ML051870092

Notice of Consideration of Approval of Application Regarding Proposed Corporate Restructuring and Opportunity for a Hearing

ML051870092
Person / Time
Site:	South Texas
Issue date:	07/18/2005
From:	Jaffe D NRC/NRR/DLPM/LPD4
To:	Sheppard J South Texas
Jaffe D, NRR/DLPM, 415-1439
References
TAC MC7464, TAC MC7465
Download: ML051870092 (10)

Text

July 18, 2005 Mr. James J. Sheppard President and Chief Executive Officer STP Nuclear Operating Company South Texas Project Electric Generating Station P. O. Box 289 Wadsworth, TX 77483

SUBJECT:

SOUTH TEXAS PROJECT, UNITS 1 AND 2 - NOTICE OF CONSIDERATION OF APPROVAL OF APPLICATION REGARDING PROPOSED CORPORATE RESTRUCTURING AND OPPORTUNITY FOR A HEARING (TAC NOS. MC7464 AND MC7465)

Dear Mr. Sheppard:

Enclosed is a copy of a Notice of Consideration of Approval of Application Regarding Proposed Reorganization and Opportunity for a Hearing related to the application dated June 28, 2005, from STP Nuclear Operating Company. This application, filed pursuant to Section 50.80 of Title 10 of the Code of Federal Regulations, seeks Nuclear Regulatory Commission approval of the indirect transfer of control of Facility Operating License Nos. NPF-76 and NPF-80 for South Texas Project, Units 1 and 2, respectively, to the extent held by Texas Genco, LP.

This notice is being forwarded to the Office of the Federal Register for publication.

Sincerely,

/RA/

David H. Jaffe, Senior Project Manager, Section 1 Project Directorate IV Division of Licensing Project Management Office of Nuclear Reactor Regulation Docket Nos. 50-498 and 50-499

Enclosure:

As stated cc w/encl: See next page

Mr. James J. Sheppard July 18, 2005 President and Chief Executive Officer STP Nuclear Operating Company South Texas Project Electric Generating Station P. O. Box 289 Wadsworth, TX 77483

SUBJECT:

SOUTH TEXAS PROJECT, UNITS 1 AND 2 - NOTICE OF CONSIDERATION OF APPROVAL OF APPLICATION REGARDING PROPOSED CORPORATE RESTRUCTURING AND OPPORTUNITY FOR A HEARING (TAC NOS. MC7464 AND MC7465)

Dear Mr. Sheppard:

Enclosed is a copy of a Notice of Consideration of Approval of Application Regarding Proposed Reorganization and Opportunity for a Hearing related to the application dated June 28, 2005, from STP Nuclear Operating Company. This application, filed pursuant to Section 50.80 of Title 10 of the Code of Federal Regulations, seeks Nuclear Regulatory Commission approval of the indirect transfer of control of Facility Operating License Nos. NPF-76 and NPF-80 for South Texas Project, Units 1 and 2, respectively, to the extent held by Texas Genco, LP.

This notice is being forwarded to the Office of the Federal Register for publication.

Sincerely,

/RA/

David H. Jaffe, Senior Project Manager, Section 1 Project Directorate IV Division of Licensing Project Management Office of Nuclear Reactor Regulation Docket Nos. 50-498 and 50-499

Enclosure:

As stated cc w/encl: See next page DISTRIBUTION: BThomas PUBLIC RidsNrrDripRprp (CHaney)

PDIV-1 Reading RidsOgcRp RidsNrrDlpmLpdiv (HBerkow) RidsAcrsAcnwMailCenter RidsNrrDlpmLpdiv1 (DTerao) RidsRgn4MailCenter (AHowell)

RidsNrrPMDJaffe RidsNrrLADBaxley RidsNrrDlpmDpr ACCESSION NO.: ML051870092 OFFICE PDIV-1/PM PDIV-1/LA OGC PDIV-1/SC NAME DJaffe DBaxley SUttal DTerao DATE 7/18/05 7/18/05 7/18/05 7/18/05 OFFICIAL RECORD COPY

South Texas Project, Units 1 & 2 cc:

Senior Resident Inspector E. D. Halpin U.S. Nuclear Regulatory Commission Vice President Oversight P. O. Box 910 STP Nuclear Operating Company Bay City, TX 77414 P. O. Box 289 Wadsworth, TX 77483 C. Kirksey/C. M. Canady City of Austin S. M. Head, Manager, Licensing Electric Utility Department STP Nuclear Operating Company 721 Barton Springs Road P. O. Box 289, Mail Code: N5014 Austin, TX 78704 Wadsworth, TX 77483 Mr. J. J. Nesrsta Environmental and Natural Resources Mr. R. K. Temple Policy Director City Public Service Board P. O. Box 12428 P. O. Box 1771 Austin, TX 78711-3189 San Antonio, TX 78296 Jon C. Wood INPO Cox Smith Matthews Records Center 112 East Pecan, Suite 1800 700 Galleria Parkway San Antonio, TX 78205 Atlanta, GA 30339-3064 Director Regional Administrator, Region IV Division of Compliance & Inspection U.S. Nuclear Regulatory Commission Bureau of Radiation Control 611 Ryan Plaza Drive, Suite 400 Texas Department of State Health Services Arlington, TX 76011 1100 West 49th Street Austin, TX 78756 Jack A. Fusco/Michael A. Reed Texas Genco, LP Brian Almon 12301 Kurland Drive Public Utility Commission Houston, TX 77034 William B. Travis Building P. O. Box 13326 Judge, Matagorda County 1701 North Congress Avenue Matagorda County Courthouse Austin, TX 78701-3326 1700 Seventh Street Bay City, TX 77414 Susan M. Jablonski Office of Permitting, Remediation A. H. Gutterman, Esq. and Registration Morgan, Lewis & Bockius Texas Commission on 1111 Pennsylvania Avenue, NW Environmental Quality Washington, DC 20004 MC-122 P.O. Box 13087 Austin, TX 78711-3087 June 2005

South Texas Project, Units 1 & 2 Mr. Terry Parks, Chief Inspector Texas Department of Licensing and Regulation Boiler Division P. O. Box 12157 Austin, TX 78711 Mr. Ted Enos 4200 South Hulen Suite 630 Ft. Worth, Texas 76109

7590-01-P UNITED STATES NUCLEAR REGULATORY COMMISSION STP NUCLEAR OPERATING COMPANY, ET AL.

SOUTH TEXAS PROJECT, UNITS 1 AND 2 DOCKET NOS. 50-498 AND 50-499 NOTICE OF CONSIDERATION OF APPROVAL OF APPLICATION REGARDING PROPOSED CORPORATE RESTRUCTURING AND OPPORTUNITY FOR A HEARING The U.S. Nuclear Regulatory Commission (NRC or the Commission) is considering issuance of an order under Section 50.80 of Title 10 of the Code of Federal Regulations (10 CFR) approving the indirect transfer of Facility Operating License Nos. NPF-76 and NPF-80 for South Texas Project (STP), Units 1 and 2, respectively, to the extent held by Texas Genco, LP (Texas Genco).

The June 28, 2005, application requests the consent of the NRC to the proposed indirect transfer of control of the STP, Units 1 and 2, licenses to the extent held by Texas Genco. Texas Genco is a 44 percent owner and non-operating licensee of STP, Units 1 and 2.

According to the application, filed by STP Nuclear Operating Company (STPNOC) on behalf of Texas Genco, Texas Genco is indirectly owned by Texas Genco Holdings, Inc., which in turn is wholly owned by Texas Genco LLC. Texas Genco LLC is owned by investment funds affiliated with The Blackstone Group, Hellman & Friedman LLC, Kohlberg Kravis Roberts & Co. L.P., and Texas Pacific Group (the Investment Funds) and certain members of the management team (Management owners).

As stated in the application, the ultimate owners of Texas Genco are proposing a corporate restructuring such that several new entities would be interposed between (i) the Investment Funds and Management owners and (ii) Texas Genco LLC. This proposed restructuring is in anticipation of a proposed initial public offering of a minority interest in Texas Genco Inc. Texas Genco Inc. was incorporated on May 20, 2005, as a wholly-owned subsidiary of another new entity, Texas Genco Sponsor LLC. Immediately prior to the initial public offering, Texas Genco Sponsor LLC and Texas Genco Inc. will form a new limited liability company, Texas Genco Holdings LLC.

Following certain transactions described in the application, and following the initial public offering, Texas Genco Inc. will become the sole managing member of Texas Genco Holdings LLC, and Texas Genco Holdings LLC will become the sole owner of Texas Genco LLC and the indirect owner of licensee Texas Genco, which shall at all times continue to be a licensed owner of STP. According to the application, the Investment Funds and Management owners would control Texas Genco Inc. through their ownership of a majority of the voting power in Texas Genco Inc., and continue to ultimately control Texas Genco.

Pursuant to 10 CFR 50.80, no license, or any right thereunder, shall be transferred, directly or indirectly, through transfer of control of the license, unless the Commission shall give its consent in writing. The Commission will approve an application for the transfer of a license, if the Commission determines that the proposed transferee is qualified to hold the license, and that the transfer is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto.

The filing of requests for hearing and petitions for leave to intervene, and written comments with regard to the license transfer application, are discussed below.

Within 20 days from the date of publication of this notice, any person whose interest may be affected by the Commissions action on the application may request a hearing and, if

not the applicant, may petition for leave to intervene in a hearing proceeding on the Commissions action. Requests for a hearing and petitions for leave to intervene should be filed in accordance with the Commissions rules of practice set forth in Subpart C, Rules of General Applicability: Hearing Requests, Petitions to Intervene, Availability of Documents, Selection of Specific Hearing Procedures, Presiding Officer Powers, and General Hearing Management for NRC Adjudicatory Hearings, of 10 CFR Part 2. In particular, such requests and petitions must comply with the requirements set forth in 10 CFR 2.309. Untimely requests and petitions may be denied, as provided in 10 CFR 2.309(c)(1), unless good cause for failure to file on time is established. In addition, an untimely request or petition should address the factors that the Commission will also consider, in reviewing untimely requests or petitions, set forth in 10 CFR 2.309(c)(1)(i)-(viii).

Requests for a hearing and petitions for leave to intervene should be served upon Mr. John E. Matthews, Morgan, Lewis, & Bockius, LLP, 1111 Pennsylvania Avenue, NW, Washington, DC 20004, attorney for STPNOC; Nicholas S. Reynolds, Winston & Strawn LLP, 1700 K Street, NW, Washington, DC 20006-3817, attorney for Texas Genco; the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001 (e-mail address for filings regarding license transfer cases only: OGCLT@NRC.gov); and the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention:

Rulemakings and Adjudications Staff, in accordance with 10 CFR 2.302 and 2.305.

The Commission will issue a notice or order granting or denying a hearing request or intervention petition, designating the issues for any hearing that will be held and designating the Presiding Officer. A notice granting a hearing will be published in the Federal Register and served on the parties to the hearing.

As an alternative to requests for hearing and petitions to intervene, within 30 days from the date of publication of this notice, persons may submit written comments regarding the

license transfer application, as provided in 10 CFR 2.1305. The Commission will consider and, if appropriate, respond to these comments, but such comments will not otherwise constitute part of the decisional record. Comments should be submitted to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff, and should cite the publication date and page number of this Federal Register notice.

For further details with respect to this action, see the application dated June 28, 2005, available for public inspection at the Commission's Public Document Room (PDR), located at One White Flint North, Public File Area O1 F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible electronically from the Agencywide Documents Access and Management System's (ADAMS) Public Electronic Reading Room on the Internet at the NRC web site, http://www.nrc.gov/reading-rm/adams.html. Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS, should contact the NRC PDR Reference staff by telephone at 1-800-397-4209, 301-415-4737 or by e-mail to pdr@nrc.gov.

Dated at Rockville, Maryland this 18th day of July, 2005 FOR THE NUCLEAR REGULATORY COMMISSION

/RA/

David H. Jaffe, Senior Project Manager, Section 1 Project Directorate IV Division of Licensing Project Management Office of Nuclear Reactor Regulation