 
for comment in the Federal Register on June 10, 2019 (84 FR 26774). The 
petitioner requested that the NRC revise its regulations in part 171 of 
title 10 of the Code of Federal Regulations (10 CFR), ``Annual fees for 
reactor licenses and fuel cycle licenses and materials licenses, 
including holders of certificates of compliance, registrations, and 
quality assurance program approvals and government agencies licensed by 
the NRC,'' related to the start of the assessment of annual fees for a 
combined license (COL) holder, to align with commencement of 
``commercial operation'' \1\ of a licensed nuclear power plant. 
Specifically, the petitioner requested that the NRC revise the timing 
of when annual license fees commence for holders of a COL under 10 CFR 
part 52, ``Licenses, certifications, and approvals for nuclear power 
plants,'' in order to coincide with the time when a reactor achieves 
commercial operation, rather than when a Sec.  52.103(g) finding is 
issued, which is when the NRC finds that the acceptance criteria in the 
COL are met and the licensee can begin operating the facility.
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    \1\ The petitioner defined ``commercial operation.'' The NRC 
does not have an official definition for commercial operation.
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    The petitioner stated that the issuance of the Sec.  52.103(g) 
finding will occur prior to reactor startup, and several months before 
commercial operation of the reactor. The petitioner further noted that 
during this startup phase, the reactor will not have achieved 
commercial operation, and the licensee will be incapable of deriving 
revenue from the production of energy beyond the de minimis amounts 
from test energy. The petitioner asserted that because commercial 
operation does not occur until several months after the Sec.  52.103(g) 
finding, the current language of Sec.  171.15(a), ``Annual fees: 
Reactor licensees and independent spent fuel storage licenses,'' does 
not align with the NRC's stated policy to assess annual fees based on 
the benefits of receiving

[[Page 65033]]

authorization to operate. The petitioner proposed that the regulations 
in Sec.  171.15(a) be revised such that the responsibility of 10 CFR 
part 52 licensees to pay annual fees under 10 CFR part 171 be imposed 
at the time when the power reactor is deemed available for commercial 
operation under the licensee's and/or State regulatory agency's 
accounting rules.
    The NRC identified two main issues in the petition related to the 
start of the assessment of annual fees for certain nuclear power 
plants:
    Issue 1: To amend the regulations, for 10 CFR part 52 COL holders, 
to commence the assessment of annual fees at a time after the Sec.  
52.103(g) finding is issued.
    Issue 2: To amend the regulations, for 10 CFR part 52 COL holders, 
to commence the assessment of annual fees when the ``facility has been 
declared available for commercial operation under applicable standards 
of the licensee or the State regulatory commission with jurisdiction 
over the facility.''

II. Public Comments on the Petition

    The docketing notice for the petition invited interested persons to 
submit comments. The comment period closed on July 10, 2019. During the 
30-day public comment period, the NRC received five public comment 
submissions with a total of seven comments, from the Nuclear Energy 
Institute, industry stakeholders, and one non-government organization. 
Comments received on the petition will be addressed in the proposed 
rule, ``Revision of Fee Schedules: Fee Recovery for FY 2020'' (NRC-
2017-0228; RIN 3150-AK10).

III. Reasons for Consideration

    The NRC will consider Issue 1 in the rulemaking process.
    The petitioner proposed that Sec.  171.15(a) be revised such that 
the responsibility for 10 CFR part 52 licensees to pay NRC annual fees 
under 10 CFR part 171 begin when the power reactor is deemed available 
for commercial operation under the licensee's and/or State regulatory 
agency's accounting rules. The petitioner stated there could be several 
months between the issuance of the Sec.  52.103(g) finding and when the 
reactor has achieved commercial operation--that is, ``capable of 
deriving revenue from the production of energy beyond the de minimis 
amounts from test energy.''
    The NRC regulations at Sec.  171.15 currently require a 10 CFR part 
52 COL holder to pay the annual fee upon the Commission's finding under 
Sec.  52.103(g) that all acceptance criteria in the COL are met. 
Historically, annual fees commence when a licensee becomes authorized 
to possess and use licensed material, because this is when the licensee 
receives the benefits of a license. For 10 CFR part 52 COL holders, the 
authorization to use the material (i.e., begin operating the reactor) 
is currently received when a Sec.  52.103(g) finding is issued. 
Additionally, the NRC does not base fees on economic considerations 
such as licensees' economic status, market conditions, or the inability 
of licensees to pass through costs to its customers.
    The NRC is required by statute, the Omnibus Budget Reconciliation 
Act of 1990, as amended, to apply fairness and equity in the assessment 
of fees to licensees. The NRC has found that it is fair and equitable 
to change the timing of when annual fees commence for 10 CFR part 52 
licensees from when a Sec.  52.103(g) finding is issued to a time that 
aligns more closely with becoming fully operational after the start up 
and initial testing phase. The NRC recognizes that, after the Sec.  
52.103(g) finding, fuel must be loaded and power ascension testing must 
be completed to provide assurance that the facility is fully 
operational. This process includes written notification to the NRC that 
successful power ascension testing is competed.\2\
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    \2\ Only the current 10 CFR part 52 COLs contain a standard 
license condition that requires written notification be submitted to 
the NRC upon successful completion of power ascension testing. The 
NRC will consider adding this standard license condition to future 
10 CFR parts 50 and 52 power reactor licensees.
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    Based on the NRC's review of this issue in PRM-171-1 and the public 
comments received, the NRC also will consider amending the timing 
regarding the assessment of annual fees to apply to future 10 CFR part 
50 power reactor licensees. Public commenters were supportive of the 
proposed change, including the Nuclear Energy Institute, which 
represents numerous members of the class of licensees that would be 
directly impacted by this change. This issue will be considered in the 
FY 2020 proposed fee rule.

IV. Reasons for Denial

    The NRC is denying Issue 2 raised by the petitioner.
    The petitioner proposed that the regulations in Sec.  171.15(a) be 
revised such that the responsibility for NRC annual fees under 10 CFR 
part 171 for 10 CFR part 52 licensees be imposed at the time when the 
power reactor is deemed available for commercial operation under the 
licensee's and/or State regulatory agency's accounting rules. The 
petitioner recommended revising Sec.  171.15(a) to commence annual fees 
``after the facility for which such license was issued has been 
declared available for commercial operation under applicable standards 
of the licensee or the State regulatory commission with jurisdiction 
over the facility.'' The petitioner also recommended deleting ``after 
the Commission has made the finding under Sec.  52.103(g).''
    The Commission has previously addressed this issue in the statement 
of considerations for the FY 2002 final fee rule (67 FR 42611; June 24, 
2002). Specifically, the Commission stated that ``the NRC has not based 
its fees on licensees' economic status, market conditions, or the 
ability of licensees to pass through the costs to its customers.'' In 
keeping with the agency's safety and security mission, the NRC's 
regulations deliberately are not tied to economic viability or 
profitability, and the NRC has not assessed fees based on these 
concepts.
    The petitioner interpreted the statement of considerations from the 
FY 2007 final fee rule (72 FR 31426, June 6, 2007) to mean that 
charging annual fees is associated with the ``benefits of receiving the 
NRC's authorization to operate.'' The petitioner maintained that this 
benefit is not gained with the issuance of a Sec.  52.103(g) finding 
but with the start of commercial operation of the reactor. The 
petitioner defined commercial operation as the point at which ``the 
power reactor will be capable of generating sufficient energy to 
reliably serve the licensee's customers and generate sufficient revenue 
for the licensees to justify imposition of the annual fee.''
    For three reasons, the NRC did not elect to adopt this approach. 
First, in contrast to the point at which power ascension tests are 
complete, there is no regulatory requirement for a licensee to notify 
the NRC when the licensee first begins commercial operation. Second, 
the term ``commercial operation'' is undefined in NRC regulations. 
Third, the Commission's longstanding and fundamental policy underlying 
the fee structure states that the imposition of the annual fee should 
not be related to the licensee's financial justification if the NRC is 
to maintain the integrity of the statutorily mandated fee collection 
requirements. The statement of considerations for the FY 2007 final fee 
rule, which the petitioner references, discusses that annual fees are 
based on the benefits of receiving operation authorization, regardless 
of whether the

[[Page 65034]]

licensee chooses to operate. The ``benefits'' received, as described 
therein, are not related to a determination of when commercial 
operation begins or the licensee's ability to generate revenue. The 
collection of annual fees is required to recover the resources needed 
to regulate each fee class that are not otherwise recovered through 
charges assessed for specific services in each fee class under 10 CFR 
part 170, ``Fees for facilities, materials, import and export licenses, 
and other regulatory services under the Atomic Energy Act of 1954, as 
amended.'' Additionally, NRC fees are not based on whether a licensed 
entity is commercially operating or commercially viable, and the NRC 
achieves fairness and equity by conducting an annual public rulemaking 
process to update its fees. Furthermore, an analysis of a licensee's 
commercial viability is outside the mission of the agency. Therefore, 
the NRC will not consider amending fee regulations to begin annual fee 
assessments based upon commercial operation under the licensee's and/or 
State regulatory agency's accounting rules.

V. Conclusion

    For the reasons cited in this document, the NRC will consider one 
issue raised in this petition in its rulemaking process and will deny 
the remaining issue. The NRC will consider the one issue in the FY 2020 
proposed fee rule. The NRC notes that acceptance of this portion of the 
petition into the rulemaking process does not mean that the 
petitioner's concerns will be addressed exactly as the petitioner 
requested. The NRC tracks the status of petitions and rules on its 
websites at https://www.nrc.gov/reading-rm/doc-collections/rulemaking-ruleforum/petitions-by-year.html and https://www.nrc.gov/about-nrc/regulatory/rulemaking/rules-petitions.html. The public may monitor the 
docket for the rulemaking addressing Issue 1 on the Federal rulemaking 
website, https://www.regulations.gov, by searching on Docket ID NRC-
2017-0228. In addition, the Federal rulemaking website allows members 
of the public to receive alerts when changes or additions occur in a 
docket folder. To subscribe: (1) Navigate to the docket folder (NRC-
2017-0228); (2) click the ``Email Alert'' link; and (3) enter an email 
address and select the frequency for email receipts (daily, weekly, or 
monthly). As in all rulemakings, the NRC will request and consider 
public comments during the proposed rule phase before determining the 
approach that will be the basis for the final rule.

    Dated at Rockville, Maryland, this 19th day of November, 2019.

    For the Nuclear Regulatory Commission.
Maureen E. Wylie,
Chief Financial Officer.
[FR Doc. 2019-25581 Filed 11-25-19; 8:45 am]
BILLING CODE 7590-01-P