ML20058E173
| ML20058E173 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 10/31/1990 |
| From: | Curran D HARMON, CURRAN, SPIELBERG & EISENBERG, LLP. |
| To: | Scinto J NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| References | |
| NUDOCS 9011070056 | |
| Download: ML20058E173 (4) | |
Text
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HARMON, CURRAN & TOUSLEY
"-m 2001'S STREET,N.T
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SUITE 430-WASHINGTON, D.C.'20009 t 125 '
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TELEPHONL '
c Gall McGRED'YJtARMON (202) 328 3 % 0-
- DIANE CL'RRAh' 5
FAX i<
DEAN R. TOL!sLEY.
(262)328 6918
, ANNE SPIELBERG.
) ANNE G -GA.LLAGHER g" '
5ANDRA K PFAL' Of Coumel ~
' ERIC R GLITZENSTEIN
, KATHERINE A MEYER y
Jos'eph Scinto. Esq.
Office of General Counsel U.S. Nuclear Regulatory Commission.
Washington D.C.120555 y.
SUBJECT:
Seabrook Decommissioning Bond L
Dear Mr. Scinto:
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. LYou may recall that I called you a few months ago to verify a report I had received,-
-to the effect that EUA Power had obtained the release of its $10 million decommissioning i
l bond for Sethrook,~in order to'make an interest payment due in May.of 1990. After making some inquiries, you called'me back to inform me that you knew of no such release.
J
... I recently received a copy of EUA Power's " Form 10-0," filed with the Securities and Exchange Commission on August 14,1990. The report states at page 6 that EUA Power made a Ma ^15,1990 interest payment "with proceeds from short-term borrowings
' from EUA= EUA ower's parent comp and the release of a $10,000,000 decommission-w' ing fund (w 1ich had been established b A Power to secure hs Seabrook obligations '
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'with respect to up to $10 million of decommissioning expenses and any cancellation costs) in exchange for a guaranty of that obligation by EUA." A copy of the relevant pages is enclosed.-
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- ' As you know, eight months ago the Commission denied Intervenors' motion for a '
4 of full power operation of the Seabrook reactor, based in part on the existence of a 4
l stad'.1 million surety bond issued by the Aetna Casualty and Surety Company. CLI 90 3,31
'S7 NRC 219,259 (1990. 'l '. statements made in EUA Power's Form 10-Q raise obvious
. questions as to whet er the bond is still effective; I would a f
, soon as possible regarding the m.tus of the security bond.' ppreciate hear V
"1 Sincerely,
/
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. Diane Curran q
L cc:LSeabrook service list A
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' SECURmES AND EXCHANGE COMMISSCN
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'; ACT OF 1934 eq June 30,1990
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~ For the quarterty perted ended
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-[ } TRANSmON REPORT PURSUANT TO SECTIO 413 OP. IS(d) OF THE SECURm
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Cw.N. Fue Number SS 10978 HfC ! 7 l990 m
'EUA POWER CORPONATION /r. '
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.. (asect name os regiswam as specineet kuts charmr)
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on-osessi1
- ew Hampendre
.R.S. Empioyer dm
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j(state x other priemeson of p
p leerttificapon No.)
' hisistien or organtaanon) q l:
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. ' } Forty Stark Street, P.O. Son 326 c
-a 0310S'
- * ' Manchester, New HampeNre V
(Zip Code) j ' N.] g (Address of principal asocutfve offices) u y,['
(617)357-9590
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,, ' Registrant's telephone number includog area code t
Linecate by check mark whether the registrant (1) has filed all reports required to be fued by Section I a: p/13 or iS(d) of the Securfoes Exchan0s Act of 1934 during the preceding 12 months (or for such La >. g M Lshoftet period that the repletrant was required to file such reports), and (2) has been subject to such -
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[filino regulfements for the pas' 40 days.
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'YES X
NO
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Indcate the number of shares outstandng of each of the lasuer's classes of common stock, as of the L
IQtest pracocal date.
OvisEW.g at July 31.'1990 Class 10,000 shares.
Common Shares. 8.0t par value
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Note B - Contirgencies:-- (Contimed) 0 to Unit No. ' 1, M
certain issues with respect the continued effeetive-u f a@ealsJ relating to'1Aich, if; adversely decided. could 1.gact predict. the outecce of 4
ness of: the 1.icense.-
The Company cannot n
these proceedings.
b DR Power's Seurook Interest:
h 25, 1986,- DR Power has pr ncipally Since-its inception on Novemberbeen engaged in the acquisitio 1
hip e
M EUA Pcwer
. Under the Seabrook Joint Ownership Agreecent,its - shar
-l interest.
P EUA's k
~ is requiredito acceptall? operating costs of power generated from' the p E;
. recovery-of its ' invest: ment in EUA Power ll its er's ability. to enter into long-term. sales. contracts T
E ll er its investment.
'Mr England 3
~EIR Power is, actively merketing its Seabrook capacity inD p
_ New En6 and Power Pool planners O
Land'New York.t 1
have < projected that with a conservatise anmal growth rate of 2 ing projectionsL in recent years.-
capacity beyond that L
significant; arounts of additional generating ll be ;recpired by the Seabrook Unit 1)- wiit will ultimately enter. into -
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.already planned (includin6 EUA Power believas that j
- long-term sales contracts at prices sufficient to recover its' inve ff mid-1990s.,
the timing of these contracts.
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' ment, although it. camo.t predict Upon connurcial operation of Seabrook, it.is.likely that EUA l
will' be. selling short-term capacity at rates lower than.its actua n-L
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costs..
ffer
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' Beginning in MayJ1988; EUA Power made a successful exchang 3
pursuant' to which EUA Power. currently' h I.
00 e
p due 6
'(the full' authorized amount)Lof 17-1/21 Series B Sec E
of a
1993l and :S99,597,200 (out of. S100,000,000 authorized)
V ;;f 17-1/21 SeriesL C Secured Notes due:Novunber 15,1992. (col j
-_May 315,1 j
lt The terns. of the Notes provide, anong. other things, 4
Notes.
I interest umy' be paid' in; cash or additional Series - C the Notes).
During 1989 and'1988 all interest was paid by i
j that s
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which would otherwise have been paid in cash.
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' Although. EUA Power expects to generate sufficient revenu 1
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r L
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future fzun the sale of elecer.
e available for payment of the on the' Notes, no such revenues s Accordingly, EUA Power L
interest ' installment due - on May la, 1990.
- sought, L
1
'and its parent Campany, Eastern Utilities Associates (EUA d
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and on April-30, 1990 any Exchange Comission (SEC) under the Public. Utility Holding tions that led
-Act of 1935 for several proposed financing transacinterest installment and 15, 1990 j
EUA. Power to pay in cash the Mayits obligations and working capital should enable EUA Power to tneet 15, 1991 including payment requirunents for the period through May l, -
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lNckeB-Ceniingencies--(Continued) in cash of the interest - to becme due on the Notes. - Utilizing part--
1'S i
15, 1990 interest
~ of. the SEC authorization. EUA Power made the May
- paymentivithE proceeds from short-term borrcvings frcxn EUA and the deccanissioning fund (which had been estab-
- release'of a1S10,000,000 EUA Power to secure its Seabrook obligations with respect L
lished by $10-millicm of decanutssioning expenses and any cancella--
L to up to tion costs) in exchange for. a guaranty of that obligation by EUA.
1 Other ifinancing transactions authorizei:1 by the SEC include capital contributions ? and open-account advances by EUA,' and short-term bor-rowings. by EUA Power from others which would be guaranteed by EUA, on~the anount of financing from
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vith an overall limit _of $75,000,000 external sources through one or any ccrsination of the authorized J
EUA is under no -
transactions to' be outstanding at any one time.
J obligation to make any further loans or any capital contributions or
[
. open-account. advances to, or to purchase any stock from, EUA Power, or.to guarantee any of its obligations.
. As'part of the W88 exchange-of Notes, EUA Power also offered Contin-i gent: Interest 1 Certificates. evidencing the right to receive addition-ent upon and-measured by EUA Power's inccxne in certain years foll the r==rcial operation of Unit 1.
Addi-al-payments cont L
. tionally, : as : of June.
- 1990. EUA Power has issued S63,090,000 of.
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251 preferred stock _ ($100 par value) to EUA.
Should EUA Power be J
unable. to ultimately ; enter into long-term sales contracts which t
to cover its costs, EUA Power may-be
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provide tsufficient' revenue L
unable to make interest payments, and to. make princial payments, on 1
t its Notes' described above.
Such Notes are solely tw obligation of r
EUA Poweriand are not guaranteed by EUA or 'any other person.
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Accounting Change:
1,11988, 'EUA Power icplemented Financial Account-l:>
l Effective January 0 (FAS,90)..' Regulated Enterp" rises - Accounting for
.j ing-Standard nod 9 FAS 90, among other L
Abandorments -and Disallowances of Planc Costs.
things, requires that' Allowance,for _ Ibnds Used. During Construction I
should be. capitalized - only -if ' its inclusion in allcwable J
(AFUDC) costs for. rate diar purposes is probable. = As discussed'above. EUA p
Power has not antared into 'any power contracts for the sale 'of ics
~
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share of the electricity nto be generated by Seabrook~ Unit 1, there-4 fore, it is _ uncertain at this time whether all' of its allowable p
costs vill-be recovered.
Thus, FAS 90 mandates that the. recording of a portion of AFUDC.for financial reporting purposes be. deferred.
q"o If and when EUA Power enters into long-term power sales contracts at prices sufficient-to recover its investment, all or a portion of any restored to earnings.
For ' the l
AFUDC previously. deferred may be the deferral of AFUDC reduced EUA H
twelve conths ended June 30, 1990,'
- Powr's net. inccen by $27.9 million.
Since the inplementation' of FAS'90 through June 30, 1990, approximately $58.8 mil?. ion of AFUDC related to EUA Power's investment in Unit 1 has been deferred.
Additional anounts of AFUDC vill be cieferred until the ccamercial operation of Seabrook.
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