Progress Energy 2008 Annual Report Download - page 43

Progress Energy Annual Report 2008
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Mountain, but ruled that the EPA was wrong to set a
10,000-year compliance period in the radiation protection
standard. On September 30, 2008, the EPA issued final
rules for limiting radiation exposure at Yucca Mountain.
The EPA retained the dose limit of 15 millirem per year
for the first 10,000 years and established a dose limit
of 100 millirem for annual exposure per year between
10,000 years and 1 million years. In February 2009, the
NRC approved a final rule for the waste repository at
Yucca Mountain incorporating these radiation protection
standards. On October 10, 2008, the state of Nevada again
filed suit with the D.C. Court of Appeals challenging the
EPA standard.
On October 19, 2007, the DOE certified the regulatory
compliance of the document database that will be used
by all parties involved in the federal licensing process for
the Yucca Mountain facility. The NRC did not uphold the
DOE’s prior certification in 2004 in response to challenges
from the state of Nevada. The state again is expected to
challenge the DOE’s certification process. The DOE has
stated that the earliest date the repository may be able
to start accepting spent nuclear fuel is 2020. The Utilities
cannot predict the outcome of this matter.
The DOE submitted the license application for the
proposed high-level nuclear waste repository at Yucca
Mountain in June 2008. The NRC formally docketed the
license application in September 2008, which begins the
formal licensing phase that is anticipated to take three
to four years. The state of Nevada and other interested
parties are expected to intervene in the licensing
proceedings.
On August 5, 2008, the DOE announced that its estimated
cost to build and commence operations at the Yucca
Mountain facility has increased from $57.5 billion to
$96.2 billion due to an increase in material costs, an
increase in the quantity of spent fuel to store and a
refinement of the repository’s design.
On October 9, 2008, the NRC proposed revisions to its waste
confidence findings that would remove the provisions
stating that the NRC’s confidence in waste management,
underlying the licensing of reactors, is based in part on
a repository being in operation by 2025. Instead, the NRC
states that repository capacity will be available within
50 to 60 years beyond the licensed operation of all
reactors, and that used fuel generated in any reactor can
be safely stored on site without significant environmental
impact for at least 60 years beyond the licensed operation
of the reactor.
With certain modifications and additional approvals by
the NRC, including the installation of on-site dry cask
storage facilities at PEC’s Robinson Nuclear Plant
(Robinson), Brunswick and CR3, the Utilities’ spent
nuclear fuel storage facilities will be sufficient to provide
storage space for spent fuel generated by their respective
systems through the expiration of the operating licenses,
including any license extensions, for their nuclear
generating units. Harris has sufficient storage capacity in
its spent fuel pools through the expiration of its extended
operating license.
See Note 22D for information about the complaint filed by
the Utilities in the United States Court of Federal Claims
against the DOE for its failure to fulfill its contractual
obligation to receive spent fuel from nuclear plants.
Failure to open the Yucca Mountain or other facility
would leave the DOE open to further claims by utilities.
Environmental Matters
We are subject to regulation by various federal, state
and local authorities in the areas of air quality, water
quality, control of toxic substances and hazardous
and solid wastes, and other environmental matters.
We believe that we are in substantial compliance with
those environmental regulations currently applicable
to our business and operations and believe we have all
necessary permits to conduct such operations.
HAZARDOUS AND SOLID WASTE MANAGEMENT
The provisions of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as
amended (CERCLA), authorize the EPA to require the
cleanup of hazardous waste sites. This statute imposes
retroactive joint and several liabilities. Some states,
including North Carolina, South Carolina and Florida,
have similar types of statutes. We are periodically
notified by regulators, including the EPA and various state
agencies, of our involvement or potential involvement in
sites that may require investigation and/or remediation.
There are presently several sites with respect to which
we have been notified of our potential liability by the
EPA, the state of North Carolina, the state of Florida or
potentially responsible parties (PRP) groups. Various
organic materials associated with the production of
manufactured gas, generally referred to as coal tar, are
regulated under federal and state laws. PEC and PEF are
each PRPs at several manufactured gas plant (MGP)
sites. We are also currently in the process of assessing
potential costs and exposures at other sites. These costs
are eligible for regulatory recovery through either base
rates or cost-recovery clauses (See Notes 7 and 21). Both