L-11-202, Request for NRC Consent to Extinguish Parental Guaranty

Request for NRC Consent to Extinguish Parental Guaranty

ML111751678
Person / Time
Site:	Beaver Valley, Perry
Issue date:	06/24/2011
From:	Sena P FirstEnergy Nuclear Operating Co
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
L-11-202
Download: ML111751678 (19)

Text

FENOC FirstEnergy Nuclear Operating Company Peter P. Sena III President and Chief Operating Officer June 24, 2011 L-11-202 ATTN: Document Control Desk U. S. Nuclear Regulatory Commission Washington, DC 20555-0001

SUBJECT:

Beaver Valley Power Station, Unit No.1 Docket No. 50-334, License No. DPR-66 Perry Nuclear Power Plant Docket No. 50-440, License No. NPF-58 Request for NRC Consent to Extinguish Parental Guaranty 10 CFR 50.75 76 South Main Street Akron. Ohio 44308 Pursuant to Paragraph 13 of the Parental Guaranty dated March 4, 2010, between FirstEnergy Corp. (FE) and FirstEnergy Nuclear Generation Corp. (FENGenCo)

(Enclosure A), the FirstEnergy Nuclear Operating Company (FENOC), on behalf of FE and FENGenCo, hereby requests Nuclear Regulatory Commission (NRC) consent to extinguish the $15 million Parental Guaranty. FENGenCo has concluded that the

$15 million Parental Guaranty is no longer needed, but instead has obtained a

$95 million Parental Guaranty that will take effect once the existing $15 million Parental Guaranty is extinguished pursuant to NRC approval.

The current Parental Guaranty provides $15 million in additional financial assurance for the decommissioning of FENGenCo's 100 percent ownership interest in Beaver Valley Power Station, Unit No.1 (BVPS-1).

As described in the biennial decommissioning reports for the Beaver Valley Power Station, Unit Nos. 1 and 2; the Davis-Besse Nuclear Power Station; and the Perry Nuclear Power Plant, submitted by letter dated March 29, 2011 (Accession No. ML110950060), the FEN GenCo share of the BVPS-1 nuclear decommissioning trust (NOT) has a shortfall of approximately $66 million (excluding the current $15 million Parental Guaranty) and the FENGenCo share of the Perry Nuclear Power Plant (PNPP)

NDT has a shortfall of approximately $26 million. After-tax values of the nuclear decommissioning trusts are being provided under separate correspondence in response to an NRC request for additional information dated May 31,2011 (Accession No. ML111460042).

Beaver Valley Power Station, Unit No.1 Perry Nuclear Power Plant L-11-202 Page 2 Therefore, FENGenCo proposes to use a combination of the prepayment and guaranty methods, as authorized by 10 CFR 50. 75(e)(1 )(vi) to resolve the current shortfall.

FENGenCo has obtained a $95 million Parental Guaranty that becomes effective and revokes the current $15 million Parental Guaranty upon NRC approval authorizing FENGenCo and FE to extinguish the current $15 million Parental Guaranty. The prepayment value for FEN GenCo's share of BVPS-1 (100 percent) and PNPP (87.42 percent) is $905,822,552 (based on the after-tax value of the NDTs and with earnings credited). When added to the guaranty value of $95 million, this provides a total of $1,000,822,552, which exceeds the NRC minimum required assurance of

$1,000,208,050.

The $95 million Parental Guaranty and the certification that FE meets the applicable financial test are included as Enclosures Band C, respectively. The financial test was conducted based on 2010 FE audited financial results.

There are no regulatory commitments contained in this letter. If there are any questions, or if additional information is required, please contact Mr. Thomas A. Lentz, Manager - Fleet Licensing, at (330) 761-6071.

Sincerely, p(/:c: P -l ~

Peter P. Sena, III

Enclosures:

A. $15 Million Parental Guaranty B. $95 Million Parental Guaranty C. Letter from Chief Financial Officer to Demonstrate Financial Assurance cc: NRC Region I Administrator NRC Region III Administrator NRC Resident Inspector for BVPS NRC Resident Inspector for PNPP NRC Project Manager for BVPS NRC Project Manager for PNPP Director BRP/DEP Site BRP/DEP Representative

Enclosure A L-11-202

$15 Million Parental Guaranty (Five Pages Follow)

PARENTAL GUARANTY GUARANTY, dated as of March.!i-, 2010, made by FirstEnergy Corp., an Ohio corporation (the "Guarantor") to Guarantor's indirect, wholly-owned subsidiary, FirstEnergy Nuclear Generation Corp. ("FENGenCo").

WHEREAS, FENGenCo is an indirect, wholly-owned subsidiary of the Guarantor and has a 100% undivided ownership interest in Beaver Valley Power Station, Unit No.1 (BVPS 1);

WHEREAS, the NRC has promulgated regulations in Title 10, Chapter 1 of the Code of Federal Regulations ("CFR"), Part 50 which require that a holder of, or an applicant for, a license issued pursuant to 10 CFR Part 50 provide assurance that funds will be available when needed for required decommissioning activities; WHEREAS, the Guarantor receives substantial indirect benefits from owning its indirect subsidiary, FENGenCo (which benefits are hereby acknowledged), and accordingly, desires to execute and deliver this Guaranty in order to provide financial assurance for FENGenCo's obligation for the decommissioning of BVPS 1 as required by 10 CFR Part 50; and WHEREAS, the Guarantor previously entered into a Guaranty dated December 16, 2005, which it intends to revoke and replace with this Guaranty; NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to the Guarantor, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby makes the following representations and wananties to FENGenCo and hereby covenants and agrees as follows:

1.

The Guarantor has full authority and capacity to enter into this Guaranty under its bylaws, atiicles of incorporation, and the laws of the State of Ohio, its state of incorporation.

Guarantor has approval from its Board of Directors to enter into this guaranty.

2.

This guaranty is being issued so that FENGenCo will be in compliance with regulations issued by the Nuclear Regulatory Commission (NRC), an agency of the U.S.

Government, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974. The NRC has promulgated regulations in Title 10, Chapter I of the Code of Federal Regulations, Part 50, which require that a holder of, or an applicant for, a license issued pursuant to 10 CFR Part 50 provide assurance that funds will be available when needed for required decommissioning activities.

3.

This guaranty is issued to provide financial assurance for decommissioning activities for BVPS 1, Docket No. 50-334, License No. DPR-66 as required by 10 CFR Part 50. The decommissioning costs for BVPS 1 are guaranteed in the amount of $15 million.

4.

The Guarantor will meet or exceed the criteria from Financial Test II.A.2 from 10 CFR Part 30, Appendix A and agrees to notify FENGenCo and the NRC of any changes in its ability to meet the Appendix A criteria in compliance with the notification requirements as specified in 10 CFR Part 50. Specifically, the Guarantor will possess:

Page 2 (a) (i)

A current rating of its senior unsecured debt rating of BBB-or higher as issued by Standard and Poor's, or Baa3 or higher as rated by Moody's; and (ii) Tangible net worth is at least $10 million and at least six times the current decommissioning cost estimate or Guaranty amount; and (iii) Assets located in the United States amounting to at least 90 percent of its total assets or at least six times the current decommissioning cost or Guaranty amount.

5.

The Guarantor has an indirect majority control of the voting stock in FENGenCo.

FENGenCo is located at 76 South Main Street, Aleron, Ohio 44308. FENGenCo owns the following facility: BVPS 1, License No. DPR-66.

6.

The term "decommissioning activities" as used herein refers to the activities required by 10 CFR Part 50 for decommissioning of the facilities identified above.

7.

For value received from FENGenCo and pursuant to the authority conferred upon the Guarantor, the Guarantor guarantees that if FENGenCo fails to peliorm the required decommissioning activities, as required by License No. DPR-66, due to lack of funds, the Guarantor shall:

(a) provide all funds necessary, up to the amount of this Guaranty to carry out the required activities, or (b) set up a trust fund in favor of FENGenCo in the amount of this guaranty amount for these activities.

8.

The Guarantor agrees to submit revised financial statements, financial test data, and a special auditor's report and reconciling schedule to the NRC annually within 90 days of the close of the parent Guarantor's fiscal year.

9.

The Guarantor and FENGenCo agree that if the Guarantor fails to meet the financial test criteria at any time after this Guaranty is established, the Guarantor and FENGenCo shall send, within 90 days of the end of the fiscal year i:t1 which the Guarantor fails to meet the financial test criteria, by certified mail, notice to the NRC. If FENGenCo fails to provide alternative financial assurance as specified in 10 CFR Part 50, as applicable, and obtain written approval of such assurance from the NRC within 180 days of the end of such fiscal year, the Guarantor shall provide such alternative financial assurance in the name of FENGenCo or make full payment under the Guaranty to a standby trust established by FENGenCo.

10.

Independent of any notification under paragraph 8 above, if the NRC determines for any reason that the Guarantor no longer meets the financial test criteria or that it is disallowed from continuing as a Guarantor for the facilities under License No. DPR-66, the Guarantor agrees that within 90 days after being notified by the NRC of such determination, an alternative financial assurance mechanism as specified in 10 CFR

Page 3 Part 50 as applicable, shall be established by the Guarantor in the name of FENGenCo unless FENGenCo has done so.

11.

The Guarantor as well as its successors and assigns shall remain bound jointly and severally under this Guaranty notwithstanding any or all of the following: amendment or modification of license or NRC-approved decommissioning funding plan for that facility, the extension or reduction of the time of performance of required activities, or any other modification or alteration of an obligation of FENGenCo pursuant to 10 CFR Part 50.

12.

The Guarantor agrees that it will be liable for all litigation costs incurred by FENGenCo or the NRC in any successful effort to enforce the agreement against the Guarantor.

13.

The Guarantor agrees to remain bound under this Guaranty for as long as FENGenCo must comply with the applicable financial assurance requirements of 10 CFR Part 50, for the previously listed facility, except that this Guaranty may be cancelled and extinguished or the amount of the Guaranty specified in Paragraph 3 may be amended by the agreement of Guarantor and FENGenCo with the prior written consent of the NRC, and except that the Guarantor may cancel this Guaranty by sending notice by certified mail to the NRC and to FENGenCo, such cancellation to become effective no earlier than 120 days after receipt of such notice by both the NRC and FENGenCo as evidenced by the retum receipts. If FENGenCo fails to provide altemative financial assurance as specified in 10 CFR Part 50, as applicable, and obtain written approval of such assurance within 120 days after the sending of the above notice by the Guarantor, the Guarantor shall provide such altemative financial assurance.

14.

The Guarantor expressly waives notice of acceptance of this Guaranty by the NRC or by FENGenCo. The Guarantor also expressly waives notice of amendments or modification of the decommissioning requirements and of amendments or modifications of the licenses.

15.

The Guarantor files financial reports with the U.S. Securities and Exchange Commission (SEC), which are available to NRC and need not be submitted separately in accordance with 10 CFR 50.71 (b).

16.

This Guaranty and the rights and obligations of the FENGenCo and the Guarantor hereunder, shall be govemed by and construed in accordance with the domestic laws of the State of Ohio without giving effect to any choice or conflict-of-law provision or rule (whether of Ohio or any other jUl1sdiction) that would cause the application of the laws of any jurisdiction other than the Ohio. The Guarantor and the FENGenCo each consent to the exclusive jurisdiction and venue of any state or federal court within the State of Ohio for adjudication of any suit, claim, action or other proceeding at law or in equity relating to this Guaranty, or to any transaction contemplated hereby. The Guarantor and FENGenCo each accept, generally and unconditionally, the exclusive jurisdiction and venue of the aforesaid courts and waive any objection as to venue, and any defense of forum non conveniens. The Guarantor hereby irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the Guarantor

Page 4 at its address set forth opposite its signature below, such service to become effective 30 days after such mailing. Nothing herein shall affect the right of FENGenCo to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Guarantor in any other jurisdiction. The Guarantor hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with the Guaranty brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

17.

All notices and other communications hereunder shall be made to FirstEnergy Corp. ' s Chief Financial Officer and General Counsel at 76 South Main Street, Akron, Ohio 44308.

18.

It is intended that this Guaranty shall replace the existing Guaranty dated December 16, 2005, which shall be, and is hereby, cancelled, revoked and rescinded with no further force and effect upon receipt of the prior written consent of the NRC required pursuant to the terms of Paragraph 13 of that Guaranty. Upon receipt of such written consent from NRC, this Guaranty shall take effect, replace and supersede the prior Guaranty dated December 16, 2005, which shall become null and void.

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

Effective date: :fv It (4) 16 \\0 FirStE~

By ~J1~~

James F. Pearson Vice President & Treasurer STATE OF OHIO COUNTY OF SUMMIT Subscribed and swom to me, a Notary Public, in and for the City/County and State above named, this l!ti-.-J day of)Yltvl-cl.,201O.

FirstEnerg~ Nuclear Generation Corp.

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Rhonda S. Ferguson C /

Corporate Secretary STATE OF OHIO COUNTY OF SUMMIT

~Zf;h(,jJ*/~; (l1J11.(; i,=ui My Commission Expires: Ii/;( ~//1 Michele A. Buchtel Resident Summit County Notary Public, Stale of OhIo My Commission Expires: 08/28/11 Subscribed and swoM to ilie, a Notary Public, in and for the City/County and State above named, this 11t\\<\\

day of CAY

,2010.

nl~V~~J\\Ml My Commission Expires: ~1DJ1 KELLY JNGERSOLL NOTARY PUBLIC* STATE OF ottO Recorded in Wayne County My commission expires Nov. 22, 2014

Enclosure B L-11-202

$95 Million Parental Guaranty (Five Pages Follow)

PARENTAL GUARANTY GUARANTY, dated as of June~, 2011, made by FirstEnergy Corp., an Ohio corporation (the "Guarantor") to Guarantor's indirect, wholly-owned subsidiary, FirstEnergy Nuclear Generation Corp. ("FENGenCo").

WHEREAS, FENGenCo is an indirect, wholly-owned subsidiary ofthe Guarantor and has a 100% undivided ownership interest in Beaver Valley Power Station, Unit No.1

("BVPS 1") and 87.42 % of the undivided ownership of the Perry Nuclear Power Plant ("Perry");

WHEREAS, the NRC has promulgated regulations in Title 1 0, Chapter 1 ofthe Code of Federal Regulations ("CFR"), Part 50 which require that a holder of, or an applicant for, a license issued pursuant to 10 CFR Part 50 provide assurance that funds will be available when needed for required decommissioning activities; WHEREAS, the Guarantor receives substantial indirect benefits from owning its indirect subsidiary, FENGenCo (which benefits are hereby acknowledged), and accordingly, desires to execute and deliver this Guaranty in order to provide financial assurance for FENGenCo's obligations for the decommissioning ofBVPS 1 and Perry as required by 10 CFR Pmi 50; and WHEREAS, the Guarantor previously entered into a Guaranty dated March 4,2010, which it intends to revoke and replace with this Guaranty; NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to the Guarantor, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby makes the following representations and wananties to FENGenCo and hereby covenants and agrees as follows:

1.

The Guarantor has full authority and capacity to enter into this Guaranty under its bylaws, miicles of incorporation, and the laws of the State of Ohio, its state of incorporation.

Guarantor has approval fi'om its Board of Directors to enter into this guaranty.

2.

This guaranty is being issued so that FENGenCo will be in compliance with regulations issued by the Nuclear Regulatory Commission (NRC), an agency of the U.S. Govemment, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974. The NRC has promulgated regulations in Title 10, Chapter I of the Code of Federal Regulations, Part 50, which require that a holder of, or an applicant for, a license issued pursuant to 10 CFR Pmi 50 provide assurance that funds will be available when needed for required decommissioning activities.

3.

This guaranty is issued to provide financial assurance for decommissioning activities for BVPS 1, Docket No. 50-334, License No. DPR-66, and Perry, License No. NPF-58, Docket No. 50-440, as required by 10 CFR Part 50. The decommissioning costs for BVPS 1 and Peny are guaranteed in the amount of $95 million.

4.

The Guarantor will meet or exceed the criteria from Financial Test II.A.2 from 10 CFR Pmi 30, Appendix A and agrees to notify FENGenCo and the NRC of any changes in its ability to

meet the Appendix A criteria in compliance with the notification requirements as specified in 10 CFR Part 50. Specifically, the Guarantor will possess:

(a) (i)

A current rating of its senior unsecured debt rating ofBBB-or higher as issued by Standard and Poor's, or Baa3 or higher as rated by Moody's; and (ii) Tangible net worth is at least $10 million and at least six times the current decommissioning cost estimate or Guaranty amount; and (iii) Assets located in the United States amounting to at least 90 percent of its total assets or at least six times the CUlTent decommissioning cost or Guaranty amount.

5.

The Guarantor has an indirect majority control of the voting stock in FENGenCo.

FENGenCo is located at 76 South Main Street, Alaon, Ohio 44308. FENGenCo owns the BVPS 1 facility, License No. DPR-66 and has an 87.42 % interest in the Pen), facility, License No. NFP-58.

6.

The te1111 "decommissioning activities" as used herein refers to the activities required by 10 CFR Part 50 for decommissioning of the facilities identified above.

7.

For value received from FENGenCo and pursuant to the authority conferred upon the Guarantor, the Guarantor guarantees that ifFENGenCo fails to perfonn the required decommissioning activities, as required by License No. DPR-66 and License No. NPF-58, due to lack of funds, the Guarantor shall:

(a) provide all funds necessary, up to the amount ofthis Guaranty to carry out the required activities, or (b) set up a trust fund in favor of FEN GenCo in the amount ofthis guaranty amount for these activities.

8.

The Guarantor agrees to submit revised financial statements, financial test data, and a special auditor's report and reconciling schedule to the NRC annually within 90 days of the close of the parent Guarantor's fiscal year.

9.

The Guarantor and FENGenCo agree that if the Guarantor fails to meet the financial test criteria at any time after this Guaranty is established, the Guarantor and FENGenCo shall send, within 90 days of the end of the fiscal year in which the Guarantor fails to meet the financial test criteria, by celiified mail, notice to the NRC. IfFENGenCo fails to provide altemative financial assurance as specified in 10 CFR Part 50, as applicable, and obtain written approval of such assurance from the NRC within 180 days of the end of such fiscal year, the Guarantor shall provide such altemative financial assurance in the name of FEN GenCo or make full payment under the Guaranty to a standby trust established by FENGenCo.

10.

Independent of any notification under paragraph 8 above, if the NRC detennines for any reason that the Guarantor no longer meets the financial test criteria or that it is disallowed from continuing as a Guarantor for the facilities under License No. DPR-66 and License No.

Page 2

NFP-58, the Guarantor agrees that within 90 days after being notified by the NRC of such detem1ination, an altemative financial assurance mechanism as specified in 10 CFR Part 50 as applicable, shall be established by the Guarantor in the name of FEN GenCo unless FENGenCo has done so.

11.

The Guarantor as well as its successors and assigns shall remain bound jointly and severally under this Guaranty notwithstanding any or all of the following: amendment or modification oflicense or NRC-approved decommissioning funding plan for that facility, the extension or reduction of the time ofperfonnance of required activities, or any other modification or alteration of an obligation of FEN GenCo pursuant to 10 CFR Pmi 50.

12.

The Guarantor agrees that it will be liable for all litigation costs incuned by FENGenCo or the NRC in any successful effort to enforce the agreement against the Guarantor.

13.

The Guarantor agrees to remain bound under this Guaranty for as long as FENGenCo must comply with the applicable financial assurance requirements of 10 CFR Part 50, for the previously listed facilities, except that this Guaranty may be cancelled and extinguished or the amount of the Guaranty specified in Paragraph 3 may be amended by the agreement of Guarantor and FENGenCo with the prior written consent of the NRC, and except that the Guarantor may cancel this Guaranty by sending notice by celiified mail to the NRC and to FENGenCo, such cancellation to become effective no earlier than 120 days after receipt of such notice by both the NRC and FEN GenCo as evidenced by the retum receipts. If FENGenCo fails to provide altemative financial assurance as specified in 10 CFR Part 50, as applicable, and obtain written approval of such assurance within 120 days after the sending of the above notice by the Guarantor, the Guarantor shall provide such altemative financial assurance.

14.

The Guarantor expressly waives notice of acceptance of this Guaranty by the NRC or by FENGenCo. The Guarantor also expressly waives notice of amendments or modification of the decommissioning requirements and of amendments or modifications of the licenses.

15.

The Guarantor files financial repOlis with the U. S. Securities and Exchange Commission (SEC), which are available to NRC and need not be submitted separately in accordance with 10 CFR 50.71(b). This Guaranty and the rights and obligations of the FENGenCo and the Guarantor hereunder, shall be govemed by and constlUed in accordance with the domestic laws of the State of Ohio without giving effect to any choice or conflict-of-Iaw provision or lUle (whether of Ohio or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Ohio. The Guarantor and the FENGenCo each consent to the exclusive jurisdiction and venue of any state or federal court within the State of Ohio for adjudication of any suit, claim, action or other proceeding at law or in equity relating to this Guaranty, or to any transaction contemplated hereby. The Guarantor and FENGenCo each accept, generally and unconditionally, the exclusive jurisdiction and venue of the aforesaid comis and waive any objection as to venue, and any defense of/arum non conveniens. The Guarantor hereby inevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereofby registered or certified mail, postage prepaid, to the Guarantor at its address set forth opposite its signature below, such service to become effective 30 days after such mailing. Nothing Page 3

herein shall affect the right of FEN GenCo to serve process in any other maImer permitted by law or to commence legal proceedings or otherwise proceed against the Guarantor in any other jurisdiction. The Guarantor hereby ilTevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in comlection with the Guaranty brought in the courts refelTed to above and hereby further ilTevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient fOlUm.

16.

All notices and other communications hereunder shall be made to FirstEnergy Corp.'s Chief Financial Officer and General Counsel at 76 South Main Street, Alaon, Ohio 44308.

17.

It is intended that this Guaranty shall replace the existing Guaranty dated March 4,2010, shall be, and is hereby, cancelled, revoked and rescinded with no further force and effect upon receipt of the prior written consent of the NRC required pursuant to the tenns of Paragraph 13 of that Guaranty. Upon receipt of such written consent from NRC, this Guaranty shall take effect, replace and supersede the prior Guaranty dated March 4,2010, which shall become null and void.

Page 4

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

Effective date: ---------------------

Vice President & Treasurer STATE OF OHIO COUNTY OF SUMMIT Subscribed and SWOlJl to me, a Notary Public, in and for the City/County and State above named, this j!/!!:'day o~,

2011.

o L'I. /J/} (\\{Jl 1-:tI j)

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My Commission EXPires:Cla oJ,z J 0 ( I Michele A. auchtel Resident summit cOfg~,o BY--+-~~~--~+-~~--7-----A My ~~~%is~~~~~}:~ 08/28111 Rhonda S. Ferguson Corporate Secretary STATE OF OHIO COUNTY OF SUMMIT Subscribed and sworn to me, a Notary Public, in and for the City/County and State above named, this [I{

day of.ju..<fI?-, 2011.

Page 5

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My Commission Expires: _____ __

Christine A. Rosenberger Notary Public, State of Ohio My Commission Expires Feb. 20, 2016

Enclosure C L-11-202 Letter from Chief Financial Officer to Demonstrate Financial Assurance (Four Pages Follow)

FlrstEne~

Mark T. Clark Executive Vice President and Chief Financial Officer ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington DC 20555-0001

Subject:

FirstEnergy Corp. Parent - Guarantee of Funds for Decommissioning:

76 South Main Street Akron, Ohio 44308 330-384-5817 Fax: 330-252-1415 E-Mail: clarkm@firstenergycorp.com Letter from Chief Financial Officer to Demonstrate Financial Assurance I am the Executive Vice President and Chief Financial Officer of FirstEnergy Corp., 76 South Main Street, Akron, Ohio 44308, an Ohio corporation. This letter is in support of this finn's use of the financial test to demonstrate financial assurance, as specified in 10 CFR Part 50.

This firm guarantees, through the parent company guarantee submitted to demonstrate compliance under 10 CFR Part 50, up to $95 million of the decommissioning costs of the following facilities owned or operated by a subsidiary of this firm. The current cost estimate or amount of decommissioning funding assurance required, and the amount being guaranteed, are shown for the facilities:

Name of Facility Beaver Valley Power Station, Unit No.1 License No. DPR-66 Perry Nuclear Power Plant License No. NPF-58 Location of Facility Shippingport, P A Perry, OR Current Cost Estimate

$461,458,231

$616,277,532 FirstEnergy Corp. is required to file a Form 1 O-K with the U.S. Securities and Exchange Commission for the latest fiscal year. These annual financial repOlis are available to NRC and need not be submitted separately in accordance with 10 CFR 50.71(b).

The fiscal year of FirstEnergy Corp. ends on December 31 st. The figures for the following items (Financial Test II: Alternative II) marked with double asterisks are derived from this FirstEnergy Corp.'s independently audited, year.. end financial statements and footnotes for the latest completed fiscal year ended December 31, 2010.

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

M~rk T. Clark June 20, 2011

FINANCIAL TEST: ALTERNATIVE II (10 CFR Part 30 App. A.Section II A.2.)

FirstEnergy Corp. Parent Guarantee of Funds For Decommissioning Dollars in Millions

1.

Guaranteed amount for the following Units:

Beaver Valley Power Station, Unit No.1, License No. DPR-66 Perry Nuclear Power Plant License No. NPF-58

2.

Current bond or credit rating of most recent unsecured issuance of this firm

3.

4.

5.

6.

7.

8.

9.

10.

11.

Rating Name of rating service Date of issuance of bond:

Date of maturity of bond:

Tangible net wOlih*

Total assets in United States** (required only if less than 90 percent of firm's assets are located in the United States)

Is line 5 at least $1 O?

Is line 5 at least 6 times line I?

Are at least 90 percent of firm's assets located in the United States? If not, complete line 10.

Is line 6 at least 6 times line I?

Is the rating specified on line 2 "BBB" or better (if issued by Standard & Poor's) or "Baa" or better (if issued by Moody's)?

$95M Baa3 Moody's 11115/2001 1111512011

$2,008 See Line 9 Below x

x x

N/A x

• Tangible Net Worth is defined as FirstEnergy Corp. total equity minus goodwill, patents, trademarks and copyrights; and FirstEnergy Nuclear Generation Corp.'s net book value for Beaver Valley Power Station Unit No.1 and Perry Nuclear Power Plant; plus the amount of decommissioning liability of the nuclear units assured under this parental guarantee.

• • Denotes figures derived from financial statements.

Line Number in CFO's Letter Total Equity FIRSTENERGY CORP.

YEAR ENDED DECEMBER 31,2010 Dollars in Millions Per Financial Statements Less: Goodwill, Patents, Trademarks and Copyrights Net Book Value Beaver Valley Unit 1

$8,513

$5,575

$ 426

$ 988 Net Book Value Perry Nuclear Plant Plus: Beaver Valley Unit 1 Decommissioning Liability $ 193 Perry Nuclear Plant Decommissioning Liability

$ 291 5 - Tangible Net Worth

pwc Report of Independent Accountants To FirstEnergy Corp.:

We have performed the procedures enumerated below, which were agreed to by management of FirstEnergy Corp. (the Company) solely to assist you in evaluating the Company's compliance with the financial test as of December 31, 2010 performed in accordance with the u.s. Nuclear Regulatory Commission (the "NRC") Regulation 10 C.F.R, Section 50.75(e)(1)(iii)(B) as mandated by the Parent Company Guaranty dated June 14, 2011. Management is responsible for the Company's compliance with those requirements.

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 those parties specified in this report.

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.

For the purpose of this report, we have:

1.

Read the letter, dated June 20, 2011, from your Executive Vice President and Chief Financial Officer to the NRC regarding the $95 Million Parental Guaranty and performed the following procedures, which were applied as explained below:

A. Traced and agreed the amounts in the column "Per Financial Statements", to a schedule prepared by the Company from its audited financial statements noting no differences.

B. Traced and agreed the amount in the column "Per CFO's Letter" to line item #5 in the Company's Financial Test: Alternative II.

C. Recomputed the Tangible Net Worth by subtracting the Company's goodwill, patents, trademarks, copyrights; and FirstEnergy Nuclear Generation Corp.'s net book value of Beaver Valley Power Station, Unit NO.1 and Perry Nuclear Power Plant Unit NO.1; plus the amount of decommissioning liability of the nuclear unit assured under this parental guaranty from the Company's common stockholders' equity noting no differences.

We were not engaged to and did not conduct an examination, the objective of which would be the expression of an opinion on compliance. 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 information and use of management of the Company and is not intended to be and should not be used by anyone other than these specified parties.

PricewaterhouseCoopers LLP June 20, 2011 c~

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