Part 140 FINAL Supporting Statement 2018

FINAL SUPPORTING STATEMENT
FOR
10 CFR PART 140
“FINANCIAL PROTECTION REQUIREMENTS AND INDEMNITY AGREEMENTS"
(3150-0039)
EXTENSION
DESCRIPTION OF THE INFORMATION COLLECTION
The regulations in Title 10 of the Code of Federal Regulations (10 CFR) Part 140 specify the
information to be submitted by certain part 40, 50, 52, and 70 applicants and licensees that
enables the NRC to assess (a) financial protection required by applicants and licensees and for
the indemnification and limitation of liability pursuant to Section 170 of the Atomic Energy Act of
1954, as amended, and (b) the liability insurance required of uranium enrichment facility
applicants and licensees pursuant to Section 193 of the Atomic Energy Act of 1954, as
amended. Prior to the issuance of a license to operate a nuclear reactor, an applicant must
provide evidence of financial protection to the Nuclear Regulatory Commission (NRC) as
outlined in 10 CFR Part 140. The NRC also requires licensees to submit reports in the event of
bodily injury or property arising out of, or in connection with, the possession or use of
radioactive material; proof of liability insurance; proof of financial protection (which includes, but
is not limited to, financial statements); notices of material changes in financial protection; and
certificates by the insurers issuing the policies as well as any notifications of termination.
Licensees maintain records of these documents.
A.

JUSTIFICATION
1. Need For and Practical Utility of the Collection of Information.
The information is needed in order to determine licensee compliance with the
regulations set forth in 10 CFR Part 140.
Details of these regulations can be found at the end of this supporting statement in
“Description of Requirements”
2. Agency Use and Practical Utility of Information
The NRC uses the information required by 10 CFR Part 140 to assess (a) the
financial protection required of applicants and licensees and for the indemnification
and limitation of liability of certain licensees and other persons pursuant to Section
170 of the Act, and (b) the liability insurance required of uranium enrichment facility
licensees pursuant to Section 193 of the Act to ensure sufficient funds would be
available to satisfy public liability claims resulting from a nuclear incident.
3. Reduction of Burden Through Information Technology
The NRC has issued Guidance for Electronic Submissions to the NRC which
provides direction for the electronic transmission and submittal of documents to the
NRC. Electronic transmission and submittal of documents can be accomplished via
the following avenues: the Electronic Information Exchange (EIE) process, which is

available from the NRC's “Electronic Submittals” Web page, by Optical Storage
Media (OSM) (e.g. CD-ROM, DVD), by facsimile or by e-mail. It is anticipated that
approximately 90 percent, or greater, of all requests will be submitted electronically.
4. Effort to Identify Duplication and Use Similar Information
No sources of similar information are available. There is no duplication of
requirements. NRC has in place an ongoing program to examine all information
collections with the goal of eliminating all duplication and/or unnecessary information
collections.
5. Effort to Reduce Small Business Burden
Small businesses are not affected by 10 CFR 140 information collection
requirements.
6. Consequences to Federal Program or Policy Activities if the Collection is Not
Conducted or is Conducted Less Frequently
The information collection is necessary to implement the Price-Anderson Act.
Collecting this information at the required intervals ensures the licensee maintains
adequate financial protection throughout the life of the license and provides
assurance that sufficient funds would be available to satisfy public liability claims
resulting from a nuclear incident.
7. Circumstances Which Justify Variation from the Office of Management and Budget
Guidelines
This information collection does not vary from the Office of Management and Budget
guidelines.
8. Consultations Outside the NRC
Opportunity for public comment on the information collection requirements for this
clearance package was published in the Federal Register on April 10, 2018
(83 FR 15422). Additionally, we contacted via email nine potential respondents in
the areas of reactor owner/operator licensee’s representatives from Ameren UE,
Duke Energy Power Company, LLC, Exelon Generation Co., LLC, FirstEnergy
Nuclear Operating Company and Southern Nuclear Operating Company. Of the nine
potential respondents contacted, one response was received from Ameren UE that
agreed with NRC estimates. Further, no comments were received from the
published Federal Register Notice.
9. Payment or Gift to Respondents
Not applicable.
10. Confidentiality of Information

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Confidential and proprietary information is protected in accordance with NRC
regulations at 10 CFR 9.17(a) and 10 CFR 2.390(b). However, information that is
normally considered confidential or proprietary is not requested.
11. Justification for Sensitive Questions
The part 140 information collection does not solicit or request sensitive or private
information.
12. Estimated Industry Burden and Burden Hour Cost
The total estimated cost for information collection requirements associated with
10 CFR Part 140 is estimated to be 796 hours at a cost of $209,348 (796 hours x
$263).
Total Burden and Responses
Hours
Responses
Reporting
796
102
Recordkeeping
0
0
Third Party Disclosure
0
0
TOTAL
796
102
Detailed burden estimates are included in the supplemental burden spreadsheet
titled, “Table 1 - Summary of Supporting Statements.” The $263 hourly rate used in
the burden estimates is based on the Nuclear Regulatory Commission’s fee for
hourly rates as noted in 10 CFR 170.20 “Average cost per professional staff hour.”
For more information on the basis of this rate, see the Revision of Fee
Schedules; Fee Recovery for Fiscal Year 2017 (82 FR 30682; June 30, 2017).
When an applicant is initially granted a license to operate a production or utilization
facility, it must provide evidence of primary and secondary insurance. At present,
approximately 171 entities have provided this information (102 operating power
reactor licenses; 19 power reactor licenses in decommissioning; 31 operating nonpower reactor licenses; 8 non-power reactor licenses in decommissioning; 7
plutonium processing and fuel fabrication licenses; and 4 combined licenses).
During this clearance cycle, 102 licensees are anticipated to provide documentation
in association with 10 CFR Part 140. Two licensees are expected to provide two
responses in one year with information for Part 140.8 to request an exemption to
lower primary insurance and withdraw from the secondary insurance pool after the
reactors enter the decommissioning stage and spent fuel cooling criteria has been
met. It is also expected that a total of 102 responses per year will be related to Part
140.21, and include submittals to provide the NRC with the assurance that licensees
maintain adequate financial capacity to pay for deferred premiums in the event of a
nuclear incident. Therefore, the average number of annual respondents during this
three year clearance period will be approximately 102, as reflected in Table 1.
Other requirements in Part 140 are not anticipated to apply to any respondents
during the clearance cycle; therefore, no burden will be accrued for these

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requirements. For example, the licensee must submit a report to the Commission if
there is an occurrence of a bodily injury arising out of the possession or use of
radioactive material as required pursuant to Section 140.6. A review of historical
records in the Agencywide Documents Access and Management System (ADAMS)
indicates that this occurrence has been rare and there is a low expectation of the
need for a report during this clearance cycle. In addition, while the NRC does
require reports of material changes in financial protection or other financial
information in accordance with Section 140.15(e), currently all the power reactors
maintain financial protection in the form of liability insurance for both primary and
secondary layers of financial protection. Finally, although a potential for submittals
under Sections 140.17(a) and (b) exists, licensees are not expected to participate in
the information collections associated with this part. All liability policies are currently
issued by American Nuclear Insurers. The provisions of this part would become
operable should a new insurance carrier enter the market; this is not expected to
occur during this clearance cycle, eliminating the need to utilize a universe of
potential respondents.
Table 1 summarizes the estimated industry burden and burden hour cost on NRC
licensees to prepare reports required under 10 CFR Part 140.
13. Estimate of Other Additional Costs
There are no additional costs.
14. Estimated Annualized Cost to the Federal Government
The staff has developed estimates of annualized costs to the Federal Government
related to the conduct of this collection of information. These estimates are based
on staff experience and subject matter expertise and include the burden needed to
review, analyze, and process the collected information and any relevant
operational expenses.
The annualized estimated cost to the government is $360,836 (1372 staff hours x
$263) as shown on the attached Summary Table.
15. Reasons for Changes in Burden or Cost
The burden and number of responses have changed as described in the tables
below:
Burden change:
Reporting
Recordkeeping
Third Party
Disclosure
TOTAL

2016 Estimates
Current Submission
Change
803
796
0
0
0
0
803

796

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Change in Responses
2016 Estimates

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Current Submission

-7
0
0

Change

Reporting
Recordkeeping
Third Party
Disclosure
TOTAL

102
0
0

102
0
0

0
0
0

102

102

0

The overall burden for this collection has decreased from 803 hours and 102
responses in the previous renewal to 796 hours and 102 responses in this cycle.
The decrease in the number of hours is reflective of the changes in the status of the
licensees (a reduction in responders under Section 140.21, with an increase in
Section 140.13 responders with an accompanying reduced burden per response.)
A decrease in cost is also due to the decrease in fee rate, from $279/hour to
$263/hour.
16. Publication for Statistical Use
The collected information is not published for statistical purposes.
17. Reason for Not Displaying the Expiration Date
The requirement is contained in a regulation. Amending the Code of Federal
Regulations to display information that, in an annual publication, could become
obsolete would be unduly burdensome and too difficult to keep current.
18. Exceptions to the Certification Statement
None.
B.

COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
Not applicable.

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DESCRIPTION OF INFORMATION COLLECTION REQUIREMENTS
CONTAINED IN
10 CFR PART 140
“FINANCIAL PROTECTION REQUIREMENTS AND INDEMNITY AGREEMENTS"
(3150-0039)
Section 140.6(a) requires licensees to submit a report to the U.S. Nuclear Regulatory
Commission (NRC) in the event of bodily injury or property damage arising out of the
possession or use of radioactive material.
Section 140.6(b) states that the Commission may require any person subject to this
part to keep such records and furnish such reports to the Commission as the
Commission deems necessary for the administration of the regulations in this part.
Section 140.7(b) where a licensee manufactures a number of nuclear reactors each
having a power level not exceeding 31/3 megawatts, for sale to others and operates
them at the licensee's location temporarily prior to delivery, the licensee shall report
to the Commission the maximum number of such reactors to be operated at that
location at any one time. In the event the number of reactors operated at any one
time exceed the estimate so reported, the licensee shall report the additional number
of reactors to the Commission.
Section 140.8 pertains to specific exemptions when the Commission may, upon
application of any interested person or upon its own initiative, grant such exemptions
from the requirements of the regulations in this part as it determines are authorized
by law and are otherwise in the best interest of the public.
Section 140.13 requires each holder of a Part 50 construction permit, or a holder of a
combined license under Part 52 of this chapter before the date that the Commission
had made the finding under Section 52.103(g), who also holds a license under Part
70 of this chapter authorizing ownership, possession, and storage only of special
nuclear material at the site of the nuclear reactor for use as fuel in operation of the
nuclear reactor after issuance of either an operating license under Part 50 or
combined license under Part 52, shall, during the period before issuance of a license
authorizing operation under Part 50, or the period before the Commission makes the
finding under Section 52.103(g) of this chapter, as applicable, to have and maintain
financial protection. Proof of financial protection shall be filed with the Commission
in the manner specified in Section 140.15 of this chapter before issuance of the
license under Part 70 of this chapter.
Section 140.13a requires each holder of a license issued pursuant to Part 70 of this
chapter to possess and use plutonium at a plutonium processing and fuel fabrication
plant to have and maintain financial protection in the form specified in Section
140.14. Proof of financial protection shall be filed with the Commission in the
manner in Section 140.15 prior to issuance of the license under Part 70 of this
chapter.

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Section 140.13b requires proof of liability insurance to be filed with the Commission,
pursuant to Section 140.15, before issuance of a license for a uranium enrichment
facility, as required by Section 193 of the Act.
Section 140.14(b) requires the licensee to obtain written approval of the Commission
if they wish to substitute one type of financial protection for another.
Section 140.15(a)(1) requires licensees who maintain financial protection, in whole or
in part, in the form of liability insurance to provide proof of financial protection that
consists of a copy of the liability policy (or policies) together with the certificate by the
insurers issuing the policy stating that the copy is a true copy of the currently
effective policy issued to the licensee.
Section 140.15(a)(2) allows for alternative proof of financial protection in the form of
a copy of the declarations page from a nuclear energy liability policy, if it is filed by
the insurers to the Commission and is accompanied by a certificate from the insurers
stating that the copy is a true copy of the declarations page of a currently effective
policy and identifies the policy by reference to the policy form which has been filed by
the licensee to the Commission. The licensees are not required to submit
information annually under this part, and would only submit documentation if
alternative proof of financial protection is provided.
Section 140.15(b)(1) states that proof of financial protection for those licensees who
maintain financial protection in whole or in part in the form specified in
Section 140.14(a)(2) (adequate resources to provide financial protection required by
Sections 140.11, 140.12, 140.13 or 140.13a) shall consist of showing that the
licensee clearly has adequate resources to provide the financial protection required
under this part, by filing annual financial statements for the three complete calendar
or fiscal years preceding the date of filing, together with an opinion thereon by a
Certified Public Accountant (CPA). The financial statements shall include balance
sheets, operating statements, and supporting schedules as needed for interpretation
of this information.
Section 140.15(b)(2) states that if the most recent financial statements required by
Section 140.15(b)(1) have been prepared as of a date more than 90 days prior to the
date of filing, similar financial statements prepared as of a date not more than 90
days prior to the date of filing should be included. These statements need not be
reviewed by a CPA.
Section 140.15(c) requires any licensee to file with the Commission such additional
proof of financial protection or other financial information as the Commission
determines to be necessary to determine whether financial protection is being
maintained pursuant to Part 140.
Section 140.15(e) requires licensees to promptly notify the Commission of any
material change in financial protection or in other financial information filed with the
Commission pursuant Part 140.
Section 140.17(a) requires licensees to submit proof to the Commission that
organizations which have issued financial protection policies are legally authorized to

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issue them and do business in the United States, and have clear ability to meet their
obligations.
Section 140.17(b) requires that at least 30 days prior to termination of any insurance
policy, licensees notify the Commission of the renewal of such policy or shall file
other proof of financial protection.
Section 140.18 requires licensees who undertake to maintain financial protection in
the form specified in Section 140.14(a)(2) for all or part of the financial protection
required by Part 140, to file with the Commission such financial information as the
Commission determines to be appropriate to determine whether the licensee is
maintaining financial protection.
Section 140.20(c) specifies that the Commission shall require the immediate
submission of financial statements by those licensees who indicate, after an
assessment of the retrospective premium by the insurance pools, that they will not
pay the assessment. Such financial statements shall include, as a minimum, exhibits
indicating internally generated funds from operations and accumulated retained
earnings. Subsequent submission of financial statements by such licensees may be
requested by the Commission, as required.
Section 140.21 states that each licensee required to have and maintain financial
protection for each nuclear reactor as determined in Section 140.11(a)(4) shall at the
issuance of the license and annually, on the anniversary of the date on which the
indemnity agreement is effective, provide evidence to the Commission that it
maintains the following types of guarantee of payment of deferred premium in an
amount specified in Section 140.11(a)(4) for each reactor it is licensed to operate:








Surety bond,
Letter of credit,
Revolving credit/term loan arrangement,
Maintenance of escrow deposits of government securities,
Annual certified financial statement showing either that a cash flow (i.e., cash
available to a company after all operating expenses, taxes, interest charges, and
dividends have been paid) can be generated and would be available for payment
of retrospective premiums within three months after submission of the statement,
or a cash reserve or combination of cash flow and cash reserve, or
Such other type of guarantee as may be approved by the Commission.

Section 140.22 requires licensees to execute an indemnity agreement with the
Commission that provides for the payment by the Commission of deferred premiums
not paid by the licensee and reimbursement of the Commission by the licensee. The
general forms of agreement to be entered into by the Commission and licensees are
set forth in Section 140.92, Appendix B, and Section 140.93, Appendix C. This
agreement is required to be submitted at the issuance of the license.

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