ML19262A557
| ML19262A557 | |
| Person / Time | |
|---|---|
| Site: | 05000471 |
| Issue date: | 11/03/1975 |
| From: | Office of Nuclear Reactor Regulation |
| To: | |
| References | |
| NUREG-75-054, NUREG-75-054-S01, NUREG-75-54, NUREG-75-54-S1, NUDOCS 7911140477 | |
| Download: ML19262A557 (75) | |
Text
Safety Evaluation Itepori neo i.,o,yto*m"mito".
related to construction of Office Nc ar Pilgrim Nuclear Generating o,,,,, y,,,,.,,
Station, Unit No. 2 Boston EcEson Company, et al Supplement No.1 2201 274 e
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NUREG-75/054 SUPP. 1 NOVEMBER 3,1975 SUPPLEMENT N0. 1 TO THE SAFETY EVALUATION REPORT BY THE OFFICE OF NUCLEAR REACTOR REGULATION U.S. NUCLEAR REGULATORY COMMISSION IN THE MATTER OF BOSTON EDIS0N COMPANY, ET AL PILGRIM NUCLEAR GENERATING STATION, UNIT 2 DOCKET N0. 50-471 2201 275 Available from National Technical Information Service Springfield, Virginia 22161 Price:
Printed Copy $4,25; Microfiche $2.25
TABLE OF CONTENTS PAGE 1.0 I N T RO DU CT I ON..........................
1 -1 2.0 SITE CHARACTERISTICS......................
2-1 2.1 Geography and Demography..................
2-1 2.1.3 Population and Population Distribution.......
' -l 5.0 REACTOR COOL ANT SYSTEM..................... 5-1 5.9 Rmetor Vessel Supports..................
5-1 6.0 ENGINEERED SAFETY FEATURES................... 6-1 6.2 Containment Sys tems.................... 6-1 6.2.2 Containment Heat Removal, Air Purification and Cl eanup Sys tems..................
6-1 6.3 Emergency Core Cooling Systems............... 6-1 6.3.4 Tes ts and Inspections................ 6-1 11.0 RADI0 ACTIVE WASTE MANAGEMENT.................. 11-1 11.1 Summary Description.................... 11 -1 20.0 FINANCI AL QUALIFICATIONS.................... 20-1
21.0 CONCLUSION
S........................... 21-1 APPENDICES PAGE APPENDIX A Continuation of Chronology of Radiological Review of Pilgrim Nuclear Generating Station, Unit No. 2 Al APPENDIX B Analysis of Financial Qualifications.....
B1 APPENDIX C Errata to the Safety Evaluation Report.
C1 2201 276
1.0 INTRODUCTION
AND GENERAL DISCUSSION 1,1 Introduction The Nuclear Regulatory Comission's (Comission) Safety Evaluation Report in the matter of the application by the Boston Edison Company and joint applicants as listed in Table 1.1 of the Safety Evaluation Report (hereinafter referred to as the applicants) to construct and opwate the proposed Pilgrim Nut. lear Generating Station, Unit 2 was issued on June 27, 1975.
In this Safety Evaluation Report the staff identified (1) certain matters requiring additional information from the applicants, (2) certain matters where our review is not yet complete and (3) certain commitments made by the applicants for which additional documentation would be required to permit the staff to confirm that these commitments meet our requirements.
The purpose of this Supplement is to update the Safety Evaluation Report by providing the staff's evaluation of additional information submitted by the applicants since ~the issuance of the Safety Evaluation Report. In addition, a review of the Safety Evaluation Report has revealed areas where corrections or further explanations are in order. Each of the following sections in this Supplement is numbered the same as the section of the Safety Evaluation Report tnat is being updated and is supplementary to and not in lieu of the discussion in the Safety Evaluation Report.
2201 277 1 -1
Two new matters have been identified since issuance of the Safety Evaluation Report. These matters are discussed in the appropriate sections of this Supplement and are summarized as follows:
(1) evalua-tion of radioactive waste systems to meet the dose design objectives of Appendix I to 10 CFR Part 50 (Section 11.0), and (2) design of the reactor pressure vessel support systems (Section 5.9). We are currently reviewing these matters and will report our conclusions in a future supplement to the Safety Evaluation Report.
Upon favorable resolution of the outstanding issues discussed herein and in the Safety Evaluation Report and summarized above, we will be able to conclude that the Pilgrim Nuclear Generating Station, Unit 2 can be constructed and operated as proposed without endangering the health cr.d safety of the public.
Appendix A to the Supplement is a continuation of the chronology of the staff's principal cctions related to the processing of the application.
Our analysis of the applicants' financial qualifications is attached as Appendix B.
Appendix C is a listing of errata to the Safety Evaluation Report.
2201 2 M 1-2
2.0 SITE CHARACTERISTTCS 2.1 Geography and Demography 2.1.3 Population and Population Distribution We concluded in our Safety Evaluation Report that a conservative evaluation of the population center, taking into account recent and potential growth in the Plymouth area, would locate the population center distance much closer than 23 miles from the site and that a reduction of the low population zone from 4.25 to 1.5 miles was indicated.
We have re/iewed the information on population and population distri-bution submitted in Amendment 20 to the Preliminary Safety Analysis Report. The population data have been updated to include 1975 popula-tion estimates.
In addition, the applicants investigated the possibility of altering the designation of the population center and the low population zone. The applicants conclude that the present population center remair.s Brockton, Massachusetts, located about 23 miles north-northwest of the site.
However, because of projected growth, the Town of Marshfield, located 10 miles north of the site, or the continuous communities of Plymouth Center, North Plymouth, and Kingston Center located 3.5 miles west of the site, could exceed 25,000 people during the lifetime of the plant. Based on their conclusion that the population center distance is not likely to be less than 3.5 miles away from the site, the applicants have proposed reducing the low population zone distance from 4.25 miles to 2.5 miles.
2201 279 2-1
In reaching the conclusion that the minimum distance to the population center was 3.5 miles, the applicants have defined a " densely populated area" to be those areas having a population density equal to or greater than 2,000 persons per square mile. Using this definition, they concluded that Census Enumeration District (CED) 1196, with a 1970 population density of about 2,900 people per square mile, and whose nearest bouadary is 3.5 miles from the site, was part of the population center; but that CED 1198, located adjacent to it, with a population dens'ty of 1,050 persons per square mile and whose nearest boundary is located 2.2 miles from the site, was not. The applicants conclude that CED 1198 is not projected to exceed a population density of 2,000 persons per square mile by the year 2020, even including transients weighted for occupancy time, in that assessment.
The applicants' conclusion appears to be based solely upon its definition of 2,000 persons per square mile constituting a " densely populated area".
We believe such a definition has not been justified. We have not adopted any definition based solely upon a absolute numerical value of population density within a particular area. We will continue to perform our reviews on a case-by-case basis by considering the population distribution and potential growth patterns in the vicinity of a site.
On the basis of currently available infonnation, portions of CED 1198 appear to have significant potential for population growth during the plant life.
Portions of this area have been given the zoning designation 'hedium lot residential" by the Town of Plymouth. This is the same designation given to large portions of CED 1196 which both the staff and the applicantsagree is within the population center.
Recent surveys indicate several streets have been laid and housing development is likely to follcw. We therefore conclude as stated in the Safety Evaluation Report, that, based on currer.tly available information, CED 1198 can be conservatively considered to be within the population center.
2201 280 V
2-2
We understand that the applicants will provide additional information on land use and potential population development within CED 1198.
We will review this information and report our conclusions in a future supplement to this report. We may, if additional information warrants, determine that the population center distance should lie somewhere within CED 1198 and that the low population zone could therefore be extended beypnd 1.5 miles.
We conclude, on the basis of our review of the applicants' submittal to date (through Amendment 20), that a definition of a " densely popu'ation area" based solely upon the population density in that area being equal to or exceeding 2,000 persons per square mile has not been adequatcly supported. Our conclusion stated 1.i the Safety Evaluation Report, that the low population zone outer boundary distance of 4.25 miles proposed by the applicants should be reduced to about 1.5 miles, remains unchanged.
2201 281 2-3
5.0 REACTOR COOLANT SYSTEM 5.9 Reactor Vessel Supports, On May 7,1975 we were infonned by a licensee of a pressurized water reactor, Virginia Electric and Power Company, that an asynnietric loading resulting from a postulated pipe rupture at a particular location in the reactor coolant system'hadfnot been taken into account in the original design of the reactor pressure vessel support system for the North Anna Units 1 and 2 (Docket Nos. 50-338 and 50-339). This loading results from the forces induced on the internals within the reactor vessel caused by differential pressure conditions within the vessel immediately following a postulated loss-of-coolant accident.
In addition, the asymmetric loading from the transient differential pressures that would exist around the exterior of the reactor vessel from the same postulated pipe rupture was not included in the original design analysis.
- However, the symmetric loadings from such a postulated pipe rupture were included in the original analysis of the reactor pressure vessel supports.
It is our opinion that these factors related to the design of tite reactor pressure vessel supports are generic in nature an may apply to Pilgrim Nuclear Generating Station, Unit No. 2.
Accordingly, we are taking steps to review this problem on a generic basis to determine the extent of the problem.
We have informed the applicants of the nature of this problem and have requested they verify that the design procedures for the reactor pressure vessel support system will properly include the asymmetric forces described above in the final design of the supports.
Based on our review of this generic problem to date, we have determined that the methodology necessary to model the complete reactor coolant system in sufficient detail to determine analytically the magnitudes and phase relationships of the vessel support system loads from the transient pressure 2201 282 5-1
differentials is available. We will review additional information to be provided by the applicants and will report our conclusions on this issue in a future suPP ement to the Safety Evaluation Report, l
2201 283 5-2
6.0 ENGINEERED SAFETY FEATURES 6.2 Containment Systems 6.2.2 Containment Heat Removal, Air Purification and Cleanup Systems We stated in the Safety Evaluation Report thac we require that the design of the containment spray actuation logic be modified to provide for automatic actuation down to cold reactor coolant system conditions.
The proposed design of the containment spray actuation logic was such that automatic actuation of the system would be blocked when the reactor coolant system pressure is brought below 1700 pounds per square inch.
This design was unacceptable.
In Amendment 20 to the Prelimina y Safety Analysis Report the applicants revised the containment spray actuation logic to provide for automatic actuation down to cold reactor coolant system conditions. We have reviewed the modifications to the proposed design and conclude that it is acceptable. With our acceptance of this modification, we conclude that the containment spray system will be designed in conformance with the requirements of Criteria 38, 39, 40, 41, 42 and 43, of the General Design Criteria and is acceptable.
6.3 Emergency Core Cooling Sy2te9s 6.3.4 Tests and Inspections We stated in the Safety Evaluation Report that we had not completed our review of the applicants' proposals rege-ding design provisions to allow testing of the emergency core cooling system in accordance with the reconmendations of Regulatory Guide 1.79.
6-1
The applicants provided additional information in Amendment 18 on the proposed methods of preoperational testing of the emergency core cooling system. The applicants proposed that a limited short duration test to verify system alignment and pump flow from the recirculation sump will provide sufficient data to determine the ability-of the system to function properly in the recirculation mode.
The applicants have provided infonnation to show how the recirculation sump has been conservatively designed regarding vortex formation and that the location of the emergency core cooling system pumps will provide very large net positive suction head margins.
In addition, the applicants have agreed to amend the ' Preliminary Safety Analysis Report to include the following requirements:
1.
The valve alignment and pump flow from the sump will be verified for the low head emergency core cooling system pumps (the residual heat removal pumps).
2.
The sump will first be filled.
The valve (s) between the sump and the pump will be opened and the pump will be started up in the same sequence that would be used following a postulated loss-of-coolant accident.
The short duration test will be perfonned at design flow rate conditions.
2201 285 6-2
3.
The surface of the water in the sump will be observed during the test to assure that there is no indication of vortex formation in the sump.
If vortex fomation is observed, more complete testing may be required.
4.
The actual residual heat removal low head emergency core cooling system pumps installed in Pilgrim Unit 2 will be tested in the shop to confinn minimum net positive suction hee.d requirements.
We have reviewed the information and the commitment provided by the applicants and conclude that the proposed test will provide the necessary information to detemine the operability of the emergency core cooling system in the recirculation mode and, therefore, is acceptable.
2201 286 6-3
11.0 RADI0 ACTIVE WASTE MANAGEMENT 11.1 Sumary Description Our evaluation of the radioactive waste management systems, as presented in the Safety Evaluation Report was perfomed to determine conformance with the design objectives of the proposed Appendix I presented in our report " Concluding Statement of Position of the Regulatory Staff", Docket No. RM-50-2, dated February 20, 1974. However, we have not completed our review of these systems to estcblish conformance with the dose design objectives of the new Appendix I to 10 CFR Part 50 (effective June 4, 1975).
With regard to Appendix I, on September 4,1975 the Comission announced an. optional method for complying with the guidelines on nuclear power plant effluents, which is applicable to the Pilgrim Unit 2 plant. This option allows for compliance with the "as low as practicable" regulation without making a cost-benefit analysis if the radioactive waste management systems meet the guidelines of the proposed Appendix I used by the staff before the new Appendix I became effective.
In addition, we have recently revised the parameters and mathmatical models used in calculating releases of radioactive materials in effluents. As a result, we have requested the applicants to provide additional information, which we will use to evaluate their systems with the new models, and have requested that they advise us of which option they will use to comply with Appendix 1.
After we complete our review of the radioactive waste management systems to detemine conformance with the design objectives of Appendix I to 10 CFR Part 50, we will report the results in a future supplement to the Safety Evaluation Report.
2201 287 11-1
20.0 Financial Qualifications The Commission's regulations relating to the
- termination of the applicants' financial qualifications appear in Section 50.33(f) and Appendix C to 10 CFR Part 50.
Boston Edison Company, the lead applicant with a 60% ownership share, along with eleven othe'r utilities, has applied for a construction pemit for Pilgrim Station, Unit 2.
About half the remaining 40%
ownership share will be assumed by New England Power Company (11.16%)
and the Connecticut Light and Power Company (8.61%), and the balance will be handled oy the remaining nine utilities.
According to Amendment 3 to the license application, the twelve utilities assuming the responsibility for the construction of Pilgrim Station, Unit 2, will participate as follows:
Percent Estimated Cost Boston Edison Company 60.00%
$778,000,000 Burlington Electric Department 0.33 3,800,000 Central Maine Power Co.
2.85 34,030,000 Central Vermont Public Service Corp.
1.78 22,150,000 The Connecticut Light and Power Co.
8.61 107,070,000 Fitchburg Gas and Electric Light Co.
0.19 2,420,000 Montaup Electric Co.
2.15 26,010,000 New Bedford Gas and Edison Light Co.
1.53 18,780,000 New England Power Co.
11.16 135,070,000 Public Service Company of New Hampshire 3.47 43,720,000 The United Illuminating Co.
3.30 39,920,000 Western Massachusetts Electric Co.
4.63 57,570,000 100.00%
$1,268,540,000 2201 288
,m
- s...c i o s.
20-1
The most recent estimate of the total cost of Pilgrim 2, which includes escalation and allowance for funds used during construction, was provided in Amendment 3 to the license application, dated April 29, 1975, and can be summarized as follows:
Total Nuclear Plant Costs
$1,207,000,000 Transmission and Distribution 22,000,000 Nuclear Fuel - Initial Load 40,000,000
$1,269,000,000 The estimated cost of the nuclear plant has been reviewed by comparing it to the cost projected by the Energy Research and Development Administration's CONCEPT costing model. The model currently uses construction inflation or escalation rates of 8% per year for site labor, materials, and purchased equipment. The CONCEPT model estimated the cost of the nuclear plant to be $763,000,000, compared with the applicant's estimate of $1,207,000,000, or a difference of about 37%.
It should be noted that Oak Ridge National Laboratory, which does the computer work for the NRC staff, states in their letter to the staff dated June 30, 1975 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 applicant's estimate."
In addition, the applicants have pointed out areas which, if considered in the CONCEPT code, would add significantly to the estimated cost using tha code. However, for the purpose of our review of the applicants' financial qualifications, we conclude that the use of the applicants' more conservative estimate is appropriate.
g; g
20-2
We have reviewed the financial infonnation presented in the application, and amendments thereto, and conclude that there is reasonable assurance
at these twelve applicants can raise the necessary funds to design and construct Pilgrim -Station, Unit 2.
Accordingly, we find them financially qualified to carry out the activities for which this permit is sought. Our conclusion is based upon the following discussion and the analyses contained in Appendix B to this supplement and the basic assumptions of rational regulatory policies and relatively stable capital market conditions. These assumptions are necessary because of the lengthy future period involved and the expected heavy dependence sn external financing.
2201 290 20-3
21.0 CONCLUSION
S We stated in the Safety Evaluation Report that our conclusions were contingent upon favorable resolution of the outstanding matters identified in that report. These items, and the present status of our review regarding these items is summarized below:
(1) We have not completed our review of the applicants' interpretation of the tectonics of the site region and the proposed seismic design basis (Section 2.5).
(2) We have required and the applicants have agreed to provide additional data on the foundation materials for Category I structures (Section
- 2. 5.1 ).
(3) Our review of the impact of turbine missiles u being conducted on a generic basis. Upon completion of our review, we will report any changes necessary on this facility in a future supplement (Section3.5).
(4) The applicants have provided an analysis of emergency core cooling system perfomance in accordance with Section 50.46 and Appendix K of 10 CFR Part 50. We will report the status of our review of this information in a future supplement (Section 6.3.3).
(5) The applicants' proposals regarding design provisions to allow testing of emergency core cooling systems in accordance with the recomendations of Regulatory Guide 1.79 has been favorably resolved (Section 6.3.4).
(6) We have not completed our review of the applicants' proposals regarding y+:
confo'rmance with the recomendations of Regulatory Guide 1.75 (Section 8.4).
2201 291 21-1
(7) We have not completed our review of the applicants' proposals regarding solid radwaste storage capacity (Section 11.4).
(8) We have satisfactorily completed our review of the applicants' financial qualifications (Section 20.0).
(9) We require that the applicants either provide missile impact velocities based on a tornado having a maximum wind speed of 360 miles per hour or use the impact velocities given in Section 3.5 of the Safety Evaluation Report (Section '.5).
a (10) The design modification to provide for automatic actuation of the containment spray system down to cold reactor coolant system conditions has been satisfactorily completed (Section 6.2.2).
(11) We reqv.re that the loss of load trips and bypass be designed to satisty the re'uirements of IEEE Standard 279-1971 (Section 7.2).
(12) We require that the enclosure complex be served by a filtration system designed to engineered safety features criteria (Section 15.6).
(13)
Our review of enticipated transients without scram is being conducted on e generic basis and will be reported in a future supplement (S;ction 7.2).
2201 292 21-2
In addition to the items discussed above, and as a result of our review of new information and new developments subsequent to the issuance of the Safety Evaluation Report, we have made conclusions with regard to the following items which are discussed in this supplement:
(1) We have requested the applicants to provide additional information to demonstrate that the radioactive waste systems will meet the dose design objectives of Appendix I to 10 CFR Part 50. Our review of this information will be reported in a future supplement (Section 11.0).
(2) Our review of the reactor pressure vessel support systems will be reported in a future supplement (Section 5.9).
Subject to favorable resolution of the outstanding items stated above, we reaffirm our conclusions as stated in the Safety Evaluation Report.
2201 293 21-3
APPENDIX A CONTINUATION Or CHRON0 LOGY OF RADIOLOGICAL REVIEW 0F PILGRIM NUCLEAR GENERATING STATION, UNIT N0. 2
. June 27,1975 Issuance of Safety Evaluation Report.
July 16,1975 Meeting with applicants to discuss geological and seismological characteristics of the New England region as they relate to the determination of the maximum ground acceleration for the seismic design of Pilgrim 2.
July 28,1975 Letter to applicants concerning testing low pressure safety injection systems.
August 4,1975 Letter to applicants requesting additional financial information.
August 15, 1975 Letter to applicants transmitting staff correspondence with USGS concerning geology and seismology of region in which Pilgrim 2 is located.
August 21, 1975 Submittal of Amendment No. 20, consisting of information regarding Regulatory Guides 1.75 and 1.79, ECCS, and site infonnation.
August 21, 1975 Submi.ttal of Amendment No. 4 to License Application, consisting of revised correspondence dittribution list.
August 29, 1975 Letter from applicants requesting a meeting with USGS concerning seismology / geology as soon as possible.
August 29, 1975 Letter to applicants transmitting copies of additional correspondence between staff and USGS.
September 23, 1975 Meeting with applicants to review onsite storage capability for solid radwaste and the methods for transporting secondary resins to onsite storage; to discuss applicants' proposed method of meeting Regulatory Guide 1.79 and our requirements for preoperational testing of the ECCS.
2201 294
A-1 September 29, 1975 Letter to applicants in response to letter of August 29, 1975.
October 2,1975 Letter to applicants requesting additional informa-tion concerning ECCS.
October 15, 1975 Meeting with applicants to discuss the boundary of the low population zone.
2201 295
APPENDIX B Analysis of Financial Qualifications The following information provides the details of the financial analysis for the applicants for the Pilgrim Nuclear Generating Station, Unit No. 2.
B.1 Boston Edison Company (BECo)
Boston Edison supplies electricity at retail and wholesale in eastern Massachusetts. Operating revenues increased from $318.7 million in 1973 to $460.7 million in 1974. Most of this increase was attributable to the fuel and purchased power adjustment. Retail rate increases over the last few years have included one on April 19,1973 fv $18 million, another on May 6, 1974 for $13.5 million, and one other on August 9, 1974 for $27.4 million.
In addition, on November 12, 1974, BE filed a request with the Massachusetts Department of Public Utilities to raise retail rates to produce additional revenues of approximately $70 million.
Invested capital at December 3,1974 amounted to almost $1.1 billion and consisted of 64.5% long-term debt, 7.6% preferred stock, and 27.9% common equity.
If this capital structure is proformed for the issuance of preference stock in March,1975, it becomes 57.35% long-term debt, 8.16% preferred stock, 4.57% preference stock, and 29.92%
common equity.
The return on conson equity for 1974 was 8.20%, down from 8.78% in 1973.
Results in 1973 b oke a string of 15 consecutive years of increases in earnings per share, declining from $3.55 per share to $2.88 per share.
Thb decline c'ontinued in 1974 as earnings per share fell to $2.60 per 2201 296
B-2 share.
Pretax coverages of long-term interest and total interest charges in 1974 were 2.40 tinies and 1.81 times, respectively, versus 2.70 times and 1.99 times in 1973. An improving trend, however, has been evident in 1975, bringing earnings per share for the twelve months ended June 30, 1975 up to $2.90, or about in line with 1973 results.
Boston Edison's first mortgage bonds are rated Baa by Moody's and BBB by Standard and Poor's.
Boston Edison plans to finance its 60% share of Pilgrim 2 by the use of internally generated funds, notes payable, and the issuance of debt and equity securities. Available funds from these sources in 1974 totaled
$138.7 million and were derived from $37.7 million of internally gen-erated funds, $60 million of first mortgage bonds, and a $41 million increase in notes payable.
Internally generated cash in 1974 represented 36.4% of 1974 construction expenditures (including nuclear fuel e". pense).
At our request, Boston Edison supplied a projected sources of funds state-ment for the 1975-82 period, with underlying assumptions, demonstrating how the requisite funds might be raised.
Its internally generated cash over this period is projected to be 55.2% of total construction expend-itures and 118.9% of its expected outlays for the Pilgrim 2 nuclear plant.
We have reviewed Boston Edison's projections, and underlying assumptions, and find them within the zone of reasonableness.
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B-4 BOSTON EDISON COMPANY PIIERIM STATION UNIT NO. 2 ASSUMPTIONS REGARDING SOURCES OF FUNDS SCHEDULE Major assumptions used for determining sources of funds:
1.
Average return on common equity:
- 87. - 117.
2.
New L/T bebt interest rate:
10%
3.
Preferred Stock interest rate:
107. - 11.757.
4.
Common Stock selling price:
$25.00/ share 5.
Payout Ratio:
707. - 957.
6.
Construction expenditures for 1975 - 1982 are taken from the 5 year forecast through 1979 and are based on best current estimates for the years 1980 to 1982.
7.
Data and results are based upon estimates and are subject to change because of capital market, regulatory, and other external forces which cannot be predicted with complete certainty at this time.0\\ x
B-5 B.2 Burlington Electric Department BED) i BED is a municipaiis owned electric system supplying electricity to the City of Burlington, Vermont. Burlington is the largest and most important manufacturing center in the state. BED's operating revenues for the fiscal year ended June 30, 1974 were approximately $8 million and its net utility plant was about $11.7 million. BED plans to finance its.33% ownership share by the sale of municipal general obligation bonds with interest and principal paid out of the oper-ating revenues of the electric department. The City of Burlington has authorized $6 million of Electric Bonds for its.33% share of Pilgrim 2 and.365% share of Millstone 3. In May 1975, $2 million of these bonds were issued to pay a portion of the City's share of the cost of these nuclear power facilities. Moody's Investors Service assigned an Aa rating to the bonds. Such a rating is defined by Moody's as follows: " Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group, they comprise what are generally known as high grade bonds." We have reviewed BED's financial circumstances and believe that there is reasonable assurance that it can raise the funds necessary to cover its share of the costs to design and construct Pilgrim 2. 2201 300 c i a.i
B-6 B.3 Central Maine Power Company (CMP) CMP supplies electricity to parts of Southern and Central ihine. Operating revenues increased from $107.4 million in 1973 to $141.2 million in 1974, although net income decreased from $13.3 million to $11.6 million. Invested capital at December 31, 1974 amounted to $327.1 million and consisted of 51.8% long-term debt,14.2% preferred stock, and 34.0% common equity. The return on comon equity for 1974 was 9.1% compared with 10.9% for 1973. Pretax coverages of long-term interest and total interest charges for 1974, were 2.9 times and 2.4 times, respectively, versus coverages of 3.0 times and 2.9 times for 1973. CMP's first mortgage bonds are rated "A" by Moody's and "BBB" by Standard and Poor's. CMP plans to finance its 2.85% share in the Pilgrim Unit 2 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 1974 totaled $54.1 million and were derived from $13.9 million of internally generated cash and $40.2 million of external financing. Internally generated cash in 1974 represented 44.7% of capital expend-itures. At our request, CMP supplied a projected sources of funds statement for the 197,5-82 period, with underlying assumptions, demonstrating how J! ~ the requisite funds might be raised. CMP's internally generated cash over this period is projected to be 14.6% of total capital expenditures and 440% of its expected outlays for Pilgrim 2. We have reviewed CMP's projections and find them within the zone of reasonableness. 2201 401
Applicent: "CENTP.AL MAINE POWER COMPANY Nuclear Plant: PII4 RIM d2 ~ Sources of Funds for System-Wide' Construction Expendit sres During Period of Construction of Subject Nuclear Power Plant * (Millions of Dollars) [- Construction Years of Subiect Nuclear Power Plant Security Issues and Other Funds ' 1975 1976 1977 1978 1979 1980 1981 1982 Common Stock 8.4 $ 13.6 $ 16.0 $ 20.0 $ 26.0 $ 25.0 $ 40.0 $ 20.0 Preferred Stock 5.0 12.0 10.0 15.0 17.0 23.0 10.0 10.0 Long-Term Det-25.0 28.9 37.6 45.7 55.4 35.0 70.0 40.0 Notes Payable (9.2) (4. 2 ) 10.2 (5.7) 17.8 2.8 ,7 (7.4) Total 29.2 50.3 73.8 75.0 116.2 14 5.8 120.7 62.6 Internal Funds Net Income 13.3 16.5 20.5 25.3 31.8 39.7 48.9 57.3 a2 Less: da Preferred Dividends 2.7 3.2 4.1 5.2 6.6 8.4 9.8 10.6 Common Dividends 9.6 10.9 12.6 14.7 17.7 21.9 27.2 32.7 Retained Earnings 1.0 2.4 3.8 5.4 7.5 9.4 11.9 14.0 Deferred Taxes 2.0 2.3 2.5 4.2 5.9 6.2 6.6 7.3 Investment Tax Credit .6 6 .5 4.7 .8 1.4 .7 2.7 Depreciation and Amort. 12.2 13.5 15.6 18.1 21.4 22.8 23.6 24.5 Less: AFUDC 1.5 4.4 8.8 11.1 13.3 21.9 29.6 34.2 Sinking Funds 1.2 1.3 1.5 1.7 1.9 2.3 2.7 3.0 Total 13.1 13.0 12.1 19.6 20.4 15.6 10.5 11.3 rsy TOTAL FUNDS $ 42.3 $ 63.3 $ 85.9 $ 94.6 $ 136.6 $ 161.4 $ 131.2 $ 73.9 N C3 Construction Expenditures , ' ^ Nuclear Power Plants ** $ 6.C-10.3 22.8 57.7 $ 110.8 $ 133.8 $ 101.2 $ 34.0 Other** 36.3 53.0 63.1 36.9 25.8 E 6_ 30.0 39.9 g CZ) TOTAL CONSTRUCTION I\\3 EXPENDITURES ** $ 42.3 63.3 85.9 94.6 $ 136.6 $ 161.4 $ 131.2 $ 73.9 5 abject Nuclear Plants ** .7 1.3 3.2 6.8 5.3 4.3 3.1 1.6
- See Assumptions on Following Page
- Exclusive of AFUDC 4/7/75
B-8 Central Maine Power Company ASSUMPTIONS REGARDING SOURCES OF FUNDS SCHEDULE PILGRIM NO. 2 NUCLEAR STATION The key assumptions used in this analysis are as follows: 1) Earned return on averageequity: 8.3% - 14.25% 2) Payout ratio 70% - 80% 3) Common stock sold at 80% - 100% of book value per share 4) A.F.U.D.C. Net and not deferred 5) Rate relief requested and granted sufficient to cover cost of service including assumed returns on equity 6) General: Data shown on previous schedule is the result of assumptions stated above. Actual results will vary from those pro-jected as regulatory and financial market conditions change. 2201 303 4/7/75 e i .N.
B-9 B.4 Central Vemont Public Service Corporation (CVPSC) CVPSC is the largest 'lectric utility in the State of Vermont. Its operating revenues increased from $41.7 in 1973 to $50.0 million in 1974, while net income increased from $2.0 million to $3.4 million. These earnings figures include certain revenues allowed by the Vermont Public Service Board under a purchased power and fuel adjustment clause applicable to the periodt 'uly 1,1973 to June 30, 1974. Invested capital at December 31, 1974 amounted to $117.1 million and consisted of 49.9% long-term debt,14.7% preferred stock, and 35.4% common equity. The return on common equity for 1974 was 7.2%. The return on common equity for 1973 was 3.7%, restated to reflect the above-mentioned rate increases. Pretax coverage of total interest charges for 1974 was 1.7 times, versus cov-erage of 1.5 times for 1973, also restated. CVPSC's first mortgage bonds are rated 'Baa' by Moody's and 'BBB' by Standard and Poor's. CVPSC plans to finance its 1.78% share of Pilgrim 2 with internally generated cash and through short-term borrowing to be subsequently refinanced by the issuance of debt and equity securities. Available sources of funds in 1974 totaled $13.4 million and were derived from $11.3 million of security issues and other funds and internally generated cash of $2.1 million. Inter-nally generated cash in 1974 represented 33.3% of 1974 construction expend-itures (net of allowance for funds used during construction). At our request, CVPSC supplied a projected sources of funds statement for the 1975-1982 oeriod, with underlying assumptions, demonstrating how the requisite funds might be raised. CVPSC's internally generated cash 2201 304
B-10 over this period is projected to be 23.6% of total construction expend-itures and 223% of its expected outlays for Pilgrim 2. We have reviewed CVPSC's projections and find them within the zone of reasonableness. 2201 305
Applicant: Central Vemmt Public Senice Corooration Nuclear Pir.nt: Pilstrim Station Unit *S. 2 Sources of Funds for System Wide Construction Errenditures During Drriod of Constr.:ction of Subject Nuclear Power l>lant (millions of dollars: 000.0) Construction Years of Subject Nuclear Power Plant Security issues and other funds
- 1973 1976 13 1978 1979 1930 1931 1982 Common stock
$ 7.o $ 8.o $15.o $10.0 $10.0 $ 5.o $20.o 5.0 5,0 5.0 5.0 LT) Preferred stock 1.2 10.0 LA Long-term debt 8.0 14.0 15.0 10.0 15.0 17.0 20.0 10.0 5.3 8.4 3.5 Notes payable 1.1 (3.5) (.9) 1.9 Total 17.3 16.5 N.1 2o.9 20.0 W/. 3 3 ).4 h.5 Internal funds Retainad earnings Net income 5.0 6.5 8.4 10.2 10.5 10.9 12.7 14.5 less: preferred dividends 1.7 1.7 1.7 2.9 2.9 3.5 4.1 L.7 co mon dividends 3.1 S.7 4.5 5.2 5.8 6.7 7.7 8.7 Retained earninas 0.2 1.1 2.2 2.1 1.0 0.7 0.9 1.1 7 Depreciation ar.d amortiration 2.5 2.7 2.8 3.0 3.5 3.7 3.9 h.3 j Total 2.7 3.8 5.0 '>.1 5.3 4.4 4.d 5.4 Total Funds $20.0 $32.0 $3M 141.7 M $k3.9 Construction expenditures Nuclear power plants (Incl. fuel) $37 $ 5.5 5 7.7 $12.4 $11.5 $ 9.0 $ 6.9 $ 5.8 Other 7.6 9.0 10.0 12.h IL.O 13.3 12.6 12.9 Total
- 11.3 314.5 G17.7 3'T H25.5
!" JET filV.T fil8~7 Subject nucvwr plant (Incl. fuel) !M !E !3 !,M 3.5 , 2. 7 1,9 l@- 2-
- Note: The amount shown for security issues and -ther funds is provided as a general guide to the Company's financial D-planning. The types, amounts and timings of any financings cannot now be deter nined and vill te dependent u;nn CD n.arket conditions ar.d other factors at the time, including the effect of limitations in the Company's First Mortgace O
and Debenture indentures on the incurring of additional funded debt and the limitatior.s in its Articles of Association on the issuance of preferred stock and unsecured debt. Das e Assumptions Used: 1 Capitalization Ratios - Based generally on 50%-15%-35f, roals for Lonc-Tern Dett, Prererred Equity and Co:: con Equity 2 Return on Co= on Equity - 12.5% - 13.5% used during forecast period 3 Interest on nee Iong-Tern Debt 10-11% h New Preferred Stock at 12% dividend rate Rev. 3-27-75
B-12 B.5 The Connecticut Licht and Power Company (CL&P) CLGP is a subsidiary of Northeast Utilities and the largest electric and gas utility in Connecticut. Operating revenues increased from $248.7 in 1973 to $338.3 million in 1974, while net income rose to $60,1 million from $49.6 million, excluding the cumulative effect of prior period accounting changes and after restatement for the amortization of certain unusual power costs incurred in 1973. Invested capital at December 31, 1974 amounted to $1,120.5 million and consisted of 49.7% long-tenn debt, 15.6% preferred stock, and 34.7% common equity. If this capital structure is profonned for the early 1975 first mortgage bond offering of $85 million and the expected capital contribution of $25 million from Northeast Utilities, the common equity ratio declines to 32.4%. The return on cemmon equity for 1974 was 11.6%, compared with a restated 5.7% for 1973. Pietax coverages of long-term interest and total interest charges for 1974 were 3.02 times and 2.43 times respectively, versus a restated 2.84 times and 2.35 times for 1973. Cl.4P's first mortgage bonds are rated "A" by both Moody's and Standard and Poor's. CL6P plans to finance its 8.61% share of Pilgrim 2 by the use of internally generated cash, the issuance of first mortgage bonds and pre-ferred stock, and equity capital contributions from Northeast Utilities. 6 Available funds from these sources for 1974, excluding the cumulative effect of accounting changes and the gas operations to be sold, totaled $187.2 million and were derived from $59.0 million of internally generated cash, $114.6 million of security issuances and $13.6 million of notes payable. The intemally generated cash during this period represented 53.9% 2201 307
B-13 of electric construction expenditures (net of allowance of funds used during construction). At our request, CL6P supplied a projected sources of funds statement for the 1975-80 period, with underlying assumptions, demonstrating how the requisite funds might be raised. According to CLGP, no current projections have yet been made for 1981-82. CL4P's internally generated funds over the 1975-80 period are projected to be 30.1% of total construction expenditures and 453% of its expected outlays for Pilgrim 2 (inclusive of allowance of funds used _during construction). On October 7, 1974, the Connecticut Public Utilities Commission granted CLGP a permanent rate increase of $25.3 million. The financial data con-sidered by this Commission indicates that these rates should provide a return on common equity of approximately 14.1%. Based upon this and recent earnings trends, we believe that CL6P's projections are within the zone of reasonableness, 22U1 308 c s' W I h,
Applicant: The Connecticut Li c h'. and Power Cor par.y Nuclear Plant : Pilcrin St atien t' nit Na. 2 Sources of Funds for Svcter-wha Construction Expenditures Durine Perin1 of Constructinn of Subject Nuclear Power Plant (nillions of dollars) Security issues and Construction Years of Subject Nuclear Power Plant other funds 1075 1076 1977 1978 1979 1980 1981 (1) 1982 (1) Common stock A I . Preferred stock 20.0 20.0 25.0 30.0 30.0 25.0 N/A N/A Long-term debt - net 125.0 90 0 90.0 115.0 115.0 100.0 N/A N/A Notes payable - net (103.0)' Contributions from parent - net h5.0 5.0 5.0 5.0 5.0 5.0 N/A N/A Uther ftinds - net 21.0-0.0 ( 3. 0) (3.0) (3.0) 1.0 N/A '; / A Total 108.0-115.0 117.0, lh7.0 1h7.0 131.0 N/A N/A t-Internal funds Net income 57.0 Less: y preferred dividends 13.0 common dividends 37.0 Retaired earnings 7.0 lb.0 15.0 28.0 17.0 2.0 N/A N/A Deferred tuas Investment tax credit Depreciation and amort. 36.0 h2.0 L3.0 L5.0 55.0 62.0 66.0 70.0 Tot al h3.0 56.0 58.0 73.0 72.0 hh.0 N/A N/A TOTAL FUNDS $151.9 $171.0 W $_220. 0, {23 $1 3 Q/g $ N/A Construction exnenditures (2) Nuclear power plants $ 95.0 $100.0 $ 99.0 $126.0 $128.0 $ 78.0 $ 73.0 $124.0 Other - Electrie 50.0 63.0 71.0 90.0 87.0 112.0 N/A N/A - Gas 6.0 8.0 5.0 h.0 h.O 5.0 N/A N/A N Total const, exp's $151.0 $171.0 $175.0 $220.0 $210.0 $10s.O $ N/A $ N/A N Subject nuclear plant 8 2.d N UU M $ 2k.3^ M7 $ 10.2 C3 (1) N/A means not available. For periods after 1980 ve have no current projection of construction expenditures other than for our major generating units and conse pently show no estinate of total finincing requirements for 1981 and 1982. 6. Our expectation is that the financing aseptions applicable to the earlier years would also apply in these years. (2) Inclusive of AFDC (allowance for funds used duriv construction) at 9'l rate on expenditures after lo7h. Figures exclusive of AFDC not currently available.
B-15 SUPPLEVENTAL GENERAL A'ID FINANCIAL INFORMATION SUBMITTED Bf THE CONNECTICUT LIGHT AND POWEB COMPANY (CL&P) PTLGRIM CTATION tmIT NO. 2 DOCKEf NO. 50 h71 Question 11. (1) Enclosed are 75 copies of the prospectus for the issuance in February, 1975 of mortgage bonds by CL&P. (2) Enclosed are 75 copies each of the 197h Annual Report for Northeast Utilities, the Holding Company Gysten of which CL&P is a part, and of the 197h CL&P Annual Report, which includes the requested income statement and balanc( cheet. (3)(a) Enclosed are 75 conies af the schedule entitled " Sources of Funds For System-Wide Construction Expenditures During Period of Construction of Subject Nuclear Power Plant", showing a projection for CL&P of one potential manner in which CL&P may finance its expected construction costs during this period. TPe forecast includes figures for gas operations an d constructicn, though it is expected that the gas operations of CL&P will be sold during the period, The receipt of the proceeds from the sale (which would have amounted to about $117 million if the sale had occulred at December 31, 197h) and the eliminaticn thereafter of further gas construction exnenditures, would have the ef fect of reducing these projected anounts of security issues and other funds requirements correspondingly. It should be understood that thece figures are brsed on actual financinc plans only for 1975, and for the period of 1976-1990 are based upon the assumptions described below and assuming normal conditions in the capital market. Market conditions are necessarily very uncertain. Accordingly, specific future detailed financing plans of CL&P cirply cannot be vell enough defined at this tine for such a schedule as this to be very meaningful. The figures in the schedule are based on the assumption after 1975 that 525 of CL&P's capital requirements are to be surplied by long-term debt and 13% by preferred stock. Another 25 la assumed to be supplied by capital contributions from CL5P's parent, Northeast Utilities. The remaining 33% is assumed to be provided by internally generated funds. Of such funds, those resulting fror depreciation and amortization have been roughly projected based on past experience and recornizing the a3ditional depreciation in the future after each new generating unit goes into service. Retained earnings have been projected simply as the difference between total projected internal funds and those produced by depreciation and amorti zation. No actual earnings forecasts have been made, reflecting this proposed construction program; any such forecasts would be highly dependent on the assumed level of rate relief during the period. The caption "Other funds--net" is used as a balancing account to reflect for 1975 other cash requirements outside the construction program net of other internally generated funds not ir.cluded in the list of " Internal funds". After 1975 the figures are simply to balance the rounding assumed in the figures for net permanent capital supplied. Nothing i shown for " Notes cayable" except for the repayment during 1975 of these outstanding at the beginning of 17,3, since the assumption is made that all such interim financing is converted into permanent capital. Also, nothing is shown for ' Deferred taxes" or "Investnent tax credit" because CL&P is in a " flow-through" rate jurisdiction. While the resulting scradule may be viewed as speculativo because of the degree of detail called for, it is derived fron the more realistic CL&P expectation to finance in general, approximately 50-55 percent of the cost of its plant investment with long-term debt, 10-15 percent with preferrel stock, and the remainder to be financed by it.ternally generated funds and capital contributions. 2201 310 i i< t u c S. 3
B-16 B.6 Fitchburg Gas & Electric Light Company (FG&EL) FG&EL provides electric and gas service to several communities in North Central Massachusetts. Its operating revenues increased from $14.5 million in 1973 to $20.3 million in 1974, although net income fell fron. $0.8 million to $0.6 million. Invested capital at December 31, 1974 totaled $28.6 million and consisted of 51.4% long-term debt,15.4% pre-ferred stock, and 33.2% common equity. The return on common equity in 1974 was 6.3%, compared with 9.5% in 1973. Pretax coverages of long-term interest and total interest charges in 1974 were 2.5 times and 1.7 times, respectively, versus coverages of 2.8 times and 2.1 times in 1973. FG&EL's long-term notes are rated 'Baa' by Moody's and 'BBB' by Standard and Poor's. FG&EL plans to finance its 0.19% ownership share of Pilgrim 2 by the use of internally generated cash and short-tem borrowings which will subsequently be replaced with equity or debt securities. Available sources of funds in 1974 totaled $3.9 million and were derived from $.8 million of internally generated cash and $3.1 million from preferred stock, notes payable, and other sources. Internally generated cash in 1974 represented 20.7% of total construction expenditures. At our request, FG&EL supplied a projected sources of funds statement for the 1975-1981 period, with underlying assumptions, demonstrating how the requisite funds might be raised. Internally generated cash over this period is projected to be 50.7% of total construction expenditures (net of allowance for funds used during construction) and.104% of its expected out-lays for Pilgrim 2. We have reviewed FG&EL's projections and find them withintheboneofreasonableness. 2201 311
Applicant: Fitchburg Gas and Elect ric Light Cm pan y Nuclear Plant: Pilgrim Unit 2 Sou rces of Fund s for Syst m-Wide Const ruc t ion Expenditures Dur ing Per iod of Const ruct ion of Su bj ec t Nuclear Power Plant (thousands of dollars) Const ruct ion Years of Subject Nuclear Power Plant Security issues and other funds 1974 1975 1976 1977 1978 1979 1980 1981 Common stock $1700 $1800 Pref erred stock 800 700 Long-term debt 2500 2500 Notes payable 520 (3592) 2477 2249 (3168) 1370 1231 Contribut ions f rom parent-net Other funds 03 Total 520 1408 2477 2249 1832 1370 1231 1 N Internal funds Net income 1518 1581 1870 2028 2102 2511 2597 Le ss: preferred dividends 294 294 398 398 398 489 4?9 common dividends 734 769 1057 1057 1057 1360 1360 Retained earnings 490 51 8 415 573 647 662 748 P ferred taxes 513 562 595 665 709 754 8 01 lax credit (14) (25) (30) (35) (40) (45) (50) Depreciat ion and amort. 900 1026 1103 1197 1296 1398 1504 AFDC (253) (30) (50) (75) (150) (170) (50) Sinking & Wo r k ing Fund s 347 (159) 90 126 206 231 116 N TOTAL FUNDS $250) $3300 $4600 $4700 $4500 $4200 $4300 N O Const ruc t ion expend it ures* Nuclear power plant s S $ 363 $ 745 $1220 $1702 $1882 $1706 $1311 Other 2172 3270 4341 3140 2514 2601 2500 u Total const. ex p 's. $25_15 $ 4_015_ $556 $4842, $4396 $4307 $3811 Su bj ec t nuclear plant S $ 45 $ 90 $ 210 $ 456 $ 151 $ 285 $ 204 N
- Exc lu sive of AFDC (allowance f or f unds used during const ruct ion)
8-18' Fitchburg Gas & Electric Company Assumptions Regarding Sources of Funds Schedule Pilgrim No. 2 Nuclear Station (1 ) Return on common equity - 14%. (2) New long term debt and preferred interest rate - 8%. (3) Common stock sold at book value. (4) Common stock dividend payout ratio - 65%. 2201 .513 4TtC 1 ';; 1.1
B-19 B.7 Montaup Electric Company (MEC) All debt and equity securities of MEC are owned by Blackstone Valley Electric Company, Brockton Edison Company, and Fall River Electric Light Compe.ny, which in turn are all wholly owned subsidiaries of Eastern Utilities Associates (EUA). MEC supplies electricity to the three EUA companies which jointly service several towns and rural areas of Rh?de Island and Massachusetts. Its operating revenues rose from $57.8 million in 1973 to $98.8 million:in 1974, while net income increased from $3.8 million to $5.1 million. Invested capital at December 31, 1974 amounted to $78.9 million and consisted of 50.2% long-term debt,1.9% preferred stock, and 47.9% conmon equity. The return on coninon equity in 1974 was 13.7%, compared with 12.1% in 1973. Pretax coverages of long-term interest and total interest charges in 1974 were 4.7 times and 2.0 times, respectively, versus coverages of 4.5 times and 2.8 times in 1973. As noted above, MEC's securities are privately held and, therefore, are not rated. MEC plans to finance its 2.15% share of Pilgrim 2 by short-term bank borrowing with subsequent refinancing through the sale of debentures and/or common stock to its above-mentioned owner companies, who would finance their acquisition of MEC's securities through the sale of long-term debt or pre-ferred stock to the public or throt.gh the sale of common stock to the parent company, Eastern Utilities Associates. Available sources of funds in 1974 totaled $25.5 million and were derived from $.5 million of internally gen-erated cash and a $25.0 million increase in notes payable. Internally, ten-erated cash in 1974 represented 2.1% of total construction expenditures. 2201314
B-20 At our request, MEC supplied a projected sources of furids statement for the 1975-1982 period, with underlying assumptions, demonstrating how the requisite funds might be raised. MEC's internally generateo cash over this period is projected to be 15.1% of total construction expenditures and 132% of its expected outlays for Pilgrim 2. We have reviewed MEC's projections and find them within the zone of reasonableness. 2201 315 Sic fuss
Applicant: Montaup Electric Company Nuclear Plant: Pilgr im Station 2 Sources of Funds for Systen-Vide Construction Expenditures Durirg Period of Construction of Subject Nuclear Power Plant (millions of dollars) Construction Years of Subject 4-lear Power Plant Security issues and other funds 1975 1976 1977 1978 1979 1980 1981 1982 Common stock $ 7.7 $15.0 $12.8 $20.0 $20.0 Preferred stock 2' Long-term debt 23.0 19.2 30.0 30.0 Notes payable (11. 2 ) (5.7) 9.6 (17.~ 5 ) (13. 7) (.3) (3.1 ) 11.0 Contributions f rom P ': parent-net Other funds Total $19.5 $ 9.3 $ 9.6 $14.5 $16.3 $19.7 $26.9 $31.0 f '3 Internal funds Net income 2.7 4.5 6.0 7.5 8.4 8.8 9.9 10.4 Less: Pref erred dividends Common dividenda 2.7 3.6 3.6 3.6 3.6 3.6 3.6 3.6 Retained earnings 0 .9 2.4 3.9 4.8 5.2 6.3 6.8 N Deferred taxes .2 .3 .3 .3 .3 .3 .3 .4 N Investment tax credit O Depreciation and amort. 2.1 2.6 2.8 2.9 3.1 3.6 4.1 4.6 Le ss: AFDC 3.8 1.1 2.1 3.6 4.5 4.8 5.6 6.8 Total (1.5) 2.7 3.4 3.5 3.7 4.3 5.1 5.0 j TOTAL FUNDS $18.0 $12.0 $13.0 $18.0 $20.0 $24.0 $32.0 $36.0 m Construction expenditures
- Nuclear power plants
$5 $8 $12 Si7 $19 $19 $29 $23 Other 13 4 1 1 1 5 3 13 Total const. ex p ' s. $18 $12 $13 $18 $20 $24 $32 $36 Subj ec t nuclear plant $.5 $ 1.0 $ 2.4 $ 5.2 $ 4.0 $ 3.2 $ 2.3 $ 1.2
- Exclusive of AFDC (allowance for funds used during construction) 4/22/75
aw; 7.; .. ' _ ~ _. = X* -. . ~. : : ] 4 E 1 ~ B-22 Montaup Electric Company Assumptions Made in Preparation of Sources of Funds Statement + 4 (1) The Company will earn 14% on common stock equity. (2) New long-term debt will have an interest cost of 8%. " i . i (3) Common stock will be sold to Montaup's owner companies at par value. s 2201 317 e = F-M s 'M N 4 4 C
- f
.? '? 1 1- ' - (' 5 }/ 4 3 e' p Wg M .i. $I 1 b 4
B-23 B.8 New Bedford Gas and Edison Light Company (NBG&EL) NBG&EL, a subsidiary ot' New England Gas and Electric Association, supplies electricity and gas to numerous connunities in Southeastern Massachusetts. Its operating revenues increased from $75.8 million in 1973 to $110.4 million in 1974, although net income decreased from $3.3 million to $3.0 million. Invested capital at December 31, 1474 totaled $104.5 million, and consisted of 47.3% long-tenn debt and 52.7% common equity. The return on average conmon equ'ity for 1974 was 5.5%, compared with 6.9% for 1973. Pretax coverages of long-tenn interest and total interest charges for 1974 were 3.1 times and 1.9 times, respectively, versus coverages of 4.2 times and 2.2 times in 1973. NBG&EL's long-term notes are rated 'Aa' by Moody's and 'A' by Standard and Poor's. NBG&EL plans to finance its 1.53% ownership share in Pilgrim 2 by the use of internally generated cash and short-term bank borrowings which will be refinanced with the proceeds from the sale of debt or equity securities. Permanent financing will be on a 50/50 debt-equi y ratio basis since NBG&EL's Indenture requires that debt capitalization not exceed equity capitalization. Available sources of funds totaled $22.2 million in 1974 and were derived from $5.8 million of internally generated cash and a $16.4 million increase in notes payable, net of refunding requirements. At our request, NBG&EL supplied a projected sources of funds statement for the period 1975-1982, with underlying assumptions, demonstrating how 2201 318
B-24 the requisite funds might be raised. NBG&EL's internally generated cash over this period is projected to be 20.1% of total construction expend-itures and 330% of its expected outlay-for Pilgrim 2 (net of allowance for funds used during construction). We have reviewed NBG&EL's pro.iections and.'44 them within the zone of reasonableness. 2201 319 a ' ,)
NEW BEDFORD GAS AND EDISCN LIGHT COMPANY SOURCES OF FUNDS FOR SYSTEM-WIDE CONSTRUCTION EXPENDITUPES DURING PERICD OF CONSTRUCTION OF SUBJECT NUCLEAR POWER PLANT (Thousands of Dollars) Construction Years of Subject Nuclear Power Plant Eecurity issues and 1975 1976 1977 1978 1979 1980 1981 1982 other funds s Common stock 9 000 $ $ 28 500 $ $ 21 OJO $ - $ 24 500 Preferred stock Lcng-term debt 14 000 28 500 21 000 24 500 Notes payable (12 400) 16-200 (39 100) 20 600 (15 300) 20 600 (21 600) 27 000 Contributions from (.<'; parent - net 2 550 3 750 (1 200) 5 100 (9 300) 2 700 (3 600) 2 250 Other funds Total 13 150 19 950 2A 700 25 700 17 400 23 300 23 800 29 250 os u, Internal Funds Net Income 3 835 4 387 3 909 3 526 2 179 2 835 3 362 3 720 Less: Preferred dividends Common dividends s 422 4 168 3 714 3 350 2 070 2 693 3 194 3 534 Retained earnings (4 167) (4 955) 4 867 (8 718) 611 (4 034) (3 917) (5 432) pgyDeferred taxes 1 649 1 816 1 943 2 323 2 568 2 798 3 018 3 627 pgjInvestment tax credit 572 472 468 1 104 693 538 617 1 730 CZ) Depreciation and amort. 5 172 5 683 6 163 6 858 7 758 8 624 9 713 11 125 -- Less : AFDC 604 745 1 280 1 762 2 206 2 693 2~744 3 071 Total 3 035 2 490 12 356 (19) 9 533 5 375 6 855 8 165 q, TOTAL FUNDS $ 16 185 $ 22 440 $ 29 056 $ 25 681 $ 26 933 $ 28 675 $ 30 655 $ 37 415 Construction Expenditures n Nuclear power plants 1 368 $ 2 713 $ 4 930 $ 6 865 $ 6 970 $ 7 107 $ 7 353 $ 12 24b Other 14 817 19 727 24 126 18 816 19 963 21 568 23 302 25 175 Total const. exp's. 16 185 22 440 29 056 25 681 26 933 28 675 30 6L5 37 415 Subject Nuclear Plant 410 $ 734 $ 1 703 $ 3 684 $ 2 921 $ 2 460 $ 1 713 842
- Exclusive of AFDC (Allowance for funds used during construction)
B-2f NEW BEDFORD GAS AND EDISON LIGHT COMPANY The " Sources of Funds" statement enclosed includes the following basic assumptions: 1. Return on common equity - 11%. 2. New long-tera debt interest rate - 10%. 3. Common stock sold at book value. 4. Dividend payout ratio - 95%. 5. Construction expenditures for the 1975-79 period are based on current budget forecasts. The years 1980 to 1982 reflect an increase in construction expenditures of 8% per year, exclusive of nuclecr proje. ts plus current estimates of nuclear project costs. 2201 a21 .e g y, r 1 .,a
B-27 8.9 New Englara Power Company (NEPCO) NEPC0 is a subsidiary of New England Electric System and serves prin-cipally as a wholesale supplier of electricity, primarily to affiliated companies. Operating revenues increased from $219.2 million in 1973 to $372.8 million in 1974 and net income rose to $28.6 million from $24.4 million. Invested capital at December 31, 1974 amounted to $654.1 million and consisted of 49.7% long-term debt,13.1% preferred stock, and 37.2% comon equity. If this capital structure is proformed for the early 1975 first mortgage bond offering of $80 million, the comon equity ratio declines to 33.1%. The "eturn on common equity for 1974 was 10.2%, compared with 9.4% for 973. Pretax coverages of long-term interest anc total interest charges for 1974 were 3.18 times and 2.03 times,respectively, compared with 3.41 times and 2.46 times for 1973. NEPC0's first mortgage bonds are rated "AA" by Moody's and "A" by ".ondard and Poor's. NEPC0 plans to finance its 11.16% share of Pilgrim 2 by short-term borrowings which would subsequently be permanently financed by the sale of long-term debt, pref.:rred stock, common stock, and capital contributions from New England Electric System. Available funds from these sources in 1974 totaled $93.6 million and were derived from a $30 million common stock issue and a $63.6 million increase in notes payable. The $22.9 million of internally generated cash in 1974 represented 25% of construction expenditures (net of allowance for funds used during construction). 2201 422
B-28 At our request, NEPC0 supplied a projected sources of funds statement for the 1975-82 period, with underlying assumptions, demonstrating how the requisite funds might be raised. NEPC0's internally generated cash over this period is projected to be 15.7% of total construction expenditures and 268.6% of its expected outlays for Pilgrim 2. NEPC0's resale rate to its affiliates and others is subject to the jurisdiction of the Federal Power Commission. According to an FPC order issued November 30, 1973, approving a settlement agreement certified by the Presiding Administrative Law Judge, NEPC0's rates were set to produce an 11.75% return on common equity. On November 23,1974, NEPC0 filed an application with the FPC for an increase in wholesale rates f approximately $22.7 million. Based upon NEPC0's recent earnings performance and current regulatory trends, which would seem to indicate that the FPC will grant rates designed to produce a nigher return on common equity than allowed pre-viously, we believe that the 13% return on common equity being projected over the period of construction is within the zone of reasonableness. 2201 323 \\.
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1 0 m APPLICANT: NEW ENCIAND POWER C(NPANY NL' CLEAR PLANT: PIILRIM 11 STATION p g Sources of Funds for Syster. Wide Construction E,xpenditures During Period of Construction of subiect Nu: lear Fewer Plant (millions of dollars) i 1 -j Security issues and Const ruc tio.. Years of Sub ject Nuclear Power Plant other funds 1975 1976 1977 1978 1979 1980 1981 1982 j Common stock $ 25 $ 20 $ 20 $ 50 $ 70 $ 100 $ 125 $ 95 Preferred stock 25 10 10 20 30 45 50 45 i tong-tern debt 80 20 45 80 100 155 205 150 Notes payable (80.2) .8 12.5 (9.2) (2.8) (.5) 12 .7 j Contributions from parent-net other funds e I Total $49.8 $50.8 $87.5 $140.8 $197.2 $299.5 5392.0 $290.7 I Internal Funds G3 i Increases in Working Capital (2.5) (1.C) (1.6) (1.5) (1.9) (1.1) (0.9) (1.0) k = Retained earnings 2.1 3.1 3.7 4.5 5.6 7.1 8.7 10.4 q) g Deferred taxes 7.6 8.2 10.8 15.6 24.4 37.5 41.4 41.9 l Investment tax credit N 3.5 .7 1.2 .9 5.3 12.1 4.6 21.3 i Depreciation and amort. N 22.0 22.5 2 3. f. 25.0 28.6 34.9 47.2 70.9 [ 6.3 8.0 14.2 23.1 31.8 44.0 J 74.7 i Less: AFDC g Total Internal Funds 26.4 25.5 23.3 21.4 30.2 46.5 3.. 68.8 TOTAL FUNDS $76.2 $76.3 $110.8 $162.2 $227.4 $ 346. 0 $430.6 $359.5 I Construction expenditures
- 4' N
8 U) Nuclear power plants $35.2 $54.7 $ 88.8 $133.8 $176.4 $235.2 $279.3 ?232.5 j i Other 41.0 21.6 22.0 28.4 51.0 110.8 151.3 127.0 Total const. exp's. $ 7,6] y M g $227.4 g $430.6 $359.5 g l Subject nuclear plant S 4.8 5 5.1 $ 12.1 $ 26.9 S 21. 7 $ 16.8 $ 11.0 5.7 5 i i l
- Exclusive of AFDC (allowance for funds used during construction)
NEPLO is current ly negot iat ing wit h Green Mountain Power Cmpany to ac qu ir e it s ownership int erest in t he su b j ec t plant. T he se negotiations are st ill in progress. However, f or purposes of this s schedu le only. G reen Mount ain Power Company's share will be included in NEPCO's share. 4-14-75 The Company's construction budgets and related projections of sources of fur.ds are under continuing review and are subject to revision from time to time.
B-30 A new " Sources of Funds" statement is provided. The basic assumptions underlying this schedule follow. 1. The Company is a subsidiary of New England Electric System (NEES) and as such pays a larger percentage of its earnings to NEES than would be the case if it were a separate operating company. NEES invests funds from its retained earnings and new common issues in NEPCO through the purchase of the Company's common stock. 2. The Company will earn at least 13% an common stock equity. 3. Construction costs will rise 5% per year due to inflation. 4. Due to the uncertainties regarding future load growth, the Company has adopted a " band width" approach to capacity plan-ning. This band width spans a range of load growth from 4% to 8% a year after 1976. The Company's firm commitments to date are designed to meet a load growth on the low side of the band teidth. However, the Company has taken options on generating equipment which, if exercised, will permit it to meet the high side of the band width. On the attached statement, we have assumed construction expenditures based upon load growth of about 87. a year after 1976. 5. To further increase internal funds, on November 29, 1974, the Company filed an application with the FPC for an increase in rates which would include construction work in progress in rate base and eliminated the alternative of recording allowance for funds used during construction. This proposed change is not re-I flected on the rttached Source of Funds statement. 2201 325
B-31 B.10 Public Service Company of New Hampshire (PSCNH) PSCNH supplies electricity to approximately 84% of the population of the state of New Hampshire. Operating revenues increased from $111.5 million in 1973 to $155.9 million in 1974, while net income rose to $16.3 million from $14.3 million. Invested capital at December 31, 1974 amounted to $394.9 million and consisted of 53.4% long-term debt,14.1% preferred stock, and 32.5% common equity. The return on common equity for 1974 was 11.3% compared with 10.0% in 1973. Pretax coverages of long-term interest and total interest charges in 1974 were 2.83 times and 2.10 times, respectively, versus 2.90 times and 2.33 times in 1973. PSCHN's publicly held debentures are rated "BBB" and and "Baa" by Standard and Poor's and Moody's,respectively. PSCNH plans to finance its 3.47% share of Pilgrim 2 by the use of internally generated cash and the issuance of bonds, preferred stock and common stock. Available funds from these sources in 1974 totaled $70.2 million and were derived from $16.5 million of internally generated cash, and $53.7 million of security issuances and other funds. Internally generated cash in 1974 represented 38.2% of 1974 construction expenditures (net of allowance for funds used during construction). At our request, PSCNH supplied a projected sources of funds statement for the 1975-82 period, with underlying assumptions, demonstrating how the requisite funds might be raised. PSCNH's internally generated cash over this period is projected to be 20.6% of total construction expenditures and 2201 326
B-32 653% of its expected outlays for Pilgrim Unit 2. We have reviewed PSCNH's projections and find them within the zone of reasonableness. 2201 327 c .) i
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B-34 PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE BASIC ASSUlf?TIONS OF SOURCE OF FUNDS 1. The cumpany will earn 14% on common stock equity. 2. New long-term debt and preferred stock will have an interest cost of 87.. 3. Common stock will be sold at book value. 4. Common stock dividend payout ratio is 657.. 5. Continuation of an 87. rate of inflation as to both construction labor and materials has been assumed. Better control of the rate of inflation by the nation would reduce construction costs. 6. Includes Investment Tax Credit at 4%. 2201 329 4/2/75 / ?,.
B-35 B.11 United Illuminating (UI) UI supplies electricity to the southwestern part of Connecticut. Oper-ating revenues increased from $116.8 million in 1973 to $173.8 million in 1974, while net income rose to $20.6 million from $14.6 million.
- However,
$4.8 million of this increase was attributable to a change in the method of accounting for fossil fuel costs - $1.9 of which represented the cumulative effect of the change prior to January 1,1974. Invested capital at December 31, 1974 amounted to $349.3 million and consisted of 53.7% long-term debt,15.7% preferred stock, and 30.6% corwn equity. If this ca al structure is pro-formed for the early 1975 common stock offering of 600,000 shares, the common equity ratio rises to 32.9%. The return on common equity for 1974 was 15.3%, excluding the cumulative effect to January 1,1974 of the change in fuel cost accounting. The return on comon equity for 1973 would have been 14.8%, assuming this accounting change had been in effect and after the restatement of the financial data to reflect the flow-through of additional tax benefits resulting from the adoption of shorter tax depreciation lives for certain plant. Pretax coverages of long-tenn interest and total interest charges in 1974 wem 3.08 times and 2.33 times, respectively, versus a restated 3.05 times and 2.74 times in 1973. If .5 publicly held debentures are rated "A" by both Moody's and Standard and Poor's. VI plans to finance its 3.3% share of Pilgrim 2 by the use of internally generated cash and the issuance of debentures, preferred stock and common stock. Available funds from these sources in 1974 totaled $75.2 million and were derived from $12.5 mit! ion of internally generated cash, $25 million of 2201 a30
B-36 security issuances, and $37.7 millio.1 of notes payable. Internally generated cash in 1974 represented 18.8% of 1974 construction expenditures (net of allowance for funds used during construction). At our request, UI supplied a projected sources of funds statement for the 1975-82 period, with underlying assumptions, demonstrating how the Tquisite funds might be raised. UI's internally generated cash over this period is projected to be 44.4% of total construction expenditures and 619% of its expected outlays for Pilgrim 2. We have reviewed UI's projections and find them within the zone of reasonableness. 2201 .331
Applicant: The United Illuminating Company Nuclear Plant: Pilgrim Nuclear Station Sources of Funds for System-Wide Construction Expenditures During Period of Construction of Subject Nuclear Power Plant (millions of dollars) Construction Years of Subject Nuclear Power Plant 1975 1976 1977 1978 1979 1980 1981 1962 ^ Security issues and other funds $25.0 Conmn stock $21.4 $15.0 25.0 15.0 17.0 Preferred stock 10.0 30.0 38.0 40.0 45.0 Long-term debt 30.0 Notes payable (40.4) 31.8 (4.3) 6.4 (6.2) 1.4 (24.1) 1.2 Contributions from parent-net Other funds 6.5 (4._3) (5.7) (9.3) (6.9) (11.6) 3.6 (14.1) Total 27.5 27.5 50.0 52.1 51.9 34.8 4.5 (12.9) Internal funds Net Income 22.6 25.6 27.9 33.4 37.9 43.2 48.4 52.8 ? Less: preferred dividends 4.2 4.5 5.1 6.6 7.9 7.9 10.0 10.5 common dividends 10.3 11.3 11.7 13.1 13.9 16.0 16.0 16.0 Retained earnings 8.1 93 11.1 13.7 16.1 19.3 22.4 26.3 Deferred taxes (1.1) (1.1) (1.1) (1.0) .1 .2 .2 .2 Investment tax credit Depreciation and amortization 13.8 16.3 16.9 17.2 16.0 19.4 22.7 26.0 Less: AH)C (6.2) (3.6) (7. 2) (11.4) (15.7) (16.8) (11.8) (11.0) Total 14.6 21.4 19.7 18.5 16.5 22.1 33.5 41.5 Total Funds $42.1 $48.9 $69.7 $70.6 $68.4 $56.9 $38.0 $28.6 y N Construction expenditures
- O Nuclear power plants
$15.7 $32.9 $55.3 $58.8 $55.3 $42.4 $23.8 $13.3 Other 26.4 15.0 14.4 11.8 13.1 14.5 14.2 15.3 b* Total const. exp's. $42.1 $48.9 $69.7 $70.6 $68.4 $56.9 $38.0 $28.6 U Subject nuclear plant S .8 $ 1.6 $ 3.7 $ 7.9 $ 6.4 $ 5.0 $ 3.2 j_1 7 Exclusive of AFDC (allowance for funds used during construction). Nuclear power plants construction include fuel costs. 03/03/75
B-38 THE UNITE ILLUMINATING COMPANY A, _mptions Used in Statement of Sources of Funds for System-wide Construction Expenditures During Period of Construction of Pilgrim Nuclear Station 1. Pro jections of construction expenditures for the four nuclear power plants in which the Company is a participant (Seabrook Nos. I and 2, Millstone No. 3, Pilgrim No. 2) during this period are based upon most recent estimates received from the participants responsible for construction of such plants. No expend. itures for other new generating units are included in construction expenditures during the period 1976-1982. Either escalation of the cost of the four nuclear plants or additions to the Company's construction program for the period of expenditure for any additional generating unit will increase the funds required. Cost of nuclear fuel for the four nuclear plants is included in the construction xpenditures; thus fuel leasing, if utilized, would reduce the amount of capital to be raised by the Company. Projections for construction expenditures other than nuclear power plants during the period 1976-1982 are based on a projected 4% annual rate of load growth. That rate of growth is considered the lower edge of the band width containing the probable rate of growth and any growth in exces-of 4% will increase these expenditures. 2. The amount of internal funds provided is based upon the assumption that su f fic ient increases in revenues will be authorized without delay through the regulatory process throughout the period such that the company will earn a 15% return on average common stock equity. There is, of course, no assurance that such a rate of return will be allowed throughout the period or that, even if allowed, such rate of return will be earned in view of regulatory and other factors. Dividends per share are assumed to remain at the current level. While the Connecticut Pub 1f c Utilities Commission has under consideration various pro-posals to authorize the normalization method of accounting for tax benefits, there is no assurance that the Commission will adopt any of such proposals and these calcu-lations are based on the flow through method presently required by that Commission. 2201 a33
B-39 3. Financing assumptions reflect actual plans for early 1975 and budgeted plans for the remainder of the year. Thereafter the sources of external funds have been based on the following a ssumpt ions: (a) Capitalization ratios in the range of 47 te 53% for long-term debt,14 to 17% for preferred stock, and 31 to 37% for common stock egoity. (b) The balances of short-term notes payable have been maintained at reasonable levels. (c) Interest costs of 7 % for short-term borrowings. (d) Interest costs of 10% for long-term debt. (e) Preferred stock dividend rate of 10h%. (f) Net proceeds of $20 3/8 per share before expenses of iss're for common stock to be sold in late 1975; sales thereaf ter assured prices of five times the prior year's earnings per share, discounted by 15%. The Company has no assurance that any of these assumptions will be realized or that financing on any other basis will in fact be available throughout the period. 2201 334 030275
G-40 B.12 Western Massachusetts Electric Company (WMEC0) WMEC0, a wholly-owned subsidiary of Northeast Utilities, supplies electrictty to the western part of Massachusetts. Operating revenues increased from $90.8 million in 1973 to $119.1 million in 1974, while net income rose to $13.3 million from $12.1 million. However,$1.7 million of this increase was attributable to a change in the method of accounting for fossil fuel costs prior to January 1,1974. Invested capital at December 31, 1974 amounted to $306.7 million and consisted of 50.2% long-tenn debt,11.4% preferred stock, and 38.4% commo.7 equity. If this capital structure is proformed for the early 1975 first mortgage bond offering of $10 million, the common equity ratio drops to 37.2%. The rcturn on common equity for 1974 was 9.2%, including the cumulative effect to January 1,1974 of the change in fuel cost accounting. The return on conrion equity for 1973 would have been 9.1% assuming this accounting change had been in effect. Pretax coverages of long-tenn interest and total interest changes in 1974 were 2.54 and 1.78, respectively, versus a restated 2.63 times and 2.02 times in 1973. WMEC0's first mortgage bonds are rated Baa by Moody's and BBB by Standard and Poor's. WMEC0 plans to finance its 4.63% share in P!1 grim 2 by the use of internally-generated cash and by bank loans which will be refunded with debt and equity securities and capital contributions Ly Northeast Utilities. Available funds from these sources for 1974 totaled $50.6 million and were derived from $5.5 million of internally-generated cash, $24.9 million of security issuances, and $20.2 million of notes payable, capital contributfor.s 2201 335
B-41 and other funds. Internally-generated cash in 1974 represented 14.0% of 1974 construction expenditures (net of allnwance for funds used du:ing construction). At our request, WMEC0 supplied a projected soruces of funds statement for the 1975 - 1980 period, with underlying assumptions, demonstrating how the requisite funds might be raised. According to WMdCO, no current pro-jections have yet been made for 1981 - 1982. kNECO's internally generated funds over the 1975 - 1980 period are projected to 26.9% of total construc-tion expenditures and 248% of its expected outlays for Pilgrim 2 (inclusive of allowance for funds used during construction). We have reviewed WMEC0's projections and find them within the zone of reasonableness. 2201 336 s c \\( 1
Applicant: Western Massacht'setts Flect ric Co psnv Nuclear Planu: Pilgrim St ation t' nit No. 2 Sources of Punda for Syster-Wide Constructior Expenditures Durine Period of Construction of Subject % clear Power _ Plant (millions of dollars) Construction Years of Subject Nuclear Power Plant Security issues and -other runds 1975 1976 1977 1978 1979 10B0 1981 (1) 1982 'I) Common stock f7 Preferred stock 0.0 10.0 5.0 5.0 5.0 5.0 N/A N/A Long-tem debt - net 10.0 55.0 20.0 25.0 25.0 30.0 N/A N/A Notes payable - net (1.0) (55.0) Contribution from parent - net 20.0 15.0 0.0 0.0 0.0 0.0 N/A N/A Other funds - net 9.C 5.0 1.0 'A.0) (1.0) (1.0) N/A N/A Tot al 38.0 30.0 26.0 28.0 - 29.0 3h.O N/A N/A CD Inte nal funds b' Net income 11.0 N Less: preferred dividends 3.0 common dividends 12.0 Retained earnings (4.0) L.0 1.0 3.0 1.0 0.0 N/A !!/A Deferred taxes 3.0 h.0 h.0 h.0 h.0 6.0 N/A N/A Investment tax credit 0.0 0.0 -0.0 0.0 0.0 0.0 N/A N/A Depreciation and amort. 10.0 12.0 12.0 12.0 15.0 17.0 18.0 20.0 Total 9.0 20.0 17.0 10.0 20.0 23 0 N/A N/A TOTAL FUNDS $h7.0 550.0 $h3.0 $h7.0 $h9.0 $57.0 $N/A $N/A Construction expenditures (2) Nuclear power plants $33.0 $3h.0 $31.0 $3k.0 $29 0 $17.0 $2h.0 $h3.0 Other Ib.0 16.0 12.0 13.0 20.0 LO.0 N/A U/A Total const exp's. $h7.0 $50.0 .$h3.0 $h7.0 $h9.0 $57.0 $N/A $N/A Subject nuclear plant $ 1.h $ 2.6 $ 5.9 $12.6 $11.0 $10.0 N j (1) N/A means not available. For periods after 1980 we have no current projection of construction expenditures other than for our major generating units and consequently show no estimate of total financing requirements for 1981 and 1982. Our expectation is that the financing assumptions applicable to the earlier years would also apply i - 'hese years. "(2) Inclusive of AFDC (allowance for funds used during construction) at 9T rate on expenditures after 197h. Figur3s exclusive of AFDC not currently available. LN N
B-43 SUPPLEMENTAL GENERAL AND FINANCIAL INFORMATION SUEMITTSD ~ BY WESTERN MASSACHUst"r3 ELECTRIC COMPANY (WMECO) PILGRIM STATION UNIT NO. 2 DOCKET NO. 50-471 Question 11. (1) Enclosed are 75 copies of the final prospectus for the issuance in January, 1975 of mortgage bonds by WMECO. (2) Enclosed are 75 copies of the WMECO 197h Annual Report, which includes the requested income statement and balance sheet. Reference is made also tv the 19Tk Annual Report of Northeast Utilities, the Holding Company System of which WMECO and CL&P are a part, 75 copies of which Report are included with this filing. (3)(a) Enclosed are 75 copies of the schedule entitled " Sources of Funds For System-Wide Construction Expenditures During Period Of Construction Of Subject Nuclear Power Plant", showing a projection for WMECO of one potentinl manner in which WMEC0 may finance its expected construction costs during this period. It should be understood that these figurec are based on actual financing plans only for 1975 and for the period of 1976-1980 are based upon the assunptions described below and assuming normal conditions in the capital market. Market conditions are necessarily very uncertain. Accordingly, specific future detailed financing plans of WMECO simply cannot be vell enough defined at this time for such a schedule as this to be very meaningful. The figures in the schedule are based on the assumption after 1975 that 52% of WMECO's capital requirements are to be supplied by long-term debt and 8% by preferred stock. The remaining h0% is assumed to be provided by internally generated funds except in 1976, when a capital contribution is required to help pay off outstanding notes pay able. Those internal funds resulting from depreciation and amortization, and deferred income taxes have been roughly projected based on past experience and recognizing the additional effects in the future after each new generating unit goes into service. Investment tax credit adjustments are expected to be minimal during this period. Retained earnings have been projected simply as the difference between total projected internal funds and those produced by depreciation and amortization plus deferred income taxes. No actual earnings forecasts have been made, reflecting this proposed construction program; any such forecasts would be highly dependent on the assumed level of rate relief during the period. The caption "Other funds--net" is used an a balancing account to reflect for 1975 other cash requirements outside the construction program net of other internally generated funds not included in the list of " Internal funds". After 1975 the figures are simply to balance the rounding assumed in the figures for net permanent capital supplied. Nothing is shown for ' Notes payable" except for the repaymant during 1975 and 1976 of those outstanding at the teginning of 1975, since the assumption is made that all such interim financing is converted into permanent capitcl. While the resulting schedule may be viewed as speculative because of the degree of detail called for, it is derived from the more realistic WMECO expectation to finance in general, approxirately 50-55 percent of the cost of its plant investment with long-term debt, 10-15 percent with preferred stock, the remainder to be financed by internally generated funds and capital contributions.
APPENDIX C ERRATA NOVEMBER 3,1975 PILGRIM NUCLEAR GENERATING STATION UNIT NO. 2 Page Line Change 1 -1 last Delete " Amendments 1 through 18" and replace with " Amendments 1 through 19". 1-2 14 Insert "be" between "will" and "able". 1-9 After "(9)" delete entire sentence substitute "(Deleted)". 2-13 1 Delete "25,00" and substitute "25,000". 2-13 24 Delete " district" and substitute " districts". 2-14 16 Delete "Plimouth" and substitute " Plymouth" 2-22 8-11 Delete paragraph beginning with "The X/Q values"... and replace with "The X/Q values in seconds per cubic meter at the outer boundary of the low population zone of 2400 meters were calculated to be 2.3 x 10 5 for the 0-8 hours period, 1.5 x 10-s for the 8-24 hour period, 5.6 x 10 6 for the 1-4 day period, and 1.4 x 10-6 for the 4-30 period". 2-26 4 Delete " applicant" and substitute " applicants". 2-30 15 Delete "relatively" and substitute "rel ati ve ". 3-22 9 Following the sentence ending with " analyses", add "or by pre /tous qualification tests and/or analyses for comparable environmental conditions." 4-12 9-10 Between " combinations." and "will", insert the following "We have concluded that the use of the proposed analytical techniques.." 4<- " 2201 339 " 2 C-1
- P_ase, Line Change ae 5-7 22 Insert " steam generator" between
'through" and " safety" 5-9 11 Delete " combination" and substitute " combinations". 5-11 9-11 Delete from after "radioactivety monitor" to end of sentence and sub-stitu'te "and containment pump and sump pump system." 6-27 3 Delete " absorption" and substitute adsorption". 6-29 19 Delete "propsed" and substitute " proposed". 7-7 10 Dele'te " Air" from item (8). 8-4 17 Between " proposed" and "d-c" insert '" safety related". 9-4 24 To the sentence which ends in " isolation valves.", add " upstream of all heat ex-changers." 9-4 24 Before the sentence which begins with " System", add the following sentence " Standpipes are provided. downstream of the safety related heat exchanges to provide redundant safety related discharge paths in the event that the normal discharge path is blocked". 9-10 8 Delete " spray" and substitute " sprinkler". 9-11 7 Delete "in these areas." and substitute "for the control room, the computer room, the switchgear battery and auxiliary panel rooms." 10-2 18 Delete " main steam Line tunnel." and sub-stitute " auxiliary building". l'i -18 8 After " detectors" insert "or Gaiger Mueller detectors, or scintillation and halogen filters". 11-18 9 To the sentence ending in " effluents'.' add "as appropriate." 2201
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Page Line Change 15-5 5 Delete "compments" and substitute "com-ponents" 15-8 Under the heading " EXCLUSION AREA", Change to "(Rem at 441 meters)". Under the heading " LOW POPULATION ZONE", delete "(6840 meters)" and substitute "(Remat2400 meters)" 19-1 12 Change "no diversion or special" to read "no diversion of special". A-6 22 Between the events of April 29, 1975 and May 15, 1975, insert the following "May 2,1975 Submittal of Amendment No.18, consisting of changes to various sections of the PSAR." 2201 341 C-3}}