ML062220406

Modification of Agreement for Corporate Restructuring Undertaken by Nrg Energy, Inc

ML062220406
Person / Time
Site:	South Texas
Issue date:	08/18/2006
From:	Thadani M NRC/NRR/DLPM/LPD4
To:	Sheppard J South Texas
Thadani M, NRR/DORL, 415-1476
References
TAC MD1651, TAC MD1652
Download: ML062220406 (5)

Text

August 18, 2006 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 - RE: MODIFICATION OF AGREEMENT FOR CORPORATE RESTRUCTURING UNDERTAKEN BY NRG ENERGY, INC. (TAC NOS. MD1651 AND MD1652)

Dear Mr. Sheppard:

This is in response to the STP Nuclear Operating Companys (STPNOCs) letters dated April 13, 2006, and May 25, 2006. In both letters, STPNOC, the licensee for South Texas Project, Units 1 and 2, described a corporate restructuring that NRG Energy, Inc. (NRG Energy), undertook and completed during April and May 2006. The licensee stated that the new corporate structure will not involve any direct or indirect transfer of control of NRG South Texas LP or its licenses. In addition, STPNOC requested that the U.S. Nuclear Regulatory Commission (NRC) provide written consent to amendments to the existing (April 2005 Agreement) financial support agreement for $120 million, dated April 13, 2005, between NRG Texas LLC and NRG South Texas LP. The proposed amendments would: (1) conform the names in the April 2005 Agreement to fit the new structure; (2) conform the April 2005 Agreement in light of the new intermediary relationships between NRG Energy and NRG South Texas LP, rather than having the agreement reflect the intermediary company relationships existing before the restructuring; and (3) acknowledge that the obligations under the April 2005 Agreement can be offset by support payments made by NRG Energy under a new 2006 financial support agreement for $120 million between NRG Energy and NRG South Texas LP.

The licensee also stated that the restructuring completed in May 2006 was done to streamline the corporate organizational structure among the NRG Energy subsidiaries that hold direct and indirect ownership of the NRG South Texas LP, and to achieve certain other business and tax advantages but that it will not involve any direct or indirect transfer of control of the NRG South Texas LP or its licenses. In the new corporate structure, NRG Energy and the existing wholly-owned subsidiaries of NRG Energy that own the NRG South Texas LP will retain control of the voting stock or other existing controlling interests in NRG South Texas LP. The STPNOC noted in its May 25, 2006, letter that in the new structure, NRG Energy directly owns over 80 percent of the voting stock of Texas Genco Holdings, Inc. (TGN), which in turn controls NRG South Texas LP through two intermediary companies. Also, before the restructuring, over 80 percent of this voting stock in TGN was also owned by NRG Energy. Therefore, in the new corporate structure, NRG Energy will continue to exercise control over TGN and thus over NRG South Texas LP; only changes in intermediary company relationships will occur that do not affect this relationship of control of the licensee by NRG Energy.

J. Sheppard The NRC staff has performed a threshold review of the facts and circumstances set forth in these two letters, and has considered the changes in the corporate structure and in the support agreement. The staff has concluded that no NRC direct or indirect license transfer approvals are required under 10 CFR 50.80 with respect to the licenses held by NRG South Texas LP and that changes to the prior support agreement as reflected in the new 2006 support agreement are adequate and need no further modification.

If you have any questions regarding this matter, please contact me at (301) 415-1476.

Sincerely,

/RA/

Mohan C. Thadani, Senior Project Manager Plant Licensing Branch IV Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket Nos. 50-498 and 50-499 cc: See next page

J. Sheppard The NRC staff has performed a threshold review of the facts and circumstances set forth in these two letters, and has considered the changes in the corporate structure and in the support agreement. The staff has concluded that no NRC direct or indirect license transfer approvals are required under 10 CFR 50.80 with respect to the licenses held by NRG South Texas LP and that changes to the prior support agreement as reflected in the new 2006 support agreement are adequate and need no further modification.

If you have any questions regarding this matter, please contact me at (301) 415-1476.

Sincerely,

/RA/

Mohan C. Thadani, Senior Project Manager Plant Licensing Branch IV Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket Nos. 50-498 and 50-499 cc: See next page DISTRIBUTION)

PUBLIC LPLIV r/f RidsOgcRp RidsAcrsAcnwMailCenter RidsNrrDorlLpl4 RidsNrrPMMThadani RidsNrrLALFeizollahi RidsNrrLAJBurkhardt RidsRgn4MailCenter ACCESSION NO: ML062220406 *No significant change to SE input.

OFFICE NRR/LPL4/PM NRR/LPL4/LA PFPB/BC NRR/LPL4/BC NAME MThadani LFeizollahi BWetzel DTerao DATE 8/17/06 8/16/06 7/19/06 8/18/06 OFFICIAL RECORD COPY DOCUMENT NAME: E:\Filenet\ML062220406.wpd

South Texas Project, Units 1 & 2 cc:

Senior Resident Inspector E. D. Halpin U.S. Nuclear Regulatory Commission Site Vice President/

P. O. Box 910 Plant General Manager Bay City, TX 77414 STP Nuclear Operating Company P.O. Box 289 C. Kirksey/C. M. Canady Wadsworth, TX 77483 City of Austin Electric Utility Department S. M. Head, Manager, Licensing 721 Barton Springs Road STP Nuclear Operating Company Austin, TX 78704 P. O. Box 289, Mail Code: N5014 Wadsworth, TX 77483 Mr. J. J. Nesrsta Mr. R. K. Temple Environmental and Natural Resources City Public Service Board Policy Director P. O. Box 1771 P. O. Box 12428 San Antonio, TX 78296 Austin, TX 78711-3189 INPO Jon C. Wood Records Center Cox, Smith, & Matthews 700 Galleria Parkway 112 East Pecan, Suite 1800 Atlanta, GA 30339-3064 San Antonio, TX 78205 Regional Administrator, Region IV Director U.S. Nuclear Regulatory Commission Division of Compliance & Inspection 611 Ryan Plaza Drive, Suite 400 Bureau of Radiation Control Arlington, TX 76011 Texas Department of State Health Services 1100 West 49th Street Steve Winn Austin, TX 78756 Texas Genco, LP 12301 Kurland Drive Brian Almon Houston, TX 77034 Public Utility Commission William B. Travis Building Judge, Matagorda County P. O. Box 13326 Matagorda County Courthouse 1701 North Congress Avenue 1700 Seventh Street Austin, TX 78701-3326 Bay City, TX 77414 Susan M. Jablonski A. H. Gutterman, Esq. Office of Permitting, Remediation Morgan, Lewis & Bockius and Registration 1111 Pennsylvania Avenue, NW Texas Commission on Washington, DC 20004 Environmental Quality MC-122 P.O. Box 13087 Austin, TX 78711-3087 August 2006

South Texas Project, Units 1 & 2 Mr. Terry Parks, Chief Inspector Mr. Glenn Adler Texas Department of Licensing Senior Research Analyst and Regulation Service Employees International Union Boiler Division 1313 L Street NW.

P. O. Box 12157 Washington, DC 20005 Austin, TX 78711 Mr. Ted Enos 4200 South Hulen Suite 630 Ft. Worth, Texas 76109