ML19331A602
| ML19331A602 | |
| Person / Time | |
|---|---|
| Site: | Midland |
| Issue date: | 02/12/1975 |
| From: | Shapar H NRC |
| To: | Rowden M NRC |
| Shared Package | |
| ML19331A597 | List: |
| References | |
| NUDOCS 8007180675 | |
| Download: ML19331A602 (3) | |
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- JM TO !!O'.lA30 EP.d Tj h, 8W i c:a raturninJ for your cricical axcaination proposed letters to tha ;iichigan Public Servica C0 mission and ta Ralph ;;ader on the s'.;'.>jact of plent reliability, etc.
Sasad upon my reading of these pro;csil rr.esponses, I tould concluda that you ha/a not reviewed the text:.
Ti's response to the flichigan PSC is not, in my judgment, consisbat uith the response to :ndar. Ihraovar, tha proposed rasponsa to I!ader is a poor caa.
It is stiltad, sounds evasive and promotional, seems ta me to be internally ir. consistent, and, as earli2r indicated, r.ot consistent uith the relavant part of the response to the ilichigan 00:rnission.
Beyond this, even its characterization of our r?gulatary procm is incorract and not ev3n the oain of the ilational Environm. ental Policy..ct is cceractly stated.
In short, a redraft ir nue.5.ad and en an accelerated basis.
I am a,ivising tha SecratTry that these latters as presently proposed are not satisfactory to ca.
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Lenton G. Sculthras & Willia = R. Ralls. Dent.
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Chair =an Rav OATE II/3/74
SUBJECT:
Reliable overstion of the Midland Nuclew D~e r
Phnt in view of Bache.1', cas.,2
,,-*4n-ns Palisades Nucle r D ver D1,*
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O PLE ASE RETURN ORIGINAL WITH RESPONSE O FOR DIRECT RE?LY O SEND CCPY OF REPLY TO:
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4 O ron AreROPRi4TE Action O FOR INFORMATiON O POn nEcOMMENOATics nEuAngs. See Seev Ticket 375-4600 A
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/ W dt MEN SE*A A ATE D F eOM ENCLOSURES H ANDLE THiS DoctrMENT AS IC'i, ACTION SLIP O
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STATE OF MICHIG AN PU$LIC SERVICE COMMISSION W.itinn G. Rosenberg. Chairmari Lenton G. Scutthorp Wdiearn R. Ralls WILLI AM G. MILLIKEN, Governor DEPARTMENT OF COMMERCE LAW BUILDING, LANSING. MICHIGAN 48913 RICHARD K. HE LM8RECHT, Director November 8, 1974 om 5
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R Honorable Dixie Lee Ray C
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Dear Chairman Ray:
hg On August 28, 1974, Consumers Power Conpany, a utility regu-lated by this Commission, brought a lawsuit in Federal District Court, Grand Rapids, Michigan, against defendants which include the Bechtel Corporation and the Bechtel Company.
Consumers Power alleges damages of at least $300 million due to negligent acti-vities by the defendants in the design and construction of the Palisades Nuclear Power Plant, as well as the preoaration and training of its employees to operate the plant.
The Michigan Public Service Commission, in representing the utility ratepayers of this state, is greatly concerned over the reliability of Michigan electric generating plants.
This concern is particularly brought forward by the technical difficulties at the Palisades Muclear Power Plant of Consumers Power Company, which have interrupted operations over the past 22 months, includ-ing the entire year beginning in August, 1973.
The cost of replacement power for these outages is estimated by Consumers Power to average $5-7 million per month.
To date, this cost exceeds $50 million.
This has had an obvious dramatic impact on Consumers' financial condition and constitutes a financial burden on its ratepayers.
The sum of $300 million mentioned in the suit.
reflects the company's assessment of the Palisades outage as a major and potentially devastating financial event.
It also makes vividly clear the leveT of financial risk that must be borne if ganarating facilities fail ta perform as expected.
The Michigan Public Service Commission is, of course, aware that Bechtel is also the prime contractor for Consumers Power in the construction of the Midland Nuclear Power Plant.
We note further that the Atomic Energy Commission conducted a hearing, beginning in July, 1974, to determine whether sufficient cause existed to 1
halt further construction activity at the Midland plant.
That arigg gag g rected toward resolving the question of whether the
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- .,~*r' Chairman Dixie Lee Ray November 8, 1974 Page 2 Consumers Power quality assurance program complied with AEC regulations and whether there was reasonable assurance that Consumers Power would remain in compliance.
The Atomic Safety and Licensing Board ruled in favor of the utility, permitting construction to continue.
However, we note, as did the Board, that the Director of Region III, Directorate of Regulatory Operations, AEC, stated that should construction activity deter-f orate, he would not hesitate "to s tep in and stop construction...."
We are concerned that the unreliable operation of the Palisades Nuclear Power Plant has raised public concern over the economic consequences of electrical generation in general, and nuclear power generation in particular.
With these facts in mind, the Commission respectfully requests you provide us with answers to the following questions:
1.
As compared with normal AEC procedures, hs= tha AEC taken special precautionary measures to assure adequate';construc-s tion at Midland Nuclear Power Plant?
Wh'a t ch an gis, if any, have been instituted specifically for Midland because Bechtel 7
is the constructor?
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In light of the Palisades experience, is Bechtel hapable of performing its Midland activities in compliance with AEC requirements?
3.
Recognizing past concern on the part of AEC, what is AEC's present opinion with respect to the quality of Consumers Power Company in construction of Midland?
4.
In the opinion of the AEC, will the Midland plant work reliably to provide electric power in an efficient manner to Michigan?
5.
In light of the Palisades experience, does the AEC believe that contractual agreements are in the public interest which place significant financial burdens resulting from unreliable plant operation on the contracting utility?
6.
What desirable alternatives are there to shif t the cost of unreliable plant operation to the constructors.
In addition to answering these questions at this time, we would appreciate your outlining arrangements by which we may be kept informed on a continuing basis.
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. Chairman Dixie se Ray Hovember 8, 1974
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We understand the legal preemption given by the Atomic Energy Act to the AEC with respect to safety of nuclear plant design, con-struction, and operation.
The AEC must in turn recognize that utility ratepayers and investors ultimately can be expected to bear the major financial burden when plants fail to operate.
Michigan ratepayers and utility investors look to the Michigan Public Service Commission for answers to these failures, and for assurance that every reasonable effort is being made to prevent future financial problems due to plant operational failures, and for assurance that the financial strength of the utilities will be maintained.
This Commission must ask the AEC for assur-ance that nuclear power plants are being designed and constructed not only to high standards of safety, but to high standards of quality and reliability.
The AEC in our opinion, has a major responsibility to assure that the public will receive the bene-fits of an operating plant that will work.
The public's need for power at reasonable rates for electric service will be served only by the highest quality and reliability of generating f,acilities.
No concerns expressed here should be assumed to either support or oppose any matters currently before the AEC.
Your attention to these matters will assist us in carrying out our responsibilities to ratepayers and investors of Michigan utilities, and we will be pleased to receive your early atten-tion and response.
Sincerely,
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t Wi'lliam GT'Rosenb rg, Chairman A.
Lent G. Sculth rp Commie ioner a
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lilliam R.
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