ML19253A902

SER Re Const of Facilities,Suppl 1

ML19253A902
Person / Time
Site:	New England Power
Issue date:	07/20/1979
From:	Office of Nuclear Reactor Regulation
To:
Shared Package
ML19253A901	List: ML19253A902 NUREG-0424, Notifies of Issuance of NUREG-0424, Suppl 1 to Ser
References
NUREG-0424, NUREG-0424-S01, NUREG-424, NUREG-424-S1, NUDOCS 7909120308
Download: ML19253A902 (69)

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NUREG-0424 Supplement No. 1 7,7,, - 7, 4 SUPPLEMENT NO. 1 TO THE SAFELY EVALUATION REPORT BY THE OFFICE OF NUCLEAR REACTOR REGULATION U.S. NUCLEAR REGULATORY COMMISSION IN THE MATTER OF NEW ENGLAND POWER COMPANY NEP NUCLEAR GENERATING STATION UNIT NOS. 1 AND 2 DOCKET N05. STN 50-568 AND STN 50-569 33"700!s

TABLE Of CONTEl.S PAGE

1.0 INTRODUCTION

AND GENERAL DISCUSSION. 1-1 1.1 Introduction. 1-1 1.8 Outstanding Issues. 1-3 1.9 Generic Issues. 1-4 1.10 Three Mile Island Power Plant Unit 2 Incident. 1-4 2.0 SITE CHARACTERISTICS. 2-1 2.5 Geology and Seismology. 2-1 2.5.1 Geology. 2-1

3. 0 DESIGN CRITERIA FOR STRUCTURES, COMPONENTS, EQUIPMENT AND SYSTEMS.

3-1 3.9 Mechanical Systems and Components. 3-1 6.0 ENGINEERED SAFETY FEATURES. 6-1 6.2 Containment Systems. 6-1

6. 2.1 Containment Functional Design.

6-1 8.0 ELECTRICAL POWER. 8-1 8.2 Offsite Power System. 8-1 8.2.4 Degraded Grid Voltage Conditions. 8-1 18.0 REVIEW BY THE ADVISORY COMMITTEE ON REACTOR SAFEGUARDS. 18-1 20.0 FINANCIAL QUALTFICATIONS. 20-1 20.1 Introduction. 20-1 20.2 Dwnership. 20-1 20.3 Construction Cost Estimates. 20-2 20.4 Financial A,alysis. 20-2 20.5 Conclusion. 20-3

21.0 CONCLUSION

S. 21-1 M,"0 Ws

TABLE OF CONTENTS (Continued) APPENDICES PAGE APPENDIX A REPORT OF THE ADVISORY COMMITTEE ON "EACTOR SAFEGUARDS. A-1 APPENDIX 8 CONTINUATION OF THE CHRON0 LOG ( OF REGULATORY REVIL. B-1 %PPENDIX C CHANGE _ AND CORRECTIONS TO THE SAFETY EVALUATION REPORT. C-1 APPENDIX D ANALYSIS Of FINANCIAL QUALIFICATIONS. D-1 ii

LIST OF TABLES PAGE TABLE 1-1 NEP 1 and 2 APPLICANTS-0WNERSHIP PERCENTAGE. 1-2 TABLE 6-1 SUBCOMPARTMENT ANALYSIS RESULTS. 6-2 TABLE D-1 NEW ENGLAND POWER COMPANY - PRO FORMA SOURCES OF FUNDS FOR CONSTRUCTION EXPENDITURES AND CAPITAL STRUCTURE. D-3 TABLE D-2 BANGOR HYDRD NUCLEAR PLANT - PRO FORMA SOURCES OF FUNDS FOR SYSTEM-WIDE CONSTRUCTION EXPENDITURES AND CAPITAL STRUCTURE, D-7 TABLE D-3 CANAL ELECTRIC COMPANY - SOURCES OF FUNDS FOR SYSTEM-WIDE CONSTRUCTION EXPENDITURES. D-10 TABLE D-4 FITCHBURG GAS AND ELECTRIC COMPANY - PRO FORMA SOURCES OF FUNDS FOR SYSTEM-WIDE CONSTRUCTION FXPENDITURES AND CAPITAL STRUCTURE. D-13 TABLE D-5 MONTAUP E'.ECTRIC COMPANY - SOURCES OF FUNDS FOR CONSTRUCTION EXPENDITURES. D-16 TABLE D-6 NARRAGANSETT ELECTRIC CCHPANY - PRO FORMA SOURCES OF FUNDS FOR CONSTRUCTION EXPENDITURES AND CAPITAL STRUCTURE. D-21 T/9' Ci LIST OF MASSACHUSETTS MUNICIPAL ELECTRIC SYSTEMS WITH POWER SALES AGREEMENTS. D-2 h TABLE D-8 MAINE P' BLIC SERVICE COMPANY - SOURCES OF FUNDS FOR SYSTEM-WIDE CONSTRUCTION FXPENDITURES. D-2d SLh$.v., n g y$ iii

1.0 INTRODUCTION

AND GENERAL DISCUSSION 1.1 Introduction The Nuclear Regulatory Commission's (Commission) Safety Evaluation Report in the matter of the application by the New England Power Company and other utilities (applicants) to constiuct 5;.d operate the proposed NEP Nuclear Generating Station, Units 1 and 2 (NEP 1 and 2 or facility) was issued on June 1,1978. The original list of applicants for the facility is presented in fable 1.1 of the Safety Eval-uation Report. The list of applicants was subsequently revised in Revision No. 3, to the license application, dated January 15, 1979 as shown in revised Table 1-1. The New England Power Company continues to be the lead applicant for construction permits for NEP 1 and 2. The corporate management of the New England Power Company is ultimately responsible for the execution of all activities and functions required for the design, construction, and operation of the facility. Section 1.8 of the Safety Evaluation Report identified seve al matters which required resolution before we could complete our review of the application. The purpose of this supplement is to update the Safety Evaluation Report by providing (1) our evaluation of additional information submitted by the applicants 5 ace the Safety Evaluation Report was issued, (2) our evaluation of the matters where we had not completed our review of inforn.ation submitted by the applicants when the Safety Evaluation Report was issued, and (3) our responses to the ramments made by the Advisory Committee on Reactor Safeguards in its report dated July 13, 1978, a copy of which is included as Appendix A to this supplement. One June 13, 1979 New England Power Company advised us that they were suspending efforts to obtain licenses and permits for construction and operation on the proposed NEP 1 and 2 until the General Services Administration decision on disposition of the proposed site in Charleston, Rhode Island was clarified. On June 20, 1979 the General Services Administration announced that it had determined disposition of the former Navy landing field (location of the proposed NEP 1 and 2 site) to be for environmental use. We understa^d that the New England Power Company will appeal the decision. Except for the appendices, each of the following sections of this supplement is numbered the same as the section of the Safety Evaluation Report that is being updated, and the discussions are supplementary to and not in lieu of the discussion in the Safety Evaluation Report unless otherwise stated. beh h 1-1

TABLE l-1 NEP 1 AND 2 APPLICANTS-0WNERSHIP PtRCENTAGE NEP 1 and 2 Applicants Ownership Percentage New England Power Lompany 78.417 Bangor Hydro-Electric Company 1.350 Canal Electric Company 4.350 Fitchburg Gas and Electric Light Company 1.130 Montaup Electric Company 4.350 The Narragansett Electric Company 0.260 Massachusetts Municipal Wholesale Electric Company 6.008 Taunton Municipal Lighting Plant 0.500 Vermont Electric Cooperative, Inc. 0.200 Maine Public Service Company 0.435 100.0 1-2

Appendix B to this supplement is a continuation of the chronology of significant events of the licensing review of the NEP 1 and 2 application. Appendix C provides an errata to the Safety Evaluation Report. 1.8 Outstanding Issues The Safety Evaluation Report identified nine outstanding issues which required further review in order to confirm that the proposed design would meet our require-ments. These issues are listed below along with the current status of each. (1) We reported in the Safety Evaluation Report that the applicants are required by Section 100.3(a) of 10 CFR Part 100 of the Commission's rules, to have the authority to determine all activities within the exclusion area including exclusion or removal of personnel and property. We stated that the applicants did not at that time possess the requisite authority. We continue to require that the applicants document +he authority to determine all activities within the exclusion area prior to a decision on issuance of construction permits. We will report on the resolution of this matter in a supplement to the Safety Evaluation Report. (2) We reported in the Safety Evaluation Report that we had met with the Westing-house Electric Corporation to discuss a computational error discover 1 in the Westinghcuse evaluation model for calculating loss-of-coolant accident in conformance with Appendix K to 10 CFR 50. The error involved a geometric error which resulted in only half of the volumetric heat generation due to metal-water reaction being used in the calculation of cladding temperature. The error was determined to be present in both the blowdown code (SATAN) and the fuel rod heatup code (LOCTA). We requested that the corrections be made to the evaluation model and that a reanalysis of the emergency core cooling sys'em performance be performed for NEP 1 and ' The applicants have supplied the requested information; however, our review of the information is not complete. We will report the results of our evaluation of this informa- )n in a supplement to the Safety Evaluation Report. (3) We reported in the Safety Eva!uation Report that the constructor for NEP 1 and 2 has not yet been named. This continues to be the case. We will report on the resolution of the matter in a supplement to the Safety Evaluation Report. (4) When the Safety Evaluation Report was issued, we had not completed our review of the New Shoreham Fault. Our review is now complete and we consider this matter resolved (Section 2.5.1, page 2-1). (5) When the ".afety Evaluation Report was issued, we required additional infor-mation on Class 1 component supports. We have received this information and 1-3

our review is now complete and we consider this matter resolved (Section 3.9, page 3-1). (6) When the Safety Evaluation Report was issued, we had not completed our review of the main steam line break accident. Our review of this matter is now complete and we consider it resolved (Section 6.2.1, page 6-1). (/) Vhen rae Safety Evaluation Report was issuev we had not complated our review of t a containment subcompartment analysis. Our review of this matter is now complete and we consider it resolved (Section 6.2.1, page 6-1). (8) When the efety Evaluation Report was issued, we required additional infor-mation on the protection provided for grid undervoltage conditians. We have received and reviewed the required information and we consider it resolved (Section 8.2.4, page 8-1). (9) When the Safety Evaluation Report was issued, we required additional informa-tion concerning the applicants' financial qualifications. We have now com-pleted our review of this matter and we consider it resolved (Section 20.0, page 20-1). 1.9 Generic Issues The Nuclear Regulatory Commission staff continuously evaluates the safety require-ments used in its reviews against new information as it becomes available. In some cases immediate action or interim measures are taken by the staff to assure safety. In most cases, however, the initial assessment indicates that immediate licensing actiors or changes in licensing criteria are not necessary. In any event, furtner study may be deemed appropriate to make judgments as to whether existing staff requirements saould be modified. These issues being studied are sometimes called " generic safety issues" because they are related to a particular class or type of nuclear facility. A di',>ssion of our program for the resolution of these generic issues and how the issues relate to a decision on issuance of construction permits for NEP 1 and 2 will be provided la a future supplement to the Safety Evaluation Report. 1.10 Three Mile Island Power Plant Unit 2 Incident The NRC staff is currently conducting a thorough investigation of the March 28, 1979 incident at the Three Mile Island Power Plant, Unit 2 (Docket No. 50-320). This investigation includes studies of the potential design deficiencies in the plant, plant operator response to the incident including operator errors and/or misinterpre-tation of plant instrumentation and all other aspects of the incident which might lead to information that would improve the safety of nuclear power plants. The major emphasis of the current staff effort is focused on nuclear power plants that S37010 g

are presently licensed to operate. However, the results of the staff's investiga-s tiens will also be applied to p. ants (1) for which applications for construction permits have been made but not issued, (2) that are currently under construction, and (3) for which applications for operating licenses nave been made but not yet issued. New safety requirements ' rising from these investigations will be applied to the NEP 1 and 2 to the extent that they are aoplicable. We will report the results of our evaluation in a future supplement to the Safety Evaluation Report. 1-5 Ue.) ( l)ijLJL n <, 8 r <A

2.0 SITE CHARACTfRISTICS 2.5 Geology and f ;mology 2.5.1 Geology In the Safety Evaluation Report we stated that we nad not completed our review of the available information cencerning the New Shoreham Fault. We have now completed our review and the following evaluation replaces the "New Shoreham Fault" portion of Section 2.5.1 in the Safety Evaluation Repert. New Shoreham Fault The New Sr 3rsham fault was first recognized by McMaster (1971) in interpretation of longitudinal seismic reflection profiles spaced four to nine kilometers apart off the coast of Rhode Island. The fault strikes northwesterly in a manner that could be considered anomalous relative to most New England and Appalachian structural trends which generally strike in a northeasterly direction. We also recognized that this fault offsets Cretaceous (136-65 million years ago) units which indicates that the last movement on it post dates the last generally recognized regional tectonic event in the Appalachian system. Post-Triassic (225-190 milion yeus ago) of fsets on faults in the eastern United States havt, however, been previously recognized in a number of places (Darton, 1950; White, 1952; York and Oliver, 1976). York r d Oliver (1976) have catalogued and briefly described 33 faults in the eastern United States, 18 of which are located in the Atlantic Coastal Plain and Piedmont geologic provinces, that displace sediments ranging in age from Cretaceous to Pleistocene. This fault can be traced from 10 kilometers west of Block Island, Rhode Island seaward for approximately 70 kilometers. The most northern extent of the fault is about 20 kilometers south of the prooosed site; however, a magnetic anomaly which has a sitilar strike indicates that it may extend closer to the Connecticut shore-line near Fisher's Island. The New Shoreham rault offsets inferred Cretaceous age (136-65 million years ago) sediments by as much as 40 meters with lesser amourts of offset of possible Tertiary age (65 1/2 million y!ars ago) sediments. More recent sediments of indeterminate Plei tocene age (between 1-1/2 million years to IE,000 years ago) or older are not offset within the resolution of the seismic reflection data. The data would allow for recognition of several feet of vertical offset. The applicants and their consultants have conducted an extensive offshore study of the New Shoreham fault in the form of marine seismic profiling and stratigraphic ba b b $.

correlations. The data was interpreted as indicating that last fault movement definitely occurred more than 43,800 years ago and probably before 20 million years ago. This determir.ation of the age of last movement of this fault is based on several observations. On the northern end of the fault, young sediments contained in a buried ancestral stream channel which crosses the fault are not offset. Based on an analysis of erosional / depositional unconformities and estimated correlations with glacial and interglacial episodes, these sediments have been determined to be at least 43,800 years old and probably greater than 120,000 years old. On the southern extent of the f ault, sedimentarv uni'.s which have an estimated age of 20 million year, ago are not offset. The agr of this unit is determined by development of a stratigraphic column based upon the projection of the regional dip of units, projections of drill hole data and bottom samples, and extensive seismic profiling. Based upon our res' 1 of the available infornation, we generally concur with these conclusions. Due to limitations in assigning ages to the channel-fill sediments, however, we believe that the age of these sediments can only be determined to be of glacial age (1-1/2 million to 15,000 years ago) or older. The New Shareham f ault lies near a region where, because of early colonization, there exist historical records of earthquake activity extending back some 300 years. An extensive seismograph network has also been in operation in the New England area for the past three years. Examination of data from these sources indicates approxi-mately ten earthquakes have occurred offshore of Rhode Island within 50 kilometers of the coastlire. These are mostly small magnitude (less than three) events for which the maximum historical intensity determined was V. Recently, several researchers (Fisher, 1978; McMaster and Collins, 1978) have suggested that several of these epicenters can be correlated with faults or geophysical lineaments. It is very difficult to assess the validity of these correlations in any rigorous way since no more than one or two epicerters fall on any of the seven or eight proposed faults or lineaments. Usually a larger number of events is needed to make such a correlation. One of the small earthquakes (magnitude 2.2) was located near the New Shoreham fault 20 kilometers south of Block Island. The other epicenters, however, lie to the east and to the north of Block Island away from the fault. The distribution of earthquake epicenters offshore of Rhode Island shows no evidence that the New Shorenam fault represents a zone of increased seismicity. A reasonable assessment of the historical geologic development of the New Shoreham fault, including the absence of offset of glacial age channel-fill sediments and Tertiary age sedimentary units combined with the lack of evidence in the record of historic and instrumental seismicity to suggest earthqua! activ'ty associated with the fault, provides reasonable assurance that the New Shoreham fault is not capable within the meaning of Appendix A to 10 CFR Part 100 and does not pose ,azard to the proposed New England nuclear plants some 20 kilometers distant. 4 O $ YOW 2-2

With the completion of an evaluation of the New Shoreham fault, we confirm Our conclus-ion in the Safety Evaluation Report that the 0.25 9 safe shutdown earthquake design is conservative for the NEP 1 and 2 site. We consider this matter resolved. 'b0 / 2-3

a 3.0 DESIGN CRITERIA F0P STRUCTURES, COMPONENTS, EQUIPMENT, AND SYSTEMS 3.9 Mechanical Systems and Components In the Safety Evaluation Report, we stated that we would require that the applicants discuss the design compliance to Regulatory Guide 1.124, " Service Limits and Loading Combinations for Class 1 Linear Type Component Support," (Revision 1) and Regulatory Guide 1.130, "De,ign Limits and Loading Combinations for Class 1 Plate and Shell Type Component Supports." Regulatory Guide 1.124 delineates acceptable design limits and appropriate combi-nations of loadings associated with normal operation, postulated accidents, and specified seismic e its for the design of Class 1 linear-type components supports as def ned in Subsection NF of Section III of the Boiler and Pressure Vessel Coc Regulatory Guide 1.130 delineates acceptable design limits and appropriate combina-tions of loadings associated with normal operation, postuisted accidents, and speci-fied seismic events for the design of Class 1 flat plate ar : hell type component suppurts as defined in Subsection NF of Section III of the Boiler and Pressure Vessel Code. The applicants' response was not completely in accordance with the recommendations of these Regulatory Guides. At our request, the applicants provided additional information by Amendment N-12 to the Preliminary Safety Analysis Report (Q 121.3) to support or clarify its positions. The applicants' positions and our conclusions are summarized below. With respect to design buckling criteria for nuclear steam supply system support which have to withstand faulted condition loads, the support compressive loads will be limited to 0.67 times the critical buckling strength for faulted plant conditions. This is consistent with our position in the Regulatory Guides. The applicants stated that if it can be shown by a detailed evaluation that support functional adequacy can be assured with loads that exceed the 0.67 limit, documentation verify-ing the support design adequacy will be submitted to us for review. The supports for the nuclear steam supply system will not be designed with critical buckling strengths excteding the 0.67 limit without our prior approval. We conclude that this commitment provides sufficient assurance that acceptable buckling criteria will be used and that the position is acceptable. Paragraph C.7(b) of Regulatory Guide 1.124 and C.6(b) of Regulatory Guide 1.130 provides requirements for determining the maximum allowable service level D load 3 w..p < r~ e:) t } l' s J.1. U

under plant faulted conditions for component supports d.: igned by the load rating method. In Amendment N12 to the Preliminary Safety Analysis Report, the applicants proposed to use t'1e requirements of paragraph F-1370(d) of Appendix F of the Section III M th( Boiler and Pressure Vess ' Code for determining the maximum allowable service level D load. Although ti..Je requirements are somewhat less conservative than those of the Regulatory Guides, the applicants have also committed to previde fursher details of implementation in a timely manner in the event the load rating method is used. We find that the requirements of paragraph F-1370(d), if properly implemented, can provide for a sufficiently conservative support design. We conclude that the commitment by the applicants to provide details of criteria implementation if this load rating method is to be used, provides reasor.able assurance that such use of paragraph F-1370(d) requirements will be implemented in an acceptable manner and will provide for sufficient conservatis.n for NEP 1 & 2 supports desic,ned by this method. Paragraph C 8 of Regulatory Guide 1.124 and C.7 of Regulatory Guide 1.130 rece, mends design limits for component supports in systems whose normal function is to prevent or mitigate the consequences of events associated with an emergency or faulted plant condition. However, the position also permits other justifiable limits as long as the support function is maintained. Amendment N12 to the Preliminary Safety Analysis Report takes exception to the specific design limits recommended in the guide, but notes that with less conservative limits, the support function will be demonstrated as a part of the component operability assurance program discussed in Section 3.9.2.4 of the Preliminary Safety Analysis Report. We find the applicants exception acceptable on the basis that support adequacy wil'. be demonstrated in the component operability program. ~ b.T[O1h

6.0 FNGINEERED SAFETY FEATURES 6.2 Containment '.ystems 6.2 i Containment Functional Design We reported in the Safety Eva!uation Report that the results of analyses for a postulated main steam line break accident for plants similar to NEP 1 and 2 show that the pcak calculated containment temperature can exceed the design temperature for a short time period. In order to consider this matter further for NEP 1 and 2, we requested the applicants to provide information describing and justifying the analytical model used to determine the maximum containment temperature and pressure for a spectrum of postulated main steam line breaks. The applicants have recently provided this information. We have ccmpleted our review of the applicants' analysis, a discussion of which follows. The applicants have analyzed a spectrum of postulated main steam line breaks to determine the containment pressure and temperature transients. Mass and energy releases for a spectrum of steam line breaks were calculated using the MARVEL code described in Topical Report WCAP-8860, " Mass and Energy Releases Following a Steam Line Rupttre." We arc currently reviewing the topical r nort which is scheduled to be completed in September 1979. The HARVEL code describes the primary and secondary systems of a pressurized water reactor int?ading the power excursion which may occur in the core following a main steam line break. The code calculates heat flow from the core and intact steam generators into the primary system, and heat flow from the primary system into the brokea steam generator. The primary system heat flow produces additional steam which is added to the containment. No liquid entrainment was assumed to flow from the break so that the break flow is all steam. This assumption permits the second-ary liquid to remain in the steam generator until it is boiled by heat flow from the primary system and maximizes the energy release. Using this assumption, for a 6 double ended break approximately 55 x 10 additional British Thermai Units of energy are added to the containment relative to the case with entrainment. This additional energy provides a margin of conservatism in the analysis. The analysis includes additional steam from the intact steam generators before closure of the isolation valves and the unisolated steam in the steam lines and turbine plant piping. Flow from the intact steam generator is calculated using the area of the open steam line isolation valves which provides a 57 percent reduction in flow area. Feedwater flow is increased to the affected steam generator using the reduced pump discharge pressure before isolation. No credit is teken for any feedwater flow reduction during the valve closure period. The unisolated feedwater mass is added to the initial steam generator inventory duri.. 15e blowdown. 6-1 3,,,

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Based on the above we conclude that the rass and energy release data are conservative for containment analysis of NEP 1 and 2 and that the mass and energy release rates will not be appreciably altered by the completion of our review uf the MARVEL Code topical report. The applicants have identified the worst case main steam line break, with respect to cont, 1 ment atmosphere pressure, to be a full double-ended rupture of a main steam line while operating at 102 percent of full power. The applicants have also performed a single-failure analysis and determined the limiting case to be the failure of a main steam isolation valve to close. Additionally, the applicants have conserva-tively assumed the loss of of fsite power for determining the spray actuation time. For the worst case main steam line break the applicants have calculated a peak containment atmosphere pressure of 33.4 pounds per square inch gauge. We have performed a confirmatory analysis of the containment atmosphere response to the worst case main steam line break identified by the appli: ants and calculate a perk pressure of 3a pounds per square inch gauge. Our results conf

• rm the accepta-bility of the applicants' analysis and confirm the a"ceptability of the proposed containment design pressure. We consider this matter resolved.

We also reported in the Safety Evaluation Report that we had not completed our review of the applicants' revised subcompartment analysis including certain nodalization sensitivity studies. The pressure response within a subcompartment is sensitive to the number of volume nodes used in the analysis. Additionally, the applicants provided an analysis of ;he transient loads acting on enclosed components for use in the design of the component supports. The results of the applicants' revised subcompartment analysis are summarized in Table 6-1. TABLE 6-1 SUBCOMPARTMENT ANALYSIS RESULTS Pipe Break Postulated Peak Calculated Location Pipe Break Differential Pressure Reactor Cavity 144 square inches 135.1 pounds per square inch Cold Leg Steam Generator Double ended 79.7 pounds per square inch Compartment Hot Leg Pressurizer Double-ended 18.8 pounds per square inch Compartment spray Line We reported in the Safety Evaluation Report that the applicants had committed to increase the calculated peak dif ferential pressure for each subcompartment by a factor of 1.4 to establish the design dif ferential pressure for the subcompartment structures. The applicants have since proposed eliminating the 40 percent margin on the basis that the revised subcompartment analysis utilizes final design information rp ro -,3 A*b!S 6-2

obtained from the Seabrook plant design, which is the base plant for replication, rather than any preliminary design information. We find this approach acceptable since the normal purpose of the 40 percent margin, lacking final design information, is to assure design accuracy even though changes may be adopted by the applicants between the construction permit stage and the operating license stage of review. Since the Seabrook design is much further advanced, parameters are not likely to be changed, and therefore, we do not require the 40 percent margin identified above. We have performed confirmatory analyses which verify the adequacy of the pressures used to evaluate structural integrity. The applicants have provided nodalization sensitivity studies to demonstrate the acceptability of the subcompartment nodali-zation models We, therefore, conclude that the subcompartment analysis is accept-able for evaluation of the integrity of subcompartment walls and component supports. Additionally, we are in the process of developing specific criteria for subcompart-ment analysis under Generic Task A-2, Asymmetric LOCA Loads. The results of this generic study will be applied, as appropriate, at the operating licen',e review stage and we will require the applicants, at that time, to satisfy any analytical or design requirements resulting from the completion of Generic Task A-2. We consider this matter resolved. ((/YL 6-3

8.0 ELECTRICAL POWER 8.2 Offsite Power System 8.2.4 Degraded Grid Vcltage Conditions In the Safety Evaluation Report, we stated that we needed additional information f rom the applicants concerning a second level of voltage protac' ion. We informed the applicants of additional requirements which are defined in a ction 8.2.4 of the Safety Evaluation Report. As stated in that report, the a,91icants documented a description of a design that they believe conforms to the positic7 noted in Section 8.2.4 of the Safety Evaluation Report. We have reviewed the applicants' information and found that additional information would be required to justify the applicants' approach which did not conform with the staff's position. The applicants subsequently have committed to meet the staff position which we find acceptable for the CP stage of review. The detail implementation of the commitments will be reviewed during the operating license review. We, therefore, consider this matter resolved. S 7020 8-1

18.0 REVIEW BY THE ADVISORY COMMITTEE ON REACTOR SAFEGUARDS At its 219th meeting on July 6-8, 1978, the Advisory Committee on Reactor Safeguards completed its review of the application by the New England Power Company and co-applicants for permits to construct the NEP 1 and 2. A copy of the Committee's report, dated July 13, 1978, which contains certain comments and recommendations, is included as Appendix A to this report. The actions we have taken ;r plan to take in response to the Committtee's comments ar.d recommendations are described in the following paragraphs. (1) The Committee recommended that the applicants and the staff evaluate the transient resulting from a loss of the combined offsite and onsite alternating current power systems as a function of time of system loss, as well as the capability of the plant to tolerate a loss of alternating current power for extended periods. In a letter dated March 22, 1979, the applicants prosided an analysis of the combined loss of offsite and onsite alternating current electrical power. The applicants consider the simultaneous loss of both power scurces for NEP 1 and 2 to be a highly unlikely evt. because multiple single failures are required to postulate such an occurrence. The applicants' position is that even if offsite power is lost, at least one emergency diesel generator will be available and operable. In addition, the applicants state that even if the postulated event were to occur, alternating current power would be restored within the time ava'lable for corrective action by either (1) restoring ne of the three incoming 345 kilovolt power lines, or (2) starting one of the four onsite redundant em egency diesel generators. The Commission's regulations as well as our Regulatory Guides and Standard Review Plan do not require consideration of the total loss of alternate current power as a design basis for nuclear plants. We believe that the evaluation recommended by the Committee would be equally applicable to all nuclear plants and that there are no unique features of the NEP 1 and 2 design that necessitate a special study of the matter. The acceptability of the NEP 1 and 2 offsite and onsite power systems is discussed in Section 8.0 of the Safety Evaluation Report. The multiple failures that would be required for a complete loss of alternating current power makes the event extremely unlikely. However, we Pave programmed a generic technical activity related to this matter and will report on this activity in a future supplement to the Safety Evaluation Report. 18-1 SEOM

(2) The Committee recommended that the staff provide the applicants with an illustra-tive model which shows an appropriate response to Position C.3 of Regulatory Guide 1.97, " Instrumentation for Light-Water-Cooled Nuclear Power Plants to Assess Plant Conditions During and following an Accident," Revision 1. This position deals itt extended range instrumentation for post-accident monitoring. We have developed Task Action Plan A-34 in order to develop guidelines to be used by applicants for the implementation of Revision 1 to Regulatory Guide 1.97. We will implement Revision 1 to Regulatory Guide 1.97 on all applications, including NEP 1 and 2 on a schedule and to the degree determined ir carrying out Task A-34. We find that there is sufficient flexibility in the NEP 1 and 2 design to implement, at a later date, any changes that may result f rom completion of Task A-34. (3) The Committee identified those g meric issues relating to light water reactors which were discussed in the Committee's report to the Commission on March 21, 1979 (Report No. 7), and which the Committee considered relevant to the NEP facility. The Committee noted that the issues should be dealt with by the staff and applicants as solutions are found. We have transmitted the Committee's recommendations to the applicants for its consideration in proceeding with the NEP design. Appendix C to the Safety Evaluation Report discusses the disposition and status of the generic matters raised by the Advisory Committee on Reactor Safeguards. ( [,E l- 2

20.0 FINANCIAL QUALIFICATIONS 20.1 Introduction The Commission's regulations relating to the determination of the applicants' fiaancial qualifications appear in Section 50.33(f) and Appendix C to 10 CFR Part 50. These regulations state that there must be reasonable assurance that an applicant c>n obtain the necessary funds to cover the estimated construction costs of the proposed nuclear power plant and its related fuel cycle costs. This standard of reasonable assurance must be vieweb in light of the lengthy period of time required to construct a nuclear facility. The earliest dates for commercial operation of the New England Power Company Nuclear Station, Unit Nos. I and 2 are November 1986 and November 1988, respectively. Consequently, certain assumptions must be made about future conditions. Two basic assumptions we have made in our a.ialysis are that there will be rational regulatory policies with respect to the setting of rates and that viable capital markets will exist. The former assumption implies that rates will be set to cover the cost of service, including the cost of capital; the latter assumption implies that capital will be available at some price. Given these assumptions, our evaluation is then focused on the reasonableness of the applicants' financial planning. The following is our evaluation of the applicants' financial qualifications. 20.2 Ownership New England Power Company, the lead applicant with a 78.417 percent ownership share, along with the nine other utilities, has applied for a construction permit for New England Power Company Nuclear Station, Units Nos. 1 and 2. According to the license application, the 10 utilities assuming the responsibility for the construction of New England Power Company Nuclear Station, Unit Nos. 1 and 2, will participate as follows: Percent New England Power Co-pany 78.417 Bangor Hydro-Electric Company 4.350 Canal Electric Company 4.350 Fitchburg "as and Electric Light Company 1.130 Montaup Electric Company 4.350 The Harragansett Electric Company 0.260 Massachusetts Municipal Wholesale Electric Company 6.008 Taunton Municipal Lighting Plant 0.500 Vermont Electric Cooperative, Inc. 0.200 Maine Public Service Company 0.435 TOTAL 100.000 20-1 g3,3.. 3, pay ryts 1 ;tlast x

20.3 Construction Cost Estimates The most recent estimates of the total cost of New England Power Company Nuclear 51ation, Unit Nos. I and 2, which includes escalation and allowance for funds used during construction, was provided in the applicants' letter dated April 13, 1978, and can be summarized as follows: ($ tnous-,d_s] Total Nuclear Plant Costs $2,631,0 Transmission and Distribution 132,000 Nuclear Fuel - Initial load 323,000 Total $3,086,000 The estimated cost of the nuclear plant has been reviewed by comparing it to the cost projected by the Department of Energy's CONCEPT costing model. The model currently uses construction inflation or escalation rates of 6 percent per year for site labor, mat ials, and purchased equipment. The CONCEPT model astimated the cost of the nuclear plant to be $2,764,000,000, compared with the :pplicants' estimate of $2,631,000,000, or a o fference of abcut 5 percent. It should be noted that Oak Ridge National Laboratory which does the computer work for the NRC staf f, states in its letter to the staff dated October 4, 1978 that the " estimates produced by the CONCEPT code are not intended as substitutes for detailed engineering cost estimates, but were prepared as a rough check on the applicants' estimate." However, for the purpose of our review of the applicants' financial qualifications, we concluA that the use of the applicants' estimate is appropriate. 20.4 Financial Analysis The ability cf an investr --owned utility to finance a construction program over a future period is a function of a number of variables, the most important of which is the level of profitability. Profitability can be assessed by referring to the return a utility earns on the capital it employs in its business and comparing it to the risk-adjusted returns earr.Pd elsewhere in the economy. The concept of a fair rate of return on investment is deeply ingrained in public utility regulation. The capability of an electric utility to finance a car.struction program requiring large amounts of external financing will depend, in part, on its ability to earn such a fair. ate of return. Further, a fair rate of return on total capital will also result in the return on common equity being f air and reasonable, since common equity is a component of :ntal capital. All other things being egaal, the return on common equity is :he best indication of a company's profitability and will b se a substantial impact on cther facets of a company's financial performance. Although a fair rate of return might be characterized as the riost significant variable af fecting an applicant's ability to finance its proposed construction program, it must also be coupled with a reasonably balanced capital structure to provide reasonable assurance that adequate coverages on its senior securities will result, thereby 20-2 &p"O&

maintaining their marketability. Historically, the average investor-owned electric utility has had a capital structure comprised of around 50 to 55 percent long-term debt, 10 to 15 percent preferred stock, and 30 to 40 percent common equity. Given a particular capital structure with its embedded costs of debt and pref erred stock, the return on common equity will determine the level of interest coverage a.id preferred dividend coterage. These coverage, in turn, will significantly affect the ratings assigned to a company's senior securities by the pri1cip&l rating agencies and, consequently, the interest rate demanded by investors to purchase these securities. The return on common equity will also affect the exfected rate of dividend growth and thus the price and attractiveness of the company's common stock. When large amounts of securities need to be sold to finance a construction program, the ability to sell common stock is the key to maintaining a reasonably balanced capital structure. In additicr., the return on common equity affects the level of internally generated funds through its impact on retained earnings, although the primary source of internally generated funds is depreciation. Since a lengthy and uncertain future period is involved in the analysis of an hpp!'

's financial qualifications, we do not look solely at historical data.

For this reasJn, we have requested the applicants to submit a projected system wide " sources and uses of funds" statement covering the period of construction, demonstrating how anticipated construction expenditures might La met by internal and external sources of funds. Our analysis of the submitted projections then focuses on the reasonableness of these projections and their underlyir.g assumptions. The projected " sources ar': uses of funds" statements submitted by the 10 applicants for the period from 1978 t' 1988 together with the underlying assumptions, are presented in Appendix D. The applicants project a rate of retuen on year-end common equity in the range of 12 percent - 14 percent, during the 11 year construction period. Based on infor-mation submitted by the applicants, a rate of return on this order of magnitude has been determined to be just and reasonable by State Public Utilities Commissions in their respective service areas. Given prevailing and reronably forseeable capital market conditiors, we conclude that the applicants' assumptions with respect to rates of return on common equity are within a reasonable range. 20.5 Conclusion We have reviewed the financial information presented in the application, and amendments thereto, and conclude that there is reasonable assurance that these 73 applicants can raise the necessary funds to design and construct NEP 1 and 2. accordingly, we find them financially qualified to carry out the activities for which th'st )ermit is srught. Our conclusion is based upon the analyses contained in Appendix D to this s @ plement, the basic assumptions of rational regulatory policies and relatively stable capital market conditions and the assessment that the financial projections 20-3 g,,. y y .st?/ M d

submitted by the applicant constitute a reasonable financing plan. We <nd not censider these projections to be a forecast of the financing which will necessarily occur. The applicants needed only to demonstrate one possible way the planned construction program, including the subject facility, might reasonably be financed. It is expected that financing plans will change from time to time to accommodate changing conditiens. The financing proposed is in accord with general industry practices and the underlying assumptions, althou9h not susceptible to precise measurement against e'asolute criteria, are consistent with postulated conditions. 4 gg793g 20-4

I I 21.0 CCNCLUSIONS In the Safety Evaluation Report, we stated that subject to favorable resolution of t.e nine outstanding matters identified in Section 1.8 we made the cnnclusions set forth in Section 21. We have discussed six of these outstanding issues in this supplement and have indicated a favorable resolution of each matter. Therefore, when we have resolved the three outstanding issues listed in Section 1.8 of this supplement, we will be able to af firm our conclusions as set forth in Section 21.0 of the Safety Evaluation Report. k E gy v ;;y : 7s .j d a ~*~1 1

Appendix A

1. p**'%q\\

UNITED STATES ! f,,,, Y % NUCLEAR REGULATORY COMMISSION 7 f ADVISORY COMMITTEE ON RE ACTOR SAFEGUARDS (4"Jb[a/ WASHINGTON. D. C. 20555 t, July 13,1978 Honorable Joseph M. Hendrie Chairman U. S. Nuclear Regulatory Canission Washington, DC 20555

SUBJECT:

REPORT CN NEW ENGIMD IGER COMPMW NUCLEAR UNITS, NEP 1 AND 2

Dear Dr. Hendrie:

During its 219th meeting, July 6-8, 1978, the Advisory Committee on Reactor Safeguards reviewed the application of the New England Power Company and eight other utilities (Applicants) for a permit to construct the New Eng-land Power Carpany Nuclear Units, NEP 1 and 2. The proposed site for the plant was visited by members of a Subcommittee on June 28, 1978, and a Subcommittee meeting was held in Warwick, Rhode Island on June 28 and June 29, 1978. During its review, the Committee had the benefit of discussions with the Nuclear Regulatory Commission (NRC) Staff, representatives of and consultants to the Applicants, the Yankee Atomic Electric Company, and the Westinghouse Electric Corpora-tion, as well as comments from members of the public. W e Committee also had the benefit of the documents listed. The NEP units will be replicates of the Seabrook Station Units 1 and 2 on which the Cor. aittee reported in its letter of December 10, 1974. Rese units will utilize two four-loop Westinghouse pressurized water reactor nuclear steam supply systems each having a power level of 3411 FMt. Each unit utilizes the RESAR-3 Consolidated version and is similar to the obr-ble Hill Station on which the Corr:nittee reported in its letter of October 22, 1976 and the Tyrone Energy Park on which the Canmittee reported in its letter of December ll, 1975. The proposed plant will be located on a 549 acre site in the southern part of Washington County, Rhode Island adjacent to Block Island Sound. Re proposed site is the location of the abandoned Charlestown Naval Auxiliary Landing Field and is presently owned by the General Services Administra-t;on. Re site is approximately 35 miles south of Providence, Rhode Is-tand and 18 miles west-southwest of Newport, Rhode Island. Re contiguous communities of Westerly, Rhode Island and Pawcatuck, Connecticut (approx-imately 7.5 miles west of the site) have teen designated as the nearcst population center (1970 population 19,000; projected 1990 population 25,000). Re mini:m:n exclusion area boundary distance is 2130 feet from the center of either containment building and the low population zone ra-dius is 1.5 miles. Iand uses in the vicinity of the proposed plant site are primarily for residential and recreational activities. W lU2B

Appendix A Honorable Joseph M. Hendrie July 13,1978 The Applicants have proposed that horizontal ground accelerations of 0.15g and 0.075g, at the foundation level, are appropriate reference acceleration values for the safe shutdown earthquake and operating basis earthquake, re-spectively. HowcVer, since the NEP design is a replicate of the Seabrook design, the units will be designed for a safe shutdown earthquake accelera-tion of 0.25g at the foundation level and for an operating basis earthquake acceleration of 0.13.9 The Committee recommends that the Applicants and the NRC Staff evaluate the transient resulting from a loss of the combined offsite and onsite AC power systems as a function of time of system loss, as well as the capability of the plant to tolerate a loss of AC power for extended periods. If appro-priate, design modifications to improve reactor capability in this regard should be developed. "he Committee wishes to be kept informed. Although committed to compliance with Regulatory Guide 1.97, Revision 1, the Applicants have taken exception to Position C.3 requiring extended range instrumentation. 'Ihe intent of this position is to provide the facility op-erator with a capability for following the course of postulated accidents be-yond the design basis accident. 'Ib assist in this matter, the Corraittee rec-ommends that the NRC Staff provide the Applicants with an illustrative model showing an appropriate response to this position. The Committee wishes to be kept informed. With regard to generic problems cited in the Committee's report, " Status of Generic Items Relating to Light-Water Reactors: Peport No. 6," dated Novem-ber 15, 1977, items considered relevant to the NEP Units are II-2, II-3, II-4, II-5B, II-6, II-7, II-9, II-10, II-A2, II-A3, II-A4, II-B2, II{1, II-C2, II-C3A, II-C3B, II-C4, II{5, II-C6, II-D2. 'Ihese problems should be dealt with by the NRC Staff and the Applicants as solutions re found. 'Ihe Advisory Cctraittee on Reactor Safeguards be: aes that, contingent upon the acquisition of the site by the Applicants, due consideration is given to the foregoing, the New England Power Company.vuclear Units, NEP 1 & 2 can be constructcd with reasonable assurance that they can be operated without undue risk to the health and safety of the public. Sincerely v urs, CW Stephen Lawroski Chair:ran N,MD g_p

Appendix A Honorable Joseph M. Hendrie July 13,1978

References:

1. New England Power Company Preliminary Safety Analysis Report, NEP 1 and 2. Volumes 1 through 9 with Amendments N1 through Nil. 2. Safety Evaluation Report related to construction of New England Power Project, Units 1 and 2, NUREG 0424, June 1978. 3. Westinghouse Electric Corporation Reference Safety Analysis Report, RESAR-3 Consolidated Version, Volumes I through VIII with Amend-ments 1 through 6. 4. Written statement from Dr. Clement A. Griscom, Division of Marine Resources, University of Rhode Island. 5. Written statement from Mr. James E. Hickey. Division of Occupa-tional Health and Radiation Control, Department of Health, State of Rhode Island and Providence Plantations. 4 0 n-3

A;PENDIX B CONTINUATION OF CHRONOLOGY OF REGULATORY REVIEW May 22, 1978 NEP letter transmitting supplemental information in the form of diagrams. These diagrams will be included in Amendment N12. May 19, 1978 DPM letter requesting additional information concerning the Design for Protection Against Degraded Grid Voltage Conditions. May 25, 1978 Order Regarding Intervention and Limited Appearances issued by the AS&LB. May 26, 1978 NEP letter transmitting the affidavit for service of Amendment N11 to the PSAR. May 31, 1978 .EP letter transmitting additional information which will be included it. Amendment N12 to the PSAR (RAI 121.3.). May 31, 1978 DPM letter concerning NEP's response to Regulatory Guides 1.124 and 1.130. June 1, 1978 Memo from 0. D. Parr to R. S. Boyd concerning the Status of Safety Evaluation Report for NEP-1 and NEP-2. June 7, 1978 DPM letter requesting additional information on the postulated steam line creak. June 7, 1978 DPM letter transmittirg copies of the NFP-1 & 2 Safety Evaluation Report to applicant and service list. June 12, 1978 DPM letter to all power reactor licensees and applicants transmittinc security handbooks originated at Sandia. June 15, 1978 NEP letter concerning NEP Management Change. June 23, 1978 NEP letter transmitting Revision 2 to the NEP General and Financial information. t3 <n - - \\* us el i ;~'s>g aJL B-1

June 23, 1978 NEP letter concerning Regulatory Guides 1.124 and 1.130. June 27, 1978 DPM letter concerning Classification of Main Feedwater Isolation Valves for NEP. June 29, 1978 ACRS Suocommittee Meeting in Warwick, Rhode Island. June 30, 1978 NEP letter transmitting the affidavit for service of Revision 2 to the General & F nancial information. July 6, 1978 NEP letter concerning a recent Federal Register Notice. July 13, 1978 ACRS issues its Report on New England Power Company Nuclear Units, NEP-1 and NEF-2. July 17, 1978 DPM letter transmitting a copy of the ACMS letter on NEP-1 & NEP-2 to applicant and service list. July 18, 1978 DPM letter to all applicants with docketed applications transmitting NUREG/CR-0181, " Barrier Penetration Database." July 20, 1978 NEP letter transmitting a partial response to questions addressed to EP by DPM staf f at a meeting held on June 6,1978. August 1, 1978 DPM letter to all power reactor licensees and applicauts with appli-cations for a license to operate or construct a power reactor. This letter transmits NUREG-0219, " Nuclear Security Personnel for Power Plants, Content and Review Procedures for a Security Training and Qualification Program." August 7, 1978 NEP letter concerning forthcoming visit wito H. Denton on August 10, 1978. August 8, 1978 NEP letter requesting withholding proprietary information from public disclosure (same as withheld on FARLEY on June 14, 1978 - AW-76-29). August 8, 1978 NEP letter transmitting responses to NRC requests for info on 222.1, 222.2, 222.3 and 222.4. August 10, 1978 DPM letter concerning Standard Format for Meteorological Data on Magnetic Tape. August 15, 1978 DPM letter concer:.ing PWR Steam Generator Conference. V o* o.,.~ y0!" ad/ B-2

August 31, 1978 NEP letter concerning Classification of Main Feedwater Isolation Valves. September 18, 1978 Summary of Statt Meeting cn the New Shoreham Fault. September 18, 1978 Summary of ACRS Subcommittee Meeting - NEP 1 & 2. September 22, 1978 NEP 1etter transmitting responses to Request 2. October 3, 1978 NEP letter transmitting supplemental information requested by the NRC as (RAI) 121.3. October 16, 1978 DPM letter requesting additiona! information - financial. November 3, 1978 DPM letter to Westinghouse concerning proprietary material on the New England dockets. This letter requested up-to-date information and affidavits. November 14, 1978 Order Denying Motion of State of Rhode Island for Order Requiring Further Information. The order by the State of Rhode Island for entry requiring further information on ata in the En/ironmental Reports (DES or FES) is denied. November 20, 1978 DPM letter ct.cerning NUREG-0219 and the reference document TRADOC Pamphlet 350-30. November 27, 1978 NEP letter concerning alternate sites to the pronosed Charlestown location of NEP 1 & 2. December 1, 1978 Westinghouse letter transmitting an amended affidwit for proprietary material on New England dockets. This affidavit references Farles 1 and 2 material approved by NRC on June 24, 1978. January 15, 1979 NEP letter transmitting anti-trust information on Massachusetts Municipal Wholesale Electric Company and Maine Public Service Company. January 24, 1979 DPM letter withholding from public disclosure information submitted in the form cf tables in support of a reply to question 222.1 concerning mass and energy release rate data. (CAW-78-57 and AW-76-29) t January 25, 1979 NEP letter concerning classification of main feedwater isolation valves. January to,1979 DFM generic letter concerning information relating to categorizaticn of recent regulatory guides by the regulatory review committee. ( B-3 yy";Qy)q -r = gy.., .< ry

Janua ry 31, 1979 NEP letter concerning antitrust information on Maine Public Service Company as an owner of NEP 1 & 2. February 9, 1979 NEP letter t*ansmitting Revision 3 to the General and Financial Information. February 13, 1979 NEP letter transmittina a Certificate of Service for Revision 3 to the General and Financial Information transmitted on February 9, 1979. February 23, 1979 DPM letter concerning Access Control. February zo, 1979 Representatives from NRC & NEP meet ir. BethEsda, MD to discuss the proposed revetment design criteria. March 2, 1979 Summary of Meeting held on February 28, 1979. March 13, 1979 DPM letter to applicant transmitting a copy of the Federal Register Notice to be issued in the Federal Register on March 20, 1979 and advising of the names of newspapers and trade journals in which ads will be placed. March 2, 1979 DPM letter (Generic) transmitting " Summary of Operating Experience with Recirculating Steam Generators," NUREG-0511. March 12,1979 DPM letter requesting additional justificatio, for financial material submitted by NEP for withholding from public disclosure as proprietary. March 13, 1979 NEP transmits Amendment N12 to the PSAR. March 15, 19'.'" DPM letter (Generic) concerning ATWS. March 20, 1979 NEP letter transmitting and affidavit for service of distribution on PSAR Amendment N12. March 22, 1979 CPM letter (Generic) concerning a meeting with utilities on physical security requirements.

• arch 22,1979 NEP 'etter concerning Total Loss of Offsite and Onsite AC Electrical Power March 23, 1979 DPM letter (Generic) concerning a Pipe Crack Study Group.

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May 11, 1979 DPM letter concerning release of financial material to the public. June 13, 1979 NEP letter concerning RESAR-1 reference. June 13, 1979 NEP letter conce<ning suspending of licensing efforts. I o ~ ;v c-V%) 4

• s.'

tM B-5

APPENDIX _C _C,H, NGES AND CORRECTIONS.O THE SAFETY EVALUATL 9EPORT 3 Page 1-7, Line 13 of Fif th aragraph Change "125 direct current s,lt buses" to "125 volt direct current buses" Page 1-11, Line 2 of Item (4) of Section 1.7 Ch.nge " seismic Category I pipelines" to " seismic Category I buri nipelines" Page 2-5, Section 2.1.3 under 1975 ESTIMATED POPULATION Change: "Other peak transients 75 9885 1.,206 11,786 14,049" to "Other peak transients 494 6594 11.585 12,478 14,049" Page 2-8, Line 3 of Third Paragraph Change "249" to "259" and change "2021" to "2688" Page 2-8, Line 7 of Th'rd Paragraph Change "4000" to "5100" Page 2-15, Lines 12 thru 16, First Paragraph, Section 2.3.3 Line 12 should end with ". grams" The rest of line 12 and lines 13-16 should be deleted. Page 2-21, Line 3 of Fifth Paragraph Change "thus no wells would not" to "thus wells would not" Page 2-24, Line 3 of Fifth Paragraph Change "(17.61 feet 5.37 meters mean sea lev.1)." to "(17.61 feet (5.37 metcrs) above mean sea level)." Page 2-25, Line 2 of Second Paraaraph in Section 2.4.4 Change "The applicants state that the tower will. " to "The applicants state that the ultimate heat sink will. Page 2-27, Lin. 5 of First Paragraph in Section 2.4.6 Change "three feet (one meter)" to "three feet (one meter) above" Page 6-3, Line 5 of Seccnd Paragraph in Sectinn 6.2.2 Change "20 pounds per square gauge." to "25.3 pounds per square inch gauge." C-1 g x a,..,, g,).,,k) N)sh /k)(

Page 7-2, Lines 1-4 of First Paragraph Change ". reactor coolant pump busses.. commitment acceptable." to " rear. tor coolant pump busses. Each trip channel will derive its input from the load side of a reactor coolant pump breaker. Inputs from 13 kilovolt bus 1 (wnich powers pumps 1 and 3) will feed sensors for two of the reactor trip system channels. Similarly, 13 kilovolt bus 2 (which powers pumps 2 and 4) will feed the sensors for the other two trip system channels. The sensors (potential transformers) and the associated underfre-quency and undervoltage relays and timers will be located in Class IE 4160 volt engineered safety feitures switchgear racks which are segregated according to tri?n. We find this commitment acceptable." Page 8-4, Line 2 of item (iii) Change " request" to " result" Page 9-2, Penultimate Paragraph The second sentence should read: "If the applicants elect to qualify the reactor coolant pumps,'they will be qualified for extended operation with no cooling water by a testing program." A fourth sentence should be added: "The qualification requirements for the equipment within the detection and alarm system will be the same as those imposed on the plant safety grade instrumentation." Page 13-1, Line 5 of Second Paragraph Change " President" to " Executive Vice-President" Page 134, Lines 3 and 4 of First Paragraph Change " Telephone, Civil Defense and microwave radio" to " Telephone and microwave radio" page 13-5, Line 11 of Third Paragraph Change "13.3.3.13" to "13.3.14" Page 15-1, Line 2 of Fourta Paragraph in Section 15.1 Change " Failure control rod" to " Failure, control rod" Page 15-3, TABLE 15.1-1 Change " Fuel Handling Fuel Handling 6 Fl F1 Fl" to: " Fuel Handling Fuel Building 6 <1 <1 <1" Page 15-4, TABLE 15.1-2 Change Elemental Iodine Decontamination Factor from "10" to "100" EJ O ( f y pq

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Page 17-3, Line 4 of Fourth Paragraph Change " project manager" to " project engineering manager" Page 17-6, Line 1 of Fourth Paragragh Change " revised" to " reviewed" Page 17-11, FIGURE 17.4 A vertical line should be drawn from the " codes and standards" block to the horizontal line above. Page 17-12, Lines 4-7, 10, and 11 of Second Paragraph Lines 4 & 5: Change " quality control and assurance requirements" to " materials applications and corrosion engineering" Lines 6 & 7: ihange ". audit program to ver.fy the ef fectiveness of United Engineers and Constructors and United Engineers and Constrcctors' suppliers and subcontractors. to ". audit program to verify the effectiveness of United Engineers and Constructors' suppliers and subcontractors. Lines 10 & 11: Change "the quality assurance program." to " materials applications and corrosion engineering." C-3 N['MO

APPENDIX D ANALYSIS OF FINANCIAL QUALIFICATIONS The following information provides the details of the financial analysis for the applicants for the NEP 1 and 2. D.1 New England Power Company New England Power Company is a subsidiary of New England Electric System and serves principally as a wholesale supplier of electricity, primarily to af filiated companies. Operating revenues increased from $476.3 million in 1976 to $530.1 million in 1977 while net income was $49.5 million in 1977 compared to $49.9 million in 1976. Invested capital at December 31, 1977 amounted to $854.9 million and consisted of 50.8 percent long-term debt, 13.0 percent, preferred stock, and 36.2 percent common equity. The return on common equity for 1977 was 13.7 percent compared with 14.9 percent for 1976. Pretax coverages of long-term interest and total interest charges for 1977 were 3.85 times and 3.67 times, respectively, compared witn 4.21 times and 4.00 times for 1976. New E-. gland Power Company's first mortgage bonds are rated "Aa" by Moody's and "A+" by Standard and Poor's. This is an upper medium grade security, having considerable strength, but not entirely free from adverse changes in economic conditions. New England Power Company plans to finance its 78.417 per :ent share of the New England Power Comp.ny f acility by short-term borrowings m 'ich vculd subsequently be permanently finariced by the sale of long-term debt, preferred stock, common stock, and capital contributions from New England Electric System. Available funds from these sources in 1977 totaled $83.1 million and were derived from a $10 million issue. The $23.9 million of internally generated cash in 1977 repre ented a 43.7 percent of construction expenditures (net of allowance for funds used during constructioa). At our request, New England Power Congany supplied a projected sources of funds statement (see Table D-1) for the 1978-1988 period, with underlying assumptions, demonstrating how the requisite funds might be raised. New Enqland Power Company's internally generated cash over this period is projected to be 21.7 percent of total construction expenditures and 35 percent of its expected outlays for the New England Power Company facility. <>.,....)'..,) D-1

hew England Power Company's resale rate to its af filiates and others is subject to the jurisdiction of the Federal Energy Regulatory Ccomission. On December 1, 1977, New England Power Company flied an application with the Federal Energy Regulatory Commission for an increase in wholesale rates of aporoximately $14.3 million. A rate of return on common equity of 14.5 percent was granted in June, 1978. Based uprp New England Power Company's recent earnings performance and current regulatory trends, which would seem to indicate that the Federal Energy Regulatory Commission will grant rates designed to produce a higher return on common equity bei.lg projected over the period of construction is within the zone of reasonableness. 337010 D-2

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ATTACHMENT TO TABLE D-1 Assumptions Relating to Source of Funds Statement c. A retur op average common stock equity of 14 percent. b. t c. A preferred stock dividend rate and a long-term debt rate for the 1978 through "r <s* 1988 period of 9 percent. A short-term debt rate for the period of 7 percent.

\\

These interest rates are based on our best estimates at this time. d. Future common share issues by NEP's parent, New England Electric System, are expected to be sold at approximately book value. 4 e. A projected common stock olvidend payout ratio of 70 percent for 1978-1986 and 100 percent in 1987 and 1988. f. A target capital structure within ranges of 49 percent to 55 percent long-term debt; 10 percent to 15 percent preferred stock and 35 peicent to 40 percent common equity. g. The resultant SEC and indenture earnings coverage ratios over the period of con-struction are shown below. h. See Need for Pcwer sectio 1 of licensing application for kilowatt hour sales growth information. Estimated NEP SEC and Indenture Test Interest Coverage Ratios at 12/;l 1978 1979 1930 1981 1982 1983 1984 1985 1986 1987 1988 SEC Coverage

3., 3.5 3.7 3.7 3.6 3.8 3.6 3.5 3.1

3. 3 3.0 G&R Indenture 3.5 3.3

3. 2 3.1

2. 6 2.5 2.1 2.1 2.1 2.9 2.7 Coverage r

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0.2 Bangor Hydro-Electric Company Bangor Hydro-Electric Company supplies electricity in parts of East Central Maine. Operating revenues increased from $31.3 million in 1976 to $38.3 million in 1977, while net income increased from $1.5 million to $1.8 million for the same period. Invested capital at December 31, 1977 amounted to $52.3 million and consisted of 48.4 percent long-term debt, 12.8 percent preferred stock, and 38.8 percent common equity. The return on common equity for 1977 was 12.9 percent compared with 7.3 percent for 1976. Pretax coverages of long-term interest and total interest charges for 1977 were 3.2 times and 2.8 times, respectively, versus coverages of 2.1 times and 1.4 times for 1976. Bangor Hydro-Electric Company's first mortgage bonds are rated "A" by Moody's and "A" by Standard and Poor's. Bangor Hydro-Electric Company plans to finance its 4.350 percent share in the New England Power Company facility by the use of internally generated cash and by bank loans which will be refunded with debt and equity securities. Avat'able sources of funds for 1977 totaled $7.2 million and were derived from $4.1 million of internally generated cash and $3.1 million of external financing. Internally generated cash in 1977 represented 57 perce..t of capital expenditures. At our request, Bangor Hydro-Electric Company supplied a projected sources of funds statement (see Table D-2) for the 1978-1988 period, with underlying assumptions, demonstrating how the requisite funds mijht be raised. Bangor Hydro-Electric Company's internally generated cash over this period is projected to be 37.7 percent of total capital expenditures and 52 percent of its expected outlays for the New England Power Company facility. We have reviewed Bangor Hydro-Electric Company's projections and find them within the zone of reasonableness. z, m. n < \\ n (9 (/ s) # 's 1 x 0-6

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ATTACHMENT 10 TABLE 0-2 Assumptions Relating to the Source of Funds Statement The attached schedule shows Sources of Funds for System-Wide Construction Expenditures for Bangor Hydro-Electric Company ("BH") during the period of construction of NEP 1 and 2. The table i, based on the following assumptions: U (1) Return on average common stock equity - 13.25 percent for years 1981 - 1983. For years 1978-1980, actual revenues without rate relief are used without regard to the return. (2) Preferred stock dividend rate - 9 percent (3) Long-term debt interest rates - 9 percent (4) Short-term debt interest rates - 8.5 percent (5) Market-to-book ratio for projected common stock of ferings - 1:1 (6) :ommon stock dividend payout ratio - The goal of BH is to achieve and maintain a payout ratio of 70 percent - 80 percent. BH has assumed increases in common stock dividends of $.04 per year, and the payout ratio is within BH's goal for the period of construction except for 1978 and 1979. (7) Target capital structure - 50 percent long-term debt, 10 percent preferred stock, 40 percent common stock equity. (8) Net earnings interest coverage will vary as follows: 1978 - 3.0 1983 - 2.9 1988 - 3.5 1979 - 2.1 1964 - 2.6 1980 - 3.6 1985 - 2.4 1981 - 3.4 1986 - 2.3 1982 - 3.2 1987 - 3.0 Indenture interest coverages, using the definition of " net earnings" set forth therein, will not go below 3 times at any time during the construction period. (9) The annual growth rate in kilowatt hour sales - 5.23 percent for total energy sales and 4.8 percent for peak load. (M7') kb 0-8

D.3 Can'l Electric Company Canal Electric Company is a wholly-owned subsidiary of New England Gas and Electric Associa-tion and supplies electricity to parts of Massachusetts. Operating revenues increased from $108.3 million in 1976 to 128.6 million in 1977, while net income increased from $4.5 million to $6.1 million for the same period. Invested capital at December 31, 1977 amounted to $104.5 million and consisted of 50 percent long-term debt, and 50 percent common equity. The return on common equity for 1977 was 11.3 percent compared with 12.8 percent for 1976. Pretax coverages of long-term interest and total interest charges for 1977 were 3.8 times and 3.8 times, respectively, versus coverages for 1977 were 3.8 times and 3.8 times, ree, actively, versus coverages of 6.5 times and 2.5 times for 1976. Canal Electric Company's bonds are rated "A" by Moody's and "Aa" by Standard and Poor's. Canal Electric Company plans to finance its 4.350 percent share in the New England Power Company facility by the use of internally generated cash and by bank loans which will be refunded with debt and equity securities. Available sources of funds for 1977 totaled $6.4 million and were derived totally from internally generated cash. Internally generated casn in 1977 represented 100 percent of capital expenditures. At our request, Canal Electric Company supplied a projected sources of funds statement (see Table D-3) for the 1978-1988 period, with underlying assumptions, demonstrating how the requisite funds might be raised. Canal Electric Company's internally generated cash over this [ period is projected to be 100 percent of total capital expenditures and 105 percent of its k f expected outlays for the New England Power Company facility. We have reviewed Canal Electric Company's projections and find tnem within the zone of reasonableness. Go - .,y d / p ' t I D-9

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ATTACHMENT TO TABLE D-3 CANAL ELECTRIC COMPANY Sources of Funds Assumptions (a) Return on Common Equity - 14 percent (b) Preferred Stock Dividend Rate - Not Applicable (c) Long-Term Debt Interest Rate - 9 percent Short-Term Debt Interest Rate - 8 percent (d) Common Stock Sold at Book Value (e) Common Stock Dividend Payout Ratio - 80 percent (f) 50/50 Long-Term Debt, Common Stock (g) Interest Coverages - Indenture Basis Sec Basis 1978 3.75 3.25 1979 3.76 3.24 1980 3.80 3.44 1981 3.82 3.45 1982 3.83 3.45 1983 3.86 3.45 1984 3.91 3.50 1985 5.95 3.51 1986 4.02 3.70 1987 3.11 2.92 1988 3.13 3.00 (h) Annual Growth Rate in Kilowatt hour Sales - 1 percent Annual Increase - I percent D-ll O- %* t; ( 7).y g is a c,

D.4 Fitchburg Gas and Electric Light Company Fitchburg Gas and Electric Light Company (Fitchburg) provides electric and gas service to several communities in North Central Massachusetts f %:hburg's operating revenues increased from $22.3 million in 1976 to $25.9 million in 1977, while net income increased from $1.2 million to $1.3 million for the same period. Invested capital at December 31, 1977 totaled $32.0 million and consisted of 53.6 percent long-term debt, 13.2 percent preferred stock, and 33.2 percent common equity. The return on common equity in 1977 was 9.4 percent compared with 8.9 percent in 1976. Pretax coverages of long-term interest and total interest charges in 1977 were 2.6 times and 2.4 times, respectively, versus coverages of 2.9 times and 2.5 times in 1976. Fitchburg's long-term notes are rated "Bea" by Moody's and "BBB" by Standard and Poor's, which is the lowest investment grade security. Fitchburg plans to finance t w 1.130 percent ownership share of the New England Power Company fecility by the use of internally generated cash and short-term borrowings which will subsequently be replaced with equity or debt securities. Available sources of funds in 1977 totaled $4.8 million and were derived from $1.7 million of internally generated cash and $3.1 million f rom preferred stock, notes payable, and other sources. Internally generated cash in 1977 represented 38.7 percent of total construction expenditures. At our request, Fitchburg supplied a projected sources of funds statement (see Table D-4) for the 1978-1988 period, with underlying assumptions, demonstrating how the requisite funds might be raised. Internally generated cash over this period is projected to be 32.8 percent of total construction expenditures and 8 times the expected outlays for the New England Power Company facility. We have reviewed Fitchburg Gas and Electric Light Company's projections and find them within the zone of reasonableness. $ $30 0-12

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ATTACH 1ENT TO TABLE D-4 FITCHBURG GAS AND ELECTRIC LIGHT COMPANY Summary of Assumptions used to Develop the " Source of Funds for System-ifide Construction Expenditures During Period of Construction of Subject Nuclear Fower Plant" (a) The Company will be allowed to earn 13 percent on common stock equity. (b) New preferred stock will have an interest cost of 9 percent. (c) New long-term debt will have an interest rate of 91/2 percent and short-term debt will have an.:terest rate of 8 percent. (d) Common stock will be priced to result in a 9 percent dividend yield. (e) Common stock dividend payout ratio is 65 percent. (f) The targeted capital structure would be as follows: Long-term debt 55 percent Preferred stock 10 Common stock equity 35 100 percent (g) Based upon the above assumptions, the Ratio of Earnings to Fixed Charges would exceed 2.00 and the Year End Earnings Available for Interest would exceed or equal 200 percent of the Annual Interest on Existing Year End Debt in each of the years 1978 and beyond as shown. (h) The annual compounded growth rate in kilowatt hour sales is estimated to be 3.5 percent for the period. For the same period, the price to the customer per kilowatt hour is expected to grow at an annual compounded rate of 6.5 pei<s s ry s) i tis)f?

c. * ' ' - < > t :

D-14

U.5 Montaup Electric Company All debt and equity securities of the Montaup Electric Company (Montaup) are owned by Brockton Edison Compan, and Fall River Electric Light Company, which in turn are wholly-owned subsidiaries of Eastern Utilities Associates. Montaup supplies electricity to the Eastern Utilities Asiociates Cony:nies which jointly service several towns and rural areas of Rhode Island and Massachusetts. Its operating revenues rose from $120.1 million in 1976 to $131.4 million in 1977. Net income was $5.9 million in both 1976 and 1977. Invested capital at Decen.ber Ol, 1977 amounted to $130.1 million and consisted of 50.1 percent long-term debt, 1.1 percent preferred stock, anJ 48.5 percent common equity. The return on common equity in 1977 was 9.8 percent compared with 11.6 percent in 1976. Pretax coverages of long-term interest and total interest charges in 1977 were 2.2 times and 1.8 times, respectively, versus coverages of 2.6 times and 2.1 t.nes in 1976. As noted above, Montaup's securities are privately held and, therefore, are not rated. Montaup plans to finance its 2.15 percent share of the New England Power Com;.any facility by short-term bank borrowing witt subsequent refinancing through the sale of debentures and/or common stock to its above-mentioned owner companies, who would finance their acquisition of Montaup's securities through the sala of common stock to the parent company, Eastern Utilities Associates. Available sources of funds in 1977 totaled $22.6 million and were derived from $7.5 million of internally generated cash, a $7.8 million increase in notes payable, and a $7.3 million increase in common stock. Internally generated cash in 1977 represented 33.2 percent of total construction expenditures. At our request, Montaup supplied a projected source of funds statement (see Table D-5) for the 1978-1988 period, with underlying assumptions, demonstrating how the requisite funds might be raised. Montaup's internally generated cash over this period is projected to be 5 pe u nt of total construction expenditures and 6 percent of its expected outlays for the New England Power Company facility. We have reviewed .tontaup's Electric Company's projectit's and find them within the zone of reasonableness. hU D-15

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ATTACHMENT TO FABLE D-5 MONTAUP ELECTRIC COMPANY FINANCIAL INFORMATION NEP 1 AND 2 Assumptions Regarding Sources of Funds Schedule: (a) Rate of return on average commmon stock equity: 13.0 percent - 14.0 percent. Most recently allowed rate of return on common equity was 13.0 percent. Company assumes that this return will be achieved during forecast period by means of rate relief. (b) Preferred stock dividend rate: not app?fcable. Company has presently outstanding one issue of preferred stock which is a coamon stock equivalent. No future issues of preferred stock are projected. (c) Long-tcrm and short-term interest rates: 8 - 8. 5 percent. Composite interest rates of 8 - 8.5 percent were developed by using the Company's current embedded cost of long-term debt and current interest rate on short-term bank borrowings. (d) Market / Book ratio with respect to projected common stock of ferings: all of Montaup's future common stock issues will be sold to its owner company, Brockton Edison Company, at their par value of $100 per share. (e) Common stock dividend payout ratio: slightly in excess of 100 percent. This payment ratio has been determined by Company's management as necessary to support Brockton Edison Company's investment in Montaup. (f) Target Capital Structure: 60 percent Common Equity and 40 percent Long-Term Debt. (g) Resultant SEC and indenture interest coverages over the period of construction: all of Montaup's future permanent securities will be issued to its owner Company, Brockton Edison Company. There are no SEC or indenture coverage requirements under these issues. (h) Annual growth rate in kilowatt hour sales and price per kilowatt hour Million Percent Price 1977 Kilowatt hour Growth Mills / Kilowatt hour Montaup Sales to Affiliated Cos. 3,137 +1.9 Montaup Sales to Non-Affiliated Cos. 398 -8.1 Total 3,535 +0.7 17.3 1976 Montaup Sales to Affiliated Cos. 3,078 +1.4 Montaup Sales to Non-Affiliated Cos. 433 Total 3.511 +6.9 15.1 1975 Montaup Sales to Affiliated Cos 3,037 -1.0 Montaup Sales to Non-Affiliated Cos. 247 Total 3.284 16.5 NOTE; Montaup began wholesale billings on May 19, 1975, prior to which comparisons would be invalid. gy e,' ~ 1 e)n~9 titI / te s 5 D-19

D.6 The Narragansett Electric Company The Narragansett Electric Company supplies electricity to parts of Rhode Island. Operating revenues increased from $148.8 million in 1976 to $167.2 million 1977, while net income increased from $2.9 million to $4.3 million for the same period. Invested capital at December 31, 1977 amounted to $191.1 million and consisted of 53.5 percent long-term debt, 13.9 percent preferred stock, and 32.6 percent common equity. The return on common equity for 1977 was 4.42 percent compared with 2.84 percent for 1976. Pretax coverages of long-term interest and total interest charges for 1977 were 2.2 times and 2.2 times, respectively, versus coverages of 1.7 times and 1.7 times for 1976. Harragensett Electric Company's first mortgage bonds are rated "A" by Moody's and "A" by Standard and Poor's. Narragansett Electric Company plans to finance its 0.260 percent share in the New England Power Company facility by the use of internally generated cash and by bank loans which will be refur.ded with debt and equity securities. Available sources of funds for 1977 totaled $10.7 million and wete derived totally from internally generated cash. Internally genera'ed cash in 1977 represented 100 percent of capital expenditures. At our request, Narragansett Electric Company supplied a projected source of funds statement (see Table D-6) for the 1978-1988 period, with underlying assumptions, demonstrating how the requisite funds might be raised. The Narragansett Electric Company's internally generated cash over this period is projected to be 58.3 percent of total capital expenditures and 30 times its expected outlays for the New England Power Company facility. We have reviewed Narragansett Electric Company's projections and find them within the zone of reasonableness. htT[ O 0-20

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ATTACHMENT TO FABLE D-6 Assumptions Relating to Source of Funds Statement A minimum return on common stock equity of 12 percent. a. b& c. A preferred stock dividend rate and a long-term debt rate for the period of 9 percent. A short-term debt rate for the period of 7 percent. These interest rates are based on our best estimates at this time. Future comon share issues by Narragansett's parent, New England Electric System, d. are expected to be sold at approximately book value, A projected common stock dividend payout ratio of 90 percent. e. f. A target capital structure within the ranges of 51 percent to 55 percent long-term debt; 12 percent to 15 percent preferred stock and 32 percent to 35 percent common equity.

• ihe resultant SEC and indenture earnings coverage ratios over the period of con-g.

struction are shown below. h. See Need for Power section of licensing application for kilowatt hour sales growth information. Estimated Narrangansett Electric SEC and Indenture Test Interest Coverage Ratios at 12/31 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 SEC Coverage 3.2 3.3

3. 4

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2. 7 2.8 2.7 G&R Indenture Coverage 3.1 3.2 3.4 3.7 3.3 2.9 3.1 2.9 2.6 2.8 2.6 3370GO D-22

D.7 Massachusetts Municipal Wholesale Electric Company The Mas.achusetts Municipal Wholesale Electric Company (Corporation) is a public corporation and political subdivisian of the Commonwealth of Massachusetts. The Corporation was establishsd.s a coordinating and planning agency for the development of municipal memoers' bulk power supply requirements. As of December 31, 1977, 29 Massachusetts municipalities currently have the approval of the local, political subdivisions authorizing membership in the Corporation. The Corporation plans to finance its 6.080 percent ownership share through the issuance of power supply system revenue bonds secured by Power Sales Agreements with the 25 Massachusetts municipal electric systems shown in Table D-7. The Corporation sold its initial bond issue of $75 million in September 1976. This amount was part of a $335 million authorization approved by the Massachusetts Department of Public Utilities to finance the construction of units in the Corporation's Nuclear Mix 1, consisting of four nuclear stations. Revenue bonds are secured 100 percent with "take or pay," life of unit Power Sales Agreements. Under the terms of these agreements, the Corporation charges rates necessary to cover all costs, including the amcrtization of debt. We have reviewed the Massactusetts Municipal Wholesale Electric Ccmpany's financial qualifications and believe tiat there is reasonable assurance that it can raise the funds necessary to cover its share of the costs to design and construct the New England Power Company facility. M g r.,. ~, ; W-s-a

1. b D-23

TABLE D-7 LIST OF MASSACHUSETTS MUNICIPAL ELECTRIC SYSTEMS WITH POWER SALES AGREEMENTS Town of Ashburnham Municipal Light Plant (Ashburnham) Town of Boylston Municipal Light Plant (Boylston) Town of Danvers Electric Department (Danvers) Town of Georgetown Municipai Light Department (Georgetown) Town of Groton Electric Light Department (Groton) Town of Hingham Municipal Light Plant (Hingham) Town of Holden Municipal Light Department (Holden) City of Holyoke Gas and Electric Department (Holyoke) Town of Hudson Light and Power Department (Hudson) Town of Hull Municipal Lighting Plant (Hull) Town of Ipswich Municipal Light Department (Ipswich) Town of Littleton Electric Light and Water Department (Littleton) Town of Mansfield Municipal Light Department (Mansfield) Town of Marblehead Municipal Light Department (Marblehead) Town of Middleborough Gas and Electri-Department (Middleborough) Town of Middleton Municipal Light Department (Middleton) Town of North Attleborough Electric Department (North Attleborough) Town of Paxton Municipal Light Plant (Paxton) City of Peabody Municipal Light Plant (Peabody) Town of Reading Municipal Light Department (Reading) Town of Shrewsbury Electric Light Department (Shrewsbury) Town of Templeton Municipal Lighting Plant (Templeton) Town of Wakefield Municipal Light Department (Wakefield) Town of West Boylston Municipal Lighting Plant (West Boylston) City of Westfield Gas and Electric Light Department (Westfield) 3370t2 D-2h

D.8 Taunton Municipal Lighting Plant Commission Taunton Municipal Lighting Plant Commission (Taunton) is a municipally-owned electric system supplying electricity to the Town of Taunton, Massachusetts. Taunton's operating revenues for the fiscal year ending December 31, 1977 were $21.2 million and its net utility plant was $34.6 million. Taunton plans to finance its 0.500 percent ownership share by utilizing internally ger,erated funds. The Town of Taunton had previously authorized the sale of $24.0 million of electric bonds to finance the construction of various electric facilities. Moody's Investors Service assigned an "A" rating to the bonds. Taunton's rates are established and changed under Massachusetts laws and require the municipality to charge rates that are not less than the cost of operations. The rates are not subject to the approval of any regulatory authority. Based on the above-noted information, there is a reasonable assurance that Taunton Municipal Lighting Plant Commission can raise the funds necessary to cover its share of the cost of design and construct the New England Power Company facility. gyans-.rys, rit)1 Lot)t1.. D-25

0.9 Vermont Electric Cooperative, Incorporated Vermont Electric Cooperative, Incorporated (Vermont Electric) is a member-owned rural electric system serving Chittenden, Franklin, Lamoill and Orle counties in Vermont, and Bernandston, Colvain, and Leyden counties in Massachusetts. Ve rmont Electric's cperating revenues for 1977 were approximately $4.4 million and its net utility plant was $12.6 million. Vermont Electric plans to finance its 0.200 percent ownership share f rom the proceeds of loans from the Rural Electrification Administration. The Rural Electrification Administ ation approved a loan in the amount of $15.8 million in April 1977 to finance Vermont Electric's share of New England Power Company participation, as well as other power supply projects involving the cooperative. Based on the favorable action taken by the Rural Electrification Administration in making funds available for Vermont Electric Cooperative, Incorporated's share of participation, there is reasonable assurance that it can raise the funds necessary to cover its share of the costs to design and construct the New England Power Company facility. S 6 (3 <,. ~ r > < - 4 a t.} J tit.Y2 D-26

D.10 Maine Public Service Company Maine Public Service Company supp'ies electricity in the northern part of Maine. Operating revenues increased from $17.2 million in 1976 to $18.0 million in 1977, while net income ircreased from $1.8 million to $2.5 million for the same period. Invested capital at December 31, 1977 amounted to $37.4 million and consisted of 51 percent long-term debt, 5 percent preferred stock, and 43 percent common equity. The return on common equity for 1977 was 16.0 percent compared with 11.6 percent for 1976. Pretax coverages of long-term interest and total interest charges for 1977 were 4.14 times and 4.13 times, respectively, versus coverages of 3.26 times and 3.25 times for 1976. Maine Public Service Company's first mortgage bonds are rated "A" by Standard and Poor's. Maine Public Service Company plans to finance its 0.435 percent share in the New England Power Company facility by the use of internally generated cash and by bank loans which will be refunded with debt and equity securities. Available sources of funds for 1977 totaled $1.9 million and were derived totally from $1.9 million of internally generated cash. Internally generated cash in 1977 represented 100 percent of capital expenditures. At our request, Maine Public Service Company supplied a projected sources of funds statement (see Table D-8) for the 1978-1988 period, with underlying assumptions, demonstrating how the requisite funds might be raised. Central Maine Power Company's internally generated cash over this period is projected to be 44.8 percent of total capital expenditures and 74 percent of its expected outlays for the New c Englano Power Company f acility. We have reviewed Maine Public Service Company's projections and find them within the zone of reasonableness. (y en -. r } a ~ t-' h AN[ # 8

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ATTACHMENT TO TABLE D-8 MAINE PUBLIC SERVICE COMPANY Sources of Funds for Construction Assumptions 1988 (a) Rate of Retura on Equity Percent 13.25 The Company is presently limited (b) Preferred Stock Dividend Rate @ 9\\ Percent ) (c) Long-Term Debt Interest Rate @ 9k Percent ) Short-Term Debt Int (rest Rate @ 8 Percent ) (d) Market / Book Ratios - Not Applicable No Common Stock Issues (e) Common Stock Dividend Payment Ratio Percent 31.8 (f) Target Capital Structure Percent .tl Debt 62.7 Preferre. Stock 1.5 o 4' a* Common Equ'ty 35.8 j' (g) SEC Interest Coverages Before Taxes 2.95 (h) Annual Growth Rate Kilowatt Hour Sales = 6 Percent Price Per Kilowatt Hour in Dollars 0.058 O" sis)'t wo ;. !*/tt ~/ D-29

U.S. NUCLE AR REGULATORY COMMISSION 17 77) BIBLIOGRAPHIC DATA SHEET NUREG-0424, Suppl.No.1 4 TITLE AN D SUBTITLE (Add Volume No, of approproate) 2 (Leave bian h i Supplement No. I to the Safety Evaluation Report related a HecieiENT s ACCESSION NO to construction of New England Power Project, Units 1 & 2 7 AU T HOH(SI 5 D ATE HE POH T COMPLE TE D l vt As voNTH JULY 1979 9 PE HF OHMING OHGANIZATION N AME AND M AILING ADDHESS (loclude 2-0 Code / D ATE HEPOHT ISSUE D l vt As voNTH JULY 1979 U. S. Nuclear Regulatory Commission Washington, D.C. 20555 6 ' " ' " " ' " * > d ILe are tusn n i 12 SPONSOHING ORGANIZ ATION N AYE AND M AILING ADDHE SS t/nclude 2 0 Cadel 11 CONTH ACT NO 13 TYPE OF RE PORT PE RIOD C OV E RE D //nclus ve dates / Docket Nos. STN 50-568 and STN 50-569 June 2, 1978 - July 20, 1979

15. SUPPLE MEN T A RY NOTE S 14 tt, _ve i <an n )

16. ABSTR ACT (200 wneds or less) The New England Power Company, et al. tendered its application for its NEP 1 and 2 Nuclear Power Generating Station on August 2,1976.

The site for these proposed plants is located approximately 81/2 miles east of the center of Westerly, Rhode Island. Providence, Rhode Island is approximately 35 miles north of the site. This application references Westinghouse Electric Corporation's RESAR-3 Nuclear Steam Supply System. The application was submitted in conformance with the Nuclear Regulatory Commission staff's " Policy and Procedures for the Replication of Custom Plant Designs," WASH-1340, dated July 1974. This is one of the approaches to standardization, as discussed in the Commission's announcement dated August 15, i974. This approach permits a utility to submit an application for authorization to construct a nuclear power plant utilizing a plant design that was previously submitted as part of a construction permit application. The NEP Nuclear Generating Station, Unit Nos. 1 & 2 replicates Public Service Company of New Hampshire's Seabrook Nuclear Power Station, Unit Nos. 1 and 2. (Docket Nos. 50-443 and 50-444), which is designated as the " base plant." Construction permits for the Seabrook Station were issued on July 17, 1976. The Safety Evaluation for New England Power Project was issued on June 1,1978. This report (Supplement No.1) brings the original report up to date. 17 KEY WOHDS AND DOCUMENT AN ALYSIS 17a DE SC H t P T O RS G Cf.& ] a) Q 4 a L 17b IDE N TI F IE HS OPE N-E N DE D TE R MS

18. AV AILABILITY STATE ME N T

19. SE CURITY C LASS (Th,s recorrt 21 NO OF PnGf i 20 SECUHI TY CL ASS ITh,s pa.rl 22 FHlCE S

N RC F ORM 33S (7 77)}}