ML082330306
| ML082330306 | |
| Person / Time | |
|---|---|
| Site: | Catawba  |
| Issue date: | 09/25/2008 |
| From: | Stang J Plant Licensing Branch II |
| To: | Morris J Duke Energy Carolinas |
| Stang J, NRR/DORL, 415-1345 | |
| Shared Package | |
| ML082590426 | List: |
| References | |
| TAC MD7705 | |
| Download: ML082330306 (16) | |
Text
September 25, 2008 Mr. J. R. Morris Site Vice President Catawba Nuclear Station Duke Energy Carolinas, LLC, Energy Carolinas, LLC 4800 Concord Road York, SC 29745
SUBJECT:
ORDER APPROVING DIRECT TRANSFER OF THE SALUDA RIVER ELECTRIC COOPERATIVE, INC.S UNDIVIDED OWNERSHIP INTEREST IN CATAWBA NUCLEAR STATION, UNIT 1, TO DUKE ENERGY CAROLINAS, LLC, ENERGY CAROLINAS, LLC, A CURRENT OWNER AND OPERATOR, AND NORTH CAROLINA ELECTRIC MEMBERSHIP CORPORATION, A CURRENT OWNER (TAC NO. MD7705)
Dear Mr. Morris:
The U.S. Nuclear Regulatory Commission (NRC) staff has completed its review of the application dated December 20, 2007 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML073580264), as supplemented by letter dated May 29, 2008 (ADAMS Accession No. ML081540469), requesting approval of the direct transfer of the Saluda River Electric Cooperative, Inc.s undivided ownership interest in Catawba Nuclear Station, Unit 1, to Duke Energy Carolinas, LLC, a current owner and operator, and North Carolina Electric Membership Corporation, a current owner. The enclosed Order approves the proposed direct ownership transfer pursuant to Sections 50.80 and 50.90 of Title 10 of the Code of Federal Regulations, and subject to the conditions described therein. The Order also approves the conforming license amendment, which will be issued and made effective at the time the transfer is completed.
is the NRC staff=s safety evaluation (SE) related to the preceding actions. The SE will be placed in the NRC public document room and added to the ADAMS Publicly Available Records System Library.
is the conforming amendment which contains the license pages that change as a result of the direct transfer. The conforming amendment will be issued and become effective at the time the transfer is consummated.
The Order has been forwarded to the Office of the Federal Register for publication.
Sincerely,
/RA/
John Stang, Senior Project Manager Plant Licensing Branch II-1 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket No. 50-413
Enclosures:
- 1. Order
- 2. Safety Evaluation
- 3. Conforming Amendment to NPF-35
- 4. Indemnity Agreement cc w/encls: See next page
The Order has been forwarded to the Office of the Federal Register for publication.
Sincerely,
/RA/
John Stang, Senior Project Manager Plant Licensing Branch II-1 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket No. 50-413
Enclosures:
- 1. Order
- 2. Safety Evaluation
- 3. Conforming Amendment to NPF-35
- 4. Indemnity Agreement cc w/encls: See next page DISTRIBUTION:
SUttal, OGC Public RidsAcrsAcnw_Mail CTR LPL2-1 R/F RidsNrrAdes RidsNrrAdro RidsNrrDprPfpb RidsNrrOd RidsSecyMailCenter RidsNrrDorlLpl2-1 RidsNrrDirsItsb RidsNrrPMJStang(hard copy)
RisdNrrPfpbMDusaniwskyj RidsNrrLAMO=Brien(hard copies 2) RidsRgn2MailCenter RidsOgcRp BSingal(DORL DPR)
SBurnell, OPA MCox, EDO RGN II Package Accession No. ML082590426; Safety Evaluation Accession No. ML082330306; Order Accession No.ML08290440; Amendment Accession No. ML082620271; License Pages Accession No. ML082620246; and Agreement Accession No. ML082620262.
OFFICE NRR/LPL2-1/PM NRR/LPL2-1/PM NRR/LPL2-1/LA Tech Editor NRR/PFPB/BC NAME JThompson JStang MOBrien QTE RCarlson DATE 09/18/08 09/18/08 09/22/08 09/18/08 09/18/08 OFFICE NRR/LPL2-1/BC NRR/DORL/D OGC NRR/D NAME MWong JGiitter SUttal ELeeds DATE 09/18/08 09/18/08 09/24/08 09/25/08 OFFICIAL RECORD COPY
Catawba Nuclear Station, Units 1 & 2 Page 1 of 2 cc:
Site Vice President Catawba Nuclear Station Duke Energy Carolinas, LLC, Power Company, LLC 4800 Concord Road York, SC 29745 Associate General Counsel and Managing Attorney Duke Energy Carolinas, LLC, Energy Carolinas, LLC 526 South Church Street - EC07H Charlotte, North Carolina 28202 Regulatory Compliance Duke Energy Carolinas, LLC, Energy Corporation 4800 Concord Road York, South Carolina 29745 North Carolina Municipal Power Agency Number 1 1427 Meadowwood Boulevard P.O. Box 29513 Raleigh, North Carolina 27626 County Manager of York County York County Courthouse York, South Carolina 29745 Piedmont Municipal Power Agency 121 Village Drive Greer, South Carolina 29651 Assistant Attorney General North Carolina Department of Justice P.O. Box 629 Raleigh, North Carolina 27602 NCEM REP Program Manager 4713 Mail Service Center Raleigh, North Carolina 27699-4713 North Carolina Electric Membership Corp.
P.O. Box 27306 Raleigh, North Carolina 27611 Senior Resident Inspector U.S. Nuclear Regulatory Commission 4830 Concord Road York, South Carolina 29745 Manager Division of Waste Management Bureau of Land and Waste Management Dept. of Health and Environmental Control 2600 Bull Street Columbia, South Carolina 29201-1708 Manager Nuclear Regulatory Issues and Industry Affairs Duke Energy Carolinas, LLC, Energy Corporation 526 South Church Street Mail Stop EC05P Charlotte, North Carolina 28202 Saluda River Electric P.O. Box 929 Laurens, South Carolina 29360 Vice President Customer Relations and Sales Westinghouse Electric Company 6000 Fairview Road 12th Floor Charlotte, North Carolina 28210 Owners Group (NCEMC)
Duke Energy Carolinas, LLC, Energy Corporation 4800 Concord Road York, South Carolina 29745 Senior Counsel Duke Energy Carolinas, LLC, Energy Carolinas, LLC 526 South Church Street - EC07H Charlotte, NC 28202
Catawba Nuclear Station, Units 1 & 2 Page 2 of 2 cc:
Division of Radiation Protection NC Dept. of Environment, Health, and Natural Resources 3825 Barrett Drive Raleigh, North Carolina 27609-7721 Group Vice President, Nuclear Generation and Chief Nuclear Officer P.O. Box 1006-EC07H Charlotte, NC 28201-1006
ENCLOSURE 1 ORDER APPROVING APPLICATION REGARDING DIRECT TRANSFER OF THE SALUDA RIVER ELECTRIC COOPERATIVE, INC.S UNDIVIDED OWNERSHIP INTEREST IN CATAWBA NUCLEAR STATION, UNIT 1, TO DUKE ENERGY CAROLINAS, LLC, A CURRENT OWNER AND OPERATOR, AND NORTH CAROLINA ELECTRIC MEMBERSHIP CORPORATION, A CURRENT OWNER
SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION FOR DIRECT TRANSFER OF THE SALUDA RIVER ELECTRIC COOPERATIVE, INC.S UNDIVIDED OWNERSHIP INTEREST TO DUKE ENERGY CAROLINAS, LLC, AND NORTH CAROLINA ELECTRIC MEMBERSHIP CORPORATION RENEWED FACILITY OPERATING LICENSE NO. NPF-35 CATAWBA NUCLEAR STATION, UNIT 1 DOCKET NO. 50-413
1.0 INTRODUCTION
By application dated December 20, 2007, (Agencywide Documents Access and Management System (ADAMS) Accession No. ML073580264) as supplemented by letter dated May 29, 2008 (ADAMS Accession No. ML081540469) (collectively, the application), Duke Energy Carolinas, LLC, North Carolina Electric Membership Corporation (NCEMC), and the Saluda River Electric Cooperative, Inc. (SREC), (collectively, applicants or licensees) pursuant to Section 184 of the Atomic Energy Act of 1954, as amended, and Title 10 of the Code of Federal Regulations (10 CFR), Part 50, Section 50.80 (10 CFR 50.80), requested that the U.S. Nuclear Regulatory Commission (NRC) consent to the direct transfer of SRECs 18.75 percent non-operating, undivided ownership interest in Catawba Nuclear Station, Unit 1 (Catawba 1). SRECs 18.75 percent undivided ownership interest in Catawba 1 and ownership of 9.375 percent of certain non-NRC licensed support facilities will be transferred to the other current owners of Catawba 1, which are Duke Energy Carolinas, LLC, (approximately 13.49 percent of SRECs ownership interest in Catawba 1) and NCEMC (approximately 5.26 percent of SRECs ownership interest).
Duke Energy Carolinas, LLC, will retain exclusive responsibility and control over operation of Catawba 1. Therefore, the proposed transfer does not involve any transfer of/or change in operating authority. The Catawba 1 operating license was extended an additional 20 years on December 5, 2003, authorizing operations until the year 2043. Additional clarifying information was provided in a May 29, 2008, letter, which provided clarification, and did not change the scope of the application.
The application also requested approval of a conforming amendment to the Catawba 1 license to reflect the transfer of the 18.75 percent ownership in Catawba 1. Catawba 1 is a 3,411 megawatt thermal Westinghouse four-loop pressurized-water reactor, located approximately 6 miles north, north-east of Rock Hill, South Carolina.
2.0 BACKGROUND
Currently, the ownership of Catawba 1 is as follows:
Duke Energy Carolinas, LLC, 25.00 percent NCEMC 56.25 percent SREC 18.75 percent Total 100.00 percent After the proposed direct transfer, the ownership of Catawba will change to the following:
Duke Energy Carolinas, LLC, 38.49 percent NCEMC 61.51 percent SREC 0.00 percent Total 100.00 percent SREC is a generation cooperative that is a wholesale power provider to five distribution cooperatives in South Carolina. In 1999, SREC entered into a debt restructuring agreement with the Rural Utilities Service (RUS), a division of the U.S. Department of Agriculture, in which SREC agreed to allow RUS to sell its non-operating, ownership interest in Catawba 1, and apply the proceeds toward the RUS guaranteed debt owed to the Federal Financing Bank by SREC.
On June 7, 2004, the RUS as a foreclosing lender issued a request for bids for the acquisition of the 18.75 percent SREC ownership interest in Catawba 1, representing approximately 214 megawatts of nuclear capacity.
In the response to the request for bids, Duke Energy Carolinas, LLC, and NCEMC each submitted a bid to purchase SRECs ownership interest. The RUS selected NCEMCs bid as the winner. Pursuant to the original ownership agreement however, Duke Energy Carolinas, LLC, and NCEMC share the right of first refusal to match any bids in proportion to their current ownership interest in Catawba 1. Duke Energy Carolinas, LLC, currently own 25.00 percent of Catawba 1 and NCEMC own 56.25 percent of Catawba 1. Based on these ownership percentages, Duke Energy Carolinas, LLC, has the right of first refusal on 30.77 percent of SRECs ownership interest in Catawba 1 and NCEMC has the right of first refusal on 69.23 percent of SRECs ownership interest.
Duke Energy Carolinas, LLC, appealed the RUS bid selection process, and ultimately a settlement was reached between Duke Energy Carolinas, LLC, NCEMC and RUS. Under the settlement, Duke Energy Carolinas, LLC, agreed to purchase 154 megawatts of SRECs ownership interest (approximately 13.49 percent of SRECs ownership interest) and NCEMC agreed to purchase the remaining 60 megawatts of SRECs ownership interest (approximately 5.26 percent of SRECs ownership interest). Accordingly, Asset Purchase Agreements were entered into between SREC and Duke Energy Carolinas, LLC, and SREC and NCEMC. As part of the sale of SRECs ownership interest, the current agreements that govern the co-ownership arrangement between Duke Energy Carolinas, LLC, and SREC will be terminated.
3.0 REGULATORY EVALUATION
The applicants request for approval of the direct transfer of the license listed above, discussed in this Safety Evaluation is made pursuant to 10 CFR 50.80. Section 50.80(a) of 10 CFR states:
No license for a production or utilization facility * *
- or any right there under, shall be transferred, assigned, or in any manner disposed of, either voluntarily or involuntarily, directly or indirectly, through transfer of control of the license to any person, unless the Commission shall give its consent in writing.
In addition, the requirements of 10 CFR 50.80(b) and (c) apply. As stated in 10 CFR 50.80(b),
an application for a license transfer shall include as much of the information described in §§ 50.33 and 50.34 of this subpart with respect to the identity and technical and financial qualifications of the proposed transferee as would be required by those sections if the application were for an initial license.
Furthermore Section 50.80(c) states that the Commission will approve an application for the transfer of a license, if the Commission determines: (1) That the proposed transferee is qualified to be the holder of the license; and (2) That the transfer of the license is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto.
The applicants have also requested approval of a conforming license amendment, pursuant to 10 CFR 50.90, to reflect the license transfers.
4.0 FINANCIAL QUALIFICATIONS Pursuant to 10 CFR 50.33(f), an electric utility as defined in 10 CFR 50.2, is not required to demonstrate its financial qualifications. Section 50.2 of 10 CFR states, in part, that an electric utility is any entity that generates or distributes electricity and which recovers the cost of this electricity, either directly or indirectly, through rates established by the entity itself or by a separate regulatory authority.
4.0.1 Duke Power Company LLC d/b/a Duke Energy Carolinas, LLC, Duke Power Company, LLC, is a wholly owned subsidiary of Duke Energy Corporation. Duke Energy Carolinas, LLC, the licensee, is engaged in the business of generating, transmitting and distributing electric power. Duke Energy Carolinas, LLC, is an electric public utility under the laws of North Carolina and subject to the jurisdiction of the North Carolina Utilities Commission with respect to its operations in the State of North Carolina. Duke Energy Carolinas, LLC, also transacts business in the State of South Carolina, and accordingly, its operations in that State are subject to the jurisdiction of the Public Service Commission of South Carolina. Duke Energy Carolinas, LLC, is also a public utility under the Federal Power Act, and therefore certain parts of its operations are subject to the jurisdiction of the Federal Energy Regulatory Commission.
Duke Energy Carolinas, LLC, owns and operates regulated electric facilities, including a total of seven nuclear units.
Duke Power Company LLC, is a limited liability company duly organized and existing under the laws of the State of North Carolina. The companys general office, and principal place of business, is located in Charlotte, North Carolina, and it also transacts business on a regular basis in the State of South Carolina.
Duke Energy Corporation is a holding corporation duly organized and existing under the laws of the State of Delaware. The corporations general office and principal place of business are located in Charlotte, North Carolina.
As specified in the NRC license, Duke Energy Carolinas, LLC, is licensed pursuant to Section 103 of the Atomic Energy Act of 1954, as amended, and 10 CFR Part 50, to own and operate Catawba 1. In accordance with 10 CFR 50.33(f), Electric Utilities are exempt from the requirement to demonstrate financial qualifications. Duke Energy Carolinas, LLC, is, and will remain, an electric utility within the meaning of 10 CFR 50.2 following the proposed transfer because Duke Energy Carolinas, LLC, will generate and distribute electricity and recover the cost of that electricity, either directly or indirectly, through rates established by a separate regulatory authority. As an electric utility Duke Energy Carolinas, LLC,s financial qualifications are presumed, and no further financial qualifications review is necessary.
4.0.2 North Carolina Electric Membership Corporation (NCEMC)
According to the application, NCEMC is a large generation and transmission cooperatives, originally formed to support North Carolinas 27 distribution electric cooperatives. NCEMC generates and transmits electricity to its member cooperatives via its ownership of two diesel peaking generators, two gas-fired peaking facilities currently under construction, and a 56.25 percent interest in Catawba 1. In addition, NCEMC purchases power from other electric utilities.
NCEMCs member cooperatives provide services to more than 850,000 customers in 93 of North Carolinas 100 counties. As a borrower from the RUS, a division of the U.S. Department of Agriculture, NCEMC is subject to the jurisdiction of the RUS.
Under 10 CFR 50.33, electric utilities are exempt from the requirements to demonstrate financial qualifications. NCEMC is and will remain an electric utility within the meaning of 10 CFR 50.2 following the proposed transfer since it will remain an entity that generates or distributes electricity and which recovers the cost of this electricity, either directly or indirectly, through rates established by the entity itself or by a separate regulatory authority.
NCEMC recovers costs for operations at Catawba 1 through the sales of electricity output based on rates NCEMC proposes and its Board of Directors approves. Following the Board of Directors approval, these rates are submitted to the RUS and are deemed approved within 30 days of receipt unless NCEMC is notified otherwise. Therefore, the NRC staff finds that NCEMC is an electric utility under 10 CFR 50.2 and that as an electric utility NCEMCs financial qualifications are presumed. Accordingly, no further financial qualifications review is necessary.
5.0 DECOMMISSIONING FUNDING
Pursuant to 10 CFR 50.75(b), a reactor licensee is required to provide decommissioning funding assurance by one or more of the methods described in 10 CFR 50.75(e), as determined to be acceptable by the NRC. The NRC has determined that the requirement to provide reasonable
assurance of decommissioning funding is necessary to ensure the adequate protection of public health and safety.
5.0.1 Duke Energy Carolinas, LLC, According to the application, after the proposed direct transfer, Duke Energy Carolinas, LLC, will receive the proportionate share of SRECs decommissioning trust funds that corresponds with the percentage of SRECs ownership interest in Catawba 1 that is being acquired by Duke Energy Carolinas, LLC. Duke Energy Carolinas, LLC, will also continue to maintain its existing Master Decommissioning Trust for its current 25.00 percent ownership interest in Catawba 1.
Duke Energy Carolinas, LLC, will continue to maintain these external decommissioning funds segregated from its assets and outside its administrative control in accordance with the requirements of 10 CFR 50.75(e)(1).
Duke Energy Carolinas, LLC, currently provides decommissioning funding assurance for its share of Catawba 1 by maintaining an external Master Decommissioning Trust for Catawba 1 and 2. As an electric utility licensee, decommissioning costs related to Catawba 1 are subject to a cost-of-service rate regulation rate base, and as such, will be included in the rates approved by the State regulatory authorities. According to the application, contributions to the Master Decommissioning Trust are made regularly based on collections from this established regulatory charge mechanism. As stated in the Biennial Decommissioning Funding Report, as of December 31, 2006, Duke Energy Carolinas, LLCs, share of Catawba 1s decommissioning trust fund total was $28,626,000. As of December 31, 2007, Duke Energy Carolinas, LLCs, share of the Catawba 1s decommissioning trust fund total was $32,892,000. Duke Energy Carolinas, LLCs, share of the decommissioning funds will increase after the proposed direct transfer is completed reflecting the proportional amount of ownership gained in this transfer from SREC in Catawba 1 by Duke Energy Carolinas, LLC.
According to the application, the Asset Purchase Agreement between Duke Energy Carolinas, LLC, and SREC requires that a pro-rata share of SRECs funds in the existing SREC nuclear-decommissioning fund, corresponding with SRECs ownership interest in Catawba 1 be transferred to Duke Energy Carolinas, LLCs Master Decommissioning Trust. Upon close of the sale, the proportionate share of the funds accumulated in the SRECs decommissioning fund as of the date of the closing that corresponds with SRECs ownership interest in Catawba 1 that Duke Energy Carolinas, LLC, is acquiring, will be transferred to Duke Energy Carolinas, LLCs, existing Non-Qualified Trust. This includes funds contributed by SREC to the decommissioning trust for both Catawba 1 and 2. This is in accordance with the contractual agreements between the co-owners of Catawba 1 and 2. The agreements require all owners, regardless of which unit they have ownership interest in, to provide decommissioning funding for both Catawba 1 and 2 proportional to their ownership interest. According to the SRECs Biennial Decommissioning Funding Report, dated April 2, 2007, as of December 31, 2006, the actual decommissioning trust fund totaled $57,796,261. According to the application as of December 31, 2007, the actual SREC decommissioning trust fund totaled $59,965,804.
The NRC staff finds that these arrangements will continue to provide reasonable assurance that Duke Energy Carolinas, LLC, will have the funds necessary to cover its approximately 38.49 percent ownership interest share of the minimum decommissioning funding costs of Catawba 1
after the proposed transfer. Consistent with the NRCs practice, the order approving the license transfer should be conditioned as follows:
At the time of closing of the license transfer, SREC shall transfer to Duke Energy Carolinas, LLCs Master Decommissioning Trust, the proportional amount of SRECs decommissioning funds corresponding to the proportionate ownership interest being transferred (approximately 13.49 percent of SRECs 18.75 percent interest in Catawba 1).
5.0.2 North Carolina Electric Membership Corporation (NCEMC)
According to the application, after the proposed transfer, NCEMC will receive the proportionate share of SRECs decommissioning trust funds that corresponds with the ownership interest in Catawba 1 that is being acquired by NCEMC. NCEMC will also continue to maintain its existing decommissioning trust for its current 56.25 percent ownership interest. NCEMC will continue to maintain these external decommissioning funds segregated from its assets and outside its administrative control in accordance with the requirements of 10 CFR 50.75(e)(1).
NCEMC currently provides decommissioning funding assurance for its share of ownership in Catawba 1 by maintaining external nuclear decommissioning trust funds in accordance with 10 CFR 50.75(e)(1)(ii). NCEMCs decommissioning funding balance as of December 31, 2006, was $89,310,510. In addition, as of December 31, 2007, the Decommissioning Trust Fund was
$104,160,027.
According to the application, the Asset Purchase Agreement between NCEMC and SREC requires that a pro-rata share of the funds in SRECs existing decommissioning funds, corresponding with the ownership interest in Catawba 1 being acquired, be transferred to NCEMC. Upon close of the sale, the proportionate share of the funds accumulated in the SREC nuclear decommissioning trust funds as of the date of closing that corresponds with the ownership interest in Catawba 1 that NCEMC is acquiring, will be transferred to NCEMCs external nuclear decommissioning trust.
Periodic contributions to NCEMCs nuclear decommissioning trust for NCEMCs existing Catawba 1 decommissioning obligations, as well as the newly acquired SREC ownership interest, will continue to be based on collections through rates established to recover NCEMCs cost-of-service. Section 50.75(e)(1)(ii)(A) provides, in part rural electric cooperatives that establish their own rates and are able to recover their cost-of-service allocable to decommissioning are assumed to meet this condition.
The NRC staff notes that NCEMCs Board of Directors policies provide NCEMC with the ability to recover cost-of-service through rates to members and nonmembers and to meet the requirements of mortgage and other agreements. Further, the Consolidated Mortgage, Security Agreement and Financing Statement between NCEMC, RUS, and the National Rural Utilities Cooperative Finance Corporation, dated January 2, 2006, requires NCEMC to design and implement rates for electric capacity, energy, and other services furnished by it to provide sufficient revenue to pay all fixed and variable expenses, as well as meet certain self-imposed Time Interest Earned and Debt Service Coverage Ratio requirements.
The NRC staff further notes that on January 1, 2003, NCEMC adopted the Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, as promulgated by the Financial Accounting Standards Board. As such, NCEMC recognizes the annual decommissioning expense as required by this accounting standard. The annual decommissioning expense is included in NCEMCs cost-of-service and is collected through rates, whereby it is deposited into the external decommissioning trust.
The NRC staff finds that these arrangements will continue to provide reasonable assurance that NCEMC will have the funds necessary to cover its approximately 62 percent ownership interest share of the minimum decommissioning funding costs of Catawba 1 after the proposed transfer.
Consistent with the NRCs practice, the order approving the license transfer should be conditioned as follows:
At the time of closing of the license transfer, SREC shall transfer to the NCEMC decommissioning fund, the proportional amount of SRECs decommissioning funds corresponding to the proportionate ownership interest being transferred (approximately 5.26 percent of SRECs 18.75 percent interest in Catawba 1).
5.0.3 Piedmont Municipal Power Agency and North Carolina Municipal Power Agency 1 The NRC staff notes that Piedmont Municipal Power Agency and North Carolina Municipal Power Agency 1 are contributors to the Catawba 1 decommissioning funding, but are not owners of Catawba 1, reflecting a partnership agreement between themselves and Duke Energy Carolinas, LLC, NCEMC, and SREC. As of December 31, 2007, Piedmont Municipal Powers Decommissioning Trust had $23,686,000. As of December 31, 2007, North Carolina Municipal Power Agency 1s Decommissioning Trust had $101,940,000.
6.0 TECHNICAL QUALIFICATIONS There is no proposed transfer of operating authority from Duke Energy Carolinas, LLC (as licensed operator), in connection with the proposed transfer of ownership interests to Duke Energy Carolinas, LLC (as licensed owner), and NCEMC.
According to the application, the technical qualifications of Duke Energy Carolinas, LLC, as the operating licensee, to carry out its responsibilities under the operating license for Catawba 1 will not be impacted by the proposed direct license transfer. The proposed direct license transfer will not result in any change in the design or operation of Catawba 1, any change in the technical aspects of the Catawba 1 Facility Operating License or Technical Specifications, nor any change to the technical qualifications of personnel involved in the maintenance or operations of Catawba 1. Duke Energy Carolinas, LLC, will at all times remain the operating licensee of Catawba 1 and there will be no changes in the Duke Energy Carolinas, LLC, management team or operating organization resulting from the proposed direct license transfer. Additionally, clear lines of responsibility and authority through the Chief Nuclear Officer will be maintained. The plant will continue to be operated in accordance with the license, NRC requirements, the licensing bases, and all other NRC prior imposed commitments.
The NRC staff finds that since there is no proposed transfer of operating authority and no other technical qualification issues have been raised, no technical qualifications findings that would be relevant for a new operating entity need be made.
7.0 ANTITRUST REVIEW
The Atomic Energy Act of 1954, as amended, does not require or authorize antitrust reviews of post-operating license transfer applications. Kansas Gas and Electric Co., et al. (Wolf Creek Generating Station, Unit 1), CLI-99-19, 49 NRC 441 (1999). The application here postdates the issuance of the operating license for the unit under consideration in this Safety Evaluation, and therefore no antitrust review is required or authorized.
8.0 FOREIGN OWNERSHIP, CONTROL, OR DOMINATION Sections 103d and 104d of the Atomic Energy Act of 1954, as amended, prohibits the NRC from issuing a license for a nuclear power plant to any corporation or other entity if the Commission knows or has reason to believe it is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government. NRCs regulations at 10 CFR 50.38, contain language to implement this prohibition. In the context of a direct transfer of control, the proposed direct license transfer can not result in foreign ownership, control or domination of the proposed transferee.
8.0.1 Duke Power Company LLC d/b/a Duke Energy Carolinas, LLC, Duke Energy Carolinas, LLC, a North Carolina company whose principal place of business is Charlotte, North Carolina, is wholly owned by Duke Energy Corporation, a Delaware corporation whose principal place of business is Charlotte, North Carolina. The shares of common stock of Duke Energy Corporation are publicly traded and widely held. The directors and officers of Duke Energy Corporation and Duke Energy Carolinas, LLC, are United States citizens. Under oath and affirmation, the application contains statements that neither Duke Energy Corporation nor Duke Energy Carolinas, LLC, is owned, controlled or dominated by any alien, foreign corporation or foreign government. The NRC staff does not know or have reason to believe otherwise.
Accordingly, the NRC staff does not know or have reason to believe that Duke Energy Carolinas, LLC, is owned, controlled, or dominated by any alien, foreign corporation, or foreign government, within the meaning of the Atomic Energy Act of 1954, as amended, by reason of the proposed direct license transfer.
8.0.2 North Carolina Electric Membership Corporation (NCEMC)
NCEMC, a North Carolina corporation whose principal place of business is North Carolina, is currently owned by 26 members who are all electric membership cooperatives that sell electricity at retail in the State of North Carolina. The executive officers and directors of NCEMC are United States citizens. Under oath and affirmation, the application contains statements that none of these members is owned, controlled, or dominated by any alien, foreign corporation, or foreign government.
Accordingly, the NRC staff does not know or have reason to believe that NCEMC is owned, controlled, or dominated by any alien, foreign corporation, or foreign government, within the meaning of the Atomic Energy Act of 1954, as amended, by reason of the proposed direct license transfer.
9.0 NUCLEAR INSURANCE
& INDEMNITY The provisions of the Price-Anderson Act (Section 170 of the Atomic Energy Act, as amended) and the Commissions regulations at 10 CFR Part 140 require that the current indemnity agreement continues to reflect that Duke Energy Carolinas, LLC, and NCEMC will remain the licensees after the proposed direct transfer takes effect.
Duke Energy Carolinas, LLC,, as well as NCEMC, will be required to maintain the financial protection required by 10 CFR Part 140 and the property insurance required by 10 CFR 50.54(w). The NRC staff will issue to Duke Energy Carolinas, LLC, and NCEMC modified Price-Anderson indemnity agreements to reflect that SREC will no longer be an owner or licensee.
According to the application, Duke Energy Carolinas, LLC, and NCEMC will also continue to have pro-rata responsibility with respect to retrospective liability in accordance with 10 CFR 140.21.
The NRC staff finds that the annual reports for Duke Energy Carolinas, LLC, and NCEMC (which were included in the December 20, 2007, application as enclosures 2 and 3 respectively),
indicate reasonable assurance that Duke Energy Carolinas, LLC, and NCEMC will be able to pay their pro-rata share of the maximum annual retrospective premium, pursuant to 10 CFR 140.21.
10.0
SUMMARY
Based on the foregoing, the NRC staff concludes, with respect to the transfer of SRECs ownership interest in Catawba 1, that Duke Energy Carolinas, LLC, and NCEMC are qualified to hold the additional interests in the Catawba 1 license as described in the application, and that the direct transfer of such interests in the license is otherwise consistent with applicable provisions of law, regulations and orders issued by the Commission pursuant thereto, subject to the conditions described herein.
11.0 CONFORMING AMENDMENTS The applicants have requested approval of proposed conforming amendments to the operating license for Catawba 1. The requested changes reflect the proposed transfer of the Saluda River Electric Cooperative, Inc.s undivided ownership interest in Catawba Nuclear Station, Unit 1, to Duke Energy Carolinas, LLC, a current owner and operator, and North Carolina Electric Membership Corporation, a current owner. The applicants have requested no physical or operating changes to the facility.
11.1 Discussion The changes to be made to the license are indicated in the conforming amendment in Enclosure 3 to the cover letter forwarding the NRC staffs order regarding the subject direct transfer. The changes do no more than accurately reflect the approved transfer action. The amendment involves no safety questions and is administrative in nature. Accordingly, the proposed amendment is acceptable.
11.2 State Consultation In accordance with the Commission's regulations, the South Carolina State official was notified of the proposed issuance of the amendments. The State official had no comments.
11.3 Conclusion With Respect to the Conforming Amendment The Commission has concluded, based on the considerations discussed above, that: (1) there is reasonable assurance that the health and safety of the public will not be endangered by operation in the proposed manner, (2) such activities will be conducted in compliance with the Commissions regulations, and (3) the issuance of the amendment will not be inimical to the common defense and security or to the health and safety of the public.
12.0 ENVIRONMENTAL CONSIDERATION
The subject application is for approval of a transfer of license issued by the NRC and approval of the conforming amendment. Accordingly, the actions involved meet the eligibility criteria eligibility criteria for categorical exclusion set forth in 10 CFR 51.22(c)(21). Pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared in connection with approval of the application.
13 CONCLUSION The NRC staff finds that Duke Energy Carolinas, LLC, and NCEMC are qualified to hold the Catawba 1 license to the extent proposed, and that the transfer of the license, as discussed herein, is otherwise consistent with the applicable provisions of law, regulations and orders issued by the Commission pursuant thereto, subject to the conditions described herein.
Principal Contributor: M. A. Dusaniwskyj Date: September 25, 2008