ML19320B051
| ML19320B051 | |
| Person / Time | |
|---|---|
| Site: | Allens Creek File:Houston Lighting and Power Company icon.png |
| Issue date: | 07/01/1980 |
| From: | Copeland J, Newman J BAKER & BOTTS, HOUSTON LIGHTING & POWER CO., LOWENSTEIN, NEWMAN, REIS, AXELRAD & TOLL |
| To: | Doggett S, Perrenod W AFFILIATION NOT ASSIGNED, DOGGETT, S.A. |
| References | |
| NUDOCS 8007090189 | |
| Download: ML19320B051 (21) | |
Text
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i 7/1/80
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD 0 s In the Matter of S
- S HOUSTON LIGHTING & POWER COMPANY S Docket No. 50-466 S yI&
(Allens Creek Nuclear Generating S @ g Station, Unit 1) S 9
6 USNRc .2 HOUSTON LIGHTING & POWER COMPANY'S ANSWERS TO DOGGETT'S AND PERRENOD'S hg- UUl. 41980
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FIRST SET OF INTERROGATORIES Office Docketing aof s g,3',0[h" Branch In response to the First Set of Interrogato 1 propounded by Stephan A. Doggett and W. Matthew Perrenod, Houston Lighting & Power Company (" Applicant") answers as follows:
INTERROGATORY NO. 1:
(a) Identify each witness, other than an expert witness, who Applicant may call in this proceeding with respect to consolidated contentions Doggett 4 and Perrenod 1, and provide a summary of the testimony which each such witness is expected to offer.
(b) Identify all documents upon which each such witness may rely in any way, and provide copies of any such documents.
ANSWER:
Applicant anticipates that-Mr. Hollis Dean will testify, if required, on the contentions related to financial qualifications. Mr. Dean is the chief financial officer of the Company with ultimate responsibility for the accounting, auditing, computer services and treasury departments of the 8007090l l
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Company. In his capacity Mr. Dean is familiar with the financial integrity of the Company and he is expected to
' testify that the Company is financially qualified to construct the Alle. reek facility. At this time, Mr. Dean has not prepared his testimony nor has he identified any documents upon which he intends to rely for purposes of his testimony.
INTERROGATORY NO. 2:
a) Identify each expert witness who Applicant expects to call in this proceeding with respect to consolidated contentions Doggett 4 and Perrenod 1.
(b) State the qualifications and credentials of each such expert witness.
(c) Provide a smnmary of the testimony which each such witness is expected to offer.
(d) State the factual basis for each conclusion or opinion each such witness expects to present or draw in such expert's testimony.
(e) Identify all documents prepared by, for, or under the supervision of each such expert witness, or reviewed or relied upon by such expert in formulating the expert's opinions and conclusions,' including workpapers, preliminary outlines and memoranda, and communications between such expert and Applicant. Provide copies of any such documents.
ANSWER:
See answer to Interrogatory No. 1.
INTERROGATORY NO. 3:
Applicant has advertised that it estimates construc-I tion delays of the proposed Allens Creek plant are costing
$200 million a year and that to date the project has been delayed three years.
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4 (a) How was this $200 million per year figure calcu-
- lated?
(b) Who calculated this figure?
(c) Has this cost figure been included in the plan for obtaining necessary funds to cover the estimated cost of construction and related fuel cycle cost?
(d) How does Applicant define the word " delay" as used in its advertisements?
(e) Does " delay" include Applicant's announcement of indefinite deferral of the Allens Creek project from Septem-ber 15, 1975 to October 7, 1976?
(f) Is any of the $200 million a year estimate attribu-table to increases in the cost of the quality assurance program of Applicant?
(g) Is any of the S200 million a year estimate at-tributable to increases in the cost of the quality assurance program of Ebasco Services or General Electric Company?
ANSWER:
(a) Applicant has not been able to determine the exact source of this number or the exact method of calculation.
However, Applicant believes that this number includes ap-proximately $100 million per year for escalation and a,p-proximately $100 million per year for purchased power for each year the plant is delayed.
(b) See answer to Interrogatory 3(a).
(c) Escalation costs resulting from the three year delay of the estimated commercial operation date of the Allens Creek plant are included in the current estimate for the final construction costs and related fuel cycle costs of l
a the Allens Creek plant, and as such, are included in the plan for obtaining necessary fur to cover the estimated cost of construction and relat uuel cycle costs. Dif-ferential fuel' costs as a result of such delay are not included-in estimated plant' costs for Allens Creek.
(d) The word " delay" means to cause to be late or behind in movement or progress.
(e) No.
(f) No.
(g) No.
INTERROGATORY NO. 4:
(a) Have there been any cuts in the budgeted funding of Applicant's quality assurance for ACNGS program since inception of the Allens Creek project?
(b) Describe any changes in the number of quality assurance employees which have occurred since the inception of the Allens Creek project.
ANSWER:
(a) No.
(b) The number of quality assurance employees has been increased since inception of the Allens Creek project.
INTERROGATORY NO. 5:
- SER Supplement No. 2, p. 20-1 states that "the earliest date for commercial operation of the Allens Creek Nuclear Generating Station, Unit 1, is estimated to be March 1985." Recent advertisements by Applicant list completion for ACNGS to be 1988.
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a (a) What is Applicant's current estimate of commercial operation?
(b) -Does Applicant believe the three years difference in estimated date of commercial operation requires reevalue.-
tion of its financial qualifications analysis in SER Supple-ment No. 2.
(c) Please describe in detail any additional analysis which has been done by Applicant on the issue of financial qualifications.
(d) List any documents which have been submitted to the NRC concerning financial qualifications since the prepara-tion of SER published March, 1979.
(e) Has Applicant detected any change in the avail-ability of viable capital markets referred to on p. 20-1 SER Supplement No. 2 since publication of same?
(f) Has Applicant detected any change in rational regulatory po;icies referred to on p. 20-1 SER Supplement No. 2 since publication of same?
(g) Has Applicant revised its analysis to take into account increased interest rates for borrowed funds?
(h) Has there been any significant change in Appli-cant's ability to sell common stock since publication of SER Supplement No. 27 ANSWER:
(a) Applicant plans to have ACNGS available to serve the peak load in the summer of 1988. ,
1 (b) Applicant did not prepare the financial qualifica- l tions analysis in SER Supplement No. 2. Nonetheless, Applicant believes that the basic assumptions upon which the NRC bases the financial analysis in the Supplement are still sound. Further, Applicant does not believe that a reanalysis of its financial qualifications is required for any reason.
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4 (c) Applicant updates annually the information set forth in Table.20.1 of SER Suoplement No. 2.
(d) None.
(e) The reference to viable capital markets was an assumption.made by Staff in doing its analysis. Applicant believes, therefore, the question would be more appropriate for the Staff.to answer since Applicant has no idea as to whether the Staff still considers that to be a valid assump-tion. Applicant can answer that it has experienced no
- difficulties with respect to availability of capital.
(f) See answer to Interrogatory 5(e).
(g) Applicant does not know what analysis is being referred to in this interrogatory. Applicant's planning process does take into account existing and anticipated interest rates.
(h) There have been no significant changes in the Applicant's ability to sell common stock since publication of SER Supplement No. 2.
INTERROGATORY NO. 6:
What was the reason or reasons for Applicant's
" indefinite deferral" of Allens Creek project in 1975-1976?
ANSWER:
Applicant deferred the Allens Creek project in 197'S because ou (1) anticipated difficulties in financing l
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its construction program in view of rapidly increasing construction costs and in light of the problems it was having in obtaining rate relief which it had requested in February, 1975; and (2) reduced estimates of the growth in electric-peak load requirements.
INTERROGATORY NO. 7:
List and describe in chronological order any and all changes in design, in materials used, or in modes or method of construction, which have been attempted since the publication of SER in November, 1974 with the primary purpose of decreasing costs?
ANSUER:
(a) Cost Reductions Initiated Upon Reactivation in 1977:
- 1. ACNGS Unit 2 was cancelled and the lake size was reduced from 8000 to 4800 acres.
- 2. The plant layout was modified so that the Fuel Handling Building, Control Building, and Radwaste Building contain equipment for one unit rather than two.
- 3. The Turbine Building volume was reduced thus reducing steel, concrete, piping and cabling footage, and heating / ventilating / air condi-tioning load. No systems were added or deleted.
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- 4. The Diesel Generator Building volume was reduced.
- 5. NRC Regulatory Guide 1.27 established emergency water-supply requirements for 30 days. The Ultimate Heat Sink had been designed for 120 days. The resulting reactivated design is one 47-acre area rather than two 175-acre areas.
(b) Cost Reductions Subsequent to Reactivation:
- 1. Use Jty Cask Handling System 2 and associated Fuel Handling Building foundation configuration.
- Change made 7/78, savings $14,000
- 2. Move Ultimate Heat Structure. closer to the plant as described in PSAR response 361-4.
- Change made 11/78, savings $824,000
- 3. Elected to purchase pr,tsure gauges and switches through the instrument cabinet supplier rather than separately. Commercial change only.
- Change made 3/79, savings $32,000 f 4. Modified Condensate System design.
- Change made 11/79, savings $264,000
- 5. Modified Circulating Water Intake Structure
- Change made 10/79, savings $370,000 4
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- 6. Use composi te HVAC, cable tray, and pipA. J support structure rather than separate supports.
In addition to design savings below, simplified construction and reduced likelihood of inter-ferences point to greater savings.
- Change made 11/79, savings $90,000
- 7. Eliminate powered mechanical trash rakes from the Circulating Water Intake Structure.
- Change made 12/79, savings $420,000-INTERROGATORY NO. 8:
List and describe in chronological order any and all changes.in design, in materials used or in modes or ,
method of construction made since publication of SER in Novembar, 1974 wnich in the opinion of Applicant have re-sulted in decrease in cost or cost savings to Applicant.
ANSUER:
See answer to Interrogatory No. 7.
INTERROGATORY NO. 9:
Does Applicant have any system or unit charged with' responsibility for monitoring safety problems of al-ready existing nuclear generating stations of same or similar design to ACNGS or with same as similar components as ACNGS?
ANSWER:
The Applicant's nuclear engineering staff and li-censing staff both monitor developments on other nuclear projects.
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INTERR0GATORY NO. 10:
If the answer to question 9 is no, is the reason for not having such a system or unit based on cost considera-tions?
ANSWER:
Not applicable.
INTERROGATORY NO. 11:
Report of The President's Commission on The Accident at Three Mile Island, October, 1979, states on p. 44: " Met Ed had a plan for a quality assurance program that met NRC requirements. The NRC requirements, however, were inade-quate because they did not require quality assurance programs to be applied to the plant as a whole, but only to systems classified as ' safety-relased' . . . The NRC did not require the level of independent review (i.e., outside of line management) normally found in quality assurance programs of safety-critical industries."
(a) Does Applicant's quality assurance program apply to the ACNGS plant as a whole or only to' systems classified as " safety-related"?
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(b) If the answer to 11(a) is no, is the reason for not having such a program based on costs considerations?
(c) Does Applicant's quality assurance program provide for periodic independent audits (that is, outside HL&P, Ebasco, or General Electric Company) of the effectiveness of the quality assurance program.
(d) If.the answer to ll(c) is no, is the re x n for not having such a program based on cost considerations?
(e) Has Applicant budgeted sufficient funds to employ enough inspectors to do the inspections required under the present quality assurance plan for ACNGS?
(f) _ Has Applicant budgeted funds to require reporting, resolution, and trending of problems which are not classified as " safety-related" for ACNGS?
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I ANSWER: l (a) Applicant's-Quality Assurance Program applies to systems other than those classified as safety-ralated.
(b) N/A.
(c) HL&P performs periodic independent audits of Ebasco, General Electric, other contractors or vendors.
There are no planned periodic independent (outside HL&P, except NRC) audits provided in the quality assurance program for ACNGS.
(d) No.
(e) Yes.
(f) Yes.
INTERROGATORY NO. 12:
Has Applicant stated in advertising published in April, 1980 that " . . . during the 1980's we'll be chal-lenged by a multitude of problems. Problems that threaten our ability to provide reliable service. Problems so serious that we can't guarantee you'that you won't run short of electricity during the next few years - despite the biggest construction program in our company's history"?
ANSWER:
Yes.
INTERROGATORY NO. 13:
How does the STNP quality assurance program differ from the ACNGS-quality assurance program?
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ANSWER:
The contractor QA program will differ in that Ebasco, not Brown & Root, will be responsible for construc-tion at ACNGS. The HLEP quality assurance program for ACNGS will be' basically the same as the STNP Quality Assurance ,
Program except that program improvements learned from the experience on STNP.will be added to the ACNGS quality assurance program.
INTERROGATORY NO. 14:
Does Applicant believe quality control problems at i STNP have been caused by the project contractor's emphasis of higher work production and lower costs at the expenses of quality control?
ANSWER:
L Applicant cannot answer this question without specific identification st the quality control problem re-ferred to in this interrogatory. On April 30, 1980, the NRC issued an enforcement order on STP and set forth numerous specific' instances of alleged F.aficiencies in the QA/QC program at STP. Applicant replied to each allegation on May 23,- 1980.
INTERROGATORY NO.-15:
j i .What measures are included in the ACNGS quality j assurance program to prevent:or remedy threatening or har-ra'ssment of-quality control inspectors by construction personnel?
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ANSWER:
- a. Construction personnel shall be instructed not to threaten or harrass quality control inspectors and told-that activity of this type will not be tolerated by-HL&P and that proper disciplinary action will be taken.
- b. All personnel shall be encouraged and told how to report any incidents of this type to their super-visors or management, to HL&P or to the NRC with-out fear of disciplinary action for reporting the incident.
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- c. HL&P'shall increase its surveillance activity to be more visible on site in order to reduce the opportunities for these incidents.
> INTERROGATORY NO. 16: i The following interrogatories refer to Applicant's Response to Baker's First' Set of Interrogatories to Appli-cant.
(a) Regarding Applicant's answer to Baker Interrogatory 1(b) , ' could the term " construction" be construed to possible include ACNGS?
(b) Regarding Applicant's answer to Baker Interrogatory 4 (b) : (1) has Applicant contacted any insurance companies regarding coverage; (2) does Applicant have a current esti-mate as to the extent of coverage which will be available at the time of operation of ACNGS; -(3) define-the words "other
-insurance" used in the answer.
(c) Regarding Applicant's answer.to Baker Interrogatory 5, has Applicant " speculated" or attempted to make calculations as to what its-costs may-be under' alternative waste disposal program and if so, what was the result of such speculation?
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i ANSWER:
(a) As indicated in the answer to Baker Interrogatory 1(b), the reference was non-specific as to any particular aspect of Applicant's construction program.
(b) (1) Applicant has contacted American Nuclear Insurers with regard to insurance coverage.
(2) While Applicant does not know the exact amount of insurance that will be available upon operation of ACNGS, the coverage presently available is $300 million for property in-surance and $560 million for liability insurance.
(3) The term "other insurance" as used in the answer to Baker Interrogatory 4 (b) refers to insurance other than property insurance that may be available at the time of operation of ACNGS such as liability insurance, insurance for replacement of power, or any other insurance which would provide coverage on an economic basis.
(c) No.
INTERROGATORY NO. 17:
List and describe what steps Applicant has taken or will take to insure that it will not engage in substandard construction practices at ACNGS in the event it ever ex-periences a shortage of funds?
l ANSWER:
Applicant does not make plans based on such remote speculation.
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INTERROGATORY NO. 18:
What has the cost of such steps been?
ANSWER:
Not applicable.
INTERROGATORY NO. 19:
List and describe what steps Applicant has taken ,
or will take to insure that it will not engage in substandard construction practices at STNP in the event it ever ex-periences a shortage of funds?
ANSWER:
Applicant does not make plans based on such remote speculation.
INTERROGATORY NO. 20:
What has the cost of such steps been?
ANSWER:
Not applicable.
INTERROGATORY NO. 21:
SER Supplement No. 2 March, 1979, p. 20-1 states that total nuclear production plant costs including trans .
mission, distribution, and general plant costs es'timate is
$1,055,000. Applicant's answer to Baker Interrogatory 2 states that the most current estimate of final construction costs to be $1,484,783,000, which estimate was made in January, 1980.
(a) Does this most current estimate include trans-mission, distribution, and general plant costs? ,
(b) Does the most current estimate include the same factors as the SER Supplement No. 2 estimate?
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(c) Was the SER Supplement No. 2 estimate prepared by I
the Project Management Department?
(d) Explain why Applicant's estimates made approxi-mately one year apart differ by almost $430 million or almost one-third of the current estimated cost.
(e) How often does Applicant review or reevaluate its costs estimate for ACNGS?
ANSWER:
(a) No.
(b) It appears that at page 20-1 of Supplement No. 2 the Staff misstated the information provided in Amendment ?
to the Application. AmenCment 2 provides that the total nuclear pr duction plant osts including interest during construction and transmission, distribution and general plant costs equals $1,372,042,000. The estimate in Amend-ment 2 of $1,055,000,000 related only to production plant costs and excludes interest during construction.
(c) The Supplement was prepared by the~ Staff; Appli-cant's estimate was set forth in Amendment 2 to the Application.
(d) The Applicant's estimates are three years apart, not one year apart, which makes it impossible to answer the question as asked.-
(e) The estimate is reviewed at least annually and may be reviewed more often if the need arise, t
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Respectfully submitted,
. ML N
OF COUNSEL: J{ GregorgCQpelsnd C .( Thomas Biydle, Jr.
BAKER & BOTTS Cha,rles G. Thrash, Jr.
3000 One Shell Plaza 3000 One Shell Plaza Houston, Texas 77002 Houston, Texas 77002 LOWENSTEIN, NEWMAN, REIS, Jack R. Newman AXELRAD & TOLL Robert H. Culp 1025 Connecticut Ave., N.W. 1025 Connecticut Ave., N.W.
Washington, D. C. 20036 Washington, D. C. 20036 ATTORNEYS FOR APPLICANT HOUSTON LIGHTING & POWER COMPANY 9
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STATE OF TEXAS S S
COUNTY OF HARRIS S BEFORE ME, THE UNDELIGNED AUTHORITY, on this day personally appeared H. R. Dean, who upon his oath stated that he has answered Interrogatory Nos. 1, . 2 , 3, 5, 6, 12, 16 and 21 of Houston Lighting & Power Company's Response to Doggett's and Perrenod's First Set of Interrogatories to Houston Lighting & Power Company in his capacity as Group Vice President-Accounting and Finance for Houston Lighting &
Power Company.
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A H. R. Dean ~7 SUBSCRIBED AND SWORN TO BEFORE ME by the said H. R. Dean, on this 30 day of June , 1980.
G/m< o Y Lu n)
Notary Public in and for Harris County, Texas My Commission Expires: March 14, 1984
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STATE OF TEXAS ~ $
g f COUNTY OF HARRIS S BEFORE ME, the undersigned authority, on this day personnally appeared Paul-A. Horn, who upon his oath stated that he has answered Interrogatory Nos. 4, 7, 8, 9, 10, 11, 13, 14, 15, 17, 18, 19 and.20 in Houston Lighting & Power Company's Answers to Stephen A. Doggett's and W. Matthew Perrenod's First Set of Interrogatories to Houston Lighting & Power Company in his capacity as Project Manager. .
f(Paul A. Horn)
SUBSCRIBED AND SWORN TO BEFORE ME on this the88dday -
of June,1980. .
0/ NOTARY { 0 .PUBL'lC YC6IN AND M FOR f. -
HARRIS COUNTY, T E X A S My Commission Expires: // 2g,27/ -
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UNITED STATES OF AMERICA JUL $12 f NUCLEAR REGULATORY COMMISSION g Office of the Secretary Docketml & Ser' ice BEFORE THE ATOMIC SAFETY AND LICENSING BOARD Branch g oy &
In the Matter of S S
HOUSTON LIGHTING & POWER COMPANY $ Docket No. 50-466 S
(Allens Creek Nuclear Generating S ,
Station, Unit 1) S CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing Applicant's Response to Doggett's and Perrenod's First Set >
of Interrogatories to Houston Lighting & Power Company in the ,
above-captioned proceeding were served on the following by deposit in the United States mail, postage prepaid, or by hand-delivery this 1st day of July, 1980.
Sheldon J. Wolfe, Esq., Chairman Hon. Charles J. Dusek j Atomic Safety and Licensing Mayor, City of Wallis Board Panel P. O. Box 312 U.S. Nuclear kegulatory Commission Wallis, Texas 77485 Washington, D. C. 20555 Hon. Leroy H. Grebe Dr. E. Leonard Cheatum County Judge, Austin County Route 3, Box 350A P. O. Box 99 Watkinsville, Georgia 30677 Bellville, Texas 77418 ,
Mr. Gustave A. Linenberger Atomic Safety and Licensing Atomic Safety and Licensing A;> peal Board Board Panel U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Washington, D. C. 20555 Atomic Safety and Licensing Mr. Chase R. Stephens Appeal Board Docketing and Service Section U.S. Nuclear Regulatory Commission.
Office of the Secretary Washington, D. C. 20555 of the Commission U.S. Nuclear Regulatory Commission Steve Schinki, Esq.
Washington, D. .C. 20555 Staff Counsel U.S. Nuclear Regulatory Commission Richard Lowerre, Esq. Washington, D. C. 20555 Assistant Attorney General.
for the State of Texas P. 0; Box 12548 Capitol Station- >
. Austin, Texas 78711
Steve Schinki, Esq. Cairo Hinderstein Staff Counsel 609 Fannin, Suite 521 U.S. Nuclear Regulatory Commission Houston, Texas 77002 Washington, D. C. 20555 D. Marrack Mr. Bryan L. Baker 420 Mulberry Lane 1118 Montrose Bellaire, Texas 77401 Houston, Texas 77019 Mr. J. Morgan Bishop Stephen A. Doggett, Esq. 11418 Oak Spring P. O. Box 592 Houston, Texas 77043 Rosenberg, Texas 77471 Mr. John F. Doherty Robert S. Framson 4327 Alconbury Madeline Bass Framson He,uston, Texas 77021 4822-Waynesboro Houston, Texas 77035 Ms. Brenda McCorkle 6140 Darnell Mr. W. Matthew Perrenod Houston, Texas 77074 4070 Merrick Houston, Texas 77025 Mr. Wayne E. Rentfro P. O. Box 1335 Mr. James M. Scott Rosenberg, Texas 77471 13935 Ivy Mount Sugar Land, Texas 77478 Mr. F. H. Potthoff 7200 Shady Villa, No. 110 Houston, Texas 77080
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