ML120300184

W. Norton Letter Connecticut Yankee Atomic Power Company, Haddam Neck Plant - Notice of Violation EA-2011-284 (TAC No. L24565)

ML120300184
Person / Time
Site:	Haddam Neck  File:Connecticut Yankee Atomic Power Co icon.png
Issue date:	01/27/2012
From:	Michael Waters NRC/NMSS/SFST/LID/LB
To:	Norton W Connecticut Yankee Atomic Power Co
Goshen, JM, NMSS/SFST, 492-3325
Shared Package
ML120300176	List: ML120300184 ML120300201
References
TAC L24565
Download: ML120300184 (5)

Text

January 27, 2012 EA-2011-284 Mr. Wayne Norton President and Chief Executive Officer Connecticut Yankee Atomic Power Company 362 Injun Hollow Road East Hampton, CT 06424-3099

SUBJECT:

CONNECTICUT YANKEE ATOMIC POWER COMPANY, HADDAM NECK PLANT - NOTICE OF VIOLATION EA-2011-284 (TAC NO. L24565)

Dear Mr. Norton:

This letter refers to the U.S. Nuclear Regulatory Commission (NRC or Commission) staffs (staffs) review related to the indirect license transfer that will result from a proposed merger of Northeast Utilities (NU) and NSTAR. By application dated December 6, 2010 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML103490133), as supplemented March 16, 2011 (ML110770022), May 16, 2011 (ML11139A088), June 8, 2011 (ML11166A124), August 16, 2011 (ML11235A723), August 24, 2011 (ML11243A087), and August 25, 2011 (ML112490526), Connecticut Yankee Atomic Power Company (CYAPC or licensee) requested NRC consent to the indirect transfer of control of License No. DPR-61 for the Haddam Neck Plant, to the extent effected by the proposed merger between NU and NSTAR.

As part of the indirect license transfer review, the staff examined compliance with the Commissions rules and regulations. The staffs review included a review of foreign ownership, control or domination (FOCD) requirements in 10 CFR 50.38. As stated, 10 CFR 50.38 requires that any person who is a citizen, national, or agent of a foreign country, or any corporation, or other entity which the Commission knows or has reason to believe is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government, shall be ineligible to apply for and obtain a license. As CYAPCs Haddam Neck Plant is currently licensed under 10 CFR Part 50, the provisions of 10 CFR 50.38 apply.

During the staffs review, an apparent violation of the requirements in 10 CFR 50.38 was identified. A series of incremental ownership changes has resulted in CYAPC being owned, controlled, or dominated by two foreign corporations - Iberdrola, based in Spain, and National Grid, based in the United Kingdom. Although NRC consent or approval was not required for those cases where the specific ownership changes did not constitute a transfer of control that would necessitate a license transfer, compliance with 10 CFR 50.38 was still required.

Based on the totality of circumstances, the staff has determined that the existing ownership of CYAPC is contrary to the requirements of 10 CFR 50.38. Specifically, CYAPC is ultimately owned, in part, by foreign entities, and CYAPC is governed by a board of directors whose members are appointed, in part, by companies that are also ultimately controlled by foreign

W. Norton entities, as follows: New England Power Co. (19.5% - National Grid), Central Maine Power Co.

(6.0% - Iberdrola S.A.).

On April 20, 2011 (ML111101402), the staff requested additional information from CYAPC. The letter stated, the NRC staff knows and has reason to believe that the [licensee is] owned, controlled, or dominated by foreign corporations (i.e., CYAPC is not meeting the requirements of 10 CFR 50.38). The letter also requested CYAPC to submit a negation action plan to negate the FOCD (using the methods identified in the Final Standard Review Plan on Foreign Ownership, Control, or Domination (64 FR 52355; September 28, 1999)), or take action to remove the FOCD, to restore compliance with 10 CFR 50.38.

Your May 16, 2011, response to the request for additional information (ML11139A088) acknowledged the foreign ownership and stated that establishing a negation action plan would result in undue hardship to the licensee and shareholders. In lieu of submitting a negation action plan and restoring compliance with NRC regulations, you requested an exemption from the FOCD requirements in 10 CFR 50.38, in your May 16, 2011, letter. The NRC is reviewing this exemption request separately and you will be informed of the results of this review under separate correspondence.

Based on our review of the information in your May 16, 2011, letter and the information you submitted during the license transfer review, the NRC has determined that a Severity Level IV violation of the requirements in 10 CFR 50.38 has occurred. The violation was evaluated in accordance with the NRC Enforcement Policy. The current Enforcement Policy is included on the NRC's Web site at http://www.nrc.gov/about-nrc/regulatory/enforcement/enforce-pol.html.

The violation is cited in the enclosed Notice of Violation (Notice). The violation is being cited in the Notice because it was identified by the NRC.

You are required to respond to this letter and should follow the instructions specified in the enclosed Notice when preparing your response. If you have additional information that you believe the NRC should consider, you may provide it in your response to the Notice. The NRC review of your response to the Notice will also determine whether further enforcement action is necessary to ensure timely compliance with regulatory requirements.

The staff acknowledges receipt of your December 21, 2011, letter (ML11364A053), which provided additional information on FOCD matters and included a negation action plan that outlined certain foreign ownership negation and exclusion measures. You stated that resolutions implementing the plan were adopted by CYAPC on December 14, 2011. In your response to the Notice, you may reference this correspondence and should provide additional details on the actions you have taken to implement the negation measures, including all documents relevant to implementation of the negation action plan (e.g., executed copies of the board resolutions signed by the board of directors, signed copies of the certifications, and/or updates to your by-laws, as referenced in your letter).

In accordance with 10 CFR 2.390 of the NRC's "Rules of Practice," a copy of this letter, its enclosure, and your response, will be made available electronically for public inspection in the NRC Public Document Room or from ADAMS, accessible from the NRC Web site at http://www.nrc.gov/reading-rm/adams.html. To the extent possible, your response should not

W. Norton include any personal privacy, proprietary, sensitive, or safeguards information, so that it can be made available to the public without redaction.

If you have any questions, please contact me at (301) 492-3297, or John Goshen of my staff, at (301) 492-3325.

Sincerely,

/RA/

Michael D. Waters, Chief Licensing Branch Division of Spent Fuel Storage and Transportation Office of Nuclear Material Safety and Safeguards Docket Nos.: 50-213, 72-39 License No.: DPR-61 TAC No.: L24565

Enclosure:

Notice of Violation cc: Haddam Neck Plant Service List

W. Norton include any personal privacy, proprietary, sensitive, or safeguards information, so that it can be made available to the public without redaction.

If you have any questions, please contact me at (301) 492-3297, or John Goshen of my staff, at (301) 492-3325.

Sincerely,

/RA/

Michael D. Waters, Chief Licensing Branch Division of Spent Fuel Storage and Transportation Office of Nuclear Material Safety and Safeguards Docket Nos.: 50-213, 72-39 License No.: DPR-61 TAC No.: L24565

Enclosure:

Notice of Violation cc: Haddam Neck Plant Service List DISTRIBUTION:

SFST R/F BBenney ASimmons TFredrichs JSimpson ARivera DWeaver MAshley JLubinski BMizuno SUttal EBowdenBerry SHamman/RI KMattern NHilton MMcLaughlin/RI NSheehan/RI ADeFrancisco/RI File location: G:\SFST\Northeast Utilities\NOV Jan 2012\CY NOV cover letter.docx

\ CY NOV.docx ADAMS: ML120300176 OFC NMSS/SFST NMSS/SFST NMSS/SFST NMSS/SFST NRR NAME JGoshen WWheatley RWharton RTemps CRegan DATE 1/ 06 /12 1/11 /12 1/ 16 /12 1/ 11 /12 1/ 13 /12 OFC NMSS/SFST OGC OE NMSS/SFST NAME CAraguas CSafford JWray MWaters DATE 1/ 25 /12 1/ 20 /12 1/ 20 /12 1/27/12 OFFICIAL RECORD COPY

Haddam Neck Plant Service List cc:

Mr. Wayne Norton Mr. Randall L. Speck President and Chief Executive Officer Kaye, Scholer, Fierman, Hayes & Handler, Connecticut Yankee Atomic Power LLP Company The McPherson Building 362 Injun Hollow Road 901 Fifteenth Street, NW Suite 1100 East Hampton, CT 06424-3099 Washington, DC 20005-2327 Assistant Director Mr. James Lenois Office of Policy and Management ISFSI Manager Policy Development and Planning Division Connecticut Yankee Atomic Power 450 Capitol Avenue- MS# 52 ERN Company P.O. Box Bo 341441 362 Injun Hollow Road Hartford, CT 06134-1441 East Hampton, CT 06424-3099 Regional Administrator, Region I Mr. Robert Capstick U.S. Nuclear Regulatory Commission Communications Manager 475 Allendale Road Connecticut Yankee Atomic Power King of Prussia, PA 19406 Company 77 Lakewood Road Edward L. Wilds, Jr., PhD. Director Newton, MA 02461 Radiation Division, Bureau of Air Management Mr. Joseph Fay Connecticut Department of Energy and General Counsel Environmental Protection Connecticut Yankee Atomic Power 79 Elm Street Company Hartford, CT 06106-5127 362 Injun Hollow Road East Hampton, CT 06424-3099 Board of Selectmen Town Office Building Haddam, CT 06438 Ms. Rosemary Bassilakis Citizens Awareness Network 54 Old Turnpike Road Haddam, CT 06438 Ms. Deborah B. Katz President Citizens Awareness Network P.O. Box 83 Shelburne Falls, MA 01370-0083