ML19341A997

Order Authorizing Organization of General Public Utils Nuclear Corp as Wholly Owned Subsidiary for Mgt & Operation of Nuclear Plants

ML19341A997
Person / Time
Site:	Crane
Issue date:	09/15/1980
From:	Fitzsimmons G SECURITIES & EXCHANGE COMMISSION
To:
Shared Package
ML19341A995	List: ML19341A994 ML19341A996 ML19341A997 ML19341A998 ML19341A999
References
70-6443, NUDOCS 8101290762
Download: ML19341A997 (3)

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twt:sn S':reIES T NTRICA before the sfCIF."r2:S KC ECn'EE CCIMICN POLIC LTTI HCIDnE CCIGErl ACI CF 1935 Fe1. No.

21708 / Septer.ber 5, 1980 In t.".e Matter of NJJ., PUFC.IC UIILITIES CWM IOi Parsippany, New Jersey CERSEC CE? PAL PCEI'R & LIGC CCMPRE Merristcwn, New Jersey SnoCL-~ AN EDISGI CCIGANY F M g, Pen.sylvania PaciSYLVANIA "2?IEC CCEPRE Jc 5 stown, Pennsylvania (70-6443)

CE::ER AU:ECEIZ2G CBG7CIIZATIOi T A K-OLLY CGD SCBSIDIARY PCR 'mE MWMEMDTI EC CFEPATIOi T N'MR S"J'i?IQiS i

Ge.eral Pdlic Utilities Corpcraticn ("GPU"), a registered holding ccx pany, ard its. bsidiary c::cpanies na.ed abcVe have filed an application-decla-ratien aM a erd: ents theretc with this C=missien pursuant to Secticns 6, 7, 9,10,12 'b), and 13(b) of the P611e Utility Holding C:x:pany Act cf 1935 ("Act") and P.:les 45 ad 50(a) (3), and 86-95 pr:2.algated thereunder regarding the follcwing prepcsed transacticns.

GFU pregeses to crganize a new wtclly cwned subsidia:y c:x: pat. to be krown 4

as GPU Nuclear Ccrpcraticn ("NC"). NC will issue and GPU will pt.'.T.:hase fer cash 2,500 shares of NC's exren stock, at a price cf S20 per share l

cr an aggregate censideration of $50,000. If necessary, GPU will make i

cren acccunt a&/ances to NC fr:2:: ti e to tire. 2.e aggregate a: cunt of l

such a&Iances by GW to NC cutstarding at any tire will be not acre than

$500,000. Interest en such cpen account atiances will accrue at a rate equal to d e current interest ccst en GPU's bank bcrr wings. Based en the

c. rent prire rate of 11-1/2%, the effective cost of such bank borrowings

.culd be 12.21%.

NC will be a service ccreany and will net own er fina:.ce any ntriear er cher utility assets.. It is inteMed dat NC will beccre responsible, en behalf cf the owners and through centract with the, as a-d when necessarf regula: cry authcrizations are received,' for de safe cperatien, rain-tenance, rehabilitation, design, ccnstructicn, start-up ard testing of all l

nuclear generating facilities owned hy GPU Syst s cczmanies and related research ard develc; rent. ':he mse is to c:: sclidate all rescurces of d e G P U ce r A-.ies relating to nuclear ratters in a single. organization.

u'0.U cites the Feport of the President's C=r.issica en de Accident at 8101290 % M

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?.ree Mlle Island and the Repcrt of the tac /3!I Special Inquiry which have stated that integration into one crganization cf ranagenent and operating ^

res;cnsibility for nuclear generating stations is desirable so that there will be a single organizaticn with the regaisite expertise to manage the integrated operation and raintenance of such staticns.

NC propses to apply to the Nuclear Regulatcry Car.ission ("NRC") for cgmting licenses fer the Oyster-Creek Nuclear Generating Station (" Oyster Creek") owned and opera _ed by Jersey Central Power & Light C3 cany ("JCP&L")

ard for the Three Mile Island Nuclear Plants, ("DE") jointly c%ned, but not presently cgmted ard for which Mewlitan Efisen Ca:pany (" Met-Ed")

is de present licensee and the operator under the existing "MI Operating Agrement ancng JCP&L, ".et-Sd ard Pennsylvania Electric Nmy ("DE Coerating Agrement"). An amend ent of the DE Cperating Agreenent would be proposef in the IGC proceeding, which would, areng other things,. make NC a party to de agreenent and the cperati.:r of DE.

S e NRC has broad jurisdiction over the cperation of nuclear facilities. Both the timing ard secpe of NC's' activities will be governed by the *ar=s aM carditiens of ary licenses granted by the NBC and by its other regulatcry requirenents.

Any such license will also be implemented by a specific cperating agrement between NC and the cwner or owners of the subject facility. Ard licensing will be for specific plants, so that NC's " unctions ray cc:mence in stages.

Shcrtly after the March 28, 1979 accident at Unit No. 2 cn DE, the GPU Systen ca-bined the technical staffs fran Met Ed and GPU'Se.rvice Corpcration

(" Service") to fem the DE Generation Grcup consisting of app.airately

- 250 Trefsssionals assigned exclusively to activities at Units Nos. 1 and 2 of 32.

"his group, together with the technical staff of JCP&L that is

. presently res;cnsible for t'ae cperation and raintenance of Oyster Creek, ard apprcxirately 8F of the ncn-p=fessional ecplcyees of the varicus GPU Systen eccparles will ulti ately be transferred to tc, if and when it receives the necessary auderizations. Se salaries and other costs of the present GPU Systen e ployees including pension ard other e ployee benefits for such e ployees, will be included in !C's operating costs. The aggregate salaries and costs of such ecplcyees to the GPU Systen during 1979 a:cunted to approxi ately S25,000,000. NC :ay also engage consultants and centractors as needed for the discharge of its functicns.

It will render service at cost, pursuant to Section 13(b) of the Act. Be costs will be am.ted for and billed to the owners of the subject 6414-ties as prescribed by Rules 91 ard 93 and the system cf accounts prescribed there:..nder. In the case of IC services rendered for the DII urits, these ecsts will be dete=ined ard ace.r:ulated ard alloca*wd ancng the owners of SE in propertien to cwnership interests in DC.

NC's initial function will be to seek frcm oder regulatory agencies the licenses and-auderizatiens regaired. It shall re;crt its progress and activities urder Rule 24, including the undertaking of any of the intended S:nc-icns su rarized abcVe, as its authcrity to do so is established. Se ccc-anies shall file with this Cc:rission, at least 60 days before the taking of any such acticn, written notice of (1) the preposed transfer of

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3-i employees to NC's payroll, (2) preposed cPanges in th$ nethods of allocaticn to be ecplcyed by SC, and (3) any other preposed raterial changes in the conduct and crganization of NC's cptiens, including related financial infc.'."."atiCn.

S e fees and expenses to be incurred in connectica with the,.a u p sed trans-acticns are estimated at $11,250. Arendment of the TE and Oyster Creek oper-ating agreenent will require arendment of the DfI and Oyster Creek opting licenses issued by the Nuclear Regulatory Carission. Se amended TE cperating agreeent is subject to the jurisdiction of the Pennsylvania Public Utility Carlssion and the New Jersey Board of Public Utilities ("BPU").

"he arerded Oyster Creek opting agreeent is subject to the jurisdiction of de EPU. Ib cther state er federal carissien, other than this Ccrmission, has jurisdiction ever the prcpesed transactions.

Due notice of the f"ing of said applicatien-declaration has been given in the ranner prescribed in Rule 23 pra ulgated tmder the Act (HCTa No. 21610),

and no hearing has been requested of cr crdered by the Carlssion. U;x:n the basis cf the facts in the record, it is hereby found that the applicable standards of the Act and the rules thereunder are satisfied and that no adverse findings are necessary; and that it is appropriate in the public inte. m. and i

in the interest of investors ard censumers that said application-<*elaratico, as amended, he p ted and per=itted to becze effective:

IT IS OPrIED, pursuant to the applicable previsiens of the Act and, rules thereunder,-that said applicatien-declaration, as amended, be, and.it hereby is, granted and per:.itted to bec=e effective forthwith subject to the terms and conditiens prescribed in Rule 24 prcculgated under the Act.

Fcr the C=rission, by the Division of Corporate Perdation, purs'm to l

delegated authority.

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Gecrge A. Fitzsi: mens i

Secretary l

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