U-602675, Application for Amend to License NPF-62,requesting Consent to Transfer Minority Ownership
| ML20133A589 | |
| Person / Time | |
|---|---|
| Site: | Clinton  |
| Issue date: | 12/13/1996 |
| From: | Connell W ILLINOIS POWER CO. |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| Shared Package | |
| ML20133A592 | List: |
| References | |
| L30-96(12-13)LP, U-602675, WC-373-96, NUDOCS 9612310175 | |
| Download: ML20133A589 (13) | |
Text
Illinois Power Company Chnton Power Station P.O. Box 678 Chnton. IL E1727 Tel 217 935-5623 Fax 217 935-4632 Wilfred Connell Vice President ILLINSIS P@WER U-602675 L30-%(12-13 )LP 8E.100a WC-373-96 December 13, 1996 i
Docket No. 50-461 10CFR50.90 10CFR50.80 Document Control Desk Nuclear Regulatory Commission (NRC)
Washington, D.C. 20555 l
Subject:
Clinton Power Station Request for Amendment to Facility Operating License NPF-62 (RS/LS-96-011) and Consent to Transfer Minority Ownership
Dear Madam or Sir:
By letter dated October 17,1996, and pursuant to 10CFR50.80 and 10CFR50.90, Illinois Power Company (" Illinois Power") requested (1) the NRC's consent to a proposed i
transfer of Soyland Power Cooperative's 13.21% minority ownership interest in the Clinton Power Station (" CPS") to Illinova Power Marketing, Inc. ("IPMI"), an unregulated power marketing affiliate ofIllinois Power and a wholly owned subsidiary of Illinova Corporation ("Illinova"), and (2) the NRC's approval for an amendment to Facility Operating License NPF-62 for CPS as required for that proposed transfer. Illinois 3
Power's letter explained why Soyland, as a condition to an agreement reached with the Rural Utilities Services ("RUS") for refmancing Soyland's significant debt, is required to divest itself of any ownership of, and responsibility for, CPS. It was also noted that a Power Sales Agreement ("PSA") between IPMI and Soyland was being established such that IPMI would sell its entire share of electrical output from CPS to Soyland for a period of at least ten years. In light of Soyland's desire to effect the transfer of ownership as soon as possible, Illinois Power respectfully requested NRC's consent and issuance of the associated license amendment by December 31,1996. Due in part to such a request for an expedited NRC review, a public meeting conducted by the NRC and attended by Illinois Power and Soyland representatives, was held on November 21,1996 to further discuss the proposed transfer.
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9612310175 961213 1
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4 U-602675 Page 2 s
The purpose of this letter is t, notify the NRC that, upon further consideration of the proposed transfer, it has been de ermined that the proposed transfer ofownership j
described in Illinois Power's request and at the November 21 meeting, will not be pursued.
Rather, a proposed transfer of Soylano's share of ownership to lliinois Power (irste,4d of
^
IPMI) is now desired (thus making Illinois Power the sole owner of CPS). Therefore, Illinois Power hereby respectfully requests the NRC's consent to such a proposed transfer of ownenhip, and requests that an amendment of the CPS Operating License be issued to reflect tht transfer of ownership. This request and application for amendment supersedes Illinois Power's October 17 request and application for amendment (submitted as Illinois l
Power letter U-602648). However, it should be noted that some of the corporate and 1
4 financial information provided in that submittal with regard to Illinois Power may be i
relevant to this request and useful with respect to NRC review of this request.
1 Yn light of this new request, Illinois Power understands that NRC review and approval by December 31,1996, as requested in the October 17 submittal, is no longer i
achievable. Nevertheless, prompt review and appro valis still requested. Since Illinois
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Power is already the majority owner (and sole operatar) of CPS and is an Electric Utility i
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as defined in 10CFR50.2, it is anticipated that tids will facilitate NRC review of a requested transfer of ownership to Illinois Power and permit issuance of the license i
amendment in the shortest possible time.
i Additional details concerning the proposed transfer, including information provided pursuant to 10CFR50.80, are provided in Attachment 2 to this letter. In addition, pursuant to the required license amendment, marked up copies of affected pages from the CPS Operating License to reflect the transfer of ownership are provided in i, and an affidavit supponing the facts set forth in this letter / application for amendment is provided as Attachment 1. A basis for no significant hazards consideration is provided as follows.
Basis for No Significant Hazards Consideration j
1 l
According to 10CFR50.92, a proposed change to the Operating License involves i
no significant hazards cordderation if operation of the facility in accordance with the i
proposed change would not (1) involve a significant increase in the probability or consequences of an accident previously evaluated, (2) create the possibility of a new or different kind of accident from any accident previously evaluated, or (3) involve a significant reduction in a margin of safety.
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i U-602675 Page 3 1
The amendment requested herein involves only the transfer of a minority j
ownership interest in CPS to the current principle owner and licensed operator for CPS i
_ (i.e., Illinois Power). Illinois Power will continue to have exclusive responsibility and I
control over the operation and maintenance of the facility, and, therefore, maintenance, design and operation of the facility are unaffected by the proposed amendment.
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(1)
The proposed amendment does not involve a significant increase in the j
j.
probability or consequences of an accident previously evaluated because it 2
. merely revises the Operating License to indicate the tran:fer of a minority ownership interest to the current majority owner and sole operator of the i
facility. This proposed amendment represents an administrative rather than i
operational change and, therefore, has no impact on accidents previously l
evaluated.
l' (2)
The proposed amendment does not create the possibility of a new or q
different kind of accident from any accident previously evaluated because there will be no change to the plant's physical configuration or operation as a result of this proposed amendment.
]
(3)
The proposed amendment does not involve a significant reduction in the margin of safety because it is only an administrative change and will have j
no impact on any margin of safety related to the design or operation of the facility.
l.
The proposed amendment does not, therefore, involve a significant hazards consideration.
With respect to environmental considerations, Illinois Power has reviewed this i
proposed amendment to the Operating License against the criteria of 10CFR51.22. For the reasons described above, the proposed amendment does not involve a significant hazards consideration, does not significantly increase the types and amounts or change the i
types of effluents that may be released offsite, nor does it significantly increase individual or cumulative occupational radiation exposures. Based on the foregoing, Illinois Power concludes that the proposed Operating License amendment meets the criteria given in i
10CFR51.22(c)(9) for categorical exclusion from the requirements for an Environmental Impact Statement.
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Page 4 In accordance with 10CFR50.30 and 10CFR170.12, one signed original of this I
applicat;on is enclosed with the understanding that Illinois Power will be assessed the full cost Of evaluating this request upon completion. In addition, pursuant to 10CFR50.Pl(b)(1), a copy of this request for amendment has been sent to the Illinois Department t fNuclear Safety.
Sincerely yours, f
$A~~W Wilfred Connell Vice President i
TBFlcsm j
i Attachments i
cc:
NRC Clinton Licensing Project Manager l
NRC Resident Office, V-690 l
Regional Administrator, Region III, USNRC Illinois Department of Nuclear Safety
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Attachment I to U-602675 l
Wilfred Connell, being first duly sworn, deposes and says: That he is Vice President of j
Illinois Power; that this proposed amendment ofFacility Operating License NPF-62 has been prepared under his supervision and direction; that he knows the contents thereof; and that to the best of his knowledge and belief said letter and the facts contained therein are true and correct.
Date: This day ofDecember 1996.
Signed:
M hilfred Connell STATE OF ILLINOIS l SS.
f h d COUNTY J
Subscribed and sworn to before me this Iday ofDecember 1996.
to M/
Nery NAs,SWe of Ehis
/g(Notary Public)[
uy m p osta g c::::::::::::::::::::::::
to U-602675 RS/LS-96-011 Page 1 of 8 i
Supplemental Information Concerning Proposed Transfer of Sovland's Ownershio Interest Pursuant to 10CFR50.80 -
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1 Contents I
i r
I.
Background Information Concerning Illinova, Illinois Power, and Soyland II.
Reasons for the Proposed Transfer, and Description of the Transactions l
Associated with the Transfer 1
III.
Summary of the Impact of the Proposed Transfer on Illinois Power and Clinton Power Station IV.
Required Regulatory Approvals j
)
V.
General Information Concerning Licensees i
VI.
Financial Qualifications VII.
Decommissioning Func'ing for CPS VIII. Technical Qualifications j
IX.
Antitrust Considerations X.
Access to Restricted Data j
1
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to U-602675 f-RS/LS-96-011 Page 2 of 8 1
I.
Backaround Information Concerning Illinova. Illinois Power. and Soyland i
A.
Illinova Corporation ("Illinova") is an exempt, public utility holding company located at 500 S. 27th Street, Decatur, Illinois 62525. Illinova j
wholly owns the following subsidiaries: Illinois Power Company (" Illinois Power"), Illinova Generating Company, Illinova Power Marketing, Inc.
l
("IPMI"), and Illinova Energy Partners, Inc.
B.
Illinois Power is an Illinois public utility that provides electric and natural I
gas utility services to approximately 560,000 consumers throughout the
(
State ofIllinois. Illinois Power is the majority owner and licensee of the 1
Clinton Power Station (" CPS"), a nuclear generating station located in i
DeWitt County, Illinois. Soyland Power Cooperative, Inc. ("Soyland") is the minority owner and co-licensee of CPS. Illinois Power and Soyland are parties to the following agreements: a) an Ownership Participation Agreement ("OPA"), which pertains to the ownership and operation of CPS; and b) a Power Coordination Agreement ("PCA"), which entitles Soyland to the output from 12% ofIllinois Power's fossil generation, and j
related transmission services.
C.
Soyland is a rural electric generation and transmission cooperative which is I
comprised of twenty-one member rural electric distribution cooperatives.
i The Rural Utilities Service ("RUS") recently restructured Soyland's CPS related debt obligations to the federal government in exchange for Soyland's commitment to divest itself ofits ownership in CPS. As part of the debt restructuring, the RUS permitted Soyland to refinance its l
remaining RUS guaranteed debt, thus eliminating Soyland's status as an RUS borrower. Soyland is now subject to Federal Energy Regulatory Commission ("FERC") jurisdiction.
l II.
Reasons for the Proposed Transfer, and Description of the Transactions Associated with the Transfer Due to severe financial difficulties arising from its CPS-related debt service obligations, as well as CPS ownership, operation and maintenance obligations, Soyland determined that it must seek protection from its creditors under the United States Bankruptcy Code. In 1995, the Soyland Board ofDirectors authorized its attorneys to prepare to file Juch a petition with the U.S. Bankruptcy Court. In an effort to avoid bankruptcy, Soyland began negotiating with the RUS to restructure its CPS-related debt, and with a number of electric utilities and
)
power marketers to identify possible alternatives to its existing power supply agreements. Illinois Power and IPMI were parties with whom Soyland agreed to negotiate.
i
to U-602675 RS/LS-96-011 Page 3 of 8 Soyland's negotiations with the RUS led to an agreement pursuant to which the RUS would agree to forgive a substantial portion of Soyland's debt and allow it to
" buy out" of the RUS program in exchange for Soyland's agreement to divest itself completely ofits CPS ownership interests. Soyland issued a Request for Proposal seeking offers for the purchase ofits CPS interest, an '. for alternative power supply arrangements. While a number of entities subn.itted proposals for alternative power supply arrangements, only one proposal provided for the purchase of Soyland's CPS interest. Because that proposal was not acceptable to j
Soyland, negotiations resumed between Soyland and representatives ofIllinova, l
Illinois Power and IPMI to identify a solution to Soyland's problem.
I Initially, as a result of these negotiations, an agreement that provided for a transfer of Soyland's CPS interest to IPMI, and a restructuring of the existing power supply agreements, was considered. This option was reconsidered, however, and it was finally agreed that Illinois Power should assume 100% ownership of CPS and thus assume all of Soyland's obligations under the OPA. In addition, the PCA will be revised such that Illinois Power will continue to sell capacity and energy to Soyland for a twenty year period, rather than the shorter period provided for in the j
existing PCA.
The transfer of Soyland's 13.21% interest in CPS to Illinois Power will have no impact on the management or operation of the plant. Under the OPA, and as reflected in the CPS Operating License, Illinois Power has been and will continue to be the sole operator of CPS.
III.
Summary of the Impact of the Proposed Transfer on Illinois Power and Clinton Power Station The proposed transfer will have no impact on the management and operation of 3
Illinois Power or the management and operation of CPS following the transfer.
i (1)
The officers and directors ofIllinois Power will remain unchanged and there will be no change in the management or technical qualifications of Illinois Power's nuclear organization.
i (2)
Illinois Power will hold a 100% ownership interest in CPS and will remain the licensed operator of CPS.
(3)
Illinois Power will continue to own and operate CPS in accordance with.
the terms and conditions of the CPS Operating License NPF-62.
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Attachmsnt 2 to U-602675 l
RS/LS-96-011 Page 4 of 8 (4)
Illinois Power will continue to be an " electric utility" within the meaning of 10CFR50.2, subject to regulation by the Illinois Commerce Commission
("ICC") and the Federal Energy Regulatory Commission ("FERC"). There will be no change in Illinois Power's source of funds or ability to obtain funds to support the operation, maintenance, and decommissioning of CPS.
(See Sections VI and VII of this attachment.)
IV.
Required Regulatory Aoprovals The proposed transfer of Soyland's CPS ownership interest, and the related l
restructuring of the power supply agreements, shall require the following l
approvals:
A.
The amended PCA shall be submitted to FERC for approval. In addition, a new open-access transmission services agreement between Soyland and Illinois Power shall be filed with FERC for approval. These filings are cutantly being prepared.
B.
No part of this transaction requires approval from the Securities and Exchange Commission.
V.
General Information Concerninn Licensees General information concerning Illinois Power and Illinova is set forth below:
(1)
Name of Company Illinois Power Company /Illinova Corporation (2)
Address of Company 500 South 27th Street Decatur, Illinois 62525 (3)
Description ofBusiness of Comoany j
See Section I of this attachment.
)
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to U-602675 RS/LS-96-011 Page 5 of 8 (4)
NRC License Involved NRC Operating License NPF-62 currently authorizing (a) Illinois Power to hold an 86.79% ownership interest in CPS and to operata CPS; and (b)
Soyland to hold a 13.21% ownership interest in CPS. The CPS Operating License is to be amended to indicate that Illinois Power has a 100%
ownership interest in CPS.
(5)
Organization and Mananement of Company Illinois Power is an Illinois corporation. The names, titles, and addresses of the directors and principal officers ofIllinois Power, all of whom are citizens of the United States, are set forth below:
IllinoisPower NAME OFFICE NUMBER AND STREET CITY. STATE & ZIP L. D. Haab Chairman, President, 89 N. Country Club Road Decatur,IL 62521 Chief Executive Officer
& Director L.F. Altenbaumer Senior Vice President, 4651 Cresthaven Lane Decatur,IL 62526 Chief FinancialOfficer
& Treasurer D. W. Butts Senior Vice President 16 Tall Oaks Lane Decatur,IL 62521 J. G. Cook Senior Vice President R. R. I Box 222 Maroa,IL 61756 P.L.Lang Senior Vice President 146 Hightide Drive Decatur,IL 62521 W. Connell Vice President 2899 Forrest Lane Decatur,IL 62521 R. W. Eimer Vice President 33 Dellwood Ct.
Decatur,IL 62521 R. D. Reynolds Vice President 1893 W. Sunset Ave.
Decatur,IL 62522 L. Manning Stetzner Vice President, General 2940 Olympia Drive Decatur,IL 62521 Counsel & Corporate Secretary C. G. Steward Controller R. R.1, Box 295 Sullivan,IL 61951 D. L. Mortland Assistant Treasurer R. R. Berry Director 813 Timberlake Drive Edwardsville,IL 62025
dttachment 2 to U-602675 RS/LS-96-011 Page 6 of 8 IllinoisPower(continued)
NAME OFFICE NUMBER AND STREET CITY. STATE & ZIP D. S. Perkins Director
%9 HillRoad Winnetka,IL 60093 R M. Powers Director 2 AllenBendPlace Decatur,IL 62521 i
W. D. Scott Director 55 Meadowview Drive Northfield,IL 60093 W. M. Vannoy Director 4709 John Scott Drive Lpichburg, VA 24503
[
M. von Ferstel Director 1550 N. State Parkway Chicago,IL 60610 J. D. Zeglis Director One Colonial Way Madison, NJ 07940 lilinova 1
\\
NAME OFFICE NUMBER AND STREET CITY. STATE & ZT l
L. D. Haab Chairman, President, 89 N. Country Club Road Decatur,IL 62521 Chief Executive Officer
& Director L. F. Altenbaumer ChiefFinancial Officer, 4651 Cresthaven Lane Decatur,IL 62526 Treasurer and Controller L. Manning Stetzner General Counsel &
2940 Olympia Drive Decatur,IL 62521 Corporate Secretary R R Berry Director 813 Timberlake Drive Edwardsville,IL 62025 C. S. McMillan Director 20 E. Cedar,10C Chicago,IL 60611 D. S. Perkins Director
%9 Hill Road Winnetka,IL 60093 R M. Powers Director 2 Allen Bend Place Decatur,IL 62521 W. D. Scott Director 55 Meadowview Drive Northfield, IL 60093 R L. Thompson Director 558 Pinella Point Holland, OH 43528 W. M. Vannoy Director 4709 John Scott Drive Lpichburg, VA 24503 M. von Ferstel Director 1550 N. State Parkway Chicago,IL tiO610 J. D. Zeglis Director One Colonial Way Madison, NJ 07940
to U-602675 RS/LS-96-011 Page 7 of 8 Additional information concerning the organization and management of
- Illinois Power and Illinova is contained in Attachment 3(d) ofIllinois Power letter U-602648 dated October 17,1996.
(7)
Foreign Ownership and Control The shares of common stock ofIllinova are publicly traded and widely j
held. Illinois Power and IPMI are wholly owned subsidiaries ofIllinova.
The directors and officers of both ofthese companies are U.S. citizens.
l Neither Illinova, Illinois Power, nor IPMI is owned, controlled or dominated by any alien, foreign corporation, or foreign government.
VI.
Financial Oualifications As specified in its NRC license, Illinois Power is licensed pursuant to Section 103 of the Atomic Energy Act of 1954, as amended ("AEA"), and 10CFR50, to own and operate CPS. " Electric utilities" licensed pursuant to Section 103 of the AEA are exempt from the requirement to demonstrate financial qualifications. Illinois Power is and will remain an " electric utility" within the meaning of 10CFR50.2 following the transfer and will remain an " entity that generates or distributes electricity and which recovers the cost of this electricity, either directly or indirectly, through rates established by the entity itself or by a separate regulatory authority." The business ofIllinois Power will remain essentially unchanged after the transfer, and its rates will continue to be regulated by the ICC and FERC.
VII.
Decommissioning Funding for CPS The transfer will not affect the ability ofIllinois Power to assure that the funds necessary to cover the costs for decontamination and decommissioning of CPS will be available upon decommissioning. Upon transfer of the Operating License (i.e.,
for the minority ownership share of CPS), Illinois Power will assume management of the trust established by Soyland for its share of the decommissioning costs associated with CPS. Although that trust will continue to be a separately managed portfolio and will be required to become a tax qualified trust (as opposed to the non-tax qualified status it carried under Soyland), Illinois Power will assume responsibility for the fund.
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to U-602675 RS/LS-96-011 Page 8 of 8 i
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l VIII. Technical Oualifications
'i l
i The proposed transfer will not result in any change in the design or operation of CPS, any change in the technical aspects of the CPS Operating License or l
Technical Specifications, nor any change to the technical qualifications of j
personnel involved in the maintenance and operation of the facility. The personnel i
1 at Illinois Power having control over licensed activities at CPS will not change as a l
result of the transfer. There will also be no other changes in the management or j
operation of CPS or Illinois Power as a result of the transfer.
I IX.
Antitrust Consideratioms Illinois Power is licensed, pursuant to Section 103 of the AEA, to own and operate CPS. Upon the completion of the transfer, Illinois Power will be the sole owner and licensed operator of CPS. As a result of the transfer, Illinois Power will
]
acquire rights to the total generating capacity of CPS, but with a net gain ofless l
than 200 MW. The submission of antitrust information is not required in connection with licensing actions that do not involve the transfer of generating capacity in excess of 200 MW or the entitlement to the power output from a 3
nuclear generating facility, or do not otherwise involve a "significant change" in licensed activities. [ Sag n, North Atlantic Enerav Service Coro.. et. al.
(Seabrook), Amend. No. 23 to NRC Lic. N. NPF-86 (Aug.16,1993);
SECY-91-246 (Aug. 7,1991) " Antitrust Considerations for License Amendments Authorizing New Operating Entities."]
X.
Access to Restricted Data The proposed transfer does not contain any Restricted Data or other Classified Defense Information or any change in access to such Restricted Data or Classified Defense Information. Illinois Power's existing restrictions on access to Restricted q
Data and Classified Defense Information will be unaffected by the proposed i
transfer.
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