ML20196K583
| ML20196K583 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 03/26/1999 |
| From: | Terry C TEXAS UTILITIES ELECTRIC CO. (TU ELECTRIC) |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| References | |
| TXX-99080, NUDOCS 9904020139 | |
| Download: ML20196K583 (37) | |
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Log # TXX-99080 File # 10010 892 R*# '*C 5 ** 5(')
1UELECTRIC
. c. L wery senior vic, pre,u,,
March 26,- 1999
& PrincipalNuclear Officer U. S. Nuclear Regulatory Commission Attn: Document Control Desk Washington, DC 20555
SUBJECT:
COMANCHE PEAK STEAM ELECTRIC STATION (CPSES)
DOCKET NOS. 50-445 AND 50-446 DECOMMISSIONING REPORT Gentlemen:
Attached is the biennial decommissioning Report for Comanche Peak Units 1 and 2, prepared and submitted pursuant to 10CFR50.75(f). TU Electric is fully rate regulated by the Public Utility Commission of Texas. The recovery of decommissioning funds
/
for the eventual decommissioning of Comanche Peak Units 1 and 2 is fu'ly assured
}/
through current regulation and resulting contribution of funds into an external trust.
'f The amounts to be collected for Comanche Peak decommissioning are based on a site specific decommissioning study that includes contracting vendors for recycling and compacting waste. This study reflects an overall higher decommissioning cost for the combined Comanche Peak Units than the estimates required by 10CFR50.75.
Differences between the study as compared to the 10CFR50.75 estimate include:
- Inclusion of non-radiological structures into our site specific study, f
- Inclusion of spent fuel storage until transfer to DOE is complete, and
- Common buildings / equipment for both units are decommissioned with Unit 2.
When projected to the license expiration date for each unit using the assumptions in the attached report, the projected Nuclear Decommissioning Trust balance is greater than the escalated NRC minimum cost of decommissioning, confirming compliance with the financial assurance requirements of 10CFR50.75.
Should you have any questions regarding the status of decommissioning for Comanche Peak Units 1 and 2, please contact Mr. J. D. Seawright at (254) 897-0140.
l l
t ADOCK05000445(L-9904020139 990326 PDR I
PDR L; G10037 COMANCllE PEAK SILAM ELECTRIC STATION P.O. Ilox 1002 Glen Rose Texas 76N31002 b
)
m i
. Pace 2 of 2 l
This communication contains no new licensing basis commitments regarding CPSES Units 1 and 2.
Sincerely,.
j
-)
C. L. Terry JDS/gp]
Attachment c-Mr. E. W. Merschoff, Region IV-Mr. T. J. Polich, NRR Mr. J. l. Tapia, Region IV Resident inspectors, CPSES l
i f
l I
l L
p 1
Attachment to VXX-99080 l
Page 9 of 1 l
NRC Decommissioning Funding Status Report December 31,1998 1
Texas Utilities Electric Company Comanche Peak Steam Electric Station (CPSES)
Information is submitted to nrovide Financial Assurance Unit # 1 Unit # 2
- 1. The minimum amount of decommissioning funds estimated to be required pursuant to 10 CFR 50.75 (b) and (c).
At December 31,1998
$ 283.6 million
$ 283.6 million
- 2. The amount accumulated at the end of the calendar year j
preceding the date of the report for items included in 10 CFR 50.75 (b) and (c).
Market Value at December 31,1998
$ 117.5 million 5 93.9 million
- 3. A schedule of the annual amounts remaining to be collected for items in 10 CFR 50.75 (b) and (ch Unit # 1 Unit # 2 Years 1999 through 2029 (31 years) 7.1 million
$ 11.1 million Year 2030 1.2 million 11.1 million Year 2031 11.1 million Year 2032 1.9 million Total 5 220.5 million
$ 368.3 million Dased on the collection rate authorized in PUC of Texas Final Order dated 1/28/94, through the license expiration date.
- 4. The assumptions used regarding escalation in decommissioning cost, rates of earnings on decommissioning funds, and rates of other factors used in funding projections.
Estimated Escalation rate for decommissioning costs 4.80 %
4.80 %
Estimated Earnings rates on decommissioning funds Net Investment Return -- 1999 to 2026 6.80 %
6.80 %
Net Investment Return - 2027 forward 5.80 %
5.80 %
Rates of other factors used in funding projections None None i
- 5. Any power sale contracts upon which licensee is relying to certifying financial assurance.
- 6. Modifications to licensee's method ofproviding financial assurance since previous report.
- 7. Material changes to trust agreement.
None None The Agreement and unendments are enclosed for information.
NUCLEAR DECOMMISSIONING TRUST AGREEMENT THIS NUCLEAR DECOMMISSIONING TRUST AGREEMENT, dated as of the
/0 day of
'U/
1990, between TEXAS UTILITIES U
ELECTRIC COMPANY, a corporation duly organized and existing under the laws of the State of Texas, having its principal office at 2001 Bryan Tower, Dallas, Texas 75201 (the " Company"), and MELLON BANK, N.A.,
as Trustee, having its principal office at one Mellon Bank Center, Pittsburgh, Pennsylvania 15258 (the " Trustee");
W I T N E S S E T H:
WHEREAS, the Company is operating or constructing and owns two nuclear generating units known as Comanche Peak I and Comanche Peak II (the " Units"); and WHEREAS, the Company desires to establish pursuant to this Agreement four trusts under a single trust agreement, two of which qualify as Nuclear Decommissioning Reserve Funds under Section 468A of the Internal Revenue Code of
- 1986, as
- amended, and the regulations promulgated thereunder
("Section 468A"),
or any corresponding section or sections of any future United States internal revenue statute (the
" Code")
and the regulations thereunder (the " Qualified Funds") with one Qualified Fund relating to each Unit, and two of which do not so qualify (the "Nonqualified Funds")
with one Nonqualified Fund relating to each Unit; (collectively, the " Funds") ;
WHEREAS, the execution and delivery of this Agreement have been duly authorized by each of the Company and the Trustee and all l
things necessary to make this Agreement a valid and binding agreement by each of the Company and the Trustee have been done.
NOW, THEREFORE, this Agreement evidences that, in order for the creation of the Funds and the making of payments therefrom and the performance of the covenants of the company and the Trustee set forth herein, the Company does hereby sell, assign, transfer, set over and pledge unto the Trustee, and to its successors in the trust and its assigns, all of the Company's right, title and interest in and to any and all cash and property herewith and hereafter contributed to the Funds, subject to the provisions of Article V hereof and Section 4 of the Special Terms of the Qualified Nuclear Decommissioning Reserve Funds, attached hereto as Exhibit A (the "Special Terms") and to have and to hold the same in trust for the exclusive purpose of providing funds for the decommissioning of the Units in order to satisfy the Company's liability in connection therewith, to pay the administrative costs and other incidental expenses of the Funds, and to make certain investments, all as hereinafter provided.
ARTICLE I.
Purposes of the Funds; Contributions Section 1.01.
Establishment of the Funds.
The Funds shall be maintained separately at all times in the United States as the Nonqualified Funds and the Qualified Funds pursuant to this Agreement, each as a trust under applicable state law.
The Company intends that the Qualified Frnds shall qualify as Nuclear Decommissioning Reserve Funds under Section 468A of the Code.
Section 1.02.
Purcoses of the Funds.
The Funds are established for the exclusive purpose of providing funds for the decommissioning of the Units and to constitute Qualified and Nonqualified nuclear decommissioning reserve funds and to comply with any applicable orders or requirements of the Texas Public Utility Commission (the "PUC")
and the United States Nuclear i
2
l Regulatory Commission (the "NRC").
The Nonqualified Funds shall accumulate all contributions (whether from the Company or others) which do not satisfy the requirements for contributions to the Qualified Funds pursuant to Section 2 of the Special Terms.
The Qualified Funds shall accumulate all contributions which satisfy the requirements of Section 2 of the Special Terms.
The Qualified Funds shall also be governed by the provisions of the Special Terms, which provisions shall take precedence over any provisions of this Agreement construed to be in conflict therewith.
None of the assets of the Funds shall be subject to attachment, garnishment, execution or levy in any manner for the benefit of creditors of the Company, except to the extent a Certificate of Disbursement, substantially in the form attached as Exhibit B, has been signed by the Company wich respect to such assets of the
- Funds, Section 1.03.
Contributions to the Funds.
The assets of the Funds shall be contributed by the Company from time to time.
The Company shall designate into which of the Qualified Funds or Nonqualified Funds the assets shall be contributed.
The Company shall have sole discretion as to whether cash payments are allocated to the Qualified Funds or the Nonqualified Funds.
Contributions of property other than cash shall be allocated to the Nonqualified Funds.
ARTICLE II.
Payments by the Trustee i
Section 2.01.
Limitation on Use of Assets.
The assets of I
each Fund shall be used exclusively (a) to satisfy, in whole or in part, any expenses or liabilities incurred by or on behalf of the i
Company with respect to the decommissioning of the Unit to which each Fund relates, including expenses incurred in connection with the preparation for decommissioning, such as engineering and other planning expenses, and all expenses incurred after the actual decommissioning occurs, such as physical security and radiation monitoring expenses (the " Decommissioning Costs"), (b) to pay the administrative costs and other incidental expenses of each Fund separately from the assets of such Fund, and (c) to invest in securities and investments as directed by the investment manager (s) pursuant to Section 3.02(a) or the Trustee pursuant to Section 3.02(b), except that all assets of the Qualified Funds must be invested in Permissible Assets as defined in the Special Terms.
Use of the assets of the Qual.ified Funds shall be further limited by the provisions of the Sp..cial Terms.
Section 2.02.
Certification for Decommission'ina Costs.
If assets of a Fund are required to satisfy Decommissioning Costs, the Company shall present a certificate substantially in the form attached hereto as Exhibit B to the Trustee signed by its Chairman i
of the Board, its President or one of its Vice Presidents and its 3
r Treasurer or an Assistant Treasurer, requesting payment from the Funds.
The Trustee shall retain at least one counterpart of all copies of such certificates (including attachments) and related documents received by it puracant to this Article II.
The Company shall have the right to enforce payments from the Funds upon compliance with the procedures set forth in this Section
)
2.02.
Section 2.03.
Administrative Costs.
The Trustee shall pay, or reimburse the Company for, as directed by the Company, the administrative costs and other incidental expenses of the Nonqualified Funds, including all federal, state, and local taxes, if any, imposed on or with respect to the Nonqualified Funds, legal
- expenses, accounting expenses, actuarial expenses and trustee expenses, from the assets of the Nonqualified Funds and shall pay, as directed by the Company, the administrative costs and other incidental expenses of the Qualified Funds as defined in the Special Terms, from the assets of the Qualified Funds.
Section 2.04.
Payments between the Funds.
The Trustee shall make payments between Qualified Funds or between Nonqualified Funds provided such payments are in accordance with applicable provisions contained herein and are pursuant to written instructions from the Company or (i) from a Qualified Fund to a Nonqualified Fund provided such payments are in accordance with Section 4 of the Special Terms or (ii) from a Nonqualified Fund to a Qualified Fund provided such payments are in cash and are in accordance with the contribution limitations set forth in Section 2 of the Special Terms, as the case may be, upon presentation by the Company of a certificate substantially in the form of Exhibit C hereto executed by the company instructing the Trustee to make any such payments.
The Trustee shall be fully protected in relying upon such certificate.
ARTICLE III.
Concernip_g the Trustee Section 3.01.
Authority of Trustee.
The Trustee hereby accepts the trusts created under this Agreement.
The Trustee shall have the authority and discretion to manage and control the Funds to the extent provided in this Agreement but does not guarantee the Funds in any manner against investment loss or depreciation in asset value or guarantee the adequacy of the Funds to satisfy the l
Decommissioning Costs.
The Trustee shall not be liable for the making, retention or sale of any asset of the Qualified Funds which qualifies as a Permissible Asset, as defined in the Special Terms, nor shall the Trustee be responsible for any other loss to or diminution of the Funds, or for any other loss or damage which may 4
l l
result from the discharge of its duties hereunder, except if such loss or diminution is the result of the Trustee's failure to perform its responsibilities hereunder in the same manner as would a prudent man, acting in a like capacity and familiar with such matters, in the conduct of an enterprise of a similar nature.
Section 3.02.
Investment of Funds.
(a) The Company shall have the authority to appoint one or more investment managers (which may include the Company) who shall have the power to direct the Trustee in investing the assets of the Funds.
Notwithstanding the appointment of an investment manager to direct the investment of the Funds or any other provision herein, the Trustee, through its computerized monitoring system and otherwise, shall review all investment instructions from the investment manager and shall carry out only those investment instructions which would not cause a violation of Section 468A of the Code (or any successor provision) or the regulations promulgated thereunder.
To the extent that the Company chooses to exercise this authority, it shall so notify the Trustee and instruct the Trustee in writing to separate into a separate account those assets the investment of which will be directed by each investment manager.
The Company shall designate in writing the person or persons who are to represent any such investment manager in dealings with the Trustee.
Upon the separation of the assets in accordance with the Company's instructions, the Trustee, as to those assets while so separated, shall be released and relieved of all investment duties, investment responsibilities and investment liabilities normally or statutorily incident to a trustee; provided, however, that the Trustee shall not be relieved of the responsibility of ensuring that assets of the Qualified Funds are invested solely in Permissible Assets, as defined in the Special Terms.
The Trustee shall retain all other fiduciary duties with respect to assets the investment of which is directed by investment managers.
(b)
To the extent that the investment of assets of the Funds is not being directed by one or more investment managers under Section 3.02(a), the Trustee shall hold, invest, and reinvest the funds delivered to it hereunder as it in its sole discretion deems advisable, subject to all of its obligations and liabilities set forth in this Agreement and to the restrictions set forth herein for investment of the assets of the Qualified Funds.
(c)
Regardless of the person directing investments, any assets of the Qualified Funds shall be invested solely in Permissible Assets as defined in, and required by, the Special Terms, and shall be accumulated, invested, and reinvested in like manner. Upon the written consent of the Company, the assets of the Qualified Funds and the Nonqualified Funds may be pooled for the purpose of investing the assets with each other, with the assets of other Nuclear DecommissioM ng Reserve Funds under Section 468A of the Code established by the Company, and with the assets of any other nuclear decommissioning funds established by the Company, provided the following conditions are satisfied:
(i) the trustee 5
f of each nuclear decommissioning fund must separately account for the contributions, earnings, expenses, and distributions of such fund; (ii) the earnings and expenses must be reasonably apportioned among such nuclear decommissioning funds; (iii) if assets of a Nuclear Decommissioning Reserve Fund under Section 468A of the Code are pooled with assets of any other nuclear decommissioning fund, all such pooled assets must be invested solely in Permissible Assets as defined in the Special Terms; and (iv) the books and t
records of such funds must enable the Internal Revenue Service to verify that the requirements of Section 468A of the Code and the i
regulations thereunder are satisfied.
Section 3.03.
Prohibition Acainst Self-Dealina.
Notwithstanding any other provisions in this Agreement, the parties i
to this Agreement shall not engage in any act of self-dealing ac defined in Section 468(e) (5) of the Code, and Treas. Reg. 51.468A-5(b) or any corresponding future Treasury Regulation.
Section 3.04.
Comnensation.
The Trustee shall be entitled to receive out of the Funds reasonable compensation for services rendered by it, as well as expenses necessarily incurred by it in the execution of the trust hereunder, provided such compensation I
and expenses qualify as administrative costs and other incidental expenses of the Qualified Funds, as defined in the Special Terms, with respect to any payment of compensation and expenses from the Qualified Funds.
Section 3.05.
Books of Account.
The Trustee shall keep separate true and correct books of account with respect to each of the Funds, which books of account shall at all reasonable times be open to inspection by the Company or its duly appointed representatives.
The Trustee shall, upon written request of the
- Company, permit government agencies, such as the PUC or the Internal Revenue Service, to inspect the books of account of the Funds.
The Trustee shall furnish to the Company by the tenth business day of each month a statement for each Fund showing, with respect to the preceding calendar mon'h, the balance of assets on c
hand at the beginning of such month, all receipts, investment transactions, and disbursements which took place during such month and the balance of assets on hand at the end of such month.
All records ar:d accounts maintained by the Trustee with respect to the Funds shall be preserved for such period as may be required under any applicable law.
Upon the expiration of any such required retention period, the Trustee shall have the right to destroy such records and accounts after first notifying the Company in writing of its intention and transferring to the Company any records and accounts requested by the Company.
Section 3.06.
Tax Returns and Other Reports.
The Trustee shall prepare and timely file all Federal, state and local income or franchise tax returns or other reports (including estimated tax returns and information returns) as may be required from time to time with respect to the Funds, and the company agrees to provide 6
r the Trustee in a timely manner with any information within its possession, and to cause any investment manager (s) appointed by the Company to provide the Trustee with any information in its possession, which is necessary to such filings.
The Trustee shall prepare and submit to tne Company in a
timely manner all information requested by the Company regarding the Funds required to be included in the Company's Federal, state and local income tax returns or any other reports to governmental authorities (including estimated tax returns and information returns).
The Trustee may employ independent certified public accountants or other tax counsel to prepare or review such returns and reports.
The Trustee agrees to sign any tax returns or other reports where required by law to do so or arising out of the Trustee's responsibilities hereunder, and to remit from the trusts appropriate payments or deposits of Federal, state and local income or franchise taxes directly to the taxing agencies or authorized depositories in a timely manner.
Notwithstanding any provision in this Agreement seemingly to the contrary, any interest or penalty charges assessed against the Funds pursuant to Chapters 67 or 68 of the Code, or pursuant to any similar state or local tax provisions, as a result i
of the Trustee's failure to comply with this Section 3.06 shall be borne by the Trustee and not the Funds.
The Trustee agrees to notify the Company in writing within ten (10) days of receiving notice of the commencement of any audit of any Fund's Federal, state or local tax returns or any other audit of the Funds by any governmental authority, and to participate with the Company on behalf of the Funds in such audits and related inquiries.
The Trustee further agrees to provide the Company with any additional information in its possession regarding the Funds which may be requested by the Company to be furnished in an audit of the Company's Federal, state or local tax returns.
Section 3.07.
Reliance on Documents.
The Trustee, upon receipt of r'ncuments furnished to it by the Company pursuant to the provisions
.f this Agreement, shall examine the same to determine whether th conform to the requirements thereof.
The Trustee acting in ood faith may conclusively rely, as to the truth of w
statements and the correctness of opinions expressed in any certificate or other documents conforming to the requirements of this Agreeme'it.
If the Trustee in the administration of the Funds, shall deem it necessary or desirable that a matter be provided or established prior to taking or suffering any action hereunder, such matter (unless evidence in respect thereof is otherwise specifically prescribed hereunder) may be deemed by the Trustee to be conclusively provided or established by a certificate signed by the Chairman of the Board, the President or any Vice President of the Company and delivered to the Trustee.
The Trustee shall have no duty to inquire into the validity, accuracy or relevancy of any statement contained in any certificate or document nor the authorization of any party making such certificate or delivering such document and the Trustee may rely and shall be protected in acting or refraining from acting upon any such written certificate 7
l 4
l or document furnished to it hereunder and believed by it to be genuine and to have been signed a presented by the proper party or parties.
The Trustee shall not, however, be relieved of any obligation to refrain from self-dealing as provided in Section 3.03 hereof or from ensuring that all assets of the Qualified Funds are invested solely in Permissible Assets as defined in the Special Terms.
Section 3.08.
Liability and Indemnification.
The Trustee shall not be liable for any action taken by it in good faith and without negligence and believed by it to be authorized or within the rights or powers conferred upon it by this Agreement and may consult with counsel of its own choice (including counsel for the Company) and shall have full and complete authorization and protection for any action taken or suffered by it hereunder in good faith and without negligence and in accordance with the opinion of such counsel, provided, however, that the Trustee shall be liable for any consequences resulting from investing assets of the Qualified Funds in other than Permissible Assets or from self-dealing as provided in Section 3.03 hereof.
Provided indemnification does not result in self-<lealing under Sectica 3.03 hereof or in a deemed contribution to the Qualified Funds in excess of the limitation on contributions under Section 468A of the Code and the regulations thereunder, the Company hereby agrees to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence on the part of the Trustee, arising out of or in connection with its entering into this Agreement and carrying out its duties hereunder, including the costs and expenses of defending itself against any claim cf liability in the premises, provided such loss, liability or expense does not result from investing assets of the Qualified Funds in other than Permissible Assets as defined in the Special Terms or from self-dealing under Section 3.03 hereof, and provided further, that no such costs or expenses shall be paid if the payment of such costs or expenses is prohibited by Section 468A of tSe Code or the regulations thereunder.
Section 3.09.
Resianation and Removal of Trustee.
The Trustee may resign at any time upon sixty (60) days written notification to the Company.
The Company may remove the Trustee for any reason at any time upon thirty (30) days written notification to the Trustee.
If a successor Trustee shall not have been appointed within the above time limits, the Trcstee or Company may apply to any court of competent jurisdiction to appoint a successor Trustee to act until such time, if any, as a successor shall have been appointed and shall have accepted its appointment as provided below.
If the Trustee shall be adjudged bankrupt or insolvent, a vacancy shall thereupon be deemed to exist in the office of Trustee and a successor shall thereupon be appointed by the Company.
Any cuccessor Trustee appointed hereunder shall l
cxecute, acknow. ledge and deliver to the company an appropriate written instrument accepting such appointment hereunder, subject to all the terms anci conditions hereof, and thereupon such successor 8
i Trustee shall become fully vested with all the rights, powers,
- trusts, duties and obligations of its predecessor in trust hereunder, with like effect as if originally named as Trustee hereunder.
The predecessor Trustee shall upon written request of the Company, and payment of all ans and expenses, deliver to the successor Trustee the corpus of the Funds and perform such other acts as may be required or be desirable to vest and confirm in said successor Trustee all right, title and interest in tne corpus of the Fund to which it succeeds.
Section 3.10.
Mercer of Trustee.
Any corporation into which the Trustee may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Trustee shall be a party, or any corporation to "'. :.1 the corporate trust functions of the Trustee may be transferrea, shall be the successor Trustee under this Agreement without the necessity of executing or filing any additional acceptance of this Agreement or the performance of any further act on the part of any other parties hereto.
7 ARTICLE IV.
Amendments The Company may amend, consistent with the purposes of the Funds, this Agreement from time to time, provided such amendment does not cause the Qualified Funds to fail to qualify as a Nuclear Decommissioning Reservu Fund under Section 468A of the Code and the regulations thereunder.
Each Qualified Fund was established and shall be maintained for the purpose of qualifying as a Nuclear Decommissioning Reserve Fund under Section 468A of the Code and the regulations thereunder.
If a Queltfied Fund would fail to so i
qualify because of any provisica contained in this Agreement, this Agreement shall be deemed to be amended as necessary to conform with the requirements of Section 468A and the regulations thereunder.
If a
proposed amendment shall affect the responsibility of the
- Trustee, such amendment shall not be considered valid and binding until such time as the amendment is executed by the Trustee.
If so requested by the NRC, the Company will provide to the NRC copies of any amendments to this Agreement.
ARTICLE V.
Termination A Qualified Fund shall terminate upon the earlier of either (i) substantial completion of decommissioning of the Unit, as defined in the Special Terms, to which such Qualified Fund relates, or (ii) disqualificaticn of the Qualified Fund by the Internal Revenue Service as provided in Treas. Reg. fl.468A-5(c) or any corresponding future Treasury Regulation, or (iii) the effective date of a resolution adopted by the Board of Directors of the Company terminating the Qualified Fund provided, however, that such 9
f effective date shall be no earlier than the date of approval by the NRC, if applicable; or (iv) twenty-one (21) years after the last survivor of (x) each person who was an offJcgr of the Company or of the Company's affiliated companies on Ju4th /#
(y) each of their descendants born on or pri4cr to Jtd. 1990, and
& /#
1990; or (v) to the extent required under Sectioh 468A of the Cc de or any regulation promulgated thereunder, upon the Company's sale or other disposition of all or a portion of the Unit to which such Qualified Fund relates.
A Nonqualified Fund shall terminate upon the earlier of (i) the effective date of a resolution adopted by the Board of Directors of the Company terminating the Nonqualified Funds provided, however, that such effective date shall be no earlier than the date of approval of the NRC, if applicable; or (ii) twenty-one (21) years after the last survivor of (x) each person who was an officer of the Company or of the Company's affiliated companies on
.7 u 4 9- / B 19 0,' and (y) ecch of their descendants born on or prior to
.,/ i + / 6 1990.
Upon termination of any Fund, the assets of the ~ferminated Fund shall be distributed to the company or transferred to another financial assurance mechanism which is authorized by the NRC, as may be directed by the Company.
The Company shall provide the Trustee with notification that the Qualified Fund or the Nonqualified Fund, as the case may be, has terminated and with directions for distribution of the assets of the terminated Fund prior to distribution of the assets of the terminated Fund.
This trust shall terminate upon the termination of all of the Funds.
ARTICLE VI.
Miscellaneous Section 6.01.
Bindina Aareement.
All covenants and agreements in this Agreement shall be binding upon and inure to the benefit of the respective parties hereto, their successors and assigns.
Section 6 02.
Notices.
All notices and communications hereunder sha) be in writing and shall be deemed to be duly given on the date
_iled if sent by registered mail, return receipt requested, as follows:
MELLON BANK, N.A.
Room 151-3346 One Mellon Bank Center Pittsburgh, PA 15258 TEXAS UTILITIES ELECTRIC COMPANY 2001 Bryan Tower Dallas, TX 75201 Atte:;ntion:
10
or at such other address as any of the above may have furnished to the other parties in writing by registered mail, return receipt requested.
Section 6.03.
Governina Law.
The Funds have been established pursuant to this Agreement in accordance with the requirements for a trust under applicable state law.
Section 6.04.
Severability.
If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision sha'i he excluded from this Agreement and the balance of the Agree. era: shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
j Section 6.05.
Countercarts.
This Agreement may be executed in several counterparts, and all such counterparts executed and delivered, each an original, shall constitute but one and the same instrument.
Section 6.06.
Entire Aareement.
This Agreement sets forth the entire understanding and agreement among the parties with respect to the subject matter hereof and supersedes and replaces any prior understanding, agreement or statement (written or oral).
1 IN WITNESS WHEREOF, the parties hereto, each intending to be legally bound hereby, have hereunto set their hands and seals as of the day and year first above written.
TEXAS UTILITIES ELECTRIC COMPANY ATTEST:
d MM By:
sfpt(, &
.itnio e Vic c Pe<1ts &ar t MELLON BANK, N.A.
A EST:
By: "k P M rv' ?
Y4n " W T CFFICER Vice President
/
11 J
L
r SPECIAL TERMS OF THE QUALIFIED NUCLEAR DECOMMISSIONING RESERVE FUNDS The following Special Terms of the Qualified Nuclear I;acommissioning Reserve Funds (the " Qualified Funds") (hereinafter referred to as the "Special Terms") will apply for purposes of the Nuclear Decommissioning Trust Agreement, dated between Texas Utilities Electric Company (the
" Company") and Mellon Bank, N. A. (the " Trustee") (the " Agreement").
Section 1.
Definitions.
The following terms as used in the Special Terms
- shall, unless the context clearly indicates otherwise, have the following respective meanings:
(a)
" Administrative costs and other incidental expenses of the Qualified Funds" shall mean all ordinary and necessary expenses incurred in connection with the operation of the Qualified Funds, as provided in Treas. Reg. 91. 4 68 A-5 (a) (3 ) (ii) ( A) or any corresponding future Treasury Regulation, including without limitation, federal, state, and local income tax, legal expenses, accounting expenses, actuarial expenses and trustee expenses.
(b)
" Qualified Decommissioning Costs" shall mean all expenses otherwise deductible for federal income tax purposes, I
without regard to Section 280B of the Internal Revenue Code of 1986, as amended, or any corresponding section or sections of any future United States internal revenue statute (the
" Code"),
incurred (or to be incurred) in connection with the entombment, decontamination, dismantlement, removal and disposal of the structures, systems and components of a
Unit when it has permanently ceased the production of electric energy, excluding any costs incurred for the disposal of spent nuclear fuel, as provided
r
~
I l
in Treas. Reg. 51.468A-1(b) (5) or any corresponding future Treasury Regulation.
Such term includes all otherwise deductible expenses to be incurred in connection with the preparation for decommissioning, such as engineering and other planning expenses, and all otherwise deductible expenses to be incurred with respect to the Unit after the actual decommissioning occurs, such as physical security and radiation monitoring expenses.
(c)
" Obligations of a state or local government" shall mean obligations of a state or local government unit the interest on which'is exempt from tax under Section 103(a) of the Code, as provided in Treas. Reg. 51.468A-5(a) (3) (ii) (C) or any corresponding future Treasury Regulation.
(d)
" Permissible Assets" shall mean the following assets:
1 (i)
Public debt securities of the 1
United States; (ii)
Obligations of a state or local government that are not in default as to principal or interest; (iii)
Time or demand deposits in a bank, as defined in Section 581 of the
- Code, or an insured credit union within the meaning of Section 101(6) of the Federal Credit Union Act, 12 i
\\
U.S.C.
1752(7) (1982), located in the United States; or (iv)
Any other investment permitted for a
qualified nuclear decommissioning reserve fund under Section 468A of the Code and the regulations thereunder or any corresponding future Treasury Regulation.
(e)
"Public debt sect.rities of the United States" shall mean obligations that are taken into consideration for purposes of the public debt
- limit, as provided in Treas.
Reg.
51.468A-5 (a) (3 ) (ii) (B) or any corresponding future Treasdry Regulation, including, as of the date hereof, Treasury bills, Treasury notes, Treasury bonds and savings bonds.
(f)
"PUC" shall mean the Texas Public Utility Commission or any successor governmental authority.
(g)
" Substantial completion of decommissioning" shall mean the date that the maximum acceptable radioactivity levels mandated by the U. S. Nuclear Regulatory Commission with respect to a decommissioned nuclear power plant are satisfied by the Units; provided, however, that if the Company requests a ruling from the Internal Revenue Service, the date designated by the Internal Revenue Service as the date on which substantial completion of decommissioning occurs shall govern; provided, further, that the date on which substantial completion of decommissioning occurs I
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l shall be in accordance with Treas. Reg. 51. 4 68 A-5 (d) ( 2 ) or any corresponding future Treasury Regulation.
(h)
" Time or demand deposits" shall mean checking accounts, savings accounts, certificates of deposit or other time or demand deposits, excluding common or collective trust funds, as provided in Treas. Reg. 51.468A-5(a) (3) (ii) (D) or any co responding future Treasury Regulation.
Section 2.
Contributions to the Oualified Funds.
The assets of the Qualified Funds shall be contributed by the Company from i
time to time in cash.
The Trustee shall not accept any contributions for the Qualified Funds other than cash payments with respect to which the Company is allowed a deduction under Section 468(a) of the Code and Treas.
Reg.
51.468A-2(a) or any corresponding future Treasury Regulations.
The Company hereby represents that all contributions (or deemed contributions) by the Company to the Qualified Funds in accordance with the provisions of Section 1.03 of the Agreement shall be deductible under Section 468A of the Code and Treas. Reg. 51.468A-2 (a) or any corresponding future Treasury Regulation or shall be withdrawn pursuant to Section 4 hereof.
Section 3.
Limitation on Use of Assets.
The assets of each Qualified Fund shall be used exclusively with respect to the Unit for which the Fund is established as follows:
(a)
To satisfy, in whole or in part, the liability of the Company for Qualified Decommissioning costs through payments by l
l the Trustee pursuant to Section 2.02 of the Agreement; and i
1
(b)
To pay the administrative costs and other incidental expenses of the Qualified Funds; and (c)
To the extent the assets of the Qualified Funds are 1
not currently required for (a) and (b) above, to invest directly in Permissible Assets.
{
section 4.
Withdrawals by the Company.
If the Company's contribution (or deemed contribution) to either Qualified Fund in any one year exceeds the amount deductible under Section 468A of the Code and the regulations thereunder, the Company may withdraw such excess contribution from such Qualified Fund or instruct the Trustee to withdraw such excess contribution from such Qualified Fund and pay such excess contribution to the other Qualified Fund or to a Nonqualified Fund, as defined in the Agreement, pursuant to Section 2.04 of the Agreement, provided any such withdrawal occurs on or before the date prescribed by law (including extensions) for filing the federal income tax return of the Fund for the taxable year to which the excess contribution relates for withdrawals pursuant to Treas. Reg. 51. 4 68 A-5 (c) (2) and
- 1. 4 68A-2 ( f) (2 ) and occurs on or before the later of the date prescribed by law (including extensions) for filing the federal income tax return of the Fund for the taxable year to which the excess contribution relates or the date that is thirty (30) days after the date that the Company receives the ruling amount for such taxable year for withdrawals pursuant to Treas.
Reg.
- 51. 4 68A-3 (j ) (3 ).
If the Company determines tilat withdrawal pursuant to this Section 4 is appropriate, the company shall present a certificate so stating to the Trustee signed by its Chairman of the Board, its President or
one of its Vice Presidents and its Treasurer or an Assistant Treasurer, requesting such withdrawal.
The certificate shall be substantially in the form attached as Exhibit C to the Agreement for transfers to a' Nonqualified Fund as provided in Section 2.04 of the Agreement and substantially in the form of Exhibit D to the Agreement for withdrawals by the Company.
Section 5.
Taxable Year / Tax Returns.
The accounting and taxable year for each Qualified Fund shall be the taxable year of the Company for federal income tax purposes.
If the taxable year of the Company shall change, the Company shall notify the Trustee of such change and the accounting and taxable year of each Qualified Fund must change to the taxable year of the company as provided in Treas. Reg. 51.468A-4 (c) (1) or any corresponding future Treasury Regulation.
The Company shall assist the Trustee in complying with any requirements under section 442 of the Code and Treas. Reg. 51.442-1.
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EXH7 BIT B DISBURSEMENT CERTIFICATE FOR PAYMENT OF DECOMMISSIONING COSTS
[Name of Trustee],
as Trustee (Address]
This Certificate is submitted pursuant to Section 2.02 of the Nuclear Decommissioning Trust Agreement, dated
, between Mellon Bank, N. A. (the " Trustee")
and (the " Company") (the
" Agreement").
All capitalized terms used in this Certificate and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement.
In your capacity as Trustee, you are hereby authorized and requested to disburse out of the Funds to _
the amount of $
from the Qualified Fund for Unit and the amount of $
from the Nonqualified Fund for Unit for the povment of the Decommissioning costs which have been incurred with respect to such Unit.
With respect to such Decommissioning Costs, the Company hereby certifies as follows:
1.
The amount to be disbursed pursuant to this certificate shall be solely used for the purpose of paying the Decommissioning Costs described in Schedule A hereto.
2.
None of the Decommissioning Costs described in Schedule A hereto have previously been made the basis of any certificate pursuant to Section 2.02 of the Agreement.
3.
The amount to be disbursed from the Qualified Fund pursuant to this Certificate shall be used solely for the purpose
I
(
I f
of paying Qualified Decommissioning Costs as defined in the Special i
Terms..
IN WITNESS
- WHEREOF, the undersigned have executed this Certificate in the capacity shown below as of f
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l By:
Name:
Title:
By:,,
Name:
Title:
1
]
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l EXHIBIT C C2RTIFICATE FOR TRANSFER l
BETWEEN A QUALIFIED FUND AND A NONQUALIF1ED FUND
[Name of Trustee],
as Trustee l
[ Address]
This Certificate is submitted pursuant to Section 2.04 of the 1
Nuclear Decommissioning Trust Agreement, between Mellon
- Bank, N.A.
(the
" Trustee") and (the
" Company") (the " Agreement").
All capitalized terms used in this Certificate and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement.
In your capacity as Trustee, you are hereby authorized and instructed as follows (complete one):
To pay $
in cash from the Nonqualified Fund for Unit to 1.ne Qualified Fund for Unit
- or To pay $
in cash from the Qualified Fund for Unit to the Nonqualified Fund for Unit With respect to such payment, the Company hereby certifies as follows:
1.
Any-amount st.sted herein to be paid from the Nonqualified Fund for Unit to the Qualified Fund for Unit is in accordance with the contribution limitations applicable to the Qualified Fund for Unit set forth in Section 2 of the Special Terms and the limitations of Section 2.04 of the Agreement.
2.
Any amount stated herein to be paid from the
. Qualified Fund for Unit to the Nonqualified Fund for Unit is in accordance with Section 4 of the Special Terms.
The Company has determined that such payment is appropriate under the standards of Section 4 of the Special Terms.
1 IN WITNES9 WHEREOF, the' undersigned have executed this l
j' Certificate in the capacity shown below as of l
1 L
l l
By:
Name:
Title:
By:
Name:-
Title:
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EXHIBIT D CERTIFICATE FOR WITHDRAWAL OF EXCESS CONTRIBUTIONS FROM A QUALIFIED FUND
[Name of Trustee],
as Trustee
[ Address)
This Certificate is submitted pursuant to Section 4 of the Special Terms attached as Exhibit A to the Nuclear Decommissioning Trust Agreement, dated between Mellon Bank, N.A. (the " Trustee") and (the
" Company") (the " Agreement").
All capitalized terms used in this Certificate and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement.
In your capacity as Trustee, you are hereby authorized and instructed to pay $
in cash to the Company from the Qualified Fund for Unit With respect to such payment, the Company hereby certifies that withdrawal pursuant to Section 4 of the Special Terms is appropriate and that $
constitutes an excess contribution pursuant to such Section.
IN WITNESS
- WHEREOF, the undersigned have executed this Certificate in the capacity shown below as of By:
Name:
l
Title:
i By:
Name:
Title:
r AMENDMENT TO NUCLEAR DECOMMISSIONING TRUST AGREEMENT This Amendment is entered into as of the 20th day of September, 1991, by and between Texas Utilities Electric Company, corporation duly organized and existing under the. laws of the a
State of Texas and having its principal office at 2001 Bryan Tower, l
Dallas, Texas 75201 (the " Company"), and Mellon Bank, N.A.,
as Trustee, having its principal office at One Mellon Bank Center, Pittsburgh, Pennsylvania 15258 (the " Trustee").
WHEREAS, the Company and the Trustee have entered into that certain Nuclear Decommissioning Trust Agreement dated as of July 10, 1990 (the " Agreement") pursuant to which, among other things, the Company established the Funds for the exclusive purpose of providing for the decommissioning of the Units and to constitute qualified and nonqualified nuclear decommissioning reserve funds;
- WHEREAS, in Article IV of the Agreement, the Company specifically reserves the right to amend the Agreement; and i
WHEREAS, in order to comply with Substantive Rules 95 23.21 and 23.59 promulgated by the Public Utility Commission of Texas
{
which saf d Substantive Rules became effective July 8,
1991, the Company and the Trustee desire to amend the Agreement in the manner provided for herein.
f NOW, THEREFORE, the parties hereby agree as follows:
1.
Section 1.02 of the Agreement is hereby amended to specify that:
(i) the interest earned on the corpus of each of the Funds shall become part of the corpus of the respective Fund; and (ii) the Trustee owes the same duties with regard to the interest earned on the corpus of the Funds as are owed with regard to the corpus.
As amended, Section 1.02 of the Agreement shall read in full as follows:
I "Section 1.02.
Purposes of the Funds.
The Funds are established for the exclusive purpose of providing i
funds for the decommissioning of the Units and to constitute Qualified and Nonqualified nuclear decommissioning reserve funds and to comply with any applicable orders or requirements of the Public Utility Commission of Texas (the "PUC") and the United States Nuclear Regulatory Commission (the "NRC").
The Nonqualified Funds shall accumulate all contributions (whether from the Company or others) which do not satisfy the requirements for contributions to the Qualified Funds pursuant to Section 2 of the Special Terms.
The Quclified Funds shall accumulate all contributions which satisfy the requirements of Section 2 of the Special Terms.
The Qualified Funds shall also be governed by the provisions of the Special Terms, which provisions shall take orecedence over any provisions of this Agreement construed to be in conflict therewith.
The duties of the Trustee provided herein shall apply equally to the corpus of, as well as any interest earned on, the Funds.
Any and all interest earned, from time to time, on the corpus of any of the Funds shall become part of the corpus of the respective Funds. The duties of the Trustee provided herein shall apply equally to the corpus of the Funds and to any and all interest earned on the corpus of any of the Funds.
None of the assets of the Funds shall be subj ect to attachment, garnishment, execution or levy in any manner for the benefit of creditors of the Company, except to the extent a Certificate of Disbursement, substantially in the form attached as Exhibit B, has been signed by the Company with respect to such assets of the Funds."
2.
Section 1.03 of the Agreement is hereby amended to provide that, when making contributions to the Funds, the Company shall, to the extent permitted under Section 468A of the Code, make such contributions to the Qualified Funds; and, as amended, Section 1.03 of the Agreement shall read in full as follows:
"Section 1.03.
Contributions to the Funds.
The assets of the Fun,s shall be contributed by the Company from time to time.
The Company shall designate into which of the Qualified Funds or Nonqualified Funds the assets shall be contributed; provided, however, that the Company shall, to the extent permitted under Section 468A of the code and the regulations promulgated thereunder, make such contributions to the Qualified Funds.
Subject to the foregoing limitations ar.d other relevant limitations promulgated from time to time by the PUC or i
other authoritative entities, the Company shall have sole discretion as to whether cash payments are allocated to f'
the Qualified Funds or the Fonqualified Funds.
Contributions of property other 'han cash shall be I
allocated to the Nonqualified Fundt, "
3.
Section 3.01 of the Agreement is hereby amended to provide that:
(i) the Trustee shall have a continuing duty to review the Funds for compliance with relevant investment guidelines and governing regulations; and (ii) the power and authority granted under the Agreement shall not exceed the power and authority which may be granted under the Texas Trust Code.
As amended, Section 3.01 of the Agreement shall read in full as follows:
"Section 3.01.
Authority of Truste3 The Trustee hereby accepts the trusts created under this Agreement.
The Trustee shall have the authority and discretion to manage and control the Funds to the extent provided in this Agreement but does not guarantee the Funds in any manner against investment loss or depreciation in asset value or guarantee the adequacy of the Funds to satisfy the Decommissioning Costs.
The Trustee shall not be liable for the making, retention or sale of any asset of the Qualified Funds which qualifies as a Permissible Asset, as defin ' in the Special Terms, nor shall the Trustee be responsible for any other loss to or diminution of the Funds, or for any other loss or damage which may result from the discharge of its duties hereunder, except if such loss or diminution is the result of the Trustee's failure to
. perform its responsibilities hereunder in the same manner as would a prudent man, acting in a like capacity and familiar with such matters, in the conduct of an enterprise of a similar nature.
Notwithstanding the foregoing or any provision of this Agreement seemingly to the contrary, the Trustee shall have a continuing duty to review the Funds to assure compliance with the investment guidelines provided in this Agreement and otherwise provided from time to time by the Company, as well as with applicable federal, state or local statutes, regulations, rules or ordinances.
In no event shall the Trustee's power and authority provided for herein exceed the power and authority which may be granted to trustees under the Texas Trust Code."
4.
Section 3.02(b) of the Agreement is hereby amended to provide certain specific investment limitations.
As amended, Section 3.02(b) shall read in full as follows:
"(b) To the extent that the investment of assets of the Funds is not being directed by one or more investment managers under Section 3.02(a), the Trustee shall hold, invest, and reinvest the funds delivered to it hereunder as it in its sole discretion deems advisable, subject to all of its obligations and liabilities set forth in this Agreement and to the restrictions set forth herein for investment of the assets of the Qualified Funds.
As a
- part, but not in limitation, of the restrictions referenced in the preceding sentence, the Trustee shall not:
(i) lend the Funds, or any part thereof, with l
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E l
itself, its officers or its directors; or (ii) invest or reinvest the Funds, or any part thereof, in instruments l
issued by the Trustee, except for time deposits, demand deposits or money market accounts of the Trustee."
l 5.
Article V of the Agreement is hereby amended to provide that the trusts created under the Agreement shall be irrevocable.
l As amended, a new Section 5.01, relating to the termination of the i
trusts created under the Agreement, shall be added and the current provisions of Article V, which relate to the termination of the Funds, shal] be included as Section 5.02.
As amended, Article V shall read i.. full as follows:
" ARTICLE V.
Termination Section 5.01.
Trusts Irrevocable.
Subject to the provisions of this Agreem<mt regarding amendments of this Agreement, the trusts created hereunder shall be irrevocable.
Section 5.02.
Termination of Trusts.
The trusts created hereunder shall terminate only upon the earliest of:
(i) the termination by the NRC of the licenses covering the Units; (ii) the sale or other disposition by the Company of all of its right, title and ownership interest in and to the Units; and (iii) the date which is one day prior to twenty-one (21) years after the death of the last survivor of (x) each person who was an officer of the Company or of the Company's affiliated companies on July 10, 1990, and (y) each of their descendants born on or prior to July 10, 1990.
Upon termination of the trust (s), the assets of the terminated trust (s) shall be distributed to the company or transferred to another financial assurance mechanism which is authorized by the NRC, as may be directed by the Company.
The Company shall provide the Trustee with notification that the trust (s) has te.rminated and with directions for distribution of the assets of the terminated trust (s)."
Section 5.03.
Termination of Oualified Funds.
A Qualified Fund shall terminate upon the earlier of either (i) substantial completion of decommissioning of the Unit, as defined in the Special Terms, to which such Qualified Fund relates; or (ii) disqualification of the Qualified Fund by the Internal Revenue Service as provided in Treas. Reg. fl.468A-5(c) or any corresponding future Treasury Regulation; or (iii) the effective date of a resolution adopted by the Board of Directors of the Company terminating the Qualified Fund provided, however, that such effective date shall be no earlier than the date of approval by the NRC, if applicable; or (iv) twenty-one (21) years after the last survivor of (x) each person who was an ' officer of the Company or of the a
4 I
Company's af filiated companies on July 10, 1990, and (y)
-each of their descendants born on or prior to July 10, 1990; or (v) to the' extent required under Section 468A of the' Code or any regulation promulgated thereunder, upon the Company's sale or other disposition of all or a portion of the Unit to which such Qualified Fund relates."
i l
6.
Section 6.03 of the Agreement is hereby amended to provide that the laws of the State.of Texas shall control all questions relating to the Agreement, the Funds and the trusts created under the Agreement; and, as amended, Section 6.03 of the Agreement shall read in full as follows:
H6.03 Governina Law. The trusts created under this Agreement are Texas trusts and all questions relating to or governing the trusts, the Funds or this Agreement shall, to the extent they are not preempted by Federal l a'1, be determined in accordance with the laws of the State of Texas."
7.
Unless otherwise defined herein, each of the capitalized terms used herein shall have the same meaning given to such term in the Agreement.
8.
This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
9.
This Amendment shall be governed by and construed-under the-laws of the State of Texas.
10.
This Amendment, together with the-Agreement, sets forth I
the entire. understanding and agreement among the parties with respect to the subject matter hereof and supersedes and replaces any prior understandings, agreements or statements (written or oral).
11.
Except as expressly amended hereby, the Agreement is hereby restated, confirmed and ratified in all respects and shall remain in full force and effect.
i I
a IN WITNESS WHEREOF, the parties hereto, each intending to be legally bound hereby, have executed this Amendment as of the date first above written.
TEXAS UTILITIES ELECTRIC COMPANY
/
By:
- E-dd T.
L.
Baksr, Senior Vice President ATTEST:
1 L
J M
MELLON BANK, N.A.
By:
Title:
VICE PRESIDE *!T ATTE C)V/[f g,.a:rn
]
,f Y,Av:oygf *>y as 10 FORM i:
fW g
ICAt cEPARTMENT4 v
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e
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l SECOND AMENDMENT TO NUCLEAR DECOMMISSIONING T R U S I' AGREEMENT This Second Amendment is entered into as of the day of May 1994, by and between Texas Utilities Electric Company, a
corporation duly organized and existing under the laws of the State of Texas and having its principal office at Energy Plaza, 1601 Bryan, Dallas, Texas -75201 (the " Company"), and Mellon Bank, N.A., as Trustee, having its principal office at One Mellon Bank Center, Pittsburgh, Pennsylvania 15258 (the " Trustee").
WHEREAS, the company and the Trustee have entered into that certain Nuclear Decommissioning Trust Agreement dated as of July 10, 1990 (the " Agreement") and that certain Amendment to Nuclear Decommissioning Trust Agreement dated as of September 20, 1991 (the " Amendment"), pursuant to which, among other things, the
~
Company established the Funds for the exclusive purpose of providing for the decommissioning of the Units and to constitute qualified and nonqualified nuclear decommissioning reserve funds; WHEREAS, in Article IV of the Agreement, as amended by the Amendment, the Company specifically reserves the right to amend the Agreement; and WHEREAS, in order to ensure that any pooling of assets in accordance with section 3.02 (c) of the Agreement, as amended by i
the Amendment, does not create an association taxable as a corporation within the meaning of Treasury Regulations (26 C.F.R. )
section 301.7701-2(a), the Company and Trustee desire to amend the t
Agreement in the manner provided herein;
.~
. NOW, THEREFORE, the parties hereby agree as follows:
1.
Section 3.02(c) of the Agreement, as amended by the Amendient, is hereby amended by striking said section 3.02(c) and substituting in its place the following language:
"(c) Regardless of the person directing investment, any assets of the Qualified Funds shall be invested solely in Permissible Assets as defined in, and required by, the Special Terms, and shall be accumulated, invested, and reinvested in like manner.
Upon written consent of the Company, assets of a Qualified Fund relating to a Unit may be pooled, but only with the assets of the Qualified Fund relating to the other Unit, and assets of a Nonqualified Fund relating to a Unit may be pooled, but only with the assets of the Nonqualified Fund relating to the other Unit, provided that the following conditions are satisfied: (i) the trustee of each Fund must separately account for the contributions, earnings,
- expenses, and distributions of such Fund; (ii) the earnings and expenses must be reasonably apportioned among such Funds; (iii) the books and records of such Funds must enable t.he Internal Revenue Service to verify that the requirements of Section 468A of the Code and the regulations thereunder are satisfied.
Any pooling arrangement undertaken as permitted in this section can be terminated at any time by any Fund.
No Fund in such a pooling arrangement may substitute for itself in such arrangement any person that is not a member of that pooling arrangement.
Notwithstanding the foregoing, the provisions of this section 3.02(c) shall not limit the Trustee's authority to invest in permissible common or collective trust funds."
2.
Section 1.(d) of Exhibit A to the Agreement, as amended I
by the Amendment
("Special Terms of the Qualified Nuclear l
Decommissioning Reserve Funds"),
is amended by striking said 4
section 1.(d) and substituting in its place the following language:
i
"(d) ' Permissible assets' shall mean assets that the
}
Qualified Funds are permitted to own by the Code and by the PUC."
l
E.
, 3.
Each'of the capitalized terms-used herein shall have the same meaning' given to. such term in the Agreement, as amended by the Amendment.
4.
-This Second. Amendment may be executed in any number of
{
counterparts, each~of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
5.
This S cond Amendment shall be governed by and construed under the laws et the State of Texas.
6.
This'Second Amendment, together with the Agreement and I
the Amendment, sets forth the entire understanding and agreement
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among.the parties with respect to the subject matter brereof and i
supersedes and replaces any prior understandings, agreements, or statements-(written or oral).
7.
Except as expressly amended hereby and by the Amendment, the Agreement is hereby restated, confirmed and ratified in all
-respects and shall remain in full force and effect.
4 1
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y_.
o 4
IN WITNESS WHEREOF, the parties hereto, each intending to be legally bound hereby, have executed this Second Amendment as of l
the date first above written.
TEXAS UTILITIES ELECTRIC COMPANY By:
M i~
ATTEST
[ MAL i
MELLON BANK, N.A.
1 l
By:
t-T VICE PRESIDENT
r RICHARb S. THOMAS ATTEST:
gw 8
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L! GAL CEPAAIMIN l
n
.I
-MEsDMEsT TO l
NUCLEAR DECOMMISSIONING TRUST AGREEMENT l
DATED AS OF JULY 10,1990 l
l Pursuant to the provisions of Article IV of the Nuclear Decommissioning Trust Agreement dated as ofJuly 10,1990 by and between Texas Utilities Electric Company and Mellon Bank, N.A.,
as Trustee, as amended by that certain Amendment to Nucicar Decommissioning Trust Agreement dated as of September 20,1991, and that certain Second Amendment to Nuclear Decommissioning Tmst Agreement dated as ofDecember 30,1994 (collectively, the " Agreement"), and in order to conform to the provisions ofRegulation Section 1.468A-5(a)(4), the Agreement is hereby amended as follows:
l 1.
Section 2.01 of the Agreement is hereby amended to read in full as follows:
l Section 2.01. Limitation on Use of Assets. The assets of each Fund shall be I
used exclusively (a) to satisfy, in whole or in part, any expenses or liabilities incurred l
by or on behalf of the Company with respect to the decommissioning of the Unit to i
which each Fund relates, including expenses incurred in connection with the preparation for decommissioning, such as engineering and other planning expenses, and all expenses incurred after 6e actual decommissioning occurs, such as physical security and radiation monitoring spenses (the "Dm-a A:Ioning Costs"), (b) to pay the administrative costs and other incidental expenses of each Fund separately from the assets of such Fund, and (c) to invest in securities and investments as directed by the investment manager (s) purscant to Section 3.02(a) or the Trustee pursuant to -
Section 3.02(b), except that all assets of the Qualified Funds must be invested in i
Permissible Assets as defined in the Special Terms. Use of the assets of the Qualified L
Funds shall be further limited by th: provisions of the Special Terms and must be used i
as authorized by Section 468A of the Code and the regulations thereunder.
2.
Article IV of the Agreement is hereby amended to read in full as follows:
l The Company may amen <l, consistent with the purposes of the Funds, this Agreement from time to time, provided such amendment does not cause the Qualified 4
Funds to fail to quahfy as a Nuclear Decommissioning Reserve Fund under, nor cause the provisions of the Agreement with respect to the Quali6ed Funds to violate, Section 468A of the Code or the regulations thereunder. Each Qualified Fund was established and shall be maintained for the purpose of qualifying as a Nuclear Decommissioning Reserve Fund under Section 468A of the Code and the regulations thereunder. If a Qualified Fund would fail to so qualify because of any provision contained in this Agreement, this Agree ment shall be deemed to be amended as necessary to conform with the equirements of Section 468A and the regulations thereunder. If a proposed amen (ment shall affect the responsibility of the Tmstee, such amendment shall not be ccasidered valid and binding until such time as the I
amendment is executed by the Trustee. If so requested by the NRC, the Company will provide to the NRC copies of any amendments to this Agreement.
3.
Unless otherwise defined herein, each of the capitalized terms used herein shall have the meaning given to such term in the Agreement.
4.
Except as expressly amended hereby, the Agreement shall remain in full force and effect.
5.
This Amendment may be executed in one or more counterparts, each of which shall be deened to constitute an original, and all of which together shall be deemed to constitute one and the same document.
6.
The Agreement (as previously amended), together with this Amendment sets forth the entire undereanding and agreement among the parties with respect to the subject matter hereof and supersedes and replaces any prior understanding, agreement or statement (written or oral).
IN WITNESS WHEREOF, the parties hereto, each intending to be legally bound hereby, have executed this Amendment as of the 13thday ofDecember,1996.
j TEXAS UTILITIES ELECTRIC COMPANY By:
Texas Utilities Electric Company Nuclear Decommissioning Trust Committee bbu By:
Peter B. Tinkham, Secretary MELLON BANK, N.A.
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