ML20214J705
| ML20214J705 | |
| Person / Time | |
|---|---|
| Site: | Palisades, Big Rock Point, 05000000 |
| Issue date: | 05/21/1987 |
| From: | Reynolds J CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.) |
| To: | NRC OFFICE OF ADMINISTRATION & RESOURCES MANAGEMENT (ARM) |
| References | |
| NUDOCS 8705280167 | |
| Download: ML20214J705 (2) | |
Text
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Executive Vice President EM AIENBEAN'S MtOEftE55 General Offices: 1945 West Pernall Road, Jacksorg MI 49201 + (517) 788-1920 May 21, 1987 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, D.C. 20555 Re: Big Rock Point Nuclear Plant Op License DPR-6 (Docket No. 50-155)
Palisades Nuclear Plant Op License DPR-20 (Docket No. 50-255)
By letter of April 16, 1987, Consumers Power Company notified you of its plan to restructure by forming a holding company, assuming shareholder approval at the May 6, 1987 annual meeting. As we advised you by telephone and letter on the 6th, the shareholders did approve the restructuring plan.
Our submittal of April 16 and May 6, and your Federal Register notice, 52 FR 18300, noted that the restructuring was planned to be effective on or about May 22, 1987.
However, a letter dated May 11, 1987 from your staff to Kenneth W.
Berry, our Director of Nuclear Licensing, asserted that the notice requirement in 10 CFR 50.80(c) precludes NRC from issuing its approval " prior to May 29, 1987."
We hope you will reconsider this position and issue your consent on May 22, 1987 As I am sure you can appreciate, there are a number of arrangements and considerations that would have to be changed if the merger cannot take place on May 22 as planned.
First of all, the Securities and Exchange Com-mission has been requested to declare the registration of the holding company stock effective on May 22.
This registration statement was filed in connection with the request to register and list the common stock of CMS Energy on the New York Stock Exchange.
The request for acceleration to May 22, 1987 will have to be amended should the stock not be admitted for trading on that date.
In addition, the listing application to the New York Stock Exchange asked the Exchange to authorize the listing and registration of CMS Energy common stock by May 22, 1987 in order for such stock to be admitted for trading on that date.
A separate request was filed to delist the common stock of Consumers Power Company ef-fective upon the listing of the common stock of CMS Energy.
The Exchange will have to revise its scheduled certification to the SEC and arrange to notify members of the Exchange of any other date the stock may be admitted to trading.
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2 Of greater substantive importance is the fact that, to preserve certain rights under the Internal Revenue Code, the new holding company must own at least 80% of the total value of all Consumers Power voting stock (see Attachment A to our April 16 filing, at p 15).
If the merger can take place on May 22, it is likely that this test can be met without the holding company having to buy Consumers Power preferred stock on the market. Waiting until May 29 or later could well result in a purchase having to be made, since the price - and hence the "value" - of Consumers Power common stock has been trending downward recently.
A related problem lies in the fact that, to enhance the holding company's ability to meet the 80% test, Consumers Power Company has in recent weeks been refraining from making purchases of its own common stock for various employee benefit plans.
Contributions from employees under the Employees' Savings Plan are being invested in short-term cash equivalents instead of Consumers Power common stock, and purchases of '.he common stock for other benefit programs have been suspended for the eva'uation period.
If that period is extended, and the stock price increases in the interim, participants in the Employees' Savings Plan will lose the benefit of the appreciation, and stock acquisition costs for the other plans would '.ncrea se.
Finally, the restructuring plan contemplates a transfer of the common stock of certain nonutility subsidiaries by Consumers Power to its new sister com-pany, CMS Enterprises Company, in exchange for preferred stock of CMS Enterprises.
This transfer was to take place "at some point after the merger" (see Attach-ment A to our April 16 filing, at p 17).
The price at which these transactions take place depends in part on appraisals of stock values of the various com-panies at the time of transfer.
The Company believes that it will be in its best interests for the transfer to take place as soon as practicable, and appraisals of the subsidiary values are proceeding on this basis.
If your consent, and hence the merger, will be delayed, the appraisals may have to be redone, since the values in question will change over time.
We appreciate your consideration, and hope you will be able to issue your consent in time for us to accomplish the restructuring on May 22.
prs very truly, J.
. Reynolds CC:
Region Administrator, Region III, USNRC NRC Resident Inspectors, Palisades Plant and Big Rock Point Plant