Holtec Decommissioning International, LLC; Oyster Creek Nuclear Generating Station, 30247-30250 [2019-13527]

Agencies

• NUCLEAR REGULATORY COMMISSION

[Federal Register Volume 84, Number 123 (Wednesday, June 26, 2019)]
[Notices]
[Pages 30247-30250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13527]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 50-219; NRC-2018-0237]


Holtec Decommissioning International, LLC; Oyster Creek Nuclear 
Generating Station

AGENCY: Nuclear Regulatory Commission.

ACTION: Exemption; issuance.

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SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) is issuing 
exemptions in response to a November 30, 2018, request from Holtec 
Decommissioning International, LLC (HDI). The exemptions permit HDI to 
use the Oyster Creek Nuclear Generating Station (Oyster Creek) 
Decommissioning Trust Fund (DTF) for irradiated fuel management and 
site restoration activities based on the Oyster Creek Decommissioning 
Cost Estimate (DCE). The exemptions also permit HDI to make withdrawals 
from the DTF for irradiated fuel management and site restoration 
activities without prior notification of the NRC. By Order dated June 
20, 2019, the NRC approved the request for the direct transfer of the 
Oyster Creek Renewed Facility Operating License No. DPR-16 and the 
Oyster Creek Independent Spent Fuel Storage Installation (ISFSI) 
general license from Exelon Generating Company, LLC (Exelon) to HDI and 
Oyster Creek Environmental Protection, LLC (OCEP). These exemptions are 
being issued simultaneously with the license transfer Order and will be 
effective upon the NRC's issuance of a conforming license amendment 
reflecting HDI and OCEP as the licensees for Oyster Creek, following 
consummation of the license transfer transaction.

DATES: The approval of the exemption takes effect on June 26, 2019.

ADDRESSES: Please refer to Docket ID NRC-2018-0237 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-2018-0237. Address 
questions about NRC docket IDs in Regulations.gov to Jennifer Borges; 
telephone: 301-287-9127; email: [email protected]. For technical 
questions, contact the individual listed in the FOR FURTHER INFORMATION 
CONTACT section of this document.
     NRC's Agencywide Documents Access and Management System 
(ADAMS): You may obtain publicly-available documents online in the 
ADAMS Public Documents collection at https://www.nrc.gov/reading-rm/adams.html. To begin the search, select ``Begin Web-based ADAMS 
Search.'' For problems with ADAMS, please contact the NRC's Public 
Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or 
by email to [email protected]. The ADAMS accession number for each 
document referenced (if it is available in ADAMS) is provided the first 
time that it is mentioned in this document.
     NRC's PDR: You may examine and purchase copies of public 
documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 
Rockville Pike, Rockville, Maryland 20852.

FOR FURTHER INFORMATION CONTACT: Amy M. Snyder, Office of Nuclear 
Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, 
Washington, DC 20555-0001; telephone: 301-415-6822; email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    By letter dated February 14, 2018 (ADAMS Accession No. 
ML18045A084), Exelon, the owner of Oyster Creek, submitted to the NRC a 
certification in accordance with section 50.82(a)(1)(i) of title 10 of 
the Code of Federal Regulations (10 CFR), stating its determination to 
permanently cease operations at Oyster Creek no later than October 31, 
2018. By letter dated September 25, 2018 (ADAMS Accession No. 
ML18268A258), Exelon submitted to the NRC a certification in accordance 
with 10 CFR 50.82(a)(1)(ii), stating that Oyster Creek permanently 
ceased power operations on September 17, 2018, and that, as of 
September 25, 2018, all fuel had been permanently removed from the 
Oyster Creek reactor vessel. By letter dated December 30, 2014 (ADAMS 
Accession No. ML14365A067), Exelon submitted the Oyster Creek 
Irradiated Fuel Management Plan (IFMP) pursuant to 10 CFR 50.54(bb) and 
Preliminary Decommissioning Cost Estimate (DCE). The DCE was updated by 
letter dated March 30, 2016 (ADAMS Accession No. ML16090A067). By 
letter dated May 21, 2018 (ADAMS Accession No. ML18141A775), Exelon 
submitted a Post-Shutdown Decommissioning Activities Report (2018 
PSDAR) and site-specific DCE for Oyster Creek.
    On August 31, 2018, Exelon, Oyster Creek Environmental Protection, 
LLC (OCEP) and Holtec Decommissioning International, LLC (HDI) 
submitted a License Transfer Application (LTA) requesting NRC approval 
to transfer the Oyster Creek Renewed Facility Operating License No. 
DPR-16 and the general license for the Oyster Creek independent spent 
fuel storage installation (ISFSI). Following the license transfer, the 
new licensees would be OCEP and HDI, with OCEP as the licensed owner 
and HDI as the licensed operator. In accordance with 10 CFR 
50.82(a)(7), by letter dated September 28, 2018 (ADAMS Accession No. 
ML18275A116), HDI submitted a

[[Page 30248]]

``Notification of Revised Post-Shutdown Decommissioning Activities 
Report and Revised Site-Specific Decommissioning Cost Estimate for 
Oyster Creek Nuclear Generating Station,'' (revised PSDAR) to notify 
the NRC of changes to accelerate the schedule for the prompt 
decommissioning (i.e., DECON) of Oyster Creek and unrestricted release 
of all portions of the site (excluding the ISFSI) within eight (8) 
years after license transfer.

II. Request/Action

    By letter dated November 30, 2018 (ADAMS Accession No. 
ML18334A215), HDI submitted a request for exemptions from 10 CFR 
50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv). HDI submitted a revised 
site-specific DCE by letter dated September 28, 2018, as part of the 
revised PSDAR. A similar exemption request from Exelon was approved by 
the NRC for Oyster Creek by letter dated October 19, 2018 (ADAMS 
Accession No. ML18227A025).
    The requirements of 10 CFR 50.82(a)(8)(i)(A) restrict withdrawals 
from Decommissioning Trust Funds (DTF) to expenses for legitimate 
decommissioning activities consistent with the definition of 
decommission in 10 CFR 50.2. The definition of ``decommission'' in 10 
CFR 50.2 is: 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.
    This definition does not include activities associated with 
irradiated fuel management and site restoration activities. Similarly, 
the requirements of 10 CFR 50.75(h)(1)(iv) restrict the use of 
decommissioning trust fund disbursements (other than for ordinary and 
incidental expenses) to decommissioning expenses until final 
decommissioning has been completed. Therefore, partial exemptions from 
10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) are needed to allow 
HDI to use funds from Oyster Creek DTF for irradiated fuel management 
and site restoration activities in accordance with HDI's site-specific 
DCE.
    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 payments of ordinary administrative costs and other 
incidental expenses of the Trust, no disbursement may be made from the 
Trust until written notice of the intention to make a disbursement has 
been given to the NRC at least 30 working days in advance of the 
intended disbursement. Therefore, an exemption from 10 CFR 
50.75(h)(1)(iv) is also needed to allow HDI to use funds from the 
Oyster Creek DTF for irradiated fuel management and site restoration 
activities at Oyster Creek without prior NRC notification, similar to 
withdrawals for decommissioning activities made in accordance with 10 
CFR 50.82(a)(8).
    As part of its November 30, 2018, exemption request, HDI provided 
Table 1, ``Annual DECON Decommissioning Fund Cash Flow for Oyster Creek 
Nuclear Generating Station,'' that shows the annual DTF cash flow for 
Oyster Creek, while in DECON (immediate dismantling). Table 1 contains 
the projected withdrawals from the DTF needed to cover the estimated 
costs of radiological decommissioning, irradiated fuel management, and 
site restoration activities as projected on the day of the application. 
Subsequent to HDI's exemption request, Exelon provided the DTF balance 
as of December 31, 2018, for Oyster Creek in Attachment 21 to its April 
1, 2019, annual report on the status of decommissioning funding for 
Oyster Creek (ADAMS Accession No. ML19091A140). The NRC staff (staff) 
considered each of these submittals in its review of the exemption 
request.

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, (1) when 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; 
and (2) when any of the special circumstances listed in 10 CFR 
50.12(a)(2) are present. These special circumstances include, among 
other things:
    (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; and
    (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. The Exemptions Are Authorized by Law

    The proposed exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 
50.75(h)(1)(iv) would allow HDI to use the Oyster Creek DTF for 
irradiated fuel management and site restoration activities without 
prior notice to the NRC, in the same manner that withdrawals are made 
under 10 CFR 50.82(a)(8) for decommissioning activities. As stated in 
this notice, 10 CFR 50.12 allows the NRC to grant exemptions from the 
requirements of 10 CFR part 50 when the exemptions are authorized by 
law. The staff has determined that granting the licensee's proposed 
exemptions will not result in a violation of the Atomic Energy Act of 
1954, as amended, or the Commission's regulations. Therefore, the 
exemptions are authorized by law.

B. The Exemptions Present No Undue Risk to the Public Health and Safety

    The underlying purpose of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 
50.75(h)(1)(iv) is to provide reasonable assurance that adequate funds 
will be available for the radiological decommissioning of power 
reactors and license termination. Based on staff's review of HDI's 
revised site-specific DCE and the the staff's independent cash flow 
analysis provided as Attachment 1 to the NRC staff's Safety Evaluation 
for the associated LTA (ADAMS Accession No. ML19095A457), the NRC staff 
finds that the use of the Oyster Creek DTF for irradiated fuel 
management and site restoration activities at Oyster Creek will not 
adversely impact HDI's ability to terminate the Oyster Creek license 
(i.e., complete radiological decommissioning) as planned, consistent 
with the schedule and costs contained in the revised PSDAR. 
Furthermore, an exemption from 10 CFR 50.75(h)(1)(iv) to allow the 
licensee to make withdrawals from the DTF for irradiated fuel 
management and site restoration activities without prior written 
notification to the NRC will not affect the sufficiency of funds in the 
DTF to accomplish radiological decommissioning because such withdrawals 
are still constrained by the provisions of 10 CFR 50.82(a)(8)(i)(B)-(C) 
and are reviewable under the annual reporting requirements of 10 CFR 
50.82(a)(8)(v)-(vii).
    According to the application, no new accident precursors are 
created by using the DTF in the proposed manner. Thus, the probability 
of postulated accidents is not increased. Also, based on this notice, 
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. This exemption does not

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diminish the effectiveness of other regulations that ensure available 
funding for decommissioning, including 10 CFR 50.82(a)(6) which 
prohibits licensees from performing any decommissioning activities that 
could foreclose release of the site for possible unrestricted use, 
result in significant environmental impacts not previously reviewed, or 
result in there no longer being reasonable assurance that adequate 
funds will be available for decommissioning. Therefore, the requested 
exemptions will not present an undue risk to the public health and 
safety.

C. The Exemptions Are Consistent With the Common Defense and Security

    The requested exemptions would allow HDI to use funds from the 
Oyster Creek DTF for irradiated fuel management and site restoration 
activities at Oyster Creek. Irradiated fuel management under 10 CFR 
50.54(bb) is an integral part of the planned HDI decommissioning and 
license termination process and will not adversely affect HDI's ability 
to physically secure the site or protect special nuclear material. 
These exemptions to enable the use of the Oyster Creek DTF for 
irradiated fuel management and site restoration activities has no 
relation to security issues. Therefore, the common defense and security 
is not impacted by the requested exemptions.

D. Special Circumstances

    According to 10 CFR 50.12(a)(2), the NRC will not consider granting 
an exemption to its regulations unless special circumstances are 
present. 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 regulation.
    The underlying purpose of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 
50.75(h)(1)(iv), which restrict withdrawals from DTFs to expenses for 
radiological decommissioning activities, is to provide reasonable 
assurance that adequate funds will be available for radiological 
decommissioning of power reactors and license termination. Strict 
application of these requirements would prohibit the withdrawal of 
funds from the Oyster Creek DTF for activities other than radiological 
decommissioning activities at Oyster Creek, such as for irradiated fuel 
management and site restoration activities, until final radiological 
decommissioning at Oyster Creek has been completed.
    The Exelon April 1, 2019, annual report on the status of 
decommissioning funding for Oyster Creek reports a DTF balance of 
approximately $959.8 million as of December 31, 2018. After expected 
radiological decommissioning and irradiated fuel management costs to be 
paid by Exelon, the trust fund balance will be approximately $848.6 
million. The cash flow analysis in Table 1 of the November 30, 2018, 
application is based on a beginning DTF balance of $848 million as of 
January 1, 2019. HDI stated that the beginning DTF balance reflects the 
fund value post-closure of the asset sale and that the value includes 
deduction for estimated Exelon pre-closure costs. Furthermore, the 
application states that the 2019 HDI costs include estimated pre-
closure and post-closure costs. In the NRC staff's analysis provided in 
Attachment 1 of its Safety Evaluation for the LTA (ADAMS Accession No. 
ML19095A457), the staff used the lesser opening DTF balance of $848 
million as a conservative estimate that reflects less money available 
to cover radiological decommissioning, irradiated fuel management, and 
site restoration costs. The HDI analysis in the September 28, 2018 
revised PSDAR, projects the total radiological decommissioning cost of 
Oyster Creek to be approximately $618 million in 2018 dollars. The 
revised PSDAR estimated decommissioning costs are consistent with the 
estimated costs for radiological decommissioning, including ISFSI 
decommissioning costs, provided by HDI in the November 30, 2018, 
request for exemptions. The November 30, 2018, exemption request 
estimates the costs associated with irradiated fuel management at 
Oyster Creek to be $225 million in 2018 dollars and estimates the costs 
associated with site restoration to be $41 million in 2018 dollars. 
These estimates are also consistent with the projected costs provided 
in the September 28, 2018, revised PSDAR.
    The staff performed an independent cash flow analysis of the DTF 
over the proposed 17-year period leading up to license termination 
(assuming an annual real rate of return of 2 percent, as allowed by 10 
CFR 50.75(e)(1)(ii)), which includes all phases of the decommissioning 
project,\1\ and determined the projected earnings of the DTF. The staff 
confirmed that the current funds in the DTF and projected earnings 
provide reasonable assurance of adequate funding to complete all NRC 
required radiological decommissioning activities, and also to fund 
irradiated fuel management and site restoration activities. Therefore, 
the staff finds that HDI has provided reasonable assurance that 
adequate funds will be available for the radiological decommissioning 
of Oyster Creek, even with the disbursement of funds from the DTF for 
irradiated fuel management and site restoration activities. 
Accordingly, the staff concludes that application of the requirements 
of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv), that funds from 
the DTF only be used for radiological decommissioning activities and 
not for irradiated fuel management and site restoration activities, is 
not necessary to achieve the underlying purpose of the rule; thus, 
special circumstances are present supporting approval of the exemption 
request.
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    \1\ The 17-year period covers the 8-year decommissioning period 
as well as the period for irradiated fuel management and ISFSI 
decommissioning prior to license termination.
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    In its submittal, HDI also requested an exemption from the 
requirements of 10 CFR 50.75(h)(1)(iv) concerning prior written 
notification to the NRC of withdrawals from the DTF to fund activities 
other than radiological decommissioning. The underlying purpose of 
notifying the NRC prior to withdrawal of funds from the DTF 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 there being 
insufficient funds in the DTF to accomplish radiological 
decommissioning.
    By granting the exemptions to 10 CFR 50.75(h)(1)(iv) and 10 CFR 
50.82(a)(8)(i)(A), the staff considers that withdrawals consistent with 
the licensee's submittal dated November 30, 2018, are authorized. As 
stated previously, the staff has determined that there are sufficient 
funds in the DTF to complete radiological decommissioning activities as 
well as to conduct irradiated fuel management and site restoration 
activities consistent with the revised PSDAR, DCE, IFMP, and the 
November 30, 2018, exemption request. Pursuant to the requirements in 
10 CFR 50.82(a)(8)(v) and (vii), licensees are required to monitor and 
annually report to the NRC the status of the DTF and the licensee's 
funding for managing irradiated fuel. These reports provide the staff 
with awareness of, and the ability to take action on, any actual or 
potential funding deficiencies. Additionally, 10 CFR 50.82(a)(8)(vi) 
requires that the annual financial assurance status report must include 
additional financial assurance to cover the estimated cost of 
completion if the sum of the balance of any remaining

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decommissioning funds, plus earnings on such funds calculated at not 
greater than a 2-percent real rate of return, together with the amount 
provided by other financial assurance methods being relied upon, does 
not cover the estimated cost to complete the decommissioning. The 
requested exemptions would not allow the withdrawal of funds from the 
DTF 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 DTF to cover authorized expenses 
for irradiated fuel management and site restoration activities 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 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 DTF 
contains funds in excess of the estimated costs of radiological 
decommissioning and that these excess funds are needed for irradiated 
fuel management and site restoration activities. The NRC does not 
preclude the 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 and 
site restoration activities may be commingled in the DTF, provided that 
the licensee is able to identify and account for the radiological 
decommissioning funds separately from the funds set aside for 
irradiated fuel management and site restoration activities (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,'' dated October 2013 
(ADAMS Accession No. ML13144A840). To prevent access to those excess 
funds in the DTF because irradiated fuel management and site 
restoration activities are not associated with radiological 
decommissioning would create an unnecessary financial burden without 
any corresponding safety benefit.
    The adequacy of the DTF to cover the cost of activities associated 
with irradiated fuel management and site restoration, in addition to 
radiological decommissioning, is supported by the site-specific 
decommissioning cost estimate. If the licensee cannot use its DTF for 
irradiated fuel management and site restoration activities, it would 
need to obtain additional funding that would not be recoverable from 
the DTF, or the licensee would have to modify its decommissioning 
approach and methods. The staff concludes that either outcome would 
impose an unnecessary and undue burden significantly in excess of that 
contemplated when 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) 
were adopted.
    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 HDI to use a portion 
of the Oyster Creek DTF for irradiated fuel management and site 
restoration activities without prior NRC notification, and since 
compliance with the regulations would result in an undue hardship or 
other costs that are significantly in excess of those contemplated when 
the regulations were adopted, the special circumstances required by 10 
CFR 50.12(a)(2)(ii) and 10 CFR 50.12(a)(2)(iii) exist and support the 
approval of the requested exemptions.

E. Environmental Considerations

    In accordance with 10 CFR 51.31(a), the Commission has determined 
that the granting of the exemptions will not have a significant effect 
on the quality of the human environment (see Environmental Assessment 
and Finding of No Significant Impact published in the Federal Register 
on June 18, 2019 (84 FR 28357)).

IV. Conclusions

    In consideration of this notice, the staff finds that the proposed 
exemptions confirm the adequacy of funding in the Oyster Creek DTF, 
considering growth, to complete radiological decommissioning of the 
site and to terminate the license and also to cover estimated 
irradiated fuel management and site restoration activities. The NRC 
staff also finds that there is reasonable assurance that adequate funds 
are available in the NDT to complete all activities associated with 
radiological decommissioning, license termination, irradiated fuel 
management activities, and site restoration within the scope of this 
exemption request.
    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 HDI exemptions from the 
requirements of 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv) to 
allow use of a portion of the funds from the Oyster Creek DTF for 
irradiated fuel management and site restoration activities in 
accordance with the Oyster Creek revised PSDAR and DCE, dated September 
28, 2018. Additionally, the Commission hereby grants HDI an exemption 
from the requirement of 10 CFR 50.75(h)(1)(iv) to allow such 
withdrawals without prior NRC notification.
    These exemptions are effective upon the NRC's issuance of a 
conforming license amendment reflecting HDI and OCEP as the licensees 
for Oyster Creek, following NRC approval of the license transfer 
application and consummation of the transaction.

    Dated at Rockville, Maryland, this 20th day of June, 2019.

    For the Nuclear Regulatory Commission.
John W. Lubinski,
Director, Office of Nuclear Material Safety and Safeguards.
[FR Doc. 2019-13527 Filed 6-25-19; 8:45 am]
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