ML20215K999
| ML20215K999 | |
| Person / Time | |
|---|---|
| Site: | Braidwood  |
| Issue date: | 05/06/1987 |
| From: | Cassel D BUSINESS & PROFESSIONAL PEOPLE FOR THE PUBLIC INTERES, ROREM, B. |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| CON-#287-3354 OL, NUDOCS 8705120064 | |
| Download: ML20215K999 (123) | |
Text
'l UNITED STATES OF AMERICA W
D:v y N Y-N/
- (g NUCLEAR RUGULATORY COMMISSION
,J !
/rfg, 19871 -};
v BEFORE THE ATOMIC SAFETY AND LICENSING BOARD cre$guc4 gS
- 4. hicu h
/,
In the Matter of:
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)
N COMMONWEALTH EDISON COMPANY
)
Docket Nos. 50-456 --d7
)
and 50-457 (Braidwood Nuclear Station,
)
Units 1 and 2)
)
MOTION TO ADMIT LATE-FILED CONTENTION ON FINANCIAL QUALIFICATIONS Intervenors Rorem, et al., pursuant to 10 CFR Section 2.417, by their undersigned attorney, move the Board to admit the attached late-filed contention concerning the financial qualifications of the potential new co-licensees of Braidwood.
In the alternative, pursuant to 10 CFR 2.758. Intervenors ask the Board to certify to the Commission the question of whether the Commission rule barring consideration of financial qualifications of regulated utilities in licensing hearings should not be applied in the special circumstances of Edison's proposed new arrangement for the ownership and financing of Braidwood.
THE CONTENTION The proposed new contention is based on Edison's April /6, 1987 flling with the Office of Nuclear Reactor Regulation, received by Intervenors' counsel on April 20, 1987.
Although the filing is by terms limited to seeking an amendment of the operating license for Byron 2, it indicates that Edison proposes the same new ownership and financing arrangements for Braidwood.
In essence, Edison's proposal, which the Company hopes to kh 0
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~f effectuate by July 1, 1987, is to transfer ownership of Byron 2
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and Braidwood 1 and 2 to a newly created Edison subsidiary, and for Edison and the subsidiary to become co-licensees of the three reactors.
(For a summary of the relevant financial and ownership arrangements, see Exhibit B hereto, letter from the undersigned to Mr. Thomas Murley dated April 29, 1987, pp.
2-4.
For complete details, see Exhibit D hereto Edison's April 16, 1987, application to Mr. Murley, and attachments thereto.)
As a result of these arrangements, neither co-licensee can show that it has the requisite financial qualifications - the subsidiary for lack of assured financial resources, and Edison because of constraints.on its ability to subsidize the new subsidiary.
(See id., pp. 2-6.)
Accordingly, Intervenors' proposed new contention (Exhibit A hereto) states that Edison, upon adoption of the new arrangement will no longer be an " electric utility" within the meaning of the NRC financial qualifications rule with respect to Braidwood, and cannot show that it has assurance of the financial qualifications necessary to complete construction, operate and maintain, backfit and decommission Braidwood safely.
l THE FIVE FACTORS Intervenors' proposed late-filed contention satisfies the five factor test of 10 CFR Section 2.714 for admission of late-filed contentions, for the following reasons:
1.
Good Cause Edison's new proposal was first executed in the form of an agreement between the company and various state officials on 2
r February 3, 1987 (Exhibit A attached to Exhibit D hereto).
That agreement was submitted on or about that date to the Illinois Commerce Commission for state regulatory approval.
A ruling by the state is presently expected by July 1, 1987.
However, many key specifics were not detailed in the February 3 agreement.
They were contained instead in a series of f urther agreeme:tts (Exhibits B, C, D and E attached to Exhibit D hereto), filed with the Illinois Commerce Commission on March 5, 1987, and served by mail on the undersigned counsel.
Moreover, the precise NRC licensing arrangements Edison would propose, at least with respect to Byron 2, did not become clear and definitive until Edison made its April 16 application concerning Byron 2 (Exhibit D hereto, and specifically Exhibit F thereto), which was trar.smitted to the undersigned on April 20, 1987 (Exhibit C hereto).
Indeed, Edison has yet to propose specific NRC licensing arrangements for Braidwood.
Even without such arrangements having been filed, Intervenors are proceeding to file this contention on the assumption that Edison intends to propose essentially the same licensing arrangements for Braidwood as for Byron 2.
In sum, Intervenors have good cause for late filing because Edison's proposal was not executed until February 3, 1987, and its specific NRC-related provisions were not made clear to Intervenors until April 20, 1987.
Indeed, because the February 3 agreement (17) provided that Edison was responsible "to use its best efforts to accomplish the regulatory... actions described 3
i in Paragraph 6 as promptly as practicable," including (16B) 7 f
" Timely grant of' Nuclear Regulatory Commission approval of transfer of the units and their licenses to the Subsidiary,"
Intervenors reasonably expected Edison to file all necessary applications with the NRC well before April 16, and reasonably awaited those applications before filing this contention.
Intervenors are frankly surprised that Edison has yet to file an application specifying its proposed licensing arrangements for Braidwood.
- 2. and 4.
Other Means, Other Parties Intervenors are not aware of any forum or means, other than before the NRC, effectively to present their concerns regarding the lack of financial qualifications of Edison and its subsidiary to operate Braidwood safely.
No other party has undertaken to represent Intervenors' concerns before the Commission.
The NRC Staff has not yet taken a position on the issue to our knowledge, and in any event represents interests different from those of Intervenors.
3.
Sound Record Intervenors' counsel is well informed on Edison's new proposal for ownership and financing of Braidwood.
Counsel participated in lengthy negotiations over the proposal, and counsel's employer (BPI) is an active party intervenor in the state regulatory proceedings (Exhibit B hereto, p. 2).
The Board can also judge the likely contribution of Intervenors and their counsel, based on their track record on the QC inspector harassment issues.
4
The financial qualifications issues themselves are such that a hearing on them will contribute to a sound record.
The questions about the qualifications of Edison and its subsidiary are serious (Exhibit B hereto, pp. 2-6) and of safety significance (id., pp. 6-8).
5.
Broadening and Delay Litigation of a new issue inherently broadens the issues and could lead to delay of the ultimate ruling by the Board.
Nonetheless, the other factors discussed above outweigh this factor.
In particular, if Edison had wished to avoid any delay of its Braidwood license, it could have sought NRC approval of its proposal with respect to Braidwood weeks or months ago.
SUMMARY
OF THE FIVE FACTORS The first four factors, all of which support admission of the contention, outweigh the fifth factor.
Accordingly, the contention should be admitted.
EXCEPTION UNDER 10 CFR 2.758 For the reasons stated in Exhibit B hereto, pp. 4-5, the NRC rule barring consideration of financial qualifications of
" electric utilities" in operating license hearings does not apply in this case.
However, if the Board determines that it does apply, Intervenors request that an exception be made for the special circumstances of this case, for the reason stated in Exhibit B hereto, p. 6.
5
i CONCLUSION Intervenors' late-filed contention should be admitted.
Neither Edison nor its proposed subsidiary qualifies as an
" electric utility" with respect'to Braidwood.
In the alternative, if_the Board determines that the rule barring hearings on financial _ qualifications of " electric utilities" is-applicable to this case, Intervenors urge the Board to certify to 1
the Commission, pursuant to 10 CFR 2.758, whether an exception should be made because of the special circumstances of Edison's new proposal for ownership and financing of Braidwood.
DATED:
May 6, 1987 Respectfully submitted, vir/b-[M V
/
Douglass W.
Cassel, Jr.
One of the Attorneys for Intervenors Rorem, et al.
Douglass W. Cassel, Jr.
Robert Guild Robert L. Jones Business and Professional People for the Public Interest 109 North
Dearborn,
- 1300 Chicago, Illinois 60602 (312) 641-5570 6
. ~
vi' UNITED STATES OF AMERICA-3
- 2' NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING' BOARD In.the Matter of:
)
-)
COMMONWEALTH. EDISON COMPANY
)
Docket-Nos.40-456
)-
and 40-457
'(Braidwood Nuclear-Station,
)
Units 1 and 2)
)
CERTIFICATE OF SERVICE I hereby certify that I have served copies of Intervenors' Motion to Admit Late-Filed Contention on Financial-Qualifications-on each of the parties to this proceeding by having said copies i
[
placed in envelopes, properly addressed.and postaged (First Class
}
Mail) and deposited in the U.S. mail at 109 North
Dearborn,
Chicago, Illinois 60602 after close of business onlthis 6th day t
of May, 1987.
The Licensing Board and Docketing and Service Section have been served full copies of this filing by_ Federal Express overnight delivery.
All other-parties have been served t
p, j
copies of the Motion (except for Exhibits B, C and D) by regular f
mail.
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craf b [ o l
Douglass W. Cassel,.Jr.
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Exhibit A g
INTERVENORS' FINANCIAL QUALIFICATIONS CONTENTION Under-the proposed restructuring of the ownership and financing'of Braidwood, set forth in Commonwealth Edison Company's April 16, 1987, letter to Thomas E. Murley, Director of the Office of Nuclear Reactor Regulation of the U.S. NRC'and attachments thereto, copies of which are filed with this contention, neither Edison nor its proposed subsidiary possesses the financial qualifications necessary to operate and maintain, backfit and decommission Braidwood Units 1 and 2 safely, as required by the Atomic Energy Act, 10 U.S.C. SS2133(b) and q
2232(a) and 10 CFR 50.33(f), 50.40(b) and 50.57(a)(4).
The specific reasons why the proposed co-licensees lack the requisite financial qualifications are detailed in the letter of
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April 29, 1987, from Douglass W. Cassel, Jr., one of the counsel for Intervenors Rorem et al., which is being filed herewith and is incorporated herein by reference.
Moreover, neither Edison nor its proposed subsidiary is an
" electric utility" within the meaning of 10 CFR 50.2(x), for the reasons set forth at pp. 4-5 of the aforementioned April 29
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letter.
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Business and Professional People for the Public Interest
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- Chicago. hhnois 60602 Telephone- (3:2) 6415570 j
BY FEDERAL EXPRESS April 29, 1987 Thomas E. Murley, Director Office of nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Re:
Byron Station Unit 2 j
Application by Commonwealth Edison Company for Amendment to Facility Operating Licence NPF-6 and Appendix A, Technical Specifications NRC Docket No. 50-455 l
Dear Mr. Murley:
Business and Professional People for the Public Interest (BPI) and the Sinnissippi Alliance for the Environment (SAFE),-
by their. undersigned attorney, urge the NRC not to approve Commonwealth Edison Company's request for an amendment of the operating. license for Byron 2, and not to determine that no significant hazard exists, without first holding adjudicatory hearings on the serious financial qualifications issues raised by Edison's proposed restructuring of the ownership of Byron 2.
In addition, BPI and SAFE believe that serious antitrust i
issues are raised by Edison's proposal, as more fully set forth
.below.
SAFE has long been one of the intervenors in the operating license hearings on Byron.
Among other issues, SAFE long ago raised questions concerning Edison's financial qualifications (FQ) to operate Byron.
However, SAFE's FQ contention was dismissed after the NRC amended its rules to preclude case-by-case FQ review for regulated utilities, i
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BPI is a non-profit law center.
Its attorneyu represent SAFE and other intervenors in the Byron operating license proceeding.
In addition, BPI.was one of the consumer groups-participating in extensive, unsuccessful negotiations with Edison over the conpany's proposal to restructure the ownership of Byron 2 and Braidwood 1 and 2.-
BPI is an intervenor in the current proceedings -before the Illinois Conmerce Commission in whicn Edison seeks state regulatory approval of the proposal.
L I.
THE EDISON PROPOSAL.
Edison proposes to alter the ownership and financing a.
arrangements for Byron 2 and the 2 Braidwood units in a manner that will significantly affect the financial qualifications of j
the proposed co-licensees (Edison and its subsidiary, the Central Illinois Electric Generating Company), as well as raising new dntitrust Concerns.
1
-In summary, Edison will transfer ownership to the j
subsidiary, whose sole assets will consist of these three units.
(Memorandum of Understanding ("MU"), 51.)
During-the first five years, Edison will buy energy produced by.the three units at fuel
~
cost.-
(Id.,.15.)
The subsidiary's only other incore, except'for bonus payments in the event the three units' output exceed
. projections (id.), will be monthly capacity payments of $55 million.
Id.
Edison officials have repeatedly explained that these capacity payments are projected to be enough only to cover i
the subsidiary's depreciation' costs, projected O&M costs, and return on debt.(but not on equity).
(E.g.,
Deposition of Edison 4
Vice President George Rifakes in Illinois Commerce Commission Docket 87-0043, April 28, 1987.
Transcript not yet available.)
i
. Thus, if O&M costs of'the units' exceed projections, or if P
substantial backfit costs are required, the subsidiary may well lack sufficient funds to cover these-costs.
Indeed, the proposed
+
Financing Agreement ("FA") expressly recognizes that in order to meet its obligations, the subsidiary "may be required to make expenditures in excess of the revenues received by it from sales of power."
(FA, Art.I(b).)
During this five-year period, Edison itself commits to make all necessary O&M and backfit expenditures for the three units.
(MU, 51; Construction and Operating Agreement, 54.) However, Edison's ability to carry out ~this commitment is significantly constrained.
Edison is to be reimbursed by the subsidiary for all such expenses.
(Id., St3,5,7.)
In the event the subsidiary lacks sufficient fundiT Edison cannot simply "give" the subsidiary funds, because the agreement expressly prohibits Edison from providing any subsidy to the subsidiary.
(MU tl.)
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.The only'other~ planned alternative source.of funds for the subsidiary would be loans,-capital advances or' capital contributions by Edison..
{FA, Art. II,III.)
However, these.too i
may well not be~available.
The agreement recognizes that the affiliated interest provisions of the. Illinois Public Utilities i
Act will govern relationships between Edison and the subsidiary.
(MU,.11.) Under.those provisions, the Illinois Commerce
. Commission would be. precluded from approving such loans, advances or contributions,lunless the subsidiary has a sufficient 4
assurance of being able to repay the loan or pay a return on the 1
contribution.
(See Ill.Rev. Stat. lil-2/3,Ss7-101,102.)
Given.the subsidiary's limited assets and limited income, if the' expenses required to meet NRC standards for O&M or-retrofits substantially
- exceed projections, it is unlikely that the Illinois Commerce-Commission would allow Edison to pour money into a failing subsidiary.
Finally, even if Edison were to be permitted.tc provide
~
funds to the subsidiary, Edison itself would have mixed incentives at best.
Because of the five-year rate freeze,-Edison would be unable to recover any extra costs trom ratepayers.
(MU,.112-4.)
The foregoing difficulties undermine the financial
- gualifications of the subsidiary, and of Edison with respect to Byron 2, during the first five years.
After the first five years', the FQ picture is even worse.
I The proposal contemplates.that the-Illinois Commerce
- Commission will select one of three ' options to govern the period from year.six through the end of the NRC operating license for Byr'on 2.
(MU 15.)
i Under the first option, all three units'are in the marketplace.
(MU, 15a.)
If the' market for nuclear power-is strong, the subsidiary may do well.
But if the market is weak, the subsidiary has neither any assured demand for its power, nor L
any' assured floor under the price at which its power may be sold.
(FERC may or may.not regulate the price the subsidiary msy charge, but FERC can offer no assurance that any customers will be willing to buy the power at all, let alone at the offering i
i price.)
-Indeed, Edison admits as much.
In its Antitrust Review,
- Attachment 2 to its letter of April 16, 1987 to Mr. Murley, I
Edison notes, "The. Subsidiary, unlike Edison, has no service b
territory and thus, has'no' assured market for power.
This means that the Subsidiary may be unable to sell the power at prices equivalent'to those permitted by regulation.
In that
- circumstance, the power will be sold at rates determined by competitive market forces."
L 3
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Moreover, under this option, the subsidiary is no longer
-entitled.to rece ve capacity payments from Edison.
(Power Supply i
Agreement,-54.1.) Its only income is f rom whatever payments it-negotiates for the power it sells; if Byron 2 were to be shut e
down, one third'of the subsidiary's income-earning potent'ial would be unavailable.
~Meanwhile under'this option, Edison continues after year 5 r
to.be. constrained with respect to Byron 2 by'the Illinois Public-Utilities Act (MU, 91), and by the prohibition in the Memorandum of Understanding on the' subsidiary.
Id.
The second option does contemplate a life-of-plant power purchase contract for Byron 2 (though not necessarily for either of the'Braidwood units).
(MU, 45b.)
However, if the midwest market for nuclear power continues :o.be a buyer's rather than a seller's market, the Illinois Commerce Commission is unlikely to select this option.
1 The third' option is'merely an extension for three more years of the' financial relationships between Edison and the subsidiary prevailing in the first.five years.
After the three year extension, the Illinois Commerce Commission would still.be left to' decide between the first two options.
(MU, 55c.)
II.
FINANCIAL QUALIFICATIONS.
B BPI and SAFE suggest.that if the proposed restructuring is accomplished, neither Edison nor its proposed subsidiary will be.
4 an " electric utility" as defined in 10 CFR 50.2(x).
Neither Edison nor the subsidiary, therefore, will be exempt from FQ review,-under 10 CFR 50.33(f), 50.40(b) and 50.57(a)(4).
In the alternative, in the event the foregoing suggestion is i
rejected,- BPI and SAFE urge the NRC to find that even if the FC exemption rule technically applies, Edison's new proposal creates-an exceptional case in which " case-by-case _-litigation of the l'
tinancial qualification.of such applicants is warranted."
49 Fed. Reg. 35747 at 35750.
Under either alternative, the seriousness of the FQ proposal warrants an adjudication hearing on its requested amendment prior
- to any finding of no significant hazard.
10 CFR 50.91, 50.92.
Under t*3 second alternative, an exception to the FQ exemption f
rule should.be made for the hearing, pursuant to 10 CFR 2.758 on the ground that Edison's new propos al, and the financial relationships and conditions it would create, constitute "special circumstances."
See 49 Fed. Reg. at 35751.
4 l
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A.
Neither Edison Nor The Subsidiary'Is An " Electric Utility."
For' purposes of the exemption from FQ review, an " electric utility"'is one which generates or. distributes electricity and "which recovers the cost of this electricity, either directly or indirectly,.through rates established by the entity itself or by a separate regulatory. authority."
This definition must be applied, over the 40-year period of the operating license, since applicants mu'st show their financial qualifications "for the period of the' license."
Neither Edison nor the subsidiary meets this cost-recovery test with respect to Cyron Unit 2.
Neither purports to set rates-itself.
Each relies instead on an alleged " separate regulatory
-authority".to set rates sufficient to recover its Byron 2 costs.
In fact, as shown below, no such regulatory authority exists for either entity.
In the case of Edison itself, under the proposal the company, until now a regulated utility, would become the parent
-company of two major components.. One would continue as a regulated utility under-the jurisdiction of the Illinois Commerce Commission; it would include all Edison's generating stations other than Byron 2 *and Braidwood 1 and 2.
The other component, the subsidiary owning Byron _2 and Braidwood 1 and 2, would not be under the rate-setting jurisdiction of the Illinois Commerce Commission.
(MU, 51.)
While the Edison proposal contemplates that FERC would regulate the subsidiary's rates (although, it should be noted, Edison has yet to file its proposal in any manner with FERC), any such FERC regulation would not assure cost recovery by the subsidiary.
Under the Memorandum of Understanding ($6(c); see also Power Supply Agreement, 54.3) FERC would be asked not to upset the terms of the agreement which, as discussed at length in Part I above, expressly contemplate less than full ccst-recovery.
- Thus, FERC'would not qualify.as a " separate regulatory authority" under 10 CFR 50.2(x), and the subsidiary would not qualify as an
" electric utility" as defined therein.
By the same token, since Edison itself would no longer have assured cost recovery from its ratepayers of costs associated with Byron 2, which would be owned by the subsidiary, Edison would not be an ' electric utility" under 10 CFR 50.2(x) with respect.to Byron 2.
Stated otherwise, Edison would become'a two-part company.
One part would continue to be an " electric utility," while the other would not, and Byron 2 would be in the part that would not continue to be an " electric utility".
p
'B.
Even If. Edison'Or The Subsidiary Were Deemed To Be An
- " Electric Utility," An Exception To'The FQ Exemption Should Be-Made, Due To Special Circumstances.
The rule. exempting regulated electric utilities from case-by-case FQ review rests "on the-generic conclusion that the rate process assures for regulated electric utilities (or those
. utilities able to set their own rates) the funds needed for safe
' operation of a nuclear power facility."
49 Fed. Reg. at 35755 see jil. at 35748, 35749-50.
.tChairman Palladino);
j As shown in Part I above, neither the Illinois Commerce Commission nor the FERC " rate process" will, 'under Edison's proposal, any-longer assure that all funds needed for operation of Byron 2 will be available.
'This case is thus one of those "special circumstances" in-which an: exception to the FQ rule, pursuant ~ to 10 CFR 2.785, was expressly contemplated:
For example, such an exception to. permit financial qualificationsreview.for an operating license applicant might be appropriate where a threshold' showing is made that, in a particular. case,_the
" local public utility commission will not allow the total cost of operating the facility to be recovered through rates.
49 Fed. Reg. at 35751.
Accordingly, even if it were_ deemed that Edison'or the subsidiary qualifies as an " electric utility" under-10 CFR
.50.2(x), an exception to the rule against FQ review should be made in this case.
C.
A Finding Of No Significant Hazard Should Not Be Made, And Certainly Not Prior To Hearing, In The Face Of-Serious FQ Questions.
Under 10 CPR 50~.92, a finding of no significant hazard is warranted.only when operation of the facility in.accordance with
'the proposed amendment "would not:
(1) Involve a significant increase in the probability.
of an accident previously evaluated; Serious FG issues, such as those raised by Edison's
- proposal, do involve a significant increase in accident probability.
As Cormissioner Asselstine noted when the new FQ rule was promulgated:
6
'Unfortunately, financial conciderations can and do lead to safety weaknesses in some instances.
There havelheen instances, some recently, in which
~
regulated utility licensees with~ operating power reactors have emphasized maximizing electricity _
generation over safety,
'In many insta'nces, financial 1 considerations appear to be.a signficant contributor to-~ these Utility-decisions.
Some of these safety weaknesses have been of continu'ing duration, and not all have been detected or corrected by.our inspection and enforcement progran.
These examples would. appear to indicate clearly that financial considerations can and do affect safety in some instances.
49 Fed. Reg. at 35754.
The other Commissioners, while noting some support for a contrary view,-made no' contrary finding on the link between financial considerations and safety; rather they found financial qualifications sufficiently shown where regulatory assurance of cost. recovery exists.
Id. at 35751, 35755 (Palladino).. In fact,-
the full Commission noted a persuasive rationale supporting a
- link between financial difficulties and safety hazards:
A financial disability is not a safety hazard per se because'the licensee can, and under the Commission's1 regulations would be obliged to, simply cease' operations if necessary-funds to operate safely were not available. At most, the Atomic Energy Commission, in drafting the rule,
.must have intuitively concluded that a licensee in financially straitened circumstances would be under more pressure to commit safety violations or take safety " shortcuts" than one in good financial shape.
Accordingly, the drafters of the. rule sought to achieve some level of assurance, prior to licensing, that licensees would not be forced by financial circumstances to choose between shutting down or taking shortcuts while the-license was in effect.
Id. at 35749.
Yet that is precisely the choice that may confront Edison's subsidiary in the event of financial difficulties:
the choice between shutting down or taking shortcuts.
For an entity like the. subsidiary, which has no generating stations other than
' Byron 2 and Braidwood, and which could find itself insolvent if one'or more of its three units is shut down for an extended period, that choice will be unusually dif ficult.
Even for Edison, the prospect of insolvency of a subsidiary owning a major portion of the Company'n entire assets would not he viewed lightly.
And if the shut-down option is viewed as unaffordable, 7
there will be higher than normal pressure to opt in favor of taking shortcuts.
For the foregoing reasons, a finding of no signficant hazard, prior to on adjudication hcaring on Edison's and its subsidiary's financial qualifications, would be inappropriate and should not be made.
III. ANTITRUST REVIEW BPI and SAFE are advised that the City of Chicago expects to file a separate letter concerning the serious antitrust questions raised by Edison's proposal, but glossed over in Attachment 2 to Edison's letter of April 16, 1987 to Mr. Murley.
Since some of BPI's member business executives could potentially purchase lower cost power from Edison's competitors, they stand to be injured by contractual provisions which have the effect of increasing the price at which the subsidiary would sell power to utilities other than Edison, or which have the effect of diminishing competition between Edison and other utilities.
The same is true for those of BPI's members who are residents of the City of Chicago, which is presently studying various options for producing or purchasing power from sources other than Edison.
Thank you for your timely consideration of the foregoing c o....ae n t s.
Sincerely,
/
i Dauglas W.
Cassel, Jr.
01e of the Attorneys for BPI and SAFE cc:
Leonard N.
Clshan U.S.
Nuclear Regulatory Commission 7920 Norfolk Avenue Bethesda, MD. 20814 DWC/sp G
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I ISHhM. UNCOLN & BEALE I c'I COUNSELORS AT LA//
1 fHREE FIRST NATChat PLAZ A.
CHtCAGO ILLINOIS 60602 TELE
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April 20, 1987
.Douglass W._Cassel, Jr., Esq.
Business and Professional People for the Public Interest 109: North Dearborn Street-Suits 1300 Chicago,-Illinois' 60602
Dear Doug:
Enclosed is a copy of Commonwealth Edison Company's Application for an Amendment to the Facility Operating License for Byron Station Unit 2.
Sincerely,
'f) y MIM:es
. Michael I. Miller enc.
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.CNcago Imnois 60690 0767 April 16, 1987 Mr. Thomas E. Murley, Director Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission U shington, DC 20555
Subject:
Byron Station Unit 2 Application for Amendment to Facility Operating License NpF-66 and Appendix A, Technical Specifications NRC Docket No. 50-455 Dact Mr. Murley:
Commonwealth Edison Company will establish a wholly-owned subsidiary corporation, the Central Illinois Electric Generating Company (" Subsidiary"),
to fscilitate an agreement. dated February 3,1987, among Canmonwealth Edison Comprny, the Governor, the Attorney General of the State of Illinois, the Stetas Attorney of Cook County, Illinois, several other representatives of state agencies and certain industrial customers of Commonwealth Edison Company (tho " Agreement"). The Agreement is attached as Exhibit A.
The Agreement, which is pending before the Illinois Commerce Commission for approval, conc 2rns a number of. contested proceedings before the Illinois commerce
-Commission and the courts involving the continued construction of Braidwood Stction Units 1 and 2, as well as establishing the rates which Commonwealth Edison company will be allowed to charge in recognition of the operation of Byron Station Unit 2 and Braidwood Station Units 1 and 2.
Specifically, the Agreement contemplates the conveyance of title to Byron Station Unit 2 and Braidwood Station Units 1 and 2 from Commonwealth Edisrn Company to the Subsidiary in accordance with the Facilities Transfer Agreement which is attached as Exhibit B.
Commonwealth Edison Company will hiva the right to purchase all electricity produced by the units for at least a 5-year period under a power Supply Agreement which is attached as Exhibit C.
The Subsidiary's rates will be regulated by the Federal Energy Regulatory Commission. The Agreement also provides for a rate increase of approximately 9.6% (net of fuel savings) to Commonwealth Edison Company's retail customers with a five year moratorium on rate increases thereafter. The retail customer retss would continue to be regulated by the Illinois Commerce Commission th2reafter. Finally, the Agreement provides several options that are available to address the rate treatment of the units owned by the Subsidiary after the fifth year. Those options are to be exercised at the direction of th? Illinois Commerce Commission.
J Mr. T.E. Murley-April 16, 1987 O,
A1'though the Subsidiary will become the titleholder of Byron Station
- Unit 2 ("the Facility") under the Agreement, it is not contemplated that.the subsidiary would itself operate the Facility.- Commonwealth Edison Company, under an agreement with the subsidiary, would continue to operate the Facility-and be financially responsible for the operations of the Facility as that' term is used in the regulations of the Nuclear Regulatory Commission' (the "NRC").
The Construction and operating Agreement and the. Financing Agreement between Edison and the Subsidiary are attached as Exhibits D and E respectively.
Based on the foregoing, we believe the operating license, including the technical specifications, should be amended to recognize the subsidiary's status as titleholder of the Facility. Accordingly, pursuant to.10 CFR Sections 50.59 and 50.90, commonwealth Edison Company requests that NRC amend the operating license to add-the Subsidiary as a co-licensee with Commonwealth Edison Company as shown on the marked-up operating license and technical specifications in-Exhibit F.
. Attachment 1 of this letter contains additional general information in support of the application for license amendment. Included is a description of the organization and management of the Subsidiary, the Facility being conveyed'to the Subsidiary, and information concerning technical.and
.. financial qualifications. addresses antitrust review. The information presented in this attachment demonstrates that neither the Agreement which occasions
--this amendment application nor its implementation constitute changed circumstances which raise any significant issues under-the antitrust laws or
.which require a further antitrust review.
This proposed amendment has been reviewed and approved by both on-Site and off-Site review in accordance with, Commonwealth Edison Company procedures. We have reviewed this proposed amendment in accordance with 10 CFR 50.92(c) and determined that no significant hazards consideration exists.
Our analysis is documented in Attachment 3.
The conveyance of the Facility to the Subsidiary requires the approvals of regulatory authorities in addition to the NRC, including the Illinois commerce Commission and the Federal Energy Regulatory Commission.
Until all necessary approvals have been obtained, the Agreement described above cannot be implemented. It is intended that such approvals will be sought and obtained by July 1, 1987. Therefore, it is requested that the NRC approve the proposed operating license amendment but delay its effectiveness until.12:01 a.m., July 1, 1987. Should it subsequently appear that other regulatory approval cannot be obtained prior to that time, Commonwealth Edison company will promptly notify the NRC.
Commonwealth Edison Company is notifying the State of Illinois of this application for amendment by transmitting a copy of this letter and its attachments to the designated State Official.
l Mr..T.E. Murley April 16, 1987 In accorr'.ance with 10 CFR 170, a fee remittance in the amount of
$150,00 is enclosed.
Please direct any questions regarding this matter to this office.
Very truly yours,
'r-n ya K. A. Ainger Nuclear Licensing Administrator
- Im Exhibits: A through G Attachments (1): General Background Information (2): Antitrust Review (3): Analysis of No Significant Hazards Consideration
Enclosure:
Fee Remittance cc: Byron Resident Inspector NRC Region III office L. N. Olshan - NRR M. C. Parker - IDNS SUBSCR BED AND S N to befor me.t?)'is h.. day of 41 J /
, 1987 1,..
Notary Publ'ic ['
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Tebruary 3, 1937 MZMORANDUM OF UNDERSTANDING WHIRIAS: The ce=pletion of the nuclear power plants now under construction in Northern Illinois and the potential impact which either completion or cancellation of these plants could have en electric rates, electric service and the economy of the State are matters of great concern to the people of this State; and WHIRIAS:
approximately 7.1 billion dollars will be invested in these power plants; and WHIRIAS:
protracted and costly litigation concerning the completion of these power plants is continuing and further costly litigation concerning the level of electrig rates will occur unless, resolved by agree:ent among responsible public officials, electricity consumers and commonwealth Edison company
("Idison"); and WHIRIAS:
the signatories to this Memorandum all agree that it is in their mutual interest to resolve the continued uncertainty with respect to co:pletion of these power plants, the level of electric rates and the adequacy of electric service and to resolve those uncertainties without resorting to still further l
l litigation which all agres would only serve to increase the costs to all concerned.
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ratemaking purposes, book depreciation during the Initial Rate Period shall be accrued on a straight-line basis, such deprecia-tion shall con =ence (and capitalization of carrying charges shall conse) for Byron II and Braidwood I no later than July 1,19s7, and for Braidwood II no later than October 1, 1988.
Edison fur-ther agrees that it will not cause the subsidiary to replace Edison as the primary obliger of any outstanding security of Edison existing at the time this Memorandum is executed.
The subsidiary will not be subject to regulation by the Illinois con =erce com:ission ("ICC" or "Cc==ission"), except as provided in the affiliated interest provisions of the Illinois Public Utili-ties Act, and vill not be subject to the audit provisions of the Illinois Public Utilities Act.
The subsidiary's rates will be
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subject to regulation by the Federal Energy Regulatory Con =issien
("FIRC"),, and, subject to the parties ' co=ritments in Paragraph 7 hereof, Edisen will not oppose the participation by any party to
' n'any proceeding before the FERC, including a this Memorandu i
proceeding to approve the rates to be charged by the subsidiary.
In connection with the transfer to the subsidiary, Edison Will Write off not less than $550 million of its investment in the l
Units.
Edison will file appropriate pleadings with the ICC to implement the provisions of this Memorandum.
Parties to this Manorandum shall have the right to participate in any hearing called by the ICC relative to said petition.
Edison represents that it does not plan to retire any of its generating units in any different sequence or sooner than that on file with the ICC in Docket No. 86-0249 and Idison acknowledges 1
s NOW THERETORI, in consideration of the pro:ises and covenants set forth in this Me==randu=, the parties agree to a settle =ent upon the principles and understandings set forth be-lovs RZSTRUCTURING TEE OWNERSEIP OF TEREE NUCLEAR GENERATING FACILITIES 1.
Edison vill transfer its nuclear generating facili-ties known as Byron Unit II and Braidwood Units I and II (the
" Units") to a-wholly-owned subsidiary (the " subsidiary").
Neither Edison nor the subsidiary will take any action with respect to ownership (legal or equitable) of the Units that would prevelkt the subsidiary from performing its obligations under the Power supply Agreement provided for herein.
Edison vill cc=plete and operate the Units, transferred to the Subsidiary.
For operating purpcses, Edison vill treat the Units on the sar.e basis as its evn units and vill be responslbie for' insuring that they are operated and rain-tained safely and in accordance with all requirements of the Nuclear Regulatory Co==ission ("NRC").
In all aspects of operat-ing the Units Edison will allolate costs and resources on_a_hassis -
consistent with its general utility operations so g to_ insure that no subsidy flows from or to the subsidiary.
For purposes of treating deferred taxes related to the Units, Edison agrees that during the Initial Rate Period (as defined in Paragraph 3 herein) the Units shall be treated in the sa:e manner as the nuclear units owned by Edison; and that deferred taxes shall not be flowed back to ince=e dispropertionately during the Initial Rate period.
Ter 2 --
MEM0RANDUM OF UN'DERSTANDING
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Exhibit A I
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that retirement of its generating units requires the approval of the ICC under the Public Utilities Act.
Furthermore, Edison represents that it intends to operate its generating units in accordance with the principles of economic dispatch. (subject to changes imposed by governmental authority) and that its Illinois coal-burning units are, and Edison believes that at least for the duration of the Initial Rate Period, are srpected to be, its lowest cost coal-burning units.
Edison agrees that it will not defer its operating and maintenance exper.ses and capital additions costs during the Rate Moratorium Period for the purpose of increasing its costs for test year purposes in any rate proceeding after the Rate Moratoriu:
Period.
To enable any party to verify that Edison has conducted i
its operating and maintenance and capital additions programs in accordance with this ce==itzknt, Edison shall file annually during the Initial Rate Period a report with the Commission describing its budgeted and actual activities related to operating and main-tenance expenses and capital additions costs for the previous 1
year.
The report shall include an explanation of any significant discrepancias between the budget and actual expenditures for that year.
t RATE MORATORIUM 2.
Edison will not seek a general rate increase for five years or for eight years if option (c) described in Para-graph 5 hereof is exercised (which 5-year or s-year period shall l
be the " Rate Moratoriu: Period"), except as spe=ifically provided l
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l in Paragraph 3 hereof (or, if option (c) of Paragraph 5 is exer-cised, the increase permitted therein), nor will Edison other.ise seek any other increase in its rates during this period, except es otherwise provided in Paragraph 3 hereof.
This paragraph shall not preclude Edison from seeking an increase or decrease in or taking any other action before the ICC with respect to the follow-ing Rates and Riders, or from taking any other action with the consent of the party effected by the change:
Rates 1,-II and 17 (but only as these three rates relate to light bulb chargec), av.d Riders 4 (but"only with respect to avoided cost payments), 6, 7,
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10, 21, 23 and 27.
(In this Me=orandum, " general rate increase" i
means any increase for which Edison would, absent a vaiver by the Com=ission, have to comply with ICC General order 210 now codified I
at 83 Ill. Admin. Code 285).
.3.
Effective as of July 1, 1987, Edisen will increase its base retail rates by approximately $660 million, exclusive cf revenue taxes. 'The general service rates will be determined by I
applying a uniform percentage increase to its base rates currently in affect.
The uniform percentage increase that will be applied to ths general service rates will be the percentage that, if applied to all of Edison's base rates, would result in a revenue i
increase of approximately $660 million.
The parties agree that Edison's residential and general service rates will be as set j
forth in Attachments A, B and C.
Attachment A reflects a reduc-j tion in the summer-winter rate differential.
Except as otherVise required by the terrs of this Me=crandu=, during the Initial Rate Period fuel costs of the Units shall be included in Idison's
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corputations under its fuel adjustment clause in the same manner as though the Units were evned by Edison.
During the Rate Merate-
.rium period, Edison will not file with the ICC any other request for a general rate increase or for any other increase in rates (other than as may result from changes in the rates and Riders listed in Paragraph 2 hereof) axcept 4
i Where conditions beyond Edison's control, a.
such as, but not limited to, acts of God, major.econcaic disruptions, or changes in law, rules or regulations or interpretations thereof, create or result in a financial
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e=ergency for Edison which threatens Edi-
- son's ability to continue to maintain an adequate quality of service in its service area or otherwise carry out its responsibil-ities as a public utilitys or b.
To recover costs or recoup re*renue losses imposed by decisions, or by changes in law, ordinances, rules or regulations or inter-g pretations thereof prozuigated or enacted by any Illinois court, the General Assembly or any other. Illinois governmental or regulato-ry body or other authority after the date hereof involving regulatory or tax matters or franchise or similar payments to units of local government, all as applicable primari-ly to electric utilities, public utilities, Edison or regulated industries generally (as distinguished from being applicable to all businesses or taxpayers as a class).
c.
To recover any federal acid-rain tax, sur-charge or fee.
The Commission shall make the determination of whether an appro-priate emergency exists to warrant the granting of a rate increase pursuant to the foregoing subparagraph a.
Further, nothing in this Memora:.dum shall be construed as preventing any party frer. a) i contesting an application by Edison to increase or restructure its rates or riders other than as provided in the first two sentences \\
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of this Paragraph 3 (or in cption (c) of Paragraph 5 of this Me=orandu=) or b) fro: seeking a rate reduction where a relaxaticr.
of governmentally imposed costs, such as, for example, a material
-reduction' in taxes, creates a significant vindfall fer Idison.
A
- significant vindfalla exists only if in any year Edison's re-ported consolidated not income, before interest. expense, produces a rate of return on Edison's total book assets (including these cf the Subsidiary) which. is in excess of a rate of return which would be just and reasonable if applied to Idison's utility rate base pursuant to the Illinois Public Utilities Act.
On er about July 1, 1992, or, if option c in Paragraph 5 hereof is exercised then on or about July 1,1995, Edison shall file with the ICC an application for a deterzination as to appro-I priate rates following the Initial Rate Period.
Such application any include a request fer a general rate increase (including energency relief) or decrease.
The period,beginning with the effective date of the rate increase provided for in the first sentence of Paragraph 3 and ending with the effective date of the l
rates established by this procedure is defined as the " Initial Rate Period."
4.
At no time vill Edison seek to recever any revenue i
shortfall or inadequacy which it may believe exists in its rate i
levels in effect during the Rate Moratorium Period.
This provi-sion shall not prevent Edison from seeking a rate increase under the terms of the exceptions specified in subparagraphs (a), (b) and (c) of Paragraph 3 or frc: seeking emergency rate relief l
immediately following the Rate Moratorius Period.
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POhT.R SUPPLY AGRZEMINT 5.
Edison vill enter into a Power supply Agree =ent with the subsidiary whereby Edison vill have a right which shall take precedence over the right of other purchesers to purchase all of the output of the Units for five years.
Edison will buy elec-tricity from the subsidiary when doing so 'is cheaper than produc-ing electricity from other units or buying it elsewhere.
In exchange for the right to buy electricity, Edison will pay a fixed tenthly fee of $55 million to the Subsidiary.
During the five year period ending June 30, 1992, Edison will pay only the cost of fuel, plus a=ounts equal to the amounts of bonuses provided {er in the output Suarantee provision of this Paragraph 5, for the e'lec-tricity it buys from the subsidiary.
[utrut Guarantee If th's subsid'iary is unable to produce energy from the Units at the cumulative target levels set forth belov, Edison guarantees, through the operation of the fuel adjustment clause
,by taking credits against costs reflected in that clause), to
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compensate ratepayers for the excess costs of replacement power over the fuel costs of the Units; provided, however, that Edison shall not be obligated to absorb more than $660 million of re-placement power cost in respect of a shortfall in any of the years 1988 through 1991, or $33011111on in respect of 1987 or 1992.
The arount of replace =ent power in respect of any year shall be d~ee ed to be the short fall in curulative target level output as cf
.g.
the and of such year fdss the amount, if any, of such shortfall at the end of the preceding year.
In computing the shortfall in
- output under this paragraph, only one-half cf any energy for which Edison has received a bonus of one-half of the savings pursuant to the immediately succeeding paragraph, shall be considered as energy output of the Units.
If in any year the subsidiary produces energy from the Units in excess of 110% of the annual target level set forth below for such year, Edison shall be entitled to a bonus base'd on the savings relat&d to all energy produced in excess of 110% of the target output.
Such savings shall be the difference between replacement power costs and the fuel costs of the Units applicable to the energy representing output in excess of 110% of the target output.
The bonus shall be equal to the full amount of such savings to the extent those savings do not exceed the amount of credits previously paid pursuant to the preceding paragraph and half such savings'to the extent such savings do exceed such cred-its.
In determining if a bonus is earned, al2 kWh output in' any year up to 110% of target levels shall be considered normal out-snrt.
Then any output achieved in that year after 1104 of the target output has been achieved shall'be considered excess output and eligible for the bonus.
Any credits, bonuses or adjustaants to be made as a result of the output Guarantee shall be accomplished through operation of the fuel adjustment clause.
.g.
TAP 0r? LIvrts Annual curulative Year G1cewattheurs cicavattheurs July-Dec 1987 6,000 6,000 1988 11,000 17,000 1989 13,200 30,200 1990 16,100 46,300 1991 18,000 64,300 Jan-June 1992 7,550 71,850 Com=onwealth Edison vill propose methods and procedures to estimate replace =ent costs for power, and sub=it such proposal to the parties to this Mercrandu: for cozzent.
All parties agree i
to work together to develop a mutually agreeable approach.
In the event that there are unresolved disputes, the parties agree to submit the matter to the ICC for hearing and resolution.
o Caearity cuarantee The cumulative Target Level cigawatthours as of July 1, 1992, as set forth' above in this Paragraph 5, assumes that 4
Byron II and Braidwood I each will produce 25,273 gigawatthours during the period and that Braidwood II will produce 21,304 gigawatthours during the period.
If, as of July 1,1992, either Dyron II or Braidwood I has produced less than 20% of its share of the cumulative Target level cigawatthours, and as of such date, that Unit has become inoperable and it reasonably appears that the Unit vill not operate in the foreseeable future, Edison shall be obligated to provide additional credits against costs used in computing fuel adjustr.ent charges under Edisen's retail rates.
Such credits vill be deter ined in acecrdance with Attachment D.
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However, no such credits shall be made if the aggregate of the credits provided for under the output Guarantee is equal to the aggregate arount of fixed zenthly fees paid by Edison pursuant to Paragraph 5.
Cetions After Five Years The Subsidiary shall agree to o for to Edison the fol-loving options, exercisable by Edison (after hearings and approval by the ICC) no later than July 1,1991, relating to Edison's right to purchase p'over fro the subsidiary following June 30, 1992:
a.
Edison may purchase power from the Subsidiary when and as available for a period of 20 years at prices sukja** +a_FIRC turisdiction una Eave the afavored nations rights a
set forth in Attachment E attached hereto.
(Nothing contained herein shall be deemed to deprive the ICC of any authority it may have to approve contracts for purchase of*
such power or to review the prudence of such purchases); or b.
Edimen nav contract to nurchase met l_ess than the entire _ameunt of the eureut af myrer un4+ tt for the re=ainder of its useful life and such amount of power (in blocks of e
100 megawatts) from Braidwood I as Edison shall designate at the time of exercise of this option, over the remainder of that Unit's useful life.
Such power shall be sold at rates determined using traditional t
i net original cost rate base / rate of return regulation and accounting for fuel and all other costs of produc-tion, all as determined by the FERC from time to time.
The Illinois retail share of the costs thereof shall be fully reflected in Edison's retail revenue require =ent in any proceeding befcre the ICC to deter-mine Idison's retail rates.
If
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Edison has elected to purchase any amounts of power fror. Braidwood I pursuant to this option (b), Edison say, effective on July 1,1997 or, if option (c) has been exercised, on July 1, 2000, reduce the amounts of power (in blocks of 100 megawatts) from Braidwood I which it must purchase, by giving notice of such reduction 12 months prior to the effective date.
(If Edison exercises the option to purchase the entire output of Braidwood II and option (c) has been exercised, Edison cannot reduce the amounts of power' purchased from Braidwood I on July 1, 2000.)
The amount charged to Edison vill be reduced to reflect this reduction, and the Illinois retail share of these lower costs shall be reflected in Edison's retail revenue requirement in any proceeding before the ICC to deter-Eine Edison's retail rates.
If Edison exercises this option (b) and has not reduced the amount of power it has elected to purchase from Braidwood Unit I, it shall have a further eptien, exercisable on Dece=ber 1,1998, to purchase not less than the entire output of Braidwood II during the period January 1, 2000 through the remain-der of its useful life.
If Edison elects to purchase such output, the rate Edisen will pay therefer shall be the greater of (1) the market valua of power as determined with reference to third party, arms length, long term firm power pur-chase contracts commencing approxi-mately January, 2000, or (2) prices determined using traditional met original cost rate base / rate of return regulation and accounting for fuel and all other costs of produc-tion, all as determined by the FERC.
The Illinois retail share of the i
costs of any eutput so purchased i
shall be fully reflected in Edison's retail reve ue require:ent in any proceeding cefore the ICC to deter-zine Edisen's retail rates.
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Tor purposes of traditional net original cost rate base / rate of return regulation whenever provided for in this option b, rate base shall be calculated after deducting the applicable portion of the not less than $550 million write-off specified in Paragraph 1; or c.
Edison may defer the election of options (a) or (b) until July 1, 1994, in which case it shall be entitled to a one-time retail rate increase beginning on July 1, 1992.
The increase vill be accomplished by applying a uniform percentage increase to base rates then in
- affect.
The percentage increase vill be the lesser of i) one-half of the cumulative increase in the consumer Price Index for All Urban consumers, published monthly by the'
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U.S. Department of Labor Bureau of Statistics, for Chicago, Illinois --
Northwestern Indiana, from April 1, i
1987 to April 1,1992, or 11) 7.5 percent.
If Edison elects this option (c), -
the $55 million monthly fee payable j
to the Subsidiary pursuant to this par,agraph 15 shall be adjusted to I
reflect the full amount of the increase, and the output and Capaci-ty Cuarantee provisions of this Paragraph 5 shall net apply during the period of the extension.
In the event that this option (c) is exer-cised, then the deadline for exer-cising options (a) er (b) shall be extended to and including July 1, 1994.
Edison vill select one of the above options as directed by the ICC.
It is understood and agreed that the right to exer-cise options (a), (b) and (c) above, or any part of ther, is to be Edison's under its agreement with the subsidiary, but the deterr.1-nation of whether or not such optiens should be exercised for the __ -. ~ -. _, - _. _. _
'a benefit of' Edison's ratepayers shall rest with the ICC and the ICC shall direct Edison with regard to said options.
Tror, tine t:
time Edison will institute proceedings before the ICC to chtain its direction and authority to exercise (or not exercise). such' options within the time frame parzitted for the exercise of 7.bd options.
Nothing herein shall be construed as granting the IC,C authority to direct Edison with respect to the amount of power'it is to purchase under. option (a).
If the FIRC declines to make the determinations re pired under option -(a), if any, 'and option (b), then the ICC will be requested to make such determinations.
If the Commission fails to direct Edison as to which option it is to elect on or before July 1,1991 (or if option (c) is elected by July 1,1991, and the Cozzission. subsequently fails to further direct Edison with regard to the election of options (a) er (b) en or before July 1,1994) and Edison has filed with the ICC a reque'st'for direction no later than 12' months prior to the date in question:
l-(1) __ Edison shall be deemed to hays =1aa+=4 t e_
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contract to purchase the entire estput of Syron II i(
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f5r W e remainder of its usefulglife and s04 of the entire output of Braidwood I for the re tinder of its useful life, all errective are of the terri-l, nation of the Rate Moratorius Period; (ii)
Edison shall have no further options under this Memorandum; and if (iii)
The rates for power contracted for pursua$:
to subparagraph (1) above shall be deter =ined as provided above with respect to output of Byron II and Braidwood I contracted for under option (b)...
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REGULATORY AND JUDICIAL ACTIONS
'a 6.
Edison's obligations under this Memorandur are lh dependent upon the regulatory and judicial actions'referrad to below:
A.
Illinois Cermerce Cozzission Action to be taken N
before May 1, 1937.
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(i)
Authorization of creation of the
,2 l\\ K i Subsidiary and transfer of the Units and permits and licenses related thereto to the Subsidiary.
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(11)
Approval of agree:ents between Edison and the' 82sidiary under which Edison will ec:plete; construction of the Units and 4 - f operate the Units and purchase power from the subsidiary.
7 (iii)
Authorira_ tion for Edison to invest t
- in the subsidiary, from time to tima, as cg' required to assure proper maintenance and e
operation of the Units.
(iv)
Release of Edison from any obliga-tion it has to complete the Units pursuant to prior orders of the Commission.
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,'(vf _ Authorization for Edison to guaran-tee ahe Subsidiary's obligations and liabilit-ies' with respect to safe operation of the j,;
, Units.
(vi)
Approval of rates reflecting the rate increase provided for in the first four sentences of Paragraph 3 hereof, including any F.ecessary waiver of General Order 210.
(vii)
Approval of a suitabAe modification g
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in Rider 19 to limit its availability in the 1
i case of changas in ovnership of exit. ting n
facilities.
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'(viii)
A statement of intention not to
{j oppose any reasonable proposal by Edison a
during the'2nitial Rate h riod to refinance securities or otherwise to revise its capital yq structure so as to enhance the position of its stock.hciders within the frazeverk of the revenues allowed Edisen during the Initial {.
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Rate Period under this Me=orandum, it being understood that any such action is not binding on a deterzination of revenue requirazants in any subsequent rate proceeding.
(ix)
A statement of intention to refrain from reducing Edison's rates or revenues during the Initial Rate Period, unless re-quested to do so by Edison.
(x)
Satisfactory resolution of the fol-loving Co==ission matters so that Edison any charge the rates provided for in this Memoran-dum and cons=== ate the transactionp described herein and.is not required to make any refunds in respect of past charges:
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(a)
Braidwood construction case (b) staff investigation into Edi-son's future rates (c) staff investigation into effect of the 1986 tax reform act as to Edison I
(d) pending Rate 1 restructuring (e) notice of inquiry into excess capacity (it being understoos that it shall be a satisfactory resolution for this purpose if the com=ission's determination has no application to Edison for the term of the Initial Rate Period or as its capacity may be deemed to be affected by purchases pursuant to option b of Paragraph 5.
- However, nothing herein shall preclude an excess capacity inquiry or adjustment at such time as Edison has acquired (through construction, joint ownership or purchase) capacity in addi-tion to existing capacity and capacity acquired through the exercise of option (b) of Paragraph 5.)
(f) pending fuel reconciliaticn proceedings l
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(g) pending audits pertaining to Byron II and Braidwood I (h)
Uniform fuel clause proceed-ings (it being understood that satisfactory resolution would preserve Edison's fuel clause in essentially its present form [with modifications re-guired under this agreement) for the Initial Rate Period including the right of the commission to require Edison to operate on an economic dispatch basis).
It is further agreed that during the Initial Rate period Edison will not be re-quired or permitted to recover purchased power de and charges or fixed fees for purchased power through the fuel clause.
B.
Timely grant of Nuclear Regulatory Commission-approval of transfer of the Units and their li'-
f conses to the Subsidiary.
C.
Timely grant of any necessary FERC approval of the rates and transactions provided for in this Memo-randum.
D.
Judicial action having the effect of affirming the Cem=ission's July,1984, and October,1985, Edison rate orders in their entirety.
E.
Timely action by the Securities and Exchange Cor-mission confirming that Edison will remain ext =pt from the registration requirements of the Public Utility Holding Company Act of 1935.
T.
Any other governmental action required as of Ju-ly 1, 1987 for consummation of the transactions provided for in this Memorandum will be taken in a timely manner.
COMMITMDfTS OF TEZ PARTIES 7.
Edison commits to use its best efforts to accom-plish the regulatory and judicial actions described in Paragraph 6 as promptly as practicable and will institute proceedings in 4
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I furtherance thereof before the ICC to implement the provisions of this Me=orandum on or before Tebruary 6,1987.
The other parties to the Memorandum agree to support the terms of this Memorandur. in any proceeding in which they are participants before the ICC, the NRC and the FERC.
The parties agree that for the Initial Rate Period they will not take any action (whether before a regulatory body, the General Assembly or any other le'gislative body, or any court) that would prevent or require the undoing of any of the transactions contemplated by this agreement, it being understood, however, that-in Suprema Cc;rt Docket No. 63747, Peerle Si thi State SI Illinois 1X Ill Etil I. Eartican, Attorney General y.
Illinois Cer.reree Cerrission gni potrenvealth Edisen comeanv, the parties have presented their positions and have the discretion to 3
I determine what action to take in that case.
The parties other than Edison upon proper notice authorise Edison to represent on their behalf before any regulatory body or court that they are signatories to 'thls agree =ent and have agreed to the regulatory action described in Paragraph 6.
The parties recognise that Edison's agreement to limit the level of its rates or otherwise to
, adhere to the terms hereof is conditioned upon compliance with this Paragraph 7 by all other parties hereto.
Edison's failure to accomplish the implementation of the settlement on or before September 1, 1987 shall discharge the parties hereto from all obligations with respect to the regulatory and judiciel actions set out in Paragraph 6 hereof, provided, however, that if Edison has extended the termination date set forth in Paragraph a to a date later than septacter 1, 1987, then such later date shall be __
substituted for Septer.ber 1, 1987 in this sentence.
It is further understood that the parties may participate in generic deckets related to the subjects specified in subparagraphs A(x)(e) and (h) of Paragraph 6 hereef.
Novaver, the results produced by these dockets shall not be used by any party in conflict with the representations related thereto in this Paragraph 7.
GZh*ERAL 8.
This understanding shall terminate if all regula-tery and judicial action conte: plated herein has not' occurred prior to July 1, 1987, except as otherwise. provided in this Para-graph 8.
Edison shall have the right to extend the deadline for orvaiveanysuchaction,subjecttothelimitationshereinEen-tained.
During the period of any such extension, Edison's rates shall provide for charges no higher than the greater of (1) charges permitted under Edison's rates now in effect, or (ii) charges under s'uch rates as they may be changed under Paragraph 2 er 3 hereof.
No such extension shall operate to extend the ter=i-nation date of the Rate Moratorium Period, or the date by which pptions in Paragraph 5 may be exercised.
No such waiver shall permit Edison to place in effect any rates which provide for charges higher than the greater of (i) charges permitted under Edison's rates now in effect, or (ii) charges under such rates as they may be changed under Paragraph 2 or 3 hereof.
If Edisen artends any deadline pursuant to this Paragraph 8, and this under-standing, nonetheless, thereaf ter terminates because regulatory or judicial action conte = plated herein has not occurred prier to the __
extended deadline, its rates nov in effect shall be reinstated as of the date of termination.
No such extension shall expire later than December 31, 1987 In addition, in the case of such a terri-nation, if during the period of the extension Edison places in effect a general rate increase, the output ' Guarantee provided under Paragraph 5 shall be considered to be in effect during such period.
Por that purpose the amount of output guaranteed shall be egual to 331/3 gigawatthours multiplied by the number of days the increase is in effect and the maximu= fuel adjustment clause credit will be equal to $1,833,333 zultiplied by such number of days.
This understanding shall not be construed as preventing.
Edison from filing for a rate increase in respect of its inytst-ment in and operating and maintenance costs associated with
{
Byron II and Braidwood I and II prior to July 1,1987, nor shall it operate to prevent the parties from contesting such applica-tion.
No increase which may result frc= any application permitted
~
by the precedin'g sentence shall become effectiva during the period of any extension of the July 1,1987 deadline.
Any such applica-tion for an increase vill be withdrawn if the necessary regulatery l
Jand judicial action has taken place by July 1,1987 as that date may be extended as provided in this Paragraph 8.
9.
In addition to Edison's other rights in respect of any failure to meet the conditions to its obligations hereunder, (a) if, prior to the time the regulatory and judicial actions specified in Paragraph 6 occur, in Edison's raasonable judgrent it appears likely that any governmental action provided for herein will not be taken within the time specified in Paragraph 8 (other
~20-
than because of Edison's fault), or (b) thereaf ter if Edison and at least two of the other parties to this Mezerandum believe it likely that any such action vill be invalidated, in whole or in part, Edison may terminate the understandings ambodied herein and if Edison has already conveyed the Units to the subsidiary, Edison shall have the right to cause the subsidiary to reconvey the Units to Edison.
The ICC order approving the conveyance to the subsid-
~
inry shall contain appropriate provisions approving such a ' recon-voyance.
Any such reconveyance shall be without prejudice to any party's rights to oppose and to raise all arguments and positions and to pursue procedures provided by law or regulation regarding
- ratabasing" the Units and reflecting their costs in rates.
10.
The obligations of the signatories to this Meteran-I duz are also conditioned upon the establishment and continued effectiveness of rates consistent with this Mazorandum throughout the Initial Rate Period.
11.
inf disputes over the interpretation of this Memo-randum vill be committed to the respective regulatory agency having jurisdiction over the subject matter.
12.
The parties agree that any FERC-zandated modifica-tions, alterations, amendments or changes to any component of the rate provided for in this Memorandum, the Power supply Agreement or any other governing document, or the terms or conditions there-of, shall not constitute a basis for a change in retail rates during the Initial Rate Period.
This provision shall not be construed as modifying or in any manner limiting the conditien imposed in paragraph 6C. _
13.
Edison agrees to take any action necessary to ensure that the subsidiary, with respect to its own obligations, shall be bound by this Memorandum as if it were an original signa-tory.
Edison vill furnish evidence of the subsidiary's acceptance of the terms of this Memorandum.
Marorandum of Understanding dated this 3'4' day of Febntary, 1987.
Commonwealth Edison Company I
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yames 0 0'Connor, thairman
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Mercrandu of Understanding dated this day og Tebruary, 1987.
James R. Thompson, Governor, en behalf of the People of the State of Illinois By v.-
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,O Memorandun of Understanding daterd this -)%dayof
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February, 1987.'
Neil F. Hartigan, Attorney General, on be alf of the People of the State of Illinois
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Mer.orandum of Understanding dated this day of Tebruary, 1987.
Richard M. Daley, state's Attorney, on behalf of the People of Cook County, Illinois y'
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MercrandumofUnderstandingdatedthisZd day of February, 1987 The Illinois Industrial Energy Consurers (IIEC) Pary Intervano g in Docket 86-0249
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/../h/N f[.N PANDA 1.I. ROBERTSON Attorney for IIEC e
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Memorandum of Understanding dated this day of Februa ry,198 7.
The Governor's Office of Consumer Stevices
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Alvin K. Grancys, Pn.D. /
Director O
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Memorandum of Understanding dated this b; day of February, 1987 The Small Business Utility Advocate By v i
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Attachte.a.t A LLLCTn1Cin' For me Che aas % sgo hess en*
ILL C C.ke's Compnome tatth Shesu ha 4, L 4 ? and 8 Re.sme snee ho 9 Eduon Comper,s and Wu wee pesso essr== umaar)
R ATE 1. RESIDEN'T1 AL SERVICE Ai.aatna.
Tha rate u e sJab:e w ary a.surnu wacg de Carvery's a;esw unse for sundema' po'p"**
Charge
- &leaud; Comasner Charge.
Ju9 L 1887 Threwgh H L 3939 Dessaber 31.1984 and Ahar Fw Cunamer madra m A b&g artia r eg 3 or mari d sLng sw.....................
3330 3 3 as A hu3d.y esma ring i er 3 ewdeg ww........................ S 9.10
$ 136 Se&gs amusers I et 3 destes urau sha'J mcLee, he se he heruwd se. asuseu es.marJ) afemd is as airs'e famnl deusJind houses, siegle fw-J3 st.acheJ benes. #po benau sees bewiu, ownMaaaahad bana. Agham, t**
C.au, and too fem 2y haunu Or Drmhr 10. 1964 n>w Co pe y het enig ud d aussg Raa i sananus te one of Du ekte dant'a.sru dicted abo.e If ary of dese swsome s ytfom ou Carepa 3 es: ska swa' daul.usar as mee==ts. Wu Cm. pes, spcr wrnnaGar..*2 p'.am es muerer e te awa. eJuntai.or tna wC as saa ry afwa
- Emergy Charge.
Je4 L 1981 Throwsh Joamer1.1989 Dassseber 31.1Mg and Ahsr L--
u m Chaage per husosemar for frit 4lC khesahaari a# sad r me m an.h......................................
fl.9&s 11Jbt$s Cha'se pr thus'9wns for a:: Co.auhoun eve 40C n W sshene2..................g...................
KTh 15.1:: s ne u m Cha geyr kJeoeshan fa frit 40C kJc nhars n W e bem mh......................................
II.9Hs
- 11M5s Ouse pre ka subsur for a:: hi! aaheen war 4CC 1393s Sh n W m siesned..,.......
7ee the pupeest heuef. Wu $.enrwr Mar As sha!' he te esw efs fru nowiNy knT.mg gened wuh er. andrg sener sendig dew or er af6er Jure 13 esd We see mass.tr4 me.J.') W.;rg paned 6 The f.a! adjusensu shage er end.: pre. dad for > Ade 20 sha:: epply w a : L3e=auhows eW sn se mere Late Pojment Charge.
The inu paymeu ehens pwded fe si pu Tsmu and Cand.wam of na SenMe of Ames abd be oggi,mble e d shaasu undr' this ans.
1Jght Bult $ersica.
The show sharges do se mdvde 1,3% b:n samse The ahuge fee sud arma shd he (L!74: pr k;o=sthou' for Om fw 300 helswauhsws angpLed e du enan6P. Leg %i bJt same u esamber e Leer 10 and is opuera: ouh m e.nene' Minus wn Charge.
W mensmen memhly sha se shd be se Meighly Canaenu Charst Ters of $srvere.
The essesWe inne of es,.
shar earvuear =+mr me Campey tearsi to suppy earvier haswJer and ehd esewie mot more than isn asyt shu smuu is memd w a.newwe esme Threehane Senice.
Threepu semse is eve:able enerr Wut nu Whrs e threrpain samedsey supply b one es3able from de Company's dJinMGP r)sier' edysser L to the ademets prppeP), $e muuw) pve*y agd seMrdary sturdies 9lll bt fWmathr.4 km)
- w Car.pey adjus to te pre.ges of Ade *
(Ca.n.e4 or. $rias he IC, Date Elftcsae Jul 1. Its?
Amarish (') indicates thange larved Df C P. Makes. Yare Prsedtn Pee ort.re sen te?.Ocage. lmaois 6:kt:
Attachter.t B j
ELECTultfnr For she Chis saa % e heet en ILL.C C.No a Cornmon=eshh Saeru Am 4, s. e,i es a e
se,iers w i se 24 EdN.n Coerpen) ed oe memeprivd gw u,nisry RATE 6. GENERAL SERYlCE A pphestflat;.
1.aceps en pp. ded e Re e 6L this min te eryd.uwe io any v.s t. sidssin6'. se easmacaint e.nemer sie a Mammise Darrand of less M I AOC k.loosu whc eses en Caeparys alsant ear *sse lE8saruitt for d agare.ou Diria a rrim aq. renanu pe..ded eder eenhar res seemed.aisjy pie se Espanhar 2.1973. og, hservir, else w P"d's huta8u8t' Carrst 5,rekt Thee af Dep.
Tone af ds; sha*ges eher app'y se (1) aer assomer ed a Mannure Denend of SllC kDowaus. hailui man 1J300 has.stu.
in esas of Ww 12 mess psandeg me t6ll.rg mer.*. es of obcA e:mers derrs ik $8er mees ymandig she mg samuh. C) secennieri is a.s6amers wrgd wider ifune sharges emmedanis.iy prist no she daar af sneenstaan ebase ensraad i
Mammen Demands sesi se derred mqviremer.u e alsas (I) ahe i. 0) e,= ener. ors whose animarat Maa.ec l
Dumar.d4 meet se dee.and requin.rnems ar. alase (1) above. and (d) emy.masmar penasaly hlind ben.mdes persmant is sianom (1) er Cl asar;n as atem.se pmead be;ew.
l Tkse sharges ehd no. he s;6csWe to a smeners er sent sweasseers wie elseric spear has'.rg takeg erwase ender the Haa6rs oc Less ym. s.ar. of Ldes 13 pser as Pie ur her 23.19n. etarp open ense apptca em by ihe maamer ic 6 Canpany If a asiamer et one inne was aerwaf puseant no (1) sho== an Gewen! $stwise - Tone of Day and has e Massnurn Demand obch bs: ne assesar.d 2K kde.s:: e acy siers of Wu swijn e.snt paried peedq te hCs g sned such manener er:sy s Ws.ie on aa app.cas to the Cm pa. y. is he esived er Gammat Semar Ganan Servica - Tame of Day shd een agar he appivath mi.: ed maioner 9.a!.f.es for sucA reu edat Ibe sugwusness af Gours' $seviss - Tome of Day.
C enera: Senirs.
Ger i! samar sha gu s'd app'y u all mAer nr.ar-ers qual.'yrg for servia eder to susa.
Osage.
Cecrs! Senke -71sne of Ds).
MentAt; Casamer Casest Tis MenWy Cus6arner Darse and he 81939.
4
- Demand Chese Summer Ali oihar Mening Menins 51S.a all.n par hae=au for a:: kee=ena of Maann.m Dmmand for the issuh.
Fu se Mas breief, se servier Menes shsU te se antence fires menshly mg prind wah en edes oeur sending da a es e afar J.ris 13 and me ihree sissamsd.ng inanWy be;.ng panoes.
- Emergy Cherp 4360e*per Coween.r far d nJeweshaari mp%ed d.arrg Pink Ammodo 311is pe kJe.mamar for d &LewenAmas rippled eams Of. Peak Pmant The Am2 adpsenei aha se er end.: pedad fe e Rder X atu opp'y in at haswaherri agpied a the oms Cecent $sriera
- Winty Conweer Chugt The.hiNy casurwr owne shd be IlJf
- Demand Charge.
e somme AaDen Mwns Months
$13 a 33.n pe hae=as le at kaowsms of Massa.se Diesis fe es more for te pasposts heatof. Wu Sv r.nwr Manse shat be *e ausioner's f.m menWy mg pnad ed an edig steier natrg dama en e afes Jire il and du ihrer s.:enstr3 manAJ) hCMg pnads
- In sesordance ed et App lacabei of Drmed Qiaage Pvvis.ans of 6is mia, $sM shd be to denalid Eh8'le 88 s#Ch Ief mena n etc annamen. but in bem ergaf. McA auseers shd pay 6406 par karesaker a Summer Marida and SFTJs pe kJosapunar e aD ever panes e adds en is the ev'gy charges em Ae* hales.
- Emet Chus' aus -ishevri suppbed 6: **
Mar 9
$ 130 s pe r k lem a th av for es f.rs;.............................
3C.0T 3 9f*e pr' L3cottacu' for et es.at 470.E 3 9ss pr* hie stecne for a;' ever SCE 0%
Tk f.m.' et;i.seneri ahs se e creda pr nised fe. e R,de. 2D inu a;t's to 4 Lao.s.hsman sugged e on meiA (Cm.s,e-er Snee: No 1T, Date Efeme J 's L 198?
Asiersh (') led. cates sharge goved 6; C. P. FJfstet h Pre es*L Pos Omet Ess 16?. O'uto. Im**
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Atther. en C LLEL*TRICin For ihr Que **8 % e head m f
3LL C C %. a Commonu estih Saees has A g. A ? and 8 Re.iseg Sans.%e as E4twan Compen) and me meerpm=4 =* rad o"*s'7 RATE 6L LARGE GENERAL SER\\1CE A ppHca ttus).
TM rs;e as a;p!.ub's no (1) any enmmerc.a!. resva!. er ge=serensrud m seemer weh e Mamm.en Dwn.ng er gjoc po. ass er more m one of Ow 12 mess pruadig te b;lrg meur.. C) meccessori is assa.urs serves.de, e,se chs gu enresidd'; pne se W e deu of essass.cc shose es.r.saJ Maumecn Darna.nds assa Wu duned %vemmus er dasse (1) abe=s. O) nem erwm whose erummad Maurve Dunede samu the daned pupiremerus e shoe 0) absrre. and (a) ey mesmerr pgvisusly bc.,id breuder pws.ani no d me 0) er c).enesp as awwe FM halsw.
If a marener at er tams
- s served purivou to 0) above er large Gerart Ist"st -T8: ef Day ed hea a Maassum Demant
- bc) 6ss em saansJs4 200 uo.ans e ey more of tw 12 manh paried pumAng ihr kml.'ma me mich sunamer me eks. e vnaan app l,muer se se Caerpary. en be er.ved er Raas 6. Generi! Servus. Rme E. Large Ommes: Isrvue.Tene af Dr,.shd na aga.n he spLamble an0 s sh asurner gen:In le aseP. raw eder almen 0) shuse.
The Imge Genen! Serveme-Has wuh Usi eh ges shd be aptou edy is mammeri er esi, essena.ori weh skam spera has.r4 mieg suw.ar ede se Haa ng m2 Lap: pnma.ma et Lert 2! pser as )*squrdes 23.1977.
A la se Cs ere Ser*me-Haa: wie Ught osamer e;l: he de=ed io sate 14rre Good Ismer-Tene of Dey semse spa-ensar aghcaue ne ou Campey. One eheget te 1sge Geers: Samse-Tsee er Dey urvae, shsse annameri er meer sumaci =llJ om ha co*si se run.m to Large Guari: Samm-Hes enh Ught Charge Large Gened SerHev..Tlent af Ds).
- Montht; Carterner Chargt The MarWy Cusus,sr Oa se ahd be 1547.0E
- Demand Charge.
Dsene of.,
Sermeer As Other Ma.simam Demand Monas Mee tas ear sie Mmei SIS 06 511 77 per u o u.for tefoi MIA00 633 3.06 pu ue.au le c e.sr 30A00 For te prpesu huncf. ihe $wnrnet Mass e.a:: be ou meneer's fas: menWy E2mg paral oidi en edes meer sand.r4 die as er afur Ame !$ ed ihr esas seccard.eg ear.M Wg prnada.
e Emergf Charge.
L5 dor par up anhaarle hl* nionomari estpLed dams Peak M 3 Ille.pur uo.sahms le a* h2e somari apple 4 d.rra Of.Faak Pmeds The for2 ed sensu eharge er ends primesJ fe e RJer 30 shu apydy as d hasnaham suyphed a the math Large Genen! Servtse..Maet wkh Ught
- Meatht; Cassemer Chargt The mew Ciammer Ch ge shc he 154?.06 3
e Demand Charpt Sommer AB Oshe Mews MeiAs 313 OL 311 71 per uo.en fe c Wo.mu of Manam.ar Danund fe we marim.
For the prposes hereof. se sumaner Mannha the he ihn miurner's fim swaMy b;;;eg pened with an edeg inner esatta deu a er afar aire 13 eJ pu este eustaakg merOJ) Og panses
- Emeeg? Cherst.
Deeenhases Aappbedenme Mme 3130 pr aJooseer for es fais.................................
30.000 3 p3 ?e p r k Cows om.r for et mai................................. M000 3 934 pr h2onosur for C est E.000 The fus.l afpsynes eta se er cred.: pnmesd fe r Lder 2" shc spply no d uoe m.haus sW e de mard (Corw.m4 er Sass: No 29)
DsIt Offtlte jelfI,\\tgI Amedsk ('j and,caus ehange lased b7 C. p. RJfah en, %es p-asism p cer, s.s w Ca g., m.nou m; usuur
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ELE:TUCTTY Ter we Cbe us %sg. l.aad si TLL C C. be 4 Com peessa!th Snea Am A 1. A 7 and 3 IlnBedas.c5 % % 29 Edisco Compsy are9. u an-piaiseas.e. em.ey (Canes" as 2 D pri..d ps x, :s3 i
RATE (L. LARCE CENERA1. 3ERMCE (cme d f.-r n.= x. :sj Late Perms t Chugs he Isu pron. awge p.e..ast far o the Terres e.d Cam.t.. ara of as 5 died Je of F.ama ahd he appLebis se a : ths gse andar 6.s n.s hoehness Charge.
Tbsmarm an marJ>3 ea M hs vu eur t.'s eine e e.up Maaf'ar's Ceargt he a. sage en er eter.nce bram.edre a ry reJ. oc!ss+e of te Ms 2.'y Cararme Owge. ohd om esmad the as-af 19 74s4 erJ en tws! adj.ies t pr kl.e.atPas pm.. dad. be.e.sr. thaa me. gwrirmed shs'ge ehd se op i.s to mass es Chante bll; as na ess.n les thaa de assis% shar 6
- blandenem Dewant j
l Easur as emad m the pass,;% hafe. eks pups de.a J > y; me A shd hs es hsker. Metra demed anantahad ing iba pad yemads as swtA car $ owp th.sk for e.rar en o'e hrise de eas sassadrg 1.500 I
. h3e= asu e Ovia of uns 12 re.% y=undtg pa b.'.sg ee A. ihe maairnam desard s>4 ha che e.arige of Wu itets h=6 an 30 eece de eda er4What de/g tre pd pnada e eve. seJ., ens meet $an su ser.h drmard as ha h
enhead four, ey me day.
for enraermars nah'rg esade edse !.uge Ger*arg $se6as. Maa r3 onh Ughi prisie of this mas $s manamst dersi j
ahd ha the n:gier. hewu dewer eraussd a: er es dag e d meJ serp disk far annenes wah me.us demands sassadrg 1.50C kJees.u e d.rse of the 12 esees psendrg 9e hCMg mein, h maassem dunand abat he sus evarige of the **is bpssi dere.eds eswWted des 4 ibe mars), em pers thas me see emmeJ m ha alsmed fewg g
any su day i
I.
Massavanet of De=ted and KJmune.es $vypef.
l Whart two er mari me.svg psu:.s,es att peded as es Corwnsri pMan. es demand b ary hees ymed shd he drunr.ced by eddig sagt kar the arpw.s dr= v.!: a; sar.h eaared er4.sJan 4.neg nah le.eJuns paned merp i
Sai (s) en saae abs darwd as ry e se rg rJ.s!.a.e. is segir.sst by se mLei.'g er aamulasive dured meur, es esmand a sud swu'.;aaer a sad Wr.edu ps'ied of y; me.$ thd he asismed to be de esas as Wu kg%4n esmond le any Mar.u pnad af ews) pe$ ed (b) Ou dermd as ery br4.sar may be assumed to hs 75 preau of abs suvuasi hand af ewrA sus.,smed had se r** k:e* sta e has. est sust damaed is to be e&.sd is a marred dovet Ma's
&st are two er mort oa.Jaar ensisvg stu*.,a ea. ene Messien.m appled thd he deurJrad by oldeg tagr.%st th:
haeo stes need as ese pruaier. pedad e.as ohnst ans k ewsthmen a ry such enr4swe smad $J00 si 94 hL.rg eier.h and are sa risved y ens) e tem as to p=.ii etw9teswa d Ge base denng etd ety ste dal.srad. few pu pasos of opp'ars es nsenef day pmsau of the me. meh h2ewstheos s*4 he es. dent is haie baas est.s M e pad pimeds If pu es gy ear si twch mrdeben s 5.50C 4:e=sthms's or his a abs b rg met. a eaags of 4 C !s pr LJo.6$m.t ahd opp'3 to ewr} k.;e a.f ast ha maneres desmands er.d Weise.%ewn ag$ss fer t=e er mort pene.aaa oC; ass ha se4.ame fe h:;#4 pqmses hinedar.
Lipe sagstrL Se Car gnary wC: pwWe ersweruf arms for ercenal hands es mondes vos LGeesta enest sprotie of she Comm+si aq.speare a ear.maus er a tes.a y aded. Jet er em erena: has:s Fe Wu p.poeas of hC;rg a ruch
- d enas, es pia:Wy L e 3:$ ass shd be esie read by e 1.plyvg the road'esugs $ sial open aerep'.aia se eneer swee es4 af a=viaat less b esau.'s of me are.a: hawi af ept.= ed h ora by isoc A:
kJe sniest da:r.ssed is a massW pas of erpp'y ed be eradued a he.s kna en mrad ereg pak pried 6
(
l Sewt Feemass A manda d erdaww fun;0 4 by en Cs per be eeer. ska he en.s'u' ed by as peuse of es Compacy) Lort 6 r
r morp es: $e fet'..as se pr..asi en rwd.a'i iM he adagav rJ, to erpt') senses to a land apJ to du emasmas 33 matas de ed of i.Ne Car.emer er.acksi dr.g is ps4 psd L' larger fad.;es es sage.vid as esae es mess of its en ps4 darwd per abs puA esped. Wie Casa-s' e4 pry, as opewa! farluss is amardenes tri$ er Car peay's Radas 4. Ibs asst et ry faca,,si es aquerst He.e.ir. se er, ara' fesawa skugu shd eyyip to feeC si sa.srg er.d h plass a te tre vu fm p:/.as te mais ben.eder i
(cav da bas:No A I
Phr4 em une Im as Cor m.are Camus.or em Oesne ti.lue Deie tramn Dnw br 3.1986 Aseta ($ too,eis che,
lan,es n; C. P. B#n e6 % we Pr s'8r%
Pos Or*ns to tc.Cheads L.ama lotM Am
C ICT E TTY El C C he e Com o ess enlib For na Ctre nas h.e$n leud se dm Rened wi se :
so-* w 6 s s. s. ans a Woo Company and ne.n.tre,e.x em s.u wws (C e lues stia u mee w n. g.,
i RATE 6. GENT.RAL SERWCE (Casus ed free boet No 243 Las Peymeet dharse.
The Late ps3eent d4,se pee.. des fee iri ne Terse sad Cud >on of de sched.ie of P.sws shat be oppfaWe a su su.g.,
modet ha seu Nhntmen Mge.
- The s.smus metthly thge abst he the me,ath'y ewstemer sha*ge "Staatsee Charge Fer e,etemeri mih demand esetni m surse, sont of etutneity ben.eeer is ser need. einf6a o of de Weit';
Costenn Che+ge. du ni mwd the som e* 16:s&# ass ne feet ed. wisest ye Licesideer pe..ded beenn, tut seth gwarutsud abase dd set e;etaw na eed.as the Cwtaste a W: to sa na e.rt leu ha de stava envge MasJoen Demaad Ter Cererat fserne,-Tie, of D.) evsteem de sas.=.s desand is ur mean ebt be the hdhmt maanvu dewd n u%:%d d.*.sg de punk pr.oda in s.ch and For Genera
- sernee e.siemeri.* man.r.: dersed eht: he de h.gtest mm.evia deemd subud d r.ag evth e:sth Applarstlee of Deesad Chuge.
The Ceepn*y esi: prende a der 4td seur st de desand skage ahU srp'y thes a ewsume*~s sendh Mes atM.e use encords 2.00C Wesstdeers 6s esek of toe surewee meta'; beleg penads o' if La ma.stass demand oe ser2!,e Metsteegt isse as mumsied u ta eseau of us L.leastu er 2AE Wetateau s.eespu%rt*y Any ewtere, nashas the r
demand shage **vid sat e*d.rardy ar;'y wede* the feevgo.sg assunto, may.et La erg,est sad spen psyrer.: sf art'e-pnate wue por,uts.he prended oth a de'-sti reter sti bted the demasi thage esSee LLat W skie o hes de eef 16 oveh esae re.ar Meute st4" be pay st;e fe' 3e gemed dur.sg thach the Coene*ser ensew to eeu a the swte* ht est less than 12 pentP.s unless be tweemn er. titled u a denti wwtu price to the es>d of the 12 meett pened A ewstec ef a he e ett.tled sa a demand meter sh: att be tes..nd te ps? msu!er oder esperou th.4m for end me.et Theder er set a de3and rete? as est.aM de (Lage as bru el demaed ab41e aba!l s#) to say ehelemet.etM)t a eWD-t not*er peyseg sostal for a de 4sd rews it wee-gatre we the foregoag peng's;1. elene ese he set esesoded 20 Lletattheurs ar.d abow ras.wt dea.sti hu set eieweded ter Messtu is wy send of the ps,cobag Id rer.tt pe*.ed and dall eor.tanwe te app') 6sti! de Cwa sr sa e une airwde 2 00C use onbours na ete swesenant mesd'; batt perseds e has deeend eaevede ua Use atu is tee s,arene;we sessly hard psneds
'Meestromest of tiranad and EssesrJears loppl.e4
% he*e los et stre er eterits issu!:suess og p*mded n de Costson's pennen.W denti e ar) 3Damste prmd ds9 be deurvued b3 odd,rg tagether the arpa gse desstia at eart news; asu%es donag swet 3>s:anu pnad estep a
dat (a) n same the derand at art este tr.g is.suratics a regaw'od by na ed.cating er evse'4un derr.nad twer the der.and at eurk tuu%bes to eut Os.svu per.ed of an mostn eht br aae. red te br Ge esse as Ge Lghest der.at he eas.as4 te be 75 peannt of the se&
is as) De 4vw pened of sett meet. sad (tine demand at ary osatatina se3 sesed land af e.et easser6ed land e ese Weestu er lues sed puel demand a to be added u o etwnd dezaed W tu i
deas am t*c et e c*e eattiov owunt:iss44bsu as Ge Cwsesn's pmmasas the h neesthet evyp'esd sal: te deter
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e maned b; add.ng tagetket de kneesteve sewast at each snauhues prended ht eben de Mets'ded*e s' or sassa'.ater. asreed 630C it the bM3 setsk ati an tot oewaed is even a maase, as to pe rit dese staat.ee af d e
dent.g skith dey em delae'ed.fe' puSeen sf apply 6r.g the same of day prms.oes o' es tsu svet Mes f
he cena.deaud is han bws de!.u*,d sa paan penada !! the esesy ese et even nauflet ee e 83g L4pardown se de beeg certh a etage of ems pr Wesates., es ! syfy ta evet Ldeosthem The manismo dee.ar.ds sti Meest@4ri eep%.e4 for too er om pmmise e !' met no oesksed for W ag pape es beenmader Upce. petvest,the Cespar3 eil; pre,Je erarv.ed se*,ise fee aussieud land, os. eir,.d.sg en yesms e bere s' the Casters *r's eno pmesi a eerusvo.a r o res.!p!) eebed. led et p sanwat boa.s For ne pctes= ef b2f i
a6are the earthly Usestde.n aba he dewra;ned b) estup'rssig the ested waruge (b sed s;es morefste e' typ*er'.aw dau) of W estsetted lesas by satsetitt of W astus' bev s of spessues and d. rid r.g t I hT e
bles at P.o *i del ve'ed te et wenewavd po.st s'eur;') s1A!! be eeu.de'ed u han bears da!.,esed darut pad pr**
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(Ce* a.ed c $swt Ne pu case Ifrerne cru'n* f t sets
' Fieed sta the b.ssw Can sere, Ces s.sa.se si Cm eer 36.1988 lassed qC P Refun M P8n.desi Based pertout to Creet si Coasa Cas seer,Came F.se 16 Alli &ed IldIII Past CP& re De n 14I. Ch.ar a ge Leses t e4 88 Ces masone ester,d Ornaser 34.1986 33 Astense l'8 464.cana etande f
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- * * * * = *.
Attachment D The amount of the credit which is to be made in respe=t of either Byron II or Braidwood I Unit if it meets the criteria for capacity guarantee credits set forth in Paragraph 5 of the heterandum of Understanding shall be determined by making the calculations described below.
A.
From the aggregate amount of fixed fees paid
~
pursuant to Paragraph 5 cf the Memorandum of Understanding there shall be subtracted the aggregate amount cf credits made pursuant to that Paragraph (net of the aggregate amount of Edison's share of the shared savings).
I 3.
The result of the calculation made under paragraph A shall be multiplied by 0.35.
j C.
The result of the calculation made under paragrap,h B shall be multiplied by a fraction, the numerator of which is the difference in gigavatthours between the cumulative actual 4
output of the Unit as of June 30,1992, and 25,274 and the denominator of which is l
25,274.
This calculation in paragraph C shall be made separately for Byron II and Braidwood I.
The result of the calculation ande pursuant to paragraph C shall be the a=ount of the credit; provided that in no event shall the sum of the credits made under this provision and the aggregate i
E
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i aucunt of credits made pursuant to the output cuarantee.in Para-graph 5 cf the Meterandur. of Understanding exceed the aggregate amount of fixed fees paid pursuant to Parsgraph 5.
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- Most favored Nations" During the 20-year period June 30, 1992 through June 30, 2012 Edison under option (a) in Paragraph 5 shall have the rights set forth in paragraphs (A) and (3) below.
(A)
If Edison is purchasing power under a contract with the Subsidiary (' Pre-Existing Edison Contract") and the subsidiary enters into a contract to sell power to a Third Party ("Ibird Party contract") which is comparable to the Pre-Existing Edison contract, but contains more favorable prices or payment terms, Edison may elect to have the price and payment terms of the Third
. Party contract substituted for the prices and payment terms of the Pre-Existing Edison contract.
A Third Party Contract shall be considered to be " comparable" only ift I.,
It is effective over approximately the same calen-dar time period as t's Pre-Existing Edison contract.
II.
Any other difference between the terms and condi-2 tions of the Third Party contract (excluding price and payzant terzs) and those of the Pre-Existing Edison Contract does not significantly affect (i) the subsidiary's cost of providing ser-Vice, (ii) the quantity or type of service to be provided, (iii) the benefits o'tained by the subsidiary, or (iv) the risks under-b taken by the subsidiary.
Edison shall have no right to substitute only the price er payment terms of the Third Party contract for those of the Pre-
(
Existing Edison contract, it being understood that Edison's elee-tion under this paragraph is limited to substitution of both the payzant And price terms of the Third Party Contract for those of the Pre-Existing Contract.
B.
If the subsidiary enters into a Third Party Con-tract and Edison advises Subsidiary that it desires to purchase power under a comparable contract, the subsidiary will offer power to Edison under a comparable contract, if such power is available from the Units.
For purposes of this paragraph, a contract will be considered'to be ec= parable to the Third Party Centract only if its terms and conditions are materially the same as those of such Third Party Contract excepting only such terzs and conditions as do not significantly affect (1) the Subsidiary's cost of providing
(
service, (ii) the quantity or type of service to be provided, (iii) tha amounts, form and timing of payments, (1v) the benefits obtained by the subsidiary or.(v) the riska undertaken by the Subsidiary.
No su'ch comparable contract shall relieve Edison of any of its obligations under any Pre-Existing Edison Contract.
l Upon the execution of any Third Party Contract, the l
subsidiary will give Edison notice of same and furnish copy of same to Edison within 30 days of the execution of said Third Party Contract.
t 1
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.e FACILITIES TPANSFER AGREEMENT
. Commonwealth Edison Co=pany (" Edison") and-(" Subsidiary") herebyLagree as follows:
1.
The conveyance of facilities which is the subject of this Agree =ent takes place in imple=entation of a Me:crandu: cf
-Unferstanding among Com=enwealth Edison Company, the Governor of
~
the State of Illinois,.the Atterney General of the State of Illinois, the State's Attorney of Cook County, the Governor's Office of Consurer Services, the S=all Business Utility Advocate, and certain industrial custeners of Cc= enwealth Edison Cc:pany who are party interveners in a proceeding before the Illinois Cet=erce con =ission bearing the Decket No. 86-0249.
The Me crandu: of Understanding entered into by the above parties c:nterplates the settlement of~a variety of contested proceedings before the Illinois Cc=nerce C:::ission and the courts in which
.the continued construction cf Braidwood Unit 2 is at issue as well as the rates which Edis=n will charge.
The agreement cente= plates the conveyance of the f acilities cc :enly known as Byron Unit 2 and Braidwood Units 1 and 2 (cellectively, the " Units") to Subsidiary.
Subsidiary's rates will be regulated by the Tederal Energy Regulatory Co :ission.
A rate increase of approximately 13% in Edison's retail base re.tes with a five-year moratoriu: en rate increases thereafter is also provided for.
Accordingly, Edisen will convey the Units to subsidiary.
The real estate and facilities constituting the Units are more particularly described Exhibit B
in Appendix 1.
The conveyance shall be effective as of July 1, 1987, or-such later date as may be specified by Edison.
In the case of Byron Unit 2 such conveyance shall include an esserent fer iI the continued operation and maintenance of that Unit on the Byron Station Site described in Appendix 1.
2.
The conveyance will be evidenced by suitable quitclaim deeds and such bills of sale and other documents as Subsidiary may reasonably require.
Where appropriate, such documents shall reflect the fact that the Units are and will remain subject to the lien of the nortgage securing Edisen's first nortgage bonds.
Such conveyance shall be subject to a reservatien to Edisen of such rights as may be necessary or appropriate, to enable Edison, as an NRC licensee, to corply with all NRC require =ents, including the authority to exclude persons from the premises conveyed to Subsidiary so as to meet NRC security, e=ergency planning and radiation protection requirtments as.
described in Section 2.1 of the Safety Evaluation Report issued by the Nuclear Regulatory Con =ission ("NRC") for Byron dated Feb ruary, 1982, and the Safety Evaluation Report for Braidwood dated December, 1983.
Such conveyance shall also be subject to a reservation to Edison of such rights as may be necessary or appropriate to enable Edison to continue to operate and maintain facilities on the Braidwood Station Site described in Appendix 1, which will not be conveyed to Subsidiary.
3.
Edison will take such steps as are necessary (including seeking any required URC approval or consent) to amend p
W
or transfer its NRC licenses to Subsidiary to the extent such amendment or transfer is necessary to give Subsidiary title to the
+
Units, the right to complete construction thereof or the right to operate the Units through Edison as its agent and sell ~ electric power generated by the Units.
Edison will provide the NRC with such assurances and guarantees as it may require in connection with the conveyance of the Units to Subsidiary.
Idison recognizes that the NRC may require that Idison be a primary obliger.with respect to certain of Subsidiary's obligations and liabilities arising out of construction, ownership or operation of the Units.
Edison will transfer any other licenses or permits relating to the Units, where necessary to enable Subsidiary to co=plete 1
construction of the Units, operate the: or sell power therefrom.
4.
Ad valorem property taxes applicable to either the Byron Station Site and the facilities thereon or the Braidwood Station Site and the facilities thereon shall be allocated between the-parties so that each bears an amount thereof in proportion to its investment in the station in question.
Subsidiary shall also i
be liable for 50% of such taxes allocable to Byron Station corron plant.
As valorem property taxes for 1987 shall be prorated to the date of the conveyance.
5.
This Agreement shall beco=e effective when Edison notifies subsidiary that all govern = ental approvals and actions required by the terms of the Me=orandum of Understanding between Edison and various other. parties, dated February 3, 1987, have been obtained or waived by Edison.
Nothing contained herein shall be construed as permitting Edison to waive approval by the
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Illinois co==erce Cor.=ission of this Agree =ent or any other agree-
=ent between Subsidiary and Edison.
6.
This Agree =ent is subject to approval by the Illinois Cor.=erce Co==ission and shall only become effective upon such approval.
1987.
Executed this day of COMMONhTALTH EDISON COMPANY By:
Its:
(SUBSIDIARY)
By:
Its:
1 t
i l
I APPENDIX I Facilities Transfer Agreement 1.
As used herein, the " Byron station Site" is the land in Ogle County conveyed by the following deeds:
Parcel 1 Warranty Deed (WD) $424625, Recorded 4-23-73, BK277, PG66 Trustee's Deed (TR's D) #454533, Recorded 12-30-76, BK287, PG93 Quitclaim Dead ' (QCD) #427635, Recorded 8-30-73, BK276, PG362 Parcel 2 WD $422068, Recorded 1-10-73, BK276, PG34 Parcel 3 WD $425182, Recorded 5-11-73, BK277, PG319 Parcel 4 WD $428267, Recorded 9-20-73, BK278, PG548 Parcel 5 WD $423620, Recorded 3-20-73, BK276, PGB73 Parcels 6 and 20 WD $424166, Recorded 4-2-73, BK276, PG1040 WD $423085, Recorded 2-22-73, BK276, PG489 Parcel 7 WD $425238, Recorded 5-14-73, BK277, PG359 Parcel 8 WD $426363, Recorded 6-28-73, BK277, PGB70 Parcel 9 Conservator's Deed $422066, Reccrded 1-10-73, BK276, PG32 Parcel 10 WD $426441, Reccrded 7-2-73, BK277, PG901
Parcel 11 TR's D (425183, Recorded 5-11-73, BK277, PG320
~
Parcel 13 WD (425179, Recorded 5-11-73, BK277, PG316 Parcel 14 WD $422159, Recorded 1-15-73, BK276, PG73 Parcel 15 WD $422158, Recorded 1-15-73, BK276, PG72 Parcel 19 WD $426182, Recorded 6-21-73, BK277, PG774 QCD $426183, Recorded 6-21-73, BK277, PG776 Parcel 21 TR's D $431590, Recorded 3-15-74, BK279, PG785 Parcel 22 WD $423572, Recorded 3-12-73, BK276, PG750 Parcel 23 WD $426439, Recorded 7-2-73, BK277, PG900 Parcel 24 QCD $430565, Recorded 1-24-74, BK273, PG284 Parcel 25 WD in TR $423087, Recorded 2-22-73, yK276, PG493 Parcel 26 WD in TR $423086, Recorded 2-22-73, BK276, PG491 Parcel 27 WD in TR $424181, Recorded 4-3-73, BK276, PG1048 Parcel 28 TR's D $459784, Reccrded 7-6-77, BK288, PG650 _
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Parcel 29
[
WD $462001, Recorded 9-21-77, BK289, PG198 Parcel 30 WD $469580, Recorded 6-21-78, BK291, PG72 Parcel 31 TR's D $439779, Recorded 4-17-75, BK281, PG669 Parcel 32 WD $433435, Recorded 5-31-74, BK280, PG444 Parcel 32-1 WD $454954, Reccrded 1-13-77, BK287, PG255 Parcel 33 TR's D $453474, Recorded 11-18-76, BK286, PG900 Parcel 1RR (Railroad)
WD $437173, Recorded 11-22-74, BK281, PG924 Parcel 2RR WD $438600, Recorded 2-14-75, BK282, PG256 Parcel 3RR WD $434263, Recorded 7-3-74, BK280, PGB33 Parcels 4RR, 4RRA, and 4RRB WD in TR $431897, Recorded 4-1-74, BK279, PG909 WD in TR $431899, Recorded 4-1-74, BK279, PG913 TR's D $443723, Recorded 10-21-75, BK283, PG938 Parcel 5RR WD $436961, Recorded 11-12-74, BK281, PG862 Parcel 6RR WD $433434, P.ecorded 5-31-74, BK280, PG442 Parcel 7RR WD $437753, Recorded 12-31-74, BK281, PG1149 QGD $437754, Recorded 12-31-74, BK281, PG1151 - _ _ _ _ _ _ _ _ _
Parcels SRR, SRRA, and SRRB WD 9436594, Recorded 10-24-74, BK281, PG711 QCD $436595, Recorded 10-24-74, BK281, PG713 WD in TR $436596, Recorded 10-24-74, BK281, PG715 Parcels 9RR and 9RRA WD $43823'9, Recorded 1-23-75, BK282, PG145 QCD 4438240, Recorded 1-23-75, BK282, PG147 WD in TR 6438238, Recorded 1-23-75, BK282, PG143 Parcels 10RR, 10RRA,.and 10RRB TR's D #436593, Recorded 10-24-74, BK281, PG709 WD in TR #431560, Recorded 3-14-74, BK279, PG771 Parcel 11RR WD $436592, Recorded 10-24-74, BK281, PG708 Parcel 12RR QCD 4502362, Recorded 7-1-82, BK299, PG111-115 As used herein, the "Braidwcod Station Site" is the land 2.
conveyed by.the following deeds:
T Parcel 1 Special WD #R73-33682, Recorded 13-7-73, Will County Parcel 2 and Parcel 1 Corridor Special WD 4R75-04282, Recorded 2-21-75, Will County i
QCD $R75-07989, Recorded 4-9-75, Will County Parcel 3 i
WD GR73-00389, Recorded 1-4-73, Will County Parcel 4 QOD $R73-00320, Recorded 1-4-73, Will County QCD tR73-00321, Recorded 1-4-73, Will County QCD 6R73-00322, Recorded 1-4-73, Will County i
QCD #R73-00323, Recorded 1-4-73, Will County l
WD $R76-06641, Recorded 3-11-76, Will County e
W
,I
O Parcel 5 Court Order $R75-26232, Recorded 9-30-75, Will County QCD fR76-12112, Recorded 4-28-76, Will County Parcels 6 and 7 WD #R73-32465, Recorded 10-25-73, Will County WD #R73-32466, Recorded 10-25-73, Will County WD #R73-32467, Recorded 10-25-73, Will County Parcel 7-1 WD #R77-29452, Recorded 8-12-77, Will County Parcel 8 WD 4R74-28701, Recorded 11-18-74, Will County Parcel 9 TR's D $R76-11403, Recorded 4-22-76, Will County Parcel 10 TR's D $R74-10641, Recorded 5-9-74, Will County Parcel 11 TR's D #R74-02647, Recorded 2-1-74, Will County Parcel 12 Special WD #R74-10086, Recorded 5-3-74, Will County Parcel 13 QCD #R73-09343, Recorded 4-4-73, Will County Parcel 14 Special WD (R73-12394, Recorded 5-2-73, Will County Parcels 15, 16 and 38 Special WD $73-11350, Recorded 11-8-73, Xankakee County Parcel 17 Special WD $R74-10067, Recorded 5-3-74, Will County Parcel 18 WD $R72-33692, Recorded 11-16-72, Will County a
Parcel.'19 WD 4R73-12393, Recorded 5-2-73, Will County Parcel 20 WD $R73-28751, Recorded 9-20-73, Will County Parcel 21 TR's D #R75-000787, Recorded 1-10-75, Will County Parcel 22 WD #R75-13721, Recorded 6-6-75, Will County Parcel 23 WD $238349, Recorded 4-17-75, BK328, PG787, Grundy County Parcel 24 WD $239424, Recorded 6-26-75, BK329, PG260, Grundy County Parcel 25 WD $247760, Recorded 1-27-77, BK342, PG610, Grundy County Parcel 25-1 Railroad Spur Title in Trust 45553, CT&T Co.
Parcel 25-2 QCD #250782, Recorded 8-1-77, BK350, PG455, Grundy County Parcel 26 Title in Trust 45553, CT&T Co.
Parcel 27 WD #73-4771, Recorded 5-25-73, Kankakee County QCD $73-4774, Recorded 5-25-93, Kankakee County QCD #73-4775, Recorded 5-25-73, Kankakee County QCD #73-4776, Recorded 5-25-73, Kankakee County QCD $73-4777, Recorded 5-25-73, Kankakee County QCD $73-4778, Recorded 5-25-73, Kankakee County WD #73-4779, Recorded 5-25-73, Kankakee County WD #73-4780, Recorded 5-25-73, Kankakee County WD $73-4781, Recorded 5-25-73, Kankakee County QCD $73-4782, Recorded 5-25-73, Kankakee County i
i
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Parcel 28 WD $73-76, Re:Orded 1-4-73, Kankakee County Parcel 29 WD $72-10952, Recorded 11-17-72, Kankakee County Parcel 30 WD #72-10954, Recorded 11-17-72, Kankakee County Parcel 31 WD $73-2911, Recorded 4-4-73, Kankakee County Parcel 32 WD $73-772, Re:Orded 1-26-73, Kankakee County Parcel 33 WD $72-6651, Recorded 7-26-72, Kankakee County Parcel 34 WD $73-75, Recorded 1-4-73, Kankakee County Parcel 35 WD #72-9224, Recorded 10-3-72, Kankakee County Parcel 36 WD 472-9223, Re:Orded 10-3-72, Kankakee County Parcel 37 Special WD $75-1247, Recorded 2-24-75, Kankakee County Parcel 39 Conservator's Dead (73-5184, Recorded 6-4-73, Kankakee County Parcel 2 Corridor TA's D GR76-16535, Recorded 6-3-76, Will County Parcel 3 Corridor WD #R73-31738, Recorded 10-18-73, Will County
~7-
Parcel 4 Corridor WD $R73-36061, Recorded 12-6-73, Will County Parcel 5 Corridor WD #R74-01538, Recorded 1-18-74, Will County Parcel 6 Corridor Easement - See Braidwood - Wilton Center R/W, Parcel 6 Parcel 7 Corridor WD #R73-26439, Recorded 8-29-73, Will County QCD $R73-26440, Recorded 8-29-73, Will County Parcel 8 Corridor WD #R74-02644, Recorded 2-1-74, Will County Parcel 9 Corridor WD #R74-21461, Recorded 8-29-74, Will County Parcel 10 Corridor WD 4R75-07305, Recorded 4-1-75, Will County Parcel 11 Corridor TR's D GR75-07303, Recorded 4-1-75, Will County Parcel 12 Corridor TR's D $RS2-06274, Recorded-3-29-82, Will County 3.
Edison will grant subsidiary an easement in the Byron station site for the purpose of (i) operating and maintaining the Byron Unit 2 generating facility, including any needed replacements, modifications, additions, retrofits or similar improvements to the equipment and structures constituting Byron Unit 2, and (ii) making such use of the Byron Station Site as is appropriate in connection with the retirement and _ - - _ - _ _ _ _ _ _ _ _ - _ _
deco==issioning of such equip =ent and structures.
4.
The facilities and structures which constitute the Byron Unit 2 generating facility include the Byron Unit 2 a.
Reactor containment b.
Reactor Vessel c.
Reactor internals including control rod drive mechanisms, instrumentation and detectors, pressurizers and steam generator including separator and dryer.
d.
Cranes and Holsts used solely in connection with operation of the Unit e.
Main and Misc. Instrument and Control Panels f.
Piping, including valves and supports used solely in connection with operation of the Unit g.
Circulating Water Pu=ps used solely in connection with operation of the Unit h.
Turbine (including foundation) 1.
Generator (including foundation) j.
Condenser X.
345 KV. Main Power Disconnect switch (1/2 interest) 3.
Natural Draft Cooling Tower such f acilities and structures also include any other facility or structure at the Byron station site which (i) was designed, constructed or installed primarily for use in connection with the operation of Byron Unit 2, and (ii) in the case of any such facility through which electricity generated by Byron Unit 2 flows (together with the structures which support such facility), is located in the systa= at or prior to the points designated A on the attached diagram.
5.
Edison will convey the Braidwood Station site to subsidiary s'tbject to the reservations contained in paragraph 2 of the racilities Transfer Agreement between Edison and subsidiary together with all equipment, structures, inventories, raterials 9
and supplies located or stored thereon except the transmission facilities.
As used herein "trans=ission facilities" means any agaipment through which electricity generated by Braidwood Unit I f or Braidwood Unit 2 flows (together with the structures which t
support such facilities) which is located in the system after beth of the points designated A on the attached diagr.sm.
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DI/sGRAM 91B.
'.Ib.
POWER SUPPLY AGREEMINT BETWEEN
[ SUBSIDIARY)
AND CO!O!ONWEALTH EDISON COMPANY This Power Supply Agree =ent (" Agreement"), made and j
entered into this day of 1987, by and between (Subsidiary), ("(Subsidiary)"), and COMMONWEALTH EDISON COMPANY,
(" Edison"),
WITNESSETH:
WHEREAS, (Subsidiary) shall own certain electric generating units com:nonly known as Byron Unit 2, Braidwood Unit 1 and Braidwood Unit 2 (the " Units"); and WHEREAS, Edison is a public utility engaged in, among other businesses, the generation, purchase, transmission, distri-bution and sale of electric power and energy at wholesale and retail; and WHEREAS, (Subsidiary) has agreed to sell to Edison power and energy available to (Subr.idiary) from the Units, and Edison has agreed to join with (subsidiary) in executing an agreer.ent that will set forth in detall'the terms and conditions for the sale of such power and energy by (Subsidiary) to Edison; and WHEREAS, Byron Unit 2 and Braidwood Unit 1 are expected to be placed in service on or before July 1, 1987; Exhibit C
NOW, THERITORI, [ Subsidiary) and Edison, in consider-ation of the premises and the mutual agreements contained herein, which each of the parties hereto acknowledges to be sufficient consideration, agree as follows:
ARTICLE I TERM OF AGRIEEENT 1.1 ETTECTIVE DATE.
The Effective Date of this Agreement shall be July 1, 1987.
1.2 TERM.
This Agreement will have an Initial Ter= br: ginning on the Effective Date hereof continuing through and including June 30, 1992.
The Initial Ter: of this Agreement is subject to extension pursuant to the provisions of Section 5.4 of this Agreement.
The parties recognize that the date for exercise of the cption relative to Braidwood 2 capacity provided in subparagraph (ii) of Section 5.3 hereof falls outside such Initial Terz, but nevertheless survives.
ARTICLE II UNIT CAPAC:IY SALE AND RESERVE RISPONSIBILITY 2.1 UNIT CAPACITY SALE.
During the Initial Ter: of this Agreement (and any extension of such Initial Term pursuant to section 5.4 of this Agreement), (subsidiary) shall r.ske available to Edison all the power and energy available frem each of the Units from time to time and at any time for Edison's own use or resale to others.
2-
2.2 RESERVE RESPONSIBILITY.
The sale by (Subsidiary) to Edison of the output of the Units pursuant to section 2.1 is a sale without generating capacity reserves.
ARTICLE III POINTS OF DELIVIRY r
3.1 POINTS OF DELIVERY.
Edison shall receive and take title to power and energy produced at each Unit at the point of interconnection between the Unit and Edison's facilities.
ARTICLE IV CHARGES TOR SERVICE 4.1 RISERVATION CHARGE.
During the Initial Terr of this Agree =ent (and any extensien of such Initial Term pursuant to Caction 5.4 of this Agree:ent), Edison shall pay (subsidiary) a base monthly reservation charge of $55,000.000 beginning with the bill for July, 1987.
Such base monthly reservation charge shall be subject to increase as provided in section 5.4 of this Agreement.
4.2 ENERGY CKARGES.
For each kilowatthour of energy delivered to Edison hereunder in any month Edison shall pay (Subsidiary) the cost of fuel (including applicable costs of leased nuclear fuel) incurred in such month to produce the energy purchased by Edison, such cost of fuel to be calculated in a j
manner consistent with the provisions of Edison's Illinois commerce commission ("ICC") fuel adjustment clause.
If, in any of the periods listed on the table set forth below, (subsidiary) produces energy from the Units in excess of l
110% of the target level for such period listed on such table
(" Bonus Energy"), Edison shall also pay (Subsidiary) an amount determined in accordance with the following formula:
1/2 (S - C) + C, where S=
the savings deemed to result from the production of Bonus Energy; and C=
aucunts previously credited by Edison to retail ratepayers pursuant to the " output Guarantee" provisions of Paragraph 5 of the Memorandum of Understanding dated Tabruary 3, 1987, between Edison and certain other parties (the " Memorandum of Understanding"), and not previously considered in determining compensa-tion for Bonus Energy or 5, which-ever shall be less.
In determining whether (subsidiary) has become entitled to compensation for Bonus Energy, all energy output for any period listed on the table set forth below up to the target level for such period shall be considered normal output and only when (subsidiary) has produced energy from the Units in such period in excess of 110% of the target level for such period shall (subsidiary) become eligible for Bonus Energy co:pensation..
TAPGET LEvrts Period Cu-u_1stive Period Gioavatthourg Gicavatthours July-Dec 1987 6,000 6,000 1988 11,000 17,000 1989 13,200 30,200 1990 16,100 46,300 1991 18,000 64,300 Jan-June 1992 7,550 71,850 The savings deemed to be realized by Edison from the production of Bonus Energy shall be the difference between the fuel cost incurred by (subsidiary) in producing Benus Energy and the cost Edison would have incurred in replacing such Bonus Energy.
Edison, in confor=ity to the Memorandum of Understanding, shall deter =ine the value of such replace-ment power.
The additional Bonus Energy compensation to which (Subsidiary) may be entitled shall be determined no later than 30 days following the end of the period to which such Bonus Energy compensation relates.
Any such Bonus Energy compensation shall be billed to Edison in equal monthly installments over the 12 months succeeding the conth in which such determination is made.
4.3. FIRM RATES.
The rates for service specified herein, as they may be increased as expressly 'provided for in section 5.4, shall remain in effect during the Initial Tarn of this Agreement and any extension thereof pursuant to section 5.4, and shall not be subject to change through application to the Federal Energy Regulatory Commission ("TERC") pursuant to the provisions of Section 205 of the Federal Power Act absent the 5-i
agreement of the parties hereto.
Similarly, the pricing mechanisms specified in Article V shall not be subject to change through application to the TERC pursuant to such
(
provisions of the Federal Power Act.
i ARTICLE V CPTIONS 3
5.1 EXERCISE OT OPTIONS.
Edison shall have the options specified I
in Sections 5.2, 5.3 and 5.4 below to purchase power and l
i energy from (subsidiary) after the Initial Term of this Agreement.
Except as otherwise provided in Section 5.4 f
below, each such option is exclusive of the others, and the option selected by Edison must be exercised by Edison no, Inter than the close of business, Monday, July 1, 1991.
5.2 MOST FAVORID NATION STATUS (Option a).
During the period June 30, 1992, through June 30, 2012, Edison may purchase i
power and energy from (subsidiary) produced from the Units, l
when and as available frem the Units and subject to prior sale to others, at any time and from time to time at prices subject to the jurisdiction of the TERC but subject to Edison's rights described in Appendix A to this Agreenant.
i Nothing contained in this section 5.2 shall be deer.ed to deprive the ICC of any authcrity it may have to approve contracts for the purchase of such power and erergy or to review the prudence of such purchases.
If the TER: is without or disclaimo jurisdiction with respect to the rates at which such sales arn to be made by (Subsidiary) to Edison, 6-l
r I
l the rates agreed upon by the parties shall be submitted to the ICC for review under Section 7-101 of the Illinois Public Utilities Act and the rates agreed upon by the parties, as j
i I
l they may be modified by the ICC upon review, shall be the basis upon which Edison shall compensate (subsidiary).
5.3 NEW AGREEMENT (Option b).
(i) Edison shall have the option to contract with (Subsidiary) to purchase not less than the entire output of Byron Unit 2 for the remainder of its useful life and, if it does so, to also purchase such secunt of power (in blocks of 100 megawatts) from Braidwood Unit 1 over the remainder of its useful life as Edison shall designate at the time of exercise of this option.
If Edison elects to purchase any amounts of power from Braidwood Unit 1 pursuant to this section 5.3, Edison shall have the further option to reduce the amounts of power (in blocks of 100 megawatts) that Edison is obligated to purchase from Braidwood Unit 1, any such reduction to be effective on July 1,1997 or, if Edisen has previously exercised the option provided for in Section 5.4 of this Agreement, effective on July 1, 2000, in either case by giving notice of such reduction 12 months prior to such effective date.
Edison shall purchase such power, and the ennrgy associated therewith, at rates determined using traditional not original' cost rate base / rate of return j
regulation and accounting for fuel and all other costs of production, all as determined by the TERC from time to tire.
If the TERC is without or disclains jurisdiction with respect i
7
a to such rates, or declines to make such a not original cost rate base / rate of return determination, such determination as ande by Edison and (subsidiary) shall be submitted to the Icc for review under section 7-101 of the Public Utilities Act, and the determination of the parties, as it may be modified by the Icc upon such review, shall be the basis upon which Edison shall pay (subsidiary).
In the event that Edison exerciser its option to reduce its purchases from Braidwood Unit 1, the amount payable to (subsidiary) shall be reduced to reflect such reduction effective as of the date of such reduction.
(ii) If Edison has elected to purchase the output of Byron Unit 2 and at least a part of the output of Braidwood Unit 1 under this section and has not elected to reduce the amount of power produced by Braidwood Unit 1 to be purchased under this section, Edison shall have the further option to elect on December 1, 1998, to purchase not less than the entire output of Braidwood Unit 2 during the period January 1, 2000 through the remainder of the useful life of Braidwood Unit 2.
In the event Edison exercises the option to purchase the output of Braidwood Unit 2, it shall not thereafter have any option under this Agreement to reduce the amount of power Edison is obligated to purchase from Braidwood Unit 1.
For power, and associated energy, produced from Braidwood Unit 2 Edison shall pay (Gubsidiary) the greater of (1) the rarket value of such power and energy as determined by reference to - -
third-party, arms length, long-term firm power purchase contracts commencing approximately January, 2000, or (2) rates determined using traditional not original rate base / rate of return regulation and accounting for fuel and all other costs of production, all as determined by the FERC.
l If the TERC is without or disclaims jurisdiction with respect to such rates, or declines to make such a determination of market value or not original cost rate base / rate of return rates, such determinations as made by Edison and (subsidiary) shall be submitted to the Icc for review under Section 7-101 of the Public Utilities Act, and the determinations of the parties, as they may be modified by the Icc upon such review, shall be the basis upon which Edison shall pay (Subsidiary),
except as otherwise provided in this Section.
5.4 EXTENSION OPTION (option c).
Edison shall have the option to l
defer until the close of business on Friday, July 1, 1994, the time by which it must exercise the option p'rovided in l
Section 5.2 above or the option provided for in Section 5.3 f
above.
If Edison exercises the option provided for in this Section 5.4, the Initial Ters of this Agreement shall be extended, and the entire output of the Units shall continue to be available to Edison, to and including June 30, 1995, l
and the monthly payment required to be made by Edison under I
section 4.1 of this Agreement shall be increased by an amount equal to 1/12 of the annual retail rate increase'to which Edison shall be entitled as a consequence of its election, at
(
l I
-s-l
the direction of the ICC, to exercise the option provided by l
this Section 5.4.
The bonus provision of Section 4.2 shall not apply during the period of such extension.
Particularly, but not in limitation of the foregoing, the capacity of Braidwood 2 shall remain subject to the option specified in Section 5.3 (ii) above (being part of Option b as set out in
" Options After 5 Years" in Paragraph 5 of the Memorandum of Understanding dated February 3, 1985).
5.5 DETAULT OPTION.
(Subsidiary) recognizes that Edison has agreed with others to be directed by the ICC in its exercise of the options provided in Sections 5.2, 5.3 and 5.4 above.
In the event that Edison has filed with the ICC a request for such direction no later than 12 months prior to the applicable option exercise date, and the ICC has failed to direct Edison with regard to any such exercise, Edison shall be deemed to have elected to contract to purchase the entire output of Byron Unit 2 for the remainder of its useful life and 504 Jof the entire output of Braidwood Unit 1 for the remainder of its useful life beginning on the date 12 months following the applicable exercise date.
In the event this section 5.5 becomes operative, Edison shall have no further options under this Article V and the rates for power for which Edison has so contracted shall be determined as provided in section 5.3 with respect to the output of Byron Unit 2 and Braidwood Unit 1.,
ARTICLE VI BILLING 6.1 STATEMINTS.
As soon as practicable after the end of each calendar month, the Parties shall cause to be prepared a statement setting forth the energy delivered by (Subsidiary) to Edison from each Unit and the cost of fuel incurred by (subsidiary) in producing such energy during such month.
If necessary, the cost of fuel may be determined on an estimated basis and adjusted retroactively once the actual cost of fuel incurred in such month is known.
Generally accepted practices and methods of accounting and billing for energy transactions between interconnected systems shall be followed in preparing such statements.
6.2 BILLE.
As soon as practicable after preparation of the zenthly statement provided for in Section 6.1 above, (Subsidiary) shall render to Edison a bill for the amounts due [ Subsidiary) by Edison for energy purchased in the sonth covered by such statement, the capacity reservation charge for such month and any Bonus Energy compensation due (Subsidiary) pursuant to Section 4.2 of this Agreement.
Edison shall pay [ subsidiary) the amount due within 15 days of the date of the bill.
Unless otherwise agreed upon, a calendar month shall be the standard monthly period for the purposes of settlement under this Agressant. ;
r i
i e
ARTICLE VII MITERS AND MITERING 7.1 METERS.
Electric power and energy interchanges at each peint A
of delivery shall be measured by suitable metering equipment provided by Subsidiary.
7.2 TESTING.
Such metering equipment shall be tested by Edison at suitable intervals as specified by the parties from tir.e to time, such intervals not to exesed 12 months.
The l
accuracy of registration shall be maintained in accordance with sound operating practice.
7.3 BILLING CORRECTIONS.
If, as a result of any test, any neter shall be found to be registering more than two percentage points above or below one hundred percent accuracy, the account between the parties hereto shall be corrected, for a period equal to one-half of the elapsed time since the last prior test, according to the percentage of inaccuracy so found, except that if the meter shall have become defective or inaccurate at a reasonably ascertainable time since the last prior test of such meter, the correction shall extend back to such time.
Should metering equipment at any time fail to register, the energy delivered shall be deternined from the best available data.
ARTICLE VIII CONDITIONS PRICEDENT TO ETTECTIVINESS OF AGREEMENT, AMENDMENTS AND SPECIAL TERMINATION RIGHT l
8.1 CONDITIONS PRICEDENT.
The effectiveness of this Agreenent in conditioned upon the approval or acceptance for filing of i
this Agreement by any regulatory authority having jurisdic-tion and the approval by the ICC of Edison's sale of the Units to (Subsidiary).
t 8.2 TERC ACCEPTANCE FOR FILING.
(Subsidiary) and Edison mutually recognize and agree that this Agreement will be filed with the Federal Energy Regulatory Commission and (Subsidiary) and Edison agree jointly to request acceptance for filing of this Agreement without suspension by the FIRC.
In this connec-tion, Edison and (Subsidiary) agree that each of them will execute any and all documents, duly authorize all officers or agencies, and do all of the things necessary and appropriate to secure acceptance for filing of this Agreement by the FERO without suspension, or change or modification of the terr.s hereof, no later than July 1, 1987.
8.3 AMINDMINTS.
This Agreement may be amended only upon mutual agreement of the parties.
Any such amendment shall be in writing and will be effective as of the date set forth in the order of any regulatory authority, or other governmental agency having jurisdiction, approving or accepting for filing such amendment or any portion thereof that is required to be approved or accepted.
8.4 SPECIAL TERMINATION RIGHT.
If, for any reason, Edison is not permitted to place in effect or maintain the rates provided for in the Memorandum of Understanding, Edison shall have the right to terminate this Agree =ent, such termination to be effective when and as specified by Edison.
ARTICLE IX MISCELLANEOUS 9.1 GOVERNING LAW.
The validity, interpretation and performance of this Agreement and each of its provisions shall be gov-erned by the laws of the State of Illinois, except to the extent that this Agreement shall be subject to federal law.
9.2 COUNTERPARTS.
Any number of counterparts of this Agreement may be executed and each shall have the same force and effect as the original.
9.3 NOTICES.
Any notice, demand or request made by a party to the other party pursuant to any provision of this Agreement i
shall be made in writing and shall be delivered either in person, by prepaid telegra= or by registered or certified mail to the officer at the address listed below, provided that each party may from time to time change the designated recipient or the address or both, to be used for the giving to it of any such notice, demand or request, by giving written notice of such change to the other party.
TO (Subsidiary]t TO Edison:
9.4 SECTION HEADINGS NOT TO ATTECT MIANING.
The descriptive headings of the various Articles and sections of this Agree-ment have been inserted for convenience only and shall not modify or restrict any of the terms and provisions thereof.
~
9.5 FURTHER ASSURANCES.
From time to time after the execution of this Agreement, each party shall execute such instruments, upon the request of the other, as may be necessary or appro-priate to carry out the intent of this Agreement.
9.6 WAIVERS.
Any waiver by either party of its rights with respect to a default under this Agreement, or with respect to any matter arising in connection with this Agreement, shall not be a waiver of any subsequent default or matter.
P.7 COMPUTATION OF TIME ~.
In computing any period of time prescribed or allowed by this Agreement, the day of the act, event, or default from which the designated period of time begins to run shall not be included.
The last day of the period so ce=puted shall be included, unless it is a Saturday, Sunday, or legal holiday, in which event the period shall run until the end of the next business day which is not a saturday, Sunday, or legal holiday.
9.8 SURVIVORSHIP OF OBLIGATIONS.
The termination of this Agreement shall not discharge any party from any obligation it owes to the other party under this Agreement by reason of any transaction, loss, cost, damage, expense or liability which shall have occurred or arisen after the effective date of this Agreement, but prior to such termination.
It is the intent of the parties that any such obligation owed (whether the same shall be known or unknown as of the termination of this Agree =ent) will survive the termination of this Agreement. --
9.9 Subsidiary.hereby agrees to be bound by the obligations imposed on it by the Me=orandu= of Understanding as if it-were an original signatory thereto.
IN WITNESS WHEREOT, the parties have caused this Agreement to be executed by their respective authorized officers and their respective corporate seals to be affixed hereto' as of the date first above written.
ATTEST:
COMMONh'EALTH EDISON COMPANY By Secretary (Title)
ATTEST:
.[ Subsidiary)
By Secretary (Title)
I.
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Accendix &
O "Most Favored Nations" During the 20-year period June 30, 1992 through June 30, 2012 Idison under Section 5'.2 of this Agreement shall have the rights set forth in paragraphs (A) and (B) below.
(A)
If Edison is purchasing power under a Contract with the Subsidiary (" Pre-Existing Edison Contract") and the Subsidiary
-enters into a contract to sell power to a Third Party (" Third Party Contract") which is comparable to the Pre-Existing Edison contract, but contains more favorable prices or payment terns, Edison may elect to have the price and pay =ent terms of the Third Party Contract substituted for the prices and payment terns of the Pre-Existing Edison Contract.
A Third Party Contract shall be considered to be "co= parable" only if:
I.-
It is effective over approximately the same calen-dar time period as the Pre-Existing Edison Contract.
II.
Any other difference between the terms,and condi-tions of the Third Party Contract (excluding price and payment terus) and those of the Pre-Existing Edison Contract does not I
significantly affect (i) the Subsidiary's cost of providing ser-vice, (ii) the quantity or type of service to be provided, (iii) the benefits obtained by the Subsidiary, or (iv) the risks under-taken by the Subsidiary.
Edison shall have no right to substitute only the price er payment terms of the Third Party Contract for those of the Pre-l
O Existing Edison Contract, it being understood that Edison's elec-tion under this paragraph is limited to substitution of both the pay =ent and price terms of the Third Party Contract for those of the Pre-Existing Contract.
B.
If the Subsidiary enters into a Third Party Con-tract and Edison advises Subsidiary that it desires to purchase power under a comparable contract, the Subsidiary will offer power to Edison under a co= parable contract, if such power is available from the Units.
For purposes of this paragraph, a contract will be considered to be comparable to the Third Party Contract only if its terms and conditions are materially the same as those of such Third Party Contract excepting only such terms and conditions,as do not significantly affect (i) the Subsidiary's cost of providing service, (ii) the quantity or type of service to be provided, (iii) the amounts, form and timing of payments, (iv) the benefits obtained by the Subsidiary or (v) the risks undertaken by the Subsidiary.
No such comparable contract shall relieve Edison of any of its obligations under any Pre-Existing Edison Contract.
Upon the execution of any Third Party Contract, the Subsidiary will give Edison notice of same and furnish copy of 1
sa=e to Edison within 30 days of the execution of said Third Party Contract.
i 1
CONSTRUCTION AND OPERATING AGREEMENT h
Agreement dated as of
_, 1987, between
(" Subsidiary") and Com=cnwealth Edison Comprny (" Edison").
Subsidiary and Edison agree as fol-lows:
1.
Recitals.
In accordance with an agreement entitled Me=orandum of Understanding, dated February 3,
- 1987, among Edison, the Governor of the State of Illinois, the Attorney General of the State of Illinois, the State's Attorney of Coc,k County and other parties (the "Memorandu="), Edison has agreed to transfer its nuclear generating facilities known as Byron Unit 2 and Braidwood Units 1 and 2 (the " Units")
to Subsidiary.
The real estate and facilities constituting the Units are more particularly described in the Facilities Transfer Agreement.
Edison has also agreed that it would complete and operate the Units transferred to subsidiary as agent for Subsidiary.
2.
Completion of Construction.
Edison agrees to ce=plete the construction of the Units as soon as is commercially feasible in accordance with the Construction Permits issued by In this the United States Nuclear Regulatory Commission ("NRC").
regard, Edison shall, and Subsidiary irrevocably authorizes
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l i
l Exhibit D
Edison to, make such contracts, agreements and modifications to existing contracts and take such other actions as Edison, in its sole-discretion, considers necessary or appropriate to complete the construction of the Units and their preparation for commercial service.
Subsidiary will cooperate with Edison in connection with its duties under this paragraph, including, without limitation, applications for authorizations, per=its or licenses and the execution of such other docu=ents as may be reasonably required.
3.
Construction Pavrents.
Edison shall be respons-ible for making arrangements for the payment of all costs and obligations incurred in connection with the c
- ruction of the Units.
The.corts incurred by Edison in nection with such construction up to the in-service date of the Units shall b deemed to be a contribution to capital by Edison as sole shareholder of subsidiary.
Edison shall also be responsible for making arrange-ments for payment of all costs and obligations incurred after the
{n-servicedate, in connection with the construction of any needed replacements, modifications, additions, retrofits or similar improvements with respect to the Units.
Edison shall bill Subsidiary for these costs.
To the extent practicable 7 the billings shall be at such times as shall be appropriate to put the amounts billed in Edison's hands at the times disbursements are made.
To the extent such billing is not practicable, Edison 2-t
shall have the right to bill subsidiary for capital Cests.
" Capital Costs" means a return on Edison's unamortized investment in the item in question, at a rate equal to that which I
Edison has been authorized to earn on rate base in its then r.ost recent general rate order promulgated by the Illinois Co==erce Com=ission (such rate to vary when and as su'h Commission c
promulgates new orders) and, in the case of investment in depreciable (or otherwise amortizable) property, a=ortization of the value of such investment in accordance with the basis then used by Edison in respect of similar property includable in Edison's retail rate base.
Subsidiary may require Edison to provide Subsidiary with a state =ent showing in reasonable detail the basis for the computation of any bill, at or about the time the bill is rendered to Subsidiary.
The existence of a dispute between Edison and subsidiary with respect to the proper amount of any bill shall not relieve subsidiary of its obligation to pay the bill when due.
All bills shall be subject to audit and later correction if in error.
4.
Ooeration and Maintenance.
Edison shall operate and maintain the Units in accordance with the terms of the applicable NRC Operating Licenses, taking all steps which it t
considers necessary or appropriate for that purpose, including, but not limited to, (a) manning the Units with its own employ'res, j
(b) making and modifying contracts with third parties, (c).
_... - - =
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securing and keeping in effect all necessary licenses and other governmental authorizations, (d) preparing and maintaining reports and records required by governmental authority or l
necessary or appropriate to properly account for the costs and expenses of operation and maintenance of the Units, (e) providing purchasing, engineering and other support services associated with the operation of the Units, (f) procuring and maintaining such liability and property insurance as may be required by law or may be otherwise considered to be desirable by 4
Edison and (g) providing off-site electrical power to the Units as described in Section 8.2 of the Safety Evaluation Reports for l
Byron Station dated February,1982, and the Braidwood Station dated December, 1983, as amended from time to time.
During the Priority Period' applicable to a Unit, Edison will treat such Unit on the same basis as its own units, allocating personnel and other resources, dispatching and establishing priorities for activities and resources among the Unit and Edison's own units as though Edison owned the Unit.
The " Priority Period" applicable to a Unit is the Rate Moratorium Period (as defined in the Memorandum) and any subsequent period during which Edison is purchasing output from such Unit under a contract entered into ofparagraph5oftheMemorandum.
pursuant to subparagraph (b)
During any other period Edised will operate and maintain a Unit in accordance with accepted ut !11ty practices.
Edison shall also echstruct any needed replacements, modifications, additions,retf5pfitsorsimilarimprove=entsto
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the Units, whether required before or af ter co=pletion of the Units, and shall retire and decommission the Units upon the expiration of their useful lives, salvaging any useful parts of the Units.
Subsidiary will cooperate with Edison in all activities in connection with the operation and maintenance of the Units, including, without limitation, applications for authorizations, permits and licenses and the execution of such other documents as may be raasonably required.
5.
Operation and Maintenance Costs.
Edison shall be responsible for making arrangements for the-payment of all costs and obligations incurred in connection with the operation and maintenance of the Units, including without limitation, all costs i
associated with materials and supplies inventories used for the Units and the disposal of nuclear fuel used in the Units,-
irrespective of the identity of the owner of such fuel.
Edison shall bill Subsidiary for these costs.
To the extent practicable, the billings shall be at such times as shall be appropriate to put the amounts billed in Edison's hands at the times disbursements are made.
To the extent such billing is not practicable, Edison shall have the right to bill Subsidiary for Capital costs.
Subsidiary ma,y require Edison to provide subsidiary with a statement showing in reasonable detail the basis for the computation of any bill, at or about the time any j
bill is rendered to Subsidiary.
The existence of a dispute between Edison and Subsidiary with respect to the proper amount
[ - - - - - - - -
of any bill shall not relieve Subsidiary of its obligation to pay the bill when due.
All bills shall be subject to audit and later correction if in error.
6.
Nuclear Fuel.
Nuclear fuel may be leased or subleased by Edison to subsidiary.
In the case of fuel subleased to Subsidiary, Subsidiary shall pay to Edison a rental equal to the amounts payable by Edison in respect of such fuel under Edison's lease of such fuel.
To the extent practicable, such rental payments shall be due at such times as shall be appropriate to put the a=ounts billed in Edison's hands at the times Edison makes its rental payments.
In the case of nuclear fuel leased by Edison to Subsidiary, subsidiary will pay to Edison a rental equal to the capital Costs applicable to such fuel.
1 7.
Allocation of Overhead.
Subsidiary recognizes that under this Agreement Edison will incur expenses associated with its management and supervisory duties which are not fully i
compensated in the Construction Costs and operation and Mainten-ance Costs provided for above.
Accordingly, Subsidiary agrees to i -
pay Edison annually an allocable portion of its management and supervisory overhead costs with respect to each of the Units, to l
l l
l l
l l l
be determined in accordance with the following formula:
U X
A and G T
Where:
"U" means the total construction expenditures and operating expenses of the Unit in question for that fiscal year; "T"
means Edison's total construction expenditures and -
operating expenses for that fiscal year including all such expenditures made in connection with this Agreement; and "AEG" means the total of Edison's Administrative and General Costs, as reflected in Edison's books of accounts maintained in accordance with applicable regulatory requirements, including applicable pension provisions, other employee benefits and payroll taxes, and executive management's salaries and the expenses of their offices for that fiscal year.
i With respect to each Unit " fiscal year" means that part of each calendar year during the term hereof which is subsequent -.. _.
to the in-service date of the Unit and prior to completion of its decom=issioning and retirement.
Edison shall bill subsidiary for its allocable share of management and supervisory overhead costs within 30 days after the close of each fiscal year.
Subsidiary shall make payment to Edison within ten days after receipt of the bill.
8.
Byron Station Cor-on Plant and Comron Costs.
Edison shall make the real estate and facilities designed, constructed or used as common plant for both units of the Byron Station available when and as required for operation and maintenance of Byron Unit 2.
Subsidiary agrees to pay to Edison for the use of such com=on plant a monthly rental charge equal to 50% of the capital costs applicable to such common plant.
To the extent practicable, costs properly assignable to a Unit at the Byron Station shall be assigned to the owner of such Unit.
Fifty percent of operating and maintenance costs not readily allocable to a Unit shall be allocated to Byron Unit 2.
The parties recognize that there are facilities associated with each of the generating units at the Byron Station which are not classified as common plant but which are, from time to time, used in connection with the operation of both units.
Such facilities will continue to be so used throughout the remaining useful lives of such generating units.
During the Priority Period applicable to Byron Unit II, neither party shall be obligated to co:pensate the other for such use.
For any i
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period thereafter, the parties will agree to an appropriate method of sharing the use of, and costs associated with, such facilities.
t 9.
Soare Ecuivrent.
Edison will make available to subsidiary for use in connection with the Units spare equipment and parts maintained in connection with Edison's units.
Subsidiary will make available to Edison for use in connection with Edison's units spara equipment and parts maintained in connection with the Units.
The party receiving any such spare equip =ent or parts shall co:pensate the other party either in cash or by providing like equipment or parts, at the election of the party providing such equip =ent or parts.
If payment is to be made in cash, such payment shall be equal to the original cost of the item in question.
At any time after the Rate Moratorium Period (as defined in the Memorandum), either party may terr.inate the obligations to make equipment and parts available under this paragraph.
10.
- Access, subridiary shall at all times provide Edison, its employees, independent contractors and other authorized invitees with access to the Units for such purposes as Edison, in its sole discretion, considers appropriate, including access to the NRC to assure compliance with NRC regulations..
11.
Tern.
Except as otherwise provided in paragraph 12, this Agreement will continue in force until the earlier of (a) the retirement of all of the Units or (b) such date as is provided for by Edison and subsidiary in a written agreement to the effect that this Agreement is terminated.
12.
Ternination.
Idison may terminate this Agreement if Subsidiary becomes insolvent or generally fails to pay, or admits in writing its inability to pay, debts as they become due; or Subsidiary applies for, consents to or acquiesces in the appointment of, a trustee, receiver or other custodian for subsidiary or any property thereof, or makes a general assignment
,for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for Subsidiary or for a substantial part of the property of Subsidiary and is not discharged within 30 days; or any bankruptcy, recrganization, debt arrangement, or
~-
other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding is commenced in respect of Subsidiary, and if such case or proceeding is not commenced by subsidiary it is consented to or acquiesced in by Subsidiary or remains for 30 days undismissed; or subsidiary takes any corporate action to authorize, or in furtherance of, any of the foregoing. --- _
Subsidiary may ter=inate this Agree =ent as to any Unit, X____---_,__
t upon twelve months' prior written notice to Edison of Subsid-inry's determination to terminate with respect to such Unit provided that no such termination may be effective prior to the end of the Priority Period applicable to such Unit.
The foregoing termination rights shall be in addition to any other rights the parties may have arising out of any fact or circumstance referred to in this paragraph or arising out of any default.
No such ter=ination shall relieve Edison of any
' obligation it may_hav.e as a licensed operator of the Units or as otherwise may be imposed on Edison by the NRC or by operation of law with respect to safety of construction, operation, n'aintenance, shutdown or decommissioning of the Units.
13.
Acency.
Subsidiary hereby appoints Edison as Subsidiary's agent for the purpose of completing construction of the Units and operating and maintaining them under the terms of this Agreement; and, it is expressly understood that in so constructing, operating and maintaining the Units, Edison will be acting solely as agent for Subsidiary and not as a principal.
This Agreement shall not create any rights in any person, other than Edison and Subsidiary, whether as a third party beneficiary or otherwise.
Edison shall have no obligation hereunder to anyone other than Subsidiary and subsidiary shall have no right to assign, convey, pledge or otherwise transfer any of its rights hereunder without the prior written consent of Edison.
Nothing -
contained herein shall operate to li=it any obligation Edison may have as a licensed operator of the Units, or as otherwise may be imposed on Edison by the NRC or by operation of law with respect to the safety of construction, operation, maintenance, shutdown or decommissioning of the Units.
14.
Miscellaneous.
(a)
The validity, interpretation and performance of this Agree =ent and each of its provisions shall be governed by the law of the State of Illinois as though all acts or omissions occurred in that State.
This Agreement is subject to the ap-proval of any regulatory authority required by law.
(b)
The section headings included in this Agree-ment have been inserted for convenience of referen:e only and shall in no way affect the interpretation of this Agreement.
(c)
This Agreement may not be amended except by a written instrument executed by Edison and Subsidiary.
(d)
This Agreement may not be assigned by either party without the prior written consent of the other party, which shall not be unreasonably withheld.
(e)
This Agreement is subject to approval by the Illinois com=erce Commission and shall only become effective upon such approval.
i ___
.. _ _ = -
Executed this day of 1987.
e COMMONWEALTH EDISON COMPANY 4
i By:
j Its:
4 i
(SUBSIDIARY)
- r By
4 Its:-
I I
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4 1 ;.
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8 FINANCING AGREEMENT COMMO!niEALTH EDISON COMPANY,
(" Edison"), and
(" Subsidiary"), in consideration of those matters set forth in Article I hereof agree as follows:
ARTICLE I Pecitals (a)
Edison owns 100% of the outstanding equity securi-ties of Subsidiary.
(b)
Edisen and Subsidiary are parties to a Facility Transfer Agreement, a Construction and Operating Agreenent, a,nd a Power Supply Agreement, all of even date herewith.
Pursuant to these agreements, Edison will transfer to Subsidia'ry the facilities ce==enly referred to as Byron Unit 2 and Braidwood Units 1 and 2 (collectively the " Units"), and as agent for Subsidiary, cc=plete construction of the Units, operate and maintain the Units, and construct any modifications thereto required for their continued operation, and, for at least 5 years, will have the right to purchase all of the power generated thereby.
In order to perform its obligations under those agreerents, Subsidiary may be required to make expenditures in excess of the revenues received by it frc= sales of power.
Exhibit E l
APTICLE II rundinc 1.
On or before July 1, 1987, Edison will make a cash contribution to the capital of Subsidiary in the amount of
$25,000,000 to provide working capital.
Thereafter, from time to time, and at Subsidiary's request, Edison will make available to subsidiary such funds as may be necessary to enable subsidiary to comply with any obligation it may have with respect to safe construction, operation, maintenance, shutdown or decommissioning of the Units; provided that nothing herein contained shall be construed as obligating Edison to provide funds to enable Subsidiary to continue or resume operation of the Units, or any of them, when Edison believes that continued or resumed operation is uneconomical.
2.
From time to time, and at subsidiary's request, Edison may make available to Subsidiary such funds as may be necessary to enable Subsidiary to perform its obligations in respect of the agreements referred to in Article I, or to fulfill any other obligation Subsidiary may come to have arising out of er relating to ownership or operation of the Units.
ARTICLE III conditions At Edison's option, funds to be provided hereunder shall be made available in the form of:
(1) loans bearing interest at a rate not to exceed 250 basis points above Edison's then most 5
recent borrowing of similar duration; (2) non-interest bearing capital advancest or (3) capital contributions.
ARTICLE IY Tern This Agreement shall continue in full force and effect during the term of the Construction and operating Agreement referred to above.
ARTICLE V Limitations (a)
The obligations of Edison to provide funding under paragraph 1 of Article II and its right to provide other funding hereunder shall be subject to approval of this Agreement by the Illinois ce==erce commission.
(b)
This Agreement shall not create any rights in any person, other than Edison and subsidiary, whether as a third party beneficiary or otherwise.
Edison shall have no ebligation hereun-der to anyone other than Subsidiary and Subsidiary shall have no right to assign, convey, pledge or otherwise transfer any of its rights hereunder without the prior written consent of Edison.
(c) subsidiary shall not use any of the funds provided to subsidiary hereunder for any purpose other than those specified in Article II.
3
Dated at Illinois, the day of 1907.
CO?O:0?NEALTH EDISON COMPANY By By
'#o UNITED STATES E'
'h NUCLE AR REGULATORY COMMISSION W A 5mNG TON, D. C. 20555 0
COMMONWFALTH EDISON COMPANY CENTR.4L IL.I.IVots # DOCKET LO. STN 50-455 Et.tctruc, G(NERAr#N4 BYRON STATION, UNIT 2 FACILITY OPERATING LICENSE comp 4ay License No. NPF-66 1.
The Nuclear Regulatory Connission (the Comis'im or the NRC) has found 5.d f
that:
@ad Cc.bl IH...is ikkc. (w.er.4 A.
TheapplicationAforalicensefiledbyCommonwealthEdisonCompanyd (e.-Ire. seer) lin-- %im--O complies with the standards and requirements of the Atomic Energy Act of 1954, as amended (the Act), and the Comission's regulations set forth in 10 CFR Chapter I, and all required notifications to other agencies or bodies have been duly made; B.
Construction of Byron Station, Unit 2 (the facility) has been substantially completed in conformity with Construction Permit No.
CPPR-131 and the application, as amended, the provisions of the Act and the regulations of the Comission; C.
The facility will operate in conformity with the application, as amended, the provisions of the Act, and the regulations of the Comission (except as exempted from compliance in Section 2.0.
below);
D.
There is reasonable assurance: (i) that the activities authorized by this operatinq license can be conducted without endangering the health and safety of the public, and (ii) that such activities will he conducted in compliance with the Comission's regulations set forth in 10 CFR Chapter I (except as exempted from compliance in Section 2.0. helow); o -r.a.,.3 4 4e C wl Ith.4 Eleckre. G e.e=A3 E.
Comonwealth Edison CompanyAis technically qualified to engage in Cya.g the activities authorized by this license in accordance with the Commission's regulations set forth in 10 CFR Chapter I; F.
Comonwealth Edison Company has satisfied the applicable provisions of 10 CFR Part 140, " Financial Protection Requirements and Indemnity Agreements," of the Comission's regulations; Exhibit F
f
-2 G.
The issuance of this license will not be inimical to the common defense and security or to the health and safety of the public; H.
After weighing the environmental, economic, technical, and other benefits of the facility against environmental and other costs and considering available alternatives, the issuance of Facility Operating 1.icense No. NPF-66, subject to the conditions for protection of the environment set forth in the Environmental Protection Plan attached as Appendix R to License No. NPF-37, issued February 14,1985, is in accordance with 10 CFR Part 51 of the Commission's regulations and all applicable requirements have been satisfied; and I.
The receipt, possession, and use of source, byproduct and special nuclear material as authorized by this license will be in accordance with the Commission's regulations in 10 CFR Parts 30, 40 and 70.
2.
Based on the foregoing findings regarding this facility, Facility M e.
Operating"LicenseNo.NPF-66isherebyissuedto H-
- ' i 2;;;' to read as follows:
E es-licensees A.
This license applies to Byron Station, Unit 2, a pressurized water reactor, and associated equipment (the facility) owned by
[g],q Comonwealth Ecison Companyt The facility is located in north central Illinois within Rockvale Township, Ogle County, Illinois CCa+ral Illia*I5 and is described in the Byron /Braidwood Station's Final Safety ElesMe 6caer.bg Analysis Report, as supplemented and amended, and in the licensee's Cc.q y*
Environmental Report, as supplemented and amended.
B.
Subject to the conditions and requirements incorporated herein, the Comission hereby licenses:
C. -lic enseep (1) 1
- E... A c -., 'Z
- j, pursuant to Section 103 of the Act and 10 CFR Part 50, to possess, use and operate the faciMty at the designated location in Ogle County, II'dinois, in accordance with the procedures andlimitationssetforthinthislicense?
Co-licensees, (2) tecr. pursuant to the Act and 10 CFR Part 70, to receive, possess and use at any time special nuclear material as reactor fuel, in accordance with the limitations for storage and amounts required for reactor operation, as described in the Final Safety Analysis Report, as supplemented and amended; Co-licca see.s (3) cffe, pursuant to the Act and 10 CFR Parts 30, 40 and 70, to receive, possess, and use at any time any byproduct, source and special nuclear material as sealed neutron sources for reactor startup, sealed sources for reactor instrumentation and radiation monitoring equipment calibration, and as fission detectors in amounts as required;
- Ut oblipliens cf Ae. c.o licensees win respea.f 4o Mt ewaceskig and
+ k racil a:e5 T..she AruwF operak.n of ne Ar.: liga,c.54f.,41.
and Me. Conf rue.&n and Operahn) A reamnt Med
, (W1 AL 3
are af4 cAed 4. de..,As,.t applic.k.a filed n 4peil 16, lif 7.
" Co-licensee.s (41 fiff:e, pursuant to the Act and 10 CFR Parts 30, 40 and 70, to receive, possess, and use in amounts as required any byproduct, source or special nuclear material without restriction to chemical or physical form, for sample analysis or instrument calibration or associated with radioactive apparatus or components; and Co-l a.weu (5) EEso, pursuant to the Act and 10 CFR Parts 30, 40 and 70, to possess, but not separate, such byproduct and soecial nuclear materials as may be produced by the operation of the facility.
C.
This license shall be deemed to contain and is subject to the conditions specified in the Comission's regulations set forth in 10 CFR Chaoter I and is subiect to all applicable provisions of the Act and to the rules, regulations and orders of the Comission now or hereafter in effect; and is subject to the additional conditions specified or incorporated below:
(1) Maximum Power Level CECO
": 'i-1 :.. is authorized to operate the facility at reactor core power levels not in excess of 3411 megawatts thermal (100 percent rated power) in accordance with the conditions specified herein. The items identified in Attachment 1 to this license shall be completed as specified. Attachment 1 is hereby incorporated into this license.
(2) Technical Specifications and Environmental Protection Plan The Technical Specifications contained in Appendix A (NUREG-1113),
as revised through Amendment No. 5 and revised by Attachment 2 to NPF-60, and the Environmental Protection Plan contained in Appendix B, both of which were attached to License No. NPF-37, dated February 14, 1985, are hereby incorporated into this license. contains a revision to Appendix A which is hereby incorporated into this license. " "::- - : shall operate the facility in accordance with the Technical. Specifications and the Environmental Protection Plan.
L(gc.
(3)
Initial Test Procram Any changes to the Initial Startup Test Program described in Chapter 14 of the FSAR made in accordance with the provisions of 10 CFR 50.59 shall be reported in accordance with 50.59(b) within one month of such change.
(4) Regulatorv Guide 1.97. Pevision 2 Comoliance The licensee shall submit by March 1, 1987, a preliminary report describing how the requirements of Reculatory Guide 1.97, Revision 2 have been or will be met. M ;-.-- shall submit by September 1.
1987, the final report and a schedule for implementation (assumine the NRC approves the DCROR by March 1. 1987).
L Ceco
4 1
0.
The facility requires an exemption from the reouirements of Appendix J to 10 CFR Part 50, Paragraph !!!.D.2(b1(ii) of the testing of contain-ment air locks at times when containment integrity is not required 4
(SER Section 6.2.6).
This exemption is authorized by law, will.not present an undue risk to the pubite health and safety, and is consistent with the comon defense and security. This exemption is hereby granted. The special circumstances regarding the exemption are identified in the referenced section of the safety evaluation report and the supplements thereto.
This exemption is granted pursuant to 10 CFR 50.12 (51 FR 37096 dated j
October 17,1986). With this exemption, the facility will operate, to the extent authorized herein, in confomity with the application, as amended, the provisions of the Act, and the rules and regulations of the Comission, c. pce%5cc3 An exemption was previously granted pur uant to 0 CFR 70.24 The i
exemption was granted with NRC mater <
s license No. $NM.1916, issued l
March 4,1985, and relieved the Eket;;;. from th requirrment of havino a criticality alam system. Therefore, the Je* exempted from the criticality alarm system provision of 10 CFR 70.24 so far as this section applies to the storage of fuel assemblies held under this
[
license.
CECe E.
De it s ;:: shall implement and maintain in effect all provisions i
of the approved fire protection program as described in the l
C E(..
H :; ;;;'; Fire Protection Report through Amendment 8 and the C EC. 11;;r.;;;'s letters dated Septester 23, 1986, October 23, 1986, November 3, 1986, December 12 and 15, 1986, and January 21, 1987, and as approved in the SER dated February 1982 through Supplement l
No. 8 sub,iect to the following provision:
CEC.
Oe l h.e,,;.e may make changes to the approved fire protection i
program without prior approval of the Commission only if those changes would not adversely affect the ability to achieve and i
maintain safe shutdown in the event of a fire.
co-I kensee.s F.
The Meeneee shall fully implement and maintain in effect all provisions of the physical security, guard training and qualification.
and safeguards contingency plans previously approved by the Comission and all amendments and revisions to such plans made pursuant to the authority of 10 CFR 50.90 and 10 CFR 50.54(p). The plans, which I
i contain Safeguards Information protected under 10 CFR 73.21, are entitled:
"Comonwealth Edison Company Byron Nuclear Power Station i
Physical Security Plan, Security Personnel Training and Qualification Plan, and Safeguards Contingency Plan"* with revisions submitted through December 9, 1986.
l l
1
co-licensees G.
Except as otherwise provided in the Technical Specifications or Environmental Protection Plan, the f:::::: shall report any violations of the requirments contained in Section 2.C of this license in the following manner:
initial notification shall be made within 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> to the NRC Operations Center via the Emergency Notification System with written followup within thirty days in accordance with the procedures described in 10 CFR 50.73(b), (ci, and (e).
to-licensee 3 H.
The lic::::: shall have and maintain financial protection of such type and in such amounts as the Connission shall require in accordance with Section 170 of the Atomic Energy Act of 1954, as amended, to cover public liability claims.
I.
This license is effective as of the date of issuance and shall expire at midnight on November 6, 2026.
FOR THE NUCLEAR REGtlLATORY COMMISSION Richard H. Vollmer, Deputy Director Office of Nuclear Reactor Regulation Attachments:
- 1. Work Items to be completed 4
- 2. Revision to Appendix A -
Technical Specifications (NUREG-1113)
Date of Issuance: January 30, 1987
'The Security Fersonnel Training and Oualification Plan and the Safeguards Contingency Plan are Appendices to the Security Plan.
=
ATTACHMENT 1 TO BYRON STATION UNIT 2 OPERATIN3 LICENSE NPF-66 This attachment identifies specific items which must be completed to the Commission's satisfaction in accordance with the operational modes as identified below:
A.
The preoperational tests and testing deficiencies in Attachments A and B, respectively, of the November 3,1986 letter from K. A. Ainger to H. R. Denton, as modified by the January 14, 1987 letter from K. A. Ainger to H. R. Denton, shall be completed in accordance with the schedule commitments contained in those attachments.
B.
Until testing of the Unit 2 Auxiliary Building ventilation system is C.ECo complete, including post test review and approval by PED, th; i keusse shall not operate Byron Unit 2 at power levels exceeding 30%, unless the Auxiliary Building ECCS leakage can be shown to be below the corresponding limit presented in Figure 1 of the October 24, 1986 letter S. C. Hunsader to H. R. Denton. Leak rate determination shall be in accordance with the October 30, 1986, letter S. C. Hunsader to H. R. Denton, and performed three times:
1.
Prior to exceeding 30% power, j
2.
During the first two weeks of April 1987, and 3.
During the first two weeks of July 1987.
4 Should Unit 2 be in an outage condition during the periods specified in paragraphs B.2, 8.3 above, the leakage rate determinations shall be performed within the first two weeks after returning to power.
CECO the value for the corresponding power level, th; li;:::../shall, within In the event that total leakage during any of these tests s GREATER than 1 hour1.157407e-5 days <br />2.777778e-4 hours <br />1.653439e-6 weeks <br />3.805e-7 months <br />, initiate ACTION to reduce the leakage to an acceptable value or reduce power in accordance with Figure 1 within the next 6 hours6.944444e-5 days <br />0.00167 hours <br />9.920635e-6 weeks <br />2.283e-6 months <br />.
Ceco C.
Prior to exceeding 5% power, th; li;;n;;; shall seal all construction design penetration openings in designated fire barriers. Completion of nine(9)sealsmaybeaccomplishedasrequestedintheS.C.Hunsader to J. G. Keppler letter dated January 13, 1987, and in addition, penetrations may be left ' unsealed to facilitate a requirement of a plant modification or plant maintenance requirement; however, the 11 :::::
shall provide compensatory measures.
CECe e
-,,~,
. -..=
~
ADMINISTRATIVE CONTROLS
~
T 6.1 RESPONSIBILITY
)9e. of CormonwelW Ed 56n e
j suh.n moneser t
i 6.1.1 The ' ;
' t- ': ^, Byron Station,Asha11 be responsible for overall unit operation and shall delegate in writing the succession to this responsibility during his absence.
an e.go e. c4 Ceanweal A 5disen' Cosmmonwte% Ed;3%
O 6.1.2__ The Shift Engineera(or during his absence from the control room, a designatedlindividual) shall be responsible for the control room command i
function.
A management directive to this effect, signed by the "'"' '- Vice President and General Manager-Nuclear Stations shalt be reissued to all j
station personnel on an annual basis.
433;3 ton +
- 6. 2 ORGANIZATION
'of ConwnenweaHb Edisaw I
0FFSITE Ccewmcmwe.A Edim 6.2.1 The'offsite organization for unit management and technical support shall l
be as shown in Figure 6.2-1.
UNIT STAFF j
t 6.2.2 The unit organization shall be as shown in Figure 6.2-2 and:
a.
Each on duty shift shall be composed of at least the minimum shift crew composition shown in Table 6.2-1; and b.
At least one licensed Operator shall be in the control room when fuel is in the reactor.
In addition, while the unit is in MODE 1, i
2, 3, or 4, at least one licensed Senior Operator shall be in the i
control room; c.
A Radiation Chemistry Technician,* qualified in radiation protection procedures, shall be on site when fuel is in the reactor; Il d.
Att, CORE ALTERATIONS shall be observed and directly supervised by either a licensed Senior operator or licensed Senior Operator Limited to Fuel Handling who has no other concurrent responsibilities during i
this operation; A site Fire Brigade of at least five members
- shall be maintained e.
onsite at all times. The Fire Brigade shall not include the Shift i
i Engineer, and the two other members of the minimum shift crew l
necessary for safe shutdown of the unit and 'any personnel required for other essential functions during a fire emergency; and i
i
- The Radiation Chemistry Technician and Fire Brigade composition may be less than the minir.um requirements for a period of time not to exceed 2 hours2.314815e-5 days <br />5.555556e-4 hours <br />3.306878e-6 weeks <br />7.61e-7 months <br /> in order to accommodate unexpected absence provided immediate action is taken to l
i fill the required positions.
- Commanue=Hh Ed son has ov"all responce Wy for Un;4-oPer% achn3 as 03ent of Cen+rel Illinea Och Cienerahnj C"*Pey for operahm of Unit-2..
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UNIT-1 & UNIT-2 l
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ATTACHMENT 1 The following general information is provided in support of the application for license amendment.
I.
Subsidiary A.
Name:. Central Illinois Electric Generating Company B.
Address:
P.O. Box ~167 Chicago, IL 60690 C.
-Business
Purpose:
-The Subsidiary will be a corporation established to hold title to the Facility and, through Commonwealth Edison Company as agent, operate the Facility for the purpose of selling the electricity generated thereby in accordance with rates approved by the Federal Energy Regulatory Commission.
D.
Organization and Management: The subsidiary has not yet been created. It will be created sometime in the future after favorable consideration by the Illinois Commerce Commission. The subsidiary will be a corporation organized and existing under the laws of the State of Illinois.
Its principal office will'be located in Chicago.
Illinois. All of the stock of the corporation will be owned by Commonwealth Edison Company. All of the Subsidiary's directors and principal officers will be employees of Cc;mmonwealth Edison Company.
All will be citizens of the United States. They will be:
Name Subsidiary and Edison Position James J. O'Connor Chaiman and President
- Wallace B. Behnke, Jr.
Vice Chairman
- Bide L. Thomas Executive Vice President
- Raymond P. Bachert Vice President and Comptroller Harlan M. Dellsy Vice President and General Counsel James W. Johnson Vice President Thomas J. Maiman Vice President Robert J. Manning Vice President Donald A. Petkus Vice President Cordell Reed Vice President George P. Rifakes Vice President J. Patrick Sanders Vice President John J. Viera Vice President Ernest M. Roth Treasurer Klaus H. Wisiol Secretrary
- Also will be members of the Board of Directors of Central Illinois Electric Generating Company
e It is not contemplated that the subsidiary will have any other employees with the possible exception of a few administrative staff persons. As explained below, all personnel and other resources needed to operate, maintain and decommission the Facility safely will be provided by Commonwealth Edison Company.
II.
Facility Under the Facilities Transfer agreement, title to the Facility alone will be conveyed to the subsidiary. There will be'no change in the ownership of the real property underlying the Facility. Commonwealth Edison Company will retain title to that property; however, the Subsidiary will be granted an easement in the Byron Station site to permit the operation, maintenance and decommissioning of the Facility. Commonwealth Edison Company will continue to maintain control over the site exclusion area as described in Section 2.1 of the Safety Evaluation Report, dated February, 1982, which was issued by the WRC for Byron Station.
Title to several structures, equipment and systems that serve both units during operation, so-called " common facilities," will be retained by Commonwealth Edison Company. No change in the Technical Specifications which govern the availability of these common facilities for each unit is contemplated. These common facilities are shown to the extent feasible in yellow on Exhibit G.
The Facility is depicted in red thereon, and consists of the following structures and equipment:
a.
Reactor Containment b.
Reactor Vessel c.
Reactor internals including control rod drive mechanisms, instrumentation and detectors, pressurizer and steam generators including separator and dryer.
d.
Cranes and Hoists used solely in connection with operation of the Unit e.
Main a..d Misc. Instrument and Control Panels f.
Piping, including valves and supports used solely in connection with operation of the Unit g.
Circulating Water Pumps used solely in connection with operation of the Unit h.
Turbine (including foundation) 1.
Generator (including foundation)
e
- a
- j. Condenser k.
345 KV Main Power Disconnect Switch (1/2 interest) 1.
Natural Draft Cooling Tower III. Technical Oualifications The NRC has determined under the operating license that commonwealta Edison Company is qualified to operate the Facility. These circumstances will not change as a result of the proposed license amendment. The Subsidiary has appointed Commonwealth Edison as its agent responsible for the operation, maintenance and decommissioning of the Facility. This relationship is established under paragraphs 4 and 13 of the Construction and operating Agreement (Exhibit D).
Paragraph 13 also states that the Subsidiary shall have no right to " assign, convey, pledge or otherwise transfer any of its rights" without the written consent of Commonwealth Edison Company. Moreover, as sole owner of the sbaram of the Subsidiarv. Edison will control all decision making to assure that the Facility's nuclear operations organization, which was found technically qualitlec cy the nxc in its satety Evaluation Report (SER, dated February, 1982),.will remain in place. Finally, the NRC will have regulatory control over the Subsidiary as a co-I'icensee of the Facility as well as Edison thereby subjecting any change in the operating entity of the Facility to the NRC's approval.
IV.
Financial Oualifications Commonwealth Edison Company is responsible financially for the operation, maintenance, and decommissioning of the Facility under the proposed amendment and as set forth in Article II of the Financing Agreement as that term is used in the NRC's regulations (Exhibit E).
In accordance with its obligations under those regulations, Commonwealth Edison Company commits to provide the necessary financial resource to operate, maintain and decommission the Facility safely.
Commonwealth Edison Company is an electric utility as defined in 10 CFR Section 50.2, and pursuant to 10 CFR Section 50.33(f) and 57.57(a)(4) no finding of financial responsibility to operate the Facility was required when the operating license was issued. None is required of the Subsidiary since (i) Commonwealth Edison is assuming full responsibility for the Facility, and (ii) the Subsidiary also qualifies as an electric utility under 10 CFR Section 50.2 because as the owner of the Facility its legal status properly qualifies it as a generator and seller of electricity through rates established by a separate regulatory authority.
l l
3 ATTACHMENT 2 Antitrust Review O
Commonwealth Edison Company submitted the requisite information under 10 CFR Section 50.33a and Appendix L to Part 50 in connection with the operating license antitrust te/iew for Byron Unit 2.
The information was reviewed by the Attorney General and comments were solicited from the public.
On September 18, 1986 the NRC's Director of the Office of Nuclear Reactor Regulation made findings, in accordance with Section 105(c)(2) of the Atomic Energy Act of 1954, as amended, that no significant changes had occurred since the construction permit reviews by the Attorney General and the NRC for Byron Unit 2 which would require a second antitrust review in connection with the OL application.
(See 51 Fed. Reg. 34171 (September 25, 1986)).
The following discussion will demonstrate that neither the Agreement which occasions this Amendment application nor its implementation constitute i
changed circumstances which raise any significant issues under the antitrust laws or which require a further antitrust review.
For a period of five to eight years after the effective date of the Agreement, Edison (and through it. Edison's customers) will be entitled to all of the power generated by the Units. That is no different from the situation without the Agreement. At all times, both with and without the Agreement, the price of power generated by the Units, and thus as an economic matter, what is paid for entitlement to the power, is subject to regulatory control. The Illinois commerce Conunission controls the price of power sold to Edison's retail customers and the FERC controls the price of power sold to other utilities (including municipal systems).
What may be different under the Agreement is that after the initial period (the duration of which, 5 to 8 years, is to be determined by the Illinois Commerce Commission) is the identity of the utility entitled to the power and, more importantly, what is to be paid for that entitlement. Under Edison's ownership, the situation without the Agreement, the amount paid for entitlement to the power is determined'by traditional rate base / rate of return regulation. Such regulation serves to place both a cap and a floor on the amounts (rates) paid for the electricity generated. However, with the subsidiary's ownership of the Units under the Agreement, the amounts paid for entitlement to the power may be lower than with Edison's ownership. The Subsidiary, unlike Edison, hss no service territory and thus, has no assured market for the power. This means that the Subsidiary may be unable to sell-the power at prices equivalent to those permitted by regulation. In that circumstance, the power will be sold at rates determined by competitive market forces. This circumstance is dependent on the options which are exercised by Edison at the end of the initial 5-year term of the Power Supply Agreement, as l
directed by the Illinois Commerce Commission. This arrangement between Edison, the Subsidiary and the Illinois commerce Consnission is, if anything, pro-competitive.
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I ATTA00ENT 3 Analysis of No Significant Hazards Consideration The application to amend the operating license to add the Subsidiary as a co-licensee of the Facility involves no significant hazards consideration as demonstrated herein.
The tests for determining whether a proposed amendment involves no significant hazards consideration are set forth in 30 CFR Section 50.92(c).
The proposed amendment involves no change in the Facillty, the manner in which the Facility is operated, or in the personnel who operate it.
The proposed change will involve no alterations to the facility itself and no modifications to plant procedures. Therefore, the proposed amendment involves no increase in the probability or consequences _of._an accvdung pseviously evaluated. Nor voes u create the possibility of a new or different kind of accident from any accident previously evaluated or involve any reduction in a margin of safety.
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UNITED STATES OF AMERICA
\\
NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of:
)
)
COMMONWEALTH EDISON COMPANY
)
Docket Nos. 50-456
)
and 50-457 (Braidwood Nuclear Station,
)
Units 1 and 2)
)
AFFIDAVIT OF DOUGLASS W. CASSEL, JR.
I, Douglass W. Cassel, Jr., being first duly sworn, hereby depose and say as follows:
1.
I am one of the attorneys for Intervenors Rorem, et al.,
in the above-entitled proceeding.
2.
I am the author of the April 29, 1987, letter to Mr.
Murley, filed herewith as Exhibit B to Intervenors' Motion To Admit Late-Filed Contention on Financial Qualifications.
3.
The NRC rule barring consideration of the financial qualifications of electric utilities, embodied in 10 CFR 50.33(f), 50.40(b) and 50.57(a)(4), should not be applied to the financial qualifications of Commonwealth Edison Company and its proposed subsidiary to operate Braidwood units 1 and 2, because of Edison's proposed new ownership and financing arrangements for Braidwood, for the reasons set forth in the aforementioned letter of April 29, 1987, which are true and correct to the best of my knowledge and belief.
L%L/nd/
Dougla~
W.
Cassel, Jr!
1987:
Signed and sworn to before me this
- dyofpay, M
,Ilht4f Notary P blic g
My Commission Expires: June 17, 1987