ML20196J564
| ML20196J564 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse  |
| Issue date: | 12/01/1998 |
| From: | NRC (Affiliation Not Assigned) |
| To: | |
| Shared Package | |
| ML20196J557 | List: |
| References | |
| NUDOCS 9812100126 | |
| Download: ML20196J564 (5) | |
Text
%q 3
k UNITED STATES
.o g'
f j
NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20666 4001 p
Y...../
SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION PROPOSED TRANSFER OF OPERATING AUTHORITY TO FENOC FACILITY OPERATING LICENSE NO. NPF-3 CLEVELAND ELECTRIC ILLUMINATING COMPANY TOLED0 EDISON COMDANY AND CENTERIOR SERVICE COMPANY 1
DOCKET NO. 50-346 DAVIS-BESSE NUCLEAR POWER STATION. UNIT NO. I
1.0 INTRODUCTION
By application dated June 29, 1998, as supplemented by submittals dated July 14, October 26, and November 30, 1998, Toledo Edison Company (TE) and Centerior Service Company (CSC), as the current licensed operators of the Davis-Besse Huclear Power Station, Unit No.1 (DBNPS), and on behalf of TE and Cleveland Electric Illuminating Company (CEI) as the owners of DBNPS, requested approval of the transfer of operating authority and a conforming amendment for the Davis-Besse Facility Operating License No. NPF-3, currently held by TE, CSC, and CEI, which are wholly owned subsidiaries of FirstEnergy Corporation (FE). The proposed approval would allow FirstEnergy Nuclear Operating Compan/ (FENOC), as a new operating company, to assume exclusive responsibility for the operation and maintenance of the DBNPS facility.
Currently, TE and CSC have that responsibility under the license. The DBNPS facility is a single-unit nuclear power station located in 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 TE to FENOC.
Each owner will retain its current ownership interest (CEI owns 51.38 percent and TE owns the remaining 48.62 percent), and FENOC will not own any portion of DBNPS. Also, the owners' entitlement to capacity and energy from DBNPS will not be affected by the proposed transfer of operating responsibility.
A similar application to this one for DBNPS has been submitted separately to the NRC to transfer operating authority for the Perry Nuclear Power Plant to FENOC. The Perry plant is also located in Ohio, and various subsidiaries of FE own a majority interest in this facility.
9812100126 981201 PDR ADOCK 05000346 P
3 1
l l [ -
2.0 BACKGROUND
TE and CEI as the owners of DBNPS will enter into an operating agreement with FENOC, which is an Ohio corporation that is a wholly owned subsidiary of FE.
Pages 3 and 4 of the application state that FEN 0C's sole corporate purpose j
will be the operation of FE's nuclear power plants on behalf of, and for the j
benefit of, their owners. The new operating agreement will specify the relationship between TE and CEI as facility owners and FENOC as the sole operator of DBNPS. This agreement will define the rights, responsibilities, and limitations of FEN 0C's authority regardmg the operation of the facility and will state that FENOC has the sole authority, as the operator of DBNPS, to make all decisions within the scope of the operating license relating to public health and safety.
The application also states that TE and CEI will continue to provide all funds for the operation, maintenance, and decommissioning of DBNPS, including funding for any emergency situations that might arise at the facility.
Upon the effective date of the transfer, substantially all employees of TE and CSC 1
who are presently dedicated to operation of DBNPS will become employees of FENOC.
3.0 EVALUATION This NRC staff review of the proposed transfer of operating authority under the DBNPS facility operating license covers the following areas:
financial qualifications, antitrust considerations, foreign ownership and control considerations, and technical qualifications.
Each of these areas is evaluated below.
3.1 Financial Oualifications The proposed transfer of operating authority will not adversely impact the ability of the DBNPS owners to obtain or provide the funds necessary to cover the costs of the operaticn, maintenance, repair, decontamination, and decommissioning of DBNPS. 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 on pages 8 and 9 of the application regarding key interrelationships that the operating agreement between the facility owners and FENOC will establish:
FENOC will not have any ownership interest in DBNPS 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.
The owners will retain their current authority to review and approve budgets of DBNPS.
This will not encumber FENOC's ability to make operational safety decisions and will not impact the safe operation of DBNPS.
l
_3_
All costs of DBNPS, incurred or accrued, are liabilities of the facility owners when incurred or accrued and are borne in proportion to their respective undivided interests in DBNPS, 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 DBNPS 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 DBNPS.
3.2 Antitrust Considerations As noted, the proposed transfer of operating authority to FENOC will not affect existir:g ownership of DBNPS 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 modification of existing License Condition 2.C(6) as follows (see the November 30, 1998 submittal):
FENOC shall comply with the antitrust conditions delineated in Condition 2.E of this license as if named therein.
FENOC shall not market or broker power or energy from the Davis-Besse Nuclear Power Station, Unit No. 1.
The owners are responsible and accountable for the actions of FENOC to the extent that said actions affect the marketing or brokering of power or energy from the Davis-Besse Nuclear Power Station, Unit No. 1, and in any way, contravene the antitrust license conditions contained in the license.
Further, page 9 of 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.
1 Since the owners will continue to be bound by the existing 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 FEN 0C with respect to the marketing or brokering of power or energy 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.
j
s-
_4_
3.3 Foreian Ownership and Control FENOC will be a wholly owned subsidiary of FE, as are the current owners and 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 Oualifications According to the application, the current plant organization, the oversight organizations, and the engineering and support organizations would be transferred essentially intact to FENOC. The technical qualifications of the FENOC organization, therefore, 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 DBNPS 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 DBNPS 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 DBNPS 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 DBNPS.
Based on the above, the staff finds that FENOC will be technically qualified to operate DBNPS.
3.5 Summary 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 TE and CEI as the owners of DBNPS 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 or energy 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 8,
'1998 (63 FR 47531).
_. ~.. -. -. _ -. -.
l
(.
e t
e' s
4-f
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 Comission pursuant thereto.
Principal Contributors:
A. McKeigney A. Hansen Date: December 1, 1998 1
I i
i i
l l
l 1
T
- Mr. John K. Wood
?
Vice President - Nuclear, Davis-Besse D*'**D*'
I' 1998 Centerior Service Company c/o Toledo Edison Company Davis-Besse Nuclear Power Station 5501 North State Route 2 Oak Harbor, OH 43449-9760
SUBJECT:
ORDER APPROVING THE TRANSFER OF OPERATING AUTHORITY TO A NEW OPERATING COMPANY - DAVIS-BESSE NUCLEAR POWER STATION, UNIT NO. 1 (TAC NO. MA2201)
Dear Mr. Wood:
The enclosed Order is in partial response to your application dated June 29, 1998, as supplemented by submittals dated July 14, October 26, and November 30, 1998, requesting approval of the transfer of operating authority under the license for the Davis-Besse Nuclear Power Station to a new operating company and issuance of a conforming amendment pursuant to Sections 50.80 and 50.90 of Title 10 of the Code of Federal Reaulations. The enclosed Order provides consent to the proposed transfer, subject to the conditions described therein. A conforming amendment to the license will be issued at the time the transfer is completed.
The Order has been forwarded to the Office of the Federal Register for publication.
Sincerely, Original signed by:
Allen G. Hansen, Project Manager Project Directorate III-2 Division of Reactor Projects III/IV Office of Nuclear Reactor Regulation Docket No. 50-346
Enclosures:
1.
Order 2.
Safety Evaluation cc w/encls:
See next page DISTRIBUTION:
Docket File PUBLIC BSheron GHill(2)
PD33 r/f OGC BBoger ACRS EGA1 SECY GGrant, RIII SCollins EDO
- See previous Concurrence Document Name:
G:\\DAVISBESTDBA2201.0RD, 0FFICE PM:PD32 E LA:PD32 E PD:PD32 MBC:PGEBl D:DRCH l NAME AHanserf%9EBarnhp PF SRichatHV TEssig
- LSpessard *
.SL.M 2L.2/L.!8.Cf.l./28.. 2).2/2 L. 22. E L OFFICE TECHED N OGC D:DRPW ADPR (A)D:NRR NAME RSanders*
SHom
- EAdensam
- BBoger
- RZimmerman(<k DATE 10/8/98 12/1/98 11/12/98 11/12/98 f.2 / / /98 0FFICIAL RECORD COPY 0]- $ \\
. ~. -.
earrog
]
..g UNITED STATES B
NUCLEAR REGULATORY COMMISSION a
j
,,,g,,,7ou,,,c,,,,,,,,,,
\\...../
December 1, 1998 Mr. John K. Wood Vice President - Nuclear, Davis-Besse Centerior Service Company c/o Toledo Edison Company Davis-Besse Nuclear Power Station 5501 North State Route 2 Oak Harbor, OH 43449-9760 l
SUBJECT:
ORDER APPROVING THE TRANSFER OF OPERATING AUTHORITY TO A NEW OPERATING COMPANY - DAVIS-BESSE NUCLEAR POWER STATION, UNIT NO. 1 (TAC NO. MA2201)
Dear Mr. Wood:
The enclosed Order is in partial response to your application dated June 29, 1998, as supplemented by submittals dated July 14, October 26, and November 30, 1998, requesting approval of the transfer of operating authority under the license for the Davis-Besse Nuclear Power Station to a new operating company and issuance of a conforming amendment pursuant to Sections 50.80 and 50.90 of Title 10 of the Code of Federal Reaulations. The enclosed Order provides consent to the proposed transfer, subject to the conditions described therein. A conforming amendment to the license will be issued at the time the transfer is completed.
The Order has been forwarded to the Office of the Federal Register for publication.
Sincerely, r
Allen G. Hansen, Project Manager Project Directorate III-2 Division of Reactor Projects III/IV Office of Nuclear Reactor Regulation j
Docket No. 50-346 l
l
Enclosures:
1.
Order l
2.
Safety Evaluation cc w/encls: See next page 1
1 4
a y
)
8 John K. Wood Davis-Besse Nuclear Power Station, Unit 1 i
Toledo Edison Company cc:
Mary E. O'Reilly Robert E. Owen, Chief 1
FirstEnergy Bureau of Radiological Health Davis-Besse Nuclear Power Station Service 5501 North State - Route 2 Ohio Department of Health Oak Hart >or, OH 43449-9760 P.O. Box 118 i
Columbus, OH 43266-0118 James L. Freels Manager-Regulatory Affairs Toledo Edison Company James R. Williams, Chief of Staff Davis-Besse Nuclear Power Station Ohio Emergency Management Agency 5501 North State - Route 2 2855 West Dublin Granville Road Oak Harbor, OH 43449-9760 Columbus, OH 43235-2206 Jay E. Silberg, Esq.
Donna Owens, Director Shaw, Pittman, Potts Ohio Department of Commerce end Trowbridge Division of Industrial Compliance 2300 N Street, NW.
Bureau of Operations & Maintenance Washington, DC 20037 6606 Tussing Road P.O. Box 4009 Regional Administrator Reynoldsburg, OH 43068-9009 U.S. Nuclear Regulatory Commission 801 Warrenville Road Ohio Environmental Protection Agency Lisle, IL 60523-4351 DERR-Compliance Unit ATTN: Zack A. Clayton Robert B. Borsum P.O. Box 1049 Babcock & Wilcox Columbus, OH 43266-0149 Nuclear Power Generation Division 1700 Rockville Pike, Suite 525 State of Ohio Rockville, MD 20852.
Public Utilities Commission i
180 East Broad Street i
Resident inspector Columbus, OH 43266-0573 U.S. Nuclear Regulatory Commission 5503 North State Route 2 Attomey General Oak Hart >or, OH 43449 Department of Attomey 30 East Broad Street James H. Lash, Plant Manager Columbus, OH 43216 Toledo Edison Company i
Davis-Besse Nuclear Power Station President, Board of County i
5501 North State Route 2 Commissioners of Ottawa County Oak Harbor, OH 43449-9760 Por* Clinton, OH 43252 j
4 l
~.
. ~
i
'~
s 7590-01-P' f
i UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION i
I In the Matter of
)
)
TOLEDO EDISON COMPANY
)
Docket No. 50-346 i
i
)
CENTERIOR SERVICE COMPANY
)
)
THE CLEVELAND ELECTRIC ILLUMINATING
)
j COMPANY
)
)
i (Davis-Besse Nuclear Power Station,
)
Unit No. 1)
)
ORDER APPROVING APPLICATION REGARDING THE TRANSFER OF OPERATING AUTHORITY I.
Toledo Edison Company and The Cleveland Electric Illuminating Company are the owners of the Davis-Besse Nuclear Power Station, Unit No.1, located in Ottawa County, Ohio. The owners, together with Centerior Service Company,.
are the licensees that hold Facility Operating License No. NPF-3 issued by the U.S. Nuclear Regulatory Commission (NRC) pursuant to Part 50 of Title 10 of the Code of Federal Reaulations (10 CFR Part 50) on April 22, 1977. Under this license, Centerior Service Company and Toledo Edison Company act as agents for The Cleveland Electric Illuminating Company, and have exclusive responsibility for and control over the physical construction, operation, and maintent.nce of Davis-Besse.
j II.
By application dated June 29, 1998, as supplemented by submittals dated duly 14, October 26,andNovember 30, 1998, the licensees requested approval
. _ +
y w
-m ele e
n4r M
n
. - _ _ ~
~_
i i
1 4 ~
of the transfer of operating authority under the license to a new company, FirstEnergy Nuclear Operating Company (FENOC), and issuance of a conforming amendment. The licensees proposed to transfer operating authority under the license to FENOC to allow it to use and operate Davis-Besse and to possess and use related licensed nuclear materials in accordance with the same conditions and authorizations in the current operating license. The licensees have also requested the issuance of a license amendment reflecting the transfer of operating authority.
FENOC, a wholly-owned subsidiary of FirstEnergy Corporation, the parent of the owners, would become the licensed operator for Davis-Besse and would have exclusive control over the operation and i
maintenance of the facility.
The present plant organization, the oversight j
organizations, and the engineering and support organizations would be transferred essentially intact from the operating licensees to FENOC.
The technical qualifications of the FENOC organization, therefore, would be at least equivalent to those of the existing organization responsible for operating the plant.
Centerior Service Company would be removed from the license.
Under the proposed arrangement, ownership of Davis-Besse would remain unchanged, with each owner retaining its current ownership interest.
FENOC would not own any portion of Davis-Besse.
Likewise, the owners' entitlement to capacity and energy from Davis-Besse would not be affected by the proposed transfer of operating responsibility for Davis-Besse to FENOC. The owners would continue to provide all funds for operation, maintenance, and decommissioning of Davis-Besse by FENOC.
The owners' responsibility would include providing funding for any emergency situations that might.arise at Davis-Besse.
9 The licensees requested the Comission's approval of the transfer of operating authority to FENOC and issuance of a conforming license amendment pursuant to 10 CFR 50.80 and 50.90. Notice of this application for approval and an opportunity for a hearing was published in the FEDERAL REGISTER on August 4,1998 (63 FR 41602), and an Environmental Assessment and Finding of No Significant Impact was publish.ed in the FEDERAL REGISTER on September 8, 1998 (63 FR 47531).
Under 10 CFR 50.80, no license, or any right thereunder, shall be transferred, directly or indirectly, through transfer of control of the license, unless the Comission shall give its consent in writing.
Upon review of the information contained in the submittals of June 29, July 14, October 26, and November 30, 1998, and other information before the Comission, the NRC staff has determined that FENOC is qualified to hold the license to the extent and for the purposes described above, and that the transfer of the license as described above is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Comission, subject to the conditions set forth below.
These findings are supported by a Safety Evaluation dated December 1,1998.
III.
Accordingly, pursuant to Sections 105, 161b, 1611, and 184 of the Atomic Energy Act of 1954, as amended, 42 USC f 5 2135, 2201(b), 2201(1), and 2234, and 10 CFR 50.80, IT IS HEREBY ORDERED that the Comission consents to the transfer of the license as described herein to FENOC, subject to the following conditions:
2
, (1) FENOC shall not market or broker power or energy from the Davis-Besse Nuclear Power Station, Unit No.1.
The owners are responsible and accountable for the actions of FENOC to the extent that said actions affect the marketing or brokering of power or energy from the Davis-Besse Nuclear Power Station, Unit No.1, and, in any way, contravene the antitrust license conditions contained in the license.
(2) Should the formation of FENOC and transfer of ope"ating authority not be completed by December 31, 1999, this Order shall become null and void, provided, however, on application and for good cause shown, such date may be extended.
This Order is effective upon issuance.
Action on the proposed conforming license amendment will be taken upon implementation of the transfer approved by this Order.
For further details with respect to this Order, see the licensees' application dated June 29, 1998, as supplemented by submittals dated July 14, October 26, and November 30, 1998, which are available for public inspection at the Commission's Public Document Room, The Gelman Building, 2120 L Street, NW., Washington, DC, and at the local public document room located at the University of Toledo, William Carlson Library, Government Documents Collection, 2801 West Ea' croft Avenue, Toledo, OH 43606.
Dated at Rockville, Maryland, this istday of December,1998.
FOR THE NUCLEAR REGULATORY COMMISSION
,4 o
. Zi er an, Acting Director fice of clear Reactor Regulation e
-9 (1) FENOC shall not market or broker power or energy from the Davis-y Besse Nuclear Pcwer Station, Unit No.1.
The owners are responsible.
o and accountable for the actions of FENOC to the extent that said actions affect the marketing or brokering of power or energy from the Davis-Besse Nuclear Power Station, Unit No.1, and, in any way, contravene the antitrust license conditions contained in the license.
(2) Should the formation of FENOC and transfer of operating authority not be completed by December 31, 1999, this Order shall become null and void, provided, however, on application and for good cause shown, such date may be extended.
This Order is effective upon issuance.
Action on the proposed conforming license amendment will be taken upon implementation of the transfer approved by this Order.
For further details with respect to this Order, see the licensees' application dated June 29, 1998, as supplemented by submittals dated July 14, October 26, and November 30, 1998, which are available for public inspection at the Commission's Public Document Room, The Gelman Building, 2120 L Street, NW., Washington, DC, and at the local public document room located at the University of Toledo, William Carbon Library, Government Documents Collection, 2801 West Bancroft tu Toledo, OH 43606.
Dated at Rockville, Maryland, this 1st ay of December,1998.
d FOR THE NUCLEAR REGULATORY COMMISSION Original signed by:
Roy P. Zimmerman, Acting Director Office of Nuclear Reactor Regulation
- See previous Concurrence Document Name: G:\\DAVISBESiDBA2201.0RD OFFICE PM:PD32 E LA:PD32 E PD:PD32 6 BC:PGEB D:DRCH l q
NAME AHanserM EBarntpff SRicharag0 TEssig
- LSpessard
- DATE 37_/ i /9T
@/\\ (98 4 /\\ /93 11/6/98 11/10/98 0FFICE TECHED N OGC D:DRPW ADPR (A)D:NRR
, v NAME RSanders* SHom
- EAdensam
- BBoger
- RZimmerman b T DATE 10/8/98 12/1/98 11/12/98 11/12/98 O /l/98 0FFICIAL RECORD COPY
1h UNITED STATES
)
j NUCLEAR REGULATORY COMMISSION
)
WASM'NGTON, D.C. enana m
\\,,,/
SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION PROPOSED TRANSFER OF OPERATING AUTHORITY TO FENOC FACILITY OPERATING LICENSE NO. NPF-3 CLEVELAND ELECTRIC ILLUMINATING COMPANY TOLEDO EDISON COMPANY AND
~
CENTERIOR SERVICE COMPANY DOCKET NO. 50-346 DAVIS-BESSE NUCLEAR POWER STATION. UNIT NO. 1
1.0 INTRODUCTION
By application dated June 29,.1998, as supplemented by submittals dated July 14, October 26, and November 30, 1998, Toledo Edison Company (TE) and Centerior Service Company (CSC), as the current licensed operators of the Davis-Besse Nuclear Power Station: Unit No.1 (DBNPS), and on behalf of TE and Cleveland Electric Illuminating Company (CEI) as the owners of DBNPS, requested approval of the transfer of operating authority and a conforming amendment for the Davis-Besse Facility Operating License No. NPF-3, currently held by TE, CSC, and CEI, which are wholly owned 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 the DBNPS facility.
Currently, TE and CSC have that responsibility under the license. The DBNPS facility is a single-unit nuclear power station located in Ohio.
l 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 j
facility will not be affected by the proposed transfer of operating authority from CSC and TE to FENOC.
Each owner will retain its current ownership interest (CEI owns 51.38 percent and TE owns the remaining 48.62 percent), and FENOC will not own any portion of DBNPS Also, the owners' entitlement to capacity and energy from DBNPS will not be affected by the proposed transfer of operating responsibility.
A similar application to this one for DBNPS has been submitted separately to the NRC to transfer operating authority for the Perry Nuclear Power Plant to FENOC. The Perry plant is also located in Ohio, and various subsidiaries of FE own a majority interest in this facility.
2.0 BACKGROUND
TE and CEI as the owners of DBNPS will enter into an operating agreement with FENOC, which is an Ohio corporation that is a wholly owned subsidiary of FE.
Pages 3 and 4 of the application state that FENOC's sole corporate purpose will be the operation of FE's nuclear power plants on behalf of, and for the benefit of, their owners. The new operating agreement will specify the relationship between TE and CEI as facility owners and FENOC as the sole l
operator of DBNPS. This agreement will define the rights, responsibilities, and limitations of FEN 0C's authority regarding the operation of the facility and will state that FENOC has the sole authority, as the operator of DBNPS, to 1
make all decisions within the scope of the operating license relating to j
public health and safety.
The application also states that TE and CEI will continue to provide all funds for the operation, maintenance, and decommissioning of DBNPS, including funding for any emergency situations that might arise at the facility.
Upon the effective date of the transfer, substantially all employees of TE and CSC who are presently dedicated to operation of DBNPS will become employees of FENOC.
3.0 EVALUATION This NRC staff review of the proposed transfer of operating authority under the DBNPS facility operating license covers the following areas:
financial qualifications, antitrust considerations, foreign ownership and control considerations, and technical qualifications.
Each of these areas is evaluated below.
1 3.1 Financial Oualifications The proposed transfer of operating authority will not adversely impact the ability of the DBNPS owners to obtain or provide the funds necessary to cover the costs of the operation, maintenance, repair, decontamination, and decommissioning of DBNPS. 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 on pages 8 and 9 of the application regarding key interrelationships that the operating agreement between the facility owners and FENOC will establish:
FENOC will not have any ownership interest in DBNPS 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.
The owners will retain their current authority to review and approve budgets o' DBNPS. This will not encumber FEN 0C's ability to make operational safety decisions and will not impact the safe operation of DBNPS.
4 4 '
All costs of DBNPS, incurred or accrued, are liabilities of the facility owners when incurred or accrued and are borne in proportion to their respective undivided interests in DBNPS, 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 DBNPS 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 I
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 DBNPS.
3.2 Antitrust Considerations As noted, the proposed transfer of operating authority to FENOC will not affect existing ownership of DBNPS or current entitlement to its capacity and i
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 modification of existing License Condition 2.C(6) as follows (see the November 30, 1998 submittal):
FENOC shall comply with the antitrust conditions delineated in Condition 2.E of this license as if named therein.
FENOC shall not market or broker power or energy from the Davis-Besse Nuclear Power Station, Unit No. 1.
The owners are responsible and accountable for the actions of FEN 0C to the extent that said actions affect the marketing or brokering of power or energy from the Davis-Besse Nuclear Power Station, Unit No. 1, and in any way, contravene the antitrust license conditions contained in the license.
Further, page 9 of the application acknowledges that the transfer will not alter the existing antitrust license conditions applicable to the owners and j
that those conditions will remain applicable to all owners.
Since the owners will continue to be bound by the existing 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 or energy 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.
a o
.a s
3.3 Foreian Ownershio and Control FENOC will be a wholly owned subsidiary of FE, as are the current owners and 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 Oualifications According to the application, the current plant organization, the oversight organizations, and the engineering and support organizations would be transferred essentially intact to FENOC.
The technical qualifications of the FENOC organization, therefore, 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 DBNPS 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 DBNPS 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 DBNPS 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 DBNPS.
Based on the above, the staff finds that FENOC will be technically qualified i
to operate DdNPS.
3.5 Summary 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 TE and CEI as the owners of DBNPS with respect to its operation and decommissioning. Also, there do not appear to be any problematic antitrust or foreign ownership considerations that would rasult from the proposed action, provided certain conditions, discusser. earlier, are imposed with respect to the marketing or brokering of power or energy 1:y 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 8, 1998 (63 FR 47531).
i
O f
4
[
^ !
5.0 CONCLUSION
In consideration of the foregoing, and with the conditions described above, I
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 l
Commission pursuant thereto.
l Principal Contributors:
A. McKeigney A. Hansen i
Date: December 1, 1998 j
r i
p