ML19322C789
| ML19322C789 | |
| Person / Time | |
|---|---|
| Site: | Crane  |
| Issue date: | 04/27/1979 |
| From: | NRC COMMISSION (OCM) |
| To: | |
| Shared Package | |
| ML19322C780 | List: |
| References | |
| RULE-PR-50, TASK-TF, TASK-TMR NUDOCS 8001230574 | |
| Download: ML19322C789 (26) | |
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ENCLOSURE 7 i
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9 ENCLOSURE 7
,,,9 jjjfI VALUE/ IMPACT ANALYSIS i
PROPOSED RULE CHANGE - FINANCI AL QUALIFICATIONS 10 CFR 50.33(f); 50.54(q); Appendix C,10 CFR 50 A.
NEED FOR THE CHANGE The NRC staff has cenpleted 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 concluded that the scope of the financial qualifications review is excessive for a significant portion of NRC's utility applf-cants. Accordingly, 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-
- Q,c tensive financial qualifications revi?w as at present.
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VALUE/INPACT ON APPLICANTS, LICENSEES AND NRC y y..
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Utilities would be the only type of applicant to be significantly im-g,@
pacted by the rule change because rate-setting authority would be a criterion of conclusive evidence for both construction permits and operating licenses.
The level of reduced impact will be determined specifically by utilities' financial condition as evidenced by their bond ratings.
The staff estimates that u -
mrrent economic and financial w
conditions that the majority of current Part 50 utility applicants
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and licensees would satisfy criteria that ccnstitute conclusive evidence
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The level of effort and amount of infor-
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mation to be supplied by a utility applicant that meets the specified criteria would be significantly reduced from the present requirement.
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a The level of staff effort would be correspondingly reduced.
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p Adverse economic development affecting the financial condition of the V.
utility industry could result in fewer applicants and licensees satisfying f;.
L the criteria and an increased scope of effort for those applicants, J.
licensees and the staff.
Improved economic and financial conditions could have the opposite effect.
The degree of change in effort by
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F applicants, licensees and the staff would depend on the significance or h
severity of the economic and financial developments and the corresponding effects on bond ratings.
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Since the current financial qualifications requirements are considered to
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4 that the level of effort for an applicant or licensee would never exceed
'3 the current level, even under significant adverse economic conditions.
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U The staff's overall level of effort during any one period will be deter-b ig 3
mined in large part by the financial condition of individual applicants A.
4 and licensees and the extent to which they demonstrate conclusive evidence 4
of financial qualifications.
It is noted that under both the existing and proposed rules, that the staff monitors the financial condition of 0-NRC licensees.
The staff's sources of information include armual financial 5
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h reports filed by holders of construction permits and by licensees in m
accordance with 10 CFR 50.71(b) and data reported by a number of financial (3
publishing firms.
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The proposed rule would also impact on the level of effort expended by z
licensing and appeal boards in adjudicating the financial qualifications
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4g j issue. Since utilities have been the applicants in most cases where j
financial qualifications has been a contested issue, it follows that I
L the financial condition of utility applicants and licensees would directly'
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affect the effort expended by the boards.
If an applicant demonstrates I
L conclusive evidence of financial qualifications, the only contestable
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element would be the adequacy of the applicant's demonstration that it
[t meets the criteria; an exhaustive inquiry of financial qualifications L
would not be necessary.
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b The value of the proposed rule would be that the level of effort by applicants, licensees, the staff and NRC adjudicatory boards would k
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appropriately reflect the relationship between financial qualifications 1
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]en and safety.
In cases where financial qualifications is a potential j
safety issue, the staff would conduct a detailed review; in cases where it is not, the staff's review would be minimal.
The proposed rule aims 1
at eliminating extensive reviews in cases where the applicant is clearly qualified to finance activities under the proposed permit or license.
o Under the exisiting rule, applicants in good financial condition and t
clearly financially qualified have been subjecte'd to extensive reviews i
k and time-consuming litigation. The proposed rule would sharply lessen S,0 NI
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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
- :f full-scale review.
In sunmary, 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, i
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ENCLOSURE 8 COMPARATIVE TEXT - PROPOSED REGULATION 10 CFR 50.33(f) h3
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i Each application shall state:
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Information sufficient to demonstrate to the Comission the financial
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qualifications of the applicant to carry out, in accordance with the
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regulations in this chapter, the, activities for which the permit or
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, a' license is sought. Appendix C to this Part specifies certain circum-j stances in which an applicant for an " insignificant financial interest" in a facility is normally not required to submit the financial infor-
[t mation addressed in this section and in the appendix to the Commission.
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If the application is for a construction permit, such information shall [show] demonstrate that the applicant possesses [the funds necessary-to-cover-estimated-construction-costs-and-related fuel
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cy cl e-cos t s - er-th a t-the-a ppl i c a nt-h as-re a s o n abl e-a s s ura nc e-of-ob-j t;a
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teining-the-necessery-funds,-er-e-eembinatien-ef-the-twei] or has (j
m reasonable assurance of obtaining the funds necessary to cover
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95 v estimated construction costs and related fuel cycle costs. The y
rr, applicant shall submit estimates of the total construction cost 8
of the facility and related fuel cycle costs and shall indicate 4
F the source of funds to cover such costs.
l-f (2) [W4 t h-res pect-t e-any-product 4 en-er-ut4 -14 a ai.4 en-f a c4 -14 ty-of-a- type de s c ri b ed-4 n-Sect 4 en-5922-l O-)- er-Sec t 4 en-60,22,- er-a- t es t4 ng 3
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if f aeility r-t h e -f ellewi R g-Spee 4 f f e -requ i remeRt S-S h all-applyr]
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MF If the application is for an operating license, such information
'u-shall [ shew] demonstrate that the applicant possesses [the-funds neseSSary-te-sever-estimated-epe FatiR 9-eeStS-eP-that-the-appf f eaRt ha S -Fea Se Rable -a S S W Fa R e e-e f-ebt a i R f R g -th e-R e s e S S a Py -f W Rd S r -eP -a f
d esmbinatisa-ef-the-twer] or has reasonable assurance of obtaining the funds necessary to cover estimated operating costs for the period of the license, [er-fer-five-ye&PS;-whfehever-fS-gPeateP],
plus the estimated costs of permanently shutting the facility down a
and maintaining it in a safe condition. The applicant shall submit estimates of total annual operating costs for each of the first five years of operation of the facility and estimates of the costs to permanently shut down the facility and maintain it in a safe condition.
The applicant shall also indicate the sources of funds to cover such N
r costs. An application to renew or extend the term of an operating p,
y,k j license shall include the same financial information as required in n~
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an application for an initial license.
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- Without limitation on the generality of the foregoing requirements, each 5:
application for a construction permit, or an operating license submitted by [an] a newly formed entity organized for the primary purpose of con-
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structing or operating a facility shall include information showing the legal and financial relationships it has or proposes to have with its stockholders or owners, and their financial ability to meet any contractual obligation to such entity which they have incurred or propose to incur,
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to enable it to determine the applicant's financial qualifications.
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Appendix C to this Part states in greater detail the financial data
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i and other related information to be submitted by applicants for a licenses to construct and operate production or utilization facilities j of the types described in Section 50.21(b) or Section 50.22, or a 1 49 testing facility. The appendix sets forth certain financial criteria that, when satisfied by such an applicant, demonstrate conclusive [ evidence of financial qualifications. An applicant that satisfies the 1 specified criteria is financially qualified under the Commission's J regulations to pursue the activities for which the permit or 'icense is sought. An applicant that does not satisfy the specified criteria 1 will provide additional information at the Commission's request to ] demonstrate its financial qualifications. Further inquiry and ..:] '. ? 1 adjudication of an applicant's or a licensee's financial qualifications JJR! * ?? is foreclosed after the Commission has determined that conclusive A '};;j ((Q evidence of financial qualifications has been demonstrated. An j'}yy exception to this is the case of an applicant or a licensee, previously j (f[ found financially qualified through the criteria that demonstrate conclu- 'I sive evidence, that no longer satisfies either one or both of the i specified criteria. x kpm lNE'i i?!', 4
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- i satisfying the criteria that demonstrate conclusive evidence, it shall promptly report to the Commission when it no longer satisfies either one or both of the financial criteria specified in Appendix C.
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5 4 6 1 3 (NOTE: Entire Table of Contents is new.) .l} ~ ~ !' d TABLE OF CONTENTS ..y 4 -i Appendix C,10 CFR 50 - A GUIDE FOR THE FINANCIAL DATA AND RELATED INFORPATION 1 REQUIRED TO [ESTABLJSW] DEt0NSTRATE FINANCIAL QUALIFICATIONS FOR FACILITY CONSTRUCTION PERMITS AND OPERATING LICENSES j I. General Information. l II. Applicants Which Are Established Entities. l A. Applications for construction permits. -i 1. Estimate of construction costs. 2. Sources of construction funds. 3. Applicant's financial statements. 4. Conclusive evidence of financial qualifications. Reporting adverse changes to the Comission. 5. Alternative demonstration of financial qualifications. B. Applications for operating licenses. 1. Estimate of ope 2 ting costs and sources of funds. / 2. Applicant's financial statements. 1 3. Conclusive evidence of fina.ncial qualifications. Q Reporting adverse changes to the Comission. 2 ~4. Alternative demonstration of financial qualifications. yy. C. Applications by joint applicants. M III. Applicants Which Are Newly Formed Entities.
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Applications for construction permits. rqid Wi 1. Estimate of construction costs. 1 2. Sources of construction funds. 3 3. Applicant's financial statements. I i l B. Applications for operating licenses. 1. Estimates of operating revenues and expenses. 2. Applicant's financial statements. IV. Transfers of Ownership Interests. V. Insignificant Financial Interests. ,4 ; VI. Annual Financial Statements - Reporting Requirement. ,sQ VII. Additional Information. j m ..j 4 1 y - ...-m-------,-.,----_e-- --,--7-------- x = dE ' ~ & w, .*L.&yy &L
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" ;f 1. GENERAL INFORMATION This appendix is intended to apprise applicants for licenses to construct i-and operate production or utilization facilities of the types described I i in Section 50.21(b) or Section 50.22, or a testing facility, of the t [ general-kinds-ef] financial data and other related information that will demonstrate the financial qualifications of the applicant to carry out l the activities for which the permit or license is sought. [The kind-and i deptk-ef-informatien-deser4 bed-in-th4s-gtaide is-not intended to be-a-rigid. end-absolute-requirements--in-seme-instences--additional-pertinent-eaterial m ay -b e -n e ed e d :-- E n -a ny-c a s e-- t h e-a ppli ca nt-s h o ul d-i n e l ed e-i n f o rmat i o n-e t h e r than-that specified-if-such-information-is pertinent-to-establishing-the applicant's-financial-ability-to-censtruct-and-operate-the proposed-fccility-] The provisions of this appendix are in accordance with the requirements of Section 50.33(f) of this Part. The appendix sets forth certain financial criteria that, when satisfied by an applicant, demonstrate conclusivt t-evidence of financial qualifications. An applicant that satisfies the [- p specified criterie is financially qualified under the Commission's regula-H tions to pursue the activities for which the permit or license is sought. g u An applicant that does not satisfy the specified criteria will provide additional information at the Commission's request to demonstrate its i financial qualifications. Further inquiry and adjudication of an appli-I cant's or a licensee's financial qualifications is foreclosed after the Commission has determined that conclusive evidence of financial qualifi-cations has been demonstrated. An exception to this is the case of an Jj w .g 2; ~ = y ha eh d ..m _E' "6 ga h .a N E" kn*
9 L t Ta e 7 7-i >; A y U mf applicant or a licensee, previously found financially qualified through ?$ r the criteria that demonstrate conclusive evidence, that no longer satisfies either one or both f the specified criteria. s I Item V of this appendix specifies certain circumstances in which an I applicant for an " insignificant financial interest" in a facility is h' normally not required to submit the financial information addressed in Section 50.33(f) of this Part and in this appendix to the Commission. p Since separate findings of financial qualifications will be made by the Comission at the construction permit stage of the licensing process and at the operating license stage, the nature of the information to be in- [ cluded in the application at each of these stages is discussed separately. { p It is important to observe also that both Section 50.33(f) and this appen-h- dix distinguish between applicants which are established [erganizatiens] I entities and those which are newly formed entities organized priraarily for h H d j'. the purpose of engaging in the activity for which the permit or license is y sought. Those in the former category will normally have a history of oper- '< b Dr 8 ating experience and be able to submit [finanef al-statements] data reflecting 6..f y j the financial results of past operations. With respect [3-heweve5] to the l-applicant which is a newly formed company established primarily for the pur-i ( pose of carrying out the licensed activity, with little or no prior oper-l L ating history, somewhat more detailed data and supporting documentation will k f generally be necessary. For this reason, the appendix describes separately [ the scope of information to be included in applications by each of these two classes of applicants. 7 7, bp. p [Z r y - 7 is MW-* _,,,r 9t* 96 u_ -1gp M 3w===,.L==+ e. W 3+ - < = - *- e-asei e
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"-*-N ' - -- + 4' g.c,y [I n-determinin g-an-applieantis-fi nane 4 al-qualificat f ens;-t he-Gemis s ien-will .... ;.n req u i re-th e-mi nimum-a mou n t-of-4 n ferma t i on-neses s a ry-f o r-t h a t -pu rp os e.--No-y special-ferms-are-preser4 bed-fer-submitting-the-infeFmation,--In-many e a s es;-the-f 4 na ne 4 al-4 a ferma t 4 ea-u s u ally-c ont ained-i n-su rre nt-a nnua l finane f al-reports;-ineluding-sumary-data-ef-priGr-years y-W4Il-De-suff 4G4ent fer-the-Gemissienis-needs,--The-Gem 4ss4en-reserves-the-right, however, to-require-additienal-finane4al-4afermatien-at-the-senstruction-perm 4t stage;-at-the-eperat4r p44 cense-stage 3-and-dwring-operation-of the faefifty;-partieularly-4n-cases-4n-wh4ch-the-proposed-power-generating-facility-will-be-eemenly-ewnee-by-two-er-mere-existing-companies.or Ja wh4eh-f4nane4ng-depends-upen-Jeng-term-arrangements for-the-shar4ng-of th e-pewer-f rem-t he-fac444 ty-by-two-er-mere-el ect ri cal-genera ti ng-com- ~ panies3] The data specified in this guide will generally be suffiiient for the Commission to determine an applicant's financial qualifications 4 ,' a for a construction permit or an operating license. However, the Commission 1: 't " k]d ~ reserves the right to require additional financial information prior to ]hy construction or during~ construction or operation of the facility. This tgg is particularly true in cases of significant adverse changes in the Ed financial condition of an applicant or licensee or in response to signifi-a m cant adverse economic developments. Applicants, permit holders and licensees are encouraged to consult with the Commission with respect to any questions they may have relating to the requirements of the Comission's regulations or the information set forth in this appendix. ,.J
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j . :j ] :, l jt II. APPLICANTS WHICH ARE ESTABLISHED [0RGANtZATIONS] ENTITIES .3 :,o A. Applications for construction permits -
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2 1. Estimate of construction costs. For electric utilities, each appli-cant's estimate of the total cost of each unit _ of the proposed facility should be broken down as follows and be accompanied by a statement describing the bases from which the estimate is derived: ) (a) Total nuclear production plant j costs................ t 1 (b) Transmission, distribution and general plant costs......... 4 (c) Nuclear fuel inventory cost for L fi rst core............. $ Total Estimated Cost..... $ Mc.. j [ S eet ie n -3 r790 -e f GFR -P a r t a nd -S e et ie n -9 r5 -ef G FR -P a r t-9 1 in d ie at e -t h e-e i r e u m s t a n e e s -u n d e r-whie h -ini:e rma t ie n -s u bm itt e d -by (~jg . i app Mea nts -may -b e -w ith held -f rem -pu bl-ve -d is el-e su re r] t If the fuel is to be acquired by lease or other arrangement than purchase, the application should so state. The items to be in-l cluded in these categories should be the same as those defined s in the applicable electric plant and nuclear fuel inventory accounts [pF85GFi bed-by -the-E9deFal -IlOWeF-GemmisSriOR] stated in the Uniform (NOTE: Paragraph headings are underlined and are not new material.) a a, ce ?.1. ; MM q' s W s1 1 me un m.
e i ' 2A . 11 System of Accounts of the Federal Energy Regulatory Commission or ..) { an explanation given as to any departures therefrom. i I l Since the composition of construction cost estimates for production i i and utilization facilities other than nuclear power reactors will I f vary according to the type of facility, no particular format is f f j suggested for submitting such estimates. The estimate should, i - i i however, be itemized by categories of cost in sufficient detail to 4 -i i permit an evaluation of 'its reasonableness. 2. Sources of construction funds. The application [should] shall include a brief statement of the applicant's general financial plan for financing the cost of the facility, identifying the source or sources upon which the applicant [rel4es] will rely .,j l .j for the necessary construction funds, e.g., internal sources such as [und4stributed] retained earnings and depreciation g] accruals or external sources such as [berrowings] issuance of debt -47 and equity securities. The application shall indicate the relative q Wi degree to which each source of funds is expected to contribute to k ig [ the total required funds. The projected overall capital structure i of the applicant during construction of the facility shall also l be indicated. A publicly-owned applicant shall submit excerpts from statutes, ordinances or other legal authority that allow it to issue bonds f or other forms of indebtedness and to take other actions necessary [ t j to finance the facility. m, n
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Applicant's financial statements. The application shall also in-g i.. r. p clude the applicant's latest published annual financial report, k together with [sueh-eWFFORt] Ms most recent interim financial 5 statements [as-aFe-peFt%ROR%). If such a report is not published, s 3 the balance sheet and operating statement covering the latest l complete accounting year together with all pertinent notes thereto r 4 and certification by a public accountant [should] shall be furnished. J n 4 4. Conclusive evidence of financial qualifications. An applicant that - ' y satisfies the following two criteria is financially qualified under a j the Commission's regulations governing the issuance of construction 1 ] permits. In addition to providing the information specified above, each applicant shall state in its application information sufficient to demonstrate how it does or does not satisfy each of the following -4 -.j two criteria: ..j j l 31 d (a) The applicant's rates for service are determined by state L JL p.' and/or federal regulatory agencies or by the applicant it- ~. ' J { s el f. For this purpose, the applicant's rates shall be con- [ sidered to be self-determined if its rates are established either directly for itself or by its controlling governmental unit (e.g., by the city council for its municipal utility); and -1 (b) The applicant's most senior long-term debt is rated "A" or higher by both of the major securities rating services (Moody s I 4 Investors Service, I nc., and Standard and Poor's Corporation). N,. w. ti8
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12 - g ,: Ij (An applicant whose long-term debt is guaranteed by the United 4 3 i States, or an agency thereof, shall be deemed to have ratisfied this criterion. Such an applicant chall submit copies of a loan commitment r.atice for debt that will finance construction of the i facility.) Reporting adverse changes to the Commission. If at any time after submitting its construction permit application and before an operating license is issued, an applicant (that half ^ previously been found financially qualified by satisfying the l criteria that demonstrtte conclusive evidence) no longer satisfies i j one or both of the above criteria, it shall promptly report the circumstances and reasons therefore to the Commission. I l S. Alternative demonstration of financial qualifications. 1 [dj An applicant that does not satisfy either one or both of the M.1 above criteria of conclusive evidence will provide additional 'q financial information at the Commission's request. The information r- )j N will enable the Commission to analyze the applicant's financial qualifications in greater detail and to determine if the appli-s cant is financially qualified to pursue activities under the proposed permit. B. Applications for operating licenses. [An-application foi:-a facility operat ta g -I teense -w ill-u s u a lly -b [- f fled -ne.a r -the -t ime -o f -eem ple t t en ef-eenstreetten-ef-the-f ae flity r--Seetten-59,33 f f)--requires-that-all appl-i-eabi-ens -fer-eperating-1 f eenses-shew-thab-bhe-appHeant-pessesses 4 i --e.-.,,,.-,w,.--yy,-+..- i a, k -.-
t t 1* 13 - t } s; t h e-f u n d s - n ec e s s a ry-t o-c o v e r-e s ti ma t e d-op e ra t i n g-e e s t s-- o r-h a s - re a s on- _u j e b l e - a s s u ra nc e-o f-eb t a i n i n g-t h e-n e c es s a ry-f u n d s -- o r-e- c omb i n a t i o n-o f h t 4-t h e-two,--i n-a dd i t 4 e n;- ea c h-a pp14 e a t 4 e n-f o r'- a - 14 een s e-f o r-e- f eei li ty ,r. e t k e r-t h a n-e-me d 4 e a l-e r-re s e a re h-re d e t e r-4 s-requ i re d-t e-s he w-t h e t-t h e [ j L a p p l i c a n t - pos s e s s e s - e t'- h a s - re a s o n a b l e-a s s u f*e n c e-o f - ob t a i n i n g-t h e - f u nd s f i. nee e s s a ry-t e-pey-t h e-es t 4 me t ed-ees t s-ef-epet'a t 4 en-f er-t k e-pe r4 ed ef-the-14eense-or-fer-5-years--wh4ekever-49-greater;-plus-the-estimated I eests-ef-permanently-skutting-down-the-fac414ty-and-ma4nta4ning-4t-4n- . -~ a-safe-eendition,--Fer-purposes-of-the-latter-requirement will i ordi na ri ly-be-su f (4 e 4 en t-t o-show-a t-t he-64 me-of-f 4 4 4 n g-of-t h e-a ppl 4 - f eat 4eny-availability-of-resources-suff4s4ent-to-sover-estimated r opera t 4 n g-s es t s-f o r-eac h-of-t he-f4 rs t-5-yea rs-of-ope ra t 49 n-p l u s-t he 1 es t i ma t ed-e es t s-o f-pe rma n en t-s h u t down-a n d-ma i n t e n a n c e-o f-t h e-f a ci li ty l in-safe-eendition.--It-4s-also-expected-that -4n-most-cases 3-the-appl 4 3 ce nt i s - e n nu el-fi ne ne 4 al-s ta t emen t s-e en t a i ned-4 n-4 t s-pu bl 4 s h ed-a nnual I
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.1 re p ort s -wi l l - e n a bl e-t h e-G enmi s si on-t o-e va l u a t e-t h e-a ppl i c a n t l s p C N finanef al-eapab414ty-to-sat 4sfy-this-requirement.] ~ $o 1e ij 1. Estimate of operating costs and sources of funds. During the ] i review of an application for an operating license, the applicant i o will provide, at the Commission's request, current estimates of the total annual cost to operate the facility for each of the first five years of operation and estimates of the costs to permanently shut down the facility and maintain it in a safe l i condition. The applicant will also describe the sources of funds to cover operating costs and shutdown and maintenance costs. a c c? b h 1 _. s 1
Ii l 'b 47 "fb H: L,- l~ w l[:;1 2. Applicant's financial statements. The application shall include !p p L.) the applicant's latest published annual financial report, to-t - gether with its most recent interim finarcial statements. If 4 I such a report is not published, the balance sheet and operating i I 4 statement covering the latest complete accounting year together I with all pertinent notes thereto and certification by a public accountant shall be furnished. -} 3. Conclusive evidence of financial qualifications. An applicant -. 4-that satisfies the following criterion is financially qualified j under the Commission's regulations governing the issuance of operating licenses. Each applicant shall state in its application .ij information sufficient to demonstrate how it does or does not satisfy the following criterion: l The applicant's rates for service are determined by state y n M and/or federal regulatory agencies or by the applicant it-4 2 self. For this purpose, the applicant's rates shal? be con-e 9
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h. g) sidered to be self-determined if its rates are established f y I either directly for itself or by its controlling governmental ~ u unit (e.g., by the city council for its municipal utility). I Reporting adverse changes to the Commission. If at any time after submitting its application or while the f acility is licensed, an applicant or licensee (that had pre-viously been found financially qualified by satisfying the t criterion that demonstrates conclusive evidence) no longer I 1 [s; j r: v ( ~
I a 4 f satisfies the above criterion, it shall promptly report the a: circumstances and reasons therefore to the Commission. a 4. Alternative demonstration of financial qualifications. 1 An applicant that does not satisfy the above criterion of conclu-sive evidence will provide additional financial information at the Connission s request. The information will enable the Conmission to analyze the applicant's financial qualifications in greater detail and to determine if the applicant id financially qualified to pursue activities under the proposed license. i C. Applications by joint applicants - ~ j Joint applicants are a group of established entities that have agreed to apply for and to pursue activities under a construction permit or operating license. Each joint applicant is individually subject to . u 7 all of the above requirements for established entities. In addition 3 l to providing the Commission with the information required for estab- ~[) lished entities, joint applicants shall submit copies of their joint if5 ELgiQ ownership and operation agreement (or similar enreement or contract) eg y ' Il that outlines financial responsibilities of the parties. t Joint applicants are differentiated from a newly formed entity in that 1 the latter does not have a significant operating history that can be analyzed from the financial qualifications standpoint. The require-I ments for newly formed entities are covered in III, below. i iU. W I yJ l 3o N ..-m t d. %. I.
l 1 s i 4 }t. ~. ~, n., k b!E III. APPLICANTS WHICH ARE NEWLY FORMED ENTITIES C.N. I__.. q$ A. Applications for construction permits - 1 ...} ] 1. Estimate of construction costs. The information that [w414] is normally [be] required of applicants which are newly formed ~} entities [wf11] does not differ in scope from that required of 1 established Lerganizatiens] entities. Accordingly, applicants 1 j [shewid] shall submit construction cost estimates as described j above for established leFganizatiens] entities. 1 2. Sources of construction funds. The application [shewid] shall specifically identify the source of sources upon which the appli-cant [FelieS] Will rely for the funds necessary to pay the cost .i of constructing the facility, and the amount to be obtained from each. With respect to each source, the application [sheuld] Q shall describe in detail the applicant's legal and financial O -;.; Gy relationships with its stockholders, corporate affiliates, or T@W :.si others (such as financial institutions) upon which the applicant (NMd is relying for financial assistance. If the sources of funds tr:7.N Mi relied upon include parent companies or other corporate affiliates, n ~S information to support the financial capability of each such [ company or affiliate to meet its comitments to the applicant [should] shall be set forth in the application. This information [Shewid] shall be of the same kind and scope as would be required if the parent companies or affiliates. were in fact the applicant. [0 Fd ira Fily y -it -w ill-b e -R e G O S S a Fy-t h a t-s ep %eS -ef -89 Feer e Rt S -e F _ /d sentFastS-ameng-the-sempanies-be-Submittede] .AN h:rk +. .m. i . u m A..: e-
i The established entities comprising the newly formed entity shall rrc q
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submit copies of the joint ownership and operation agreement (or similar agreement or contract) that outlines the financial respon. sibilities of the parties. 3. Applicant's financial stateinents. As noted earlier in this appendix, an applicant which is a newls formed entity will normally not be in a position to submit the usual types of balance sheets. and income statements reflecting the results- - l of prior operations. The applicant [should] shall, however, include in its application a statement of its assets, liabilities and capital structure as of the date of the apnlication. B. Applications for operating licenses - [ir--Gurrent-finanefal-statements.--In-4ts-applieatien-for-a-lisense - j te-eperate-the-fae414ty;-the-appl 4eant-sheuld-inelude-a-state- .l
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ment-ef-4ts-eurrent-f4nane4al-eendition.] ha.% p,1 ; 1. Estimates of operating [4neeme] revenues and expenses. [In-order gsw te-enable-the-Gemmiss4en-te-evaluate-the-applisantis-f4nans4al i qualiff eat 4 ens-te-eperate the-cempleted-fas414ty-and -4f-necessary, 3 i i te-shut-4 t-dewn;- es-requi red-by-S ec t 4 e n-50,33 ( f.) i-t h e-a p pl i c a t i on i fer-a-l4 cense-te-eperate-a-facil4ty-ether-than-a medical-or-research 2 reaeter-should-include-a statement-ef-the-applicant s estimate of-annual-4 nseme-and-expense-fer-the-first-f 4 ve-years-of-operation-] ) During the review of an application for an operating lit.anse, the applicant will provide, at the Commission's request, current i 1 E. 3 w g.--- - - + - - -..,, - - - - ~, - - - ~ y,-
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I 5. 1 ;g 5 ik..lj a i., o et estimates of the facility's annual operating revenues and oper-lk...
- f;i ating expenses for each of the first five years of operation.
The statement should list operating revenues and expenses in sufficient E7 1 detail to permit an assessment of the reasonableness of the estimates. 4 The expected source of operating revenues shall be indicated. In ' "A addition, the applicant [should] shall include its estimate of costs 1 and indicate the source of funds to permanently shut down the facility and maintain it in a safe condition [4f-that-sheeld-beeeme-neeessary]. 2. Applicant's financial statements. In its application for a license to operate the facility, the applicant shall include a statement of its assets, liabilities and capital structure as of the date of the application. IV. TRANSFERS OF 0WNERSHIP INTERESTS A transfer of ownership interest in a licensed facility requires prior ,p [gf' Commission approval by amendment to the permit or license. (See Section s$ 50.10.) The financial information required by the Commission for its a,[f] review of a proposed ownership trU.sfer is the same type of information su ,}I required for an initial permit or license. Accordingly, a proposed new owner or a owner seeking an increased ownership share in a licensed facility is subject to the requirements of this appendix and Section 50.33(f). The provisions for insignificant financial interests in V, below, are an exception to these requirements. I V. INSIGNIFICANT FINANCIAL INTERESTS t An ownership interest of less than five percent in a facility by any one g $fb e ,m ,. :f i ) ~ .g >:j.
P e e d ..J. L applicant is considered insignificant from the financial qualifications
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(With respect to a nuclear power plant, " facility" means each nuclear unit.) Accordingly, the Commission generally does not resiew and no finding is necessary on the financial qualifications of an 4 applicant for less than a five percent ownership interest in a facility. Likewise, the applicant for such an interest is norraally not required to submit the financial information specified in Scction 50.33(f) of this Part and in this appendix. (Such an applicant is required to file its annual financial report with the Commission in accordance with VI, below, i and Section 50.71(b).) liowever, the Commission may elect to review j such an interest if it appears that extenuating circumstances may be present. For example, such an interest would be subject to the financial qualifi-cations review if the interest appears to represent a significant level of control over the construction or operation of the facility. 1 ~ Likewise, an application for a license amendment involving less than a g ;.m ~ ff; lj' five percent increase in ownership interest by any one applicant is not r;*yll 7T Q subject to the financial qualifications review. Ilowever, such an appli-3 cant is subject to the financial qualifications review if its proposed t: 7 }if total ownership in the facility is greater than five percent and the I applicant has not previously been subject to the financial qualifications n review with respect to that facility. These provisions for insignificant financial interests do not affect other provisions in this Chapter for licensing of an ownership interest or for prior approval by the Commission of transfers of ownership (thy interests. $4 Enc 1 care 8 x:, ,4~ 4 ..a s e- =+%A-. w .w e. w _ em. ,m .--..,,,._....e=.- game'- = g -*ww-- m
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-1 20 - ".,:., i aa' . Spj VI. ANNUAL FINANCIAL STATEMENTS - REPORTING REQUIREMENT - J Each l' ansee and each holder of a construction permit for a production - 'd or utilization facility of a type described 1.1 Section 50.21(b) or Section 50.22, or a testing facility is required by Section 50.71(b) to file its annual financial report with the Commission at the time
- 3 of issuance thereof.
This requirement does not apply to licensees or 4 holders of construction permits for medical and research reactors. t t VII. ADDITIONAL INFORMATION c i The Commission may, from time to time, request the applicant or licensee, whether an established [ergan4zat4en] entity or newly formed entity, to submit additional or more detailed information respecting its financial arrangements and status of funds if such information is deemed necessary to enable the Comission to determine [an] the applicant's financial a qualifications for the permit or license or a licensee's financial qualifi- "'3 cations to continue the conduct of the activities authorized by the license .~.[ j and to permanently shut down the facility and maintain it in a safe condition. t: -y_yg 4 'l $)p$ pd w,y .f.- x.'q %-.-..-m,. -r 9 m \\1 \\ ,3.___. U iA. cl. j}}