01-1364. In the Matter of PECO Energy Company, PSEG Nuclear LLC, Delmarva Power and Light Company, Atlantic City Electric Company (Peach Bottom Atomic Power Station, Units 2 and 3); Order Approving Transfer of Licenses and Conforming Amendments

I

PECO Energy Company (PECO), PSEG Nuclear LLC, Delmarva Power and Light Company (DP&L), and Atlantic City Electric Company (ACE) are the joint owners of the Peach Bottom Atomic Power Station, Units 2 and 3 (Peach Bottom), located in York County, Pennsylvania. They hold Facility Operating Licenses Nos. DPR-44 and DPR-56 issued by the U.S. Nuclear Regulatory Commission (NRC or Commission) on October 25, 1973, and July 2, 1974, respectively, pursuant to Part 50 of Title 10 of the Code of Federal Regulations (10 CFR Part 50). Under these licenses, PECO (currently owner of 42.49 percent of each Peach Bottom unit) is authorized to possess, use, and operate the Peach Bottom units. The current nonoperating ownership interests of the other joint owners for each Peach Bottom unit are as follows: PSEG Nuclear LLC, 42.49 percent; DP&L, 7.51 percent; and ACE, 7.51 percent.

II

By an Order dated April 21, 2000, the NRC approved the transfer of the subject Peach Bottom licenses from DP&L and ACE to PECO and PSEG Nuclear LLC. Conforming license amendments were also approved. The April 21, 2000, Order was in response to an application dated December 21, 1999, as supplemented February 11, March 2, and March 16, 2000, and was based in part on the DP&L and ACE interests in the licenses and in the facility being transferred simultaneously, as well as the accumulated decommissioning funds of DP&L and ACE being transferred collectively to the decommissioning trusts of PECO and PSEG Nuclear LLC. The April 21, 2000, Order, with respect to the DP&L and ACE license transfers that were proposed to PECO, was issued in the context of PECO then existing as a stand-alone electric utility, and did not expressly approve the DP&L and ACE license transfers to PECO as it now exists as a subsidiary of Exelon Corporation. Further, the Order did not approve DP&L and ACE license transfers to Exelon Generation Company LLC (EGC), which is to be formed as an indirect subsidiary of Exelon Corporation. The NRC did, however, issue Orders dated August 3, 2000, and October 5, 2000, that respectively approved the direct transfer of the Peach Bottom licenses, to the extent now held by PECO, to EGC, and the indirect transfer of the Peach Bottom licenses, again to the extent now held by PECO, to Exelon Corporation (which indirect transfer occurred on October 20, 2000, by reason of PECO becoming at that time a wholly-owned subsidiary of Exelon Corporation).

By application dated October 10, 2000, PECO, PSEG Nuclear LLC, DP&L, and ACE requested approvals as necessary to allow the Peach Bottom licenses, to the extent now held by DP&L and ACE, to be transferred to PECO (as a subsidiary of Exelon Corporation), to EGC (whether the transferor(s) are DP&L, ACE, or PECO), and to PSEG Nuclear LLC, at two different times, namely, the DP&L transfers first, and the ACE transfers second, if at all. The October 10, 2000, application also requested that the NRC extend the effectiveness of the April 21, 2000, Order to December 31, 2001. No physical changes or changes in the management or operations of the Peach Bottom units are proposed in the application. The application also requested the approval of conforming license amendments to reflect the license transfers that are the subject of the application. The proposed amendments would delete references in the licenses to DP&L and ACE as licensees, as each respective interest is transferred, and add EGC to the licenses at the appropriate time.

Approval of the transfers encompassed by the October 10, 2000, application and conforming license amendments was requested pursuant to 10 CFR 50.80 and 50.90. A notice of the license transfer application and the conforming amendment request, and an opportunity for a hearing was published in the Federal Register on November 27, 2000 (65 FR 70740). No hearing requests or written comments were filed.

Pursuant to 10 CFR 50.80, no license, or any right thereunder, shall be transferred, directly or indirectly, through transfer of control of the license, unless the Commission gives its consent in writing. After reviewing the information submitted in the October 10, 2000, application, the Orders referenced above dated April 21, August 3, and October 5, 2000, and the underlying applications and safety evaluations regarding those Orders, and other information before the Commission, the NRC staff has determined that PSEG Nuclear LLC is qualified to hold, in addition to the interests in the licenses it presently holds, (1) one-half of the interest in the Peach Bottom licenses now held by DP&L, and (2) one-half of the interest in the Peach Bottom licenses now held by ACE; that PECO, as it presently exists as a subsidiary of Exelon Corporation, is qualified to hold, in addition to the interests in the licenses it presently holds, (1) one-half of the interest in the Peach Bottom licenses now held by DP&L, and (2) one-half of the interest in the Peach Bottom licenses now held by ACE; and that EGC is qualified to hold, in addition to the interests in the licenses that it may hold by virtue of transfers from PECO previously and separately approved by the August 3, 2000, Order, (1) one-half of the interest in the Peach Bottom licenses now held by DP&L, which one-half interest may be first transferred to PECO and then to EGC or may be directly transferred to EGC from DP&L, and (2) one-half of the interest in the Peach Bottom licenses now held by ACE, which one-half interest may be first transferred to PECO and then to EGC or may be directly transferred to EGC from ACE; and that each transfer of the licenses, as described, is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission, subject to the conditions described 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 (the Act), and the Commission's rules and regulations set forth in 10 CFR Chapter I; the facility will operate in conformity with the application, the provisions of the Act, and the rules and regulations of the Commission; there is reasonable assurance that the activities authorized by the proposed license amendments 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 license 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 December 27, 2000.

III

Accordingly, pursuant to Sections 161b, 161i, and 184 of the Atomic Energy Act of 1954, as amended, 42 U.S.C. 2201(b), 2201(i), and 2234; and 10 CFR 50.80, It Is Hereby Ordered that each license transfer described in Section II of this Order is approved, subject to the following conditions:

1. DP&L shall transfer to the PECO or EGC decommissioning trusts for Peach Bottom, as appropriate to the transferee, and to the PSEG Nuclear LLC decommissioning trusts for Peach Bottom at the time DP&L's interests in the Peach Bottom licenses are transferred to PECO or EGC and to PSEG Nuclear LLC, all of DP&L's accumulated decommissioning trust funds for Peach Bottom Units 2 and 3, divided equally between the PECO or EGC trusts, as appropriate to the transferee, and the PSEG Nuclear LLC trusts. Immediately following such transfer, the amounts in the PECO or EGC and PSEG Nuclear LLC decommissioning trusts combined with the additional payments from ACE that would be owed to PECO or EGC and to PSEG Nuclear LLC under the respective contractual commitments referenced in the application, which contractual commitments shall be in force and effect at the time of the transfer, and that in turn would be contributed to the respective decommissioning trusts as represented in the application must, with respect to the interests in Peach Bottom Units 2 and 3 transferred from DP&L that PECO or EGC and PSEG Nuclear LLC would then hold, be at a level no less than the formula amounts under 10 CFR Section 50.75.

2. ACE shall transfer to the PECO or EGC decommissioning trusts for Peach Bottom, as appropriate to the transferee, and to the PSEG Nuclear LLC decommissioning trusts for Peach Bottom at the time ACE's interests in the Peach Bottom licenses are transferred to PECO or EGC and to PSEG Nuclear LLC, all of ACE's accumulated decommissioning trust funds for Peach Bottom Units 2 and 3. Immediately following such transfer, the amounts in the PECO or EGC and PSEG Nuclear LLC decommissioning trusts must, with respect to the interests in Peach Bottom Units 2 and 3 transferred from DP&L and ACE that PECO or EGC and PSEG Nuclear LLC would then hold, be at a level no less than the formula amounts under 10 CFR Section 50.75.

3. The decommissioning trust agreements for Peach Bottom Units 2 and 3, with respect to decommissioning trust funds held by EGC and PSEG Nuclear LLC shall provide or continue to provide essentially that:

a. The agreement must be in a form acceptable to the NRC.

b. Investments in the securities or other obligations of the respective parent of the respective licensee, i.e., EGC or PSEG Nuclear LLC, 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 until the trustee has first given the NRC 30 days prior written notice of the payment. In addition, no disbursements or payments from the trust shall be made if the trustee receives prior written notice of objection from the Director, Office of Nuclear Reactor Regulation.

d. The trust agreement shall not be modified in any material respect without prior written notification to the Director, 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(a)(3) of the Federal Energy Regulatory Commission's regulations.

4. With respect to each transfer approved by this Order, after receipt of all required regulatory approvals, the relevant transferor and transferee shall inform the Director, Office of Nuclear Reactor Regulation, in writing of such receipt and of the date of closing of the transfer no later than 1 business day before the date of closing. If any transfer approved by this Order is not completed by December 31, 2001, this Order shall become null and void with respect to such transfer; provided, however, on application and for good cause shown, such date may be extended.

It Is Further Ordered that, consistent with 10 CFR 2.1315(b), license amendments that make changes, as indicated in Enclosure 2 to the cover letter forwarding this Order, to conform the Peach Bottom licenses to reflect the subject transfers are approved. Such amendments as appropriate to the particular license transfer occurring shall be issued and made effective at the time the proposed corresponding license transfer is completed.

It Is Further Ordered that to the extent the previous Order, issued April 21, 2000, related to the license transfers approved by this Order, is inconsistent with this Order, the April 21, 2000, Order is hereby superseded. Also, condition 2 of the April 21, 2000, Order is modified to supplement the reference to PECO with a reference to EGC in the alternative, as appropriate to the actual transferee. In addition, for good cause shown in the application, namely, the delay in receiving other necessary regulatory approvals, the approval of any concurrent transfer of one-half of the DP&L interests and one-half of the ACE interests in the Peach Bottom licenses to PSEG Nuclear LLC shall remain effective until December 31, 2001, under the applicable terms and conditions set forth in the April 21, 2000, Order.

This Order is effective upon issuance.

For further details with respect to this Order, see the application dated October 10, 2000, and the related safety evaluation issued with this Order. Also see the application dated December 21, 1999, and supplements thereto dated February 11, March 2, and March 16, 2000, and the Orders and related safety evaluations dated August 3, and October 5, 2000, pertaining to related Peach Bottom license transfers involving EGC and PECO, which may be examined, and/or copied for a fee, at the NRC's Public Document Room, located at One WhiteFlint North, 11555 Rockville Pike (first floor), Rockville, MD, and are accessible electronically through the ADAMS Public Electronic Reading Room link at the NRC Web site http://www.nrc.gov.

Dated at Rockville, Maryland, this 27th day of December 2000.

For the Nuclear Regulatory Commission.

Jacqueline E. Silber,

Acting Director, Office of Nuclear Reactor Regulation.