ML080940343

Order Approving Indirect Transfer of Facility Operating Licenses (Tac Nos. MD6181 and MD6182)

ML080940343
Person / Time
Site:	Indian Point
Issue date:	07/28/2008
From:	Pickett D NRC/NRR/ADRO/DORL/LPLI-1
To:	Kansler M Entergy Nuclear Operations
tsw1
References
FOIA/PA-2009-0026, TAC MD6181, TAC MD6182
Download: ML080940343 (12)

Text

OFFICIAL USE ONLY - PROPRIETARY INFORMATION July 28, 2008 Mr. Michael R. Kansler President & CEO/CNO Entergy Nuclear Operations, Inc.

1340 Echelon Parkway Jackson, MS 39213

SUBJECT:

INDIAN POINT NUCLEAR GENERATING UNIT NOS. 2 AND 3 - ORDER APPROVING INDIRECT TRANSFER OF FACILITY OPERATING LICENSES (TAC NOS. MD6181 AND MD6182)

Dear Mr. Kansler:

By application dated July 30, 2007, as supplemented by letters dated October 31, and December 5, 2007, and January 24, March 17, April 22, and May 2, 2008, Entergy Nuclear Operations, Inc. (ENO), acting on behalf of itself, Entergy Nuclear Indian Point 2, LLC (ENIP2),

and Entergy Nuclear Indian Point 3, LLC (ENIP3), requested that the U.S. Nuclear Regulatory Commission (NRC), pursuant to Section 50.80 of Title 10 of the Code of Federal Regulations, consent to the proposed indirect transfer of control of the Facility Operating Licenses, Nos.

DPR-26 and DPR-64, for the Indian Point Nuclear Generating Unit Nos. 2 and 3 (IP2 and IP3).

ENIP2, the owner of the IP2 facility, and ENIP3, the owner of the IP3 facility, are currently indirect subsidiaries of Entergy Corporation. Under a proposed corporate restructuring plan, a new holding company, Enexus Energy Corporation (Enexus), will be created and will be publicly owned. According to this plan, Enexus will acquire indirect ownership of 100 percent of both ENIP2 and ENIP3. In addition, ENO, the operator of the IP2 and IP3 facilities, is currently an indirect subsidiary of Entergy Corporation. Following the corporate restructuring, Entergy Corporation and Enexus will each have indirect control of 50 percent of ENO.

ENO will be converted from a corporation to a limited liability company and its name will be changed to EquaGen Nuclear LLC. Also, ENIP2 and ENIP3 will undergo name changes to become Enexus Nuclear Indian Point 2, LLC and Enexus Nuclear Indian Point 3, LLC, respectively. The staff understands that ENO will request administrative license amendments to conform the affected licenses in the near future.

The enclosed Order (Enclosure 1) approves the proposed indirect transfer of control of the licenses held by ENIP2 and ENIP3 to Enexus. The Order also approves the indirect transfer of control of the IP2 and IP3 licenses to the extent held by ENO to EquaGen LLC, a new intermediate holding company, held in equal shares by two new next tier intermediate holding companies, which are subsidiaries of Entergy Corporation and Enexus.

Enclosures 2 and 3 contain the non-proprietary and proprietary versions, respectively, of the NRC staffs safety evaluation (SE) related to the preceding actions. The non-proprietary version of the SE will be placed in the NRC Public Document Room and added to the Agencywide Document Access Management System Public Electronic Reading Room Library.

OFFICIAL USE ONLY - PROPRIETARY INFORMATION

OFFICIAL USE ONLY - PROPRIETARY INFORMATION M. Kansler The Order is being forwarded to the Office of the Federal Register for publication. If you have any questions, please contact me at (301) 415-1364.

Sincerely,

/RA/

Douglas V. Pickett, Senior Project Manager Plant Licensing Branch I-1 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket Nos. 50-247 and 50-286

Enclosures:

1. Order

2. Safety Evaluation (Non-proprietary)

3. Safety Evaluation (Proprietary) cc w/encls. 1 and 2: See next page OFFICIAL USE ONLY - PROPRIETARY INFORMATION

ML080940360 (Package)

ML080940343 (Letter and Order)

ML081080352 (Enclosure 2)

ML081080515 (Enclosure 3)

OFFICE LPL1-1/PM LPL1-1/LA IOLB/BC PFPB/BC NAME DPickett SLittle NSalgado ACosta (A) signed on signed on DATE 6 / 27 / 08 4 / 28 / 08 4 / 24 / 08 4 / 11 / 08 OFFICE LPL1-1/BC OGC DORL/D NAME MKowal SUttal TMcGinty for JGiitter DATE 5 / 1 / 08 7 / 01 / 08 7 / 02 / 08 Indian Point Nuclear Generating Unit Nos. 2 and 3 cc:

Senior Vice President Mr. Paul Eddy Entergy Nuclear Operations, Inc. New York State Department P.O. Box 31995 of Public Service Jackson, MS 39286-1995 3 Empire State Plaza Albany, NY 12223-1350 Vice President Oversight Entergy Nuclear Operations, Inc. Regional Administrator, Region I P.O. Box 31995 U.S. Nuclear Regulatory Commission Jackson, MS 39286-1995 475 Allendale Road King of Prussia, PA 19406 Senior Manager, Nuclear Safety &

Licensing Senior Resident Inspector=s Office Entergy Nuclear Operations, Inc. Indian Point 2 P.O. Box 31995 U. S. Nuclear Regulatory Commission Jackson, MS 39286-1995 P.O. Box 59 Buchanan, NY 10511 Senior Vice President and COO Entergy Nuclear Operations, Inc. Senior Resident Inspector=s Office 440 Hamilton Avenue Indian Point 3 White Plains, NY 10601 U. S. Nuclear Regulatory Commission P.O. Box 59 Assistant General Counsel Buchanan, NY 10511 Entergy Nuclear Operations, Inc.

440 Hamilton Avenue Mr. Charles Donaldson, Esquire White Plains, NY 10601 Assistant Attorney General New York Department of Law Manager, Licensing 120 Broadway Entergy Nuclear Operations, Inc. New York, NY 10271 Indian Point Energy Center 450 Broadway, GSB Mr. Raymond L. Albanese P.O. Box 249 Four County Coordinator Buchanan, NY 10511-0249 200 Bradhurst Avenue Unit 4 Westchester County Mr. Paul Tonko Hawthorne, NY 10532 President and CEO New York State Energy, Research, and Mayor, Village of Buchanan Development Authority 236 Tate Avenue 17 Columbia Circle Buchanan, NY 10511 Albany, NY 12203-6399 Mr. William DiProfio Mr. John P. Spath PWR SRC Consultant New York State Energy, Research, and 48 Bear Hill Road Development Authority Newton, NH 03858 17 Columbia Circle Albany, NY 12203-6399

Vice President, Operations Entergy Nuclear Operations Indian Point Energy Center 450 Broadway, GSB P.O. Box 249 Buchanan, NY 10511-0249 Mr. Garry Randolph PWR SRC Consultant 1750 Ben Franklin Drive, 7E Sarasota, FL 34236 Mr. William T. Russell PWR SRC Consultant 400 Plantation Lane Stevensville, MD 21666-3232 Mr. Jim Riccio Greenpeace 702 H Street, NW Suite 300 Washington, DC 20001 Mr. Phillip Musegaas Riverkeeper, Inc.

828 South Broadway Tarrytown, NY 10591 Mr. Mark Jacobs IPSEC 46 Highland Drive Garrison, NY 10524 Mr. Sherwood Martinelli FUSE USA via email

7590-01-P UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of )

)

ENTERGY NUCLEAR OPERATIONS, INC. )

)

ENTERGY NUCLEAR INDIAN POINT 2, LLC )

)

(Indian Point Nuclear Generating Unit No. 2) ) Docket Nos. 50-247 and 72-51

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ENTERGY NUCLEAR INDIAN POINT 3, LLC )

)

(Indian Point Nuclear Generating Unit No. 3) ) Docket No. 50-286

)

ORDER APPROVING INDIRECT TRANSFER OF FACILITY OPERATING LICENSES I

Entergy Nuclear Operations, Inc. (ENO) and Entergy Nuclear Indian Point 2, LLC (ENIP2) are co-holders of the Facility Operating License, No. DPR-26, which authorizes the possession, use, and operation of the Indian Point Nuclear Generating Unit No. 2 (IP2). ENO and Entergy Nuclear Indian Point 3, LLC (ENIP3) are co-holders of the Facility Operating License, No. DPR-64, which authorizes the possession, use, and operation of the Indian Point Nuclear Generating Unit No. 3 (IP3). IP2 and IP3 are both pressurized water nuclear reactors that are owned by ENIP2 and ENIP3, respectively, and operated by ENO. The facilities are located in Westchester County, New York.

II By application dated July 30, 2007, as supplemented by letters dated October 31, and December 5, 2007, and January 24, March 17, April 22, and May 2, 2008, ENO, acting on behalf of itself, ENIP2, and ENIP3, requested that the U.S. Nuclear Regulatory Commission (NRC, the Commission), pursuant to Section 50.80 of Title 10 of the Code of Federal

Regulations (10 CFR), consent to the proposed indirect transfer of control of the IP2 and IP3 licenses, including the general license for the independent spent fuel storage installation.

ENIP2 is currently a direct wholly owned subsidiary of Entergy Nuclear Holding Company #3, LLC. Entergy Nuclear Holding Company #3, LLC is a direct wholly owned subsidiary of Entergy Nuclear Holding Company which, in turn, is a direct wholly owned subsidiary of Entergy Corporation. Therefore, under the current corporate structure, Entergy Corporation is the indirect owner of 100 percent of ENIP2.

Under the proposed corporate restructuring, a new holding company, Enexus Energy Corporation (Enexus), will be created. Initially, the public shareholders of Entergy Corporation will separately own the shares of Enexus and, as such, Enexus will be owned by the public.

Entergy Nuclear Holding Company, an indirect parent company of ENIP2, will become a direct wholly owned subsidiary of Enexus. Accordingly, following the corporate restructuring, Enexus will acquire indirect control of 100 percent of ENIP2.

ENIP3 is currently a direct wholly owned subsidiary of Entergy Nuclear New York Investment Company 1 which, in turn, is a direct wholly owned subsidiary of Entergy Nuclear Holding Company # 1. Seventy-five percent of Entergy Nuclear Holding Company #1 is directly owned by Entergy Corporation while the remaining 25 percent is directly owned by Entergy Global, LLC. Entergy Global, LLC is a direct wholly owned subsidiary of Entergy International Holdings LTD which, in turn, is a direct wholly owned subsidiary of Entergy Corporation.

Therefore, under the current corporate structure, Entergy Corporation is the indirect owner of 100 percent of ENIP3.

Under the proposed restructuring, Entergy Nuclear Holding Company #1 will become a direct wholly owned subsidiary of Enexus. Entergy Global, LLC, Entergy International Holdings LTD, and Entergy Nuclear New York Investment Company 1 will be eliminated. Accordingly,

following the corporate restructuring, Enexus will acquire indirect control of 100 percent of ENIP3.

ENO is currently a direct wholly owned subsidiary of Entergy Nuclear Holding Company

1. 2 which, in turn, is a direct wholly owned subsidiary of Entergy Corporation. Therefore, Entergy Corporation is currently the indirect owner of 100 percent of ENO.

Under the proposed corporate restructuring, Entergy Nuclear Holding Company #2 will be eliminated and ENO will become a direct subsidiary of a new parent company called EquaGen LLC. EquaGen LLC will be owned in equal shares by two new intermediate holding companies as follows. Entergy EquaGen, Inc. is being created as a direct subsidiary of Entergy Corporation and will own 50 percent of EquaGen LLC. Similarly, Enexus EquaGen, LLC is being created as a direct subsidiary of Enexus and will also own 50 percent of EquaGen LLC.

Accordingly, following the corporate restructuring, Entergy Corporation and Enexus will each have indirect control of 50 percent of ENO.

Finally, ENO will be converted from a corporation to a limited liability company and its name will be changed from Entergy Nuclear Operations, Inc. to EquaGen Nuclear LLC. Under Delaware law, EquaGen Nuclear LLC will assume all of the rights and responsibilities of ENO, and it will be the same company (legal entity) both before and after the conversion and name change. Also, ENIP2 and ENIP3 will undergo name changes to become Enexus Nuclear Indian Point 2, LLC and Enexus Nuclear Indian Point 3, LLC, respectively. The staff understands that ENO will submit requests for administrative license amendments to conform the affected licenses in the near future.

Notice of the requests for approval and an opportunity for a hearing was published in the Federal Register on January 16, 2008 (73 FR 2955). By petition dated February 5, 2008, Locals 369 and 590, Utility Workers Union of America (UWUA), American Federation of Labor-Congress of Industrial Organization, representing plant workers at the Pilgrim Nuclear Power

Station located in Plymouth, Massachusetts, responded to the Federal Register notice and requested a hearing and leave to intervene as a party in the proceedings for the Indian Point Nuclear Generating Unit Nos. 2 and 3. On June 12, 2008, Local 369 filed a notice of withdrawal of its petition to intervene. The notice of withdrawal did not apply to Local 590. In addition, by petition dated February 5, 2008, the Westchester Citizens Awareness Network, Rockland County Conservation Association, Promoting Health and Sustainable Energy, Sierra Club -

North East Chapter, and Richard Brodsky collectively filed a request for hearing and petition for leave to intervene as a party in the proceedings for the Indian Point Nuclear Generating Unit Nos. 2 and 3.

Both of these requests for hearings are currently pending before the Commission.

Pursuant to 10 CFR 2.1316, during the pendency of a hearing, the staff is expected to promptly proceed with the approval or denial of license transfer requests consistent with the staffs findings in its safety evaluation. Notice of the staffs action shall be promptly transmitted to the presiding officer and parties to the proceeding. Commission action on the pending hearing requests is being handled independently of this action.

Also, an intervenor from Oswego, New York, submitted two letters to the Commission with public comments dated January 21, 2008, along with an electronic transmission containing public comments dated January 27, 2008. The public comments are addressed by the NRCs safety evaluation dated July 28, 2008.

Pursuant to 10 CFR 50.80(a), 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. Upon review of the information in the application as supplemented and other information before the Commission, and relying upon the representations and agreements in the application as supplemented, the NRC staff concludes that the proposed indirect transfer of control of the licenses held by ENIP2 and ENIP3 to Enexus, as described herein, will not

affect the qualifications of ENIP2 and ENIP3 as holders of the IP2 and IP3 licenses, respectively. The indirect transfer of control of the licenses is otherwise consistent with applicable provisions of law, regulations, and orders issued by the NRC. Furthermore, the NRC staff concludes that the proposed corporate restructuring involving new intermediate and ultimate parent companies over ENO, as described herein, will not affect the qualifications of ENO as holder of the IP2 and IP3 licenses. The indirect transfer of control of the licenses as held by ENO, to the extent affected by the proposed restructuring, is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission.

The NRC staff concludes that the conversion of Entergy Nuclear Operations, Inc. to EquaGen Nuclear LLC would not constitute a direct transfer of the licenses to the extent held by ENO. Therefore, no consent to the proposed conversion is necessary.

The findings set forth above are supported by the NRCs safety evaluation dated July 28, 2008.

III.

Accordingly, pursuant to Sections 161b, 161i, 161o, and 184 of the Atomic Energy Act of 1954, as amended, 42 USC §§ 2201(b), 2201(i), 2201(o), and 2234; and 10 CFR 50.80, IT IS HEREBY ORDERED that the application regarding the indirect license transfers discussed above related to the proposed corporate restructuring and establishment of Enexus is approved, subject to the following conditions:

1 ENIP2 and ENIP3 shall enter into the $700 million Support Agreement with Enexus Energy Corporation as described in the application, no later than the time the proposed transactions and indirect license transfer occurs. ENIP2 and ENIP3 shall take no action to cause Enexus Energy Corporation, or its successors and assigns, to void, cancel, or modify the Support Agreement or cause it to fail to

perform, or impair its performance under the Support Agreement, without prior written consent of the NRC. The Support Agreement may not be amended or modified without 30 days prior written notice to the Director of the Office of Nuclear Reactor Regulation or his designee. An executed copy of the Support Agreement shall be submitted to the NRC no later than 30 days after the completion of the proposed transactions and the indirect license transfer. ENIP2 and ENIP3 shall inform the NRC in writing anytime it draws upon the Support Agreement.

2 The ten separate support guarantees from various Entergy subsidiaries, which total $315 million, including the support guarantees relating to IP2 and IP3, may be revoked when, and conditioned upon, implementation of the new $700 million Support Agreement at the time the proposed restructuring and indirect license transfer are completed.

3 Should the proposed corporate restructuring and establishment of Enexus not be completed within one year from the date of this Order, this Order shall become null and void, provided, however, upon written application and good cause shown, such date may be extended by Order.

This Order is effective upon issuance.

For further details with respect to this Order, see the application dated July 30, 2007, as supplemented by letters dated October 31, and December 5, 2007, and January 24, March 17, April 22, and May 2, 2008, and the NRCs safety evaluation dated July 28, 2008, which are available for public inspection at the Commission's Public Document Room (PDR), located at One White Flint North, Public File Area 01 F21, 11555 Rockville Pike (first floor), Rockville, Maryland and accessible electronically from the Agencywide Documents Access and Management System (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 28th day of July 2008.

FOR THE NUCLEAR REGULATORY COMMISSION

/RA/

Timothy J. McGinty, Acting Director Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation