[Federal Register Volume 66, Number 126 (Friday, June 29, 2001)]
[Notices]
[Pages 34720-34722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-16388]


=======================================================================
-----------------------------------------------------------------------

NUCLEAR REGULATORY COMMISSION

[Docket Nos. 50-317, 50-318, and 72-8; Renewed License Nos. DPR-53, 
DPR-69; License No. SNM-2505]


In the Matter of Calvert Cliffs Nuclear Power Plant, Inc.; Order 
Approving Transfer of Licenses and Conforming Amendments

I

    Calvert Cliffs Nuclear Power Plant, Inc. (CCNPPI or the licensee) 
is the holder of Renewed Facility Operating Licenses Nos. DPR-53 and 
DPR-69, which authorize operation of Calvert Cliffs Nuclear Power 
Plant, Unit Nos. 1 and 2 (CCNPP or Calvert Cliffs), and Materials 
License No. SNM-2505, which authorizes operation of the Calvert Cliffs 
Independent Spent Fuel Storage Installation (ISFSI). The facilities are 
located at the licensee's site in Calvert County, Maryland. The 
operating licenses authorize CCNPPI to possess, use, and operate 
Calvert Cliffs. The materials license authorizes CCNPPI to receive, 
possess, transfer, and store power reactor spent fuel at the ISFSI.

II

    By application dated December 20, 2000, as supplemented by 
submittals dated February 22, April 10, May 30, and June 7, 2001 
(collectively, the application), CCNPPI requested that the Commission 
consent to certain proposed license transfers that would be necessary 
in connection with the realignment of the corporate organization of 
CCNPPI's ultimate parent, Constellation Energy Group, Inc. (CEG, Inc.). 
Under this realignment, CEG, Inc. is separating its merchant energy 
business (largely comprising wholesale generation and power marketing) 
from its retail services

[[Page 34721]]

business. With respect to its merchant energy business, several limited 
liability companies will be formed, including Calvert Cliffs Nuclear 
Power Plant, LLC (CCNPP LLC). CCNPP LLC will be formed as a subsidiary 
of Constellation Nuclear Power Plants, Inc., following the formation of 
Constellation Nuclear Power Plants, Inc. as a subsidiary of 
Constellation Nuclear, LLC, the current direct parent of CCNPPI. 
Constellation Nuclear, LLC is a wholly-owned direct subsidiary of CEG, 
Inc. Following the formation of CCNPP LLC, CCNPPI will be merged into 
CCNPP LLC, effectively resulting in the assets and associated 
liabilities of CCNPPI being directly transferred to CCNPP LLC. After 
this merger, as a subsidiary of Constellation Nuclear Power Plants, 
Inc., and indirect subsidiary of Constellation Nuclear, LLC, and CEG, 
Inc., the ultimate parent, CCNPP LLC will be the owner, and have 
responsibility for the operation, of Calvert Cliffs and the ISFSI. CEG, 
Inc. will then form New Controlled as a subsidiary, which will acquire 
Constellation Nuclear, LLC from CEG, Inc. At this point, CEG, Inc. will 
own New Controlled, which in turn will own Constellation Nuclear, LLC, 
which in turn will own Constellation Nuclear Power Plants, Inc., which 
in turn will own CCNPP LLC. New Controlled's acquisition of 
Constellation Nuclear, LLC will result in an indirect transfer of the 
licenses for Calvert Cliffs and the ISFSI to New Controlled, albeit 
with CEG, Inc. remaining, at this point, the ultimate parent of CCNPP 
LLC.
    Following the above realignment of CCNPPI's parent organization, 
Virgo Holdings, Inc., (Virgo) an indirect subsidiary of The Goldman 
Sachs Group, Inc., will acquire an equity interest in CCNPP LLC and a 
corresponding voting interest in New Controlled, up to 17.5%. After the 
Virgo acquisition of a voting interest in New Controlled, CEG, Inc., 
the shares of which are widely held, will distribute its shares of New 
Controlled to current CEG, Inc. shareholders, effectively resulting in 
Virgo possessing the largest single voting interest in New Controlled, 
assuming a 17.5% voting interest is acquired. CEG, Inc. will ultimately 
change its name to BGE Corporation, while New Controlled changes its 
name to Constellation Energy Group, Inc. No physical changes to the 
facilities or operational changes were proposed in the application.
    Approval of the direct and indirect transfers of the operating 
licenses and conforming license amendments was requested by CCNPPI 
pursuant to 10 CFR 50.80 and 50.90, and approval of the direct and 
indirect transfer of the materials license and conforming amendment was 
requested by CCNPPI pursuant to 10 CFR 72.50 and 72.56. Notice of the 
request for approval and an opportunity for a hearing was published in 
the Federal Register on March 13, 2001 (66 FR 14599). No hearing 
requests or written comments were received.
    Pursuant to 10 CFR 50.80, no license, or any right thereunder, 
shall be transferred, directly or indirectly, through transfer of 
control of the license, unless the Commission shall give its consent in 
writing. In addition, pursuant to 10 CFR 72.50, no license shall be 
transferred, directly or indirectly, through transfer of control of the 
license, unless the Commission gives its consent in writing. After 
reviewing the information in the application from CCNPPI and other 
information before the Commission and relying upon the representations 
and agreements contained in the application, the NRC staff has 
determined that CCNPP LLC is qualified to be the holder of the 
licenses, that the establishment of New Controlled as a new 
intermediate parent of CCNPP LLC will not affect the qualifications of 
CCNPP LLC as the holder of the licenses, that the acquisition by Virgo 
of up to a 17.5% voting interest in New Controlled coupled with CEG, 
Inc.'' distribution of its voting shares of New Controlled to CEG, 
Inc.'s shareholders, resulting in Virgo becoming the largest single 
voting shareholder of the ultimate corporate parent of CCNPP LLC, will 
not affect the qualifications of CCNPP LLC as the holder of the 
licenses, and that the direct transfer of the licenses to CCNPP LLC, 
and indirect license transfers to the extent effected by the foregoing 
transactions, are otherwise consistent with applicable provisions of 
law, regulations, and orders issued by the Commission, subject to the 
conditions set forth below. The NRC staff has further found that (1) 
the application for the proposed license amendments complies with the 
standards and requirements of the Atomic Energy Act of 1954, as 
amended, and the Commission's rules and regulations set forth in 10 CFR 
Chapter 1; (2) the facilities will operate in conformity with the 
application, the provisions of the Act, and the rules and regulations 
of the Commission; (3) there is reasonable assurance that the 
activities authorized by the proposed license amendments can be 
conducted without endangering the health and safety of the public and 
that such activities will be conducted in compliance with the 
Commission's regulations; (4) the issuance of the proposed license 
amendments will not be inimical to the common defense and security or 
the health and safety of the public; and (5) the issuance of the 
proposed amendments will be in accordance with 10 CFR Part 51 of the 
Commission's regulations, and all applicable requirements have been 
satisfied. The foregoing findings are supported by a safety evaluation 
dated June 19, 2001.

III

    Accordingly, pursuant to sections 161b, 161i, and 184 of the Atomic 
Energy Act of 1954, as amended, 42 U.S.C. 2201(b), 2201(i), and 2234, 
and 10 CFR 50.80 and 10 CFR 72.50, It Is Hereby Ordered that the direct 
transfer of the licenses, as described herein, to CCNPP LLC, and the 
indirect transfer of the licenses, to the extent effected by the 
proposed transactions described above, are approved, subject to the 
following conditions:
    (1) CCNPP LLC shall, prior to completion of the subject direct 
transfers, provide the Director of the Office of Nuclear Reactor 
Regulation satisfactory documentary evidence that CCNPP LLC has 
obtained the appropriate amount of insurance required of licensees 
under 10 CFR Part 140 of the Commission's regulations.
    (2) The decommissioning trust agreement for Calvert Cliffs and the 
ISFSI, at the time the direct license transfers are effected and 
thereafter, is subject to the following:
    (a) The decommissioning trust agreement must be in a form 
acceptable to the NRC.
    (b) With respect to the decommissioning trust funds, investments in 
the securities or other obligations of CEG, Inc., New Controlled, or 
their affiliates, successors, or assigns are and shall be prohibited. 
In addition, except for investments tied to market indexes or other 
non-nuclear-sector mutual funds, investments in any entity owning one 
or more nuclear power plants are and shall be prohibited.
    (c) The decommissioning trust agreement must provide that no 
disbursements or payments from the trusts, other than for ordinary 
administrative expenses, shall be made by the trustee unless the 
trustee has first given the NRC 30-days prior written notice of the 
payment. The decommissioning trust agreement shall further contain a 
provision that no disbursements or payments from the trusts shall be 
made if the trustee receives prior written notice of objection from the 
Director of the Office of

[[Page 34722]]

Nuclear Reactor Regulation or the Director of the Office of Nuclear 
Material Safety and Safeguards.
    (d) The decommissioning trust agreement must provide that the 
agreement cannot be amended in any material respect without 30-days 
prior written notification to the Director of the Office of Nuclear 
Reactor Regulation and the Director of the Office of Nuclear Material 
Safety and Safeguards.
    (e) The appropriate section of the decommissioning trust agreement 
shall state that the trustee, investment advisor, or anyone else 
directing the investments made in the trusts shall adhere to a 
``prudent investor'' standard, as specified in 18 CFR 35.32(a)(3) of 
the Federal Energy Regulatory Commission's regulations.
    (3) CCNPP LLC shall provide decommissioning funding assurance, to 
be held in decommissioning trusts for Calvert Cliffs and the ISFSI upon 
the transfer of the licenses to CCNPP LLC, in an amount equal to or 
greater than the balance in the Calvert Cliffs and ISFSI 
decommissioning trusts immediately prior to the transfer. In addition, 
CCNPP LLC shall ensure that all contractual arrangements referred to in 
the application to obtain necessary decommissioning funds for Calvert 
Cliffs and the ISFSI through a non-bypassable charge from Baltimore Gas 
and Electric Company are amended as represented in the application and 
will be maintained until the decommissioning trusts are fully funded, 
or shall ensure that other mechanisms that provide equivalent assurance 
of decommissioning funding in accordance with the Commission's 
regulations are maintained.
    (4) CCNPP LLC shall take all necessary steps to ensure that the 
decommissioning trusts are maintained in accordance with the 
application, the requirements of this Order, and the related safety 
evaluation.
    (5) At the time of the direct transfers, CCNPP LLC shall enter or 
shall have entered into an intercompany credit agreement with CEG, Inc. 
with substantially the same terms that exist in the current 
intercompany credit agreement dated July 1, 2000, referenced in the 
application between CEG, Inc. and CCNPPI. Furthermore, at the time New 
Controlled becomes the ultimate parent company of CCNPP LLC, CCNPP LLC 
shall enter or shall have entered into an intercompany credit agreement 
with New Controlled with substantially the same terms that exist in the 
current intercompany credit agreement dated July 1, 2000, referenced in 
the application between CEG, Inc. and CCNPPI. At such time, the 
intercompany credit agreement between the current CEG, Inc. legal 
entity and CCNPP LLC may be canceled. Except as otherwise provided 
above, CCNPP LLC shall take no action to void, cancel, or modify any 
intercompany credit agreement referenced above, without the prior 
written consent of the Director of the Office of Nuclear Reactor 
Regulation and the Director of the Office of Nuclear Material Safety 
and Safeguards.
    (6) CCNPPI shall inform the Director of the Office of Nuclear 
Reactor Regulation of the date of the closing of the direct transfers 
no later than two business days prior to such date. If all of the 
direct and indirect transfers of the licenses approved by this Order 
are not completed by June 30, 2002, this Order shall become null and 
void, provided, however, upon written application and for good cause 
shown, such date may in writing be extended.
    It Is Further Ordered that, consistent with 10 CFR 2.1315(b), 
license amendments that make changes, as indicated in Enclosure 2 to 
the cover letter forwarding this Order, to conform the licenses to 
reflect the subject direct license transfers are approved. The 
amendments shall be issued and made effective at the time the proposed 
direct license transfers are completed.
    This Order is effective upon issuance.
    For further details with respect to this action, see the initial 
application dated December 20, 2000, supplemental submittals dated 
February 22, April 10, May 30, and June 7, 2001, and the safety 
evaluation dated June 19, 2001, which are available for public 
inspection at the Commission's Public Document Room, located at One 
White Flint North, 11555 Rockville Pike (first floor), Rockville, 
Maryland. Publicly available records will be accessible from the 
Agencywide Documents Access and Management Systems (ADAMS) Public 
Electronic Reading Room on the Internet at the NRC Web site, http://www.nrc.gov/NRC/ADAMS/index.html. If you do not have access to ADAMS or 
if there are problems in accessing the documents located in ADAMS, 
contact the NRC Public Document Room Reference staff at 1-800-397-4209, 
301-415-4737 or by e-mail to [email protected].

    Dated at Rockville, Maryland, this 19th day of June 2001.
    For the Nuclear Regulatory Commission.
R. William Borchardt,
Acting Director, Office of Nuclear Reactor Regulation.
Martin J. Virgilio,
Director, Office of Nuclear Material Safety and Safeguards.
[FR Doc. 01-16388 Filed 6-28-01; 8:45 am]
BILLING CODE 7590-01-P