Constellation submits plan on decommissioning funds

NRC expected to rule on plan by end of year

Wednesday, Sept. 2, 2009

The NRC uses a formula to determine how much money each reactor should have set aside to assure it is properly shut down and all radioactive materials are safely disposed of at the end of its operating license, NRC spokesman Neil Sheehan said.

On June 19, the commission cited 26 reactors at 18 nuclear power plants across the country for falling short of their decommissioning cost estimates. Four CENG reactors, including Unit 1 at Calvert Cliffs Nuclear Power Plant in Lusby, were among the 26 cited.

Staff from CENG and the NRC held a teleconference on June 29 to discuss the shortfalls, after which CENG agreed to provide an action plan to the NRC within 30 days.

The NRC requires that each plant submit a biennial update on its decommissioning funds. The most recent updates were submitted in March.

In the action plan, CENG President, CEO and Chief Nuclear Officer Henry Barron identified the weak economy as the reason for the insufficient funds. Market conditions during the fourth quarter of 2008 caused the four reactors' decommissioning trust funds to fall short of the NRC's minimum requirement for each, Barron said.

The four CENG reactors cited by the NRC are Calvert Cliffs Unit 1, Units 1 and 2 at Nine Mile Point Nuclear Station in Oswego, N.Y., and R.E. Ginna Nuclear Power Plant in Ontario, N.Y. Calvert Cliffs Unit 1 fell about $12.8 million short of its $376.4 million minimum, the second smallest national shortfall, according to an NRC spreadsheet. The smallest shortfall was Nine Mile Point Nuclear Station Unit 2, which was $504,551 short of its $571.8 million minimum. Nine Mile Point Nuclear Station Unit 1 was $45 million below its $511 million minimum and Ginna Nuclear Power Plant fell $28 million short of its $357 million minimum.

The CENG action plan calculations have the decommissioning funds for Calvert Cliffs Unit 1 and Nine Mile Point Nuclear Station Unit 2 exceeding their NRC minimums by the time the plants would need to be shut down, while Nine Mile High Nuclear Station Unit 1 and R.E. Ginna Nuclear Power Plant are projected to still fall short of NRC requirements.

"Our analysis shows that these funds are sufficient and will meet all regulatory requirements," Constellation spokeswoman Maureen Brown said of the decommissioning funds for the two Calvert Cliffs reactors. "Our current estimates are that would be no shortfall in these funds."

As for the two New York reactors still projected to come up short, Brown said Constellation will let the NRC know by Nov. 20 how it plans to address those funds.

While each reactor has a decommissioning trust fund, they can be invested by each plant through its own private advisors, Sheehan said.

However, the NRC expects the investments to be very "conservative in nature," have little risk and provide a minimum of 2 percent annual interest, Sheehan said.

A popular option for the cited plants has been safe storage, which instead of requiring the immediate dismantling of a reactor at the end of its operating license, it allows the plant to be put into storage for up to 60 years, during which time it is drained of radioactive material and monitored, Sheehan said.

This provides more time for the plants to accrue decommissioning funding. Brown said that because the two Calvert Cliffs funds are now projected as being sufficient, safe storage is not being considered for either reactor, but could be an option for Nine Mile High Nuclear Station Unit 1 and R.E. Ginna Nuclear Power Plant.

CENG also plans to let the NRC know whether financial guarantees from parent company Constellation Energy Group (CEG) will be needed by Dec. 31.

According to the action plan, NRC calculations assume annual $7.8 million contributions from CEG into Calvert Cliffs Unit 1's fund for the next eight years. CEG reported in the 2009 Decommissioning Funding Status Report that it contributed $18.7 million to the funds of both Calvert Cliffs reactors, and CENG plans to begin annually assessing the need for contributions from CEG to the two Calvert Cliffs funds in 2010 and expects some type of contribution will be needed through 2013.

The NRC plans to ask the companies that own the 26 plants for additional information before determining whether the action plans are sufficient by the end of the year, Sheehan said.

jnewman@somdnews.com