ML20202H683
| ML20202H683 | |
| Person / Time | |
|---|---|
| Site: | Pilgrim |
| Issue date: | 01/28/1999 |
| From: | Alexander J BOSTON EDISON CO. |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| References | |
| BECO-LTR-2.99.0, NUDOCS 9902080191 | |
| Download: ML20202H683 (19) | |
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Pilgrim Nuclear Power Station Rocky Hill Road Plymouth, Massachusetts 02360-5599 I
REDACTED VERSION January 28,1999 BECo Ltr. 2.99.009 Entergy Ltr. ENGC 99-01 U.S. Nuclear Regulatory Commission Pilgrim Nuclear Power Station Attention: Document Control Desk Docket Number 50-293 Washington, DC 20555-0001 License Number DPR-35 1
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Subject:
Boston Edison Company and Enterov Nuclear Generation Company Transfer of FaWy Operating License and Materials License, and Proposed License Amendment
References:
- 1. BECo Ltr. 2.98.163 (Entergy Ltr. ENGC 98-01),
dated December 21,1998. TAC NO. MA4447.
- 2. NRC Ltr. 1.99.002, dated January 22,1999.
Dear Sir.
In Reference 1, Boston Edison Company (Boston Edison) and EntNyy Nuclear Generation Company (Entergy Nuclear) requested the transfer of the Pilgrim Nuclear Power Station Facility Operating License DPR-35 and NRC Materials License 20-07626-04 from Boston Edison to Entergy Nuclear. Boston Edison and Entergy Nuclear requested the NRC review cf the application on a schedule that would permit issuance of an order consenting to the transfer as promptly as possible to support a closing date of March 31, 1999. Boston l
Edison and Entergy Nuclear also requested that the conforming license amendments be issued to become effective upon closing. This letter does not change the aforementioned requests. Boston Edison and Entergy Nuclear are maintaining close communication with the NRC staff to facilitate coordination among all affected agencies.
In Reference 2, the NRC requested additional information regarding financial and technical qualifications of Entergy Nuclear. The requested information is provided in the Enclosure to this letter.
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This letter contains information that expands on previous information provided in Reference 1 of which portions were requesud to be withheld from public disclosure pursuant to 10 CFR 2.790(a)(4) and 10 CFR 9.17(a)(4). The Affidavit in support of this request was Mp) included in Reference 1.
Thereicre. there are redacted and non-redacted versions of of this submittal. The shaded portions of the Enclosure signify the information be8re requested to be withheld from public disclosure and the information that has been i
reda.:.aad. The shaded portions of Enclosure 1 Attachment B (organizational charts sheets 2 and 3) are not being requested to be withheld from public disclosure.
9902000191 996128 7 PDR ADOCK 05000293 P
1 Boston Edison Company Docket 50-293 Entergy Nuclear Generation Company License No. DPR-35 i
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i Please feel free to contact Mr. Jack Alexander at Pilgrim (508) 830-8269 or Ms. Connie Wells at Entergy Nuclear (601) 368-5345 if you have any questions or require any additional information regarding this request.
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clear Assessment Manager Enclosure Distribution: see ned page DWE/
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Boston Edison Comp ny Docket 50-293 Entergy Nuclear Generation Company License No. DPR-35
' cc: (non-redacted version w/ enclosures)
Mr. Alan B. Wang, Project Manager Mr. Hubert J. Miller Project Directorate 1-3 Region i Administrator Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Mail Stop: OWFN 14B20 Region i 1 White Flint North 475 Allendale Road 11555 Rockville Pike King of Prussia, PA 19406 Rockvi!Je, MD 20852 (10 copies)
Senior Resident inspector Pilgrim Nuclear Power Station cc: (redacted version w/ enclosures)
U.S. Nuclear Regulatory Commission Attention: Document Control Desk Washington, DC 20555-0001 cc: (redacted version w/anclosures)
Mr. Robert Hallisey Mr. Peter LaPorte, Director Radiation Control Program Mass. Energy Management Agency Center for Communicable Diseases 400 Worcester Road Mass. Dept. of Public Health P.O. Box 1496 305 South Street Framingham, MA 01701-0313 Jamaica Plain, MA 02130 l
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Boston Edis:n Comp ny Docict 50-293 Entergy Nuclear Generation Company License No. DPR-35 ENCLOSURE 1 l
Response to request for additional information (NRC Ltr.1.99.003) 1
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l Boston Edison Comp::ny Docket 50-293
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Entergy Nuclear Generation Company License No. DPR-35 I'
Question 1: What year did Entergy Nuclear come into existence?
l Entergy Nuclear Generation Corporation (Entergy Nuclear) was formed in 1998.
Question 2: [ Reference 1] Enclosure 1, Section li.F. Projections of various financial Information should be expanded to include (on the income statement) other expenses l
(e.g. depreciation and amortization, interest, etc., down to not income or loss for each of the projected five years.)
l Please see the expanded income statement below-l
($000s) l 1999 2000 2001 2002 2003 2004 Power Sales - Contract 126,180 200,874 175,490 164,014 95,810 124,806 Power Sales - Market 0
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Total Revenue 126,180 200,874 175,490 Operation & Maintenance
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Fuel Depreciation Administrative & Other Total Operating Expenses
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Operating Profit
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interest Expense 4
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l Income Taxes
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j Net income /(Loss) j in the original projection contained in Enclosure 1 to the December 21,1998 application, i
depreciation expense was included in the line item " Administrative & Other" In the above table, " Administrative & Other" includes administrative expensos, fringe benefits, payroll taxes, and ad valorem taxes.
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Boston Edison Company Docket 50-293 i
Entergy Nuclear Generation Company License No. DPR-35 l!'
l Additional information also needs to be provided on Entergy Nuclear's c.ipital j
structure. Thus, a pro forma projected balance sheet should be provided that includes detailed information on debt and equity, including retained earnings, etc.
l Please see the projected balance sheet below:
Projected Balance as of December 31 ($000s) 1999 2000 2001 2002 2003 2004 ASSETS:
Cash Accounts Receivable
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Fuel
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Inventory l
Land Net Plant l
3 Decommissioning Fund l
Total Assets l
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LIABILITIES:
l Accounts Payable i
Accum. Def. income Tax
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Decommissioning Total Liabilities l
EQUITY:
Common Stock
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Retained Eamings
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4 Total Equity l
Total Liabilities & Equity
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i The balance sheet projections noted above are based on assumptions resulting from the P&S agreement and are subject to any closing adjustments.
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Boston Edis:m Company Dockst 50-293 Entergy Nuclear Generation Company License No. DPR-35 j
- Question 3: [ Reference 1] Enclosure 1, Section ll.K. What provision is Entergy Nuclear j
making for decommissioning costs that exceed current estimates by greater than assumed inflation rate? Also, what will be the source of funds to cover non-NRC-4 defined decommissioning costs pursuant to the "Entergy Calculation" on page 9 of
,. Is the purpose of the " provisional trust" to provide assurance for such 4
2 costs?
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l According to 10 CFR 50.75 (e)(1)(i), "a licensee may take credit for projected eamings on 1
the prepaid decommissioning t ust funds using up to a 2 percent annual real rate of retum j
from the time of future funds' collection through the projected decommissioning period." In calculating the amount required for prepayment ($466 million), Entergy Nuclear was conservative in assuming a real growth rate as identified in Reference 1, Enclosure 1, J
l page 9. Entergy Nuclear will be solely liable for decommissioning upon closing. Any additional funds required will be provided through a parent, associate or affiliate company guarantee, letter of credit or similar financial arrangement. However, Entergy Nuclear l
expects to mitigate any inflation rate risk through efficiencies and cost improvernents j
realized in the decommissiorJng process.
4 The amount Entergy Nuclear will receive from Boston Edison at closing is based upon an l
independent estimate for future decornmissioning costs. This estimate includes the cost of i
i removal and disposal of spent fuel and non-radioactive structures and materials beyond that necessary to terminate the NRC license.
l The purpose of the provisional trust is not to provide assurance for non-NRC-defined
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decommissioning costs. Rather, the purpose is to set aside a portion of the pre-paid decommissioning amount that is subject to be refunded by Entergy Nuclear to Boston Edison should changes in the tax qualification status of the fund occur after closing. A j
favorable change in the tax qualification status would increase the after-tax eamings rate on j
the fund, thereby reducing the required initial pre-payment.
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Question 4: With the publication of NUREG-1307, Revision 8, " Report on the Waste i
Burial Charges," the NRC minimum decommissioning cost formula amount is likely to i
be reduced for those nuclear plants using Barnwcil fw low-level waste disposal, including Pilgrim. What is the impact of Revision 8 on Entergy Nuclear's calculations l
and the amount to be transferred from Boston Edison to Entergy Nuclear for decommissioning funds?
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There is no impact on the amount to be transferred from Boston Edison to Entergy Nuclear for decommissioning. The amount Entergy Nuclear will receive from Boston Edison at s
j closing is based upon an independent estimate for future decommissioning costs. This j
amount is greater than the revised NRC minimum amount ($327 million, using NUREG-1 1307, Revision 8, waste vendor rate) due to the inclusion of the cosi to remove and dispose l
l of spent fuel and non-radioactive structures and mate"als beyond that necessary to J
terminate the license and the inclusion of contingency.
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Boston Edson Comp:ny Docket 50-293 Entergy Nuclear Generation Company License No. DPR-35 t
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Question 5: Please provide a flow chart indicating the relationship of the various Entergy subsidiaries and companies under the Entergy Corporate umbrella.
Please refer to Attachment B for the organizational charts.
Question 6: Describe the new corporate level management and technical support structure for the integrated management of activities that support the operation of the i
facilky.
As documerged in Reference 1, Boston Edison Company (Boston Edison) and Entergy Nuclear Generation Company (Entergy Nuclear) entered into a Purchase and Sale Agr6ement on November 18,1998, in which Entergy Nuclear will purchase the Pilgrim Nuclear Power Station (Pilgrim). Entergy Nuclear is an indirect wholly owned subsidiary of Entergy Corporation. Entergy Corporation has gained a high level of experience operating and maintaining nuclear power plants through its subsidiary, Entergy Operations, Inc. (EOl) i which has responsibility for five nuclear units: Arkansas Nuclear One - Units 1 and 2, Grand Gulf Nuclear Station, River Bond Station, and Waterford Steam Electric Station - Unit 3.
As part of the pending sale, the Entergy Nuclear Board of Directors has elded and appointed Mr. Mike Bellamy Vice President - Operations for Pilgrim. The current Pilgrim Vice President Nuclear and Station Director will report to Mr. Bellamy. Mr. Bellamy, who will be located at the Pilgrim site, will report directly to Mr. Jerry Yelverton, President and Chief Executive Officer (CEO), Entergy Nuclear.
The Vice President - Operations is responsible for implementing all activities associated with the safe and reliable operation of Pilgrim. The President & CEO, Entergy Nuclear is responsible for providing top level direction of all activities associated with the safe and reliable operation of Pilgrim.
In addition to his position with Entergy Nuclear, Mr. Yelverton holds several other positions within Entergy Corporation. These include: President and CEO, EOl; President and CEO, Entergy Nuclear, Inc. (ENI); and Executive Vice President and Chief Nuclear Officer (CNO),
Entergy Services, Inc. (ESl). Through his positions within ENI and ESI, Mr. Yelverton is able to apply Entergy's resources to ensure Pilgrim operates safely and efficiently.
Upon close of the sale most, if not all, Boston Edison employees located at the Pilgrim site and a number of corporate 6mployees will become employees of Entergy Nuclear. These include the various plant staff (e.g., Operations, Maintenance) and support organizations (e.g., Engineering, Business Services). The corporate support functions currently provided by Boston Edison (e.g. Human Resources, Accounting) will be transitioned to the responsibility of Entergy Nuclear upon close of the sale.
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I Boston Edison Comp ny Dock;t 50-293 Entergy Nuclear Generation Company License No. DPR-35 i
Question 7: Describe the management controls and lines of communication and authority between the new corporate management and the existing plant organizational units involved in the day-to-day operations of the facility.
Currently, all plant staff departments (e.g. Operations, Maintenance, Chemistry, etc.) report to the Vice President Nuclear and Station Director. With the purchase of Pilgrim by Entergy Nuclear, the plant operating organizations (e.g. Operations, Maintenance, Chemistry, Radiation Protection, etc.) will continue to report to the Vice President Nuclear and Station Director as described above in the response to question 6.
The President and CEO, Entergy Nuclear will be responsible for providing top level direction of all activities assodated with the safe and reliable operation of Pilgrim. The Vice President
- Operations will be responsible far implementing all activities associated with the safe and reliable operation of Pilgrim. These include, but are not limited to:
- a. Establishing policies, goals, and objectives, implementing and maintaining the quality assurance program, and overseeing activities of the associated off-site safety review committee.
- b. Providing engineering services.
The reporting and communication chain from Pilgrim through the Vice President -
Operntions to the President, Entergy Nuclear allows Pilgrim access to additional Enterty resources that may be needed to support plant operation.
Question 8: Describe the specific educational and experience background for the new corporate management.
Please refer to Attachment A that contains the resumes for Messrs. Bellamy and Yelverton.
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Boston Edis n Comp:ny Dockst 50-293 Entergy Nuclear Genuation Company License No. DPR-35 4
Al. ACHMENT A i
Resumes of Jerry W. Yelverton and Robert M. Bellamy e
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i Boston Edis:n Company Docket 50-293 l
Entergy Nuclear Generation Company License No. DPR-35 l
l Jerry W. Yelverton As of January 1999, Jerry W. Yelverton holds various executive positions within Entergy, Inc.'s nuclear companies. These include:
President and Chief Executive Officer (CEO), Entergy Nuclear Generation Company President and CEO, Entergy Nuclear, Inc.
President and CEO, Entergy Operations, Inc.
President and CEO, System Energy Resources, Inc.
Executive Vice President and Chief Nuclear Officer (CNO), Entergy Services, Inc.
In his various roles within the Entergy organization, Mr. Yelverton is responsible for the management, operation, and support of Entergy's five nuclear units at four sites:
Arkansas Nuclear One - Units 1 and 2 Grand Gulf Nuclear Station, River Bend Station, and Waterford Steam Electric Station - Unit 3.
Mr. Yelverton is a graduate of Texas A&M University,with a Bachelor of Science degree in nuclear engineering. He served as a specialist,5 class, in the U. S. Army Corps of Engineers for two years.
Mr. Yelverton began his utility career in 1973 with Bechtel Power Corporation, serving in various quality assurance positions at Grand Gulf. He joined the Entergy system in 1979 as Nuciaar Site Quality Assurance Manager at Grand Gulf. Mr. Yelverton has held a number of management positions there, including Refueling Outage Director and Manager - Plant Operations. In 1983, he samed a Senior Reactor Operator license at Grand Gulf.
In 1990, Mr. Yelverton was named General Manager-Plant Operations at Arkansas Nuclear One and in 1992 he was promoted to site Vice President - Operrations. In 1996. Mr. Yelverton was named Executive Vice President and Chief Operating Officer (COO), Entergy Operations, Inc. and in August 1998, he was named President and COO, Entergy Nuclear, Inc.
Education and Qualifications Texas A&M University-BS, Nuclear Engineering Senior Reactor Operator license at Grand Gulf Nuclear Station - 1983 Advanced Management Program, Harvard Business School-Fall,1998 2
1 Boston Edison Company Docket 50-293 Entergy Nuclear Generation Company License No. DPR-35 i
Employment History with Entergy January,1999 to present Director, President and CEO of:
Entergy Nuclear, Inc.
Entergy Nuclear Generation Company Entergy Operations, Inc.
l System Energy Resources, Inc.
Director of:
System Fuels, Inc.
GSG&T, Inc.
Prudential Oil & Gas, Inc.
j Southem Gulf Railway Company Varibus Corporation Executive Vice President and CNO Entergy Services, Inc.
i August,1998 President & COO Entergy Nuclear, Inc.
1996 - 1998 Executive Vice President and COO l
Entergy Operations, Inc.
1992 - 1996 Vice President - Operations, Arkansas Nuclear One Entergy Operations, Inc.
1990 - 1992 General Manager-Plant Operations, Arkansas Nuclear One Entergy Operations, Inc.
1988 - 1990 Manager-Plant Operations, Grand Gulf Nuclear Station Entergy Operations, Inc.
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1987 - 1988 Refueling Outage Director, Grand Gulf Nuclear Station Entergy Operations, Inc.
l 1986 - 1987 Technical Assistant to the Manager-Plant Operations Grand Gulf Nuclear Station j
Entergy Operations, Inc.
1985 - 1986 Senior Reactor Operator training, Grand Gul1 Nuclear Station i
Entergy Operations, Inc.
1983 - 1985 Manager-Plant Support, Grand Gulf Nuclear Station Entergy Operations, Inc.
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Boston Edison Comp:ny Docket 50-293 Entergy Nuclear Generation Company License No. DPR-35 Previous Employment 1979 - 1983 Nuclear Site Quality Assurance Manager Grand Gulf Nuclear Station Entergy Operations, Inc.
i 1976 - 1979 Quality Assurance positions at Grand Gulf Nuclear Station 1
j Bechtel Power Corporation
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1973 - 1976 Procurement inspection Supervisor Bechtel Power Corporation 1971 - 1973 Student Texas A&M University 1
1970 - 1971 Procurement inspector Bechtel Power Corporation 1967 -1968 Pressure vessel designer Bechtel Power Corporation i
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Boston Edison Comp:ny Dockst 50-293 Entergy Nuclear Generation Company License No. DPR-35 RoLA M. Bellamy Robert M. (Mike) Bellamy has been named Vice President - Operations R the Pilgrim Nuclear Power Station. Mr. Bellamy has over 20 years of experience in the nuclear industry serving in senior management positions at five nuclear units, including engineering superintendent, quality assurance manager, startup manager, and plant manager. During his tenure as plant manager of Georgia Power Company's Vogtie unit, the plant achieved notable operations performance sad exemplary ratings from regulatory agencies.
Mr. Bellamy eamed a Bachelor of Science degree in electrical engineering from Tennessee Technological University. He holds a professional engineering license in Georgia and eamed a Senior Reactor Operator instructor :ertificate.
Prior to joining Entergy in 1996, Mr. Bellamy was a senior manager at Tennessee Valley Authority where he was responsible for the development of project plans and budget controls. He has also served as president and CEO of a consulting company that provided contract personnel to nuclear power plants.
Education and Qualificationa Tennessee Technoic;ica. University - BS in Electrical Engineering Georgia State University - MBA course work Senior Reactor Operator instructor Certificate - 1984 Professional Engineering License - State of Georgia Employment History October 1996 -
Director-Site Support, River Bend Station January 1999 Entergy Operations, Inc.
1994 - 1996 Program Manager, Sequoyah Nuclear Plant Tennessee Valley Authority 1991 - 1994 Startup Manager, Watts Bar Nuclear Plant Tennessee Valley Authority 1989 - 1991 President and Chief Executive Officer American Engineering & Technical Associates 1987 - 1989 Plant Manager, Vogtle Nuclear Plant Geoigia Power Company 5
Boston Edison CompIny Dockr,t 50-293 Entergy Nuclear Generation Company License No. DPR-35 1987 General Manager-Quality Assurance, Vogtle Nuclear Plant Georgia Power Compa 1y 1983 - 1987 Startup Manager, Vogtle Nuclear Plant Georgia Power Company j
1979 - 1983 Engineering Superintendent, Vogde Nuclear Plant Georgia Power Com,ntny 1975 - 1979 Engineering Su'pervisor/ Engineer E.1. Hatch Nuclear Plant-und 2 Georgia Fower Coritpany 1970 - 1975 Co-Op Student, Marketing and Distribution departments i
Georgia Pcwer Company I
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Boston Edison Comp ny Docket 50-293 Entergy Nuclear Generation Company Ucense No. DPR-35 ATTACHMENT B Organizational Charts l
Sheet 1 (Entergy Corporation and its Regulated Subsidiaries) i Sheet 2 (Entergy Nonregulated Subsidiaries)
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