letter requesting that nrc consent to transfer of non ... · the closing on the ownership transfers...

December 21, 1999

Docket Nos. 50-277 & 50-278

BY FEDERAL EXPRESS

U.S. Nuclear Regulatory Commission Attn: Samuel J. Collins, Director, Office of Nuclear Reactor Regulation Mail Stop 0-5, E7 One White Flint North 11555 Rockville Pike Rockville, MD 20852-2738

Re: Peach Bottom Atomic Power Station, Units 2 & 3 Facility Operating License Nos. DPR-44 & DPR-56 Application for NRC Approval of License Transfers and Conforming License Amendments

Dear Mr. Collins:

Pursuant to Section 184 of the Atomic Energy Act of 1954, as amended (the "Act") and 10 CFR § 50.80, PECO Energy Company ("PECO"), Public Service Electric and Gas Company ("PSE&G"), PSEG Nuclear LLC ("PSEG Nuclear"), Atlantic City Electric Company ("ACE"), and Delmarva Power & Light Company ("DP&L") (collectively the "Parties") hereby request that the Nuclear Regulatory Commission ("NRC") consent to the transfer of the non-operating ownership interests of ACE and DP&L in the Peach Bottom Atomic Power Station, Units 2 and 3 ("Peach Bottom 2 & 3" or "the Peach Bottom Units") to PECO and PSEG Nuclear, and approve the conforming amendments to the operating licenses for Peach Bottom 2 & 3 to reflect the ownership transfers.!

1 On July 1, 1999, as supplemented on July 23, 1999, PECO and PSE&G applied to the NRC for consent to transfer PSE&G's existing 42.49% undivided ownership interests in the Peach Bottom Units to PSEG Nuclear as part of PSE&G's corporate restructuring. That restructuring has not yet been completed, and the NRC's approval of that transfer and the issuance of conforming administrative license amendments reflecting that transfer are pending.

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On September 27, 1999, the Parties executed Purchase Agreements under which ACE and DP&L agreed to transfer their Peach Bottom 2 & 3 ownership interests and decommissioning funds for these units to PECO and PSEG Power LLC, an affiliate of PSE&G and the parent of PSEG Nuclear. PSEG Power LLC will assign its right to purchase the ACE and DP&L interests, or will transfer the interests obtained from ACE and DP&L to PSEG Nuclear. After the transfer, PECO will continue to operate the Peach Bottom Units and PECO and PSEG Nuclear will separately possess 50 % undivided ownership interests in Peach Bottom 2 & 3, and one half of the ACE and DP&L decommissioning funds for these units. Additional details concerning the proposed transfers, including information pursuant to 10 CFR §§ 50.80, 50.90 and 50.33 is provided in the attached Application for NRC Approval of License Transfers and Conforming License Amendments.

As demonstrated in the Application, the proposed transfers and conforming administrative license amendments will not be inimical to the common defense and security or result in any undue risk to public health and safety and will be consistent with the requirements set forth in the Act, NRC regulations, and relevant NRC licenses and orders.

The closing on the ownership transfers is scheduled for March 31, 2000. The Parties anticipate that the transfer of the ACE and DP&L interests in the Peach Bottom Units will proceed to closing before the expected closing date of the PECO/Unicom merger. The Parties, therefore, respectfully request that the NRC process the present license transfer request as provided, and evaluate any issues associated with the PECO/Unicom merger in its review of the license transfer application(s) that will be submitted in connection with that transaction.

Accordingly, the Parties respectfully request that the NRC review this transfer request on a schedule that will permit the issuance of NRC consent to the license transfers, and approval of the conforming administrative license amendments, as promptly as possible, and in any event before March 15, 2000. The Parties also request that NRC's consent to the transfer of ACE and DP&L's interests in Peach Bottom 2 & 3 to PECO and PSEG Nuclear be effective upon issuance of the NRC's Order, and that it grant consent for the transfer to take place at any time for one year from the date of the issuance of the Order, or such later date as may be permitted by the NRC. If the NRC requires additional information concerning this Application, please contact Paul J. Zaffuts, counsel for PECO Energy Company, address: Morgan, Lewis & Bockius, 1800 M Street, N.W., Washington, DC 20036, phone: (202) 467-7537, E-mail: [email protected].

In the event that the transactions transferring ACE's and DP&L's ownership interests in the Peach Bottom Units to PSEG Nuclear close before the PSE&G restructuring is completed, the Parties request that the NRC consent to the transfer of these interests to PSEG Nuclear as discussed in the enclosed application, or to PSE&G pending the finalization of the PSE&G restructuring, at which time these interests will be transferred to PSEG Nuclear. As an existing electric utility non-operating licensee of the Peach Bottom Units, PSE&G is, and will remain, technically and financially qualified to hold these additional ownership interests in the Peach Bottom Units. If PSE&G's corporate restructuring is completed prior to the NRC's consent to the transfer of ACE's and DP&L's ownership interests, then the Parties request that the NRC consent to the transfer of those interests directly to PSEG Nuclear.

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Service upon the applicants of comments, hearing requests, intervention petitions, or other pleadings, if applicable, should be made to the undersigned counsel.

Sincerely,

Paul J. • .isq.

Morgan, Lewis & Bockius, LLP 1800 M Street, N.W. Washington, DC 20036-5869 (202) 467-7537 [email protected] Counsel for PECO Energy Company

44q. H. O'Neill, Jr., ]Esq. ý/

,latias F. Travieso-Diaz, Esq. Shaw Pittman 2300 N Street, N.W. Washington DC 20037-1128 (202) 663-8148 john.o'[email protected] Counsel for Atlantic City Electric Company and Delmarva Power & Light Company

Attachment: (1) Application

David A. Repka, Esq. Winston & Strawn 1400 L Street, N.W. Washington, DC 20005-3502 (202) 371-5726 [email protected] Counsel for Public Service Electric & Gas

Company and PSEG Nuclear LLC

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cc: U. S. Nuclear Regulatory Commission Attention: Document Control Desk Washington, D. C. 20555 (original and 2 copies)

H. J. Miller Administrator-Region 1 NRC 475 Allendale Road King of Prussia, PA 19406

M. C. Thadani Peach Bottom Units 2 & 3 Project Manager NRC, Mail Code 14E21

A. C. McMurtray NRC Resident Inspector, Peach Bottom Units 2 & 3 NRC Resident Office, V-690 PBAPS 1848 Lay Road Delta, PA 17314

R. R. Janati, Director PA BRP P. 0. Box 2063 Harrisburg, PA 17120

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UNITED STATES OF AMERICA BEFORE THE

NUCLEAR REGULATORY COMMISSION

In the Matter of

PECO Energy Company,

Public Service Electric & Gas Company

PSEG Nuclear LLC

Atlantic City Electric Company

And

Delmarva Power & Light Company

(Peach Bottom Station, Units 2 & 3)

Docket Nos. 50-277 & 50-278

APPLICATION FOR NRC APPROVAL OF LICENSE TRANSFERS AND CONFORMING ADMINISTRATIVE LICENSE AMENDMENTS

(NRC FACILITY OPERATING LICENSE NOS. DPR-44 & DPR-56)

U.S. Nuclear Regulatory Commission Docket Nos. 50-277 & 50-278

LIST OF ENCLOSURES

Enclosure 1

Enclosure 2

Enclosure 3

Enclosure 4

Enclosure 5

Enclosure 6

Enclosure 7

Marked-up Pages of the Peach Bottom Atomic Power Station Units 2 & 3 Licenses Reflecting Conforming Administrative License Amendments Associated With Proposed Transfer of Facilities to PECO Energy Company and PSEG Nuclear LLC.

No Significant Hazards Consideration Determination for Conforming Administrative License Amendments Associated With Proposed Transfer of the Peach Bottom Atomic Power Station Units 2 & 3 Licenses to PECO Energy Company and PSEG Nuclear LLC.

Calculation of NRC Formula Amount for Decommissioning Funding Financial Assurance for the Peach Bottom Atomic Power Station Units 2 & 3 (10 CFR § 50.75(c))

Projections of Earnings Credit on the Combined Decommissioning Funds of Atlantic City Electric Company and Delmarva Electric & Gas Company for the Peach Bottom Atomic Power Station Units 2 & 3 Using 2% Annual Real Rate of Return.

Affirmation of Joseph J. Hagan (PECO Energy Company)

Affirmation of Mark B. Bezilla (PSEG Nuclear LLC, Public Service Electric and Gas Company)

Affirmation of Thomas S. Shaw (Atlantic City Electric Company, Delmarva Power & Light Company)

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REFERENCES

The following documents are incorporated by reference into this Application:

1. Application for Consent to the Transfer of PSE&G's Interests in Facility Operating Licenses Nos. DPR-44 and DPR-56 for the Peach Bottom Atomic Power Station, Units 2 & 3, to PSEG Nuclear LLC, dated July 1, 1999, as supplemented, July 23, 1999.

2. Application for Consent to Transfer PSE&G's Ownership Interests in Facility Operating Licenses Nos. DPR-70 and DPR-75 for the Salem Generating Station, Units 1 and 2 and Facility Operating License No. NPF-57 for the Hope Creek Generating Station to PSEG Nuclear LLC, dated June 4, 1999.

3. Request for Consent to Transfer Minority Ownership Interests in Facility Operating Licenses Nos. DPR-70 and DPR-75 for the Salem Generating Station, Units 1 and 2, and Facility Operating License No. NPF-57 for the Hope Creek Generating Station, to PSEG Nuclear LLC, dated December 20, 1999.

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APPLICATION FOR NRC APPROVAL OF LICENSE TRANSFERS AND CONFORMING ADMINISTRATIVE LICENSE AMENDMENTS

(NRC FACILITY OPERATING LICENSE NOS. DPR-44 & DPR-56)

I. INTRODUCTION

PECO Energy Company ("PECO Energy"), Public Service Electric & Gas Company ("PSE&G"), PSEG Nuclear LLC ("PSEG Nuclear"), Atlantic City Electric Company ("ACE"), and Delmarva Power & Light Company ("DP&L") (collectively, "the Parties") submit the following application ("Application") pursuant to 10 CFR § 50.80, to the Nuclear Regulatory Commission ("NRC") for its approval of the transfer of the minority, non-operating ownership interests of ACE and DP&L in the Peach Bottom Atomic Power Station, Units 2 and 3 ("Peach Bottom 2 & 3" or "the Peach Bottom Units"), Facility Operating License Nos. DPR-44 and DPR-56 to PECO Energy and PSEG Nuclear.1 These transfers will result in no physical change to either Peach Bottom Unit or to either Unit's operation. After the transfers, both Units will continue to be operated by PECO Energy.2

PECO Energy currently holds a 42.49 % undivided ownership interest in, and is the licensed operator of, Peach Bottom 2 & 3. PSEG Nuclear holds a 42.49 % undivided interest in Peach Bottom 2 & 3. ACE and DP&L each hold a 7.51 % undivided interest in Peach Bottom 2 & 3.

On September 27, 1999, PECO Energy and PSEG Power LLC, the parent of PSEG Nuclear, executed purchase agreements ("Purchase Agreements") with ACE and DP&L.3

Under the first agreement, PECO Energy and PSEG Nuclear purchased ACE's 7.51 %

1 On July 1, 1999, as supplemented on July 23, 1999, PECO and PSE&G applied to the NRC for consent to transfer PSE&G's existing 42.49% undivided ownership interests in the Peach Bottom Units to PSEG Nuclear as part of PSE&G's corporate restructuring. See Reference 1. That restructuring has not yet been completed, and the NRC's approval of that transfer and the issuance of conforming administrative license amendments reflecting that transfer are pending. In the event that the transactions transferring ACE's and DP&L's ownership interests in the Peach Bottom Units to PSEG Nuclear close before the PSE&G restructuring is completed, the Parties request that the NRC consent to the transfer of these interests to PSEG Nuclear as discussed in the enclosed application, or to PSE&G pending the finalization of the PSE&G restructuring, at which time these interests will be transferred to PSEG Nuclear. As an existing electric utility non-operating licensee of the Peach Bottom Units, PSE&G is, and will remain, technically and financially qualified to hold these additional ownership interests in the Peach Bottom Units. If PSE&G's corporate restructuring is completed prior to the NRC's consent to the transfer of ACE's and DP&L's ownership interests, then the Parties request that the NRC consent to the transfer of those interests directly to PSEG Nuclear.

2 ACE and DP&L also currently own interests in the Salem Generating Station and ACE owns an interest in the Hope Creek Generating Station. The transfer of these interests to PSEG Nuclear will be addressed in a separate application to the NRC which the Parties incorporate by reference as Reference 3.

3 PSEG Power will assign its right to purchase ACE's and DP&L's ownership interests in Peach Bottom 2 & 3 to PSEG Nuclear, or it will transfer the ownership interests to PSEG Nuclear upon completion of the transaction with ACE and DP&L. Accordingly, this Application will refer to PSEG Nuclear, not PSEG Power LLC when discussing the Purchase Agreements.


ownership interest in Peach Bottom 2 & 3. Under the second agreement, PECO Energy and PSEG Nuclear purchased DP&L's 7.51 % ownership interest in Peach Bottom 2 & 3.

The following summarizes the Purchase Agreements' pertinent terms:

(a) ACE will transfer one-half of its 7.51 % ownership interest4 in Peach Bottom 2 & 3 to PECO Energy and one-half of its 7.51 % ownership interest in Peach Bottom 2 & 3 to PSEG Nuclear.

(b) DP&L will transfer one-half of its 7.51 % ownership interest in Peach Bottom 2 & 3 to PECO Energy and one-half of its 7.51 % ownership interest in Peach Bottom 2 & 3 to PSEG Nuclear.

(c) PECO Energy and PSEG Nuclear will each assume one-half of ACE's and DP&L's financial responsibility for the operation, maintenance, and eventual decommissioning of both Peach Bottom Units.

(d) ACE and DP&L will transfer one-half of the funds in their decommissioning trusts for Peach Bottom 2 & 3 to the PECO Energy decommissioning trusts and one-half of the funds in their decommissioning trusts for Peach Bottom 2 & 3 to the PSEG Nuclear decommissioning trusts.

In connection with the proposed transfers, the Parties request that the NRC approve certain conforming administrative amendments to the Peach Bottom 2 & 3 operating licenses to reflect the proposed transfers (e.g., to delete references to ACE and DP&L). A mark-up of these licenses showing the conforming amendments is presented as Enclosure 1. A No Significant Hazards Consideration Determination demonstrating that the conforming amendments do no more than reflect the proposed transfers and, therefore, have no adverse impact on safety, is provided as Enclosure 2.

II. SUMMARY OF THE IMPACT OF THE PROPOSED TRANSFERS ON PECO ENERGY, PSEG NUCLEAR, AND THE OPERATION OF PEACH BOTTOM 2&3

The proposed transfers will have no impact on the management of PECO Energy, PSEG Nuclear, or the management and operation of the Peach Bottom Units. As a result of the transfer:

4 Pursuant to the Purchase Agreements, PECO Energy and PSEG Nuclear will acquire ACE's and DP&L's "ownership interests." ACE and DP&L's "ownership interests" in Peach Bottom 2 & 3 are their right, title, and interest in and to Peach Bottom 2 & 3 as specified in the Purchase Agreements.

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(a) The officers and directors of PECO Energy and PSEG Nuclear will be unchanged and there will be no change in the management or technical qualifications of PECO Energy's nuclear organization;

(b) PECO Energy and PSEG Nuclear will each hold 50 % ownership interests in

Peach Bottom 2 & 3;

(c) PECO Energy will remain the licensed operator of Peach Bottom 2 & 3;

(d) PECO Energy will continue to operate Peach Bottom 2 & 3 in accordance with the terms and conditions of the Peach Bottom 2 & 3 Facility Operating Licenses; and

(e) PECO Energy will continue to be an "electric utility" within the meaning of 10 CFR § 50.2, subject to regulation by the Pennsylvania Public Utility Commission ("Pa. PUC") and the Federal Energy Regulatory Commission ("FERC"), and there will be no change in PECO Energy's source of funds or ability to obtain funds to support the operation and maintenance of Peach Bottom 2 & 3.

(f) PSEG Nuclear will possess the financial qualifications necessary to own the additional 7.51 % interest in the Peach Bottom Units.

(g) There will be no change on the ability of PECO Energy and PSEG Nuclear to fund the decommissioning of the Peach Bottom Units.

IIl. GENERAL CORPORATE INFORMATION REGARDING PECO ENERGY

AND PSEG NUCLEAR

A. PECO Energy

1. Name of Company

PECO Energy Company.

2. Address of Company

2301 Market Street, Philadelphia, Pennsylvania 19101-8699.

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3. Description of Business of Company

PECO Energy is an investor-owned utility that generates electricity, as well as supplying and marketing energy and energy services in Pennsylvania and throughout the U.S. PECO is one of the largest utilities in the United States with 1.5 million electric and more than 400,000 natural gas customers. Based in Philadelphia, PECO Energy has $12 billion in assets, $4.6 billion in annual revenues, and employs about 6,300 people.

In addition to operating the Peach Bottom Units, PECO owns and operates the two-unit Limerick Generating Station, located 21 miles northwest of Philadelphia and owns 42.59 % of the two-unit Salem Station.

4. NRC License Involved

NRC Facility Operating Licenses DPR-44 and DPR-56.

5. Organization and Management of PECO Energy

The names and titles of the directors and principal senior officers of PECO Energy, all of whom are citizens of the United States, are set forth below. The business address for these individuals is 2301 Market Street, Philadelphia, Pennsylvania 19101-8699.

DIRECTORS OFFICERS

Susan W. Catherwood Corbin A. McNeill, Jr. President and Chief Executive Officer

Daniel L. Cooper Gerald R. Rainey Chief Nuclear Officer, and President, PECO Nuclear

M. Walter D'Allessio Ian P. McLean Senior Vice President, Corporate and President, Power Team

G. Fred DiBona, Jr. Greg A. Cucchi Senior Vice President, Corporate and President, PECO Energy Ventures

R. Keith Elliott James W. Duham

Senior Vice President and General Counsel

Richard H. Glanton Michael J. Egan Senior Vice President, Finance and Chief Financial Officer

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DIRECTORS OFFICERS

Rosmarie B. Greco Kenneth G. Lawrence Senior Vice President, Corporate and President, PECO Energy Distribution

Corbin A. McNeill, Jr. - Chairman of the Board William H. Smith, III Senior Vice President, Business Services Group

John M. Palms, Ph.D. David W. Woods Senior Vice President, Corporate and Public Affairs

Joseph F. Paquette, Jr. Gerald N. Rhodes Vice President, Corporate and President, Exelon Energy

Ronald Rubin

Robert Subin

B. PSEG Nuclear

1. Name of Company

PSEG Nuclear, LLC.

2. Address of Company

80 Park Plaza, Newark, New Jersey 07102.

3. Description of Business of Company

As discussed in the license transfer application of June 4, 1999, addressing the transfer of the Salem and Hope Creek operating licenses from PSE&G to PSEG Nuclear, PSEG Nuclear is a limited liability company organized under the laws of the State of Delaware. PSEG Nuclear is an indirect subsidiary of Public Service Enterprise Group, Inc. ("Enterprise"). PSEG Nuclear was formed to acquire the interests in the nuclear generating stations owned by Enterprise and its subsidiaries, and to operate the Salem and Hope Creek units. PSEG Nuclear will be engaged principally in the nuclear generation of electricity as an exempt wholesale generator authorized to sell electricity at market-based rates.

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4. NRC License Involved

NRC Facility Operating Licenses DPR-44 and DPR-56.

5. Organization and Management of PSEG Nuclear

The names and titles of the directors and principal senior officers of PSEG Nuclear, all of whom are citizens of the United States, are set forth below. The business address for these individuals is 80 Park Plaza, Newark, New Jersey 07102.

DIRECTORS

Frank Cassidy

Harold W. Keiser

Steven R. Teitelman

OFFICERS

Harold W. Keiser President and Chief Executive Officer

Louis Storz Senior Vice President, Operations

Morton A. Plawner Treasurer

Elbert Simpson Senior Vice President and Chief Administrative Officer

Mark B. Bezilla Vice President, Nuclear Operations

David F. Garchow Vice President, Nuclear Technical

Martin J. Trum Vice President, Nuclear Maintenance

Timothy J. O'Conner Vice President, Nuclear Plant Support

Edward J. Biggins Secretary

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IV. FOREIGN OWNERSHIP AND CONTROL

The shares of common stock of PECO Energy and Enterprise are publicly traded and widely held. PSEG Nuclear is wholly owned by PSEG Power, LLC, which is a wholly owned subsidiary of Enterprise. The directors and officers of PECO Energy, PSEG Nuclear, and Enterprise are U.S. citizens. Neither PECO Energy, PSEG Nuclear, nor Enterprise is owned, controlled, or dominated by any alien, foreign corporation, or foreign government.

V. TECHNICAL QUALIFICATIONS OF PECO ENERGY

The proposed transfers will not result in any change in the design or operation of the Peach Bottom Units, any change in the substantive aspects of the Peach Bottom Units' Facility Operating Licenses or Technical Specifications, nor any change to the technical qualifications of personnel involved in the maintenance or operation of the Peach Bottom Units. The personnel at PECO Energy having control over licensed activities at the Peach Bottom Units will not change as a result of the transfers. There will also be no changes in the management or operation of the Peach Bottom Units or PECO Energy as a result of the transfers.

VI. FINANCIAL QUALIFICATIONS

A. PECO Energy

As specified in its NRC license, PECO Energy is licensed pursuant to Section 104 of the Atomic Energy Act of 1954, as amended ("the Act"), and 10 CFR Part 50, to own and operate Peach Bottom 2 & 3. "Electric utilities" licensed pursuant to Section 104 of the Act are exempt from the requirement to demonstrate financial qualifications. PECO Energy is and will remain an "electric utility" within the meaning of 10 CFR § 50.2 following the transfer since it will remain an "entity that generates or distributes electricity and which recovers the cost of this electricity, either directly or indirectly, through rates established by the entity itself or by a separate regulatory authority." The business of PECO Energy will remain essentially unchanged after the transfer, and its rates will continue to be regulated by the Pa. PUC and FERC.

B. PSEG Nuclear

PSEG Nuclear is a non-electric utility applicant for a transfer of possession-only interests in operating licenses. Accordingly, under 10 CFR § 50.33(f)(2), PSEG Nuclear must demonstrate that it possesses or has reasonable assurance of obtaining the funds necessary to cover the plant's estimated operating costs, which it may do by submitting "estimates for total annual operating costs for each of the first five years of operation of the facility" as well as the "source(s) of funds to cover these costs."

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In the license transfer applications of June 4, 1999 and July 1, 1999 related to the transfer of PSE&G's 42.59 % interests in the two Salem units, 95 % interest in the Hope Creek unit, and 42.49 % interests in the Peach Bottom Units to PSEG Nuclear, PSEG Nuclear demonstrated its financial qualifications to acquire these interests in these five nuclear units and finance its pro rata shares of the operating costs of these units. (References 1 and 2). In the Salem/Hope Creek Application related to PSEG Nuclear's acquisition of the ACE and DP&L ownership interests in those units, (Reference 3), which is being filed separately, PSEG Nuclear further addresses its financial qualifications as an owner of and licensee for interests in the five nuclear units at the Salem, Peach Bottom, and Hope Creek stations, including the increased shares resulting from the acquisitions of the ACE and DP&L interests in these units.

As PSEG Nuclear demonstrates in References 1, 2 and 3, its acquisition of an additional 7.51 % ownership interest in the Peach Bottom Units has no significant impact upon its financial qualifications. PSEG Nuclear's sources of funds do not change as a result of this transfer and are more than sufficient to cover the additional operating costs associated with the additional 7.51 % ownership interest it will acquire in the Peach Bottom Units. While PSEG Nuclear is increasing its share of the financial obligations related to the Peach Bottom Units, it is likewise increasing its pro rata entitlement to capacity and electrical energy from these Units.

VII. DECOMMISSIONING FUNDING

The proposed transfer of the ACE and DP&L ownership interests in Peach Bottom Units 2 & 3 will have no effect upon the ability of PECO Energy or PSEG Nuclear to fund the decommissioning of Peach Bottom 2 & 3. First, the proposed transfer has no effect on the manner and sufficiency of PECO Energy's and PSEG Nuclear's ability to fund their current individual 42.49 % pro rata share of the Peach Bottom 2 & 3 decommissioning costs. PECO Energy has been funding, and will continue to fund, its 42.49 % share of decommissioning costs through annual non-bypassable wire charges authorized by the Pa. PUC.5 Similarly, PSEG Nuclear will continue to fund its 42.49 % share of decommissioning costs through annual non-bypassable charges authorized by the New Jersey Board of Public Utilities (NJBPU).

6

Second, ACE and DP&L's nuclear decommissioning trust funds associated with their

5 A Nuclear Decommissioning Cost Adjustment Clause established by the Pa. PUC in Docket No. R00973953, authorized PECO Energy to recover the decommissioning costs for its interests in the Peach Bottom Units (as well as for its interests in the Salem and Limerick units) through annual non-bypassable wire charges.

6 Under the New Jersey Restructuring Act, and a relevant NJBPU Order, decommissioning funding will continue to be provided by a non-bypassable charge referred to as a Societal Benefits Charge.

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15.02 % ownership interest in Peach Bottom 2 & 3 will be transferred on the Closing Date to the respective PECO Energy and PSEG Nuclear nuclear decommissioning trusts in equal shares. As shown in Enclosure 3, the NRC formula amount for the radiological decommissioning of Peach Bottom 2 & 3, calculated pursuant to 10 CFR § 50.75(c), NRC Regulatory Guide 1.159, and NUJREG-1307, is $ 371.0 million for each unit, of which ACE and DP&L's 15.02 % pro rata share is approximately $ 55.7 million. As of the Closing Date, ACE and DP&L will have accumulated approximately $ 42.4 million in decommissioning funds for Peach Bottom 2 and $ 43.7 million in decommissioning funds for Peach Bottom 3. As shown in Enclosure 4, even assuming no additional contributions to the funds, when earnings on the funds are credited at a two percent annual after tax real rate of return from the time of the collection of the funds through the end of the Peach Bottom 2 & 3 licenses terms, the funds exceed ACE and DP&L's 15.02 % share of the NRC formula amount associated with the 10 CFR § 50.75(b) and (c) radiological decontamination and decommissioning requirements.

VIII. ANTITRUST CONSIDERATIONS

In accordance with the Commission's recent decision in Kansas Gas and Electric Company (Wolf Creek Generating Station, Unit 1) CLI-99-19, 49 NRC 441 (1999), antitrust reviews of post-operating license transfer applications are not required under the Atomic Energy Act. There are no antitrust conditions in the Peach Bottom 2 & 3 operating licenses. Accordingly, the Commission need not consider any antitrust issues in connection with this transfer.

IX. ACCESS TO RESTRICTED DATA

The proposed transfer does not involve any Restricted Data or Classified National Security Information or any change in access to such Restricted Data or Classified National Security Information. PECO Energy's existing restrictions on access to Restricted Data and Classified National Security Information will be unaffected by the proposed transfer.

X. BASIS FOR NO SIGNIFICANT HAZARDS CONSIDERATION

The proposed conforming administrative license amendments to the Peach Bottom 2 & 3 Facility Operating Licenses, shown in Enclosure 1, and the No Significant Hazards Consideration Determination for these amendments, provided as Enclosure 2, demonstrate that the amendments are necessary solely to reflect the transfer. Accordingly, these amendments fall within the scope of the NRC's generic finding that "any amendment to the license of a utilization facility ... which does no more than conform the license to reflect the transfer action, involves.., no significant hazards consideration" in accordance with 10 CFR

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§ 2.1315(a).

XI. ENVIRONMENTAL CONSIDERATIONS

The requested approval for transfer of the Peach Bottom 2 & 3 licenses and accompanying conforming administrative amendments are exempt from environmental review because they fall within the categorical exclusion appearing at 10 CFR § 51.22(c)(21) for which neither an Environmental Assessment nor an Environmental Impact Statement is required. Moreover, the proposed license transfers do not involve any amendments to the licenses or other changes that would directly affect the actual operation of Peach Bottom 2 & 3 in any substantive way. The proposed transfers and amendments to the licenses do not involve an increase in the amounts, or a change in the types, of any radiological effluents that may be allowed to be released off-site. Further, no increase in the individual or cumulative occupational radiation exposure is expected, and the proposed transfers and license changes have no environmental impact.

XII. OTHER REQUIRED REGULATORY APPROVALS

The transfer of ACE's and DP&L's ownership interests to PECO Energy and PSEG Nuclear will require the approval of FERC. Authorization for the proposed transaction has been or will be obtained from the NJBPU, the Pa. PUC, the Delaware Public Service Commission ("PSC"), the Maryland PSC, and the Virginia State Corporation Commission. In addition to these regulatory approvals, PECO and PSEG Nuclear intend to seek IRS private letter rulings in connection with the proposed transfers.

XIII. EFFECTIVE DATE

The Parties request that the NRC review this transfer request on a schedule that will permit the issuance of NRC consent to the license transfers, and approval of the conforming administrative license amendments, as promptly as possible, and in any event before March 15, 2000. The Parties also request that NRC's consent to the transfer of ACE's and DP&L's interests in Peach Bottom 2 & 3 to PECO Energy and PSEG Nuclear be effective upon issuance of the NRC's Order, and that it grant consent for the transfer to take place at any time for one year from the date of issuance of the NRC's Order, or such later date as may be permitted by the NRC. It is also requested that any needed license or technical specification changes be made effective on the Closing Date which is scheduled to occur on March 31, 2000. The parties shall notify the NRC of the actual date of closing.

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XIV. CONCLUSION

Based upon the foregoing information, the parties respectfully request that the NRC issue an Order (1) approving the transfer of ACE's and DP&L's ownership interests in Facility Operating License No. DPR-44 for Peach Bottom 2 and DPR-56 for Peach Bottom 3 to PECO Energy and PSEG Nuclear and (2) issue the associated conforming administrative license amendments. As the Application demonstrates, the proposed transfers and conforming administrative license amendments will not be inimical to the common defense and security or result in any undue risk to public health and safety and will be consistent with the requirements set forth in the Atomic Energy Act, NRC regulations, and relevant NRC licenses and orders.

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Enclosure 1

Marked-up Pages of the Peach Bottom Atomic Power Station Units 2 & 3 Licenses Reflecting Conforming Administrative License Amendments Associated With Proposed Transfer of

Facilities to PECO Energy Company and PSEG Nuclear, LLC.

UNITED STATES NUCLEAR REGULATORY COMMISSION

Washington, DC 20555-0001

PECO ENERGY COMPANY PUBLIC SERVICE ELECTRIC AND GAS COMPANY

DrELMAR\A, POWER A-ND LIGHT COMPANYV rATLANTIC9 CITY ELECTRIC COMPAN-Y DOCKET NO. 50-277

PEACH BOTTOM ATOMIC POWER STATION, UNIT 2 FACILITY OPERATING LICENSE

License No. DPR-44 Amendment No. 1

1. The Atomic Energy Commission (the Commission) having found that:

A. The application for license filed by PECO Energy Company, formerly Philadelphia Electric Company, and Public Service Electric and Gas Company, i-( ..l.m.. Dewep .... L ight r . . . Atlant! Ci- y ^El- - r -i G C ( the licensees) 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 and all required notifications to other agencies or bodies have been duly made;

B. Construction of the Peach Bottom Atomic Power Station, Unit 2 (the facility) has been substantially completed in conformity with Construction Permit No. CPPR-37 and the application, as amended, the provisions of the Act and the rules and regulations of the Commission;

C. The facility will operate in conformity with the application, as amended, the provisions of the Act, and the rules and regulations of the Commission;

D. There is reasonable assurance: (1) that the activities authorized by this amended operating license can be conducted without endangering the health and safety of the public, and (2) that such activities will be conducted in compliance with the rules and regulations of the Commission;

E. PECO Energy Company is technically qualified and the licensees are financially qualified to engage in the activities authorized by this amended operating license in accordance with the rules and regulations of the Commission;

F. The licensees have satisfied the applicable provisions of 10 CFR Part 140, "Financial Protection Requirements and Indemnity Agreements," of the Commission's regulations;

G. The issuance of this amended operating license will not be inimical to the common defense and security or to the health and safety of the public;

Page 1

H. After weighing the environmental, economic, technical, and other benefits of the facility against environmental costs and considering available alternatives, the issuance of Amendment No. 1 to Facility Operating License No. DPR-44 is in accordance with 10 CFR Part 50, Appendix D, of the Commission's regulations and all applicable requirements of said Appendix D have been satisfied; and

I. The receipt, possession, and use of source, by-product and special nuclear material as authorized by this license will be in accordance with the Commission's regulations in 10 CFR Parts 30, 40, and 70, including 10 CFR Section 30.33, 40.32, and 70.23 and 70.31.

2. Amendment No. 1 to Facility Operating License No. DPR-44 issued to the PECO Energy Company (PECO), formerly Philadelphia Electric Company, and Public Service Electric and Gas Company (PSE&G),(D~ av Pewe.. ... ,,•,•,r a,,d -L ,,•Jhlj G~mpany (P&LC , ad At ..... City Electric Company (ACEW , )... ) nd, !• c... . is hereby

amended in its entirety to read as follows:

A. This amended license applies to the Peach Bottom Atomic Power Station, Unit 2, a single cycle, forced circulation, boiling water nuclear reactor and associated equipment (the facility), owned by the licensees and operated by PECO Energy Company. The facility is located in Peach Bottom, York County, Pennsylvania and is described in the "Final Safety Analysis Report" as supplemented and amended and the Environmental Report as supplemented and amended.

B. Subject to the conditions and requirements incorporated herein, the Commission hereby licenses:

(1) PECO Energy Company, pursuant to Section 104b of the Act and 10 CFR Part 50, "Licensing of Production and Utilization Facilities," to ossess, use, and operate the facility and PSE&GF-]

ýDP&LC, and .ACEC to possess the facility at the designated location in Peach Bottom, York County, Pennsylvania in accordance with the procedures and limitations set forth in this license;

(2) PECO Energy Company, pursuant to the Act and 10 CFR Part 70, to receive, possess and use at any time special nuclear material as reactor fuel, in accordance with the limitations for storage and amounts required for reactor operation, as described in the Final Safety Analysis Report, as supplemented and amended;

(3) PECO Energy Company, pursuant to the Act and 10 CFR Parts 30, 40, and 70 to receive, possess and use at any time any byproduct, source and special nuclear material as sealed neutron sources for reactor startup, sealed sources for reactor instrumentation and radiation monitoring equipment calibration, and as fission detectors in amounts as required;

(4) PECO Energy Company, pursuant to the Act and 10 CFR Parts 30, 40 and 70 to receive, possess and use in amounts as required any byproduct, source, or special nuclear material without

Page 2

restriction to chemical or physical form for sample analysis or instrument calibration or when associated with radioactive apparatus or components;

(5) PECO Energy Company, pursuant to the Act and 10 CFR Parts 30 and 70, to possess, but not to separate, such byproduct and special nuclear material as may be produced by operation of the facility.

C. This amended license shall be deemed to contain and is subject to the conditions specified in the following Commission regulations in 10 CFR Chapter I: Part 20, Section 30.34 of Part 30, Section 40.41 of Part 40, Sections 50.54 and 50.59 of Part 50, and Section 70.32 of Part 70; is subject to all applicable provisions of the Act and to the rules, regulations, and orders of the Commission now or hereafter in effect; and is subject to the additional conditions specified below:

(1) Maximum Power Level

PECO Energy Company is authorized to operate the Peach Bottom Atomic Power Station, Unit 2, at steady state reactor core power levels not in excess of 3458 megawatts thermal.

(2) Technical Specifications

The Technical Specifications contained in Appendices A and B, as revised through Amendment No. are hereby incorporated in the license. PECO shall operate the facility in accordance with the Technical Specifications.

The Surveillance Requirements (SRs) listed in the licensee's letter dated August 4, 1995 are not required to be performed immediately upon implementation of Amendment No. 210. The SRs listed in the licensee's letter dated August 4, 1995 shall be successfully demonstrated prior to the time and condition specified below for each:

a) Those SRs listed as Category A SRs in the licensee's dated August 4, 1995 letter shall be completed within a period consistent with the implementation date for Amendment 210, the specified frequency for each SR and the allowance of SR 3.0.2.

b) Those SRs listed as Category B SRs in the licensee's dated August 4, 1995 letter shall be completed within a period consistent with the last completion data for the related existing SRs, the specified frequency for each SR and the allowance of SR 3.0.2.

Page 3

(3) Physical Protection

The licensee shall fully implement and maintain in effect all provisions of the Commission-approved physical security, guard training and qualification, and safeguards contingency plans including amendments made pursuant to provisions of the Miscellaneous Amendments and Search Requirements revisions to 10 CFR 73.55 (51 FR 27817 and 27822) and to the authority of 10 CFR 50.90 and 10 CFR 50.54(p). The plans, which contain Safeguards Information protected under 10 CFR 73.21, are entitled: "Peach Bottom Atomic Power Station, Units 2 and 3, Physical Security Plan," with revisions submitted through December 16, 1987; "Peach Bottom Atomic Power Station, Units 2 and 3 Plant Security Personnel Training and Qualification Plan," with revisions submitted through July 9, 1986; and "Peach Bottom Atomic Power Station, Units 2 and 3 Safeguards Contingency Plan," with revisions submitted through March 10, 1981. Changes made in accordance with 10 CFR 73.55 shall be implemented in accordance with the schedule set forth therein.

(4) The licensee shall implement and maintain in effect all provisions of the approved fire protection program as described in the Updated Final Safety Analysis Report for the facility and as approved in the NRC SER dated May 23, 1979 and Supplements dated August 14, September 15, October 10 and November 24, 1980, and in the NRC SERs dated September 16, 1993 and August 24, 1994 subject to the following provision:

The licensee may make changes to the approved fire protection program without prior approval of the Commission only if those changes would not adversely affect the ability to achieve and maintain safe shutdown in the event of a fire.

3. This amended license is subject to the following conditions for the protection of the environment:

A. To the extent matters related to thermal discharges are treated therein, operation of Peach Bottom Atomic Power Station Unit No. 2 will be governed by NPDES Permit No. PA 0009733, as now in effect and as hereafter amended. Questions pertaining to conformance thereto shall be referred to and shall be determined by the NPDES Permit issuing or enforcement authority, as appropriate.

B. In the event of any modification of the NPDES Permit related to thermal discharges or the establishment (or amendment) of alternative effluent limitations established pursuant to Section 316 of the Federal Water Pollution Control Act, the licensees shall inform the NRC and analyze any associated changes in or to the Station, its components, its operation or in the discharge of effluents therefrom. If such change would entail any modification to this license, or any

Page 4

Technical Specifications which are part of this license, or present an unreviewed safety question or involve an environmental impact different than analyzed in the Final Environmental Statement, the licensees shall file with the NRC, as applicable, an appropriate analysis of any such change on facility safety, and/or an analysis of any such change on the environmental impacts and on the overall costbenefit balance for facility operation set forth in the Final Environmental Statement and a request for an amendment to the operating license, if required by the Commission's regulations. As used in this Condition 3.B, Final Environmental Statement means the NRC Staff Final Environmental Statement related to Operation of Peach Bottom Atomic Power Station Units Nos. 2 and 3 dated April 1973, as modified by (1) the Initial Decision of the Atomic Safety and Licensing Board dated September 14, 1973, (2) the Supplemental Initial Decision of the Atomic Safety and Licensing Board dated June 14, 1974, (3) the Decision of the Atomic Safety and Licensing Appeal Board dated July 5, 1974, (4) the Memorandum and Order of the Commission dated August 8, 1974, (5) any further modification resulting from further review by the Appeal Board and by the Commission, if any, and (6) any Environmental Impact Appraisal which has been or may be issued by the NRC since the FES was published in April 1973.

4. This license is effective as of the date of issuance and shall expire at midnight on August 8, 2013.

FOR THE ATOMIC ENERGY COMMISSION

Original Signed by R. C. DeYoung, for

A. Giambusso, Deputy Director for Reactor Projects Directorate of Licensing

Attachments: Appendices A and B Technical Specifications

Date of Issuance: October 25, 1973

Page 5

UNITED STATES NUCLEAR REGULATORY COMMISSION

Washington, DC 20555-0001

PECO ENERGY COMPANY PUBLIC SERVICE ELECTRIC AND GAS COMPANY

DE LMARVA POWER AND LIGHT COMPANY ATLANTIC CI Ty. ELEC.T.RICCOMPANY

DOCKET NO. 50-278 PEACH BOTTOM ATOMIC POWER STATION, UNIT 3

FACILITY OPERATING LICENSE

License No. DPR-56

1. The Atomic Energy Commission (the Commission) having found that:

A. The application for license filed by PECO Energy Company, formerly Philadelphia Electric Company, and Public Service Electric and Gas Company,

[Delmarva Power aqd Light Company, and At-lantic i4ty Elcctr-ic Campa•y (the licensees) 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 and all required notifications to other agencies or bodies have been duly made;

B. Construction of the Peach Bottom Atomic Power Station, Unit 3 (the facility) has been substantially completed in conformity with Construction Permit No. CPPR-38 and the application, as amended, the provisions of the Act and the rules and regulations of the Commission;

C. The facility will operate in conformity with the application, as amended, the provisions of the Act, and the rules and regulations of the Commission;

D. There is reasonable assurance: (1) that the activities authorized by this operating license can be conducted without endangering the health and safety of the public, and (2) that such activities will be conducted in compliance with the rules and regulations of the Commission;

E. PECO Energy Company is technically qualified and the licensees are financially qualified to engage in the activities authorized by this amended operating license in accordance with the rules and regulations of the Commission;

F. The licensees have satisfied the applicable provisions of 10 CFR Part 140, "Financial Protection Requirements and Indemnity Agreements," of the Commission's regulations;

G. The issuance of this operating license will not be inimical to the common defense and security or to the health and safety of the public;

Page 1

H. After weighing the environmental, economic, technical, and other benefits of the facility against environmental costs and considering available alternatives, the issuance of Facility Operating License No. DPR-56 is in accordance with 10 CFR Part 50, Appendix D, of the Commission's regulations and all applicable requirements of said Appendix D have been satisfied, and

I. The receipt, possession, and use of source, by-product and special nuclear material as authorized by this license will be in accordance with the Commission's regulations in 10 CFR Parts 30, 40, and 70, including 10 CFR Section 30.33, 40.32, and 70.23 and 70.31.

2. Facility Operating License No. DPR-56 is hereby issued to the PECO Energy Company (PECO), formerly Philadelphia Electric Company, and Public Service Electric and Gas Company (PSE&G)W,•Z...... ....... a 'iht .. . ((-D L.I) a• Rd At!" t G 1t I[-f n Ie nl -+-it- 'nmn -,w I•F A

...... .. . _ . . . -•,, .s hereby amended in its entirety to read as follows:

A. This license applies to the Peach Bottom Atomic Power Station, Unit 3, a single cycle, forced circulation, boiling water nuclear reactor and associated equipment (the facility), owned by the licensees and operated by PECO Energy Company. The facility is located in Peach Bottom, York County, Pennsylvania and is described in the "Final Safety Analysis Report" as supplemented and amended and the Environmental Report as supplemented and amended.

B. Subject to the conditions and requirements incorporated herein, the Commission hereby licenses:

(1) PECO Energy Company, pursuant to Section 104b of the Act and 10 CFR Part 50, "Licensing of Production and Utilization Facilities," to possess, use, and operate the facility and PSE&G ( ,to possess the facility at the designated location in Peach Bottom, York County, Pennsylvania in accordance with the procedures and limitations set forth in this license;

(2) PECO Energy Company, pursuant to the Act and 10 CFR Part 70, to receive, possess and use at any time special nuclear material as reactor fuel, in accordance with the limitations for storage and amounts required for reactor operation, as described in the Final Safety Analysis Report, as supplemented and amended;

(3) PECO Energy Company, pursuant to the Act and 10 CFR Parts 30, 40, and 70 to receive, possess and use at any time any byproduct, source and special nuclear material as sealed neutron sources for reactor startup, sealed sources for reactor instrumentation and radiation monitoring equipment calibration, and as fission detectors in amounts as required;

(4) PECO Energy Company, pursuant to the Act and 10 CFR Parts 30, 40 and 70 to receive, possess and use in amounts as required any byproduct, source, or special nuclear material without restriction to chemical or physical form for sample analysis or instrument calibration or when associated with radioactive apparatus or components;

Page 2

(5) PECO Energy Company, pursuant to the Act and 10 CFR Parts 30 and 70, to possess, but not to separate, such byproduct and special nuclear material as may be produced by operation of the facility.

C. This license shall be deemed to contain and is subject to the conditions specified in the following Commission regulations in 10 CFR Chapter I: Part 20, Section 30.34 of Part 30, Section 40.41 of Part 40, Sections 50.54 and 50.59 of Part 50, and Section 70.32 of Part 70; is subject to all applicable provisions of the Act and to the rules, regulations, and orders of the Commission now or hereafter in effect; and is subject to the additional conditions specified below:

(1) Maximum Power Level

PECO Energy Company is authorized to operate the Peach Bottom Atomic Power Station, Unit 3, at steady state reactor core power levels not in excess of 3458 megawatts thermal.

(2) Technical Specifications

The Technical Specifications contained in Appendices A and B, as revised through Amendment No. I are hereby incorporated in the license. PECO shall operate the facility in accordance with the Technical Specifications.

The Surveillance Requirements (SRs) listed in the licensee's letter dated August 4, 1995 are not required to be performed immediately upon implementation of Amendment No. 214. The SRs listed in the licensee's letter dated August 4, 1995 shall be successfully demonstrated prior to the time and condition specified below for each:

a) Those SRs listed as Category A SRs in the licensee's August 4, 1995 letter shall be completed within a period consistent with the implementation date for Amendment 214, the specified frequency for each SR and the allowance of SR 3.0.2.

b) Those SRs listed as Category B SRs in the licensee's August 4, 1995 letter shall be completed within a period consistent with the last completion data for the related existing SRs, the specified frequency for each SR and the allowance of SR 3.0.2.

Page 3

(3) Physical Protection

The license shall fully implement and maintain in effect all provisions of the Commission-approved physical security, guard training and qualification, and safeguards contingency plans including amendments made pursuant to provisions of the Miscellaneous Amendments and Search Requirements revisions to 10 CFR 73.55 (51 FR 27817 and 27822) and to the authority of 10 CFR 50.90 and 10 CFR 50.54(p). The plans, which contain Safeguards Information protected under 10 CFR 73.21, are entitled: "Peach Bottom Atomic Power Station, Units 2 and 3, Physical Security Plan," with revisions submitted through December 16, 1987; "Peach Bottom Atomic Power Station, Units 2 and 3 Plant Security Personnel Training and Qualification Plan," with revisions submitted through July 9, 1986; and "Peach Bottom Atomic Power Station, Units 2 and 3 Safeguards Contingency Plan," with revisions submitted through March 10, 1981. Changes made in accordance with 10 CFR 73.55 shall be implemented in accordance with the schedule set forth therein.

(4) The licensee shall implement and maintain in effect all provisions of the approved fire protection program as described in the Updated Final Safety Analysis Report for the facility, and as approved in the NRC SER dated May 23, 1979 and Supplements dated August 14, September 15, October 10 and November 24, 1980, and in the NRC SERs dated September 16, 1993 and August 24, 1994, subject to the following provision:

Page 4

The licensee may make changes to the approved fire protection program without prior approval of the Commission only if those changes would not adversely affect the ability to achieve and maintain safe shutdown in the event of a fire.

3. This license is subject to the following conditions for the protection of the environment:

A. To the extent matters related to thermal discharges are treated therein, operation of Peach Bottom Atomic Power Station Unit No. 3 will be governed by NPDES Permit No. PA 0009733, as now in effect and as hereafter amended. Questions pertaining to conformance thereto shall be referred to and shall be determined by the NPDES Permit issuing or enforcement authority, as appropriate.

B. In the event of any modification of the NPDES Permit related to thermal discharges or the establishment (or amendment) of alternative effluent limitations established pursuant to Section 316 of the Federal Water Pollution Control Act, the licensees shall inform the NRC and analyze any associated changes in or to the Station, its components, its operation or in the discharge of effluents therefrom. If such change would entail any modification to this license, or any Technical Specifications which are part of this license, or present an unreviewed safety question or involve an environmental impact different than analyzed in the Final Environmental Statement, the licensees shall file with the NRC, as applicable, an appropriate analysis of any such change on facility safety, and/or an analysis of any such change on the environmental impacts and on the overall costbenefit balance for facility operation set forth in the Final Environmental Statement and a request for an amendment to the operating license, if required by the Commission's regulations. As used in this Condition 3.B, Final Environmental Statement means the NRC Staff Final Environmental Statement related to Operation of Peach Bottom Atomic Power Station Units Nos. 2 and 3 dated April 1973, as modified by (1) the Initial Decision of the Atomic Safety and Licensing Board dated September 14, 1973, (2) the Supplemental Initial Decision of the Atomic Safety and Licensing Board dated June 14, 1974, (3) the Decision of the Atomic Safety and Licensing Appeal Board dated July 5, 1974, (4) the Memorandum and Order of the Commission dated August 8, 1974, (5) any further modification resulting from further review by the Appeal Board and by the Commission, if any, and (6) any Environmental Impact Appraisal which has been or may be issued by the NRC since the FES was published in April 1973.

Page 5

4. This license is effective as of the date of issuance and shall expire at midnight on July 2, 2014.

FOR THE ATOMIC ENERGY COMMISSION

Original Signed by Roger Boyd, for

A. Giambusso, Deputy Director for Reactor Projects

Directorate of Licensing

Attachments: Amended pages to Appendices A and B DPR-44 & DPR-56 Technical Speci fi cati ons

Date of Issuance: July 2, 1974

Page 6

Enclosure 2

No Significant Hazards Consideration Determination for Conforming Administrative License Amendments Associated With Proposed Transfer of the Peach Bottom Atomic Power Station Units 2 & 3 Licenses to PECO Energy Company and

PSEG Nuclear, LLC.

ATTACHMENT

Peach Bottom Atomic Power Station License Nos. DPR-44 and DPR-56

ECR No.: 99-02489

No Significant Hazards Consideration Determination

Information Supporting a Finding of No Significant Hazards Consideration

We have concluded that the proposed changes to the Peach Bottom Atomic Power Station (PBAPS), Units 2 and 3, Facility Operating Licenses, which will conform the licenses to reflect the requested consent to transfer the minority ownership interests from Delmarva Power and Light Company and Atlantic City Electric Company to PECO Energy Company and Public Service Electric and Gas do not involve a Significant Hazards Consideration. We propose to modify, where appropriate, with conforming amendments the PBAPS, Units 2 and 3 Facility Operating Licenses. The proposed changes are needed to reflect that Delmarva Power and Light Company and Atlantic City Electric Company no longer own shares of PBAPS, Units 2 and 3. Following the license transfers, PECO Energy and Public Service Electric and Gas Company will share equal ownership of PBAPS, Units 2 and 3 and PECO Energy will be the licensed operator of the PBAPS, Units 2 and 3. In support of this determination an evaluation of each of the three (3) standards set forth in 10 CFR 50.92 is provided below.

The proposed changes do not involve a significant increase in the probability or consequences of an accident previously evaluated.

The proposed changes only reflect a transfer of ownership of PBAPS, Units 2 and 3, and as such, are administrative in nature. No physical or operational changes to our facilities will result from the proposed changes. The proposed changes do not change or alter the design assumptions for the systems or components used to mitigate the consequences of an accident, and the initial conditions and methodologies used in the accident analyses. Therefore, accident analyses results are not impacted. Additionally, the PBAPS, Units 2 and 3 Technical Specifications will remain unchanged. The proposed conforming amendments do not involve a significant increase in the probability or consequences of an accident previously evaluated.

The proposed changes do not create the possibility of a new or different kind of accident from any accident previously evaluated.

The proposed changes, which are administrative in nature and only reflect a transfer of ownership do not affect the design, operation, or maintenance of any system, structure, or component in the plants. The safety functions of the related structures, systems, or components are not changed in any manner, nor is the reliability of any structures, systems, or components reduced. The proposed changes do not affect the manner by which the facilities are operated, and no new or different type of equipment will be installed by this requested change. No new failure modes or potential accident initiators are introduced. Therefore, the proposed amendments do not create the possibility of a new or different kind of accident from any accident

previously evaluated.

The proposed changes do not involve a significant reduction in a margin of safety.

The proposed changes are administrative in nature and only reflect a transfer of ownership, and therefore, have no impact on the margin of safety of any Technical Specification. The PBAPS, Units 2 and 3 Technical Specifications will not be impacted. The changes do not affect any plant safety parameters or setpoints. Therefore, the proposed amendments do not involve a significant reduction in the margin of safety.

Further, for conforming license amendments which do no more than reflect a license transfer, the NRC has determined generically in 10 CFR 2.1315(a) that such amendments involve no significant hazards consideration. Based upon the above evaluation we have concluded that the three standards of 10 CFR 50.92(c) are satisfied and that, in conjunction with 10 CFR 2.1315(a), the proposed changes involve no significant hazards consideration.

Information Supporting an Environmental Assessment

In accordance with 10 CFR 51.41, a review was performed to determine the impact of the proposed administrative changes on the conclusions of the NRC's Final Environmental Statement for PBAPS. The considerations included in 10 CFR 51.45(b) were used in this review with the following conclusions. Since the proposed changes are administrative only, and there is no impact on the operation of each of the facilities, implementation of the proposed changes has no impact on the environment. Since there is no impact on the environment, there are no adverse environmental effects that cannot be avoided. Since these administrative changes are only required to conform the licenses to reflect the transfer of the licenses, and there is no impact on the operation of each of the facilities nor on the environment, there are no alternatives to the proposed changes. Since the operation of each of the facilities is not affected by the proposed changes, there is no impact on the original assessment of the relationship between local short-term uses of man's environment and the maintenance and enhancement of long-term productivity. Since the operation of each of the facilities is unaffected by the proposed changes, there is no change to the commitment of resources and therefore, no irreversible nor irretrievable commitment of resources involved.

Conclusion

The Plant Operations Review Committees and the Nuclear Review Board have reviewed these proposed changes to the Peach Bottom Atomic Power Station, Unit 2 and Unit 3, Facility Operating Licenses, and have concluded that they do not involve an unreviewed safety question, they do not involve a Significant Hazards Consideration, and they will not endanger the health and safety of the public.

Enclosure 3

Calculation of NRC Formula Amount for Decommissioning Funding Financial Assurance for the Peach Bottom Atomic Power

Station, Units 2 & 3 (10 CFR § 50.75(c))

REACTOR TYPE I BASE COST

BWRs > 3400 MWt = $135 $135,000,000

ESCALATION FACTOR

(0.65L + 0.13E + 0.22B)

(0.65L + 0.13E + 0.22B) =

(L + E + B) =

Escalation Factor =

Labor

2.7480169

Energy (BWR) Waste (Waste. Ve~ndor•

TOTAL ESCALATED COST

$135,000,000 x 2.7480169

$370,982,288 for each reactor

$55,647,343.21 ACE/DP&L Pro Rata Share

PEACH BOTTOM UNITS 2 & 3 (3,458 MWt) Final Data as of June 1999

Northeast Region Data E = (0.54P + 0.46F) Barnwell (100%) Power Euel

1999 x scaling factor/ 1986 P= 1999/1986 F = 1999/1986 B = 6.968

141.5 x 1.555 / 130.5 131.6/114.2 52.4/82.0

1.152364273 E = (0.54P + 0.46F) 0.63902439

E = (0.54 x 1.1524) + (0.46 x 0.6390)

1.686072797 0.9162279 6.968

0.65 x 1.6861 0.13 x 0.9162279 0.22 x 6.968

1.0959473 + 0.1191096 + 1.5329600

Enclosure 4

Projections of Earnings Credit on the Combined Decommissioning Funds of Atlantic City Electric Company and Delmarva

Electric & Gas Company for the Peach Bottom Atomic Power Station Units 2 & 3 Using 2% Annual Real Rate of Return

Nuclear Decommissioning Funding Model Projections

Peach Bottom Atomic Power Station, Unit 2 (License Expires 0810812013)

Funding Status Assuming 0% Cost Escallation and 2% After-Tax Earnings

Earnings Balance

42,393,000 847,860 43,240,860 864,817 44,105,677 882,114 44,987,791 899,756 45,887,547 917,751 46,805,297 936,106 47,741,403 954,828 48,696,232 973,925 49,670,156 993,403 50,663,559

1,013,271 51,676,830 1,033,537 52,710,367 1,054,207 53,764,574 1,075,291 54,839,866 1,096,797 55,936,663

652,594 56,589,258

NRC Min. NRC Min. Status

55,647,343 76.18% 55,647,343 77.71% 55,647,343 79.26% 55,647,343 80.84% 55,647,343 82.46% 55,647,343 84.11% 55,647,343 85.79% 55,647,343 87.51% 55,647,343 89.26% 55,647,343 91.04% 55,647,343 92.86% 55,647,343 94.72% 55,647,343 96.62% 55,647,343 98.55% 55,647,343 100.52% 55.647,343 101.69%

CalendarYear 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -Aug.

Model Assumptions for Unit 2

Decommissioning Escallation Rate:

After Tax earnings Rate:

NRC Minimum:

Site Specific Cost Estimate:

Current Fund Balance: Annual Funding Amount:

0.00%

2.00%

55,647,343

0

42,393,000 0

Nuclear Decommissioning Funding Model Projections

Peach Bottom Atomic Power Station, Unit 3 (License Expires 0710212014)

Funding Status Assuming 0% Cost Escallation and 2% After-Tax Earnings

Calendar Earnings Balance NRC Min. NRC Min. Year Status1998 43,692,966 55,647,343 78.52% 1999 873,859 44,566,825 55,647,343 80.09% 2000 891,337 45,458,162 55,647,343 81.69% 2001 909,163 46,367,325 55,647,343 83.32% 2002 927,347 47,294,672 55,647,343 84.99% 2003 945,893 48,240,565 55,647,343 86.69% 2004 964,811 49,205,376 55,647,343 88.42% 2005 984,108 50,189,484 55,647,343 90.19% 2006 1,003,790 51,193,273 55,647,343 92.00% 2007 1,023,865 52,217,139 55,647,343 93.84% 2008 1,044,343 53,261,482 55,647,343 95.71% 2009 1,065,230 54,326,711 55,647,343 97.63% 2010 1,086,534 55,413,246 55,647,343 99.58% 2011 1,108,265 56,521,511 55,647,343 101.57% 2012 1,130,430 57,651,941 55,647,343 103.60% 2013 1,153,039 58,804,980 55,647,343 105.67% 2014 -July 588,050 59,393,029 55,647,343 106.73%

Model Assumptions for Unit 3

Decommissioning Escallation Rate: 0.00%

After Tax earnings Rate: 2.00%

NRC Minimum: 55,647,343

Site Specific Cost Estimate: 0

Current Fund Balance: 43,692,966 Annual Funding Amount: 0

Enclosure 5

Affirmation of Joseph J. Hagan (PECO Energy)


ENCLOSURE 5

AFFIRMATION

I, Joseph J. Hagan, being duly sworn, state that I am Senior Vice President, Nuclear

Operations of PECO Energy Company (PECO Energy) that I am authorized to sign and file

this Request with the Nuclear Regulatory Commission on behalf of PECO Energy, and that the

statements made and the matters set forth herein pertaining to PECO Energy are true and

correct to the best of my knowledge, information, and belief.

PECO Energy Company

ýeS•'or Vic• Prsdn

Nuclear Op ation

STATE OF(Ký•,-.

COUNTY OF

Subscribed and sworn to me, a Notary Public, in and for the County and State above named, this / '• day ofo. , 1999.

My Commission Expires:

Notarial Seal Carol A. Walton, Notary Public

Tredyffrin Twp., Chester County My Commission Expires May 28, 2002

'1-WA--295890..8 Member, Pennsylvania Association ot Notaries I-WA/1295890.8 5--

Enclosure 6

Affirmation of Mark B. Bezilla (PSEG Nuclear) [original to be submitted separately]

12/20/99 3:48: PAGE 2/2

Docket Nos. 50-277 50-278

AFFIRMATION OF MARK M. BEZILA

I, Mark B. Bezilla, being duly worn, state as follows:

1. I am Vice President, Nuclear Operations of PSEG Nuclear LLC ("PSEG

Nuclear") and PSE&G.

2. Atlantic City Flectric and Delmarva Power and Light have agreed to

transfer certain minority, non-operating ownership interests in Peach

Bottom Atomic Power Station, Units 2 and 3, to PSEG Power LLC.

PSEG Power intends for those interests to be transferred to PSEG Nuclear.

3. PSE&G and PSEG Nuclear consent to the filing of the transfer application

related to the transfer by PECO Energy Company as the operator of Peach

Bottom Units 2 and 3.

4. The representations made in the license transfer application with respect to

PSE&G, PSEG Power, and PSEG Nuclear, are true and correct to the best

of my knowledge.

Mark 3Bezilla

STATE OF NEW JERSEY

COUNTY OF SALEM

Subscribed and sworn to me, a Notary Public, in and for the County and State

above named, this o '/4"day of •Z x , 1999.

My qommi$is•sn Expires:

JENNIFER M. TURNER NOTARY PUBLIC OF NEW JERSEY

-:' : .... My Commission Expires July 26, 200D

Z,/1O 30Vd E-3Sd OL0•26EE89 9EST 666T/0Z/ZT 2/2 ad NMIS I NOISNIM

Winston & Strawn PAGE.02

Winston & Strawn RightFAX

DEC 20 1999 15:56

Enclosure 7

Affirmation of Thomas S. Shaw (ACE and DP&L)


ENCLOSURE 7

AFFIRMATION

I, Thomas S. Shaw, being duly sworn, state that I am Executive Vice-President of

Atlantic City Electric Company, (ACE) and Delmarva Power & Light Company (DP&L), that

I am authorized to sign and file this Application with the Nuclear Regulatory Commission on

behalf of ACE and DP&L, and that the statements made and the matters set forth herein

pertaining to ACE and DP&L are true and correct to the best of my knowledge, information,

and belief.

Atlantic City Electric Company Delmarva Power & Light Company

Thomas S. Shaw Executive Vice-President

STATE OF

COUNTY OFffwEcIk

Subscri1 ednd sworn t me, a Notary Public, in and for the County and State above named, this I'ý day of t.X(prý/4bQ•. , 1999.

My ission Expires:

1-WA/129589o.8 ELIZABETH M. MILLER NOTARY PUBUC - DELAWARE

My Commis•ibn Expires Oct. 31, 2001

letter requesting that nrc consent to transfer of non ... · the closing on the ownership transfers...

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