L-14-215, ISFSI, Davis-Besse ISFSI, Perry and ISFSI - Replacement of Parental Guarantees

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ISFSI, Davis-Besse ISFSI, Perry and ISFSI - Replacement of Parental Guarantees
ML14183B295
Person / Time
Site: Beaver Valley, Davis Besse, Perry, 07201043, 07200069
Issue date: 07/02/2014
From: Sena P
FirstEnergy Nuclear Operating Co
To:
Document Control Desk, Office of Nuclear Material Safety and Safeguards, Office of Nuclear Reactor Regulation
References
L-14-215
Download: ML14183B295 (36)
v • d • e


Text

341 lilhite Pond Drive Akron, Ohio 44320 Peter P. SenaIII 330-436-l350 Presidentand ChiefNuclear July2, 2014 L-14-215 1 0c F R 5 0 . 7 5 10 cFR 72.30(b)

ATTN:DocumentControlDesk U. S. NuclearRegulatory Commission Washington, DC 20555-0001

SUBJECT:

BeaverValleyPowerStation,UnitNo. 1 DocketNo.50-334,LicenseNo.DPR-66 BeaverValleyPowerStationISFSI DocketNo.72-1043 Davis-Besse NuclearPowerStationISFSI DocketNo.72-14 PerryNuclearPowerPlant DocketNo.50-440,LicenseNo.NPF-58 PerryNuclearPowerPlantISFSI DocketNo.72-69 Replacement of ParentalGuarantees By letterdatedJune18,2013(Accession No.ML13169A262), the FirstEnergy NuclearOperating Company(FENOC)submitted to the NuclearRegulatory Commission (NRC)an amendedand restated$125millionparentalguarantyfrom FirstEnergy Corp.(FE)to FirstEnergy NuclearGeneration, LLC(FENGenCo).

The $125millionguarantyfromFE replaceda previousparentalguarantyin the amountof $95 million,and it providedadditional decommissioning funding assurance for BeaverValleyPowerStation,UnitNo. 1 (BVPS-1)and Perry NuclearPowerPlant(PNPP).

By letterdatedJune 18,2013(Accession No. ML13169A322), FENOCsubmitted an amendedand restated$11 millionparentalguarantyfromFE in orderto providerequiredfinancialassurance for the Independent SpentFuelStorage Installations (lSFSls)for PNPPand Davis-Besse NuclearPowerStation(DB).

The $11 millionguarantysatisfied of FENGenCo the obligations andthe Ohio EdisonCompany(OE)to provide financialassurance for the PNPP and DB lSFSls.

BeaverValleyPowerStation,UnitNo. 1 BeaverValleyPowerStationISFSI Davis-Besse NuclearPowerStationISFSI PerryNuclearPowerPlant PerryNuclearPowerPlantISFSI L-14-215 Page2 FENOChasdetermined the amountof additional financialassurance requiredfor BVPS-1and PNPPdecommissioning has increased from$125millionto $155 million.Therefore, FENGenCo hasobtaineda parental guarantyin the amountof

$155millionfrom its directparentcompany,FirstEnergy Solutions Corp.(FES).

Thus,this letterandthe $155millionparentalguarantyattachedas Enclosure A providenoticeof the cancellation of the $125millionguarantyfrom FE. The requiredFinancialTest and Certification for FESis providedin Enclosure B. The

$155millionguarantytakeseffectuponcancellation of the $125millionguaranty.

In addition,FENOChasdetermined thata totalof $20.5millionin financial assurance willbe requiredfor the decommissioning of the PNPP,DB,and Beaver ValleyPowerStation(BVPS)tSFSls.Of thisamount,approximately $2.7millionis to be providedby OE andThe ToledoEdisonCompany(TE)for theirinterestsin the PNPPandBVPSlSFSls,andapproximately $17.8millionis to be provided by FENGenCo in the PNPP,DB,andBVPSlSFSls.Thus,FE for its interests amended theexisting$11millionguaranty to meettheobligations of OE andTE, as setforthin the Amendedand Restated$4 millionparentalguarantyprovidedas Enclosure C. The requiredFinancialTest andCertification establishing FE's qualificationsto providea $4 millionguarantywas providedby letterdated March28,2014(Accession No. ML14087A454). The $4 millionguarantywilltake effect30 daysafterreceiptof thisnoticeby the NRC. Further,FENGenCo has obtaineda $19millionparentalguarantyfromFES,whichis providedas Enclosure D. The requiredFinancial Testand Certification for FESis providedin Enclosure B. The $19 millionguarantywilltakeeffect30 daysafterreceiptof thisnoticeby the NRC.

Thereare no regulatory commitments containedin this letter.lf thereare any questions, or if additional information pleasecontactMr.ThomasA. Lentz, is required, Manager-FleetLicensing, at (330)315-6810.

Sincerely,

/*Pdr PeterP. Sena.lll

BeaverValleyPowerStation,UnitNo. 1 BeaverValleyPowerStationISFSI Davis-Besse NuclearPowerStationISFSI PerryNuclearPowerPlant PerryNuclearPowerPlantISFSI L-14-215 Page3

Enclosures:

A. $155MillionParental Guaranty B. FinancialTest for FirstEnergy and Certification SolutionsCorp.

C. $4 MillionParentalGuaranty D. $19MillionParental Guaranty cc: NRCRegionlAdministrator NRC Regionlll Administrator NRCResidentInspector for BVPS NRCResident InspectorforDBNPS NRCResidentInspector for PNPP NRCProjectManagerfor BVPS NRCProjectManagerfor DBNPS NRCProjectManagerfor PNPP DirectorBRP/DEP SiteBRP/DEPRepresentative UtilityRadiological SafetyBoard

EnclosureA L-14-215

$155MillionParental Guaranty (Sevenpagesfollow)

PARENTALGUARANTY GUARANTY,datedasof June30,2}l4,madeby FirstEnergySolutionsCorp.,an Ohio corporation (the"Guarantor')to Guarantor's whollyownedsubsidiaty,FirstEnergy Nuclear Generation, LLC ("FENGenCo' ).

wlINEgsErH:

WHEREAS, FENGenCois a direct,wholly owned subsidiaryof the Guamntorand is licensedto possessa 100%undividedownershipinterestin BeaverValley Power Station, UnitNo. I ("BVPS l") and an87.42% of theundividedownetshipintetestin the PenyNuclear Powsr Plant ('Perry');

WHEREAS, the U,S, NuclearRegulatoryCommission("NRC') haspromulgated regulationsin Title 10, ChapterI of the Codeof FederalRegulations("CFR'), Paft 50 which requirethat a holdet of or an applicantfor, a licenseissuedputsuantto 10 CFR Part 50 provide assurancethat funds will be availablewhen neededfor requireddecommissioningactivities; WHEREAS, tlre Guarantorreceivessubstantialbenefitsfi'om owning its subsidiary, FENGenCo (which benefits are hereby acknowledged),and accoldingly, desites to executeand cleliverthis duaranty in or.derto provide financial assurancefor FENGenCo'sobligationsfor tlre decommissioningof BVPS 1 and Perry asrequiredby 10 CFR Part 50; and WHEREAS,this $155million ParentalGuarantyreplacesthe $125rnillion Amendedand RestatedParentalGuarantyissuedby FirstEnergyCorp, anddatedJune 11,2013, andNotice is herebygiven of the canceliationof the $125 rnillion ParcntalGuarantyfrorn FirstEnergyCorp.

NOW, TI-IEREFORE,in considerationof the foregoingand other benefitsac$uing to the Guarantor,the receiptand sufficiencyof which are herebyacknowledged,tfre Guarantorhercby rnakesthe following representations and warmntiesto FENGenCoand herebycovenantsand agreesas follows:

1. The Guarantorhas full authority and capacityto enter into this Guatantyunder its bylaws, afiicles of incorporation,and the laws of the Stateof Ohio, its stateof incorporation.

Guarantorhasapploval fi'om its Board of Directorsto enterinto this Guaranty.

This Guaralty is being issuedso that FENGenCowill be in eompliancewith regulations issuedby the NRC, uiug"n"y of the U.S. Government,putsuantto the Atomic EnergyAct of 1954,as amended,and t[e EirergyReorganizationAct of 1974, The NRC haspromulgated regtrlationsi1Title 10, ChapterI of the Codeof FederalRegulations,Part SO,_whichrequirc thlt a holder of, or an appliiant for, a licerrseissuedputsuantto 10 CFR Part 50 provide assurancethat fundswiifUe availablewhenneededfor reqnireddecommissioningactivities.

3. This Guarantyis issuedto provide financialassurancefor decommissioningactivitiesfor BVPS 1, DocketNo, S0-3i4, LicenseNo. DPR-66,andPemy,DocketNo. 50-440,License No, NPF-58, as requireclby 10 CFR Part 50. The decommissioningcostsfor BVPS 1 and Perry are guaranteedin the amountof $155million.
4. Tlre Guarantorwill meet or exceedthe ctiteria fiom FinancialTest lI'A.2 from 10 CFR Part 30, AppenclixA and agreesto notify FENGenCoand the NRC of any changesin its ability to rneetthe Appendix A criteria in compliancewith the notification requircmentsas specifiedin 10 CFR Part 30. Specifically,the Guarantorwill possess:

(aXD A currentrating of its most recentuninsured,uncollateralized,and unencumbered bond issuanceof BBB- or higher as issuedby Standardand Poor's, or Baa3 or higher as ratedby Moody's; and (ii) Turgible net worth is at least$21 million and total net worth of at leastsix times the amountof decommissioningfuirds being assutedby this guatantee;and (iii) Assetslocatedin the United Statesamountingto at least90 pelcentof its total assetsor at leastsix times the currentdeconulissioningcost or Guamntyamount,

5. The Guarantorhasa rnajority control of the voting intercstsin FENGenCo. FENGenCois locatedat ?6 SotrthtrrtainStreet,Akrrcn,Ohio 44308. FENGenCoowns the BVPS 1 facility' LicenseNo. DPR-66 anclhas at87,42 o/ointerestin the Perryfacility, LicenseNo. NPF-58.
6. The term'.decommissioningactivities" as usedhereinrefersto the activitiesrequiredby 10 CFR Part 50 for decommissioningof the facilities identified above.
7. The Nuclear DecommissioningMasterTrust Agreement,enteredinto with Mellon Bank, N,A. (now, Bank of New York Mellon, a New York statebank havingtfust powers)on December1,2005, was establishedto maintainfundsfor decommissioning.This master trust agreemenrsetsup the FE BVPS 1 NonqualifiedFund andthe FE PerryNonqualified Fund,ivhich will serveas the "standbytrustsl'contemplatedby the NRC's regulationsfor paymentof funds underthis guarantee.
8. For value rcceiveclfi.on FENGenCoandpursnantto the authorityconfenedupon the Guarantor,the Guarantorguarantees ttratlf n'BNGenCofails to pelform the requited decommissioningactivitie;, asrequiredby LicenseNo. DPR-66 and LicenseNo. NPF-58, due to lack of funds,the Guarantorshall:

(a) pr.ovidea1lfunds necessary,up to the amountof this Guarantyto caily out the requiredactivities;or (b) pay into the existingtrust fund referencedin PatagraphT the amountof this GuarantYfor theseactivities.

9, The Guarantoragreesto submitreviseclfinancial statements,financialtest data,and a special auditor'sreport andrcconciling scheduleto the NRC annuallywithin 90 daysof the closeof the parentGuaratrtor's{iscal year.

10. The Guarantorand FENGenCoagreethat if the Guarantorfails to meet the financial test criteria at any time after this Guarantyis established,the Guarantorand FENGenCoshall send,within 90 daysof the end of the fiscal year in which the Guarantorfails to rneetthe financial testcriterlia,written noticeto the NRC usingNRC's electtonicinfotrnation Page2

exchange.Suchrvritten notice also shouldbe madeby FENGenCowithin 90 daysof any matters conring to the auditor's attention which causethe auditor to believe that the data specifiedin the financial test shouldbe adjustedand that the Guarantorno longerpassesthe test. 1f FENGenCofails to provide alternativefinancial assuranceas specifiedin 10 CFR Part 50, as applicable,whichmust be submittedto NRC within 120 daysof the end of such fiscal yearoi upott making noticethat the Guarantorno longerpassesthe t9st, and obtain written apptouulof suchassulancefrom theNRC within 60 daysof the submittalnthe Guarantor.shallprovide such altemativefinancial assurance inthe nameof FENGenCoor make full paymentunderthe Guarantyto the existing standbytrust establishedby FENGenCo.

ll. Independentof any notification underparagraph8 above,if the NRC determinesfor any reasonthat the Guarantorno longer meetsthe financial testcriteria or that it is disallowed from continuingas a Guarantorfor the facilities underLicenseNo. DPR-66 and License No. NPF-58,th-eGuarantoragreesthat within 90 daysafter being notified by the NRC of suc.hdetermination,an alternativefinancial assurance mechanismas specifiedin 10 CFR par.t50 as applicabie,shall be establishedby the Guarantorin the nameof FENGenCounless FENGerrCohasdoneso.

t2, The Guarantoras well as its successors and assignsshall remainboundjointly and severally underthis Guarantynotwithstandingany or all of the following: amendmentor modification of licenseor NRC-approvedclecominissioning funding plan for that facility, the extensionor reductiol of the timilf pelformanceof requiredactivities,or any other modification or alterationof an obligation of FENGenCopursuantto 10 CFR Par150.

13. The Guarantoragreesthat it will be liable for all litigation costsincurredby FENGenCoor the NRC in any zuccessfuleffort to enforcethe agreementagainstthe Guarantor.
14. The Guarantoragreesto remain boundunderthis Guarantyand financial test provisionsfor in the previouslylisted facilities until the Commissionhasteuninatedthe licenses,accepted writlng the parentcompany'salternatefinancial assurances' or accepted in writing the licensie's financial urruran"r, except that this Guamnty may be amendedby the agfeement of Guarantorand FENGeICo with lO duyr prior written notice to tlreNRC, and exceptthat the Guamntormay cancelthis Guaranty6y sendingwritten notice to the NRC usingNRC's electronicinformationexchange,suchcancellationto becomeeffectiveno eaflier than 120 daysafter receiptof suchnoticeby theNRC as evidencedby the teturn leceipts.

Guarantorshall alsonotifr FENGenCo. If FENGenCofails to provide alternativefinancial

  • rutur.r as specifiedin iO CpR Part 50, asapplicable,and obtain written approvalof such assurancewithin 120days after the sendingof the abovenoticeby the Guarantor,the Guarantorshall provide such alternativefiiancial assurance, or make full paymentundertlre Guarantyto the existing standbytrust establishedby FENGenCo.
15. The Guarantorexpresslywaivesnotice of acceptance of this Guatantyby the NRC or by FENGenCo. The Guarantoralso expresslywaivesnoticeof amendmentsot modification of the decommissioningr.equirements and of amendmentsor modificationsof the licenses.

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16. TheGuarantor filesfinancialreportswith theU.S,Securities andExchange Commission (SEC),which areavailableto NRC andneednot be submitted separately in accotdance with 10cFRs0.7r(b).
17. The Guarantoragrcesthat if the Guarantoradmitsin writing its inability to payits debts generally,or makesa generalassignment for thebenefitof cfleditors, ol anyproceeding is institutedby or againsttheGuarantor seekingto adjudicate it asbankruptor insolventor seekingclissolution,liquidation, winding-up,reorgalization, an'angement, adjustment, protection, relief or composition of it or its debtsunderany law relating to bankruptcy, insolvency, or reorganization or rrcliefof debtors,ot seekingtheentryof anorderfot reliefor theappointment of a receiver,trustee,custodian, or othersimilaroffrcialfor theGuarantor or part for anysubstantial of its property, or the Guarantor takes any action to authorizeor effectanyof the actionsstatedin thisparagraph, theCommission may:

(a) declatethatthefinancialassurance guaranteed by thethisGuarantyis immediately dueandpayableto theexistinglust referenced in Paragraph 7, withoutdiligence, prcsentment, dernand,protest,or anyothernoticeof anykind,all of whichate exprrsslywaivedby Guarantor; or (b) exerciseanyandall of its otherrightsunderapplicable law.

18. TheGuarantor agreesto notify theNRC,in writing,irnmediately followingthefiling of a voluntaryor involuntarypetitionfor bankruptcy underanychapterof title l1 (Bankruptcy) of theUnitedStatesCode,or theoccurrence of anyothereventlistedin Paragraph 1?,by or against:

(a) the Guarantor; (b) FENGenCo; (c) anentity(asthattermis definedin 11U.S.C.101(15)contrnllirrg FENGenCo or listingthelicenseor FENGenCo aspropertyof theestate;or (d) anaffiliate(asthattermis definedin 11u.s.c. 101(2)of FENGenCo.

19. Thenotificalionrequiredby Paragtaph 18mustincludethefollowing:

(a) a description ofthe event,includingmajorcreditors,theamountsinvolved,andthe actionsiakento assurethattheamountof fundsguaranteed by this Guatantyfor decomrnissioning will be transfemed to the existingtrust referenced in Parcgraph7 as soonaspossible; (b) if a petitionof bankluptcywasfilecl,theidentityof thebankluptcycou$in whichthe petitionfot bankruptcy wasfiled; and (c) thedateof filing of anypetitions.

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20. This Guarantyandtherightsandobligationsof theFENGenCo andthe Guamntor hereunder, shallbegoveinedby andconstrued in accordance with thedomesticlawsof theStateof Ohio withoutgivingeffectto anychoiceor conflict-ofJawprovisionor rule (whetherof theState of Ohioot unyotherjurisdiotion)thatwouldcausetheapplicationof thelawsof any jurisdictionotherthantheStateof Ohio. TheGuarantot andtheFENGenCoeachconsentto ihe exclusivejurisdictionandvenueof anystateor federalcourtwithin the Stateof Ohio for adjudication of unysuit,claim,actionor otherproceeding at law or in equityrelatingto this Guaranty,or to anytransactioncontemplated hereby.The GuarantorandFENGenCoeach accept,generallyandunconditionally, theexclusive jurisdictionandvenueof theaforesaid rta waiveanyobjectionasto venue,andanydefenseofformt non conveniens.The "outir Guarantor herebyirrevocablyconsents to theserviceof processout of anyof the aforernentioned courtsin anysuchactionor prnceeding by themailingof copiesthereofby registered or certifiedmail,postage prepaid,to the Guarantor at its addrrcss setforthopposite its signature belorv,suchseiviceto 6ecorne effective30 daysaftersuch mailing' Nothing hereinshallaffecttheright of FENGenCo to serveprocessin anyothermannerpemittedby law or to commence tegalproceedings or otherwise ploceedagainsttheGuarantor.in any otherjgrisdiction.The-Gulrantor herebyirrevocablywaivesanyobjection which.itmay now or hereafter haveto thelayingof venueof anyof theaforesaid actionsor proceedings arising out of or in connectionwiitr theGuarantybrought in the courts refen'ed to above and hereby furtherinevocablywaivesandagreesnot to pleador claimin anysuchcourtthatanysuch actionor proceeding broughtin anysuchcourthasbeenbroughtin aninconvenient forum.
21. All noticesandothercommunications hereunder shallbemadeto the Guarantor's Chief FinancialOfficerandGeneralCounselat34l WhitePondDrive,Akron,Ohio44320'
22. If it is everdetermined thattheArnendedandRestatecl ParentalGuarantydatedJune11, 2013issuedby FirstEnergy Corp.in theamountof $125million("$125MillionGuaranty'),

or anyprior Guarantyfor:decommissioning, remainsenforceable andnot properlycancelled,

,evok"i andrescindia*ittt no furlherforceandeffect,thanthe amountof this Guaranty specifieclin Paragraph 3 hereofshallberedtrced by the amo91tspecifiedin suchpdor duarantywhichi.emains in effect. For avoidance of doubt,Noticeis herebygivento the NRC of thecancellation of theobligationsof FirstEnergy Corp.undertheprior $125Million Guamnty,andthisGuarantyis provicled asthealternative assul'ance requiredby Section14 of the$125Million Guaranty.

23. This Guarantyshallleplacetheexisting$125Million Guarantyissuedby FirstEneryyCory' The$125Million Guaranty tookeffecionJuly 18,2013,30 daysaftertheJune18,2013 noticesubmittedto NRC,andit cancelled theprior Guaranty datedDecember17,2012. This Guarantyshallbeeffectiveuponaancellation of tlte$125Million Guaranty, whichshall or",,r.upol theearlierof either: (a)rn'ittenagreement by the NRC of acceptance of this Guaraniyanclcancellation of the$iZS tttittionGuaranty; (b) or ttre eyiflion.of 120 days afterr.eceipt by theNRC of thiswrittennoticeof cancellation of tlre $125Million Guaranty andreplacement with thisGuaranty pursuant to the teffnsof Section 14of the$125Million Guaranty.

IREMATNDEROF PAGEINTENTIONALLY LEFT BLANK]

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The undersignedhascausedthis Guarantyto be executedand deliveredas ofthe day and year first abovewritten.

F'irstEnergySolutionsCorp.

By StevenR. Staub

& Treasurer Vice President Acknowledged asof June30,2014 FlrstEnergy Nuclear Generation,LLC By RhondaS. Ferguson VieePresident & CotporateSecretary Page6

CERTIFICATION I herebycertify that this Guarantyis trueandcolrestto the bestof my knowledge.

Effectivedate:June30,2014 FirstEnergySolutionsCorp.

/7 n (")

\/i/

,t/i- [t By fi{iu l{' .o#lc'tU StevenR. Staub Vice Plesident& Treasurer STATEOF OHIO COIJNTYOF SUMMIT Subscribed anclswor.nto nre,a NotaryPublis,in andfor the CountyandStateabove nanred,this,fuzt- dayof June,2A14.

My Commission ExPir es:ilrc /a" 7 '

Nuclear Generation'LLC RhondaS. Ferguson Vice President&

STATEOFOHIO COUNTYOF SUMMIT Subscribed andswortrto me,a NotaryPublic,in and for the County and Stateabove nanred,thisffiday of June,2014, Publlc, StateofOhio

Enclosure B L-14-215 FinancialTest and Certification SolutionsCorp.

for FirstEnergy (Fivepagesfollow)

J u n e3 0 , 2 0 1 4 ATTN: DocumentControl Desk U.S, NuclearRegulatoryCommission Washington,DC 20555-000I

Subject:

FirstEnergySolutionsCorp. Guaranteeof Fundsfor Decommissioning:

Letter from Chief FinancialOflicer to DemonstrateFinancial Assurance I am the SeniorVice Presidentand Chief Financial Officer of FirstEnergySolutionsCorp., 341 White Pond Drive, Akron Ohio 44320, an Ohio corporation.This letter is in support of this firm's use of the financial test to demonshatefinancial assurance,as specifiedin 10 CFR Part 50 and CFR Part72' This firm is qualified to provide parent company guarantes,up to $l?4 rnillion for the decommissioning costs for the portions ol the following facilities owned by this firm. The current cost estimate and the amountto be guaranteedfor the portions of the facilities owned are shown as follows:

Location of Current Amount to be Name of Facility Facility CostEstimates Guaranteed BeaverValley Power Shippingport,PA $ 510,139,000 $ 90,000,000 Station,Unit No. I LicenseNo. DPR-66 Perry Nuclear Power Plant Perry, OH S 596,221,884 $ 65,000,000 LicenseNo. NPF-58 Davis-BesseNuclear Oak Harbor, OH S 4'639,427 $ 5,000,000 Power StationIndependent SpentFuel StorageInstallation DocketNo. 72-14 PerryNuclear Power Plant Perry, OH $ 5,313,204 $ 6,000,000 lndependentSpentFuel StorageInstallation DocketNo. 72-69 BeaverValley Power Shippingport,PA $ 7,287,080 $ 8,000,000 StationIndependentSpent Fuel StorageInstallation DocketNo. 72-1043 FirstEnergy Solutions Corp. is required to file a Form l0-K with the U.S. Securities and Exchange Commissionfor the latestfiscal year.

The fiscal year of FirstEnergySolutionsCorp. endson December3l't. The figures for the following items (Financial Test II: Alternative II) marked rvith double asterisksare derived from FirstEnergy Solutions Corp,'s independentlyaudited,year-endfinancial statementsand footnotesfor the latest completedfiscal yearendingDecember31,2013.

I hergbycerti$/ that the contentof this letter is true and correctto the best of my knowledge.

s F. Pearson Vice Presidentand Chief FinancialOfftccr, FirstEnergySolutionsCorp' 30,2014

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

FirstEnergy Solutions Corp. Parent Guarantee of Funds for I)ecommissioning Dollars in Millions

l. GuaranteedamountforthefollowingUnits: $ 174'0 Beaver Valley Power Station,Unit No. 1, LicenseNo. DPR-66 BeaverValley Power Station,TSFSI Perry Nuclear Power Plant,LicenseNo, NPF-58 Davis-BesseNuclear Power Station,ISFSI Perry Nuclear Power Plant, ISFSI
2. Curuentbond rating of most recentunsecuredissuanceof this firm Rating Baa3 Name of Rating Service MoodY's
3. Dateof issuanceof bond 81712009
4. Date of maturity of bond 8115/2021EL slrs/2039
    • 5. TangibleNet Worth $ 1'702
  • 6. Total assetsin the United States(requiredonly if lessthan 90 percent of firm's assetsare locatedin the United States) Seeline 9 below Yes- No .
7. Is Line 5 at least$21 million? X
8. Is line 5 at least6 timesline l? X
9. Are at least90 pefcentof the finn's assetslocatedin the United States? X If not, completeline 10.
10. Is line 6 at least6 times line l? N/A I L Is the rating specifiedon line 2 "BBB" or better(if issuedby Standard and Poor's) or "Baa" or better(if issuedby Moody's)? X
  • Denotesfigures derived from financial statements,
  • + Tangible Net Worth is defined as FirstEnergySolutions L-orp.total equity minus goodwill, patents,trademarksand copyrights; and Power Plant and Davis-FirstEnergy Solutions Corp.'s net book value for BeaverValley Power Station, Unit No. 1 and 2, Perry Nuolear BesseNuclear Power Station.

FIRSTENERGYSOLUTIONSCORP.

YEAR ENDEDDECf,MBER3I, 2OI3 Dollarsin Millions PerFinancial Line Nrunberin CFO's Le$er Statements Total Equity $ 5,312 Less: Goodwill, Patents,Trademarksand Copyrights $ 24 OtherIntangibleAssets $ 129 Net Book Value BeaverValley PowerStation,UnitNo. I $ 404 Net Book Value BeaverValley PowerStation,UnitNo. 2 $ 1,130 Net Book Value Perry Nuclear PowerPlant $ l,l l6 Net Book Value Davis-BesseNuclearPowerStation $ 847

'l'angible 5* Net Worth 1,702

}

pwc Report of Independent Accountants To FirstEnergy Solutions Corp.:

We have performed the proceduresenumeratedbelow, which were agreedto by managementof FirstEnergy Solutions Corp. (the "Company") solely to assistyou in evaluating the Company's compliancc with the financial test as of December3r, zor3 performed in accordancewith the U.S.

Nucleal Regulatory Commission (the "NRC") Regulations ro C.F.R,SectionSo,ZS(eXtXiiiXB) and to C.F.R,Section Zz.go(eXz) as rnandatedby the Parent Company Guarantees.Managementis responsiblefor the Company'scompliancewith those requirements. This agreed-uponprocedures engagementwas conducted in accordancewith attestation standards establishedby the American Institute of Certified Public Accountants.The sufficiency of these proceduresis solely the responsibility of those parties specifiedin this report. Consequently,we make no representation regarding the sufficiency of the proceduresdescribedbelow either for the purpose for which this report has been requested or for any othcr pulpose.

For the purpose of this report, we have:

1. Read the letter, dated June 3o, zor4, from your Senior Vice President and Chief Financial Officer to the NRC regarding the $174 million Parental Company Guaranteesand performed the following procedures,which were applied as explained below:

A- Traced and agreedthe amounts in the column "Per Financial Statements",to a schedule prepared by the Companyfrom its audited financial statementsnoting no differences.

B. T?aced ard agreed the amount in the column "Per CFO's Letter" to linc item +5 in the Company's Financial Test: Alternative II.

C. Recomputed the Tangible Net Worth by subtracting the Company's goodwill, patents, trademarks, copyrights; and FirstEnergy Corp.'s net book value of Beaver Valley Power Station, Unit No. 1 and 2, Davis-BesseNuclear Power Station and Perry Nuclear Power Plant from the Company'sstockholders'equity noting no differences.

D. Inquired of the Vice President,Controller and Chief Accounting Officer regarding whether any off balance sheet transactions exist that could materially adverselyaffect the ability of the Company to pay decommissioning costs- He responded that all material off-balance sheet transactiotrshave been disclosedin the Company'sfinancial statementsas filed in its zor3 Annual Report on Form ro-K, and he does not believe that any of the off-balance sheet transactions will materially adversely affect the Company's ability to pay deconrmissioning costs. We did not perform any fttrther procedures to substantiate managcmcnt'sresponse.

E. We compared the bond ratings per line z of the letter to information obtained as of ,Iune Jo,2aL4 from an external, publicly available source as follows:

-:- j We r,r'erenot engagedto and did not conduct an examination, the objective of which rvould be the expressionof an opinion on compliance.Accordingly, we do not erpress such an opinion. Had we performed additional procedures,other matters might hal'e come to our attention that would have been reported to you.

PricewaterhouseCoopersLLP, 2oo Public Square, 78thnoo1 Cleueland,OH 44tt4-zgot T: (zt6) 87s Jooo, F: (zt6) s66 7846,www.pwc.com/us

}

wc This repoft is intended solely for the information and use of management of the Companyand is not intended to be and should not be used by anyoneother than these specified parties.

..1 .

lttfi"triz :' t'

/'; ^'i'r"':1,-rt'/" a-t PricewaterhousecoopersLLP June 3o, zor4

C Enclosure L-14-215

$4 MillionParentalGuaranty (Ninepagesfollow)

AMANDBDANDRESTATEDPARENTALGUARANTY GUARANTY,datedasof June30,20l4,madeby FirstEnergy Cotp.,anOhio corporation (the"Guararrtor')to Guarantot's wholly ownedsubsidialies, OhioEdisonCompany f'OE") andTheToledoEdisonCompany(.'TE).

wITNEgSETH:

WHEREAS,OE is a direct,whollyownedsubsidiary of theGuamntor,andOEleases andis licensedto possess a 12.58%undividedownershipof thePemyNuclearPowerPlant

('peny") anda2i.66oi intertstin BeaverValleyPowerStationC'BVPS'),lJnit2, for which indepenientspentfuel storageinstallations ("ISFSIs")havebeenor arebeingdeveloped for onsitestorageofspentnuclearfuel; WHEREAS,TE is a dircct,whollyownedsubsidiary of theGuarantor, anclTE leasesand is licensedto possess an l8.26Vointerestin BVPS,Unit 2, for whichanISFSIis beingdeveloped for onsitestorageofspentnuclearfuel; WHEREAS,theU.S.NuclearRegulatory Commission ('NRC') haspromulgated regulations in Title 10,ChapterI of theCodeof FederalRegulations ('CFI{'), Part72 which re{uirethata holderoi or unapplicantfor, a license issuedpursuant to 10CFRPar::1.72 plovide assurance thatfunds*itt br availablewhenneededfor requireddecommissioning activities; WHEREAS,the Guarantor receivessubstantial benefitsfi'omowningits direct subsidiar.ies, OE a1dTE (whichbenefitsare hereby acknowledged), andaccordingly, desiresto executeanddeliverthisduarantyin orderto ptovidefinancialassutance for oE's obligations for thedecommissioning of thePenyanclBVPSISFSIsandfor TE's obligationsfor the decornmissioning of th" BVPSISFSI,asrcquiredby 10 CFRPart72;and WHEREAS,this$4 million Guarantytogetherwitha $19million PatentalGuaranty beingprovidedseparately by FirstEnergySotutionsCorp.replaces the$11million Arnended and Restatecl ParentalGuararityissuedby FirstEnergy Cory'datedJune1I,20L3' NOW, THEREFORE, in colsiderationof theforegoingandotherbenefitsaccruingto the Guamntor,thereceiptanclsuificiencyof whichareherebyacknowledgecl, the Guarantorhereby makesthefollowinj representations andwarmntiesto OE andTE, andGuarantor hereby covenants andagreesasfollows:

1. The Guaraltorhasfnll authorityandcapacityto enterinto this Guarantyunderits bylaws, articlesof incorporation, andthelawsof theStateof Ohio,its stateof incorpotztion.

Guarantor hasapprovalfiom its Boardof Directorsto enterinto this Guaranty.

a This Guaraltyis beingissuedsothatOE andTE will bein compliance with regulations issuedby theNRC,uriug"r.y of theU.S.Government, pursuant to the Atomic EnergyAct of 1954,asamended, andtl-reEnergyReorganization Act of tgl+. TheNRChas promulgated reguiations in Titll 10,Chapteriof theCodeof Federal Regulations, Pa$72, whichrequire thit a holderof, or anapplicantfor, a licenseissuedputsuantto 10 CFR Patt'lZprovide assurance thatfundswiiite availablewlrenneededfor requireddecommissioning activities.

3. ThisGuarantyis issuedto providefinancialassurance for decommissioning activitiesfor the PerryISFSI,DocketNo.T2-69 andtheBVPSISFSI,DocketNo.72-1043, asrequiredby 10CFRPafi7}. Thedecommissioning costsfor thePenyandBVPSISFSIsarcguaranteed in theamountof $4nrillion, Thisamountexceeds12,58o/o of theestimated costof decommissioning thePerryISFSImd19.96Yo of theestimated costof decommissioning the BVPSISFSI.
4. TheGuarantor will meetor exceedthecriteriafi'ornFinancialTestII.A.2 fi'om 10CFR Part30,AppendixA andagreesto notify OE,TE andtheNRCof anychanges in its ability to meettheAppendixA criteriain compliance with thenotificationrequirements asspecified in 10 CFRPart30. Specifically, theGuatantor will possess:

(aXl A cun'entratingof its mostrecentuninsued,uncollateralized, andunencumbercd bondissuance of BBB- or higherasissuedby Standard andPoor's,or Baa3or higherasmtedby Moody's;and (ii) Tangiblenetworthis at least$21million andtotalnetworthof at leastsix times theamountof decommissioning fundsbeingassured by thisguarantee; and (iii) Assetslocatedin theUnitedStatesamounfingto at least90percentof its total assetsor at leastsix timesthecun'entdecommissioning costor Guarantyarnoutrt.

5. TheGuarantor owns100%ofthe votingstockof OE andTE. OE andTE arelocatedat 76 SouthMain Street,Alcon, Ohio44308.OE hasa 12.5804intercstin thePenyISFSI,and a 10.83%interestin theBVPSISFSI,by virtueof its 21.66%ointerest in BVPS,Unit 2. TE hasa 9.13%interestin theBVPSISFSI,by virtue of its 18.260lo interest in BVPS,Unit 2,
6. Theterm"decomnfssioning activities"asusedhereinrefersto theactivitiesrequiredby 10CFRPafi72 for decommissioning ofthe facilitiesidentifiedabove.

n TheOhioEdisonCompanyMasterDecommissioning TrustAgreement datedJuly l, 1993,as amended, nraintainedby OE andtheFirstArnerrded andRestated Decomrnissioning Trust Agreement datedasof Decernber 20,1996,asamended, rnaintained by TE wereestablished for to maintainfunds decomrnissioning. These hust agreements establish the OEPeuy Nonqualifred Fund,theOE BVPS2 NonqualifiedFund,and TE BVPS 2 Nonqualified Fund, whichwill serveasthe"standbytlusts"conternplated by theNRC'sregulations for payment of fundsunderthis Guatanty.

8. For valuereceivedfi'onrOE andfi'omTE pursuantto theautholityconfeneduponthe Guarantor, the Guarantor guarantees thatif OE or TE failsto performtherequirred decommissioning activitiesdueto lackof funds,theGuarantor shall:

G) provideall fundsnecessary, up to theamountof thisGuatantyto canyoutthe requiredactivities;or (b) pay intotheexistingtrustfundreferenced in Paragraph 7 theamountof this buarantyfor theseictivities. TheGuarantor will inshuctthetrusteeto rnaintain Page2

thefundsfor eachISFSIin a separate subaccount fiom fundsfor general decommissioning activities.

9. TheGuarantor agreesto submitrevisedfinancialstatements, financialtestdata,anda special auditor'sreportandreconcilingschedule to theNRC annually within 90 daysof thecloseof theparentGuarantor's fiscalyear.
10. The Guarantor,OE andTE agreethatif the Guarantorfails to meetthe financialtestcdteria atanytimeafterthisGuarant!is established, theGuarantot,OE, andTE shallsend,within 90 daysof theendof thefiscalyearin whichthe Guarantor fails meetthefinancialtest to criteda,writtennoticeto theNitC usingNRC'selectronicinformationexchange.Such writtennoticealsoshouldbe madeby OE andTE within90 daysof anymalterlcomingto theauditor'sattentionwhichcausetheauditorto believethatthedataspecifiedinthe financialtestshouldbeadjustedandthattheGuarantor nolongerpasses thetesl If OE or TE failsto providealternativefinancialassurance asspecifiedin 10CFRPart7Z,as applicable, whichrnustbesubmittedto NRCwithin 120daysof theendof suchfiscalyearor upott.ut ingnoticethattheGuarantor no longerpasses the!est,andobtainwrittenapproval of suchassurance from theNRCwithin 60daysof thesubmittal,theGuatantorshallprovide suchalternative financialassumnce in thenameof OE and/orTE, of makefull payment undertheGuarantyto theexistingstandbytrust(s)established by OE and/orTE.
11. Independent of anynotificationutrderparagraph 8 above,if theNRC determines for any lpasonthattheGuarantor no longermeetsthefinancialtest criteria or that it is disallowed from continuing as a Guamntor ior thefacilitiestheGuarantor agreesthatwi$n 90 days afterbeingnotilfiedby theNRC of suchdetefmination, analternative financialassurance rnechanisilasspecifiedin 10CFRPart72asapplicable, sh1!l be established by the Guamntorirr thenarneof OE andlorTE unlessOE and/orTE hasdone so' t2. TheGuarantor aswell asits successors andassignsshallremainboundjointly andseverally urderthisGuarantynotwithstanding anyor a[ Jfthe following: amendment or modification of licenseor NRCjapproved decomirissioning funding plan for that facility, the extensionor reductionof thetime'ofperfolmance of requiledactivities,or anyothermodificationor alterationof anobligationof oE or of TE purcuantto 10cFR Pal/t7Z.
13. TheGuarantor agrees thatit will be liablefor all litigationcostsincurredby OE,TE, or the NRC in any.ot.t*tful effortto enfolcetheagreement againsttheGuarantor'
14. TheGuarantor agreesto remainboundunderthis Guarantyandfinancialtestpfovisionsfor hasterminated thelicenses, accepted in tlrepreviouslyliJtedfacilitiesuntil theCommission rvritingtheparentcompany'salternate financialassurances, or accepted in writing the licensJe's frnancialurrurun except that this Guaranty may beamended by theagreement of Guarantor, ",

OE andTE with 30dayspriorwritten notice to the NRC, and exceptthatthe Guarantor maycancelthis Guarantyiasencling writtennoticeto the NRC using NRC's electr.onicinformationexchange, suchcancellaiion to becomeeffectiveno earlierthan 120daysafterreceiptof suchiroticeby NRC,as evidenced by theretutnreceipts.- Guafantor shallaisonotify oE andTE. If OE and/or.TEfailsto providealtemative financial assurance asspecifiedin i OCfR Part72,asapplicable, andobtainwrittenapprovalof such assufance Page3

within 120daysafterthe sendingof theabovenoticeby the Guarantoq the Guarantor shall providesuchaltelnativefinancialassurance, or makefull paymentundertheGuarantyto the existingstandbytrustestablished by OE and/orTE.

15. TheGuarantor expresslywaivesnoticeof acceptance of this Guarantyby theNRC or by OE or by TE. The Guarantor alsoexpressly waivesnoticeof amendments ot modificationof the decommissioning requircments andof amendments or modifications of thelicenses.
16. TheGuarantor files financialreportswith theU.S.Securities andExchange Commission (SEC),whichareavailableto NRC andneednot besubmittedseparately in accordancewith l0 cFR72.80(b).
17. The Guarantoragreesthat if the Guarantoradmitsin writing its inability to payits debts generally,or makesa generalassignrnent for thebenefitof creditors,or anyproceeding is institutedby or againsttheGuarantor seekingto adjudicafe it asbankluptor insolvent,or seekingdissolution, liquidation,winding-up,reorganization, alrangement, adjustment, protection, r'eliefor composition of it or its debtsunderanylaw relatingto banla'uptcy, insolvency, or reorganizationor reliefof debtors,or seekingtheentryof anorderfor reliefot theappointment of a receiver,trustee,custodian, or othersirnilarofficialfor theGuarantor or for anysubstantial partof its prope*y,or theGuarantor takesanyactionto authorizeor effectanyof theactionsstatedinthe paragraph, theCommission may:

(a) declarethatthe financialassurance guaranteed by thethis Guarantyis irmnediately dueandpayableto theexistingtrustreferenced in Paragraph 7, withoutdiligence, plsentment, demand, protest,or anyothernoticeof anykind,all of whichare expressly waivedby Guarantor; or (b) exercise anyandall of its otherrightsunderapplicable law.

18. TheGuarantolagreesto notify theNRC,in writing,immediately followingthefiling of a voluntaryor involuntary petition for bankruptcy under any chapter of title 1l (Bankruptcy) of theUnitedStatesCode,or theoccuilnce of anyothereventIisted in Paragraph lT, by or against:

(a) the Guarantor; (b)oE; (c) TE; (d) anentity(asthattermisdefinedin II U.S.C.101(15)controllingOBorTEorlisting the licenses, OE or TE aspropertyof theestate;or (e) anaffiliate(asthattetmis definedin 11U.S'C.101(2)of OEor TE.

Page4

19. Thenotificationrequiredby Paragraph 18mustincludethefollowing:

(a) a description of theevent,includingmajorcreditols,theamountsinvolved,andthe actionsiakento assurethattheamountof fundsgttaranteed by this Guarantyfor decommissioning will beh.ansfen'ed to theexistingtrustreferenced in Paragraph 7 as soonaspossible; (b) if a petitionof bankruptcy wasfiled,theictentityof thebankruptcycour1in whichthe petitiorrfot bankruptcy wasfiled; and (c) thedateof filing of anypetitions.

20. This Guarantyandtherightsandobligationsof the OE,Tg andthe Guatantorhereuncler, shallbe goveinedby andconstrued iriaccordance with thedomesticlawsof theStateof Ohio withoutlining effectto anychoiceor conflict-of-lawprovisionor rule (whether-of theState of Ohioot u"Votherjurisdiction)thatwouldcausetheapplicationof thelaws of any jurisdictionoiherthantheStateof Onio. TheGuarantot, OE,andTE eachconsent to the Lxclusivejurisdictionandvenueof anystateor federal court within the State of Ohio for adjudicatibn of anysuit,claim,actionor otherproceedlng at law or in equity relating to this Guaranty,or to anytransactioncontemplated hereby.TheGuarantot,OE, andTE each accept,fenerallyandunconditionally, ihe exclusive jurisdictionandvenueof theaforesaid The

.ouri5ui l waivl anyobjectionastovenue,andanydefenseofforum nonconveniens' Guarantor herebyirrevocablyconsents to theserviceof proeess out of anyof the .

aforementioned courlsin anysuchactionor proceeding by the mailing of copiesthereofby registerccl or certifiedmail,postage prepaid,iotheGuarantor at its address setforthopposite its signature below,suchseiviceio becomeeffective30 daysaftersuchmailing.Nothing by hereinshallaffecttheright of oE or TE to servepfocessin anyothermannerpermitted law or to comrnence legil pr.oceedingsor otherwise ptoceedagainstthe Guarartor.in any otherjurisdiction.thJGuarantor heieby iuevocably

-of waivesanyobjeotionwhich.itmaynow or hereafter haveto thelayingof venue unyof thi aforesaid actionsor proceedings atising to above and hereby out of or in comrectionwith the Guarantybloughtin thecourtsrefen'ed such fgfiheriuevocablywaivesatrdagrcesnot to pleador claimin a1ysuchcouttthatany actionor pr.oceedilg broughtin a'nysuchcouithasbeenbroughtin aninconvenient forum.

hereunder shallbemadeto theGuatantor's Chief 2t, All noticesaudothercommunications FinanciatOfficerandGeneralCounselat 76 SouthMain Street,Akron,Ohio44308'

22. If it is everdetermined thattheAmendedandRestated ParentalGualantydatedJune11, or any 2013issuedby FirstgnergyCorytheamountof $11million f'$11 Million Guaranty"),

prior Guarantyfor lSFslieconrmissioning, remainsenfofceable andnot properlycancelled, ievokedandrbscindedwith no furtherforceandeffect,thanthe amount of this Guamnty specifiecl in paragraph 3 hereoftogetherwith theamountprovidedin the$19million by FirstEnergy SolutionsCorp.shallberecluced by the dqarantybeingptouia.Oseparateiy in effect. For avoidance of doubt, amountspecifieain suchprior GuarantywhichrJmains of theobligationsof FirstEnergy Corp' Noticeis herebygiventoihe NRC of thecancellation underthe$11Milliol GuarantyandanypriorParentalGuarantyfot ISFSIdecommissioning, alcl thisGuarantyis providedasthealternative assurance requiredby Section14of tlre Page5

$11Milliol Guamntyfor theISFSIdecommissioning obligationsof OEandTE andonly OE andTE.

23. ThisGuarantyshallrcplacetheexisting$11Million Guarantyissuedby FirstEnergy Corp.,

with respectiotheobligationsof OE with respectto thePerryISFSI. In addition,it guaranteestheISFSIdecommissioning of OE andTE with respectto theBVPS obligations iSfSl The$11Million Guar.anty tookeffecton July 18,2013,30daysaftettheJune18, 2013noticesubmittedto NRC,andit cancelled theprior GuarantydatedDecember17,2012.

This Guarantyshallbeeffective30 daysafterrcceiptby theNRC of writtennoticeof this Guaranty,uni6r a wr:ittennoticeof objectionby NRC is receivedwithin such30 days.

IREMATNDER OF PAGEINTENTIONALLYLBFT BLANK]

Page6

The undersignedhascausedthis Guarantyto be executedand deliveredas of the day and year first aboveu,ritten.

FirstBnergyCorp.

BY ,{,n- n L

,4lL__"-\{, 4}.t7*,J, StevenR. Staub Vice President& Treasurei Acknowledged asof June30,2014 Ohio EdisorrCompan RhondaS. Ferguson The Toledo Edison Company S, Fetguson Vice President &

PageT

CERTIFICATION I herebycefiify thatthis Guarantyis trueandcorect to thebestof my knowledge.

Effectivedate:June30,2014 FirstEnergyCorp.

'l

/\ f tr']

nv *&{;- {1 .#forJ" StevenR. Staub Vice President & Treasurer STATEOF OHIO COUNTYOF SUMMIT Subscribedand sworn to me, a Notary Public, in and for the County and Stateabove narned,this$ilt" dayof June,2014.

Ohio Edison Comp-any RhondaS. Ferguson Vice President& CorporateSecretary STATE OF OHIO COUNTY OF SUMMIT subscribed andswornto lne,a NotaryPublic,in andfor thecountyandStateabove named,thisrf#,eday of June,2414.

issionExpircs:Ql4/ aary^

Page 8

The Toledo Edison Company Vice President

& Corporate Secretary STATEOF OHTO COI.JNTYOF SUMMIT and sworn to rne,a Notary Public, in andfor the County and Stateabove Subscr.ibed naned,thisfuftday of June,2014.

Page9

EnclosureD L-14-215

$19MillionParental Guaranty (Eightpagesfollow)

PARENTALGUARANTY GUARANTY,datedasof June30,2}l4,rnadeby FirstEnergy SolutionsCotp.,anOhio corporation (the"Guarantor')to Guarantor's whollyownedsubsidiary, FirstEnergy Nuclear Generation, LLC ("FENGenCo").

WITNES$ETH:

WHEREAS,FENGenCo is a direct,wlrollyownedsubsidiary of theGuarantor andis licensedto possess a 100%undividedownershipinterestin Davis-Besse NuclearPowerStation

(,Davis-Besse'),an87.42%undividedownershipintetestin Peny Nuclear Power_Plant

(,?eny"), a l}io/oundividedownership interestin BeaverValleyPowerS!aji91("BVPS'),

ilnit f , *O u OO.OS% undividedownership interestin BVPS,Unit 2, for whichindependent -

spelt fuel storageinstallations ("ISFSIs")havebeenor ruebeingdeveloped for onsitestomgeof spentnuolearfuel; WFIEREAS, theU.S.NuclearRegulatoryCommission ("NRC') hasprolmulgated regulations in Title 10,ChapterI of theCoA"of p..leralRegulations ("CFItJ.Part 72 which

,ef,uirethata holde,oi o* anapplicantfor, a licenseissuedpusuantto 10CFRPa*72 provide ur*r*"" thatfunds*ilt br availablewhenneededfor requireddecommissioning activities; WHEREAS,theGuarantor rcceivessubstantial benefitsfrom owningits dircct subsidiary, FENGenCo (whichbenefitsareherebyacknowledged), ando*otqlgry' desiresto executeanddeliverthisbuarantyin orderto prwide financialassurance for FENGenCo's obligationsfor thedecommissioning of theDavis-Besse, Peffy and BVPS ISFSIs,asrequiredby 10CFRPafi72;and WHBREAS,this $19million Guaranty, togetherwith a $4 million Guarantybeing providedseparately-by FirstErrergy Corp.,replaces the$l l million Anrended andRestated irarBntalGuarantyissuedby FirstEnergy corp. datedJune11,2413.

NOW,THEREFORE, in consiclerationof theforegoingandolher-benefits accrningto the theGuarantor hereby Guaraltor,thereceiptandsuificiencyof whichareherebyacknowledgecl, makesthefollowinj representations andwalantiesto FENGenCo, andGuamutothercby covenants andagreesasfollows:

1. The Guarantorhasfull author.ityandcapacityto enterinto this Guarantyunderits bylaws, articlesof incorporation, anclthelawso-fthe-State of Ohio,its stateof incotporation' Guarantor hasapprovalfrom its Boaldof Directorsto enterintothis Guaranty.
2. ThisGuarantyis beingissuedsothatFENGenCo will bein compliance with regulations issueclby theNRc, anagencyof theu.S. Governrnent, pursuantto theAtomicEnergyAct of 1954,asanrended, andtileEnergyReorganization Act ot-tgl+' TheNRC haspromulgated regulations in Titil 10,ChapterIlf tn 6ocleof FederalRegulations, Part?2,whichrequire thit a holderof, or anapplicantfor, a licenseissuecl pursuantto 10CFRPatt72plovide assurance thatfundswill be availablewhenneededfor requiteddecomrnissioning activities.
3. This Guaranty is issuedto providefinancialassurance for decommissioning activitiesfor the Davis-Bess" iSFSI,DocketNo. 72-14,thePerryISFSI,DocketNo. 72-69,andtheBVPS ISFSI,DocketNo. 72-1043, asrequired by 10 CFRPart72. Thedecommissioning costsfor theDavis-Besse, PerryanA-gVpSISFSIsareguamnteed in theamountof $19million. This anrountexceeds 100/r of theestimated costof decornmissioning theDavis-Besse ISFSI' 87.42%oftheestirnated costof decommissioning tlrePeruy ISFSI, and 80.04% of the estimated costof decornmissioning theBVPSISFSI.
4. TheGuarantor will meetor exceedthectiteriafiom FinancialTestII.A.2 frnm 10CFR Par30,AppendixA andagrees to notify FENGenCo andtheNRC of anychanges in its abilityto meetthe AppendixA criteriain compliance with the notification requirements as speciired in 10CFRPart30. Specifically,theGuarantor will possess:

(aXi) A currentratingof its mostrecentuninsured, uncollateralized, andunencumbered bondissuance of ggg- or higherasissuedby Standard and Poor's, or Baa3or higherasmtedby MoodY's;and (iD Tangiblerretlvorthis at least$21rnillionandtotalnetworthof at leastsix tinres theamourrtof decornmissioning fundsbeingassurcd by this guarantee; and (iii) Assetslocatedin theUnitedStatesamounting to at least90pereentof its total assets or at leastsix timesthecurrentdecommissioning costor Guarantyamount.

hasa rnajoritycorrtrolof thevotinginterests in FENGenCo.FENGenCo is TheGuarantor locatedat ?6 Southtvtainstieet,Aklon, ohio 44308.FENGenco owns the Davis-Besse facility,hasan 87.4z%interest in thePeffyfacility:d h.ut-l"80.04%interestin theBVPS facifity,by virtueof its 100%interestin BVpS,Unit 1 and60.08%intet'est in BVPS,Unit 2' 6, Theterm,decommissioning activities"asusedhereinrcfersto theactivitiesrequiredby 10 CFRPartT2fordecommissioning of thefacilitiesidentifiedabove, 1

TheNuclearDecommissioning MasterTrustAgreement, enteredintowith MellonBank, N.A. (norv,Bankof New York Mellon,aNew Yolk statebankhavingtrustpowers)on Decenrber 1,2005,wasestablished to maintainfundsfor decommissioning. Thismaster trustagreernent esiablishes theFE Davis-Besse Nonqualifiedfund,theFE Peny Nonqrialifrecl Fund,theFE ByPS I NonqualifiedFund,andtheFE BVPS2 Nonqualified trusts"contemplated by theNRC'sfegtrlations for Flnd, whichwill serveastfie "stanclby paymentof fundsunderthisGuaranty.

8. Forvaluereceivedfiom FENGenCo andpursuantto theauthorityconfelreduponthe Guarantor., theGuarantor guarantees thatif FpNGenCofailsto perfoilntherequired decommissioning activitieidueto lackof funds,theGuarantor shall:

(a) provideall fundsnecessary, up to theamountof this Guarantyto caruyoutthe required activities;or (b) pay intotheexistingtrustfundreferenced in Paragraph 7 theamountof this

^Guaranty for theseactivities.TheGuarantor will instructthettusteeto maintain

the funds for eachISFSI in a separatesubaccountfiom funds for general decornrnissioning activities.

9. The Guarantoragrcesto subrnit levised financial statements,financial test dat4 and a special auditor'sreport ind reconcilingscheduleto the NRC annuallywithin 90 daysof the closeof the parentGuarantor'sfiscal year.
10. Tlre Guatantorand FENGenCoagreethat if the Guarantorfails to nreetthefinancialtest criteria at any time after this Guaiantyis established,the Guamntorand FENGenCoshall send,within 90 daysof the enclof the fiscal year in which the Guarantorfails to meetthe finalcial testcriteria,written noticeto the NRC usingNRC's electt'onicinforrnation exchange.Suchwritten notice also slrouldbe rnadeby FENGenCowithin 90 daysof any rnatterscomingto the auditor,sattentionwhich causethe auclitorto believethat the data specifiedin thJ financial test shouldbe adjustedand that the Guarantorno longerpassesthe test, If FENGenCofails to provide alternativefinancial assuranceas specifiedin 10 CFR par172,asapplicable,whicir mustbe submittedto NRC within 120daysof the end of such fiscal yearoi upon ntukittg notice that the Guarantorno longerpassesthe test,and obtain written upptouul of such u--rr,rrun.rfi'om the NRC within 60 days of the submittal, the Guarant#shall provide suchalternativefinancial assuratrce in the narneof FENGenCo,or make full paymentunderthe Guarantyto the existingstandbyttust(s) establishedby FENGenCo.

ll. Independentof any notification underparagraph8 aboye,if the NRC determinesfor any reasonthat the Guarantorno longermeetsthe financialtest uiteria or that it is disallowed days finm continuingas a Guarantor6r the facilities the Guarantoragleesthat within 90 assurance after beingnotilfiedby theNRC of suchcletennination,an alternativefinancial shau be established by the mechanisiras specifiedin 10 CFR PatT}as applicable Guarantorin the nameof FENGenCounlessFENGenCohasdoneso' t2. The Guarantoras well as its strccessors and assignsshall remainboundjointly and severally modification underthis Guarantynotwithstandingany or all o=fthe following: amendmentor of licenseor NRC-approvecldecomirissioningfunding plan for that facility, the extensionor reductionof the timetf perfor.mance of requirledactivities,or any other modificationot alterationof an obligatiol of FENGenCopursuantto 10 CFR Part72' or 13, The Guarantoragleesthat it will be liable for all litigation costsincun'edby FENGenCo theNRC in any iuccessfuleffort to enforcethe agreementagainstthe Guarantor,

'fhe prnvisions for

14. Guaraptoragreesto remainboundunclelthis Guarantyand financial test in the previouslylisted facilities until the Commissionhasternrinatedthe licenses,accepted in writing the writing the patent.o*puny', alternatefinancial assulances'or accepted agreement licensJe'sfinancial ur*tu*", exceptthat this Guarantymay be amendedby the priot written notice to the NRC, and except that of Guarantorand FENGenCowith i0 dayt to theNRC using NRC's the Guarantormay cancelt6is Guaranty6y sendingwritten notice than electronicinformation exchange,suchcancellationto becomeeffectiveno earlier evidenced by the return receipts. Guarantor 120 daysafter receiptof suchiotice by NRC, as financial assufance as shall aisonotify FEilGenco. If FENGenCofails to pfovide alternative

specifiedin 10 CFR Patt7l,as applicable,and obtainw'itten approvalof suchassurance within 120daysafter the sendingof the abovenotice by the Guamntor,the Guarantorshall provide suchalternativefinancial assurance,or make full payrnentunderthe Gualantyto the existing standbytrust establishedby FENGenCo.

15. The Ggarantorexprcsslywaivesnotice of acceptanceof this Guarantyby theNRC or by FENGenCo. The Guarantoralso expresslywaivesnotice of amendmentsor modification of the decomrnissioning requirementsand of amendmentsor modificationsofthe licenses.
16. The Guarantorfiles financial repofis with the U.S. Securitiesand ExchangeCommission (SEC), which are available to NRC and neednot be subrnittedseparatelyin accotdancewith r0 cFR72.80(b).

t't. The Guarantoragreesthat if theGuarantoradmitsin wtiting its inability to payits debts genemlly,or.*ak"r a genemlassignment for the benefitof creditors,or anyproceeding is institutedby or againsttheGuarantor seekingto adjudicate it asbankluptor insolvent,or seekingdissolution, Iiquidation,winding-up,reorganization, armngement, adjustment, ion,reliefor composition plotectlon, of it or its debtsunderanylaw relatingto bankuptcy' insolvency,or leorganizationor relief of debtors,or seekingthe entry of an orderfor relief or the appointmentof a receiver,trustee,custodian,or othersimilar official for the Guarantoror for any substantialpart of its property, or the Guarantortakesany action to authorizeor effect any of the actionsstatedi1the paragraph,tfie Commissionmay:

(a) declarethat the financial assuranceguaranteed by the this Guarantyis immediately due and payableto the existing trust refercncedin Paragraph7, withoutdiligence, presentment,demand,protest,or any other notice of any kind, all of which arc exprtsslywaived bY Guarantor;or (b) exerciseany and all of its other riglrts underapplicablelaw'

18. The Guarantotagrcesto notify the NRC, in writing, immediatelyfollowing the filing of a voluntary or invJluntary petition for bankruptcy uncl"r any chapteroftitle t t (f1$tuptcy) of the United StatesCode,ol the occunnceof any other eventlisted in Paragraph17,by or against:

(a) the Guarantor; (b) FENGenCo; (c) an entity (asthat ter.mis defineclin I I U.S.C. 101(15))controlling FENGenCoor listing the licenses,FENGenCoas prcperty of the estate;or (d) an affiliate(asthat ternris definedin l1 u.s.c. 101(2) of FENGenCo.

19. Thenotificationrcquiredby Paragraph 18nrustincludethefollowing:

(a) a descriptionof theevent,includingmajorcreditors,the amountsinvolved,andthe actionslakento assurethattheamountof fundsguaranteed by thisGuarantyfor decommissioning will betransferred to theexistingtrust referenced in Palagraph 7 as soonaspossible; (b) if a petitionof bankruptcywasfiled,theidentityof thebankruptcy courtin whichthe petitionfor bankruptcy wasfiled;and (c) thedateof filing of anypetitions.

20. This Guarantyandtherigh* andobligations of theFENGenCo andtheGuarantorhereunder, shallbe governedby andconstruedin accordance with the domestic lawsof the Stateof Ohio withoutginingeffectto anychoiceor conflict-of-lawprovisionor rule(whetherof theState of Ohioo. unyotherjurisdiction) thatwouldcausethe applicationof thelawsof any jurisdiotionoiherthantlre Stateof Ohio, TheGuarantor andFENGenCo eachconsentto the Lxclusivejurisdictionandvenueof anystateor federalcourtwithin the Stateof Ohiofor ailjudicatibn of anysuit,claim,actionor otherproceeding at law or in equityrrlatingto this Giraranty,or to anytransactioncontemplated hereby. The GuarantorandFENGenCoeach accept,generallyandunconditionally, theexclusive jurisdictionandvenueof theaforesaid

.ourir undwaivl anyobjectiorrastovenue,andanydefense offonun nonconuenlens. The Guarantor herebyiuevocablyconsents to theservice of process out of any of the aforementioned courtsin anysuchactionor proceeding by themailingof copiesthereofby registered or certifiedmail,postage prepaid,iotheGuarantotat its address setforthopposite itJsignaturebelow,suchselice to becomeeffective 30 days after such rnailing' Nothing heleinshallaffecttheright of FENGenCo to servepfocessin anyother manner permitted by law or to commence legalproceedings or otherwise proceedagainsttheGuarantor.in any otherjurisdiction.TheGuarantor harby-ofinevocably waives.any objection whiclt it may now or hereafter haveto thelayingof venue unyof theaforesaid actionsor ploceedings atising outof or in connection with the Guaranty brought in the courts refemed to aboveandhereby furtherir.revocably waivesandagrcesnotto plead or claim in any such court thatanysuch actionor proceeding broughtin anysuchcourthasbeenbrouglrtin an inconvenient forum.

2r. All noticesandothercornmunications hereunder shallbernadeto theGuamntor's Chief FinancialOfficerandGeneralCounselat 341WhitePondDlive, Akron, Ohio 44320.

22. If it is everdetermined thattheAmendedandRestated ParentalGuarantydatedJunel l, 2013issuedby FirstEnergy Corpin thearnountof $t I million (.'$11Milli91 GualantY'),or anypriorPar.ental Guarantyfor tSfSt decommissioning remainsenforceable andnot pr;pel.lycancelled, revokedandrescinded with no furtherforceandeffect,thantheamount of titir Guaranty specifiedin Paragraph 3 hereofandtheamountof the$4 million Amended antlRestated ParentalGuarantyUeingprovidedseparately by FirstEnergyCory'shallbe rrduceclby theamountspecifiidin suctrpriorParentalGuarantywhichremainsin effect' For avoidance of cloubt,Noticeis herebygivento theNRC of thecancellation of the obligationsof FirstEnei'gy Corp,underitrc St I Million Guaranty and any prior Parental Guaiantyfor ISFSIdecomrnisiioning, andthis Guarantyis providedasthealternative

assurancerequiredby Section14of the$l l Million Guaranty for theISFSI decommissioning obligationsof FENGenCo andonly FENGenCo.

23, This Guarantyshallreplacetheexisting$11Million Guarantyissuedby FirstEnergyCorp.,

with respectio theobligationsof FENGenCo with respectto Davis'Besse ISFSIandthe PerryISFSI. In addition,it guaranteesthe ISFSI decommissioning obligations-of FElriGenCowith respectto theBVPSISFSI. The$l I Million Guarantytookeffecton July 18,2013,30daysaftertheJune18,2013noticesubmitted to NRC,andit cancelled the prior CuarantydatedDecember 17,2012,This Guaranty shall be 30 effective days after ieceiptby thaNRCof writtennoticeof this Guaranty, whena $4 million Amendedand RestatedParentalGuarantyfiorn FirstEnergy Corp.shalltakeeffectwith respectto the obligatiolsof OhioEclisonCompanyandttre ToledoEdisonComparry assetforththerein, unlessa writtennoticsof objectionby NRC is receivedwithinsuch 30 days'

[REMAINDEROF PAGEINTENTTONALLYLEFT BLANK]

The undersignedhas causedthis Guarantyto be executedand deliveredas of the day and year fimt abovewritten.

f irstBnergySolutionsCorP.

By ,{,- {\

l

.<f[r--. t{..{ff^*

StevenR. Staub

& Treasuter Vice President Acknowledged asof June30,2014 FirstEnerryNuclearGgqerati RhondaS. Ferguson Vice President & CorporateSecretary

CERTIFICATION I herebycertifythatthisGuarantyis trueandconectto thebestof rny knowledge, Effectivedate:June30,2014 FirstEnergySolutionsCorp.

,, .tfh--.I Jh**

StevenR. Staub Vice President & Tleasurer STATEOF OHIO COUNTYOF SUMMIT Subscribedand swornto me, a Notary Public, in and for the County and Stateabove narned, this.6'{L'dayof June,2014, F'irstBnergyNuclearGeneration'LLC RhondaS.

Vice President & CorporateSecretary STATEOF OHIO COI.INTYOF SUMMIT Subscribedand swornto me, a Notary Public, in and for the County and Stateabove named,tiis N dayof June,2014.

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