83 FR 2680 - Southern California Edison Company; San Onofre Nuclear Generating Station, Units 1, 2, and 3

NUCLEAR REGULATORY COMMISSION

Federal Register Volume 83, Issue 12 (January 18, 2018)

The U.S. Nuclear Regulatory Commission (NRC) is issuing an exemption from the requirement to maintain a specified level of onsite property damage insurance in response to an October 22, 2015, request from the Southern California Edison Company (the licensee). Specifically, the licensee requested that the San Onofre Nuclear Generating Station, Units 1, 2, and 3, be granted an exemption to permit the licensee to reduce its onsite property damage insurance from $1.06 billion to $50 million.

[Federal Register Volume 83, Number 12 (Thursday, January 18, 2018)]
[Notices]
[Pages 2680-2685]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-00715]


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NUCLEAR REGULATORY COMMISSION

[Docket Nos. 50-206, 50-361, and 50-362; NRC-2018-0004]


Southern California Edison Company; San Onofre Nuclear Generating 
Station, Units 1, 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 the requirement to maintain a specified level of onsite 
property damage insurance in response to an October 22, 2015, request 
from the Southern California Edison Company (the licensee). 
Specifically, the licensee requested that the San Onofre Nuclear 
Generating Station, Units 1, 2, and 3, be granted an exemption to 
permit the licensee to reduce its onsite property damage insurance from 
$1.06 billion to $50 million.

ADDRESSES: Please refer to Docket ID NRC-2018-0004 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 http://www.regulations.gov and search for Docket ID NRC-2018-0004. Address 
questions about NRC dockets to Carol Gallagher; telephone: 301-415-
3463; email: [email protected]. 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 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 [email protected]. 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: 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: 
[email protected].

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 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.

[[Page 2681]]

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, 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 
7, 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 or emplacement or retention of fuel into 
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 50.12, ``Specific exemptions,'' SCE requested an 
exemption from 10 CFR 50.54(w)(1), by letter dated October 22, 2015 
(ADAMS Accession No. ML15299A220). The exemption from the requirements 
of 10 CFR 50.54(w)(1) would permit the licensee to reduce the required 
level of onsite property damage insurance from $1.06 billion to $50 
million.
    The regulation at 10 CFR 50.54(w)(1) requires each licensee to have 
and maintain onsite property damage insurance to stabilize and 
decontaminate the reactor and reactor site in the event of an accident. 
The onsite insurance coverage must be either $1.06 billion or whatever 
amount of insurance is generally available from private sources 
(whichever is less).
    The licensee states that the risk of an incident at a permanently 
shutdown and defueled reactor is much less than the risk from an 
operating power reactor. In addition, since reactor operation is no 
longer authorized at SONGS, there are no events that would require the 
stabilization of reactor conditions after an accident. Similarly, the 
risk of an accident that that would result in significant onsite 
contamination at SONGS is also much lower than the risk of such an 
event at operating reactors. Therefore, SCE is requesting an exemption 
from 10 CFR 50.54(w)(1) to reduce its onsite property damage insurance 
from $1.06 billion to $50 million, commensurate with the reduced risk 
of an incident at the permanently shutdown and defueled SONGS site.

III. Discussion

    Under 10 CFR 50.12, the Commission may, upon application by any 
interested person or upon its own initiative, grant exemptions from the 
requirements of 10 CFR part 50 when (1) the exemptions are authorized 
by law, will not present an undue risk to public health or safety, and 
are consistent with the common defense and security; and (2) any of the 
special circumstances listed in 10 CFR 50.12(a)(2) are present.
    The financial protection limits of 10 CFR 50.54(w)(1) were 
established after the Three Mile Island accident out of concern that 
licensees may be unable to financially cover onsite cleanup costs in 
the event of a major nuclear accident. The specified $1.06 billion 
coverage amount requirement was developed based on an analysis of an 
accident at a nuclear reactor operating at power, resulting in a large 
fission product release and requiring significant resource expenditures 
to stabilize the reactor and ultimately decontaminate and cleanup the 
site.
    These cost estimates were developed based on the spectrum of 
postulated accidents for an operating nuclear reactor. Those costs were 
derived from the consequences of a release of radioactive material from 
the reactor. Although the risk of an accident at an operating reactor 
is very low, the consequences onsite and offsite can be significant. In 
an operating plant, the high temperature and pressure of the reactor 
coolant system (RCS), as well as the inventory of relatively short-
lived radionuclides, contribute to both the risk and consequences of an 
accident. 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. As a result, 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 
shipment offsite of the SONGS stored 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.

[[Page 2682]]

    During reactor decommissioning, the largest radiological risks are 
associated with the storage of spent fuel onsite. In its October 22, 
2015, exemption request, SCE discusses both design-basis and beyond 
design-basis events involving irradiated fuel stored in the SFPs. The 
licensee determined that there are no possible design-basis events at 
SONGS that could result in an offsite radiological release exceeding 
the limits established by the U.S. Environmental Protection Agency's 
(EPA) early-phase Protective Action Guidelines (PAGs) of 1 rem 
(roentgen equivalent man) at the exclusion area boundary, as a way to 
demonstrate that any possible radiological releases would be minimal 
and not require precautionary protective actions (e.g., sheltering in 
place or evacuation). The staff evaluated the radiological consequences 
associated with various decommissioning activities, and design basis 
accidents at SONGS, in consideration of SONGS's permanently shut down 
and defueled status. The possible design-basis accident scenarios at 
SONGS have greatly reduced radiological consequences. Based on its 
review, the staff concluded that no reasonably conceivable design-basis 
accident exists that could cause an offsite release greater than the 
EPA PAGs.
    The only incident that might lead 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 hypothetical beyond-design-basis accidents that 
could result in a 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 damage or offsite 
radiological release.
    The Commission has previously authorized a lesser amount of onsite 
financial protection, based on this analysis of the zirconium fire 
risk. 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), the staff recommended changes to the power reactor 
financial protection regulations that would allow licensees to lower 
onsite insurance levels to $50 million upon demonstration that the fuel 
stored in the SFP can be air-cooled. In its Staff Requirements 
Memorandum to SECY-96-256, dated January 28, 1997 (ADAMS Accession No. 
ML15062A454), the Commission supported the staff's recommendation that, 
among other things, would allow permanently shutdown power reactor 
licensees to reduce commercial onsite property damage insurance 
coverage to $50 million when the licensee was able to demonstrate the 
technical criterion that the spent fuel could be air-cooled if the 
spent fuel pool was drained of water. The 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); and Zion Nuclear Power 
Station, published in the Federal Register on December 28, 1999 (64 FR 
72700)). These prior exemptions were based on these licensees 
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 NRC 
staff discussed additional information concerning SFP zirconium fire 
risks at decommissioning reactors and associated implications for 
onsite property damage insurance. Providing an analysis of when the 
spent fuel stored in the SFP is capable of air-cooling is one measure 
that can be used to demonstrate that the probability of a zirconium 
fire is exceedingly low. However, the staff has more recently used an 
additional analysis that bounds 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 
heatup.
    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, there is reasonable assurance that after August 2014, the 
SONGS spent fuel will remain at temperatures far below those associated 
with a significant 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.''
    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 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.

[[Page 2683]]

    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 
SFPs 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 staff's basis as to why it considers $50 million to be an 
adequate level of onsite property damage insurance for a 
decommissioning reactor, once the spent fuel in the SFP is no longer 
susceptible to a zirconium fire, is provided in SECY-96-256. The staff 
has postulated that there is still a potential for other radiological 
incidents at a decommissioning reactor that could result in significant 
onsite contamination besides a zirconium fire. In SECY-96-256, the NRC 
staff cited the rupture of a large (~450,000 gallon) liquid radioactive 
waste storage tank containing slightly radioactive water, causing soil 
contamination and potential groundwater contamination, as the most 
costly postulated event to decontaminate and remediate (other than a 
SFP zirconium fire). The postulated large liquid radwaste storage tank 
rupture event was determined to have a bounding onsite cleanup cost of 
approximately $50 million.
    The NRC staff has determined that the licensee's proposed reduction 
in onsite property damage insurance coverage to a level of $50 million 
is consistent with SECY-96-256 and subsequent insurance considerations, 
resulting from additional zirconium fire risks, as discussed in SECY-
00-0145 and SECY-01-0100. 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. As previously stated, the staff concluded that as of October 
12, 2014, sufficient irradiated fuel decay time has elapsed at SONGS to 
decrease the probability of an onsite radiological release from a 
postulated zirconium fire accident to negligible levels. In addition, 
the licensee's proposal to reduce onsite insurance to a level of $50 
million is consistent with the maximum estimated cleanup costs for the 
recovery from the rupture of a large liquid radwaste storage tank. 
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 independent spent fuel storage installation (ISFSI) by the 
end of 2019, and the probability of an initiating event that would 
threaten pool integrity occurring before that time is extremely low, 
which further supports the conclusion that the zirconium fire risk is 
negligible.

The Exemption Is Authorized by Law

    In accordance with 10 CFR 50.12, the Commission may grant 
exemptions from the regulations in 10 CFR part 50 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 onsite property damage insurance 
requirements of 10 CFR 50.54(w)(1) is authorized by law.

The Exemption Will Not Present an Undue Risk to Public Health and 
Safety

    The onsite property damage insurance requirements of 10 CFR 
50.54(w)(1) were established to provide financial assurance that 
following a significant nuclear incident, onsite conditions could be 
stabilized and the site decontaminated. The requirements of 10 CFR 
50.54(w)(1) and the existing level of onsite insurance coverage for 
SONGS are predicated on the assumption that the reactor is operating. 
However, SONGS is a permanently shutdown and defueled facility. The 
permanently defueled status of the facility has resulted in a 
significant reduction in the number and severity of potential 
accidents, and correspondingly, a significant reduction in the 
potential for and severity of onsite property damage. The proposed 
reduction in the amount of onsite insurance coverage does not impact 
the probability or consequences of potential accidents. The proposed 
level of insurance coverage is commensurate with the reduced risk and 
reduced cost consequences of potential nuclear accidents at SONGS. 
Therefore, the NRC staff concludes that granting the requested 
exemption will not present an undue risk to the health and safety of 
the public.

[[Page 2684]]

The Exemption Is Consistent With the Common Defense and Security

    The proposed exemption would not eliminate any requirements 
associated with physical protection of the site and would not adversely 
affect SCE's ability to physically secure the site or protect special 
nuclear material. Physical security measures at SONGS are not affected 
by the requested exemption. Therefore, the proposed exemption is 
consistent with the common defense and security.

Special Circumstances

    Under 10 CFR 50.12(a)(2)(ii), special circumstances are present if 
the application of the regulation in the particular circumstances would 
not serve the underlying purpose of the rule or is not necessary to 
achieve the underlying purpose of the rule. The underlying purpose of 
10 CFR 50.54(w)(1) is to provide reasonable assurance that adequate 
funds will be available to stabilize conditions and cover onsite 
cleanup costs associated with site decontamination, following an 
accident that results in the release of a significant amount of 
radiological material. Because SONGS is permanently shut down and 
defueled, it is no longer possible for the radiological consequences of 
design-basis accidents or other credible events at SONGS to exceed the 
limits of the EPA PAGs at the exclusion area boundary. The licensee has 
performed site-specific analyses of highly unlikely, beyond-design-
basis zirconium fire accidents involving the stored irradiated fuel in 
the SFPs. The analyses show that after October 12, 2014, the 
probabilities of such an accident are minimal. The NRC staff's 
evaluation of the licensee's analyses confirm this conclusion.
    The NRC staff also finds that the licensee's proposed $50 million 
level of onsite insurance is consistent with the bounding cleanup and 
decontamination cost, as discussed in SECY-96-256, to account for 
hypothetical rupture of a large liquid radwaste tank at the SONGS site, 
should such an event occur. The staff notes that the SONGS technical 
specifications provide controls for unprotected outdoor liquid storage 
tanks to limit the quantity of radioactivity contained in these tanks, 
in the event of an uncontrolled release of the contents of these tanks. 
Therefore, the staff concludes that the application of the current 
requirements in 10 CFR 50.54(w)(1) to maintain $1.06 billion in onsite 
insurance coverage is not necessary to achieve the underlying purpose 
of the rule for the permanently shutdown and defueled SONGS reactors.
    Under 10 CFR 50.12(a)(2)(iii), special circumstances are present 
whenever compliance would result in undue hardship or other costs that 
are significantly in excess of those contemplated when the regulation 
was adopted, or that are significantly in excess of those incurred by 
others similarly situated. The NRC staff concludes that if the licensee 
was required to continue to maintain an onsite insurance level of $1.06 
billion, the associated insurance premiums would be in excess of those 
necessary and commensurate with the radiological contamination risks 
posed by the SONGS site now that it has entered decommissioning. In 
addition, such insurance levels would be significantly in excess of 
other decommissioning reactor facilities that have been granted similar 
exemptions by the NRC.
    The NRC staff finds that compliance with the existing rule would 
result in an undue hardship or other costs that are significantly in 
excess of those contemplated when the regulation was adopted and are 
significantly in excess of those incurred by others similarly situated. 
Therefore, the special circumstances required by 10 CFR 50.12(a)(2)(ii) 
and 10 CFR 50.12(a)(2)(iii) exist for the proposed exemption from the 
onsite property damage insurance requirements of 10 CFR 50.54(w)(1).

Environmental Considerations

    The NRC approval of an exemption to 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 further 
analysis under 10 CFR 51.22(c)(25). 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 onsite property damage insurance at the decommissioning San 
Onofre Nuclear Generating Station, Units 1, 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 onsite 
property damage 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 
50.12(a), the exemption from 10 CFR 50.54(w)(1) is authorized by law, 
will not present an undue risk to the public health and safety, and is 
consistent with the common defense and security. In addition, special 
circumstances are present. Therefore, the Commission hereby grants SCE 
an exemption from the requirements of 10 CFR 50.54(w)(1), to permit the 
licensee to reduce its onsite property damage insurance to a level of 
$50 million.
    This exemption is effective upon issuance.


[[Page 2685]]


    Dated at Rockville, Maryland, on January 10, 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. 2018-00715 Filed 1-17-18; 8:45 am]
 BILLING CODE 7590-01-P