BVY 10-020, 2009 Financial Test for Decommissioning Fund Parent Guarantee

2009 Financial Test for Decommissioning Fund Parent Guarantee

ML100970035
Person / Time
Site:	Vermont Yankee File:NorthStar Vermont Yankee icon.png (DPR-028)
Issue date:	03/30/2010
From:	Devincentis J Entergy Nuclear Operations
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
BVY 10-020, TAC ME0583
Download: ML100970035 (11)

Text

Entergy Entergy Nuclear Operations, Inc.

Vermont Yankee P.O. Box 0250 320 Governor Hunt Road Vernon, VT 05354 Tel 802 257 7711 James M. DeVincentis Licensing Manager BVY 10-020 March 30, 2010 ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 20555

References:

2009 Financial Test for VY Decommissioning Fund Parent Guarantee`

Vermont Yankee Nuclear Power Station Docket No. 50-271 License No. DPR-28 (1)

Letter, NRC to VYNPS, "Decommissioning Funding Status Report for Vermont Yankee Nuclear Power Station (TAC No. ME0583),"

dated December 8, 2009 (2)

Letter, VYNPS to NRC, "Decommissioning Funding Assurance Documentation," BVY 10-008, dated January 28, 2010

Dear Sir or Madam:

Reference (1) provides NRC acceptance of a Parent Guarantee, in combination with the Decommissioning Trust Fund, for providing the required financial assurance for eventual decommissioning of the facility. On January 7, 2010 that NRC requested certain Parent Guarantee verifying documentation be provided, which was submitted as Reference (2).

Section 8 of the Parent Guarantee requires the guarantor to submit certain financial documents to the NRC annually within 90 days of the close of the parent guarantor's fiscal year (December 31, 2009). Reference (2) provided 2008 fiscal year documentation. The enclosures to this letter provide 2009 fiscal year documentation.

This letter contains no new Regulatory Commitments.

Should you have any questions concerning this submittal or require additional information, please contact me at (802) 451-3150.

Sincerely,

[JMD/JTM]

~ffL

BVY 10-020 / page 2 of 2 Attachments:

1.

Entergy Corporation Parent-Guarantee of Funds for Decommissioning: Letter from Chief Financial Officer to Demonstrate Financial Assurance (3 pages)

2.

Independent Accountants Report on Applying Agreed Upon Procedures (4 pages) cc:

Mr. Samuel J. Collins, Region 1 Administrator U.S. Nuclear Regulatory Commission 475 Allendale Road King of Prussia, PA 19406-1415 Mr. James S. Kim, Project Manager U.S. Nuclear Regulatory Commission Mail Stop 0 8 C2A Washington, DC 20555 USNRC Resident Inspector Entergy Nuclear Vermont Yankee 320 Governor Hunt Road Vernon, Vermont 05354 Mr. David O'Brien, Commissioner VT Department of Public Service 112 State Street - Drawer 20 Montpelier, Vermont 05620

Docket No. 50-271 BVY 10-020 Vermont Yankee Nuclear Power Station Entergy Corporation Parent-Guarantee of Funds for Decommissioning:

Letter from Chief Financial Officer to Demonstrate Financial Assurance (3 pages)

ENTERGY CORPORATION P.O. Box 61000 W

NEW ORLEANS, LA 70161 (504) 576-6106 LEO P. DENAULT EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER Appendix A March 17, 2010 ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington:DC 20555-00011

Subject:

Entergy Corporation Parent-Guarantee of Funds for Decommissioning:

Letter from Chief Financial Officer to Demonstrate. Financial Assurance I am the chief financial officer of Entergy Corporation, 639 Loyola Avenue, New Orleans, LA 70113, a corporation. This letter is in support of this firm's use of the financial test to demonstrate financial assurance, as specified in 10 CFR Part 50.

This firm guarantees, through the-parent company guarantee submitted to demonstrate compliance under 10 CFR Part 50, the decommissioning of the followinfg facility owned or operated by a subsidiary of this firm.

The current cost estimate or certified amount for decommissioning, and the, amount being guaranteed, are shown for the facility:

Name of Location of Current.

Amount Being Facility Facility CostEstimate Guaranteed Vermont Yankee Vernon, VT

$518,914,329

$40,000,000 Nuclear Power Station License No. DPR-28 Entergy Corporation is required to file a Form 10K with the U.S. Securities and Exchange Commission for the latest fiscal'year.

This fiscal year of Entergy Corporation ends on December'3 1". The figures for the following items (Financial Test 11) marked With an asterisk are derived from this Entergy Corporation's independently audited, year-end financial statements and footnotes for the latest completed fiscal year,;ended December 31, 2009.

I hereby certify.that the content of this letter is true and coriect to the best of my knowledge.

Leo P. Denault Executive Vice President and Chief Financial Officer

!AL/ Z/0 Date I

FINANCIAL TEST: ALTERNATIVE H (10 CFR Part 30 App. A.Section II A.2.)

Entergy Corporation Parent Guarantee of Funds For Decommissioning Dollars in thousands I.

Guaranteed amount for Vermont Yankee Nuclear Power Station, License No. DPR-28 (total cost of all. cost estimates should be stated in paragraphs above)

$40,000

2.

Current bond or credit rating of most recent unsecured issuance of this firm (see NOTE/ below)

Rating BBB corporate credit rating as of January 29, 2010 Name of rating service Standard & Poor's

3.

Date of issuance of bond (See NOTE/ below)

4.

Date of maturity of bond (See NOTE/ below)

• 5.

Tangible net worth** (if any portion of estimates for decommissioning is included in total liabilities on your firm's financial statements, you may add the amount of that portion to.this line)

$8,547,531

• 6.

Total assets in United States (required only if less than 90 percent of firm's assets are located in the United.

States)

Yes No

7. Is line5 at least $10,000?

X

8. Is line 5 at least 6 times line 1?

x

9. Are at least 90 percent of firm's assets located inthe United States? If not, complete line 10.

X

10. Is line 6 at least 6 times line 1?

N/A

11. Is the rating specified on line 2 "BBB" or better (if issued by Standard & Poor's) or "Baa" or better (if. issued by Moody's)?.

X NOTE/ Entergy Corporation does not have' any recent bond issuances;. Notes were issued in 2002 and 2003, but these: were issued' via private placement and were not rated. Ratings supplied above are the current credit ratings from the indicated rating agency.

• Denotes figures derived from financial statements.

• • Tangible net worth is defined as' net worth minus goodwill, patents, trademarks, and copyrights.

I.................

RECONCILING SCHEDULE ENTERGY CORPORATION YEAR ENDED DECEMBER 31, 2009 Dollars in thousands Line Number in CFO's Letter Total Assets Less: Total Current Liabilities Less: Total Non-Current Liabilities Less: Goodwill Tangible Net Worth Per Financial Statements

$37,364,597 (3,193,997)

Recon-ciling Items Per CFO's Letter (25,245,897)

(377,172)

$8,547,531

$8,547,531 I

Docket No. 50-271 BVY 10-020 Vermont Yankee Nuclear Power Station Independent Accountants Report on Applying Agreed Upon Procedures (4 pages)

Deloitte.

e1it. 0(eU Simile 4100

"?ý0 1 P*oy,-.s Street New

'Orteans LA 701 tO14200 UJSA iel 04 1

,1 2

?

Fax; '.

504 561 293 INDEPENDENT ACCOUNTANTS' REPORT ON APPLYING AGREED-UPON PROCEDURES To the Board of Directors Entergy Corporation New Orleans, Louisiana We have performed the procedures enumerated below, which were agreed to by Entergy Corporation (the "Company"), solely to assist the Company in connection with the Company's and the U.S. Nuclear Regulatory Commission's ("NRC") evaluation of the Company's compliance with the requirements specified in Appendix A, Section I1 A.2 to Part 30 of 10 CFR, the Financial Test: Alternative 11 (the "Financial Test") as of December 31,'

2009, included in the accompanying letter from the Chief Financial Officer of the Company dated March 17, 2010 to the NRC. The Company's management is responsible for compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants, as adopted by the Public Company Accounting Oversight Board (United States). The sufficiency of these procedures is solely the responsibility of those parties specified in this report.

Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

It should be understood that (1) we make no representations regarding the Company's determination and presentation of non-GAA P measures (such as tangible net worth), and (2) the non-GAAP measure presented may not be comparable to similarly titled measures reported by other companies. However, the following procedures were applied to the attached Schedules on pages 2 and 3 of Appendix A as indicated with respect to the symbols explained below.

A.

We compared these amounts to the Company's audited financial statements for the year ended December 31, 2009 and found such amounts to be in agreement.

B.

We compared the "Tangible Net Worth" amount as shown in the column "Per CFO's Letter" included in the Reconciling Schedule on page 3 of Appendix A to the "Tangible net worth" amount presented on line 5 of the Financial Test: Alternative II Schedule on page 2 ofAppendixA and tound such amounts to be in agreement.

C. We proved the arithmetic accuracy of the statement and noted no exception.

We were not engaged to, and did not, conduct an examination, the objective of which would be the expression of an opinion on compliance. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the information and use of the board of directors and management of the Company and the NRC, and is not intended to be and should not be used by anyone other than these specified parties.

p01

-1 D

ioo, Lt March 26, 2010 Memrbe, of Deloitte Totche robmats,,

ElI"NrT.c c:Rt CPORM R ON Nism 0RIoFAIS LA 70161t (504) 3Th-.40&

LUi P~. DENAULT EAx1r,'CI Vtp K'C E PRENI' AN[D ORES~ FINAN<CIAL CITICER 14 Appendix A March 17, 2010 ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington DC 20555-0001

Subject:

Entergy Corporation Parent-Guarantee of Funds for Decommissioning:

Letter from Chief Financial Officer to Demonstrate Financial Assurance I am the chief financial officer of Entergy Corporation. 639 Loyola Avenue, New Orleans, LA 70113, a corporation. This letter is in support of this firm's use of the financial test to demonstrate financial assurance, as specified in 10 CFR Part 50.

This firm guarantees, through the parent company guarantee submitted to demonstrate compliance under 10 CFR Parn 50, the decommissioning of the following facility owned or operated by a subsidiary. of this firm.

The current cost estimate or certified amount fordecommissioning, and the amount being guaranteed, are shown for the facility:

Name of

[.ocation of Current Amount Being Facility Facility Cost Estimate Guaranteed Vermont Yankee Vermon, VT

$518,914,329

$40,000,000 Nuclear Power Station License No. DPR-28 Entergy Corporation is required to file a Form 10K with the U.S. Securities and Exchange Commission for the latest fiscal year.

This fiscal year of EntergyCorporation ends on December 31". The figures for the following items (Financial Test I1) marked with an asterisk are derived from this Entergy Corporation's independently audited, year-end financial statements and footnotes for the latest completed fiscal year,. ended December 31, 2009.

I hereby certify that the content of this letter is true and correct to the best of my knowledge.

Leo P. Denault Executive Vice President and Chief Financial Officer Date I

FINANCIAL 'rEST: ALTERNATIVE lI (10 CFR Part 30 App. A.Section II A.2.)

Entergy Corporation Parent Guarantee of Funds For Decommissioning Dollars in thousands

1.

Guaranteed amount for Vermont Yankee Nuclear' Power Station, License No. DPR-28 (total cost of all cost estimates should be stated in paragraphs above)

$40,000

2.

Current bond or credit rating of most recent unsecured issuance of this firn (see NOTE/ below)

Rating BBB corporate credit rating as of Januarv 29. 2010 Name of rating service Standard & Poor's

3.

Date of issuance of bond (See NOTE/ below)

4.

Date of maturity of bond (See NOTE!h elow

• 5, Tangible net worth** (if any portion of estimates tbr decommissioning is included in total liabilities.on your firm's financial statements, you may add the amount of that portion to this line)

$8,547.531$

• 6.

Total assets in United States (required only if less than 90 percent of firm's assets are located in the United States)

Yes No

7. Is line 5 at least $10,000?

X I,

8. Is line 5 at least 6 times line I?

X 'i

9. Are at least 90 percent of firm's assets located in the United States? If not, complete line 10.

X

10. Is line 6 at least 6 times line I?

N/A II. Is the rating specified on line 2 "BBB" or better (if issued by Standard & Poor's) or "Baa" or better (if issued by Moody's)?

X NOTE/ Entergy Corporation does not have any recent bond issuatices;& Notes.were issued.in..2002 and 2003, but these were issued via private placement and were, not rated. Ratings supplied above are the current credit ratings from the indicated rating agency.

• Denotes figures derived from financial statements.

• • Tangible net worth is defined as net worth minus goodwill, patents, trademarks, and copyrights.

2-

Line Number in C'FO's Letter Total Assets Less: Total Current Liabilities Less: Total Non-Current Liabilities Less: Goodwill

-Tangible Net Worth RECONCILING SCHEDULE ENTERGY CORPORATION (EAR ENDED DECEMBER 31, 2009 Dollars in thousands Per Re Financial cil Statements

$37.364,597A (3, 193,997)A*

(25,245,897)A (377,172) A

$8.547,531 C,+

con-ing inl)s Per CFO's Letter

$8,547.531

'3

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