RS-09-007, Company, LLC, Application for Approval of Indirect Transfer of Control of Licenses

Company, LLC, Application for Approval of Indirect Transfer of Control of Licenses

ML090420400
Person / Time
Site:	Dresden, Peach Bottom, Salem, Oyster Creek, Byron, Three Mile Island, Braidwood, Limerick, Clinton, South Texas, Quad Cities, Zion, LaSalle
Issue date:	01/29/2009
From:	Crane C Exelon Corp, Exelon Generation Co, NRG Energy
To:	Document Control Desk, Office of Nuclear Reactor Regulation
Shared Package
ML090420411	List: RS-09-007, Company, LLC, Application for Approval of Indirect Transfer of Control of Licenses
References
RS-09-007
Download: ML090420400 (49)

Text

Exel n~

Christopher M. Crane Telephone 312.394.3600 President and COO Fax 312.394.2120 christopher.crane@exeloncorp.com Exelon Corporation 10 S. Dearborn Chicago, IL 60603 RS-09-007 10 CFR 50.80 January 29, 2009 U. S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, DC 20555-0001 .

Exelon Generation Company, LLC Braidwood Station, Units 1 and 2 Facility Operating License Nos. NPF-72 and NPF-77 NRC Docket Nos. 50-456 and 50-457 Byron Station, Units 1 and 2 Facility Operating License Nos. NPF-37 and NPF-66 NRC Docket Nos. 50-454 and 50-455 Clinton Power Station Facility Operating License No. NPF-62 NRC Docket No. 50-461 Dresden Nuclear Power Station, Units 1, 2 and 3 Facility Operating License No. DPR-2 Renewed Facility Operating License Nos. DPR-19 and DPR-25 NRC Docket Nos. 50-10. 50-237 and 50-249 LaSalle County Station, Units 1 and 2 Facility Operating License Nos. NPF-11 and NPF-18 NRC Docket Nos. 50-373 and 50-374 Limerick Generating Station, Units 1 and 2 Facility Operating License Nos. NPF-39 and NPF-85 NRC Docket Nos. 50-352 and 50-353 Oyster Creek Generating Station Facility Operating License No. DPR-16 NRC Docket No. 50-219 Peach Bottom Atomic Power Station, Units 1, 2 and 3 Facility Operating License No. DPR-12 Renewed Facility Operating License Nos. DPR-44 and DPR-56 NRC Docket Nos. 50-171. 50-277 and 50-278

u.s. Nuclear Regulatory Commission January 29, 2009 Page 2 Quad Cities Nuclear Power Station, Units 1 and 2 Renewed Facility Operating License Nos. DPR*29. and DPR-30 NRC Docket Nos. 50-254 and 50-265 Salem Generating Station, Units 1 and 2 Facility Operating License Nos. DPR-70 and DPR-75 NRC Docket Nos. 50-272 and 50-311 Three Mile Island Nuclear Station, Uni11 Facility Operating License No. DPR-50 NRC Docket No. 50-289 Zion Nuclear Power Station, Units 1 and 2 Facility Operating License Nos. DPR-39 and DPR-48 NRC Docket Nos. 50-295 and 50-304 NRG Energy, Inc.

South Texas Project, Units 1 and 2 Facility Operating License Nos. NPF-76 and NPF-80 NRC Docket Nos. 50-498 and 50*499

Subject:

Application for Approval of Indirect Transfer of Control of Licenses In accordance with Section 184 of the Atomic Energy Act of 1954, as amended (the Act), and 10 CFA 50.80, "Transfer of licenses," Exelon Corporation (Exelon), acting on behalf of itself, Exelon Xchange Corporation (Xchange Corp.), Exelon Ventures Company, LLC (Exelon Ventures), and Exelon Generation Comp~ny, LLC (Exelon Generation), (together, Applicants),

request that the NAC consent to the indirect transfer of control of the NRC licenses for NRG South Texas LP's (NAG South Texas) 44% ownership interest in South Texas Project, Units 1 .'

and 2 (STP), and to the extent required, the above Exelon Generation facilities.

In addition to NAG South Texas' 440/0 undivided ownership interest in STP, NRG holds a corresponding interest in STP Nuclear Operating Company (STPNOC), a not-for-profit Texas corporation, which is the licensed operator of STP. The indirect transfer of control of NRG South Texas also results in an indirect transfer of control of this interest in STPNOC. This is not a controlling interest in STPNOC, and therefore, there will be no indirect transfer of control of STPNOC's licenses to operate STP on behalf of the owners. If the NRC concludes that the indirect transfer of control of NRG South Texas' interests in STPNOC also requires prior NRC consent, such consent is requested.

As described in greater detail below, Exelon plans to acquire control of NRG South Texas' corporate parent NRG Energy, Inc. (NAG Energy) through a negotiated agreement or a tender offer. The indirect transfer of control of the 44% ownership interest in STP will result from this transaction. Exelon continues to believe that a negotiated agreement with NAG would provide significant benefits for the combined company and, therefore, Exelon will continue its efforts to

U.S. Nuclear Regulatory Commission January 29, 2009 Page 3 reach a negotiated agreement with NAG Energy. At the present, however, Exelon is pursuing a tender offer pursuant to which Exelon, through Xchange Corp., is offering to exchange 0.485 of a share of Exelon common stock for each share of NRG Energy common stock. As of January 6, 2009, the originally scheduled expiration date of the tender offer, approximately 46% of NRG Energy's shares of common stock had been tendered. Exelon has extended the expiration date of the tender offer to February 25, 2009. Exelon will keep the NRC apprised of the status of the tender offer.

If Exelon is successful in reaching a negotiated agreement with NRG Energy, Exelon could use alternative methods for structuring the transaction. For example, Exelon may pursue a structure whereby Exelon is merged into NRG Energy, with NRG Energy as the surviving corporation, and NAG Energy then being renamed as Exelon Corporation, followed by the election of existing Exelon directors and officers to corresponding positions in the new Exelon Corporation.

Exelon requests that the NRC approve the transaction, whether it is structured as currently contemplated in Exelon's tender offer or under the alternative structure described above if Exelon reaches a negotiated agreement with NRG Energy. Applicants do not consider that the combination of Exelon and NRG Energy under the negotiated structure described above will result in the indirect transfer of the Exelon Facilities because the result of the combination would be no different from the acquisition of NRG Energy via the tender offer. Under both the tender offer and the alternative structure, Exelon's shareholders would own approximately 83% of the combined company and all directors and officers who currently have management authority for Exelon will have the same management authority for the combined company. Moreover, the Exelon Facilities will continue to be held by Exelon Generation and the management and operations of the facilities will be unaffected. However, if the NRC concludes that the alternative structure described above results in the indirect transfer of the Exelon Facilities that requires prior NRC consent, such consent is requested.

Simplified organizational charts reflecting NRG Energy's and Exelon's current structure as well as the post-transaction alternative structures are provided as Figures 1, 2, 3C, and 4 in the attached Enclosure.

The proposed indirect transfer of control of STP will be consistent with the requirements set forth in the Act, NRC regulations, and the relevant NAC licenses and orders. The proposed indirect transfer of control will not result in any physical changes to STP and no changes in the officers, personnel, or day-to-day operation of STP are anticipated. The proposed indirect transfer of control will not involve any changes to the current licensing basis of STP. No license amendments are necessary or requested to accomplish this transaction. It will neither have an adverse impact on the public health and safety, nor be inimical to the common defense and security. This indirect transfer does not involve any ownership, control or domination by any foreign entity. The proposed indirect transfer of control will not resutt in any change in the role of STPNOC as the licensed operator of STP, and will not result in any changes to its technical qualifications. The foregoing is also true with regard to the post-transaction restructuring described below, or the alternative structure described above.

Information contained in this submittal related to NAG Energy's and NAG South Texas' business, operations and management, is based on public information, including NRG Energy's

U.S. Nuclear Regulatory Commission January 29,2009 Page 4 filings with the Securities and Exchan'ge Commission, materials pUblished by STPNOC, and various submittals to the NRC, and, to the Applicants' knowledge, is accurate.

Exelon reque,sts that the NRC review this application on a schedule that will permit the issuance of NRC consent to the indirect transfer of control by June 1, 2009. The proposed transaction will require approval by the Federal Energy RegUlatory Commission, as well as approvals from certain state regulators. Exelon will inform the NRC if there are any significant changes in the status of any other required regulatory approvals or any other developments that have an impact on the schedule.

After acquiring control of NRG Energy, whether pursuant to the tender offer or the alternative structure, Exelon is planning to undertake a corporate restructuring in order to establish a more efficient corporate structure for the combined company. This restructuring will include either the transfer of NAG Energy to another Exelon subsidiary or the merger of NRG Energy into a separate Exelon subsidiary, but will not involve any indirect or direct transfer of control of STP or the Exelon Facilities. However, if the NRC concludes that the restructuring described in the attachments does result in the indirect transfer of STP or the Exelon Generation nuclear stations that requires prior NRC consent, such consent is requested.

The application includes proprietary Attachments 3A, 4A, and 5A, which contain confidential commercial or financial information. Exelon requests that these Attachments be withheld from public disclosure pursuant to 10 CFR 2.39O(a)(4) and 10 CFR 9.17(a)(4), and as described in the attached Affidavit provided in Attachment 6 to the application. Non-proprietary versions of Attachments 3A, 4A, and 5A, suitable for public disclosure, are provided as Attachments 3, 4, and 5 to the application.

There are no regulatory commitments in this letter.

Service upon the Applicants of comments, hearing requests, intervention petitions, or other pleadings should be made to Counsel for Exelon Nuclear as follows: J. Bradley Fewell, Associate General Counsel, 4300 Winfield Road, Warrenville, IL 60555, (tel: 630-657-3769; fax:

630-657-4335; e-mail: Bradley.Fewell@exeloncorp.com); and M. Stanford Blanton, Balch &

Bingham LLP, 1710 Sixth Ave. North, Birmingham, AL 35203 (tel: 205-226-3417; fax: 205-488-5879; e-mail: sblanton@balch.com).

If any additional information is needed regarding this indirect license transfer request, please contact Kenneth A. Ainger, Director - New Plant Licensing, at (630) 657-3100.

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

/,1

~

291h day of January, 2009.

ve-1/~

hristoph M. Crane / '

President and Chief operatin~icer Exelon Corporation

u.s. Nuclear Regulatory Commission January 29, 2009 Page 5

Enclosure:

Application for Order App'roving Indirect Transfer of Control of Licenses cc: Regional Administrator - NRC Region I Regional Administrator - NRC Region III Regional Administrator - NRC Region IV NRC Project Manager, NRR - South Texas Project Units 1 and 2 NRC Senior Resident Inspector - South Texas Project Units 1 and 2 NRC Senior Resident Inspector - Braidwood Station, Units 1 and 2 NRC Senior Resident Inspector - Byron Station, Units 1 and 2 NRC Senior Resident Inspector - Clinton Power Station NRC Senior Resident Inspector - Dresden Nuclear Power Station, Units 1, 2 and 3 NRC Senior Resident Inspector - laSalle County Station, Units 1 and 2 NRC Senior Resident Inspector - Limerick Generating Station, Units 1 and 2 NRC Senior Resident Inspector - Oyster Creek Generating Station NRC Senior Resident Inspector - Peach Bottom Atomic Power Station, Units 1, 2 and 3 NRC Senior Resident Inspector - Quad Cities Nuclear Power Station, Units 1 and 2 NRC Senior Resident Inspector - Salem Generating Station, Units 1 and 2 NRC Senior Resident Inspector - Three Mile Island Nuclear Station, Unit 1

APPLICATION FOR ORDER APPROVING INDIRECT TRANSFER OF CONTROL OF LICENSES January 29, 2009 Exelon Generation Company. LLC Braidwood Station, Units 1 and 2 Facility Operating License Nos. NPF-72 and NPF-77 NRC Docket Nos. 50-456 and 50-457 Byron Station, Units 1 and 2 Facility Operating License Nos. NPF-37 and NPF-66 NRC Docket Nos. 50-454 and 50-455 Clinton Power Station Facility Operating License No. NPF-62 NRC Docket No. 50-461 Dresden Nuclear Power Station, Units 1, 2 and 3 Facility Operating License No. DPR-2 Renewed Facility Operating License Nos. DPR-19 and DPR-25 NRC Docket Nos. 50-10. 50-237 and 50-249 LaSalle County Station, Units 1 and 2 Facility Operating License Nos. NPF-11 and NPF-18 NRC Docket Nos. 50-373 and 50-374 Limerick Generating Station, Units 1 and 2 Facility Operating License Nos. NPF-39 and NPF-85 NRC Docket Nos. 50-352 and 50-353 Oyster Creek Generating Station Facility Operating License No. DPR-16 NRC Docket No. 50-219 Peach Bottom Atomic Power Station, Units 1, 2 and 3 Facility Operating License No. DPR-12 Renewed Facility Operating License Nos. DPR-44 and DPR-56 NRC Docket Nos. 50-171. 50-277 and 50-278

Quad Cities Nuclear Power Station, Units 1 and 2 Renewed Facility Operating License Nos. DPR-29 and DPR-30 NRC Docket Nos. 50-254 and 50-265 Salem Generating Station, Units 1 and 2 Facility Operating License Nos. DPR-70 and DPR-75 NRC Docket Nos. 50-272 and 50-311 Three Mile Island Nuclear Station, Unit 1 Facility Operating License No. DPR-50 NRC Docket No. 50-289 Zion Nuclear Power Station, Units 1 and 2 Facility Operating License Nos. DPR-39 and DPR-48 NRC Docket Nos. 50-295 and 50-304 NRG Energy. Inc.

South Texas Project, Units 1 and 2 Facility Operating License Nos. NPF-76 and NPF-80 NRC Docket Nos. 50-498 and 50-499

TABLE OF CONTENTS I. INTRODUCTION **.**.***..*****.**.*.*.******.*****.**********.*********....********..****.*.****.*..*****.*.**..************ 1 II. STATEMENT OF PURPOSE OF THE TRANSFERS AND NATURE OF THE TRANSACTION MAKING THE TRANSFERS NECESSARY OR DESIRABLE 1 A. Purpose of the Transfers 1 B. Transaction Description 2 C. Benefits of the Transaction 4 III. GENERAL CORPORATE INFORMATION REGARDING EXELON 5 A. Name 5 B. Address 5 C. Description of Business or Occupation 5 D. Organization and Management 6

1. States of Establishment and Place of Business 6

2. Directors and Executive Officers 6 IV. GENERAL CORPORATE INFORMATION REGARDING NRG ENERGY, INC 7 A. Name 7 B. Address 7 C. Description of Business or Occupation 7 D. Organization and Management 8

1. States of Establishment and Place of Business 8

2. Directors and Executive Officers 8 V. FOREIGN OWNERSHIP OR CONTROL 8 VI. TECHNICAL QUALIFICATIONS********..*.**.*****.*********..**.**..****.***..*************.****.*..*.**.****.**.** 9 VII. FINANCIAL QUALIFICATIONS *******.*.*****.**********************************.*******.**..**.**.*.**.*******..**.* 9 A. Projected Operating Revenues and Operating Costs 9 B. Decommissioning Funding Assurance 11 VIII. ANTITRUST INFORMATION ******..**.****.**.**********..*..*.****..*.*..*.****.****.****.*..******.**....****.**** 11 IX. RESTRICTED DATA AND CLASSIFIED NATIONAL SECURITY INFORMATION 11 X. ENVIRONMENTAL CONSIDERATIONS *.******..*.**********.***************.***********.**.*.**.**.**.****** 12

-i-

TABLE OF CONTENTS (CONTD)

XI. PRICE-ANDERSON INDEMNITY AND NUCLEAR INSURANCE 12 XII. EFFECTIVE DATE AND OTHER REQUIRED REGULATORY APPROVALS ************.** 12 XIII. CONCLUSION **************.*****.***..*************.***.************.******.***.************.*****************.************ 13 ATTACHMENTS Figure 1 Simplified Organizational Diagram (NRG Energy, Inc. - Current)

Figure 2 Simplified Organizational Diagram (Exelon Corporation - Current)

Figure 3A Simplified Proposed Transaction Illustration (Offer and Exchange)

Figure 3B Simplified Proposed Transaction Illustration (Second Step Merger)

Figure 3C Simplified Proposed Organizational Diagram (Post-Transaction)

Figure 4 Simplified Proposed Organizational Diagram (Negotiated Agreement)

Figure 5 Final Reorganization for Structure 1 Figure 6 Final Reorganization for Structure 2 Figure 7 Final Reorganization for Structure 3 Excerpt From Exelon 2007 Form 10-K Excerpt From NRG Energy 2007 Form 10-K Projected Income Statement for NRG South Texas LP (Non-Proprietary Version) A Projected Income Statements for NAG South Texas, LP (Proprietary" Version) Balance Sheet and Projected Income Statement for Exelon Generation Company, LLC (Non-Proprietary Version) A Balance Sheet and Projected Income Statement for Exelon Generation Company, LLC (Proprietary Version)

-ii-

TABLE OF CONTENTS (CONT'Dl Consolidated Balance Sheet and Projected Income Statement for Exelon Corporation and NRG Energy, Inc. (Non-Proprietary Version) A Consolidated Balance Sheet and Projected Income Statement for Exelon Corporation and NRG Energy, Inc. (Proprietary Version) Affidavit of Christopher M. Crane (10 CFR 2.390 and 10 CFR 9.17)

-iii-

I. INTRODUCTION In accordance with Section 184 of the Atomic Energy Act of 1954, as amended (the Act),

and 10 CFR 50.80, Transfer of licenses," Exelon Corporation (Exelon), acting on behalf of itself, Exelon Xchange Corporation (Xchange Corp.), Exelon Ventures Company, LLC (Exelon Ventures), and Exelon Generation Company, LLC (Exelon Generation),

requests that the NRC consent to the indirect transfer, from NRG South Texas LP (NRG South Texas) and its corporate parent NRG Energy, Inc. (NRG Energy), of control of the NRC licenses for NRG South Texas' 440/0 ownership interest in South Texas Project, Units 1 and 2 (STP), and to the extent required, the Exelon Facilities. 1 Note that there are two other entities with ownership interests in STP: The City Public Service Board of San Antonio, and The City of Austin, Texas. Their ownership interests remain unaffected by this indirect transfer of control of the STP licenses.

In addition to NRG South Texas' 440/0 undivided ownership interest in STP, NRG holds a corresponding interest in STP Nuclear Operating Company (STPNOC), a not-far-profit Texas corporation, which is the licensed operator of STP. The indirect transfer of control of NRG South Texas also results in an indirect transfer of control of this interest in STPNOC. This is not a controlling interest in STPNOC, and therefore, there will be no indirect transfer of control of STPNOC's licenses to operate STP on behalf of the owners. If the NRC concludes that the indirect transfer of control of NRG South Texas' interests in STPNOC also requires prior NRC consent, such consent is also requested.

II. STATEMENT OF PURPOSE OF THE TRANSFERS AND NATURE OF THE TRANSACTION MAKING THE TRANSFERS NECESSARY OR DESIRABLE A. Purpose of the Transfers The indirect transfer of control of STP results from Exelon's plan to acquire control of NRG Energy, throughthe acquisition of all outstanding shares of NRG Energy common stock by means of a negotiated agreement or a tender offer and subsequent merger. Simplified organizational charts reflecting NRG Energy and Exelon's current structure, as well as the post-transaction structure, are provided as Figures 1,2, 3C, and 4. After the completion of this transaction, Exelon is planning to undertake a corporate restructuring in order to streamline its organization and achieve certain business and other advantages. This restructuring will include either the transfer of NRG Energy to another Exelon subsidiary or the merger of NRG Energy with a separate Exelon subsidiary, but will not involve any indirect or direct transfer of control of STP or the Exelon Facilities. Final organizational charts reflecting the restructuring options contemplated by Exelon are provided as Figures 1 The "Exelon Facilities" include Braidwood Station, Units 1 and 2 (Docket Nos. 50-456 and 50-457); Byron Station, Units 1 and 2 (Docket Nos. 50-454 and 50-455); Peach Bottom Atomic Power Station, Units 2 and 3 (Docket Nos. 50-277 and 50-278); Limerick Generating Station, Units 1 and 2 (Docket Nos. 50-352 and 50-353);

Dresden Nuclear Power Station, Units 2 and 3 (Docket Nos. 50-237 and 50-249); Quad Cities Nuclear Power Station, Units 1 and 2 (Docket Nos. 50-254 and 50-265); LaSalle County Station, Units 1 and 2 (Docket Nos. 50-373 and 50-374); Clinton Power Station (Docket No. 50-461); Oyster Creek Nuclear Generating Station (Docket No. 50-219); and Three Mile Island Nuclear Station, Unit 1 (Docket No. 50-289). Exelon's nuclear fleet also includes four permanently shutdown units: Peach Bottom Atomic Power Station, Unit 1, Dresden Nuclear Power Station, Unit 1, and Zion Nuclear Power Station, Units 1 and 2 1

5,6, and 7. To the extent the NRC determines that this restructuring would result in the indirect transfers of control of STP or the Exelon Facilities, the Applicants request the NRC's consent to the same.

B. Transaction Description On October 19, 2008, Exelon delivered a letter to NRG Energy setting forth a proposal for a business combination of Exelon and NRG Energy. Under this proposal, Exelon would acquire all of the outstanding shares of NRG Energy common stock. On November 9, 2008, NRG Energy issued a press release stating that it was rejecting Exelon's proposed offer for a number of reasons. On November 12, 2008, Exelon launched a tender offer for NRG Energy's outstanding shares of common stock.

The tender offer is an offer made directly by Exelon, through Xchange Corp., to NRG Energy's stockholders to exchange 0.485 of a share of Exelon common stock for each share of NRG Energy common stock (with the effect of giving Exelon control of NRG Energy).2 The tender offer is the first step in Exelon's acquisition of NRG Energy and is intended to facilitate the acquisition of all shares of NRG Energy common stock. After Xchange Corp. acquires NRG Energy common stock pursuant to the tender offer, Exelon and Xchange Corp. will hold at least a majority of NRG Energy's common stock (see Figure 3A). As promptly as practicable after that exchange, Xchange Corp. (or another Exelon subsidiary) will merge with and into NRG Energy in order to acquire all shares of NRG Energy common stock not tendered and exchanged in the offer. Pursuant to the terms of this second-step merger, each remaining share of NRG Energy common stock (other than shares of NRG Energy common stock owned by Exelon, Xchange Corp., or NRG Energy or held by NRG Energy stockholders who perfect appraisal rights under Delaware law, to the extent available) would be converted into the right to receive the same number of shares of Exelon common stock as paid for each share of NRG Energy common stock in the tender offer. This second-step merger results in Exelon or a subsidiary of Exelon owning 1000/0 of the common stock of NRG Energy (see Figure 38). The surviving entity, NRG Energy, will be a direct or indirect, wholly-ow~ed subsidiary of Exelon. Exelon Ventures will be its affiliate, remaining a separate direct, wholly-owned subsidiary of Exelon (see Figure 3C).

After the second step merger, Exelon may cause NRG Energy to be merged into, or reorganized as, a separate Exelon subsidiary, if the offer to exchange and merger just described does not qualify as a tax-free reorganization within the meaning of section 368(a) of the Internal Revenue Code.

Exelon continues to believe that a negotiated agreement with NRG Energy would provide significant benefits for each company's shareholders and the combined company and, therefore, Exelon will continue its efforts to reach a negotiated agreement with NRG Energy. If Exelon is successful in reaching a negotiated 2

As of January 6, 2009, the originally scheduled expiration date of the tender offer, approximately 46% of NAG Energy's shares of common stock had been tendered. ExeJon has extended the expiration date of the tender offer to February 25, 2009. Exelon will keep the NAC apprised of the status of the tender offer.

2

agreement with NRG Energy, Exelon may decide not to acquire NRG Energy shares pursuant to the tender offer described herein, and instead could use alternative methods for structuring the transaction. For example, Exelon may pursue a structure whereby Exelon is merged into NAG Energy, with NAG Energy as the surviving corporation, and NAG Energy then being renamed as Exelon Corporation (see Figure 4), followed by the election of eXisting Exelon directors and officers to corresponding positions in the new Exelon Corporation. Such a structure would allow Exelon to reduce the amount of NAG Energy debt that must be refinanced in connection with the acquisition of NAG Energy by Exelon.

Aegardless of the ultimate form of the transaction, and the various steps required to effectuate the combination, the substance of the transaction that is material to the NAC Staff's review under 10 CFA 50.80 will be the same. Under any of the transaction mechanisms described herein, the end result will be Exelon's control of NAG Energy and its subsidiaries, including NAG South Texas. In particular, whether the combination of Exelon and NAG Energy occurs through a negotiated agreement or the tender offer, and regardless of which of the mechanisms described herein is used to consummate the transaction, NAG South Texas will remain the licensee of STP and will be financially qualified to hold its interest in STP and STPNOC will remain the licensed operator of STP and will remain technically qualified to operate STP. None of the transactions described above will alter the ownership of NAG South Texas by Texas Genco Holdings, Inc., through its 100% ownership of Texas Genco GP, LLC and Texas Genco LP, LLC. Likewise, Exelon Generation will remain financially and technically qualified to hold and operate the Exelon Facilities.

Applicants request that the NAC approve the transaction, whether it is structured as currently contemplated in Exelon's tender offer or under the alternative structure if Exelon reaches a negotiated agreement with NAG Energy. Applicants do not consider that the combination of Exelon and NAG Energy under the negotiated structure described above will result in the indirect transfer of the Exelon Facilities because the result of the combination would be no different from the acquisition of NAG Energy via the tender offer. Under both the tender offer and the alternative structure, Exelon's shareholders would own approximately 830/0 of the combined company and all directors and officers who currently have management authority for Exelon will have the same management authority for the combined company.

Moreover, the Exelon Facilities will continue to be held by Exelon Generation and the management and operations of the facilities will be unaffected. However, if the NAC concludes that the alternative structure described above results in the indirect transfer of the Exelon Facilities that requires prior NAC consent, such consent is requested.

After the completion of this tender offer transaction, Exelon is planning to undertake a corporate restructuring in order to establish a more efficient corporate structure for the combined company. This restructuring will include either the transfer of NAG Energy to another Exelon subsidiary or the merger of NAG Energy into a separate Exelon subsidiary and result in one of the structures described below.

3

1. Structure One After Exelon obtains control of NAG Energy through the tender offer and NAG Energy merges with Xchange Corp. (or another Exelon subsidiary), the surviving entity, NAG Energy, would be transferred internally to become a direct, wholly-owned subsidiary of Exelon Ventures. Exelon Generation would be the affiliate of NAG Energy, remaining a separate direct, wholly-owned subsidiary of Exelon Ventures (see Figure 5).

2. Structure Two After Exelon obtains control of NAG Energy through the tender offer and NRG Energy merges with Xchange Corp. (or another Exelon subsidiary), the surviving entity, NRG Energy, would be transferred internally to become a direct, wholly-owned subsidiary of Exelon Generation. Exelon Generation will remain a direct, wholly-owned subsidiary of Exelon Ventures (see Figure 6).

3. Structure Three After Exelon obtains control of NAG Energy through the tender offer and NAG Energy merges with Xchange Corp. (or another Exelon subsidiary), NAG Energy would merge with and into Exelon Generation. The surviving entity would be Exelon Generation, which would remain a direct, wholly-owned subsidiary of Exelon Ventures (see Figure 7). NRG Generation Holdings Inc. would be a direct, wholly-owned subsidiary of Exelon Generation, and Exelon Generation would retain NRG Energy's ownership interest in Texas Genco Holdings, Inc.

(see Figure 7).

In the event of a negotiated agreement involving the alternative structure of a merger of Exelon into NAG Energy, Exelon would undertake a corporate restructuring having the same practical effect as reflected in structures 1, 2, or 3 above.

After this restructuring (regardless of whether it results in Structure 1, 2, or 3), none of the licensees or their direct owners will change. Specifically, the ownership of NAG South Texas by Texas Genco Holdings, Inc., through its 1000/0 ownership of Texas Genco GP, LLC and Texas Genco LP, LLC, will not be altered by the restructuring. likewise, Exelon Generation, with the associated interests in the Exelon Facilities, will remain the same. Under all of the proposed structures, Exelon is the ultimate corporate parent. Accordingly, the Applicants do not consider that this restructuring would result in the indirect transfers of STP or the Exelon Facilities.

However, if the NAC concludes that this internal reorganization does result in the indirect transfer of STP and/or the Exelon FaCilities that requires prior NAC consent, such consent is requested.

C. Benefits of the Transaction The combined company of Exelon and NAG Energy would constitute the largest power company in the U.S. by assets, market capitalization, enterprise value, and generation capacity. The combined company will benefit from a broad portfolio of quality power generation assets and a broad geographic reach, with a significant 4

presence in all of the key competitive wholesale power markets in the United States.

The combined company would have a more highly diversified mix of generation capacity with a presence in four major domestic competitive power generation regions and a diversified fuel mix using uranium, natural gas, coal and oil. The combined company's approximately 51,000 MW fleet would include approximately 18,000 MW of nuclear generation. 3 This diversification will protect against changes that may adversely affect a particular region or type of generation. The acquisition will create a combined company with increased scale and scope in generation. The combined company is expected to have an enterprise value of approximately $60 billion and a market capitalization of $40 billion. Exelon anticipates that significant efficiencies of scale would be realized from the combination and that the combined company's assets, enterprise value and market capitalization will enable Exelon to pursue more multi-year, capital intensive projects than would be possible absent the acquisition of NRG Energy.

III. GENERAL CORPORATE INFORMATION REGARDING EXELON A. Name The following is the name of the corporate entity licensed by the NRC:

Exelon Generation Company, LLC The following are the names of the corporate entities that will directly or indirectly own the NRC licensed corporate entity:

Exelon Corporation Exelon Ventures Company, LLC The parent company relationship of the licensed corporate entity both before and after the indirect transfer of control is reflected in Figures 1, 2, 3C, and 4.

B. Address Exelon Corporation: 10 South

Dearborn Street,

Chicago, IL 60680-5379 Exelon Generation Company, LLC: 300 Exelon Way, Kennett Square, PA 19348

c. Description of Business or Occupation Exelon is one of the nation's largest energy companies with approximately $19 billion in annual revenues. Exelon distributes electricity to approximately 5.4 million customers in Illinois and Pennsylvania, and natural gas to approximately 480,000 customers in southeastern Pennsylvania. Exelon's operations include energy generation, power marketing and energy delivery. Exelon has one of the industry's largest portfolios of electricity generation capacity, with a nationwide reach and strong positions in the Midwest and Mid-Atlantic. Exelon operates the largest 3

The 51,000 MWs include owned and contracted capacity after giving effect to proposed divestitures of non-nuclear generating assets in connection with other regulatory approvals.

5

nuclear fleet in the United States.

Exelon, a utility services holding company, operates through its principal subsidiaries (Le., Exelon Generation, Commonwealth Edison Company (ComEd) and PECO Energy Company (PECO>> each of which is treated as an operating segment by Exelon. Exelon was incorporated in Pennsylvania in February 1999. Shares of Exelon common stock trade on the NYSE under the ticker symbol "EXC." The address of Exelon's website is http://www.exeloncorp.com.This website address is provided for convenience only and none of the information on this website is incorporated by reference into or otherwise deemed to be a part of this application.

D. Organization and Management

1. States of Establishment and Place of Business Exelon Corporation is a Pennsylvania corporation, and maintains its corporate offices in Chicago, Illinois.

2. Directors and Executive Officers The following individuals, all of whom are U.S. citizens (with the exception of Ian P. McLean who is a citizen of the United Kingdom), are the directors or executive officers of Exelon (unless otherwise noted):

John W. Rowe, Chairman and Chief Executive Officer, Director John A. Canning, Jr., Director M. Walter D'Alessio, Director Nicholas DeBenedictis, Director Admiral Bruce DeMars, Director JUdge Nelson A. Diaz, Director Sue Ling Gin, Director Rosemarie B. Greco, Director Paul L. Joskow, Ph.D., Director John M. Palms, Ph.D., Director William C. Richardson, Ph.D., Director Thomas J. Ridge, Director John W. Rogers, Jr., Director Stephen D. Steinour, Director Donald Thompson, Director Christopher M. Crane, President and Chief Operating Officer, Exelon Corporation Ruth Ann M. Gillis, Executive Vice President, Exelon Corporation Matthew F. Hilzinger, Senior Vice President and Chief Financial Officer, Exelon Corporation Ian P. McLean, Executive Vice President, Exelon Corporation Elizabeth A. Moler, Executive Vice President, Exelon Corporation Denis P. O'Brien, Executive Vice President, Exelon Corporation; President and CEO, PECO Energy William A. Von Hoene, Jr., Executive Vice President and General Counsel, Exelon Corporation 6

Andrea L. Zopp, Executive Vice President and Chief Human Resources Officer, Exelon Corporation Exelon anticipates that these individuals will hold the same positions after the transaction, regardless of the structure of the transaction.

IV. GENERAL CORPORATE INFORMATION REGARDING NRG ENERGY, INC.

A. Names The following are the names of the corporate entities licensed by the NRC:

STP Nuclear Operating Company (STPNOC)

NRG South Texas LP The following are the names of the corporate entities that will directly or indirectly own the NRC licensed corporate entity:

NRG Energy, Inc.

Texas Genco Holdings, Inc.

Texas Genco GP, LLC Texas Genco LP, LLC The parent company relationships of the licensed corporate entities both before and after the indirect transfer of control are reflected in Figures 1, 2, 3C, and 4.

B. Address NRG Energy: 211 Carnegie Center, Princeton, NJ 08540 NRG South Texas: 1301 McKinney, Suite 2300, Houston, TX 77010

c. Description of Business or Occupation NRG Energy 4 owns and operates a diverse portfolio of approximately 24,000 MW of power-generating facilities, primarily located in Texas and the Northeast, South Central, and Western regions of the United States and select international markets.

Its operations include baseload, intermediate, peaking, and cogeneration facilities, thermal energy production, and energy resource recovery facilities. NRG Energy also has ownership interests in generating facilities in Australia and Germany.

NRG Energy's common stock is listed on the NYSE under the ticker symbol "NRG."

The address of NRG Energy's website is http://www.nrgenergy.com.This website address is provided for convenience only and none of the information on this website is incorporated by reference into or otherwise deemed to be a part of this application.

4 Information related to NAG Energy's and NAG South Texas' business, operations and management is based on public information, including NAG Energy's SEC filings, materials published by STPNOC, and various submittals to the NAC, and, to the Applicants' knowledge, is accurate.

7

D. Organization and Management

1. States of Establishment and Place of Business NRG Energy is a Delaware corporation with its principal executive offices located in the State of New Jersey.

2. Directors and Executive Officers The following individuals, all of whom are U.S. citizens, are the directors and executive officers of NRG Energy:

Howard E. Cosgrove, Chairman John F. Chlebowski Jr., Director Lawrence S. Coben, Director David W. Crane, President and Chief Executive Officer, Director Stephen L. Cropper, Director William E. Hantke, Director Paul W. Hobby, Director Kathleen McGinty, Director Anne C. Schaumburg, Director Herbert H. Tate, Director Thomas H. Weidemeyer, Director Walter R. Young, Director Robert Flexon, Executive Vice President and Chief Operating Officer Kevin Howell, Executive Vice President, and Regional President, Texas Clint Freeland, Senior Vice President and Chief Financial Officer Denise Wilson, Chief Administrative Officer Jonathan Baliff, Executive Vice President, Strategy Michael Liebelson, Executive Vice President, Chief Development Officer, Low-Carbon Technology Drew Murphy, Executive Vice President and General Counsel John Ragan, Executive Vice President and Regional President, Northeast Jeffrey Baudier, Senior Vice President and Regional President, South Central Mauricio Gutierrez, Senior Vice President, Commercial Operations Steve Hoffman, Senior Vice President and Regional President, West James Ingoldsby, Vice President and Chief Accounting Officer Christopher Sotos, Vice President and Treasurer

v. FOREIGN OWNERSHIP OR CONTROL Exelon and NRG Energy are publicly traded companies. Their securities are widely held and traded on the New York Stock Exchange. Section 13(d) of the Securities Exchange Act of 1934, as amended, 15 U.S.C. 78m(d), requires that a person or entity that owns or controls more than 5°k of the securities of a company must file notice with the Securities and Exchange Commission (SEC). Based upon filings with the SEC, Exelon is not aware of any alien, foreign corporation, or foreign government that holds or may 8

hold more than 5% of the securities of Exelon or NRG Energy.s VI. TECHNICAL QUALIFICATIONS The technical qualifications of STPNOC will not be affected by the proposed indirect transfer of control. There will be no physical changes to STP and no changes are anticipated in the officers of STPNOC or the personnel and day-to-day operations of STP in connection with the indirect transfer of control. No changes to the management of maintenance of STP are anticipated as a result of this transaction.

In the case of the restructuring described above, the technical qualifications of the Exelon Facilities will not be affected. There will be no changes to the officers, personnel, or day-to-day operations of the Exelon Facilities and there will be no changes to the management or maintenance of the Exelon Facilities as a result of this restructuring.

VII. FINANCIAL QUALIFICATIONS A. Projected Operating Revenues and Operating Costs Financial information regarding Exelon is provided in its 2007 Annual Report (SEC Form 10-K) dated February 7,2008. The financial information regarding NRG Energy is provided in its 2007 Annual Report (SEC Form 10-K) dated February 28, 2008. Excerpts from these reports are presented in Attachments 1 and 2, respectively.

In accordance with 10 CFR 50.33, "Contents of applications; general information,"

paragraph (f)(2), the Applicants have prepared pro forma income statements for NRG South Texas for the five year calendar period January 1,2009 through December 31, 2013. These projections are provided in a separate proprietary addendum as Attachment 3A, which also includes two sensitivity analyses restating these projections with (1) an assumed 10% reduction in projected revenue from a 100/0 reduction in the assumed market price of energy, and (2) an assumed 100k reduction in projected revenue from a 10% reduction in the assumed capacity factor.

The Applicants request that Attachment 3A be withheld from public disclosure, as described in the Affidavit provided in Attachment 6. Redacted versions, suitable for public disclosure are provided as Attachment 3.

As explained in the Transaction Description,Section II, Exelon is currently pursuing an offer to exchange each share of NRG Energy common stock for 0.485 shares of Exelon common stock in order to obtain control of NRG Energy. As a result, NRG Energy has not joined Exelon in this license transfer application and, consequently, Exelon does not have access to proprietary financial information that could be used to create pro forma income statements for NRG South Texas. Accordingly, the 5 In its license transfer application submitted on May 3,2007, NAG Energy stated that Orbis Management ltd and Orbis Asset Management ltd (Orbis) (i.e., Bermuda companies with principal offices in Bermuda) filed a statement indicating that as of December 31, 2006, Orbis owned approximately 5.9% of NAG Energy's outstanding shares at that time. Orbis has amended this statement indicating that, as of December 31, 2007, it owned only 2.2% of NAG Energy's outstanding shares.

9

attached pro forma income statements for NRG South Texas are based on publicly available information as well as proprietary information developed by the Applicants (as further explained in the income statements). The projected income statements include projections for all costs expected to be incurred for NRG South Texas' 44%

share of STP. The projected income statements show that anticipated revenues from sales of capacity and energy provide reasonable assurance of an adequate source of funds to meet the ongoing operating and maintenance expenses for STP.

Finally, the existing support agreement that provides NRG South Texas with access to $120 million to pay fixed operating costs during an extended outage will remain in effect after the transaction. 6 In 2007, NRG Energy had operating revenues of approximately $6.0 billion, and operating income of more than $1.5 billion. Its balance sheet reflects assets of more than $19.0 billion, with net property, plant and equipment exceeding $11.0 billion.

NRG Energy's senior unsecured debt has a credit rating of "B1" from Moody's Investors Service and "B" from Standard & Poor's Corporation.

In the event the NRC determines that an indirect transfer of the Exelon Facilities would result from the post-transaction reorganization or a negotiated transaction as described above, the Applicants have also attached the financial information necessary to conduct the related financial qualifications review. Specifically, the Applicants have attached a balance sheet and pro forma income statements for Exelon Generation in a separate proprietary addendum as Attachment 4A, which also includes two sensitivity analyses restating these projections with (1) an assumed 100/0 reduction in projected revenue from a 100/0 reduction in the assumed market price of energy, and (2) an assumed 100/0 reduction in projected revenue from a 10% reduction in the assumed capacity factor; and consolidated pro forma income statements and balance sheet for Exelon and NRG Energy in a separate ,

proprietary addendum as Attachment SA. The Applicants request that Attachments 4A and SA be withheld from public disclosure, as described in the Affidavit provided in Attachment 6. Redacted versions, suitable for public disclosure are provided as Attachments 4 and 5.

In 2007, Exelon Generation had operating revenues exceeding $10.7 billion, and operating income of more than $3.3 billion. Its balance sheet reflects assets of more than $19 billion, with net property, plant and equipment exceeding $8 billion.

Moreover, Exelon Generation's senior unsecured debt has an "investment grade" credit rating of "A3" from Moody's Investors Service and "BBB" from Standard &

Poor's Corporation. These factors establish Exelon Generation's strong financial qualifications to own and operate the facilities to be transferred. This information and the attached financial statements show that anticipated revenues from sales of capacity and energy provide reasonable assurance of an adequate source of funds to meet the ongoing operating and maintenance expenses for the facilities.

6 See STPNOC Letter (Reference ML061110194) dated April 13, 2006; NRC Letter (Reference ML062220406) dated April 18, 2006; and NRC Letter (Reference ML062980024) dated.November 2, 2006.

10

B. Decommissioning Funding Assurance

1. South Texas Project, Units 1 and 2 The proposed indirect license transfer will not affect the present decommissioning funding assurance provided by NRG South Texas. The sources of decommissioning funding and the status of the decommissioning funds for STP will be unchanged as a result of the proposed indirect transfer of control. Financial assurance for decommissioning STP will continue to be provided by the external sinking fund method, in accordance with 10 CFR 50.75, "Reporting and recordkeeping for decommissioning planning," paragraph (e)(1 )(ii). NRG South Texas relies on Public Utility Commission of Texas approved collections from ratepayers (Le., separate non-bypassable decommissioning charges). The status of decommissioning funding for STP was shown in the most recent STPNOC decommissioning funding status report submitted to the NRC on March 27, 2007, and will be updated in a status report, as required by 10 CFR 50.75(f), to be submitted by NRG Energy by March 31, 2009.

2. Exelon Facilities If the NRC determines that the proposed post-transaction restructuring or a negotiated transaction as described herein constitutes an indirect transfer of the Exelon Facilities, the following addresses decommissioning funding assurance for those facilities. The sources of decommissioning funding and the status of the decommissioning funds for the Exelon facilities will be unchanged as a result of the proposed post-transaction restructuring. Financial assurance for decommissioning the Exelon Facilities is being provided by the prepayment method, external sinking fund method, or parent guarantee in combination with prepayment, in accordance with 10 CFR 50.75(e)(1)(i), (ii), or (vi). The status of decommissioning funding for the Exelon Facilities was shown in the most recent Exelon Generation/AmerGen Energy Company, LLC decommissioning funding

, status reports submitted to the NRC on March 21, 2007 and March 28, 2008 and will be updated in a status report, as required by 10 CFR 50.75(f), to be submitted by March 31 , 2009.

VIII. ANTITRUST INFORMATION This application post-dates the issuance of the operating licenses, and therefore no antitrust review is required or authorized. Based upon the NRC's decision in Kansas Gas and Electric Co., et. al. (Wolf Creek Generating Station, Unit 1), CLI-99-19, 49 NRC 441 (1999), the Atomic Energy Act of 1954, as amended, does not require or authorize antitrust reviews of post-operating license transfer applications.

IX. RESTRICTED DATA AND CLASSIFIED NATIONAL SECURITY INFORMATION Neither the proposed transfer of STP nor the post-transaction restructuring contain any Restricted Data or other Classified National Security Information or result in any change 11

in access to such Restricted Data or Classified National Security Information. The existing restrictions on access to Restricted Data and Classified National Security Information are unaffected by the proposed transfer and restructuring. In compliance with Section 145(a) of the Act, the Applicants agree that restricted or classified defense information will not be provided to any individual until the Office of Personnel Management investigates and reports to the NRC on the character, associations, and loyalty of such individual, and the NRC determines that permitting such person to have access to Restricted Data will not endanger the common defense and security of the United States.

X. ENVIRONMENTAL CONSIDERATIONS The requested consent to indirect transfer of control of the STP licenses is exempt from environmental review because it falls within the categorical exclusion contained in 10 CFR 51.22(c)(21), for which neither an Environmental Assessment nor an Environmental Impact Statement is required. Moreover, the proposed indirect transfer does not involve any amendment to the facility operating licenses or other change, and it will not directly affect the actual operation of STP in any substantive way. The proposed transfer does not involve an increase in the amounts, or a change in the types, of any radiological effluents that may be allowed to be released off-site, and involves no increase in the amounts or change in the types of non-radiological effluents that may be released off-site. Further, there is no increase in the individual or cumulative operational radiation exposure, and the proposed indirect transfer has no environmental impact. The foregoing is also true with regard to the post-transaction restructuring, or the negotiated agreement structure, described above.

XI. PRICE-ANDERSON INDEMNITY AND NUCLEAR INSURANCE Neither the proposed indirect transfer of control of STP nor the post-transaction restructuring will affect the existing Price-Anderson indemnity agreement for STP and the Exelon Facilities, and does not affect the required nuclear property damage insurance pursuant to 10 CFR 50.54, "Conditions of licenses," paragraph (w) and nuclear energy liability insurance pursuant to Section 170 of the Act and 10 CFR Part 140, "Financial Protection Requirements and Indemnity Agreements."

XII. EFFECTIVE DATE AND OTHER REQUIRED flEGULATORY APPROVALS The tender offer described in Section II of this Application is subject to a number of conditions, including a condition that at least a majority of the shares of NRG Energy common stock must be tendered and not withdrawn at the time the offer expires and a condition that all necessary regulatory approvals have been obtained. These include, in addition to the NRC, the California Public Utilities Commission, the Pennsylvania Public Utility Commission, the Public Utility Commission of Texas, the New York Public Service Commission and the Federal Energy Regulatory Commission. In addition, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the acquisition of shares of NRG Energy common stock pursuant to the tender offer cannot be completed until Exelon has made required notifications and given certain information to the Federal Trade Commission and/or the Department of Justice and until specified waiting period 12

requirements have expired. To facilitate implementation of the proposed indirect transfer of control described herein, Applicants are requesting NRC approval of such indirect transfer by June 1, 2009, to be effective immediately upon issuance. Consistent with past practice, Applicants request the approval to permit subsequent execution of the transaction and restructuring within a succeeding 12-month period.

XIII. CONCLUSION Based upon the foregoing information, Exelon requests, on behalf of the Applicants, that the NRC issue an Order consenting to the indirect transfer of control of STP, and, to the extent required, the Exelon Facilities.

13

Figure 1: Simplified Organizational Diagram (NRG Energy, Inc. - Current)

NRG Energy, Inc.

(DE)

, I NRG Generation Holdings Inc.

Voting Stock (100%)

(DE)

Non-Voting (19.77%)

r Texas Genco Holdings, Inc. Non-Voting (80.23%)

(TX)

Texas Genco GP, LLC Texas Genco LP, LLC (TX) - (DE) 1 NRG South Texas LP (TX) 144%

STP Units 1 & 2

Figure 2: Simplified Organizational Diagram (Exelon Corporation - Current)

Exelon Corporation (PA)

I Exelon Ventures Exelon Xchange Corporation Company, LLC

• Exelon Generation Company, LLC I I I Quad I I I I 1 Br,raidwood Peach Limerick Dresden Salem Three Mile Oyster Cities Bottom Clinton 1&2 1&2 2&3 1&2 Island-l Creek 1&2 2&3 75% 50% 42.59%

• Exelon's nuclear fleet also includes four shutdown units: Peach Bottom 1, Dresden 1, and Zion 1 and 2.

Figure 3A: Simplified Proposed Transaction lliustration (Offer and Exchange)

NRG Energy, Inc. Exelon Corporation t-,

(DE)

XCHANGE"'" I (PA)

ACQUIRES > 50%"'~ I CONTROL Exelon Xchange Corporation Exelon Ventures Company, LLC G Generation Holdings Inc.

(DE)

• Exelon Generation Company, LLC Texas Genco Holdings, Inc.

(TX) J Texas Genco GP, LLC Texas Genco LP, LLC (TX) (DE)

NRG South Texas LP (TX) 44%

STP Units 1 & 2 Brai~ I I LaS~e I ~B ~srer I

Peach B;on Bottom 1&2 Clmton 1&2 1&2 1&2 Creek 2&3 50% 42.59%

• Exelon's nuclear fleet also includes four shutdown units: Peach Bottom 1, Dresden 1, and Zion 1 and 2.

Figure 3B: Simplified Proposed Transaction IDustration (Second Step Merger)

Exelon Corporation (PA)

NRG Energy, Inc.

MERGER Exelon Xchange I

~--------------------------.

Exelon Ventures (DE) Corporation Company, LLC (DE)

G Generation I

Holdings Inc.

• Exelon Generation Company, LLC (DE)

---

..I Texas Genco Holdings, Inc.

(TX) I Texas Genco GP, LLC I

Texas Genco LP, LLC (TX) (DE)

I NRG South Texas LP (TX) 44%

STP Units 1 & 2

~-R I ~e I

Braidwood 1&2 II BLn 1&2 I Salem 1&2 Clinton Three Oyster Creek Island-l 42.59%

• Exelon's nuclear fleet also includes four shutdown units: Peach Bottom 1, Dresden 1, and Zion 1 and 2.

Figure 3C: Simplified Proposed Organizational Diagram (post-Transaction)

Exelon Corporation (PA)

Exelon Ventures NRG Energy, Inc.

Company, LLC NRG Generation Holdings Inc.

• Exelon Generation (DE) Company, LLC I

I Texas Genco Holdings, Inc.

(TX)

I I

Texas Genco GP, LLC Texas Genco LP, LLC (TX) (DE)

I NRG South Texas LP (TX) 44%

STP Units I & 2 BrmSIl Bln I 1:

00d 1&2 Peach Bottom 2&3 50%

~B 1&2 42.59%

Clinton Three Mile Island-l

~ster Creek

• Exelon's nuclear fleet also includes four shutdown units: Peach Bottom 1, Dresden 1, and Zion 1 and 2.

Figure 4: SiIqjitied Proparl ~ 1lagram(Negotiated AgreemU)

---

-------------~

Fxdm C1IJrntim(ftnredy kJIMna<>!IOO 1'm'&Y. Ja

.)  :

(2) NRG 1'm'&Y, In;. ~, ~

changes Its mrre I

(3) Exelm Veaures, toF.xelmCapnltim* 1  :(3) :  : NRG<£reratimlli~

---

.:. . .- - - - : : I : aWTexasGn:olli~

q ~ J ExelmC1IJrntim are~~

I , mGl'm'&Y,Ja:.

, (IE) I.;.-

-e.. - - - - - -

---

I..-----r------(IE).

et ~ SWVlvmg ca:qmy.

(1) F.xelm Cap. Imges into NRCCere.mtimlli~ In;. NRC1'm'&Y, In;. \\ithNRG (IE) I'm'&Y reing de surviving F.xelm Veuures aI}Xl'3tim Cmpmy,IlC I I Te=G=J~Ja:.

(IX) 1 I

• • ExelmCere.mtim Cmpmy,IlC Texas GnxlGP, IlC Texas CbmLP, I1..C (1X) (IE)

NRG&uhTexasLP (1X)

~lli~l:: I~~~~S~-~-~-~=~§r2 I

1&2xxii 1&2 1&2 1&2 2&3 Olies 1&2 Bcttm1 2&3 1&2 ~ MIe IsIaIrl-l I~

75% :xl% 425'JOkJ

• ~ directcrs aW exeaii\e officers et&elmCapnltim \\ill re elOC1frl tocmesp:o:ting pNtims ci de surviving cwpmy.

& a lOOt, de directcrs am dficers \\h> rorrently w\e ~ autInity fa F.xelm Q:qxratim \\ill W\e de sarre ImmgeIImt autluity fa ~ cmbnmcmpm.y.

• • &elm's II£lear fleet also in:l~ fwr slU:OOwn units: Rail Bcttcm 1, IAescm 1, an:lam 1an:l2

Figure 5: Final Reorganization for Structure 1 Exelm Capmltim (PA)

I Exelm Ventures Conpmy, ll.C

...--- 1

---

1 11.---_--.

I NRG~gy, Inc. * &elm Gereratim Conpmy, I1..C I

NRG Gereratioo Holdings Inc.

(DE)

I I Texasilim~Ioc I Texas Chlco GP, I1..C Texas Chlco IP, ll.C (IX) (DE)

NRG So.1th Texas IP (1X) 44%

SIP Units 1 & 2 1 1 I I I I I I I I BraidW<XXl Byrm lASalle liIrerick Dresden Ql3d Peoch Salem Three Gties Bcttom Ointm Mle Oyster 1&2 1&2 1&2 1&2 2&3 1&2 creek 1&2 2&3 Island-l 75% 50% 4259%

• Exelon's nuclear fleet also includes four shutdown units: Peach Bottom 1, Dresden 1, and Zion 1 and 2.

FJgUre 6: Final Reorganization for Structure 2 Exelm Capcratim (PA)

I

~ Exelm Ventures Coopmy, llC I I

• Exelm Gereratim Cm:pmy, ll.C I NRCFrergy, Ioc.

T NRCGereratim Hd~ Ioc.

(IE)

Texas Gn::o Hddings, Inc.

I (TX) I I I Texas Gn::o GP, llC Texas Gn::olP, llC (TX) (DE)

I I NRG Sooth Texas lP (IX)

~ 44%

SIP Units 1 & 2 I 1&2 -sGfi~~B~1 I..m:I1ick ~

2&3 QJad aries 1&2 Peach Bcttcm 2&3.

Salem 1&2 Ointm Three

tvfile Island-I II Oyster Creek 75% 50% 4259%

• Exelon's nuclear fleet also includes four shutdown tmits: Peach Bottom 1, lAesden 1, and Zion 1 and 2.

Figure 7: Final Reorganization for Strncture 3 Exelm Qrpmltim (PA)

I r Exelm Ventures ~y, ll.C I

• Exelm Generatim ~y, I1...C NRG Qnntion Holdings Inc.

(DE)

I I

J I Texas Getnl Holdings, Inc.

(TX)

I Texas Genco GP, ll..C Texas Genco lP, ll..C (TX) (DE)

I NRG Sooth Texas lP (TX)

I 44%

~~II B~s~r¥lffi~-RrE II ~

I SIP Units 1& 2 1&2 2&3 Island-l Creek 75% 50% 42.59%

• Exelon's nuclear fleet also includes four shutdown tmits: Peach Bottom 1, Dresden 1, and Zion 1 and 2.

ATTACHMENT 1 Excerpt From Exelon 2007 Form 10..K For the Years Ended December 31, (In millions, except per share data) 2007 2006 2005 Operating revenue.- $ 18,916 $ 15,655 $ 15,357 Operating expenses Purchased*power 5,282 2,683 3,16~

Fuel 2,360 2,549 2,508 Operating and*maintenance 4,289 3,868 3,694 Impairment of goodwill 776 1,207 Dep.reciation and amortization 1,520 1,487 1,334 Taxes other than income 797 771 728 Totaloperatihgexpenses 14,248 12,134 12,633 Operating income 4,668 3,521 2,724 Other Income and deductlon.-

Interest expense (647) (616) (513)

Interest expense to affiliates, net (203) (264) (316)

Equity in losses of unconsolidated affiliates (106) (111 ) (134)

Other,. net 460 268 134 Total other income and deductions (496) (725) (829)

Income from continuing operations before Income taxes 4,172 2,796 1,895 Income taxes 1,446 1,206 944 Income from continuing operations 2,726 1,59Q 951 Discontinued operations Income (loss) from discontinued operations (netof taxes of $3;

$0 and $(3), respectively) 6 (4 )

Gain on disposal of discontinued operations (net of taxes of $2,

$2 and $6, respectively) 4 4 18 In.come,ffol'h, dlsC9ntinued operatfons 10 2 14 Income before a cumulative effect of change In accounting princ 2,736 1,592 965 CumUlative effect of iI..changelrl accountfngprlnclple (net of Income taxes of SO, $0, and $(27), respectively)* (42)

Net Income 2,736 $ 1,592 $ 923

Averag, shares ,of common stock outstanding Basic 670 670 669 Diluted 676 676 676

==

Earnings per average common share-basic:

Income from continuing operations $ 4.08 $ 2.37 $ 1.42 Income from discontinued operations 0.02 0.02 Cumulative effect of a change in accounting principle (0.06)

Net income $ 4.08 $ 2.37 $ 1.38

==

Earnings per average common share-diluted:

Income from continuing operations $ 4.03 $ 2.35 $ 1.40 Income frorndiscontinued operations. 0.02 0.02 Cumulative effect of a change in accounting principle (0.06)

Net income $ 4.05 $ 2.3$ $ 1.36

Dividends per common share $

1.76 $ 1.60 $ 1.60

ATTACHMENT 2 Excerpt From NRG 2007 Form 10-K Year Ended December 31, 2007 2006 Change %

(In millions except otherwise noted)

Operating Revenues Energy revenue $4,265 $3,155 35%

Capacity revenue 1,196 1,516 (21 )

Risk management activities 4 124 N/A Contract amortization 242 628 (61)

Thermal revenue 125 124 1 I Hedge Reset (129) N/A I:Other revenues - -157 - ---- 167 (6)

Total operating reve.nues 5,989 5,585 1 Operating Costs and Expenses Cost of operations 3,378 3,265 3 Depreciation and amortization 658 590 12 General and administrative 309 276 12 Development costs 101 - - 36 181 Total operating costs and expenses 4,446 4,167 7 Gain on sale of assets - N/A Operating .Income 1,560 1,418 10 l'Other Incomel(Expense)

Equity in ~arning. of UncQnsolictated affiliate$; 54, 60 (10)

Gains on sales of equity method investments 1 8 (88)

Other income, net 55 156 (65)

Refinancing expenses (35) (187) (81 )

Interest.expense _ (689) _ (590) 17 Total other expenses (614) (553) 11 Income from Continuing Operations betorelncome. tax expense 946 865 9 Income tax expense

- -377- --- 322 17 Income from Cont'nuing Operations 569 543 5 Income from discontinued operations, net of income tax expense

- --- 78 (78)

Net Income $ .586 $ 621 (6)

Business Metrics Averag, natural gas price - Henry Hub ($/MMbtu) 7.12 6.99 20/0 NIA-Not applicable

ATTACHMENT 3 Projected Income Statements NRG South Texas, LP (Non-Proprietary Version)

Page 1 STP - Base Case at 440/0 Ownership - Unaudited Income Statements Page 2 STP - 100/0 Lower Energy Price at 44% Ownership - Unaudited Income Statements Page 3 STP -10% Lower Capacity Factor at 44% Ownership - Unaudited Income Statements Page 4 Assumptions

ATTACHMENT 3 STP - Base Case at 44°k Ownership - Unaudited Income Statements (Non-Proprietary Version)

STP - Base Case at 44% Ownership Unaudited Income Statements Millions of Dollars Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP Unaudited Unaudited Unaudited Unaudited Unaudited Output GWh Total Revenue $/MWh Operating Revenues Purchased Power Fuel Revenue Net Fuel Operating and Maintenance (Includes Decom)

Taxes Other Than Income Other Operating Expenses/(Income)

EBITDA Depreciation, Amortization & Impairment Other, Net Income/(Expenses)

EBIT Total Interest Expense Total Interest Income Earnings Before Taxes Income Tax Expense Net Income The above information is a non-GAAP forecasted presentation of financial information and may not be comparable to other companies information or a GAAP-compliant presentation. This information should be considered preliminary and subject to change.

1

ATTACHMENT 3 STP - 10% Lower Energy Price at 44% Ownership - Unaudited Income Statements (Non-Proprietary Version)

STP

• 10% Lower Energy Price at 44% Ownership Unaudited Income Statements Millions of Dollars Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP Unaudited Unaudited Unaudited Unaudited Unaudited Output GWh Total Revenue $/MWh Operating Revenues Purchased Power Fuel Revenue Net Fuel Operating and Maintenance (Includes Decom)

Taxes Other Than Income Other Operating Expenses/(Income)

EBITDA Depreciation, Amortization & Impairment Other, Net Income/(Expenses)

EBIT Total Interest Expense Total Interest Income Earnings Before Taxes Income Tax Expense Net Income The above information is a non-GAAP forecasted presentation of financial information and may not be comparable to other companies information or a GAAP-compliant presentation. This information should be considered preliminary and subject to change.

2

ATTACHMENT 3 STP -100/0 Lower Capacity Factor at 44% Ownership - Unaudited Income Statements (Non-Proprietary Version)

STP - 10% Lower Capacity Factor at 44°k Ownership Unaudited Income Statements Millions of Dollars Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP Unaudited Unaudited Unaudited Unaudited Unaudited Output GWh Total Revenue $/MWh Operating Revenues Purchased Power Fuel Revenue Net Fuel Operating and Maintenance (Includes Decom)

Taxes Other Than Income Other Operating Expenses/(Income)

EBITDA Depreciation, Amortization & 1mpairment Other, Net Income/(Expenses)

EBIT Total Interest Expense Total Interest Income Earnings Before Taxes Income Tax Expense Net Income The above information is a non-GAAP forecasted presentation of financial information and may not be comparable to other companies information or a GAAP-compliant presentation. This information should be considered preliminary and subject to change.

3

ATTACHMENT 3 Assumptions (Non-Proprietary Version)

STP Assumptions Energy Projections Unit Capacity (NRG Share @ 440/0)

Capacity Factor Refuel Cycle Fuel Costs (excluding spent fuel fee)

Spent Fuel Fee Non - Outage Operating and Maintenance Costs including G&A Costs per Outage Property Taxes and Insurance Ongoing Capital Additions Texas State Gross Margins Tax Federal Tax Rate Decommissioning Plant Book Life Tax Life Equipment Tax Life Capital Fuel Book Position - PP&E and Fuel Working Capital Assumptions Accounts Receivable days Accounts Payable days 4

ATTACHMENT 4 Balance Sheet and Projected Income Statements Exelon Generation Company, LLC (Non-Proprietary Version)

Page 1 ExGen - Base Case - Unaudited Income Statements Page 2 ExGen - Base Case - Unaudited Balance Sheets Page 3 ExGen - 10% Lower Energy Price - Unaudited Income Statements Page 4 ExGen - 10% Lower Capacity Factor - Unaudited Income Statements

ATTACHMENT 4 ExGen - Base Case - Unaudited Income Statements (Non-Proprietary Version)

ExGen

• Base Case Unaudited Income Statements Millions of Dollars Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP Unaudited Unaudited Unaudited Unaudited Unaudited Operating Revenues Purchased Power Fuel Revenue Net Fuel Operating and Maintenance (Includes Decom)

Taxes Other Than Income Other Operating Expenses/(Income)

EBITDA Depreciation, Amortization & Impairment Other, Net Income/(Expenses)

EBIT Total Interest Expense Total Interest Income Earnings Before Taxes Income Tax Expense Net Income The above information is a non-GAAP forecasted presentation of financial information and may not be comparable to other companies information or a GAAP-compliant presentation. This information should be considered preliminary and subject to change.

1

ATTACHMENT 4 ExGen - Base Case - Unaudited Balance Sheets (Non-Proprietary Version)

ExGen

• Base Case Unaudited Balance Sheets Millions of Dollars Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP

.*H+_

Unaudited Unaudited Unaudited 2*itI S i;FMI,A Unaudited Unaudited ASSETS Cash, Restricted Cash and Cash Equivalents Temporary investments Net Accounts Receivable, incl. Nonconsol affi!.

Inventories, at average cost Other Current Assets Total Current Assets Net Plant Goodwill, net Decommissioning Trust Fund Other Non-Current Assets Total Assets LIABIUTIES Notes Payable Accounts Payable Accrued Expense Other Current liabilities Total Current Liabilities Long-Term Debt (including current maturities)

Asset Retirement Obligation Spent Nuclear Fuel Obligation Deferred Income Taxes Other Non-Current Liabilities Total Other Liabilities Common Stock (Net of Treasury)

Preferred Stock Retained Earnings Other Equity Total Equity Total Liabilities & Equity The above information is a non-GAAP forecasted presentation of financial information and may not be comparable to other companies information or a GAAP-compliant presentation. This information should be considered preliminary and SUbject to change.

2

ATTACHMENT 4 ExGen - 100/0 Lower Energy Price - Unaudited Income Statements (Non-Proprietary Version)

ExGen - 10°,4 Lower Energy Price Unaudited Income Statements Millions of Dollars Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP Unaudited Unaudited Unaudited Unaudited Unaudited Operating Revenues Purchased Power Fuel Revenue Net Fuel Operating and Maintenance (Includes Decom)

Taxes Other Than Income Other Operating Expenses/(Income)

EBITDA Depreciation, Amortization & Impairment Other, Net Income/(Expenses)

EBIT Total Interest Expense Total Interest Income Earnings Before Taxes Income Tax Expense Net Income The above information is a non-GAAP forecasted presentation of financial information and may not be comparable to other companies information or a GAAP-compliant presentation. This information should be considered preliminary and subject to change.

3

ATTACHMENT 4 ExGen - 100/0 Lower Capacity Factor - Unaudited Income Statements (Non-Proprietary Version)

ExGen *10% Lower Capacity Factor Unaudited Income Statements Millions of Dollars Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP Unaudited Unaudited Unaudited Unaudited Unaudited Operating Revenues Purchased Power Fuel Revenue Net Fuel Operating and Maintenance (Includes Decom)

Taxes Other Than Income Other Operating Expenses/(Income)

EBITDA Depreciation, Amortization & Impairment Other, Net Income/(Expenses)

EBIT Total Interest Expense Total Interest Income Earnings Before Taxes Income Tax Expense Net Income The above information is a non-GAAP forecasted presentation of financial information and may not be comparable to other companies information or a GAAP-compliant presentation. This information should be considered preliminary and subject to change.

4

ATTACHMENT 5 Consolidated Balance Sheet and Projected Income Statements for Exelon Corporation and NRG Energy, Inc.

(Non-Proprietary Version)

Page 1 Exelon/NRG Combined - Base Case - Unaudited Income Statements Page 2 Exelon/NRG Combined - Base Case - Unaudited Balance Sheets

ATTACHMENT 5 ExelonlNRG Combined - Base Case - Unaudited Income Statements (Non-Proprietary Version)

ExelonlNRG Combined* Base Case Unaudited Income Statements Millions of Dollars Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP Unaudited Unaudited Unaudited Unaudited Unaudited Operating Revenues Purchased Power and Fuel Revenue Net Fuel Operating and Maintenance (Includes Decom)

Taxes Other Than Income Other Operating Expenses/(Income)

EBITDA Depreciation, Amortization & Impairment Other, Net Income/(Expenses)

EBIT Total Interest Expense Total Interest Income Earnings Before Taxes Income Tax Expense Net Income Before Extraordinary Items Extraordinary Items Net Income Preferred Dividends Net Income Available for Common Stockholders The above information is a non-GMP forecasted presentation of financial information and may not be comparable to other companies information or a GMP-compliant presentation. This information should be considered preliminary and subject to change.

The consummation of the transaction may require the refinancing of existing NRG Energy indebtedness, but will not result in an increase in the total amount of such indebtedness. Therefore, the refinancing of this existing debt would not have a significant impact on the pro forma financial statements for NRG South Texas or Exelon Generation.

1

ATTACHMENT 5 ExelonlNRG Combined - Base Case - Unaudited Balance Sheets (Non-Proprietary Version)

ExelonINRG Combined* Base Case Unaudited Balance Sheets Millions of Dollars Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GMP Unaudited Unaudited Unaudited Unaudited Unaudited ASSETS Cash, Restricted Cash and Cash Equivalents Temporary investments Net Accounts Receivable, incl. Nonconsol attil.

Inventories, at average cost Other Current Assets Total Current Assets Net Plant Goodwill. net Decommissioning Trust Fund Other Non-Current Assets Total Assets LIABILITIES Notes Payable Accounts Payable Accrued Expense Other Current Liabilities Total Current Liabilities Long-Term Debt (including current maturities)

Asset Retirement Obligation Spent Nuclear Fuel Obligation Deferred Income Taxes Other Non-Current Liabilities Total Other Liabilities Common Stock (Net of Treasury)

Preferred Stock Retained Earnings Other Equity Total Equity Total Liabilities & Equity The above information is a non-GAAP forecasted presentation of financial information and may not be comparable to other companies information or a GAAP-compliant presentation. This information should be considered preliminary and subject to change.

The consummation of the transaction may require the refinancing of existing NRG Energy indebtedness, but will not result in an increase in the total amount of such indebtedness. Therefore, the refinancing of this existing debt would not have a significant impact on the pro forma financial statements for NRG South Texas or Exelon Generation.

2

ATTACHMENT 6 Affidavit of Christopher M. Crane (10 CFR 2.390 and 10 CFR 9.17)

AFFIDAVIT In the Matter of )

)

NRG South Texas LP ) Docket Nos. 50-498 and 50-499

)

South Texas Project, Units 1 and 2 )

I, Christopher M. Crane, President and Chief Operating Officer of Exelon Corporation (Exelon),

hereby affirm and state:

1. I am authorized to execute this affidavit on behalf of Exelon.

2. Exelon is providing information in support of an Application for Order Approving Indirect Transfer of Control of Licenses. The documents being provided in the Attachments 3A, 4A, and SA contain proprietary financial information and financial projections related to the ownership and operation of the generation assets operated by Exelon and financial projections related to NRG South Texas, LP. These documents constitute proprietary commercial and financial information that should be held in confidence by the NRC pursuant to 10 CFR 2.390(a)(4) and 10 CFR 9.17(a)(4) because:

i. This information is and has been held in confidence by Exelon.

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

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.

v. Public disclosure of this information would create substantial harm to the competitive position of Exelon by disclosing its internal financial projections.

3. Accordingly, Exelon requests that the designated documents be withheld from public disclosure pursuant to 10 CFR 2.390(a)(4) an 10 CFR 9.17(a)(4).

/V11 ristopher M. Cane STATE OF ILLINOIS )

)

COUNTY OF COOK )

Subscribed and sworn to me, a Notary Public, in -F-!~-+ day of January 2009.