ML20247Q801
| ML20247Q801 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 07/28/1989 |
| From: | Dignan T PUBLIC SERVICE CO. OF NEW HAMPSHIRE, ROPES & GRAY |
| To: | NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP) |
| References | |
| CON-#389-8975 OL, NUDOCS 8908070251 | |
| Download: ML20247Q801 (13) | |
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COCKIIED U si' July 28 1989
'89 JUL $1 P4 :01 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION before the ATOMIC SAFETY AND LICENSING APPEAL BOARD
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In the Matter of
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PUBLIC SERVICE COMPANY
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Docket Nos. 50-443-OL OF NEW HAMPSHIRE, gt al.
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50-444-OL
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(Seabrook Station, Units 1
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(Offsite Emergency and 2)
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Planning Issues)
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APPLICANTS' RESPONSE TO APPEAL BOARD INQUIRY On July 28, 1989, C;unsel for the Applicants was advised by the Secretary to the Appeal Board that the Appeal Board wished to be ady' sed of the terms of the offer by Northeast Utilities (NU) reported in the press for the purchase of the assets of Public Service Company of New Hampshire (PSNH),
including Seabrook.
In addition, it was requested that a description of the necessary judicial and regulatory approvals be provided.
Attached hereto and marked "A" is a release issued by NU describing the terms of the offer which is formally entitled
" Northeast Utilities Service Company's First Amended Plan of Reorganization" (the Plan) and was filed under a Notice of Filing under date of July 27, 1989, in the United States i
Bankruptcy court in the District of New Hampshire in Public f
ALABIrJOF.$B 890B070251 890728 g
PDR ADDCK 05000443 0
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Service Company of New Hampshire, Debtor, Chapter 11 Dkt. No.
88-00043.
Attached hereto and marked "B" are pages 11-12 of the Plan which set forth the regulatory approvals which NU believes to be necessary in connection with the Plan.
These are, of course, in addition to the'necessary approval of the Bankruptcy Court.
Finally, a request was made that we advise the Appeal Board as to the status of the offer before the bankruptcy court..We understand it to be " filed;" no further action has taken place as of this writing.
We are aware from press reports that one or more competing plans may be filed.
Respectfully submitted, FAJW/_ _.
Thonfas G.
DFgnan, Jr.
George H.
Lewald Kathryn A.
Selleck Jeffrey P. Trout Jay Bradford Smith Geoffrey C.
Cook William Parker Ropes & Gray One International Place Boston, MA 02110-2624 (617) 951-7000 counsel for Applicants
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100ItT9 EAST tmMTWE N iWS Reease
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P C. Box 270 Nortford, Connect: cut 06141 0270 CONTACTS:
Jeffrey R. Kotkin Emaanuel S. Forde offices (203) 665-3366 (203) 665-5186 Home:
(203) 563-6463 (203) 828-1071 NU REACHES AGREEMENT VITH STATE ON.*SNH BANKRUPTCY, SEABROOK l
CONCORD, New Hampshire, July 27, 1989--Northeast Utilities (NU) has reached an agreement in principle with the state of New Hampshire that resolves all of the rate-related issues associated with the bankruptcy of Public Service of New Hampshire
.(PSNH), Villiam B. Ellis, NU chairman and chief executive officer, said this afternoon.
"This is a tremendous step forward in resolving this 18-month bankruptcy," Ellis said.
"This agreement vill allow us to file immediately a revised plan of Ve are reorganization that we are confident both creditors and the court can accept.
nov moving quickly to try to obtain their concurrence."
The agreement projects that ths inflation-edjusted price of electricity vill remain approximately level in New Hampshire during each of the next seven years.
It also calls for NU to purchase all of PSNH's assets, including its 35.6 percent share of the 1,150-megavatt Seabrook plant.
Additionally, NU vould agree to assume responsibility for operating Seabrook once the PSNH acquisition is completed and after Seabrook obtains its full-pover operating l
license. NU's previous proposal to acquire FSNH did not include ovnership of PSNN's share of Seabrook nor the operation by NU of the Seabrook station.
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Ellis said the agreement complies with conditions established by state negotiators for a reasonable bankruptcy resolution. lie said it also vill benefit NU's existing Connecticut and Massachusetts customers, saving them money by creating a larger, more geographically diverse company.
But Ellis said it also vould shield NU's existing customars from additional costs associated with the PSNH acquisition.
In line with previous statements by New Hampshire officials, the new proposal calls for:
overall rate increases of 5.5 percent annually for the next seven years--or o
approximately equivalent to the expected level of inflation.
A plan for resolution of all bankruptcy issues, including PSNH's Seabrook share.
o o
Guarantees of adequate electric generating capacity and reasonable rates for New Hampshire customers, whether or not Seabrook operates.
A letter of intent concerning the agreement was signed today by New Hampshire Governor Judd Gregg, Attorney General John Arnold and Ellis.
Ellis saidt Since ve first announced our interest in PSNH 16 months ago, ve have said we vanted to be in New Hampshire only if the residents, businesses and leadership of New Hampshire vanted both us and the bankruptcy resolution ve propose. Ve're extremely pleased ve have reached an agreement with the state on a total resolution of all rate-related issues in this very complicated case. We believe this agreement paves the way for a rapid resolution c f the entire bankruptcy.
Ellis noted that while the letter of intent gives the state the option of supporting an alternative plan if deemed better, no other party has yet achieved a similar agreement.
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. r Based on this agreement, NU expects to file a revised plan with the U.S.
Bankruptcy Court in Manchester by Monday, July 31. The new plan vill be worth more than $1.85 billion to creditors.
It also vill include several revisions to the plan for reorganizing PSNH that NU initia21y filed with the court in March 1989, i
The principal changes from NU's previous proposal is that the new plan vill call for NU's purchase of PSNH's interest in Seabrook, NU's operation of the Seabrook project, lover overall rate increases in the first years following an acquisition and payment of a much higher ratio of cash, as opposed to other types of financial instruments, to creditors.
NU's initial plan called for PSNH's Seabrook ownership to be spun off to unsecured creditors with NU guaranteeing to purchase all of the power that share produced. But Ellis said the initial plan van stalled by creditor reluctance to retain any interest in Seabrook.
Ellis said NU nov believes that acquisition and operation of PSNH's Seabrook investment is critical to resolving the utility's 18-month bankruptcy.
If such a purchase vere consummated, NU vould increase its share of Seabrook from 4 percent to nearly 40 percent.
i "Our proposal to operate Seabrook stems from our proposed increased investment in the plant.
Because our stake vould be more than twice that of any other investor, ve understandably would prefer more operational control," Ellis said.
"We own 44 percent of Connecticut Yankee and 65 percent of Hillstone 3, both nuclear power plants, and operate both of them."
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Ellis noted that NU is one of the country's leading operators of nucleer plants, with experience risting to 1967.
NU runs four of New England's eight operating nuclear power plants, including Connecticut Yankee in Haddam Neck, Connecticut, and Hillstone 1, 2 and 3 in Vaterford, Connecticut. Ellis noted that Hillstone 3, which began commercial operation in April 1986, is physically very similar to Seabrook.
Ellis said that regardless of the bankruptcy schedule, NU vould not assume responsibility for operating Seabrook before the Nuclear Regulatory Commission grants 2he 1,150-megavatt plant a full-power license.
"Ve don't want to do anything that could unnecessarily extend the licensing process," Ellis said.
NU is New England's largest electric utility system, serving about 1.25 million customers across Connecticut and vestern Massachusetts.
PSNH serves about 365,000 customers in New Hampshire, covering about 75 percent of the state.
Ellis said NU is committed to acquiring PStE because the logical fit between the Evo companies vould benefit customers in all three states, as well as NU shareholders.
"Vith or without Seabrook, ve have the power Nov Hampshire needs for the 1990s at a known price. Ve also have a growing summer peak demand and access to markets to the vest and southvest of New England.
PSNH serves a greving area, borders on Canada and s8111 needs considerably more power in the vinter," Ellis said.
"The economies of combining the systems would be considerable."
Ellis estimated that the acquisition, which still vill require approval of many parties, including regulators, creditors and the Bankruptcy Court, could take a year or more to complete.
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NU Fact S1eet IEEEE=
He neevest os1410270 REVISED NU PLAN FOR ACQUIRING PUBLIC SERVICE OF NEW HAMPSHIRE (PSNH) value of NU proposal Total:
$1.9 billion.
Value computed based on:
i o
$1,325 million payment for F8NH non-Seabrook assets ($495 million premium over $830 million book value),
o
$575 million for seabrook share ($500 million for 35.6 percent interest in plant and $75 million for PSNH share of nuclear fuel).
Use of $1.9 billions o
$1,625 million cash to creditors.
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$125 million readily marketable preferred stock in new NU New Hampshire operating subsidiary to creditors.
o
$100 million in pollution control bonds assumed by NU.
$50 million to pay all other transaction costs, including o
certain PSNH post-bankruptcy commitments.
Structure of NU proposal o
NU obtains full ownership of PSNH.
o PSNH becomes an NU subsidiary (NU New Hampshire) and continues to own all PSNH assets except share of Seabrook.
NU creates new subsidiary to own PSNH share of Seabrook.
o That subsidiary sells Seabrook power to NU New Hampshire operating subsidiary based on contract to be approved by state and federal regulators.
NU assumes responsibility for New Hampshire Yankee's o
Seabrook operation when the PSNH acquisition is complete and after full-power license is received, acum7 u.or
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_2-overall Rate Increases original NU Plan Revised NU Plan 1989 3 percent 0
1990 6 percent 5.5 percent
- 1991 10 percent 5.5 percent
- 1992 31 percent 5.5 percent
- 1993 4 percent 5.5 percent
- 1994 4 percent 5.5 percent
- 1995 4 percent 5.5 percent
- 1996 1 percent 5.5 percent
- Recovery of creditors Original NU Plan Revised NU Plan First and General and rull 1004 Refunding ($450m)
Cash Third-Mortgage ($325m All but $50m 1004 principal; S115m
$100m assumed interest)
Balance cash Unsecured Creditors
$71m cash 904
$885m
$75m preferred
$673m cash 0165m Seabrook support
$125m preferred j
8eabrook ownership Preferred Equity ($470m)
No recovery
$110m cash **
Common Equity ($276m book No recovery
$55m cash **
value as of-3/31/88)
Percentage increase based on projected oil prices, moderate electric sales growth and renegotiation of some PSNN contractual obligations that precede the bankruptcy filing.
Amounts based on estimated P8NH cash at time of closing.
As a means of accelerating the bankruptcy resolution, NU's plan would provide the $165 million to preferred and common equity holders only if they vote to approve Plan of Reorganization.
If they vote against it, all of $165 million would go to unsecured creditors.
Basic racts About NU and P8NH NU (7/1/88-6/30/89)
P8NH (4/1/88 3/31/89)
Electric operating Revenue
$2.14 billion
$600 million customers 1,240,000 365,000 i
General Offices Berlin, CT Manchester, NH 1
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c5iin ano neorganizec YbNM, no ouvia agreement m modified from time to time by mutual agre the parties.
ate" means the date fixed by the Bankruptcy
+w-co-ard n;;m.
we
" Regulatory Approvals" means to the extent reasonably deemed necessary by NU, (1) a Final Order or Orders of the NHPUC approving or authorizing the organization of SNI Corporation and the issuance of the SNI Corporation Securities, the transfer of the New Hampshire Yankee Division to a separate corporation, the transfer of the Seabrook Interest to SNI Corporation, the issuance of the Reorganized PSNH Mortgage Bonds, the Reorganized PSNH Common Stock and any rate or other action which must be approved or authorized by NHPUC prior to consummation of this Plan, (ii) a Final Order or Orders of the CDPUC approving or waiving jurisdiction with respect to the issuance of securities by the Debtor and granting any other necessary approvals with respect to the transactions contemplated by this Plan, (iii),
(iv) & (v), if required, Final Orders of the Massachusetts Department of Public Utilitles, Maine Public Utilities Commission and Vermont Public Service Board approving the
, transactions contemplated by this Plan, (vi) a Final Order or Orders of the SEC under PUECA permitting an application / declaration with respect to the transactions contemplated by this Plan to become effective, (vii) a Final li,
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Order or Orders of FERC under the Federal Power Act approving NU's acquisition of the Reorganized PSNH Common Stock pursuant j
1 to this Plan and the transfer of the Seabrook Interest to SNI l
Corporation, accepting for filing the Seabrook Power Contract and any other wholesale contracts or contract amendments required with respect to the transactions contemplated by this Plan, and granting any other approvals which may be necessary with respect to the transactions contemplated by this Plan, (viii) a Final order or Orders of the Nuclear Regulatory Commission amending the license for Seabrook Unit No. 1 or otherwise authorizing the transfer of the New Hampshire Yankee Division and its responsibilities and duties with respect to Seabrook and of the Seabrook Interest contemplated by this Plan; and (ix) any other governmental approval or order reasonably deemed by NU to be necessary under applicable law.
"Reergani:: tic.- C:::"
- n: C..e no. en as-ovusa 1 44 um Bankruptcy Court.
" Reorganized PSNH" means the D or on and after the Effective Date.
"Residu Amount" means the amount derived from the calculatio described in Section IV.A.5.
"ODC" means securit2es and R change Ce-m4==4 e l
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CERTIFICATE OF SERVICE 19 El I,
Thomas G.
Dignan, Jr.,
one of the attorneys for.the l
Applicants herein, hereby certify that on Jyly 28,'ies 1989,' I made service of the within document by mailing dop thereof, postage prepaid, to:
Alan S. Rosenthal, Chairman Howard A. Wilber Atomic Safety and Licensing Atomic Safety and Licensing Appeal Panel Appeal Panel U.S. Nuclear Regulatory U.S.
Nuclear Regulatory Commission Commission Washington, DC 20555 Washington, DC 20555 Thomas S. Moore Mr. Richard R.
Donovan Atomic Safety and Licensing Federal Emergency Management Appeal Panel Agency U.S. Nuclear Regulatory Federal Regional Center Commission 130 228th Street, S.W.
.20555 Bothell, Washington 98021-9796 Administrative Judge Ivan W.
H. Joseph Flynn, Esquire Smith, Chairman Office of General Counsel Atomic Safety and Licensing Board Federal Emergency Management U.S. Nuclear Regulatory Agency Commission 500 C Street, S.W.
Washington, DC 20555 Washington, DC 20472 Administrative Judge Richard F.
John P. Arnold, Esquire Cole Attorney General Atomic Safety and Licensing Board George Dana Bisbee, Esquire U.S. Nuclear Regulatory Assistant Attorney General Commission Office of the Attorney General Washington, DC 20555 25 Capitol Street Concord, NH 03301-6397 Administrative Judge Kenneth A.
Judith H. Mizner, Esquire McCollom 79 State Street, 2nd Floor 1107 West Knapp Street Newburyport, MA 01950 Stillwater, OK 74075 Diane Curran, Esquire Robert R.
Pierce, Esquire Andrea C.
Ferster, Esquire Atomic Safety and Licensing Board I
Harmon, Curran & Tousley U.S.
Nuclear Regulatory Suite 430 Commission l
2001 S Street, N.W.
Washington, DC 20555 Washington, DC 20009 i
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Adjudicatory File Sherwin E. Turk, Esquire Atomic Safety and Licensing Office of the Executive Legal Board Panel Docket (2 copies)
Director U.S.
Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, DC 20555 Washington, DC 20555 Atomic Safety and Licensing Robert A.
Backus, Esquire Appeal Board Backus, Meyer & Solomon U.S. Nuclear Regulatory 116 Lowell Street Commission P.O.
Box 516 Washington, DC 20555 Manchester, NH 03105 Philip Ahrens, Esquire Mr. J.
P.
Nadeau Assistant Attorney General Selectmen's Office Department of the Attorney 10 Central Road General Rye, NH 03870 Augusta, ME 04333 Paul McEachern, Esquire John Traficonte, Esquire Shaines & McEachern Assistant Attorney General 25 Maplewood Avenue Department of the Attorney P.O.
Box 360 General Portsmouth, NH 03801 One Ashburton Place, 19th Flr.
Boston, MA 02108 Mrs. Sandra Gavutis Mr. Calvin A.
Canney Chairman, Board of Selectmen City Manager RFD 1 - Box 2154 City Hall Kensington, NH 03027 126 Daniel Street Portsmouth, NH 03801 Senator Gordon J. Humphrey R. Scott Hill-Whilton, Esquire U.S. Senate Lagoulis, Hill-Whilton &
Washington, DC 20510 Rotondi (Attn:
Tom Burack) 79 State Street Newburyport, MA 01950 Senator Gordon J. Humphrey Barbara J. Saint Andre, Esquire One Eagle Square, Suite 507 Kopelman and Paige, P.C.
Concord, NH 03301 77 Franklin Street i
(Attn:
Herb Boynton)
Boston, MA 02110
{
l Mr. Thomas F.
Powers, III Mr. William S.
Lord
]
Town Manager Board of Selectmen 1
Town of Exeter Town Hall - Friend Street 10 Front Street Amesbury, MA 01913 Exeter, NH 03833 l _
,4 4-Ashod N. Amirian, Esquire Richard A. Hampe, Esquire 145 South Main Street Hampe and McNicholas P.O.
Box 38 35 Pleasant Street Bradford, MA 01835 Concord, NH 03301 Gary W.
Holmes, Esquire Holmes &. Ells 47 Winnacunnet Road Hampton, NH 03842 G.
Paul Bo11werk, III, Chairman
. Atomic Safety and Licensing Appeal Panel U.S. Nuclear Regulatory Commission Washington, DC 20555 f
f,f ' w)~Y sp -
r Thomas G.
Ditfffffn, Jr.
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