ML20115D177

Amend 1 to Application for CPPR-96,authorizing Change in Ownership of Facility

ML20115D177
Person / Time
Site:	05000363
Issue date:	08/16/1977
From:	JERSEY CENTRAL POWER & LIGHT CO., METROPOLITAN EDISON CO., PENNSYLVANIA ELECTRIC CO.
To:
Shared Package
ML20115D166	List: ML20115D177
References
FOIA-96-199 NUDOCS 9607150040
Download: ML20115D177 (54)

Text

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< UNIifED STATES:OF AMERICA NUCLEAR REGULATORY _ COMMISSION In the Matter of )

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JERSEY CENTRAL POWER & LIGHT ) Docket No. 50-363 COMPANY, ET AL. )

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(Forked River Nuclear Generating ) ,

Station, Unit 1 )

AMENDMENT NO. 1 TO APPLICATION FOR AMENDMENT OF CONSTRUCTION PERMIT FOR FORKED RIVER NUCLEAR STATION,

• UNIT 1 (CPPR -96)

Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company have filed an application dated March 29, 1977, for amendment of the construction permit for Forked River Nuclear Station, Unit l>

to authorize a change in ownership of the facility. This Amendment No. 1 to the application consists of an Amendment, dated August 10, 1977, to the related Application-Declaration filed with the Securities and Exchange Commission on January 13, 1977, and submitted to the NRC as Attachment A to the Application.'

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JERSEY CENTRAL POWER & LIGHT COMPANY )

Attest: 1

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President

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Secretary Sworn to and subscribed before me this /5 :1 day of August 1977, a r -' / -

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Notary Public I 9g g' VERONICA A. GEARHART NOTARY PUBUC OF NEW JERSEY us c ~ i e uoi- s , w. m 1 f'

9607150040 960703 PDR FOIA /'

DEKOK96-199 PDR

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, .- METROPOLITAN EDISON COMPANY i

Attest:

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President b

Secretary .

I Sworn to and subscribed before me this //, d day of

August 1977.

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, NOTARr FUSUC 0F NEW JERSEY My Cammisaan Excires May 10,133' PENNSYLVANIA ELECTRIC COMPANY i i

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Attest:

a h s' rs ent Sworn to and subscribed before me this / / t'5 day of

, August 1977.

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Notary Public i VERONICA A.GEARHART j NOTARY PUBUC OF NEW JERSEY j My Commission Expires May 10,19871  ;

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Amendment No. I to Declaration docketed in SEC File No. 70-5951 I

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM U-l APPLICATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("ACT")

JERSEY CENTRAL POWER & LIGHT COMPANY ("JC)"

Madison Avenue at Punch Bowl Road, Morristown, N. J. 07960 METROPOLITAN EDISON COMPANY ("ME")

2800 Pottsville Pike, Reading, Pa. 19603 PENNSYLVANIA ELECTRIC COMPANY ("PE")

1001 Broad Street, Johnstown, Pa. 15907 *

(Names of companies filing this statement and addresses of principal executive offices)

GENERAL PUBLIC UTILITIES CORPORATION ("GPU")

260 Cherry Hill Road, Parsippany, N. J. 07054 (Name of top registered holding company parent of each applicant or declarant)

Mr. E. C. Schoener W. T. Osborne, Esq.

Secretary and Treasurer General Attorney Jersey Central Power & Light Comnpany Jersey Central Power & Light Company Madison Avenue at Punchbowl Road Madison Avenue at Punch Bowl Road Morristown, New Jersey 07960 Morristown ,New Jersey 07960 Mr. R. B. Heist, Secretary S. B. Russell, Esq. <

Metropolitan Edison Company Ryan, Russell & McConaghy l 2800 Pottsville Pike Suite 304 Colonial Trust Bldg.

Reading, Pennsylvania 15907 Reading, Pennsylvania 19601 ,

Mr. W. R. Thomas H. N. Platt, Jr., Esq.

Secretary and Treasurer Ballard, Spahr, Andrews & Ingersoll Pennsylvania Electric Company 30 South 17th Street

]"01 Broad Street Philadelphia, Pennsylvania 19103 Jo,hnstown, Pennsylvania 15907 Mr. F. D. Hafer, Treasurer J. B. Liberman, Esq. l General Public Utilities Corporation Berlack, Israels & Liberman l 260 Cherry Hill Road 26 Broadway I Parsippany, N. J. 07054 New York, New York 10004 i

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JC, ME and PE hereby amend their joint declaration under the Act docketed in SEC File No. 70-5951 in the following respects:

1. By deleting Section 1.04 of the answer to Item 1 of the declaration as originally filed and substituting therefor the following:

"1.04 The sale prices received by ME and i PE for the interests in TMI #2 sold by them to JC will be the book cost, including allowance for funds used during construction ("AFC"), of the interests so sold by them to JC as such book cost shall exist at the date of each sale, adjusted in the following respects:

(a) The amount of the Pennsylvania Public Utility Realty Act ("PURTA") taxes paid or payable to the date of the final sale which is applicable to the interests in TMI #2 being sold by ME and PE to JC is the subject of a dispute with the Commonwealth of Pennsylvania. In the view of ME and PE, the appropriate aggregate amount of such PURTA taxes is approximately

$150,000, and their respective book costs for the interests in TMI 82 being sold by them to JC will be adjusted to reflect PURTA taxes in this

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amount. If, howqver, it should ultimately be determined that additional PURTA taxes, interest ,

thereon or other associated costs are payable with respect to the interests in TMI #2 sold to JC pursuant to this declaration, JC will promptly reimburse ME and PE for such additional amounts.

(b) The sales of interests in TMI #2

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by ME and PE to JC will give rise to Pennsylvania 4

income tax payable by ME and'PE over the tax life of TMI #2. The aggregate amount of such Pennsylvania 1

income tax is estimated at approximately $5,700,000 l and the related Federal income tax reductions attributable thereto are approximately $2,700,000, resulting in an aggregate net cost to ME and PE for I

such Pennsylvania income taxes of approximately

$3,000,000 payable over the 16-year tax life of TMI

1. 2. The present value of this amount, adjusted to reflect the additional Pennsylvania tax on such reimbursement, is approximately $2,000,000. The amount payable by JC to ME and PE for their interests in TMI #2 to be sold by them to JC will include the sum of $2,000,000 to make provision for reimbursement )

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to ME and PE for this cost." l i

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2. By deleting Section 2.04 of the answer to Item 1 of the declaration as originally filed and substituting therefor the following:

"2.04 The sale prices received by JC for the interests in FR sold by it to ME and PE will be the book cost, including AFC, of the interests so sold by it to ME and PE as such book cost shall exist at the date of each sale, adjusted in the following respect:

(a) In determining JC's cost of construction of FR, varying portions of JC's investment in FR have been included in rate base for varying periods in accordance with orders of the Board of Public Utility Commissioners of the State of New Jersey ("NJPUC"). The costs shown on JC's books in respect of the interests in FR to be sold by JC to ME and PE shall, for the purpose of calculating the price to be paid for such interests by ME and PE, be increased by an amount equal to the AFC which would have been accrued if none of JC's investment in.FR had been included in JC's rate base."

. 3. By deleting Section 4.01 of the answer to Item

' 1 of the declaration as originally filed and substituting therefor the following:

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"4.01 JC, ME and PE own undivided in-terests in Unit No. 1 of the Three Mile Island nuclear generating station (TMI #1), which was placed in service on September 2, 1974, in the following proportions:

JC -- 25%

ME -- 50%

PE -- 25%

The proposed transactions will not affect interests in TMI fl. There are certain facilities at TMI that will be used in common for TMI #1 and TMI 12. In its rate orders relating to Penelec (entered June 10, 1976) and Met-Ed (entered July 7, 1976), The P onsylvania Public Utility Commission ("PaPUC") held that the interests of ME and PE in 1

an aggregate of $5,282,000 of the facilities used in common '

for TMI #1 and TMI (2 as at September 2, 1974 (the date when TMI il was placed in service) were applicable to TMI i 2 and should be excluded from the respective rate bases of ME and l PE and should accrue AFC from September 2, 1974 until TMI i 2 is placed in commercial service. Pursuant thereto, the book l

costs of the undivided interests of ME and PE in such common I facilities which are to be sold by them to JC as a part of TMI $2 will reflect such continued AFC accruals."

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4. By deleting Section 4.02 of the answer to Item 1 of the declaration as originally filed and substituting therefor the following:

"4.02 JC owns 100% of the Oyster Creek nuclear generating station ("0C"), which was placed in commercial service on December 23, 1969. JC has, since December 23, 1969, included as part of its investment in OC certain lands and buildings which are to be used as a part of FR. (JC's investment in such lands and buildings at May 31, 1977 approximated

$350,000.) The costs shown on JC's books in respect to the interests in FR to be sold by JC to ME and PE shall, for the purpose of calculating the price to be paid for such interests by ME and PE, be increased by an amount equal to the AFC which would have been j l

accrued if JC's investment in such land and buildings  ;

1 had always been treated as a part of FR."  ;

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5. By filing the following as the answer to Item 2:

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"A. JC will bear one-half of the out-of-pocket costs, including transfer taxes, involved in transfer to JC of the interests in TMI #2 covered by this declaration and ME and PE shall each bear (and capitalize as a portion of the interests in TMI #2 which they shall retain) the remaining half of such costs involved in their respective transfers.

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4 "B. ME and PE will each bear one- )

quarter of the out-of-pocket costs, ir;1uding transfer taxes, involved in conveying to eac!. of them the interests in FR covered by this declaration and JC shall bear (and capitalize as a portion of the interest in FR which it shall retain) the remaining half of such costs involved in such transfers.

"C. The estimated amount and details of the fees, commission and expenses involved in the transactions covered by this declaration will be filed by amendment."

6. By filing the following exhibits: .

B-2 - Agreement, dated July 27, 1977 between JC, ME and PE, terminating the Agreement dated December 16, 1976, between them.

B Agreement, dated July 27, 1977, between JC, ME and PE providing for the transaction covered by this declaration.

D Petition of JC to NJPUC D-1(a) Order, dated August 4, 1977, of the NJPUC D-2 Letter, dated August 3, 1977, of Messrs. Ryan, Russell & McConaghy, filing the Agreements, dated July 27, 1977, between JC, ME and PE (Exhibits B-2 and B-3 above) with the PaPUC on behalf of JC, ME and PE.

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SIGNATURE PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY CAUSED THIS STATEMENT TO BE SIGNED ON THEIR RESPECTIVE BEHALVES BY Tile UNDERSIGNED THERE-UNTO DULY AUTilORIZED.

JERSEY CENTRAL POWER & LIGHT COMPANY By j %4 &

V F22$iDENT METROPOLITAN EDISON COMPANY By gw __

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PENNSYLVANIA ELECTRIC COMPANY I By 3

[ "PRESOENT ]

Dated: August 10, 1977 l

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Amendmant *J). 1-to Declaration docketed in SEC File No. 70-5951 '

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM U-l APPLICATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("ACT")

JERSEY CENTRAL POWER & LIGHT COMPANY ("JC)"

Madison Avenue at Punch Bowl Road, Morristown, N. J. 07960

. METROPOLITAN EDISON COMPANY ("ME")

2800 Pottsville Pike, Reading, Pa. 19603 PENNSYLVANIA ELECTRIC COMPANY ("PE")

• 1001 Broad Street, Johnstown, Pa. 15907 (Names of companies filing this statement and addresses of principal executive offices)

GENERAL PUBLIC UTILITIES CORPORATION ("GPU")

260 Cherry Hill Road, Parsippany, N. J. 07054 (Name of top registered holding company parent of each applicant or declarant)

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Mr. E. C. Schoener W. T. Osborne, Esq.

Secretary and Treasurer General Attorney Jersey Central Power & Light Comnpany Jersey Central Power'& Light Company Madison Avenue at Punchbowl Road Madison Avenue at Punch Bowl Road Morristown, New Jersey 07960 Morristown ,New Jersey 07960 Mr. R. B. Heist, Secretary S. B. Russell, Esq.

Metropolitan Edison Company Ryan, Russell & McConaghy 2800 Pottsville Pike Suite 304 Colonial Trust Bldg.

Reading, Pennsylvania 15907 Reading, Pennsylvania 19601 Mr. W. R. Thomas H. N. Platt, Jr., Esq.

Secretary and Treasurer Ballard, Spahr, Andrews & Ingersoll Pennsylvania Electric Company 30 South 17th Street 1001 Broad Street Philadelphia, Pennsylvania 19103 Johnstown, Pennsylvania 15907 Mr. F. D. Hafer, Treasurer J. B. Liberman, Esq.

&Qeneral Public Utilities Corporation Berlack, Israels & Liberman 260 Cherry Hill Road 26 Broadway Parsippany, N. J. 07054 New York, New York 10004 l

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! JC, ME and PE hereby amend their joint declaration )

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i under the Act docketed in SEC File No. 70-5951 in the following  !

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. respects:

1. By deleting Section 1.04 of the answer to Item 1 of the declaration as originally filed and substituting therefor the following l

"1.04 The sale prices received by ME and

+ PE for the interests in TMI #2 sold by them to JC will )

I be the book cost, including allowance for funds used during construction ("AFC"), of the interests so sold

, by them to JC as such book cost shall exist at the date of each sale, adjusted in the following respects: l (a) The amount of the Pennsylvania Public Utility Realty Act ("PURTA") taxes paid or payable to the date of the final sale which is applicable t'o the interests in TMI #2 being sold by ME and PE to JC is the subject of a dispute with the Commonwealth of Pennsylvania. In the view of ME and PE, the appropriate aggregate amount of such PURTA taxes is approximately

$150,000, and their respective book costs for the interests in TMI #2 being sold by them to JC will be adjusted to reflect PURTA taxes in this t

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amount. If, however, it should ultimately be f determined that additional PURTA taxes, interest '

I thereon or other associated costs are payable with j respect to the interests in TMI #2 sold to JC pursuant to this declaration, JC will promptly }

t reimburse ME'and PE for such additional amounts. i (b) The sales of interests in TMI 62 i i

by ME and PE to JC will give rise to Pennsylvania income tax payable by ME and PE over the tax life of TMI (2. The aggregate amount of such Pennsylvania income tax is estimated at approximately $5,700,000 }

and the related Federal income tax reductions l attributable thereto are approximately $2,700,000, I r

resulting in an aggregate net cost to ME and PE for such Pennsylvania income taxes of approximately

$3,000,000 payable over the 16-year tax life of TMI .

I (2. .The present value of this amount, adjusted to  !

i reflect the additional Pennsylvania tax on such reimbursement, is approximately $2,000,000. The l

l t amount payable by JC to ME and PE for their interests i i I

in TMI (2 to be sold by them to JC will include the

! sum of $2,000,000 to make provision for reimbursement

' to ME and PE for this cost."

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2. By deleting Section 2.04 of the answer to Item 1 of the declaration as originally filed and substituting therefor the following:

"2.04 The sale pricet received by JC for the interests in FR sold by it to ME and PE will be the book cost, including AFC, of the interests so sold by it to ME and PE as such book cost shall. exist at the date of each sale, adjusted in the following respects (a) In determining JC's cost of construction of FR, varying portions of JC's investment in FR have been included in rate base for varying periods in accordance with orders of the Board of Public Utility Commissioners of the State of New Jersey ("NJPUC"). The costs shown on JC's books in respect of the interests in FR to be sold by JC to )

i ME and'PE shall, for the purpose of calculating the price j to be paid for such interests by ME and PE, be increased by an amount equal to the AFC which would have been accrued if none of JC's investment in FR had been included in JC's rate base." l

3. By deleting Section 4.01 of the answer to Item 1 of the declaration as originally filed and substituting ,

therefor the following:

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l "4.01 JC,'ME and PE own undivided in-  !

terests in Unit No. 1 of the Three Mile Island nuclear generating station (TMI f1), which was placed in  ;

service on September 2, 1974, in the following proportions:

• JC -- 25%

ME -- 50% l PE -- 25% l l

The proposed transactions will not affect interests I

in TMI fl. There are certain facilities at TMI that will be ,

used in common for TMI (1 and TMI $2. In its rate orders

. l relating to Penelec (entered June 10, 1976) and Met-Ed. J (entered July 7, 1976), The Pennsylvania Public Utility j Commission ("PaPUC") . held that the interests of ME and PE in j an aggregate of $5,282,000 of the facilities used in common for TMI #1 and TMI 12 as at September 2, 1974 (the date when TMI $1 was placed in service) were applicable to ft'.I f 2 and should be excluded from the respective rate bases of ME and PE and should accrue AFC from September 2, 1974.until TMI ( 2 is placed in commercial service. Pursuant thereto, the book

- costs of the undivided interests of ME and PE in such common facilities which are to be sold by them to JC as a part of' TMI (2'will reflect such continued AFC accruals."

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4. By deleting Section 4.02 of the answer to Item 1 of the declaration as originally filed and substituting therefor the following:

"4.02 JC owns 100% of the Oyster Creek  !

nuclear generating station ("OC"), which was placed'in commercial service on December 23, 1969. JC has, since December 23, 1969, included as part of its investment in OC certain land: and buildings which are to be used as a part of FR. (JC's investment in such lands and buildings at May 31, 1977 approximated

$350,000.) The costs shown on JC's books in respect to the interests in FR to be sold by JC to ME and PE shall, for the purpose of calculating the price to be paid for such interests by ME and PE, be increased by an amount equal to the AFC which would have been j accrued if JC's investment in such land and buildings had always been treated as a part of FR."

5. By filing the following as the answer to Item 2:

"A. JC will bear one-half of the out-of-pocket costs, including transfer taxes, involved-in transfer to JC of the interests in TMI.62 covered by this declaration and ME and PE shall each bear (and capitalize as a portion of the interests in TMI #2 which they shall retain) the remaining half of such costs involved in their respective transfers.

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"B. ME and PE will each bear.one-quarter of the out-of-pocket costs, including transfer taxes, involved in conveying to each of them the interests in FR covered by this declaration and JC shall bear (and capitalize as a portion of the interest in FR which it shall retain) the remaining half of such costs involved in such transfers.

"C. The estimated amount and details of the fees, commission and expenses involved in the transactions covered by this declaration will be filed by amendment."

6. By filina the following exbibits:

B-2 - Agreement, dated July 27, 1977' between JC, ME and PE, terminating the Agreement dated December 16, 1976, between them.

B Agreement, dated July 27, 1977, between JC,.ME and PE providing for the transaction covered by this declaration.

D Petition of JC to NJPUC l

D-1(a) Order, dated August 4, 1977, of the NJPUC D Letter, dated August 3, 1977, of Messrs. Ryan, Russell & McConaghy, filing the Agreements, dated July 27, 1977, between JC, ME and PE (Exhibits B-2 and B-3 above) with the PaPUC on behalf of JC, ME and PE.

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) SIGNATURE 6

! PURSUANT TO THE REQUIREMENTS OF THE PUBLIC j

l 3 UTILITY HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED

COMPANIES UAVE DULY CAUSED THIS STATEMENT TO BE SIGNED l ON THEIR RESPECTIVE BEHALVES BY .THE UNDERSIGNED THERE-i UNTO DULY AUTHORIZED.

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JERSEY CENTRAL POWER & LIGHT COMPANY By ] V Y.fSIDENT METROPOLITAN EDISON COMPANY-By </Ed, um ^

(/ ' l PENNSYLVANIA ELECTRIC COMPANY ,

By

$ " "PRLssolut Dated: August 10, 1977 a

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.y EXHIBIT 13-2 Agreement Terminating Agreement, Dated December 16, 197G The undersigned hereby terminate in all respects the Agreement, dated December 16, 1976, between them.

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s l Jersey Central Power S Light Company July 27, 1977 By: (tow 5 bd1 Pre'sident /'f' ]

Metropolitan Edison Company July 27, 1977 By: _

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Vdce Pydsidefn't

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Pennsylvania Electric Company

- July 27, 1977 By: fqT(N a f a-7 _,,

Uxecutive Vice Presideni I

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EXHIDIT D-3 l

AGREEMENT, DATED JULY .17,1977 DY AND BETWEEN JERSEY CENTRAL POWER & LIG!!T COMPANY ("JCP&L")

AND METROPOLITAN EDISON COMPANY (" MET-CD")

AND PENNSYLVANIA ELECTRIC COMPANY ("PENELEC")

WHEREAS,

1. JCP&L, Met-Ed and Penclec are currently

- engaged in the construction of Unit No. 2 of the Three  :

Mile Island nuclear generating station ("TMI C2"),

in as tenants in common (without rights of partition) '

which JCP&L currently has a 25% undivided interest, Met-Ed currently has a 50% undivided interest, and Penelec-currently has a 25% undivided interest; JCP&L is currently engaged in the con- (j

2. .d 1 struction of the Forked River nuclear generating ,

station ("FR") and has agreed in principle Inc. (" Allegheny")

with Allegheny Electric Cooperative.- .

to sell the latter, as a tenant in common without  !

in FR; right of partition, a 3% undivided interest and

3. As a result of unforeseen changes in conditions that occurred subsequent to the decisions to proceed with the construction of TMI

1. 2 and FR, JCP&L, Met-Ed and Penelec have agreed that e

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it is in their mutual interest to carry out the transactions herein provided for,

' NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL UNDER-TAKINGS HEREIN SET FORTH, THE PARTIES HERETO AGREE AS FOLLOWS:

I. With respect to TMI #2 ,

l 1.01. Met-Ed agrees to sell to JCP&L one-half (i.e., a 25% undivided interest in the whole of TMI #2) of Met-Ed's present 50% undivided interest in TMI 62 and JCP&L agrees to buy such interest from Met-Ed. j 1.02. Penelec agrees to sell to JCP&Lthree-fifths f (i.e., a 15% undivided interest in the whole of TMI #2) of Penelec's present 25% undivided interest in TMI (2 and JCP&L agrees to buy such interest from Penelec.

1.03. The amounts to be paid by JCP&L to Met-Ed and to Penelec for the undivided interests in TMI 92 purchased by JCP&L purcuant to Ecctions 1.01 and 1.02 shall be equal to their respective book costs (adjusted as set l forth in Sections 1.04, 1.05 and 1.06) for the interests in TMI #2 to be conveyed by them te JCP&L, as such adjusted costs shall exist from time to time when Met-Ed and Ponoloc shall make conveyancen to JCP&L. JCP&L shall make

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installment payments to Met-Ed and Penelec f

from time to time on schedules agreed upon by it with Met-Ed and Penelac, recpectively, and Met-Ed and Penelec shall make conveyances to JCP&L from time to time on schedules agreed upon by them,

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respectively, with JCP&L.

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1.04. The amount of the Public Utility Realty Tax Act ("PURTA") taxes paid or payable to the date of transfer which is applicable to.the  !

interests in TMI #2 being purchased by JCP&L from ,

i' Met-Ed and Penelec is the subject of a dispute l

i with the Commonwealth of Pennsylvania. In the -

4 view of Met-Ed and Penelec the appropriate aggregate amount of such PURTA taxes is approximately

$150,000, and their respective book costs for the interests in TMI #2 being conveyed by them to JCP&L will be adjusted to reflect PURTA taxes in  !

this amount. JCP&L agrees that, if it should ultimately be determined that additional PURTA taxes, interest thereon or other associated costs are payable with respect to the interests in TMI

82. conveyed to it pursuant to this Agreement, it I

will prornptly reimburse Met-Ed and Penelec for such additional amounto.

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1.05. The sales of interests in TMI #2 by Met-Ed and Penclec to JCP&L will give rise to Pennsylvania incomo tax payable by Met-Ed and The 1

Penelec over the tax life of such property.

aggregate amount of such Pennsylvania tax is estimated at approximately $5,700,000 and the

' related Federal-income tax reductions attributable l

thereto are approximately $2,700,000, resulting in an aggregate net cost to Met-Ed and Penclec for l

such Pennsylvania income taxes of approximately

$3,000,000, payable over the 16. year tax life of TMI #2. The present value of this amount, adjusted to reflect the additional Pennsylvania tax on such l  !

The reimbursement, is approximately $2,000,000. )

amount paid by JCP'&L to Met-Ed and Penelec for j l

their interests in TMI 92 to be convoyed to JCP&L 1 l f l

pursuant to this Agreement will include the sum of i j

$2,000,000 to make provision for reimbursement to

Met-Ed and Penclec for this cost.

l 1.06 The PaPUC has heretofore hold that the interests of Met-Ed and Penelec in i $5,282,000 of the facilities used in common l l

! for TMI il and TMI 92 as at September 2, 1974 . 1 (the date when TMI 91 was placed in i service) are applicable to TMI 12 and should be excluded from rate base and should

1. 2 accruo AFC from September 2, 1974 until TMI is placed in commercial service. The costs of

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J undivided interests of Met-Ed and Penelec in such common facilitics and properties which are to be conveyed by them to JCP&L shall reflect l

such continued AFC accruals.

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1.07. JCP&L will bear one-half of the I out-of-pocket costs including transfer taxes, involved in conveying to JCP&L the interests in l

TMI 52 covered by this Agreement.

1.08. Mot-Ed will continue to be respon- ,

sible on behalf of itself, JCP&L and Penelec for the completion of the construction and operation of TMI #2. JCP&L, Met-Ed and Penelec will share the further costs of constructing and completing TMI #2 in proportion to their respective interests \

in TMI #2 as such interests shall exist.from time to time.

1.09. If test energy shall be produced by TMI #2 before completion of the transfers by Met-Ed and Penelec to JCP&L, such test energy shall be shared by JCP&L, Met-Ed and Penelec in proportion to their respective interests in TMI #2 as noch interests shall exist when the transactions provided for in thic Agreement shall have been consummated. l l

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i II. With respect to FR l 2.01. JCP&L agrees to sell to Met-Ed. i f

l and to Penelec 25% undivided interests (without J right of partition) in FR, and Met-Ed and Penclec )

each agree to purchase such a 25% undivided l interest in FR from JCP&L.

2.02. The amounts to be paid by Met-Ed 1 f  !

and Penelec to JCP&L for the 25% undivided inter-ests in FR purchased by them puhsuant'to Section 2.01 shall be equal to JCP&L's book cost (adjusted ,

for such as set forth in Sections 2.03 and 2.04) interests as such adjusted cost shall exist at the time when JCP&L shall make a conveyance to Met-Ed and Penelec. In the event the transfer of interest in FR is not concluded with one conveyance by JCP&L and one payment therefor by Met-Ed and Penelec, Met-Ed and Penelec shall each make installment payments to JCP&L from time to time on schedules agreed upon by them with JCP&L and JCP&L shall make conveyances to Met-Ed and Penelec from time to time on schedu'es l agreed upon by it with each of them.

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2.03. In determining its cost of con-struction of FR, varying portions of JCP&L's investment in FR have been included in rate base for varying periods in accordance with orders of h

the Board of Public Utility Commissioners of t e The costs shown on State of New Jercey ("NJPUC").

JCP&L's books in respect of the' interests in FR to for be sold by JCP&L to Met-Ed and Ponelec shall, id the purpose of calculating the price to be pa for such interests by Met-Ed and Penelec, be increased by an amount equal to the AFC '

which invest-would have been accrued if none of JCP&L se, s ment in FR had been included in JCP&L's lee rate ca and the purchase prices paid by Met-Ed and_Pene shall be based on such adjusted costs.

23, 1969, 2.04. JCP&L has, since December in the Oyster included as part of its investment (which was placed in commercial Creek nuclear station i service on that date), certain lands and build ngs f FR.

which are now to be utilized as a part o in such lands and buildings at JCP&L's investment The costs May 31, 1977 approximated $350,000, interesta shown on JCP&L's books in respect to the cold by JCP&L to Met-Ed and Pencloc in FR to be of calculating the price to chall, for the purpose interents by Mot-Ed be paid for nuch

'ri .;

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and Penelec, be increased by an amount equal .

to the AFC which would have been accrued if in such land and buildings had JCP&L's investment always been treated as a part of FR, and the  ;

purchase pricos paid by Met-Ed and Penclec shall i

be based upon such adjusted costs, j

2.05. Met-Ed and Ponclec will cach bear including one-quarter of th'e out-of-pocket costs, .

transfer taxes, involved in conveying to each of

• f them the interests in FR covered by this Agreement. I l

2.06. JCP&L will be responcible, on if behalf of itself, Met-Ed and Penelec (and, interests in FP shall be sold to Allegheny, on behalf of Allegheny) for the completion of the JCP&L, Met-Ed construction and operation of FR.

and Penelec (and, if Allegheny shall become a participant in the ownership of FR, Allegheny) will share the further costs of constructing and completing PR in proportion to their respecive interests in PR as such interests shall exist from time to time.

2.07. If tcat energy shall be produced f

by FR hefore completion of the transfers by JCP&L O

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to Met-Ed and Ponolec, such test energy shall be shared by JCP&L, Met-Ed and Pencloc in propor-tion to their respective interests in PR as such  !

i interests shall exist when the transactions pro- l vided for in this Agreement shall have been con- I summated. 1 l

III. Conditions 3.01. The obligations of cach of the 1 l

parties hereto are subject to satisfaction of the i

)

following conditions:

(a) The obtaining of any and '

all requisite authorizations of regulatory, licensing or other governmental agencies having jurisdiction with respect to this Agreement and the transactions herein l

provided for; and (b) The obtaining of any and )

all requisite releases f rom the lien of its first mortgage bond indenture.

3.02. Each of_the parties agree that it will use its best efforts to obtain the authorfza-tions and releases referred to in Section 3.01.

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IV.

Assumption of Obligations.

4.01.

To the extent feasibic and appropri-i ate, the parties will make arrangements with the r vendors, suppliers and others to whom obligations ect  ;

now exist or will arise in the future with resp to TMI 12 and FR so that such obligations will be ,

in l borne by them, severally and not s jointly, proportion to their respective ownership interests ll f in TMI #2 and FR as such ownership interests sha it shall not be feasible then exist. If, however, or appropriate to make such arrangements with a pect vendor , supplier or any other obligee with res the parties hereto shall to any such obligation, d ce nevertheless share such obligation in accor an with such ownership interest.

in respect of 4.02. JCP&L's book cost bliga-FR include the principal amount of certain o i Corpora-tions undertaken by JCP&L to Brown Bover h

tion in connection with the purchase of t e t and turbo-gonerator and accessory equipmen Notwithstanding Section 4.01, services for FR. ible for JCP&L shall continue to be solely respons Boveri the obligations undertaken by it to Brown in respect of cor por ation (and any accignce of the latter) such purchase.

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IN WITNESS WHEREOF, the undersigned have executed and delivered this agreement as of the day and year first above written.

I I JERSEY CENTRAL POWER & LIGtfT COMPANY f

By f[ swa ts( i i) resident /

f METROPOLITAN EDISON COMPANY By / ,-p!,f irr . w

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7 ,J Vic6 Pre'sident

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PENNSYLVANI A ELECTRIC col 4PANY By lA,heMo47.A Executive Vice President l

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.  ! i l'. . EXilIBIT D-1 (w/o Schedules)

STATE OF NEW JERSEY DEPARTMENT OF PUBLIC UTILITIES BOARD OF PUDLIC UTILITY COMMISSIONERS s

IN TIIE MATTER OF Tile PETITION OF  :

JERSEY CENTRAL POWER & LIGitT COMPANY ' PETITION  ;

FOR APPROVAL OF T!!E SALE OF A 50%  : '

UNDIVIDED INTEREST IN FORKED RIVER Docket No.

GENERATING STATION  :

Jersey Contral Power & Light Company (hereinaf ter called " Jersey Central"), pursuant to R. S. 40:7-3, as amended, and Rule 14:6-10 of your.llonorable Board's Rules of Practico sayn:

i

1. Jersey Central is a New Jersey corporation engaged in the business of supplying electric light, heat and power to the public in New Jersey and is a public utility subject to the

jurisdiction of your 11onorable Board.

2. , Metropolitan Edison Company (hereinaf ter called 4

" Met-Ed") and Pennsylvania Electric Company (heroinaf ter called

"Penelec"), are Pennsylvania corporations engaged in the business of supplying electric light, heat and power to the public in various parts of the State of Pennsylvania and are public utili-ties as defined under the applicablo Pennsylvania statutes.

3. All of the common stock of Jersey Central, Mot-Ed 4

I and Penelec is owned by Cencral Public Utilities Corporation (hereinaf ter called "GPU"), a registered public. utility holding 4

company.

4. Jersey Central proposes to sell to Mot-Ed and i - Penc1ce, subject to the approval of your Board and of the 1

Securities and Exchango Commission, the property described in i

Schedulo A annexed hereto and made a part hereof for the rencons j

and for the concideration ctated horcin. The disposition of i

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4 uch property will not interfore with Petitioncr's ability to s

'I r ender safe and adequate service to its customers, nor affect b 4

t he employment of any of Petitioner's employees. 1 Jersey Contral is in the process of constructing the g 5.

orked River nuclear generating station. consisting of one unit f F 4

(" Forked River") with an expected capability of approximately in 1983.

1120 MW, prosently scheduled for service

6. Jersey Central, Met-Ed and Penclec are the owners as tenants in common of, and are in the process of constructing, the Three Mile Island nuclear generating station Unit No. 2

("TMI #2") with an expected capability of approximately 906 Mw The present respective undivided scheduled for service in 1978.

25%; Met-Ed, 50%; and Penelec, 2 5%'.

interests are Jersey Central, '

The Three Mile Island station is located on T'hree' Mile l

in the Susquehanna River about 17 miles below Harrisburg, Pennsylvania.

7.

Jersey Central proposes to sell to Met-Ed and to Pencloc 25% undivided interests in Forked River so th (without rights of partition) respective undivided interests 25%; i in Forked River will then be Jersey Central, 50%; Met-Ed, )

and Penelec, 25%.

8.

Mot-Ed proposes to sell to Jersey Central an addition 25% undivided interest and Ponclec proposes to sell to Jersey in TMI #2, so that Central an additional 15% undivided interest (without rights of partition}

the respective undivided interests 25%; and

' in TMI #2 will then be Jersey Central, 65%; Met-Ed, Pencloc, 10%.

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9. Such sales will be made in a series of installments (which will not necessarily be pro rata as betwoon Mot-Ed and Penelec) geared to Jersey Contral's ability to make payments ,

t and the ability of Mot-Ed and Pencloc to make use of the sales prococds but will be completed by the time that TMI #2 is placed in commercial service.

10. The sale prices to be received by Jersey Contral.

will be the book cost, including allowances for funds used dur-ing construction (','AFC") , of' the interests conveyed by 'it, adjusted in order to retain for Jersey Central's customers the net benefit of (a) certain interperiod tax allocations previously ,

effected in accordance with orders of the Board of Public Utility Commissioners of the State of New Jersey ("NJPUC") and (b) the inclusion of a portion of Jersey Central's investment in Forhed River in rate base, and thus will reflect the economic cost of the interests in Forked River being sold by Jersey Contral.

I (Dotails thereof are shown on Financial Statement 1(d) annexed hereto.) l

11. It is proposed that Jersey Central, Met-Ed and Peneloc will contribute to the on-going. construction costs of .

TMI #2 and Forked River each month in proportion to their respectivo ownership interests therein as they exist that month and each of them will continue to accruc AFC on their invest-I monts in TMI il2 and Forked River as such investments exist cach month, with the result that cach solling company will be reim-I bursed for its carrying charges on such investments as they

' exist from month to month until the transfers are completed.

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12. Jersey Central owns 100% of the Oyster Crock 75

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nucicar generating station ("OC"), which was placed in commercial service on December 23, 1969. Some of the OC facilitics will be used in common for Forked River, which is immedictcly adjacent to OC. Such common facilitics will be equitably allocated be-l twoon OC and Forked River and the undivided interests in Forked l River co'voyed n '

by Jersey Central to Mot-Ed and Penelec will in- i l

l clude proportionato interests in such common facilities.

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13. Jersey,Contral, Met-Ed and Penelec own undivided j interests in Unit No. 1 of the Throc Mile Island nuclear generat-ing station ("TMI #1"), which was placed i.n service on September 2, 1974, and is adjacent to TMI #2. The proposed transactions 6 I

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! will not affect the companies' present interests in TMI #1.

! There are certain facilities at Throc Mile Island that will bc I  :

used in common for TMI'#1 and TMI #2. The aggregate original' l

l l cost of such ' common facilitics at the time that TMI #1 was placed in comme'cial r service w'as approximately $14 million, of

. I l

l which Met-Ed's share was approximately $7 million and the Ponclec  ;

and Jersey Central shares were each approximately $3.5 million.

l In its rate orders relating to Ponclec (cntered June 10, 1976) and Met-Ed (cntered July 7, 1976), the Penns 1vania Public Utility Commission excluded from rate base one-half of their 3-respective investments in such common facilities as being assignabic to TMI #2, and suggested the continued accrual of AFC the rc on. Pursuant thereto, one-half of their cost of such common facilities will be regarded by Mot-Ed and Penclec an  ;

I i e acsignable to TMI #2 and the intorcsts in TMI #2 to be transferrod'

i i by Met-Ed and Pcnolce to Jersey Central will include proportion-1

! ate interests in such facilitics. /,

I 14. In accordance with 'the provisions of the Public 7 Utility IIolding Company Act, for more than 30 years the planning s N

j of the General Public Utilitics Corporation system facilitico i

has been on a basis which, under normal conditions, would permit a

~

such facilitics to be economically operated as a single inter-connected system confined in its operations to a singic area or i

i region, in one or more states, not so large as to impair (con-sidering the stat'e of the art and the area or region affected) i

< the advantages of localized management, efficient operation and 1

the effectiveness of regulation. In that light,' while facili-E ties have been planned and ins'talled on an over-all system b

requirements basis, the allocation of benefits and obligations 2

- among the system companies has been designed to result in an equitabic . allocation related to their own energy and capacity requirements. When the decisions were made to proceed with the

{

installation of TMI #2 and Forked River, and taking into account the then anticipated dates for commercial service of TMI #2 and

' Forked River, the anticipated participations in base-load cncrgy i

' and capacity among the system companics were reasonably con-sistent with those standards. IIoweve r , intervening events (in-i cluding the OPEC oil embargo and subsequent pr' ice increases, the rise in the cost of coal and uranium, the pause in the rate 1

'of increase of the consumption of clectricity, and the deferral 1 of the completion dates for TMI (f 2 and Forked River) have made it appropriato and advisable to reallocato among the system 4

companics the pa'rticipation in TMI #2 and Forked River.

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15. It is thereforo proposed that Jersey Central, Met-Ed and Pcnolcc make the requisite conveyances and transfers and the requisite purchases and undertake the necessary obligations to the end that Forked River and TMI #2 will be owned by them as  :,

tenants in common, as aforesaid.

WilEREFORE, the Petitioner respectfully requests your llonorablo Board to waive the advertising requirements of Rule 14:6-10(b) and to approve such transfer by Jersey Contral.

JERSEY CENTRAL POWER & LIGIIT COMPANY l-4 By s/ I. R. Finfrock, Jr.

I. R. Finf rock, Jr. , Vice President!

Dated: January 13, 1977 Person to whom communications should ,

be addressed:

s/ William T. Osborne ,,

'I William T. Osborne ,j Attorney for Petitioner Post Office Box 1279R Morristown, Now Jersey 07960 I ,

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' $1$'[.y L! ' . ' .5%

~ . *T EXIIIBIT D-1(a) f, blRif 11( i l flll 301'1100 DEPARTMENT OF PUGLIC UTILITICS , ,

DoAno OF POOLIC UTILITY CoMMISGloNcMG 101 COMMCHCC LTrttET NEWAltK, NEW JEftGEY 07102 IN Tile MATTER OF TllE PETITION OF  : 8/4/77 JERSEY CEllTRAL POUER & LIGllT COM-  : CONSENT ORDER PANY FOR APPROVAL OF THE SALE OF A:

50% UNDIVIDED INTEREST IN FORRED : DOCKET NO. 771-32 RIVER GENERATING STATION  :

BY THE BOARD: .

(BEFORE CHIEF HEARING EXAMINER 111CllAEL MEHR, ESQ.)

By a petition, dated January 13, 1977, Jersey Central Power & Light Company (" Jersey Central") sought the Board's authority to sell, in one or more installments, to its affiliates, Metropolitan Edison Company (" Met-Ed") and Pennsyl-vania Electric Company ("Penclec"), two undivided 25% interests in its Forhed River generating station ("FR") uhich is now under construction (i . e. , total undivided interests aggregat- ,

ing 50%) and to acquire, in one or more installments, from Met-Ed and Penclec an aggregate cdditional 40% undivided interest in the Three Mile Island generating Unit No. 2

("TMI-2") which is also under construction.

The principal purpose of the proposed sales and purchases is to bring the ownership by Jersey Central, Met-Ed and Penelec of base-load generating capacity during the period 1978-1983 into line with their respective individual requirements in the light of the changes in such requirc-monts that have developed since the present ownership of .

TMI-2 and FR ucre established several years ago.

Hearings were held on this petition in which the Staff of the Board, the Division of Rate Counsel, Office of the Public Afvocate (" Rate = Counsel") and others have partici-pated.* Jersey Central and Rate Counsel cach presented witnesses who submitted prepared testimony and were cross-cxamined. The hearing record uns closed, the parties waived a Hearing Examiner's report and the matter was certified directly to the Board for decision. Briefs ucre filed by the Company and Rate Counscl on the only issue which remained after the conclusion of the prococdings.

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• The hearings on this petition ucre also consolidated l

with the record in Jersey Central's pending rate proceeding in Dochet No. 7610-1021.

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l During the course of the proceedings, Rate Counsel ,

indicated that they would have no objections to the trananc-tions proposed by Jersey Central if (a) the basis of pricing the transactions proposed by Jersey Central were modified  !

in certain respects and (b) Jersey Central would agree to f

certain conditions which vould natisfy the concerns of Rate Counsel and their witnesses. As hereinafter set forth, Jersey Central has nubmitted undertakings which satisfy thece conditions and, except in one respect, has agreed to l the modifications of the basis of pricing the transactions .

i proposed by Rate Counocl.

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Jersey Central submitted detailed studies of its need for additional base load generating capacity. A sub-stantial part of its present generating capacity is oil-fired steam capacity and conibustion turbines. Under.present and prospective market conditions for fuel oil, the generation l

of electricity by oil-fired facilitics is costly to the l Company's customers, raises questions about System reliability l

because of problems of availability of supply, and is incon-

' sistent with the National policy of reducing dependence upon imported fuel oil. It is , therefore, decirabic that the Com- "

pany have additional base load generation utilizing other fuels. Rate Counscl's expert witness, Dr. Robert Spann, testified that he concurred that the Company had need for i additional base load generating capacity during.the period 1978-1983 and that, under the conditions agreed to by the '

Company and hereafter summarized, the acquisition by the Company of the proposed additional interest in THI-2 is a reasonable means of providing for such needs. >

The Board is satisfied that at'thic point in time this transaction is necessary and desirabic for these.rcanons:

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(a) The additional base load ge'norating capacity which Jeracy Central proposes to acquire from' Met-Ed and Penelec, namely, an additional 40% undivided i

interest in TMI-2, or 352137, is rencenably related to Jersey -Central's needs during the period af tcr Tlil-2 is placed in service (expected to be in tha Spring of 1978) and before FR is placed in service

' (expected to be in the Spring of 1983);  ;

i (b) With the additional Tlil-2 generating capacity, l Jersey Central will be able to sell one-half of its intercut in FR - - i . e . , the combination of the TMI-2 I

generating capacity proponed to be owned by Jersey' Cen 1 l

in 1983 and approximately one-half of the Seward '

Station generating capacity (ccheduled to be placed in service in 1986) will be reasonably related to Jeracy l Central's need for additional base load generating capa .

l city. By adding ownerchip of cuch additional base load generating capacity in theco smaller increments, Jersey Central will better match its hace load generating capability tomers' to its requirements for meeting its cun-energy n thenc requirementc .

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• In response to the concerns expressed by Rate i Counsel and their witnesses, Jersey Central has submitted  :

i the following undertakings: 1 Y

l Jcracy Central vill preparc and nubmit to the(i)

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Board, within four months af ter the Board's i authorization of the purchases and sales covered by  :

the Petition, a report setting forth the r'esults of a

, Jersey Central's study, now instituted, of possible  !

meann of mitigating the immediate or short-term impact '

on Jersey Central's customers of an extended outage of j Jersey Central's base load generation and vill furnish y copics of.such report to Rate Counscl; I (ii) Jersey Central vill not, solely as a result of the additional financing requirements placed  !

upon it in 1977-1978 in connection with -2, the seck acquini- ,

l tion interim of the rateadditional increasesinterests in TMI prior to the to be effective l time that TMI-2 is placed in commercial cervice; this  !

undertaking shall not, however, preclude Jersey Central (A) from seching final rate relief in or 7610-1021* thein any -

proceedings pending in Docket No.  ;

other proceeding, or (D) from socking interim rate relief if, as a result of developments not presently foreseen, Jersey Central should conclude that interim rate,rclief was appropriate. .

2 (iii)

Jersey Central shall furnisb. to the Doard (with copics to nate Counsel) dats relating to the

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increases in cost of TMI-2 during theincourse of con 4 l

! will be examined in the continued proceedings i I

Docket No. 7610-1021, and Jersey Central'shall furnish to the Board (iv) (with )

J and Staff copics to Rate Counsel), promptly ,

af ter the consummation of copics the transactions of the journal for which authority is herein sought, l entries and supporting data relating to such trann-actions. I i

I 7610-1021 vas filed

• Jerney Central's petition in Docket No. Hearings in that proceeding ha

! on October 15, 1976.

' been concluded and stipulations resolving all b *

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j mitted for the Board's consideration.

ing issue are to be submitted ~ in the very nuar future.

Jersey Central han requested that af ter the B 7610-1021 ccedings in Docket Ho'.

mission of data dealing with the period subacquent to thatJern dealt that, with in the prcncut record.if the proceeding in so contin statutory limit under N.J.S.A. 4G-2-21 on the suspennion 3

period for the rates involved in the continuedhat proenedin thin

until May 1, 1977.to the proceeding and based upon itn detcrminati will best nerve the public interent, this in appropri' ate and no directs the Ucaring to continue Examinor in the proceeding, Dochet Ho. 7610-1021 l

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s uch property will not interfere with Petitioncr's ability to i r

ender safe and adequato service to its customers, nor affect - I jl t he employment of any of Petitioner's employees. 1 I

5.

Jersey contral is in the process of constructing the Forked River nuclear generating station, consisting of one unit 1 '

f

(" Forked River") with an expected capability of approximately i !

1120 MW, prosently scheduled for service in 1983.

6. Jersey Central, Met-Ed and Pcnolec arc the owners  !

and are in the process of constructing, as tenants in commt. or, l

the Three Mile Island nuclear generating station Unit No. 2 f

("THI #2") with an expected capability of approximately 906 Mw The present respective uncivided scheduled for service in 1978. l 25%; Met-Ed, 50%; and Penelec, 25%'.

interests are Jersey Central, i

The Three Mile Island station is located on T'hree' Mile  !

17 miles below Harrisburg, in the Susquehanna River about Pennsylvania.

7. Jersey Central proposes to sell to Met-Ed and to t !

f i

Penclec 25% undivided interests in Forked River so t (without rights of partition) respective undivided interests 50%; Met-Ed, 25%; f in Forked River will then bc Jersey Central, and Penelec, 25%.  !

0.

Met-Ed proposes to sell to Jersey Central an addition 25% undivided interest and Penelec proposes to sell to Jersey 2 that

~ Contral an additional 15% undivided interest in TMI # , so tition) the respective undivided interests (without rights of par 25%; and

' in TMI #2 will then be Jersey Central, 65%; Met-Ed, i

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i Pencicc, 10%.

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9. Such sales will be made in a series of installments (which will not necessarily bo pro rata as betwoon Mot-Ed and Ponoloc) geared to Jersey Central's ability to make payments and the abil' ity of Mot-Ed and Pcnolec to make use of the sales proceeds but will be completed by the time that TMI #2 is placed in commercial service.

10. The sale prices to be received by Jersey Central will be the book cost, including allowances for funds used dur-ing construction (','AFC") , of' the interests conveyed by 'it, l adjusted in order to retain for Jersey Central's customers the not.

benefit of (a) certain interperiod tax allocations previously offected in accordance with orders of the Board of Public Utility ,

Commissioners of the Stato of New Jersey ("NJPUC") and (b) the  !

inclusion of a portion of Jersey Central's investment in Forked ,

River in rate base, and thus will reflect the economic cost of the interests in Forked River being sold by Jersey Central.

(Details thereof are shown on Financial Statement 1(d) annexed hereto.)

11. It is proposed that Jersey Central, Met-Ed and Peneloc will contribute to the on-going. construction costs of TMI (12 and Forked River cach month in proportion to their respective ownership interests thorcin as they exist that month and each of them will continue to accruc AFC on their invest-I monts in TMI (12 and Forkcd River as such inver,tments exist cach month, with the result that cach selling company will be reim-bursed for its carrying charges on such investments as they exist from month to month until the transfers are completed.

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12. Jersey Central owns 100% of the Oyster Crcok a nuclear generating station ("OC"), which was placed in commercial service on December 23, 1969. Some of the OC facilitics will be I

used in common for Forked River, which is immediately adjacent to OC. Such common facilitics will be equitably allocated be-twocn OC and Forked River and the undivided interests in Forked River co'voyed n by Jersey Central to Met-Ed and Poncloc will in-clude proportionato interests in such common facilitica.

13. Jorsey.Contral, Mot-Ed and Pcnolec own undivided interests in Unit No. 1 of the Three Mile Island nuclear generat-ing station ("TMI #1"), which was placed in service on September 2, 1974, and is adjacent to TMI #2. The proposed transactions i l

1 will not affect the companics' present interests in TMI #1.

There are certain facilities at Three Mile Island that will be i

used in common for TMI'#1 and TMI #2. The aggregate original I

cost of such ' common facilitics at the time that TMI #1 was placed in comme'rcial service w'as approximately $14 million, of

. I which Met-Ed's share was approximately 57 million and the Pencice and Jersey Central shares were each approximately $3.5 million. )

In its rate orders relating to Poncloc (ontered June 10, 1976) and Met-Ed (cntered July 7, 1976), the Pennsylvania Public Utility Commission excluded from rate base one-half of their 1

respective investments in such common facilities as being assignable to TMI #2, and suggested the continued accrual of AFC thereon. Pursuant thorcto, one-half of their cost of such common facilitics will be regarded by Met-Ed and Penclec as

' assignable to TMI #2 and the interests in TMI #2 to be transferred' 4-I

I by Met-Ed and Poncloc to Jersey Central will include proportion-ate interests in such facilitics. ., i

14. In accordance with the provisions of the Public  ;

i Utility llolding Company Act, for more than 30 years the planning e i

of the General Public Utilitics Corporation system facilitics i has been on a basis which, under normal conditions, would permit such facilitics to be economically operated as a single inter- i!

{

connected system confined in its operations t'o a single area or l region, in one or more states, not so largo as to impair (con-sidering the stat'e of the art and the area or region affected) the advantages of localized management, efficient operation and the effectiveness of regulation. In that light,' while facili-ties have been planned and installed on an over-all system .

requirements basis, the allocation of benefits and obligations among the system companies has been designed to result in an equitable allocation related to their own energy and capacity r equ irements . When the decisions were made to proceed with the installation of TMI #2 and Forked River, and taking into account the then anticipated dates for commercial service of TMI #2 and l Forked River, the anticipated participations in base-load energy l and capacity among the system companies were reasonably con- l sistent with those standards. Ilowever , intervening events (in-j cluding the OPEC oil embargo and subsequent price increases, I the rise in the cost of coal and uranium, the pause in the rate of increase of the consumption of c1cetricity, and the deferral of the completion dates for TMI #2 and Forked River) have made it appropriate and advisable to reallocate among the system l

companics the participation in TMI ll2 and Forked River.

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15. It in therefore proposed that Jersey Central, Met-Ed  ;

and Penelec maho the requisito conveyances and transfers and the rcquisite purchases and undertakc the necessary obligations to i

the end that Forked River and TMI #2 will be owned by them as ';

'I tenants in common, as aforesaid.

WIIEREFORE,.the Petitioner respectfully requests your 11onorable Board to waive the advertising requirements o'f Rulo 14:6-10(b) and to approve such transfor by Jersey Central.

JERSEY CENTRAL POWER & LIGIIT COMPAhY  !-

By s/ I. R. Finfrock, Jr.

I. R. Finf rock, Jr. , Vice Presidend Dated: January 13, 1977 Person to whom communications should ,

be addressed:

s/ William T. Osborne J i'

William T. Osborne 4 Attorney for Petitioner Post Office Box 1279R Morristown, Now Jersey 07960 ,

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p 9'4 I EXil1 BIT D-l'(a)

Chhtte of I4ciu Scracg l DEPAllTMENT OF PUGLtC UTILITIES , ,

DoARD OF PUOLIC UTILITY CoMMisGloNt:f1G j 101 COMMtisCE 16TREET ,

NEWAltK. NEW JCR$EY 07102 IN T11E MATTER OF THE PETITION OF : 8/4/77 JERSEY CENTRAL POUER & LIG11T COM- : CONSENT ORDER PANY FOR APPROVAL OF Tile SALE OF A:

50% UNDIVIDED INTEREST IN FORIED : DOCKET NO. 771-32

. RIVER GENERATING STATION  :

BY TIIE BOARD: .

(BEFORE CllIEF 11 EARING EXAMINER MICllAEL MEHR, ESQ.)

By a petition, dated January 13, 1977, Jersey l

Central Power & Light Company (" Jersey Central") sought the Board's authority to sell, in one or more installments, to its af filiates, Metropolitan Edison Company (" Met-Ed") and Pennsyl-vania Electric Company ("Penclec"), two undivided 25% interests i

' in its Forhed River generating station ("FR") which is now under construction (i.e. , total undivided interests aggregat- ,

ing 50%) and to acquire, in one or more installments, from Met-Ed and Penelec an aggregate additional 40% undivided interest in the Three Mile Island generating Unit No. 2 I

("TMI-2") which is also under construction. "

t The principal purpose of the proposed sales and purchases is to bring the ownership by Jersey Central, Met-Ed and Penclec of base-load generating capacity during the period 1978-1983 into line with their respective individual requirements in the light of the changes in such require-l l

ments that have developed since the present ownership of TMI-2 and FR were established several years ago.

Ecarings ucre held on this petition in which the Staff of the Board, the Division of Rate Counscl, Office of l

the Public Advocate (" Rate Counscl") and others have partici-pated.* Jersey Central and Rate Counsel cach presented witnesses who submitted prepared testimony and were cross-examined. The hearing record uas closed, the parties waived

( a llearing Examiner's report and the matter was certified i

directly to the Board for decision. Briefs were filed by the Company and Rate Counscl on the only issue which' remained after the conclusion of the proceedings.

i

• The hearings on thin petition were also consolidated f

with the record in Jersey Central's pending rate ,

proceeding in Dochet No. 7610-1021.

l

)

During the course of the proceedings, Rate Counsel indicated that they would have no objections to the transac-tions proposed by Jerscy Central if (a) the basis of pricing ,

the transactions proposed by Jeracy Central were modified in certain respects and (b) Jersey Central would agree to certain conditions which wouldAs satisfy the concerns of Rate-Counsel and their uitnesses. hereinafter set forth, (

l Jersey Central has submitted undertakings which satisfy l these conditions and, except in one respect', has agreed to the modifications of the basis of pricing the transactions ,

proposed by Rate Counscl.

j Jersey Central submitted detailed studies of its need for additional base load generating capacity. A sub- j stantial part of its present generating capacity is oil-fired 1 steam capacity and combustion turbines. Under .present and j prospective market conditions for fuel oil, the generation of electricity by oil-fired facilitics is costly to the  :

)

Company's customers, raises questions about System reliability '

because of probicms of availability of supply, and is incon-sistent with the National policy of reducing dependence upon imported fuel oil. It is, therefore, desirabic that the Cor..-

pany have additional base load generation utilizing other fuels. Rate Counsc1's expert witness, Dr. Robert Spann, testified that he concurred that the Company had need for additional base load generating capacity during.the period 1478-1983 and that, under the conditions agreed to by the

• Company and hereafter summarized, the acquisition by the Company of the proposed additional interest in THI-2 is a >

reasonabic means of providing for such needs.

The Board is satisfied that at'this point in time this transaction is necessary and desirable for these. reasons :

(a) The additional base load gc'ncrating capacity which Jeracy Central proposes to acquire from' Met-Ed and Penelec, namely, an additional 40% undivided interest in TMI-2, or 352 MW, is reasonably related to Jersey Central's needs during the period after  ;

TMI-2 is placed in service (expected to be in the  !

Spring of 1978) and before FR is placed in service (expected to be in the Spring of 1983);

l (b) Uith the additional TMI-2 generating capacity, Jersey :ntral uill be abic to sell one-half of its in FR -- i.e. , the combination of the TMI-2 l interet t.

generating capacity proposed to be owned by Jeracy-Ce in 1983 and approximately on half of the Seward ,

Station generating capacity (scheduled to be placed in service in 1984) will be reasonably related to Jeracy Central's need for additional base load generating capa-city. By adding ownership of such additional base load generating capacity in these smaller increments, Jeracy Central will better match its base load generating capability tomers' to its requirements for meeting its cus-cncrgy n these requirements.

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' In response to the concerns expressed by Rate ;I Counsel and their witncosca, Jersey Central has submitted 5l the following undertakings : $

i Jersey Central vill preparc and submit  :

to the(1) Board, within four months af ter the Board's j authorization of the purchases and sales covered by  ;

the Petition, a report setting forth the r'caults of il Jersey Central's study, now instituted, of possible j!

means of mitigating the immediate or short-term impact ql on Jersey Central's customers of an extended outage of j Jersey Central's base load generation and will furnish y copics of such report to Rate Counscl; $

fl Jersey Central vill not, solely as a w result(ii) of the additional financing requirements placed [

upon it in 1977-1978 in connection with -2, the sock acquisi- q tion interim of the rateadditional increasesinterests in TMI prior to the to be effective I this time that TMI-2 is placed in commercial however, preclude service; Jersey ,

undertaking shall not, -

Central (A) from secking final rate relief in the 7610-1021* or in any proceedings pending in Docket Ho, '

other proceeding, or (D) from socking interim raterelie fores.cen, Jersey Central should conclude that interim rate,rclief was appropriate. 2 *

(iii)

Jersey Central shall furnish to the Board (with copies to Rate Counsc1) datd relating to the ,

increases in cost of TMI-2 during the course of con-struction and reasons for such increases, which matters ,

will be examined in the continued proceedings in .

Docket No. 7610-1021, and .

l Jersey Central shall furnish to the Board i (iv) (uith and Staff copics to Rate Counsel), promptly ,

l l after the consummation of the transactions for uhich authority is herein sought, copics of the journal i

entrics and supporting data relating to such trans- l actions.

7610-1021 was filed

• Jersey Central's petition in Docket No. Hearings in that proceeding ha on October 15, 1976.

been concluded and stipulations resolving 'all but one ofb

the f actual issues on revenue requirements have been su -Briefs on that

] mitted for the Board's can' sideration.

p inn issue are to be submitted' in the very near future.

Jersey Central has requested that af ter the B 7610-1021 ccedings in Docket No'.

l mission of data dealing with the period subsequent to thatJers dealt with in the present record.

that, if the proceeding is so continued, 48-2-21 on the it will waive the suspension statutory limit under N.J.S.A. ding period for the ratcc involved in the continued proceeIn hat this the a until llay 1,1977.to the proceeding and haned upon itn determinatio will bent servo the public interest,the Ucaring Examiner in thin in approprtato and direcenno to continue the proceeding.

Docket No. 7610-1021

i StafRebortE l 77xPresdints'OmmhionO2 l r g ,E EL' i 1 1 E E's

ACCIDENTAL' l Tl!REE YIII;E ISTAND l

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l TheNudear l SCPHldfor!0111llilbffl011 o s

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• O Tk THI-2 construction permit application (then for Oyster Creek Station, Unit 2) was filed with the AEC on April 22, 1968.188/

the AEC's licensing process required two formal steps, the constructionAlthough permit (CP) and the Operating License (OL), its predominant characteristic in the days of reactor development was " informal cooperation" between the applicant and the AEC staff, and many AEC licensing decisions were made " removed from public view and without any explanatory public record."189/

NRC's formal two-step licensing procedure also is preceded by an informal pre-application phase, during which there is dialogue between NRR staff and the applicant.

managers: As described by one of NRC's TMI-2 project Frequently, [the utility has] come in to discuss the project, discuss the site, inform us of some of the basic features of the plan to the reactor, things of that kind, and to discuss review philosophy perhaps, things like that, prior to tendering [the I application} . . . .The initial discussions, the pre-tendering dis-j cussions, may be a year or two in advance of the actual tendering.

It just depends in large measure on the utility involved.190/

During this phase, the NRC staff and the applicant may reach under-

! standings as to siting, general design, and applicable license require-ments.191/ Although this activity can serve to avoid delays that would l

i occur if an incomplete application were filed, or if it contained siting

or general design criteria that the staff would consider unacceptable, it occurs out of public view. No notice is given until the construction -

permit application is formally docketed by the NRC.192/

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j 188/ See Application for Reactor Construction Permit and Operating P.

License, Oyster Creek Nuclear Station Unit 2, April 22, 1968. The et amended TMI-2 permit application was filed in April 1978. See appli- g,

cation for Reactor Construction Permit and Operating License, Three Mile

' Island March 10, Nuclear 1969.Station Unit 2, Docket 50-320, Amendment No. 6, revised '~

j For a description of the format to be followed in a safety analysis report, see Regulatory Guide 1.70, " Standard Format and 19

~

3 Content of Safety Analysis Reports for Nuclear Power Plants LWR Edition" l (Revision 3, November 4, 1978). The THI-2 construction permit was 19. .

issued by the AEC on Nov. 4, 1969. Hij Ci -

189/ Rolph, supra, at 38. ass 4

as

! The 190/ Silver deposition at 8; see also 10 CFR 2.101(a)(1); 1978 NRC Annual Report at 57. v.

197 I

191/ Silver deposition at 7, 9.

195 f l 192

-/ 1978 NRC Annual Report at 18. depc 19@/'

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I i,_____.______ _-

FINDINGS AND RECOMMENDATIONS IN VOLUME ll y v

mendations and the page number (s) where that find- ,

The three-part Volume 11 is an integral part of the  !

ing or recommendation can be found are listed Special Inquiry Group Report and contains many I detailed findings and recommendations. Some of below. The reader is advised to refer to the these findings and recommendations are reflected in appropriate sections of Volume 11 so that the mean-ing and importance of particular findings and recom- l Volume I, but others are not. As an aid to the l mendations can be judged in context.

reader, the general subject of the findings or recom-Subject Category' Pages Section j

3 PART 1 1

l .A.1.c Licensing and Regulatory System: An overview of its major deficiencies in Assessing Reactor Safety . .

F&R 23-25 4 1.A.2 Relevant Staff Actions Taken Outside of the Adjudicatory F 36 Process. .

F 40,44 l .A.3.a Regulatory Requirements Review Committee .

F 49,50 1.A.3.b Quality Assurance .

F 55

1. A.3.c Generic issues ,

F 57,58 1.A.3.d Technical Qualifications .

F&R 104-105 1.B.1 Licensing History of TMI 2 . .

F 114 f.B.2 Operating History of TMl Nuclear Station .

F 126 1.B.3 Inspection History at TMl Site .

F&R 130,135-138 l.C. Precursor Events F 140 e Dopchie letter 4/27n1. .

F 141,142 e BEZNAU incident 8/20/74.

F 143,144 e Reactor Safety Study 10/75 F 148,149 e Michelson Report 9/77 F 155,156 e Davis Besse 9/24n7 F 161 e Kelly-Dunn Memoranda 11/77.- .

F 164 e Pebble Springs ACRS Questions .

F 171 172 e Creswell Concerns 12/77.

F 173 e Israel-Novak Note 1/10/78.

F 175

• Rancho Seco - 3n8 .

F 176 e TMI - 3/78 Sternberg memo .

F&R 198 199 1.D. Pressurizer Design and Performance: A Case Study .

F&R 204, 241-247 1.E.

Incentives to Begin Commercial Operation"

• F = Findings (or Conclusiont.)

R = Recommendations 1260

d B LICENSING AND OPERATING H STORIES

1. LICENSING HISTORY OF TM!-2 tion permit (CP) stage is described. We see in this section that all concerns raised (some of which,

a. Introduction such as small break analyses and emergency plan-ning, would later become significant with respect to This portion of the Special Inquiry Group Report the TMI-2 accident) were ultimately decided favor-is a summary analysis of the licensing history of the ably by the regulatory bodies involved, and the con-TMI-2 project. A background description of the re- struction permit was issued.

gulatory institution in which the licensing reviews The postconstruction permit review period, some took place is included in order to provide additional 4 % years in duration, is described in Section I.B.1.d insights into the events that did or did not occur. and includes a summary of the licensing Following this introduction, an initial summary, re- organization's activities. Since the Atomic Energy views the overall chronology of the licensing of both Commission (AEC) licensing staff's interaction with TMl-1 and TMI-2, which are nearly identical plants the TMI-2 project was only intermittent during these and adjacent to one another on the same island in years, and important regulatory events were the Susquehanna River. reshaping the review process, some of these events Section i.B.1.c presents a summary of the TMI-2 are briefly mentioned. In addition, some of the diffi-construction permit review, set against a historical culties inherent in the conduct of the postconstruc-background description of the structure of the tion permit licensing review are discussed.

licensing staff and the evolution of the licensing pro- The operating license review period is presented cess up to that time. The construction permit re- in Section I.B.1.e. During this time the Atomic view was completed in approximately 1% years Energy Commission was abolished and the regula- ,

during a period of rapid expansion of the nuclear in- tory staff was restructured into the Nuclear Regula- I dustry and the agencies designed to regulate it. tory Commission. A later expansion of the licensing Safety criteria have only been partially developed staff was designed in part to incorporate the feed-and are still evolving. Staff and the Advisory Com- back of operating experience into new or modified mittee on Reactor Safeguards reviews are also licensing requirements.

described in this section and several of the issues An overall operating license review summary covered in those reviews are discussed. In addition, stresses the role of the ACRS and the Atomic Safe-the TMI-2 public hearing process at the construc- ty and Licensing Board. The operating license is-65

sued for TMI-2 is discussed to show that it con- commercial power reactor licensed to operate was

, tained a large number of safety-related work items Indian Point 1, which could produce only about one- '

, that had to be completed and approved by the NRC fourth the thermal power of the 177 fuel assembly i prior to becoming an effective full power license. design and was a considerably different reactor This is not unusual in NRC practice, and does not, system design.

of itself, imply that important safety issues are After the AEC staff review and a public hearing avoided by the issuance of a license. But the is- before an ASLB in April 1968, the Commission is-suance of a license does realign work priorities sued a provisional construction permit for TMI-1 on within the NRR and leads to some diffuson of the May 18,1968. In March 1970, Met Ed filed a Final i

clear lines of project management responsibility and Safety Analysis Report as a prerequisite to obtain authority extant prior to issuance of a license. an operating license for TMI-1. Following staff re-The final portion of Section I.B.1.e examines the view and a public hearing lasting 3 days in No-conduct of the review with respect to several safety vember 1973, an operating license was issued for j issues of significance to the TMI-2 accident. The TMI-1in April 1974.

! issues discussed generally show how Met Ed met in April 1968, JCPL submitted an application for a

the staff's requirements at the time of the review. nuclear plant to be located adjacent to the existing However, these requirements or the procedures to Oyster Creek 1 in Ocean County, New Jersey. In ,

! ensure compliance with them were inadequate to March 1969, JCPL and Met Ed, as co-owners of this guarantee that the TMl-2 accident would not occur. plant, jointly submitted an amendment to that appli-

Section I.B.1.f concludes this historical overview cation indicating a site change to the site where j with findings and recommendations presenting TMI-1 was under construction. In ' January 1971, the

some points that do not necessarily correspond to Pennsylvania Electric Company was added as a i specific parts of the preceding sections. The points co-owner of the facility. It and JCPL each owned 3 are the product of both this particular phase of the 25% of the facility and Met Ed owned the remaining SIG's investigation and of the consultation with 50%. The proposed plant was dessnated TMI-2

] many people who participated and assisted in this and was to be located adjacent to TMI-1. This plant j inquiry. was very similar to the TMI-1 plant, in using a B&W nuclear steam supply system essentially identical to that already under construction for the TMI-1 unit.

b. Summary of Licensing Evento-TMI-2 and The AEC reported the results of its review of the TMI-1 TMI-2 construction permit application in a Safety Evaluation Report dated September 5,1969. Fol-In May 1967, Met Ed applied to the AEC for a lowing a public hearing, Provmonal Construction license to construct and operate the first unit, TMI-1, Permit No. CPPR-66 was issued for TMi-2 on No-at a site on Three Mile Island in the Susquehanna vember 4,1969.

River, about 10 miles southeast of Harrisburg, Pa. The applicant dxketed the FSAR for TMi-2 on TMI-1 is jointly owned by Met Ed, the Jersey Central April 4,1974. The NRC, newly created by the Ener-Power and Ught Company (JCPL), and the Pennsyl- gy Reorganization Act of 1974, assumed the regula-vania Electric Company, which are named as licen- tory functions and personnel of the AEC and be-sees. came functional in January 1975. Staff review The plant was to use a 177. fuel assembly Bab- resulted in a September 1976 release by NRC of a cock and Wilcox (B&W) nuclear steam supply sys- Safety Evaluation Report related to the operation of tem (NSSS) identical to those proposed by Duke TMl-2.

Power Company in their December 1966 application At the time the Safety Evaluation Report was to construct the Oconee 1 and 2 reactor plants. released several issues remained to be resolved. In Three other applications docketed in 1967 proposed September and October 1976, the NRC staff and to use the same B&W NSSS. the applicant met with the ACRS to review the appli-An unexpected spate of reactor plant applica- cation, and the ACRS issued a letter report to the tions were submitted to the AEC in 1966 and 1967, Commission on October 22,1976. The Commission as 30 additional new applications were docketed staff issued two supplements to the Safety Evalua-than the total for the previous 12 years. A table tion Report in March 1977 and February 1978, indi-showing some data for plants that have been cating the resolution of all matters pertinent to licensed to use B&W reactors is shown in Appendix licensing the plant to operate.

l.3. As this table indicates, prior to the series of Petitions to intervene in the operating license re-reactors typical of the TMl design, the only B&W view which began in April 1974 were received, and 66

4 the Commonwealth of Pennsylvania requested to Then,a responsible 4

a participate as an interested State. In July 1974, the for ma taff review, i ASLB designated to rule on intervention requests preparii ' Evaluation

] granted the Commonwealth's request as well as the Report, and for representing the staff before both j joint intervention request of two local environmental the ACRS and the ASLB. At that time, however,

interest groups. This set the stage for a public more of the technical review was conducted by the

) hearing on the operating license application, a project manager and his associates. Specialist proceeding not required at the operating license branches in DRS were used when necessary to 1 stage absent intervention. provide a depth of wpertise not available in the pro-l The hearing on reactor safety issues conducted ject management organization.

1 during 1977 resulted in an initial decision on De- Because the review process was not as formally

} cember 19,1977, that authorized the director of Nu- structured as it is today, more of the technical re-

! clear Regulation: view responsibility could be retained within the pro-

[Tjo continue in effect the construction permit of ject management group, and usually was. Both the

.., and to make such additional findings on uncon- scope and depth of the review were more limited tested issues as may be necessary to the issuance than the reviews conducted today, however. As a of a full-term operating license for that unit con- result, reviews were completed within a year by sistent with the terms of this initial Decision. fewer staff members than participate in more recent Following the resolution of several outstanding safe- reviews. The technical assistance obtained during ty matters, the NRR issued Facility Operating the review from DRS, as well as from within DRL, License No. DPR-73 for TMI-2 on February 8,1978. was from assistant directorates for reactor technol-Simultaneously, Supplement No. 2 to the Safety ogy and reactor operations, groups parallel to the Evaluation Report was issued documenting the assistant directorate comprising the reactor pro-resolution of all identified safety issues. As with jects branches.

other operating licenses issued at that time, resolu- During this same period, the regulatory phi;oso-tion in some cases required plant operational limita- phy was undergoing changes. Up to 1966, the AEC tions, which were included as conditions in the premised its regulatory requirements on an ap-license calling for certain preoperational tests, start- preach to safety that focused on the provision of a up tests, and other items. Some conditions requiod strong stce! containment around the reactor and a further NRC approval before progressing through policy of remote location away from populated various operational modes needed to reach full areas. The Commission's strategy was to confine power. the consequences of a postulated maximum credi-ble accident rather than to guarantee prevention of that accident. The safety philosophy was developed during the early years of commercial

c. TMI-2 Construct lon Permit Review-May p wer re ctors when 100 MW electnc plants were 1968 to November 1969 typical. By 1966, only six commercial nuclear elec-tric plants were in operation, all at 265 MW or less.

Historical Background By 1967, however, reactor plants were being At the time of docketing and during the subse- designed to produce 800 to 1000 MW, thereby quent construction permit review for TMl-2, the re- greatly increasing the potential consequences of a gulatory staff structure was facing an unprecedent- serious accident.

ed expansion of the commercial utilization of nuclear A commonly accepted definition of risk is an ex-power. Between 1962 and 1966, the AEC received pected loss, quantitatively expressed as the proba-construction permit applications for 26 reactor units, bility of a postulated accident times the conse-15 of which were submitted in 1966.2 In 1967,18 quences of that accident. The risk of a serious ac-new applications were docketed, and in 1968, 10 cident was certainly increasing rapidly, if considered more followed. At that time, the entire staff review only from this viewpoint. Simple containment of the of an application to construct and operate a nuclear larger amounts of energy and stored radioactivity powerplant was conducted within two groeps that could be released from the larger reactor i known as the Division of Reactor Licensing (DRL) deigns was becoming more difficult to guarantee and the Division of Reactor Standards (DRS) (see by analysis. Designs began to include additional the organization chart in Figure 1-1). An application backup systems, such as the emergency core cool-

, was assigned to a licensing project manager in one ing system, to mitigate the consequences of large of the several reactor project branches in DRL loss-of-coolant-accidents.

l I

67