ML20039A257
| ML20039A257 | |
| Person / Time | |
|---|---|
| Site: | Oyster Creek, Crane |
| Issue date: | 10/14/1981 |
| From: | Bapbour G, Bridget Curran, Hynes E NEW JERSEY, STATE OF |
| To: | |
| Shared Package | |
| ML20039A253 | List: |
| References | |
| 804-254, NUDOCS 8112160427 | |
| Download: ML20039A257 (4) | |
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'M2 d.it*3 DTISig r-CEPARTMENT CF ENERGk 10/14/61 BOARD CF PUBUC UTIUTIES LIGAL s eco maywcNc styc.
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N EW A A K. *e tW J E R s EY 37 t c2 IN THE MATTER OF TEE APPLICATICN )
ORDER OF APPRCt'AL OF JERSEY CENTPAL PCWER & LIGHT
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CCMPANY CONCERNING AGREEMENTS RE- )
DCCXET NO. 804-254 LATING TO THE OPERATION OF THE
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THREE MILE ISLAND NUCLEAR
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GENERATING STATION AND OYSTER
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CREEK NUCLEAR GENEPATING STATION )
4-Robert O. Brokaw, Esq., Coneral Ccunssi Morristown, New Jersey, for Jersey Central Power & Light Ccepany BY THE BOARD:
Jersey Central Pcwer & Light Co:pany (Petitioner or JCP&L),
a public utility of the State of New Jersey, filed a petitien on April 15,198C, and an amendment thereto on June 16, 1990, requesting approval pursuant to N.J.S.A.
48:3-7.1 of'certain agreements to be entered int: by Petitiener, 7ennsy*vania Electric 0:=;any (Penelec),
Met:cpolitan Edisen Ccupany (Xet-Ed) and G7U.4uciaar J. porati:n (G7 CMC.
These agree ents provide inter alia for the operation. Laintenance and rehabilitation of the Three Mile Island Nuclear Generating Station consisting of Units 1 and 2 (TMI) and the operatien and =aintenance of Petitioner's Cyster Creek Nuclear Generating Station (Oyster Creek).
OCP&L, Penelee and Met-Ed, whelly owned subsidiaries of General Public Ctilities Ccryoration (GPU), a cc ;cratica of the Com=cnwealth cf Pennsylvania, supply the public with electric, light, heat and pcwer and are engaged in such businesses in parts of the State of New Jersey and the Censonwealth of Pennsylvania. Each cwns an undivided interest in TMI which is located on the Susquehanna River near Earrisburg, Pennsylvania. Petitiener cwns 100 percent of Oyster t
Creek situated in Lacey T:wnship, Ccean Ccunty, New Jersey, and presently cperates same pursuant to an NRC license.
1 The TMI nuclear units are currently eperated by Xet-Id pur-suan: to a centract be: ween it, 7etitiener and Penelee a..d an c;er-ating license ;: anted :: the three cwners of TM: by the NRC which specified Me:-Id as cperater of the TMI units.
The aforesaid con :act app::ved by this Icard due to cur engeing investigatien cf TXI was nc:
elated issues. We view any action taken herein to supercede any necessitated by ;CP&L's filing in Oceke Nc. 7810-1452.
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JC75L and the c her two cwners of TM: pr:;cse to enter in c an agrearent ras;ectin; :he sharing of capacity and energy cf !MI, engaging G?tNC to :perate, maintain, repair, and rehabilitate sare, te mak: :ce::ary redificati:..s sad addi:'en: therete and rati::::nt:
theref :: and f:: apper:icning the ecs:s thereof areng the Owners.
(A ccpy of such prcposed agreenent is annexed to Amendment Nc 1 :o the Petition as Ixhibit A-1.)
Likewisc JCPLL prepcses to enter into an agreement with G7CNC, (a ::py of said sg:eerent is annexed to the trendment tc the petitlen as Ixhibit 3), -hereby the latter will c;crat and raintain Cvster Creek anf, when autheri:ed, make al* necessary
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add fica icna therete and ra:irements therefr:: cn be-u..a i, tie.ns and,.cdi v.
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GPCNC has been inec perated under the laws cf the State cf New Jersey with its principal office located at 100 Interpace Parkway, Parsippany, New Jersey.
It is a wholly owned subsidiary cf GPU and will operate and maintain the TMI and Cyster Creek Statiens for lhe cwners thereof in accordance wjth the propcsed agreements. The United States Securities and Exchange Ccmmission (SEC), by order issued September 5, 1980, under the Public Utility Holding Cem,tany Act of 1935, has appreved both the organi:ation of GPUNC as a GPC subsidiary and the transactions related to the proposed operating agreements.
By order entered July 9, 1981, the Pennsylvania Public Utility Com-mission permitted the transfer of operational responsibility of TxI from Met-Ed to CPUNC by approving an affiliated interest agreement identical to the instant contract after finding it to be reasonable and consistent with the public interest (Opinion and order, Docket'G-80060098, July 9, 1981, at p. 6). In Docket No. 50-289, by Order dated August 13, 1981, the Nuclear Regulatory Commission (NRC) approved an amendment to the operating licence of the TMI-l facility-which granted GPUNC authority to operate same.
N.J.S.A.
48:3-7.1 provides that certain management contracts between af tiliated utilities must be approved by this Board in writing befcre they beceme val'd or effective. The Statute further provides that:
The beard shall disapprove such centract if' it determines that such contract violates the laws of this state or of the United States, or that the price or ccrpensation thereby fixed exceeds the fair price or fair ccmpensation fcr the property to be furnished or the verk c be dcne or the services to he rendered thereunder er is centrary to the public in-terest: otherwise the board shall app:cve such contract.
Additional'ly7 we may not disapprove such a centract except af ter hearing upen nctice.
N.J.S.A. 48:3-7.1.
i The filing of the instant petition by CCPEL p:cmpted the su't-j l
=issien of letter h:lefs in cppesition to same by the Divisien of Kate Counsel of the Oepartment cf the Public Advocate (Rate Counsel) and by special Counsel to the Depart =ent cf Energy (DCE).
The' thrust cf their objections to cur appr val of the contract were focused upcn the exculpatcry language centained therein reading as fcliews:
Iach of the parties hereto expressly waives any right it may have to'recever f:cm the-cther parties heretc fer_ any : csses,,da= ages,_
penalties,.. liabilities 4 lines,[claimsJrf; Q.,
expenses (including damage to:prcperty.cf; s
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- he Statien) for'any cause including 1ths.
negligence of the other; parties.heteto,~~
with the operatien of the~ Station-end( >fC 3' its enployees and agents.i=~cchnectient; i
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the provision of services thereunder. ;
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It is argued tha the feregcing p:Svisien is against public policy and thculd therefere he stricken.
GPUNC was fer:ed in response to reccmmendatiens cf varicus cceatttees which were charged with investigating the impact cf the f
TM incident.
It is c; ear te this Scard that the Objective of ~the pr:pesed agreement with GPCNC is to br. g tc? ether in a single-c ganizatien the ec binatica cf talents, skills, training and exper-tise required for integrated =anagement of the design, constructicn,
, OCCKI! NO. 304-;34
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Ferating inf erer enry resp:..se fun:tiens fer GPU nac;str p ve:
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staticas in which JCP&L holds en interest. Indeed, the Staff cf the 7,
MAC in reconnending the anendnent to the TM: operating license found
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the reorganization...into GPU nuclear, I
in conjunction with newly established l
support facilities, and including communications and revised emergency organizational structure, provides significantly improved emergency manage-ment and information dissemination capability in the event of an emergency.
(Response of William J. Dirks, Executive Director of Operations of the Nuclear I
Regulatory Commission to Congressman Alan E. Ertel dated July 1, 1981).
Our concern over the exculpatory language referred to above has been obviated by the fact that the owners of the nuclear generating stations in question are presently, and will in the future be insured to the maximum extent permissable pursuant to requirements of the Price Anderson Act.
Additionally, the language 1
ob3ected to merely precludes the parties to the agreements from bringing suit against one another.
Since CPUNC is an entity designed solely for the purpose of assuming operational responsibility over the aforesaid facilities, will provide services in connection therewith at cost and will have no assets aside from their corporate headquarters, little would be gained fino a suit to recover damsges therefrom.
In view of these facts, it is doubtful that GPUNC would undertake operational responsibility absent such a provis.'.on and we believe it to be in the public interest that it do so.
Therefore, we FIND that the proposed agreements will not change the ownership of the generating units involved, do not violate the laws of this State or of the United States, the costs provided thereunder do not exceed actual costs and overheads, and such agree-ments will not involve the abandenment or surrender of any service or any sale, lease, encumbrance or transfer of the possession or use of any tangible or intangible property, franchises, privilege or the rights of the owners of TMI and Oyster Creek, all of which will re=ain vested in the present owners thereof. We further FIND that such agreauents will not limit in any way the existing or future authority of the Board with respect to TMI and Oyster Creek and that same are not contrary to the public interest.
I Accordingly, the Board, after investigation, being satis-fied that the proposed agreements are not unreasonable and not con-trary to the public interest, and are in accordance with law, EE?.I3Y APPRCVES the proposed agreements for the operation and maintenance of TM: and. Oyster Creek to be entered into by Petitlener 6
and GPUNC as stated in the Petiticn.
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This order is ' issued"subje&tiftRfbilbwing')rovisiens:
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This order shall not affect or.:if any,9 N N '
way limit-the exercise of the-authority 2 '9 U -
of this Board or of:the;statesof gNew Jersey,.
1 in any proceeding with respect # to rates, 9
franchises, accounting, _ capitalization, ;,,7; depreciation, merger, consolidation,, '. " - J divestiture of interest in franchises, > -
privileges or rights, property, real,.
personal or mixed, or in holdings or interest in any other entity whether.or 7.
not affiliated in any manner, or dn any r wr 4
ether matters affecting the Petitlener.
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2.
Patiti:nc shall not 1:pic:nn: the cg cements if cny hRC lic:nes sc :.a and conditiens or c hor regulatery j
requirements of the NRC prevent their implementa; ion substantially in ac-cordance with their ter:r.s and con-ditions as approved hereby.
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Petitioner shall submit an executed copy of the agreements to the Board when the transacticns are consurcated.
DATED: ' October 14, 1981 BOARD OF PUBLIC UTILITIES (SEAL)-
BY:
(SIGNED)
GEORGE H. BAP3OUR PRESIDENT I
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EDWA3D H. HYNES COMMISSICNER i
ATTEST:
EldLEARA A. CURRAN CCY?.ISSICNER GERALD A. CALABRESE SECRITARY I MIT.I.3Y C ATITY Gee J.; th douarest is a t es c ;y of Qs c 'Ca3 L. tt.: fan cf ca ? cud of T.'.t: C'
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