In SECY-16-0115 dated October 7, 2016, U.S. Nuclear Regulatory Commission (NRC) staff seeks Commission approval to initiate a rulemaking to require financial assurance for the disposition of Category 1 and 2 byproduct material radioactive sealed sources. The rulemaking would revise § 30.35 of Title 10 of the Code of Federal Regulations (10 CFR), “Financial Assurance and Recordkeeping for Decommissioning.”
NRC staff ranks the proposed rulemaking in SECY-16-0115 as a high priority using the Common Prioritization of Rulemaking (CPR) methodology and offers the following estimated schedule:
- initiate regulatory basis phase – October 2017;
- complete regulatory basis – October 2018;
- publish proposed rule – October 2019; and,
- publish final rule – October 2020.
The NRC’s regulations in 10 CFR 30.35 require a fixed dollar amount of financial assurance or a Decommissioning Funding Plan (DFP) for licensees possessing byproduct material with a half-life greater than 120 days and at activity levels above certain thresholds. However, the thresholds for sealed byproduct material are such that many licensees possessing Category 1 and 2 byproduct material radioactive sealed sources are not required to provide financial assurance for decommissioning. Where financial assurance is required, it is to support decommissioning of the site, not necessarily to disposition an individual radioactive sealed source that has become disused or unwanted.
The NRC staff conducted a scoping study to determine whether additional financial planning requirements for end-of-life management for some radioactive byproduct material (particularly radioactive sealed sources) were needed. Based on the scoping study, which is documented in SECY-16-0046, “Radioactive Byproduct Material Financial Scoping Study,” the NRC staff recommends that the financial assurance requirements in 10 CFR 30.35 be expanded to include all Category 1 and 2 byproduct material radioactive sealed sources tracked in the National Source Tracking System (NSTS).
NRC staff identified three main reasons for proceeding with the rulemaking. Specifically, requiring financial assurance for disposition of Category 1 and 2 byproduct material radioactive sealed sources would:
- ensure that licensees possessing these risk-significant radioactive sealed sources are financially prepared for the costs of end-of-life dispositioning;
- complement the existing regulatory framework to ensure safe and secure management of Category 1 and 2 byproduct material radioactive sealed sources by facilitating timely disposition when these radioactive sealed sources become disused or unwanted; and,
- help ensure that dispositioning costs are borne by those who receive the associated economic benefits from the use of these sources.
In SECY-16-0115, NRC staff state that the proposed rulemaking would result in increased regulatory costs and that its implementation would require additional NRC and Agreement State resources. Accordingly, NRC staff asserts that engagement with Agreement States and other stakeholders early in the rulemaking process would be prudent to ensure that the benefits of the rule and resource impacts are well understood and that the new requirements can be implemented effectively and efficiently.
Preliminary Priority In SECY-16-0115, using the CPR, NRC staff asserts that the proposed rulemaking exceeds the minimum criterion for a preliminary priority of “High” because the rule would be a moderate contributor toward both the Safety and the Security Goals in the NRC’s 2014 – 2018 Strategic Plan. In this regard, NRC staff state that the proposed rulemaking would address one Safety Goal Implementation Strategy and two Security Goal Implementation Strategies.
The Safety Goal Implementation Strategy is to “Enhance the NRC’s regulatory programs, as appropriate, using lessons learned from domestic and international operating experience and other sources.” For this strategy, NRC staff argue that the requested rulemaking would enhance the NRC’s regulatory programs by addressing lessons learned and recommendations from the NRC, other U.S. and international studies indicating that, as a 2005 U.S. Government Accountability Office (GAO) report stated, “greater quantities and longer periods of storage, particularly of unwanted sealed radiological sources, will likely increase safety and security risks.” NRC staff argue that the rulemaking would also implement guidance in the International Atomic Energy Agency (IAEA) Code of Conduct on the Safety and Security of Radioactive Sources, Paragraph 22(b), that every member state’s regulatory body “ensures that arrangements are made for the safe management and secure protection of radioactive sources, including financial provisions where appropriate, once they have become disused.”
SECY-16-0115 states that the rulemaking would also be a moderate contributor to the Security Goal and would implement the following first and third Security Goal Implementation Strategies:
- “Ensure the effectiveness and efficiency of the regulatory framework using information gained from operating experience and external and internal assessments; …” and,
- “Support U.S. national security interests and nuclear nonproliferation policy objectives within NRC’s statutory mandate through cooperation with domestic and international partners.”
Regarding Security Goal Implementation Strategy 1, NRC staff content that the proposed rulemaking would improve the effectiveness of the regulatory framework by addressing issues from operating experience identified by several internal and external groups, including but not limited to, the Radiation Source Protection and Security Task Force (Task Force) and the GAO.
Concerning Security Goal Implementation Strategy 3, one of the “Contributing Activities” to this Strategy in the Strategic Plan is to “[p]articipate with Agreement States, the Conference of Radiation Control Program Directors, and the DOE’s National Nuclear Security Administration in identification, location, and recovery of unwanted and uncontrolled radioactive materials, often referred to as ‘orphan sources.’” In light of the positions of these partner institutions on the desirability of NRC action, as noted in SECY-16-0046, NRC staff assert that a rulemaking to require adequate financial assurance for the dispositioning of Category 1 and 2 byproduct material radioactive sealed sources would constitute substantial and constructive “participation” with these partners and an important contributing activity to the success of Security Strategy 3.
SECY-16-0115 states that the requested rulemaking would also be a moderate contributor to Regulatory Effectiveness Strategy 1 in the NRC’s Strategic Plan. This strategy calls for the NRC to “[p]roactively identify, assess, understand, and resolve safety and security issues.” According to NRC staff, initiating a rulemaking to require financial assurance for Category 1 and 2 byproduct material radioactive sealed sources would be a proactive measure to help ensure the timely, safe, and secure dispositioning of these sources and minimize the likelihood of new problems.
Description and Scope Under the proposed rulemaking, the NRC staff would establish financial assurance requirements in 10 CFR 30.35 for the dispositioning of all byproduct material Category 1 and 2 radioactive sealed sources that are required to be tracked in the National Source Tracking System (NSTS). Sufficient financial assurance would be required to cover costs associated with storage, conditioning, packaging, transportation, reuse, recycling, or disposal, as applicable. Alternative approaches to ensuring financial assurance will be explored through development of the regulatory basis and proposed rule, both of which will involve interaction with stakeholders. The current regulatory requirements in 10 CFR 30.35 address financial assurance for decommissioning. The proposed rulemaking in SECY-16-0115 would consider adding requirements to provide financial assurance for the dispositioning of Category 1 and 2 radioactive sealed sources that are required to be tracked in the NSTS.
SECY-16-0115 states that the proposed rule would apply the new requirements to licensees possessing affected radioactive sealed sources regardless of site decommissioning status, and would apply to radioactive sealed sources entering the NSTS as well as those currently tracked.
According to SECY-16-0115, the proposed rulemaking focuses on Category 1 and 2 radioactive sealed sources, as these sources have the highest risk significance and are generally the most likely to pose dispositioning challenges. Dispositioning costs are likely to be higher for Category 1 and 2 sources as a group compared to other source categories. Requiring financial assurance for byproduct material Category 1 and 2 radioactive sealed sources may help reduce the use of long-term storage as a management option, supporting the Commission policy that disposal is preferred to storage. In addition, NRC staff content that requiring financial assurance would:
- ensure that licensees possessing these risk-significant radioactive sealed sources have planned and are financially prepared for the costs associated with end-of-life dispositioning;
- complement the existing regulatory framework to ensure safe and secure management of Category 1 and 2 byproduct material radioactive sealed sources by facilitating timely dispositioning when these radioactive sealed sources become disused or unwanted; and,
- help ensure that dispositioning costs are borne by those who receive the associated economic benefits from the use of these sources.
In evaluating alternatives to rulemaking, the NRC staff chose enforceability and consistency of implementation as the paramount considerations; cost-effectiveness was also an important consideration. Based on these considerations, the NRC staff concluded that rulemaking is the most effective way to ensure that adequate financial resources are available to disposition Category 1 and 2 byproduct material radioactive sealed sources. SECY-16-0115 states that, although the issuance of guidance or a generic communication would cost less, neither could effectively provide the key attributes of enforceability and consistency. According to NRC staff, licensing actions would provide these attributes, but would cost considerably more than a generic rulemaking. Interagency cooperation would cost the least, but also provide the least assurance of the desired outcome, since it would depend heavily on factors beyond NRC’s control. Accordingly, NRC staff determined that rulemaking is the preferred option.
SECY-16-0115 states that alternatives considered include:
- Issue Guidance: This alternative would not result in any change in the NRC’s regulations, and as such, licensees would not need to provide financial assurance for byproduct material Category 1 and 2 radioactive sealed sources beyond the current requirements in 10 CFR 30.35.
- Issue a Generic Communication: Similar to issuing guidance, this option would not establish new financial assurance requirements, and would therefore not be binding or enforceable. It would address the regulatory need only to the extent that licensees voluntarily implement improved financial planning practices.
- Take Individual Licensing Actions: Issuing orders or license amendments would provide clear and enforceable direction to licensees, but could only be implemented case by case, and therefore would be highly resource-intensive. According to SECY-16-0115, the NRC alone has 353 Category 1 and Category 2 sealed source licensees in the NSTS database and the Agreement States have 1,779 such licensees. In general, the significant expenditure of NRC and Agreement State resources that would be needed to process hundreds of individual licensing actions is not warranted when there are other less resource intensive options that would produce the same outcome.
- Interagency Cooperation: The NRC could work with other agencies, such as NNSA, to help ensure continued support for existing radioactive sealed source recovery and management programs. It is unclear, however, to what extent the NRC could influence the future viability of these programs in such matters as program funding and administration.
- Issue a Rule: According to SECY-16-0115, this is the preferred alternative because it provides a clearly enforceable basis for licensee or applicant action and ensures the greatest degree of consistency.
SECY-16-0046, Enclosure 1, provides a discussion of numerous technical issues important to financial planning for radioactive sealed source disposition. If the Commission approves the initiation of rulemaking, the NRC staff through the rulemaking process, would further assess these issues in developing the regulatory basis for the draft proposed rule including exploring various options for development of the rule. In addition, a rulemaking working group could conduct outreach to organizations such as the Conference of Radiation Control Program Directors (CRCPD), the Organization of Agreement States (OAS), international partners, industry, and other groups who have studied this issue. The experiences of Agreement State and international partners in implementing similar efforts would be particularly useful.
Relationship of the Work to the NRC’s Strategic Plan SECY-16-0115 states that the rule would be a moderate contributor toward both the Safety and the Security Goals in the NRC’s 2014 – 2018 Strategic Plan and would address one Safety Goal Implementation Strategy and two Security Goal Implementation Strategies. The Safety Goal Implementation Strategy is to “[e]nhance the NRC’s regulatory programs, as appropriate, using lessons learned from domestic and international operating experience and other sources.” The Security Goal Implementation Strategies are to “[e]nsure the effectiveness and efficiency of the regulatory framework using information gained from operating experience and external and internal assessments” and to “[su]pport U.S. national security interests and nuclear nonproliferation policy objectives within NRC’s statutory mandate through cooperation with domestic and international partners.”
Cost and Benefits According to SECY-16-0115, the proposed action is estimated to involve a medium magnitude of costs. The benefits of the proposed action are described in the “Description and Scope” section. Aside from the resource estimates to complete the proposed rulemaking, the costs are discussed qualitatively pending the more detailed analyses that would be performed to support a regulatory basis document and eventual regulatory analysis for a proposed rule.
The estimated costs of the subject rulemaking are discussed in Enclosure 1 to SECY-16-0115. The estimated cost to revise the associated guidance in NUREG-1757, Vol. 3, Rev. 1, “Consolidated Decommissioning Guidance: Financial Assurance, Recordkeeping, and Timeliness” (ADAMS Accession No. ML12048A683) is also provided in Enclosure 1 to SECY-16-0115.
According to NRC staff, expanding the financial assurance requirements in 10 CFR 30.35 would result in increased regulatory costs that could potentially affect beneficial uses of radioactive material. These costs and benefits would be evaluated in detail as part of the rulemaking process. For some licensees, new financial assurance requirements could shift the financial burden of planning for radioactive sealed source disposition to a point earlier in a source’s lifecycle than anticipated. Also, the cost of additional regulatory oversight would be passed on to licensees and applicants. For new sources, licensees or applicants would be able to evaluate these costs when deciding whether or not to acquire a source. For both new and existing sources, the NRC would need to consider carefully various options for the rule requirements and/or phasing of implementation to mitigate potential adverse impacts on licensees and those who benefit from the use of these radioactive materials. Adverse impacts could be particularly acute for licensees with limited revenue streams and limited ability to pass the added costs on to customers. New requirements could potentially increase the number of disused sources if some existing licensees determine that the costs associated with implementing these requirements outweigh the associated benefits.
SECY-16-0115 states that the NRC and Agreement State administration of expanded financial assurance requirements will require additional resources. Regulators will need to develop or amend regulatory guidance associated with the new or modified requirements. In addition, regulatory agencies may need to acquire or supplement existing professional expertise in financial assurance. Information technology and other infrastructure will be needed to track compliance. Resource impacts for regulatory agencies will depend on numerous factors—including the scope of any new requirements, how many licensees are affected and the level of expertise required to evaluate licensee compliance with the new requirements.
Cumulative Effects of Regulation NRC staff determined that the recommended rulemaking could add to the cumulative effects of regulation (CER) for licensees possessing byproduct material Category 1 and 2 radioactive sealed sources, but the extent of the impact will depend on another rulemaking whose nature and scope remains to be determined. A follow-on rulemaking to clarify 10 CFR Part 37 exemption and implementation issues is planned. Because both the 10 CFR Part 37 rulemaking and the recommended financial assurance rulemaking would affect licensees with Category 1 and 2 sources, these licensees would have additional demands on their management, staff, and financial resources if both rules were implemented simultaneously. If the Commission approves this rulemaking and the Part 37 rulemaking, SECY-16-0115 states that the NRC staff will coordinate with the staff leading the 10 CFR Part 37 rulemaking. The NRC staff will request comments in each rulemaking, specifically, regarding potential CER impacts, and will solicit comments during the additional stakeholder interactions anticipated as part of the regulatory basis and proposed rule development.
SECY-16-0115 further states that additional CER impacts of the proposed rulemaking could affect Agreement State agencies. These agencies are required to adopt regulations compatible with NRC regulations within three (3) years after promulgation of an NRC rule that requires compatibility. Depending on the state agencies’ potential 10 CFR Part 37 rulemaking caseloads, their resources available for this activity may be affected. This in turn may affect their ability to promulgate compatible rules within the allowed three-year timeframe.
Agreement State Considerations According to SECY-16-0115 , the proposed rulemaking would result in increased regulatory costs and would require additional NRC and Agreement State resources. Engagement with the NRC’s Agreement State partners from the early stages of rulemaking would be important to ensure that potential resource expenditures and other impacts, including the effects of compatibility requirements, are well understood for effective and timely implementation.
As part of its scoping study, the NRC staff asked stakeholders to comment on how the NRC should engage with Agreement States to consider the impact of any subsequent rulemaking. Respondents from Agreement State regulatory agencies and the OAS generally supported additional financial assurance requirements for radioactive sealed sources, but stressed the need for the NRC to maintain flexibility in implementing new requirements. The OAS noted in its comments that, as with other rulemakings, the NRC should consider forming a working group to coordinate with Agreement States in the development of proposed rule requirements. In addition, the OAS suggested that in determining compatibility, the NRC should consider the impact on States in terms of review of financial assurance documents on an ongoing basis for a greatly increased number of licensees.
Backfitting and Issue Finality SECY-16-0115 states that most of licensees who possess Category 1 and 2 byproduct material radioactive sealed sources that would be affected under the proposed rulemaking are licensed under 10 CFR Part 30. Backfitting and issue finality provisions do not apply to entities that hold 10 CFR Part 30 licenses alone. The NRC staff recognizes, however, that some entities holding licenses protected from backfitting under 10 CFR Parts 50, 70, 72, or 76 could also hold a license for the possession of Category 1 and 2 byproduct material radioactive sealed sources. Similarly, some 10 CFR Part 52 licensees protected under issue finality provisions may hold a license for the possession of Category 1 and 2 byproduct material radioactive sealed sources. According to SECY-16-0115, the proposed rulemaking is not intended to apply to licensees under 10 CFR Parts 50, 52, 70, 72 or 76 that are already required to demonstrate financial assurance for construction, operation, and decommissioning—including the disposition of any Category 1 and 2 byproduct material radioactive sealed sources possessed under their license. Instead, the proposed rulemaking would apply to non-power reactor licensees that possess Category 1 and 2 byproduct material radioactive sealed sources under a Part 30 license or equivalent Agreement State license and are not already subject to financial assurance requirements for the disposition of these sources. The NRC staff has not identified any current license holders under Part 72 or Part 76 that also have a license for the possession of Category 1 and 2 byproduct material radioactive sealed sources. Furthermore, SECY-16-0115 states that the NRC staff finds that current requirements under Parts 50 and 52 provide sufficient financial assurance for the disposition of the Category 1 and 2 byproduct material radioactive sealed sources possessed under these licenses. However, some license holders under 10 CFR Part 70 with Category 1 or 2 byproduct material radioactive sealed sources may not be subject to existing requirements that would provide adequate financial assurance for the dispositioning of these sources. In such circumstances, the proposed rule would apply and a backfit analysis would be required. The NRC staff does not anticipate any of the exceptions to preparing a backfit analysis will apply in this case, and therefore does not expect to rely on them. In developing the technical basis for the proposed rule, the NRC staff will ensure that licensees are not subjected to redundant financial assurance requirements. The NRC staff plans to further evaluate and address the potential for backfitting impacts in the course of developing and obtaining stakeholder input on the regulatory basis for this rulemaking.
Guidance and Advisory Committees SECY-16-0115 states that, concurrent with issuance of a proposed rule, the NRC staff would need to provide draft guidance for public comment through an update to NUREG-1757, Vol. 3, Rev. 1, or develop new guidance. The NRC staff would also need to provide final guidance concurrently with the final rule.
In terms of advisory committees, SECY-16-0115 states as follows:
- At a public teleconference on June 24, 2016, the NRC staff provided the Advisory Committee on Medical Uses of Isotopes (ACMUI) with an overview of its scoping study and the planned path forward including development of the proposed rulemaking plan. Should the Commission approve the initiation of rulemaking, the NRC staff will continue to periodically engage ACMUI as part of the rulemaking process.
- The NRC staff also engaged the Advisory Committee on Reactor Safeguards (ACRS) Technical Support Branch and confirmed that the proposed rulemaking does not fall within the purview of ACRS responsibilities. Therefore, the staff does not recommend ACRS review for this action.
- The NRC staff has made the Committee to Review Generic Requirements (CRGR) aware of the potential for backfitting issues for some 10 CFR Part 70 licensees, and will work with the CRGR to address any such issues that the NRC staff, the Committee, or interested stakeholders may identify.
If the Commission approves initiation of this rulemaking, the NRC staff will add the rule to the CPR during the next budget formulation cycle.
In the Staff Requirements Memorandum (SRM) for SECY-15-0129, “Commission Involvement in Early Stages of Rulemaking,” dated February 3, 2016, the Commission approved a streamlined rulemaking plan requirement in the form of a SECY paper that would request Commission approval to initiate each rulemaking not already explicitly delegated to the NRC staff. Accordingly, in SECY-16-0115, the NRC staff requests approval to initiate a rulemaking to require financial assurance for disposition of Category 1 and 2 byproduct material radioactive sealed sources.
The NRC regulations in 10 CFR 30.35 are intended to ensure adequate financing for the decommissioning of facilities containing byproduct material above prescribed thresholds. They require a fixed dollar amount of financial assurance or a DFP for licensees possessing byproduct material with a half-life greater than 120 days and at activity levels above certain thresholds. Activity thresholds are provided in 10 CFR 30.35 for both unsealed and sealed byproduct material. The thresholds that require financial assurance for sealed byproduct material are seven orders of magnitude higher than for unsealed material. As a result, many licensees that possess byproduct material radioactive sealed sources, including many Category 1 and 2 radioactive sealed sources, are not required to provide financial assurance for decommissioning.
End-of-life costs for dispositioning of byproduct material radioactive sealed sources can be significant. These can include costs for interim storage, packaging and conditioning, transportation, and costs associated with the selected disposition option. Dispositioning may include options such as return to the manufacturer or supplier for reuse or recycling, transfer to another licensee, disposal as low-level radioactive waste, or decay in storage for subsequent management and disposal. Licensees are not required to declare when radioactive sealed sources in their possession are unwanted, nor are they required to provide for prompt dispositioning. If a licensee has not anticipated and planned for the cost of dispositioning, it may represent a significant financial burden. As a result, licensees may choose indefinite long-term storage as the most practical management option.
In SECY-16-0046, dated April 7, 2016, the NRC staff cited a number of studies noting the potential for increased safety and security risks when disused sources are not promptly dispositioned. For example, a 2006 report from the Radiation Source Protection and Security Task Force (Task Force) noted that some NRC licensees, “…may not have sufficient funds set aside to cover the costs of disposal or other appropriate disposition, potentially resulting in prolonged storage and possible misuse or abandonment.” The report also noted that high disposal costs might prompt licensees to delay disposal either by choice or economic necessity. The 2010 Task Force report reiterated that, “…while secure storage is a temporary measure, the longer sources remain disused or unwanted the chances increase that they will become unsecured or abandoned.” The 2014 Task Force report further stated that financial assurance requirements “… are likely to decrease the time that commercial sealed sources remain in storage because the funds necessary for source disposal will be immediately or quickly available.” Requiring financial assurance for byproduct material Category 1 and 2 radioactive sealed sources may help reduce the use of long-term storage as a management option, supporting Commission policy that disposal is preferred to storage.
Since 2003, the NNSA has implemented a program to remove excess radioactive sealed sources that posed a potential threat to public health, safety, and national security. While acknowledging the safety and security concerns associated with disused sources, the NNSA noted in comments provided to the NRC staff that increased government involvement in efforts to address radioactive sealed sources management and disposal is not sustainable. The NNSA stated that additional financial planning requirements could encourage the use of available commercial disposal options, or defray the cost of packaging and transportation, thereby reducing the funding required for NNSA-sponsored radioactive sealed source recovery and management programs.
For additional information, please contact Ryan Whited, NMSS/DUWP, at (301) 415-1154, or Robert MacDougall, NMSS/MSTR, at (301) 415-5175.