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| issue date = 12/11/2006
| issue date = 12/11/2006
| title = Supplement to the SE Report for the NRC Order Approving Direct License Transfers for Beaver Valley, Units 1 and 2; Davis-Besse, Unit 1 and Perry, Unit 1
| title = Supplement to the SE Report for the NRC Order Approving Direct License Transfers for Beaver Valley, Units 1 and 2; Davis-Besse, Unit 1 and Perry, Unit 1
| author name = Wengert T J
| author name = Wengert T
| author affiliation = NRC/NRR/ADRO/DORL/LPLIII-2
| author affiliation = NRC/NRR/ADRO/DORL/LPLIII-2
| addressee name = Leidich G R
| addressee name = Leidich G
| addressee affiliation = FirstEnergy Nuclear Operating Co
| addressee affiliation = FirstEnergy Nuclear Operating Co
| docket = 05000334, 05000346, 05000412, 05000440
| docket = 05000334, 05000346, 05000412, 05000440
| license number = DPR-066, NPF-003, NPF-058, NPF-073
| license number = DPR-066, NPF-003, NPF-058, NPF-073
| contact person = Campbell S J, NRC/NRR/DORL, 415-1486
| contact person = Campbell S, NRC/NRR/DORL, 415-1486
| case reference number = TAC MD2120, TAC MD2121, TAC MD2122, TAC MD2123
| case reference number = TAC MD2120, TAC MD2121, TAC MD2122, TAC MD2123
| package number = ML062080312
| package number = ML062080312
Line 15: Line 15:
| page count = 12
| page count = 12
| project = TAC:MD2120, TAC:MD2121, TAC:MD2122, TAC:MD2123
| project = TAC:MD2120, TAC:MD2121, TAC:MD2122, TAC:MD2123
| stage = Supplement
| stage = Other
}}
}}


=Text=
=Text=
{{#Wiki_filter:OFFICIAL USE ONLY - PROPRIETARY INFORMATIONNotice:  Enclosure 2 contains ProprietaryInformation. Upon separation from Enclosure 2, this letter and Enclosure 1 are DECONTROLLED.OFFICIAL USE ONLY - PROPRIETARY INFORMATIONDecember 11, 2006Gary R. LeidichPresident and Chief Nuclear Officer FirstEnergy Nuclear Operating Company Mail Stop A-GO-19 76 South Main Street Akron, OH 44308
{{#Wiki_filter:OFFICIAL USE ONLY - PROPRIETARY INFORMATION December 11, 2006 Gary R. Leidich President and Chief Nuclear Officer FirstEnergy Nuclear Operating Company Mail Stop A-GO-19 76 South Main Street Akron, OH 44308


==SUBJECT:==
==SUBJECT:==
SUPPLEMENT TO THE DECEMBER 16, 2005, SAFETY EVALUATION FORTHE NRC ORDER APPROVING THE DIRECT LICENSE TRANSFERS FOR BEAVER VALLEY POWER STATION, UNITS 1 AND 2, DAVIS-BESSE NUCLEAR POWER STATION, UNIT NO. 1, AND PERRY NUCLEAR POWER PLANT, UNIT NO. 1 (TAC NOS. MD2120, MD2121, MD2122 AND MD2123)    
SUPPLEMENT TO THE DECEMBER 16, 2005, SAFETY EVALUATION FOR THE NRC ORDER APPROVING THE DIRECT LICENSE TRANSFERS FOR BEAVER VALLEY POWER STATION, UNITS 1 AND 2, DAVIS-BESSE NUCLEAR POWER STATION, UNIT NO. 1, AND PERRY NUCLEAR POWER PLANT, UNIT NO. 1 (TAC NOS. MD2120, MD2121, MD2122 AND MD2123)


==Dear Mr. Leidich:==
==Dear Mr. Leidich:==
By letters to the Nuclear Regulatory Commission (NRC) dated May 30 and August 15, 2006,you provided certain financial information regarding FirstEnergy Nuclear Generation Corp.'s (FENGenCo's) projected costs and revenues for 2006 through 2010. This information revised the projections submitted in the applications dated May 18 and June 1, 2005, as supplemented by letters dated July 15 and October 31, 2005, requesting approval of the direct transfers of the facility operating licenses for Beaver Valley Power Station, Units 1 and 2, Davis-Besse Nuclear Power Station, Unit No. 1, and Perry Nuclear Power Plant, Unit No. 1, to the extent held by Pennsylvania Power Company, Ohio Edison Company, OES Nuclear, Inc., the Cleveland Electric Illuminating Company, and the Toledo Edison Company regarding their respective ownership interests in the plants, to FENGenCo. On December 16, 2005, the NRC issued an Order approving the direct transfers and theassociated conforming license amendments. The transfers were consummated that day. The NRC staff examined the revised financial information to determine whether there wouldhave been different conclusions reached in the safety evaluation (SE) that supported the December 16, 2005, Order had such financial information been available at that time. The NRC staff determined that the conclusions would not have changed and thus remain valid. A Supplemental SE documenting the NRC staff's findings is enclosed.
 
OFFICIAL USE ONLY - PROPRIETARY INFORMATIONG. Leidich- 2 -OFFICIAL USE ONLY - PROPRIETARY INFORMATIONThe non-proprietary version of the supplemental SE is available for public inspection in theNRC's Public Document Room and accessible electronically from the Agencywide Documents Access and Management System's Electronic Reading Room. Sincerely,/RA/Thomas J. Wengert, Project Manager Plant Licensing Branch III-2 Division of Operating Reactor Licensing Office of Nuclear Reactor RegulationDocket Nos. 50-334, 50-412, 50-346 and 50-440
By letters to the Nuclear Regulatory Commission (NRC) dated May 30 and August 15, 2006, you provided certain financial information regarding FirstEnergy Nuclear Generation Corp.s (FENGenCos) projected costs and revenues for 2006 through 2010. This information revised the projections submitted in the applications dated May 18 and June 1, 2005, as supplemented by letters dated July 15 and October 31, 2005, requesting approval of the direct transfers of the facility operating licenses for Beaver Valley Power Station, Units 1 and 2, Davis-Besse Nuclear Power Station, Unit No. 1, and Perry Nuclear Power Plant, Unit No. 1, to the extent held by Pennsylvania Power Company, Ohio Edison Company, OES Nuclear, Inc., the Cleveland Electric Illuminating Company, and the Toledo Edison Company regarding their respective ownership interests in the plants, to FENGenCo.
On December 16, 2005, the NRC issued an Order approving the direct transfers and the associated conforming license amendments. The transfers were consummated that day.
The NRC staff examined the revised financial information to determine whether there would have been different conclusions reached in the safety evaluation (SE) that supported the December 16, 2005, Order had such financial information been available at that time. The NRC staff determined that the conclusions would not have changed and thus remain valid. A Supplemental SE documenting the NRC staffs findings is enclosed.
Notice: Enclosure 2 contains Proprietary Information. Upon separation from Enclosure 2, this letter and Enclosure 1 are DECONTROLLED.
OFFICIAL USE ONLY - PROPRIETARY INFORMATION
 
OFFICIAL USE ONLY - PROPRIETARY INFORMATION G. Leidich                                  The non-proprietary version of the supplemental SE is available for public inspection in the NRCs Public Document Room and accessible electronically from the Agencywide Documents Access and Management Systems Electronic Reading Room.
Sincerely,
                                          /RA/
Thomas J. Wengert, Project Manager Plant Licensing Branch III-2 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket Nos. 50-334, 50-412, 50-346 and 50-440


==Enclosures:==
==Enclosures:==
: 1. Supplement to SE (Non-proprietary)
: 1. Supplement to SE (Non-proprietary)
: 2. Supplement to SE (Proprietary)cc w/o Enclosure 2: See next page  
: 2. Supplement to SE (Proprietary) cc w/o Enclosure 2: See next page OFFICIAL USE ONLY - PROPRIETARY INFORMATION


ML062080312Letter, Revised Non-proprietary SE: ML062080170 Revised Proprietary SE:  ML062080300OFFICELPL3-2/PMLPL3-2/PMLPL1-1/PMLPL3-2/LAPFPB:BCLPL1-1/BCOGCLPL3-2/BCNAMETWengert:mwSCampbellTColburnEWhittEMcKennaRLauferSUttalDCollinsDATE12/11/06 9/23/069/26/06 12/11/06 9/22/06 9/26/06 11/27/06 10/4/06 SUPPLEMENT TO THE DECEMBER 16, 2005, SAFETY EVALUATIONFOR THE NRC ORDER APPROVING THE DIRECT LICENSE TRANSFERSFOR BEAVER VALLEY POWER STATION, UNITS 1 AND 2,DAVIS-BESSE NUCLEAR POWER STATION, UNIT NO. 1 ANDPERRY NUCLEAR POWER PLANT, UNIT NO. 1DOCKET NOS. 50-334, 50-412, 50-346 AND 50-440By letters to the Nuclear Regulatory Commission (NRC) dated May 18 (Agencywide DocumentsAccess and Management System (ADAMS) Accession Number ML051450431) and June 1, 2005 (ADAMS Accession Number ML051570371), as supplemented by letters dated July 15 (ADAMS Accession Number ML052070592) and October 31, 2005 (ADAMS Accession Number ML053120323), FirstEnergy Nuclear Operating Company (FENOC) submitted applications requesting approval of the direct transfers of the facility operating licenses for Beaver Valley Power Station, Units 1 (BVPS 1) and 2 (BVPS 2), Davis-Besse Nuclear Power Station, Unit No. 1 (Davis-Besse), and Perry Nuclear Power Plant, Unit No. 1 (Perry), to the extent held by Pennsylvania Power Company, Ohio Edison Company, OES Nuclear, Inc., the Cleveland Electric Illuminating Company, and the Toledo Edison Company regarding their respective ownership interests in the plants, to FirstEnergy Nuclear Generation Corp. (FENGenCo), a new nuclear generation subsidiary of FirstEnergy Corporation (FirstEnergy Corp.). The NRC issued an Order on November 15, 2005 (ADAMS Accession No. ML052790510),approving the direct transfers of the licenses. Subsequent to the issuance of the Order, the NRC staff determined that corrections were needed to the cover letter, Order, conforming amendments for BVPS 2 and Perry, and the non-proprietary and proprietary safety evaluations (SEs). Therefore, the NRC issued a corrected Order on December 16, 2005 (ADAMS Accession No. ML053460182). The December 16, 2005, corrected Order superceded the November 15, 2005, Order. By letter to the NRC dated May 30, 2006 (ADAMS Accession Number ML061590403), FENOCprovided revised financial information associated with its two applications dated May 18 and June 1, 2005. The May 30, 2006, letter stated that FENOC had identified "two errors of substance" that affected the financial projections submitted as part of the 2005 applications.
ML062080312 Letter, Revised Non-proprietary SE: ML062080170 Revised Proprietary SE: ML062080300 OFFICE LPL3-2/PM      LPL3-2/PM    LPL1-1/PM  LPL3-2/LA    PFPB:BC      LPL1-1/BC    OGC        LPL3-2/BC NAME    TWengert:mw    SCampbell    TColburn    EWhitt      EMcKenna    RLaufer      SUttal      DCollins DATE    12/11/06       9/23/06    9/26/06     12/11/06     9/22/06     9/26/06       11/27/06   10/4/06 SUPPLEMENT TO THE DECEMBER 16, 2005, SAFETY EVALUATION FOR THE NRC ORDER APPROVING THE DIRECT LICENSE TRANSFERS FOR BEAVER VALLEY POWER STATION, UNITS 1 AND 2, DAVIS-BESSE NUCLEAR POWER STATION, UNIT NO. 1 AND PERRY NUCLEAR POWER PLANT, UNIT NO. 1 DOCKET NOS. 50-334, 50-412, 50-346 AND 50-440 By letters to the Nuclear Regulatory Commission (NRC) dated May 18 (Agencywide Documents Access and Management System (ADAMS) Accession Number ML051450431) and June 1, 2005 (ADAMS Accession Number ML051570371), as supplemented by letters dated July 15 (ADAMS Accession Number ML052070592) and October 31, 2005 (ADAMS Accession Number ML053120323), FirstEnergy Nuclear Operating Company (FENOC) submitted applications requesting approval of the direct transfers of the facility operating licenses for Beaver Valley Power Station, Units 1 (BVPS 1) and 2 (BVPS 2), Davis-Besse Nuclear Power Station, Unit No. 1 (Davis-Besse), and Perry Nuclear Power Plant, Unit No. 1 (Perry), to the extent held by Pennsylvania Power Company, Ohio Edison Company, OES Nuclear, Inc., the Cleveland Electric Illuminating Company, and the Toledo Edison Company regarding their respective ownership interests in the plants, to FirstEnergy Nuclear Generation Corp. (FENGenCo), a new nuclear generation subsidiary of FirstEnergy Corporation (FirstEnergy Corp.).
The NRC issued an Order on November 15, 2005 (ADAMS Accession No. ML052790510),
approving the direct transfers of the licenses. Subsequent to the issuance of the Order, the NRC staff determined that corrections were needed to the cover letter, Order, conforming amendments for BVPS 2 and Perry, and the non-proprietary and proprietary safety evaluations (SEs). Therefore, the NRC issued a corrected Order on December 16, 2005 (ADAMS Accession No. ML053460182). The December 16, 2005, corrected Order superceded the November 15, 2005, Order.
By letter to the NRC dated May 30, 2006 (ADAMS Accession Number ML061590403), FENOC provided revised financial information associated with its two applications dated May 18 and June 1, 2005. The May 30, 2006, letter stated that FENOC had identified two errors of substance that affected the financial projections submitted as part of the 2005 applications.
First, there was a numerical transposition error in the debt-to-equity ratio in the financial model.
First, there was a numerical transposition error in the debt-to-equity ratio in the financial model.
Second, the submittals to the NRC did not comport with an associated submittal to the Federal Energy Regulatory Commission (FERC) regarding FERC Account 411 dealing with a FERC-approved rate structure. Both of these errors resulted in lower 5-year revenue projections than those in the original 2005 applications to the NRC. According to FENOC's May 30, 2006, letter, the inaccurate information submitted in its 2005applications to the NRC "did not have a significant implication for public health and safety" and, although "specific notification of the NRC was not required, the NRC was contacted on March 30, 2006, and made aware of the errors in the submittals."  Furthermore, FENOC stated that the corrected 5-year projected income statements included in the May 30, 2006, letter "were independently reviewed by FirstEnergy [Corp.] personnel not involved in preparation of the initial documents to provide a measure of assurance of their accuracy."  The May 30, 2006, letter stated that FENOC believes that the NRC staff's finding of adequate financial qualifications for FENGenCo, as described in the NRC SE supporting the NRC Order dated December 16, 2005 (the 2005 SE), remains valid because FENGenCo is projected to continue to earn revenues in excess of its operating and maintenance expenses during each of the 5 years of the 2006 through 2010 projection period. The letter further stated that the $400 million support agreement from FirstEnergy that was described in the original submittals is unaffected by the revised financial projections.Subsequently, in a letter to the NRC dated August 15, 2006 (ADAMS Accession NumberML062340523), FENOC stated that:The May 30, 2006 submittal indicated in a footnote to the financial statements thatcertain accretion costs were being recovered through the Power Supply Agreement (PSA) [with FE Solutions Corp., the proposed intermediate parent of FENGenCo], and therefore, included in the Operating Revenue projections based upon an anticipated application to the Federal Energy Regulatory Commission (FERC). FE [FirstEnergy Corp.] is requesting an adjustment in the FERC-approved rates to include FERC Account 411 (net of FERC Account 419 [decommissioning trust income]) in the rates.
Second, the submittals to the NRC did not comport with an associated submittal to the Federal Energy Regulatory Commission (FERC) regarding FERC Account 411 dealing with a FERC-approved rate structure. Both of these errors resulted in lower 5-year revenue projections than those in the original 2005 applications to the NRC.
Recent pre-application discussions with FERC have confirmed the anticipated inclusion of FERC Account 411 (net of FERC Account 419). However, FERC has recommended that certain non-cash amounts associated with the asset retirement costs be excluded from the rate base input. The revised pro forma income statements resulted in a lessthan 10% reduction in the yearly net income [from the levels projected in the May 30, 2006 submittal].According to the August 15, 2006, letter, FENOC believes that the above-described changes tothe FENGenCo financial projections are not significant.The NRC staff reviewed the May 30 and August 15, 2006, revised financial data submitted byFENOC in relation to the data submitted by FENOC in 2005, which is contained in the 2005 SE.
Enclosure 1
The table below is the NRC staff's summary of key financial data to show the extent to which revenues and net income have changed from the original projections made by FENOC in 2005 to the latest projections submitted in August 15, 2006. Proprietary financial information is indicated by brackets [      ]. (
 
According to FENOCs May 30, 2006, letter, the inaccurate information submitted in its 2005 applications to the NRC did not have a significant implication for public health and safety and, although specific notification of the NRC was not required, the NRC was contacted on March 30, 2006, and made aware of the errors in the submittals. Furthermore, FENOC stated that the corrected 5-year projected income statements included in the May 30, 2006, letter were independently reviewed by FirstEnergy [Corp.] personnel not involved in preparation of the initial documents to provide a measure of assurance of their accuracy. The May 30, 2006, letter stated that FENOC believes that the NRC staffs finding of adequate financial qualifications for FENGenCo, as described in the NRC SE supporting the NRC Order dated December 16, 2005 (the 2005 SE), remains valid because FENGenCo is projected to continue to earn revenues in excess of its operating and maintenance expenses during each of the 5 years of the 2006 through 2010 projection period. The letter further stated that the $400 million support agreement from FirstEnergy that was described in the original submittals is unaffected by the revised financial projections.
Subsequently, in a letter to the NRC dated August 15, 2006 (ADAMS Accession Number ML062340523), FENOC stated that:
The May 30, 2006 submittal indicated in a footnote to the financial statements that certain accretion costs were being recovered through the Power Supply Agreement (PSA) [with FE Solutions Corp., the proposed intermediate parent of FENGenCo], and therefore, included in the Operating Revenue projections based upon an anticipated application to the Federal Energy Regulatory Commission (FERC). FE [FirstEnergy Corp.] is requesting an adjustment in the FERC-approved rates to include FERC Account 411 (net of FERC Account 419 [decommissioning trust income]) in the rates.
Recent pre-application discussions with FERC have confirmed the anticipated inclusion of FERC Account 411 (net of FERC Account 419). However, FERC has recommended that certain non-cash amounts associated with the asset retirement costs be excluded from the rate base input. The revised pro forma income statements resulted in a less than 10% reduction in the yearly net income [from the levels projected in the May 30, 2006 submittal].
According to the August 15, 2006, letter, FENOC believes that the above-described changes to the FENGenCo financial projections are not significant.
The NRC staff reviewed the May 30 and August 15, 2006, revised financial data submitted by FENOC in relation to the data submitted by FENOC in 2005, which is contained in the 2005 SE.
The table below is the NRC staffs summary of key financial data to show the extent to which revenues and net income have changed from the original projections made by FENOC in 2005 to the latest projections submitted in August 15, 2006. Proprietary financial information is indicated by brackets [      ].
 
(


==SUMMARY==
==SUMMARY==
OF) FENGENCO PROJECTED INCOME STATEMENT ($K) 2006 2007 2008 2009 20102005 PROJECTIONSOperating Revenue[             ][             ][             ][             ][             ]Expenses/Other Income [           ] [             ][             ][             ][             ]Net Income[           ][           ][           ][           ][           ]May 30, 2006 PROJECTIONSOperating Revenue[             ][           ][           ][             ][             ]Expenses/Other Income[           ][           ][           ][           ][           ]Net Income[           ][           ][           ][           ][           ]August 15, 2006 PROJECTIONSOperating Income[             ][           ][           ][             ][             ]Expenses/Other Income[           ][           ][           ][           ][           ]Net Income[           ][           ][           ][           ][           ]The range of net income in the 2005 projections is approximately [                         ], comparedto the range in the August 15, 2006 projections of approximately [                     ]. While the average annual difference between the two sets of projections is about [               ] greater for the 2005 projections, the net income for each of the five years (2006-2010) in the August 15, 2006, projections still indicates revenues projected to be greater than expenses by about
OF) FENGENCO PROJECTED INCOME STATEMENT ($K) 2006         2007       2008           2009             2010 2005 PROJECTIONS Operating Revenue     [         ] [         ] [         ]   [         ]     [         ]
[               ] or more for each year.Based on the revised financial information submitted by FENOC, and given that the$400 million support agreement from FirstEnergy is not changed by the revised projections, the NRC staff concludes that the changes in the financial data from the 2005 applications to the August 15, 2006, projections do not have a material impact on the conclusions of the 2005 SE.Principal Contributor: R. Uleck Date: December 11, 2006 Beaver Valley Power Station, Unit Nos. 1 and 2 cc:Joseph J. Hagan Senior Vice President of Operations and Chief Operating Officer FirstEnergy Nuclear Operating Company Mail Stop A-GO-14 76 South Main Street Akron, OH 44308Danny L. PaceSenior Vice President, Fleet Engineering FirstEnergy Nuclear Operating Company Mail Stop A-GO-14 76 South Main Street Akron, OH 44308Jeannie M. RinckelVice President, Fleet Oversight FirstEnergy Nuclear Operating Company Mail Stop A-GO-14 76 South Main Street Akron, OH 44308David W. Jenkins, AttorneyFirstEnergy Corporation Mail Stop A-GO-18 76 South Main Street Akron, OH 44308Manager, Fleet LicensingFirstEnergy Nuclear Operating Company Mail Stop A-GHE-107 395 Ghent Road Akron, OH 44333 James H. LashSite Vice President FirstEnergy Nuclear Operating Company Beaver Valley Power Station Mail Stop A-BV-SEB1 P.O. Box 4, Route 168 Shippingport, PA 15077Lew W. MyersExecutive Vice President, Special Projects FirstEnergy Nuclear Operating Company Beaver Valley Power Station Mail Stop A-BV-SGRP P.O. Box 4, Route 168 Shippingport, PA 15077Manager, Site Regulatory ComplianceFirstEnergy Nuclear Operating Company Beaver Valley Power Station Mail Stop A-BV-A P.O. Box 4, Route 168 Shippingport, PA  15077Commissioner James R. LewisWest Virginia Division of Labor 749-B, Building No. 6 Capitol Complex Charleston, WV  25305Director, Utilities DepartmentPublic Utilities Commission 180 East Broad Street Columbus, OH 43266-0573Director, Pennsylvania Emergency   Management Agency 2605 Interstate Dr.
Expenses/Other Income         [       ] [         ] [       ]     [         ]     [         ]
Harrisburg, PA  17110-9364Ohio EPA-DERRATTN:  Zack A. Clayton P.O. Box 1049 Columbus, OH 43266-0149 Beaver Valley Power Station, Unit Nos. 1 and 2 cc:
Net Income       [       ]   [       ]   [       ]     [       ]       [       ]
Dr. Judith JohnsrudEnvironmental Coalition on Nuclear Power Sierra Club 433 Orlando Avenue State College, PA  16803DirectorBureau of Radiation Protection Pennsylvania Department of Environmental Protection Rachel Carson State Office Building P.O. Box 8469 Harrisburg, PA 17105-8469Mayor of the Borough of ShippingportP.O. Box 3 Shippingport, PA  15077Regional Administrator, Region IU.S. Nuclear Regulatory Commission
May 30, 2006 PROJECTIONS Operating Revenue     [         ]   [       ]   [       ] [           ]   [           ]
Expenses/Other Income         [       ]   [       ]   [     ]       [       ]       [       ]
Net Income         [     ]     [     ]     [     ]       [     ]         [     ]
August 15, 2006 PROJECTIONS Operating Income     [         ]   [       ]   [       ] [           ]   [           ]
Expenses/Other Income         [       ]   [       ]   [     ]       [       ]       [       ]
Net Income         [     ]     [     ]     [     ]       [     ]         [     ]
The range of net income in the 2005 projections is approximately [                     ], compared to the range in the August 15, 2006 projections of approximately [                 ]. While the average annual difference between the two sets of projections is about [               ] greater for the 2005 projections, the net income for each of the five years (2006-2010) in the August 15, 2006, projections still indicates revenues projected to be greater than expenses by about
[         ] or more for each year.
Based on the revised financial information submitted by FENOC, and given that the
$400 million support agreement from FirstEnergy is not changed by the revised projections, the NRC staff concludes that the changes in the financial data from the 2005 applications to the August 15, 2006, projections do not have a material impact on the conclusions of the 2005 SE.
Principal Contributor: R. Uleck Date: December 11, 2006
 
Beaver Valley Power Station, Unit Nos. 1 and 2 cc:
Joseph J. Hagan                               Lew W. Myers Senior Vice President of Operations           Executive Vice President, Special Projects and Chief Operating Officer                   FirstEnergy Nuclear Operating Company FirstEnergy Nuclear Operating Company          Beaver Valley Power Station Mail Stop A-GO-14                             Mail Stop A-BV-SGRP 76 South Main Street                           P.O. Box 4, Route 168 Akron, OH 44308                                Shippingport, PA 15077 Danny L. Pace                                  Manager, Site Regulatory Compliance Senior Vice President, Fleet Engineering       FirstEnergy Nuclear Operating Company FirstEnergy Nuclear Operating Company          Beaver Valley Power Station Mail Stop A-GO-14                             Mail Stop A-BV-A 76 South Main Street                           P.O. Box 4, Route 168 Akron, OH 44308                                Shippingport, PA 15077 Jeannie M. Rinckel                            Commissioner James R. Lewis Vice President, Fleet Oversight               West Virginia Division of Labor FirstEnergy Nuclear Operating Company         749-B, Building No. 6 Mail Stop A-GO-14                             Capitol Complex 76 South Main Street                           Charleston, WV 25305 Akron, OH 44308 Director, Utilities Department David W. Jenkins, Attorney                    Public Utilities Commission FirstEnergy Corporation                       180 East Broad Street Mail Stop A-GO-18                             Columbus, OH 43266-0573 76 South Main Street Akron, OH 44308                                Director, Pennsylvania Emergency Management Agency Manager, Fleet Licensing                      2605 Interstate Dr.
FirstEnergy Nuclear Operating Company         Harrisburg, PA 17110-9364 Mail Stop A-GHE-107 395 Ghent Road                                 Ohio EPA-DERR Akron, OH 44333                               ATTN: Zack A. Clayton P.O. Box 1049 James H. Lash                                  Columbus, OH 43266-0149 Site Vice President FirstEnergy Nuclear Operating Company Beaver Valley Power Station Mail Stop A-BV-SEB1 P.O. Box 4, Route 168 Shippingport, PA 15077
 
Beaver Valley Power Station, Unit Nos. 1 and 2 cc:
Dr. Judith Johnsrud Environmental Coalition on Nuclear Power Sierra Club 433 Orlando Avenue State College, PA 16803 Director Bureau of Radiation Protection Pennsylvania Department of Environmental Protection Rachel Carson State Office Building P.O. Box 8469 Harrisburg, PA 17105-8469 Mayor of the Borough of Shippingport P.O. Box 3 Shippingport, PA 15077 Regional Administrator, Region I U.S. Nuclear Regulatory Commission 475 Allendale Road King of Prussia, PA 19406 Resident Inspector U.S. Nuclear Regulatory Commission P.O. Box 298 Shippingport, PA 15077
 
Davis-Besse Nuclear Power Station, Unit 1 cc:
Manager - Regulatory Affairs              State of Ohio FirstEnergy Nuclear Operating Company     Public Utilities Commission Davis-Besse Nuclear Power Station         180 East Broad Street 5501 North State - Route 2                Columbus, OH 43266-0573 Oak Harbor, OH 43449-9760 Attorney General Director, Ohio Department of Commerce      Office of Attorney General Division of Industrial Compliance          30 East Broad Street Bureau of Operations & Maintenance        Columbus, OH 43216 6606 Tussing Road P.O. Box 4009                              President, Board of County Reynoldsburg, OH 43068-9009                Commissioners of Ottawa County Port Clinton, OH 43252 Regional Administrator U.S. Nuclear Regulatory Commission        President, Board of County 801 Warrenville Road                      Commissioners of Lucas County Lisle, IL 60523-4351                      One Government Center, Suite 800 Toledo, OH 43604-6506 Resident Inspector U.S. Nuclear Regulatory Commission        The Honorable Dennis J. Kucinich 5503 North State Route 2                  United States House of Representatives Oak Harbor, OH 43449-9760                  Washington, D.C. 20515 Barry Allen, Plant Manager                The Honorable Dennis J. Kucinich FirstEnergy Nuclear Operating Company      United States House of Representatives Davis-Besse Nuclear Power Station          14400 Detroit Avenue 5501 North State - Route 2                Lakewood, OH 44107 Oak Harbor, OH 43449-9760 Joseph J. Hagan Dennis Clum                                Senior Vice President of Operations and Radiological Assistance Section Supervisor Chief Operating Officer Bureau of Radiation Protection            FirstEnergy Nuclear Operating Company Ohio Department of Health                  Mail Stop A-GO-14 P.O. Box 118                              76 South Main Street Columbus, OH 43266-0118                    Akron, OH 44308 Carol OClaire, Chief, Radiological Branch David W. Jenkins, Attorney Ohio Emergency Management Agency           FirstEnergy Corporation 2855 West Dublin Granville Road            Mail Stop A-GO-18 Columbus, OH 43235-2206                    76 South Main Street Akron, OH 44308 Zack A. Clayton DERR Ohio Environmental Protection Agency P.O. Box 1049 Columbus, OH 43266-0149
 
Davis-Besse Nuclear Power Station, Unit 1 cc:
Danny L. Pace Senior Vice President, Fleet Engineering FirstEnergy Nuclear Operating Company Mail Stop A-GO-14 76 South Main Street Akron, OH 44308 Manager, Fleet Licensing FirstEnergy Nuclear Operating Company Mail Stop A-GHE-107 395 Ghent Road Akron, OH 44333 Manager, Site Regulatory Compliance FirstEnergy Nuclear Operating Company Davis-Besse Nuclear Power Station Mail Stop A-DB-3065 5501 North State Route 2 Oak Harbor, OH 43449-9760 Jeannie M. Rinckel Vice President, Fleet Oversight FirstEnergy Nuclear Operating Company Mail Stop A-GO-14 76 South Main Street Akron, OH 44308 Mr. Mark B. Bezilla Vice President FirstEnergy Nuclear Operating Company Davis-Besse Nuclear Power Station Mail Stop A-DB-3080 5501 North State Route 2 Oak Harbor, OH 43449-9760
 
Perry Nuclear Power Plant, Unit 1 cc:
David W. Jenkins, Attorney                Dennis Clum FirstEnergy Corporation                    Radiological Assistance Section Supervisor Mail Stop A-GO-18                          Bureau of Radiation Protection 76 South Main Street                      Ohio Department of Health Akron, OH 44308                            P.O. Box 118 Columbus, OH 43266-0118 Resident Inspector's Office U.S. Nuclear Regulatory Commission        Zack A. Clayton P.O. Box 331                              DERR Perry, OH 44081-0331                      Ohio Environmental Protection Agency ATTN: Mr. Zack A. Clayton Regional Administrator, Region III        P.O. Box 1049 U.S. Nuclear Regulatory Commission         Columbus, OH 43266-0149 2443 Warrenville Road Lisle, IL 60532-4531                      Chairman Perry Township Board of Trustees Sue Hiatt                                  3750 Center Road, Box 65 OCRE Interim Representative                Perry, OH 44081 8275 Munson Mentor, OH 44060                          Daniel Z. Fisher Transportation Department Manager - Regulatory Compliance            Public Utilities Commission FirstEnergy Nuclear Operating Company      180 East Broad Street Perry Nuclear Power Plant                  Columbus, OH 43215-3793 P.O. Box 97, A210 10 Center Road                            Joseph J. Hagan Perry, OH 44081                            Senior Vice President of Operations and Chief Operating Officer Mayor, Village of North Perry              First Energy Nuclear Operating Company North Perry Village Hall                  Mail Stop A-GO-14 4449 Lockwood Road                        76 South Main Street North Perry Village, OH 44081              Akron, OH 44308 Donna Owens, Director                      Director, Regulatory Affairs Ohio Department of Commerce                FirstEnergy Nuclear Operating Company Division of Industrial Compliance          395 Ghent Road Bureau of Operations & Maintenance        Akron, OH 44333 6606 Tussing Road P.O. Box 4009 Reynoldsburg, OH 43068-9009 Carol OClaire, Chief, Radiological Branch Ohio Emergency Management Agency 2855 West Dublin Granville Road Columbus, OH 43235-7150 Mayor, Village of Perry P.O. Box 100 Perry, OH 44081-0100


475 Allendale Road King of Prussia, PA  19406Resident InspectorU.S. Nuclear Regulatory Commission P.O. Box 298 Shippingport, PA  15077 Davis-Besse Nuclear Power Station, Unit 1 cc:Manager - Regulatory AffairsFirstEnergy Nuclear Operating CompanyDavis-Besse Nuclear Power Station5501 North State - Route 2Oak Harbor, OH  43449-9760Director, Ohio Department of CommerceDivision of Industrial ComplianceBureau of Operations & Maintenance6606 Tussing RoadP.O. Box 4009Reynoldsburg, OH  43068-9009Regional AdministratorU.S. Nuclear Regulatory Commission801 Warrenville RoadLisle, IL  60523-4351Resident InspectorU.S. Nuclear Regulatory Commission5503 North State Route 2Oak Harbor, OH  43449-9760Barry Allen, Plant ManagerFirstEnergy Nuclear Operating CompanyDavis-Besse Nuclear Power Station5501 North State - Route 2Oak Harbor, OH  43449-9760 Dennis ClumRadiological Assistance Section SupervisorBureau of Radiation ProtectionOhio Department of HealthP.O. Box 118Columbus, OH  43266-0118Carol O'Claire, Chief, Radiological BranchOhio Emergency Management Agency2855 West Dublin Granville RoadColumbus, OH  43235-2206Zack A. Clayton DERROhio Environmental Protection AgencyP.O. Box 1049Columbus, OH  43266-0149State of OhioPublic Utilities Commission180 East Broad StreetColumbus, OH  43266-0573Attorney General Office of Attorney General30 East Broad StreetColumbus, OH  43216President, Board of CountyCommissioners of Ottawa CountyPort Clinton, OH  43252 President, Board of CountyCommissioners of Lucas CountyOne Government Center, Suite 800Toledo, OH  43604-6506The Honorable Dennis J. KucinichUnited States House of RepresentativesWashington, D.C. 20515The Honorable Dennis J. Kucinich United States House of Representatives14400 Detroit AvenueLakewood, OH 44107    Joseph J. HaganSenior Vice President of Operations and    Chief Operating OfficerFirstEnergy Nuclear Operating CompanyMail Stop A-GO-1476 South Main StreetAkron, OH  44308David W. Jenkins, AttorneyFirstEnergy CorporationMail Stop A-GO-1876 South Main StreetAkron, OH  44308 Davis-Besse Nuclear Power Station, Unit 1 cc:
Perry Nuclear Power Plant, Unit 1 cc:
Danny L. PaceSenior Vice President, Fleet EngineeringFirstEnergy Nuclear Operating CompanyMail Stop A-GO-1476 South Main StreetAkron, OH  44308Manager, Fleet LicensingFirstEnergy Nuclear Operating CompanyMail Stop A-GHE-107395 Ghent RoadAkron, OH  44333Manager, Site Regulatory ComplianceFirstEnergy Nuclear Operating CompanyDavis-Besse Nuclear Power StationMail Stop A-DB-30655501 North State Route 2Oak Harbor, OH  43449-9760Jeannie M. RinckelVice President, Fleet OversightFirstEnergy Nuclear Operating CompanyMail Stop A-GO-1476 South Main StreetAkron, OH  44308Mr. Mark B. BezillaVice PresidentFirstEnergy Nuclear Operating CompanyDavis-Besse Nuclear Power StationMail Stop A-DB-30805501 North State Route 2Oak Harbor, OH  43449-9760 Perry Nuclear Power Plant, Unit 1 cc:
Danny L. Pace Senior Vice President, Fleet Engineering FirstEnergy Nuclear Operating Company Mail Stop A-GO-14 76 South Main Street Akron, OH 44308 Jeannie M. Rinckel Vice President, Fleet Oversight FirstEnergy Nuclear Operating Company Mail Stop A-GO-14 76 South Main Street Akron, OH 44308 Manager, Fleet Licensing FirstEnergy Nuclear Operating Company Mail Stop A-GHE-107 395 Ghent Road Akron, OH 44333 L. W. Pearce Vice President FirstEnergy Nuclear Operating Company Perry Nuclear Power Plant Mail Stop A-PY-A290 P.O. Box 97, 10 Center Road Perry, OH 44081-0097 Manager, Site Regulatory Compliance FirstEnergy Nuclear Operating Company Perry Nuclear Power Plant Mail Stop A-PY-A200 P.O. Box 97, 10 Center Road Perry, OH 44081-0097 Richard Anderson Vice President FirstEnergy Nuclear Operating Company Perry Nuclear Power Plant Mail Stop A-PY-A290 P.O. Box 97, 10 Center Road Perry, OH 44081-0097}}
David W. Jenkins, AttorneyFirstEnergy CorporationMail Stop A-GO-1876 South Main StreetAkron, OH  44308Resident Inspector's OfficeU.S. Nuclear Regulatory CommissionP.O. Box 331Perry, OH  44081-0331Regional Administrator, Region IIIU.S. Nuclear Regulatory Commission2443 Warrenville RoadLisle, IL  60532-4531Sue HiattOCRE Interim Representative8275 MunsonMentor, OH  44060Manager - Regulatory ComplianceFirstEnergy Nuclear Operating CompanyPerry Nuclear Power PlantP.O. Box 97, A21010 Center RoadPerry, OH  44081Mayor, Village of North PerryNorth Perry Village Hall4449 Lockwood RoadNorth Perry Village, OH  44081Donna Owens, DirectorOhio Department of CommerceDivision of Industrial ComplianceBureau of Operations & Maintenance6606 Tussing RoadP.O. Box 4009Reynoldsburg, OH  43068-9009Carol O'Claire, Chief, Radiological BranchOhio Emergency Management Agency2855 West Dublin Granville RoadColumbus, OH  43235-7150Mayor, Village of PerryP.O. Box 100Perry, OH  44081-0100 Dennis ClumRadiological Assistance Section SupervisorBureau of Radiation ProtectionOhio Department of HealthP.O. Box 118Columbus, OH  43266-0118Zack A. Clayton DERROhio Environmental Protection AgencyATTN:  Mr. Zack A. ClaytonP.O. Box 1049Columbus, OH  43266-0149ChairmanPerry Township Board of Trustees3750 Center Road, Box 65Perry, OH  44081Daniel Z. FisherTransportation DepartmentPublic Utilities Commission180 East Broad StreetColumbus, OH  43215-3793Joseph J. HaganSenior Vice President of Operations and  Chief Operating OfficerFirst Energy Nuclear Operating CompanyMail Stop A-GO-1476 South Main StreetAkron, OH  44308Director, Regulatory AffairsFirstEnergy Nuclear Operating Company395 Ghent Road Akron, OH  44333 Perry Nuclear Power Plant, Unit 1 cc:
Danny L. Pace Senior Vice President, Fleet EngineeringFirstEnergy Nuclear Operating CompanyMail Stop A-GO-1476 South Main StreetAkron, OH 44308Jeannie M. RinckelVice President, Fleet OversightFirstEnergy Nuclear Operating CompanyMail Stop A-GO-1476 South Main StreetAkron, OH 44308Manager, Fleet LicensingFirstEnergy Nuclear Operating CompanyMail Stop A-GHE-107395 Ghent RoadAkron, OH 44333L. W. PearceVice PresidentFirstEnergy Nuclear Operating CompanyPerry Nuclear Power PlantMail Stop A-PY-A290P.O. Box 97, 10 Center RoadPerry, OH 44081-0097Manager, Site Regulatory ComplianceFirstEnergy Nuclear Operating CompanyPerry Nuclear Power PlantMail Stop A-PY-A200P.O. Box 97, 10 Center RoadPerry, OH 44081-0097Richard AndersonVice PresidentFirstEnergy Nuclear Operating CompanyPerry Nuclear Power PlantMail Stop A-PY-A290P.O. Box 97, 10 Center RoadPerry, OH 44081-0097}}

Latest revision as of 03:28, 14 March 2020

Supplement to the SE Report for the NRC Order Approving Direct License Transfers for Beaver Valley, Units 1 and 2; Davis-Besse, Unit 1 and Perry, Unit 1
ML062080170
Person / Time
Site: Beaver Valley, Davis Besse, Perry
Issue date: 12/11/2006
From: Thomas Wengert
NRC/NRR/ADRO/DORL/LPLIII-2
To: Leidich G
FirstEnergy Nuclear Operating Co
Campbell S, NRC/NRR/DORL, 415-1486
Shared Package
ML062080312 List:
References
TAC MD2120, TAC MD2121, TAC MD2122, TAC MD2123
Download: ML062080170 (12)
v • d • e


Text

OFFICIAL USE ONLY - PROPRIETARY INFORMATION December 11, 2006 Gary R. Leidich President and Chief Nuclear Officer FirstEnergy Nuclear Operating Company Mail Stop A-GO-19 76 South Main Street Akron, OH 44308

SUBJECT:

SUPPLEMENT TO THE DECEMBER 16, 2005, SAFETY EVALUATION FOR THE NRC ORDER APPROVING THE DIRECT LICENSE TRANSFERS FOR BEAVER VALLEY POWER STATION, UNITS 1 AND 2, DAVIS-BESSE NUCLEAR POWER STATION, UNIT NO. 1, AND PERRY NUCLEAR POWER PLANT, UNIT NO. 1 (TAC NOS. MD2120, MD2121, MD2122 AND MD2123)

Dear Mr. Leidich:

By letters to the Nuclear Regulatory Commission (NRC) dated May 30 and August 15, 2006, you provided certain financial information regarding FirstEnergy Nuclear Generation Corp.s (FENGenCos) projected costs and revenues for 2006 through 2010. This information revised the projections submitted in the applications dated May 18 and June 1, 2005, as supplemented by letters dated July 15 and October 31, 2005, requesting approval of the direct transfers of the facility operating licenses for Beaver Valley Power Station, Units 1 and 2, Davis-Besse Nuclear Power Station, Unit No. 1, and Perry Nuclear Power Plant, Unit No. 1, to the extent held by Pennsylvania Power Company, Ohio Edison Company, OES Nuclear, Inc., the Cleveland Electric Illuminating Company, and the Toledo Edison Company regarding their respective ownership interests in the plants, to FENGenCo.

On December 16, 2005, the NRC issued an Order approving the direct transfers and the associated conforming license amendments. The transfers were consummated that day.

The NRC staff examined the revised financial information to determine whether there would have been different conclusions reached in the safety evaluation (SE) that supported the December 16, 2005, Order had such financial information been available at that time. The NRC staff determined that the conclusions would not have changed and thus remain valid. A Supplemental SE documenting the NRC staffs findings is enclosed.

Notice: Enclosure 2 contains Proprietary Information. Upon separation from Enclosure 2, this letter and Enclosure 1 are DECONTROLLED.

OFFICIAL USE ONLY - PROPRIETARY INFORMATION

OFFICIAL USE ONLY - PROPRIETARY INFORMATION G. Leidich The non-proprietary version of the supplemental SE is available for public inspection in the NRCs Public Document Room and accessible electronically from the Agencywide Documents Access and Management Systems Electronic Reading Room.

Sincerely,

/RA/

Thomas J. Wengert, Project Manager Plant Licensing Branch III-2 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket Nos. 50-334, 50-412, 50-346 and 50-440

Enclosures:

1. Supplement to SE (Non-proprietary)
2. Supplement to SE (Proprietary) cc w/o Enclosure 2: See next page OFFICIAL USE ONLY - PROPRIETARY INFORMATION

ML062080312 Letter, Revised Non-proprietary SE: ML062080170 Revised Proprietary SE: ML062080300 OFFICE LPL3-2/PM LPL3-2/PM LPL1-1/PM LPL3-2/LA PFPB:BC LPL1-1/BC OGC LPL3-2/BC NAME TWengert:mw SCampbell TColburn EWhitt EMcKenna RLaufer SUttal DCollins DATE 12/11/06 9/23/06 9/26/06 12/11/06 9/22/06 9/26/06 11/27/06 10/4/06 SUPPLEMENT TO THE DECEMBER 16, 2005, SAFETY EVALUATION FOR THE NRC ORDER APPROVING THE DIRECT LICENSE TRANSFERS FOR BEAVER VALLEY POWER STATION, UNITS 1 AND 2, DAVIS-BESSE NUCLEAR POWER STATION, UNIT NO. 1 AND PERRY NUCLEAR POWER PLANT, UNIT NO. 1 DOCKET NOS. 50-334, 50-412, 50-346 AND 50-440 By letters to the Nuclear Regulatory Commission (NRC) dated May 18 (Agencywide Documents Access and Management System (ADAMS) Accession Number ML051450431) and June 1, 2005 (ADAMS Accession Number ML051570371), as supplemented by letters dated July 15 (ADAMS Accession Number ML052070592) and October 31, 2005 (ADAMS Accession Number ML053120323), FirstEnergy Nuclear Operating Company (FENOC) submitted applications requesting approval of the direct transfers of the facility operating licenses for Beaver Valley Power Station, Units 1 (BVPS 1) and 2 (BVPS 2), Davis-Besse Nuclear Power Station, Unit No. 1 (Davis-Besse), and Perry Nuclear Power Plant, Unit No. 1 (Perry), to the extent held by Pennsylvania Power Company, Ohio Edison Company, OES Nuclear, Inc., the Cleveland Electric Illuminating Company, and the Toledo Edison Company regarding their respective ownership interests in the plants, to FirstEnergy Nuclear Generation Corp. (FENGenCo), a new nuclear generation subsidiary of FirstEnergy Corporation (FirstEnergy Corp.).

The NRC issued an Order on November 15, 2005 (ADAMS Accession No. ML052790510),

approving the direct transfers of the licenses. Subsequent to the issuance of the Order, the NRC staff determined that corrections were needed to the cover letter, Order, conforming amendments for BVPS 2 and Perry, and the non-proprietary and proprietary safety evaluations (SEs). Therefore, the NRC issued a corrected Order on December 16, 2005 (ADAMS Accession No. ML053460182). The December 16, 2005, corrected Order superceded the November 15, 2005, Order.

By letter to the NRC dated May 30, 2006 (ADAMS Accession Number ML061590403), FENOC provided revised financial information associated with its two applications dated May 18 and June 1, 2005. The May 30, 2006, letter stated that FENOC had identified two errors of substance that affected the financial projections submitted as part of the 2005 applications.

First, there was a numerical transposition error in the debt-to-equity ratio in the financial model.

Second, the submittals to the NRC did not comport with an associated submittal to the Federal Energy Regulatory Commission (FERC) regarding FERC Account 411 dealing with a FERC-approved rate structure. Both of these errors resulted in lower 5-year revenue projections than those in the original 2005 applications to the NRC.

Enclosure 1

According to FENOCs May 30, 2006, letter, the inaccurate information submitted in its 2005 applications to the NRC did not have a significant implication for public health and safety and, although specific notification of the NRC was not required, the NRC was contacted on March 30, 2006, and made aware of the errors in the submittals. Furthermore, FENOC stated that the corrected 5-year projected income statements included in the May 30, 2006, letter were independently reviewed by FirstEnergy [Corp.] personnel not involved in preparation of the initial documents to provide a measure of assurance of their accuracy. The May 30, 2006, letter stated that FENOC believes that the NRC staffs finding of adequate financial qualifications for FENGenCo, as described in the NRC SE supporting the NRC Order dated December 16, 2005 (the 2005 SE), remains valid because FENGenCo is projected to continue to earn revenues in excess of its operating and maintenance expenses during each of the 5 years of the 2006 through 2010 projection period. The letter further stated that the $400 million support agreement from FirstEnergy that was described in the original submittals is unaffected by the revised financial projections.

Subsequently, in a letter to the NRC dated August 15, 2006 (ADAMS Accession Number ML062340523), FENOC stated that:

The May 30, 2006 submittal indicated in a footnote to the financial statements that certain accretion costs were being recovered through the Power Supply Agreement (PSA) [with FE Solutions Corp., the proposed intermediate parent of FENGenCo], and therefore, included in the Operating Revenue projections based upon an anticipated application to the Federal Energy Regulatory Commission (FERC). FE [FirstEnergy Corp.] is requesting an adjustment in the FERC-approved rates to include FERC Account 411 (net of FERC Account 419 [decommissioning trust income]) in the rates.

Recent pre-application discussions with FERC have confirmed the anticipated inclusion of FERC Account 411 (net of FERC Account 419). However, FERC has recommended that certain non-cash amounts associated with the asset retirement costs be excluded from the rate base input. The revised pro forma income statements resulted in a less than 10% reduction in the yearly net income [from the levels projected in the May 30, 2006 submittal].

According to the August 15, 2006, letter, FENOC believes that the above-described changes to the FENGenCo financial projections are not significant.

The NRC staff reviewed the May 30 and August 15, 2006, revised financial data submitted by FENOC in relation to the data submitted by FENOC in 2005, which is contained in the 2005 SE.

The table below is the NRC staffs summary of key financial data to show the extent to which revenues and net income have changed from the original projections made by FENOC in 2005 to the latest projections submitted in August 15, 2006. Proprietary financial information is indicated by brackets [ ].

(

SUMMARY

OF) FENGENCO PROJECTED INCOME STATEMENT ($K) 2006 2007 2008 2009 2010 2005 PROJECTIONS Operating Revenue [ ] [ ] [ ] [ ] [ ]

Expenses/Other Income [ ] [ ] [ ] [ ] [ ]

Net Income [ ] [ ] [ ] [ ] [ ]

May 30, 2006 PROJECTIONS Operating Revenue [ ] [ ] [ ] [ ] [ ]

Expenses/Other Income [ ] [ ] [ ] [ ] [ ]

Net Income [ ] [ ] [ ] [ ] [ ]

August 15, 2006 PROJECTIONS Operating Income [ ] [ ] [ ] [ ] [ ]

Expenses/Other Income [ ] [ ] [ ] [ ] [ ]

Net Income [ ] [ ] [ ] [ ] [ ]

The range of net income in the 2005 projections is approximately [ ], compared to the range in the August 15, 2006 projections of approximately [ ]. While the average annual difference between the two sets of projections is about [ ] greater for the 2005 projections, the net income for each of the five years (2006-2010) in the August 15, 2006, projections still indicates revenues projected to be greater than expenses by about

[ ] or more for each year.

Based on the revised financial information submitted by FENOC, and given that the

$400 million support agreement from FirstEnergy is not changed by the revised projections, the NRC staff concludes that the changes in the financial data from the 2005 applications to the August 15, 2006, projections do not have a material impact on the conclusions of the 2005 SE.

Principal Contributor: R. Uleck Date: December 11, 2006

Beaver Valley Power Station, Unit Nos. 1 and 2 cc:

Joseph J. Hagan Lew W. Myers Senior Vice President of Operations Executive Vice President, Special Projects and Chief Operating Officer FirstEnergy Nuclear Operating Company FirstEnergy Nuclear Operating Company Beaver Valley Power Station Mail Stop A-GO-14 Mail Stop A-BV-SGRP 76 South Main Street P.O. Box 4, Route 168 Akron, OH 44308 Shippingport, PA 15077 Danny L. Pace Manager, Site Regulatory Compliance Senior Vice President, Fleet Engineering FirstEnergy Nuclear Operating Company FirstEnergy Nuclear Operating Company Beaver Valley Power Station Mail Stop A-GO-14 Mail Stop A-BV-A 76 South Main Street P.O. Box 4, Route 168 Akron, OH 44308 Shippingport, PA 15077 Jeannie M. Rinckel Commissioner James R. Lewis Vice President, Fleet Oversight West Virginia Division of Labor FirstEnergy Nuclear Operating Company 749-B, Building No. 6 Mail Stop A-GO-14 Capitol Complex 76 South Main Street Charleston, WV 25305 Akron, OH 44308 Director, Utilities Department David W. Jenkins, Attorney Public Utilities Commission FirstEnergy Corporation 180 East Broad Street Mail Stop A-GO-18 Columbus, OH 43266-0573 76 South Main Street Akron, OH 44308 Director, Pennsylvania Emergency Management Agency Manager, Fleet Licensing 2605 Interstate Dr.

FirstEnergy Nuclear Operating Company Harrisburg, PA 17110-9364 Mail Stop A-GHE-107 395 Ghent Road Ohio EPA-DERR Akron, OH 44333 ATTN: Zack A. Clayton P.O. Box 1049 James H. Lash Columbus, OH 43266-0149 Site Vice President FirstEnergy Nuclear Operating Company Beaver Valley Power Station Mail Stop A-BV-SEB1 P.O. Box 4, Route 168 Shippingport, PA 15077

Beaver Valley Power Station, Unit Nos. 1 and 2 cc:

Dr. Judith Johnsrud Environmental Coalition on Nuclear Power Sierra Club 433 Orlando Avenue State College, PA 16803 Director Bureau of Radiation Protection Pennsylvania Department of Environmental Protection Rachel Carson State Office Building P.O. Box 8469 Harrisburg, PA 17105-8469 Mayor of the Borough of Shippingport P.O. Box 3 Shippingport, PA 15077 Regional Administrator, Region I U.S. Nuclear Regulatory Commission 475 Allendale Road King of Prussia, PA 19406 Resident Inspector U.S. Nuclear Regulatory Commission P.O. Box 298 Shippingport, PA 15077

Davis-Besse Nuclear Power Station, Unit 1 cc:

Manager - Regulatory Affairs State of Ohio FirstEnergy Nuclear Operating Company Public Utilities Commission Davis-Besse Nuclear Power Station 180 East Broad Street 5501 North State - Route 2 Columbus, OH 43266-0573 Oak Harbor, OH 43449-9760 Attorney General Director, Ohio Department of Commerce Office of Attorney General Division of Industrial Compliance 30 East Broad Street Bureau of Operations & Maintenance Columbus, OH 43216 6606 Tussing Road P.O. Box 4009 President, Board of County Reynoldsburg, OH 43068-9009 Commissioners of Ottawa County Port Clinton, OH 43252 Regional Administrator U.S. Nuclear Regulatory Commission President, Board of County 801 Warrenville Road Commissioners of Lucas County Lisle, IL 60523-4351 One Government Center, Suite 800 Toledo, OH 43604-6506 Resident Inspector U.S. Nuclear Regulatory Commission The Honorable Dennis J. Kucinich 5503 North State Route 2 United States House of Representatives Oak Harbor, OH 43449-9760 Washington, D.C. 20515 Barry Allen, Plant Manager The Honorable Dennis J. Kucinich FirstEnergy Nuclear Operating Company United States House of Representatives Davis-Besse Nuclear Power Station 14400 Detroit Avenue 5501 North State - Route 2 Lakewood, OH 44107 Oak Harbor, OH 43449-9760 Joseph J. Hagan Dennis Clum Senior Vice President of Operations and Radiological Assistance Section Supervisor Chief Operating Officer Bureau of Radiation Protection FirstEnergy Nuclear Operating Company Ohio Department of Health Mail Stop A-GO-14 P.O. Box 118 76 South Main Street Columbus, OH 43266-0118 Akron, OH 44308 Carol OClaire, Chief, Radiological Branch David W. Jenkins, Attorney Ohio Emergency Management Agency FirstEnergy Corporation 2855 West Dublin Granville Road Mail Stop A-GO-18 Columbus, OH 43235-2206 76 South Main Street Akron, OH 44308 Zack A. Clayton DERR Ohio Environmental Protection Agency P.O. Box 1049 Columbus, OH 43266-0149

Davis-Besse Nuclear Power Station, Unit 1 cc:

Danny L. Pace Senior Vice President, Fleet Engineering FirstEnergy Nuclear Operating Company Mail Stop A-GO-14 76 South Main Street Akron, OH 44308 Manager, Fleet Licensing FirstEnergy Nuclear Operating Company Mail Stop A-GHE-107 395 Ghent Road Akron, OH 44333 Manager, Site Regulatory Compliance FirstEnergy Nuclear Operating Company Davis-Besse Nuclear Power Station Mail Stop A-DB-3065 5501 North State Route 2 Oak Harbor, OH 43449-9760 Jeannie M. Rinckel Vice President, Fleet Oversight FirstEnergy Nuclear Operating Company Mail Stop A-GO-14 76 South Main Street Akron, OH 44308 Mr. Mark B. Bezilla Vice President FirstEnergy Nuclear Operating Company Davis-Besse Nuclear Power Station Mail Stop A-DB-3080 5501 North State Route 2 Oak Harbor, OH 43449-9760

Perry Nuclear Power Plant, Unit 1 cc:

David W. Jenkins, Attorney Dennis Clum FirstEnergy Corporation Radiological Assistance Section Supervisor Mail Stop A-GO-18 Bureau of Radiation Protection 76 South Main Street Ohio Department of Health Akron, OH 44308 P.O. Box 118 Columbus, OH 43266-0118 Resident Inspector's Office U.S. Nuclear Regulatory Commission Zack A. Clayton P.O. Box 331 DERR Perry, OH 44081-0331 Ohio Environmental Protection Agency ATTN: Mr. Zack A. Clayton Regional Administrator, Region III P.O. Box 1049 U.S. Nuclear Regulatory Commission Columbus, OH 43266-0149 2443 Warrenville Road Lisle, IL 60532-4531 Chairman Perry Township Board of Trustees Sue Hiatt 3750 Center Road, Box 65 OCRE Interim Representative Perry, OH 44081 8275 Munson Mentor, OH 44060 Daniel Z. Fisher Transportation Department Manager - Regulatory Compliance Public Utilities Commission FirstEnergy Nuclear Operating Company 180 East Broad Street Perry Nuclear Power Plant Columbus, OH 43215-3793 P.O. Box 97, A210 10 Center Road Joseph J. Hagan Perry, OH 44081 Senior Vice President of Operations and Chief Operating Officer Mayor, Village of North Perry First Energy Nuclear Operating Company North Perry Village Hall Mail Stop A-GO-14 4449 Lockwood Road 76 South Main Street North Perry Village, OH 44081 Akron, OH 44308 Donna Owens, Director Director, Regulatory Affairs Ohio Department of Commerce FirstEnergy Nuclear Operating Company Division of Industrial Compliance 395 Ghent Road Bureau of Operations & Maintenance Akron, OH 44333 6606 Tussing Road P.O. Box 4009 Reynoldsburg, OH 43068-9009 Carol OClaire, Chief, Radiological Branch Ohio Emergency Management Agency 2855 West Dublin Granville Road Columbus, OH 43235-7150 Mayor, Village of Perry P.O. Box 100 Perry, OH 44081-0100

Perry Nuclear Power Plant, Unit 1 cc:

Danny L. Pace Senior Vice President, Fleet Engineering FirstEnergy Nuclear Operating Company Mail Stop A-GO-14 76 South Main Street Akron, OH 44308 Jeannie M. Rinckel Vice President, Fleet Oversight FirstEnergy Nuclear Operating Company Mail Stop A-GO-14 76 South Main Street Akron, OH 44308 Manager, Fleet Licensing FirstEnergy Nuclear Operating Company Mail Stop A-GHE-107 395 Ghent Road Akron, OH 44333 L. W. Pearce Vice President FirstEnergy Nuclear Operating Company Perry Nuclear Power Plant Mail Stop A-PY-A290 P.O. Box 97, 10 Center Road Perry, OH 44081-0097 Manager, Site Regulatory Compliance FirstEnergy Nuclear Operating Company Perry Nuclear Power Plant Mail Stop A-PY-A200 P.O. Box 97, 10 Center Road Perry, OH 44081-0097 Richard Anderson Vice President FirstEnergy Nuclear Operating Company Perry Nuclear Power Plant Mail Stop A-PY-A290 P.O. Box 97, 10 Center Road Perry, OH 44081-0097

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