ML14352A010
| ML14352A010 | |
| Person / Time | |
|---|---|
| Site: | River Bend, Waterford  |
| Issue date: | 12/16/2014 |
| From: | Wang A Plant Licensing Branch IV |
| To: | Davant G Entergy Nuclear Operations |
| References | |
| TAC ME7540 | |
| Download: ML14352A010 (8) | |
Text
NRR-PMDAPEm Resource From: Wang, Alan Sent: Tuesday, December 16, 2014 12:48 PM To: 'Guy Davant' Cc: Burkhardt, Janet; 'BURMEISTER, BARRY M'; 'WILLIAMS, JOE D'
Subject:
River Bend Station and Waterford 3 Request for Additional Information Regarding Proposed Merger (ME7540)
Attachments: Entergy RAIs 12-12 to entergy.docx
- Guy, By letter dated June 10, 2014 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML14161A698), and updated on October 9, 2014 (ADAMS Accession No. ML14294A487), Entergy Operations, Inc. (Entergy, the licensee) requested that the U.S. Nuclear Regulatory Commission (NRC) issue an Order approving the transfers of control of the Facility Operating Licenses and conforming license amendments for River Bend Station, Unit 1 (RBS) and Waterford Steam Electric Station, unit 3 (WF3). The NRC staff has determined that additional information is needed to complete our review of this request. The Request for Additional Information (RAI) is attached.
These RAIs were discussed with Mr. Guy Davant on December 16, 2014, and it was agreed that a response would be provided within 45 days of receipt of this e-mail. If circumstances result in the need to revise the requested response date, please contact me at (301) 415-1445 or via e-mail at Alan.Wang@nrc.gov.
Alan Wang Project Manager (River Bend Station and Grand Gulf Nuclear Station)
Nuclear Regulatory Commission Division of Operating Reactor Licensing Alan.Wang@NRC.gov Tel: (301) 415-1445 Fax: (301) 415-1222 1
Hearing Identifier: NRR_PMDA Email Number: 1772 Mail Envelope Properties (C0A338EE37A11447B136119705BF9A3F022BD82CDC65)
Subject:
River Bend Station and Waterford 3 Request for Additional Information Regarding Proposed Merger (ME7540)
Sent Date: 12/16/2014 12:47:45 PM Received Date: 12/16/2014 12:47:00 PM From: Wang, Alan Created By: Alan.Wang@nrc.gov Recipients:
"Burkhardt, Janet" <Janet.Burkhardt@nrc.gov>
Tracking Status: None
"'BURMEISTER, BARRY M'" <BBURMEI@entergy.com>
Tracking Status: None
"'WILLIAMS, JOE D'" <JWILL13@entergy.com>
Tracking Status: None
"'Guy Davant'" <GDAVANT@entergy.com>
Tracking Status: None Post Office: HQCLSTR02.nrc.gov Files Size Date & Time MESSAGE 1316 12/16/2014 12:47:00 PM Entergy RAIs 12-12 to entergy.docx 37567 Options Priority: Standard Return Notification: No Reply Requested: No Sensitivity: Normal Expiration Date:
Recipients Received:
Request for Additional Information Entergy Operations, Inc.
River Bend Station, Unit 1 & Independent Spent Fuel Storage Installation (ISFSI),
Waterford Steam Electric Station, Unit 3 & ISFSI Docket Nos. 50-458 & 72-49, 50-382 & 72-75 Application for Order Approving Transfers of Licenses and Conforming License Amendments By letter dated June 10, 2014 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML14161A698), and updated on October 9, 2014 (ADAMS Accession No. ML14294A487), Entergy Operations, Inc. (Entergy, the licensee) requested that the U.S.
Nuclear Regulatory Commission (NRC) issue an Order approving the transfers of control of the Facility Operating Licenses and conforming license amendments for River Bend Station, Unit 1 (RBS) and Waterford Steam Electric Station, unit 3 (WF3). This NRC staff has determined that the following request for additional information (RAI) is needed to complete its review.
1.0 Regulatory Requirement: Contents of Application RAI No. 1:
Section 50.33(3)(ii) of Title 10 of the Code of Federal Regulations (10 CFR) states, [Each application shall state] the names, addresses and citizenship of its directors and of its principal officers. of the updated application submitted on October 9, 2014, provides tables of the corporations that will directly, or indirectly, hold the Facility Operating Licenses for RBS and WF3 following the transaction. Please notify the NRC of any changes in the status of directors or executive officers.
RAI No. 2:
Section 50.33(f)(4)(i) of 10 CFR states:
Each application for a construction permit, operating license, or combined license submitted by a newly-formed entity organized for the primary purpose of constructing and/or operating a facility must also include information showing:
(i) The legal and financial relationships it has or proposes to have with its stockholders or owners.
Figure 1 and 2 in the October 9, 2014, application does not reflect the final position of EOI, Entergy Energy Company, or Entergy Holdings Company LLC (EHCL) within the hierarchy.
Enclosure
Please submit an organizational chart that includes EOI, Entergy Energy Company, and EHCLs position within the hierarchy.
RAI No. 3:
Form 8-K filed with the Securities and Exchange Commission (SEC) on September 30, 2014, states:
Under the Texas Business Organizations Code (TXBOC), Entergy Louisiana will allocate substantially all of its assets to a new subsidiary (New Entergy Louisiana) and New Entergy Louisiana will assume all of the liabilities of Entergy Louisiana, in a transaction regarded as a merger under the TXBOC. Entergy Louisiana will remain in existence and hold the membership interests in New Entergy Louisiana.
Under the TXBOC, Entergy Gulf States Louisiana will allocate substantially all of its assets to a new subsidiary (New Entergy Gulf States Louisiana) and New Entergy Gulf States Louisiana will assume all of the liabilities of Entergy Gulf States Louisiana, in a transaction regarded as a merger under the TXBOC.
Entergy Gulf States Louisiana will remain in existence and hold the membership interests in New Entergy Gulf States Louisiana.
The new subsidiaries, New Entergy Louisiana and New Entergy Gulf States Louisiana, that were provided to the SEC are not listed in the application provided to the NRC. Please explain why there is a difference, whether these entities are still being proposed, and indicate if these interim mergers will result in transfers of control of the NRC licenses.
RAI No. 4:
Section 50.80(b)(1)(i) of 10 CFR states:
[An application for transfer of a license shall include] as much of the information described in §§ 50.33 and 50.34 of this part with respect to the identity and technical and financial qualifications of the proposed transferee as would be required by those sections if the application were for an initial license.
Please provide a copy of the Potential Business Combination of Entergy Louisiana, LLC and Entergy Gulf States Louisiana, L.L.C. filing that was submitted to the Louisiana Public Service Commission (LPSC) on June 4, 2014. The organizational chart provided in this filing is different than the organizational chart provided in the application dated October 9, 2014. Please explain the differences in the two organizational charts.
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2.0 Regulatory Requirement: Foreign Ownership, Control and Domination RAI No. 5:
Section 50.38 of 10 CFR states:
Any person who is a citizen, national, or agent of a foreign country, or any corporation, or other entity which the Commission knows or has reason to believe is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government, shall be ineligible to apply for and obtain a license.
Step five of the series of transfers illustrating the material events related to the contemplated transaction in the updated application submitted on October 9, 2014, states:
Simultaneously with the contributions described in this Step #5, LP&L LLC will issue voting preferred membership interests to third party, unaffiliated investors.
The holders of the preferred membership interests will possess not less than 21% of the voting power of LP&L LLC (for matters submitted to a vote of all the shareholders of LP&L LLC). As a result of the preferred membership interest issuance, LP&L LLC will have two classes of outstanding membership interests:
(1) common membership interests held by Entergy Corporation, EL Investment Company, LLC, and EGS LLC; and (2) preferred membership interests held by third party, unaffiliated investors.
What percent of the 21 percent third party, unaffiliated investors will be non-U.S. interest holders? How will Entergy ensure that this interest does not result in control by a foreign owner? Explain why the issuance of the preferred membership interest may or may not require a 13G filing with the SEC?
RAI No. 6:
Section 140.15(a)(1) of 10 CFR states:
Licensees who maintain financial protection in whole or in part in the form of liability insurance shall provide proof of financial protection that consists of a copy of the liability policy (or policies) together with a certificate by the insurers issuing the policy stating that the copy is a true copy of the currently effective policy issued to the licensee. The licensee may furnish proof of financial protection in the form of a nuclear energy liability insurance policy set forth in § 140.91 or in any other form acceptable to the Commission.
Which entity will be named on the insurance and indemnity agreement?
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3.0 Regulatory Requirement: Decommissioning Funding RAI No. 7:
Section 50.75 of 10 CFR establishes requirements for indicating how a licensee will provide reasonable assurance that funds will be available for the decommissioning process. Section 50.80 requires that transfers of NRC licenses be consistent with applicable provisions of law, regulations, and orders issued by the Commission.
On November 20, 2014, the LPSC issued an order (number U-32707) Re: Application for Authority to Change Rates, Approval of Formula Rate Plan and for Related Relief, for Entergy.
How will this order impact the financial qualifications area of the regulations?
Newly Formed Entities EOI has listed the below entities as newly-formed entities on Page 2 of the updated application submitted on October 9, 2014. Each newly-formed entity must be independently evaluated per the requirements of 10 CFR 50.80. Specifically, newly-formed entities must be evaluated for compliance with the regulations that address the areas of: financial qualifications; foreign ownership; and decommissioning financial assurance. For each newly-formed entity, please provide an answer for each of the following questions.
Entergy Gulf States, LLC (EGS)
Entergy Gulf States Power, LLC (EGSP)
Entergy Louisiana Power, LLC (ELP)
EL Investment Company, LLC (ELIC)
Entergy Utility Holding Company, LLC Louisiana Power & Light, LLC (LP&L)
Entergy Gulf States Holdings, LLC (EGS Holdings)
Entergy Louisiana Holdings Company, LLC (ELL Holdings)
RAI No. 8:
Section 50.75 of 10 CFR establishes requirements for indicating how a licensee will provide reasonable assurance that funds will be available for the decommissioning process. Section 50.80 requires that transfers of NRC licenses be consistent with applicable provisions of law, regulations, and orders issued by the Commission.
Clarify the impact of the transfer on decommissioning financial assurance. Specifically, please state if the proposed transaction will have an effect on the established MSS-4 Purchase Power Agreement (PPA) contracts ability to continue providing adequate decommissioning funding that complies with the requirements of CFR 50.75.
RAI No. 9:
The updated application submitted on October 9, 2014, Section 4(A) Financial Qualifications for Operations (Page 6) states:
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This PPA provides the cost of service recovery for the costs associated with the portion of RBS that correlates with electricity from RBS delivered to [Entergy Texas, Inc.]. The PPA is also subject to the jurisdiction of the [Public Utility Commission of Texas (PUCT)] to the extent of the determination of the RBS decommissioning collections for the [Entergy Texas, Inc.] share of RBS.
Because of the inter-state manner that Entergy conducts business, does this require a PUCT review or Order? How will the transfers and new corporate organization affect the PPA?
4.0 Regulatory Requirement: Electric Utility RAI No. 10:
Section 50.2 of 10 CFR defines an electric utility as:
any entity that generates or distributes electricity and which recovers the cost of this electricity, either directly or indirectly, through rates established by the entity itself or by a separate regulatory authority. Investor-owned utilities, including generation or distribution subsidiaries, public utility districts, municipalities, rural electric cooperatives, and State and Federal agencies, including associations of any of the foregoing, are included within the meaning of "electric utility.
Will each of the interim newly-formed entities listed above meet the definition of an electric utility per 10 CFR 50.2? Please verify the identified entities, indicate if there are additional newly-formed entities, indicate the regulatory authority providing oversight of each newly-formed entity, and provide supporting documentation to demonstrate each newly-formed entitys status as an electric utility.
RAI No. 11:
10 CFR 50.33(f)(4) states:
(4) Each application for a construction permit, operating license, or combined license submitted by a newly-formed entity organized for the primary purpose of constructing and/or operating a facility must also include information showing:
(i) The legal and financial relationships it has or proposes to have with its stockholders or owners; (ii) The stockholders' or owners' financial ability to meet any contractual obligation to the entity which they have incurred or proposed to incur; and (iii) Any other information considered necessary by the Commission to enable it to determine the applicant's financial qualification.
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Provide a copy of the LLC agreements for each newly-formed LLC entity.
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