Management of Commercially Generated Radioactive Waste - U.S. ...

3.20
not meant to imply that inflation will not occur; rather, cost relationships can be more
easily understood and placed in perspective if they are stated in constant dollar terms.
Over the long term, the estimated costs developed in this study will increase at a rate com-
parable to the general rate of inflation.
Capital costs were derived by estimating requirements for major equipment, buildings
and structures, site improvements, and construction labor. Factors were then applied to
these direct cost estimates to generate other direct costs, indirect costs, architect-
engineer costs, owner's staff costs during construction, initial inventory costs and other
startup costs.
Operating costs include all cost items identified with operation. The number of man-
hours, quantities of materials, and requirements for utilities were derived in each case
from the facility descriptions. The allowances for maintenance, overhead, and miscellaneous
costs were derived by applying factors to either capital or direct labor costs.
The capital and operating cost methodology outlined above is used to estimate all of
the costs given in this Statement except for those of the transportation facilities (cost
development for transportation is discussed separately in Subsection 3.2.8.4). An allowance
for working capital is also provided. Working capital is defined as the cash required to
operate a facility, i.e., the difference between current assets and current liabilities.
This cash is treated as an outflow of funds during the first year of plant operation and as
an inflow during the last year of operation. Working capital requirements are estimated at
50% of the first year's operating cost.
The cost of waste management in this Statement also includes the cost of facility
decommissioning. Specific cost estimates were developed for decommissioning a reference
spent fuel storage facility, mixed oxide fuel fabrication plant, and fuel reprocessing
plant. Based on these estimates, the costs to decommission individual waste management
facilities not otherwise included in the decommissioning of these primary facilities were
estimated at 10% of their capital costs (except for underground repository facilities for
which separate estimates were made). These costs are incorporated in the levelized unit
cost calculations for these waste management facilities. The costs of decommissioning FRP
and MOX-FFP facilities are included in the waste management system costs (Section 7.6).
3.2.8.2 Bases for Levelized Unit Cost Estimates
Levelized unit costs are capital and operating costs translated into equivalent, con-
stant (or level) annual unit costs. The unit cost is sufficient to pay any interest charges
on debt; pay all operating expenses, taxes and insurance; earn a specified return on out-
standing capital; and recover the capital investment over the life of the project. In sum-
mary form the levelized unit cost relationship can be expressed as:
Levelized Unit Cost Annualized Capital and Operating Costs
Levelized
Unit Cost Annualized Units Processed
Since the calculated unit costs are a function of taxes and returns on equity and debt,
ownership for each facility is defined as either private industry, Federal, or utility