[Federal Register Volume 68, Number 106 (Tuesday, June 3, 2003)]
[Notices]
[Pages 33208-33209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-13866]


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NUCLEAR REGULATORY COMMISSION

[Docket Nos. 50-275 and 50-323]


Pacific Gas and Electric Company (Diablo Canyon Nuclear Power 
Plant, Units 1 and 2); Order Approving Transfer of Licenses and 
Conforming Amendments

    Pacific Gas and Electric Company (PG&E or the licensee) is the 
holder of Facility Operating Licenses Nos. DPR-80 and DPR-82, which 
authorize the operation of the Diablo Canyon Nuclear Power Plant, Units 
1 and 2 (DCNPP or the facility) at steady-state power levels not in 
excess of 3411 megawatts thermal. The facility is located at the 
licensee's site in San Luis Obispo County, California. The licenses 
authorize PG&E to possess, use, and operate the facility.
    Under cover of a letter dated November 30, 2001, PG&E submitted an 
application requesting approval of the transfer of Facility Operating 
Licenses Nos. DPR-80 and DPR-82 for DCNPP from PG&E to Electric 
Generation LLC and Diablo Canyon LLC. The licensee also requested 
approval of conforming license amendments to reflect the transfer. The 
application was supplemented by submittals dated January 18 and May 1, 
2002, collectively referred to as the ``application'' herein unless 
otherwise indicated.
    Diablo Canyon LLC, a California limited liability company, is a 
wholly-owned subsidiary of Electric Generation LLC, also a California 
limited liability company. Electric Generation LLC is an indirect 
wholly-owned subsidiary of PG&E Corporation, the current parent of the 
licensee. According to the application, Diablo Canyon LLC will become 
the owner of the facility, while Electric Generation LLC will operate 
and maintain DCNPP under the terms of a lease that will make Electric 
Generation LLC responsible for all costs of operation. Diablo Canyon 
LLC will be responsible for providing decommissioning funding assurance 
for DCNPP. With respect to authority to possess, use, and operate the 
facility, the conforming license amendments would remove references to 
PG&E from the licenses and add references to Electric Generation LLC 
and Diablo Canyon LLC, as appropriate, and make other administrative 
changes to reflect the proposed transfer. The application also proposed 
certain changes to the antitrust conditions attached to the licenses, 
which are discussed in more detail below.
    PG&E requested approval of the transfer of the licenses and 
conforming license amendments pursuant to 10 CFR 50.80 and 50.90. 
Notice of the request for approval and an opportunity to request a 
hearing or submit written comments was published in the Federal 
Register on January 17, 2002 (67 FR 2455). The Commission received 
petitions to intervene and requests for hearing from the following: the 
Northern California Power Agency (NCPA); the Official Committee of 
Unsecured Creditors of Pacific Gas and Electric Company (Committee); 
the California Public Utilities Commission (CPUC); the Transmission 
Agency of Northern California, M-S-R Public Power Agency, Modesto 
Irrigation District, the California Cities of Santa Clara, Redding, and 
Palo Alto, and the Trinity Public Utility District, in a joint filing 
(collectively, TANC); and the County of San Luis Obispo (County). In a 
Memorandum and Order, dated June 25, 2002 (CLI-02-16), the Commission 
denied several of the petitioners' requests for intervention and 
referred the petitions of the County and CPUC to the NRC staff as 
comments for appropriate consideration. On February 14, 2003, the 
Commission denied the remaining petitioners' requests for hearing and 
terminated the proceeding. Pacific Gas and Elec. Co. (Diablo Canyon 
Nuclear Power Plant, Units 1 and 2), CLI-03-02, 57 NRC 19 (2003).
    In CLI-03-02, the Commission addressed, among other things, the 
changes proposed in the application to the antitrust conditions 
appended to the licenses, which PG&E assumed would be carried forward 
if the licenses were transferred. These proposed changes would have 
retained PG&E as a licensee in the antitrust conditions, would have 
added a new transmission company (ETrans LLC) to the antitrust 
conditions, and would have added Electric Generation LLC (but not 
Diablo Canyon LLC) to the conditions, for the purpose of implementing 
the conditions. The Commission ruled that if the proposed license 
transfers are approved, the antitrust license conditions should not be 
included in (i.e., not remain part of) the transferred licenses. 57 NRC 
at 36. Accordingly, the conforming license amendments approved by this 
Order reflect the Commission's ruling in this regard.
    Under 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 gives its consent in writing. After 
reviewing the information submitted in the application and other 
information before the Commission, and relying upon the representations 
and agreements contained in the application, the NRC staff has 
determined that Electric Generation LLC and Diablo Canyon LLC are 
qualified to be the holders of the licenses to the extent proposed in 
the application, and that the transfer of the licenses to Electric 
Generation LLC and Diablo Canyon LLC is 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 the application for the proposed license 
amendments that reflect the transfer of authority to possess, use, and 
operate the facility and the transfer of authority concerning the 
receipt, possession, or use of nuclear material from PG&E to Electric 
Generation LLC and Diablo Canyon LLC complies with the standards and 
requirements of the Atomic Energy Act of 1954, as amended (the Act), 
and the Commission's rules and regulations set forth in 10 CFR Chapter 
I; the facility will operate in conformity with the application, the 
provisions of the Act, and the rules and regulations of the Commission; 
there is reasonable assurance that the activities authorized by the 
proposed license amendments concerning the possession, use, and 
operation of the facility and concerning the receipt, possession, or 
use of nuclear material 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; the issuance of the 
proposed license amendments concerning the possession, use, and 
operation of the facility and concerning the receipt, possession, or 
use of nuclear material will not be inimical to the common defense and 
security or the health and safety of the public; and the issuance of 
the proposed license amendments concerning the possession, use, and 
operation of the facility and concerning the receipt, possession, or 
use of nuclear material will be in accordance with 10 CFR part 51 of 
the Commission's regulations and all applicable requirements have been 
satisfied. The findings set forth above

[[Page 33209]]

are supported by the NRC staff's safety evaluation dated May 27, 2003.
    Accordingly, pursuant to sections 161b, 161i, 161o, and 184 of the 
Atomic Energy Act of 1954, as amended, 42 U.S.C. 2201(b), 2201(i), 
2201(o), and 2234; and 10 CFR 50.80, It is hereby ordered that the 
transfer of the licenses as described herein to Electric Generation LLC 
and Diablo Canyon LLC is approved, subject to the following conditions:
    (1) Before the completion of the transfer of DCNPP, Electric 
Generation LLC and Diablo Canyon LLC shall provide the Director of the 
Office of Nuclear Reactor Regulation satisfactory documentary evidence 
that Electric Generation LLC and Diablo Canyon LLC have obtained the 
appropriate amount of insurance required of licensees under 10 CFR part 
140 of the Commission's regulations.
    (2) Prior to the closing of the license transfers, all necessary 
regulatory and/or judicial approvals of the bilateral power sales 
agreement (PSA) referenced in Enclosure 7 to the November 30, 2001, 
submittal must be obtained without any material changes to the PSA that 
would adversely impact the five-year financial projections proffered in 
the application such that indicated sources of funds would not be 
sufficient to cover projected costs of operation of the facility.
    (3) On the closing date of the transfer of DCNPP, Diablo Canyon LLC 
shall obtain from PG&E all of the accumulated decommissioning trust 
funds associated with the facility, and ensure the deposit of the funds 
into a decommissioning trust(s) for DCNPP established by Diablo Canyon 
LLC. The amount of the funds must meet or exceed the minimum amount 
required for the facility pursuant to 10 CFR 50.75. In the event that 
the transfer of DCNPP occurs prior to December 24, 2003, the 
decommissioning trust agreement(s) shall be consistent with the 
provisions contained in 10 CFR 50.75(h)(1) (67 FR 78350, published 
December 24, 2002), as if such provisions are in effect at the time of 
transfer. Notwithstanding the date of the transfer, the decommissioning 
trust agreement(s) must be acceptable to the NRC.
    (4) Diablo Canyon LLC shall take all necessary steps to ensure that 
the decommissioning trust(s) is maintained in accordance with the 
application and the requirements of this Order, and consistent with the 
safety evaluation supporting this Order.
    (5) Notwithstanding the transfer of ownership of DCNPP to Diablo 
Canyon LLC, Electric Generation LLC shall at all times following the 
transfer of the DCNPP licenses to Diablo Canyon LLC and Electric 
Generation LLC be fully responsible for all costs associated with the 
possession, use, operation, maintenance, and decommissioning of DCNPP 
(including costs associated with the receipt, possession, and use of 
byproduct, source, and special nuclear material), except for 
decommissioning costs covered by the decommissioning trust funds 
transferred to Diablo Canyon LLC at the time of the license transfers. 
Diablo Canyon LLC shall be responsible for the payment of 
decommissioning costs for DCNPP at least to the extent of the 
accumulated decommissioning trust funds transferred to Diablo Canyon 
LLC and earnings associated with such funds.
    (6) Electric Generation LLC shall provide the Director of the 
Office of Nuclear Reactor Regulation a copy of any application, at the 
time it is filed, to transfer (excluding grants of security interests 
or liens) from Electric Generation LLC to its direct or indirect 
parent, or to any other affiliated company, facilities for the 
production of electric energy having a depreciated book value exceeding 
ten percent (10%) of Electric Generation LLC's consolidated net utility 
plant, as recorded on Electric Generation LLC's books of account.
    (7) After receipt of all required regulatory and judicial approvals 
of the transfer of DCNPP, PG&E shall inform the Director of the Office 
of Nuclear Reactor Regulation in writing of such receipt within 5 
business days, and of the closing date of the transfer of DCNPP no 
later than 7 business days prior to the date of closing. If the 
transfer of the licenses is not completed by May 31, 2004, this Order 
shall become null and void, provided, however, on written application 
and for good cause shown, this date may be extended in writing.
    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 license transfers are approved. The amendments 
shall be issued and made effective at the time the proposed license 
transfers are completed.
    This Order is effective upon issuance.
    For further details with respect to this Order, see the initial 
application dated November 30, 2001, and supplements thereto dated 
January 18 and May 1, 2002, and the safety evaluation dated May 27, 
2003, 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, and are accessible 
electronically through the ADAMS Public Electronic Reading Room link at 
the NRC Web site (http://www.nrc.gov).

    Dated at Rockville, Maryland, this 27th day of May 2003.

    For the Nuclear Regulatory Commission.
R. William Borchardt,
Acting Director, Office of Nuclear Reactor Regulation.
[FR Doc. 03-13866 Filed 6-2-03; 8:45 am]
BILLING CODE 7590-01-P