ML19206A928
| ML19206A928 | |
| Person / Time | |
|---|---|
| Site: | Crane  |
| Issue date: | 09/26/1969 |
| From: | Newman N US ATOMIC ENERGY COMMISSION (AEC) |
| To: | Bond J, Campbell J, Wolman A JOHNS HOPKINS UNIV., BALTIMORE, MD, Atomic Safety and Licensing Board Panel |
| References | |
| NUDOCS 7904210629 | |
| Download: ML19206A928 (4) | |
Text
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m, SEP 2 6 1969 J. D. Bond, Esq., Chairman Dr. Clarke Villiams Atomic Safety and Licensing Board Brookhaven National Laboratory U. S. Atomic Energy Goemission Upton, Long Island, New York 11973 Washington, D. C.
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- Dr. Abel Wolman Jack M. Campbell, Esq., Alternate 513 Ames Hall Chairman The Johns llopkins University Atomic Safety and Licensing Board Baltimore, Maryland 21218 Stephenson, Camobell & Olmsted 231 Washington Avenue Mr. R. B. Briggs, Director P. O. Box 877 Holten-Salt Reactor Program Santa Fe, New Mexico 87501 Oak Ridge National Laboratory P. O. Box Y Oak Ridge, Tennessee 37830
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In the Matter of Metropolitan Edison Company and Jersey Central Power G Light Company Three Mile Island Nuclear Station Unic 2 Docket No. 50-320 Centlemen:
2 Transmitted herewith in the captioned matter is the " Supplement to the Testimony of Charles A. Iovejoy" with accompanying Affidavit.
Sincerely yours, Neil J. Nevr.a.an Counsel for AEC Regulatory Staff As stated bec: REG Central File OGC Files - C 'tnwn/Beth cc: Cerald Charnoff, Esq.
OGC Docket Files Mr. R. E. Neidig DRL Mr. George H. Ritter PDR Mr. Richard Mencar IUNewman Mr. Walter B. Lang JPMurray Mr. Thomas M. Cerusky TBConner.
Mr. James V. Noely Algic A. Wells, Esq.
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JERSLY CE;!Tl:AL POWER AND
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Docket No. 50-320 POLITAU EDISO:: CO::PANY
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('I'nree Mile Island Nuclear
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SUPPLE!!EST TO 'lilE TESTI}:0NY OF
~ CHARLES A. LOVEJOY Subsequent to the preparation of ny testimony in this proceeding, additional information concerning the financial qualificatie.ns of Jersey Central Po'..rer and Light Compcny (Jersey Central) and Metrcpolite; s
Edicen Company ("ct-1:d) to ccustruct Threc !!ile Island Nuclear Station, Unit 2, has been subuitted.
I have revieved this additional information, which is contained in the testinony of Ray, toad E. k'crts, Comptroller of Met-Ed, and John 3. Burchc1.1, Cccptroller of Jersey Central, both dated September 3, 1969.
1his additional inforuntion does not change or quclify my opinion as to either applicant's financial qualifications to design and construct the p oposcd nuc] car facility as stated in the first paragraph on page 2 of ny referenced testimony.
In response to the Board's request fcr additional details regrrding my assumptions and to update fcctors in v.y original statement persuant to the new informatica in the applicants' testiuony, the follo.dng facts and considerations are submLLt'ed; G3-112
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1.
Since the filing of hendment l'o. 6 to the applicatica, the estinated cost of construction of the nuclear production p3 mt hcs increased (from $164.0 uillion) to $206.6 nillion.
Accor d t.nt,1y, the total cctinated costa for Unit 2 are nce $235.') million, including
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transnission facilitics and other accociated costs of $6.3 nillicn and costs of initial core of $23.0 million. The Division of Construc-tien has reviewed the revised estincte and hes advised re that, in light of the prevailing up eard trend in the costs of coas truction, the revised estinate is reasonable.
2.
Further, note 3 on page 4 of Mr. Werts ' and IIr. Eurchell's testimony states that Jersc-; Central and ?:ct-Ed have recently decided to share the financir.g of Unit No. 2 in the ratios of 25*: and 75%,
i respectively, and not "cqually" as statcd in the fir st. paragrap': ca page 2 of ny refarenced testicony.
s 3.
Paragraph 5 c. of ifr. Ucrts' and Mr. Durchc11's tc t$rony states that the total construction require.2nts of each company fer the five-yecr period 1969-1973 (uhich include the cc.ts of Three Mile Island Unit 2), as detailed in paragraph 4 of tha referenced testi-monics, vill be providad by internal soureca cud capital contributiona from the parent co:rpeny (CPU) cod frca the sale; of debt securitica.
I Met-Ed's estinate of its total construc tion expendituren for the five-year period is $534.5 nillion, including, $164.6 million applicable to III Unit 2.
Jersey Central'n cntin.te of its total 63 113 7
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constructic. cxpenditures for the seme period is S647.2 nillion, includiun ?',9.5 nillion applicabla to TMI Unit 2.
The applicants s
do.not state schat percentage of total requirecents trould be provided from ecch of the various sources c:: cept to note that the funds s:ould be obtained fron the sources listed in such a tanner as to maintain-a sound and conservative capital structure.
l 3
Howvar. Lased on Met-1:d's and Jersey Central's 1968 net carnings plus depreciation and other non-cash expenses, it is a reasenabic assuration that funds generated fron operations should provida 25% to 35% of the annual finen'cing for the overall construc-tion progran of ecch company, leaving 65% to 75% of totcl fund requiretente to be provided canually by capital contributions from the parent corpsay nnd frou cale of debt securities.
Further, for the purposes of rej cycluation and based on the above and using as a guide cach conpany's capitalization ratios as cf Decenber 31, 1960, I have censidared that up to 45% of total requirenents could be not fron the scle of debt securitics and the remainder (20% to 30%) from capital contributions.
In my opin*ca, for the reasons '.;tcted en page 4 of ty referenced testimony, there is renconnble assurance that these sources can provide the funds in the order cf ecgnitude as stated abe;c, siithout impairing the soundness of the financing.
4.
The 1969 (August) edition of Moody's rates Met-1;d'r first nortgar,c bonds as "A" and its debentures as "Daa".
Appropriate changes should be unde in paragraph 3 on page 5 and in Appendix A to ny referenced testimony.
s63-114 T