ML13281A936

Ltr J Connell, Maine Yankee Atomic Power Co - Threshold Determination of Indirect License Transfer Due to Proposed Merger of Main Public Service Co and Bangor Hydro Electric Co (Docket Nos. 50-309, 72-30) TAC L24748

ML13281A936
Person / Time
Site:	Maine Yankee
Issue date:	10/08/2013
From:	Goshen J NRC/NMSS/SFST
To:	Connell J Maine Yankee Atomic Power Co
Allen W
References
TAC L24748
Download: ML13281A936 (6)

Text

October 8, 2013 Mr. James Connell Vice President Maine Yankee Atomic Electric Company 321 Old Ferry Road Wiscasset, ME 04578-4922

SUBJECT:

MAINE YANKEE ATOMIC POWER COMPANY - THRESHOLD DETERMINATION OF INDIRECT LICENSE TRANFER DUE TO PROPOSED MERGER OF MAINE PUBLIC SERVICE COMPANY AND BANGOR HYDRO ELECTRIC COMPANY (TAC NO. L24748)

Dear Mr. Connell:

By letter dated May 6, 2013, (ADAMS Accession Number ML13150A027) Maine Yankee Atomic Power Company acting on behalf of the Maine Public Service Company (MPS), pursuant to Section 184 of the Atomic Energy Act of 1954, as amended, and 10 CFR 50.80, requested that the U.S. Nuclear Regulatory Commission (NRC) determine if the proposed merger of MPS and Bangor Hydro Electric Company constitutes an indirect transfer of License DPR- 36. The NRC finds that the proposed merger is not a direct or indirect license transfer of license DPR-36. A copy of the NRC staff evaluation is enclosed.

If you have any questions please give me a call at (301) 287-9250.

Sincerely,

/RA/

John Goshen, P. E., Project Manager Licensing Branch Division of Spent Fuel Storage and Transportation Office of Nuclear Material Safety and Safeguards Docket Nos.: 50-309, 72-30 TAC No.: L24748

Enclosure:

As stated cc:

Arthur Domby, Troutman Sanders, LLP Service List w/o Enclosure

Mr. James Connell October 8, 2013 Vice President Maine Yankee Atomic Electric Company 321 Old Ferry Road Wiscasset, ME 04578-4922

SUBJECT:

MAINE YANKEE ATOMIC POWER COMPANY - THRESHOLD DETERMINATION OF INDIRECT LICENSE TRANFER DUE TO PROPOSED MERGER OF MAINE PUBLIC SERVICE COMPANY AND BANGOR HYDRO ELECTRIC COMPANY (TAC NO. L24748)

Dear Mr. Connell:

By letter dated May 6, 2013, (ADAMS Accession Number ML13150A027) Maine Yankee Atomic Power Company acting on behalf of the Maine Public Service Company (MPS), pursuant to Section 184 of the Atomic Energy Act of 1954, as amended, and 10 CFR 50.80, requested that the U.S. Nuclear Regulatory Commission (NRC) determine if the proposed merger of MPS and Bangor Hydro Electric Company constitutes an indirect transfer of License DPR- 36. The NRC finds that the proposed merger is not a direct or indirect license transfer of license DPR-36. A copy of the NRC staff evaluation is enclosed.

If you have any questions please give me a call at (301) 287-9250.

Sincerely,

/RA/

John Goshen, P. E., Project Manager Licensing Branch Division of Spent Fuel Storage and Transportation Office of Nuclear Material Safety and Safeguards Docket Nos.: 50-309, 72-30 TAC No.: L24748

Enclosure:

As stated cc:

Arthur Domby, Troutman Sanders, LLP Service List w/o Enclosure File Location G:\SFST\Maine Yankee\2013 Merger\MY 2013 Threshold determination.docx Closes out TAC No. L24748 ADAMS Letter Number: ML13281A936 OFC SFST SFST OGC- NLO NRR SFST NAME JGoshen WWheatley SUttal M Dusaniwskyj MSampson DATE 9/17/2013 9/19 /2013 9/26/2013 9/30/2013 10/8/2013 OFFICIAL RECORD COPY 2

STAFF EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION DETERMINATION OF INDIRECT TRANSFER OF MAINE YANKEE ATOMIC POWER COMPANY LICENSE DPR - 36 DUE TO PROPOSED MERGER OF MAINE PUBLIC SERVICE COMPANY AND BANGOR HYDRO ELECTRIC COMPANY DOCKET NOS. 50-309 & 72-30

1.0 INTRODUCTION

By letter dated May 6, 2013 (ADAMS Accession No. ML13150A027), Maine Yankee Atomic Power Company (MYAPC) acting on behalf of Maine Public Service Company (MPS), pursuant to Section 184 of the Atomic Energy Act of 1954, as amended, (AEA), and 10 CFR 50.80, requested that the U.S. Nuclear Regulatory Commission (NRC) determine if the proposed merger of MPS and Bangor Hydro Electric Company (BHE) constitutes an indirect transfer of license DPR- 36. MPS and BHE are both subsidiaries of BHE Holdings, Inc., and hold minority interests in MYAPC. MYAPC is the holder of license DPR-36.

2.0 BACKGROUND

From 1972 until permanent shutdown in 1997, MYAPC operated a 900-megawatt (electric) pressurized water reactor at a site in Wiscasset, Maine. The power reactor has since been dismantled and decommissioned, and much of the original site has been released from the NRC license. MYAPC currently holds a license only for possession of spent nuclear fuel at the Maine Yankee (MY) independent spent fuel storage installation (ISFSI).

MPS holds a five percent (5%) interest in MYAPC. MPS is a regulated electric utility based in Presque Isle, Maine, and provides electric service to approximately 36,000 customer accounts in eastern Maine's Aroostook County. MPS is owned by Maine & Maritimes Corporation, a publicly traded company, which is owned in turn by BHE Holdings, Inc. BHE Holdings Inc. also owns BHE. BHE currently holds a seven percent (7%) interest in MYAPC. BHE is a regulated electric utility based in Bangor, Maine and provides electric service to approximately 117,000 ENCLOSURE

customers in portions of the Maine counties of Penobscot, Hancock, Washington, Waldo, Piscataquis, and Aroostook.

According to the applicant, the proposed merger of MPS and BHE involves the transfer of control of MPSs interest in Maine Yankee as a result of a restructuring plan in which MPS will be merged with and into BHE and other Maine & Maritimes entities would be dissolved.

As a result of the proposed transaction, MPSs and BHEs operations will be consolidated with the result that the surviving entity will continue to provide retail electric service to their customers in eastern Maine. BHE will continue to hold, indirectly, a 12% interest in MYAPC (the company, not the facility). No changes in licensed activities, the management of the facility, or in the day-to-day operation of the facility will result from the proposed acquisition. The owner/shareholders of MYAPC are each obligated to pay facility operating expenses in direct proportion to their ownership interest in accordance to rate schedules on file with the Federal Energy Regulatory Commission (FERC).1 Current operating expenses include decommissioning and spent fuel management costs, including operation of the ISFSI.

2.1 Financial Qualifications:

As a result of the proposed transaction, MPSs and BHEs obligations with respect to MYAPC will be combined into a new entity and not change as a result of the proposed merger. The applicant states that reasonable assurance exists for the necessary funds for ongoing activities at the ISFSI and for meeting the financial obligations associated with the facility and site. The owner/shareholders of MYAPC are each obligated to pay MYAPCs operating expenses in direct proportion to their ownership interest in accordance to rate schedules on file with FERC.

Current operating expenses include decommissioning and spent fuel management costs, including operation of the ISFSI.

Furthermore, because the power plant was permanently shut-down and fully dismantled and decommissioned, the financial obligations associated with MPSs 5% ownership interest are significantly reduced relative to an operating facility.

The NRC staff concludes that the financial qualifications requirements of MPS and BHE as it pertains to the MYAPC will be the same after the proposed merger as it stood prior to the proposed merger.

2.2 Decommissioning Funding Assurance:

Since the original power plant has been decommissioned and the license amended, the only remaining decommissioning is decontamination and dismantlement of the ISFSI once the spent fuel is removed. The MY ISFSI decommissioning cost estimate, as described in its December 17, 2012, Independent Spent Fuel Storage Installation Decommissioning Funding Plan, is

$20.4 million (2012 $), (ADAMS Accession Number ML13003A074). MYAPC estimates the cost to manage the irradiated fuel and greater than class C waste at the MY ISFSI to the year 2023 to be $86.7 million in 2013$, (ADAMS Accession Number ML13045A487). MYAPC is currently collecting funds through its power contracts and amendatory agreements under FERC regulations.

1 The other owners of the MYAPC are NSTAR 26%, Central Maine Power Company 38%, and New England Power Company 24%. These companies are not parties to this proposed action.

2

The NRC staff concludes that the individual decommissioning funding assurance requirements of MPS and BHE, as it pertains to the MYAPC, when combined into a new entity will be the same after the proposed merger as it stood prior to the proposed merger.

2.3 Foreign Ownership, Domination or Control (FOCD):

According to the applicant, BHE Holdings is a subsidiary of Emera US Holdings, Inc., a domestic corporation, which, in turn, is a subsidiary of Emera, Inc., a Canadian corporation with headquarters in Halifax, Nova Scotia, Canada. As a result of the proposed merger, Emera, a Canadian corporation, through its ownership of its subsidiaries, would indirectly own a cumulative 12.0% interest in an NRC licensee (MYAPC).

The Staff notes that the ownership interest is not direct, and is small. Thus, the currently established commercial relationship between the co-owners of MYAPC does not and will not give Emera the power to exercise control, or have the ability to control, MYAPC or its management.

Additionally, on December 21, 2011, as modified on April 24, 2012, ADAMS Accession Nos.

ML11364A053 and ML12125A042) MYAPC submitted to the NRC a Negation Action Plan addressing issues of potential FOCD, which was adopted by the Board of Directors on December 14, 2011 and executed on January 3, 2012.

Also, by letter dated July 15, 2013, (ADAMS Accession No. ML13086A010) the NRC staff granted MYAPC an exemption from the FOCD requirements of 10 CFR 50.38.

3.0 CONCLUSION

After considering the details of the proposed merger between MPS and BHE, two parent companies of MYAPC, which are also two subsidiaries of BHE Holdings Inc., the NRC staff concludes that there is no direct or indirect transfer of the license DPR-36 held by MYAPC, and that no safety evaluation to that effect is warranted.

Principal Contributor: Michael Dusaniwskyj (301) 415-1260 3

Maine Yankee Atomic Power Station Service List:

State Nuclear Safety Advisor Mr. Jay Hyland State Planning Office State of Maine State House Station #38 286 Water St., Key Plaza - 8th Floor Augusta, ME 04333 State House Station 11 Augusta, ME 04333 First Selectman of Wiscasset Municipal Building Regional Administrator, Region I U.S. Route 1 U.S. Nuclear Regulatory Commission Wiscasset, ME 04578 2100 Renaissance Boulevard Renaissance Park Friends of the Coast King of Prussia, PA 19406 P.O. Box 98 Edgecomb, ME 04556 Decommissioning Branch Chief, Region I U.S. Nuclear Regulatory Commission Mr. Jonathan M. Block 2100 Renaissance Boulevard Attorney at Law Renaissance Park P.O. Box 566 King of Prussia, PA 19406 Putney, VT 05346 0566 David Lewis, Esquire Joseph Fay, Esquire Shaw Pittman Maine Yankee Atomic Power Company 2300 North Street, NW 321 Old Ferry Road Washington, DC 20037 Wiscasset, ME 04578-4922 Mr. James Connell Mr. Gerald Poulin ISFSI Manager Chairman and President Maine Yankee Atomic Power Company Maine Yankee Atomic Power Company 321 Old Ferry Road 321 Old Ferry Road Wiscasset, ME 04578-4922 Wiscasset, ME 04578-4922 Director Division of Health Engineering Department of Human Services

1. 10 State House Station Augusta, ME 04333 Mr. Patrick J. Dostie State of Maine Nuclear Safety Inspector Department of Health and Human Services Maine Public Health Division of Environmental Health 286 Water St., Key Plaza - 8th Floor State House Station 11 Augusta, ME 04333