ML20214H002
| ML20214H002 | |
| Person / Time | |
|---|---|
| Site: | Millstone  |
| Issue date: | 11/18/1986 |
| From: | Knotts J BISHOP, COOK, PURCELL & REYNOLDS |
| To: | Scinto J NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| References | |
| NUDOCS 8611260256 | |
| Download: ML20214H002 (19) | |
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LAW OFFICE 4 or BISHOP, LIBERMAN, COOK, PURCELL & REYNOLDS 1200 SEVENTEENTH STREET,N.W.
WASHINGTON, D. C 20036 (202) 857-9800 IN NEW YORM TE LE X 44 Q674 INTLAW US DISHOP, LIBE RM AN & COOM TE LECOPlE R (202) 857 - 9846 1855 AVENUE OF THE AMERIC A5 N EW YORM, N E W TORM 90036 November 18, 1986
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TELEX 222767 Joseph F.
Scinto First Deputy Assistant
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General Counsel for Hearings c,o,)
Office of General Counsel U.S.
Nuclear Regulatory Commission Washington, D.C.
20555 Re:
Ownership Interests of the connecticut Light and Power Company and City of Burlington, Vermont, in Millstone Nuclear Power Station, Unit No. 3
Dear Mr. Scinto:
Enclosed herewith please find a copy of the February 10, 1986 agreement between the Burlington, Vermont Electric Department
("Burlington") and the Connecticut Light and Power Company
("CLandP") pertaining t.o the essentially reversionary transfer of a portion of Burlington's ownership interest in Millstone No. 3 to Connecticut Light and Power Company as provided in the Sharing Agreement under which that unit was constructed.
You will note that in substance, the agreement conveys a portion of Burlington's share in the unit because it was unable to pay for its maximum share, subject only to the typical conditions for closing with respect to fulfillment of certain formal obligations of both purchaser and seller.
See Sections 3 and 5 of the agreement.
Burlington is thus not only on notice of, but a party to the transaction, and is aware of CLandP's responsibility, through Northeast Nuclear Energy Company, as agent for all owners, to provide notice to or obtain certain approvals from certain cognizant gove'nmental authorities, including NRC (see Exhibit 1).
a s & l' g JosepfB. Knotts, Jr.
Coupdel for Northeast Nuclear Energy Company Enclosure as noted
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AGREEMENT TO TRANSFER OWNERSHIP SHARE This Agreement made as of the 1__0_th day of February 1986, by and between The Burlington Electric Department
("Burlington") (the " Seller") and The Connecticut Light and Power Company (the "Purchascr"):
WITNESSETH THAT:.
.....FHEREAS, the Seller owns an undivided joint,ownershig.:;. _..
interest in the nuclear generating unit known as Millstone Unit No. 3 (the " Unit") being co'nstructed at Millstone Point adjacent to Long Island Sound in Waterford, Connecticut and the subject of the Sharing Agreemenii; - 1979 Connecticut Nuclear Unit dated as of September 1, 1973, as amended (the " Millstone Agreement");
and
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...... WHEREAS, notwithstanding' the Sellerf s. e.fforts to secure ".
additional borrowing authority fron.the'. City of Burlington with.. '-..
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which to issue debt securities, the proceeds of which would be.. --
used to pay its proportionate share of capital costs and s
interest, if any, the seller was.not authorized to do so and r
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hence has not paid since February, 1982 its proportionate share of the capital costs of the Unit and has not paid interest on such ovdrdue payments since February, 1983; and WHEREAS, the Purchaser has made and continues to make payments in support of construction of the Unit in amounts sufficient to fulfill its own and, since February,1982, the Seller's obligations under the Millstone Agreement; and WHERIAS, the Purchaser has not been reimbursed by seller for sums paid on its behalf by the, Purchaser since February, 1982, nor has the Purchaser received from the Seller, since February,
'1983, any payment of interest on sdeh sums, as'requiredu'Ed'ai
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the Millstone Agreement; and WHERIAS, under Section 24 of the Millstone Agreement, the i
seller has the right to transfer to the Purchaser its ownership interest in the Unit, and the Purchaser has the obligation under said Section 24 to purchase such interest; and i
WEIRIAS, the Seller wishes to transfer to the Purchaser a
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portion of its ownership interest in the Unit in full satisfaction of its outstanding obligations to the Purchaser as l
aforesaid, and the Purchaser is agreeable to such transfer, t
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3-NOW, THEREFORE, in consideration of the mutual undertakings set forth herein, the parties agree as follows:
1.
Definitions The term ownership Share shall include the interests of the Seller in the Unit, the nuclear fuel for the initial core for the Unit, the Location and the associated rights, subject to the liabilities and obligations appurtenant thereto.
Unless otherwise defined in this Agreement,, all capitalized terms used herein shall have the definitions thereof set forth in the Millstone Agreement.
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2.
Transfer by the Seller to the Purchaser i
Upon receipt of all necessary regulatory approvals and satisfaction of the other conditions set forth in this Agreement, the Seller shall transfer and ronvey to the Purchaser a 0.3215% ownership interest in the Unit (approximately 3.698 MW based on an 1150 MW rating of the Unit) (such interest being hereinafter referred to as the " ownership Share").
The Seller
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shkil retain, subsequent to such transfer; a 0.0435% ownership interest in the Unit (approximately.5 MW based on an 2150 MW rating of the Unit).
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The Seller represents and warrants to the Purchaser, knowing
,that the Purchaser intends to rely thereon, that all regulatory approvals necessary for the Seller to consummate the transactions contemplated herein are specified in Exhibit 1 4
hereto.
For purposas of this Agreement issuance of regulatory approvals shall mean issuance by the, appropriate governmental official or agency and expiration of any applicable appeal period.
Subject to the time and other limitations otherwise referred to in this Section 2, the transfer shall take place not later than 15 days a5ter the date on which all of the regulatory j
approvals referred to in Sections J'and 4 have~been obtai* Eel"(or if such date is not a business day the first business day l
thereafter) or on such other date as the Seller and the Purchaser may agree upon (the " Closing Date").
The transfer shall take place at an hour and at a place mutually agreed upon by the Seller and the Purchaser.
l In connection with said transfer, unless otherwise mutually agreed, the Seller and the Purchaser agree to cooperate and to use their best efforts (i) to cause applications for all I
i approvals required for consummation of the transactions
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i contemplated hereby to be initiated promptly after the execution of this Agreement and oth'erwise to obtain, in accordance with
4-4 the schedule contemplated by this Agreement, all necessary regulatory approvals and any required mortgage indenture releases, and (ii) to take any other action necessary to implement this Agreement.
Such transfer shall be made $n accordance with the terms of this Agreement and is expressly subject.to all of the applicable provisions of the Millstone Agreement.
l 3.
Conditions to Purchaser's Obligations j
Unless otherwise waived by the Purchaser, the obligation the
' ' Purchaser to purchase the ownership. Share pursuant to thli* ~"
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Agreement is subject to the fulfillment, prior to or at the time of transfer, of the following conditions:
(a) The Purchaser shall have obtained all required regulatory approvals.
Such approvals shall be in full force and effect on the Closing Date. rod such regulatory approvals shall not contain any condition of purchase which, in the opinion of the Purchaser, is' unduly. burdensome to it; provided, however, no condition in any such. approval shall be deamed unduly burdensome to the Purchaser unless, within seven (7). days of the date of receipt of the approval, the Purchaser shall have given the Seller written notice,dnat, in its opinion such condition is unduly burdensome.
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't (b)
On the Closing Date the Seller shall have delivered to the Purchaser:
(i)
Certified copies of resolutions duly adopted by its Board of Electric Commissione;s approving the execution and delivery of this Agreement, authorizing the performance by the Seller of this Agreement, and authorizing all other action necessary to enable the Seller to comply with the terms of this Agreement.
(ii)
To the extent Burlington City Council
-approval is required, certified copies of resolutions duIf3 -
adopted by the City Council approving the sale of the ownership Share.
(iii)
A good and sufficient quitclaim deed l
warranting only against defects in the title based on any 7
actions by the Seller during its period of ownership and conveying said interest free and clear of the lien of 3eller's l
mortgage indenture, if any, but subject to the restrictions, i
l reservations, covenants and conditions set forth in Exhibit 2 hereto (the." Restrictions").
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(iv)
An opinion, dated the Closing Date, of Messrs. McNeil, Murray and Serra11, Incbrporated, counsel for the Seller, in form and substance satisfactcry to the Purchaser and its counsel, to the effect that:
(A) The Seller is a public instrumentality and political subdivision:of the State of Vermont and is duly organized and validly existing in goed standing under the laws
'of' Vermont, haspowertosell,hansferanddeikverthe
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Ownership Share and to carry out its obligations under this Agreement and has taken all necessary actions to comply with the terms of this Agreement;.
(B) This Agreement has been duly authorized, executed and delivered by the Seller and is the legal, valid and binding obligation of the Seller enforceable in accordance with its terms, subject only to the qualifications that enforcement of the Agreement nay be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights and that the remedy of specific performance and other equitable remedies are' within the discretion of the enforcing court; l
(C) The er.ecution and delivery by the Seller of the Agreement, and the performance by the Seller of its other
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o violate or conflict with, or result in any default under any provision of the Certificate of Incorporation or Charter and Bylaws of the Purchaser, or of any indenture, instrument or agreement known to such counsel to which the Purchaser is a and party or to which it or any of its properties is subject; (D)
All appropriate federal and state all regulatory agencies have issued, and there are in effect, required orders as to the Purchaser with respect to the purchase of the Ownership Share; such orders are appropriate and sufficient therefor; the' purchase of the Ownership Share is in conformity with the terms of such orders; and no other approval,
' consent or action of any governmental authority is legally 2'--
required for purchase by the Purchaser of the provisions of this Agreement.
(c) All of the representations by the Purchaser contained in this Agreement shall be trueLand correct at and as of the Closing Date, 'except for changes contemplated and permitted by this Agreement, with the same force and effect as though made at and as of the Closing Date, and the Parchaser shall have delivered to the Seller an officer's certificate of the Purchaser to that effect.
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f (d) The Purchaser shall have performed and complied with all agreements and conditions contained herein which are required to be performed and complied with by the Purchaser before the Closing Date.
5.
Representations of Seller l-The Seller hereby represents and warrants to the Purchaser:
(a) The Seller is a public instrumentality and a f
political subdivision of the State of Vermont, is duly organized and validly existing in good standing under the laws of Vermont and-has adequate power to transfer -the Ownershi'p Share and to-.
carry out its obligations under this Agreement.
(b) Insofar as it may relate directly or indirectly to i
the Ownership Share, there is no material litigation pending, or to the best of Seller's knowledge threatened, against the I
Saller, other than suits' or claims for personal injury or
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property damage for which adequate insurance coverage exists.
(c) There are no liens or charges created by the Seller since the acquisition of its ownership interest in the Unit on such ownership interest or any part thereof except as permitted or contemplated by the Millstone Agreement.
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(d) The Seller has full right, power and authority to execute and deliver this Agreement, and all action of the Seller necessatry for the execution, delivery and consummation of this Agreement has been duly taken.
6.
Representations of Purchaser The Purchaser hereby represents and warrants to the Seller:
(a) The Purchaser is a corporation duly organized and validly existing in good standing under the J aws of the state of itsincorporationandhasadequatecorporatepowertopurchase "and own the Ownership Share and to' carry out its obligatlESs ~
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under this Agreement.
(b) The Purchaser has full right, power and authority to execute and deliver this Agreement, and all corporate action of the Purchaser necessary for the execution, delivery and consummation of this Agreement has been duly taken.
l 7.
Rights and obligations under the Millstone Agreement Prior to Completion of the Transfer from the Se,ller to the Purchaser in consideration of the transfer by Seller of the ownership Share, the Purchaser shall continue to pay until the commercial l
operation date of the Unit (prerently scheduled for May, 1986)
.the costs of all capital items (as defined in Section 24'of the Millsto5e Agreement) associated with the Seller's present 0.365%
ownership interest in the Unit except for costs of nuclear fuel as provided for in the next paragraph of this Section 7.
If the Closing Date is later in time than the date of commercial operation, the Seller shall pay all costs, incurred prior to the Closing Date, associated With the operation and maintenance of the Unit to the extent of Seller's 0.0435% post-transfer ownership interest in the Unit, and the Purchaser shall pay all costs, incurred prior to the Closing Date, associated
' ' 7in~ the operation and maintenance' ~of the Uniti to the ex$55t'6f ~
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Seller's 0.3215% ownership interest transfer being' transferred.
Prior to the date of commercial operation, the Seller shall pay all costs associated with the operation and maintenance of transmission and common facilities already in service to the extent of seller's.0.0435% post-transfer ownership interest.
The Seller shall also pay all costs of nuclear fuel for the Unit (other than costs,related to the initial core) to the extent of Seller's 0.0435% post-transfer ownership interest.
The Seller agrees that the Purchaser shall be entitled,"to the extent of the Seller's 0.3215% ownership interest. in the x
Unit being transferred, to the benefit of any and all'entrgy
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generated by the Unit prior to the closing Date.
The Purchaser
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shall receive such benefit without being required to compensate the Seller.
The Seller shall notify the New England Power Exchange and other appropriate authorities of such energy entitlement.
8.
Rights and Obligations under the Millstone Agreement Upon Completion of.the Transfer from the Seller to Purchaser i
Upon the completion of the transfer to the Purchaser in accordance with the provisions hereof, the Purchaser shall, to the extent of che ownership Share thereby acquired, succeed to the Seller's rights and obligations under all contracts, leases,
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insurance policies and other instruments relating to the Unit and shall, to such extent, be substituted for the Seller on all such contracts, leases, insurance policies'and other instruments.
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The Seller, upon completion of the transfer to the Purchaser i
in accordance with the provisions hereof, shall bear full and sole responsibility for all of its obligations under the Millstone Agreement.to the extent such obligations arise as of the date of such trarsfer or thereafter and to the extent of the i
l 0.0435% ownership interest it shall retain subsequent to such
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9.
Costs of Transfer Pribr to or at the time of the transfer herein contemplated, Seller will pay, or reimburse Purchaser for, one-half (1/2) of all conveyance taxes, recording fees, and filing fees and attorneys' fees incurred by the Purchaser in connection with the preparation of this Agreement and the obtaining of required regulatory approvals, and other expenses related to the transfer contemplated by this Agreement.
10.
Limitation of Liability as a result of breach of this'Agreementf 5 hall
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In no event, either party be liable to the other for consequential losses or damages (including, without limiting the generality of the i
foregoing, loss of anticipated profits, loss of revenue, inventory or use charges, cost of purchased or replacement cost of capital or claims 'f customers).
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hrmination N s Agreement shall terminate on. December 31,1986, if by
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that date the conditions set forth in Sections 3 and 4 hereof l
have not been fulfilled; provided, however, the effectiveness of this Agreement may be extended beyond such termination date by a l
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.-y written agreement entered into by the Seller and the Purchaser.
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. Any such termination shall be without liability of either party to the other.
22.
internretacion "his Agreement shall be construed and enforced in accordance Vi?.h the laws of the State of Connecticut.
13.
Entire Ac eement Except to the extent that d s Agreement is made st ject to the provisions of the F.111stene Agreement, " 's Agreenen: shall constitute he en ire understanding between the parties,
. superseding any and all previous understandings per aining to the subject matter contained herein.
IN WIDESS h---Gor, the parties have caused
"-d s Agreemen:
T.o be signed by their respective authorized officers.
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EXHIBIT 1 Acerovals Recuired by Seller A.
Reculatory Reculatorv Anprovals Recuired by Purchaser B.
1.
Nuclear Regulatory Commission.
3 Connecticut Department of Public Utility Control.
2.
Securities and Exchange Commission pursuant to the 3.
Public Utility Holding Company Act of 1935.
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J Exhibit 2 THE RISTRICTIDNS
'This conveyance is made subjset to the following convenant, surrendar and waive'r, and each of the Releasors (Seller) and the Raleasees (Purchaser), for itself, its successors and assigns, including nortgagees, receivers, trustees and other representativas, by the granting and
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acceptance hereof, covenants and agrees with sach of the other Releanors and Relemaees, as part of the mutual consideration for this conveyance so'long, and as a covenant running with the land hereby conveyed, that, as the premises hereby conveyed continue.to be used or useful for an -
electric generating unit or for the term specified in Section 30 of the Millstone Agreement, whichever is less, neither it nor any of its successors or assigns, including mortgagees, receivers, trustees and other represen-
"tatives, will commence or maintain any proceeding in any court or ce St._
forum for the purpose of or which might result in partition by division or sale, in whole or in part, of the ' premises described herein or the improvements or utility facilities of.any nature now existing or hereafter placed on said premises, and each Releasor and Releasa.e, for itself, its successors and assigns, including mortgagees, receivers, trustees and F
other representatives, he.reby surrenders and waives, for such period.
all rights so to partition the said premises, improvements and utility f acilities, whether such right may arise under the comenon law or-ty
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statute,:nd whether any such rights may now exist.or.hereafter accrue.
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Further, this conveyance is made and accepted upon t'he following in the event of default by any Ralmasse or condi. tion subsequent, viz.:
the successors or assigns of any of them in any obligation it or they may have under the Millstone Agreement, and as a result of which default the Releasors, their successors or assigns elect to terminate all rights of the defaulting Rele asse, its successors or assigns under asid Millstone Agreement in accordance with Section 24 thereof, said def aulting Releasee, its successors or assigns shall convey, transfer and assign to the Releanors or their designees, in such proportions as they may designate, in and.to the premises described all its right, title and interest herein, including the appurtenances thereto and the improvements or utility facilities of any nature now existing or hereafter pieced on
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transfer and assignment s' hall be subfact.--.
sa12kr'emises. Such conveyance, to obtaining the necessary regulatory approvals and mortgsge indenture releases, if applicable, which the defaulting Releasee agrees to use its l
best efforts to obtain promptly. $ailurebytheReisesors,theirsucces-sors or assigns to-take advantage of any breach of the foregoing condition 3
subshquent shall not constitute or be construed as a waiver of the
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rights of said Releasors, their successors or assigns of such or any l
The foregoing condition subsequent shall
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subsequent breach or def ault.
centinue in full force and effect for the tern specified in Section 30 of the Millstone Agreement.
9.
Each Releasee shall have, without need for consent f ros or prior offer to any other tenant in common, the right At any tim'e or from
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including time to time to give or convey any form'of security interest, but not limited to a mortgage, in, or to convey to a trustee or trustees
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3 as security f or its present or future bonds or obligations or securities, Any all or any portion of its interest in the premises hereby conveyed.
auch security-interest sha11 be subject to all the terms and conditions Subject to such terms of this Leed, including the Millstone Agreement.
and conditions, any such trustee or trustees, mortgagee or holder cf a security interest, any successor or assige thereof, and any receiver or trustee in bankruptcy, reorganisation or receivership r.f the Releasee may, without need for consent of any other tenant in crasson, succeed to and acquire al'1 rights of the Releasse under this Deed including the Millstone Agreement.
Further, this conveyance is made and accepted subject to the other conditions, limitations and restrictions set forth in the Millstone
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Section
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including, but without limitation, those set forth in Agreement, 19 (other Uses of the site), section 22 (Rights re Transfer of ownership Shares), Section 30 (Ters), and Section 31 (Miscellaneous) thereof, each of which is and shall for all purposes of this conveyance be deemed to be a covenant running with the 1.ande 0
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