Federal Register / Vol. 89, No. 3 / Thursday, January 4, 2024 / Notices 483 

NUCLEAR REGULATORY 

COMMISSION 

[Docket No. 50–255; NRC–2023–0198] 

Holtec Decommissioning International, 

LLC, and Holtec Palisades, LLC; 

Palisades Nuclear Plant; Exemption 

AGENCY: Nuclear Regulatory 

Commission. 

ACTION: Notice; issuance. 

SUMMARY: The U.S. Nuclear Regulatory 

Commission (NRC) has issued an 

exemption in response to a request from 

Holtec Decommissioning International, 

LLC (HDI), an indirect wholly owned 

subsidiary of Holtec International, that 

would allow HDI and Holtec Palisades, 

LLC, 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 the 

Palisades Nuclear Plant. 

DATES: The exemption was issued on 

December 22, 2023. 

ADDRESSES: Please refer to Docket ID 

NRC–2023–0198 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–2023–0198. Address 

questions about Docket IDs in 

Regulations.gov to Stacy Schumann; 

telephone: 301–415–0624; email: 

Stacy.Schumann@nrc.gov. 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, at 

301–415–4737, or by email to 

PDR.Resource@nrc.gov. 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: The PDR, where you 

may examine and order copies of 

publicly available documents, is open 

by appointment. To make an 

appointment to visit the PDR, please 

send an email to PDR.Resource@nrc.gov 

or call 1–800–397–4209 or 301–415– 

4737, between 8 a.m. and 4 p.m. eastern 

time (ET), Monday through Friday, 

except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

Tanya E. Hood, Office of Nuclear 

Material Safety and Safeguards, U.S. 

Nuclear Regulatory Commission, 

Washington, DC 20555–0001, telephone: 

301–415–1387, email: Tanya.Hood@

nrc.gov. 

SUPPLEMENTARY INFORMATION: The text of 

the exemption is attached. 

Dated: December 28, 2023. 

For the Nuclear Regulatory Commission. 

Tanya E. Hood, 

Project Manager, Reactor Decommissioning 

Branch, Division of Decommissioning, 

Uranium Recovery and Waste Programs, 

Office of Nuclear Material Safety and 

Safeguards. 

Attachment—Exemption 

Nuclear Regulatory Commission 

Docket No. 50–255 

Holtec Decommissioning International, 

LLC, and Holtec Palisades, LLC; 

Palisades Nuclear Plant Exemption 

I. Background 

By letter dated October 19, 2017 

(Agencywide Documents Access and 

Management System Accession No. 

ML17292A032), Entergy Nuclear 

Operations, Inc. (ENOI) certified to the 

U.S. Nuclear Regulatory Commission 

(NRC, or Commission) that it planned to 

permanently cease power operations at 

the Palisades Nuclear Plant (Palisades) 

no later than May 31, 2022. On May 20, 

2022, ENOI permanently ceased power 

operations at Palisades, and by letter 

dated June 13, 2022 (ML22164A067), 

ENOI certified to the NRC that the fuel 

was permanently removed from the 

Palisades reactor vessel and placed in 

the spent fuel pool (SFP) on June 10, 

2022. Accordingly, pursuant to 

paragraphs 50.82(a)(2) of title 10 of the 

Code of Federal Regulations (10 CFR), 

the 10 CFR part 50 renewed facility 

operating license for Palisades no longer 

authorizes operation of the reactor or 

emplacement or retention of fuel in the 

reactor vessel. The facility is still 

authorized to possess, and store 

irradiated (i.e., spent) nuclear fuel. 

Palisades spent fuel is currently stored 

in the SFP and in dry cask storage at the 

independent spent fuel storage 

installation (ISFSI). 

II. Request/Action 

By letter dated October 26, 2022 

(ML22299A059), Holtec 

Decommissioning International, LLC 

(HDI), one of the licensees of Palisades 

and an indirect wholly owned 

subsidiary of Holtec International 

(Holtec), requested an exemption on 

behalf of Holtec Palisades, LLC, the 

other Palisades licensee, from 10 CFR 

140.11(a)(4) concerning offsite primary 

and secondary liability insurance. HDI 

and Holtec Palisades, LLC, are hereafter 

collectively referred to as the licensee. 

The exemption from 10 CFR 

140.11(a)(4) would permit the licensee 

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 Palisades. 

The regulation at 10 CFR 140.11(a)(4) 

requires licensees to have and maintain 

primary financial protection in an 

amount of $450 million. In addition, 

licensees are required to participate in 

an industry retrospective rating plan 

(secondary financial protection) that 

commits licensees 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 the 

licensee 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. 

Many of the accident scenarios 

postulated in the updated safety 

analysis reports for operating power 

reactors involve failures or malfunctions 

of systems, which could affect the fuel 

in the reactor core and, in the most 

severe postulated accidents, would 

involve the release of large quantities of 

fission products. With the permanent 

cessation of power operations at 

Palisades and the permanent removal of 

the fuel from the reactor vessel, many 

accidents are no longer possible. 

Similarly, the associated risk of offsite 

liability damages that would require 

insurance or indemnification is 

commensurately lower for permanently 

shutdown and defueled plants. 

Therefore, the licensee requested 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 the 


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484 Federal Register / Vol. 89, No. 3 / Thursday, January 4, 2024 / Notices 

licensee’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.’’ In 

accordance with 10 CFR 50.82(a)(2), the 

license for a power reactor no longer 

authorizes operation of the reactor or 

emplacement or retention of fuel into 

the reactor vessel upon the docketing of 

the certifications for permanent 

cessation of operations and permanent 

removal of fuel from the reactor vessel. 

Therefore, the reactor cannot be used to 

generate power. 

Accordingly, a reactor that is 

undergoing decommissioning has no 

‘‘rated capacity.’’ Therefore, the NRC 

may 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. 

The financial protection limits of 10 

CFR 140.11(a)(4) were established to 

require licensees 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. Therefore, 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 (ML12257A628). The legal 

analysis underlying SECY–93–127 

concluded that, upon a technical 

finding that lesser potential hazards 

exist after permanent cessation of power 

operations (and the reactor having no 

‘‘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 power 

operations is not 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 

SFP at a recently shutdown reactor, the 

potential for an offsite radiological 

release from a zirconium fire with 

consequences comparable in some 

respects to an operating reactor accident 

remains. That risk is very low at the 

time of reactor shutdown because of 

design provisions that prevent a 

significant reduction in coolant 

inventory in the SFP under normal and 

accident conditions and becomes no 

longer credible once the continual 

reduction in decay heat provides ample 

time to restore coolant inventory and 

permits air cooling in a drained SFP. 

After that time, the probability of a 

large offsite radiological release from a 

zirconium fire is negligible for 

permanently 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 

permanently 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 

shutdown 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 (RCS) removes heat 

generated by the reactor. The RCS 

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 Palisades and 

the permanent removal of the fuel from 

the reactor core, such accidents are no 

longer possible. The reactor, RCS, 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, RCS, 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 

significantly reduced. 

The NRC staff performed an 

evaluation of the design-basis accidents 

(DBAs) for Palisades being permanently 

defueled as part of SECY–23–0043, 

‘‘Request by Holtec Decommissioning 

International, LLC for Exemptions from 

Certain Emergency Planning 

Requirements for Palisades Nuclear 

Plant,’’ dated May 15, 2023 

(ML23054A179). The licensee has 

stated, and the NRC staff agrees, that 

while spent fuel remains in the SFP, the 

only postulated DBAs that would 

remain applicable to Palisades in the 

permanently defueled condition that 

could contribute a significant dose is a 

fuel handling accident (FHA) in the 

Fuel Handling Building, where the SFP 

is located; a liquid waste incident; a 

waste gas incident and a postulated cask 

drop accident. For completeness, the 

NRC staff also evaluated the 

applicability of other DBAs documented 

in the Palisades Updated Final Safety 

Analysis Report (UFSAR) 

(ML21125A344) to ensure that these 

accidents would not have consequences 

that could potentially exceed the 10 


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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). 

The NRC staff previously approved 

the revised DBA radiological 

consequence analyses in License 

Amendment No. 272, ‘‘Palisades 

Nuclear Plant—Issuance of Amendment 

No. 272 Re: Permanently Defueled 

Technical Specifications (EPID L–2021– 

LLA–0099),’’ dated May 13, 2022 

(ML22039A198). As documented in the 

NRC’s safety evaluation for License 

Amendment No. 272, the NRC staff 

determined that 17 days is the amount 

of time needed for decay to meet the 

EPA early phase PAG limit of 1 rem 

total effective dose equivalent (TEDE) at 

the exclusion area boundary (EAB). In 

using the same assumptions, except for 

decay time, the licensee’s dose analysis 

for an FHA with 60 days of decay in the 

SFP results in a dose of 0.014 rem TEDE 

at the EAB. This result meets the 6.3 

rem acceptance criteria of RG 1.183 at 

the EAB and low population zone. In 

addition, it also meets the EPA early 

phase PAG criterion of 1 rem TEDE and 

below 10 percent EPA PAG threshold 

for declaration of a site area emergency. 

The licensee has determined that after 

a decay time of at least 60 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. 

Palisades permanently ceased power 

operations on May 20, 2022. After over 

a year of decay, the thyroid dose from 

an FHA would be negligible. The only 

isotope remaining in significant 

amounts, among those postulated to be 

released in a design-basis FHA, would 

be Krypton-85. Since Krypton-85 

primarily decays by beta emission, the 

calculated skin dose from an FHA 

release would make an insignificant 

contribution to the total effective dose 

equivalent, which is the parameter of 

interest in the determination of the EPA 

early phase PAGs for sheltering or 

evacuation. Therefore, the NRC staff 

concludes that the dose consequences 

from an FHA for the permanently 

shutdown Palisades facility would not 

approach the EPA early phase PAG 

criterion. 

The NRC staff reviewed the 

consequences of an FHA, liquid waste 

incident, waste gas incident, and 

postulated cask drop accident in detail 

during the review of previously 

approved license amendment requests 

and exemptions from various emergency 

planning requirements for Palisades and 

found them to be acceptable. Since this 

technical information has not changed 

in relation to this exemption request, 

the NRC staff relied on these previous 

conclusions to conduct portions of the 

review for this exemption request. The 

NRC staff notes that while the licensee 

continues to rely on the information 

from previously approved licensing 

actions, the calculated doses would be 

expected to be lower when this 

exemption is implemented due to 

additional decay time beyond the time 

assumed in the previously approved 

actions. Therefore, any offsite 

consequence from a design-basis 

radiological release is highly unlikely 

and, therefore, 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 shutdown and defueled 

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 Palisades has 

been permanently shutdown. 

The licensee performed an analysis 

demonstrating that 12 months after 

Palisades permanently shut down, the 

spent fuel stored in the SFP will have 

decayed to the extent that the requested 

exemption may be implemented at 

Palisades. Given Palisades’ permanent 

shutdown date was May 20, 2022, and 

the fuel decay time of 12 months, May 

31, 2023, terminates the period during 

which the spent fuel could heat-up to 

clad ignition temperature within 10 

hours under adiabatic conditions. This 

analysis, ‘‘Holtec Spent Fuel Pool 

Calculation,’’ dated July 8, 2022, [nonpublic], was submitted as Attachment 1 

by the licensee in support of the letter 

dated July 11, 2022 (ML22192A134), in 

which the licensee requested 

exemptions from specific portions of 10 

CFR 50.47 and appendix E to 10 CFR 

part 50 for the Palisades license. The 

analysis determined the decay time 

necessary to ensure a minimum of 10 

hours is available before the fuel 

cladding temperature of the hottest fuel 

assembly in the SFP reaches 900 °C. 

This 10-hour minimum threshold 

provides sufficient time for the licensee 

to take mitigative actions, 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 licensee’s 

calculation to verify that important 

physical properties of materials were 

within acceptable ranges and that the 

results were accurate. The NRC staff 

determined that the physical properties 

of materials were appropriate in the 

licensee’s calculations related to SFP 

heatup considerations for Palisades. 

Therefore, the NRC staff found that 12 

months after permanent cessation of 

power operations, 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 

(ML003760936), the 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., 

Pilgrim Nuclear Power Station, 

published in the Federal Register on 

January 14, 2020 (85 FR 1827); Three 

Mile Island Nuclear Station, Unit 1, 


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486 Federal Register / Vol. 89, No. 3 / Thursday, January 4, 2024 / Notices 

published in the Federal Register on 

March 26, 2021 (86 FR 14472); and 

Duane Arnold Energy Center, published 

in the Federal Register on May 18, 2021 

(86 FR 26961)). Additional discussions 

of other decommissioning reactor 

licensees that have received exemptions 

to reduce their primary insurance level 

to $100 million are provided in SECY– 

96–256, ‘‘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 

(ML15062A483). These prior 

exemptions were based on the licensee 

demonstrating that the SFP could be aircooled consistent with the technical 

criterion discussed above. 

In the exemption request dated 

October 26, 2022, the licensee compared 

the Palisades fuel storage parameters 

with those used in NRC generic 

evaluations of fuel cooling included in 

NUREG/CR–6451, ‘‘A Safety and 

Regulatory Assessment of Generic BWR 

[Boiling-Water Reactor] and PWR 

[Pressurized-Water Reactor] 

Permanently Shutdown Nuclear Power 

Plants,’’ dated August 1997 

(ML082260098). The analysis described 

in NUREG/CR–6451 determined that 

natural air circulation would adequately 

cool fuel that has decayed for 17 months 

after operation in a typical PWR. The 

licensee compared the post-shutdown 

fuel storage conditions with those 

assumed for the analysis presented in 

NUREG/CR–6451. 

The licensee found that the Palisades 

fuel storage configuration is smaller 

than the values modeled in NUREG/CR– 

6451. However, these differences are 

considered to be conservatively offset by 

the lower power density of the Palisades 

fuel assemblies, substantially larger 

downcomer areas for improved 

buoyancy driven air flow and natural 

circulation, and the fewer number of 

fuel assemblies that are stored in the 

fuel racks as compared to the NUREG/ 

CR–6451 PWR model. Therefore, the 

cooling air flow should be comparable. 

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 

(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 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 thermalhydraulically capable of sustaining a 

zirconium fire based on a plant-specific 

analysis. The NRC staff also 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 permanent cessation of 

operations, the Commission has the 

discretion under the PAA to reduce the 

amount of insurance required of a 

licensee undergoing decommissioning. 

Based on its review of the exemption 

request, the NRC staff concludes that the 

technical criteria for relieving Holtec 

Palisades and HDI from their existing 

primary and secondary insurance 

obligations have been met. As explained 

above, the NRC staff has concluded that 

no reasonably conceivable DBA 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 highly unlikely and the need for a 

significant amount of offsite liability 

insurance coverage is unwarranted. 

Additionally, the NRC staff determined 

that, after 12 months decay, the fuel 

stored in the Palisades SFP will be 

capable of being adequately cooled by 

air in the highly unlikely event of pool 

drainage. Moreover, in the highly 

unlikely beyond DBA scenario where 

the SFP water 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 at least 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. Therefore, the NRC staff 

concludes that the fuel stored in the 

Palisades SFP will have decayed 

sufficiently by the requested effective 

date for the exemption of 12 months 

after permanent cessation of power 

operations to support a reduction in the 

required insurance consistent with 

SECY–00–0145. 

The NRC staff has determined that 

granting 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 


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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 analyzed and the NRC staff 

confirmed that the risks of accidents 

that could result in an offsite 

radiological release are minimal, which 

justifies 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 Palisades is permanently 

shutdown, 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 the licensee is 

greatly disproportionate to the 

radiological risk posed by Palisades 

when compared to operating reactors. 

The reduced overall risk to the public at 

decommissioning power plants does not 

warrant that the licensee 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. Therefore, 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 ensures that there will be adequate 

funds to address any of those 

consequences and helps to ensure 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 

Holtec Palisades and HDI to lower the 

Palisades primary insurance levels and 

to withdraw from the secondary 

retrospective premium pool at the 

requested effective date of 12 months 

after permanent cessation of power 

operations, 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 Director of the Division of 

Decommissioning, Uranium Recovery, 

and Waste Programs in the NRC’s Office 

of Nuclear Material Safety and 

Safeguards, I have determined that 

approval of the exemption request 

involves no significant hazards 

consideration, as defined in 10 CFR 

50.92, because reducing the licensee’s 

offsite liability requirements at 

Palisades 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 Palisades 

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 Holtec Palisades and HDI 

an exemption from the requirements of 

10 CFR 140.11(a)(4) for Palisades. 

Palisades permanently ceased power 

operations on May 20, 2022. The 

exemption from 10 CFR 140.11(a)(4) 

permits Palisades 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 after permanent cessation of 

power operations, which was May 20, 

2023. Because this period had already 

elapsed, the exemption is effective upon 

issuance. 

Dated: this 22nd day of December 2023. 

For the Nuclear Regulatory Commission. 

/RA/ 

Jane Marshall, 

Director, Division of Decommissioning, 

Uranium Recovery, and Waste Programs, 

Office of Nuclear Material Safety and 

Safeguards. 

[FR Doc. 2023–28951 Filed 1–3–24; 8:45 am] 

BILLING CODE 7590–01–P 


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