ML20117F222

Application for Amends to Licenses NPF-76 & NPF-80, Requesting NRC Approval for Operating Company to Be Formed by Owners,To Become Licensed Operator for STP & to Have Exclusive Control Over Operation & Maint of Facility

ML20117F222
Person / Time
Site:	South Texas
Issue date:	08/23/1996
From:	HOUSTON LIGHTING & POWER CO.
To:
Shared Package
ML20117F225	List: ML20117F222 ML20117F228 ML20117F720
References
NUDOCS 9609030378
Download: ML20117F222 (18)

Text

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HOUSTON LIGHTING & POWER l SOUTH TEXAS PROJECT UNITS 1 AND 2 DOCKET NOS. STN 50-498, STN 50-499 LICENSE NOS. NPF-76 AND NPF-80 i

(Change in Licensed Operator of the Facility)

LICENSING DOCUMENT INVOLVED: OPERATING LICENSE NOS. NPF-76 and NPF-80 REASON FOR REQUEST:

This amendment application requests the Nuclear Regulatoiy Commission (NRC), pursuant to 10 CFR 50.90, to amend Facility Operating Licenses No. NPF-76 and NPF-80 (the " Licenses")

to include as a Licensee thereunder an operating company (OPCO) and to authorize OPCO to use and operate South Texas Project Units 1 and 2 and to possess and use related licensed nuclear materials in accordance with the same conditions and authorizations included in the current operating licenses.

Houston Lighting & Power Company (HL&P), City Public Service Board of San Antonio (CPS), Central Power and Light Company (CPL), and City of Austin, Texas (COA) (the

" Owners") are currently the holders of the Licenses for South Texas Project Units 1 and 2 (STP). The operating licenses presently authorize HL&P, CPS, CPL, and COA to possess STP as owners, and authorizes HL&P to use and operate STP in accordance with the terms and conditions of the licenses. HL&P is authorized to act for CPS, CPL, and COA and presently has exclusive responsibility and control over the operation and maintenance of the facility under the licenses. After istuance of the proposed amendments, HL&P will be authorized only to possess (i.e., own) the facility.

As explained in more detail below, the Owners will enter into an operating agreement with l OPCO. In accordance with the proposed operating agreement, OPCO will assume exclusive l responsibility for the operation and maintenance of STP following approval of the amendments  ;

to the STP operating licenses as proposed in this application. )

Under the proposed arrangement, ownership of STP will remain unchanged with each Owner retaining its current ownership interest. OPCO will not own any portion of STP. Likewise, the Owners entitlement to capacity and energy from STP will not be affected by the proposed change in operating responsibility for STP from HL&P to OPCO.

OPCO will be dedicated solely to the operations of STP. Once the proposed amendments become effective, it is expected that substantially all personnel of HL&P who are dedicated to the operation of STP will be transferred to and become employees of OPCO. This revised operating arrangement is expected to enhance the already high level of public safety, operational efficiency, and cost-effective operations at STP.

9609030370 960823 PDR ADOOK 05000498 P PDR

Until the time the NRC issues the operating license amendments requested in this application and such amendments become effective, HL&P acting for itself and the other owners will i continue to be responsible under the operating licenses for the operation and maintenance of STP.

DISCUSSION:

I. INTRODUCTION l STP is a dual unit nuclear powered electric generating facility that has been constructed and is being operated by HL&P on behalf of itself and CPS, CPL, and COA pursuant to a Panicipation Agreement dated as of July 1,1973, as amended , (the "Panicipation Agreement"), and in accordance with the STP Operating Licenses and certain other permits and licenses. Under the Participation Agreement, HL&P acts as Project Manager for the other owners and has exclusive responsibility and control over the construction, operation and maintenance of STP. The ownership share of STP is HL&P [30.8%), CPS [28.0%], CPL

[25.2%] and COA [16.0%]. Appropriate changes will be made to the Participation Agreement to reflect the change in the licensed operator of STP from HL&P to OPCO.

Once all organizational arrangements are finalized, OPCO will be established as a Texas non-

, profit Corporation created, controlled, and financed by the Owners. OPCO's sole corporate l purpose will be the operation of STP on behalf of and for the benefit of the Owners. l 1

The relationship between the Owners and OPCO will be defined and embodied in an operating agreement. This operating agreement will define OPCO's rights, responsibilities, and 3

limitations of its authority regarding the operation of STP and will state that OPCO has the sole authority, as the operator of the South Texas Project, to make all decisions relating to public health and safety. The Owners will continue to provide all funds for the operation, maintenance, and decommissioning by OPCO of STP. The responsibility of the Owners will include funding for any emergency situations that might arise at STP.

i Upon the effectivity date of the proposed amendments substantially all employees of HL&P l who are presently dedicated to the operation of STP (approximately 1600 persons) will become employees of OPCO. Under the Operating Agreement, OPCO's services will be provided at cost; the Owners will set limits on OPCO's spending and contracting authority; and the Owners will continue to provide their allocable share of the funds required for the operation, maintenance, and decommissioning of STP.

In addition, OPCO and the Owners propose to enter into a related Support Agreement and a Switchyard and Transmission Interface Agreement. Under these agreements, the Owners will l provide to OPCO (1) necessary personnel, supplies, and services to support the operation of STP and (2) access to and necessary control over the switchyard facilities at STP and necessary personnel, supplies, and services penaining to the operation and maintenance of the associated transmission equipment.

i The plan for OPCO to assume operating and management responsibility for STP is conditioned l 1 on receiving favorable rulings from the hternal P.; venue Service (IRS) as to certain tax aspects j of the proposed arrangement. % N= will file with tN IRS requests for private letter i mlings to the effect that the proposed arrangements wm not have an adverse tax consequence i for any Owner. HL&P will keep the NRC informed of the status of these ruling requests, j l

l II. REOUESTED APPROVALS

1 This application requests the NRC, pursuant to 10 CFR 50.90, amend Operating License Nos.

NPF-76 and NPF-80 to reflect in the licenses the change in the entity authorized to operate STP, Units 1 and 2, from HL&P to OPCO as well as to designate OPCO as the entity authorized to possess and use the related licensed nuclear materials. Specifically, HL&P hereby requests the NRC amend the Licenses to change the name of the Licensees for STP, such that [the following is applicabb to each license (facility) individually]:

(1) OPCO, pursuant to Section 103 of the Act and 10 CFR Part 50 is licensed to

. possess, use, and operate the facility at the designated location in Matagorda County, Texas, in accordance with the procedures and limitations set forth in the l

operating license l

(2) HL&P, CPS, CPL and COA, pursuant to the Act and 10 CFR Pan 50, are licensed to possess the facility at the designated location in Matagorda County, l Texas, in accordance with the procedures and limitations set fonh in the license; OPCO, pursuant to the Act and 10 CFR Pan 70, is licensed to receive, possess I (3)

and use at any time special nuclear material as reactor fuel, in accordance with the limitations for storage and amounts required for reactor operation, as described in the Final Safety Analysis Report, as supplemented and amended;

(4) OPCO, pursuant to the Act and 10 CFR Parts 30,40, and 70, is licensed to receive, possess, and use at any time any byproduct, source and special nuclear material as sealed neutron sources for reactor start-up, as sealed sources for reactor instrumentation and radiation monitoring equipment calibration and as fission detectors in amounts as required; 3-

(5) OPCO, pursuant to the Act and 10 CFR Parts 30,40, and 70, is licensed to receive, possess and use in amounts as required any byproduct, source or special nuclear material without restriction to chemical or physical form, for sample analysis or instrument calibration or associated with radioactive apparatus or components; and l

(6) OPCO, pursuant to the Act and 10 CFR Parts 30,40 and 70, is licensed to 4 possers, but not separate, such byproduct and special nuclear materials as may be produced by the operation of STP.

Other conforming license changes are noted in the attachments to this application. Conforming l changes, if necessary, in insurance and indemnity agreements will be made in due course by separate correspondence. Set forth below is the information in support of this application to amend the Licenses.

III. GENERAL INFORMATION A. Proposed Additional Licensee:

(LATER) i I

B. Address: l 1

(LATER)

C. Description of Business or Occupation:

Prior to the effective date of these license amendments, OPCO will be organized by the Owners as a Texas non-profit corporation and the Owners will take necessary corporate action to authorize it to coerate STP. OPCO will be created, controlled, and financed by the Owners, and its puipose will be to operate and maintain STP for the Owners.

Upon receipt of necessary regulatory approvals, OPCO, as distinct from the Owners of STP, will have responsibility for and control over the construction, operation and maintenance of STP.

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D. Organization and Management of Operating Corooration:

OPCO will be a non-profit, non-member corporation organized and existing under the laws of the State of Texas. Its principal office will be located at the South Texas Project, eight miles west of Wadsworth, Texas. The corporation will be neither owned, controlled nor dominated by an alien, a foreign corporation or a foreign government.

All directors and principal officers of OPCO are citizens of the United States. Their names and addresses are as follows:

Directors (LATER) l l

l Principal Officers  !

(LATER)

Upon issuance of the license amendments, it is anticipated that certain officers of HL&P i will become officers of OPCO.

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E. Technical Oualifications The technical qualifications of OPCO to carry out its responsibilities under the Operating Licenses for STP, as amended, will be equivalent to the present technical qualifications of HL&P. When the proposed amendments become effective, OPCO will assume responsibility for, and control over, operation and maintenance of the facility.

The present Plant organization, the Oversight organizations, and the Engineering and Support organizations will be transferred essentially intact from HL&P to OPCO. The technical qualifications of the proposed OPCO organization, therefore, will be at least equivalent to those of the existing organization.

A central objective in planning the proposed transfer of employees and operating responsibilities from HL&P to OPCO has been to ensure there is no disruption to the opemtion of the plant and to respect the integrity of the existing, successful organization. When the amendments become effective, OPCO will operate, manage and maintain STP in accordance with the conditions and requirements established by the NRC with the same regard for public and personal safety heretofore exemplified by HL&P. Therefore, in the proposed OPCO organization, the nuclear organization of STP will be preserved with the only change being that the senior nuclear executive will report directly to the Board of Directors of OPCO rather than to the President and Chief Operating Officer of HL&P. Thus, the current HL&P Executive Vice President and General Manager, Nuclear, of STP will become the President and Chief Executive Officer of OPCO and will continue to be the officer at the si'e responsible for the overall safe operation and maintenance of STP.

The Quality Assurance organization for the plant will also have direct access to the President and Chief Executive Officer of OPCO on matters re.ated i to quality; therefore, the effectiveness of this organization will not be degraded by the proposed change.

The above organizational approach allows the transfer of HL&P personnel to OPCO with virtually no organizational changes or disruption to the existing, dedicated site organizations, which include the engineering, quality assurance, and licensing organizations supporting STP. Further, ongoing plant improvement plans and other initiatives will not be impacted.

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! F. Statement of Benefits of the License Amendment The assumption of operational responsibility for STP by OPCO will provide benefits inherent in this type of operating arrangement. Some of the expected benefits are as

! follows:

i (1) As a result of the formation of OPCO, OPCO's senior management will be devoted solely to the business of nuclear plant operations. Such single-purpose management will be able to pursue overall excellence in nuclear power l operations without distractions from the requirements and duties of other areas of the electric utility business.

(2) As a result of the formation of OPCO, the salary stmetures, career path policies and procedures for nuclear employees of OPCO will be separate and distinct from HL&P non-nuclear employees and will be determined by the management and Board of Directors of OPCO. This will permit nuclear managers to focus on the special needs, qualifications, and requirements of nuclear employees. Human resource and compensation policies tailored to nuclear operations will allow OPCO to be competitive in the market for skilled nuclear professionals without being influenced by the potential impact on non-nuclear personnel. The ability to attract superior nuclear talent and to retain quality individuals, once recruited, !

will have a direct and positive impact on the quality of overall nuclear plant operations.

(3) As a result of the formation of OPCO, HL&P will be relieved of the duties and responsibilities of acting for the other owners. This new arrangement, with HL&P taking on a status equivalent to the other owners, will relieve many of the distractions (including litigation among the Owners) that existed under the previous arrangement. This will allow STP personnel to focus solely on nuclear operations.

The result sought by these license amendment requests is thus consistent with the views l and perspective of the Nuclear Regulatory Commission in recent years, calling for trong I and focused management of nuclear power plant operations. j I

G. Financial Considerations  !

The proposed license amendments will not adversely impact the Owner's ability to obtain or provide the funds necessary to cover all costs for the operation, maintenance, I repair, decontamination, and decommissioning of STP. The Owners will remain liable for such costs, on a pro rata basis, under the Operating Agreement. The Owners' financial responsibility for STP and their sources of funds to support the facility will remain the same as under the present Licenses.

OPCO will be an operating company with no ownership interest in STP. OPCO, under

! the proposed Operating Agreement with the Owners, will be authorized to operate the l plant on behalf of the Owners. Further, as discussed below, the Owners will be committed under the proposed Operating Agreement to provide all funds necessary for j safe operation and decommissioning of STP, in conformance with NRC regulations.

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l To summarize, the following interrelations will be established by the Operating

! Agreement between the Owners and OPCO:

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l . 1, OPCO will not have any ownership interest in STP; however, it will have overall

! responsibility for the safe operation of STP. OPCO will operate STP in

accordance with the Operating Licenses and shall have exclusive responsibility for making safety decisions, f

f 2. The Owners will retain approval authority over ultimate spending limits. This retained authority will limit OPCO spending authority but will not encumber j OPCO's ability to make operational safety decisions and will have no impact on j safe operation of STP.

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, 3. Pursuant to the Operating Agreement, all costs, including costs for the operation, maintenance, repair, decontamination and decommissioning of STP, incurred or i accrued am liabilities of the Owners when incurred or accmed and am borne in i proponion to their respective undivided interests in STP and the Owners will commit to provide OPCO funds to pay these costs.

i l Thus, the sources of funds for operating STP will remain unchanged.

i j A full financial qualifications review is not necessary as a result of the proposed license amendments. Under the terms of the proposed Operating Agreerant between OPCO l

and the Owners, and the Panicipation Agreement (as it is proposed to be amended), all

costs associated with operating STP will continue to be borne by the Owners to the i t

same extent as they are now, and accordingly, there will be no change in the financial

qualifications associated with STP. Therefore, the information required under 10 CFR j 50.33(f) regarding the financial qualifications of OPCO to carry out the activities 1

described in this application is not necessary.

l H. Antitrust Considerations i

The plan for OPCO to operate STP will not impact the existing ownership of STP or i existing ownership of or entitlement to power. OPCO will be solely dedicated to the l operation of STP. It will not be involved in the marketing or brokering of power or energy from the facility. Funber, the proposal to designate OPCO as the entity authorized to use and operate STP will not alter the existing antitrust License conditions i applicable to the Owners. Those conditions will remain applicable to all Owners. l Accordingly, the requested amendments will have no impact whatsoever on the market I for electric power and raise no issues with respect to antitrust considerations affecting that market. Statutory antitrust review pursuant to Section 105 of the Atomic Energy '

Act and 10 C.F.R. 6 2.101(e) is not required.

l m- -s - .---- - .,-%.,.- u v,-r-

Notwithstanding this lack of applicability of the antitrust review procedure to the present application, HL&P proposes the addition of the following language as conditions of each license:

OPCO shall not market or broker power or energy from South Texas Project Unit 1 [or Unit 2, as the case may be]. The Owners are responsible and accountable for the actions of OPCO to the extent that said actions affect the marketing or brokering of power or energy from South Texas Project Unit 1 [or Unit 2, as the case may be] and, in any way, contravene the antitrust conditions of this paragraph or Appendix C of this license.

I. Restricted Data l I

This application does not contain any Restricted Data or other classified defense l information, and it is not expected that any such information will become involved in the licensed activities. However, in the event that such information does become ,

involved, OPCO agrees that it will appropriately safeguard such information and it will I not permit any individual to have access to Restricted Data until the Office of Personnel Management shall have made an investigation and report to the NRC on the character, i associations and loyalty of such individual, and the NRC shall have determined that permitting such person to have access to Restricted Data will not endanger the common defense and security of the United States.

IV. SPECIFIC INFORMATION REGARDING RELATED ISSUES A. Public Health. Safety and Welfare Considerations 1

The proposed license amendments would designate OPCO as a Licensee and authorize OPCO to manage, operate, and maintain STP on behalf of the other Licensees (the Owners). It would not affect the physical configuration of the  ;

facility or adversely affect the Technical Specifications under which STP j operates. Moreover, as described in this application, the technical qualifications i of OPCO to operate STP will be at least equivalent to those of HL&P. The proposed license amendments will therefore not have any adverse impact on the public health, safety and welfare.

B. Emergency Planning l Upon approval of the proposal to authorize operation of STP by OPCO, OPCO will assume authority and responsibility for functions necessary to fulfill the emergency planning requirements specified in 10 CFR Q 50.47(b) and Part 50, Appendix E. No substantive changes will be made to the existing STP Emergency Plan presently implemented by HL&P nor will there be any changes l to the existing Emergency Response Organization as a result of these proposed amendments. i 9

Following the assumption of operating responsibility by OPCO, emergency planning support will be provided by HL&P as needed. In essence, to the extent that personnel, resources, and facilities are not being transferred to OPCO, HL&P will continue to fulfill selective emergency planning functions. These functions will be thoroughly reviewed, and the required support will be assured by a support agreement that will be entered into between HL&P and OPCO under which HL&P will provide personnel, supplies and services to OPCO necessary to suppon the STP Emergency Plan. Long-term utilization of HL&P's resources in these areas will be based on cost effectiveness and existing relationships with offsite organizations and agencies.

Appropriate action will also be taken with respect to existing agreements for support from organizations and agencies not affiliated with the Licensees, to notify the panies to such agreements of OPCO's relationship with the Owners and OPCO's responsibility for management and operation of STP. This will be accomplished by HL&P prior to the change of responsibility.

In sum, the proposed license amendments will not impact compliance with the emergency planning requirements. Because the effectiveness of the Emergency Plan will not be decreased, specific emergency plan and procedure changes to reflect the change in the entity responsible for plant operation will be submitted to the NRC after the changes are made, in accordance with 10 CFR 50.54(q) and Appendix E,Section V, as appropriate.

C. Offsite Power

.Offsite power is currently assured to STP over transmission facilities owned or controlled by the Owners. These arrangements will not change as a result of the change in operational control requested by this application. The proposed license amendments to authorize assumption of operating responsibility by OPCO involve no changes in the ownership or design of the offsite power system for STP, or in its operation, maintenance or testing. Upon approval of the amendments, the Owners will continue to fulfill their current responsibilities with respect to compliance with General Design Criterion (GDC) 17.

GDC 17 specifically requires that there be an assured source of offsite power to the plant. Pursuant to this requirement, the Owners and OPCO will specify as part of the Operating Agreement (1) the arrangements for provision of a continued source of offsite power and (2) the arrangements for controlling operation, maintenance, repair, and other activities with respect to the switchyard and the transmission lines such that adequate independent sources of offsite power will continue to be provided. The Operating Agreement will also stipulate that the Owners will not make any changes to facilities, procedures or practices that could affect the electrical transmission or distribution facilities which provide offsite power to STP without prior consultation with and written consent from OPCO.

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I' Based on the foregoing, there is adequate assurance that independent sources of off-site power will continue to be provided to STP.

D. Exclusion Area Upon approval of the amendments providing for assumption of o erating responsibility by OPCO, OPCO will have authority to determine all activities l within the STP exclusion area, to the extent required by 10 CFR Part 100.

The Owners control all surface and subsurface property rights within the i

exclusion area boundary of STP. With respect to property rights owned by the Owners, HL&P currently has authority, as the Project Manager, to exercise l

appropriate exclusion area control. Under the Operating Agreement to be entered into between the Owners and OPCO, it will be expressly agreed that OPCO will have unrestricted access to the property constituting the STP site including all land, facilities, switchyard, equipment and personal property on the l site. The Operating Agreement also will grant OPCO authority to exercise l_ complete control over the exclusion area as defined in the Updated Final Safety Analysis Report (UFSAR) and to determine all activities in that area.

With respect to the activities unrelated to plant operation that will occur in the l exclusion area identified in Section 2.1.2.2 of the UFSAR, there will be no change. OPCO will assume responsibility for the Emergency Plan as~ discussed above.

E. Security The proposed license amendments will not impact compliance with the physical security requirements of 10 CFR Part 73. Upon assumption of operating responsibility, OPCO will assume ultimate responsibility for implementation of  !

I all aspects of the present security program. Appropriate action will be taken l with respect to existing agreements for support from organizations and agencies  !

not affiliated with the Licensees to notify the parties to such agreements of i OPCO's relationship with the Owners and OPCO's responsibility for management and operation of STP. Changes to the plans reflecting this transition will not decrease the effectiveness of the plans and will be submitted to the NRC within  !

two months after the changes are made, in accordance with 10 CFR 50.54(p).

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F. Ouality Assurance Program i

The proposed license amendments will not impact compliance with the quality 1 assurance requirements of 10 CFR 50,- Appendix B, nor will it reduce the commitments in the NRC accepted quality assurance program description for

- STP, Upon assumption of operating responsibility, OPCO will assume the  ;

ultimate responsibility for present functions associated with the STP Quality '

Assurance Program. As discussed above, the Quality Assurance organization will have direct access to the President and Chief Executive Officer of OPCO on '

(- matters related to quality. Otherwise, the organization, function and structure of j the STP Quality Assurance organization will not be affected by these license i amendments. Changes to reflect the transition, which will be handled in j L accordance with 10 CFR 50.54(a), will not reduce the commitments in the l l

quality assurance program description.

l G. Updated Final Safety Analysis Report i

With the exception of areas discussed in this license amendment application, the proposed license amendments will not change or invalidate information presently appearing in the STP UFSAR. Revisions to the UFSAR necessary to reflect the assumption of operating authority by OPCO will be incorporated into the STP UFSAR following NRC approval in accordance with 10 CFR 50.71(e).

H. Training The proposed license amendments will not impact compliance with the operator requalification program requirements of 10 CFR 50.54 and related sections, nor maintenance of the Institute of Nuclear Power Operations accreditation for licensed and non-licensed personnel training. Upon assumption of operating I responsibility for STP, OPCO will assume ultimate responsibility for implementation of present training programs. Changes to the programs to reflect the transition will not decrease the scope of the approved operator requalification program in accordance with 10 CFR 50.54(i).

I. Decommissioning 1

!~ In accordance with 10 CFR 50.75, the Owners have certified that sufficient funding will be made available for the proper decommissioning of STP. The funding mechanisms for each Owner are in place, and the proposed change in the licensed operator for STP will not impact the Owner's obligations for the decommissioning of STP.

V. CORRESPONDENCE On the effective date of the license amendments, all NRC correspondence related to Docket Nos. 50-498 and 50-499 should be directed to OPCO as all applicable correspondence related to STP will be transmitted by OPCO. This includes license amendment requests, which were submitted earlier than and remain outstanding on the effective date of these amendment requests. OPCO will notify NRC in writing of any exceptions to this policy.

VI. ENVIRONMENTAL CONSIDERATIONS The proposed license amendments will not result in any change in the types, or any increase in the amounts, of any effluents that may be released offsite, and there will be no increase in individual or cumulative occupational radiation exposure. Accordingly, pursuant to 10 CFR 51.22(c)(9), the proposed action is excluded from the need for an environmental assessment or an environmental impact statement, and special l circumstances do not exist to otherwise require such an assessment or statement.

Alternatively, the applicants herein request that the NRC issue and publish a finding of no significant environmental impact pursuant to 10 CFR 51.32 and 51.35.

VII. EFFECTIVE DATE The proposed operation of STP by OPCO is conditioned upon the consummation of the proposed business agreements and, in addition to the NRC, requires favorable rulings by the IRS as to possible tax consequences of the proposed arrangement. It is intended that the change in licensed operator of STP take place as soon as possible after all regulatory approvals have been obtained, and in any event prior to January 1,1997.

HL&P requests the NRC review this request on a schedule that will permit final action on it as promptly as possible, and in any event before December 1,1996, conditioning the effectiveness of this action as it deems necessary upon the receipt of other necessary approvals. HL&P will keep the NRC Staff informed as to the status of the other necessary approvals and of any changes in the estimated date for consummation.

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l ATTACHMENT 3 NO SIGNIFICANT HAZARDS CONSIDERATION EVALUATION '

NO SIGNIFICANT HAZARDS CONSIDERATION EVALUATION In accordance with the requirements of 10 CFR 50.92, the following discussion is provided in support of the determination that no significant hazards consideration is created by the change proposed by this submittal.

I. PROPOSED CHANGE The proposed amendments would revise Facility Operating License Nos. NPF-76 and NPF-80 for STP to authorize OPCO to act on behalf of the owners of STP with responsibility for and control over the operation and maintenance of the facility.

II. BACKGROUND Under the terms of the proposed amendments, the Operating Licenses for STP would recognize OPCO as the legal entity which will provide the technical and managerial resources for the continued safe operation of the facility, and as the entity with exclusive authority to make operational safety decisions. The proposed license amendments involve no change in the ownership of the facility, no physical changes to the plant, and no substantive change to operating procedures. Further, all costs of operation and decommissioning of the units will continue to be the sole responsibility of the Owners.

All of the current License Conditions will remain in effect, and the Limiting Conditions for Operation, Limiting Safety System Settings, and Safety Limits specified in the Technical Specifications will remain unchanged. An additional License Condition has been proposed specifying that OPCO shall not market or broker power from STP.

While the Emergency Plan, Security Plan, and plant operating and emergency procedures may require administrative changes to reflect OPCO's role as operator of STP, no changes will be made that decrease the effectiveness of these plans and procedures. Similarly, while the Quality Assurance Program may require administrative changes to reflect the role of OPCO, no changes will be made that reduce the commitments in the program. The Operating Agreement between OPCO and the Owners will ensure continued compliance with GDC 17. Similarly, the Operating Agreement will ensure that OPCO has authority to determine all activities within the exclusion area.

The technical qualifications of OPCO to carry out its responsibilities under the Operating Licenses, as amended, will be the same as the present technical qualifications of HL&P. HL&P will continue to act as the operator of STP, pending the amendment of the Operating Licenses. When the amendments becomes effective, OPCO will assume responsibility for, and control over, the operation, and maintenance of the 1

facility. The present STP Operations, Maintenance, Engineering and Support staffs will be transferred essentially intact to OPCO. Therefore, the technical qualifications of the OPCO STP organization will be at least equivalent to those of the existing organization.

The assumption of operational responsibility for STP from HL&P by OPCO will provide benefits to STP inherent with this type of operating arrangement. Some of the expected benefits are discussed are as follows:

(1) As a result of the formation of OPCO, OPCO senior management will be devoted solely to the business of nuclear plant operations. Such single-purpose management will be able to pursue overall excellence in nuclear power operations without distractions from the requirements and duties of other areas of the electric utility business.

(2) As a result of the formation of OPCO, the salary structures, career path policies and procedures for nuclear employees of OPCO will be separate and distinct from HL&P non-nuclear employees. This will permit nuclear managers to focus on the special needs, qualifications, and requirements of nuclear employees.

Human resource and compensation policies tailored to nuclear operations will allow OPCO to be competitive in the market for skilled nuclear professionals without being influenced by the potential impact on non-nuclear personnel. The ability to attract superior nuclear talent and to retain quality individuals, once recruited, will have a direct and positive impact on the quality of overall nuclear plant operations.

(3) As a result of the formation of OPCO, HL&P will be relieved of the duties and responsibilities of acting for the other owners. This new arrangement, with HL&P taking on a status equivalent of the other owners, will relieve many of the distractions (including litigation among the Owners) that existed under the previous arrangement. This will allow STP personnel to focus solely on nuclear operations.

The result sought by these license amendment requests is thus consistent with the views and perspective of the Nuclear Regulatory Commission in recent years, calling for strong and focused management of nuclear power plant operations.

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4 III. ANALYSIS The following discussion provides a specific analysis of the proposed change against the three standards delineated in 10 CFR 50.92 and demonstrates that the proposed change involves no significant hazards consideration:

1. The proposed amendments will not increase the probability or consequences of any accident previously evaluated.

The employees of HL&P presently engaged in the operation of STP will become employees of OPCO. Personnel qualifications, therefore, will remain the same -

as those discussed in the Technical Specifications and the UFSAR. The organizational structure of OPCO will continue to provide for clear management control and effective lines of authority and communication among the organizational units involved in the management, operation, and technical support of the facility. Accordingly, the technical qualifications of OPCO will be at least equivalent to those of HL&P presently.

J As a result of the proposed amendments, there will not be physical changes to the facility, and all Limiting Conditions for Operation, Limiting Safety System Settings, and Safety Limits specified in the Technical Specifications will remain unchanged. With the exception of administrative changes to reflect the role of OPCO, the Quality Assurance Program, the Emergency Plan, Security Plan, and Training Program are unaffected. The Operating Agreement will ensure continued compliance with GDC 17 as well as OPCO control over all activities within the exclusion area.

Therefore, the proposed changes will not increase the probability or consequences of any accident previously evaluated.

2. The proposed amendments will not create the possibility of a new or different kind of accident from any accident previously evaluated.

The design and design bases of STP will remain the same. Therefore, the current plant safety analyses which address the licensing basis events and analyze plant response and consequences, will not be affected. The Limiting Conditions for Operation, Limiting Safety System Settings, and Safety Limits are not affected by the proposed amendments. With the exception of administrative changes to reflect the role of OPCO, plant procedures are unaffected. As such, the plant conditions for which the design basis accident analyses have been performed will not be changed. Therefore, the proposed amendments cannot create the possibility of a new or different kind of accident than previously evaluated.

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3. The proposed amendments will not involve a reduction i;n a margin of safety.

Plant safety margins are established through Limiting Conditions for Operation, Limiting Safety System Settings, and Safety Limits specified in the Technical Specifications. There will be no change to the physical design or operation of the plant or to any of these margins. The proposed amendments, therefore, will not involve a reduction in a margin of safety.

IV. CONCLUSION ,

Based upon the analysis provided herein, the proposed amendments will not increase the probability or consequences of an accident previously evaluated, create the possibility of a new or different kind of accident from any accident previously evaluated, or involve a reduction in a naargin of safety. Therefore, the proposed amendments meet the requirements of 10 CFR 50.92(c) and do not involve a significant hazards consideration.

a.