NOC-AE-04001831, Additional Information Regarding the Sale of Ownership Interests in the South Texas Project

Additional Information Regarding the Sale of Ownership Interests in the South Texas Project

ML043620062
Person / Time
Site:	South Texas
Issue date:	12/22/2004
From:	Jordan T Southern Nuclear Operating Co
To:	Dyer J Office of Nuclear Reactor Regulation
References
NOC-AE-04001831, TAC MC4732, TAC MC4733, TAC MC4917, TAC MC4918
Download: ML043620062 (15)

Text

Nuclear Operating Company South Texs P/d Fiedrc Gen~niSngSbtion PO. Bor 289 Mdsovf thcs 77483A December 22, 2004 NOC-AE-04001831 10 CFR 50.80 10 CFR 50.90 U. S. Nuclear Regulatory Commission Attention: James E. Dyer Director, Office of Nuclear Reactor Regulation One White Flint North 11555 Rockville Pike Rockville, MD 20852 South Texas Project Units 1 and 2 Docket Nos. STN 50498 and STN 50499 Additional Information Regarding the Sale of Ownership Interests in the South Texas Proiect (TAC Nos. MC4917. MC4918. MC4732. MC4733)

Reference:

1. Letter, J. J. Sheppard to J. E. Dyer, "Additional Information Regarding the Sale of Ownership Interests in the South Texas Project," December 13, 2004 (NOC-AE-04001829)

2. Letter, J. J. Sheppard to J. E. Dyer, "Application for Order Approving Indirect Transfer of Control of Licenses," October 12, 2004 (NOC-AE-04001801)

During their review of Reference 1, the NRC staff requested a Projected Income Statement for Texas Genco, LP (Texas Genco) that includes specific line items reflecting the projected operation of a 30.8% undivided ownership interest in the South Texas Project (STP) for the period of 2005-2009. This letter provides the requested income statement as "Attachment 5C" to correspond with the attachment numbering in Reference 2.

Attachment SC (Proprietary) contains confidential commercial and financial information. Thus, it is requested that Attachment 5C (Proprietary) be withheld from public disclosure pursuant to 10 CFR 9.17(a)(4) and the policy reflected in 10 CFR 2.390 as described in the attached affidavits of David G. Tees and Jack A. Fusco. A non-proprietary 'version of this information suitable for public disclosure is provided as Attachment SC (Non-Proprietary).

There are no commitments in this letter.

Adzb STI: 31823047

NOC-AE-04001831 Page 2 of 9 If there are any questions regarding this additional information, please contact John Conly at (361) 972-7336 orme at (361) 972-8757. Service of any related filings should be made to: John E. Matthews at Morgan, Lewis and Bockius LLP, 1111 Pennsylvania Ave. N.W., Washington, DC 20004 (jmatthews@morganlewis.com) (tel: 202-739-5524) on behalf of STP Nuclear Operating Company; Stan Blanton, Balch & Bingham LLP, 1710 Sixth Avenue North, Birmingham, AL (sblanton@balch.com) (tel. 205-226-3417) on behalf of Texas Genco LLC; and Gerry Garfield, Day, Berry & Howard LLP, CityPlace I, 185 Asylum Street, Hartford, CT 06103, (ggarfield@dbh.com) (tel. 860-275-0182) for Texas Genco and CenterPoint Energy.

. ordan Vice President, Engineering & Technical Services jtc Attachments: SC (Proprietary) - Pro forma Balance Sheet, Projected Income and Cash Flow Statements, and Composition of Revenue Projections for Texas Genco Holdings, Inc. for the Period between the Closing of the Fossil Assets Acquisition and the Closing of the Nuclear Assets Acquisition - 30.8% Ownership Case SC (Non-Proprietary) - Pro forma Balance Sheet, Projected Income and Cash Flow Statements, and Composition of Revenue Projections for Texas Genco Holdings, Inc. for the Period between the Closing of the Fossil Assets Acquisition and the Closing of the Nuclear Assets Acquisition - 30.8% Ownership Case

NOC-AE-04001831 Page 3 of 9 cc: w/o proprietary attachments except **

(paper copy) (electronic copy)

Regional Administrator, Region IV A. H. Gutterman U.S. Nuclear Regulatory Commission J. E. Matthews 611 Ryan Plaza Drive, Suite 400 Morgan, Lewis & Bockius LLP Arlington, TX 76011-8064 James J. Nesrsta

• • U. S. Nuclear Regulatory Commission Robert K. Temple Attention: Document Control Desk City Public Service One White Flint North 11555 Rockville Pike R. L. Balcom Rockville, MD 20852 Texas Genco, LP Catherine L. Marco C. A. Johnson Steven R. Hom AEP Texas Central Company

• • Michael A. Dusaniwskyj U. S. Nuclear Regulatory Commission Jon C. Wood One White Flint North Cox Smith Matthews 11555 Rockville Pike Rockville, MD 20852 Chris Kirksey City of Austin Jeffrey Cruz U. S. Nuclear Regulatory Commission Jay E. Silberg P. 0. Box 289, Mail Code: MN116 Matias F. Travieso-Diaz Wadsworth, TX 77483 Shaw Pittman LLP Richard A. Ratliff David H. Jaffe Bureau of Radiation Control U. S. Nuclear Regulatory Commission Texas Department of State Health Services 1100 West 49th Street Rocky Miracle Austin, TX 78756-3189 AEP C. M. Canady Stan Blanton City of Austin Balch & Bingham Electric Utility Department 721 Barton Springs Road Rufus Scott Austin, TX 78704 Texas Genco, LP Gerry Garfield Day, Berry & Howard LLP

NOC-AE-04001 831 Page 4 of 9 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of )

)

STP Nuclear Operating Company ) Docket Nos. 50-498

) 50-499 South Texas Project Units 1 and 2 )

AFFIRMATION I, David G. Tees, being duly sworn, hereby depose and state that I am Manager and President of Texas Genco GP, LLC, which is the General Partner of Texas Genco, LP (Texas Genco), and as such exercises control over Texas Genco; that I am familiar with the content of the attached additional information regarding the sale of ownership interests in the South Texas Project; and that the matters set forth therein with regard to Texas Genco and its affiliates are true and correct to the best of my knowledge and belief.

David G. Tees Manager and President STATE OF TEXAS )

)

COUNTY OF HARRIS )

Subscribed and sworn to before me, a Notary Public in and for the State of Texas, this nick -"day of Deec elkt~e , 2004.

NOC-AE-04001831 Page 5 of 9 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of )

)

STP Nuclear Operating Company ) Docket Nos. 50-498

) 50-499 South Texas Project Units 1 and 2 )

AFFIRMATION I, Jack A. Fusco, being duly sworn, hereby depose and state that I am CEO of Texas Genco LLC; that I am familiar with the content of the attached additional information regarding the sale of ownership interests in the South Texas Project; and that the matters set forth therein with regard to Texas Genco LLC are true and correct to the best of my knowledge and belief.

HA. Fusco STATE OF TEXAS )

COUNTY OF 4Pe;5 )

Subscribed and sworn to me, a Notary Public, in and for the State of Texas, this H day of

__ __ _ _ ,2004.

Public in and for the State of Texas

NOC-AE-04001 831 Page 6 of 9 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of )

)

STP Nuclear Operating Company ) Docket Nos. 50-498

) 50-499 South Texas Project Units 1 and 2 )

AFFIDAVIT I, David G. Tees, Manager and President of Texas Genco GP, LLC, which is the General Partner of Texas Genco, LP, do hereby affirm and state:

I1. I am authorized to execute this affidavit on behalf of Texas Genco, LP.

2. Texas Genco, LP is providing additional information in support of its Application for Order Approving Indirect Transfer of Control of Licenses (STP Nuclear Operating Company letter NOC-AE-04001801). The proprietary version of Attachment 5C contains financial projections and proprietary business information related to the ownership and operation of Texas Genco, LP's generation assets, including the South Texas Project Electric Generating Station. This document constitutes proprietary commercial and financial information that should be held in confidence by the NRC pursuant to the policy reflected in 10 NRC §§ 2.390(a)(4) and 9.17(a)(4), because:

i. This information is and has been held in confidence by Texas Genco, LP.

ii. This information is of a type that is customarily held in confidence by Texas Genco, LP, and there is a rational basis for doing so because the information contains sensitive financial information concerning projected revenues and operating expenses of Texas Genco, LP.

iii. This information is being transmitted to the NRC voluntarily and in confidence.

iv. This information is not available in public sources and could not be gathered readily from other publicly available information.

NOC-AE-04001 831 Page 7 of 9

v. Public disclosure of this information would create substantial harm to the competitive position of Texas Genco, LP by disclosing to its competitors data related to internal business planning, including financial projections and proprietary business information.

Accordingly, Texas Genco, LP requests that the designated documents be withheld from public disclosure pursuant to the policy reflected in 10 CFR §§ 2.390(a)(4) and 9.17(a)(4).

David G. Tees STATE OF TEXAS )

)

COUNTY OF__________ )

Subscribed and sworn to me, a Notary Public, in and for the State of Texas, this ,'277' day of

?)c-ce' l rn ,2004.

~~Public

_ in an/d for the State of Texas M. HERNA.NDEZ

=LAURA

NOC-AE-0400 1831 Page 8 of 9 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of )

)

STP Nuclear Operating Company ) Docket Nos. 50-498

) 50-499 South Texas Project Units I and 2 )

AFFIDAVIT I, Jack A. Fusco, Chief Executive Officer of Texas Genco LLC, do hereby affirm and state:

I1. I am authorized to execute this affidavit on behalf of Texas Genco LLC.

2. Texas Genco LLC is providing additional information in support of its Application for Order Approving Indirect Transfer of Control of Licenses (STP Nuclear Operating Company letter NOC-AE-04001801). The proprietary version of Attachment SC contains financial projections and proprietary business information related to the ownership and operation of Texas Genco, LP's generation assets, including the South Texas Project Electric Generating Station. This document constitutes proprietary commercial and financial information that should be held in confidence by the NRC pursuant to the policy reflected in 10 NRC §§ 2.390(a)(4) and 9.17(a)(4), because:

i. This information is and has been held in confidence by Texas Genco LLC.

ii. This information is of a type that is customarily held in confidence by Texas Genco LLC, and there is a rational basis for doing so because the information contains sensitive financial information concerning projected revenues and operating expenses of Texas Genco LLC.

iii. This information is being transmitted to the NRC voluntarily and in confidence.

iv. This information is not available in public sources and could not be gathered readily from other publicly available information.

NOC-AE-0400 1831 Page 9 of 9

v. Public disclosure of this information would create substantial harm to the competitive position of Texas Genco LLC by disclosing to its competitors data related to internal business planning, including financial projections and proprietary business information.

Accordingly, Texas Genco LLC requests that the designated documents be withheld from public disclosure pursuant to the policy reflected in 10 CFR §§ 2.390(a)(4) and 9.17(a)(4).

Bilk A. Fusco STATE OF TEXAS )

COUNTYOF 4-rrt S )

Subscribed and sworn to me, a Notary Public, in and for the State of Texas, this 2DtA day of

_ _C__ _ , 2004.

Notary Public in and for the State of Texas

NOC-AE-04001 831 Attachment 5C (Proprietary)

Pro forma Balance Sheet, Projected Income and Cash Flow Statements, and Composition of Revenue Projections for Texas Genco Holdings, Inc. for the Period between the Closing of the Fossil Assets Acquisition and the Closing of the Nuclear Assets Acquisition - 30.8% Ownership Case

NOC-AE-04001 831 Attachment 5C (Non-Proprietary)

Pro forma Balance Sheet, Projected Income and Cash Flow Statements, and Composition of Revenue Projections for Texas Genco Holdings, Inc. for the Period between the Closing of the Fossil Assets Acquisition and the Closing of the Nuclear Assets Acquisition - 30.8% Ownership Case

Texas Genco NRC Application Pro Forma Balance Sheet, Texas Genco Holdings Inc. (Subsidiary of CcnterPolnt Energy) - 30.8% Interest (Millions)

As of ASSETS 30-Sep-04 Current Assets:

Cash & cash equivalents Accounts receivable Interest receivable Fuel stock Materials & supplies, at average cost Prepayments and other current assets Total current assets Electric Property, Plant & Equipment - at cost:

Electric plant in service (I)

Construction work in progress Total electric plant Accum prov for depreciation & amortization Total property, plan: & equipment - net Other Assets:

Nuclear decommissioning trust Unamortized debt costs Intangibles (I)

Total deferred debits Assets S CAPITALIZATION AND LIABILITIES Current Liabilities:

New revolving credit facility Accounts payable Net AR and AP - Associated Co.

Taxes and interest accrued Deferred revenue Current portion of above marekt coal supply contract Current portion of long-term non-trade de ivative Current portion of long-term debt Other Total current liabilities New senior term loan facility New senior delayed draw term loan New senior second-priority secured notes Total Long-term debt Accumulated deferred income taxes Unamortized investment tax credit Above market coal supply contract Capacity auction entitlements and other non-trade derivatives Benefit obligations Nuclear Decommissioning Reserve Accrued reclamation costs Other Total other liabilities Capitalization:

Equity Capitalization & Liabilities S (l) Allocation of purchase price subject to confirmation by valuation consultants

Texas Genco NRC Application Income Statement - Texas Genco Holdings Inc. (Subsidiary of Centerpoint Energy) (1) 30.8% Owncrship Case

('Afillions)

Fiscal Year Ending December 31 2005(2 2006 2007 2008 2009 Revenues Fuel and Purchased Power Gross Margin Operations & Maintenance General & Administrative Taxes Other than Income Taxes Nuclear Fuel Amortization Add-Back")

Other Income / (Expense)

EBITDA Depreciation & Amortization Nuclear Fuel Amortization EIBIT Interest Expense Interest Income EBT Tax Expense Net Income Notes:

(1) Pro Forma for ROFR acquisition (30.8% ownership in STP)

(2) Assumes STP acquisition closes 12/31/04 (3) Add-back is done strictly for presentation purposes (to show EBITDA); removed in line item below

Texas Genco NRC Application Cash Flow Statement - Texas Genco Holdings Inc. (Subsidiary of Centerpoint Energy) (1) 30.8% Ownership Case (AfillionsJ)

Fiscal Year Ending December 31 2005 "I 2006 2007 2008 2009 Cash Flows From Operating Activities Net Income Depreciation & Amortization Amortization of Fuel-Costs Deferred Taxes & ITC Change in Pension Liabilities Change in Working Capital Change in Other Assets & Liabilities Cash Flows From Operating Activities Capital Expenditures Mandatory Dcbt Repayment Free Cash Flow Notes:

(1) Pro Forma for ROFR acquisition (30.8% ownership in STP)

(2) Assumes STP acquisition closes 12/31/04

Texas Genco NRC Application Composition of Rcvenuc Projections - Texas Genco Holdings Inc. (Subsidiary of Centerpoint Energy) 30.8% Ownership Case Fiscal Year Ending December 31 2005") 2006 2007 2008 2009 Fixed Price Fonvard Sales MW Average Price ($/MWhr)

Revenue (MM)

Merchant Sales MW Gas Price Forecast for Merchant Sales Achieved Merchant Heat Rate South Zone (btulkW)

Average Price ($/MWhr)

Revenue (MM)

Total Sales MW Average Price ($/MWhr)

Revenue (MM)

Capacity MW Capacity Factor

% of Total Revenue Sold Fonvard Notes:

(1) Assumes STP acquisition closes December, 31 2004; assumes AEP ROFR closes on or before December 31, 2004.