ULNRC-06827, Supplement to License Amendment Request Regarding Support System Requirements for Residual Heat Removal and Control Room Air Conditioning Systems Under Technical Specifications 3.4.8, 3.7.11, and 3.9.6 (LDCN 22-0029)

From kanterella
(Redirected from ML23324A370)
Jump to navigation Jump to search

Supplement to License Amendment Request Regarding Support System Requirements for Residual Heat Removal and Control Room Air Conditioning Systems Under Technical Specifications 3.4.8, 3.7.11, and 3.9.6 (LDCN 22-0029)
ML23324A370
Person / Time
Site: Callaway Ameren icon.png
Issue date: 11/20/2023
From: Witt T
Ameren Missouri, Union Electric Co
To:
Office of Nuclear Reactor Regulation, Document Control Desk
References
ULNRC-06827
Download: ML23324A370 (1)


Text

.

.t

.t

.t Callaway Plant 8315 County Road 459 : Steedman, MO 65077 : AmerenMissouri.com

.t November 20, 2023 ULNRC-06827 U.S. Nuclear Regulatory Commission Attn: Document Control Desk Washington, DC 20555-0001 10 CFR 50.90 Ladies and Gentlemen:

DOCKET NUMBER 50-483 CALLAWAY PLANT UNIT 1 UNION ELECTRIC CO.

RENEWED FACILITY OPERATING LICENSE NPF-30 SUPPLEMENT TO LICENSE AMENDMENT REQUEST REGARDING SUPPORT SYSTEM REQUIREMENTS FOR THE RESIDUAL HEAT REMOVAL AND CONTROL ROOM AIR CONDITIONING SYSTEMS UNDER TECHNICAL SPECIFICATIONS 3.4.8, 3.7.11, AND 3.9.6 (LDCN 22-0029)

References:

Provided on Page 3.

By letter dated December 1, 2022 (Reference 1), Ameren Missouri submitted a license amendment request (LAR) to clarify the cooling water support system requirements for the Residual Heat Removal (RHR) system and Control Room Air Conditioning System (CRACS) during shutdown modes. By letter dated March 28, 2023 (Reference 2), the NRC communicated their plans to conduct an audit of the Reference 1 LAR and provided an initial listing of audit questions and requests for response. A set of additional, informal audit questions (and responses) verbalized during the audit was assembled as well. After the audit (conducted in April), and by e-mail dated July 27, 2023 (Reference 3), the NRC staff provided additional audit questions for response. Those audit questions and Ameren Missouri's responses to the questions were then clarified and discussed in telephone conferences conducted with the NRC staff on August 23 and September 13, 2023, as part of the overall audit activity. By letter dated October 16, 2023 (Reference 4) Ameren Missouri provided responses to all the audit questions, i.e., those transmitted via References 2 and 3 as well as those taken from the audit discussions.

This letter includes in the attachment additional insights and clarifications identified as necessary in a teleconference held with the NRC staff on November 7, 2023. Additionally, the enclosure to this letter provides (in the form of markups) proposed changes to the Technical Specification Bases (as provided for information only). These supersede those TS Bases markups provided previously by the Reference 1 letter.

ULNRC-06827 November 20, 2023 Page 2 of 5 This supplement does not impact the conclusions ofthe environmental and regulatory evaluations, including the Basis for No Significant Hazards Consideration, as provided by the letter per Reference 4.

The Callaway Onsite Review Committee has reviewed and approved submittal ofthis LAR supplement.

This submittal does not contain new commitments.

Ifthere are any questions, please contact Tom Elwood at 314-225-1905.

I declare under penalty of perjury that the foregoing is true and correct.

Sincerely, Todd A. Witt Manager, Regulatory Affairs Executed on:

ft -Q E3

Attachment:

Clarifications to EAR Regarding Cooling Water Support System Requirements for the Residual Heat Removal and Control Room Air Conditioning Systems

Enclosure:

Proposed TS Bases Markups (for Information)

ULNRC-06827 November 20, 2023 Page 3 of 5

References:

1. Ameren Missouri letter ULNRC-06781, License Amendment Request to Clarify Support System Requirements for the Residual Heat Removal System and Control Room Air Conditioning System Under Technical Specifications 3.4.8, 3.7.11, 3.9.6 (LDCN 22-0029), dated December 1, 2022 (ADAMS Accession No. ML22335A508)
2. NRC Letter, "Callaway Plant, Unit No. 1 - Regulatory Audit Plan and Setup of Online Reference Portal for License Amendment Request to Clarify Support System Requirements for the Residual Heat Removal and Control Room Air Conditioning Systems (EPID L-2022-LLA-0176)," dated March 28, 2023 (ADAMs Accession No, ML23065A321)
3. NRC e-mail capture,

Subject:

"Callaway Plant, Unit No. 1 - Regulatory Audit Questions - LAR to Clarify Support System Requirements for the Residual Heat Removal and Control Room Air Conditioning Systems (EPID L-2022-LLA-0176),"

dated July 27, 2023 (ADAMS Accession No. ML23208A105)

4. Ameren Missouri letter ULNRC-06825, Response to Regulatory Audit Questions and Supplement to License Amendment Request Regarding Support System Requirements for the Residual Heat Removal System and Control Room Air Conditioning System Under Technical Specifications 3.4.8, 3.7.11, 3.9.6 (LDCN 22-0029), dated October 16, 2023 (ADAMS Accession No. ML23289A215)

ULNRC-06827 November 20, 2023 Page 4 of 5 cc:

Mr. John Monninger Regional Administrator U. S. Nuclear Regulatory Commission Region IV 1600 East Lamar Boulevard Arlington, TX 76011-4511 Senior Resident Inspector Callaway Resident Office U.S. Nuclear Regulatory Commission 8201 NRC Road Steedman, MO 65077 Mr. Mahesh Chawla Project Manager, Callaway Plant Office of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Mail Stop O81A Washington, DC 20555-0001

ULNRC-06827 November 20, 2023 Page 5 of 5 Index and send hardcopy to QA File A160.0761 Hardcopy:

Certrec Corporation 6500 West Freeway, Suite 400 Fort Worth, TX 76116 (Certrec receives ALL attachments as long as they are non-safeguards and may be publicly disclosed.)

Electronic distribution for the following can be made via Tech Spec ULNRC Distribution:

F. M. Diya K. C. Scott W. A. Witt B. L. Jungmann T. A. Witt T. B. Elwood NSRB Secretary STARS Regulatory Affairs Mr. Jay Silberg (Pillsbury Winthrop Shaw Pittman LLP)

Ms. Claire Eubanks (Missouri Public Service Commission)

Mr. Aaron Schmidt (DNR)

Attachment to ULNRC-06827 Page 1 of 3 Clarifications to LAR Regarding Cooling Water Support System Requirements for the Residual Heat Removal and Control Room Air Conditioning Systems

Attachment to ULNRC-06827 Page 2 of 3 Clarifications to LAR Regarding Cooling Water Support System Requirements for the Residual Heat Removal and Control Room Air Conditioning Systems By a teleconference held with the NRC Staff on November 7, 2023, it was identified that the Technical Specification (TS) page markups previously provided include limitations on the associated TS Limiting Conditions for Operation (LCOs) for the RHR system using terms that are not clearly defined. This attachment aims to clarify those terms and also provide additional clarification on when containment closure requirements are initiated by site procedures.

Specifically, in Attachment 1 to the letter docketed under ML23289A215, under the section titled "Responses to Additional Audit Questions/Requests (Recorded/Added During Audit)," the response to Question 9 referenced APA-ZZ-00150, Appendix M, "Containment Closure,"

without providing additional information regarding the initiation requirements for containment closure. Additionally, a question was raised on why a time limitation was not applied to the new notes, similar to other notes applied to the RHR TS LCOs.

With respect to "reduced inventory" as used in the notes proposed to be added to TS LCOs 3.4.8 and 3.9.6, Ameren Missouri has incorporated the definition specified within NUMARC 91-06 for this term into site procedures. Specifically, reduced inventory is the PWR condition with fuel in the reactor vessel and level lower than three feet below the reactor vessel flange. At the Callaway plant, this corresponds to the reactor coolant system (RCS) level of 64" (i.e., 64 inches above the bottom of the inner diameter of the RCS hot leg piping).

With respect to "hot core" as used in the notes proposed to be added to TS LCOs 3.4.8 and 3.9.6, Ameren Missouri defines "hot core" as the present fuel cycle core within the reactor before refueling.

Site procedure APA-ZZ-00150 contains guidance for when containment closure should be established when in Modes 5, 6, or with loops not filled, within section 4.1.1 of the procedure.

Specifically:

  • When greater than 64 inches RCS level (not in reduced inventory), containment hatches and penetrations must be capable of being closed within 4 hours4.62963e-5 days <br />0.00111 hours <br />6.613757e-6 weeks <br />1.522e-6 months <br /> or the time calculated for T-Boil, whichever is less. If an opening cannot be closed within these time constraints, it will remain closed.
  • During reduced inventory, containment hatches and penetrations must be capable of being closed within 30 minutes or the time calculated for T-Boil, whichever is less. If an opening cannot be closed within these time constraints, it will remain closed.
  • Additional administrative controls must be instituted if the demonstrated time to close the equipment hatch is greater than one-half the time calculated for T-boil. For example:

Attachment to ULNRC-06827 Page 3 of 3 o Prestage the equipment hatch closure team at the equipment hatch, o Limit what can be in the equipment hatch, such that any obstructions, e.g., cables and hoses, SEALAND boxes, cart or Hatch Transfer System rails that could prevent closure, can be quickly removed.

In the telephone conference held with the NRC staff on November 7, 2023, it was also identified that updated changes to the Bases for the revised TS, should be provided. The enclosure to the letter for this attachment provides the revised TS Bases markups associated with the LAR.

The TS Bases markups provide additional information clarifying the Notes proposed for TS LCOs 3.4.8, 3.7.11, and 3.9.6. A time limit was not considered to be necessary or included in the proposed Notes since the Notes already stipulate that Service Water is not allowed during the most elevated risk condition for the plant during a typical refueling outage, i.e., a hot core at reduced inventory. In addition, the overall time that the plant is in these LCOs (i.e., when the Note may be applied, exclusive of the hot-core, reduced-inventory condition) is typically a fraction of the overall time that a plant is in a refueling outage.

Enclosure to ULNRC-06827 Page 1 of 16 Proposed TS Bases Markups (For Information)

(15 pages follow this cover page)

INSERT 1 Note 3 clarifies that the Service Water System may serve as the heat sink for one of the two required RHR loops, provided that one train of the Essential Service Water System serves as the heat sink for the other RHR loop. This allowance is dependent upon the plant not being in a reduced-inventory, hot-core condition. A hot core is the present fuel cycle core within the reactor (before refueling). Reduced inventory corresponds to an RCS level lower than 3 feet below the reactor vessel flange with fuel in the reactor vessel. Since a reduced inventory, hot-core condition is an elevated risk condition for the plant during Mode 5, the restriction in the Note for this condition ensures the decay heat removal function performed by the RHR system is supported by the safety-related Essential Service Water System (in lieu the non-safety Service Water System).

INSERT 2 The LCO is modified by a note to clarify that, in MODES 5 and 6, and during movement of irradiated fuel, one train of the Service Water System may serve as the heat sink for one of the two required CRACS trains, provided that one train of the Essential Service Water System serves as the heat sink for the other CRACS train. Cooling water for the CRACS trains is provided by the Service Water System or Essential Service Water System, as determined by system availability and plant operational constraints during MODES 5 and 6.

INSERT 3 The LCO is modified by a note to clarify that the Service Water System may serve as the heat sink for one of the two required RHR loops, provided that one train of the Essential Service Water System serves as the heat sink for the other RHR loop. This allowance is dependent upon the plant not being in a reduced-inventory, hot-core condition. A hot core is the present fuel cycle core within the reactor (before refueling).

Reduced inventory corresponds to an RCS level lower than 3 feet below the reactor vessel flange with fuel in the reactor vessel. Since a reduced inventory, hot-core condition is an elevated risk condition for the plant during Mode 6, the restriction in the Note for this condition ensures the decay heat removal function performed by the RHR system is supported by the safety-related Essential Service Water System (in lieu of the non-safety Service Water System).

&$//$:$<3/$17

%

5HYLVLRQ

5&6/RRSV02'( /RRSV1RW)LOOHG

%

%5($&725&22/$176<67(0 5&6

%5&6/RRSV02'( /RRSV1RW)LOOHG

%$6(6

%$&.*5281'

,Q02'( ZLWKWKH5&6ORRSVQRWILOOHGWKHSULPDU\\IXQFWLRQRIWKH

UHDFWRUFRRODQWLVWKHUHPRYDORIGHFD\\KHDWJHQHUDWHGLQWKHIXHODQGWKH

WUDQVIHURIWKLVKHDWWRWKHFRPSRQHQWFRROLQJZDWHUYLDWKHUHVLGXDOKHDW

UHPRYDO 5+5 KHDWH[FKDQJHUV7KHVWHDPJHQHUDWRUV 6*V DUHQRW

DYDLODEOHDVDKHDWVLQNZKHQWKHORRSVDUHQRWILOOHG7KHVHFRQGDU\\

IXQFWLRQRIWKHUHDFWRUFRRODQWLVWRDFWDVDFDUULHUIRUWKHVROXEOHQHXWURQ

SRLVRQERULFDFLG

,Q02'( ZLWKORRSVQRWILOOHGRQO\\5+5SXPSVFDQEHXVHGIRUFRRODQW

FLUFXODWLRQ7KHQXPEHURISXPSVLQRSHUDWLRQFDQYDU\\WRVXLWWKH

RSHUDWLRQDOQHHGV7KHLQWHQWRIWKLV/&2LVWRSURYLGHIRUFHGIORZIURPDW

OHDVWRQH5+5SXPSIRUGHFD\\KHDWUHPRYDODQGWUDQVSRUWDQGWRUHTXLUH

WKDWWZRSDWKVEHDYDLODEOHWRSURYLGHUHGXQGDQF\\IRUKHDWUHPRYDO

'XULQJ5+5V\\VWHPRSHUDWLRQKHDWLVUHPRYHGIURPWKH5&6E\\

FLUFXODWLQJUHDFWRUFRRODQWWKURXJKWKH5+5KHDWH[FKDQJHUVZKHUHWKH

KHDWLVWUDQVIHUUHGWRWKH&RPSRQHQW&RROLQJ:DWHU6\\VWHP7KHKHDWVLQN

IRUWKH&RPSRQHQW&RROLQJ:DWHU6\\VWHPLVLQWXUQQRUPDOO\\SURYLGHGE\\

WKH6HUYLFH:DWHU6\\VWHPRU(VVHQWLDO6HUYLFH:DWHU6\\VWHPDV

GHWHUPLQHGE\\V\\VWHPDYDLODELOLW\\

$33/,&$%/(

6$)(7<

$1$/<6(6

,Q02'( 5&6FLUFXODWLRQLVFRQVLGHUHGLQWKHGHWHUPLQDWLRQRIWKHWLPH

DYDLODEOHIRUPLWLJDWLRQRIWKHDFFLGHQWDOERURQGLOXWLRQHYHQW7KHIORZ

SURYLGHGE\\RQH5+5ORRSLVDGHTXDWHIRUGHFD\\KHDWUHPRYDO

7KHRSHUDWLRQRIRQH5&3LQ02'(6 DQG SURYLGHVDGHTXDWHIORZ

WRHQVXUHPL[LQJSUHYHQWVWUDWLILFDWLRQDQGSURGXFHJUDGXDOUHDFWLYLW\\

FKDQJHVGXULQJ5&6ERURQFRQFHQWUDWLRQUHGXFWLRQV7KHUHDFWLYLW\\

FKDQJHUDWHDVVRFLDWHGZLWKERURQUHGXFWLRQZLOOWKHUHIRUHEHZLWKLQWKH

WUDQVLHQWPLWLJDWLRQFDSDELOLW\\RIWKH%RURQ'LOXWLRQ0LWLJDWLRQ6\\VWHP

%'06 :LWKQRUHDFWRUFRRODQWORRSLQRSHUDWLRQLQHLWKHU02'(6 

RU ERURQGLOXWLRQVPXVWEHWHUPLQDWHGDQGDOOGLOXWLRQVRXUFHVLVRODWHG

7KHERURQGLOXWLRQDQDO\\VLVLQWKHVH02'(6WDNHVFUHGLWIRUWKHPL[LQJ

YROXPHDVVRFLDWHGZLWKKDYLQJDWOHDVWRQHUHDFWRUFRRODQWORRSLQ

RSHUDWLRQ/&2%RURQ'LOXWLRQ0LWLJDWLRQ6\\VWHP %'06 

FRQWDLQVWKHUHTXLUHPHQWVIRUWKH%'06

5&6ORRSVLQ02'(  ORRSVQRWILOOHG VDWLVILHV&ULWHULRQ RI

&)5 F  LL 

 FRQWLQXHG

5&6/RRSV02'( /RRSV1RW)LOOHG

%

%$6(6 &RQWLQXHG

&$//$:$<3/$17

%

5HYLVLRQ

/&2

7KHSXUSRVHRIWKLV/&2LVWRUHTXLUHWKDWDWOHDVWWZR5+5ORRSVEH

23(5$%/(DQGRQHRIWKHVHORRSVEHLQRSHUDWLRQ$Q23(5$%/(ORRS

LVRQHWKDWKDVWKHFDSDELOLW\\RIWUDQVIHUULQJKHDWIURPWKHUHDFWRUFRRODQW

DWDFRQWUROOHGUDWH+HDWFDQQRWEHUHPRYHGYLDWKH5+56\\VWHPXQOHVV

IRUFHGIORZLVXVHG$PLQLPXPRIRQHUXQQLQJ5+5SXPSPHHWVWKH/&2

UHTXLUHPHQWIRURQHORRSLQRSHUDWLRQ$QDGGLWLRQDO5+5ORRSLVUHTXLUHG

WREH23(5$%/(WRPHHWVLQJOHIDLOXUHFRQVLGHUDWLRQV

1RWHSHUPLWVDOO5+5SXPSVWREHUHPRYHGIURPRSHUDWLRQIRU KRXU 

7KHFLUFXPVWDQFHVIRUVWRSSLQJERWK5+5SXPSVDUHWREHOLPLWHGWR

VLWXDWLRQVZKHQWKHRXWDJHWLPHLVVKRUWDQGFRUHRXWOHWWHPSHUDWXUHLV

PDLQWDLQHGDWOHDVW°)EHORZVDWXUDWLRQWHPSHUDWXUH7KH1RWHSURKLELWV

ERURQGLOXWLRQZLWKFRRODQWDWERURQFRQFHQWUDWLRQVOHVVWKDQUHTXLUHGWR

DVVXUHWKH6'0RI/&2LVPDLQWDLQHGRUGUDLQLQJRSHUDWLRQVZKHQ

5+5IRUFHGIORZLVVWRSSHG,QWURGXFWLRQRIUHDFWRUPDNHXSZDWHULQWRWKH

5&6IURPWKH&KHPLFDODQG9ROXPH&RQWURO6\\VWHPPL[LQJWHHLVQRW

SHUPLWWHGRSHUDWLRQRI&9&6UHVLQYHVVHOVFRQILJXUHGZLWKUHVLQIRU

GLOXWLRQGXULQJQRUPDORSHUDWLRQLVQRWSHUPLWWHGDQGRSHUDWLRQRIWKH

SXUJHOLQHDVVRFLDWHGZLWKIOXVKLQJWKH&9&6OHWGRZQUDGLDWLRQPRQLWRULV

QRWSHUPLWWHGZKHQQR5&6ORRSLVLQRSHUDWLRQ1RWHWKDW&9&6UHVLQ

YHVVHOVLQFOXGHWKHUHVLQYHVVHOVRILWVVXEV\\VWHPWKH%756

1RWHDOORZVRQH5+5ORRSWREHLQRSHUDEOHIRUDSHULRGRIKRXUV

SURYLGHGWKDWWKHRWKHUORRSLV23(5$%/(DQGLQRSHUDWLRQ7KLVSHUPLWV

SHULRGLFVXUYHLOODQFHWHVWVWREHSHUIRUPHGRQWKHLQRSHUDEOHORRSGXULQJ

WKHRQO\\WLPHZKHQWKHVHWHVWVDUHVDIHDQGSRVVLEOH

>,16(57@

$Q23(5$%/(5+5ORRSLVFRPSULVHGRIDQ23(5$%/(5+5SXPS

FDSDEOHRISURYLGLQJIRUFHGIORZWRDQ23(5$%/(5+5KHDWH[FKDQJHU

5+5SXPSVDUH23(5$%/(LIWKH\\DUHFDSDEOHRIEHLQJSRZHUHGDQGDUH

DEOHWRSURYLGHIORZLIUHTXLUHG

(OHFWULFDOSRZHUVRXUFHDQGGLVWULEXWLRQUHTXLUHPHQWVIRUWKH5+5ORRSV

DUHDVVSHFLILHGSHU/&2³$&6RXUFHV6KXWGRZQ'/&2

³'&6RXUFHV6KXWGRZQ'/&2³,QYHUWHUV6KXWGRZQ'DQG/&2

³'LVWULEXWLRQ6\\VWHPV6KXWGRZQ'FRQVLVWHQWZLWKWKH%DVHVIRU

WKRVH7HFKQLFDO6SHFLILFDWLRQVIRUUHGXFHGUHTXLUHPHQWVGXULQJVKXWGRZQ

FRQGLWLRQVVXEMHFWWRWKHSURYLVLRQVDQGOLPLWDWLRQVGHVFULEHGLQWKH

%DVHV

0DQDJHPHQWRIJDVYRLGVLVLPSRUWDQWWR5+56\\VWHP23(5$%,/,7<

7KH5+56\\VWHPLV23(5$%/(ZKHQLWLVVXIILFLHQWO\\ILOOHGZLWKZDWHUWR

SHUIRUPLWVVSHFLILHGVDIHW\\IXQFWLRQ

FRQWLQXHG

5&6/RRSV02'( /RRSV1RW)LOOHG

%

%$6(6 &RQWLQXHG

&$//$:$<3/$17

%

5HYLVLRQ

$33/,&$%,/,7<

,Q02'( ZLWKORRSVQRWILOOHGWKLV/&2UHTXLUHVFRUHKHDWUHPRYDODQG

FRRODQWFLUFXODWLRQE\\WKH5+56\\VWHP

2SHUDWLRQLQRWKHU02'(6LVFRYHUHGE\\

/&2 5&6/RRSV02'(6 DQG 

/&2 5&6/RRSV02'( 

/&2 5&6/RRSV02'( 

/&2 5&6/RRSV02'( /RRSV)LOOHG

/&2 5HVLGXDO+HDW5HPRYDO 5+5 DQG&RRODQW

&LUFXODWLRQ+LJK:DWHU/HYHO 02'(  DQG

/&2 5HVLGXDO+HDW5HPRYDO 5+5 DQG&RRODQW

&LUFXODWLRQ/RZ:DWHU/HYHO 02'(  

6LQFH/&2FRQWDLQV5HTXLUHG$FWLRQVZLWKLPPHGLDWH&RPSOHWLRQ

7LPHVLWLVQRWSHUPLWWHGWRHQWHU/&2IURPHLWKHU/&25&6

/RRSV+/-02'(/RRSV)LOOHGRUIURP02'(XQOHVVWKHUHTXLUHPHQWV

RI/&2DUHPHW

$&7,216

$

,IRQO\\RQH5+5ORRSLV23(5$%/(DQGLQRSHUDWLRQUHGXQGDQF\\IRU5+5

LVORVW$FWLRQPXVWEHLQLWLDWHGWRUHVWRUHDVHFRQGORRSWR23(5$%/(

VWDWXV7KHLPPHGLDWH&RPSOHWLRQ7LPHUHIOHFWVWKHLPSRUWDQFHRI

PDLQWDLQLQJWKHDYDLODELOLW\\RIWZRSDWKVIRUKHDWUHPRYDO

%DQG%

,IQRUHTXLUHG5+5ORRSVDUH23(5$%/(RULQRSHUDWLRQH[FHSWGXULQJ

FRQGLWLRQVSHUPLWWHGE\\1RWH DOORSHUDWLRQVLQYROYLQJLQWURGXFWLRQRI

FRRODQWLQWRWKH5&6ZLWKERURQFRQFHQWUDWLRQOHVVWKDQUHTXLUHGWRPHHW

WKHPLQLPXP6'0RI/&2PXVWEHVXVSHQGHGDQGDFWLRQPXVWEH

LQLWLDWHGLPPHGLDWHO\\WRUHVWRUHDQ5+5ORRSWR23(5$%/(VWDWXVDQG

RSHUDWLRQ%RURQGLOXWLRQUHTXLUHVIRUFHGFLUFXODWLRQIURPDWOHDVWRQH5&3

IRUSURSHUPL[LQJVRWKDWLQDGYHUWHQWFULWLFDOLW\\FDQEHSUHYHQWHG

6XVSHQGLQJWKHLQWURGXFWLRQRIFRRODQWLQWRWKH5&6ZLWKERURQ

FRQFHQWUDWLRQOHVVWKDQUHTXLUHGWRPHHWWKHPLQLPXP6'0RI/&2

LVUHTXLUHGWRDVVXUHFRQWLQXHGVDIHRSHUDWLRQ:LWKFRRODQWDGGHG

ZLWKRXWIRUFHGFLUFXODWLRQXQPL[HGFRRODQWFRXOGEHLQWURGXFHGWRWKH

FRUHKRZHYHUFRRODQWDGGHGZLWKERURQFRQFHQWUDWLRQPHHWLQJWKH

PLQLPXP6'0PDLQWDLQVDFFHSWDEOHPDUJLQWRVXEFULWLFDORSHUDWLRQV

,QWURGXFWLRQRIUHDFWRUPDNHXSZDWHULQWRWKH5&6IURPWKH&KHPLFDODQG

9ROXPH&RQWURO6\\VWHPPL[LQJWHHLVQRWSHUPLWWHGRSHUDWLRQRI&9&6

FRQWLQXHG

5&6/RRSV02'( /RRSV1RW)LOOHG

%

%$6(6

&$//$:$<3/$17

%

5HYLVLRQ

%DQG% FRQWLQXHG

UHVLQYHVVHOVFRQILJXUHGZLWKUHVLQIRUGLOXWLRQGXULQJQRUPDORSHUDWLRQLV

QRWSHUPLWWHGDQGRSHUDWLRQRIWKHSXUJHOLQHDVVRFLDWHGZLWKIOXVKLQJWKH

&9&6OHWGRZQUDGLDWLRQPRQLWRULVQRWSHUPLWWHGZKHQWKH5&6ORRSVDUH

QRWILOOHGRUZKHQQR5&6ORRSLVLQRSHUDWLRQFRQVLVWHQWZLWK5HTXLUHG

$FWLRQ&RI/&2³%RURQ'LOXWLRQ0LWLJDWLRQ6\\VWHP %'06 '7KH

LPPHGLDWH&RPSOHWLRQ7LPHUHIOHFWVWKHLPSRUWDQFHRIPDLQWDLQLQJ

RSHUDWLRQIRUKHDWUHPRYDO7KHDFWLRQWRUHVWRUHPXVWFRQWLQXHXQWLORQH

ORRSLVUHVWRUHGWR23(5$%/(VWDWXVDQGRSHUDWLRQ

6859(,//$1&(

5(48,5(0(176 65

7KLV65UHTXLUHVYHULILFDWLRQWKDWRQHORRSLVLQRSHUDWLRQ9HULILFDWLRQPD\\

LQFOXGHIORZUDWHWHPSHUDWXUHRUSXPSVWDWXVPRQLWRULQJZKLFKKHOS

HQVXUHWKDWIRUFHGIORZLVSURYLGLQJKHDWUHPRYDO7KH6XUYHLOODQFH

)UHTXHQF\\LVEDVHGRQRSHUDWLQJH[SHULHQFHHTXLSPHQWUHOLDELOLW\\DQG

SODQWULVNDQGLVFRQWUROOHGXQGHUWKH6XUYHLOODQFH)UHTXHQF\\&RQWURO

3URJUDP

65

9HULILFDWLRQWKDWDVHFRQG5+5SXPSLV23(5$%/(HQVXUHVWKDWDQ

DGGLWLRQDOSXPSFDQEHSODFHGLQRSHUDWLRQLIQHHGHGWRPDLQWDLQGHFD\\

KHDWUHPRYDODQGUHDFWRUFRRODQWFLUFXODWLRQ9HULILFDWLRQLVSHUIRUPHGE\\

YHULI\\LQJSURSHUEUHDNHUDOLJQPHQWDQGSRZHUDYDLODEOHWRWKH5+5SXPS

7KH6XUYHLOODQFH)UHTXHQF\\LVEDVHGRQRSHUDWLQJH[SHULHQFHHTXLSPHQW

UHOLDELOLW\\DQGSODQWULVNDQGLVFRQWUROOHGXQGHUWKH6XUYHLOODQFH

)UHTXHQF\\&RQWURO3URJUDP

65

5+56\\VWHPSLSLQJDQGFRPSRQHQWVKDYHWKHSRWHQWLDOWRGHYHORSYRLGV

DQGSRFNHWVRIHQWUDLQHGJDVHV3UHYHQWLQJDQGPDQDJLQJJDVLQWUXVLRQ

DQGDFFXPXODWLRQLVQHFHVVDU\\IRUSURSHURSHUDWLRQRIWKH5+5ORRSVDQG

PD\\DOVRSUHYHQWZDWHUKDPPHUSXPSFDYLWDWLRQDQGSXPSLQJRI

QRQFRQGHQVLEOHJDVLQWRWKHUHDFWRUYHVVHO

6HOHFWLRQRI5+56\\VWHPORFDWLRQVVXVFHSWLEOHWRJDVDFFXPXODWLRQLV

EDVHGRQDUHYLHZRIV\\VWHPGHVLJQLQIRUPDWLRQLQFOXGLQJSLSLQJDQG

LQVWUXPHQWDWLRQGUDZLQJVLVRPHWULFGUDZLQJVSODQDQGHOHYDWLRQ

GUDZLQJVDQGFDOFXODWLRQV7KHGHVLJQUHYLHZLVVXSSOHPHQWHGE\\V\\VWHP

ZDONGRZQVWRYDOLGDWHWKHV\\VWHPKLJKSRLQWVDQGWRFRQILUPWKHORFDWLRQ

FRQWLQXHG

$&7,216

5&6/RRSV02'( /RRSV1RW)LOOHG

%

%$6(6

&$//$:$<3/$17

%

5HYLVLRQ

65 FRQWLQXHG

DQGRULHQWDWLRQRILPSRUWDQWFRPSRQHQWVWKDWFDQEHFRPHVRXUFHVRIJDV

RUFRXOGRWKHUZLVHFDXVHJDVWREHWUDSSHGRUGLIILFXOWWRUHPRYHGXULQJ

V\\VWHPPDLQWHQDQFHRUUHVWRUDWLRQ6XVFHSWLEOHORFDWLRQVGHSHQGRQSODQW

DQGV\\VWHPFRQILJXUDWLRQVXFKDVVWDQGE\\YHUVXVRSHUDWLQJFRQGLWLRQV

7KH5+56\\VWHPLV23(5$%/(ZKHQLWLVVXIILFLHQWO\\ILOOHGZLWKZDWHU

$FFHSWDQFHFULWHULDDUHHVWDEOLVKHGIRUWKHYROXPHRIDFFXPXODWHGJDVDW

VXVFHSWLEOHORFDWLRQV,IDFFXPXODWHGJDVLVGLVFRYHUHGWKDWH[FHHGVWKH

DFFHSWDQFHFULWHULDIRUWKHVXVFHSWLEOHORFDWLRQ RUWKHYROXPHRI

DFFXPXODWHGJDVDWRQHRUPRUHVXVFHSWLEOHORFDWLRQVH[FHHGV

DFFHSWDQFHFULWHULDIRUJDVYROXPHDWWKHVXFWLRQRUGLVFKDUJHRIDSXPS 

WKH6XUYHLOODQFHLVQRWPHW,ILWLVGHWHUPLQHGE\\VXEVHTXHQWHYDOXDWLRQ

WKDWWKH5+56\\VWHPLVQRWUHQGHUHGLQRSHUDEOHE\\WKHDFFXPXODWHGJDV

LHWKHV\\VWHPLVVXIILFLHQWO\\ILOOHGZLWKZDWHU WKH6XUYHLOODQFHPD\\EH

GHFODUHGPHW$FFXPXODWHGJDVVKRXOGEHHOLPLQDWHGRUEURXJKWZLWKLQWKH

DFFHSWDQFHFULWHULDOLPLWV

5+56\\VWHPORFDWLRQVVXVFHSWLEOHWRJDVDFFXPXODWLRQDUHPRQLWRUHG

DQGLIJDVLVIRXQGWKHJDVYROXPHLVFRPSDUHGWRWKHDFFHSWDQFHFULWHULD

IRUWKHORFDWLRQ6XVFHSWLEOHORFDWLRQVLQWKHVDPHV\\VWHPIORZSDWKZKLFK

DUHVXEMHFWWRWKHVDPHJDVLQWUXVLRQPHFKDQLVPVPD\\EHYHULILHGE\\

PRQLWRULQJDUHSUHVHQWDWLYHVXEVHWRIVXVFHSWLEOHORFDWLRQV0RQLWRULQJ

PD\\QRWEHSUDFWLFDOIRUORFDWLRQVWKDWDUHLQDFFHVVLEOHGXHWRUDGLRORJLFDO

RUHQYLURQPHQWDOFRQGLWLRQVWKHSODQWFRQILJXUDWLRQRUSHUVRQQHOVDIHW\\

)RUWKHVHORFDWLRQVDOWHUQDWLYHPHWKRGV HJRSHUDWLQJSDUDPHWHUV

UHPRWHPRQLWRULQJ PD\\EHXVHGWRPRQLWRUWKHVXVFHSWLEOHORFDWLRQ

0RQLWRULQJLVQRWUHTXLUHGIRUVXVFHSWLEOHORFDWLRQVZKHUHWKHPD[LPXP

SRWHQWLDODFFXPXODWHGJDVYRLGYROXPHKDVEHHQHYDOXDWHGDQG

GHWHUPLQHGWRQRWFKDOOHQJHV\\VWHP23(5$%,/,7<7KHDFFXUDF\\RIWKH

PHWKRGXVHGIRUPRQLWRULQJWKHVXVFHSWLEOHORFDWLRQVDQGWUHQGLQJRIWKH

UHVXOWVVKRXOGEHVXIILFLHQWWRDVVXUHV\\VWHP23(5$%,/,7<GXULQJWKH

6XUYHLOODQFHLQWHUYDO

7KH6XUYHLOODQFH)UHTXHQF\\LVFRQWUROOHGXQGHUWKH6XUYHLOODQFH

)UHTXHQF\\&RQWURO3URJUDP7KH6XUYHLOODQFH)UHTXHQF\\PD\\YDU\\E\\

ORFDWLRQVXVFHSWLEOHWRJDVDFFXPXODWLRQ

5()(5(1&(6



)6$56HFWLRQ

6859(,//$1&(

5(48,5(0(176

&$//$:$<3/$17

%

5HYLVLRQ

&5$&6

%

%3/$176<67(06

%&RQWURO5RRP$LU&RQGLWLRQLQJ6\\VWHP &5$&6 

%$6(6

%$&.*5281'

7KH&5$&6SURYLGHVWHPSHUDWXUHFRQWUROIRUWKHFRQWUROURRP

7KH&5$&6FRQVLVWVRIWZRLQGHSHQGHQWDQGUHGXQGDQWWUDLQVWKDW

SURYLGHFRROLQJRIUHFLUFXODWHGFRQWUROURRPDLU(DFKWUDLQFRQVLVWVRID

SUHILOWHUVHOIFRQWDLQHGUHIULJHUDWLRQV\\VWHP XVLQJHVVHQWLDOVHUYLFHZDWHU

DVDKHDWVLQN FHQWULIXJDOIDQVLQVWUXPHQWDWLRQDQGFRQWUROVWRSURYLGH

IRUFRQWUROURRPWHPSHUDWXUHFRQWURO7KH&5$&6LVDVXEV\\VWHPWRWKH

&5(96GHVFULEHGLQ/&2SURYLGLQJDLUWHPSHUDWXUHFRQWUROIRU

WKHFRQWUROURRP

7KH&5$&6LVDQHPHUJHQF\\V\\VWHPZKLFKDOVRRSHUDWHVGXULQJQRUPDO

XQLWRSHUDWLRQV$VLQJOHWUDLQZLOOSURYLGHWKHUHTXLUHGWHPSHUDWXUH

FRQWUROWRPDLQWDLQWKHFRQWUROURRP°)7KH&5$&6RSHUDWLRQLQ

PDLQWDLQLQJWKHFRQWUROURRPWHPSHUDWXUHLVGLVFXVVHGLQWKH)6$5

6HFWLRQ 5HI 

$33/,&$%/(

6$)(7<

$1$/<6(6

7KHGHVLJQEDVLVRIWKH&5$&6LVWRPDLQWDLQWKHFRQWUROURRP

WHPSHUDWXUHIRU GD\\VRIFRQWLQXRXVRFFXSDQF\\

7KH&5$&6FRPSRQHQWVDUHDUUDQJHGLQUHGXQGDQWVDIHW\\UHODWHGWUDLQV

'XULQJQRUPDORUHPHUJHQF\\RSHUDWLRQVWKH&5$&6PDLQWDLQVWKH

WHPSHUDWXUH°)$VLQJOHDFWLYHIDLOXUHRIDFRPSRQHQWRIWKH&5$&6

ZLWKDORVVRIRIIVLWHSRZHUGRHVQRWLPSDLUWKHDELOLW\\RIWKHV\\VWHPWR

SHUIRUPLWVGHVLJQIXQFWLRQ5HGXQGDQWGHWHFWRUVDQGFRQWUROVDUH

SURYLGHGIRUFRQWUROURRPWHPSHUDWXUHFRQWURO7KH&5$&6LVGHVLJQHG

LQDFFRUGDQFHZLWK6HLVPLF&DWHJRU\\,UHTXLUHPHQWV7KH&5$&6LV

FDSDEOHRIUHPRYLQJVHQVLEOHDQGODWHQWKHDWORDGVIURPWKHFRQWUROURRP

ZKLFKLQFOXGHFRQVLGHUDWLRQRIHTXLSPHQWKHDWORDGVDQGSHUVRQQHO

RFFXSDQF\\UHTXLUHPHQWVWRHQVXUHHTXLSPHQW23(5$%,/,7<

7KH&5$&6VDWLVILHV&ULWHULRQ RI &)5  F  LL 

/&2

7ZRLQGHSHQGHQWDQGUHGXQGDQWWUDLQVRIWKH&5$&6DUHUHTXLUHGWREH

23(5$%/(WRHQVXUHWKDWDWOHDVWRQHLVDYDLODEOHDVVXPLQJDVLQJOH

IDLOXUHGLVDEOLQJWKHRWKHUWUDLQ7RWDOV\\VWHPIDLOXUHFRXOGUHVXOWLQWKH

HTXLSPHQWRSHUDWLQJWHPSHUDWXUHH[FHHGLQJOLPLWVLQWKHHYHQWRIDQ

DFFLGHQW

 FRQWLQXHG

&5$&6

%

%$6(6

&$//$:$<3/$17

%

5HYLVLRQ

7KH&5$&6LVFRQVLGHUHGWREH23(5$%/(ZKHQWKHLQGLYLGXDO

FRPSRQHQWVQHFHVVDU\\WRPDLQWDLQWKHFRQWUROURRPWHPSHUDWXUHDUH

23(5$%/(LQERWKWUDLQV7KHVHFRPSRQHQWVLQFOXGHWKHUHIULJHUDWLRQ

FRPSUHVVRUVKHDWH[FKDQJHUVFRROLQJFRLOVIDQVDQGDVVRFLDWHG

WHPSHUDWXUHFRQWUROLQVWUXPHQWDWLRQ,QDGGLWLRQWKH&5$&6PXVWEH

RSHUDEOHWRWKHH[WHQWWKDWDLUFLUFXODWLRQFDQEHPDLQWDLQHG,VRODWLRQRU

EUHDFKRIWKH&5$&6DLUIORZSDWKFDQDOVRUHQGHUWKH&5(96IORZSDWK

LQRSHUDEOH,QWKHVHVLWXDWLRQV/&2ZRXOGDOVREHDSSOLFDEOH

>,16(57@

$33/,&$%,/,7<

,Q02'(6 DQGDQGGXULQJPRYHPHQWRILUUDGLDWHGIXHO

DVVHPEOLHVWKH&5$&6PXVWEH23(5$%/(WRHQVXUHWKDWWKHFRQWURO

URRPWHPSHUDWXUHZLOOQRWH[FHHGHTXLSPHQWRSHUDWLRQDOUHTXLUHPHQWV

$&7,216

$

LWKRQH&5$&6WUDLQLQRSHUDEOHDFWLRQPXVWEHWDNHQWRUHVWRUH

23(5$%/(VWDWXVZLWKLQ GD\\V,QWKLV&RQGLWLRQWKHUHPDLQLQJ

23(5$%/(&5$&6WUDLQLVDGHTXDWHWRPDLQWDLQWKHFRQWUROURRP

WHPSHUDWXUHZLWKLQOLPLWV+RZHYHUWKHRYHUDOOUHOLDELOLW\\LVUHGXFHG

EHFDXVHDVLQJOHIDLOXUHLQWKH23(5$%/(&5$&6WUDLQFRXOGUHVXOWLQD

ORVVRI&5$&6IXQFWLRQ7KH GD\\&RPSOHWLRQ7LPHLVEDVHGRQWKH

ORZSUREDELOLW\\RIDQHYHQWUHTXLULQJFRQWUROURRPLVRODWLRQDQGWKH

FRQVLGHUDWLRQWKDWWKHUHPDLQLQJWUDLQFDQSURYLGHWKHUHTXLUHGSURWHFWLRQ

%DQG%

,Q02'( RU LIWKHLQRSHUDEOH&5$&6WUDLQFDQQRWEHUHVWRUHG

WR23(5$%/(VWDWXVZLWKLQWKHUHTXLUHG&RPSOHWLRQ7LPHWKHXQLWPXVW

EHSODFHGLQD02'(WKDWPLQLPL]HVWKHULVN7RDFKLHYHWKLVVWDWXVWKH

XQLWPXVWEHSODFHGLQDWOHDVW02'( ZLWKLQ KRXUVDQGLQ02'( 

ZLWKLQ KRXUV7KHDOORZHG&RPSOHWLRQ7LPHVDUHUHDVRQDEOHEDVHG

RQRSHUDWLQJH[SHULHQFHWRUHDFKWKHUHTXLUHGXQLWFRQGLWLRQVIURPIXOO

SRZHUFRQGLWLRQVLQDQRUGHUO\\PDQQHUDQGZLWKRXWFKDOOHQJLQJXQLW

V\\VWHPV

&&DQG&

,Q02'( RU RUGXULQJPRYHPHQWRILUUDGLDWHGIXHOLIWKHLQRSHUDEOH

&5$&6WUDLQFDQQRWEHUHVWRUHGWR23(5$%/(VWDWXVZLWKLQWKHUHTXLUHG

&RPSOHWLRQ7LPHWKH23(5$%/(&5$&6WUDLQPXVWEHSODFHGLQ

RSHUDWLRQLPPHGLDWHO\\7KLVDFWLRQHQVXUHVWKDWWKHUHPDLQLQJWUDLQLV

23(5$%/(WKDWQRIDLOXUHVSUHYHQWLQJDXWRPDWLFDFWXDWLRQZLOORFFXU

FRQWLQXHG

/&2

FRQWLQXHG

&5$&6

%

%$6(6

&$//$:$<3/$17

%

5HYLVLRQ

&&&DQG& FRQWLQXHG

DQGWKDWDFWLYHIDLOXUHVZLOOEHUHDGLO\\GHWHFWHG

$QDOWHUQDWLYHWR5HTXLUHG$FWLRQ &LVWRLPPHGLDWHO\\VXVSHQGDFWLYLWLHV

WKDWSUHVHQWDSRWHQWLDOIRUUHOHDVLQJUDGLRDFWLYLW\\WKDWPLJKWUHTXLUH

LVRODWLRQRIWKHFRQWUROURRP7KLVSODFHVWKHXQLWLQDFRQGLWLRQWKDW

PLQLPL]HVDFFLGHQWULVN7KLVGRHVQRWSUHFOXGHWKHPRYHPHQWRIIXHOWRD

VDIHSRVLWLRQ

'DQG'

,Q02'( RU RUGXULQJPRYHPHQWRILUUDGLDWHGIXHODVVHPEOLHVZLWK

WZR&5$&6WUDLQVLQRSHUDEOHDFWLRQPXVWEHWDNHQLPPHGLDWHO\\WR

VXVSHQGDFWLYLWLHVWKDWFRXOGUHVXOWLQDUHOHDVHRIUDGLRDFWLYLW\\WKDWPLJKW

UHTXLUHLVRODWLRQRIWKHFRQWUROURRP7KLVSODFHVWKHXQLWLQDFRQGLWLRQ

WKDWPLQLPL]HVULVN7KLVGRHVQRWSUHFOXGHWKHPRYHPHQWRIIXHOWRD

VDIHSRVLWLRQ

(

,IERWK&5$&6WUDLQVDUHLQRSHUDEOHLQ02'( RU WKH&5$&6

PD\\QRWEHFDSDEOHRISHUIRUPLQJLWVLQWHQGHGIXQFWLRQ7KHUHIRUH

/&2 PXVWEHHQWHUHGLPPHGLDWHO\\

6859(,//$1&(

5(48,5(0(176 65 

7KLV65YHULILHVWKDWWKHKHDWUHPRYDOFDSDELOLW\\RIWKH&5$&6DLU

FRQGLWLRQLQJXQLWVLVDGHTXDWHWRUHPRYHWKHKHDWORDGDVVXPHGLQWKH

FRQWUROURRPGXULQJGHVLJQEDVLVDFFLGHQWV7KLV65FRQVLVWVRIYHULI\\LQJ

WKHKHDWUHPRYDOFDSDELOLW\\RIWKHFRQGHQVHUKHDWH[FKDQJHU HLWKHU

WKURXJKSHUIRUPDQFHWHVWLQJRULQVSHFWLRQ HQVXULQJWKHSURSHURSHUDWLRQ

RIPDMRUFRPSRQHQWVLQWKHUHIULJHUDWLRQF\\FOHDQGYHULILFDWLRQRIXQLWDLU

IORZFDSDFLW\\7KH6XUYHLOODQFH)UHTXHQF\\LVEDVHGRQRSHUDWLQJ

H[SHULHQFHHTXLSPHQWUHOLDELOLW\\DQGSODQWULVNDQGLVFRQWUROOHGXQGHUWKH

6XUYHLOODQFH)UHTXHQF\\&RQWURO3URJUDP

5()(5(1&(6



)6$56HFWLRQ&RQWURO%XLOGLQJ+9$&

$&7,216

&$//$:$<3/$17

%

5HYLVLRQ

5+5DQG&RRODQW&LUFXODWLRQ/RZ:DWHU/HYHO

%

%5()8(/,1*23(5$7,216

%5HVLGXDO+HDW5HPRYDO 5+5 DQG&RRODQW&LUFXODWLRQ/RZ:DWHU/HYHO

%$6(6

%$&.*5281'

7KHSXUSRVHRIWKH5+56\\VWHPLQ02'(LVWRUHPRYHGHFD\\KHDWDQG

WKHVWRUHGWKHUPDOHQHUJ\\RIWKHUHDFWRUFRRODQWV\\VWHPDVUHTXLUHGE\\

  • '&WRSURYLGHPL[LQJRIERUDWHGFRRODQWDQGWRSUHYHQWERURQ

VWUDWLILFDWLRQ 5HI +HDWLVUHPRYHGIURPWKH5&6E\\FLUFXODWLQJUHDFWRU

FRRODQWWKURXJKWKH5+5KHDWH[FKDQJHUVZKHUHWKHKHDWLVWUDQVIHUUHGWR

WKH&RPSRQHQW&RROLQJ:DWHU6\\VWHP 7KHKHDWVLQNIRUWKH&RPSRQHQW

&RROLQJ:DWHU6\\VWHPLVLQWXUQQRUPDOO\\SURYLGHGE\\WKH6HUYLFH:DWHU

6\\VWHPRU(VVHQWLDO6HUYLFH:DWHU6\\VWHPDVGHWHUPLQHGE\\V\\VWHP

DYDLODELOLW\\ 7KHFRRODQWLVWKHQUHWXUQHGWRWKH5&6YLDWKH5&6FROG

OHJ V 2SHUDWLRQRIWKH5+56\\VWHPIRUQRUPDOFRROGRZQGHFD\\KHDW

UHPRYDOLVPDQXDOO\\DFFRPSOLVKHGIURPWKHFRQWUROURRP7KHKHDW

UHPRYDOUDWHLVDGMXVWHGE\\FRQWUROOLQJWKHIORZRIUHDFWRUFRRODQWWKURXJK

WKH5+5KHDWH[FKDQJHU V DQGWKHE\\SDVVOLQHV0L[LQJRIWKHUHDFWRU

FRRODQWLVPDLQWDLQHGE\\WKLVFRQWLQXRXVFLUFXODWLRQRIUHDFWRUFRRODQW

WKURXJKWKH5+56\\VWHP

$33/,&$%/(

6$)(7<

$1$/<6(6

,IWKHUHDFWRUFRRODQWWHPSHUDWXUHLVQRWPDLQWDLQHGEHORZo)ERLOLQJRI

WKHUHDFWRUFRRODQWFRXOGUHVXOW7KLVFRXOGOHDGWRDORVVRIFRRODQWLQWKH

UHDFWRUYHVVHO$GGLWLRQDOO\\ERLOLQJRIWKHUHDFWRUFRRODQWFRXOGOHDGWR

ERURQSODWLQJRXWRQFRPSRQHQWVQHDUWKHDUHDVRIWKHERLOLQJDFWLYLW\\7KH

ORVVRIUHDFWRUFRRODQWDQGWKHVXEVHTXHQWSODWHRXWRIERURQZLOO

HYHQWXDOO\\FKDOOHQJHWKHLQWHJULW\\RIWKHIXHOFODGGLQJZKLFKLVDILVVLRQ

SURGXFWEDUULHU7ZRWUDLQVRIWKH5+56\\VWHPDUHUHTXLUHGWREH

23(5$%/(DQGRQHWUDLQLQRSHUDWLRQLQRUGHUWRSUHYHQWWKLVFKDOOHQJH

7KH5+56\\VWHPLVUHWDLQHGDVD6SHFLILFDWLRQEHFDXVHLWPHHWV

&ULWHULRQ RI &)5  F  LL 

/&2

,Q02'( ZLWKWKHZDWHUOHYHO  IWDERYHWKHWRSRIWKHUHDFWRUYHVVHO

IODQJHERWK5+5ORRSVPXVWEH23(5$%/(

$GGLWLRQDOO\\RQHORRSRI5+5PXVWEHLQRSHUDWLRQLQRUGHUWRSURYLGH

D

5HPRYDORIGHFD\\KHDW

E

0L[LQJRIERUDWHGFRRODQWWRPLQLPL]HWKHSRVVLELOLW\\RIFULWLFDOLW\\

DQG

 FRQWLQXHG

5+5DQG&RRODQW&LUFXODWLRQ/RZ:DWHU/HYHO

%

%$6(6

&$//$:$<3/$17

%

5HYLVLRQ

F

,QGLFDWLRQRIUHDFWRUFRRODQWWHPSHUDWXUH

$Q23(5$%/(5+5ORRSFRQVLVWVRIDQ5+5SXPSDKHDWH[FKDQJHU

YDOYHVSLSLQJLQVWUXPHQWVDQGFRQWUROVWRHQVXUHDQ23(5$%/(IORZ

SDWKDQGWRGHWHUPLQHWKH5&6WHPSHUDWXUH7KHIORZSDWKVWDUWVLQRQHRI

WKH5&6KRWOHJVDQGLVUHWXUQHGWRWKH5&6FROGOHJV$Q23(5$%/(

5+5ORRSPXVWEHFDSDEOHRIEHLQJUHDOLJQHGWRSURYLGHDQ23(5$%/(

IORZSDWK,QDGGLWLRQPDQDJHPHQWRIJDVYRLGVLVLPSRUWDQWWR5+5

6\\VWHP23(5$%,/,7<7KH5+56\\VWHPLV23(5$%/(ZKHQLWLV

VXIILFLHQWOO\\ILOOHGZLWKZDWHUWRSHUIRUPLWVVSHFLILHGVDIHW\\IXQFWLRQ

>,16(57@

7KHVWDQGE\\5+5WUDLQPD\\EHDOLJQHGWRWKH5HIXHOLQJ:DWHU6WRUDJH

7DQNWRVXSSRUWILOOLQJRUGUDLQLQJWKHUHIXHOSRRORUIRUWKHSHUIRUPDQFHRI

UHTXLUHGWHVWLQJDVORQJDVWKHPRWRURSHUDWHGYDOYHV(-+9$DQG

(-+9$DUHPDLQWDLQHG23(5$%/(IRU7UDLQ$23(5$%,/,7<DQG

(-+9%DQG(-+9%DUHPDLQWDLQHG23(5$%/(IRU7UDLQ%

23(5$%,/,7<GXULQJUHIXHOSRROGUDLQLQJ7KHVHUHVSHFWLYHYDOYHVSOXV

(-+9PXVWEHPDLQWDLQHG23(5$%/(GXULQJUHIXHOSRROILOOLQJ7KH

VWDQGE\\5+5WUDLQPD\\EHFRQVLGHUHG23(5$%/(ZLWK%1 5+5

UHWXUQWR5:67 RSHQDVORQJDVLWFDQEHLVRODWHGE\\(-+9$RU%

DQG(-+9$RU%FDQEHRSHQHGWRUHDOLJQWKHSXPSGLVFKDUJHWRWKH

5&6FROGOHJV&DXWLRQPXVWEHH[HUFLVHGZKHQHYHU%1LVRSHQWR

HQVXUHWKHRSHUDWLQJ5+5WUDLQ V(-+9YDOYHLVPDLQWDLQHGFORVHG

7KLVLVWRSUHYHQWGUDLQLQJWKH5&6WRWKH5:676HH5HIHUHQFH

(OHFWULFDOSRZHUVRXUFHDQGGLVWULEXWLRQUHTXLUHPHQWVIRUWKH5+5ORRSV

DUHDVVSHFLILHGSHU/&2$&6RXUFHV+/-6KXWGRZQ/&2

'&6RXUFHV+/-6KXWGRZQ/&2,QYHUWHUV+/-6KXWGRZQDQG/&2

'LVWULEXWLRQ6\\VWHPV+/-6KXWGRZQFRQVLVWHQWZLWKWKH%DVHVIRU

WKRVH7HFKQLFDO6SHFLILFDWLRQVIRUUHGXFHGUHTXLUHPHQWVGXULQJVKXWGRZQ

FRQGLWLRQVVXEMHFWWRWKHSURYLVLRQVDQGOLPLWDWLRQVGHVFULEHGLQWKH

%DVHV

$33/,&$%,/,7<

7ZR5+5ORRSVDUHUHTXLUHGWREH23(5$%/(DQGRQH5+5ORRSPXVW

EHLQRSHUDWLRQLQ02'(ZLWKWKHZDWHUOHYHOIWDERYHWKHWRSRI

WKHUHDFWRUYHVVHOIODQJHWRSURYLGHGHFD\\KHDWUHPRYDO5HTXLUHPHQWV

IRUWKH5+56\\VWHPLQRWKHU02'(6DUHFRYHUHGE\\/&2VLQ6HFWLRQ

5HDFWRU&RRODQW6\\VWHP 5&6 DQG6HFWLRQ(PHUJHQF\\&RUH

&RROLQJ6\\VWHPV (&&6 5+5ORRSUHTXLUHPHQWVLQ02'(ZLWKWKH

ZDWHUOHYHOrIWDUHORFDWHGLQ/&25HVLGXDO+HDW5HPRYDO

5+5 DQG&RRODQW&LUFXODWLRQ+LJK:DWHU/HYHO$GGLWLRQDO5+5ORRS

UHTXLUHPHQWVLQ02'(ZLWKWKHZDWHUOHYHOrIHHWDERYHWKHWRSRI

WKHUHDFWRUYHVVHOIODQJHDUHORFDWHGLQ)6$5³)ORZ3DWK

6KXWGRZQ/LPLWLQJ&RQGLWLRQ)RU2SHUDWLRQ'

FRQWLQXHG

/&2

 FRQWLQXHG

5+5DQG&RRODQW&LUFXODWLRQ/RZ:DWHU/HYHO

%

%$6(6

&$//$:$<3/$17

%

5HYLVLRQ

6LQFH/&2FRQWDLQV5HTXLUHG$FWLRQVZLWKLPPHGLDWH&RPSOHWLRQ

7LPHVUHODWHGWRWKHUHVWRUDWLRQRIWKHGHJUDGHGGHFD\\KHDWUHPRYDO

IXQFWLRQLWLVQRWSHUPLWWHGWRHQWHUWKLV/&2IURPHLWKHU02'(RUIURP

/&25+5DQG&RRODQW&LUFXODWLRQ+LJK:DWHU/HYHOXQOHVVWKH

UHTXLUHPHQWVRI/&2DUHPHW

$&7,216

$DQG$

,IOHVVWKDQWKHUHTXLUHGQXPEHURI5+5ORRSVDUH23(5$%/(DFWLRQ

VKDOOEHLPPHGLDWHO\\LQLWLDWHGDQGFRQWLQXHGXQWLOWKH5+5ORRSLVUHVWRUHG

WR23(5$%/(VWDWXVDQGUHVWRUHGWRRSHUDWLRQLQDFFRUGDQFHZLWKWKH

/&2RUXQWLOrIWRIZDWHUOHYHOLVHVWDEOLVKHGDERYHWKHUHDFWRUYHVVHO

IODQJH:KHQWKHZDWHUOHYHOLVrIWDERYHWKHUHDFWRUYHVVHOIODQJH

WKH$SSOLFDELOLW\\FKDQJHVWRWKDWRI/&2DQGRQO\\RQH5+5ORRSLV

UHTXLUHGWREH23(5$%/(DQGLQRSHUDWLRQ$QLPPHGLDWH&RPSOHWLRQ

7LPHLVQHFHVVDU\\IRUDQRSHUDWRUWRLQLWLDWHFRUUHFWLYHDFWLRQV

%

,IQR5+5ORRSLVLQRSHUDWLRQWKHUHZLOOEHQRIRUFHGFLUFXODWLRQWR

SURYLGHPL[LQJWRHVWDEOLVKXQLIRUPERURQFRQFHQWUDWLRQV6XVSHQGLQJ

SRVLWLYHUHDFWLYLW\\DGGLWLRQVWKDWFRXOGUHVXOWLQIDLOXUHWRPHHWWKH

PLQLPXPERURQFRQFHQWUDWLRQOLPLWLVUHTXLUHGWRDVVXUHFRQWLQXHGVDIH

RSHUDWLRQ,QWURGXFWLRQRIFRRODQWLQYHQWRU\\PXVWEHIURPVRXUFHVWKDW

KDYHDERURQFRQFHQWUDWLRQJUHDWHUWKDQWKDWUHTXLUHGLQWKH5&6IRU

PLQLPXPUHIXHOLQJERURQFRQFHQWUDWLRQ7KLVPD\\UHVXOWLQDQRYHUDOO

UHGXFWLRQLQ5&6ERURQFRQFHQWUDWLRQEXWSURYLGHVDFFHSWDEOHPDUJLQWR

PDLQWDLQLQJDVXEFULWLFDORSHUDWLRQ$GPLQLVWUDWLYHFRQWUROVDUHSODFHGRQ

UHIXHOLQJGHFRQWDPLQDWLRQDFWLYLWLHV 6HH%DVHVIRU/&2 

%

,IQR5+5ORRSLVLQRSHUDWLRQDFWLRQVVKDOOEHLQLWLDWHGLPPHGLDWHO\\DQG

FRQWLQXHGWRUHVWRUHRQH5+5ORRSWRRSHUDWLRQ6LQFHWKHXQLWLVLQ

&RQGLWLRQV$DQG%FRQFXUUHQWO\\WKHUHVWRUDWLRQRIWZR23(5$%/(5+5

ORRSVDQGRQHRSHUDWLQJ5+5ORRSVKRXOGEHDFFRPSOLVKHGH[SHGLWLRXVO\\

FRQWLQXHG

$33/,&$%,/,7<

 FRQWLQXHG

5+5DQG&RRODQW&LUFXODWLRQ/RZ:DWHU/HYHO

%

%$6(6

&$//$:$<3/$17

%

5HYLVLRQ

%

,IQR5+5ORRSLVLQRSHUDWLRQDOOFRQWDLQPHQWSHQHWUDWLRQVSURYLGLQJ

GLUHFWDFFHVVIURPWKHFRQWDLQPHQWDWPRVSKHUHWRWKHRXWVLGH

DWPRVSKHUHPXVWEHFORVHGZLWKLQ KRXUV:LWKWKH5+5ORRS

UHTXLUHPHQWVQRWPHWWKHSRWHQWLDOH[LVWVIRUWKHFRRODQWWRERLODQG

UHOHDVHUDGLRDFWLYHJDVWRWKHFRQWDLQPHQWDWPRVSKHUH&ORVLQJ

FRQWDLQPHQWSHQHWUDWLRQVWKDWDUHRSHQWRWKHRXWVLGHDWPRVSKHUH

HQVXUHVWKDWGRVHOLPLWVDUHQRWH[FHHGHG

7KH&RPSOHWLRQ7LPHRI KRXUVLVUHDVRQDEOHDWZDWHUOHYHOVDERYH

UHGXFHGLQYHQWRU\\EDVHGRQWKHORZSUREDELOLW\\RIWKHFRRODQWERLOLQJLQ

WKDWWLPH$WUHGXFHGLQYHQWRU\\FRQGLWLRQVDGGLWLRQDODFWLRQVDUHWDNHQWR

SURYLGHFRQWDLQPHQWFORVXUHLQDUHGXFHGSHULRGRIWLPH 5HIHUHQFH  

5HGXFHGLQYHQWRU\\LVGHILQHGDV5&6OHYHOORZHUWKDQ IHHWEHORZWKH

UHDFWRUYHVVHOIODQJH

6859(,//$1&(

5(48,5(0(176 65 

7KLV6XUYHLOODQFHGHPRQVWUDWHVWKDWRQH5+5ORRSLVLQRSHUDWLRQDQG

FLUFXODWLQJUHDFWRUFRRODQW7KHIORZUDWHLVGHWHUPLQHGE\\WKHIORZUDWH

QHFHVVDU\\WRSURYLGHVXIILFLHQWGHFD\\KHDWUHPRYDOFDSDELOLW\\DQGWR

SUHYHQWWKHUPDODQGERURQVWUDWLILFDWLRQLQWKHFRUH7KH6XUYHLOODQFH

)UHTXHQF\\LVEDVHGRQRSHUDWLQJH[SHULHQFHHTXLSPHQWUHOLDELOLW\\DQG

SODQWULVNDQGLVFRQWUROOHGXQGHUWKH6XUYHLOODQFH)UHTXHQF\\&RQWURO

3URJUDP

65 

9HULILFDWLRQWKDWWKHUHTXLUHGSXPSLV23(5$%/(HQVXUHVWKDWDQ

DGGLWLRQDO5+5SXPSFDQEHSODFHGLQRSHUDWLRQLIQHHGHGWRPDLQWDLQ

GHFD\\KHDWUHPRYDODQGUHDFWRUFRRODQWFLUFXODWLRQ9HULILFDWLRQLV

SHUIRUPHGE\\YHULI\\LQJSURSHUEUHDNHUDOLJQPHQWDQGSRZHUDYDLODEOHWR

WKHUHTXLUHGSXPS7KH6XUYHLOODQFH)UHTXHQF\\LVEDVHGRQRSHUDWLQJ

H[SHULHQFHHTXLSPHQWUHOLDELOLW\\DQGSODQWULVNDQGLVFRQWUROOHGXQGHUWKH

6XUYHLOODQFH)UHTXHQF\\&RQWURO3URJUDP

65 

5+56\\VWHPSLSLQJDQGFRPSRQHQWVKDYHWKHSRWHQWLDOWRGHYHORSYRLGV

DQGSRFNHWVRIHQWUDLQHGJDVHV3UHYHQWLQJDQGPDQDJLQJJDVLQWUXVLRQ

DQGDFFXPXODWLRQLVQHFHVVDU\\IRUSURSHURSHUDWLRQRIWKH5+5ORRSVDQG

FRQWLQXHG

$&7,216

 FRQWLQXHG

5+5DQG&RRODQW&LUFXODWLRQ/RZ:DWHU/HYHO

%

%$6(6

&$//$:$<3/$17

%

5HYLVLRQ

65 FRQWLQXHG

PD\\DOVRSUHYHQWZDWHUKDPPHUSXPSFDYLWDWLRQDQGSXPSLQJRI

QRQFRQGHQVLEOHJDVLQWRWKHUHDFWRUYHVVHO

6HOHFWLRQRI5+56\\VWHPORFDWLRQVVXVFHSWLEOHWRJDVDFFXPXODWLRQLV

EDVHGRQDUHYLHZRIV\\VWHPGHVLJQLQIRUPDWLRQLQFOXGLQJSLSLQJDQG

LQVWUXPHQWDWLRQGUDZLQJVLVRPHWULFGUDZLQJVSODQDQGHOHYDWLRQ

GUDZLQJVDQGFDOFXODWLRQV7KHGHVLJQUHYLHZLVVXSSOHPHQWHGE\\V\\VWHP

ZDONGRZQVWRYDOLGDWHWKHV\\VWHPKLJKSRLQWVDQGWRFRQILUPWKHORFDWLRQ

DQGRULHQWDWLRQRILPSRUWDQWFRPSRQHQWVWKDWFDQEHFRPHVRXUFHVRIJDV

RUFRXOGRWKHUZLVHFDXVHJDVWREHWUDSSHGRUGLIILFXOWWRUHPRYHGXULQJ

V\\VWHPPDLQWHQDQFHRUUHVWRUDWLRQ6XVFHSWLEOHORFDWLRQVGHSHQGRQSODQW

DQGV\\VWHPFRQILJXUDWLRQVXFKDVVWDQGE\\YHUVXVRSHUDWLQJFRQGLWLRQV

7KH5+56\\VWHPLV23(5$%/(ZKHQLWLVVXIILFLHQWO\\ILOOHGZLWKZDWHU

$FFHSWDQFHFULWHULDDUHHVWDEOLVKHGIRUWKHYROXPHRIDFFXPXODWHGJDVDW

VXVFHSWLEOHORFDWLRQV,IDFFXPXODWHGJDVLVGLVFRYHUHGWKDWH[FHHGVWKH

DFFHSWDQFHFULWHULDIRUWKHVXVFHSWLEOHORFDWLRQ RUWKHYROXPHRI

DFFXPXODWHGJDVDWRQHRUPRUHVXVFHSWLEOHORFDWLRQVH[FHHGV

DFFHSWDQFHFULWHULDIRUJDVYROXPHDWWKHVXFWLRQRUGLVFKDUJHRIDSXPS 

WKH6XUYHLOODQFHLVQRWPHW,ILWLVGHWHUPLQHGE\\VXEVHTXHQWHYDOXDWLRQ

WKDWWKH5+56\\VWHPLVQRWUHQGHUHGLQRSHUDEOHE\\WKHDFFXPXODWHGJDV

LHWKHV\\VWHPLVVXIILFLHQWO\\ILOOHGZLWKZDWHU WKH6XUYHLOODQFHPD\\EH

GHFODUHGPHW$FFXPXODWHGJDVVKRXOGEHHOLPLQDWHGRUEURXJKWZLWKLQWKH

DFFHSWDQFHFULWHULDOLPLWV

5+56\\VWHPORFDWLRQVVXVFHSWLEOHWRJDVDFFXPXODWLRQDUHPRQLWRUHG

DQGLIJDVLVIRXQGWKHJDVYROXPHLVFRPSDUHGWRWKHDFFHSWDQFHFULWHULD

IRUWKHORFDWLRQ6XVFHSWLEOHORFDWLRQVLQWKHVDPHV\\VWHPIORZSDWKZKLFK

DUHVXEMHFWWRWKHVDPHJDVLQWUXVLRQPHFKDQLVPVPD\\EHYHULILHGE\\

PRQLWRULQJDUHSUHVHQWDWLYHVXEVHWRIVXVFHSWLEOHORFDWLRQV0RQLWRULQJ

PD\\QRWEHSUDFWLFDOIRUORFDWLRQVWKDWDUHLQDFFHVVLEOHGXHWRUDGLRORJLFDO

RUHQYLURQPHQWDOFRQGLWLRQVWKHSODQWFRQILJXUDWLRQRUSHUVRQQHOVDIHW\\

)RUWKHVHORFDWLRQVDOWHUQDWLYHPHWKRGV HJRSHUDWLQJSDUDPHWHUV

UHPRWHPRQLWRULQJ PD\\EHXVHGWRPRQLWRUWKHVXVFHSWLEOHORFDWLRQ

0RQLWRULQJLVQRWUHTXLUHGIRUVXVFHSWLEOHORFDWLRQVZKHUHWKHPD[LPXP

SRWHQWLDODFFXPXODWHGJDVYRLGYROXPHKDVEHHQHYDOXDWHGDQG

GHWHUPLQHGWRQRWFKDOOHQJHV\\VWHP23(5$%,/,7<7KHDFFXUDF\\RIWKH

PHWKRGXVHGIRUPRQLWRULQJWKHVXVFHSWLEOHORFDWLRQVDQGWUHQGLQJRIWKH

UHVXOWVVKRXOGEHVXIILFLHQWWRDVVXUHV\\VWHP23(5$%,/,7<GXULQJWKH

6XUYHLOODQFHLQWHUYDO

FRQWLQXHG

6859(,//$1&(

5(48,5(0(176

5+5DQG&RRODQW&LUFXODWLRQ/RZ:DWHU/HYHO

%

%$6(6

&$//$:$<3/$17

%

5HYLVLRQ

65 FRQWLQXHG

7KH6XUYHLOODQFH)UHTXHQF\\LVFRQWUROOHGXQGHUWKH6XUYHLOODQFH

)UHTXHQF\\&RQWURO3URJUDP7KH6XUYHLOODQFH)UHTXHQF\\PD\\YDU\\E\\

ORFDWLRQVXVFHSWLEOHWRJDVDFFXPXODWLRQ

5()(5(1&(6



)6$56HFWLRQ



  • HQHULF/HWWHU1R/RVVRI'HFD\\+HDW5HPRYDO



5)5$

6859(,//$1&(

5(48,5(0(176