[Federal Register Volume 79, Number 103 (Thursday, May 29, 2014)]
[Notices]
[Pages 30900-30902]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12486]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 50-305; NRC-2014-0125]


License Exemption Request for Dominion Energy Kewaunee, Inc.

AGENCY: Nuclear Regulatory Commission.

ACTION: Exemption; issuance.

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SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) is granting 
exemptions in response to a request from Dominion Energy Kewaunee, Inc. 
(DEK or the licensee) dated April 4, 2013, as supplemented by letter 
dated November 6, 2013. The exemptions would permit the use of a 
portion of the Kewaunee Power Station (KPS) decommissioning trust fund 
(Trust) for expenses related to irradiated fuel management, and to be 
able to make such withdrawals from the trust fund without prior 
notification of the NRC. The NRC has reviewed the KPS Trust, the 
decommissioning approach and cost estimates in the KPS Post-Shutdown 
Decommissioning Activities Report (PSDAR), and the KPS updated 
Irradiated Fuel Management Plan and determined that, at this time, 
there is sufficient financial resources in the trust for both 
irradiated fuel management and to complete decommissioning activities.

ADDRESSES: Please refer to Docket ID NRC-2014-0125 when contacting the 
NRC about the availability of information regarding this document. You 
may access publicly-available information related to this document 
using any of the following methods:
     Federal Rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2014-0125. Address 
questions about NRC dockets to Carol Gallagher; telephone: 301-287-
3422; email: Carol.Gallagher@nrc.gov. For technical questions, contact 
the individual(s) listed in the FOR FURTHER INFORMATION CONTACT section 
of this document.
     NRC's Agencywide Documents Access and Management System 
(ADAMS): You may access publicly available documents online in the 
ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select ``ADAMS Public Documents'' and 
then select ``Begin Web-based ADAMS Search.'' For problems with ADAMS, 
please contact the NRC's Public Document Room (PDR) reference staff at 
1-800-397-4209, 301-415-4737, or by email to pdr.resource@nrc.gov. The 
ADAMS Accession number for each document referenced in this document 
(if that document is available in ADAMS) is provided the first time 
that a document is referenced.
     NRC's PDR: You may examine and purchase copies of public 
documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 
Rockville Pike, Rockville, Maryland 20852.

FOR FURTHER INFORMATION CONTACT: Jeanne A. Dion, telephone: 301-415-
1349, email: Jeanne.Dion@nrc.gov; or William Huffman, telephone: 301-
415-2046, email: William.Huffman@nrc.gov. Both of the Office of Nuclear 
Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington DC 
20555-0001.

I. Background

    Dominion Energy Kewaunee is the holder of Renewed Facility 
Operating License No. DPR-43. By letter dated February 25, 2013 (ADAMS 
Accession No. ML13058A065), DEK, submitted a certification to the NRC 
indicating it would permanently cease power operations at the Kewanee 
Power Station (KPS) on May 7, 2013. On May 7, 2013, DEK permanently 
ceased power operation at KPS. On May 14, 2013, DEK certified that it 
had permanently defueled the KPS reactor vessel (ADAMS Accession No. 
ML13135A209).
    The facility consists of a permanently shutdown and defueled 
pressurized water reactor located in Kewaunee County, Wisconsin.

II. Request/Action

    On April 4, 2013, DEK submitted a request for exemptions (ADAMS 
Accession No. ML13098A031) from Section 50.82(a)(8)(i)(A) and Section 
50.75(h)(1)(iv) of Part 50 of Title 10 of the Code of Federal 
Regulations (10 CFR). The exemptions from 10 CFR 50.82(a)(8)(i)(A) and 
10 CFR 50.75(h)(1)(iv) would permit withdrawal and use of a portion of 
the funds from the KPS Trust for irradiated fuel management consistent 
with the KPS updated Irradiated Fuel Management Plan and the KPS PSDAR. 
The licensee also requested an exemption from 10 CFR 50.75(h)(1)(iv) 
that would permit withdrawals from the Trust for irradiated fuel 
management activities without prior notification of the NRC, in the 
same manner as withdrawals are made under 10 CFR 50.82(a)(8) for 
decommissioning activities. By separate letters dated February 26, 
2013, and April 25, 2014, DEK submitted updates to the KPS Irradiated 
Fuel Management Plan as required by 10 CFR 50.54(bb) (ADAMS Accession 
Nos. ML13059A028 and ML14119A120). By separate letters dated February 
26, 2013, and April 25, 2014, DEK submitted its PSDAR and a revision to 
the PSDAR, as required by 10 CFR 50.82(a)(4)(i) (ADAMS Accession Nos. 
ML13063A248 and ML14118A382). In addition, DEK supplemented the April 
4, 2013, submittal with a letter dated November 6, 2013 (ADAMS 
Accession No. ML13312A916), in which DEK committed to executing a 
Parent Company Guarantee in the amount of up to $60 million if 
supplemental decommissioning funds are needed in the future. This 
Parent Company Guarantee will provide additional financial assurance 
that sufficient funding is available for decommissioning and irradiated 
fuel management beyond those funds already available in the Trust.
    The requirements of 10 CFR 50.82(a)(8)(i)(A) restrict the use of 
decommissioning trust fund withdrawals to expenses for legitimate 
decommissioning activities consistent

[[Page 30901]]

with the definition of decommissioning in 10 CFR 50.2, which reads as 
follows:

    ``to remove a facility or site safely from service and reduce 
residual radioactivity to a level that permits--
    (1) Release of the property for unrestricted use and termination 
of the license; or
    (2) Release of the property under restricted conditions and 
termination of the license.''

    The definition does not include activities associated with 
irradiated fuel management. The requirements of 10 CFR 50.75(h)(1)(iv) 
also restrict the use of decommissioning trust fund disbursements 
(other than for ordinary and incidental expenses) to decommissioning 
expenses until final decommissioning is completed. Therefore, 
exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) are 
needed to allow DEK to withdraw funds from the Trust for irradiated 
fuel management prior to completion of all decommissioning activities.
    The requirements of 10 CFR 50.75(h)(1)(iv) further provide that, 
except for decommissioning withdrawals being made under 10 CFR 
50.82(a)(8) or for payment of ordinary and incidental expenses, no 
disbursement may be made from the Trust without written notice to the 
NRC at least 30 working days in advance. Therefore an exemption from 10 
CFR 50.75(h)(1)(iv) is also needed to allow DEK to withdraw funds from 
the Trust for irradiated fuel management without prior NRC 
notification.

III. Discussion

    Pursuant to 10 CFR 50.12, the Commission may, upon application by 
any interested person or upon its own initiative, grant exemptions from 
the requirements of 10 CFR Part 50 when (1) the exemptions are 
authorized by law, will not present an undue risk to public health or 
safety, and are consistent with the common defense and security; and 
(2) any of the special circumstances listed in 10 CFR 50.12(a)(2) are 
present. These special circumstances include, among other things, the 
following:
    (a) Application of the regulation in the particular circumstances 
would not serve the underlying purpose of the rule or is not necessary 
to achieve the underlying purpose of the rule; or
    (b) Compliance would result in undue hardship or other costs that 
are significantly in excess of those contemplated when the regulation 
was adopted, or that are significantly in excess of those incurred by 
others similarly situated.

A. Special Circumstances

    Special circumstances, in accordance with 10 CFR 50.12(a)(2)(ii), 
are present whenever application of the regulation in the particular 
circumstances is not necessary to achieve the underlying purpose of the 
rule.
    The underlying purposes of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 
50.75(h)(1)(iv) are to provide reasonable assurance that adequate funds 
will be available for decommissioning of power reactors. Strict 
application of these requirements would prohibit withdrawal of funds 
from the Trust for activities associated with irradiated fuel 
management until final decommissioning at KPS has been completed.
    DEK's total Trust balance as of December 31, 2013, was $649.3 
million. According to the PSDAR, DEK intends to use SAFSTOR as its 
initial decommissioning approach. The DEK analysis in the PSDAR 
projects that the total cost of decommissioning KPS to be approximately 
$532.8 million (2012 dollars). As required by 10 CFR 50.54(bb), DEK 
estimated the costs associated with the long-term irradiated fuel 
management at $278.4 million (2012 dollars). DEK estimated expenditures 
for site restoration at $34.8 million (2012 dollars).
    The staff performed an independent cash flow analysis of the Trust 
over the projected 60 years of decommissioning activities (assuming an 
annual real rate of return of 2%, as allowed by 10 CFR 50.75(e)(1)(ii)) 
and determined a projected earnings of the Trust of $393.3 million. The 
staff confirms that there is presently adequate funding to complete all 
decommissioning activities based on the current funds and projected 
earnings of the Trust. In addition, DEK committed to executing a Parent 
Company Guarantee in the amount of up to $60 million if supplemental 
decommissioning funds are needed in the future pursuant to 10 CFR 
50.82(a)(8)(iv). This Parent Company Guarantee provides additional 
financial assurance that sufficient funding is available for 
decommissioning and irradiated fuel management beyond those funds 
already available in the Trust.
    The staff concludes, at this time, that the site-specific 
decommissioning cost analysis demonstrates adequate funds are available 
in the Trust for irradiated fuel management and completion of 
decommissioning within 60 years. The staff's review and conclusions are 
based on DEK's specific financial situation and decommissioning 
approach as described in the KPS PSDAR and the updated Irradiated Fuel 
Management Plan. Therefore, DEK has demonstrated reasonable assurance 
that sufficient funding will be available for both decommissioning and 
for irradiated fuel management and that the exemptions from the 
requirements of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv), 
with respect to use of the trust funds for irradiated fuel management, 
will still achieve the underlying purposes of the rules.
    In its submittal, DEK also requested exemption from the 
requirements of 10 CFR 50.75(h)(1)(iv) concerning prior written 
notification to the NRC for withdrawals from the Trust for irradiated 
fuel management activities. The underlying purpose of notifying the NRC 
prior to withdrawal of funds from the Trust is to provide opportunity 
for NRC intervention, when deemed necessary, if the withdrawals are for 
expenses other than those authorized by 10 CFR 50.75(h)(1)(iv) and 10 
CFR 50.82(a)(8) that could result in insufficient funds in the Trust to 
accomplish radiological decontamination of the site.
    By granting the exemptions to 10 CFR 50.75(h)(1)(iv) and 10 CFR 
50.82(a)(8) to allow withdrawals from the Trust for irradiated fuel 
management, the staff considers that the withdrawals consistent with 
the KPS updated Irradiated Fuel Management Plan are authorized. As 
stated previously, the staff has determined that there are sufficient 
funds in the Trust to complete legitimate decommissioning activities, 
as well as management of irradiated fuel consistent with the KPS PSDAR 
and updated Irradiated Fuel Management Plan. Pursuant to the annual 
reporting requirements in 10 CFR 50.82(a)(8)(v)-(vii), licensees are 
required to monitor and report the status of the decommissioning trust 
fund and the funding status for managing irradiated fuel. These reports 
provide NRC awareness of and the ability to take action on any actual 
or potential funding deficiencies. The requested exemption would not 
allow withdrawal of funds from the KPS Trust for any other purpose that 
is not currently authorized in the regulations without prior 
notification to the NRC. Therefore, the granting of this exemption to 
10 CFR 50.75(h)(1)(iv) to allow the licensee to make withdrawals from 
the Trust to cover authorized expenses for irradiated fuel management 
without prior written notification to the NRC will still meet the 
underlying purpose of the regulation.
    Special circumstances, in accordance with 10 CFR 50.12(a)(2)(iii) 
are present whenever compliance would result in

[[Page 30902]]

undue hardship or other costs that are significantly in excess of those 
contemplated when the regulation was adopted, or that are significantly 
in excess of those incurred by others similarly situated.
    The licensee states that the Trust contains funds in excess of the 
estimated costs of radiological decommissioning and that these excess 
funds are needed for irradiated fuel management. The NRC does not 
preclude use of funds from the decommissioning trust in excess of those 
needed for radiological decommissioning for other purposes, such as 
irradiated fuel management or site restoration. The NRC has stated that 
funding for irradiated fuel management may be commingled in the 
decommissioning trust provided the licensee is able to identify and 
account the radiological decommissioning funds separately from the 
funds set aside for irradiated fuel management (see NRC Regulatory 
Issue Summary 2001-07, Rev 1, ``10 CFR 50.75 Reporting and 
Recordkeeping for Decommissioning Planning'' dated January 8, 2009 
[ADAMS Accession No. ML083440158], and Regulatory Guide 1.184, Rev 1, 
``Decommissioning of Nuclear Power Reactors,'' [ADAMS Accession No. 
ML13144A840]). To prevent access to those excess funds in the Trust 
because irradiated fuel management is not associated with radiological 
decommissioning would create an unnecessary financial burden without 
any corresponding safety benefit. The adequacy of the Trust to cover 
the cost of activities associated with irradiated fuel management in 
addition to radiological decommissioning is supported by the staff's 
site-specific decommissioning cost analysis. If DEK cannot use its 
Trust for irradiated fuel management activities, it would need to 
obtain additional funding that would not be recoverable from the Trust, 
or DEK would have to modify its decommissioning approach and methods. 
The NRC staff concludes that either outcome would impose an unnecessary 
and undue burden significantly in excess of that contemplated when the 
regulation was adopted.
    Therefore, since the underlying purposes of 10 CFR 
50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1(iv) would be achieved by 
allowing DEK to use a portion of the Trust for irradiated fuel 
management without prior NRC notification, and compliance with the 
rules would result in an undue hardship or other costs that are 
significantly in excess of those contemplated when the regulation was 
adopted, the special circumstances required by 10 CFR 50.12(a)(2)(ii) 
and 10 CFR 50.12(a)(2)(iii) exist.

B. Authorized by Law

    The exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 
50.75(h)(1(iv) would allow DEK to use a portion of the funds from the 
Trust for irradiated fuel management, consistent with the KPS updated 
Irradiated Fuel Management Plan and PSDAR, and would allow DEK to 
withdraw funds from the trust for irradiated fuel management activities 
without prior notice to the NRC. As stated above, 10 CFR 50.12 allows 
the NRC to grant exemptions from the requirements of 10 CFR Part 50. 
The NRC staff has determined that granting of the licensee's proposed 
exemption will not result in a violation of the Atomic Energy Act of 
1954, as amended, or the Commission's regulations. Therefore, the 
exemption is authorized by law.

C. No Undue Risk to Public Health and Safety

    The underlying purposes of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 
50.75(h)(1)(iv) are to provide reasonable assurance that adequate funds 
will be available for decommissioning of power reactors. Based on the 
site-specific cost estimate and the cash flow analysis, use of a 
portion of the Trust for irradiated fuel management will not adversely 
impact the DEK's ability to terminate the KPS license (i.e., complete 
radiological decontamination) within 60 years, consistent with the 
schedule and costs contained in the KPS updated Irradiated Fuel 
Management Plan and PSDAR. Furthermore, exemption from 10 CFR 
50.75(h)(1)(iv) to allow the licensee to make authorized withdrawals 
from the Trust to cover expenses for irradiated fuel management without 
prior written notification to the NRC should not affect the sufficiency 
of funds in the Trust to accomplish radiological decontamination of the 
site.
    Based on the above, no new accident precursors are created by using 
the Trust in the proposed manner. Thus, the probability of postulated 
accidents is not increased. Also, based on the above, the consequences 
of postulated accidents are not increased. No changes are being made in 
the types or amounts of effluents that may be released offsite. There 
is no significant increase in occupational or public radiation 
exposure. Therefore, there is no undue risk to public health and 
safety.

D. Consistent With the Common Defense and Security

    The proposed exemption would allow DEK to use a portion of the 
funds from the Trust for irradiated fuel management, consistent with 
the KPS updated Irradiated Fuel Management Plan and PSDAR. Irradiated 
fuel management is an integral part of the planned KPS decommissioning 
process as discussed in the KPS PSDAR and should not adversely affect 
DEK's ability to physically secure the site or protect special nuclear 
material. This change to enable use of a portion of the funds from the 
Trust for irradiated fuel management will not alter the scope of, or 
availability of funding for the licensee's security program. Therefore, 
the common defense and security is not impacted by this exemption.

E. Environmental Considerations

    In accordance with 10 CFR 51.31(a), the Commission has determined 
that the granting of this exemption will not have a significant effect 
on the quality of the human environment (see Environmental Assessment 
and Finding of No Significant Impact published on May 2, 2014; 79 FR 
25156).

IV. Conclusions

    Accordingly, the Commission has determined that, pursuant to 10 CFR 
50.12(a), the exemptions are authorized by law, will not present an 
undue risk to the public health and safety, and are consistent with the 
common defense and security. Also, special circumstances are present. 
Therefore, the Commission hereby grants DEK exemptions from the 
requirements of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) to 
allow withdrawals from the KPS Trust for irradiated fuel management in 
accordance with the KPS updated Irradiated Fuel Management Plan and 
PSDAR, without prior notice to the NRC. The granting of this exemption 
does not allow withdrawal of funds from the KPS Trust for any other 
purpose that is not currently authorized in the regulations without 
prior notification to the NRC.
    The exemptions are effective upon issuance.

    Dated at Rockville, Maryland, this 21st day of May, 2014.

    For the Nuclear Regulatory Commission.
Michele G. Evans,
Director, Division of Operating Reactor Licensing, Office of Nuclear 
Reactor Regulation.
[FR Doc. 2014-12486 Filed 5-28-14; 8:45 am]
BILLING CODE 7590-01-P