ML20196A600
| ML20196A600 | |
| Person / Time | |
|---|---|
| Site: | Calvert Cliffs  |
| Issue date: | 11/20/1998 |
| From: | Cruse C BALTIMORE GAS & ELECTRIC CO. |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| References | |
| NUDOCS 9811300070 | |
| Download: ML20196A600 (12) | |
Text
CHARLES H. CRUSE Baltimore Gas and Electric Company i'
Vice President Calvert Cliffs Nuclear Power Plant Nuclear Energy 1650 Calvert Cliffs Parkway Lusby, Maryland 20657 1
410 495-4455 1
i i
November 20,1998 U. S. Nuclear Regulatory Commission i
Washington,DC 20555 ATTENTION:
Document Control Desk
SUBJECT:
Calvert Cliffs Nuclear Power Plant Unit Nos.1 & 2; Docket Nos. 50-317 & 50-318 Independent Spent Fuel Storage Installation Docket No. 72-8 Application to Indirectly Transfer License Nos. DPR-53, DPR-69, and SNM-2505 Baltimore Gas and Electric Company (BGE) hereby requests an indirect transfer of control, pursuant to 10 CFR 50.80, of Operating License Nos. DPR-53 and DPR-69 for Calvert Cliffs Unit Nos. I and 2.
Baltimore Gas and Electric Company also requests an indirect transfer of control, pursuant to
)
10 CFR 72.50, of Materials License No. SNM-2505 for the Calvert Cliffs Independent Spent Fuel Storage Installation (ISFSI).
i The proposed indirect transfers of control are requested as part of a proposed corporate restructuring of 1
BGE. Under this restructuring, a new holding company, which will probably be called Condellation Energy Corporation, will be formed and BGE will become a wholly-owned subsidiary of Constellation Energy Corporation. Attachment (1) contains the application for the indirect transfer of control of the operating licenses for Calvert Cliffs Nuclear Power Plant. Attachment (2) contains the application for the indirect transfer of control of the operating license for the Calvert Cliffs ISFSI. Although current law prohibits BGE from forming a holding company, it is anticipated that emergency legislation will be passed by the Maryland General Assembly, in early January 1999, to permit the formation of a holdir.g company. It is anticipated that BGE would proceed with the transaction early in 1999.
These proposed changes do not involve a request for any change in the design or operation of either the Calvert Cliffs Nuclear Power Plant or the Calvert Cliffs ISFSI, nor any change in the terms and conditions of the existing licenses or Technical Specifications. Under Constellation Energy Corporation, BGE will remain technically and financially qualified to be the holder of the Facility Operating Licenses
\\
- and Special Materials License. 'Iherefore, the proposed indirect transfers do not result in an undue risk to the public health and safety.
9811300070 981120 0
PDR ADOCK 050003171 P
PDRL
\\
I Docum:nt Control Desk November 20,1998 Page 2 The proposed restructuring involves the approval of the shareholders, legislative and other regulatory i
authorities in addition to the NRC. Until all necessary approvals have been obtained and the holding I
company is formed, the indirect transfers cannot be implemented. Therefore, BGE requests the NRC to approve the proposed indirect transfers and make them effective at the time the holding company is formed. This date has yet to be determined and will occur following receipt of all other approvals. We expect the holding company to be created in mid-April 1999. Baltimore Gas and Electric Company will
)
keep the NRC informed or progress m obtaining these approvals and the planned date of the holding company creation.
Should you have questions regarding this matter, we will be p: eased to discuss them with you.
{
Very truly yours, J
A for C. H. Cruse Vice President - Nuclear Energy CHC/ PSF /dtm.
l Attachments: (1)
Application for the Indirect Transfer of Operating License Nos. DPR-53 and DPR-69; Calvert Cliffs Nuclear Power Plant 1
(2)
Application for the Indirect Transfer of Materials License No. SNM-2505 for the.
Calvert Cliffs Independent Spent Fuel Storage Installation ec:
R. S. Fleishman, Esquire H. J. Miller, NRC J. E. Silberg, Esquire Resident Inspector, NRC S. S. Bajwa, NRC R. I. McLean, DNR A. W. Dromerick, NRC J. H. Walter, PSC 5
t '.
ATTACHMENT (1)
-JAPPLICATION FOR THE. INDIRECT TRANSFER'OF.
I
- OPERATING.. LICENSE NOS. DPR-53'ANDL-DPR 69-.
LCALVERT. CLIFFS NUCLEAR POWER PLANT-i i
Baltimore Gas and Electric Company Calvert Cliffs Nuclear Power Plant November 20,1998
ATTACIIMENT (1)
APPLIr ATION TO TRANSFER AND AMEND OPERA UNG LICENSE NOS. DPR-53 AND DPR-69 CALVERT CLIFFS NUCLEAR POWER PLANT INTRODUCTION l
Baltimore Gas and Electric Company (BGE) is the holder of Facility Operating License Nos. DPR-53 and DPR-69 for the Calvert Cliffs Nuclear Power Plant (CCNPP), Unit I and Unit 2. The Operating Licenses authorize BGE to possess and operate CCNPP Units 1 and 2 in accordance with the conditions and requirements contained in the licenses.
l Pursuant to 10 CFR 50.80, BGE requests the Nuclear Regulatory Commission (NRC) to approve the indirect transfer of control of BGE's interests in the Operating Licenses. The indirect transfer is necessary because of the proposed corporate restructuring of BOE. Under the restructuring, a new holding company, expected to be called Constellation Energy Corporation, will be formed and BGE will become a wholly-owned subsidiary of Constellation Energy Corporation. The reason for this change of corporate structure is to respond effectively to increased competition in the energy industry. The holding company structure more fully separates the operations of the regulated and unregulated businesses. As a result, it provides maximum protection to ratepayers and a better structure for regulators to assure that there is no cross-subsidization of costs or transfer of business risk from the unregulated to the regulated lines of business, and it is easier to analyze and value individual lines of business. After the reorganization, Constellation Energy Corporation will continue to have the financial resources to allow BGE to possess and operate CCNPP.
The technical qualifications of BGE personnel to operate CCNPP will not be affected by the restructuring. As detailed in I.E below, the same technical and management organization currently responsible for operating CCNPP will remain responsible for the operation and maintenance of the two units after the restructuring.
Part I below sets forth the information required by 10 CFR 50.80 to support the indirect transfer of the Operating Licenses. Part 11 discusses the effective date for the license transfers.
L INFORMATION FOR INDIRECT TRANSFER OF CONTROL l
A.
Comcanv Name:
l Baltimore Gas and Electric Company B.
The Current Address Is:
l 39 W. Lexington Etreet j_
Baltimore,MD 21201 1
C.
Descriotion of Business:
Following the restructuring, BGE will be a wholly-owned subsidiary of Constellation Energy l
Corporation. Its purpose will remain the same as it is now, which is to engage principally in the generation, transmission, distribution, and sale of electric energy; and purchase, transportation, and sale of natural gas in Maryland to residential, commercial, and industrial customers for their own use, and to wholesale customers in Maryland and elsewhere for resale.
A'ITACHMENT (1) o, APPLICATION TO TRANSFER AND AMEND OPERATING LICENSE NOS. DPR-53 AND DPR-69 CALVERT CLIFFS NUCLEAR POWER PLANT D. Organization and Management:
Baltimore Gas and Electric Company is, and will remain after the restructuring, a corporation organized and existing under the laws of the State of14aryland. All of BGE's current directors and principal officers are citizens of the United States. They can all be reached in care of Baltimore Gas and Electric Corporation,39 W, Lexingtoa St., Baltimore, MD 21201.
Directors H. Furlong Baldwin Dr. Freeman A.Hrabowski,Ill Douglas L. Becker Nancy Lampton Beverly B. Byron Charles R. Larson J. Owen Cole George V. McGowan Dan A.Colussy Christian H. Poindexter Edward A. Crooke George L. Russell, Jr.
James R. Curtiss Michael D. Sullivan Jerome W. Geckle Princinal Officers C. H. Poindexter L. D. Miller E. A. Crooke R. W. Lowman R. S. Fleishman C. H. Cruse H.N. Arnold S. F. Wood R. E. Denton G. C. Martin D. A. Brune C. Doyle F. O. Heintz T. F. Brady Following the proposed restructuring, BGE will not be owned, controlled or dominated by an alien, foreign corporation, or foreign government, and is not acting as an agent or representative of any another person in this request.
E.
Technical Oualifications-The technical qualifications of BGE to carry out its responsibilities under the Operating l
Licenses will remain the same. The reorganization involves no significant changes to either tne technical organization or staff responsible for operating the facility. Both before and after the L
reorganization, essentially the same BGE nuclear organization and staff will be responsible for the operation and maintenance of CCNPP. The reorganization requires no change in the numbers and qualifications of personnel who operate CCNPP. While specific individuals may l
join or leave the nuclear staff, the technical and administrative abilities will remain essentially unchanged.
F.
Financial Oualifications:
After the reorganization, BGE will continue to be an electric utility within the definition set out in 10 CFR 50.2. It will generate, transmit, and distribute electricity and recover the cost of this electricity through rates authorized by the Maryland Public Service Commission and the Federal Energy Regulatory Commission for wholesale transactions. Therefore, the financial 2
ATTACIIMENT m APPLICATION TO TRANSFER AND AMEND OPERATING LICENSE NOS. DPR-53 AND DPR-69 j
CALVERT CLIFFS NUCLEAR POWER PLANT qualifications of BGE to possess and operate CCNPP are presumed by 10 CFR 50.33(f) and no specific demonstration of financial qualifications is required.
We understand that in connection with recent restructurings and mergers of other licensees, the R.C has expressed an interest in being kept informed of subsequent asset transfers. If this is a consideration with respect to this restructuring, BGE is willing to commit to provide the Director of the Office of Nuclear Reactor Regulation a copy of any application, at the time it is filed, to transfer (excluding grants of security interests or liens) from BGE to its proposed parent, or any other affiliated company, facilities for production, transmission, or distribution i
of electric energy having a depreciated book value exceeding ten percent of BGE's consolidated net utility plant, as recorded in its books of account.
G.
Decommissioning Funding:
Nuclear Regulatory Commission regulations require information showing " reasonable assurance... that funds will be available to decommission the facility" [10 CFR 50.33(k)].
Baltimore Gas and Electric has filed a decommissioning report with the NRC under 10 CFR 50.75 and is providing financial assurance for decommissioning CCNPP Units 1 and 2 through an external sinking fund in which deposits are made at least annually. After the restructuring, BGE will remain responsible for the decommissioning liabilities associated with the Calvert Cliffs plant and will continue to fund its decommissioning trust for the plant in accordance with NRC regulations.
H.
Antitrust Information:
Both Units 1 and 2 of CCNPP were licensed under Section 104(b) of the Atomic Energy Act' and no antitrust review is required. Additionally, the NRC has stated in NUREG-1574 that,"If the application involves an indirect transfer of the license through transfer of control of the l
existing licensee to another entity, where the existing licensee remains the licensee, no antitrust review is conducted since there is no effective application for an operating license." In this case, the indirect transfer of control does not involve the issuance of a license because, after the restructuring, BGE will remain the licensee with respect to CCNPP Units 1 and 2. Therefore.
no antitrust review is required with respect to the proposed transfer and no antitrust information is being submitted with this application.
i I.
Statement of the Purnoses and the Nature of the Transfer:
The purpose of restructuring is to better position BGE fo: the evolving restructuring of the electric and gas industries that is occurring as the result of both federal and state initiatives, as l
well as market changes. The proposed holding company structure will also protect BGE's ratepayers and BGE's preferred stock and bond holders from the financial risks of non-utility enterprises. The holding company structure more fully separates the operations of regulated I
As stated by the NRC in connection with it's review of BGE's proposed merger with P2PCO: "The Calvert Cliffs Nuclear Power Plant received its construction permit (CP) prior to enactment of Section 105 of the Atomic Energy Act. Nuclear plants that received cps prior to enactment of Section 105 in December 1970 were issued 104b licenses rather than 103 commercial licenses and were grandfathered for purposes of antitrust review. Cousequently, the staff is not conducting a significant change antitrust review as a result of the proposed me.ger invoMng BGE and PEPCO."
3
ATTACHMENT m APPLICATION TO TRANSFER AND AMEND OPERATING LICENSE NOS. DPR-53 AND DPR-69 i
CALVERT CLIFFS NUCLEAR POWER PLANT i
and unregulated businesses. As a result, it provides maximum protection to ratepayers and a l
better structure for regulators to assure that there is no cross-subsidization of costs or transkr of business risk from the unregulated to regulated lines of business, and it is easier to analpe and value of individual lines of business.
J.
Restricted Data:
This application does not contain any Restricted Data or other classified defense information, and it is not expected that any will become involved. However, in the event that such information does become involved, BGE agrees that it will appropriately safeguard such l
information, and it will not permit any individual to have access to Restricted Data until the l
Office of Personnel Management (the successor to the Civil Service Commission) has made an investigation and reported to the NRC on the character, associations, and loyalty of the individual, and the NRC has determined that permitting such a person to have access to Restricted Data will not endanger the common defense and security of the United States.
H.
Environmental Assessment:
l l
The proposed restructuring does not involve any change to the nuclear plant operations or i
equipment of CCNPP Units 1 and 2, and does not change any environmental impact previously evaluated in the Final Environmental Statement for Calvert Cliffs.
Accordingly, this l
application involves no significant environmental impact.
II. EFFECTIVE DATE The proposed restructuring involves legislative action and the approval of BGE's shareholders and other regulatory authorities in addition to the NRC. These other regulatory authorities include the Federal Energy Regulatory Commission and the Pennsylvania Public Utilities Commission. Until all legislative and regulatory approvals have been obtained and the restructuring is complete, the indirect transfer cannot be implemented. Therefore, BGE requests the NRC to approve the proposed indirect transfer and make it effective at the time the restructuring is complete. Baltimore i
Gas and Electric Company intends to implement the restructuring as soon as reasonably possible after all necessary approvals have been obtained (expected by mid April). Therefore, the NRC is requested to review and approve this application by April 1,1999, and allow 12 months for the transfer to be implemented.
CONCLUSION For the reasons stated above, BGE requests the NRC to issue an order approving the indirect transfer of control of BGE's interests in Operating Licenses DPR-53 and 69 for CCNPP Units 1 and 2 that would result from the restructuring of BGE, under which BGE would become a wholly-owned subsidiary of the holding company, probably called Constellation Energy Corporation.
4 4
_ _._...._.- _.~_-.--.._..-...
ATTACHMENT (2) 1
- APPLICATION FOR
- THE INDIRECT. TRANSFER -OF -
MATERIALS: LICENSE NO.L SNM-2505
, INDEPENDENT SPENT FUEL STORAGE INSTALLATION _
l Baltimore Gas and Electric Company Calvert Cliffs Nuclear Power Plant November 20,1998
j ATTACHMENT (2)
APPLICATION TO TRANSFER AND AMEND MATERIALS LICENSE NO. SNM-2505 INDEPENDENT SPENT FUEL STORAGE INSTALLATION Baltimore Gas and Electric Company (BGE) is the holder of Materials License No. SNM-2505 for the i
Calvert Cliffs Independent Spent Fuel Storage Installation (ISFSI). Materials License No. SNM-2505 authorizes BGE to transfer and store Calvert Cliffs spent fuel in the Calvert Cliffs ISFSI in accordance with the conditions and requirements set forth in the license.
Pursuant to 10 CFR 72.50, BGE requests the Nuclear Regulatory Commission (NRC) to approve the indirect transfer of control of BGE's interests in Materials License No. SNM-2505. The indirect transfer is necessary because of the proposed corporate restructuring of BGE. Under the restructuring, a new holding company, probably called Constellation Energy Corporation, will be formed and BGE will become a wholly-owned subsidiary of Constellation Energy Ccrporation. The reasons for this change of corporate structure is in order to respond effectively to increased competition in the energy industry. The holding company structure more full separates the operations of regulated and unregulated businesses.
As a result, it provides maximum protection to ratepayers and a better structure for regulators to assure that there is no cross-subsidization of costs or transfer of business risk from unregulated to regulated lines of business. After the reorganization, Constellation Energy Corporation will continue to have the financial resources to allow BGE to possess and operate the Calvert Cliffs ISFSt.
The technical qualifications of BGE personnel to operate the Calvert Cliffs ISFSI will not be affected by the restructuring. As detailed in I.E below, the same technical and management organization currently responsible for operating Calvert Cliffs ISFSI will remain responsible after the restructuring.
Part I below sets forth the information required by 10 CFR 72.50 to support the indirect transfer of Materials License No. SNM-2505 for the Calvert Cliffs ISFSI. Part II discusses the effective date for the indirect transfer.
L INFORMATION FOR INDIRECT TRANSFER OF CONTROL A.
Name of Comoany:
Baltimore Gas and Electric Company B.
The Current Address Is:
39 W. Lexington Street Baltimore, MD 21201 l
C.
Descriotion of Business:
Following, the restructuring, BGE will be a wholly-owned subsidiary of Constellation Energy Corporation. Its purpose will remain the same as it is now, which is to engage principally in the generation, transmission, distribution and sale of electric energy and purchase, transportation and sale of natural gas in Maryland to residential, commercial, and industrial customers for their own use and to wholesale customers in Maryland and elsewhere for resale.
D.
Organization and Management:
Baltimore Gas and Electric Company is, and will remain after the restructuring, a corporation organized and existing under the laws of the State of Maryland. All of BGE's current directors and principal officers are citizens of the United States. They can all be reached in care of Baltimore Gas and Electric Corporation,39 W. Lexington St., Baltimore, MD 21201.
I
I ATTACHMENT (2) fa
~
L APPLICATION TO TRANSFER AND AMEND MATERIALS LICENSE NO. SNM-2505 l
INDEPENDENT SPENT FUEL STORAGE INSTALLATION i
l Directors H. Furlong Baldwin Dr. Freeman A. Hrabowski,III Douglas L. Becker Nancy Lampton Beverly B. Byron Charles R. Larson J. Owen Cole George V. McGowan
{
Dan A.Colussy Christian H. Poindexter Edward A. Crooke George L. Russell, Jr.
l James R. Curtiss Michael D. Sullivan Jerome W. Geckle Principal Officers C. H. Poindexter L. D. Miller E. A. Crooke R. W. Lowman R. S. Fleishman C. H. Cruse H. N. Arnold S. F. Wood R. E. Denton G. C. Martin D. A. Brune C. Doyle F. O. Heintz T. F. Brady Following the proposed restructuring, BGE will not be owned, controlled, or dominated by an alien, foreign corporation, or foreign government and is not acting as an agent or representative of any another person in this request.
E.
Technical Oualifications The technical qualifications of BGE to carry out its responsibilities under the Materials License will remain the same. The reorganization involves no significant changes to either the technical organization or staff responsible for operating the facility. Both before and after the
[;
reorganization, essentially the same BGE nuclear organization and staff will be responsible for the operation and maintenance of the Calvert Cliffs ISFSt. The reorganization requires no change in the numbers and qualifications of personnel who operate the Calvert Cliffs ISFSI.
While specific individuals mayjoin or leave the nuclear staff, the technical and administrative abilities will remain essentially unchanged. Baltimore Gas and Electric Company is committed to maintaining an adequate complement of trained and certified personnel for the loading and maintaining of spent fuel at the Calvert Cliffs ISFSI.
F.
Financial Oualifications The financial information required of an applicant to prove qualification to maintain and operate an ISFSI are set out in 10 CFR 72.22(e).
The information requested by 10 CFR 72.2Me)(1)'is not needed since the ISFSI has already been constructed, and the information requested by 10 CFR 72.22(e)(3) is covered by decommissioning funding discussed below. The remaining item for which an applicant must establish financial qualifications is the "[e]stimated operating costs over the planned life of the ISFSI"
[10 CFR 72.22(e)(2)].
2
l ATTACHMENT (4) l APPLICATION TO TRANSFER AND AMEND 1
MATERIALS LICENSE NO. SNM-2505 INDEPENDENT SPENT FUEL STORAGE INSTALLATION l
l After the reorganization, BGE will continue to be an electric utility within the definition set out in 10 CFR 50.2. It will generate, transmit, and distribute electricity and recover the cost of this electricity through rates authorized by the Maryland Public Service Commission and the Federal Energy Regulatory Commission for wholesale transactions. The same rate-making process that provides reasonable assurance electrical utilities will have the funds necessary to safely operate a facility licensed under 10 CFR Part 50 provides equal assurance that BGE will have sufficient funds to cover the operating costs of the ISFSI over its planned life.
We understand that in connection with recent restructurings and mergers of other licensees, the NRC has expressed an interest in being kept informed of subsequent asset transfers. If this is a consideration with respect to this restructuring, BGE is willing to commit to provide the Director of the Office of Nuclear Materials Safety and Safeguards a copy of any application, at the time it is filed, to transfer (excluding grants of security interests or liens) from BGE to its proposed parent, or any other affiliated company, facilities for production, transmission or distribution of electric energy having a depreciated book value exceeding ten percent of BGE's consolidated net utility plant, as recorded in its books of account.
G.
Decommissioning Funding Baltimore Gas and Electric Company is currently providing financial assurance for decommissioning the ISFSI in accordance with Revision 1 to the " Decommissioning Plan For
- the Calvert Cliffs Independent Spent Fuel Storage Installation," dated August 18,1992.
Baltimore Gas and Electric Company deposits money annually in an external sinking trust fund in accordance with 10 CFR 72.30(c)(5) for decommissioning the ISFSI.
After the restructuring, BGE will remain responsible for the decommissioning liabilities associated with the Calvert Cliffs plant and will continue to ftmd its decommissioning trust for the plant in accordance with NRC regulations.
l H.
Statement of the Purnoses and the Nature of the Mercer The purpose of restructuring is to better position BGE for the evolving restructuring of the l
electric and gas industries that is occurring as the result of both federal and state initiatives, as well as market changes. The proposed holding company structure will also protect BGE's ratepayers and BGE's preferred stock and bond holders from the financial risks of non-utility enterprises. The holding company structure more fully separates the operations of regulated and unregulated businesses. As a result, it provides maximum protection to ratepayers and a better structure for regulators to assure that there is no cross-subsidization of costs or transfer of business risk from the unregulated to the regulated lines of business, and it is easier to analyze and value individual lines of business.
I.
Environmental Assessment The proposed restructuring does not involve any change to the operations or equipment of the Calvert Cliffs ISFSI and does not change any environmental impact previously evaluated in the Final Environmental Statement for Calvert Cliffs or in the Environmerital Assessment and Finding of No Significant Impact for the Calvert Cliffs ISFSI. Accordingly, this application involves no significant environmental impact.
3
ATTACHMENT (2)
APPLICATION TO TRANSFER A.ND AMEND MATERIALS LICENSE NO. SNM-2505 INDEPENDENT SPENT FUEL STORAGE INSTALLATION II. EFFECTIVE DATE The proposed restructuring involves legislative action and the approval of BGE's shareholders and other regulatory authorities in addition to the NRC. These other regulatory authorities include the Federal Energy Regulatory Commission, the Maryland Public Service Commission, and the i
Pennsylvania Public Utilities Commission. Until all legislative and regulatory approvals have been obtained and the restructuring is complete, the indirect transfer cannot be implemented. Therefore, BGE requests the NRC to approve the proposed indirect transfer and make it effective at the time the restructuring is complete. Baltimore Gas and Electric Company intends to implement the restructuring as soon as reasonably possible after all necessary approvals have been obtained (expected by mid-April). Therefore, NRC is requested to review and approve this application by April 1,1999, and allow 12 months for the transfer to be implemented.
CONCLUSION For the reasons stated above, BGE requests the NRC to issue an order approving the indirect transfer of control of BGE's interests in Materials License No. SNM-2505 for the Calvert Cliffs ISFSI that would result from the restructuring of BGE, under which BGE would become a wholly-owned subsidiary of the holding company, probably called Constellation Energy Corporation.
l l
1 4
I