L-12-440, Replacement of Parental Guaranty
| ML12363A037 | |
| Person / Time | |
|---|---|
| Site: | Beaver Valley, Perry |
| Issue date: | 12/17/2012 |
| From: | Halnon G FirstEnergy Nuclear Operating Co |
| To: | Document Control Desk, Office of Nuclear Reactor Regulation |
| References | |
| L-12-440 | |
| Download: ML12363A037 (17) | |
Text
FENOC E76 South Main Street FirstEnergy Nuclear Operating Company Akron, Ohio 44308 December 17, 2012 L-12-440 10 CFR 50.75 CERTIFIED MAIL ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 20555-0001
SUBJECT:
Beaver Valley Power Station, Unit No. 1 Docket No. 50-334, License No. DPR-66 Perry Nuclear Power Plant Docket No. 50-440, NPF-58 Replacement of Parental Guaranty By letter dated December 29, 2011 (Accession No. ML113640029), FirstEnergy Nuclear Operating Company (FENOC), on behalf of FirstEnergy Corp. (FE) and FirstEnergy Nuclear Generation Corp. (FENGenCo) (now FirstEnergy Nuclear Generation, LLC),
provided a copy of a $95 million parental guaranty dated December 19, 2011 to the Nuclear Regulatory Commission (NRC). FE and FENGenCo also documented the cancellation of a $15 million parental guaranty dated March 4, 2010, between FE and FENGenCo and a $95 million parental guaranty dated June 14, 2011, which never took effect.
FENOC is providing a new parental guaranty, dated December 17, 2012, in order to conform to new NRC regulations changing Appendix A of 10 CFR Part 30, effective December 17, 2012. The parental guaranty incorporates terms to comply with the new regulations and reflects the new name of the licensee as described in the NRC's issuance of license amendments on October 2, 2012 (Accession No. ML12221A413).
The new parental guaranty also eliminates the provision in Section 13, (now Section 14), which required NRC prior written consent to amendments to the parental guaranty. This provision is not required by NRC regulations or guidance, and it hinders FE's ability to promptly implement changes to the parental guaranty that might be desirable or required, such as the changes that are being made with the new parental guaranty to conform the document to reflect the new name for FENGenCo and to comply with NRC regulations. Instead, the new parental guaranty provides for 30 days prior written notice to NRC regarding amendments.
A&D(
Beaver Valley Power Station, Unit No. 1 Perry Nuclear Power Plant, Unit No. 1 L-1 2-440 Page 2 In order to implement the changes desired for the new parental guaranty, FE must first cancel the December 19, 2011 parental guaranty. Under the terms of Section 13 of the December 19, 2011 parental guaranty, FE hereby gives notice to NRC of such cancellation. The enclosed replacement $95 million parental guaranty dated December 17, 2012, will come into force effective upon the cancellation of the December 19, 2011 parental guaranty, which will occur 120 days after receipt of this notice by the NRC.
The new parental guaranty, dated December 17, 2012, is provided as Enclosure A.
Additionally, a mark-up showing the changes between the December 19, 2011 parental guaranty and the December 17, 2012 parental guaranty is provided in Enclosure B.
A certification that FE meets the applicable financial test requirements for issuing a parental guaranty was provided as an enclosure to a letter dated March 30, 2012 (Accession No. ML12090A494). The financial test was conducted based on FE's 2011 audited annual financial results, and these are the most recent audited annual financial results that are available. An updated annual certification, which will be based upon FE's 2012 audited annual results, is due to be submitted to the NRC by March 31, 2013.
There are no regulatory commitments contained in this letter. If there are any questions or if additional information is required, please contact Mr. Thomas A. Lentz, Manager -
Fleet Licensing, at 330-315-6810.
Sincerely,
'Gregr.
Halo Director, Fleet Regulatory Affairs
Enclosure:
A.
Parental Guaranty B.
Comparison of December 19, 2011 Parental Guaranty and December 17, 2012 Parental Guaranty cc:
NRC Region I Administrator NRC Region III Administrator NRC Resident Inspector (Beaver Valley Power Station, Unit No. 1)
NRC Resident Inspector (Perry Nuclear Power Plant)
NRR Project Manager (Beaver Valley Power Station, Unit No. 1)
NRR Project Manager (Perry Nuclear Power Plant)
Director BRP/DEP Site BRP/DEP Representative
Enclosure A L-12-440 Parental Guaranty (6 pages follow)
PARENTAL GUARANTY GUARANTY, dated as of December 17, 2012, made by FirstEnergy Corp., an Ohio corporation (the "Guarantor") to Guarantor's indirect, wholly owned subsidiary, FirstEnergy Nuclear Generation, LLC ("FENGenCo").
WITNESSETH:
WHEREAS, FENGenCo is an indirect, wholly owned subsidiary of the Guarantor and has a 100% undivided ownership interest in Beaver Valley Power Station, Unit No. 1
("BVPS 1") and 87.42 % of the undivided ownership of the Per'y Nuclear Power Plant ("Perry");
WHEREAS, the NRC has promulgated regulations in Title 10, Chapter 1 of the Code of Federal Regulations ("CFR"), Part 50 which require that a holder of, or an applicant for, a license issued pursuant to 10 CFR Part 50 provide assurance that funds will be available when needed for i'equired decommissioning activities; WHEREAS, the Guarantor receives substantial indirect benefits from owning its indirect subsidiary, FENGenCo (which benefits are hereby acknowledged), and accordingly, desires to execute and deliver this Guaranty in order to provide financial assurance for FENGenCo's obligations for the decommissioning of BVPS 1 and Perry as required by 10 CFR Part 50; WHEREAS, the Guarantor previously entered into a Guaranty dated December 19, 2011, which it intends to revoke and replace with this Guaranty; WHEREAS, the Guarantor is entering into this Guaranty to replace the Guaranty dated December 19, 2011.
NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to the Guarantor, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby makes the following representations and warranties to FENGenCo and hereby covenants and agrees as follows:
The Guarantor has full authority and capacity to enter into this Guaranty under its bylaws, articles of incorporation, and the laws of the State of Ohio, its state of incorporation.
Guarantor has approval from its Board of Directors to enter into this guaranty.
- 2.
This Guaranty is being issued so that FENGenCo will be in compliance with regulations issued by the Nuclear Regulatory Commission (NRC), an agency of the U.S. Government, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974. The NRC has promulgated regulations in Title 10, Chapter I of the Code of Federal Regulations, Part 50, which require that a holder of, or an applicant for, a license issued pursuant to 10 CFR Part 50 provide assurance that funds will be available when needed for required decommissioning activities.
- 3.
This Guaranty is issued to provide financial assurance for decommissioning activities for BVPS 1, Docket No. 50-334, License No. DPR-66, and Perry, License No. NPF-58, Docket No. 50-440, as required by 10 CFR Part 50. The decommissioning costs for BVPS 1 and Perry are guaranteed in the aggregate amount of $95 million for both BVPS I and Perry.
- 4.
The Guarantor will meet or exceed the criteria from Financial Test II.A.2 from 10 CFR Part 30, Appendix A and agrees to notify FENGenCo and the NRC of any changes in its ability to meet the Appendix A criteria in compliance with the notification requirements as specified in 10 CFR Part 50. Specifically, the Guarantor will possess:
(a)(i)
A current rating of its most recent uninsured, uncollateralized, and unencumbered bond issuance of BBB-or higher as issued by Standard and Poor's, or Baa3 or higher as rated by Moody's; and (ii) Tangible net worth is at least $21 million and total net worth of at least six times the amount of decommissioning funds being assured by this guarantee; and (iii) Assets located in the United States amounting to at least 90 percent of its total assets or at least six times the current decommissioning cost or Guaranty amount.
- 5.
The Guarantor has an indirect majority control of the voting stock in FENGenCo.
FENGenCo is located at 76 South Main Street, Akron, Ohio 44308. FENGenCo owns the BVPS I facility, License No. DPR-66 and has an 87.42 % interest in the Peny facility, License No. NFP-58.
- 6.
The term "decommissioning activities" as used herein refers to the activities required by 10 CFR Part 50 for decommissioning of the facilities identified above.
- 7.
The Nuclear Decommissioning Master Trust Agreement, entered into with Mellon Bank, N.A. (now, Bank of New York Mellon, a New York state bank having trust powers) on December 1, 2005, was established to maintain funds for decommissioning. This master trust agreement sets up the FE BVPS 1 Nonqualified Fund and the FE Perny Nonqualified Fund, which will serve as the "standby trusts" contemplated by the NRC's regulations for payment of funds under this Guaranty.
- 8.
For value received from FENGenCo and pursuant to the authority conferred upon the Guarantor, the Guarantor guarantees that if FENGenCo fails to perform the required decommissioning activities, as required by License No. DPR-66 and License No. NPF-58, due to lack of funds, the Guarantor shall:
(a) provide all funds necessary, up to the amount of this Guaranty to carry out the required activities; or (b) pay into the existing trust fund referenced in Paragraph 7 the amount of this guaranty for these activities.
- 9.
The Guarantor agrees to submit revised financial statements, financial test data, and a special auditor's report and reconciling schedule to the NRC annually within 90 days of the close of the parent Guarantor's fiscal year.
- 10.
The Guarantor and FENGenCo agree that if the Guarantor fails to meet the financial test criteria at any time after this Guaranty is established, the Guarantor and FENGenCo shall send, within 90 days of the end of the fiscal year in which the Guarantor fails to meet the financial test criteria, written notice to the NRC using NRC's electronic information Page 2
exchange. If FENGenCo fails to provide alternative financial assurance as specified in 10 CFR Part 50, as applicable, and obtain written approval of such assurance from the NRC within 180 days of the end of such fiscal year, the Guarantor shall provide such alternative financial assurance in the name of FENGenCo or make full payment under the Guaranty to the existing standby trust established by FENGenCo.
- 11.
Independent of any notification under paragraph 8 above, if the NRC determines for any reason that the Guarantor no longer meets the financial test criteria or that it is disallowed from continuing as a Guarantor for the facilities under License No. DPR-66 and License No. NFP-58, the Guarantor agrees that within 90 days after being notified by the NRC of such determination, an alternative financial assurance mechanism as specified in 10 CFR Part 50 as applicable, shall be established by the Guarantor in the name of FENGenCo unless FENGenCo has done so.
- 12.
The Guarantor as well as its successors and assigns shall remain bound jointly and severally under this Guaranty notwithstanding any or all of the following: amendment or modification of license or NRC-approved decommissioning funding plan for that facility, the extension or reduction of the time of performance of required activities, or any other modification or alteration of an obligation of FENGenCo pursuant to 10 CFR Part 50.
- 13.
The Guarantor agrees that it will be liable for all litigation costs incurred by FENGenCo or the NRC in any successful effort to enforce the agreement against the Guarantor.
- 14.
The Guarantor agrees to remain bound under this Guaranty and financial test provisions for as long as FENGenCo must comply with the applicable financial assurance requirements of 10 CFR Part 50, for the previously listed facilities, except that this Guaranty may be amended by the agreement of Guarantor and FENGenCo with 30 days prior written notice to the NRC, and except that the Guarantor may cancel this Guaranty by sending written notice to the NRC using NRC's electronic information exchange, such cancellation to become effective no earlier than -120 days after receipt of such notice by the NRC as evidenced by the return receipts. Guarantor shall also notify FENGenCo. If FENGenCo fails to provide alternative financial assurance as specified in 10 CFR Part 50, as applicable, and obtain written approval of such assurance within 120 days after the sending of the above notice by the Guarantor, the Guarantor shall provide such alternative financial assurance, or make full payment under the Guaranty to the existing standby trust established by FENGenCo.
- 15.
The Guarantor expressly waives notice of acceptance of this Guaranty by the NRC or by FENGenCo. The Guarantor also expressly waives notice of amendments or modification of the decommissioning requirements and of amendments or modifications of the licenses.
- 16.
The Guarantor files financial reports with the U.S. Securities and Exchange Commission (SEC), which are available to NRC and need not be submitted separately in accordance with 10 CFR 50.71(b).
- 17.
The Guarantor agrees that if the Guarantor admits in writing its inability to pay its debts generally, or makes a general assignment for the benefit of creditors, or any proceeding is instituted by or against the Guarantor seeking to adjudicate it as bankrupt or insolvent, or seeking dissolution, liquidation, winding-up, reorganization, arrangement, adjustment, Page 3
protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or seeking the ently of an order for relief or the appointment of a receiver, trustee, custodian, or other similar official for the Guarantor or for any substantial part of its property, or the Guarantor takes any action to authorize or effect any of the actions stated in this paragraph, the Commission may:
(a) declare that the financial assurance guaranteed by the this Guaranty is immediately due and payable to the existing trust referenced in Paragraph 7, without diligence, presentment, demand, protest, or any other notice of any kind, all of which are expressly waived by Guarantor; or (b) exercise any and all of its other rights under applicable law.
- 18.
The Guarantor agrees to notify the NRC, in writing, immediately following the filing of a voluntary or involuntary petition for bankruptcy under any chapter of title 11 (Bankruptcy) of the United States Code, or the occurrence of any other event listed in Paragraph 17, by or against:
(a) the Guarantor; (b) FENGenCo; (c) an entity (as that term is defined in 11 U.S.C. 101(15)) controlling FENGenCo or listing the license or FENGenCo as property of the estate; or (d) an affiliate (as that term is defined in 11 U.S.C. 101(2)) of FENGenCo.
- 19.
The notification required by Paragraph 18 must include the following:
(a) a description of the event, including major creditors, the amounts involved, and the actions taken to assure that the amount of funds guaranteed by this Guaranty for decommissioning will be transferred to the existing trust referenced in Paragraph 7 as soon as possible; (b) if a petition of bankruptcy was filed, the identity of the bankruptcy court in which the petition for bankruptcy was filed; and (c) the date of filing of any petitions.
- 20.
This Guaranty and the rights and obligations of the FENGenCo and the Guarantor hereunder, shall be governed by and construed in accordance with the domestic laws of the State of Ohio without giving effect to any choice or conflict-of-law provision or rule (whether of Ohio or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Ohio. The Guarantor and the FENGenCo each consent to the exclusive jurisdiction and venue of any state or federal court within the State of Ohio for adjudication of any suit, claim, action or other proceeding at law or in equity relating to this Guaranty, or to any transaction contemplated hereby. The Guarantor and FENGenCo each accept, generally and Page 4
unconditionally, the exclusive jurisdiction and venue of the aforesaid courts and waive any objection as to venue, and any defense offorum-non-conveniens. The Guarantor hereby irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the Guarantor at its address set forth opposite its signature below, such service to become effective 30 days after such mailing. Nothing herein shall affect the right of FENGenCo to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Guarantor in any other jurisdiction. The Guarantor hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with the Guaranty brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
- 21.
All notices and other communications hereunder shall be made to FirstEnergy Corp.'s Chief Financial Officer and General Counsel at 76 South Main Street, Akron, Ohio 44308.
- 22.
It is intended that this Guaranty shall replace the existing Guaranty dated December 19, 2011, which is to be cancelled, revoked and rescinded with no further effect 120 days after receipt of written notice by the NRC. As such, this Guaranty will come into force effective upon the cancellation of the December 19, 2011 Guaranty 120 days after receipt of the required written notice by the NRC.
- 23.
If it is ever determined that the Guaranty dated December 19, 2011, or any prior Guaranty, remains enforceable and not properly cancelled, revoked and rescinded with no further force and effect, than the amount of this Guaranty specified in Paragraph 3 hereof shall be reduced by the amount specified in such prior guaranty which remains in effect.
Page 5
I hereby certify that this Guaranty is true and correct to the best of my knowledge.
Effective date:
FirstEnergy Corp.
James F.Pearson Senior Vice President & Treasurer STATE OF OHIO COUNTY OF SUMMIT Subscribeand sworn o me, a Notary Public, in and for the City/County and State above named, this 2
day of 2=12.
My Commission Expires:
/*
FirstEner I a encrat n, LLC Rosidont Summit County Byotary Public, State of Ohio o~My Comisrisio nl Expires: 08/28/2016 Vice President & Corporate Secretary STATE OF OHIO COUNTY OF SUMMIT Subscribed and sworn to me, a Notary Public, in and for the City/County and State above named, this JjB day of_))e,0 2012.
SAMANTHA B. SARAH NOTARY PUBLIC, STATE OF OHIO My Commission Expires: \\ )Q.
-.\\ 70\\L Recorded in Summit County My commission expires Dec. 21, 2014 Page 6
Enclosure B L-1 2-440 Comparison of December 19, 2011 Parental Guaranty and December 17, 2012 Parental Guaranty (7 pages follow)
PARENTAL GUARANTY GUARANTY, dated as of Nevember-December 17-,
2012_+, made by FirstEnergy Corp., an Ohio corporation (the "Guarantor") to Guarantor's indirect, wholly_-owned subsidiary, FirstEnergy Nuclear Generation. -eTpLLC. ("FENGenCo").
WITNESSE-TH:
WHEREAS, FENGenCo is an indirect, wholly-owned subsidiary of the Guarantor and has a 100% undivided ownership interest in Beaver Valley Power Station, Unit No. 1
("BVPS 1") and 87.42 % of the undivided ownership of the Perry Nuclear Power Plant ("Perry");
WHEREAS, the NRC has promulgated regulations in Title 10, Chapter 1 of the Code of Federal Regulations ("CFR"), Part 50 which require that a holder of, or an applicant for, a license issued pursuant to 10 CFR Part 50 provide assurance that funds will be available when needed for required decommissioning activities; WHEREAS, the Guarantor receives substantial indirect benefits from owning its indirect subsidiary, FENGenCo (which benefits are hereby acknowledged), and accordingly, desires to execute and deliver this Guaranty in order to provide financial assurance for FENGenCo's obligations for the decommissioning of BVPS 1 and Perry as required by 10 CFR Part 50; WHEREAS, the Guarantor previously entered into a Guaranty dated Mafeh 4 December 19, 2011(0, which it intends to revoke and replace with this Guaranty; WHEREAS, the Gutarantor previously entered inte a Guaranty dated as of June 14, 20114, which was intended to take effect, replaec and superscde the prier-Guar-anty dated March 4, 2010, upo rept of the pr-ior writlen eeonscnt of the NR-C;-
WHEREAS, NRC fievcr providcd the reqluired prior writtenl consent forf the June 14, 201 Guaranty to take effect, rceplaec and supersedc the prior-Guaranty dated Mafeh 4,-204-0-,
WHEREAS, the M~arch 4, 2010 Cuaranlty has bccome void by vir~tue o f ie Nefiee submitted to NRC en June 24, 2011 and the passage 120 days following such Nefiee as pfev'ided ter-in Paragr-aph 13 of such tGuaranty dated Marceh 4, 20U; andf WHEREAS, the Guarantor is entering into this Guaranty to replace boh-the Guaranty dated Mafeh-4,-20WDecember 19, 2011., which i......' vod Ma the J..
, 1-Gu...
which niever-took effect-.
NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to the Guarantor, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby makes the following representations and warranties to FENGenCo and hereby covenants and agrees as follows:
The Guarantor has full authority and capacity to enter into this Guaranty under its bylaws, articles of incorporation, and the laws of the State of Ohio, its state of incorporation.
Guarantor has approval from its Board of Directors to enter into this guaranty.
DBI/ 71714959.1
- 2.
This gua..ai..y-Guaranty is being issued so that FENGenCo will be in compliance with regulations issued by the Nuclear Regulatory Commission (NRC), an agency of the U.S.
Government, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974. The NRC has promulgated regulations in Title 10, Chapter I of the Code of Federal Regulations, Part 50, which require that a holder of, or an applicant for, a license issued pursuant to 10 CFR Part 50 provide assurance that funds will be available when needed for required decommissioning activities.
- 3.
This guaranty Guaranty-is issued to provide financial assurance for decommissioning activities for BVPS 1, Docket No. 50-334, License No. DPR-66, and Perry, License No. NPF-58, Docket No. 50-440, as required by 10 CFR Part 50. The decommissioning costs for BVPS 1 and Perry are guaranteed in the aggregate amount of $95 million for both BVPS 1 and Perry.
- 4.
The Guarantor will meet or exceed the criteria from Financial Test II.A.2 from 10 CFR Part 30, Appendix A and agrees to notify FENGenCo and the NRC of any changes in its ability to meet the Appendix A criteria in compliance with the notification requirements as specified in 10 CFR Part 50. Specifically, the Guarantor will possess:
(a)(i)
A current rating of its scnicr unsccured debt ratingmost recent uninsured.
uncollateralized, and unencumbered bond issuance of BBB-or higher as issued by Standard and Poor's, or Baa3 or higher as rated by Moody's; and (ii) Tangible net worth is at least $40-21 million and total net worth of at least six times the eunt demmii.ni...........ng est estim.ate or-Guar.anty amo..tamount of decommissioning funds being assured by this guarantee; and (iii) Assets located in the United States amounting to at least 90 percent of its total assets or at least six times the current decommissioning cost or Guaranty amount.
- 5.
The Guarantor has an indirect majority control of the voting stock in FENGenCo.
FENGenCo is located at 76 South Main Street, Akron, Ohio 44308. FENGenCo owns the BVPS 1 facility, License No. DPR-66 and has an 87.42 % interest in the Perry facility, License No. NFP-58.
- 6.
The term "decommissioning activities" as used herein refers to the activities required by 10 CFR Part 50 for decommissioning of the facilities identified above.
6-.7.
The Nuclear Decommissioning Master Trust Agreement, entered into with Mellon Bank, N.A. (now, Bank of New York Mellon, a New York state bank having trust powers) on December 1, 2005, was established to maintain funds for decommissioning. This master trust agreement sets up the FE BVPS 1 Nonqualified Fund and the FE Perry Nonqualified Fund, which will serve as the "standby trusts" contemplated by the NRC's regulations for payment of funds under this Guaranty.._
For value received from FENGenCo and pursuant to the authority conferred upon the Guarantor, the Guarantor guarantees that if FENGenCo fails to perform the required DBI/ 71714959.1 Page 2
decommissioning activities, as required by License No. DPR-66 and License No. NPF-58, due to lack of funds, the Guarantor shall:
(a) provide all funds necessary, up to the amount of this Guaranty to carry out the required activities.; or (b) set-!up-apay into the existing trust fund-in flaver.f FENG.nC.referenced in Paragraph 7 in-the amount of this guaranty afi-etont for these activities.
- 1. _
The Guarantor agrees to submit revised financial statements, financial test data, and a special auditor's report and reconciling schedule to the NRC annually within 90 days of the close of the parent Guarantor's fiscal year.
The Guarantor and FENGenCo agree that if the Guarantor fails to meet the financial test criteria at any time after this Guaranty is established, the Guarantor and FENGenCo shall send, within 90 days of the end of the fiscal year in which the Guarantor fails to meet the financial test criteria, by. e.
ified maihwritten notice to the NRC using NRC's electronic information exchange. If FENGenCo fails to provide alternative financial assurance as specified in 10 CFR Part 50, as applicable, and obtain written approval of such assurance from the NRC within 180 days of the end of such fiscal year, the Guarantor shall provide such alternative financial assurance in the name of FENGenCo or make full payment under the Guaranty to a-the existing standby trust established by FENGenCo.
.11.
Independent of any notification under paragraph 8 above, if the NRC determines for any reason that the Guarantor no longer meets the financial test criteria or that it is disallowed from continuing as a Guarantor for the facilities under License No. DPR-66 and License No. NFP-58, the Guarantor agrees that within 90 days after being notified by the NRC of such determination, an alternative financial assurance mechanism as specified in 10 CFR Part 50 as applicable, shall be established by the Guarantor in the name of FENGenCo unless FENGenCo has done so.
4-t1-2.
The Guarantor as well as its successors and assigns shall remain bound jointly and severally under this Guaranty notwithstanding any or all of the following: amendment or modification of license or NRC-approved decommissioning funding plan for that facility, the extension or reduction of the time of performance of required activities, or any other modification or alteration of an obligation of FENGenCo pursuant to 10 CFR Part 50.
1-l3. The Guarantor agrees that it will be liable for all litigation costs incurred by FENGenCo or the NRC in any successful effort to enforce the agreement against the Guarantor.
4-714.
The Guarantor agrees to remain bound under this Guaranty and financial test provisions for as long as FENGenCo must comply with the applicable financial assurance requirements of 10 CFR Part 50, for the previously listed facilities, except that this Guaranty may be eaneelled and extinguished or-the amount of the Guarantty speeified in Peagragiph 3 -may be amended by the agreement of Guarantor and FENGenCo with the-30 days prior written eenoen#-t ofnotice to the NRC, and except that the Guarantor may cancel this Guaranty by sending written notice by ee.ifiedmail to the NRC and to FENGenCousing NRC's electronic information exchange, such cancellation to become effective no earlier than 120 DBI/ 71714959.1 Page 3
days after receipt of such notice by both-the NRC and FENGenCo as evidenced by the return receipts, and except thAt "h Guar-anly, maybe be canecllcd and extinguished if it-is Fepifted by a Guaranty in a greater-amount thn the amount speeffied in Paragraph 3 heieef.
Guarantor shall also notify FENGenCo. If FENGenCo fails to provide alternative financial assurance as specified in 10 CFR Part 50, as applicable, and obtain written approval of such assurance within 120 days after the sending of the above notice by the Guarantor, the Guarantor shall provide such alternative financial assurance, or make full payment under the Guaranty to the existing standby trust established by FENGenCo.
15._- The Guarantor expressly waives notice of acceptance of this Guaranty by the NRC or by FENGenCo. The Guarantor also expressly waives notice of amendments or modification of the decommissioning requirements and of amendments or modifications of the licenses.
16L The Guarantor files financial reports with the U.S. Securities and Exchange Commission (SEC), which are available to NRC and need not be submitted separately in accordance with 10 CFR 50.71(b).
17 The Guarantor agrees that if the Guarantor admits in writing its inability to pay its debts generally, or makes a general assignment for the benefit of creditors, or any proceeding is instituted by or against the Guarantor seeking to adjudicate it as bankrupt or insolvent, or seeking dissolution, liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian, or other similar official for the Guarantor or for any substantial part of its property, or the Guarantor takes any action to authorize or effect any of the actions stated in this paragraph, the Commission may:
(a) declare that the financial assurance guaranteed by the this Guaranty is immediately due and payable to the existing trust referenced in Paragraph 7, without diligence, presentment, demand, protest, or any other notice of any kind, all of which are expressly waived by Guarantor: or 4-ý(b) exercise any and all of its other rights under applicable law.
- 18.
The Guarantor agrees to notify the NRC, in writing, immediately following the filing of a voluntary or involuntary petition for bankruptcy under any chapter of title 11 (Bankruptcy) of the United States Code, or the occurrence of any other event listed in Paragraph 17, by or against:
(a) the Guarantor; (b) FENGenCo; (c) an entity (as that term is defined in 11 U.S.C. 101(15)) controlling FENGenCo or listing the license or FENGenCo as property of the estate; or (d) an affiliate (as that term is defined in 11 U.S.C. 101(2)) of FENGenCo.
DBI /71714959.1 Page 4
A/.
The notification required by Paragraph 18 must include the following:
19 (a) a description of the event, including major creditors, the amounts involved, and the actions taken to assure that the amount of funds guaranteed by this Guaranty for decommissioning will be transferred to the existing trust referenced in Paragraph 7 as soon as possible:
(b) if a petition of bankruptcy was filed, the identity of the bankruptcy court in which the petition for bankruptcy was filed: and (c) the date of filing of any petitions.
-6;.0.
This Guaranty and the rights and obligations of the FENGenCo and the Guarantor hereunder, shall be governed by and construed in accordance with the domestic laws of the State of Ohio without giving effect to any choice or conflict-of-law provision or rule (whether of Ohio or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Ohio. The Guarantor and the FENGenCo each consent to the exclusive jurisdiction and venue of any state or federal court within the State of Ohio for adjudication of any suit, claim, action or other proceeding at law or in equity relating to this Guaranty, or to any transaction contemplated hereby. The Guarantor and FENGenCo each accept, generally and unconditionally, the exclusive jurisdiction and venue of the aforesaid courts and waive any objection as to venue, and any defense offorum non conveniens. The Guarantor hereby irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the Guarantor at its address set forth opposite its signature below, such service to become effective 30 days after such mailing. Nothing herein shall affect the right of FENGenCo to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Guarantor in any other jurisdiction. The Guarantor hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with the Guaranty brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
4-7-.2.
All notices and other communications hereunder shall be made to FirstEnergy Corp.'s Chief Financial Officer and General Counsel at 76 South Main Street, Akron, Ohio 44308.
4-&.2 2.
It is intended that this Guaranty shall replace the existing Guaranty dated Maeh-4 20--ODecember 19, 2011, which is to be cancelled, revoked and rescinded with no further effect -efFee6-ive120 days after receipt of written notice by the NRC. As such, this Guaranty will come into force effective upon the cancellation of the December 19, 2011 Guaranty 120 days after receint of the reauired written notice by the NRC. which ha* heen caneclle rrrevokedn**nd feeinde with ni
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enJu ne 2 1,201 1. The Gutarantydat edu nfe 14, 2011 1eftokeffieeibeeause th eefietien pr-eeeent to fts et teetieness kpff wr nffenfo ensentt efth NW&
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$ q III 1¶), 20J I1., is no3w voidyilI become void I 20 days aftT-er etot of writen-notice by the NRQ7.~
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-If it is ever determined that the Guaranty dated March 4, 20 WDecember 19, 2011, or any prior Guaranty, remains enforceable and not properly cancelled, revoked and rescinded with no further force and effect, than the amount of this Guaranty specified in Paragraph 3 hereof shall be reduced by the amount ($15 millien) spe.ified in Paragraph 3 of the Guaranty dated Mafeh 4,2 M-Ospecified in such prior guaranty which remains in effect. If it is eve 20!!ninF
.... tat the.G..y a
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iv. and i...t enf.r.eable, than the amount of this Guaranty p.eif.d in Paragraph 3 hereof shall be 2011. For. avoidance of doubt, the intent of the foregoing provisions i f to atwe that the amount of decommfissioning liability guaranteed by Fir-st~nefgy Corp. pturuati4to-any eid all Pa~r"na GuarwAnie thAt are or-may be enferecable as of the date set forth below sha1i be,ad sheal not in any ease emed the total amount ($95 millien) speeified in Paragf-aph 3 hef~ee DB1/ 71714959.1 Page 6
I hereby certify that this Guaranty is true and correct to the best of my knowledge.
Effective date:
FirstEnergy Corp.
By James F. Pearson Senior Vice President & Treasurer STATE OF OHIO COUNTY OF SUMMIT Subscribed and sworn to me, a Notary Public, in and for the City/County and State above named, this day of _
20442012.
My Commission Expires:
I FirstEnergy Nuclear Generation. LLC Gefp-By Rhonda S. Ferguson Vice President & Corporate Secretary STATE OF OHIO COUNTY OF SUMMIT Subscribed and sworn to me, a Notary Public, in and for the City/County and State above named, this day of _
, 20142012.
My Commission Expires:
DBI/ 71714959.1 Page 7