ML20198H501

Forwards RAI Re 981203 Joint Application Filed by Gpu Nuclear,Inc & Amergen Energy LLC Re Sale & License Transfer Request for TMI-1.Info Requested within 3 Wks of Receipt of Ltr

ML20198H501
Person / Time
Site:	Three Mile Island
Issue date:	12/21/1998
From:	Colburn T NRC (Affiliation Not Assigned)
To:	Langenbach J GENERAL PUBLIC UTILITIES CORP.
References
TAC-MA3307, NUDOCS 9812290350
Download: ML20198H501 (5)

Text

December 21, 1998 Mr. James W. Langenbach, Vice President and Director- TMI GPU Nuclear, Inc.

P. O. Box 480

' Middletown, PA 17057

SUBJECT:

THREE MILE ISLAND NUCLEAR STATION, UNIT NO.1 (TMI- 1) SALE AND LICENSE TRANSFER APPLICATION REQUEST FOR ADDITIONAL INFORMATION (TAC NO. MA3307)-

Dear Mr. Langenbach:

3 We have reviewed your December 3,1998, joint application filed with AmerGen Energy LLC,  !

regarding the sale and license transfer request for TMI-1. We have determined that we need '

the additional info mation identified in the enclosure in order for the staff to continue its review.

We request that you provide this information within 3 weeks of receipt of this letter in order for l

the staff to continue its review on schedule. We appreciate your efforts expended with respect 1 to this matter. l A copy of this request for additionalinformation is being faxed to David R. Lewis, and Kevin P.

Gallen, attomeys for GPU Nuclear, Inc., and AmerGen Energy LLC, respectively. If you have any questions regarding this matter, please contact me at (301) 415-1402.

Sincerely, Original signed by:

Timothy G. Colbum, Senio, Project Manager Project Directorate 1-3

~

Division of Reactor Projects - t/Il t Office of Nuclear Reactor Regulation Docket No. 50-289

Enclosure:

Request for Additional information cc w/ encl: See next page i

DISTRIBUTION: r C]l lBeestFile7 JZwolinski TEssig IDinitz 1 PUBLIC TColbum CHehl, R' PDI-3 r/f TClark RArchizel OGC RWood ACRS DOCUMENT NAME: G:\COLBURN\RAl128.wpd To receive a copy of this document, indicate in the box: "C" = Copy without attachment / enclosure "E" = Copy with attachment / enclosure "N" = No copy OFFIC PM:PD13 E LA:PD13 g D:PD13 5 g B (A)B k

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NAME TColbum TClark 4D CThomas 4 d( TEssid R5ano DATE 12/ l'7/98 12/l'l /98 4 12//7 /98 12/t~1/98 12/ f //98 Official Record Copy 9912290350 981221 PDR ADOCK 05000289 "a"

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j NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20066 4 001 k.....,/ Decenber 21, 1998 Mr. James W. Langenbach, Vice President and Director- TMl GPU Nuclear, Inc.

P. O. Box 480 Middletown, PA 17057

SUBJECT:

THREE MILE ISLAND NUCLEAR STATION, UNIT NO.1 (TMI- 1) SALE AND LICENSE TRANSFER APPLICATION REQUEST FOR ADDITIONAL INFORMATION (TAC NO. MA3307)

Dear Mr. Langenbach:

We have reviewed your December 3,1998, joint application filed with AmerGen Energy LLC, regarding the sale and license transfer request for TMI-1. We have determined that we need the additional information related to financial qualification (identified in the enclosure) in order for the staff to continue its review. We request that you provide this information within 3 weeb of receipt of this letter in order for the staff to continue its review on schedule. We appreciate your efforts expended with respect to this matter.

A copy of this request for additionalinformation is being faxed to David R. Lewis, and Kevin P.

Gallen, attomeys for GPU Nuclear, Inc., and AmerGen Energy LLC, respectively. If you have any questions regarding this matter, please contact me at (301) 415-1402.

Sincerely, 9- AW Timotny G. olbum, Senior Project Manager Project Directorate 1-3 Division of Reactor Projects - l/II Office of Nuclear Reactor Regulation Docket No. 50-289

Enclosure:

Request for Additional Information cc w/ encl: See next page s so; 1wume ,% Av d w fru undWars b4%Mk.fAv, muunn, #w

REQUEST FOR ADDITIONAL INFORMATION PROPOSED AMERGEN PURCHASE OF TMI-1 FINANCIAL QUALIFICATION QUESTIONS

1. Page A-7. There does not seem to be an explicit statement in the application and supporting documents that the Chairman of the Management Committee will always be a U.S.

citizen. Rather, it is stated that Philadelphia Electric Company (PECO) will have the authority to appoint half the members of the Management Committee, who will be U.S. citizens, and the Chairman of the Management Committee. Given the wording of this authority, it appears that PECO could choose to appoint one of the British Energy-appointed members of the Management Committee as Chairman, who might thus be a non-U.S. citizen. Please clarify this.

2. Page A-14. Please support the assertion made on this page that AmerGen is an " electric utility" for the purposes of 10 CFR 50.33(f).

3. Page A-18. Appendix A refers to agreements that obligate PECO and British Energy to provide additional funds of up to $65 million over the life of the agreements, if needed for safety-related expenses. Assume that AmerGen needs to operate TMI-1 at a loss over a significant period of time and, thus, draws en these funds, but believes that TMI-1 will ultimately be profitable and, thus, continues operation. What would be the source of funds for a transition to a safe shutdown if a significant portion of the $65 million has been used and operating revenues are insufficient to provide for such a transition?

4. Page A 22. It is stated, "GPU Energy acknowledges that the NRC wn! retain jurisdiction over its actions with respect to this (the decommissioning] fund , and it voluntarily submits itself to the NRC's jurisdiction with respect to its potential continued role with respect to one or more of the decommissioning trust funds, even though neither GPU Energy nor GPUN (GPU Nuclear, Inc.) will continue to be NRC licensees with respect to the NRC license." What mechanism is contemplated to allow the NRC to retain jurisdiction over GPU with respect to the decommissioning fund? Is GPUN or GPU Energy refusing to remain an NRC licensee, even if its obligations under the license are restricted to maintenance of funds from GPU's ducommissioning trust agreements and conveyance of those funds to AmerGen for TMI 1's ultimate decommissioning?

5. Page A-23. The first sentence of the first full paragraph on this page needs to be clarified -

- there seems to be a syntax error near the end of parenthetical statement (1).

6. Exhibit 5 to Appendix A. AmerGen projects net income for most of the years from 2000 to 2014. Does AmerGen expect to retain net income as retained eamings, or retum it as dividends to PECO and British Energy? Does AmerGen expect that its net income will provide additional working capital over TMI-1's remaining operation? Where are capital additions accounted for on the projected income statements?

7. Exhibit 6 to Appendix A. To whom is the long-term note payable? What are the terms and conditions of the long-term note? To what does the post-retirement liability refer? What is the source of the initial cash and accounts receivable accounts?

8. Exhibit 7 to Appendix A. The letters in this Appendix obligate British Energy and PECO to Enclosure smnwwwwmm -

s 2-each pay $11.5 million to AmerGen in order for AmerGen to pay the TMI-1 purchase price of

$23 million to GPU. The letters also include an unspecified obligation for additior'al payments relating to the Fuel Payment and the Deal Strike Price Adjustment. Given that the Fuel Payment has been stated as being $77 million over 5 years, why is this amount not specified in these letters? Has a schedule for these payments been determined?

9. Has AmerGen discussed obtaining secondary nuclearliability coverage with the nuclear liability insurance cools? If so, describe the results of those discussions. To what extent will PECO and British Energy be involved in guaranteeing the payment of the retrospective premiums.

10. Please provide the TLG site-specific decommissioning cost study for TMI-1 which the application references on page A-20.

TECHNICAL QUALIFICATION QUESTIONS

1. Describe the new organizational structure for the integrated management of the facility.

2. Describe the management controls and lines of communication and authority between the new management and the organizational units involved in the day-to-day operation of the facility.

3. Describe the specific educational and experience background for the new management.

The response should provide sufficient information to allow the technical qualifications of the new management / owner to be determined. This information can be demonstrated using organization charts, descriptions of job functions and responsibilities, and resumes indicating the educational and experience backgrounds of the individuals.

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3 Three Mile Island Nuclear Station, Unit No.1 cc:

9

. Michael Ross Director, O&M, TMI Robert B. Borsum

. GPU Nuclear, Inc. B&W Nuclear Technologies P.O. Box 480 Middletown, PA 17057 Suite 525 1700 Rockville Pike

Rockville, MD 20852

John C. Fomicola j Director, Planning and William Domsife, Acting Director Regulatory Affairs l Bureau of Radiation Protection GPU Nuclear, Inc. Pennsylvania Department of  ;

, 100 Interpace Parkway Environmental Resources t

< Parsippany, NJ 07054 P.O. Box 2063

} Jack S. Wetmore

/

Manager, TMI Regulatory Affairs Dr. Judith Johnsrud

GPU Nuclear, Inc. National Energy Committee i P.O. Box 480 Sierra Club j Middletown, PA 17057 433 Orlando Avenue j State College, PA 16803 Emest L. Blake, Jr., Esquire Shaw, Pittman, Potts & Trowbridge Mr. James W. Langenbach, Vice President 2300 N Street. NW. and Director- TMI-1

Washington, DC 20037 GPU Nuclear, Inc.

P.O. Box 480 4

Chairman Middletown, PA 17057 Board of County Commissioners of Dauphin County Mr. Eric Epstein Dauphin County Courthouse TMI Alert Harrisburg, PA 17120 315 Peffer Street Harrisburg, PA 17102 Chairman Board of Supervisors of Londonderry Township R.D. #1, Geyers Church Road -

Middletown, PA 17057 Wayne L Schmidt Senior Resident Inspector (TMl-1)

U.S. Nuclear Regulatory Commission P.O. Box 219 Middletown, PA 17057 Regional Adn.inistrator, Region i U.S. Nuclear Regulatory Commission 475 Allendale Road King of Prussia, PA 19406 l

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