ML19347F463

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Requests NRC Determination Re Necessity of Amend to CPPR-87 for Statutory Merger of Northern Michigan Electric Cooperative,Inc & Wolverine Electric Cooperative,Inc
ML19347F463
Person / Time
Site: Fermi DTE Energy icon.png
Issue date: 04/16/1981
From: Tauber H
DETROIT EDISON CO.
To: Bickwit L
NRC OFFICE OF THE GENERAL COUNSEL (OGC)
References
NUDOCS 8105190331
Download: ML19347F463 (3)


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S. Nuclear Regulatory Commissig % [ . V \

Matomic Building sy 1717 H. Street N.W. g l g{3 Washington, D.C. 20555 Re: Construction Permit CPPR-87 as amended

Dear Mr. Bickwit:

The purpose of this communication is to request your a.ssistance and advice regarding the necessity of an amendment to the above referenced Construction Permit issued to Detroit Edison Company, Northern Michigan Electric Cooperative, Inc., and Wolverine Electric Cooperative, Inc. regarding the construc-tion of the Enrico Fermi Atomic Power Plant Unit 2.

We are requesting a determination as to whether an amendment will be required should the Northern Michigan Electric Cooperativa, Inc., (NMEC) and the Wolverine Electric Cooperative, Inc. (WEC) engage in a statutory merger under Michigan Law.

Background

In September of 1978, the Board of Directors of both NMEC and WEC were contacted by the Rural ,

Electrification Administration (REA). REA expressed I its concerns over the future costs of power supply in the State of Michigan and indicated that the cooper-atives should embark upon an objective look at future power requirements, pcuer supply alternatives, future costs, competitive petitions, long-run management strengths, and other related questions. Furthernore, REA suggested that the cooperatives explore the possi-bility of consolidating the two cooperatives.

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o Leonard Bickwit, Esq.

January 26, 1981' Page 2 The individual boards formed the NMEC-WEC Consolida-tion Study Committee which hired consultants to study the issues set forth by the REA. The consult-ants completed their initial engagement setting forth detailed recommendations for improved operation of both NMEC and WEC as well as identifying economies that could possibly be achieved through a consolida-tion.

dMEC, NEC, their member distribution systems and the REA believe that significant benefits are avail-able through the recommendations. Many of the recommendations have been implemented and NMEC and WEC are currently engaged, through a new committee, in examining the prospects of merging the two systems.

System Consolidation Recognizing that any business combination could present certain tax problems and further recogniz-ing the fragile tax status of generati ]n and trans-mission cooperatives, the new committee retained Ernst and Whinney to assist in examining their current and projected tax situation prior to effecting any business combination. Based upon the findings to date, it appears that the two systems can combine, without the significant cost of tax exposure, through a statutory merger.

As the tax study is nearing completion, the committee, its legal counsel, and its consultants recognize the need for coordinating any future action with the Nuclear Regulatory Commission (NRC).

Action Reauested Based upon Doctor Denton's determination letter to Dr. Robert G. Asperger dated March 3, 1978, regarding the sale of 20 per cent of the Fermi 2 Plant to NMEC and WEC and the sections of the Atomic Energy Act of 1954, as amended, ("the Act") cited the rein , NMEC , WEC , and Detroit Edison request your consideration in assisting the parties to effect the reorganization with the least of obstacles.

.d Leonard Bickwit, Esq.

March 11, 1981 Page 3 Toward that ultimate goal we specifically request a det^ mination pursuant to 10 CFR Part! 8, that a star ' ;ry merger of NMEC and WEC will not result in :. wransfer of ownership of the facility under section 101 of the Act nor will it result in a transfer of a license as described in section 184 of the Act.

In the event that an adverse deterInination is proposed, we respectfully request a conference in your offices to ascertain the most efficient and economical way to proceed in this endeavor.

Very truly yours,

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Harry Tauber The Detroit Edison Company

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Barrie E. Lit;nf, foot Co-Chairman NMEC-NEC Reorganization Coni'ittee

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William-Chapin Co-Chairman NMEC-WEC Reorganization Colaru.ttee

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