[Federal Register Volume 85, Number 8 (Monday, January 13, 2020)]
[Notices]
[Pages 1827-1832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00285]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 50-293; NRC-2019-0245]


Holtec Pilgrim, LLC; Holtec Decommissioning International, LLC; 
Pilgrim Nuclear Power Station

AGENCY: Nuclear Regulatory Commission.

ACTION: Exemption; issuance.

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SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) has issued an 
exemption in response to a request from the licensee that would permit 
Holtec Pilgrim, LLC and Holtec Decommissioning International, LLC to 
reduce the required level of primary offsite liability insurance from 
$450 million to $100 million and to eliminate the requirement to carry 
secondary financial protection for Pilgrim Nuclear Power Station.

DATES: The exemption was issued on January 6, 2020.

ADDRESSES: Please refer to Docket ID NRC-2019-0245 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-2019-0245. 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: Scott Wall, Office of Nuclear Reactor 
Regulation, U.S. Nuclear Regulatory Commission, Washington DC 20555-
0001; telephone: 301-415-2855, email: [email protected].

SUPPLEMENTARY INFORMATION: The text of the exemption is attached.

    Dated at Rockville, Maryland, this 7th day of January 2020.

    For the Nuclear Regulatory Commission.
Scott P. Wall,
Senior Project Manager, Plant Licensing Branch III, Division of 
Operating Reactor Licensing, Office of Nuclear Reactor Regulation.

Attachment--Exemption

NUCLEAR REGULATORY COMMISSION

Docket No. 50-293

Holtec Pilgrim, LLC

Holtec Decommissioning International, LLC

Pilgrim Nuclear Power Station

Exemption

I. Background

    By letter dated November 10, 2015 (Agencywide Documents Access and 
Management System (ADAMS) Accession No. ML15328A053), Entergy Nuclear 
Operations, Inc. (ENOI) certified to the U.S. Nuclear Regulatory 
Commission (NRC) that it planned to permanently cease power operations 
at Pilgrim Nuclear Power Station (Pilgrim) no later than June 1, 2019. 
On May 31, 2019, ENOI permanently ceased power operations at Pilgrim. 
By letter dated June 10, 2019 (ADAMS Accession No. ML19161A033), ENOI 
certified to the NRC that the fuel was permanently removed from the 
Pilgrim reactor vessel and placed in the spent fuel pool (SFP) on June 
9, 2019. Accordingly, pursuant to Title 10 of the Code of Federal 
Regulations (10 CFR) Section 50.82(a)(2), the Pilgrim renewed facility 
operating license no longer authorizes operation of the reactor or 
emplacement or retention of fuel in the reactor vessel. The facility is 
still authorized to possess and store irradiated (i.e., spent) nuclear 
fuel. Spent fuel is currently stored onsite at the Pilgrim facility in 
the SFP and in a dry cask independent spent fuel storage installation 
(ISFSI).

II. Request/Action

    By letter dated March 25, 2019 (ADAMS Accession No. ML19088A127), 
as supplemented by letter dated July 30, 2019 (ADAMS Accession No. 
ML19211B509), ENOI requested an exemption from 10 CFR 140.11(a)(4) 
concerning offsite primary and secondary liability insurance. The 
exemption from 10 CFR 140.11(a)(4) would permit the licensee to reduce 
the required level of primary offsite liability insurance from $450 
million to $100 million and to eliminate the requirement to carry 
secondary financial protection for Pilgrim.
    By letter dated November 16, 2018 (ADAMS Accession No. 
ML18320A031), ENOI, on behalf of itself and Entergy Nuclear Generation 
Company (ENGC) (to be known as Holtec Pilgrim, LLC), Holtec 
International (Holtec), and Holtec Decommissioning International, LLC 
(HDI, the licensee) (together, Applicants), requested that the NRC 
consent to: (1) The indirect transfer of control of Renewed Facility 
Operating License No. DPR-35 for Pilgrim, as well as the general 
license for the Pilgrim ISFSI (together, the Licenses), to Holtec; and 
(2) the direct transfer of ENOI's operating authority (i.e., its 
authority to conduct licensed activities at Pilgrim) to HDI. In 
addition, the Applicants requested that the NRC approve a conforming 
administrative amendment to the Licenses to reflect the proposed direct 
transfer of the Licenses from ENOI to HDI; a planned name change for 
ENGC from ENGC to Holtec Pilgrim, LLC; and deletion of certain license 
conditions to reflect satisfaction and termination of all ENGC 
obligations after the license transfer and equity sale.

[[Page 1828]]

    By Order dated August 22, 2019 (ADAMS Accession No. ML19170A265), 
the NRC staff approved the direct and indirect transfers requested in 
the November 16, 2018 application. Additionally, on August 22, 2019, 
HDI informed the NRC (ADAMS Accession No. ML19234A357) that:
    HDI will assume responsibility for all ongoing NRC regulatory 
actions and reviews currently underway for Pilgrim Nuclear Power 
Station. HDI respectfully requests NRC continuation of these regulatory 
actions and reviews.
    On August 26, 2019, ENOI informed the NRC that the license transfer 
transaction closed on August 26, 2019 (ADAMS Accession No. 
ML19239A037). On August 27, 2019 (ADAMS Accession No. ML19235A050), the 
NRC staff issued Amendment No. 249 to reflect the license transfer. 
Accordingly, HDI is now the licensee for decommissioning operations at 
Pilgrim.
    The regulation at 10 CFR 140.11(a)(4) requires each licensee to 
have and maintain primary financial protection in an amount of $450 
million. In addition, the licensee is required to participate in an 
industry retrospective rating plan (secondary financial protection) 
that commits each licensee to pay into an insurance pool to be used for 
damages that may exceed primary insurance coverage. Participation in 
the industry retrospective rating plan will subject the licensee to 
deferred premium charges up to a maximum total deferred premium of 
$131,056,000 with respect to any nuclear incident at any operating 
nuclear power plant and up to a maximum annual deferred premium of 
$20,496,000 per incident.
    Many of the accident scenarios postulated in the updated safety 
analysis reports for operating power reactors involve failures or 
malfunctions of systems, which could affect the fuel in the reactor 
core and, in the most severe postulated accidents, would involve the 
release of large quantities of fission products. With the permanent 
cessation of power operations at Pilgrim and the permanent removal of 
the fuel from the reactor vessel, many accidents are no longer 
possible. Similarly, the associated risk of offsite liability damages 
that would require insurance or indemnification is commensurately lower 
for permanently shut down and defueled plants. Therefore, the licensee 
requested an exemption from 10 CFR 140.11(a)(4) to permit a reduction 
in primary offsite liability insurance and to withdraw from 
participation in the industry retrospective rating plan.

III. Discussion

    Pursuant to 10 CFR 140.8, ``Specific exemptions,'' 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 the licensee'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 $450 million) and 
a specified amount of secondary insurance coverage (currently up to 
$131,056,000 per reactor). In the event of an accident causing offsite 
damages in excess of $450 million, each licensee would be assessed a 
prorated share of the excess damages, up to $131,056,000 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.'' In accordance with 10 CFR 
50.82(a)(2), the license for a power reactor no longer authorizes 
operation of the reactor or emplacement or retention of fuel into the 
reactor vessel upon the docketing of the certifications for permanent 
cessation of operations and permanent removal of fuel from the reactor 
vessel. Therefore, the reactor cannot be used to generate power.
    Accordingly, a reactor that is undergoing decommissioning has no 
``rated capacity.'' Thus, the NRC may 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.
    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, ``Financial 
Protection Required of Licensees of Large Nuclear Power Plants During 
Decommissioning,'' dated May 10, 1993 (ADAMS Accession No. 
ML12257A628). The legal analysis underlying SECY-93-127 concluded that, 
upon a technical finding that lesser potential hazards exist after 
permanent cessation of power operations (and the reactor having no 
``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 power operations 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 SFP at a recently shut down reactor, 
the potential for an offsite radiological release from a zirconium fire 
with consequences comparable in some respects to an operating reactor 
accident remains. That risk is very low at the time of reactor shutdown 
because of design provisions that prevent a significant reduction in 
coolant inventory in the SFP under normal and accident conditions and 
becomes no longer credible once the continual reduction in decay heat 
provides ample time to restore coolant inventory and permits air 
cooling in a drained SFP. After that time, the probability of a large 
offsite radiological release from a zirconium fire is negligible for 
permanently shutdown reactors, but the SFP 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

[[Page 1829]]

to establish an appropriate level of required financial protection for 
such permanently 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 shutdown 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 Pilgrim 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 $450 million to $100 million and to withdraw 
from the secondary insurance pool. 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.
    The NRC staff performed an evaluation of the design-basis accidents 
for Pilgrim being permanently defueled as part of SECY-19-0078, 
``Request by Entergy Nuclear Operations, Inc. for Exemptions from 
Certain Emergency Planning Requirements for the Pilgrim Nuclear Power 
Station,'' dated August 9, 2019 (ADAMS Accession No. ML18347A717).
    ENOI has stated, and the NRC staff agrees, that while spent fuel 
remains in the SFP, the only postulated design-basis accident that 
would remain applicable to Pilgrim in the permanently defueled 
condition that could contribute a significant dose is a fuel handling 
accident (FHA) in the Reactor Building, where the SFP is located. For 
completeness, the NRC staff also evaluated the applicability of other 
design-basis accidents documented in the Pilgrim Updated Final Safety 
Analysis Report (UFSAR) (ADAMS Accession No. ML16083A494) to ensure 
that these accidents would not have consequences that could potentially 
exceed the 10 CFR 50.67 dose limits and Regulatory Guide 1.183, 
``Alternative Radiological Source Terms for Evaluating Design Basis 
Accidents at Nuclear Power Reactors,'' dose acceptance criteria or 
approach the U.S. Environmental Protection Agency (EPA) early phase 
protective action guides (PAGs).
    In the Pilgrim UFSAR, the licensee has determined that within 46 
days after shutdown, the FHA doses would decrease to a level that would 
not warrant protective actions under the EPA early phase PAG framework, 
notwithstanding meeting the dose limit requirements under 10 CFR 50.67 
and dose acceptance criteria under Regulatory Guide 1.183. The NRC 
staff notes that the doses from an FHA are dominated by the isotope 
Iodine-131. Pilgrim permanently ceased power operations on May 31, 
2019. With 10 months of decay, the thyroid dose from an FHA would be 
negligible. After 10 months of decay, the only isotope remaining in 
significant amounts, among those postulated to be released in a design-
basis FHA, would be Krypton-85. Since Krypton-85 primarily decays by 
beta emission, the calculated skin dose from an FHA analysis would make 
an insignificant contribution to the total effective dose equivalent 
(TEDE), which is the parameter of interest in the determination of the 
EPA early phase PAGs for sheltering or evacuation. The NRC staff 
concludes that the dose consequence from an FHA for the permanently 
shutdown Pilgrim would not approach the EPA early phase PAGs. 
Therefore, any offsite consequence from a design-basis radiological 
release is highly unlikely and, thus, 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 shutdown and 
defueled 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 heatup 
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 Pilgrim has been permanently 
shut down.
    In the analysis provided in Attachment 2, ``Calculation No. PNPS-
EC-81416-M1418, Adiabatic Heatup Analysis for Drained Spent Fuel 
Pool,'' to the letter dated February 18, 2019 (ADAMS Accession No. 
ML19056A260), the licensee compared the conditions for the hottest fuel 
assembly stored in the SFP to a criterion proposed in SECY-99-168, 
``Improving Decommissioning Regulations for Nuclear Power Plants,'' 
dated June 30, 1999 (ADAMS Accession No. ML12265A598), applicable to 
offsite emergency response for the unit in the decommissioning process. 
This criterion considers the time for the hottest assembly to heat up 
from 30 degrees Celsius ([deg]C) to 900 [deg]C adiabatically. If the 
heatup time is greater than 10 hours, then offsite emergency 
preplanning involving the plant is not necessary. Based on the limiting 
fuel assembly for decay heat and adiabatic heatup analysis presented in 
Attachment 2, at 10 months after permanent cessation of power 
operations (i.e., 10 months of decay time), the time for the hottest 
fuel assembly to reach 900 [deg]C is 10 hours after the assemblies have 
been uncovered. As stated in NUREG-1738, ``Technical Study of Spent 
Fuel Pool Accident Risk at Decommissioning Nuclear Power Plants,'' 
dated February 2001 (ADAMS Accession No. ML010430066), 900 [deg]C is an 
acceptable temperature to use for assessing onset of fission product 
release under transient conditions to establish the critical decay time 
for determining the availability of 10 hours for deployment of 
mitigation equipment and, if necessary, for offsite agencies to take 
appropriate action to protect the health and safety of the public if 
fuel and cladding oxidation occurs in air.
    The NRC staff reviewed the calculation to verify that important 
physical properties of materials were within acceptable ranges and the 
results were accurate. The NRC staff determined that physical 
properties were appropriate. Therefore, the NRC staff found that 10 
months after permanent cessation of power operations, more than 10 
hours would be available before a significant offsite release could 
begin. The NRC staff concluded that the adiabatic heatup calculation 
provided an acceptable method for determining the minimum

[[Page 1830]]

time available for deployment of mitigation equipment and, if 
necessary, implementing measures under a comprehensive general 
emergency plan.
    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 NRC 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); 
Crystal River Unit 3 Nuclear Generation Plant, published in the Federal 
Register on May 6, 2015 (80 FR 26100); and Oyster Creek Nuclear 
Generating Station, published in the Federal Register on December 28, 
2018 (83 FR 67365)).
    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 evaluated the issue of zirconium fires in SFPs 
and presented an independent evaluation of an 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, 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 July 30, 2019 (ADAMS Accession No. ML19211B509), 
ENOI provided a supplement to its exemption request addressing air-
cooling of fuel in a drained SFP. In the attachment to this letter, the 
licensee compared Pilgrim fuel storage parameters with those used in 
NRC generic evaluations of fuel cooling included in NUREG/CR-6451, ``A 
Safety and Regulatory Assessment of Generic BWR [Boiling-Water Reactor] 
and PWR [Pressurized-Water Reactor] Permanently Shutdown Nuclear Power 
Plants,'' dated August 1997 (ADAMS Accession No. ML082260098). The 
analysis described in NUREG/CR-6451 determined that natural air 
circulation would adequately cool fuel that has decayed for 7 months 
after operation in a typical BWR. The licensee compared the post-
shutdown fuel storage conditions with those assumed for the analysis 
presented in NUREG/CR-6451. The licensee found that the Pilgrim fuel 
storage configuration is nearly identical to the representative 
configuration used in the NUREG/CR-6451 analysis with respect to the 
fuel assembly size, the fuel storage pitch, the rack material, and the 
rack orifice size being larger than the BWR fuel assembly inlet nozzle 
size. Thus, the cooling air flow should be comparable. However, 
although the Pilgrim final cycle fuel operated at a lower power 
density, it achieved a higher total burnup than assumed for the NUREG/
CR-6451 analysis. The licensee determined that the higher decay heat 
resulting from the increased burnup would be offset by the longer decay 
time (i.e., 10 months) at the effective date of the requested exemption 
as compared to the decay time used in the NUREG/CR-6451 analysis (i.e., 
7 months), which results in a lower total decay heat rate. Therefore, 
at 10 months after permanent shutdown (i.e., the effective date of the 
requested exemption), the NRC staff has reasonable assurance that fuel 
stored in the Pilgrim SFP would be adequately air-cooled in the 
unlikely event the SFP completely drained.
    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 NRC 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.
    In addition, the licensee performed adiabatic heatup 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 transfer from the spent 
fuel via conduction, convection, or radiation would be impeded. The 
licensee's adiabatic heatup analyses demonstrate that 10 months after 
the permanent cessation of operations, 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 the March 25, 2019, application, ENOI furnished the following 
information: ``Based on the length of time it would take for the 
adiabatic heat up to occur, there is ample time to respond to any 
partial drain down event that might cause such an occurrence by 
restoring SFP cooling or makeup, or providing SFP spray. As a result, 
the likelihood that such a scenario would progress to a zirconium fire 
is deemed not credible.''
    In the NRC staff's evaluation contained in SECY-19-0078, the NRC 
staff assessed the ENOI accident analyses associated with the 
radiological risks from a zirconium fire at a permanently shut down and 
defueled Pilgrim site. For the highly 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 NRC staff found that 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 NRC 
staff finds that 10 hours is sufficient time to support deployment of

[[Page 1831]]

mitigation equipment, consistent with plant conditions, to prevent the 
zirconium cladding from reaching a point of rapid oxidation.
    The NRC 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 SFP is no 
longer thermal-hydraulically capable of sustaining a zirconium fire 
based on a plant-specific analysis. In addition, the NRC staff notes 
that similar exemptions from these insurance requirements have been 
granted to other permanently shut down and defueled power reactors upon 
satisfactory demonstration that zirconium fire risk from the irradiated 
fuel stored in the SFP is of negligible concern.

A. The Exemption Is 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 $450 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 permanent cessation of operations, the Commission has the 
discretion under the PAA to reduce the amount of insurance required of 
a licensee undergoing decommissioning.
    Based on its review of the exemption request, the NRC staff 
concludes that the technical criteria for relieving Holtec Pilgrim and 
HDI from their existing primary and secondary insurance obligations 
have been met. As explained above, the NRC 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 highly 
unlikely and the need for a significant amount of offsite liability 
insurance coverage is unwarranted. Additionally, the NRC staff 
determined that, after 10 months decay, the fuel stored in the Pilgrim 
SFP will be capable of being adequately cooled by air in the highly 
unlikely event of pool drainage. Moreover, in the highly 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 NRC staff has determined that 
at least 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 NRC staff concludes that the fuel stored in the 
Pilgrim SFP will have decayed sufficiently by the requested effective 
date for the exemption of 10 months after permanent cessation of power 
operations to support a reduction in the required insurance consistent 
with SECY-00-0145.
    The NRC staff has determined that granting 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. The Exemption 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.
    The basis provided in SECY-93-127, SECY-00-0145, and SECY-01-0100 
allows 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 accident are commensurately less. The licensee 
analyzed and the NRC staff 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 
$131,056,000. However, because Pilgrim 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 the licensee is greatly disproportionate to the 
radiological risk posed by Pilgrim when compared to operating reactors. 
The reduced overall risk to the public at decommissioning power plants 
does not warrant that the licensee 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 SECY-
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

[[Page 1832]]

the public interest in that this ensures that there will be adequate 
funds to address any of those consequences and helps to ensure 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 Holtec Pilgrim and HDI to lower 
the Pilgrim primary insurance levels and to withdraw from the secondary 
retrospective premium pool at the requested effective date of 10 months 
after permanent cessation of power operations, is in the public 
interest.

C. Environmental Considerations

    The NRC's 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.
    As the Director, Division of Operating Reactor Licensing, Office of 
Nuclear Reactor Regulation, I have 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 Pilgrim 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 Pilgrim 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 Holtec Pilgrim 
and HDI an exemption from the requirements of 10 CFR 140.11(a)(4) for 
Pilgrim. Pilgrim permanently ceased power operations on May 31, 2019. 
The exemption from 10 CFR 140.11(a)(4) permits Pilgrim to reduce the 
required level of primary financial protection from $450 million to 
$100 million and to withdraw from participation in the secondary layer 
of financial protection 10 months after permanent cessation of power 
operations.
    The exemption is effective as of 10 months after permanent 
cessation of power operations.

    Dated at Rockville, Maryland, this 6th day of January 2020.

    For the Nuclear Regulatory Commission.

Craig G. Erlanger,

Director, Division of Operating Reactor Licensing, Office of Nuclear 
Reactor Regulation.

[FR Doc. 2020-00285 Filed 1-10-20; 8:45 am]
 BILLING CODE 7590-01-P