ML18142B166
| ML18142B166 | |
| Person / Time | |
|---|---|
| Site: | Ginna  |
| Issue date: | 06/30/1977 |
| From: | Kennedy J Rochester Gas & Electric Corp |
| To: | Saltzman J Office of Nuclear Reactor Regulation |
| References | |
| Download: ML18142B166 (8) | |
Text
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ROCHESTER GAS AND ELECTRIC CORPORATION
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EAST AVENUE, ROCHESTER, N.Y. 't8649 JOHN L.
KENNEDY V I CK PRES I DEIIT June 30, 1977 TCI.CPHONE AREA COOK Tld 546.2700 Mr. Jerome
- Saltzman, Chief Antitrust f> Indemnity Group Nuclear Reactor Regulation Nuclear Regulatory Commission Washington, D.C.
20555 Re:
Docket No.
50-244
Dear Mr. Saltzman:
As requested by your letter of June 15, 1977, this is to advise that Rochester Gas and Electric Corporation plans to guarantee retrospective premiums by furnishing annual certified financial statements, etc.
(Alternative Method No. 5).
Our preferred filing date for future submissions would be March 21 since that is the date of our Indemnity Agreement No. B-38.
It would be our proposal to submit at that time (1) a certified financial statement for the prior calendar
- year, (2) a'inancial statement for the last quarter of the preceding'alendar
- year, and (3) a one-year internal cash flow projection for the current calendar year.
It will be obvious to you that these time frames will dovetail with our normal accounting and forecasting periods, including certification by our Independent Accountants which normally occurs on or about March '1.
As concerns Item (4),
we believe that it should not be necessary to curtail any capital expenditures'owever, if future circumstances were such as to impact capital expenditures, the probability would be that we would delay upgrading distri-bution facilities which would not have an immediate impact on our service standards.
As concerns the first submission due on August 1, 1977, we would propose to file (1) a certified financial statement for 1976, (2) a financial statement for the first'uarter of
- 1977, and (3) an internal cash flow projection for 1977.
If the above is not satisfactory, I would appreciate your contacting me at 716-546-2700, Hxt. 2500.
Sincerely, JLK:tb John L. Kennedy Vice President
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UNITEDSTATES LEAR REGULATORY COMMISSION WASHINGTON, D. C. 20555 June 15, 1977 Docket No. 50-244 Rochester Gas and Electric Corporation ATTN:
Mr. J.
L. Kennedy Vice President 89 East Avenue Rochester, New York 14604
'Gentlemen:
The Commission is completing the implementation of certain provisions of the 1975 amendments to the Price-Anderson Act (Public Law 94-197),
so that the new retrospective premium system can become effective on August 1, 1977.
The Commission published in the Federal Re ister on January 3,
1977 (42 F.R.
- 46) its intention to establish certain requirements relating to guaranteeing retrospective premiums to assure that following a nuclear incident deferred retrospective premiums will be paid by licensees and that government funds will not have to be used to cover defaults in such'ayments.
These guarantee requirements may be met by providing any one or a combination of alternative methods in the amount of $ 10 million for each large power reactor a licensee operates.
These alternatives would be:
1.
Surety bonds; 2.
Letters of credit; 3.
Revolving credit/term loan arrangements; 4.
Maintenance of escrow deposits 'of government securities; 5.
Annual certified financial statements and cash flow projections showing either that a cash flow (i,e., cash available to a company after all operating
- expenses, taxes, interest charges and dividends have been paid) can be generated and would be available for payment of retrospective premiums within three (3) months after submission of the statement, or a cash reserve or a combination of cash flow and cash reserve, and 6.
Such other type of guarantee approved by the Commission.
The purpose of this letter is to learn from you the type of guarantee that you intend to provide as well as to provide some guidance concerning Alternative 5 of the guarantees (a showing of adequate cash flow).
In
me 4
order to allow us to analyze the adequacy of the showing of cash flow, we should be provided with the following:
(1)
An annual certified financial statement for the most recent reported year preceding the submission date; (2) a quarterly financial statement for the last quarter preceding the submission date; (3) a one year internal cash flow projection accompanied by underlying assumptions showing that cash flow (i.e.,
cash available to a company after all operating
- expenses, taxes, interest charges, and dividends have been paid) for
$ 10 million can be generated and would be available for payment of retrospective premiums within three months after submission of the statement; (4) a narrative statement indicating which capital. expenditures (if any) would be curtailed to ensure that retrospective premiums up to $10 million would be available for payment.
The cash flow projection should be for a one year period preferably beginning either at the anniversary date or if unduly burdensome at the calendar year starting closest to the anniversary date.,
This projection should include a detailed breakdown of expected cash sources, e.g.,
retained earnings, depreciation, deferred taxes, etc.,
and should be certified by an official of the company.
All utilities will be required to provide their first submission of guarantees by August 1, 1977.
Annual submissions thereafter should be on the anniversary date of any of the utility's indemnity agreements.
Utilities may request another date for their annual submittals.
If more than one statement is provided in those cases where there are multiple licensees, all such statements should utilize the same submittal date.
As provided for in the regulations, the Commission will impose a single
$1,000 minimum indemnity fee per year upon any licensee submitting in that year a certified financial statement as the guarantee of payment of deferred premiums for its operating reactors.
If more than one statement is provided in those cases where there are multiple licensees, then a
$1,000 minimum annual indemnity fee will be imposed on each licensee submitting a statement.
He would expect, however, that in cases where there are numerous licensees, some with small percentages of ownership, that only the principal owner(s) will submit this information for the entire
$10 million guarantee.
%04 I
We would appreciate your indicating to us by July 1, 1977 the type of guarantee that you intend to provide us with on August 1, 1977 and what your preferred anniversary date for future submittals would be, Please provide the contents of this letter to your co-licensees (if any).
If you have any questions concerning this letter or any other matter, you may contact Ira Dinitz, Indemnity Specialist on 301-443-6961.
Sincerely, g~~@
Jg~~g p Sattzttl8tl Jerome
- Saltzman, Chief Antitrust 8 Indemnity Group Nuclear Reactor Regulation