ML20199J795
| ML20199J795 | |
| Person / Time | |
|---|---|
| Site: | Beaver Valley |
| Issue date: | 01/23/1998 |
| From: | NRC (Affiliation Not Assigned) |
| To: | |
| Shared Package | |
| ML20199J778 | List: |
| References | |
| NUDOCS 9802060038 | |
| Download: ML20199J795 (3) | |
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UNITED STATES y
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NUCLEAR REGULATORY COMMISSION I e WASHINGTON, D.C. 3o666-0001
.....,8 SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION REGARDING PROPOSED MERGER DUOVESNE LIGHT COMPANY
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DOCKET NOS. 50-334 AND 5Q-112 j
BEAVER VALLEY POWER STATION. UNIT N05. 1 AND 2 1
1.0 INTRODUCTION
Under cover of a letter dated August 1, 1997, nuquesne Light Company (DLC),
requested the consent of the Nuclear Regulatory Commission (NRC) in connection with a proposed merger of the parent of DLC and Allegheny Power Systems, Inc.
DLC, a wholly owned subsidiary of DQE, Inc., owns a 47.50% interest in Beaver Vallcy Power Station, Unit No. 1 (BVPS-1) and a 13.74% interest in Beaver Valley Power Station, Unit No. 2 (BVPS-2).
Under the proposed merger of DQE, Inc. and Allegheny Power System, Inc., DLC will become an indirect subsidiary of Allegheny Power System, Inc., which will chnge its name to Allegheny Energy. Inc. (Allegheny Energy). The merger agreement provides that DQE, Inc, common stockholders will be entitled to exr'
,e each DQE, Inc. share for 1.12 shares of Allegheny Energy stock.
After the merger, DLC will continue to be a public utility providing the same utility services as it did immediately p.eceding the merger. DLC will continue to be a lic.nsee for BVPS-1 and JVPS-2. No direct transfer of the operating licenses or interests in the units will result from the proposed merger.
The technical management and nuclear organization of DLC currently responsible for operating and maintaining BVPS-1 and BVPS-2 will remain rer.ponsible for the plaats' operation and maintenance after the merger.
Approval fr.r the indirect transfer of the licenses to the extent effected by the proposed merger is being sought from the NRC pursuant to 10 CFR 50.80.
Pursutnt to 10 CFR 50.80, the NRC may approve the transfer of the control of a license after notice to interested persons.
Such approval is contingent upon the NRC's determination that the holder of the license following the transfer of control is qualified to hold the license, and the transfer is otherwise consistent with applicable provisions of law, regulations, and orders of the NRC.
2.0 FINANCIAL 00ALIFICATIONS DLC will continue as an owner operator of BVPS-1 and BVPS-2 (47.50% and 13.74%
ownership intereste, respectively), and will remain an electric utility engaged in the generation and distribution of electricity for wholer. ale and retail markets, the cost of which electricity is recovered through rates established by separate regulatory authorities.
9802060038 980123 PDR ADOCK 05000334 P
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' DLC's application state 2 that the proposed merger will have no effect on the funds available for DLC to carry out activities under the operating licenres.
The Federal Energy Regulatory Commission will still regulate DLC's wholesale electric rates, and the Pennsylvania Public Utility Commission will also maintain jurisdiction over the licensee's retail electric rates.
In addition, the application states that the proposed merger will.have no effect on DLC's
_ capital structure or capital costs and will not result in any change in DLC's wholesale-or retail rates. Moreover, there will be no change in DLC's source of funds ~ for operating costs and eventual decosmiissioning costs for BVPS 1 and BVPS-2.- As an electric utility, DLC is exempt from further financial qualifications review, pursuant to 10 CFR 50.33(f).
However, in view of the NRC's concern that a merger or restructuring can lead to a diminution of assets necessary for the safe operation and eventual
" decommissioning of a licensee's nuclear power pla tn, the NRC's practice has been to-condition respective license transfer approvals upon a requirement that the licensee not tunsfer significant assets from the' licensee to an affiliate without notifying the NRC. This requirement assists the NRC in assuring that a licensee will continue to maintain adequate resources to-contribute to the safe operation and decommissioning of its facility. Thus, the following should be made a condition of the Order approving the application regarding the proposed merger and restructuring whereby DLC will become an indirect subsidiary of Allegheny Energy:
DLC shall provide the Director of the Office of Nuclear Reactor
_ Regulation a copy ofc any application, at the time it is filed, to transfer (eycluding grants of security interests or liens) from DLC to its-first-or second-tier parent, or to any ott.er-affiliated company.-facilities for the production, transmission, or distribution of oNetric energy having a depreciated book value exceeding ten parcent_(10%) of DLC's.consolidited net utility plant, as recorded on DLC's books of accounts.
'3.0 TECHNICAL QUALIFICATI0RS-DLC has stated in its application'that the proposed merger will not change the
, technical, qualifications of DLC to operate and maintain BVPS-1 and BVPS-2.
The utility will continue to exist as a separate entity that will function in the same fashion as it did befora the proposed merger..0LC's technical management and nuclear organization will continue unchanged. Accordingly, the C,
, proposed ~ merger will not aff t.ct the-technical' qualificat1ons of DLC.
4.0 &HTITRUST' Section 105c of the Atomic Energy Act of.1954, as amended (the Act), which
-requires thr NRC to conduct antitrust reviews, applies to an application for a license to construct or operate'a facility licensed under Section 103 of the j
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BVFS-1 was licensed under Section 104b and, as a result, is not-subject
% O antitrust review by the NRC staff in connection with consideration of tne..; plication regarding the proposed merger.
Furthermore, although Allegheny Energy may become the second-tier holding company of a licensee for BVPS-2, i.e., may indirectly acquire control of the BVPS-2 license, the application does not indicate that Allegheny Energy will 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.
American Municipal Power-Ohio, Inc. (AMP-Ohio) filed comments dated
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November 7, 1997, relating to the proposed mergsr, but that are specific to the antitrust license conditions contained in the license for the Perry Nuclear Power Plant, Unit 1 (PNPP). These coments will be addressed in the safety evaluation for PNPP_concerning the subject merger and indirect tr?.nsfer of the PNPP license.
5.0 FOREIGN OWNERSHIP. C0NTROL. OR DOMINATION The licensee indicated in its application that after the proposed merger, DLC will not be owned, controlled, or dominated by an alien, foreign corporation, or foreign government. The NRC staff does not know or have reason to believe that consumation of the proposed merger will result in DLC being owned, controlled, or dominated by foreign interests.
6.0 C_0NCLUSIONS In view of the foregoing, the NRC staff concludes that the proposed merger of Allegheny Power System, Inc. and DQE, Inc. will not adversely affect the financial or technical qualifications of DLC with res decomissioning of the BVPS-1 and BVPS-2 facilities. pect to the operation and Also, there do not appear to be any problematic antitrust or foreign ownership considerations ielated to the BVPS-1 and BVPS-2 licenses that would result from the proposed merger. Thus, the proposed merger will not affect the qualifications of DLC as a holder of the licenses, and the transfer of control of the licenses, to the extent effected by the proposed merger, is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Comission. Accordingly, with the condition discussed above relating to significant asset transfers, the NRC should approve the application regarding the proposed merger.
Prine.ipal Contributor:
M. A. Dusaniwskyj Date:
January 23, 1998 D
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