ML062890043
| ML062890043 | |
| Person / Time | |
|---|---|
| Site: | South Texas  (NPF-076, NPF-080) |
| Issue date: | 11/02/2006 |
| From: | Dyer J Office of Nuclear Reactor Regulation |
| To: | Sheppard J South Texas |
| Thadani, M C, NRR/DORL/LP4, 415-1476 | |
| References | |
| TAC MD1651, TAC MD1652 | |
| Download: ML062890043 (6) | |
Text
November 2, 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 FINANCIAL SUPPORT AGREEMENT; THRESHOLD REVIEW OF 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 (STPNOC) letters dated April 13 and May 25, 2006. In both letters, STPNOC, the operating licensee for South Texas Project, Units 1 and 2, described a corporate restructuring plan for NRG Energy, Inc.
(NRG Energy), the ultimate parent company of co-owner licensee NRG South Texas LP (formerly Texas Genco LP), effective as of April 30, 2006. In the letter dated April 13, 2006, STPNOC stated that the new corporate structure would not involve any direct or indirect transfer of control of NRG South Texas LP or its licenses.
In the letter dated May 25, 2006, STPNOC requested that the U.S. Nuclear Regulatory Commission (NRC) confirm that no license transfer approval was necessary regarding the new corporate structure. In addition, STPNOC requested in both letters that the NRC provide written consent to proposed amendments to the existing financial support agreement for
$120 million, dated April 13, 2005 (April 2005 Agreement) between NRG Texas LLC (formerly Texas Genco LLC) and NRG South Texas LP. These proposed amendments would:
(1) conform the names in the April 2005 Agreement to reflect the new names of the parties; (2) conform the April 2005 Agreement to reflect the new intermediary relationships between NRG Energy and NRG South Texas LP; 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, dated April 11, 2006, provided by NRG Energy for NRG South Texas LP.
The NRC staff responded to STPNOCs requests by letter dated August 18, 2006. Subsequent review indicated that there were some errors in the NRC staffs response and that the letter had not been signed by the Director of the NRCs Office of Nuclear Reactor Regulation, as stipulated in condition 1 of the NRCs Order Approving Application Regarding Proposed Acquisition, dated April 4, 2005 (April 2005 Order). Accordingly, this letter supersedes NRCs letter dated August 18, 2006.
J. Sheppard According to STPNOC, under the new corporate structure, NRG Energy retains ultimate control of NRG South Texas LP. No new intermediate parent entity was introduced between NRG Energy and NRG South Texas LP. STPNOC noted in its May 25, 2006, letter that as a result of the restructuring, NRG Energy now directly owns 100 percent of the voting stock of Texas Genco Holdings, Inc. (TGN), which in turn controls NRG South Texas LP through two intermediary companies. Before the restructuring, TGN was also indirectly controlled by NRG Energy. Therefore, in the new corporate structure, NRG Energy continues to exercise control over TGN and, thus over NRG South Texas LP. The changes in intermediary company relationships that occurred did not affect control of NRG South Texas LP by NRG Energy.
The NRC staff performed a threshold review of the facts and circumstances surrounding the NRG Energy corporate restructuring immediately after receipt of STPNOCs letter dated April 13, 2006, and concluded, at that time, that no NRC direct or indirect license transfer approvals were required under Section 50.80 of Title 10 of the Code of Federal Regulations with respect to the licenses held by NRG South Texas LP. This letter confirms such conclusion.
The corporate restructuring did reduce the level of assets backing the April 2005 Agreement, in that NRG Texas LLC no longer indirectly owns the South Texas Project nuclear assets as it did when the agreement was first presented to the NRC and executed. However, given the implementation of the April 11, 2006, support agreement provided by NRG Energy, which effectively provides the full amount of additional financial assurance that staff relied upon in connection with the April 2005 Order, I have concluded that the proposed changes to the April 13, 2005, support agreement are acceptable. Accordingly, the proposed changes to the April 2005 Agreement may be made.
Sincerely,
/RA/
J. E. Dyer, Director Office of Nuclear Reactor Regulation Docket Nos. 50-498 and 50-499 cc: See next page
ML062890043 OFFICE NRR/LPL4/PM NRR/LPL4/LA Tech Ed/QTE OGC-NLO NRR/LPL4/BC NRR/DORL/D NRR/D NAME MThadani LFeizollahi CBladey SUtall DTerao CHaney JDyer DATE 10/19/06 10/19/06 10/18/06 10/24/06 10/24/06 11/1/06 11/2/06
October 2006 South Texas Project, Units 1 & 2 cc:
Senior Resident Inspector U.S. Nuclear Regulatory Commission P.O. Box 330 Wadsworth, TX 77483 C. Kirksey/C. M. Canady City of Austin Electric Utility Department 721 Barton Springs Road Austin, TX 78704 Mr. J. J. Nesrsta Mr. R. K. Temple City Public Service Board P.O. Box 1771 San Antonio, TX 78296 INPO Records Center 700 Galleria Parkway Atlanta, GA 30339-3064 Regional Administrator, Region IV U.S. Nuclear Regulatory Commission 611 Ryan Plaza Drive, Suite 400 Arlington, TX 76011 Steve Winn Texas Genco, LP 12301 Kurland Drive Houston, TX 77034 Judge, Matagorda County Matagorda County Courthouse 1700 Seventh Street Bay City, TX 77414 A. H. Gutterman, Esq.
Morgan, Lewis & Bockius 1111 Pennsylvania Avenue, NW Washington, DC 20004 E. D. Halpin Site Vice President/
Plant General Manager STP Nuclear Operating Company P.O. Box 289 Wadsworth, TX 77483 S. M. Head, Manager, Licensing STP Nuclear Operating Company P.O. Box 289, Mail Code: N5014 Wadsworth, TX 77483 Environmental and Natural Resources Policy Director P.O. Box 12428 Austin, TX 78711-3189 Jon C. Wood Cox, Smith, & Matthews 112 East Pecan, Suite 1800 San Antonio, TX 78205 Director Division of Compliance & Inspection Bureau of Radiation Control Texas Department of State Health Services 1100 West 49th Street Austin, TX 78756 Brian Almon Public Utility Commission William B. Travis Building P.O. Box 13326 1701 North Congress Avenue Austin, TX 78701-3326 Susan M. Jablonski Office of Permitting, Remediation and Registration Texas Commission on Environmental Quality MC-122 P.O. Box 13087 Austin, TX 78711-3087 Mr. Terry Parks, Chief Inspector Texas Department of Licensing and Regulation Boiler Division P.O. Box 12157 Austin, TX 78711
October 2006 South Texas Project, Units 1 & 2 cc:
Mr. Ted Enos 4200 South Hulen Suite 630 Ft. Worth, TX 76109 Mr. Glenn Adler Senior Research Analyst Service Employees International Union 1313 L Street NW.
Washington, DC 20005