Standby Support for Certain Nuclear Plant Delays, 46306-46333 [06-6818]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 71, Number 155 (Friday, August 11, 2006)]
[Rules and Regulations]
[Pages 46306-46333]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-6818]



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Part III





Department of Energy





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10 CFR Part 950



Standby Support for Certain Nuclear Plant Delays; Final Rule

Federal Register / Vol. 71, No. 155 / Friday, August 11, 2006 / Rules 
and Regulations

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DEPARTMENT OF ENERGY

10 CFR Part 950

RIN 1901-AB17


Standby Support for Certain Nuclear Plant Delays

AGENCY: Department of Energy.

ACTION: Final rule.

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SUMMARY: The Department of Energy (Department) is adopting, with 
changes, the interim final rule published on May 15, 2006. This interim 
final rule established a new part to implement section 638 of the 
Energy Policy Act of 2005, which authorizes the Secretary of Energy to 
enter into Standby Support Contracts with sponsors of advanced nuclear 
power facilities to provide risk insurance for certain delays 
attributed to the regulatory process or litigation.

DATES: Effective Date: This final rule will become effective on 
September 11, 2006, except for Sec. Sec.  950.10(b), 950.12(a) and 
950.23 which contain information collection requirements that have not 
been approved by the Office of Management and Budget (OMB). The 
Department of Energy will publish a document in the Federal Register 
announcing the effective date of those sections.

FOR FURTHER INFORMATION CONTACT: Kenneth Chuck Wade, Project Manager, 
Office of Nuclear Energy, NE-30, U.S. Department of Energy, 1000 
Independence Avenue, SW, Washington DC 20585, (301) 903-6509; or Marvin 
Shaw, Attorney-Advisor, U.S. Department of Energy, Office of the 
General Counsel, GC-52, 1000 Independence Avenue, SW., Washington, DC 
20585, (202) 586-2906.

SUPPLEMENTARY INFORMATION: 
I. Section 638 of the Energy Policy Act of 2005
II. Rulemaking History
III. Final Rule
    A. Overview of the Rule
    B. Section-by-Section Analysis
    C. Cost Analysis of Standby Support Program
IV. Regulatory Review Requirements
    A. Review Under Executive Order 12866
    B. Review Under Executive Order 12988
    C. Review Under Executive Order 13132
    D. Review Under Executive Order 13175
    E. Review Under the Regulatory Flexibility Act
    F. Review Under the Paperwork Reduction Act
    G. Review Under the National Environmental Policy Act
    H. Review Under the Unfunded Mandates Reform Act
    I. Review Under Executive Order 13211
    J. Review Under the Treasury and General Government 
Appropriations Act 1999
    K. Review Under the Treasury and General Government 
Appropriations Act 2001
    L. Congressional Notification
V. Approval of the Office of Secretary

I. Section 638 of the Energy Policy Act of 2005

    On August 8, 2005, President Bush signed into law the Energy Policy 
Act of 2005 (the Act) (Pub. L. 109-58, 119 Stat. 594). Section 638 of 
the Act addresses the President's proposal to reduce uncertainty in the 
licensing of advanced nuclear facilities. (42 U.S.C. 16014). The 
purpose of section 638 is to facilitate the construction and full power 
operation of new advanced nuclear facilities by providing risk 
insurance for such projects. Such insurance is intended to reduce 
certain regulatory and litigation risks for sponsors that are beyond 
their control in order to encourage investment in the construction of 
new advanced nuclear facilities. By providing insurance to cover 
certain of these risks, the Federal government can reduce the financial 
risk to project sponsors that invest in advanced nuclear facilities, 
which the Administration and Congress believe are necessary to promote 
a more diverse and secure supply of energy for the Nation.
    Section 638 contains a number of provisions to establish the 
Standby Support Program (the ``Program''). These provisions are related 
to (1) the Secretary's authority to enter into contracts and details 
related to such contracts, (2) the establishment of funding accounts, 
(3) the funding of these accounts, (4) the types of regulatory and 
litigation delays Congress determined were to be covered by the 
Program, (5) the types of delays that Congress determined were to be 
excluded from coverage, (6) the maximum amount of coverage available 
for up to six advanced nuclear facilities with a distinction made for 
the initial two reactors and the subsequent four reactors, (7) the 
types of costs to be covered by the Program, (8) the requirements for a 
sponsor of an advanced nuclear facility, and (9) reporting requirements 
by the Nuclear Regulatory Commission (``Commission'').
    Section 638(g) requires the Department to issue regulations to 
carry out section 638. This section directs the Secretary to issue an 
interim final rule within 270 days after enactment of the Act and to 
adopt final regulations within one year after enactment.

II. Rulemaking History

    Prior to developing and issuing this final rule, the Department 
held a public workshop and published two Federal Register notices: a 
Notice of Inquiry (NOI) (70 FR 71107, November 25, 2005) and an interim 
final rule (71 FR 28200, May 15, 2006).
    The NOI discussed the major topics related to section 638, 
including the types of sponsors and facilities covered, the Secretary's 
contracting authority, appropriations and funding accounts, covered and 
excluded delays, covered costs and requirements, and disagreements and 
dispute resolution. The NOI included a general request for comments and 
identified certain topics on which the Department specifically 
requested comments. Among other matters, the Department sought comment 
about how the statute could be implemented most effectively to achieve 
the objective of reducing the risks associated with certain delays in 
the advanced nuclear facility licensing process and thereby facilitate 
the expeditious construction and operation of new advanced nuclear 
facilities.
    On December 15, 2005, the Department sponsored a public workshop to 
allow the public to provide oral comments about section 638 and the 
NOI. Over 60 people attended the public workshop. A transcript of the 
proceedings is posted at www.nuclear.gov. The Department received nine 
written comments on the NOI, including comments from the Commission, a 
nuclear energy trade association, several utilities and other potential 
sponsors, an economic consulting firm, and a public advocacy group. In 
addition to responding to the questions posed in the NOI, the 
commenters provided their general views on implementing section 638.
    On May 6, 2006, the Department issued an interim final rule that 
established a new part 950 in Title 10 of the Code of Federal 
Regulations (CFR), Standby Support for Certain Nuclear Plant Delays. 
The rule includes five subparts that set forth the procedures, 
requirements and limitations for the award and administration of 
Standby Support Contracts that indemnify a project sponsor of certain 
costs that may be incurred due to a delay in full power operation of 
the sponsor's advanced nuclear facility.
    Subpart A set forth the purpose, scope and applicability, and 
definitions of the regulation. Subpart B set forth provisions 
addressing the Standby Support Contract process, including the process 
whereby a sponsor and the Program Administrator\1\ enter into a

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Conditional Agreement prior to a Standby Support Contract, obligations 
of a sponsor prior to entering into a Conditional Agreement, the 
provisions of that Conditional Agreement, conditions precedent that 
must be satisfied prior to entering into a Standby Support Contract, 
funding issues related to the Standby Support Program, reconciliation 
of costs, and termination of a Conditional Agreement. Subpart B also 
addressed the provisions for each Standby Support Contract. These 
include general contract terms, such as the contract's purpose, the 
advanced nuclear facility that is the subject of the contract, the 
sponsor's contribution, the maximum aggregate compensation, the term of 
the contract, cancellation provisions, termination by sponsor, 
assignment, claims administration, and dispute resolution; and specific 
contract terms that implement section 638's provisions related to 
covered events, exclusions, covered delay, and covered costs. Subpart C 
set forth the claims administration process, including the submission 
of claims and payment of covered costs under a Standby Support 
Contract. Subpart D set forth provisions related to dispute resolution, 
including disputes involving covered events and disputes involving 
covered costs. In each case, subpart D provided a two-step process, 
first requiring non-binding mediation and then binding arbitration, if 
the parties cannot reach agreement. Subpart E set forth miscellaneous 
provisions about the Department's authority to monitor and audit a 
sponsor's activities and the public disclosure of information provided 
by a sponsor to the Department.
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    \1\ In this notice of final rulemaking, the Department 
distinguishes among the terms ``Program Administrator,'' ``Claims 
Administrator,'' and ``Department.'' ``Program Administrator'' is 
used to identify situations in which a Department representative 
executes a Conditional Agreement or a Standby Support Contract; 
``Claim Administrator'' is used to identify situations in which a 
Department representative administers the claims process; and 
``Department'' is used to identify general statements of policy and 
situations involving more general matters such as funding and 
appropriations.
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    The Department received four written comments addressing the 
interim final rule, including comments from a nuclear industry trade 
association, two utilities, and a public advocacy group. In telephone 
communications and a meeting, interested persons provided verbal 
communications to Department representatives that addressed the same 
issues raised in written comments on the interim final rule. The 
Department responds to all the relevant comments in section III of the 
preamble to this final rule.

III. Final Rule

A. Overview

    In today's final rule, the Department has largely adopted the 
provisions set forth in the interim final rule. The revised 10 CFR part 
950 adopted by this final rule will become effective thirty days after 
the final rule's publication in the Federal Register. The changes 
between the interim final rule and the final rule will not have any 
effect, given that the Department anticipates that no sponsor will 
apply for a combined license until after the final rule takes effect 
later in 2006. In addition to some editorial and other non-substantive 
changes that modify and clarify the interim final rule, particularly in 
subparts C and D, the Department is making the following changes 
including:
     In section 950.3, the definition for ``litigation'' has 
been modified to include ``local courts;'' (See also 950.14(a)(4))
     In section 950.3, the definition for ``pre-operational 
hearing'' has been modified to state ``any Commission hearing, that is 
provided for in 10 CFR part 52, after issuance of the combined license 
that is provided for in 10 CFR part 52;'' (See also 950.14(a)(3))
     In section 950.11(b), the following clarifying sentence 
has been added: ``A sponsor may elect to allocate 100 percent of the 
coverage to either the Program Account or the Grant Account.''
     In section 950.11(c)(1), the following clarifying sentence 
has been added with respect to funding: ``Covered costs paid through 
the Program Account are backed by the full faith and credit of the 
United States;''
     In section 950.11(e), the provision addressing the process 
by which the anticipated contributions are specified in the Conditional 
Agreement has been clarified;
     In section 950.12(c), the provision on limitations to 
entering into a Standby Support Contract has been modified;
     In section 950.12(d), the following section has been added 
with respect to abandonment of a project and cancellation by the 
Department: ``(1) If the Program Administrator cancels a Standby 
Support Contract for abandonment pursuant to 950.13(f)(1), the Program 
Administrator may re-execute a Standby Support Contract with a sponsor 
other than a sponsor or that sponsor's assignee with whom the 
Department had a cancelled contract, provided that any such replacement 
Standby Support Contract is executed in accordance with the terms and 
conditions set forth in this part, and shall be deemed to be one of the 
subsequent four reactors under this part. (2) Not more than two Standby 
Support Contracts may be re-executed in situations involving 
abandonment and cancellation by the Program Administrator.''
     In section 950.13(f), the following has been added with 
respect to cancellation of a Standby Support Contract: ``(1) If the 
sponsor abandons construction, and the abandonment is not caused by a 
covered event or force majeure, the Program Administrator may cancel 
the Standby Support Contract by giving written notice thereof to the 
sponsor and the parties have no further rights or obligations under the 
contract.''
     In section 950.13(h), the following has been added with 
respect to assignment of payments: ``The Program Administrator shall 
permit the assignment of payment of covered costs with prior written 
notice to the Department.''
     In section 950.13(k), the following has been added with 
respect to reestimation under the Federal Credit Reform Act (FCRA) of 
1990: ``The sponsor is neither responsible for any increase in loan 
costs, nor entitled to recoup fees for any decrease in loan costs, 
resulting from the re-estimation conducted pursuant to FCRA.''
     In section 950.14(b), certain types of excluded events 
have been deleted.
     In section 950.14, an additional section, 950.14(e), has 
been added to address adjustments to the inspections, tests, analysis 
and acceptance criteria (ITAAC) schedule.
     In section 950.20, the following has been added with 
respect to exclusions: ``the Department is required to establish an 
exclusion in accordance with 950.14(b).''
     Sections 950.21, 950.22, and 950.24 have been modified to 
add information reporting requirements and to clarify the Department's 
role in establishing an exclusion.
     Subpart D has been revised to specify that dispute 
resolution will be administered by the Civilian Board of Contract 
Appeals.
    The preamble first provides a section-by-section response to the 
specific comments on the interim final rule and explains modifications 
from the interim final rule to the final rule. The preamble then 
provides a detailed discussion of the Standby Support Program's 
estimated costs.
B. Section-by-Section Analysis

Section 950.1--Purpose

    In section 950.1 of the interim final rule, the Department stated 
that ``The

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purpose of this part is to facilitate the construction and full power 
operation of new advanced nuclear facilities by providing risk 
insurance for certain delays attributed to the Nuclear Regulatory 
Commission regulatory process or to litigation.''
    The public advocacy group commented that the Department should 
avoid using taxpayer funds to provide an expensive subsidy to the 
nuclear industry. Industry commenters stated that they believe the 
program should provide broad coverage and financial certainty.
    The Department notes that Congress specifically authorized the 
Standby Support Program and provided explicit direction on calculating 
the premium for the insurance and allocating this premium between 
appropriated funds and funds from sponsors or other non-Federal 
sources. The Department has sought to ensure that, in implementing this 
authorization and direction, it put in place a Program that facilitates 
the construction and full power operation of new advanced nuclear 
facilities, protects taxpayer funds, reflects both the magnitude of the 
risk presented and the protection provided against that risk, and 
avoids undermining the safety of constructing advanced nuclear 
facilities. The Department continues to believe that the regulations 
developed by the Department are appropriate and necessary to effectuate 
section 638's objectives.
Multiple Incentive Programs
    The Department requested comment on whether sponsors should be 
eligible to participate in multiple Federal Government loan guarantee 
or other programs intended to incentivize the construction and 
operation of nuclear facilities and, if so, whether clarification is 
needed on issues such as the amounts an entity can receive under more 
than one Federal program.
    In response to the interim final rule, industry commenters stated 
that participation in the different programs established under the Act 
should not limit a project sponsor's eligibility for any of these 
programs, or the amounts that a sponsor can receive under them. 
Industry commenters stated that the objective of these incentives is to 
facilitate and encourage the construction and full power operation of 
new advanced nuclear facilities and that the programs are 
complementary, not exclusive. For example, commenters stated that the 
cost of any loan guarantee should be adjusted downward to reflect the 
reduced risk of default on the underlying debt obligation as a result 
of the Standby Support Program. The public advocacy group stated that 
the nuclear industry includes some of the country's wealthiest 
companies and should not be eligible for numerous subsidies for the 
same plant.
    The Department has determined that the Act does not prohibit a 
sponsor from acquiring for a specific facility more than one, or even 
all, of the various forms of incentives provided under the Act. 
Therefore, in this final rule, the Department is not prohibiting a 
sponsor from being eligible for all of the incentive programs for which 
the Act makes it eligible.
Section 950.3--Definitions
    Advanced nuclear facility. In the notice of interim final 
rulemaking, the Department took the definition of ``advanced nuclear 
facility'' verbatim from the Act. The Department further noted that 
there are likely no reactor designs that have been approved after 
December 31, 1993 that are ``substantially similar'' to designs that 
were certified before that date for which potential project sponsors 
have suggested interest. Nevertheless, the Department reserved the 
right to make a final determination if a project sponsor chooses a 
design that the Department has not anticipated.
    The Department received two comments addressing this issue. The 
public advocacy group stated that companies should not be encouraged to 
apply for design certification at the same time as a combined license. 
In contrast, the industry trade association generally agreed with the 
definition in the interim final rule, yet requested that the Department 
clarify the use of the word ``approved,'' particularly with respect to 
what constitutes design approval. Industry further stated that under 
the Commission's rules in 10 CFR part 52, Commission design approval 
may be obtained in two ways. The design may be certified in a 
rulemaking proceeding, or the design may be approved in the combined 
licensing proceeding itself. The trade association stated that the Act 
does not address these two paths to design approval, and requested that 
the final rule state explicitly that either path to design approval is 
acceptable under the rule.
    The Department agrees with the trade association's comment that the 
pathway for approval is subject to the Commission's rules under 10 CFR 
part 52, and that design approval may be obtained by either path. 
Nevertheless, the Department has determined that there is no reason to 
amplify or alter the statutorily specified definition. Consistent with 
section 638, the definition at section 950.3 states that an advanced 
nuclear facility must be approved by the Commission and makes no 
distinction as to when or how such approval is issued other then what 
is stated in section 638 (i.e., ``the approval is made after December 
31, 1993.'') Although the Department agrees that sponsors should be 
encouraged to obtain design approval prior to filing a combined license 
application with the Commission, thereby expediting the combined 
license review process, such a stringent requirement is not mandated by 
the Act and is not necessary to support the purposes of the Standby 
Support Program.
    Covered Event--Litigation. Section 638(c)(1)(B) refers to 
``litigation that delays the commencement of full-power operations * * 
* '' In the interim final rule, the Department defined litigation to 
include only adjudication in State, federal, or tribal courts, 
including appeals of Commission decisions related to the combined 
license to such courts, and excluding administrative litigation that 
occurs at the Commission related to the combined license process. (See 
also section 950.14(a)(4) which addresses covered events.)
    The Department received divergent comments on the definition of 
litigation. The public advocacy group expressed concern that the 
definition for litigation was overly expansive, claiming that it should 
cover only frivolous lawsuits; on the other hand, industry commenters 
believed it was not expansive enough. The public advocacy group 
disagreed with including in the definition appeals of Commission 
decisions to the courts and in including litigation involving safety or 
security issues. The industry commenters requested that administrative 
litigation that occurs at the Commission related to the combined 
license should not be excluded from the definition. The industry trade 
association stated that Congress did not intend to condition the 
coverage based on the type of litigation causing the delay or when such 
delay occurs. Further, the industry commenters objected to the 
Department's interpretation that only litigation resulting in a court 
order enjoining the sponsor's actions would be eligible as a covered 
delay.
    As explained in the interim final rule, the Department has broad 
authority to interpret the terms in section 638, including the terms 
``litigation'' and ``pre-operational hearing.'' After reviewing the 
comments in light of section 638, the Department has determined that it 
is appropriate to adopt the definition in the interim final, except for 
minor changes as discussed below.

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    Section 638(c) sets forth three types of events for coverage, which 
Congress terms ``Inclusions.'' These are (1) ITAAC-related delays, (2) 
pre-operational hearings, and (3) litigation. Based on this statutory 
delineation, the Department has determined that most of the requested 
changes to the definition set forth in the interim rule would be 
inappropriate and inconsistent with section 638. With respect to the 
public advocacy groups' request to include only frivolous lawsuits and 
to exclude appeals of Commission decisions to the courts, the 
Department has determined that such an interpretation would be 
inconsistent with the reference in section 638(c)(1)(B), without 
qualifications, to litigation that delays commencement of full power 
operation of the advanced nuclear facility. Obviously, litigation that 
is not ``frivolous'' has the potential to delay full operation of a 
facility. Moreover, what constitutes a ``frivolous'' lawsuit can itself 
be a question involving substantial uncertainty and the Department 
believes it would be counter to the purposes of section 638 to import 
this uncertainty into the Standby Support Program.
    With respect to industry's specific requests, the Department has 
determined that most of them would likewise be inconsistent with the 
reference in section 638(c)(1)(B). Even if one assumes that the term 
``litigation'' is ambiguous, the Department has determined that as a 
matter of policy, industry's suggested expansions of the term 
litigation are inappropriate, except for including litigation in local 
courts. Industry requested that the Department expand the definition of 
``litigation'' to include any administrative litigation that occurs at 
the Commission related to the combined licensing process, and 
arbitration proceedings and orders. The Department reaffirms its 
previous determination that since section 638(c)(1)(A) covers the risk 
of pre-operational hearings and Commission review of ITAACs, the 
reference in section 638(c)(1)(B) to litigation should be interpreted 
to mean litigation outside the context of the Commission proceeding on 
the combined license. For the Department to adopt the industry's 
recommendation to interpret the term ``litigation'' even more broadly 
would effectively nullify these distinctions and undermine 
Congressional intent. The industry's recommended broad interpretation 
also likely would increase the risk that a covered event would occur 
and the insurance be triggered, thereby increasing (perhaps 
substantially) the premium for the risk insurance. The Department has 
determined that the better approach is to define each covered delay 
clearly and distinctly recognizing section 638's structure which 
delineates only certain delays that are eligible for cost recovery by 
categories, i.e., ITAAC-related delays, pre-operational hearings, and 
litigation.
    With respect to the exclusionary language for administrative 
litigation at the Commission that is in the definition of litigation, 
this language is intended to clearly distinguish between proceedings 
that are conducted before the Commission from litigation that is 
conducted before a court of law. The Department could remove the 
exclusion language from the definition of litigation, but the effect 
would be the same. That is, a sponsor could be covered for delays 
associated with litigation that occurs in a court of law outside the 
context of the Commission, e.g., in state, federal, tribal or local 
courts. This definition of litigation precludes coverage for any form 
of proceeding that occurs before the Commission, whether or not the 
exclusion is expressly stated in the definition. Accordingly, the 
Department has determined that it would be inappropriate and 
unnecessary to remove the exclusion for other administrative litigation 
at the Commission.
    Furthermore, the Department notes that by defining litigation to 
include only litigation in the courts, it is also excluding 
administrative litigation at federal or state agencies other than the 
Commission. As explained above, the Department interprets the Act to 
provide coverage for specific events. Even though proceedings at other 
federal or state agencies may be referred to as ``administrative 
litigation'' and may affect the sponsor's ability to construct or 
operate an advanced nuclear facility, the Department does not believe 
the language of the Act is properly interpreted to include those 
proceedings within the definition of litigation. Such an interpretation 
requested by the commenters would significantly expand the definition 
of litigation beyond the Act's objectives. As a consequence, it would 
also increase the cost of the risk insurance program. The Department 
notes, however, that such administrative proceedings may lead to court 
litigation and, as such, coverage for delays may be possible under the 
Standby Support Contract.
    Similarly, the Department has determined that it would be 
inappropriate to expand the term litigation to cover ``arbitration'' 
which is defined as ``a method of dispute resolution involving one or 
more neutral third parties who are usually agreed to by the disputing 
parties and whose decision is binding.'' Black's Law Dictionary Eighth 
Edition (2004). It is generally understood that such dispute resolution 
is outside of litigation and the court system. The Department's 
exclusion of arbitration from the definition of litigation is not 
intended to discourage parties from alternative forms of dispute 
resolution. Rather, the Department recognizes the value of arbitration, 
either to avoid litigation or as a mechanism to end litigation in court 
(in which case the arbitration would be encompassed by the litigation 
giving rise to the arbitration and thus, as a practical matter, would 
be covered), but believes that it is an overly broad view of the term 
litigation not within the coverage of section 638. The Department also 
notes that making the term more expansive would result in increased 
cost of the risk insurance and the program.
    Covered events--Pre-operational Hearings. In the interim final 
rule, the Department defined pre-operational hearing to mean ``a 
hearing held pursuant to the Commission's regulation in 10 CFR 
52.103.'' In the preamble of the interim final rule, the Department 
stated that it would be inappropriate and unnecessary to broaden the 
term to include all hearings taking place prior to operation or fuel 
load.
    The industry trade association expressed its view that Congress did 
not intend to limit this coverage to only the hearing provided for in 
10 CFR 52.103, but to any other hearings the Commission holds with 
respect to the part 52 licensing procedure and any Commission appeals 
or remands associated with the hearing. The industry trade association 
provided the example of hearings that may be requested, pursuant to 10 
CFR 52.97, in the event a sponsor makes modifications, additions, or 
deletions to the combined license. It further stated that such a 
limitation would be contrary to Congress's intent to provide protection 
from delays resulting from the untested licensing process, and to 
remove this regulatory uncertainty as a barrier to the development of 
new nuclear power plants.
    Based on further review, the Department has determined that it is 
appropriate to provide coverage for other types of Commission pre-
operational hearings that occur after issuance of a combined license 
that are directly related to the part 52 proceeding on the combined 
license and are so referenced in the regulation. For

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example, the Department notes that under part 52, the Commission 
addresses the situation where, prior to fuel load or initial 
operations, a party may petition to modify the terms or conditions of 
the combined license and in so doing may invoke procedures for a non-
mandatory hearing. Thus, an expansion of the definition of pre-
operational hearing to include such hearings is consistent with the 
language in section 638(c)(1). It is also consistent with the 
distinction in that section to provide coverage for two separate 
events: pre-operational hearings by the Commission and litigation. 
Based on these considerations, the Department has revised the 
definition for pre-operational hearing to state ``any hearing held by 
the Commission after issuance of the combined license that is provided 
for by part 52.''
    However, the Department has determined that the Act's language 
should not be interpreted so broadly as to categorically include in the 
definition of pre-operational hearings any and all Commission appeals 
or remands associated with the hearing. The Act defines a covered delay 
as ``the conduct of pre-operational hearings by the Commission.'' Like 
the term litigation, the term pre-operational hearing is subject to 
interpretation. The Department has determined that as a matter of 
policy, the industry's suggested expansion of this definition is 
inappropriate. The Department recognizes that the outcome of a 
Commission hearing may result in additional proceedings, such as 
appeals and remands, which may in turn cause a delay in construction or 
operations. A similar outcome is also possible in the context of 
litigation. Nevertheless, the Department does not believe it is 
appropriate or necessary to define the terms pre-operational hearings 
or litigation to necessarily include those additional proceedings. 
Rather, the Department believes that it is appropriate to determine 
through the claims administration process whether based on the facts of 
the case any ensuing proceedings are part of, or the same as, the pre-
operational hearing or litigation that is a covered event. The 
Department notes that such additional proceedings may fall within the 
category of an excluded event, e.g., events within the control of the 
sponsor.
    Full power operation. In the interim final rule, the Department 
defined ``full power operation'' to mean the point at which the sponsor 
first synchronizes the advanced nuclear facility to the electrical 
grid. This is typically at a power level in the range of 10 to 25 
percent.
    Industry commenters stated that definition fails to recognize 
adequately that full-scale commercial operation could be delayed by 
judicial or administrative proceedings even after a new plant has 
reached 10-25 percent power levels. Industry commenters argued that 
what they viewed as by narrowly defining the term, the Department is 
attempting to shift that risk back to sponsors and their investors and 
lenders, which they viewed as impermissible. The industry trade 
association recommended that the definition of ``full-power operation'' 
include two triggers: (1) Power output level at or near 100 percent of 
its nameplate capacity and (2) the completion and resolution of any 
pending or ongoing hearings or litigation.
    As explained in the interim final, the Department has determined 
that it has broad authority to interpret the terms in section 638, 
especially undefined terms such as ``full power operation.'' The 
Department concludes that the definition of full power operation in the 
interim final rule is appropriate, given that initial synchronization 
to the electric grid provides a clear, unambiguous point in time at 
which a new nuclear facility would have the ability to generate 
revenue. The Department views the industry's recommendation for power 
output at or near 100 percent as far too open-ended, given that a 
sponsor could make a business or operational decision to operate a 
facility at a level of less than 100 percent for a very long time or 
even permanently; there is no good reason why such a situation should 
result in long-term or permanent coverage for the reactor under the 
Program. The Department agrees that the sponsor should be eligible to 
submit claims for covered events prior to the resolution of pending or 
ongoing hearings or litigation, so long as full power operation has not 
commenced. Accordingly, the resolution of any pending or ongoing 
hearings or litigation is confined to those events that happen prior to 
first grid synchronization. Based on this analysis, the Department has 
determined that it would be inappropriate to modify the definition for 
full power operation.
    Incremental Costs. In the interim final rule, the Department 
specified that ``incremental costs'' mean the incremental difference 
between: (1) The fair market price of power purchased to meet the 
contractual supply agreements that would have been met by the advanced 
nuclear facility but for a covered delay; and (2) the contractual price 
of power from the advanced nuclear facility subject to the delay.
    The Department received two comments addressing this issue. The 
industry trade association commented that the concept of incremental 
costs is applicable to new nuclear power plants constructed as merchant 
power generators. However, it stated that a nuclear plant built by a 
regulated utility as part of its rate base may not have a contract to 
sell the output from the facility because the plant's output becomes 
part of general system supply. The trade association commented that if 
the nuclear plant start is delayed, a regulated utility may have to 
purchase power from the market to cover needs, or it may be able to 
supply that shortfall from general system supply. If it does purchase 
power, the provisions related to fair market price at section 
950.25(2)(i) would apply. However, if the utility does not purchase 
replacement power from the market, the commenter requested that the 
regulations provide an alternative means to calculate the fair market 
price for covering demand from within its system.
    The public advocacy group stated that the term ``fair market price 
of power'' needs further clarification within the regulations. 
Specifically, it requested that the Department make a distinction 
between ``merchant power plants,'' which are only selling into the 
``market,'' and power plants that are in a utility's ``rate base'' and 
selling to retail customers under state regulation.
    The Department has determined that it is neither necessary nor 
appropriate to create an alternative cost recovery mechanism for a 
sponsor that does not contract for replacement power from the market. 
Section 638 provided clear directions for mitigating a sponsor's delay 
cost for debt and contractual supply agreements. By allowing a sponsor 
to mitigate its cost of delay through one or both mechanisms, the 
Department believes that cost mitigation has been addressed for the 
scenarios highlighted by industry. In addition, the Department believes 
that the definition of ``fair market price'' stated in the interim 
final rule is sufficient and addresses potential gaming scenarios, 
given that the determination of the fair market price is the lower of 
two options: (A) The actual cost of the short-term supply contract for 
replacement power, purchased by the sponsor, during the period of 
delay, or (B) for each day of replacement power by its day-ahead 
weighted average index price in $/MWh at the hub geographically nearest 
to the advanced nuclear facility as posted on the previous day by the 
Intercontinental

[[Page 46311]]

Exchange (ICE) or an alternate electronic marketplace deemed reliable 
by the Department.
    Sponsor. In the interim final rule, the Department defined 
``sponsor'' to mean any person that has ``applied for'' a combined 
license and such application by the person has been docketed by the 
Commission. The Department believed that such a definition was 
necessary to ensure that an application was sufficient for docketing by 
the Commission.
    The nuclear trade association requested that the term sponsor be 
expanded to address situations in which several entities apply for a 
combined license. Specifically, it requested that the term ``sponsor'' 
be defined in section 950.3 of the regulation to mean

    ``a person or persons whose application for a combined license 
for an advanced nuclear facility has been docketed by the 
Commission. Multiple applicants involved in the same advanced 
nuclear facility are considered a single sponsor. Where multiple 
applicants are involved, the applicant for authority to operate the 
advanced nuclear facility is designated the lead sponsor and acts as 
the sponsor for purposes of these regulations. The lead sponsor is 
responsible to the Department for providing information, making or 
receiving notices, and administering claims on behalf of the 
applicants. Applicants having an ownership share in the advanced 
nuclear facility share in the benefits and obligations of the 
Standby Support Agreement in pro rata proportion to their NRC 
licensed ownership in the advanced nuclear facility.''

    The Department generally agrees with the goal of the comment that 
multiple sponsors should define their relationships and obligations. 
Nevertheless, the Department believes that it is inappropriate and 
unnecessary to specify by regulation such an arrangement, particularly 
since the term ``sponsor'' is expressly defined in section 638, and a 
sponsor or sponsors that have made such arrangements would qualify for 
coverage under the existing definition. The Department further notes 
that if such a definition were imposed by regulation, it would reduce 
the flexibility among potential sponsors. Accordingly, the Department 
has decided not to amend the definition for ``sponsor'' in section 
950.3.

Subpart B--Standby Support Contract Process

Sections 950.10--Conditional Agreement

    Section 638(b) authorizes the Secretary to enter into Standby 
Support Contracts with sponsors of advanced nuclear facilities. That 
subsection requires that sufficient funding be placed in designated 
Departmental accounts before a Standby Support Contract may be 
executed. In the interim final rule, the Department adopted a two-step 
process in which a Conditional Agreement can, for the qualifying 
sponsors, be converted into a Standby Support Contract at a later date, 
if the sponsor meets certain conditions and budgetary resources are 
provided. The Department noted that it has significant discretion to 
establish the procedures needed to manage the Standby Support Program, 
provided that they are consistent with section 638.
    Industry commenters generally agreed with the two-step approach. In 
contrast, the public advocacy group asserted it was unnecessary and 
inappropriate. The Department continues to believe that such a two-step 
implementation process is appropriate because it allows the Department 
and potential sponsors to manage the difficult timing issues inherent 
in the federal appropriations process and business concerns in planning 
and financing a multi-billion dollar advanced nuclear facility.
    In section 950.10(b)(1)-(5), the Department requires a sponsor to 
provide certain information to be eligible to enter into a Conditional 
Agreement. This includes an electronic copy of its complete combined 
license application docketed by the Commission, a summary schedule of 
the project, a detailed business plan, the sponsor's estimate of the 
amount and timing of payments for debt service and the estimated dollar 
amount to be allocated to the sponsor's covered costs.
    The nuclear trade association stated that it was inappropriate for 
the Department to request what it termed project specific background 
information, claiming that this information had little or no bearing on 
calculating the budget score under FCRA.
    The Department has determined that to ensure appropriate regulatory 
oversight of the Standby Support Program, it is necessary for the 
Department to request the information set forth in section 
950.10(b)(1)-(5). Insurers of large construction projects typically 
obtain such information to establish due diligence. Absent such 
oversight, the Department would not be adequately fulfilling its 
responsibilities for overseeing a program with such potentially large 
payouts, particularly its responsibility to facilitate the full power 
operation of advanced nuclear facilities and to protect taxpayer funds. 
In addition, this information, along with other information, will 
assist the Department in determining the necessary amount of funding 
for a potential Standby Support Contract with the sponsor. Lastly, the 
Department believes that this information will assist the Department in 
refining estimated cash flows payouts in the event a claim is submitted 
and in estimating the full power operation schedules.
National Environmental Policy Act (NEPA)
    In section 950.10(c), the Department set forth the bases upon which 
it will determine whether to enter into a Conditional Agreement. In the 
interim final rule, the Department noted that it will determine whether 
the Conditional Agreement may be issued consistent with applicable 
statutes or regulations, including the National Environmental Policy 
Act (NEPA). The Department anticipates that its environmental review 
under NEPA for the Conditional Agreement or Standby Support Contract 
would acknowledge or be based upon the NEPA review conducted by the 
Commission in relation to its review and approval of the sponsor's 
combined license application.
    The industry commented that it generally supported the Department's 
position about NEPA review in the interim final rule. Nevertheless, it 
expressed concern that the Commission's NEPA review is likely to occur 
during the Commission's review of the combined license application, and 
therefore it is unlikely that a Commission NEPA review would have 
occurred at the time of the Conditional Agreement. Accordingly, it 
urges the Department to make a determination that entering into a 
Conditional Agreement is not a major federal action and does not 
trigger NEPA.
    The Department believes that it is unlikely that a Commission NEPA 
review would have occurred at the time a Conditional Agreement is 
issued, and generally agrees that entering into a Conditional Agreement 
would not be a major federal action. The Department notes that prior to 
issuance of a combined license, which is a prerequisite for the 
Department to execute a Standby Support Contract, the Commission would 
have to complete its NEPA review of the proposed advanced nuclear 
facility.

Section 950.11 Terms and Conditions of the Conditional Agreement

    In the interim final rule, the Department stated that a sponsor 
should know its funding needs prior to execution of the Standby Support 
Contract, and included sections 950.11 (b), (c) and (d) in the 
regulations to reflect the need for specificity, transparency and 
accuracy on funding of Standby Support Contracts prior to

[[Page 46312]]

execution. In particular, section 950.11(b) required each Conditional 
Agreement to include a provision specifying the amount of coverage to 
be allocated under the Program Account and Grant Accounts.
    Industry commenters stated that the rule should explicitly indicate 
that a sponsor is not obligated to allocate coverage between the 
Program Account and Grant Account and may elect to allocate 100 percent 
of the coverage to either the Program Account or Grant Account.
    The Department believes that the interim final rule permitted such 
an allocation of coverage, but agrees with the commenter that it would 
be appropriate to expressly state this in the regulatory text. 
Accordingly, the Department today amends section 950.11(b) to state 
that ``a sponsor may elect to allocate 100 percent of the coverage to 
either the Program Account or the Grant Account.'' The Department notes 
that industry made an identical comment with respect to 950.11(c)(1).
950.11(c) Funding
    In section 950.11(c) of the interim final rule, the Department 
specified that each Conditional Agreement contain a provision that the 
Program Account or the Grant Account be funded in advance of the 
Department entering into a Standby Support Contract. After explaining 
the funding of these accounts under FCRA, the Department further 
explained in the preamble that it was within the Department's 
discretion to interpret section 638 as authorizing and providing that 
Standby Support Contracts are backed by the full faith and credit of 
the United States, even though section 638 did not include that precise 
phrase.
    The industry group requested that the regulatory text include an 
unequivocal statement that payment of costs covered under the Program 
Account is backed by the full faith and credit of the United States. It 
argued that such a statement in the regulation was necessary for 
financing purposes.
    The Department has modified section 950.11(c) to state that 
``Covered costs paid through the Program Account are backed by the full 
faith and credit of the United States.'' The Department notes that it 
is making this modification to facilitate financing of advanced nuclear 
facilities, even though such an express statement is not actually 
required.
    Also in section 950.11(c), the Department specifically addressed 
how the Standby Support Contracts will be funded. Among other things, 
that section states ``[u]nder no circumstances will the amount of the 
coverage for payments of principal and (sic) interest under a Standby 
Support Contract exceed 80 percent of the total of the financing 
guaranteed under that Contract.''
    The industry trade association objected to the provision 
prohibiting payments to exceed 80 percent of the total financing. It 
expressed its view that this provision reflects the Office of 
Management and Budget (OMB) guidance in OMB Circular A-129, but that 
this guidance is merely ``discretionary.'' The commenter further stated 
that the Department's inclusion of this provision reflected ``chronic 
confusion in the May 15 Rule over whether the Standby Support Program 
Account is delay insurance or a loan guarantee program.''
    The commenter is correct that this provision reflects the policy 
set forth in OMB Circular A-129, which provides guidance for all 
government programs covered by FCRA. The same policy that informed the 
80 percent threshold in OMB Circular A-129 also informs the 
Department's determination and judgment that this threshold is 
appropriate for the Standby Support Program. Moreover, as noted in the 
preamble to the interim final rule, the Department views the coverage 
provided through the Program Account to be a loan guarantee for 
purposes of FCRA and thus backed by the full faith and credit of the 
United States; and therefore governed by the terms of Circular A-129. 
Insofar as the Department uses this analysis to explain why it is 
appropriate and permissible to extend the full faith and credit of the 
United States even though those words are not used in section 638, the 
Department believes it should be consistent with other policies 
applicable to implementing loan guarantee authorities, where 
appropriate.
950.11(d) Reconciliation
    In section 950.11(d), the Department specified that ``Each 
Conditional Agreement shall include a provision that the sponsor shall 
provide no later than ninety (90) days prior to execution of a Standby 
Support Contract sufficient information for the Program Administrator 
to recalculate the loan costs and the incremental costs associated with 
the advanced nuclear facility, taking into account whether the 
sponsor's advanced nuclear facility is one of the initial two reactors 
or the subsequent four reactors.''
    The industry trade association objected to this provision, claiming 
that the concept of re-calculating the loan cost was inappropriate. It 
requested that the Department and OMB establish a procedure through 
which the loan cost and insurance premium are fixed at the time of the 
Conditional Agreement consistent with FCRA. The commenter further 
recommended that any increase in loan cost come from permanent 
indefinite budget authority.
    The Department has determined that cost reassessment is consistent 
with other programs that employ a two-step process for approval. The 
Department further notes that the government would be remiss in its 
duty to taxpayers if it did not reassess the costs, given that several 
years typically will elapse between signing a Conditional Agreement and 
a Standby Support Contract. Failure to make such a reassessment would 
not be consistent with FCRA and sound financial management practices. 
The Department further notes that the permanent indefinite budget 
authority is available only for reestimates of the loan cost covered by 
an existing Standby Support Contract, not for changes in cost prior to 
the execution of the Standby Support Contract. Once the Standby Support 
Contract has been executed, any re-estimation costs would be covered 
from the Treasury's permanent indefinite budget authority consistent 
with FCRA.
Limitations
    In section 950.11(e) of the interim final rule, the Department 
specified situations in which the Conditional Agreement should no 
longer remain in effect. Specifically, if the amount of appropriated 
funds is not sufficient to fund the statutorily required costs, the 
sponsor was given the option to either (1) not execute a Standby 
Support Contract or (2) provide additional contributions to fund the 
total amount of coverage in either the Program Account, Grant Account, 
or both accounts as specified in the Conditional Agreement. The 
Department believed that these provisions take into account the change 
in circumstances that may occur between the time of the Conditional 
Agreement and the Standby Support Contract. The provision also provided 
a sponsor the option either to enter into a contract or forego that 
opportunity.
    The industry trade association commented that in addition to the 
two options set forth in section 950.11(e), the sponsor should be given 
two more options: First, to hold open its right to execute a Standby 
Support Contract until such time as appropriated funds become 
available, either through the normal appropriations process or through 
reprogramming. Second, the trade association requested that a

[[Page 46313]]

sponsor should be entitled to elect a reduced level of coverage.
    The Department has determined that the first option would reduce 
flexibility in executing a Standby Support Contract and administering 
the Standby Support Program. The Department believes that it would be 
counter to the goal of facilitating full power operation of advanced 
nuclear facilities to permit a sponsor to hold a contract while waiting 
for funds that Congress may never appropriate, particularly since a 
different sponsor may be willing to pay the cost and initiate 
construction of an advanced nuclear facility.
    The Department has determined that the second option is consistent 
with the goal of facilitating full power operation, and that this goal 
can be achieved at a lower cost to the government. The Department has 
modified section 950.11(e)(2) to provide the sponsor with the option to 
elect a reduced level of coverage based on the amounts deposited in the 
Program Account and Grant Account. However, to protect the Department 
from any potential claims by a sponsor for the maximum amount of 
coverage available under section 638, the Department has also added 
language to this section to make it clear that the Department is not 
responsible or liable for any claims by the sponsor for additional 
coverage.
950.11(f) Termination of Conditional Agreement
    In section 950.11(f) of the interim final rule, the Department set 
forth five situations in which a Conditional Agreement remains in 
effect until a certain event. For instance, 950.11(f)(4) stated that 
event was when ``The Program Administrator has entered into Standby 
Support Contracts that cover three different reactor designs, and the 
Conditional Agreement is for an advanced nuclear facility of a 
different reactor design than those covered under existing Standby 
Support Contracts; and 950.11(f)(5) stated ``The Program Administrator 
has entered into six Standby Support Contracts.''
    The industry trade association stated that it generally had no 
objection to section 950.11(f), but that the situations under clauses 
(4) and (5) should accommodate the circumstances where an existing 
Standby Support Contract is terminated or cancelled. The commenter 
requested that these two provisions be modified with the phrase ``such 
Standby Support Contracts have expired in accordance with the stated 
term thereof pursuant to 10 CFR 950.13(e).''
    The Department has concluded that it would be inappropriate to add 
this language to the regulations as suggested by the commenters. 
Nevertheless, as discussed further in relation to section 950.12(d) 
there are limited circumstances under which the Department would 
consider re-executing a Standby Support Contract; in such 
circumstances, not more than two Standby Support Contracts may be re-
executed by the Program Administrator in situations involving 
abandonment and cancellation. In addition, in those limited 
circumstances and conditions, a sponsor or sponsors would be in a 
position to initiate the process under these regulations of executing a 
Conditional Agreement and becoming eligible for a Standby Support 
Contract.

Sections 950.12, 950.13 and 950.14--Standby Support Contract

    In the interim final rule, the Department noted that it is 
sufficient to include the critical contract terms in a regulation 
rather than provide a sample contract. The Department stated that a 
sample contract was not necessary, given that a sponsor could 
appropriately evaluate the potential contract's effect on risk 
allocation and financing during the pre-contract discussions set forth 
in sections 950.10 and 950.11.
    The industry trade association agreed with the Department that it 
is not necessary to provide a sample contract in the regulation; 
nevertheless, it requested that the Department expeditiously develop a 
standardized contract with formal stakeholder input. One utility 
favored including a contract in the regulation.
    The Department has determined that it is not necessary to include a 
Standby Support Contract in the regulation for the reasons set forth in 
the interim final rule. After completing the rulemaking, the Department 
intends to develop a Standby Support Contract form consistent with 10 
CFR part 950 and will consider whether to provide for public input.

Section 950.12--Standby Support Contract Conditions

Conditions Precedent
    In section 950.12(a) of the interim final rule, the Department set 
forth nine conditions precedent that a sponsor must fulfill to be 
eligible to enter into a Standby Support Contract. Among these 
conditions that a sponsor must fulfill are ``[d]ocumented coverage of 
required insurance for the project'' (950.12(a)(5)), and ``a detailed 
systems-level construction schedule that includes a schedule 
identifying projected dates of construction, testing and full power 
operation of the advanced nuclear facility and which the Department 
will evaluate and approve.'' (950.12(a)(8)).
    The industry trade association agreed that seven of the nine 
conditions precedent were appropriate. It nevertheless requested that 
the Department delete condition (5) related to documentation of 
required insurance coverage, claiming that such documentation is not 
relevant to Standby Support for covered delays. Similarly, the trade 
association requested that the Department delete condition (8) related 
to the systems-level construction schedule, claiming that this 
information is unnecessary to the Standby Support Program. It claimed 
that the Department's request for this information ``represents an 
unnecessary interjection of the Department into the construction 
process'' given that the construction schedule will be determined 
between sponsors, their contractors, and their lenders. The industry 
further requested that the Department should not evaluate or approve 
the construction schedule.
    The Department has determined that to protect taxpayer funds and to 
ensure an appropriate level of regulatory oversight for a program with 
such potentially large payouts, it is appropriate to obtain the 
insurance information set forth in condition (5) and the construction 
schedule set forth in condition (8). The Department notes that both 
types of information are readily available to a sponsor, given that the 
sponsor must have this information to obtain financing from a lender 
and a combined license from the Commission. With respect to the 
construction schedule, this information has direct relevance to the 
timing of possible claims, e.g., projected timing of full-power 
operation. Consequently, this information is necessary for the 
effective administration of the Standby Support Contract even if, and 
particularly because, it is subject to change. Nevertheless, the 
Department agrees that it is not necessary for the Department to 
approve the construction schedule and thus has deleted this term in 
section 950.12(a). Further, the Department has revised condition (5) to 
state ``[d]ocumented coverage of insurance required for the project by 
the Commission and lenders.''
Funding and Limitations
    In section 950.12(b) of the interim final rule, the Department 
specified that no later than thirty days prior to execution of the 
Standby Support Contract, funds in an amount sufficient to fully cover 
the loan costs or incremental costs as specified in the

[[Page 46314]]

Conditional Agreement shall be deposited in the Program Account or the 
Grant Account. The purpose of this provision is to ensure that the 
administration and funding of the Standby Support Program occurs in an 
efficient and orderly manner.
    The industry trade association objected to the requirement that the 
funds need to be deposited 30 days in advance of the contract's 
execution. It requested that a sponsor be able to meet this condition 
simultaneous with closing on the financing.
    The Department is required by section 638 to deposit the necessary 
funds in the Program Account or Grant Account before a contract is 
executed. While the Department appreciates the fact that a sponsor's 
financing arrangements may be complicated and a simultaneous closing 
would be desirable, the Department requires a certain amount of time 
prior to contract execution to ensure compliance with the requirements 
of the Act and coordination of the Department's administrative 
functions. Accordingly, the 30 day time period specified in the interim 
final rule is appropriate and necessary.
Cancellation by Abandonment
    In its comments, the trade industry recommended the Department 
allow for Standby Support Contracts to ``roll over'' as an added 
incentive to advanced nuclear facility construction. In section 950.12 
of the final rule, the Department has added a provision to address the 
situation where a sponsor may abandon a project and the Department may 
determine it is appropriate and consistent with the goal of the Standby 
Support Program to re-execute a contract. In accordance with this goal, 
any new contract under this provision would be deemed to replace a 
previously executed contract and therefore not exceed the mandate to 
facilitate the construction and operation of six new advanced nuclear 
reactor facilities.
    Specifically, section 950.12(d) provides for the re-execution of a 
Standby Support Contract under certain conditions of abandonment 
pursuant to section 950.13(f)(1). The Department anticipates that 
situations involving abandonment are likely to be rare or non-existent 
given that a sponsor will have expended millions of dollars and cleared 
most of the regulatory and litigation hurdles once it has executed a 
Standby Support Contract and commenced construction. The Department has 
included language indicating that cancellation of a Standby Support 
Contract as a result of a sponsor's abandonment permits the Program 
Administrator to re-execute not more than two new Standby Support 
Contracts, provided that the new contract is executed in accordance 
with the terms and conditions of part 950 and such contracts are deemed 
to be one of the subsequent four reactors under part 950. That is, any 
new contract under this provision would be deemed to replace one of the 
subsequent four reactors, and thus would be eligible for coverage in 
the amounts provided for such reactors.

Section 950.13--Standby Support Contract: General Provisions

    In section 950.13 of the interim final rule, the Department 
specified that each Standby Support Contract include provisions 
addressing basic contract terms, including the contract's purpose, 
covered facility, sponsor contribution, maximum aggregate compensation, 
the term, cancellation, termination by a sponsor, assignment, claims 
administration, and dispute resolution.
    The industry group stated that it had no objection to most of these 
provisions, but nevertheless provided comment on four of these 
provisions: the cancellation provisions in (f), termination in (g), 
assignment in (h), and re-estimation in (k).
Cancellation
    In section 950.13(f)(2), the Department set forth the bases upon 
which a Standby Support contract can be cancelled by stating that if a 
sponsor does not require continuing coverage under the contract that 
the sponsor may cancel the contract by giving written notice to the 
Program Administrator.
    Industry commenters stated that they had no objection to section 
950.13(f)(2); however, they commented that the Standby Support coverage 
should explicitly provide that in the event of cancellation by the 
Department, the sponsor, or as agreed by the parties, the Standby 
Support coverage should ``roll over'' both in terms of (1) making 
available the full 100 percent coverage to the first of the second four 
reactors in the event