ML19323H955

Forwards Statement Which Was Not Completely Presented at 800325 Meeting Re Resumption of Const.Sassafras Audubon Written Statement Also Encl.W/O Sassafras Audubon Statement

ML19323H955
Person / Time
Site:	Marble Hill
Issue date:	03/26/1980
From:	Hauck F SAVE THE VALLEY - SAVE MARBLE HILL
To:	Stello V NRC OFFICE OF INSPECTION & ENFORCEMENT (IE)
Shared Package
ML19323H950	List: ML19323H949 ML19323H955
References
NUDOCS 8006170342
Download: ML19323H955 (13)

Text

"

t ld h-0, FRED HA UCK Enviro:rnen:si Consultants, P. O. Box 391, Ci Route 3 Tere: Heights, t

Shelbyville, Kv. 40065 1

J March 26, 1980 f

0%

6x Mr. Victor Stello, Director u

Np f>> '

b qH Office of Inspection & Enforcement h,', *k.

ps5 Nuclear Regulatory Commissi.on

$(c 1

/J c*'

' 6 '"'

Washington, DC 20555 i

if

Subject:

The March 25th. Marble Hill Meeting

Dear Mr. Stello:

I must compliment you on your handling of a very difficult sit-uation last night.

I'm sure that you and the NRC are doing your level best to properly discharge your duties.

In an effort to abide by your rules, Save-the-Valley's attorney, Tom Dattilo, persuaded me to omit the heart (I called it the " gut issues") of the presentation I wanted to make.

The complete in-tended presentation is attached.

I hope that you, Mr. Keppler, Mr. Strasma and the others will read it carefully in order to help dll of you to undeirstand the problems fully.

~

PSI's tremendous over-capacity, their current and impending slow-er and slower demand growth rate, and the unbearably heavy financial load if unneeded Marble Hill is ever completed, are the " gut issues" on which we have put carefully weighed numbers.

I will appreciate your consideration of my complete statement.

Sincerely, I

f Fred Hauck, President Save-the-Valley P.S.

- Sassafras Audubon's written statement, which was handed to me,-

is also enclosed.

Copy to Mr. Keppler Region 3 8006170342

Fred Heuck's.Renarks at Public Meeting - Madison, IN - March 25, 1980 a

On Matters of Safety - Decontamination Problems and Costs GPU, 3-1 Ele Island's owners, is still having decontamination and cold shut-down problems one year later.

GPU is fearful that there will be further heat build-up in the reactor core and is still unable tf ef ase significant amounts of radioactive water and gases.

Further, GPU auditors, Cooper & Lybrand, now list as contingencies,

$1.1 billion capital costs, plus many uninsured clean-up and damage claims.

They infer that these costs could bankrupt GPU unless they can be passed on to rate-payers.

Have PSI's ratepayerI and stock-holders considered these po'ssibilities?

Further On Matters of Safety -' Nuclear Waste Storage _

At a DOE meeting held just last week in Washington, DC, Dr. Dillard

~

Shipler of Battelle estimated the year 1997, 17 long years away, as the probable date -for the first commercial waste f acility to be ready to receive rc.~ievable nuclear wastes.

This is already a

" slippage" of 5 years past the median 1992 date set less than a year ago by the Interagency Review Group.

Now the cuestiens that will affect all of us:

1. Will Indiana allow 10 to 15-year on-site storage of spent nuclaar fuel?

2.

Can PSI design storage pools to safely hold this large amount of spent fuel rods in temporary storage?

3. Will the residents of this entire area, especially those ~ in Hanover and Madison, sleep well during this 10 to 15-year period?

On Matters of Safety - Concrete Repairs STV was inforced last Friday that PSI has still not submitted pro-cedures for repairing the hundreds of already-identified honeycomb areas.

Further, 'according to NRC's Jerry Wilson, the NRC is not yet satisfied that the 95% confidence level for locating these voids has been reached.

In view of all this, how can STV be assured that this-tedious repair work will be done properly?

On Mntters of Safoty - Hns Nuclear Energy's Corrosion Problem Bien Solved Surry 1 and 2, VEPCO's Westinghouso units at Norfolk, VA, have recently replaced all steam generators at a cost of about $100 mil-lion.

Radiation-caused corroded generator tubing was listed as the probable cause of failure.

The nuclear industry knows so little about this problem that DOE is shipping a 220-ton radioactive gen-erator 3000 miles to Battelle Northwest for study.

Will Marble Hill, if it is ever finished, supply further education for DOE?

The Beginnings of Our Problems With PSI One of our first contacts with a PSI Chief Executive Officer came in 1977, more than 3 years ago.

In reply to an 'ICpen Letter" critical of 'the need fo,r Marble Hill, where we said:

Although the total' impact of these (high es on the cost of electricity is minor, the figures seem, to illustrate the relative importance of the exacutive ego drive.

Such salaries certainly must spuf the execa.ive to "put together" such " big deals" as the $1.4 billion Marble Hill nuclear plant in order to justify the salary.

The necessity of the " big deal" to the consumer would scarcely be considered.

Had the utility's quality of leadership been proportional to the salary level,.such project f ailures as that of the $3.5 billion Kaiparowits generation plant dould not have been blamed on legal roadblocks set up by environ-nentalists.

The leadership would have already known that the reduced demand for glectricity was occasioned by.

rapidly g

rising costs, and reduced demand would long continue.

4 the PSI CEO replied to that statement I can assure you that the planned construction of our nuclear facility at Marble Hill is not*the result of " executive ego drive" but is tied solidly ~ to conservative and realistic energy load growth forecasts.

You may judge from this presentation and those of others how

solidly tied to conservative mad realistic energy load growth "

PSI has been wi'tb their forecasts.

Further, be sure to listen for our further comments on " executive ego drive" an'd our documented references to generous executive stock purchase plans using public funds.

During the NRC hearings in Madison in 1977 and 1978, S ave-the-Valley repeatedly stressed the lack of need for Marble Hill.

While PSI sought to prove 8.6% demand growth, STV used the attached set of curves to emphasize that growth would not be exponential, but would be linear or straight-line at best.

STV's estimated linear growth of 157 megawatts per year, we said, could not possibly justify Marble Hill's 2260 Mw nuclear capacity before 1995 at the earliest.

STV's logic at that time gave an equivalent percentage growth of,less than 3%/yr to the 1995 date.

This was only 1/3 of PSI's 8.6%," postulated demand growth rate.

PSI is still unrealistically forecasting a 6% peak demand growth in spite of Midwest -population growth, including Indiana and all surrounding states, being much less than national growth.

With today's price-induced conservation, PSI's annual sales growth has J.

already dropped to 3.1%,,and peak demand growth to 4.8% per year over the last two years.

Based on slow population and GNP growth and new rate structures, STV is currently forecasting 2% kwh growth and 1% annual ceak growth for PSI over the next 20 years.

~

During just the next 5-year period, three important impacts not yet properly considered by PSI, are certain to occur quite rapidly.

\\

These are, that:

j

1. The real-dollar price of electricity will continue to rise more ' than 5% annually, steadily constraining sales growth.

2. The Public Utility Regulatory Policy Act (PURPA) will.soon begin to affect rate structures because of time-of-day pricing and other innovations.

The effect will be to constrain peak growth still further.

3. The impact of more-than-ample natural gas supplies will cause many electric heat customers to revert to gas space heat, becaus@

gas c.ost will be about 2/3 less than resistance and 1/3 less Indi[anaGas,than Eeat pump energy costs. 94% of all gas utilities, includi are actively soliciting new customers!

The combined impact could well postpone the need for Marble Hill's capacity from PSI's " urgent" 1982-1984 dates, until at least 20 years into a very cloudy future.

STV wonders if the NRC is ignorant of

, PSI's current 60%+ reserve ratio, and if they know that PSI is cur-

~

rently building still another 650 megawatt coal-fired plant!._ _

v-We promised you more on" executive ego drive".

Here it is:

The Ohio River Basin Energy Study (ORBES) commissioned

r. Duane Chapman of Cornell to do a $31,000 study on electric utility "subsidie>

Here are several verbatim excerpts from the draft of that work-

1. The timing of tax credits and deductions promotes the premature construction of new plants and the premature retirement of existing plants. (3 r-V Wr zLA pug 2% Aapy y ks.t.cf

2. Because nuclear power is more capital intensive than coal power, it receives a tax ' subsidy nearly 3-times greater than co al. generation.

3. Natural gas space and water heating is always less costly than any other alternative.

This is the case even if natural gas prices rise to parity with fuel oil prices at $123/ Bbl.

(ennu.ec Awwm.gs?)

4.

Under present Fedezgl tax law, the last lb% of the 11 % in the investment tax credit may be used directly to finance employee stock ownership plans.

Put in its simplist terms, this portion of the investment tax credit uses public funds to increas@

compensation of utility managers who choose to construct a new plant.

As an illustration with data used in this study, the investment tax credit reduces the company's tax liability by a sum of $275 million (per 1000 Mw unit.).

Of this apo

$36 million is contributed to the stock ownership plan. (ja$,unt, ounts to about $81 million for the Marble Hill installation).

5. Within the pool of participants, stock contributions are based j

upon salary up to a $100,000 limit.

(I have a letter from Dr.

Chapman indicating that a theoretical $100,000 executive would be likely to benefit to the tune of approximately $111,000 of

" free" stock in his utility. )

We would mention, further, that PSI's current 54-year old CEO, an ex-accountant, already owns more than 5000 shares of PSI stock worth more than $100,000 even at today's low $19 price.

Further, he is being paid almost $150,000/yr. af ter less than 3 years in office.

The current mess at Marble Hill attests to his executive ability.

9 y ---

C On PSI'c Poor Conception of the Costs of Marblo Hil_1 PSI wants desperatly to salvage the $500 million already expended on construction.

However, if PSI will think one small step further, the sacrificing of this $500 million hopelessly sunk, might save more than 10-times that amount in financing costs alone that will attend the completed structures.

STV's estimate follows:

The current total cost of a Westinghouse 2300 Mw nuclear facility is

$4.5 billion, not $1.8 or $2.3 billion as often mentioned by PSI.

The accompanying Wall St. Journal news item relates this current

1. W cost (originally $1.5 billion) for an, Westinghouse 2300fhwnit proposed

~

by Long Island Lighting in New York State.

Since-total costs are usually split 50-50 between bonds and stock, a conservative average of 12 % represents the approximate median of the 11% bond and 14%

return on equity costs.

These costs to PSI are now rapidly escalat-ing to $562 million additional for each and every year that J.

the Marble Hill facility,is completed before actual need.

Since last years total PSI sales were only $628 million, i't is easy toseethatallPSIrateswould'$shIY$'beincreasedmuchmorethan 4

50% mdrely to recoup financing costs over the many intervening years.

STV urges PSI to cut their losses now.

Abandon what has clearly become an albatross around PSI's financial neck and an impending danger to all the residents of this entire region!

e i

I

.-- g.-

o

@ 0 7 30.') l'{CU N

I v

y e.

7.

.. -.i...

...t r

M

\\

.g. '.. _......

p 3,

p.

fa.980 e

l.

n V

$3co %

7.g l

. (._

+ f

/.

h o

/

- & l l C ti v i

,. w. N.

'11

c. /i 'it.1

?

/

(+4 }-

p

/.

C J.

- -,d

/

/

Q.

_. y.

...l..

. ( (.

s g

3p...

,,m g y

/

g Iq- ;

cs

. uu

. - - 4.

( n b.

/

. g

/

fg

..p y ;, c. '. nf g.

(. 9 :. /

z.,..-

s t

. w

. g -

. y

,y,g jq J

s

. c ny pt y

v n.+

y

. \\

. g 9 q.

s s

s f(

f,.y,

/\\

p... ;

. g.

. 7.,.

(

-p t

x g

g

.,q

. 3 7q n.

. +

.. g y y s

g y,

- p 4

w a

, 3.

a r

g,.

./...

y

{

-_y w

<d

-g 3

. f( /L r

,e:

a

.r

\\

C /s.

r s

h..

._ge

. '. '9.

Ar Q

s

. A

• n j ;

e q

c.-ny

,3 Tjy.

5

. c g3 3

.e,

.m

-x 5

4

.o.

f f

. g m 5p-PEAK DEMAND FORECAST

- :. 2 22

-~

Linear-Analysis @ 156.6 Mw/ Year

... !!. :1 - :

Comp 6und Growth @ 7.1%/ Year p._-.

~

~

~

~

Z: : - :: " - - - -

- 12 : 1 -

-.. : - ---^ - - - - -

- -- - - - ~ - --- : :

1 - :

Prepared by Fred IIauck from PUBLIC SERVICE INDIANA 1975 and 1976 Annual Reports I ~I ~

.-.._.--........_4...,..-

...o.

~

l_U.LLLLLl_L1 ! I l 1 Ll L A.LLLLLLL&.1.1.LL Ll LA_.., -

1.-__,.-,__m-

._,--_o wcr in*.__

o m r-

_Cu*

Y El A

R. -

.