Text

Request for Approval of Indirect Transfer of Control of Licenses
	ML13014A007
Person / Time
Site:	Zion File:ZionSolutions icon.png
Issue date:	01/10/2013
From:	Daly P; ZionSolutions
To:	; Document Control Desk, NRC/FSME
References
	ZS-2013-0016
	Download: ML13014A007 (49)
	v • d • e

ZIONSOLUTIONSLW 10 CFR 50.80 10 CFR 72.50(a)

January 10, 2013 ZS-2013-0016 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, DC 20555-0001 Zion Nuclear Power Station, Units I and 2 Facility Operating License Nos. DPR-39 and DPR-48 NRC Docket Nos. 50-295 and 50-304

Subject:

Request for Approval of Indirect Transfer of Control of Licenses In accordance with Section 184 of the Atomic Energy Act and 10 CFR 50.80, ZionSolutions, LLC ("ZS") hereby submits the enclosed application ("Application") requesting that the U.S. Nuclear Regulatory Commission ("NRC") consent to the indirect transfer of control of Facility Operating License Nos. DPR-39 and DPR-48 (the "ZNPS Licenses") for the Zion Nuclear Power Station, Units I and 2 ("ZNPS" or the "Zion Units") held by ZS, including the General License for the ZNPS Independent Spent Fuel Storage Installation ("ZNPS ISFSI"), to the extent required. The indirect transfer of control would result from a proposed transaction whereby the ultimate parent holding company of ZS, EnergySolutions, Inc. ("ES"), would be acquired by Rockwell Holdco, Inc. ("Rockwell"), a Delaware corporation that was formed for the purpose of acquiring ES and is held by certain investment fund entities organized by controlled affiliates of Energy Capital Partners II, LLC ("ECP II"). ECP II has over $4 billion of capital commitments under its management and is focused on investing in the power generation, electric transmission, midstream gas, renewable energy, oil field services and environmental services sectors of North America's energy infrastructure.

This Application is submitted by ZS on behalf of itself, Rockwell and the other proposed future parent companies ("Applicants"). Rockwell is an intermediate holding company held by various affiliated investment funds that are controlled by the general partner, Energy Capital Partners GP II, LP ("the Controlling Partner"), a Delaware limited partnership. These investment funds are wholly owned either indirectly or directly by the Controlling Partner and various passive limited partner investors (the "Passive Investors"). The Passive Investors do not have any rights to make decisions with respect to running the business portfolios of the investment funds or to participate in the operation of the investments. The Controlling Partner itself is owned by ECP II and various passive limited partner investors, and controlled by ECP II. ECP II is owned by five U.S. citizens (the "ECP II Managing Members") and their estate planning vehicles, and is controlled by the ECP II Managing Members.

101 Shiloh Boulevard, Zion - IL60099 (224) 789-4016

Fax: (224) 789-4008 - www.zionsolutionscompany.com

ZionSolutions, LLC ZS-2013-0016 Page 2 of 4 The shares of ES are currently widely held and publicly traded on the New York Stock Exchange. As a result of the transaction, ES's public stockholders will cease to own shares of ES common stock, and ES will be acquired by Rockwell and will be privately held. A minority of the interests of ES and/or Rockwell potentially may be held by certain managers and employees of ES.' Organization charts showing the management structure of ZS and the simplified corporate ownership structure of ZS both before and after the proposed transaction are provided in Enclosures 1 & 2 to the Application.

While the proposed transaction will result in an indirect transfer of control of ZS and the ZNPS Licenses held by ZS, it will not change the current technical and financial qualifications, or operations, of ZS as the NRC's licensee for ZNPS. Further, the closing of the transaction and the indirect upstream change of control resulting therefrom will not result in any change in personnel responsible for conducting licensed activities.

By Order dated May 4, 2009, the NRC approved the transfer of control of ZNPS from Exelon Generation Company, LLC ("Exelon") to ZS, and on September 1, 2010, the NRC issued license amendments to reflect the transfer of the ZNPS licenses from Exelon to ZS on that date. The decommissioning of ZNPS is actively underway, and pursuant to 10 CFR 50.82(a)(2), the operation of the Zion Units is no longer authorized under the 10 CFR Part 50 licenses. With the support of ES and EnergySolutions, LLC ("ES LLC"), ZS plans to continue the prompt decommissioning of ZNPS.

ES LLC is a direct subsidiary of ES and the immediate parent company of ZS. ES LLC specializes in providing nuclear services, such as high level waste management, spent fuel handling and transportation, and complex decontamination and decommissioning projects, including the decommissioning of both government nuclear facilities and commercial nuclear power generation facilities. Among the services provided by ES LLC are the packaging, transportation, storage, and disposal of radioactive waste at its disposal facility in Clive, Utah, the largest low-level radioactive waste disposal facility in the nation.

ZS is a wholly owned subsidiary of ES LLC. ZS was established solely for the purpose of acquiring the Zion Units and causing the Zion site (except for the ZNPS ISFSI where the spent fuel and Greater than Class C radioactive waste will be stored) to be decommissioned and released for unrestricted use, while maintaining the spent nuclear fuel and Greater than Class C radioactive waste safely stored in the ZNPS ISFSI. ES LLC and ES guaranteed the performance of ZS's decommissioning obligations and obtained a $200 million letter of credit, payable to a back-up nuclear decommissioning trust ("Back-Up NDT"). In addition, ES LLC has granted an irrevocable easement to disposal capacity at its Clive, Utah facility for the disposal of Class A low level waste from the Zion site, and this disposal capacity asset, together with related contractual rights, are held by the Back-Up NDT.

As is customary for companies owned by private equity funds, an equity incentive plan may be provided through which management and employees of ES will be granted equity interests such as stock options or restricted stock units in ES.

ZionSolutions, LLC ZS-2013-0016 Page 3 of 4 The financial qualifications of ZS to perform its obligations under the Licenses have.been demonstrated by: (1) the availability to ZS of the Qualified and Non-Qualified Nuclear Decommissioning Funds to pay for the radiological decommissioning of the Zion Units; (2) the executed guaranty by ES LLC of the performance by ZS of its obligations to decommission ZNPS and the executed guaranty of the obligations of ES LLC by ES; (3) the provision of additional financial assurance in the form of a $200 million irrevocable letter of credit; and (4) the disposal capacity easement assuring the availability of disposal capacity at the Clive, Utah disposal facility. These financial assurances were reviewed and accepted by the NRC in connection with the May 4, 2009 approval of the license transfer from Exelon to ZS. Further information regarding the current status of decommissioning funding assurances was submitted by letter dated September 27, 2012, from P. Daly to NRC Document Control Desk (ZS-2012-0417) (ML12276A218).

No changes to these financial assurances are proposed in connection with the proposed transaction. Any future changes to these assurances, if any, would need to be reviewed and approved by the NRC in accordance with applicable requirements.

Additional information pertaining to the proposed transfer of the Licenses, including the information required under 10 CFR 50.80, is included in the Application. This information demonstrates that there will be no adverse effect upon ZS in connection with the proposed transaction, and ZS will remain financially and technically qualified to hold the NRC licenses for ZNPS.

ZS respectfully requests that the NRC review and complete action expeditiously on the enclosed Application toward issuance of the NRC consent to the indirect transfer of the Licenses by no later than May 1, 2013. ECP II has obtained equity and financing commitments to support the transaction, but these commitments will expire over time. If prompt NRC approval is not obtained, the proposed transaction may not be able to be completed. ZS is prepared to work closely with the NRC Staff to facilitate the review of the Application.

Consistent with standard NRC practice, ZS requests that NRC issue an Order to approve the indirect license transfers and authorize the transfers to take place at any time up to one year after the date of issuance of the order consenting to them, or such later date as may be permitted by the NRC.

In summary, the proposed indirect transfer of the Licenses will not be inimical to the common defense and security or result in any undue risk to public health and safety, and the transfer will be consistent with the requirements of the Atomic Energy Act and the NRC regulations.

In the event that the NRC has any questions about the proposed transaction described in this letter and in the Application or wishes to obtain any additional information about the transfer of the Licenses, please contact Patrick Thurman at (224) 789 4041.

ZionSolutions, LLC ZS-2013-0016 Page 4 of 4 Service upon the Applicants of any notices, comments, hearing requests, intervention petitions, or other pleadings should be made to counsel for ZS, John E. Matthews. Morgan, Lewis &

Bockius LLP, 1111 Pennsylvania Avenue, NW, Washington, DC 20004; Tel: 202.739.5524; Fax: 202.739.3001; E-mail: jmatthews@morganlewis.com.

I declare under penalty of perjury that the foregoing is true and correct. Executed on the 101h day of January 2013.

Respectfully, Patrick Daly Senior Vice President and General Manag ZionSolutions, LLC Attachment 1: Application for Order Approving Indirect License Transfers cc: John Hickman, U.S. NRC Senior Project Manager Office of Environmental Safety, Illinois Emergency Management Agency Service List

Zion Nuclear Power Station, Unit 1 and 2 License Transfer Service List cc:

Patrick T. Daly Thomas Magette Senior VP and General Manager Senior VP Nuclear Regulatory Strategy ZionSolutions, LLC EnergySolutions 101 Shiloh Boulevard 6350 Stevens Forest Road, Ste. 2000 Zion, IL 60099 Columbia, MD 21046 Patrick Thurman, Esq. Russ Workman VP Regulatory Affairs, Licensing & General Counsel Document Control EnergySolutions ZionSolutions, LLC 423 West 300 South, Ste. 200 101 Shiloh Boulevard Salt Lake City, UT 84101 Zion, IL 60099 Illinois Department of Nuclear Safety Gary Bouchard Office of Nuclear Facility Safety VP Engineering, Ops & Nuclear Security and 1035 Outer Park Drive Decommissioning Plant Manager Springfield, IL 62704 ZionSolutions, LLC 101 Shiloh Boulevard Kent McKenzie Zion, IL 60099 Emergency Management Coordinator Lake County Emergency Management Alan Parker Agency President Projects Group 1303 N. Milwaukee Avenue EnergySolutions Libertyville, IL 60048-1308 1009 Commerce Park Drive, Ste. 100 Oak Ridge, TN 37830 Regional Administrator U.S. NRC, Region III John Christian 2443 Warrenville Road President of Logistics, Processing and Lisle, IL 60532-4352 Disposal (LP& D) Group EnergySolutions John E. Matthews 1750 Tysons Boulevard, Suite 1500 Morgan, Lewis & Bockius LLP Mclean, VA 22102 1111 Pennsylvania Avenue, NW Washington, DC 20004

ATTACHMENT 1 APPLICATION FOR ORDER APPROVING INDIRECT LICENSE TRANSFERS (NRC FACILITY OPERATING LICENSE NOS. DPR-39 AND DPR-48)

Zion Nuclear Power Station, Units 1 and 2 ZNPS Independent Spent Fuel Storage Installation NRC Docket Nos. 50-295, 50-304 and 72-1037 Page 1 of 26

ATTACHMENT 1 Application for Order and Conforming License Amendments for License Transfers (NRC Facility Operating License Nos. DPR-39 and DPR-48)

Table of Contents

1. Introduction 3

2. Statement of Purpose of Transfer and Nature of the Transaction Making the Transfer Necessary or Desirable 4

3. General Corporate Information Regarding ZionSolutions and Its Corporate Parents 5 A. General Corporate Information and Description of Business 5 B. No Foreign Ownership or Control 5 C. No Agency 7

4. Technical Qualifications 7

5. Financial Information for Decommissioning Funding Assurance 7 A. Zion Qualified and Non-Qualified Decommissioning Trust Funds 8 B. Additional Financial Assurance Instruments 9

6. Restricted Data 9

7. Other Nuclear Regulatory Issues 9 A. Continuation of Current Design and Licensing Basis 9 B. Price-Anderson Indemnity and Nuclear Insurance 10 C. Standard Contract for Disposal of Spent Nuclear Fuel 10

8. Requested Review Schedule 10

9. Environmental Considerations 10

10. Summary 11 ZionSolutions Corporate Structure Chart EnergySolutions Investor Structure General Corporate Information Regarding ZionSolutions, LLC and its Corporate Parents Schedule & Financial Information for Decommissioning Executed $200 Million Irrevocable Letter of Credit Page 2 of 26

1. Introduction In accordance with Section 184 of the Atomic Energy Act ("AEA") and 10 CFR 50.80, ZionSolutions, LLC ("ZS") hereby submits the enclosed application ("Application") requesting that the U.S. Nuclear Regulatory Commission ("NRC") consent to the indirect transfer of control of Facility Operating License Nos. DPR-39 and DPR-48 (the "ZNPS Licenses") for the Zion Nuclear Power Station, Units 1 and 2 ("ZNPS" or the "Zion Units") held by ZS, including the General License for the ZNPS Independent Spent Fuel Storage Installation ("ZNPS ISFSI"), to the extent required. The indirect transfer of control would result from a proposed transaction whereby the ultimate parent holding company of ZS, EnergySolutions, Inc. ("ES"), would be acquired by Rockwell Holdco, Inc. ("Rockwell"), a Delaware corporation that was formed for the purpose of acquiring ES and is held by certain investment fund entities organized by controlled affiliates of Energy Capital Partners II, LLC ("ECP II"). ECP II has over $4 billion of capital commitments under its management and is focused on investing in the power generation, electric transmission, midstream gas, renewable energy, oil field services and environmental services sectors of North America's energy infrastructure.

The Agreement and Plan of Merger By and Among Rockwell Holdco, Inc., Rockwell Acquisition Corp., and EnergySolutions, Inc., dated as of January 7, 2013, was filed as Exhibit 2.1 to a Securities and Exchange Commission (SEC) Form 8-K filed by ES, and available in the SEC's records at:

http://www.sec.gov/Archives/edgar/data/1 393744/000104746913000089/a2212375 zex-2 1.htm This Application is submitted by ZS on behalf of itself, Rockwell and the other proposed future parent companies ("Applicants"). Rockwell is an intermediate holding company held by various affiliated investment funds that are controlled by the general partner, Energy Capital Partners GP II, LP ("the Controlling Partner"), a Delaware limited partnership. These investment funds are wholly owned either indirectly or directly by the Controlling Partner and various passive limited partner investors (the "Passive Investors"). The Passive Investors do not have any rights to make decisions with respect to running the business portfolios of the investment funds or to participate in the operation of the investments. The Controlling Partner itself is owned by ECP II and various passive limited partner investors, and controlled by ECP II. ECP II is owned by five U.S. citizens (the "ECP II Managing Members") and their estate planning vehicles, and is controlled by the ECP II Managing Members.

The shares of ES are currently widely held and publicly traded on the New York Stock Exchange. As a result of the transaction, ES's public stockholders will cease to own shares of ES common stock, and ES will be acquired by Rockwell and privately held. A minority of the interests of ES and/or Rockwell potentially may be held by certain managers and employees of ES. 2 Organization charts showing the management structure of ZS and the simplified corporate ownership structure of ZS both before and after the proposed transaction are provided in Enclosures 1&2.

2 As is customary for companies owned by private equity funds, an equity incentive plan may be provided through which management and employees of ES will be granted equity interests such as stock options or restricted stock units in ES.

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While the proposed transaction will result in an indirect transfer of control of ZS and the ZNPS Licenses held by ZS, it will not change the current technical and financial qualifications, or operations, of ZS as the NRC's licensee for ZNPS. Further, the closing of the transaction and the indirect upstream change of control resulting therefrom are not expected to result in any change in personnel responsible for conducting licensed activities.

2. Statement of Purpose of Transfer and Nature of the Transaction Making the Transfer Necessary or Desirable By Order dated May 4, 2009,3 the NRC approved the transfer of control of ZNPS from Exelon Generation Company, LLC ("Exelon") to ZS, and on September 1, 2010, the NRC issued license amendments to reflect the transfer of the ZNPS licenses from Exelon to ZS on that date. The decommissioning of ZNPS is actively underway, and pursuant to 10 CFR 50.82(a)(2), the operation of the Zion Units is no longer authorized under the 10 CFR Part 50 licenses. With the support of ES and EnergySolutions, LLC ("ES LLC"), ZS plans to continue the prompt decommissioning of ZNPS.

ES LLC a direct subsidiary of ES and is the immediate parent company of ZS. ES LLC specializes in providing nuclear services, such as high level waste management, spent fuel handling and transportation, and complex decontamination and decommissioning projects, including the decommissioning of both government nuclear facilities and commercial nuclear power generation facilities. Among the services provided by ES LLC are the packaging, transportation, storage, and disposal of radioactive waste at its disposal facility in Clive, Utah, the largest low-level radioactive waste disposal facility in the nation.

ZS is a wholly owned subsidiary of ES LLC. ZS was established solely for the purpose of acquiring the Zion Units and causing the Zion site (except for the ZNPS ISFSI where the spent fuel and Greater than Class C radioactive waste will be stored) to be decommissioned and released for unrestricted use, while maintaining the spent nuclear fuel and Greater than Class C radioactive waste safely stored in the ZNPS ISFSI. ES LLC and ES guaranteed the performance of ZS's decommissioning obligations and obtained a $200 million letter of credit, payable to a back-up nuclear decommissioning trust ("Back-Up NDT"). In addition, ES LLC has granted an irrevocable easement to disposal capacity at its Clive, Utah facility for the disposal of Class A low level waste from the Zion site, and this disposal capacity asset, together with related contractual rights, are held by the Back-Up NDT.

Additional information pertaining to the proposed transfer of the Licenses, including the information required under 10 CFR 50.80, is included in this Application. This information demonstrates that there will be no adverse effect upon ZS in connection with the proposed transaction, and ZS will remain financially and technically qualified to hold the NRC licenses for ZNPS.

The May 4, 2009 Order was to become null and void if the transfer were not completed within one year, but this time could be extended for good cause shown. By Order dated March 12, 2010, the effectiveness of the May 4, 2009 Order was extended by six months until November 4, 2010. 75 Fed. Reg. 13801 (March 23, 2010).

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3. General Corporate Information Re2arding ZionSolutions and Its Corporate Parents A. General Corporate Information and Description of Business ZS is a Delaware limited liability company and is a wholly owned subsidiary of ES LLC. ZS has been established for the sole purpose of decommissioning the Zion Units (hereinafter collectively referred to as "the Zion Restoration Project"). Enclosure I hereto presents the ZS Management Structure Chart. Enclosure 2 is a chart that presents the EnergySolutions Investor Structure, reflecting the direct and indirect ownership of ZS. The general corporate information required pursuant to 10 CFR 50.33(d)(3), including identification of the principal officers and directors of ZS and its corporate parents after the proposed transaction is provided in Enclosure 3.4 B. No Foreign Ownership or Control Consistent with the requirements of 10 CFR 50.38, ZS is not owned, controlled or dominated by an alien, a foreign corporation, or a foreign government, and the proposed transaction will not result in any such foreign ownership, control or domination. The current parent holding company of ZS, ES, is a public company with its shares widely held and traded on the New York Stock Exchange. Following the proposed transaction, ES will no longer be publicly traded, but rather will be privately held, with its shares owned directly by Rockwell.

As of closing, Rockwell will be directly held by a number of affiliated investment funds controlled by the Controlling Partner, including the following existing entities: (i) Energy Capital Partners II, LP; (ii) Energy Capital Partners Il-A, LP; (iii) Energy Capital Partners II-B, LP; (iv) Energy Capital Partners II-C (Direct IP), LP; and (v) Energy Capital Partners II-D, LP (collectively, the "ECP II Partnerships"), 5 each of which is a limited partnership organized under the laws of the State of Delaware.

The ECP II Partnerships are each wholly owned either directly or indirectly by: (i) the Controlling Partner (i.e., Energy Capital Partners GP II, LP), a limited partnership organized under the laws of the State of Delaware, as general partner; and (ii) various passive limited partner investors (the "Passive Investors"). The Passive Investors do not have any rights to make decisions with respect to running the business portfolios of the ECP II Partnerships or participate in the operation of the investments. The Controlling Partner, in turn, is directly owned by: (i)

ECP II, a limited liability company organized under the laws of the State of Delaware; and (ii) various passive limited partner investors (the "Passive GP Investors"). The Passive GP Investors do not have any rights in their capacity as limited partners of the Controlling Partner to make decisions with respect to running the business portfolios of the ECP II Partnerships or participate in the operation of the investments; however, the Passive GP Investors are generally also employees of the Energy Capital Partners business and may participate in running the business portfolios of the ECP II Partnerships or in the operation of the investments in their capacity as employees, subject to the ultimate authority of ECP II.

4 Additional information about ECP II is available at www.ecpartners.com.

5 To the extent that other affiliated investment funds are added, each will be under the control of the Controlling Partner, just as the existing ECP II Partnerships are controlled.

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ECP II is owned and managed by the ECP II Managing Members, who are five individual U.S.

citizens: Douglas W. Kimmelman (individually and through his estate planning vehicle);

Thomas K. Lane (individually 6 and through his estate planning vehicle); Andrew D. Singer; Tyler Reeder; and Peter Labbat.

Less than 40% of the equity in all of the ECP II Partnerships and the Controlling Partner is held by various Passive Investors that are foreign domiciled entities, and no foreign domiciled entity or group of foreign domiciled entities under common control holds more than 12% of these equity interests. 7 The Passive Investors will have no ability to exercise control or domination over the operations of Rockwell, ES, or any of the ES subsidiaries, including ZS. As such, the Passive Investors will have no direct or indirect control over any NRC-licensed activity conducted by ES or any of its subsidiaries.

Finally, ES LLC holds a facility security clearance with the U.S. Department of Energy

("DOE'). This security clearance requires DOE findings regarding foreign ownership, control or influence ("FOCI"), and ongoing DOE oversight to assure that the company is not subject to FOCI. DOE implements U.S. government policy regarding FOCI in accordance with Chapter 2, Section 3 of the "National Industrial Security Program Operating Manual" or NISPOM, DoD 5220.22-M (February 28, 2006), and ES LLC has ongoing reporting obligations regarding its "Certificate Pertaining to Foreign Interests," Standard Form 328, required in connection with maintaining its security clearances. Information regarding the proposed transaction has been provided to DOE, and ES LLC expects to continue to maintain its security clearance following the proposed transactions, which requires DOE to maintain positive findings that ES LLC is not subject to FOCI or that any potential FOCI is adequately negated.

C. No Agency ZS is not acting as the agent or representative of another person in the proposed indirect transfer of the Licenses. As the licensee for ZNPS, ZS acts for itself and on behalf of its corporate parents.

4. Technical Oualifications The technical qualifications of ZS to carry out its responsibilities as the licensee for ZNPS are not affected by the proposed transaction. There will be no physical changes to ZNPS and no changes in the day to day decommissioning operations of ZS in connection with the proposed transactions. ZS will at all times remain the licensee for ZNPS, and there will be no changes in 6 Murray D. Karp, an individual U.S. citizen and an employee of Energy Capital Partners, is admitted to ECP II for very limited purposes. Mr. Karp is not a managing member of, and has no voting or control rights and no economic interests with respect to ECP II.

7 The NRC has previously analyzed and approved private equity fund arrangements where passive foreign investors would own up to 55% of the economic interests in a company that indirectly owned the licensee for operating reactors, under circumstances where the General Partner of the parent company was controlled by U.S. private equity entities and U.S. citizens. See "Safety Evaluation By the Office of Nuclear Reactor Regulation Regarding Acquisition of TXU Corp. By Texas Energy Future Holdings Limited Partnership,"

dated Sept. 10, 2007, pages 10-12 (ML072220130).

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the ZS senior management team resulting from the proposed transactions. There are no changes to ZS's plans for Spent Fuel Management, Quality Assurance, Security or Emergency Preparedness as a result of the proposed transaction.

5. Financial Information for Decommissioning Funding Assurance Following the proposed indirect transfers of control, ZS will remain financially qualified to be the licensed owner and "operator" of the Zion Units. Because ZS is no longer authorized under the 10 CFR Part 50 licenses to operate or load fuel pursuant to the terms of 10 CFR 50.82(a)(2),

ZS will not conduct any of the operations contemplated by the financial qualifications provisions of 10 CFR 50.33(f)(2), but rather all of its licensed activities will involve possession of radioactive material in connection with maintaining the safe condition of the plant, maintaining the spent fuel pool and ISFSI, and completing the decommissioning of ZNPS. Thus, the existing decommissioning trust funds and any other financial assurance for decommissioning are the appropriate sources of funds to consider for purposes of evaluating the financial qualifications of ZS.

The financial qualifications of ZS to perform its obligations under the Licenses have been and continue to be demonstrated by: (1) the availability to ZS of the Qualified and Non-Qualified Nuclear Decommissioning Funds to pay for the radiological decommissioning of the Zion Units; (2) the executed guaranty by ES LLC of the performance by ZS of its obligations to decommission ZNPS and the executed guaranty of the obligations of ES LLC by ES, its parent company; (3) the provision of additional financial assurance in the form of a $200 million irrevocable Letter of Credit ("LOC"); and (4) the disposal capacity easement assuring the availability of disposal capacity at the Clive, Utah disposal facility. These financial assurances were reviewed and accepted by the NRC in connection with the May 4, 2009 approval of the license transfer from Exelon to ZS. Further information regarding the current status of decommissioning funding assurances was submitted by letter dated September 27, 2012, from P.

Daly to NRC Document Control Desk (ZS-2012-0417) (ML12276A218).

No changes to these financial assurances are proposed or anticipated in connection with the proposed transaction. If any changes become necessary, such changes would need to be reviewed and approved by the NRC in accordance with applicable requirements.

ZS will have sufficient funds to accomplish its licensed activities from the Zion Qualified and Non-Qualified Decommissioning Trust Funds. ZS has prepared Enclosure 4, Schedule and FinancialInformationfor Decommissioning,which provides financial projections for the duration of the Zion Restoration Project and shows that the decommissioning trust funds will be adequate to fund the Zion Restoration Project. The source of funds described herein and the pro forma projected costs for the remaining decommissioning period set forth in Enclosure 4 provide the requisite financial information for this license transfer request consistent with 10 CFR 50.33(f)(2). In addition to the trust funds, ZS has access to other financial assurance mechanisms, including the irrevocable LOC in the amount of $200 million. ZS also has access to the resources of ES and ES LLC, which have guaranteed ZS's obligations to decommission ZNPS.

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The funds available from the decommissioning trust funds and other financial assurance mechanisms provide reasonable assurance that ZS has or will obtain the funds necessary to conduct the required decommissioning activities and management of spent nuclear fuel throughout the period of the licenses. As discussed in further detail in Section 7.C below, Exelon has retained title to the ZNPS spent nuclear fuel, and upon completion of the Zion Restoration Project as expected in 2020, ZS has the right to transfer possession of the ZNPS ISFSI to Exelon.

This future transfer to Exelon will require the NRC's prior written consent, and Exelon's financial assurance arrangements for this future transfer were planned in connection with the initial transfer of ZNPS to ZS. When ZNPS was transferred to ZS on September 1, 2010, Exelon retained $25 million in dedicated decommissioning trust funds for purposes of maintaining the ZNPS ISFSI beyond 2020 and ultimately for decommissioning the ZNPS ISFSI. The earnings from these trust funds from 2010 to 2020, together with further earnings during the period for maintaining the ZNPS ISFSI, provide reasonable assurance of the funding for the maintenance and decommissioning of the ZNPS ISFSI. Moreover, pursuant to Section 161i.(4) of the AEA, the NRC retains authority over the Exelon trust fund and Exelon, as a "former licensee" having control over a fund for the decommissioning of a facility licensed under Section 104b. of the AEA, such as ZNPS. 42 U.S.C. § 2201(i)(4).

A. Zion Qualified and Non-Qualified Decommissioning Trust Funds The current values of Zion Qualified and Non-Qualified Decommissioning Trust Funds maintained by ZS and anticipated earnings are sufficient to cover the cost of completing the Zion Restoration Project. Information regarding the decommissioning schedule, trust fund balances and remaining annualized costs is provided in Enclosure 4. The Trust Funds are established and maintained pursuant to trust agreements with The Bank of New York Mellon. Copies of the trust agreements were submitted to the NRC by letter dated February 17, 2011, from P. Thurman to NRC Document Control Desk (ZS-2011-0181) (ML110490571).

B. Additional Financial Assurance Instruments ZS has obtained an irrevocable LOC in the amount of $200 million as additional support for the Zion Restoration Project. If needed, this LOC would be payable to the Back-Up NDT, which is segregated from the Zion Qualified and Non-Qualified Decommissioning Trust Funds. Copies of the trust agreement for the Back-Up NDT were submitted to the NRC by letter dated February 17, 2011, from P. Thurman to NRC Document Control Desk (ZS-2011-0181)

(ML110490571). The LOC is issued by JP Morgan. On its face, the LOC expires on August 16, 2011, but by its own terms, the LOC automatically extends for 12 months year after year through August 16, 2016, unless certain notice is provided. A copy is provided as Enclosure 5.

Pursuant to the conditions of the NRC's Order dated May 4, 2009 approving the transfer of the ZNPS licenses from Exelon to ZS, this letter of credit "cannot be terminated without 30 days prior written notice to the Director of the Office of Federal and State Materials and Environmental Management Programs (FSME) and Director of the Office of Nuclear Reactor Regulation (NRR)."

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In addition to the LOC, ES LLC has provided an Irrevocable Easement for Disposal Capacity of 7.5 million cubic feet, which provides for rights for disposal capacity at the Clive, Utah facility sufficient to dispose of all of the Class A Low Level Waste that may be shipped from the ZNPS site, including waste that can be made compliant to be disposed at the Clive, Utah facility.

6. Restricted Data This Application does not contain any Restricted Data or other classified National Security Information, and it is not expected that any such information will become involved in ZS's licensed activities. However, in the event that such information does become involved, and in accordance with 10 CFR 50.37, "Agreement Limiting Access to Classified Information," ZS agrees that it will appropriately safeguard such information and will not permit any individual to have access to such information until the individual has been appropriately approved for such access under the provisions of 10 CFR Part 25, "Access Authorization for Licensee Personnel,"

and/or Part 95, "Security Facility Approval and Safeguarding of National Security Information and Restricted Data."

7. Other Nuclear Regulatory Issues A. Continuation of Current Design and Licensing Basis There are no changes to the design and licensing basis of ZNPS as a result of the proposed transaction.

B. Price-Anderson Indemnity and Nuclear Insurance The proposed transaction does not affect the existing Price Anderson indemnity agreement for ZNPS, and it does not affect the required nuclear property damage insurance pursuant to 10 CFR 50.54(w) and nuclear energy liability insurance pursuant to Section 170 of the AEA and 10 CFR Part 140. ZS will continue to maintain not less than $50 million onsite insurance coverage and not less than $100 million offsite coverage in accordance with the exemptions to 10 CFR 50.54(w) and 10 CFR 140.11 issued by the NRC in a letter dated December 21, 1999, published at 64 Fed. Reg. 72700 (Dec. 28, 1999). In addition, participation in the secondary insurance pool is not required based on the permanently defueled status of the Zion Units.

C. Standard Contract for Disposal of Spent Nuclear Fuel Exelon has retained ownership of the spent nuclear fuel and has kept in effect its Standard Contract for Disposal of Spent Fuel with DOE for the disposal of spent nuclear fuel to be performed by DOE ("Standard Contract"). Exelon retains title to the ZNPS spent nuclear fuel, and it retains all rights and obligations under Standard Contract No. DE-CR0l-83NE44372, dated June 17, 1983, consistent with the terms of Section 302(b)(4) of the NWPA, which contemplates that Standard Contract rights flow with "title to the spent nuclear fuel or high level waste involved." 42 U.S.C. § 10222(b)(4).

ZS has possession of the ZNPS spent nuclear fuel and is responsible for possession and storage.

ZS does not require any Standard Contract under the terms of Section 302(b) of the Nuclear Page 9 of 26

Waste Policy Act of 1982 ("NWPA"), because the licenses do not and will not authorize "use" of any production or utilization facility. 42 U.S.C. § 10222(b)(1)(A).

Exelon's continued ownership of the ZNPS spent nuclear fuel and retention of title is authorized under general licenses granted for the ownership, but not possession, of byproduct, source, special nuclear material, and spent nuclear fuel granted pursuant to 10 CFR 31.9, 40.21, 70.20, and 72.6(b), respectively.

8. Requested Review Schedule ZS respectfully requests that the NRC review and complete action expeditiously on the enclosed Application toward issuance of the NRC consent to the indirect transfer of the Licenses by no later than May 1, 2013. ECP II has obtained equity and financing commitments to support the transaction, but these commitments will expire over time. If prompt NRC approval is not obtained, the proposed transaction may not be able to be completed. ZS is prepared to work closely with the NRC Staff to facilitate the review of the Application.

9. Environmental Considerations The proposed transaction will not result in any change in the types, or any increase in the amounts, of any effluents that may be released off-site, and will not cause any increase in individual or cumulative occupational radiation exposure. Further, the NRC has determined in 10 CFR 51.22(c)(21) that license transfers are categorically exempt from further environmental review. Accordingly, the transaction will involve no environmental impact.

10. Summary In summary, the proposed indirect transfer of control of the ZS Licenses will be consistent with the requirements of the AEA, NRC regulations and regulatory guidance. ZS will continue to proceed expeditiously to the decommissioning ZNPS and complete the Zion Restoration Project.

Its ability to do so would be enhanced by the proposed transaction, so there will be no adverse impact on public health and safety. The transfers of the Licenses will not be inimical to the common defense and security and do not involve foreign ownership, control or domination.

Applicants therefore request that the NRC consent to the transfer in accordance with 10 CFR 50.80 and approve the conforming administrative amendments pursuant to 10 CFR 50.92.

Page 10 of 26

ENCLOSURE 1 ZIONSOLUTIONS MANAGEMENT STRUCTURE CHART Page 11 of 26

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ENCLOSURE 2 ENERGYSOLUTIONS INVESTOR STRUCTURE Page 13 of 26

ZionSolutions, LLC Ownership Chart (Current) ooooooooo................................

Shareholders (Public)

Energy Solutions, Inc.

ENERGYSOLUTIONS EnergySolutions, LLC ZionSolutions, LLC Page 14 of 26

ZionSolutions, LLC Ownership Chart (Post-Transfer) o..o...................

- Doug Kimmelman and his estate planning vehicle

- Pete Labbat Tom Lane and his estate planning vehicle

- Tyler Reeder

-Andrew Singer Various Passive Limited Partnerships::

(the "ECP 11Partnerships")R

................ =ln ,Tllu Rockwell HoldcoInc.

I EnergySolutions, Inc.

ENERGYSOLUT&M T

LLC E EnergySolutions, T_

ZionSolutions, LLC Page 15 of 26

ENCLOSURE 3 GENERAL CORPORATE INFORMATION REGARDING THE CORPORATE PARENTS of ZionSolutions,LLC Page 16 of 26

NAME: ZionSolutions, LLC STATE OF Delaware INCORPORATION:

BUSINESS 101 Shiloh Blvd.

ADDRESS: Zion, IL 60099-2797 DIRECTORS: David J. Lockwood, Chairman Gregory C. Wood Alan M. Parker Carol Peterson, Director (Exelon Appointee) 4300 Winfield Road 5th Floor, Warrenville, IL 60555)

EXECUTIVE David J. Lockwood, Chief Executive Officer PERSONNEL: Gregory C. Wood, Chief Financial Officer Alan M. Parker, President Pat Daly, Senior Vice President and General Manager Richard Tooze, Vice President, Investment Manager David Nilsson, Treasurer Christian S. Robinson, Controller Russell G. Workman, Secretary and General Counsel Page 17 of 26

NAME: EnergySolutions, LLC STATE OF Utah INCORPORATION:

BUSINESS 423 West 300 South, Suite 200 ADDRESS: Salt Lake City, Utah 84101 DIRECTORS: David J. Lockwood, Manager, Chairman Gregory C. Wood, Manager Mark Morant, Manager Alan M. Parker, Manager John A. Christian, Manager EXECUTIVE David J. Lockwood, President and Chief Executive PERSONNEL: Officer Gregory C. Wood, Executive Vice President and Chief Financial Officer John A. Christian, President, Logistics, Processing and Disposal Mark Morant, President, Products and Technology Group Alan M. Parker, President, Projects Christian S. Robinson, Senior Vice President and Corporate Controller Page 18 of 26

NAME: EnergySolutions, Inc.

STATE OF Delaware INCORPORATION:

BUSINESS 423 West 300 South, Suite 200 ADDRESS: Salt Lake City, Utah 84101 DIRECTORS: Steven R. Rogel, Chairman J. Barnie Beasley, Jr., Director Dr. Pascal Colombani, Director J.I. "Chip" Everest, II, Director David J. Lockwood, Director Clare Spottiswoode, CBE, Director Robert A. Whitman, Director David B. Winder, Director EXECUTIVE David J. Lockwood, President and Chief Executive PERSONNEL: Officer Greg C. Wood, Executive Vice President and Chief Financial Officer John A. Christian, President, Logistics, Processing and Disposal Mark Morant, President, Products and Technology Group Alan M. Parker, President, Projects Christian S. Robinson, Senior Vice President and Corporate Controller Page 19 of 26

NAME: Rockwell Holdco, Inc.

STATE OF Delaware INCORPORATION:

BUSINESS 51 John F. Kennedy Parkway, Suite 200 ADDRESS: Short Hills, New Jersey 07078 DIRECTORS: Tyler Reeder, Director Rahul Advani, Director Steve Herman, Director Ravi Iyer, Director Chris Leininger, Director EXECUTIVE Tyler Reeder, Chief Executive Officer and President PERSONNEL: Rahul Advani, Chief Financial Officer and Treasurer Chris Leininger, Secretary NAME: Energy Capital Partners II, LP STATE OF Delaware INCORPORATION: