ML20203B572

Redacted Application for Amend to License DPR-35, Transferring FOL & Matls License 20-07626-04 from Boston Edison to Entergy Nuclear

ML20203B572
Person / Time
Site:	Pilgrim
Issue date:	02/05/1999
From:	BOSTON EDISON CO.
To:
Shared Package
ML20203B556	List: ML20203B553 ML20203B572
References
NUDOCS 9902100352
Download: ML20203B572 (15)

Text

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-" Bost;n Edison Comp:ny

, , Doc'.N 50-293 Ent:rgy Nuciter Gantration Comptny - License No. DPR-35 1

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i ENCLOSURE 1 1

i Application For Transfer of Facility Operating License and NRC Materials License i

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i 9902100352 990205 l PDR ADOCK 05000293 2 P PDR .A l

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i k , , Bost:n Edison Compiny - . Dockat 50-293

. EntIrgy Nuclerr Gin rcti:n Compiny License No. DPR-35

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Enclosure 1 i.'

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Apolication For Transfer Of Facility Operatina License and NRC Materials License i

i Pursuant to 10 CFR 50.80, the Boston Edison Company (Boston Edison) and Entergy Nuclear Generation Company (Entergy Nuclear) hereby apply for a transfer of Facility 1 Operating License No. DPR-35, and Materials License No. 20-07626-04 from Boston  !

Edison to Entergy Nuclear. Boston Edison and Entergy Nuclear also request  !

conforming amendments to Facility Operating License No. DPR-35 to delete references -  !

to Boston Edison and to authorize Entergy Nuclear to possess, use and operate the l Pilgrim Nuclear Power Station (Pilgrim), including Materials License 20-07626-04, under. I the same conditions and authorizations included in the current licenses.

Marked pages showing the requested changes to the licenses, as well as clean printed pages of the Facility Operating License, are provided as Attachment A to this l enclosure. Marked pages showing the requested changes to the Technical i Specifications, as well as clean printed pages, are provided as Attachment B to this  !

enclosure. Attachment C provides the evaluation showing that these amendments raise no significant hazards considerations as required by 10 CFR 50.92(c).

Administrative changes to documents other than the Facility Operating License, NRC '

Materials License, and Technical Specifications will be required by the sale of Pilgrim. ,

Changes to those documents that are related to the Facility Operating License, such as l the Updated Final Safety Analysis Report, Physical Security Plan, Emergency Plan,  !

etc., will be achieved during periodic or routine licensing correspondence or updates +

required by NRC regulations, such as 10 CFR 50.71(e). Changes to documents such as procedures, drawings, and manuals will be achieved during intemal periodic or routine processes applicable to those documents. Changes to documents such as licenses, permits and certificates will be achieved during periodic or routi.m applications to federal, state, and local govemment agencies such as the Federal Communications Commission (communications licenses), Commonwealth of Massachusetts (e.g.,

elevator permits), and the Town of Plymouth (e.g., fossil fuel storage permits). Such changes are mentioned only in recognition that changes, mostly changes in owner name, to documents other than those in the proposed amendments will likely be required. Such changes, however, are collatert' to the transfer of the licenses and the proposed amendments.

1. Background The sale and transfer of Pilgrim is being undertaken by Boston Edison as part of the divestiture of all of its generating assets consistent with the restructuring of the electric utility industry occurring in Massachusetts.

Boston Edison became a wholly-owned subsidiary of BEC Energy, a Massachusetts business trust as a result of a corporate restructuring in 1997. As a result, Boston Edison continued to be the sole owner and operator of Pilgrim, and remained an electric utility as defined in 10 CFR 50.2. Also as a result of the corporate restructuring, Boston Edison requested consent for the indirect transfer of control of Boston Edson's

. interest in the Pilgrim Facility Operating License in a letter to the NRC dated June 9, 1997. The NRC approved the transfer in a letter dated February 11, .Vsu

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Boston Ediscn Comp;ny Dock *t 50-293 Ent:rgy Nucler GInsrition Company License No. DPR-35 On November 18, 1998, Boston Edison, the sole owner and operator of Pilgrim, entered into a purchase and sale agreement under which it will sell its interests in Pilgrim to Entergy Nuclear. Upon final execution, this transaction will complete Boston Edison's divestiture of all electric generation assets. A copy of the signed Purchase ,

and Sale Agreement is included as Enclosure 4 to this letter. Major issues addressed  !

in the Purchase and Sale Agreement include:

t Upon closing (and subjcct to the NRC's consent and license amendments), Entergy Nuclear will assume title to the facility (including all equiprein, spare parts, fixtures, inventory, and other property necessary for the operation and maintenance of Pilgrim), will take title to all used and spent nuclear fuel and other licensed materials at Pilgrim, and will assume all responsibility for the operation, maintenance, and eventual decomrr.issioning of the station.

. Upon closing, most if not all employees within the Boston Edison Nuclear Business  ;

Unit will be offered employment with Entergy Nuclear.

. As part of the transaction, Boston Edison, Commonwealth Electric Company, and Montaup Eteletric Company have entered into power purchase agreements through 2004 with Entergy Nuclear under which Boston Edison, Commonwealth Electric Company and Montaup Electric Company will purchase capacity' and energy from Pilgrim at pre-established rates and schedules.

. At closing, Boston Edison will make additional deposits to the Pilgrim  !

decommissioning trust funds to fully fund the radiological decommissioning costs consistent with the amounts determined in accordance with 10 CFR 50.75.

Following the closing, Entergy Nuclear will be responsible for all Pilgnm decommissioning costs and activities, and Boston Edison's obligations shall be extinguished.

The sale and purchase of Pilgrim requires approvals and/or actions from other agencies, including the Massachusetts Department of Telecommunications and Energy, Federal Energy Regulatory Commission, Securities and Exchange Commission, Environmental Protection Agency and the Intemal Revenue Service.

These approvals are being sought separately under the respective regulatory requirements.

II. Supporting information Pilgrim Nuclear Power Station is a single unit Boiling Water Reactor electric generating facility that has been constructed and operated by Boston Edison in accordance with the Pilgrim Operating License and certain other permits and licenses. Entergy Nuclear will purchase and operate Pilgrim and will assume full liability and responsibility for decommissioning Pilgrim. As required by 10 CFR 50.80, the following information is provided consistent with the format of 10 CFR 50.33,10 CFR 50.33a, and 10 CFR 50.34.

. . Boston Edison Comp ny Dock:t 50-293 Entergy Nucbtr G:n:r: tion Comp ny License No. DPR-35 information Required by 10 CFR 50.33 1

A. Name of Applicant (New Licensee)

Entergy Nuclear Generation Company B. Address 1340 Echelon Parkway l Jackson, MS 39213  !

C. Description of Business or Occupation  :

Entergy Nuclear Generation Company is engaged principally in the business of )

owning and/or operating all or part of one or more eligible facilities and selling ,

electric energy at wholesale in the United States.

l D Corporate Information  :

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1. Entergy Nuclear Generation Company, a Delaware Corporation, is an indirect wholly-owned subsidiary of Entergy Corporation. The principle office is located in Jackson, MS.

2. Effective January 1,1999, the officers of Entergy Nuclear Ger,eration Company, all of whom are citizens of the United States, are as follows:  ;

l Jerry W. Yelverton President and Chief Executive Officer  !

C. John Wilder Executive Vice President and Chief Financial Officer )

Steven C. McNeal Vice President and Treasurer Carolyn C. Shanks Vice President Finance and Administration and Assistant Treasurer Michael G. Thompson Senior Vice President-Law and Secretary Joseph L. Blount Assistant Secretary Christopher T. Screen Assistant Secretary

3. Effective January 1,1999, the Directors of Entergy Nuclear Generation Company, all of whom are citizens of the United States, are as follows:

l J. Wayne Leonard Chairman Donald C. Hintz ,

C. John Wilder Jerry W. Yelverton The business mailing address of Messrs. Leonard, Hintz, and Wilderis: l Entergy NurJear Generation Corapsny 639 Loyola Avenue New Orleans, LA 70113 '

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Boston Edison Company Dock t 50-293  !

Ent:rgy Nucl::r G:n rction Company License No. DPR-35 l

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The business mailing address of Mr. Yelverton is:

Entergy Nuclear Generation Company 1340 Echelon Parkway Jackson, MS 39213 1

4. Entergy Nuclear Generation Company is not owned, controlled, or f dominated by an alien, a foreign corporation, or a foreign govemment. '

5. In seeking to become the licensed owner and operator of Pilgrim, Entergy Nuclear Generation Company is not acting as the agent or i representative of another entity. I E. Class of License i

The Pilgrim Facility Operating License was issued under the provisions of

, Section 104b of the Atomic Energy Act of 1954 as amended. The expiration ,

date of the current facility license is June 8,2012. Boston Edison and Entergy I Nuclear are requesting a direct transfer of the existing license. A change in the l class of the Facility Operating License is not being requested as part of the

. transfer.

F. Finangial Qualifications i Entergy Nuclear does not qualify as an electric utility under 10 CFR 50.2; i therefore, the following information is provided in order to demonstrate financial qualifications in accordance with Section 50.33(f).

1. As requested by 10 CFR 50.3?"}(3), Entergy Nuclear is an indirect, 4

wholly-owned subsidiary of Entergy Corporation. Headquartered in New l Orleans, LA, Entergy Corporation is a U.S.- based global energy company with power production, distribution operations and related diversified services.

Entergy Corporation owns, manages or invests in power plants generating a nearly 30,000 megawatts of electricity domestically and intemationally.

i Through its subsidianies, Entergy Corporation owns and operates five nuclear

! power plants at four sites - Arkansas Nuclear One Units 1 and 2, Grand Gulf i Nuclear Station, River Bend Station. and Waterford 3 Steam Electric Station.

Entergy Corporation distributes energy to more than 2.5 million customers in

, the U.S. and is also among the top 10 power marketers in the U.S. As of September 30,1998, Entergy Corporation had total assets of $27.4 billion.

Entergy Corporation's annual reports for the past five years are attached to this filing. A so enclosed are Moody's and Standard and Poors bond ratings for the past three years demonstrating Entergy Corporation's investment-grade bond ratings.

I Entergy Nuclear is a newly-formed entity. Entergy Nuclear, either through a i parent, associate or aftiliate company guarantee, letter of credit or similar financial arrancement, will provide the funds necessary to ourchase Pilarim. l I

, Boston Edison Company Docket 50-293 i Entergy Nuctsar Generation Company License No. DPR-35 i

2. The following information is submitted pursuant to 10 CFR 50.33(f)(2).

Entergy Nuclear has assurance of obtaining the funds necessary to cover estimated operating costs of Pilgrim. Entergy Nuclear has signed power

purchase agreements with Boston Edison, Commonwealth Electric and

! Montaup Electric Company. Under these contracts, Entergy Nuclear will sell l 100% of the total output of Pilgrim at fixed prices "take or pay" through 2001.

Beyond 2001, the contracted volumes begin to decline through 2004.

Entergy will pursue other firm contracts or sell any uncommitted power into

! the market in New England. The following table summarizes the terms of the l power purchase agreement and the expected market prices for uncommitted j power:

i Output to Contract Market Price Year Contract % Price (pIkwh) (p/kwh) 1999 100 3.50 2000 100 3.80 2001 100 3.52 l

_. _ ____.________ l 2002 80 3.89 l 2003 50 4.35 l

2004 fiO 4.72 l dl 5:AW:A%6j giSin x J 4 Annhss s sss adissh d:Ms5A dnG MESA $s Ms M si5sinis ~ > > L55 Based on Pilgrim's current operating performance and Entergy Nuclear program's operating experience, Entergy Nuclear expects to operate Pilgrim at an average annual capacity factor of 85% and sell all power generated through firm contracts or into the market. At projected market prices', these sales are expected to provide a margin cf additionalincome over and above Pilgrim's operating costs. The following table demonstrates the ability of projected power sales to cover expected operating expenses:

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' Market price estirnates are based on independent market studies, Entergy Power Marketing Group analyses and scenarios related to varying market conditions.

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o Bor'on Edison Company Docket 50-293

, Entergy Nuclear Generation Company License No. DPR-35

($000s) 1999' 2000 2001 2002 2003 2004 Power itales - Contract 126,180 200,874 175,490 164,014 95,810 124,806 l

Power Sales - Ma*et 0 0 0 l Total Revenue ~126,180 200,874 175,490 l Operation & Maintenance i

Fuel '

Administrative & Other Total Operating Expenses Operating Profit Note: Excludes refueling outage costs and associated expenses for 1999.

Projected operating expenses include property taxes per Enclosure 4 (Exhibit E of the Purchase and Sale Agreement) and Boston Edison's remittance of Pilgrim Fixed Operating Costs per Enclosure 4 (Section 5.11 of the Purchase and Sale Agreement).

At the closing of the Pilgrim purchase, Entergy Nuclear will provide additional financial assurance up to fifty million dollars, either through a parent, associate or cffdiate company guarantee, letter of credit or similar financial arrangement.

Entergy Nuclear will be able to call upon these funds, if necessary, or funds available through a letter of credit to meet its expenses and obligations to safely operate and maintain the plant. These obligations include the costs of nuclear property damage insurance and any retrospective premium pursuant to 10 CFR 140.21.

In the event of an extended shutdown, Entergy Nuclear nuld cover fixed operating expenses through its retained eamings, as available, or oy funds described above. Of total operating expenses, the fixed portion is estimated as follows:

($000s) 1999' 2000 2001 2002 2003 2004 Total Operating Expemns Fixed Operating Expenses Note: Fixed operating expenses exclude fuel costs, refueling outage costs, and a certain percentage of contracts and outside services.

Assumes 4/1/99 closing.

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Boston Edison Comprny Dockat 50-293 Ent::rgy Nucl:fr G:n:retion Comprny License No. DPR-35 i

There is no unfunded financial liability associated with the i decommissioning of Pilgrim. Entergy Nuclear will receive a fully funded decommissioning trust at the closing of the Pilgrim sale. Based on financial  ;

analysis and independent expert decommissioning cost and funding studies, '

this amount will be adequate to fund future decommissioning cash flows.

Please refer to Section K regarding Decommissioning Funding.

G. Radioloaical Response Plans Upon approval of the transfer, Entergy Nuclear will assume authority and responsibility for functions necessary to fulfill the emergency planning requirements specified in 10 CFR 50.47(b) and 10 CFR 50, Appendix E. No I substantive changes will be made to the existing Pilgrim Emergency Plan  ;

presently implemented nor will there be any immediate changes to the existing  !

Emergency Response Organization as a result of these proposed amendments.

1 Actions necessary to assure continued compliance with emergency planning {

requirements will be completed upon the closing as identified in the Purchase  !

and Sale Agreement (Schedule 2.1(1)(i) of Enclosure 4). All property and j assets used or usable in providing emergency waming or associated with emergency preparedness (Schedule 2.1(1)(i) of Enclosure 4), and contracts and agreements associated with emergency preparedness (Schedule 2.1(1)(ii) of Enclosure 4) are identified in the schedules. With respect to existing agreements for support from organizations and agencies not affiliated with the Licensee noston Edison and Entergy Nuclear will make the appropriate i notificat:cos to the parties to assure continued support.

Specific emergency plan and procedure changes to reflect the change in ownership and operation will be handled in accordance with 10 CFR 50.54(q) as required.

H. Facility Alterations No physical alterations to Pilgrim are being proposed as a part of the license transfer process. Any future modifications will be performed in accordance with applicable regulatory requirements (e.g ,10 CFR 50.59).

I. Reaulatory Aaencies Havina Jurisdiction and News Aaencies Although Boston Edison and Entergy Nuclear are requesting a direct transfer of the existing Pilgrim Facility Operating License and NRC Materials l License, and not a new license under 10 CFR 50.22, the following information is j provided to help facilitate NRC interaction with the public:

1. The following regulatory agencies, in addition to the Commission, have jurisdiction over Boston Edison:

. Massachusetts Department of Telecommunications and Energy, 100 Cambridge Street,12th floor, Boston, MA 02202

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, Boston Edison Comp ny Dock:t 50-293 l Ent:rgy Nucl: r G:n: ration Comp ny Lic;nsa No. DPR-35 Federal Energy Regulatory Commission,888 First Street, N.E., i Washington, D.C. 20426 i l

. Securities & Exchange Commission,450 Fifth Street, N. W.,

Washington, D.C. 20549

2. The following publications circuiate in the general area of Pilgrim: l

. The Boston Globe, P. O. Box 2378, Boston, MA 02107-2378

. Patriot Ledger, P. O. Box 9159, Quincy, MA 02169

. Old Colony Memorial, P. O. Box 959, Plymouth, MA 02362 l

J. Restricted Data l

l This application does not involve any restricted data or other classified defense  ;

information, and it is not expected that any such information will be required by the licensed activities at Pilgrim. in the event that licensed activities involve restricted data in the future, Entergy Nuclear agrees that it will appropriately safeguard such information and will not permit any individual to have access to )

restricted data uqtil the Office of Personnel Management investigates and reports to the NRC on the character, associations, and loyalty of such individual,  ;

and the NRC determines that permitting such person to have access to '

restricted data will not endanger the common defense and security of the United States.

K. Decommissionina Fundina At closing Boston Edison shall deposit funds into the Decommissioning Trust and Provisional Trust, pursuant to Section 5.21 of the Purchase and Sale Agreement, sufficient to satisfy the minimum decommissioning funding requirements prescribed by 10 CFR 50.75 at the expiration of the Pilgrim Facility Operating License. Based upon varying federal income tax and closing date assumptions, the total amount of decommissioning funds to be transferred to Entergy Nuclear at closing is projected to be from $396 million to $466 million.

These funds will provide for a fully-funded decommissioning trust by the expiration of Pilgrim's Facility Operating License. Upon closing and transfer of the decommissioning trust (s), Boston Edison shall be relieved of all future obligations and responsibilities associated with the decommissioning of Pilgrim, which as of the closing date shall become the sole and exclusive obligation and responsibility of Entergy Nuclear.

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, , Boston Edison Comp:ny Dock t 50-293 Ent:rgy Nucl=r G:n: ration Comp:ny License No. DPR-35 The amount transferred to Entergy Nuclear at closing will equal or exceed the amount necessary to fund the NRC minimum requirement at the expiration of the Pilgrim Facility Operating License. The table below compares the Entergy Nuclear funding requirement (assuming a non-qualified tax rate and a March 31, 1999 closing) to the NRC minimum funding requirement:

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The current Entergy Nuclear cost estimate is higher than the NRC minimum amount due to the inclusion of spent fuel storage costs and costs to remove non-radioactive structures. The current cost is escalated to 2012 (assumed shutdown date) at inflation and then discounted back at an assumed earnings rate to the 1999 funding date. The 1999 funding requirement assumes after-tax earnings of for the NRC minimum (5 allowed real growth) and for the Entergy Nuclear calculation > real growth). The Entergy Nuclear calculation also assumes decommissioning cash flw; are spread over a period of years in accordance with independent decommissioning cost studies. The net fund balance continues to eam at during this period.

The Purchase and Sale Agreement conditions the closing of the sale and the aforementioned decommissioning trust funding and transfer on there being no adverse federalincome tax consequences as a result thereof on either party. In that regard, Boston Edison and E .Rgy Nuclear have filed with the Intemal Revenue Service (IRS) ruling requests which would allow for the decommissioning trust funding and transfer to occur with no adverse tax consequences to either party.

The . Purchase and Sale Agreement provides for the decommissioning trust funds to be transferred at the time of closing through the transfer of two separate decommissioning trusts, a regular Decommissioning Trust and a Proviional Trust. Depending upon applicable federal tax provisions at the time of closing, all or a portion of the decommissioning trust funds may be deemed to be "non-qualified" pursuant to Section 468A of the IRS code.

The Purchase and Sale Agreement further provides that, if at the time of closing, more than 20% of the funds being transferred are deemed to be "non-qualified" under Section 468A, then a portion of the trust funds, $70 million, will be transferred as part of a Provisional Trust to be established by Boston Edison prior to closing. In the event that between closing and December 31, 2002 there is an intervening tax law or rule change, such that all or a portion of the previously "non-qualified" decommissioning trust funds are deemed to be

" qualified", the amount of funds in the Provisional Trust shall be reduced in accordance with Schedule 5.21 and the reduction shall be rebated to Boston Edison in accordance with the Provisional Trust. Any reduction and rebate shall be accomplished in a manner consistent with the Atomic Energy Act, IRS requirements, and other applicable law. The Durchase and Sale Agreement provides that in no event shall the amount in the Trusts available to decommission Pilgrim fall below the NRC required minimum. After December

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, , Boston Edison Company Dock:t 50-293 Ent:rgy Nucl:tr G:n:rction Company License No. DPR-35 31,2002, all funds remaining in the Provisional Trust will be transferred to the regular Decommissioning Trust and Boston Edison shall have no further claim to those funds.

Information Required by 10 CFR 50.33a Antitrust i

Because Pilgrim is licensed under Section 104b of the Atomic Energy Act (AEA), it is not subject to antitrust review by the NRC as stated in section 105 of the AEA.

Therefore, the requirements of 10 CFR 50.33a are not applicable to this license transfer application, t Section 6 of the Facility Operating License contains wording pertaining to antitrust matters that were not resolved when the original license was issued. These issues, however, were later resolved by NRC Order dated June 19,1980.

l Information Required by 10 CFR 50.34 A. Preliminary Safety Analysis Report The Design and Analysis Report was submitted with the original construction permit application on June 23,1967.

B. Final Safety Analysis Report With respect to the requirements of 10 CFR 50.34(b), the following information is considered pertinent to the transfer:

The Pilgrim Final Safety Analysis Report was initially updated to the Updated Final Safety Analysis Report in 1982 and has been subsequently updated in accordance with l 10 CFR 50.71(e). Any changes to the UFSAR resulting from the transfer will be incorporated in an update (s) after the transfer. With respect to technical qualifications, the following information is provided.

The Entergy Corporation nuclear program has over 20 years experience in the i successful operation of nuclear power plants in the U.S. The technical qualifications of Entergy Nuclear to carry out its responsibilities under the Pilgrim Facility Operating License, as amended, will be at least equivalent to the present technical qualifications of Boston Edison. This application does not involve a request for any change in the design or operation of Pilgrim. The proposed transfer of the railgrim Nuclear Business Unit employees and ownership / operation of Pilgrim from Boston Edison to Entergy Nuclear has been planned to assure there is no disruption to the operation of Pilgrim.

Upon the effective date of the transfer of license, Entergy Nuclear will operate, manage, and maintain Pilgrim in accordance with the conditions and requirements established by the NRC as defined in the Facility Operating License. Most if not all of m

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, , Boston Edison Comprny Dock:t 50-293 Ent:rgy Nuclerr G:n:retion Comp ny Lic:nsa No. DPR-35 3

i the existing Nuclear Business Unit employees will be offered employment with Entergy upon completion of the sale / purchase of the plant. Any new management employees placed at Pilgrim will have experience in the day-to-day operation of nuclear power plants and will meet all applicable technical qualifications required by existing Pilgrim ]

licensing documents. A Vice President at the site will continue to be the officer at the site responsible for the overall safe operation and maintenance of Pilgrim.

The proposed transfer will not impact compliance with the quality assurance ,

requirements of 10 CFR 50 Appendix B nor willit reduce the commitments in the NRC i accepted quality assurance program description for Boston Edison. Upon transfer, Entergy Nuclear will assume the ultimate responsibility for present functions associated with the Boston Edison-Quality Assurance Program. The manager responsible for quality assurance functions will continue to have direct access to the site officer on matters related to quality. Changes to reflect the transition will be handled in accordance with 10 CFR 50.54. 1

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C. Physical Security Plan l I

The proposed transfer will not impact compliance with the physical security l requirements of 10 CFR Part 73. Upon transfer, Entergy Nuclear will assume ultimate. j

, responsibility for implementation of all aspects of the present security program. l Operating License Condition 3.G includes physical security plan requirements and is 1 not being changed by the transfer. Changes to the plans reflecting this transaction will i not decrease the effectiveness of the plans and will be made in accordance with 10 J CFR 50.54(p).

Safeauards Continaency Plan D. l Operating License Condition 3.G includes safeguards contingency plan requirements and is not being changed by the transfer.

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E. Safeauards Information Operating License Condition 3.G includes safeguards information requirements and is not being changed by the transfer.

F. Additional TMI Related Reauirements Additional TMI related requirements are not affected by the transfer. j i

G. Conformance to Standard Review Plan '

The Pilgrim application was docketed in 1967 and the Facility Operating License was issued in 1972, which preceded the requirement for conformance to NUREG-0800, Standard Review Plan.

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, Boston Edison Company Dockst 50-293 Ent

rgy Nucisir Gingration CompIny . Licinss No. DPR-35 111. Other Licensing Considerations Offsite power is currently provided to Pilgrim over 345 Kv transmission facilities and 23

. Kv distribution facilities and will remain unchanged as a result of the sale and transfer of Pilgrim. l

~ 1. 345 Kv (preferred offsite power) 4~

The 345 Kv. transmission system is the preferred offsite power source. This

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offsite power source consists of two 345 Kv transmission lines which connect the Pilgrim switchyard to the regional electrical grid. Boston Edison owns the 345 Kv transmission lines and towers. The transmission lines and transmission towers are not included in the Pilgrim Purchase and Sale Agreement.

The 345 Kv switchyard is included in the Pilgrim Purchase and Sale Agreement; Entergy Nuclear will control and maintain the switchyard in accordance with accepted generating and transmission practices.

The 345 Kv switchyard is located within the Pilgrim protected area. The switchyard is of a ring bus design. The Startup Transformer, a DC power supply for the breakers, towers for lightning protection, and various control, relaying, metering, and indication equipment are also located within the switchyard. I During periods when Pilgrim is generating electricity, the output of the main L

generator is provided to the transmission system through the main transformer ,

and the switchyard. During periods when Pilgrim is not generating electricity to the transmission system, the Startup Transformer is the preferred offsite source of power to Pilgrim's AC powered electrical systems. The Startup Transformer J can be powered by either one or both of the 345 Kv transmission lines.

The regional bulk . electric power authority is the Independent System Operator for New England (ISO-NE). Through telemetry and instrumentation, the ISO-NE system operator (dispatcher) monitors overall transmission system  !

conditions, including those in the Pilgrim switchyard and other portions of the I transmission system connected to the transmission lines to and from the Pilgrim .j switchyard. The ISO-NE system operators (dispatchers) are trained on the l procedures goveming the control of the bulk electric power supply and

. contingency procedures. The contingency procedures include action (s) to take ,

to assure the worst contingency does not result in a transmission system l voltage of less than 340 Kv in the Pilgrim switchyard. The contingency l procedures include ISO-NE actions (load shedding) to be taken to preclude t Pilgrim switchyard voltage from decreasing to less than 340 Kv. Moreover, the contingency procedures include a priority'to re-power transmission lines to nuclear power plants, including Pilgrim, as quickly as possible in the event the 345 Kv transmission lines become de-energized, in parallel with these actions,  ;

.the Pilgrim control room is notified by the ISO-NE system operator if '

transmission system conditions are such that transmission system voltage might decrease to or below 340 Kv. The Pilfsiin control room operators would then, by approved Pilgrim procedure, initiate o tion (s) to start the onsite emergency

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, . Boston Edison Comp ny Dock:t 50-293 I Ent:rgy Nucirr G:n:r: tion Comp:ny License No. DPR-35 l

power source (standby emergency diesel generators) to assure safety-related sources of AC power are available to safety-related systems and components. 1 Pilgrim is located within the portion of the ISO-NE system that is part of the Rhode Island, Eastem Massachusetts, and Vermont Electric Co-operative (REMVEC). REMVEC is a satellite of ISO-NE. The REMVEC system operators (dispatchers) are also trained on the operating and contingency procedures mentioned above.

2. 23 Kv (secondary offsite power)

Secondary offsite power is provided to Pilgrim by 23 Kv distribution system i facilities. The portion of the system in the vicinity of Pilgrim extends along )

Rocky Hill Road, adjacent to Pilgrim. The 23 Kv distribution system provides a source of offsite power to the Shutdown Transformer. The Shutdown Transformer is located within the Pilgrim protected area. Through the Shutdown Transformer, the 23 Kv distribution system provides a backup source of power to the safety-related portion of Pilgrim's AC power system. The 23 Kv distribution facilities are owned or controlled by Commonwealth Electric Company (Commonwealth). The contract between Commonwealth and Boston Edison under which Commonwealth provides such power is identified in Schedule 2.1(e) of the Purchase and Sale Agreement and is required to be assigned from Boston Edison to Entergy Nuclear upon closing. No physical changes to the 23 Kv system are being proposed as part of the license transfer.

Based on the above, there is adequate assurance that independent sources of offsite power will continue to be provided.

3. Control of Exclusion Area Upon approval of the transfer, Entergy Nuclear will own all of the exclusion area and will have authority to determine all activities within the Pilgrim exclusion area to the extent required by ~10 CFR Part 100.

4. Nuclear Insurance Prior to closing, Entergy Nuclear requests that the NRC issue a new Price Anderson indemnity agreement to Entergy Nuclear as part of the license transfer process. Entergy Nuclear's projected income from plant operations and financial qualifications (Enclosure 1, Section ll.F) provide adequate assurance that Entergy Nuclear will be able to pay a retrospective premium pursuant to 10 CFR 140.21. Prior to closing, Entergy Nuclear will obtain nuclear property damage insurance in such form and amount as required by 10 CFR 50.54(w).

Further, Entergy Nuclear will obtain all the required nuclear liability coverage prior to the closing.

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,, . Boston Edison Comp;ny Dock t 50-293 Ent:rgy Nucl:Ir G:n rttion Comp ny License No. DPR-35

5. Standard Contract for Disposal of Spent Nuclear Fuel Upon closing, Entergy Nuclear will assume title to and responsibility for the ,

management, storage, transportation and disposal of spent nuclear fuel at '

Pilgrim. Boston Edison will assign and Entergy Nuclear will asyJme Boston Edison's rights and obligations under the Standard Contract with the Department of Energy, excluding any claims of Boston Edison lelated to or  ;

pertaining to U.S. Department of Energy (DOE) defaults under the DOE Standard Contract accrued as of the closing date, whether relating to periods prior to or following the closing date.

6. Environmental Review t

The proposed license transfer and amendments falls under the new categorical  ;

exclusion from environmental review,10 CFR 51.22(c)(21), for approvals of direct or indirect transfers of NRC licenses and any associated amendments established by the Commission's new rule on streamlining the hearing process.

[ Streamlined Hearing Process for NRC Approval of License Transfers, 63 Federal Register 66,721, 66,735 dated December 3,1998.] Accordingly, no environmental review need be undertaken with respect to the proposed transfer.

IV. Effective Date l

Boston Edison and Entergy Nuclear request that the NRC review this application on a l schedule to support a closing date of March 31,1999. Boston Edison and Entergy Nuclear request that the conforming license amendments be issued to become effective upon closing. ,

1 Attachment A - Proposed amendments to Facility Operating License and NRC Materials License Attachment B - Proposed amendment to Technical Specifications l

Attachment C - No Significant Hazards Consideration determination l

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