ML20137S556
| ML20137S556 | |
| Person / Time | |
|---|---|
| Site: | Monticello, Prairie Island, University of New Mexico |
| Issue date: | 04/01/1997 |
| From: | NRC (Affiliation Not Assigned) |
| To: | |
| Shared Package | |
| ML20137S553 | List: |
| References | |
| NUDOCS 9704150172 | |
| Download: ML20137S556 (3) | |
Text
.
putty UNITED STATES y=
s j
NUCLEAR REGULATORY COMMISSION a
4 WASHINGTON, D.C. 2000H001
\\...../
l SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION I
t RELATED TO THE TRANSFER OF CONTROL OF LICENSES j.
FOR MONTICELLO AND PRAIRIE ISLAND UNITS 1 AND 2 NUCLEAR GENERATING PLANTS AND PRAIRIE ISLAND INDEPENDENT SPFNT FUEL STORAGE INSTALLATION i
l DOCKET NOS. 50-263. 50-282. 50-306. AND 72-10 l
1.0 INTRODUCTION
1 i
By letter dated October 20, 1995, Northerh States Power Company (NSP) recuested approval under Sections 50.80 and 72.50 of Title 10 of the Code of Feceral Reaulationi (10 CFR) of the transfer of control of licenses for the i
Monticello and Prairie Island Units 1 and 2 Nuclear Generating Plants and the 4
i Prairie Island Independent Spent Fuel Storage Installation (ISFSI) in 1
connection with a r.erger agreement with Wisconsin Energy Corporation (WEC).
NSP has indicated that it intends to transfer ownership of its licenses from NSP to a newly formed NSP, which will become a wholly-owned subsidiary of WEC, currently the parent of Wisconsin Electric Power Company. WEC will be renamed Primergy Corporation. The New NSP would be the owner and operator of the two-unit Frairie Island Nuclear Generating Plant, the Prairie Island ISFSI,
.the Monticello Nuclear Generating Plant, and facilities utilizing byproduct material under 10 CFR Part 30 licenses. After the merger, New NSP would be an
" electric utility" as defined in 10 CFR 50.2, engaged in the generation, transmission, and distribution of electric energy for wholesale and retail sale. Current NSP common stockholders would receive shares in Primergy Corporation in exchange for their shares in NSP.
2.0 EVALUATION 2.1 Financial Analysis The basis of this review is 10 CFR 50.80(a), which states, "No license for a production or utilization facility, or any right thereunder, shall be transferred, assigned, or in any manner disposed of, either voluntarily or involuntarily, directly or indirectly, through transfer of control of the license to any person, unless the Commission shall give its consent in writing." Similar wording in 10 CFR 30.34(b) and 10 CFR 72.50 applies to transfers of control of licenses issued under these sections. The Commission may approve the transfer of control of the license, after notice to interested persons (61 FR 24837),
i NSP indicates that the proposed merger and combination of NSP and WEC offers "significant strategic and financial benefits to each company and to their respective shareholders, as well as to their employees and customers and the 9704150172 970401 N
ADOCK0500g3 PDR
(
, j comunities in which they do business." Listed benefits, among other projected benefits, include various projected economies of scale, i
diversification of service territory, and integration of nuclear operations.
In its letter to shareholders dated August 7, 1995, (pp. 38-39) NSP states that, following consummation of the merger agreement, the New NSP will be an
" electric utility" as defined in 10 CFR 50.2. That is, the New NSP will continue to be engaged in the generation, transmission, and distribution of i
electricity and will remain subject to the rate regulatory authority of the Minnesota Public Utilities Commission, as well as the Public Service C9mmission of Wisconsin, the Michigan Public Service Commission, the North Dakota Public Service Commission, and the South Dakota Public Utilities Commission (NSP letter to NRC dated October 20, 1995, pp. A-2, A-3, and A-7).
Thus, according to NSP, pursuant to 10 CFR 50.33(f), the New NSP is exempt from further financial qualifications review.
Based on the information provided in NSP's application, the staff finds that there will be no near-term substantive change in the New NSP's financial ability to contribute appropriately to the operations and decommissioning of the New NSP units as a result of the proposed license transfer. The New NSP j
would also remain an " electric utility" as defined in 10 CFR 50.2, engaged in the generation, transmission, and distribution of electric energy for wholesale and retail sale, subject to the rate regulation of the Minnesota Public Utility Commission. Thus, pursuant to 10 CFR 50.33(f), NSP is exempt from further financial qualifications review as an electric utility.
In view of NRC's concern that restructuring transactions which will result in the establishment of a holding company structure can lead to a diminution of assets necessary for the safe operation and decommissioning of a licensee's nuclear power plants, NRC has sought to obtain commitments from its licensees that initiate such restructurings not to transfer significant assets from the licensee without notifying NRC. NRC believes its approval of the proposed license transfers resulting from the transaction involving NSP and WEC should be contingent on NSP making a commitment similar to the following:
[The newly established] NSP will provide the Director of the Office of i
Nuclear Reactor Regulation a copy of any application, at the time it is filed, to transfer (excluding grants of security interests or liens) from NSP to its proposed parent or to any other affiliated company, facilities or other assets for the production, transmission, or distribution of electric energy having a depreciated book value j
exceeding ten percent (10%) of NSP's consolidated net utility plant, as j
recorded on NSP's books of account.
NSP made such a commitment in a letter to NRC dated August 28, 1996. The staff believes this commitment provides reasonable assurance that the new NSP l
will continue to maintain adequate resources to safely operate and decommission its Prairie Island and Monticello nuc' ear generating units and associated materials and spent fuel storage facilities.
5 4
I
-. 2.2 Antitrust The proposed merger of NSP and WEC involves the indirect combination of licensees for three nuclear plants under one holding company, Primergy: NSP, the licensee for Prairie Island Units 1 and 2 and Monticello, and Wisconsin Electric Power Company, the licensee for Point Beach Units 1 and 2.
All three of these plants received their construction permits prior to enactment of Section 105 of the Atomic Energy Act, and received Section 104b licenses.
Section 105 of the Act exempts Section 104b licensees (with minor exception not relevant in this case) from its antitrust review requirements.
Accordingly, no antitrust review is required by the NRC.
2.3 Manac-- nt and Technical Qualifications The application states that there will be no change in the management and technical qualifications of NSP's nuclear organization as a result of the license transfers. The New NSP will become a subsidiary of WEC and will function in the same fashion as NSP did prior to restructuring.
Based upon the continuity of NSP's nuclear organization and management in the New NSP as described above, the staff finds that, with respect to technical qualifications and management, the proposed transferee is qualified to hold the licenses.
2.4 Foreion Ownershin j
Information before the staff indicates that neither WEC nor the New NSP will be owned, controlled, or dominated by any alien, foreign corporation, or j
foreign government.
3.0 ENVIRONMENTAL CONSIDERATION
[
Pursuant to 10 CFR 51.21, 51.32, and 51.35, an environmental assessment and finding of no significant impact has been prepared and published in the federal Register on Nay 24, 1996 (61 FR 26225).
s Accordingly, based upon the environmental assessment, the Commission has determined that the proposed action will not have a significant effect on the quality of the human environment.
4.0 CONCLUSION
i The Commission has concluded, based on the considerations discussed above, 3-that:
(1) the New NSP is qualified te hold the licenses, and (2) the transfers are otherwise consistent with applicable provisions of law, j
regulations, and orders issued by the Commission pursuant thereto.
Principal Contributors:
R. Woc.i B. Wetzel Dated: April 1, 1997 4-i
,