ML20082H234

Gulf States Utilities Co Motion for Summary Disposition.* W/Certificate of Svc

ML20082H234
Person / Time
Site:	River Bend
Issue date:	01/09/1995
From:	Levanway D GULF STATES UTILITIES CO., WISE, CARTER, CHILD & CARAWAY
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML20078C790	List: ML20078C786 ML20082H234
References
93-680, OLA, NUDOCS 9504140241
Download: ML20082H234 (109)

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UNITED STATE 8 OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of ) Docket No. 50-458-OLA Gulf States Utilities Co., 31 gl. ) A8LBP No.93-680 (River Band Station, Unit 1) )

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GULF STATES UTILITIES COMPANY'8 MOTION FOR

SUMMARY

DISPOSITION Robert B. McGehee Douglas E. Levanway WISE CARTER CHILD & CARAWAY 600 Heritage Building Congress at Capitol i Post Office Box 651 l Jackson, Mississippi 39205-WINSTON & STRAWN 1/JO L Street, N.W.

Washington, D.C. 20005-3502 Attorneys for Gulf States Utilities Company January 9, 1995 9504140241 950109 PDR ADOCK 05000458 0 pop

TABLE OF CONTENTS BACKGROUND OF THE PROCEEDING . . . . . . . . . . . . . . . . 1

SUMMARY

OF THE ARGUMENT . . . . . . . . . . . . . . . ~ . . . 2 ARGUMENT . . . . . . . . . . .. . . . . . . . . . . . . . . . 3 Standard for Granting Motion for Summary Disposition Pursuant to 10 C.F.R. Section 2.749 . . . . . . . .. . . 3 A Motion for Summary Disposition is Appropriate . . . . S' The Factual Bases for Cajun's Admitted Contention Are Not Disputed by GSU . . . . . . . . . . . . . . . . 7 GSU Has Met Its Burden of Going Forward with  :

Specific Evidence that is Uncontroverted . . . . . . . . 9 i

Cajun Has Failed to Produce Evidence or Facts to Dispute GSU's Assertion that0 River Bend Will be Operated Safely . . . . . . . . . . 11 Cajun Has Failed to Dispute the Staff's Finding that I

EOI and GSU Are Financially Qualified . . . . . . .. . 15 Cajun Has Failed to Produce Any Evidence that the  ?

Operational Issues Contained in Contention 5 Have Had, or Will Have, Any Effect on the Safe Operation of the Plant . . . . . . . . . . . . . 18 Even If Cajun's Worst-Case Scenario Were to Come True, the NRC's Experience with Bankrupt Utilities Entitles GSU to Judgment as a Matter of Law . . . . . 21 The NRC Does Not Rely Upon the Financial Qualifications of-its Reactor Licensees to Assure Protection of Public Health and Safety . . . 22 ,

The NRC's Reactor Inspection Program Assures Protection of Public Health and Safety . . . . . . . . 23 Even If GSU Were to Experience Financial i Difficulties or Declare Bankruptcy, the Existing l NRC Regulatory Framework Would Continue to Protect i Public Health and Safety Adequately . . . . . . . . . 27 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . 34' i m,e us i

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a TABLE OF AUTHORITIES CASES Advanced Medical Systems. Inc.,

CLI-93-22; 38 N.R.C. 98 (1994) . . . . . . . .. . . . . . 4 Advanced Medical Systems. Inc., .

1 CLI-94-6, 39 N.R.C. 285 (1994) . . . . . . . . . . . . . . 3 Cameo Diaanostic Centre. Inc.,

LBP-94-34, 1994 WL 687606 (Nov. 1, 1994) . . . . . . . . . 3 Commonwealth Oil and Refinina Co.,

805 F.2d 1175 (5th Cir. 1986),

cert. denied, 107 S.Ct 3228 (1987) .. . . . . . . . . . 31 Georcia Power comoany  ;

(Vogtle Electric Generating Plant),

LBP-94-37, 1994 WL 687583 (Nov. 8, 1994) . . . . . . 3-5, 7 Gulf States Utilities (River Bend),

CLI-94-10, 40 N.R.C. . . . . . . . . . . . . . . . . . 8, 12 Gulf States Utilities (River Bend),

LBP-94-3, 39 N.R.C. 31, 41 (1994) . . . . . . . . . . .7, 8 In re Dant & Russell. Inc.

853 F.2d 700 (9th Cir. 1988) . . . . . . . . . . . . . . 31 i Louisiana Enerav Services. L.P., i ASLBP No. 91-641-02-ML, 1994 WL 256943 (June 3, 1994) . . . . . . . . . . . . . . . . . . . . . . 4 Penn Terra Limited v.

DeDartment of Environmental Resources,

• 733 F.2d 267 (3d Cir. 1984) . . . . . . . . . . . . . . 31 Public Service Company of New Hamoshire  !

(Seabrook Station, Units 1 and 2),

ALAB-895, 28 NRC 7 (1988) . . . . . . . . . . . . . 32, 33 Sacramento Municinal Utility District, 38 N.R.C. at 239-240 . . . . . . . . .. . . . . . . . . . . 4_

EA.cramento Utility District (Rancho Seco),

LBP-93-23, 38 N.R.C. 200 (1993) . . . . . . . . . . . . . 4 Seouovah Fuels Corcoration and General Atomics, LBP-94-17, 39 N.R.C. 359 (1994) . . . . . . . . . . .. . 4 11 = ma m

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- STATUTES AND REGULATIONS 10 C.F.R. 5 2.749 . . .. . . . . . . . . . . ' . . . . 1, 3, 4,'14 11 U.S.C. S 362 . . . . . . . . . . . . . . . . . . . . . . . 31 11 U.S.C. S-503 . . . . . . . . . . . .. . . . . . . . . . . 31 .

49 Fed.' Reg. 35,747, 35,749 (September 12, 1984) . . . . ..

. . . . . . . . . . 32, 33 Atomic Energy Act of 1954, 42 U.S.C. S 2011, at agg. . . . . 19 Energy Reorganization Act of 1974, 42 U.S.C. S 5801, 11 Agg. . . . . . . . . . . . . . . . 19 F.R.C.P., Rule 56 . . . . . . . . . . . . . . . . . . . . . . . 4 O

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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of ) Docket No. 50-458-OLA Gulf States Utilities Co., 31 31 ) ASLBP No.93-480 (River Bend Station, Unit 1) )

GULF STATES UTILITIES COMPANY'S MOTION FOR

SUMMARY

DISPOSITION i The Respondents, Gulf States Utilities Company (" Gulf:

States") and Entergy Operations, Inc. ("Entergy Operations"),

file.this Motion for Summary Disposition in accordance with 1

10 C.F.R. S '2.749. The Respondents ask that the contention of *l i'

Cajun Electric Power Cooperative, Inc. (" Cajun") be dismissed in all respects and that the proceeding be terminated.

I l BACKGROUND OF THE PROCEEDING i On January 27, 1994, the Atomic Safety and Licensing Board I ("ASLB"), over the objections of Gulf States as to standing and the lack of an admissible contention, and the NRC. Staff as to the lack of an admissible contention, allowed Cajun to intervene'in  ;

this proceeding. Of the seven contentions proffered by. Cajun, the ASLB admitted only Contention 2.

An appeal of that decision was taken to the Nuclear l Regulatory Commission ("NRC"), and on August 23, 1994, it affirmed the ASLB's decision to allow Cajun to intervene and to admit Contention 2. Following the Commission's decision, discovery was conducted by all parties. A prehearing conference was held in Washington on October 4, 1994, before the ASLB in an 1 man

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attempt to define and-limit the issues and to settle outstanding discovery disputes. The ASLB ordered that all discovery be 9

completed by November 24, 1994, and that Motions for Summary ,

Disposition, or a written Waiver of Motions for Summary Disposition be filed on or before January 9, 1995. Memorandum and Order (Revised Prehearing Schedule), ASLBP No. 93-680-04-OLA j (Oct. 20,-1994). The discovery phase of this proceeding having  ;

now concluded, Gulf States and Entergy Operations file this Motion for Summary Disposition.

SUMMARY

OF THE ARGUMENT It is undisputed that under the terms of the new River Bend l Operating Agreement (the Operating Agreement and Guaranty Agreement are attached as Exhibits "A" and "B", respectively), -

Entergy Operations ("EOI") may look only-to Gulf States as the source for payment of operating costs. Neither Entergy Operations nor Entergy Corporation, the parent of, inter alia, Entergy Operations, will provide those funds. It is also undisputed that Gulf States faces the potential for financial ,

difficulties if Cajun prevails and is awarded the relief it has sought in its litigation against Gulf States.

The responses elicited through discovery establish that Cajun has no factual or evidentiary basis on which to support its ,

contention that the undisputed facts as described above will ,

1 result in a decrease in the margin of safety at River Bend as alleged in the admitted contention. To the contrary, the NRC Staff has found that Entergy Operations and Gulf States are financially qualified. Entergy Operations, as evidenced by its 2 mm:ms

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l' sworn Responses tol Interrogatories, intends to operate River Bend' safely with the funds made available to it and, if such funds-are not available to safely operate' River Bend, to. safely shut down the facility.

The NRC's oversight and enforcement powers over the safe operation of River Bend, including those which-could theoretically arise from financial difficulties, ensure that River Bend will be safely operated by Entergy Operations.  :

Further, even if the dire circumstances predicted by' Cajun were ,

to occur, the only experience the Commission has with bankrupt' -

commercial light-water nuclear reactor power plants is that they are safely operated under the jurisdiction of the bankruptcy.

court and that the funds necessary for safe operation are ,

available.

-For the foregoing reasons, Gulf States and Entergy 1

Operations submit that they are entitled to judgment as a matter  !

of law.

ARGUMENT Standard for Granting Motion for Summary Disposition Pursuant to 10 C.F.R. Section 2.749 Summary Disposition pursuant to 10 C.F.R. section 2.749 is appropriate where there is no genuine issue as to any material fact and the moving-party is entitled to a decision as a matter of law. 333 In the Matter of Georaia Power Comoany (Vogtle

't l Electric Generating Plant), LBP-94-37, 1994 WL 687583 (Nov. .

8, i

l 1994); In the Matter of Cameo Diaanostic Centre. Inc., LBP-94-34, l 1994 WL 687606 (Nov. 1, 1994); In the Matter of Advanced Medical j 3 me sis I

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Systems. Inc., CLI-94-6, 39 N.R.C. 285 (1994); In the Matter of-Seouovah Fuels Corooration and General Atomics, LBP-94-17,'39 N.R.C. 359 (1994); In the Matter of Louisiana Enerav Services.

lie, ASLBP No. 91-641-02-ML, 1994 WL 256943'(June 3, 1994); ID the Matter'of Sacramento Utility District (Rancho Seco)., LBP 23, 38 N.:R.C. 200 (1993); In the Matter of Advanced Medical Systems. Inc., CLI-93-22; 38'N.R.C. 98 (1994).

Recent decisions have elaborated'on the standard contained in 10 C.F.R. section 2.749 as well as the respective burdens on each party involved in a Motion for Summary Disposition. In Georaia Power Comoany, the Board quoted at length from Sacramento Municinal Utility District, 38 N.R.C. at 239-240, with regard to the standard for summary' disposition. It was stated that:.

The commission has recently reiterated the legal standards to be applied with respect to motions for summary disposition pursuant to 10 C.F.R. s. 2.749. After describing analogies of the rule to motions for Summary Judgment under Rulo 56 of the Federal Rules of Civil Procedure, the Commission observed:

[10 C.F.R. s. 2.749) specifies that summary disposition may be granted only if the filings in the proceeding, including ,

statements of the parties and affidavits, demonstrate both that there is no genuine issue as to any material fact and that the moving party is entitled to a decision as a matter of law. . .

The party seeking summary judgment bears the burden of showing the absence of a genuine issue as to any material fact. In addition,.the Board must view the record in light most favorable to the party opposing such a motion. Thus, if the proponent of the motion fails to make the requisite showing, the Board must deny the motion--even if the opposing party chooses not to respond or its response is inadequate.

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However', if the.movant makes a proper showing-for summary disposition, and if the . :l party l opposing;the motion does not show that  ;

a genuine' issue of material fact exists, the Board.may summarily dispose of all arguments on the' basis of the pleading. l To preclude summary dispositiEn,,when  ;

the proponent has met its burden, the narty j onoomina the motion may not rest uoon ' mere alleaations or denials,' but must set forth '

soecific facts showina that there is a aenuine issue. Bare assertions or general denials are not sufficient. Although the '

E opposing party does not have to show that it

'- would prevail on the issues, it must'at least- '

demonstrate that.there is a genuine factual' .l issue to be tried. The opposing party must controvert any. material. fact properly set out in the statement of material facts which-accompanies a summary disposition motion or that fact will be deemed admitted.. Moreover,. H when the novant has satisfied its initial burden and has supported.its motion by affidavit, the opposing party mustreither i proffer rebutting evidence or submit an y affidavit why it is impractical to do .

so. . . .

l ggorcia Power Comoany, LBP-94-37, slip op. at 7-8 (citations -'

omitted) (emphasis added). j l

l A Motion for Summary Disposition is Anorocriate When the Nuclear Regulatory Commission ("NRC") affirmed the Atomic Safety and Licensing Board's ("ASLB") Order LBP-94-3 on August 23, 1994, the Commission stated the following:

Whether the restructuring of GSU and the transfer of operating control to EOI ultimately harms or enhances River Band's operation is a matter over which Cajun and "

GSU sharply disagree. It may well be that the two actions cannot be shown to have an  ;

impact on the safety of River Bend or that our regulations require no more demonstration of financial qualifications than that already found adequate by the Staff. But such findings would require us to reach beyond the minimum threshold for standing. Although we ,

accept the board's determination that Cajun l I

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has made a sufficient showing for threshold standing on the pleadings,'we do not intimate

- any opinion on.the merit on:of Cajun's claims, which upon~further factual develonment may nrove inadeauate to survive the summary disposition staae.

40 N.R.C. at 49 (emphasis added).

Moreover, the Commission found that,.while the Licensing Board did not err in admitting Cajun's second contention, ,

[a]t the contention filing stage the~ factual 1 support necessary to show.that a-genuine 1

dispute. exists need not be in formal evidentiary form, nor be as strong as that necessary to withstand a summary disposition motion. _ What is required is a " minimal showing-that material facts are in dispute, thereby demonstrating that an ' inquiry in depth' is appropriate."

40 N.R.C. at 51.

The further factual development and inquiry alluded to by the commission has concluded with the closing of the discovery phase of this proceeding, and a Motion for Summary Disposition is now appropriate. During the discovery phase of this proceeding, GSU has responded to 65 separate interrogatories propounded by 1

Cajun, and has produced 8073 pages of documents in response to 41 document requests. Likewise, Cajun has responded to 45 separate interrogatories propounded by GSU, and has produced a number of documents in response to document requests. In addition, the NRC Staff has responded to 15 interrogatories propounded by GSU, and has identified numerous documents in response to 16' document requests. All parties have had sufficient opportunity to develop the " facts" which form the. basis for this dispute. As conce'ded by Cajun in its Brief in Opposition to GSU's Appeal of the ASLB 4 Order, 6 mmes 7 e3y e.p,- -'rr- y 7y,-- - -g, w-ve

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'I Cajun cannot know at this time the precise nature of any future-safety violations.by .l GSU. Consequently, Cajun cannot'now project l how EOI will operate the plant or in what j manner safety problems will arise in the  !

evant of GSU bankruptcy. These matters are -j the subiect of discovery before the Licensina j Board. i r

j (Cajun Electric Power Cooperative, Inc.'s Brief in Opposition to Gulf States. Utilities-Company's Appeal.of Order Granting Petition to Intervene Issued ~by the Atomic Safety and Licensing Board,-at.

1 page 25) (emphasis added).

I Viewing the facts in the light most favorable to Cajun, a l

Motion for Summary Disposition should be granted to GSU.' There i are no genuine issues as to any material facts and GSU is entitled to prevail as a matter of law, because Cajun has failed )

i to describe "the precise nature of any future safety violations  !

by GSU ...," or "in what manner. safety problems will arise in the event of GSU bankruptcy." &

The Factual Bases for Cajun's Admitted Contention I Are Not Discuted by GSU ,)

Contention 2, as admitted by the ASLB, reads as follows:  !

The proposed license amendments may result.in a significant reduction in the margin of safety at River Bend.

Gulf States Utilities (River Bend), LBP-94-3, 39 N.R.C. 31, 41 (1994).

The Commission summarized the bases for Cajun's contention as follows:

l '. The new River Bend Operating Agreement underlying the transfer of operating control to EOI runs only between GSU and EOI. Under the Agreement, GSU is obligated to provide all of EOI's funding for River Bend's-operations. As a result, EOI will be dependent upon GSU for the funds necessary to operate River Bend.

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2. EOI is thinly capitalized. LConsequently, if GSU ceases I

- to make'its operating payments, EOI will have no other i source of funds to maintain safe River Bend operations.: 1

3. GSU faces severe financial exposure from litigation .]

with Cajun and from Texas regulatory proceedings. '

Losses could render GSU unable to make sufficient' payments to EOI for continued rafe plant operations.

4.: Under.the Merger Agreement, Entergy Corporation, the parent of GSU and EOI,'will not be. responsible for-funding EOI's operation of River Bend if GSU ceases to

' fund EOI.

Gulf States Utilities (River Bend), CLI-94-10, 40 N.R.C. at'62.

This statement of the bases'is consistent with the Licensing i

Board's analysis of the bases for the contention. Gulf States Utilities (River Bend), LBP-94-3, 39 NRC at 1. For the purposes of this Motion only, the bases for Cajun's contention, as summarized by the commission, can be conceded by GSU. The new River Bend Operating Agreement governing the operation of River Bend runs only between GSU and EOI.- Pursuant to this Agreement, I EOI is not obligated to provide any funding for the operation of River Bend, and must look'to GSU as the source of those funds.

If GSU ceases to make the payments for operation and maintenance required under the agreement, EOI will have no other source of l 1

funds to operate River Bend. GSU faces financial exposure from the Cajun litigation and the Texas regulatory proceedings, and I these could potentially affect GSU's continued ability to fund the operation of the plant. It is uncontroverted that the relationship among EOI, GSU and Cajun subsequent to the merger

'has not resulted in a decrease in the margin of safety in the operation of River Bend. To.the contrary, Cajun.has not contested-EOI's technical qualifications to operate River Bend.

GSU remains at least as financially stable today as it was prior i

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I to the merger and the issuance of the two license amendments.

Cajun is left, than, to attemptLto dispute what might-happen in l

' the future; Cajun'has not, and cannot, maintain such a dispute.-

T GSU Has Met Its Burden of Going ForwardLwith '

Specific Evidence that is'Uncontroverted In its sworn responses to Cajun's' interrogatories, GSU has addressed the issue of whether there is a reasonable assurance that River Bend would be safely. operated in the event of a determination adverse to Gulf States in the River Bend.

litigation, or the bankruptcy of Gulf States. As stated in response to Interrogatory No. 10:

Entergy Operations, as the licensed operator ,

of the unit, is responsible-for safely  ;

ojarating the unit ~at all times. Entergy Operations would continue to carry out this responsibility in the event of a determination adverse to Gulf States in the-Fiver Band litigation or the bankruptcy of +

Self States.

Further, in response to Interrogatory No. 31 which' asked whether River Bend would be shut down in the event of a detarmination adverse to Gulf States or the bankruptcy of Gulf States, GSU stated'in its sworn responses to interrogatories:

I As long as funds were available to continue the safe operation of River Band, and Gulf States anticipates they would be, a .

determination adverse to' Gulf States in the -

River Bend litigation or the bankruptcy of Gulf States should not result in the shutdown of River Band. If a decision were made not to continue the operation ~of River Bend, it would be safely shut down and maintained in a -

safe condition. j Gulf States further stated in response to Interrogatory

. No. 12 regarding the specific actions which would be taken by .

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o Gulf. States with regard to the operation and maintenance of River Bend in the event of a determination adverse to Gulf States or the bankruptcy of Gulf States thet,

" Gulf States anticipates that no specific actions would be taken other than the usual and normal operation and maintenance of the plant."

Also, in response to Interrogatory No. 13, Gulf States specifically asserted that, In a non-emergency situation, River Bend would be safely shut down and maintained in a safe shut-down condition in accordance with the plaint's operating procedures and technical specifications.

1 In response to Cajun's Interrogatory No. 2-24, which asks GSU to be more specific about how River Bend operations would be funded if there were an adverse determination in the River Bend litigation or if GSU were in bankruptcy, GSU stated the following in its sworn responses to interrogatories:

[I]t is expected that such funds could be ,

available through rate relief in the  ;

appropriate jurisdictions, existing rates j which would not be affected by the adverse  ;

determination or bankruptcy, and/or funds i released by the bankruptcy court. j GSU went on to explain in response to Interrogatory No. 2-28 )

wherein Cajun asked GSU to " explain how EOI would safely operate l the unit in the event of a determination adverse to GSU in the 1

River Bend litigation or by the bankruptcy of GSU ..." that:

This responsibility would be carried out by i Entergy Operations just as it presently  ;

carries out this responsibility with funds )

available from GSU .... There is no reason to expect that a determination adverse to GSU in the River Bend litigation or the bankruptcy of GSU would prevent GSU and Cajun from carrying out the responsibilities to 10 wo u.

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provide the funds necessary to safely operate ,

River Bend. i These. responses to interrogatories, on which GSU relies in support of its Motion for Summary Disposition, clearly establish i a

undisputed facts regarding the continued safe operation and.

1 maintenance of River Bend by EOI in the event of an adverse-determination in the Cajun litigation or'the bankruptcy of GSU. .'

At this stage of the proceeding, Cajun may not simply rely on its 1 allegations or suppositions regarding whether EOI would be able  ;

to safely operate the plant under those conditions. It must now dispute these material facts with specific evidence'to the  ;

contrary. An examination of Cajun's responses to the discovery propounded by GSU makes it clear that Cajun has'not, and cannot ,

I dispute these facts. ,

Cajun Has Failed to Produce Evidence or Facts to Dispute GSU's Assertion that River Bend Will be Operated Safelv i In GSU's Interrogatory No. 22 to Cajun, GSU asked Cajun to

" define the exact differences in the operation of River Band a before and after the issuance of each of the disputed license .

amendments ..." which could affect the level of safety at River.

Bend. Cajun responded as follows:

As a result of the license amendments,  !

resources allocated to operation, including maintenance, and the funding of decommissioning could be reduced or  ;

jeopardized, thereby affecting the margin of safety or the level of " reasonable assurance" of safety at River Bend. GSU will no longer ,

operate River Band. EOI, which seeks to i assume operation of River Bend, will provida no funding for River. Bend operations.

Rather, funding will be provided by a  :

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• subsidiary of Entergy Corporation. (emphasis added)

Thus, when given the opportunity to come forward with specific evidence regarding how the margin of safety at River Bend will be affected by the license amendments, Cajun simply restated the allegations which formed the basis.for its contention. This may have been sufficient for purposes of admitting the contention, but fails to be sufficient to oppose a Motion for Summary Disposition. Gulf States Utilities, 40 N.R.C. at 51. Simply put, Cajun has no evidence on this point, because its allegation is pure conjecture and speculation. Moreover, it is conjecture e

and speculation which is not even based upon its own experience, the experience of other nuclear power plants in the United .

States, or any other evidence, study, or analysis. Cajun's contention is premised upon an event which has not, and may never, happen, and on which there cannot realistically be any proof. Cajun has not brought forward specific evidence that the margin of safety at River Bend will be reduced as a result of an adverse determination in the Cajun litigation. Cajun does not even assert that the margin of safety will be reduced, only that it could be, without providing any concrete facts or examples.

In contrast to Cajun's conclusory assertion that the margin of safety could be affected as a result of an adverse determination in the Cajun litigation, GSU has brought forward specific evidence in the form of its sworn Answers to l I

Interrogatories regarding how Riviar Bend will be operated in the )

event of an adverse determination. As described above, GSU has 1

stated that it will continue to operate River Bend as long as it 12 me.m

4 can safely be done, and that if those funds are not available, River Bend will be safely shut down. The funds for either safely operating River Bend or safely shutting River Bend down will be available through rates already in effect, rate relief from the appropriate jurisdictions, or through the bankruptcy court. No more specific assurances can be given or is needed; given the clearly hypothetical nature of the admitted contention, GSU can only respond with evidence of what it intends to do in response to this hypothetical situation. Cajun was challenged to rebut those statements during discovery with specific evidence to dispute GSU's stated intentions. Cajun has not, and cannot, do this.

i In Interrogatory No. 28, GSU asked Cajun the following:

Identify the safety aspects'related to safe shutdown which Cajun asserts are changed as a result of EOI operating the facility as opposed to GSU operating the facility.

Resoonse: The safety aspects are identified .

in e,q., Cajun's pleadings dated August 31, l 1993, and October 27, 1993.

Once again, Cajun, in response to a question asking it to be specific about how safety will be affected by the license amendments, relies on the conclusory allegations contained in its pleadings. Again, this may have been sufficient for admission of ,

its contention, but is insufficient to withstand this Motion for Summary Disposition. Cajun simply has no evidence or facts on which to base its contention. Its contention is based wholly on a contingent "what if" scenario with no factual, legal, or-evidentiary basis.

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0 In Interrogatory No. 29, Cajun was asked:

Identify any estimates that Cajun has made or are available to it with regard to the safety risks associated'with shutdown of River. Bend, and any estimates of the change in risk as the result of EOI's operation of the facility.

The response by Cajun was as follows:

Cajun has not made, nor does it have available to it, any requested studies at this time.

Thus, Cajun's allegations regarding the decrease in the margin of safety are not based on any studies or other empirical data,.but only on its own conclusory allegations. Further, in Interrogatory No. 31, Cajun was asked the following:

State Cajun's estimate for the costs of safely shutting down the River Bend Station should it be necessary and the annual cost of keeping the facility in such a safely shutdown condition, considering separately the following alternative assumptions:

(a) The facility may at some point in the future resume operation.

(b) The facility is permanently shut down and awaiting decommissioning at some point in the future.

Cajun's response simply referred GSU to the response to Interrogatory No. 29, described above. Clearly, Cajun has no basis on which to assert that the funds necessary to safely shut down River Bend would not be available in the event of a Cajun victory or the bankruptcy of GSU. To allow this matter to proceed further past the summary disposition stage based on a total lack of evidence to support its contention would defeat the purposes of a Motion for Summary Disposition provided in 10 C.F.R. S 2.749.  !

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+3 The responses _by_the Staff further support GSU's position and do'nothing to controvert the undisputed-facts which entitle GSU to judgment.as a matter of law.- In response to Interrogatory No. 6, the Staff stated:

Th( Staff has not identified any differences in the operation of River Bend between GSU and EOI which would adversely affect the margin of safety or the reasonable assurance of the public health and safety.

Cajun Has Failed to Dispute the Staff's Finding that EOI and GSU Are Financially Oualified The Commission found that EOI, as the new operator, is subject to the financial qualifications rule, and'that the-reliability of funding for River Bend's operations has been placed into question. The Commission conceded that the Staff found the sufficient " reasonable assurance of a source'of funds" in the Operating Agreement between GSU and EOI sufficient to .

t render EOI financially qualified, but concluded that this finding was not sufficient to defeat Cajun's right to litigate its contention. The Commission went on to state that "without engaging in a greater inquiry, more appropriate for a later stage of this proceeding, we cannot resolve the significance of Cajun's allegations about the potential combined effect of EOI's thin capitalization, GSU's financial exposure, and a new corporate structure under Entergy." 40 N.R.C. at 53.

The relationship between GSU and EOI is exactly the same as the relationship between any non-owner operator and the owner.  :

It is the same as the relationship between EOI and the owners of Waterford No. 3, Arkansas Nuclear One, Units 1 and 2, and Grand 15 mummis

]

l l

l

'*' , s

^C Gulf, as well as other similar relationships between non-owner operators and owners throughout the country. In all such relationships with which GSU is familiar, the non-owner operator is not responsible for funding the operating costs but, rather, looks solely to the utility for payment of those costs. In essence, while the licensees of a nuclear power facility have to collectively be financially qualified to operate the facility, the Commission has never specifically required that each of the licensees (which could include a non-utility non-owner operator) had to separately demonstrate an independent financial qualification. The fact that this basis for Cajun's contention has been accepted by the Commission implies that there is some significance to that relationship with regard to the funding of operating costs by EOI. To the contrary, no non-owner operator would ever be in the position to fund the operation and maintenance of a nuclear power facility independent of, and without resort to, the utility owner itself as a source for those i funds inasmuch as it has no right to the electrical output nor does it derive any revenue from the sale of the electricity.

There is no other relationship of which GSU is aware regarding the source of funds for operation of a nuclear power facility by a non-owner operator. The non-owner operator's capitalization is never considered to be a source of funds for operating the facility. As stated by the NRC Staff in response to GSU's Interrogatory No. 15: .

The Staff is unaware of ever requiring an independent showing of financial qualifications by a non-owner operator of a light-water commercial nuclear power station 16 mmme

~,, ,

where the owners of such facilities who were obligated to provide funding were. electric utilities as defined in 10 C.F.R. .$ 50.2.2 ,

Also,-in response to GSU's Interroga. tory No. 12, the Staff ,

stated:

The Staff is unaware of ever requiring a parent or holding company of a licensee owning or operating a light-water commercial-

• nuclear power station or.non-owner operating company to guarantee the financial integrity of a licensee.

Both the Licensing Board and the Commission' rejected GSU's arguments that the financial qualifications of EOI are not at issue in this proceeding. Both have explained that, while GSU, as a public utility, is not required to demonstrate financial qualifications at the operating license stage, EOI is not a public utility and its financial qualifications, insofar as they.

relate to its ability to safely operate the plant, are an issue.

As pointed out by the Commission, the Staff has already performed a financial qualifications review of EOI and found it to be financially qualified to function as the operator of River Bend. 40 N.R.C. at 53. Moreover, in approving the amendment to the license reflecting the change in ownership of GSU, the Staff did a financial qualification review of GSU and concluded that GSU is financially qualified "to own or operate the River Bend unit." (Safety Evaluation by the Office of Nuclear Reactor Regulation, Gulf States Utilities, River Bend, Unit 1, Docket No. 50-458, at pages 3 & 4, dated December 16, 1993.) The Staff 2

The non-owner operator's technical qualifications may be an issue, but Cajun does not contest EOI's technical qualifications to be an operator.

17 mem

. ,.s L* 2

, .- i further concluded that t'his determination "would be' subject to-re-review if either GSU's financial situation changes significantly as a result of the' Cajun litigation or if~Entergy transfers significant assets from GSU to'itself or other j l

subsidiaries."' Idi A license. condition was then imposed which- l

~

required GSU to inform _the NRC if these events occur. l

=

Cajun has not disputed, and cannot dispute, the-Staff's --

findings of the financial qualifications of EOI and GSU nor has it shown that-the Staff-imposed condition is in anyway l

\

inadequate. Rather, Cajun's daunting task in this proceeding is l r

to somehow link the potential adverse financial condition of GSU j 1

to a present concern that EOI will lack adequate' funds to operate j River Bend safely. This Cajun has not done, and cannot do.

Cajun Has Failed to Produce Any Evidence that the. j operational Issues Contained in Contention 5 1 Have Had, or Will Have, Any Effect'on the ~

Safe Operation of the Plant Cajun has made much of its alleged' lack-of oversight as a 9

result of the license amendments and has spent a great deal of the discovery period on those issues. While the Commission .

l affirmed only that part of the Licensing Board's ruling which l

admitted Contention 2, the Licensing Board did hold the door j slightly ajar for the imposition of certain conditions proposed by Cajun in Contention 5, if those conditions could be shown to  :

affect the safe operation of the plant. As will be seen from Cajun's Responses to Interrogatories regarding these operational issues, Cajun has failed to establish any link between those issues and the safe operation of the plant.

18 mie eis l

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c. _

r

• b,;-.,.J In Interrogatory No' 40,-Cajun _was asked'the followingl question:

For each of the seven. conditions ~ contained in proposed: Contention 5 of Cajun Electric. Power Cooperative Inc.s Amendment and Supplement: '!

to Petition for Leave to Intervene, Comments and' Request for a Hearing dated August 1,.

1993, identify:

a. .The legal basis in the Atomic Energy Act of-1954, 42 U.S.C. $ 2011,.31 gag.,

Energy Reorganization Act of 1974, 42 U.S.C. S 5801, 11 gag.,.or in'the NRC Rules and Regulations for such condition.

b. The effect on safe operation of the facility were each' condition-separately imposed.

c. Whether~all such proposed conditions are collectively necessary, if not, or all combinations of conditions'which Cajun deems necessary and the basis for each response. '

d. Whether and where any such conditions have previously been imposed by the NRC on any other light-water reactor licensee.

Cajun's response was the'following:

Cajun has not prepared the legal or technical analysis GSU seeks in these questions beyond that contained in'its pleadings.

Thus, Cajun could not even respond to a question asking it  ;

to identify "the effect on safe operation of the facility were  !

each condition separately imposed." Cajun simply has no factual j basis to support its contention that these operational issues may affect the safe operation of the plant. If there were any doubt that these " operational issues" are wholly illusory, Cajun has put those doubts to rest when it was asked,.in Interrogatory No. 1, to identify "each and every safety issue, concern, or allegation related to the operation of River Bend Station that 19 meta l

l has ever been identified, or raised by Cajun to GSU, EOI or NRC."

In response, Cajun identified one issue raised in 1988 regarding the service water lines providing cooling water to the hydrogen coolers. This is the only problem identified by Cajun since Cajun became an owner of River Bend in 1979. Cajun was asked this same question regarding safety matters discussed with GSU, EGI, or their contractors (see Interrogatory No. 5), each meeting with the NRC to discuss safety matters at which Cajun was ]

represented (see Interrogatory No. 7), and each communication between Cajun and the NRC relating to safety matters (see Interrogatory No. 8). For all questions, GSU was directed to this one communication in 1988.

To further bury these issues, Cajun was asked the following in Interrogatory No. 12:

Describe how Cajun's access to River Bend or its access to information regarding the safe operation of River Bend has changed since EOI assumed responsibility for operation on December 31, 1993.

Cajun's response follows:

, Cajun's access to River Bend has not changed regarding the safe operation of River Bend.

In response to Interrogatory No. 5, the Staff responded similarly:

The Staff is not aware of any change in l Cajun's access to River Bend or its access to information regarding the safe operation of River Bend since EOI assumed responsibility for operation on December 31, 1993.

Surely, with Cajun admitting that it has raised only one safety issue as a co-owner of this facility, and that its access regarding safe operation of the plant has not changed as a result 20 maisis l

____-_______-_____-____L

I t ,L' '

• - l 1

1

of EOT'becoming the operator of the facility, this issue should not'be allowed to survive the summary disposition stage.- l o Whatever Cajun's desires regarding access to information, they.

are irrelevant to the present proceeding, because Cajun has

. admitted that nothing about its access to information has changed 4 .

as a result of the license amendments. If there were perceived shortcomings in that access, they existed prior to the. license amendment and are purely a contractual matter not subject to this Board's jurisdiction. While Cajun has made much of its supposed )

denial of access to INPO information, Cajun admitted in response l to Interrogatory No. 11 that those same limitations, if any,_

existed prior to December 31, 1993. Thus, the change of  ;

operators sought in this license amendment does not affect this operational issue, and these operational issues should be disposed of at this stage.

Even If Cajun's Worst-Case Scenario Were to Come True, the NRC's Experience with Bankrupt Utilities 1 Entitles GFU to Judament as a-Matter of Law Cajun has clearly not met the task before it: to create a disputed issue of fact based on a purely hypothetical situation i l

for which it has no factual basis. GSU has clearly met its burden of going forward with evidence on the issues raised by l l

Cajun. However, the only real " evidence" on which either party can rely is the experience the NRC has had with nuclear power facilities which have gone through bankruptcy. What this experience shows is that the oversight, inspection, and enforcement procedures available to the NRC are more than adequate to ensure the safe operation or safe shutdown of the 21 me n.

l

.Q. .i facility, and that' nuclear power plants which go into. bankruptcy are funded through existing rates in the-bankruptcy court in sufficient amounts to ensure the safe operation of tho' plant.

This experience establishes that dire financial conditions on the part of the utility do not result in under-funded, unsafe operations or shutdowns, but rather. result in stricter scrutiny J by the NRC and' operations funded by the bankruptcy court.

The NRC Does Not Rely Upon the Financial .

Qualifications of its Reactor Licensees J to Assure Protection of Public Health and Safetv j The' mission of the'NRC, as recently reiterated by the i

Commission, is to assure that civilian uses of nuclear I materials in the United States -- in.the operation of nuclear power plants and fuel.

cycle plants, and in medical, industrial and research-applications -- are carried out with adequate protection of public health and safety, of the environment, and of national security. The. agency also has a role in combating the proliferation of nuclear materials world-wide.2 i

The Commission does not rely upon the financial  !

qualifications of its power reactor licensees to assure that the operation of NRC facilities by those licensees adequately protects public health and safety. Rather, l

the NRC accomplishes its purpose by the l licensing and regolatory oversight of nuclear reactor operations and other activities involving the possession and use of nuclear materials and wastes; by the safeguarding of nuclear materials and facilities from theft and/or sabotage; by the issuance of rules and 2

United States Suclear Regulatory Commission - Annual Report 1993 (NUREG-1145, Vol. 10), Chapter 1, p. 1.

22 won

", t standards; and by inspection and enforcement actions.'

The NRC's Reactor Inspection Program Assures Protection of Public Health and Safety The NRC inspection program referred to above is one mechanism by which the NRC provides assurance that its licensees are meeting their responsibilities:

A basic element in the NRC reactor regulation program is the inspection of licensed reactor facilities to assure reactor safety by confirming that the operations comply with the provisions of the license, and to look for other conditions that have safety implications sufficiently serious to warrant corrective action.'

The Commission's inspection program does not supplant the licensee's programs or attenuate the licensee's responsibilities.

Rather, the inspection process " seeks to independently verify the effectiveness of the licensee's implementation of its programs, t to ensure that operations are being carried out safely and in accordance with applicable NRC requirements."s Detailed information concerning the implementation of the Commission's Reactor Inspection Program inspections is found in the NRC Inspection Manual chapter 2500.

Idx United States Nuclear Regulatory Commission - Annual Report 1993 (NUREG-1145, Vol. 10), Chapter 2, pp. 25-26.

s Id , Chapter 2, p. 28. The licensee is required,to operate the facility in strict accordance with its license and technical specifications and is required to self-report to the Commission any deviation from the stringent requirements which could affect safe operation. Egg, e,q, (OCFR SS 50.72 and 50.73).

23 me:i o.

I Inspections are conducted primarily by region-based inspectors (most of whom are specialists) and resident inspectors.' NRC resident inspectors, who'are stationed at each reactor under construction and in operation, provide the major on-site NRC presence for direct observation and verification of licensee activity. This effort includes in-depth inspections'of control room operations; maintenance and surveillance testing ' carried out by the licensee; periodic " walk-down" inspections to verify the correctness of system lineups for those nuclear systems important to safe operation; and frequent plant tours to assess radiation control, physical security, equipment condition, and housekeeping.'

NRC region-based inspections are supplemented by inspections conducted by special teams made up of personnel from both NRC Headquarters and the Regional Offices. Region-based inspectors perform technically detailed inspections in such areas as engineering, system modifications, inservice inspections, fire protection, physics testing, radiation protection, physical security and safeguards, maintenance, and licensee management systems.'

The Commission's reactor inspection program allows NRC headquarters and regional inspections to focus upon those plant operations that contribute most to ensuring reactor safety. As recently described by the NRC, this reactor inspection program includes the following three elements:

(1) Core InsDections. The regular inspections conducted at every plant. They 142, p. 26.

Id2, p. 26.

1d2, Chapter 2, p. 26.

24 mmai.

provide a balanced look at a cross-section of plant activities considered important to maintaining safety.'

~(2) Area-of-Emohasis Insoections. This program element consists of two parts:

• Generic Area Team Inspections addressing a subject area in which an emerging safety concern was found, or in which increased attention is needed because of a history of long-standing or recurring problems.

Inspections of this kind are. scheduled for all sites."

e safety Issues Inspections are one-time inspections to address a specific safety concern. The Staff institutes these inspections by a temporary instruction (TI).

A TI may be issued to ensure inspection i

follow-up of safety issues addressed in a bulletin or Generic Letter, or any other specific safety issue that calls for a one-time confirmatory inspection. i (3) Initiative Inspections. Inspections instituted by the Regional Administrator to follow-up on problems identified in licensee performance during other inspections and to address areas where the greatest safety benefit can be obtained. This category also includes those reactive inspections that are conducted unannounced, at the discretion of the Regional Administrator, in response to various Concern.

glant events or conditions of The NRC considers the results of the inspection program as  ;

l one element in making its overall evaluation of licensee l

Examples of core inspection areas include plant 1 operations, surveillance and maintenance observations, and engineering.

4

" The NRC began conducting this kind of inspection in <

1990 in the areas of electrical distribution systems I and the operational performance of service water systems. J i

l

" The NRC 1993 Annual Report, Chapter 2, p. 26.

25 mm.os

~

l performance for the Systematic. Assessment of Licensee Performance

.("SALP") program, another means by which the Commission provides assurance that power reactor facilities under its jurisdiction are being comprehensively evaluated and operated safely.

Under the SALP program, the performance of each licensee with a nuclear power facility in operation or under construction is evaluated through the periodic, comprehensive examination of available data, which includes inspection findings, special results review, and similar licensing and inspection-related information. SALP ratings are designed.to provide an overall assessment of how well the licensee management is directing and guiding operations, and providing needed resources to the requisite assurance of plant safety. SALP inspections focus the NRC and licensee attention on, and to direct resources to, those areas that can most closely affect nuclear safety and that need improvement." The SALP process is one tool the NRC utilizes in determining whether additional NRC resources are necessary to assure the public health and safety.

In sum, the NRC's reactor inspection program combined with the input of the office of Nuclear Reactor Regulation enables the NRC Staff to assure that its rules and regulations are being met and that the facility is being operated in accordance with all requirements, including those contained in the operating License and Technical Specifications and legal commitments, detect any adverse trends on plant safety, and thereby ensure the continued protection of the public health and safety. The NRC Staff

" 142, Chapter 2, p. 30.

26 mian sie

. . .- - . . . _ = ,~ . - . , .- - - -. --

i

. budgeted approximately 757 Full Time Equivalent'("FTE") positions _ i for reactor. inspection in 1994, at a total cost of $73

'million." From September 1993 through. September 1994, total inspector hours averaged.4,430' inspector hours per reactor."

At the River Bend Station alone, the Staff performed 22 separate inspections during the past_ year, illustrating the thoroughness of the reactor inspection program and the Staff's dedication to the stringent implementation of that program.

I Even If GSU Were to Experience Financial Difficulties or Declare Bankruptcy, the Existing ,

NRC Regulatory Framework Would Continue to Protect Public Health and Safety Adecuatelv As discussed above, GSU has sufficient financial resources to assure that the River Bend Station will be operated safely even were there adverse decisions in the pending litigation-

" Budget Estimates Fiscal Years 1994-1995 (NUREG-1100,  !

Vol. 9), p. 35. In addition, for 1994, the NRC budgeted approximately 534 FTE at a total cost of $62 '

million for the Reactor Oversight program. As explained in the NRC's budget estimate:  ;

E This program element is designed to ensure that operating facilities maintain adequate levels of protection of public health and 4 safety in their daily operation and throughout the life cycle of the plant.

Safety oversight is maintained in all operating conditions, in the event of a '

radiological emergency, and in the event'of theft of nuclear materials or sabotage, and includes assurances that trained and qualified operating and technical support personnel interact in an environment that l ensures that their ability to prevent or cope  ;

with accidents is not compromised.

141 at 39.

" December 23, 1994 telephone conversation with Sue Gagner of the NRC Office of Public Affairs.  ;

27 man os

.1 ,,

4 ,,

O.

discussed in the basis ofjthis contention. Moreover, GSU has ~

I taken,'and will' continue to take, all actions necessary to ensure that the facility has sufficient funds to operate in conformance, with all conditions of its license and satisfies applicable NRC I requirements. Further, EOI is legally obligated, as the licensed operator of River Bend, to shut down the facility and hold it.in  !

such a condition were it necessary to assure the public health and safety. Sufficient internal controls are in place to assure that the plant can be operated safely with the funds available or  ;

that the plant is placed in a safe shutdown condition.  ;

Specifically with regard to this facility, the NRC has recently stated that: -

The Staff has'not identified any differences  !

in the operation of River Bend between GSU >

and.EOI which would adversely affect the margin of safety or the reasonable assurance of public health and safety."

Thus, the NRC Staff's position on this issue directly contradicts the assertions made by the intervenor in its admitted contention. ,

i There is no basis to assert that the plant will not be operated safely or, alternatively, be placed in a shutdown condition even .

were Cajun to prevail in one or more of the proceedings cited in the basis for the contention.

Clearly, the Commission has adequate means at its disposal to ensure that any financial difficulties or problems experienced .,

by a power reactor licensee -- including GSU -- do not affect the

" "NRC Staff's Responses to Licensee's Interrogatories,"

p. 6. (Gulf States Utilities Co. (River Bend Station, Unit 1), Docket No. 50-458-OLA, __ NRC __ (Sept. 19, 1994).] (This document will hereafter be cited as "NRC Interrogatory Responses.")

28 me s. .

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t .-

safe operation of that licensee's nuclear facility. The Staff has confirmed that if the agency determines that a power reactor licensee is encountering financial difficulties, "the Staff can increase safety oversight to ensure that financial difficulties are not adversely affecting safe operation at the licenswe's facility (ies).""

In particular, as the Staff recently reiterated in this proceeding, if the NRC were to find that the safe operation of a nuclear power plant has been or potentially could be affected by financial issues, it has various efficacious remedies at its i disposal:

If the Staff determines through the inspection process that safe operation has been or could be compromised from whatever q cause, the Staff can use the enforcement remedies available to it, including the imposition of civil monetary penalties. If safe operation cannot be assured, the NRC has the authority to shut down the reactor facility until such time as the capability of safe operation is restored."

The NRC Staff has recently affirmed that it is not aware of any instance in which actions have been taken against a licensee

" based on a Staff finding that financial matters had affected safe operation of that licensee's facility."" Although, as discussed below, some plant owners have historically experienced financial difficulties, NRC has never, to date, found any nexus between such financial difficulties and the safe operation of i

" NRC Interrogatory Responses, p. 7.

" NRC Interrogatory Response, p. 8. i

" NRC Interrogatory Response, p. 9.

29 minti

)

l i

l

4 that licensee's nuclear power plant. In fact, the NRC has in the past allowed two power reactors, the Seabrook Station and Polo l

Verde Units 1-3, (collectively involving three licensees) to operate while the owner (s) of such facilities were in bankruptcy.

In the case of the Seabrook plant, two licensees, Public Service Company of New Hampshire (PSNH) and EUA Power Corporation, sought bankruptcy protection. PSNH's ownership share of Seabrook was transferred to Northeast Utilities; EUA Power's ownership interest in the plant was transferred to a successor utility, Great Bay Power Corporation. In neither instance did the NRC take action before the bankruptcy court."

However, the Commission did review (and approve) the transfer of ownership from PSNH to Northeast Utilities, and the transfer from EUA Power to its successor.

In the Palo Verde case, the U.S. Department of Justice intervened on behalf of the NRC because El Paso Electric's purported rejection of its Palo Verde leases constituted a transfer of its interest in, and license for, the plant; this raised regulatory issues arguably within the province of the NRC.

When El Paso later indicated that it may no longer seek to reject the leases, DOJ decided not to move for a referral of the regulatory issues.8' Under the bankruptcy laws, adequate means exist to assure that sufficient funds are available for safe plant operation or safe shutdown. For example, although the filing of the petition

" NRC Interrogatory Responses, pp. 10-12.

8' Idt, p. 13.

30 me:izia

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4 -

k

. automatically-stays most acti ons agai nst the debtor or the estate,'the stay will.not' apply-to a proceeding or action by a _

governmental. unit ~ seeking'to enforce its regulatory orLpolice ,

The NRC, as a." governmental unit," '

power. 11 U.S.C. S 362 (b) .

can therefore enforce its health or safety regulations or orders against a licensee in bankruptcy, and such enforcement action will'not be subject to the automatic stay. Although this issue has not arisen with' regard to a NRC licensee, courts have required debtors-or trustees to make incidental expenditures to comply with an agency's~ action to enforce environmental laws.

Egg, Penn Terra Limited v. Decartment of Environmental Resources, 733 F.2d 267, 277-278'(3d Cir. 1984); Matter of Commonwealth oil and Refinina Co., 805 F.2d 1175, 1186 (5th Cir. 1986), cert.

denied, 107 S.Ct 3228 (1987).

In addition, Section 503 (b) (1) (A) of the Bankruptcy Code provides that administrative expenses including the actual, necessary costs and expenses of preserving the estate are given priority over unsecured claims. 11 U.S.C. S 503 (b) (1) (A) . A ,

number of courts have viewed environmental clean-up costs incur. red post-petition as necessary to preserve the bankruptcy estate, and have granted those costs administrative expense priority. Egg In re Dant & Russell. Inc. 853 F.2d 700, 709 (9th Cir. 1988). The costs required for safe operation or safe shutdown of the River Bend facility are analogous to clean-up costs and so, as administrative expenses necessary to preserve the estate, will be granted priority over unsecured claims.

31 mems

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Cajun's assertions are contraryfto the rationale on which the NRC's financial qualifications rule is based.- The NRC's-treatment'of the' issue of financial qualifications'for electric

~

utilities)is dispositive of any-assertion that GSU's financial condition, without more, constitutes a health or safety. issue, Specifically, in promulgating its financial qualifications -

rule in 1984, the NRC eliminated any financial qualifications review for electric utilities in connection with NRC operating '

licenses.82 The NRC found that for electric' utilities, no proven link-exists between financial qualifications review and j i

safety, given that either adequate funding will be available for safe operation or that, in the absence of funds, plant operation >

will be stopped. Egg 49 Fed. Reg. 35,747, 35,749 (September 12,

'1984).

After the promulgation of the financial qualifications rule, -

the Commission and its adjudicatory boards have rejected -

4 petitioners' attempts to link financial condition with safety.

For example, in Public Service Comnany'of'New Hannshire (Seabrook  ;

Station, Units 1 and 2), ALAB-895, 28 NRC 7 (1988), the intervenors unsuccessfully sought a waiver of the Commission's financial qualifications rule, arguing that the bankrupt status 88 NRC regulations do not require that. applicants for an operating license which are electric utilities provide information regarding its financial qualification to carry out the activities for which the NRC permit or license is sought. Egg 10 C.F.R. S 50.33(f). With regard to this facility, the NRC Atomic Safety and Licensing Board previously ruled at the construction permit stage that Gulf States Utilities Company was financially qualified to design and construct the River i Bend Station. Gulf States Utilities Co. (River Bend Station, Units 1 and 2), LBP-76-32, 4 NRC 293 (1976). ,

32 mems

w-Jof the licensee warranted a waiver of the rule. In discussing

' the rationale behind the limitation on financial reviews, the Appeal Board stated:

(T]he Commission pointed out that.a financial disability is not.a safety hazard gar 33 because the licensee is required under the Commission's regulations to cease. operating if necessary funds for safe operation are not available. . Finally, it noted that concern-for safe performance is not confined to those utilities with just financial problems and that safe operation is best ensured by other regulatory tools such as the NRC's inspection and enforcement process.

Seabrook, ALAB-895, 28 NRC at 13.

After the Appeal Board certified the question of financial qualifications, the Commission denied the waiver request. It reasoned that the underlying basis for. conducting the financial review in the first place was "solelv" to provide some added assurance that a license would not, because of financial difficulties, be under pressure to take some safety shortcuts."-

Seabrook, CLI-88-10, 28 NRC at 600. The Commission then cited to its 1984 rulemaking proceeding, wherein it stated that "'(a) financial disability is not a safety hazard gar 13 because the licensee can, and under the Commission's regulations would be obliged to, simply cease operations if necessary funds to operate safely were not available.'" Idz at 600, citina 49 Fed. Reg. at 35,749.88 28 The Commission again emphasized that it "has 1 consistently preferred to place-its reliance on the I ability of its inspectors to discern indicia of cost-cutting that could lead to a lack of safety rather than on its ability to make financial Dredictions." Public Service Comoany of New Hamoshire (Seabrook Station, (continued...)

l 33 me sa l

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+ ^

CONCLUSION

]

GSU is entitled to summary judgment as a matter of law. It- )

has met its burden of going forward with specific. evidence on-each " factual" basis of Cajun's admitted contention. That evidence is in the form of GSU's sworn Responses to l

Interrogatories in which GSU explains the source for the funding.

necessary to fund safe' operation of the plant, and its intention )

to safely operate the plant or, in the alternative, to safely shut down the plant if necessary. It is in.the form of the i~ Staff's Responses to Interrogatories describing the experiences i i

with commercial light-water nuclear power plants which have gone l through bankruptcy and have been safely operated, as well as the enforcement. actions available to the NRC in the event of dire financial circumstances. In addition, Cajun has provided the evidence most telling and dispositive of this Motion: that it has no factual or evidentiary basis to support its contention. In discovery, it has relied solely on the allegations of its pleadings, and the Commission has clearly held that-reliance on mere allegations in pleadings is not sufficient to withstand a Motion for Summary Disposition. In considering this motion, it is respectfully urged that the Board ask itself this question:

Whether any genuine issue remains to be heard if Cajun has nothing more to offer than this after the extensive discovery conducted by both parties. For the foregoing reasons, GSU 4

1. 2

(... continued)

Units 1 and 2), CLI-89-20, 30 NRC 231, 245 (1989)

(emphasis added).

34 m en.

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respectfully requests'that an' order be entered dismissing Cajun's-contention and approving'the license amendments sought herein.

Respectfully submitted, k r-

' 7 obert B. ehee~ 1.

Douglas E L vanway WISE CARTER CHILD & CARAWAY 600 Heritage Building Congress at Capitol Post Office Box 651 Jackson, Mississippi 39205 Telephone: (601) 968-5500 WINSTON & STRAWN 1400 L Street, N.W.

Washington, D.C. 20005-3502 Telephone: (202) 371-5700 Attorneys for Gulf States Utilities company Dated this 9th day of January, 1995 35 mm.sa I

.(, ,. .- ...-

4 g ,

$. . RIVER; BEND STATION OPERATING AGREEMENT This operating Agreement is made and entered into

** "# , 1993 between Entergy as of operations, Inc. (Company) and Gulf Str.tes Utilities Company (Gulf States) .

WHEREAS, both of the parties hereto are wholly.

owned subsidiaries of Entergy Corporation; and WHEREAS, Company operates, as agent for the owners and pursuant to operating licenses issued by the Nuclear Regulatory Commission, the Waterford Steam Electric Station, Unit No. 3, located near Taft, Louisiana, the Grand Gulf.

Nuclear Station, located near Port Gibson, Mississippi, and' Arkansas Nuclear One, Units 1 and 2, located near Russellville, Arkansas; and WHEREAS, Gulf States is an electric utility that generates, transmits and distributes electricity in the States of Louisiana and Texas and operates a nuclear power plant located'in West Feliciana Parish, Louisiana, known as the River Bend Station (River Bend); and WHEREAS, pursuant to the provisions of the Joint Ownership Participation and Operating Agreement (the JOPOA) 4 between Gulf States and Cajun Electric Power Cooperative,  ;

1 Inc. (Cajun), Gulf States holds a seventy percent (70%)

undivided ownership interest and Cajun holds a thirty percent (30%) undivided ownership interest in River Bend, and Gulf States has been authorized to act as the agent for 1

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Cajun with authority to manage, control, maintain and operate River-Bend; and WHEREAS, Gulf States represents and Company acknowledges that Gulf States is executing this Operating Agreement for itself and as agent for Cajun and that Gulf States and Cajun are severally and not jointly liable for l l

payments to Comptny that are properly chargeable to River Send hereunder in proportion to Gulf States' and Cajun's respective undivided ownership interests in River Band; and WHEREAS, Gulf States is the holder of Facility Operating License, No. NPF-47, NRC Docket No. 50-458, for River Bend, issued by the NRC; and WHEREAS, Gulf Rtates desires to delegate to the Company certain operating responsibility for - but not ownership of - River Bend; and WHEREAS, Gulf States desires that such operating responsibility be consistent with Gulf States' obligations and responsibilities under all pertinent state and federal law and under the JOPOA; and WHEREAS, Gulf States desires to contract with Company so as to enable Company to possess, use and operate e River Bend as Gulf States' agent, and Company desires to undertake such responsibility, all subject to and in accordance with the terms and conditions set forth herein; o

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NOW THEREFORE, IN CONSIDERATION of'the mutual obligations set forth herein, the parties hereto agree'to the-following:

ARTICLE I.

DEFINITIONS As used herein:  !

1.1 " Application" means the Application of Gulf States and Cajun (consented to by Company)' before the Nuclear Regulatory Commission to amend the Operating License '

so as to authorize and reflect in the license the change from Gulf States to Company as the-licensee authorized to possess, use and operate River Band, as previously or hereafter supplemented or amended.

1.2 " Capital Improvements" means improvements, additions, modifications or replacements of property at ,

River-Band that are properly capitalized and recorded on Gulf States' books of account as assets under the FERC Uniform System of Accounts, and that are in accordance with

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applicable rules and regulations of any regulatory authority 4

having jurisdiction in the matter.

1.3 " Costs of Capital Improvements" means all ,

costs of Capital Improvements as defined in'Section 1.2 herein.

1.4 " Costs of Operation" or " Cost of Operation"  !

means all costs of Operation, decontamination and

4 pocoom noe decommissioning and any related taxes incurred or accrued under or with respect to this operating Agreement and attributable or allocable to River Band and properly recordable in expense accounts under the FERC Uniform System of Accounts. These costs shall include, without limitation, any costs incurred in connection with the Operation of River Bend, but excluding costs of Nuclear Fuel that is owned by Gulf States or Cajun or leased directly by Gulf States or Cajun from one or more third parties. All of such Costs of operation shall be calculated, and allocation of such costs shall be made, as the parties shall from time to time agree, and shall be made in accordance with any applicable rules and regulations of the Se,curities and Exchange Commission under the Public Utility Holding Company Act of 1935, the FERC under the Federal Power Act and other regulatory authorities having jurisdiction in the matter.

1.5 " Effective Date" means the effective date of this Operating Agreement as determined pursuant to Section 8.1.

1.6 "FERC" means the Federal Energy Regulatory Commission or its successor.

1.7 " Force Majeure" means any cause beyond the affected party's reasonable control.

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1.8 " Good Utility Practice" means any of the practices, methods and acts engaged in or approved by a '

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30000215 DOS.

t significant proportion of the electric utility industry at' ,

the time of the reference, or any of the practices, mathods ,

and acts which, in the exercise of reasonable judgment in

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light of the facts known at the-time the decision was made, could.have been expected to accomplish the desired result at 't i

a reasonable cost consistent With reliability, safety and expedition. Good Utility Practice shall apply not only to functional parts of River Bend, but also to appropriate structures, landscaping, signs, lighting and other facilities. Good Utility Practice is not intended to be limited to the optimum practice, method or act to the

, i exclusion of all others, but rather to be a spectrum of prudent and acceptable practices, methods or acts. >

1.9 " Gross Negligence and/or Willful Misconduct" means any act or omission by or authorized by a party's officers, persons reporting directly to such officers or its Board of Directors that is performed, authorized or omitted consciously with prior actual knowledge or with reckless disregard of facts indicating that such conduct or omission is likely to result in actionable damages or injury to persons or property or to result in a violation of laws or  !

regulations.

l 1.10 " Merger Agreement" means the Agreement and Plan of Reorganization, dated June 5, 1992, between Gulf ,

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4 1.11 "NRC" or " Nuclear Regulatory Commission" means the United States Nuclear Regulatory Commission or its successor having responsibility for administration of the licensing and regulation of the operation of nuclear utilization facilities under the Atomic' Energy Act of 1954 and amendments thereto.

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1.12 " Nuclear Fuel" means any' source, special nuclear or by-product material as defined in the Atomic Energy Act of 1954 and any amendments thereto, including any ores, mined or unmined, uranium concentrates, natural or I i

enriched uranium hexafluoride, or any other material in process containing. uranium, and any fuel assemblies or parts thereof, any of which are required for the generation of electricity at River Bend.

[ 1.13 " Operate" and its derivatives means to

! possess, use, manage, control, maintain, repair, operate and i

decommission. l 1.14 " Operating License" means the Facility  ;

) l Operating License No. NPF-47 for River Bend and amendments thereto as issued from time to time by the NRC.

ARTICLE II.  ;

COMPANY'S AUTHORITY AND RESPONSIBILITY WITH RESPECT TO OPERATION OF RIVER BEND 2.1 Authority for Ocaration. Company and Gulf

. States agree that Company shall act as the agent of Gulf States to take all actions necessary to make Capital i

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. eomoris oce Improvements to and to operate River Bend, each in.

accordance.with Good Utility Practice and'in the bert.

interest of Gulf States. Gulf States hereby grants Company ,

.- the authority to take any and all action, in Gulf States' name and on Gulf States' behalf, necessary to obtain and/or ,

maintain all licenses and. permits issued by the NRC or other regulatory bodies relating to River Bend and necessary to comply with all applicable regulations of the NRC and other.

governmental bodies having jurisdiction over any aspect of the Cost of Operation, Cost of Capital Improvements, making of Capital Improvements and/or Operation of River Band.

Without limiting the foregoing delegation, Company shall act as the agent for Gulf States and Cajun in all matters related to NRC licensing of River Bend. Furthermore, Company shall provide Gulf States with data and assistance as may be requested by Gulf States to enable Gulf States to satisfactorily discharge, as a co-owner of River Bend and agent of Cajun, its responsibilities'with regard to River Bend, including its responsibilities to its securities holders, to Cajun, to regulatory authorities and others.

Company shall operate, and make Capital. Improvements at,- -

River Bend in accordance with the Operating License and applicable laws and regulatory requirements and shall have .

sole authority, as the Operator of River Bend, to make all decisions relating to public health and safety. Subject to l

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I the provisions of Sections 2.2 and 2.3 herein, in order to enable Company fully and effectively to perform its duties hereunder, Company shall have, and Gulf States does hereby grant to Company, as agent for Gulf States, the power and authority to exercise in accordance with applicable laws,  !

1 the rights of Gulf States and Cajun under, and to execute, modify, amend or terminate, any contracts, including, l without limitation, leases, easements, agreements, purchase ,

i orders, licenses, permits and privileges relating to the  ;

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Operation of, and making of Capital Improvements to, River .)

Bend, as agent for Gulf States and Cajun. Company may  !

perform its duties hereunder through its employees, affiliated persons or non-affiliated persons. Except as i

provided in Section 11.5 hereof, the duties of Gulf States and company hereunder shall be subject in all events to receipt of any further necessary consents or regulatory approvals. Subject to Company's obligations and responsibilities under this operating Agreement, the Operating License and applicable laws and regulatory l I

requirements, Company agrees that it shall comply with directions from Gulf States relating to the Operation and making.of Capital Improvements (including the costs thereof) at River Bend.  !

l 2.2 Limitation on Comoany's Authority.

Notwithstanding Section 2.1 above, Company shall have no l

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-l authority under this operating Agreement without the-written j approval of' Gulf States, which. approval shall_not'be-unreasonably withheld, (a) to obligate Gulf States,-lon behalf of itself and Cajun, to pay costs of Capital Improvements and Costs of Operation that are either materially different from or in excess of the expenditures to be agreed upon pursuant to Section 5.1 herein, (b) to obligate Gulf States, on behalf of itself and Cajun,'to pay Costs of Capital Improvements that have not been approved pursuant to any Gulf States policy with respect to its Board of Directors' approval.of capital expenditures, (c) to i

modify, amend or terminate any contracts executed by Gulf I

, States, on behalf of itsglf and Cajun, that are existing and t

were in effect prior to the Effective Date and that are presently or in the future will be categorized as material by Gulf States, and/or (d) to sell, encumber or otherwise dispose of any real property or any equipment or personal property comprising RivGr Band. In addition, Gulf States shall have exclusive authority to define the economic life and to determine when the economic life of River Bend has ended and, in its sole discretion, may direct. Company, in writing, to retire and decommission River Bend or to operate ,

River Bend at reduced capacity and/or to place River Bend in a safe shutdown condition; provided, however, Company shall take any such action in a manner which it determines, in its

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i sole. judgment, is consistent with public health and safety, the operating License and applicable laws and regulations.

L In addition, Company is authorized to operate River Band at i

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a reduced capacity or otherwise to place River Bend in a safe shutdown condition at any time company determines-such action is necessary to comply with the operating. License and l l

l applicable' laws and regulations. .All costs incurred by Company in taking such action relating to decommissioning or l shutdown of River Bend shall be considered costs of operation or Costs of Capital Improvements, as the case may l be. With respect to acquisitions by Company, as agent for 1

. Gulf States and Cajun, of Capital Improvements and other equipment or property, including, but not limited to, materials, supplies and spara parts-inventories, for River Bend, Gulf States' Chief Financial Officer shall provide Company from time to time as necessary with instructions or guidelines as to the preferred-financial structure of such acquisitions (i.e.,. purchase, lease, etc.), which shall be used in implementing such acquisitions.

2.3 Execution Disclosures in Third-Party Contrac13 Contracts relating to the Operation of River Bend, including, without limitation, any contracts for I

l- Capital Improvements or contracts for the sale, lease or acquisition of materials, inventories, supplies, spare t

parts, equipment, fuel, Nuclear Fuel (excluding contracts

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for the financing through lease or otherwise for Nuclear Fuel) or services,-shall be executed by Company, as agent ,

for Gulf States and Cajun, or by Gulf States, upon Company's ,

. reasonable request. If a contract subject to-Section 2.1.

relates to.both River Band and one or more other power:

plants that are operated by company, such contracts.(" Multi-Plant Contracts") shall be executed by Gulf States at company's request, on reasonable grounds, or by Company, on reasonable grounds, on behalf of Gulf States, Cajun, and the owners of the.other applicable plants. Company further agrees that with respect to Multi-Plant Contracts, Company will not enter into such Multi-Plant Contracts without the ,

t prior written consent of. Gulf. States unless such contract  ;

contains a provision for several but not solidary liability of the owners of the plants under such Multi-Plant Contracts in proportion to the costs allocated to the various power plants under such contracts. In order to induce third parties to contract with Company with regard to the performance of Company's obligations under this operating ,

Agreement, Gulf States, on behalf of itself and as agent for Cajun, hereby expressly agrees to be bound by the terms of all contracts executed by company in accordance with its agency authority as described herein (including, without.

limitation, any provisions that limit or protect against a third party's liability, provisions granting indemnity to

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p0000215 DOS third parties and limitations or exclusions of warranties) to the same extent as if Gulf States were an original signatory to such contract. In addition, if Gulf States' signature is deemed by Company to be necessary to induce a third party to contract with Company, Gulf States agrees to not unreasonably refuse to execute such third-party agreements, on behalf of itself and as agent for Cajun, as Company may request from time to time. It is further agreed that the Chief Financial Officer of Gulf States shall notify Company in writing of the contracts or types of contracts related to River Bend that are to be executed by Company, in its capacity as Gulf States' and Cajun's agent, that Gulf States desires to review .in order for Gulf States to monitor and evaluate the potential impact on Gulf States and Cajun of such contracts and to advise Company of such impact so that Company shall take all steps to protect Gulf States' and Cajun's interest. Accordingly, Company agrees to provide Gulf States copies of such contracts within e reasonable time prior to Company's proposed execution thereof.

l 2.4 Enforcement of Richts. )

I A. Gulf States hereby recognizes that, l except with respect to facts and circumstances existing, or litigation instituted by or against Gulf States, prior to the Effective Date, Company has complete and exclusive

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authority with respect to the handling of the defense,. '

prosecution and/or settlement of disputes with third parties relating in any way to River Bend, provided that company shall obtain Gulf States' written consent and direction prior to instituting or settling any lawsuit, claim, proceeding or action relating to River Bend which is of a type categorized as material by Gulf States.

B.

With respect to litigation relating in any way'to River Bend that arises out of facts or ,

circumstances existing prior to the Effective Date, Gulf States shall, after consultation with company, decide upon the appropriate manner of defending, prosecuting or. settling such litigation.

C.

Subject to Article VI, it is further agreed that to the extent Company incurs any liability to a third party in performing its duties under this operating Agreement, amounts paid by Company because of such liability and company's expenses in defending claims by third parties or prosecuting claims against third parties shall be considered costs of operation.

2.5 Comnanv's Responsibilities at other Plants.

Company's duties and responsibilities under this operating Agreement shall not be construed to-interfere with company's authority and responsibility to operate any other plants for which it has operating responsibility; provided, however, s, pmm2is se .

l that Company hereby agrees that it will not knowingly take any action or fail to take any action in connection with River Bend that is inconsistent with Good Utility Practica =

and puts Gulf States or Cajun at a disadvantage to company ]

or to the owners of-such other plants._  :

ARTICLE III.

GULF STATES' RESPONSIBILITY AND OBLIGATIONS 3.1 Payment. In consideration of the services rendered by Company hereunder, and subject to the provisions of this operating Agreement, Gulf States hereby agrees to pay the costs of operation and Costs of capital Improvements incurred by company pursuant to Article V hereof.

3.2 Site Access and Control. In order for Company to operate River Bend in accordance with'the operating License and other applicable regulatory requirements, Gulf States, on behalf of itself and Cajun, as their interests may appear, grants company possession and use of the property constituting River Band and agrees to provide company, its agents, employees and contractors unrestricted access to the property constituting River Bend, including, without limitation, the real property and the switchyard, facilities, equipment and personal property located on the River Band site. As required by the Operating License and applicable statutes, and NRC  !

regulations, Gulf States, on behalf of itself and Cajun, 1

ooooom ooo further agrees that company shall have authority to exercise complete control over the Exclusion Area as defined in the Updated Safety Analysis Report for River Bend and to

. determine all activities within the area.

3.3 Suocort Services from Gulf States. Gulf States agrees that it will cooperate with Company in a manner so that company may exercise its authority and fulfill its responsibilities pursuant to this Operating Agreement. In this connection, Gulf States further agrees to provide (1) River Bend switchyard, switching station, and transmission line services and other support in accordance with a separate agreement to be executed by the parties contemporaneously with the execution of this operating Agreement, an executed copy of which is attached hereto as Exhibit A, as such exhibit may be hereafter supplemented or amended, (2) support for the River Bend Emergency Plan and emergency training and drills in accordance with a separate agreement to be executed by the parties contemporaneously with the execution of this operating Agreement, an executed copy of which is attached hereto as Exhibit B, as such exhibit may be hereafter supplemented or amended. Gulf States agrees to provide, subject to their reasonable capability and availability, additional services or assistance required by company and agreed to by Gulf States in writing in connection with the Operation of River Bend, i

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l (1) communications access and hupport, '(2) transportation support, (3) payroll and personnel assistance, . and (4) ' other services as may be required in order to allow company to conduct safe, economic and efficient operations at River-Band.

3.4 No chances to Facilities, Procedures or Practices.

So that Company will be capable of Operating River Bend in accordance with the Operating License and other applicable regulatory requirements, Gulf States, on; behalf of itself and Cajun, agrees that it will not make any changes to facilities, procedures or practices that affect compliance with NRC regulations or commitments, including, but not limited to, physical changes to the electrical ,

transmission or distribution facilities that directly provide an off-site power supply to River Bend without prior consultation with and written consent from company, which consent company shall not unreasonably withhold.

3.5 Off-Site Power Sunniv. Gulf States agrees that it shall provide River Bend with an assured source of off-site power in accordance with procedures to be agreed upon, from time to time, by the parties.

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ARTICLE IV.

OWNERSHIP OF CAPACITY AND ENERG_Y 4.1 Ownershin of Canacity and Enerev.. Gulf States and Cajun, at all times during the term of this Operating Agreement, shall be and remain the owners of, and shall be entitled to all of, the capacity and energy from River Band.

4.2 Determination of Outout.- Net positive output of River Bend shall be the gross generation of River Bend, less station service requirements, and less adjustments for losses experienced. In the event the output is negative (i.e., station service and losses exceed the gross generation), Gulf States ,shall be responsible for providing- '

necessary power at River Bend during such period in accordance with Good Utility Practice and Section 3.5 herein.

ARTICLE V.

PAYMENTt AUDIT AND INSPECTION RIGHTS -

5.1 .Pavnent Oblication. On or before November 1 (or such other dates as may be agreed to by the parties) of each year during the term of this Operating Agreement, (1) Company will submit for Gulf States' review and approval the total annual capital budget for River Bend, the annual operating and capital programs (as used herein the term I

" annual operating and capital programs" shall include l

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,. plan that relate to River Bend, and (2) Company and Gulf States will agree in writing upon maximum amounts to be-paid, within parameters of the then-current Company five-year business plan, by Gulf States for the following budget year pursuant to this Operating Agreement with respect to (1) Costs of Capital Improvements and (ii) Costs of Operation. Gulf States and Companyfrecognize that mutually agreeable adjustments may be made to such maximum amounts to be paid and/or to the previously approved capital budget, -

operating and capital programs or the components of Company's five-year business plan relating to River Bend, from time to time during any budget year, to reflect the impact of Force Majeure, unforeseen circumstances, financial constraints or other events. Without limiting Gulf States'

obligations under Article VI, Gulf States agrees to pay any and all costs of Operation and Costs of Capital Improvements within such maximum amounts to'ba paid and consistent with the previously approved capital budget and operating and capital programs, but Gulf States shall not'be obligated to pay Costs of Operation and Costs of Capital Improvements in excess of the applicable maximum expenditure limitations or which differ materially from the types of expenditures reflected in the capital budget and operating programs I

i,,' pocoosigoon previously approved by Gulf States, except for any such excess or different Costs of Operation and Costs of Capital Improvements that Gulf States agrees to pay. It is further agreed that Company will keep Gulf States timely informed and obtain Gulf States' approval regarding projects which are reasonably anticipated to cause a material change to the components of the then-current Company five-year business plan that relate to River Bend as previously approved by Gulf States.

5.2 Payment and Billing. Subject to Section 5.1 above and in accordance with procedures to be agreed upon in writing by the parties, company hereby agrees to furnish Gulf States, at such times as may be required by Gulf States or by the terms of the JOPOA with respect to Gulf States' duties as Project Manager thereunder, estimates of the Costs of Operation and Costs of Capital Improvements expected to be owed for the next succeeding period. Gulf States shall promptly deposit in the bank account (s) to be established j

pursuant to section 5.3 such funds as shall be adequate to pay Company and third parties on a timely basis with respect to Costs of Capital Improvements and Costs of Operation. In addition, Gulf States will pay for costs incurred under any contracts relating to River Bend with respect to which Company, as agent, has approved and has directed the third party to provide direct billing to Gulf States. Payments of

, como21sooo the Costs of Capital-Improvements and Costs of Operation specified herein shall be made notwithstanding the availability or lack of availability of River Bend to produce power. No payment made pursuant to this operating Agreement shall constitute a waiver of any right of Gulf States, for itself and on behalf of Cajun, to question or contest the correctness of Ccsts of Capital Improvements and Costs of Operation charged hereunder.

5.3 Bank Accounts. The parties agree that one or more special bank accounts may be established and maintained in one or more banks of Gulf States' choice, in a manner that will indicate the custodial nature of the accounts, for the deposit by Gulf State,s and disbursement by Company or Gulf States of Costs of Capital Improvements and Costs of Operation.

5.4 Audit and Adiustments. Company shall maintain books and records to support the costs of Capital Improvements and Costs of operation for such period of time as Gulf States.shall direct. From time to time, Gulf States or Cajun may, and company shall permit, at Gulf States' or Cajun's option and expense as appropriate, in accordance with any applicable Middle South Electric System established auditing policies (excluding any such policy that would limit or preclude the right of Gulf States or Cajun to conduct such audits), conduct or cause to be conducted by

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1. e .cooaris mo others, including regulatory authorities having jurisdiction, audits of the books and records of

Company.

Such. audits.shall be conducted at reasonable mutually agreed ^

upon times, with agreement not being unreasonably withheld.

Further, Company shall make available to Gulf States, for -

the benefit of itself and Cajun, a copy of any audit reports prepared by or at the request of Company concerning its '

books and records relating to the operation of River Bend, and the cost of preparing such audit reports shall be a cost of Operation payable pursuant to this Article V. Company shall file or cause to be filed a copy of any such audit reports with the Securities and Exchange commission within sixty (60) days after the issuance of such audit report.

Company shall credit Gulf States, for the benefit of itself and Cajun, with recoveries, whenever received, from third '

parties and shall charge or credit Gulf States, for itself and Cajun, with any underpayments or overpayments of Costs of Capital Improvements and Costs of operation, as the case may be.

Force Majeure shall not excuse failure by company to credit Gulf States, for itself and Cajun,.with third-r party recoveries or overpayments of Costs of Capital

, Improvenants and Costs of operation owing to Gulf States at '

any time. '

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ARTICLE VI.

LIMITATION OF LIABILITY Release'and Limitation of Liability. To the fullest extent permitted by applicable law, Gulf States and Cajun shall noc be entitled to recover from, and Gulf States, on behalf of itself and Cajun, hereby expressly

, releases, Company, its agents, officers, directors, shareholders or employees (except to the extent Gulf States, for itself and Cajun, shall be entitled to share in insurance recoveries obt'ained by Company hereunder) from or for any damages, claims, causes of action, losses and/or expenses of whatever kind or nature, including, but not limited to, attorneys' fees, that are in any way, directly or indirectly, connected with Company's operation of River Bend or for any damage thereto, whether arising in tort, fraud, contract, strict liability, negligence or any other theory of legal liability or as a result of fines or other penalties imposed by the NRC or other governmental authority, unless such damages, claims, causes of action, '

losses and/or expenses shall have resulted from the Gross Negligence and/or Willful Misconduct of Company. In no event shall company or its agents, officers, directors, shareholders or employees be liable to Gulf States or Cajun for any loss or damage suffered by Gulf States or Cajun in connection with Company's performance under this operating

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pecoanism Agreement.in an amount greater than Gulf States' or Cajun's uninsured loss. .The duty of Company to perform its obligations under this Operating Agreement in accordance o with Good Utility Practice shall be construed'or modified to the extent necessary to give full effect to the provisions ,

of this Article VI.

ARTICLE VII.

INSURANCE 7.1 With respect to River Bend, Company, acting as Gulf States' agent and subject to the direction of Gulf

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5 States, shall provide and maintain or.cause to be provided and maintained, in the name of and on behalf of Gulf States, Cajun, company, and thein respective mortgagees, if ,

. required, as their respective interests may appear, protection through insurance or otherwise covering Company's, Gulf States' 09:. Cajun's obligations to pay damages because of personal injury, death or property damage, including, without limitation, obligations under applicable workers' compensation laws, and protection i through insurance or otherwise covering nuclear property and nuclear liability and other insurance and financial protection in accordance with customary industry practice and as necessary to comply with all applicable laws and-regulations and the provisions of the J0POA and applicable mortgages and credit arrangements of Gulf States and Cajun. )

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Agreement shall be issued, as Gulf States deems appropriata, with Gulf States, Cajun, the Company and their respective mortgagees, if required, named as insureds, as their interests may appear, as appropriate to the particular ,

coverage, and, if obtainable and economically feasible, workers compensation and all bodily injury (including death) and property damage liability coverages shall be issued by-the same insurance carrier (s). ~ Gulf States, after consultation with Company, shall determine the coverage.

limits and deductibles for any insurance policies obtained pursuant to this Agreement. Additionally, all insurance coverages applicable to those obligations surviving termination of this Agreement pursuant to Section 8.3 below, shall also survive said termination to the extent that such obligations so survive and to the extent that such coverages are reasonably available.

7.2 Acting as agent for and subject to the  ;

direction of Gulf States, on behalf of itself and Cajun, Company will establish necessary procedures, cooperate with the insurers and otherwise comply with requirements of the ,

insurers to maintain coverages in effect and to obtain payment of claims recoverable under such insurance applicable to River Bend.

,' pooco m a ARTICLE VIII.

TERM AND TERMINATION 8.1 13I3 This Agreement shall become effective 1993 or upon receipt of all necessary regulatory approvals of this operating Agreement, whichever is later, and, unless sooner terminated as provided herei,nafter, it shall remain in effect, subject to Section 8.2 below, until River Band shall have been retired and decommissioned in accordance with all applicable regulatory and governmental requirements and the parties hereto agree in writing, with agreement not to be unreasonably withheld, that all responsibilities hereunder have been fulfilled.

8.2 Termination. This Operating Agreement may be terminated prior to the expiration of the term as set forth in Section 8.1 above, subject to receipt of any and all necessary regulatory approvals, upon (1) agreement of the parties hereto or (2) either party giving the other party at least three hundred sixty-five (365) days' prior written notice of the intention to effect such termination. In addition, this operating Agreement shall be cancelled to the extent and from the time that performance hereunder may conflict with any rule, regulation or order of the Socurities and Exchange commission adopted before or after the execution hereof. Company agrees that any and all g.

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licenses, permits, records, books, privileges or rights acquired by Company relating to Operation of River Bend shall be assigned or otherwise transferred to Gulf States,-

+ for the benefit of Gulf States and Cajun, upon termination of this operating Agreement.

8.3 Survival. The indemnification, release, and limitation of liability provisions contained in Article VI shall survive termination to the extent they pertain to events giving rise to such indemnification, release and liability that occurred during the term of this operating Agreement. Further, it is agreed that in no event shall this operating Agreement terminate unless all payments -

required to have been ma(e by Gulf States to Company or by Company to Gulf States, for the benefit of itself and Cajun, as the case may be, shall have been made and all necessary regulatory approval for transfer of responsibility for River Bend shall have been obtained.

ARTICLE IX. . ,

INFORMATION PROVIDED TO GULF STATES 9.1 Reoorts to Gulf States. When required by Gulf States, Company shall provide data and/or report to Gulf States to support Costs of Capital Improvements and Costs of operation payable by Gulf States so as to allow Gulf States and Cajun to comply with the JOPOA, any applicable laws and any rules and regulations promulgated by 9

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i regulatory authorities. Company shall also comply with any  ;

other reasonable reporting requirements.

9.2 Site Access. Gulf States, Cajun or their l 1

designees shall have access to River Bend, subject to j Company's obligation to limit such access pursuant to the l Operating License, .the JoPoA or the applicable rules and regulations of the NRC or other regulatory authorities.

ARTICLE X.

j TRANSFERS OF PERSONNEL 10.1 Transfer. Subject to the terms of the Merger l

Agreement, Gulf States employees who are selected by Gulf States and Company as being necessary or appropriate for the operation of River Band will be transferred to the complete and direct control of Company as of the Effective Date of this Operating Agreement and shall remain under such control 4

for the term of this operating Agreement, unless any of their respective employments is terminated for any reason (it being understood that, except as expressly provided herein, this Operating Agreement affords no rights to, or for the benefit of, any such employees, including without limitation, the right to employment for any particular term). Those employees transferred to company shall perform services designated by Company in accordance with Company j rules, regulations, and safety or health procedures, but l Gulf States shall remain ultimately responsible to reimburse  !

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company'for any and all compensation and benefits provided to such employees by company. Transfers, after the initial i transfer, will be carried out'in accordance with the then-current Entergy System policy.

10.2 Banafit Plans. With respect to any Gulf States employees transferred as provided in Section~10.1' above, the company agrees that it will honor the provisions of Section 6.9 of the Merger Agreement.

ARTICLE XI.

HIECELLANEOUS 11.1 confidentiality. Either party may, from time to time, come into possession of information~of the other party that is confidential or proprietary (including, without limitation, Safeguards Information as defined in 10 C.F.R. Part 73). Each party having any such information which the other party has advised it is confidential or proprietary will not reproduce, copy, or disclose (except ,

upon prompt and prior notification'to the other party of the event precipitating such disclosure and upon agreement of the parties that such disclosure is required by law) any such information in whole or in part for any purpose without the prior written consent of the other party. Safeguards Information relative to River Bend shall be controlled and protected in accordance with 10 C.F.R. 73.21.

I

A smonaris ses 11.2 Restricted Data. Company and Gulf States, on behalf of itself and' Cajun, agree that, unless otherwise required-by law, they will not permit any person to have access to Restricted Data, as defined in 42 U.S.C. 52014.y, until the federal office of Personnel Management shall have made an investigation and report to the NRC on the character, associations and loyalty of such person and the NRC shall have determined that permitting such person to have access to Restricted Data will not endanger the common defense and security.

11.3 Assianment and successors. This operating Agreement shall not be assignable by a party hereto without the prior written consent of the other party and without first obtaining all necessary regulatory approval, and any attempted assignment without such consent and approval shall be void. Subject to the preceding sentence, this operating Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns.

11.4 Governina Law. The validity, interpretation and performance of this operating Agreement and-each of its provisions shall be governed by the laws of the State of Louisiana.

11.5 No Delav in Pavnents. No disagreement or dispute of any kind between the parties concerning any I

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matter, including, without limitation, the amount of any payment due from Gulf States to Company or from Company to Gulf States, as the case may be, or the correctness of any <

charge made to Gulf States or Company, or any reason, excuse or'cire stance, including Force Majeure, shall permit either party.to delay or withhold payment due and owing under this Operatird Agreement, except that Gulf States .

shall have the right to make any payments required of it under protest and to reserve its rights to conduct audits in accordance with Section 5.4.

11.6 Notices. Any notice, request, consent CHE other communication permitted or requirad by this operating Agreement shall be in writing and shall be deemed.to have  ;

, been given when deposited in the United States mail, first class, postage pre-paid and, until written notice of a new l address is given, shall be addressed as follows:

If to Company: l Entergy Operations, Inc.

Echelon One l 1340 Echelon Parkway Jackson, Mississippi .39213 Attention: President If to Gulf States:

Gulf States Utilities Company 350 Pine Street Beaumont, Texas 77701 Attention: President 11.7 Amendments. This operating Agreement may be amended only by a written instrument duly executed and l

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delivered by the parties hereto and with any and all i

necessary regulatory approvals previously obtained. ,

11.8 Relationshin. -Nothing herein shall be construed to create a partnership or joint venture among or a

between company, Gulf States and Cajun, or any two of them, or to impose a trust, fiduciary or partnership duty, obligation or liability upon company, Gulf States or Cajun, or to create any agency relationship except as expressly i granted herein.

11.9 countercarts. This Operating Agreement may be executed simultaneously in two or more counterparts, each '

of which shall be deemed an original, but all of which together shall constitute,one and the same instrument.

11.10 Force'Maieure. Company shall not be in I default in performance of its obligations or duties hereunder (other than any obligation to credit Gulf States, for itself and on behalf of cajun, with its recoveries or overpayments of Costs of Operation owing at any time) if such failure of performance is due to Force Majeure. Gulf states shall not be in default in performance of any duties or obligations hereunder (other than any obligation to pay monies to or at the direction of company as provided in this operating Agreement) if such failure of performance is due to Force Majeure.  !

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,oonam e. l 11.11 Good Utility Practice. The parties hereto shall discharge any and all obligations under this Operating . l Agreement in accordance with Good Utility Practice.

11.12 JOPOA. Gulf States enters into this Operating Agreement as Project Manager and as agent for. '

Cajun under the JOPOA pursuant to its powers and authorities under the JOPOA. This Operating Agreement is not intended as an amendment of the JOPOA and is subject to the rights of the parties thereunder and to the terms and provisions  :

thereof. No rights or obligations under the JOPOA have been j transferred to or assumed by Company.

11.13 Entire Aureement. This Operating Agreement, including Exhibits A and B, shall constitute the entire understanding and agreement between the parties superseding any and all previous understandings and agreements between the parties with respect-to the subject matter hereof.

IN WITNESS WHEREOF, the parties have executed this Operating Agreement by their duly authorized representatives.

ENTERGY OPERATIONS, INC. GULF STATES UTILITIES COMPANY, for itself and as agent for. Cajun i

Electric Power Cooperative, Inc.

BY: BY b f4. M '

i TITLE: If L4 M (G[b% M.dh TITLE: fruMS-DATE:

• I' DATE: 3 ""^ #

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.. J EXHIBIT A l l

1 i

SWITCHYARD AND TRANSMISSION INTERFACE AGREEMENT I This Agreement is executed by and between_ Gulf States Utilities Company (" Gulf States") and Entergy Operations, Inc. ,

(" Company"), and is dated'as of , 1993. l WHEREAS, this Agreement is being' executed pursuant to Paragraph 3,3 of the Operating Agreement between Gulf States and Company dated as of , 1993 (the " Operating Agreement") relating to operation by Company of the River Bend Station (" River-Bend"); and  !

WHEREAS, in connection with amending the River Bend Operating License, issued by the Nuclear Regulatory Commission,  !

to substitute Company fon Gulf States with respect to the ,

operation of River Bend, as contemplated by the Operating Agreement, it is necessary and desirable for Gulf States to commit to Company to support River Bend with respect to certain activities, particularly those relating to the River Band .i switchyard and transmission equipment; and I

WHEREAS, the parties desire to set forth in this Agreement their respective commitments and responsibilities regarding the Fancy Point Substation (" Switchyard") and  ;

transmission facilities relating to River Bend and the River Bend Exclusion Area.

NOW, THEREFORE, effective upon and following the Effective Date as defined in the Operating Agreement, Gulf States and company undertake and agree as follows:

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A. EXCLUSION AREA CONTROL. SWITCHYARD ACCESS AND SECURITY l

1. To comply with the River Band Emergency Plan and other

, applicable requirements and to carry.out its responsibilities under the operating Agreement, Gulf states agrees to provide Company unrestricted access to the real property owned by Gulf States or Gulf States and '

Cajun Electric Power Cooperative, Inc. (" Cajun") at the River Bend site and to the Switchyard, facilities, equipment and personal property located on that property. '

2. As necessary to comply with federal regulations, company shall have authority to exercise complete control over property and easemen,ts in the Switchyard and the Exclusion Area, as defined in the River Band Updated Safety Analysis '

Report.("USAR*), and to determine all activities within i that area, including exclusion from the Switchyard and the Exclusion Area-of Gulf States personnel, Cajun personnel,.

contractors, visitors, guests and other persons. To the extent practicable, company will exercise this control in such a fashion that normal use and access to the plant and the switchyard will not be restricted.

3. For the purpose of providing industrial security, company shall have authority to exercise comp.iete control over the switchyard and other Gulf States and Cajun property in the vicinity of the Switchyard. This authority includes the f

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l' s 1 pannrrtStg11 authority to conduct interactions with law enforcement agencies which are deemed necessary by company and the authority to file associated civil or criminal complaints

.. against third parties as deemed necessary by Company. The parties will cooperate in good faith as jointly determined appropriate to support prosecution of any such complaints.

4. The parties shall maintain Switchyard perimeter fence gates in a locked condition except when attended or to allow ingress or egress.

5. Company will make a regular routine industrial security patrol of the Switchyard.

6. Company will notify Gulf States, in a reasonable time period, of problems , requiring maintenance, repair or replacement of the Switchyard perimeter fence, gates, locks, lights or other security related devices or equipment or of other conditions which may affect security.

7. Gulf States will provide such maintenance, or effect repair or- replacement, or correct the condition, in a reasonable time period.

8. Company will provide appropriate industrial security measures for the Switchyard, including potential situations caused by needed maintenance, repair or replacement of security devices or equipment.

. _. - -- . . . - .-. . .~ . --

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9. Key control for the Switchyard gates will'ba maintained as follows:

a. Only operations Department and Station Security-personnel will have control over the key to the Switchyard gate.

b. Only the Operations Shift Supervisor or Control Operating Foreman can authorize access to the Switchyard.

4

c. Keys will be issued only to personnel with an identified need for Switchyard access.

10. Authorized personnel entering the Switchyard for the i

performance of duties or activities which could have any j direct effect on the, power' supply to River Bend, including routine maintenance of Switchyard equipment, will advise i

the on-duty Company Operations Shift Supervisor or Control Operating Foreman of the need for entry, the purpose of- j entry,'and anticipated duration of stay.

11. Gulf States will not exercise its right to explore or recover minerals in any area within the Exclusion Area or convey or lease its mineral rights within the Exclusion Area to any third party without: Company approval.

Further, Gulf States will cooperate with Company as necessary to assist in control of mineral exploration or recovery activities in the Exclusion Area.

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B. OPERATIONS  ;

1. Company will make regular rounds of the Switchyard and -

carry out the following activities:

a. make observations of equipment and facilities,

b. obtain readings of appropriate equipment parameters,

c. conduct other routine activities at the request of Gulf States,

d. provide Gulf States with appropriate reports as to  ;

i findings during these activities.

2. The parties will operate equipment located in the Switchyard as follows:

Company will be,the exclusive operator of the main a.

generator output breakers and the preferred offsite j power supply breakers, except for maintenance activities as designated in B.3. Company will r

coordinate the operation of these breakers with Gulf States, except in emergency situations. .

b. Gulf. States will normally operate (or provide for the j operation of) all 500KV and 230KV Switchyard breakers and associated equipment other than the main 4

generator output breakers, remotely or locally, but authorized company personnel will operate any such breakers or other equipment locally in the Switchyard at Gulf States' request.

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Company will normally be informed in advance of the operation of all Switchyard breakers and disconnects to remove equipment from service.

d.

Company will provide other operating support for the Switchyard at the request of Gulf States.

3.

Gulf States will operate Switchyard equipment as necessary .

for maintenance to be performed in accordance with Section c below and may return equipment to service upon completion of maintenance.

C. -MAINTENANCE 1.

Gulf States will have maintenance responsibility (including necessary repair or replacement) for the River Bend preferred and normal transformers and Main Output i

transformers.

2.

Gulf States will maintain (including necessary repair or replacement) all other equipment located in the

! j Switchyard, including, but not limited to:

a.

i 500KV breakers and transformers and related equipment;

b. >

230KV breakers and transformers and related equipment t

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3. Gulf States will'be responsible for procuring, filling, '

analyzing and replacing transformer oil.- Analysis results will be provided to company'upon request.

, 4. Maintaining an appropriate inventory of spare parts for equipment located in the Switchyard will be the responsibility of the party that is responsible for maintaining the equipment as specified in this.Section.

D. COORDINATION

1. Company will coordinate planned plant outages'and planned load reductions with Gulf States. The Gulf States, Cajun and Middle South sys, tem dispatchers will be informed.

2

2. Gulf States will coordinate all activities which will i directly affect power supply to River Bend with Company.

At a minimum, the Operations Shift Supervisor or Control Operating Foreman will be informed by the system dispatcher or Gulf States dispatcher or maintenance crew during the planning of these activities.- Activities which cannot be planned in advance and the detailed conduct of l planned activities will be coordinated with the Operations Shift Supervisor. These activities include, but are not j l

limited to:

a. removal from service of any transmission line terminating in the Switchyard; 4

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b. breaker switching which can affect power supply to River Bend (i.e., switching of lines identified in Item (a) above);  ;

c. maintenance activities which can affect power supply to River. Bend.

E. REVIEW AND APPROVAL

1. Gulf States will obtain company review and approval of procedure changes, design changes, tests or changes in the conduct of other activities which might affect compliance with regulatory requirements, the USAR and/or commitments <

involving the Switch, yard and associated transmission lines and equipment which could affect off-site power supply to River Bend prior to implementing such changes or  !

commencing such tests.

2. Company will review these proposed changes and tests in accordance with applicable commitments and regulatory requirements and will obtain prior NRC approval if required.

F. PROCEDURES Gulf States agrees to provide River Band with an assured l

source of off-site power in accordance with procedures to l

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eman m be agreed upon, from time.to time, by the parties. Gulf States recognizes that it must respond to the critical need to provide power to River Band in an emergency and will ensure that procedures are promulgated to make its operating and maintenance personnel aware of such need.

In this regard, Company and Gulf States will develop and implement appropriate procedures to (1) define the power transmission interface between Gulf States and Company, (2) delineate the responsibilities for the operation, maintenance, testing and security of the equipment which comprises that interface (as specified in this Agreement) and (3) define Gulf States' responsibilities pursuant to federal regulations.for providing power to River Band.

G. TRAINING

1. Company will provide regular training (on a schedule jointly agreed to by Gulf States and Company) to Gulf States dispatcher personnel to explain the critical need for power at River Bend during emergencies, the legal requirements associated with River Band power supply and associated procedures.

2. Gulf States will make appropriate dispatcher personnel available to receive training on a schedule jointly agreed to by Gulf States and Company.

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,..s-H. COMPENSATION Costs incurred by Company pursuant to this Agreement shall be considered Costs of Operation as defined in the-Operating Agreement, and services performed by Gulf States hereunder sha 1 be without cost or charge to company.

I. GENERAL This Agreement is intended to supplement the Operating Agreement.

Modifications or amendments to this Agreement must be executed by an authorized officer of-each party.

Prior to execution of any such modification or amendment to this Agreement, Company will review the proposed change to assure that it is in compliance with its licensing commitments and regulatory requirements applicable to River Band.

If regulatory approval is needed, Company will obtain that approval prior to execution of the modification or amendment. This-Agreement and the operating Agreement are intended to be complementary, and in the event of any inconsistencies between the two documents, the Operating Agreement shall govern.

A

4. pocoo 23 dis J. GOVERNING LAW This Agreement shall be governed by, and construed in >

accordance with, the laws of the State of Louisiana.

IN WITNESS WHEREOF, the parties have executed this Agreement.

ENTERGY OPERATIONS, INC. GULF STATES UTILITIES COMPANY By: _

By:

4' .

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. EXHIBIT B l l

SUPPORT AGREEMENT l

This Agreement is made and enterec into as of

, 1993 between Entergy Operations, Inc. (" Company") l e a and Gulf States Utilities Company (" Gulf States"). This l Agreement is being executed pursuant to the operating  ;

Agreement, dated as of , 1993, between Company and ]

l Gulf States (the " Operating Agreement"), Article 3, Paragraph 3.3. l ARTICLE I EMERGENCY PLANNING EOUIPMENT AND FACILITIES 1.1 ACCESS. Paragraph 3.2 of the Operating Agreement grants t

Company unrestricted access to equipment and facilities located on the River Bend site, including, without limitation, equipment and facilities relied on to execute the River Band Emergency Plan. In addition, in order for Company to operate River Band in accordance with the operating License and other applicable regulatory requirements, Gulf States agrees to provide Company, its agents, employees and contractors unrestricted access upon request, to specific additional equipment and facilities located off the River Bend site including, '

without limitation, access for emergency training exercises, emergency drills and, on a first priority basis for an actual emergency. l 1.2 INVENTORY. An inventory of the specific off-site equipment and facilities for which company will be 4

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s pococate.dt1 provided the access specified in Paragraph 1.1 above, shall.be' maintained by the Division Manager in the Baton Rouge Division and may'be revised as necessary to reflect changes in the needs of tra River Bend Emergency Plan or changes in the availability of the equipment and facilities. Such revisions shall only be made with the written concurrence of designated Gulf States and Company representatives.

ARTICLE II GULF STATES PERSONNEL SUPPORTING THE RIVER BEND EMERGENCY PLAN 2.1 PERSONNEL' SUPPORT. Gulf States will provide personnel to support the River Bend Emergency Plan, including, without limitation, appropri' ate personnel to staff the Joint Information Center and the Alternate EOF. These personnel shall be provided by Gulf States upon request by Company to support emergency training exercises and emergency drills and on a first priority basis for an actual emergency.

2.2 PERSONNEI[ ROSTER. A roster of the specific Gulf States personnel that will provide the support described in Paragraph 2.1 above, shall be maintained by the River Bend Emergency Plan Organization, and may be revised as 1

necessary to reflect changes in the needs of the River Bend Emergency Plan or changes in the availability of personnel. Such revisions shall only be made with the

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written concurrence of designated Gulf States and Company representatives.

ARTICLE III GENERAL SUPPORT In accordance with Section 3.3 of the Operating Agreement, Gulf States agrees to provide personnel, supplies and services, subject to their reasonable availability, as required by Company in order to allow company to conduct safe, economic and efficient operations at River Bend and to otherwise carry out its responsibilities under the Operating Agreement.

Such services and assistance will be provided as requested by Company and agreed to in writing by Gulf States and will include, without limitation, services relating to engineering, communications, transportation, accounting, payroll and personnel assistance, environmental, and land management of the site and surrounding property.

ARTICLE IV TERMS AND CONDITIONS 4.1 COMPENSATION. Costs incurred by Company pursuant to this Agreement shall be considered Costs of Cperation as defined in the operating Agreement, and services performed by Gulf States hereunder shall be without cost or charge to Company.

4.2 GENERAL. This Agreement is intended to supplement the operating Agreement.

Modifications or amendments to this

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4.

Agreement must be executed by an authorized officer of each party. Prior to execution of any such modification or amendment to this Agreement, company will review the proposed change to assure that it is in compliance with j l

its licensing commitments and regulatory requirements applicable to River Bend. If regulatory approval is needed, company will obtain that approval prior to execution of the modification or amendment. This Agreement and the Operating Agreement are intended to be complementary, and in the event of any inconsistencies between the two documents, the Operating Agreement shall govern.

4.3 GOVERNING LAW.

This Agreement shall be governed by, and construed in accordance with, the laws of the Stats of Louisiana.

ENTERGY OPERATIONS, INC.

GULF STATES UTILITIES COMPANY By:

By:

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• , EXHIBIT A A

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- SWITCHYARD AND TRANSMISSION INTERFACE AGREEMENT This Agreement is executed.by and.between Gulf-States Utilities Company (" Gulf States") and Entergy Operations, Inc.

(" Company"), and'is dated as of D'""b' 3! , 1993.

WHEREAS, this Agreement is being executed pursuant to Paragraph 3.3 of the Operating Agreement between Gulf States and Company dated as of N"""'N'2!,1993 (the " Operating Agreement") relating to operation by company of the River. Band.

' Station (" River Bend"); and 4

WHEREAS, in connection with amending the River Band operating License, issued by the Nuclear Regulatory Commission, to-substitute company for Gulf States with respect to the n operation of River Bend, as contemplated by the Operating a Agreement, it is necessary and desirable for Gulf States to

• commit to Company to support River Bend with respect to certain e activities, particularly those relating to the River Bend switchyard and transmission equipment; and WHEREAS, the parties desire to set forth in this Agreement their respective commitments and responsibilities .d regarding the Fancy Point Substation (" Switchyard") and transmission facilities relating to River Bend and the River

• Bend Exclusion Area.

He .

NOW, THEREFORE, effective upon and.following the un Effective Date as defined in the Operating Agreement, Gulf States and Company undertake and agree as follows:

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A. EXCLUSION AREA CONTROL. SWITCHYARD ACCESS AND SECURITY-1.- To comply with the River Bend Emergency Plan and other applicable requirements and to carry out its +

responsibilities under the operating Agreement, Gulf States agrees to' provide Company unrestricted access to the real property owned by Gulf States or Gulf States and Cajun Electric Power Cooperative, Inc.'(" Cajun") at'the River Band site and to the Switchyard, facilities, equipment and personal property located on that property.

2. As necessary to comply with federal regulations, Company shall have authority to exercise complete control over property and easements in the Switchyard and the Exclusion Area, as defined in' the River Bend Updated Safety Analysis Report ("USAR"), and to determine all activities within that area, including exclusion from the Switchyard and-the Exclusion Area of Gulf States personnel, Cajun personnel, contractors, visitors, guests and other persons. To the extent practicable, Company will exercise this control in such a fashion that normal use and access to the plant and the switchyard will not be restricted.

3. For the purpose of providing industrial security, Company shall have authority to exercise complete control over the Switchyard and other Gulf States and Cajun property in the vicinity of the Switchyard. This authority includes the 1

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I smenun authority to conduct interactions with law enforcement agencies which are deemed necessary by Company and the authority to file associated' civil or criminal complaints

, against third parties as deemed necessary by company. The parties will cooperate in good faith as jointly determined appropriate to support prosecution of any such complaints.

4. The parties shall maintain Switchyard perimeter fence gates in a locked condition except when attended or to allow ingress or egress.

5. Company will make a regular routine industrial security patrol of the Switchyard.

6. Company will notify Gulf States, in a reasonable time period, of problems requiring maintenance, repair or replacement of the Switchyard perimeter fence, gates, locks, lights or other security related devices or equipment or of other conditions which may affecta security.

7. Culf States will provide such maintenance, or effect repair or replacement, or correct the condition, in a reasonable time period.

8. Company will provide appropriate industrial security measures for the Switchyard, including potential situations caused by needed maintenance, repair or replacement of security devices or equipment.

1 i

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9. Key control for the Switchyard gates will be maintained as follows:

a. Only operations Department and Station Security

, personnel will have control over the key to the Switchyard gate.

b. Only the operations Shift Supervisor or control operating Foreman can authorize access to the Switchyard.

c. Keys will be issued only to personnel with an identified need for Switchyard access.

10. Authorized personnel entering the Switchyard for the performance of duties or activities which could have any direct effect on the power supply to River Bend, including routine maintenance of Switchyard equipment, will advise the on-duty company operations Shift Supervisor or control operating Foreman of the need for entry, the purpose of entry, and anticipated duration of stay.

11. Gulf States will not exercise its right to explore or recover minerals in any area within the Exclusion Area or convey or lease its mineral rights within the Exclusion Area to any third party without Company approval.

Further, Gulf States will cooperate with company as necessary to assist in control of mineral exploration or recovery activities in the Exclusion Area.

-4

scooom oti B. OPERATIONS

1. Company will make regular rounds of the Switchyard and carry out the following activities:

a. make observations of equipment and facilities,

b. obtain readings of appropriate equipment parameters,

c. conduct other routine activities at the request of Gulf States,

d. provide Gulf States with appropriate reports as to findings during these activities.

2. The partles will operate equipment located in the Switchyard as follows:

a. Company will be the exclusive operator of the main generator output breakers and the preferred offsite power supply breakers, except for maintenance activities as designated in B.3. company will coordinate the operation of these breakers with Gulf States, except in emergency situations.

b. Gulf states will normally operate (or provide for the operation of) all 500KV and 230KV Switchyard breakers and associated equipment other than the main generator output breakers, remotely or locally, but authorized company personnel will operate any such breakers or other equipment locally in the Switchyard at Gulf States' re quest.

p00Cc223 dit

c. Company will normally be informed in advance of the operation of all Switchyard breakers and disconnects to remove equipment from service.

d. Company will provide other operating support for the Switchyard at the request of Gulf States.

3. Gulf States will operate Switchyard equipment as necessary for maintenance to be performed in accordance with Section C below and may return equipment to service upon completion of maintenance.

C. MAINTENANCE

1. Gulf States will have maintenance responsibility (including necessary repair or replacement) for the River Bend preferred and normal transformers and Main Output transformers.

2. Gulf States will maintain (including necessary repair or replacement) all other equipment located in the Switchyard, including, but not limited to:

a. 500KV breakers and transformers and related equipment;

b. 230KV breakers and transformers and related equipment pococ m m

3. Culf States will be . responsible for procuring, filling, analyzing and replacing transformer oil. Analysis results will be provided to company upon request.

• 4. Maintaining an appropriate inventory of spara parts for equipment located in the Switchyard will be the responsibility of the party that is responsible for maintaining the equipment as specified in this Section.

D. COORDINATION

1. Company will coordinate planned plant outages and planned load reductions with Gulf States. The Gulf States, Cajun and Middle South system dispatchers will be informed.

2. Gulf States will coordinate all activities which will directly affect power supply to River Bend with Company.

At a minimum, the operations Shift Supervisor or control operating Foreman will be informed by the system dispatcher or Gulf States dispatcher or maintenance crew during the planning of these activities. Activities which cannot be planned in advance and the detailed conduct of planned activities will be coordinated with the operations Shift Supervisor. These activities include, but are not limited to:

a. removal from service of any transmission line terminating in the Switchyard; l

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b. breaker switching which can affect power supply to River Bend (i.e., switching of lines identified in Item (a) above);

c. maintenance activities which can affect power supply to River Bend.

E. REVIEW AND APPROVAL

1. Culf States will obtain Company review and approval of procedure changes, design changes, tests or changes in the conduct of other activities which might affect compliance with regulatory requirements, the USAR and/or commitments involving the switchyard and associated transmission lines and equipment which could affect off-site power supply to River Bend prior to implementing such changes or commencing such tests.

2. Company will review these proposed changes and tests in accordance with applicable commitments and regulatory requirements and will obtain prior NRC appreval if required.

F. PROCEDURES Gulf States agrees to provide River Bend with an assured source of off-site power in accordance with procedures to I

I

be agreed upon, from time to time, by the parties. Gulf States recognizes that it must respond to the critical l

need to provide power to River Bend in an emergency and will ensure that procedures are promulgated to make its operating and maintenance personnel aware of such need. I 1

In this regard, Company and Gulf States will develop and implement appropriate procedures to (1) define the power transmission interface between Gulf States and Company, (2) delineate the responsibilities for the operation,  ;

1 maintenance, testing and security of the equipment which comprises that interface (as specified in this Agreement) and (3) define Gulf States' responsibilities pursuant to federal regulations for providing power to River Bend.

G. TRAINING

1. Company will provide regular training (on a schedule jointly agreed to by Gulf States and Company) to Gulf States dispatcher personnel to explain the critical need for power at River Band during emergencies,. the legal j requirements associated with River Bend power supply and l associated procedures.

2. Gulf States will make appropriate dispatcher personnel

! available to receive training on a schedul's jointly agreed

! to by Gulf States and Company.

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H. COMPENSATION Costs incurred by company pursuant to this Agreement shall be considered Costs of Operation as defined in the operating Agreement, and services performed by Gulf States hereunder shall be without cost or charge to Company.

I. GENERAL This Agreement is intended to supplement the operating Agreement. Modifications or amendments to this Agreement must be executed by an authorized officer of each party. ,

Prior to execution of any such modification or amendment to this Agreement, Company will review the proposed change to assure that it is in compliance with its licensing commitments and regulatory requirements applicable to River Band. If regulatory approval is needed, Company will obtain that approval prior to execution of the modification or amendment. This Agreement and the operating Agreement are intendtd to be complementary, and in the event of any inconsistencies between the two documents, the operating Agreement shall govern.

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J. GOVERNING LAW This Agreement shall be governed by, and construed in accordance with, the laws of the State of Louisiana.

IN WITNESS WHEREOF, the parties have executed this Agreement.

ENTERGY OPERATIONS, INC. GULF STATES UTILITIES COMPANY By: ByJ E y l l

N DGIBIT B SUPPORT AGREEMENT This Agreement is made and entered into as of

, 1993 between Entergy Operations, Inc. (" Company")

and Gulf States Utilities Company (" Gulf States"). This Agreement is being executed pursuant to the Operating Agreement, dated as of Deu-be 31, 1993, between Company and Gulf States (the " Operating Agreement") , Article 3, Paragraph 3.3.

ARTICLE I EMERGENCY PLANNING EOUIPMENT AND FACILITIEE 1.1 ACCESS. Paragraph J,2 of the Operating Agreement grants Company unrestricted access to equipment and facilities located on the River Bend site, including, without limitation, equipment and facilities relied on to execute the River Bend Emergency Plan. In addition, in order for Company to operate River Bend in accordance with the Operating License and other applicable regulatory requirements, Gulf States agrees to provide Company, its l l

agents, employees and contractors unrestricted access upon request, to specific additional equipment and facilities located off the River Bend site including, without limitation, access for emergency training l exercises, emergency drills and, on a first priority basis for an actual emergency.

1.2 INVENTORY. An inventory of the specific off-site equipment and facili .ies for which company will .'r.

I

p0000220 dii provided the access specified in Paragraph 1.1 above, shall be maintained by the Division Manager in the Baton Rouge Division and may be revised as necessary to reflect

. changes in the needs of the River Band Emergency Plan or changes in the availability of the equipment and facilities. Such revisions shall only be made with the written concurrence of designated Gulf States and Company representatives.

ARTICLE II GULF STATES PERSONNEL SUPPORTING THE RIVER BEND EMERGENCY PLAN 2.1 PERSONNEL SUPPORT. Gulf States will provide personnel to support the River Bend Emergency Plan, including, without limitation, appropriate personnel to staff the Joint Information Center and the Alternate EOF. These personnel shall be provided by Gulf States upon request by Company to support emergency training exercises and emergency drills and on a first priority basis for an actual emergency.

2.2 PERSONNEL ROSTER. A roster of the specific Gulf States personnel that will provide the support described in Paragraph 2.1 above, shall be maintained by the River Bend Emergency Plan Organization, and may be revised as necessary to reflect changes in the needs of the River Bend Emergency Plan or changes in the availability of personnel. Such revisions shall only be made with the p000022Sdi1 l

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written concurrence of designated Gulf States and Company representativas.

ARTICLE III l

. GENERAL SUPPORT In accordance with Section 3.3 of the Operating Agreement, Gulf States agrees to provide personnel, supplies and services, subject to their reasonable availability, as required by Company in order to allow Company to conduct safe, economic and efficient operations at River Bend and to otherwise carry out its responsibilities under the Operating Agreement. Such services and assistance will be provided as requested by Company and agreed to in writing by Gulf States and will include, without limitation, services relating to engineering, communications, transportation, accounting, payroll and personnel assistance, environmental, and land management of the site and surrounding property.

ARTICLE IV TERMS AND CONDITIOlg 4.1 COMPENSATION. Costs incurred by Company pursuant to this Agreement shall be considered Costs of Operation as i defined in the Operating Agreement, and services performed by Gulf States hereunder shall be without cost or charge to company.

4.2 GENERAL. This Agreement is intended to supplement the Operating Agreement. Modifications or amendments to this Agreement must be executed by an authorized officer of each party. Prior to execution of any such modification or amendment to this Agreement, Company will review the proposed change to assure that it is in compliance with its licensing commitments and regulatory requirements applicable to River Band. If regulatory approval is needed, company will obtain that approval prior to execution of the modification or amendment. This Agreement and the Operating Agreement are intended to be complementary, and in the event of any inconsistencies between the two documents, the Operating Agreement shall govern.

4.3 GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Louisiana.

ENTERGY O ERATIONS, INC. GULF STATES UTILITIES COMPANY By:

By.

. k.

RIVER BEND STATION GE&BANTEE AGREEMENT This Guarantee Agreement is made and entered into as of a , 1993, by and between Entergy Corporation

("Entergy") and Gulf States Utilities Company (" Gulf States"). Entergy Operations, Inc. ("Entergy Operations")

appears herein for the purpose of acknowledging and accepting this Agreeaent between Entergy and Gulf States.

WHEREAS, Entergy is a public utility holding company registered pursuant to the Public Utility Holding Company Act of 1935; and WHEREAS, Gulf States and Entergy Operations are wholly-owned subsidiaries of Entergy; and WHEREAS, Gulf States is an electric public utility that manufacturers, generates, transmits and distributes electricity across southern Louisiana and southeastern l Texas, and owns a 70% undivided ownership interest in a nuclear fueled, steam electric generating station located near St. Francisville, Louisiana, known as the River Bend Station (" River Bend"); and WHEREAS, Entergy Operations is a nuclear operating company that operates, on behalf of their owners, the 1

Entergy System's nuclear units; and WHEREAS, Gulf States and Entergy Operations have entered into an Operating Agreement whereby Entergy Operations has undertaken the operating responsibility --

but not ownership -- of River Bend, such Operating Agreement

P024203 P29 being a principal consideration and condition precedent to the obligations undertaken herein by Entergy; and WHEREAS, Entergy Operations possesses, uses and operates River Bend as Gulf States' agent; and WHEREAS, Entergy has guaranteed, pursuant to guarantee agreements substantially identical to this Guarantee Agreement, Entergy Operations' financial ability to perform its obligations relating to the Entergy System's other nuclear units, so long as the owners of those facilities meet their payment obligations to Entergy Operations; and WHEREAS, Entergy expects Gulf States and the Entergy System to derive benefits and advantages from Gulf States' entering into said Operating Agreement; NOW, THEREFORE, for and in consideration of the mutual covenants and obligations set forth herein and in the aforesaid Operating Agreement, the parties hereto agree as follows:

1. Entergy guarantees and agrees to be responsible for the financial ability of Entergy Operations to perform its obligations to Gulf States pursuant to said Operating Agreement, so long as Gulf States meets its payment obligations to Entergy Operations under the Operating Agreement, and Entergy agrees to guarantee Entergy Operations' ability otherwise to meet its financial

/

l mam m 1

obligations incurred on behalf of Gulf States '

1 under the operating Agreement, so long as Gulf I States meets its payment obligations to Entergy  !

Operations under the operating Agreement, l

2. This Guarantee Agreement shall continue only for so long as Gulf States continues to meet its payment obligations to Entergy operations as those obligations are set forth in said operating l

Agreement.

1

3. In no event shall Entergy's obligation under this 1 Guarantee Agreement apply or extend to any l

liability for personal injury (including death) or l property damage, indemnity or similar obligation 1

arising out of or otherwise related to Entergy j operations' operation of River Bend.

4. This Guarantee Agreement shall not be assignable by any party hereto without the prior written I consent of the other parties hereto. Any 1

attempted assignment without such consent shall be I void. Subject to the foregoing, this Guarantee Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. I I

P024203 P29

5. The validity, interpretation and performance of this Guarantee Agreement shall be governed by the laws of the State of Louisiana.

6. This Guarantee Agreement is a continuing guaranty, limited in the manner set forth hereinabove.

Now comes Entergy Operations, which, as the beneficiary of the foregoing guarantee, appears and intervenes herein for the purpose of acknowledging and accepting the terms and conditions hereof.

IN WITNESS WHEREOF, the parties have executed this Guarantee Agreement by their duly authotized, undersigned representatives.

ENTERGY CORPORATION By:  %~

Title:

c *d t >uel/o h '

Date: 3e 35 411J GULF STATES UTILITIES COMPANY By: \! M

Title:

'frdh '

Date: 3t u br Jn,4911 ENTERGY OPERATIONS, INC.

I By:

Title:

f'roiM l Date: h6W 34,tif3 i

1

W

~- - _

00 ^P.'l iD p~g; TS JAN 17 P3 M6 In the Matter of DOCX;( ~

) v I GULF STATES UTILITIES ANY ) COMP

)

\ (River Bend Station, Unit )

Docket No. 50-458-OLA

\ 1) Re:

)

\

) License Amendment (Transfer Control) of ownership and CIBIIIICATI_01._EFJLVlGE Company's Statement n of UI hereby es certify that copi for Summary Motion for SummarDisposition and "

" disputed Facts iof " Gulf States Gulf Utili first class mail, y Dispo,sition" were States Utilitiesn Support of Its Motion postage pre paid, this 9th dserved on the followingCompa ay of January, 1995:, by B. Paul C Chairman, otter, Jr. , Esq. **

and Licensing BoardAtomic Safety Docketing U.S. Nuclear Regulatory Branch and Services Commission Washington, D.C. U.S. Nuclear Regulatory Commission

• 20555 Washington, D.C.

Dr. Richard F. Cole

• 20555 Atomic Board Safety and Licensi ng Marian L. Zobler U.S. Ann P. Hodgdon

( Mitzi A Esq.

\ CommissionNuclear Regulatory Office o. Young,, Esq.

Washington, D.C. U.S.

\

\* 20555 Nuclear Regulatoryf the General Cou Commission 1

Dr. Peter S. Lam Washington, D.C.

k 20555 1

Atomic Board Safety and Licensi ng James D I

U.S. Nuclear Regulatory Thomas . Pembroke Esq.

Commission Duncan, L. Rudebusc,h

( Washington, D.C. PembrokeWeinberg, Miller &

20555 P.C.

1615 M Stre,et, N.W.

Suite 800 Washington, D.C.

>* Fand Delivery 20036 Document on diskette tr ansmitted with package.

Victor J. Elmer Robert B. McGehee, Esq.

Vice President - Operations Wise Carter Child & Caraway Cajun Electric Power 600 Heritage Building Cooperative, Inc. P. O. Box 651 10719 Airline Highway Jackson, Mississippi 39205 Baton Rouge, LA 70895 Office of the Executive Director for Operations U.S. Nuclear Regulatory Commission Washington, D.C. 20555 l

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~

Mark J(ffett6rh'ahn Winston & Strawn Counsel for Gulf States Utilities Company l

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