ML20198J066
| ML20198J066 | |
| Person / Time | |
|---|---|
| Site: | Hope Creek  |
| Issue date: | 12/18/1997 |
| From: | NRC (Affiliation Not Assigned) |
| To: | |
| Shared Package | |
| ML20198J049 | List: |
| References | |
| NUDOCS 9801140032 | |
| Download: ML20198J066 (3) | |
Text
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NUCLEAR REGULATORY COMMISSION t
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SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION PROPOSED MERGER OF ATLANTIC ENERGY. INC. AND DELMARVA POWER AND LIGHT COMPANY HOPE CREEK GENERATING STATION DOCKET NO. 50-354
1.0 BACKGROUND
Under cover of a letter dated A)ril 30, 1997, as supplemented by a letter dated November 7,1997, from Join H. O'Neill, Jr., of Shaw, Pittman,-Potts &
Trowbridge, Atlantic City Electric Company (ACE) submitted an application for approval under 10 CFR 50.80, in connection with a proposed merger between Atlantic Energy, Inc. (AEI), which is the parent holding company of ACE, and Delmarva Power & Light Company (DP&L).
A new holding company will result from this merger named Conectiv, Inc. (Conectiv). Under the merger agreement, all of AEI's subsidiaries (including ACE) and DP&L will become wholly owned subsidiaries of Conectiv, and AE! will cease to exist. Current holders of AEI and DP&L common stock would become holders of Conectiv comon stock pursuant to a formula stipulated in the merger agreement.
ACE is a 5-percent owner of the Hope Creek Generating Station (HCGS), a single-unit facility.
Public Service Electric & Gas Company (PSE&G) owns the remaining 95 percent.
The proposed merger does not involve PSE&G, which is the licensed operator of HCGS. The proposed merger will result in the indirect transfer of control of the interest held by ACE (but not PSE&G's interest) in HCGS's operating license to the proposed new holding company, Conectiv.
Accordingly, une r the provisions of 10 CFR 50.80, Commission approval is required.
In the application for approval dated April 30, 1997, the applicant states on page 10:
The purpose of the proposed Merger is to achieve benefits for the shareholders, customers and communities served by ACE and DP&L that would otherwise not be achievable if they were to remain as separate companies. The expected savings related to the Merger are approximately $500 million over the next ten years (1998 to l
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2007). The savings will come principally from elimination of duplicative activ' ties.. increased scale, improved purchasing power, improved operating efficiencies, lower capital costs and, to the extent practicable, by combining the companies' work forces.
2.F fiducial AND TECHNICAL QUALIFICATIONS On the basis'of information submitted in the application, the staff finds that there wili-be no near-term substantive change in the financial ability of ACE to contribute appropriately to the operations and decosmissioning of HCGS as a result of the proposed merger. ACE is, and would romain after:the merger, an
" electric utility" as defined in 10 CFR 50.2, engaged in the generation and
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distribution of electricity, the cost of which is recovered through rates
. established by the New Jersey Board of Public Utilities and'the Federal Energy Regulatory Commission. ' Thus, pursuant to 10 CFR 50.33(f), ACE, as an electric t utility, is exempt from further financial qualifications review.
However, in view of the NRC's concern that restructuring can lead to a
-diminution of assets necessary for the safe operation and decommissioning of a licensee's nuclear power plant, the NRC has sought to obtain commitments from its licensees that initiate restructuring actions not to transfer significant assets from the licensee without notifying the NRC. ACE has agreed:
to provide the Director of the Office of Nuclear Reactor Regulation a copy of any application, at the time it is filed, to transfer (excluding grants of a security interest or liens) from ACE to its proposed parent, or to any other affiliated company, facilities for the production, transmission, or distribution of electric energy having a depreciated book value exceeding 10 percent (10%) of ACE's consolidated net utility plant, as recorded on ACE's books of account.
See letter from John H. O'Neill, Jr., of Shaw, Pittman, Potts & Trowbridge to the NRC, dated November 7, 1997. This connitment, incorporated as a condition to the NRC's consent to the indirect license transfer to the extent effected by the proposed merger and restructuring, will assist the NRC in assuring that.
ACE will continue to maintain adequate resources to contribute to the safe operation and decommissioning of HCGS.
With respect to technical qualifications, the proposed merger will not effect any change in the technical qualifications of the licensed operator, PSE&G, and~will not_effect any change in the responsibilities and obligations of PSE&G or ACE as set forth in the license.
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.- 3.0 ANTITRUST The antitrust provisions of Section 105c of the Atomic Energy Act apply to an application for a license to construct or operate a facility licensed under Section 103 of the Act. Although Connectiv may become the holding company of ACE, a licensee for HCGS, i.e., may indirectly acquire control of the license, it will not be performing activities for which a license is needed. Since approval of the application would not involve the issuance of a license, the procedures under Section 105c do not apply, including the making of any "significant-changes" determination.
4.0 E0 REIGN OWNERSHIP The application states that for ACE,-after the proposed merger, ACE will not "be owned, controlled or dominated by any alien, foreign corporation or foreign governinent." Also, it states that ACE is not " acting as an agent or representative of any other person in this request for consent to the indirect transfer of control of the license."
(See page 5 of the application dated April 30, 1997.) The staff does not know or have reason to believe that ACE will be owned, controlled, or dominated by any alien, foreign corpration, or foreign government as a result of the proposed merger.
5.0 CONCLUSION
S In view of the foregoing, the staff concludes that the proposed merger of AEI and DP&L resulting in the formation of a new holding company, Conectiv, will not adversely affect the financial or technical qualifications of ACE with respect to the operation and decommissioning of the HCGS facility.
- Also, there do not appear to be any problematic antitrust or foreign ownership considerations related to the HCGS license that would result from the proposed merger. Thus, the proposed merger will not affect the qualifications of ACE as a holder of the license, and the transfer of control of the license, to the extent effected by the proposed merger, is otherwiso consistent with applicable provisions of law, regulations, and orders issued by the Commission. Accordingly, with the condition discussed above relating to significant asset transfers, the NRC should approve tho application regarding the proposed merger.
Principal Contributor:
A. McKeigney Date: December 18, 1997