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

3.21
ownership. The constant dollar weighted average cost-of-money rates and ranges (excluding
an inflation premium) used in the levelized unit cost estimates are 10 + 4%, 7 + 3%(a) and
7 + 2% for private industry, Federal, and utility ownership, respectively. Also included
in the unit cost calculations are property taxes and state income taxes as well as Federal
income taxes, accident and hazard insurance, and investment credits.
For this Statement, most unit costs are based on a 15-yr economic plant life. The text
notes when plant lives other than 15 years are used, as in some of the storage facilities.
However, because of the cost-of-money effect over long time periods at the rates employed
here, plant lives longer than 15 years have only a small effect on unit costs. Although it
is not anticipated, the entire facility could be replaced after 15 years with no increase
in unit costs (in constant dollars) beyond those estimated here.
3.2.8.3 Uncertainty Ranges for Cost Calculations
Uncertainties in the levelized unit cost estimates were derived from uncertainties cal-
culated for three components: 1) capital costs, 2) operating costs, and 3) the cost of
money. The range for capital costs reflects uncertainties in the definition of the engi-
neering scope required to provide a fully-functional plant based on the technology described,
as well as uncertainties in the pricing and quantities for labor, materials, and equipment.
A contingency covering these and similar factors has been included in the base capital cost
estimate. The uncertainty for capital costs ranges from about +20% to +45%, depending on
the facility and equipment, with a median uncertainty of about +30%. The uncertainty in the
operating costs for most facilities is estimated to range from +50% to -25%.
Because of the capital-intensive nature of the nuclear industry, the dollar value of
the capital charge uncertainty generally overshadows the dollar value of the operating cost
uncertainty for most of the facilities evaluated. A weighted overall uncertainty range was
calculated for each unit cost based on the three component uncertainties. A statistical
analysis of several example unit cost calculations, assuming a normal random distribution
of uncertainty around the three variables, indicates that there is a 95+% probability of
being within the total uncertainty range cited for each levelized unit cost.
3.2.8.4 Cost Estimates for Transportation
The unit cost development for waste transport was somewhat different than for other
waste management facilities.
Estimates of capital costs of transportation equipment were made assuming the equipment
is supplied repetitively by qualified vendors on a competitive basis. The capital cost
estimate covers costs for the complete transportation system including the cost of the cask,
(a) Use of the 7% cost of money or discount rate for a Federal project is based on the
assumption that a full cost recovery methodology would be adopted similar to that described
in DOEEEIS-0015, Vol. 4., where possible charges for AFR storage of spent fuel
are described and a 6.5% discount rate is employed. The +3% range encompasses the 10%
rate specified in the 1972 OMB circular No. A-94 for use in evaluating government projects.
The basis for the private industry and utility discount rates is described in
DOE/ET-0028, Vol. 1.