[Federal Register Volume 70, Number 223 (Monday, November 21, 2005)]
[Notices]
[Pages 70107-70109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-6394]


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NUCLEAR REGULATORY COMMISSION

[Docket Nos. 50-334 and 50-412, License Nos. DPR-66 and NPF-73; Docket 
No. 50-346, License No. NPF-3; Docket No. 50-440, License No. NPF-58]


In The Matter of Pennsylvania Power Company; Ohio Edison Company; 
OES Nuclear, Inc.; The Cleveland Electric Illuminating Company; the 
Toledo Edison Company; Firstenergy Nuclear Operating Company; Beaver 
Valley Power Station, Units 1 and 2; Davis-Besse Nuclear Power Station, 
Unit 1; Perry Nuclear Power Plant, Unit 1; Order Approving Transfer of 
Licenses and Conforming Amendments

I.

    FirstEnergy Nuclear Operating Company (FENOC) and Pennsylvania 
Power Company (Penn Power), Ohio Edison Company (Ohio Edison), OES 
Nuclear, Inc. (OES Nuclear), the Cleveland Electric Illuminating 
Company (Cleveland Electric), and the Toledo Edison Company (Toledo 
Edison), are holders of Facility Operating License Nos. DPR-66, NPF-73, 
NPF-3 and NPF-58, which authorize the possession, use, and operation of 
Beaver Valley Power Station, Units 1 (BVPS 1) and 2 (BVPS 2; together 
with BVPS 1, BVPS), Davis-Besse Nuclear Power Station, Unit 1 (Davis-
Besse), and Perry Nuclear Power Plant, Unit 1 (Perry), respectively. 
FENOC is licensed by the U.S. Nuclear Regulatory Commission (NRC, the 
Commission) to operate BVPS, Davis-Besse, and Perry (the facilities). 
The facilities are located at the licensees' sites in Beaver County, 
Pennsylvania, Ottawa County, Ohio, and Lake County, Ohio, respectively.

II.

    By letter dated May 18, 2005, FENOC submitted an application 
requesting approval of direct license transfers that would be necessary 
in connection with the following proposed transfers to FirstEnergy 
Nuclear Generation Corp. (FENGenCo), a new nuclear generation 
subsidiary of FirstEnergy: Penn Power's 65-percent undivided ownership 
interest in BVPS 1, 13.74-percent undivided ownership interest in BVPS 
2, and 5.25-percent undivided ownership interest in Perry.
    By letter dated June 1, 2005, FENOC submitted a second application 
requesting approval of direct license transfers that would be necessary 
in connection with the following proposed transfers to FENGenCo: Ohio 
Edison's 35-percent undivided ownership interest in BVPS 1 and 20.22-
percent undivided ownership interest in BVPS 2; OES Nuclear's 17.42-
percent undivided ownership interest in Perry; Cleveland Electric's 
24.47-percent undivided ownership interest in BVPS 2, 44.85-percent 
undivided ownership interest in Perry, and 51.38-percent undivided 
ownership interest in Davis-Besse; and, Toledo Edison's 1.65-percent 
undivided ownership interest in BVPS 2, 19.91-percent undivided 
ownership interest in Perry, and 48.62-percent undivided ownership 
interest in Davis-Besse.
    Supplemental information was provided by letters dated July 15 and 
October 31, 2005, (hereinafter, the May 18 and June 1, 2005, 
applications and supplemental information will be referred to 
collectively as the ``applications''). FENOC also requested approval of 
conforming license amendments that would reflect the proposed transfer 
of ownership of Penn Power's interests in BVPS and Perry to FENGenCo; 
delete the references to Penn Power in the licenses; authorize FENGenCo 
to possess the respective ownership interests in BVPS and Perry; 
reflect the proposed transfer of ownership interests in BVPS, Davis-
Besse, and Perry from Ohio Edison, OES Nuclear, Cleveland Electric, and 
Toledo Edison (Ohio Companies) to FENGenCo; delete the Ohio Companies 
from the licenses; and, authorize FENGenCo to possess the respective 
ownership interests in BVPS, Davis-Besse, and Perry being transferred 
by the Ohio Companies. Ohio Edison's 21.66-percent leased interest in 
BVPS 2, Toledo Edison's 18.26-percent leased interest in BVPS 2, and 
Ohio Edison's 12.58-percent leased interest in Perry would not be 
changed. No physical changes to the facilities or operational changes 
were proposed in the applications. After completion of the proposed 
transfers, FENGenCo and, to a limited extent, Ohio Edison and Toledo 
Edison, would

[[Page 70108]]

be the sole owners of the facilities; the role of FENOC would be 
unchanged.
    Approval of the transfer of the facility operating licenses and 
conforming license amendments is requested by FENOC pursuant to 
Sections 50.80 and 50.90 of Title 10 of the Code of Federal Regulations 
(10 CFR). Notices of the requests for approval and opportunity for a 
hearing were published in the Federal Register on August 2, 2005 (70 FR 
44390-44395). No comments were received. Two petitions for leave to 
intervene pursuant to 10 CFR 2.309 were received on August 22, 2005, 
from the City of Cleveland, Ohio, and American Municipal Power-Ohio, 
Inc. A joint motion to lodge by the City of Cleveland, Ohio and 
Municipal Power Ohio, Inc., was received on September 12, 2006. The 
petitions and motion are under consideration by the Commission.
    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. Upon review of the information 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 FENGenCo is qualified to hold the ownership interests 
in the facilities previously held by Penn Power and the Ohio Companies, 
and that the transfers of undivided ownership interests in the 
facilities to FENGenCo described in the applications 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 the applications for the proposed 
license amendments comply 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 facilities 
will operate in conformity with the applications, 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 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 will not be inimical to the common defense 
and security or to the health and safety of the public; and 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 findings set forth above are supported by an NRC safety 
evaluation dated November 15, 2005.

III.

    Accordingly, pursuant to Sections 161b, 161i, and 184 of the Act, 
42 U.S.C. Sec. Sec.  2201(b), 2201(i), and 2234; and 10 CFR 50.80, it 
is hereby ordered that the direct transfers of the licenses, as 
described herein, to FENGenCo are approved, subject to the following 
conditions:

    (1) On the closing date(s) of the transfers to FENGenCo of their 
interests in BVPS 1, BVPS 2, Davis-Besse, and Perry, Penn Power, 
Cleveland Electric, Ohio Edison, OES Nuclear, and Toledo Edison 
shall transfer to FENGenCo all of each transferor's respective 
accumulated decommissioning funds for BVPS 1, BVPS 2, Davis-Besse, 
and Perry, except for funds associated with the leased portions of 
Perry and BVPS 2, and tender to FENGenCo additional amounts equal to 
remaining funds expected to be collected in 2005, as represented in 
the application dated June 1, 2005, but not yet collected by the 
time of closing. All of the funds shall be deposited in separate 
external trust funds for each of these four reactors in the same 
amounts as received with respect to each unit to be segregated from 
other assets of FENGenCo and outside its administrative control, as 
required by NRC regulations, and FENGenCo shall take all necessary 
steps to ensure that these external trust funds are maintained in 
accordance with the requirements of the order approving the transfer 
of the licenses and consistent with the safety evaluation supporting 
the order and in accordance with the requirements of 10 CFR Section 
50.75, ``Reporting and recordkeeping for decommissioning planning.''
    (2) By the date of closing of the transfer of the ownership 
interests in BVPS 1, BVPS 2, and Perry, from Penn Power to FENGenCo, 
FENGenCo shall obtain a parent company guarantee from FirstEnergy in 
an initial amount of at least $80 million (in 2005 dollars) to 
provide additional decommissioning funding assurance regarding such 
ownership interests. Required funding levels shall be recalculated 
annually and, as necessary, FENGenCo shall either obtain appropriate 
adjustments to the parent company guarantee or otherwise provide any 
additional decommissioning funding assurance necessary for FENGenCo 
to meet NRC requirements under 10 CFR 50.75.
    (3) The Support Agreements described in the applications dated 
May 18, 2005 (up to $80 million), and June 1, 2005 (up to $400 
million), shall be effective consistent with the representations 
contained in the applications. FENGenCo shall take no action to 
cause FirstEnergy, or its successors and assigns, to void, cancel, 
or modify the Support Agreements without the prior written consent 
of the NRC staff, except, however, the $80 million Support Agreement 
in connection with the transfer of the Penn Power interests may be 
revoked or rescinded if and when the $400 million support agreement 
described in the June 1, 2005 application becomes effective. 
FENGenCo shall inform the Director of the Office of Nuclear Reactor 
Regulation, in writing, no later than 10 days after any funds are 
provided to FENGenCo by FirstEnergy under either Support Agreement.

    (4) Prior to completion of the transfers of the licenses, FENGenCo 
shall provide the Director of the Office of Nuclear Reactor Regulation 
satisfactory documentary evidence that it has obtained the appropriate 
amount of insurance required of licensees under 10 CFR Part 140 of the 
Commission's regulations.
    (5) It is further ordered that, consistent with 10 CFR 2.1315(b), 
license amendments that make changes, as indicated in Enclosures 2 
through 5 to the cover letter forwarding this Order, to conform the 
licenses to reflect the subject direct license transfers are approved. 
FirstEnergy has indicated that the Pennsylvania transfers described in 
the May 18, 2005, application and the Ohio transfers described in the 
June 1, 2005, application, will take place at the same time. The 
amendments shall be issued and made effective at the time the proposed 
direct license transfers are completed.
    It is further ordered that FENOC shall inform the Director of the 
Office of Nuclear Reactor Regulation in writing of the date of closing 
of the transfer of the Penn Power, Cleveland Electric, Ohio Edison, OES 
Nuclear, and Toledo Edison interests in BVPS 1, BVPS 2, Davis-Besse, 
and Perry no later than 5 business days prior to closing. Should the 
transfer of the licenses not be completed by December 31, 2006, this 
Order shall become null and void, provided; however, that upon written 
application and for good cause shown, such date may be extended by 
order.
    This Order is effective upon issuance.
    For further details with respect to this Order, see the initial 
applications dated May 18 and June 1, 2005, as supplemented by letters 
dated July 15 and October 31, 2005, and the non-proprietary safety 
evaluation dated November 15, 2005, which are available for public 
inspection at the Commission's Public Document Room (PDR), located at 
One White Flint North, Public File Area 01 F21, 11555 Rockville Pike 
(first floor), Rockville, Maryland and accessible electronically from 
the Agencywide Documents Access and Management System (ADAMS) Public 
Electronic Reading Room on the Internet at the NRC Web site, http://
www.nrc.gov/reading-rm/

[[Page 70109]]

adams.html. Persons who do not have access to ADAMS or who encounter 
problems in accessing the documents located in ADAMS, should contact 
the NRC PDR Reference staff by telephone at 1-800-397-4209, 301-415-
4737, or by e-mail to [email protected].

    Dated at Rockville, Maryland, this 15 day of November 2005.

    For the Nuclear Regulatory Commission.
J.E. Dyer,
Director, Office of Nuclear Reactor Regulation.
 [FR Doc. E5-6394 Filed 11-18-05; 8:45 am]
BILLING CODE 7590-01-P