ML20207G926
| ML20207G926 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 03/05/1999 |
| From: | Getman F AFFILIATION NOT ASSIGNED |
| To: | |
| Shared Package | |
| ML20137A173 | List: |
| References | |
| NUDOCS 9903120198 | |
| Download: ML20207G926 (6) | |
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of
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North Atlantic Energy Service Corporation and
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Montaup Electric Company
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Docket No. 50-443
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(License No. NPF-86)
(Seabrook Station, Unit No.1)
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SUPPLEMENT TO LICENSE TRANSFER APPLICATION REQUESTING CONSENT FOR TRANSFER OF MONTAUP ELECTRIC COMPANY'S INTEREST IN OPERATING LICENSE NPF-86 FOR TIIE SEABROOK STATION TO LITTLE BAY POWER CORPORATION L
INTRODUCTION By letter dated September 29,1998, North Atlantic Energy Service Corporation (" North Atlantic") transmitted the License Transfer Application of Montaup Electric Company
("Montaup") and Little Bay Power Corporation ("Little Bay") requesting the Nuclear Regulatory Commission's ("NRC") consent to the transfer of control of Montaup's approximate 2.9%
interest in Seabrook Station Unit No. I to Little Bay. Little Bay is a wholly owned subsidiary of BayCorp Holdings, Ltd ("BayCorp"), which is the holding company that also owns Great Bay l
Power Corporation (" Great Bay"), which owns approximately 12.1% of Seabrook Station Unit l
No.1. The transfer is being undertaken by Montaup as part of the divestiture of all of its generating assets pursuant to the restructuring of the electric utility industry occurring in Massachusetts and Rhode Island.
This Supplement to the License Transfer Application is being filed to update the five-year cost-revenue projections provided by Little Bay in the initial Application to show its financial qualifications for its prospective 2.9% interest in Seabrook in accordance with 10 C.F.R. 50.33(f). Those projections were provided for the five year period,1999 through 2003, based on the assumption that the transfer would be effectuated shortly after the fint of the year. It is now 9903120198 990308 PDR ADOCK 05000443 P
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. apparent, however, that the transfer will not be effectuated early in 1999 because of outstanding i
regulatory approvals.
Accordingly, Little Bay is updating its cost-revenue projections to provide projections for the period beginning July 1,1999; it also incorporates the latest market and cost information.
l Moreover, in addition to providing just the tonsolidated cash flow and income statement projections for BayCorp, as done in the initial Application, cash flow statement projections are provided for Little Bay showing its financial qualifications, which is the primary focus of the NRC here. These updated cost-revenue projections continue to show that Little Bay, as well as
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BayCorp, is financially qualified under the NRC's regulations with respect to Seabrook's l
l operational, maintenance and related costs attributable to Little Bay's prospective 2.9% interest in Seabrook.2 l
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THE UPDATED COST-REVENUE PROJECTIONS 1
Under the NRC's regulations,10 C.F.R. { 50.33(f)(2), a non-electric utility applicant for an operating license must demonstrate that it possesses or has reasonable assurance of obtaining the funds necessary to cover the plant's estimated operational costs by submitting " estimates for total annual operating costs for each of the first five years of operation of the facility" as well as the " source (s) of funds to cover these costs." Little Bay's 2.9% share of the total annual estima::d operating costs for Seabrook beginning July 1,1999 through the end of the year 2004 are d.own on the Table below.
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' As noted in the initial Application, the NHPUC, MDETE and FERC must approve the transfer of Montaup's i
l ownership interest in Seabrook. License Transfer App. at 5. Although the transfer cannot be completed until l
these other approvals are obtained, Little Bay and Montaup request the NRC to promptly act on the instant l
Application and not await NHPUC, MDTE or FERC approval.
1 8 The information filed with this Supplement solely relates to Little Bay's financial qualifications for operatiors and does not concem or affect Little Bay's financial qualifications for decommissioning funding of its prospective 2.9% Seabrook interest, which will be prepaid by Montaup at the time of closing as described in the initial Application.
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r TABLE I l
Year Estimated Operating Costs July 1,1999 to
$2.6 Million i
December 31,1999 l
2000
$6.4 Million l
2001
$5.1 Million 2002
$5.0 Million l
2003
$5.5 Million 1
2004
$5.5 Million These are the total estimated cash costs attributable to Montaup's 2.9% ownership share, based j
on Seabrook's projected budget, that Little Bay would be obligated to pay for the operation of i
the Seabrook facility for each of the periods shown, under the Joint Ownership Agreement.8 f
These costs include plant operation and maintenance costs, capital additions, and nuclear fuel fo'r the Seabrook plant.
The source of funds to pay for these costs will be the sale of the power generated by Little Bay's 2.9% prospective ownership share of Seabrook.' Attached as Exhibit I are Selected Financial Information and Cash Flows projections for BayCorp from January 1,1999 through j
December 31,2004, including the effects of the acquisition of Montaup's 2.9% interest in Seabrook beginning July 1,1999.8 Attached as Exhibit 2 to this Supplement are Summary Cash Flow and Income Statement projections broken out for Little Bay and Great Bay for the years j
- The costs for the years 1999 through 2003 are based on the official "Seabrook 1999 Budget and 2000 - 2003 Forecast," which includes the Seabrook budget for 1999 and budget forecasts for the years 2000 through 2003.
De costs for the year 2004 are based on the previous budget forecasts.
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- As described in the initial Application, Little Bay will sell the power generated by its prospective 2.9% ownership l
interest in Seabrook to Great Bay on a take or pay basis under which Great Bay will be obligated to pay all of Little Bay's costs associated with its ownership interest in Seabrook. The power will be sold by Great Bay at market rates in the same general manner as it currently sells its 12.1% ownership interest in Seabrook.
8 he consolidated projections in Exhibit I are based on depreciated costs and, as such, incirde under " Plant Depreciation" sunk acquisition and capital aMtion costs which are not included in the cash operating cost estimates of Seabrook Station. De plant depreciation costs shown in Exhibit 1, however, are significantly greater than the cash capital addition costs included in the Seabrook projected budgets that would be allocated to Little Bay and Great Bay over the period of the projections. Accordingly, the income projections in Exhibit 1 are
~ ignificantly conservative from a cash standpoint.
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1999 through 2004. Attached as Exhibit 3 are the updated spot and short term market sale price and capacity factor assumptions underlying the cash flow and income statement projections in Exhibits 1 and 2.6 These projections show that the revenues from the sale of power from Little Bay's prospective 2.9% interest in Seabrook are sufficient to cover the estimated pro rata share of Little Bay's costs to operate the Seabrook Station and its other costs associated with the sale of that power (eg transmission costs and taxes). Specifically, the projections of Little Bay's cash flow and income in Exhibit 2 show that over the period from July 1,1999 through the end of 2004 Little Bay will generate significant income and positive cash flow over and above its costs associated with its prospective 2.9% interest in the Seabrook plant. Further, the censolidated projections of BayCorp in Exhibit I show a positive cash flow and net income over the same period of time. Indeed, the projections reflect that the acquisition of Montaup's 2.9% Seabrook interest significantly enhances the financial capability of BayCorp.
Thus, Little Bay is financially qualified under the NRC's regulations to possess its prospective 2.9% ownership interest in Seabrook in that it will more than recover its Seabrook costs from the sale of electricity generated by its prospective Seabrook interest. The NRC has twice previously determined in analogous circumstances that Great Bay is financially qualified under 10 C.F.R. 50.33(f)(2) with respect to its financial obligations for Seabrook's operational, maintenance and related costs attributable to its current 12.1% ownership interest in Seabrook.'
By the same analysis and logic, Little Bay satisfies the financial qualification requirements of 10 C.F.R. 50.33(f) with respect to its prospective 2.9% ownership interest in Seabrook.
- Redacted versions of Exhibits 1,2, and 3 are attached to this document deleting sensitive commercial and financial information. The unredacted versions are being filed separately together with an affidavit of Frank W. Getman, j
Jr. requesting that the NRC maintain the sensitive commercial and financial 5 formation contained in Exhibits 1,2 and 3 in confidence under 10 C.F.R. p 2.790.
'fiee Nonh Atlantie Services Corporation and Great Bay Power Corporation (Seabrook Station, Unit No.1), Docket j
No. 50443, Exemption Order at 3-4 (January 22,1997),62 Fed. Reg. 5,492,5,493 (1997); North Atlantic Enerev I
Services Corporation and Great Bay Power Corporation (Seabrook Station, Unit No.1), Docket No. 50-443, Exemption Order at 5 (July 23,1" d),62 Fed. Reg. 40,549,40,550 (1997).
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I Accordingly, Little Bay and Montaup request that the Commission consent to the transfer l
l of control of Montaup's approximate 2.9% interest in the Seabrook Station, Unit No. I to Little i
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Bay. Montaup and Little Bay further request the Commission to act promptly and approve this application so that the transfer may be implemented upon receiving the other necessary regulatory approvals from the NHPUC, MDTE and FERC.'
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' Under the Commission's rules, the Commission may issue its decision here subject to a post-effectiveness hearing, if any is held on this matter. 63 Fed. Reg. 66,721,66,728 (December 3,1998).
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r CERTIFICATION I, FRANK W. GETMAN JR., being duly sworn, state that:
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I am President and Chief Executive Officer of Little Bay Power Corporation; 2.
I am duly authorized to execute and file this certification on behalf of Little Bay Power Corporation; and 3.
The statements set forth in the attached Supplement to the Application are true and correct to the best of my information, knowledge and belief.
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FRA'NK W. GETMAN JR.
SWORN and subscribed to before me this day of March,1999.
aAP abn Notary Public d
' My Commission expires: Cumo_ E J)OOI, t/
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