L-14-215, ISFSI, Davis-Besse ISFSI, Perry and ISFSI - Replacement of Parental Guarantees

ISFSI, Davis-Besse ISFSI, Perry and ISFSI - Replacement of Parental Guarantees

ML14183B295
Person / Time
Site:	Beaver Valley, Davis Besse, Perry, 07201043, 07200069
Issue date:	07/02/2014
From:	Sena P FirstEnergy Nuclear Operating Co
To:	Document Control Desk, Office of Nuclear Material Safety and Safeguards, Office of Nuclear Reactor Regulation
References
L-14-215
Download: ML14183B295 (36)

Text

341 lilhite Pond Drive Akron, Ohio 44320 Peter P. Sena III President and Chief Nuclear July 2, 2014 L-14-215 330-436-l 350 10 cFR 50.75 10 cFR 72.30(b)

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 Beaver Valley Power Station ISFSI Docket No. 72-1043 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 Replacement of Parental Guarantees By letter dated June 18,2013 (Accession No. ML13169A262),

the FirstEnergy Nuclear Operating Company (FENOC) submitted to the Nuclear Regulatory Commission (NRC) an amended and restated $125 million parental guaranty from FirstEnergy Corp. (FE) to FirstEnergy Nuclear Generation, LLC (FENGenCo).

The $125 million guaranty from FE replaced a previous parental guaranty in the amount of $95 million, and it provided additional decommissioning funding assurance for Beaver Valley Power Station, Unit No. 1 (BVPS-1) and Perry Nuclear Power Plant (PNPP).

By letter dated June 18,2013 (Accession No. ML13169A322),

FENOC submitted an amended and restated

$11 million parental guaranty from FE in order to provide required financial assurance for the Independent Spent Fuel Storage Installations (lSFSls) for PNPP and Davis-Besse Nuclear Power Station (DB).

The $11 million guaranty satisfied the obligations of FENGenCo and the Ohio Edison Company (OE) to provide financial assurance for the PNPP and DB lSFSls.

Beaver Valley Power Station, Unit No. 1 Beaver Valley Power Station ISFSI Davis-Besse Nuclear Power Station ISFSI Perry Nuclear Power Plant Perry Nuclear Power Plant ISFSI L-14-215 Page 2 FENOC has determined the amount of additional financial assurance required for BVPS-1 and PNPP decommissioning has increased from $125 million to $155 million. Therefore, FENGenCo has obtained a parental guaranty in the amount of

$155 million from its direct parent company, FirstEnergy Solutions Corp. (FES).

Thus, this letter and the $155 million parental guaranty attached as Enclosure A

provide notice of the cancellation of the $125 million guaranty from FE. The required FinancialTest and Certification for FES is provided in Enclosure B. The

$155 million guaranty takes effect upon cancellation of the $125 million guaranty.

In addition, FENOC has determined that a total of $20.5 million in financial assurance will be required for the decommissioning of the PNPP, DB, and Beaver Valley Power Station (BVPS) tSFSls. Of this amount, approximately

$2.7 million is to be provided by OE and The Toledo Edison Company (TE) for their interests in the PNPP and BVPS lSFSls, and approximately

$17.8 million is to be provided by FENGenCo for its interests in the PNPP, DB, and BVPS lSFSls. Thus, FE amended the existing

$11 million guaranty to meet the obligations of OE and TE, as set forth in the Amended and Restated

$4 million parental guaranty provided as Enclosure C. The required FinancialTest and Certification establishing FE's qualifications to provide a $4 million guaranty was provided by letter dated March 28,2014 (Accession No. ML14087A454).

The $4 million guaranty will take effect 30 days after receipt of this notice by the NRC. Further, FENGenCo has obtained a $19 million parental guaranty from FES, which is provided as Enclosure D. The required Financial Test and Certification for FES is provided in Enclosure B. The $19 million guaranty will take effect 30 days after receipt of this notice by the NRC.

There are no regulatory commitments contained in this letter. lf there are any questions, or if additional information is required, please contact Mr. Thomas A. Lentz, Manager-Fleet Licensing, at (330) 315-6810.

Sincerely,

/*Pdr Peter P. Sena. lll

Beaver Valley Power Station, Unit No. 1 Beaver Valley Power Station ISFSI Davis-Besse Nuclear Power Station ISFSI Perry Nuclear Power Plant Perry Nuclear Power Plant ISFSI L-14-215 Page 3

Enclosures:

A. $155 Million Parental Guaranty B. FinancialTest and Certification for FirstEnergy Solutions Corp.

C. $4 Million Parental Guaranty D. $19 Million Parental Guaranty cc: NRC Region lAdministrator NRC Region lll Administrator NRC Resident Inspector for BVPS NRC Resident Inspectorfor DBNPS NRC Resident Inspector for PNPP NRC Project Manager for BVPS NRC Project Manager for DBNPS NRC Project Manager for PNPP Director BRP/DEP Site BRP/DEP Representative Utility Radiological Safety Board

Enclosure A

L-14-215

$155 Million Parental Guaranty (Seven pages follow)

1.

PARENTAL GUARANTY GUARANTY, dated as of June 30,2}l4,made by FirstEnergy Solutions Corp., an Ohio corporation (the "Guarantor') to Guarantor's wholly owned subsidiaty, FirstEnergy Nuclear Generation, LLC ("FENGenCo'

).

wlINEgsErH:

WHEREAS, FENGenCo is a direct, wholly owned subsidiary of the Guamntor and is licensed to possess a 100% undivided ownership interest in Beaver Valley Power Station, UnitNo. I ("BVPS l") and an87.42% of the undivided ownetship intetest in the PenyNuclear Powsr Plant ('Perry');

WHEREAS, the U,S, Nuclear Regulatory Commission ("NRC') has promulgated regulations in Title 10, Chapter I of the Code of Federal Regulations ("CFR'), Paft 50 which require that a holdet of or an applicant for, a license issued putsuant to 10 CFR Part 50 provide assurance that funds will be available when needed for required decommissioning activities; WHEREAS, tlre Guarantor receives substantial benefits fi'om owning its subsidiary, FENGenCo (which benefits are hereby acknowledged), and accoldingly, desites to execute and cleliver this duaranty in or.der to provide financial assurance for FENGenCo's obligations for tlre decommissioning of BVPS 1 and Perry as required by 10 CFR Part 50; and WHEREAS, this $155 million Parental Guaranty replaces the $125 rnillion Amended and Restated Parental Guaranty issued by FirstEnergy Corp, and dated June 11, 2013, and Notice is hereby given of the canceliation of the $125 rnillion Parcntal Guaranty frorn FirstEnergy Corp.

NOW, TI-IEREFORE, in consideration of the foregoing and other benefits ac$uing to the Guarantor, the receipt and sufficiency of which are hereby acknowledged, tfre Guarantor hercby rnakes the following representations and warmnties to FENGenCo and hereby covenants and agrees as follows:

The Guarantor has full authority and capacity to enter into this Guatanty under its bylaws, afiicles of incorporation, and the laws of the State of Ohio, its state of incorporation.

Guarantor has apploval fi'om its Board of Directors to enter into this Guaranty.

This Guaralty is being issued so that FENGenCo will be in eompliance with regulations issued by the NRC, uiug"n"y of the U.S. Government, putsuant to the Atomic Energy Act of 1954, as amended, and t[e Eirergy Reorganization Act of 1974, The NRC has promulgated regtrlations i1Title 10, Chapter I of the Code of Federal Regulations, Part SO,_whichrequirc thlt a holder of, or an appliiant for, a licerrse issued putsuant to 10 CFR Part 50 provide assurance that funds wiifUe available when needed for reqnired decommissioning activities.

This Guaranty is issued to provide financial assurance for decommissioning activities for BVPS 1, Docket No, S0-3i4, License No. DPR-66, and Pemy, Docket No. 50-440, License No, NPF-58, as requirecl by 10 CFR Part 50. The decommissioning costs for BVPS 1 and Perry are guaranteed in the amount of $155 million.

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Tlre Guarantor will meet or exceed the ctiteria fiom Financial Test lI'A.2 from 10 CFR Part 30, Appenclix A and agrees to notify FENGenCo and the NRC of any changes in its ability to rneet the Appendix A criteria in compliance with the notification requircments as specified in 10 CFR Part 30. Specifically, the Guarantor will possess:

(aXD A current rating of its most recent uninsured, uncollateralized, and unencumbered bond issuance of BBB-or higher as issued by Standard and Poor's, or Baa3 or higher as rated by Moody's; and (ii) Turgible net worth is at least $21 million and total net worth of at least six times the amount of decommissioning fuirds being assuted by this guatantee; and (iii) Assets located in the United States amounting to at least 90 pelcent of its total assets or at least six times the current deconulissioning cost or Guamnty amount, The Guarantor has a rnajority control of the voting intercsts in FENGenCo. FENGenCo is located at ?6 Sotrth trrtain Street, Akrrcn, Ohio 44308. FENGenCo owns the BVPS 1 facility' License No. DPR-66 ancl has at87,42 o/o interest in the Perry facility, License No. NPF-58.

The term'.decommissioning activities" as used herein refers to the activities required by 10 CFR Part 50 for decommissioning of the facilities identified above.

The Nuclear Decommissioning Master Trust Agreement, entered into with Mellon Bank, N,A. (now, Bank of New York Mellon, a New York state bank having tfust powers) on December 1,2005, was established to maintain funds for decommissioning. This master trust agreemenr sets up the FE BVPS 1 Nonqualified Fund and the FE Perry Nonqualified Fund, ivhich will serve as the "standby trustsl'contemplated by the NRC's regulations for payment of funds under this guarantee.

For value rcceivecl fi.on FENGenCo and pursnant to the authority confened upon the Guarantor, the Guarantor guarantees ttratlf n'BNGenCo fails to pelform the requited decommissioning activitie;, as required by License No. DPR-66 and License No. NPF-58, due to lack of funds, the Guarantor shall:

(a) pr.ovide a1l funds necessary, up to the amount of this Guaranty to caily out the required activities; or (b) pay into the existing trust fund referenced in Patagraph T the amount of this GuarantY for these activities.

The Guarantor agrees to submit revisecl financial statements, financial test data, and a special auditor's report and rcconciling schedule to the NRC annually within 90 days of the close of the parent Guaratrtor's {iscal year.

The Guarantor and FENGenCo agree that if the Guarantor fails to meet the financial test criteria at any time after this Guaranty is established, the Guarantor and FENGenCo shall send, within 90 days of the end of the fiscal year in which the Guarantor fails to rneet the financial test criterlia, written notice to the NRC using NRC's electtonic infotrnation 5.

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t2, exchange. Such rvritten notice also should be made by FENGenCo within 90 days of any matters conring to the auditor's attention which cause the auditor to believe that the data specified in the financial test should be adjusted and that the Guarantor no longer passes the test. 1f FENGenCo fails to provide alternative financial assurance as specified in 10 CFR Part 50, as applicable, whichmust be submitted to NRC within 120 days of the end of such fiscal year oi upott making notice that the Guarantor no longer passes the t9st, and obtain written apptouul of such assulance from the NRC within 60 days of the submittaln the Guarantor.shall provide such altemative financial assurance inthe name of FENGenCo or make full payment under the Guaranty to the existing standby trust established by FENGenCo.

Independent of any notification under paragraph 8 above, if the NRC determines for any reason that the Guarantor no longer meets the financial test criteria or that it is disallowed from continuing as a Guarantor for the facilities under License No. DPR-66 and License No. NPF-58, th-e Guarantor agrees that within 90 days after being notified by the NRC of suc.h determination, an alternative financial assurance mechanism as specified in 10 CFR par.t 50 as applicabie, shall be established by the Guarantor in the name of FENGenCo unless FENGerrCo has done so.

The Guarantor as well as its successors and assigns shall remain bound jointly and severally under this Guaranty notwithstanding any or all of the following: amendment or modification of license or NRC-approved clecominissioning funding plan for that facility, the extension or reductiol of the timilf pelformance of required activities, or any other modification or alteration of an obligation of FENGenCo pursuant to 10 CFR Par150.

The Guarantor agrees that it will be liable for all litigation costs incurred by FENGenCo or the NRC in any zuccessful effort to enforce the agreement against the Guarantor.

The Guarantor agrees to remain bound under this Guaranty and financial test provisions for the previously listed facilities until the Commission has teuninated the licenses, accepted in writlng the parent company's alternate financial assurances' or accepted in writing the licensie's financial urruran"r, except that this Guamnty may be amended by the agfeement of Guarantor and FENGeICo with lO duyr prior written notice to tlre NRC, and except that the Guamntor may cancel this Guaranty 6y sending written notice to the NRC using NRC's electronic information exchange, such cancellation to become effective no eaflier than 120 days after receipt of such notice by theNRC as evidenced by the teturn leceipts.

Guarantor shall also notifr FENGenCo. If FENGenCo fails to provide alternative financial

• rutur.r as specified in iO CpR Part 50, as applicable, and obtain written approval of such assurance within 120 days after the sending of the above notice by the Guarantor, the Guarantor shall provide such alternative fiiancial assurance, or make full payment under tlre Guaranty to the existing standby trust established by FENGenCo.

The Guarantor expressly waives notice of acceptance of this Guatanty by the NRC or by FENGenCo. The Guarantor also expressly waives notice of amendments ot modification of the decommissioning r.equirements and of amendments or modifications of the licenses.

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The Guarantor files financial reports with the U.S, Securities and Exchange Commission (SEC), which are available to NRC and need not be submitted separately in accotdance with 10 cFR s0.7r(b).

The Guarantor agrces that if the Guarantor admits in writing its inability to pay its debts generally, or makes a general assignment for the benefit of cfleditors, ol any proceeding is instituted by or against the Guarantor seeking to adjudicate it as bankrupt or insolvent or seeking clissolution,liquidation, winding-up, reorgalization, an'angement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, or reorganization or rrclief of debtors, ot seeking the entry of an order fot relief or the appointment of a receiver, trustee, custodian, or other similar offrcial for the Guarantor or for any substantial part of its property, or the Guarantor takes any action to authorize or effect any of the actions stated in this paragraph, the Commission may:

(a) declate that the financial assurance guaranteed by the this Guaranty is immediately due and payable to the existing lust referenced in Paragraph 7, without diligence, prcsentment,

dernand, protest, or any other notice of any kind, all of which ate exprrssly waived by Guarantor; or (b) exercise any and all of its other rights under applicable law.

The Guarantor agrees to notify the NRC, in writing, irnmediately following the filing of a voluntary or involuntary petition for bankruptcy under any chapter of title l1 (Bankruptcy) of the United States Code, or the occurrence of any other event listed in Paragraph 1?, by or against:

(a) the Guarantor; (b) FENGenCo; (c) an entity (as that term is defined in 11 U.S.C. 101(15) contrnllirrg FENGenCo or listing the license or FENGenCo as property of the estate; or (d) an affiliate (as that term is defined in 11 u.s.c. 101(2) of FENGenCo.

The notificalion required by Paragtaph 18 must include the following:

(a) a description ofthe event, including major creditors, the amounts involved, and the actions iaken to assure that the amount of funds guaranteed by this Guatanty for decomrnissioning will be transfemed to the existing trust referenced in Parcgraph7 as soon as possible; (b) if a petition of bankluptcy was filecl, the identity of the bankluptcy cou$ in which the petition fot bankruptcy was filed; and (c) the date of filing of any petitions.

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This Guaranty and the rights and obligations of the FENGenCo and the Guamntor hereunder, shall be goveined by and construed in accordance with the domestic laws of the State of Ohio without giving effect to any choice or conflict-ofJaw provision or rule (whether of the State of Ohio ot uny other jurisdiotion) that would cause the application of the laws of any jurisdiction other than the State of Ohio. The Guarantot and the FENGenCo each consent to ihe exclusive jurisdiction and venue of any state or federal court within the State of Ohio for adjudication of uny suit, claim, action or other proceeding at law or in equity relating to this Guaranty, or to any transaction contemplated hereby. The Guarantor and FENGenCo each accept, generally and unconditionally, the exclusive jurisdiction and venue of the aforesaid "outir rta waive any objection as to venue, and any defense offormt non conveniens. The Guarantor hereby irrevocably consents to the service of process out of any of the aforernentioned courts in any such action or prnceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the Guarantor at its addrrcss set forth opposite its signature belorv, such seivice to 6ecorne effective 30 days after such mailing' Nothing herein shall affect the right of FENGenCo to serve process in any other manner pemitted by law or to commence tegal proceedings or otherwise ploceed against the Guarantor.in any other jgrisdiction. The-Gulrantor hereby irrevocably waives any objection which.it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection wiitr the Guaranty brought in the courts refen'ed to above and hereby further inevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

All notices and other communications hereunder shall be made to the Guarantor's Chief Financial Officer and General Counsel at34l White Pond Drive, Akron, Ohio 44320' If it is ever determined that the Arnended and Restatecl Parental Guaranty dated June 11, 2013 issued by FirstEnergy Corp. in the amount of $125 million ("$125 MillionGuaranty'),

or any prior Guaranty for:decommissioning, remains enforceable and not properly cancelled,

,evok"i and rescindia *ittt no furlher force and effect, than the amount of this Guaranty specifiecl in Paragraph 3 hereof shall be redtrced by the amo91t specified in such pdor duaranty which i.emains in effect. For avoidance of doubt, Notice is hereby given to the NRC of the cancellation of the obligations of FirstEnergy Corp. under the prior $125 Million Guamnty, and this Guaranty is provicled as the alternative assul'ance required by Section 14 of the $125 Million Guaranty.

This Guaranty shall leplace the existing $125 Million Guaranty issued by FirstEneryy Cory' The $125 Million Guaranty took effecion July 18, 2013, 30 days after the June 18, 2013 notice submitted to NRC, and it cancelled the prior Guaranty dated December 17, 2012. This Guaranty shall be effective upon aancellation of tlte $125 Million Guaranty, which shall or",,r. upol the earlier of either: (a) rn'itten agreement by the NRC of acceptance of this Guaraniy ancl cancellation of the $iZS tttittion Guaranty; or (b) ttre eyiflion.of 120 days after r.eceipt by the NRC of this written notice of cancellation of tlre $125 Million Guaranty and replacement with this Guaranty pursuant to the teffns of Section 14 of the $125 Million Guaranty.

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IREMATNDER OF PAGE INTENTIONALLY LEFT BLANK]

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The undersigned has caused this Guaranty to be executed and delivered as ofthe day and year first above written.

F'irstEnergy Solutions Corp.

By Steven R. Staub Vice President

& Treasurer Acknowledged as of June 30,2014 FlrstEnergy Nuclear Generation, LLC By Rhonda S. Ferguson Viee President

& Cotporate Secretary Page 6

CERTIFICATION I hereby certify that this Guaranty is true and colrest to the best of my knowledge.

Effective date: June 30,2014 FirstEnergy Solutions Corp.

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By fi{iu

l{'.o#lc'tU Steven R. Staub Vice Plesident & Treasurer STATE OF OHIO COIJNTY OF SUMMIT Subscribed ancl swor.n to nre, a Notary Publis, in and for the County and State above nanred, this,fu zt-day of June, 2A14.

My Commission ExPires: ilrc /a" 7 '

STATE OF OHIO COUNTY OF SUMMIT Subscribed and swortr to me, a Notary

nanred, thisffiday of June, 2014, Public, in and for the County and State above Nuclear Generation' LLC Rhonda S. Ferguson Vice President &

Publlc, State of Ohio

Enclosure B

L-14-215 FinancialTest and Certification for FirstEnergy Solutions Corp.

(Five pages follow)

June 30,2014 ATTN: Document Control Desk U.S, Nuclear Regulatory Commission Washington, DC 20555-000 I

Subject:

FirstEnergy Solutions Corp. Guarantee of Funds for Decommissioning:

Letter from Chief Financial Oflicer to Demonstrate Financial Assurance I am the Senior Vice President and Chief Financial Officer of FirstEnergy Solutions Corp., 341 White Pond Drive, Akron Ohio 44320, an Ohio corporation. This letter is in support of this firm's use of the financial test to demonshate financial assurance, as specified in 10 CFR Part 50 and CFR Part72' This firm is qualified to provide parent company guarantes, up to $l?4 rnillion for the decommissioning costs for the portions ol the following facilities owned by this firm. The current cost estimate and the amount to be guaranteed for the portions of the facilities owned are shown as follows:

Location of Current Name of Facility Facility Cost Estimates Beaver Valley Power Shippingport, PA

$ 510,139,000 Station, Unit No. I License No. DPR-66 Perry Nuclear Power Plant Perry, OH S 596,221,884 License No. NPF-58 Davis-Besse Nuclear Oak Harbor, OH S

4'639,427 Power Station Independent Spent Fuel Storage Installation Docket No. 72-14 Amount to be Guaranteed 90,000,000

$ 65,000,000 5,000,000 Perry Nuclear Power Plant Perry, OH lndependent Spent Fuel Storage Installation Docket No. 72-69 Beaver Valley Power Shippingport, PA Station Independent Spent Fuel Storage Installation Docket No. 72-1043

$ 5,313,204 6,000,000 7,287,080 8,000,000 FirstEnergy Solutions Corp. is required to file a Form l0-K with the U.S. Securities and Exchange Commission for the latest fiscal year.

The fiscal year of FirstEnergy Solutions Corp. ends on December 3l't. The figures for the following items (Financial Test II: Alternative II) marked rvith double asterisks are derived from FirstEnergy Solutions Corp,'s independently audited, year-end financial statements and footnotes for the latest completed fiscal year ending December 31,2013.

I hergby certi$/ that the content of this letter is true and correct to the best of my knowledge.

s F. Pearson Vice President and Chief Financial Offtccr, FirstEnergy Solutions Corp' 30,2014

FINANCIAL TEST: ALTERNATIVE II (10 CFR part 30 App. A.Section II A.2.)

FirstEnergy Solutions Corp. Parent Guarantee of Funds for I)ecommissioning Dollars in Millions

l. GuaranteedamountforthefollowingUnits:

174'0 Beaver Valley Power Station, Unit No. 1, License No. DPR-66 Beaver Valley Power Station, TSFSI Perry Nuclear Power Plant, License No, NPF-58 Davis-Besse Nuclear Power Station, ISFSI Perry Nuclear Power Plant, ISFSI

2. Curuent bond rating of most recent unsecured issuance of this firm Rating Baa3 Name of Rating Service MoodY's

3. Date of issuance of bond 81712009

4. Date of maturity of bond 8115/2021 EL slrs/2039

• • 5. Tangible Net Worth 1'702

• 6. Total assets in the United States (required only if less than 90 percent of firm's assets are located in the United States)

See line 9 below Yes-No.

7. Is Line 5 at least $21 million?

X

8. Is line 5 at least 6 times line l?

X

9. Are at least 90 pefcent of the finn's assets located in the United States?

X If not, complete line 10.

10. Is line 6 at least 6 times line l?

N/A I L Is the rating specified on line 2 "BBB" or better (if issued by Standard and Poor's) or "Baa" or better (if issued by Moody's)?

X

• Denotes figures derived from financial statements,

• + Tangible Net Worth is defined as FirstEnergy Solutions L-orp. total equity minus goodwill, patents, trademarks and copyrights; and FirstEnergy Solutions Corp.'s net book value for Beaver Valley Power Station, Unit No. 1 and 2, Perry Nuolear Power Plant and Davis-Besse Nuclear Power Station.

FIRSTENERGY SOLUTIONS CORP.

YEAR ENDED DECf,MBER 3I, 2OI3 Dollars in Millions Line Nrunber in CFO's Le$er Total Equity Less:

Goodwill, Patents, Trademarks and Copyrights Other Intangible Assets Net Book Value Beaver Valley Power Station, UnitNo. I Net Book Value Beaver Valley Power Station, UnitNo. 2 Net Book Value Perry Nuclear Power Plant Net Book Value Davis-Besse Nuclear Power Station 5 *

'l'angible Net Worth Per Financial Statements 5,312 24 129 404 1,130 l,l l6 847 1,702

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pwc Report of Independent Accountants To FirstEnergy Solutions Corp.:

We have performed the procedures enumerated below, which were agreed to by management of FirstEnergy Solutions Corp. (the "Company") solely to assist you in evaluating the Company's compliancc with the financial test as of December 3r, zor3 performed in accordance with the U.S.

Nucleal Regulatory Commission (the "NRC") Regulations ro C.F.R, Section So,ZS(eXtXiiiXB) and to C.F.R, Section Zz.go(eXz) as rnandated by the Parent Company Guarantees. Management is responsible for the Company's compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any othcr pulpose.

For the purpose of this report, we have:

1. Read the letter, dated June 3o, zor4, from your Senior Vice President and Chief Financial Officer to the NRC regarding the $174 million Parental Company 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 prepared by the Company from its audited financial statements noting no differences.

B. T?aced ard agreed the amount in the column "Per CFO's Letter" to linc item +5 in the Company's Financial Test: Alternative II.

C. Recomputed the Tangible Net Worth by subtracting the Company's goodwill, patents, trademarks, copyrights; and FirstEnergy Corp.'s net book value of Beaver Valley Power Station, Unit No. 1 and 2, Davis-Besse Nuclear Power Station and Perry Nuclear Power Plant from the Company's stockholders' equity noting no differences.

D. Inquired of the Vice President, Controller and Chief Accounting Officer regarding whether any off balance sheet transactions exist that could materially adversely affect the ability of the Company to pay decommissioning costs-He responded that all material off-balance sheet transactiotrs have been disclosed in the Company's financial statements as filed in its zor3 Annual Report on Form ro-K, and he does not believe that any of the off-balance sheet transactions will materially adversely affect the Company's ability to pay deconrmissioning costs. We did not perform any fttrther procedures to substantiate managcmcnt's response.

E. We compared the bond ratings per line z of the letter to information obtained as of,Iune Jo,2aL4 from an external, publicly available source as follows:

-: - j We r,r'ere not engaged to and did not conduct an examination, the objective of which rvould be the expression of an opinion on compliance. Accordingly, we do not erpress such an opinion. Had we performed additional procedures, other matters might hal'e come to our attention that would have been reported to you.

PricewaterhouseCoopers LLP, 2oo Public Square, 78th noo1 Cleueland, OH 44tt4-zgot T: (zt6) 87s Jooo, F: (zt6) s66 7846,www.pwc.com/us

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wc This repoft is intended solely for the information and use of management of the Company and is not intended to be and should not be used by anyone other than these specified parties.

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' t' Pricewaterhousecoopers LLP June 3o, zor4

Enclosure C

L-14-215

$4 Million Parental Guaranty (Nine pages follow)

1.

a AMANDBD AND RESTATED PARENTAL GUARANTY GUARANTY, dated as of June 30,20l4,made by FirstEnergy Cotp., an Ohio corporation (the "Guararrtor') to Guarantot's wholly owned subsidialies, Ohio Edison Company f'OE") and The Toledo Edison Company (.'TE ).

wITNEgSETH:

WHEREAS, OE is a direct, wholly owned subsidiary of the Guamntor, and OE leases and is licensed to possess a 12.58% undivided ownership of the Pemy Nuclear Power Plant

('peny") and a2i.66oi intertst in Beaver Valley Power Station C'BVPS'), lJnit2, for which indepenient spent fuel storage installations

("ISFSIs") have been or are being developed for onsite storage ofspent nuclear fuel; WHEREAS, TE is a dircct, wholly owned subsidiary of the Guarantor, ancl TE leases and is licensed to possess an l8.26Vointerest in BVPS, Unit 2, for which an ISFSI is being developed for onsite storage ofspent nuclear fuel; WHEREAS, the U.S. NuclearRegulatory Commission

('NRC') has promulgated regulations in Title 10, Chapter I of the Code of Federal Regulations

('CFI{'), Part 72 which re{uire that a holder oi or un applicant for, a license issued pursuant to 10 CFR Par::1.72 plovide assurance that funds *itt br available when needed for required decommissioning activities; WHEREAS, the Guarantor receives substantial benefits fi'om owning its direct subsidiar.ies, OE a1d TE (which benefits are hereby acknowledged),

and accordingly, desires to execute and deliver this duaranty in order to ptovide financial assutance for oE's obligations for the decommissioning of the Peny ancl BVPS ISFSIs and for TE's obligations for the decornmissioning of th" BVPS ISFSI, as rcquired by 10 CFR Part 72;and WHEREAS, this $4 million Guaranty togetherwith a $19 million Patental Guaranty being provided separately by FirstEnergy Sotutions Corp. replaces the $11 million Arnended and Restatecl Parental Guararity issued by FirstEnergy Cory' dated June 1I,20L3' NOW, THEREFORE, in colsideration of the foregoing and other benefits accruing to the Guamntor, the receipt ancl suificiency of which are hereby acknowledgecl, the Guarantor hereby makes the followinj representations and warmnties to OE and TE, and Guarantor hereby covenants and agrees as follows:

The Guaraltor has fnll authority and capacity to enter into this Guaranty under its bylaws, articles of incorporation, and the laws of the State of Ohio, its state of incorpotztion.

Guarantor has approval fiom its Board of Directors to enter into this Guaranty.

This Guaralty is being issued so that OE and TE will be in compliance with regulations issued by the NRC, uriug"r.y of the U.S. Government, pursuant to the Atomic Energy Act of 1954, as amended, and tl-re Energy Reorganization Act of tgl+. TheNRC has promulgated reguiations in Titll 10, Chapter iof the Code of Federal Regulations, Pa$ 72, whichrequire thit a holder of, or an applicant for, a license issued putsuant to 10 CFR Patt'lZ provide assurance that funds wiiite available wlren needed for required decommissioning activities.

3.

4.

This Guaranty is issued to provide financial assurance for decommissioning activities for the Perry ISFSI, DocketNo.T2-69 and the BVPS ISFSI, Docket No. 72-1043, as required by 10 CFR Pafi7}. The decommissioning costs for the Peny and BVPS ISFSIs arc guaranteed in the amount of $4 nrillion, This amount exceeds 12,58o/o of the estimated cost of decommissioning the Perry ISFSI md19.96Yo of the estimated cost of decommissioning the BVPS ISFSI.

The Guarantor will meet or exceed the criteria fi'orn Financial Test II.A.2 fi'om 10 CFR Part 30, Appendix A and agrees to notify OE, TE and theNRC of any changes in its ability to meet the Appendix A criteria in compliance with the notification requirements as specified in 10 CFR Part 30. Specifically, the Guatantor will possess:

(aXl A cun'ent rating of its most recent uninsued, uncollateralized, and unencumbercd bond issuance of BBB-or higher as issued by Standard and Poor's, or Baa3 or higher as mted by Moody's; and (ii) Tangible net worth is at least $21 million and total net worth of at least six times the amount of decommissioning funds being assured by this guarantee; and (iii) Assets located in the United States amounfing to at least 90 percent of its total assets or at least six times the cun'ent decommissioning cost or Guaranty arnoutrt.

The Guarantor owns 100% ofthe voting stock of OE and TE. OE and TE are located at 76 South Main Street, Alcon, Ohio 44308. OE has a 12.58 04 intercst in the Peny ISFSI, and a 10.83%

interest in the BVPS ISFSI, by virtue of its 21.66%ointerest in BVPS, Unit 2. TE has a 9.13% interest in the BVPS ISFSI, by virtue of its 18.260lo interest in BVPS, Unit 2, The term "decomnfssioning activities" as used herein refers to the activities required by 10 CFR Pafi72 for decommissioning ofthe facilities identified above.

The Ohio Edison Company Master Decommissioning Trust Agreement dated July l, 1993, as

amended, nraintained by OE and the First Arnerrded and Restated Decomrnissioning Trust Agreement dated as of Decernber 20,1996, as amended, rnaintained by TE were established to maintain funds for decomrnissioning.

These hust agreements establish the OE Peuy Nonqualifred Fund, the OE BVPS 2 Nonqualified Fund, and TE BVPS 2 Nonqualified Fund, which will serve as the "standby tlusts" conternplated by the NRC's regulations for payment of funds under this Guatanty.

For value received fi'onr OE and fi'om TE pursuant to the autholity confened upon the Guarantor, the Guarantor guarantees that if OE or TE fails to perform the requirred decommissioning activities due to lack of funds, the Guarantor shall:

G) provide all funds necessary, up to the amount of this Guatanty to cany out the required activities; or pay into the existing trust fund referenced in Paragraph 7 the amount of this buaranty for these ictivities. The Guarantor will inshuct the trustee to rnaintain 5.

6.

n 8.

(b)

Page 2

9.

10.

the funds for each ISFSI in a separate subaccount fiom funds for general decommissioning activities.

The Guarantor agrees to submit revised financial statements, financial test data, and a special auditor's report and reconciling schedule to theNRC annually within 90 days of the close of the parent Guarantor's fiscal year.

The Guarantor, OE and TE agree that if the Guarantor fails to meet the financial test cdteria atany time after this Guarant! is established, the Guarantot,OE, and TE shall send, within 90 days of the end of the fiscal year in which the Guarantor fails to meet the financial test criteda, written notice to the NitC using NRC's electronic information exchange. Such written notice also should be made by OE and TE within 90 days of any malterl coming to the auditor's attention which cause the auditor to believe that the data specified inthe financial test should be adjusted and that the Guarantor no longer passes the tesl If OE or TE fails to provide alternative financial assurance as specified in 10 CFR Part7Z,as applicable, which rnust be submitted to NRC within 120 days of the end of such fiscal year or upott.ut ing notice that the Guarantor no longer passes the !est, and obtain written approval of such assurance from theNRC within 60 days of the submittal, the Guatantor shall provide such alternative financial assumnce in the name of OE and/or TE, of make full payment under the Guaranty to the existing standby trust(s) established by OE and/or TE.

Independent of any notification utrder paragraph 8 above, if the NRC determines for any lpason that the Guarantor no longer meets the financial test criteria or that it is disallowed from continuing as a Guamntor ior the facilities the Guarantor agrees that wi$n 90 days after being notilfied by the NRC of such detefmination, an alternative financial assurance rnechanisil as specified in 10 CFR Part72as applicable, sh1!l be established by the Guamntor irr the narne of OE andlor TE unless OE and/or TE has done so' The Guarantor as well as its successors and assigns shall remain bound jointly and severally urder this Guaranty notwithstanding any or a[ Jfthe following: amendment or modification of license or NRCjapproved decomirissioning funding plan for that facility, the extension or reduction of the time'of perfolmance of requiled activities, or any other modification or alteration of an obligation of oE or of TE purcuant to 10 cFR Pal/t7Z.

The Guarantor agrees that it will be liable for all litigation costs incurred by OE, TE, or the NRC in any.ot.t*tful effort to enfolce the agreement against the Guarantor' The Guarantor agrees to remain bound under this Guaranty and financial test pfovisions for tlre previously liJted facilities until the Commission has terminated the licenses, accepted in rvriting the parent company's alternate financial assurances, or accepted in writing the licensJe's frnancial urrurun ", except that this Guaranty may be amended by the agreement of Guarantor, OE and TE with 30 days prior written notice to the NRC, and except that the Guarantor may cancel this Guarantyiasencling written notice to the NRC using NRC's electr.onic information exchange, suchcancellaiion to become effective no earlier than 120 days after receipt of such irotice by NRC, as evidenced by the retutn receipts.-

Guafantor shall aiso notify oE and TE. If OE and/or.TE fails to provide altemative financial assurance as specified in i O CfR Part 72,as applicable, and obtain written approval of such assufance 11.

t2.

13.

14.

Page 3

15.

16.

17.

within 120 days after the sending of the above notice by the Guarantoq the Guarantor shall provide such altelnative financial assurance, or make full payment under the Guaranty to the existing standby trust established by OE and/or TE.

The Guarantor expressly waives notice of acceptance of this Guaranty by the NRC or by OE or by TE. The Guarantor also expressly waives notice of amendments ot modification of the decommissioning requircments and of amendments or modifications of the licenses.

The Guarantor files financial reports with the U.S. Securities and Exchange Commission (SEC), which are available to NRC and need not be submitted separately in accordance with l0 cFR72.80(b).

The Guarantor agrees that if the Guarantor admits in writing its inability to pay its debts generally, or makes a general assignrnent for the benefit of creditors, or any proceeding is instituted by or against the Guarantor seeking to adjudicafe it as banklupt or insolvent, or seeking dissolution, liquidation, winding-up, reorganization, alrangement, adjustment, protection, r'elief or composition of it or its debts under any law relating to banla'uptcy, insolvency, or reorganizationor relief of debtors, or seeking the entry of an order for relief ot the appointment of a receiver, trustee, custodian, or other sirnilar official for the Guarantor or for any substantial part of its prope*y, or the Guarantor takes any action to authorize or effect any of the actions stated inthe paragraph, the Commission may:

(a) declare that the financial assurance guaranteed by the this Guaranty is irmnediately due and payable to the existing trust referenced in Paragraph 7, without diligence, plsentment,

demand, protest, or any other notice of any kind, all of which are expressly waived by Guarantor; or (b) exercise any and all of its other rights under applicable law.

The Guarantol agrees to notify the NRC, in writing, immediately following the filing of a voluntary or involuntary petition for bankruptcy under any chapter of title 1l (Bankruptcy) of the United States Code, or the occuilnce of any other event Iisted in Paragraph lT, by or against:

(a) the Guarantor; (b) oE; (c) TE; (d) anentity(asthattermisdefinedin II U.S.C.

101(15)controllingOBorTEorlisting the licenses, OE or TE as property of the estate; or (e) an affiliate (as that tetm is defined in 11 U.S'C. 101(2) of OE or TE.

18.

Page 4

19.

The notification required by Paragraph 18 must include the following:

(a) a description of the event, including major creditols, the amounts involved, and the actions iaken to assure that the amount of funds gttaranteed by this Guaranty for decommissioning will be h.ansfen'ed to the existing trust referenced in Paragraph 7 as soon as possible; (b) if a petition of bankruptcy was filed, the ictentity of the bankruptcy cour1 in which the petitiorr fot bankruptcy was filed; and (c) the date of filing of any petitions.

This Guaranty and the rights and obligations of the OE, Tg and the Guatantor hereuncler, shall be goveined by andconstrued iriaccordance with the domestic laws of the State of Ohio without lining effect to any choice or conflict-of-law provision or rule (whether-of the State of Ohio ot u"V other jurisdiction) that would cause the application of the laws of any jurisdiction oiher than the State of Onio. The Guarantot, OE, and TE each consent to the Lxclusive jurisdiction and venue of any state or federal court within the State of Ohio for adjudicatibn of any suit, claim, action or other proceedlng at law or in equity relating to this Guaranty, or to any transaction contemplated hereby. The Guarantot, OE, and TE each accept, fenerally and unconditionally, ihe exclusive jurisdiction and venue of the aforesaid

.ouri5 ui l waivl any objection as tovenue, and any defense offorum non conveniens' The Guarantor hereby irrevocably consents to the service of proeess out of any of the.

aforementioned courls in any such action or proceeding by the mailing of copies thereof by registerccl or certified mail, postage prepaid,io the Guarantor at its address set forth opposite its signature below, such seivice io become effective 30 days after such mailing. Nothing herein shall affect the right of oE or TE to serve pfocess in any other manner permitted by law or to comrnence legil pr.oceedings or otherwise ptoceed againstthe Guarartor.in any other jurisdiction. thJGuarantor heieby iuevocably waives any objeotion which.it may now or hereafter have to the laying of venue

-of uny of thi aforesaid actions or proceedings atising out of or in comrection with the Guaranty blought in the courts refen'ed to above and hereby fgfiher iuevocably waives atrd agrces not to plead or claim in a1y such coutt that any such action or pr.oceedilg brought in a'ny such couit has been brought in an inconvenient forum.

All notices aud other communications hereunder shall be made to the Guatantor's Chief Financiat Officer and General Counsel at 76 South Main Street, Akron, Ohio 44308' If it is ever determined that the Amended and Restated Parental Gualanty dated June 11, 2013 issued by Firstgnergy Cory the amount of $11 million f'$11 Million Guaranty"),

or any prior Guaranty for lSFslieconrmissioning, remains enfofceable and not properly cancelled, ievoked and rbscinded with no further force and effect, than the amount of this Guamnty specifiecl in paragraph 3 hereof together with the amount provided in the $19 million dqaranty being ptouia.O separateiy by FirstEnergy Solutions Corp. shall be recluced by the amount specifiea in such prior Guaranty which rJmains in effect. For avoidance of doubt, Notice is hereby given toihe NRC of the cancellation of the obligations of FirstEnergy Corp' under the $11 Milliol Guaranty and any prior Parental Guaranty fot ISFSI decommissioning, alcl this Guaranty is provided as the alternative assurance required by Section 14 of tlre 20.

2t, 22.

Page 5

23.

$11 Milliol Guamnty for the ISFSI decommissioning obligations of OE and TE and only OE and TE.

This Guaranty shall rcplace the existing $11 Million Guaranty issued by FirstEnergy Corp.,

with respectio the obligations of OE with respect to the Perry ISFSI. In addition, it guarantees the ISFSI decommissioning obligations of OE and TE with respect to the BVPS iSfSl The $11 Million Guar.anty took effect on July 18, 2013, 30 days aftet the June 18, 2013 notice submitted to NRC, and it cancelled the prior Guaranty dated December 17, 2012.

This Guaranty shall be effective 30 days after rcceipt by the NRC of written notice of this

Guaranty, uni6r a wr:itten notice of objection by NRC is received within such 30 days.

IREMATNDER OF PAGE INTENTIONALLY LBFT BLANK]

Page 6

The undersigned has caused this Guaranty to be executed and delivered as of the day and year first above u,ritten.

FirstBnergy Corp.

BY

,{,n-n L

,4lL__"- \\{, 4}.t7*,J, Steven R. Staub Vice President & Treasurei Acknowledged as of June 30,2014 Rhonda S. Ferguson S, Fetguson Vice President Ohio Edisorr Compan The Toledo Edison Company PageT

CERTIFICATION I hereby cefiify that this Guaranty is true and corect to the best of my knowledge.

Effective date: June 30,2014 FirstEnergy Corp.

tr']

/\\

f 'l nv

• &{;- {1.#forJ" Steven R. Staub Vice President

& Treasurer STATE OF OHIO COUNTY OF SUMMIT Subscribed and sworn to me, a Notary Public, in and for the County and State above narned, this $ilt" day of June,2014.

Rhonda S. Ferguson Vice President & Corporate Secretary STATE OF OHIO COUNTY OF SUMMIT subscribed and sworn to lne, a Notary Public, in and for the county and State above named, thisrf#,eday of June, 2414.

ission Expircs:

Ql4/ aa ry^

Ohio Edison Comp-any Page 8

The Toledo Edison Company Vice President

& Corporate Secretary STATE OF OHTO COI.JNTY OF SUMMIT Subscr.ibed and sworn to rne, a Notary Public, in and for the County and State above naned, thisfuftday of June, 2014.

Page 9

Enclosure D

L-14-215

$19 Million Parental Guaranty (Eight pages follow)

1.

PARENTAL GUARANTY GUARANTY, dated as of June 30,2}l4,rnade by FirstEnergy Solutions Cotp., an Ohio corporation (the "Guarantor') to Guarantor's wholly owned subsidiary, FirstEnergy Nuclear Generation, LLC ("FENGenCo").

WITNES$ETH:

WHEREAS, FENGenCo is a direct, wlrolly owned subsidiary of the Guarantor and is licensed to possess a 100% undivided ownership interest in Davis-Besse Nuclear Power Station

(,Davis-Besse'), an87.42% undivided ownership intetest in Peny Nuclear Power_Plant

(,?eny"), a l}io/oundivided ownership interest in Beaver Valley Power S!aji91 ("BVPS'),

ilnit f, *O u OO.OS%

undivided ownership interest in BVPS, Unit 2, for which independent -

spelt fuel storage installations

("ISFSIs") have been or rue being developed for onsite stomge of spent nuolear fuel;

WFIEREAS, the U.S. Nuclear Regulatory Commission

("NRC') has prolmulgated regulations in Title 10, Chapter I of the CoA" of p..leral Regulations

("CFItJ.Part 72 which

,ef,uire that a holde, oi o* an applicant for, a license issued pusuant to 10 CFR Pa*72 provide ur*r*""

that funds *ilt br available when needed for required decommissioning activities; WHEREAS, the Guarantor rcceives substantial benefits from owning its dircct subsidiary, FENGenCo (which benefits are hereby acknowledged),

and o*otqlgry' desires to execute and deliver this buaranty in order to prwide financial assurance for FENGenCo's obligations for the decommissioning of the Davis-Besse, Peffy and BVPS ISFSIs, as required by 10 CFR Pafi72;and WHBREAS, this $19 million Guaranty, together with a $4 million Guaranty being provided separately-by FirstErrergy Corp., replaces the $l l million Anrended and Restated irarBntal Guaranty issued by FirstEnergy corp. dated June 11,2413.

NOW, THEREFORE, in consicleration of the foregoing and olher-benefits accrning to the Guaraltor, the receipt and suificiency of which are hereby acknowledgecl, the Guarantor hereby makes the followinj representations and walanties to FENGenCo, and Guamutot hercby covenants and agrees as follows:

The Guarantor has full author.ity and capacity to enter into this Guaranty under its bylaws, articles of incorporation, ancl the laws o-f the-State of Ohio, its state of incotporation' Guarantor has approval from its Boald of Directors to enter into this Guaranty.

This Guaranty is being issued so that FENGenCo will be in compliance with regulations issuecl by the NRc, an agency of the u.S. Governrnent, pursuant to the Atomic Energy Act of 1954, as anrended, and tile Energy Reorganization Act ot-tgl+' The NRC has promulgated regulations in Titil 10, Chapter Ilf tn 6ocle of Federal Regulations, Part ?2, which require thit a holder of, or an applicant for, a license issuecl pursuant to 10 CFR Patt72 plovide assurance that funds will be available when needed for requited decomrnissioning activities.

2.

3.

This Guaranty is issued to provide financial assurance for decommissioning activities for the Davis-Bess" iSFSI, Docket No. 72-14, the Perry ISFSI, Docket No. 72-69, and the BVPS ISFSI, Docket No. 72-1043, as required by 10 CFR Part 72. The decommissioning costs for the Davis-Besse, Perry anA-gVpS ISFSIs are guamnteed in the amount of $19 million. This anrount exceeds 100/r of the estimated cost of decornmissioning the Davis-Besse ISFSI' 87.42%of the estirnated cost of decommissioning tlre Peruy ISFSI, and 80.04% of the estimated cost of decornmissioning the BVPS ISFSI.

The Guarantor will meet or exceed the ctiteria fiom Financial Test II.A.2 frnm 10 CFR Par 30, Appendix A and agrees to notify FENGenCo and the NRC of any changes in its ability to meet the Appendix A criteria in compliance with the notification requirements as speciired in 10 CFR Part 30. Specifically, the Guarantor will possess:

(aXi) A current rating of its most recent uninsured, uncollateralized, and unencumbered bond issuance of ggg-or higher as issued by Standard and Poor's, or Baa3 or higher as mted by MoodY's; and (iD Tangible rret lvorth is at least $21 rnillion and total net worth of at least six tinres the amourrt of decornmissioning funds being assurcd by this guarantee; and (iii) Assets located in the United States amounting to at least 90 pereent of its total assets or at least six times the current decommissioning cost or Guaranty amount.

The Guarantor has a rnajority corrtrol of the voting interests in FENGenCo. FENGenCo is located at ?6 South tvtain stieet, Aklon, ohio 44308. FENGenco owns the Davis-Besse facility, has an 87.4z%interest in the Peffy facility: d h.ut-l" 80.04% interest in the BVPS facifity, by virtue of its 100% interest in BVpS, Unit 1 and 60.08% intet'est in BVPS, Unit 2' The term,decommissioning activities" as used herein rcfers to the activities required by 10 CFR PartT2for decommissioning of the facilities identified above, The Nuclear Decommissioning Master Trust Agreement, entered into with Mellon Bank, N.A. (norv, Bank of New York Mellon, aNew Yolk state bank havingtrust powers) on Decenrber 1, 2005, was established to maintain funds for decommissioning.

This master trust agreernent esiablishes the FE Davis-Besse Nonqualifiedfund, the FE Peny Nonqrialifrecl Fund, the FE ByPS I Nonqualified Fund, and the FE BVPS 2 Nonqualified Flnd, which will serve as tfie "stanclby trusts" contemplated by the NRC's fegtrlations for payment of funds under this Guaranty.

For value received fiom FENGenCo and pursuant to the authority confelred upon the Guarantor.,

the Guarantor guarantees that if FpNGenCo fails to perfoiln the required decommissioning activitiei due to lack of funds, the Guarantor shall:

(a)

(b) provide all funds necessary, up to the amount of this Guaranty to caruy out the required activities; or pay into the existing trust fund referenced in Paragraph 7 the amount of this

^Guaranty for these activities. The Guarantor will instruct the ttustee to maintain 4.

6, 1

8.

9.

10.

the funds for each ISFSI in a separate subaccount fiom funds for general decornrnissioning activities.

The Guarantor agrces to subrnit levised financial statements, financial test dat4 and a special auditor's report ind reconciling schedule to the NRC annually within 90 days of the close of the parent Guarantor's fiscal year.

Tlre Guatantor and FENGenCo agree that if the Guarantor fails to nreetthe financial test criteria at any time after this Guaianty is established, the Guamntor and FENGenCo shall send, within 90 days of the encl of the fiscal year in which the Guarantor fails to meet the finalcial test criteria, written notice to the NRC using NRC's electt'onic inforrnation exchange. Such written notice also slrould be rnade by FENGenCo within 90 days of any rnatters coming to the auditor,s attention which cause the auclitor to believe that the data specified in thJ financial test should be adjusted and that the Guarantor no longer passes the test, If FENGenCo fails to provide alternative financial assurance as specified in 10 CFR par172,as applicable, whicir must be submitted to NRC within 120 days of the end of such fiscal year oi upon ntukittg notice that the Guarantor no longer passes the test, and obtain written upptouul of such u--rr,rrun.r fi'om the NRC within 60 days of the submittal, the Guarant#shall provide such alternative financial assuratrce in the narne of FENGenCo, or make full payment under the Guaranty to the existing standby ttust(s) established by FENGenCo.

Independent of any notification under paragraph 8 aboye, if the NRC determines for any reason that the Guarantor no longer meets the financial test uiteria or that it is disallowed finm continuing as a Guarantor 6r the facilities the Guarantor aglees that within 90 days after being notilfied by theNRC of such cletennination, an alternative financial assurance mechanisir as specified in 10 CFR PatT}as applicable shau be established by the Guarantor in the name of FENGenCo unless FENGenCo has done so' The Guarantor as well as its strccessors and assigns shall remain bound jointly and severally under this Guaranty notwithstanding any or all o=f the following: amendment or modification of license or NRC-approvecl decomirissioning funding plan for that facility, the extension or reduction of the timetf perfor.mance of requirled activities, or any other modification ot alteration of an obligatiol of FENGenCo pursuant to 10 CFR Part72' The Guarantor aglees that it will be liable for all litigation costs incun'ed by FENGenCo or the NRC in any iuccessful effort to enforce the agreement against the Guarantor,

'fhe Guaraptor agrees to remain bound unclel this Guaranty and financial test prnvisions for the previously listed facilities until the Commission has ternrinated the licenses, accepted in writing the patent.o*puny', alternate financial assulances' or accepted in writing the licensJe's financial ur*tu*",

except that this Guaranty may be amended by the agreement of Guarantor and FENGenCo with i0 dayt priot written notice to the NRC, and except that the Guarantor may cancel t6is Guaranty 6y sending written notice to theNRC using NRC's electronic information exchange, such cancellation to become effective no earlier than 120 days after receipt of such iotice by NRC, as evidenced by the return receipts. Guarantor shall aiso notify FEilGenco. If FENGenCo fails to pfovide alternative financial assufance as ll.

t2.

13, 14.

15.

16.

t't.

specified in 10 CFR Patt7l,as applicable, and obtain w'itten approval of such assurance within 120 days after the sending of the above notice by the Guamntor, the Guarantor shall provide such alternative financial assurance, or make full payrnent under the Gualanty to the existing standby trust established by FENGenCo.

The Ggarantor exprcssly waives notice of acceptance of this Guaranty by theNRC or by FENGenCo. The Guarantor also expressly waives notice of amendments or modification of the decomrnissioning requirements and of amendments or modifications ofthe licenses.

The Guarantor files financial repofis with the U.S. Securities and Exchange Commission (SEC), which are available to NRC and need not be subrnitted separately in accotdance with r0 cFR72.80(b).

The Guarantor agrees that if the Guarantor admits in wtiting its inability to pay its debts genemlly, or. *ak"r a geneml assignment for the benefit of creditors, or any proceeding is instituted by or against the Guarantor seeking to adjudicate it as banklupt or insolvent, or seeking dissolution, Iiquidation, winding-up, reorganization, armngement, adjustment, plotectlon, ion, relief or composition of it or its debts under any law relating to bankuptcy' insolvency, or leorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian, or other similar official for the Guarantor or for any substantial part of its property, or the Guarantor takes any action to authorize or effect any of the actions stated i1the paragraph, tfie Commission may:

(a) declare that the financial assurance guaranteed by the this Guaranty is immediately due and payable to the existing trust refercnced in Paragraph 7, withoutdiligence, presentment, demand, protest, or any other notice of any kind, all of which arc exprtssly waived bY Guarantor; or (b) exercise any and all of its other riglrts under applicable law' The Guarantot agrces to notify the NRC, in writing, immediately following the filing of a voluntary or invJluntary petition for bankruptcy uncl"r any chapter oftitle t t (f1$tuptcy) of the United States Code, ol the occunnce of any other event listed in Paragraph 17, by or against:

(a) the Guarantor; (b) FENGenCo; (c) an entity (as that ter.m is definecl in I I U.S.C. 101(15)) controlling FENGenCo or listing the licenses, FENGenCo as prcperty of the estate; or (d) an affiliate (as that ternr is defined in l1 u.s.c. 101(2) of FENGenCo.

18.

19.

The notification rcquired by Paragraph 18 nrust include the following:

(a) a description of the event, including major creditors, the amounts involved, and the actions laken to assure that the amount of funds guaranteed by this Guaranty for decommissioning will be transferred to the existing trust referenced in Palagraph 7 as 20.

soon as possible; (b) if a petition of bankruptcy was filed, the identity of the bankruptcy court in whichthe petition for bankruptcy was filed; and (c) the date of filing of any petitions.

This Guaranty and the righ* and obligations of the FENGenCo andthe Guarantorhereunder, shall be governed by and construed in accordance with the domestic laws of the State of Ohio without gining effect to any choice or conflict-of-law provision or rule (whether of the State of Ohio o. uny otherjurisdiction) that would cause the application of the laws of any jurisdiotion oiher than tlre State of Ohio, The Guarantor and FENGenCo each consent to the Lxclusive jurisdiction and venue of any state or federal court within the State of Ohio for ailjudicatibn of any suit, claim, action or other proceeding at law or in equity rrlating to this Giraranty, or to any transaction contemplated hereby. The Guarantor and FENGenCo each accept, generally and unconditionally, the exclusive jurisdiction and venue of the aforesaid

.ourir und waivl any objectiorr as tovenue, and any defense of fonun non conuenlens.

The Guarantor hereby iuevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid,io the Guarantot at its address set forth opposite itJsignature below, such selice to become effective 30 days after such rnailing' Nothing helein shall affect the right of FENGenCo to serve pfocess in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Guarantor.in any other jurisdiction. The Guarantor harby inevocably waives.any objection whiclt it may now or hereafter have to the laying of venue

-of uny of the aforesaid actions or ploceedings atising out of or in connection with the Guaranty brought in the courts refemed to above and hereby further ir.revocably waives and agrces notto plead or claim in any such court that any such action or proceeding brought in any such court has been brouglrt in an inconvenient forum.

All notices and other cornmunications hereunder shall be rnade to the Guamntor's Chief Financial Officer and General Counsel at 341 White Pond Dlive, Akron, Ohio 44320.

If it is ever determined that the Amended and Restated Parental Guaranty dated June l l, 2013 issued by FirstEnergy Corp in the arnount of $t I million (.'$11 Milli91 GualantY'), or any prior Par.ental Guaranty for tSfSt decommissioning remains enforceable and not pr;pel.ly cancelled, revoked and rescinded with no further force and effect, than the amount of titir Guaranty specified in Paragraph 3 hereof and the amount of the $4 million Amended antl Restated Parental Guaranty Ueing provided separately by FirstEnergy Cory' shall be rrducecl by the amount specifiid in suctr prior Parental Guaranty which remains in effect' For avoidance of cloubt, Notice is hereby given to the NRC of the cancellation of the obligations of FirstEnei'gy Corp, under itrc St I Million Guaranty and any prior Parental Guaianty for ISFSI decomrnisiioning, and this Guaranty is provided as the alternative 2r.

22.

23, assurance required by Section 14 of the $l l Million Guaranty for the ISFSI decommissioning obligations of FENGenCo and only FENGenCo.

This Guaranty shall replace the existing $11 Million Guaranty issued by FirstEnergy Corp.,

with respect io the obligations of FENGenCo with respect to Davis'Besse ISFSI and the Perry ISFSI. In addition, it guarantees the ISFSI decommissioning obligations-of FElriGenCowith respect to the BVPS ISFSI. The $l I Million Guaranty tookeffect on July 18, 2013, 30 days after the June 18, 2013 notice submitted to NRC, and it cancelled the prior Cuaranty datedDecember 17,2012, This Guaranty shall be effective 30 days after ieceipt by thaNRC of written notice of this Guaranty, when a $4 million Amended and Restated Parental Guaranty fiorn FirstEnergy Corp. shall take effect with respect to the obligatiols of Ohio Eclison Company and ttre Toledo Edison Comparry as set forth therein, unless a written notics of objection by NRC is received within such 30 days'

[REMAINDER OF PAGE INTENTTONALLY LEFT BLANK]

The undersigned has caused this Guaranty to be executed and delivered as of the day and year fimt above written.

f irstBnergy Solutions CorP.

By

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Steven R. Staub Vice President

& Treasuter Acknowledged as of June 30,2014 Rhonda S. Ferguson F irstEnerry Nuclear Ggqerati Vice President

& Corporate Secretary

CERTIFICATION I hereby certify that this Guaranty is true and conect to the best of rny knowledge, Effective date: June 30,2014 FirstEnergy Solutions Corp.

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Steven R. Staub Vice President

& Tleasurer STATE OF OHIO COUNTY OF SUMMIT Subscribed and sworn to me, a Notary Public, in and for the County and State above

narned, this.6'{L' day of June,2014, F'irstBnergy Nuclear Generation' LLC Rhonda S.

Vice President

& Corporate Secretary STATE OF OHIO COI.INTY OF SUMMIT Subscribed and sworn to me, a Notary Public, in and for the County and State above named, tiis N day of June, 2014.