ML20136J370
| ML20136J370 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse  |
| Issue date: | 01/02/1986 |
| From: | Williams J TOLEDO EDISON CO. |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML20136J376 | List: |
| References | |
| 1234, NUDOCS 8601130348 | |
| Download: ML20136J370 (2) | |
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~ Docket No. 50-346 TOLEDO
!!EI!k$$3!N License No. NPF-3 Serial No. 1234 JOE VWuludS. JR Seruar Vca Prescent-ArJear (419]243-2300 January 2, 1986 (419124a s223 m
Mr. Harold R. Denton, Director Office of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, D. C.
20555
Dear Mr. Denton:
You requested that we provide additional information on the pending affiliation between The Toledo Edison Company (TED) and The Cleveland Electric Illuminating Company (CEI) and how it would affect the management of the Davis-Besse Nuclear Power Station.
The affiliation has been approved by the shareholders of both companies and is awaiting approval by the Securities and Exchange Commission.
We have previously furnished to the Commission, by letters dated August 14,'1985 and November 13, 1985, the Registration Statement under the Securities Act of 1933 (Form S-4), the Application under the Public Utility Holding Company Act of 193,5 (Form U-1) and Amendment No. I to Form U-1.
These documents describe in some detail the affiliation, including some of the longer-term organizational changes which may be implemented with it.
The affiliation will. involve the formation of a holding company, Centerior Energy Corporation, which will own all of the common stock of TED and CEI.
.The current holders of TED and CEI common stock will become common stock-holders of Centerior. TED and CEI will become subsidiaries of Centerior and will continue as electric companies with basically the same employees and management structure within the nuclear operations. A service company will also be formed as a wholly-owned subsidiary of Centerior.
Since taking the position of Senior Vice President at Toledo Edison in July, I have reported to the Chief Executive Officer (John P. Williamson).
As of the first of January 1986, until the affiliation goes into effect, I-will report to. Toledo Edison's President and Chief Operating Officer (Paul M. Smart) who controls the allocation of resources reouired for operating the Nuclear Mission.
The affiliation itself will not involve any significant changes with respect to the management of Davis-Besse. The plant operating personnel g
will remain employees of TED. The TED management organization for Davis-Besse will remain as it is with the Senior Vice President, Nuclear (myself) reporting to the President and Chief Operating Officer. The President and Chief Operating Officer will be responsible for providing financial and support services for Davis-Besse. The President of TED will report y
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t Dock t No. 50-346 LicInca No. NPF-3 Serial No. 1234 January 2, 1986 Page 2 directly to the Chief Executive Officer of Centerior. The Chief Executive Officer of Centerior will report to Centerior's Board of Directors.
Tiie attached figure illustrates the management organization since July, the current organization and the proposed management organization immediately
.following the affiliation, as it affects Davis-Besse. I have been personally assured by Mr.. Robert M. Ginn, the designated Chief Executive Officer of Centerior, that the Senior Vice President, Nuclear will have direct access to the Chief Executive Officer, When the affiliation goes into effect, we anticipate that the service company will take over certain functions now separately performed by TED and CEI. These include system planning and engineering, system dispatch, financial planning, management information systems, legal and rate regulatory affairs. Because TED'S Nuclear Mission 'has been concentrating its efforts on completing the actions needed for the restart of Davis-Besse, decisions on the role of the service company with respect to Davis-Besse have not yet been made. Not until Davis-Besse is restarted and operating satis-factorily will recommendations be made on possible structural changes affecting the management of Davis-Besse. Until that time, no Nuclear Mission functions significantly affecting the operation of Davis-Besse will be transferred to the service company.
Although these decisions have not yet been made, you have asked about possible future roles for the service company. One such role could be to
. have TED's Vice-President, Nuclear (now the Senior Vice President, Nuclear) report to a Vice-President, Nuclear within the service company for matters of policy, major engineering changes and other major technical matters affecting the long-term operction of the plant, while continuing to report to TEDS President for routine operating and administrative matters. The concept of dual reporting is currently in place for other operating nuclear plants and would allow the centralization of important nuclear c
functions within the service company. However, let me repeat that no decisions on the service company's role within respect to Davis-Besse have been made. We will keep you fully informed as our evaluation proceeds.
Of course, we plan to request appropriate amendments to the Davis-Besse operating license in the event such amendments are required to implement future management organization changes.
.j Very truly yours,
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W:TJM:lr cc: DB-1 NRC Resident Inspector Mr. James G. Keppler, Regional Administrator
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