ML19317E008
| ML19317E008 | |
| Person / Time | |
|---|---|
| Site: | Oconee  |
| Issue date: | 06/17/1977 |
| From: | NRC COMMISSION (OCM) |
| To: | Theis A DUKE POWER CO. |
| References | |
| NUDOCS 7912110718 | |
| Download: ML19317E008 (2) | |
Text
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,y U.TITED STATES pV hjg NUCLEAR REGULATORY COMMISSION
' o W ASHINGTON. D. C. 20355 tN,,
June 15, 1977 Docket 'bs. 50-26 50-270 50-387 Duke Power Company ATTth ?!r. A. C. Theis Senior Vice President 422 South Church Street Charlotte, tiorth Carolina 28201 Gentlemen:
The Commission is ccepleting the implementation of certain provisions o 1
1 the 1975 amencnents to the ? rice-Anderson Act (Public L i
that the new retrospective premium system can become effective on
, so August 1, 1977.
The Commission published in the Federal Register on January 1
F.R. 46) its intention to establish certain requirements relating to 3,15/7(42 guaranteeing re:rcspective premiums to assure that following a nuclear incident deferred retrcspective premiums will be paid by licensees and that governmen:
funds will not have to be used to cover defaults in such payments.
These guarantee requirements may be met by providing any one or a combira i:n cf alcernative methods in the amount of $10 mil each large :: +r reactor a licensee operates.
be:
These alternatives would 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 expen(ses,, taxes, interest cha 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.
i The purpose of this letter is to le2rn from you the type of guarantee Alternative 5 of the guarantees (a showing of adequa In t
i 7 912110 7/ P L
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Duke Power Company June 15,1977 orde 13 allo.. us to an iyze the adeauacy of the sho, zing of cash flow, we a:. auld be providec witr. u.e folio... 0.
(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 assm;:ticns showing that cash flow (i.e., cash available to a cc any af tse ai; cperating expenses, taxes, interest charges, and sividends have been paid) for $10 million can be generated anc vocid be available for payment of retrospective premiums i
within tnree contns after submission'of the statement-l (4) a r,arrative s;atemant indicating which capital expenditures (if any) would be curtailed to ensure that retrospective premiws up to $10 million would be available for payment.
The cash flow pr:jecticn sr.et.ld be for a one year period preferably beginning eitt.e-at the ar.niversary date or if unduly burdensome at the calendar year starting cicsest to the anniversary date. This projection should incl.de a detailed b-sakdown of expected cash sources, e.g.,
retained earr M s, ceoreciation, deferred taxes, etc., and should be certified :y ar cfficial 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 uti',ity's indemnity agreements.
Utili~ ties 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 utilitze 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. We would expect, however, that in cases where there are numerous licensees, some with small percentages of ownership, that only the principal cwner(s) will submit this information for the entire $10 million guarantee.
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