ML19308B759
| ML19308B759 | |
| Person / Time | |
|---|---|
| Site: | Crane  |
| Issue date: | 10/25/1979 |
| From: | Evans D NRC - NRC THREE MILE ISLAND TASK FORCE |
| To: | Pretti J CALIFORNIA, STATE OF |
| References | |
| TASK-TF, TASK-TMR NUDOCS 8001160945 | |
| Download: ML19308B759 (4) | |
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s October 25, 1979 In reply refer to:
T NTFTM 791025-01 Mr. James Pretti California Public Utilities Comission Revenue Requirements Division - Room 7208 455. Golden Gate Avenue p-San Francisco, California 94102
Dear Mr. Pretti:
Thank you for agreeing to assist the NRC/Three Mile Island Special
~
Inquiry Group in its analysis of the allegations that TMI-2 was
" rushed" into commercial operation prematurely.
I look fomard to our scheduled meeting on Wednesday, November 7, 9:30 a.m., at your offices.
As I discussed with you on the telephone, I have enclosed some material which might be of assistance in preparing for our meeting. The first is a draft of a portion of our report (Secti6n 5.3.7) which lists and discusses the financial in entives which existed for declaring TMI-2 in "comercial operation" befoc the end of December,1978. This draft is now several months old and w1il be superseded by the draft we are now preparing. When this latest draft becomes available, I will send it along.
Second, I have enclosed a tentative outline of our report, as of October 11, 1979. Again, we are well underway in writing the draft report which super-sedes this outline. However, this should give you a fair idea of our findings and conclusions until that is ready.
Third, I have enclosed a copy of a letter from E. J. Holcombe, GPU Comp-troller, to L. H. Drennan of FERC, dated August 18,1978 (with enclosure).
This is fomarded as a summary of the FERC Instruction 9D issue. involved
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in our investigation.
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l Fourth, there are two GPU memoranda summarizing the startup and test program 3
at TMI-2 and its problems. This is helpful in determining whether the test r
program wus accelerated to enable completion by a certain date.
(The notations in your copy are mine.)
In addition to the above material, I have enclosed a list of possible topics for discussion at our meeting.
I have attempted to break these into topic areas, along with notations of PUC personnel who might be interested in attending. This list should in no way be considered exclu-sive. To the contrary, we are most iiiterested'in hearing your thoughts and yL t
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Mr. James Pretti 2
October 25, 1979 opinions on our investigation and its conclusions.
If members of the staff feel that we have missed major topics or have made unfounded con-clusions in our draft report, we would be receptive to such criticism.
It would be my plan to call you before we arrive to see if the list of topics should be revised in some fashion.
I would like to again express my thanks to you and the Commission staff for agreeing to meet with us and share your thoughts. We certainly do not wish to impose on the staff, however, and will try to limit our demands on its' time and personnel.
If we can be more helpful in this regard, please contact me.
Otherwise, we look forward t;o our meeting on November 7.
Sincerely, S
David J. Evans
Enclosures:
1.
Draft of Section 5.3.7 2.
Outline of report 10/11/79 3.
Ltr from E. J. Ilolcombe to L. H. Drennan dtd 8/18/78 4.
GPU memoranda DISTRIBUTION 5.
List of Topics for 11/7/79 TERA meeting RDeYoung WParler RLVandenberg f vans
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POSSIBLE TOPICS FOR DISCUSSION WITH CALIFORNIA PUC STAFF San Francisco, California November 7,1979 A.
Discussion of Legal Issues:
(Staff counsel, rate regulation personnel, others) 1.
Use of the concept of "used and useful" as determinant of inclusion of new nuclear plant in rate base.
2.
Significance of declaration of commercial operation (commercial service) of generating facility.
'- 3. Comparison of various techniques for making utility tax savings (accelerated depr'eciation, investment tax credits) available to ratepayers.
(e.g., flow-through provisions, normalization).
4.
Impact of utility tax planning on rate regulation; e.g., use of progress expenditure payments for investment tax credit.
5.
Clarity and meaning of Internal Revenue Service criteria for treating nuclear plant as "placed in service."
(See: Rev. Ruis.76-256, 76-428, 79-98; Protest of Northern States Power re: Ltr 0167.18-00, enclosed).
6.
Application and impact of FERC Uniform System of Account Instruction 9D,18 CFR 101 (9) (D.).
7.
Use and impact of historical vs. future Test Years in regulatory proceedings.
8.
Use of Construction Work in Progress (CWIP) regulatory treatment vs. accumulation of Allowance for Funds used During Construction (AFUDC) until end of project.
9.
Pressures placed on utility involved in major construction regarding disallowance of AFUDC by PVC staff, Consumer Advocate.
- 10. Strategy of arguing case before ALJ or PUC regarding optics of plant operation.
B.
Discussion of Three Mile Island Factual Situation (Engineers, personnel with nuclear project experience, others) 1.
Is it possible to improperly " rush" a unit in the highly regulated environment of a nuclear plant without some authority discovering that rush and taking action?
2.
Investigation of Main Steam Relief Valve failure at TMI-2 and sub-sequent modifications.
3.
Investigation of pace of power ascension testing at TMI-2.
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Are there indications of a " rush" at TMI-2 and how do those indications (if they exist) compare with other nuclear units?
5.
Is the " presumption of safety" via'NRC compliance rational?
C.
Discussion of Special Inquiry Group ' Implications and Recommendations:
(policy-makers, specialists in rate regulation, staff counsel, others) 1.
Regarding tension between commitment to safety and economic incentives; 2.
Regarding regulatory ambiguities in this area; 3.
Regarding changes in economic incentives available to utility with a nuclear unit:
(a) future test years (b) less disallowance pressures (c) formal definition ~of'" commercial operation" and "used and useful" (d
FERC Instruction 9D (e
IRS criteria 4.
Regarding proposed'long-term action.
D.
Discussion of Other Matters of ~ Concern or Propos:ls 'for Additional Action (all)
.