PLA-8032, Application for Order Approving Indirect Transfer of Control of Licenses and Approving Conforming License Amendments - Supplemental Information (PLA-8032)

Application for Order Approving Indirect Transfer of Control of Licenses and Approving Conforming License Amendments - Supplemental Information (PLA-8032)

ML22301A205
Person / Time
Site:	Susquehanna
Issue date:	10/28/2022
From:	Berryman B Susquehanna, Talen Energy
To:	Office of Nuclear Material Safety and Safeguards, Office of Nuclear Reactor Regulation, Document Control Desk
Shared Package
ML22301A204	List: PLA-8032, Application for Order Approving Indirect Transfer of Control of Licenses and Approving Conforming License Amendments - Supplemental Information (PLA-8032)
References
PLA-8032
Download: ML22301A205 (1)

Text

Addendum to Exhibit A Contains Proprietary Information -

Withhold in Accordance with 10 CFR 2.390

Brad Berryman Susquehanna Nuclear, LLC President and 769 Salem Boulevard Chief Nuclear Officer Berwick, PA 18603 Tel. 570.542.2904 Fax 570.542.1504 Brad.Berryman@TalenEnergy.com

October 28, 2022

Attn: Document Control Desk 10 CFR 50.80 U. S. Nuclear Regulatory Commission 10 CFR 50.90 Washington, DC 20555-0001 10 CFR 72.50

SUSQUEHANNA STEAM ELECTRIC STATION APPLICATION FOR ORDER APPROVING INDIRECT TRANSFER OF CONTROL OF LICENSES AND APPROVING CONFORMING LICENSE AMENDMENTS - SUPPLEMENTAL Docket No. 50-387 INFORMATION 50-388 PLA-8032 and 72-28

Reference:

1) Susquehanna letter to NRC: Application for Order Approving Indirect Transfer of Control of Licenses and Approving Conforming License Amendments (PLA-8015), dated September 29, 2022 (ADAMS Accession No. ML22272A604)

In Reference 1, Susquehanna Nuclear, LLC (Susquehanna Nuclear), acting on behalf of itself and certain Unsecured Creditors (as defined in Reference 1) of Talen Energy Supply, LLC (Talen Energy Supply) (collectively, the Applicants), submitted a request pursuant to Section 184 of the Atomic Energy Act of 1954, as amended, 10 CFR 50.80, and 10 CFR 72.50 for NRC consent to the indirect transfer of control of Susquehanna Nuclears interests in Facility Operating License Nos. NPF-14 and NPF-22 for the Susquehanna Steam Electric Station (SSES) Units 1 and 2, as well as the general license for the SSES Independent Spent Fuel Storage Installation (ISFSI) (the Application).1 In addition, Applicants requested conforming administrative license amendments to reflect a change in the entity responsible for providing a financial support agreement to Susquehanna Nuclear.

As detailed in Reference 1, commencing on May 9, 2022, Talen Energy Supply and certain of its subsidiaries each filed a voluntary case under Chapter 11 of Title 11 of United States Code in the United States Bankruptcy Court for the Southern District of Texas (Chapter 11 Cases).

1 As noted in the Application, Allegheny Electric Cooperative owns a 10% share of SSES. There are no proposed changes to Allegheny Electric Cooperatives ownership share of SSES in this request.

Document Control Desk PLA-8032

The need for NRC consent is based upon the comprehensive restructuring of Talen Energy as a result of the Chapter 11 Cases. The Applicants committed in Reference 1 to update or supplement the Application as required.

Applicants are submitting the enclosed Supplement to the Application (Supplement) to provide the NRC with updated information regarding the planned transaction. More specifically, since submitting the Application, Talen Energy Supply has made certain updates to its business plan as a result of developments in the Chapter 11 Cases. These business plan updates have flowed through in changes to the pro forma projected income statement and cash flow statement for Susquehanna Nuclears share of SSES included in the Application.

In addition, for tax and other considerations, Applicants are considering addition of two wholly-owned intermediate parents of Susquehanna Nuclear in the ownership structure. The enclosed Supplement provides more information on the updated proposed ownership structure, but the addition of these intermediate parents does not change the facts or conclusions regarding governance or control contained in the Application.

The enclosures provide replacements for the existing Exhibit B - Simplified Organization Chart (After Transaction) and Exhibit D - Pro Forma Income Statement and Cash Flow Statement provided with the Application. This Supplement includes a non-public, separately bound Addendum with Enclosure 1 Exhibit A (Proprietary). The proprietary version of Exhibit A contains confidential commercial or financial information. Susquehanna Nuclear and Talen Energy Supply request that the Addendum with Enclosure 1 Exhibit A (Proprietary) be withheld from public disclosure pursuant to 10 CFR 9.17(a)(4) and the policy reflected in 10 CFR 2.390(a)(4), as described in the Declaration of Brad Berryman, which is provided in to the Application.

A publicly available version of Enclosure 1 Exhibit A (Non-Proprietary) suitable for public disclosure is provided in the Application.

There are no new or revised regulatory commitments contained in this submittal.

Should you have any questions regarding this submittal, please contact Ms. Melisa Krick, Manager - Nuclear Regulatory Affairs, at (570) 542-1818.

Document Control Desk PLA-8032

I declare under penalty of perjury that the information in this Application pertaining to Susquehanna Nuclear and Talen is true and correct to the best of my knowledge and belief.

Executed on October 28, 2022.

B. Berryman

Enclosure:

1. Supplement to Application for Order Approving Indirect Transfer of Licenses

Attachment:

1. Declaration of Brad Berryman

Exhibits:

A. Pro Forma Income Statement and Cash Flow Statement (Non-Proprietary Version)

B. Updated Simplified Organizational Chart (After Transaction)

Addendum A. Pro Forma Income Statement and Cash Flow Statement [Proprietary Information - Withhold from Public Disclosure in Accordance with 10 CFR 2.390]

Copy: Director, Office of Nuclear Reactor Regulation NRC Region I Mr. C. Highley, NRC Senior Resident Inspector Ms. A. Klett, NRC Project Manager Mr. M. Shields, PA DEP/BRP Enclosure 1 to PLA-8032

Supplement to Application for Order Approving Indirect Transfer of Licenses

Enclosure 1 to PLA-8032 Page i

List of Exhibits

Declaration of Brad Berryman

Exhibits:

A. Pro Forma Income Statement and Cash Flow Statement (Non-Proprietary Version)

B. Updated Simplified Organizational Chart (After Transaction)

Addendum A Proprietary Version of Exhibit A

Enclosure 1 to PLA-8032 Page 1 of 2

Application for Order Approving Indirect Transfer of Licenses and Approving Conforming License Amendments Supplemental Information

In Reference 1, Susquehanna Nuclear, LLC (Susquehanna Nuclear), acting on behalf of itself and certain Unsecured Creditors (as defined in Reference 1) of Talen Energy Supply, LLC (Talen Energy Supply) (collectively, the Applicants), submitted a request pursuant to Section 184 of the Atomic Energy Act of 1954, as amended, 10 CFR 50.80, and 10 CFR 72.50 for NRC consent to the indirect transfer of control of Susquehanna Nuclears interests in Facility Operating License Nos. NPF-14 and NPF-22 for the Susquehanna Steam Electric Station (SSES) Units 1 and 2, as well as the general license for the SSES Independent Spent Fuel Storage Installation (ISFSI) (the Application).1 In addition, Applicants requested conforming administrative license amendments to reflect a change in the entity responsible for providing a financial support agreement to Susquehanna Nuclear.

As detailed in Reference 1, commencing on May 9, 2022, Talen Energy Supply and certain of its subsidiaries each filed a voluntary case under Chapter 11 of Title 11 of United States Code in the United States Bankruptcy Court for the Southern District of Texas (Chapter 11 Cases).

The need for NRC consent is based upon the comprehensive restructuring of Talen Energy as a result of the Chapter 11 Cases. The Applicants committed in Reference 1 to update or supplement the Application as required based on developments in the Chapter 11 Cases.

Since submitting the Application, Talen Energy Supply has made certain updates to its business plan as a result of developments in the Chapter 11 Cases. These business plan updates have flowed through in changes to the pro forma projected income statement and cash flow statement for Susquehanna Nuclears share of SSES included in the Application.

Applicants are hereby supplementing the Application by providing the updated pro forma projected income statement and cash flow statement for Susquehanna Nuclears share of SSES in the enclosed Exhibit A. The enclosures provide replacements for the existing Exhibit D -

Pro Forma Income Statement and Cash Flow Statement provided with the Application.

Proprietary versions of the updated financial information are provided a non-public, separately bound Addendum with Enclosure 1 Exhibit A (Proprietary). The proprietary version of Exhibit A to this Supplement contains confidential commercial or financial information.

Susquehanna Nuclear and Talen Energy Supply request that the Addendum with Enclosure 1

1 As noted in the Application, Allegheny Electric Cooperative owns a 10% share of SSES. There are no proposed changes to Allegheny Electric Cooperatives ownership share of SSES in this request.

Enclosure 1 to PLA-8032 Page 2 of 2

Exhibit A (Proprietary) be withheld from public disclosure pursuant to 10 CFR 9.17(a)(4) and the policy reflected in 10 CFR 2.390(a)(4), as described in the Declaration of Brad Berryman, which is enclosed. A publicly available version of Enclosure 1 Exhibit A (Non-Proprietary) suitable for public disclosure is provided as Exhibit A to this Supplement.

In addition, the Application stated that the Unsecured Creditors planned to take ownership of reorganized Talen Energy Corporation, a Delaware corporation, upon the completion of the reorganization. Reorganized Talen Energy Corporation in turn would own 100% of the membership interests in Talen Energy Supply, which in turn would own 100% of Susquehanna Nuclear.

For tax and other considerations, Applicants are considering addition of two wholly-owned intermediate parents of Susquehanna Nuclear in the ownership chain between it and reorganized Talen Energy Corporation. Specifically, Applicants are considering adding the following two entities to the ownership chain: (1) New TES Owner, LLC, expected to be a Delaware limited liability company, which will be wholly-owned by reorganized Talen Energy Corporation and, in turn, be the owner of 100 percent of the ownership interests in Talen Energy Supply; and (2) New SN Owner, LLC, expected to be a Delaware limited liability company which will be wholly-owned by Talen Energy Supply and, in turn, be the owner of 100 percent of the ownership interests in Susquehanna Nuclear.2 Exhibit B to this supplement replaces the existing Exhibit B - Simplified Organization Chart (After Transaction) provided with the Application, and is included as Exhibit B to this Supplement. The addition of these intermediate parents does not change the facts or conclusions regarding governance or control contained in the Application.

Reference

1. Susquehanna letter to NRC: Application for Order Approving Indirect Transfer of Control of Licenses and Approving Conforming License Amendments (PLA-8015),

dated September 29, 2022 (ADAMS Accession No. ML22272A604)

2 The names of the two intermediate owners are yet to be determined, so this Supplement uses generic names to describe them.

Attachment 1 to PLA-8032

Declaration of Brad Berryman

Attachment 1 to PLA-8032 Page 1 of 2

DECLARATION SUPPORTING TALEN ENERGY APPLICATION TO WITHHOLD CERTAIN DOCUMENTS FROM PUBLIC DISCLOSURE

I, Brad Berryman, President and Chief Nuclear Officer for Susquehanna Nuclear, LLC, declare the following under penalty of perjury:

1. I am authorized to execute this declaration on behalf of Susquehanna Nuclear LLC, acting on behalf of itself and on behalf of Talen Energy Supply, LLC (collectively, Talen).

2. Talen is providing information to the U.S. Nuclear Regulatory Commission (NRC) in support of the Supplement to Application for Order Approving Indirect Transfer of Licenses. The proprietary version of Exhibit A is being provided separately as an addendum to Exhibit A.

This addendum contains financial information, including pro forma income statements, related to anticipated revenues from sales of electricity and capacity from Susquehanna Steam Electric Station (SSES) Units 1 and 2 along with plant operating and maintenance costs. These documents constitute proprietary commercial and financial information that should be held in confidence by the NRC pursuant to the policy reflected in 10 CFR 2.390(a)(4) and 10 CFR 9.17(a)(4) because:

a. It contains information that is held in confidence by Talen and its affiliates.

b. This information is of a type that is customarily held in confidence by Talen and its affiliates and there is a rational basis for doing so because the information contains sensitive financial competitive information concerning SSES anticipated revenues and operating expenses.

c. This information is being transmitted to the NRC in confidence.

d. This information is not available in public sources and could not be gathered readily from publicly available information.

e. Public disclosure of this information would create substantial financial harm to the competitive position of Talen and its affiliates by disclosing the internal financial pro forma statements and commercial information for SSES to other parties who commercial interests may be adverse to those of Talen.

3. Accordingly, Talen requests that the proprietary version of Exhibit A being provided separately as an addendum to the Supplement to Application for Order Approving Indirect Transfer of Licenses be withheld from public disclosure pursuant to 10 CFR 2.390(a)(4) and 9.17(a)(4).

I declare that the foregoing is true and correct.

Executed on OctoberZ., 2022.

Susquehanna Nuclear, LLC Brad Berryman President and Chief Nuclear Officer Susquehanna Nuclear, LLC S-W-t-- PPr (cu\\"* LC'-' \\*cJr; E; \\ 110 '{'('\\e_ Olf'\\

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Com monwe alth of Pennsylvania

• Nota ry Seal Sohil P. Ghodasa ra, Notary Public Lehigh County My Commission Expires July 18 2025 Commissi on Number 1317 200 Attachment 1 to PLA-8032 Page 2 of2 Exhibit A to PLA-8032

Pro Forma Income Statement and Cash Flow Statement

(Non-Proprietary Version)

Attachment 3 Capacity Factor Assumptions

BASE CASE 2023 2024 2025 2026 2027 Capacity (MW)

Unit 1 Unit 2 Station Period Hours Planned Outage Days Unit 1 Unit 2 Station EPOF [(C

• 24)/ B]

Unit 1 Unit 2 Station

EUOF

Utilization Factor*

Unit 1 Unit 2 Station

Generation (MWh) [ A*B*(1-D-E)*F]

Unit 1 Unit 2 Station

Potential Generation (MWh) [ A*B]

Unit 1 Unit 2 Station

Capacity Factor [ G/H]

Unit 1 Unit 2 Station Exhibit B to PLA-8032

Updated Simplified Organizational Chart

(After Transaction)