ENOC-13-00016, Response to Request for Additional Information Regarding 10 CFR 50.33 Financial Qualification Review
| ML13128A009 | |
| Person / Time | |
|---|---|
| Site: | Vermont Yankee File:NorthStar Vermont Yankee icon.png |
| Issue date: | 05/06/2013 |
| From: | Mccann J Entergy Nuclear Operations |
| To: | Document Control Desk, Office of Nuclear Reactor Regulation |
| References | |
| ENOC-13-00016, TAC MF0947 | |
| Download: ML13128A009 (9) | |
Text
--- Entergy Entergy Nuclear Operations,lnc.
Entergy Nuclear Northeast 440 Hamilton Avenue White Plains, NY 10601 Tel: 914-272-3370 John F. McCann Vice President, Nuclear Safety, Emergency Planning and Licensing ENOC-13-00016 May 6, 2013 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, DC 20555-0001
SUBJECT:
Response to Request for Additional Information Regarding 10 CFR 50.33 Financial Qualification Review Vermont Yankee Nuclear Power Station Docket No. 50-271 License No. DPR-28
REFERENCE:
I.
Letter, USNRC to Entergy Nuclear Operations, Inc., "Vermont Yankee Nuclear Power Station - Request For Additional Information Regarding 10 CFR 50.33 Financial Qualification Review (TAC No. MF0947),"
dated March 20, 2013, Accession No. ML13077A206
Dear Sir or Madam:
By letter dated March 20, 2013, the NRC requested additional information from Entergy Nuclear Operations, Inc. (ENO) regarding 10 CFR 50.33 financial qualifications pertaining to Vermont Yankee Nuclear Power Station (VY). ENO is the operator of VY, and the agent for VY's owner, Entergy Nuclear Vermont Yankee, LLC (ENVY). Enclosure 1 to this letter provides a proprietary version of the information requested by the NRC. A redacted version of this information, suitable for public disclosure, is provided as Enclosure 2 and is labeled "ENVY Financial Projections (Non-Proprietary Version)."
ENO requests that Enclosure 1 be withheld from public disclosure pursuant to 10 CFR 2.390, as described in the Affidavit of John F. McCann, which is also provided.
ENOC-1 3-00016 Page 2 of 2 This letter contains no new commitments. If you have any questions, please contact Mr.
David Mannai, Senior Manager, Nuclear Safety and Licensing, at 802-380-1175.
Sincerely, JFM / Ijs
Enclosures:
- 1. Response to Request for Additional Information
- 2. ENVY Financial Projections (Non-Proprietary Version) cc:
Mr. William M. Dean (w/o Enclosure 1)
Region 1 Administrator U.S. Nuclear Regulatory Commission 2100 Renaissance Blvd, Suite 100 King of Prussia, PA 19406-2713 Mr. Richard V. Guzman, Project Manager Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Mail Stop 08C2A Washington, DC 20555 USNRC Resident Inspector (w/o Enclosure 1)
Vermont Yankee Nuclear Power Station 320 Governor Hunt Road Vernon, VT 05354 Mr. Christopher Recchia (w/o Enclosure 1)
Commissioner VT Department of Public Service 112 State Street, Drawer 20 Montpelier, VT 05620-2601 Mr. C. Wamser (VY)
Mr. L. Jager Smith (ECH)
Enclosure I to this letter contains Confidential and Proprietary Financial Information to be withheld per 10 CFR 2.390. When Enclosure I is separated from this document this letter is UNCONTROLLED.
ENOC-13-00016 2.390 Affidavit Page 1 of 2 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of
))
Entergy Nuclear Operations, Inc.
)
Docket No. 50-271 Vermont Yankee Nuclear Power Station
)
AFFIDAVIT I, John F. McCann, Vice President - Nuclear Safety, Emergency Planning and Licensing, of Entergy Nuclear Operations, Inc. (ENO), hereby affirm and state:
I.
I am authorized to execute this affidavit on behalt of ENO. ENO is the licensed operator of the Vermont Yankee Nuclear Power Station, and the agent for the plant owner, Entergy Nuclear Vermont Yankee, LLC (ENVY).
- 2.
ENO is providing information in response to a Nuclear Regulatory Commission Request for Additional Information Regarding 10 CFR 50.33 Financial Qualification Review, dated March 20, 2013, ADAMS Accession No. ML13077A206. The document being provided labeled "Enclosure 1" contains proprietary financial information and financial projections related to the ownership and operation of the Vermont Yankee Nuclear Power Station. This document constitutes proprietary commercial and financial information that should be held in confidence by the NRC pursuant to 10 CFR § 2.390(a)(4) because:
- i.
This information is and has been held in confidence by ENO and ENVY.
ii.
This information is of a type that is customarily held in confidence by ENO and ENVY and there is a rational basis for doing so because the information contains sensitive financial information concerning projected revenues and operating expenses of ENO and ENVY.
- iii, This information is being transmitted to the NRC in confidence.
iv.
This information is not available in public sources and could not be gathered readily from other publicly available information.
- v.
Public disclosure of this information would cause substantial harm to the competitive position of ENVY by disclosing its internal financial projections.
Enclosure I to this letter contains Confidential and Proprietary Financial Information to be withheld per 10 CFR 2.390. When Enclosure I is separated from this document this letter is UNCONTROLLED.
ENOC-13-00016 2.390 Affidavit Page 2 of 2
- 3.
Accordingly, ENO requests that the designated document be withheld from public disclosure pursuant to 10 CFR § 2.390(a)(4).
I declare under penalty of perjury that the foregoing is true and correct.
Executed on this 6 day of May 2013.
,4n F. McCann Ice President - Nuclear Safety, Emergency Planning and Licensing Enclosure I to this letter contains Confidential and Proprietary Financial Information to be withheld per 10 CFR 2.390. When Enclosure I is separated from this document this letter is UNCONTROLLED.
ENOC-13-00016 Page 1 of 5 ENVY Financial Projections (Non-Proprietary Version)
RESPONSE TO REQUEST FOR ADDITIONAL INFORMATION FOR NRC STAFF EVALUATION OF LICENSEE'S FINANCIAL QUALIFICATION IN ACCORDANCE WITH 10 CFR 50.33 ENTERGY NUCLEAR OPERATIONS, INC.
VERMONT YANKEE NUCLEAR POWER STATION The Nuclear Regulatory Commission staff, in reviewing Securities and Exchange Commission filings of Entergy Corporation, had the following question transmitted by letter dated March 20, 2013, ADAMS Accession No. ML13077A206:
Regulatory Basis Title 10 of the Code of Federal Regulations (10 CFR) Section 50.33(f) states:
Except for an electric utility applicant for a license to operate a utilization facility of the type described in § 50.21 (b) or § 50.22, 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.
Vermont Yankee Nuclear Power Station (Vermont Yankee) does not meet the definition of an electric utility per 10 CFR 50.2.
Per the guidance in NUREG-1 577, Revision 1, "Standard Review Plan on Power Reactor Licensee Financial Qualifications and Decommissioning Funding Assurance" (Agencywide Documents Access and Management System (ADAMS) Accession no. ML013330264), the NRC does not systematically review its power reactor licensees once it has issued an operating license, other than for transfers discussed in Section 111.1.e. However, section 50.33(fX5) states:
The Commission may request an established entity or newly-formed entity to submit additional or more detailed information respecting its financial arrangements and status of funds if the Commission considers this information to be appropriate. This may include information regarding a licensee's ability to continue the conduct of the activities authorized by the license and to decommission the facility.
The NRC has used this provision only in limited situations and normally will not require licensees, including those that are not "electric utilities," to report on their financial qualifications at specified intervals. However, reviewers have and will continue to conduct
ENOC-1 3-00016 Page 2 of 5 ENVY Financial Projections (Non-Proprietary Version) general follow-up reviews of all licensees by screening trade and financial press reports, and other sources of information. Reviewers will use this information to determine whether to recommend any additional NRC action, including requests for additional information and the assignment of additional inspection resources to monitor the adequacy of plant safety performance.
Vermont Yankee Impairment Vermont Yankee's quarterly 10-Q filing to the U.S. Securities and Exchange Commission (SEC) on November 6,2012, which was posted on the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system (and captured in the ADAMS at Accession no. ML13072A156) stated the following:
Impairment Because of the uncertainty regarding the continued operation of Vermont Yankee, Entergy has tested the recoverability of the plant and related assets each quarter since the first quarter 2010. The determination of recoverability is based on the probability-weighted undiscounted net cash flows expected to be generated by the plant and related assets. Projected net cash flows primarily depend on the status of the pending legal and state regulatory matters, as well as projections of future revenues and expenses over the remaining life of the plant. Prior to the first quarter 2012, the probability-weighted undiscounted net cash flows exceeded the carrying value of the Vermont Yankee plant and related assets. The decline, however, in the overall energy market and the projected forward prices of power as of March 31, 2012, which are significant inputs in the determination of net cash flows, resulted in the probability-weighted undiscounted future cash flows being less than the asset group's carrying value. Entergy performed a fair value analysis based on the income approach, a discounted cash flow method, to determine the amount of impairment. The estimated fair value of the plant and related assets at March 31,2012 was $162.0 million, while the carrying value was $517.5 million. Therefore, the assets were written down to their fair value and an impairment charge of $355.5 million ($223.5 million after-tax) was recognized.
Because an impairment is an indication that there has been a change in the cashflow and/or revenues generated by Vermont Yankee as determined by the company through periodic assessments, the NRC staff requires further information to insure that the licensee is meeting NRC requirements for financial qualifications.
RAI-1
Please provide updated proformas for the operations and maintenance and cashflow for Vermont Yankee for the period of 2013-2018.
ENOC-1 3-00016 Page 3 of 5 ENVY Financial Projections (Non-Proprietary Version)
RESPONSE
Provided below are income statement figures for Entergy Nuclear Vermont Yankee, LLC (ENVY). Information for 2013 through 2017 is based on a February 2013 present estimate, and is subiect to change. Historical data from 2008 throuah 2012 are also orovided.
Entergy Nudear Vermont Yankee, LLC -- Income statements (2008-2017)
Dollars in Thousands Poecasl ta a FePs~y 2013 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Vermont Yartee MDC 605 605 605 605 605 605 605 605 605 605 Projected Capacity Factor Average Contract Price $/'4Wh Average Market Price $JMWh Power Sales. Contract Power Sales - ft rket Total Revenue Operation & Maintenance O&M Oulage Fuel Plant Depreciation Other Interest Income Inerest Expense Decommissioning Other Total Operating Expenses Operating Profit bIcome Taxes Net bnome Totals may not foot because of rounding. 2012 O&M expense includes the $355.5 million non-cash impairment charge noted in this RAI.
ENOC-1 3-00016 Page 4 of 5 ENVY Financial Projections (Non-Proprietary Version)
Provided below are cash flow figures for ENVY. Information for 2013 through 2017 is based on a February 2013 projection. Historical data from 2008 through 2012 are also provided.
Entesgy Nuclear Vermont Yankee, LLC -- Cash Flow Slatamenb (2008-2017)
Dtars In Thousands FOY AFl
,0`Fe*WY 20I3 208 2009 2010 2011 2012 2010 2014 2015 2016 2017 OPERAlrWS AC1IVrnTS Net nome Ntn-Cash berns Included in Net Income:
Depreciation, Amotzalion, Decosn. and eferred Income Taxes Other Mt cash flow provide/
(usad in) operating actbits is..
DEVBWS ACYX1111rUB Cfsbructlon Exqendltures Nuclear Wl puredtes fecom. Trust Coltb. and Relzed Change in Trust Assets Proceeds from Sale o Switchloe Inmetrent In Tenas te$a Proceeds from OE Spent Nuclear Fuel Utigations 1It cash ftw provided I (used in) Investing actwitis WSMINMWI ACrIIVD Proceeds fronm issuance of:
tong Term Debt Common Stock Relirement of:
tang Term Dt Acvsnces (r"0) / From ParetitAssoclated Companies Fit cash flow provided I (wud) by financing aetlvylaes Totals may not foot because of rounding.
ENOC-1 3-00016 Page 5 of 5 ENVY Financial Projections (Non-Proprietary Version)
Provided below are Balance sheet figures for ENVY. Information for 2013 through 2017 is based on a February 2013 projection. Historical data from 2008 through 2012 are also provided.
Entergy Nuclear Vermont Yankee, LLC -- Balance Sheets (2008-2017)
Dollrs in Thousands Forecm as of Fatruy 2013 200 2009 2010 Projected Balance as of beceber 31 2011 2012 2913 2014 2915 2016 2017 A ETSS Cash Acwunts Receivable Fuel Inventory Notes Receivable Net Plant Decommissioning Trust Funds Otter Deferred Assets Pre= anet & Other Total Assets LTABU1IM Accounts Payable Aocum. Def. Income Taxes Accrued Pension Uability Notes Payable Decommissioning Liability Other Liabilities Total Liabirt'ies EQEW:
Member's Interest Remaed Earrings Accumulated Other Comprehensive Ircome Treasury Stock rotal Equty Total Uabties & tvy Totals may not foot because of rounding.
ENO notes that ENVY has in place two credit support agreements available to provide funds to ENVY for expenses and obligations to safely operate and maintain Vermont Yankee. One of these credit agreements is provided by Entergy International Holdings LTD LLC in the amount of $35 million. The other credit agreement is provided by Enter Glnhol Investments In*_ *lsn in thA amnount nf S%16; millinn
ýýI nese two credit agreements nlave been discussed by the NXC in its tSatety Evaluation Report concerning the transfer of the Vermont Yankee license to ENVY, at page 5, dated May 17, 2002, available at ADAMS Accession No. ML020390198.