ML12163A334
| ML12163A334 | |
| Person / Time | |
|---|---|
| Site: | South Texas  |
| Issue date: | 05/31/2012 |
| From: | Rencurrel D W South Texas |
| To: | Document Control Desk, Office of Nuclear Reactor Regulation |
| References | |
| NOC-AE-12002861, STI: 33555572, TAC ME4936, TAC ME4937 | |
| Download: ML12163A334 (16) | |
Text
Nuclear Operating CompanySouth Texas Project Electric Genermtin Station P.. Box 282 Wadsworth, Texas 77483May 31, 2012NOC-AE-1200286110 CFR 54STI: 33555572File: G25U. S. Nuclear Regulatory CommissionAttention: Document Control DeskOne White Flint North11555 Rockville PikeRockville, MD 20852-2738South Texas ProjectUnits 1 and 2Docket Nos. STN 50-498, STN 50-499Response to Requests for Additional Information for theSouth Texas Project License Renewal ApplicationAqinc Manaaement Proaram, Set 19 (TAC Nos. ME4936 and ME4937)References: 1. STPNOC letter dated October 25, 2010, from G. T. Powell to NRC DocumentControl Desk, "License Renewal Application" (NOC-AE-10002607)(ML103010257)2. NRC letter dated May 22, 2012, "Requests for Additional Information for theReview of the South Texas Project, Units 1 and 2 License Renewal Application -Aging Management, Set 19 (TAC Nos. ME4936 and ME 4937)"(ML12143A031)By Reference 1, STP Nuclear Operating Company (STPNOC) submitted a License RenewalApplication (LRA) for South Texas Project (STP) Units 1 and 2. By Reference 2, the NRC staffrequests additional information for review of the STP LRA. STPNOC's response to therequests for additional information is provided in the Enclosure to this letter.There are no regulatory commitments in this letter.Should you have any questions regarding this letter, please contact either Arden Aldridge, STPLicense Renewal Project Lead, at (361) 972-8243 or Ken Taplett, STP License Renewal Projectregulatory point-of-contact, at (361) 972-8416.I declare under penalty of perjury that the foregoing is true and correct.Executed onS, 3,12ol.DateD. W. RencurrelChief Nuclear OfficerKJTEnclosure:STPNOC Response to Requests for Additional Information~4~L NOC-AE-1 2002861Page 2cc:(paper copy)(electronic copy)Regional Administrator, Region IVU. S. Nuclear Regulatory Commission1600 East Lamar BoulevardArlington, Texas 76011-4511Balwant K. SingalSenior Project ManagerU.S. Nuclear Regulatory CommissionOne White Flint North (MS 8B1)11555 Rockville PikeRockville, MD 20852Senior Resident InspectorU. S. Nuclear Regulatory CommissionP.O. Box 289, Mail Code: MN116Wadsworth, TX 77483C. M. CanadyCity of AustinElectric Utility Department721 Barton Springs RoadAustin, TX 78704John W. DailyLicense Renewal Project Manager (Safety)U.S. Nuclear Regulatory CommissionOne White Flint North (MS 011-F1)Washington, DC 20555-0001Tam TranLicense Renewal Project Manager(Environmental)U. S. Nuclear Regulatory CommissionOne White Flint North (MS 011 F01)Washington, DC 20555-0001A. H. Gutterman, EsquireKathryn M. Sutton, EsquireMorgan, Lewis & Bockius, LLPJohn RaganChris O'HaraJim von SuskilNRG South Texas LPKevin PolioRichard PenaCity Public ServicePeter NemethCrain Caton & James, P.C.C. MeleCity of AustinRichard A. RatliffAlice RogersTexas Department of State Health ServicesBalwant K. SingalJohn W. DailyTam TranU. S. Nuclear Regulatory Commission
Enclosure
NOC-AE-12002861EnclosureSTPNOC Response to Requests for Additional InformationAttachment 1: Charter of the Nuclear Oversight Committee of the Board of Directors ofNRG Energy, Inc.Attachment 2: NRG Energy, Inc. Letter to Board of Directors of NRG Energy, Inc. "NuclearOversight Committee", dated April 18, 2006
Enclosure
NOC-AE-12002861Page 1 of 4Foreign Ownership or Control (01.3)RAI 1.1.4-2Background:In its December 21, 2010, response to the U.S. Nuclear Regulatory Commission (NRC orCommission) staffs request for additional information issued on December 15, 2010, SouthTexas Project Nuclear Operating Company (STPNOC), provided information regarding how itplans to mitigate foreign control or domination over activities licensed by the NRC, including,but not limited to, matters relating to nuclear safety, security, and responsibility for specialnuclear material in order for the NRC staff to determine if the aforementioned statute andregulatory requirements have been met. On December 9, 2011, NRG Energy Inc. (NRG) fileda Schedule 13G with the U.S. Securities and Exchange Commission (SEC) indicating an 11percent ownership interest in NRG by Orbis Management Ltd. and Orbis Asset ManagementLtd., both of which are in Bermuda entities. In addition, the NRC staff has identified that theChief Risk Officer of NRG is a citizen of Canada. Based on NRG's Annual Reports filed withthe SEC, the responsibilities of the Chief Risk Officer include oversight of certain financialfunctions.Issue:The Commission's regulations under Title 10 of the Code of Federal Regulations (10 CFR)Section 54.17(b) states that:Any person who is a citizen, national, or agent of a foreign country, or any corporation,or other entity which the Commission knows or has reason to know is owned,controlled, or dominated by an alien, a foreign corporation, or a foreign government, isineligible to apply for and obtain a renewed license.Request:To complete its review, the staff requires the following additional information:a) Describe the type of shares (e.g., common or preferred stock) and shareholder rightsof the shares of NRG that Orbis Management Ltd. and Orbis Asset Management Ltd.own as a result of the December 9, 2011, Schedule 13G filing with the SEC. Inaddition, state what rights Orbis Management Ltd., and Orbis Asset Management Ltd.will have to participate in matters affecting the management or operation of theSTPNOC, including, but not limited to, the right to nominate any Director(s) toSTPNOC's Board of Directors.b) State whether there are any procedures in place to assure that Orbis Management Ltd.and/or Orbis Asset Management Ltd. shareholder rights in NRG, or any foreign entity orany entity that is owned, controlled, or dominated, directly or indirectly, by a foreignentity, does not result in their participation in decisions concerning nuclear safety or
Enclosure
NOC-AE-12002861Page 2 of 4security; obtaining responsibility for special nuclear material; or gaining access torestricted data. If so, provide a list of those procedures.c) State whether there are any unanimous consent requirements for decisions made bythe Board of Directors and whether Orbis Management Ltd. and/or Orbis AssetManagement Ltd. will have any right to participate in unanimous decisions. If so,provide a list of their rights.d) Describe the legal, contractual or financial arrangements, if any, between STPNOC, thethree co-owners of STP Units 1 and 2 (the City of Austin, CPS Energy, and NRG SouthTexas, LP), Orbis Management Ltd., and Orbis Asset Management Ltd., or any foreignentity or any entity that is owned, controlled, or dominated, directly or indirectly, by aforeign entity.e) Describe the Chief Risk Officer's roles, responsibilities, and authority over STP Units 1and 2 regarding NRC activities, specifically as they relate to nuclear safety, security,reliability, or special nuclear material. In addition, state whether there are anyprocedures in place to assure that non-U.S. citizen Directors or Officers will notparticipate in decisions concerning nuclear safety or security; obtaining responsibilityfor special nuclear material; or gaining access to restricted data. If so, provide a list ofthose procedures.STPNOC Response:a) The securities held by Orbis Management Ltd. and Orbis Asset Management Ltd. (Orbis)are Common Stock of NRG Energy, Inc. (NRG). This is listed in Item 2(d) of the Schedule13G dated December 9, 2011, as well as subsequent Schedule 13G filings, including themost recent filing dated April 3, 2012. Orbis has the same shareholder voting rights withrespect to these shares of Common Stock as NRG's other shareholders. Orbis has noright to participate in matters affecting the management or operation of the STPNOC, andOrbis has no right to nominate any Director(s) to STPNOC's Board of Directors.The April 3, 2012, Schedule 13G filing reports that, as of December 31, 2011, Orbis held5.3% of the shares of NRG. Consistent with the SEC requirements in 17 CFR 240.13d-1 (b)(1 )(i), Orbis has certified that its shares of NRG Common Stock "were not acquiredand are not held for the purpose of or with the effect of changing or influencing the controlof the issuer of the securities and were not acquired and are not held in connection with oras a participant in any transaction having that purpose or effect."b) Orbis does not have any shareholder rights in NRG that could result in Orbis participatingin decisions concerning nuclear safety or security; obtaining responsibility for specialnuclear material; or gaining access to restricted data through its status as an NRGshareholder. None of NRG's shareholders has any right to participate in decisionsconcerning nuclear safety or security, has any ability to obtain control or responsibility forspecial nuclear material, or has any way of gaining access to restricted data. STPNOCmaintains control over nuclear safety and security, and it also has control andresponsibility for any special nuclear material possessed pursuant to the licenses issued toSTPNOC and the STP 1 and 2 co-owners. NRG South Texas LP is a licensed owner, but
Enclosure
NOC-AE-12002861Page 3 of 4it does not possess any special nuclear material. Moreover, STPNOC, NRG and NRGSouth Texas LP do not possess any restricted data.c) No decisions made by NRG's Board of Directors or shareholders are required to be madeby unanimous consent. Thus, no shareholder of NRG has any unanimous consent rights.As such, Orbis has no right to participate in any "unanimous decisions."d) The legal, contractual or financial arrangements between STPNOC and the threeco-owners of STP 1 and 2 are described in the December 21, 2010 letter from STPNOC tothe NRC (ML1 03570142) in response to the NRC staff's request for additional informationissued on December 15, 2010 regarding the License Renewal Application for STP 1 and 2.Other than Orbis being a shareholder of NRG, neither STPNOC nor NRG is aware of anylegal, contractual or financial arrangements between Orbis and STPNOC, or betweenOrbis and any of the three co-owners of STP 1 and 2.e) The Chief Risk Officer has no role, responsibility, or authority over STP, Units 1 and 2,regarding NRC-regulated activities, specifically as they relate to nuclear safety, security,reliability, or special nuclear material, STP Units 1 and 2 nuclear decommissioning funddecisions, or other financial matters regulated by the NRC.NRG maintains nuclear decommissioning trusts funds for purposes of complying with10 CFR 50.75, and the trust funds are administered by a Trustee, The Bank of New YorkMellon, i.e., the trust funds are outside the administrative control of NRG in accordancewith NRC requirements. NRG activities related to the trust funds are managed by NRG'sTreasury Department. NRG's Treasurer reports directly to and is responsible to the ChiefFinancial Officer (CFO). The Chief Risk Officer also reports to the CFO, and the ChiefRisk Officer has no oversight authority for activities of the Treasury Department.Significantly, the NRG trust funds are subject to the ongoing jurisdiction and oversight ofthe Public Utility Commission of Texas (PUCT). Through its regulations and Orders, thePUCT imposes investment standards and other requirements on the trust funds, and thePUCT establishes the amounts of annual collections from ratepayers to be deposited intothe trust funds. The PUCT also imposes annual reporting requirements.Additional InformationThe above responses demonstrate that there is no potential for foreign ownership, control ordomination (FOCD) to be exercised over the STP Units 1 and 2 licenses. Therefore, no furtherFOCD mitigation measures are necessary. Nevertheless, NRG previously established aNuclear Oversight Committee (NOC) of the NRG Board and a Nuclear OversightSubcommittee. These committees are made up entirely of U.S. citizens, and Board authorityhas been delegated to the Nuclear Oversight Subcommittee over any matters that could haveimplications for compliance with 10 CFR 50.38. A copy of the Charter of the NOC is providedin Attachment 1, and a copy of the delegation of actions to the Nuclear OversightSubcommittee is provided in Attachment 2.NRG reserves the option to abolish the NOC and the Nuclear Oversight Subcommittee. Infact, by Application dated May 3, 2007, (STPNOC letter NOC-AE-07002155, ML071340049),
Enclosure
NOC-AE-12002861Page 4 of 4STPNOC sought NRC approval on behalf of NRG for the creation of a parent holding companyof NRG without any obligation to continue to maintain the NOC. The License TransferApplication indicated that NRG did not believe any FOCD mitigation was necessary and thatNRG did not intend to continue to maintain the NOC for the purpose of FOCD mitigation,though it might do so for its own business purposes (License Transfer Application, pages9-10). The License Transfer Application provided information regarding a foreign citizendirector of NRG, foreign citizen executive of NRG, and Orbis owning 5.9% of the votingcommon stock of NRG. The NRC staff's October 22, 2007 Safety Evaluation (ML072290444)recited these facts and concluded as follows:Based upon the information provided above, the NRC staff does not know orhave reason to believe that the proposed formation of NRG Holdings, Inc., andthe resulting transfer of indirect control of NRG South Texas licenses, wouldresult in any foreign ownership, control, or domination of NRG South Texas orSTPNOC.The NRC staff concludes that under the proposed indirect transfer, therequirements of 10 CFR 50.38 will continue to be met.Thus, the NRC staff agreed that no mitigation measures were necessary.
Attachment
1INOC-AE-1 2002861Attachment 1CHARTER OF THENUCLEAR OVERSIGHT COMMITTEEOF THE BOARD OF DIRECTORSOF NRG ENERGY, INC.(3 pages)
CHARTER OF THENUCLEAR OVERSIGHT COMMITTEEOF THE BOARD OF DIRECTORSOF NRG ENERGY, INC.1. Purpose. The Board of Directors (the "Board") of NRG Energy, Inc. (the"Company") shall appoint a Nuclear Oversight Committee (the "Committee") to provideoversight with respect to the Company's ownership and operation, directly or indirectly,of its undivided interest in the South Texas Project Electric Generating Station, Unit Nos.I and 2 ("STP") and its interest in STP Nuclear Operating Company ("STPNOC"), andsuch other interests in nuclear power plant facilities as the Company may hold from timeto time.2. Members. The Board shall appoint the Committee, which shall consist ofall of the members of the Board who are citizens of the United States of America andwho otherwise meet the requirements of applicable law to serve on the Committee, andwill designate one member as chairperson. A majority of the members of the Committee,including the chairperson, shall be independent directors. For purposes hereof, anindependent director is a director who meets the definition of "independent director"under the listing standards of the New York Stock Exchange and is affirmativelydetermined to be "independent" by the Board. Each member of the Committee shallserve for a term commencing on the earlier of the adoption of this Charter or the date ofelection to the Board and ending when such member's term as a director expires or suchdirector becomes ineligible by law to serve on the Committee.3. Duties and Responsibilities. The duties and responsibilities of theCommittee shall be as follows:(a) Except as otherwise provided in Section 4 of this charter, theCommittee shall have sole discretion and decision-making authority on behalf ofthe Company as to all matters involving Safety Issues with respect to itsownership interest in STP, STPNOC, and other any nuclear power plant facilitiesin which the Company may hold any interests. Any powers that the Boardgenerally might otherwise have with respect to matters involving Safety Issuesare, except as otherwise expressly provided in this charter, permanently andirrevocably delegated to the Committee. For purposes hereof, Safety Issues arematters which concern any of the following:(i) implementation or compliance with any Generic Letter, Bulletin,Order, Confirmatory Order or similar requirement issued by the NuclearRegulatory Commission ("NRC");(ii) prevention or mitigation of a nuclear event or incident or theunauthorized release of radioactive material,(iii) placement of a nuclear power plant in a safe condition followingany nuclear event or incident;-1I-(iv) compliance with the Atomic Energy Act of 1954, as amended("AEA"), the Energy Reorganization Act, or any NRC rule or applicablesuccessor legislation or rule;(v) compliance with a specified NRC license and its technicalspecifications; or(vi) compliance with a specific Updated Final Safety Analysis Report,or other licensing basis document;provided that any matter which the Committee shall vote in accordance with thischarter that is not substantially or primarily one of nuclear safety shall notconstitute a Safety Issue, so that, for purposes of illustration only, any plantexpenditure of a material nature intended to extend the economic operational lifeor improve the economic performance of the nuclear power plant in question shallnot be considered a Safety Issue.(b) The Committee shall report to the Board periodically with respect toits activities.(c) The Committee shall perform such other responsibilities as may befurther delegated to it by the Board from time to time that are consistent with itspurpose and this charter.4. Certain Decisions Reserved to the Board of Directors. NotwithstandingSection 3 of this charter, with respect to any nuclear power facility in which the Companyhas a direct or indirect interest, the full Board shall have, after consultation with theCommittee, the following rights:(a) the right to vote as to whether or not to close a facility and begin itsdecommissioning, and as to whether to seek relicensing;(b) the right to decide to sell, lease, or otherwise dispose of theCompany's interest in a nuclear power plant facility;(c) the right to take any action which is ordered by the NRC or any otheragency or court of competent jurisdiction.5. Subcommittees. The Committee may form subcommittees for anypurpose that the Committee deems appropriate and may delegate to such subcommitteessuch power and authority as the Committee deems appropriate; provided, however, thatno subcommittee shall consist of fewer than three members; provided, further, that nosuch subcommittee shall be delegated the power and authority to act for the Committeeunless such subcommittee consists of a majority of independent directors.6. Outside Advisors. The Committee, and any subcommittee, shall have theauthority to retain at the expense of the Company such outside counsel, experts, and otheradvisors as it determines appropriate to assist it in the full performance of its functions.
- 7. Meetings. The Committee, and any subcommitteee will meet as often asmay be deemed necessary or appropriate, in its judgment, either in person ortelephonically, and at such times and places as the Committee determines. The majorityof the members of the Committee (or any subcommittee) shall constitute a quorum. TheCommittee, and any subcommittee, shall maintain minutes of its meetings and recordsrelated to those meetings and shall report periodically to the full Board (or theCommittee, as the case may be) with respect to its activities.8. Access to Restricted Information. To the extent that the Company, byvirtue of its ownership of any direct or indirect interest in any nuclear power facility,obtains any so-called "Restricted Data" as to which access is restricted pursuant to theprovisions of the AEA, or any rules, regulations or orders of the NRC, access to suchinformation shall be limited solely to the members of the Committee, and the members ofCommittee shall not, without the permission of the NRC, reveal any such information toany foreign citizen or other person with whom it shall be unlawful to share any suchinformation.9. Amendments. Notwithstanding Article VIII of the Company's By-laws,the provisions of this Charter shall not be materially changed, amended, or repealedwithout the prior consent of the NRC, unless and until (i) the provisions of the AtomicEnergy Act are amended to remove the current provisions thereof restricting foreignownership, control, or domination of nuclear power facilities, or (ii) the Company shall,with the prior written consent of the NRC, have transferred or disposed of all of itsinterests, direct or indirect, in the licenses for any nuclear power facilities. In the eventthat either such condition shall have been met, the Company shall, prior to amending orrepealing the provisions of this Charter, notify the NRC of its intent to effect suchamendment or repeal.-3-Attachrnent2":NOC-AE-12002861Attachment 2NRG Energy, Inc. Letter toBoard of Directors of NRG Energy, Inc."Nuclear Oversight Committee"Dated April 18, 2006(4 pages)
NRG Energy, Inc.211 Carnegie CenterN R G ) Princeton, NJ 08540Date April 18, 2006To Board of Directors of NRG Energy, Inc.From Tim O'Brien and Tanuja DehneSubject Nuclear Oversight CommitteeThis memorandum describes the steps to be taken by the Board of Directors, theNuclear Oversight Committee, the Nuclear Oversight Subcommittee, and members ofNRG management with respect to the establishment and smooth function of the three-person subcommittee of the Nuclear Oversight Committee.A. Actions by Nuclear Oversight Committee.The Nuclear Oversight Committee should approve the following resolutions. This canbe done during the NRG Board meeting on April 28, with Maureen Miskovicabstaining.RESOLVED, that a subcommittee (the "Subcommittee") of theNuclear Oversight Committee (the "Committee") shall be, and hereby is,created, and that the following directors be and hereby are appointed,effective immediately, each to serve in such capacity until the dueappointment and qualification of his or her successor:Herbert H. Tate (Chair)Anne C. SchaumburgPaul W. HobbyFURTHER RESOLVED, that the Committee hereby delegates tothe Subcommittee the authority to act on behalf of the Committee withrespect to all matters that are within the scope of the Committee's charteror otherwise delegated to the Committee by the Board of Directors of theCompany from time to time.
FURTHER RESOLVED, that attendance by a majority of themembers of the Subcommittee at any meeting of the Subcommittee shallconstitute a quorum necessary and sufficient to transact business; that theact of a majority of those present at any meeting shall be the act of theSubcommittee; that notice of each meeting of the Subcommittee shall bedeemed to have been duly given by any member causing to be delivered,not less than 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> prior to the meeting, to the office of each membershown on the records of the Company, written, telephonic, telegraphic,email or facsimile notice of the location, date, time and purpose of themeeting; that a written waiver of notice signed by a member, whetherexecuted before or after the meeting, shall be deemed equivalent to anotice; that attendance and participation in a meeting may take place byconference telephone or similar communications equipment by means ofwhich all persons participating in the meeting can hear each other; andthat any action required or permitted to be taken by the Subcommitteemay be taken without a meeting if all members of the Subcommitteeconsent thereto in writing in accordance with the provisions of theDelaware General Corporation Law.Commentary. By these resolutions, the Nuclear Oversight Committee effectivelydelegates all matters to a three-person subcommittee, which will thereafter be theworking entity of the Board with respect to oversight of nuclear issues.B. Actions by Full Board.The Board should approve the following resolution at the April 28 meeting:RESOLVED, that the Board of Directors of the Company (the"Board") hereby delegates to the Nuclear Oversight Committee theauthority to act on behalf of the Board with respect to all matters relatingto the Company's investment in the South Texas Project GeneratingStation, Unit Nos. 1 and 2 and the Company's interest in STP NuclearOperating Company, except those matters that are expressly reserved tothe Board in the Charter of the Nuclear Oversight Committee.Commentary. There is a need for this resolution because the only matters that werespecifically delegated to the Nuclear Oversight Committee by the Board in October2005 were matters relating to security and safety at STP. The Committee charterprovides that the Committee's responsibilities will also include "such otherresponsibilities as may be further delegated to it by the Board from time to time thatare consistent with its purpose and this charter."
By the foregoing resolution, the Board will formally delegate all STP issues to theCommittee, other than the following issues, which are reserved to the full Boardpursuant to the Committee's charter:(a) the right to vote as to whether or not to close a facility and begin itsdecommissioning, and as to whether to seek relicensing;(b) the right to decide to sell, lease, or otherwise dispose of theCompany's interest in a nuclear power plant facility;(c) the right to take any action which is ordered by the NRC or any otheragency or court of competent jurisdiction.C. Actions by Subcommittee.The Subcommittee should approve the following resolutions. This can be done byunanimous written consent, after the April 28 meeting.RESOLVED, that the President and/or Chief Executive Officer ofthe Company be, and hereby is, authorized in the name of and on behalf ofthe Company to take all actions with respect to the Company'sinvestments and other interests in the South Texas Project GeneratingStation, Unit Nos. 1 and 2 ("STP") and STP Nuclear Operating Company,to the extent such actions are consistent with the 2006 budget of STP or areotherwise necessary or appropriate for the safety, security or ordinarycourse business and operations of STP.FURTHER RESOLVED, that the President and/or Chief ExecutiveOfficer be, and hereby is, authorized to delegate the authority set forthherein to any officer or other agent of the Company, and the Presidentand/or Chief Executive Officer shall document any such delegation ofauthority.FURTHER RESOLVED, that any previous actions by the Presidentand/or Chief Executive Officer that have been taken pursuant to theirrespective duties and obligations are hereby approved, confirmed andratified in every respect.Commentary. By these resolutions, the subcommittee will authorize David Crane, asPresident and CEO, to act on behalf of the Company with respect to our 44% interestin STP in matters relating to the ordinary course of business, or to delegate thatauthority to others. This will provide clear authority to representatives of NRG whosit on the Board of STP or have other oversight of the STP investment.
Matters that are not contemplated by the 2006 budget for STP, or that are nototherwise in the ordinary course of business, will require the review and approval ofthe Subcommittee.D. NRG Management and Staff Support for Subcommittee.Steve Winn will be the lead management liaison with the Subcommittee. EddyDaniels, Regional General Counsel for NRG Texas, will be the Legal Departmentliaison for the Subcommittee, and will act as Secretary to the Subcommittee. Eddywill work with Steve Winn and Herb Tate to develop a calendar and work plan for theSubcommittee for 2006-07, and where feasible will coordinate the Subcommittee'smeetings with scheduled meetings of the STP Board.