Discussion
of Issues
Issue 1:
What are the current total estimated costs to
decommission Florida Power & Light Company’s Turkey Point Nuclear Units 3
and 4, and St. Lucie Nuclear Units 1 and 2, valued in 2020 dollar terms?
Recommendation:
Staff recommends the Commission find that FPL’s
total current estimated cost valued in 2020 dollars for decommissioning Turkey
Point Nuclear Units 3 and 4 of $1,361,192,000, and for St. Lucie Nuclear Units
1 and 2 of $1,745,462,000 is reasonable. (Smith II, Kunkler, Barrett, Shrum)
Staff Analysis:
FPL filed an updated site-specific decommissioning
cost study on December 14, 2020, in accordance with Rule 25-6.04365, F.A.C. The
purpose of this study is to recognize developments and changes impacting decommissioning
cost estimates of the company’s nuclear units, and to also consider such
factors as improvements in technology, regulatory changes that have transpired
since FPL’s last nuclear decommissioning study and review in 2015, and any
relevant additional updates and information.
Operating License
FPL’s Turkey
Point Nuclear Generating Station (Turkey Point) began service in 1972 with the
commissioning of Unit No. 3, while Unit No. 4 achieved operational status one
year later in 1973. The St. Lucie Nuclear Power Plant (St. Lucie) began service
in 1976 with Unit 1, while Unit 2 began service approximately seven years later
in 1983. All four units were originally licensed by the NRC to operate for a
maximum of forty years. From 2000-2001, FPL filed applications with the NRC for
twenty-year operating license extensions for all four units. In 2002, the NRC
approved FPL’s license extension request for TP3 and TP4, while approving
extensions for SL1 and SL2 in 2003. In 2018, FPL filed a second application to
extend the operating license for TP3 and TP4 an additional twenty years.
That extension was granted by the NRC in 2019. Accordingly, all four units’
investment amounts will continue to be included in rate base until expiration
of their respective extended operating licenses, or until such time as FPL
decides to retire the units. The operating license expiration dates for TP3 and
TP4 are July 2052 and April 2053, respectively. The operating license
expiration dates for SL1 and SL2 are March 2036 and April 2043, respectively.
The current cost study assumes that each unit will operate throughout its
extended license period.
Decommissioning Methods
The NRC
accepts the following three decommissioning methods: prompt removal/dismantling
(DECON), mothballing with delayed dismantling (SAFSTOR), and entombment
(ENTOMB). Consistent with the 2015
study, the current study continues to utilize a combination of DECON and
SAFSTOR decommissioning methods. FPL selected DECON for the Turkey Point units
because this method provides the lowest cost and employs those individuals
familiar with the nuclear facility to support the dismantling effort. Further,
DECON eliminates a potential long-term safety hazard and relieves the company
of the long-term obligation and liability for continuing maintenance of the
property. For the St. Lucie units, due to the timing difference in operating
license expiration dates, SAFSTOR is utilized for SL1 with an approximate
seven-year dormancy period, followed by prompt dismantlement (DECON) of both
SL1 and SL2 concurrently. This allows for a one-time mobilization of contractor
personnel and equipment by mothballing SL1 until the expiration of SL2’s
license.
The company
currently projects that the SNF will remain at each plant site after the majority
of nuclear facilities have been removed. Staff notes that in order for a
nuclear plant to be considered fully-decommissioned, no on-site SNF may be
present. The company is projecting that the final fuel assemblies will be
removed from Turkey Point by 2073, and by 2071 for St. Lucie.
Towards the
end of the decommissioning process, or at least two years prior to the expected
license termination dates of approximately 2074 for Turkey Point, and 2073 for
St. Lucie, FPL is required to submit to the NRC a License Termination Plan
(LTP). Once the physical decommissioning process (including removal of SNF and
storage facilities) is complete, the NRC will determine if site remediation has
been performed in accordance with the LTP; and if envisioned by the LTP, the
site will be released (by the NRC) for unrestricted use.
Staff notes that FPL’s current decommissioning study assumes site remediation
to the level of unrestricted use. At this point, the nuclear license will be
terminated, thus concluding NRC oversight.
Decommissioning Cost Estimates
FPL commissioned EnergySolutions, LLC (EnergySolutions)
to develop the decommissioning cost estimates for its 2020 study. To produce
its decommissioning cost estimates, EnergySolutions
utilizes the decommissioning cost model based on the fundamentals laid out in
the Atomic Industrial Forum/National Environmental Studies Project Report
AIF/NESP-036, “Guidelines for Producing Commercial Nuclear Power Plant
Decommissioning Cost Estimates.” The
report was prepared in accordance with the NRC Regulatory Guide 1.202,
“Standard Format and Content of Decommissioning Cost Estimates for Nuclear
Power Reactors.” EnergySolutions
states that they based their estimates on proven decommissioning technologies. EnergySolutions
further states that their cost estimates are in compliance with current
regulatory requirements.
The major
decommissioning cost drivers/centers in FPL’s 2020 study are: program
management (staffing/labor), insurance and regulatory fees, site security,
spent fuel management, waste packaging, transportation, and disposal, site
characterization and license termination surveys, energy costs, decontamination
and removal-related activities (engineering, demolition, and support equipment),
and low-level radioactive waste inspection fees. Consequently, these cost
drivers, with the exception of decontamination and removal-related activities,
also reflect the greatest dollar value changes from the 2015 study. These
specific cost drivers and the changes from the 2015 study are discussed
individually further in staff’s recommendation.
The cost
estimates are based on a number of assumptions, including regulatory
requirements, low-level waste disposal practices, high-level radioactive waste
management options, project contingencies, and site restoration requirements.
The estimates include a cooling period (in fuel pool) for the SNF once plant
operations have ceased and the reactors are permanently de-fueled. After the
cooling period has concluded, the SNF will be transferred directly to DOE or to
an on-site independent spent fuel storage installation (ISFSI) for interim
storage. The decommissioning cost estimates include the dismantling of
facilities, site structures, ISFSI, and site restoration.
Site-specific
plant systems and building inventories were used to develop the decommissioning
cost estimates. These plant systems and building inventories are the same as
those used in the 2015 Study, because EnergySolutions
determined that no major installations or removals had taken place since 2015.
EnergySolutions utilizes proprietary
unit cost factors, historical data, and project execution strategies to produce
several outputs. These outputs include waste volumes and classification,
required man-hours, and estimated costs.[15]
Unit factors for concrete removal, steel removal, and cutting costs were
developed and valued using local labor rates.
The total
estimated cost to decommission Turkey Point has decreased by approximately 23.4
percent from the 2015 study. The total estimated costs to decommission St.
Lucie decreased by 3.4 percent during the same timeframe. Tables 1-1 and 1-2 below
present the cost comparisons from 2015 to 2020 by major category using the
selected methods of decommissioning. The large decrease in License Termination
costs are explained in more detail in the Site Characterization and License
Termination Surveys section and the Florida Low Level Radioactive Waste
Inspection Fee section below. Staff notes that the two vintages of cost figures
shown below are unadjusted (nominal) and presented as they were in the year of
study, or 2015 dollars and 2020 dollars, respectively.
|
Table 1-1
|
|
Turkey Point
Decommissioning Cost Comparison 2015-2020
|
|
Plant Turkey Point
Units 3 and 4
|
2015 Study ($1000s)**
|
2020 Study ($1000s)
|
Percent Difference
|
Annual Percent Difference***
|
|
|
License Termination
|
1,204,251
|
1,018,355
|
-15.4
|
-3.3
|
|
|
Spent Fuel Management
|
478,765
|
282,949
|
-40.9
|
-10
|
|
|
Site Restoration
|
94,289
|
59,888
|
-36.5
|
-8.7
|
|
|
Total*
|
1,777,305
|
1,361,192
|
-23.4
|
-5.2
|
|
Source: Order No.PSC-2016-0250-PAA-EI and FPL’s 2020
Decommissioning Study
*May not add due to rounding
**Amounts
are different than those reflected in the 2020 study. Staff has used the costs
that were approved in Order No. PSC-16-0250-PAA-EI.
*** Represents the annual percentage increase over 5
years
|
Table 1-2
|
|
St. Lucie
Decommissioning Cost Comparison 2015-2020
|
|
Plant St Lucie
Units 1 and 2
|
2015 Study ($1000s)
|
2020 Study ($1000s)
|
Percent Difference
|
Annual Percent Difference**
|
|
|
License Termination
|
1,208,237
|
1,254,740
|
3.8
|
0.8
|
|
|
Spent Fuel Management
|
486,705
|
427,313
|
-12.2
|
-2.6
|
|
|
Site Restoration
|
111,537
|
63,409
|
-43.1
|
-10.7
|
|
|
Total*
|
1,806,479
|
1,745,462
|
-3.4
|
-0.7
|
|
Source: FPL’s 2015 and 2020 Decommissioning Studies
*May not add due to rounding
**Represents
the annual percentage increase over 5 years
On an
individual unit basis, the current estimated costs in 2020 dollars for the
decommissioning of FPL’s nuclear plants are as follows: TP3 equals
$652,645,000, TP4 equals $708,547,000, SL1 equals $923,401,000, and SL2 equals
$822,060,000. Staff notes that due to SL2 being jointly-owned with the Orlando
Utilities Commission and Florida Municipal Power Agency (Joint Owners), FPL is
responsible for approximately 86.45 percent of the unit’s total decommissioning
cost. The joint owners fund the remaining amount. Staff further notes that the
Joint Owners maintain separate (from FPL) external sinking funds for satisfying
both their decommissioning cost obligations and the NRC’s financial assurance
rule. The funding level status of the Joint Owners’ NDTs as of March 25, 2019
are sufficiently above the NRC’s required minimum.
As discussed
above, all costs are ultimately classified as those relating to the activities
of License Termination, Spent Fuel Management, or Site Restoration. However,
these major cost classifications are comprised of individual cost elements.
Below, staff analyzes estimated cost variances between FPL’s current and 2015
study by these individual elements.
Program Management
Program
management is the largest single element of the overall decommissioning cost
estimate. The program management cost
element primarily captures costs relating to the staffing (both plant personnel
and contractors) and organization during the decommissioning process. This
includes overall project oversight as well as management of day-to-day
activities. Program management costs decreased by approximately 27.3 percent,
or $156.2 million for Turkey Point, and 9.5 percent, or $53.3 million for St.
Lucie from the company’s prior study in 2015.
A change in the staffing plan models is the primary factor for the lower
costs.
Insurance and Regulatory Fees
In the 2015
study, TLG assumed a large one-time reduction to the Nuclear Property Insurance
premiums at the time the plant shutdown.
EnergySolutions however, assumes
several smaller reductions to the premiums at specific milestones that take
place throughout the decommissioning process. Due to the timing differences in
these milestone-specific reductions of premiums, the comparative insurance and
regulatory fees category costs increased by $29.0 million, or 62.5 percent for
Turkey Point and $54.4 million, or 115.2 percent for St. Lucie from the company’s
2015 study.
Security
The 2020
study assumes lower security staffing levels than those in the 2015 Study.
These reduced levels are due, in part, to a reduction in staffing once the SNF
is removed from the spent fuel pool. Further, due to the 20-year subsequent
license extension at the Turkey Point site, it is assumed that the DOE will
begin to pick up the fuel before the decommissioning process begins. As a
result, EnergySolutions projects that
the ISFSI will be in operation for a shorter period of time which reduces the
need for security personnel. Security costs have decreased by approximately
$125.5 million, or 54.3 percent for Turkey Point, and by $32.3 million, or by
17.8 percent for St. Lucie from the company’s 2015 study.
Spent Fuel Management (Direct
Expenditures)[18]
The Nuclear
Waste Policy Act of 1982 (NWPA) committed the DOE to accept and dispose of SNF
and high-level radioactive waste (HLRW). The acceptance and disposal of SNF and
HLRW by the DOE was to begin by January 31, 1998, as stipulated under its
Standard Disposal Contract with waste generators. With respect to a final SNF
repository, the DOE submitted its license application to the NRC on June 3,
2008, seeking authorization to construct a storage facility located at Yucca
Mountain, Nevada. The NRC formally docketed the DOE’s license application on
September 8, 2008, triggering a three-year deadline, with a possible one-year
extension, set by Congress for the NRC to decide whether to authorize
construction. The application review was suspended in 2011, which generated
legal action in the United States Federal Court of Appeals. In August 2013, the US Court of Appeals for
the District of Columbia Circuit issued a Writ of Mandamus ordering the NRC to
comply with federal law and resume its review of DOE's Yucca Mountain
repository license application.
As part of its resumed review, the NRC published the final volumes of its
formal Safety Evaluation Report (SER) of the project in January 2015, as well
as an Environmental Impact Statement supplement in May 2016.
However, facing funding issues and strong state and regional opposition, the
adjudicatory process remains unclear. Staff notes that further actions and
formal proceedings must occur before a licensing decision can be made and that
substantial uncertainty remains as to the operational prospects of the Yucca
Mountain repository.
Separate
and apart from the Yucca Mountain project and NRC reviews, in January 2013, the DOE released
its “Strategy for Management and Disposal of Used Nuclear Fuel and High-Level
Radioactive Waste,” which serves as a statement of Administration policy
regarding the disposition of used nuclear fuel and high-level radioactive
waste.
Under this strategy, the DOE plans to make “demonstrable progress on the siting
and characterization of repository sites to facilitate the availability of a
geologic repository by 2048.”
Staff understands that the ultimate purpose of this policy direction
and approach is to establish a number of high-level nuclear waste sites
specializing in specific classes of waste. However, to date, no national final
repository has been identified and fully licensed to receive commercial SNF.
The NRC requires that licensees establish a program
to manage and provide funding for the caretaking of all spent fuel at the
reactor site until title of the fuel is transferred to the DOE.
Accordingly, FPL has incorporated costs relating to the storage and management
of SNF generated at the Turkey Point and St. Lucie sites into its current
study. However, due to the non-performance by the DOE of terms contained in the
Standard Disposal Contract with FPL, litigation was brought by the company.
Ultimately, in 2009, FPL entered into a settlement agreement with the federal
government for damages incurred relating to SNF storage and management.
As part of the settlement agreement, the company receives annual payments to
cover the costs incurred for managing and storing SNF that it would otherwise
not have incurred if the original terms of its Standard Disposal Contract with
the DOE had been met. FPL is currently projecting that SNF management costs
incurred before years 2059 at Turkey Point and 2063 at St. Lucie, are eligible
for reimbursement. Staff notes that the company’s expenditures for storing and
managing SNF that have already been reimbursed by the federal government
through 2017 equal $282,255,686.
Reimbursement amounts for calendar years 2018 and 2019 are currently pending as
the DOE has rejected an estimated $4.8 million in costs incurred by FPL in
those years. FPL is disputing DOE’s determination.
Assumptions relating to FPL’s spent fuel management plan in its
current decommissioning study include: (1) a DOE repository for
disposing of commercial SNF will be operational and available in 2030, (2) SNF transfers to a
federal facility will begin in 2031 for Turkey Point and 2033 for St. Lucie,
and (3) the spent fuel acceptance rate is consistent with the 2004
“Acceptance Priority Ranking & Annual Capacity Report.” Accounting for the
aforementioned assumptions, transfer of all SNF from Turkey Point to the DOE
would be completed by the end of 2073. Transfer of all SNF from St. Lucie to
the DOE would be completed by 2071.
Total estimated direct costs for spent fuel management decreased
by 67.0 percent, or $193.8 million, for Turkey Point and 49.2 percent, or
$138.3 million, for St. Lucie from the company’s 2015 study. This decrease is
primarily due to the 20-year reduction of the ISFSI Operating Period
post shutdown of Turkey Point Unit 4, a reduction in the quantity of spent fuel
canisters required to be purchased, as well as a 25 percent savings for
container material and equipment due to bulk purchasing. Staff notes that the
2015 study included costs for an ISFSI expansion, whereas the 2020 study does
not.
Waste Packaging, Transportation, and
Disposal
The
contaminated and activated material generated during a nuclear reactor decontamination
and dismantling process is classified as low-level radioactive waste (LLRW).
LLRW is further classified based on levels of radioactivity (lowest-to-highest)
as either Class A, B, C, or Greater than Class C (GTCC). The majority of LLRW
assumed for disposal in FPL’s analysis, in terms of both volume and mass, is
Class A waste.
For LLRW
disposal cost estimation and planning purposes, FPL has a Life of Plant
Agreement with EnergySolutions to
dispose of Class A nuclear waste at EnergySolutions’
facility in Clive, Utah. EnergySolutions’
facility in Clive does not have a license to dispose of Class B or C
radioactive waste, which is more highly radioactive than Class A. On November
10, 2011, Waste Control Specialists (WCS) opened the Texas Low-Level
Radioactive Waste Disposal Compact Facility in Andrews County, Texas. This
facility is licensed to dispose of Class A, B, and C low-level radioactive
wastes. For purposes of FPL’s 2020 study, Classes B and C waste are assumed to be
shipped and disposed of at the WCS facility.
The total
estimated cost of Waste Packaging, Transportation & Disposal (Class
A, B, & C) increased by $35.7
million, or 14.4 percent for Turkey Point, and $155.1 million, or 54.4 percent
for St. Lucie, from the company’s 2015 study. These increases are
primarily due to the additional debris/storm drain added as a result of the methodology
change discussed below in the Site Characterization section.
The total estimated cost of Waste
Packaging, Transportation & Disposal (GTCC) increased by $5.4 million, or 16.7 percent for Turkey Point, and $22.2
million, or 69.4 percent for St. Lucie from the company’s 2015 study. These
increases are primarily due to the assumed escalation of the 2015 disposal
costs, as well as differing methodologies in how the transportation and
associated packaging costs of the GTCC material are accounted for between TLG
and EnergySolutions.
Decontamination & Removal
Removal
costs primarily capture costs related to the disassembly of plant components
and the placement of those components into a central area or zone for
processing/disposal, controlled removal of contaminated and activated concrete,
remediation of any hazardous waste, excavation of soil, and demolition of site
structures. Removal costs increased by approximately 19.3 percent, or $39.7 million
for Turkey Point, and 3.8 percent, or $9.3 million for St. Lucie from the
company’s prior 2015 study. Escalation is the main reason for this increase.
However, the increase is mitigated by a change in methodology from the 2015
Study.
Contingency Allowance
The practice of budgeting a cost contingency allowance is common in
large-scale construction and demolition projects. Such project cost estimates generally include
a baseline cost estimate, which is formulated based on ideal conditions, and a
contingency allowance. A contingency allowance is a specific provision for
unforeseeable elements and associated costs within the defined project scope.
For large, complex, and long-running projects such as nuclear plant decommissioning,
unforeseeable events are likely to occur; therefore, a contingency allowance is
necessary.
For each of
FPL’s four nuclear units, EnergySolutions
applied specific contingency allowances to each individual unit’s
decommissioning cost estimates on a line item basis to produce a weighted
average contingency value. These
specific line item contingency allowances are based on guidelines developed by the Atomic Industrial
Forum (now Nuclear Energy Institute) in its report "Guidelines for
Producing Commercial Nuclear Power Plant Decommissioning Cost Estimates,”
AIF/NESP-036. Dividing the sum (dollar
value) of the line item contingency allowances by the total decommissioning
costs for each unit respectively results in the proposed weighted average
contingency percentages for the 2020 study. The contingency values for all four
nuclear units have been reduced from FPL’s prior study as displayed in the
table below:
|
Table
1-3
|
|
Weighted
Average Contingency Factors
|
|
Nuclear Unit
|
2015 Study
|
2020 Study
|
|
TP3
|
17.46%
|
14.26%
|
|
TP4
|
17.41%
|
14.54%
|
|
SL1
|
17.37%
|
14.16%
|
|
SL2
|
18.04%
|
14.45%
|
Source: FPL’s
2015 and 2020 Decommissioning Studies
Due to the
number of large-scale decommissioning projects conducted by EnergySolutions and the industry as a whole,
the costs involved are more well-known. Therefore, the 2020 study reflects lower
contingency values than were reflected in the 2015 study. Staff believes the
contingency provisions presented in FPL’s 2020 Decommissioning Study, which are
based on industry standards and guidelines, as discussed above, are reasonable.
Site Characterization and License
Termination Surveys
Site characterization
and survey cost estimates have decreased substantially from the prior study.[33] Site characterization
and survey costs decreased 46.0 percent, or $17.2 million, at Turkey Point, and
52.4 percent, or $22.6 million at St. Lucie. The primary driver of the cost
decrease is a change in methodology that EnergySolutions employs regarding the removal of certain buildings as
radiological instead of clean. EnergySolutions’
methodology minimizes inefficient decontamination activities, as well as
reducing personal exposure, increases schedule certainty and general site
safety. While this change in methodology does cause an increase in assumed debris
removal, those additional costs are more than offset by this methodology change.
Energy Costs
Energy costs
have been reduced significantly from the 2015 study. These costs represent
electricity usage at the decommissioning site to support decommissioning
activities. The 2020 study bases the energy costs on the natural gas cost
rather than the heavy oil energy usage cost used in the 2015 study. This
results in a decrease of 75.9 percent, or $30.8 million at Turkey Point, and
77.2 percent, or $36.1 million at St. Lucie.
Florida Low Level Radioactive Waste
Inspection Fee
Florida Low
Level Radioactive Waste Inspection Fee estimates have increased since the 2015
cost study. This increase is driven by
the methodology change discussed above in the Site Characterization section.
The change in methodology generates a larger volume of low level radioactive
debris, consequently causing an increase in the amount of the inspection fee.
This results in an increase of 407.7 percent, or $4.4 million for Turkey Point,
and 103.3 percent, or $5.3 million for St. Lucie.
Conclusion
Staff believes FPL, in estimating current decommissioning
costs for Turkey Point and St. Lucie as discussed above, appropriately recognized
and reflected factors including new/updated information, improvements in
technology, and regulatory changes that have transpired during the last five
years. Thus, based on information contained in FPL’s 2020 Decommissioning Study
and the associated data request responses, staff recommends the Commission find
that FPL’s total current estimated cost valued in 2020 dollars for decommissioning
TP3 and TP4 of $1,361,192,000, and for SL1 and SL2 of $1,745,462,000 is
reasonable.
Issue 2:
What are the appropriate annual accruals, in equal
dollar amounts, necessary to recover the future decommissioning costs of
Florida Power & Light Company’s St. Lucie Nuclear Units 1 and 2, and Turkey
Point Nuclear Units 3 and 4?
Recommendation:
Staff recommends the appropriate jurisdictional
accrual amounts necessary to recover future decommissioning costs over the
remaining life of each nuclear power plant remain at the currently-authorized zero
dollars per year as last approved by Order No. PSC-16-0250-PAA-EI. (Higgins)
Staff Analysis:
The
purpose of this issue is to determine the appropriate annual accrual amounts to
be charged to customers for satisfying the future cost of decommissioning FPL’s
nuclear power plants. As mentioned in staff’s recommendation statement, the
currently-authorized overall annual decommissioning accrual is set to zero
dollars per year (suspended) as last approved by Order No. PSC-16-0250-PAA-EI.
Staff notes the annual decommissioning accrual has been continuously suspended
since September of 2005.
In general,
to determine the annual accrual, the cost of decommissioning is first estimated
in current dollars and then escalated to its future value using specific cost
escalation assumptions. The question becomes how much revenue needs to be
collected from current ratepayers in equal monthly payments, earning at a given
rate, to equal the future value of decommissioning costs. The determination of
the annual accrual then resembles an annuity calculation. The specific cost
escalation rates and the assumed funds earning rate are discussed in greater
detail later in this issue. However, in considering current or “on hand”
funding levels, the very need for an annual decommissioning accrual is
determined by a similar process. To determine the need for an annual
decommissioning accrual, the assumed funds earnings rate is used to develop the
present value of the future funding requirement. A comparison is then made
between the present value of the future funding requirement and the current
funds on hand including certain assumed future tax implications. The results of
this analysis will be the present value of the net funding requirement (which
includes the scenario/result of no current additional ratepayer funding being
required).
The results
of the annual accrual analysis presented with FPL’s 2020 study indicates that
no new funding from customers (positive annual accrual for nuclear plant
decommissioning) is required at this time. Staff notes that unless ordered
otherwise, the continued adequacy of FPL’s decommissioning accrual will be
reviewed by the Commission at least once every five years as required by Rule
25-6.04365(3), F.A.C.
Current Cost of
Decommissioning
As discussed in detail in Issue 1,
the current overall system decommissioning cost estimates included in FPL’s
2020 study are shown in Table 2-1. The estimated costs are as of December 31,
2020.
Table 2-1
Current Decommissioning
Cost Estimates by Plant
|
Nuclear Unit
|
Estimated Decommissioning Costs
(2020 Dollars)
|
|
St. Lucie Unit No. 1
|
$923,401,492
|
|
St. Lucie Unit No. 2
|
$822,060,215
|
|
Turkey Point Unit No. 3
|
$652,645,521
|
|
Turkey Point Unit No. 4
|
$708,546,759
|
|
Total
|
$3,106,653,987
|
Source:
FPL’s 2020 Decommissioning Study, Support Schedule G.
Cost Escalation Rates
Specific
cost escalation rates are used to convert the current estimated decommissioning
cost to the future decommissioning cost for each nuclear unit. The current
decommissioning cost estimates are delineated into five summary cost
categories. These categories are: labor, equipment/materials, transportation,
LLRW disposal, and other. The current decommissioning cost estimates are escalated
to future values at the respective license termination dates for each nuclear
unit using separate inflation forecasts applicable to the aforelisted cost categories.
With the exception of burial rates, FPL relied upon “The U.S. Economy, The
30-Year Outlook, August 2020,” published by Global Insight (a Division of IHS
Markit, Ltd.) as the source for its specific escalation forecasts. FPL’s escalation
rate for burial is based on company-specific data. Staff notes the estimated
burial costs contained in the 2020 study are assumed to escalate at an annual
rate of 2.0 percent. The specific year-by-year escalation rates for all cost
categories are shown on page one of Schedule G (for both St. Lucie and Turkey
Point) of the 2020 study.
The methodology
used by FPL in the 2020 study to determine the assumed average escalation rates
is consistent with the methodology used in its prior or 2015 study. The plant-specific
average annual escalation rates used in the 2015 study and the 2020 study to
convert the current decommissioning costs to the future decommissioning costs
for each nuclear unit are shown in Table 2-2 below:
|
Table 2-2
|
|
Average
Annual Escalation Rate Comparison
|
|
Nuclear Unit
|
2015 Study
|
2020 Study
|
|
St. Lucie Unit No. 1
|
3.11%
|
3.15%
|
|
St. Lucie Unit No. 2
|
3.21%
|
3.19%
|
|
Turkey Point Unit No. 3
|
3.23%
|
3.15%
|
|
Turkey Point Unit No. 4
|
3.20%
|
3.13%
|
Sources: FPL’s 2015 and 2020 Decommissioning
Studies, Support Schedule G.
Future Cost of
Decommissioning
The
estimates of the total future cost to decommission each nuclear unit are based
on the current costs to decommission, operating license termination and release
dates, and the specific cost escalation rates. The estimated future costs to
decommission each nuclear unit at their respective assumed license release dates
are listed in Table 2-3. Staff notes the cost figures listed below are on a
system basis and net of the estimated U.S. Department of Energy reimbursements
for costs incurred related to the on-site storage of spent nuclear fuel as
previously discussed in Issue 1.
|
Table 2-3
|
|
Future
Cost of Decommissioning
|
|
Nuclear Unit
|
Future Net Decommissioning Costs
(Nominal)
|
|
St. Lucie Unit No. 1
|
$1,699,371,718
|
|
St. Lucie Unit No. 2
|
$1,661,014,402
|
|
Turkey Point Unit No. 3
|
$1,860,206,656
|
|
Turkey Point Unit No. 4
|
$2,039,087,009
|
|
Total
|
$7,259,679,785
|
Source: FPL’s 2020
Decommissioning Study, Support Schedule G.
Current Funding
The NRC requires
that licensees provide reasonable financial assurance that funds will be
available for decommissioning through one of three methods: (a) prepayment
prior to the start of operation, (b) an external sinking fund, or (c) surety,
insurance or other guarantee method.
The company provides for financial assurance for plant decommissioning through
its nuclear decommissioning trust funds which are held in trust with The Bank
of New York Mellon Corporation (BNY Mellon) as trustee. This financial
provisioning and trust arrangement constitutes an external sinking fund. An
external sinking fund is defined as a: “fund established and maintained by
setting funds aside periodically in an account segregated from licensee assets
and outside the licensee’s administrative control in which the total amount of
funds would be sufficient to pay decommissioning cost at the time termination
of operation is expected.”
The current
projected nuclear decommissioning trust (NDT) balances and the estimated
present values of funding requirements on a jurisdictional basis are shown in
Table 2-4 below. Due to the 2020 study’s preparation and filing timeframe, the
last two months of fund earnings data presented in the analysis were estimated.
The NDT balances represent actual data through October 2020, and projected data
for the last two months of the year, or November and December of 2020. Staff
notes that generally for the purposes of an annual decommissioning accrual, a
fund balance greater than or equal to the estimated present value of the future
funding requirement at the date of study indicates the current funding level is
sufficient, and that no new ratepayer money is presently required.
|
Table 2-4
|
|
Current
Total Fund Balances and Estimated Present Values of Future Funding
Requirements
|
|
Nuclear Unit
|
Projected Fund Balance
at 12/31/2020
(Jurisdictional)
|
Estimated Present Value of Future Funding
Requirements
at 12/31/2020
(Jurisdictional)
|
|
St. Lucie Unit No. 1
|
$833,351,306
|
$477,805,889
|
|
St. Lucie Unit No. 2
|
$685,049,470
|
$397,792,046
|
|
Turkey Point Unit No. 3
|
$704,175,236
|
$343,479,870
|
|
Turkey Point Unit No. 4
|
$791,939,364
|
$370,793,989
|
|
Total
|
$3,014,515,376
|
$1,589,871,794
|
Source: FPL’s 2020
Decommissioning Study, Support Schedule G.
Funding Period
The funding
period is the period over which revenues are collected from customers for
purposes of decommissioning the nuclear units. Plant-specific funding periods
are assumed to expire on the last day of the month preceding the month in which
the plant’s operating license is due to expire. The operating license
expiration dates for the nuclear units are listed in Table 2-5 below:
|
Table 2-5
|
|
Current NRC Operating License Expiration
Dates
|
|
Nuclear Unit
|
Expiration Date
|
|
St. Lucie Unit No. 1
|
March 1, 2036
|
|
St. Lucie Unit No. 2
|
April 6, 2043
|
|
Turkey Point Unit No. 3
|
July 19, 2052
|
|
Turkey Point Unit No. 4
|
April 10, 2053
|
Source: FPL’s 2020
Decommissioning Study, Section 2.
Years of Fund
Expenditures
The years in
which the accumulated NDT funds will be expended for purposes of plant
decommissioning are listed in Table 2-6 below:
|
Table
2-6
|
|
Years of Fund Expenditures
|
|
Nuclear Unit
|
Period
|
|
St. Lucie Unit No. 1
|
2036-2073
|
|
St. Lucie Unit No. 2
|
2043-2073
|
|
Turkey Point Unit No. 3
|
2052-2074
|
|
Turkey Point Unit No. 4
|
2053-2074
|
Source: FPL’s 2020
Decommissioning Study, Support Schedule G.
Fund Earnings Rate
The
fundamental purpose of the Commission’s review of a decommissioning study is to
ensure there will be adequate funding on hand at the time the nuclear unit is
decommissioned. An assumed fund earnings rate is integral to this process. The
assumed fund earnings rate should be conservative enough to avoid a situation
whereby future customers are burdened by inadequate funding for
decommissioning. However, an assumed fund earnings rate that is too
conservative inappropriately burdens current customers with expenses to be
incurred in the future. As such, a certain amount of judgment is necessary to
determine a fair balance between generations of customers.
The annual
accrual amount moves inversely to the fund earnings rate. In other words, the
higher the assumed fund earnings rate, the lower the annual accrual and vice
versa. In its 2020 study, FPL used an assumed fund earnings rate of 4.0 percent,
which is applicable to all four of its nuclear decommissioning trust funds. This
assumed fund earnings rate is based on a Consumer Price Index (CPI) rate of 2.0
percent, plus a projected real long-term, after-tax, and net-of-fees earnings
rate (or spread) of 2.0 percent.
This is the
same approach FPL used in its approved 2015 study where the assumed earnings
rate is compared to the CPI to assure that the overall return remains above CPI. The
assumed fund earnings rate of 4.0 percent, as compared to a CPI of 2.0 percent
reflects the projection of continued adequacy of the funds. This projection
assumes an investment strategy where the funds are moved from a current mix of
50 percent equity/growth assets and 50 percent income-oriented assets, to 100
percent fixed-income assets prior to the first year of decommissioning.
For the final years of decommissioning, all funds are assumed to be
conservatively invested/held in a mix of bonds and cash.
As
demonstrated by the range of earnings displayed in Table 2-7, the total fund
returns have experienced some volatility from period to period. However, since
inception, the NDT has returned an overall level of 7.1 percent. Given the
projected long-term CPI of 2.0 percent, and the actual returns since inception,
staff believes FPL’s estimated fund earnings rate of 4.0 percent is reasonable
for the purposes of determining the appropriate annual accrual amounts.
|
Table
2-7
|
|
Period
NDT Time-Weighted Returns
|
|
Period
|
Fund Return
|
CPI
|
Spread
|
|
1-Year
|
11.90%
|
1.20%
|
10.70%
|
|
2-Year
|
15.10%
|
1.70%
|
13.40%
|
|
3-Year
|
8.80%
|
1.80%
|
7.00%
|
|
5-Year
|
9.20%
|
1.90%
|
7.30%
|
|
10-Year
|
7.70%
|
1.70%
|
6.00%
|
|
Since Fund Inception
|
7.10%
|
2.60%
|
4.50%
|
Source:
FPL’s Responses to Staff’s First Data Request, No. 1.
Given the
parameters discussed above, the funding analysis indicates the current funding
position as of December 31, 2020, is more than sufficient to satisfy the
present value of future nuclear plant decommissioning cost requirements and
that no new customer monies are required at this time.
Minimum Fund Earnings
Rate
Separate
from the issue of the assumed fund earnings rate is the matter of whether the
Commission should impose a prospective minimum fund earnings rate. In Order No.
21928, the Commission declined to identify a specific prospective growth value,
but as a safeguard, determined that a minimum fund earnings rate equivalent to
the level of inflation over each previous five-year review period would be
appropriate.[41] The
Commission reaffirmed this approach in FPL’s 1994 and 1998 Decommissioning
Studies. In those orders the Commission stated:
Rather than attempting to set a
prospective minimum fund earnings rate which may or may not be reasonable under
future economic conditions, we will require that the companies set aside funds
sufficient to meet the Commission’s best estimate of the decommissioning
liability and require the companies to maintain the purchasing power as well as
the principal amount of these contributions. The companies’ investment performance
will be evaluated along with all other decommissioning activities every five
years. If it is found that the companies’ investment earnings, net of taxes and
all other administrative costs charged to the trust fund, did not meet or
exceed the CPI average for the period, then we will consider ordering the
utility to cover this shortfall with additional monies to keep the trust fund
whole with respect to inflation. We therefore find a minimum fund earnings rate
equivalent to the level of inflation over each five-year review period would be
appropriate.
FPL believes
a distinct prospective minimum funds earnings rate should not be imposed and
the current approach, as approved by the Commission, should remain in effect.
The Company explained that economic and financial market conditions can vary
widely over time and are difficult, if not impossible, to predict. FPL also
indicated that it is reasonable that the Company be accountable for taking
appropriate steps intended to preserve the principal value and the purchasing
power of contributions collected from its customers. Staff concurs, as it
believes the Commission’s current approach of periodically evaluating the
adequacy of fund return levels (i.e., minimum fund returns equivalent to the
level of inflation over the previous five-year review period) is appropriate.
Conclusion
The current annual expense requirements to satisfy the estimated
future nuclear decommissioning costs presented in the 2020 study support a zero
accrual as of December 31, 2020. Based on the current estimated cost to
decommission each nuclear unit, the assumed escalation rates to derive future
cost values, current funding levels, and the assumed fund earnings rate of 4.0
percent, staff believes the continued suspension of any decommissioning accruals
is reasonable. Thus, staff recommends the appropriate jurisdictional accrual
amounts necessary to recover future decommissioning costs over the remaining
life of each nuclear power plant remain at the currently-authorized zero
dollars per year as last approved by Order No. PSC-16-0250-PAA-EI.
Issue 3:
Should the amortization expense associated with the
unrecovered value of End-of-Life Materials and Supplies inventories that will
exist at the nuclear site following shut down be revised?
Recommendation:
Yes. Staff recommends that the Commission recognize
the revised annual amortization expense associated with End-of-Life Materials
and Supplies inventories for FPL of $1.647 million (system), based on the
proposed January 1, 2022 effective date of new customer rates in FPL’s current
rate case proceeding, Docket No. 20210015-EI. FPL should address the
amortization of End-of-Life Materials and Supplies inventories in its
subsequent decommissioning studies so the related annual accruals can be
revised, if warranted. (Shrum, Barrett)
Staff Analysis:
The
end-of-life materials and supplies (EOL M&S) inventories of a
nuclear-powered electrical plant consist of spare replacement parts and
supplies that are required to ensure safe and reliable operations of the
nuclear plant.[44] These
inventories are unique and will have little value other than scrap when the
associated nuclear units are decommissioned. Recognizing that a level of EOL
M&S inventories will remain at the final shut down of each nuclear plant
and therefore equates to an unrecovered cost, the Commission authorized FPL to
amortize the cost of EOL M&S inventories over the remaining life span of
each nuclear plant in order to ratably allocate the costs to those receiving
the benefit of the nuclear generated power. For
administrative ease, the Commission further required FPL to address the
amortization status of EOL M&S inventories in the company’s subsequent
updated nuclear decommissioning cost studies so the related annual amortization
expense could be revised, if necessary.
In
accordance with Order No. PSC-02-0055-PAA-EI, effective May 2002, FPL began
recording the annual amortization expense associated with the EOL M&S
inventories as a debit to nuclear maintenance expense with a credit to an
unfunded Account 228 reserve. FPL’s current level of annual amortization
expense was required in its 2015 Decommissioning Study and approved by the
Commission with Order No. PSC-16-0250-PAA-EI. Because the Commission previously
found that the recovery of the costs associated with the EOL M&S
inventories should be considered as a base rate component,
it ordered that changes in amortization of the EOL M&S inventory-related
expenses shall be considered in conjunction with changes in other base rate costs
and revenue requirement determinations at the time of FPL’s base rate
proceeding. Consequently, FPL’s authorized annual amortization determined in
its 2015 Decommissioning Study became effective in January 2017, consistent
with the Stipulation and Settlement Agreement approved by the Commission.
In a
decommissioning study, a company’s required EOL M&S-related annual
amortization is determined by dividing the remaining net unrecovered cost
associated with the EOL M&S inventories by the remaining amortization
period. The remaining net unrecovered cost is the difference between the
estimated cost of EOL M&S inventories and the actual reserve balance
accrued at a point in time. The remaining amortization period is usually
assumed to be from the considered point in time to the end of operating license
of the last nuclear unit at a nuclear site. In its 2020 study, FPL estimated
the remaining net unrecovered cost associated with the EOL M&S inventories,
as of December 31, 2020, was $43.643 million, with approximately $21.678
million at St. Lucie (SL)[48] and
$21.965 million at Turkey Point (TP).
In its 2020 Decommissioning
Study, FPL proposed that any change in amortization accruals relating to EOL
M&S inventories should be addressed in FPL's next base rate proceeding. On
March 12, 2021, FPL filed a Petition for Base Rate Increase and Rate
Unification. After
filing its Rate Case petition, the company updated its analysis associated with
the EOL M&S inventories in the instant docket in order to align with the proposed
effective date identified in FPL’s Rate Case, January 1, 2022.[50] The
updated analysis reflects that the total estimated unrecovered cost for EOL
M&S inventories, as of January 1, 2022, is $41.672 million. Approximately
$20.969 million of this total is associated with SL, and the remaining $20.703
million is associated with TP inventories. The revised annual amortization
expense totals $1.647 million, which is a decrease of $0.326 million from
$1.973 million. The principle reason for the $0.326 million reduction is the
license extension granted at TP Unit 4 from 2033 to 2053, since it increased
the number of months over which the remaining balance is projected to be
recovered. Increasing
the number of months for this calculation results in a net reduction to the
current amortization amount. Details of the estimated EOL M&S-related
costs, reserve balances, remaining amounts to be recovered, and annual
amortization amounts, as of January 1, 2022, are presented in Table 3-1 below:
|
Table 3-1
|
|
|
|
EOL M&S - Associated
Amortization Expenses ($1000s)
|
|
|
|
Plant Site/ Unit
|
(a)
EOL M&S Inventories as of 1/1/2022
|
(b)
Reserve Balance as of 1/1/2022
|
(c) = (a) –
(b)
Remaining Amounts to be Recovered
|
(d)
Current Annual Amortization
|
(e)
Revised Annual Amortization
|
(f) = (e) – (d)
Change in Annual Amortization
|
|
|
|
|
|
|
|
SL2*
|
30,746
|
9,777
|
20,969
|
710
|
985
|
275
|
|
|
|
TP4**
|
42,881
|
22,178
|
20,703
|
1,263
|
662
|
(601)
|
|
|
|
Total
|
73,627
|
31,955
|
41,672
|
1,973
|
1,647
|
(326)
|
|
|
|
Notes: *SL2
is the last unit to be decommissioned at the St. Lucie nuclear site.
**TP4 is the last unit to be decommissioned at the
Turkey Point nuclear site.
Data Source: FPL's response to Staff's First Data
Request, Nos. 18-19, 28-29; FPL 2020 Decommissioning Study, Assumptions and
Schedule E; and Order No. PSC-16-0250-PAA-EI, Pages 19-21.
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on
reviewing the information contained in FPL’s 2020 Decommissioning Study and
associated data request responses as well as prior Commission orders, staff
believes that the revised amortization amounts presented in Table 3-1 are
appropriate. Staff recommends that the updated EOL M&S amortization amount
is $1.647 million. The effective date of this updated amount is addressed in Issue
5.
Conclusion
The amortization
expense associated with the unrecovered value of EOL M&S inventories that
will exist at these nuclear sites following shut down should be revised. Staff
recommends that the Commission approve the revised annual amortization expense
associated with EOL M&S inventories for FPL of $1.647 million (system). The
revised amortization represents a decrease of approximately $0.326 million from
the authorized amortization amount from the 2015 Decommissioning Study. The
amortization of EOL M&S inventories should be included in subsequent
decommissioning studies so the related annual accruals can be revised, if warranted.
Issue 4:
Should the amortization expense associated with the
cost of the Last Core of nuclear fuel be revised?
Recommendation:
Yes. Staff recommends that the Commission recognize
the revised annual amortization expense associated with the cost of the Last
Core of nuclear fuel at FPL nuclear units of $3.564 million (system), based on
the proposed January 1, 2022 effective date of new customer rates in FPL’s
current rate case proceeding, Docket No. 20210015-EI. FPL should address the
costs associated with the Last Core in subsequent decommissioning studies so
the related annual accruals can be revised, if warranted. (Shrum, Barrett)
Staff Analysis:
Last
Core is defined as the unburned nuclear fuel that will remain in the fuel
assemblies at the end of the last operating cycle of each nuclear unit when it
ceases operation. According to FPL, there are currently no economically
feasible solutions to decrease the amount of unburned fuel in the reactor at
the end of the last cycle.
Recognizing that the Last Core is associated with the final shut down of a
nuclear unit and therefore equates to an unrecovered cost at the end of each
unit's life, the Commission authorized FPL to amortize the cost of the Last
Core over the remaining life span of each nuclear unit in order to ratably
allocate the costs to those receiving the benefit of the nuclear generated
power.[54] For
administrative ease, the Commission also required FPL to address the
amortization status of the Last Core expense in the company’s subsequent
updated nuclear decommissioning cost studies so the related annual amortization
expense could be revised, if necessary.
In
accordance with Order No. PSC-02-0055-PAA-EI, effective May 2002, FPL began
recording the annual amortization expense associated with the Last Core as a
debit to nuclear maintenance expense with a credit to an unfunded Account 228
reserve. Similar to EOL M&S addressed in Issue 3, FPL’s current level of
annual amortization expense was required in its 2015 study and approved by the
Commission with Order No. PSC-16-0250-PAA-EI. Because the Commission previously
found that the recovery of the cost associated with the Last Core should be
considered as a base rate component, it ordered that changes in amortization of
the Last Core-related expense shall be considered in conjunction with changes
in other base rate costs and revenue requirement determinations at the time of
FPL’s base rate proceeding.
Consequently, FPL’s authorized annual amortization determined in its 2015
Decommissioning Study became effective in January 2017, consistent with the
Stipulation and Settlement Agreement approved by the Commission.
In a
decommissioning study, a company’s required Last Core-related annual
amortization is determined by dividing the difference between the estimated EOL
value of the Last Core of nuclear fuel and the cumulative amortization balance
at a point in time, by the remaining amortization period which is usually
assumed to be at the end of operating license of the nuclear unit. In the 2020 Decommissioning
Study, FPL estimated the remaining net unrecovered cost associated with Last
Core at the SL and TP nuclear plants, as of December 31, 2020, was approximately $96.759 million.
Consistent with the approach used
with the EOL M&S balances in its 2020 Decommissioning Study, FPL proposed
that any change in amortization accruals relating to the Last Core expense
should be addressed in FPL's next base rate proceeding. After filing its Rate
Case petition, the company updated its analysis associated with Last Core to
align with the proposed effective date of FPL’s 2021 base rate case, January 1,
2022. The
updated analysis reflects that FPL’s estimate of remaining net unrecovered cost
associated with the Last Core, as of January 1, 2022, is approximately $85.686
million. The resulting annual amortization expense is estimated to be $3.564
million, a decrease of $7.509 million annually from the current level. In data
request responses, FPL stated that total nuclear fuel costs have gone down by
approximately 35 percent in the five-year period between the 2015 and 2020
Decommissioning Studies. Details
of the estimated Last Core-related costs, reserve balances, remaining amounts
to be recovered, and annual amortization amounts, as of January 1, 2022, are
presented in Table 4-1 below:
|
Table 4-1
|
|
|
|
Last Core - Associated
Amortization Expenses ($1000s)
|
|
|
|
Plant Site/ Unit
|
(a)
Last Core Costs as of 1/1/2022
|
(b)
Reserve Balance
as of 1/1/2022
|
(c) = (a) –
(b)
Remaining Amounts to be Recovered
|
(d)
Current Annual Amortization
|
(e)
Revised Annual Amortization
|
(f) = (e) – (d)
Change Annual in Amortization[59]
|
|
|
|
|
|
|
|
SL1
|
56,900
|
43,839
|
13,061
|
3,200
|
919
|
(2,281)
|
|
|
|
SL2
|
55,700
|
35,412
|
20,288
|
2,972
|
953
|
(2,019)
|
|
|
|
TP3
|
65,300
|
40,771
|
24,529
|
2,536
|
803
|
(1,733)
|
|
|
|
TP4
|
63,800
|
35,992
|
27,808
|
2,365
|
889
|
(1,476)
|
|
|
|
Total
|
241,700
|
156,014
|
85,686
|
11,073
|
3,564
|
(7,509)
|
|
|
|
Data Source: FPL's response
to Staff's First Data Request, Nos. 38-39, 42-44, 47-48, 51-53; FPL 2020
Decommissioning Study, Assumptions and Schedule F; and Order No.
PSC-16-0250-PAA-EI, Pages 21-22.
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on review of information contained in FPL’s 2015
Decommissioning Study and associated data request responses as well as prior
Commission orders, staff believes that the revised amortization amounts
presented in Table 4-1 are appropriate. Staff also believes that the updated
Last Core amortization amount is $3.564 million. The effective date of this
updated amount is addressed in Issue 5.
Conclusion
The amortization
expense associated with the cost of the Last Core of nuclear fuel should be
revised. Staff recommends that the Commission approve the revised annual
amortization expense associated with the cost of the Last Core for FPL of
$3.564 million (system). This represents a decrease of approximately $7.509
million from the authorized amortization amount from the 2015 Decommissioning
Study. The amortization of the Last Core-related costs should be included in
subsequent decommissioning studies so the related annual accruals can be
revised, if warranted.
Issue 5:
What should be the effective date for adjusting the
annual decommissioning accrual amounts for TP3, TP4, SL1, SL2, amortization of
nuclear EOL M&S inventories, and amortization of the costs associated with
the Last Core?
Recommendation:
If the staff recommendations in Issues 1 and 2 are approved,
there is no change to the current approved zero decommissioning accrual. Therefore, an effective date for adjusting
the annual decommissioning accrual is moot. If the staff recommendations in
Issues 3 and 4 are approved, the revised annual amortization amounts relating
to EOL M&S inventories (Issue 3) and the Last Core (Issue 4) should be
effective at the time new base rates are approved. (Smith II)
Staff Analysis:
By Order No. PSC-16-0250-PAA-EI, issued June
29, 2016, Petition for approval of 2015 nuclear decommissioning study, by
Florida Power & Light Company, the Commission found that FPL’s
currently-approved zero annual decommissioning accrual did not warrant revision
at that time. A review of FPL’s 2020 study indicates that decommissioning base
cost estimates have decreased since 2015, along with assumptions relating to
escalation rates and trust fund earnings, as discussed in Issue 2, suggest that
FPL’s currently approved zero annual decommissioning accrual does not require
revision at this time.
As previously discussed in Issues 3 and 4,
FPL’s current decommissioning study indicates revisions to the
amortization of nuclear EOL M&S inventories and amortization of the costs
associated with the Last Core are warranted. FPL’s position and request is that
any change in accrual amounts should be addressed in its next base rate
proceeding. Staff notes the Commission is currently reviewing FPL’s base rates
in Docket No. 20210015-EI. Given that the Commission found in the 1998 FPL
Nuclear Decommissioning Study review that the amortization expenses associated
with the Last Core and EOL M&S should be considered base rate obligations,
staff agrees with the company’s assessment.
Conclusion
If the staff recommendations in Issues 1 and 2 are approved,
there should be no change to the currently-approved zero annual decommissioning
accrual. Therefore, the Commission need
not establish an effective date at this time. If the staff recommendations in
Issues 3 and 4 are approved, the revised annual amortization amounts relating
to EOL M&S inventories and the Last Core should be effective at the time
new base rates are approved.
Issue 6:
When should FPL file its next nuclear decommissioning
study?
Recommendation:
FPL’s next decommissioning cost study for the Turkey
Point Nuclear Generating Station and the St. Lucie Nuclear Power Plant should
be filed no later than December 14, 2025. (Smith II)
Staff Analysis:
Rule
25-6.04365, F.A.C., requires a utility that owns a nuclear generating plant
under Commission jurisdiction to file a site-specific nuclear decommissioning
cost study update at least once every five years from the submission date of
the previous study unless otherwise required by the Commission. Given that FPL’s current study was filed on
December 14, 2020, its next study should be filed no later than December 14,
2025.
Conclusion
FPL’s next decommissioning cost study for the Turkey Point
Nuclear Generating Station and the St. Lucie Nuclear Power Plant should be
filed no later than December 14, 2025.
Issue 7:
Should this docket be closed?
Recommendation:
If no protest to this proposed agency action is
filed by a substantially affected person within 21 days of the issuance of the
order, a consummating order should be issued and the docket should be closed.
(Brownless)
Staff Analysis:
If no protest to this proposed agency action is
filed by a substantially affected person within 21 days of the issuance of the
order, a consummating order should be issued and the docket should be closed.
