ENOC-14-00008, Entergy Nuclear Operations, Inc. - Financial Test for Decommissioning Funding Parent Guarantees for the Year Ending December 31, 2013 Per 10 CFR Part 30 App. a

Entergy Nuclear Operations, Inc. - Financial Test for Decommissioning Funding Parent Guarantees for the Year Ending December 31, 2013 Per 10 CFR Part 30 App. a

ML14092A369
Person / Time
Site:	Vermont Yankee, Big Rock Point  File:Consumers Energy icon.png
Issue date:	03/28/2014
From:	Mccann J Entergy Nuclear Operations
To:	Document Control Desk, Office of Nuclear Material Safety and Safeguards
References
ENOC-14-00008
Download: ML14092A369 (12)

Text

Entergy Nuclear Operations, Inc 440 Hamilton Avenue nteigyTel White Plains, NY 10601 914 272 3370 John F. McCann Vice President - Regulatory Assurance ENOC-14-00008 March 28, 2014 ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 20555-0001

SUBJECT:

Financial Test for Decommissioning Funding Parent Guarantees for the year ending December 31, 2013 per 10 CFR Part 30 App. A Big Rock Point ISFSI Vermont Yankee Nuclear Power Station Docket 50-155 / 72-043 Docket 50-271 License No. DPR-6 License No. DPR-28

REFERENCE:

1. Entergy letter BVY-10-008, "Decommissioning Funding Assurance Documentation" dated January 28, 2010 (ML100470701).

Dear Sir or Madam:

This letter provides the documents to support the continued use of a parent company guarantee to provide financial assurance of decommissioning funds for the Vermont Yankee Nuclear Power Station and the Big Rock Point Independent Spent Fuel Storage Installation (ISFSI),

pursuant to 10 CFR 50.75(e)(1)(iii)(B).

Use of the parent company guarantee for Vermont Yankee was initially established by Reference 1 for 2009 based upon financial data for the year ending December 31, 2008.

Recital 8 of the Vermont Yankee parent company 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. The updated information for fiscal year ending December 31, 2013 is provided herein. Entergy Nuclear Operations notes that the $40 million guarantee for Vermont Yankee is not required as of December 31, 2013 to meet current financial assurance requirements under 10 CFR 50.75(c) based on calculations under 10 CFR 50.75(c), which are being provided separately in the 2014 10 CFR 50.75(f) report for Vermont Yankee.

The licensees requested that Entergy Corporation's independent certified public accountant, Deloitte & Touche, LLP, evaluate the company's off-balance sheet transactions and provide an opinion on whether those transactions could materially adversely affect the company's ability to pay for decommissioning costs, as required by 10 CFR 30 Appendix A. Deloitte & Touche, LLP stated that it does not provide opinions of that nature. Nevertheless, Entergy Corporation's management has concluded that the amount of decommissioning-related parent guarantees at issue is very small as compared to the balance sheet amounts, and in its opinion, off-balance 0Ou(

ENOC-14-0008 Page 2 of 2 sheet transactions would not be expected to affect the company's ability to pay for decommissioning costs. The company's off-balance sheet transactions are described in its Securities and Exchange Commission filings, in particular, its 10-Q and 10-K filings.

There are no new commitments made in this letter. If you have any questions, please contact Mr. David Mannai, Senior Manager, Fleet Regulatory Assurance at 802-380-1175.

Sincerely, FM / djm / aye Attachments: 1. Entergy Corporation Parent Guarantee for Fiscal Year Ending 12/31/2013

2. Independent Accountant's Report on Applying Agreed-Upon Procedures cc:

Mr. J. A. Aluise (ENT)

Mr. T. Ngau (ECH)

Ms. W. C. Curry (ECH)

Mr. J.S. Forbes (ECH)

Mr. B. E. Green (TMBR)

Ms. D. Jacobs (ECH)

Mr. D. J. Mannai (WPO)

Mr. J. F. McCann (WPO)

Mr. T. G. Mitchell (ECH)

Mr. M. Perito (ECH)

Mr. L. Jager Smith (ECH)

Mr. A. J. Vitale (PAL)

Mr. C. J. Wamser (VTY)

USNRC Regional Administrator, Region I USNRC Regional Administrator, Region III USNRC Project Manager, Palisades USNRC Project Manager, Big Rock Point USNRC Project Manager, Vermont Yankee USNRC Resident Inspector, Vermont Yankee Michigan Department of Environmental Quality Michigan Public Service Commission Vermont Department of Public Service Downs Rachlin Martin PLLC / St. Johnsbury, VT

ENOC-14-00008 ATTACHMENT 1 Entergy Corporation Parent Guarantee for Fiscal Year Ending 12/31/2013 (3 pages)

A% Ent&W Entergyh Services, Inc.

r,5,(15676 ~~

March 20, 2014 ATITN: 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 Title 10, Part 50, of the Code of Federal Regulations (10 CFR Part 50).

T1his firm guarantees, through the parent company guarantee submitted to demonstrate compliance tinder 10 CFR Part 50, the decommissioning of the following facilities owned or operated by subsidiaries of this firm. The current cost estimates or certified amounts for decommissioning, and the amounts being guaranteed, are shown for each facility:

Name of Location of C urrent Amount Being Facility Facility Cost Estimates Guaranteed Vermont Yankee Vernon, VT S623,649,114' $40,000,000 Nuclear Power Station License No. DPR-28 Big Rock Point Independent Spcnt Fuel Storage Installation License Nos. DPR-06, SFGL-16 Charlevoix, MI $ 1,573,04V S 5,000,000 Entergy Corporation is required to file a Form 10-K with the U.S. Securities and Exchange Commission ror the latest fiscal year.

The fiscal year of Eniergy Corporation ends on D)ecember 31'. The figures for the following items (Financial Test II) marked with an asterisk are derived from Entergy Corporation's independently audited.

year-end financial statements and footnotes for the latest completed fiscal year, ended December 31,

.2013.

I hereby certify that the content of this I ter I true and cprrect o the best of my knowledge.

Adr ew., Marsh Excu ive "'icePresident and Chief Financial Officer Da te

'PerStaus of I)econlynissioning Funding for Planfls OpLraln I 'y Ihrsrgv Ntiricar , Inc. for the year ending ),eceriner 31, 2013 10 CVR 50.15( )(1).

See Accession No. MI.1232AAI26 cesclaied to 2013S.

FINANCIAL TEST: ALTERNATIVE II (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 and Big Rock Point Independent Spent Fuel Storage Installation, Licenses Nos. DPR-06, SFGL-16 (total cost of all cost estimates should be stated in paragraphs above) $45,000

2. Current rating of most recent bond issuance of this firm Rating Baa3 corporate credit rating as of December 20, 2013 Name of rating service Moody'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) $9,506,248

• 6. Total assets in United States (required only if less than 90 percent of firm's assets are located in the United States) N/A Yes No

7. Is line 5 at least $21,000? X

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

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 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. Ratings supplied above are the current credit ratings from the indicated rating agency. Entergy Corporation's last bond issuance had a rating of BBB-.

• Denotes figures derived from financial statements.

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

.2

RECONCILING SCHEDULE ENTERGY CORPORATION YEAR ENDED DECEMBER 31, 2013 Dollars in thousands Per Recon- Per Line Number in Financial ciling CFO's CFO's Letter Statements Items Letter Total Assets $43,406,446 Less: Total Current Liabilities (4,060,572)

Less: Total Non-Current Liabilities (29,408,648)

Less: Goodwill (377,172)

Less: Net Book Value of Vermont Yankee Nuclear Power Station and Big Rock Point (53,806)

Tangible Net Worth $ 9,506,248 $ 9,506,248 3

ENOC-14-00008 ATTACHMENT 2 Independent Accountant's Report on Applying Agreed[Upon Prcedures (5 pages)

Deloitte& Suite 4200 701 Poydras Street New Orleans, LA 70139-4200 USA Tel: +1 504 581 2727 Fax: +1 504 561 1293 wvww.deloitte.com 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 II A.2 to Part 30 of 10 CFR, the Financial Test: Alternative I1(the "Financial Test") as of December 31, 2013, included in the accompanying letter from the Chief Financial Officer of the Company dated March 20, 2014 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. 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-GAAP measures (such as tangible net worth), and (2) the non-GAAP measures 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 consolidated financial statements for the year ended December 31, 2013 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 on page 2 of Appendix A and found such amounts to be in agreement.

C. We proved the arithmetic accuracy and noted no exception after giving effect to rounding.

D. We compared the "Net Book Value of Vermont Yankee Nuclear Power Station and Big Rock Point" as shown in the column "Per Financial Statements" included in the Reconciling Schedule on page 3 of Appendix A to internal accounting records prepared by employees of the Company.

We make no comment with respect to the assumptions used in the preparation of the internal accounting records or schedules.

E. We compared the "Current rating of most recent bond issuance of this firm" on line 2 of the Financial Test on page 2 of Appendix A to the Moody's Investors Service Report for Entergy Member of Deloitte Touche Iohmatsu

Corporation dated December 20, 2013 provided to us by employees of the Company and noted no differences.

We inquired of the Chief Accounting Officer and Chief Financial Officer of the Company as to whether any off-balance sheet transactions exist that could materially adversely affect the ability of the Company to pay decommissioning costs. These Officers responded that there are no off-balance sheet transactions that could materially adversely affect the Company's ability to pay decommissioning costs.

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.

March 20, 2014

-ý EnteW Entergy Services, Inc.

63c)Loda A,,e'nue New Oriea-is, LA 7(?i 13 576 ,VK.*

Ta "a3O, March 20, 2014 ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington DC 20555-0001

Subject:

Entergy Corporation Parent - Guarantee of Funds for Decommissioning: Letter firom Chief Financial Officer to Demonstrate Financial Assurance I am the chief financial officer of FEntergy Corporation, 639 Loyola Avenue, New Orleans, LA 70113, a corporation. This letter is in support of this finn's use of the financial test to demonstrate financial assurance, as specified in Title 10, Part 50, of the Code of FederalRegulations (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 following facilities owned or operated by subsidiaries of this firm. The current cost estimates or certified amounts for decommissioning, and the amounts being guaranteed, are shown for each facility:

Name of Location of Current Amount Being Facility Facility Cost Estimates Guaranteed Vermont Yankee Vernon, VT $623,649,114' $40,000,000 Nuclear Power Station License No. DPR-28 Big Rock Point Independent Spent Fuel Storage Installation License Nos. DPR-06, SFGL-16 Charlevoix, MI $ 1,573,0002 $ 5,000,000 Entergy Corporation is required to file a Form 10-K with the U.S. Securities and Exchange Commission for the latest fiscal year.

The fiscal year of Entergy Corporation ends on December 31s". The figures for the following itcms (Financial Test II) marked with an asterisk arc derived from Entergy Corporation's independently audited, year-end financial statements and footnotes for the latest completed fiscal year, ended December 31, 2013.

I hereby certify that the content of this Adr~cN. Marsh '

Exec-u-ivie yice President and Chief Financial Officer Date f Per Status of Decomrnissioning Funding for Plants Operated by Entergy Nuclear Operations. Inc. for the year ending December 31. 2013 - 10 CIFR 50.75()(1).

See Accession No. MLI2352A126 escalated to2013S.

FINANCIAL TEST: ALTERNATIVE 11 (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 and Big Rock Point Independent Spent Fuel Storage Installation, Licenses Nos. DPR-06, SFGL-16 (total cost of all cost estimates should be stated in paragraphs above) $45,000

2. Current rating of most recent bond issuance of this firm Rating Baa3 corporate credit rating as of December 20, 2013 E Name of rating service Moody'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) $9,506,248

• 6. Total assets in United States (required only if less than 90 percent of firm's assets are located in the United States) N/A Yes No

7. Is line 5 at least $21,000? X -

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

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

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. Ratings supplied above are the current credit ratings from the indicated rating agency. Entergy Corporation's last bond issuance had a rating of BBB-.

• Denotes figures derived from financial statements.

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

2

RECONCILING SCHEDULE ENTERGY CORPORATION YEAR ENDED DECEMBER 31, 2013 Dollars in thousands Per Recon- Per Line Number in Financial ciling CFO's CFO's Letter Statements Items Letter Total Assets $43,406,446 Less: Total Current Liabilities (4,060,572) A Less: Total Non-Current Liabilitties (29,408,648) A Less: Goodwill (377,172)

• Less: Net Book Value of Vermont Yankee Nuclear Power Station and Big Rock Poinit (53,806)

Tangible Net Worth $ 9,506,248 (-1/ $ 9,506,248 V'2 3