The Indian Point site includes, among other things, three facilities, Indian Point Nuclear Generating Unit 1 (IP Unit 1), Indian Point Nuclear Generating Unit 2 (IP Unit 2), and Indian Point Nuclear Generating Unit 3 (IP Unit 3). Spent nuclear fuel is, and will continue to be, stored in two spent fuel pools at the site, as well as in dry storage casks on the site. Currently, ENIP2 owns IP Unit 1 and IP Unit 2, while ENIP3 owns IP Unit 3. Both ENIP2 and ENIP3 are indirect wholly-owned subsidiaries of Entergy. Entergy Nuclear Operations, Inc. (ENOI) is an indirect wholly-owned subsidiary of Entergy which operates and maintains Indian Point pursuant to licenses from the Nuclear Regulatory Commission (NRC). ENIP2, ENIP3, and ENOI are electric corporations subject to the jurisdiction of the Commission; all three corporations are subject to the lightened regulation regime pursuant to previous Commission Rulings. IP Unit 1 and IP Unit 2 were transferred from ownership by Consolidated Edison Company of New York, Inc. to ownership by ENIP2 through an agreement approved, subject to conditions, by the Commission.

IP Unit 1 was permanently shut down in October 1974. Pursuant to a settlement agreement entered into by the State of New York, several state agencies including the Department of Public Service, the Attorney General of the State of New York, Riverkeeper, Inc., ENIP2, ENIP3, and ENOI, IP Unit 2 and IP Unit 3 will cease operations no later than April 30, 2020 and April 30, 2021, respectively. In addition, ENIP2 and ENIP3 submitted a Retirement Notice to the Commission stating that they will retire IP Unit 2 and IP Unit 3 no later than April 30, 2020 and April 30, 2021, respectively.

The two-part transaction contemplated in the Petition is targeted to occur in May 2021 if all conditions precedent in the Membership Interest Purchase and Sale Agreement have been satisfied at that point. The conditions precedent include, inter alia, the issuance of Required Regulatory Approvals, the cessation of reactor operations, and the removal of all nuclear fuel from the IP Unit 2 and IP Unit 3 reactors into the site’s spent nuclear fuel pools.

The first part of the two-part transaction contemplated in the Petition is an internal reorganization involving the transfer of Indian Point and other assets and liabilities from ENIP2 and ENIP3 to two limited liability companies whose membership interests will ultimately be owned by another limited liability holding company, Merchant Properties, LLC, which will be an indirect wholly-owned subsidiary of Entergy.

The second part of the two-part transaction is a transfer of the membership interests in Merchant Properties, LLC to NAMCo, a wholly-owned subsidiary of Holtec. This will result in NAMCo, and therefore Holtec, indirectly owning Indian Point and the related assets and liabilities formerly owned by ENIP2 and ENIP3. NAMCo will subsequently merge with Merchant Properties, LLC, resulting in NAMCo directly owning Holtec Indian Point 2, LLC and Holtec Indian Point 3, LLC, which will directly own the portions of Indian Point and assets and liabilities formerly owned by ENIP2 and ENIP3, respectively.

Holtec also indirectly owns Holtec Decommissioning International, LLC (HDI), which jointly owns, as the majority owner, Comprehensive Decommissioning International, LLC (CDI). The minority owner of CDI is SNC-Lavalin Group, through its subsidiary Kentz USA Inc. If the transaction is consummated, HDI will oversee and manage decommissioning, site restoration, and spent fuel management operations at Indian Point. CDI will act as the Decommissioning General Contractor for Indian Point pursuant to a Decommissioning General Contractor Agreement between HDI and CDI.

The Petition was accompanied by a redacted copy of the Membership Interest Purchase and Sale Agreement as Exhibit 1, the resumes of relevant employees of Holtec and Holtec subsidiaries as Exhibit 2, a Schedule and Financial Information for Decommissioning as Exhibit 3, an Environmental Assessment Form as Exhibit 4, and a proposed Notice Pursuant to State Administrative Procedure Act as Exhibit 5. An unredacted copy of the Membership Interest Purchase and Sale Agreement was submitted to the Commission’s Records Access Officer with a request for exemption from disclosure. Furthermore, on December 20, 2019, Petitioners filed the Post Shutdown Decommissioning Activities Report (PSDAR) including Site-Specific Decommissioning Cost Estimate (DCE) for Indian Point Nuclear Generating Units 1, 2, and 3 that includes HDI’s description and representation of its proposed decommissioning and site restoration activities at Indian Point.

In the Petition, the Petitioners request that the Commission either: (a) issue a declaratory ruling finding that the Commission does not have jurisdiction over the proposed Transfers on the basis that Indian Point will no longer be electric plant subject to the jurisdiction of the Commission at the time of the Transfers; (b) issue a declaratory ruling finding that the proposed Transfers do not require review under New York State Public Service Law (PSL) § 70 because they involve only internal restructuring and a transfer of membership interests between merchant parties upstream from the entity that owns and operates the facility at issue; or (c) issue an Order approving the proposed Transfers under PSL § 70 based on a finding that the Transfers are in the public interest.

The Petitioners assert that the Commission has used a three-prong test to determine whether proposed transactions between merchant entities should be approved pursuant to PSL § 70 and that the proposed Transfers satisfy that test. Specifically, the Petitioners assert that the Transfers present no market power issues, that Holtec will have financial wherewithal to decommission the Indian Point site through the three Indian Point Nuclear Decommissioning Trust Funds, and that Holtec has the technical qualifications and decommissioning expertise necessary to decommission Indian Point and perform site restoration. Furthermore, the Petitioners assert that the Transfers will allow decommissioning and site restoration at Indian Point to be undertaken using Holtec’s “DECON” plan, which will allow partial site release by the end of 2036, decades sooner than if Entergy retained Indian Point and decommissioned the site over 60 years. The Petitioners assert that the Transfers, by allowing Holtec to implement the DECON plan, will provide substantial benefits to Indian Point employees, the local communities, and New York State. The Petitioners also request that, should the Commission determine review of the proposed Transfers under PSL § 70 is necessary, the Commission determine that the Transfers will not have a significant adverse impact on the environment, adopt a negative declaration pursuant to the State Environmental Quality Review Act, and undertake no further environmental review.

The Commission seeks comment on whether the Petition should be granted in whole or in part, whether any conditions should accompany a grant of the Petition in whole or in part, and whether the Commission should take any other action related to the Petition or the Petitioners. In particular, comment is sought regarding: (a) whether the Transfers should be reviewed pursuant to PSL § 70; (b) whether the three-pronged test described in the Petition is the appropriate standard for reviewing the Transfers pursuant to PSL § 70; and (c) whether the Transfers should be approved pursuant to PSL § 70, including whether the Transfers are in the public interest. Commenters should consider addressing specific issues including, but not limited to: (a) the financial wherewithal of Holtec and its subsidiaries to take ownership of Indian Point and the associated assets and liabilities and to take responsibility for decommissioning and site restoration at Indian Point; (b) the technical fitness of Holtec and its subsidiaries, including HDI and CDI, to decommission and perform site restoration at Indian Point; (c) the cost estimates and decommissioning and site restoration plans provided in the Petition, its Exhibits, and the PSDAR and DCE; (d) whether additional information or assurances are needed regarding site restoration; (e) risk of shortfalls or bankruptcy and means to address such risks and impacts on the trust funds, decommissioning, and site restoration; (f) the sufficiency of the Petition, its Exhibits, and the PSDAR and DCE in addressing the Petitioners’ responsibilities under relevant laws, regulations, guidance, and orders, including, but not limited to, the Commission order approving the sale of IP Unit 1 and IP Unit 2 to Entergy and its subsidiaries and the Commission rulings approving lightened regulation for ENIP2, ENIP3, and ENOI; and (g) status of any money that may remain in the trust funds after decommissioning and site restoration is complete.

Initial comments are due on or before April 7, 2020, with reply comments to be submitted on or before April 28, 2020.

The full text of the Petition and the full record of the proceeding may be reviewed online at the Department of Public Service web page: www.dps.ny.gov. The Commission may adopt, reject, or modify, in whole, in part, and/or with conditions, the action proposed and may resolve related matters.

Statements and analyses are not submitted with this notice because the proposed rule is within the definition contained in section 102(2)(a)(ii) of the State Administrative Procedure Act.

(19-E-0730SP1)