ML20134K136
| ML20134K136 | |
| Person / Time | |
|---|---|
| Site: | 07001201 |
| Issue date: | 02/10/1997 |
| From: | Weber M NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS) |
| To: | Jim Hickey NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS) |
| References | |
| TAC-L30884, NUDOCS 9702130138 | |
| Download: ML20134K136 (3) | |
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UNITED STATES NUCLEAR REGULATORY COMMISSION f WASHINGTON D.C. 20565-0001
- February 10, 1997 70 -12Dj MEMORANDUM T0: John W. Hickey, Chief Low-Level Waste and Decommissioning Projects Branch Division of Waste Management, NMSS Michael F. Weber, Chief !
FROM:
/
Licensing Branch
[ '.
~
Division of Fuel cycle Safety and Safeguards, NMSS
SUBJECT:
TECHNICAL ASSISTANCE REQUEST - 2ND ROUND REVIEW OF SIEMENS FINANCIAL ASSURANCE DOCUMENTS (TAC N0. L30884)
The FCSS Licensing Branch requests technical assistance in reviewing the following project:
Project: Siemens Power Corporation (SPC) Parent Company Guarantee for Financial Assurance for decommissioning dated June 14, 1996.
Casework /RITS/ TAC No: I70-1257/211AA/L30884
Background:
On June 13, 1996, SPC submitted a Parent Company Guarantee for financial assurance for decommissioning. A technical assistance request was submitted to the LLDP Branch on July 2, 1996, for review of this instrument.
A request for additional information was subsequently transmitted to SPC specifying a number of deficiencies identified by ICF and LLDP. Three teleconferences were then held between SPC and NRC staff. The main issue concerned the use of German accounting procedures as opposed to U.S. Generally Accepted Accounting Procedures in determination of SPC's total assets within the U.S. SPC responded to the NRC's concerns in a letter dated January 14, 1997. <
Requested Action: Review the licensee's response of January 14, 1997, to determine if it adequately resolves the deficiencies previously identified by ((
LLDP concerning SPC's Parent Company Guarantee.
Please provide the information requested below and return a completed copy to the Licensing Assistant (LA) or PM.
Name of Reviewer:
DWM Projected Completion Date:
DWM Branch Chief Signature:
ph 9702130138 970210 '
John W. Hickey 2 Contacts: Project Manager (PM) - Susan Chotoo, Telephone: 415-8102 Licensing Assistant (LA) - Pam Shea, Telephone: 415-8029 The above TAC No. should be referenced in future correspondence related to this request and on the RITS Report for recording staff time expended on this effort.
Docket 70-1201 License SNM-1168 Attachments: 1. Ltr dtd 1/14/97*
- 2. Ltr dtd 10/11/96
- Originals sent to DWM for safe keeping.
I Distribution: (Control # 2E05)
Docket 70-1201 PUBLIC NRC File Center FCSS R/F FCLB R/F NMSS R/F Region II GTroup, RII l MLamastra
[G:\parguar.sec) 0FC FCLB 6 FCLB /# FCLB on FCLB ,, 4_
NAME Schotoo 600 PShea /} / h GPan M [ MWeMhdM DATE 2/(, /97 2/ O /97 2/ //)/97 2/ /()/9[
C = COVER E = COVER & ENCLOSURE N = NO COPY OFFICIAL RECORD COPY
i John W. Hickey 2 Contacts: Project Manager (PM) - Susan Chotoo, Telephone: 415-8102 Licensing Assistant (LA) - Pam Shea, Telephone: 415-8029 ,
The above TAC No. should be referenced in future correspondence related to ,
this request-and on the RITS Report for recording staff time expended on this '
effort.
Docket 70-1201 l License SNM-1168 i
}
Attachments: 1. Ltr dtd 1/14/97*
- 2. Ltr dtd 10/11/96 '
- Originals sent to DWM for safe keeping. j l
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(' SIEMENS :
January 14,1997- ;
LJM:97:001 l l
U.S. Nuclear Regulatory Commission Attn: Michael F. Weber, Chief I Licensing Branch l Division of Fuel Cycle Safety and Safeguards, NMSS {
Washington, DC 20555 1
Dear Mr. Weber:
Re: Docket No. 70-1257 Licer. e No. SNM 1227 Decommissioning Funding Plan in accordance with our letter to you dated June 14,1996 and in compliance with applicable regulations, Siemens Power Corporation herewith submits an annual update to the Financial Assurance Instruments of its Decommissioning Funding Plan.
Ver truly yours, W 1 L. J. Maas, Manager Regulatory Compliance '
LJM:pg Siemens Power Corporation Nuclear Division 2101 Horn Rapids Road Tel: (509) 375-8100 Engineenng & Manuf actunng P.O. Box 130 Fax: (5091 375 8402 Richland, W A 99352 0130 GI-? O l L 7 m s
SIEMENS 1 i
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wedeuw U.S. Nuclear Regulatory Comn.asion wme Der m a zra 1:
Division of Fuel Cycle Safety Branch and ,
T'3** M89) 224 3186 Safeguards, NMSS 7f** (0891234 d779 Washington, D.C. 20555-0001 I
Attn.: Robert C. Pierson, Chief Date 20 12.96 l
Re: Decommissioning Financial Responsibility License No. SNM-1227
Dear Mr. Pierson,
I am the Chief Financial Officer of Siemens Aktiengesellschaft, a corporation of the Federal Republic of
' Germany. His letter is in support of Siemens Aktiengesellschaft's use of the financial test to demonstrate financial assurance, as specified in 10 CFR Part */0.
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Siemens Aktiengesellschaft guarantees, through the parent company guarantee submitted to demonstrate compliance under 10 CFR Part 70, the decommissioning of the following facility owned and operate:1 by '
Siemens Power Coiporation, a subsidiary of Siemens Aktiengesellschaft. He current cost estimate, so guaranteed, is shown for the facility:
Name of Location of Current Facility Facility Cost Estimate t
Siemens Power 2101 Horn Rapids Road $27,000,000 !
Corporation Richland, WA 99352 License No. SNM-1227 ,
Siemens Aktiengesellschaft is not required to file a Form 10K with the U.S. Securities and Exchange Commission.
He fiscal year of Siemens Aktiengesellschaft ends on September 30. He figures for the following items marked with a double asterisk are derived from Siemens Aktiengesellschaft's independently audited, consolidated financial statements for the year ended September 30,1996.
I
() 4 Zentraletzteilung Finanzen Bnefasesse Mausamesse Leitung
( Dr Kan Hermann Baumann Sie-ens AG Wittetsca:ne ciau 2 60323 Mu n cv l ZFB 11 Te.een 0 29 M *
&dnls I) Q M ) { / / / __ - ,
803'2 Muncren 7..e. 52 'oc s.* ::
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-e aan 5 a-r estro -c.aro , %.e. .m,waw utpw (r -e .r- i i .-
s.emeas A tengeneascnati wesitzenw aes eser, * ' -
'% 3lTe' %f'e'1t= -e0'5t .Jnge' .\e \* 3 y e%3 d 'J ! /df'
- Sea Ofe' E*t":a , .* ]er ' JO^ra $r 2 3 A /.f n*
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SIEMENS im't"- ~ ~'"
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f i Firancial Test: Alternative 11 j
- 1. Decommissioning cost estimate for facility, License No. SNM-1227. $27,000,000 I
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2.* Current bond rating of most recent issuance of this Standard & Poor's: AAA (
- firm and name of rating service. Moody's
- Aaa c
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3.* Date ofissuance of bond 06/24/1992 4.* Date of maturity of bond 06/24/2002 l 5." Tancible net worth plus accrued decommissioning costs 5 15,617,000,000 6." Total assets in United States (required only ifless than 90 percent of firm's assets are located in the United States ) $ 7,672,935,000 l
YS1 N9
- 7. Is line 5 at least $10 million? X. _
- 8. 'Is line 5 at least 6 times line !? X __.
l 9." Are at least 90 percent of firm's assets located ,
in the United States? If not, complete line 10. _ X ,
i
- 10. Is line 6 at least 6 times line !? X _,.
I 1 hereby certify that the content of this letter is true and correct to the best of my knowledge.
3 By YM .) >lVI.U'V l (Signature)
Dr. K.-H. Baumann Chief Financial Officer 1
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i i Zentrolebteilune Finanzen Br e'ad' esse Massacresse Letung Me'scacherpiatz :
Dr k.arteemann Baeann 5 errens AG
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E e7 (*@* ?e' (*1 f 6' " _ " 3' ;"e' "Er . E";' 2 7 ' $9."C*+' **E E e6kJ
$ f7 3P' de5$ ,0*J7 6.e' f" ,,*2 "/ .*'.Tt"
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- The Standard & Poor's AAA rating was obtained by Siemens Aktiengesellschaft and is not assigned to a specific debt issue. The Moody's Aaa rating was obtained for the guaranteed debt of a wholly-own:d I subsidiary of Siemens Aktiengesellschaft, Siemens Capital Corporation. l 1
" Denotes figure derived from the Siemens Aktiengesellschaft consolidated financial statements for the year ended September 30,1996.
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Zentrolabteilung Finanzen y Le,ung Bretadresse Hausaa' esse Dr Kar+e mann Baumann S.emens AG Wme sbachercia:: 2 80333 Mancaea 80312 Munchen Te e'on 40 Bs 2 34 - C T eren E2 '00 se a s.ews Aategesensean va.wender ses Au+serets ats ae'%ra a*: ers'anc *'einte v kwet c'SWGa' V 4ieDr V *e'ma"" r " t -
A &' "v4 ,0st e ronJe g daf fe' bae'te he+' VJ h AC*a'e C */iVt+5er ITiet E'@u ad < st ger E JJCF *a . a 5 dev'
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- S u se' 3ese 'a *Ja 6en* ,,ac 'A,e :* e* M3rst Ee g,ste'.J94e',t gee r 5ene '. y a c e ts; -GE 20C Y at'+* LE 4'M4
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. #PMG Deutsche Treuhand-Gesellschaft Akteengesellschaft Wirtschaftsprufungsgesellschaft Zweigniederlassung Munchen E ecast'eGe 6 Ns"ach 8105 29 Te:eten iO 89 928240 D 81925 Wnew r - D 81905 Wrcre" Teietas to 89: 92 82 20 00 Siemens Aktiengesellschaft Zentralabteilung Finanzen Attn.: Dr. Seeberg~
Wittelsbacherplatz 2 80333 Milachen 20 December 1996 - ms/ds l
Dear Dr. Seeberg,
At your request, we have performed the procedures enumerated below with respect to the Siemens Aktiengesellschaft " Schedule Reconciling Amounts Contained in Chief Financial Officer's Letter With Amounts Included in the Consolidated Financial Statements for the Year Ended September 30,1996" set forth in the accompanying Exhibit I.
' Siemens Aktiengesellschaft prepared the information contained in Exhibit I to demonstrate its financial responsibility under the U.S. Nuclear Regulatory Commission's financial assurance regulations 10 CFR Part 70, and to assist its wholly-owned subsidiary and licensee Siemens Power Corporation (License No. SNM-1227) in complying with such regulations.
Our procedures, with respect to the information contained in Exhibit I, were as follows:
- 1. We agreed the amounts entitL.i " Stockholder's equity" and " Intangible assets, net" to amounts reponed on the Siemens Aktiengesellschaft consolidated balance sheet as of !
September 30,1996 which is included in the Siemens Aktiengesellschaft consolidated financial statements for the year ended September 30,1996. We have previously examined the Siemens Aktiengesellschaft consolidated financial statements for the year ended September 30,1996 in accordance with German generally accepted auditing standards and have issued our report thereon dated December 4,1996.
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, KPMG Deutsche Treuhana-Gesellschaft cocyn w on xc= caw sene2
- 2. We agreed the amount entitled " Accrued decommissioning costs" to an amount included in a Siemens Aktiengesellschaft prepared schedule. This schedule analyses the components of the amount reported as "other accmals" on the Siemens Aktien-gesellschaft consolidated balance sheet as of September 30,1996 which is included in the Siemens Aktiengesellschaft conselidated financial statements for the year ended September 30,1996.
- 3. We determined the arithmetical accuracy of the amounts entitled " Tangible net worth" and " Tangible net worth plus accrued decommissioning costs"
- 4. We agreed the amount in the column captions "Per Chief Finaacial Officer's Letter" to the amount reported as " Tangible net wonh plus accmed decommissioning costs" in the 20 December 1996 letter from Dr. Karl-liermann Baumann, Chief Financial Officer of Siemens Aktiengesellschaft, to the U.S. Nuclmc Regulatory Commission.
- 5. We agreed the amount titled " Total assets in United States" to the amount reported on the Siemens Corporation consolidated balance sheet as of September 30,1996, which is included in the Siemens Corporation Consolidated Financial Statements for September 30,1996.
Because the above procedures are not sufficient to constitute an examination made in accordance with German generally accepted auditing standards, we do not express an opinion on any of the amounts, accounting records or the letter referred to above. In connection with the procedures referred to above, no matters came to our attention that caused us to believe that the information contained in Exhibit I should be adjusted. Had we performed additi<>nal procedures, matters might have come to cur attention that would have been reponed to you.
This repon relates only to the Siemens Aktiengesellschaft " Schedule Reconciling Amounts Contained in Chief F%r.il Officer's Letter With Amounts Included in the Consolidated Financial Statements for the Year Ended September 30,1996" set forth in the accompanying Exhibit I and does not extend to any other documents.
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. ._ =_ .- - _ _ - -- .. -. . . . . . _ - . _ - . . . .
. KMW'G Deutsche Treuhand-Gesellschaft l
Exhibit I SIESIENS AKTIENGESELLSCHAFT SCHEDULE RECONCILING AMOUNTS CONTAINED IN CHIEF l FINANCIAL OFFICER'S LETTER WITH AMOUNTS INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 1996 l
I S in nsllions Per i Per Chief Consolidated Financial Financial Reconciling Officer's Statements linn Letter Stockholder's equity 16,504 Less Intangible assets, net 905 Tangible net worth 15.599 Add Accmed decommissioning cost (Mixed Waste 12 Balance of Plant 6) 18 Tangible net worth plus accrued decommissioning costs 15,617 !
Total assets in United States 7,673 l
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- M Deutsche Treuhand-Gesellschaft ci enury, 20 December Seite 3 It is understood that this report is to be p vided by the management of Siemens Aktiengesellschaft to the U.S. Nuclear Regulatory Commission to comply with the financial assurance regulations referred to in the first paragraph of this report. This report should not be referred to or distributed for any other purpose without our prior consent.
Very truly yours, KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschap Wirtschaftsprnfungsgesellschaft ppa. ~TR Dr. Marianne Schramm Maitin Close l
Attachment - Exhibit I l
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October 11, 1996 Mr. L. J. Maas Manager, Regulatory Compliance ,
l Siemens Power Corporation '
2101 Horn Rapids Road Richland, Washington 99352-0130
SUBJECT:
DECOMMISSIONING FINANCIAL ASSURANCE DOCUMENTATION (TAC N0. L30884) 1
Dear Mr. Maas:
This is in reference to your Decommissioning Funding Plan (DFP) financial instruments, dated June 6, 1996, for decommissioning of the Richland
< manufacturing facility.
We have completed a review of the revised financial instruments and have ,
identified a number of deficiencies, which are described in the enclosure to this letter. The additional information should be provided within 30 days of the date of this letter. Before you submit the responses, you are requested to participate in a conference call or meeting with the fuel Cycle Licensing
- Branch, the Low-Level Waste and Decommissioning Projects Branch, and their i contractor ICF, Inc., to discuss your responses to the review comments. I will contact you later in the week of October 21, 1996, to set up this i conference call or meeting. Please reference the above TAC No. in future correspondence related to the request.
If you have any questions or need further information, please contact me at t (301) 415-8111.
Sincerely, f Original signed by: MTokar for
-- Mary Thoma Adams ,
Licensing Section 2 I 9
Licensing Branch Division of Fuel Cycle Safety and Safeguards, NMSS
~
Docket 70-1257 License SNM-1227
Enclosure:
Review of Decommissioning Funding Plan Parent Company Guarantee I
l DISTRIBUTION: w/encls (Control No. 2EOS)
Docket 70-1257 PUBLIC NRC File Center Region IV FCSS r/f FCLB r/f CHooker, RIV NMSS r/f ADatta LG:\dfspc.mtal 0FC FCLB 6- FCLB FCLB - f 4 NAME h PShea A d MN .
DATE /3/ // /96 /S//D/96 69/// /96 l
. pm UCg
-[ , ,k UNITED STATES j j
)#ff NUCLEAR REGULATORY COMMISSION ,
t W ASHINGToN, D.C. 2066H001 I October 11, 1996 Mr. L. J. Maas Manager, Regulatory Compliance Siemens Power Corporation :
2101 Horn Rapids Road Richland, Washington 99352-0130
SUBJECT:
DEC0PMISSIONING FINANCIAL ASSURANCE DOCUMENTATION (TAC NO. L30884)
Dear Mr. Maas:
This is in reference to your Decomissioning Funding Plan (DFP) financial instruments, dated June 6,1996, for decomissioning of the Richland manufacturing facility.
We have completed a review of the revised financial instruments and have identified a number of deficiencies, which are described in the enclosure to this letter. The additional information should be provided within 30 days of ;
the date of this letter. Before you submit the responses, you are requested 1
to participate in a conference call or meeting with the Fuel Cycle Licensing Branch, the Low-Level Waste and Decommissioning Projects Branch, and their contractor ICF, Inc., to discuss your responses to the review coments. I will contact you later in the week of October 21, 1996, to set up this conference call or meeting. Please reference the above TAC No, in future correspondence related to the request.
If you have-any questions or need further information, please contact me at (301) 415-8111.
Sincerely,
/ * . , f n (I [
- f * ~ t-Mary Thoma Adams N Licensing Section 2 l Licensing Branch !
Division of Fuel Cycle Safety and Safeguards, NMSS ;
Docket 70-1257 :
License SNM-1227
Enclosure:
Review of Decomissioning Funding Plan Parent Company Guarantee
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l REQUEST FOR ADDITIONAL INFORMATION Siemens Power Corporation Docket No. 70-1257 I
Siemens Power Corporation (SPC) in Bellevue, Washington, submitted a parent !
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company guarantee / financial test from Siemens Aktiengesellschaft in the amount of $27,000,000, alongwiphanunexecutedamendmenttoapreviously-submitted standby trust agreement. The parent company guarantee is intended to l
replace two previously-submitted Letters of Credit (see Other Issue a). The submission addresses decommissioning costs of $27,000,000 for license SNM-1227 l l
' issued under 10 CFR Part 70. Upon review of the submission, NRC has !
determined that it should be modified in the following way: ;
I i (1) Submit an alternative financial assurance mechanism, or clarify the guarantor's ability to pass the financial test. ;
If SPC t.hooses to use the financial test by the parent company guarantor (see Recommendation 1), then NRC has determined that the following actions are necessary:
(2) Revise Recitals 8 and 9 of the parent guarantee agreement to specify recommended deadlines regarding annual financial test updates and alternative financial assurance (Regulatory Guide 3.66, page 4-43);
(3) Notarize the parent guarantee (Regulatory Guide 3.66, page 4-44); and (4) Execute the amendment to the standby trust agreement.
These recommerdations and other issues are discussed below.
i (1) Submit an Alterr'tive Financial Assurance Mechanism, or Clarify the Guarantor's Ability to Pass the Financial Test 4 i
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' ICF reviewed several previous submissions from the licensee and reported recommendations to NRC in memoranda dated September 2, 1993, November 15, 1994, March 16, 1995, and June 1, 1995. ICF also reviewed a submission from the licensee's predecessor, Advanced Nuclear Fuels Corporation, and reported recommendations to NRC in a memorandum dated i January 4, 1991.
I ENCLOSURE
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The guarantor's ability to pass the required financial test is uncertain i
because it appears that the guarantor's financial statements have been preparedinaccordancewithGermangenerallyacceptedaccoyntingprinciples, l rather than U.S. generally accepted accounting principles. Although NRC i regulations and guidance do not address the issue of whether foreign accounting practices are acceptable for purposes-of NRC's' financial test, the !
financial test was developed based on an analysis of financial data for U.S.
firms; consequently, NRC's financial test may not be applicable or effective l when used in conjunction with financial data, such as the guarantor's, that j were prepared in accordance with foreign accounting practices. l i.
Because of the uncertainty regarding the applicability of German accounting j practices to NRC's financial test, SPC should either use an alternative >
' financial assurance mechanism or demonstrate that use of German generally {
accepted accounting principles does not reduce the stringency of NRC's !
financial test. l If SPC chooses to demonstrate that use of German generally accepted accounting principles does not reduce the stringency of the financial test, SPC must also 4 implement the other recommendations discussed below. j 1
(2) Revise Recitals 8 and 9 of the Parent Guarantee Agreement to %ocify l i
Recommended Deadlines Regarding Annual Financial Test Updates and Alternative Financial Assurance (Regulatory Guide 3.66, page 4-43) j J
Recital 8 of the submitted guarantee agreement states that the guarantor agrres s to submit revised financial statements, financial test data, and a [
special auditor's report and reconciling schedule annually within 12A days of !
the close of the guarantor's fiscal year. However, Recital 8 of the i recommended wording in Regulatory Guide 3.66, page 4-43, states that the guarantor should agree to update these materials within 90 days of the close '
of its fiscal year. Similarly, Recital 9 of the submitted guarantee agreement states that if the guarantor fails to meet the financial test criteria at the end of any fiscal-year, the licensee will notify NRC within 11C day of the end of the fiscal year of its intent to provide alternative financial assurance, and the guarantor will provide alternative' financial assurance within 159 days of the end of the fiscal year if the licens'ee has not done so.
Recital 9 of the recommended wording in Regulatory Guide 3. 66, page 4-43, allows only 90 days and 120 days, respectively, for notifying NRC and for providing alternative financial assurance.
With regard to the extended deadlines specified in the sulmitted guarantee German generally accepted accounting principles are referenced twice in the special report from the guarantor's certified public accountant (KPMG Deutsche Treuhand-Gesellschaft AG Wirtschaftsprufungsgesellschaft). In addition, the accountant's opinion on the guarantor's 1995 financial statements states that "the consolidated financial statements . . . comply .
i with the German legal provisions." This statement is also consistent with the use of German accounting principles. ;
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