ML17303A304

Forwards Draft Notice of Consideration for Fr Publication in Connection w/860206 Supplemental Application Re Proposed 1986 Sale & Leaseback Financing Transactions.Util Requests Publication Not Later than 860315,w/licensing by 860425

ML17303A304
Person / Time
Site:	Palo Verde
Issue date:	02/13/1986
From:	TOY T M MUDGE, ROSE, GUTHRIE, ALEXANDER & FERDEN
To:	DEWEY L S NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD)
References
NUDOCS 8702260027
Download: ML17303A304 (28)

Text

REGULATORY INFQRl')ATION DISTRIBUTION.SvRTEN (R IDS>ACCESSIQN NBR: 8702260027 DOC.DATE: 86/02/13 NOTARIZED:

NO FACIL: STN-50-528 Palo Verde Nuclear Station.Unit 1>Arizona Pub li AUTH.NANE AUTHOR AFFILIATION TOY>T.N.Nudge>Rose>Guthrie>Alexander 5 Ferden RECIP.NANE RECIPIENT AFFILIATION DEWEY>L.S.OFFice of the Executive Legal Director (Pre 860701)DOCKET 0 05000528

SUBJECT:

Fortoards draft notice oF consideration for FR publication in connection e/860206 supplemental application re proposed 1986 sale 8c leaseback financing transactions.

Util requests publication not later than 860315>w/licensing bg 860425.DISTRIBUTION CODE: B005D COPIES RECEIVED: LTR ENCL'IZE: TITLE: Licensing Submittal:

Application/General InFo Amdt NOTES: Standardi zed plant.N.Davis>NRR: fGg.05000528 REC IP IENT ID CODE/NANE PWR-B PD7 LA LICITRA>E 04 INTERNAL.ACRS 10 AEOD/PTB IE/DGAVT/GAB 09 Of Co<IES LTTR ENCL f 1 f 1 3 3 1 1 1 1 1 RECIPIENT ID CODE/NAKE PWR-B PD7 PD 05.ADil/LFNB ELD/HDS3 QGC/AD SP COP IES LTTR ENCL 2 2 EXTERNAL: LPDR NSIC NOTES: 03 06 1 1 1 NRC PDR TOTAL NUMBER OF COPIES REQUIRED: LTTR 18 ENCL 17 "4 f/g l i4 lf L 4 i'0 I 0 t I I'7 II II,~,>>l I'1 E I 1 1 H 1)(5 Jl~', Vg e"I I 862798 4*7 (~, P~l/~l+MUDGE ROSE GUTHRIE ALEXANDER&, FERDON ISO MAIDEN LANE NEW YORK.N.Y.IOO38 2 I 2-5 I 0-7000 CABLE ADDRESS: BALTVCHINS NEW VORK TELEXI WV 703729: WV I27889 TELECOPIERI 2I2 2+8~2ddd g~p'Q/I9 QQgp~February 13, 1986 2I2I K STREET.N,W.WASHINO TON, D.C.20037 202 429 9355 SUITE 2020 333 SOUTH BRAND AVENVE LOS ANOELES, CALIF.9007I 2 I 3 dl3 I I I 2 I2.RVE DE LA PAIX 78002 PARIS.FRANCE 2 8 I 87 7 I Lee Scott DeweyF Esq.Maryland National Bank Building Room 10211 7735 Old Georgetown Road Bethesda, Maryland 20814

Dear Lee:

We have drafted the enclosed notice of consideration for publication in the Federal Register in connection with the supplemen-tal application filed on February 6F 1986F respecting the proposed 1986 sale and leaseback financing transactions by Public Service Company of New Mexico (PNM)with respect to Palo Verde Unit 1 (Docket No.STN-528).In the Supplemental Application, it was noted that PNM desired that the notice of consideration be published by February 15, 1986, so that a further license amendment could be issued and become effective by March 24, 1986 (page 7 of the Supplemental Application).

Recent developments have led PNM to reschedule (subject to further reconsideration of the date)the refinancing dis-cussed at page 6 of the Supplemental Application proposed on or about April 30, 1986.A March 15, 1986 publication, enabling a license amendment to issue and become effective by April 25, 1986, will now suffice for PNM's purposes.In light of PNM's present desire to effect publication not later March 15, 1986, we offer to provide you with all possible assistance in revising the notice of consideration as you deem appropriate and to hand carry it to and through the Federal Register.8702260027 860213 PDR ADOCK 05000528'PDR,,'0

~~*1.4*.s<</+

PNM apologizes to you and the rest of the Staff for any inconvenience this change in schedule has caused.Sincerely, Timothy Michael Toy cc: Charles L.Moore<Esq.Keleher&McLeod, P.A.414 Silver Avenue<S.W.Albuquerque<

New Mexico 87102 Arthur C.Gehr, Esq.Snell 6 Wilmer 3100 Valley Bank Center Phoenix, Arizona 85703 P~I I'I t

[Docket.No.

STN 50-528]Arizona Public Service Co.;Consideration of a Supplemental Application for an Amendment of Facility Operatin'g License NPF-41 Respecting Proposed Sale and.Leaseback Financing Transactions, Proposed No Significant Hazards Determination, Solicitation of Comments and Opportunity for Hearing.The Nuclear Regulatory Commission is considering a Supplemental Application, dated February 5, 1986, filed by Arizona Public Service Company (APS)on behalf of Public Service Company of New Mexico (PNM)for the issuance of an amendment to Facility Operating License NPF-41 respecting PNM's proposal to sell and lease back the remaining portion of PNM's 10.2 percent interest in Palo Verde Nuclear Generating Station (PVNGS)Unit 1 and certain related common facilities and real property rights, the sale and leaseback of which was not consummated with the December 31, 1985 sale and lease-back transactions<

as authorized by the order of the Commission issued in this docket on December 12, 1985.The sale and leaseback transactions currently proposed are more particularly described in the Supplemental Application.

Under Facility Operating License NPF-41, issued June 1, 1985, PNM, APS and other named utilities are licensed to possess PVNGS Unit 1, and APS is licensed to use a'nd operate the facility.PVNGS Unit 1 is part of a three unit PVNGS project jointly possessed by those utilities<

with PNM, prior to the consummation of'the December 31, 1985 initial sale and leaseback transactions, having a

10.2 percent interest in PVNGS Unit 1 and certain related PVNGS common facilities.

Under the Arizona Nuclear Power Project (ANPP)Participation Agreement, each participant in the PVNGS project is obligated to pay a share, equal to its ownership (or leasehold) interest, of all costs of construction, maintenance, operation, capi-tal improvements and decommissioning of each of the PVNGS units, and is entitled to a share<equal to its interest, of the electrical output of the units.APS is authorized to act as agent for the other licensees of PVNGS Unit 1 and has exclusive responsibility and con-trol over the physical construction<

maintenance and operation of the facility.On October 18, 1985, APS filed an application on behalf of PNM seeking the Commission's approval for PNM to sell to The First National Bank of Boston, as Owner Trustee for the benefit of two or more equity investors, all or a portion of PNM's 10.2 percent.owner-ship interest in PVNGS Unit 1 and all or a portion of one-third of PNM's interest in certain related PVNGS common facilities, with the Owner Trustee simultaneously leasing back these interests to PNM for a basic term of approximately 28 1/2 years with rights of renewal and repurchase.

The application did not request any transfer of license NPF-41 as it was not requested that the Owner Trustee have any right of possession in, absent a further license amendment, or control over, PVNGS Unit 1.Those ri.ghts would remain solely in PNM, as lessee rather than an owner, and the other present licensees of PVNGS Unit l.APS would continue to be the sole licensee authorized to use and operate PVNGS Unit l.

l h It was proposed that throughout the term of the leaseholds PNM will have the full and exclusive authority and responsibility to exercise and perform all of the rights and duties of a Participant in , PVNGS under the ANPP Participation Agreement.

PNM will also retain responsibility for the payment of its share of the operating and maintenance expenses and costs of capital improvements during the term of the 1easeholds and thereaf ter, in the absence of other Commission action, for 10.2 percent of the costs of decommissioning associated with PVNGS Unit l.The Commission's order of December 12, 1985, approved the proposed transfer of all or a portion of PNM's 10.2%undivided inter-est in PVNGS Unit 1 and certain related common facilitates and real property rights in accordance with the terms of the sale and lease-back transactions described in the application, subject to the condi-tion that the lessors and anyone else who may acquire an interest through such transactions with respect to PVNGS Unit 1 are prohibited from exercising directly or indirectly any control over.the licensees of PVNGS.For purposes of this condition, the Commission stated that the limitations in 10 C.F.R.50.81"Creditor Regulations" as now in effect and as they may be subsequently amended are fully applicable to the lessors and any successors in interest to such lessors as long as the license for PVNGS remains in effect.On December 26<1985,.Amendment No.3 to NPF-41 was issued authorizing PNM's sale and leaseback transactions subject to the conditions in the Commission's.

December 12, 1985 order.However<unlike the scope of such order, the scope of the authority granted by

Amendment No.3 was limited to those transactions consummated on December 31, 1985.Pursuant to such authorization, on December 31, 1985, PNM sold and leased back approximately 72%of its 10.2%inter-est in PVNGS Unit 1 and certain related common'acilities and real property rights and now through the Supplemental Application seeks a further license'amendment authorizing PNM to sell and lease back the ,remaining 28%(approximate) of its 10.2%interest in PVNGS Unit 1 and certain related common facilities and real property rights through one or more transactions to be consummated on or before August 31, 1986.The Supplemental Application represents that the terms and conditions of PNM's proposed sale and leaseback transactions are sim-ilar in all significant respects to the transactions consummated by PNM on December 31, 1985 and the relief requested is the same relief as was authorized by the Commission's December 12, 1985 order.However, the Supplemental Application does disclose that a possible equity investor who may acquire a 1.7%undivided interest in PVNGS Unit 1 and certain related common facilities and real property rights is a domestic corporation which is a subsidiary of a United Kingdom corporation controlled by non-U;S.citizens.However, such possible participation of a foreign corporation in a sale and leaseback trans-action was considered in SECY-85-367 referred to in and adopted by the Commission's December 12, 1985 order.The Supplemental Application also discloses that an affiliate of PNM may be a possible equity investor and that special approval of the New Mexico Public Service Commission, in addition to

or such" af filiate other aPP rovals<wou ld be required for suc'ca'hat such a trans-tion.The Supplemental Applica'cation states a transaction.

T e u ca d conditions as the the same terms an con would have essentially t action wou ce t that cer ain ce t in provisions of r 31, 1985 transactions, excep December 31, I e su ied for so long as the be suspended or modified or s certain agr reements may e su to.the Supplemental tor.However, is the equity investo PNN affiliate is ma be suspended or also states t a h t the provisions that may e su Application a 1 or in the aggregate<

will not be<either singly or in e otherwise modified wi no of the Commission.

to the decision o material rant of e'hich is essentially a rant of the relief requested, whic is The grant of e ssion as to to PNM's right of possessi ition of the conversion as to recognition of e facilities an'1't'es and real property 1 and certain related common'1't'es an PVNGS Unit 1 and cer t, does not present t to a leasehold interest, oe rom a fee interest to a rights from ac , ronmental impact act, and no environm d environmental impac an unreviewe'n acting upon the raisal nee s d to be prepared in ac i statement or app Supplemental pp A lication.e a rotion that an e a roposed determina ion The Commission has made a pro t of-<in the Supplemental Application<

t of NPF-41, as requested in e lication, ant hazards considera ion.would invo volve no significan a 10....eans that opera-10 C.F.R.50.92, this mean's regulations in 10....h mean cilit in accor cordance with the propose am ve a signi ican v'f'increase in the probabi i y uated;or (2)crea e f'dent previously evalua e;a new or different kind of accident ro bility of a new or i e f icant reduction in a~or (3)involve a significan previo iously evaluated; or (in margin of safety.

The applicant's request is for approval of sale and leaseback transactions which provide that PNM would remain in posses-sion of its present interests in PVNGS and would continue to be obli-gated to pay its share of all costs of construction, maintenance, operation, capital improvements and decommissioning.

The Owner Trustee would not have any right of possession in, absent further license amendment, or control over PVNGS Unit l.APS would be the A sole licensee authorized to use and operate the facility.Based on the above, and'under the criteria in 10 C.F.R.50.92(c), the Staff proposed to determine that such amendment to the license would not involve significant hazards considerations.

The Commission is seeking public comments on the Supplemental Application and this proposed determination.

Any com-ments received within 30 days af ter the date of.publication of this notice will be considered in making any final determination.

Th'Commission will not normally make a final determination unless it receives a request for a hearing.Comments should be addressed to the Rules and Records Branch, Division of Rules and Records<Office of Administration, U.S.Nuclear Regulatory Commission, Washington, D.C.20555.Comments may also be delivered to Room 4000, Maryland National Bank Building, Bethesda, Maryland f rom 8: 15 a.m.to 5: 00 p.m.<Monday through Friday.By March , 1986<the licensee may file a request for a hearing with respect to issuance of the amendment to the subject facility operating license and any person whose interest may be b~\

affected by this proceeding and who wishes to participate as a party in the proceeding must file a written petition for leave to intervene in any hearings which may be held.Request for a hearing and peti-tions for leave to intervene shall be filed in accordance with the Commission's"Rules of Practice for Domestic Licensing Proceedings" in 10 C.F.R.Part 2.If a request for a hearing or petition for leave to intervene is filed by the above date and it is determined that a hearing be held, the Commission or an Atomic Safety and Licensing Board, designated by the Commission or by the Chairman of the Atomic Safety and Licensing Board Panel, will rule on the request and/or petition and the Secretary or the designated Atomic Safety and Licensing Board will issue a notice of hearing or an appropriate order.As required by 10 C.F.R.2.714, a petition for leave to intervene shall set forth with particularity the interest of the petitioner in the proceeding, and how that interest may be affected by the results of the proceeding.

The petition should specifically explain the reasons why intervention should be permitted with partic-ular reference to the following factors: (1)the nature of the petitioner's right under the Atomic Energy Act to be made a party to the proceeding; (2)the nature and extent of the petitioner's proper-'ty, financial, or other interest in the proceeding; and (3)the pos-sible effect of any order which may be entered in the proceeding, on the petitioner's interest.The petition should identify the specific aspect(s)of the subject matter of the proceeding as to which petitioner wishes to intervene.

Any person who has filed a petition ll for leave to intervene or who has been admitted as a party may amend the petition without requesting leave of the Board up to fifteen (15)days prior to the first prehearing conference scheduled in the pro-ceeding, but such an amended petition must satisfy the specificity requirements described above.No later than fifteen (15)days prior to the first prehear-ing conference scheduled in the proceeding, a petitioner shall file a.supplement to the petition to intervene which must include a list of the contentions which are sought to be litigated in the matter, and the basis for each contention set forth with reasonable specificity.

Contentions shall be limited to matters within the scope of the amendments under consideration.

A petitioner who fails to file such a supplement.which satisfies these requirements with respect to at least one contention will not be permitted to participate as a party.Those permitted to intervene become parties to the proceed-ing, subject to any limitations in the order granting leave to inter-vene, and have the opportunity to participate fully in the conduct of the hearing<including the opportunity to present evidence and cross-examine witnesses.

If a hearing is requested<

the Commission will make a final determination on the issue of no significant hazards consideration and whether hearings are necessary.

The final determination will serve to decide when the hearing, if any, is held.If the final determination is that the amendment request involves no significant hazards consideration, the Commission may i'h issue the amendment's and make them effective, notwithstanding the request for a hearing.Any hearing held would take place after issu-ance of the amendment.

If the final determination is that a license amendment involving a significant hazards consideration is necessary, any hear-ing held would take place before the issuance of any amendment.

Normally, the Commission will not issue the amendments until the expiration of the 30-day notice period.However, should circumstances change during the notice period such that failure to act in a timely way would result, for example, in derating or shut-down of the facility, the Commission may issue the license amendments before the expiration of the 30-day notice period, provided that its final determination is that the amendments involve no significant hazards consideration.

The final determination will consider all public and State comments received.Should the Commission take this action, it will publish a notice of issuance and provide for opportu-nity for a hearing after issuance.The Commission expects that the need to take this action will occur very infrequently.

A request for a hearing or a petition for leave to inter-vene must be filed with the Secretary of the Commission, U.S.Nuclear Regulatory Commission<

Washington, DC 20555.Attention:

Docketing and Service Branch, or may be delivered to the Commission's Public Document Room, 1717 H Street, NW, Washington, DC, by the above date.Where petitions are filed during the last ten (10)days of the notice period, it is requested that the petitioner promptly so inform the Commission by a toll-free telephone call to Western Union at (800) t A l 325-6000 (in Missouri (800)342-6700).The Western Union operator should be given Datagram Identification Number 3737 and the following message addressed to Edward J.Butcher: (petitioner's name and phone number), (date petition was mailed), (plant name), and (publication date and page number of this Federal Register notice).A copy of the petition should also be sent to the Executive Legal Director, U.S.Nuclear Regulatory Commission, Washington, DC 20555, and to Arthur C.Gehr, Snell a Wilmer, 3100 Valley Bank Center, Phoenix, AZ 85073.Nontimely filings of petitions for leave to intervene, amended petitions, supplemental petitions and/or requests for hearing will not be entertained absent a determination by the Commission, the presiding officer or the Atomic Safety and Licensing Board designated to rule on the petition and/or request, that the petitioner has made a substantial showing or good cause for the granting of a late peti-tion and/or request.That determination will be based upon a balanc-ing of the factors specified in 10 C.F.R.2.714(a)(2)(i)-(v) and 2.714(d).

~I For further details with respect to this action, see the Supplemental Application dated February 5, 1986, which is available for public inspection at the Commission's Public Document Room, 1717 H Street, NW, Washington, DC, and at the local public document room at the Phoenix Public Library, 12 E.McDowell Road, Phoenix, AZ 85004.Dated at Bethesda, Maryland, this day of February, 1986.For the Nuclear Regulatory Commission.

I Frank J.Miraglia, Deputy Director, Division of Licensing<

Office of Nuclear Reactor Regulation.

C