Thomas W. Ortciger, Director
Illinois Department of Nuclear Safety

Michael E. Klebe, Chief
Division of Low-Level Radioactive Waste Management
Illinois Department of Nuclear Safety

Paul Corpstein, General Manager
Chem-Nuclear Systems

Over the past several years, the low-level radioactive waste (LLRW) industry has experienced a dramatic reduction in the LLRW volumes generated. The LLRW disposal facility sites presently under development were all started in an environment of waste generation that is significantly different than today’s. Projections for the future indicate the industry does not return to greater levels of waste volume generation until the nuclear utility generators begin decommissioning and decontamination (D&D) activities at their nuclear power generating plants. This paper illustrates the various economic realities and assesses the impact of declining volumes using an analytical financial model tailored to Illinois site development, construction, operating, and closure costs. Model application methods, lessons learned in the two year modeling effort, and model results are included in the paper. The model results show that the economic feasibility of developing, constructing and operating a LLRW disposal facility is not feasible at today’s LLRW volumes. The modeling results also show that it is not until utilities start to generate D&D waste volumes that the economics become cost competitive. The paper also describes how Illinois used the results to formulate and implement a new siting strategy that ties future site development to economics.

In 1983, the Illinois General Assembly passed the Illinois Low-Level Radioactive Waste Management Act (Management Act), which established the initial framework for siting a low-level radioactive waste (LLRW) disposal facility in Illinois. The Central Midwest Interstate Low-Level Radioactive Waste Compact was formed in 1984 and ratified by Congress in 1986. The compact consists of the state of Illinois and the commonwealth of Kentucky. In 1986, the Illinois Department of Nuclear Safety (IDNS) initiated siting activities for the development of a LLRW disposal facility in Illinois and began implementing the requirements outlined in the Management Act. In 1987, the Central Midwest Interstate Low-Level Radioactive Waste Commission designated Illinois as host state for the first regional disposal facility based on the fact that Illinois produces 98% of the region’s LLRW.

While no new disposal sites had opened for business in the recent past, Illinois was confident it was following a path to successful site development. By the early 1990’s, Illinois’ efforts seemed to be paying off. A site for the development of a LLRW disposal facility had been selected near Martinsville, Illinois; the site was characterized; a facility had been designed; and the license application was under review by IDNS. During this period, as shown on figure 1, LLRW volumes were fluctuating and it appeared that these fluctuations would have little or no lasting effect on the economics related to funding site development activities and providing economically sufficient volumes of LLRW to the disposal facility. The Martinsville site was ultimately dropped from further consideration based on the findings of the Illinois Low-Level Radioactive Waste Disposal Facility Siting Commission.

An additional financial reality appeared during the late 1980’s through middle 1990’s. The rates for disposal were increasing for commercially available disposal space due to increases in the cost of operation and the imposition of federal or state mandated surcharges. The federal surcharges were identified in the federal Low-Level Radioactive Waste Policy Amendments Act of 1985. The state surcharge was levied by the state of South Carolina and the Southeast Compact Commission. Disposal rates increased from less than $30 per cubic foot in the mid-1980’s to $315 per cubic foot in the mid-1990’s (see figure 2). These costs are for disposal at a facility that had long-since been depreciated and only needed to recover the cost of operations, required long-term maintenance fees, payments to local community and operator profits. Any facility developed today would need to recover the cost of site acquisition and facility construction in addition to the costs listed previously.

As a leading producer of LLRW, Illinois has always led the way in the development strategy for new LLRW disposal facilities. Illinois now leads the way in evaluating possible scenarios where not only safety in design is paramount, but economic value is factored into the strategic planning. For the state to attain its goal of providing an economically viable LLRW site for Illinois’ generators, analyses needed to be performed that would evaluate all available options and give the decision makers (IDNS, LLRW generators and Chem-Nuclear Systems, the facility developer), the necessary information on which to base their strategic planning decisions. The method chosen and the plan implemented are described below. Two key factors in the process are the development of a rate forecasting model and close interaction among all parties to evaluate and determine which model options produce the desired results.

This modeling effort, which includes the methods and techniques used and the results produced, are original work products developed by IDNS, several Illinois LLRW generators and the facility development contractor. This effort had not been conducted before and represented a unique set of solutions that served as the basis for the state of Illinois to plan its new site development program. A key factor in the model planning was the analysis of the economics of constructing, operating and closing a LLRW facility in current and projected markets. IDNS, on behalf of the state of Illinois, contracted with David M. Griffith & Associates, LTD (DMG) to develop a computer model which evaluated the costs associated with constructing, operating and closing a disposal facility under various development scenarios. These scenarios included numerous LLRW volumes, site designs, financing arrangements and operating schemes to allow Illinois to select the most efficient and potentially the most successful path to developing safe and cost effective disposal capacity in Illinois.

The DMG model was developed as a spreadsheet cashflow model which allows the modelers to simultaneously simulate numerous variables to derive various results. The model was developed in LOTUS for Windows. Each variation of the model evaluated a multi-year construction period and an operational period through the year 2052. The model is capable of analyzing the impacts of varying the input parameters and expressing the results in terms of the cost per cubic foot for waste disposal. Once the basic calculational spreadsheet model was written and calibrated, it was relatively easy for the analysis group at DMG to change the input parameters to "tune" the results to achieve the optimal input parameters as measured by disposal cost per cubic foot of waste. Following are discussions and descriptions of the major variable input parameters having the largest effect on the model results.

Different mechanisms for financing the construction of the facility and state versus private operation of the facility were considered as variables to test the impact these options had on disposal fees. Additionally, although less impacting, various inflation rates, federal, state and local tax rates, and contractor rates and profits were used.

The design which existed in Illinois at the time the modeling began was the facility design created to meet the performance characteristics of the Martinsville Alternative Site. This facility was designed to operate for 50 years. Its aesthetically pleasing and durable campus-like design had side-loading engineered earthen cap-covered reinforced concrete disposal modules designed to accept overpacked, predominately normal operating waste (NOW) from Illinois’ LLRW generators, and had an expected steady stream of waste totaling approximately 9 million cubic feet.

While this design was suitable for the waste volumes being generated in the late 1980s and early 1990s, it required modification in two ways to meet waste volumes projected for generation in the late 1990s and early 2000s. The modifications included: 1) the design for a facility operating in the future would need to accept much larger components which are not practically or easily overpacked; and 2) the site would need to accept waste in surges, for example, from storage collected during site development and from decommissioning of the nuclear power plants.

To evaluate and determine optimal user fees, the model was run using the original Martinsville design reduced in scale to reflect the smaller waste volumes and incorporated a specially designed end loaded module to accept large reactor components. Major changes to the Martinsville design to allow the disposal of less NOW, more decontamination and decommissioning waste (D&D), and also to accommodate surges of waste volumes included:

• pre-fabricated construction-grade site buildings;
• smaller administration building;
• smaller maintenance/utility building;
• pre-fabricated and smaller visitors center;
• eliminated waste packaging building (overpack/grout operations will be conducted inside a constructed disposal module);
• reduced number of side loading disposal modules from 250 to 50 and reduce disposal units from 5 to 1;
• reduce operations staff from 100 to 29;
• construction and disposal operations campaigned during favorable-weather months;
• added large component disposal modules to accept large reactor components without size reduction or over-packing;
• large component modules constructed in pairs with opposing ends open to allow large components to be "driven in," set on sacrificial cradles and surrounded/shielded by lower activity materials and interstitially filled with sand;
• reduced capital construction expenditures from $62 million to $28 million;
• reduce annual operating cost from $21 million to $5.7 million.

At the time the Martinsville license application was submitted in 1991, the volume of waste projected to be received at the facility over its 50-year operational period was approximately 9 million cubic feet, or 180,000 cubic feet per year. It was expected at that time that the nuclear power generating plants would extend their operating licenses (Plant Life Extension or PLEX) to continue operating (and generating NOW waste) during most of the 50-year operational period. Based on this assumption, all of the LLRW was classified as NOW waste. If the nuclear power plants did shut down during the operational period of the facility, they would not undergo immediately D&D, but would be placed in a safe storage (SAFESTOR) condition to allow irradiated materials to decay in-place rather than be immediately removed for disposal.

The participants in the modeling effort performed a current and future waste generation analysis to define the design and the construction and operational costs for the anticipated operational period of the site (2003 to 2052). The waste volume generation analysis was more complex than those previously completed to support the Martinsville design and license application due to volume reduction practices and generator plans to D&D power plants as soon as their operating licenses expire, as opposed to PLEX or SAFESTOR.

The analysis revealed there were two primary scenarios which reflected the most likely waste volume generation from 2003 to 2050. These two scenarios differ only in whether there will be storage of LLRW in Illinois from 2003 to 2012, or whether LLRW generated from 2003 to 2012 will be sent out-of-compact for disposal. The analysis also revealed that:

1. NOW waste generation will be stable until 2012 when the first D&D waste is generated;
2. D&D waste will be generated from 2012 to 2019 and then again from 2025 to 2032;
3. D&D waste volumes represent 5 to 10 times the NOW volumes;
4. After D&D is completed, LLRW generation is minimal;
5. The difference between a surge from storage and no surge from storage amounted to 286,000 cubic feet of LLRW; and
6. The total anticipated LLRW requiring disposal is 3,688,000 cubic feet or an average of 73,800 cubic feet per year.

These volumes are based on a start of disposal operations in 2003 or 2012; disposing of the storage surge during the first three years of operation; and operating the facility for 50 years.

Using the values from the waste generation analysis and the financing/design variations, the modeling group selected several scenarios for disposal site design and operations. Additionally, using the financing/operation variations several scenarios were established for the model to analyze. The model calculated the Total Revenue Required, and the Average Rate (cost per cubic foot) for years 1-5, years 1-10, and years 1-closure (for the non-surge years operations start in 2012, hence operations were modeled over 42 years instead of 50 years). The design/operations were modeled using the following five scenarios.

• Scenario 1 - Reduced volume design for NOW waste with whole large reactor component disposal in specially designed and constructed modules. Operation of the disposal facility would commence in 2003. Fifty-year volume was assumed to be 3,688,000 cubic feet.
• Scenario 2A - Reduced volume design for NOW waste with large reactor components cut to fit into existing (Martinsville design) disposal modules or the 30 X 30 feet central aisle. This limits the cross-sectional size of components for disposal to approximately 20 feet. Operation of the disposal facility would commence in 2003. Fifty-year volume was assumed to be 3,688,000 cubic feet.
• Scenario 2B - Same as scenario 2 except large components must be cut-up to fit into an overpack. This limits the size of reactor components to 8 X 8 X 10 feet. Operation of the disposal facility would commence in 2003. Fifty-year volume was assumed to be 15,340,000 due to the increase in volume resulting from cutting and overpacking the large components.
• Scenario 3A - Reduced volume design with large whole reactor component disposal in specially designed and constructed disposal modules with a surge of waste from storage. LLRW generated between 2003 and 2012 is assumed to be stored in Illinois during this period and would be sent to the Illinois facility during the first three years of operation (2012 to 2014). Operation of the disposal facility would commence in 2012. Fifty-year volume was assumed to be 3,688,000 cubic feet.
• Scenario 3B - Same as Scenario 3A except the waste generated between 2003 and 2012 is sent out-of-compact for disposal. It was assumed that the waste was sent to CNS’ Barnwell facility for disposal. Operation of the disposal facility would commence in 2012. The forty-two year volume was assumed to be 3,402,000 cubic feet.

The model calculated the cost of disposal per cubic foot of waste disposed using multiple variables and different design/operating scenarios. The results of the model calculations showed that both variable inputs and design inputs effected the outcome. For example, using scenario 1, CNS contract variables resulted in an average cost per cubic foot of $938 (years 1-5), $617 (years 1-10) and $267 (years 1-50) versus using State finance and operation variables which resulted in a cost per cubic foot of $442, $390 and $202 respectively. Using these same variables but a different scenario (3A) resulted in a CNS contract cost per cubic foot of $197 (years 1-5), $193 (years 1-10) and $234 (years 1-42) versus a State finance and operation cost per cubic foot of $133, $141 and $185 respectively. Table 1 shows a comparison of the 4 scenarios evaluated with either Chem-Nuclear Systems financing and operation or State of Illinois financing and operation.

Table 1: Comparison of Economic Model Results

The model clearly shows that there is a cost-per-cubic-foot sensitivity to disposal volumes, disposal designs, operating schemes, and financing variables. The State finance-State operation scenarios result in lower projected disposal costs due to the lower cost of capital, the longer period to recoup the capital investment, no profit requirements and the economic treatment of taxes and depreciation. At this time, there are no statutory provision that allow state financing or state operation. While there were many more scenarios run than are discussed in this paper, the model clearly provided results which needed to be factored into the state’s strategic planning for the facility development process.

Following the conclusion of the state’s first siting effort in 1992, the Illinois General Assembly amended the Management Act to address problems that existed in the original process. The Illinois Low-Level Radioactive Waste Task Group was formed and a new siting process was established for the development of a regional LLRW disposal facility in Illinois. Subsequent to that amendment, both the national and the state LLRW disposal options continued to change.

By the end of 1996, national LLRW disposal conditions had again stabilized, resulting in conditions significantly different than those in 1990. The changes that have occurred over the past several years strongly suggest that the need to develop a LLRW disposal facility in Illinois should be reevaluated. These changes included:

• the continued availability of disposal capacity outside of Illinois;
• a significant reduction in the volume of LLRW being generated in Illinois;
• the decision by the nuclear utilities not to seek plant life extension nor to delay decommissioning following the termination of their operating licenses; and,
• the desire to improve the site selection process.

As with most commercial business ventures, financial considerations play a significant part in the development strategies. For Illinois, the cost of developing the Martinsville site would have resulted in a disposal facility which would have been uneconomic. To prevent this situation from occurring in the future, IDNS undertook the modeling effort herein described. The first step was the evaluation of a design which accommodated both reduced volumes and a different mix of LLRW types, specifically, large volumes of D&D waste. The second step was the evaluation of when these wastes would be generated and when they would be available for disposal.

Based on the above factors, in late 1996, the Illinois General Assembly realized that changes needed to be made to the Management Act to reflect present and future economic realities. An amendment was drafted and a final version was adopted to reflect these factors. The amendment sets the groundwork for the development of a revised site selection process that concentrates on volunteered sites. From a schedule perspective, the amendment delays the development of a regional LLRW disposal facility until the next century to take advantage of the currently available out-of state disposal capacity. In addition, as predicted by the modeling results, the facility development process should be timed such that the facility will be available when the volumes of LLRW are large enough to make the project financially viable.

The IDNS, the state’s LLRW generators and the facility developer recognized that the decline in waste volumes might impact the economic viability of the planned regional disposal facility and realized the need to reevaluate the development strategy. An economic cashflow model was developed that could be used as a tool to evaluate various development strategies. The input parameters such as waste volume projections, capital construction cost, period for recouping capital investment, annual operating expense, interest rates and profit can be varied depending on the development scenario being considered.

Based on the use of this model, it was determined that developing the disposal facility given the reduced waste volumes would yield a facility that was not economically viable. It is not until waste volume generation rates increase due to the decommissioning of the nuclear power stations that the facility becomes economically viable. An amendment to the Management Act was passed that delays the disposal facility development schedule until the waste volumes increase. The new process requires the coordination of site selection with the waste volume projections. The amendment does not alter the role of the Task Group or the importance of the site-selection criteria the group developed. All parties involved remain committed to developing a safe and economically viable regional disposal facility.

1. Chem-Nuclear Systems, personal communication between P. Corpstein and J. Latham, October 1997.
2. David M. Griffith and Associates, LTD., "Rate Forecasting Model, Users Manual." Unpublished Work Product of the Illinois Department of Nuclear Safety, January, 1996.
3. Illinois Low-Level Radioactive Waste Management Act, 420 ILCS 20/1, amended July, 1997.
4. Klebe, M., T. Henry, and P. Corpstein, "Significant Progress Towards Development of the Low-Level Radioactive Waste Disposal Facility in Illinois," in Waste Management ’96, Tucson, AZ, March, 1996, R. Post, Ed.
5. Manifest Information Management System (MIMS), operated for the US DOE by Lockheed Martin Idaho Technologies Company. Internet address: http://www.mims.inel.gov/.

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