[Federal Register Volume 83, Number 8 (Thursday, January 11, 2018)]
[Notices]
[Pages 1383-1388]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00318]


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NUCLEAR REGULATORY COMMISSION

[Docket Nos. 50-361 and 50-362; NRC-2018-0003]


Southern California Edison Company, San Onofre Nuclear Generating 
Station, Units 2 and 3

AGENCY: Nuclear Regulatory Commission.

ACTION: Exemption; issuance.

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SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) is issuing an 
exemption from certain power reactor financial protection requirements 
in response to a September 16, 2015, request from the Southern 
California Edison Company (the licensee). The exemption would permit 
the San Onofre Nuclear Generating Station, Units 2 and 3 (SONGS), to 
reduce the required level of primary financial protection from $450 
million to $100 million, as well as to withdraw from participation in 
the secondary layer of financial protection effective immediately.

ADDRESSES: Please refer to Docket ID NRC-2018-0003 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:
    <bullet> Federal Rulemaking website: Go to http://www.regulations.gov and search for Docket ID NRC-2018-0003. Address 
questions about NRC dockets to Carol Gallagher; telephone: 301-415-
3463; email: <a href="/cdn-cgi/l/email-protection#024163706d6e2c45636e6e63656a6770426c70612c656d74"><span class="__cf_email__" data-cfemail="3a795b485556147d5b56565b5d525f487a544859145d554c">[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 ``ADAMS Public Documents'' and 
then 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#96e6f2e4b8e4f3e5f9e3e4f5f3d6f8e4f5b8f1f9e0"><span class="__cf_email__" data-cfemail="2b5b4f5905594e58445e59484e6b455948054c445d">[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: Marlayna Vaaler, Office of Nuclear 
Material Safety and Safeguards; U.S. Nuclear Regulatory Commission, 
Washington, DC 20555-0001; telephone: 301-415-3178; email: 
<a href="/cdn-cgi/l/email-protection#2568445749445c4b440b734444494057654b57460b424a53"><span class="__cf_email__" data-cfemail="6e230f1c020f17000f40380f0f020b1c2e001c0d40090118">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: 

I. Background

    The San Onofre Nuclear Generating Station, Units 1, 2, and 3 
(SONGS), operated by the Southern California Edison Company (SCE) is 
located approximately 4 miles south of San

[[Page 1384]]

Clemente, California. The SONGS, Unit 1, Docket No. 50-206, was a 
Westinghouse 456 megawatt electric (MWe) pressurized water reactor 
which was granted Facility Operating License No. DPR-13 on January 1, 
1968 (ADAMS Accession No. ML13309A138), and ceased operation on 
November 30, 1992 (ADAMS Accession No. ML13319B040). The licensee 
completed defueling on March 6, 1993 (ADAMS Accession No. ML13319B055), 
and maintained the unit in SAFSTOR until June 1999, when it initiated 
decommissioning (ADAMS Accession No. ML13319B111). On December 28, 1993 
(ADAMS Accession No. ML13319B059), the NRC approved the Permanently 
Defueled Technical Specifications for SONGS, Unit 1.
    The SCE submitted the proposed Decommissioning Plan for SONGS, Unit 
1, on November 3, 1994 (ADAMS Accession No. ML13319B073). As a result 
of the 1996 revision to the regulations in section 50.82 of title 10 of 
the Code of Federal Regulations (10 CFR), the NRC replaced the 
requirement for a decommissioning plan with a requirement for a Post 
Shutdown Decommissioning Activities Report (PSDAR). On August 28, 1996, 
the SONGS, Unit 1, Decommissioning Plan became the SONGS 1 PSDAR (61 FR 
67079; December 19, 1996). On December 15, 1998 (ADAMS Accession No. 
ML13184A353), SCE submitted an update to the PSDAR to the NRC, as 
required by 10 CFR 50.82(a)(7), in order to begin planning for the 
dismantlement and decommissioning of SONGS, Unit 1. The SONGS, Unit 1, 
received approval for an exemption from the financial protection 
requirements under 10 CFR part 140 and 10 CFR 50.54(w), similar to what 
is being requested for SONGS, Units 2 and 3, on May 4, 1994.
    The SONGS, Units 2 and 3, Docket Nos. 50-361 and 50-362, are 
Combustion Engineering 1127 MWe pressurized water reactors, which were 
granted Facility Operating Licenses NPF-10 on February 16, 1982, and 
NPF-15 on November 15, 1982, respectively. In June 2013, pursuant to 10 
CFR 50.82(a)(1)(i), the licensee certified to the NRC that as of June 
4, 2013, operations had ceased at SONGS, Units 2 and 3 (ADAMS Accession 
No. ML131640201). The licensee subsequently certified, pursuant to 10 
CFR 50.82(a)(1)(ii), that all fuel had been removed from the reactor 
vessels of both units, and committed to maintaining the units in a 
permanently defueled status (ADAMS Accession Nos. ML13204A304 and 
ML13183A391 for Unit 2 and Unit 3, respectively). Therefore, pursuant 
to 10 CFR 50.82(a)(2), SCE's 10 CFR part 50 licenses no longer 
authorize operation of SONGS Units 2 and 3, or emplacement or retention 
of fuel in the reactor vessels. The licensee is still authorized to 
possess and store irradiated nuclear fuel. Irradiated fuel is currently 
being stored onsite in spent fuel pools (SFPs) and in dry casks at an 
Independent Spent Fuel Storage Installation (ISFSI).
    The PSDAR for SONGS, Units 2 and 3, was submitted on September 23, 
2014 (ADAMS Accession No. ML14272A121), and the associated public 
meeting was held on October 27, 2014, in Carlsbad, California (ADAMS 
Accession No. ML14352A063). The NRC confirmed its review of the SONGS, 
Units 2 and 3, PSDAR and addressed public comments in a letter dated 
August 20, 2015 (ADAMS Accession No. ML15204A383). On July 17, 2015, 
the NRC approved the Permanently Defueled Technical Specifications for 
SONGS, Units 2 and 3 (ADAMS Accession No. ML15139A390).

II. Request/Action

    Pursuant to 10 CFR 140.8, ``Specific exemptions,'' SCE requested an 
exemption from 10 CFR 140.11(a)(4), by letter dated September 16, 2015 
(ADAMS Accession No. ML15260B188). 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 would allow SCE to withdraw from participation in the secondary 
layer of financial protection (also known as the industry retrospective 
rating plan). The request to eliminate the requirement to carry 
secondary financial protection is for SONGS, Units 2 and 3, only. The 
NRC previously granted an exemption for SONGS, Unit 1, from the 
requirements of 10 CFR 140.11(a)(4), which permitted SCE's withdrawal 
from participation in the industry retrospective rating plan in 1994 
(Legacy ADAMS Accession No. 9405090151).
    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 SCE to deferred 
premium charges up to a maximum total deferred premium of $121,255,000 
with respect to any nuclear incident at any operating nuclear power 
plant, and up to a maximum annual deferred premium of $18,963,000 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, SCE 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, the Commission may, upon application by 
any interested person or upon its own initiative, grant exemptions from 
the requirements of 10 CFR part 140, when the exemptions are authorized 
by law and are 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 financial 
protection that is commercially available (currently, $450 million) 
with access to the aggregate amount of secondary financial protection 
available to the industry (currently, up to $121,255,000 per reactor 
covered by the rating plan totaling approximately $13 billion for the 
industry per incident). The NRC's regulations at 10 CFR 140.11(a)(4) 
implement these PAA requirements and set forth the amount of primary 
and secondary financial protection that each power reactor licensee 
must have.
    As noted above, the PAA requirements with respect to primary and 
secondary financial protection, 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

[[Page 1385]]

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 
industry retrospective rating plan 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 financial 
protection, 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 
incident at an operating reactor with a rated capacity of 100,000 
electric kilowatts (or greater). Thus, the financial protection levels 
established by this regulation, and as required by the PAA, were 
associated with the risks and potential consequences of an incident at 
an operating reactor with a rated capacity of 100,000 electric 
kilowatts (or greater). The legal and associated technical basis for 
granting exemptions from 10 CFR part 140 is 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 (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 itself determinative as to whether a licensee 
may cease providing the offsite financial protection 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 at a recently 
shutdown reactor, the primary consideration is the risk and potential 
consequence of an offsite radiological release from a zirconium fire. 
That risk generally remains the greatest for a period of about 15 to 18 
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 incident 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, operating at high temperatures 
and pressures, transfers this heat through the steam generator tubes 
converting non-radioactive feedwater to steam, which then flows to the 
main turbine generator to produce electricity. Many 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 SONGS and the permanent removal of 
the fuel from the reactor cores, such accidents are no longer possible. 
The reactors, 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 reactors, 
RCS, or supporting systems are no longer applicable.
    As described in the PSDAR, SONGS, Unit 1, is being returned to a 
condition suitable for unrestricted use. According to SCE, there are no 
structures, systems, or components (SSCs) classified as safety-related 
remaining at SONGS, Unit 1. Plant dismantlement is complete and nearly 
all of the SSCs have been shipped offsite for disposal. Only the spent 
fuel, reactor vessel, and the below-grade portions of some buildings 
remain onsite. The principal remaining decommissioning activities are 
soil remediation, compaction, and grading. This is to be completed in 
conjunction with the future decommissioning of the ISFSI subsequent to 
offsite shipment of the spent fuel.
    The licensee also stated that decommissioning of SONGS, Units 2 and 
3, has begun and the nuclear reactors and essentially all associated 
SSCs in the nuclear steam supply system and balance of plant that 
supported the generation of power have been retired in place and are 
being prepared for removal. The SSCs that remain operable are 
associated with the SFPs and the spent fuel building, are needed to 
meet other regulatory requirements, or are needed to support other site 
facilities (e.g., radioactive waste handling, ventilation and air 
conditioning, etc.). No remaining active SSCs are classified as safety-
related.
    During reactor decommissioning, the principal radiological risks 
are associated with the storage of spent fuel onsite. In addition, a 
site with a permanently shutdown and defueled reactor may contain an 
inventory of radioactive liquids, activated reactor components, and 
contaminated materials. For purposes of modifying the amount of 
financial protection maintained by a permanently shutdown and defueled 
reactor licensee, the potential radiological consequences of these non-
operating reactor nuclear incidents are appropriate to consider, 
despite their very low probability of occurrence. On a case-by-case 
basis, licensees undergoing decommissioning have been granted 
permission to reduce the required amount of primary offsite financial 
protection from $450 million to $100 million, and to withdraw from the 
industry retrospective rating plan.\1\ One of the technical criteria 
for granting the exemption is elimination of the possibility of a 
design-basis event that could cause significant offsite damage.
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    \1\ See Memorandum from William D. Travers, Executive Director 
for Operations, to the Commission, dated August 16, 2002 (ADAMS 
Accession No. ML030550706).
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    In its September 16, 2015, exemption request, SCE discusses both 
design-basis and beyond design-basis events involving irradiated fuel 
stored in the SFPs. The staff independently evaluated the offsite 
consequences associated with various decommissioning activities, design 
basis accidents, and beyond design basis accidents at SONGS, in 
consideration of its permanently shut down and defueled status. The 
possible design-basis and beyond design basis accident scenarios at 
SONGS show that the radiological consequences of these accidents are 
greatly reduced at a permanently shut down and defueled reactor, in 
comparison to a fueled reactor. Further, the staff has used the offsite 
radiological release limits established by the U.S. Environmental 
Protection Agency (EPA) early-phase Protective Action Guidelines (PAGs) 
of one roentgen equivalent man (rem) at the exclusion area boundary in 
determining that any possible radiological releases would be minimal 
and would not require precautionary protective actions (e.g., 
sheltering in place or evacuation), which could result in offsite 
liability.

[[Page 1386]]

    The only beyond design-basis event that has the potential to a 
significant radiological release at a decommissioning reactor is a 
zirconium fire. The zirconium fire scenario is a postulated, but highly 
unlikely, beyond design-basis accident scenario that involves loss of 
water inventory from the SFP, resulting in a significant heat-up 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 SONGS has been permanently shut 
down.
    The licensee provided a detailed analysis of the events that could 
result in an offsite radiological release at SONGS in its March 31, 
2014, submittal to the NRC (ADAMS Accession No. ML14092A332), as 
supplemented by letters dated September 9, October 2, October 7, 
October 27, November 3, and December 15, 2014 (ADAMS Accession Nos. 
ML14258A003, ML14280A265, ML14287A228, ML14303A257, ML14309A195, and 
ML14351A078, respectively). One of these beyond design-basis accidents 
involves a complete loss of SFP water inventory, where cooling of the 
spent fuel would be primarily accomplished by natural circulation of 
air through the uncovered spent fuel assemblies. The licensee's 
analysis of this accident shows that by August 31, 2014, air-cooling of 
the spent fuel assemblies will be sufficient to keep the fuel within a 
safe temperature range indefinitely without fuel cladding damage or 
offsite radiological release. The NRC staff has confirmed the reduced 
risks at SONGS by comparing the generic risk assumptions in the 
analyses in NUREG-1738, ``Technical Study of Spent Fuel Pool Accident 
Risk at Decommissioning Nuclear Power Plants,'' dated February 28, 2001 
(ADAMS Accession No. ML010430066) to site-specific conditions at SONGS; 
based on this assessment, the staff determined that the risk values in 
NUREG-1738 bound the risks presented by SONGS.
    The Commission has previously authorized a lesser amount of 
financial protection, based on an analysis of the zirconium fire risk. 
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 staff outlined a policy for 
reducing required liability insurance coverage for decommissioning 
reactors, and 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. The 
discussions in SECY-93-127 centered primarily on the public health and 
safety risks associated with storing fuel in spent fuel pools. In its 
Staff Requirements Memorandum dated July 13, 1993 (ADAMS Accession No. 
ML003760936), the Commission approved a policy that would permit 
reductions in financial protection, when a licensee was able to 
demonstrate that the spent fuel could be air-cooled if the SFP was 
drained of water.
    Upon demonstration of this technical criterion, the Commission 
policy allowed decommissioning licensees to withdraw from participation 
in the industry retrospective rating plan, and permitted reductions in 
the required amount of primary financial protection from $450 million 
to $100 million. The staff has used this technical criterion to grant 
similar exemptions to other decommissioning reactor licensees (e.g., 
Maine Yankee Atomic Power Station, published in the Federal Register on 
January 19, 1999 (64 FR 2920); and Zion Nuclear Power Station, 
published in the Federal Register on December 28, 1999 (64 FR 72700)). 
Additional discussions of other decommissioning reactor licensees that 
have received exemptions to reduce their primary insurance level to 
$100 million is provided in SECY-96-256, ``Changes to Financial 
Protection Requirements for Permanently Shutdown Nuclear Power 
Reactors, 10 CFR 50.54(w)(1) 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.
    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 the Spent Fuel Pool,'' dated June 4, 2001 (ADAMS 
Accession Nos. ML003721626 and ML011450420, respectively), the 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 air-cooling is one measure that demonstrates when the probability of 
a zirconium fire would be exceedingly low. However, the staff has more 
recently used an additional analysis that would bound an incomplete 
drain down of the SFP water, or some other catastrophic event (such as 
a complete drainage of the SFP with rearrangement of spent fuel rack 
geometry and/or the addition of rubble to the SFP). The analysis 
postulates that decay heat transfer from the spent fuel via conduction, 
convection, or radiation would be impeded. This analysis is often 
referred to as an adiabatic heat-up analysis.
    The licensee's analyses referenced in its exemption request 
demonstrates that under conditions where the SFP water inventory has 
drained completely and only air-cooling of the stored irradiated fuel 
is available, after August 2014 air-cooling of the spent fuel 
assemblies will be sufficient to keep the fuel within a safe 
temperature range indefinitely without fuel cladding damage or offsite 
radiological release. However, a portion of the air-cooling analyses 
credits operation of the normal fuel building ventilation systems 
because the fuel building structures are robust and offer little 
potential for natural air exchange with the environment for cooling. 
Because the normal fuel building ventilation could become unavailable 
during an initiating event that would lead to complete SFP drainage 
(i.e., a seismic event), the NRC staff also relied upon the additional 
time that the fuel in the SONGS SFPs has had to cool since the plant 
was permanently shutdown in June 2013 during its evaluation of the 
licensee's exemption request.
    As discussed in the staff response to a question in SECY-00-0145, 
``the staff believes that full insurance coverage must be maintained 
for 5 years or until a licensee can show by analysis that its spent 
fuel pool is no longer vulnerable to such [a zirconium] fire.'' In 
addition, as discussed in the staff response to another question in 
SECY-00-0145:

    Since the zirconium fire scenario would be possible for up to 
several years following shutdown, and since the consequences of such 
a fire could be severe in terms of offsite health consequences, 
property damage, and land contamination, the staff position is that 
full offsite liability coverage (both primary and secondary levels) 
must be retained for five years or until analysis has indicated that 
a zirconium fire is no longer possible. At that point, primary 
coverage would be reduced from $200 million to $100 million and 
participation in the secondary retrospective rating pool would no 
longer be required.

Although the official certifications for permanent cessation of power 
operations and permanent removal of fuel from the reactor vessel were 
not submitted until June 2013, the staff notes that SONGS was in an 
extended

[[Page 1387]]

outage to address steam generator issues, and neither SONGS, Units 2 
nor 3, have produced power since January 2012. This additional storage 
time for the fuel in the SONGS SFPs has allowed it to cool for greater 
than the 5 years suggested in SECY-00-0145, which supports the 
conclusion that zirconium fire risks from the irradiated fuel stored in 
the SFPs is of negligible concern and exemption from the requested 
requirements is warranted.
    In addition to the air-cooling scenario, the licensee's adiabatic 
heat-up analyses demonstrate that as of October 12, 2014, there would 
be at least 17 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. The licensee states that for this loss of all cooling 
scenario, 10 hours is sufficient time for personnel to respond with 
additional resources, equipment, and capability to restore cooling to 
the SFPs, even after a non-credible, catastrophic event.
    As provided in SCE's letters dated October 7 and December 15, 2014, 
the licensee furnished information concerning its makeup strategies, in 
the event of a loss of SFP coolant inventory. The multiple strategies 
for providing makeup to the SFPs include: Using existing plant systems 
for inventory makeup; an internal strategy that relies on installed 
fire water pumps and service water or fire water storage tanks; or an 
external strategy that uses portable pumps to initiate makeup flow into 
the SFPs through a seismic standpipe and standard fire hoses routed to 
the SFPs or to a spray nozzle. These strategies will be maintained by a 
license condition until such time as all fuel has been moved to dry 
storage in an onsite ISFSI. The licensee states that the equipment 
needed to perform these actions are located onsite, and that the 
external makeup strategy (using portable pumps) is capable of being 
deployed within 2 hours. The licensee also stated that, considering the 
very low-probability of beyond design-basis accidents affecting the 
SFPs, these diverse strategies provide defense-in-depth and time to 
mitigate and prevent a zirconium fire, using makeup or spray into the 
SFP before the onset of zirconium cladding rapid oxidation.
    In the safety evaluation of the licensee's request for exemptions 
from certain emergency planning requirements dated June 4, 2015 (ADAMS 
Accession No. ML15082A204), the NRC staff assessed the SCE accident 
analyses associated with the radiological risks from a zirconium fire 
at the permanently shutdown and defueled SONGS site. The NRC staff has 
confirmed that under conditions where cooling air flow can develop, 
suitably conservative calculations indicate that by the end of August 
2014, the fuel would remain at temperatures where the cladding would be 
undamaged for an unlimited period. The staff also finds that the 
additional cooling time provided for the fuel between January 2012 and 
the issuance of this exemption provides reasonable assurance that 
zirconium fire risks from the irradiated fuel stored in the SFPs is of 
negligible concern. 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, 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 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 additional 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 spent fuel pool 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 have 
been granted to other permanently shutdown and defueled power reactors, 
upon demonstration that the criterion of the zirconium fire risks from 
the irradiated fuel stored in the SFP is of negligible concern. 
Finally, the staff notes that in accordance with the SONGS PSDAR, all 
spent fuel will be removed from the SFPs and moved into dry storage at 
an onsite ISFSI by the end of 2019, and the probability of an 
initiating event that would threaten SFP integrity occurring before 
that time is extremely low, which further supports the conclusion that 
the risk of a zirconium fire is negligible.

The Exemption Is Authorized by Law

    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 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, as amended, 
other laws, or the Commission's regulations, which require licensees to 
maintain adequate financial protection. Therefore, the proposed 
exemption for SONGS from the primary offsite liability insurance and 
secondary financial protection requirements of 10 CFR 140.11(a)(4) is 
authorized by law.

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 consequences of nuclear 
incidents at permanently shutdown and decommissioning reactors.
    In SECY-93-127, SECY-00-0145, and SECY-01-0100 provide a basis for 
allowing 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 operating 
reactors, and the associated potential for offsite financial 
liabilities from an accident are commensurately less. The licensee has 
analyzed and the staff has confirmed that the possible accidents that 
could result in an offsite radiological risk are minimal, thereby 
justifying the proposed reductions in offsite 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 be problematic for SCE because the licensee would incur 
financial liability if an extraordinary nuclear incident occurred at 
another nuclear power plant. Because SONGS is permanently shut down, it 
does not

[[Page 1388]]

produce revenue from electricity generation sales to cover such a 
liability. Therefore, such liability, if incurred, could significantly 
affect the financial resources available to the facility to conduct and 
complete radiological decontamination and decommissioning activities. 
Furthermore, the shared financial risk exposure to SCE is greatly 
disproportionate to the radiological risk posed by SONGS when compared 
to operating reactors.
    The reduced overall risk to the public at decommissioning power 
plants does not warrant SCE 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 and exemptions approved for other 
decommissioning reactors. Thus, the underlying purpose of the 
regulations will not be adversely affected by reductions in the 
insurance coverage for SONGS.
    Accordingly, the proposed exemption for SONGS from the primary 
offsite liability insurance and secondary financial protection 
requirements of 10 CFR 140.11(a)(4) is in the public interest.

Environmental Considerations

    Pursuant to 10 CFR 51.22(c)(25), the granting of an exemption from 
the requirements of any regulation in Chapter I of 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 
are among those identified in 10 CFR 51.22(c)(25)(vi).
    The NRC staff has determined that approval of the exemption request 
involves no significant hazards consideration because reducing the 
licensee's offsite liability requirements at the decommissioning San 
Onofre Nuclear Generating Station, Units 2 and 3, 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 SONGS. 
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 
involved an accident) or accident mitigation; therefore, there is no 
significant increase in the potential for, or consequences from, 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. The requirement 
for offsite liability insurance may be viewed as involving surety, 
insurance, or indemnity matters in accordance with 10 CFR 
51.22(c)(25)(vi).
    Therefore, pursuant to 10 CFR 51.22(b) and 10 CFR 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 SCE exemption 
from the requirement of 10 CFR 140.11(a)(4) to permit the licensee to 
reduce primary offsite liability insurance to $100 million, accompanied 
by withdrawal from participation in the secondary insurance pool for 
offsite liability insurance.
    This exemption is effective upon issuance.

    Dated at Rockville, Maryland, this 5th day of January 2018.

    For the Nuclear Regulatory Commission.
Gregory Suber,
Deputy Division Director, Division of Decommissioning, Uranium Recovery 
and Waste Programs, Office of Nuclear Material Safety and Safeguards.
[FR Doc. 2018-00318 Filed 1-10-18; 8:45 am]
BILLING CODE 7590-01-P


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