ML12311A023
| ML12311A023 | |
| Person / Time | |
|---|---|
| Site: | Palo Verde  |
| Issue date: | 10/24/2012 |
| From: | Sanchez L PNM Resources |
| To: | Document Control Desk, Office of Nuclear Reactor Regulation |
| References | |
| Download: ML12311A023 (5) | |
Text
October 24, 2012 Certified Mail - Return Receipt Requested U.S. Nuclear Regulatory Commission Attention: Document Control Desk Washington, DC 20555 Sale and Leaseback Transaction by Public Service Company of New Mexico NRC Docket No. STN 50-529 Palo Verde Nuclear Generating Station, Unit 2 Ladies and Gentlemen:
The purpose of this letter is to provide prior written notification to the Nuclear Regulatory Commission (the "Commission") of the proposed transfer of an equity interest in a sale and leaseback transaction that was the subject of a license amendment in the above docket.
The proposed transfer of the equity interest would be from Cypress PV Partnership ("Cypress")
to its direct wholly-owned subsidiary Cypress Verde LLC (the "Transferee"), none of which is affiliated with Public Service Company of New Mexico ("PNM"). Upon the transfer, the Transferee will own an equity interest, through an existing owner trust, of a portion of the interest in the Palo Verde Nuclear Generating Station ("PVNGS") Unit 2, which was the subject of a sale and leaseback transaction in 1986 that was approved by the Commission.
Background. In 1986, PNM proposed to enter into the sale and leaseback transaction relating to PVNGS Unit 2. By letter dated August 12, 1986, the Commission issued Amendment No. 2 to Facility Operating License NPF-51 (Palo Verde Unit 2), approving the Unit 2 sale and leaseback transactions, subject to 10 C.F.R. §50.81 and the conditions set forth in such Amendment. Currently, Cypress holds (through the existing owner trust structure) a 1.36 percent undivided ownership interest in Unit 2.
Subject of this Notice. Cypress' 1.36 percent undivided ownership interest in Unit 2 is the subject of this notice (the "Subject Interest"). With respect to another (unrelated) equity interest transfer in 2007, Mike Markley of the Commission Staff advised PNM by letter dated October 18, 2007 (TAC NOS. MD6791) that prior written notice to the Commission is required for the transfer of an equity interest in a PVNGS sale and leaseback transaction from one party to another, even if the terms of the sale and leaseback remain unchanged. Notably, this is a prior written notice requirement and not a Commission approval requirement. This point was clarified4koD!
in an e-mail from Randy Hall in connection with the 2010 transfer of an undivided ownership interest in Unit 1 from Cypress to another party. Mr. Hall, in an e-mail dated November 17, 2010, explained that the operating license condition to provide prior written notice to the Commission is satisfied by the delivery to the Commission of the notice letter.
Cypress has notified PNM that Cypress proposes to transfer the Subject Interest to the Transferee and, in connection therewith, the Transferee will execute an assignment and assumption agreement for the Subject Interest, pursuant to which the Transferee will assume the rights and obligations of Cypress under the existing applicable PVNGS sale and leaseback transaction documents and will otherwise comply with the transaction documents.
Cypress has further notified PNM that the parties plan to close the proposed transfer on or about December 5, 2012, and it has therefore requested that PNM provide this advance written notice to the Commission with respect to the transfer. Cypress has represented that the proposed transfer will be made in a manner that is specifically permitted under the sale and leaseback transaction as it was originally approved by the Commission. The current "owner trustee" for the sale and leaseback transaction, U.S. Bank National Association, will remain unchanged, and the terms of the lease will remain unchanged.
Please note that an affiliate of the proposed Transferee, Cypress Second PV Partnership, holds (through a similar owner trust structure) a 1.1333333 percent undivided ownership interest in Unit 2 (which interest in Unit 2 is not the subject of this notice).
We have attached for your reference (marked as "Attachment A") a information about the Transferee and its ownership structure and management, as forwarded to us by counsel to the Transferee.
Prior Notice. Consistent with the explanation provided by Mr. Hall in 2010 noted above, we are not seeking any kind of review or approval from the Commission.
The license requirement with which we are complying simply requires prior notice in writing to the Commission. Accordingly, the signed "Return Receipt" confirming the Certified Mail delivery of this notice to the Commission will be used by the parties as confirmation of compliance with the prior written notice requirement.
We are sending informational copies of this notice by e-mail to Lauren Gibson, who we understand is the current Project Manager, as well as Randy Hall, who was copied on prior notices relating to the transfers of equity interests. If you have any questions, please do not hesitate to contact the undersigned at (505) 241-4941. Again, as noted above, Cypress and the Transferee plan to close the transaction on or about December 5, 2012.
Sincerely, Leonard D. Sanchez Associate General Counsel PNM Resources, Inc.
Attachment cc:
E-Mail Office of Nuclear Reactor Regulation Division of Operating Reactor Licensing Plant Licensing Branch IV Attention:
John R. Hall, Senior Project Manager (Randy.Hall@nrc.gov)
Lauren Gibson, Project Manager (Lauren.Gibson@nrc.gov)
Arizona Public Service Company Attention:
Robert Roehler (Robert.Roehler@aps.com)
David Falck, Esq. (david.falk@pinnaclewest.com)
Michael Green, Esq. (michael.green@pirmfaclewest.com)
About the Assignee-- Cypress Verde LLC The assignee of the owner participation interest will be Cypress Verde LLC, a California limited liability company, which Is managed by Cypress Equipment Management Corporation V, a California corporation
("CEMC V').
Cypress Verde LLC has one member, Cypress PV Partnership, a California general partnership, which has two general partners, Cypress PV-A, LLC and Cypress PV-B, LLC, each a California limited liability company managed by CEMC V. The members of Cypress PV-A, LLC and Cypress PV-B, LLC are various Cypress Funds, which are themselves California limited liability companies. The membership of each of Cypress PV-A, LLC and Cypress PV-B, LLC is listed below, together with each member's initial capital contribution and the name of each member's manager:
Members of Cypress PV-A, LLC Capital Member Name Contribution Manager of Member Cypress Equipment Fund 14, LLC
$1,057,680.00 Cypress Equipment Management
_Corporation IV Cypress Equipment Fund 15, LLC
$10,047,960.00 Cypress Equipment Management CpesqU..!pmen______Fund__15, L7Corporation IV Cypress Equipment Fund 16, LLC
$9,254,700.00 Cypress Equipment Management Corporation IV Cypress Equipment Fund 17, LLC
$6,081,660.0*0 Cypress Equipment Management Corporation V Total Capital Contributions
$26,442,000.001 Members of Cypress PV-B, LLC Capital Member Name Contribution Manager of Member Cypress Income Fund IV, LLC
$976,320.00 Cypress Equipment Management Cypress Income Fund VI, LLC
$488,160.00 Cypress Equipment Management Corporation IV Cypress Income Fund VII, LLC
$7,078,320.00 Cypress Equipment Management Cypress Income Fund 8, LLC
$7,664,112.00 Cypress Equipment Management Corporation V Cypress Equipment Management Cypress Income Fund 9, LLC
$7,810,560.00 Cypress E
Corporation V Cypress Participation Fund, LLC
$390,528.00 Cypress Equipment Management Corporation IV Total Capital Contributions
$24,408,000.00,
Each of the Cypress Funds is made up of fewer than 500 individual Investors. Non-US ownership interests In any of the Cypress Funds are de minimus. All of the Cypress Funds are managed by affiliates of Cypress Financial Corporation and the manager of each Fund has sole and absolute authority with respect to the investment and other decisions made by each Fund, subject only to certain limitations spelled out In each Cypress Fund's Private Placement Memorandum. Investors In Cypress Funds have no participation In the management of the Funds.
Ultimate management authority for Cypress Financial Corporation and each of the managers of the Cypress Funds rests with Mr. Peter E. Metzner, the President of each of those managers. Mr. Metzner has more than 25 years of experience In the leasing and structured finance Industry, with particular expertise in a broad range of energy and project finance. He began his finance career with GE Capital where he was Vice President, Leasing and Project Finance, followed by being a Principal at Babcock &
Brown, and Region Manager for Centre Group, a unit of Zurich Financial Services. He also was the founder and principal of Golden Gate Power Funding, L.L.C. Mr. Metzner received his bachelor's degree (00169061)
ATTACHMENT A
in Business Administration from University of Southern California in 1975 and his MBA In Finance from San Francisco State University in 1978. Cypress specializes in purchasing secondary market equipment leasing transactions from Institutional'lessors. Acquisitions are made on behalf of Cypress managed investment programs and for Cypress' own account,
{00169061)