ML19308B835

Testimony of Hm Dieckamp Before PA Public Util Commission Re TMI-2 Accident.Supporting Documentation Encl

ML19308B835
Person / Time
Site:	Crane
Issue date:	09/19/1979
From:	Dieckamp H GENERAL PUBLIC UTILITIES CORP.
To:
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ML19308B834	List: ML19308B833 ML19308B835
References
TASK-TF, TASK-TMR I-79040308, NUDOCS 8001170418
Download: ML19308B835 (45)

Text

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.I TESTIMONY OF HERMAN M.

DIECEAMP BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION

@ I-790403 08 e t al I am President and chief operating officer of General Public Utilities Corporation and a director of each of the three public utility subsidiaries of CPU that are the owners of the Three Mile Island nuclear generating station.

On April 23, 1979, I presented testimony relating to the Three Mile Island Unit No. 2 acc1 dent to the Subcom-

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mittee on Nuclear Regulation of the U.

S.

Senate Committee on Environment and Public Works.

A copy of the prepared statement that I submitted to that U.S.

Senate Subcommittee is attached, as well as a memorandum and an attachment giving a preliminary analy sis of the time sequence of the accident.

I shall orally summarize the material contained in those documents.

I should also like to comment on the allegation that has been made that TMI-2 was prematurely declared to be in commercial service.

Implicit in this allegation is the incorrect assumption that a declaration that a nuclear generating unit is "in commercial service" governs its physical operation.

That assumption is contrary to fact.

The NRC has pointed out that the timing of beginning of physical operation of a nuclear generating unit and the circumstances of such operation are governed by the NRC operating license and hav e nothing to do with whether the unit has been declared to be "in commercial s e rv ic e. "

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2-e In the case of TMI-2, the operating license was issued by the NRC on February 8, 1978.

The physical opera-tions of TMI-2 were determined by that operating license and by the technical specifications which it incorporated.

The declaration of a generating unit as being "in commercial service" is an accounting and ratemaking concept which was discussed at length with this Commission over a period of several months in 1978.

For example, on February 17, 1978, there was oral argument before the Administrative Law Judges in Met-Ed's then pending rate case at R.I.D.

434 concerning :he appropriate criteria for a declaration of " commercial s e rvice".

There' was oral argument before the Commission itself on May 10, 1978 in that same

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proceeding dealing with the same subject.

There was further discussion of the s ub j ec t at the June 23, 1978 Annual Review meeting with the Commission concerning Met-Ed following the conclusion of that proceeding.

As a result of that discussion at the Annual Review, I sent the Commission a letter, dated July 19, 1978, reporting on the TMI-2 start-up and test status.

Sub-sequently Mr. Kuhns sent a letter, dated August 11, 1978, to the Cocmission pointing out that the Uniform System of Accounts and decisions applying that System defined the time for declaration.of commercial service as the time when a unit is " ready f or service", even though clean up construc-l tion has not been completed nor full capacity utill:ation l,

a ch iev e d.

Copies of both of these letters are annexed.

3-i I doubt that the declaration of the commercial I

unit has ever of a particular generating in-service date r e c eiv ed as much attention from so many sources as was t f o r TMI-2 We have sought to make clear that our view the successful case time for the declaration was of the appropriate series of tests and we invited the c omp le tion of a,long Commission, its Staff and the Of fice of the Consumer Advocat Those tests were to witness such tests, if they desired.

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E-21 p resented by Mr.

outlined in the 25-page Exhibit No.

C. Arnold in R.I.D.

626 On November 30, 1978, Mr. Kuhns wrote to both your the with copies to the New Jersey Board, Commission and i

a status in both jurisdictions, giving Consumer Advocate on the unit.

A copy of that letter is annexed.

The report completed l

that letter were additional tee:s contemplated by the next two days the unit on December 28, 1978,'and during and declared to approximately full power brought up to was be in commercial service.

During the closing stages of the Met-Ed rate case, T

suggested that the declaration that TMI-2 was in l

no one exclude TMI-2 or sought to commercial service was premature had sought to Indeed, the Consumer Advocate from rate base.

of Met-Ed's inv e s tmen t on the alleged exclude portions i

an earlier been completed at TMI-2'should have ground that date.

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s There have also been suggestions that income tax considerations dictated the physical operation of the unit.

This is also not true.

As I previously pointed out, the physical operation of the Unit is governed by the NRC operating license; it is not affected by the question as to I

f whether or not depreciation deductions or investment tax credits may be taken for income tax purposes.

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I am not an expert on the income tax laws and regu-lations, which have their own special rules and conventions.

However, I was informed, in 1978, by GPU's tax department that TMI-2 would qualify for liberalized depreciation deduc-tions and investment tax credits in 1978 whether or not TMI-2 was. declared to be in commercial service for Uniform System I

of Accounts purposes.

i In other words, there are three separate criteria 4

to be cons id e red :

1.

Fo r physical operations purposes, a nuclear unit may be operated once an NRC operat-ing license has been issued.

The particular power level at which the unit is operated is determined 4

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by the terms of that operating license and c omp li-l ance,with the technical specifications which are made a part of that operating license; I

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5-2.

Fo r accounting purposes, a nuclear generating unit is to be declared to be in com-mercial service and to be transferred from CWIP to plant in service (with the correlary that AFUDC accruals and c ap it aliz a tio n of taxes and a

certain other costs stop) when the Unit is " ready for service" after a reasonable test period for which the FERC standard is not more than 120 days, unless the facts justify a longer period; and 3.

Fo r income tax purposes, depreciation deductions may begin and investment tax credits may be taken even though the unit has not been s

declared to be in commercial service for Uniform System of Account purposes.

Satisfaction of the first criterion, namely, obtain-ing the NRC operating license, will always precede, and be ind is pe ns ab le to, satisfaction of the second and third criteria.

'reover, satisfaction of the third criterion may occur prior to satisfaction of the second criterion.

In summary, well in advance of the. event, we set forth the - detailed steps to be taken leading to a declara-tion of commercial service for THI-2.

Over a period of many months we sought to present to the Commission and to

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6-the parties to the rate proceedings of Met-Ed and Penelee the various considerations and factors bearing upon the de te rm ina t io n of the appropriate time to transfer TMI-2 from CWIP to Plant in Service and the accounting and of that action.

We periodically financial consequences reported on the progress of testing and invited the wit-nessing of tests.

The declaration on December 30, 1978 of TMI-2 as being in commercial service was consistent with the criteria that had previously been presented to the Conmission.

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TESTI:!ONY s

BEFOPE THE SUBC0lci1TTEE ON NUCLEAR REGULATION OF THE SENATE CC:01ITTEE ON E!;VIRdt:MEIT' AND PU~dLIC L'ORKS BY I

llEPJ:AN DIECK10!P, PRESIDE IT CEl'ERAL PullLIC UTILITIES CORPO!uTIC::

APRIL 23, 1979 l

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Senator !! art, members of the Subcommittee on Nuclear Regulation of i

the Senate Committee on Environment and Public Works, my name is Herman Dieckamp.

I am president of General Public Utilities and a director of each of the three operating subsidiaries, Metropolitan Edison Company, Jersey

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Central Power and Light Company, and Pennsylvania Electric ~ Company, that are the owners of the Three Mile Island Nuclear Plant.

We are here to present our preliminary understanding of a nu=ber of the aspects of the accident at Three Mile Island.

Since the accident, several hundred CPU and Met-Ed employees as well as a great number from the nuclear industry and various governcent agencies have Leen and are currently working around the clock to ensure the continued hea: th and safety of the public,. We are all extremely greatful that the radiation exposure levels to the public have been low.

We are, however, in no way complacent about the result of the accident.

The accident at Three Mile Island on March 28, 1979 has had a profound and shocking impact on the residents of central Pennsylvania, Met-Ed and GPU, our customers and c=ployees, and on the future of nuclear energy. While nuclear power plant systems and procedures have been designed to accommodate extreme malfunctions of both equipment and personnel, the reality of this accident has had a far greater impact than we could have ever projected.

We pledge our sincere support and cooperation in the efforts of this committee to make known and to assess the full meaning of this accident.

At the outset we would like to emphasi=c that we do not in any way wish to minimize the significance of this accident and we seek no excuse from our responsibilities as plant owners and operators.

We strongly believe that it is important to understand the factors which contributed to this accident and i

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to the ability of our Company, government agencies and the affected population to cope with it.

If this accident is viewed simply as a matter of management or operator failure, the full significance of this experience will be lost.

The accident was a result of a complex combination of equipment malfunctions and ' human factors. The accident departed from the accepted design basis for current nuclear plants.

The response of all organizationr was influenced by the fact that it was the first accident of this magnitude in *.he history of the U.S. co=mercial nuclear power program.

It is our hope that this testi=ony and these hearings can contribute to 1

, an understanding of this accident and the many complex factors that led to it.

.i In our testi=ony today we will disc ~uss the follo, wing specific topics:

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1. Accident causes l

2. Plant Status - Present and Future i

3. Development of Understanding

4. Radioactive Material Releases

5. Emergency Plan

6. Organizational Response

7. Company - NRC Interface

8. Long Term Outlook ACCIDENT CAUSES We do not propose today to present a detailed description or sequence of events for the accident. We are in general agreement with the NRC testimony on this subject as previously presented to the. committee.

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Ue would like to focus this portion of the testimony on our initial i

impression of the primary causes of the accident.

While Met-Ed and CPU have not completed a detailed reconstruction of t

the accident or attempted to verify the relative importance of the many ingredients by means of calculational models, the following appear to be the j

major causes of the severity of this accident.

a)

Shortly after the turbine and rcactor trip at about 4:00 a.m. on March 28, a reactor coolant system pressure relief valve opened to relieve

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the normal pressure excursion, but the valve failed to reclose after 4

the pressure decreased.

The operator was unaware the valve hdd not closed.

An order for valve closure was signaled in the control The operator monitored temperature near the valve to indicate room.

l valve position.

However, the temperature did not cicarly confirm the l

continuing coolant flow thru the valve.

The loss of reactor coolant and accompanying reactor coolant system pressure decrease continued for about two hours until the operator closed the block valve which stopped the loss of reactor coolant.

b)

The operator anticipated reactor coolant system behavior and immedi-ately began to add make-up water to the system.

When system pressure decreased to 1600 psi about 2 minutes into the accident the High Pressure Injection (HPI) safety system was automatically initiated.

i Four to five sinutes into the accident the operator reduced injection i

of water from the HPI system when pressuriner level indicated tha-the system was full.

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Operator training and experience had emphasized the retention of a steam vapor space in the pressurizer'.

However, following the rapid

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depressurization of.the system, the pressurizer 1cvel indicator inferred a high level throughout the reactor coolant system.

4 This level indication led the operators to prematurely reduce HPI flow.

The operator apparently did not anticipate that continued 1

depressurization could Icad to steam void formation in hot regions of the system other than the pressurizer and that under these conditions his icvel or fullness indication was ambiguous and misleading.

d)

Because of the presence of steam voids in the primary system, indi-cated flow decreased.

The operator turned off the main coolant pumps in order to prevent damage to the pumps.

c)

An emergency feed syste=, designed to provide cooling to the steam generators in case of loss of the norcal feed water system, was blocked because of two closed valves.

This system would have

, been availabic to provide secondary cooling. The operator discovered this condition and initiated secondary system emergency cooling by opening the closed valves 8 minutes after the start of the plant transient.

The plant safety system surveillance program had called for the placing of these valves into the closed position six times during the first 3 conths of 1979 for testing of the operability of the pumps' or valves.

The surveillance program required a verification of valve position twelve times during this period.

The last test of the emergency feed system was conducted on the morning of March 26, about 42 hours4.861111e-4 days <br />0.0117 hours <br />6.944444e-5 weeks <br />1.5981e-5 months <br /> before the March 28 accident.

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Primary coolant initially vented through the pressuriser relief was pumped into the auxiliary building because the containment design did not require isolation until building pressure reached 4 psi.

The first five of the above factors led to severe undercooling of the 4

The fuel became extremely hot and the integrity of the fuel reactor core.

cladding was lost.

The first indication of fuel cladding damage and fission t

An extensive reaction product release came with high radiation alarms.

between fuel cladding and primary coolant steam liberated large quantities of hydrogen gas into the primary reactor coolant systen. The resulting configue-I ation of the reactor core is still the subject of analytical attempts to reconstruct the accident.

At various times during the day of March 28 as the operators worked to reestablish control of system cooling, the core suffered additional overheating and damage.

Forced cooling of the primary system was reestablished at about 8:00 p.m. on the 28th.

i Performance of the plant operators has been the subject of much specu-lation. Their _ performance must be viewed in the context of:

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Ambiguous and contradictory infor=ation in the control room relating to pressurizer level and relief valve closure.

1Ric experience and training underlying the operators' emphasis on 2.

maintaining pressurizer icvel.

3.

The operators' awareness of equipment limitations.

The time and opportunity to assimilate large quantities of data.

4.

The operators on duty at the time of the accident are a qualified and They performed their functions professionally in a period of competent group.

Our own investigation and the,many other governmental extreme stress.

investigation.: 'dll ultimately attempt to decermine the role of operator performance in this accident.

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PLANT STATUS - CURRENT AND FUTURE is stable. The fission product decay heat being liberated in The plant l

3 Mu thermal (0.1% of full power).

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the damaged reactor core / fuel is about L e reactor nis power icvel is normal for,this time after a reactor trip.

pump.

The average is being circulated by one primary coolant primary coolant is about 175 F.

As a result of local temperature of the primary coolant h

re, the highest flow restrictions associated with the physical damage to t e co from the reactor plus the.

De heat in-core thermocouple reading is 275 F.

is being rejected through one heat input from the one operating pump (6 MW) steam generator and the plant condenser.

The icaediate objective of the activities at the plant is to establish erator and a redundant heat re= oval path through the plant's second steam gen In the an intermediate heat exchange loop without using the, plant condenser.

by means of cold shutdown mode, the pri=ary reactor coolant will circulate This will natural convection because of te=perature and. density differences.

for ultimate transport the core heat to the plant's two steam generators secondary paths. The objective is to rejection through two independent function in these minimize tae number of active components that must circuits in order to ensure reliable heat removal.

should achieve the cold shutdown mode sendtice during the nex The plant The plant's several and original e=ergency cooling capabil 2-3 weeks.

One of these systems, the are available to backup the basic cooling plan.

of a high priority plant's decay heat rc= oval system has been the subject l

to the to upgrade the ability of that system to mininiae re eases effort i

tivity. As part s

environment while operating with high primary coolant rad oac i

f redundant of this ef fort, work is under way to enable the installat on o i

backup modules in addition to the two that are part of the plant des

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DEVELOPMENT OF UNDERSTAMDIMC The accident differed frca the popular perception of common accidents

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because of the extended time necessary to achieve a full definition of its scope.

initiating event was a loss of feedwater flow. During the The accident's first few minutes following this event, the plant staff attempted to recover from what they thought was a normal transient.

Beyond this ti=e, the plant behavior became inceasingly abnormal. The loss of coolant via the reactor -

1 coolant system relief valve was identified and the valve was isolated around 6:20.a.m. At approximately 6:50 a.m. several radiation alarms alerted the 5:30-7:30 a.m.

staff to possible reactor core damage in the ti=e period of the reactor core became uncovered and suf fered extensive damage, including 12 hours1.388889e-4 days <br />0.00333 hours <br />1.984127e-5 weeks <br />4.566e-6 months <br />, the operators significant zirconium-water reaction. During the next This attempted a number of strategies to establish dependa'ble core cooling.

objective was achieved about 8:00 p.m. on March 28, at which time the plant symptoms included:

saturation Some local reactor coolant temperatures were above coolant a) temperature.

High radiation levels existed in the reactor containment and the b) auxiliary buildings.

A preliminary sequence of events was being extracted from the various The data for the 16-hour accident plant records by the af ternoon of March 28.

period became available in summary graphical form on the morning of Ma

29. The probabic occurrence of a zirconium - water reaction and the presence i

he of hydrogen gas in the reactor containment bul,1 ding was deduced dur ng t the evening of March 29 from containment pressure records. chat indicated The size of the hydrogen gas bubble in o

a pressure spike during the accident.

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first measured fr' m system data just after the reactor coolant system was o

midnight March 30.

The concentration of hydrogen gas in the containment building was determined from analysis of the first containment gas sample taken about 4:00 a.a. on March 31. The first quantitative data with respect to fission product release and degree of reactor fuel damage be,ccme available via analysis of a primary coolant sample taken at 5:00 p.m. on March 29.

The point of this enumeration is simply to indicate the time necessary to gain insight into the scope of the accident and, in-turn, to provide the basis for a meaningful assessment.

In any evaluation of the timeliness of the accident assessment,'it must be re=embered that the plant management and staff faced

, immediate, continuing and first priority, demands to maintain the damaged plant in.a controlled and safe state.

RADICACTIVE MATERIAL RELEASES A release of fission products to the containment building occurred during the first forty-five minutes of the accident when water was released from the primary reactor coolant system through the pressuriner relief valve.

This water was first contained within the reactor coolant drain tank in the reactor containment building.

Shortly after the initiation of the accident, pressure buildup in this tank resulted in the release of coolant to the containment building floor.

This coolant collected in the containment building sump and was pumped into the auxili,ary building sump. The auxiliary building sump overflowed and resulted in several inches of water on the floor of the auxiliary building.

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l Containment isolation automatically occurs in the TMI 2 plant upon a 4 increase in the reactor building. In the accident that occurred pg.i pressure this pressure buildup did not exist until 5 hou'.s into the accident and thus containment was not isolated until 9:0C a.m.

Operator action turned off the containment sump pumps approximately 40 minutes into the event.

Iligh fuel cladding temperatures produced by inad' equate core cooling during the accident resulted in the breach of most of the fuel cladding in the This failure of the first core beginning about 90 minutes into the accident.

level of fissioa product containment resulted in the release into the primary system of the gaseous fission products from the fuel-cladding gap and a fraction of the fission products normally contained within the fuel pellets.

After extensive fuel damage occurred, highly contaminated primary coolant and gases may have entered the auxiliary building through a nu=ber of rout us including reactor coolant pump seal leakage, instrument sample lines, and the We are not currently able ? o primary coolant make up and let-down systems.

ascertain in detail the Laportance. and contribution of these possible re! -ase Our analysis is now impeded by the inability to physically examit e paths.

specific systems due to high radiation levels.

Continued operation of the primary reactor coolant letdown and maktup systems to re=ove gas from primary coolant circuit resulted in a buildup of iodine, and nobic gases in the reactor make-up and let-down systems

hydrogen, and in the waste gas decay tank in 'the auxiliary building.

Steps necessary to tank pressure levels, the taking of gas samples, and efforts to restrict discharge these gases back into primary reactor containment building resulted in a series of radioactive gas releases. ' The largest of these occurred on Friday, March 30 at 6:40 a.m..

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The iodine releases from contaminated water in the auxiliary building and from other gaseous sources passed through iodine filters in the auxiliary building with the result that net iodine releases off site have thus far been limited.

In recognition of the inventory of iodine in the auxiliary building and the deterioration of existing filters, charcoal filters have been replaced and an additional charcoal filter system is being installed in series with the existing plant filter system. This existing iodine inventory is being reduced by a factor of 2 every 8 days by radioactive decay.

URC has calculated the highest integrated whole body dose possible 4

to an unprotected individual continuously positioned outdoors at the plant boundary and thus totally exposed throughout the accident.

This was 1

85 millires and is consistent with the highest offsite dose measured by Met-Ed.

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In addition to the maximum integrated whole body dose measured from the

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accident, the total dose to the population within 50 miles has also been evaluated. The results of this analysis indicate that the aggregate whole body dose to the population within 50 miles (about 2 million people) was about 3550 person-reas from noble gases released through April 7,1979.

NRC indicates thet the total potential life time health effects associated with this whole body dose are about 2, in addition to the 300,000 cancer i

fatalities which would be normally expected to develop in the population of l

I about 2,000,000 persons.

i Low levels of iodine-131 have been detected in air and milk sampled near the site.

To date, measurements indicate the maximum level of iodine-131 in l

milk to be about 40 picoeuries per liter. (pico = 1x10-12).

This level is r

I below the 10CFR 20 maximum permissible concent' ration of 300 picocuries per liter, and is well below the levels of iodine in milk detected following k

the 1976 Chinese weapons test.

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Low Icvels of liquid releases occurred to the Susquehanna River through the industrial waste water treatment system.

The availabic data indicate cumulative rele. ses of about 0.01 curies to the river, well below the level of 10 curies per quarter allowed under our license.

In general the releases have been below MPC except for one brief period when the data indicate the hourly release exceeded release rate limits by about 30%.

EMERCENCY PLAN Both Three Mile Island and the Commonwealth of Pennsylvania had formal written emergency plans in place before TMI 2 received its operating license.

Under the emergency plans, there is a clear division of responsibility between Met-Ed and the state authorities.

In terms of the division of func-tions, it is Metropolitan Edison's duty to make an initial assessment of the to read to do whatever it can to terminate or investigate the event,

accident, instruments and monitoring devices which give an indication of the the. plant level of releases from the plant, to read the instruments telling wind direc-tion and speed, to dispatch teams of technical personnel to areas outside the plant with handcarried monitoring devices to record =casurements in the path of the plome and report these back to the plant emergency control center by radio and to keep the Bureau of Radiological Protection informed on all Plant personnel have been trained in these functions and these matters.

perform periodic drills. for various simulated accidents.

So far as state agencies are concerned, it is the responsibility of the Bureau of Radiological Protection to make the decision as to what measures of protection, including evacuation, should be undertaken.

If evacuation is called for, it is the responsibility of the stn'te and local cmergency centers to carry out the evacuation.

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2 Emergencies which could have consequences off site are classified as Site emergencies are those cither a Site Emergency of a General Emergency.

4 Uhich have a potential for off-site consequences and General Emergencies The emergency plans specify are those with definite off-site consequences.

precisely the conditions in~ the plant which trigger the declaration of a Site of a General Emergency and which initiate i=ple=entation of notification and 1

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Both levels of emergencies intensified radiological monitoring procedures.

require notification of off-site authorities.

i in the initial stages of the accident.at TM12, the plant operators 1

involving loss.of thought they were experiencing a normal plant transient i

j feedwater, which resulted in an automatic trip of the electric turbine About a half hour aft'er the initial generator and an automatic reactor trip.

I reactor trip, a radiation alarm on the intermediate cooling system uns received.

In light of the operator's knowledge of the position of this detector in an this was not area of generally high background radiation and its low setpoint, viewed as an indicator of an e=ergency and it is not a criterion for declaring Throughout the next several hours there were no a Site or General Emergency.

additional radiological alarms or other indications of the potential for off-site releases.

At ab'out 6:40 a.m. a radiation monitor located near sampling lines alarmed and chemistry / health " physics tech-primary coolant nicians surveying with portable monitors in areas of the plaht decceted radiation levels.

three hours af ter the accident.was It was not until 6:50 a.m. almost radiation monitoring devices in the initiated and the reactor tripped, that At this alerted operators to the real potential f r off-site releases.

unit time, the first criterion for declaring a Site Emergency was met, when a y

reactor building high range gamma monitor alert alarm was received.

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In accordance with the emergency plan procedures, a Site Emergency was declared and notifications to authorities were initiated. Pennsylvania's Emergency Management Agency was notified at 7:02 a.m.; Dauphin County's the same time. These organizations in Emergency Center was notified at about turn co=menced their notifications to state and local authorities. The State's Bureau of Radiological Protection (BRP) duty officer was notified at 7:04 a.m.

The BRP duty officer, by the State' Emergency Management Agency duty officer.

thereafter, contacted the control room at Three Mile Island to gain technical knowledge about the event.

A call was placed.at 7:04 a.m. to NRC's regional office in King of Prussia, Pennsylvania.- The answering service which received this call was alerted to the reactor trip, the possib'ility of primary to secondary leakage through a steam generator, to the declaration of a Site Emergency at TMI 2, and to the fact that no releases were known to have occurred at that time.

Notification followed within minutes to others on About 7:24 a.m., the the prescribed list of organizations to be notified.

4 reactor building high range gan=a monitor high alarm was received, which by the plan triggered escalation of the emergency classification to the 1cvel of Notifications of this new change in status were initi-a Cenetel tmergency.

ated.

During the period from 7:30 to 8:30 a.m. the emergency plans were fully Co==unications both on site and off site were established.

I initiated.

o detect and verify Radiation monitoring teams were dispatched off site t' I

releases.

Throughout the day of March 28, 1979, on-site and of f-site radiological monitoring teams were providing a full flow of data to the Emergency Control 4

Constant communication existed through open lines Center at Three Mile Island.

2's Control Room to the State's Burcau of Radiation Protection o

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As data was received at Region I in King of prussia.

to 1;RC's offices at f site, it was immediately the site from radiological monitoring teams of line channels estab-relayed to both URC and to the State through the open-From shortly lished in the emergency plan and implemented on this occasion.

itself.

after 10:00 a.m., NRC had personnel in the control room

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the Three Mile Islaad radiation emergency plans

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From our vantage point, l

The decisions to declare the and procedures were effectively impicmented.

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'in charge when the l

Site and Cencral Emergencies were made by the individuals l

Emergency stations l

specific criteria required these decisions to be made.

d e with the j

vere manned and off-site notifications were made and in accor i

Open lines and a flow of communications with the critical off-s te i

plan.

status Radiation monitoring results and plant agencies ware established.

t d to both NRC and to the Pennsylvania i

.information was available and commun ca e 4

further review of this We must expect that Bureau of Radiation Protection.

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experience will identify opportunities for improve =en.

i ORCA 1:12ATIONAL RESPONSZ I

The initial perception was that the plant had experienced a severe i

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there was sc=e fuel cladding da= age, but condit ons were

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transient, h

of the event.

l and the i=sediate need was to identify and understand t e cause i

i plant By approxicately 7:30 a.m., Wednesday, Marc,h 28, available sen o i

By that afternoon operations and technical support personnel were on s te.

the TMI personnel arrived at two Met-Ed and four GPU Service Corporatitt.

f On Thursday morn-site to provide technicci assistance to the plant staf.

iate an ing, March 29, a seven-man team was dispatched to the site I

then the team gained a first hand awareness investigation'into the accident.

h immediately turned of the condition of the plant late Thursday af ternoon, t ey 1

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their full attention to assessing plant status, providing analytical support to the continuing operating decisions that had to be made, and identifying continency plans in order to keep the plant in a safe condition.

This activ-ity was a demanding one and absorbed the approximately 80-100 personnel, about half from CPU member companies and half frcm other utility industry companies, brought to the site over the next few days.

The GPU vie.e president who is responsible for generation plant design -

and construction, and who previously had been the Met-Ed vice president responsible for TMI, arrived at the site early Friday morning, March 30, with plans for organizing and manning the ongoing effort.

Later Friday morning when a burst of radioactive gas was released from the auxiliary building, awareness of the magnitude of the problem was sharply increased.

During the next 30 hours3.472222e-4 days <br />0.00833 hours <br />4.960317e-5 weeks <br />1.1415e-5 months <br /> we were in phone contact with the nucicar industry.

Ue asked for support at the site in the form of senior experienced nuclear

, scientists, engineers, and technicians and found everyone eager to help.

By late Saturday afternoon, March 31, about 30 people from 10 organizations arrived at the site to form the nucleus of what has been variously known as the Industry Advisory Group or the "thinktank". I met with the group early in the evening of Saturday, March 31, and asked the group to organi=e itself to evaluate four prime areas:

1)

What probicos do we face in waste management to minimize offsite exposure?

2)

What is the state of the damaged core?

3)

What problems exist in the then current primary cooling mode (with a bubble)?

4)

Uhat are the options available for progression toward cold shutdown?

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. o three weeks, the Advisory. Croup utiliacd the skills and Over the next experience of about 100 nucicar specialists.

Their participation has been extremely valuabic and we are forever indebted to them for their unscifish dedication.

Concurrently, the Met-Ed and CPU staff began their own assessment of these topics and began to work with the B&W staff in Lynchberg, Va. and to We were access the capabilities of the other nuclear steam supply vendors.

attempting to deal with current and prospective problems that bore little relationship to the design basis of the plant.

- Despite CPU's seventeen years of nuclear involvement, our thirteen power reactor years of experience and a compicment of over 1000 employees devoted to nuclear activities, our resources and our lack of pr. ice experience with this kind of situation limited our own ability to completely determine the plant status, to establish a plan of action, to determine priorities and to supply management leadership.

feu days after the accident the priorities were iden-During the first tified to be:

Maintain the plant in a safe operating mode with emphasis on contingen:

a) failures due to the high radiction plans in anticipation of component levels and radiation inhibition to maintenance.

bl Mininize the fission product activity releases and the of f-site The initial problem areas included waste exposures to the public.

water ma'nagement, suppression of iodine release frca liquid spills, replacement of iodine filters, and filter additions.

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Devise and implement a safe transition from the post accident cooling c) mode to cold shutdown with provision for backup strategies to ensure I

continued safe removal of the core's residual heat.

Reinforce the plant's emergency systems to assure safety in the d) l cold shutdown mode with its unique demands. A critical activity han 1

been to improve the integrity of the decay heat removal system a'n i

l enable the installation of redundant backup systems if required.

i By' Tuesday, April 3, the combined efforts of the !!ct-Ed/GPU staff, 1

i B&W, and the Industry Advisory Croup resulted in a Base Plan for tra Since that ti=e, status to cold shutdown.

l the reactor from its post accident independent the plan has undergone minor adjustments as a result of further in formation review by the Advisory Croup and URC and as a result, of the added and experience gained by our staff as a function of time.

i On Wednesday, April 4, an organizational structure for the TMI-2 recover I

The organization gave recognition to the continuing effort was put in place.

engineering and analysis control of plant conditions, the need for significant and Icadership to the various special c=phasis on waste manage =ent,

support, This overall organization was placed under the plant modification tasks.

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direction of Mr. R. C. Arnold, Vice President-Engineering & Constructio At the same time the organization was bolstered the CPU Service Corporation.

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l by the infusion of a number of senior executives from Duke Pow i

I The organization was further strengthened by health Commonwealth Edison Co.

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ll'as physics and plant operations peopic from a number of utilit es as we

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We wish to publicly express numerous engineers from the nuclear industry.

our gratitude for the outpouring.of support we were given.

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COMPANY - URC INTERFACE The role of the URC and the relationship between the Company and the NRC has been the source of much speculation in the press. The Company's view of the relationship is one of mutual respect and cooperation.

The popular perception of the relationship may have been significantly colored by the Company's ' election to reserve comment on plant status and plans.

The URC It has been our spokesmen adequately covered this aspect of co=munication.

judgment after the first few days and up to this time, that the public inter-est was best served by minimizing the opportunity for media emphasis of minor nuances of expression.

A serious side effect of this policy has been to create the public impression that the Company was not contributing to the management of the post accident efforts.

We believe,that Met-Ed and GPU have ef fectively responded to this accident.

The management and resources made availabic by the Company for accident control must be evaluated in light of the unexpected and first of a kind nature of this accident.

As a result of this accident all parties should be more aware of the demands of this kind of situation and b'etter prepared to cope in terms of leadership, manpower and material resources. In retrospect, is our impression that the Company and the URC both experienced similar and it somewhat concurrent phases in coming to grips with the situation.

The question of who is in charge has not been a critical factor.

The Company has from the outset recogniced the role of the MRC in this acci-dent situation..The NRC's access to the control room provided direct and immediate access to plant status from mid-morning of March 28 on.

The need for URC approval of "of f 'ormal" actions and procedures has occurred with limited bureaucracy.

The Company encouraged a reduction in the normal regulator /regulatee relationship and invited the URC to participate directly o

in the twice daily technical and progress review meetings at the site.

There it is the Company's view that were tense moments, but we must emphasize th$t We have been the relationship uith the t'RC is constructive and ef fective.

abic to close ranks so as to ef fectively employ our joint resources.

LONC TERM OUTLC0K to the longer term outlook for repair and return to serv ce With respect is too early to be able to provide even a rough schedule or cost of TMI 2, it Experience with the clean up and recovery of other reactor inc'i-estimate.

It will, however, the problem is technically manageable..

dents suggests that be significantly influenced by the availability of financial resources, The replace =ent power cost regulatory re,quirements, and public acceptance.

ides alone of the normal 4-5 billion annual kilowatt hours output of TMI 2 prov i

/

to our customers an incentive for restoration in excess of $100 mill on year.

seek to disassociate itself frca While the Company cannot and does not the causes of the accident, we do believe that the accident involved the entire technological, and regulatory infrastructure of nuclear power. The The Company has the benefit of pro-public is protected by Price Anderson.

Beyond these, there are significant costs associated with perty insurance.

for replacement power and a large investment that may not be used and use If this unanticipated cost could be distributed over the 400 some time.

significantly reactor years of commercial nuclear power to date, it would not However, the from the economics and value of this energy resource.

detract 1.5 million customers and the cost of this accident when concentrated on the

)

stockholders and the other investors in TMI 2's parent and subsidiarier 170,000 imp" The traditional constraints of the utility regulatory process is extreme.

i= pediments to the easy discussion of the ramifications of an significant o

I

t accident of this type and a ready resolution of the proper sharing of costs be-tween the customers and the investors. To date the industry has underestimated the i

importance of diversifying this financial risk and thus spreading the cost of l

the development of the technology over the total beneficiaries of nucicar i

The institutions charged with the responsibility to supply a secure, i

power.

and economic source of electrical energy must be able to withstand I

abundant, at TBtI 2.

The system cust retain the impact of an event like the accident the ability to balance the social and economic cost.s of energy supply and 4

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energy availability.

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hkMI; Z -2 Herman Dieckam3 e

President 260 Cherry HM F:ad GENERAL

,-..j Paruppany New 'arsey C

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PUBLIC 201 20s4900 7~. C E UTluTiES k

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- 4: CORPORATION July 19, 1978 Pennsylvania Public Utility Commission Commonwealth of Pennsylvania 104 Horth Office Building Harrisburg, Pennsylvania 17120 Honorable Louis J. Carter, Chairman Attention:

TMI-2 Start-up and Test Status

Dear Chairman Carter:

During the Met-Ed review on June 23rd, I reviewed the status of the TMI-2 start-up program and the schedule for commercial service. The purpose of this letter is to confirm our current assessment of the major problems that control the projected commercial service date,of about November 1, 1978.

Start-up Procram

(

A formal start-up testing program was planned and organized for 2 similar to the Three Mile Island nuclear Generating Station Unit one that was conducted very successfully on Three Mile Island nuclear Generating Station Unit 1.

The program was scheduled for forty weeks:

as outlined on Attachment 1.

The first event in the test program, in time to hot functional testing, was completed in October 1977,1978 in-service d support the May 31, test program is planned to fully exercise all of the plant ecuipment under carefully controlled and monitored conditions so that any deficiencies in design or construction can be identified. The end objective of the test program is'to verify that the plant per While it is anticipated that some problems will occ.ur during the for administrative reasons the program schedule makes test program, no explicit prov,ision for delays.

the test program had progressed to the "15-40 per By April 23rd, In so doing the plant has operated at cent power escalation" phase. full temperature and pressure at a maxim is a list of 200 Mw and has produced about 4000 Mwhrs.

some of the more significant problems which have arisen durina the ten.ing program. The last three items on Attachment 2 are particular worthy of discussion.

('

~2-July 19, 1978 f

1 s

control Assembly l

In the TMI-2 reactor core cach fuel assembly is fitted with either a moveable control rod, or a fixed burnable poison rod assembly CDPRA), or a fixed orifice rod ascenbly (OR;).

The mechanism which locks the BPRA's and the ORA's into place showed wear at some other B&W installations. Consequently it was necessary to remove the reactor head and disassemble a cortien of the reactor internals to correct this problem.

That effort was completed during June con-current with corrective action on the main steam safety valve problems.

Emercency Cooline In March 1978 B&W notified us of an oversight in the safety analysis they had performed to verify adequate plant protection in the event

, of a loss of coolant accident caused by a small break in the reactor i

coolant system piping.

The permanent solution to this problem in-volves the addition of piping'and check valves to provide greater l'

redundancy to the systems which provide emerghncy cooling.

These changes may not be accomplished until the first refueling on TMI-2.

There is a possibility that THI-2 will be limited to about 93 per cent of full power pending the completion of the necessary mcdifi-Met-Ed and GPUSC are pursuing an interim administratively cation.

controlled solution to remove the power restriction which has been accepted for TMI-1, and feel generally optimistic that it will be accepted for TMI-2.

Main Steam Relief Valves 4

On April 23, 1978, the reactor tripped while operating at 28 per This type cent power during the conduct of the start-up program.

of transient leads to an increase in pressure in both the reactor plant and the steam plant.

The pressure increase is controlled by main steam safety valves. The main steam safety valves open as a result of the increase in main steam pressure and relieve this pressure to the atmosphere; however, the main steam safety valves did not reclose when the pressure returned to its normal range.

i As a result of the safety valves failing to close appropriately, cooling down excessive heat was removed frem the main steam system, the steam generators and thereby causing the reactor coolant system to cool down exccasively.

The rapid cooldown of the reactor coolant system, and the associated decrease in reactor coolant pressure, initiated injection of emergency cooling water in a manner similar to that expected during a loss of coolant accident.

it was noted that liners from During the course of this event, expansion joints in the discharge piping from the main steam safety valves had failed and were ejected into the air through the main

(

steam safety valve discharge stacks.

t July 19, 1978 Met-Ed and GPU Service Corporation established a to recommend specific action to be taken to preclude such an occur-It was well recognised by the Task Force and others that the main steam safety valves blew dow rence in the future.

i that normal adjustments to the valves would remedy that problem.

the defi-The major thrust of the initial action uns to correctcienc h correc-tive action was completed about the middle of May.

the repairs to the safety valve discharge piping, the plant was l

cooled down for cleanup of the chemicals added to the reactor coo an d

system in conjunction with injection of emergency cooling water an correction of other minor problems identified by the test program.

d pressure Upon return of the plant to normal operating temperature aninitiated without nuclear power, main steam safety valve testing w It became pressure of the valves to correct the excessive blowdown.the allowab on May 18, apparent about May 20th tha: correcting the reclosure problem wit l

a meeting was held +;1th engineering executives of f

On May 23, 1978,the Lonergan Company (designers and manufacturers valves), and GPU Service Corporation, i

action that would be taken to correct the deficient valve operat on.

d result The Lonergan Company stated thet two specific changes woulOne c back pressure caused by the design of the valve discharge piping in acceptable valve performance.

and the second involved internsl modifications to the valv d on These changes were made on two valves and testing was 31,1973, May 26, 1978, with the modified valves.

Concurrent with the joint effort w'ith Lonergan, Burns and Roewas dire (the Architect-Engineer for TMI-2) work to design modifications to the plant which would be necessary GPUSC personnel began if the Lonergan valves had.to be replaced.immediately i

of replacement valves.

a testing facility in Huntsville, Alabama became available for modification to permit off-site testing of In the first part of June, valves, and arrangements were made to test both modified and u testing at the facility. In the meantime, (51) valve tests modified valves at that plant continued through the 4th of June. Fifty-one 4, sixteen were accomplished in the period from May 18 through June One hundred eleven (111) of which were with modified valves.

1978.

None of tests were conducted at Huntsville through June 22, site resulted in acce (16) the tests at Huntsville or at the plant

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valvo performance.

July 19, 1978 1

During the period of evaluation and testing from mid-May through June 23, many alternatives were considered for resolution of the the United States for available problem. The search made throughout replacement valves resulted in no valves being found that were available immediately that would fit the TMI-2 steam line con-The Forked River Nuclear Generating Station is being figuration.

supplied valves of the same size as the Lonergan valves but which those valves will not are made by another valve manufacturer but He were able to locate be available until the end of November 1978.

smaller valves that were available immediately and similar to the valves used for TMI-1.

1978, it was apparent that the valve testing at Hunts-On June 22, ville was non-productive and that further testing of the Lonergan It was decided, valves would not achieve satisfactory results.

therefore, to purchase twenty (20) smaller valves of the TMI-l (12) Lonergan valves which did not per-j design to replace the twelve form adequately.

By that time, the necessary modifications to the main steam lines had been identified and the necessary material to T

accomplish these modifications had been locatpd, and procurement had commenced.

(4) main The steam line modifications involve welding into the four new non:les. Welding the no: les steam leads, a total of twenty (20) into place requires cutting holes in the main steam pipes, precision fit up of the new no :les with the holes and completion of the welding process which must include in-process and post-weld inspec-tions and post-weld heat treatment. In addition, the safety valve discharge piping inside the building has to be removed and replaced with different piping with a different configuration. All of this work must be accomplished in an elevated and congested area of the i

plant.

The question of why the plant was into start-up testing before the safety valve deficiency was identified deserves some comment.

Probably the major conrributor to that development was the excellent industry experience with steam safety valve performance. The situa-tion is further complicated by the size of the valves. One of the valves will pass an amount of steam equivalent to that needed to generate 100 Mw of electricity and testing facilitics for valves The Huntsville facility of that type are not generally available.

did not become available until late 1976 and it is only marginally The Lonergan velves were procured capable of testing these valves.

competitively and were the first of this sine built by the compa of the design of a smaller valve with proven performance capability.

This situation is not unusual as through the years the utility industry has frequently been forced to utilize equipment which could not be tested under operating conditions until completion of the plant construction.

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July 19, 1978

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Schedule 23,1978, The main steam safety valve modification was initiated JuneCompletion of the and is expected to be complete about mid-August.

main steam safety valve modification in mid-August will (4) months.

Unit at the end of October 1978, an overall delay of four Attachments 3 and 4 show the main steam safety valve rec to commercial operation assuming no further problems.

We will keep you informed of the TMI-2 start-up and test program status. If you cr your staff require any further information, please call on us.

Very t'uly you s,

s M

H. Dieckamp ida attachments

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Honorable Robert K. Bloom cc:

Honorable H. Wilson Goode Honorable liichael Johnson Honorable Helen B. O' Bannon Messrs. A. W. Johnson R. L. Packard M. Seidel j

M. P. Widoff i

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PROBLEMS ENCOUliTERED DURIiiG TEST PROGRAM CRITICAL PATH

DELAY TIME 3 DAYS FUEL TRANSFER MECHA!ilSMS STEAM GEilERATOR INSTRUMENTATI0il' pef!ETRATI0iis 8 DAYS REACTOR COOLANT PUMP MOTOR REVERSE ROTATICA PROJECTION 3 DAYS C

. VITAL POWER IliVERTER TRIP / SAFETY IliJECTION 10 DAYS 5 DAYS ROD WORTH HEASUREMEiiTS N0i4E BURilABLE POIS0ii ROD ASSEMBLIES

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• l Parsippany New J.;rsef 0705, PUBLIC 7

201 263 4900 i

i-UTILITIES lf

'I CORPOR'ATION 4

August 11, 1978 Pennsylvania Public Utility _ Commission Commonwealth of Pennsylvania 104 North Of fir:e Building Harrisburg, Pe.insylvania 17120 Attention: Hon. Louis J.

Carter, Chairman

Dear Chairman Carter:

During the course of the oral argument on May 10, 1978 in the Metropolitan Edison Company rate case in RID 434, and again during the course of the annual review with the Commission of Me tropolitan, Edison on June 23rd, there were discussions about when a gen-erating station should be declared to be "in commercial service".

We believe that it is imperative that the multifaceted technical and financial aspects of this question be reviewed.

It is the purpose of this letter to summarize the considerations involved ir. a declaration of "in ccmmercial service" and the impact of such declaration on the rate paying customers and the company.

In accordance with Section 501 of the Pennsylvania Public Utility Law, your Commission has, by its Regulation S57.42, directed each Class A and Class B electric public utility to keep its accounts in conformity with the " Uniform System of Accounts Prescribed for Public Utilities and Licensees (Class A and Class B)" of the Federal Power Commission (now FERC).

(The GPU subsidiaries are Class A public utilities as defined in your Commission's Regulation S57.41.)

Presumably, then the interpretations of the FPC with respect to its Uniform System of Accounts are. equally applicable to your Commission's System of Accounts.

Criteria The criteria available for reaching a judgment about the appropriate timing of a declaration of "in commercial service" As the FPC for utility plant can not be precisely articulated.

has pointed out, it is not controlled by artificial rules, is not a matter of formula but is a matter of reasonable judgment based on a consideration of all the pertinent facts; neither

Pennsylvania Public Utility Commission Page 2 August 11, 1978 full capacity generation nor the completion of all construction activities, nor the making of permanent installations, as against those of a temporary nature, are necessary for this determina-tion.

Re Pennsylvania Water and Fawer Company, (1949) 82 PUR NS 193,237.

However, some general prerequisites can be stated:

(a)

The plant should have been submitted to a series of operational tests sufficient to assure that construction has been substantially completed in accordance with plans and specifica-tions and that the plant as constructed is capable of providing the service intended.

(b)

In some cases (a) above has also been influenced by the need to assess the operational acceptability of major items of plant equipment and such tests have been the basis for acceptance and supplier payments.

i J

(c)

The plant start-up test and evaluation program should be sufficiently complete to permit all. or part of the plant's capacity (kw) to be made available to the system or pool operators for j

economic dispatch.

(d)

The plant should be capable of producing significant energy (kwhrs.) at dependable capacity (kw) levels for use by the rate payers.

(e)

General Instruction 9D for the Plant Accounts of the Uniform System of Accounts requires that a nuclear plant be declared "in commercial service" within 120 days of initial test power operation, unless the company is able to provide detailed justification for extension of the test period; this term establishes a normal time-frame for the declaration of "in commer-cial service".

(f)

In the case of TMI-2, items (a) and (b)'above are specifically elaborated to include a number of performance tests to be successfully completed before the Operating Permit, issued by the Nuclear Regulatory Ccmmission, can become effective for full power operation.

In Herman Dieckamp's letter, dated July 19, 1978, in which he reported on the TMI-2 start-up and test status, he pointed out that the test program is a formal and detailed program planned to fully exercise all of the plant equipment

- ' Pennsylvania Public Utility Commission Page 3-t August 11, 1978 under carefulli controlled and monitored conditions so that any l

deficiencies in design or construction can be identified and he annexed an outline of that program as initially developed and as modified in the light of the problems that have arisen during the testing program.

Even though the items enumerated above are designed to assure that plant construction culminates in an operable plant, the start up test program can assess initial operability and control but cannot assess long term equipment lifetime or reli-ability problems that can significantly influence plant produc-tivity or capacity factors, i.e.,

the attained fraction of theoretical energy output.

What this boils down to is that, under your Commission's Uniform System of Accounts, a generating unit must be trans-ferred from CWIP to plant in service when, after a reasonable testing period, it is ready for service even.if*there are i

some clean-up construction activities remaining.

Energv The benefits of all energy production flow directly to the customers under the energy adjustment clauses in effect in GPU's Pennsylvania and New Jersey operating companies.

All energy from test operations as 'well as frcm commercial operation acts immediately to displace higher cost generation or inter-change purchases and all financial impact of such changes in i

energy sources are included in the workings of each subsidiary's energy adjustment clause so as to retain all benefits for the customers.

The earnings of the operating companies are not influenced by the availability of lower cost energy from new plants whether or not they are still in test or have been declared " commercial".

Accounting f

During construction, i.e.,

prior to " commercial in se rv ice", all costs are capitalized for recovery via depreciation charges over the life of the project (except those financing costs associated with CWIP in rate base).

However, as soon as the plant is declared "in commercial service" a number of spe-cific changes in accounting take place:

(a)

The costs of financing the invcstment are no longer capitalized (AFC, is stopped).

b

.P'ennsylvania Public Utility Commission j

Page 4 August 11, 1978 (b)

Depreciation is initiated and charged to j

operating dxpense.

t j

(c)

All O&M expenses are no longer capitalized and, j

instead, are charged to operating expense.

I (d)

To the extent that the GPU operating companies are short of their capacity obligation to PJM, the com-panies' annual capacity payments to PJM are reduced (currently at the rate of about $23/Kw).

4 j

(e)

Job development and/or investment tax credits and liberalized depreciation deductions for tax purposes reduce the company's current cash obligation for Federal Income Tax, but do not appreciably impact current net income.

These credits and. deductions are recog'ized in rate making as they are normalized, by tax law, over.the life of the plant.

Any resulting cash, to the extent available, displaces external financings f6r construction and other needs.

The magnitude and impact of these accounting changes i

can be seen in the following summary of the revenue require-I ments of the 75% of TMI-2 owned by Met-Ed and Penelec:

1 (a)

Financing Costs

$ 82.4 million/yr.

(b)

Depreciation 18.9 (c)

O&M 12.6 j

(d)

Capacity Payments (11.6)

$102.3 million/yr.

}

If these costs are not recognized in rate making which

~

provides revenues to offset these costs, the impact of 100% of TMI-2 'on GPU's earnings is about $55 million/ year or about 94 share per month of delay in rate recognition of. these costs.

It should be noted that'the bulk of these costs, i.e.,

return, taxes, and depreciation, are precisely definable and require no experience. base for rate making.

1 i

Timing The timing of declaring a plant "in commercial service" is a matter of significant concern because of

.the cost impact on both the rate payers and the company.

i L-.

.~

1. ' Pennsylvania Public Utility Commission

'Page 5

),,

August 11, 1978 From the customer's point of view, the rate increase necessary to recognize the costs of the new plant can never be welcome because today's ' incremental costs of ownership of new cap & city are ge'nerally higher than the energy cost reductions flowing from the displacement of low ef ficiency or high fuel cost generation and interchange.

As noted, in the case of TMI-2, for the first year, the revenue requirement for the ownership of 75% of the unit is about $102 million; the energy savings for this 75% portion of the unit at a capacity factor of 70% would be about.S67 million.

The net cost of ownership 7

is about equal to the energy savings in the third to fourth year when the unit is somewhat depreciated, the load has grown, and the projected cost of fuel and interchange have risen by virtue of inflation.

If for any reason the unit output varies from expectation, the energy savings are proportionately changed.

Thus far, the record of the two GPU System operating nuclear units (TMI-l and Oyster Creek) has been well above the national average.

All of the benefits of this above-average performance have automatically flowed to the customers and this is appropriate.

It must be emphasized, however, that the complexity of modern plants and the changing requirements of NRC, EPA, DEP and other governmental agencies precludes any ability to guarantee a continued level of plant output.

To the extent that the. customers are paying the financing, depreciation and ownership costs of a new plant in current revenues, such costs are not being capitalized for recovery in the future.

Ultimately these costs must be paid and the only question is when.

In a true economic 1

sense the ultimate cost to customers, including the cost of money, is it. dependent of the timing of the conversion 4

from AFC to cash revenue requirements.

In terms of equity to the respective groups of customers, it is hard to argue that current customers should, by avoiding the unpleasant-ness of a rate increase, be in a position to derive energy cost benefits while not contributing to the cost of owner-ship by continuing to capitalize such costs for future customers to have to pay.

Indeed the concept of changing the accounting when the plant becomes " commercial" is only an attempt to fairly distribute the cost among the customers that will benefit from the investment over its lifetime.

The desired matching of costs and benefits must be viewed over the plant lifetime and not controlled by short term considerations, j

If the customers do not pay the costs of ownership

'which are no longer capitalized af ter the " commercial" date, the stockholders of the company must absorb those costs while the customers gain the energy savings.

This disparate result

.~

r Pennsylvania Public Utility Commission Page 6 August 11, 1978 makes it immediately apparent why the company is concerned about the timing of rate proceedings so as to reasonably coordinate the " commercial" declaration and the granting of revenues which reflect the base revenue requirements of a new plant investment.

Attachment A was discu'ssed during the Met-Ed annual review on June 23rd, and attempts to illustrate the impact on earnings that could result from a 12-month delay in recognizing Me t-Ed 's 50% share of TMI-2.

In that example, the equity return attribut-able to plant-in-service falls from 13.2% to 4.9%.

A company has no incentive to prematurely declare a even with concurrent rate relief, such plant commercial because, a declaration subjects the Company to risks of extraordinary O&M costs which the company would have to absorb.

On the other hand, inconsistent with your Commission's System of even if it were not Accounts, the company would be reluctant to delay the " commercial" declaration because the basic requirement for revenues would in-crease with time and the acceptability of the required increase Even though can only diminish in the eyes of the rate payers.

the company seeks to avoid disastrous earnings losses due to before associated rate declaring plant "in commercial service" relief is granted, the company is not without risk.

Any his-torical review of actual vs allowed returns on equity reveals the continuing presence of significant risk.

We would appreciate the opportunity to review this matter with you or your staff in more detail and we are prepared to work with you to further define the criteria for " commercial service".

Sincerely, Ida attachment cc: Honorable Robert K.

Bloom Honorable Helen B.

O' Bannon Honorable Michael Johnson Honorable H. Wilson Goode Messrs. A. W. Johnson R.

L. Packard M.

Seidel W.

P. Thierfelder M.

P. Widoff 2

I I

^

ATTACHMENT A

+

• 0 IMPACT OF TMI-2 W/O RATE RELIEF (SMillions)

W/TMI-2

_/30/78 4

1026 686 Avg. Plant in Service ( AP) 4 96.1 96.1 Operating Income (BIT)

TMI-2 Expenses 8.4 O&M 12.6 Depreciation (8.5) i 83.6 Capacity 96.1 Adjusted Operating Income 37.6 25.2 Interest (.0474)x(.491)x(AP)

'46.0 70.9 17.0 Taxable Income 30.3 29.0 Income Tax 40.6 Available for Pref. and com.

10.4 7.0

(.0736)x(.138)x(AP) 18.6 Preferred Div.

33.6 4.9:

Income for Common 13.2 Income Return on Equity

(.371 (AP)

~

• Plant only 6/22/78' 9

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y.d hk WdtianoC Kuhns Cha.rman

--7Jr GENERAL 260 Cherry HGoad

,p 3 PUBLIC Parsippany Ne.v Jersey.

L(vdgfb'A UTILITIES 201 263-4900 V

CORPORATION November 30, 1978 The Hon. Joel R. Jacobson, Commissioner Department of Energy State of New Jersey 101 Commerce Street Newark, New Jersey 07102 The Hon. George H.

Burbour, President Board of Public Utility Commissioners State of,New Jersey 101 Commerce Street Newark, New Jersey 07102 The Hon. W. Wilson Goode, Chairman Pennsylvania Public Utility Commission Commonwealth of Pennsylvania Post Office Box 3265 Harrisburg, Pennsylvania 17120 Gentlemen:

Due to the extensive interest shown by the Commissions in the status of Three Mile Island Nuclear Station Unit 2, particularly as to when the unit will be ready to be placed in commercial service, we are providing an updated status on the unit.

The unit is currently starting up from a maintenance period and we expect to achieve full rated generator output by next week.

Testing at the 100 per cent power level, which culminates in a full load generator trip, is scheduled to be completed by December 12.

The unit should be ready to be declared commercial following return from the full load generator trip.

We do not know of any remaining items which are likely to require a scheduled outage prior to the first refueling.

As recently as November 21, we still expected to be within a couple of days of our scheduled November 30, 1978 in-service date'but further delay was encountered when equip-ment problems led to contamination of the feedwater system with turbine lubricating oil.

Although the amount of oil was very slight, extensive efforts were necessary to ensure l

it was removed from all systems which may have been contam-inated by the oil.

l

[

Jer:cy Cen:ral Power & L'Oh! Company /t.tetropo'. tan Et! son Com;uny/ Pennsylv. inia Cree:ric Comp.iny

.4 v*

2-The full load generator trip will mark completion of a start-up and test program which has applied to all unit structures, systems and components necessary to conduct commercial operations.

It was planned so as to fully exercise all of the plant equipment under carefully con-trolled and monitored conditions and thereby identify any deficiencies in design or construction.

The end objective of the test program has been to verify that the plant performs in full conformance with all operating and licensing specifications.

The program consists of 170 individual tests, all of which required a specific, detailed procedure.

Approximately half of these tests relate to systems with nuclear safety implications and, consequently, were subject to NRC regulatory requirements.

Within that group, NRC staff personnel reviewed both the procedures and the test results in many instances.

The NRC required the conduct of very extensive testing of the plant as a whole, and of its'individua.1 systems, subject to rigid administrative and technical contrbls, and independent surveillance, review and audits.

These same controls also were utilized in conducting the portion of the test program not subject to NRC regulations.

To date, the unit has operated at 75 per cent power or greater for over 200 hours0.00231 days <br />0.0556 hours <br />3.306878e-4 weeks <br />7.61e-5 months <br /> and has produced almost 300,000 MWH's.

It will have produced about 500,000 MWH's upon completion of the test program.

We believe that completion of this program will provide assurance that the unit is capable of producing significant energy and is then ready to be placed in commercial service.

Sincerely, William G.

Kuhns Chairman WGK:mn cc:

The Hon. Robert K.

Bloom The Hon. Louis J. Carter The Hon. Michael Johnson The Hon. Helen B. O' Bannon The Hon. Edward Hynes The Hon. Richard McGlynn W. Gural M.

P. Widoff

.