ML051230365

Support Agreement for Texas Genco, LP

ML051230365
Person / Time
Site:	South Texas
Issue date:	04/26/2005
From:	Head S South Texas
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
NOC-AE-05001875, TAC MC4732, TAC MC4733
Download: ML051230365 (6)

Text

Nuclear Operating Company South Teaxs Pr/d

-cEkzk-nerst/n8StIotl P.O Bo289 Ktdrf es 77483 VW April 26,2005 NOC-AE-05001875 U. S. Nuclear Regulatory Commission Attention: Document Control Desk One White Flint North 11555 Rockville Pike Rockville, MD 20852 South Texas Project Units I and 2 Docket Nos. STN 50498, STN 50-499 Support Agreement for Texas Genco. LP (TAC Nos. MC4732 and MC4733)

Reference:

Letter, D. H. Jaffe to J. J. Sheppard, "South Texas Project, Units 1 and 2 - Order Approving Application Regarding Proposed Acquisition (TAC Nos. MC4732 and MC4733)," dated April 4, 2005 The referenced letter contains a condition to the Order stating, "An executed copy of the Support Agreement shall be submitted to the NRC no later than 30 days after completion of the indirect license transfers." The required copy of the Support Agreement is attached to this letter. The other two Order conditions regarding changes to the Support Agreement and drawing upon the committed funds have been captured in Section 11 of the Support Agreement.

There are no commitments in this letter.

If there are any questions regarding this submittal, please contact John Conly at (361) 972-7336 or me at (361) 972-7136.

Scott M. Head Manager, Licensing jtc

Attachment:

Support Agreement

-Aoo l STI: 31876035

NOC-AE-05001875 Page 2 of 2 cc:

(paper copy)

(electronic copy)

Bruce S. Mallett Regional Administrator, Region IV U. S. Nuclear Regulatory Commission 611 Ryan Plaza Drive, Suite 400 Arlington, Texas 76011-8064 C. M. Canady City of Austin Electric Utility Department 721 Barton Springs Road Austin, TX 78704 Richard A. Ratliff Bureau of Radiation Control Texas Department of State Health Services 1100 West 49th Street Austin, TX 78756-3189 Jeffrey Cruz U. S. Nuclear Regulatory Commission P. O. Box 289, Mail Code: MNI16 Wadsworth, TX 77483 A. H. Gutterman, Esquire Morgan, Lewis & Bockius LLP David H. Jaffe U. S. Nuclear Regulatory Commission Jack A. Fusco Michael A. Reed Texas Genco, LP C. A. Johnson AEP Texas Central Company C. Kirksey City of Austin Jon C. Wood Cox Smith Matthews J. J. Nesrsta R. K. Temple E. Alarcon City Public Service

SUPPORT AGREEMENT THIS SUPPORT AGREEMENT (as amended, supplemented or otherwise modified from time to time, this "Agreement"), dated as of April 13, 2005, between Texas Genco LLC, a Delaware limited liability company (the "Parent"), and Texas Genco, LP, a Texas limited partnership (the "Subsidiary").

WITNESSETH:

WHEREAS, the Parent is the indirect owner of 100% of the limited partnership and general partnership interests of the Subsidiary; WHEREAS, the Subsidiary is the owner of an undivided interest in the South Texas Project Nuclear Generating Station ("STP") and is party to that certain Amended and Restated South Texas Project Participation Agreement, effective as of November 17, 1997 (as amended, supplemented or otherwise modified from time to time, the "STP Participation Agreement"), and that certain South Texas Project Operating Agreement, dated and effective as of November 17, 1997 (as amended, supplemented or otherwise modified from time to time, the "STP Operating Agreement");

WHEREAS, pursuant to the Section 3.1 of the STP Operating Agreement, the Subsidiary has agreed to pay to STP Nuclear Operating Company, a Texas non-profit corporation and the operator of STP ("STPNOC"), its Participant's Share of the Costs of Operations (as such terms are defined in the STP Operating Agreement); and WHEREAS, the Parent and the Subsidiary desire to take certain actions to enhance and maintain the financial condition of the Subsidiary as hereinafter set forth in order to ensure its ability to pay to STPNOC its Participant's Share of the Costs of Operations; NOW THEREFORE, in consideration of the mutual promises herein contained, the parties hereto agree as follows:

1.

Support Payments. At all times while this Agreement is in effect and subject to the limitations set forth in paragraphs 3, 4 and 5, the Parent agrees that it will make, or cause one of its subsidiaries or affiliates to make, to the extent necessary, a Support Payment (as defined in paragraph 2) to the Subsidiary in order to ensure that the Subsidiary has sufficient liquidity in order to pay to STPNOC its Participant's Share of the Costs of Operations. Any Support Payments required by this Agreement shall be made not later than the end of the next fiscal quarter.

2.

Commitment to Provide Capital. If during the term of this Agreement, the Parent is required to make a Support Payment to the Subsidiary, such payment may be provided by the Parent, or any subsidiary or affiliate of the Parent, at the Parent's option, either as an equity investment or capital contribution or as a loan, in each case in cash or other liquid assets (any of the foregoing, a "Support Payment"). If such payment is advanced to the Subsidiary as a loan, Support Agreement

2 the loan shall be on such terms and conditions, including maturity and rate of interest, as the Parent and the Subsidiary shall agree.

3.

Limitation of the Parent's Support Obligations. Each of the Parent and the Subsidiary agree that the Parent shall not be required to make, or cause its subsidiaries or affiliates to make, Support Payments to the Subsidiary in excess of $120,000,000 in the aggregate during the term of this Agreement.

4.

Not a Guarant. This Agreement, its provisions and any actions pursuant hereto by the Parent shall not constitute or be deemed to constitute a direct or indirect guaranty by the Parent of any indebtedness for borrowed money or other obligation or liability of any kind or character whatsoever of the Subsidiary, including, without limitation, any obligation of the Subsidiary to make any payment or to perform any obligation required of it under the STP Participation Agreement or the STP Operating Agreement.

5.

STP Participation Agreement and STP Operating Agreement. The Subsidiary shall not be permitted to amend, supplement or otherwise modify either the STP Participation Agreement or the STP Operating Agreement without the prior written consent of the Parent. In the event that the Subsidiary violates this paragraph 5, the Parent's obligations to provide Support Payments hereunder shall be suspended.

6.

RiAhts of Participants and Creditors. The obligations of the Parent pursuant to this Agreement are to the Subsidiary only and do not run to and are not enforceable directly by STPNOC, any other Participant (as defined in the STP Participation Agreement) or any creditor of the Subsidiary or other entity or person, nor shall this Agreement cause the Parent.to be responsible for payment of any obligation of the Subsidiary to STPNOC, any Participant or any creditor or other entity or person or give rise to any recourse by STPNOC, any Participant, creditor or other entity or person to or against the Parent or any of its assets or properties.

7.

Waivers. Any failure by any party hereto, at any time or times hereafter, to require strict performance by the other party of any provision of this Agreement shall not waive, affect or diminish any right of any party thereafter to demand strict compliance and performance therewith. None of the agreements contained in this Agreement shall be deemed to have been suspended or waived by any party hereto unless such suspension or waiver is in writing.

8.

Amendments and Termination. This Agreement may be amended, modified or terminated at any time by the parties hereto only by a written instrument signed by both the Parent and the Subsidiary. This Agreement shall terminate upon the termination of the STP Operating Agrcement.

9.

Successors. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns, provided that the Subsidiary may not assign, transfer or pledge its rights hereunder without the prior written consent of the Parent. This Agreement is not intended for the benefit of any entity or person other than the parties hereto, and shall not confer or be deemed to confer upon any other such entity or person any benefits, rights or remedies hereunder.

Support Agreement

3

10.

Governing Law: Severability. This Agreement and all rights and obligations hereunder shall be governed by and construed and enforced in accordance with the laws of the State of New York. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement.

11.

Texas Genco. LP. Texas Genco, LP shall take no action to cause Texas Genco LLC, or its successors and assigns, to void, cancel or modify its $120 million contingency commitment to Texas Genco, LP or cause it to fail to perform or impair its performance under the commitment, or remove or interfere with Texas Genco, LP's ability to draw upon the commitment, without the prior written consent of the Director of the Office of Nuclear Reactor Regulation. Also, Texas Genco, LP shall inform the NRC in writing any time that it draws upon the $120 million commitment.

Support Agreement

4 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective officers thereunto duly authorized as of the day and year first above written.

TEXAS GENCO LLC, a Delaware limited liability company

/,

By:

6/g Name: Z William S W le r,Jr.

Title:

Vice Presi-ont a nd Treasurer TEXAS GENCO, LP, a Texas limited partnership By Texas Genco GP, LLC, its gen er and a Texas limite 1 ility co By; Name:

/rWlliam dea S

Jrd

Title:

Vc rsdn n raue Support Agreement