ML18030A036
| ML18030A036 | |
| Person / Time | |
|---|---|
| Site: | Susquehanna  |
| Issue date: | 03/25/1981 |
| From: | Tedesco R Office of Nuclear Reactor Regulation |
| To: | Curtis N PENNSYLVANIA POWER & LIGHT CO. |
| References | |
| NUDOCS 8104010469 | |
| Download: ML18030A036 (7) | |
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tlarch 25, 1981 Docket No s
.50-387 and 50-388 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 March 1981 report t'o Congress.
Your estimate should be provided orally to the Project Manager by noon Friday,
- 'arch 27, 1981 and confirmed in writing by April 3, 1981.
Please follow format enclosed in providing this information.
Sincerely, DISTRIBUTION:
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'Docket File UNITEDSTATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D. C. 20555 DYoungblood RStark SHanauer MRushbrook RTedesco RVollmer IP t TMurley II,S+,
DRoss RHartfield, MPA OELD Pennsylvania Power and Light Compaq',
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Norman M. Curtis Vice President - Engineejing '" " "
TERA and Construction
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2 North Ninth Street L/PDR Al1 entown, Pennsyl vania 18101 NSIC TIC Curtis:
ACRS (16) e ~.> +a me tr r
II As you are aware, the U.S.
Congress requires.that the Nuclear Regulatory Commission provide the Subcommittee on Energy and Mater 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 Energy and Mater Development requested that the monthly report be amended to include various 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 operating license.
DL:LB¹1 RStark/ls 3/25/81 DL:
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Enclosure:
NRR's Estimate of Cost of Delay cc:
See next pap DL A /L RL desco 3
dj'81 Robert L. Tedesco, Assistant Director for Licensing Division of Licensing
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Hr. Norman W. Curtis Vice President - Engineering and Construction Pennsylvania Power and Light Company 2 North Ninth Street Al 1 entown, Pennsyl vani a 18101 CC:
Mr. Earle M. Head Project Engineering Manager Pennsylvania Power 5 Light Company 2 North Ninth Street Allentown, Pennsyl vani a 18101 Jay Silberg, Esq.
Shaw, Pittman, Potts 8
Trowbridge 1800 H Street, N.
W.
Washington, D.
C.
20036 Mr. William E. Barbepich, Nuclear Licensing Group Supervisor Pennsylvania Power 5 Light Company 2 North Ninth Street Allentown, Pennsylvania 18101 Edward H. Nagel, Esquire General Counsel and Secretary Pennsylvania Power 5 Light Company 2 North Ninth Street Allentown, Pennsyl vani a 18101 Bryan Snapp, Esq.
Pennsylvania Power 8 Light Company 2 North Ninth Street Al'lentown, Pennsyl vania 18101 Robert M. Gallo Resident Inspector P. 0.
Box 52 Shickshinny, Pennsylvania 18655 John'.L. 'Anderson Oak Ridge National Laboratory Union Carbide Corporation Bldg. 3500, P.
O.
Box. X Oak Ridge, Tennessee 37830 Gerald R. Schultz, Esq.
Susquehanna Environmental Advocates P'. 0.
Box 1560 Wikes-Barre, Pennsylvania 18703 Mr. E.B. Poser Project Engineer Bechtel Power Corporation P. 0.
Box 3965 San Francisco, California 94119 Matias F. Travieso-Diaz, Esq.
Shaw, Pittman, Potts 5
Trowbridge 1800 M Street, N.
W.
Washington, D.
C.
20036 Dr. Judith H. Johnsrud Co-Director'nvironmental Coalition on Nuclear Power 433 Orlando Avenue State'ollege, Pa 16801 Hr. Thomas M. Gerusky, Director Bureau of Radi ati on Protecti on Department 'of Environmental Resources Coranonwealth of Pennsylvania P. 0.
Box 2063 Harrisburg, Pa 17120 Ms. Colleen Marsh Box 538A, RDP4 Mountain Top, PA
.18707 Mr. Thomas-:J.
Halligan Corresoondent
-'he Citizens Against Nuclear
'..Danagers P. 0.
Box 5 Scranton,'ennsylvania 18501 Hr. J.W. Millard Project AAnager Mail Code 394 General Electric Company 175 Curtner Avenue San Jose, California 95125 Robert W. Adler Dept. of'nvironmental Resources 505 Executive House P. 0.
Box 2357 Harrisburg, Pennsylvania 15120
COST OF DELAY Table 1*identifies ten nuclear units where the estimated construction completion 'date precedes the completion of the licensing effort.
The NRR staff was asked to devel'op estimates of the costs that will be incurred as a result of these licensing delays.
These estimates appear in the attached Table 2.
One should be cognizant that the estimates are highly sensitive to underlying assumptions which are subject to much uncertainty (fuel price escalation, sources of replacement energy available, expected performance of the nuclear unit in its initial commercial start-up, eto'.).
Thus, the values reported in Table 2 should only be viewed as benchmark estimates.
Cost of Re lacement Ener The selection of an alternative energy source is not something one can readily predict.
Logically, the utility will rely upon the least expensive alternative available.
However, what is available will depend on the system capacity mix and the demands existing on the system during the delay period.
Depending on these factors, replacement energy may be supplied by some combination of
- base, intermediate, and peaking units utilizing varying fuel sources, or thru outside purchases.
For the purpose of this assessment, the staff has assumed that all replacement energy will be made-up by capacity already on the applicant's system.
Where a system is heavily committed to a particular energy source, replacement energy is viewed as coming totally from that source.
If a system's capacity is heavily distributed among two or more fuel sources, the replacement energy is assumed to be equally distributed among those energy sources.
It is assumed that the nuclear uni;t would have operated at an average capacity factor of 605 during the delay period.
The fuel costs 'in mills per kWh are based on the following assumptions.
The fuel cost for coal, oil, and.natural gas is based on actual values (4 per MM BTU) paid by each utility as of June 1980.
These values were converted to mills per kWh based on average plant heat rates of 11,000 BTU per kWh for oil and gas-fired plants and 10,000 BTU per kWh for coal fired plants.
These costs were then escalated at a nominal 10Ã per year to reflect estimated costs in the 1981-83 timeframe.
The nuclear fuel cost is based on a 1977 estimate of 7.83 mills per kWh (assumes no recycle),
and escalated at a nominal rate of 5X per year to reflect estimated cost in the 1981-83 timeframe.
These nuclear fuel cost assumptions are based on Table ll of.NUREG -0480 (Coal and Nuclear:
A Comparison of the Cost of Generating, Baseload Electricity by Region).
Ca ital Ex ense Durin the Dela Period The capital expense represents the interest charges associated with carrying the capital investment during-the;delay" period.
-For,-the.;purposes. of this analysis it is assumed that interest accrues on the completed-.capi'-tal."cost of the facility at the annual rate of 105 per year.
It is our position that this does not represent a real cost to the utility or its ratepayers but rather shifts the financial burden from one group to the other (transfer payments) and shifts payments in time.
Thus for example, if during the delay
- not enclosed
period the state PUG does not allow the interest payments to be passed through to the ratepayer, the stockholders and the utility will be required to absorb this cost as it is incurred.
- However, once the nuclear unit does become operational, these additional interest charges will be capitalized and recovered by the utility and its stockholders over the unit's useful life.
- However, because of current cash flow considerations 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 unit 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.
~ 8 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 customers which would otherwise be paid 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 is adequate regional power supply in the short-term such that there is no need to make real economic resource commitments 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 does not 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-up.
COST OF REPLACEMENT ENERGY AND CAPITAL EXPENSE INCURRED DUE TO LICENSING DELAYS ALL COST ESTIMATES ARE IN CURRENT DOLLARS UNIT COST
'EPLACEMENT FUEL HIX MWe COAL OIL GAS OF REPLACEMENT ENERGY verage Cost of Replace-ment Fuel Nuclear Fuel Cost Incre-mental Fuel Cost st-mated Length of Delay Hills kWh Hills kWh Mills kWh Months Replace-ment Energy Cost 1 xl0 Rep ace-mupt Energy Cost Per Month 1 x10 CAPITAL Estimated Capt tal Cost of Unit at Completion 1 x106 Capital Expense Delay During Delay Period EXPENSE Capital Expense Pcr Month
$1 x 10 Swmer Diablo Canyon 1
Diablo Canyon 2
San Onofre 2
Zimner McGuire 1
Susquehanna 1
Waterford 3 Shoreham 1
Comanche Peak 1
900 50 50 1084 1106 1100 100 100 100 1110 820 1150 100 100 792 50 50 1180 100 1050 50 50 100 31.1 62.2 68.4
- 60. 3 44.6 16.9 37.2
- 50. 7
- 41. 3 26.6 10,0 9.5 10.0 9.5 10,0 9.5 10.0 10.5 10.0 10.5 21.1 52.7 58,4 50.8 34.6 7.4 27.2 40.2
- 31. 3 16.1 12 66.4 8.3 141,4 147.0 36.0 41.8 100.0 58.5 11.2 16.2 28.3 24.5 12.0 3.8 12.5 19,5 11.2 8.1 300e2 25<0 1050 840 1820 1030 770 1840 1230 2210 1120 53.3 6.7 105.0 8.8 35.0 7.0 91.0 15.2 25.8 8.6 70.6 122.7 15.3 30.8 10.3 18.4 18.4 18.7 9.3
'See accompanying text for explanation and underlying assumptions
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