ML111960068

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Enclosure - Request for Supplemental Information Related to the Request for Exemption from 10 CFR 50.38 and the Indirect License Transfer Related to Merger of Northeast Utilities and Nstar
ML111960068
Person / Time
Site: Haddam Neck, Yankee Rowe, Maine Yankee
Issue date: 07/14/2011
From: Kristina Banovac
NRC/NMSS/SFST
To: Norton W
Maine Yankee Atomic Power Co
Banovac K, NMSS/SFST 492-3571
Shared Package
ML111960059 List:
References
TAC L24496, TAC L24497, TAC L24498, TAC L24538
Download: ML111960068 (3)


Text

Enclosure MAINE YANKEE ATOMIC POWER COMPANY CONNECTICUT YANKEE ATOMIC POWER COMPANY YANKEE ATOMIC ELECTRIC COMPANY DOCKET NOS. 50-309, 50-213,50-029, 72-30, 72-39, AND 72-31 REQUEST FOR SUPPLEMENTAL INFORMATION RELATED TO THE REQUEST FOR EXEMPTION FROM 10 CFR 50.38 AND THE INDIRECT LICENSE TRANSFER RELATED TO MERGER OF NORTHEAST UTILITIES AND NSTAR

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Background===

By letter dated December 6, 2010, Maine Yankee Atomic Power Company (MY), Connecticut Yankee Atomic Power Company (CY), and Yankee Atomic Electric Company (YAEC) (together referred to as the Yankee Companies) notified the U.S. Nuclear Regulatory Commission (NRC or Commission) of the pending merger of Northeast Utilities and NSTAR and applied for the NRCs consent for indirect license transfer (for CY and YAEC) and a threshold determination for MY.

By letter dated March 16, 2011, the Yankee Companies responded to the staffs initial request for additional information regarding foreign ownership, control, or domination of each of the licensees.

The March 16, 2011, response indicated that: (1) the licensees shareholders are ultimately owned by foreign entities; and (2) the licensees are governed by a board of directors whose members are appointed, in part, by companies that are ultimately controlled by foreign entities.

In its response issued on April 20, 2011, the NRC staff concluded that foreign entities held ownership interests in the licensees. The staff requested the licensees to submit a negation action plan for each of the licensees, which negates the foreign ownership, control or domination of MY, CY, and YAEC, or take action to remove the foreign ownership, control, or domination, pursuant to 10 CFR 50.38.

On May 16, 2011, the Yankee Companies submitted a request for exemption from the provisions of 10 CFR 50.38 that prohibit foreign ownership, control or domination of a licensee.

NRC staff has reviewed your request and has determined that supplemental information is required to complete its acceptance review.

Request for Supplemental Information (RSI)

On February 18, 2011, NSTAR submitted a petition for approval to the Massachusetts Department of Public Utilities (DPU) related to a purchase power agreement and renewable

energy contract (Agencywide Documents Access and Management System (ADAMS)

Accession No. ML111720933).

In its submittal, NSTAR states:

The Company has executed contracts with the three remaining short-listed projects [T]he contract for which NSTAR is seeking approval, is with Groton Wind, which is a majority-owned subsidiary of Iberdrola, S.A (Iberdrola). Iberdrola is based in Spain and is the top wind power producer in the world, as well as one of the largest utilities internationally.

On February 18, 2011, NSTAR submitted an additional petition to the Massachusetts DPU related to a purchase power agreement between NSTAR and New England Wind, a separate subsidiary of Iberdrola (ADAMS Accession No. ML111720883).

On February 18, 2011, NSTAR submitted a third petition to the Massachusetts DPU seeking approval for a long term contract with Blue Sky East, which is in turn an indirect subsidiary of Emera, a Canadian company (ADAMS Accession No. ML111720966).

The extent of NSTARs business arrangements with Iberdrola and Emera were not previously submitted to the NRC. The above documents, independently obtained by NRC staff from the Massachusetts DPU website (www.mass.gov/dpu), appear to indicate NSTAR may have additional and significant foreign involvement with Iberdrola and Emera beyond joint ownership of the Yankee facilities. This involvement appears to include financial arrangements with Iberdrola and Emera. Loan agreements, contracts, and other understandings with foreign interests are subject to review per NRCs Final Standard Review Plan on Foreign Ownership, Control, or Domination (SRP); 64 FR 52355 (September 28, 1999).

1. Describe in sufficient detail for the staff to make a determination, the financial arrangements between NSTAR and Iberdrola and Emera regarding the purchase power agreement and renewable energy contracts for Groton Wind, New England Wind, and Blue Sky East including, but not limited to, the terms of the financial arrangements and how these commitments may impact indirect control of the licensees by foreign entities.

Sections 103 and 104 of the Atomic Energy Act of 1954, as amended (AEA), preclude the issuance of a reactor license to an entity that the Commission knows or has reason to believe is owned, controlled, or dominated by an alien, a foreign corporation, or foreign government.

10 CFR 50.38 codifies the statutory requirement in the NRCs regulations.

The SRP applicable to nuclear reactor facilities licensed under sections 103 and 104 of the AEA establishes review criteria for evaluating matters of foreign ownership or control issues on a case-by-case basis. The SRP indicates that the reviewer may seek information regarding:

Whether the applicant is indebted to foreign interests or has contractual or other agreements with foreign entities that may affect control of the applicant.

Further, the SRP states that When factors not related to ownership are present, the plan shall provide positive measures that assure that the foreign interest can be effectively denied control or domination.

2. Provide information related to any contractual or other agreements between Northeast Utilities, NSTAR, and any foreign entities.

Sections 103 and 104 of the AEA preclude the issuance of a reactor license to an entity that the Commission knows or has reason to believe is owned, controlled, or dominated by an alien, a foreign corporation, or foreign government.

10 CFR 50.38 codifies the statutory requirement in the NRCs regulations.

The SRP applicable to nuclear reactor facilities licensed under sections 103 and 104 of the AEA establishes review criteria for evaluating matters of foreign ownership or control issues on a case-by-case basis. The SRP indicates that the reviewer may seek information regarding:

Whether the applicant is indebted to foreign interests or has contractual or other agreements with foreign entities that may affect control of the applicant.