ML102430159

Application for NRC Consent to Indirect License Transfer - Acquisition of Maine & Maritimes Corporation (Parent of Maine Public Service Company) by Bhe Holdings, Inc. (Parent of Bangor Hydro Electric Company)

ML102430159
Person / Time
Site:	Maine Yankee
Issue date:	08/27/2010
From:	Domby A Maine Yankee Atomic Power Co, Troutman Sanders, LLP
To:	Document Control Desk, Office of Nuclear Material Safety and Safeguards
References
Download: ML102430159 (4)

Text

ARTHUR H. DOMBY TROUTMAN SANDERS LLP 404.885.3130 telephone 404.962.6546 facsimile arthur.domby@troutmansanders.com TROUTMAN SANDERS Attorneys at Law Bank of America Plaza 600 Peachtree Street, NE Suite 5200 Atlanta, Georgia 30308-2216 404.885.3000 telephone 404.885.3900 facsimile troutmansanders.com August 27, 2010 Via Federal Express U.S. Nuclear Regulatory Commission Attn: Document Control Desk One White Flint North 11555 Rockville Pike Rockville, MD 20852-2738

Reference:

(a) License No. DPR-36 (Docket No. 50-309,72-030)

(b) Maine Yankee letter MON-10-01 1, RA 10-034, June 17, 2010

Subject:

Maine Yankee - Application for NRC Consent to Indirect License Transfer - Acquisition of Maine & Maritimes Corporation (parent of Maine Public Service Company) by BHE Holdings, Inc. (parent of Bangor Hydro Electric Company)

Dear Sir or Madam:

By letter dated June 17, 2010 (Reference a), Maine Yankee Atomic Power Company

("Maine Yankee"), acting on behalf of Maine Public Service Company ("MPS"), a minority 5%

co-owner of Maine Yankee, notified the Nuclear Regulatory Commission ("NRC") of the pending acquisition of Maine & Maritimes Corporation ("M&M") by BHE Holdings ("BHE Holdings"). M&M is the parent of MPS, and an organization chart was included in the previous letter. As explained in that letter, MPS does not directly own an interest in the Maine Yankee spent fuel storage facility and is not a licensee, and no changes in licensed activities, the management of the facility, or in the day-to-day operation of the facility will result from the acquisition.

Maine Yankee has been permanently shut down, dismantled, and decommissioned. The only licensed activity at the Maine Yankee site is maintenance of an Independent Spent Fuel Storage Facility ("ISFSI"). The ISFSI is secured' and monitored, and access limited, by Maine Yankee officers and employees. The ISFSI does not involve "sensitive nuclear technology" or 1The ISFSI, on a 12 acre site and containing 64 dry storage casks with spent nuclear fuel and Greater Than Class C )

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TROUTMAN SANDERS U.S. Nuclear Regulatory Commission Attn: Document Control Desk August 27, 2010 Page 2 Restricted Data, and MPS and M&M have no role in reviewing, approving or otherwise influencing the day-to-day operational safety or security of the Maine Yankee facility. MPS, like other co-owners of Maine Yankee, is obligated to pay its pro-rata share of Maine Yankee's operating costs, which are predominately ISFSI-related.

This letter supplements the June 17th letter from Maine Yankee to address how the acquisition by BHE Holdings of M&M (parent of MPS) will not result in foreign ownership, control, domination, or influence over the licensee, Maine Yankee. As discussed in the Maine Yankee submittal, BHE Holdings is the present parent of Bangor Hydro Electric Company, which holds a 7 % ownership interest in Maine Yankee (the licensee). Under the pending transaction, BHE Holdings would separately become the parent of MPS, which would continue to hold a 5% interest in the licensee. BHE Holdings is incorporated in the State of Maine, and has its headquarters located in Bangor, Maine. BHE Holdings is a subsidiary of Emera US Holdings. Emera US Holdings, in turn, is a subsidiary of Emera, Inc., a Canadian corporation

("Emera").

Emera, as a corporate citizen of Canada, does not pose any national defense or security concern due to an indirect, cumulative 12% interest in Maine Yankee. The non-proliferation credentials of Canada are well established, as is Canada's important foreign policy relationship with the United States. Among other things, Canada supports the International Atomic Energy Agency ("IAEA") safeguards, is a member of the Nuclear Suppliers Group, and is a signatory to numerous international treaties and conventions relative to nonproliferation and nuclear safety, including the Treaty on Non-Proliferation of Nuclear Weapons, the Convention on Early Notification of a Nuclear Accident, and the Convention on Assistance in the Case of a Nuclear Accident or Radiological Emergency. Moreover, Canada entered into an Agreement for Cooperation on Civil Uses of Atomic Energy with the United States in 1955.

http://ola.iaea.org/factSheets/CountryDetails.asp?country=CA and http://www.nuclearsuppliersgroup.org/Leng/default.htm As stated previously, an indirect, cumulative 12% minority ownership interest in Maine Yankee through U.S. subsidiaries will not give BHE Holdings or, by extension, Emera, any rights or ability to control the licensed facility or decisions of the licensee. Maine Yankee is governed by a Board of Directors. Subsequent to the transaction, a representative of MPS and a representative of Bangor Hydro Electric Company would serve as directors on the Maine Yankee Board. These two (2) directors would represent a minority of the twelve (12) directors on the Board. They would also represent2 the totality of indirect corporate governance or influence over Maine Yankee by BHE or Emera.

2 The acquisition of M&M by BHE Holdings represents the addition of approximately 36,000 Maine Public Service transmission and distribution electric customers in eastern Maine to Bangor Hydro Electric Company's 117,000 customers in eastern Maine. The acquisition is not strategically related to Maine Yankee. Emera, directly or

TROUTMAN SANDERS U.S. Nuclear Regulatory Commission Attn: Document Control Desk August 27, 2010 Page 3 Each shareholder of Maine Yankee owning up to a 15% interest is entitled to appoint one member of the Maine Yankee Board, and shareholders owning 15% or more interest are entitled to appoint up to three (3) members of the Board. More specifically, Article V of Maine Yankee's Amended and Restated By-laws, adopted June 13, 2006 and effective July 1, 2006, includes the following provision:

The number of directors shall consist of such number of directors as are appointed by the shareholders in accordance with this Article V. Each shareholder shall be entitled to appoint to the Board of Directors as provided in this Article V, (a) one (1) director, in the case of a shareholder holding less than fifteen percent (15%) of the outstanding shares of common stock of the Corporation, or (b) up to three (3) directors, at such shareholder's option, in the case of a shareholder holding fifteen percent (15%) or more of the outstanding shares of common stock of the Corporation.

Accordingly, even a direct, minority owner of 12% in Maine Yankee would not and could not control the Boards' decisions due to the number of directors accorded shareholders based on percentage ownership interests.

The representatives of MPS and Bangor Hydro Electric Company who currently serve on the Maine Yankee Board are U.S. citizens, while one of the two alternates is a Canadian citizen.

In order to address any potential for a non-citizen of the United States from influencing the Maine Yankee Board's decisions, BHE Holdings and Emera propose a negation action plan that would assure that, as long as Maine Yankee is the licensee for the Maine Yankee facility, Board representatives of MPS and Bangor Hydro Electric would be U.S. citizens. This action, in the context of actual Maine Yankee activities and the small minority interests involved, is more than sufficient to assure compliance with Section 103(d) of the Atomic Energy Act, as amended, which addresses restrictions on foreign ownership of licensed facilities.

With respect to access to, or possession of, special nuclear material, Restricted Data, or Safeguards Information, the roles and responsibilities of minority co-owner Board representatives do not include operations or security-related activities, and these representatives do not have unescorted authorized access to the ISFSI. They do not have access to Restricted Data and, while access to Safeguards Information is not anticipated in their Director roles, access to such Information is controlled by the licensee in accordance with NRC requirements.

Nonetheless, upon appointment, MPS and Bangor Hydro Electric representatives to the Maine Yankee Board will be provided a written directive that Maine Yankee Board decisions must be, at all times, conducted in a manner consistent with the protection of health and safety and common defense and security of the United States. The directive will also instruct the indirectly through subsidiaries, has interests in fossil-fired, renewable and hydroelectric generating facilities; Emera has no direct or indirect interests in nuclear power plants.

TROUTMAN SANDERS U.S. Nuclear Regulatory Commission Attn: Document Control Desk August 27, 2010 Page 4 representatives that, in the event that Restricted Data and Safeguards Information were to become involved in their Board duties, that information will not be disclosed to Emera, and Emera will not seek access to such Data or Information from the representatives.

The negation action plan limiting Board representatives to U.S. citizens and the directive to the MPS and Bangor Hydro Electric representatives will be in the form of Emera and BHE Holdings resolutions, adopted by their respective Boards.

If you have any questions, please contact me at your earliest convenience. The parties to the acquisition anticipate the closing of the transaction in the next few weeks.

Very truly yours, Arthur H. Domby Copy: Thomas L. Fredrichs (NRC - NRR)

David A. Repka, Esq. (Counsel for Maine Yankee)

Susan L. Uttal, Esq. (NRC OGC) 2203760vl