ML092990101
| ML092990101 | |
| Person / Time | |
|---|---|
| Site: | Calvert Cliffs, Nine Mile Point, Ginna  |
| Issue date: | 10/19/2009 |
| From: | Barron H Constellation Energy Nuclear Group |
| To: | Document Control Desk, Office of Nuclear Material Safety and Safeguards, Office of Nuclear Reactor Regulation |
| References | |
| Download: ML092990101 (5) | |
Text
Henry B. Barron President, CEO & Chief Nuclear Officer Nuclear Group Constellation Energy Nuclear Group 100 Constellation Way Suite 1800P Baltimore, MD 21202 10 CFR 50.80 10 CFR 72.50 10 CFR 50.90 October 19, 2009 U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 ATTENTION:
SUBJECT:
REFERENCES:
Document Control Desk Calvert Cliffs Nuclear Power Plant Unit Nos. I & 2; Docket Nos. 50-317 & 50-318 Calvert Cliffs Independent Spent Fuel Storage Installation Docket No. 72-8 Nine Mile Point Nuclear Station Unit Nos. 1 & 2; Docket Nos. 50-220 & 50-410 R. E. Ginna Nuclear Power Plant Docket No. 50-244.
(a)
Letter from Mr. M. J. Wallace (CEG) to Document Control.Desk (NRC),
dated January 22, 2009, "Application for an Order Approving License Transfers and Conforming License Amendment Request" (b)
Letter from Mr. H.B. Barron (CENG) to Document Control Desk (NRC),
dated April 8, 2009, "Supplemental Information in Support of Application for an Order Approving License Transfers and Conforming License Amendment Request" (c)
Letter from Mr. J. A. Spina (CCNPP) to Document Control Desk (NRC),
dated October 15, 2009, "Notification of Expected Date of Transfer of Name" Supplemental Information in Support of Orders Approving Application Regarding Proposed Corporate Restructuring We are submitting this supplement to clarify the timing of the corporate restructuring actions related to the subject license transfers, especially-the relationship between the direct transfer of the license for Calvert Cliffs Nuclear Power Plant, Inc. to Calvert Cliffs Nuclear Power Plant, LLC and the indirect transfer of licenses related to the planned joint venture transaction between Constellation Energy Nuclear Group, LLC (CENG) and EDF Development Inc. (EDF Development). While these two transfers are related, one is not necessarily dependent on the other. In Reference (a), we anticipated that the two events would be completed nearly concurrently. Due to the complexity of the closing of the EDF Development transaction and tax considerations, the transactions must be done in a sequence, with the Calvert Cliffs 14()(/
A4/4
Document Control Desk October 19, 2009 Page 2 direct transfer and other restructuring actions occurring before the closing of EDF Development's acquisition of its interest in CENG.
By Orders dated October 9, 2009, the Nuclear Regulatory Commission (NRC) approved the license transfer application submitted in Reference (a) as supplemented. As requested by the NRC, Constellation is providing additional information on the timing of the proposed restructuring actions that are needed to occur prior to the closing involving EDF Development's proposed acquisition of interests in CENG, especially with respect to the timing of the direct license transfer for the corporate change involving Calvert Cliffs. We believe that certain of the restructuring steps designed to facilitate the proposed transfer of an interest in CENG to EDF Development can be accomplished in advance of the closing on EDF Development's acquisition because they do not implicate the financial and other conditions of the NRC's October 9, 2009 Orders. Although we anticipated the sequential nature of the restructuring steps, the degree of separation for tax purposes was not fully realized until recently.
As explained in Reference (a), and as supplemented by Reference (b), we will undertake certain corporate restructuring to facilitate the proposed transaction with EDF Development. As described in Reference (b),
the proposed restructuring involves changes to certain CENG subsidiaries and the formation of new intermediate parents over CENG for administrative and other non-operational purposes. Reference (b) indicated that the following restructuring steps are required to facilitate the transfer of the 49.99%
ownership interest in CENG to EDF Development:
" Constellation Energy Group, Inc., the ultimate parent company of CENG, will form a new intermediate holding company, Constellation Nuclear, LLC, as a parent company of CENG for non-operational purposes. Constellation Nuclear, LLC will also form a new wholly owned entity, CE Nuclear, LLC, to hold a fractional interest in CENG for non-operational purposes. These steps are contemplated as part of the indirect license transfers and are not prerequisites to implementing the direct license transfer related to the corporate change for the Calvert Cliffs entity.
Constellation Nuclear Power Plants, Inc., the intermediate parent company over the licensee subsidiaries for Ginna and Nine Mile Point (which exists solely for non-operational purposes),
will convert to a Delaware limited liability company and become Constellation Nuclear Power Plants, LLC.
This conversion will occur by operation of law under the Delaware Limited Liability Act with the same legal entity surviving as the limited liability company. As such, it does not involve a license transfer.
Calvert Cliffs Nuclear Power Plant, Inc. (CCNPP, Inc.) will become Calvert Cliffs Nuclear Power Plant, LLC (CCNPP, LLC). As described in Reference (b), this conversion will be accomplished by having Constellation Nuclear Power Plants, LLC form a subsidiary CCNPP, LLC and having CCNPP, Inc. merged into CCNPP, LLC by operation of law. Calvert Cliffs Nuclear Power Plant, LLC will then be a direct subsidiary of Constellation Nuclear Power Plants, LLC in the same manner as the other two licensee subsidiaries.
The conversion of CCNPP, Inc. to an LLC involves the direct license transfer approved in the NRC's Order for CCNPP, and will require issuance of the license amendment for this direct transfer as approved in the Order.
To effectuate these required steps, Constellation proposes to take these restructuring activities at least eight days in advance of closing the transaction involving EDF Development's acquisition of a 49.99%
interest in CENG. In Reference (c), we requested issuance of the license amendment upon completion of the conversion of CCNPP, Inc. to an LLC. We stated that the filing could occur as early as October 19,
Document Control Desk October 19, 2009 Page 3 2009. We now anticipate that this step will occur as early as October 23, 2009. These prerequisite steps could exist indefinitely, regardless of the closure of the overall EDF Development interest in CENG transaction. The remaining organization would still benefit from the resulting structure with no adverse effect and no impact on the Staff's conclusions regarding the indirect transfer.
At all times prior to closing the transaction with EDF Development, the existing financial support arrangements, including the intercompany credit agreements for R.E. Ginna Nuclear Power Plant (Ginna),
Nine Mile Point Nuclear Station (Nine Mile Point), and Calvert Cliffs Nuclear Power Plant (CCNPP),
will remain in place pursuant to commitments made to the NRC and required by prior NRC orders. As stated in Reference (a) (Attachment 1, p. 15), "[u]pon execution of the support agreements at closing, the existing agreements will be terminated." Thus the existing financial support arrangements will continue to remain in effect until the financial support agreements described in the license transfer application, as supplemented, and approved by the NRC become effective at the time of closing of the transfer of EDF Development's proposed ownership interest in CENG.
We believe that the completion of the proposed steps as outlined above is within the NRC's approval of the license transfer application. For the sake of clarity, we request that the NRC expeditiously issue an order modifying the Orders of October 9, 2009 to make a minor clarifying modification of the Orders.
Specifically, the first sentence of condition (4) for the Order concerning CCNPP and the first sentence of condition (2) for the Orders concerning Ginna and Nine Mile Point should be modified by inserting after "transaction" the words "involving the transfer resulting from the consummation of EDF Development's.
proposed ownership and operating interest in CENG". This modification would clarify that the new financial arrangements must be effective as of the date of the transfer of the CENG interest to EDF Development, which will allow the direct license transfer involving the corporate change to CCNPP, LLC to occur in advance of the transfer of EDF" Development's interest.
Constellation recognizes that Conditions (1) and (2) of the CCNPP Order (related to nuclear insurance and decommissioning funding mechanisms) apply to CCNPP, LLC and thus would apply to the direct license transfer relating to the corporate change involving this entity. For this reason, a copy of the letter from American Nuclear Insurers (ANI) guaranteeing nuclear liability insurance for CCNPP, LLC upon the transfer was enclosed with our October 15, 2009 letter.
The license amendment request and associated no significant hazards consideration analysis submitted as Attachment (9) to Reference (a) remains valid, and no change in that analysis is necessary as a result of the updated timing of the direct license transfer described herein.
We respectfully ask that the NRC issue the order modifying the Orders as expeditiously as possible, but in any event by October 23, 2009. We are prepared to work closely with the NRC staff to expedite the issuance of the proposed clarifying modification.
Document Control Desk October 19, 2009 Page 4 We appreciate the NRC's assistance with this matter. Should you require any additional information regarding this correspondence, please contact Bruce S. Montgomery at (410) 470-3777 or Bruce. S.Montgomery@constellation.com.
Sincerely, Henry B. Barron Chief Nuclear Officer Constellation Energy Nuclear Group, LLC STATE OF MARYLAND TO WIT:
CITY OF BALTIMORE I, Henry B. Barron, state that I am the Chief Nuclear Officer for Constellation Energy Nuclear Group, LLC, for Calvert Cliffs Nuclear Power Plant, Inc., Nine Mile Point Nuclear Station, LLC, and R. E.
Ginna Nuclear Power Plant, LLC, and that I am duly authorized to execute and file this submittal on behalf of these companies. To the best of my knowledge and belief, the statements contained in this document with respect to these companies are true and correct. To the extent that these statements are not based on my personal knowledge, they are based upon information provided by employees and/or consultants of the companies. Such information has been reviewed in accordance with company practice, and I believe it to be reliable.
Subscribed and sworn before me, a Notary Public in and for the State of Maryland and City of Baltimore, this /
day of October, 2009.
WITNESS my Hand and Notarial Seal:
My Commission Expires:
/-/
Date HBB/EMT
Document Control Desk October 19, 2009 Page 5 cc:
R. V. Guzman, NRC D. V. Pickett, NRC M. F. Weber, NMSS S. J. Collins, NRC Resident Inspector, NRC (Calvert Cliffs)
Resident Inspector, NRC (Ginna)
Resident Inspector, NRC (Nine Mile Point)
A. L. Peterson, NYSERDA S. Gray, Maryland DNR P. D. Eddy, New York State Department of Public Service