NOC-AE-250041, Extension Request for Implementation of Order Approving Direct Transfer of Licenses
| ML25283A067 | |
| Person / Time | |
|---|---|
| Site: | South Texas, 07201041  |
| Issue date: | 10/10/2025 |
| From: | Kharrl C South Texas |
| To: | Office of Nuclear Reactor Regulation, Document Control Desk |
| References | |
| NOC-AE-25004130, 35794685 | |
| Download: ML25283A067 (1) | |
Text
October 10, 2025 NOC-AE-25004130 STI: 35794685 10 CFR 50.80 10 CFR 72.50 ATTN: Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 South Texas Project Units 1 and 2 Docket Nos. STN 50-498; STN 50-499; 72-1041 Renewed Facility Operating License Nos. NPF-76 and NPF-80 Extension Request for Implementation of Order Approving Direct Transfer of Licenses
References:
- 1. Letter; K. Harshaw (STP) to Document Control Desk (NRC); Application for Order Consenting to Direct Transfer of Licenses, July 31, 2024; (NOC-AE-24004051) (ML24213A084)
- 2. Letter; T. Byrd (NRC) to K. Harshaw (STP); Order Approving Direct Transfer of License, Renewed License Nos. NPF-76 and NPF-80, December 11, 2024 (AE-NOC-24003426) (ML24319A043)
- 3. Letter; S. Cornelius (STP) to Document Control Desk (NRC); Financial Assurance for Decommissioning - 2025 Update, March 26,2025; (NOC-AE-25004094) (ML25085A406)
By letter dated July 31, 2024 (Reference 1), STP Nuclear Operating Company (STPNOC),
acting on behalf of the City of San Antonio, Texas, acting by and through the City Public Service Board of San Antonio (CPS Energy), and Constellation South Texas, LLC (Constellation South Texas) (collectively, the Applicants), submitted an application requesting NRCs consent to the transfer of a 2% ownership interest in the South Texas Project, Units 1 and 2 (STP) and its generally licensed ISFSI between two of its existing ownersfrom Constellation South Texas to CPS Energy (the Application). On December 11, 2024, NRC issued an order approving the proposed direct transfer (the Order) (Reference 2). The Order provides that [s]hould the proposed transaction not be completed within 1 year of the date of this order, this order shall become null and void, provided, however, that upon written application to the Director of the Office of Nuclear Reactor Regulation and for good cause shown, such date may be extended by order.
NOC-AE-25004130 Page 2 of 3 Applicants respectfully request that the Order be extended for six months, until June 11, 2026, to allow additional time for the parties to complete the conditions to closing the underlying transaction. Specifically, the parties are still working to obtain a private letter ruling (PLR) or other binding guidance from the Internal Revenue Service (IRS) addressing the tax treatment of the nuclear decommissioning trust fundswhich are qualified funds under Section 468A of the Internal Revenue Codefollowing the transfer of funds from Constellation South Texas to CPS Energy described in the Application. Applicants have diligently worked with IRS to obtain the PLR or other guidance throughout the past year. While the parties hope to obtain a satisfactory result by the end of this calendar year, the schedule for issuance of the PLR or other guidance is outside Applicants control and may be impacted by IRS staffing, priorities, and the federal government shutdown. Accordingly, Applicants respectfully request an additional six months from the current December 11, 2025 expiration date of the Order to afford reasonable schedule margin in the event that issuance of the PLR or other guidance is further delayed.
This extension request does not change the scope of the initial Application, and there have been no material changes in the conditions upon which the NRC relied in issuing the Order and accompanying safety evaluation. The qualifications of the Applicants to consummate the transfer remain intact. STPNOC will continue to serve as licensed operator, and the requested transfer will not change STPNOCs technical qualifications to continue operating STP. CPS Energythe transferee of the additional 2% ownership interestis an electric utility with ratepayer collection authority to cover its share of both operating and decommissioning costs. On March 26, 2025, STPNOC filed the biennial decommissioning funding report on behalf of the STP owners, demonstrating the adequacy of decommissioning funding for STP as a whole and for each owner as of year-end 2024 (Reference 3). The passage of time and standard market fluctuations in the value of trust fund assets have not affected Applicants ability to meet NRCs financial assurance requirements following the transfer. There have been no changes in CPS Energys status as an electric utility or Constellation South Texass ability to transfer decommissioning funds to CPS Energy corresponding to the additional 2% ownership interest. Delays in issuance of the PLR reflect, in part, the complexity of the sale of the 2% ownership interest, including the associated transfer of decommissioning trust assets and related liabilities. The IRSs issuance of the requested PLR will not have any material adverse tax consequences on the value of the funds transferred to CPS Energy; indeed, the purpose of the PLR is to confirm that there will be no adverse tax consequences from the transfer. As such, current conditions continue to support NRC staffs findings regarding the financial qualifications of CPS Energy to receive the additional 2%
ownership interest.
Based upon the continued efforts of the Applicants to satisfy conditions to consummating the underlying transaction, there is good cause for NRC to extend the authorized implementation period for the direct transfer. Applicants respectfully request that NRC issue an order authorizing the requested 6-month extension by December 1, 2025.
NOC-AE-25004130 Page 3 of 3 There are no commitments in the letter. Consistent with the condition provided in the Order, Applicants will inform the Director of the Office of Nuclear Reactor Regulation in writing no later than 5 business days prior to the planned closing of the transaction.
Should you have any questions concerning the content of this letter, please contact Rachel Jackson at (361) 972-7077 or me at (361) 972-4778.
Charles Kharrl President, CEO, and CNO
Enclosure:
Affirmation of Larry D. Blaylock, II cc:
Regional Administrator, Region IV U.S. Nuclear Regulatory Commission 1600 E. Lamar Boulevard Arlington, TX 76011-4511 Cebkel
NOC-AE-25004130 Enclosure
[Affirmation of Larry D. Blaylock, II]
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of
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STP Nuclear Operating Company
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Docket Nos. STN 50-498
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STN 50-499 South Texas Project, Units 1 and 2
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72-1041 AFFIRMATION OF LARRY D. BLAYLOCK, II I, Larry D. Blaylock, II, do hereby declare under penalty of perjury under the laws of the United States of America that the following is true and correct: (1) I am the Managing Fellow Nuclear Oversight at the City of San Antonio, acting by and through the City Public Service Board of San Antonio (CPS Energy), (2) I am duly authorized to execute and file this certification on behalf of CPS Energy, and (3) the statements set forth in the Extension Request for Implementation of Order Approving Direct Transfer of Licenses to which this affirmation is attached regarding CPS Energy are true and correct to the best of my information, knowledge and belief.
CPS Energy By:
Larry D. Blaylock, II Date:
October 8, 2025