ML15009A045

the 2014 Annual Report of the Ceng Independent Nuclear Advisory Committee to the Ceng Board of Directors

ML15009A045
Person / Time
Site:	Calvert Cliffs, Nine Mile Point, Ginna
Issue date:	12/08/2014
From:	Constellation Energy Nuclear Group
To:	Constellation Energy Nuclear Group, Office of Nuclear Reactor Regulation
References
Download: ML15009A045 (34)

Text

Attachment 2 2014 Report of the Nuclear Advisory Committee to the CENG Board of Directors (Non-Proprietary)

The 2014 Annual Report of the CENG Independent Nuclear Advisory Committee To the CENG Board of Directors December 8, 2014 MEMBERS OF THE 2014 NUCLEAR ADVISORY COMMITTEE ON DECEMBER 8,2014 Richard Meserve, Chairman James Asselstine

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 Table of Contents I. Executive Summary ........................................................... .. 3 II. Introduction and Scope of the Report ................................. 5 III. The CENG NAC Charters for 2014 and the 2014 Amendment.....8 IV. The Foundation for the CENG NAC's Observations and Conclusions ....................................................................... 10 V. 2014 CENG Management Activities Reviewed by the NAC......13 VI. Conclusions and Observations ........................................ 17 VII. Exhibit I - The Initial 2014 NAC Charter ........................... 20 VIII. Exhibit II- The Amended 2014 NAC Charter ......................27 2

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 I. Executive Summary The independent Nuclear Advisory Committee (the "NAC") was originally established through the execution of the Constellation Energy Nuclear Group, LLC

("CENG" or the "Company")' Second Amended and Restated Operating Agreement (the "Agreement") dated November 6, 2009. Section 7.5 of the Agreement generally set forth the roles and responsibilities of the NAC, including the responsibility for the NAC to prepare a report, at least annually, to the CENG Board of Directors (the "Board") to advise the Company as to whether additional measures should be taken to ensure that the Company is in compliance with U.S. laws and regulations regarding foreign ownership, control or domination of nuclear operations and that a decision of a foreign government could not adversely affect or interfere with the reliable and safe operation 2

of any nuclear assets of the Company, its Subsidiaries or Affiliates.

The CENG Third Amended and Restated Operating Agreement dated March 12, 2012 (the "Amended Agreement"), continued the roles and responsibilities of the NAC

'The reference to CENG throughout this report is intended to include Constellation Energy Nuclear Group LLC, its subsidiaries and affiliates.

2 In accordance with the Agreement, the NAC issued two reports to the Board on December 15, 2010 and December 14, 2011.

3

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 to the Board as presented above, but also extended the NAC's reporting responsibilities 3

to deliver the annual report to the Nuclear Regulatory Commission (the "NRC").

The Fourth Amended and Restated Operating Agreement (the "2014 Amended Agreement") dated April 1, 2014, also continued the activities of the NAC. Section 7.5 of the 2014 Amended Agreement generally describes the updated responsibilities of the 4

NAC.

Based on the activities of the NAC during 2014 (through the date of this report),

the NAC advises the Board and the NRC that nothing came to the NAC's attention that would cause the NAC to advise the Board or the NRC that either:

1. Additional measures should be taken to ensure that the Company is in compliance with U.S. laws and regulations regarding foreign ownership, control or domination of nuclear operations, or to ensure that a decision of a foreign government could not adversely affect or interfere with the reliable and safe operations of any nuclear assets of the Company; or,

2. Additional policies should be implemented to prudently assure the Company's continued compliance with provisions of U.S. law and regulations regarding (i) nuclear security plans, including physical security and cyber security; (ii) screening of nuclear personnel; (iii) protection of critical nuclear infrastructures; and (iv) U.S. export regulations.

3 In accordance with the Amended Agreement, the NAC issued two reports to the Board on December 17, 2012, and December 9, 2013.

4 The roles and responsibilities of the NAC, as well as the procedures for the conduct of the NAC's business are generally set forth in the aforementioned operating agreements, and more specifically outlined in the NAC Charters that were in effect for 2014 (see Section III of this report for further discussion of the NAC Charters).

4

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 In addition the NAC did not identify any significant foreign ownership, control or domination matters that may have necessitated the NAC to report such matters directly to the NRC or any other governmental agency.

A member of the NAC attended four of the five Board meetings between December 2013 and the date of this report.5 This Board observation activity, and the NAC's review of the records of all Board resolutions (votes) during 2014 did not identify any actions in which foreign interests exercised foreign ownership, control, or domination over the licensed activities of the Company's licensed entities, and that no action taken by a foreign interest involved with licensed activities was inimical to the 6

common defense and security of the United States of America.

II. Introduction and Scope of the Report The 2014 NAC reporting year continued to be a year of transition for the CENG organization, CENG management, and ultimately the NAC. As summarized in the NAC's 2013 Annual Report, CENG and the three CENG owned nuclear generating stations (the "CENG stations") continued the process of transitioning the Company into 5 A member of the NAC did not attend the May 2014 Board meeting, which was held in Paris, France. The minutes of this meeting were reviewed by the NAC and management provided a detailed discussion of the content of the meeting to the NAC at the NAC's June 17 th meeting.

6 As of the date of this report, all CENG 2014 Board Resolutions (votes) were unanimously approved, negating the need for the Board Chairman's casting vote.

5

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 the governance and operating structures of Exelon Generation Company, LLC.

("ExGen") during 2014.7 As a result of these continuing 2014 transition activities, the NAC operated under the provisions of the aforementioned two CENG Operating Agreements; however, the roles and the responsibilities of the NAC as described in both Agreements are the same.

Section 7.5 of the Amended Agreement and the 2014 Amended Agreement describes the purpose and responsibilities of the NAC. Specifically, both documents call for:

"At least annually, the NAC shall prepare a report and supporting documentation to be delivered to the Board of Directors, which report shall advise the Company as to whether additional measures should be taken to ensure that the Company is in compliance with U.S. laws and regulations regarding foreign domination or control of nuclear operations and that a decision of a foreign government could not adversely affect or interfere with the reliable and safe operation of any nuclear assets of the Company, its Subsidiaries or 8

Affiliates;"

"The NAC shall prepare an Annual Report regarding the status of foreign ownership, control, or domination of the licensed activities of power reactors under the control, in whole or part, of the Company. The Report shall be 7 Effective March 12, 2012, Constellation Energy Group, Inc. was merged into Exelon Corporation who transferred its ownership interest in CENG to Exelon Generation Company, LLC, a wholly owned subsidiary of Exelon Corporation.

8 The Constellation Energy Nuclear Group, LLC, Third Amended and Restated Operating Agreement, dated as of March 12, 2012, at p. 42. The Constellation Energy Nuclear Group, LLC, Fourth Amended and Restated Operating Aereement, dated as of April 1, 2014, at p. 44.

6

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 submitted to the NRC within 30 days after completion of the Report, or by January 31 of the year following the date of the Report (whichever occurs first)."9 "Records of all votes by EDF'°, or its representatives, on the Company's Board of Directors and the use of the Chairman's casting vote will be sent to the NAC and shall be reviewed by the NAC to ensure that no foreign interests have exercised foreign ownership, control, or domination over the licensed activities of the Company's licensed entities, and that no action taken by a foreign interest involved with licensed activities is inimical to the common defense and security."11 ; and, "The NAC will advise on and recommend appropriate additional policies to prudently assure the Company's continued compliance with provisions of U.S.

law and regulations regarding (i) nuclear security plans, including physical security and cyber security; (ii) screening of nuclear personnel; (iii) protection of 12 critical nuclear infrastructures; and (iv) U.S. export regulations."

This report to the Board and the NRC provides an overview of the activities of the NAC during 2014 (through the date of this report), as well as the observations of the NAC regarding any foreign ownership, control or domination ("FOCD") issues and the status of the Company's ability to respond to such issues.

9 Ibid.

10 The reference to EDF throughout the report refers to EDF Inc., (a wholly owned subsidiary of Electricitie' de France S.A.), one of the two CENG joint venture partners along with CE Nuclear, LLC (a wholly owned subsidiary of Exelon Generation Company, LLC).

I The Constellation Energy Nuclear Group, LLC, Third Amended and Restated Operating Agreement, dated as of March 12, 2012, at p. 42. The Constellation Energy Nuclear Group, LLC, Fourth Amended and Restated Operating Agreement, dated as of April 1, 2014, at p. 44.

12 Ibid.

7

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 III. The CENG NAC Charters for 2014 and the 2014 Amendment The initial NAC Charter guiding the activities of the NAC in 2014 was consistent with the 2013 Charter and based on Section 7.5 of the Amended Agreement. 13 In September 2014 the Charter was amended to reflect the changes in the NAC structure as set forth in the 2014 Amended Agreement.14 A detailed discussion of the specific 2014 changes to the Charter is presented below.

For the Charters that guided the efforts of the NAC in 2014, each Charter's key Operating Principles contain the same or very similar language as the Amended Agreement and the 2014 Amended Agreement (as quoted above in Section II of this report). Therefore, the similar NAC Charter provisions are not duplicated here. In addition, however, the Charters also provide authority to the NAC to report directly to the NRC, or any other governmental agency, significant unresolved FOCD matters that may come to the NAC's attention. Specifically, each Charter states:

"If, in the course of executing its responsibilities, the Advisory Committee learns of unresolved significant matters resulting or that could result from, FOCD, and which are or could be at variance with U.S. law or regulation, or discovers unresolved significant matters that interfere or could interfere with the safe, secure and reliable operations of the nuclear assets of the company, its subsidiaries, or its affiliates, the Advisory Committee is authorized to report these matters directly to the NRC or 13A copy of the initial NAC Charter for 2014 is appended to this report as Exhibit I.

14A copy of the amended 2014 Charter is appended to this report as Exhibit I1.

8

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 other appropriate U.S. governmental agency without first seeking authorization 15 from the Company to do So."

As part of the transition of the responsibilities of CENG station operations from CENG to ExGen, the NRC approved ExGen's application to transfer the operating licenses for the CENG stations from CENG to ExGen in March 2014; ExGen assumed all operating, licensing and regulatory responsibilities for the CENG stations on April 1, 2014. Also, as part of the closing and execution of the 2014 Amended Agreement on April 1st and the transfer of operating responsibility of the CENG stations to ExGen, the Nuclear Safety and Operating Committee of the CENG Board (which contained an EDF representative) was dissolved as of April Ist. Finally, in July 2014, all CENG employees that had remained CENG employees during the transition process became employees of ExGen.

As a result of the integration of the CENG organization into the ExGen organization, the opportunity for a decision of a foreign government to influence the safe, secure and reliable operations of the CENG stations has been significantly reduced. Consequently, the NAC and the Board concluded that, although the role of the NAC, as set forth in the 2014 Amended Agreement would continue into the future,

'5 The initial 2014 NAC Charter at pp. 2 and 3.

9

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 the number of NAC members and the frequency of NAC meetings could be reduced.

Therefore, in September 2014, the Board unanimously consented to a number of resolutions regarding the organization and operations of the NAC, including a resolution to amend the NAC Charter. The NAC reviewed and approved the amendments to the Charter, which became effective immediately. The changes to the NAC Charter included reducing the number of NAC members from five to two, and reducing the frequency of NAC meetings from quarterly to semi-annually.

The initial members of the NAC for 2014 were those members who had been members of the NAC since its inception: John Gordon, Chairman; James Asselstine; John Hamre; Robert Hanfling; and, Richard Meserve.16 In accordance with the Board resolutions and the amended 2014 NAC Charter, the continuing NAC members are Richard Meserve (Chairman) and James Asselstine.

IV. The Foundation for the CENG NAC's Observations and Conclusions The observations and conclusions of the NAC contained in this report are primarily formulated from the information and analyses obtained from the following 16 The members of the NAC are U.S. citizens who are not officers, directors or employees of the Company, EDF Inc., Constellation Nuclear, LLC, CE Nuclear, LLC, or Exelon Corporation.

10

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 four sources. First, the NAC held three meetings during 2014.17 At each meeting the NAC received an update from CENG and ExGen management regarding the principal activities of the Company relating to operations, regulatory and legal matters, as well as transition management.1 8 At each meeting the NAC also received a review of the activities of the Board and Board Committees, and the topics and issues considered by the Board during each 2014 Board meeting. During this discussion, the NAC was briefed on the activities of the Board's Nuclear Safety and Operations Committee. The NAC also received regular presentations regarding fleet operations from the CENG Chief Nuclear Officer. As a result of these discussions, the NAC asked the Company to either immediately respond to questions posed by the NAC during the meetings or provide additional information or analysis to the NAC for its continued consideration at future meetings. During each of the NAC meetings, CENG and ExGen management candidly and openly discussed various topics and activities of interest that had been identified by the members of the NAC and/or CENG and ExGen management.

7 The dates of the 2014 NAC meetings were February 2 4 h, June 17 h, and October 13 th. Additional activities of the NAC and the NAC advisors that assisted the NAC in developing the observations and conclusions presented herein are also described in this section of the report.

18 CENG and ExGen leadership from whom the NAC received regular briefings included Maria Korsnick, Steven Miller, James Spina, Bradley Fewell, Lisa Decker, and Carol Peterson. The topics of physical and cyber security, screening of nuclear personnel, the protection of critical nuclear infrastructures and the necessity of the Company's compliance with U.S. export regulations were discussed as appropriate during the 2014 NAC meetings.

11

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 The second source of information the NAC has considered in preparation of the 2014 report is the information the NAC members obtained when attending and observing the 2014 Board meetings. In addition to providing relevant insights to the Board during those meetings, the NAC members reported their observations, conclusions and perceptions to the NAC at each subsequent NAC meeting. The knowledge gained at the Board meetings in turn enhanced the NAC's insight into important Company issues, the working relationships among Board members, and the working relationships among the Board and CENG and ExGen management personnel.

The third source of information the NAC has considered in formulating the observations and conclusions in this report are legal and regulatory inputs provided to the NAC by CENG and Arnold & Porter, a Washington D.C. law firm. An Arnold &

Porter partner regularly attended the NAC meetings as counsel to the NAC and provided timely insight and consultation as necessary. At each NAC meeting the CENG General Counsel or a member of the ExGen General Counsel's office provided the NAC with the necessary legal analysis into any potential FOCD issues, domestic import and export regulation matters, and the impact of other applicable laws and regulations on the activities of CENG. Members of the CENG and ExGen General Counsels' offices also advised the NAC of any changes in FOCD related laws and 12

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 regulations that occurred throughout 2014 for the NAC members' consideration during the completion of their 2014 activities. 19 The final primary source of information the NAC has considered in formulating the conclusions presented herein is a limited review performed by Navigant Consulting Inc. ("NCI") 20 on behalf of the NAC concerning potential FOCD'events. The NCI review was performed primarily through discussions/interviews with CENG and ExGen management personnel on matters such as CENG operations, changes in operating practices and procedures, the potential for FOCD to occur, the impact of the ExGen/CENG transition activities on CENG operations, and other relevant topics.

Additionally, NCI reviewed the Board Meeting Minutes and other relevant documents provided to the NAC by CENG and ExGen. NCI discussed the results of its review with the members of the NAC.

V. 2014 CENG Management Activities Reviewed by the NAC The NAC has completed its 2014 review of CENG management's activities. The briefings the NAC received throughout the year and the other sources of information obtained by the NAC as described above, centered primarily on the operations of 19 A member of the ExGen General Counsel's office provided the NAC with several detailed presentations of current 20 NRC activities concerning FOCD policies and practices.

Navigant Consulting Inc. is an international consulting firm. Senior members of this firm with significant nuclear power experience provided assistance to the NAC during 2014. A member of NCI also attended each 2014 NAC meeting.

13

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 CENG, the CENG stations and the continuing integration of CENG into the ExGen organization (see the summaries of the NAC's discussions on these two topics in the sections below).

The NAC also received regular presentations on recent developments in the NRC's regulatory activities concerning FOCD policies and practices. As an example, the NAC was updated on the regulatory history of the South Texas Project's Combined Operating License (the "COL"), the Atomic Safety and Licensing Board's decision regarding FOCD issues raised by the NRC staff and interveners during the COL licensing process, and ongoing licensing activities at the South Texas Project.

Further, the NAC was provided a copy of the NRC staff's 2014 fresh assessment of NRC FOCD practices and procedures paper as presented to the NRC Commissioners, SECY-14-0089. The NAC discussed the details of the paper with CENG and ExGen management. CENG and ExGen personnel agreed to keep the NAC apprised of any additional developments related to these or other NRC FOCD policy issues.

14

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 15

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 16

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 I

VI. Conclusions and Observations The NAC has completed its responsibilities to the CENG Board under the Amended Agreement, the 2014 Amended Agreement, and the NAC Charters for 2014.

Those responsibilities generally include determining whether additional measures need to be undertaken by CENG to: 1) ensure the Company's compliance with U.S. laws and 17

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 regulations regarding FOCD over the nuclear assets of the Company 22, and, 2) ensure that action by a foreign government would not adversely impact the reliable and safe operation of the Company's nuclear assets. Based on the work undertaken by the NAC during 2014, the NAC reports to the Board and the NRC that nothing has come to the attention of the NAC that would require the Company to take additional measures to ensure compliance with U.S. laws and regulations regarding FOCD over the CENG stations (the nuclear assets) or the reliable and safe operation of those nuclear assets.

Also, the NAC has not identified any significant matter or matters that could potentially affect the safe, secure, or reliable operation of the Company's nuclear assets that would 23 require an independent reporting to the NRC or another U.S. governmental agency.

Finally, the NAC reviewed the records of all 2014 CENG Board votes and did not identify any actions where foreign interests exercised foreign ownership, control or domination over the licensed activities of the Company's licensed entities, and that no 22 The NAC conclusions and observations also specifically apply to the U.S. laws and regulations regarding nuclear security plans, screening of nuclear personnel, the protection of critical nuclear infrastructure and U.S. export regulations.

23 1t should be noted that the determination of the significance of a potential FOCD matter remains with the experience and judgment of the NAC and its evaluation of the matter. The facts, circumstances, risks, and numerous other issues associated with such a matter would need to be fully reviewed by the NAC to determine the significance of the matter and the need for reporting to the NRC or another governmental agency.

18

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 action taken by a foreign interest involved with licensed activities was inimical to the 24 common defense and security of the licensed entities.

As noted above, the managements of CENG and ExGen have regularly brought significant or material issues related to the NAC's Charter to the NAC for its review, consideration, and evaluation. The NAC remains sensitive and alert to the possibility that the concerns of the CENG parents over CENG operating and financial performance could result in unintended influences on the operations of the existing CENG nuclear assets. As a result, the NAC has requested that it be advised in a timely fashion by management of the receipt of any directives from EDF that could be potentially perceived as adversely affecting the operations of Company. The NAC urges management to continue to be sensitive to the issues of interest to the NAC and to continue to bring potentially relevant issues to the NAC's attention as the NAC continues to execute its FOCD oversight responsibilities for the Board and the NRC.

The NAC is pleased with both the responsiveness of management to the NAC's issues of interest and the full and constructive support that CENG and ExGen managements have provided to the NAC throughout the year.

24 During 2014 and through the date of this report, all Board Resolutions (votes) were unanimously approved, negating the need for the Board Chairman's casting vote.

19

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 EXHIBIT I THE INITIAL 2014 NAC CHARTER 20

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 Charter Independent Nuclear Advisory Committee Constellation Energy Nuclear Group, LLC As provided for in the Third Amended and Restated Operating Agreement of Constellation Energy Nuclear Group, LLC, a Maryland limited liability company ("Operating Agreement")

(Constellation Energy Nuclear Group, LLC, the "Company"), the Company has established an independent Advisory Committee ("Advisory Committee"). The principal purposes of the Advisory Committee are to:

" Provide transparency to the U.S. Nuclear Regulatory Commission ("NRC") and other U.S. government authorities regarding issues related to foreign ownership, control or influence ("FOCI") over nuclear operations planned and conducted by the Company.

• Advise and make recommendations to the Company's Board of Directors ("Board of Directors") whether measures additional to those already in place should be taken to ensure that i) the Company is in compliance with U.S. laws and regulations regarding FOCI including those related to non-proliferation and fuel cycle matters, and ii) action by a foreign government or foreign corporation could not adversely affect or interfere with the reliable and safe operations of the nuclear assets of the Company its subsidiaries and affiliates (i and ii, collectively, the "Foreign Control Compliance Matters"), and to provide reports and supporting documentation to the Board of Directors and the Nuclear Regulatory Commission relating to such Foreign Control Compliance Matters on at least an annual basis.

Operating Principles The Advisory Committee is non-voting and strictly advisory in nature. Responsibility for the management of the Company's business and affairs rests solely with the Board of Directors, to whom the Advisory Committee reports.

The Advisory Committee shall deliver an annual-or more frequent if deemed necessary by either the Advisory Committee or Board of Directors-report and supporting documentation to the Board of Directors regarding Foreign Control Compliance Matters that advises the Company whether additional measures should be taken to ensure:

The adequacy of measures taken by the Company to continue to comply with U.S.

laws and regulations regarding FOCI of the Company, and over the nuclear assets of the Company, its subsidiaries and affiliates, focusing on i) nuclear security plans, 21

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 including physical security and cyber security; ii) screening of nuclear personnel; iii) protection of critical nuclear infrastructure; and iv) U.S. export regulations; and The adequacy of measures taken by the Company to ensure that a decision by a foreign government or foreign corporation could not adversely affect or interfere with the reliable and safe operations of the nuclear assets of the Company, its subsidiaries, or its affiliates; In evaluating the above Foreign Control Compliance Matters, the Advisory Committee will consider, inter alia, the following:

" All U.S. laws and regulations relating to U.S. control of nuclear facilities owned and operated by the Company;

" All aspects of FOCI that could adversely affect the safe or reliable operation of a nuclear facility including, but not limited to:

o Implementation or compliance with any NRC generic letter, bulletin, order, confirmatory order, or similar requirement issued by the NRC; o Prevention or mitigation of a nuclear event or incident or the unauthorized release of radioactive material; o Placement of a plant in a safe condition following any nuclear event or incident; o Compliance with the Atomic Energy Act, the Energy Reorganization Act, or any NRC rule; o The obtaining of or compliance with a specific license issued by the NRC and its technical specifications; and o Compliance with a specific Final Safety Analysis Report, or other licensing basis document.

" All aspects of FOCI that could adversely affect the security of a nuclear facility including, but not limited to, those aspects under the jurisdiction of the U.S. Department of Homeland Security, U.S. Department of Justice, and the NRC.

• Records of all votes by EDF Inc., or its representatives, on the Constellation Energy Nuclear Group, LLC, Board of Directors and the use of the Chairnman's casting vote to ensure that no foreign interests have exercised foreign ownership, control, or domination over the activities of the Company's NRC-licensed facilities, and that no action taken by a foreign interest involved with the licensed activities is inimical to the common defense and security of the United States.

22

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 If, in the course of executing its responsibilities, the Advisory Committee learns of unresolved significant matters resulting or that could result from, FOCI, and which are or could be at variance with U.S. law or regulation, or discovers unresolved significant matters that interfere or could interfere with the safe, secure and reliable operations of the nuclear assets of the company, its subsidiaries, or its affiliates, the Advisory Committee is authorized to report these matters directly to the NRC or other appropriate U.S. governmental agency without first seeking authorization from the Company to do so. Prior to such reporting, if deemed reasonably feasible and appropriate by the Advisory Committee, the Advisory Committee shall notify the Board of Directors so as to ensure that i) the Board of Directors is aware of the unresolved significant matter and Advisory Committee's intent to report, and ii) the Company has not in fact resolved such significant matter.

The Advisory Committee may, after notifying the Board of Directors, meet with the NRC or other U.S. government agencies to explain its authority, the terms of this Charter, and the Company's Operating Agreement and any additional responsibilities it has undertaken in the role it has been assigned. The Advisory Committee shall not, however, make any representations or statements on behalf of the Company, its parents, affiliates and subsidiaries - whether for public relations purposes or otherwise - without first securing written permission from the Company or appropriate parent, affiliate or subsidiary.

To execute its responsibilities, the Advisory Committee will have the power and authority, at the Company's reasonable expense, to retain outside consultants, lawyers, and accountants, delegate matters to Company personnel and other wise do such other acts as are reasonably necessary or advisable to carry out such responsibilities. The Advisory Committee will, when reasonably requested by the Board of Directors, provide justification of the need for the services of and the expenses for such consultants, lawyers, and accountants in carrying out the Advisory Committee's responsibilities. The Secretary to the Advisory Committee will be the interface with the Company for the contracting and payment for these services.

To help ensure the successful execution of the Advisory Committee's responsibilities, the Company will provide full and prompt access to the Advisory Committee's requests for relevant data, information, policies and access to Company employees. Such access also will be given to duly authorized and contracted consultants, lawyers and accountants assisting the Advisory Committee.

The Advisory Committee will prepare and provide annual reports to the Board of Directors no later than the end of December of each year, or more frequently, if the Advisory Committee deems appropriate. The annual reports shall include summarized results of the Advisory Committee's review of records of all EDF votes on the Company's Board of Directors; including discussions of any use of the Chairman's casting vote, determinations whether an exercise of foreign ownership, control, domination has occurred, or that foreign involvement with licensed 23

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 activities was inimical to the common defense and security. The Advisory Committee acknowledges that the Company is required to and shall submit these reports to the Nuclear Regulatory Commission within 30 days of the reports' completion, or by January 31 of each year (whichever occurs first). The reports shall be made available to the public, with the potential exception of information that meets the requirements for withholding such information from public disclosure under the regulations of 10 CFR 2.390, "Public Inspections, Exemptions, and Requests for Withholding".

Membership The Advisory Committee initially will be composed of five members, all of whom will be U.S.

citizens, and will be appointed by the Board of Directors in accordance with Section 7.5 of the Operating Agreement. Additional members of the Advisory Committee may be appointed by the Board of Directors, as wan'anted. One member of the Advisory Committee will be appointed by the Board of Directors of the Company as Chairman of the Advisory Committee.

The term of office for Advisory Committee members will be one year. By mutual agreement, the Board of Directors may offer, and an Advisory Committee member may accept, additional one-year appointments. Notwithstanding the foregoing, all Advisory Committee members will serve at the discretion of the Board of Directors, and any change in the composition of the Advisory Committee shall be approved by the Board of Directors in accordance with Section 7.3 (c)(ii)(iv) and 7.5 of the Operating Agreement.

Membership in the Advisory Committee should include individuals with prior experience or service in one or more of the following disciplines: nuclear power; government; regulatory agencies and processes; international business, banking and finance; law; and nuclear academia.

There should be particular emphasis on experience on the Advisory Committee related to foreign investment in the U.S. (specific to nuclear generating facilities, if possible), and in nuclear power risk, safety, and security.

The Advisory Committee may retain independent counsel to enable the Advisory Committee to perform its obligations hereunder.

The Company will provide a Secretary to the Advisory Committee who will, among other duties, be responsible for scheduling and providing notice of meetings, communicating with advisors to the Advisory Committee, preparing meeting minutes, arranging for Advisory Committee requested information or meetings with Company officials needed to fulfill the Advisory Committee's responsibilities, managing the administrative processes for retaining outside consultants, lawyers, or accountants, as required by the Advisory Committee, and assisting in preparing the annual report of the Advisory Committee.

24

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 Meetings of the Advisory Committee The Advisory Committee will meet at regularly scheduled times, or at the call of the Chairman, not less than once per quarter, either in person or by telephone during which call all participants may hear the others. Additional meetings may be called by the Chairman at his discretion.

Meetings will be held at the CEG offices in Baltimore, or at locations designated by the Chairman. A quorum for the conduct of Advisory Committee business shall consist of a majority of the Advisory Committee members.

When practical, Advisory Committee meetings shall be scheduled or called well in advance of the meetings.

Compensation Members of the Advisory Committee will be compensated in accordance with a schedule determined in accordance with Section 7.3(c)(ii)(iv) of the Operating Agreement. Compensation will include an annual retainer and reasonable travel expenses for attending meetings, as well as any pre-approved orientation or investigatory visits.

Indemnification/Liability/Insurance As provided for in the Operating Agreement, the Company shall indemnify members of the Advisory Committee, while serving the Company or at the Company's request any other entity, to the full extent required or permitted by the laws of the State of Maryland, now or hereafter in force, including the advance of expenses, under the procedures and to the full extent permitted by law.

To the fullest extent permitted by Maryland statutory or decisional law, as amended or interpreted, no member of the Advisory Committee shall be personally liable to the Company or its Members for money damages.

The Company will, in ensuring this indemnification, provide appropriate D&O insurance coverage for the Advisory Committee members.

Conflict of Interest/Non-Disclosure Agreement Each Advisory Committee member, prior to assuming their position on the Advisory Committee, shall execute a non-disclosure agreement ("NDA") in favor of the Company. Such NDA will prohibit disclosure of confidential Company information to anyone outside of the Company, other than to appropriate U.S. government agencies and authorities in the performance of the 25

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 Advisory Committee's duties and, as necessary, to the Advisory Committee's consultants, lawyers, and accountants in carrying out the Advisory Committee's responsibilities.

During each Advisory Committee member's term of service, such member shall refrain from engaging in activities that would create a conflict of interest for such member when performing Advisory Committee duties. Any existing or potential conflict of interest must, upon knowledge of such conflict or potential conflict, be disclosed to the Chairman of the Advisory Committee and the Board of Directors. An Advisory Committee member with a potential or existing conflict of interest shall recuse himself or herself from any matter to which the conflict could affect the Advisory Committee member's ability to impartially and independently provide advice. Should the conflict be such that the Advisory Committee member's ability to serve in an independent capacity is materially affected, the Advisory Committee member shall tender his or her resignation or, alternatively, be removed by the Board of Directors.

Annual Review by Board of Directors The Board of Directors shall review the Advisory Committee's scope of responsibilities, compensation and membership, annually.

Amendment of the Charter The Advisory Committee shall review and reassess the adequacy of this Charter at least annually, and recommend any proposed changes to the Board of Directors. This Charter may be amended only by a vote of the Board of Directors in accordance with Section 7.3(c)(iv) of the Operating Agreement.

26

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 EXHIBIT II THE AMENDED 2014 NAC CHARTER 27

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 Charter Independent Nuclear Advisory Committee Constellation Energy Nuclear Group, LLC As provided for in the Fourth Amended and Restated Operating Agreement ("Operating Agreement") of Constellation Energy Nuclear Group, LLC, a Maryland limited liability company (the "Company"), the Company has established an independent Advisory Committee

("Advisory Committee"). The principal purposes of the Advisory Committee are to:

" Provide transparency to the U.S. Nuclear Regulatory Commission ("NRC") and other U.S. government authorities regarding issues related to foreign ownership, control or influence ("FOCI") over nuclear operations planned and conducted by the Company.

" Advise and make recommendations to the Company's Board of Directors ("Board of Directors") whether measures additional to those already in place should be taken to ensure that i) the Company is in compliance with U.S. laws and regulations regarding FOCI including those related to non-proliferation and fuel cycle matters, and ii) action by a foreign government or foreign corporation could not adversely affect or interfere with the reliable and safe operations of the nuclear assets of the Company its subsidiaries and affiliates (i and ii, collectively, the "Foreign Control Compliance Matters"), and to provide reports and supporting documentation to the Board of Directors and the Nuclear Regulatory Commission relating to such Foreign Control Compliance Matters on at least an annual basis.

Operating Principles The Advisory Committee is non-voting and strictly advisory in nature. Responsibility for the management of the Company's business and affairs rests solely with the Board of Directors, to whom the Advisory Committee reports.

The Advisory Committee shall deliver an annual-or more frequent if deemed necessary by either the Advisory Committee or Board of Directors-report and supporting documentation to the Board of Directors regarding Foreign Control Compliance Matters that advises the Company whether additional measures should be taken to ensure:

The adequacy of measures taken by the Company to continue to comply with U.S.

laws and regulations regarding FOCI of the Company, and over the nuclear assets of the Company, its subsidiaries and affiliates, focusing on i) nuclear security plans, including physical security and cyber security; ii) screening of nuclear personnel; iii) protection of critical nuclear infrastructure; and iv) U.S. export regulations; and 28

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 The adequacy of measures taken by the Company to ensure that a decision by a foreign government or foreign corporation could not adversely affect or interfere with the reliable and safe operations of the nuclear assets of the Company, its subsidiaries, or its affiliates; In evaluating the above Foreign Control Compliance Matters, the Advisory Committee will consider, inter alia, the following:

" All U.S. laws and regulations relating to U.S. control of nuclear facilities owned by the Company;

" All aspects of FOCI that could adversely affect the safe or reliable operation of a nuclear facility including, but not limited to:

o Implementation or compliance with any NRC generic letter, bulletin, order, confirmatory order, or similar requirement issued by the NRC; o Prevention or mitigation of a nuclear event or incident or the unauthorized release of radioactive material; o Placement of a plant in a safe condition following any nuclear event or incident; o Compliance with the Atomic Energy Act, the Energy Reorganization Act, or any NRC rule; o The obtaining of or compliance with a specific license issued by the NRC and its technical specifications; and o Compliance with a specific Final Safety Analysis Report, or other licensing basis document.

" All aspects of FOCI that could adversely affect the security of a nuclear facility including, but not limited to, those aspects under the jurisdiction of the U.S. Department of Homeland Security, U.S. Department of Justice, and the NRC.

" Records of all votes by EDF Inc., or its representatives, on the Board of Directors and the use of the Chairman's casting vote to ensure that no foreign interests have exercised foreign ownership, control, or domination over the activities of the Company's NRC-licensed facilities, and that no action taken by a foreign interest involved with the licensed activities is inimical to the common defense and security of the United States.

If, in the course of executing its responsibilities, the Advisory Committee learns of unresolved significant matters resulting or that could result from FOCI, and which are or could be at variance with U.S. law or regulation, or discovers unresolved significant matters that interfere or could interfere with the safe, secure and reliable operations of the nuclear assets of the Company, 29

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 its subsidiaries, or its affiliates, the Advisory Committee is authorized to report these matters directly to the NRC or other appropriate U.S. governmental agency without first seeking authorization from the Company to do so. Prior to such reporting, if deemed reasonably feasible and appropriate by the Advisory Committee, the Advisory Committee shall notify the Board of Directors so as to ensure that i) the Board of Directors is aware of the unresolved significant matter and Advisory Committee's intent to report, and ii) the Company has not in fact resolved such significant matter.

The Advisory Committee may, after notifying the Board of Directors, meet with the NRC or other U.S. government agencies to explain its authority, the terms of this Charter, and the Company's Operating Agreement and any additional responsibilities it has undertaken in the role it has been assigned. The Advisory Committee shall not, however, make any representations or statements on behalf of the Company, its parents, affiliates and subsidiaries - whether for public relations purposes or otherwise - without first securing written permission from the Company or appropriate parent, affiliate or subsidiary.

To execute its responsibilities, the Advisory Committee will have the power and authority, at the Company's reasonable expense, to retain outside consultants, lawyers, and accountants, delegate matters to Company personnel and otherwise do such other acts as are reasonably necessary or advisable to carry out such responsibilities. The Advisory Committee will, when reasonably requested by the Board of Directors or the committee of the Board of Directors authorized to act on behalf of the Board of Directors (the "Board Committee"), provide justification of the need for the services of and the expenses for such consultants, lawyers, and accountants in carrying out the Advisory Committee's responsibilities. The Secretary to the Advisory Committee will be the interface with the Company for the contracting and payment for these services.

To help ensure the successful execution of the Advisory Committee's responsibilities, the Company will provide full and prompt access to the Advisory Committee's requests for relevant data, information, policies and access to Company employees and contractors. Such access also will be given to duly authorized and contracted consultants, lawyers and accountants assisting the Advisory Committee.

The Advisory Committee will prepare and provide annual reports to the Board of Directors no later than the end of December of each year, or more frequently, if the Advisory Committee deems appropriate. The annual reports shall include summarized results of the Advisory Committee's review of records of all EDF votes on the Company's Board of Directors; including discussions of any use of the Chairman's casting vote, determinations whether an exercise of foreign ownership, control, domination has occurred, or that foreign involvement with licensed activities was inimical to the common defense and security. The Advisory Committee acknowledges that the Company is required to and shall submit these reports to the Nuclear Regulatory Commission within 30 days of the reports' completion, or by January 31 of each year 30

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 (whichever occurs first). The reports shall be made available to the public, with the potential exception of information that meets the requirements for withholding such information from public disclosure under the regulations of 10 CFR 2.390, "Public Inspections, Exemptions, Requests for Withholding".

Membership The Advisory Committee will be composed of two members, all of whom will be U.S. citizens, and will be appointed by the Board of Directors or the Board Committee. Additional members of the Advisory Committee may be appointed by the Board of Directors or the Board Committee, as warranted. One member of the Advisory Committee will be appointed by the Board of Directors or the Board Committee as Chairman of the Advisory Committee.

The term of office for Advisory Committee members will be one year. By mutual agreement, the Board of Directors or the Board Committee may offer, and an Advisory Committee member may accept, additional one-year appointments. Notwithstanding the foregoing, all Advisory Committee members will serve at the discretion of the Board of Directors or the Board Committee, and any change in the composition of the Advisory Committee shall be approved by the Board of Directors or the Board Committee.

Membership in the Advisory Committee should include individuals with prior experience or service in one or more of the following disciplines: nuclear power; government; regulatory agencies and processes; international business, banking and finance; law; and nuclear academia.

There should be particular emphasis on experience on the Advisory Committee related to foreign investment in the U.S. (specific to nuclear generating facilities, if possible), and in nuclear power risk, safety, and security.

The Advisory Committee may retain independent counsel to enable the Advisory Committee to perform its obligations hereunder.

The Company will provide a Secretary to the Advisory Committee who will, among other duties, be responsible for scheduling and providing notice of meetings, communicating with advisors to the Advisory Committee, preparing meeting minutes, arranging for Advisory Committee requested information or meetings with Company officials needed to fulfill the Advisory Committee's responsibilities, managing the administrative processes for retaining outside consultants, lawyers, or accountants, as required by the Advisory Committee, and assisting in preparing the annual report of the Advisory Committee.

31

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 Meetings of the Advisory Committee The Advisory Committee will meet at regularly scheduled times, or at the call of the Chairman, not less than twice per calendar year, either in person or by telephone during which call all participants may hear the others. Additional meetings may be called by the Chairman at his discretion. Meetings will be held in Baltimore, or at locations designated by the Chairman. A quorum for the conduct of Advisory Committee business shall consist of a majority of the Advisory Committee members.

When practical, Advisory Committee meetings shall be scheduled or called well in advance of the meetings.

Compensation Members of the Advisory Committee will be compensated in accordance with a schedule determined by the Board of Directors or the Board Committee. Compensation will include an annual retainer and reasonable travel expenses for attending meetings, as well as any pre-approved orientation or investigatory visits.

Indemnification/Liability/Insurance As provided for in the Operating Agreement, the Company shall indemnify members of the Advisory Committee, while serving the Company or at the Company's request any other entity, to the full extent required or permitted by the laws of the State of Maryland, now or hereafter in force, including the advance of expenses, under the procedures and to the full extent permitted by law.

To the fullest extent permitted by Maryland statutory or decisional law, as amended or interpreted, no member of the Advisory Committee shall be personally liable to the Company or its Members for money damages.

The Company will, in ensuring this indemnification, provide appropriate D&O insurance coverage for the Advisory Committee members.

Conflict of Interest/Non-Disclosure Agreement Each Advisory Committee member, prior to assuming their position on the Advisory Committee, shall execute a non-disclosure agreement ("NDA") in favor of the Company. Such NDA will prohibit disclosure of confidential Company information to anyone outside of the Company, other than to appropriate U.S. government agencies and authorities in the performance of the 32

The CENG Independent Nuclear Advisory Committee 2014 Annual Report December 8, 2014 Advisory Committee's duties and, as necessary, to the Advisory Committee's consultants, lawyers, and accountants in carrying out the Advisory Committee's responsibilities.

During each Advisory Committee member's term of service, such member shall refrain from engaging in activities that would create a conflict of interest for such member when performing Advisory Committee duties. Any existing or potential conflict of interest must, upon knowledge of such conflict or potential conflict, be disclosed to the Chairman of the Advisory Committee and the Board of Directors. An Advisory Committee member with a potential or existing conflict of interest shall recuse himself or herself from any matter to which the conflict could affect the Advisory Committee member's ability to impartially and independently provide advice. Should the conflict be such that the Advisory Committee member's ability to serve in an independent capacity is materially affected, the Advisory Committee member shall tender his or her resignation or, alternatively, be removed by the Board of Directors or the Board Committee.

Annual Review The Board of Directors or the Board Committee shall review the Advisory Committee's scope of responsibilities, compensation and membership, annually.

Amendment of the Charter The Advisory Committee shall review and reassess the adequacy of this Charter at least annually, and recommend any proposed changes to the Board of Directors or the Board Committee. This Charter may be amended only by a vote of the Board of Directors or the Board Committee.

33