[Federal Register Volume 89, Number 3 (Thursday, January 4, 2024)]
[Notices]
[Pages 483-487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28951]



[[Page 483]]

=======================================================================
-----------------------------------------------------------------------

NUCLEAR REGULATORY COMMISSION

[Docket No. 50-255; NRC-2023-0198]


Holtec Decommissioning International, LLC, and Holtec Palisades, 
LLC; Palisades Nuclear Plant; Exemption

AGENCY: Nuclear Regulatory Commission.

ACTION: Notice; issuance.

-----------------------------------------------------------------------

SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) has issued an 
exemption in response to a request from Holtec Decommissioning 
International, LLC (HDI), an indirect wholly owned subsidiary of Holtec 
International, that would allow HDI and Holtec Palisades, 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 the Palisades Nuclear Plant.

DATES: The exemption was issued on December 22, 2023.

ADDRESSES: Please refer to Docket ID NRC-2023-0198 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-2023-0198. Address 
questions about Docket IDs in Regulations.gov to Stacy Schumann; 
telephone: 301-415-0624; 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 this document.
     NRC's PDR: The PDR, where you may examine and order copies 
of publicly available documents, is open by appointment. To make an 
appointment to visit the PDR, please send an email to 
[email protected] or call 1-800-397-4209 or 301-415-4737, between 8 
a.m. and 4 p.m. eastern time (ET), Monday through Friday, except 
Federal holidays.

FOR FURTHER INFORMATION CONTACT: Tanya E. Hood, Office of Nuclear 
Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, 
Washington, DC 20555-0001, telephone: 301-415-1387, email: 
[email protected].

SUPPLEMENTARY INFORMATION: The text of the exemption is attached.

    Dated: December 28, 2023.

    For the Nuclear Regulatory Commission.
Tanya E. Hood,
Project Manager, Reactor Decommissioning Branch, Division of 
Decommissioning, Uranium Recovery and Waste Programs, Office of Nuclear 
Material Safety and Safeguards.

Attachment--Exemption

Nuclear Regulatory Commission

Docket No. 50-255

Holtec Decommissioning International, LLC, and Holtec Palisades, LLC; 
Palisades Nuclear Plant Exemption

I. Background

    By letter dated October 19, 2017 (Agencywide Documents Access and 
Management System Accession No. ML17292A032), Entergy Nuclear 
Operations, Inc. (ENOI) certified to the U.S. Nuclear Regulatory 
Commission (NRC, or Commission) that it planned to permanently cease 
power operations at the Palisades Nuclear Plant (Palisades) no later 
than May 31, 2022. On May 20, 2022, ENOI permanently ceased power 
operations at Palisades, and by letter dated June 13, 2022 
(ML22164A067), ENOI certified to the NRC that the fuel was permanently 
removed from the Palisades reactor vessel and placed in the spent fuel 
pool (SFP) on June 10, 2022. Accordingly, pursuant to paragraphs 
50.82(a)(2) of title 10 of the Code of Federal Regulations (10 CFR), 
the 10 CFR part 50 renewed facility operating license for Palisades 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. Palisades 
spent fuel is currently stored in the SFP and in dry cask storage at 
the independent spent fuel storage installation (ISFSI).

II. Request/Action

    By letter dated October 26, 2022 (ML22299A059), Holtec 
Decommissioning International, LLC (HDI), one of the licensees of 
Palisades and an indirect wholly owned subsidiary of Holtec 
International (Holtec), requested an exemption on behalf of Holtec 
Palisades, LLC, the other Palisades licensee, from 10 CFR 140.11(a)(4) 
concerning offsite primary and secondary liability insurance. HDI and 
Holtec Palisades, LLC, are hereafter collectively referred to as the 
licensee. 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 Palisades.
    The regulation at 10 CFR 140.11(a)(4) requires licensees to have 
and maintain primary financial protection in an amount of $450 million. 
In addition, licensees are required to participate in an industry 
retrospective rating plan (secondary financial protection) that commits 
licensees 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 Palisades 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 shutdown 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

[[Page 484]]

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.'' Therefore, 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 licensees 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. Therefore, 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 (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 shutdown 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 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 Palisades 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 significantly 
reduced.
    The NRC staff performed an evaluation of the design-basis accidents 
(DBAs) for Palisades being permanently defueled as part of SECY-23-
0043, ``Request by Holtec Decommissioning International, LLC for 
Exemptions from Certain Emergency Planning Requirements for Palisades 
Nuclear Plant,'' dated May 15, 2023 (ML23054A179). The licensee has 
stated, and the NRC staff agrees, that while spent fuel remains in the 
SFP, the only postulated DBAs that would remain applicable to Palisades 
in the permanently defueled condition that could contribute a 
significant dose is a fuel handling accident (FHA) in the Fuel Handling 
Building, where the SFP is located; a liquid waste incident; a waste 
gas incident and a postulated cask drop accident. For completeness, the 
NRC staff also evaluated the applicability of other DBAs documented in 
the Palisades Updated Final Safety Analysis Report (UFSAR) 
(ML21125A344) to ensure that these accidents would not have 
consequences that could potentially exceed the 10

[[Page 485]]

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).
    The NRC staff previously approved the revised DBA radiological 
consequence analyses in License Amendment No. 272, ``Palisades Nuclear 
Plant--Issuance of Amendment No. 272 Re: Permanently Defueled Technical 
Specifications (EPID L-2021-LLA-0099),'' dated May 13, 2022 
(ML22039A198). As documented in the NRC's safety evaluation for License 
Amendment No. 272, the NRC staff determined that 17 days is the amount 
of time needed for decay to meet the EPA early phase PAG limit of 1 rem 
total effective dose equivalent (TEDE) at the exclusion area boundary 
(EAB). In using the same assumptions, except for decay time, the 
licensee's dose analysis for an FHA with 60 days of decay in the SFP 
results in a dose of 0.014 rem TEDE at the EAB. This result meets the 
6.3 rem acceptance criteria of RG 1.183 at the EAB and low population 
zone. In addition, it also meets the EPA early phase PAG criterion of 1 
rem TEDE and below 10 percent EPA PAG threshold for declaration of a 
site area emergency.
    The licensee has determined that after a decay time of at least 60 
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. Palisades permanently ceased power operations on May 20, 
2022. After over a year of decay, the thyroid dose from an FHA would be 
negligible. 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 release would make an insignificant 
contribution to the total effective dose equivalent, which is the 
parameter of interest in the determination of the EPA early phase PAGs 
for sheltering or evacuation. Therefore, the NRC staff concludes that 
the dose consequences from an FHA for the permanently shutdown 
Palisades facility would not approach the EPA early phase PAG 
criterion.
    The NRC staff reviewed the consequences of an FHA, liquid waste 
incident, waste gas incident, and postulated cask drop accident in 
detail during the review of previously approved license amendment 
requests and exemptions from various emergency planning requirements 
for Palisades and found them to be acceptable. Since this technical 
information has not changed in relation to this exemption request, the 
NRC staff relied on these previous conclusions to conduct portions of 
the review for this exemption request. The NRC staff notes that while 
the licensee continues to rely on the information from previously 
approved licensing actions, the calculated doses would be expected to 
be lower when this exemption is implemented due to additional decay 
time beyond the time assumed in the previously approved actions. 
Therefore, any offsite consequence from a design-basis radiological 
release is highly unlikely and, therefore, 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 Palisades has been permanently 
shutdown.
    The licensee performed an analysis demonstrating that 12 months 
after Palisades permanently shut down, the spent fuel stored in the SFP 
will have decayed to the extent that the requested exemption may be 
implemented at Palisades. Given Palisades' permanent shutdown date was 
May 20, 2022, and the fuel decay time of 12 months, May 31, 2023, 
terminates the period during which the spent fuel could heat-up to clad 
ignition temperature within 10 hours under adiabatic conditions. This 
analysis, ``Holtec Spent Fuel Pool Calculation,'' dated July 8, 2022, 
[non-public], was submitted as Attachment 1 by the licensee in support 
of the letter dated July 11, 2022 (ML22192A134), in which the licensee 
requested exemptions from specific portions of 10 CFR 50.47 and 
appendix E to 10 CFR part 50 for the Palisades license. The analysis 
determined the decay time necessary to ensure a minimum of 10 hours is 
available before the fuel cladding temperature of the hottest fuel 
assembly in the SFP reaches 900 [deg]C. This 10-hour minimum threshold 
provides sufficient time for the licensee to take mitigative actions, 
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 licensee's calculation to verify that 
important physical properties of materials were within acceptable 
ranges and that the results were accurate. The NRC staff determined 
that the physical properties of materials were appropriate in the 
licensee's calculations related to SFP heatup considerations for 
Palisades. Therefore, the NRC staff found that 12 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 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 (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., Pilgrim Nuclear 
Power Station, published in the Federal Register on January 14, 2020 
(85 FR 1827); Three Mile Island Nuclear Station, Unit 1,

[[Page 486]]

published in the Federal Register on March 26, 2021 (86 FR 14472); and 
Duane Arnold Energy Center, published in the Federal Register on May 
18, 2021 (86 FR 26961)). 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 (ML15062A483). These prior exemptions 
were based on the licensee demonstrating that the SFP could be air-
cooled consistent with the technical criterion discussed above.
    In the exemption request dated October 26, 2022, the licensee 
compared the Palisades 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 (ML082260098). The analysis described in 
NUREG/CR-6451 determined that natural air circulation would adequately 
cool fuel that has decayed for 17 months after operation in a typical 
PWR. 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 Palisades fuel storage configuration is 
smaller than the values modeled in NUREG/CR-6451. However, these 
differences are considered to be conservatively offset by the lower 
power density of the Palisades fuel assemblies, substantially larger 
downcomer areas for improved buoyancy driven air flow and natural 
circulation, and the fewer number of fuel assemblies that are stored in 
the fuel racks as compared to the NUREG/CR-6451 PWR model. Therefore, 
the cooling air flow should be comparable.
    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 (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.
    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. The NRC staff also notes that 
similar exemptions from these insurance requirements have been granted 
to other permanently shutdown and defueled power reactors upon 
satisfactory demonstration that zirconium fire risk from the irradiated 
fuel stored in the SFP is of negligible concern.

A. 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 Palisades 
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 DBA 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 12 
months decay, the fuel stored in the Palisades SFP will be capable of 
being adequately cooled by air in the highly unlikely event of pool 
drainage. Moreover, in the highly unlikely beyond DBA scenario where 
the SFP water 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. Therefore, the NRC staff 
concludes that the fuel stored in the Palisades SFP will have decayed 
sufficiently by the requested effective date for the exemption of 12 
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

[[Page 487]]

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 release are minimal, which justifies 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 Palisades is permanently shutdown, 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 Palisades 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. Therefore, the underlying purpose of the 
regulations will not be adversely affected by the reductions in 
insurance coverage. Accordingly, an exemption from participation in the 
secondary insurance pool and a reduction in the primary insurance to 
$100 million, a value more in line with the potential consequences of 
accidents, would be in the public interest in that this 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 Palisades and HDI to lower 
the Palisades primary insurance levels and to withdraw from the 
secondary retrospective premium pool at the requested effective date of 
12 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 of the Division of Decommissioning, Uranium 
Recovery, and Waste Programs in the NRC's Office of Nuclear Material 
Safety and Safeguards, I have determined that approval of the exemption 
request involves no significant hazards consideration, as defined in 10 
CFR 50.92, because reducing the licensee's offsite liability 
requirements at Palisades 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 Palisades 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 
Palisades and HDI an exemption from the requirements of 10 CFR 
140.11(a)(4) for Palisades. Palisades permanently ceased power 
operations on May 20, 2022. The exemption from 10 CFR 140.11(a)(4) 
permits Palisades 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 12 months 
after permanent cessation of power operations, which was May 20, 2023. 
Because this period had already elapsed, the exemption is effective 
upon issuance.

    Dated: this 22nd day of December 2023.

    For the Nuclear Regulatory Commission.

/RA/

Jane Marshall,

Director, Division of Decommissioning, Uranium Recovery, and Waste 
Programs, Office of Nuclear Material Safety and Safeguards.

[FR Doc. 2023-28951 Filed 1-3-24; 8:45 am]
BILLING CODE 7590-01-P