ML20211P066
| ML20211P066 | |
| Person / Time | |
|---|---|
| Site: | Crystal River  |
| Issue date: | 09/08/1999 |
| From: | NRC (Affiliation Not Assigned) |
| To: | |
| Shared Package | |
| ML20211P033 | List: |
| References | |
| NUDOCS 9909130130 | |
| Download: ML20211P066 (5) | |
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SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION PROPOSED TRANSFER OF LICENSE TO THE EXTENT HELD BY THE CITY OF TALLAHASSEE TO FLORIDA POWER CORPORATION CRYSTAL RIVER UNIT 3 DOCKET NO. 50-302
1.0 INTRODUCTION
I By application dated December 29,1998, as supplemented on June 18,1999, Florida Power Corporation (FPC) requested that the United States Nuclear Regulatory Commission (NRC or the Commission) consent to a transfer of Facility Operating License DPR-72 for Crystal River Unit 3 (CR-3), to the extent held by the City of Tallahassee, to FPC. The transfer approval is being requested as a result of the Acquisition Agreement signed by the City of Tallahassee.
(seller) and FPC (buyer) on December 9,1998, under which FPC is to purchase the j
1.3333-percent interest in CR-3 owned by the seller. This request is being made in accordance 1
with Section 50.80 of Title 10 of the Code of FederalRegulations (10 CFR 50.80). The application also requests the approval of a conforming amendment pursuant to 10 CFR 50.90.
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FPC is an electric utility as defined in 10 CFR 50.2 and is currently a 90.4473-percent majority 1
owner, and the licensed operator, of CR-3. FPC is a wholly owned subsidiary of Florida Progress Corporation. FPC will be a 91.7806-percent majority owner and remain the exclusive operator after the transfer. The City of Tallahassee (City) is a minority owner and co-licensee of CR-3. Through negotiations, FPC and the City reached an agreemont that provides for a
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transfer of the City's 1.3333-percent ownership interest to FPC in exchange for FPC's assuming responsibility for those operating and decommissioning expenses for which the City is presently responsible. The transfer of the City's 1.3333-percent ownership interest in CR-3 to FPC does not involve any proposed change to the management or operation of the plant.
The supplement dated June 18,1999, did not expand the scope of the apolication as origina9y noticed in the FederalRegister.
2.0 FINANCIAL QUALIFICATIONS ANALYSIS
i As specified in its NRC license, FPC is licensed pursuant to Section 104 of the Atomic Energy Act of 1954, as amended, and under the general provisions of 10 CFR Part 50, to own and operate CR-3. Electric utility applicants for a class 104 license are not required to provide further information to demonstrate financial qualifications, pursuant to 10 CFR 50.33(f). FPC is and will remain an electric utility within the meaning of 10 CFR 50.2 following the transfer, j
according to the application. FPC states that the business of FPC will remain essentially 4
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. unchanged after the transfer, and its rates will continue to be regulated by the Florida Public Service Commission and the Federal Energy Regulatory Commission. The staff finds that FPC is financially qualified to hold the license following the transfer.
3.0 TECHNICAL QUALIFICATIONS.
According to the application, the proposed transfer will not result in any change in the design or operation of CR-3. The proposed transfer will not result in any change in the technical aspects of the CR-3 Facility Operating License or the improved Technical Specifications, nor any change to the technical qualifications of personnelinvolved in the maintenance and operation of the facility. The personnel at FPC having control over the licensed activities at CR-3 will not change as a result of the transfer. There will also be no other changes in the management or operations of CR-3 or FPC as a result of this transfer. Accordingly, the NRC staff concludes that the proposed transfer will not affect the technical qualifications of FPC.
4.0 ANTITRUST The Atomic Energy Act does not require or authorize antitrust reviews of post-operating license transfer applications. Kansas Gas and Electric Co.. et al. (Wolf Creek Generating Station, Unit 1) CLl-99-19,49 NRC
. slip op. (June 18,1999). Therefore, since the transfer application was filed after the issuance of the CR-3 initial Operating License, no antitrust review is required or authorized.
5.0 FOREIGN OWNERSHIP. CONTROL. OR DOMINATION FPC is a Florida corporation with its principal place of business in St. Petersburg, Florida. As stated earlier, FPC is a wholly owned subsidiary of Florida Progress Corporation. The shares of common stock of Florida Progress Corporation are publicly traded and widely held. The directors and officers of FPC and Florida Progress Corporation are U.S. citizens. The applicant states that "[neither) Florida Progress Corporation nor FPC is owned, controlled, or dominated by any alien, foreign corporation, or foreign government." The NRC staff does not know, or have reason to believe that,FPC is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government.
6.0 DECOMMISSIONING FUNDING
FPC is an " electric utility" within the meaning of 10 CFii 60.2 and is qualified to use an external sinking fund under 10 CFR 50.75(e)(1)(ii) of the NRC's new decommissioning funding rule.
Upon transfer of the City's 1.3333-percent ownership interest in CR-3 to FPC, FPC will assume responsibility, after the closing date, for funding the decommissioning costs associated with this ownership interest, which would be in addition to those costs associated with FPC's existing l
ownership interest in CR-3. However, the City shall continue to maintain the City's existing non-qualified decommissioning trust fund related to this interest (Decornmissioning Trust Fund) as an external sinking fund outside the City's and FPC's administrative control in accordance with 10 CFR 50.75(e)(1)(ii) pursuant to the Decommissioning Trust Agreement dated February 3, 1992, between the City and NCNB National Bank of Flori,da, Inc. (Decommissioning Trust Agreement).
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. The applicants state in their June 18,1999, supplemental filing, that "FPC believes that the funds available at the time of decommissioning will be greatest if the City retains the funds in its decommissioning trust. Given the City's tax exempt status, FPC expects that the earnings in the City's fund will accrue at a rate greater than if the fonds were transferred to FPC.
Additionally, retention of the funds by We City will avoid potential adverse tax consequences that may occur if the City's funds were transferred to FPC's decommissioning trust fund /'
Upon accrual of FPC's decommissioning obligations with respect to CR-3, the trust funds, including all earnings thereon, will be disbursed to FPC for the decommissioning of CR-3. FPC shall provide the City with a notice setting forth the schedule for the decommissioning of CR 3 and the amounts projected to be expended during each year under such schedule. Thereafter, upon receipt of a duly executed disbursemer t certificate, the City shall disburse monies, which include all earnings thereon, from its Decommissioning Trust Fund to those parties, which may include FPC, that perform any or all tasks associated with decommissioning CR-3 in accordance with the decommissioning schedule provided by FPC.
According to the application, in no event shall the balance, at closing, of accumulated reserves in the Decommissioning Trust Fund be less than $1.1 million in excess of the City's share, as estimated by FPC, of the funding requirement for decommissioning reserves with respect to the transferred 1.3333-percent of CR-3 as Of the closing date. The City shall retain all right, title, and interest in the Decommissioning Trust Fund and shall, at all times, keep such fund invested in accordance whh the rules and regulations (and regulatory guides) of the NRC and the Florida Public Service Commission.
In compliance with 10 CFR 50.75(f)(1), each part-owner of CR-3 has furnished information on the status of their decommissioning funds. As of December 31,1998, FPC had accrued
$309.7 million for its 90.4473-percent share. The NRC staff has calculated that the minimum decommissloriing funding required for the whole plant is $261.9 million (in 1998 dollars).
Therefore, even with the City continuing to posses the appropriated share of the decommissioning funds for the 1.3333-percent share of ownership to be sold to FPC, the staff finds that this arrangement is satisfactory under these facts and circumstances.
In light of the above, the staff finds that FPC has complied with the provisions of 10 CFR 50.75 that deal with decommissioning funding for electric utilities. The staff also notes that the City, as a municipal government entity, is able to set its own rates and thus has an assured source of revenue for decommissioning funding. Therefore, the staff further concludes that, given the considerations previously discussed, the City's decommissioning funding mechanism meets the requirements of 10 CFR 50.75(e)(1)(vi), provided that the following conditions are met:
(1) The use of assets in the Decommissioning Trust Fund shall be limited to the expenses related to decommissioning of CR-3 as defined by the NRC in its regulations and issuances, and ?c provided in the CR-3 license and any amendments thereto.
(2) Decommissioning Trust Fund investments in the securities or other obligations of the City or FPC, or affiliates thereof, or their successors or assigns, shall be prohibited.
in addition, except for investments tied to market indexes or other non-nuclear sector mutual funds, investments in any entity owning one or more nuclear power plants shall be prohibited.
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(3) No disbursements or payments from the Decommissioning Trust Fund shall be made by the trustee until the trustee has first given the NRC thirty (30) days notice of payment. No disbursements or payments from the Decommissioning Trust Fund shall be made if the trustee receives prior written notice of objection from the Director, Office of Nuclear Reactor Regulation, NRC.
(4) The Decommissioning Trust Agreement shall be amended, to the extent necessary, to be consistent with this Order. It then shall not be modified in any material respect without prior written consent of the Director, Office of Nuclear Reactor Regulation, NRC.
(5) FPC should be bound to take all appropriate action through its Acquisition Agreement, and any other contracts with the City, or otherwise, to ensure that the maintenance of, and disbursal of funds from the Decommissioning Trust Fund shall be in accordance with the application. Appropriate conditions of approval of the transfer should be imposed to accomplish the foregoing.
7.0 CONFORMING AMENDMENT 7.1 Introduction As stated previously, FPC has requested approval of a proposed conforming amendment to CR-3 Operating License DPR-72. The requested change deletes the City of Tallahassee from i
the license to reflect the proposed transfer of the license, to the extent held by the City of l
Tallahassee, to FPC.
1 7.2 Discussion The specific changes to be made are on page one of the Operating License. The changes are to delete the City of Tallahassee from the list of owners and to include a footnote referencing the City in paragraph 1.A of the license specifying the amendment by which the transfer of ownership became effective rendering the City a non-licensee. The amendment involves no safety questions and is administrative in nature. Accordingly, the proposed amendment is acceptable.
7.3 CONCLUSION
WITH RESPECT TO THE CONFORMING AMENDMENT The Commission has concluded, based on the considerations discussed above, that (1) there is reasonable assurance that the health and safety of the public will not be endangered by operation in the proposed manner, (2) such activities will be conducted in compliance with the Commission's regulations, and (3) the issuance of the amendment will not be inimical to the common defense and security or to the health and safety of the public.
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8.0 STATE CONSULTATION
Based upon a letter dated March 8,1991, from Mary E. Clark of the State of Florida, Department of Health and Rehabilitative Services, to Deborah A. Miller, Licensing Assistant, U.S. NRC, the State of Florida does not desire notification of issuance of license amendments.
9.0 ENVIRONMENTAL CONSIDERATION
The subject application is for approval of the transfer of a license issued by the NRC and approval of a conforming amendment. Accordingly, the action involved meets the eligibility criteria for categorical exclusion set forth in 10 CFR 51.22(c)(21). Pursuant to 10 CFR 51.22(b), no environmentalimpact statement or environmental assessment need be prepared in connection with approval of the application.
10.0 CONCLUSION
S in view of the foregoing information, the staff concludes that regarding the proposed sale of the City's 1.3333-percent interest in CR-3 to FPC, FPC is financially qualified to meet the operational and maintenance expenses associated with the City's interest in CR-3, once transferred, in addition to such expenses associated with its existing ownership interest.
Furthermore, the technical qualifications of FPC will not be affected in connection with the transfer. Also, there do not appear to be any problematic antitrust or for"eign ownership considerations related to the CR 3 license that would result from the transfer. Thus, the staff has determined that FPC is qualified to be the holder of the license to the extent previously -
discussed, and that the transfer of the license, to the extent eilected by the proposed sale, is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission, subject to the conditions regarding the City's Decommissioning Trust Fund referenced in Section 6.0 of this safety evaluation.
Principal Contributor: M. Dusaniwskyj Dated: SePtamber 8, 1999 l
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