ML20235A829
| ML20235A829 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 01/05/1988 |
| From: | Backus R BACKUS, MEYER & SOLOMON, HAMPTON, NH, SEACOAST ANTI-POLLUTION LEAGUE |
| To: | NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP) |
| References | |
| CON-#188-5302 OL, NUDOCS 8801130062 | |
| Download: ML20235A829 (10) | |
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,{f UNITED STATES OF AMERICA NUCELAR REGULATORY COMMISSION E
before the c*(>
ATOMIC SAFETY AND LICENSING APPEAL BOARD OFFIC:. a-
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00CKE7 4.: s BRANC" In the Matter of
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Docket Nos.
50-443 OL __j PUBLIC SERVICE COMPANY
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50-444 OL OF NEW HAMPSHIRE, et al
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(On-site Safety and Technical (Seabrook Station, Units 1
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Issues) and 2)
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MOTION TO ENLARGE RECORD ON APPEAL ON DECISION OF ATOMIC SAFETY AND LICENSING APPEAL BOARD NOT TO WAIVE REGULATIONS EXCUSING A FINANCIAL QUALIFICATION REVIEW FOR PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE NOW COMES, the Town of Hampton, Seacoast Anti-Pollution League, the New England Coalition on Nuclear Pollution, and move that the Appeal Board receive into the record on this appeal the enclosed documents:
1.
Public Service Company of New Bampshire Form 8-K, dated December 16,1987 and 2.
Excerpt from transcripts in the Matter of Seabrook Management Meeting Regarding Utility Emergency Plans, December 22, 1987.
In support of this Motion, the appellants say these documents should be considered in connection with this Appeal since:
8801130062 880105 A
PDR ADOCK 05000443
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They are unquestionably authentic, B.
They are stateraents made by the Applicants themselves concerning the financial condition of Public Service Company of New Hampshire, and C.
They bear directly on the issue of whether or not a prima facie case for a waiver of 10 CFR 50.33(f) and
- 50. 57 ( a) ( 4) has been established DISCUSSION These Appellants, in filing their Petition to Waive the Commission's regulations which do not ordinarily require a financial qualification review for certain applicants, namely regulated utilities, for operating licenses, relied on a July 22, 1987 Form 8-K filed on behalf of PSNH.
That document revealed that the lead Seabrook owner, PSNH, would find it " difficult, if not impossible, for the Company to avoid proceedings under the Bankruptcy Code."
a.
The New 8-K The new form 8-K, dated December 16, 1987 and attached hereto, reveals that PSNH has indeed not been able to complete a plan to avoid bankruptcy, but states that PSNH "is in the process of formulating a revised plan for the restructuring of the Company."
(Sheet 1) 4 It then discusses certain rate and exchange elements that may be included in a new restructuring plan, and states " Any such
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. arrangement would result in a substantial dilution of the interest of the existing Common Stockholders."
(Sheet 2) _1/
The 8-K concludes its discussion of the development of the plan by stating:
"It is not possible to predict whether a plan reasonably acceptable to the Company and the holders of its various classes of securities can be completed on a timely basis, or whether any restructuring of the company's capitalization can be accomplished outside of Chapter 11 of the Bankruptcy Code."
b.
The Transcript The December 22 NRC Meeting transcript reveals that, according to Mr. John Eichorn, Chairman of the Joint Owners of the Seabrook Nuclear Project, any new PSNH plan in fact probably will result in a bankruptcy. See attached pages 5 through 9 of the transcript.
Mr. Eichorn states:
"More important than that though, is probably, in order l'/
The 8-K further states that "The requested [15%) energency rate increase is essential, to such a restructuring plan or any other reasonable restructuring plan."
As of this date, no such emergency rate increase has been allowed, and whether such an increase can be granted depends on a pending decision of the New Hampshire Supreme Court which must either overturn the 1979 New Hampshire legislation known as the Anti-CWIP Law, or interpret that law in such a way as not to apply to so-called " emergency rates."
C to make sure that such an accommodation that is arrived at
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probably with the majority of debtors [ sic] but not all, in order to make sure that that is put in place, they will have to go through some sort of court action, probably under a Chapter 11 proceeding."
CONCLUSION These two documents containing statements on behalf of the Seabrook Applicants demonstrate that a PSNH bankruptcy is probable, even in the event that a restructuring plan is formulated, and even if the requested 15% emergency rate increase is held to be consistent with New Hampshire law, and subsequently allowed by the New Hampshire Public Utilities Commission.
It was precisely the assumed unlikelihood of a regulated utility applicant, such as PSNH, ever facing such a situation that led the Commission in the first place to eliminate the need for a financial qualification review for these entities in amending its financial qualification requirements in 1984.
Respectfully submitted, Town of Hampton and the Seacoast Anti-Pollution League By their Attorneys j
2 BACKUS, MEYER & SOLOMON Dated: January 5, 1988
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R,0be ff'A.' '8acku s 116 Lowell Street Manchester, NH 03105 i
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CERTIFICATE OF SERVICE I hereby certify that a copy of the above and foregoing
" Motion To Enlarge Record On Appeal On Decision Of Atomic Safety and Licensing Appeal Board Not To Waive Regulations Excusing A Financial Qualification Review For Public Service Company of New Hampshire" was sent this date, first class mail, postage prepaid, to the names on the attached service list.
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zw Robert A. Backus
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CERTIFICATE OF SERVICE AND SERVICE LIST (ATOMIC SAFEIY & LICENSING APPEAL BOARD) l Alan Rosenthal, Chairman *
,Sheldon J. Wolfe, Chrm.*
William S. Lord Atcrnic Safety & Lic. Appeal Brd. Admn Judge AtcInic Safety & Lic. Brd.
Board of Selectmen U.S. Nuclear Regulatory Ccmn; U.S. Nuclear Regulatory Ccmn.
lTownHall-FriendStreet Washincjton, D.C.
20555 W ashington, D.C. 20555 Anesbury, MA 01913 e
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Dr. Jerry Harbour
- Sandra Gavutis Atcznic Safety & Lic. Appeal Brd. Admin. Judge Town of Kensington U.S. Nuclear Regulatory Ccmn.
Atomic Safety & Lic. Erd.
Tcan Hall Washington, D.C. 20555 U.S. Nuclear Regulatory Ccan.
Kensington, NH 03833 Washington, D.C.
20555 Dr. Ermeth A. Luebke*
Mr. Robert Harrison Sherwin Turk, Esq.
Admin. Judge Pres.'& Chief Exec. Officer
' ffice of Exec. Legal Dir.
5500 Friendship Blvd.
Public Service Company of NH U.S. Nuclear Regulatory Ccan.
Apt 1923 N P.O. Eox 330 Nashington,D.C. 20555 Cheyy Chape, FD. 20815 Pgpchegterf NH 03105 M yLard Young, Chairman Phillip Ahrens, Esc.
Board of Selectren As'st. Atty. Gen. -
10 Central Road State House, Station 6 Rye, NH 03780 August, ME 04333 as Carol Sneider, Esq.
'Lsst. Atty. Gen.
442 J.W. McCormack (PCCH) 2ne Ashburton Place Boston, MA 02210 19th Floor oston, )p\\ 02108 Roberta Pevearr Richard A. Hanpe, Esq.
few Hampshire Civil Defense Agcy State Rep.-Town of Hampton Fils.
Harpe & McNicholas Drinkwater Road 35 Pleasant St.
Hampton Falls, NH 03,894 Concord, NH. 03301 Thcmas Dignac, Esci.*
Office of Selectnen Ropes & Gray Tc7*n of Hampton Falls 225 Franklin Street Hampton Falls, NH 03844 Boston, MA 02110 Joseph Flynn, Asst. Gen.Cnsil. ( Docketing & Serv. Sec.*
O hice of d e Secre W Fed. Emerg. Mgmt. Agcy U.S. Nuclear Regulatory Ccrm1.
Washingt[$,SW 500 C St Washington, D.C. 20555 D.C.
20472 eacoas ti-Pollution League c
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25 Maplewood Ave.
Portsnouth, !al 03801 P.O. Box 360 Portsnyguth, Fd 03801_ _.
ge Bh, Esq.
Diane Curran, Esq.
Attorney General's Office Harmon Weiss State of New Hampshire 20001 S Street, S.W.
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c FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: December 16, 1987 PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE (Exact name of registrant as specified in its charter)
NEW HAMPSHIRE l-6392 02-0181050 (State, or other jurisdiction (Commission (IRS Employer of incorporation)
File Number)
Identification No.)
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03105 1000 ELH STREET, MANCHESTER, NEW HAMPSHIRE (Zip Code)
(Address of principal executive offices) 603-669-4000 Registrant's Telephone Number, Including Area Code
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Date of Report:
Current Report, Form B-K for December 16, 1987 Public Service Co'mpany of New Hampshire Gheet 1 of 3 Other Materially Important Events Item 5.
I Information Regarding Restructuring Planning Reference is made to the Company's Current Repori un Form dated October 15, 1987,
" discussing various restructuring plans with principal debt holders and others" and that any such plans which would be developed "will be substantially different from the Exchange Offerregistra proposed by the Company in its September (18,1987]
statement."
[The Company is in the process of formulating a revised plan for
'f the restructuring of. the Company.
The goal of such a
restructuring plan is to create a new capital structure that can It is assumed
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be serviced from the Company's estimated cash flow.
Refunding /
General a l
Company's First Mortgage Bonds, e Bonds and Third Hortgage Bonds would be paid on a current
, that the cash conservation measures relating to Mor basis and that the expenditures discussed in the Company's
/5 4 roper ional and capital
[ Quarterly Report on Form 10-0 for the Quarter Ended Septemb 1987 would continue.
The implementation of such a plan Y
contemplates the Company receiving the 15% eme
%y/ e h emergency rate increase was filed by the Company in With 1987 and is pending) described in such Form 10-0.
04 for. such urther regard to the Company's estimated cash flow, the plan q
- ugust, to the granting of the afore-hat, subsequent h
he Company would freeze rates for gee 6fgLt_ioned increase,f ter there. would be no furtner lncreases,
_ gay but only annual adjustments tied to changes in the cost of living.
U nEi years, and that "Tt is anticipated that the currently effective Ene rg'/ Cost Recovery Hechanism would continue to be applied.
A potential for the Company based upon its e'arnings, ienterprise'value
- increase, including earnings resulting from the emergency rate would form a basis for the relative participation by the unsecured
)debbandequityholdersintherestructuringoftheCompany, f The Company anticipates that under any such plan its obligation and other unsecured with respect to its outstanding debentures debt securities would be satisfied by the issuance of new Common Stock y as to provide the holders of such debt yith a controlling i
f 7 wnership interest in tne t.umpey.
ine Company's Preferred j
Sto'ckholders would be provided new Common Stock and an opportunity, through warrants to be issued to such holders, to j
acquire an additional ownership interest upon the Company
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These warrants attaining a designated threshold enterprise value.wou exercise
i Current Report, Form 8-K for Date of Report:
i December 16, 1987 Public Service Company of New Hampshire Sheet 2 of 3 i
The price upon such threshold enterprise value being realized.
existing Common Stockholders would receive a lesser amount of the new Common Stock as well as warrants permitting them to acquire an additional ownership interest upon the Company attaining a J
desigaated thgr e_W at"r rqalue. Any such arrangement wculd j
a result in a Substantial dilutionjf the interests of the existing i
Common StockFoTders.
Y re' quested emergency rate increase is essential to such a revised restructuring plan or any other reasonable restructuring F4 imary objectives of any plan vill be to provide the
). plan.f
%tny a reduced and simplified capital structure and adequate j
cash flow to meet its needs,whether or not the Seabrook Plant goe{
into operation.
It reasonably acceptable to the Company and the holders of its
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various classes of securities can be completed on a timely basis, or whether any restructuring of the Company's capitalization can i
be accomplished outside of Chapter 11 of the Gankruptcy Code.
II Action Brought by Trustee For 17 1/2% Unsecured Debentures On December 10, 1987, the Company received from Hidlantic National i
Bank (Hidlantic), Trustee under the Company's Indenture dated October 15,
- 1984, pursuant to which the Company's 17 1/2%
Unsecured Debentures were issued, a notice declaring the full principal amount of said Oebentures to be immediately
$425,000,000 due and payable by reason of the Company's failure to make the 1987.
payment of interest due on said Debentures on October 15, 1987, Midlantic, as Trustee,' filed a lawsuit in On December 11, the United States District Court for the District of New Hampshire i'
seeking judgment for said principal and unpaid interest and an I
attachment of all the Company's property.
These actions by Midlantic were apparently taken unilaterally without prior with major holders of the 17 1/2% Debentures.
consultation Certain of the Debentureholders have strenuously disagreed with this action of Midlantic.
The Company intends to take all appropriate steps to oppose vigorously the foregoing actions of i
Hidlantic, While the actions of Midlantic are, in the Company's view, not in the best interests of the Debentureholders and will unquestionably make it more difficult for the Company to arrange a restructuring plan to the best advantage of all its securities holders, the Company will continue to work toward the formulation of a revised restructuring plan.
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Oste of Report:
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Current Report, Form B-K for December 16, 1987
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Fublic Service Company of New Hampshire Sheet 3 of 3 i
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III Action by Holders of Warrants to Purchase Shares of Common Stock On December 4, 1987, Spear Leeds & Kellogg, purporting to be the holder of certain warrants to purchase shares of the Company's Common Stock and certain of the Company's 171/2% Debentures due j
2004, instituted an action in the United States District Court for the Southern District of New York against the Company and certain officers and current Directors of the Company.
This litigation
- alleges, among other things, that the Company breeched its contract with the plaintiffs such that the plaintiffs were prevented from exercising such warrants using Debentures to pay the exercise price and that the defendants defrauded the palintiffs by failing to disclose material facts with respect to such matters in violation of certain securities laws and the common law and seeks damages from the defencants for such ections.
The Company intends to defend vigorously such litigation.
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
I PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE December 16. 1987 By s/ D. Pierre G. Cameron, Jr.
D. Pierre G. Cameron, Jr.
(Dated)
Vice President and General Counsel
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'UN1'ItD STATES NUCLEAR REGIR.ATORY COMMISSION
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In the Matter of:
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DOCKET NO:
50-443
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SEABROOK MANAGEMENT MEETING
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REGARDING UTILITY EMERGENCY
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PLANS
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LOCATION:
Bethesda, Maryland PAGES:
1 through 40 i
DATE:
December 22, 1987
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Heritage Reporting Corporation O(Ocial Reponen 1220 L Street. N.W.
Wunmgton. D.C. 20005 I
(202) 628-4884
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MR. MURLEY:
Mine were aimed at specifically some of 2
the items on the agenda of the meeting.
Why don't I briefly 3
mention those, and then I understand you might have some 4
opening, too.
The utility plan for Massachusetts was transmitted to 5
6 FEMA on November 27th.
The NRC and FEMA are going to review that plan using the new criteria for reviewing utility plans 7
8 that have been published.
9 With regard to a schedule for the exercise, we are today prepared to define exactly what that schedule is, 10 not because NRC and FEMA need time for initial review to find out, 11 or to come to some judgment as to whether there are potentially 12 13 major problems with the plant.
Nonetheless, we expect we can revisit this schedule I
14 that is.
Meanwhile, 15 question within a couple months, with you, 16 we see no reason why the licensee could not and should not go 17 ahead with your training and planning for the scenario 18 preparation.
19 Those are my comments.
20 MR. NERSES:
Okay.
John Eichorn has some.
21 MR. EICHORN:
As I said earlier, my name is John 22 Eichorn. I am Chairman and Chief Executive Officer of Eastern 23 Utility Associates.
I also have the honor of serving as Chairman of the 24 25 Joint Owners of the Seabrook Nuclear Project.
Heritage Reporting Corporation (202) 628-4888
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With us also for the record is George Edwards, 1
1 Chairman and Chief Executive Officer of United Illuminating 2
3 Company, who serves as Vice Chairman of the Joint Owners l
4 Executive Committee.
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Bob Harrison of Public Service of New Hampshire, 5
6 President and Chief Executive Officer, was planning to be here, 7
but a last minute demand of his time and financial situation caused him to have to change his plans and be in New York.
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Other than that, he would have been here.
I think it would be helpful if I went over just 10 briefly, quickly, some of the major events which have 11 12 transpired since our last meeting September 16.
Of course, as on that day, we did tell you and obviously they were 13 we met submitted, we submitted the New Hampshire Yankee Plan, Utility 14 15 Plan for Massachusetts a few days afterwards.
I believe it was 16 the 21st.
17 Early in October, of course, the NRC issued a new 18 rule concerning utility plans and how they might be reviewed 19 when they are submitted in place of the state's plan.
20 Also during October, New Hampshire Yankee received a 1
21 favorable SALP report, to refresh your memory, in the ten 22 categories reviewed.
We had seven categories which were ones 23 and three categories which were twos.
And those will be worked 24 on to try to get them improved.
25 November 25th, the NRC did lift the stay, and the f
f Heritage Reporting Corporation (202) 628-4888 I
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1 Commission lifted the stay on the five percent license.
Also in November we had published in the Federal 2
3 Register the criteria that will be used, or proposed to be 4
used, in reviewing a utility plan submitted in place of a state 5
plan.
And I think all of us are aware that during this Fall 6
period we have also had the New Hampshire Yankee, or New 7
8 Hampshire hearings on the ASLB concerning the New Hampshire 9
Emergency Response Plan.
These hearings are in recess for the 10 holidays, but should be concluded early in January.
guess perhaps the major thing that has happened and 11 I
12 transpired since our last meeting though is the publicity and 13 the actual financial condition of the lead owner, Public 14 Service of New Hampshire.
15 I think it might be appropriate for me to say a few 16 words about that situation for your benefit.
17 There is no question that it is a serious situation, 18 but there is also no question that we believe that there will l
be an accommodation worked out with their major creditors for a 19 20 restructuring of the company which will permit them to go 21 forward in a very orderly manner.
22 As to whether or not it will encompass a Chapter 11 23 proceeding is yet to be determined.
24 But let me try to make a synopsis of what we think 25 will happen.
We believe that there will be a meeting of the Heritage Reporting Corporation (202) 628-4888
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' minds between public service management and its debtors which 2
will cause some sort of restructuring and will cause a writeoff 3-of certain of the investments _that they have made in Seabrook I
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4 already, which is an accommodation that they don't.wish to make
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rate-making purposes.
But nevertheless, I am sure it will be 7
made.
8 More important that that, though, is probably, in 9
order to make sure that such an accommodation that is arrived 10 at probably with the majority ~of debtors but not all, in order 11 to make sure that that is to be put in place, they will have to 12 go through some sort of court action, probably under a. Chapter-13 11 proceeding.
14 But I think it is important, that even as late as 1
15 yesterday, when Bob Harrison called me to tell me that he 16 couldn't attend today's meeting, that he reiterated that 17 everyone of their plans that'they had proposed or that the 18 debtors have proposed in the reorganization do accommodate the 19 necessary funds for going forward with Seabrook, because they 20 know that they need it and we know that New England needs it.
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21 And those are the important messages I would like to get across 22 to you.
23 So we'll be glad to try to answer any questions about 24 this, but I think that is a good summation of it.
25 As for the rest of the participants, we all believe i
Heritage Reporting Corporation (202) 628-4888
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that we are in relatively good shape for-continuing with the 2'
' project, although it is beginning to get strained.
3 With that I think it perhaps best that we go on with 4
your formal agenda.
5 MR. NERSES:
Bill, you had this iraroduction.
Did 6
you want to touch upon anything on the plant itself?
It is 7
submitted now and the only thing I know of that has to be taken 8
care of are a few things, _some revisions that are simple and.so 9
on that don't look like any major activity going on regarding 10 the plant.
Is that a correct assessment of the situatien?
11 MR. GRAM:
Yes.
12 MR. NERSES:
Other than that, what else is there to 13 say but to point out that we are going to begin the review and 14 we have a comment to say about the fact that the review will 15 probably take some months to do.
16 MR. MURLEY:
Some months.
Right.
17 MR. CONGEL:
Frank Congel.
We have FEMA here with us 18 today to discuss at least a tentative outline we have for a 19 review schedu]e.
20 At this point we are prepared to answer questions 21 that you may have of us in terms of both the review schedule 22 and the possible plans that you have for the exercise this 23 coming Spring.
24 MR. DERRICKSON:
Can I just take a moment to go back 25 down memory lane?
Heritage Reporting Corporation (202) 628-4888
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