ML20127H296
| ML20127H296 | |
| Person / Time | |
|---|---|
| Site: | Monticello, Prairie Island  |
| Issue date: | 06/15/1977 |
| From: | Saltzman J Office of Nuclear Reactor Regulation |
| To: | Rachel Johnson NORTHERN STATES POWER CO. |
| References | |
| NUDOCS 9211180477 | |
| Download: ML20127H296 (3) | |
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O avUCLEAR HEGULATORY COMMISslON E I 21 1 E WAsHINoTON, D. C. 20555 Mifjjikp/!
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n June 15, 1977 Docket Nos. 50-282, 306, 263 C/'-
Northern States Power Company ATTN: Mr. R. G. Johnson General Superintendent Insurance and Property Protection 414 Nicollet Avenue Minneapolis, Minnesota 55401 Gentlemen:
The Commission is completing the implementation of certain provisions of the 1975 amendments to the Price-Anderson Act (Public Law 94-197), so that the new retrospective premium system can become effective on August 1, 1977.
The Commission published in the Federal Register on January 3, 1977 (42 F.R. 46) its intention to establish certain requirements-relating to guaranteeing retrospective premiums to assure that following a nuclear incident deferred retrospective premiums will be paid by licensees and that government funds will not have to be used to cover defaults in such payments.
These guarantee requirements may be met by providing any one or a combination of alternative methods in the amount of $10 million for each large power reactor a licensee operates.
These alternatives would be:
1.
Surety bonds; 2.
Letter; of credit; 3.
Revolvi m credit / term loan arrangements; 4.
Mainter ce of escrow-deposits of government securities;-
5.
Annual certified financial statements and cash flow projections showing either that a cash flow (i.e., cash available to a company after all _ operating expenses, taxes, interest charges and dividends have'been paid) can'be generated and would be available for payment of retrospective premiums within three l
(3) months after submission of the statement, or a cash reserve or a combination of cash flow and cash reserve, and
- 6. -Such other-type of guarantee approved by the Commission.
l The purpose of this letter is to learn from you-the type of guarantee i
that you intend to provide as well as to provide some guidance concerning Alternative 5 of the guarantees (a showing of adequate cash flow).
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~9211180477 770615 1l PDR. - ADOCK 05000263 J:
-. 3 Northern States Power Company-June 15,1977 order'to allow us to analyze the adequacy of the showing of cash flow, we should be provided with the following:
(1) An annual certified financial-statement for the most recent reported year preceding the submission date; (2) a quarterly financial statement for the last qua_rter preced.ing-the submission date; (3) a one year internal cash flow projection -accompanied by underlying assumptions showing that cash flow (i.e., cash available to a company after all operating expenses, taxes, interest charges, and dividends have been paid) for $10 million can be generated and would be available for payment of retrospective premiums within_three months after submission of the statement; (4) a narrative statement indicating which capital expenditures (if any) would be curtailed-to ensure that retrospective premiums up to $10 million would be available for_ payment.
The cash flow projection should be for a one year period preferably beginning either at-the anniversary date or if unduly burdensome at the calendar year starting closest to the anniversary date.- This projection-should include a detailed-breakdown of expected cash sources, e.g.,
retained earnings, depreciation, deferred taxes, etc.,-and should be certified by an official-of the company.
All utilities will be required to provide their first submission _of guarantees by August 1, 1977.
Annual submissions thereafter should be on the anniversary date of any of-the utility's indemnity agreements.
Utilities may request another date-for t. heir __ annual submittals.
If.more than one statement _is provided in those cases where there are niultiple licensees, all such statements should utilize the same submittal date.
3 As provided for in the regulations, the-Commission will impose'a single
$1,000 minimum indemnity fee per year upon any. licensee submitting in that year a certified financial statement as the guarantee of payment of -
deferred premiums for its operating reactors.
If more than:one statement is provided in those cases where there are multiple licensees,-'then a
$1,000 minimum annual indemnity fee will be imposed on each licensee submitting a statement.
We would expect, however, that in cases where.
there are numerous licensees, some with small percentages of ownership, that only the principal owner (s) will submit this information for the.
q entire $10 million guarantee.
~
Northern States Power Company June 15,1977 We would appreciate your indicating to us by July 1, 1977 the type of guarantee that you intend to provide us with on August 1,1977 and what your preferred anniversary date for future submittals would be.
Please provide the contents of this letter to your co-licensees (if any).
If you have any questions concerning this letter or any other matter, you may contact Ira Dinitz, Indemnity Specialist on 301-443-6961.
Sincerely, scos. >me o. s,,u, s, Jerome Saltzman, Chief Antitrust & Indemnity Group Nuclear Reactor Regulation t