ML20206A695

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Request Confirmation That No NRC Action or Approval,Required Relative to Proposed Change in Upstream Economic Ownership of New England Power Co,Minority Shareholder in Vermont Yankee Nuclear Power Corp,Yaec,Myap & Connecticut Yankee
ML20206A695
Person / Time
Site: Vermont Yankee, Haddam Neck, Yankee Rowe, Maine Yankee
Issue date: 03/29/1999
From: Behrends S
LEBOEUF, LAMB, LEIBY & MACRAE, NEW ENGLAND POWER CO.
To: Collins S
NRC (Affiliation Not Assigned)
Shared Package
ML20206A689 List:
References
NUDOCS 9904280289
Download: ML20206A695 (6)


Text

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h D.M Samuel J. Collins, Director p -

Office of Nuclear-Reactor Regulation U.S. Nuclear Regulatory Commission 11555 Rockville Pike Rockville, MD 20352

.Re: NRC Docket Nos.50-029; 50-213 7 50-2*71 - and 50-309

Dear Mr. Collins:

The purpose of this letter is to request Nuclear Regulatory Commission ("NRC")~ confirmation that no NRC action or approval is required relative to a proposed change in the upstream economic ownership of New England Power Company ("NEP"),

a_ minority shareholder in Vermont Yankee Nuclear Power Corporation ("VYNPC"), Yankee Atomic Electric Company ("YAEC"),

Maine Yankee Atomic Power Company ("MYAPC") and Connecticut Yankee Atomic Power Company ("CYAPC"), which are NRC licensees.

On March 15, 1999, an application was filed with the NRC for approval of an indirect transfer of control of NEP's limited ownership interests in Millstone Unit No. 3 and Seabrook Unit No. l' . NEP is a subsidiary of New England Electric System

("NEES"), _and the NRC application was filed solely to reflect a proposal that NEES become a wholly-owned, indirect subsidiary of

.The National Grid Group plc (" National Grid"), a public limited-

' liability company _ incorporated under the laws of England and Wales, and the largest privately owned transmission company in the world. Under the transaction, NEP and NEES will remain U.S.

companies, and NEP will remain as the NRC minority ownership licensee for both plants.

9904280289 990422 PDR W ADOCK 05000029 PDR -

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l i Samuel J. Collins, Director March 29, 1999 Page-2 )

NEP owns a 12.2%, non-operating interest in Millstone Unit No. 3, and a 9.9% interest in Seabrook Unit No. 1. NEP is a minority owner only, has no control over plant operation, and is not licensed to operate either plant.1 However, the transfer application was necessary because of NEP's status as a person licensed by the NRC to hold the minority ownership interests.2 i l

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Northeast Utilities (through subsidiaries) is the majority owner and the licensed operator of Millstone Unit 3.

The largest owner of Seabrook Unit No. 1 is North Atlantic Energy Corporation (35.9%), and North Atlantic Energy Service Corporation is the licensed operator.

In its March 15, 1999 application for transfer of ,

. control of licenses, NEP demonstrated that the transaction was consistent with the Atomic Energy Act of 1954, as amended

("AEA"), and the rules and regulations promulgated thereunder.

NEP further demonstrated that the transaction would not have any effect on the operation, financial status, physical condition, environmental' effects, business 71an, decommissioning capability )

or control _of the plants, and would comply with all restrictions l I

governing foreign ownership, control and domination. As NEP, a U.S. entity, will remain the licensee, no license will be held by or owned directly by any alien. To further 'asure the NRC that National Grid will not, by reason of its acquisition of NEES, obtain access to restricted nuclear information and technology, l which to the best.of the applicant's knowledge does not exist at i any of the six nuclear facilities for which NEP has an interest,  !

NEP created a Special Nuclear Committee of the Board of l Directors, which will be comprised solely of U.S. citizens, to act on behalf of NEP as to all matters relating to the operation, maintenance, contribution of capital, decommissioning, fuel j cycle, and other matters relating to the nuclear facilities. The same matters with respect to the four plants discussed herein also will be within the province of the Special Nuclear Committee.

m^ r ej .

Samuel J. Collins, Director March 29, 1999 Page 3 NEP also owns 20% of the outstanding shares of VYNPC, which in turn as the licensee for the Vermont Yankee nuclear power facility, an operr ing commercial nuclear plant.8 VYNPC is the sole licensee of that facility. NEP also owns 30% of the outstanding shares of YAEC, which is the owner and licensee of Yankee Nuclear Power Station, a commercial nuclear facility which has ceased operations.' NEP owns 20% of the outstanding shares of MYAPC, which is tP.a owner and licensee of the Maine Yankee nuclear facility., which has ceased operations.' NEP owns 15% of

' The other shareholders in VYNPC and their respective shareholder interests are: Burlington Electric Department (3.6%), Cambridge Electric Light Company (2.5%), Central Maine Power Company (4 %) , Central Vermont Public Service Corporation (31. 3 % ) , Connecticut Light & Power Company (9.5%), Green Mountain

. Power Corporation (17.9%), Lyndonville (Village of) Electric Department (0.6%), Montaup Electric Company (2. 5%) , Public Service Company of New Hampshire (4 %) , Vermont Electric Generation & Transmission Cooperative, Inc. (1%), Washington Electric Cooperative (0.6%), Western Massachusetts Electric Company (2.5%).

The other shareholders in YnEC and their respective shareholder interests are: Boston Edison Company (9.5%),

Cambridge Electric Light Company (2 %) , Central Maine Power Company (9.5%), Cental Vermont Public Service Corpctm. ion (3.5%),

Commonwealch Electric Company (2.58), Connecticut Light & Power Company (24.5%), Montaup Electric Company (4. 5%) , Public Service Company of New Hampshire (7%), Western Massachusects Electric Company -( 7 % ) ..

  • The other shareholders in MYAPC and their respective shareholder interests are: Bar. gor Hydro-Electric Company (7%),

Cambridge Electric Light Company (4 %) , Central Maine Power Company (38%), Central Vermont Public Service Corporation (2%), ,

Connecticut Light & Power Company (12%), Maine Public Service l Company (5%), Montaup Electric Company (4 % ) Public Service l Company of New Hampshire (5%), Wescarn Massachusetts Electric l l

Company (3%). j L 1

7

-e g . Samuel J. Collins, Director I

March 29, 1999 Page.4 the CYAPC, which is the owner and licensee of the Connecticut Yankee nuclear f acility, which also has ceased operations.'

In contrast to the situation applicable to Millstone Unit No. 3 and Seabrook Unit No. 1, NEP has no NRC licenses (ownership or otherwise) for the Vermont Yankee, Yankee Atomic, Maine Yankee, or Connecticut Yankee plants.' This is because while the NRC licenses the ownership of nuclear plants j (utilization facilities) under the decision in Marble Hill,' it '

does not lictnse ownership of the licensees themselves.

Therefore, t!.e' National Grid transaction entails no direct transfer of any NRC licenses for these four plants.

The NRC does assert jurisdiction to review indirect transfers of control of licenses under Section 184 of the AEA, and 10 CFR S 50.80. However, this is not a transfer of control over any license. In the case of the four plants in questiom NEP has.only tinority shareholder interests in the four companies j and does not control them or the conduct of the licensed j activities. As NEP does not control these NRC licensees or the conduct of these licensed activities, the change in the upstream  !

economic ownership of NEP is not an indirect transfer of control l

-of these NRC licenses. In short, for these four plants.neither l The other shareholders in CYAPC and their respective shareholder interests are: Boston Edison Company (9.5%), Central Maine' Power Company (6%), Central Vermont Public Service Corporation (2 % ) , Commonwealth Electric Company (4. 5%) ,

Connecticut Light & Power Company (34. 5%) , Montaup Electric Company (4. 5%) , Pub? ic Service Company of New Hampshire (5%),

U:.' ted Illuminating Company (9.5%), Western Massachusette Electric Company (9.5%).

7-See NRC facility licenses DPR-3, DPR-28, DPR-36, and DPR-61. We use_" plants" in a general sense, since three of the four' plants are in various stages of decommissioning.

Public Serv. Co. of Indiana (Marble Hill Nucle : ,

Generating Station, Uni ts 1 and 2) , ALAB-459 7 NRC 19.9 (1976). \

m 4

s 9:

p Samuel J. Collins, Director March 29, 1999 Page 5

'NEP nor NEES has any control to transfer.' Thus, the NEP application'for NRC approval of the indirect transfer of NEP's minority ownership licenses for Millstone Unit No. 3 and Seabrook Unit No ., 11does not include a.similar application with respect to Vermont Yankee, Yankee Atomic, Maine Yankee or Connecticut Yankee the plants, although the same safety and national security considerations in support of HRC approval apply for all six plants.

Although we conclude that under Section 184 of the AEA and NRC precedent interpreting that Section that NRC approval is not required for the four Yankee plants, we request confirmation of this interpretation as expeditiously as possible. If the NRC concludes that some approval is required, NEP is prepared to file Section 101 of the AEA requires a license in order to 1

" transfer" a facility, and does not mention any " indirect" transfer. However, Section 184 does prohibit a transfer '

"directly or indirectly, through transfer of control of any license to any person," without NRC consent. The leading NRC case on indirect transfers of control under Section 184 is Safety j Light Corporation, et al. (Bloomsburg Si te Decon tamina tion) , l ALAB-931, 31 NRC 350 (1990). In Safety Light, the Appeal Board l held ~that NRC consent to an indirect transfer was required when "the full right to direct those [ licensed] activities -- and thus to control the licenses themselves -- became vested in the new owners . . . .

Id. at 365. Safety Light thus stands for the proposition that NRC approval of a transfer of control (or indirect transfer) is required only when the rigk to direct the conduct of an NE licensed activity is transfer ed In our case, n right to direct any licensed activity will b cransferred.

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Samuel J. Collins, Director March.29, 1999 Page 6

! the appropriate application. However, to avoid delay, l' . expeditious NRC action will ensure-that any processing and review l of that application will not.delayLoverall NRC action on the NEP transaction.

Very truly yours, l

m Edward Berlin, Esq. Samuel Behrends IV, Esq.

Scott-P. Klurfeld, Esq. Mary A. Murphy, Esq. {

-Swidler Berlin Shereff Yvonne M. Coviello, Esq. )

l- Friedman, LLP LeBoeuf, Lamb, Greene &

l.

3000 K Street, NW, Suite 300 MacRae, L.L.P..

[ Washington, DC 20007-5116 1875 Connecticut Avenue, NW (202) 424-7500 Suite 1200 l

Washington, DC 20009 (202) 986-8000 Thomas G. Robinson, Esq. Paul K. Connolly, Jr., Esq.

J l

New England Power Company LeBoeuf, Lamb,- Greene & '

25 Research Drive MacRae,'L.L.P.

Westborough, VA 01582 260 Franklin Street (508) 389-2877 Boston, VA 02110 (617) 439-9500 Attorneys for New England. Attorneys for NGG Holdings LLC Power Company 1

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