ML20206Q845

Written Comments of Massachusetts Municipal Wholesale Electric Co.* Requests That Commission Consider Potential Financial Risk to Other Joint Owners Associated with License Transfer.With Certificate of Svc.Served on 990114

ML20206Q845
Person / Time
Site:	Seabrook
Issue date:	01/12/1999
From:	Scobbo N FERRITER, SCOBBO, SIKORA, CARUSO & RODOPHELE, MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC CO.
To:	NRC COMMISSION (OCM)
Shared Package
ML20206Q851	List: ML20206Q845 ML20206Q861
References
CON-#199-19897 LT, NUDOCS 9901190014
Download: ML20206Q845 (6)

Text

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. fh?b??h' l DOCKETED US'P UNITED STATES OF AMERICA' oo JAN 13 P2 :07

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NUCLEAR REGULATORY COMMISSION 01 P

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In the Matter of North Atlantic )

Energy. Services Corporation and ) Docket No. 50-443 - MI Montaup Electric Company ) (License No. NPF-86)

(Seabrook Station, Unit No. 1) )

)

WWED JW 141999 WRITTEN COMMENTS OF MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY ,

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Pursuant to the Nuclear Regulatory Commission (" Commission")

Rules of Practice and Procedure, 10 C.F.R. S2.1305, the i

Massachusetts Municipal Wholesale Electric Company ("MMWEC")

submits these written comments regarding the above-captioned application for license transfer.

MMWEC is a joint owner and licensee of Seabrook Unit 1. As such, MMWEC has an interest in the financial qualification of each other joint owner.

In this proceeding, North Atlantic Energy Services Corporation ("NAESCO"), the operator of Seabrook, and Montaup Electric Company ("Montaup") , a minority owner of Seabrook Unit 1, seek authorization for a license transfer of Montaup's l ownership share to Little Bay Power Corporation ("Little Bay").

i Montaup is a rate regulated electric utility. Under its approved restructuring settlements, there is a mechanism in place to ensure that Montaup can meet its financial obligations with

!  ! 9901190014 990112 PDR ADOCK 05000443

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l' ls respect to Seabrook.  ;

l Little Bay, on the other hand, is an exempt wholesale i

L generator with no rate protections. To meet its financial obligations to Seabrook, Little Bay will look exclusively to l

Great Bay' Power Corporation (" Great Bay"). Both Little Bay and l Great Bay are wholly owned subsidiaries of Bay Corp. Holdings, d I'

l- Ltd. Great Bay owns an approximately 12.1% ownership in L 1 l

Seabrook. Like Little Bay, Great Bay has no rate protections. )

.It is totally dependent upon market revenues to satisfy its financial requirements.

The. proposed transfer in effect would' transfer the ongoing i

financial obligations associated with Montaup's ownership i

interest in Seabrook.from a rate regulated entity with rate protections to an exempt wholesale generator which is dependent-L upon market revenues to meet its obligations. The proposed i

l transfer clearly would result in a lessening of financial

! qualifications with respect to the ownership and licensing of

( Montaup's share and would increase commensurately the financial risk ~to other joint owners, including MMWEC.

MMWEC's concern regarding the financial qualifications of its co-owners, including Little Bay, is heightened by the f

j' Commission's " Final Policy Statement on the Restructuring and l Economic Deregulation of the Electric Utility Industry", 62. Fed.

j; Reg. 44071'(Aug. 19, 1997). In that policy statement, the I

Commission implicitly accepted the practice that co-owners generally divide the costs of their facilities using a l

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-contractually defined pro rata standard, as in the case of Seabrook. However, the Commission reserved "the right, in highly unusual situations where adequate protection of public health and safety would be compromised if such action were not taken, to consider imposing joint and several liability on co-owners of more than de minimis shares when one or more co-owners have J defaulted". Id. at 44074. This policy puts MMWEC at risk for the financial risks associated with the proposed license '

l transfer.

Furthermore, Little Bay is relying exclusively on Great Bay to backstop its financial qualifications. This Commission has had occasion to question and to investigate the financial qualifications of Great Bay. Although the Commission ultimately determined Great Bay's tinancial qualifications to be adequate, the fact the investigation occurred illustrates the added financial risk associated with a license transfer to an entity l which is not rate regulated.

In its motion for leave to intervene, New England Power Company ("NEP") (another Seabrook joint owner) has proposed that the Commission condition authority to transfer Montaup's Seabrook interest to Little Bay on the condition that Montaup agree to remain contingently responsible for Little Bay's financial responsibilities in the event of default by Little Bay. If the effect of such a condition would be to extend the existing rate protections associated with Montaup's current ownership of Seabrook to Little Bay in the event of default, MMWEC would join l

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infsuch a proposal.1 Absent such a condition, MMWEC requests the Commission to consider carefully the potential financial risk to other joint owners associated with- the proposed license transfer.

Respectfully submitted,  ;

MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY By its a tprneys, I I

./ .

Nichdltts J. Scobbo, Jr.

Robert M. Granger i Ferriter, Scobbo, Caruso )

& Rodophele, P.C. i 75 State Street, 7th Floor Boston, MA 02109  :

(617)-737-1800  !

Dated: January 12, 1999 o \ms\oosnoo2\rumma\mmens i j

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1 - ~NEP asserts that such a condition is necessary in part because the-prepayment of Montaup's decommissioning fund could o , prove deficient if Seabrook were decommissioned prior to the

! expiration of its license' term. NEP Motion to Intervene at 6.

'In.MMWEC's view, there is no evidence before the Commission to l- consider or conclude that Seabrook Unit 1 would, or should, be

. retired early.

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s l DOCKETED ypq CERTIFICATE OF SERVICE 9 JM 13 P2 :07 I hereby certify that copies of the foregoing have been served upon the following persons by U.S. mail, firs class, and AD-in accordance with the requirements of 10 C.F.R. S2.712. '

office of Commission Appellate Administrative Judge Adjudication B. Paul Cotter, Jr., Chairman U.S. Nuclear Regulatory Atomic Safety and Licensing Commission Board Panel Washington, DC 20555 Mail Stop - T-3 F23 Washington, DC 20555 Administrative Judge Administrative Judge Charles N. Kelber Linda W. Little Atomic Safety and Licensing Atomic Safety and Licensing Board Panel Board Panel Mail T-3 F23 5000 Hermitage Drive Washington, DC 20555 Raleigh, NC 27612 Steven R. Horn, Esq. Robert A. Backus, Esq.

Office of the General Counsel Backus, Meyer, Solomon, Mail Stop 0-15 B18 Rood & Branch U.S. Nuclear Regulatory Commission P.O. Box 516 Washington, DC 20555 Manchester, NH 03105 Lillian M. Cuoco, Esq. David A. Repka, Esq.

Senior Nuclear Counsel Winston & Strawn Northeast Utilities Service Co. 1400 L Street, N.W.

P.O. Box 270 Washington, DC 20005 Hartford, CT 06141 Mr. Robert S. Wood Mr. Woodbury P. Fogg, P.E.

Office of the Nuclear Reactor Director Regulation New Hampshire Office of U.S. Nuclear Regulatory Commission Emergency Management Washington, DC 20555 State Office Park South 107 Pleasant Street Concord, NH 20037 Shaw, Pitman, Potts & Trowbridge Mr. Frank Getman, Jr.

2300 N Street, N.W. Great Bay Power Corporation l Washington, DC 20037 20 International Drive t Suite 301 Portsmouth, NH 03801-6809 r

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Mr. Kevin A. Kirby Vice President, Power Supply Eastern Utilitics Associates 750 West Center Street P.O. Box 543 West Bridgewater, MA 02379 Nicholas J. Scobbo, Jr.

Ferriter, Scobbo, Caruso

& Rodophele, P.C.

75 State Street, 7th Floor Boston, MA 02109 (617) 737-1800 Dated: January 12, 1999 l