ML061840106
| ML061840106 | |
| Person / Time | |
|---|---|
| Site: | Trojan File:Portland General Electric icon.png |
| Issue date: | 07/14/2004 |
| From: | Beeson K State of OR, Eugene Water & Electric Board |
| To: | Annette Vietti-Cook NRC/SECY |
| Julian E | |
| References | |
| 50-344 | |
| Download: ML061840106 (3) | |
Text
July 1~4,2004 Secretary Annette L. Vietti-Cook U.S. Nuclear Regulatory Commission Washington, D.C. 20555-0001 Attn: RuPemakings and Adjudications Staff Re: Comments of the Eugene Water & Electric Board on Portland General Electric's App!icaticn For Clofisen: To Indixc: Ransfcr Cf Fscility Licci;ses
Dear Ms. Vietti-Cook:
The Eugene Water & Electric Board, a municipally owned utility of the Slate of Oregon
("EWEB"), submits the following preliminary comments to the Nuclear Regulatory Commission
("Commission") with respect to the Application for Consent to Indirect Tnnsfer of Facllity Licenses ("Appl~ation") submitted by Portland General Electric ("PGE) on June 14, 2004.'
The auplication seeks Commission approval of the proposed transfer by PGE of the licenses for
[he Trojan Nuckar Power Plant ("Tro-jan") and the Trojan Independent Spent Fuel Storage Installation ("Trojan ISFSI") (the licenses for Trojan and the Trojan TSFSI are collectively refei-sed to herein as the "Trojan License") to the Oregon Electric Utility Company, LLC
("OEUC"). EWEB takes no position either in favor of. or in opposition to, the proposed transfer.
Rather, these comments address EWEB's concerns, as co-owner and co-licensee of ~ r o ~ j a n , ~
about the ability of PGE or OEUC to meet both expected and unexpected financial obligations f i l t h respect to the Trojan License.
I. PGE'S LICENSE TRANSFER APPLICATION 0-, i '..-O 14>2334. PGE app!ied to transfer :he Tr-cjan License to OEZC. The puqose for the Application is to allow the transfer of the PGE stock. The PGE stock will be sold by its current owner, Enron Corporatim, tc a DEW ciwner. OEUC ("Tcmsaction"). Nearly 80% of the ownership of OUEC will be held, in turn, by entities affiliated with the Texas Pacific Groilp
("TPG Pastners"), Althoi~ghthe TPG Partners will not have direct control over OEUC, they will hn!< ce!?ain " r n ~ s ~ ."ihts" n$ \r;i?h respect to QFV_TC'sManagi~gMPE~P+.
I -.
['he Commissiun has not yet p~~hlislled in the Federal ~ e ~ i s tanye r notic'e of its consider-atioll of the Application EWEB, however. submits these prshmiwry ccmments to ensure comp!ianc.- xith 10 C.F.R. 5 2.1505. EWEB reserves the right t? x h n i t fi~rtherc ~ ~ r n n e nin t s the event that the Corrmission publishes notice in the Federal Register and establishes a different deadline fcr coxmcnts.
- Under the relevant Trojan pmject asreements. PGE is the mzljority owner and lead operating entity of Trojan.
holding a sixty s e \ m and onc halt'pcrcent (67.5%) ownership interest in Trojan. EWkB is a thirti. percent (30%)
owner and cu-licensee.
.1 .
A. Technicai and Oversfght Matters With respect to the technical qualifications of OEUC, PGE points out in the Application that "PGE's current management team will continue to operate the utility on a day-to-day basis: PGE continue to be an NRC licensee of TNF and the Trojan ISFSI and no direct transfer of the TNP possession-only license or the ISFSl license will result from the purchase." Applicationt p.
- 3. PGE also reports that "[tlhere will be no changes to the management or operation of TNP or the Trojan ISFSI as a result of the Transaction." Id. at. 10.
B. Financial Matters With respect to the financial qualifications of OEUC. PGE relies in its Application on the financial analysis this Commission previously performed as well as the resources of the TPG Pariners. First. PGE states that the Transaction will not alter the Commission Staff's conclusion in 1995 that funding for the Trojan Decommissioning Plan met the applicable regulalory requirements. See Application, p. 12. Second, PGE notes that the "Transaction will also not change PGE's status as an 'electllc utility.' as defined in 10 CFH? 5 50.2." Id at 13, Finally. PGE states that the "acquisition of PGE's stock by OEUC is expected to enhance the financial stability of PGE by removing FGE's stock from Enron's bankruptcy estate. In addition, the purchase w ~ l result l in a return to stability through certainty of ownership by strong unified shareholders." Id. at 4.
II. EWEB'S COMMENTS ON APPLICATION PGE has at all times been a competent and adequate rnzjority owner and operator of Trojan and the Trojan ISFSI. To the extent that the Application contains an accurate representation of PGE's status after the Transaction, EWES is confident that from a technical standpoint Trojan and the Trojan ISFSI will continue to be operated in a professional and competent manner.
The Commission, however, would benefit from further analysis and consideration of the financial aspects of the Transaction. The Oregon Public Utility Commission ("OPUC") is nclw cmducting ;in exhaustive examination of the proposed Transaction conditions in OPUC Docltei 140. bki i 1 2 i . k final GPUC decision regarding the Transaction 1s expected before the end of 2004. A number of entities have intervened in the ongoing OPUC proceeding and questioned i~hetherthe proposed acquisition terms will in fact decrease, rather than increase. the fi~ancial streilgth and stability of PGE. The OPUC will undoubtedly develop useful info~mationrep-ding the Transaction that may bear on any final Commission decision or, the License transfer A 1 A . - C T X l C D 1, I;,..,, +L,e n p p l l C - c L L ~ u 1 1 . nLLululilsly, L v v Lu V Z L I L ~ L Llla
,., P,,.,.nn.,- . . . . ,,
~L a ! l j Lulllttlcaalull dLLlalull ull t h Application
~ is premature until such time as the OPUC proceeding is completed.
The fmancial questions raised in the OPUC proceedin,o are compounded by the fact that PGE has sought to reduce its obligation to maintain financial protection for Trcjan and ths T r ~ j a nISFSI from $100 Miliion to $25 Million. On February 28. 2003, PGE sent a letter to this Commission requesting the Commission to reduce "the primary financial protection requirement currently applied to the Tmjan Nuclear Plan1 from $100 million to $25 million." See "Request for Further
Exemption from the Financiai Protection Requirements of i O CFR i40. l i (aj(4j and Keiated Anienclment to Indeninity Aycernent No, B-78," p. I . This reduction in financial protection may place an incseased biu-den on PGE or its successoss to be able to meet future Trojan expenditures either through cash reserves or from their ratepayers. EWEB may have vieu.ed such an application favorably before the announced Transaction telms. EWEB believes, lio\vever, that lov,.ering the available insurance levels deserves further scrutiny by the Commission under the present circumstances.
111. CONCLUSION EWEB requests the Commission to hold in abeyance its review of the PCE Application iuitil such time as the OPUC proceedings in L%/I 1121 are completed. EWEB further requests leave bin the Cumniission to submit information developed in the OPUC proceedings that may be relevant to the Commission's review of the PGE Application.
EWEB believes that further Cxnmission scrutiny of such info~mstionshould be undertaken to best ensure that PGE will have ~ i l efinancial capability to pay its share of all expected and unexpected Trojan costs afip,~the acquisition by OEUC. EWEB stands prepared to provide any information to the Coinmission that will be helpful in such an evaluation, including a full summary of the EWEB capability to meet its share of the Trojan expenses. EWEB does not seek absolute assurances of PGE's financial capabilities following the acquisition. EWEB feels compelled, however, to raise these issues and requests with the Colnmission given the -my important public interest issues involved in all nuclear plant owners standing ready to meet their full share of all costs that may be incurred in the current environment.
Very truly yours, Kenneth D. Beeson Energy Resource Projects Manager Eusene Water & Electric Board C: Steven B. Nichols, General Manager, Trojan