ML19276H131

Applicants' Prepared Testimony Re Cost Benefit/Analysis for Public Hearing in Harrisburg,Pa.Tables Re Annual Cost of Facility & Hours of Operation Per Year Encl

ML19276H131
Person / Time
Site:	Three Mile Island
Issue date:	10/25/1973
From:	METROPOLITAN EDISON CO.
To:
Shared Package
ML19276H123	List: ML19276H122 ML19276H124 ML19276H125 ML19276H127 ML19276H128 ML19276H130 ML19276H131 ML19276H132 ML19276H133 ML19276H134 ML19276H135
References
NUDOCS 7910100555
Download: ML19276H131 (11)

Text

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UNITED STATES OF AMERICA ATOMIC ENERGY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of )

)

METROPOLITAll EDISON COMPANY, et al ) Docket Nc. 50-289

)

(Three Mile Island Nuclear Station,)

Unit 1) )

APPLICANTS' PREPARED TESTIMONY RELATED TO COST / BENEFIT ANALYSIS Introduction s

Construction of Three Mile Island Nuclear Station, Unit 1 (TMI 1), is estimated to be 95 percent complete.

The present estimate of the initial capital cost for TMI 1 is $395,000,000. Of this total, $333,072,000, or 84.3 per-cent,.had been spent through September 30, 1973. An updated table (Table 1) of the Annual Cost of Three Mile Island, Unit 1, for the years 1974 through 1979 is attached to this testimony.

Consideration of Certain Cost Factors A. Cost of Administration and Regulation by Governmental Agencies In 10 CFR Part 170 the AEC has established a schedule of licensing fees which include fees to be paid by a p c nt 7910100

for construction permits and operating licenses, as well as annual operating fees to be paid each year by holders of operating licenses. At the time TMI 1 received its construction permit in May 1968, there was no requirement for a construction permit fee. The estimated operating license fee which must be paid by Applicants before AEC will issue an operating license for TMI 1 is $718,975.

The annual operating licensa fee payable thereafter for the duration of the operating license is estimated to be

$165,000 per year. Both the operating license ($718,975) and the annual operating license ($165,000) fees are in-cluded in the cost estimates for TMI 1.

B. Insurance Costs The insurance costs for TMI 1 include premiums payable to the Nuclear Energy Liability Insurance Association (NELIA) and to the Nuclear Energy Prcperty Insurance Association (NEPIA), and indemnity fees payable to the AEC pursuant to the Price Anderson Act.

The NELIA premium for the anticipated three month fuel storage period from January 1974 to March 1974 will be

$490. Thereafter, the annual NELIA insurance premium will be $270,000.

The NEPIA premium for the pericd January 1, 1974 to July 29, 1974--the anticipated period between receipt of 1417 i29 2

fuel onsite and the date of ccmmercial operation--will be

$336,500. Thereafter, the annual NEPIA insurance premium will be $1,030,000.

The fee for indemnity coverage under Price Anderson for the anticipated three month fuel storage period from January 1, 1974 to March 1, 1974 will be $100. With fuel loading anticipated for March, the fee for the remainder of 1974 will be S63,400. Thereafter, the annual Price Anderson fee will be $76,050.

The total costs of these insurance premiums and fees to be paid annually for TMI 1 is approximately $1,376,000.

This cost, which will be reduced by about one fourth when Unit 2 becomes operational, is included in the cost esti-mates for TMI 1. '

C. Costs of Water Consumption TMI 1 employs a closed loop cooling system which has two natural draft cooling towers. As is reflected in Section 3.5 of the Environmental Report, Applicants have taken into consideration the cost of water consumption due to evaporation from these cooling towers. The expected maximum evaporation rate is 5000 gpm per tower, or 10,000 gpm maximum for the two towers. This evaporation is re-placed by water from the Susquehanna River. The consumption of 10,000 gpm when compared with the mean annual average idii 1 .,

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river flow of 34,000 cfs (15,300,000 gpm) is only 0.065 percent of total river flow. Even under the most adverse combination of conditions of maximum evaporation and minimum recorded river flow of 1700 cfs (762,960 gpm),

the consumption is only 1.3 percent of total river flow.

Aoplicants have investigated the effects of this evaporative water consumption on downstream users. While the evaporation rate will result in slightly decreased output of the four downstream hydro plants, it is felt that the consumption of 10,000 gpm of river water will have no effect on any other downstream water users and the overall environmental cost is minimal.

.D . Cost of the Containment Repouring Applicants have included in the updated cost of the facility the cost of the containment ring girder repair work, which was approximately $3,000,000.

E. Capacity Factor Plant capacity factor means actual plant generation (measured, for example, in kilowatt hours actually delivered in one year by the plant) dividea by plant generation cap-ability (measured, for example, by the product of the plant kilowatt rating and the total number of hcurs in a year).

Thus, a capacity factor of 30% could indicate that, either 1A17 131 4

in any given year or during the design life of the plant, it would operate at 100% power 80% of the time. At the present time, TMI 1 is intended to be base-loaded, i.e.,

operated at 100% power at all times that it is in operation.

The choice of an 80% capacity factor for TMI 1 is based upon industry experience to date. Industry exper-ience has shown that while annual capacity factors are generally less than 80% during the initial years of plant operation, they improve to values considerably above 80%.

After the initial years of plant operation, only periodi-cally do dips occur in annual expacity factors as a result of, for example, extended outages for such things as in-service inspections. Thus, as of March 31, 1973, thirteen nuclear plants of about 500 MW or more were on their first fuel cycle. Problems incurred at the beginning of com-mercial operation of these plants was a significant factor in depressing the plant factor for nuclear units. Older pressurized water reactors, however, have shown considerably higher plant factors. For example, Connecticut Yankee had plant factors of 58.6, 80.1 and 87.8% for its first three fuel cycles. Yankee Rowe in fuel cycles 6-10 had plant factors of 77.6, 87.4, 81.3 and 78.2%. San Onofre had plant factors of 55.2 and 73.0% respectively, for its first two fuel cycles; it is currently in its third fuel cycle and to date has a plant factor in this cycle of 87.0%. As more 1A17 132 5

nuclear plants gain more operating experience, we would expect the overall nuclear plant factor to improve. Based on the experience of nuclear plants which have matured past their initial fuel cycle, it is reasonable to use a plant factor of 80% in estimating the lifetime benefits to be derived from TMI 1.

In any event, even if, for example, a 60% plant capacity factor were used and a proportional reduction in electric energy to be produced were assumed, this reduc-tion in income-producing output would have little effect on the economic considerations of alternatives. TMI 1 is nearly complete; most of the capital costs of construction are now sunk costs; and since the only practicable assess-ment of the costs of alternatives at this stage would be based on future costs, even a substantial reduction in plant capacity factor would not significantly effect Met Ed's choice of a nuclear facility. Furthermore, any reduction in plant operation (which a lower plant fa tor would indi-cate) would also reduce the already insignificant environ-mental costs.

F. Cost of This Facility as Opposed to Alternate Facilities to Rate Payers In 1966 when TMI 1 was selected, cost comparisens were made between coal-fired and oil-fired base load generating units, and nuclear base load generating units. These cost 6

comparisons showed that a nuclear unit was more economical than its alternatives.

We recently have re-examined the cost comparisons leading to the 1966 selection of a nuclear unit at TMI.

The results show that the decision made in 1966 was the proper economic choice, both as to the alternative of an eastern coal-fired plant under present day conditions, and as to the alternative of an oil-fired base-load type unit which has recently found wide usage in the area.

The specific cost breakdowns of each of the altern-atives are reflected in Table 2 attached to this testimony.

All costs in Table 2 are at 1974 cost levels--the period when TMI is scheduled for completion. In the case of coal we considered that the plant would be located at mine-mouth, with its output transmitted to the general load area of TMI. Necessary high voltage bulk transmission was included at $55 per kilowatt of plant rating. Such a con-figuration is, for the TMI area, more economical than moving coal by rail to a plant in that locality. All operation and maintenance estimates were similarly derived from cur-rent experience with comparable appropriate types of plants.

Fuel costs in Table 2 correspond to experienced costs plus moderate escalation to the 1974 comparison period.

Table 2 shows that for the 7,000 hours0 days <br />0 hours <br />0 weeks <br />0 months <br /> per year oper-ation contemplated for TMI 1, its annualized cost is estimated

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to be $96.50 per kilowatt year. This annual cost compares favorably with the annual cost for a coal-fired plant of

$105.10 per kilowatt-year and the annual cost for an oil-fired plant of $99.30 per kilowatt-year. Stated another way, the choice of nuclear over the closest alternative, oil-fired, will result in an annual savings of $2,254,000.

TMI 1 can also be compared, again, favorably, with either of the fossil-fired alternatives on the basis of present initial capital cost consideration. As of Septem-ber 30, 1973, $333,072,000, or 84.3 percent of the total cost of construction ($395,000,000) had been sunk in the construction of TMI 1. In other words, from that date a total of $62,000,000 remained to be spent in order to com-plete construction of the present facility. In a comparison of alternative facilities at this stage in TMI's construc-tion, it follows that the proper capital cost estimate to be used for TMI 1 is the cost of completion--$62,000,000.

The capital cost of a comparable oil-fired plant, which is the cheapest alternative, is $193,200,000. Thus, while it is generally accepted that the capital cost of a nuclear power planc is greater than that of the fossil-fired al-ternatives and the economical savings of the nuclear altern-ative lies in the annual operating costs (primarily the cost o f fue.'.) , the only practicable method of comparison of the cost of TMI 1 with the costs of comparable fossil plants a 1417 135

leads to the conclusion that TMI 1 at this time is the least expensive choice--in terms of not only annual oper-ating costs but also initial capital cost--to attain comparable electric generation capacity.

a 1417 136 9

TABLE 1

-AllNUAL COST OF TIIREE MILE TSLAllD UtlIT 1

($000) 7 18 75 76 77 78 79 2 Mos. lat. 2nd. 3rd. lith . 5th.

Year Year Year Year Yea r Year Depreeiation 2 , 1 711 13,022 13,022 13,022 13,022 13,032 lieul Eu ta te Taxen 1,783 1 , 811 7 1,705 1,723 1,661 1,600 Fue1 1,252 8,028 7,870 7,856 8,211 1 8,300 Other o&ft 906 S,911 't,1 182 6,3191 6,360 6 , 3 81:

Innu ranc e Prernlurn 230 1,376 1,300 1,050 1,050 1,050 ite tu rn on Inveu tinent 6,220 36,700 35,1163 31,226 1 32,989 31,752 TOTAL 12,665 66,8811 66,922 61,226 8 63,123 62,108 N

- -' TABLE 2

!!ours operation per year ..

7,000

~'

TMI UNIT 1 Total Investment $395,000,000 Installed Capacity W 805 Unit Investment Cost $/W 491 Nuclear Fucl Investnent $/W 38 Total 529

. Annual Cost $/KW-YR Fixed Charges at 15': 79.80 Operation and Maintenance.

Nuclear Insurance 4.80 Fuel at 1.3 mills /kwh 11.90 Total 96.50 COAL BASE LOAD P00RBR@Ml Unit Investment Cost $/W

" Normal" Plant 295.00 502 Renoval Equipcent 50.00 Total 345.00 345 Bulk Transmission East $/KW 55 Total 400 Annual Cost Fixed Charges at 15% 60.00 Operation and Maintenance, Incit: ding 502 Renoval Costs 14.30

, Fuel at 4.4 mills /kwh(8) 30.80 Total $/W-YR 105.10 OIL MSF. LOAD Unit Invectment Cost $/W 240 Anancl Coct $/W-YR Finnd C:;arges at 157 36.00 0,cra t .' on c:id MainL: ct pga 1.10 Fuel a 6.5 mills /;vhd> + _,

60.20 l 1 m .u 3/m , 138~cc.20 (a) Ceal at 4 0 /10 6 2TU (b) O i l. a t 9 3 . .' c /10" .7t '.'