[Federal Register Volume 77, Number 37 (Friday, February 24, 2012)]
[Notices]
[Pages 11165-11167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-4323]


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NUCLEAR REGULATORY COMMISSION

[NRC-2011-0157]


Order Approving Application Regarding Proposed Corporate Merger 
and Indirect Transfer of Licenses

[[Page 11166]]



In the Matter of
    EXELON CORPORATION.
    CONSTELLATION ENERGY GROUP, INC.
    CALVERT CLIFFS NUCLEAR POWER PLANT,
     LLC.
    Calvert Cliffs Nuclear Power Plant,   Docket Nos. 50-317 and 50-318.
     Units 1 and 2.                       License Nos. DPR-53 and DPR-69.
    Calvert Cliffs Independent Spent      Docket No. 72-8.
     Fuel Storage Installation.           Materials License No. SNM-2505.
 

I

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

II

    By letter dated May 12, 2011, as supplemented on June 17, August 
12, October 13, November 10, November 11, November 18, and November 22, 
2011, and January 19, and January 25, 2012 (collectively, the 
application), Exelon Generation Company, LLC (Exelon Generation), 
acting on behalf of itself, Exelon Corporation (Exelon), and Exelon 
Ventures Company, LLC (Exelon Ventures), and Constellation Energy 
Nuclear Group, LLC (CENG), acting on behalf of itself, and the 
licensee, requested that the U.S. Nuclear Regulatory Commission (NRC, 
the Commission), pursuant to Title 10 of the Code of Federal 
Regulations (10 CFR) 50.80 and 10 CFR 72.50, consent to the proposed 
indirect license transfer of Renewed Facility Operating License Nos. 
DPR-53 and DPR-69 and Materials License No. SNM-2505, that would be 
effected by the indirect transfer of control of the ownership and 
operating interests in CCNPP, LLC. The transfers being sought are a 
result of the proposed merger between Exelon and one of CENG's parent 
companies, Constellation Energy Group, Inc. (CEG), whereby CEG would be 
merged into Exelon and ownership of CEG's 50.01 percent of CENG would 
be transferred to Exelon. The remaining 49.99 percent ownership of CENG 
is held by EDF, Inc.
    The licensee is a direct wholly owned subsidiary of Constellation 
Nuclear Power Plants, LLC, which, in turn, is a direct wholly owned 
subsidiary of CENG.
    The proposed merger will be accomplished in several steps and the 
involvement of the following entities: CEG, Exelon, Exelon Generation, 
Exelon Ventures, Bolt Acquisition Corporation (Bolt) (an Exelon 
subsidiary formed for the sole purpose of merging with CEG), and 
Constellation Nuclear, LLC (CNL) (a wholly owned subsidiary of CEG and 
intermediate parent company of CCNPP, LLC). Following the closing of 
the transfers, Exelon will be the ultimate parent company of CNL, CENG, 
and the licensee.
    Exelon Ventures and Bolt are direct wholly owned subsidiaries of 
Exelon. Exelon Generation is a direct wholly owned subsidiary of Exelon 
Ventures. First, the acquisition of CEG by Exelon will be effected by 
the merger of Bolt with and into CEG, with CEG being the surviving 
corporation. As a result of the merger, CEG will be a direct wholly 
owned subsidiary of Exelon, and former CEG shareholders will become 
shareholders of Exelon. Immediately after the merger, CEG will 
distribute to Exelon, as a dividend, 100 percent of the equity 
interests of several companies unrelated to CEG's nuclear and other 
generation business, including Baltimore Gas and Electric Company. 
Second, and concurrent with the distribution of CEG's equity interests 
in RF HoldCo LLC (the holding company for Baltimore Gas and Electric 
Company), CEG will merge into Exelon, resulting in the termination of 
CEG's corporate existence. Exelon will then contribute 100 percent of 
its equity interest in CEG to Exelon Ventures, which, in turn, will 
contribute the equity interest to Exelon Generation, resulting in CEG 
becoming a direct wholly owned subsidiary of Exelon Generation. CEG 
will then cease to exist, making CNL a direct wholly owned subsidiary 
of Exelon Generation. Exelon will indirectly own 100 percent of CNL 
through its wholly owned subsidiary, Exelon Generation.\1\
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    \1\ See Revised Figure 3, ``Post-Transaction Final 
Organization,'' from letter dated November 11, 2011.
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    CNL, through wholly owned subsidiaries, has a 50.01 percent 
ownership interest in CENG; EDF Inc. has a 49.99 percent ownership 
interest in CENG. EDF Inc. is a U.S. corporation organized under the 
laws of the State of Delaware and is a wholly owned subsidiary of 
E.D.F. International SAS, a limited company organized under the laws of 
France, which is, in turn, a wholly owned subsidiary of 
Electricit[eacute] de France SA, a French limited company. As a result 
of the merger, CNL, as a direct subsidiary of Exelon Generation, will 
continue to indirectly hold a 50.01 percent ownership interest in CENG; 
EDF Inc. will continue to have a 49.99 percent ownership interest in 
CENG. EDF Inc.'s 49.99 percent ownership interest in CENG is unaffected 
by the merger of Exelon and CEG and associated indirect license 
transfers.
    No physical changes to the facilities or operational changes are 
being proposed in the application.
    Notice of the request for approval and opportunity for a hearing 
was published in the Federal Register on July 7, 2011 (76 FR 39908). No 
comments or hearing requests were received.
    Pursuant to 10 CFR 50.80(a) and 10 CFR 72.50, 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 as supplemented and other information before the 
Commission, and relying upon the representations and agreements in the 
application, the NRC staff has determined that the proposed indirect 
transfer of control of the subject licenses held by the licensee to the 
extent such will result from the proposed merger of CEG and Exelon, as 
described in the application, will not affect the qualifications of the 
licensee to hold the respective licenses and is otherwise consistent 
with the applicable provisions of law, regulations, and Orders issued 
by the NRC pursuant thereto, subject to the conditions set forth below.
    The findings set forth above are supported by a safety evaluation 
(SE) dated February 15, 2012.

III

    Accordingly, pursuant to Sections 161b, 161i, 161o, and 184 of the 
Atomic Energy Act of 1954, as amended (the

[[Page 11167]]

Act), 42 U.S.C. Sections 2201(b), 2201(i), 2201(o), and 2234; and 10 
CFR 50.80, it is hereby ordered that the application regarding the 
indirect license transfers related to the proposed corporate merger, as 
described herein, is approved, subject to the following conditions:
    1. All conditions contained in the ``Order Superseding Order of 
October 9, 2009, Approving Application Regarding Proposed Corporate 
Restructuring and Approving Conforming Amendments,'' dated October 30, 
2009, concerning the corporate restructuring of CENG and associated 
indirect and direct transfers of control of the operating licenses held 
by CCNPP, LLC, shall remain in full force and effect and are 
incorporated herein as if fully set forth, except as they are amended 
herein.
    2. The Nuclear Advisory Committee of Constellation Energy Nuclear 
Group, LLC, shall prepare an Annual Report regarding the status of 
foreign ownership, control, or domination of the licensed activities of 
power reactors under the control, in whole or part, of Constellation 
Energy Nuclear Group, LLC. The Report shall be submitted to the NRC 
within 30 days of completion of the Nuclear Advisory Committee Report, 
or by January 31 of each year (whichever occurs first). No action shall 
be taken by Constellation Energy Nuclear Group, LLC, or any entity to 
cause Constellation Nuclear, LLC, Exelon Generation, LLC, or their 
parent companies, subsidiaries or successors to modify the Nuclear 
Advisory Committee Report before submittal to the NRC. The Report shall 
be made available to the public, with the potential exception of 
information that meets the requirements for withholding such 
information from public disclosure under the regulations of 10 CFR 
2.390, ``Public Inspections, Exemptions, Requests for Withholding.''
    3. Records of all votes by EDF Inc., or its representatives, on the 
Constellation Energy Nuclear Group, LLC, Board of Directors and the use 
of the Chairman's casting vote will be sent to the Nuclear Advisory 
Committee and shall be reviewed by the Nuclear Advisory Committee to 
ensure that no foreign interests have exercised foreign ownership, 
control, or domination over the licensed activities of Calvert Cliffs 
Nuclear Power Plant, Units 1 and 2, and the Calvert Cliffs ISFSI, and 
that no action taken by a foreign interest involved with licensed 
activities is inimical to the common defense and security. The results 
of the Nuclear Advisory Committee's review shall be summarized in the 
Nuclear Advisory Committee Report and shall include discussions of any 
use of the Chairman's casting vote, determinations whether an exercise 
of foreign ownership, control, or domination has occurred, or that 
foreign involvement with licensed activities was inimical to the common 
defense and security.
    4. Exelon Generation, LLC shall enter into the $205 million Support 
Agreement for Constellation Energy Nuclear Group, LLC, as described in 
the November 11, 2011, supplement to the May 12, 2011, indirect license 
transfer application, no later than the time the proposed transactions 
and indirect license transfers occur. The Exelon Generation, LLC, 
Support Agreement shall supersede the Support Agreement provided by 
Constellation Energy Group, Inc., and shall be consistent with the 
representations contained in the application. Constellation Energy 
Nuclear Group, LLC, shall take no action to cause Exelon Generation, 
LLC, or its successors and assigns, to void, cancel, or materially 
modify the Support Agreement or cause it to fail to perform, or impair 
its performance under the Support Agreement, without the prior written 
consent of the NRC. The Support Agreement may not be amended or 
modified without 30 days prior written notice to the Director of the 
Office of Nuclear Reactor Regulation or his designee. An executed copy 
of the Support Agreement shall be submitted to the NRC no later than 30 
days after the completion of the proposed merger and the indirect 
license transfers. Constellation Energy Nuclear Group, LLC, shall 
inform the NRC in writing no later than 10 days after any funds are 
provided to Constellation Energy Nuclear Group, LLC, or any of the 
licensees by Exelon Generation, LLC, under the Support Agreement.
    5. Upon consummation of the merger, Constellation Energy Nuclear 
Group, LLC, shall submit to the NRC, the amended and restated 
Constellation Energy Nuclear Group, LLC, Operating Agreement, 
reflecting the terms set forth in the Settlement Agreement, including 
the proposed revisions provided in the January 25, 2012, supplement to 
the application. The amended and restated Operating Agreement may not 
be modified in any respect concerning decisionmaking authority over 
nuclear safety, security, and reliability without the prior written 
consent of the Director, Office of Nuclear Reactor Regulation.
    6. Should the proposed corporate merger not be completed within 1 
year from the date of this Order, this Order shall become null and 
void, provided, however, upon written application and good cause shown, 
such date may be extended by Order.
    It is further ordered that, after receipt of all required 
regulatory approvals of the proposed indirect transfer action, Exelon 
Generation shall inform the Director of the Office of Nuclear Reactor 
Regulation in writing of the date of the closing of the corporate 
merger of Exelon and CEG.
    This Order is effective upon issuance.
    For further details with respect to this Order, see the initial 
application dated May 12, 2011 (Agencywide Documents Access and 
Management System Accession No. ML11138A159), as supplemented by 
letters dated June 17 (ML11173A067), August 3 (ML112150519), August 12 
(ML11234A062), October 13 (ML113050083), November 10 (ML11335A024), 
November 11 (ML113180265), November 18 (ML11325A258), and November 22, 
2011 (ML113260456), and January 19 (ML12019A0346), and January 25, 2012 
(ML12032A153), and the SE dated February 15, 2012, 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, MD. Publicly available 
documents created or received at the NRC are accessible electronically 
through ADAMS in the NRC Library at http://www.nrc.gov/reading-rm/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 or 301-415-
4737, or by email to [email protected].

    Dated at Rockville, Maryland, this 15th day of February 2012.

    For the Nuclear Regulatory Commission.
Michele G. Evans,
Director, Division of Operating Reactor Licensing, Office of Nuclear 
Reactor Regulation.
Catherine Haney,
Director, Office of Nuclear Material Safety and Safeguards.
[FR Doc. 2012-4323 Filed 2-23-12; 8:45 am]
BILLING CODE 7590-01-P