ML20196J533
| ML20196J533 | |
| Person / Time | |
|---|---|
| Site: | Perry  |
| Issue date: | 12/02/1998 |
| From: | NRC (Affiliation Not Assigned) |
| To: | |
| Shared Package | |
| ML20196J530 | List: |
| References | |
| NUDOCS 9812100118 | |
| Download: ML20196J533 (5) | |
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WASHINGTON, D.C. 30866-0001 SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION PROPOSED TRANSFER OF OPERATING AUTHORITY TO FENOC FACILITY OPERATING LICENSE NO. NPF-58 CLEVELAND ELECTRIC ILLUMINATING COMPANY AND CENTERIOR SERVICE COMPANY DOCKET NO. 50-440 l
PERRY NUCLEAR POWER PLANT. UNIT NO.1
1.0 INTRODUCTION
By application dated June 30,1998, and as supplemented by submittals dated October 27 and November 30,1998, The Cleveland Electric illuminating Company (CEI) and Centerior Service Company (CSC), as the current licensed operators of the Perry Nuclear Power Plant, Unit No.1 (PNPP), and on behalf of CEl, Toledo Edison Company (TE), Ohio Edison Company (OE),
OES Nuclear, Inc., Pennsylvania Power Company (Penn Power), and Duquesne Light Company (DL), as N owners of PNPP, requested approval of the transfer of operating authority and a conte,nning amendment for the PNPP Facility Operating License No. NPF-58.
With the exception of DL, all holders of this license are wholly-owned direct or indirect subsidiaries of FirstEnergy Corporation (FE). The proposed approval would allow FirstEnergy Nuclear Operating Company (FENOC) as a new operating company to assume exclusive responsibility for the operation and maintenance of PNPP. Currently, CEI and CSC have that responsibility under the license. The PNPP facility is a single-unit nuclear power station located in Lake County, Ohio.
Under the requested transfer approval and conforming license amendment, the owners will be authorized only to possess the facility CSC will be removed entirely from the license, and FENOC added to the license. Ownership of the facility will not be affected by the proposed transfer of operating authority from CSC and CEI to FENOC. Each owner will retain its current ownership interest: CEl owns 31.11 percent, TE owns 19.91 percent, OE and OES own 30 percent, Penn Power owns 5.24 percent, and DL owns 13.74 percent. CENOC will not own any portion of PNPP. Also, the owners' entitlement to capacity and energy from PNPP will not be affected by the proposed transfer of operating responsibility.
9812100118 981202 PDR ADOCK 05000440 P
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A similar application has been submitted separately to the NRC to transfer operating authority for the Davis-Besse Nuclear Power Station, Unit No.1, to FENOC. The Davis-Besse station is also located in Ohio, with two FE subsidiaries (TE and CEI) owning 100 percent of this facility.
2.0 BACKGROUND
The owners of PNPP will enter into an operating agreement with FENOC, which is an Ohio corporation that is a wholly owned subsidiary of FE, The application states that FENOC's sole corporate purpose will be the operation of FE's nuclear power plants on behalf of, and for the l
benefit of, their owners. The new operating agreement will specify the relationship between the PNPP owners and FENOC as the sole operator of the PNPP. This agreement will define the rights, responsibilities, and limitations of FENOC's authority regarding the operation of the facility and will state that FENOC has the sole authority, as the operator of PNPP, to make all decisions within the scope of the operating license relatir g to public health and r>afety.
The application also states that the owners of PNPP will continue to provide all funds for the operation, maintenance, and decommissioning of the plant, including funding for any emergency situations that might arise at the facility. Upon the effective date of the transfer, l
substantially all employees of CEI and CSC who are presently dedicated to operation of PNPP will become employees of FENOC.
3.0 EVALUATION l
This NRC staff review of the proposed transfer of operating authority under the PNPP facility operating license covers the following areas: financial qualifications, antitrust considerations, l
foreign ownership and control considerations, and technical qualifications. Each of these areas is evaluated below.
l 3.1 Financial Qualifications The proposed transfer of operating authority will not adversely affect the ability of the PNPP owners to obtain or provide the funds necessary to cover the costs of the operation, maintenance, repair, decontamination, and decommissioning of PNPP. The current owners will continue to be liable for such costs as under the current license, with no financial responsibility being transferred to FENOC.
The following statements summarize information from the application regarding key interrelationships that the operating agreement between the facility owners and FENOC will establish:
j FENOC will not have any ownership interest in PNPP but will have overall responsibility for its safe operation. FENOC will operate the facility in accordance with the operating license and shall have exclusive responsibility for making safety decisions.
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.,The owners will retain their current authority to review and approve budgets of PNPP. This will not encumber FENOC's ability to make operational safety decisions and will not impact the safe operation of PNPP.
All costs of PNPP, incurred or accrued, are liabilities of the facility owners when incurred or accrued and are bome in proportion to their respective undivided interests in PNPP, and the owners will commit to provide FENOC funds to pay these costs.
Thus, the proposed transfer does not change the current financial obligations of the PNPP owners. Further, the status of the owners as electric utilities, as defined by the NRC in 10 CFR 50.2, will be unaffected by the proposed transfer. Accordingly, there will be no change in their financial qualifications. Thus, the NRC staff has determined that there will be no adverse safety consequences from the proposed change in relation to the future funding of operating, maintenance, and decommissioning costs of PNPP.
3.2 Antitrust Considerations As noted, the proposed transfer of operating authority to FENOC will not affect existing ownership of PNPP or current entitlement to its capacity and energy. FENOC will devote itself exclusively to operating FE's nuclear power plants, and it will not be involved in the marketing or brokering of power or energy from these facilities. To reinforce this aspect of the transfer, the application proposes the modification of the antitrust conditions section of the license to reflect, in part, the following:
FENOC shall not market or broker power or energy from the Perry Nuclear Power Plant, Unit No.1. The Owners are responsible and accountable for the actions of its agent, FENOC, to the extent said agent's actions affect the marketing or brokering of power or energy from the Perry Nuclear Power Plant, Unit No.1 and, in any way, contravene the antitrust conditions of this paragraph or Appendix C of this license.
Further, the application acknowledges that the transfer will not alter the existing antitrust license conditions applicable to the owners and that those conditions will remain applicable to all owners.
Since the owners will continue to be bound by the existing antitrust license conditions, the only antitrust issue is whether there are any potential antitrust concerns with respect to the addition of FENOC to the license. The staff has determined that conditioning approval of the transfer on prohibiting FENOC from marketing or brokering power or energy from the facility, and on declaring the owners responsible and accountable for the actions of FENOC with respect to the marketing or brokering of power and contravention of the antitrust license conditions will provide reasonable assurance that any such concerns will be precluded, thus removing any need to conduct any further antitrust review. The proposed amendments to the license discussed above are consistent with these conditions of approval of the transfer.
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3.3 Foreian Ownershio and Control Considerations FENOC will be a wholly owned subsidiary of FE, as are all but one of the current owners, as well as the operators. According to the application, all directors and principal officers of FENOC will be citizens of the United States, and FENOC will not be owned, controlled, or dominated by foreign interests. The staff has no reason to believe otherwise.
3.4 Technical Queii%stigog According to the application, the current pbot organization, the oversight organizations, and the engineering and support organizations would be trasferred essentially intact to FENOC. The technical qualifications of the FENOC organization, therefors, would be at least equivalent to those of the existing organization.
The licensees also stated that a central objective in planning the proposed transfer of employees and operating responsibilities to FENOC has been to ensure that plant operation is
. not disrupted and to respect the integrity of the present, successful organization. According to the licensees, FENOC will operate, manage, and maintain PNPP in accordance with the conditions and requirements established by the NRC, with the same regard for public and personal safety heretofore exemplified by the current operators. The nuclear organization of PNPP will be preserved in the FENOC organization with only one change; the senior nuclear executive will report directly to the Directors of FENOC rather than to the President and Chief Operating Officer of CSC. The current PNPP Vice President, Nuclear, will become a Vice President of FENOC and will continue to be the officer at the site responsible for the overall safe operation and maintenance of PNPP.
Based on the above, the staff finds that FENOC will be technically qualified to operate PNPP.
3.5 Summarv On the basis of the preceding determinations, the staff concludes that FENOC will be technically qualified to operate the facility and that the proposed action involving FENOC will not adversely affect the financial qualifications of the current owners of PNPP with respect to its operation and decommissioning. Also, there do not appear to be any problematic antitrust or foreign ownership considerations that would result from the proposed action, provided certain conditions, discussed earlier, are imposed with respect to the marketing or brokering of power by FENOC and the responsibility of the owners for any of FENOC's actions in that regard.
4.0 ENVIRONMENTAL CONSIDERATION
Pursuant to 10 CFR 51.21 and 51.35, an environmental assessment and finding of no significant impact was published in the Federal Reaister on September 10,1998 (63 FR 48531).
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5.0 CONCLUSION
in consideration of the foregoing, and with the conditions described above, the staff concludes that FENOC is qualified to hold the license to the extent of, and for the purposes proposed by, the application for approval of the transfer of operating authority, and that the transfer is otherwise consistent with the applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto.
Principal Contributors: A. McKeigney D. Pickett l
Date: December 2, 1998 t
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