ML20055H812
| ML20055H812 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 07/26/1990 |
| From: | Office of Nuclear Reactor Regulation |
| To: | |
| Shared Package | |
| ML20055H811 | List: |
| References | |
| NUDOCS 9007300122 | |
| Download: ML20055H812 (4) | |
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1 SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION i
SUPPORTING ~ AMENDMENT NO. ? TO FACILITY OPEPATING LICENSE NO. FPF-86 PUBLIC SERVICE COMPAHY OF HEW HAMPSHIRE SEABROOK STATION. UNIT 1 DOCKET NO. 50-443 I
1.0 INTRODUCTION
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By letter dated April 23, 1990, as supplemented by letters dated April 26 and l{
June 6,1990, Public Service Company of New Hampshire (the licensee), requested an amendment to Facility Operating License No. NPF-86.for Seabrook' Station, Unit 1 (Seabrook or the facility). The proposed amendment would revise Facilit Operating-License No. NPF-86 to-allow the United Illuminating Company (UI)yto' enter into an arrangement for the sale and leaseback of a portion of their_
financial interest in Seabrook to-certain equity investors. The license.
':i amendment would be subject to the condition that neither the Owner Trustee,
.l Meridian Trust Company, nor-the equity investors could exercise any control, either directly or indirectly, over (i) Seabrook Station Unit 1,(ii)powerand.
1 energy produced by Seabrook Station,~ 0 nit 1, or-(iii) the licensee of Seabrook
. Station, Unit 1.
The licensee, through its New Hampshire Yankee Division, would continue its present responsibility as the sole licensee authorized to operate-a' and maintain the plant and would remain exclusively responsible for all safety l
decisions.
The June 6, 1990 submittal identified the Owner Trustee.
This supplemental i
information did not change the action or affect the initial determination published in the Federal Register, on May 30, 1990, i
2.0 EVALUATION Operating Considerations i
s The proposed amendment to the license to reflect the sale and leaseback transaction would not result in any physical changes to the facility.
In addition, all Operating Procedures, Limiting Conditions for Operation, Limiting' Safety System Settings and Safety Limits as specified in the Technical Specifications to Facility Operating License No. NPF-86 will remain unchanged.
3 Therefore, the 2
staff concludes that the facility conditions for which the desigr. bases and accident analyses were performed continue to be valid.
Public Service Company of New Hampshire, through its New Hampshire Yankee Division, will continue to be responsible for the safe operation of the facility.
No changes will be made to the operating organization or the personnel at the facility as e ' lult of the proposed sale and leaseback transaction. Therefore, the staff exp cs the sale and leaseback transaction will have no adverse impact on the safe operation of the facility.
i 9007300122 900726 PDR ADOCK 05000443 P
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Financial Considerations The proposed amendment would allow UI to sell 39% of its 17.5% ownership share in Seabrook for fair market value to the Meridian Trust Company which will act as Owner Trustee under one or more grantor trust agreements.
The beneficiaries of the trusts will be nne er more equity investors, i.e., financial institutions or institutional investors.
title to the Undivided Interest conveyed. The Owner Trustee will hold legal Concurrently, the Owner Trustee will lease back to U1 the Undivided Interest under separate but substantially identical leases for a term of up to 32 years for a stipulated basic rent.
At the end of the base term, UI will have the option, but not the obligation, to renew the lease or purchase the Undivided Interest at then fair market value.
As structured, the net lease terms provide that all capital and other cost.
decisions remain with UI and the other plant owners. Thus, Ul as lessee, is etsponsibleforitsproportionateshareofthecostsofoperatIonand n intenance of Seabrook, including insurance, taxes, assessments and other charges and liabilities relating thereto, such as decomissioning, fuel procurement, spent fuel disposal and rebuilding.
U1 is also responsible for a like share of any necessary capital improsements or repairs.
During the lease term,ith the right to sell and dispose thereofUI will rece the leased interests w Thus, the source of funds needed to safely maintain the licensed activity will continue to be the revenues generated by the sale of electricity from Seabrook.
Funds will be generated both from the 39% of VI's share of Seabrook that it will sell and lease back as well as the 61% of UI's share not subject to the proposed transaction.
Therefore, the staff concludes that the proposed amendment does not adversely effect the source of funds for conducting the licensed activity and for complying with NPC requirements. Accordingly there are no financial qualification concerns that impact the staff's approva,l of the proposed amendment.
The proposal like previous sale /leasebeck transactions approved by the IsamechanismforUItorefinancecertaincapitalcostsinreturn Commission foracommItmenttomakeleasepaymentsoveraspecifiedperiod.The proposed sale / leaseback transaction has been initiated to resolve certain existing financial constraints under which U1 operates and thus improve UI's financial condition and quality of credit. The proposal provides substantial tax b Mefits to those purchasing part of UI's share of Seabrook.
The staff believes that there will be no financial consequences adversely affectino safety from allowing Ul to enter into an arrangement for the sale and leasebcck of a portion of their financial interest in Seabrook.
The economic benefits which UI and the equity investors anticipate from the transaction are not expec'.ed to be gained at the expense of public health and safety given UI's i
continuing comitment to pay its prgnrtionate share of costs associated with j
Seabrook (as described previously). Thus, the staff concludes that the
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financial consequences of the proposed action will not adversely affect the protection of public health and sa'ety.
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t Antitrust Considerations The proposed amendment retflects a change in the legal title of a portion of UI's Ownership Share of Seabrook. However, the transferee of the legal title will lease that interest back to UI, which will receive the capacity and energy assochied with that Ownership Share. The Equity Owner, by virtue of the lease, will have no right to that capacity and energy. Therefore, there will be no change in the status quo of the market for electric energy effected by the proposed emendment to the Operating License.
Since UI's participation in Seabrook has already been reviewed as part of the original antitrust review of j
the facility, the staff has determined that there is no need for a further antitrust review under Section 105 of the Atomic Energy Act (M U.S.C. 2135).
Restricted Data The licensee has addressed the issue of safeguarding restricted data and other defense information and VI and the Owner Trustee egree t9 the appropriate conditions of protection and processes.
The application does not contain any restricted data and it is not expected that any such information will become involved in the licensed activities. However, in the event that such information does become involved U1 and the Owner Trustee agree that they will appropriately safeguard such information. Therefore the staff expects no reduction in the understandingorresponsibilityforsafeguardingrestricteddata.
Foreign Ownership Considerations Sirme the identity of tM :quity investors is not currently known, it is possible that such equity investors in the proposed transaction may be " owned",
" controlled" or " dominated" by a foreign corporation within the meaning of Section 103d of the Atomic Energy Act. The staff addressed this issue in Policy Paper SECY-85-367 (November 20,1985), which was endorsed by the Comission in its Order dated December 12, 1985 (CL1-85-17, 22 NRC 875). The Staff position is that if a licensing requirement w&S not imposed upon the equity investors, then the prohibition of Section 103b need not be addressed.
In its Order, the Commission consented to the staff position, subject to the condition that "the lessor and anyone else who may acquire an interest under the transaction... are prohibited from exercising directly or indirectly any control over the licensees..." Id. at 876.
Since this license amendment is subject to the condition that heither the Ownec Trustee nor the equity investors could exercise any control either directly or indirectl or (iii) y over (i) the facilityIlity, the staff has found %et the prtMbition(i the licensee of the fac of Section 103d of the Atomic Energy Act need not bo addressed, 3.0 CONTACT WITH STATE AND OTHER OFFICIALS The proposed transaction was approved by the Connecticut Department of Publi:
Utility Control as required by the laws of the State of Connecticut on June 8,
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The proposed transaction was approved by the New Hampshire Public Utilities Commission as required by the laws of the State of New Hampshire on July 9,1990.
l No comments were received on the no significant hazards considtration.
4.0 EMytRONMENTAL CONSIDERATION Pursuant to 10 CFR 51.21, 51.32 and 51.35, an environmental assessment and finding of no significant impact was publisted in the Federal Register on July 25, 1990,(55FR30329).
5.0 CONCLUSION
Based upon its evaluation of the proposed amendment, the staff has concluded that:
(1) there is reasonabic assurance that the health and safety of the public will not be endangered by operation in the proposed manner, and (2),
such activities will be conducted in compliance with the Commission's regulations and the issuance of this amendment will not be iniminal to the common defense and security, or the health and safety of the public.
Dated: July 26, 1990 Principal Contributors: Eric Leeds. Robert Wood P
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