L-13-051, Davis-Besee, ISFSI, Perry, ISFSI, Annual Financial Test for a Parent Company Guarantee
| ML13091A057 | |
| Person / Time | |
|---|---|
| Site: | Beaver Valley, Davis Besse, Perry, 07200069 |
| Issue date: | 03/29/2013 |
| From: | Halnon G FirstEnergy Nuclear Operating Co |
| To: | Office of Nuclear Material Safety and Safeguards, Office of Nuclear Reactor Regulation, Document Control Desk |
| References | |
| L-13-051 | |
| Download: ML13091A057 (7) | |
Text
"*ffi 341 White Pond Dr.
Akron, Ohio 44320 March 29,2013 L-13-051 ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 20555-0001
SUBJECT:
Beaver Valley Power Station, Unit No. 1 Docket No. 50-334, License No. DPR-66 Davis-Besse Nuclear Power Station ISFSI Docket No.72-14 Perry Nuclear Power Plant Docket No. 50-440, License No. NPF-58 Perry Nuclear Power Plant ISFSI Docket No. 72-69 Annual Financial Test for a Parent Company Guarantee 10 cFR 30 Enclosed is a copy of the annual FirstEnergy Corp. (FE) financial test that provides assurance that FE can support parent company guarantees (PGs) associated with the decommissioning funding for Beaver Valley Power Station, Unit No. 1, Davis-Besse Nuclear Power Station Independent Spent Fuel Storage Installation (lSFSl), Perry Nuclear Power Plant, and Perry Nuclear Power Plant lSFSl. The test was prepared in accordance with 10 CFR 30, Appendix A, "Criteria Relating to Use of Financial Tests and Parent Company Guarantees for Providing Reasonable Assurance of Funds for Decommissioning."
The PGs include an $11 million PG for the lSFSls and a $95 million PG forthe power plants. The test also provides assurance for a $125 million replacement PG forthe current $95 million PG forthe power plants. The $125 million replacement PG is expected to be in place by the end of the second quarter 2013.
The enclosure also includes a report by the FE independent accountants of their review of the FE financial test.
Beaver Valley Power Station, Unit No. 1 Davis-Besse Nuclear Power Station ISFSI Perry Nuclear Power Plant Perry Nuclear Power Plant ISFSI L-13-051 Page 2 There are no regulatory commitments contained in this submittal. lf there are any questions or if additional information is required, please contact Mr. Thomas A. Lentz, Manager
- Fleet Licensing, at (330) 315-6810.
Director, Fleet Regulatory Affairs
Enclosure:
FirstEnergy Corp. Parent - Guarantee of Funds for Decommissioning:
Letter from Chief Financial Officer to Demonstrate Financial Assurance cc: NRC Region I Administrator NRC Region lll Administrator NRC Resident Inspector (Beaver Valley)
NRC Resident Inspector (Davis-Besse)
NRC Resident Inspector (Perry)
NRC Project Manager (Beaver Valley)
NRC Project Manager (Davis-Besse)
NRC Project Manager (Perry)
Director BRP/DEP Site BRP/DEP Representative Utility Radiological Safety Board Grego{pE{.
Halnon
March 28,2013 ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 2055 5-000 I
Subject:
FirstEnergy Corp. Parent - Guarantee of Funds for Decommissioning:
Letter from Chief Financial Officer to Demonstrate Financial Assurance I am the Senior Vice President and Chief Financial Officer of FirstEnergy Cotp., 76 South Main Street, Akron Ohio 44308, an Ohio corporation.
This letter is in support of this firm's use of the financial test to demonsfrate financial assurance, as specified in 10 CFR Part 50 and CFR Part72.
This firm will guarantee, through parent company guarantees, up to $136 million of the decommissioning costs of the following facilities owned or operated by subsidiaries of this firm.
The current cost estimate and the amount being guaranteed are shown for the following facilities:
Name of Facilitv Beaver Valley Power Station, Unit No. I License No. DPR-66 Perr), Nuclear Power Plant License No. NPF-58 Davis-Besse Nuclear Location of Facility Perry, OH Oak Harbor, OH Current Cost Estimates
$679,590,000
$ 4,651,259 Amount Being Guaranteed
$84,000,000
$41,000,000
$4,700,000 Shippingport, PA 5507,927,560 Power Station Independent Spent Fuel Storage Installation Docket No. 72-14 Perry Nuclear Power Plant Perry, OH Independent Spent Fuel Storage Installation Docket No. 72-69
$ 6,028,854
$ 6,300,000 FirstEnergy Corp. is required to file a Form l0-K with the Commission for the latest fiscal vear.
Securities and Exchange The fiscal year of FirstEnergy Corp. ends on December 31". The figures for the following items (Financial Test II: Alternative II) marked with double asterisks are derived from FirstEnerry Corp.'s independently audited, year-end financial statements and footnotes for the latest completed fiscal year ending December 31, 2012.
I hereby certiff that the content of this letter is true and correct to the best of my knowledge.
F. Pearson ior Vice President and Chief Financial Officer, FirstEnergy Corp.
arch 28, 2013
FINAI{CIAL TEST: ALTERNATIVE II (10 CFR part 30 App. A.Section II A.2.)
FirstEnergy Corp. Parent Guarantee of Funds for Decommissioning Dollars in Millions 1.
Guaranteed amount for the following Units:
Beaver Valley Power Station, Unit No. l, License No. DPR-66 o
Perry Nuclear Power Plant, License No. NPF-58 Davis-Besse Nuclear Power Station, ISFSI o
Perry Nuclear Power Plant, ISFSI Current bond rating of most recent unsecured issuance of this firm Rating Name of Rating Service Date of issuance of bond Date of maturity of bond Tangible Net Worth Total assets in the United States (required only if less than 90 percent of firm's assets are located in the United States)
$136 Baa3 Moody's 3/512013 3lr5l20r8 &
3lrs/2023
$3,673 See Line 9 Below No 2.
3.
4.
- t 5.
- 6.
Yes X
X 7.
8.
9.
Is line 5 at least $21 million?
Is line 5 at least 6 times line l?
Are at least 90 percent of firm's assets located in the United States?
If not, complete line 10.
Is line 6 at least 6 times line l?
Is the rating specified on line 2 "BBB" or better (if issued by Standard
& Poor's) or "Baa" or Better (if issued by Moody's)?
X N/A 10.
I l.
- Denotes figures derived from financial statements.
- Tangible Net Worth is defined as FirstEnergy Corp. total equlty minus goodwill, patents, fiademarks and copyrights; and FirstEnergy Corp.'s net book value for Beaver Valley Power Station, Unit No. 1, Perry Nuclear Power Plant and Davis-Besse Nuclear Power Station.
FIRSTENERGY CORP.
YEAR EI\\IDED DECEMBER 3I,2OI2 Dollars in Millions Line Number in CFO's Leffer Total Equity Less: Goodwill, Patents, Trademarks and Copyrights Other Intangible Assets Per Financial Statements
$ 13,093
$ 6,447 702 420 1,028 823 s
3.673 5-Net Book Value Beaver Valley Power Station, Unit No. I Net Book Value Perry Nuclear Power Plant Net Book Value Davis-Besse Nuclear Power Station Tangible Net Worth
ft wc Report of Independent Accountants To FirstEnergy Corp.:
We have performed the procedures enumerated below, which were ?Sreed to by PanagqTnent of FirstEnefuy Corp. (the iompany) solelyto assist you in evaluating the Company's-compliance with the financial i*t ur of becembu:r stl
'zoL2performedin accordance with the U.S. Nuclear Regulatory Commission (the "NRC") Regirlations io C.F.R, Section So.ZS(eXrXiiiXB) and ro C.F.R,-Section Zz.So(e)(z) ai mandated by ile Parent Company Guarantees. Management is responsible for the Company's compliance with those requirements. This agreed-u_pon procedures engagement was conducted in accordance with attestafron standards esta'blishea Uy tne American Institute of Certified PublicAccountants. The sufficiency of these procedrues is solelythe responsilility g{those pqqet specified in this report. Consequetttly, *u -"k" no representati,on regarding-the sufficiency of the t'rocedures descri6ed below "iti.t f# the purpose foi which this report hasbeen requested or for any other pur?ose.
Forthe purpose of this report, we have:
- 1. Read the letter, dated March 28, 2o13, from your Senior Vice President and Chief Financial Officer to the NRC regarding ihe $-iSO miilion Parental Guarantees and performed the following procedures, which were applied as explained below:
A. Traced and agreed the amounts in the column "Per Financial Statements", to a schedule preplred by the Company from its audited financial statements noting no differences.
B. Traced and agreed the amount in the column "Per CFO's Letter" to line item #5 in the Company's Financial Test: Alternative II.
D.
Recomputed the Tangible Net Worth by subtracting the Company's go-odwill, patents, trademarks, copyrights; and FirstEneigy Corp.'s net book value of Beaver Valley power Station,
-Unii No. r, Davis-BessI-Nuclear Power Station and Perry Nuclear Power Plant from the Company's stockholders' equitynoting no differences.
Inquired of the Vice President, Controller and Chief Accounting--Officer regarding whither any off balance sheet transactions exist that could materially advgrsely affect the ability lt tn.,Company to pay decommissioning cosJg. He_responded that all material off-bul"o.e shdet transactions have been disJlosed in the Company's financial statements as filed in its 2012 Annual Report on Form lo-K and he does not believe that any of the off-balance sheet transictions will materially adversely affgct the Company's ability to pay decommissionitg costs. We did not perform any further procedures to substantiate management's response.
Reviewed the bond rating including in the Company's Financial Test: Alternative II noting that it meets the riquir"-.ttlt of Regulation ro C.F.R. 30, APpendix A,Section II.A.z(i).
E.
We were not engaged to and did not conduct an examination, the objective of which would be the orpression of utioii"ion on compliance. Accordingly, we do not e)q)ress such an opinion. Hadwe performed additional procedureJ, other matters --idttt have come to our attention that would have been reported to you.
PricewaterhouseCoopers LLP, zoo Public Square, tSth Floor, Cleueland, OH 44tt4-z3ot T (zt6) 8ZS Sooo, F: (zt6) 566 7846,www.pwc.com/us
-L pwe This report is intended solely forthe infonnation and use of managemggt of the Company and is not intend6d to be and should nbt be used by anyone other than these specified parties.
Cnry,J'L I*L(
PricewaterhouseCoopers LLP March 28, zor3