ML17158A391
| ML17158A391 | |
| Person / Time | |
|---|---|
| Site: | Susquehanna  |
| Issue date: | 07/05/1994 |
| From: | Poslusny C Office of Nuclear Reactor Regulation |
| To: | Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 9407110224 | |
| Download: ML17158A391 (19) | |
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Docket Nos.
50-387 and 50-388 UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 2055&%$ 1 July 5, 1994 LICENSEE:
Pennsylvania Power and Light Company (PP8L)
FACILITY:
Susquehanna Steam Electric Station, Units 1
and 2
SUBJECT:
MEETING
SUMMARY
OF JUNE 16, 1994 On June 16,
- 1994, a meeting was held between the NRC and Pennsylvania Power Light Company (PP&L) staff to discuss plans to implement a financial restructuring which would involve the establishment of a new holding company.
The new company would be called Pennsylvania Power 8 Light Resources, Inc.,
and would include both regulated nuclear power and non-regulated energy-related activities.
Enclosure 1 is a list of the staff who attended the meeting and Enclosure
- 2. is the handout provided by PP&L which served as the basis for the discussions.
PP&L provided a presentation that dealt with the background and objectives of the restructuring, the process to be followed to establish the new organization, and the expected results and advantages to be realized.
Specifically; it was indicated that PP&L is currently facing more and more competition in the market place.and has deterIIIjned that it needs to expand its organization to include new activities in the generation, transmission, and distribution. of electric energy and needs to expand into additional geographical, locations to improve its relative market position and share.
In order to make these
- changes, the organization needs more financial and regulatory flexibilitywhich can be provided by establishing a holding company which will oversee both regulated and non-regulated energy-related activities.
The holding company, PP&L Resources, Inc., will include a structure which will clearly separate the management and resources of the regulated nuclear power generation of PP8L from new non-regulated activities conducted under the Power Markets Development Company.
Such an arrangement will provide the flexibility of entering new and profitable markets such as the generation and distribution of fossil power in developing countries abroad while protecting PP&L utility ratepayers from potential adverse consequences of any of the unregulated activities of the holding company.
The new unregulated portion of the organization will provide a means to enter, exit, and modify the operation of the new ventures rapidly and effectively in response to rapidly changing business conditions.
The creation of the new company was explained as being implemented by establishing a "share exchange" whereby each share of PP8L common stock will be converted automatically to a share of the new holding company common stock.
The holding company will then own 100X of the PP&L common stock and the net tax effects for PP8L and shareholders will be nil.
This ownership change will be discussed at the 1995 Annual shareholders meeting and approval will be sought at that time.
In addition, regulatory approvals of the change are and will be sought as well.
Requests for approval have been filed with t e
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Pennsylvania Public Utility Commission and the Security and Exchange Commission.
In addition, a package is being prepared for the Federal Energy Regulatory Commission, and a request for approval by the NRC is expected to be sent in within a few weeks.
The staff stated that it understood that from a regulatory standpoint, the proposed changes will have minimal effect on the plant licenses, as there will be no change to either because PP&L still will remain the licensee of record and will retain the full responsibility for,the safe operation of the plants.
The Commission would require that the nuclear operations be insulated from any financial or other problems that might occur in the non-regulated side of the company and there appears to be sufficient organizational separation to ensure that this will be the case.
Resources for decommissioning should not be affected by any change and that will also be the case.
The staff did recommend that if any assets are to be transferred from the nuclear to non-nuclear organization that the NRC should be notified.
PP&L agreed to include this commitment in the upcoming submittal.
The proposed contents of the submittal to NRC were discussed and no potential problems were expected with the staff's review of it, based on the fact that the NRC has already approved similar restructuring for other licensees.
The staff indicated that it would determine if there is a requirement to issue a
Federal
~Re ister notice after the proposed change was received and agreed to provide additional guidance to PP&L if additional information would be needed in the package to support the'oticing.
/S/
Chester, Poslusny, Jr.,
Sr. Project Manager Project Directorate I-2 Division of Reactor Projects - I/II Office of Nuclear.,Reactor Regulation
Enclosures:
1.
List of Attendees 2.
Meeting Handout cc w/enclosures:
See next page DISTRIBUTION w enclosure 1:
~ Docket File*
NRC
& Local PDRs*
PDI-2 Reading*
WRussell/FHiraglia LReyes SVarga JCalvo CHiller CPoslusny*
HO'Brien OGC
(" = w/enclosures 1
& 2)
EJordan RWood EDO R-I, 17G21 EWenzinger, RGN-I*
- JWhite, RGN-I*
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Pennsylvania Public Utility Commission and the Security and Exchange Commission.
In addition, a package is being prepared for the Federal Energy Regulatory Commission, and a request for approval by the NRC is expected to be sent in within a few weeks.
The staff stated that it understood that from a regulatory standpoint, the proposed changes will have minimal effect on the plant licenses, as there will be no change to either because PP&L still will remain the licensee of record and will retain the full responsibility for the safe operation of the plants.
The Commission would require that the nuclear operations be insulated from any financial or other problems that might occur in the non-regulated side of the company and there appears to be sufficient organizational separation to ensure that this will be the case.
Resources for decommissioning should not be affected by any change and that will also be the case.
The staff did recommend that if any assets are to be transferred from the nuclear to non-nuclear organization that the NRC should be notified.
PPKL agreed to include this commitment in the upcoming submittal.
The proposed contents of the submittal to NRC were discussed and no potential problems were expected with the staff's review of it, based on the fact that the NRC has already approved similar restructuring for other licensees.
The staff indicated that it would determine if there is a requirement to issue a
Federal
~Re ister notice after the proposed change was received and agreed to provide additional guidance to PPKL if additional information would be needed in the package to support the noticing.
Enclosures:
1.
List of Attendees 2.
Meeting Handout cc w/enclosures:
See next page Chester Poslnsny, Jr., Sr. Project Ranager Project Directorate I-2 Division of Reactor Projects - I/II Office of Nuclear Reactor Regulation
~,
Pennsylvania Power
& Light Company Susquehanna Steam Electric Station, Units 1
& 2 CC:
Jay Silberg, Esq.
- Shaw, Pittman, Potts
& Trowbridge 2300 N Street N.W.
Washington, D.C.
20037 Bryan A. Snapp, Esq.
Assistant Corporate Counsel Pennsylvania Power
& Light Company 2 North Ninth Street Allentown, Pennsylvania 18101 Mr. J.
M. Kenny Licensing Group Supervisor Pennsylvania Power
& Light Company 2 North Ninth Street Allentown, Pennsylvania 18101 Mr. Scott Barber Senior Resident Inspector U. S; Nuclear Regulatory Commission P.O.
Box 35 Berwick, Pennsylvania 18603-0035 Mr. William P. Dornsife, Director Bureau of Radiation Protection Pennsylvania Department of Environmental Resources P. 0.
Box 8469 Harrisburg, Pennsylvania 17105-8469 Mr. Jesse C. Tilton, III Allegheny Elec. Cooperative, Inc.
212 Locust Street P.O.
Box 1266 Harrisburg, Pennsylvania 17108-1266 Regional Administrator, Region I U.S. Nuclear Regulatory Commission 475 Allendale Road King of Prussia, Pennsylvania 19406 Mr. Harold G. Stanley Superintendent of Plant Susquehanna Steam Electric Station Pennsylvania Power and Light Company Box 467 Berwick, Pennsylvania 18603 Mr. Herbert D. Woodeshick Special Office of the President Pennsylvania Power and Light Company Rural Route 1,
Box 1797 Berwick, Pennsylvania 18603 George T. Jones Manager-Engineering Pennsylvania Power and Light Company 2 North Ninth Street Allentown, Pennsylvania 18101 Mr. Robert G.
Byram Senior Vice President-Nuclear Pennsylvania Power
& Light Company 2 North Ninth Street Allentown, Pennsylvania 18101
I
ENCLOSURE 1
June 16, 1994 MEETING WITH PPKL RE:
FINANCIAL RESTRUCTURING Chet Poslusny Jay Silberg Bryan Snapp John Biggar R.G.
Byram Sherwin Turk Bob Wood Charles Miller J.M. Kenny
\\
Jose Calvo ORGANIZATION NRR/PDI-2
- Shaw, Pittman L Potts PPS.L PPKL PPKL NRC/OGC NRC/NRR NRC/NRR PP&L/Licensing NRR/ADRI MS PHONE ¹ (301) 504-1132 (202) 663-8063 (610) 774-4397 (610) 774-5613 (610) 774-7502 (301) 504-1575 (301) 504-1255 (301) 504-1430 (610) 774-7904 (301) 504-1404
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HOLDING COMPANY STRUCTURE FOR'ENNSYLVANIA POWER 8 LIGHTCOMPANY June 1994 rnn IC)
C/l
BACKGROUND INFORMATION
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increased competition in the electric utilityindustry Public UtilityRegulatory Policies Actof 1978 Energy Policy Actof 1992
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PP&L is resporiding to increased competition in existing markets
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Must be positioned to pursue opportunitieq outside central eastern Pennsylvania:
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Focus on opportunities relating to PP&L's core business Generation, transmission and distribution of electric energy Geographic, not product, diversification
CORPORATE STRUCTURE OBJECTIYES
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Maintain a clear separation between regulated and unregulated businesses
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Protect ratepayers from possible adverse consequences of unregulated business activities
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Provide required financing flexibilityand capabilities
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Permit rapid and effective responses to changing -business conditions
CURRENT CORPORATE STRUCTURE Pennsylvania Power & Light Company (HR&D,Financial, Nuclear, SP&E, Division Operations)
PP&L Resources Inc.
Pennsylvania Coal Resources Corporation Interstate Enerlly Company Realty Company of Pennsylvania CEP Group inc.
Safe Harbor Water Power Corporation Pennsylvania Mines Corporation Greene Hill Coal Company Power Markets Development Company Rushton Mining Company Greene Manor Coal Company Lady Jane CoQienea, Inc.
CORPORATE ACTIONS REQUIRED TO CREATE A HOLDING COlNPANYSTRUCTURE
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Holding company structure created by a "share exchange" Each share of PP&L common stock automatically becomes a share of Holding Company common stock Holding Company owns 100% of the common stock of PP&L Share exchange results in a tax-free transaction for PP&L and its sh are owners Holding Company common stock to be listed on the NYSE and PSE
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Shareowner approval To be sought at the 1995 Annual Meeting
REGULATORYAPPROVALS
~ Pennsylvania Public UtilityCommission
~ Securities and Exchange Commission
~ Federal Energy Regulatory Commission
~ Nuclear Regulatory Commission
HOLDING COMPANYSTRUCTURE PP&L Resources, lnc.
Power Markets Development Company CEP Group, lno.
Pennsylvania Power 8 Light Company (HR&D,Financial, Nuclear, SP&E, Division Operations)
Pennsylvania Coal Resouroes Corporation Interstate Energy Company Realty Company of Pennsylvania Sate Harbor Water Power Corporation Pennsylvania
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Minos Corporation Rushton Mlnlng Company Greene HII Coal Ccmpeny Greene Manor Coal~y
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EVEN WITH THE CREATION OF THE HOLDING COMPANYSTRUCTURE CERTAIN THINGS DO NOT CHANGE
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Preferred stock and first mortgage bonds of PP&L will remain PP&L obligations
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Susquehanna Steam Electric Station willcontinue to be owned and operated by PP&L
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PP&L Board of Directors willserve as the Board of Directors of both PP&L and the Holding Company Nuclear Oversight Committee of PP&L Board will continue as a
committee ofthe PP8L Board
HOLDING COMPANYSTRUCTURE PROVIDES FINANCING FLEXIBILITY
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Financing for PP&L First Mortgage Bonds Unsecured Debt Preferred and Preference Stock
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Financing for the Holding Company Unsecured Debt Preferred Stock
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Common Equity
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THE PROPOSED HOLDING COMPANYSTRUCTURE IS NOT UNIQUE TO PP&L Atlantic Energy, Inc.
GIPSCO Incorporated Dominion Resources, Inc.
DQE Inc.
FPL Group, Inc.
Houston Industries, lnc.
lllinova IPALGO Enterprises, Inc.
LG&E Energy Corp.
NIPSGO Industries, lnc.
Portland General Corporation Public Service Enterprise Group, lnc.
SCEcorp Unicorn Wisconsin Energy. Corporation CILGORP, Inc.
GMS Energy Corporation DPL, Inc.
Florida Progress Corporation Hawaii Electric Industries, Inc.
IES Industries, lnc.
KU Energy Corporation Midwest Resources, Inc.
Pinnacle West Capital Corporation PSI Resources, Inc.
SGANA Corporation Sierra Pacific Resouces TECO Energy, lnc.
WPL Holdings, Inc.