ML093000630

Revised Letter Approving License Transfer Constellation Edf Development

ML093000630
Person / Time
Site:	Calvert Cliffs
Issue date:	10/30/2009
From:	Richard Guzman Division of Operating Reactor Licensing
To:	Barron H Constellation Energy Nuclear Group
Guzman R, NRR/DORL, 415-1030
Shared Package
ML093000625	List: ML093000630 ML093000631 ML093290246
References
NRC-2009-0194, TAC ME0443, TAC ME0444
Download: ML093000630 (14)

Text

OFFIOIAL U9E OtdLY PROPRIETARY ItdFORro'ATIOf4 UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555-0001 October 30, 2009 Mr. Henry B. Barron President, CEO, and Chief Nuclear Officer Constellation Energy Nuclear Group, LLC 100 Constellation Way, Suite 200C Baltimore, MD 21202

SUBJECT:

ORDER SUPERSEDING OCTOBER 9, 2009, ORDER APPROVING THE TRANSFER OF RENEWED FACILITY OPERATING LICENSE NOS. DPR-53 AND DPR-69 FOR THE CALVERT CLIFFS NUCLEAR POWER PLANT, UNIT NOS. 1 AND 2, AND MATERIALS LICENSE NO. SNM-2505 FOR THE CALVERT CLIFFS INDEPENDENT SPENT FUEL STORAGE INSTALLATION, AND CONFORMING AMENDMENTS (TAC NOS. ME0443 AND ME0444)

Dear Mr. Barron:

By letter to the Nuclear Regulatory Commission (NRC) dated January 22, 2009, as supplemented by letters dated February 26, April 8, June 25, and July 27, 2009, you requested consent to, pursuant to Title 10 of the Code of Federal Regulations (10 CFR) Section 50.80 and 10 CFR 72.50, the indirect transfer of control of the subject operating licenses and materials license, to the extent such would result from certain proposed restructuring actions in connection with a planned investment by EDF Development Whereby it would acquire a 49.99%

ownership interest in Constellation Energy Nuclear Group, LLC (CENG). The letter also requested consent to, pursuant to 10 CFR 50.90 and 10 CFR 72.56, the direct transfer of licenses held by Calvert Cliffs Nuclear Power Plant, Inc. (CCNPP, Inc.) to a new legal entity, Calvert Cliffs Nuclear Power Plant, LLC (CCNPP, LLC), and approval of conforming license amendments.

On October 9, 2009, the NRC issued Orders approving the direct and indirect transfers of licenses for the Calvert Cliffs Nuclear Power Plant (CCNPP), RE. Ginna Nuclear Power Plant (Ginna), and Nine Mile Point (NMP) necessary to implement corporate restructuring activities involving certain subsidiaries of Constellation Energy Group, Inc, and the acquisition of 49.99%

of CENG by EDF Development, Inc. The Orders also approved the conforming license amendments to be issued at the time the proposed transfers are completed.

By letter dated October 19, 2009, CENG provided new information regarding the timing and sequence of the proposed corporate restructuring of the Constellation Energy Group, Inc. (CEG) subsidiaries and the proposed EDF transaction. By letters dated October 25 (two letters), 26, and 28, 2009, CENG provided revised financial arrangements that will apply during the period between the completion of the restructuring activities and the EDF transaction. The NRC concluded that the October 9, 2009, Order must be modified i!l light of the new information provided in CENG's letters of October 19 through 28, 2009. This letter transmits the revised Order which supersedes the October 9, 2009, Order. The conforming amendment will be issued at the closing of the direct transfer of CCNPP, Inc. to CCNPP, LLC.

Enclosure 3 transmitted herewith contains Official Use Only Proprietary Information. When separated from the Enclosure, this document is decontrolled.

I OFFIOI;9;L UOE OtdLY PROPRIETARY IfdFORPo1JO:TIOt4

OFFlGhA,L elSE O~.LY PPlOPPlIE~AJ~Y INFOPlM;A,TION H. Barron -2 Enclosures 2 and 3 are the non-proprietary and proprietary versions, respectively, of the !\IRC's revised safety evaluation (SE) related to the preceding action. The non-proprietary version of the SE will be placed in the NRC's Public Document Room and added to the Agencywide Documents Access and Management System's Publicly Available Records System Library.

The superseding Order has been forwarded to the Office of the Federal Register for publication.

Sincerely,

. hard V. Guzman, Senior Project Manager lant Licensing Branch 1-1 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket Nos. 50-317,50-318, and 72-8

Enclosures:

1. Order Superseding October 9, 2009, Order

2. Safety Evaluation (non-proprietary)

3. Safety Evaluation (proprietary) cc wlo Enclosure 3: Distribution via Listserv OFFICIAL USE O~.LY PROPRIETARY IPJFORrdl~l'IOrJ

ENCLOSURE 1 ORDER SUPERSEDING OCTOBER 9, 2009. ORDER APPROVING APPLICATION REGARDING PROPOSED CORPORATE RESTRUCTURING AND APPROVING CONFORMING AMENDMENT

7590-01-P UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION NRC-2009-0194 In the Matter of ) Docket Nos. 50-317, 50-318, 72-8

)

CONSTELLATION ENERGY NUCLEAR ) Renewed License No. DPR-53 GROUP, LLC ) Renewed License No. DPR-69

) License No. SNM-2505 EDF DEVELOPMENT, INC. )

)

CALVERT CLIFFS NUCLEAR POWER )

PLANT, INC. )

)

CALVERT CLIFFS NUCLEAR POWER )

PLANT, LLC )

)

(Calvert Cliffs Nuclear Power Plant, )

Unit Nos. 1 and 2, and )

Calvert Cliffs Independent Spent Fuel )

Storage Installation) )

ORDER SUPERSEDING ORDER OF OCTOBER 9,2009, APPROVING APPLICATION REGARDING PROPOSED CORPORATE RESTRUCTURING AND APPROVING CONFORMING AMENDMENTS I.

Calvert Cliffs Nuclear Power Plant, Inc. (CCNPP, Inc. or the licensee) is the holder of Renewed Facility Operating License Nos. DPR-53 and DPR-69, which authorize the possession, use, and operation of Calvert Cliffs Nuclear Power Plant, Unit Nos. 1 and 2 (CCNPP 1 and 2), and of Materials License No. SI\lM-2505, which authorizes the possession, use, and operation of the Calvert Cliffs Independent Spent Fuel Storage Installation (Calvert Cliffs ISFSI), and authorizes CCNPP, Inc. to receive, possess, transfer, and store power reactor spent fuel at the Calvert Cliffs ISFSI. The facilities are located at the licensee's site in Calvert County, Maryland.

-2 II.

By letter dated January 22, 2009, as supplemented on February 26, April 8, June 25, July 27, October 15, October 19, October 25 (two letters), October 26, and October 28,2009 (together, the Application), Constellation Energy Nuclear Group, LLC (CENG), on behalf of the licensee and EDF Development, Inc. (EDF Development) (together, the applicants), requested that the Nuclear Regulatory Commission (NRC, the Commission), pursuant to Title 10 of the Code of Federal Regulations (10 CFR) 50.80, consent to the indirect license transfers that would be effected by the indirect transfer of control of CENG's ownership and operating interests in CCNPP, Inc. The actions being sought are a result of certain proposed corporate restructuring actions in connection with a planned investment by EDF Development whereby it would acquire a 49.99% ownership interest in CENG from Constellation Energy Group, Inc.

(CEG), the current 100% owner of CENG. EDF Development is a U.S. corporation organized under the laws of the State of Delaware and a wholly-owned subsidiary of E.D.F. International S.A., a public limited company organized under the laws of France, which is in turn a wholly owned subsidiary of Electricite de France S.A., a French limited company. The applicants also requested approval of the proposed direct transfer of licenses held under CCI\IPP, Inc. to a new legal entity, Calvert Cliffs Nuclear Power Plant, LLC (CCNPP, LLC) and approval of conforming license amendments that would replace references to CCNPP, Inc. in the license with references to CCNPP, LLC to reflect the transfer of ownership and operating authority, specifically, to possess, use, and operate CCNPP 1 and 2 and to receive, possess, or use related licensed materials under the applicable conditions and authorizations in the CCNPP 1 and 2 licenses and for the ISFSI license.

Following the closing of the transfer of ownership interests in CENG to EDF Development, EDF Development will hold a 49.99% ownership interest in CENG; CEG will hold a 50.01 % ownership interest in CENG through two new intermediate parent companies,

-3 Constellation Nuclear, LLC and CE Nuclear, LLC, formed for non-operational purposes. In addition, Constellation Nuclear Power Plants, Inc., which is currently an intermediate holding company between CENG and Nine Mile Point Nuclear Station, LLC and R.E. Ginna Nuclear Power Plant, LLC, will convert to a Delaware limited liability company by operation of law and become Constellation Nuclear Power Plants, LLC, and will exist as an intermediate holding company between CENG and CCNPP, LLC, Nine Mile Point Nuclear Station, LLC, and R.E.

Ginna Nuclear Power Plant, LLC. CCNPP, Inc. will convert to CCNPP, LLC by merger.

No physical changes to the facilities or operational changes are being proposed in the application. The proposed conforming license amendment would replace references to CCNPP, Inc. in the license with references to CCNPP, LLC to reflect the proposed direct transfer of the licenses.

Approval of the transfer of the license and the conforming license amendment is requested by the applicants pursuant to 10 CFR 50.80, 10 CFR 50.90, and 10 CFR 72.50.

Notice of the request for approval and opportunity for a hearing was published in the Federal Register on May 7, 2009 (74 FR 21413). No hearing requests or petitions to intervene were received. The !\IRC received comments from a member of the public in Seattle, Washington, in an e-mail dated May 22, 2009. The comments did not provide any information additional to that in the application, nor did they provide any information contradictory to that provided in the application.

Pursuant to 10 CFR 50.80 and 10 CFR 72.50, 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 and other information before the Commission, and relying upon the representations and agreements contained in the application, the NRC staff has determined that the proposed indirect license transfer of control of the subject licenses held by the licensee to the extent such

- 4 will result from the proposed corporate restructuring actions and the planned investment by EDF Development whereby it will acquire a 49.99% ownership interest in CENG, and that the direct transfer of CCNPP, Inc. to CCNPP, LLC as described in the Application, are otherwise consistent with applicable provisions of law, regulations, and Orders issued by the NRC, pursuant thereto, subject to the conditions set forth below. The NRC staff has further found that the Application for the proposed license amendment complies with the standards and requirements of the Atomic Energy Act of 1954, as amended (the Act), and the Commission's rules and regulations set forth in 10 CFR Chapter I; the facility will operate in conformity with the Application, the provisions of the Act, and the rules and regulations of the Commission; there is reasonable assurance that the activities authorized by the proposed license amendment can be conducted without endangering the health and safety of the public and that such activities will be conducted in compliance with the Commission's regulations; the issuance of the proposed license amendments will not be inimical to the common defense and security or to the health and safety of the public; and the issuance of the proposed amendments will be in accordance with 10 CFR Part 51 of the Commission's regulations and all applicable requirements have been satisfied.

On October 9, 2009, the Commission issued, "Order Approving Application Regarding Proposed Corporate Restructuring and Approving Conforming Amendments."

By letter dated October 19, 2009, CENG explained that its January 22, 2009, application for the license transfers had anticipated nearly concurrent completion of the proposed internal corporate restructuring of the CEG subsidiaries and the proposed EDF acquisition of 44.99% of CENG. After it filed its January 22, 2009, application, CENG learned that the restructuring activities for the CEG subsidiaries will be completed at least 8 days prior to closing the transaction involving EDF. In letters dated October 25 (two letters), 26, and 28, 2009, CENG provided revised financial arrangements that will apply during the period between the

-5 completion of the internal restructuring activities and the acquisition of 44.99% of CENG by EDF and a revised operating agreement that will apply after the EDF closing.

The NRC concluded that modifications were needed to the cover letter, the October 9, 2009, Order, and the safety evaluations in light of the new information provided in CENG's letters of October 19 through 28, 2009. This Order contains those modifications and supersedes the Order issued October 9, 2009.

The findings set forth above are supported by a modified NRC safety evaluation (SE) dated the same day as this Order.

III.

Accordingly, pursuant to Sections 161b, 161i, 1610, and 184 of the Act, 42 U.S.C.

Sections 2201(b), 2201(i), 2201(0), and 2234; and 10 CFR 50.80 and 10 CFR 72.50, IT IS HEREBY ORDERED that the Application regarding the indirect license transfers and direct license transfers related to the proposed corporate restructuring actions and the planned investment by EDF Development, as described herein, is approved, subject to the following conditions:

A. With regard to the direct and indirect transfers resulting from the restructuring of the CEG subsidiaries:

(1) Before completion of the direct transfer of the CCNPP license, CENG shall provide the Director of the Office of Nuclear Reactor Regulation satisfactory documentary evidence that CCNPP, LLC has obtained the appropriate amount of insurance required of licensees under 10 CFR Part 140 of the Commission's regulations.

(2) CCNPP, LLC may no longer rely exclusively on an external sinking fund as its decommissioning funding assurance mechanism and will be required to implement an alternate decommissioning funding assurance mechanism,

-6 acceptable per NRC requirements outlined in 10 CFR 50.75( e)( 1), which will be used to provide decommissioning funding assurance.

(3) The financial arrangements resulting from the corporate restructuring activities of the CEG subsidiaries are subject to the following:

(a) The Inter-Company Credit Agreements (ICA) described in the October 25, 2009, supplement to the Application shall be effective as of the date of the direct and indirect transfers (whichever occurs first) resulting from the restructuring of CEG subsidiaries and shall be consistent with the representations contained in the Application. CENG and CCNPP, LLC shall take no action to cause CEG, or their successors and assigns, to void, cancel or materially modify the ICA as submitted without the prior written consent of the NRC staff. CENG shall inform the Director of the Office of Nuclear Reactor Regulation, in writing, no later than 10 days after any funds are provided to CENG or any of the licensees by CEG or EDF Development under any Support Agreement.

(b) The Master Demand Notes described in the October 26,2009, supplement to the Application shall be effective as of the date of the direct and indirect transfers (whichever occurs first) resulting from the restructuring of CEG subsidiaries and shall be consistent with the representations contained in the Application. CENG and CCNPP, LLC, shall take no action to cause CEG, or their successors and assigns, to void, cancel or materially modify the Master Demand Notes without the prior written consent of the NRC staff.

B. With regard to the indirect transfers resulting from the acquisition of 44.99% of CENG by EDF Development (EDF Closing):

-7 (1) Before completion of the EDF Closing, Conditions A.(1) and A.(2) above must be fulfilled.

(2) The ownership and governance arrangements in effect as of the date of the indirect transfers to EDF Development are subject to the following:

(a) The Operating Agreement included with the supplement dated October 25, 2009, may not be modified in any material respect concerning decisionmaking authority over "safety issues" as defined therein without the prior written consent of the Director, Office of Nuclear Reactor Regulation.

(b) At least half the members of CENG's Board of Directors must be U.S.

citizens.

(c) The Chief Executive Officer (CEO), Chief Nuclear Officer (CNO) and Chairman of the Board of Directors of CENG must be U.S. citizens.

These individuals shall have the responsibility and exclusive authority to ensure and shall ensure that the business and activities of CENG with respect to the Calvert Cliffs, Unit Nos. 1 and 2, Calvert Cliffs ISFSI, Nine Mile Point, Unit Nos. 1 and 2, and R.E. Ginna licenses are at all times conducted in a manner consistent with the public health and safety and common defense and security of the United States.

(d) CENG will establish a Nuclear Advisory Committee (NAC) composed of U.S. citizens who are not officers, directors, or employees of CENG, CEG or EDF Development. The NAC will report to and provide transparency to the NRC and other U.S. governmental agencies regarding foreign ownership and control of nuclear operations.

(e) CENG shall cause to be transmitted to the Director, Office of Nuclear

-8 Reactor Regulation, within 30 days of knowledge of a filing with the U.S.

Securities and Exchange Commission, any Schedules 13D or 13G filed pursuant to the Securities and Exchange Act of 1934 that disclose beneficial ownership of any registered classes of CEG stock.

(3) The financial arrangements applicable to the indirect transfers resulting from the EDF Closing are subject to the following:

(a) The working capital and cash pooling arrangements described in Article IV of the Operating Agreement included with the October 25, 2009 supplement to the Application, shall be effective as of the date of the indirect transfers to EDF Development and shall be consistent with the representations contained in the Application. CENG and CCNPP, LLC shall take no action to cause CEG and/or EDF Development, or their successors and assigns, to void, cancel or materially modify the working capital and cash pooling arrangements in the Operating Agreement without the prior written consent of the NRC staff.

(b) The Support Agreements described in the February 26, 2009 supplement to the Application shall be effective as of the date of the indirect transfers to EDF Development; shall supersede the Inter-Company Credit Agreements provided by CEG, Inc.; and shall be consistent with the representations contained in the Application. CENG and CCNPP, LLC shall take no action to cause CEG and/or EDF Development, or their successors and assigns, to void, cancel or materially modify the Support Agreements as submitted without the prior written consent of the NRC staff. CENG shall inform the Director of the Office of Nuclear Reactor Regulation, in writing, no later than 10 days after any funds are provided

-9 to CENG or any of the licensees by CEG or EDF Development under any Support Agreement.

(c) The Master Demand Notes described in the October 28,2009 supplement to the Application, shall be effective as of the date of the indirect transfers to EDF Development; shall supersede the Master Demand Notes provided by CEG, Inc.; and shall be consistent with the representations contained in the Application. CENG and CCNPP, LLC, shall take no action to cause CEG and/or EDF Development, or their successors and assigns, to void, cancel or materially modify the Master Demand Notes without the prior written consent of the NRC staff.

IT IS FURTHER ORDERED that, consistent with 10 CFR 2.1315(b), the license amendment that makes changes to conform the license to reflect the subject direct license transfer is approved. The amendment shall be issued and made effective at the time the proposed direct license transfer is completed.

IT IS FURTHER ORDERED that CENG shall inform the Director of the Office of Nuclear Reactor Regulation, in writing, of the date of closing of the transfer of EDF Development's ownership and operating interests in CENG at least 1 business day before the closing. Should the transfers of the licenses not be completed within 1 year of this Order's date of issuance, this Order shall become null and void, provided, however, that upon written application and for good cause shown, such date may be extended by Order.

This Order supersedes the Order issued on October 9, 2009, and is effective upon issuance.

For further details with respect to this Order, see the initial application dated January 22, 2009 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML090290101), as supplemented by letters dated February 26 (ML090630426), April 8

- 10 (ML091000665), June 25 (ML091811094), and July 27,2009 (ML092150712), October 15 (ML092920168), October 19 (ML0929990101), October 25 (ML093000127 and ML093000141),

October 26 (ML093000506), and October 28, and the SE (ML093010003) with the same date as this Order, which are available for public inspection at the Commission's Public Document Room (PDR), located at One White Flint North, 11555 Rockville Pike, Room 0-1 F21 (First Floor), Rockville, Maryland, and accessible electronically from the ADAMS Public Electronic Reading Room on the Internet at the NRC Web site, http://www.nrc.gov/readinq-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 or 301-415-4737, or bye-mail at pdr.resource@nrc.qov.

Dated at Rockville, Maryland, this so" day of October 2009.

FOR THE NUCLEAR REGULATORY COMMISSION

~L:

Office of Nuclear Reactor Regulation Michael F. Weber, Director Office of Nuclear Material Safety and Safeguards

OFFIOI,etL UOE m~LV PROPRIETARV IP~FORPo1ATIOP~

• H. Barron -2 Enclosures 2 and 3 are the non-proprietary and proprietary versions, respectively, of the NRC's revised safety evaluation (SE) related to the preceding action. The non-proprietary version of the SE will be placed in the NRC's Public Document Room and added to the Agencywide Documents Access and Management System's PUblicly Available Records System Library.

The superseding Order has been forwarded to the Office of the Federal Register for publication.

Sincerely, IRA!

Richard V. Guzman, Senior Project Manager Plant Licensing Branch 1-1 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket Nos. 50-317, 50-318, and 72-8

Enclosures:

1. Order Superseding October 9, 2009, Order

2. Safety Evaluation (non-proprietary)

3. Safety Evaluation (proprietary) cc wlo Enclosure 3: Distribution via Listserv DISTRIBUTION:

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