99-33482. Northeast Nuclear Energy Company, et al. (Millstone Nuclear Power Station, Unit 3); Order Approving Application Regarding Merger of New England Electric System and the National Grid Group PLC  

  • [Federal Register Volume 64, Number 247 (Monday, December 27, 1999)]
    [Notices]
    [Pages 72367-72369]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 99-33482]
    
    
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    NUCLEAR REGULATORY COMMISSION
    
    [Docket No. 50-423]
    
    
    Northeast Nuclear Energy Company, et al. (Millstone Nuclear Power 
    Station, Unit 3); Order Approving Application Regarding Merger of New 
    England Electric System and the National Grid Group PLC
    
    I
    
        Northeast Nuclear Energy Company is authorized to act as agent for 
    the joint owners of the Millstone Nuclear Power Station, Unit 3 
    (Millstone 3), and has exclusive responsibility and control over the 
    physical construction, operation, and maintenance of the facility as 
    reflected in Facility Operating License No. NPF-49. New England Power 
    Company (NEP), one of the joint
    
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    owners, holds a 12.2-percent 1 possessory interest in 
    Millstone 3. The U.S. Nuclear Regulatory Commission issued Facility 
    Operating License No. NPF-49 on January 31, 1986, pursuant to Part 50 
    of Title 10 of the Code of Federal Regulations (10 CFR Part 50). The 
    facility is located in New London County, on the southern coast of the 
    State of Connecticut.
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        \1\ A pending merger of New England Electric System with Eastern 
    Utilities Associates, which owns Montaup Electric Company, would 
    result in an increase in NEP's ownership interest in Millstone 3 to 
    approximately 16.2 percent.
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    II
    
        Under cover of a letter dated March 15, 1999, NEP, a subsidiary of 
    New England Electric System (NEES), and National Grid Group plc 
    (National Grid) submitted an application requesting approval of the 
    transfer of control of the license, to the extent held by NEP in 
    connection with its 12.2-percent ownership interest in Millstone 3, 
    regarding a proposed change in the economic ownership of NEES. The 
    application was supplemented May 20 and June 17, 1999 (collectively 
    hereinafter ``the application'').
        NEP is incorporated in the Commonwealth of Massachusetts. NEES owns 
    all of NEP's common stock and 99.71-percent of its voting securities, 
    with the other 0.29-percent being owned by the public in the form of 
    preferred stock with common voting rights. The requested transfer 
    approval relates to a proposed merger in which NEES is to be acquired 
    by National Grid, a British company. NEES and National Grid entered 
    into a merger agreement on December 11, 1998.
        National Grid is a public limited company incorporated under the 
    laws of England and Wales. It is the only transmission company in 
    England and Wales and is an independent company created as a result of 
    the privatization and restructuring of the British electric system in 
    1990. The application states that National Grid, with its United 
    Kingdom assets and through interconnections with Scotland and France 
    and through its acquisitions of interests in transmission systems in 
    other nations, is the largest privately owned transmission company in 
    the world.
        National Grid has formed NGG Holdings LLC (NGG Holdings), a U.S. 
    entity that is a limited liability company organized in Massachusetts 
    and a wholly owned subsidiary of National Grid. NGG Holdings will merge 
    with and into NEES, with NEES being the surviving entity from that 
    transaction and maintaining its status as a U.S. entity subject to all 
    applicable U.S. laws and regulations. The application states that, for 
    tax purposes, immediately after the merger, NEES will be converted from 
    a Massachusetts business trust into a corporation; specifically, NEES 
    will be merged into a Massachusetts corporation to be named NEES 
    Holdings, Inc., which will then be the surviving entity. The post-
    acquisition capital structure of NEES Holdings, Inc., will be identical 
    to the capital structure of NEES, and NEES Holdings, Inc., will become 
    a wholly owned indirect subsidiary of National Grid, with NEP being a 
    subsidiary of NEES Holdings, Inc., and thus also becoming an indirect 
    subsidiary of National Grid. The application also provides details 
    regarding several companies that will be created for various business 
    reasons as intermediates between National Grid and NEES Holdings, Inc., 
    after the merger is approved, and all of these companies will be either 
    directly or indirectly wholly owned by National Grid. National Grid 
    will register as a public utility holding company under the Public 
    Utility Holding Company Act of 1935.
        Approval of the indirect license transfer that would result from 
    the foregoing transactions was requested pursuant to 10 CFR 50.80. 
    Notice of the application for approval and an opportunity for a hearing 
    was published in the Federal Register on June 30, 1999 (64 FR 35191). 
    Pursuant to such notice, joint Millstone 3 owners Connecticut Light and 
    Power Company (CL&P) and Western Massachusetts Electric Company (WMECO) 
    filed a timely intervention petition and hearing request. Following the 
    submission of further pleadings by the applicants and petitioners, the 
    Commission found that the petitioners had demonstrated standing and 
    proffered two admissible issues (regarding foreign ownership and 
    financial qualifications). The Commission set the case for hearing and 
    issued a schedule for the proceeding. Subsequently, on November 4, 
    1999, the petitioners filed a notice of withdrawal of their petitions 
    to intervene, and the petitioners and the applicants jointly moved for 
    termination of the proceeding due to a settlement reached between the 
    parties. The Commission granted the motion on November 19, 1999. In 
    doing so, it noted that the staff, in its review of transfer 
    applications, examines financial qualifications and foreign ownership 
    issues, and should consider concerns specifically raised in the 
    proceeding relating to those matters when it takes action on the 
    transfer application. North Atlantic Energy Service Corp., et al. 
    (Seabrook, Unit 1 and Millstone Station, Unit 3), CLI-99-28, 50 NRC 
    ______, slip op. (Nov. 19, 1999). The staff has considered those 
    concerns, which are addressed in the safety evaluation supporting this 
    Order.
        Under 10 CFR 50.80, no license, or any right thereunder, shall be 
    transferred, directly or indirectly, through transfer of control of the 
    license, unless the Commission shall give its consent in writing. Upon 
    review of the information in the application, and other information 
    before the Commission, the NRC staff has determined that the proposed 
    merger of National Grid and NEES will not affect the qualifications of 
    NEP as a holder of Facility Operating License NPF-49, and that the 
    indirect transfer of the license, to the extent effected by the 
    proposed merger, is otherwise consistent with applicable provisions of 
    law, regulations, and orders issued by the Commission, subject to the 
    conditions set forth herein. The foregoing findings are supported by a 
    safety evaluation dated December 10, 1999.
    
    III
    
        Accordingly, pursuant to Sections 161b, 161i, 161o, and 184 of the 
    Atomic Energy Act of 1954 (AEA), as amended, 42 U.S.C. 2201(b), 
    2201(i), 2201(o), and 2234; and 10 CFR 50.80, It Is Hereby Ordered that 
    the indirect license transfer referenced above is approved, subject to 
    the following conditions:
        (1) No later than the time the proposed merger with National Grid 
    is consummated, NEP shall establish and make operational a Special 
    Nuclear Committee, as described in the application, having the 
    composition, authority, responsibilities, and obligations specified in 
    the application, provided, however, the Special Nuclear Committee may 
    also have exclusive authority on behalf of NEP over taking any action 
    which is ordered by the NRC or any other agency or court of competent 
    jurisdiction. No material changes with respect to the Special Nuclear 
    Committee may be made without the prior written consent of the 
    Director, Office of Nuclear Reactor Regulation. The foregoing 
    provisions may be modified by the Commission upon application and for 
    good cause shown.
        (2) The Special Nuclear Committee shall have the responsibility and 
    exclusive authority to ensure, and shall ensure, that the business and 
    activities of NEP with respect to the Millstone 3 license are at all 
    times conducted in a manner consistent with the protection of the 
    public health and safety and
    
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    common defense and security of the United States.
        (3) NEP 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 NEP to 
    its direct or indirect 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 percent) of NEP's consolidated net utility plant, as recorded on 
    its books of account.
        (4) Should the proposed merger not be completed by December 30, 
    2000, this Order shall become null and void, provided, however, upon 
    application and for good cause shown, such date may be extended.
        This Order is effective upon issuance.
        For further details with respect to this Order, see the initial 
    application dated March 15, 1999, and the supplements dated May 20 and 
    June 17, 1999, and the safety evaluation dated December 10, 1999, which 
    are available for public inspection at the Commission's Public Document 
    Room, the Gelman Building, 2120 L Street, NW., Washington, DC, 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 10th day of December 1999.
    
        For the Nuclear Regulatory Commission.
    Roy P. Zimmerman,
    Acting Director, Office of Nuclear Reactor Regulation.
    [FR Doc. 99-33482 Filed 12-23-99; 8:45 am]
    BILLING CODE 7590-01-P
    
    
    

Document Information

Published:
12/27/1999
Department:
Nuclear Regulatory Commission
Entry Type:
Notice
Document Number:
99-33482
Pages:
72367-72369 (3 pages)
Docket Numbers:
Docket No. 50-423
PDF File:
99-33482.pdf