ML003728682

Calvert Cliffs - Safety Evaluation (Non-Proprietary) by the Office of Nuclear Reactor Regulation, Transfer of Renewed Operating Licenses, CC Independent Spent Fuel Storage Installation

ML003728682
Person / Time
Site:	Calvert Cliffs
Issue date:	06/30/2000
From:	Dromerick A W NRC/NRR/DLPM
To:	Denton R E Baltimore Gas & Electric Co (BGE)
References
-RFPFR, L23060, TAC MA8343, TAC MA8344
Download: ML003728682 (13)

Text

SAFETYEVALUATIONBYTHEOFFICEOFNUCLEARREACTORREGULATIONTRANSFEROFRENEWEDOPERATINGLICENSESFORCALVERTCLIFFSNUCLEARPOWERPLANT,UNITNOS.1AND2DOCKETNOS.50-317&50-318ANDMATERIALSLICENSEFORCALVERTCLIFFSINDEPENDENTSPENTFUELSTORAGEINSTALLATIONDOCKETNO.72-

81.0INTRODUCTION

PursuanttoSection184oftheAtomicEnergyActof1954,asamended(AEA),andSection50.80ofTitle10oftheCodeofFederalRegulations(10CFR50.80),BaltimoreGas andElectricCompany(BGE),byapplicationdatedFebruary29,2000,assupplementedon April7,April27,May2,May19,andJune20,2000,(collectivelyhereaftertheapplication) requestedthattheNuclearRegulatoryCommission(NRC)consenttoatransferofRenewed FacilityOperatingLicensesNos.DPR-53andDPR-69forCalvertCliffsNuclearPowerPlant, UnitNos.1and2(CalvertCliffsorCCNPP),toanewaffiliatedcompanydescribedbelow.In addition,pursuantto10CFR72.50,BGErequestedtheNRC'sconsenttoasimilartransferof MaterialsLicenseNo.SNM-2505fortheCalvertCliffsIndependentSpentFuelStorage Installation(ISFSI).Theapplicationalsorequestedtheapprovalofconforminglicense amendmentstoreflecttheproposedtransfer.Thesupplementalinformationdidnotexpandthe scopeoftheapplicationasoriginallynoticedintheFederalRegister

.2.0BACKGROUNDThetransferrequestrelatestoaproposedcorporaterestructuringofBGEandisbeingsubmittedtocomplywithprovisionsofMaryland'sElectricCustomerChoiceandCompetition Actof1999(Act).Undertheproposedrestructuring,ConstellationEnergyGroup,Inc.

(ConstellationEnergy),theparentcompanyofBGE,willformanotherwholly-ownedsubsidiary, ConstellationNuclear,LLC(ConstellationNuclearor"CN").BGEwilltransferownershipofand thelicensesforCalvertCliffsandtheISFSItoitsownsubsidiary,CalvertCliffsNuclearPower Plant,Inc.(Company).BGEwillthentransfertheownershipofCompanytoConstellation Energythroughastocktransfer.ConstellationEnergywillthentransfertheownershipofallofthestockofCompanytoConstellationNuclear.ThefinalresultwillbethatCompany,asdirectlyownedbyConstellation Nuclear,andindirectlyownedbyConstellationEnergy,willbetheownerandlicenseeofCalvert CliffsandtheISFSI.ThetransferofthefacilitiesbyBGEtoCompany,thetransferofstockin CompanybyBGEtoConstellationEnergy,andthesubsequenttransferofsuchstocktoConstellationNuclearwilloccuronthesameday.Followingtheproposedcorporaterestructuring,ConstellationEnergyandCompanywillbecorporationsorganizedandexistingunderthelawsoftheStateofMaryland.Constellation NuclearwillbeaMarylandlimitedliabilitycompany.TheapplicantanticipatesthatConstellation NuclearwillbeconvertedtoaMarylandcorporationwithin12monthsofthetransfer.Allofthe currentdirectorsandprincipalofficersofConstellationEnergyandConstellationNuclearare, andallthedirectorsandprincipalofficersofCompanywillbe,citizensoftheUnitedStates.3.0FINANCIALQUALIFICATIONSANALYSISPursuantto10CFR50.33(f),anelectricutilityasdefinedin10CFR50.2,isnotrequiredtodemonstrateitsfinancialqualifications.Companywillnotmeetthedefinitionofanelectric utility.Section50.2of10CFRstatesthatanelectricutilityis"anyentitythatgeneratesor distributeselectricityandwhichrecoversthecostofthiselectricity,eitherdirectlyorindirectly, throughratesestablishedbytheentityitselforbyaseparateregulatoryauthority."Company willsellelectricitytoitsutilityaffiliatesandwillmarketelectricitypursuanttoratetariffsapproved bytheFederalEnergyRegulatoryCommission.Asbothanewlyformedentityandanon-electricutilityapplyingtoownandtooperatenuclearpowerplants,CompanyissubjecttoamoredetailedfinancialqualificationsreviewbytheNRC thananestablishedelectricutility.Specifically,Companymustmeettherequirementsof10 CFR50.33(f)byprovidinginformationwhichshowsthefollowing:(1)Asanon-electricutilityapplicantforoperatinglicenses,itpossessesorhasreasonableassuranceofobtainingthefundsnecessarytocoverestimated operatingcostsfortheperiodofthelicenses.Itmustsubmitestimatedtotal annualoperatingcostsforthefirst5yearsoffacilityoperationsandindicatethe sourceoffundstocoverthesecosts.(2)Asanewlyformedentityorganizedprimarilyforthepurposeofoperatinganuclearpowerplant,itmustshow:(a)thelegalandfinancialrelationshipsithas orproposestohavewithitsstockholdersorowners;(b)itsfinancialabilityto meetanycontractualobligationtotheentitywhichtheyhaveincurredorpropose toincur;and(c)anyinformationconsiderednecessarybytheCommissionto enableittodeterminetheapplicant'sfinancialqualification.Inaddition,10CFR50.33(k)(1)requiresthatCompanymustprovideinformationdescribedin10CFR50.75indicatingreasonableassurancethatfundswillbeavailabletodecommissionthe facilities.Company'sproposalsfordecommissioningfundingassurancesarediscussedin Section4.0ofthisevaluation.TheNRCstafffindsthatCompanymeetsthefinancialqualificationsrequirementsforanon-electricutilitypursuantto10CFR50.33(f).CompanywillbeawhollyownedsubsidiaryofConstellationNuclear,whichitselfwillbeawhollyownedsubsidiaryofConstellationEnergy.ConstellationNuclearisaholdingcompanywhich wasformedinDecember1999.ConstellationEnergyownsandoperatesenergy-services businessesthroughouttheUnitedStatesandLatinAmerica.Itofferswholesalepower marketing,riskmanagement,powerplantdevelopment,powergeneration,transmissionand distribution,andotherenergy-relatedproductsandservicestoresidential,commercial,and industrialcustomers.SinceConstellationEnergybecametheholdingcompanyforBGEonApril30,1999,ithasnotyetfiledanannualreport.TheapplicantstatesthatCompanyhasreasonableassuranceofobtainingthefundsnecessarytocoverestimatedtotalannualoperatingcosts.Pursuanttothedraftagreementsattachedas ExhibitsB-1andB-2oftheFebruary29,2000,initialapplication,ConstellationEnergywill provideCompanywithanyfundsnecessaryforCompanytomeetitsexpensesandobligations tomaintainandsafelyoperateCalvertCliffsanditsassociatedISFSI.Theagreementsprovide foracashpoolarrangementwherebyCompanywillhavereadyaccesstocash.ConstellationEnergyoperatesacashpoolforallofitssubsidiariesexceptBGE.Thus,Companywillbeamemberofthecashpool.Eachday,eachmemberofthecashpool providesConstellationEnergywithitscashpositionforthatday.Eachday,eachmemberalso transferstothepoolanyexcesscashwhichisinvestedunlessanothermemberofthepool needsit.Onanygivenday,ifmembersneedmorecashthanisavailablefromthepool, ConstellationEnergysellscommercialpapertothepublicmarkets.Moneyfromthesaleof commercialpaperiswiredintothemember'saccountlaterthesameday.Whenamember borrowsmoneyfromthepool,theamountisrecordedonamasterdemandnote(adrafthas beenattachedasExhibitB-2oftheFebruary29,2000,application),andispayablewithinterest toConstellationEnergyupon24-hourdemand.ThecashpoolandConstellationEnergy's commercialpaperprogramareextremelyliquidandcanprovidecashtomeetoperatingand maintenance(O&M)expensesusuallyonthesamedaythatsuchneedsareidentified.

Currently,ConstellationEnergyhasa[]commercialpaperprogram.Constellation Energycurrentlyhascreditagreementsandcommittedbanklinesofcredittotaling[]tosupportitscommercialpaperprogram.ConstellationEnergy'scommercialpaperbalancesaveraged[]permonthsincethecashpoolwascreatedinJuly1999.Inaddition,theapplicationstatesthatConstellationEnergywillprovideanintercompanycreditagreementwherebyitwillprovideanycashneededbyCompanythatisnotavailablefromthe cashpooltoprotectthepublichealthandsafety.BGEwillalsoenterintoanagreement (CompetitiveTransitionChargeCollectionAgentAgreement)wherebyBGEagreestoactasan agentforCompanyforpurposesofcollectionofchargestoelectriccustomersfor reimbursementofstrandedcosts.AdraftisattachedasExhibitB-3oftheFebruary29,2000, initialapplication.CompanyhasreachedanagreementinprinciplewithConstellationPowerSource(CPS),anotherwhollyownedaffiliateofConstellationEnergy,forthemarketingandwholesaleofallof CalvertCliffs'netoutputofpower.CompanywillreceivepaymentforCalvertCliffspowerfrom CPSthroughthreeprimaryrevenuecomponents.Thetermofthecontractwillcoveraperiod of3years,estimatedtobeginJuly1,2000.ThefollowingprojectedincomestatementreflectstherevenueandoperationsfortheCCNPP,andtheoperationsandmaintenancefortheISFSI. CALVERTCLIFFSNUCLEARPOWERPLANT,INC.(COMPANY)PROJECTEDREVENUEperMWhr 2001 2002 2003 2004 2005$/MWhr[][][][][]CALVERTCLIFFSNUCLEARPOWERPLANT,INC.(COMPANY)PROJECTEDINCOMESTATEMENT($000)2001 2002 2003 2004 2005Revenues:FixedPayment[][][][][]VariablePayment[][][][][]

BalanceAccount[][][][][]

AncillaryServices[][][][][]

Comp.Trans.Chrg.[][][][][]

Decommissioning[][][][][]

Non-OpRev.[][][][][]Total: Expenses:O&M[][][][][]PF&E[][][][][]

Depr.&Amort[][][][][]

OtherTaxes[][][][][]Total:[][][][][]Incomebeforeinterest&taxes[][][][][](Net)InterestExpense:[][][][][]Taxes:[][][][][]NetIncome:[][][][][]Thefirstrevenuecomponent(FixedPayment)willbeafixedandlevelizedmonthlypaymentforenergyandcapacity,regardlessofoutput.Thisfixedlevelizedmonthlypaymentisexpectedto equatetoapproximately65percentofannualrevenuesreceivedfromCPSundertheproposed powerpurchaseagreement.Theapplicantbelievesthatthisfixedandlevelizedrevenue componentwillalsoservetostabilizeCompany'smonthlyfinancialperformanceandcashflow position,despitepotentiallyvolatilechangesindailyandhourlyenergymarketprices.Thesecondrevenuecomponent(VariablePayment)encompassescertainvariableproductioncosts,includingnuclearfuel.Thisrevenuecomponentwillbepaidforeverymegawatthourof energygeneratedandiscurrentlyestimatedtorepresentapproximately[]millionper yearofadditionalrevenueforCompany.Thisrevenuecomponentwillvaryfrommonthto month,dependingontheoutputgeneratedinagivenmonth. Thethirdrevenuecomponent(BalanceAccount)willbeaperformanceincentivepaymentprovidedtoCompanyonanannualbasisintheeventthatCalvertCliffsperformsbetterthanan availabilitytarget.TheperformanceincentivepaymentwillbedeterminedfromaBalance Accountwhichaccumulateschangesinexpectedperformanceovertheentireyear.The BalanceAccountwilluseamutuallydeterminedandspecifiedavailabilitytargetforCalvert Cliffs.Initscapacityaspowermarketerandriskmanagementprovider,CPSwillbearallcosts relatedto[]oftheadditionalpowercostsintheBalanceAccountarisingfrom lessthanexpectedperformance.Companywillabsorbanyadditionalpowercostsinthe BalanceAccountbeyond[].Companywillalsoreceiveanothersmallerrevenuecomponent(AncillaryServices),relatedtoapproximately[]ofprojectedadditionalservicesrevenuereceivedthroughthe Pennsylvania-NewJersey-MarylandInterconnectionTariffforreactivesupplyandvoltage control.Finally,CompanywillreceiveannualrevenuefromBGErelatedtoa[]shareofallCompetitiveTransitionChargescollectedfromBGEretailcustomers,beginninginJuly2000.

Companycurrentlyprojectstoreceivebetween[]and[]annuallyfor CompetitiveTransitionChargesduringeach12-monthperiodoverthenext5years.Thefirst 12-monthperiodisanticipatedtobegininJuly2000.TheapplicationstatesthattheCompetitiveTransitionChargeannualrevenuesreceivedfromBGEis[],which,whencombinedwiththepowerpurchaseagreementrevenue receivedfromCPSforvariableexpenses,willprovideapproximately[]of aggregateannualrevenueforCompany(excludinganyadditionalfixedrevenuecomponent receivedfromCPS).Nevertheless,becausethefinalagreementhasnotyetbeencompleted, theapplicanthaschosentousethelowerestimatedCompetitiveTransitionChargeforthis analysis.ThestafffoundthatCompany'sprojectionofoperatingexpensesisconsistentwiththeaggregatehistoryoftheunitsinvolvedinthetransfer.However,thestaffbelievesthatoneline itemrequiredmoreextensivereview:projectedrevenuesfrom2001to2005oftheprojected incomestatements.Projectedrevenuesaretheproductofexpectedmegawatt-hoursalesand ofCompany'smarketpriceassumptionsasstatedinthesupportingschedulesoftheprojected incomestatements.Projectedrevenuesandnetincomeareadequatetocoverexpected CalvertCliffsandISFSIexpensesandtoprovideCompany'sownerwithfavorablereturnsonits expectedinvestmentinthefacility.However,inacompetitivemarket,prices,revenue,andnet incomelevelscouldbesignificantlylowerthananticipatedbyCompanyduringsomeportion(s) ofthe5-yearprojectionperiodandcouldresultinlessfundingavailableforCalvertCliffsand ISFSIoperations.Thestaff'sindependentanalysisfocusedonthesensitivityoftheCompanyrevenueforecaststolowermarketpricesforthepurposeofestablishingaprojectedmarketprice"floor"below whichCompanywouldbegintohavedifficultycoveringitsCalvertCliffsandISFSIoperating expensesbyrelyingonCalvertCliffs'revenues.Thisfactorwasanalyzedtodeterminethe averageannualsimplegrowthrateforthemarketprice,whichwouldproducevirtuallyzeronet income(orabreak-evenlevel)overtheperiodfrom2001to2005,andthegrowthratewas comparedtothehigheraverageannualgrowthrateinthemarketpricesinCompany'sforecast.

IfCompanywastoexperiencethislower(orfloor)levelofpricesforanextendedperiod, CompanyoritsownermightdecidetocontinueoperatingCalvertCliffswithoutprofitsor,ata certainpoint,toceaseCalvertCliffs'operationspermanently. ThebasemarketpriceintheCompanyforecastis[

].Thestaffassessedthelikelihoodthatthesevariousgrowth(ordecreased)ratesmayoccurfortheforecastperiod2001-2005.Forecastsofelectricratesincompetitivemarketsaresubjectto manyfactorsthatmakesuchpredictionsspeculative;however,thereasonablenessofvarious growthordecreasedratesmaybeassessedbyconsideringvariousfactorsthatwouldprovide anindicationoffutureelectricityprices.Forexample,recenttrendsinelectricitypricescan provideinferencesonpriceperformanceinthemorecompetitiveenvironmentexpectedinthe electricpowerindustry.Companyexpectstobesellingpowerprimarilyatmarket-basedpricesaftertheyear2003,andthesepriceswillbeamixofcompetitivelydeterminedretailandwholesaleprices.Also,trends inretailandwholesaleelectricitypricesvaryfromoneregiontoanother,soCompany'sprices withinitsmarketareamaynotfollownationaltrends.TheNorthAmericanElectricReliability Council(NERC)projectsthatcapacitymarginswilldecreaseintheMid-AtlanticAreaCouncil (MAAC)from17.1percentto5.1percentduringthe1998-2007timeframe.(FromNERC's ReliabilityAssessment1998-2007,October1998,page11.)AfterreviewingseveralforecastsofUnitedStateselectricitypricesandotherrelativeinformation(suchasaforecastofregionalcapacitymargins),thestaffconcludesthat attemptingtoforecastthegrowthrate,oreventhedirectionofchange,formarket-basedprices intheCalvertCliffs'marketareaistoospeculativetobeusefulforcontingencyanalysis.

Nevertheless,thestaffconcludesfromitsindependentanalysisthatevenifpricesforCalvert Cliffs'powerweretochangeatanaverageannualratemuchlowerthanthatanticipatedby Companyorevenbereducedsubstantially,itdoesnotprecludeCompanyfromoperatingand maintainingCalvertCliffsandtheISFSIinamannerthatwouldprotectthepublichealthand safety.ThestafffindsthatCompanyhasfulfilledtherequirementsof10CFR50.33(f)toprovideinformationthatithasreasonableassuranceofhavingthefinancialresourcestomaintainand operateCalvertCliffsasanon-electricutilityandasanewlyformedentity.ThefinancialinformationrequiredofanapplicanttodemonstrateitsqualificationstomaintainandoperateanISFSIissetoutin10CFR72.22(e).Theinformationwhichisthesubjectof 10CFR72.22(e)(1)isnotneededbecausetheISFSIhasalreadybeenconstructedandthe informationrequestedby10CFR72.22(e)(3)isaddressedinthedecommissioningfunding discussionthatfollows.Theremainingitemforwhichanapplicantmustdemonstratefinancial qualificationsisthe"estimatedoperatingcostsovertheplannedlifeoftheISFSI"(10CFR 72.22(e)(2)).ThesecostswerefactoredintoCompany'sstatements.Thebasisforconcluding CompanywillhavethefundsnecessarytosafelyoperateCalvertCliffsunder10CFR50.33 alsoprovidesreasonableassurancethatCompanywillhavesufficientfundstocoverthe operatingcostsoftheISFSIoveritsplannedlife.4.0DECOMMISSIONINGFUNDINGTheNRChasdeterminedthattherequirementstoprovideassuranceofdecommissioningfundingandprovisionofanadequateamountofdecommissioningfundingarenecessaryto ensuretheadequateprotectionofpublichealthandsafety. Section50.33(k)of10CFRrequiresthatanapplicationforanoperatinglicenseforautilizationfacilitycontaininformationindicatinghowreasonableassurancewillbeprovidedthatfundswill beavailabletodecommissionthefacility.BGEhasfiledadecommissioningreportwiththeNRCunder10CFR50.75andisprovidingfinancialassurancefordecommissioningCalvertCliffsthroughanexternalsinkingfunds (decommissioningtrusts)inwhichdepositsaremadeatleastannually.Withacceptabletax treatment(theapplicanthasreceivedInternalRevenueServiceclarificationonthetaxstatusof decommissioningtruststransfers),anduponthelicensetransfers,BGEwilltransferthose decommissioningtruststoCompany,andCompanywillberesponsibleforthe decommissioningliabilitiesassociatedwithCalvertCliffs.Afterthetransfers,BGEwillcontinue tocollectdecommissioningcostsforCalvertCliffsfromBGE'selectriccustomersthrough BGE'sdeliveryservicecharges,pursuanttoSection22oftheRestructuringOrdersignedby BGEpursuanttotheActandapprovedbytheMarylandPublicServiceCommissionon November10,1999.AcopyofthatOrderwasattachedtotheFebruary29,2000,initial applicationasExhibitC-1.BGEwilltransfertoCompanythefundstocoverdecommissioning costscollectedforCalvertCliffspursuanttoaDecommissioningFundsCollectionAgent Agreement.AdraftoftheagreementisattachedtotheFebruary29,2000,initialapplicationas ExhibitC-2.Thestaffconcludesthat,giventheintercompanyagreementsbetweenBGEand Companythatobligatesuchpayments,Companyisprovidingdecommissioningfunding assuranceintheformofexternalsinkingfundstiedtoanon-bypassablechargepursuantto10 CFR50.75(e)(ii)(B).However,inlightofCompanybeinganunregulatedutilitynotsubjecttotraditionalStatecontrolsondecommissioningfunding,thefollowingconditionsmustbeincorporatedas conditionsofapproval,aswellaslicenseconditions,essentiallyasfollows:ThedecommissioningtrustagreementforCalvertCliffsatthetimethelicensetransfersareeffectedandthereafter,aresubjecttothefollowing:(a)Thedecommissioningtrustagreementmustbeinaformacceptabletothe NRC.(b)Withrespecttothedecommissioningtrustfunds,investmentsinthesecuritiesorotherobligationsofConstellationEnergyoritsaffiliates, successors,orassignsshallbeprohibited.Exceptforinvestmentstiedtomarket indexesorothernon-nuclear-sectormutualfunds,investmentsinanyentity owningoneormorenuclearpowerplantsareprohibited.(c)Thedecommissioningtrustagreementmustprovidethatnodisbursementsorpaymentsfromthetrustsshallbemadebythetrusteeunlessthetrusteehas firstgiventheNRC30-dayspriorwrittennoticeofpayment.The decommissioningtrustagreementshallfurthercontainaprovisionthatno disbursementsorpaymentsfromthetrustsshallbemadeifthetrusteereceives priorwrittennoticeofobjectionfromtheDirector,OfficeofNuclearReactor Regulation.(d)Thedecommissioningtrustagreementmustprovidethattheagreementcannotbeamendedinanymaterialrespectwithout30-dayspriorwritten notificationtotheDirector,OfficeofNuclearReactorRegulation.(e)Theappropriatesectionofthedecommissioningtrustagreementshallstatethatthetrustee,investmentadvisor,oranyoneelsedirectingtheinvestments madeinthetrustsshalladheretoa"prudentinvestor"standard,asspecifiedin18CFR35.32(a)(3)oftheFederalEnergyRegulatoryCommission'sregulations.Otherprerequisitesthatmustbeincorporatedasconditionsofapprovalaswellaslicenseconditionsarethatthebalanceofthedecommissioningtrustfundsimmediatelypriortothe transferwillbe,ataminimum,thebeginningbalanceofdecommissioningtrustfundsafterthe transfer,andthatthecontractsunderwhichthefundsfordecommissioningwillbeprovided throughnon-bypassablechargeswillbeexecutedandmaintained.Thefollowinglanguageis appropriate:Companyshallprovidedecommissioningfundingassurance,tobeheldindecommissioningtrustsforCalvertCliffsuponthetransferofthelicensestoCompany, inanamountequaltoorgreaterthanthebalanceintheCalvertCliffsdecommissioning trustsimmediatelypriortothetransfer.Inaddition,Companyshallensurethatall contractualarrangementsreferredtointheapplicationtoobtainnecessary decommissioningfundsforCalvertCliffsthroughanon-bypassablechargeareexecuted andwillbemaintaineduntilthedecommissioningtrustsarefullyfunded,orshallensure thatothermechanismsthatprovideequivalentassuranceofdecommissioningfundingin accordancewiththeCommission'sregulationsaremaintained.Inaddition,Companyshalltakeallnecessarystepstoensurethatthedecommissioningtrustsaremaintainedinaccordanceorconsistentwiththeapplication,therequirementsoftheOrder approvingthetransfer,andthissafetyevaluation.Basedontheabove,thestafffindsCompanywillprovidereasonableassuranceofdecommissioningfunding.5.0MANAGEMENTOFOPERATIONSANDTECHNICALQUALIFICATIONS5.1BasisandGuidancefortheEvaluation Thestaffusedthefollowingregulationsandguidancetocompleteitsevaluation:10CFR50.40(b),"CommonStandards;"10CFR50.80,"Transferoflicenses;"10CFR72.50,"Transfer ofLicense;"theStandardReviewPlan(SRP)NUREG-0800,Chapter13,"Conductof Operations;"Section13.1.1.,"ManagementandTechnicalOrganization;"Section13.1.2-13.1.3, "OperatingOrganization;"andANSI/ANS18.1-1971,"SelectionandTrainingofNuclearPower PlantPersonnel,"asendorsedbyRegulatoryGuide1.8,Revision2,April1987,"Qualification andTrainingofPersonnelforNuclearPowerPlants."5.2PurposeoftheEvaluation Thepurposeofthisevaluationistoensurethattheproposedcorporatemanagementwillbeinvolvedwith,informedof,anddedicatedtothesafeoperationoftheplantandtheISFSIand thatsufficient,qualifiedtechnicalresourceswillbeprovidedtosupportsafeplantandISFSI operationandmaintenance.Inaddition,changestotheplantandISFSIoperating organizationsorpersonnelqualificationsthatmayoccurasaresultofthelicensetransfersare alsoevaluated.5.3Evaluation:ManagementandTechnicalSupportOrganization UsingtheBasisandGuidancefortheEvaluationstatedatthebeginningofthissection,thestaffreviewedtheapplicant'ssubmittaltodeterminetheacceptabilityoftheproposed transferee'scorporatemanagementandtechnicalsupportorganizationfortheproposed transfer.Thestaffevaluatedtheapplicant'ssubmittalusingtheapplicableacceptancecriteriacontainedinSRP,Chapter13,"ConductofOperations,"Section13.1.1,"Managementand TechnicalSupportOrganization."InitsFebruary29,2000,submittal,theapplicantindicatedthat,TheseproposedchangesdonotinvolvearequestforanychangesinthedesignoroperationofeitherCCNPPortheISFSI,noranychangeinthetermsandconditionsof theexistinglicensesorTechnicalSpecifications.Theonlyproposedamendmentstothe existinglicensesandtheTechnicalSpecificationsareadministrativeandmerelyreflect

[thetransfer].TheCompanywillbetechnicallyandfinanciallyqualifiedtoholdthe OperatingLicensesandtheMaterialsLicense.Inresponsetostaffquestions,inasubsequentsubmittaldatedApril7,2000,theapplicantprovidedpre-andpost-reorganizationchartsforConstellationEnergy.Inresponsetoa telephoneconferencecallonApril14,2000,theapplicantprovidedanadditionalsubmittal datedMay2,2000,statingthattheChiefNuclearOfficer(CNO)fortheCompanywillalsobe thePresident,Chairman,andChiefExecutiveOfficer(CEO)oftheCompanyandthepresident andCEOofConstellationNuclear.Upontheplannedrestructuring,theCNOwouldrelinquish hisBGEtitleandresponsibilitiesand"concentratesolelyonallnuclearactivities..."The applicantfurtherstatedthatthefunctionsandresponsibilitiesoftheCNOwouldremainthe sameasthoseforBGEbeforethetransfer/restructuring.Thestafffindsthepost-reorganizationmanagementandsupportstructureforCalvertCliffs,asproposedbytheapplicant,tobeacceptable.Basedontheforegoinginformation,theapplicantisproposinganorganizationresponsibleformanagingandprovidingtechnicalsupporttotheplantandtheISFSIthatwillmeetthecurrent qualificationsoftheBGEmanagementandtechnicalsupportorganization,ofwhichthestaffis awareofnodeficiencies.Accordingly,thestaffconcludesthattheproposedorganizationsare satisfactoryformanagingandprovidingoff-sitetechnicalsupportforthecontinuedoperationof theplantandISFSIunderbothnormalandoff-normalconditionsafterthetransferofoperating authority.Evaluation:OperatingOrganizationUsingtheBasisandGuidancefortheEvaluationstatedatthebeginningofthissection,thestaffreviewedtheapplicant'ssubmittaltodeterminetheacceptabilityoftheproposedoperating organization,andevaluatedchangestotheoperatingorganizationproposedasaresultofthe licensetransfer.Theinitialoperatingorganizationwasdeterminedtobeacceptablebythe initiallicensingreview,andanysubsequentsafety-relatedchangestotheoperating organizationwererequiredtobeevaluatedwithanappropriatemethodology.Thestaffis awareofnodeficienciesintheexistingoperatingorganizationand,therefore,theexisting operatingorganizationiscurrentlyacceptable.Theproposedlicensetransferinvolvesa transferoftheexistingoperatingorganizationtoCompany.InitsFebruary29,2000,submittal,theapplicantindicated(Attachment1,page3)that:ThetechnicalqualificationsofCompanytocarryoutitsresponsibilitiesundertheOperatingLicenseswillbethesameasthecurrenttechnicalqualificationsofBGE.The reorganizationinvolvesnosignificantchangestoeitherthetechnicalorganizationor staffcurrentlyresponsibleforoperatingCCNPP.Bothbeforeandafterthe reorganization,essentiallythesamenuclearorganizationandstaffwillberesponsible fortheoperationandmaintenanceofCCNPP.ThereorganizationrequiresnochangeinthenumbersandqualificationsofpersonnelwhooperateCCNPP...thestaffwill remainessentiallyunchanged.Theapplicantfurtherstates(Attachment1,page7),"...thetechnicalandfinancialqualificationsofCompanytoown,operate,andmaintainCCNPPwillbeatleastequaltothequalificationsof thecurrentlicensee."InExhibitD-1,"DeterminationofSignificantHazards,"ofitsFebruary29,2000,submittal,theapplicantstates(page1)that:CalvertCliffs,Inc.,personnelwillbetechnicallyqualifiedtooperatetheplant.BaltimoreGasandElectricCompanynuclearpersonnelhavebeennamedtomanagement positionsin[Company]andwillremainresponsibleforCalvertCliffsoperationand maintenance.Theproposedamendmentinvolvesnochangesinthetrainingprogramor operatingorganizationforCalvertCliffs.In(Attachment2,page3)ofitsFebruary29,2000,submittal,theapplicantstatesthat:ThetechnicalqualificationsofCompanytocarryoutitsresponsibilitiesundertheMaterialsLicensewillbethesameasthecurrenttechnicalqualificationsofBGE.The reorganizationinvolvesnosignificantchangestoeitherthetechnicalorganizationor staffcurrentlyresponsibleforoperatingtheISFSI.Bothbeforeandafterthe reorganization,essentiallythesamenuclearorganizationandstaffwillberesponsible fortheoperationandmaintenanceoftheISFSI.Thereorganizationrequiresnochange inthenumbersandqualificationsofpersonnelwhooperatetheISFSI...thestaffwill remainessentiallyunchanged.Theapplicantalsoindicates(Attachment2,page7)that,"TheproposedamendmentdoesnotinvolveanychangeinthedesignoroperationoftheCalvertCliffsISFSI,noranychangeinthe termsandconditionsoftheexistinglicenseorsignificantchangeintheTechnical Specifications.Thetransferwillnotinvolveanychangetoeithertheorganizationsorpersonnel directlyresponsibleforoperationofthefacility."Inresponsetothestaff'srequest,theapplicantprovidedasupplementalsubmittal,datedJune,20,2000,whichclarifiedthatupontransferofthelicense,BGEpersonnelcurrently responsibleforoperatingtheplantandtheISFSIwillbecomeemployeesoftheCompany.Basedontheforegoinginformation,theapplicantisproposingplantandISFSIoperatingorganizationsandpersonnelwithqualificationsthatwillmeetcurrentplantandISFSITechnical Specificationrequirements.Theproposedlicensetransferwillinvolveessentiallynochangeto eitherthemanagementortheplantstaffofCalvertCliffsresponsibleforoperatingand maintainingtheplantandtheISFSIastheybecomeCompanypersonnel.Therefore,thestaff concludesthattheonsiteorganizationsestablishedtooperateandmaintainCalvertCliffsand theISFSIwillbeacceptable.

ConclusionsTheapplicationadequatelyaddressestherelevantrequirementsof10CFR50.40(b),10CFR50.80,and10CFR72.50.Theapplicanthasdescribedthecorporatelevelmanagementand technicalsupportorganizationandtheonsiteoperatingorganizationsthatwillberesponsiblefor theoperationandmaintenanceofCalvertCliffsandtheISFSIafterthetransferofoperating authority.ThestaffconcludesthatCompanywillhaveanacceptablecorporateorganization, onsiteorganizations,andadequateresourcestoprovidetechnicalsupportforthesafeoperationoftheplantandtheISFSIunderbothnormalandoff-normalconditionsafterthe transferofoperatingauthority.Therefore,Companywillbetechnicallyqualifiedtobetheholder oftheCalvertCliffsandISFSIlicenses.6.0ANTITRUSTREVIEWTheAtomicEnergyActdoesnotrequireorauthorizeantitrustreviewsofpost-operatinglicensetransferapplications.KansasGasandElectricCo.,etal.(WolfCreekGeneratingStation,Unit1),CLI-99-19,49NRC441,468(1999).Therefore,sincethetransferapplication postdatestheissuanceoftheoperatinglicenseforCalvertCliffs,noantitrustreviewisrequired orauthorized.7.0FOREIGNOWNERSHIP,CONTROLORDOMINATIONAccordingtotheapplication,Constellation,CN,andCompanyareallMarylandcompanies.AllofthedirectorsandprincipalofficersofConstellation,CN,andCompanyare,orwillbe,U.S.

citizens.TheapplicationstatesthatneitherConstellation,CN,norCompanyisorwillbe owned,controlled,ordominatedbyanalien,foreigncorporation,orforeigngovernment.The staffdoesnotknoworhavereasontobelieveotherwise.8.0NUCLEARINSURANCETheprovisionsofthePrice-AndersonAct(Section170oftheAEA)andtheCommission'sregulationsat10CFRPart140requirethatCompanybeaddedtothecurrentindemnity agreementforCalvertCliffsUnits1and2.InaccordancewiththePrice-AndersonAct, Companywillalsoberequiredtoprovideprimaryinsuranceandparticipateinthesecondary retrospectiveinsurancepool.Theserequirementscanbemetbypurchasinginsurancepolicies fromthenuclearliabilityinsurancepool,AmericanNuclearInsurers.Companywillalsobe requiredtomaintainpropertyinsuranceasspecifiedin10CFR50.54(w).Theinformation providedintheapplicationconcerningfinancialqualificationsdemonstratesthatCompanywill beabletopayitsshareofthe$10millionperunitannualinsurancepremiuminaccordance with10CFR140.21(e)-(f).ConsistentwithNRCpractice,thestaffwillrequireCompanytoprovidesatisfactorydocumentaryevidencethatCompanyhasobtainedtheappropriateamountofinsurance requiredoflicenseesunder10CFRPart140oftheCommission'sregulations,priortothe issuanceoftheamendedlicensesreflectingCompanyasthelicensee.Becausetheissuance oftheamendedlicensesisdirectlytiedtotheconsummationoftheproposedtransfers,the orderapprovingthetransferofthelicensesforCalvertCliffswillbeconditionedasfollows:Companyshall,priortothecompletionofthesubjecttransfers,providetotheDirectoroftheOfficeofNuclearReactorRegulationsatisfactorydocumentary evidencethatCompanyhasobtainedtheappropriateamountofinsurance requiredoflicenseesunder10CFRPart140oftheCommission'sregulations.9.0CONFORMINGAMENDMENTSTOOPERATINGLICENSESA.IntroductionAsstatedpreviously,BGErequestedapprovalofproposedconformingamendmentstoCalvertCliffsRenewedFacilityOperatingLicensesNos.DPR-53andDPR-69.Therequestedchanges removeBGEasthecurrentlicenseefromthelicenses;insertreferencestoCompany,as appropriate;andaddanexplanatorybackgroundfootnotetoeachlicense.Theproposed amendmentsweremodifiedbythestaffforclarityandtoreflecttheconditionsofapprovalofthelicensetransfers.ThesupplementalinformationreceivedaftertheinitialFederalRegisternoticedidnotaffecttheapplicabilityoftheCommission'sgenericnosignificanthazardsconsiderationdeterminationset forthin10CFR2.1315.B.DiscussionThechangestobemadetothelicensesareindicatedinEnclosure2tothecoverletterforwardingthestaff'sorderregardingthesubjecttransfers.Thechangesdonomorethan accuratelyreflecttheapprovedtransferactions.Theamendmentsinvolvenosafetyquestions andareadministrativeinnature.Accordingly,theproposedamendmentsareacceptable.C.StateConsultationInaccordancewiththeCommission'sregulations,theStateofMarylandofficialwasnotifiedoftheproposedissuanceoftheamendments.TheStateofficialhadnocomments.D.ConclusionWithRespecttotheConformingAmendmentTheCommissionhasconcluded,basedontheconsiderationsdiscussedabovethat(1)thereisreasonableassurancethatthehealthandsafetyofthepublicwillnotbeendangeredby operationintheproposedmanner,(2)suchactivitieswillbeconductedincompliancewiththe Commission'sregulations,and(3)theissuanceoftheamendmentswillnotbeinimicaltothe commondefenseandsecurityortothehealthandsafetyofthepublic.10.0CONFORMINGAMENDMENTTOTHEISFSILICENSEThestaffhasreviewedtheproposedamendmenttoMaterialsLicenseNo.SNM-2505fortheCalvertCliffsISFSI.Theamendment,whichissimilartothechangetothefacilityoperating licenses,doesnomorethanaccuratelyreflecttheapprovedlicensetransfer,involvesnosafety question,isadministrative,anddoesnotaffectthedesign,physicalconfiguration,oroperation oftheISFSI.TheamendmentalsorevisedtheTechnicalSpecificationsfortheISFSItoreflect thetransferofthelicense.Theamendmentasproposedwasmodifiedbythestafffor consistencywiththeamendmentstotheoperatinglicenses.Thestafffindstheamendment acceptable.11.0ENVIRONMENTALCONSIDERATIONThesubjectapplicationisforapprovalofatransferoflicensesissuedbytheNRCandapprovalofconformingamendments.Accordingly,theactionsinvolvedmeettheeligibilitycriteriafor categoricalexclusionsetforthin10CFR51.22(c)(21).Pursuantto10CFR51.22(b),no environmentalimpactstatementorenvironmentalassessmentneedbepreparedinconnection withapprovaloftheapplication.

12.0CONCLUSION

Inviewoftheforegoing,thestafffindsCompanyisqualifiedtobetheholderofthelicensesforCalvertCliffsandtheISFSI,andthatthetransferofthelicensesisotherwiseconsistentwith applicableprovisionsoflaw,regulations,andordersissuedbytheCommissionpursuant thereto,subjecttoalloftheconditionsaddressedinthissafetyevaluation.PrincipalContributors:M.A.DusaniwskyjJ.BongarraDate:June30,2000