ML24213A084

Application for Order Consenting to Direct Transfer of Licenses

ML24213A084
Person / Time
Site:	South Texas, 07201041
Issue date:	07/31/2024
From:	Harshaw K South Texas
To:	Office of Nuclear Material Safety and Safeguards, Office of Nuclear Reactor Regulation, Document Control Desk
References
NOC-AE-24004051, 35622791
Download: ML24213A084 (1)

Text

July 31, 2024 NOC-AE-24004051 10 CFR 50.80 10 CFR 72.50 STI: 35622791 U.S. Nuclear Regulatory Commission Attention: Document Control Desk Washington, D.C. 20555 South Texas Project Units 1 and 2 Docket Nos. STN 50-498, STN 50-499, and 72-1041 Renewed Facility Operating License Nos. NPF-76 and NPF-80 Application for Order Consenting to Direct Transfer of Licenses Pursuant to Section 184 of the Atomic Energy Act of 1954, as amended (AEA), and 10 CFR 50.80 and 10 CFR 72.50, STP Nuclear Operating Company (STPNOC), acting on behalf of the City of San Antonio, Texas, acting by and through the City Public Service Board of San Antonio (CPS Energy), and Constellation South Texas, LLC (Constellation South Texas)

(collectively, the Applicants), hereby submits the enclosed application (Application) requesting that the U.S. Nuclear Regulatory Commission (NRC) consent to the transfer of a 2% ownership interest of the South Texas Project site, Units 1 and 2 (STP) and its generally licensed independent spent fuel storage installation facility (ISFSI) from Constellation South Texas to CPS Energy (the Transfer).

Both Constellation South Texas and CPS Energy are NRC-licensed owners of STP today and will remain NRC-licensed owners after the Transfer. Constellation South Texas and CPS Energy currently hold 44% and 40% respective ownership interests in STP. The City of Austin, Texas holds the remaining 16% ownership interest, which is unaffected by the Transfer. Upon consummation of the Transfer, Constellation South Texas and CPS Energy will each hold a 42%

interest in STP. There are no other organizational or corporate changes being made in connection with the Transfer.

Under the terms of the revised STP Participation Agreement, CPS Energy will receive a proportionate share of the STP site, facility output and cost responsibility commensurate with the additional 2% interest. CPS Energy is an electric utility and will continue to recover its share of STP operating and capital costs via cost-of-service ratemaking. As part of the transaction, Constellation South Texas will transfer decommissioning funds to an existing qualified CPS

NOC-AE-24004051 Page 2 of 5 Energy trust corresponding to the additional 2% ownership interest. The Transfer will not result in any adverse changes to the owners financial qualifications or basis for decommissioning funding assurance.

The Transfer will not change the role of STPNOC as the licensed operator of STP and will not result in an indirect transfer of control of STPNOC. STPNOC will continue to manage the conduct of licensed activities on behalf of the STP owners under the terms of the STP Participation Agreement. CPS Energys incremental 2% ownership interest will not give CPS Energy a controlling vote under the Participation Agreement. The Transfer does not otherwise alter STP operations, STPNOCs management, or STPNOCs technical qualifications to continue serving as the licensed operator.

The attached Application provides information pertaining to the proposed license transfers in which CPS Energy acquires an additional 2% of co-owner interests in the facility as required by 10 CFR 50.80. The referenced information demonstrates that: (1) CPS Energy will continue to have the requisite financial qualifications to be a licensed co-owner of the facility; (2) CPS Energy will provide reasonable assurance of funding for decommissioning its 42% of the facility; (3) the managerial and technical qualifications of the operating organization (STPNOC) will not be adversely impacted; (4) the material terms of the Licenses will not be affected; and (5) the license transfers will not result in any impermissible foreign ownership, control, or domination.

In summary, the proposed Transfer will be consistent with the requirements set forth in the AEA, NRC regulations, and the relevant NRC licenses and orders. The Applicants, therefore, respectfully request that the NRC consent to the transfer of control in accordance with Section 184 of the AEA as well as 10 CFR 50.80 and 10 CFR 72.50. Because the Transfer only changes the relative ownership interests among the existing STP owners, no conforming license amendments are required to reflect the Transfer.

Applicants request NRC consent to the proposed Transfer no later than December 1, 2024, to support prompt closing of the underlying transaction to transfer the ownership interest. Such consent should be immediately effective upon issuance and should permit the Transfer at any time within one year from the date of NRC approval. In addition to the NRCs consent, the transaction is subject to the review by or approval of certain other governmental authorities, including the Public Utility Commission of Texas. The Applicants will inform the NRC if there are any significant changes in the status of any required regulatory approvals or if any other developments arise that impact the planned closing of the Transfer.

Copies of this submittal are being provided to the State of Texas.

This letter contains no regulatory commitments.

Service upon the Applicants of notice, comments, hearing requests, intervention petitions, or other pleadings should be made to:

NOC-AE-24004051 Page 3 of 5 Shanna M. Ramirez, Esq.

CPS Energy 500 McCullough Ave.

Mail Drop CT1501 San Antonio, TX 78215 210-353-5689 smramirez@cpsenergy.com Rachel Jackson, Esq.

STP Nuclear Operating Company P.O. Box 289 Wadsworth, TX 77483 361-972-4778 rljackson@stpegs.com Jason C. Zorn, Esq.

Constellation Energy Generation, LLC 101 Constitution Ave., NW, Suite 400E Washington, D.C. 20001 202-637-0320 jason.zorn@constellation.com For questions related to this submittal, please contact Mr. Drew Richards, Regulatory Affairs Manager, at amrichards@stpegs.com on behalf of STPNOC.

I declare under penalty of perjury that the foregoing is true and accurate.

Executed on July 31, 2024.

Kimberly Harshaw Acting Chief Executive Officer & Chief Nuclear Officer STP Nuclear Operating Company

Enclosure:

1.

Application

NOC-AE-24004051 Page 5 of 5 cc (w/ enclosures):

Regional Administrator, Region IV U.S. Nuclear Regulatory Commission 1600 E. Lamar Boulevard Arlington, TX 76011-4511 Thomas Byrd Project Manager U.S. Nuclear Regulatory Commission Office of Nuclear Reactor Regulation Division of Operating Reactor Licensing Licensing Project Branch 4 John Vera Senior Resident Inspector, South Texas Project U.S. Nuclear Regulatory Commission Leanne Flores Resident Inspector, South Texas Project U.S. Nuclear Regulatory Commission Robert Free, Texas Department of State Health Services

NOC-AE-24004051 Application for Order Consenting to Direct Transfer of Licenses July 31, 2024 submitted by STP Nuclear Operating Company on behalf of itself and The City of San Antonio, Texas, acting by and through the City Public Service Board of San Antonio and Constellation South Texas, LLC South Texas Project, Units 1 and 2 NRC Facility Operating License Nos. NPF-76 and NPF-80 Docket Nos. STN 50-498, STN 50-499, and 72-1041

NOC-AE-24004051 I.

INTRODUCTION............................................................................................................ 1 II.

STATEMENT OF PURPOSE OF THE TRANSFER AND NATURE OF THE TRANSACTION MAKING THE TRANSFER NECESSARY OR DESIRABLE.................................................................................................................... 2 III.

SUPPORTING INFORMATION................................................................................... 3 A.

Background on the Facilities............................................................................... 3 B.

Description of the Transfer................................................................................. 3 C.

General Corporate Information......................................................................... 4 D.

No Foreign Ownership, Control or Domination............................................... 5 E.

Technical Qualifications...................................................................................... 5 F.

Financial Qualifications for Operations............................................................ 6 G.

Decommissioning Funding.................................................................................. 6 H.

No Antitrust Considerations............................................................................... 8 I.

Nuclear Insurance................................................................................................ 8 J.

Standard Contract for Disposal of Spent Nuclear Fuel................................... 8 K.

Restricted Data..................................................................................................... 9 L.

Environmental Review........................................................................................ 9 M.

Independent Spent Fuel Storage Installation.................................................... 9 IV.

EFFECTIVE DATE AND REGULATORY APPROVALS........................................ 9 V.

CONCLUSION.............................................................................................................. 10

NOC-AE-24004051 Page 1 of 10 I.

INTRODUCTION Pursuant to Section 184 of the Atomic Energy Act of 1954, as amended (AEA), and 10 CFR 50.80 and 10 CFR 72.50, STP Nuclear Operating Company (STPNOC), acting on behalf of the City of San Antonio, Texas, acting by and through the City Public Service Board of San Antonio (CPS Energy) and Constellation South Texas, LLC (Constellation South Texas)

(collectively, the Applicants), hereby submits this application (Application) requesting that the U.S. Nuclear Regulatory Commission (NRC) consent to the transfer of a 2% ownership interest of the South Texas Project, Units 1 and 2 (STP) and its generally licensed independent spent fuel storage installation facility (ISFSI) from Constellation South Texas to existing owner CPS Energy (the Transfer).

STP is owned by three co-owners as tenants in common: Constellation South Texas holds a 44% undivided ownership interest, CPS Energy holds a 40% undivided ownership interest, and the City of Austin, Texas (Austin) holds a 16% undivided ownership interest. On May 2, 2024, Constellation South Texas and CPS Energy entered into an Asset Purchase Agreement pursuant to which Constellation South Texas has agreed to transfer 2% of its interest in STP to CPS Energy (the Transaction), subject to satisfaction of the terms of the agreement, including NRCs approval of this Application. Upon consummation of the Transaction, Constellation South Texas and CPS Energy will each hold a 42% interest in STP. Austins ownership interest is unaffected by the Transaction. There are no other organizational or corporate changes being made in connection with the Transaction.

Under the terms of the STP Participation Agreement, each STP owner is entitled to output of the facility and is responsible for operating and decommissioning costs in proportion to its ownership share. Accordingly, as a result of the Transaction, CPS Energy will receive 2%

more of the STP site and facility output and will bear 2% more cost responsibility. CPS Energy will continue to recover its share of operating and capital costs via cost-of-service ratemaking.

As part of the Transaction, Constellation South Texas will transfer decommissioning funds to an existing qualified CPS Energy trust in proportion to the incremental 2% ownership share. The Transaction will not change the overall amount of funds (across all owners) available for decommissioning STP.

STPNOC will remain the licensed operator of STP and will continue to manage facility operations on behalf of the STP owners. CPS Energys acquisition of an additional 2%

ownership interest in the plant does not give CPS Energy any additional control over STPNOC and does not constitute an indirect change of control of STPNOC. The Transfer does not otherwise alter STP operations or STPNOCs technical qualifications to continue serving as the licensed operator.

In summary, the proposed Transfer will be consistent with the requirements set forth in the AEA, NRC regulations, and the relevant NRC licenses and orders. The Applicants, therefore, respectfully request that the NRC consent to the transfer of control in accordance with Section 184 of the AEA as well as 10 CFR 50.80 and 10 CFR 72.50. Because the Transfer only changes the relative ownership interests among the existing STP owners, no conforming license amendments are required to reflect the Transfer.

NOC-AE-24004051 Page 2 of 10 Applicants request NRC consent to the proposed Transfer no later than December 1, 2024, to support prompt closing of the Transaction. Such consent should be immediately effective upon issuance and should permit the Transfer at any time within one year from the date of NRC approval. In addition to the NRCs consent, the Transaction is subject to the review by or approval of certain other governmental authorities, including the Public Utility Commission of Texas (PUCT). The Applicants will inform the NRC if there any significant changes in the status of any required regulatory approvals or if any other developments arise that impact the planned closing of the Transaction.

II.

STATEMENT OF PURPOSE OF THE TRANSFER AND NATURE OF THE TRANSACTION MAKING THE TRANSFER NECESSARY OR DESIRABLE The Transaction benefits CPS Energys ratepayers by providing them with additional ownership of the STP site and additional rights to cost-competitive carbon-free generation from STP. CPS Energy will recoup its costs associated with the increased ownership interest via retail electric rates set by the City of San Antonio. The Transfer is further supported by the NRCs longstanding policy in favor of dispute settlement. The underlying Transaction is the result of a settlement agreement among the STP owners resolving the dispute arising out of Constellation Energy Generations (CEG) acquisition of Constellation South Texas and its 44% ownership interest in STP from the prior owner, NRG. The settlement resulted in withdrawal of CPS Energys and Austins petitions filed with the NRC challenging the Application for Order Approving Indirect Transfer of Control of Licenses filed by STPNOC on behalf of CEG and NRG (the NRG Transfer Application).0F1 All of the STP owners settled their dispute regarding CEGs acquisition of Constellation South Texas, are in support of the Transfer, and do not object to the Application. Additionally, Austin has waived its right of first refusal in connection with the Transfer.

At the consummation of the Transfer, STP will continue to be operated safely and consistent with the AEA, the NRC licenses, applicable requirements, and plant procedures. There will be no physical changes to STP or day-to-day operations. STPNOC will remain technically qualified to operate the units. In addition, there will be no changes to the overall available decommissioning financial assurance.

The proposed Transfer is in the public interest, is desirable to all involved parties, and is consistent with the terms of the AEA.

1 South Texas Project Units 1 and 2, Application for Order Approving Indirect Transfer of Control of Licenses, dated June 12, 2023 (ML23163A176) approved by Order Approving Indirect Transfer of Licenses and Conforming License Amendments, dated Oct. 30, 2023 (ML23279A038). Notice of Withdrawal of Motion and Petition to Intervene of the City of San Antonio, Texas, Acting by and through the City Public Service Board of San Antonio, dated May 6, 2024 (ML24127A046); Notice of Withdrawal of Motion and Petition to Intervene of the City of Austin, Texas, D/B/A Austin Energy, dated May 6, 2024 (ML24127A138); SECY Order Terminating Proceeding dated May 10, 2024 (ML24131A142).

NOC-AE-24004051 Page 3 of 10 III.

SUPPORTING INFORMATION A.

Background on the Facilities STP is a two-unit facility located in Matagorda County, Texas (approximately 12 miles south-southwest of Bay City, Texas and 10 miles north of Matagorda Bay, Texas). Both units are Westinghouse four loop pressurized water reactors that operate at a licensed thermal power output of 3,853 MWt, with a gross electrical output of approximately 1,350 MWe (1,250 MWe net) each. The operating license for STP Unit 1 was issued on March 22, 1988, and the renewed operating license was issued September 28, 2017, and currently expires on August 20, 2047, and the operating license for STP Unit 2 was issued on March 28, 1989, and the renewed operating license was issued September 28, 2017, and currently expires on December 15, 2048. STPNOC is the licensed operator for both STP units.

B.

Description of the Transfer CPS Energy and Constellation South Texas, two of the current licensed owners of STP, have entered into an agreement to transfer a 2% undivided ownership interest in STP from Constellation South Texas to CPS Energy.

CPS Energy currently owns a 40% undivided ownership interest as tenant in common in STP, and Constellation South Texas owns a 44% undivided ownership interest as tenant in common. On May 2, 2024, CPS Energy and Constellation South Texas entered into an Asset Purchase Agreement whereby Constellation South Texas will sell CPS Energy a 2% ownership interest in STP. Upon consummation of the Transfer, CPS Energy and Constellation South Texas will each own a 42% undivided ownership interest in STP, and Austin will continue to own a 16% undivided ownership interest in STP. The Transaction does not modify Austins ownership interest. The Transaction will not result in any other corporate or organizational changes to the STP owners or STPNOC. Table 1 summarizes the current and post-Transfer ownership interests of the licensed owners.

Table 1 - Current and Post-Transfer Ownership Interests in STP Current Post-Transfer Constellation South Texas 44%

42%

CPS Energy 40%

42%

Austin 16%

16%

Under the terms of the STP Participation Agreement, each owner is entitled to a share of the output of the facility and bears a share of the operational, capital, and decommissioning costs of the facility in proportion to its ownership interest. As discussed in the financial qualifications section of this Application, CPS Energy will recover its share of STP operating and capital costs (including the additional 2%) via cost-of-service ratemaking. Constellation South Texas is transferring decommissioning funds to CPS Energy to cover CPS Energys additional 2%

responsibility for decommissioning funding.

NOC-AE-24004051 Page 4 of 10 The Transaction will not result in an indirect transfer of control of STPNOC. STPNOC is not owned by the STP owners; it is a not-for-profit Texas corporation and is governed by its Board of Directors. Each of the Participant Owners appoints one Participant Director to STPNOC, and these three Participant Directors choose a CEO Director by unanimous vote. Decisions by the STPNOC Board require a simple majority (3 of 4 directors). Certain other decisions related to STP are approved by the STP Owner Committee made up of representatives from each of the three owners. Under the terms of the STP Participation and Operating Agreements, ownership direction to STPNOC requires the vote of two or more owners holding a greater than 60%

ownership interest in the facility. The Transaction will not alter the STPNOC Board of Directors or STP Owner Committee, and the additional 2% interest being transferred to CPS Energy will not give CPS Energy any more control over STPNOC than it has today. Accordingly, the Transfer does not constitute an indirect transfer of control of STPNOC. There will be no changes to STP personnel or plant operations resulting from the Transfer.

C.

General Corporate Information The Transaction will not alter the organizational structure or senior leadership of any of the STP owners. As the licensed operator with possession and responsibility for operating STP, STPNOC will continue to act for itself and the STP owners. Neither STPNOC nor the STP owners are acting as the agent or representative of any other person in the proposed Transfer.

The information contemplated by 10 CFR 50.33(a)-(d) is provided in Table 2 below for CPS Energy.

Table 2 - CPS Energy Corporate Information NAME:

City of San Antonio, Texas, acting by and through the City Public Service Board of San Antonio ADDRESS 500 McCullough Ave.

San Antonio, Texas 78215 DESCRIPTION OF BUSINESS CPS Energy is the nations largest municipally owned utility providing both natural gas and electric service to residential and business customers in a service territory that includes the city of San Antonio and certain surrounding areas. CPS Energy serves more than 900,000 electric customers and more than 300,000 natural gas customers in and around the seventh largest city in the United States.

STATE OF ORGANIZATION Texas

NOC-AE-24004051 Page 5 of 10 BOARD OF TRUSTEES Janie Martinez Gonzalez, Board Chair Dr. Francine Sanders Romero, Board Vice Chair Dr. Willis Mackey, Trustee John Steen, Trustee Mayor Ron Nirenberg, Ex-Officio Member All trustees are U.S. citizens PRINCIPAL OFFICERS Rudy D. Garza, President and Chief Executive Officer Elaina Ball, Chief Strategy Officer Benjamin L. Ethridge, Jr., Chief Energy Supply Officer DeAnna Hardwick, Chief Customer Strategy Officer Cory Kuchinsky, Chief Financial Officer (CFO) & Treasurer Lisa Lewis, Chief Administrative Officer Richard Medina, Chief Energy Delivery Officer Shanna Ramirez, Chief Legal & Ethics Officer, General Counsel, & Board Secretary Evan OMahoney, Chief Information Officer All principal officers are U.S. citizens D.

No Foreign Ownership, Control or Domination The Transfer will not result in any impermissible foreign ownership, control or domination of STP. Both parties involved in the Transfer are currently licensed owners of STP.

CPS Energy is owned by the City of San Antonio, Texas, and is neither owned, controlled, nor dominated by any foreign entity. All of the trustees and principal officers of CPS Energy are United States citizens. The Transfer does not change the role of STPNOC as the licensed entity with possession and responsibility for operating STP on behalf of the STP owners. Accordingly, the Transfer will not result in any impermissible foreign ownership, control or domination of STP.

E.

Technical Qualifications CPS Energy and Constellation South Texas are possession-only licensed owners of STP.

STPNOC is the licensed operator that possesses the requisite technical qualifications.

STPNOC will continue to be the entity licensed to operate STP pursuant to the terms of the existing Operating Agreement, which remains unchanged. STPNOCs technical qualifications will be unaffected by the proposed Transfer. No changes in the management of or operational organization for STP are expected to be made as part of the proposed Transaction.

The proposed Transfer will not result in any changes to senior management of STPNOC, the staffing or qualifications of STP site personnel, day-to-day operations, or the physical plant configuration.

NOC-AE-24004051 Page 6 of 10 F.

Financial Qualifications for Operations The Transfer is not materially altering the STP owners financial qualifications to fund STP operating costs.

CPS Energy is an electric utility, as defined in 10 CFR 50.2. CPS Energy recovers its cost of service through rates set by the City of San Antonio, including the incremental operating and capital costs associated with the 2% ownership interest CPS Energy is acquiring in the Transaction. Consistent with NRC regulations in 10 CFR 50.33(f), CPS Energy has the requisite financial qualifications to be an NRC licensed owner of STP.

An electric utility as defined in 10 CFR 50.2 is exempted from the requirement to submit financial qualifications information under 10 CFR 50.33(f). An electric utility is any 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. 10 CFR 50.2. As such, there is a presumption that CPS Energy is financially qualified, and CPS Energy will continue to be exempt from the financial qualifications information requirements pursuant to 10 CFR 50.33(f) and in accordance with Section III.1.b of NUREG-1577, Rev. 1.

G.

Decommissioning Funding The Transfer will not affect the total amount of decommissioning funds dedicated to STP.

As part of the Transaction, Constellation South Texas will transfer decommissioning funds to an existing qualified CPS Energy trust consistent with the additional 2% interest in plant. The same ratepayer collection authority that currently backstops the decommissioning funding available for STP will continue post-Transfer.

Decommissioning funding for STP is structured based on historical ownership and ratepayer collections. Under Texas law and various orders of the PUCT, the costs associated with decommissioning STP are subject cost of service rate regulation and are collectable as a non-bypassable charge to retail customers, including customers of the prior utility owners of STP. Two of the prior utility owners of STP (CenterPoint Energy (CenterPoint) and AEP Texas Central Company (AEP)) have transferred their ownership interests to Constellation South Texas and CPS Energy in the proportions set forth in Table 3 below, along with a corresponding share of the decommissioning funds collected from CenterPoint and AEP customers. These funds are external sinking funds under 10 CFR 50.75(e)(1)(ii); however, given that each owners (and prior owners) share of STP radiological decommissioning is fully funded, there are no ongoing ratepayer collections currently scheduled for radiological decommissioning.1F2 If there is a shortfall of decommissioning funding in the future, AEP and 2

As reflected in STPNOCs 10 CFR 50.75(f)(1) reports, certain owners (and prior owners) have obtained PUCT approval to established separate accounts to fund spent fuel management, pre-shutdown disposal of large components, or other costs that do not fall within the definition of decommissioning in 10 CFR 50.2. These accounts are segregated from the STP owners 50.2 decommissioning funds and have not been reported or credited to meet NRC funding obligations. Pursuant to PUCT order, some of these non-NRC-regulated accounts are still being funded by ratepayer collections. None of the 50.2 decommissioning accounts are currently being funded by ratepayers.

NOC-AE-24004051 Page 7 of 10 CenterPoint retain the authority to collect from their retail customers to cover decommissioning costs corresponding to each of the utilitys prior ownership interest in STP (AEP: 25.2% and CenterPoint: 30.8%), which collections would be passed through to the then-current STP owners pursuant to collection agreements between the current owners and AEP and CenterPoint, respectively. To preserve the separation among ratepayer groups, CPS Energy and Constellation South Texas currently maintain the legacy AEP and CenterPoint ratepayer funds in separate trusts and will continue to do so after the Transaction. Likewise, while CPS Energy does not currently assess a charge to its customers, it retains authority to collect funds from its ratepayers to cover additional decommissioning costs associated with CPS Energys original 28%

ownership interest in STP. Current decommissioning funding responsibility for STP is summarized in Table 3 below.

Table 3 - STP Decommissioning Percentage Responsibility and Funding Status Owner (legacy ratepayers)

Percent of Unit Constellation South Texas (AEP ratepayers) 13.2%

Constellation South Texas (CenterPoint ratepayers) 30.8%

CPS Energy 28%

CPS Energy (AEP ratepayers) 12%

Austin 16%

The status of decommissioning funding for Constellation South Texas was reported in compliance with 10 CFR 50.75(f)(1) (annual reporting for a licensee involved in an acquisition) on March 28, 2024.2F3 The status of decommissioning funding for CPS Energy and Austin was last reported in compliance with 10 CFR 50.75(f)(1) (biennial reporting) on March 29, 2023.3F4 As demonstrated by these reports, the decommissioning trust funds held by each owner and dedicated to radiological decommissioning of STP exceed the minimum funding required by 10 CFR 50.75(c), even without crediting future interest through the end of the current license terms.

The STP owners satisfy their obligation under 10 CFR 72.30 to fund ISFSI decommissioning by relying on excess funds in their Part 50 decommissioning trust funds.4F5 The Transaction will not change the total amount of decommissioning funds dedicated to STP or its ISFSI. Constellation South Texas will transfer approximately 4.55%5F6 of the then-current value of decommissioning funds held by Constellation South Texas as of the Transaction closing date from its holdings relating to AEPs legacy interest in STP. CPS Energy will maintain these funds in a trust segregated from its assets and outside its administrative control in accordance with 10 CFR 50.75(e)(1). CPS Energy will continue to have authority to collect from ratepayers any additional decommissioning funding associated with the transferred portion of 3

STPNOC Letter to NRC, Financial Assurance for Decommissioning - 2024 Update, dated Mar. 28, 2024 (ML24088A302).

4 STPNOC Letter to NRC, Financial Assurance for Decommissioning - 2023 Update, dated Mar. 29, 2023 (ML23089A062).

5 STPNOC Letter to NRC, Decommissioning Funding Plan for the Independent Spent Fuel Storage Installation, dated Sept. 27, 2021 (ML21270A142).

6 4.55% of Constellations 44% share corresponds to 2% of the facility as a whole.

NOC-AE-24004051 Page 8 of 10 AEPs funds, to the extent any such collections are required prior to license termination.6F7 STPNOC will file an updated 10 CFR 50.75(f)(1) report on behalf of all the STP owners on or before March 31, 2025. The Transaction will not require any material changes to either owners decommissioning trust agreement. Both CPS Energy and Constellation South Texas will make conforming amendments to reflect the changed percentages of the legacy AEP funds held by CPS Energy and Constellation South Texas, respectively.

For the foregoing reasons, there is reasonable assurance that CPS Energy will continue to have adequate funds to cover its share of decommissioning costs following the Transfer.

H.

No Antitrust Considerations In accordance with the NRCs decision in Kansas Gas and Electric Company (Wolf Creek Generating Station, Unit 1), CLI-99-19, 49 NRC 441 (1999), antitrust reviews of license transfer applications after initial licensing are not required by the AEA.

I.

Nuclear Insurance The proposed Transfer will not affect the existing Price-Anderson indemnity agreement for STP. Both CPS Energy and Constellation South Texas are current parties to the indemnity agreement, which does not reference their respective ownership percentages.

The Transfer will not change the required nuclear property damage insurance pursuant to 10 CFR 50.54(w) and nuclear energy liability insurance pursuant to Section 170 of the Act and 10 CFR Part 140. The owners will continue to maintain all required nuclear property damage insurance and nuclear energy liability insurance for their interests in the facility. In addition, annual reporting in compliance with 10 CFR 140.21(e) provides reasonable assurance regarding the ongoing ability of the owners to pay any annual retrospective premium for their interests.

J.

Standard Contract for Disposal of Spent Nuclear Fuel The owners will retain their respective interests (corresponding to undivided ownership share) in the title to and responsibility for managing spent nuclear fuel at STP, including the operation and management of the ISFSI. The Transfer will not affect the Standard Contract for Disposal of Spent Nuclear Fuel. STPNOC will continue to hold the Standard Contract for the Disposal of Spent Nuclear Fuel and/or High-Level Radioactive Waste, No. DE-CR01-87RW00129 for STP, originally entered into on June 2, 1987.

7 When the PUCT approved the sale of AEPs 12% interest to CPS Energy in 2005, CPS Energy and AEP entered into a collection agreement pursuant to which AEP provides any ratepayer collections to CPS Energy corresponding to the 12% interest CPS Energy acquired. PUCT Order, Docket No. 30760, dated May 11, 2005.

As part of the PUCT approval of the current Transaction, CPS Energy expects to conform the current collection agreement between CPS Energy and AEP to reflect the incremental share of AEP ratepayer funds held by CPS Energy. The change will not affect the total cost responsibility of AEP customers or CPS Energys ability to provide supplemental ratepayer funds for STP decommissioning, should they be required in the future.

NOC-AE-24004051 Page 9 of 10 K.

Restricted Data This Transfer does not involve any Restricted Data or other classified defense information and will not result in any change in access to such Restricted Data. To the extent such information does become involved, STPNOC will continue to appropriately safeguard such information in accordance with the AEA and applicable NRC regulations.

In compliance with Section 145(a) of the AEA and 10 CFR 95.35, CPS Energy agrees that restricted or classified defense information will not be provided to any individual until the Office of Personnel Management investigates and reports to the NRC on the character, associations, and loyalty of such individual, and the NRC determines that permitting such person to have access to Restricted Data will not endanger the common defense and security of the United States.

L.

Environmental Review The requested consent to the proposed Transfer is exempt from environmental review, because it falls within the categorical exclusion contained in 10 CFR 51.22(c)(21) for which neither an Environmental Assessment nor an Environmental Impact Statement is required.

Moreover, the proposed Transfer does not directly affect the actual operation and maintenance of the Facility in any substantive way. The proposed Transfer does not involve an increase in the amounts, or a change in the types, of any radiological effluents that may be allowed to be released off-site and involves no increase in the amounts or change in the types of non-radiological effluents that may be released off-site. Further, there is no increase in the individual or cumulative occupational radiation exposure, and the proposed Transfer has no environmental impact. Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared in connection with the proposed Transfer.

M.

Independent Spent Fuel Storage Installation The Transfer does not affect the ISFSIs general license issued for the storage of spent fuel at any of the facilities pursuant to 10 CFR 72.210.

IV.

EFFECTIVE DATE AND REGULATORY APPROVALS Subject to satisfaction of all conditions to closing the Transaction, the parties are targeting closing no later than December 31, 2024. Accordingly, Applicants request that the NRC review this Application on a schedule that will permit issuance of an order consenting to the requested license transfers by December 1, 2024. Such consent should be immediately effective upon issuance and should permit the Transfer to occur any time within one year after the approval is issued. STPNOC will notify the NRC staff at least two (2) business days prior to the expected closing date. Applicants will keep the NRC informed of any significant changes in the status of other required approvals that could impact the anticipated closing date.

NOC-AE-24004051 Page 10 of 10 V.

CONCLUSION For the reasons stated above, Applicants respectfully submit that the proposed Transfer is consistent with the requirements set forth in the AEA, NRC regulations, the STP licenses, and the relevant NRC orders. Applicants, therefore, respectfully requests that, in accordance with Section 184 of the AEA, 10 CFR 50.80, and 10 CFR 72.50, the NRC consent to the Transfer.