ML12228A335
| ML12228A335 | |
| Person / Time | |
|---|---|
| Site: | Millstone  |
| Issue date: | 09/21/2012 |
| From: | James Kim Plant Licensing Branch 1 |
| To: | Rocheleau D Central Vermont Public Service Corporation |
| Kim J | |
| Shared Package | |
| ml12228A331 | List: |
| References | |
| TAC ME8968 | |
| Download: ML12228A335 (24) | |
Text
UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555*0001 September 21,2012 Mr. Dale A. Rocheleau Senior Vice President, General Counsel
& Corporate Secretary Central Vermont Public Service Corporation 77 Grove St.
Rutland, VT 05701
SUBJECT:
ORDER APPROVING APPLICATION REGARDING MERGER OF CENTRAL VERMONT PUBLIC SERVICE CORPORATION AND GREEN MOUNTAIN POWER CORPORATION AND CONFORMING AMENDMENT (TAC NO. ME8968)
Dear Mr. Rocheleau:
The U.S. Nuclear Regulatory Commission (NRC) has completed its review of the application dated September 9, 2011, (Agencywide Documents Access and Management System (ADAMS) Accession No. ML11256A051), as supplemented by letters dated November 4,2011 (ML11311A148), April 6, 2012 (ML12100A017), May 4,2012 (ML12128A433), June 26,2012 (ML12180A123) and July 19, 2012 (ML12205A030), filed by Central Vermont Public Service Corporation (CVPS) and Gaz Metro Limited Partnership, requesting the NRC's approval of the proposed transfer of the operating license for the Millstone Power Station, Unit 3 (MPS3), to the extent held by CVPS, which will result from the merger of CPVS and Green Mountain Power Corporation (GMP).
The enclosed Order approves the direct license transfer pursuant to Title 10 of the Code of Federal Regulations (10 CFR) 50.80, "Transfer of License," and 10 CFR 50.90, "Application for Amendment of License, Construction Permit, or Early Site Permit," and subject to the conditions described herein. It also approves the conforming amendment, which will be issued and made effective at the time the transfer is completed, with the changes indicated in Enclosure 2. is the NRC staff's safety evaluation related to the preceding actions. The NRC will place the safety evaluation in the ADAMS Publicly Available Records System Library accessible from the NRC public document room.
D. Rocheleau -2 The Order has been forwarded to the Office of the Federal Register for publication.
Sincerely, k t 1'rV.--" ?~
James Kim, Project Manager Plant Licensing Branch 1-1 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket No. 50-423
Enclosures:
- 1. Order
- 2. Conforming Amendment to NPF-49
- 3. Safety Evaluation cc w/encls: Daniel F. Stenger Hogan Lovells US LLP 555 Thirteenth Street, NW Washington, DC 20004 Thomas L. Cubbage, III Covington & Burling LLP 1201 Pennsylvania Avenue, NW Washington, DC 20004 Additional distribution via Listserv
Enclosure 1 Order ADAMS Accession Number ML12228A341
7590-01-P UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION
[NRC-2012-0044]
In the Matter of CENTRAL VERMONT PUBLIC SERVICE CORPORATION (Millstone Power Station, Unit 3) Docket No. 50-423 ORDER APPROVING APPLICATION REGARDING CORPORATE RESTRUCTURING AND CONFORMING AMENDMENT I.
Dominion Nuclear Connecticut, Inc. (DNC), Central Vermont Public Service Corporation (CVPS) and Massachusetts Municipal Wholesale Electric Company (MMWE) (collectively "the licensees" or "DNC, Inc., et al.") are the co-holders of the Renewed Facility Operating License No. NPF-49, which authorizes the possession, use and operation of Millstone Power Station, Unit 3 (MPS3). CVPS is a non-operating owner of a 1.7303% interest in MPS3. DNC is the majority owner and the licensed operator. MPS3 is located in the town of Waterford, Connecticut.
II.
By letter dated September 9, 2011, as supplemented on November 4, 2011, April 6, 2012, May 4, 2012, June 26, 2012, and July 19, 2012 (collectively, "the application"), CVPS and Gaz Metro Limited Partnership (Gaz Metro), (collectively, "the Applicants"), requested that the U.S. Nuclear Regulatory Commission (NRC), pursuant to Title 10 of the Code of Federal Regulation (10 CFR), Section 50.80, consent to the direct transfer of CVPS's 1.7303% interest
-2 in the operating license for MPS3 that would result from the merger of CVPS with Green Mountain Power Corporation (GMP).
GMP and CVPS are both wholly owned subsidiaries of Gaz Metro, as a result of the indirect transfer of CVPS's 1.7303% interest in the license for MPS3, due to the acquisition of CVPS by Gaz Metro approved by the Commission on June 15, 2012.
According to the application for approval filed by CVPS in connection with the merger of CVPS and GMP, CVPS will merge with and into GMP, with GMP being the surviving company called Green Mountain Power Corporation. GMP will continue as a minority co-owner and licensee of MPS3.
This application does not affect MMWE's ownership or ONC's ownership and operation of the facility.
Pursuant to 10 CFR 50.90, the Applicants also requested approval of a conforming license amendment for administrative purposes to reflect the change of name for the co-owner licensee on the MSP3 license from "Central Vermont Public Service Corporation" to "Green Mountain Power Corporation."
No physical changes to the MPS3 facility or operational changes are being proposed in the application.
Notice of the request for approval and opportunity for a hearing was published in the Federal Register on July 20,2012 (77 FR 42768). No comments or hearing requests were received.
Under 10 CFR 50.80, no license, or any right thereunder, shall be transferred, directly or indirectly, through transfer of control of the license, unless the U.S. Nuclear Regulatory Commission (NRC) shall give its consent in writing. Upon review of the information in the application as supplemented and other information before the Commission and relying upon the
- 3 representations and agreements in the application as supplemented, the NRC staff has determined that the proposed direct transfer of control from CVPS to GMP, as described in the application, will not affect the qualifications of the holders of the Renewed Facility Operating License No. NPF-49, and that the transfer of the license, to the extent affected by the proposed merger, is otherwise consistent with applicable provisions of law, regulations, and Orders issued by the Commission, 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 facilities 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 amendment 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 amendment will be in accordance with 10 CFR Part 51 of the Commission's regulations and all applicable requirements have been satisfied. The findings set forth above are supported by a safety evaluation (SE) dated September 21,2012.
Ill.
Accordingly, pursuant to Sections 161b, 161i, 161.0, and 184 of the Atomic Energy Act of 1954, as amended (the Act), 42 USC §§ 2201(b}, 2201(i), 2201(0), and 2234; and 10 CFR 50.80, IT IS HEREBY ORDERED that the application regarding the proposed direct license transfer is approved, subject to the following conditions:
-4
- 1. The Negation Action Plan provided to the NRC for review may not be modified in any respect concerning decision-making authority over "safety issues" as defined therein without the prior written consent of the Director, Office of Nuclear Reactor Regulation.
- 2. At least half the members of GMP's Board of Directors shall be U.S. citizens.
- 3. The Chief Executive Officer (CEO) of GMP shall be a U.S. citizen. This individual shall have the responsibility and exclusive authority to ensure and shall ensure that the business and activities of GMP with respect to the MPS3 license is at all times conducted in a manner consistent with the public health and safety and common defense and security of the United States.
- 4. The GMP Board of Directors will establish a Special Nuclear Committee (SNC) composed only of U.S. citizens, a majority of who are not officers or employees of GMP, Gaz Metro, or any other Gaz Metro subsidiaries. The SNC will report to the GMPC Board of Directors on a quarterly basis for informational purposes. The SNC will make available to the NRC for review these and any other reports regarding foreign ownership and control of nuclear operations.
- 5. Should the proposed corporate merger not be completed within 1 year from the date of this Order, this Order shall become null and void, provided, however, upon written application and good cause shown, such date may be extended by Order.
This Order is effective upon issuance.
-5 For further details with respect to this Order, see the initial application dated September 9, 2011 (Agencywide Documents Access and Management System (ADAMS)
Accession No. ML11256A051), as supplemented by letters dated November 4, 2011, April 6, 2012, May 4,2012, June 26,2012, and July 19, 2012 (ADAMS Accession Nos. (ML11311A148, M112100A017, ML12128A433, ML12180A123 and ML12205A030, respectively), and the SE dated September ...6L, 2012, which are available for public inspection at the NRC's Public Document Room (PDR), located at One White Flint North, Room 01- F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available documents created or received at the NRC are accessible electronically through ADAMS in the NRC Library at http://www.nrc.gov/reading 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 to PDR.Resource@nrc.gov.
Dated at Rockville, Maryland, this /) rSlh day of September 2012.
FOR THE NUCLEAR REGULATORY COMMISSION Eric J. Lee ,Director Office of uclear Reactor Regulation
Enclosure 2 Conforming Amendment ADAMS Accession Number ML12228A350
UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555"()001 DOMINION NUCLEAR CONNECTICUT, INC., ET AL.
DOCKET NO. 50-423 MILLSTONE POWER STATION, UNIT NO.3 AMENDMENT TO RENEWED FACILITY OPERATING LICENSE Amendment No.
Renewed License No. NPF-49
- 1. The Nuclear Regulatory Commission (the Commission) has found that:
A. The application for amendment by the applicant dated July 23, 2012, 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; B. The facility will operate in conformity with the application, the provisions of the Act, and the rules and regulations of the Commission; C. There is reasonable assurance (i) that the activities authorized by this amendment can be conducted without endangering the health and safety of the public, and (ii) that such activities will be conducted in compliance with the Commission's regulations; D. The issuance of this amendment will not be inimical to the common defense and security or to the health and safety of the public; and E. The issuance of this amendment is in accordance with 10 CFR Part 51 of the Commission's regulations and all applicable requirements have been satisfied.
- 2. Accordingly, the license is amended as indicated in the attachment to this license amendment.
-2
- 3. This license amendment is effective as of the date of issuance, and shall be implemented within 30 days of issuance.
FOR THE NUCLEAR REGULATORY COMMISSION Eric J. Leeds, Director Office of Nuclear Reactor Regulation
Attachment:
Changes to the Facility Operating License Date of Issuance:
ATTACHMENT TO LICENSE AMENDMENT NO.
RENEWED FACILITY OPERATING LICENSE NO. NPF-49 DOCKET NO. 50-423 Replace the following page of the Renewed Facility Operating License with the attached revised page. The revised page is identified by amendment number and contains marginal lines indicating the areas of change.
Remove Insert Cover page Cover page Page 3 Page 3
UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555-0001 DOMINION NUCLEAR CONNECTICUT. INC .. ET AL.(1)
DOCKET NO. 50-423 (MILLSTONE POWER STATION. UNIT NO.3)
RENEWED FACILITY OPERATING LICENSE RENEWED LICENSE NO. NPF-49
- 1. The U.S. Nuclear Regulatory Commission (the Commission) having previolJsly made the findings set forth in License No. NPF-49 issued on January 31, 1986 has now found that:
A. The application to renew License NPF-49 filed by Dominion Nuclear Connecticut, Inc. (ON C), 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 1, and all required notifications to other agencies or bodies have been duly made; B. Construction of the Millstone Power Station, Unit No.3 (the facility) has been substantially completed in conformity with Construction Permit No. CPPR-113 and the application, as amended, the provisions of the Act, and the regulations of the Commission; C. Actions have been identified and have been or will be taken with respect to:
(1) managing the effects of aging during the period of extended operation on the functionality of structures and components that have been identified to require review under 10 CFR 54.21(a)(1). and (2) time-limited aging analyses that have been identified to require review under 10 CFR 54.21 (c), such that there is reasonable assurance that the activities authorized by the renewed license will continue to be conducted in accordance with the current licensing basis, as defined in 10 CFR 54.3, for the facility, and that any changes made to the facility's current licensing basis in order to comply with 10 CFR 54.29(a) are in accordance with the Act and the Commission's regulations; (1) Dominion Nuclear Connecticut, Inc., et al. (the licensees) consists of Dominion Nuclear Connecticut, Inc., Green Mountain Power Corporation and Massachusetts Municipal Wholesale Electric Company. Dominion Nuclear Connecticut, Inc. is authorized to act as the agent and representative for Green Mountain Power Corporation and Massachusetts Municipal Wholesale Electric Company and has exclusive responsibility and control over the physical operation and maintenance of the facility.
Renewed License No. NPF-49 Amendment No.
-3 B. Subject to the conditions and requirements incorporated herein, the Commission hereby licenses; (1) ONC, pursuant to Section 103 of the Act and 10 CFR Part 50, to possess, use and operate the facility at the designated location in New London County, Connecticut in accordance with the procedures and limitations set forth in this license; Green Mountain Power Corporation and Massachusetts Municipal Wholesale Electric Company, pursuant to the Act and 10 CFR Part 50, to possess the facility at the designated location in New London County, Connecticut in accordance with the procedures and limitations set forth in this renewed operating license; (2) ONC, pursuant to the Act and 10 CFR Part 70, to receive, possess and use at any time special nuclear material as reactor fuel, in accordance with the limitations for storage and amounts required for reactor operation, as described in the Final Safety Analysis Report, as supplemented and amended; (3) ONC, pursuant to the Act and 10 CFR Parts 30, 40, and 70 to receive, possess, and use at any time any byproduct, source, and special nuclear material as sealed neutron sources for reactor startup, sealed sources for reactor instrumentation and radiation monitoring equipment calibration, and as fission detectors in amounts as required; (4) ONC, pursuant to the Act and 10 CFR Parts 30, 40, and 70 to receive, possess, and use in amounts as required any byproduct, source, or special nuclear material without restriction to chemical or physical form for sample analysis or instrument calibration or associated with radioactive apparatus or components; and (5) ONC, pursuant to the Act and 10 CFR Parts 30, 40, and 70 to possess, but not separate, such byproducts and special nuclear materials as may be produced by the operations of the facility.
C. This renewed operating license shall be deemed to contain and is subject to the conditions specified in the Commission's regulations set forth in 10 CFR Chapter 1 and is subject to all applicable provisions of the Act and to the rules, regulations, and orders of the Commission now or hereafter in effect; and is subject to the additional conditions specified or incorporated below:
(1) Maximum Power Level ONC is authorized to operate the facility at reactor core power levels not in excess of 3650 megawatts thermal (100 percent rated power) in accordance with the conditions specified herein.
Renewed License No. NPF-49 Amendment No. ~,
Enclosure 3 Safety Evaluation ADAMS Accession Number ML12228A393
UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555-0001 SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION APPLICATION FOR THE DIRECT TRANSFER OF CENTRAL VERMONT PUBLIC SERVICE CORPORATION'S INTEREST IN THE LICENSE FOR MILLSTONE POWER STATION, UNIT 3; DOCKET NO. 50-423 TO GREEN MOUNTAIN POWER CORPORATION
1.0 INTRODUCTION
By application dated September 9, 2011 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML11256A051), as supplemented by letters dated November 4,2011 (ML11311A148), April 6, 2012 (ML12100A017), May 4,2012 (ML12128A433), June 26,2012 (ML12180A123), and July 19, 2012 (ML12205A030),
(collectively, the application), Central Vermont Public Service Corporation (CVPS) and Gaz Metro Limited Partnership (Gaz Metro), (collectively, the Applicants), requested that the U.S.
Nuclear Regulatory Commission (NRC) consent, pursuant to Title 10 of the Code of Federal Regulation (10 CFR), Section 50.80, to the indirect and direct transfers of control of CVPS's 1.7303% interest in the license for Millstone Power Station, Unit 3 (MPS 3), resulting from the acquisition of CVPS by Gaz Metro (first merger) and a subsequent restructuring of Gaz Metro in which CVPS will be consolidated with Gaz Metro's existing U.S. subsidiary Green Mountain Power Corporation (GMP), respectively. The NRC consented to the first merger by letter and Order dated June 15, 2012 (ML121300466). This safety evaluation relates to the second merger only.
MPS3 is a 1227 MWe pressurized-water reactor, located approximately 3 miles west-southwest of New London, CT in Waterford, CT. The principal owner and operator of MPS3 is Dominion Nuclear Connecticut, Inc., which owns 93.4707%. Massachusetts Municipal Wholesale Electric Company owns the remaining 4.7990% of the license. They are not involved in this transfer.
2.0 BACKGROUND
On September 9, 2011, CVPS and Gaz Metro submitted an application requesting NRC consent, pursuant to 10 CFR 50.80, to two related proposed license transfers: (1) the indirect transfer of control of CVPS's 1.7303% interest in the license for MPS3 resulting from the acquisition of CVPS by Gaz Metro (first merger); and (2) the direct transfer of control of CVPS's interest in the license for MPS3 resulting from a subsequent restructuring in which CVPS will be consolidated with Gaz Metro's existing U.S. subsidiary GMP (second merger).
-2 As part of the acceptance review process for the application, the NRC informed the applicants that it would review the first merger, but defer its review of the second merger until additional necessary documentation was provided by the applicants. By Order dated June 15, 2012, the NRC approved the indirect license transfer resulting from the first merger (ML121300466). On June 26, 2012, the applicants provided the necessary supplemental information to the NRC to complete the review of the proposed direct transfer.
According to the application, Gaz Metro is a Canadian energy company and Quebec's leading natural gas distributor with over $3.6 billion in assets. Gaz Metro, in turn, is owned by Valener Inc., a publicly owned entity, Gaz Metro Inc., and Gaz Metro Plus Inc., a wholly owned subsidiary of Gaz Metro Inc. Gaz Metro Inc., in turn, is owned by Noverco Inc. Noverco Inc., in turn, is owned by Trencap L.P. and IPL System Inc. Trencap L.P., in turn, is owned by Caisse de depot et placement du Quebec and Capital d'Amerique CDPZ Inc. IPL System is owned by Enbridge Inc. CVPS is a Vermont corporation and the largest electric utility in Vermont. CVPS engages in the purchase, production, transmission, distribution, and sale of electricity and is the holder of a 1.7303% interest in MPS3. In the first merger, CVPS became a wholly owned subsidiary of Gaz Metro.
The second merger will result from a restructuring of Gaz Metro where CVPS will merge with and into GMP, a Vermont corporation and a regulated electric utility that transmits, distributes, and sells electricity and utility construction services in Vermont. Green Mountain Power will be the surviving corporation. The merger will result in the direct transfer of control of the MPS3 operating license, to the extent held by CVPS (1.7303%), to GMP. All obligations and duties of CVPS will become the obligations and duties of GMP and GMP will succeed to all of CVPS's financial obligations regarding decommissioning, operation, and maintenance.
3.0 REGULATORY EVALUATION
The applicant's request for approval of the direct transfer of the license listed above and discussed in this safety evaluation (SE) is made pursuant to 10 CFR 50.80.
Section 50.80(a) of 10 CFR states:
No license for a production or utilization facility, or any right thereunder, shall be transferred, assigned, or in any manner disposed of, either voluntarily or involuntarily, directly or indirectly, through transfer of control of the license to any person, unless the Commission gives its consent in writing.
In addition, the requirements of 10 CFR 50.80(b) and 10 CFR 50.80(c) apply. Section 50.80(b) states that an application for a license transfer shall include as much information described in 10 CFR 50.33, "Contents of Applications; General Information," and 10 CFR 50.34, "Contents of Applications; Technical Information," with respect "to the identity and technical and financial qualifications of the proposed transferee as would be required by those sections if the applications were for an initial license."
Section 50.80(c) states that:
[T]he Commission will approve an application for the transfer of a license, if the Commission determines: (1) that the proposed transferee is qualified to be the
- 3 holder of the license; and (2) that transfer of the license is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto.
4.0 FINANCIAL QUALIFICATION The regulation at 10 CFR 50.33(f) provides that each application shall state the following:
Except for an electric utility applicant for a license to operate a utilization facility of the type describe in § 50.21 (b) or § 50.22, [an application shall state]
information sufficient to demonstrate to the Commission the financial qualification of the applicant to carry out, in accordance with regulations in this chapter, the activities for which the permit or license is sought.
The regulation at 10 CFR 50.2, "Definitions," states, in part, that an electric utility is the following:
Any entity that generates or distributes electricity and which recovers the cost of this electricity, either directly or indirectly, through rates established by the entity itself or by a separate regulatory authority.
Based upon information provided in the application, the staff finds that, according to the definition in 10 CFR 50.2, GMP will be a utility after consummation of the proposed merger of CVPS and GMP. As such, pursuant to 10 CFR 50.33(f), a review of financial qualifications is not warranted in this evaluation.
5.0 DECOMMISSIONING FUNDING
The NRC has determined that the requirements to provide reasonable assurance of decommissioning funding are necessary to ensure the adequate protection of public health and safety. The regulation at 10 CFR 50.33(k) requires that an application for an operating license for a utilization facility shall state information indicating how reasonable assurance will be provided that funds will be available to decommission the facility.
The regulation in 10 CFR 50.75(b) requires the following:
Each power reactor applicant for or holder of an operating license ... for a production or utilization facility of the type and power level specified in paragraph (c) of this section shall submit a decommissioning report, as required by
§ 50.33(k).
In accordance with 10 CFR 50.75(f)(1), on March 29,2011, CVPS reported information on the status of decommissioning funding for MPS3 as of December 31,2010, to the NRC in the decommissioning funding status (DFS) report (ADAMS Accession No. ML110900375),
supplemented by a letter dated June 14,2011 (ADAMS Accession No. ML111810155).
The NRC staff documented its review of the operating plants' DFS reports in SECY-11-0149, "Summary Findings Resulting from the Staff Review of the 2010 Decommissioning Funding Status Reports for Operating Power Reactor Licensees," dated October 26,2011 (ADAMS Accession No. ML112620046).
- 4 According to the application and the DFS report for MPS3, dated March 29, 2011, CVPS's minimum financial assurance obligation as of December 31, 2010, was $8.3 million, which represents its 1.7303% pro rata share of the total NRC minimum financial assurance amount, pursuant to 10 CFR 50.75(b) and 10 CFR 50.75(c), of $482 million (total minimum amount for MSP3). CVPS also indicated that the value of its funds held in external decommissioning trusts, as of December 31,2010, was $5.7 million.
The NRC staff verified the calculations that the applicant provided in the aforementioned DFS report for MPS3 as of December 31,2010. Based on its review of the 2010 DFS report, the NRC staff determined that adequate decommissioning funding assurance was provided for MPS3 in accordance with NRC regulations.
Additionally, according to the application, the proposed transaction will not affect CVPS's current decommissioning funding arrangements. As a 1.7303% co-owner of MPS3, CVPS is responsible for its share of the nuclear decommissioning funding assurance obligation for MPS3. According to Section 3.2 of the second merger agreement, all obligations and duties of CVPS shall attach to GMP as a result of the second merger. GMP will, thus, assume responsibility for CVPS's current financial obligation with respect to payment of its proportionate share of the decommissioning funding assurance obligations for MPS3. GMP will continue to provide financial assurance for the decommissioning of MPS3 in accordance with 10 CFR 50.75, "Reporting and Recordkeeping for Decommissioning Planning."
Based on the discussion above, the NRC staff concludes that CVPS has complied with the requirements of 10 CFR 50.75 to provide decommissioning funding assurance for MPS3 and that, following the proposed merger, GMP's ability to provide decommissioning funding assurance for MPS3 in the future will not be affected.
6.0 TECHNICAL QUALIFICATIONS As stated in the application dated September 9, 2011, CVPS does not have any operating authority under the NRC operating license for MPS3. Accordingly, the technical qualifications of CVPS will not be reviewed in this (SE). In any event, the transactions will have no impact on the operation, management, or control of any licensed facility, and no changes in any licensed activities have been proposed.
7.0 ANTITRUST REVIEW
The Atomic Energy Act of 1954, as amended (AEA), does not require or authorize antitrust reviews of post-operating license transfer applications (see also Kansas Gas and Electric Co.,
et al., Wolf Creek Generating Station, Unit 1, CLI-99-19, 49 NRC 441 (1999>>. The application here postdates the issuance of the operating licenses for the units under consideration in this (SE) and, therefore, no antitrust review is required or authorized. The subject license does not contain any antitrust conditions. Therefore, there are no antitrust issues to be considered in connection with the conforming license amendments.
8.0 FOREIGN OWNERSHIP, CONTROL, OR DOMINATION Sections 103d and 104d of the AEA provide, in relevant part, that no license may be issued to the following:
-5 Any corporation or other entity if the Commission knows or has reason to believe it is owned, controlled, or dominated by an alien, a foreign corporation or a foreign government. In any event, no license may be issued to any person within the United States if, in the opinion of the Commission, the issue of a license to such person would be inimical to the common defense and security or to the health and safety of the public.
The NRC's regulation in 10 CFR 50.38, "Ineligibility of Certain Applicants," is the regulatory provision that implements the statute. The NRC evaluated the application consistent with the guidance provided in the Standard Review Plan, "Foreign Ownership, Control, or Domination of Applicants for Reactor Licenses," dated June 1999, (hereafter referred to as the "SRP on FOCD"), to determine whether the applicant is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government. (64 FR 52357-52359)
The NRC's position on FOCD, outlined in the SRP, states that "the foreign control prohibition should be given an orientation toward safeguarding the national defense and security." Further, the SRP on FOCD outlines how the effects of foreign ownership may be mitigated through implementation of a "negation action plan" to ensure that any foreign interest is effectively denied control or domination over the licensee.
As previously stated, Canadian limited partnership Gaz Metro, through a U.S. subsidiary, Northern New England Energy Corporation, holds a 100% ownership interest in both CVPS and GMP. As a result of the second merger, Gaz Metro will continue to hold a 100% interest in the combined company. The application states that, because GMP will own only a minority nonoperational interest in MPS3, it is not expected that Gaz Metro, as an indirect foreign parent company of GMP, will be able to exercise foreign control or domination within the meaning of the AEA and 10 CFR 50.38 over the subject license. However, in an abundance of caution, the applicants have included in the bylaws of the combined company the Negation Action Plan (NAP) that the NRC approved in its June 15, 2012, Order for the first merger.
The application further states that the NAP is deSigned to assure continued U.S. control on all matters related to the combined company's nuclear ownership interests as required under the AEA and NRC regulations. The NAP provides for the establishment of a special nuclear committee (SNC) of the GMP board of directors. The SNC will consist of three GMP Board members who are U.S. citizens, with a majority of the SNC's members being independent directors. The provisions of the NAP are reflected in the amended and restated bylaws of GMP (Bylaws), which were submitted to the NRC in the letter dated July 19, 2012 (ADAMS Accession No. ML12205A030).
Furthermore, in the July 19, 2012, letter, the applicants identified items they believed were inadvertently included in the NRC's Order, dated June 15, 2012, approving the first merger:
(1) Condition 3 of the June 15, 2012, Order provides that "[t]he Chief Executive Officer (CEO), Chief Nuclear Officer (CNO), and Chairman of the Board of Directors of CVPS shall be U.S. citizens." The Applicants state that the Chairman of the Board and the CEO for CVPS following the First Merger are U.S. citizens. However, as a non-operating co-owner of MPS3, CVPS does not have a CNO. Further, the Applicants state that they had indicated in a May 4,2012, supplement that Mr. Tessier, a Canadian citizen, would be Chairman of the Board of CVPS following the First Merger. The Applicants
- 6 further state that with a SNC established to prevent foreign control, they had not proposed to limit the office of Chairman to a U.S citizen. The Applicants request that the NRC amend Condition 3 of the June 15, 2012, Order by: (1) removing CNO from the list of positions requiring U.S. citizenship, due to inapplicability, and (2) removing the citizenship limitation on the Chairman, in view of the existence of the SNC.
The NRC has evaluated this request and submits the following:
With respect to the CNO position, the citizenship requirement was knowingly maintained in the Condition. The staff was forward-thinking in its review of the First Merger and implemented a Condition that, while in part not presently applicable, could be warranted in the future should CVPS's business position change within the MPS3 co-ownership agreement and a CNO position formed.
After reviewing the Applicants' request, the NRC agrees to amend Condition 3 of the June 15, 2012, Order by removing the CNO position from the list with the understanding that, should the CNO position be introduced in the GMP executive structure, GMP is required to amend the GMP Bylaws and NAP accordingly, which requires NRC notification and approval pursuant to Condition 1 of the Order.
With respect to the position of Chairman, the NRC maintains that the negation of foreign ownership, control, and domination, at all levels, is essential in preserving the safety and security of U.S. nuclear interests, thus the citizenship requirement was knowingly maintained at the Chairman level.
After reviewing the Applicants' request to amend the citizenship requirement for Chairman, performing an open-source analysis of the proposed Chairman, Mr. Tessier, and given the proposed 1.7303% ownership interest involved and the non-operating status of GMP, the NRC agrees to amend Condition 3 of the June 15, 2012, Order by removing the citizenship limitation on the Chairman of the Board.
(2) Condition 4 of the June 15, 2012, Order addressing the SNC states that the SNC will be "composed of U.S. citizens, a majority of whom are not officers, directors, or employees of CVPS, Gaz Metro, or any Gaz Metro subsidiaries."
This condition is intended to reflect the Applicants' proposal that a majority of the SNC would be independent directors of CVPS, meaning that those directors are not officers or employees of CVPS, Gaz Metro, or its subsidiaries. The word "directors" was included in Condition 4, which is contradictory to Condition 1 which maintains that the SNC "will consist of three Board members who are U.S. citizens. The Applicants have implemented the SNC provisions of the NAP as delineated in the (SE) of the proposed First Merger. The Applicants request that the NRC amend Condition 4 of the June 15, 2012, Order by removing the word "directors" to eliminate confusion.
-7 The NRC has evaluated this request and agrees to amend Condition 4 of the NAP for the Second Merger accordingly.
The NRC Staff reviewed the information provided in the application regarding FOCD matters, including the NAP and additional information provided in letters dated April 6, 2012 (ADAMS Accession No. ML12100A017), May 4,2012 (ADAMS Accession No. ML12128A433), June 26, 2012 (ADAMS Accession No. ML12180A123), and July 19, 2012 (ADAMS Accession No. ML 1220SA030). Based on this review and the implementation of the NAP as reviewed, the staff finds that the licensee will not be foreign owned. controlled, or dominated, if the following conditions are imposed:
(a) The Negation Action Plan provided to the NRC for review may not be modified in any respect concerning decision-making 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 GMP's Board of Directors shall be U.S. citizens.
(c) The Chief Executive Officer (CEO) of GMP shall be a U.S. citizen. This individual shall have the responsibility and exclusive authority to ensure and shall ensure that the business and activities of GMP with respect to the MPS3 license is at all times conducted in a manner consistent with the public health and safety and common defense and security of the United States.
(d) The GMP Board of Directors will establish a Special Nuclear Committee (SNC) composed solely of U.S. citizens, a majority of who are not officers or employees of GMP, Gaz Metro, or any other Gaz Metro subsidiaries. The SNC will report to the GMP Board of Directors on a quarterly basis for informational purposes. The SNC will make available to the NRC for review these and any other reports regarding foreign ownership and control of nuclear operations.
9.0 NUCLEAR INSURANCE
AND INDEMNITY According to the application, the proposed direct transfer of control of the license would not affect the existing Price-Anderson indemnity agreements and the required nuclear property damage insurance under 10 CFR SO.S4(w) and nuclear energy liability insurance required under Section 170 of the AEA and 10 CFR Part 140, "Financial Protection Requirements and Indemnity Agreements."
Also, the NRC has no reason to believe that the proposed merger will affect the ability of GMP to assume and meet CVPS's financial obligation for its pro rata share of obligations for retrospective premiums for MPS3.
Therefore. in consideration of the foregoing, the NRC concludes that the direct transfer of control of 1.7303% of the license held by CVPS to GMP for MPS3 will have no adverse impact on the ability to provide required nuclear insurance and indemnity coverage and the ability to meet nuclear insurance obligations.
- 8 10.0 CONFORMING AMENDMENT 10.1 Introduction As previously stated, the application requests approval of a conforming license amendment for administrative purposes to reflect the change of name for the co-owner licensee on the MSP3 license from "Central Vermont Public Service Corporation" to "Green Mountain Power Corporation."
10.2 Discussion The proposed changes to the operating modify the license to reflect the approved license transfer actions, which are subject to certain conditions set forth in the Orders approving the transfer, and that were identified and discussed earlier in this SE. The amendment involves no safety questions and are administrative in nature. Accordingly, the proposed amendment is acceptable.
10.3 State Consultation In accordance with the Commission's regulations, the State official from Connecticut was notified of the proposed issuance of the amendment. The State official had no comments.
10.4 Conclusions with Respect to the Conforming Amendments The Commission has concluded, based on the considerations discussed above, that: (1) there is reasonable assurance that the health and safety of the public will not be endangered by operation in the proposed manner; (2) there is reasonable assurance that such activities will be conducted in compliance with the Commission's regulations; and (3) the issuance of the amendment will not be inimical to the common defense and security or to the health and safety of the public.
11.0 ENVIRONMENTAL CONSIDERATION
S The subject application is for approval of the transfer of license issued by the NRC and approval of conforming amendment. Accordingly, the actions involved meet the eligibility criteria for categorical exclusion set forth in 10 CFR 51.22(c)(21). Pursuant to 10 CFR 51.22(b),
no environmental impact statement or environmental assessment need be prepared in connection with approval of the application.
12.0 CONCLUSION
In view of the foregoing, the NRC staff finds that GMP is qualified to be a holder of the license for the unit reviewed herein, and that the direct transfer of the license is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto, subject to the conditions set forth above.
Principal Contributor: Shawn Harwell Date: September 21, 2012
D. Rocheleau - 2 The Order has been forwarded to the Office of the Federal Register for publication.
Sincerely, IRA!
James Kim, Project Manager Plant Licensing Branch 1-1 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket No. 50-423
Enclosures:
- 1. Order
- 2. Conforming Amendment to NPF-49
- 3. Safety Evaluation cc w/encls: Daniel F. Stenger Hogan Lovells US LLP 555 Thirteenth Street, NW Washington, DC 20004 Thomas L. Cubbage, III Covington & Burling LLP 1201 Pennsylvania Avenue, NW Washington, DC 20004 Additional distribution via Listserv DISTRIBUTION:
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