ML17299A970
| ML17299A970 | |
| Person / Time | |
|---|---|
| Site: | Palo Verde  |
| Issue date: | 01/21/1986 |
| From: | Michael Scott COALITION FOR RESPONSIBLE ENERGY EDUCATION |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| References | |
| 2.206, NUDOCS 8601290150 | |
| Download: ML17299A970 (62) | |
Text
REGULATOR NFORMATION DISTRIBUTION TEM (RIDS)
ACCESSION NBR:,B&01290150 DOC. DATE: 86/01/21 NOTARIZED:
NO FACIL':STN-50;828 Palo Verde Nuclear Stationi Unit ii Arizona Publi STN-50-529 Palo Verde Nuclear Stationi Unit 2i Arizona Publi AUTH. NAME AUTHOR AFFILIATION SCOTT'. L.
Coalition for Responsible. Energy Education RECIP. NAME RECIPIENT AFFILIATION DENTON> H. R.
Office of Nuclear Reactor Regulation~
Director (post 851125
SUBJECT:
Addendum to 860117 shoe cause petitioni per 10CFR2. 20&i requesting pending completion of specidfied regulatory corrective action 5 institution of proceeding on mgt competence.
DISTRIBUTION CODE:
YE03D COPIES RECEIVED: LTR ENCL SIZE:
TITLE: Request for NRR Action (e. g.
- 2. 20b Petitions) 5 elated Colrespondenc NOTES: Standardi zed plant.
OL: 12/31/84 Standardized plant.
05000528 05000529 RECIPIENT ID CODE/NAME PNR-B PD7 PD LEVY M 01 COP IES LTTR ENCL RECIPIENT ID CODE/NAME PhlR-B PD7 LA LICITRAnE 01 COPIES LTTR ENCL lNTERNAL: EDO/ACB ELD EQ FIL EXTERNAL: 24X NRC PDR 04 02 ELD/HDS3 NRR'IR LPDR NSIC 03 05 TOTAL NUMBER OF COPIES REQUIRED:
LTTR ENCL 13
fHV " l "I A
II A
e I
t(. ij(tl 4
I V t I
I tttjl i ~ I t'
hh tih b
h
<<I' ii (V tIP h
h'H HI'ii tjt'lt (i(~w)
W
-tt H't A
I H I
It H>> j@h V
'I
<<5 lh=,
4 W
I,lj II h
h
860k PDR 9
COALITION FOR RESPONSIBLE ENERGY EDUCATION 315 West Riviera Drive
- Tempe, AZ 85282 20, 1986 aS 0>50 aeoWac ADOCK 05000528 PDR
, January Mr. Harold R. Denton, Director Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory. Commission Washington, D.C.
20555 7
RE:
ADDENDUM TO Show Cause Petition (January 17, 1986) Pursuant to 10 CFR 2.206(a)
In the Matter of Arizona Public Service, et al.
(Arizona Nuclear Power Project)- Palo Verde Nuclear Generating
- Station, Unit Nos.
1 and 2), Requesting Suspension of PVNGS No.
2 Operating License Pending Completion of Specified Regulatory and Corrective Actions; Institution of Proceeding on Management Competence and Financial Qualifica'tion of ANPP; and Institution of Special Regulatory Actions Re:
PVNGS Nos.
1 and 2.
Docket Nos.
50-528, 50-529 (License No.
NPF-34 and NPF-41) 10 12 13 14 15 17 18 19 20 21 22 23 24 25 26 1.
This Addendum updates certain issues addressed in previously filed )how Grouse Petition by CREE, dated January 17,
- 1986, based on material coming to the petitioner's attention after or coinci-dent with the filing of said original Petition.
2:
Said Petition addresses possible evidence of schedule pressure<.affecting quality and management performance at Palo Verde Nuclear Generating Station (PVNGS)(pp.
30; 47-52).
Additional evidence of schedulh pressure and financial pressures on Ar'iRona Public Service Company (APS)/Arizona Nuclear Power Project (ANPP) has come to light since filing.
3.
On January 15, ANPP. announced an estimated three-month schedule delay in the projected commercial operation dates for PVNGS-2 and -3.
The estimated cost (primarily due to financing costs) added to the project was put at
$60 million.
ANPP attributed the delays to failure to complete power ascension testing of Unit 1 and receive the'=Unit.~2",license.,
"=ANPP missed two self-imposed target dates of November 1 and December 31 for completion of Unit 1 power ascension and 100% powe'r testing.
2.
7 10 12 13 15 16 17 18 19 20 21 22 23 24 25 26 (Exhibit A.)
4.
Immediately following the announced. schedule revisions, the state Residential Utility Consumer Office (RUCO) filed a Motion with the Arizona Corpor'ation Commission (ACC),to dismiss "Phase 3" of a pending three-phase rate increase hearing for APS.
The third phase of the hearings i~s:;.to~~address initial accounting treatment and planned phase-in of rate increases necessary to allow APS recovery of PVNGS-2 and -3 construction and financing costs.
RUCO~s Motion was explicitly tied to the announced delay in commercial operation of PVNGS-2 and -3, which in turn was caused byoANPP's difficulty in meeting its established target dates for Unit 1 testing and Unit 2 licensing.
(Exhibit.')
5.
RUCO's Motion follows closely upon its successful opposition to an APS Motion to expedite the rate case hearing schedule.
(Exhibit C.),
and its also successful Motion to require additional filings of'he utility.prior to establishment of a hearings schedule for a new rate increase request to begin recovery of Unit 2 costs(Exhibit D).
6.
CREE contends that the net effect of these ACC 'decisions and RUCO motions is to undercut any assumption that the utility and Palo Verde plant manager, APS, is "guaranteed" recovery either timely or complete of a substantial portion of its sunk costs.
7.
Other factors can also be cited.
- RUCO, CREE and other rate case intervenors have urged the ACC to subject PVNGS costs to intensive prudency reviews before additional recovery is authorized.
Of course, such reviews have resulted in substantial
t~
1 f
f
10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 disallowances involving other plants, such as Wolf.Creek, Shoreha and Callaway.
The utility regulatory commissions of Arizona, New Mexico, Texas and California have initiated an extensive audit of construction costs for PVNGS/ANPP, aimed, similarly, at identify-ing potential areas for disallowance of construction cost recover
, Estimates have indicated that the resulting disallowance may exceed 10% of the entire plant cost.
("Investment prudency,"
"excess capacity" and other reviews requested by intervenors in the current APS rate case could result in additional and still larger.-disallowances.)
(Exhibit E.)
Other forms of economic pressure currently being brought to bear upon APS include munici-pal condemnation proceedings and one inter-utility law suit, (Exhib'it F) as well as outstanding 3,egal actions involving the supply of effluent used at PVNGS for auxiliary cooling purposes.
- Indeed, late last year, RUCO went so far as to urge the ACC to
- consider, in the pending APS rate. case,
.the economic feasibility of Unit 3 abandonment,(ExhibitE2).
- Clearly, the customary "assurances" of financial stability are lacking for APS/ANPP.
8.
The seriousness of APS'ituation is attested to by the recent announcement by the utility that the utility may seek interim rate relief related to PVNGS-1 costs, absent which it may face a lowering of its bond ratings.
(Exhibit G.)
Despite recent rate increases, due to as yet unrecovered Palo Verde investment costs, 67% of APS net earnings (for the 12 months ending September, 1985) remain tied up in Allowance for Funds Used During Construction, earning the."utility no r'eturn.
(Exhibit
I
4.
H; source:
AZP Shareholders Association.)
Other financial indica-tors demonstrate similar Palo Verde cost strains.
The utility needs substantial and early cost recovery, or its financial situation will deteviorhteh significantly.
In fact';, were no additional permanent recovery of Palo Verde costs allowed, the.
10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 utility, on these figures, would be faced with insolvency.
More-
- over, as the on-going construction cost'udit
- suggests, temporary.
recovery may not prove permanent.
Therefore, the future financial stability of APS (and hence ANPP) is by no means assured.
Moreove as the foregoing discussion of RUCO's recent response to new PVNGS shedule delays demonstrates, the ability of APS/ANPP to meet its alo Verde timelines is a serious factor in the utility's future financial outlook.
- Clearly, the stage is set for considerable ressure to speed-Qp sqh'edule performance.",':.:
As noted in CREE's original Petition (see above),
some uggestions of possible schedule pressure affecting ANPP performan e
ave arisen.
In addition, the NRC has recently investigated an llegation of schedule pressure in the HVAC subcontractor's (Waldinger Corporation) Quality Assurance
- program, along with othe llegations from the same source.
NRC Inspection Report No. 50-52 anuary 7,
- 1986, pp.
14-17 (Allegation No..RV-85-A-034).
The NRC eport states, in part:
'A'lie ation: Welders do not return unused weld rodsat the e
o their shift, as required....
The reason the weld rod is not being returned is because engineering is pressuring craft 'to meet schedule.
<<I
<< ~
<<I
...[T]he concern that welders were not returning their weld rod@because of schedular"~pressure does;~not 'appear to be valid based on the Quality Control Inspector s
aforemen-
5.
tioned statements that welders were returning their"weld rode owever, it should be noted that a related item within the same llegation that Waldinger had ndt adequately limited the number 4
of people authorized to issue weld rod - was substantiated.
There-fore, it appears questionable that 'NRCg was pru'dent to-liinit its=-invastiga on of the general allegation of schedule 'pressure being brought to ear on craft to a, broad statement by Waldinger Q.C. that one specific incident of such pressure was not known to have occurred g gg g
g g
schedule pressure affecting ANPP as general Project
- Manager, as. we l as Waldinger's prior history of unrelated
- problems, this item of
the allegation merited considerably more intensive investigation.
10.
The thrust of CREE's original Petition was to set out the rima facie case for questions regarding APS/ANPP's management competence and character sufficient to justify the relief reque'ste The issue of financial pressure is raised as one factor which may 17 be acting to undermine ANPP performance.
Other recent incidents 18 have come to light which raise direct questions about ANPP manage-19 ment competence and character.
20 11.
On January 10, 1986, in what appears to be the first radiati n
21 accident at
- PVNGS, two workers received doses as high as 50 milli-22 rems while opening a pressurizer-isolation valve.
(Exhibit I.)
23 12.
On January 7,
- 1986, ANPP discovered evidence of possible 24 tampering with PVNGS-3 wiring.
The incident was reported to NRC o 25 January 9.
(Exhbit J.)
26
6.
13.
In both instances, information on the occurrences was with-"".
eld from the media in 'excess of four days.
In the case of the orker.;contamination
- incident, the media first learned of the ccurrence through the NRC.
In fact, ANPP spokesman Dan Canady 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 indicated on January 13, when the story was made public by the hoenix:Gazette:
"This is the first I'e heard about it."
(Exhibi I-1.)
Subsequently, Canady justified the failure to."inform the edia as follows: "It just wasn't a big thing to them
[ANNP site anagement]."
(Exhibit I.-.2'.).!(However, such incidents are eportable Events.)
In a particularly memorable
- quote, Canady went on to state:
"We consider it a very minor contamination.
~If ou are':workin in an auto re air ara e
ou're oin to et reas from time to time." (Exhibit I-3.
Emphasis added..)
14.
As discussed in CREE's original Petition, the petitioner regards such incidents of failure to inform the media and publi'c of negative news (whether or not receuired to do so by NRC regula-tions) as evidence of lack of management integrity indicative of poor management character.
(CREE Petition pp.
36-40 for prior instances and discussion.)
In addition, the attitude toward worke contamination evinced by Canady's statements (above),
and attribut d
by Canady to ANFP upper echelon management, reflects upon manageme t
character, and, 'arguably, competence negatively.
14.
In the case of the most recent incident of possible tamperin at
- FVNGS, ANPP waited over a week to inform the media.
In light of considerable media attention accorded other possible tampering incidents at PVNGS during 1985 and 1984, ANFP cannot plausibly
claim that media inter'est was not anticipated.
Common sense suggests that quite the opposite was, in fact, the case.
- Again, failure to 'inform the media and,'hence, the general public of incidents of public interest reflects poorly..'on management character.
10 ll 12 13'4 15 16 17 18 19 20 21 22 23 24 25 26 15.
CREE maintains that the incident also provides further l
illustration of questionable management competence in the two critical areas of 'communication,-internally and to the
- NRC, and prompt action on matters affecting plant security.
(CREE Petitio pp. 42-45.)
16.
In this instance, instrument problems which were found to have been caused by the possible tampering were first identified on January 4,
1986.
The evidence of possible sabotage was discovered by ANPP on January 7.
Yet, the NRC was not notified of the possible tampering until January 9.
17.
The gap between the January 4, 1986,. identification of a systems problem and the Januaryg7 identification of the cause thereof is'xplained as the result of delayed attention due to competing issues.
'(Exhibits, J-i,and J-2.)
The gap'between the January 7 discovery of possible sabotage;and':the January 9
notification to the NRC cannot be simi'larly justified, however, particularly in light of concerns expressed by the NRC last year over similar delays in reporting, and in initiating of ANPP I
investigative activity.
(CREE Petition,
- p. 43.)
Such repetitive patterns of poor management lies at the heart of CREE's contentio of management incompetence.
18.
Moreover, it should be noted that claims of pressure from competing issues begs the question of the likelihood, which lies at the core of CREE's request for relief, that simultaneous 7
9
'a 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 operation of PVNGS-2 and -3 will necessarily overtax.ANPP management resources at their present competence levels.
19.
Initial NRC response was from Resident Inspector Roy Zimmer
- man, as follows, according to the Arizona Re ublic:
"It went up the management chain.
Once it was identified at a certain level of management, they flagged it.
"Me would like to see the notification as quickly as possible.
I don't want to say its not' concern of our's but you need to differentiate between an opeirating unit and one that's under construction."
Zimmerman said that becuase there is no nuclear fuel o site for Unit 3, "they don't come under our security requirements."
He said any concern he might have is over the delay at lower levels of recognizing and classifying problems.
Arizona Re ublic, January 19,
- 1986, p.
B-3 (Exhibit J-3).
20.
Mr. Zimmerman's response is considered inadequate for several
- reasons, and appears to indicate a lack of full apprecia-tion of previous NRC concerns expressed to ANPP regarding their responses to incidents of apparent sabotage at all three Units.
(CREE Petition,
~an ta.)
21.
It needs here to be pointed out that CREE spokespeople have previously publicly expressed admiration for the manner in which Mr. Zimmerman has conducted his responsibilities since being a
assigned as Chief Resident Inspector at PVNGS.
Accordingly, the following criticisms are not intended to reflect generally upon him, although they may be indicative of concerns addressed at
9.
numerous. points in CREE's original Petition questioning the capability of routine NRC procedures and enforcement acti'ons
.(particularly their single-issue, often narrowly technical and/or legalistic nature) to adequately identify and address system-wide 7
8 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 patterns of recurring deficient behavior by plant management, suc as are raised by CREE regarding ANPP's management competence.
22.
First of all, to the extent that those remarks are premised upon NRC regulations regarding security necessary for facilities possessing special nuclear materials, they are merely narrowly bureaucratic and legalistic.
They fail to address the probabilit that such recurring, similar and - indeed - threatened acts of tampering as have apparently occurred at PVNGS pose a problem:
of criminal investigation which requires that all evidence be treated as of equal importance to the apprehension of the person or persons responsible for such actions - at whatever PVNGS Unit they may, occur.
23.
The same reasonable inference of a deliberate, continuing sabotage effort reemphasizes the need, previously stressed by the NRC, for prompt investigative activity by ANPP. It'is not merely a question of whether lower levels of plant operation know probable sabotage when they see it and inform upper management; i.e.,
a question of identification. It is, at least as crucially
\\
a question of the
~s eed with vhich the information travels up the management
- chain, management
~res onds with investigative activity and the NRC is notified by management; i.e.,
a question ot
investi ation (and notification).
Additi'onal concerns are raised by ANPP's failure to notify local law enforcement and seek their professional investigative assistance, even in the face of two
~b d
pp ly 1
d d
( h'b'-5.)
7 10 Ill 15 16 put the matter in its simplest form, bloodhounds do less well if asked to follow a cold trail.
Th'is appears to be the concern of the original NRC cautions to ANPP (CREE Petition,
~su ra), shich ANPP management appears not to have heeded.
24.
As such, this recent incident provides y'et another example of ANPP's repetitive pattern of failure to take adequate manage-ment action to prevent recurring deficiencies in crucial areas.
As such,. it clearly raises the question of management competence and supports the petitioner in its request for relief in the form of an Order to Show Cause.
RESPECTFULLY SUBMITTED, THIS ~~DAY OF JANUARY
- 1986, BY:
17 18 19 20 21 22 M
ON L.
SCOTT;.
Intervention Coordinator Coalition for Respon'sible Energy Education 315 West Riviera Drive
- Tempe, AZ 85282 (602)968-2179 23 24 25 26
EXHIBIT A-1 IP-SA By Victor Dricks
.tt-./g-gg Thc Phoenix Gazette caused a three-month scheduling delay for Units 2 and 3, and could add
$60 million to the" cost of the nuclear generating station west'of Phoenix.
..Arizona Nuclear'Power Project execu-tive yice president Ed.Van Brun't.Jr.,
'an'nounced,-Tuesday that Units:2 and 3 will'not begin. operatirig, commercia11y until the third,quarters'of 1986 and f987,.'
respectively.'.
. <<It wa's the first major sdiedule 'revision for the project since offi'cials encountered major difficulties.with"reactor"coolarit, pumps Nore than two years ago.duiing pie'operational testing. for Unit 1;,
. 'The new sche'dule syi11 not increase the-
- construction cost'f the project, but;will add 'inancing
<charges to indrvIdual.
particip'ant's costs. The'plant is owned
'y a
consortiuin of seven Southwest u(Ilities'... "
-.Project'officials.bad, estimated the plants could. be built for.,$9.3,billion.
About $5.9 billion of,th'is is allocated for
,direct construction and
$3.4 billion.
in'rnancing,charges;.
. Arizona Public Service Co. spokesman Brad Parker said today'the scheduling setback is forcing the 19th revision of the utility's share of participation in the Palo Verdeprojectsince'1972..; "',-
~
A'new APS cost estimate will be released in early February, Parker said. "
He added, however, that even, with increased financing charges caused by the delay, APS should be able to keep its shire of the project costs'under the $2.86
'illion cap imposed 'by the Arizona'orporation.
Commission.
Any costs above that figure will have to; be absorbed by the utility.
.. Scheduling setbacks have traditionally
'dded
$ 1 milliorr a day in financing charges to the cost of the triple-reactor project, Parker said. But since only "two of the three Palo Verde units will be
- affected, he said the scheduling delay may add about $60 million to the Palo Verde price tag..
"Youcould figure since APS owns 29;1 p'ercent of the. project, its share, of the increase could be about
$26 million,"
~ Parker said.
"I'in afraid this doesn't surprise me,".
See ~ Reactors, A-4 0 ReeetOI"S From A-1 said Susan Williams, director of the state Residential Utility Consumers Office.
"The long range fear is obviously that this is just the beginning of problems, and as a community we have to hope this plant works, works efficently and soon.
According to Van Brunt, one of the key reasons for the rescheduling is that Unit 2's operating license was not received as soon as anticipated.
Earlier this
- summer, U.S.
Nuclear Regulatory Commission officials ex-pressed reluctance to allow Palo Verde technicians to begin a testing program for Unit 2 until Unit 1 testing was completed.
Federal regulators said they did not want Palo Verde technicians to split their expertise.
In addition, Unit 1, scheduled to enter commercial service in late December 1985, has encountered a spate of prob-e lems since it began splitting atoms May 25.
Project officials have said they have encountered more than the usual share of glitches because Palo Verde uses reactors of a first-of-a-kind design.
EXHIBIT A-2 CoFAMerclal opdragloA ptNf off for Palo Verde Units 2 and 3-Scheduled commercial operation of Units 2 and 3 of Palo Verde Nuclear Generating Station has been delayed about three months, a plant officialsaid late Tuesday.
Ed Van Brunt, executive vice president for the plant, said Units 2 and 3 now are expected to go on line in the third quarters of 1986 and 1987, respectively.
Original schedules called for the commercial operation of Unit, 2 in the middle of this year and in mid-1987 for Unit,3.
Van Brunt said one reason for the schedule change is that the operating license for Unit 2 was not, received as soon as anticipated.
The new schedule "may affect..
the individual participant,'s cost,".
Van Brunt added.
Palo Verde is owned by a
consortium of seven Southwestern" utilities. Arizona Public Service Co.'-
and the Salt River Project are the only participants in Arizona.
Kevin Mosley, an APS spokes-,
- man, said, "We don't expect the cost to go above the ($2.86 billion) cap" agreed to by the state Corpo-
'ation Commission.
Glitch-plagued Unit, 1 is sched-uled to be in commercial operatiori within the next three months.
Operators of the plant missed Palo Verde,'D2 h
'L Palo Velrdls
. Continued fromDl previous self-imposed deadlines of gov. 1 and Dec, 31 for commercial oj>eration.. " '.'
Unit 1 has been out of operation since Thursday, when it shut itself gown after a failure during a test.,
Plant spokesman Dan Canady said
'd'ata taken when the'hutdown, I
occurred are being'nalyzed and r)suits should be available today.
i He said he did not know when tfie unit's reactor will be re'sfarted."
'Ehe unit has,until, March 1, to be, classified as commercial. Ifitmisses
. tPat'ate,~,'APS.-'will, face the'-possibility
'of. penalties under a
'Pte Corporation Commission for-
,,;,. gula. ~i"".
gQCQ ~etn Qgg 2 1@le gs 3' dl8!lclp lhe@Hng 4; Following an announced three-month delay in corn'pletion of the Palo Verde Nuclear Generating Station Units 1 and 2, RUCO has asked the Corporation Commission to drop consideration of Unit 2 costs from the upcoming Arizona Public Service Co. rate hearing.
'n a motion filed late Wednes-day, the. Residential Utility Con-sumer Office said the issue is moot because of the completion'delay.
The request willbe considered by Tom
- Mumaw, the commission's chief hearing officer.
~ APS had asked the commission tosetrates for Unit2aspartof the case that is to go to a hearing before Mumaw Feb. 11.
The utility said it would
- not, Collect the money but would keep track of how much customers owed and charge them retroactively once Unit 2 became operational.
At that time, Unit 2 was sched-,
uled to become operational in mid-1986 and the company said if the rates were not in effect at that time customers would face a hefty; increase after the completion of al second rate heating some time ini 1987.
In its motion, RUCO argued that.
with the new Unit 2 completion
~
date now set for late 1986, the lag
'etween Unit 2 becoming opera-.
tional and the commission deciding
~
on rates in a future case willbe cut considerably. The consumer agency said there is no need to consider Unit2 costs now.
The Feb. 11 hearing willconsider rate increases that would increase APS's annual revenues by
$78.6 million.
The addition of Unit 2 to the APS rate base would increase that figure by $ 194 millionannually.
P-~
U<<li<y 9r0tiP clielleiiges rieecl..
~Dr p'."@@+
0< ApS rate Ibewiiiig The final phase of a three-part deal with an accounting syst m hearing on a
$78.2 million'ate proposed by APS that would allow ncrease sought by the Arizona the utilitytoeventuallyrecoverthe Public Service Co. should be dis-cogts of Unit 2 through phased-in missed the state s ut~l~ty watchdog r
agency has suggested.
quested later.
Susan Williams, director of the esidential Utility Consumer Of.
The watchdog agency has been'ce, said in a filing with the stat
" critical of the Plan, saying it wduld orporation Commission that the assure the'firm ofincluding the cost.
third 'phase no longer is necessary of Unit 2 in ih rah-base and because of announced delays in the require APS. customem
=Q Pay start-up of the palo Verde Nuclear millions of additional dollar:in Generating St tion.
carrying charges.
'PS, a part owner in the facility, Williams said in her motion that being built 50 miles west of down-a hearing on the accounting system town phoenix, said on Tuesday that now should be held later, when the operation of Unit 2 and Unit 3 of commission takes uP the actual rate.
the triple-reactor facility has been increases for Unit 2.
pushed back at, least three months The commission is scheduled to
.U it2hdb hd ldto b
tio b
id 1986 d
second phase set for March 2? and the third immediately after the, he third phase is scheduled to conclusion ofthe second.- -.".
~
t
geog, i
~
~,
l
~
i;;...U>tilityoffice wants
.';:.>,-'ime to study data
- .'::5(sic ls asked'to deny eal (y lheGI'ing for APS "7, '," Nr JOHN STAGGS +
c
' PS is'eeking to have the sents878.2millionannnally..pay back 8187.8 million in costs
~
1-.,'er7>>>><<sscsrs
~
..Zr sniff-FShearingdatemovedfromFeb 10to
'An APS spok'semen called the
.associated with Unit 2 of the Palo
'Pe 1 state Residential 'tility Oct. 31, filing"unfortunate."
Verde Nuclear Generating Station.
j.:~
--8Uioilsuiners Office late Friday re-The utility office said that the;.,
Susan
)Viiiiams, director of the- - -Under'he deferral plan APS
~,'"..
ested that the Arizona Corpora--
commission could not. make an 'tilityoffice, said her office needs would, in effect, be guaranteed the g Commission not move up the 'nfoimed decision regarding the "sufficient time" to review the APS highest authorized rate of return;
"'i'Eing date for Arizona Public,'ate request because all necessary financial data for the period at]east
'16.15 percent. RUCO says the plan
~.....,."...
~
- @rvice Co.'s proposed 8.6 percent'inancial data would not be avail-through
~ the end of the third.< really would cost consumers a total rate increase...,
~
able. An 8.6 percent increase repre-quarter which ends Sept 30, ofabout $470 million.
e
. ~; She said APS has made it clear.
Kevin Mosley, an.APS spokes
- ,that thb data will not be available"=man, said, "EVe think it's unfortu-
'to anyone at least until 60 days;"'nate that they couldn't support us.
- .af'ter the end of'the third quarter,~
The sooner we work on rate shock, "making an Oct.. 30 "hearing date the sooner we'l find a solution." '. '.
.'mPossible" to determine APS' An official of the utility office
-. needs.
-.... ~...
~ claimed the $167.3 millionwould, in 1
-; The watchdog
- agency, in.the effect, be a loan from APS to its
- I'.same filing,also objected toan APS
.customers to pay for costs associ-
-deferral plan by which, over a
ate'd with all=-thiee units of Palo 10-year
- period, ratepayers would Verde.
EXHIBIT"'.D GppG888 APS fate g5 commission. That request, is sched-i1' I ~ -d g
sought by the Arizona Public Ser-Williams said APS filed its latest vice Co. should be turned down by request without enough data be-state utility regulators because it cause it was rushing in an effort to does not, contain financial informa-force the commission into starting tion from all of 1985, the head of hearings on the proposal before a the state Residential Uti)ity Con-final decision is reached on the sumer Office said Thursday.
earlier request.
Susan Wi))iams said the rate "This kind of jockeying of the application the company filed with schedule is totally unfair," she said.
the Arizona Corporation Commis-
)Vi))iams maintained that a fair sion on Wednesday contains data review of the latest request cannot that end in
- June, which wi))
be held without a full year of test handicap her office and others that data and without knowing how may want to file objections to the much of the earlier proposal will be proposal
~
approved.
The hearing on the request won't She also claimed the amount of be held until sometime in 1986, so new revenues sought under the all of 1985's data should be in-latestfilingappearstobeoutofline eluded in the application, she with earlier cost estimates made b contended.
Williams said RUCO, the state Wi))iams said a 1984 request by agency that represents consumers the company that )ater was with-in utility rate-hike cases, wi)) filea drawn asked the commission for request with the commission asking
$ 124 'million for its share ofUnit 2.
that the application be sent back to "This latest request is $70 mil-APS with instructions that itnot be lion more than their ear)ier
- one, refiled until all 1985 financial and they haven't even explained information isavailable..
why they now need more," she said.
The application seeks either a
"1 think we finally are beginning to 19.86 percent rate increase in a
seethetrueco'stsofPalo Verde."
single year or three annua) in-Meanwhi)e, another consumer creases of 6.15 percellt each, Elec-orgamzation
'said it support the tricity rates would increase $j5.94 a a'Pt by APS to Phase in its rate month under the single-year p)an and $16.1g over three years under "The Phase-in Plan softens the the phase-in plan.
economic
- impact, on customers, The added revenues are needed especially low-and fixed-mcome by the utility to help it pay for its customers," said the Arizona Asso-
)
f U t 2 of t) e Pal V
d ciation of Community Organ iza is being built west of Phoenix by a consortium ofutilities.
m,wou)d not take a position on the
'amount of money being sought by APS also has a request for an 8.6 the utility, )caving that instead to percent increase pending before the the rate hearings.
0 The Phoenix Cadette Wed.,Oct.16,1985G-7.
RUC Necskm Pejllo Ve'L~
- By Anthony Sommer The Phoemx Gazette
. An*investigation into the "hidden costs" of the Palo Verde Nuclear
.Generating Station should be a part
'of the next Arizona Public Service Co. rate case,'he Residential Util-
'ty Consumer Office has told the state Corporation Commission.
~ RUCO Director, Susan Williams'equest was made at a prehearing conference conducted by the com-mission Tuesday.
"This is the only occasion to ask how much Palo Verde ultimately will cost Arizona," Williams said.
"It is an opportunity to explore what has been, up until now, the hidden costs of a massive plant."
'. Xsimilar, although less detailed, r'equest was submitted by the Committee on Responsible Energy Education,
--;APS attorneys expressed no ob-jegtion to the'requests to expand the scope of th'e hearing.
",Thisis not going to be an easy
, case to get one's arms around," APS
, counsel Jaron Norberg said.
Tje hearing into APS's request
'or an 8.6 percent rate increase that would give the company 878.2 o How the company should be penalized for extended power plant outages.
Costs of decommissioning the Palo Verde plant and how they should be paid.
o Whether APS should be able to include the cost. of buying, shipping and disposing of nuclear fuels when those services are provided by APS subsidiaries.
o Whether APS should be al-lowed to charge its customers for extra costs found at Palo Verde but not at coal fired plants, including extra security, extra operating per-sonnel and low-level radioactive
. waste disposal.
million in new annual revenues is scheduled to begin Jan. 6.
It promises to be the longest in commission history and last well into the summer.
Among the issues RUCO asked to have included in the hearing are:
o Whether ratepayers should be charged for Palo Verde capacity that is capable of generating more electricity than APS needs. Part of
~ the question is mimed at the need for Unit 3.
oAn analysis of the corporate
~
restructuring of APS last
- year, which has removed several of the company's subsidiaries from the commission's jurisdiction.
oAn 'analysis of federal income tax credits received by APS but not, deducted, from the company's rate base when the commission. deter-mines the value of the company.
o A determin'ation of how much of the Cholla 4 coal-fired generating plant should be in the APS rate-base. Power from the plant is being sold to a
utility. in Southern California at rates lower than APS customers will pay for Palo Verde electricity.
EXHIBIT E-2-",,',
(
~
I~
Wednesday,'ctober 1G, 1985 '
Unit 2 is due to be operating by the, chasesr for other utilities'; and possi-
'lddle of next year and Unit 3 by '.ble "lifeline,'.-or reduced, rates for..;
mid-1987.',
'the needy."" '<'.
'-'-'he commission, which'ill be-She also urged the commission,to
.'in the APS hearings on'an.
G, use caution when
.deciding the
'alledthepre-hearingconferenceto accounting proposal 'advanced by allow'ntervenors to suggest issues APS for Unit 2 because it willhave that they would like to see dis. 'far-reachingaffect.
cussed during the proceedings.:
""Atlfuture rate proc'eedings will
-'- accept the pattern set in this case,"
Currently, the agenda involves shemaintained..*
discussions on proposals by APS to
. Under the plan, APS would delay
increase its electricity revenues by s placing iri its rate base the mainte-i
$78,2 million a year to pay for its nance and operating costs'of Unit 2
.'hareofUnitlofPaloVerdeandto until 1987 and.then, after addi-l begin using a new accounting ap-tional rate hearings, the costs would proach'for Unit"2.when the reactor
'be phased in over a "five-year; begins operating.
period.
Additionally, the commission
~ The company said the plan plans to review its fuel-adjustmeqt would avoid "rate shock" or a large,
'rocedures, which allow APS to 'singlerateincrease,forcustomers.
adjust its rates when the prices jt "", Williams, however, said APS also
pays for fuel and pow'er in'crease..t" wants
. to add 'carrying'charges, Wllilams 'whose agency'has-which would boost the t t'1 amount
'aken part in the past several APS raterPayers eventually would have rate hearings, said the proceedings
~ to pay to 8471"million'from
'should include reviews of the AZP,
.8 G
- Group, the holding company "
"There are other ways to phase formed last year by APS; decisions
.by APS to sell power from one of its Jaron Norberg, APS vice Presi-coal-fired plants to a California "dentand chief counsel, said thatif-utiiity; pianning gor power" pur-t aii of the suggestions made by the consumer agency and other inter<<s-nore were accepted by 'the panel, the rate case couM be expanded so i
= much that itcould gef', out ofhand,
'The. scope of the Arizona Public Service Co. rate hearing now pend-ing before the state Corporation
,Commission needs to be expanded so that the full costs of the Palo
- Verde Nuclear Generating Station can be learned, it was suggested Tuesday.
"This is the time, this is the place to truly assess what Palo Verde is going to cost," said Susan Williams, director of the state'esidential
'UtilityConsumer Office.
She told the utility regulatory panel during a pre-hearing confer-ence that all facets of the nuclear
- plant, includin'g the prudence of building a third reactor, need to be explored at the proceedirigs.
"We must be able to ask ifit is prudent to continue building Unit 3 or willit be more cost effective for the community to abandon Unit 3,"
she added.
APS owns 29.1 percent of the
$9.3 billion three-reactor plant that is being built 60 miles west of downtown Phoenix by a consortium of seven utilities from four states, Unit 1, which is in the testing
- phase, is scheduled to be in full operation by the end of the year, 3
,. This is not gomg to,be, an easy,
'"rate case" for any"of us to put'our
".5
~,""arms aroun'd," he said:l',<'.",r.-"
I.'~.".',Commission Chairnian Renz Jen-
'nings'eau(tioned, too,'that he.hopes the, case does not"get too compli-
'i>r)":4<i~8't;t>f,'".l,l n'.~:'-
However, he urged.APS to-coop; j
crate with the intervuen'ors in their effort:, to obtain information "from',
i.'the'utility as.,they', prepar'e',their,
. "'.-" FRANKTURCO
~
~I n
<< ~
~
3 3
(
s
'ull costs of Palo Verde sou ht -"
The scope of the Arizona Public Service Co. rate hearing
.pending before the state Corporation Commission needs to be expanded so that the fullcosls of the Palo Verde Nuclear Generating Stalion can be learned, according to Susan Williams,,
" director of the state Residential UtilityConsumer OffI'ce. C3. '-,'-,.
~
e
<< ~ t gag g
(
'Z The Arizoi ConSUmel'genCy Ul'geS legUlletols.
~
Ilo exIlendl ScePe OIl'PS mte'ltleel IIvig I
Ii<<'S
~
( I 1h 3 sg 3
'I
',-.*w s
(*t
~ewi y(
g
<<s i1<<+
s
~ <<w
l
EXHIBIT. E-3 If fcIIS
'ost overruns CIf CIO er e
/(-g~gg By Anthon Sommer and Vic'tor Dricks nix Gazette A four-state audit o the construction costs of the Palo Verde Nuclear Generating Station has blamed massive cost overruns on factors ranging from poor quality control to unexpected labor costs.
4 The first phase of the $2.5 millionaudit was released today by the utility regulatory commissions in Arizona, Texas, California and New Mexico.
The study details the reasons Palo Verde costs more than doubled to $5.9 billion from initial estimates of $2.8 billion since planning began in the early 1970s.
Some of the increased costs were blamed on delays in the project. Completion of Unit 1 is 43 months behind schedule, while Unit 2 is expected to come on line 24 months late and Unit 3 is forecast to be 14 months late.
Problems began to arise virtually from the time work began in 1976, according to the study. At that time, there were delays in the awarding of purchase orders and in processing'id evaluations.
By early the next year, the study said, significant delays in engineering for the plant began to appear. They were attributed to holdups caused by the contractor, Bechtel Corp., and major See ~ Audit, A-4 audit
'uppliers, including General Electric and Southern Boiler.
The problem became so'severe that a "design
. freeze" was implemented in February 1977 because project engineers
', were unable to keep up with changes.
The report also was critical of quality control throughout the project and recommended it be given high priority in the second phase of the study, which was scheduled to be completed by July.
The report cited a s'eries of violations for which the project was fined by the federal Nuclear Regulatory Commission, and 60 others for which Palo Verde was cited but not fined.
,; iQsenior management control was-appropriate, these problems may have been diagnosed earlier and the NRC violation possibly avoided," the report
'aid.
Construction boosts made up more
'than* 48 percent of. the..entire cost
overrun, the study sai'd. The'actual cost
-'o build Palo Verde originally was pegged at $2.2 billion and now is estimated at
$3.7 billion. This does not take into consideration management or other costs.
The largest single component of the construction cost overrun was attributed
to labor, which made up 32 percent of the increase.
Labor costs initially were esti-mated at.$462 million and are now expected to reach $938 million.
I That figure is more than the cost-of the average nuclear power plant now operating in the United States.
The construction delays added
$410 million in interest costs alone, the report said.
Management costs for the Arizona
't5 pM co w e PD8'.
fy N E'cz g e C
'tS co'o ccco cog K
eoo ce'
~'>
co 8
Q>c O C4+
co Pe o
~
o c ~
c>NN co o e
gaea~
~'0 g > c o te c
c 'Ct ~ o~ > c pl o CO e
N QQ
~~ee otic'g o~C.em tztc o 4 os c ome "a g'
'c W c =~~>
c oq e p' D o e e c o' P c-claw e~
'l c
p~
occ~~~'ec>os'c4o Wee,~c e
~ c e
e e gj Q ~
o SD
-~C c e o g'o-c
'cn co e+ o e
~ ~ > c-o, ~ t o.~ ~ +
ce ccc ~, c c Pc ~
I g-0 ~ g F ~ 8 e-'+
P>> o o c
~ e cn ecc.'c e ~C 0 O g <~'o
~'co ~ N oee go g 'o c
eeo ~
g g e~~ ~ 0 o coe oe co~.o o e o e ~ e c
co 8 ~ y) 0 e ~o e ~ ~P'g c
o
~cg'e
~c o ~e c
.o
.c ~
e c ~ ~
ckco ce e ~'z5
'e'm~ Ao c
co e
~
o ce c
cn
'o co ~
g) o g e occ c.=- o coe~ee 02
EXHIBIT E-4 2 COASUMGAtS Ibl66llng
<0 ~
- Pl'Ude>Cy'U6lt
'f
~8~0 Veirdle comp)ix
.'A'dozen consulting firms have
- ules, and management decisions bid to work on a construction-and-that were made to'build the plant management "prudency" audit of and to continue it as the nuclear the Palo Verde Nuclear Generating industry changed.
Station, utility regulators in Ari-Bids for work in the sixth area, zona reported Thursday..
which involves how well the consor-lie contra ct offers were filed tium m a na gers oversaiv the work of with regulators from Arizona the general contractor, Bechtel Tex s Cal'fo'nia and New Mexico Power CorP., are not due until next who are planning the review of the power plant, whose construction is 'he bids will be reviewed by a beingcompleted byaconsortiumof special staff committee later this seven utilities from the four states.
- month, and recommendations to
'he regulatory commissions from A preliminary audit of the the four states will be made in
'9.3 billion plant already has iden-
~ mid-February, according to Chris tified about. $3 billion in expenses ICemp]ey, a lawyer with the Arizona that it suggested be scrutinized to
. Corporation Commission.
determine whether they are reason-able and prudent.
He said the study, estimated to cost $1.82 million to $3.25 million, Regulators from the four states
'is expected to take 10.to 12 months have said that if any expenses are to finish.
found to be i~prudent, they will
<<We'ie ]iopjng to have it corn.
not allow the utility owners of the. -p]eted by the end of the year," he plant to include those costs in their electricity rates.
~
The preliminary"audit, com-The bids submitted by the pleted in November, was done by consultants cover five of the six,.the accounting -; firm, of i
areas that will be examined in the:L<'rnst &,Whinney,,which'has been i
audit, including construction costs, liired to, m'anage the audit and engineering
- costs, start-up costs oversee the work of the'ther construction and start-up sched-
'consultants."-'-.
EXHIBIT F-i.
't P
.Page eUieg
- to take ever
'By JOHN S HROEDE ~, g Northern Arizona Buroou L.
T FLAGSTAFFPage has filed al
-". c'ondemnation suit to force Arizona',
Public Service Co. to turn over to
'"the city its electrical-distribution' system in Page.
The condemnation suit was filed "Wednesday in Coconino County
".Superior Court and seeks a hearing
, for APS to show.why Page should not be permitted to take immediate
.'ossession ofthe system.
The suit asks that the title to the system be vested in Page and that
~ the Arizona Corporation Commis-
~ sion's certificate of convenience for APS to operate the system be
- voided.
Page residents, by a 10-1 ratio in i a special election Jan. 29, approved
." spending up to
$ 10 million to "acquire the system.
The City Council,on Feb.
6
~ adopted a
resolution authorizing
" the acquisition by eminent domain.
APS, in an attempt to block the
." takeover, was unsuccessful
'in a
r court suit in February that chal-
~ lenged the legality ofthe election,
. Although the election authorized
",,the city to spend up to $ 10 million o'to acquire the system,",approxi-
~ mately half of that amount would r'o toward acquiring additional elec-
,'tric power.
~," Promoters of the acquisition
<<.contend that the city can operate
," the system at a
lower cost to.
", customers than can APS, A
key I element in.'the.,'ates depends on how much the city must
"., pay APS for the. system. APS has "stated 'that the system',is worth
~ between $8 million and $ 10 million;
, the'ity. contends" it is;worth
" between $3 millionand $5,million,".
i 5
I
EXHIBIT P F age decilsiton $0 eqqnlve ellectl it@ system*
is.uplhelld B~y BREN'f 'QQ/'fJNQ,j./T-Qg was not, occupying, the role ofl
,ArlzonaRO ubllcstalt. g '@';
middleman."
;.A lineman or,Arizona Public
'age, receives
'an allocation of Service Co.failed Thursdaytohave federal power at a preferred-cus-a court overturn'n overwhelming'tomer rate and then sells it to APS,'
'ecision a year ago by Page resi-
'which in turns sells the power to dents to take over the utility's Pagecustomera electric-distribution system there. 'oore, who filed his lawsuit with The state Court of Appeals ruled, the'backing of APS, appealed after unanimously that the $10 million- 'udge William" F.
Garbarino ofond election be validated:
'"~.Coconino County'uperior Court
- However, the court 'dmitted Validated the election March 18.
.'here, were "certain irregularities" '""'=APS could not be a plaintiff in that kept.254.'people who'were the court action because:a plaintiff ineligible to vote on the list ofthosel-must be a registered elector Who allowed to cast ballots.
cast,a ballot in
~ the contested "We are convinced there was no,election,'ccording to state election fraud or chicanery practiced against ',laws,
'he,"voters of.gage,'nd we feel, -,, Meanwhile 'phhrsday, attorneys certain that',the,,result,"of
'the '-for Page and APS agreed that the",
election =,'was.;.,unaffected.'y, the;;; city willput up a $5.9 million bond
..;iiregular'ities'4',Judge,p'homas iC l sol 'that it,,.can,,take,imiriediate
'The. decision steins from a',law-',t'm"'
suit"filed by Page.r'esident. Ronald -"";- '--'- '-~ -~'--'"'
Gene Moore,'"a jouriieyijan'lineman~~~"', Th'at agreement came during the
" foi~APS,<cha]lenging the".election"'~
i d."'day-of; a"= Co'conin'o;'County an 29 in which the vat for SuPerior Co'uit trial:Itresolves'the
~ acquisitionwas1,570t 149..
amount of the bond to be posted Stephen K
Smith' Flagstaff
" 'until a court determines the actual
~ lawyer;who represents Moore, said q a unt the, city must Pay.for the.r
':,,decisiori because,he'hadn't yet's'een-";y>> ~A'-'trial on, that issue'.is'scheduled
"'-it;-.=~,',',.-"i:" + '
-~',~q -,~~;wy.to begin Juri'e 4'in Coco'nino County,,
Moore filed,;his lawsuit, Feb. '8,>',aupe>>or Cour"'.
(> after APS fought,a losing battle to ';<,In,,the,"trial;settled
- Thursday,
,'eep the electricsystem that.has'Page had conten'ded that'the bond served Page for,nearly30years.
.'=:,
should be $3.6 million, while APS
-,", Page', officials.pushed for the attorneys,had contended it should,
,, election, because'th'ey believed,.the.
be, $9.1.'illion',,plus
'everance'="city "could make more money if it,". da'mages."".'"," '
'EX8XBXT F-3
";.I,.'(,"0'l 1985 '"
(H>l '"l
<<g I',<<
<<)l I
" ",'6Sections,60Pages; I
I Phoenix, Arizona Oc}ober'28, esse es've 0 el's,
~>> g g a o 4 a
<<a C a Q Gag~a a
J Q a a a>>3 8>><<l w o cap o~g 8'l5 g g 'j 3,~'>>~ a~ a O<<O
<<ct
>>O U
a, a j 0
g Q
~ I>>4' a a a a a a a>>>> D<<g Q>>o g~.
8>>>>
ED o~
g IV a~
a se<<>> 4c>>
I I
I c>>o~
g,-"<Qa8 I~a
'g-Oayc-5 a o 8 (fl o ~ ~ ~
a~ O a
) Ll(
I ski c af es
.'y James S. Jasper/ABG Corrcsponctcnt If((f(III~('Ilb[
) I Arizona PubhcISer(vice.: Co, is "coercing" developers',".
into building.'alljlectrIc<subdiyisions, according to. a
~
complaintp fdedl,befoie~c')the Arizona Coqmration.'.
Commis'sion'Py',SouQjwest.Gas Corp..
',, 'I'he comp)aint char dies'hat when developers inform ',
APS they intend to budd"dual.energy dwellings in APS-service,'are'as'," the'electrical supplier threatens to assess,:.
the delveloper advance fees for the extension of, electric
..'acilities at rates>200Ipercent to 300 percent higher '
than those assessed on all.electric service.
"Because of the,urijustiTiably high advance fees APS threatened,to assess" them, possible delays by APS in
~
installing such'seiyic'es and the unlikelihood of'a substantial refund,.many of'.these developeis
.were,'oerced into installing aH*electric facilities in'their
~
~
developments,",according to the complaint."
Southviest Gas marketing officials say'hey haVe-contacted approximately 90 developers in the Phoenix,'etropolitan area; many of whom expressed interest in building homes with natural gas service were it,not, for "
'APS'ine extension charges.
"All-electric homes cost ratepayers more in the long run, because they must support the greater investment-in the power planth required to supply the increased demand for electricity," says Dante Pistone, director of ".
communications for Southwest Gss'apago division;:
"APS intends to 'meet this self-created demand with
'igher-priced electrid ty."
In its complaint, Southwest Gas asks the Corpora-tion Commission to,'
Issue a preliminary, order requiring APS'to state.',
the methodology'used in computing its line extension'dvance fees and provide a random sample of at lesst-'-
10 allwlectric subdivisions showing what advance fe@.:
,were"arid'.>what.)they', would have been if. each," '
subdivision'wertr du'allergy.
i issue kiiar'dfy,pr(oviding a schedule und pr which..;
Southw'est Gbi,'.jay'btain information froni,APS on. '.
iS line extension;" licyand practices.
i
'<"Ape l" c
~
.~ Issue;.an'-.o der declaring APS'resent lme...
extensio'n, tar'fffs and'pr'actices discriminatory, antf- ",
com titi e anti l gaily insufficient under the commis".',
APS/AC ":
CIS1ya~
3 8w Ega
<<~
~-< ~ 8AS4~
Es "<
g a
~ g <<>> <<>> <<>> ot
<<>> O<<>><<>>'>>
w ~
a <<
D so Ill g ~ >8
- a..'I8 g g.i L33 o
a ~ 8 4
Hl>> a
(- cl.~ a 5 aoaa-a a~ O' a>>
~ Rs 3a
~>>a a.a c>>o 48'~ e CO M
~ a.5@
i>><<>> (
O,8 I +
a<<>>
>> ~
~
~ o a
~
Q ~D'a g 8 048gMa g a(.O~ggg ~~@
,5~
co O
8,ao Q
Q a M p Q O
- OgbO, a)O Ct boo ao8a8 8~ 6
<<O 53 ~'Kl a.~ S KBl18:y Iva8a$ &
s a-,~,, I-a' IAl!
~gO
~>>
~g co 8 Ls g pVv~ 5>>a ca O O g<<1 a<<>>
Kg.m
+ g~
a'.5 I o 'g oc ggygmoa m I(
~IIX o.>>:
k s~ I 3 5 "~8-ill' i
f<<c I
<< ')I<4( i( Il>> I l ~
( ")<<<<,"
~I l
I fi
AP we To seek 8.69b rise; claims regulators.
decide too slowly By FRANK TURCO Arizona Reprrbllc Slefl Arizona Public Service Co. plans to ask the state Corporation Com-mission in the next two weeks for an interim electric-rate increase of at least 8.6 percent, and it may go to court if it doesn't get it, the Ats IIn'II8F'ompany's chief financial officer revealed Monday.
'Executive vice president, Henry Sargent said the action stems from concerns that the commission is taking too long to act on APS'equest for a permanent rate in-crease.
"We certainly hope the commis-sion willlisten to us," Sargent said during a meeting with the editorial board ofThe Arizona Repubh'e/The Phoenix Gazet te.,-'APS iiled for an 8.6 percent Im hnke; increase last May. Hearings on the proposal willbegin March 27, about 10 months after the filing.
".We don't anticipate a decision on that request for at least six to eight. months," Sargent said.
He said that the $78.2 millionthe increase would produce annually is needed much sooner, and that if APS doesn't get'it, the company's credit ratings and its ability to borrow could be harmed.
- .The increase, he said, is needed to r help pay for building and operating Unit 1 of the Palo Verde Nuclear Generating Station, which is expected to be operating com-mercially in the spring.
APS is among seven utilities involved in the $9.3 billion, triple-reactor plant being built west of Phoenix.
lf APS'osts are not in the company's rate base when Unit 1 begins operating, the company will lose about
$6 million a
- month, Sargent said.
. Such a loss, he claimed, would make it difficultfor the company to regain the "A"bond rating itlost in.
1983 and could even lead to ossible down radin of the current' g
"BBB"rating.
I.ower ratings make it more difficultto attract investors; "We may have to consider court if we don't get an interim rate:
increase," Sargent said.
He maintained that the time it, takes for the regulatory panel to APS, B7 may 88k GOOF'II8 I
..APS i Continued fro'm B6 reaclt decisions in rate cases has been lengthening the past several years.
The last five cases filed by APS took an average of 10 months to decide, he said, and the most recent I took 16 months.
The interim rate increase sought l by APS -brought, an immediate f reaction from Susan
- Williams, di-'ector of the state Residential UtilityConsumer Office, which has intervened in the upcoming APS
~ rate hearing.
She said APS is to blame for most of the delays, first by not filingthe case earlier, as itindicated itwould do in 1984, and then by not responding in a timely fashion to requests for financial information from other participants in the case.
"There's a certain arrogance in their demands for an interim rate increase when they have not acted prudently as managers,"
)Villiams said. "The commission and public willnot tolerate such demands."
EXHIBIT H-1 THE ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION (AFUDC)
AS PERCENT OF NET EARNINGS 1980 1981 1982 1983 1984 9/30/85 (12 mos.)
5-Year Avg.
(1980<<84) 82%
66 72 85 82 67 77 Electric Industr 52%
49 50 47 43 39 APS Ranking in 80-Utility Sample:
12 Months ended 9/30/85:
64th from top 5 Years -- 1980-84:
67th from top Source:
Regulatory Research Associates UTILITY FOCUS
'fi C
EXHIBlT H-2
@PS'J!i(etjj'::
w'Illll:irecIIMe.eiI'6 j'ice'IIIiikes
"".Arizon'a'Public, Ser'vice Co.
's'expected'o" file a'ormal request'with. the'state Corpo-
'ration'.Commission'," on Friday
- , for an'8.'6 peicent.iate increase in'". January'",and';five "arinual-
~ 'increases. of.5.9; percent, the.
-: first'begInnirig in"1987; i
'=;",The, complicated",rate pro-.'posal',
and.supporting:, docu-',
- men6 are being reviewed and
'.'.will be filed as s'oon.as possi-:,,
,ble,
- APS, spokesman","Kevin" "Mosley confirmed Tuesday.'y"';
'-,'osley -'s'aid'the.'"amount"of r'evenue'hat, the
" "increase
~'would'roduce."annually,',and'
'.~,'what,effectit.'would"have,'on.
,. 'customer...monthly,r','electric
'bills.'had; n'ot,'yet. beencalcu-,"
-,Word that the utilitywould seek.a 'six;step increase first was m'ade'public at the.com-
's'ny's 'nnual'meeting" last
> month, by;Keir,;Turley;.APS; cochairman, a'ndchief".executive officer i~/ Q 1 1 p~qg~Pwi (M~~<0c ~
~.j."~'esiid pe a'dditional re0e"-'",,-
ftn'ues.'"arh ne'cded;;to"pay'o'pthe"
'.,comp'any's <share";of,'the'Palo',
V'erd'e'uclear'+Gene'rating
',Station, iwhtch~'js',being'built 55 miles',west",'of;- downtow'n, I
- ,<'".The.$9.3 'billion,.plant""'is
~
'cheduled to begin "pr'oducing'its fir'st electricity'before'the
, end ofthis week
-.";<<tl.'i"'"~',"~";I-',~":,~i<
4QYA~~'~ <<~)L>> Y
EXHIBIT I-'1 I
R~dlic~cÃve w6lei" dc uses 2 By Victor Dricks g /g Pg The Phoenix Gazette mildly radioactive water when a valve broke on a water pipeline at the Palo Verde Nuclear Generating Station.
Greg Cook, a spokesman for the U.S.
Nuclear Regulatory Commission, said the accident occurred late Friday night.
But Dan Canady, a spokesman for the Arizona Nuclear Power
- Project, said today"'-he-did,not know about the
-incident.
I "This is 'the first I'e heard about it,".;
'he'old a reporter.
Cook said the workers
'hose names were not immediately available re-ceived very'low,doses of radiation that did not exceed federal regulatory stan-dards set to "protect the safety of nuclear plant employees.
"One of the workers received skin contamination, but it was not considered hazard~us," Cook said today,
'e said details about the accident were sketchy. But he said it occurred when the workers were trying to identify the source of a leak from the reactor coolant system, which contains mildly radioactive water.
Normal procedure pvould be to imme-,
diately douse the workers with water in an attempt to wash radioactive particles offtheir bodies, Cook said. But he added,
he did not know ifthat had been done.
6-i By JOHN BTAGGB Trro employeee o( Palo Verde Nuclear Generating Station were exposed to "slightly radioactive" water Friday when a
valve's packing
- failed, a
plant spokesman said Monday.
"They were opening a pressurizer-isolation
- valve, and the valve-stem packing gave way," said Dan
- Canady, who declined to identify the workers. "The amount, of exposure was less than 1 percent of what is allowed per quarter (ofa year)."
The allowable non-penetrating radiation per quarter is 7,500 millirems, Canady said.
He identified one worker as a radiation-protection technician and the other as an auxiliary operator. An auxiliary operator, Canady explained, acts under the direction of the control-room
- operator, manually performing tasks that cannot be done from the control-room console.
The two, who were uninjured, were given showers, he said.
e'~f e
8 88 88
..8.;;.'-:,
8A
'.; ~
Greg
- Cook, a spokesman, for the U.S, gujlear,<>',
~ But,headdqd
'lWe.don'trequiretheutilitytorjhobfy,,
Regulatory Commission in Walnut Creek,,Calif., saidg,the media."
q~, "'.,t'..'.-"'.g"r"-"",
"They had a leak in the reactor-cooling systeiii. '(hey,,>;;.= He exp}ainedthat,'only situations that threateI};theaI were isolating lines when the bolt on a valve br@q,and public require y media'report.. '
thepacking blew out."
.;;- g'- 's " The reactor in Unit 1 has been out of commission,:
He said the two workers "were exposed to 30... since Thursday,when it.shutitselfdownduringa,tkst-.,
mi)lirems inside their bodies and 50 miiiirems on theiryCanady said engineers have decided~the problem w'as apoorly synchroniied progrhmtduring the test.
Itwasri't correctly".,tuned. for-',ther100 percent level,'!,"
"The exPosures were way under the dose limit,"he
'he sa,d The test,'called a.=loss-of-load p'gocedure',
is among The average chest X-ray exposes the patient to from the last before the reactor}begin's}i@gin'aI test, to enter..
20 to 30 millirems of penetrating radiation, about,.l.,commercial service;AT>etagirial>tecsjpsgto run at'pll;,".
percent of the annual allowable limit under g the power for 100 continuouahpura,} '".". 'jest'g>--
commission's standards.
Palo Verde Unit l<<.mpst~mdl<e'its commerciaf run Cooksaid theleakand the valvehavebeenrepairedt
. before March 1, or be "penalized by the Arfioha Canady said plant managers did not consider'the Corporation Commission.
Reactor operators missjdi~
event serious enough Friday to report to the media.
previous self-imposed deadlines ofNov. 1 and Dec.'31.
< ~
"Itjust wasn't a big thing to them," he said after, Theplantspokesmansaidoperators "nowdon't.hhvg.'eing contacted by TheArizona Republic.
'ny idea" of when they will restart the reactor>,bGt>
-"Itis a reportable event to us," Cook said.
'may have a better idea on Tuesday."
EXHIBIT.I-3
- reactor workers
- not identified...
I e
Anzona Nuclear Power Project bfficials have declined to identify the two workers who were contami-nated with mildly radioactive water
.'when a'valve broke on a water pipeline at'the Palo Verde Nuclear.,
= generating Station.
f "We have to protect their pri-
,jvacy," Palo Verde project spokes-man Dan Canady said Monday.
.>-"We,consider it. a very minor
,(ontamination," he" said. "Ifyou are,
" tworking in an auto repair garage you'e going to get greasy from time to time. The workers are in areas
>ivhere there is radiation."
ge
)
~ e,'ate Friday, an auxiliary opera-
'tor whoso job it is to manually
,'operate plant equipment
'>and a
radiation protection officer were jnvolyed in a radiation accident at
',the plant, said Greg
- Cook, a
'spokesman
~for, the U.S.'uclear.
regulatory Commission. '
Cook said federal j privacy 'laws
'revented the NRC,from releasing ithe names of th'e workers, who ivere Iret injured during the incident that
'ccurred.while the plant -was not Pperating.-.,
EXHIBIT'J-i P8IIO VSItCoIS ~iiItee CUII.;
88boII:8QS SUSPSCESGl By SAM STANTON
~
~~
getting around to that particdlay o I--'
""'""-s"""""i:
'or the fifth time since Ju]y and then we found the cliPPed,.
officials-at the Palo Verde Nuclear Generating Station are investigat-
."It's t 0 early to t ll whether the ing the possibility ofsabotage snipped wires were deliberately cut.
Plant operators notified the U S.
or ifitwas accidental," he said.,-
~,
Nuclear Regulatory Commission Although Unit 8 is 99 per'cent late Thursday that they are study comPlete, that area of,the triPle-re,-
ing an incident in which two wires actor plant still is open to construc-wore cut inside an instrument panel tion workers, Canady said.
in the control room ofUnit8, which Nuclear fuel is scheduled to be.
is still under construction.
loaded at the unit during the first,",
The cut wires, which were con-.,three months of 198?, he said, and nected to an instrument that moni-the unit is expected to be operating
~
tora the amount of water fiowing to by the third quarter ofthat year.
a spray pond beside the unit, were
'he'spray pond is used to help
.'ound.
- Tuesday, plant spokesman cool the plant after it has been shut Dan Canady said.
down, Canalray said, and damage tp "
The wires were found after plant the measurement device would not g
operators noticed Saturday that be
- serious,
'because of backuP g
there was a
problem with the instrument. But the NRC was not
",Plant personnel are conducting notified then because "at
- that, the investigation, he said, and noi,'oint, we didn't know exactly what law-'enforcement agencies ha've we had," Canady said.,
been notified.
., "On
- Tuesday, when we were'-,
Sabotage,-B6
~
~
r' 0(@gal fourth, in Unit 3, involved rags.
being stuffed into an electrical breaker and paper being placed into Continued from BI tracks that connect to a breaker r
box.
Since last summer, investigations-have been conducted into four The plant's most serious problem similar incident at palo V d
B t came in February 1984a when
.plant operators said they could t'1 0,000 worth of electrica cab es find enough evidence to determine whether the problems were acci-Arizona Public Service Co. is. the dents or sabotage.
manager of the project, for a:,
Three incidents in Unit, 2 in-consortium.of Southwestern utili-.r volved switches being flipped. The ties that own the plant.
s
EXHIBIT J-g E-8 Fri., Jan. 17, 1986 The Phoenix Ga"ette I
gg340ItC398 C]9QIIA SVSPSCt8d CIII'-PIIGAIl'y The Associated Press the triple-reactor plant still. is open to construction Officials at the Palo Verde Nuclear Generating workers,Canadysaid.
'.'Station are investigating another case of possible Plans call for nuclear fuel to be loaded into Unit,3
- sabotage, the fifth such investigation at the nuclear duringthefirstquarterofnextyear,Canadysaid.
pl'ant since July, officials said.
The spray pond is used to help cool the plant after it The U.S.
Nuclear Regulatory Commission was has been shut down, he said, and damage to the notified by plant operators late Thursday that they are measurement, device would not be serious, because of studying an incident in which two wires were cut inside backup systems, an instrument panel in the control room of Unit 3, He said p]ant peisonne]
are conducting the which is under construction.
investigation and no law-enforcement agencies have Dan Canady, a plant spokesman, said the cut wires been notified.
ivere connected-to an instrument that monitors the Investigations have been conducted into four similar amount of water flowing to a spray pond beside the incidents at the plant, since last July. But p]ant unit. The damage was discovered Tuesday, he said.
operators said they cou]d not find enough evidence to The wires were found after p]ant pperatprs noticed'etermine whether the problems were caused by Saturday that there svas a
problem with the accidents o>>y sabotage instrument, but the NRC was not notified then because Three incidents in Unit 2 involved switches being
,"at that point,'we didn't know exactly what we had,"
flipped. The fourth, in Unit 3, involved rags being Canady said.
stuffed intoan electrical breaker and paper being "On Tuesday, when we were getting around tp that placed into tracks that connect to a breaker box.
particular system, we began trouble-shooting, and then 'he plant's most serious problem came in February we found the clipped wires," he said. "It's too early to 1984, when $150,000 worth of electrical cables were cut.
tellwhetherthesniPPedwires"weredeliberatelycutor" The p]ant located 50 mi]es west pf downtown
'hoenix, is owned by a consortium of electric utilities Although Unit 3 is 99 percent complete, that area of in Arizona, New Mexico, Texas and California.
0
EXHIBIT J-3SSunday, Jan
)
Pello Ve) de
'sabotage'5etttlles APS; 5 cases d)scove) ed s)ace JUtly By JOHN STAGGS 8 +
Plant 'satisfactory,'1.
Officials at the Palo Verde Nu-clear Generating Station say they He said any concern-he
- might, are.baffledbythelatestincidentsof have is over the delay at lower aPParent sabotage at, the triPle-re-levels of recognizing and classifying actor plant.
problems.
Two electrical wires were discov-U;t 3 is. gg percent comp]ete, ered cut in the unfinished Unit 3 of and;s sched'u]ed to be ]oaded with the Plant Tuesday, but the incident nuclear fue] during the flirstquarter was,not reported to the U.S.
of 1g/7 Nuclear Regulatory Commission until'1'hursday.
Myron Scott of the Tempe-based
. Coalition for Responsible Energy We'e checking all'he work Education 'said, "The worst thing
'orders now," sPokesman Dan Can-bout this is the fact that Ariizona ady said. "We'e going back to public Service'ivas late in reporting make sure somebody wasn't toM to this incident to the NRC and" apparently )ate in responding them-Canady said officials probably selves. T)iey have been criticized in will know )ater this week whether the pastby the NRC for responding the cut wires were the result of ali
]ate to apparent sabotage.'he official work request or foul play.
NRC assumes that the longer you.
."There are ]itera]ly thousands of wait, the harder it will be to fmd, ivork orders that we have to go out~v]lowasresponsib]e through yet " he said "APS should assume it,'as a
The wires are connected to an sabotage problem and should get.
instrument that monitors the police help."
ainount of water flowing to a spray The incident was the flifthcase of
~
Pond beside the unit. Water in the apparelltsabotage since July. Three sPray Pond is used to helP cool the cases involved switches being plant after ithas been shutdown.
fliplied in Unit 2; rags were foun The operators noticed a problem stuffed irito an electrical circuit with the instrument Jan. lljbut breaker; and paper was placed on didn't discover the cut wires until tracks that connect to a breaker Tuesday.
The NRC was not noti-box.
fied until Thursday "because we Meamvhi)e, Canady
- said, Pa]o didn't know what we had," Canady Verde officials are still )ooking at Monday or Tuesday for restart of
-Roy Zimmerman,
'head NRC Unit 1. The reactor has been"out of inspector at Palo Verde, said, "It service since Jan. 9, when it, failed a went up the management chain.
major testat the100percentpower Once it was identified at a'certain level.
leye] of management, they flagged On 'Friday, a
review of data revealed that the reactor's coolant
'",)Ve wou]d 'like to see 'he pumps )ost power too quickly', he notification 'as quickly as possible. I said, and technicians were revIew-don't want to say it's not a concern ing the safety significance of the of ours, but you need to differenti-power loss before reactivating the ate between=an operating unit,'and '.:plant."." ',"~i:;
, orie that's under construction.',.',,';,
-, After, t}ie p)ant, is r'eactivated and,.
';Zimmerinan,'aid that, ~because ".the test;is ~comp]eted; Unit, 1-will
.there is no','iiuc)ear, fuel;"on site for" undergoone'.more major test in-
. 'Unit,3,,'lthey.don't come 'un'der",our,'.~;vo]vi'ng the'coo]a'nt p'umps. befoie
'ecurity requirements."...;,
going into commercial s'er'vice".,"'-';lz",
~j]
EXHIBIT 'J-/I v, hfsf 3 +
nrh, tl hr ';r t dc prvr+4'*rhrvrvns~'p4 rhvbf the third quarter of" 987, is.99 percent.,
-'<'omplete'. '
Last vieek's findirigs were the latest'in what 'is beco'ming'"a
-',long.';.'"series>
of'c>dents of unresolved suspected sabots ta'ge at the $9.3 hilliontproject.
!<t.'f" reer
.t,'>Earlier this summer, someone used a
'remote control,pa'nels~in',~tan,;.happ'are'nt<
attempt to wrest,con'tr'ol 'oof:plant~func:
'"'"'tions~from control,room 'operators.
while,'the>Unit 2.hreactor>,"wasundergoIng" hot.fnn'ctional teitingeI ii,:,,:::;,".'v:",',>'~:r',n f;
'"Other's'witch'es;,on plant;components;":-
"were discovered,'fiipped in Unit 2,'ran'd,
',rags 'and computer )papers were 'found.'
~ stuffed. into an electrical breaker'panel';-'nd onto tracks that'connect to a breaker, I
box in Unit 3.3 Qrr lrflj<,rPgn."',r
.In "Feb'r'uary,",19$, g'more,. than'<80.
electrical cables weie,,'cut 'at the'plant,'I
~causing~damage~that cost
$150,000>t'o'I w"rgMarico'pa]County)sheriff',s '.dep'uties Pand Palo, Verde security'.guards P'ayi investigated several of;the incidents"biit'*;
have not reported rany".su'ccess'n iderit-'fyin the person or'persons'responsible.~a Officials'at the U.S."'n51u'clear)regula,"
- +>tory.Commission".have,been <nobfied 'of+
- the incidentL'<<"'""
- ""o'M~.;,'-"'"4~'fidpt:
"'While feder'al officials have expressed~
concern about'hemI Palo >Verde'prpjecot3 officials'aveftended,'"to hiscountgth'eir'
.',;ipossible significanc"'$ttiibuting'heme'.to~
.,;disgruntled wor'kers arid'employe'e,'car'e'-'~-
,)Iftl,Canady'said<today th'at',it'ywouid'be"
~<in'appropriate>rtog dr'anw@a"j:conanection";am'ong*the se'parate in'cidents.+,II>9~'f<~":,%!i
","".~Meanwhi1e,'echhnIciaris',%ave re'starnted;'."
) ',the~Unit l-reactor, gh*ich'had'bene'n'shut'down fo>rre'p'aIrs and sainte'nenace4Th'e
>g
~<back.",up 'to"fullcpower"1ater"'thik~eek";go f."'..;--.;;;.'.-., '."."-.<'.".- '
"+eye~Can" b'egin'"a,gj>al~SerieS')(Of P@Stag<
j dlensigne'd t'o'pave~thew'ayjfor)he plan%'s Me@'i,,'j'iiibo'tcII9'9,;.
- .-
- IIw';.stI'sKItecI'8'dl~';
<<>'"',-.,>;Another", inciden d o.",suspe'ctend-'sabo-;<
j<'.ta'ge.'wa's ounce'oryered ovwerthe",Iveeken,d a','-,
rti:the".>Palo.",,Veide'~,"'NuclIt'ar'-,'-.Gen'e'iratinI,"
~~>hyLati:Satur'day",~techhicians'.foxund-'two',
- "';;wires cut."oii'an instiii'mentn.th'at,'records-.
,';<ithej~flow'"'rate">'of"-'paters.'hrough~hthc'".~'c'oiideriso'r t'ubes'of tIieUnit8 r'eactor.'~'-';,
iid ewe,oc'yrhyt'3 tPchvq(l vdeapvrgg'>,'+'<Tw'o'other wires were foupnd cut"'at,the'.
~g"./he'incidents rwe'ge':the fittfi"'and six'th.:.
(~times"~sine'e",,July; > that/planet/;';official
'dis'covered indicartIo'ns',,of>potential,sabo,',
~~<v+The'<<conde'nsor~use's j6jqti8Ri;eyw*'age'."f
'pefflu'ent to cool'sgam*jnto"'wtateer,'after it"l
+has','".',been"'used,yto.'turn" th'ejpl/des", oaf.a ')
.'.."turbine"gener'ato'r;"";hTh~~jkatejgthen'",is
,~",recirculated through(the;niicleaPr'e'a'ctor,'-
et.hieated danjuyiied; <igv@"'pog
'iree!r,';ver
'+'A'rfx'O'npgNnoteeIr'tttpe O
n'er~e'Pr'Oj~ee't".;
spoliesiiihn'tDan":Cijiia'dyesa1d!to'diiy~th'at.
it'as,too"~e'arlyzto~ tell/~'hxethet>,'the'i,act,
-;"-,ivesdelifjjratste".or"wh'ethertlje~iij~ad,
"'.:,been,snIpp'ed as'.pa'i'tnof'a'r'eclair"tha+6w'ass'r
'elcctiicall'jiipsl r'tfhere the tw'irsswcre,"hftt, IPdTuesdan'y<weJe~v'conn'ected~wt'o a'j'.;instr'u'-,
';;'ment".that'."tells'.plant o'operators.tho floiv
- lyra'to%fr'tva6ir>in/the iipriiy;pong. hasid
';:<<~The spray porid is"an,,auxiliary, cooling gysys'te~~that-".,coutdsbeused;!
t'o".cojil'the.
f,reactor'ar'fter';it hwad,been'sljQt down,'~je;:,
'qgXUnlP5~scheduled ato'be oper'ating:,In",
v
~ EXHIBTT J"5 88bOII:8QS:
V88Ã8d 8II',-
A-P)8nIi.:-:=:
Palo Verde wires cut; seventh such incident:
By JOHN STAGGS 8 // pi'-J4 In the seventh case of apparent sabotage since
- July, technicians'ound more cut wires Saturday.'in, the nearly complete Unit 3 of the Palo Uerde Nuclear Generating Station.
"Late Saturday morning,'wo more wires Ivere found cut" in the lower cable'-spreading'room, just below the control
- room, plant spokesman Dan Canady said Mon-.
day.
The cut wires, which did 'not involve nuclear equipment, were connected to a monitor that records'he flow of water in the condenser.'he condenser is a chamber -in which steam changes to water.-
The cable-spreading room is used for routing cables to various electri-'al systems in the nuclear-power plant Last Tuesday, technicians" dis-"
covered apparent sabotage to'wo electrical wires connected to'h instrument that monitors the amount of water flowing to a spray'ond next to Unit 3. Water in-the spray pond is used to'help cool the reactor after ithas been shut down.
Unit 3 is 99 percent complete and, is scheduled to be loaded with nuclear fuel during the first quarter of 1987.
Canady said the Maricopa'ounty Sheriff's Office has Peen notiTied of both cases of apparerit sabotage, but that no assistanc'e hds been requested.
-,~.
"We'e in the process ofnotifyin'g the Nuclear Regulatory Commis-sion now," he said.
The federal agency's security regulations willnot take effect until the plant's fuel arrives later this'ear.
NRC spokesman Greg Cook said this'gency "is responsible for the
~ <public's health and safety" insofar'
~ay Sabotage, PS=
'88bot8ge i Continued from Bl
'as radioactive material is con-cerned.
He said that even though there appears to be a pattern of apparent,
- sabotage, the situation does not require his agency's intervention.
None of the previous cases has been solved.
'Usually, the utilitywillstep up its inspection program,"
he said.
"Pre-operational inspections should pick up any problems.
"It would be awfully hard to damage any of these circuits and not have it be caught.
We'e concerned, but we'e not worried."
- , Canady said the cut wires were discovered while workers were checking systems in the unit. The wires were installed in 1983.
'He said the news media and government agencies were not noti-Qed earlier because "untilyou start checking, you don't know whether" somebody was told to cut the wires.
Myron Scott of the Tempe-based Coalition for Responsible Energy Education
- said, "Arizona Public Service Company (which is in charge of Palo Uerde's construc-tion) should assume it has a
sabotage problem and should get police help."
i Three of the cases of apparent s'abotage involved switches being flipped in Unit 2. In the two other incidents, rags were stuffed into an electrical circuit breaker, and paper was placed on tracks'that connect to a breaker box, potentially break-ing an electrical circuit.
> Meamvhile, Unit 1 was restarted Sunday night. It had been out of service since Jan. 9, when itfailed a major test at the 100 percent power level.
Normally, the unit w'ould have been restarted quickly, but engineers wanted to assess the safety signiTicance of the failed test b'efore restarting the,'reactor, offi-cials said.
<<The iinit will undergo two more major', tests before going into'com-mercial,service, which is expected tliisspring;
'The "$9.3 billion plant, 50 miles
, ivest'"of downtown Phoenix, 's owned by a consortium of seven Qo'uthwestern utilities, including APS. ';