ML19250E557
| ML19250E557 | |
| Person / Time | |
|---|---|
| Issue date: | 03/16/1981 |
| From: | NRC COMMISSION (OCM) |
| To: | |
| Shared Package | |
| ML19240A177 | List: |
| References | |
| REF-10CFR9.7 SECY-81-168, NUDOCS 8103260460 | |
| Download: ML19250E557 (4) | |
Text
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ENCLOSURE 3 V ALUE/ IMP ACT ANALYSIS 0
PROPOSED RULE CHANGE - FINANCI AL QUALIFICATIONS 10 CFR 50.33(f); 50.54(v); Appendix C,10 CFR Part 50 A.
NEED FOR THE CHANGE The NRC staff has completed a comprehensive study of the financial qualifications requirements that apply to Part 50 applicants and licensees.
The staff has examined and more clearly defined the re-lationship between financial qualifications and safety. As a result, the staff has_ concludod that the scope of the financial qualifications review is excessive for a significant portion of NRC's electric utility applicants.
Accoroingly, the proposed rule would establish criteria that, if satisfied by a utility applicant, would demonstrate conclu-sive evidence of financial qualifications.
An applicant that demon-strates such conclusive evidence would not be subject to a more ex-tensive financial qualifications review as at present.
B.
VALUE/ IMPACT ON APPLICANTS, LICENSEES AND NRC Electric utilities would be the only type of applicant to be significantly impacted (by the. reduction of financial qualification requirements) under the rule change because rate-setting authority would be a criterion of conclusive evidence for both construction permits and operating l' censes.
The level of reduced impact will be determined specifically by utilities' financial condition as evidenced by their bond ratings. The staff estimates that under current economic and financial conditions that the majority of current Part 50 utility applicants and licensees would satisfy criteria that constitute conclusive evidence of financial qualifications.
The level
.' of effort and amount of information to be supplied by a utility applicant that meets the specifieu criteria would be significantly reduced from the present requirement. The level of staff effort would be correspondingly reduced.
Adverse economic developments affecting the financial condition of the utility industry could result in fewer applicants and licensees satisfying the criteria and an increased scope of effort for those applicants, licensees and the staff.
Improved economic and financial conditions could have the opposite effect.
The degree of change in effort by applicants, licensees and the staff would deper.d oc the significance or severity of the economic and financial developments and the corresponding effects on bond ratings.
Since the current financial qualifications requirements are considered to be the most stringent requirements that are rational, it is anticipated that the level of effort for an applicant or licensee would never exceed the current level, even under significant adverse economic conditions.
The staff's overall level of effort during any one period will be d'ter-mined in large part by the financial ccndition of individual applicants and licensees and the extent to which they demonstrate conclusive evidence of financial qualifications. The proposed changes are expected, however, to result in a significantly reduced level of staff effort.
It is noted that under both the existing and proposed rules, that the staff monitors the finanical condition of NRC licensees.
The staff's sources of information include annual financial reports filed by holders of construction permits and
. by licensees in accordance with 10 CFR 50.71(b) and data repcrted by a nurber of financial publishing fires.
The proposed rule would also draratically impact en the level of effort expended by licensing and appeal boards in adjudicating the financial cualifications issue, particularly in OL proceedings where the financial cualifications issue would be, in effect, eliminated.
Sirce utilities have been the applicants in rost cases where financial cualificatiers has been a enntested issue, it follcws that the financial condition of utility applicants and licensees would directly affect the effort expended by the boards.
If an applicant demonstrates conclusive evidence of financial cualifications, the cnly contestable eierent would be the adequacy of the applicant's demonstration that it reets the criteria; an exhaustive incuiry of financial cualificatiens would not be necessary.
The value of the proposed rule would be that the reduced level of effort by applicants, licensees, the staff end FRC adjudicatory beards would apprcpriately reflect the re' tienship cetween firancial cualifications and safety.
In cases where financial qualifications is a potential safety issue, the staff would conduct a nere detailed review; in cases where it is net, the staff's review would be miniral.
The proposed rule airs at eliminating extensive reviews in cases where the applic3nt is clearly cualified to finance activities under the proposed pe.rit er license. L'nder the existing rule, applicants in goed financial conditien and clearly financially qualified have been subjected to extensive reviews and tire-consuming litigation.
The proposed rule would sharply lessen
_4-the chance of that happening. On the other hand, an applicant or licensee that is experiencing significant financial difficulties or that is in a marginal financial condition would be subject to a more complete review.
In surrnary, the staff believes that adoption of the proposed rule would result in a substantial reduction in the impact, or burden, accompanying the requirement for a demonstration of financial qualifications with no reduction in the value, to safety, that the requirement provides.