ML20044G576
| ML20044G576 | |
| Person / Time | |
|---|---|
| Site: | Claiborne |
| Issue date: | 05/28/1993 |
| From: | Leroy P LOUISIANA ENERGY SERVICES |
| To: | Jim Hickey NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS) |
| Shared Package | |
| ML19311B070 | List: |
| References | |
| NUDOCS 9306030336 | |
| Download: ML20044G576 (9) | |
Text
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Charlotte, NC 28201-1004 May 28,1993 Mr. John W. N. Hickey, Chief Fuel Cycle Safety Branch Division of Industrial and Medical Nuclear Safety Office of Nuclear Material Safety and Safeguards U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Re:
Docket No.: 70-3070 Louisiana Energy Services Claiborne Enrichment Center Partnership Agreement File: MTS-6046-00-2001.01
Dear Mr. Hickey:
Enclosed are two copies of the First Amendment to Agreement of Limited Partnership of Louisiana Energy Services, L.P. One copy is marked "non-proprietary" and may be released for public examination. One copy is marked " proprietary" and is to be withheld from public disclosure in accordance with 10 CFR f2.790. The information shculd be withheld because it contains trade secrets and commercial or financial information which is confidential and disclosure of which could result in substantial harm to LES' competitive position. The enclosed affidavit,which is very similar to the affidavit originally submitted to the NRC by letter dated October 24,1990 by J. Michael McGarry, III, Counsel for LES, provides the basis for the information being considered proprietary.
The Agreement of Limited Partnership of Louisiana Energy Services, L.P. (" Partnership Agreement") has been revised to reflect the additionallimited partner capital contributions to the partnership. The Partnership Agreement was originally submitted to the NRC by my letter dated May 1,1990. A proprietary copy and non-proprietary cony wer:: submitted by letter dated October 24,1990 by J. Michael McGarry, III, Counsel. )r LES. These additional copics were submitted in response to a letter dated September 26,1990 from Mr. J.A. Fitzgerald, Esq., Assistant General Counsel for Adjudications and Opinions, USNRC.
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May 28,1993 Mr. John W. N. Hickey, Chief Page 2 Please call me at (704) 382-2834 if there are any questions concerning this.
Sincerely, N
Peter G. LeRoy Licensing Manager PGlJN88..~43 Enclosures xc:
(w/ one copy of non-proprietary enclosure)
Mr. Morton B. Marguiles, Esq., Chairman Administrative Judge Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Ms. Diane Curran, Esquire Harmon, Curran, Gallagher, & Spielberg 2001 S Street, Nr' Suite 430 Washington, DC 20009-1125 Mr. R. Wascom Office of Air Quality and Radiation Protection Louisiana Department of Environmental Quality PO Box 82135 Baton Rouge, Louisiana 70884-2135 Ms. Nathalie Walker Sierra Club Legal Defense Fund 400 Magazine Street Suite 401 New Orleans, LA 70130
O AFFIDAVIT OF PETER G. LeROY Page I L
I am the Licensing Manager of Imuisiana Energy Service, L.P., a Delaware limited partnership ("LES"), and as such have the responsibility of reviewing proprietary information sought to be withheld from public disclosure in connection with licensing (including license applications, pre-application discussions and related submissions) or rule-making proceedings concerning uranium enrichment facilities.
I am duly authorized to apply for withholding of such proprietary information from public disclosure on behalf of LES.
2.
I am making this affidavit in conformance with the provisions of 10 C.F.R. 02.790 of the rules and regulations of the Nuclear Regulatory Commission (the "NRC")
and in conjunction with LES' application for withholding which accompanies this affidavit.
3.
I have knowledge of the criteria used by LES in designating information as proprietary or confidential.
4.
The information sought to be withheld from public disclosure is indicated in the accompanying proprietary copy of the First Amendment to. Agreement of Limited Partnership of Louisiana Energy Services, LP. dated as of May 15,1993, and marked "Propiictary" (the " Partnership Agreement"). The basis for LES' claim that such information is exempt from mandatory public disclosure is that such information constitutes " trade secrets and commercial or financialinformation obtained from [LES which is]...... privileged or confidential" and is, therefore, exempt from disclosure pursuant to Section 552 (b)(4) of the Freedom of Information Act,5 U.S.C. 6552, as amended, and applicable NRC regulations.
5.
Pursuant to the provisions of paragraph (b)(4) of 10 C.F.R. s2.790, the following is furnished for consideration by the NRC in determining whether the information sought to be withheld from public disclosure should be withheld.
(i)
The information sought to be withheld from public disclosure is owned by LES and has been held in confidence by LES, its partners and consultants.
(ii)
The information is of a type that would customarily be held in confidence by owners and originators, including LES. There is a rational basis for such confidential treatment since the information consists of trade secrets -
and commercial and financial information that is of competitive importance to LES and the disclosure of which would provide an unfair competitive fb $ &
Peter G. LeRoy "
(continued) x
a AFFIDAVIT OF PETER G. LeROY Page 2 advantage to LES' competitors, i.e.:
(a)
Disclosure would reveal information with substantial commercial value to LES; and i
(b)
Disclosure of such information would raise a substantial risk of facilitating back-calculation by LES' competitors of anticipated pricing of LES' services or of revealing LES' marketing plans, which would cause LES competitive harm.
These factors are examined in more detailin paragraph 6 below with respect to each portion of the information for which non-disclosure is sought.
(iii)
The information has been and is being transmitted to the NRC in confidence and, under the provisions of 10 C.F.R. f2.790, :t is to bc received in confidence by the NRC.
(iv)
The information sought to be protected is not available in public sources to the best of LES' knowledge and belief.
(v)
As discussed in detail in paragraph 6 below, the proprietary information sought to be withheld from public disclosure has subsiantial commercial value to LES and includes information relating to such matters as cost estimates for construction of LES' production facility, costing formula for pricing of output, commitments for facility output, marketing strategy and parameters, and the extent of commitment of each partner in LES with respect to the foregoing. Such information is especially sensitive because it relates to anticipated pricing of LES' services, LES' overall marketing strategy and factors affecting or involving its marketing plans. Public disclosure of this information is likely to cause substantial harm to the competitive position of LES because it would allow competitors in the uranium enrichment industry to deduce LES' cost and pricing information, as well as marketing plans and expectations. LES (including the partners i
therein) expended considerable time, money, and effort in developing such information, including expenditures for legal advice, time spent by technical, economic and financial staff in generating various estimates, forecasts and technical data, and managerial time spent negotiating the fb $ Y Peter G. LeRoy CT (continued) t
I AFFIDAVIT OF PETER G. LeROY Page 3 terms of the joint venture reflected in the Partnership Agreement. Given this investment in the project, such information (and its non-disclosure to competitors) has considerable value to LES. Moreover, it is believed that LES' competitors could not readily acquire such information without improper and unlawful access to LES' internal information, and equivalent information could not be generated by the competitors without expenditure of similar effort and expense. For these reasons, revealing such i
information to LES' competitors would give such competitors an undue competitive advantage.
6.
LES believes that its competitors or potential competitors consist of the following entities: (1) Eurodif (France) whose marketing in the U.S. is done through l
Cogema, Inc., an affiliate of Eurodifs parent corporation; (2) the U.S.
Department of Energy and/or the United States Enrichment Corporation;(3) i Techsnabexport (Russian state enterprise); (4) CNEIC (state-owned company of Peoples Republic of China); and (5) other potential market entrants using emerging separation technologies, such as lasers and chemical separation. In addition, a number of traders and brokers are actively re-selling in the U.S. excess stocks, over-purchases, SWU credits, etc., obtained from the above producers.
LES clearly is a competitor of each of the entities named above, since all of those entities are in the business of providing uranium enrichment or equivalent services and the number of entities competing to supply such services in the U.S. market is relatively small in number. As described in subparagraph (v) of paragraph 5 above, the First Amendment to the Partnership Agreement contains commercially sensitive financial and other information which customarily is treated as confidential by LES and virtually all similarly situated entities. If released, such information wouM provide LES' competitors with an unfair competitive advantage which would likely result in significant damage to LES' competitive position.
Specific portions of the First Amendment to the Partnership Agreement indicated in the accompanying proprietary copy of that agreement marked " Proprietary" are entitled to the exemption from public disclost.re for the foregoing reasons and as further detailed below.
(i)
(Sections 9.1 - Competition and 9.2 - Marketing) These sections of the First Amendment to the Partnership Agreement should be withheld from public disclosure because they describe,in detail, a portion of the Y
Peter G. LeRoy f
(Continued)
AFFIDAVIT OF PETER G. LeROY Page 4 marketing plans of LES, including marketing parameters, provisions to handle capacity shortfalls and information regarding the status, rights i
and/or obligations of the utility partners of LES as customers or potential customers. Knowledge of this information by LES' competitors would enable such competitors to ascertain certain of LES' production and marketing parameters,its marketing strategy, and the level of commitment by the utility partners to purchase output of the venture (as well as the pricing parameters applicable thereto). From this information the competitors also could derive LES' cost and pricing strategies. They could then formulate their own marketing and price strategies in response to the competitive challenge posed by LES. This is highly proprietary information of great commercial value to LES. Obviously, to allow the competitors i
such knowledge concerning LES would cause substantial damage to LES' competitive position and likely would have significant anticompetitive effects in the marketplace for uranium enrichment services.
(ii)
(Section 11.1(f) - Venture Phase Capital Commitments - Waiver of Rights)
This section of the First Amendment to the Partnership Agreement should i
be withheld from disclosure because it contains confidential financial information concerning funding of the project during the preconstruction venture phase, e.g., the procedures for making additional capital calls on the partners to fund venture phase activities. Unlike many applicants for NRC licenses, LES is not a corporation whose shares are publicly traded and whose financial statements are a matter of public record. LES is a privately-owned entity whose financial information is not required by law to be publicly reported. This kind of sensitive financialinformation should be regarded as proprietary to LES and should not be revealed to its f
competitors. Competitors could use such information to estimate the time of market entry by LES. Accordingly, this information (and its non-disclosure) has significant commercial value to LES and disclosure of the l
same to competitors could result in serious harm'to LES' competitive position, since competitors would be aided in formulating responses to anticipated market entry by LES.
i (iii)
(Section 13.1 - Conditions for Continuation) The information contained in this section should be withheld from public disclosure because it sets forth, in detail, the conditions applicable to the partners' decision whether or not to go forward with the project at the conclusion of the preconstruction (i.e.
f W&
Peter G. LeRoy
(continued)
AFFIDAVIT OF PETER G. LeROY Page 5 4
I venture) phase, as well as the procedures for changes in participation in the venture. Such information is of considerable commercial value to LES and could be used by a competitor to the detriment of LES because the competitor (A) would know precisely what factors bear on the partnership's decision whether or not to proceed, (B) could seek to exert influence on one or more of those factors in order to influence that decision, and (C) would ascertain the possible effect of changes in participation in the j
venture on the market position of LES. Consequently, disclosure of this information could have a significant adverse impact on the competitive position of LES.
(iv)
(Section 13.4 - Effect of Transfers and Redemptions) This information should be withheld from disclosure because it would reveal to competitors the extent to which changes in participation in the venture might, under i
some circumstances, alter fundamental project financial planning and commitments. A competitor could use this information to calculate possible changes in the costing / pricing parameters applicable to LES' output or to exploit n.arketing pressures generated by the same.
Consequently, possession of this information by a competitor would be likely to cause LES si;;nificant competitive harm.
(v)
(Section 15.2 - Redemption by Utility Partners) Disclosure of this information could have a significant adverse impact on the competitive position of LES and it should be withheld for the same reasons as set forth i
in subparagraph (iv) above.
t (vi)
(Exhibit C - Term Sheet for Centrifuge Supply Agreement) The term sheet describing the terms under which Urenco will supply LES with centrifuges i
and related equipment for carging on uranium enrichment operations is highly sensitive and constitutes proprietary information. The performance standard information contained therein would afford competitors valuable i
insight into an important trade secret owned by Urenco (and licensed to LES) - Urenco's gas centrifuge technology. That insight could be useful in calculating estimates of LES' capacity, electric power usage and production efficiencies. Moreover, the data contained in the term sheet with respect to the cost to LES for Urenco's supplying, installing and maintaining the r
centrifuges and ancillary equipment would be useful to competitors in back-calculating probable costs and pricing for LES' uranium enrichment Y
Peter G. LeRoy (continued) i
AFFIDAVIT OF PETER G. IxROY Page 6 services.
(vii)
(Exhibit D - Term Sheet for Longterm Supply Contracts) This portion of the Partnership Agreement concerns the commitments of LES' utility e
partners to purchase uranium enrichment services from LES and the pricing parameters for such purchases. Disclosure of this information would cause serious harm to LES' competitive position and would afford its competitors with an undue competitive advantage by revealing to those competitors critical information concerning (A) costing estimates for LES' production of uranium enrichment services,(B) pricing of such services to the utility purchasers (and others), and (C) LES' production capacity and
^
existing commitments for that capacity. This information would enable the competitors to forecast LES' market penetration capabilities,its profitability margins,its uncommitted capacity and its relative strengths with respect to market pricing variations. The competitors also would be able to deduce LES' baseline profitability and pricing and production cost parameters.
This type of detailed and highly sensitive commercial /financialinformation should not properly be made available to any competitor for the obvious reason that it would seriously damage the competitive position of the owner of the information vis a vis that competitor and could have serious anticompetitive effects in the marketplace in general.
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Peter G. LeRoy t
(continued)
AFFIDAVIT OF PETER G. LeROY Page 7 i
Peter G. LeRoy, being duly sworn, states that he is the Licensing Manager of Louisiana Energy Sewices, LP., a Delaware limited partnership ("LES"); that he is authorized on the part of LES to sign and file with the Nuclear Regulatory Commission this information and attachments thereto; that all such statements made and matters set forth herein are true and correct to the best of his knowledge or belief.
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l Peter G. lxRoy Subscribed and sworn to me this 48 th day of May 1993.
M e I,% M h Notary Public My commission expires /z/W / W
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