ML19319D148
| ML19319D148 | |
| Person / Time | |
|---|---|
| Site: | Crystal River  |
| Issue date: | 10/01/1975 |
| From: | Office of Nuclear Reactor Regulation |
| To: | |
| Shared Package | |
| ML19319D142 | List: |
| References | |
| NUDOCS 8003130715 | |
| Download: ML19319D148 (10) | |
Text
OCT 011975 9
ENCLOSURE 1 - CP AMENDMENT FINANCIAL QUALIFICATIONS I.
INTRODUCTION The Nuclear Regulatory Commission's ' regulations relating to financial data and information required to establish financial qualifications for applicants for facility construction permits appear in Paragraph 50.33(f)*
of 10 CFR Part 50 and Appendix C to 10 CFR Part 50.
In accordance with these regulations Florida Power Corporation (FPC), on behalf of itself and eleven additional co-owners (listed in section II below), has filed Amendment No. 46 and Supplement No.1 to its Application for Licenses for Crystal River Unit 3 Nuclear Generating Plant.
?.mendment No. 46 is FPC's annual update of its Application for Licenses.
Supplement No. I consists primarily of financial information on the owners that was requested by the staff for use in completing its safety evaluation.
The folicwing analysis surm:arizes our review of the Application including the amendments and Supplement No.1 and addresses the financial qualifications of the, eleven additional co-owners (ten of which are municipals and one cooperative) to purchase an aggregate ten percent undivi.ded interest in the facility.
II.
CONSTRUCTION COST ESTIMATES AND THE ACCOMPLISHED SALE FPC estimates that the cost of the completed facility will total
$448.5 million including nuclear fue.l..fo'r the first core. The physical facility is presently approximately 95% complete. On July 31, 1975, FPC closed a sale for. an aggregate ten percent undivided ownership interest in the facility with the eieven additional co-cwners.
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2 The Crystal River Ur$it 3 Participation Agreement was executed by FPC and the eleven additional participants on the date of sale.
The agreement provides, among other things, for the sharing of construction costs both at the closing of the sale and through the completion of the unit.
Each
- additional participant is billed monthly for its proportionate share of the total estimated costs for the following month adjusted for differences d
between the previous months' estimate and actual charges.
At the closing, each of the eleven additional participants paid to FPC 85.8 percent of its
. total estimated contribution to the project, for a total of $38,491,034 (or 85.8 percent of $44,846,034 which in turn is ten percent of the total estimated cost.of the facility).
The table shown below summarizes the ownership; percentage of each additional participant in the unit as well as the dollar amounts that were actually paid to FPC at the closing and the estimated additional amounts to be paid through the completion of the unit.
Each additional participant's ownership percentage in the facility is equal to its percentage entitlement in the electrical capacity and out-put of the plant.
~ CRISTAL RIVER UNIT 3 PARTICIPATION Ownership Amount Paid Estimated Addtl Percentage.
At Closing Amt to be Paid Thru Ccmoletion City of Alachua, Fla.
0.0779
$ 299,845
$ 49,506 City of Bushnell, Fla.
0.0388
~149,345 24,657 City of Gainesville, Fla.-
l.4079 5,419,153 894,721 City of Kissi: nee,Fla.
0.675'4 2,599,684 429,217
Participation (continued)
Ownership Amount Paid Estimated Addtl.
Percentage At Closing Amt to be Paid Thru '
Completion City of Leesburg, Fla.
0.8244
$ 3,173,201
$ 523,906
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City of _New Smyrna Beach, Fla.
& New Smyrna Beach Utilities 0.5608 2,158,577 356,388 Commission City of Ocala, Fla.
1.3333 5,132,010 847,312 Orlando Utilities Commission 1.6015 6,164,339 1,017,753 Sebring Utilities Commission 0.4473 1,721,704 284,259 Seminole Electric Coop., Inc.
1.6994 6,541,166 1,079,969 City of Tallahassee, Fla.
1.3333 5,132,010 847,312 TOTALS ---------------
10.0000
$38,491,034
$6,355,000 III.
SOURCE OF ADDITIONAL FUNDS Florida's Joint Power Act of 1975 authorizes municipal and cooperative utilities to commit public funds and to issue securities for the p' rpose of u
acquiring ownership _ shares in joint electric power projects such as Crystal River Unit 3.
The following is a summary of the financing methods actually used and planned to be used by the eleven additional participants in pro-viding their respective dollar shares.
We regard the accomplished financing noted above to be substantial evidencero'f these utilities' ability to finance each of their respective ownership shares in the manner indicated below.
The City of Alachua plans to repay its short-tern bond anticipation notes (which were used to meet earlier immediate requirements) with
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municipal bonds. Alachua's remaining requirements for Crystal' River Unit i will also be covered by long-term bonds.
The City of Bushnell is using short-term bank loans for interim require-ments. The remainder of Bushnell's ownership share will be financed with,
- a. revenue bond issue which in addition will be used to refinance the bank loans.
The City-of Gainesville also plans to issue revenue bonds both for refunding its short-term general obligation notes and for financing its remaining contribution to the nuclear facility.
The City of Kissimmee plans to issue municipal bonds to cover its entire ownership share in the facility including the refinancing of a short-tem loan which was used to meet its initial obligation to FPC.
The City.of Leesburg plans to issue revenue certificates to finance its ownership share and to refund short-tem notes that were used for its initial payments on its ownership share.
The City of New Smyrna Beach Utilities Commission financed the, initial payment to FPC with revenue anticipation notes.
These short-term funds are to be refinanced and the balance of the city's participation is to bb pro-vided through long-term utility revenue certificates.
The City of Ocala's ownership share will be financed with municipal revenue. bonds. The proceeds from these lo~ng-term cbligations will.also be
- used to refund interim financing requir$ments.
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The Orlando Utilities Commission plans to finance its participation with municipal revenue bonds.
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s The Sebring Utilities Commission provided its initial funding through short-term bank loans.
Refinancing will be accomplished through electric and water revenue bonds as will the balance of Sebring's participation.
Seminole Electric Cooperative, Inc., is composed of twelve member c'oo'peratives, each of which is contractually obligated to purchase its power needs exclusively from Seminole.
Seminole plans to finance its participation in the nuclear unit through a Federal Financing Bank loan guaranteed by the Rural Electrification Administratiod. The loan may be supplemented by advances frcm the member cooperatives.
The City of Tallahassee plans to sell electric revenue bonds to finance its entire ownership share in Crystal River Unit 3.
IV.
CONCLUSION Based on the preceding analysis, we have concluded that the City of Alachua, the City of Bushnell, the City of Gainesville, the City of Kissimmee, the City of Leesburg, the City of New Smyrna Beach and the New Smyrna Beach Utilities Commission, the City of Ocala, the Orlando Utilities Commission, the Sebring Utilities Commission, the Seminole Electric Cooperative, Inc.,
and the City of Tallahassee 'are financially qualified to purchase their respective ownership shares (as specified in section II, above) in Crystal River Unit 3 Nuclear Generating Plant.
Th,is conclusion is based on our determination' that the financing plan' i's' within the zone of reasonableness and thus' provides reasonable assurance of obtaining the fonds necessary to complete the design and construction activicies over the life of the construc-
- tion pennit.
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ENCLOSURE 2 - OL FINANCIAL QUALIFICATIONS
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I.
INTRODUCTION The Nuclear Regulatory Commission's regulations relating to financial data and'information required to establish financial qualifications for, applicants for facility operating licenses appear in Paragraph 50.33(f) of 10 CFR.Part 50 and Appendix C to 10 CFR Part 50.
In accordance with these regulations Florida r'ower Corporation (FPC), on behalf of itself and eleven additional co-owners (listed below), has filed Amendment No. 46 and Supplement No.1 to its Application for Licenses for Crystal River Unit 3 Nuclear Generating Plant.
Amendment No. 46 is FPC's annual update of its Application for Licenses.
Supplement No. 1 consists primarily of financial information on the owners that was requested by the staff for use in ccm-pleting its safety evaluation.
The following analysis summarizes our review of the Application including the amendments and Supplement No.1 and addresses the financial qualifications of FPC and the eleven additional co-owners (ten of which are municipals and one cooperative) to operate the subject facility and, if necessary, to permanently shut it down and main-tain it in a safe condition.
an July 31, 1975, FPC closed a sale for an aggregate ten percent undivided ownership interest in the facility with the eleven additional Thetableshewnbelowindi,ckte,seachparticipant'spercentage co-owners.
entitlement in the electrical capacity and output of the plant. These j
i percentages are identical to each participant's ownership percentage in
-the facility.
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Participant Percent Entitlement Florida Power Corporation 90.0000 City of Alachua, Fla.'
O.0779 City of Bushnell, Fla.
'O.0388 City of Gainesville, Fla.
1.4079 City of Kissimmee, Fla.
0.6754 City of Leesburg, Fla.
0.8244 City'of New Smyrna Beach, Fla.
& New Spyrna Beach Utilities 0.5608 Commission City of Ocala, Fla.
1.3333 Orlando Utilities Commission 1.5015 Sebring Utilities Commission 0.4473 Seminole Electric Coop., Inc.
1.6994 City of Tallahassee, Fla.
1.3333 TOTAL --------------
100.0000 II.
ESTIMATED OPERATING AND SHUTDOWN COSTS-For the purpose of estimating the unit's annual operating costs, the applicant assumed that-the unit would begin operation in September 1976. The applicant's estimates of the annual cost of operating the 5
facility during each of the first fiy,e / ears of commercial operation are presented below. The unit costs (mills per kwh) are based on a unit capacity of 855 MWe and on the folicwing projected plant capacity e
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O factors:
7976-70%; 1977-86%; 1978-86%; 1979.-90%; and 1980-92%.
The.
5-year. average costs were calculated by annualizing the September thru December costs of 1976 in combin,ation with the annual estimates for 1977 thru 1980.
Total Cost Mills per Kwh (dollars in thousands) 1976
$ 27,615 15.80 1977 102,240 15.87 1978 99,880 15.51 1979 96,594 14.33 1980 94,049 13.65 5-year 95,122 15.03 average The above estimated unit operating costs ccmpare favorably with FFC's recent revenue experience.
For the '2-month period ended May 31, 1975, FPC's unit price was 34.10 mills per kwh on its system-wide sales'of
. electric power to all customers, well above the total estimated unit operating costs for the. subject facility.
The sources of funds from the participants to cover operating costs and shutdown and maintenance costs is discussed in section III, below.
In estimating the costs of permanentTy shutting down the facility and maintaining it i' a safe shutdown condition, FPC assumed that the reactor and its associated nuclear systems would be left in place and that all nuclear fuel would be removed from the plant and transported
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4 off site for final processing.
The applicant estimates that the permanent shutdown operation would cost $750,000.
The estimated annual cost to main-tain the facility in a safe shutdown condition is $50,000.
This cost includes isolating the plant with suitable fencing and monitoring of the area by guards.
III.
SOURCES OF FUNDS AND SHARING OF COSTS According to the Crystal River Unit 3 Participation Agreement executed by the co-owners, each participant is obligated to share in the total oper-ating costs of the unit (and in the snutdown and maintenance costs) in the same percentage as its percentage entitlement in the electrical capacity and output of the plant (as indicated in section I above).
FPC's source of funds required for its ninety percent share of the unit's total cperating expenses and for shutdcwn and maintenance ex::enses will be revenues derived from the sale of electric power to its retail and wholesale customers.
As explained in section II above, FPC 's recent actual unit sales price is substantially higher than the estimated unit ecst of operating the facility for the first five years of comercial operation.
In addition.it is reaso,nable to assume 'that FPC will receive future rate adjustments to compensate for increased costs of operating its system.
The Florida.Public Service Cemission recently allowed FPC a $45.1 million per-manent retail rate increase effectiye,! ugust 22, 1975, and designed to A
increase total operating revenues by 12.5 percent.
As provided by the Participation Agreement, the additional ten percent of the total operating expenses and shutdown and maintenance excenses will be provided in the aggregate by the municipal and cooperative participants.
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o The source of funds for these expenses will Le revenues from the sale of electric power to the customers of each system.
FPC will bili each additional participant monthly for its proportionate share of the total estimated costs for the following month adjusted 'for differences between the previous month's estimate and actual charges.
Florida's Joint Power Act of 1975 and its Revenue Bond Act of 1953 together empower the eleven additional participants to establish and periodically revise rates in order to fully recover all costs of operation including those related to Crystal River Unit 3.
Such rates are not sub-ject to regulation by any authority other than the participants themselves.
Under the terms of the Wholesale Power Contracts between Seminole Electric Cooperative, Inc. and its twelve member-3ystems, Seminole is the exclusive power supplier to the systems and it also has the authority to establish rates to fully cover all costs of operation including those related to Crystal River Unit 3.
IV.
CONCLUSION Based on the preceding analysis, we have concluded that Florida Pcwer Corporation, the City of Alachua, the City of Bushnell, the City of Gaines-ville, the City of Kissimmee, the City of Leesburg, the City of New Smyrna Beach and the New Smyrna Beach Utilitie,s Commission, the City of Ocala, the Orlando Utilities Commission, the Sebrin(Utilities Commission, the Seminole
. Electric Cooperative, Inc., and the City of Tallahassee are financially l
qualified to operate the Crystal River Unit 3 Nuclear Generating Plant and, if necessary, to permanently shutdown the facility and maintain it in a safe shutdown. condition.
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