De-commissioning fund violation yields little consequences for Exelon

Sometimes, if you’re facing a violation notice from the Nuclear Regulatory Commission, it just goes away if you want long enough.

That is the net effect of a violation notice the NRC issued May 1 in which it concluded that Exelon Nuclear had violated the rules when it provided estimates for how much money it had available for de-commissioning 12 nuclear plants — including the Limerick Generation Station — in 2005, 2006, 2007 and 2009.

But because the most recent reports from Exelon indicate the company is now in compliance, there will be no dire consequences.

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The NRC even went so far as to write “you are not required to respond to this letter.”

According to the NRC, “when a power company decides to close a nuclear power plant permanently, the facility must be decommissioned by safely removing it from service and reducing residual radioactivity to a level that permits release of the property and termination of the operating license. The Nuclear Regulatory Commission has strict rules governing nuclear power plant decommissioning, involving cleanup of radioactively contaminated plant systems and structures, and removal of the radioactive fuel.”

The fund is a kind of insurance policy required by the NRC, ensuring there will be enough money available when the decommissioning occurs.

“Before a nuclear power plant begins operations, the licensee must establish or obtain a financial mechanism – such as a trust fund or a guarantee from its parent company – to ensure there will be sufficient money to pay for the ultimate decommissioning of the facility,” according to the NRC.

“Each nuclear power plant licensee must report to the NRC every two years the status of its decommissioning funding for each reactor or share of a reactor that it owns. The report must estimate the minimum amount needed for decommissioning by using the formula” the NRC has established, and therein lay the problem with the most recent Exelon violation.

The basic problem was that Exelon submitted estimates for the company’s de-commissioning funds “for those years that were not calculated in accordance with NRC requirements, yet it represented and certified that the estimates met the applicable requirements. The NRC has not found that the company acted willfully,” NRC spokesman Neil Sheehan explained in an e-mail to 21st Century Media.

While the company many not have acted willfully, the issue was avoidable, according to the letter that accompanied the violation notice.

“The submittal of incomplete and inaccurate material information,” Ho K. Nieh, director of the division of inspection and regional support for NRC’s Office of Nuclear Reactor Regulation wrote, “resulted in NRC staff expending significant resources to determine how Exelon was calculating the required de-commissioning funds.”

“Had Exelon been more forthcoming with respect for information in DFS reports, this additional effort could have been precluded,” Nieh wrote,

According to NRC calculations released last year, the de-commissioning fund was short nearly $1 billion.

The potential violation was first identified in November, 2011 and a “supplemental investigation” confirmed those findings in October, 2012, according to the violation.

Then in April, 2013, NRC conducted a “pre-decisional conference” with Exelon officials and the actual violation, issued more than a year later.

Classified as a “severity level IV violation,” Sheehan said the issue was of “little or of very low safety significance” and, under NRC rules, “the company gets a chance to address the underlying issues as we will assess those corrective actions via upcoming inspections.”

Added Sheehan, “decommissioning funding updates provided by Exelon for these plants in 2011 and 2013 were consistent with NRC requirements. The NRC does not currently have any concerns about decommissioning funding assurance for any of the plants involved.”

In addition to Limerick other east coast nuclear plants affected by this violation include Peach Bottom Units 1, 2 and 3; Three Mile Island Unit 1 in Pennsylvania and Oyster Creek Generating Station in New Jersey.

“Exelon Generation acknowledges the NRC’s conclusion that, from the agency’s perspective, Exelon Generation appeared to have provided incomplete and inaccurate information during the specified 2005 to 2009 time-frame,” Dana Melia, communications director for the Limerick Generating Station.

“Exelon Generation is pleased and agrees with the NRC’s determination that the identified violation was not a willful violation. When Exelon Generation became aware of the NRC’s concerns, it implemented steps to modify and strengthen its process for providing decommissioning funding submissions, and the NRC has found the revised process to be acceptable,” she wrote.

“As confirmed in the NRC’s findings, Exelon Generation demonstrated reasonable assurance for decommissioning during the period at issue. We remained and continue to remain fully capable of meeting our decommissioning funding responsibilities,” Melia concluded.