ML12123A703
| ML12123A703 | |
| Person / Time | |
|---|---|
| Site: | Beaver Valley, Perry |
| Issue date: | 05/17/2012 |
| From: | Christopher Regan Division of Inspection and Regional Support |
| To: | Meena Khanna, Jacob Zimmerman Plant Licensing Branch 1, Plant Licensing Branch III |
| Dusaniwskyj M | |
| References | |
| TAC ME8351, TAC ME8353 | |
| Download: ML12123A703 (4) | |
Text
May 17, 2012 MEMORANDUM TO:
Meena K. Khanna, Chief Plant Licensing Branch I-2 Division of Operating Licensing Office of Nuclear Reactor Regulation Jacob I. Zimmerman, Chief Plant Licensing Branch III-2 Division of Operating Licensing Office of Nuclear Reactor Regulation FROM:
Christopher M. Regan, Chief /RA/
Financial Analysis and International Projects Branch Division of Inspection and Regional Support Office of Nuclear Reactor Regulation
SUBJECT:
SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION ANNUAL FINANCIAL TEST FOR A PARENT COMPANY GUARANTEE FIRSTENERGY NUCLEAR OPERATING COMPANY BEAVER VALLEY POWER STATION, UNIT 1; DOCKET NO. DPR-66 AND PERRY NUCLEAR POWER PLANT; DOCKET NO. NPF-58 (TACs ME8351 & ME8353)
Enclosed is the evaluation of the Financial Test for a Parent Company Guarantee in use for Beaver Valley Power Station, Unit 1 and Perry Nuclear Power Plant. The Safety Evaluation is in response to the Division of Operating Licensing request to evaluate the proposed Parent Company Guarantee by FirstEnergy Nuclear Operating Company.
This completes the Financial Analysis and International Projects Branchs review effort under the above TAC numbers which were dedicated towards this task which was initiated by the March 30, 2012, letter from FirstEnergy Nuclear Operating Company.
Enclosure:
As stated CONTACT: Michael A. Dusaniwskyj, NRR/DIRS 301-415-1260
ML12123A703 OFFICE NRR/DIRS/IFIB NRR/DIRS/IFIB: BC NAME MDusaniwskyj CRegan DATE 5/7/2012 5/17/2012 ENCLOSURE SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION ANNUAL FINANCIAL TEST FOR A PARENT COMPANY GUARANTEE FIRSTENERGY NUCLEAR OPERATING COMPANY BEAVER VALLEY POWER STATION, UNIT 1; DOCKET NO. DPR-66 PERRY NUCLEAR POWER PLANT; DOCKET NO. NPF-58
1.0 INTRODUCTION
By letter dated March 30, 2012, (Agencywide Documents Access and Management System)
Accession No. ML12090A494) FirstEnergy Nuclear Operating Company (FENOC) provided the necessary data to perform the annual financial test in support of its Parent Company Guarantee (PCG) in accordance with Title 10 of the Code of Federal Regulations (10 CFR) Part 30, Appendix A, Criteria Relating to Use of Financial Tests and Parent Company Guarantees for Providing Reasonable Assurance of Funds for Decommissioning. In addition, 10 CFR Part 30, Appendix A (C) states that After the initial financial test, the parent company must repeat the passage of the test within 90 days after the close of each succeeding fiscal year.1 This financial test provides assurance that FENOC can continue maintaining a PCG in supporting decommissioning funding assurance for Beaver Valley Power Station, Unit 1 (Beaver Valley) and Perry Nuclear Power Station (Perry). An original $15 million PCG helped provide decommissioning funding assurance towards the 2011 Biennial Decommissioning Funding Report (dated March 31, 2011), in accordance with 10 CFR 50.75(f)(2). In a June 24, 2011 letter, (ML111751678) FENOC voluntarily requested that the PCG be increased to $95 million.
2.0 ANALYSIS In its March 30, 2012 submittal, FENOC chose the alternative financial test option stated in Section II Paragraph A.2 of 10 CFR Part 30 and provided all the necessary data to perform the financial test. NRC staff did a partial check of the provided data against FENOCs Securities Exchange Commission (SEC) 10K Report for 2011 which was filed with the SEC on February 28, 2012 (found at www.FirstEnergy.com).
Fundamental to this financial test is the calculation of Tangible Net Worth. NRC staff found that FENOC included Beaver Valley Decommissioning Liability of $206 million and Perry Decommissioning Liability of $261 million towards the calculation of Tangible Net Worth of
$5,941 million. NRC staff believes that the inclusion of decommissioning liabilities double 1 10 CFR 50.75(e)(iii)(B) A parent company guarantee of funds for decommissioning costs based on a financial test may be used if the guarantee and test are as contained in appendix A to 10 CFR part 30 counts the value of the liabilities and would over state the Tangible Net Worth. NRC staff recalculated Tangible Net Worth without including both decommissioning liabilities and, therefore, the Tangible Net Worth was recalculated to $5,474 million.
3.0 CONCLUSION
NRC staff finds that FENOC has complied with the general requirements of 10 CFR Part 30, Appendix A, and specifically with the requirements of 10 CFR Part 30 Appendix A (C). The NRC staff also finds that FENOC has submitted the necessary data within 90 days after the close of this succeeding fiscal year. FENOC successfully repeated the passage of the financial test with the recalculated Tangible Net Worth of $5,474 million, which is in support of the $95 million PCG used towards Beaver Valley and Perry decommissioning funding assurance.
Specifically, Tangible Net Worth of $5,474 million is greater than six times the Parent Company Guarantee of $95 million.
Principal Contributor: Michael A. Dusaniwskyj Date: May 17, 2012