[Federal Register Volume 63, Number 60 (Monday, March 30, 1998)]
[Notices]
[Pages 15232-15233]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8187]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 50-410]


Order Approving Application Regarding Restructuring of New York 
State Electric & Gas Corporation by Establishment of a Holding Company 
Affecting License No. NPF-69, Nine Mile Point Nuclear Station, Unit No. 
2

I

    New York State Electric & Gas Corporation (NYSEG) is licensed by 
the U.S. Nuclear Regulatory Commission (NRC or Commission) to own and 
possess an 18-percent interest in Nine Mile Point Nuclear Station, Unit 
2 (NMP2), under Facility Operating License No. NPF-69, issued by the 
Commission on July 2, 1987. In addition to NYSEG, the other owners who 
may possess, but not operate, NMP2 are Long Island Lighting Company 
with an 18-percent interest, Rochester Gas and Electric Corporation 
with a 14-percent interest, and Central Hudson Gas & Electric 
Corporation with a 9-percent interest. Niagara Mohawk Power Corporation 
(NMPC) owns a 41-percent interest in NMP2, is authorized to act as 
agent for the other owners, and has exclusive responsibility and 
control over the operation and maintenance of NMP2. NMP2 is located in 
the town of Scriba, Oswego County, New York.

II

    Under cover of a letter dated September 18, 1997, from its counsel, 
NYSEG submitted an application for consent by the Commission, pursuant 
to 10 CFR 50.80, regarding a proposed corporate restructuring action 
that would result in the indirect transfer of the operating license for 
NMP2 to the extent it is held by NYSEG. As a result of the proposed 
restructuring, NYSEG would establish a new holding company and become a 
wholly owned subsidiary of the new holding company, not yet named, to 
be created as a New York State corporation in accordance with an 
executed ``Agreement Concerning the Competitive Rate and Restructuring 
Plan of New York State Electric & Gas Corporation'' (Settlement 
Agreement) forwarded as enclosures to supplemental letters to the 
application, dated October 20 and 27, 1997. Under

[[Page 15233]]

cover of a letter dated January 6, 1998, counsel for NYSEG forwarded 
copies of an order by the Federal Energy Regulatory Commission 
authorizing the corporate restructuring, subject to certain specified 
conditions, and finding that the proposed restructuring will not 
adversely affect competition or have an anticompetitive effect. 
Similarly, under cover of a letter dated February 9, 1998, counsel for 
NYSEG forwarded copies of the order, which was issued and effective 
January 27, 1998, by the State of New York Public Service Commission 
(NYPSC), adopting the terms of the Settlement Agreement, subject to 
certain modifications and conditions generally involving retail rate 
matters, and clarifying that NYSEG will have a reasonable opportunity 
to recover all prudently incurred NMP2 costs, subject to the duty of 
the NYPSC to set just and reasonable rates.
    According to the application, the outstanding shares of NYSEG's 
common stock (other than shares for which appraisal rights are properly 
exercised) would be exchanged on a share-for-share basis for common 
stock of the holding company, such that the holding company will own 
all of the outstanding common stock of NYSEG. Under this restructuring, 
NYSEG would divest its interest in coal-fired power plants but would 
continue to be an ``electric utility'' as defined in 10 CFR 50.2 
engaged in the transmission, distribution and, in the case of NMP2 and 
hydroelectric facilities, the generation of electricity. NYSEG would 
continue to be a licensee of NMP2, and no direct transfer of the 
operating license or interests in the station would result from the 
proposed restructuring. The transaction would not involve any change to 
either the management organization or technical personnel of NMPC, 
which has exclusive responsibility under the operating license for 
operating and maintaining NMP2 and which is not involved in the 
proposed restructuring.
    Notice of this application for approval was published in the 
Federal Register on December 5, 1997 (62 FR 64407), and an 
Environmental Assessment and Finding of No Significant Impact was 
published in the Federal Register on January 16, 1998 (63 FR 2701).
    Under 10 CFR 50.80, no license shall be transferred, directly or 
indirectly, through transfer of control of the license, unless the 
Commission shall give its consent in writing. Upon review of the 
information submitted in the application of September 18, 1997, as 
supplemented by submittals dated October 20 and 27, 1997, and January 6 
and February 9, 1998, the NRC staff has determined that the 
restructuring of NYSEG by establishment of a holding company will not 
affect the qualifications of NYSEG as a holder of the license, and that 
the transfer of control of the license for NMP2, to the extent effected 
by the restructuring, is otherwise consistent with applicable 
provisions of law, regulations, and orders issued by the Commission, 
subject to the conditions set forth herein. These findings are 
supported by a safety evaluation dated March 19, 1998.

III

    Accordingly, pursuant to Sections 161b, 161i, 161o, and 184 of the 
Atomic Energy Act of 1954, as amended, 42 USC Secs. 2201(b), 2201(i), 
2201(o), and 2234, and 10 CFR 50.80, it is hereby ordered that the 
Commission approves the application regarding the proposed 
restructuring of NYSEG by the establishment of a holding company, 
subject to the following: (1) NYSEG shall inform the Director of the 
Office of Nuclear Reactor Regulation, 60 days prior to a transfer 
(excluding grants of security interests or liens) during any twelve 
month period from NYSEG to the holding company, or any direct or 
indirect subsidiary of the holding company, of facilities for the 
production, transmission, or distribution of electric energy (other 
than the transfer of NYSEG's seven coal-fired power plants) having a 
depreciated book value exceeding 10 percent (10%) of NYSEG's 
consolidated net utility plant, as recorded on NYSEG's books of 
account, and (2) should the restructuring of NYSEG not be completed by 
March 19, 1999, this Order shall become null and void, provided, 
however, on application and for good cause shown, such date may be 
extended.
    This Order is effective upon issuance.

IV

    By April 29, 1998, any person adversely affected by this Order may 
file a request for a hearing with respect to issuance of the Order. Any 
person requesting a hearing shall set forth with particularity how that 
interest is adversely affected by this Order and shall address the 
criteria set forth in 10 CFR 2.714(d).
    If a hearing is to be held, the Commission will issue an order 
designating the time and place of the hearing.
    The issue to be considered at any such hearing shall be whether 
this Order should be sustained.
    Any request for a hearing must be filed with the Secretary of the 
Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001, Attention: Rulemakings and Adjudications Staff, or may be 
delivered to 11555 Rockville Pike, Rockville, Maryland, between 7:45 
a.m. and 4:15 p.m. Federal workdays, by the above date. Copies should 
be also sent to the Office of the General Counsel, and to the Director, 
Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555, and to Mr. Sherwood J. Rafferty, 
Senior Vice President and Chief Financial Officer, New York State 
Electric & Gas Corporation, P.O. Box 3287, Ithaca, NY 14852.
    For further details with respect to this Order, see the application 
for approval dated September 18, 1997, as supplemented by letters dated 
October 20 and 27, 1997, and January 6 and February 9, 1998, which are 
available for public inspection at the Commission's Public Document 
Room, the Gelman Building, 2120 L Street, NW., Washington, DC, and at 
the local public document room located at the Reference and Documents 
Department, Penfield Library, State University of New York, Oswego, New 
York 13126.

    Dated at Rockville, Maryland, this 19th day of March 1998.

    For the Nuclear Regulatory Commission.
Samuel J. Collins,
Director, Office of Nuclear Reactor Regulation.
[FR Doc. 98-8187 Filed 3-27-98; 8:45 am]
BILLING CODE 7590-01-P