ML19317G418
| ML19317G418 | |
| Person / Time | |
|---|---|
| Site: | Crystal River  |
| Issue date: | 07/16/1968 |
| From: | Lovejoy C US ATOMIC ENERGY COMMISSION (AEC) |
| To: | |
| Shared Package | |
| ML19317G410 | List: |
| References | |
| NUDOCS 8003030821 | |
| Download: ML19317G418 (6) | |
Text
{{#Wiki_filter:l \\ UNITED STATES & AM RICA ATCHIC ENERCY CQ9(1881GI s' \\ In the Matter of ) Docket No. 50-302 0 1LORIDA poler CCRPORATION ) g ) e (Crystal River Unit 3 Nuclear ) Cenerating Plant) ) -{ a. 4 ~. n TESTIMONY OF CHARLES A. IMEJ0f WFICE W THE CGITROLLER, AEC f c,e Hy name is Charles A. Lovejoy. I live at 9205 Wadsworth Drive, Bethesda, ~ (. Maryland. a I am a graduate of Benjasin Franklin University with an MCS Degree in 5 A. Accounting, i g ~
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rro 1933 e is't i ritrea rieer or cce===i== a atei== va teta== a iW+ with the U.S. Covernment. I was Controller of the United Services Life T"- 1 Insurance Company for two years before entering the military service in 1943. After discharge from the Army, I served for seven years in various lg a, staff and supervisory positions in the audit and accounting divisions of i i g the Reconstruction Finance Corporation where my duties included financial if analyses and review of the operations of borrowing institutions. M ?V3.f Since 1953 I have been a staff accountant in the Office of the Controller M'a of the Atomic Energy Cccanission. My duties include the preparation of financial analyses of firms applying for special nuclear material, facility Y-bhh. h licenses, and construction permits, I have appeared as the financial gy witness for the AEC staff in hearings on the applications for Class 1% e licensesheldoverbepastseveralyears. M LY. .N .a n ---.:. .,, a # ~ kr Y$ LU Y 'n N %Y. ? -- U
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~ \\ 1 1 e i 2- ) i:<- I h l I have revielred the finsacial information presented in the application 'D j~M g and esendments thereto of the Florida, Power Corporation for a permit to
- L construct a nuclear electric generating plant with an expected initial 2,k c$q5 gross electrical output of 855 megawatts (885 MWe stretch capacity) to be
?: SM known as the Crystal River Unit 3 Huclear Generating Plant and to be pg Ny located near Crystal River, Citrus County, Florida. Based on this infor-fy mation, it is my opinion that the Florida Power C'orporation is financially 5 qualified to design and construct the proposed facility. My opinion is $m$ \\ f@jC based upon the following facts and considerations: E 76 iUli 1. ne applicant states that its estimate of the cost of the Crystal gg m
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River Unit 3. including the first-core fuel loading (exclusive of M the special nuclear material contained), is $126.2 million, made
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?@ %,3 M(2Ep Total nuclear production plant costs (exslusive of site) $114,168,000 Substation costs 3,660,000 Nuclear fuel inventory cost - first core 8,336,000 Jgr Yf. - Total estimated cost $126,164,000 N% '01 ne Division of Construction has reviewed the details of the estimated M mE s costs for construction of the nuclear production plant ($114.2 million) iT? 4 M and has advised me that it considers the estimate to be reasonable, g &e@E O.- 2. ne estimated initial core fuel costs of $8.34 million does not include na?; any cost for the special nuclear material contained therein as the DE 2:? M py W i ~ 4 7 4.5Je g;,., <.,, g,T {,ig ? e,y]7 4 .g.) ,. q g., ,.3 c ' d f ' '% _ 3 J'j ? **;jfM. t i g v_i 3 .y -yp; _ %,,p 3 g;;sj, (, Q_ -. g g; p f y.g K-.y,; + I -9 es
L Y: 3 + spplicant intends to lease the enriched uranium from the Cosmeission until mid-1973. The Division of Reactor Developenant and Technology J has reviewed the fuel requirement for the first core and states that c- ' ene quantity of 91,610 kilograms of UO, as listed on page 3-8 of the jm J 1 a 2 Preliminary Safety Analysis Report, is a reasonable amount for a reactor of this'aise and power level. 3. Florida Power expects to finance Crystal River Unit 3 as an integral -A part of its total construction progras through the use of funds l g internally generated, from short-term bank loans and fram the sale of Q(g th debt and equity securities. Over the five-year period through 1967, M ,' M g construction expenditures aggregated $232 million, of which almost 4h-w 507. were obtained from internal sources (e.g., reinvested earninge vQp and depreciation accruals) and the balance from the sale of bonds M and common stocks and other outside sources. In view of the magni. k-9:+%.y v. tude of Florida Power's resources, the strength of its financial i4&; . $ff a position, 'its earnings r cord, the high regard held for its bond W-um issues, and its record of successfully financing its construction Nb pp requiranents in the past, it is reasonable to assume that the Company k.,s d will have little real difficulty in financing the planned construction kd 2' i y- ?. of the proposed nuclear facility to help meet anticipated der: ands for y-g i p-its services. z. 4. The Company is soundly financed and has plentiful resources at its A.y? en 1!t command. As of December 31, 1967, cash, temporary investments and 1-@ j a::*. e p _ hN {; f, {;}i i ' [d,h. j ).
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i 4 s -.t net receivables totaled $14.4 million. Operating revenues for the Y ] 4-year were $119.9 million. H e relationship between long-term debt QlW { and capital stock is sound (the debt being 54% of total capitalisation) G and the Company is not overcapitalized on a book value basis, as evi. W s r1A denced by the ratio of net plant to capitalization of 1.09 ne J Company's current Dun and Bradstreet credit rating is the highest $, J.e-4 (AaA1) and Moody's Investors Service rates the Company's first 1 .Q mortgage bonds (92% of the long-term debt) as Aa (high). 9% 8,., 5. he Company enjoys a high level of earnings. Operating revenues g have steadily' increased over the past 5 years from $86.8 million h 21 in 1963 to $119.9 million in 1967 or 38%. n e earnings, after taxes, O a have increased from $16.8 million to $23.3 million or 39% over the M .A same period, and earnings per share of comon stock have increased P' \\ km from $1.59 to $2.27 or 43%. He volume of electric salesis also yM steadily rising, increasing from 4,002 million Kwh in 1963 to 6,081 Kwh ?f .:g-in 1967 or 52%. If present demand continues or increases, it is 'y l reasonable to assume that the above b. vel of earnings will continue, e &?$ ~T 6 Le pertinent financial ratios ccuputed from the financial data contained M l
- Th in the 1967 Annual Report indicate a strong financial position and cca-
$) l ?.% pare favorably with those of the electric utilities industry as a whole, jff M A copy of my financial analysis, refleeting these ratios and other 4 A pertinent data, is attached as Appendix A. In brief, the ratio of the M JE 2::d-id L.M w -,-Y J-Y'-,3 Y W T,Y F)-.'" K 4g , - P, K_ 3e 4 E- -I7- -~- '7f 7 F f, ] p V [ ,L M A,;1 d&S"$ jib G T Nsf' - &' ; Ns & 'd N J W,ib h_. , '.h' 7 M -$$ nth g.4'irW ' Al' ' i,- +
l 4 O longeterm debt of $240.6 million to net utility plant of $482.6 million i is.50; the ratio of net plant to capitalization is 1.09; the proprietary ratio is.40 to total assets of $506.7 million; the ratio of operating expenses, including income taxes, of $87.6 million to operating revenues e. l of $119.9 million is.73; the rate of earnings on the total investment 1 in Florida Power is 6.47, and on the common stockholders investment is i l j 13.0%; the number of times the interest on the bended debt was earned (.. is 3.4; and the Company's retained earnings as of December 31, 1967, totaled $74 million. l \\ .w \\ h j ) m I.f[; q -g y'k l n i k:h i nn \\ l w
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l j Arramoxx A ruRIDA POWER CORPG ATION q DOCKET so. 50-302 1 FINANCIAL ANALYSIS j ? (dollars in millions) 2 ; Calendar Year Ended Dec. 31 1967 1966 1963 .; 4 .y ]L Lor.g-term debt $240.6 (219.8 $156.3 Sf} Utility plant (net) 482.6 453.4 352.7 f, jl ' Ratio - debt to fixed plant .50 48 44 Utility plant (net) 482.6 453.4 352.7 h[ Capitalization 441.7 412.3 327.5 ME Ratio of net plant to capitalization 1.09 1.10 1.08 Stockholders' equity 201.1 192.5 171.1 m Total assets 506.7 478.9 373.2
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Proprietary ratio 40 40 46 Net income after preferred dividends 21.8 20.3 15.3 M' coannon equity 167.6 159.0 137.6 ^4h Rate of return on comuson. equity 13.01 12.8% 11.1% Net income 23.3 21.8 16.8 M Stockholders' equity 201.1 192.5 171.1 Rate of earnings on stockholders' 11.6% 11.3% 9.8% M investaent M Net incoise before interest 32.5 29.1 22.2 i Liabilities and capital 506.7 478.9 373.2 N' Rate of earnings on total investment 6.4%. 6.1% 5.9% 41; O. u r. Net income before interest 32.5 29.1 22.2 Interest on long-term debt 9.6 8.6 6.1 -Q No. of times fixed charges earned 3.4 3.4 3.6 M. Net income 23.3 21.8 16.8 Operating revenues 119.9 111.7 86.8 ?-? Net inccue ratio 19.4% 19.5% 19.4% .Q Operating expenses (incl. taxes) 87.6 82.6 64.6 , y;C Operating revenues 119.9 111.7 86.8 f Operating ratio .73 .74 .74 -}cg Retained earnings 14.0 65.5 44.1 g Earnings pet share of Common $2.27 $2.12 $1.59 1967 1966 7 Capitalization: Amount
- 7. of Total Amount
- 7. of Total If Long-tens debt
$240.6 54.5% $219.8 53.3% ?.k Preferred stock 33.5 7.6 33.5 8.1 13 Ccesnon stack 167.6 37.9 159.0 38.6 - [f; Total $441.7 100.07. $412.3 100.07. [{ Moody's Bond Ratings: i:l First Mortgage As i Debentures A /s l Dun and Bradstreet credit [ Rating AaA1 wwmaxwwammwwwawm l l .}}