[Federal Register Volume 83, Number 248 (Friday, December 28, 2018)]
[Notices]
[Pages 67368-67372]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28203]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 50-219; NRC-2018-0288]


Exelon Generation Company, 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 letter dated March 29, 2018, as 
supplemented by a letter dated May 8, 2018, exemption request from 
Exelon Generation Company, LLC (Exelon or the licensee). The exemption 
permits Exelon to reduce the required level of primary offsite 
liability insurance from $450 million to $100 million and to eliminate 
the requirement to carry secondary financial protection for Oyster 
Creek Nuclear Generating Station.

DATES: The exemption was issued on December 19, 2018.

ADDRESSES: Please refer to Docket ID NRC-2018-0288 when contacting the

[[Page 67369]]

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:
    <bullet> Federal Rulemaking Web Site: Go to http://www.regulations.gov and search for Docket ID NRC-2018-0288. Address 
questions about Docket IDs in Regulations.gov to Krupskaya Castellon; 
telephone: 301-287-9221; email: <a href="/cdn-cgi/l/email-protection#8ec5fcfbfefde5eff7efa0cdeffdfaebe2e2e1e0cee0fceda0e9e1f8"><span class="__cf_email__" data-cfemail="165d646366657d776f773855776562737a7a79785678647538717960">[email protected]</span></a>. For 
technical questions, contact the individual listed in the FOR FURTHER 
INFORMATION CONTACT section of this document.
    <bullet> NRC's Agencywide Documents Access and Management System 
(ADAMS): You may obtain publicly-available documents online in the 
ADAMS Public Documents collection at http://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 <a href="/cdn-cgi/l/email-protection#fa8a9e88d4889f89958f88999fba948899d49d958c"><span class="__cf_email__" data-cfemail="59293d2b772b3c2a362c2b3a3c19372b3a773e362f">[email protected]</span></a>. 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.
    <bullet> 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: John G. Lamb, Office of Nuclear 
Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 
20555-0001; telephone: 301-415-3100; email: <a href="/cdn-cgi/l/email-protection#f7bd989f99d9bb969a95b7998594d9909881"><span class="__cf_email__" data-cfemail="501a3f383e7e1c313d32103e22337e373f26">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: The text of the exemption is attached.

    Dated at Rockville, Maryland, this 21st day of December 2018.

    For the Nuclear Regulatory Commission.
John G. Lamb,
Senior Project Manager, Special Projects and Process Branch, Division 
of Operating Reactor Licensing, Office of Nuclear Reactor Regulation.

Attachment--Exemption

NUCLEAR REGULATORY COMMISSION

Docket No. 50-219

Exelon Generation Company, LLC

Oyster Creek Nuclear Generating Station

Exemption

I. Background.

    Exelon Generation Company, LLC (Exelon, the licensee), is the 
holder of Renewed Facility Operating License No. DPR-16 for Oyster 
Creek Nuclear Generating Station (Oyster Creek). By letter dated 
February 14, 2018 (Agencywide Documents Access and Management System 
(ADAMS) Accession No. ML18045A084), Exelon submitted to the U.S. 
Nuclear Regulatory Commission (NRC) a certification in accordance 
with Sections 50.82(a)(1)(i) of Title 10 of the Code of Federal 
Regulations (10 CFR), indicating that it plans to cease permanent 
operation no later than October 31, 2018. Exelon permanently ceased 
operations at Oyster Creek on September 17, 2018. The facility 
consists of a permanently shutdown and defueled boiling-water 
reactor located in the town of Forked River, Ocean County, New 
Jersey.

II. Request/Action.

    By letter dated March 29, 2018 (ADAMS Accession No. 
ML18088A849), as supplemented by letter dated May 8, 2018 (ADAMS 
Accession No. ML18128A291), Exelon submitted a request for exemption 
from 10 CFR 140.11(a)(4), concerning offsite primary and secondary 
liability insurance. The exemption from 10 CFR 140.11(a)(4) would 
permit Exelon to reduce the required level of primary offsite 
liability insurance from $450 million to $100 million and to 
eliminate the requirement to carry secondary financial protection 
for Oyster Creek.
    The regulation at 10 CFR 140.11(a)(4) requires each licensee to 
have and maintain primary financial protection in an amount of $450 
million. In addition, the licensee is required to participate in an 
industry retrospective rating plan (secondary financial protection) 
that commits each licensee to pay into an insurance pool to be used 
for damages that may exceed primary insurance coverage. 
Participation in the industry retrospective rating plan will subject 
Exelon to deferred premium charges up to a maximum total deferred 
premium of $131,056,000 with respect to any nuclear incident at any 
operating nuclear power plant, and up to a maximum annual deferred 
premium of $20,496,000 per incident.
    The licensee states that the risk of an offsite radiological 
release is significantly lower at a nuclear power reactor that has 
permanently shut down and defueled, when compared to an operating 
power reactor. Similarly, the associated risk of offsite liability 
damages that would require insurance or indemnification is 
commensurately lower for permanently shut down and defueled plants. 
Therefore, Exelon is requesting an exemption from 10 CFR 
140.11(a)(4), to permit a reduction in primary offsite liability 
insurance and to withdraw from participation in the industry 
retrospective rating plan.

III. Discussion.

    Pursuant to 10 CFR 140.8, ``Specific exemptions,'' the 
Commission may, upon application of any interested person or upon 
its own initiative, grant such exemptions from the requirements of 
the regulations in 10 CFR part 140, when the exemptions are 
authorized by law and are otherwise in the public interest. The NRC 
staff has reviewed Exelon's request for an exemption from 10 CFR 
140.11(a)(4) and has concluded that the requested exemption is 
authorized by law and is otherwise in the public interest.
    The Price Anderson Act of 1957 (PAA) requires that nuclear power 
reactor licensees have insurance to compensate the public for 
damages arising from a nuclear incident. Specifically, the PAA 
requires licensees of facilities with a ``rated capacity of 100,000 
electrical kilowatts or more'' to maintain the maximum amount of 
primary offsite liability insurance commercially available 
(currently $450 million) and a specified amount of secondary 
insurance coverage (currently up to $131,056,000 per reactor). In 
the event of an accident causing offsite damages in excess of $450 
million, each licensee would be assessed a prorated share of the 
excess damages, up to $131,056,000 per reactor, for a total of 
approximately $13 billion per nuclear incident. The NRC's 
regulations at 10 CFR 140.11(a)(4) implement these PAA insurance 
requirements and set forth the amount of primary and secondary 
insurance each power reactor licensee must have.
    As noted above, the PAA requirements with respect to primary and 
secondary insurance, and the implementing regulations at 10 CFR 
140.11(a)(4), apply to licensees of facilities with a ``rated 
capacity of 100,000 electrical kilowatts or more.'' When the NRC 
issues a license amendment to a decommissioning licensee to reflect 
the defueled status of the facility, the license amendment includes 
removal of the rated capacity of the reactor from the license.
    Accordingly, a reactor that is undergoing decommissioning has no 
``rated capacity.'' Removal of the rated capacity from the facility 
of a decommissioning licensee, thus, allows the NRC to take the 
reactor licensee out of the category of reactor licensees that are 
required to maintain the maximum available insurance and to 
participate in the secondary retrospective insurance pool under the 
PAA, subject to a technical finding that lesser potential hazards 
exist at the facility after termination of operations.
    The financial protection limits of 10 CFR 140.11(a)(4) were 
established to require a licensee to maintain sufficient insurance, 
as specified under the PAA, to satisfy liability claims by members 
of the public for personal injury, property damage, and the legal 
cost associated with lawsuits, as the result of a nuclear accident 
at an operating reactor with a rated capacity of 100,000 kilowatts 
electric (or greater). Thus, the insurance levels established by 
this regulation, as required by the PAA, were associated with the 
risks and potential consequences of an accident at an operating 
reactor with a rated capacity of 100,000 kilowatts electric (or 
greater).
    The legal and associated technical basis for granting exemptions 
from 10 CFR part 140 is set forth in SECY-93-127, ``Financial 
Protection Required of Licensees of Large Nuclear Power Plants 
During Decommissioning,'' dated May 10, 1993 (ADAMS Accession No. 
ML12257A628). The legal analysis underlying SECY-93-127 concluded 
that, upon a technical finding that lesser potential hazards exist 
after termination of operations (and removal of the rated capacity), 
the Commission has the discretion under the PAA to reduce the amount 
of insurance required of a licensee undergoing decommissioning.
    As a technical matter, the fact that a reactor has permanently 
ceased operations is not

[[Page 67370]]

itself determinative as to whether a licensee may cease providing 
the offsite liability coverage required by the PAA and 10 CFR 
140.11(a)(4). In light of the presence of freshly discharged 
irradiated fuel in the spent fuel pool (SFP) at a recently shutdown 
reactor, the primary consideration is the risk of offsite 
radiological release from a zirconium fire. That risk generally 
remains for about 10-16 months of decay time for the fuel used in 
the last cycle of power operation. After that time, the offsite 
consequences of an offsite radiological release from a zirconium 
fire are negligible for shutdown reactors, but the SFP is still 
operational and an inventory of radioactive materials still exists 
onsite. Therefore, an evaluation of the potential for offsite damage 
is necessary to determine the appropriate level of offsite insurance 
post shutdown, in accordance with the Commission's discretionary 
authority under the PAA to establish an appropriate level of 
required financial protection for such shutdown facilities.
    The NRC staff has conducted an evaluation and concluded that, 
aside from the handling, storage, and transportation of spent fuel 
and radioactive materials for a permanently shut down and defueled 
reactor, no reasonably conceivable potential accident exists that 
could cause significant offsite damage. During normal power reactor 
operations, the forced flow of water through the reactor coolant 
system removes heat generated by the reactor. The reactor coolant 
system transfers this heat away from the reactor core by converting 
reactor feedwater to steam, which then flows to the main turbine 
generator to produce electricity. Most of the accident scenarios 
postulated for operating power reactors involve failures or 
malfunctions of systems that could affect the fuel in the reactor 
core, which in the most severe postulated accidents, would involve 
the release of large quantities of fission products. With the 
permanent cessation of reactor operations at Oyster Creek and the 
permanent removal of the fuel from the reactor core, such accidents 
are no longer possible. The reactor, reactor coolant system, and 
supporting systems no longer operate and have no function related to 
the storage of the irradiated fuel. Therefore, postulated accidents 
involving failure or malfunction of the reactor, reactor coolant 
system, or supporting systems are no longer applicable.
    During reactor decommissioning, the principal radiological risks 
are associated with the storage of spent fuel onsite. On a case-by-
case basis, licensees undergoing decommissioning have been granted 
permission to reduce the required amount of primary offsite 
liability insurance coverage from $450 million to $100 million and 
to withdraw from the secondary insurance pool. One of the technical 
criteria for granting the exemption is that the possibility of a 
design-basis event that could cause significant offsite damage has 
been eliminated.
    The NRC staff performed an evaluation of the design-basis 
accidents for Oyster Creek being permanently defueled as part of 
SECY-18-0062, ``Request by the Exelon Generation Company, LLC for 
Exemptions from Certain Emergency Planning Requirements for the 
Oyster Creek Nuclear Generating Station,'' dated May 31, 2018 (ADAMS 
Accession No. ML18030B340).
    The licensee has stated, and the NRC staff agrees, that while 
spent fuel remains in the SFP, the only postulated design-basis 
accident that would remain applicable to Oyster Creek in the 
permanently defueled condition that could contribute a significant 
dose will be a fuel handling accident (FHA) in the Reactor Building, 
where the SFP is located. For completeness, the NRC staff also 
evaluated the applicability of other design-basis accidents 
documented in the Oyster Creek Updated Final Safety Analysis Report 
(UFSAR) (ADAMS Accession No. ML15307A558), to ensure that these 
accidents would not have consequences that could potentially exceed 
the 10 CFR 50.67 dose limits and Regulatory Guide 1.183, 
``Alternative Radiological Source Terms for Evaluating Design Basis 
Accidents at Nuclear Power Reactors,'' dose acceptance criteria or 
approach the U.S. Environmental Protection Agency (EPA) early phase 
protective action guides (PAGs).
    In the Oyster Creek UFSAR, the licensee has determined that 
within 33 days after shutdown, the FHA doses would decrease to a 
level that would not warrant protective actions under the EPA early 
phase PAG framework, notwithstanding meeting the dose limit 
requirements under 10 CFR 50.67 and dose acceptance criteria under 
Regulatory Guide 1.183.
    The NRC staff notes that the doses from an FHA are dominated by 
the isotope Iodine-131. The date of cessation of power operations of 
Oyster Creek occurred on September 17, 2018. With 12 months of 
decay, the thyroid dose from an FHA would be negligible. After 12 
months of decay, the only isotope remaining in significant amounts, 
among those postulated to be released in a design-basis accident 
FHA, would be Krypton-85. Since Krypton-85 primarily decays by beta 
emission, the calculated skin dose from an FHA analysis would make 
an insignificant contribution to the total effective dose equivalent 
(TEDE), which is the parameter of interest in the determination of 
the EPA early phase PAGs for sheltering or evacuation. The NRC staff 
concludes that the dose consequence from an FHA for the permanently 
defueled Oyster Creek would not approach the EPA early phase PAGs. 
Therefore, any offsite consequence from a design-basis radiological 
release is unlikely, and a significant amount of offsite liability 
insurance coverage is not required.
    The only beyond design-basis event that has the potential to 
lead to a significant radiological release at a permanently shut 
down and defueled (decommissioning) reactor is a zirconium fire. The 
zirconium fire scenario is a postulated, but highly unlikely, 
accident scenario that involves the loss of water inventory from the 
SFP, resulting in a significant heatup of the spent fuel and 
culminating in substantial zirconium cladding oxidation and fuel 
damage. The probability of a zirconium fire scenario is related to 
the decay heat of the irradiated fuel stored in the SFP. Therefore, 
the risks from a zirconium fire scenario continue to decrease as a 
function of the time that Oyster Creek has been permanently shut 
down.
    In the analysis provided in Attachment 2, ``Oyster Creek Nuclear 
Generating Station Zirconium Fire Analysis for Drained Spent Fuel 
Pool (Calculation C-1302-226-E310-457),'' to the application, as 
supplemented by letters dated March 8, 2018, and March 19, 2018 
(ADAMS Accession Nos. ML18067A087 and ML18078A146, respectively), 
the licensee compared the conditions for the hottest fuel assembly 
stored in the SFP to a criterion proposed in SECY[dash]99[dash]168, 
``Improving Decommissioning Regulations for Nuclear Power Plants,'' 
dated June 30, 1999 (ADAMS Accession No. ML12265A598), applicable to 
offsite emergency response for the unit in the decommissioning 
process. This criterion considers the time for the hottest assembly 
to heat up from 30 degrees Celsius ([deg]C) to 900 [deg]C 
adiabatically. If the heatup time is greater than 10 hours, then 
offsite emergency preplanning involving the plant is not necessary. 
Based on the limiting fuel assembly for decay heat and adiabatic 
heatup analysis presented in Attachment 2, at 12 months (365 days) 
after permanent cessation of power operations (i.e., 12 months decay 
time), the time for the hottest fuel assembly to reach 900 [deg]C is 
10 hours after the assemblies have been uncovered. As stated in 
NUREG-1738, ``Technical Study of Spent Fuel Pool Accident Risk at 
Decommissioning Nuclear Power Plants,'' February 2001 (ADAMS 
Accession No. ML010430066), 900 [deg]C is an acceptable temperature 
to use for assessing onset of fission product release under 
transient conditions (to establish the critical decay time for 
determining availability of 10 hours for deployment of mitigation 
equipment and, if necessary, for offsite agencies to take 
appropriate action to protect the health and safety of the public, 
if fuel and cladding oxidation occurs in air).
    The NRC staff reviewed the calculation to verify that important 
physical properties of materials were within acceptable ranges and 
the results were accurate. The NRC staff determined that physical 
properties were appropriate. Therefore, the NRC staff found that 
after 12 months (365 days), more than 10 hours would be available 
before a significant offsite release could begin. The NRC staff 
concluded that the adiabatic heatup calculation provided an 
acceptable method for determining the minimum time available for 
deployment of mitigation equipment and, if necessary, implementing 
measures under a comprehensive general emergency plan.
    In this regard, one technical criterion for relieving 
decommissioning reactor licensees from the insurance obligations 
applicable to an operating reactor is a finding that the heat 
generated by the SFP has decayed to the point where the possibility 
of a zirconium fire is highly unlikely.
    This was addressed in SECY-93-127, where the NRC staff concluded 
that there was a low likelihood and reduced short-term public health 
consequences of a zirconium fire once a decommissioning plant's 
spent fuel has sufficiently decayed. In its Staff Requirements 
Memorandum, ``Financial Protection Required of Licensees of Large 
Nuclear Power Plants during Decommissioning,'' dated July 13, 1993 
(ADAMS Accession No. ML003760936), the

[[Page 67371]]

Commission approved a policy that authorized, through the exemption 
process, withdrawal from participation in the secondary insurance 
layer and a reduction in commercial liability insurance coverage to 
$100 million, when a licensee is able to demonstrate that the spent 
fuel could be air-cooled if the SFP was drained of water.
    The NRC staff has used this technical criterion to grant similar 
exemptions to other decommissioning reactors (e.g., Maine Yankee 
Atomic Power Station, published in the Federal Register on January 
19, 1999 (64 FR 2920); Zion Nuclear Power Station, published in the 
Federal Register on December 28, 1999 (64 FR 72700); Kewaunee Power 
Station, published in the Federal Register on March 24, 2015 (80 FR 
15638); and Crystal River Unit 3 Nuclear Generation Plant, published 
in the Federal Register on May 6, 2015 (80 FR 26100)).
    Additional discussions of other decommissioning reactor 
licensees that have received exemptions to reduce their primary 
insurance level to $100 million are provided in 
SECY[dash]96[dash]256, ``Changes to the Financial Protection 
Requirements for Permanently Shutdown Nuclear Power Reactors, 10 CFR 
50.54(w) and 10 CFR 140.11,'' dated December 17, 1996 (ADAMS 
Accession No. ML15062A483). These prior exemptions were based on the 
licensee demonstrating that the SFP could be air-cooled, consistent 
with the technical criterion discussed above.
    The NRC staff has evaluated the issue of zirconium fires in SFPs 
and presented an independent evaluation of a SFP subject to a severe 
earthquake in NUREG-2161, ``Consequence Study of a Beyond-Design-
Basis Earthquake Affecting the Spent Fuel Pool for a U.S. Mark I 
Boiling Water Reactor,'' September 2014 (ADAMS Accession No. 
ML14255A365). This evaluation concluded that, for a representative 
boiling-water reactor, fuel in a dispersed high-density 
configuration would be adequately cooled by natural circulation air 
flow within several months after discharge from a reactor if the 
pool was drained of water.
    By letters dated August 22 and December 6, 2017 (ADAMS Accession 
Nos. ML17234A082 and ML17340A708, respectively), Exelon confirmed 
that the plant design and fuel storage configuration considered in 
NUREG-2161 were consistent with the Oyster Creek plant design and 
fuel storage configurations to be used in the decommissioning of 
Oyster Creek. The NRC staff independently confirmed that the Oyster 
Creek fuel assembly decay levels are also consistent with the spent 
fuel considered in NUREG-2161. Thus, the NRC staff has determined 
that after 12 months (365 days) decay, the fuel stored in the Oyster 
Creek SFP will be able to adequately be cooled by air in the 
unlikely event of pool drainage.
    In SECY-00-0145, ``Integrated Rulemaking Plan for Nuclear Power 
Plant Decommissioning,'' dated June 28, 2000, and SECY-01-0100, 
``Policy Issues Related to Safeguards, Insurance, and Emergency 
Preparedness Regulations at Decommissioning Nuclear Power Plants 
Storing Fuel in Spent Fuel Pools,'' dated June 4, 2001 (ADAMS 
Accession Nos. ML003721626 and ML011450420, respectively), the NRC 
staff discussed additional information concerning SFP zirconium fire 
risks at decommissioning reactors and associated implications for 
offsite insurance. Analyzing when the spent fuel stored in the SFP 
is capable of adequate air-cooling is one measure that demonstrates 
when the probability of a zirconium fire would be exceedingly low.
    The licensee's analyses referenced in its exemption request 
demonstrate that under conditions where the SFP water inventory has 
drained and only air cooling of the stored irradiated fuel is 
available, there is reasonable assurance that 12 months (365 days) 
after the certification of permanent removal of fuel from the 
reactor vessel that the Oyster Creek spent fuel will remain at 
temperatures far below those associated with a significant 
radiological release.
    In addition, the licensee performed adiabatic heatup analyses, 
in which a complete drainage of the SFP is combined with 
rearrangement of spent fuel rack geometry and/or the addition of 
rubble to the SFP; this type of analysis postulates that decay heat 
transfer from the spent fuel via conduction, convection, or 
radiation would be impeded. The licensee's adiabatic heatup analyses 
demonstrate that 12 months (365 days) after the certification of 
permanent removal of the fuel from the reactor vessel, there would 
be at least 10 hours after the loss of all means of cooling (both 
air and/or water), before the spent fuel cladding would reach a 
temperature where the potential for a significant offsite 
radiological release could occur.
    In Exelon's letter dated March 19, 2018 (ADAMS Accession No. 
ML18088A849), the licensee furnished the following information: 
``Because of the length of time it would take for the adiabatic 
heatup to occur, there is ample time to respond (>=10 hours) to any 
drain down event that might cause such an occurrence by restoring 
cooling or makeup, or providing spray. As a result, the likelihood 
that such a scenario would progress to a zirconium fire is not 
deemed credible.''
    In the NRC staff's evaluation contained in SECY-18-0062, 
``Request by the Exelon Generation Company, LLC for Exemptions from 
Certain Emergency Planning Requirements for the Oyster Creek Nuclear 
Generating Station,'' dated May 31, 2018 (ADAMS Accession No. 
ML18030B340), the NRC staff assessed the Exelon accident analyses 
associated with the radiological risks from a zirconium fire at a 
permanently shut down and defueled Oyster Creek site. For the very 
unlikely beyond design-basis accident scenario where the SFP coolant 
inventory is lost in such a manner that all methods of heat removal 
from the spent fuel are no longer available, the NRC staff found 
there will be a minimum of 10 hours from the initiation of the 
accident until the cladding reaches a temperature where offsite 
radiological release might occur. The NRC staff finds that 10 hours 
is sufficient time to support deployment of mitigation equipment, 
consistent with plant conditions, to prevent the zirconium cladding 
from reaching a point of rapid oxidation.
    The NRC staff has determined that the licensee's proposed 
reduction in primary offsite liability coverage to a level of $100 
million, and the licensee's proposed withdrawal from participation 
in the secondary insurance pool for offsite financial protection, 
are consistent with the policy established in SECY-93-127 and 
subsequent insurance considerations resulting from zirconium fire 
risks, as discussed in SECY-00-0145 and SECY-01-0100. The NRC has 
previously determined in SECY-00-0145 that the minimum offsite 
financial protection requirement may be reduced to $100 million and 
that secondary insurance is not required, once it is determined that 
the spent fuel in the SFP is no longer thermal-hydraulically capable 
of sustaining a zirconium fire based on a plant-specific analysis. 
In addition, the NRC staff notes that similar exemptions from these 
insurance requirements, have been granted to other permanently 
shutdown and defueled power reactors, upon satisfactory 
demonstration that zirconium fire risk from the irradiated fuel 
stored in the SFP is of negligible concern.

A. The Exemption is Authorized by Law

    The PAA, and its implementing regulations in 10 CFR 
140.11(a)(4), require licensees of nuclear reactors that have a 
rated capacity of 100,000 kilowatts electric or more to have and 
maintain $450 million in primary financial protection and to 
participate in a secondary retrospective insurance pool. In 
accordance with 10 CFR 140.8, the Commission may grant exemptions 
from the regulations in 10 CFR part 140, as the Commission 
determines are authorized by law. The legal and associated technical 
basis for granting exemptions from 10 CFR part 140 are set forth in 
SECY-93-127. The legal analysis underlying SECY-93-127 concluded 
that, upon a technical finding that lesser potential hazards exist 
after termination of operations, the Commission has the discretion 
under the Price-Anderson Act to reduce the amount of insurance 
required of a licensee undergoing decommissioning.
    Based on its review of Exelon's exemption request, the NRC staff 
concludes that the technical criteria for relieving Exelon from its 
existing primary and secondary insurance obligations have been met. 
As explained above, the NRC staff has concluded that no reasonably 
conceivable design-basis accident exists that could cause an offsite 
release greater than the EPA PAGs, and therefore, that any offsite 
consequence from a design-basis radiological release is unlikely, 
and the need for a significant amount of offsite liability insurance 
coverage is unwarranted. Additionally, the NRC staff determined 
that, after 12 months (365 days) decay, the fuel stored in the 
Oyster Creek SFP will be able to adequately be cooled by air in the 
unlikely event of pool drainage. Moreover, in the very unlikely 
beyond design-basis accident scenario where the SFP coolant 
inventory is lost in such a manner that all methods of heat removal 
from the spent fuel are no longer available, the NRC staff has 
determined that 10 hours would be available and is sufficient time 
to support deployment of mitigation equipment, consistent with plant 
conditions, to prevent the zirconium cladding from reaching a point 
of rapid oxidation. Thus, the NRC staff concludes that the fuel 
stored in

[[Page 67372]]

the Oyster Creek SFP will have decayed sufficiently by the requested 
effective exemption date of 12 months (365 days) after the 
certification that the fuel has been permanently removed from the 
reactor vessel, to support a reduction in the required insurance 
consistent with SECY-00-0145.
    The NRC staff has determined that granting of the licensee's 
proposed exemption will not result in a violation of the Atomic 
Energy Act of 1954, Section 170, or other laws, as amended, which 
require licensees to maintain adequate financial protection. 
Accordingly, consistent with the legal standard presented in SECY-
93-127, under which decommissioning reactor licensees may be 
relieved of the requirements to carry the maximum amount of 
insurance available and to participate in the secondary 
retrospective premium pool where there is sufficient technical 
justification, the NRC staff concludes that the requested exemption 
is authorized by law.

B. The Exemption is Otherwise in the Public Interest

    The financial protection limits of 10 CFR 140.11 were 
established to require licensees to maintain sufficient offsite 
liability insurance to ensure adequate funding for offsite liability 
claims, following an accident at an operating reactor. However, the 
regulation does not consider the reduced potential for and 
consequence of nuclear incidents at permanently shutdown and 
decommissioning reactors.
    The basis provided in SECY-93-127, SECY-00-0145, and SECY-01-
0100 allows licensees of decommissioning plants to reduce their 
primary offsite liability insurance and to withdraw from 
participation in the retrospective rating pool for deferred premium 
charges. As discussed in these documents, once the zirconium fire 
concern is determined to be negligible, possible accident scenario 
risks at permanently shutdown and defueled reactors are greatly 
reduced, when compared to the risks at operating reactors, and the 
associated potential for offsite financial liabilities from an 
accident are commensurately less. The licensee has analyzed and the 
NRC staff has confirmed that the risks of accidents that could 
result in an offsite radiological risk are minimal, thereby 
justifying the proposed reductions in offsite primary liability 
insurance and withdrawal from participation in the secondary 
retrospective rating pool for deferred premium charges.
    Additionally, participation in the secondary retrospective 
rating pool could potentially have adverse consequences on the safe 
and timely completion of decommissioning. If a nuclear incident 
sufficient to trigger the secondary insurance layer occurred at 
another nuclear power plant, the licensee could incur financial 
liability of up to $131,056,000. However, because Oyster Creek is 
permanently shut down, it cannot produce revenue from electricity 
generation sales to cover such a liability. Therefore, such 
liability if subsequently incurred, could significantly affect the 
ability of the facility to conduct and complete timely radiological 
decontamination and decommissioning activities. In addition, as 
SECY-93-127 concluded, the shared financial risk exposure to Exelon 
is greatly disproportionate to the radiological risk posed by Oyster 
Creek, when compared to operating reactors. The reduced overall risk 
to the public at decommissioning power plants does not warrant that 
Exelon be required to carry full operating reactor insurance 
coverage, after the requisite spent fuel cooling period has elapsed 
following final reactor shutdown. The licensee's proposed financial 
protection limits will maintain a level of liability insurance 
coverage commensurate with the risk to the public. These changes are 
consistent with previous NRC policy as discussed in SECY-00-0145, 
and exemptions approved for other decommissioning reactors. Thus, 
the underlying purpose of the regulations will not be adversely 
affected by the reductions in insurance coverage. Accordingly, an 
exemption from participation in the secondary insurance pool and a 
reduction in the primary insurance to $100 million, a value more in 
line with the potential consequences of accidents, would be in the 
public interest in that this assures there will be adequate funds to 
address any of those consequences and helps to assure the safe and 
timely decommissioning of the reactor.
    Therefore, the NRC staff has concluded that an exemption from 10 
CFR 140.11(a)(4), which would permit Exelon to lower the Oyster 
Creek primary insurance levels and to withdraw from the secondary 
retrospective premium pool at the requested effective date of 12 
months (365 days) after the certification of permanent fuel removal 
from the reactor vessel, is in the public interest.

C. Environmental Considerations

    The NRC's approval of an exemption from insurance or indemnity 
requirements belongs to a category of actions that the Commission, 
by rule or regulation, has declared to be a categorical exclusion, 
after first finding that the category of actions does not 
individually or cumulatively have a significant effect on the human 
environment. Specifically, the exemption is categorically excluded 
from the requirement to prepare an environmental assessment or 
environmental impact statement, in accordance with 10 CFR 
51.22(c)(25).
    Under 10 CFR 51.22(c)(25), granting of an exemption from the 
requirements of any regulation of Chapter I to 10 CFR is a 
categorical exclusion provided that: (i) There is no significant 
hazards consideration; (ii) there is no significant change in the 
types or significant increase in the amounts of any effluents that 
may be released offsite; (iii) there is no significant increase in 
individual or cumulative public or occupational radiation exposure; 
(iv) there is no significant construction impact; (v) there is no 
significant increase in the potential for or consequences from 
radiological accidents; and (vi) the requirements from which an 
exemption is sought involve surety, insurance, or indemnity 
requirements.
    As the Deputy Director, Division of Operating Reactor Licensing, 
Office of Nuclear Reactor Regulation, I have determined that 
approval of the exemption request involves no significant hazards 
consideration, as defined in 10 CFR 50.92, because reducing a 
licensee's offsite liability requirements at Oyster Creek does not: 
(1) Involve a significant increase in the probability or 
consequences of an accident previously evaluated; (2) create the 
possibility of a new or different kind of accident from any accident 
previously evaluated; or (3) involve a significant reduction in a 
margin of safety. The exempted financial protection regulation is 
unrelated to the operation of Oyster Creek or site activities. 
Accordingly, there is no significant change in the types or 
significant increase in the amounts of any effluents that may be 
released offsite, and no significant increase in individual or 
cumulative public or occupational radiation exposure. The exempted 
regulation is not associated with construction, so there is no 
significant construction impact. The exempted regulation does not 
concern the source term (i.e., potential amount of radiation in an 
accident), nor any activities conducted at the site. Therefore, 
there is no significant increase in the potential for, or 
consequences of, a radiological accident. In addition, there would 
be no significant impacts to biota, water resources, historic 
properties, cultural resources, or socioeconomic conditions in the 
region resulting from issuance of the requested exemption. The 
requirement for offsite liability insurance involves surety, 
insurance, or indemnity matters only.
    Therefore, pursuant to 10 CFR 51.22(b) and 51.22(c)(25), no 
environmental impact statement or environmental assessment need be 
prepared in connection with the approval of this exemption request.

IV. Conclusions.

    Accordingly, the Commission has determined that, pursuant to 10 
CFR 140.8, the exemption is authorized by law and is otherwise in 
the public interest. Therefore, the Commission hereby grants Exelon 
an exemption from the requirements of 10 CFR 140.11(a)(4) for Oyster 
Creek. The licensee permanently ceased operation at Oyster Creek on 
September 17, 2018. The exemption from 10 CFR 140.11(a)(4) permits 
Oyster Creek to reduce the required level of primary financial 
protection, from $450 million to $100 million and to withdraw from 
participation in the secondary layer of financial protection 12 
months (365 days) after the certification of permanent fuel removal 
from the reactor vessel.
    The exemption is effective 12 months (365 days) after the 
certification of permanent fuel removal from the reactor vessel 
under Sec.  50.82(a)(1).

    Dated at Rockville, Maryland, this 19th day of December 2018.

    For the Nuclear Regulatory Commission.

Kathryn M. Brock,

Deputy Director, Division of Operating Reactor Licensing, Office of 
Nuclear Reactor Regulation.

[FR Doc. 2018-28203 Filed 12-27-18; 8:45 am]
 BILLING CODE 7590-01-P


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