ML20137B414

Submits Revised Financial Assurance Documentation to Comply W/Actions Required by NRC as Listed

ML20137B414
Person / Time
Site:	Framatome ANP Richland
Issue date:	03/05/1997
From:	Maas L SIEMENS POWER CORP. (FORMERLY SIEMENS NUCLEAR POWER
To:	Weber M NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS)
Shared Package
ML20137B406	List: ML20137B403 ML20137B414
References
TAC-L30884, NUDOCS 9703210323
Download: ML20137B414 (14)

Text

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SIE. MENS March 5,-1997 LJM:97:010 U.S. Nuclear Regulatory Commission Attn: Michael F. Weber, Chief Licensing Branch-Division of Fuel Cycle Safety and Safeguards, NMSS

"/ashington, DC 20555

Dear Mr. Weber:

Letter, M.T. Adams to L.J. Maas, " Decommissioning Financial Assurance Ref,:

Documentation (TAC No. L30884), dated October 11,1996 As a result of the referenced request for additionalinformation (RAl) on Siemens Power 14,1996 submittal of financial assurance for decommissioning via a Corporation's (SPC's) June parent company guarantee, and the various telephone conversations on this subject, SP submits the following revised financial assurance documentation to comply with the actions required by the NRC:

1. A supplement to the special report from KPMG Deutsche Treuhand-Gesellschaf t providin the information described in Paragraph 4.7.5 of NRC Regulatory Guide 3.66,' originally This supplement, as agreed to in our various telephone.

submitted June.14,1996.

conversations, confirms that the Siemens Aktiengesellschaft (SAG) consolidated tangible ne worth plus accrued decommissioning costs, as computed under U.S. GAAP, are greater t six times the decommissioning cost estimate and that SAG's total assets in the U.S. have been calculated in accordance with U.S. GAAP. [This satisfies item (1) of the

2. A revised notarized guarantee, Nr. 5010, by Siemens Aktiengesellschaft as described in Paragraph 4.7.6 of NRC Regulatory Guide 3.66. [This satisfies items (2) and (3) of th

3. Three originals of Amendment No.1 of the Standby Trust Agreement between SPC and T Bank of New York (successor to Wachovia Bank) signed by SPC and The Bank of New Y IThis satisfies item (4) of the RAI.]

14,1996 letter, These resubmittals, in addition to submittals 1,2,3, and 4 with SPC's June constitute the documentation required to meet the financial assurance requirements of 10 C 70.25(f)(2).

Please return to SPC two of _the originals of Amendment No.1 of the Standby Trust Agreement after they have been signed by the NRC and we shall f orward one to The Bank of New Y Siemens Power Corporation 21o1 Horn Rapids Road ~

Tel:

(509) 375-8100 Fax:

(509) 375-8402 Nuclear Division P o, Box 130 Enoineenna & Manuf actunng Richland, WA 99352-o130 9703210323 970319 ENCLS0ljRE' 1 ADOCK 07001257{.'

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bistribution LJM:97:010 March 5,1997 Page 2 4

If you have any questions, please feel free to contact me directly. My phone number is (509) 375-8537 and my f ax number is (509) 375-8402.

Very truly yours, W

J. Maas, Manager Regulatory Compliance

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EMN..E Deutsche Treuhand-Gesellschaft

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Siemens Aktiengesellschaft Zentralabteilung Finanzen Attn: Dr. Seeberg Wittelsbacherplatz 2 80333 Munchen

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Dear Dr. Seeberg,

in our letter dated 13 May 1996, we advised you that we performed certain procedures with respect to the Siemens Aktieegesellschaft (,.S AG"),, Schedule Reconciling Amounts Contained in Chief Financial Offictr"s Letter With Amounts included in The Consolidated Financial Statements Ior The Year Ended September 30,1995" set forth in the accompanying Exhibit 1.

As a supplement to that letter, we can further state that S AG consolidated tangible net worth plus accrued decommissioning costs as computed in accordance with United States Generally Accepted Accounting Principles is in excess of six (6) times the decommissioning cost estimate for facility, License No. SNM-1227 and that S AG's total consolidated assets in the United States have been computed in accordance with United States Generally Accepted Accounting Principles.

Very truly yours.

KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprifungsgesellschaft b

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Division of Fuel Cycle Safety Branch and Safeguards, NMSS Telefas (091311722613 i

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Our reference ncrp010 Date 28th February,1997 1

Guarantee No 5010 f

Guarantee made this 28th day of February 1997 by Siemens Aktiengesellschaft, a corporation of the Federal Republic of Germany, herein referred to as " Guarantor", to the U.S. Nuclear Regulatory Commission (NRC), obligee, on behalf of Siemens Power Corporation (" Licensee") of 155108th Avenue, N.E., Bellevue, WA 98009.

Recitals 1.

The Guarantor has full authority and capacity to. enter into this guarantee under its bylaws, I

anicles ofincorporation, and the laws of the Federal Republic of Germany, its country of incorporation, i

1 2.

This guarantee is being issued to comply with regulations issued by the NRC, an agency of the U.S. Government, purst. ant to the Atomic Energy Act of 1954, as amended, and the p

Energy Reorganization Act of 1974. The NRC has promulgated regulations in Title 10, Chapter 1 of the Code of Federal Regulations, Part 70 which require that a holder of, or an-

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applicant for, a materials license issued pursuant to 10 CFR Part 70 provide assurance that j

i funds will be available when needed for required decommissioning activities.

3.

This guarantee is issued to provide f:nancial assurance for decommissioning activities for Siemens Power Corporation's Richland, Washington facility as required by 10 CFR Part 70 and is limited to the maximum amount of the current decommissioning cost estimates which are as follows:

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$27,000,000.00 (in words: USD twenty seven million) i Zentralabteilung Finanzen Briefadresse Hausadresse l

Hauptabtedung 2

siemens AG Wittelsbacterplatt 2 Finanzierur g 80333 Monchen Leitung 3

Dr. Gerhard iGutn

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4.

The Guarantor meets or exceeds the following financial test criteria pursuant to Paragraph A.2 of Appendix A of 10 CFR 30 and agrees to comply with all noti 6 cation requirements as specified in 10 CFR Part 70.

The Guarantor shall meet the following financial test:

(i)

A current rating for its most ecent bond issuance of AAA, AA, A, or BBB as issued by Standard and Poor's or Aaa, Aa, A, or Baa as issued by Moody's; and (ii)

Tangible net worth at least six times the current decommissioning cost estimate; and (iii)

Tangible net worth of at least $10 million; and (iv) Assets located in the United States amounting to at least 90 percent ofits total assets or at least six times the amount of the current decommissioning cost estimates.

5.

The Guarantor (the sole owner of Siemens Corporation that, in turn, is the sole owner of Licensee) has sole control of the voting stock for the following Licensee covered by this guarantee.

Siemens Power Corporation 2101 Hom Rapids Road Richland, WA 99352 SNM-1227 6.

Decommissioning activities as used below refers to the activities required by 10 CFR Part 70 for decommissioning of the facility identified aaove.

7.

For value received from Licensee, and pursuant to the authority confered upon the Guarantor by signatures ofits authorized officers (a certined copy of the Public Notary's Certi6cate is attached stating that the signing offbers are duly authorized to bind the Guarantor), the Guarantor guarantees to the NRC that if the Licensee fails to perform the required decommissioning activities, as required by License No. SNM-1227, the Guarantor shall, at its option, (a) carry out the required activities, er

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(b) set up a trust fund in favor of the above identified beneficiary in the amount of these current cost estimates for these activities.

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. The Guarantor agrees to submit revised fmancial statements, fmancial test data, and a special auditor's report and reconciling schedule annually within 90 days of the close of the parent i

Guarantor's fiscal year.

9.

The Guarantor agrees that if, at the.end of any fiscal year before termination of this guarantee, it fails to meet the financial test criteria, the Licensee shall send within 90 days of the end of the fiscal year, by certified mail, notice to the NRC that the Licensee intends to i

provide alternative financial assurance as specified in 10 CFR 70. Within 120 days after the j

end of the fiscal year, the Guarantor shall establish such financial assurance if the Licensee has not done so.

.'i 10.

The Guarantor also agrees to notify the beneficiary promptly if the ownership of the Licensee or the parent fimt is transferred and to maintain this guarantee until the new parent finn or the Licensee provides alternative financial assurance acceptable to the beneficiary.

I 11.

The Guarantor agrees that within 30 days after it determines that it no longer meets the l

financial test criteria or that it is disallowed from continuing as a guarantor for the facility under License No. SNM-1227, it shall establish an altemative. linancial assurance as specified in 10 CFR Part 70 in the name of Licensee unless Licensee has done so.-

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12.

The Guarantor as well as its successors and assignees agree to remain bound jointly and severally under' this guarantee notwithstanding any or all of the following: amendment or modification of the license or NRC-approved decommissioning funding plan for that

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facility, the extension or reduction of the time of performance of required activities, or any_

i other modification or alternation of an obligation of the Licensee pursuant to 10 CFR Part 70.

13.

The Guarantor agrees that all bound parties shall be jointly and severally liable for all.

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litigation costs incurred by tha beneficiary NRC in any successful effort to enforce the agreement against the Guarantor.

l 14.

The Guarantor agrees to remain bound under this guarantee for as long as Licensee must comply with the applicable financial assurance requirements of 10 CFR Part 70, for the previously listed facility, except that the Guarantor may cancel this guarantee by sending l

. notice by certified mail to the NRC and to Licensee, such cancellation to become effective i

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no earlier than 120 days after receipt of such notice by both the NRC and Licensee as evidenced by the return receipts.

1 15.

The Guarantor agrees that if Licensee fails to provide altemative financial assurance as specified in 10 CFR Part 70 and obtain written approval of such assurance from the NRC within 90 days after a notice of cancellation by the Guarantor is received by both the NRC and Licensee from the Guarantor, the Guarantor shall provide such alternative financial assurance in the name of Licensee or make full payment under the guarantee.

16.

The Guarantor expressly waives the notice of acceptance of this guarantee by the NRC or by l

Licensee. The Guarantor also expressly waives notice of amendments or modification of the decommissioning requirements and of amendments or modification of the license.

17.

If the Guarantor files financial reports with the U.S. Securities and Exchange Commission, then it shall promptly submit them to the NRC during each year in which this guarantee is in effect.

We hereby certify that this guarantee is true and correct to the best of our knowledge.

i Effective date: February 28,1997 l

Siemens Aktiengesellschaft By h' By Mb t (Signature)

Mignature) o Thomas Michel, Senior Director Dr. Peter Moritz, Senior Director Signature of witness or notary:

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A 0625 /1997 l

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A 0025 /1997 Certi ficat e l

I, the undersigned notary, Dr. Manfred Asam, hereby certify after having examined the Commercial Regi-f ster of the Munich District Court that the company Siemens Aktiengesellschaft l

i with registered offices at Berlin and Munich was established in accordance with and is validly existing under the applicable laws of the Federal Republic of Germany, and is registered in the Regi-l ster of Companies at the Amtsgericht (District Court) of Munich under No. HHB 6684.

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Furthermore I certify that j

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Dr. Peter Morit z under Nr. 2463 and l

Mr. Thomas Miche1 under Nr. 2256 are registered as "Prokuristen" and as such entitled to represent jointly the aforementioned company.

d Munich, the 3 of March 1997 i

X.2, (Dr. Manfred Asam) lh. G-A, f. t Notary s><.

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i AMENDMENT NO.1 j

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STANDBY TRUST AGREEMENT This Amendment No.1 to the Standby Trust Agreement is entered into as of t

,1997 by and between Siemens Power Corporation. a Delaware corporation, with its principal place of business at 155108th Avenue N.E., Bellevue, WA 98009 herein-referred to as the " Grantor," and The Bank of New York, with offices at 101 Barclay Street,12 East, New York, NY 10286 as successor Trustee to Wachovia Bank of North

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Carolina, N.A, the " Trustee."

l WHEREAS, the Grantor and the Trustee entered into, as of August 10,1994, a Standby

' Trust Agreement that they now wish to amend; and 1

NOW, THEREFORE, the Grantor and the Trustee agree as follows:

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Resitals:

In the second and third WHEREAS clauses, delete the words

... letter of credit..." and substitute the words "... parent guarantee.."

IN WITNESS WHEREOF the parties have caused this Amendment No.1 to be executed by the respective officers duly authorized and the corporate seats to be hereunto affixed and attested as of the date first written above.

Siemens Power Corporation I

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ATTEST:

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The U.S. Nuclear Regulatory Commission, an agency of the U.S. government, by the execution of this document hereby gives it consent to this Amendment No.1 to the 1

Standby Trust Agreement.

j U.S. Nuclear Regulatory Commission By (Signature)

(Name)

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AMENDMENT NO.1 TO STANDBY TRUST AGREEMENT This Amendment No.1 to the Standby Trust Agreement is entered into as of

,1997 by and between Siemens Power Corporation, a Delaware corporation, with its principal p ace of business at 155108th Avenue N.E., Beilevue, WA 98009 herein referred to as the " Grantor," and The Bank of New York, with offices at 101 Barclay l

Street,12 East, New York, NY 10286 as successor Trustee to Wachovia Bank of North Carolina, N.A, the " Trustee."

1 WHEREAS, the Grantor and the Trustee entered into, as of August 10,1994, a Standby l

Trust Agreement that they now wish to amend; and NOW, THEREFORE, the Grantor and the Trustee agree as follows:

Recitals:

In the second and third WHEREAS clauses, delete the words

... letter of credit..." and substitute the words "... parent guarantee..."

IN WITNESS WHEREOF the parties have caused this Amendment No.1 to be executed I

by the respective officers duly authorized and the corporate seals to be hereunto affixed and attested as of the date first written above.

Siemens Power Corporation f

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The Bank of New York as successor Tiustee

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ATTEST:/

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The U.S. Nuclear Regulatory Commission, an agency of the U.S. governrnent, by the execution of this document hereby gives it consent to this Amendment No.1 to the

StandbyTrust Agreement.

U.S. Nuclear Regulatory Commission By (Signature)

(Name)

(Title) 2-

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AMENDMENT NO,1 TO STAND 8Y TRUST AGREEMENT i

This Amendment No.1 to the Standby Trust Agreement is entered into as of

,1997 by and between Siemens Power Corporation, a Delaware corporation, with its principal place of business at 155108th Avenue N.E., Bellevue, WA 98009 herein l-referred to as the " Grantor," and The Bank of New York, with offices at 101 Barclay l

Street,12 East, New York, NY 10286 as successor Trustee to Wachovia Bank of North Carolina, N.A, the " Trustee."

WHEREAS, the Grantor and the Trustee entered into, as of August 10,1994, a Standby Trust Agreement that they now wish to amend; and NOW, THEREFORE, the Grantor and the Trustee agree as follows:

Recitals:

In the second and third WHEREAS clauses, delete the words

... letter of credit..." and substitute the words ".~.. parent guarantee..."

l IN WITNESS WHEREOF the parties have caused this Amendment No.1 to be ' executed by the respective officers duly authorized and the corporate seals to be hereunto affixed '

and attested as of the date first written above.

Siemens Power. Corporation A

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ATTEST:

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The U.S. Nuclear Regulatory Commission, an agency of the U.S. government, by the 1

i execution of this document hereby gives it consent to this Amendment No.1 to the i

Standby Trust Agreement.

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1 U.S. Nuclear Regulatory Commission I

By (Signature)

(Name)

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Mr. L. J. Maas Manager, Regulatory Compliance s.

Siemens Power Corporation 2101 Mcrn Rapids Road l

Richland, Washington 99352-0130 DECOMMISSIONING FINANCIAL ASSURANCE DOCUMEF". TION

Dear Mr. Maas:

4 This is in reference to your Decommissioning Funding Plan (DFP) financial instruments, dated June 6, 1996, for decommissioning of the.Richland l

manufacturing fact 1ity.

3 We have completed a review of the revised financial instruments and have identified a. number of deficiencies, which are described in the enclosure to i

The additional information should te,9rovided-within 30 days of 1

this letter.

the date of this letter.

Before you submit the.'esponses, you are requested-to participate in a conference call or meeting,vith the Fuel Cycle Licensing

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Branch, the Low-Level Waste and Decommissioning Projects Branch, and theirI contractor ICF, Inc., to discuss your responses to the review comments.

will contact you later in the week of October 21, 1996, to set up this l

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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, Original signed by:

MTokar for Mary Thoma Adams 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 DISTRIBUTIONt w/encls (Control No. 2EOS)

Docket 70-1257 PUBLIC NRC File Center Region IV NMSS r/f FCSS r/f FCLB r/f CHooker, RIV A0atta

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ENCLOSURE 2

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NUCLEAR REGULATORY COMMISSION i

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,,4 October 11. 1996

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2 Mr. L. J. Maas hanager, Regulatory Compliance Siemens Power Corporation 2101 Horn Rapids Road Richland, Washington 99352-0130 DECOMMISSIONING FINANCIAL ASSURANCE DOCUMENTAT

Dear Mr. Maas:

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This is in reference to your Decomissioning 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 The additional information should be provided.within 30 days of this letter.

Before you submit the responses, you are requested

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the date of this letter.

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.

21, 1996, to set up this will contact you later in the week of OctoberPlease reference the above TAC No conference call or meeting.

correspondence related to the request.

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If you have-any questions or need further information, please contact me at (301) 415-8111.

Sincerely,

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l Mary Thoma Adams Licensing Section 2 Licensing Branch Division of Fuei Cycle Safety and Safeguaros, HMSS Docket 70-1257 License SNM-1227

Enclosure:

Review of Decommissioning Funding Plan Parent Company Guarantee

,.O REQUEST FOR ADDITIONAL INFORMATION Siemens Power Corporation Docket No. 70-1257 Siemens power Corporation (SPC) in Bellevue, Washington, submitted a parent company guarantee / financial test from Siemens Aktiengese11schaft in the amo along with an unexecuted amendment to a previously-submitted of $27,000,000, standby trust agreement.' The parent company guarantee is intended to The replace two previously-submitted Letters of Credit (see Other Issue a).for license submission addresses decommissioning costs of $27,000,000 issued under 10 CFR Part 70. Upon review of the submission, NRC has determined that it should be modified in the following way:

Submit an alternative financial assurance mechanism, or clarify the (1) guarantor's ability to pass the financial test.

If SPC chooses to use the financial test by the parent company guarantor (see Recommendation 1), then NRC has determined that the following actions are necessary:

Revise Recitals 8 and 9 of the parent guarantee agreement to specify (2) recommended deadlines regarding annual financial test updates and alternative financial assurance (Regulatory Guide 3.66, page 4-43);

Notarize the parent guarantee (Regulatory Guide 3.66, page 4-44); and (3)

(4)

Execute the amendment to the standby trust agreement.

These reconnendations and other issues are discussed below.

Submit an Alterr'tive Financial Assurance Mechanism, or Clarify the (1)

Guarantor's Ability to Pass the Financial Test 1

ICF reviewed several previous submissions from the licensee and reported recommendations to NRC in memoranda dated September 2, 1993i November 15, 1994, March 16, 1995, and June 1, 1995.

submission from the licensee's predecessor, Advanced Nuclear Fuels Corporation, and reported recommendations to NRC in a memorandum datl January 4, 1991.

ENCLOSURE

9 2

The guarantor's ability to pass the required fineci:1 test is uncertain because it appears that the guarantor's financial statements have been prepared in accordance with German generally accepted acco'unting principles, rather than U.S. generally accepted accounting principles.

Although NRC 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.

firas; consequently, NRC's financial test may not be applicable or effective when used in conjunction with financial data, such as the guarantor's, that were prepared in accordance with foreign accounting practices.

Because of the uncertainty regarding the applicability of German accounting 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.

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 implement the.other recommendations discussed below.

Revise Recitals 8 and 9 of the Parent Guarantee Agreement to <cccify (2)

Recommended Deadlines Regarding Annual Financial Test Updates and Alternative Financial Assurance (Regulatory Guide 3.66, page 4-43)

Recital 8 of the submitted guarantee agreement states that the guarantor agrees to submit revised financial statements, financial test data, and a special auditor's report and reconciling schedule annually within 110 days of However, Recital 8 of the the close of the guarantor's fiscal year.

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 i

Similarly, Recital 9 of the submitted guarantee agreement of its fiscal year.

states that if the guarantor fails to meet the financial test criteria at the t

of the end of any fiscal-year, the licensee will e-?ify NRC within 12.Q day and of the fiscal. year of its intent to p!1 vide alternative financial i

assurance, and the guarantor will provide W.ernative financial assurance l

within 11Q days of the end of the fiscal yer if the licensee 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 j

providing alternative financial assurance.

With regard to the extended deadlines specified in the submitted guarantee-l German generally accepted accounting principles are referenced twice l

3 in the special report from the guarantor's certified public accountant (KPMG -

In Deutsche Treuhand-Gesellschaft AG Wirtschaftsprufungsgesellschaft).

addition, the accountant's opinion.on the guarantor's lo95 financial statements states that "the consolidated financial statements... comply This statement is also consistent with t with the German legal provisions."

use of German accounting principlas.

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