ML20247P046

Consents to Proposed Restructuring of Util.Proposed Action Will Not Affect Qualifications of Util as co-owner & Operator of Plants Consistent W/Applicable Provisions of Law,Regulations & Other Requirements Issued by Commission

ML20247P046
Person / Time
Site:	Beaver Valley, Perry, Harris, 05000000
Issue date:	03/16/1989
From:	Stolz J Office of Nuclear Reactor Regulation
To:	Hickel G DUQUESNE LIGHT CO.
References
TAC-71993, TAC-71994, NUDOCS 8904060386
Download: ML20247P046 (4)

Text

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k.g UNITED STATES j

'.'5[ :j NUCLEAR REGULATORY COMMISSION WASHINGTON, D. C. 20655 j

..... March 16, 1989 l

Docket Nos. 50-334 50-412 50-440 Mr. Gerard F. Hickel Chief. Counsel Commercial and Human Resources.

.Duquesne Light Company One Oxford Centre

,301, Grant Street Pittsburgh, PA 15279

Dear Mr. Hickel:

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SUBJECT:

CONSENT UNDER 10 CFR 50.80 TO CORPORATE REORGANIZATION OF DUQUESNE LIGHTCOMPANY(TACNOS.71993AND71994)

Your letter of February 6,1989 informed us that Duquesne Light Company (Duquesne), a co-owner and operator of the Beaver Valley Power Station, and a co-owner of the Perry Nuclear Power Plant, was in the process of implementing a corporate restructuring that would result in the creation of a holding company DQE,Inc. Your letter also provided us a copy of that portion of Duquesne's preliminary proxy material relating to the restructuring which was filed with the Securities and Exchange Commission on January 24, 1989.

Under the proposal. Duquesne will become a wholly-owned utility subsidiary of DQE, Inc., with each Duquesne common stockholder exchanging shares in Duquesne for a like number of the holding company common shares. Concurrently,DQE, Inc., will become the sole owner of Duquesne comon stock. Following the a restructuring, Duquesne will remain a public utility providing the same utility service as it did prior to the restructuring. Non-utility activities will be carried out by other subsidiaries of the holding company. Utility and non-utility businesses will be more clearly separated than at present.

Duquesne will maintain its focus on the public utility business, including control of all-Duquesne's interests in and operation of the Beaver Valley Power i Station, and interests in the Perry Nuclear Power Plant.

You indicated in your proxy statement that the proposed restructuring "will l result in greater financial, managerial and organizational flexibility and will place [the] Company in a better position to adapt to the changing industry and to meet and take advantage of future challenges and opportunities." In addition, your letter states that there are no approvals required from the Pennsylvania Public Utility Comission relative to the restructuring.

l We have reviewed the information you provided in your letter of February 6, 1989 to ascertain that the proposed action:

(1) will not reduce the iands available to Duquesne to carry out activities under its deaver Valley and Perry operating licenses, 9904060386 PDR 090316 H ADOCK 05000334 )

PDC

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, Mr. Gerard F. Hickel (2) will not adversely affect the management of Duquesne's utility operations, and (3) will not result in Duquesne becoming owned, controlled or dominated by an alien, a foreign corporation or a foreign government.

Based on our review of the infomation provided in yrur letter, we have made 4 the following determination: l Concerning Item (1):

Since Duquesne will remain suMact to the jurisdiction of the Pennsylvania Public Utility Commission witt. < sspect to, among other things, its retail sales, we agree that there will be no change in Duquesne's source of funds for operating its utility facilities including operating costs and eventual '

decommissioning costs of the Beaver Valley Power E.ation and Perry Nuclear Power Plant. That source is the utility revenues derived from the rates charged to its ratepayers. ,

Utility capital costs (including Duquesne's share of any capital improvements or additions to the nuclear units) would continue to be financed through a combination of internally generated funds (derived from customer revenues) and security issues. Long-term debt securities and any preferred stock would be issued by Duquesne as at present.

The NRC's explanation of its financial qualifications rule (49 Federal Register 35747, September 12,1984), is relevant to this case. NRC stated that the rate regulatory process conducted by State public utility commissions (such as the Pennsylvania PUC in this case) and FERC provides reasonable assurance that utilities can obtain the funds to operate nuclear plants safely. As discussed above, the rate regulatory process as it relates to Duquesne and the funding of its operating costs will not be disturbed by the proposed holding company a rrangement. In conclusion, there will be no adverse change (as a result of the proposed restructuring) in Duquesne's sources of funds for nuclear plant operating, decommissioning and capital costs.

Concerning Item (2):

Only Duquesne is authorized to operate the Beaver Valley Power Station. The proposed restructuring will have no effect on the management of Duquesne; the Vice President, Nuclear Group, will retain responsibility for nuclear operations and will have no assigned DQE, Inc. responsibilities. DQE,Inc.

officer responsibilities will be administrative and financial in nature and will have no direct effect on the management of nuclear operations. No reporting channels within Duquesne will be affected by the restructuring.

Therefore, because DQE, Inc. plays no direct role in the management of Beaver Valley Power Station, we conclude that the restructuring will not affect the management of the Beaver Valley Power Station.

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. Mr. Gerard F. h Nkel Beaver Valley Power Station Duquesne Light Company Units 1 & 2 cc:

Jay E. Silberg, Esquire Bureau of Radiation Protection '

Shaw, Pittman, Potts and Trowbridge Pennsylvania Department of 2300 N Street, N.W. Environmental Resources Washington, DC 20037 ATTN: R. Janati Post Office Box 2063 Kenny Grada, Manager Harrisburg, Pennsylvania 171?O Nuclear Safety Duquesne Light Company Mayor of the Borrough of P. O. Box 4 Shippingport Shippingport Pennsylvania 15077 Post Office Box 3 Shippingport, Pennsylvania 15077 Mr. J. D. Sieber,Vice President Ashley C. Schannauer  !

Nuclear Operations Assistant City Solicitor Duquesne Light Company City of Pittsburgh Post Office Box 4 313 City-County Building Shippingport, PA 15077 Pittsburgh, Pennsylvania 15219 John A. Lee, Esquire Regional Adtninistrator, Region I Duquesne Light Company U.S. Nuclear Regulatory Commission One Oxford Centre 475 Allendale Road 301 Grant Street King of Prussia, Pennsylvania 19406 Pittsburgh, Pennsylvania 15279 W.F. Carmichael, Commissioner Resident inspector Department of Labor U.S. Nuclear Regulatory Commission 1800 Washington Street East Post Office Box 181 Charleston, West Virginia 25305 Shipp?ngport, Pennsylvania 15077 John D. Borrows Director, Pennsylvania Fmergency Director, Utilities Department Management Agency Public Utilities Commission Post Office Box 3321 ,

, 180 East Broad Street Harrisburg, Pennsylvania 17105-3321  !

Columbus, Ohio 43266-0573 J. D. Sieber, Vice-President Nuclear Group i Duquesne Light Company Post Office Box 4 Shippingport, Pennsylvania 15077 l

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Mr. Gerard F. Hickel - 3.-

Concerning Item (3):

Based upon current information, shares of Duquesne's common stock held in foreign accounts represent 0.0006% of the total outstanding shares. Upon  !

completion of restructuring, share holders that held Duquesne mnmon stocks j will end up with the same number of DQE, Inc. common stocks. The restructuring l' itself will not result in increased or decreased percentage of ownership of DQE, Inc. by foreign accounts. Therefore, the proposed restructuring will not result in Duquesne's becoming owned, controlled or dominated by foreign interests.

Based on the above determinations, we conclude pursuant to 10 CFR 5G.80 that:

(1) the proposed action will not affect the qualifications of the Duquesne Light Company as a co-owner and operator of Beaver Valley Power Station, (2) the proposed action will not affect the qualifications of the Duquesne Light Company as a co -owner of Perry Nuclear Power Plant, and l

(3) the proposed action is otherwise consistent with applicable provisions of law, regulations, and other requirements issued by the Commission pursuant thereto.

Accordingly, the Commission hereby consents to the proposed restructuring of Duquesne Light Company.

Sincerely, vi 4 lo John F. Stolz; Director Project Directorate I-4 Division of Reactor Projects I/II Office of Nuclear Reactor Regulation cc: See next page DISTRIBUTION

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• See previous concurrence sheet 3