ML16181A415

Request for Order Approving Indirect Transfer of Control - PLA-7500

ML16181A415
Person / Time
Site:	Susquehanna
Issue date:	06/29/2016
From:	Rausch T S Susquehanna, Talen Energy
To:	Document Control Desk, Office of Nuclear Material Safety and Safeguards, Office of Nuclear Reactor Regulation
Shared Package
ML16181A414	List: ML16181A415 ML16181A417 ML16181A419 PLA-7500, Affidavit of Timothy S. Rausch
References
PLA-7500
Download: ML16181A415 (34)

Text

CONTAINS PROPRIETARY INFORMATION WITHHOLD UNDER 10 CFR § 2.390 Timothy S. Rausch President and Chief Nuclear Officer JUN 2 9 2016 U.S. Nuclear Regulatory Commission Attn: Document Control Desk Washington, DC 20555-0001 Susquehanna Nuclear, LLC 769 Salem Boulevard Berwick , P A 18603 Tel. 570.542.3345 Fax 570.542.1504 Timothy.Rausch@TalenEnergy.com SUSQUEHANNA STEAM ELECTRIC STATION REQUEST FOR ORDER APPROVING INDIRECT TRANSFER OF CONTROL PLA-7500 ENERGY Docket Nos. 50-387 50-388 and 72-28 In accordance with Section 184 of the Atomic Energy Act, 10 C.P.R.§ 50.80, and 10 C.P.R. § 72.50(a), Susquehanna Nuclear, LLC ("Susquehanna Nuclear"), acting on behalf of itself and Riverstone Holdings, LLC ("Riverstone"), submits the enclosed Application for Nuclear Regulatory Commission

("NRC") consent to the indirect transfer of control of Susquehanna Nuclear's interests in Facility Operating License Nos. NPF-14 and NPF-22 for the Susquehanna Steam Electric Station ("SSES") Units 1 and 2, as well as the general license for the SSES Independent Spent Fuel Storage Installation

("ISFSI").

Susquehanna Nuclear currently owns 90% each of SSES Units 1 and 2 and is the sole operator of these nuclear units (the remaining 10% of S SES Units 1 and 2 is owned by Allegheny Electric Cooperative, Inc.). The indirect transfer of control results from a transaction in which Tal en Energy Corporation

("Tal en"), Susquehanna Nuclear's ultimate parent, will become wholly owned by the portfolio companies of Riverstone that currently hold 35% in the aggregate of the outstanding common stock of Talen (the "Shareholder Transaction").

As a result, all of the common stock ofTalen will become privately held by affiliates of Riverstone , and Susquehanna Nuclear will become indirectly controlled by Riverstone as described in this Application.

Simplified organization charts showing the current and post-organization ownership structures are provided as Figures 1 and 2 of the enclosed Application.

The proposed indirect transfer of control in connection with the Shareholder Transaction will result in no change to the role of Susquehanna Nuclear as the licensed operator of the nuclear units, no change to its technical qualifications, and no change in its ownership interest or that of Allegheny Electric Cooperative, Inc. No changes will be made to the units or their licensing bases as a result of the Shareholder Transaction or to the day management and operations of the units. UNRESTRICTED UPON REMOVAL OF ATTACHMENTS 3P AND 4P Document Control Desk PLA-7500 Additional infonnation pertaining to the proposed indirect transfer of control, including the information required under 10 C.F.R. § 50.80(b), is included in the enclosed Application.

As this infmmation demonstrates, the Shareholder Transaction will not: (1) affect the technical qualifications of Susquehanna Nuclear as the licensed operator of SSES; (2) have any material adverse impact on Susquehanna Nuclear's financial qualifications; (3) affect assurance of decommissioning funding for SSES or the ISFSI; or (4) result in foreign ownership, control or domination over any of the licenses or licensees.

In summary, the Shareholder Transaction will not result in any undue risk to public health and safety and will not be inimical to the common defense and security.

Susquehanna Nuclear therefore requests that the NRC consent to the indirect transfer of control of the licenses for the SSES Units and ISFSI in accordance with 10 C.F.R. § 50.80 and§ 72.50(a).

No license amendments are required for this Shareholder Transaction.

In order to timely and fully realize the benefits of the Shareholder Transaction, the parties are seeking to complete the Shareholder Transaction by the end of2016. To meet that goal with sufficient time to prepare for closing, Susquehanna Nuclear requests that the NRC review this Application and consent to the indirect transfer of control no later than November 30, 2016. The patiies believe that an expeditious review is achievable given that the same pmiies and issues were reviewed by the NRC in connection with the indirect transfer of control approved by the NRC in April2015.

The parties are prepared to promptly and fully support the NRC's review as necessary.

Susquehanna Nuclear further requests that the NRC's consent, when issued, should be made immediately effective and should permit the indirect transfer of control at any time for one year following NRC consent. There are certain regulatory approvals and reviews beyond that of the NRC which must be completed prior to closing of the Shareholder Transaction. These include approval of the Shareholder Transaction by the Federal Energy Regulatory Commission

("FERC") and a filing pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The parties received early termination of the HSR waiting period on June 24, 2016. Approval of the shareholders of Tal en is also required.

Susquehanna Nuclear will timely infmm the NRC if there are any significant changes in the status of any other required approvals and of any other developments that have a material impact on the schedule, and will timely notify the NRC Staff when the closing will occur. Attachment 3P and Attachment 4P of the Application contain confidential commercial and financial infmmation. Susquehanna Nuclear requests that this information be withheld from public disclosure pursuant to 10 C.F.R. § 2.390, as described in my Affidavit, provided in Attachment 6 to the Application.

Non-proprietary versions of these Attachments, suitable for public disclosure, are provided as Attachment 3NP and Attachment 4NP to the Application. Document Control Desk PLA-7500 There are no new regulatory commitments associated with this Application.

In the event that the NRC requires any additional information concerning this indirect license transfer request, please contact Mr. Rocco R. SgalTo at (610) 774-7552.

I declare under penalty of perjury that the information in this Application pe1iaining to Susquehanna Nuclear and Tal en is true and cmTect to the best of my knowledge and belief. A separate affirmation by Riverstone is provided as an Attachment to this letter supporting the information in this Application relating to Riverstone and its relevant affiliates.

Executed on:

Attachment:

Affirmation from Riverstone

Enclosure:

Application for Order Approving Indirect Transfer of Control of Facility Operating License Nos. NPF-14 and NPF-22 (Attachment 3P and Attachment 4P to this Enclosure contain Proprietary Information, which is to be withheld under 1 OCFR § 2.390) cc: NRC Region I Mr. J. Greives, NRC Sr. Resident Inspector Ms. T. Hood, NRC Project Manager Mr. M. Shields, PA DEP/BRP SUSQUEHANNA STEAM ELECTRIC STATION REQUEST FOR ORDER APPROVING INDIRECT TRANSFER OF CONTROL DOCKET NOS. 50-387,50-388, AND 72-28 I, Ralph Alexander, state as follows: (1) I am a Partner ofRiverstone Holdings_LLC. (2) I am authorized to provide infom1ation regarding Riverstone Holdings LLC, its relevant affiliates, and management after closing of the Shareholder Transaction in connection with the Request for Order Approving an Indirect Transfer of Control ("Application")

submitted to the Nuclear Regulatory Commission for the Susquehanna Steam Electric Station. (3) I declare under penalty of perjury that the information in the Application pertaining to Rivers tone and its affiliates is true and correct, to the best of my knowledge and belief. Executed on:

2016 Ralph Alexander Enclosure to PLA-7500 Application for Order Approving Indirect Transfer of Control of Facility Operating License Nos. NPF-14 and NPF-22 UNITED STATES OF AMERICA Enclosure to PLA-7500 Page 1 of21 June 29, 2016 Before the U.S. Nuclear Regulatory Commission In the Matter of Susquehanna Nuclear, LLC Susquehanna Steam Electric Station, Units 1 and 2) ) ) ) ) ) ) Docket Nos. 50-387 50-388 and 72-28 Application for Order Approving Indirect Transfer of Control of Facility Operating License Nos. NPF-14 and NPF-22 I. INTRODUCTION In accordance with Section 184 of the Atomic Energy Act, 10 C.F.R. § 50.80, and 10 C.F.R. § 72.50(a), this Application requests consent of the Nuclear Regulatory Commission

("NRC") to the indirect transfer of control of Susquehanna Nuclear, LLC's ("Susquehanna Nuclear")

interests in Facility Operating License Nos. NPF-14 and NPF-22 for the Susquehanna Steam Electric Station ("SSES") Units 1 and 2, as well as the general license for the SSES Independent Spent Fuel Storage Installation

("ISFSI").

Susquehanna Nuclear is licensed as the sole operator and has a 90% undivided ownership interest in SSES. The proposed indirect transfer oflicenses does not involve Allegheny Electric Cooperative, Inc., the other (1 0%) owner of the units and a non-operating licensee for SSES. The indirect transfer of control results from a transaction (the "Shareholder Transaction")

in which Talen Energy Corporation

("Talen"), Susquehanna Nuclear's ultimate parent, will become wholly owned by the portfolio companies ofRiverstone Holdings LLC ("Riverstone")

that currently hold 35% in the aggregate of the outstanding common stock ofTalen. As a result, Enclosure to PLA-7500 Page 2 of21 all of the common stock ofTalen will become privately held by affiliates ofRiverstone, and Susquehanna Nuclear will become indirectly controlled by Riverstone as described in this application.

Riverstone is an energy and power focused private investment firm, and each of the portfolio companies is ultimately controlled by Riverstone, which is controlled by its founders, Mr. Pierre Lapeyre and Mr. David Leuschen, both of whom are U.S. citizens.

As part of the completed spin-offby PPL Corporation of its domestic competitive generation and ancillary assets into Talen that was approved by the NRC in April2015, 1 three portfolio companies of Riverstone contributed power generation assets to Tal en in return for a non-controlling interest in Talen in the form of an aggregate 35 percent share ofTalen's common stock. The remaining 65 percent ofTalen's common stock was distributed to PPL Corporation's public shareholders.

As a result, approximately 19.8 percent ofTalen's common stock is currently held by Raven Power Holdings, LLC ("Raven"), approximately 12.7 percent ofTalen's common stock is currently held by C/R Energy Jade, LLC ("Jade"), and approximately

2.5 percent

ofTalen's common stock is currently held by Sapphire Power Holdings LLC ("Sapphire").

In connection with the Shareholder Transaction, RPH Parent LLC ("RPH"), a Delaware limited liability company and a wholly-owned subsidiary of Raven, SPH Parent LLC ("SPH"), a Delaware limited liability company and a wholly-owned subsidiary of Sapphire, CRJ Parent LLC ("CRJ), a Delaware limited liability company and a wholly-owned subsidiary of Jade, and RJS Merger Sub Inc. ("Merger Sub"), a Delaware corporation that is wholly owned by RPH, 1 Susquehanna Nuclear (then called PPL Susquehanna) sought NRC consent to indirect transfers of control associated with this spin-off by application dated July 11, 2014 (ADAMS Accession Nos. ML14195Al15 and. ML14195A113), which the NRC approved by Order dated April 10,2015 (ADAMS Accession No. ML15054A058).

Enclosure to PLA-7500 Page 3 of21 SPH, and CRJ, have entered into a defmitive Agreement and Plan of Merger dated as of June 2, 2016 (the "Merger Agreement")

with Talen. Pursuant to the Merger Agreement: (a) upon closing, Merger Sub will merge with and into Talen, with Talen continuing as the surviving corporation, (b) each share of Tal en's common stock outstanding as of immediately prior to the effective time of the merger (other than shares held in treasury by Talen, shares held by Talen's subsidiaries, shares held by Raven, Jade or Sapphire, and shares pursuant to which dissenting rights under Delaware law have been properly exercised and not withdrawn or lost) will be automatically converted into the right to receive $14.00 in cash, and (c) Raven, Jade and Sapphire will convert their existing ownership of approximately 35% of the issued and outstanding shares ofTalen's common stock into shares of the surviving corporation, such that Raven, Jade and Sapphire will own 100% of the outstanding common stock ofTalen after closing of the Shareholder Transaction.

Simplified organization charts showing the current and post-organization ownership structures are provided as Figures 1 and 2 of this Application.

II. STATEMENT OF PURPOSE OF THE TRANSFERS AND NATURE OF THE TRANSACTIONS MAKING THE TRANSFERS NECESSARY OR DESIRABLE The purpose of the Shareholder Transaction is to take private the ownership ofTalen by portfolio companies ofRiverstone.

The Shareholder Transaction is intended to provide value to the current shareholders of Tal en and to enhance the long-term business prospects of Tal en. The Shareholder Transaction does not involve any change in the facilities owned and operated by Talen, including SSES, but simply replaces the public shareholders of Talen with the Riverstone portfolio companies that currently hold 35% in the aggregate of the outstanding common stock ofTalen.

Enclosure to PLA-7500 Page 4 of21 III. SUPPORTING INFORMATION A. Name of Licensee Susquehanna Nuclear, LLC. B. Address 769 Salem Boulevard Berwick, P A 18603 C. Description of Business or Occupation Susquehanna Nuclear is and upon completion of the Shareholder Transaction will remain a limited liability company organized under the laws of the State of Delaware, with its principal place of business in Pennsylvania , formed to hold interests in and operate SSES. D. Board of Managers and Principal Officers The current Board of Managers and the Principal Officers of Susquehanna Nuclear, all of whom are U.S. citizens with the same corporate address as Susquehanna Nuclear, are listed below.

MANAGERS:

PRINCIPAL OFFICERS:

Russell R. Clelland Clarence J. Hopf, Jr. Jeremy R. McGuire Timothy S. Rausch Enclosure to PLA-7500 Page 5 of21 Timothy S. Rausch ............. President and Chief Nuclear Officer Jeremy R. McGuire ............

Senior Vice President Jon A. Franke ................... Site Vice President-Susquehanna Jeffrey M. Helsel. .............. Vice President-Nuclear Operations If, prior to the NRC's issuance of its consent to the Shareholder Transaction, it is determined that any changes to these managers or principal officers will occur prior to or at closing of the Shareholder Transaction, Susquehanna Nuclear will timely notify the NRC of such determination.

E. Agency Susquehanna Nuclear is seeking consent to this indirect transfer of control on its own behalf and on behalf of Riverstone and its affiliates.

Susquehanna Nuclear is not acting as the agent or representative of any other person. F. Relationship to Shareholders Susquehanna Nuclear is a wholly owned subsidiary of Talen Generation, LLC, which, in tum, is a wholly owned subsidiary of Talen Energy Supply, LLC ("Tal en Energy Supply").

Talen Energy Supply is a wholly owned subsidiary ofTalen Energy Holdings, Inc., which, in tum, is a wholly owned subsidiary ofTalen. General corporate information specified in 10 C.F.R. § 50.33(d)(3) for Talen is provided in Attachment 1 to this Application. Attachment 1 identifies the current Talen directors and principal officers.

It is possible that certain directors Enclosure to PLA-7500 Page 6 of21 and principal officers ofTalen will change at or following the closing of the Shareholder Transaction; however, the parties expect that any replacement directors or principal officers of Talen will be U.S. citizens. If, prior to the NRC's issuance of its consent to the Shareholder Transaction, it is determined that any changes to Talen's directors or principal officers will occur prior to or at closing of the Shareholder Transaction , Susquehanna Nuclear will timely notify the NRC of such determination. Currently , approximately 19.8 percent ofTalen's common stock is held by Raven , approximately 12.7 percent ofTalen's common stock is held by Jade, and approximately

2.5 percent

ofTalen's common stock is held by Sapphire.

Upon closing of the Shareholder Transaction, Raven will hold approximately 56.6% ofTalen's common stock, Jade will hold approximately 36.3% ofTalen's common stock and Sapphire will hold approximately 7.1% of Talen's common stock. Ultimately, each of Raven, Jade and Sapphire is controlled by Riverstone.

Riverstone is an energy and power focused private investment firm founded in 2000 with approximately

$34 billion of capital raised. The firm is a Delaware limited liability company based in New York City. Riverstone was founded by Pierre F. Lapeyre, Jr. and David M. Leuschen.

Riverstone has two classes of membership interests.

By the nature of their membership interests, Mr. Lapeyre and Mr. Leuschen have full and equal control over the operation and management ofRiverstone.

They are based in New York and are U.S. citizens.

Figure 3 to this Application depicts the relationship between each of Raven, Jade and Sapphire and Riverstone, which is described further below. General corporate information for Enclosure to PLA-7500 Page 7 of21 the Riverstone entities controlling interests in each of Raven, Jade, Sapphire and Merger Sub is provided in Attachment 2 to this Application.

Raven Power Holdings LLC Raven is a Delaware limited liability company. Approximately 99% of the Class A Units (voting interests) of Raven are owned by Riverstone V Raven Holdings, L.P. Certain individuals who have provided services to or been employed by Raven own less than 1% in the aggregate of the outstanding Class A Units. The Class A Units constitute 100% ofthe voting interests in Raven. According to Raven's records, each of these individuals is a U.S. citizen. A group of individuals who have provided services to or been employed by Raven own Class B Units of Raven, which are profits interests without voting rights. According to Raven's records, all of the Class B members of Raven are U.S. citizens.

There is no "managing member" of Raven. Instead, a board of directors appointed by Riverstone V Raven Holdings, L.P, has full managerial authority over Raven. Riverstone V Raven Holdings, L.P is controlled by its general partner, Riverstone Energy Partners V, L.P., a Delaware limited partnership

("Riverstone GP"). The general partner of Riverstone GP is Riverstone Energy GP V, LLC, a Delaware limited liability company, which, in tum, is managed by its Managing Committee, composed of Pierre F. Lapeyre, Jr., David M. Leuschen, James T. Hackett, Michael B. Hoffman, N. John Lancaster, Jr., Mark G. Papa, and Andrew W. Ward, with each of E. Batiow Jones, Baran Tekkora and Robert M. Tichio serving as an additional member on a rotating basis. All are U.S. citizens.

Riverstone Energy GP V, LLC is 100% owned by Riverstone Energy GP V Corp., a Delaware corporation, which is 100% owned by Riverstone.

As such, Raven is ultimately controlled by Riverstone.

C/R Energy Jade, LLC Enclosure to PLA-7500 Page 8 of21 Jade is a Delaware limited liability company. Over 90% ofthe Class A Units (voting interests) of Jade are owned by investment vehicle affiliates of Carlyle/Riverstone Global Energy and Power Fund III, L.P. that are controlled by Carlyle/Riverstone Energy Partners III, L.P. ("Fund III GP"), a Delaware limited partnership (such investment vehicle affiliates, collectively, the "Fund III Vehicles").

2 Each of the Fund III Vehicles is organized in the State of Delaware.

A group of individuals who have provided services to or been employed by Jade owns Class B Units of Jade, which are profits interests without voting rights. According to Jade's records, all ofthese Class B members are U.S. citizens.

There is no "managing member" of Jade. Instead, Jade is controlled by its board of directors.

The general partner and controlling entity of Fund III GP is C/R Energy GP III, LLC ("C/R GP LLC"), a Delaware limited liability company. C/R GP LLC is managed by its Managing Committee, composed ofWilliam E. Conway, Jr., Daniel D'Aniello, David M. Rubenstein, Edward Mathias, Pierre F. Lapeyre, Jr., David M. Leuschen, Michael B. Hoffman and N. John Lancaster, all of whom are U.S. citizens. Riverstone and Riverstone Investment Group LLC, a Delaware limited liability company and a wholly-owned, direct subsidiary of Riverstone, on the one hand, and TC Group Cayman Investment Holdings, L.P., a Cayman Islands limited partnership, and TC Group-Energy LLC, a Delaware limited liability company, both affiliates of Carlyle, on the other hand, own all of the 2 There are two entities that collectively hold less than 10% of Class A Units of Jade Holdings and are not controlled by the Fund III GP: (i) Carlyle Energy Coinvestment III, L.P., a Delaware limited partnership, whose general partner is Carlyle Energy Coinvestment III GP, L.L.C., a Delaware limited liability company, which is ultimately controlled by the senior executives of The Carlyle Group; and (ii) Riverstone Energy Coinvestment III, L.P., a Delaware limited partnership , whose general partner is Riverstone Coinvestment GP LLC, a Delaware limited liability company, which is wholly-owned by Riverstone.

Enclosure to PLA-7500 Page 9 of21 membership interests of C/R GP LLC. Although both Riverstone and Carlyle have indirect interests in Jade, by unanimous written consent ofthe Managing Committee ofC/R GP LLC, the authority to appoint all of the directors of Jade is delegated to the managers appointed by Riverstone.

As such, Jade is ultimately controlled by Riverstone. Sapphire Power Holdings LLC Sapphire is a Delaware limited liability company. All of the Class A Units or voting interests in Sapphire are held by RIC Sapphire Power IP, L.P., a Delaware limited partnership.

A group of individuals who have provided services to or been employed by Sapphire Holdings owns Class B Units, which are profits interests without voting rights. According to Sapphire Holdings' records, all of these Class B members are U.S. citizens.

There is no "managing member" of Sapphire.

Instead, Sapphire is controlled by its board of directors, which is appointed by RIC Sapphire Power IP, L.P. RIC Sapphire Power IP, L.P. 3 is controlled by its general partner, Riverstone/Carlyle Renewable Energy Partners II, L.P., a Delaware limited partnership whose general partner and controlling entity is, in tum, RIC Renewable Energy GP II, LLC, a Delaware limited liability company. The sole member of RIC Renewable Energy GP II, LLC is Riverstone.

As discussed above, Riverstone is controlled by 3 RIC Sapphire Power IP , L.P. is approximately 92% owned by Riverstone

/Carlyle Renewable and Alternative Energy Fund II-C, L.P., a Delaware limited partnership that is also controlled by Riverstone

/Carlyle Renewable Energy Partners II, L.P. (the same general partner that controls RIC Sapphire Power IP , L.P.). In addition , approximately 5% of RIC Sapphire Power IP, L.P. is owned by another Delaware limited partnership that is controlled by Riverstone

/Carlyle Renewable Energy Partners II, L.P. The remaining interests (less than 3%) in RIC Sapphire Power IP , L.P. are held by the following: (i) Riverstone Renewable Energy Coinvestment II (Cayman), L.P., a Cayman Islands exempted limit e d partnership that is controlled by its gen e ral pa1tner, Riverstone Renewable Energy Coinvestment II GP, LLC , a Delaware limited liability company, which is itself wholly-owned by Riverstone; and (ii) Carlyle Ren e wable Energy Coinvestment II, L.P., a Delaware limited partnership, which is ultimately controlled by its general partner Carlyle Renewable En e rgy Co-Investment II GP , L.L.C., a Delaware limited liability company , which is controlled by the senior executives of The Carlyle Group.

Enclosure to PLA-7500 Page 10 of21 Pierre F. Lapeyre, Jr. and David M. Leuschen, both of whom are U.S. citizens. As such, Sapphire is ultimately controlled by Riverstone.

IV. FOREIGN OWNERSIDP OR CONTROL The Shareholder Transaction will not result in Susquehanna Nuclear becoming owned, controlled or dominated by an alien, foreign corporation or a foreign government.

As the previous discussion demonstrates, the Riverstone shareholders of Talen are all controlled by affiliates that are U.S. companies, and ultimately by Riverstone, which is controlled by its founders, Pierre F. Lapeyre, Jr. and David M. Leuschen, both of whom are U.S. citizens.

Upon the closing of the Shareholder Transaction, Raven will own the majority ofTalen's common stock. As previously discussed, Riverstone V Raven Holdings, L.P., which owns 99 percent of the voting membership units in Raven, is a U.S. company (a Delaware limited partnership) controlled by its general partner, Riverstone GP (as noted above, a Delaware limited partnership and thus a U.S. company), which is in tum controlled by its general partner, Riverstone Energy GP V LLC (a Delaware limited liability company, and thus also a U.S. company).

Riverstone Energy GP V LLC is managed by its eight-person (seven permanent and one rotating member at any given time) Management Committee, and is 100% owned by Riverstone Energy GP V Corp., which is 100% owned by Riverstone.

Pursuant to its operating agreement, Riverstone is controlled by its founders, Pierre F. Lapeyre, Jr. and David M. Leuschen, both of whom are U.S. citizens.

The remainder of the Talen common stock outstanding following the closing of the Shareholder Transaction will be owned by Sapphire and Jade. As described in Section III above, each of Sapphire and Jade is a U.S. company and is ultimately controlled by Riverstone, which is Enclosure to PLA-7500 Page 11 of21 controlled by its founders, Pierre F. Lapeyre, Jr. and David M. Leuschen, both of whom are U.S. citizens.

In addition , the managers and principal officers of Susquehatma Nuclear are U.S. citizens.

If any changes are made as a result of the Shareholder Transaction, any replacements are also expected to be U.S. citizens.

As previously stated, Susquehanna Nuclear will promptly inform the NRC if any changes to its principal officers are identified before the closing. Talen's principal officers and current directors are U.S. citizens, other than one director who is a citizen of the UK. If any changes are made as a result of the Shareholder Transaction, any replacements are also expected to be U.S. citizens. V. TECHNICAL QUALIFICATIONS Susquehanna Nuclear will continue to be the plant operator , and the technical qualifications of Susquehanna Nuclear will not be affected by the Shareholder Transaction and indirect license transfer.

The Shareholder Transaction will not require any change in the management or staffing of the nuclear organization , or any change in its procedures.

The SSES nuclear organization will continue to have clear and direct lines of responsibility and authority, which will be unaffected by the Shareholder Transaction. Susquehanna Nuclear's review of the SSES Quality Assurance (QA) Program Description has not identified any changes resulting from the Shareholder Transaction that would result in a decrease in commitments from the Description pursuant to 10 C.F.R. § 50. 54( a). VI. FINANCIAL QUALIFICATIONS Susquehanna Nuclear will remain financially qualified to operate and possess its interest in SSES. In accordance with 10 C.F.R. § 50.33(f) and the Standard Review Plan on Power Enclosure to PLA-7500 Page 12 of21 Reactor Licensee Financial Qualifications and Decommissioning Funding Assurance (NUREG-1577, Revision 1), a projected income statement for the five-year period from January 1, 2017 until December 31, 2021, is provided in proprietary Attachment 3P for each unit. A redacted, non-proprietary version of these income statements suitable for public disclosure is included with the Application as Attachment 3NP. The projected income statements show that Susquehanna Nuclear's anticipated revenues from competitive sales of energy, capacity and ancillary services provide reasonable assurance of an adequate source of funds to meet Susquehanna Nuclear's share of SSES 's anticipated expenses.

It should be noted that Susquehanna Nuclear's share of the output from SSES Units 1 and 2 is sold in the PJM market, and the Shareholder Transaction does not affect the anticipated revenues or expenses reflected in the projected income statement.

The revenues in the projected income statements are based on sale of Susquehanna Nuclear's 90% share ofSSES generation (i.e., 2244 MW(e) ofthe station's 2494 MW(e) rated capacity, consisting of 1122 MW( e) per Unit) and projected capacity factors. The capacity factors for 2017-2021 were derived from the Equivalent Planned Outage Factor (EPOF), the Equivalent Unplanned Outage Factor (EUOF), and utilization factors, as shown in the table in proprietary Attachment 4P. A redacted, non-proprietary version of this table suitable for public disclosure is included with the Application as Attachment 4NP. The number of planned outage days for each unit in each year, taken from Susquehatma Nuclear's 5-year business plan, produces the EPOF. The projected EUOF is based upon the average unplanned outage rate over the last five years , adjusted to account for the improved performance resulting from resolution of previous turbine blade cracking issues. The historic unplannyd outage rate is derived from the Generating Availability Data System (GADS) data reported to NERC/PJM.

The capacity factor of each unit is also affected by the Unit's utilization factor , which accounts for the unit's ability Enclosure to PLA-7500 Page 13 of21 to produce more than the rated capacity (determined by summer test) during months with colder temperatures.

The annual utilization factors for each unit are based on historic generation in each month and differ slightly from year to year depending on the months in which planned outages are scheduled.

The revenue in the projected income statements includes income from the sale of both energy and capacity.

With respect to the sale of energy, the projected prices are based upon a blending of market and fundamental prices. The market prices utilized are the forward prices of energy observed in the market as of the end of April2016.

The fundamental prices are a proprietary forecast of energy prices developed by Talen's Risk Management Department based upon forecasted natural gas prices and utilizing various other internal assumptions.

In the projected income statement, the observable forward market prices are applied in 2017. In 2018 and 2019, the projected income statement applies a blending of market and fundamental prices. In 2020 and 2021, the projected income statements are based upon fundamental prices. The price for capacity payments are those determined by the P JM capacity auctions, including the Base Residual Auction conducted in May 2016 for the 2019/2020 delivery year. Because a capacity auction has not yet occurred for future delivery years, the projected capacity price is based on the projection in Talen's current business plan. The revenues for ancillary services are based on historical ancillary revenue from 2012 through 2015. The projected operating expenses in the projected income statements are based on Susquehanna Nuclear's business plan extending through 2020 that has been reviewed by the Board of Directors ofTalen, and reflect Susquehanna Nuclear's 90% share ofSSES. The Enclosure to PLA-7500 Page 14 of21 projected operating expenses for 2021 are derived by escalating the planned expenses in 2020 by 2.25 percent. In the separate base case analyses for Units 1 and 2, the projected revenue from sale of energy and capacity exceeds projected expenses for each unit throughout the five year period. Two sensitivity analyses are included:

(1) a 10% reduction in the forecast capacity factor, and (2) a 10% reduction in forecast price of electricity.

In all cases and years, the projected revenue from sale of energy and capacity exceeds projected expenses. In connection with the previously approved and completed spin off ofPPL Energy Supply into Talen, Talen entered into a Support Agreement with Susquehanna Nuclear to make funding of up to $205 million available to Susquehanna Nuclear, corresponding to the fixed operating costs that would be incurred during a six month outage of both units.4 Attachment 3P shows that the amount of the current Support Agreement continues to cover such estimated fixed operating costs. Accordingly, there is no need to alter the Support Agreement, which remains in effect in accordance with license conditions in Appendix C of the SSES licenses.

Talen has ample resources to fulfill its obligations under the Support Agreement.

It currently owns approximately 16,000 MWe of generating capacity, has projected adjusted earnings before interest, taxes, depreciation and amortization

("adjusted EBITDA")5 averaging 4 The executed Support Agreement was provided to the NRC by letter dated May 28, 2015 (ADAMS Accession No. ML15148A581). 5 Adjusted EBITDA represents net income (loss) before interest , income taxes , depreciation and amortization, or EBITDA , further adjusted for cetiain non-cash and other items that Talen's management believes are not indicative of ongoing operations, including, but not limited to, unrealized gains and losses on derivative contracts, stock-based compensation expense, asset retirement obligation accretion , gains and losses on securities in the nuclear decommis s ioning trust fund, impairments , gains or losses on sales, dispositions or retirements of assets, debt extinguishments, and transition , transaction and restructuring costs.

Enclosure to PLA-7500 Page 15 of21 $670 million annually for 2016 through 2020.6 In addition, Talen's expected liquidity at closing of the Shareholder Transaction, based on its credit facility and expected cash on hand, is in the range of approximately

$500 million to $1 billion. Susquehanna Nuclear's financial assurance for decommissioning funding will similarly remain in effect and be unaffected by the proposed indirect license transfer.

Susquehanna Nuclear currently provides such assurance through the prepayment method, pursuant to 10 C.F.R. § 50.75(e)(1)(i).

As of December 31,2015 , the nuclear decommissioning master trust established by Susquehanna Nuclear, which is segregated from the licensee's assets and outside its administrative control, contains investments with a market value totaling $450,015,791 for Unit 1 and $501,198,805 for Unit 2. The minimum amount of decommissioning funds estimated to be required pursuant to 10 C.F.R. § 50.75(b) & (c) is $620,379,000 per unit, as calculated in Attachment

4. The estimated cost to decommission the Independent Spent Fuel Storage Installation (ISFSI), based on the decommissioning cost estimate submitted by Susquehmma Nuclear on December 16,2015 in accordance with 10 C.F.R. § 72.30(b) (ADAMS Accession No. ML15350A071), is $14.833 million. On a per unit basis, when 2 percent real earnings are credited up to the times of permanent termination of operations, along with a pro-rata credit during a dismantlement period, as permitted by 10 C.F.R. § 50.75(e)(1)(i), the credited value of the funds ($815,141,316 and $939,899,446 for Units 1 and 2 respectively) exceeds Susquehanna Nuclear's 90% ownership share of the NRC minimum requirement

($620,379,000 for each unit as of December 31, 20 15) and the cost to decommission the ISFSI. Therefore , the proposed 6 The adjusted EBITDA projection for Talen and the information in Attachment 3P reflect infmmation available in late May 2016.

Enclosure to PLA-7500 Page 16 of21 indirect license transfer will have no effect upon Susquehanna Nuclear's financial assurance for decommissioning funding. VII. PRICE-ANDERSON INDEMNITY AND NUCLEAR INSURANCE The proposed indirect transfer of control will have no effect on the existing Price-Anderson indemnity or the nuclear insurance (property and liability) for SSES. Susquehanna Nuclear will maintain the required nuclear property damage insurance pursuant to 10 C.F.R. § 50.54(w) and nuclear liability insurance pursuant to Section 170 of the Atomic Energy Act and 10 C.F.R. Part 140. Susquehanna Nuclear's annual reporting in compliance with 10 CFR § 140.21 provides reasonable assurance regarding its ongoing ability to pay its share of any annual retrospective premium. As there is no change to the licensees, no revision to the indemnity agreements for Units 1 and 2 is required.

VIII. ANTITRUST INFORMATION In accordance with the Commission's decision in Kansas Gas and Electric Co., (Wolf Creek Generating Station, Unit 1), CLI-99-19, 49 N.R.C. 441 (1999), the Atomic Energy Act does not require or authorize antitrust reviews of license transfer applications after initial licensing.

IX. RESTRICTED DATA AND CLASSIFIED NATIONAL SECURITY INFORMATION This Application for proposed transfer does not contain any Restricted Data or other Classified National Security Information and doesnot involve any change in access to such Restricted Data or Classified National Security Information.

Susquehanna Nuclear's existing restrictions on access to Restricted Data and Classified National Security Information are unaffected by the proposed transfer.

X. ENVIRONMENTAL CONSIDERATIONS Enclosure to PLA-7500 Page 17 of21 The requested consent to indirect transfer of control of the SSES licenses is exempt from environmental review because it falls within the categorical exclusion contained in 10 C.F.R. § 51.22(c)(21).

Moreover, the proposed transfer does not involve any amendment to the facility operating licenses or other change that would directly affect the actual operation of SSES in any substantive way. The proposed transfer does not involve an increase in the amounts, or a change in the types, of any radiological effluents that may be allowed to be released off-site, and involves no increase in the amounts or change in the types of non-radiological effluents that may be released off-site.

Further, there is no increase in the individual or cumulative operational radiation exposure. Therefore the proposed transfer has no environmental impact. XI. CONCLUSION Based upon the forgoing information, Susquehanna Nuclear respectfully requests that the NRC issue an Order consenting to the indirect transfer of control of the Facility Operating Licenses, Nos. NPF-14 and NPF-22, for its operating authority and 90% undivided ownership interests in SSES, and the general license for the SSES ISFSI. Susquehanna Nuclear requests that NRC's consent be provided as expeditiously as possible, and by no later than November 30, 2016. Susquehanna Nuclear requests that such consent be made immediately effective upon issuance and permit the indirect transfer of control at any time for one year following NRC approval.

Attachments:

Figure 1: Figure 2: Figure 3: Attachment 1: Attachment 2: Attachment 3P: Attachment 3NP: Attachment 4P: Attachment 4NP: Attachment 5: Attachment 6: Simplified Organization Chart -Current Enclosure to PLA-7500 Page 18 of21 Simplified Organization Chart -After Shareholder Transaction Closing Relationship Among Relevant Riverstone Entities Corporate Information Regarding Tal en (as expected upon closing of the Shareholder Transaction)

Corporate Information Regarding Riverstone Entities Projected Income Statement and Calculation of Six-Month Fixed Costs (Proprietary Version) Projected Income Statement and Calculation of Six-Month Fixed Costs (Redacted, Non-Proprietary Version) Capacity Factor Assumptions (Proprietary Version) Capacity Factor Assumptions (Redacted, Non-Proprietary Version) Decommissioning Funding Assurance Affidavit of Timothy S. Rausch (Request for Withholding)

Figure 1 Enclosure to PLA-7500 Page 19 of21 Simplified Organization Chart-Current Public Shareholders (Widely Held) 65% Talen Energy Corporation (DE Corp) Talen Energy Holdings, Inc. (DE Corp) Talen Energy Supply, LLC (DELLC) Talen Generation, LLC (DE LLC) Susquehanna Nuclear, LLC (DELLC) Rivers tone Shareholders (DE LLC(s)) 35%

Figure 2 Enclosure to PLA-7500 Page 20 of21 Simplified Organization Chart -After Transaction Closing Riverstone Shareholders (DE LLCs) 100% Talen Energy Corporation (DE Corp) Talen Energy Holdings, Inc. (DE Corp) Talen Energy Supply, LLC (DELLC) Talen Generation, LLC (DE LLC) Susquehanna Nuclear, LLC (DELLC)

Figure 3 Enclosure to PLA-7500 Page 21 of21 Relationship Among Relevant Riverstone Entities Ho l dings ll.C deiig:n.atei indi\i dua.ls that board membt:n of O R Energy

a.ffilia t ts under common contto l other-Equity Holders (see application footnote 2)

Attachment 1 to the Enclosure to PLA-7500 Corporate Information Regarding Talen Attachment 1 Attachment 1 to the Enclosure to PLA-7500 Page 1 of 1 Corporate Information Regarding Talen Name: State of Incorporation:

Business Address: Directors:

Principal Officers:

Talen Energy Corporation Delaware 835 Hamilton Street, Suite 150 Allentown, PA 18101-1179 Current: Ralph Alexander Frederick M. Bemthal Edward J. Casey, Jr. Philip G. Cox Paul A. Farr Louise K. Goeser Stuart E. Graham Michael B. Hoffinan After Closing: Not yet announced, but expected to all be U.S. citizens Paul A. Farr .........

President and Chief Executive Officer Jeremy R. McGuire .... Senior Vice President, Chief Financial Officer and Chief Accounting Officer Clarence J. Hopf, Jr. ... Senior Vice President and Chief Commercial Officer Timothy S. Rausch ..... Senior Vice President and Chief Nuclear Officer James E. Schinski ...... Senior Vice President and Chief Administrative Officer Paul M. Breme ........ Senior Vice President, General Counsel and Corporate Secretary Russell R. Clelland ..... Vice President and Treasurer All of the principal officers ofTalen Energy Corporation are U.S. citizens.

All of the directors of Talen Energy Corporation other than Mr. Cox are U.S. citizens.

Mr. Cox is a citizen of the United Kingdom. It is possible that certain directors and principal officers of Tal en will change at or following the closing of the Shareholder Transaction; however, the parties expect that any replacement directors or principal officers ofTalen will be U.S. citizens.

Attachment 2 to the Enclosure to PLA-7500 Corporate Information Regarding Riverstone Entities Attachment 2 Attachment 2 to the Enclosure to PLA-7500 Page 1 of5 Corporate Information Regarding Riverstone Entities Name RJS Merger Sub Inc. Place of Formation Delaware Principal Business Address c/o Extol Energy LLC 2901 Via Fortuna Drive, Building 6, Suite 650 Austin, Texas 78746-7574 Board of Directors Name Citizenship Michael Hoffman u.s. Carl Williams U.S. Name Raven Power Holdings, LLC Place of Formation Delaware Principal Business Address c/o Extol Energy LLC 2901 Via Fortuna Drive, Building 6, Suite 650 Austin, Texas 78746-7574 Board of Directors Name Citizenship Michael Hoffman U.S. Carl Williams U.S. Class B Members All are U.S. citizens.

Passive interests)

Name Riverstone V Raven Holdings, L.P. Place of Formation Delaware Principal Business Address c/o Riverstone Holdings LLC 712 Fifth Avenue, 36th Floor New York, New York 10019 Board of Directors There is no board of directors of this entity. It is controlled by its general partner, Riverstone Energy Partners V, L.P. Name Riverstone Energy Partners V, L.P. Place of Formation Delaware Principal Business Address c/o Riverstone Holdings LLC 712 Fifth Avenue, 36th Floor New York, New York 10019 Board of Directors There is no board of directors of this entity. It is controlled by its general partner, Riverstone Energy GP V, LLC.

Name Place of Formation Principal Business Address Managing Committee Name Place of Formation Principal Business Address Board of Directors Name Place of Formation Principal Business Address Board of Directors Class B Members (Passive interests)

Riverstone Energy GP V, LLC Delaware c/o Riverstone Holdings LLC 712 Fifth Avenue, 36th Floor New York, New York 10019 Name Pierre F. Lapeyre, Jr. David M. Leuschen James T. Hackett Michael B. Hoffman N. John Lancaster, Jr. Andrew W. Ward Mark G. Papa Rotating: E. Bartow Jones Baran Tekkora Robert M. Tichio Riverstone Energy GP V Corp. Delaware c/o Riverstone Holdings LLC 712 Fifth Avenue, 36th Floor New York, New York 10019 Name Pierre F. Lapeyre, Jr. David M. Leuschen Thomas J. Walker C/R Energy Jade, LLC Delaware c/o Extol Energy LLC u.s. U.S. u.s. u.s. U.S. u.s. u.s. u.s. U.S. u.s. u.s. u.s. u.s. Attachment 2 to the Enclosure to PLA-7500 Page 2 of5 Citizenship Citizenship 2901 Via Fortuna Drive, Building 6, Suite 650 Austin, Texas 78746-7574 Name Citizenship Michael Hoffman u.s. Carl Williams U.S. All are U.S. citizens.

Name Place of Formation Principal Business Address Board of Directors Name Place of Formation Principal Business Address Board of Directors Name Place of Formation Principal Business Address Managing Committee Attachment 2 to the Enclosure to PLA-7500 Page 3 of5 Carlyle/Riverstone Global Energy and Power Fund III, L.P. Delaware c/o Riverstone Holdings LLC 712 Fifth Avenue , 36th Floor New York, New York 10019 There is no board of directors of this entity. It is controlled by its general partner, Carlyle/Riverstone Energy Partners III, L.P. Carlyle/Riverstone Energy Partners III, L.P. Delaware c/o Riverstone Holdings LLC 712 Fifth Avenue, 36th Floor New York, New York 10019 There is no board of directors of this entity. It is controlled by its general partner, C/R Energy GP III , LLC. C/R Energy GP III, LLC* Delaware c/o Riverstone Holdings LLC 712 Fifth Avenue, 36th Floor New York, New York 10019 Name Citizenship Pierre F. Lapeyre, Jr. U.S. David M. Leuschen U.S. William E. Conway, Jr. U.S. Daniel D' Aniello U.S. David M. Rubenstein U.S. Edward Mathias u.s. Michael B. Hoffman U.S. 1. *Riverstone Holdings LLC, Riverstone Investment Group LLC , TC Group Cayman Investment Holding, L.P., and TC Group-Energy LLC own all of the membership interests o C/R Energy GP III, LLC. TC Group Cayman Investment Holding, L.P. and TC Group-Energy LLC are affiliates of The Carlyle Group L.P. that hold investment interests in this entity. By unanimous written consent of the Managing Committee of C/R Energy GP III, LLC, the authority to appoint all of the directors of Jade Holdings is delegated to the managers appointed by Riverstone.

The Carlyle affiliates do not control Jade Holdings.

Name Place of Formation Principal Business Address Board of Directors Name Place of Formation Principal Business Address Board of Directors Class B Members (Passive interests)

Name Place of Formation Principal Business Address Board of Directors Riverstone Investment Group, LLC Delaware c/o Riverstone Holdings LLC 712 Fifth Avenue, 36th Floor New York, New York 10019 Name Pierre F. Lapeyre, Jr. U.S. David M. Leuschen u.s. Sapphire Power Holdings, LLC Delaware c/o Extol Energy LLC Attachment 2 to the Enclosure to PLA-7500 Page 4 of5 Citizenship 2901 Via Fortuna Drive, Building 6, Suite 650 Austin, Texas 78746-7574 Name Citizenship Michael Hoffman U.S. Carl Williams u.s. All are U.S. citizens.

RIC Sapphire Power IP, L.P. Delaware c/o Riverstone Holdings LLC 712 Fifth Avenue, 36th Floor New York, New York 10019 There is no board of directors of this entity. It is controlled by its general partner, Riverstone/Carlyle Renewable Energy Partners II, L.P.

Name Place of Formation Principal Business Address Board of Directors Name Place of Formation Principal Business Address Board of Directors Name Place of Formation Principal Business Address Board of Managers Name Place of Formation Principal Business Address Class A Members (Own 100% Voting Control) Class B Members (Passive interests conveying only limited consent rights) Attachment 2 to the Enclosure to PLA-7500 Page 5 of5 Riverstone

/Carlyle Renewable and Alternative Energy Fund II-C, L.P. Delaware c/o Riverstone Holdings LLC 712 Fifth Avenue, 36th Floor New York, New York 10019 There is no board of directors of this entity. It is controlled by its general partner , Riverstone/Carlyle Renewable Energy Partners II , L.P. (Riverstone/Carlyle Renewable and Alternative Energy Fund II-C, L.P. owns approximately 92% of RIC Sapphire Power IP, L.P., but does not control RIC Sapphire Power IP, L.P.) Riverstone/Carlyle Renewable Energy Partners II, L.P. Delaware c/o Riverstone Holdings LLC 712 Fifth Avenue, 36th Floor New York, New York 10019 There is no board of directors of this entity. It is controlled by its general partner, RIC Renewable Energy GP II, LLC. RIC Renewable Energy GP II, LLC Delaware c/o Riverstone Holdings LLC 712 Fifth Avenue, 36th Floor New York, New York 10019 Name Citizenship Pierre F. Lap eyre, Jr. u.s. David M. Leuschen U.S. Ralph Alexander U.S. Daniel D 'Aniello u.s. Edward Mathias U.S. Michael B. Hoffman U.S. Riverstone Holdings, LLC Delaware 712 Fifth Avenue, 36t 11 Floor New York, New York 10019 Name Citizenship Pierre F. Lapeyre, Jr. U.S. David M. Leuschen u.s. All are U.S. citizens