L-16-271, Supplemental Information Regarding Pending Application for Order Consenting to Transfer of Licenses and Approving Conforming License Amendments

Supplemental Information Regarding Pending Application for Order Consenting to Transfer of Licenses and Approving Conforming License Amendments

ML16257A235
Person / Time
Site:	Beaver Valley
Issue date:	09/13/2016
From:	Belcher S FirstEnergy Nuclear Operating Co
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
L-16-271
Download: ML16257A235 (2)

Text

FENOC F i$riwpy Nvcretepo"rg Corp- 341 White Pond Drive Akron, Ohio 44320 Samael L. Belcher 330-436-r393 President & Chief Nuclear Officer September 13,2016 L-16-271 10 cFR 50.80 10cFR 50.90 ATTN: Document ControlDesk U. S. NuclearRegulatory Commission Washington, DC 20555-0001

SUBJECT:

BeaverValleyPowerStation,UnitNo.2 DocketNo.50-412,LicenseNo.NPF-73 Supplemental Information Reqardino PendinoApplication for OrderConsenting to Transferof LicensesandApprovinq Conformino LicenseAmendments By letterdatedJune24,2016(ADAMSAccession No.ML16182A155), FirstEnergy NuclearOperating Company(FENOC)actingas agentfor andon behalfof FirstEnergy NuclearGeneration, LLC(FENGen), TheToledoEdisonCompany(TE),andthe Ohio EdisonCompany(OE),submitted an application to the NuclearRegulatory Commission (NRC)requesting consentto the transferof the leasedinterestsin Beaver Valley Power Station,UnitNo.2 (BVPS2) andapprovalof an administrative amendment to conform the licenseto reflectthe proposed transfer (Application).

FENOC requested an order consenting to the transferof TE's 18.26percentinterestin BVPS2to FENGen,andthe transferof OE's21.66percentinterestin BVPS2 to FENGen.

In theApplication's discussion on the financialqualifications of FENGen,theApplication refersto FENGen'sparentcompany,FirstEnergy SolutionsCorp(FES),andstates,as follows:

FEScurrentlyhasinvestment graderatingsof Baa3issuedby Moody's andof BBB-by Standard& Poor'sfor its seniorunsecured debt(refer to Form10-K,page76). Notably, underNRC'sStandard ReviewPlan (Section111.1 . b ), an applicant thatmaintainsan investment grade creditratingfromat leasttwo credibleratingagenciesis presumed to meetthefinancialqualifications test. Thus,theseratingssupportFES' financialcapability to meetits obligations underboththe powersupply agreement andthe $400millionfinancial supportagreement.

BeaverValleyPowerStation,UnitNo.2 L-16-271 Page2 On July29,2016,Moody'sInvestorServicedowngraded its ratingof the senior unsecured debtof FESto Ba2. On August1,20'16,Standardand Poors downgraded its ratingof the seniorunsecured debtof FESto BB-. Therefore, the statement madein theApplication regarding FES'creditratingis no longer accurate,and FESno longerfallswithinthe rebuttable presumption established in the guidance provided in NUREG-1577, Revision l, "Standard ReviewPlanon PowerReactorLicensee Financial Qualifications andDecommissioning Funding Assurance."

TheApplication alsostatedthatFESandAlleghenyEnergySupplyCompany,LLC (AES)hada $1.5billioncreditfacility, withFEShavinga $1.5 billionborrower imit subf andAES havinga $1 billionborrower sublimit.On September 6,2016,the FESsublimit was reducedto $900millionandtheAESsublimit was reducedto

$600 million. These reductions are intended to facilitate the allocation of commitment feeson the unusedportionof eachborrower's sublimitin the caseof splitratingsbetweenFESandAES. The commitments underthe creditfacility remainunchanged at $1.5 billionin the aggregate.

Nevertheless, as discussedin theApplication, FEScontinues to havesubstantial revenue, exceeding $S billionand a net equityof more than $3.6billionas of December 31,2015. Therefore, FEScontinues to haveamplecapability to meet itsobligations underboththe powersupplyagreement andthe $400million financial supportagreement.

Thereare no regulatory commitments contained in thisletter.lf thereareany questions, or if additional information is required, pleasecontactMr.ThomasA. Lentz, Manager FleetLicensing, at 330-315-6810.

I declareunderpenaltyof perjurythatthe foregoingis trueandcorrect.Executedon September19,2016.

Sincerely, SamuelL. Belcher NRCRegionI Administrator NRCResidentInspector NRRProjectManager DirectorBRP/DEP SiteBRP/DEPRepresentative