ML19270G434
| ML19270G434 | |
| Person / Time | |
|---|---|
| Site: | Zimmer |
| Issue date: | 04/23/1979 |
| From: | Wetterhahn M CONNER, MOORE & CORBER |
| To: | |
| Shared Package | |
| ML19270G433 | List: |
| References | |
| NUDOCS 7906080210 | |
| Download: ML19270G434 (20) | |
Text
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, . ype b 6 os ~a UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of )
)
The Cincinnati Gas & Electric ) Docket No. 50-358 Company, et al. )
)
(William H. Zimmer Nuclear )
Power Station) )
APPLICANTS' SUPPLEMENTAL MEMORANDUM IN SUPPORT OF THEIR MOTION FOR
SUMMARY
DISPOSITION RESPECTING CERTAlN ADMITTED CONTENTIONS I. Preliminary Statement Applicants, The Cincinnati Gas & Electric Company, et al., incorporate Section I of " Applicants' Memorandum in Support of Their Motion for Summary Disposition Respecting Certain Admitted Contentions."
II. Statement of the Case Applicants incorporate by reference Section II of
" Applicants' Memorandum in Support of Their Motion for Summary Disposition Respecting Certain Admitted Contentions."
2337 '25 2906080 AID
3 III. Miami Valley Power Project's Contentions Contention 11 Current data demonstrates that there is no need for the Zimmer plant at this time because Dayton Power and Light's peak de-mand is and will not be sufficient to justify the added power until after 1985.
The Zimmer Nuclear Power Station is owned by The Cincinnati Gas and Electric Company which has a 40% share, Columbus and Southern Ohio Electric Company which has a 28.5% share, and The Dayton Power and Light Company having a 31.5% share. The facility will be operated in accordance with the William H. Zimmer Unit 1 Operation Agreement
(" Agreement") -~1/
which calls for the output to be distributed in proportion to the ownership interest of each of the participants [ Agreement at 2] . Each owner is required to use its best efforts to schedule its undivided ownership share of the available capacity [ Agreement at 7]. CG&E is required, as the operator, subject to plant safety and fuel performance criteria, to operate the facility so as to produce an output equal to the sum of the participants required scheduled generation [ Agreement at 3] and to operate the plant at less than available capacity should one of the owners request less than their undivided ownership share of the available capacity [ Agreement at 2].
1/
~~
A draft dated January, 1979, of the Operation Agreement was transmitted to the Board and parties on January 9, 1979, as response to NRC Question 4 related to financial qualifications. The Agreement as signed on February 22, 1979 was substantially in the same form as submitted.
2337 26
Thus, even assuming arguendo, that The Dayton Power and Light Company did not require any output from the facility until 1985, as alleged in the Project's Contention 11, CG&E would be obligated to operate the facility for the benefit of the other owners; the Project's Contention 11 does not dispute the other owners' need for the power from the facility.
Of course, an adjustment would be made among the parties de-pending on energy usage of each owner (Agreement at 6-9) .
'coreover, inasmuch as the Agreement requires each participant to use its best efforts to schedule output share, even if DP&L had no increase in load beyond its historic peak 1 cad for 1978 (or even in the hypothetical case that its peak would decrease), it would have to adhere to the provision of the Agreement to utilize its output share. Moreover, its self-interest would motivate it to cause it to utilize the energy generated by the Zimmer facility first. For The Dayton Power and Light Company, were the Zimmer Station delayed a year, additional fuel costs of $30 million would be incurred [ Affidavit of Allen M.
Hill at Paragraph 5 (hereinafter " Hill, 1 ")]. The other owners would experience similar costs [ Affidavits of Robert P.
Wiwi at Paragraph 8 (hereinafter "Wiwi, 1 ") and W. Robert Kelley at Paragraph 2 (hereinafter "Kelley, 1 ")]. Thus to reduce its system operating costs, each utility would -
substitute the Zimmer Station for the output from the other stations. Since power produced by the Zimmer Station would displace power produced by the use of fossil fuels, including 2337 27
, oil, these resources would be saved [Wiwi, 18, Kelley, 12].
The demonstrated need for the substitution of the output from the nuclear-fueled unit for fossil-fired units is alone sufficient to justify the licensing of the Zimmer Station.
Nitgra Mohawk Power Corporation (Nine Mile Point Nuclear Station, Unit 2), ALAB-264, 1 NRC 347, 353-4 (1975).
In any event, The Dayton Power and Light Company does, in fact, need its output share of the Zimmer Station to meet its customer's increasing demands. As discussed in the Affidavit of Hill, The Dayton Power and Light Company has estimated its load growth over the next six years using econometric and other predictive techniques [ Hill, 12]. If Zimmer is not on line to meet the summer peak of 1980, the generation reserves would fall to 16% for the summer peak, and 18% for the winter peak which fall below a reserve requirement which is acceptable [ Hill, 13]. These evaluations assume that other units scheduled to begin operation during this time frame, in fact, came on line as scheduled [ Hill, 14]. Thus, DP&L has shown a definite need for its share of the output of the facility.
This discussion is dispositive of Contention 11 as the need for power contention runs only to The Dayton Power and Light Company. However, it may be noted that the generation reserve levels without Zimmer installed for the summer of _
1980 is 11.7% for CG&E [Wiwi, 16] and for the summer of 1981, the values are 16.4% for CG&E [Wiwi, 16] and 18.8% for Columbus & Southern Ohio Electric Company [Kelley, 15].
Installed reserve requirements for Columbus & Southern Ohio 2337 .28
Electric are approximately 5% higher than the other two companies [Kelley, 14]. It may be seen that without Zimmer, required reserves are not maintained. Thus the need for the Zimmer Station is established for CG&E and C&SOE.
For its part, the Project recites that by the year 2000, solar energy will provide 20% of the nation's energy needs.--2/Even if true, it is irrelevant to the issues before the Board. As discussed above, the Zimmer facility will be utilized to meet present demand of the Applicants' customers and increased solar use in the ye~~ 2000 is not a consideration in the licensing of Zimmer. The Project also points to an article in which it is claimed that photovoltaic cells and co-generating engines could be competitive with 3
nuclear power.--/ It is clear from the face of the article that the alternatives proposed, photovoltaic cells and "a specially designed auto engine . . . which produces both electricity and hot water"--4/ could not possibly supply electricity to meet the projected peaks in 1980 or 1981.
The article admits that the initial year which either of such s stems could conceivably be in operation would be 1987.-- Thus, under applicable Commission precedents, both
--2/ Response to Interrogatory 4, Miami Valley Power Project's.
Answers to Applicants' Second Set of Interrogatories dated February 23, 1979. _
~
3/
An Economic Comparison of Three Technologies: Photovoltaics, Nuclear Power, Co-Generating Engines which is contained as Attachment 1 to Miami Valley Power Project's Answers to Applicants' Second Set of Interrogatories.
4/ Id..at 11.
sf g. 2337 .29
these " alternatives" are not viable alternatives to the Zimmer Station and need not even be considered.
5-l It may be seen that s;ch alternatives are based upon the most specula-tive of assumptions. In order for the photovoltaic cells to be at all competitive a drastic reduction in their price is required. It is sheer speculation that such reduction will occur or that technical problems of a grid of such admittedly unprecedented size will be solved, even by 1987. The article points out that the entire industry's present productive capacity of photovoltaic cells is 0.8 Mw per year, thus requiring a 1050 fold increase, merely to replace the Zimmer output.
1/
The assumptions regarding co-generation cannot stand scrutiny. It would require the installation of 56,000 such engines to replace the output of the Zimmer Station.--8/ It is assumed that these engines burn natural gas and presumably that this fuel would be available for the intended use. In this regard, the assumption is made that there would be no fuel cost for the production of electricity, assigning the total cost of the fuel to heat production. However, such assumption completely neglects the fact that the utilities'
--6/ Tennessee Valley Authority (Hartsville Nuclear Plants, Units lA, 2A, 1B and 2B), ALAB-367, 5 NRC 92, 102 (1977), citing, inter alia, Carolina Environmental Study Group v. United -
States, 510 F.2d 796, 800-01 (D.C. Cir. 1975); Long Island -
Lighting Co. (Shoreham Nuclear Power Station), ALAB-156, 6 AEC 831, 855 (1973).
7/ Id. This is based upon 66,667 units to replace a 1,000 Mw central station.
8_/ Id. 2337 ;30
peak load occurs during the summer when residential heat production would not be required. Without pursuing the assumptions and methodology further, it is clear that no viable alternative to timely completion of the Zimmer Station has been. presented.
Therefore, Applicants are entitled to summary disposi-tion and Contention 11 should be dismissed.
97 /
cs3'7 1 1 s I 6
Contention 12 The Project alleges that the Applicants cannot guarantee an adequate supply of nuclear fuel for the plant in question.
The Board construes this allegation to be that Applicants will not have an adequate fuel supply to operate the plant which is sought to be authorized for operation.
The question of the adequacy of the uranium fuel supply for the Zimmer facility is, to the extent that U 038 has not already been purchased for the facility, a generic issue in that the U.S. total uranium resources and U 038 requirements of operating plants, facilities under construc-tion or on order must be examined. This generic matter has been considered and disposed of in a number of NRC proceed-ings, both by licensing and appeal boards. This portion of the motion for summary disposition will, rather than beginning anew, rely on the methodology and results already utilized and approved by the NRC, updating where necessary. In the 9/
Wolf Creek proceeding,- the Atomic Safety and Licensing Appeal Board saw no reason not to accept a similar generic 10 /
determination made in the River Bend proceeding-- with regard to certain aspects of the proceeding relating to uranium supply. Moreover, the Appeal Board has already found the witness used to support the findings in River Bend "was qualified by education and experience to make an informed, _
JL/ Kansas Gas and Electric Company (Wolf Creek Generating Station, Unit 1), ALAB-462, 7 NRC 320, 326 (1978).
10/
Gulf States Utilities Co. (River Bend Station, Units 1 and 2), ALAB-317, 3 NRC 175 (1976) and ALAB-444, 6 NRC 760 (1977).
2337 32
expertjudgmentonthetotalamountofuraniumwhichggall likelihood would be available over the next 40 years."
Even then, the previous findings of the NRC were not taken uncritically. K. K. Chitkara, who is Manager of Nuclear Fuel and Advanced Engineering Projects for CG&E and, as shown in the Statement of Professional Qualifications which is attached to his affidavit, has expertise in matters related to fuel availability and the supply of uranium, has examined the Appeal 3 card and Licensing Board opinions and the underlying bases. In his expert opinion, he has found them to be reliable and conservative. As a result, he supports the findings of the Appeal Board made as discussed in his affidavit.
CG&E has a contract with Anaconda company for the supply of U 038 for the initial core and the first six re-le'ds; following reload 6 and for the remainder of the life of the facility, it is expected that U 03 8 will be obtained on the open market [ Affidavit of K. K. Chitkara at Paragraph 3 (hereinafter "Chitkara, t__")].
In River Bend and Wolf Creek, the record established the number of existing and currently planned reactors to be 236 with a capacity of 236,000 Mw and the resultant requirements to be 1,577,000 of U 038 tons [Chitkara, 11 6, 7]. Current estimates show that U 03 8 requirements would total 1,075,000 tons corresponding to 199,100 MWe (Chitkara, 18]. Correcting [
11/
River Bend, ALAB-317, 3 NRC at 181.
2337 ;33
this estimate for various losses in processing, the require-ments for the currently operating or planned reactors would be 1,134,000 tons. This was based upon an assumption of a transactional tails of 0.2% which is a reasonable one for the forseeable future [Chitkara, 18]. However, even if a transactional tails analysis of 0.3% were used, as was as-sumed in 1975, the requirements for currently operating or planned reactors would be increased only by 20% to 1,361,000 tons [Chitkara, 18]. The Department of Energy's latest estimates of U.S. resources in the reserves and probable resources categories with forward costs of S30 per pound is 1,760,000 tons [Chitkara, 19]. Even making a downward adjustment of 10% to account for mill losses, the U 038 available would be 1,584,000 tons, thus demonstrating the existence of a sufficient quantity of uranium for the Zimmer plant as well as for the other reactors operating or planned, i.e., greater than the 1,361,000 tons requirements.
For its part, the Project apparently relies upon a number of books and newspaper articles to support its asser-12 /
tion that the amount of uranium is not sufficient. It appears that the Project is attempting to utilize the same argument which has been previously rejected by the Appeal Board, i.e., that reliance should not be placed upon uranium resources not as yet shown to exist as a matter of virtual -
~
certainty. The Appeal Board rejected this argument in 12/
Miami Valley Power Project's Answers to Applicants' Third Set of Interrogatories served on April 11, 1979, Response to Interrogatory 4.
2337 .34
River Bend and, after a fresh look, in the Wolf Creek pro-ceeding. There is no new information proferred which would cause this Board to reconsider the NRC's position.
Moreover, the assertion made by the Project that the present contracts for uranium would be breached--15/ is pure speculation and should be given no weight.
The Project asserts that the price of uranium has
" risen dramatically in recent years." With regard to the supply of uranium such a factor would tend to increase the incentive to produce uranium and would increase the exploration for new reserves and thus would be a positive factor in increasing the supply.
The Project states that ERDA (now Department of Energy) was charging $61.30 per Separative Work Unit (SWU) for en-richment and that private commercial enrichment would charge more. This argument is irrelevant to the availability of the uranica resource. This proceeding should not be permitted to become a forum for debate over the role of the government in enrichment. The only question is the sufficiency of the uranium supply for Zimmer. In any event, as of December 30, 1978, the DOE has raised the price per SWU to $88.30. 43 Fed.
Reg. 49831 (October 25, 1978).
13/ River Bend, ALAB-317, 3 NRC at 180-1. -
14/
Wolf Creek, ALAB-462, 6 NRC at 324-5.
--15/ Response at 14, Miami Valley Power Project's Answers to Applicants' Second Set of Interrogatories dated February 22, 1979.
q'77 7C LJJl .dJ
It should be noted that many of the assertions used by the Project to support the lack of sufficient uranium involve supplies and requirements existing outside the United States.
While the Applicants feel that the assertions made regarding world supply and. requirements of uranium made by the Project are incorrect, their study has been limited to the United States and their findings regarding the availability of uranium are based on utilization and availability in this country.
For the foregoing reasons, Applicants are entitled to summary disposition regarding Contention 12, 2337 336 m
6
Contention 13
~
The equipment used in the construction and operation of the plant will be ex-cessively costly and, in effect, beyond the financial capability of Applicants.
Applicants are financially unqualified to 9 operate the plant because of escalating costs. .
In accordance with the requirements of 10 C.F.R.
S50.33(f), and Appendix C to Part 50 and pursuant to the Commirsion's decision in Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2), CLI-78-1, 7 NRC 1 (1978), a licensing board must find reasonable assurance that a uti.'.ity is financially qualified. The Commission's Seabrook decision stresses that such a finding does not mean a demonstration of near certainty that an applicant will never be pressed for funds (7 NRC at 18). It does mean that an applicant must have a reasonable financing plan in the light of relevant circumstances (Id.). As discussed below, the finding of reasonable assurance of financial qualifica-tions can be made.
The first part of the allegation of Contention 13, that the equipment used in the construction of the plant will be excessively costly deserves short shrift. The Zimmer Station is over 90% complete. The completion of the facility will be financed in a manner similar to the remainder of the construction and as a part of the construction program of -
the three owners.
The remaining cost to complete the Zimmer Station is only a small part of the funds to be committed in the con-2337 37
.- . struction budgets of the Applicants over the next five years
[ Affidavit of William H. Zimmer, Jr. at Paragraph 2 (herein-after "Zimmer, $__"), Affidavit of John M. Emery at Paragraph 2 (hereinafter " Emery, 1 "), Affidavit of Paul E. Anderson at Paragraph 2 (hereinafter " Anderson, 1 ")]. Based upon the amount of remaining construction and an analysis of the various sources for construction funds available to the companies, taking into account the financial status of the owners and their previous demonstrated ability to raise capital, there is reasonable assurance that the remainder of construction can be financed [Zimmer, 113-8, Emery, 113-8, Anderson, 113-7].
With regard to construction costs, the Project only states that "[o] ther problems recently discovered by the NRC 16 /
will probably increase those costs even further."-- No specificity is given and no showing is made that the owners will be unable to finance its completion. This portion of the contention has no merit.
Appendix C to 10 C.F.R. Part 50 requires an applicant for an operating license to show that it possesses the funds necessary to cover estimated operating costs, or has reasonable assurances of obtaining the necessary funds or a combination of the two. In addition, an applicant is required to show that it possesses or has reasonable assurance of obtaining _
16/
Miami Valley Power Project's Answers to Applicants' Second Set of Interrogatories dated February 23, 1979, Response to Interrogatory 16.
2337 138
the funds necessary to pay the estimated costs of permanently shutting down the facility and maintaining it in a safe condition. Appendix C continues:
[I]t will ordinarily be sufficient to show at the time of filing of the application, availability of resources sufficient to cover estimated operating costs for each of the first 5 years of operation plus the estimated costs of permanent shutdown and maintenance of the facility in safe condition. It is also expected that, in most cases, the applicant's annual financial state-ments contained in its published annual reports will enable the Commission to evaluate the applicant's financial capability to satisfy this requirement.
The Applicants have already presented extensive evidence on the matter of their financial qualifications. The latest information was transmitted to the NRC on January 9, 1979 with copies to the Licensing Board and parties (hereinafter 17 /
" Financial Submittal").-~ This submittal contains details of costs of operation and decommissioning and sources of revenue to cover these costs, and various submittals to the Securities and Exchange Commission and to rate-setting bodies. This submittal is referenced in the affidavits of the Company regarding Contention 13 and is incorporated by reference herein.
In conformance with the requirements of Appendix C discussed above, information on the estimated costs for the first five years of operation for various plant capacity ,
17 /
Copies of the 1975 annual reports of the Applicants were sent to the Board and parties on March 26, 1979.
2337 ;39
, factors, including a capacity factor as low as 50% was 18/
subritted. -- Considering these costs of operation over the first five years of operation and the capital structure and financial conditions of the owners and recent decisica of 9
The Public Utilities Commission of Ohio, there is reasonable assurance that each owner will be able to pay its share of costs associated with operation of the Zimmer Station [Zimmer, 19, Emery, 19, Anderson, 18].
The costs associated with decommissioning utilized by the Applicants were based upon a report published by the Atomic Industrial Forum (AIF), in November, 1976, entitled, "An Engineering Evaluation of Nuclear Power Reactor De-19/
commissioning Alternatives."-- This study provided cost estimates in 1975 dollars for several decommissioning al-ternatives for BWR plants of both 1160 MWe and 550 MWe sizes. The AIF study concluded that the most economical mode of decommissioning would be either temporary moth-balling or temporary entombment for a cooling period of about 104 years, followed by dismantling and removal of the radioactive structures of the facility. If it is ascumed that a security force will be required to guard a temporarily mothballed facility for the entire 104 year cooling period, then temporary entombment becomes the more economical choice.
For purposes of the cost estimates, used by the Applicants, -
l8/
Financial Submittal, Response to Questions la and lb.
19/ Id., Response to Questions 2 and 3.
2337 .40
it was assumed that such a security force would be required with temporary mothballing. The cost estimates presented are thus based on temporarily entombing the facility at the end of its 33 year life, allowing the radiation levels to decay for 104 years, then dismantling and removing only the contaminated structures. --20/
There are three components of total decommissioning cost: (1) initial entombment cost at the end of the 33 year life; (2) annual surveillance and maintenance costs for the next 104 years; and (3) cost of dismantling and removing contaminated structures at the end of the 104 year cooling p e'riod. The AIF estimates for these three components for an 1160 MWe BWR and for a 550 MWe BWR were interpolated between to obtain the estimates for the 800 MWe Zimmer plant. These estimates, in 1979 dollars, are:
- a. Initial temporary entombment $8,555,348
- b. Total surveillance and mainte-nance for 104 years $7,663,864
- c. Dismantling and removal of contaminated structures after 104 years of cooling $1,645,639 21/
Total decommissioning cost $17,864,851--
The Applicants presently plan on obtaining the funds required for decommissioning the plant by collecting from their customers through annual depreciation charges during 20/ Id. 9,,
csj[ -nl A
21/ Id.
the service life of the facility amounts which will be de-posited with a trustee. The sum of the amounts so deposited plus earnings thereon would be adequate to pay the decommis-sioning costs. Based on a 6% annual inflation rate from 1975 through the. final dismantling / removal of contaminated structures in the year 2116 and a 5% tax-free interest rate on funds deposited with the decommissioning trustee, the annual payments to the decommissioning trustee over the 33 year plant life required to provide the necessary funds for each of the three components of decommissioning, as well as the total annual payment, are:
- a. Initial temporary entombment S 730, 963
- b. 104 years of surveillance and maintenance $ 1,110,584
- c. Dismantling and removal of con-taminated structures after 104 years of cooling S 376,803 Total annual decommissioning fund deposit over 33 year operating 22 lifetime $ 2,218,350--/
This funding plan by the Applicants would require the approval of the Ohio Public Service Commission which has not yet been obtained. However, even in the absence of a plan specifically setting aside funds, based upon the established -
~
decommissioning costs relative to each of the Applicants 22/ Id.
c-;7 .42
financial resources, there is reasonable assurance tnat the Applicants could cover such costs (Zimmer, 19, Emery, 19, Anderson, 18].
The Project's arguments are to the effect that rate 9
increases are nececsary and cannot be assumed "because it would not be justified to pass onto the consumer ineffi-23/
ciency and cost overruns." - While the question of the rates to be charged customers of the Applicants is not a question before this agency, the Commission's Seabrook decision, makes clear that future rate increases may be taken into consideration in a positive finding on the issue of financial qualifications (7 NRC at 20).
In this regard, the Commission has stated that "[a]n-ticipated difficulties in raising funds are relevant to the reasonable assurance determination, but a showing of some potential difficulty would not necessarily preclude that determination, all other relevant factors being taken into account (Id. at 21)." In this case the Project has made no showing of any potential difficulty in raising funds.
Contention 13 has no merit, and the Applicants are entitled to swmmary disposition.
23 / Miami Valley Power Project's Answer to Applicants' Second Set of Interrogatories dated February 23, 1979, Response to Interrogatory 19.
7777 CJJ/ 4}
IV. Conclusion For the foregoing reasons, " Applicants' Supplemental Motion for Summary Disposition" should be granted.
Respectfully submitted, CONNER, MOORE & CORBER Mark J. Wetterhahn Counsel for the Applicants April 23, 1979 2337 344 h
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COUNTY OF HAMILTON ) ! 5/
D AFFIDAVIT OF ROBERT F. WIWI (b $ \ 'e Robert P. Wiwi, being first duly sworn according to law comes forward and states: ,
- 1. My name is Robert P. Wiwi. I am employed by The Cincinnati Gas & Electric Company as Vice President of Electric Operations. In that position, I am responsible for among other duties the formulation of CG&E's long term energy and demand forecast and determination of additional genera-tion capability so as to maintain adequate generating reserve margins. A statement of my professional qualifications is attached and incorporated by reference herein.
- 2. In determining the need for power or additional generating capacity several major factors are involved. The first is the forecast of future customers energy requirements and peak demands throughout the year with major emphasis being placed on forecasting the peak demands in the season likely to produce the greatest annual peak demand. For CG&E the peak season is the summer season because of the large amount of electric air conditioning installe1 by our customers.
- 3. The Cincinnati Gas & Electric Company (CG&E) updates its electric sales and load forecasts annually in 'the spring.
Electric sales are forecast for each class of service fifteen 9'77 LJJI ,
years into the future, the first three years of which are split up monthly by company for shorter term planning and revenue budgeting purposes. The methodology employed at CG&E involves a mix of forecasting techniques. The overall approach, however, is econometric in nature and results in a forecast of annual energy consumption by class of service which in turn derives a forecast of summer and winter peak demands.
- 4. Summer and winter peak loads are derived by applying load research based peak contribution factors to the disaggregated kWh forecast and summing the coincident. peak contributions.
- 5. The forecasted peak loads in the following table reflect an anticipated annual compound growth rate of 4.6%
over the projected peak that could have occurred in 1978 if we had experienced a typical Cincinnati " hot spell." This growth rate is consistent with projections being made by others not directly involved in the electric utility industry but who are interested in the electric utility sector of our economy and its future peak demands.
- 6. Another major factor in CG&E Co. generation expansion plans is the maintaining of a reserve margin of generation in the range of 18-25% at the time of the system peak. This reserve margin is necessary to provide a reliable source of power at peak times even in the event of forced outages of equipment or _
unanticipated electric demands in excess of the forecast. This reserve margin is also required throughout the year to permit 9777 ,,
"JJl 00
. . . the removal of generating units from serv'.ce for purposes of maintenance and inspection.
The following table of data for The Cincinnati Gas &
Electric Company and Subsidiary Companies shows the effect of the Zimmer Nuclear Unit on the generation reserve margins for the next two years.
Summer Total
- Generation Reserve Peak CG&E Reserve less less Year Forecast
- Generation Margin Zimmer Zimmer 1980 3218 3912 21.6 3595 11.7 1981 3352 4218 25.8 3901 16.4
- Generation based on net summer capability.
Without Zimmer Unit #1 being placed in service in early 1980, the reserve margins are not adequate for reliable service to our customers.
- 7. Prudent generation planning dictates that even with the desired reserve margins, some probability remains that a series of coincident forced outages of equipment will necessitate the purchase of emergency power from neighboring systems. If the reserve margin falls below the design range the probability of the need for emergency purchases of power greatly increase both as to frequency and magnitude and conceivably could exceed the amount available. If sufficient power could not be imported into the system the consequences could range from _
(i) our customers being subjected to planned disconnection of service for several hours to (ii) a total collapse of the system or blackout of south-western Ohio. These consequences cannot be permitted to occur.
2337 ;47
The social economic cost and potential costs of damage to the electric supply facilities of the company could approach 100 's of millions of dollars. Therefore Zimmer Unit #1 must be placed in servit:e in accord with its present in service date.
- 8. Not withstanding the foregoint potential consequences of the delay in Zimmer station, the customers of the company would experience substantial increases in cost of energy because the energy that would have been produced by Zimmer would need to be produced by older less efficient coal and oil fired steam equipment and gas turbines as well as through the purchase of energy from others if available, such purchased energy being produced by similar less efficient and expensive generation equipment. An estimate of the fuel and purchase power penalty costs incurred by our customers in 1980 should the in service date of Zimmer Unit #1 be delayed from January 1,1980 to January 1, 1981 is $21,535,570 and using an additional 1,133,896 barrels of oil.
SWORN to before me this day of , 1979.
Notary Public } } [ /'4] My Commission expires .
QUALIFICATIONS POBERT P. WIWI VICE PRESIDENT - ELECTRIC OPERATIONS THE CINCINNATI GAS & ELECTRIC COMPANY My name is Robert P. Wiwi. My9 place of business is Fourth and Main Streets, Cincinnati, Ohio. I am Vice President ~ of Electric Operations of The Cincinnati Gas & Electric Company. I received a Bachelor of Science Degree in Eleccrical Engineering from the University of Cincinnati in 1964. I received a Master of Business Administration Degree from Xavier University in 1969. I also attended an Electric Utility Management Program at the University of Michigan in 1972. I have been employed by The Cincinnati Gas & Electric Company and its Subsidiaries since 1964. I have held various positions in the Electric Department in both the operating and planning divisions. I was Manager of the Electric Operations Department from May, 1972 until May, 1976 when I became Vice President of Electric Operations. I am a member of the Institute of Electrical and Electron.c Engineers, the Association of Edison Illuminating Companies and the Coordination Review Committee of East Central Area Reliability (ECAR). 2337 349 - g
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STATE OF OHIO )
) SS.
L'otam OF F3tANKLIN ) AnPIpAVIT OF W. ROBERT NM W. ROBERT KELIZY. beincy first duly sworn -rding to law comes forward and states:
- 1. My name in E Ecbert.Kalley. I an empicyed by columbus and southern Ohio Electric eny as vica Pra=Mant ~- 21setric operations. In that position, I as resyneih?* for the generation design, operation, and mainhmancer systems operations; and substation operation and maintenance. A statement of my professional qv=15fications is attached and incorporated by reference herein.' -
2 1PS-1 will supply C&SCE with its lowest. incremental cost energy. Fuel cost for energy from 5PS-1 for the, year 1980 is expected to be about 4 A0 =411=/kwh. The next least esp ===4ve ! energy will be from base-load, coal-fired units at a fuel cost i of about 11.50 mills /kwh With IPS-L in service in 1980, total , CASOE fuel costs are smted to be 145.1 mil 1% dollarr. Without 2PS-1, these total fuel costs would be expected to rise to 155.3 M ilion dollars. 2PS-1 is therefore av!=e+=a to reduce fuel costs for C&SOE by 10.2 million dollars in.1989.
- 3. Without ZPS-1 in service,- fuel oil maage by CESOE would -
Probably increase by about 94.000 barrels in 1980 over usage which would be expected with 2PS-1 in service.
- 4. Installed reserve requirements for CESDE are approximately 54 higher than the other two companies. 'the generation reserve 2337 50
. criterion for Cssos is based on the Daily capacity Margins tech-nique re-nded by the ECAR Generation Femrve Panel of dich 2&s0E. da &w.---2sthis procedures a Wr-level of-reliahn ity a r M is d*+a=4M by analyzing daily reserva margins which taka into account daily peak loads and related avai1=hle generating e**=MT-ities. The reli=Miity level used by C&Sor in forecasting reserve requirenants-in-based-cn tha.aost. receni sevan year system perform-ance which- portrayed a systen acceyable r=lt=hility level. For this report, required installed reserve lerals are expressed. as a percent of peak load es===f.
- 5. Fithet ZPS-1 for years 1980 and 1981, CsSOE's profwi.ed inst =11*a ruserve would detariorate from a level of 34.5%'in 1979' to 28.8% in 1980 and to 18.81. in 1981. No new units are planned.
by CaSOE during this time fr===.
- 6. The above projected reserve levels are based upon the most recent CESoff load forecast, which i=11e*+=s anticipaW mwnewt-and. winter peaks for 1980 and 1981 as listed below:
Snnsnar Winter Peak Demand OW) Peak Demand, DGi) 1980 2121 3026 1981 2219 2Gda _
. The above forecast includes the assumption that the City of Columbus -
would have their proposed generating station in operation for the winter season of 1981. If this project would not meet this schedule, then the forecasted C&SOE winter peak Am==mi in 1981 would increase to 2126 MN. 7
- 7. The basic methodology used for th.e CESOE load forecast is econometric modaling. Economic and demogetM e data was utilized in multiple regrassion. equations to forecase emergy @ for -
the three major customer sectors and to forecast sammeer and winter peak demanan. An analysis of load factor is also !ac+g.ted into th. pros eeson er p x a-na...
~
f. SWOIB to before me this day of ,1979 sotary a se ny ec i son .xp.tre. . 2337 A2 m 6
QUALIFICATIONS W. ROBERT M m - VICE PRESIDLTP - ELECTRIC OPERATIONS
. COLUMBUS AND SOUTP.sivi OHIO MMRIC COMPANY 9
My namer is W. Robert Belley. My bu=iname address is.215
- North Front Street, Columbus, Ohio 43215. I am Vice President -
Electric- operations for the Colunhas and Southern Ohio Electric cosspany. In that position, I am responsibis for generstion desdgn, operation, and maintenancer system operations; and substation operation- and maintanance. I attended the College of Engineering at Ohio State University
~in Columbus, Ohio and received a B.S.E.L Degree in 1962. In addition, I attended the Public Utilities Executive Tr* Nag course at; the university of Mir hisan Graduate Business- School in.1978. --
In 1962, I was hired as a Substation- Engineer by Columbus and Southern Ohio Electric Company. I was promoted to Assistant. Supiser of ' rest Pr w'ures in 1966; and in 1968, became Supervisor of Test - - Fwcedures. I was promoted to Direct.cr of System Operations Analytical Area.in 1973; and. in 1974 was promoted to Manager of System Operations. I was elected vice President of Electric operaMm in 1976 , I an a member of the Institute of- Electrical and Electronic _ Engineers; the East Coast Area Reliability, Coordination and Review C=4tteer the Ohio Valley Electric Corporation, Operating Wittees The Ohio State University, Mechanical Engineering 5dvisory Wttee; the Electric Power Research Institute, Advisory @amittee of Fossil ic Institute, Fuel and Advanced Systems Divisions and the Edison L ,Eleb,c 53 -
. srATz or caso )
) sa axa77 or w m )
Arr2mvIr or Au.z:9 M. !r32.L ,
- 1. E2eo M. Hill. being July cautioned and svern, deposet saa says that.
/ he is Menegar af Maaning for The Daytos Power acd Light Caseeny and, as such,
/
' sa r=pensisi for the p-4-= .i rotw semerassom taenitta. == vall == the forecast of facare peak densed and energy requirt=aa**. A.stacament of ur professional itselificatione is artmekd and incorporated by reference hersin.
The forecast of the d====J= is based upon econometric mdeltag wha 4gnes which were developed and tested foe sales by cuaromer class as well as for both summer . med winter peak demand. he forecast, prepared in late 1978 ves nede based upon long rus acomonic expectattaas. ,
- t. The felldat are the prolacted dessads timesh 198h 3G8 ESC WIETER 30! Mt 1980 2192 1980-47 2438 1981 2266 1981-82 2553 1982 2349 1982-83 2669 1983 2422 2983- M 2733 1984 24M 1984-85 2895 1985 25 % 1985-86 3006
- 3. Based on these profecticos, if the Lammer Staties is not available for
- service in the summer of 1980, The- Deytsa Power and Light Compaar would have 36%
. reserve margin. Witbeec the Zimmer Statico in service by the following vinter (1986-1981), am lE reserve margin trould result, These reserve istgins do not provide acceptable lesels of reliability. -
- 4. It should be aszed that thsas margins assume that East Bend Unir so. 2-vin se on line se sched.1e4 sn January er 19ai, vsed any alippene et thir unit the reserve martfas will be ivrth&r reduce
- 3,,
w 7 :54 9
i
- 5. If the Zimmer Stat! a vere delayed one year, additional fuel costs of
$30 million would he incurred.
- 6. Therefore. the timely cospletica of 21:swer Statien is in the best interest of h Dayton hover and Light Ccqany and its cus:osers day of ,1979.
Seats to before me this. Rosasy PsM1e a, -4.-4, wm . 2337 355 4 e e
QUAuricAITOxs Ann L EnL wawarst - p awnc TE DATTON POWZZ_ A3tn uGHT CDMFANY My name is Mies & Bill. 2tr business address is Courthouse Plaza S.R., F. O. Box 1247. Dayton, Ohio 45401.. I am the Maanger of Planning and, as ach am responsible for the yt-in of future generation, tr==4 ==4 aa, ansL dis:ributico facilitias, as well sa the forecasts of - - - future poet densad and energy requir=*=en. I racsived a Radafac of Science Degree in Electrical Engineering aos a Mnstar of susiness. Wmistration in 1967 and 1972 sWively, from the University og Daytea sines that time 1 have been coat f--sty employed by The Deytce twver and Light company la vartove positions ivi-ISgt Electrical Ensinoer, System Planaias Engineer, Yaluaice Engineer, Coordinator et 3ata Desigs, Supervisor of Get Services, and most recently, Manager of P' -'*!. 300RORIG01 2:37 :56
STATE OF OHIO )
) SS.
COUNTY OF HAMILTON ) AFFIDAVIT OF KRISHAN K. CHITKARA KRISHAN K. CHITKARA being first duly sworn according to law comes forward and states:
- 1. My name is Krishan K. Chitkara. I am employed by The Cincinnati Gas & Electric Company as Manager, Nuclear Fuel and Advanced Engineering Projects. My responsibilities in that position include nuclear fuel procurement for the Wm. H. Zimmer Nuclear Power Station. I have been involved in matters related to the availability and supply of uranium for The Cincinnati Gas & Electric Company. A statement of my professional qualifications is attached and incorporated by reference herein.
- 2. Project's Contention 12 reads:
The Project alleges that the Applicants cannot guarantee an adequate supply of nuclear fuel for the plant in question. The Board construes this allegation to be that Applicants will not have an adequate fuel supply to operate the plant which is sought to be authorized for operation. I have the following response to the above contention of the Project: -
- 3. The Applicants have a contract with Anaconda Company for the supply of U308 for the initial core and the first six reloads. Following reload 6 and for the remainder of the life of the Zimmer Station, it is expected that U308 will be obtained on the open market. 9 cs37 :_57
. . 4. The adequacy of the uranium supply for the Zimmer Station depends upon the total uranium resources and the U308 requirements of the nuclear plants operating, under construction and on order in the United States. As discussed below, con-sidering the available resources and requirements, there is - - reasonable assurance that sufficient uranium will be available to fuel the Zimmer Station over its operating lifetime.
- 5. The matter of uranium supply and requirements has been already considered in a number of previous NRC proceedings, most notably the River Bend and Wolf Creek decisions. Inasmuch as the issue is a generic one, for my analysis regarding sufficiency of the supply of uranium I have used the methodology utilized in those proceedings, updating the information, as necessary. Even though the uranium availability matter was reviewed and accepted by two different licensing boards and the NRC's Atomic Safety and Licensing Appeal Board, I have not accepted the methodology or assumptions uncritically. I have reviewed, as appropriate, the underlying testimony and can state that, in my opinion, the methodology and assumptions utilized lead to conservative statements of the requirements and availa-bility of uranium.
- 6. In the Wolf Creek and River Bend proceedings, total uranium resources in the U.S. were evaluated in relationship _
to the lifetime requirements of the 236 reactors operating, under construction, or on order as of March 31, 1975. This 2 37 .58 1/ Kansas Gas and Electric Company (Wolf Creek Generating Station, Unitl), ALAB-462, 7 NRC 320, 326 (1978) and LBP-77-3, 5 NRC 301 (1977). Gulf States Utilities Co. (River Bend Station, Units 1 and 2) , ALAB-317, 3 NRC 175 (1976) and ALAB-444, 6 NRC 760 (1977) and LBP-75-30, 2 NRC
population of 236 reactors having a total electrical capacity of 234,900 megawatts, included the Zimmer Station Unit 1.
- 7. Assuming no recycle, and 0.3% tails assay, and accounting for process losses in conversion (0.5%) and burnup uncertainty (5%) in the fuel utilization, the total lifetime U308 requirements for 236 reactors were calculated to be 1,577,000 tons. At that time it was shown that 1,980,000 tons would be available from reserves and probable resources.
Making a downward adjustment of 10% of mill losses, 1,782,000 tons of U308 would be available. It is clear that 1,577,000 tons required for 236 reactors was within the total of 1,782,000 tons available within the U.S. as predicted by the Department of Energy at that time.
- 8. The data presented above regarding U308 requirements has been updated as a result of a decrease in the reactor popu-lation since 1975. More current estimates show that the lifetime requirements for 199,100 megawatts of electric capacity as of August, 1978, amount to 1,075,000 tons for the no recycle and
! Wolf Creek, ALAB-462, 7 NRC at 323 and River Bend, ALAB-317, 3 NRC 175 (1976). .
3 / Table 23a of the NRC Staff Testimony on Uranium Fuel Effi-ciency Present by P. M. Wood and addenda thereto. Following Tr. 2041 in the River Bend proceeding (hereinaf ter " Wood at -
") as approved by the Appeal Board in ALAB-444, 6 NRC at -
788-90. Wood at 23 and River Bend, ALAB-317, 3 NRC 175, 181 (1975). See also River Bend, LBP-75-50, 2 NRC 419, 453 (1975). 5/ Wood at 23 and Wolf Creek, ALAB-467, 7 NRC at 325-6. The enrichment tails assay was assumed to be 0.3% in calculating the required amount of U308 2 37 359
n 4-a 0.2% tails assay 5l I have concluded that this tails assay is a reasonable value for the foreseeable future. Correcting for process losses in conversion (0.5%) and burnup uncertainty (5%) in the fuel utilization in the same manner as done previously, the requirements would be 1,134,000 tons. Even if a tails assay of 0.3% were used, I have calculated that the requirements would be increased only by 20% to 1,361,000 tons.
- 9. I have also taken into account more recent information related to uranium supplies in the United States. The Department of Energy's estimates of U308 resources (with forward costs of
$30 per pound) within the United States as of January, 1978, amount to 1,755,000 tons, considering only the reserves and 7/
probable resource categories 7 Making a downward adjustment of 10% to account for mill losses, as was previously done in River Bend, the amount of U308 available would be 1,580,000 tons. It- should be observed that the requirements of 1,134,000 (and even 1,361,000 tons required if the conservative assumption of 0.3% tails is utilized) for the updated reactor population is well within the total of 1,580,000 tons available within the United States. As the Zimmer Station Unit 1 is included in this updated reactor populatica, I can conclude that a sufficient quantity of uranium will be available to operate the plant over its lifetime. _
~~
6/ " March 1979 - A Reassessment of U.S. Breeder Reactor Policy," Atomic Industrial Forum at 8 (copy attached) . 7/ Id. at 9. , _8/ Wood at 23.
5_
- 10. Thus, Contention 12 has no merit.
ZA k . Ch* SWORN to before me is M day of $st / , 1979. u
' No ry Public / .a,
[ ,e/ ,,,,..... I'~' n My Commission expires .
,/
; DANIEL W. KEMP, Attorney at Law g- ,
1 Notary Public, State of Ohio (,
,, ./
g Q-mi==ian has no expiration date
- e mm a.c.
._....~..
- - _ .2337361 6
am- =
QUALIFICATIONS KRISHAN K. CHITKARA MANAGER - NUCLEAR FUEL & ADVANCED ENGINEERING PROJECTS THE CINCINNATI GAS & ELECTRIC COMPANY My name is Krishan K. Chitkara. My business address is 4th & Main Streets, Cincinnati, Ohio. I graduated from Punjab University, India in 1963 - with a Bachelor of Science (Honors) in Physics. I received my M.Sc. (Honors) in Physics from Punjab University in 1964. I served as Lecturer in the Department of Physics, Kurukshetra University, India for two years before coming to the U.S.A. to pursue graduate studies. I received my Ph.D. in Nuclear Engineering from the University of Cincinnati in 1972. I joined Southern California Edison in August, 1972, as Associate Engineer in the Fuel Supply Department. In this position, I gained experience in the areas of nuclear fuel contracts and economics. In March, 1973, I was appointed Group Leader of the Core & Fuel Analysis group, where I was responsible for core operational analysis and fuel management of San Onofre Unit 1. In addition, tha group performed nuclear analyses for San Onofre Units 2 & 3. In March, 1974, I joined General Electric Company as a Senior Engineer in the Nuclear Energy Division. I was primarily involved in the nuclear design of BWR-6 and retrofit of various advanced concepts to earlier product lines. In February, 1976, I joined The Cincinnati Gas & Electric Company as Head of the Nuclear Fuel Group. In this position, I was responsible for nuclear fuel procurement, contract administration, and economics. In addition, I was involved in the development of nuclear analytical capability in the areas of core management, fuel performance, and safety analysis. I directed a project dealing with long-run incremental costs of electric supply and was involved in the generation planning studies performed within the Company. In September, 1978, I was appointed Manager, Nuclear Fuel & Advanced Engineering Projects. In this position, I am responsible for managing activities in the areas of nuclear fuel, nuclear systems technology, generation planning, and coordination with the Electric Power Research Institute (EPRI) . - I am a member of the American Nuclear Society. In addition, I am a member of the Edison Electric Institute's Nuclear Fuels Committee and EPRI's Safety & Analysis Task Force. 2337 362
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s TABLE 2 URANIUM REQUIREMENTS TO MEET CUJ1 RENT COMMITMENTS (8/18) Capacity U30s Requirements, tons' Recycle U & Pu Recycle U No Recycle Operating 61,400 idWe 176,300 223,200 277,300 Under Construction 104,000 MWe 364,900 462,100 661,000 On Order 43,700 MWe 149,200 190,100 236,100 Total 199,100 MWe 679,400 866,400 1,076,000
- Based on meer operating life and 60% cepecity factor (18 fpy),0.216 talle.
N La . U4 CO O CD N e l
W 00 7th/UMU'Vy Additionally, while I have indicated that the analytical techniques which are used to produce nuclear fuel designs are highly sophisticated and supported by a large body of experimental data, uncertainties in burnup of 5% and in spent fuel compositions of 1-3% could be expected. As I indicated in my testimony, these uncertainties could increase uranium requi ts for the case with uranium recycle by 4%, 3% due to burnup uncertainty and 1% due to y spent fuel composition uncertainty. Thus, for conservation due to these uncertainties, uranium requirements should be adjusted further upward by 4% resulting in uranium requirements for the uranium recycle case of 1,328,000 short tons U38 0* For the case of no uranium recycle, the adjustments to requirements are somewhat different. Beginning with the basic ERDA forecast numbers of 3 wp
- 1,240,000 short tons U38 0 , this is adjusted upward by-39%, a conservative estimate based on my testimony of the impact of not recycling uranium.
I, 4 9 4, 2 d b x Thus,1,C"',200 short tons would be required. But further adjustments need to be made. A 0.5% increase adjusts for the omitted conversion step in the ERDA forecast. And a 5% increase is needed for design . burnup uncertainty. Note that for the non-recycle case, neither the fuel composition uncertainty nor the U-236 effect is of significance as it is assumed that spent fuel is discarded. Combining these effects, 4572]MO4 uranium requirements for the non recycle case come to L ~^^ ^^^ short tons U0. 3g .
)
san g PE2 givee B@ W 9,,3
- x 003
To place these numbers in proper perspective. they should be compared to the quantities of uranium available. Mr. Patterson has testi.fied to a ~ uranium availabilit)sof 1,980,000 tons of U38 0 that can be mined. These resources must be adju'sted to affect losses in material at the mill site where the ore is reffited to yellowcake. Mr. Wilde, in his testimony, has indicated that mill losses may conservatively be taken at 10%. Hence uranium available consults of 1,782,000 short tons of U 3 B* Therefore, after conservative adjustments have been made at each step of the fuel cycle, as regards both uranium requirements and uranium require-ments for both the recycle and non-recycle case are below uranium resources available, indicating an adequate fuel supply for the lifetime of the River Bend Units. These results are most clearly sumarized in It should be emphasized that these requirements estimates C Table 23 below. for both the recycle and non-recycle of uranium represent the combination of many conservatisms considered together.
~
t 2333 004 6 b
3
.y ,
Table 23a " Uranium Requirements Recycle Non-Recycle 9 ERDA Forecast-(.Sitort tons U3g0 ) T,240,000 -- 20.5% Adjustment for non-recycle (None) 1,494,20P Conversion Adfustment (T/Z percent). T,246,000 . T.50T,700 U-23E Adfustment (ZA percent) T,276,000 (None) Burnup Uncertainty'
, (5% non-recycle) T,3TE,000 T,577,000 (3% recyc1e)
FueT Composition Uncerta.inty (T%). T,328,000 (None) , TotaT Requirements - - l:
~
-(Short tons U gg o )s , ,,
T,328',000~ T,577,00Ct Tatar Urantunt AvatTabTe' 1
. after M11T Losses T,787,000 T,782,006 (Short tons U3 0g,)
Excess Uraniunt AvaiTable (Short tons U3g 0) 454,000 205,000 s 2338 005 I .
~
l i s .
2 TATE OF OHIO )
) SS.
COUNTY OF HAMILTON ) AFFIDAVIT OF WILLIAM H. ZIMMER, JR. WILLIAM H. ZIMMER, JR., being first duly sworn according to law comes forward and states:
- 1. My name is William H. Zimmer, Jr. I am employed by The Cincinnati Gas & Electric Company as Vice President and Treasurer. In that position, I am responsible for the formulation of CG&E's financing program (including the sale of securities), cash management and control and various financial studies. A statement of my professional qualifications is attached and incorporated by reference herein.
- 2. The Cincinnati' Gas & Electric Company and subsidiary companies have budgeted $1,077.8 million for construction expenditures in the period 1979-1983. Included in this budget is $32.9 million, representing CG&E's share of the expenditures necessary to complete Zimmer Station. Thus, only 3.1% of CG&E's five-year construction budget is for the completion of Zimmer Station.
- 3. CGGE obtains the funds necessary to construct new facilities from internal sources and from the public sale of .
securities. Over the last five years, CG&E obtained 39% of its requirements for its construction program from internal sources. 2333 006
- 4. Rates increases will be sought as required and justifiable. Section 4909.15 of the Ohio Revised Code provides, in part, that The Public Utilities Commission, when fixing rates, shall determine:
(1) The valuation of property used and useful in- . _ _ - _ _ . _ _ _ rendering the public utility service, plus an allowance for. working capital and at its discretion, permit an allowance for construction work in progress, (2) a fair and reasonable rate of return to the utility, (3) the dollar annual return to which the utility is entitled by applying the fair and reasonable rate of return determined in 2 above to che valuation determined in 1 above, and (4) the cost to the utilit.y of rendering the public utility service for the test period.
- 5. CG&E's construction progran cannot be totally financed with internally generated funds. CG&E expects to obtain the remainder of its construction cash requirements from the sale of securities. On March 21, 1979, CG&E sold $100 million of First Mortgage Bonds, and the proceeds will be used to partially finance its construction program. Moody's rated these Bonds Aa.
- 6. Additional securities (bonds, preferred stock and - -
common stock) will be sold when necessary in order to obtain the funds required and in a proportion to maintain CG&E's strong, capital structure. 2338 007
- 7. It is my professional opinion, considering all the above factors, that CG&E will be able to finance its portion -
of the construction costs for the Zimmer Station.
- 8. Extensive updated financial information related to operation and decommissioning was submitted to the NRC on -
January 9, 1979, with copies to the Licensing Boerd and parties. As that submittal applies to CG&E, I incorporate it by reference herein.
- 9. I have reviewed the costs of operation of the Wh. H.
Zimmer Nuclear Power Station Unit 1 over the first five years as presented in response to Question 1.a of the January 9, 1979 submission, and the costs of decommissioning discussed in response to Questions 2 and 3 in that submission. Based upon my knowledge of the capital structure and financial condition of the Company and recent M icns of the Public Utilities Commission of Ohio, there is reasonable assurance that the Company will be able to pay its share of costs associated with operation of the unit and decommissioning costs. SWORN to before me this day of , 1979. Notary Public My Commission expires . 2333 008
QUALIFICATIONS WILLIAM E. ZIMMER, JR. VICE PRESIDENT AND TREASURER THE CINCINNATI GAS & ELECTRIC COMDANV - My name is William H. Zimmer, Jr. My business address is 139 E. Fourth Street, Cincinnati, Ohio 45202. I am Vice President and Treasurer for The Cincinnati Gas & Electric Company. In that position, I am responsible for the formulation of CG&E's financing program (i~ncluding the sale of securities), cash management and control and various financial studies. In 1952, I received a Bachelor of Science Degree from the Ohio State University, School of Commerc% Accounting Sequence. For a short period of time I worked for the General Electric . Company in their Accounting Department after which I was hired by The Cincinnati Gas & Electric Company as a Staff Assistant. After holding various positions in the Accounting and Treasurer's Departments, I was elected Assistant Treasurer of CG&E and its subsidiary companies in 1959, Treasurer in 1963, Secretary and Treasurer in 1975, and Vice President and Treasurer in 1978. I am a member of the Executive Committee of the Edison Electric - Institute Finance Committee and a member of the Cincinnati Society of
~' ~
Security Analysts. 2338 009
STATE OF OHIO )
) SS.
COUNTY OF FRANKLIN ) AFEIDAVIT OF JOHN M. EMERY JOHN M. EMERY, being first duly sworn according to law comes forward and states:
- 1. My name is John M. Emery. I am employed by Columbus and Southern Ohio Electric Company as Vice President and Treasurer. In that position, I am responsible for C&SOE's financial planning, sale of securities,. cash management and control, contacts with investors and various financial studies and analyses.
- 2. Columbus and Southern Ohio Electric Company has budgeted cash expenditures of $501 million for construction of electric facilities in the period 1979 - 1983. Included in this budget is $11.3 million, representing C&SOE's share of the expen-ditures necessary to complete Zimmer Station. Thus, only 2.3%
of C&SOE's five-year construction budget is for the completion of Zimmer Station.
- 3. C&SOE obtains the funds necessary to construct new facilities from internal sources and from the public sale of securities. Over the last five years, C&SOE obtained 17% of _
its requirements for its construction program from internal sources.
- 4. C&SOE applied for a permanent rate increase on March 1, 1979 which, if granted, will provide 0126 million of 9'?O LsJO
additional revenues annually. Additional rate increases will be sought as required and justifiable. Section 4909.15 of the Ohio Revised Code provides, in part, that The Public Utilities Commission, when fixing rates, shall determine: (1) The valuation of property used and useful in rendering the public utliity service, plus an allowance for working capital and at its discretion, permit an allowance for construction work in progress, (2) a fair and reasonable rate of return to the utility, (3) the dollar annual return to which the utility is entitled by applying the fair and reasonable rate of return determined in 2 above to the valuation determined in 1 above, and (4) the cost to the utility of rendering the public utility service for the test period.
- 5. C&SOE's construction program cannot be totally fir.anced with internally generated funds. Funds not generated internally will be obtained from the sale of securities to provide the remainder of the construction cash requirements. C&SOE expects to sell common shares and first mortgage bonds in the latter half of 1979, the proceeds of which will be used for the construction program. C&SOE's bonds are rated A by Moody's.
- 6. Additional securities (bands, preferred stock and _
common stock) will be sold when necessary in order to obtain the additional funds required and in a proportion to maintain C&SOE's strong capital structure.
?333 011
- 7. It is my professional opinion, considering all the above factors, that C&SOE will be able to finance its portion of the construction costs for the Zimmer Station.
- 8. Extensive updated financial information related to operation and decommissioning was submitted to the NRC on January 9, 1979, with copies to the Licensing Board and parties.
As that submittal applies to C&SOE, I incorporate it by reference herein.
- 9. I have reviewed the costs of operation of the Wm. H.
Zimmer Nuclear Power Station Unit 1 over the first five years as presented in response to Question 1.a of the January 9, 1979 submission, and the costs of decommissioning discussed in response to Questions 2 and 3 in that submission. Based upon my knowledge of the capital structure and financial condition of the Company and recent decisions of the Public Utilities Commission of Ohio, there is reasonable assurance that the Company will be able to pay its share of costs associated with operation of the unit and decommissioning costs.
%~ ~vs V1 vva tw e f
SWORN to Defore me this [ day of 8Bj],1979. r
! r
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Notary Public 9338 0l2 My Commission expires M- o2c,7 - [ k . SANDRA L -WITTE NOTARY PUBUC STATE OF CH:0 MY COM_g5510N EXP.lRES EB.22,1984 3-
QUALIFICATIONS JOHN M. EMERY VICE PRESIDENT AND TREASURER COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY My name is John.M. Emery. My business address is 215 North Front Street, Columbus, Ohio 43215. I am Vice President and Treasurer for Columbus and Southern Ohio Electric Company. In that position, I am responsible for C&SOE's financial planning, sale of securities, cash management and control, contacts with investors and various financial studies and analyses. In 1942 I received a Ba-:'alor of Business Administration degree from Western Reserve University. I also attended Harvard Graduate School of Business Administration in 1943. From 1945 until 1952 I was employed by the auditing firm of Arthur Andersen & Company. I was employed by C&SOE in 1952 and performed various functions in the Accounting and Treasury Organization until 1963 when I was elected Assistant Treasurer. I became Assistant Vice President in 1968, Treasurer and Assistant Secretary in 1973, Treasurer and Secretary in 1976, and Vice President and Treasurer in later 1976. I am a member of the American Institute of Certified Public Accountants, the Edison Electric Institute Financial Committee, and Financial Analysts Federation. _ 2338 013 ,
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COUNTY OF N0tricQEtr ) AFIDAITIT & Put I. L'GEZ505 FAUL 2. AWM% bedsg first duly sworn seccrding to Imc c:mes forused,med statoes
- 1. My tame is Paul E. Anderson. I an emplored by The Dayton. Power asd Light Company as Treasarr. In c5at position I sa responsible for the formulation of the compeop"s fina=Hng progras (ine3uding the sale of securities), cash maamgemese and. control and various flaancial studies. A statement of my pr9fessional ges1111 cations is aturW and incorporated by reference berein.
2 Ther Smytea Power and L2ght C.aspany haar estfasted. its construction. E g Mtares to be $1,014 ai111o2 for 1979 1983 Included in thin bedsst.is $29 mi131ea ice the cospany"s. skara of the expenditures seeme<=cy to , emplete.gsamer Station. repressattag es)y 2.9% of the fire-year construction bedget. 3 The Campeay obtafss the funds necessary to construct new facilitiae friss. internal sources and from external scorees which fWh- the Poblic sale of securities. Over the last five years, tbs .cnepany nke=<aad 20% of its requirements far its. e,estruction program fream internal soszcas.
- 4. Om flatch 9,1379, the Company was greeted a perannant rate increase of .
g.At:17 $10.5 minion.amamally over the then existing emergency level of ratah the Campsey win seek. add'*** rata increases as required and justif+ahie. _ section 4909.13 6f the Olda Isaised Cbde provides. Is part, that 1he Public , Utilities Commission, when firing rates, s&sil detarsiner 2338 014
(1) The veht2cn of prcperty v. sed and vaeful in rendering the public utility service, ice.luding an aHcvance for vorilcc capital and. at its discret.!on, an alleusace for co=structica.verk fa progress. (2)- a- fair sad-fendaabla rate of return to the urtlity,
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- 03) the dollar ansaal retura es which the stility is-stit3ad by applying; the fair sad. reascoable rate of retwa determined in 2 above to the valuation determined in-1 above, and
(&) the cost ts the utility of readerir.g the public utility service for-the -t-est period. .
- 5. The Campeay's construction program cannot be totally finnocad with incarnally generated. funds. The canapny aspects to oecain the remainder of its construction cash requircaents frca caternal sources including the sa3e of escurities h ====ry ta- obesin the funds required.
6 It. is.sy profesafonal.opinien. considering all. the above factorr, thar - the.CampenT will he able to ff===ra its portina of the cosacruction costs for the Zimmer Station. 7.- Extensive e n d f W i=1 inducastion related tn operstice and fu :- *=4=_ was sanattted te ths SEC os January 9,1979. with copies to the liMr= '30 erd and portfas As tiac submittal applies a the Company,1 incorporsse it by reference herei.h K I have zarieved the costs of operacima of' the Ms. H. Zimmer Nuclear Power Statsam Daft 1 aver the first five years as presented in respones to tpsestian 1.a of the January 9.1979 ==h=4aaron, and t&s costs of hemianing _ ds e., to re.,o to e-te 2 a.i 21. that - =< - an . the above factars and orknouladte of the capital structure and finaaedm1 2:33 015
I condition of the Compa.- y and recus:. decisicas of The h.blic Utilities Comadssdoo of Ohio, it is reasonable to aszcac that the Co:rpany will be abla to pay its
, share of coots associated with operatics af the cmJt. and decem'tocing costa.
SWRE to hfore me thss day =C _ < lYlh Estasy hblic My Coundssfom empires 2338 016 6 et
QUALITIC17:055 P A D . R . 2 ;D I?.S lCLi WM T1i? DATTc5 F0Et A%D LICHT COMPA5Y Mir name is Paul R Anderson !!y busim address is Courthouse Flaan S.1L, F. 0 30s 234 Dayton, Ondo 43401. I as the Tsensurer of The Daytes Power and Light Company's f *,aar tsg program UncludSa5 the sale of securities) cash sonessenet and control and var $ous f1Mm3 . acudias.. of "d=$ 5c$ance degree 1x 1963 and 1954,. TvHve3y, from the University of Illinois . Free.1944 untit 1978 ezesyt. for tuo years of 1 military ser% I mes. amplored. by Arthur Anderson 6. C%. so. faterpationaI penise accomating h in the puhtic or.111cy audie divistee, workins in ther waas of ihmetal medits, xata proceedings, f 4-4m and W-1 matters. I joined The asytaa Power ind Light Company as Transarar in June 197L I en a certified public acco==*==t and a asaber of the Ameriesa Institute of Cartified Public Accountants, the Ot fa Society of certified Publie &=*a==*==** W the 7tmaneial Ezesseives. Ins **t=em. 97IQ uusu ni, . UI/ o 9 O
s*.j, NRC PUBLIC DOCUMENI ROOM d S UNITED STATES OF AMERICA ' g$ NUCIM R REGULATORY COMMISSION ll- g[j, - y9% e y h $ *> In the Matter of ) j- ,p The Cincinnati Gas & Electric Company, et al. ) Docket No. 50-3 2);- g
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(William H. Zimmer Nuclear ) , Power Station) ) CERTIFICATE OF SERVICE I hereby certify that copies of the following documents:
- 1. " Applicants' Supplemental Motion for Summary Disposition"
- 2. " Applicants' Statement of Material Facts As to Which There is no Genuine Issue to be Heard"
- 3. " Applicants' Supplemental Memorandum in Support of Their Motion for Summary Disposition Respecting Certain Admitted Contentions" all dated April 2'3, 1979, in the captioned matter, were served upon the following by deposit in the United States mail this 23rd day of April, 1979:
Charles Bechhoefer, Esq. Richara S. Salzman, Esq. Chairman, Atomic Safety and Chairman, Atomic Safety and Licensing Board Licensing Appeal Board U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission - Washington, D. C. 20555 Washington, D. C. 20555 _ Dr. Frank F. Hooper, Member Dr. Lawrence R. Quarles Atomic Safety and Licensing Atomic Safety and Licensing Board Appeal Board School of Natural Resources U.S. Nuclear Regulatory University of Michigan Commission Ann Arbor, Michigan 48109 Washington, D. C. 20555 2:38 018}}