ML20199E571
| ML20199E571 | |
| Person / Time | |
|---|---|
| Site: | Crane  |
| Issue date: | 09/15/1998 |
| From: | Matthews J MORGAN, LEWIS & BOCKIUS |
| To: | Colburn T NRC |
| Shared Package | |
| ML20199E575 | List: |
| References | |
| NUDOCS 9901210022 | |
| Download: ML20199E571 (15) | |
Text
tem u sueo W.
Morgan, Lewis WasNngton, D.C. 20036-5869
&Bocldt1s us
'7 2au6nox ran: 202-467-7176 COUN$EL0R5 AT LAW John E. Matthews 202-467-7524 1
i September 15,1998 l
VIA HAND DELIVERY U.S. Nuclear Regulatory Commission ATTN: Timothy G. Colburn Mail Stop 14B20 One White Flint North 11555 Rockville Pike Rockville, MD 20852-2738 Re:
Foreien Ownershin Issues Related to the Transfer of the TMI-1 I icense to AmerGen
Dear Mr. Colburn:
Enclosed is a paper that we prepared on behalf of AmerGen Energy Company, LLC (AmerGen) which provides a legal analysis of foreign ownership issues relating to AmerGen's proposed acquisition of Three Mile Island Unit No.1 (TMI-1) and the proposed transfer of the TMl-1 license from the current licensees to AmerGen. We prepared this analysis in anticipation of a request for NRC consent to the transfer of the TMI-l license, and we assume it may be helpful for your review and consideration in advance of that request.
If you have any questions, please do not hesitate to call.
Sincerelf, i
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/c& '
I
/ ohn E.Matthews J
f Enclosure h
cc:
Robert S. Wood (Mail Stop 10H5)
N Steven R. Hom, Esq. (Mail Stop 15B18) 9901210022 900915
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J September 15,1998 SUBJECI:
FOREIGN OWNERSIIIP ISSUES RELATING TO TIIE TRANSFER OF TIIE TMI-1 LICENSE FROM GPU TO AMERGEN IN LIGIIT OF BRITISII ENERGY'S PARTICIPATION IN AMERGEN INTRODUCTION:
i This memorandum reviews Sections 103d,104d and 184 of the Atomic Energy Act of 1954, as amended ("the Act), and established Commission precedent interpreting these sections to assess foreign ownership issues raised by the proposed transfer of NRC Operating License No. DPR-50, Docket No. 50-289, for the Three Mile Island Nuclear Unit 1 (TMI-1) from the current licensees, all of whom are subsidiaries of GPU, Inc., to i
AmerGen Energy Company, LLC (AmerGen).
The Commission has permitted foreign panicipation in U.S. reactor projects, including ownership ofinterests of up to 50%, where the license applicants demonstrated that the foreign entities did not hold a majority interest in the project and that the licensed activities would be conducted under the direction and control of U.S. citizens. Typically, this has been accomplished through licensee commitments or license conditions limiting the amount of foreign participation in the licensed activities. Transfer of an existing NRC reactor license should therefore be permitted under circumstances where:
(a) the proposed transferee is a U.S. company or partnership; (b) the foreign entity does not hold more than a 50% ownership interest in the transferee; (c) the foreign entity does not dominate or control the board of directors, or other equivalent executive or management committee of the transferee; (d) the chief executive officer and chief nuclear officer (if someone other than the CEO) of the transferee are U.S. citizens, charged with the responsibility and exclusive authority of ensuring that the business and activities under the license are at all times conducted in a manner consistent with the protection of the common defense and security of the United States;
l Q
(e) all directors, officers, managers, supervisors and employees having custody or control of special nuclear material, having access to the restricted and vital areas, and/or having access to Restricted Data will have the necessary security clearances and access permits; and (f) the foreign entity is from a country such as the United Kingdom that is an ally of the United States, has strong nuclear non-proliferation credentials, has close technical and economic ties to the United States, and otherwise has an important foreign policy relationship i
with the United States.
i i
Based upon a review of the applicable precedent, the proposed transfer of the TMI-l license from GPU to AmerGen should be permitted.
j BACKGROUND:
On July 17,1998, AmerGen and GPU, Inc., the parent company of the various GPU companies licensed to own and operate TMI-1, entered into a Letter ofIntent to negotiate a Definitive Agreement for the acquisition of TMI-l by AmerGen. A definitive Asset Purchase Agreement among the parties is expected to be executed by mid-October,1998.
The closing of the transaction is scheduled to occur as soon as feasible in mid-1999, after all regulatory approvals are obtained.
AmerGen is a limited liability company formed to acquire and operate nuclear power 4
plants in the United States. AmerGen is organized under the laws of the State of Delaware pursuant to an Agreement among PECO Energy Company, a Pennsylvania corporation (PECO Energy), British Energy, plc, a Scottish corporation (British Energy),
and British Energy Inc. (BE Inc.), a Delaware corporation that is a wholly owned subsidiary of British Energy. Both PECO Energy and British Energy have more than twenty years of nuclear operating experience. PECO Energy is a member of the Institute of Nuclear Power Operations (INPO) and is the licensed operator of four nuclear reactors i
at the Limerick and Peach Bottom nuclear generating stations. It also owns 100% of the Limerick units,42.49% of the Peach Bottom units, and 42.59% of the two Salem units.
British Energy is the owner and operator of fifteen nuclear reactors at eight nuclear i
operating sites in the United Kingdom, and it participates in the World Association of 4
Nuclear Operators (WANO). British Energy generates approximately 21 percent of the electricity consumed in Great Britain.
TMl-1 is a commercial nuclear reactor licensed under Section 104b of the Act. Thus, AmerGen and GPU intend to request NRC's prior written consent to the transfer of this license pursuant to Section 184 of the Act and 10 CFR s 50.80. In connection with its 2
review and consent, NRC will need to review British Energy's interest in AmerGen, because Section 104d of the Act prohibits the NRC from issuing a Section 104 reactor license to any corporation or other entity "if the Commission knows or has reason to believe it is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government." The Commission is also prohibited from issuing a license to any person or entity if, in the opinion of the Commission, it would be " inimical to the common defense and security" to do so.
AmerGen is governed by a Limited Liability Company Agreement dated August 18,1997 (LLC Agreement). (Copies of the AmerGen LLC Agreement and Certificate of Formation are appended hereto.) There are two members of AmerGen, each of which has a fifty percent ownership interest in AmerGen. The two members are PECO Energy, a Pennsylvania corporation, and BE Inc., a Delaware corporation. The property, business, and affairs of AmerGen are directed and controlled by a Management Committee pursuant to Article 6.3 of the LLC Agreement. Under Article 6.l(a), PECO Energy, through the PECO Energy Member Group, appoints and may remove half of the members of the Management Committee, and BE Inc., through the BE Member Group, also has the power to appoint or remove half of the members. F Pursuant to Article 6.l(d), PECO Energy appoints the Chairman of the Management Committee, and the Chairman can only be removed by PECO Energy.
Michael J. Egan, a citizen of the United States and Chief Financial Officer of PECO Energy, is the Chairman of the Management Committee. Dickinson M. Smith, a citizen of the United States and the former Senior Vice President and Chief Nuclear Officer of PECO Energy, is the Chief Executive Officer (CEO) of AmerGen. Dr. Robin Jeffrey, FEng, a citizen of the United Kingdom and Deputy Chairman of British Energy, is the senior British Energy member of the Management Committee and the current President of AmerGen.
Significantly, under Article 6.3(b)(i) of the LLC Agreement, the Chairman has a casting vote to break a tie on the Management Committee regarding "all Safety issues," assuring 1/
At this time, BE Inc. is the only member of the BE Member Group, and PECO Energy is the only member of the PECO Energy. Member Group. Pursuant to the temis of Article 7 of the LLC Agreement, BE Inc. and PECO Energy may transfer all or part of their interests in AmerGen to their respective subsidiaries or affiliates, which would become admitted as members and part of their respective Member Group. In all cases, the PECO Energy Member Group will consist of U.S. corporate entities within the PECO Energy corporate family and all of the PECO Energy representatives on the Management Committee will be U.S. citizens.
3
that PECO Energy exercises control and domination over the NRC license for TMI-1.
" Safety issue"is defined in Article 1.7 of the LLC Agreement to include:
(i) implementation or compliance with any Generic Letter, j
Bulletin, Order, Confirmatory Order or similar requirement issued by the NRC; (ii) prevention or mitigation of a nuclear event or incident or the unauthorized release of radioactive material; (iii) placement of the plant in a safe condition following any nuclear event or incident; (iv) compliance with the Atomic Energy Act, the Energy Reorganization Act, or any NRC rule; (v) compliance with a specific operating license and its technical specifications; (vi) compliance with a specific Updated Final Safety Analysis Report, or other licensing basis document.
This dermition broadly includes all issues within thejurisdiction of the NRC and clearly includes all issues involving common defense and security as well as public health and safety. See. e.g., Section 104d of the Act; 10 CFR 50.40(c) (issuance of a license may not "be inimical to the common defense and security or to the health and safety of the public").
The CEO is responsible for the day-to-day operations of AmerGen. He is elected by the Management Committee and can only be removed by a majority of the Management Committee. If the Chief Nuclear Officer (CNO) is a person other than the CEO, the CNO will also be a U.S. citizen and will report directly to the CEO. All directors, officers, managers, supervisors and employees having custody or control of special nuclear material, having access to the restricted and vital areas, and/or having access to Restricted Data will have the necessary security clearances and access permits.
1 As contemplated by the Letter ofIntent, the current site personnel at TMI-l (approximately 700 employees) will be transferred to AmerGen from GPU Nuclear, Inc.
(GPUN), the GPU subsidiary licensed to operate TMI-1.2' These personnel will be augmented by qualified AmerGen employees and/or contractors. Thus, the vast majority 2/
AmerGen anticipates that PECO Nuclear, a division of PECO Energy with substantial and recognized technical expertise, will provide on-site and/or corporate support functions under contract with AmerGen. AmerGen also intends to take advantage of the technical expertise of British Energy, which may also provide contract services to AmerGen.
4 j
l of the current site personnel responsible for the operation and maintenance of TMI-l will continue to perform similar functions for AmerGen. In addition, AmerGen will have the opportunity to offer positions to selected GPUN headquarters staffin Parsippany, New Jersey, who will also be transferred to AmerGen and continue to provide corporate support services for TMI-1. In any event, the current corporate support functions provided in accordance with the TMI-l license, technical specifications and supporting documents, will either be transferred to the TMI-l site (where appropriate) or will be assumed by AmerGen. #
Although British Energy is a foreign entity, substantial weight should be given to the fact that British Energy is a corporate citizen of the United Kingdom, and, as such, its interest in AmerGen (indirectly through the 50% interest ofits U.S. subsidiary, BE Inc.) does not pose any national defense or security risk. The non-proliferation credentials of the United Kingdom cannot be seriously questioned, nor can its important foreign policy relationship with the United States. For example, the Department of Energy concluded in a 1987 Analysis that was also adopted by the Department of State, as follows:
The United Kingdom is a party to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), and is a longstanding ally of the United States, a member of NATO, and otherwise has an important foreign policy relationship with the United States. The Government of the United Kingdom is stable, militarily secure, supports the International Atomic Energy Agency (IAEA) safeguards, and adheres to the Nuclear Supplier's guidelines.
Proposed Agreement Between the United States and Japan Concerning Peaceful Uses of Nudear_ Energy, H.R. Doc. No. 100-128, at 398 (1987).
More recently, the Secretary of Energy reiterated a similar conclusion with respect to the European countries which are members of EURATOM, including the United Kingdom, in connection with her statutory finding that the advance consent arrangement in the agreement for cooperation with EURATOM is not " inimical to the common defense and security of the United States." O' Leary, H.R., Driennination and Judgment Under Section 131 of the Atomic Energy Act Regarding Advance Consent Arrangement in the Agreement for Cooperation in the Peaceful Uses of Nuclear Energy Between the 3/
At this time, AmerGen does not anticipate that there will be any unreviewed safety questions, reduction in effectiveness of the emergency and security plans, or reduction in quality assurance commitments in connection with the license transfer. Appropriate NRC approval will be sought if any changes subject to NRC approval are necessary or desirable.
5
European Atomic Energy Community and the United States of America (Sept. 8,1995).
The Secretary concluded:
1 l
The determination andjudgment [that the advance consent arrangement will not be inimical to the common defense and security] is also supported by J
i the strong nonproliferation credentials of the European Atomic Energy
]
Community and its member states, their adherence to the Treaty on the Non-Proliferation of Nuclear Weapons, their lack ofincentives to acquire i
nuclear explosive devices, by the close technical and economic ties between member states, and by the intimate and important relationships the United t
j States has with the European Atomic Energy Community and each ofits member states.
i.
British Energy is subject to the laws of the United Kingdom and the requirements of j
EURATOM. As such, the indirect participation in AmerGen by British Energy through its U.S. subsidiary does not pose a risk to the national defense and security of the United i
States, consistent with the purpose and requirements of Section 104d of the Act.
]
DISCUSSION:
1 Under Section 184 of the Act, no NRC license can be transferred "either voluntarily or j
involuntarily, directly or indirectly, through transfer of control of any license" to another i
party without the review and written consent of the NRC. 42 U.S.C. s 2234. Thus,
}
AmerGen requires NRC's prior written consent to its proposed acquisition of TMI-l and the proposed transfer of NRC Operating License No. DPR-50 for TMI-l from GPU to I
AmerGen.
j In connection with AmerGen's request for such consent, NRC will need to be satisfied j
that AmerGen is not " owned, controlled or dominated by an alien, a foreign corporation or a foreign government" and that the transfer is not " inimical to the common defense and security" of the United States. 42 U.S.C.A. & 2134(d). Section 104d of the Act j
provides:
i No license may be issued to any corporation or other entity if the Commission knows or has reason to believe it is owned, controlled, or
?
dominated by an alien, a foreign corporation, or a foreign government. In any event, no license may be issued to any person within the United States 4/
Section 103d of the Act contains a virtually identical provision. 42 U.S.C.A.
{2133(d).
6
if, in the opinion of the Commission, the issuance of a license to such person would be inimical to the common defense and security or to the health and safety of the public.
NRC's implementing regulations in 10 CFR 50.38 are consistent with this provision.
The prohibition against foreign ownership, control or domination of an NRC reactor licensee does not preclude a foreign curporation, or one ofits subsidiaries, from participation in a company that is an NRC licensee pursuant to Section 103 or 104 of the Act. For example, a foreign entity may own an interest in an NRC licensee which, in turn, actually owns and operates a reactor, and may also have contractual rights to participate in certain affairs of the NRC licensee. This question was first addressed in a 1966 Atomic Energy Commission (AEC) decision construing the fareign ownership, control, or domination provision of the Act. General Electric Company (GE) and Southwest Atomic _ Energy _ Associates (SAE A)(Southwest Experimental Fast Oxide Reactor (SEFOR)),3 AEC 99 (1966).
In SEFOR, an Atomic Safety and Licensing Board had initially granted a conditional construction permit to GE and SAEA for the SEFOR test reactor. 3 AEC 40,41 (1965).
The Licensing Board later suspended this construction permit on the grounds that a contract between SAEA and Gesellschaft fur Kernforschung (GFK), a non-profit association formed under the laws of the Federal Republic of Germany, violated the prohibition against foreign ownership, control, or domination contained in Section 104d of the Act. 3 AEC 96 (1966). The contract between SAEA end GFK provided that GFK J
would contribute 50% of the construction costs of the SEFOR reactor, participate in project review and technical policy committees, designate scientists and engineers to participate in the design and construction of SEFOR subject to the approval and direction of GE, and be consulted on matters of policy and questions affecting costs. On review, the Commission reversed the Licensing Board and reinstated the construction permit.
In construing Section 104d, the Commission reviewed the legislative history and found that "while sparse, [the legislative history] does establish that the criteria ' owned, controlled, or dominated' were substituted for a provision in the original bill which would have prohibited the issuance oflicenses to any corporation in which more than 5% of the voting stock was owned by alien." 11 at 101. The Commission noted that this substitution "was probably responsive to the criticism of several witnesses at the hearings" that large corporations would have difficulty knowing the real nationality ofits stockholders and that "the denial of a license be prescribed when actual control or domination was in alien hands." li (citing Legislative Historv of the Atomic Energy _of 19S, pp.1698,1861,1961-62,2098, and 2239). It is significant that when Congress 4
7
removed the 5% limitation in response to criticism that it was too restrictive, Congress did not impose any speci6c higher limitation, but rather left it to the Commission to decide what level of ownership or other form of foreign participation would constitute actual control or domination by an alien.
- In SEEOR, the Commission held that "the words ' owned, controlled or dominated' refer to relationships where the will of onegy_is subjugated to the will of another, and that the Congressional intent was to prohibit such relationships where an alien has the power to direct the actions of the licensee." 3 AEC at 101 (emphasis added). Under this bright line test, the British Energy interest in AmerGen complies with the requirements of Section 104d, as intended by Congress, because the power to direct actions with respect to safety and security issues, including any NRC orders or regulations, is clearly reserved to PECO Energy. The BE Member Group can only control 50% of the members of the Management Committee, which is insuf6cient to direct the actions of AmerGen, and the Chairman of the Management Committee, who can only be appointed or removed by PECO Energy and will always be a U.S. citizen, retains the specific power to cast the deciding vote on all Safety Issues, including issues involving common defense and security, public health and safety, and compliance with NRC requirements with respect to such matters.
The Commission's SEFOR decision emphasized that "[i]n context with the other provisions of Section 104d, the [ alien control] limitation should be given an orientation toward safeguarding the national defense and security." 3 AEC at 101. In this respect, the Commission was not concerned with GFK's contractual rights to designate scientists and engineers to participate in the design and construction of SEFOR, but rather focused on the fact that GFK had "no right or power to restrict or inhibit in any way compliance by [the licensees] with the security requirements of the Commission and its regulatory controls." li at 102. The Commission concluded that "[t]he ability to restrict or inhibit compliance with the security and other regulations of the AEC, and the capacity to control the use of nuclear fuel and to dispose of special nuclear material generated in the reactor, would be of greatest signi6cance."11 at 101. Notably, through its control over the Chairman and half the members of the Management Committee, PECO Energy retains control with respect to all security-related matters. Moreover, all directors, of6cers, managers, supervisors and employees having custody or control of special nuclear material, having access to the restricted and vital areas, and/or having access to Restricted Data will have the necessary security clearances and access permits.
51 Similar provisions in other regulatory statutes, such as the Federal Communications Act, contain a specific limitation on the maximum ownership interest in a U.S. licensee that can be held by foreign national (e.g.,20-25 percent). Legislative History, at 1968.
No similar such limitation was adopted in Sections 103d and 104d.
8
In Commonwealth Edison company (Zion Station, Units 1 and 2),4 AEC 231 (1969), the AEC affirmed the SEFOR decision's statement that the alien control issue should be "given an orientation toward safeguarding the national defense and security," 3 AEC at 101. The Commission observed that "it has been our licensing practice to deal with the matter of alien control within the context of the required finding that issuance of a construction permit will not be inimical to the common defense and security." 4 AEC at 233. As noted above, findings of the Secretaries of Energy and State have consistently recognized that the United Kingdom not only has strong nuclear non-proliferation credentials, but also has an important foreign policy relationship and close technical and economic ties to the United States. Thus, even a substantial interest by a U.K. company in a U.S. reactor licensed under Section 104d should not raise any defense or security concerns. This is particularly true when considered in light of PECO Energy's ongoing control over security and regulatory matters pursuant to the terms of the LLC Agreement.
In a 1973 case involving a level of foreign ownership interest that is identical to the level present here, the Commission consented to the transfer of Section 104 licenses" to a new entity which was 50% owned by foreign interests. The Commission authorized the Gulf Oil Corporation (Gulf) to transfer various nuclear facilities to a newly formed partnership, the General Atomic Company, that was 50% owned by Gulf and 50% owned by Scallop Nuclear, Inc., a Delaware corporation, whose shares were owned via several intemiediate corporations by Royal Dutch Petroleum, a Netherlands company, and Shell Transport and Trading, a British Company. (See Letter from Atomic Energy Commission to General Atomic Company, re: Approval of License Transfer (December 14,1973).) In approving these transfers, AEC imposed the following conditions to assure that there would not be foreign control over the operations and activities of the partnership:
(1) the president and any officers of the partnership having direct responsibility for the control, and any employees having direct custody of, special nuclear material must be U.S. citizens.
(2) a separate department of General Atomic must be responsible for special nuclear material, and the head of the department must report directly to the president.
(3) the president shall be charged with the responsibility and exclusive authority of ensuring that the business and activities of the partnership are at all times conducted in a manner consistent with the protection of the common defense and security of the United States.
(2/
The licenses transferred included three TRIGA research reactors and the Bamwell spent fuel reprocessing plant then under construction.
9
(4) the foregoing conditions apply to the partnership and any entities in which the partnership shall have voting control.
(5)
General Atomic will not change any of the foregoing conditions without approval of the Director of Regulation of the AEC or of the person holding any equivalent successor position with the Commission or its successor.
See " Legal Questions of Foreign Control and Domination Raised by Proposed Transfer of Facility Operating License No. R-81 from Union Carbide Subsidiary 'B', Inc. to Cintichem, Inc.," pages 7-8 (Attachment to letter dated September 22,1983, from N. J. Palladino to A. Simpson). The day-to-day operations of AmerGen are controlled by its CEO, and the nuclear organization reports directly to the CEO (through the CNO, if the CNO is a different person than the CEO). These U.S. Citizens (the CEO and CNO) will be charged with the responsibility and exclusive authority of ensuring that the business and activities of AmerGen with respect to the TMI-l license are at all times conducted in a manner consistent with the protection of the common defense and security of the United States. Thus, the conditions imposed in the General Atomics case are consistent with the commitments AmerGen will make in connection with its request for NRC consent to the transfer of the TMI-l license, even though in AmerGen's case its President is a British citizen.
In 1983, in response to a congressional inquiry, the NRC's Office of the Executive Legal Director (OELD) conducted an analysis of the statutory prohibitions on foreign ownership and control and the AEC/NRC case law in this area. " Legal Questions of Foreign Control and Domination Raised by Proposed Transfer of Facility Operating License No. R-81 from Union Carbide Subsidiary 'B', Inc. to Cintichem, Inc."
(Attachment to letter dated September 22,1983, from N. J. Palladino to A. Simpson).
This analysis was forwarded to Congress by the NRC Chairman with a cover letter discussing the proposed license transfer that had prompted the inquiry. It involved the proposed transfer of a license issued under Section 104b of the Act for an isotope-producing research reactor from a subsidiary of Union Carbide to Cintichem, Inc.,
a Delaware corporation whose ultimate parent was F. Hoffman-LaRoche and Co., Ltd., a Swiss Corporation. The Commission barred the transfer because it had reason to believe that the proposed transferee was 100% owned, controlled or dominated by an alien or a foreigr corporation. Having decided the matter on this ground, the Commission did not consider whether foreign ownership, control or domination of the licensee would be inimical to the common defense or security. Subsequently, special legislation was 10
_= --
,I i
enacted to allow the transfer to proceed, and NRC ultimately approved the transfer under conditions similar to those imposed in General Atomic, l' After the special legislation was passed with respect to Cintichem, NRC addressed the "not inimical to common defense and security" requirements of Section 104d under the unique circumstances presented there, where Congress had authorized 100% foreign ownership, and the accompanying foreign control and domination over this particular licensee. Thus, NRC imposed additional conditions: (1) all of the directors of Cintichem i
had to be U.S. citizens unless otherwise approved by the NRC; (2) any actions by Switzerland or changes in Swiss law which would affect ownership or control of Cintichem had to be reported immediately to the NRC; and (3) only individuals with security clearances would be permitted to have access to Restricted Data.
J The Cintichem and General Atomic cases make clear that: (a) Sections 103d and 104d of the Act do not preclude foreign participation in U.S. nuclear reactor facilities, including foreign ownership of up to 50% of a reactor licensee, provided that appropriate license
~
conditions are imposed to ensure that foreign participants do not control or dominate the licensee with respect to matters affecting the public health and safety or common defense and security; and (b) license conditions imposed to satisfy the Act's prohibitions on 4
j foreign ownership, control and domination will generally satisfy the related NRC fmding 4
that the transfer to the new licensee is not inimical to the common defense and security.
CONCLUSIONS:
As discussed above, the proposed acquisition of TMI-l by AmerGen and transfer of the TMI-l license from GPU to AmerGen is consistent with the statutory requirements relating to foreign ownership, based upon the following facts:
(a)
AmerGen is a U.S. company; (b)
British Energy, through its U.S. subsidiary, will not hold more than a 50% ownership interest AmerGen or appoint more than half of the members of AmerGen's Management Committee; 2/
Congress added a rider to the NRC's 1984 Authorization Bill permitting the NRC to transfer this2pecific license to an entity owned or controlled by a foreign corporation if: (a) the NRC could fmd that the transfer would not a mimical to the common defense and security, and (b) the license included such conditions as the NRC deemed necessary to ensure that the foreign corporation could not direct the actions of the licensee in ways that would be inimical to the common defense and security. This provision was enacted into law. P.L. 98-55, @ 109 (1984).
11
i.
l' (c)
British Energy will not control or dominate the AmerGen Management Committee, but rather PECO Energy will exercise control and domination over all security and regulatory matters through its power to appoint and remove the Chairman and half the members of the Management Committee, who will be U.S. citizens; i
(d) the Chief Executive Officer and Chief Nuclear Officer (if someone other than the CEO) will be U.S. citizens, charged with the 4
responsibility and exclusive authority of ensuring that the business and activities of AmerGen with respect to the TMI-l license are at all times conducted in a manner consistent with the protection of the common defense and security of the United States; l
(c) all directors, officers, and employees having custody or control of special nuclear material, having access to the restricted and vital areas, and/or having access to Restricted Data will have the necessary security clearances and access permits; and 4
l l
(f)
British Energy participates in WANO and is a corporate citizen of the United Kingdom which is an ally of the United States, has strong nuclear non-proliferation credentials, has close technical and economic ties to the United States, and otherwise has an important j
foreign policy relationship with the United States.
i 12
)._ (A f, 6
PAGE 1
State of Delaware 3
Office of the Secretary of State I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF LIMITED LIABILITY COMPANY OF "AMERGEN ENERGY COMPANY, L.L.C.",
FILED IN THIS OFFICE ON THE FOURTEENTH DAY OF AUGUST, A.D.
1997, AT 12 O' CLOCK P.M.
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i{.,
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\\.'_ _ ll Edward J. Freet, Secretary of State u.v 2785244 8100 AUTHENTICATION:
8606492
^
971272213 08-14-97
i CERTIFICATE OF FORMATION OF AMERGEN ENERGY COMPANY, L.L.C.
This Certificate of Formation of AmerGen Energy Company, L.L.C., is being executed and filed by PECO Energy Company as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act (6 Del C.
Section 18-101, et sec.)
1.
The name of the limited liability company is AmerQ'en F,nergy Company, L.L.C.
i 2.
The address of its registered office in the State of Delawaie is clo Corporation Trust Center,1209 Orange Street, in the City of Wilmington, County of New Castle.
3.
The name and address of its registered agent for service of process on the L.L.C. in the State of Delaware is The Corporation Trust Company,1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of AmerGen Energy Company, L.L.C. this 14* day of August,1997.
PECO Energy Company 1
By.
s...
~ - - - -
Edward J.
- ullen, r.,
Assistant Se and Organizer of AmerGen Energy Company, L.L.C.
95695v02