First Posted: 7/1/2014
Officials with PPL Susquehanna — owner of the nuclear power plant near Berwick — made a case Wednesday for transferring the plant’s operating license to a new company it’s forming with an out-of-state energy company.
Officials with the U.S. Nuclear Regulatory Commission, whose approval is needed for a license transfer, hosted the public meeting at NRC offices in Rockville, Maryland, and the public was allowed to participate via conference call as well.
PPL Susquehanna plans to merge with Riverstone Holdings LLC to form Talen Energy Corp, which would be the third largest investor-owned independent power producer in the nation.
NRC’s concerns are making that the new company would have the technical expertise to safely operate a nuclear power plant and would have the financial capabilities to safely decommission the plant when the time comes. PPL Susquehanna’s licenses extend into the 2040s.
Jeremy McGuire, vice president of strategic development for PPL Strategic Development LLC, said PPL has been putting “a significant amount of emphasis” on growing its electric utility business in the United States and in the United Kingdom. PPL currently has more than 10 million utility customers in the United Kingdom, Kentucky and Pennsylvania.
PPL Corp. will continue as a rate-regulated utility company, while Talen Energy will be formed by the the merger of PPL Energy Supply and RJD Holdings, which is Riverstone’s power generation portfolio, McGuire said.
PPL shareholders will own 65 percent of Talen and Riverstone shareholders will own 35 percent. PPL Corp. will have no affiliation with Talen. The merger will allow the company to better attract investment and capital, and there be cost reductions in corporate support. It would have Fortune 500 status as of day one, McGuire said.
McGuire said plant safety and performance would be Talen Energy’s chief concerns. “You can’t build value if you’re not running your plants well,” he said.
He also said the company is being set up to have “the best balance sheet among the independent power producers and … the least amount of debt.”
McGuire said PPL expects to file an application for transfer of the license on July 11. He noted that in addition to NRC approval, the merger/license transfer also would need approval of the Federal Energy Regulatory Commission, the Department of Justice and the Pennsylvania Public Utility Commission.
Tim Rausch, vice president and chief nuclear officer at PPL Susquehanna, said the agreement between the companies guarantees no change in operations, management or staff at the power plant.
Scott Strauss, attorney for Allegheny Electric Cooperative Inc., which owns a 10-percent share in the power plant, asked what will change with the plant other than ownership. He was told nothing would change other than ownership.
Strauss noted Allegheny was not advised of or involved in any of the discussions leading up to the agreement between PPL Susquehanna and Riverstone and only became aware of it when it was made public on June 9. Allegheny knows very little about Talen, he said.
Strauss said Allegheny officials have concerns about the management team that will take over Talen and wants to know more about it.
Eric Epstein, chairman of Three Mile Island Alert, a nuclear industry watchdog group, expressed concerns about the license being transferred, given that the NRC has downgraded PPL’s license status because of unexpected shutdowns caused by technical problems and equipment failures at the plant.
After the NRC receives the license transfer application, it will be made available for public review. the NRC has not requirement to approve or reject the application within a certain amount of time, but PPL officials said they are hopeful approval will be granted by Dec. 31.