Federal Register / Vol. 62, No. 145 / Tuesday, July 29, 1997 / Notices 40549

Program: This meeting will review

applications for Fellowships for College

Teachers and Independent Scholars in

American Studies, Rhetoric,

Communication and Media, submitted

to the Division of Research and

Education for projects at the May 1,

1997 deadline.

2. Date: August 5, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 315.

Program: This meeting will review

application for Fellowships for

University Teachers in Philosophy,

submitted to the Division of Research

and Education for projects at the May 1,

1997 deadline.

3. Date: August 6, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 315.

Program: This meeting will review

applications for Fellowships for

University Teachers in Religious

Studies, submitted to the Division of

Research and Education for projects at

the May 1, 1997 deadline.

4. Date: August 7, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 315.

Program: This meeting will review

applications for Fellowship for College

Teachers and Independent Scholars in

Sociology, Psychology and Education,

submitted to the Division of Research

and Education for projects at the May 1,

1997 deadline.

5. Date: August 11, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 315.

Program: This meeting will review

applications for Fellowships for

University Teachers in Anthropology,

submitted to the Division of Research

and Education for projects at the May 1,

1997 deadline.

6. Date: August 11, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 415.

Program: This meeting will review

applications for Fellowships for

University Teachers in Classical,

Medieval, and Renaissance Studies,

submitted to the Division of Research

and Education for projects at the May 1,

1997 deadline.

7. Date: August 12, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 315.

Program: This meeting will review

applications for Fellowships for

University Teachers in Art and

Architectural History, submitted to the

Division of Research and Education for

projects at the May 1, 1997 deadline.

8. Date: August 12, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 415.

Program: This meeting will review

applications for Fellowships for College

Teachers and Independent Scholars in

Art History, submitted to the Division of

Research and Education for projects at

the May 1, 1997 deadline.

9. Date: August 13, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 315.

Program: This meeting will review

applications for Fellowships for College

Teachers and Independent Scholars in

Ancient, Medieval, and Early Modern

Studies, submitted to the Division of

Research and Education for projects at

the May 1, 1997 deadline.

10. Date: August 14, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 315.

Program: This meeting will review

applications for Fellowships for

University Teachers in Asian, African,

and Near Eastern Studies, submitted to

the Division of Research and Education

for projects at the May 1, 1997 deadline.

11. Date: August 14, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 415.

Program: This meeting will review

applications for Fellowships for College

Teachers and Independent Scholars in

American Literature, submitted to the

Division of Research and Education for

projects at the May 1, 1997 deadline.

12. Date: August 15, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 315.

Program: This meeting will review

applications for Fellowships for

University Teachers in American

Literature, Linguistics, and Literary

Criticism, submitted to the Division of

Research and Education for projects at

the May 1, 1997 deadline.

13. Date: August 18, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 315.

Program: This meeting will review

applications for Fellowships for College

Teachers and Independent Scholars in

British Literature, submitted to the

Division of Research and Education for

projects at the May 1, 1997 deadline.

14. Date: August 19, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 415.

Program: This meeting will review

applications for Fellowships for

University Teachers in British

Literature, submitted to the Division of

Research and Education for projects at

the May 1, 1997 deadline.

15. Date: August 21, 1997.

Time: 8:30 a.m. to 5:00 p.m.

Room: 315.

Program: This meeting will review

applications for Fellowships for College

Teachers and Independent Scholars in

Political Science, International Affairs,

and Jurisprudence, submitted to the

Division of Research and Education for

projects at the May 1, 1997 deadline.

Nancy E. Weiss,

Advisory Committee Management Officer.

[FR Doc. 97–19900 Filed 7–28–97; 8:45 am]

BILLING CODE 7536–01–M

NUCLEAR REGULATORY

COMMISSION

[Docket No. 50–443 (License No. NPF–86)]

North Atlantic Energy Service

Corporation and Great Bay Power

Corporation; (Seabrook Station, Unit

No. 1)

Exemption

I.

Great Bay Power Corporation (Great

Bay) is the holder of a 12.1324-percent

ownership interest in Seabrook Station,

Unit No. 1 (Seabrook). Its interest in

Seabrook is governed by License No.

NPF–86 issued by the U.S. Nuclear

Regulatory Commission (the

Commission or NRC), pursuant to Part

50 of Title 10 of the Code of Federal

Regulations (10 CFR part 50), on March

15, 1990, in Docket No. 50–443. Under

this license, only North Atlantic Energy

Service Corporation (North Atlantic),

acting as agent and representative of 11

joint owners listed in the license, has

authority to operate Seabrook. Seabrook

is located in Rockingham County, New

Hampshire. The license provides,

among other things, that it is subject to

all rules, regulations, and orders of the

NRC now or hereafter in effect.

II.

Great Bay was established in 1994 as

a successor to EUA Power Corporation,

which had filed for reorganization

under Chapter 11 of the U.S.

Bankruptcy Code. Great Bay is a nonoperating, 12.1324-percent co-owner of

Seabrook and sells its proportionate

share of power from Seabrook on the

wholesale electricity market. In January

1997, Great Bay became a wholly owned

subsidiary of BayCorp Holdings, Ltd.

(BayCorp).

By letter dated May 8, 1996, North

Atlantic requested, for itself and as

agent for the joint owners of Seabrook,

approval of the indirect transfer of

control of Great Bay’s interest in

Operating License NPF–86 through the

formation of a holding company above

Great Bay. In connection with its review

of the requested action, the NRC staff

determined that Great Bay does not
40550 Federal Register / Vol. 62, No. 145 / Tuesday, July 29, 1997 / Notices

1New Hampshire statutes provide for the

establishment of a Nuclear Decommissioning

Financing Fund (the Fund) in the office of the State

Treasurer for each nuclear electric generating

facility in the state. New Hampshire statutes also

provide for the establishment of a Nuclear

Decommissioning Financing Committee (NDFC)

with the responsibility to review the adequacy of

the Fund periodically and to establish or revise the

funding schedule. Each joint owner is required by

the Seabrook Joint Ownership Agreement to pay

monthly at least their respective ownership share of

decommissioning costs into the Fund as established

by the NDFC funding schedule.

2 Great Bay’s share of currently estimated

decommissioning costs is approximately $53.9

million, and Great Bay has already paid

approximately $6.7 million into the

decommissioning fund.

3As part of the EUA Power bankruptcy

settlement, Eastern Utility Associates (EUA), the

former parent of Great Bay’s predecessor, EUA

Power, has guaranteed a maximum of $10 million

at the time of decommissioning to make up for any

shortfall in Great Bay’s payments for its

decommissioning obligation.

meet the definition of ‘‘electric utility’’

as provided in 10 CFR 50.2. As a nonelectric utility, Great Bay must meet the

requirements of 10 CFR 50.75(e)(2) for

assurance for decommissioning funding.

In Great Bay’s case, a surety method

would be required to supplement Great

Bay’s existing external sinking fund.1

On January 22, 1997, the Commission

issued a 6-month temporary exemption

from the requirements of 10 CFR

50.75(e)(2) to North Atlantic and Great

Bay, thereby allowing Great Bay an

opportunity to obtain a surety method,

and to allow the Commission to

approve, without further delay, the

indirect transfer of control permitting

Great Bay to become a wholly owned

subsidiary of BayCorp, which

restructuring the staff believed would

likely enhance Great Bay’s financial

viability.

On February 21, 1997, Great Bay

requested reconsideration of the staff’s

finding that Great Bay does not meet the

NRC’s definition of ‘‘electric utility,’’

and on June 4 and 16, 1997, Great Bay

submitted supplemental financial

information to support its request. Also

included in the June 4 submittal was a

request that the NRC consider granting

an extension to the temporary

exemption as an alternative to

reconsidering at this time whether Great

Bay is an electric utility under the

NRC’s definition.

III

‘‘Electric utility’’ is defined at 10 CFR

50.2 as ‘‘* * * any 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.’’ As

required by 10 CFR 50.75, an entity that

is not an electric utility must provide a

financial assurance mechanism for

decommissioning funding purposes in

the form of prepayment, or an external

sinking fund coupled with a surety

method or insurance, the value of which

may decrease by the amount being

accumulated in the external sinking

fund. Electric utilities do not have to

obtain a surety instrument to

compensate for balances in the external

sinking fund that are below the total

estimated cost of decommissioning.

In determining originally that Great

Bay is not an electric utility, the staff

took note of the fact that Great Bay sells

most of its share of power from

Seabrook on the spot market at marketbased rates. As Great Bay notes, the

Federal Energy Regulatory Commission

(FERC) has ‘‘accepted’’ Great Bay’s

tariffs providing for market-based rates

without regard to whether sales of

power are through contracts of varying

lengths or on the spot market. However,

the FERC has not ‘‘established’’ rates

based on a traditional ratemaking

process that provides for the recovery of

reasonable and prudently incurred costs

as an underlying objective. It is upon

this traditional ratemaking process that

the NRC’s definition of electric utility is

based.

There is no distinction between longterm and short-term sales in connection

with the definition of electric utility, as

Great Bay correctly points out in its

February 21 submittal. To the extent the

staff previously has suggested that there

is any such distinction bearing on

whether Great Bay met the definition of

electric utility, the staff takes this

opportunity to clarify that the definition

of electric utility hinges solely upon

whether or not an entity sells power at

rates based on and established through

a traditional reasonable and prudent

cost-of-service ratemaking process.

Although, as Great Bay argues, FERC

may ‘‘accept’’ market-based tariffs

consistent with FERC’s statutory

responsibilities to ensure that rates are

just and reasonable, the FERC’s

fulfillment of its responsibilities does

not necessarily mean that the particular

electricity seller involved thereby meets

the NRC’s definition of electric utility.

Great Bay has cited the staff’s earlier

statements concerning the status of

Great Bay as an electric utility

immediately following bankruptcy

proceedings involving its predecessor

EUA Power Corporation. Although at

one time the staff believed Great Bay to

be an electric utility, upon further

analysis the staff has concluded that if

Great Bay or its predecessor did not sell

power at rates established by FERC

through a traditional cost-of-service

ratemaking process, that fact alone

would have compelled a finding that

Great Bay was not an electric utility.

Thus, although the staff’s recent

reasoning for its original conclusion that

Great Bay is not an electric utility did

not focus on whether in fact rates were

being established through a traditional

cost-of-service ratemaking process, the

staff’s analysis now compels the same

conclusion.

Great Bay states that it recovers the

cost of the electricity it sells. Although

the staff agrees that Great Bay has

provided evidence that it can generate

sufficient cash to pay for its share of

Seabrook-related expenses, Great Bay

has not indicated that it will recover full

costs, including non-cash costs. The

NRC’s definition of electric utility,

again, is based on cost recovery as a

result of the action of a independent

rate-setting authority, such as FERC,

rather than merely a positive cash flow

resulting from then favorable market

conditions.

Great Bay has provided evidence that

it will continue to be able to fund its

proportionate share of operating costs

and decommissioning funding for

Seabrook for the next 5 years. After

reviewing Great Bay’s current and

projected financial statements submitted

on June 4, 1997, the staff concludes that

it appears Great Bay will be able to

generate cash flow in excess of that

needed to fund its proportionate share

of operating costs and decommissioning

funding obligations. Great Bay has

projected operating income and cash

flow based on what appear to be

reasonable projections of the spot

market price of power from Seabrook

through 2001. The projections indicate

that Great Bay very likely will be able

to meet its operating and

decommissioning cost obligations for

Seabrook through 2001 and likely will

have excess cash to meet many

unforeseen contingencies. However,

Great Bay’s present unfunded

decommissioning liability for its share

of Seabrook is approximately $47.2

million 2 which is in excess of Great

Bay’s present working capital of about

$30 million.3 Thus, in the near term, a

permanent shutdown, and possibly an

extended temporary shutdown, of

Seabrook would mean that Great Bay

would have difficulty meeting its

operational and decommissioning

funding obligations for Seabrook.

In response to the January 22, 1997,

temporary exemption, Great Bay

initiated efforts to find available and

economically feasible decommissioning

funding assurance arrangements. In its
Federal Register / Vol. 62, No. 145 / Tuesday, July 29, 1997 / Notices 40551

June 4, 1997, submittal, Great Bay

reported that underwriting

specifications had been prepared and

issued to the insurance market by AON

Risk Services. Subsequently, on July 7,

1997, Great Bay reported upon the

status of the efforts to locate a suitable

assurance arrangement. Great Bay

reported that a surety bond does not

appear to be available, and the only

insurance mechanism available to Great

Bay at the present time is for Great Bay

to prefund its entire outstanding

decommissioning obligation. Great Bay

asserts that because there is no pool of

similarly situated entities requiring

decommissioning funding assurance,

arrangements such as surety bonds for

such entities are unavailable. Great Bay

asserts further that prefunding the entire

obligation would put Great Bay at an

undue competitive disadvantage.

Great Bay appears to have made a

good faith effort to secure a surety bond

at reasonable cost but has been

unsuccessful in this effort so far, and it

does not appear that Great Bay feasibly

can meet the NRC’s requirement that

non-electric utility power reactor

licensees obtain a surety bond or some

other third-party guarantee mechanism

to provide decommissioning funding

assurance.

IV.

In consideration of the foregoing, the

Commission is granting an extension to

the temporary exemption issued to

Great Bay and North Atlantic on January

22, 1997. This extension to the

temporary exemption from the

requirements of 10 CFR 50.75(e)(2) is

granted to allow Great Bay more time in

which to obtain the additional

assurance for decommissioning funding

required by the regulation.

However, in view of revisions to 10

CFR 50.2 and 10 CFR 50.75 now being

considered by the Commission, this

exemption shall expire 90 days

following the date any revisions to 10

CFR 50.2 and 10 CFR 50.75 become

final agency action, or 1 year from the

date of issuance of this exemption,

whichever date is sooner.

The Commission has determined that

pursuant to 10 CFR 50.12(a)(1), this

exemption is authorized by law, will not

present an undue risk to the public

health and safety, and is consistent with

the common defense and security. The

Commission further has determined that

special circumstances as provided in 10

CFR 50.12(a)(2)(ii) and 10 CFR

50.12(a)(2)(v) are present.

Under criterion (ii), special

circumstances exist in that application

of the regulation in this particular

circumstance is not necessary, for the

period of the exemption, to achieve the

underlying purpose of the rule, which is

to provide additional assurance that

funds will be available for

decommissioning at the end of the

license term or in the event of a

premature shutdown. In this instance,

Great Bay’s projected income and cash

flow indicate that Great Bay very likely

will be able to meet its operating costs

and monthly decommissioning fund

payments for Seabrook through 2001.

Furthermore, Great Bay’s past

contributions to the existing sinking

fund along with its present working

capital and its former corporate parent’s

guarantee, would currently cover nearly

three quarters of Great Bay’s

proportionate share of Seabrook

decommissioning costs.

Furthermore, application of the

requirements of 10 CFR 50.75(e)(2) at

this time would not serve the

underlying purpose of the rule. The

regulation would require Great Bay to

prefund the remaining $47.2 million

decommissioning obligation or to obtain

a surety bond or other third-party

guarantee mechanism for the unfunded

amount. No surety arrangement appears

to be available to Great Bay at this time

other than to fully fund or collateralize

the insurer for the entire obligation

which would make it difficult, if not

impossible, for Great Bay to meet its

day-to-day obligations. Thus, the

underlying purpose of the rule would

not be served by attempting to apply the

rule under these circumstances.

Under criterion (v), special

circumstances exist because the

exemption provides only temporary

relief from the applicable regulation(s),

and Great Bay has made a good faith

effort to comply with 10 CFR 50.75 by

continuing to make payments into an

external sinking fund while making

good faith efforts to locate a suitable

assurance mechanism.

Because this exemption is based on

financial circumstances and projections

that are subject to change and current

market conditions for obtaining surety

methods that are subject to change, this

exemption is subject to the following

conditions:

A. Great Bay is to continue efforts

with due diligence to obtain a suitable

decommissioning funding assurance

arrangement that will meet the

requirements of 10 CFR 50.75(e)(2) and

is to provide a written report 6 months

from the date of issuance of this

exemption to the Director, Office of

Nuclear Reactor Regulation, of the

efforts underway and the progress made

to obtain a suitable decommissioning

funding assurance arrangement.

B. Great Bay shall provide the

Director, Office of Nuclear Reactor

Regulation, its next four unconsolidated

quarterly financial reports, including

statements of income and cash flow, and

balance sheets within 45 days of the

close of each calendar quarter.

C. In the event any circumstance or

condition develops that threatens Great

Bay’s present or future ability to meet its

decommissioning funding obligation, or

if Great Bay is in default of any monthly

payment to the Fund, Great Bay and

North Atlantic are to inform the

Director, Office of Nuclear Reactor

Regulation, immediately in writing.

Pursuant to 10 CFR 51.32, the

Commission has determined that

granting this Exemption will not have a

significant effect on the quality of the

human environment (62 FR 39285).

This exemption is effective upon

issuance.

Dated at Rockville, Maryland, this 23rd day

of July 1997.

For the Nuclear Regulatory Commission.

Samuel J. Collins,

Director, Office of Nuclear Reactor

Regulation.

[FR Doc. 97–19930 Filed 7–28–97; 8:45 am]

BILLING CODE 7590–01–P

NUCLEAR REGULATORY

COMMISSION

[Docket Nos. 50–272 and 50–311, etc.]

Public Service Electric & Gas Co., et al;

Environmental Assessment and

Finding of No Significant Impact

In the matter of: Public Service Electric &

Gas Company, Philadelphia Electric

Company, Delmarva Power and Light

Company, Atlantic City Electric Company,

Salem Nuclear Generating Station, Unit Nos.

1 and 2, Docket Nos. 50–272 and 50–311; and

Public Service Electric & Gas Company,

Atlantic City Electric Company, Hope Creek

Generating Station; Docket No. 50–354;

Environmental assessment and finding of no

significant impact.

The U.S. Nuclear Regulatory

Commission (the Commission) is

considering issuance of an exemption

from certain requirements of its

regulations for Facility Operating

License Nos. DPR–70, DPR–75, and

NPF–57, issued to Public Service

Electric & Gas Company (PSE&G, the

licensee), for operation of the Salem

Nuclear Generating Station, Units 1 and

2, and Hope Creek Generating Station

(Salem/Hope Creek), respectively.

The facilities consist of two

pressurized water reactors, Salem Units

1 and 2, and a boiling water reactor,

Hope Creek, at the licensee’s site located

in Salem County, New Jersey.