ML19296C723
| ML19296C723 | |
| Person / Time | |
|---|---|
| Site: | Black Fox |
| Issue date: | 02/11/1980 |
| From: | Stolz J Office of Nuclear Reactor Regulation |
| To: | Bryant R AFFILIATION NOT ASSIGNED |
| References | |
| NUDOCS 8002280005 | |
| Download: ML19296C723 (2) | |
Text
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FEB 1 1990 Mr. R. Edward Bryant 2646 N. W. Eleventh Oklahoma City, Oklahoma 73107
Dear Mr. Bryant:
Thank you for your letter dated Janaury 1,1980 concerning the financial qualifications of Public Service Company of Oklahoma with respect to its proposed Black Fox Station, Units 1 and 2.
As part of our review of their application for permits to construct the proposed Black Fox Station, we evaluated the financial information provided by Public Service Company of Oklahoma, Associated Electric Cooperative, Inc.
and Western Farmers Electric Cooperative. We concluded in Supplement No. I to our Safety Evaluation Report (NUREG-0190, Supplement No.1, dated September 1978) that the applicants are financially qualified to design and construct the proposed Black Fox Station. This conclusion was based on our determina-tion that each of the applicants had demonstrated reasonable assurance of obtaining the funds, in proportion to their respective ownership percentages, necessary to design and construct the proposed facility, including related fuel cycle costs, as required by Section 50.33(f) of and Appendix C to 10 CFR Part 50.
In addition, certain aspects of the financial qualfications of Public Service Company of Oklahoma were considered at the October 10-20, 1978 session of the radiological health and safety public hearings on the proposed Black Fox Station in Tulsa, Oklahoma.
During the course of our aforementioned evaluation, we considered many factors which affect or are related to the financial condition of both Public Service Company of Oklahoma and its parent company, Central and South West Corporation.
As a result of your inquiry, however, we have reevaluated the financial con-dition of both of these companies.
As noted in your letter, Central and South West Corporation has experienced decreases in both residential sales and profit during the third quarter of 1979. We perceive these decreases to be minor, however. Such decreases are not unexpected on a temporary basis during periods of double-digit inflation and record-high costs of capital.
Our review of the most recent financial statements of Public Service Company of Oklahoma has shown that for the nine months ending September 30, 1979, its net income was $45.8 million, up $4.3 million or 9.4 percent from the 141.5 million earned during the same period in 1978. For the twelve months ending Spetember 30, 1979, Public Service Company of Oklahoma earned $56.8 million, up $7.5 million or 13.2 percent from the $49.3 million net income earned in the year before. More recent information shows that in December 1979, Public Service Company of Oklahoma sold $55 million of first mortgage bonds. Both of the major securities rating firms, Standard and Poor's Corporation and Moody's Investor's Services, Incorporated, have given these bonds a double-A rating, which signifies high quality by all standards.
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Mr. R. Edward Bryant EB ' 1 'E0 As a result.of our reevaluation of the financial condition of Public Service Company of Oklahoma and its parent company, Central and South West Corporation, we have determined that there is not sufficient reason to change our previous conclusion that Public Service Company of Oklahoma is financially qualified to design and construct the proposed Black Fox Station. However, as required by Appendix C to 10 CFR Part 50, we will continue to monitor the financial condition of all the applicants for the proposed Black Fox Station.
Should the financial condition of the applicants degrade to the extent that we cannot conclude that they have reasonable assurance of obtaining the funde necessary to design and construct the proposed Black Fox Station, including related fuel cycle costs, we will take whatever actions are deemed appropriate at that time.
Finally, as a point of clarification, the pending application of Public Service Company of Oklahoma, et al is for Construction Permits for the proposed Black Fox Station, Units 1 and 2.
A Limited Work Authorization (LWA), authorizing the performance of certain non-safety-related activities, such as site prepa-ration excavation and the construction of certain non-tafety-related structures, was issued to the applicants on July 26, 1978 following the completion of the environmental and site suitability public hearings in Tulsa, Oklahoma.
We trust that we have been responsive to your concerns.
Sincerely, L
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Stolz, Chief t Water Reactors Branch No.1 Division of Project Management
.