COST ESTIMATINGAND
DECOMMISSIONING FUNDING
IAEA/ANL
ChicagoApril 2012
Joseph E. [email protected]
423-596-5079
2
Cost Estimating&Decommissioning Funding
– Understand Purpose And Types Of Estimates Advantages/Disadvantages
– Understand And Describe The Approaches Used For Cost Estimating
– Obtain A Basic Understanding Of The Cost Estimating Elements/Terminology
– Identify Key Factors Affecting The Cost Estimate Results
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Introduction:Purpose
• Assures Adequate Funds Identified• Establishes Bases For:
– Funding Approvals– Evaluating Contractor Bids– Evaluating Options– Risk Management– Communications Tool
• Satisfies Regulatory Requirements • Establishes Oversight Confidence
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Introduction:Accuracy
• Association for the Advancement of Cost Engineering (AACE) Definitions:– Order of Magnitude CE -30% to +50%
• W/O Detailed Engineering Data (Scaling factors/ratios)• Scope not well defined
– Budgetary CE -15% to +30 • Scope defined – Have Site Plans/Drawings/Equipment
– Definitive CE - 5 % to +15%• Accurate Site Drawings/Records Available
(Examples - Plot Plans/Elevations, P&IDs, Equipment Data Sheets)
• Scope Well Defined/Characterization/Approach
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Introduction:Quality
• Poorly Prepared or No CE May Result In:– Insufficient Funds – Re-planning / Re-Baselining– Poor Public Relations/Loss of Confidence– Non-compliance– Risk exposure– Poor Stewardship
• “Black Box” Cost Estimates Not Sufficient.
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Background:Funding Requirements
• National Systems Vary – Similar - Polluter Pays Principle• Adequate Reserves Set Aside For Decommissioning.• Periodic Contributions From The Operators, Obtained From
Charging The Consumers From The Sale Of Electricity. Methods Vary:– Some Power Plants Operators Apply A Percent To The Kwh Sold– Some Determine A Fixed Fee On Each Kwh.
• Contribution Amount Is Revised Periodically – Typically Every Year
IAEA-TECDOC-1476
7
Background:Funding Requirements
• Cost Goal Is Revised Less Frequently (three to five years)• Estimates revised to address the future costs of decommissioning
and waste management. • Based on given strategy, disbursement forecast, waste costs and
other key financial parameters (inflation, discount rate) and allowing for some long-term contingencies.
• Objective – Obtain Adequate Funding Level To Conduct Decommissioning At End Of Life.
IAEA-TECDOC-1476
8
Background:U.S. Funding Requirements
U.S. Power Reactors(10 CFR 50.75)
- NRC Minimum PWR – $105MM, BWR $135MM - Minimums
Adjusted Over Time
- Funds Collected From Rate Payers- Financial Assurance - Update Report Every Other Year
U.S. Non-Power Reactors(10 CFR 50.33 & 50.75)- No NRC Minimum- Decommissioning Report (10 CFR 50.33)- Financial Assurance Required
Other Facilities - Fed Government Sites Funds Collected From Taxpayers
• No Generic Minimum Required • Congressional Funding Allocated (Yearly)
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Background:U.S. Efforts to Address D&D CE
• 1986 Guidelines Report (AIF/NESP-036)– “Guidelines for Producing Commercial Nuclear
Power Plant Decommissioning Cost Estimates”• Approach –
– Unit Cost Factors and Detailed Plant Inventory• Widely Accepted
– PUC– Federal Funding Agencies – NRC /DOE– IAEA
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Background:International Efforts
• International Efforts To Address Costs– 1994 - International Task Group established to evaluate large
variations in D&D cost estimates. – 1995 - IAEA began developing a technical document on cost
of radioactive waste management and decommissioning of nuclear facilities
– 1994-1998 the European Commission (EC) working on establishing a database for decommissioning costs.
• Groups Agreed To Work Together To Develop Standardized/Uniform Cost Items And Definition For Use In Developing Decommissioning Costs.
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Background:Tools and Applications
• Commercial Estimating Software Available– RACER– POWERtool– Omega – Others
• Use Existing Data Of Activity Estimates/Rates, Based On Actual Data From Other D&D Projects, To Use On Future D&D Projects
• Simple Projects May Not Need Expensive Software
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Preparing A Cost Estimate:Key Cost Elements
Activity-dependent Costs
Period-dependent Costs
Collateral Costs/Special Items Costs
Contingency
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Preparing A Cost Estimate:Activity-Dependent Costs
“Hands –On” Activities -Clearly Defined Tasks/Normally Repetitive Removal Decontamination Packaging Shipping Burial
Unit Cost Factor Approach Used to Develop Site-specific Unit Cost Factors
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Preparing A Cost Estimate:Period-Dependent Costs
• Directly Related To Project Duration• Necessary Functions For Program Management
– Engineering, Administration, Quality Assurance, Licensing, Operations, Maintenance, Security and Radiation Protection, Planning/Scheduling, Field Supervision
• Staff Composition/Level – Synchronized With Decommissioning Phases And Support Requirements
• Costs – Direct (Base Salaries)– Indirect Overhead (Fixed And Variable Components)– Transition, Severance, Training And Retention
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Preparing A Cost Estimate:Collateral / Special Item Cost
• Insurance, Taxes, Permits, Fees• Engineering
– Contracted or Off Site Support.
• Other Costs– Material/Supplies– Identified As a Cost Not Captured Elsewhere
• Scrap• Salvage
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Preparing A Cost Estimate:Contingency
• Definition* “specific provision for unforeseeable elements of cost within the defined project scope; particularly important where previous experience relating estimates and actual costs has shown that unforeseeable events which will increase costs are likely to occur.”
• Provides Funding Assurance• Not a Safety Factor & Expected to Be Spent • Industry Wide Acceptance • May be built into each activity or applied as line
item or project specific
* Association for the Advancement of Cost Engineering International
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Preparing A Cost Estimate:Work Breakdown Structure
• Work Breakdown Structure (WBS)– A deliverable oriented hierarchical work activity description – Organizes/defines the total scope of the project– Used for budgeting and Should correlate to final work packages – Each descending level provides detailed description of the work
to be performed – Track major elements against decommissioning costs. Generally
arranged in a hierarchical format with top level is overall project
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Preparing A Cost Estimate:Work Breakdown Structure - Level 5 Example
X ResearchReactor
1
Pre-planning1.1
DecommissioningPlanning
1.3
DecommissioningActivities
1.4
TransitionActivities
1.2
Etc.1.x
DecontaminationPrimary Systems
1.4.1
DecontaminationSecondary Systems
1.4.2
Dismantleequipment in
Room 1A1.4.3
Etc.1.4.x
General deconof room1.4.3.1
Remove allpiping1.4.3.2
Remove tank1A-2
1.4.3.3
Remove tank1A-2
1.4.3.4
Etc.1.4.3.x
Ensure pipingIs drained1.4.3.2.1
Disconnect Pipingfrom tank 1A-1
1.4.3.2.2
Disconnect Pipingfrom tank 1A-2
1.4.3.2.3
Etc.1.4.3.2.x
Dismantleequipment in
Room 1B1.4.3
From IAEA Presentation
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Preparing A Cost Estimate:Work Element Definition Sheet – Example
WBS No. Sequential Number of specific ActivityWBS Title: Title of Tasks To Be PerformedWBS Description of the Work:
This section describes specific tasks necessary to complete the Activity.
WBS Deliverable:
Describes the End Point Criteria for the Specific Tasks.
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Preparing A Cost Estimate:Standardizing Cost Estimate Elements
• A PROPOSED STANDARDISED LIST of ITEMS FOR COSTING PURPOSES in the DECOMMISSIONING OF NUCLEAR INSTALLATIONS - Interim Technical Document
– Developed by International Agencies:• The European Commission (EC)• International Atomic Energy Agency (IAEA)• OECD/Nuclear Energy Agency (NEA)
– There is an ongoing effort to standardize decommissioning aspects, definitions and cost items for decommissioning projects.
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Preparing A Cost Estimate:Standardizing Cost Estimate Elements
• A PROPOSED STANDARDISED LIST - Interim Technical Document
– 01 PRE-DECOMMISSIONING ACTIONS– 02 FACILITY SHUTDOWN ACTIVITIES– 03 PROCUREMENT OF GENERAL EQUIPMENT AND MATERIAL– 04 DISMANTLING ACTIVITIES– 05 WASTE PROCESSING, STORAGE AND DISPOSAL– 06 SITE SECURITY, SURVEILLANCE AND MAINTENANCE– 07 SITE RESTORATION, CLEANUP AND LANDSCAPING– 08 PROJECT MANAGEMENT, ENGINEERING AND SITE SUPPORT– 09 RESEARCH AND DEVELOPMENT– 10 FUEL AND NUCLEAR MATERIAL– 11 OTHER COSTS– 12 COST GROUPS
Preparing A Cost Estimate:Overview
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1.Define Work
Scope
3.Collect
Information
2.Determine
Options
6.Develop
UCF & ProductivityFactors
4.Define
Assumptions
5.ID Activities
& Tasks
7.Develop Activity
Estimates
9.Prepare Final CostEstimate/Schedule
8.Develop
Project Schedule
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Preparing A Cost Estimate:First Things First
SCOPE:– This Bounds the Cost Study and Describes The
Overall Approach
OPTIONS:– Determines What Scenarios will be included in
the Cost Study such as Prompt Decon.
1.Define Work
Scope
2.Determine
Options
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Preparing A Cost Estimate:First Things First
Obtain Site Specific Data
– Physical Equipment Site/System Walk downs– System Inventories including:
Pipes– Valves– Tanks– Motors– Conduit
– Building Structures – Dimenstions/Material– Walk downs/Site Drawings– Interviews/ Document Reviews– Site Data including survey maps,
characterization data
2.DetermineOptions
4.Define
Assumptions
3.Collect
Information
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Preparing A Cost Estimate:Assemble the Cost Estimate – Site Inventory
Inventory and Other Data
2.DetermineOptions
4.Define
Assumptions
3.Collect
Information
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Preparing A Cost Estimate:First Things First
Identify ALL Attributes of Data Collected
– Physical Equipment Site/System Walk downs– Number of each– Size/Weight of Equipment– Unique Features – Asbestos, lead– Unique Identifier if available– Location (i.e.15 Meters above floor)– Separate by Location/Room
– Hazardous Material – Specific amounts/locations – Building Structures– Walk downs/Site Drawings – Document Rev. #– Interviews – Clear and concise
Take Pictures/Use Archived Construction Photos
2.DetermineOptions
4.Define
Assumptions
3.Collect
Information
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Preparing A Cost Estimate:First Things First
Assumptions Affect Approach & Costs (+ or -)
– Technical– Scope, Contamination Levels, Quantities, Subcontracts– Scrap/Salvage, Plant Conditions– Radiation Conditions, Activation Modeling
– Waste Handling & Disposition– Cost
– Present Year Dollars?, Rates, Escalation, Interest, etc.– Labor Costs (severance, security, salaries)
– Funding– Multi-year, Single Year, etc.
– End State– Remaining Contamination Levels– Remaining Site Condition
4.Define
Assumptions
3.Collect
Information
5.ID Activities
& Tasks
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Preparing A Cost Estimate:First Things First
End state / End point
– A facility is decommissioned when an approved End state has been reached.
– Subject to national legal and regulatory requirements, this end state encompasses partial or full decontamination and/or dismantlement, with or without restrictions on further use.
4.Define
Assumptions
3.Collect
Information
5.ID Activities
& Tasks
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Preparing A Cost Estimate:
Identify Activities or Tasks
Activities and TasksUse Data Collected to Assemble
Activities for Removal– Group By Equipment Types– Tasks– Using Site and Building Drawings, Divide
Into Most Like Areas– Identify Unique Factors
6.Develop
UCF & Prod. Factors
4.Define
Assumptions
5.ID Activities
& Tasks
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Preparing A Cost Estimate:
Identify Activities or Tasks
6.Develop
UCF & Prod. Factors
4.Define
Assumptions
5.ID Activities
& Tasks
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Preparing A Cost Estimate:Unit Cost Factors
Establish Unit Cost Factors
Develop Specific Cost For Each Type Of Task Under Ideal Conditions
EXAMPLE:
Example:UCFRemoval of contaminated pump motors which are
300 -1000 pounds
Description of UCF:Motors for pumps 300 to 1,000 lbs will be manually removed by chain falls or small hoists. The motor will be transferred to the waste processing area for final disposition.
5.ID Activities
& Tasks
7.Develop Activity
Estimates
6.Develop
UCF & ProductivityFactors
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Preparing A Cost Estimate:Identify/Apply Productivity Factors*
Adjust Activities or Tasks Based on Site Specific Conditions that affect worker performance:
– Heat Stress– Accessibility / Close environments– Controlled Access / Security– Typical Examples
• Respiratory Protection: 10 to 50% inefficiency• ALARA 10 to 50% inefficiency• Protective Clothing 15 to 30% inefficiency• Accessibility 10 to 20% inefficiency• Work Breaks 8 to 10% inefficiency• Productivity 10 to 15% inefficiency
* Also Referred To As Work Difficulty Factors
5.ID Activities
& Tasks
7.Develop Activity
Estimates
6.Develop
UCF & ProductivityFactors
33
Preparing A Cost Estimate:Assemble the Cost Estimate – Use UCF and PF
6.Develop UCF & PF
8.Develop
Project Schedules
7.Develop
Activity Estimates
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Preparing A Cost Estimate:Assemble the Cost Estimate – Integrate Results
69
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Removal of contaminated pump motors, 300-1000 pound
Motors for pumps 300 to 1,000 lb will be removed by chain falls or smallhoists. The motor will be transferred to the waste processing area.
Act Activity Act. CrtID Description Dur Dur---------------------------------------------------------------------------a Verify equipment de-energized & disconnected 30 30b Rig for removal 15 (a)c Remove motor from supports and pump 15 15d Remove motor, wrap in plastic and remove to waste processing area
20 20----- -----
Totals (Activity/Critical) 80 65Duration adjustment(s):+ Respiratory protection adjustment( 50 % of critical duration ) 32+ Radiation/ALARA adjustment( 37.08333 % of critical duration ) 24
-----Adjusted work duration 121+ Protective clothing adjustment ( 30 % of adjusted duration ) 36
-----Productive work duration 157+ Work break adjustment( 8.33 % of productive duration ) 13
-----Total work duration 170 min
*** Total duration = 2.833 hr ***
Preparing A Cost Estimate - UCF Example
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Removal of contaminated pump motors,300-1000 pound (cont'd)
Crew Number Duration Rate Cost(hr) ($/hr)
--------------------------------------------------------------------------Laborers 2.00 2.833 $34.59 $195.99Craftsmen 2.00 2.833 $43.06 $243.98Foreman 0.50 2.833 $43.98 $62.30General Foreman 0.13 2.833 $44.98 $15.93Health Physics Technician 1.00 2.833 $46.00 $130.32
---------Total labor cost $648.52
Equipment Costs noneConsumables/Materials Costs-Blotting paper 100 @ $0.45/sq ft { 2} $45.00-Plastic sheets/bags 100 @ $0.11/sq ft { 3} $11.00
---------Subtotal cost of equipment and materials $56.00Overhead & profit on equipment and materials @ 16.500 % $9.24
---------Total costs, equipment & material $65.24
TOTAL COST Removal of contaminated pump motors, 300-1000 pound$713.76
Total labor cost $648.52Total equipment/material costs $65.24TOTAL CRAFT LABOR man-hours required per unit 15.936
Preparing A Cost Estimate - UCF Example
37
Preparing A Cost Estimate:Assemble the Cost Estimate – Integrate Project Schedules
EXAMPLE
8.Develop
Project Schedules
7.Develop
Activity Estimates
9.Develop FinalCost/Schedule
8.Develop
Activity Estimates
38
Preparing A Cost Estimate:Develop Final Cost Estimate
39
Example: Decommissioning Cost Elements:Example: Decommissioning Cost Elements:
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Example: Decommissioning Cost Elements:Example of WBS Schedule
Example: Decommissioning Cost Elements:Example of WBS Schedule
WBS # Task Name
Labor Hours
(x 1000)
Budget (includes labor) (x 1000€)
T = - 3 Months T = 0
T = 3 Months
T = 6 Months
T= 9 Months
T = 12 Months
T = 15 Months
T = 18 Months
T = 24 Months
1 Decommission Research Reactor 20001.1 Pre-shutdown planning 301.2 Final Shutdown === Milestone1.3 Preliminary Studies 301.4 Project Execution 1905
1.4.1 Decommissioning Activities 17401.4.1.1 Decon/Remove Auxilary Systems 8701.4.1.2 Decon/Remove Reactor Systems 8701.4.2 Final Status Surveys 1501.4.3 Confirmatory Surveys 151.4.4 License Termination === Milestone1.5 Closeout Actions 35
1.5.1 Non-radiological remediation 251.5.2 Demobilization 51.5.3 Closeout Documentation 5
From IAEA Presentation
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SUMMARY:• Quality CE and Up-Front Planning is Critical
• Don’t Underestimate The Value Of Your Assumptions
• Site Specific CE Necessary for Near Term D&D– Keep CE Up-To-Date (Decommissioning Is Imminent)
• Cost Study Used To Develop Baseline
• Don’t Reinvent – Use Proven Software and Expertise
• Contingency Is An Integral Part of the Cost Estimate
• Don’t Underestimate “soft” costs - Engineering and Licensing Support
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