Clarification of Decommissioning Funding Requirements

Federal RegisterJun 22, 1994

Ask Donna

What actually matters in this document.

Text

NUCLEAR REGULATORY COMMISSION

10 CFR Parts 30, 40, 70, and 72

RIN 3150-AE95

Clarification of Decommissioning Funding Requirements

AGENCY: Nuclear Regulatory Commission.

ACTION: Proposed rule.

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

SUMMARY: The Nuclear Regulatory Commission is proposing to amend its

regulations for nonreactor licensees on decommissioning financial

assurance, and expiration and termination of licenses. These amendments

are intended to clarify that financial assurance must be in place

during operations and updated when the licensee decides to cease

operations and begin decommissioning. These amendments would explicitly

describe the financial assurance certification requirements for

licensees during operation, the implementation and timing requirements

for licensees whose licenses have been in timely renewal since the

promulgation of the 1988 decommissioning funding rules, and for

licensees who cease operations without adequate funding arrangements in

place.

DATES: The comment period expires September 20, 1994. Comments received

after this date will be considered if it is practical to do so, but the

Commission is able to assure consideration only for comments received

on or before this date.

ADDRESSES: Submit comments to: The Secretary of the Commission, U.S.

Nuclear Regulatory Commission, Washington, DC 20555, Attention:

Docketing and Service Branch. Copies of comments received may be

examined at the NRC Public Document Room, 2120 L Street NW. (Lower

Level), Washington, DC.

FOR FURTHER INFORMATION CONTACT: Dr. Carl Feldman, U.S. Nuclear

Regulatory Commission, Washington, DC 20555, telephone (301) 415-6194.

SUPPLEMENTARY INFORMATION:

Background

In 1983, the Commission amended 10 CFR Parts 30, 40, and 70 to add

requirements addressing ``Expiration and Termination of Licenses'' (10

CFR 30.36, 40.42, and 70.38 (48 FR 32324; July 15,1983)). Similar

provisions were added to 10 CFR Part 72 in 1988 (10 CFR 72.54 (53 FR

24018)). These requirements set out the procedures to be followed by a

licensee who decides to decommission a facility and seek termination of

the applicable license. Under certain circumstances (which apply when a

Part 30, 40, 70, or 72 licensee has more than a modest amount of

radioactive contamination to remediate), the licensee is required to

submit a decommissioning plan that lays out the methods and measures

for decontamination of the property and equipment.

In 1988, the Commission promulgated rules addressing ``Financial

Assurance and Recordkeeping for Decommissioning'' (10 CFR 30.35, 40.36,

70.25 and 72.30 (53 FR 24018; June 27,1988)). These rules established a

graded structure for financial assurance that relates the amount of the

financial assurance required of a licensee to the possession limits in

his or her license. The graded structure is based on the reasonable

assumption that the kinds and quantities of radioactive materials

authorized in the license provide a reasonably good correlation to the

amount of contamination that has to be remediated. Further, Part 30,

40, or 70 applicants or licensees whose possession limits exceed or

would exceed a certain level, and all Part 72 licensees and license

applicants must provide an estimate of the actual expected

decommissioning cost as part of their application for a license or for

license renewal. The estimated costs are reviewed and approved by the

Commission. Before the license is issued or renewed, the applicant must

provide financial assurance in one or more of the forms required by the

rule (prepayment, surety, insurance or other guarantee, or external

sinking fund with a backup surety).

The same June 27, 1988, final rule also added a requirement that

decommissioning plans include an updated detailed cost estimate for

decommissioning, a comparison of that estimate with present funds set

aside for decommissioning, and a plan for assuring the availability of

adequate funds for the completion of decommissioning. The intent in

promulgating these rules was to ensure that adequate funds would be

available to cover the costs of decommissioning NRC licensed

facilities. At the time the decommissioning funding rules were

promulgated, it was not anticipated that a licensee would move to

decommissioning without having complied earlier with the financial

assurance requirements. Since that time a number of licensees who were

in timely renewal (i.e., licensees who had timely filed an application

for renewal of their licenses and whose licenses, therefore, continued

in effect while the renewal applications were being acted upon) when

the June 27, 1988, rule became effective have decided to terminate

their activities and begin decommissioning. Other licensees that only

provided certification for the minimum amounts of financial assurance

have also decided to terminate activities and begin decommissioning. In

both situations, insufficient funding was in place when the licensee

ceased operations and began decommissioning. These amendments are

intended to clarify that financial assurances must be in place and

updated when the licensee decides to cease operations and begin

decommissioning.

The amendments proposed here would amend those sections in 10 CFR

Parts 30, 40, 70, and 72 dealing with assurance of adequate funding for

decommissioning. These changes would more explicitly describe the

implementation and timing requirements for licensee financial assurance

instruments and clarify that:

(1) Licensees who have applied for license renewal must provide

financial assurance for decommissioning during the period that they

remain in timely renewal. This is addressed through the addition of

Paragraph (c)(4) to Secs. 30.35, 40.36, and 70.25. Licensees currently

in timely renewal would need to have the required financial assurance

instrument when this rule if adopted as a final rule, becomes

effective, 90 days after publication of the final rule in the Federal

time period for licensees currently in timely renewal to obtain the

required financial assurance instrument;

(2) Each decommissioning funding plan must include a certification

by the licensee that financial assurance for decommissioning has been

provided in the amount of the cost estimate. This is addressed through

a modification to Paragraph (e) of Secs. 30.35, 40.36, and 70.25;

(3) The decommissioning financial assurances provided by the

licensee in conjunction with a license renewal or issuance must remain

in effect during the period of decommissioning and must be increased or

may be decreased, as appropriate, within 90 days of the licensee notice

of termination of activities and request to terminate the license. This

is necessary to cover the detailed estimated decommissioning costs

developed as part of the decommissioning plan. This is addressed

through the addition of Paragraph (b)(2) to Secs. 30.36, 40.42, and

70.38, and Paragraph (a)(2) to Sec. 72.54;

(4) Any licensee who submits a notice of termination of activities

and request to terminate the license, and has not provided appropriate

financial assurance for decommissioning, shall do so within 90 days of

the notice. This is addressed through the addition of a new Paragraph

(b)(2)(i) to Secs. 30.36, 40.42, and 70.38, and Paragraph (a)(2)(i) to

Sec. 72.54. Any licensee who has already submitted a notice of

termination of activities and request to terminate the license would

need to have the required financial assurance instrument when this

rule, if adopted as a final rule, becomes effective, 90 days after

publication of the final rule in the Federal Register; and

(5) Licensees may reduce the amount of financial assurance

semiannually as decommissioning proceeds and radiological contamination

is reduced at the site, with the approval of the Commission. This is

addressed through the addition of a new Paragraph (b)(2)(ii) to

Secs. 30.36, 40.42, and 70.38, and Paragraph (a)(2)(ii) to Sec. 72.54.

The semiannual interval is proposed as a balance between the financial

incentive that this provision gives to licensees to proceed promptly

with the decommissioning work after approval of the decommissioning

plan and the burden imposed on both the licensee and staff in

implementing a reduction. Specific comments are solicited on the

interval proposed.

Environmental Impact: Categorical Exclusion

The NRC has determined that this proposed rule is the type of

action described in categorical exclusion 10 CFR 51.22(c)(2).

Therefore, neither an environmental impact statement nor an

environmental assessment has been prepared for this proposed rule.

Paperwork Reduction Act Statement

This proposed rule amends information collection requirements that

are subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501, et

seq.). This rule has been submitted to the Office of Management and

Budget for review and approval of the information collection

requirements.

The public reporting burden for this collection of information is

estimated to average 6 hours per response, including time for reviewing

instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collection of information. Send comments regarding this burden estimate

or any other aspect of this collection of information, including

suggestions for reducing the burden, to the Information and Records

Management Branch (T-6-F33), U.S. Nuclear Regulatory Commission,

Washington, DC 20555-0001, and to the Desk Officer, Office of

Information and Regulatory Affairs, NEOB-3019, (3150-0017, 3150-0020,

3150 0009, and 3150-0132), Office of Management and Budget, Washington,

DC 20503.

Regulatory Analysis

The Commission has prepared this proposed regulation to clarify its

decommissioning funding requirements for persons licensed under Parts

30, 40, 70, and 72. Although it does alter existing requirements,

regulatory analyses developed in support of prior decommissioning

regulations remain valid and appropriate for this rulemaking because

these analyses assumed that all licensees would submit a certification

of financial assurance to the NRC of a rule prescribed amount, or

licensee estimated and NRC approved amount, necessary to provide

adequate funds to decommission the licensed facility and that licensees

would have complied with the decommissioning funding requirements prior

to ceasing operations and commencing decommissioning. These prior

analyses, developed for the rules on expiration and termination

licenses and financial assurances for decommissioning, remain available

for inspection in the NRC Public Document Room, 2120 L Street, NW.

(Lower Level), Washington, DC. This discussion constitutes the

regulatory analysis for this proposed rule.

Regulatory Flexibility Certification

As required by the Regulatory Flexibility Act of 1980, 5 U.S.C.

605(b), the NRC carefully considered the effect on small entities in

developing the final rule on decommissioning funding and scaled the

requirements to reduce the impact on small entities to the extent

possible while adequately protecting health and safety. Therefore, it

is not expected to have an impact on licensees not already analyzed in

the regulatory flexibility analysis for the decommissioning funding

rule as published in the Federal Register on June 27, 1988 (53 FR

24018).

Accordingly, the Commission certifies that this proposed rule, if

adopted, will not have any additional significant economic impact upon

a substantial number of small entities.

Backfit Analysis

The NRC has determined that the backfit rule, 10 CFR 50.109, does

not apply to this rule, and therefore, a backfit analysis is not

required for this rule because these amendments do not involve any

provisions which would impose backfits as defined in 10 CFR

50.109(a)(1).

List of Subjects

10 CFR Part 30

Byproduct material, Criminal penalties, Government contracts,

Intergovernmental relations, Isotopes, Nuclear materials, Radiation

protection, Reporting and recordkeeping requirements.

10 CFR Part 40

Criminal penalties, Government contracts, Hazardous materials--

transportation, Nuclear materials, Reporting and recordkeeping

requirements, Source material, Uranium.

10 CFR Part 70

Criminal penalties, Hazardous materials--transportation, Material

control and accounting, Nuclear materials, Packaging and containers.

Radiation protection, Reporting and recordkeeping requirements,

Scientific equipment, Security measures, Special nuclear material.

10 CFR Part 72

Criminal penalties, Manpower training programs, Nuclear materials,

Occupational safety and health, Reporting and recordkeeping

requirements, Security measures, Spent fuel.

For the reasons set out in the preamble and under the authority of

the Atomic Energy Act of 1954, as amended, the Energy Reorganization

Act of 1974, as amended, and 5 U.S.C. 553, the NRC is proposing to

adopt the following amendments to 10 CFR Parts 30, 40, 70, and 72.

PART 30--RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF

BYPRODUCT MATERIAL

1. The authority citation for part 30 continues to read as follows:

Authority: Secs. 81, 82, 161, 182, 183, 186, 68 Stat. 935, 948,

953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42

U.S.C. 2111, 2112, 2201, 2232, 2233, 2236, 2282); secs. 201, as

amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C.

5841, 5842, 5846).

Section 30.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat.

2951 (42 U.S.C. 5851). Section 30.34(b) also issued under sec. 184,

68 Stat. 954, as amended (42 U.S.C. 2234). Section 30.61 also issued

under sec. 187, 68 Stat. 955 (42 U.S.C. 2237).

2. Section 30.35 is amended by revising paragraphs (b)(2), (c)(2),

(c)(3), and (e) and by adding a new paragraph (c)(4) to read as

follows:

Sec. 30.35 Financial assurance and recordkeeping for decommissioning.

* * * * *

(b) * * *

(2) Submit a certification that financial assurance for

decommissioning has been provided in the amount prescribed by paragraph

(d) of this section using one of the methods described in paragraph (f)

of this section. For an applicant, this certification may state that

the appropriate assurance will be obtained after the application has

been approved and the license issued but before the receipt of licensed

material. If the applicant defers execution of the financial instrument

until after the license has been issued, the executed original copy of

the financial instrument obtained to satisfy the requirements of

paragraph (f) of this section must be submitted to NRC before receipt

of licensed material. If the applicant does not defer execution of the

financial instrument, the applicant shall submit to NRC, as part of the

certification, an executed original copy of the financial instrument

obtained to satisfy the requirements of paragraph (f) of this section.

(2) Each holder of a specific license issued before July 27, 1990,

and of a type described in paragraph (a) of this section shall submit,

on or before July 27, 1990, a decommissioning funding plan as described

in paragraph (e) of this section or a certification of financial

assurance for decommissioning in an amount at least equal to $750,000

in accordance with the criteria set forth in this section. If the

licensee submits the certification of financial assurance rather than a

decommissioning funding plan, the licensee shall include a

decommissioning funding plan in any application for license renewal.

(3) Each holder of a specific license issued before July 27, 1990,

and of a type described in paragraph (b) of this section shall submit,

on or before July 27, 1990, a decommissioning funding plan as

described, in paragraph (e) of this section, or a certification of

financial assurance for decommissioning in accordance with the criteria

set forth in this section.

(4) Any licensee who has submitted an application before July 27,

1990, for renewal of license in accordance with Sec. 30.37 shall

provide financial assurance for decommissioning in accordance with

paragraphs (a) and (b) of this section.

* * * * *

(e) Each decommissioning funding plan must contain a cost estimate

for decommissioning and a description of the method of assuring funds

for decommissioning from paragraph (f) of this section, including means

for adjusting cost estimates and associated funding levels periodically

over the life of the facility. The decommissioning funding plan must

also contain a certification by the licensee that financial assurance

for decommissioning has been provided in the amount of the cost

estimate for decommissioning and an executed original copy of the

financial instrument obtained to satisfy the requirements of paragraph

(f) of this section.

* * * * *

3. Section 30.36 is amended by redesignating paragraph (b) as

(b)(1) and adding a new paragraph (b)(2) to read as follows:

Sec. 30.36 Expiration and termination of licenses.

* * * * *

(b) * * *

(2) Upon licensee notice of termination of activities and request

to terminate the license as required by paragraph (b)(1) of this

section, the licensee must maintain in effect all decommissioning

financial assurances established by the licensee pursuant to Sec. 30.35

in conjunction with a license issuance or renewal or as required by

this section. The amount of the financial assurance must be increased,

or may be decreased, as appropriate, within 90 days of the notice, to

cover the detailed cost estimate for decommissioning established

pursuant to paragraph (c)(2)(iii)(D) of this section.

(i) A licensee who has not provided financial assurance for

decommissioning at the time of submittal of the notice of termination

of activities and request to terminate the license as required by

paragraph (b)(1) of this section shall provide (by 90 days after

publication of the final rule) financial assurance for decommissioning

in an amount and form that complies with the requirements of Sec. 30.35

according to the possession limits in the license.

(ii) Following approval of the decommissioning plan, a licensee may

reduce the amount of the financial assurance semiannually, as

decommissioning proceeds and radiological contamination is reduced at

the site, with the approval of the Commission.

* * * * *

PART 40--DOMESTIC LICENSING OF SOURCE MATERIAL

4. The authority citation for Part 40 continues to read as follows:

Authority: Secs. 62, 63, 64, 65, 81, 161, 182, 183, 186, 68

Stat. 932, 933, 935, 948, 953, 954, 955, as amended, secs. 11e2, 83,

84, Pub. L. 95-604, 92 Stat. 3033, as amended, 3039, sec. 234, 83

Stat. 444, as amended (42 U.S.C. 2014(e)(2), 2092, 2093, 2094, 2095,

2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282); sec. 274, Pub. L.

86-373, 73 Stat. 688 (42 U.S.C. 2021); secs. 201, as amended, 202,

206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842,

5846); sec. 275, 92 Stat. 3021, as amended by Pub. L. 97-415, 96

Stat. 2067 (42 U.S.C. 2022).

Section 40.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat.

2951 (42 U.S.C. 5851). Section 40.31(g) also issued under sec. 122,

68 Stat. 939 (42 U.S.C. 2152). Section 40.46 also issued under sec.

184, 68 Stat. 954, as amended (42 U.S.C. 2234), Section 40.71 also

issued under sec. 187, 68 Stat. 955 (42 U.S.C. 2237).

5. Section 40.36 is amended by revising paragraphs (b)(2), (c)(2),

(c)(3), and (d) and by adding a new paragraph (c)(4) to read as

follows:

Sec. 40.36 Financial assurance and recordkeeping for decommissioning.

* * * * *

(b) * * *

(2) Submit a certification that financial assurance for

decommissioning has been provided in the amount of $150,000 using one

of the methods described in paragraph (e) of this section. For an

applicant, this certification may state that the appropriate assurance

will be obtained after the application has been approved and the

license issued but before the receipt of licensed material. If the

applicant defers execution of the financial instrument until after the

license has been issued, the executed original copy of the financial

instrument obtained to satisfy the requirements of paragraph (e) of

this section shall be submitted to NRC prior to receipt of licensed

material. If the applicant does not defer execution of the financial

instrument, the applicant shall submit to NRC, as part of the

certification, an executed original copy of the financial instrument

obtained to satisfy the requirements of paragraph (e) of this section.

(2) Each holder of a specific license issued before July 27, 1990,

and of a type described in paragraph (a) of this section shall submit,

on or before July 27, 1990, a decommissioning funding plan as described

in paragraph (d) of this section or a certification of financial

assurance for decommissioning in an amount at least equal to $750,000

in accordance with the criteria set forth in this section. If the

licensee submits the certification of financial assurance rather than a

decommissioning funding plan, the licensee shall include a

decommissioning funding plan in any application for license renewal.

(3) Each holder of a specific license issued before July 27, 1990,

and of a type described in paragraph (b) of this section shall submit,

on or before July 27, 1990, a decommissioning funding plan, as

described in paragraph (d) of this section, or a certification of

financial assurance for decommissioning in accordance with the criteria

set forth in this section.

(4) Any licensee who has submitted an application before July 27,

1990, for renewal of license in accordance with Sec. 40.43 shall

provide financial assurance for decommissioning in accordance with

paragraphs (a) and (b) of this section.

(d) Each decommissioning funding plan must contain a cost estimate

for decommissioning and a description of the method of assuring funds

for decommissioning from paragraph (e) of this section, including means

for adjusting cost estimates and associated funding levels periodically

over the life of the facility. The decommissioning funding plan shall

also contain a certification by the licensee that financial assurance

for decommissioning has been provided in the amount of the cost

estimate for decommissioning and an executed original copy of the

financial instrument obtained to satisfy the requirements of paragraph

(e) of this section.

* * * * *

6. Section 40.42 is amended by redesignating paragraph (b) as

(b)(1) and adding a new paragraph (b)(2) to read as follows:

Sec. 40.42 Expiration and termination of licenses.

* * * * *

(b) * * *

(2) Upon licensee notice of termination of activities and request

to terminate the license as required by paragraph (b)(1) of this

section, the licensee must maintain in effect all decommissioning

financial assurances established by the licensee pursuant to Sec. 40.36

in conjunction with a license issuance or renewal or as required by

this section. The amount of the financial assurance must be increased,

or may be decreased, as appropriate, within 90 days of the notice, to

cover the detailed cost estimate for decommissioning established

pursuant to paragraph (c)(2)(iii)(D) of this section.

(i) A licensee who has not provided financial assurance for

decommissioning at the time of submittal of the notice of termination

of activities and request to terminate the license as required by

paragraph (b)(1) of this section shall provide (by 90 days after

publication of the final rule) financial assurance for decommissioning

in an amount and form that complies with the requirements of Sec. 40.36

according to the possession limits in the license.

(ii) Following approval of the decommissioning plan, a licensee may

reduce the amount of the financial assurance semiannually, as

decommissioning proceeds and radiological contamination is reduced at

the site, with the approval of the Commission.

* * * * *

PART 70--DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL

7. The authority citation for Part 70 continues to read as follows:

Authority: Secs. 51, 53, 161, 182, 183, 68 Stat. 929, 930, 948,

953, 954, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C.

2071, 2073, 2201, 2232, 2233, 2282); Secs. 201, as amended, 202,

204, 206, 88 Stat. 1242, as amended, 1244, 1245, 1246 (42 U.S.C.

5841), 5942, 5845, 5846).

Sections 70.1(c) and 70.20(b) also issued under secs. 135, 141

Pub. L. 97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161).

Section 70.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat.

2951 (42 U.S.C. 5851). Section 70.21(g) also issued under sec. 122,

68 Stat. 939 (42 U.S.C. 2152). Section 70.31 also issued under sec.

57d, Pub. L. 93-377, 86 Stat. 475 (42 U.S.C. 2077). Sections 70.36

and 70.44 also issued under sec. 184, 68 Stat. 954, as amended (42

U.S.C. 2234). Section 70.61 also issued under secs. 186, 187, 68

Stat. 955 (42 U.S.C. 2236, 2237). Section 70.62 also issued under

sec. 106, 68 Stat. 939, as amended (42 U.S.C. 2138).

8. Section 70.25 is amended by revising paragraphs (b)(2), (c)(2),

(c)(3), and (e) and by adding a new paragraph (c)(4) to read as

follows:

Sec. 70.25 Financial assurance and recordkeeping for decommissioning.