ML18057A883
| ML18057A883 | |
| Person / Time | |
|---|---|
| Site: | Palisades  |
| Issue date: | 04/30/1991 |
| From: | Brian Holian Office of Nuclear Reactor Regulation |
| To: | Slade G CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.) |
| References | |
| TAC-72245, NUDOCS 9105090271 | |
| Download: ML18057A883 (6) | |
Text
UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D. C. 20555 Docket 50-255 Mr. Gerald B. Slade Plant General Manager Consumers Power Company Palisades Plant 27780 Blue Star Memorial Highway Covert, Michigan 49043 Dear Mr. Slade April 30, 1991
SUBJECT:
TRANSFER OF PALISADES PLANT OWNERSHIP (TAC NO. 72245)
Consumers Power Company (CPCo) letter dated February 27, 1989, requested that Operating License OPR-20 be amended to reflect the transfer of ownership of the Palisades Plant from CPCo to a newly-formed Michigan Corporation, Palisades Generating Company (PGC).
CPCo letters dated April 6, 1989, and May 24, 1990, submitted corrections and revisions to the February 27, 1989, license change request.
CPCo proposes to transfer its ownership of the Palisades Plant to PGC in order to settle certain claims (relating to'the cancelled Midland Nuclear Power Plant), improve plant reliability, and benefit its customers and shareholders.
CPCo will continue to operate the Palisades Plant as a contractor to PGC.
Any change of 11 operator 11 of the Palisades Plant would need to be reviewed and approved by the NRC staff prior to implementation.
The license amendment request included a discussion of the proposed change highlighting the financial qualifications of the new corporation. Also included for NRC staff review were draft Asset and Power Purchase Agreements.
Under the equity terms of the Asset Purchase Agreement, PGC 1 s capital stock will be distributed as follows:
4/9 will be allocated to CPCo, 3/9 to Bechtel, and
- 2/9 to Westinghouse.
PGC, as owner of the Palisades Plant, will sell the electrical output of the plant to CPCo under a Power Purchase Agreement.
Under the terms of the Power Purchase Agreement, which is subject to Federal Energy Regulatory Commission (FERC) jurisdiction and approval, 100% of capacity will be dedicated to CPCo through December 31, 2006.
Consumers Power Company will continue to operate the Palisades Plant under the provisions of an Operating Agreement that will become effective upon closure of the transfer of ownership.
CPCo will be required to continue to operate and maintain the plant in accordance with regulations and prudent utility practice.
... The Operating Agreement delineates CPCo responsibilities in numerous areas including: handling and storing spent fuel; procuring supplies and materials; hiring, training, and supervising plant personnel; and decommissioning the plant. Additionally, the Operating Agreement does not restrain CPCo from taking such actions as are necessary and appropriate-Tor the safe operation of the Palisades Plant.
The NRC staff has reviewed the license applications submitted by CPCo in support of the transfer of plant ownership. Additionally, the staff requested additional information and clarification of shareholder financial liabilities by letters dated February 27, and July 25, 1990.
CPCo's response to these questions satisfied the NRC staff concerns that sufficient financial commitments are included in the PGC agreements to provide for safe operation, shutdown, and eventual decommissioning of the Palisades Plant.
Due to the volume and complexity of the agreements associated with the transfer of the Palisades Plant ownership, and to further delineate responsibilities*between the two licensees (CPCo and PGC), the NRC staff proposes that the following four license conditions be incorporated in the Palisades License:
CPCo shall maintain the facility in a safe and stable condition during operation and shutdown.
The onsite property damage insurance and/or equivalent protection required by 10 CFR 50.54(w) shall be maintained by either or both of the licensees.
The liability insurance and/or equivalent financial protection required by Section 170 of the Act and 10 CFR Part 140 shall be maintained by either or both of the licensees.
The licensees shall provide the financial assurance for decommissioning required by 10 CFR 50.75.
The NRC staff has determined that the transfer of the Palisades Plant ownership is acceptable. This approval is conditional on the following items:
0 0
0 0
CPCo must accept the above license conditions.
CPCo must obtain approval of the Power Purchase Agreement from FERC prior to issuance of the license amendment.
Otherwise, a full review of PGC's financial qualifications must be completed by the NRC staff under 10 CFR 50.33(f).
Changes to the license application that may result from the State or Federal Regulatory Hearings must be submitted to the staff for approval prior to the license amendment being issued.
The NRC staff must issue the safety evaluation associated with the license amendment request.
Should you have any questions concerning these proposed license conditions, or any aspect of this conditional approval of the transfer of the Palisades license, please contact me.
cc:
See next page Sincerely, Brian Holian, Project Manager Project Directorate III-1 Division of Reactor Projects III/IV/V Office of Nuclear Reactor Regulation
.. Should you have any questions concerning these proposed license conditions, or any aspect of this conditional approval of the transfer of the Palisades license, please contact me.
cc:
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-'l Mr. Gerald B. Slade Consumers Power Company cc:
M. I. Miller, Esquire Sidley & Austin 54th Floor One First National Plaza Chicago, Illinois 60603 Mr. Thomas A. McNish, Secretary Consumers Power Company 212 West Michigan Avenue Jackson, Michigan 49201 Judd L. Bacon, Esquire Consumers Power Company 212 West Michigan Avenue Jackson, Michigan 49201 Regional Administrator, Region III U.S. Nuclear Regulatory Commission 799 Roosevelt Road Glen Ellyn, Illinois 60137 Jerry Sarno~
Township Supervisor Covert Township 36197 M-140 Highway Covert, Michigan 49043 Office of the Governor Room 1 - Capitol Building Lansing, Michigan 48913 Mr. Patrick M. Donnelly Director, Safety and Licensing Palisades Plant 27780 Blue Star Memorial Hwy.
Covert, Michigan 49043 Resident Inspector c/o U.S. Nuclear Regulatory Commission Palisades Plant 27782 Blue Star Memorial Hwy.
Covert, Michigan 49043 Palisades Plant Nuclear Facilities and Environmental Monitoring Section Office Division of Radiological Health P.O. Box 30035 Lansing, Michigan 48909 Gerald Charnoff, P.C.
Shaw, Pittman, Potts &
Trowbridge 2300 N. Street, N.W.
Washington, D.C.
20037 Mr. David L. Brannen Vice President Palisades Generating Company c/o Bechtel Power Corporation 15740 Shady Grove Road Gaithersburg, Maryland 20877 Roy W. Jones Manager, Strategic Program Development Westinghouse Electric Corporation 4350 Northern Pike Monroeville, Pennsylvania 15146
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- e Should you have any questions concerning these proposed license conditions, or any aspect of this conditional approval of the transfer of the Palisades license, please contact me.
cc:
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4l'UJ9l Sincerely, Isl Brian Holian, Project Manager Project Directorate III-1 Division of Reactor Projects IIIIIVIV Office of Nuclear Reactor Regulation DIPD31:DRP345 LMARSH 4130191