ML19326C666
| ML19326C666 | |
| Person / Time | |
|---|---|
| Site: | Arkansas Nuclear  |
| Issue date: | 06/15/1977 |
| From: | Saltzman J Office of Nuclear Reactor Regulation |
| To: | Phillips J ARKANSAS POWER & LIGHT CO. |
| References | |
| NUDOCS 8004250484 | |
| Download: ML19326C666 (3) | |
Text
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[@RfC%r, UNITED STATES 3%
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NUCLEAR REGULATORY COMMISSION WASHINGTON, D. C. 20555 o, m: : a.,,' ;
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June 15, 1977 Docket Nos. 50-313 50-363 Arkansas Power and Light Company ATTN: Mr. J. D. Phillips Vice President Ninth and Louisiana Streets Little Rock, Arkansas 72203 Gentlemen:
The Commissicn is ccopleting the implementation of certain provisions of the 1975 amencments to the Price-Anderson Act (Public Law 94-197), so that the new re:r:s;:ective prenium system can become effective on 4
August 1, 1977.
The Commission published in the Federal Register on January 3, 1977 (42 F.R. 46) its intsntien to establish certain requirements relating to guaranteeing re: es::ective premiums to assure that following a nuclear incident defer-se revospective premiums will be paid by licensees and tnat goverr.ren: S nds will r.c: have to be used to cover defaults in such i
payments. These guarantee requirements may be met by providing any one or a combinat':n of alterra.0;e methods in the amount of $10 million for each large ;.ce reactor a licensee operates. These alternatives would be:
l 1.
Surety bonds; 2.
Letters cf credit; 3.
Revolving credit / term loan arrangements; 4.
Maintenance of es. crow 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.
l 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 gusrantees (a showing of adequate cash flow).
In N "'
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Arkansas Power and Light Conpany June 15, 1977 i-order to allow us to analyze the adequacy of the showing of cash flow, l
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 assu-,tions showin; that cash flow (i.e., cash available to a cen: cry after ali coarating expenses, taxes, interest charges, and dhidends have been paid) for $10 million can be generated and w:uld be available for payment of retrospective premiums within :hree r.cn:hs after submission of the statement; (4) a narrative statement indicating which capital expenditures (if any) would be curtailed to ensure that retrospective pre-9.s up to SIC :nillion would be available for payment.
The cash f t:w cr jection sneuid be for a one year period preferably beginning ei: Er at the ar.niversary date or if unduly burdensome at the calendar year star'ing closes: to the anniversary date. This projection sh'ould include a detailed treakdown of expected cash sources, e.g.,
retained ea qs, deprecia-ion, deferred taxes, etc., and should be certified i; r :f#i:ial cf 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.
l Utilities may recuest another. date for their annual submittals.
If more than one statecent 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 owner (s) will submit this information for the' entire $10 million guarantee.
' Arkansas Power and Light Company June 15,1977 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, sama, ume. o. hntma Jerome Saltzman, Chief Antitrust & Indemnty Group Nuclear Reactor Regulation 1
L r_ n u.