ML23279A048
| ML23279A048 | |
| Person / Time | |
|---|---|
| Site: | South Texas, 07201041  |
| Issue date: | 10/30/2023 |
| From: | NRC/NRR/DORL/LPL4 |
| To: | |
| Shared Package | |
| ML23279A022 | List: |
| References | |
| EPID L-2023-LLM-000 | |
| Download: ML23279A048 (1) | |
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OFFICIAL USE ONLY PROPRIETARY INFORMATION SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION AND THE OFFICE OF NUCLEAR MATERIAL SAFETY AND SAFEGUARDS RELATED TO THE REQUEST FOR INDIRECT TRANSFER OF CONTROL OF RENEWED FACILITY OPERATING LICENSE NO. NPF-76 RENEWED FACILITY OPERATING LICENSE NO. NPF-80 AND THE GENERAL LICENSE FOR THE INDEPENDENT SPENT FUEL STORAGE INSTALLATION SOUTH TEXAS PROJECT, UNITS 1 AND 2 DOCKET NOS. 50-498, 50-499, AND 72-1041
1.0 INTRODUCTION
1.1 Application By application dated June 12, 2023 (Agencywide Documents Access and Management System Accession No. ML23163A176), as supplemented by letters dated August 31, 2023, and October 5, 2023 (ML23243B056 and ML23279A138, respectively), STP Nuclear Operating Company (STPNOC), acting on behalf of Constellation Energy Generation, LLC (CEG) and NRG South Texas LP (NRG South Texas) and its parent companies, pursuant to Title 10 of the Code of Federal Regulations (10 CFR) sections 50.80, Transfer of licenses, and 72.50, Transfer of license, seeks U.S. Nuclear Regulatory Commission (NRC, the Commission) approval of the indirect transfer of the possession-only non-operating interests in Renewed Facility Operating License Nos. NPF-76 and NPF-80 for South Texas Project (STP), Units 1 and 2, respectively, and its generally licensed independent spent fuel storage installation (ISFSI) (collectively, the Facility) from NRG South Texas to CEG. The application also seeks, pursuant to 10 CFR 50.90, Application for amendment of license, construction permit, or early site permit, the issuance of conforming amendments to the renewed facility operating licenses for administrative purposes to reflect the proposed indirect license transfer. NRG South Texas is one of three licensed owners of the Facility, owning a 44 percent share of the Facility and holding possession-only rights in the NRC licenses.
Enclosure 4 OFFICIAL USE ONLY PROPRIETARY INFORMATION
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1.2 Background
As discussed in the application, CEG and NRG South Texas and its parent companies have entered into a purchase agreement whereby CEG would acquire NRG South Texas, including its 44 percent interest in the Facility. Following the closing of the proposed transaction, NRG South Texas would be converted under Texas law into a limited liability company and change its name to Constellation South Texas, LLC (Constellation South Texas). Following the closing of the proposed transaction, Constellation South Texas would continue to participate in the management of STPNOC, a not-for-profit Texas corporation and the licensed operator of the Facility.
1.3 Notices, Public Comments, and Hearing Requests On July 19, 2023, the NRC published a notice of consideration of approval of the application in the Federal Register (FR) (88 FR 46193). This notice provided an opportunity to comment, request a hearing, and petition for leave to intervene on the application. The supplemental letters dated August 31, 2023, and October 5, 2023, provided additional information that clarified the application and did not expand the scope of the application as originally noticed.
The NRC did not receive any written comments in response to the notice.
On July 31, 2023 (ML23212B247), the City of San Antonio, Texas acting by and through the City Public Service Board of San Antonio (CPS Energy), a Texas municipally-owned utility, and the City of Austin, Texas (Austin), the other two licensed owners of the Facility, submitted a motion to dismiss the license transfer application, a motion to stay the proceedings and suspend NRC review of the application, and a petition to intervene and request for hearing. CPS Energy owns a 40 percent share and Austin owns a 16 percent share of the Facility. On August 4, 2023 (ML23216A142 and ML23216A182, respectively), CEG and NRG South Texas separately filed answers in opposition to the motions; on August 7, 2023 (ML23219A216), STPNOC filed an answer in opposition to the motions. On August 10, 2023 (ML23222A285), CPS Energy and Austin filed a reply to NRG South Texass answer opposing the motions. On August 14, 2023 (ML23226A268), CPS Energy and Austin supplemented their hearing request.
On August 25, 2023 (ML23237B15 and ML23237B424, respectively), CEG and NRG South Texas separately filed answers opposing the hearing request, as supplemented, and on September 1, 2023 (ML23244A649), CPS Energy and Austin filed a reply to these answers.
These filings are pending before the Commission. The NRC staff reviewed and considered these filings as part of its evaluation of the application. Because motions and a hearing request are pending on the application, the order approving the transfer will be conditioned as follows:
The NRC staffs approval of the license transfer is subject to the Commissions authority to rescind, modify, or condition the approved transfer based on the outcome of any post-effectiveness hearing or motions on the license transfer application.
Separately, as referenced in the filings before the Commission, CPS Energy has filed litigation, in which Austin has petitioned to intervene, in Texas State court and NRG has filed answers in that State court proceeding and has moved for summary judgment, in which motion CEG has joined. The Texas State court proceeding is also pending. The NRC staff notes that the controversy at issue in the Texas State court proceeding is outside the scope of its review of the application; however, if any outcome of that proceeding results in the modification of the OFFICIAL USE ONLY PROPRIETARY INFORMATION
OFFICIAL USE ONLY PROPRIETARY INFORMATION proposed transaction, then separate NRC consent under 10 CFR 50.80 may be required prior to the consummation of the modified proposed transaction.
2.0 REGULATORY EVALUATION
The proposed transaction described in the application would constitute an indirect transfer of control of the licenses, which requires prior NRC approval. Generally, for indirect transfers of control of licenses, the NRC must find that the transaction will not affect the technical and financial qualifications of the holders of the licenses. The NRC regulations for the transfer of control of reactor licenses and for the transfer of control of ISFSI licenses are 10 CFR 50.80 and 10 CFR 72.50, respectively. In addition, pursuant to 10 CFR 2.1315, Generic determination regarding license amendments to reflect transfers, where administrative license amendments are necessary to reflect an approved license transfer, such amendments will be included in the order that approves the transfer. License amendments are requested pursuant to 10 CFR 50.90 and under 10 CFR 50.92(a), in determining whether an amendment will be issued, the NRC staff is guided by the considerations that govern the issuance of initial licenses to the extent applicable and appropriate. The common standards for license issuance in 10 CFR 50.40(a),
and those specifically for issuance of operating licenses in 10 CFR 50.57(a)(3), provide that there must be reasonable assurance that the activities at issue will not endanger the health and safety of the public.
2.1 Reactor Licenses 2.1.1 Regulations Section 50.80(a) of 10 CFR states, in part, that no license for a utilization facility or any right thereunder shall be transferred either voluntarily or involuntarily, directly or indirectly, through transfer of control of the license to any person, unless the Commission gives its consent in writing.
Section 50.80(b) of 10 CFR states, in part, that an application for transfer of an operating license shall include as much of the information described in 10 CFR 50.33, Contents of applications; general information, and 10 CFR 50.34, Contents of applications; technical information, with respect to the identity and technical and financial qualifications of the proposed transferee as would be required by those sections if the application were for an initial license.
Section 50.80(c) of 10 CFR states, in part, that the Commission will approve an application for the transfer of a license, if the Commission determines: (1) That the proposed transferee is qualified to be the holder of the license; and (2) That the transfer of the license is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto.
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OFFICIAL USE ONLY PROPRIETARY INFORMATION Sections 50.33(a) through (c) of 10 CFR require applicants to provide the name, address, and a description of the business or occupation of the applicant.
Section 50.33(d) of 10 CFR requires applicants to do the following:
if applicant is an individual, state citizenship if applicant is a partnership, state name, citizenship and address of each partner and the principal location where the partnership does business if applicant is a corporation or an unincorporated association, state:
(i) the state where it is incorporated or organized and the principal location where it does business; (ii) the names, addresses and citizenship of its directors and of its principal officers; and (iii) whether it is owned, controlled, or dominated by an alien, a foreign corporation, or foreign government, and if so, give details if the applicant is acting as agent or representative of another person in filing the application, identify the principal and furnish information required under this paragraph with respect to such principal Section 50.33(f) of 10 CFR requires, except for an electric utility applicant for a license to operate a utilization facility of the type described in 10 CFR 50.21(b) or 10 CFR 50.22, each application to provide information sufficient to demonstrate to the Commission the financial qualification of the applicant to carry out, in accordance with the NRCs regulations, the activities for which the license is sought. An electric utility is defined in 10 CFR 50.2, Definitions, as any entity that 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.
Section 50.33(k)(1) of 10 CFR requires that applicants provide the information described in 10 CFR 50.75, Reporting and recordkeeping for decommissioning planning, indicating how reasonable assurance will be provided that funds will be available to decommission the facility. Specifically, 10 CFR 50.75(b) requires that decommissioning financial assurance be provided in an amount not less than the minimum formula amount in 10 CFR 50.75(c). In 10 CFR 50.75(e), the NRC includes the methods acceptable to the agency for covering this decommissioning financial assurance amount, including using a decommissioning trust fund. Finally, 10 CFR 50.75(f) and (h) provide additional requirements for the reporting and management of decommissioning trust funds. In accordance with 10 CFR 50.2, the term decommission means to remove a facility or site safely from service and reduce residual radioactivity to a level that permits (1) Release of the property for unrestricted use and termination of the license; or (2) Release of the property under restricted conditions and termination of the license.
Section 50.34(b)(6) of 10 CFR requires applicants to provide certain information on facility operation, including: (i) the applicants organizational structure, allocations or responsibilities and authorities, and personnel qualifications requirements and (ii) managerial and administrative controls to be used to assure safe operation.
Section 50.34(b)(7) of 10 CFR requires applicants to provide the technical qualifications of the applicant to engage in the proposed activities in accordance with the NRCs regulations.
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OFFICIAL USE ONLY PROPRIETARY INFORMATION Section 50.38, Ineligibility of certain applicants, of 10 CFR implements the foreign ownership, control, or domination (FOCD) provisions of the Atomic Energy Act of 1954, as amended (the Act), sections 103d and 104d by providing that no license may be issued to any corporation, or other entity which the Commission knows or has reason to believe it is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government.
Section 50.54(w) of 10 CFR has requirements pertaining to nuclear onsite property damage insurance. Part 140, Financial Protection Requirements and Indemnity Agreements, of 10 CFR and Section 170 of the Act have requirements pertaining to Price-Anderson insurance and indemnity.
2.1.2 Guidance NUREG-0800, Standard Review Plan for the Review of Safety Analysis Reports for Nuclear Power Plants: LWR [Light-Water Reactor] Edition, Chapter 13, Conduct of Operations, provides the following guidance related to the review of license transfer applications:
o Section 13.1.1, Revision 6, Management and Technical Support Organization, dated August 2016 (ML15005A449), which describes the process used for the review of the corporate-level management and technical support organization of applicants.
o Section 13.1.2 - 13.1.3, Revision 7, Operating Organization, dated August 2016 (ML15007A296), which describes the process used for the review of the operating organization of applicants, including the structure, functions, and responsibilities of the onsite organization established to safely operate and maintain the facility.
NUREG-1577, Revision 1, Standard Review Plan on Power Reactor Licensee Financial Qualifications and Decommissioning Funding Assurance, dated December 2001 (ML013330264), describes the process used to evaluate financial qualifications and methods of providing decommissioning funding assurance.
The NRC staff evaluates license transfer applications using the guidance provided in the NRCs Final Standard Review Plan on Foreign Ownership, Control, or Domination (64 FR 52355; September 28, 1999) to determine whether the licensee will be owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government.
2.2 ISFSI General Licenses - Regulations The STP ISFSI is generally licensed in accordance with 10 CFR 72.210, General license issued.
Section 72.50 of 10 CFR provides the requirements for the transfer of an ISFSI license, stating, in part, that [n]o license or any part included in a license issued under [10 CFR Part 72] for an ISFSI shall be transferred, assigned, or in any manner disposed of, OFFICIAL USE ONLY PROPRIETARY INFORMATION
OFFICIAL USE ONLY PROPRIETARY INFORMATION either voluntarily or involuntarily, directly or indirectly, through transfer of control of the license to any person, unless the Commission gives its consent in writing.
3.0 TECHNICAL EVALUATION
As described in the application, as supplemented, the proposed transaction constitutes an indirect transfer of control of the licenses, which requires prior NRC approval, and would also require conforming administrative license amendments to reflect the transaction. This safety evaluation summarizes the NRC staffs review of the license transfer and of the conforming license amendments.
3.1 Evaluation of License Transfer 3.1.1 Financial Qualifications Except for an electric utility applicant for a license to operate a utilization facility of the type described in 10 CFR 50.21(b) or 10 CFR 50.22, 10 CFR 50.33(f) requires each application to state information sufficient to demonstrate to the Commission the financial qualification of the applicant to carry out, in accordance with regulations in this chapter, the activities for which the license is sought. Section 50.2 of 10 CFR defines an electric utility as any entity that 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.
As it is not rate-regulated by any State or other agencies, the NRC staff has determined that NRG South Texas (renamed Constellation South Texas) must meet the financial qualifications requirements for a non-electric utility pursuant to 10 CFR 50.33(f) for the proposed indirect license transfer. As such, the application must show that NRG South Texas (renamed Constellation South Texas) possesses, or has reasonable assurance of obtaining, the funds necessary to cover estimated operation costs for the period of the licenses. In making this showing, the applicants must submit estimates for total annual operating costs for each of the 5 years of facility operations immediately following the license transfer and indicate the sources of funds to cover these costs.
The NRC staff reviewed the financial qualifications information submitted by the applicants for the reasonableness of the estimated operating costs, the reasonableness of the financial projections and underlying assumptions, and the sensitivity of the revenue projections to determine whether NRG South Texas (renamed Constellation South Texas) possesses or has reasonable assurance of obtaining the funds necessary to cover estimated operation costs for the period of the licenses.
3.1.1.1 Evaluation of Financial Qualifications In the application, as supplemented, the applicants stated that the proposed transaction would have no adverse effect on the financial qualifications of NRG South Texas (renamed Constellation South Texas) and its capability to be a joint owner of the Facility. The applicants also stated that the anticipated revenues from sales of energy from Constellation South Texass 44 percent interest in the Facility provide reasonable assurance of an adequate source of funds to meet the proportional projected operational expenses. In support of this statement, the applicants provided projected income statements for the 5-year period from 2024 through 2028, which are summarized in Table 1 below.
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OFFICIAL USE ONLY PROPRIETARY INFORMATION Table 1: Summary of Projected Income Statements for Constellation South Texas ($ in millions)
Year 2024 2025 2026 2027 2028 Total Revenue ((
Total Expenses Income Before Taxes Net Income ))
The NRC staff determined that the projected income statements for Constellation South Texass 44 percent share of the Facility provide the information necessary to evaluate the financial qualifications of Constellation South Texas. The projection shows ((
)). The NRC staff determined that this projection demonstrates that Constellation South Texas has reasonable assurance of obtaining the funds necessary, through revenues generated from the sale of electricity, to cover estimated operation costs for the 5 years of the Facility operation immediately following the proposed transfer. The NRC staff reviewed the bases for the revenue, expenses, and income figures as presented by the applicants and concludes that the assumptions used by the applicants are reasonable.
The applicants also provided a sensitivity analysis that reduced the forecasted market revenue.
Considering the reduction in market revenue, the applicants still forecasted ((
)), thus demonstrating that Constellation South Texas has reasonable assurance of obtaining through revenue generation the funds necessary to cover estimated operating costs even under these more conservative conditions.
3.1.1.2 Fixed Operating Costs and Associated Support Agreement Regarding financial qualifications, NUREG-1577 states, in part, that the NRC staff reviewer will also consider other relevant financial information (i.e., information on cash or cash equivalents that would be sufficient to pay fixed operating costs during an outage of at least 6 months ... and any other relevant factors).
The applicants provided a calculation of the Constellation South Texas share of the 6-month fixed operating costs for the Facility as (( )). This scenario reflects the 44-percent share of the fixed operating costs that would be incurred during a prolonged outage of STP, Units 1 and 2, during which Constellation South Texas would be unable to generate revenues from operation to cover operating expenses. To address this scenario, CEG, in accordance with April 11, 2006, and November 2, 2006, Support Agreements currently provided to NRG South Texas in connection with prior license transfers, would maintain a Parent Support Agreement committing to make funding of up to $95 million available to Constellation South Texas. To further support its assertion that the proposed transaction satisfies the NRCs financial qualifications requirements, the application states that CEG has assets in excess of $46 billion and provides supporting information from CEGs Form 10-K Annual Report filed with the Securities and Exchange Commission (SEC), dated February 16, 2023. Additionally, the application provides CEGs Moodys and Standard and Poors (S&P) bond ratings over the past 2 years. CEG was rated Baa2 by Moodys and BBB by S&P in both 2022 and 2023.1 1
While the NRC does not require bond ratings as a criterion for evaluating financial qualifications for a license transfer application, an investment grade rating supports the assertion of financial wherewithal.
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OFFICIAL USE ONLY PROPRIETARY INFORMATION Based on the above, the NRC staff finds that CEG would maintain a Parent Support Agreement with Constellation South Texas adequate to fund approximately six months worth of the Constellation South Texas share of the fixed operating costs of the Facility and has adequate sources of funds to provide such funding and that this provides additional assurance of financial qualifications. Accordingly, in the order approving the transfer, the NRC consents to NRG South Texas voiding and canceling the existing April 11, 2006, and November 2, 2006, Support Agreements upon closing of the proposed transaction and the transfer of control to CEG.
3.1.1.3 Conclusion of Financial Qualifications Evaluation In consideration of the above, the NRC staff finds that the applicants have submitted information that demonstrates that Constellation South Texas has reasonable assurance of obtaining the funds necessary to cover the estimated operation costs of the Facility for the period of the licenses, and that any changes as a result of the proposed transaction will not affect the financial qualifications of NRG South Texas (renamed Constellation South Texas) to possess the Facility. Moreover, support from its parent in the form of the Support Agreement to be established as part of the indirect license transfer as discussed above provides additional assurance that funds will be available to cover estimated operation costs. Therefore, the NRC staff concludes that NRG South Texas (renamed Constellation South Texas) will continue to be financially qualified to carry out, in accordance with the NRCs regulations, the activities authorized by the licenses and, thus, that the proposed indirect transfer of the licenses satisfies 10 CFR 50.80 and 10 CFR 72.50 with respect to financial qualifications.
3.1.2 Evaluation of Decommissioning Funding Pursuant to 10 CFR 50.33(k), an applicant for an operating license for a utilization facility must demonstrate how reasonable assurance will be provided that funds will be available to decommission the facility consistent with 10 CFR 50.75. The regulation at 10 CFR 50.75(b) requires a power reactor licensee to provide decommissioning funding assurance by one or more of the methods described in 10 CFR 50.75(e). Furthermore, 10 CFR 50.75(c) provides the Table of minimum amounts (January 1986 dollars) required to demonstrate reasonable assurance of funds for decommissioning by reactor type and power level, P (in MWt [megawatts thermal]); adjustment factor.
3.1.2.1 Decommissioning Funding Assurance for the Facility The applicants stated that the financial qualifications of Constellation South Texas to continue to own its 44 percent ownership interests in the Facility are further demonstrated by the fact that Constellation South Texas will continue to provide financial assurance for decommissioning funding in accordance with 10 CFR 50.75(e)(1)(i) and (ii), using the external sinking fund method with access to non-bypassable charges to retail ratepayers. The applicants further stated that NRG South Texas currently maintains and that Constellation South Texas will continue to maintain decommissioning trust funds that have been established to provide funding for radiological decommissioning of its 44 percent ownership interests in the Facility. Finally, the applicants stated that Constellation South Texas will continue to maintain these external sinking funds segregated from its assets and outside its administrative control in accordance with the requirements of 10 CFR 50.75(e)(1)(i) and (ii).
The applicants provided that the approximate market value of the NRG South Texas decommissioning trusts for STP, Units 1 and 2 are $290 million and $363, respectively, as of OFFICIAL USE ONLY PROPRIETARY INFORMATION
OFFICIAL USE ONLY PROPRIETARY INFORMATION December 31, 2022. The NRC staff calculated the Table of Minimum Amounts values, in accordance with 10 CFR 50.75(c), and found that the minimum funding assurance amounts for STP, Units 1 and 2 are approximately $407 million each. Using the information provided in the application, the NRC staff calculated the amount of funding projected to be available at the time that each unit permanently ceases operations and determined that these amounts exceed the NRC minimum decommissioning funding requirements of 10 CFR 50.75(c), without any additional contributions to the trust funds.
Additionally, the applicants stated that, as specifically approved by the Public Utility Commission of Texas, if needed, previous Facility owner parent companies are able to collect from electric utility ratepayers costs associated with the decommissioning of the NRG South Texas (renamed Constellation South Texas) 44-percent interests in the Facility pursuant to a non-bypassable charge. These collections would either be transferred to the decommissioning trust for the benefit of Constellation South Texas or directly to Constellation South Texas, which would, in turn, deposit such amounts into the decommissioning trust. The ability to collect non-bypassable charges provides additional assurance that Constellation South Texas will have the funding available to decommission its share of the Facility once the units permanently cease operations, even in the event of a potential projected shortfall in decommissioning funding.
3.1.2.2 Conclusion of Decommissioning Funding Evaluation In consideration of the above, the NRC staff finds that the NRG South Texas (renamed Constellation South Texas) decommissioning funding amounts exceed the NRC decommissioning funding requirements for the Facility. The NRC staff also finds that the proposed transaction, including the indirect license transfer, will not materially affect the decommissioning funding arrangements currently in place for the Facility. Additionally, any decommissioning funding shortfalls could be covered pursuant to a non-bypassable charge.
Therefore, the NRC staff concludes that Constellation South Texas will continue to provide reasonable assurance that funds will be available to decommission the Facility in accordance with the NRCs requirements and, thus, that the proposed indirect transfer of the licenses satisfies 10 CFR 50.80 and 10 CFR 72.50 with respect to decommissioning funding.
3.1.3 Evaluation of Technical Qualifications 3.1.3.1 Operating Organization In section V, Technical Qualifications, of enclosure 1 to the application the applicants stated the following:
STPNOC will continue to be the entity licensed to operate STP, and its technical qualifications will be unaffected by the proposed indirect license transfer. No physical changes are expected to be made to, and there will be no adverse changes in day-to-day operations of the Facility as a result of the proposed transfer of control over the 44% ownership of the Facility.
Section 13.1.2 - 13.1.3 of NUREG-0800 states that the review for a transfer of an operating license should focus on evaluating changes to the operating organization proposed as a result of the transfer and ensure that the proposed changes will result in an organization that will continue to meet the relevant review criteria.
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OFFICIAL USE ONLY PROPRIETARY INFORMATION The NRC staff reviewed the application, as supplemented, and determined that the proposed indirect transfer of control of the licenses is not expected to have any impact on the operating organization at the Facility. STPNOC will remain as the established operating organization for the Facility and, in accordance with the STP operating licenses, STPNOC will maintain its role as the organization technically qualified to engage in the activities authorized by the operating licenses in accordance with the NRCs regulations. Furthermore, the NRC staff determined that the proposed transaction also does not affect operation under the ISFSI general license.
Because there will be no actual impact on facility operations or the operating organization at the Facility, the NRC staff finds the applicants consideration of this review area to be acceptable.
3.1.3.2 Management and Technical Support Organization In section I, Introduction, of enclosure 1 to the application the applicants stated the following:
The Facility is jointly owned by three (3) independent entities: NRG South Texas (44%); City Public Service Board of San Antonio (40%); and City of Austin, Texas (16%) (the Participants). The Participants also have interests in the corporate governance of STPNOC, which is the licensed operator for STP. The Participants have authorized STPNOC to act on their behalf to have exclusive responsibility for the control over the physical construction, operation, and maintenance of the Facility.
Following the closing of the Transaction, Constellation South Texas will continue to participate in the management of STPNOC, a not-for-profit Texas corporation.
STPNOC is governed by its Board of Directors, and Constellation South Texas will continue to appoint one of the members of the Board of Directors of STPNOC. Each of the Participants appoints one Participant Director of STPNOC, and these three Participant Directors choose a CEO Director by unanimous vote. However, this role in the governance of STPNOC does not constitute control over STPNOC and, therefore, there will be no indirect transfer of control of the STPNOC licensed authority to operate the Facility on behalf of the co-owners.
In section V of enclosure 1 to the application the applicants stated the following:
No material changes in the management of or operational organization for the Facility are expected to be made as part of the proposed Transaction. No physical changes are expected to be made to, and there will be no adverse changes in day-to-day operations of the Facility as a result of the proposed transfer of control over the 44% ownership of the Facility. The proposed Transaction will not require or involve any change in the staffing and qualifications of personnel who currently operate the Facility.
Section 13.1.1 NUREG-0800 states that [t]he review for license transfer will examine the acceptability of any changes to the technical organization or personnel qualifications proposed as a result of a license transfer. It also states that [t]he objective of this review is to ensure that the corporate management is involved with, informed of, and dedicated to the safe design, construction, testing, and operation of the nuclear plant and that the review should ensure that OFFICIAL USE ONLY PROPRIETARY INFORMATION
OFFICIAL USE ONLY PROPRIETARY INFORMATION sufficient technical resources have been, are being, and will continue to be provided to adequately accomplish these objectives.
The NRC staff reviewed the application, as supplemented, and determined that the proposed indirect transfer of control of the licenses is not expected to have any impact on the management organization at STPNOC. STPNOC will continue to make all technical decisions that do not require approval from all owners of the Facility. Because there will be no actual impact on the facility management organization responsible for oversight at the Facility, the NRC staff finds the applicants consideration of this review area to be acceptable.
3.1.3.3 Conclusion of Technical Qualifications Evaluation The NRC staff reviewed the operational and human performance aspects of the applicants request for NRC consent to the proposed indirect transfer of control of the licenses for the Facility. Based on the information provided in the application, as supplemented, the NRC staff determined that there will be no substantial change to the operations and management organizations affecting the technical qualifications of those organizations. Therefore, the NRC staff finds that there is no change to the relevant information outlined in 10 CFR 50.33 and 10 CFR 50.34 and that the applicants have provided sufficient information in accordance with 10 CFR 50.80(b)(1)(i). Therefore, the NRC staff concludes that STPNOC will continue to be technically qualified to perform the activities authorized by the licenses and the NRCs regulations and, thus, that the proposed indirect transfer of the licenses satisfies 10 CFR 50.80 and 10 CFR 72.50 with respect to technical qualifications.
3.1.4 Antitrust Consideration The Act does not require or authorize antitrust reviews of post-operating license transfer applications.2 The application post-dates the issuance of the operating licenses for the reactor units under consideration in this safety evaluation; therefore, no antitrust review is required or authorized. Additionally, the application does not propose any changes to antitrust conditions; therefore, there are no antitrust issues for the NRC staff to consider in connection with conforming license amendments.
3.1.5 Evaluation of Foreign Ownership, Control, or Domination According to the application, as supplemented, CEG is not owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government. The application states that CEGs securities are widely held and publicly traded on the NASDAQ stock market. Additionally, the application states that, based on filings with the SEC, CEG is not aware of any alien, foreign corporation, or foreign government that holds or may hold more than 5 percent of the securities of CEG. Finally, the application states that except as indicated in the application, the current directors and executive officers of CEG are U.S. citizens.
The NRC staff conducted an independent analysis, including open-source research and verification of the information provided in the application related to the ownership of all entities relevant to the proposed transaction, and found no evidence of FOCD of the licenses. While the application describes the potential for foreign investment interest in CEG, the investment is 2
Kansas Gas and Electric Co., et al. (Wolf Creek Generating Station, Unit 1), CLI-99-19, 49 NRC 441 (1999).
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OFFICIAL USE ONLY PROPRIETARY INFORMATION passive and will not result in the ability to exercise control or domination over CEG, or any of its proposed subsidiaries, including Constellation South Texas, or the ability to exercise control over NRC-licensed activities at the Facility.
Based on its independent analysis of the information provided in the application, as supplemented, the NRC staff finds that the proposed indirect license transfer does not raise any issues related to FOCD of the licenses within the meaning of the Act and the NRCs regulations.
Therefore, pursuant to sections 103d and 104d of the Act and 10 CFR 50.38, the NRC staff concludes that it does not know or have reason to believe that Constellation South Texas will be owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government as a result of the proposed transaction.
3.1.6 Evaluation of Nuclear Insurance and Indemnity Upon review of the requirements of section 170 of the Act and the NRCs implementing regulations at 10 CFR part 140, the NRC staff finds that the current indemnity agreements will need to be modified to reflect the proposed indirect license transfer (e.g., amended to include Constellation South Texas, LLC as a licensee for the Facility and to name Constellation South Texas, LLC as an indemnified entity). Additionally, the financial protection currently provided by NRG South Texas (renamed Constellation South Texas) in the form of offsite liability insurance and onsite property insurance would continue to remain in effect but shall reflect the change in licensee name to Constellation South Texas, LLC. NRG South Texas (renamed Constellation South Texas) remains required to provide, maintain, and report the appropriate amount of insurance in accordance with 10 CFR 50.54(w) and 10 CFR part 140. Therefore, the NRC staff concludes that NRG South Texas (renamed Constellation South Texas) will continue to meet the applicable nuclear insurance and indemnity requirements for its 44-percent interests in the Facility.
3.1.7 Conclusion of License Transfer Evaluation Based on its review of the information provided in the application, as supplemented, and its independent analysis, the NRC staff finds that the indirect transfer of control of the licenses for the Facility resulting from the proposed transaction will not affect the qualifications of NRG South Texas (renamed Constellation South Texas) to be a licensed owner and STPNOC to be the licensed operator. NRG South Texas (renamed Constellation South Texas) will continue to be financially qualified and STPNOC will continue to be technically qualified to carry out, in accordance with the NRCs regulations, the activities authorized by the licenses; NRG South Texas (renamed Constellation South Texas) will continue to provide reasonable assurance that funds will be available to decommission the Facility in accordance with the NRCs requirements; NRG South Texas (renamed Constellation South Texas) will continue to meet the applicable nuclear insurance and indemnity requirements; and NRG South Texas (renamed Constellation South Texas) will continue to have no issues with respect to antitrust and FOCD. Accordingly, the NRC staff concludes that NRG South Texas (renamed Constellation South Texas) will continue to be qualified to be the 44-percent possession-only owner of the licenses and that the indirect transfer of the licenses is otherwise consistent with the applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto.
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OFFICIAL USE ONLY PROPRIETARY INFORMATION 3.2 Evaluation of Conforming License Amendments 3.2.1 Conforming Amendments The application requests conforming amendments to the licenses to reflect the proposed indirect license transfer. Specifically, the conforming amendments would replace the name NRG South Texas LP with the name Constellation South Texas, LLC in the licenses. As discussed above, these changes would not materially change compliance with NRC requirements.
The applicants provided a markup of the proposed changes to the licenses. The NRC staff has prepared draft conforming license amendments to reflect the proposed indirect license transfer.
The draft conforming license amendments are consistent with the applicants proposed changes. The NRC staff determined that the changes to the licenses, as reflected in the draft conforming amendments, are either consistent with NRC requirements or administrative in nature, and are necessary to reflect the approved license transfer. Accordingly, the NRC staff concludes that the draft conforming amendments are acceptable. The NRC staff will issue and make effective the conforming amendments when the license transfer is completed.
3.2.2 No Significant Hazards Consideration Under the Act and the NRCs regulations, the NRC staff may issue and make an amendment immediately effective, notwithstanding the pendency before the Commission of a request for a hearing from any person, in advance of the holding and completion of any required hearing, where it has made a determination that no significant hazards consideration or no genuine issue as to whether the health and safety of the public will be significantly affected is involved.
As provided in 10 CFR 2.1315, unless otherwise determined by the Commission with regard to a specific application, the Commission has determined that any amendment to the license of a utilization facility or the license of an ISFSI, which does no more than conform the license to reflect the transfer action, involves respectively, no significant hazards consideration or no genuine issue as to whether the health and safety of the public will be significantly affected. No contrary determination has been made by the Commission regarding this specific application.
3.2.3 Conclusion of Conforming License Amendments Evaluation The Commission has concluded, based on the considerations discussed above, that: (1) there is reasonable assurance that the health and safety of the public will not be endangered by operation in the proposed manner, (2) there is reasonable assurance that such activities will be conducted in compliance with the Commissions regulations, and (3) the issuance of the amendments will not be inimical to the common defense and security or to the health and safety of the public.
4.0 STATE CONSULTATION
In accordance with the Commissions regulations, on October 4, 2023, the NRC staff notified the State official of the proposed indirect license transfer and issuance of draft conforming amendments. The official did not provide any comments.
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5.0 ENVIRONMENTAL CONSIDERATION
The application is for approval of a transfer of licenses issued by the NRC and for approval of associated amendments to the licenses required to reflect the approval of the transfer.
Accordingly, the actions involved meet the eligibility criteria for categorical exclusion set forth in 10 CFR 51.22(c)(21). Pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared in connection with the approval of the application and conforming license amendments.
6.0 CONCLUSION
The Commission has concluded, based on the considerations discussed above, that: (1) the proposed transferee is qualified to be the holder of the licenses and (2) transfer of the licenses is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto. The Commission has also concluded, based on the considerations discussed above, that: (1) there is reasonable assurance that the health and safety of the public will not be endangered by operation in the proposed manner, (2) there is reasonable assurance that such activities will be conducted in compliance with the Commissions regulations, and (3) the issuance of the amendments will not be inimical to the common defense and security or to the health and safety of the public.
Principal Contributors: Shawn Harwell, NMSS Bernard Litkett, NRR Dennis Galvin, NRR Date: October 30, 2023 OFFICIAL USE ONLY PROPRIETARY INFORMATION