ML080940553

Order Approving Indirect Transfer of Facility Operating License

ML080940553
Person / Time
Site:	FitzPatrick
Issue date:	07/28/2008
From:	Pickett D NRC/NRR/ADRO/DORL/LPLI-1
To:	Kansler M Entergy Nuclear Operations
Pickett D, NRR/DORL, 415-1364
References
FOIA/PA-2009-0026, TAC MD6179
Download: ML080940553 (11)

Text

OFFICIAL USE ONLY - PROPRIETARY INFORMATION July 28, 2008 Mr. Michael R. Kansler President & CEO/CNO Entergy Nuclear Operations, Inc.

1340 Echelon Parkway Jackson, MS 39213

SUBJECT:

JAMES A. FITZPATRICK NUCLEAR POWER PLANT - ORDER APPROVING INDIRECT TRANSFER OF FACILITY OPERATING LICENSE (TAC NO.

MD6179)

Dear Mr. Kansler:

By application dated July 30, 2007, as supplemented by letters dated October 31, and December 5, 2007, and January 24, March 17, April 22, and May 2, 2008, Entergy Nuclear Operations, Inc. (ENO), acting on behalf of itself and Entergy Nuclear FitzPatrick, LLC (EN-FitzPatrick), requested that the U.S. Nuclear Regulatory Commission (NRC, the Commission),

pursuant to Section 50.80 of Title 10 of the Code of Federal Regulations, consent to the proposed indirect transfer of control of the Facility Operating License, No. DPR-59, for the James A. FitzPatrick Nuclear Power Plant (FitzPatrick).

EN-FitzPatrick, the owner of the FitzPatrick facility, is currently an indirect subsidiary of Entergy Corporation. Under a proposed corporate restructuring plan, a new holding company, Enexus Energy Corporation (Enexus), will be created and will be publicly owned. According to this plan, Enexus will acquire indirect ownership of 100 percent of EN-FitzPatrick. In addition, ENO, the operator of the FitzPatrick facility, is currently an indirect subsidiary of Entergy Corporation.

Following the corporate restructuring, Entergy Corporation and Enexus will each have indirect control of 50 percent of ENO.

ENO will be converted from a corporation to a limited liability company and its name will be changed to EquaGen Nuclear LLC. Also, EN-FitzPatrick will undergo a name change to become Enexus Nuclear FitzPatrick, LLC. The staff understands that ENO will request an administrative license amendment to conform the FitzPatrick license in the near future.

The enclosed Order (Enclosure 1) approves the proposed indirect transfer of control of the license held by EN-FitzPatrick to Enexus. The Order also approves the indirect transfer of control of the FitzPatrick license to the extent held by ENO to EquaGen LLC, a new intermediate holding company, held in equal shares by two new next tier intermediate holding companies, which are subsidiaries of Entergy Corporation and Enexus.

Enclosures 2 and 3 contain the non-proprietary and proprietary versions, respectively, of the NRC staffs safety evaluation (SE) related to the preceding actions. The non-proprietary version of the SE will be placed in the NRC Public Document Room and added to the Agencywide Document Access Management System Public Electronic Reading Room Library.

OFFICIAL USE ONLY - PROPRIETARY INFORMATION

OFFICIAL USE ONLY - PROPRIETARY INFORMATION M. Kansler The Order is being forwarded to the Office of the Federal Register for publication. If you have any questions, please contact me at (301) 415-1364.

Sincerely,

/RA/

Douglas V. Pickett, Senior Project Manager Plant Licensing Branch I-1 Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation Docket Nos. 50-333 and 72-12

Enclosures:

1. Order

2. Safety Evaluation (Non-proprietary)

3. Safety Evaluation (Proprietary) cc w/encls. 1 and 2: See next page OFFICIAL USE ONLY - PROPRIETARY INFORMATION

ML080940564 (Package)

ML080940553 (Letter and Order)

ML081080352 (Enclosure 2)

ML081080515 (Enclosure 3)

OFFICE LPL1-1/PM LPL1-1/LA IOLB/BC PFPB/BC NAME DPickett SLittle NSalgado ACosta (A) signed on signed on DATE 6/27/ 08 4/ 28 / 08 4 / 24 / 08 4 / 11 / 08 OFFICE LPL1-1/BC OGC DORL/D NAME MKowal SUttal JGiitter DATE 5 / 1 / 08 6 /1/ 08 7/2/ 08

FitzPatrick Nuclear Power Plant cc:

Senior Vice President Resident Inspector's Office Entergy Nuclear Operations, Inc. James A. FitzPatrick Nuclear Power Plant P.O. Box 31995 U. S. Nuclear Regulatory Commission Jackson, MS 39286-1995 P.O. Box 136 Lycoming, NY 13093 Vice President Oversight Entergy Nuclear Operations, Inc. Mr. Charles Donaldson, Esquire P.O. Box 31995 Assistant Attorney General Jackson, MS 39286-1995 New York Department of Law 120 Broadway Senior Manager, Nuclear Safety & New York, NY 10271 Licensing Entergy Nuclear Operations, Inc. Mr. Paul Tonko P.O. Box 31995 President and CEO Jackson, MS 39286-1995 New York State Energy, Research, and Development Authority Senior Vice President and COO 17 Columbia Circle Entergy Nuclear Operations, Inc. Albany, NY 12203-6399 440 Hamilton Avenue White Plains, NY 10601 Mr. John P. Spath New York State Energy, Research, Assistant General Counsel and Development Authority Entergy Nuclear Operations, Inc. 17 Columbia Circle 440 Hamilton Avenue Albany, NY 12203-6399 White Plains, NY 10601 Mr. Paul Eddy Vice President, Operations New York State Dept. of Public Service Entergy Nuclear Operations, Inc. 3 Empire State Plaza James A. FitzPatrick Nuclear Power Plant Albany, NY 12223-1350 268 Lake Road Lycoming, NY 13093 Oswego County Administrator Mr. Steven Lyman Manager, Licensing 46 East Bridge Street Entergy Nuclear Operations Oswego, NY 13126 J.A. FitzPatrick Nuclear Power Plant P.O. Box 110 Supervisor Lycoming, NY 13093 Town of Scriba Route 8, Box 382 Regional Administrator, Region I Oswego, NY 13126 U.S. Nuclear Regulatory Commission 475 Allendale Road Mr. James H. Sniezek King of Prussia, PA 19406 BWR SRC Consultant 5486 Nithsdale Drive Salisbury, MD 21801-2490

FitzPatrick Nuclear Power Plant cc:

Mr. Michael D. Lyster BWR SRC Consultant 5931 Barclay Lane Naples, FL 34110-7306 Mr. John Doering BWR SRC Consultant P.O. Box 189 Parker Ford, PA 19457

7590-01-P UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of )

)

ENTERGY NUCLEAR OPERATIONS, INC. )

)

ENTERGY NUCLEAR FITZPATRICK, LLC )

)

(James A. FitzPatrick Nuclear Power Plant) ) Docket Nos. 50-333 and 72-12

)

ORDER APPROVING INDIRECT TRANSFER OF FACILITY OPERATING LICENSE I

Entergy Nuclear Operations, Inc. (ENO) and Entergy Nuclear FitzPatrick, LLC (EN-FitzPatrick) are co-holders of the Facility Operating License, No. DPR-59, which authorizes the possession, use, and operation of the James A. FitzPatrick Nuclear Power Plant (FitzPatrick). FitzPatrick is a boiling water nuclear reactor that is owned by EN-FitzPatrick and operated by ENO. The facility is located in Scriba, Oswego County, New York.

II By application dated July 30, 2007, as supplemented by letters dated October 31, and December 5, 2007, and January 24, March 17, April 22, and May 2, 2008, ENO, acting on behalf of itself and EN-FitzPatrick, requested that the U.S. Nuclear Regulatory Commission (NRC, the Commission), pursuant to Section 50.80 of Title 10 of the Code of Federal Regulations (10 CFR), consent to the proposed indirect transfer of control of the FitzPatrick license, including the general license for the independent spent fuel storage installation.

EN-FitzPatrick is currently a direct wholly owned subsidiary of Entergy Nuclear New York Investment Company 1 which, in turn, is a direct wholly owned subsidiary of Entergy Nuclear Holding Company #1. Seventy-five percent of Entergy Nuclear Holding Company #1 is

directly owned by Entergy Corporation while the remaining 25 percent is directly owned by Entergy Global, LLC. Entergy Global, LLC is a direct wholly owned subsidiary of Entergy International Holdings LTD which, in turn, is a direct wholly owned subsidiary of Entergy Corporation. Therefore, under the current corporate structure, Entergy Corporation is the indirect owner of 100 percent of EN-FitzPatrick.

Under the proposed corporate restructuring, a new holding company, Enexus Energy Corporation (Enexus), will be created. Initially, the shareholders of Entergy Corporation will separately own the shares of Enexus and, as such, Enexus will be owned by the public.

Entergy Nuclear Holding Company #1 will become a direct wholly owned subsidiary of Enexus.

Entergy Global, LLC, Entergy International Holdings LTD, and Entergy Nuclear New York Investment Company 1 will be eliminated. Accordingly, following the corporate restructuring, Enexus will acquire indirect control of 100 percent of EN-FitzPatrick.

ENO, the operator of the FitzPatrick facility, is currently a direct wholly owned subsidiary of Entergy Nuclear Holding Company #2 which, in turn, is a direct wholly owned subsidiary of Entergy Corporation. Therefore, Entergy Corporation is currently the indirect owner of 100 percent of ENO.

Under the proposed corporate restructuring, Entergy Nuclear Holding Company #2 will be eliminated and ENO will become a direct subsidiary of a new parent company called EquaGen LLC. EquaGen LLC will be owned in equal shares by two new intermediate holding companies as follows. Entergy EquaGen, Inc. is being created as a direct subsidiary of Entergy Corporation and will own 50 percent of EquaGen LLC. Similarly, Enexus EquaGen, LLC is being created as a direct subsidiary of Enexus and will also own 50 percent of EquaGen LLC.

Accordingly, following the corporate restructuring, Entergy Corporation and Enexus will each have indirect control of 50 percent of ENO.

Finally, ENO will be converted from a corporation to a limited liability company and its name will be changed from Entergy Nuclear Operations, Inc. to EquaGen Nuclear LLC. Under Delaware law, EquaGen Nuclear LLC will assume all of the rights and responsibilities of ENO, and it will be the same company (legal entity) both before and after the conversion and name change. Also, EN-FitzPatrick will undergo a name change to become Enexus Nuclear FitaPatrick, LLC. The staff understands that ENO will request an administrative license amendment to conform the FitzPatrick license in the near future.

Notice of the requests for approval and an opportunity for a hearing was published in the Federal Register on January 16, 2008 (73 FR 2950). By petition dated February 5, 2008, Locals 369 and 590, Utility Workers Union of America (UWUA), American Federation of Labor-Congress of Industrial Organization, representing plant workers at the Pilgrim Nuclear Power Station located in Plymouth, Massachusetts, responded to the Federal Register notice and requested a hearing and leave to intervene as a party in the FitzPatrick proceeding. On June 12, 2008, Local 369 filed a notice of withdrawal of its petition to intervene. The notice of withdrawal did not apply to Local 590.

The request for a hearing is currently pending before the Commission. Pursuant to 10 CFR 2.1316, during the pendency of a hearing, the staff is expected to promptly proceed with the approval or denial of license transfer requests consistent with the staffs findings in its safety evaluation. Notice of the staffs action shall be promptly transmitted to the presiding officer and parties to the proceeding. Commission action on the pending hearing requests is being handled independently of this action.

Pursuant to 10 CFR 50.80(a), no license, or any right thereunder, shall be transferred, directly or indirectly, through transfer of control of the license, unless the Commission shall give its consent in writing. Upon review of the information in the application as supplemented and other information before the Commission, and relying upon the representations and agreements

in the application as supplemented, the NRC staff concludes that the proposed indirect transfer of control of the license held by EN-FitzPatrick to Enexus, as described herein, will not affect the qualifications of EN-FitzPatrick as holder of the FitzPatrick license. The indirect transfer of control of the license is otherwise consistent with applicable provisions of law, regulations, and orders issued by the NRC. Furthermore, the NRC staff concludes that the proposed corporate restructuring involving new intermediate and ultimate parent companies over ENO, as described herein, will not affect the qualifications of ENO as holder of the FitzPatrick license. The indirect transfer of control of the license as held by ENO, to the extent affected by the proposed restructuring, is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission.

The NRC staff concludes that the conversion of Entergy Nuclear Operations, Inc. to EquaGen Nuclear LLC would not constitute a direct transfer of the licenses to the extent held by ENO. Therefore, no consent to the proposed conversion is necessary.

The findings set forth above are supported by the NRCs safety evaluation dated July 28, 2008.

III.

Accordingly, pursuant to Sections 161b, 161i, 161o, and 184 of the Atomic Energy Act of 1954, as amended, 42 USC §§ 2201(b), 2201(i), 2201(o), and 2234; and 10 CFR 50.80, IT IS HEREBY ORDERED that the application regarding the indirect license transfer discussed above related to the proposed corporate restructuring and establishment of Enexus is approved, subject to the following conditions:

1 EN-FitzPatrick shall enter into the $700 million Support Agreement with Enexus Energy Corporation as described in the application, no later than the time the proposed transactions and indirect license transfer occurs. EN-FitzPatrick shall

take no action to cause Enexus Energy Corporation, or its successors and assigns, to void, cancel, or modify the Support Agreement or cause it to fail to perform, or impair its performance under the Support Agreement, without prior written consent of the NRC. The Support Agreement may not be amended or modified without 30 days prior written notice to the Director of the Office of Nuclear Reactor Regulation or his designee. An executed copy of the Support Agreement shall be submitted to the NRC no later than 30 days after the completion of the proposed transactions and the indirect license transfer.

EN-FitzPatrick shall inform the NRC in writing anytime it draws upon the Support Agreement.

2 The ten separate support guarantees from various Entergy subsidiaries, which total $315 million, including the support guarantee relating to FitzPatrick, may be revoked when, and conditioned upon, implementation of the new $700 million Support Agreement at the time the proposed restructuring and indirect license transfer are completed.

3 Should the proposed corporate restructuring and establishment of Enexus not be completed within one year from the date of this Order, this Order shall become null and void, provided, however, upon written application and good cause shown, such date may be extended by Order.

This Order is effective upon issuance.

For further details with respect to this Order, see the application dated July 30, 2007, as supplemented by letters dated October 31, and December 5, 2007, and January 24, March 17, April 22, and May 2, 2008, and the NRCs safety evaluation dated July 28, 2008, which are available for public inspection at the Commission's Public Document Room (PDR), located at One White Flint North, Public File Area 01 F21,

11555 Rockville Pike (first floor), Rockville, Maryland and accessible electronically from the Agencywide Documents Access and Management System (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site, http://www.nrc.gov/reading-rm/adams.html. Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS, should contact the NRC PDR Reference staff by telephone at 1-800-397-4209, 301-415-4737, or by e-mail to pdr@nrc.gov.

Dated at Rockville, Maryland this 28th day of July 2008.

FOR THE NUCLEAR REGULATORY COMMISSION

/RA/

Timothy J. McGinty, Acting Director Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation