[Federal Register Volume 59, Number 172 (Wednesday, September 7, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21970]


[[Page Unknown]]

[Federal Register: September 7, 1994]


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NUCLEAR REGULATORY COMMISSION
[Docket No. 50-443 (License No. NPF-86)]

 

North Atlantic Energy Service Corp. (Seabrook Station, Unit No. 
1); Order for Modification of Order Approving Transfer of License

I

    Great Bay Power Corporation (Great Bay), formerly EUA Power 
Corporation, is the owner of a 12.1324 percent share of Seabrook 
Station, Unit No. 1 (Seabrook). Great Bay's interest in Seabrook is 
governed by License No. NPF-86 issued by the U.S. Nuclear Regulatory 
Commission (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 the 
11 joint owners listed in the license, has the authority to operate 
Seabrook. Seabrook is located in Rockingham County, New Hampshire.

II

    The transfer of any right under License No. NPF-86 is subject to 
NRC approval pursuant to 10 CFR 50.80(a). By letter of May 14, 1993, 
from its counsel, Ropes & Gray, North Atlantic filed two requests with 
the NRC. In one, it requested NRC approval of the indirect transfer of 
control of EUA Power Corporation's 12.1324 percent ownership in 
Seabrook. In the other, it requested an amendment to the Operating 
License to reflect EUA Power Corporation's change of name to Great Bay 
Power Corporation. The name of EUA Power Corporation was formally 
changed to Great Bay Power Corporation in February 1993 following the 
redemption of all outstanding stock in EUA Power Corporation from its 
corporate parent, Eastern Utility Associates. Following the redemption 
of its outstanding stock, EUA Power Corporation was no longer a 
subsidiary of Eastern Utility Associates, and the name was changed to 
remove any implication of a continuing relationship with its former 
corporate parent. The name change did not affect the corporate entity 
of the debtor in bankruptcy. An indirect transfer of ownership occurs 
with the elimination of the existing stock of the debtor (Great Bay) 
and the issuance of new stock to others. On August 16, 1993, the NRC 
issued Amendment 23 to License No. NPF-86 that incorporated the name 
change of EUA Power Corporation to Great Bay Power Corporation in the 
footnote to page 1 of the operating license and issued an order 
approving the indirect transfer of the ownership interest of EUA Power 
Corporation. The order was contingent on the transfer of control being 
completed no later than February 15, 1994, and included the provision 
that upon application and showing of good cause, the order may be 
extended for a short period beyond February 15, 1994.
    On February 3, 1994, North Atlantic, through its counsel Ropes & 
Gray, filed an application requesting extension of the Order until June 
30, 1994, and identified the reasons why the transfer of control could 
not be completed by February 15, 1994. In that application, North 
Atlantic asserted that the sole obstacle to final implementation of the 
Plan of Reorganization was the difficulty with completing the 
contemplated $45 million credit facility for the source of funds to 
cover Great Bay's cash requirements. In lieu of this credit facility, 
the debtor's bondholders (Bondholders) entered into an agreement in 
principle with Omega Advisors that provided for an investment of $35 
million by Omega Advisors in exchange for 60 percent equity in Great 
Bay. This agreement, reached on February 2, 1994, was a modification to 
the Plan of Reorganization and additional time was required to 
formalize the agreement, recirculate a revised Disclosure Statement to 
the creditors, and obtain reconfirmation of the revised Plan of 
Reorganization from the Bankruptcy Court.
    On February 15, 1994, the NRC issued an Order which modified the 
August 16, 1993, Order Approving Transfer of License by extending the 
expiration date to June 30, 1994. On April 7, 1994, a Stock 
Subscription Agreement was entered into with Omega Advisors and Elliot 
Associates, L.P.\1\ (the Investors), and a revised Disclosure Statement 
was circulated to all creditors. The Revised Plan of Reorganization was 
confirmed by the Bankruptcy Court on May 23, 1994, and a closing of the 
transaction was scheduled for June 15, 1994. However, on June 11, 1994 
the Investors notified Great Bay that unanticipated events delaying the 
completion of the Seabrook third refueling outage from early June 1994 
until early August 1994 could affect adversely Great Bay's financial 
projections, and therefore the delay constituted a material adverse 
change in Great Bay's financial condition. The Investors requested 
postponement of the scheduled closing while independent financial and 
engineering consultants retained by the Investors assessed the impact 
of these events. However, these evaluations could not be available by 
June 30, 1994, leading North Atlantic to request, through its counsel 
Ropes & Gray, on June 27, 1994, a second extension of the Order until 
August 31, 1994. On June 30, 1994, the NRC issued an Order which 
modified the August 16, 1993, Order Approving Transfer of License by 
extending the expiration date to August 31, 1994.
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    \1\On April 14, 1994, Ropes & Gray submitted a status report on 
behalf of North Atlantic and a copy of the Supplemental Disclosure 
Statement. That statement disclosed that in addition to Omega 
Advisors, Elliot Associates, L.P., would participate in the 
acquisition of an aggregate of 60 percent of Great Bay's equity 
securities. Previously, Omega Advisors was identified as the sole 
participant in the equity financing. The stock purchase agreement 
discloses that the Omega entities will purchase 49 percent of the 
equity position and Elliot Associates will purchase the remaining 11 
percent.
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    North Atlantic (Ropes & Gray letter of August 17, 1994) now has 
advised the NRC that Great Bay and the Investors have nearly resolved 
their differences and have agreed tentatively to close the transaction, 
but on a slightly modified basis. The modification to the proposal 
originally agreed to would compensate the Investors for loss resulting 
from the extended outage. To effect this, the Great Bay Bondholders 
will place 480,000 shares of Great Bay common stock (to which they 
would otherwise be entitled) into escrow. If, 1 year after closing, the 
Investors' original investment has a market value less than $38.5 
million, some or all of the escrowed shares will be distributed to the 
Investors to raise their investment to that dollar value. Any remaining 
escrowed shares will be distributed to the Bondholders. The net effect 
of such a distribution to the Investors would be to raise their 
ownership share to a maximum of 66 percent rather than 60 percent. 
Because this modification changes the distribution to the Bondholders 
under the Plan of Reorganization, a revised Disclosure Statement must 
be circulated to the creditors and the Bankruptcy Court must reconfirm 
the Plan for Reorganization.
    North Atlantic asserts that additional time, anticipated to be 
about 75 days, is required to obtain reconfirmation of the Plan of 
Reorganization and the requisite regulatory approvals and exhaust any 
appeal periods, but that the timing of events is largely beyond its 
control and estimates are unreliable.
    North Atlantic has requested (Ropes & Gray letter of August 17, 
1994) that the Order's expiration date be extended until the Bankruptcy 
Court issues a Final Decree. On the basis of the information in North 
Atlantic's application (Ropes & Gray letter of August 17, 1994), I find 
that there is good cause to extend the expiration date of the Order 
Approving Transfer of License dated August 16, 1993.

III

    Accordingly, pursuant to Sections 161b, 161i, and 184 of the Atomic 
Energy Act of 1954 (as amended), 42 U.S.C. 2201 et seq., and 10 CFR 
50.80, it is hereby ordered that: the Order Approving Transfer of 
License dated August 16, 1993, is modified to change the latest date 
for completion of the transfer, as specified in Section III of the 
August 16, 1993, Order, to December 31, 1994. Should transfer not be 
completed by this date, the Director of the Office of Nuclear Reactor 
Regulation, upon demonstration by North Atlantic of good cause, may in 
writing relax or rescind any condition of this Order. The Order of 
August 16, 1993, except as modified herein, remains in effect.

    For the Nuclear Regulatory Commission.

    Dated at Rockville, MD, this 30th day of August 1994.
William T. Russell,
Director, Office of Nuclear Reactor Regulation.
[FR Doc. 94-21970 Filed 9-6-94; 8:45 am]
BILLING CODE 7590-01-M