ML15090A441
| ML15090A441 | |
| Person / Time | |
|---|---|
| Site: | Beaver Valley, Davis Besse, Perry, 07201043, 07200069 |
| Issue date: | 03/31/2015 |
| From: | Boles B FirstEnergy Nuclear Operating Co |
| To: | Document Control Desk, Office of Nuclear Material Safety and Safeguards, Office of Nuclear Reactor Regulation |
| References | |
| L-15-02 | |
| Download: ML15090A441 (15) | |
Text
FENOC Fm;t &IOlgf Nucl..,Operating Company 2' March 31, 2015 L-15-102 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.72-014 Perry Nuclear Power Plant Docket No. 50-440, License No. NPF-58 Perry Nuclear Power Plant ISFSI Docket No. 72-69 Annual Financial Test for a Parent Company Guarantee 341 White Pond Dr.
Akron, Ohio 44320 10 CFR 50.75 The Ohio Edison Company and The Toledo Edison Company obtained a parent company guarantee (PG) from their parent, FirstEnergy Corp. (FE) for obligations associated with the decommissioning of the Beaver Valley Power Plant (BVPS) and the Perry Nuclear Power Plant (PNPP) independent spent fuel storage installations (ISFSls). The FirstEnergy Nuclear Generation, LLC obtained two PGs from its parent, FirstEnergy Solutions Corp., for its decommissioning obligations. One PG is for the obligations associated with Beaver Valley Power Station, Unit No. 1 and PNPP. The second PG is associated with BVPS ISFSI, Davis-Besse Nuclear Power Station (DBNPS) ISFSI, and the PNPP ISFSI.
Enclosure A is a copy of the annual FE financial test that provides assurance that FE can support the aforementioned PG. Enclosure B is a copy of the annual FES financial test that provides assurance that FES can support the aforementioned two PGs. Each enclosure also includes a report by independent accountants of their review of the financial tests.
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-15-102 Page2 The tests were prepared in accordance with 1 O CFR 30, Appendix A, "Criteria Relating to Use of Financial Tests and Parent Company Guarantees for Providing Reasonable Assurance of Funds for Decommissioning."
The FE financial test provides assurance for a $4 million PG for the BVPS and PNPP ISFSls. The FES financial test provides assurance for a $155 million PG for Beaver Valley Power Station, Unit No. 1 and Perry Nuclear Power Plant. Additionally, the FES financial test provides assurance for a$ 20.5 million replacement PG of an existing $19 million PG for the BVPS, DBNPS, and PNPP ISFSls. The replacement PGs for the ISFSls are expected to be in place by the end of the second quarter 2015.
This submittal provides the requisite 30-day notification to the Nuclear Regulatory Commission (NRC) regarding amending the FES $19 million PG in accordance with Section 14 of the PGs.
There are no regulatory commitments contained in this letter. If there are any questions or if additional information is required, please contact Mr. Thomas A. Lentz, Manager-Fleet Licensing, at (330) 315-6810.
Sincerely, Brian D. Boles Vice President, Nuclear Support
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-15-102 Page 3
Enclosures:
A. Financial Test and Certification for FirstEnergy Corp.
B. Financial Test and Certification for FirstEnergy Solutions Corp.
cc: NRC Region I Administrator NRC Region Ill Administrator NRC Resident Inspector (BVPS)
NRC Resident Inspector (DBNPS)
NRC Resident Inspector (PNPP)
NRC Project Manager (BVPS)
NRC Project Manager (DBNPS)
NRC Project Manager (PNPP)
Director BRP/DEP Site BRP/DEP Representative Utility Radiological Safety Board
L Enclosure A L-15-102 Financial Test and Certification for FirstEnergy Corp.
(Five pages follow)
ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 20555-0001
Subject:
FirstEnergy Corp. Guarantee of Funds for Decommissioning:
March 30, 2015 Letter from Chief Financial Officer to Demonstrate Financial Assurance I am the Senior Vice President and Chief Financial Officer of FirstEnergy Corp., 76 South Main Street, Akron Ohio 44308, an Ohio corporation. This letter is in support of this firm's use of the financial test to demonstrate financial assurance, as specified in 10 CFR Part 50 and CFR Part 72.
This firm is qualified to provide parent company guarantees, up to $4 million for the decommissioning costs for the portions of the following facilities owned by subsidiaries of this firm. The current cost estimate and the amount to be guaranteed are shown for the following facilities:
Name ofFacility Perry Nuclear Power Plant Independent Spent Fuel Storage Installation Docket No. 72-69 Beaver Valley Power Station Independent Spent Fuel Storage Installation DocketNo. 72-1043 Location of Facility Perry, OH Shippingport, PA Current Cost Estimates 992,726 1,600,393 Amount to be Guaranteed 1,750,000 2,250,000 FirstEnergy Corp. is required to file a Form 10-K with the U.S. Securities and Exchange Commission for the latest fiscal year.
The fiscal year of FirstEnergy Corp. ends on December 31 51* The figures for the following items (Financial Test II: Alternative II) marked with double asterisks are derived from FirstEnergy Corp.'s independently audited, year-end financial statements and footnotes for the latest completed fiscal year ending December 31, 2014.
I hereby certify that the content of this letter is true and correct to the best of my knowledge.
Jame F. Pearson Sen* r Vice President and Chief Financial Officer, FirstEnergy Corp.
M ch 30, 2015
FINANCIAL TEST: ALTERNATIVE II (10 CFR part 30 App. A.Section II A.2.)
FirstEnergy Corp. Guarantee of Funds for Decommissioning Dollars in Millions
- 1. Guaranteed amount for the following Units:
Perry Nuclear Power Plant, ISFSI Beaver Valley Power Station, ISFSI
- 2. Current bond rating of most recent unsecured issuance of this firm Rating Name of Rating Service
- 3. Date of issuance ofbond
- 4. Date of maturity of bond
- 5. Tangible Net Worth 4.0 Baa3 Moody's 3/5/2013 3/15/2018 &
3/15/2023 3,017
- 6. Total assets in the United States (required only ifless than 90 percent of firm's assets are located in the United States)
See line 9 below
- 7. Is Line 5 at least $21 million?
- 8. Is line 5 at least 6 times line 1?
- 9. Are at least 90 percent of the firm's assets located in the United States?
Ifnot, complete line 10.
- 10. Is line 6 at least 6 times line 1?
- 11. 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)?
- Denotes figures derived from financial statements.
Yes No x
x x
NIA x
- Tangible Net Worth is defined as FirstEnergy Corp. total equity minus goodwill, patents, trademarks and copyrights; and FirstEnergy Corp.'s net book value for Beaver Valley Power Station, Unit No. 1 and 2, and Perry Nuclear Power Plant.
FIRSTENERGY CORP.
YEAR ENDED DECEMBER 31, 2014 Dollars in Millions Line Number in CFO's Letter 5-Total Equity Less: Goodwill, Patents, Trademarks and Copyrights Other Intangible Assets N~t Book Value Beaver Valley Power Station, Unit No. 1 & 2 Net Book Value Perry Nuclear Power Plant Tangible Net Worth Per Financial Statements 12,422 6,418 496 1,364 1,127 3,017
pwc Report of Independent Accountants To FirstEnergy Corp.:
We have performed the procedures enumerated below, which were agreed to by management of FirstEnergy Corp. (the "Company") solely to assist you in evaluating the Company's compliance with the financial test as of December 31, 2014 performed in accordance with the U.S. Nuclear Regulatory Commission (the "NRC") Regulations 10 C.F.R, Section 50.75(e)(1)(iii)(B) and 10 C.F.R, Section 72.3o(e)(2) as mandated 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 other purpose.
For the purpose of this report, we have:
- 1.
Read the letter, dated March 30, 2015, from your Senior Vice President and Chief Financial Officer to the NRC regarding the $4 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.
B. Traced and agreed the amount in the column "Per CFO's Letter" to line 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. 1and2, and Perry Nuclear Power Plant from the Company's stockholders' equity.
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 transactions have been disclosed in the Company's financial statements as filed in its 2014 Annual Report on Form 10-K, and he does not believe that any of the off-balance sheet transactions will materially adversely affect the Company's ability to pay decommissioning costs. We did not perform any further procedures to substantiate management's response.
E. We compared the bond ratings per line 2 qf the Letter to information obtained as of March 30, 2015 from an external, publicly available source as follows:
Ratin er line 2 of the Letter Ratin er external source External Source Mood's We were not engaged to and did not conduct an examination, the objective of which would be the expression of an opinion on compliance. Accordingly, we do not express such an opinion. Had we PricewaterhouseCoopers LLP, 200 Public Square, 18th Floor, Cleveland, OH 44114-2301 T: (216) 875 3000, F: (216) 566 7846, www.pwc.com/us
pwc performed additional procedures, other matters might have come to our attention that would have been reported to you.
This report 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.
PricewaterhouseCoopers LLP March 30, 2015
Enclosure B L-15-102 Financial Test and Certification for FirstEnergy Solutions Corp.
(Five pages follow)
ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 20555-0001
Subject:
FirstEnergy Solutions Corp. Guarantee of Funds for Decommissioning:
March 30, 2015 Letter from Chief Financial Officer 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 demonstrate financial assurance, as specified in 10 CFR Part 50 and CFR Part 72.
This firm is qualified to provide parent company guarantees, up to $175.5 million for the decommissioning costs for the portions of the following facilities owned by subsidiaries of this firm. The current cost estimate and the amount to be guaranteed for the portions of the facilities owned are shown as follows:
Name of Facility Beaver Valley Power Station, Unit No. 1 License No. DPR-66 Perry Nuclear Power Plant License No. NPF-58 Location of Facility Shippingport, PA Perry, OH Davis-Besse Nuclear Oak Harbor, OH Power Station Independent Spent Fuel Storage Installation Docket No.72-014 Perry Nuclear Power Plant Perry, OH Independent Spent Fuel Storage Installation Docket No. 72-69 Beaver Valley Power Shippingport, PA Station Independent Spent Fuel Storage Installation Docket No. 72-1043 Current Cost Estimates
$ 510,038,480
$ 594,097,578 5,493,000 6,898,574 6,417,607 Amount to be Guaranteed 90,000,000
$ 65,000,000 6,000,000 7,500,000 7,000,000 FirstEnergy Solutions Corp. is required to file a Form 10-K with the U.S. Securities and Exchange Commission for the latest fiscal year.
The fiscal year of FirstEnergy Solutions Corp. ends on December 31st. The figures for the following items (Financial Test II: Alternative II) marked with 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, 2014.
I hereby certify that the content of this letter is true and correct to the best of my knowledge.
~*~
ames F. Pearson Senior Vice President and Chief Financial Officer, FirstEnergy Solutions Corp.
March 30, 2015
FINANCIAL TEST: ALTERNATIVE II (10 CFR part 30 App. A.Section II A.2.)
FirstEnergy Solutions Corp. Parent Guarantee of Funds for Decommissioning Dollars in Millions
- 1. Guaranteed amount for the following Units:
Beaver Valley Power Station, Unit No. 1, License No. DPR-66 Beaver Valley Power Station, ISFSI Perry Nuclear Power Plant, License No. NPF-58 Davis-Besse Nuclear Power Station, ISFSI Perry Nuclear Power Plant, ISFSI
- 2. Current bond rating of most recent unsecured issuance of this firm Rating Name of Rating Service
- 3. Date of issuance of bond
- 4. Date of maturity of bond
- 5. Tangible Net Worth
- 6. Total assets in the United States (required only if less than 90 percent of firm's assets are located in the United States)
- 7. Is Line 5 at least $21 million?
- 8. Is line 5 at least 6 times line l?
- 9. Are at least 90 percent of the firm's assets located in the United States?
lfnot, complete line 10.
- 10. Is line 6 at least 6 times line 1?
- 11. 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)?
- Denotes figures derived from financial statements.
175.5 Baa3 Moody's 8/7/2009 8/15/2021 &
8/15/2039 1,444 See line 9 below Yes No x
x x
NIA x
- Tangible Net Worth is defined as FirstEnergy Solutions Corp. 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 Nuclear Power Plant and Davis-Besse Nuclear Power Station.
FIRSTENERGY SOLUTIONS CORP.
YEAR ENDED DECEMBER 31, 2014 Dollars in Millions Line Number in CFO's Letter 5-Total Equity Less: Goodwill, Patents, Trademarks and Copyrights Other Intangible Assets Net Book Value Beaver Valley Power Station, Unit No. 1 & 2 Net Book Value Perry Nuclear Power Plant Net Book Value Davis-Besse Nuclear Power Station Tangible Net Worth Per Financial Statements 5,585 23 106 1,588 1,172 1;252 1,444
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 compliance with the financial test as of December 31, 2014 performed in accordance with the U.S. Nuclear Regulatory Commission (the "NRC") Regulations 10 C.F.R, Section 50.75(e)(1)(iii)(B) and 10 C.F.R, Section 72.3o(e)(2) as mandated 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 sufficit;ncy of the procedures described below either for the purpose for which this report has been requested or for any other purpose.
For the purpose of this report, we have:
- 1.
Read the letter, dated March 30, 2015, from your Senior Vice President and Chief Financial Officer to the NRC regarding the $175.5 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.
B. Traced and agreed the amount in the column "Per CFO's Letter" to line 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 Solutions 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.
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 transactions have been disclosed in the Company's financial statements as filed in its 2014 Annual Report on Form 10-K, and he does not believe that any of the off-balance sheet transactions will materially adversely affect the Company's ability to pay decommissioning costs. We did not perform any further procedures to substantiate management's response.
E. We compared the bond ratings per line 2 of the Letter to information obtained as of March 30, 2015 from an external, publicly available source as follows:
Ratin er line 2 of the Letter Ratin er external source External Source Mood's We were not engaged to and did not conduct an examination, the objective of which would be the expression of an opinion on compliance. Accordingly, we do not express such an opinion. Had we PricewaterhouseCoopers LLP, 200 Public Square, 18th Floor, Cleveland, OH 44114-2301 T: (216) 875 3000, F: (216) 566 7846, www.pwc.com/us
pwc performed additional procedures, other matters might have come to our attention that would have been reported to you.
This report 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.
PricewaterhouseCoopers LLP March 30, 2015