01-7992. Niagara Mohawk Power Corporation Nine Mile Point Nuclear Station, Unit Nos. 1 and 2; Notice of Consideration of Approval of Direct and Indirect Transfer of Facility Operating Licenses and Conforming Amendments, and Opportunity for a Hearing

The U.S. Nuclear Regulatory Commission (the Commission) is considering the issuance of an order under 10 CFR 50.80 approving the direct transfer of Facility Operating Licenses Nos. DPR-63 and NPF-69 for the Nine Mile Point Nuclear Station, Unit Nos. 1 and 2 (NMP-1, NMP-2), to the extent the NMP-1 license is held by Niagara Mohawk Power Corporation (NMPC) as exclusive owner and operator of NMP-1, and to the extent the NMP-2 license is held by NMPC as part-owner and exclusive operator of NMP-2, and New York State Electric & Gas Corporation (NYSEG), Rochester Gas and Electric Corporation (RG&E), and Central Hudson Gas & Electric Corporation (CHGEC) as part-owners of NMP-2. The remaining part-owner of NMP-2, Long Island Lighting Company (doing business as Long Island Power Authority), which has an undivided 18% ownership interest in NMP-2, is not involved in the proposed transaction described herein, and accordingly will retain its ownership interest in and remain a licensee for NMP-2. The direct transfer of the NMP-1 and NMP-2 licenses would be to a new limited liability company, Nine Mile Point Nuclear Station, LLC (NMP LLC). NMP LLC will be an indirect subsidiary of Constellation Nuclear, LLC, which is presently a subsidiary of Constellation Energy Group, Inc. (CEG). The Commission is also considering approving associated indirect license transfers to the extent such would be effected by a realignment of the CEG organization involving the creation of a new holding company, currently referred to as New Controlled, or by Virgo Holdings, Inc. (Virgo), an indirect wholly owned subsidiary of The Goldman Sachs Group, Inc., acquiring up to a 17.5% voting interest in New Controlled. The Commission is further considering amending the licenses for administrative purposes to reflect the proposed direct transfer. The facility is located in Oswego County, in the State of New York.

According to a February 1, 2001, application (consisting of a proprietary and a non-proprietary version) filed by Constellation Nuclear, LLC, on behalf of NMP LLC, NMPC, NYSEG, RG&E, and CHGEC, which was supplemented by letters from Constellation Nuclear, LLC, dated March 1 and March 16, 2001, NMP LLC would assume title to NMP-1 following approval of the proposed license transfer, and would assume the 82-percent ownership interest in NMP-2 currently held by NMPC, NYSEG, RG&E and CHGEC. In addition, NMP LLC would become responsible for the operation of both NMP-1 and NMP-2. The application states that NMP LLC will also assume the decommissioning responsibility of the current owners of NMP-1 and NMP-2 who are transferring their interests in the facilities to NMP LLC. NMP LLC will provide decommissioning funding assurance through the use of decommissioning trusts coupled with parent company guarantees.

No physical changes to the facility or operational changes are being proposed in the application. The application states that upon closing, substantially all NMPC employees will become employees of NMP LLC.

The application also states that Virgo may in the future exercise rights to acquire additional voting interests beyond 17.5% in New Controlled. The Commission is not considering at this time approving any indirect license transfers that may be associated with Virgo acquiring such additional voting interests.

The proposed amendments would replace references to NMPC, NYSEG, RG&E, and CHGEC in the licenses with references to NMP LLC, as appropriate, and make other administrative changes to reflect the proposed transfer.

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 shall give its consent in writing. The Commission will approve an application for the direct transfer of a license if the Commission determines that the proposed transferee is qualified to hold the license, and will approve an application for an indirect transfer if the Commission determines the underlying transaction effectuating the transfer will not affect the qualifications of the holder of the license, and in both cases if the transfer is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto.

Before issuance of the proposed conforming license amendment, the Commission will have made findings required by the Atomic Energy Act of 1954, as amended (the Act), and the Commission's regulations.

As provided in 10 CFR 2.1315, unless otherwise determined by the Commission with regard to a specific application, the Commission has determined 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. No contrary determination has been made with respect to this specific license amendment application. In light of the generic determination reflected in 10 CFR 2.1315, no public comments with respect to significant hazards considerations are being solicited, notwithstanding the general comment procedures contained in 10 CFR 50.91.

The filing of requests for hearing and petitions for leave to intervene, and written comments with regard to the license transfer application, are discussed below.

By April 23, 2001, any person whose interest may be affected by the Commission's action on the application may request a hearing, and, if not the applicants, may petition for leave to intervene in a hearing proceeding on the Commission's action. Requests for a hearing and petitions for leave to intervene should be filed in accordance with the Commission's rules of practice set forth in subpart M, “Public Notification, Availability of Documents and Records, Hearing Requests and Procedures for Hearings on License Transfer Applications,” of 10 CFR part 2. In particular, such requests and petitions must comply with the requirements set forth in 10 CFR 2.1306, and should address the considerations contained in 10 CFR 2.1308(a). Untimely requests and petitions may be denied, as provided in 10 CFR 2.1308(b), unless good cause for failure to file on time is established. In addition, an untimely request or petition should address the factors that the Commission will also consider, in reviewing untimely requests or petitions, set forth in 10 CFR 2.1308(b)(1)-(2).

Requests for a hearing and petitions for leave to intervene should be served upon Jay E. Silberg, counsel for Constellation Nuclear, LLC, at Shaw Pittman, 2300 N Street, NW., Washington, DC 20037 (tel. [phone]; fax [phone]; e-mail: [e-mail]); Mark J. Wetterhahn, counsel for NMPC, at Winston & Strawn, 1400 L Street, NW., Washington, DC 20005 (tel. [phone]; fax [phone]; e-mail: [e-mail]); Daniel F. Stenger, counsel for RG&E, at Foley and Lardner, 888 16th St., NW., #700, Washington, DC 20006 (tel. [phone]; fax [phone]; e-mail: [e-mail]); Mary A. Murphy, counsel for NYSEG, at LeBoeuf, Lamb, Greene & MacRae, L.L.P., 1875 Connecticut Ave, N.W., Suite 1200, Washington, D.C. 20009 (tel. [phone]; fax [phone]; e-mail: [e-mail]); Robert J. Glasser and Bo Hong, counsel for CHGEC, at Gould & Wilkie, LLP, One Chase Manhattan Plaza, 58th Floor, New York, NY 10005 (tel: [phone]; fax [phone]; e-mail: [e-mail] and [e-mail]); the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555 (e-mail address for filings regarding license transfer cases only: [e-mail]); and the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff, in accordance with 10 CFR 2.1313.

The Commission will issue a notice or order granting or denying a hearing request or intervention petition, designating the issues for any hearing that will be held and designating the Presiding Officer. A notice granting a hearing will be published in the Federal Register and served on the parties to the hearing.

As an alternative to requests for hearing and petitions to intervene, by May 2, 2001, persons may submit written comments regarding the license transfer application, as provided for in 10 CFR 2.1305. The Commission will consider and, if appropriate, respond to these comments, but such comments will not otherwise constitute part of the decisional record. Comments should be submitted to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff, and should cite the publication date and page number of this Federal Register notice.

For further details with respect to this action, see the application dated February 1, 2001, and supplements dated March 1 and March 16, 2001, available for public inspection at the Commission's Public Document Room located at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland, and accessible electronically through the ADAMS Public Electronic Reading Room link at the NRC Web site (http://www.nrc.gov).

Dated at Rockville, Maryland, this 27th day of March 2001.

For the Nuclear Regulatory Commission.

Peter S. Tam,

Senior Project Manager, Section 1, Project Directorate 1, Division of Licensing Project Management, Office of Nuclear Reactor Regulation.