ML20133C068
| ML20133C068 | |
| Person / Time | |
|---|---|
| Site: | Clinton  |
| Issue date: | 12/24/1996 |
| From: | Taylor J NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| To: | |
| References | |
| SECY-96-265, SECY-96-265-R, NUDOCS 9701070026 | |
| Download: ML20133C068 (2) | |
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De'cember 24, 1996 SECY-96-265 POLICY ISSUE f.QB:
The Commissioneo (Information)
ERQM:
James M. Taylor Executive Director for Operations
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EUBJECT:
PROPOSED TRANSFER OF S0YLAND POWER COOPERATIVE'S 13.21 PERCENT MINORITY DWNERSHIP INTEREST IN CLIt! TON POWER STATION PURPOSr,:
To inform the Commission of the status of a license transfer request for Facility Operating License NPF-62 for Clinton Power Station.
The sta'f has. prepared this paper in accordance with the Commission's request to be kept informed of significant restructuring activities of the electric utility industry.
DACKGROUND:
e As a result of severe financial difficulties arising in large part from its minority ownership share of Clinton Power Station, Soyland Power Cooperative has been forced to seek significant debt refinancing. An agreement reached with creditors financing Soyland's settlement with the Rural Utilities Service requires Soyland to divest itself of any ownership of, or responsibility for, Clinton Power Station.
DISCUSSION:
On October 17, 1996, a license transfer request was submitted by Illinois e
Power Company requesting NRC's approval of the proposed transfer of Soyland Power Cooperative's 13.21 percent minority ownership interest in Clinton Power Station to Illinova Power Marketing, Inc. (IPHI), the unregulated power marketing affiliate of Illinois Power Company, and a wholly owned subsidiary of Illinova Corporation, the parent holding company of Illinois Power Company.
A Contacts:
NOTE: TO BE MADE PUBLICLY AVAILABLE IN David B. Matthews, NRR
.5 WORKING DAYS FROM THE DATE OF THIS (301) 415-1282 PAPER Mike J. Davis, NRR (301) 415-1016
)O, A
9701070026 961224 j@
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PDR SECY 96-265 R PDR f
lo The Commissioners In a meeting with Clinton and Soyland representatives on November 21, 1996, the staff informed the licensees that the unique aspects of the proposed transfer make it highly unlikely that the review will be accomplished before their requested completion date of December 31, 1996. Transfer of the 13.21 percent ownership share to IPHI, which the staff does not consider to be an electric utility, requires that the staff review financial qualifications (10 CFR 50.33(f)) to ensure IPMI could meet its share of Clinton's operating expense requirements. Also, more stringent decommissioning funding assurance requirements (10 CFR 50.75) would have to be met, since IPMI would not have access to rate relief. Additional information needed to complete the licensee's application was discussed at the November 21 meeting and includes the final Power Sales Agreement, projected revenue / expense statements for IPMI for the next 5 years, and the need for additional decommissioning funding assurance (such as a parent company guarantee). The licensees stated that additional information would be supplied in a supplemental submittal in December 1996.
Licensee representatives stated at the meeting that the purpose of transferring the Soyland share to an unregulated subsidiary was a business decision based on Illinois regulatory conditions. The transfer would have required approval of the Illinois Public Utilities Commission if it were being made to the other current licensee, Illinois Power Company.
In requesting approval of the application by December 31, 1996, the licensee stated that there would be tax consequences if approval was delayed into 1997. Al so, Soyland may not be able to cover its share of the financial consequences of any operating events that might happen at Clinton Power Station.
The staff informed the licensee representatives that completion of the review by December 31, 1996, would be unlikely.
Subsequent to the November 21 meeting, the staff was informed that due to difficulties with the Federal Energy Regulatory Commission review of the proposed transfer, the licensees are now looking at other transfer options.
They are now considering transferring the Soyland ownership share to Illinois Power. A new submittal, dated December 13, 1996, now requests a transfer of ownership to Illinois Power (thus making Illinois Power the sole owner of Clinton Power Station). Although approval by year's end is no longer expected, the licensees request staff review in the shortest possible time.
The staff will act on the new submittal, and will keep the Commission informed as necessary.
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E cutive Di'ector for Operations DISTRIBUTION:
Commissioners OCA OGC REGION III OCAA EDO OIG SECY OPA
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