ML20138P323

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Forwards Chart of Util Mgt Organization for Facility After Pending Affiliation Between Cleveland Electric Illuminating Co & Toledo Edison Co
ML20138P323
Person / Time
Site: Perry  FirstEnergy icon.png
Issue date: 12/20/1985
From: Ginn R
CLEVELAND ELECTRIC ILLUMINATING CO.
To: Harold Denton
Office of Nuclear Reactor Regulation
Shared Package
ML20138P326 List:
References
NUDOCS 8512260048
Download: ML20138P323 (2)


Text

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THE CLEVELAND ELECTRIC ILLUMIN ATING COMPANY P.o Box 5000 - CLEVELAND. oHlo 44101 - TELEPHONE (216) 622-9800 - ILLUMINATING BLDG. - 55 PUBLICSoUARE Serving The Best Location in the Nation Robert M.Ginn CHAIRM AN OF THE BOARD Dec mber 20, 1985 Mr. Harold R. Denton, Director Office of Nuclear Reactor Rcgulation U.S. Nucl(ar Regulatory Coccission Washington, D.C. 20555 RE: Perry nuclcar Fower Plant Dockeb Hos. 50- WO; 50-441 Dcar Mr. Denton:

During the Dcccmber 17, 1985 meeting with you and the membLrs of your staff, you ackcd that we provide additional information on the pending affiliation betwecn The Cleveland Electric Illuminating Com-pany (CEI) and The ToledoEdison Company (TE) and how it would affect the management of the Perry Nuclcar Power Plant. Yne affiliation has been approved by the sharcholdcrs of both companics and is awaiting approval by the Securities and Exchange Conmission.

We have previously furnished to the Corniscion by letters dated August 14, 1985 and november 13, 1985 the Rcgistration Statencnt under the Securitics Act of 1933 (Form S-4), the Application under the Public Utility Holding Company Act of 1935 (Fom U-1) and Amendment No.1 to Fom U-1. These docunents describe in some detail the affiliation, including some of the longcr-tem organizational changes which may be implemented with it.

The affiliation will involve the fonnation of a holding cocpany, Centerior Energy Corporation, whien will own all of the common stock of CEI and TE. The holders of CEI and TE co:rnon stock will become common stockholders of Centerior. CEI and TE will become subsidiarics of Centerior and will continue as electric utility companics with basically the same employces and managcment structure within the nuclear operations.

A service company will also be formed as a wholly-owned subsidiary of Centerior.

As we have stated, the affiliation itself will not involve any significant changes with respect to the managencnt of Perry. The plant \

operating personnel will remain enployees of CEI. The existing CEI management organization for Perry will remain unchanged except that the Vice President, Nuclear Group (Murray Edelman) will report to the President (Robert Farlin6, currently CEI's Vice President, Administrative

'f Services), instead of to the Executive Vice President (Harold Williams).

EB (LIAW)

PSB (L. MAN) 8512260048 851220 h9'. EICSB (SitINIVASAN)

PDR ADOCK 05000440 RSH (ACTING)

H PDR FOB (VASSALLO)

AD - G. Lainas (Ltr only)

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Mr. Harold R. Dent:n December 20, 19$

The President of CEI will report directly to the Chief Executive Officer of Centerior, in the same way that the Executive Vice President of CEI currently reports to the Chief Executive Officer of CEI. As Chief Executive. Officer of Centerior, I will report to Centerior's Board of Directors. The attached figure illustrates T,he existing management organization and the management organization ir: mediately following the affiliation, as it.affects Perry. As Chief Executive Officer of Centerior, I will assure that the President of CEI and the Vice President, Nuclear Group maintain the same direct and frequent access to me that the Exe-cutive Vice President and the Vice President, Nuclear Group have had throughout the course of the construction phase of the Ferry project.

When the affiliation goes into effect, we anticipate that the service ccr:pany will take over certain functions now separately performed by CEI and TE. These include system planning and Engineering, cystem dispatch, financial planning, management information systems, legal and rate regulatory affairs. Because CEI's Nuclear Group has been concentrating all its efforts on readying Perry for operation, decisions on the role of the service company with respect to Ferry have not yet been made. Not until Unit 1 reaches full operational status will reco=mendations be made on possible structural changes affecting the management of Perry. Until

-that time, no Nuclear Group functions significantly affecting the operation of Perry will be transferred to the service company.

Although these decisions have nut yet been made, you have asked about possible future roles for the service cccpany. One such role would be to have CEI's Nuclear Operations Division Vice-President report to a Vice-President, Nuclear within the service company for matters of policy, major engineering changes and other major technical matters affect-ing the long-tem operation of the plant, while reporting to CEI's President for routine crperating and administrative matters. 'Ihe concept of dual reporting is currently in place for other operating nuclear plants and would allow the centralization of important nuclear functions within the service company. Currently the Nuclear Operations Division Vice President reports only to the Nuclear Group Vice President. Let me repeat that no decisions on the service company's role with respect to Ferry have been made. We will keep you fully informed as our evaluation proceeds. Of course, we plan to request appropriate amendments to the Perry operating license in the event such amendments ware required to implement future management organization changes.

Very truly yours, o, , ,

gY , b AL-Robert M. Ginn, Chief Executive Officer Rm :ap Enclosure ec: J. G. Keppler