[Federal Register Volume 65, Number 196 (Tuesday, October 10, 2000)]
[Notices]
[Pages 60222-60223]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-25916]
=======================================================================
-----------------------------------------------------------------------
NUCLEAR REGULATORY COMMISSION
[Docket Nos. STN 50-528, STN 50-529, and STN 50-530]
Public Service Company of New Mexico (Palo Verde Nuclear
Generating Station Units 1, 2, and 3); Order Approving Application
Regarding Proposed Corporate Restructuring and Approving Conforming
Amendments
I
Public Service Company of New Mexico (PNM) holds minority ownership
interests (both owned and leased) in Palo Verde Nuclear Generating
Station (Palo Verde) Units 1, 2, and 3, and in connection therewith is
a holder of Facility Operating Licenses Nos. NPF-41, NPF-51, and NPF-74
for Palo Verde. The facility is located in Maricopa County, Arizona.
Other co-licensees for Palo Verde are Arizona Public Service Company
(APS) (owner or lessee of a 29.1 percent share of each of the three
units), Salt River Project Agricultural Improvement and Power District
(owner of a 17.49 percent share), El Paso Electric Company (owner of a
15.8 percent share), Southern California Edison Company (owner of a
15.8 percent share), Southern California Public Power Authority (owner
of a 5.91 percent share), and Los Angeles Department of Water and Power
(owner of a 5.70 percent share). APS is the licensed operator of the
Palo Verde units. The remaining licensees hold possession-only
licenses.
II
Pursuant to Section 184 of the Atomic Energy Act of 1954, as
amended, and 10 CFR 50.80, PNM filed an application dated March 3,
2000, requesting approval of the indirect transfer of the Palo Verde
licenses, to the extent held by PNM, to a new holding company, Manzano
Corporation (Manzano). Supplemental information on this application was
forwarded to the NRC by PNM's outside counsel, Shaw Pittman, in letters
dated August 14, August 17, and September 7, 2000. Manzano, presently a
subsidiary of PNM, was formed to implement the public utility
restructuring requirements of the New Mexico Electric Utility Industry
Restructuring Act of 1999. The proposed restructuring encompasses the
formation of Manzano and Manzano becoming the holding company for PNM,
the transfer by PNM of its electric and gas transmission and
distribution businesses to an affiliated company to be named ``Public
Service Company of New Mexico'' (with PNM and such affiliated company
being under common control by Manzano), and a change in PNM's name to
Manzano Energy Corporation (Manzano Energy). By application dated April
26, 2000, APS requested approval, pursuant to 10 CFR 50.90, of proposed
conforming amendments to reflect in the Palo Verde licenses the name
change of PNM to Manzano Energy Corporation that will occur in
connection with the restructuring. APS will retain its existing
ownership interest in, and remain the licensed operator of Palo Verde
after the restructuring of PNM, and is not otherwise involved in the
restructuring. Similarly, none of the other co-licensees are involved
in the restructuring of PNM. No physical changes to the facility or
operational changes are being proposed in the applications filed by PNM
and APS. Notice of the applications and an opportunity for hearing was
published in the Federal Register on May 26, 2000 (65 FR 34370). No
written comments or hearing requests were filed.
Under 10 CFR 50.80, no license shall be transferred, directly or
indirectly, through transfer of control of the license, unless the
Commission gives its consent in writing. Upon review of the information
submitted by PNM in its application, the supplements thereto, and other
information before the Commission, the NRC staff has determined that
the proposed restructuring will not affect the qualifications of PNM to
hold the licenses referenced above to the same extent now held by PNM,
and that the indirect transfer of the licenses, 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. The NRC staff has further
found that 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 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
[[Page 60223]]
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. These findings are supported by a Safety Evaluation dated
September 29, 2000.
III
Accordingly, pursuant to Sections 161b, 161i, 161o, and 184 of the
Atomic Energy Act of 1954, as amended, 42 USC 2201(b), 2201(i), 2201(o)
and 2234; and 10 CFR 50.80, it is hereby ordered That the application
regarding the proposed restructuring of PNM and indirect license
transfers is approved, subject to the following conditions:
1. Manzano Energy 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 Manzano Energy to its proposed parent, or to any other affiliated
company, facilities for the production, transmission, or distribution
of electric energy having a depreciated book value exceeding ten
percent (10%) of Manzano Energy's consolidated net utility plant, as
recorded on Manzano Energy's books of account.
2. Manzano Energy shall continue to provide decommissioning funding
assurance, to be held in its decommissioning trusts for Palo Verde
Units 1, 2, and 3, from the date of the indirect license transfers, as
represented in the respective March 3, 2000, application, as
supplemented. In addition, Manzano Energy shall ensure that contractual
arrangements with its transmission and distribution affiliate to obtain
necessary decommissioning funds for Palo Verde through non-bypassable
charges will be established and maintained until the decommissioning
trusts are fully funded.
3. Manzano Energy shall enter into an agreement with its
transmission and distribution affiliate that shall require the deposit
of funds collected for decommissioning funding from wires charges into
Manzano Energy's decommissioning trust accounts. A copy of the
agreement shall be forwarded to the NRC prior to the completion of the
proposed restructuring of PNM.
4. Manzano Energy shall take all necessary steps to ensure that its
decommissioning trusts are maintained in accordance with the March 3,
2000, application, as supplemented, and the requirements of this Order
approving the respective indirect transfers, and consistent with the
safety evaluation supporting this Order.
5. Manzano Energy shall inform the Director of the Office of
Nuclear Reactor Regulation within 30 days of approval by the New Mexico
Public Regulation Commission of the stranded cost mechanism of
recovering decommissioning costs. Within such 30-day period, Manzano
Energy shall state the total decommissioning costs subject to stranded
cost recovery and the schedule for funding decommissioning costs.
6. Manzano Energy's decommissioning trust agreements for each of
the three units shall provide that:
a. The use of assets in both the qualified and non-qualified funds
shall be limited to expenses related to decommissioning of the unit as
defined by the NRC in its regulations and issuances, and as provided in
the unit's license and any amendments thereto. However, upon completion
of decommissioning, as defined above, the assets may be used for any
purpose authorized by law.
b. Investments in the securities or other obligations of Manzano
Energy or affiliates thereof, or their successors or assigns, 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 shall be prohibited.
c. No disbursements or payments from the trust, 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. In addition, no such disbursements or payments from the trust
shall be made if the trustee receives prior written notice of objection
from the Director of the Office of Nuclear Reactor Regulation.
d. The trust agreement shall not be modified in any material
respect without 30 days prior written notification to the Director of
the Office of Nuclear Reactor Regulation.
e. The trustee, investment advisor, or anyone else directing the
investments made in the trust shall adhere to a ``prudent investor''
standard, as specified in 18 CFR 35.32(3) of the Federal Energy
Regulatory Commission's regulations.
It is further ordered That, consistent with 10 CFR 2.1315(b),
license amendments as indicated in Enclosure 2 to the cover letter
forwarding this Order to reflect the subject restructuring action and
conditions of this Order are approved. The amendments shall be issued
and made effective at the time the proposed restructuring action is
completed.
This Order is effective upon issuance.
For further details with respect to this action, see the initial
application dated March 3, 2000, supplemental application and
submittals dated April 26, August 14, August 17, and September 7, 2000,
and the Safety Evaluation dated September 29, 2000, 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 accessible electronically through the ADAMS
Public Electronic Reading Room link at the NRC Web site (http://www.nrc.gov).
Dated at Rockville, Maryland, this 29th day of September 2000.
For the Nuclear Regulatory Commission.
Samuel J. Collins,
Director, Office of Nuclear Reactor Regulation.
[FR Doc. 00-25916 Filed 10-6-00; 8:45 am]
BILLING CODE 7590-01-U