L-16-271, Supplemental Information Regarding Pending Application for Order Consenting to Transfer of Licenses and Approving Conforming License Amendments
| ML16257A235 | |
| Person / Time | |
|---|---|
| Site: | Beaver Valley |
| Issue date: | 09/13/2016 |
| From: | Belcher S FirstEnergy Nuclear Operating Co |
| To: | Document Control Desk, Office of Nuclear Reactor Regulation |
| References | |
| L-16-271 | |
| Download: ML16257A235 (2) | |
Text
FENOC F i$riwpy Nvc retepo"rg Corp-341 White Pond Drive Akron, Ohio 44320 Samael L. Belcher President & Chief Nuclear Officer September 13, 2016 L-16-271 330-436-r 393 10 cFR 50.80 10 cFR 50.90 ATTN: Document Control Desk U. S. Nuclear Regulatory Commission Washington, DC 20555-0001
SUBJECT:
Beaver Valley Power Station, Unit No. 2 Docket No. 50-412, License No. NPF-73 Supplemental Information Reqardino Pendino Application for Order Consenting to Transfer of Licenses and Approvinq Conformino License Amendments By letter dated June 24,2016 (ADAMS Accession No. ML16182A155),
FirstEnergy Nuclear Operating Company (FENOC) acting as agent for and on behalf of FirstEnergy Nuclear Generation, LLC (FENGen),
The Toledo Edison Company (TE), and the Ohio Edison Company (OE), submitted an application to the Nuclear Regulatory Commission (NRC) requesting consent to the transfer of the leased interests in Beaver Valley Power Station, Unit No. 2 (BVPS 2) and approval of an administrative amendment to conform the license to reflect the proposed transfer (Application).
FENOC requested an order consenting to the transfer of TE's 18.26 percent interest in BVPS 2to FENGen, and the transfer of OE's 21.66 percent interest in BVPS 2 to FENGen.
In the Application's discussion on the financial qualifications of FENGen, the Application refers to FENGen's parent company, FirstEnergy Solutions Corp (FES), and states, as follows:
FES currently has investment grade ratings of Baa3 issued by Moody's and of BBB-by Standard & Poor's for its senior unsecured debt (refer to Form 10-K, page 76). Notably, under NRC's Standard Review Plan (Section 111.1
. b ), an applicant that maintains an investment grade credit rating from at least two credible rating agencies is presumed to meet the financial qualifications test. Thus, these ratings support FES' financial capability to meet its obligations under both the power supply agreement and the $400 million financial support agreement.
Beaver Valley Power Station, Unit No. 2 L-16-271 Page 2 On July 29,2016, Moody's Investor Service downgraded its rating of the senior unsecured debt of FES to Ba2. On August 1,20'16, Standard and Poors downgraded its rating of the senior unsecured debt of FES to BB-. Therefore, the statement made in the Application regarding FES' credit rating is no longer
- accurate, and FES no longer falls within the rebuttable presumption established in the guidance provided in NUREG-1577, Revision l, "Standard Review Plan on Power Reactor Licensee Financial Qualifications and Decommissioning Funding Assurance."
The Application also stated that FES and Allegheny Energy Supply Company, LLC (AES) had a $1.5 billion credit facility, with FES having a $1.5 billion borrower subf imit and AES having a $1 billion borrower sublimit. On September 6,2016, the FES sublimit was reduced to $900 million and the AES sublimit was reduced to
$600 million. These reductions are intended to facilitate the allocation of commitment fees on the unused portion of each borrower's sublimit in the case of split ratings between FES and AES. The commitments under the credit facility remain unchanged at $1.5 billion in the aggregate.
Nevertheless, as discussed in the Application, FES continues to have substantial
- revenue, exceeding
$S billion and a net equity of more than $3.6 billion as of December 31,2015. Therefore, FES continues to have ample capability to meet its obligations under both the power supply agreement and the $400 million financial support agreement.
There are no regulatory commitments contained in this letter. lf there are any questions, or if additional information is required, please contact Mr. Thomas A. Lentz, Manager
- Fleet Licensing, at 330-315-6810.
I declare under penalty of perjury that the foregoing is true and correct. Executed on September 19,2016.
Sincerely, Samuel L. Belcher NRC Region I Administrator NRC Resident Inspector NRR Project Manager Director BRP/DEP Site BRP/DEP Representative