ML19270F238

Responds to Alleged Inaccuracy & Inadequacy of 781031 Contentions by Georgians Against Nuclear Energy to Suspend Const Permits.W/Encl Re Load Forecasts,Generation Capacities & Reserves

ML19270F238
Person / Time
Site:	Vogtle
Issue date:	01/30/1979
From:	Ehrensperger W GEORGIA POWER CO.
To:	Harold Denton Office of Nuclear Reactor Regulation
References
NUDOCS 7902050181
Download: ML19270F238 (7)

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- +r - . - January 30, 1979 Mr. Harold R. Denton, Director Office of Nuclear Reactor Regulation Nuclear Regulatory Commission Washington, D. C. 20555 NRC DOCKETS 50-424, 50-425 CONSTRUCTION PERMITS CPPR-108 AND CPPR-109 ALVIN E. V0GfLE NUCLEAR PLANT UNITS 1, 2

Dear Mr. Denton:

These comments are filed by Geocgia Power on its own behalf and on behalf of Oglethorpe Power Corporation ("0PC") (formerly Oglethorpe Electric Membership Corporation), the Muncipial Electric Authority of Georgia ("MEAG"),

and the City of Dalton, Georgia (" Dalton") in response to a Request by Georgians Against N 21 ear Energy (" CANE) dated October 31, 1978, that the Commission suspend the ccnstruction permits for the Alvin W. Vogtle Nuclear Plant, Units 1 and 2 (" Plant Vogtle"), and hold hearinga to determine whether there is a need for Plant Vogtle. Attached to the Request was a Statement setting forth the facts alleged by CANE in sunport of its Request. These comments are directed to the inaccuracy and inadequacy of GANE's allegations.

The genesis of GANE's Request and the source of most of the allegaticns in GANE's Statement is a petition filed with the Georgia Public Service Commission (the "GPSC") by the Consumers' Utility Counsel of Georgia, Sidaey L.

Moore, Jr. (" Moore"). In his petition, Mcore alleged that Gcorgia Power was proposing to sell interests in Plant Scherer, a coal-fired generating plant now under constructien consisting of four 808 FM units, to Gulf Power Company and Mississippi Power Company at a price substantially less than their cost to Georgia Power. Moore further alleged thet the ir.terests of Georgia Power's consumers would be better served if Georgia Power retained its interest in Plant Scherer and instead cancelled Plant Vogtle Unit 2. Accordingly, Moore's petition requested the GPSC to conduct hearings on the proposed sale of e portion of Plant Scherer to Gu!' Power and Mississippi Power, including Moore's alternative thereto, and to stay any sale of Plant Scherer pending the outcome of those hearings. The GPSC held a preliminary hearing on November 6, 1978, to consider Moore's request for a stay, at which time Georgia Power presented evidence in response to Moore's allegations. GANE attempted to introduce its Statement into evidence at the preliminary hearings, but its admission was denied. Thus, GANE'? Statement was directed at least as much to the GPSC as to this Commission. By letter order dated December 6, 1978, the GPSC denied Moore's request for a stay and decided that it would not rule on its jurisdit-tional authority to grant tha remainder of the relief sought by Moore until afcer further investigation, including hearings. No date has as yet been set for ,

those hearings.

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Georgiti Paer d Mr. Harold R. Denton, Director Of fice of Nuclear Reactor Regulation Page Two January 30, 1979 GANE, like Moore, alleges in its Statement that Georgia Power intends to sell interest in Plant Scherer to Gulf Power and Mississippi Power for approximately $100 per KW less than Georgia Power's costs. Georgia Power has indeed proposed to sell Gulf Power and Mississippi Power each a 13.375%

interest in Plant Scherer. In addition, Georgia Power has already sold MFAG a 15.1% interest in Plant Scherer and Dalton a 1.4% interest, and is currently negotiating a sale of a 30% interest to OPC pursuant to an under-standing dating from January 1975, when OPC purchased an interest in the Edwin I. Hatch Nuclear Plant. MEAG, Dalton and OPC also own undivided interests in Plant Vogtle. Assuming that the currently proposed sales are consummated and no further sales are made, Georgia Power will own a 26.75% interest in the capacity of Plant Scherer in 1987, when the last of the units is currently planned to commence operation.

GANE is incorrect when it alleges that Georgia Power has proposed or intends to sell interests in Plant Scherer to Gulf Power and Mississippi Power at a loss. Georgia Power, Gulf Power and Mississippi Power are all wholly-owned subsidiaries of The Southern Company, and the Public Utility llolding Company Act of 1935 requires that any sale by Georgia Power to Gulf Power and Mississippi Power be made at cost. In this regard, the current estimate of the construction cost per kilowatt of Georgia Power's portion of Plant Scherer is $601 per kilowatt (an estimate contained in a Prospectus published by Georgia Pover on October 18, 1978), not $700 per kilowatt, as GANE alleges.

A final point regarding Plant Scherer is that the proposed transactions with Gulf Power and Mississippi Power are hardly " sales" at all in the usual sense. The effect of the proposed transactions would be for Gulf Power and Mississippi Power to " buy" a part of Georgia Power's investment in Units 3 and 4, which is estimated to be apprcximately $2.9 million by the end of 1979.

Thereafter, Gulf Power and Mississippi Power would pay for their share of the direct construction costs cf these units through completion. Thus, the proposed Scherer trensaction is really a joint venture entered into early in construction with each joint owner bearing its share of construction costs. In this regard, the relationship between the joint owners of Plant Scherer would be essentially the same as the relationship between the joint owners of Plant Vogtle.

GANE further alleges in its Statement that Georgia Power should cancel Plant Vogtle Units 1 and 2 and retain its interest in Plant Scherer because of Plant Scherer's lower capital costs. This allegation obviously ignores the fact that a nuclear facility, such as Plant Vogtle, has far lower operating costs than a coal-fired facility, particularly one such as Plant Scherer which will burn coal with a very low sulfur content. It makes no sense to analyze

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Mr. Harold R. Denton, Director Office of Nuclear Reactor Regulation Page Three January 20, 1979 the feasibility of any particular generating unit by examining construc-tion costs alone, as GAME has done; the critical analysis is the total cost per kilowatt-hour of energy generated from a particular source.

CANE's Statement contains nothing which would indicate that the cost of energy generated from Plant Scherer will be less than the cost of energy generated from Plant Vogtle.

GANE's Statement also ignores the implications of its proposal on Gulf Power and Mississippi Power. If Gulf Power and Mississippi Power do not purchase interests in Plant Scherer, they will require alternative sources of capacity which, unlike Plant Scherer, would almost certainly be more expensive scrubber-equipped coal-fired units. Thus, viewed from a regional perspective, the proposed cost comparison would be between the cost of energy generated by Plant Vogtle end the cost of energy generated by a coal-fired unit with scrubbers. The Atomic Saf ety and Licensing Board heard extensive testimony on this subject in 1976 and concluded that Plant Vogtle was the more economic alternative. There is no reason to believe that a different conclusion would be warranted today.

With respect to the continued need for the capacity and energy from Plant Vogtle, the attached generation expansion plan (Attachment 1) for the combined systems of Georgia Power, OPC, MEAG and Dalton shows that, etcept for the first year of operation of Plant Vogtle Unit 1, system reserves will be well within the 15%-25% range recommended by the Federal Energy Regulatory Commission for a system such as Georgia Power's. These reserve projections assume that Gulf Power and Mississippi Power each purchase a 13.375% interest in Plant Scherer\l). The alternative proposed by CANE - retention of the Plant Scherer capacity and cancellation of Plant Vogtle - would reduce these reserve levels substantially, because cancellation of both of the units at Plant Vogtle would reduce territorial capability by 2200 MW, which is approximately 1,350 FM more than Georgia Power has proposed to sell to Gulf Power and Mississippi Pover. CANE's Statement does not explain how this " lost" capacity would be replaced.

In this regard, even if solar photovoltaic systems were commercially available in the required numbers by the mid-1980s, they could not serve as a substitute for base-load capacity.

Finally, CANE's Statement never considers the costs of cancelling Plant Vogtle Units 1 and 2. The costs of terminating the project are

(~sCOlgiill'OWCfkh Mr, Harold R. Denton, Director Office of Nuclear Reacter Regulation Page Four January 30, 1979 estimated to be approximately $420,000,000. These costs would be in addition to the $305,000,000 already expended on the project. CANE totally ignores the effect which a write-off of over $700,000,000 would have on Georgia Power, OPC, MEAG and Dalton and their customers.

Sincerely,

, 4# M W. E. Fhrensperg6r (

WEE /mb Attachments

Georgia Power 2_.k Mr. Harold R. Denton, Director Office of Nuclear Reactor Regulation Page Five January 30, 1979 Footnote:

(1)

Two load forecasts are currently being utilized for Georgia territorial generation planning activities. Both employ econometric techniques.

One was produced by Georgia Power's Economic Services Department and indicates a 4.6% average annual peak demand growth through 1990 (with significant variations from year-to-year). This is the load forecast used in Attachment 1. A second forecast was prepared by the System Planning Department of Southern Company Services, Inc., an affiliate of Georgia Power, in conjunction with Data Resources, Inc., and indicates a 6.1% average annual growth through 1990 (also with variations). This oad forecast and the resulting reserves are shown in Attachment 2. The SCSI/DRI forecast serves as a check on the first forecast and is used for contingency planning. The load forecasts, generation capacities and reserves shown on Attachments 1 and 2 are for the " Georgia Territory" and thus reflect the combined effects of the loads and capacities of GPC, OPC, PEAG and Dalton -- all as the result of joint planning activities engaged in for several years by these parties in implementacion of this Commission's antitrust license conditions.

WEE /mb

- ATTADWDIT I GEORGIA TERRITORIAL GENERATIO:1 EXP/.NSIO:t PLf.N

%  % RESERVES WITH-YEAR UNITS LOAD (MW)** CAPACITY (MW) RESERVES EPA DER.\TI r '.

llansicy 2 10,213 13,428 31.48 24.47 1978 10,893 14,169 30.02 23.44 1979 Hatch 2 1980 Wallace Dam 11,559 14,502 25.46 19.27 501S' CT's 12,107 14,460 19.44 16.87 1931 -

12,661 15,268 20.59 20.59 1932 (Scherer 1 13,1*/1 15,240 15.92 15.92 1983 -

Rocky Mr. 1,2,3 13,806 16,851 22.06 22.06 1984

• Scherer 2 Russell Dam ,

14,432 18,527 28.3S 28.3S 1985 *Sch :cr 3 Vogtle 1 Russell Dam 1986 Bartletts Ferry 15,045 18,627 23.81 23.81 15,6S9 18,902 20.48 20.43 1937 *Scherer 4 Vogtic 2 16,238 20,017 , 23.27 23.27 198S ,

Goat L :k 16,902 19,949 18.03 16.03 ,

19S9 1990 450 M1 Pumped Storage 17,014 20,369 , 15.64 15.64

• Sales of 26.75*, of Scherer Units 1 through 4 to Gulf G Mississippi.

(Inpact on reserve level begins in 1935)

• • Forecast of Georgia territorial peak demand dated hugust,197S (78K1).

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ATTAGMErlT II GEORGIA TERRITORIAL GFt1FRATIO 1 EXPAt 510:1 PLAtt (C0liTIf;GEliCY) t  % RESERVES WIT:1 UNITS LOAD (mig ** CAPACITY (f@l) RESERVES EPA DERATION YEAR 1978 Wansicy 2 10,182 13,428 31.88 - 24.85 10,893 14,169 30.07 23.50 1979 Hatch 2 11,650 14,502 24.48 18.33 1980 Wallace Da:n 50 M.i CT's 12,418 14,460 16.44 13.95 1981 -

13,200 15,268 15.67 15.57 1982 *Scherer 1 14,031 15,240 8.82 8.82 1983 -

14,923 16,851 12.92 12.92 1984 Rocky Mt.1,2,3

• Scherer 2 Russell Dan 15,364 18,527 16.7D 16.79 1935 *Scherer 3 Vogt)c 1 Russell Dam 16,832 18,627 10.61 10.61 1986 Bartletts FCTTY ,

17,800 18,902 ~ 6.14 6.14 1987 *Scherer 4 Vogtle 2 18,781 20,017 6.53 6.53

~1988 19,765 19,949 0.89 0.89 1989 Gott Rock .

450 Mi Pu:nped 20,744 20,369 -1.85 -1.85 1990 Storage

• Sales of 26.75% of Scherer Units 1 through 4 to Gulf 6 Mississippi.

(Impact on reserve level begins in 1985)

• • SCSI/DRI Forecast, May 1978.

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