ML071100066

GE Self-Guarantee of Funds for Decommissioning, March 2002

ML071100066
Person / Time
Site:	Vallecitos Nuclear Center, 07000754, 07200001, Vallecitos
Issue date:	03/04/2002
From:	Sherin K General Electric Co
To:	Office of Nuclear Material Safety and Safeguards
References
Download: ML071100066 (11)

Text

.4 S.0 Corporate Environmental Programs General Electric Company 3135 Easton Turnpike, Fairfield, CT 06431 March 4, 2002 Director, Office of Nuclear Material and Safeguards U. S. Nuclear Regulatory Commission Washington, D.C. 20555

SUBJECT:

GENERAL ELECTRIC COMPANY SELF-GUARANTEE OF FUNDS FOR DECOMMISSIONING I am the Chief Financial Officer of the General Electric Company (GE), 1 River Road, Schenectady, NY 12345, a corporation. This letter is in support of the firm's use of the financial test to demonstrate financial assurance, as specified in 10 CFR 70 AND 10 CFR 72. This firm has no parent company holding majority control of its voting stock.

This firm guarantees, through the Self-Guarantee, submitted to demonstrate compliance under 10 CFR 70 and 10CFR 72, the decommissioning of the following facilities owned and operated by this firm. The current cost estimates or certified amounts for decommissioning, so guaranteed, are shown for each facility:

NRC Address of ($ in thousands)

License No. Name & Address of Licensee Licensed Activity Cost Estimate DPR-1 General Electric Company GE Nuclear Energy 10,700 GE Nuclear Energy Vallecitos Nuclear Center 175 Curtner Ave. 6705 Vallecitos Rd.

San Jose, CA 95125 Pleasanton, CA 94566 R-33 General Electric Company GE Nuclear Energy 1,500 GE Nuclear Energy Vallecitos Nuclear Center 175 Curtner Ave. 6705 Vallecitos Rd.

San Jose, CA 95125 Pleasanton, CA 94566 TR-1 General Electric Company GE Nuclear Energy 20,000 GE Nuclear Energy Vallecitos Nuclear Center 175 Curtner Ave. 6705 Vallecitos Rd.

San Jose, CA 95125 Pleasanton, CA 94566 DR-10 General Electric Company GE Nuclear Energy 16,500 GE Nuclear Energy Vallecitos Nuclear Center 175 Curtner Ave. 6705 Vallecitos Rd.

San Jose, CA 95125 Pleasanton, CA 94566 SNM-960 General Electric Company GE Nuclear Energy 25,400 GE Nuclear Energy Vallecitos Nuclear Center 175 Curtner Ave. 6705 Vallecitos Rd.

San Jose, CA 95125 Pleasanton, CA 94566 SNM-2500 General Electric Company GE Nuclear Energy 33,200 Morris Operation. Morris Operation 7555 East Collins Rd. 7555 East Collins Rd.

Morris, IL 60450 Morris, IL 60450 Total Cost Estimate: $107,300 I

I-WA: 1289857.1

I hereby certify that General Electric Company is currently a going concern, and that it possesses positive tangible net worth in the amount of $23,175,000.

The fiscal year of this firm ends on December 31. The figures for the following items marked with an asterisk are derived from this firm's independently audited, year-end financial statements for the latest completed fiscal year, ended December 31, 2001. A copy of the firm's most recent financial statements is enclosed.

This firm is required to file a Form 10K with the U.S. Securities and Exchange Commission (SEC) for the latest fiscal year. The firm has at least one class of equity securities registered under the Securities Exchange Act of 1934.

The firm satisfies the following self-guarantee test:

1. Current decommissioning cost estimates or certified amounts: (Dollars in Thousands)

a. Decommissioning amounts covered by this self-guarantee $107,300

b. All decommissioning amounts covered by other NRC or Agreement State parent company guarantees or self-guarantees $ 81.759

c. All amounts covered by parent company guarantees, self-guarantees, or financial tests of other Federal or State agencies (e.g., EPA) 131,605 TOTAL $ 320,664

2. Current bond rating of most recent unsecured issuance of this firm Rating: Aaa Name of rating service: Moody's

3. Date of issuance of bond: 12/14/00

4. Date of maturity of bond: 12/01/10

• 5. Tangible net worth** (if any portion of estimates for decommissioning is included in total liabilities on your firm's financial statements, you may add the amount of that portion to this line) $ 23,175,000

• 6. Total assets in United States (required only if less than 90 percent of firm's assets are located in the United States) $315,179,000 Yes No

7. Is line 5 at least 10 times line 1? X

8. Are at least 90 percent of firm's assets located in the United States? If not, complete line 9 X

9. Is line 6 at least 10 times line 1? X

10. Is the rating specified on line 2 "A" or better? X

11. Does the licensee have at least one class of equity securities registered under the Securities Exchange Act of 1934? X

• Denotes figures derived from financial statements.

• • Tangible net worth is defined as net worth minus goodwill, patents, trademarks, and copyrights.

2 1-WA:1289857.1

I hereby certify that the contents of this letter is true and correct to the best of my knowledge.

Keith S. Sherin Date Senior Vice President - Finance 3

1-WA:1289857.1

Stamford Square 3001 Summer Street Stamford, CT 06905 Independent Accountants' Report on Applying Agreed-Upon Procedures The Board of Directors General Electric Company:

We have performed the procedures listed below, which were agreed to by the Board of Directors and Management of General Electric Company ("the Company"), solely to assist you in connection with the filing of selected financial information included in the "Self-Guarantee Test" section of your letter dated March 4, 2002 to the United States Nuclear Regulatory Commission. The Company's management is responsible for the selected financial information. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the Board of Directors and Management of General Electric Company.

Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

The procedures and associated findings are as follows: -

• Decommissioning Amount - We compared the dollar amount of decommissioning amounts covered by the self-guarantee, $107,300 thousand, in Item L~a to the amount of the Total Cost Estimate for decommissioning, so guaranteed, in the second paragraph of the letter dated March 4, 2002, from the Chief Financial Officer of the Company to United States Nuclear Regulatory Commission, and found such amounts to be in agreement.

• Bond Rating - We compared the Aaa bond rating in Item 2 to the April 2001 Moody's long term debt rating and we compared the date of issuance of bond in Item 3 and date of maturity of bond in Item 4 to the original bond prospectus dated December 14, 2000, and found them to be in agreement.

• Tangible Net Worth - We compared the dollar amount of tangible net worth, $23,175,000 thousand, as shown in Item 5, to the difference between Total Share Owners' Equity,

$54,824,000 thousand, and Intangible Assets, $31,649,000 thousand, each reflected in the Statement of Financial Position on page 44 of the Company's 2001 Annual Report, and found such amounts to be in agreement.

• Total Assets in the United States - We compared the Company's Total Assets in the United States, $315,179,000 thousand, as shown in Item 6, to the Company's Total Assets in the United States, reflected in Note 28 - Geographic Segment Information on page 88 of the Company's 2001 Annual Report, and found such amounts to be in agreement.

• Is Line 5 at Least 10 Times Line 1? - We multiplied the amount in line 1 by 10 and found that the amount in line 5 is at least 10 times the amount in line 1. Accordingly, we agree with the Company's response of "Yes" in Item 7.

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Page 2

" Are at Least 90% of Firm's Assets Located in the United States? - We divided the Company's Total Assets in the United States, $315,179,000 thousand, reflected in Note 28 - Geographic Segment Information on page 88 of the Company's 2001 Annual Report, by the Company's Total Assets, $495,023,000 thousand, reflected in the Statement of Financial Position on page 44 of the Company's 2001 Annual Report, and found that the Company's Total Assets in the United States were less than 90% of the Company's Total Assets. Accordingly, we agree with the Company's response of "No" in Item 8.

" Is Line 6 at Least 10 Times Line 1? - We multiplied the amount in line 1 by 10 and found that the amount in line 6 is at least 10 times the amount in line 1. Accordingly, we agree with the Company's response of "Yes" in Item 9.

We were not engaged to, and did not, conduct an examination, the objective of which would be the expression of an opinion on the selected financial information. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the use of the Board of Directors and Management of General Electric Company, and is not intended to be and should not be used by anyone other than these specified parties.

O>MCLOP March 4, 2002

BOARD OF DIRECTORS MEETING April 26, 1988 (Revised December 20, 1991) 10855 EXECUTION OF CONTRACTS AND OTHER INSTRUMENTS The Chairman reminded the Board that the resolution dealing with the execution of contracts and other instruments on behalf of

.the Company had last been reviewed and revised by the Board in June, 1985, at which time the resolution had been modified to reflect changes in the Company's organization and to change its form to make periodic organization updatings unnecessary under ordinary circumstances.

The Chairman noted that the principal purpose of this resolution is to indicate to persons outside the Company the individuals within the Company who have authority to sign various documents.

in view of the Board's determination to limit the individuals elected as officers of the Company (and authorize the Chairman of the Board to appoint and remove persons as non-corporate Operational Officers), he indicated that it would be advisable to consider revisinq and clarifyinq this resolution to take account of these clarifications and related matters.

The Chairman pointed out that, like the existing resolution.

the proposed resolution would not confer any authority to approve transactions underlying the documents to be signed over and above that which is possessed by the signer either by virtue of tNe April 26, 1988

powers inherent in that individual's position with the Company or by virtue of a delegation of authority to that individual by the Board of Directors or higher management..

Following discussion, it was RESOLVED, that (A) Any contract, lease, license, assignment, bond or other obligation, conveyance, power of attorney, guarantee, proxy, court pleading, release, tax return and documents, or other instruments may be executed on behalf related this company by the Chairman of the Board, a Vice Chairman of the Board, an Executive Vice President, a Senior of vice President, a Vice President reporting directly to the Chairman or a Vice Chairman of the Board, the Comptroller, Treasurer, the Secretary or any Vice President the who is corporate staff officer of the Company, all of the above-nameda individuals being hereinafter called "Authorized Persons".

In addition to the foregoing, any Operational sign any instrument of the type described in thisofficer may Paragraph (A) which relates to the component or function to which such operational Officer is assigned, and Any Manager, or formally designated Acting Manager, of any Division or Department level organization component may sign any such instrument which relates to that component. Each Operational Officer and each such Manager or Acting Manager is authorized to delegate to others, authority to execute on behalf of the company, the types of contracts or other instruments which relate to the function or component to which such Operational officer, Manager or Acting Manager -is assigned which are of the same types as the contracts and other instruments listed inl Paragraph (C) below.

(8) The Chairman of the Board and each of the Vice Chairmen of the Board is authorized to delegate to others authority to execute contracts and other instruments on behalf of the Company as he considers necessary and in the best interest of the Company.

(C) Each Authorized Person is hereby authorized to delegate to others authority to execute, on behalf of the company the following types of contracts and other instruments which relate to the function or component for which such Authorized Person is responsible:

1. Sales, purchase and consignment contracts, bids therefor.

(including contracts providing for or relating to a April 26, 1988- -

franchise for the distribution or resale of this Company's products) and documents in connection

..... -therewith, including bids to and contracts with any Municipal, County or State Government, or with the Government of the United States or a foreign country, or with any agency or department of any such Government and bonds to secure the performance of such bids and contracts.

2. Installation, erection, and service contracts and bids therefor and documents in connection therewith (including but not limited to installation, erection, and service contracts and bids therefor with any Municipal, County or State Government, or with the Government of the United States or a foreign country, or with any agency or department of any such Government) and bonds to secure the performance of any such contract or bid.

3. Assignments, waivers of lien, releases, guaranties, mortgages, indentures, credit agreements and such other agreements, documents or other instruments as may be necessary or advisable, relating to either direct or indirect financing in connection with sales by the Company, or the collection of debts, and proofs of claims and other instruments to be filed or used in any bankruptcy or insolvency proceedings.

4. Contracts, leases, deeds, or other instruments relating to rea.. property or to any improvements thereon.

5. Powers of Attorney authorizing agents and attorneys to acquire and dispose of motor vehicles on behalf of the Company and to file all necessary applications, execute all necessary documents, and take all other necessary actions in connection therewith.

6. Powers of Attorney authorizing agents and attorneys t3 transact business of the Company with the U.S. Custoas Service and with customs authorities in other countries.

(D) The Senior Vice President - Finance and the VIce President and Treasurer are each severally authorized to deleqate to others authority to execute on behalf of trne Company the following types of instruments and in connection therevith to establish, as appropriate, Company-vide procedures:

1. Agreements or other instruments relating to a, investment of funds of the Company, including but not limited to, instruments pertaining to the purchase, sale.

exchange, assignment, conversion, transfer, custody :r April 26, 1988 - 3 -

loan of any securities or properties, (b) establishment and operation of bank accounts, (c) authorizations purchase or sell currencies (including to contracts oar future delivery), (d) financial contracts applications for letters of credit, (f) issuance (e) certificates and replacement of certificates of stock lost, stolen or destroyed, and (g) share owner that are consents, waivers and releases. proxies,

2. Checks, drafts, other payment authorizations payable of the Company. and notes Except as provided below, any such authorization shall require counters ignatures stipulate that no one individual may both sign and countersign and the same instrument. Any delegation hereunder may provide that the individual authorized sign or countersign may effect his or her signature to means of a facsimile signature. by It shall not, however, be mandatory for any authorization hereunder to require signatures and counters ignatures with respect to (a) checks or drafts drawn on dividend, payroll, or working fund accounts, (b) depositary transfers or endorsements to the account or credit of the Company or (c) transfers between Company bank accounts.

3. Guarantees of indebtedness of foreign or domestic affiliates of the Company and guarantees of contingent obligations of such affiliates in connection with bank guarantees of commercial transactions.

(E) The Senior Vice President - Finance and the Vice President and Comptroller are each severally authorized to delegate to others authority to. execute on behalf of the Company, the following types of contracts and other instruments:

1. Federal, State or local tax returns and related documents, to be filed in the United States or foreign countries,

2. Reports of collections from employees and taxes due from the Company under the Federal Insurance Contributions Act, Federal Unemployment Tax Act, and the unemployment compensation laws of each of the states, the District of Columbia and Puerto Rico, as well as any related claims for refunds and reports thereunder,

3. Applications, claims, surrender and other forms inl connection with the General Electric Supplemental Life Insurance Program, April 26, 1988-- - 4 -

4. Annual, financial and other reports required of the Administrator under the Federal Employment Retirement Income Security Act of 1974, and any comparable report required by similar State laws,

5. Such certifications, invoices, reports, releases and other instruments as are necessary to conform to requirements of the United States Government or any department, agency or instrumentality therefor as may be necessary or advisable in order to comply with the terms of any agreement between the Company and the United States Government or any department, agency or instrumentality thereof.

(F) The General Counsel is authorized to delegate to others authority to execute on behalf of the Company, the following types of instruments:

1. Licenses, contracts, assignments, releases, court pleadings and other instruments relating to inventions and technology and to patent, trademark and copyright matters.

2. Petitions, powers of attorney, authorizations, verifica-tions, nominations of representatives, declarations, and other instruments relating to proceedings in the Patent, Trademark Registration or Copyright Offices servicing any country or region of the world, or to related appeal proceedings, or relatinq to maintenance and defense of the resulting industrial property rights, assignments of rights to apply for and acquire patents and trademark registrations, evidence of such assignments, requests for the registration of patents as available for licensing, reports of inventions and petitions for waiver of patent rights to any department or aqency of the United States Government and assiqnments, licenses and other instru-ments confirmatory of Government rights in patents and inventions.

(G) Any contract, lease, deed or other instrument relatinq to real property or to any improvements located or to be located thereon may be executed on behalf of this Coupany by the Manager-Real Estate and Construction Operation or b 0u or a Manager-Financia Saidecon of sai Realsa an;"a!onstruction Operation.

(H) Any deleqations (including revocations and revisions) as authorized by this Resolution shall be Ln writinq. Authority deleqated pursuant to the last sentence of April 26, 1988 - s -

(Rev. 12/20/91)

Paragraph (A) or pursuant to Paragraphs (B), (C), (D),

(F) above may be redelegated by the persons to whom (E)such or delegations are made who in turn may authorize redelegation; provided, further however, that no such initial or subsequent redelegation shall be made except in conformity with the limitations imposed thereon by the initial delegation plus any restrictions contained in subsequent redelegations.

(1) The Secretary, the Associate Corporate Secretary and any Attesting Secretary are each severally authorized the Corporate Seal to and attest to contracts to affix instruments executed by persons acting pursuant and other authority granted by Paragraphs (A) or (G) above or to the to authority delegated in accordance with Paragraphs pursuant (C), (D), (A), (8),

(E), (F) or (H) above. The Secretary, the Associate Corporate Secretary and any Attesting Secretary are severally authorized to certify as to the provisionsalso each of this Resolution, as to the incumbency of any person in any within the Company and as to the terms of any delegation position under this Resolution.

(J) Resolution #10502 dated June 28, 1985 is superseded effective as of April 26, 1988.

April 26, 1988 - 6 -