ML13310A361
| ML13310A361 | |
| Person / Time | |
|---|---|
| Site: | San Onofre  |
| Issue date: | 03/25/1981 |
| From: | Tedesco R Office of Nuclear Reactor Regulation |
| To: | Dietch R, Gilman D SAN DIEGO GAS & ELECTRIC CO., SOUTHERN CALIFORNIA EDISON CO. |
| References | |
| NUDOCS 8104010232 | |
| Download: ML13310A361 (6) | |
Text
.F REJ 1 lo UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D. C. 20555 0h March 25, 1981 0 198 Docket Nos.
62 Mr. Robert Dietch Mr. D. W. Gilman Vice President Vice President - Power Sup Southern California Edison Company San Diego Gas & Electric Company 2244 Walnut Grove Avenue 101 Ash Street P. 0. Box 800 P. 0. Box 1831 Rosemead, California 91770 San Diego, California 92112
Dear Gentlemen:
As you are aware, the U.S Congress requires that the Nuclear Regulatory Comvmissinp provide the Subcommittee on Energy and Water Development a monthly report on the major actions taken on operating reactors and on licensing reviews of new facilities In a letter dated February 17, 1981, the Subcommittee on Enerc y and Water Development requested that the monthly report be amended to include arious information for each impacted plant. One category of additional information requested is the utility's best estimate of the monthly cost to maintain each impacted unit in an inactive status while awaiting a full power operatin license.
It is requested that you provide such an estimate including separate costs of replacement energy and the capital expense during the delay period. The NRC will provide the information received to Congress. For your information, enclosed is NRR's estimate of the cost of delay which we plan to include in the Marcn 1981 report to Congress.
Your estimate should be provided orally to the Project Manager by noon Friday, March 27, 1981 and confirmed in writing by April 3, 1981.
Please follow format enclosed in providing thsinomtion.
Sincerely, Robert L. Tedesco, Assistant Director for Licensing Division of Licensing
Enclosure:
NRR's Estimate of Cost of Delay cc:
See next page
Mr. Robert Dietch Vice President Southern California Edison Company 2244 Walnut Grove Avenue P. 0. Box 800 Rosemead, California 91770 Mr. D. W. Gilman Vice President -
Power Supply San Diego Gas & Electric Company 101 Ash Street P. 0. Box 1831 San Diego, California 92112 cc:
Charles R. Kocher, Esq.
James A. Beoletto, Esq.
Southern California Edison Company 2244 Walnut Grove Avenue P. 0. Box 800 Rosemead, California 91770 Chickering & Gregory ATTN:
David R..Pigott, Esq.
Counsel.for San Diego Gas & Electric Company Southern California Edison Company 3 Embarcadero Center -
23rd Floor San Francisco, California 94112 Mr. George Caravaiho City Manager City of San Clemente 100 Avenido Presidio San Clemente, California 92672 Alan R. Watts, Esq.
Rourke & Woodruff Suite 1020 1055 North Main Street Santa Ana, California 92701 Lawrence Q. Garcia, Esq.
California Public Utilities Commission 5066 State Building San Francisco, California 94102 Mr. V. C. Hall Combustion Engineering, Incorporated 1000 Prospect Hill Road Windsor, Connecticut 06095
Mr. Robert Dietch
- 2 Mr. 0. W. Gilman cc:
Mr. P. Dragolovich Bechtel Ppwer Corporation P. 0. Box 60860., Terminal Annex Los Angeles, California 90060 Mr. Mark Medford Southern California Edison Company 2244 Walnut Grove Avenue P. 0. Box 800 Rosemead, California 91770 Henry Peters San Diego Gas & Electric Company P. 0. Box 1831 San Diego, California 92112 Ms. Lyn Harris Hicks Advocate for GUARD 3908 Calle Ariana San Clemente, California 92672 Richard J. Wharton, Esq.
Wharton & Pogalies University of San Diego School of Law Environmental Law Clinic San Diego, California 92110 Phyllis M. Gallagher, Esq.
Suite 222 1695 West Crescent Avenue Anaheim, California 92701 Mr. A. S. Carstens 2071 Caminito Circulo Norte Mt. La Jolla, California 92037 Resident.Inspector, San Onofre/NPS c/o U. S. Nuclear Regulatory Commission P. 0. Box AA Oceanside, California 92054
COST OF DELAY Table 1tidentifies ten nuclear units where the estimated constructio completion date precedes the completion o f the licensing effort.
The NRR staff was asked to develop estimates of the costs that will be incurred as a result 'of these licensing delays.
These est- 'mujte s appear in the attached Table 2. One should be cognizant tat the Csiiiv
- c.
are highly sensitive to underlying assumptions which are hject to much uncertainty (fuel price escalation, sources of replaceient energy available, expected performance of thennuces of ieplacemntenr commercial start-up, etc.).
Thus, the.values reported in Table 2 should only be viewed as benchmark estimates..
Cost of Replacement Energy The selection of an alternativ energy source is not something one can r,*ad: ly predict.
Logically, the utilty will rely upon the least expensive alternativ available..However, what is available will depend on the !system capacit/ m'ix and the demands existing on thesystem during the delay period.
Dependit mjix on these factors, replacement energy may be supplied by sei combinaion of base, intermediate, and peaking units utiliing varying fue sources, or tnru outside purchases.
For the purpose of this assessment, the staff has assumed that all repl'coment energy will be made-D by capacity already on the applicant's system.
1 ;re system is heavil committed to a particular energy source. replaceent energy is viewed as comning totally f rom that source.
If a sy-JteM's 'Ct~ph -ity is heavily distributed among two or more fuel sources, the replacement.irgy is assumed to be equally distributed among those energy souces.m It is assumed that the nuclear unit would have operated at an averae caac i ty factor of 60% during the delay period.
The fuel costs in mils per kWh are based on the following assumptions.
The fuel cost for coal, oil, aid na urAl gas is based on actual values (t per MM BTU) paid by each uLility :,' of.ui I
These values were converted to mills per kWh based on average plant heat. rao.
of 11,000 BTU per kWh for oil and gas-fired plants and 10,000 BTU per kWh frw coal fired plants.
These osts were then escalated at a. nminal 10% per yr,-,
to reflect estimated costs in the '1981-83 timefrane.
The nudler fuel c,:.-t is based on a 1977 estimate of 7.83 mills per kWh (assume, no rcr 'cl c escalated at a nominal rate of 5% per year to reflect estimated cce)t in 1981-83 timeframe.
These nuclear fuel cost assumptions im had on al, of NUREG -0480 (Coal and Nuclear:
A Comparison of the Coa of on labi i
Baseload Electricity by Region).
Capital Expense Dui.n~h DlyPro The capital expense represents the interest charges associated with urr%
in the capital investment during the delay period.
For the purpoes aw thiY analysis it is assumed'that interest accrues on the completed cfpiL co of the facility at the annual rate of 10% per year.
It is our poi'
- n. K this does not represent a real cost to the utility or its ratepie
')it rather shifts the financial burden from one group to the ct 'i r.
r payments) and shi fts payments in time.
Thus for example, r
- .not enclosed
prod dthe state PUC does not allow the inteesth avens to be passed through to the ratepayer, the stockholdrs and thec 'Itility wil be requir, to absorb this cost as it is incurred.
Howeve- 'netencerui does become operational, these additional interest charges will be capitalized and recovered by the utility and its stockholders over 0; unit's useful life.
However, because of current cash flow considrLio, the utility would prefer that the ratepayer absorb the capital expense as soon as practical.
Alternatively, whereas the ratepayers will be relieved of carrying the capital cost of the unit during the delay, they will be assessed higher carrying charges in the future once the uni~t becomes operational it is argued that what they will be saving in carrying charges during the delay period can be invested by them at the current opportunity cost of money to enable them to repay the additional carrying charges of the future.
This neutral Position with respect to increased capital expense is subject to a number of simplifying assumptions:
- a. During the period of delay, the money retained by cu'toners which would otherwise be jaid in rates if the unit were operating can be invested at financial returns equivalent to those costs paid by the utility in carrying the plant in its construction work in progress account.
- b. There I aadequate regional power supply in the short-term
.such that there is no need to make real economic resoirce S copacitments to expedite completion of other generating capacity.
- c. The delayed nuclear unit does not deteriorate during the delay period such that its useful operational life is shortened.
- d. The delayed start-up doesdnot result in the unit being technologically obsolete during the end of its useful life which has now been stretched out because of the delayed start-fp.
COST OF REPLACEMENT ENERGY AND CAPITAL EXPENSE INCURRED DUE TO LICENSING DELAYS (ALL COST ESTIMATES ARE IN CURRENT DOLLARS)
COST OF REPLACEMENT ENERGY CAPITAL EXPENSE Capital Average Esti-Total Replace-Estimated Expense Cost of Incre-mated Replace-meat Capital Delay Capital Replace-Nuclear mental Length ment Energy Cost During Expense REPLACEMENT FUEL ment Fuel Fuel of Energy Cost Per of Unit at Delay Per MIX %
Fuel Cost Cost Delay Cost Month Completion Period Month UNIT MWe COAL OIL GAS Mills/kWh Mills /kWh Mills/kWh Months
$1 x 106 $1 x 106
$1 x 106
$1 x 106 Summer 900 50 50 31.1 10.0 21.1 8
66.4 8.3 800 53.3 6.7 Diablo Canyon I 1084 100 62.2 9.5 52.7 12 300.2 25,0 1050 105.0 8.8 Diablo Canyon 2 1106 100 68.4 10.0 58.4 5
141.4
.28.3 840 35.0 7.0 San Onofre 2 1100 100 60.3 9.5 50.8 6
147.0 24.5 1820 91.0 15.2 Zinmner 792 50 50 44.6 10.0 34.6 3
36.0 12.0 1030 25.8 8.6 McGuire 1 1180 100 16.9 9.5 7.4 11 41.8 3.8 770 70.6 6.4 Susquehanna 1 1050 50 50 37.2 10.0.
27.2 8
100.0 12.5 1840 122.7 15.3 Waterford 3 1110 100 50.7 10.5 40.2 3
58.5 19.5 1230 30.8 10.3 Shoreham 1 820 100 41.3 10.0 31.3 1
11.2 11.2 2210 18.4 18.4 Comanche Peak 1 1150 100 26.6 10.5 16.1 2
16.2 8.1 1120 18.7 9.3
- See accompanying text for explanation and underlying assumptions