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Should NRC Spend Time and Money Simplifying Transition to Decommissioning?

Rod Adams's picture
President and CEO Adams Atomic Engines, Inc.
  • Member since 2006
  • 969 items added with 302,142 views
  • Jan 27, 2015
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nuclear regulation and power plant transition

In the past three years, five nuclear reactors in the United States have permanently ceased operations and are in the process of transitioning to a decommissioning status. There is not a well defined process for making that transition and for applying appropriate, risk-informed regulations. As a consequence of that situation, the owner of each plant must submit exemption requests to the NRC to be reviewed and approved before they can implement the cost saving measures of reducing certain staffing requirements or emergency planning commitments.

The owners of the plants that have stopped operating have asked the regulator and apparently their congressional representatives to develop a new rule making that will codify and streamline the process and reduce the number of specific license exemptions that need to be filed, reviewed and approved.

On December 3, 2014 the Nuclear Energy Institute, the trade organization that represents the interests of nuclear power plant vendors and plant operators, submitted a letter to the NRC expressing its support and interest in the rule making process. Here is the concluding paragraph of that letter.

In summary, the industry believes that an integrated rulemaking that incorporates the lessons learned from the current decommissioning transition activities and addresses the regulatory requirements associated with the transition from operating to decommissioned status would provide the most efficient and effective regulatory framework. Prior to commencing that rulemaking effort, the NRC should focus on the effective review of current decommissioning transition licensing actions.

January 9, 2015 Platts article titled New US NRC chairman says structure, safety, regulation among priorities for 2015 reported that the Commission approved a staff proposal to initiate the process of “reviewing NRC’s approach to regulation of power reactors undergoing decommissioning.” Stephen Burns, the Chairman of the Commission, indicated that he has heard from both Congress and the industry that they believe it might be the right time to take a hard look at the process.

I disagree. This is the wrong time to spend time and money making it simpler to decommission nuclear power plants. One way to encourage licensees to keep operating is to make sure that they understand that there are complexities and costs associated with shutting down the plant before it has reached the end of its effective operating life.

The NRC commissioners have repeatedly told Congress that their budgets are tight and that they must prioritize their work in order to accomplish the most important tasks in the most efficient manner possible given the staffing constraints under which they are working.

Despite the description of tight budgets, the annual fee for an operating license has increased from $4.5 million in 2010 to $5.3 million in 2014. The hourly rate for professional staff hours has increased from $257 in 2010 to $279 in 2014. I fully expect that those fees will increase again next year, largely as a result of the decrease in the number of plants that are assessed for the fee.

A nuclear plant licensee who has transitioned from an operating license to one that is a “possession-only” license is no longer part of the pool of clients that must pay $5.3 million per year. Instead, their rate is just $244,000, which about half of the price of a single professional staff hour full time equivalent (FTE).

When plants that are in the decommissioning process file license exemptions as they reach various stages of the transition, there is an identifiable customer that the NRC can bill for the staff hours that must be expended to review those exemption requests. Those individually accountable records can also be used in the NRC’s annual budget submission to justify a corresponding manpower resource request.

In contrast, the resources expended to perform the significant amount of work required for a more generalized rule making — especially one that will attract contentious hearings and most likely at least several different litigation processes — are no longer specific to an individual customer. They cannot be billed; they are charged to the general revenue account with the costs spread across all licensees. Those costs will increase the annual license fee and probably increase the professional staff hour rate.

To make sure that my informed guess on how the accounting would work was correct, I contacted the NRC. Here is the relevant part of an email conversation with David McIntyre, a Public Affairs Officer at the NRC.

McIntyre: The costs of any rulemaking are not “fee recoverable,” as in charged to specific licensees, the way inspections or license amendment reviews might be. They are built into the overall fee structure.

Adams: I need to make sure I understand.

The cost of the rule making is NOT charged to a specific licensee, but it IS charged to all license holders and applicants as part of their annual license fee or hourly staff hour cost fees? It is NOT paid out of the 10% of the NRC budget that is not recovered by license fees.

Please correct if I have it wrong.

McIntyre: Correct. That is my understanding.

That means that companies that continue to operate their nuclear plants would pay an increased annual license fee for work specifically aimed at simplifying the process of shutting down and tearing apart plants. Though they might benefit from simplified processes someday, most operating plants will not be shut down for at least two more decades. No one who understands finance should want to pay now for something that will provide no benefits for the next 20 or more years.

In the case of those nuclear plants that are still operated under the rate regulated, integrated monopoly utility model, the cost associated with producing a new decommissioning rule would be passed directly to ratepayers that will not be benefiting from the extra cost.

The entities that will benefit more immediately from the rule making are companies that have decided to shrink the financial pool from which regulatory costs are provided and have reduced their annual contributions by a factor of 25 to about half of an FTE.

If there is s staff hour rate increase to cover a rule simplifying the process of transitioning from an operating plant to one in decommissioning would be doubly unfair to applicants for new design certifications, construction and operating licenses or early site permits.

Not only would the effort expended to create useful rules for existing plants be inapplicable to plants with substantially different designs that might not decommission for another six or more decades, but the staff resources expended for the effort would be unavailable for high priority reviews like those that have already been requested for smaller or non-light water reactors.

Any available time that NRC staff has should be expended in reviewing ways to make its process of reviewing new applications and operating existing plants more effective, providing for safety at a lower, more predictable cost. It should not be spent making it easier for profit making companies to destroy assets that were initially purchased with ratepayer money to provide reliable, ultra low pollution, fossil-fuel free electricity.

PS – I hope this helps people to understand that I am not a “nuclear industry advocate.” I am a nuclear technology advocate who wants to see the use of nuclear energy grow. The carrying costs for decommissioned plant owners is very low on my priority list. I’d care more about them if their plants were still operating and providing a vital product.

The post Should NRC spend time and money simplifying transition to decommissioning? appeared first on Atomic Insights.

Photo Credit: NRC and Plant Decommissioning/shutterstock

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Bob Meinetz's picture
Bob Meinetz on Jan 27, 2015

Rod, the way you describe this process makes me wonder whether the end justifies the means.

It seems your goal is to try to keep more nuclear online by making the decommissioning process more expensive. While I would like to see nuclear continue to provide the nation with safe, carbon-free electricity as much as you, increasing regulatory costs, even at the end of plant lifetimes, will serve to discourage utilities from investing in new nuclear. What onerous rule might appear decades from now to hobble the value of their asset?

As a baseload alternative to  coal nuclear offers a clear health benefit to all of society, not just utility customers. The industry needs to make a concerted push toward disassociating the cost of doing business from licensing, and moving nuclear regulation under the general auspices of the EPA so costs are borne under that budget – like those for externalities of fossil fuels – instead of increasing the cost of an important source of clean energy when we need it most.

Joris van Dorp's picture
Joris van Dorp on Jan 27, 2015

From reading Rod’s blog in the past I gather that companies seem to be quite happy to prematurely decommission their nuclear power plants when (anti-nuclear) politics demands it, if only because it allows them to draw (profitable) revenue from the decommisioning fund they have had to put aside.

Essentially, the owners of nuclear power plants do not currently have much of an incentive to keep their plants running in the face of organised opposition to nuclear power. Streamlining the decommissioning process would make it even more attractive for nuclear plant owners to facilitate the political shutdown of their installations.

Rod Adams's picture
Rod Adams on Jan 29, 2015

Bob:

It is not my intent to add expense. What I was trying to point out was that it does not make sense to add additional costs for the operators that continue to run their plants in order to fund a lengthy, potentially resource intensive process to revise existing rules to streamline the transition to decommissioning.

I also suggested that putting such an effort high on the NRC’s priority list would not be the best use of available resources. It would be better for the country, I believe, if the NRC would prioritize efforts to smooth the transition from a great idea on digital documents to a complete and certified design.

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