ML19337A363

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Financial Forecast Reflecting Revised Estimate of TMI-2 Clean-up & Recovery. Util 800808 Press Release Encl
ML19337A363
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Issue date: 08/14/1980
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GENERAL PUBLIC UTILITIES CORP.
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NUDOCS 8009090608
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.s. GPU System. A Financial Forecast Reflecting Revised Estimate of TMI-2 Clean-Up and Recovery E Presented to the NRC Staff August 14,-1980 4 B409090 o c

~ ~ ~ 4 Le' i Introduction 3 'To.the. Readers;of this Planning _ Forecast: 4 1- .The following planning document was prepared as a result of. ~ c the-recent. review of the costs to clean-up and restore to service -TMI Unit 2. Our. objective in this study was to obtain a view of the'GPU System which would size the magnitude of the ratemaking and financing challenge it presented. 'To do-this we assumed a level of construction ~that was consistent with the need to serve the customer, i.e., we included Penelec constructing' a 60% ownership of Seward-7 coal station, Jersey Central constructing the Ontario Hydro / Lake Erie transmission tie, converting its Sayreville~ units to coal and' i

building the 500KV transmission system in southern New Jersey.

.This-is~, we~.believe, a construction program of significant size. 4 i. On the other hand, as to ratemaking we chose.to assume a ~ very modest expectation from our. Commissions. We assumed only i the ratemaking we have experienced since the accident.- An 5 earned > return on rate base equity not materially different from "that of other New Jersey and Pennsylvania electrics; no return on, or expenses allowed for, the TMI units when they are not ' operating and no current recognition of the cost of clean-up or 3 restoration of TMI to the extent that ' cost exceeded insurance recoveries. It is important to understand-that this is not.the ratemaking'we want'or expect to be faced with. We believe the -Commissions will' understand the need for more realistic ratemaking. In.our: view, the'Now Jersey BPU Interim Order ~for Jersey l 4 I f + - ,E- -,r. _,~.cE~-, ,..,v..--, ww,

l-Central has already'done so. By assuming this minimal'ratemaking in. combination.with a substantial construction program, however, it was ' possible to focus upon just how much of the clean-up and restoration cost could be absorbed by the GPU Companies through internal sources of funds and external financings. As the following material details, within reasonable financial parameters, the GPU System could not fund the entire TMI-2 clean-up.and restoration with the minimal rate relief in the base case and the heavy construction program (see p. 1-20). With the base case forecast as a standard of measure, we looked at two alternative scenarios of rate relief in order to deal with the "unfunded" TMI-2 costs that resulted from the base case forecast assumptions. In one case (p. 21-23) we provided current revenues from our customers and in the other alternative (p. 24-32) we provide income producing revenues such that the GPU Companies can finance the unfunded TMI-2 costs. In many ways the result of a financial forecast such as this one is only a' reflection of the input assumptions. The "unfunded" TMI-2 costs in the base case are only unfunded because the base case reflects a particular set of ratemaking, construction and financing assumptions. As the two alternatives demonstrate, it only requires small changes in our base case ratemaking assumptions in order to " fund" the unfunded costs of the base case. Because we -believe it is in all of the parties interest to j 1 achieve a better understanding of GPU's financial posture, we have elected to present our forecast in this base case and alterna-tive manner, i i

s INDEX Base Case Forecast I. Costs and Construction Pages 1-4 II. Ratemaking Pages 5-9 III. Financial Page 10 IV. Summary Page 11-19 V. Conclusions Page 20 Alternative Forecast with Ratemaking to Deal with the Unfunded TMI-2 Costs VI. Unfunded Costs Treated as a Pages 21-23 Current Expense for Ratemaking VII. Ratemaking to Allow Financing Pages 24-32 of the Unfunded Costs I

1 1. General Public Utilities 1980-1989 Forecast 'Maior Assumptions I. Costs and Construction Inflation 1980: 10% 1981 & thereafter: 8.5% annually Sales Reduced from Original 1980 Budget to reflect the 1980/1981 recession Growth rates: 1980/1979: no growth Thereafter: 3% annually Nuclear Unit Availability Oyster Creek operatus normally TMI-1 returns 7/1/81 TMI-2 returns during 1986 Construction Summary follows. Schedule of construction is Appendix A. System load and capacity charts are Appendix _B. Energy Costs

  1. 2 oil escalates to $39 per barrel at year-end 1980, escalates 20% in 1981 and 12% annually thereafter (Graph of oil prices is Appendix C).

TMI-2 Clean-Up, Summary and schedules follow. Restoration and Insurance I

1 2. GPU System Construction Forecast Summary Total Construction Expenditures increase from $320-$330 million range in 1980-81 to $450 million range in 1982-83 and $600 million range in mid-1980's. By the end of the period, annual construction expenditures rise to S1 billion. New Generation Forked River nuclear project is abandoned. Jersey Central's Sayreville units are converted to coal at a cost of $100 million with half of that provided by the Federal government. Penelec constructs for a 60% share of Seward-7 coal unit to-go in service in 1987. Two additional coal units and a large pumped storage unit are constructed in late 1980 period. Transmission Jersey Central constructs Ontario Hydro tie at a cost of $250 million and completes the LDV 500 KV system at a cost of $200 million. Load Management Expenditures of S75 million in 1981 through 1983. Additionally, $25 million of e ; pense is included in the same time period.

1. 9 3. GPU SYSTEM Summary of TMI-2 Clean-up and Restoration 4 1 Forecast provides'for~ funding by GPU of 9695 million from 1979 through 1986 which-includes $300 million of insurance recoveries, a-deferred clean-up expense account of $220 million, $92 million which has been charged to expense and S83 million for a replacement fuel core. Forecast does not provide for additional costs of $455 million. This amount is in excess of the financing capability of the System given the assumed level of ratemaking (which is discussed subsequently and which, in summary, does not reflect TMI costs when those units are not in service). It is assumed that such funds will be made available from some other source or, e.g., additional charges to customers, government or industry ~ assistance or litigation recoveries. Continued ability to defer costs in excess of insurance recov-eries is assumed with that deferral totalling S220 million in 1984. If those dollars had to be expensed due to an indication that they would not eventually be recovered, and were not off-set by higher revenues, ability to market securities in 1980 through 1984 would be substantially impaired. Timing of GPU funding is such as to provide essentially all of its' funds from 1979 to 1984 when greatest expenditures are for clean-up. Unprovided. funding begins in 1981 and continues until the plant' returns to service. l -~

s. GENSHAL PUBLIC UTILITIES 4 Hevised Estimate of THI-2 Clean-Up and Restoration ($ MTllion) I. Funding,of costs 1979-1986. - Funded through assumed rate making in Base Forecast S 695 (includes clean-up costs, restoration costs, 06M costs chargud to expense and a replacement nuclear fuel cose. $3u0 of this is from

insurance.)

- Not in Base Forecast 455 Total $1150 ll. Timinq of Funding 1979 1980 1981 1982 1983 1994 1985 1985 Total - Clean-up and Restoration S 95 $ 90 $ 130 $ 150 $ ISO $ 155 $ 135 $ 40 $ 975 - 0&M Costa Charged to Expense 7 10 15 15 15 15 15 92 - Replacement Nuclear Fuel Core (with AFC) 6 3 I I I 53 18 83 Total $ In8 $ 101 $ 146 $ 166 $ 196 $_121 $ 168 $ 40 $ 1150 Allocation and Timing of Funding - Funded in base Fo recas t . Outlays Het of Insurance $ 25 4 $ 35 6 31 8 60 $ 65 $ 220 Insurance secovery 70 86 55 59 30 300 Total $~sl $~93 $ ~53 $ ~93 $ ~I6 3 ~l5 $ 7 $ 7 $% . OsH Costs Charged to Expense 7 10 15 15 ~ 15 15 15 92 . Replacement Nuclepr Fuel Core 6 3 1 1 l 53 IS : 81 Total $ 108 $ 103 $ 106 $.3 06 $ 106 $ 133 $- 33 $ 695 - To be Funded by others 40 60 90 90 135 40 455 Total THI-2 Costs $ 108 $ 10) $ 146 $ 166 $ 196 $ ??) $ 168 $ 40 $ 1150 k e

n 5.

.GPU SYSTEM II. Ratamaking Assumptions Summary of Ratemaking Assumptions Base forecast,'for both energy cost and base rates, is intended to reflect the ratemaking which has been' exper-isnced since the TMI accident. In major outline, this eliminates any. allowance for the TMI units when they are 4 not in service, provides no customer revenues to assist in the clean-up and does not change the allowed or earned return on common equity to reflect higher risks. Energy Cost Ratemaking keeps energy cost current. Base Rates Katemaking provides revenues sufficient to produce a 12.5% to 13% return on common equity on rate base other than TMI investment or expenses while TMI units are not operating. When TMI-l returns to service, that investment and operating expenses are recognized. When TMI-2 returns to service, that investment and operating expenses, including amortization of, but no return on, deferred clean-up expense are recognized. Forked River amortization is allowed in Jersey Central's rates but the unamortized investment is not allowed in rate base. Customer Cost Frem mid-1980 to year-end 1983, cost to customers increases at a compound annual rate of 8.8% for Jersey Central, 1.3% for Met-Ed and 7.5% for Penelec. From mid-1980 to 1989, cost to custccers increases at a compound annual rate of 4.5% for Jersey Central, 4.0% for Met-Ed and 6.8% for Penelec relative to an assumed general price inflation rate of 8%. s

A - ~ CENERAL PUBLIC UTILITIES Assumptions for Base Revenue Increases ($ Millions) Amortization last allowed ROE Revenues for To Provide for a 12.5% Earned ROE on " Recognized" Rate TMI-l the Forked River on " Recognized" Rate Base Investments

  • Base Rates Investment Base Investments
  • 1982 1983 Ba*e Revenue Increason Jersey, Central

- Annual Award $15 $51 $10 $90*** - Effective Date January July July January January Met-Ed - Aanual Award $25 $27 $15 $10 - Effective Date January July January January Penoiec - Annual Award $30 $12 $13 $33 - Effective Date January July January January

  • Excludes all capital and cperating costs associated with the following investments:

- TitI (until 7/1/81) - THI-2 - Def erred TMI clean-up cost s - UnamorLized Forked Hiver Investment

    • Amortization of TMI-l base revenues against JCP&L's deferred energy balance will cease on 7/1/81.

m

      • Attributable to increased expenses (O&M, e

Heserve capacity) and increased equity ratio.

s. CENERAL PUBLIC tlTILITIES Energy Clause Assumptions - PUC ($ Millions) JCP&L Met-Ed Penelec LEAC Annualized LEAC Annualized LEAC Annualized (Mills /kwh) Increase (Mills /kuh) Increase (Mills /kwh) Increase current 21.9 26.5 9.0 1980 September 27.6 $72 1981 January 10.5 $16 March 33.5 $77 July 19.4 $(56) September 29.8 $(49) l !822 January 16.4 $(25) 11.4 $10 1983 January 35.7 $83 19.3 $25 14.8 $39 w e

JCP&La A0ERAGE CUSTOMER C05T IN C(MTSeKnot MET-EDs AUESAGE CUSTOME C06T IN CEstTS/ Knot 88 g g g g g y g g g g g g g 8 g g g g g g g g g g g g g it T C to C t,. 1 m /- T g T 9 ~ EMSGV CLADEE P E4 EME86V CLAUSE P E4 A A g y4 g3 y H 3 BASC MUEMUES Ng 3 g 3 I I I I I I I I I I I I I I I I I I I I I I I I I I 0 e le 40 34 44 10 20 34 44 le 34 34 44 1983 14 88 34 44 14 24 34 44 le te 34 44 1983

  1. ---1980---#
  2. ---1981---#
  3. ---1984 --#
  4. - 1900---#
  5. - 1981 - #
  6. --1904 - #

PENESECs AupeAGE CUSTOMA C0$7 IN CENT $eKW 8 I I I I I I I I I I I I I C ~ E Compound Annual Crowth Rate M8 /~ 7 Mid-1980 to EOY 1983 IS f JCP&L 8.8% EMEmey CL,AUGE,,,,,.....

  • p E4 Het-Ed 1.3%

R Penelec 7.51 K3 ~ U ~ "E 945E e tax suRCHamGE MUpeuE8 1 a I I I I 0 l 30 29 30 40 84 Se 3e 4e le te 3e 44 3963

  1. ---8800---#
  2. - 8988- ;#
  3. --8 884--e 4

JCP&La AWanet CueTORER COST IN CEMTS/Klat flET-CDs AWRAGE CUSTOME C0$T 1se Costs / stas II l l 5 8 I I I I l l l I I I l l l l l l 5 5 5 la la II ~ C II C E 10 E le Is to T S s T S E, --f s e g,,, cim,g e E A8

  • ~......-

AS 5 I"#8M K 5 ..-=****. *, E W 4 U 4 H 3 DaeE REletES W 3 g g BASE + TAW SURCHASet REWNIES 1 1 I I I I I I I I I I I I I I I I I I I I I I e O 4/B0 #90 *01 '84 '83 *S4 '85 *a4 *07 '88 '89 S/90 #80 *St *SE *S3 '84 *05 *SS '87 *as '80 E86 0F PEAIDS EIG 0F PERI 68 4 ,EELECs AMER 4GE CUSTOME COST IN CENTS /KWM II l i I I I I I I I I i 18 II ~ ~ C E 10 My9 Compound Annua 1 Crowth Rates 8 i p y Hid-1980 EOY 1983 Mid-1980 Eas -.... * * * *,.. -* *..... - - - to EOY 1983 to EOY 1989 to FOY 1989 5 _ C_ K JCP&L 8.8% 2.24 4.5% u4 H Het-Ed 1.3% 5.68 4.04 3 Penelec 7.5% 6.4% 6.8% 8 3 l I 4 I e i I e e s s/e0 *e9 *st *se

  • 3 *e4 *as *se *ev *se 'ee E8e OF PEAIDS i

4

-e i I 10. i GPU System III. Financing Assumptions Capitalization Sales of bonds assumed possible at minimum coverage. Cost of Capital Assumed rates on new capital: Bond 14% Short-Term Debt 13% Preferred Stock 15% Short-Term Cabt GPU System maintains its RCA credit' limit of $292 million. Met-Ed exceeds its sublimit of $105 mi.. ion by S20 million in.1981 and $32 million in 1982. GPU Common Stock No new shares issued except for small TRAESOP issues in 1984 and 1985. GPU Dividend Policy For financial forecasting purposes, it is assumed that the Company will restore a cash dividend late in 1982 when System and Corporate bank debt has been sub-stantially reduced. After TMI-1 has been restored to service but before TMI-2 has been restored, dividend payout is about 1/3 of earnings. With both TMI units in service, dividend is about 1/2 of earnings. Subsidiary Dividends - 1980: Only PN pays its earnings to GPU. to GPU 1981-1986: Only PN and JC pay earnings to GPU. 1986: All operating companies pay earnings to GPU. Capital Contributions-1980-1981: None except for retained earn-to Subsidiaries ings of subsidiaries. 1982 on: As needed to support capital requirements. o

o. e 11. 4 GPU SYSTEM IV. Summary of Financial Forecast Return on Common Equity When TMI-l has returnedfto service and rate base, return on common equity peaks at 6% to 7%. Earnings per share are then at about $1.60 rising to $2.00. Prior to the return of TMI-1, earnings per share will not exceed $1.00 and return on common equity will not exceed 4%. When TMI-2 returns to service, earnings per share are about S3.00 and return on common equity at about 11% to 11.5%. Securities to be Issued The Systed must issue 5900 million of bonds prior to the return of TMI-2 to service of which $200 million are Met-Ed, $350 million are Jersey Central and $350 million are Penelec. Short-Term Debt Need for bank credit stays at about $150 million for the System throughout this period with Met-Ed needing S100 million of this. Met-Ed exceeds its present limit of $105 million on two occasions. Ba.1k loans do not decline below $100 million until TMI-2 returns to service. Equity Ratio System total equity is at 45% with 36% as common and 9% as pre-ferred. The common equity of Penelec declines with that company nearing its legal minimum of 30%. Capital Not Earning a Return At-the end of 1985', just prior to the return of TMI-2 to service, the System has $1.1 billion of unearning capital. This consists of Forked River ($162 million), TMI-2 investment (S660 million) and TMI-2 clean-up-($260 million). Coverage Bond coverage remains low in Met-Ed and Penelec but improves in Jersey Central. No operating company has coverage to issue preferred stock until TMI-2 returns to service.

~

Wy e

GP'l CONSOLIDATED Source & Application of Funds ~ 1980-1989 ($'M7T1172ns)

1980, 1981 1982 1983 1984 1985 1986 1987 1988 19P9 Annualized D.ase Rate Increases 60

$IQ $ 38 $ 161" $ 46 $ 92 SM $ 59 $ 101 7 A plicati[si of Funds: J Construction $ 254 $ 323 $ 418 $ 471 $ 633 $ 545 $ 641 $ 644 $ 719 $1011. Contract Retentions 63 5 ~- Refinancings 30 43 59 114 103 105 44 49 57 42 Dividend 16 40 43 47 78 90 105 111 Clean-up Costs, Net. - 4 - 36 J' I 60 63 Total $ 141 $ TM STI SE $7TY $PY S MT $ 71TT $ 461 SM' Source of Funds: DeTe rrWinergy. $ (10) $ 131 $ (12) 2 2 2 2 2 2 2 other Internal Cources 218 292 422 486 497 491-656 653 712 780 8.ong-Term Detet - 13 85 130 175 300 215 130 110 160 285 Preferred Stock 60 100 110 Common taguity - THAESOP 7 7 Short-Team Debt 69 (101) (16) 22 36 (18) (25) (42) (46' (60) Temporaty Investments 61 Total SMI $ 401 $ 524 $ 685 $_$12 $R $2 $3 $M) J7 47 System Short-Team Debt Outstanding $ 254 $ 153 $ 137 $ 159 $ 196 $ 178 $153 $ 111 $ 65 5 Corp. Short-Team Debt Outstanding $~if 9 $~1 9 $ 11 .S 11 $ ll $3 Qpitalization t I.ong-Team Debt 51% 524 524 524 538 53% 534 534 534 52% Preferred Stock 10 10 9 9 8 8 '8 8 10 11 Common Equity 33 34 36 36 35 36 36 36 36 37 Short-Term tacht 6 j 3 3 4 3 3 3 1 Total 3004 100% 1006 1004 1004 1004 1006 1006 1004 1004 Heturn un Cosumon Equi ty 1.96 4.01 6.45 6.3% 7.1% 7.34 9.64 9.94 10.5% 11.7% Earnings Per Staare $.31 $.95 $1.58 $1.63 $1.92 $2.05 $2.78 $2.99 $3.29 $3.80 Dividends Per Share $.26 $.65 $.70 $.75 $1.24 $1.43 $1.67 $1.77 f.ew Shares issued .8 8 Assumed Price Per Share 8 9 - g DJ i

6 JCP&I. Source & Application of Funds 1980-1989 ($~Mlllions) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 ' Annualized udse Rate Increases 60 $_ 66 $ 10 $ 90 $ 60 $ 11 $ 19 $ 57 ~pplication of Funds A Construction $ 118 $ 148 $ 214 $ 256 $ 337 $ 225 $ 226 $ 257 $ 371 $ 602 contract Hetentions 4 tl 5 Retinancing, Etc. 10 13 14 45 24 '63 19 23 22 21 Clean-up costs, Net ~ i 9 8 15 16 Total $ D1 $77T $71K $7TE $m7 ~E6T ~YiT ~7BT T ~TfT Source of Funds: .Delerred Energy $ (38) $ 63 $ (15) 2 2 2 2 2 2 2 Other Internal Sources lit 151 186 238 228 201 243 255 269 301 Iorvj-Tes a Debt 50 50 50 150 50 70 180 Preferred Stock ' Short-Term Debt 35 50 25 75 (89) (5) 1 (23) 20 (12) 2 (10) Cap. Contr. I<e t. Earnings 25 20 25 20 15 125 Temp. Investments 4 Total $37 $3_T $_7_)T_ $3 $777 $~JY ,7W $3 $3 STT S/T Debt Outstaruling $ 120 $ 31 27 $ 28 5 $ 25 $ 25 $ 13 $ 15 $ 25 Capita!ization 4 ~- long-Term Debt 474 514 Sin 514 544 534 534 524 524 528 Preferred Stock 11 11 11 10 10 9 9 11 13 12 N anon Iquity 36 36 37 38 36 37 37 36 34 rnoat-Terra Dabt 6 2 1 1 1 1 1 1 Total 1004 1004 1004 1004 100t 100t 100% 1003 _1004 1004 l n.pi t a l tla t Earning A Re t u rr. t'otked River $ 230 $ 211 $ 186 $ 162 $ 137 $ 112 $ 87 $ 62

  • s i t 82 165 165 165 165 Cl,on-Up 34 h

65 65 31 ~ 27 24 21 votal $' m $MT $ 4TE $~15Y $ 16e $TW S TIT $' TI Heturn on Common Equity 3.8 4 5.4 4 7.1 4 7.3 4 8.2 4 8.4 4 9.7 4 10.0 t 10.3 t 13.4 's. Bond Coverage 1.92 2.23 2.34 2.89 2.25 2.78 2.91 3.10 3.17 2.55 Preferred Coverage 1.22 1.35 1.40 1.44 1.39 1.47 1.56 1.55 1.47 1.55 Hondable Property $ 65 6 2 6 8 $ 47 $ (19) $. 191 $ 230 $ 174 $ 242 27 e-* t ta

M ET-E D Source & Application of Funds 1980-1989 ($ Milllons) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Annuallzed Isase Itate Increases S 52 $ 15 $ 10 $ 23 $ 14 $ 68 8 $ 14 7 ~ glication of run(In: A fonstructTon $ 46 $ 63 $ 68 $ 72 $ 95 $ 84. $ 126 $ 152 $ 171' $ 219 Contract Retentions 10 - Ite f inancing, Etc. 14 2 10 52 17 47 2 21 2 2 Clean-tip Cos ts, Ne t 2 18 16 30 32 To t.. I $77 $7T $71 $W $ 144 $ TIT SM $~ITI $ ITI $77T Source of Funds: ~ lslerred Energy $ 33 $ 50 2 other Internal Sources 16 29 56 66 68 83 117 92 -95 96 1.ong-Term Debt 13 30 50 50 65 55 45 45 65 Preferred Stock Short-Ter m Debt 25 25 10 (12) 21 3 (41) (44) (4) 3 (5) Cap. Cont r. He t. Earisings 4 18 17 23 24 15 30 40 Temp. Investments Total $] $ dT $ _94 $ 154 $_144 SW $ 128 $W $W Sy S/T liebt Outstasuling 91* 91* 79* $ 100* $ 103* $_ 63* $j 2 $j capitalization t ~ f.omj-Term leet 48% 484 484 47% 475 496 52t 524 524 52% ~ Preferred Stock 12 12 12 12 11 11 11 12 .12 12 Common Djulty 33 33 34 34 35 36 37 36 36 36 Short-Team Debt 7 7 6 7 7 4 Total Jodt 3 63 ]~0'6s Tods _100s 3t 1006 - 100s ys 3: Capital Not Earsning A Return THI s2 $ 334 $ 334 $ 334 $ 334 Clean-Up Costs ~69 98 130 130 61 54 48 41 Total $ _4H $3 $M $_464 $J $i54 $ 48 $ _4_ l, Return on Common bluity (2.3)t 1.0 t 4'.7 4 4.3 4 5.5 4 5.4 4 10.5 4 10.6 4 10.7 4 10.9 % isond Coverage 1.04 1.65 2.19 2.11 2.14 2.10 2.54 2.47 2.43 2.27 Pteferted Coverage .88 1.09 1.29 1.21 1.26 1.30 1.56 1.51 1.53 1.48

  • Includes $13 Million Bonds H

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e-PENEl.EC Source & Application of Funds 1980-1989 ($ Millions) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Annualized Base Rate Increases $ 42 $ 13 $ 33 $ 23 $ 18 $ 49 $ 32 $ 30 Splication of Funds: Tonst ruction S 90 $ 112 $ 135^ $ 143 $ 201 .$ 236 $ 289- $ 235 $ 178 $ 189 Contract hetentions 5 Retinancing, Etc. 5 le 14 17 62 5 '23 4 33 20 Clean-Up Costs, Net 1 9 8 - 15 ~ 16 l To ta l : $~DT STfT $ 157 $ TM $ 273 $R $717 $ 239 $~fTT $2 Source of Funds: Dele E FEnergy 6 (5) $ I t. 1 Other Internal Sources 51 65 75 82 . 84 94 107 114. 140 134 los.9-Term Debt 35 50 15 100 100 75 65 45 48 Preferred Stock 50 60 Short-Term Debt 13 II (2) 55 2 30 (40) (24) (45) Capital contributions 20 20 40 45 100 100 20 Temp.' Investments 55 Total $~DT S T ri ST(Y SM S YYi $ 241 $ 312 $~7Ti $2 $2-S/T Debt Outstanding $ 11 $ 24 $ ?? $ 77 $ 79 $R- $ 69 $ 45 Capitalization 1 Iorvj-Term Debt 544 544 54% 56h 544 555 524 528 524 524 Preferred Stock 13 13 12 11 10 9 8 7 10 12 Common D3uity 33 32 32 31 31 31 34 37 '36 36 Short-Term Debt 1 2 2 5 5 6 4 2 Total ~FDD L T dt ~Tddl Nt Wt P5 ~Th5% r653 DDn ~TN6s Capital Not Earning A Return THI $2 $ 171 $ 171 $ 171 $ 171 Clean-Up Costa 34 49 65 65 31 27 24 21 Total $764 $721 $~ W $ 216 s7T $77- $ 24 $7 Return on Common Dguity Dond Coverage ~ 5.9 4 1.0 4 9.0 t 9.0 t 3.4 4 9.7 4 11.1 4 11.2% 11.3 4 - 11.5 t 2.08 2.15 2.36 2.19 2.21 2.03 2.11 2.02 2.52 2.58 Preferred Coverage 1.34 1.37 1.43 1.38 1.38 1.36 3.46 1.53 1.53 1.52 i Un d 4

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GPU SYSTEM 8 TOTAL SHORT-TERM DEBT & DEFERRED ENERGY 500 l l I I I I I I I I I I l 450 400 M I L 350 L ~ I O300 R.c.a. unir N '-----~~-----~---'--------~~~----------------------- SHORT-TERA DEST D 250 O s s L s sns w sonDs 835 80"8 L 200 s A s.T~ R DEFERRED ENERGY ' $se BOND / S 150 s s g st3e w sonDs 100 s N / 50 s s___ s ~ / I I I I I I I I I l 'l i I 0 10 20 30 40 to 20 30 40 10 20 30 40 1983 0 /-----1980-----/ /-----1981-----/ /-----1982-----/ l i I

9 JCP&L8 SHORT-TEnn M87 & PERMANENT FINAftCING PET-ED SHt,47-TERM D&BT L PCRMANENT FiftANCING

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  1. CA }tptf - -
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t. 30 830 Sont A 40 854 BOND -

A A 60 R 6 854 BOND 44 850 m S SO \\ 40 30 I I I I I i 1 l 1 i i i 1 I I I I I I I I I I I I I 0 le to 30 40 le 20 34 44 10 80 30 44 1983 14 Se 30 40 10 30 30 40 te M 34 44 1983 / - 8980 --/ /-t es t ~./ /---tesa---/ /--19s0---/ /--i se t ---/ /- 1333- / PENELECs $HORT-TERN MBT & PERMANENT FINANCING GPU C08P.s SHORT-TERN Mtf & PERRAfENT FaitANCtMG l I I I i I I I I I I I I I I I I I I I I I I I I , 180 f160 , 100 f 140 E 140 L 5 id n ta0 ..* c:a: P a tI................ - ,I o le0 D 100 0 S 100 0.0 i.0 0,, A. t ...C.4. Lintf l60 - l 60 M0 ConMON STOCat OR LONO-TEnft MBT i 8 40 835 9 875 5 40 80 - 30 I I I I I I I I I I I' I I I I I I 0 O to 20 3e 40 to 20 30 44 to te 34 40 1983 10 80 30 40 le to 34 40 10 24 30 40 1983 /--1930--/ /-- -193 3 --/ /---1982---/ /~1980--/ /---8981 - / /---1984---/

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i 9 JCetts INTEREST & PREFEAAES COWERAGE MET-EDs INTEREST & PSEFEllAED COMEAACE i I I I I I I I I I I I I 3*** i I l l g l l l a.75 ' l l l l 3 8.7s 3.50 3.50 C ~* C IC O2.45 Oa.25 U ~ Ia.00 ^

  • EIN IC*UlTN NEW IS$UE g3.00 A

E ti.n.... - ti.n e E E MIM PC WITH NEU_ ISSUE 8.50 g,gg 3.35 - .......*...* s a 1.25 PC.. " PC 1.00 1.00 I I I I I I I I I I I I I I I I I ~1 I I I I I I I 0.75 0.75 se me se 4e se ao se 4e se ao se 4e assa se ao se 4e se ao se 4e se ao se 4e assa / ~-1900-~/ /--1981-/ ' / - 1983---/ / ~ 1900---/ /--1981 - / / - 1983 - / PEMELECs INTEREST & PAEFEAAES COWEAAGE 3.00 I I I I I I I I I I I I I a.75 3.50 C Qa.as U IC

a.00

,1.75 0 E 1 3.s0 8.a5 '~.~..*o=,.*~..~==.- PC S.00 I I I I I I I I I I I I H 0.75 no a0 3e

  • ie se 2.

.. io a m i a [ / ~ 3330 - / /---3331---/ /--.8 Sea--/

o. e 20. V. Conclusions From the' Base Case Forecast Met-Ed Short-Term Debt Low Rate of Increase in Customer Cost New Construction Initiatives e

l 21. GPU SYSTEM VI. Unfunded TMI-2 Costs Treated as a Current Expense for Ratamaking Purposes The assumed ratamaking in the base forecast reflected only that which has been experienced in our rate orders since the accident and, specifically, included no current allowance for cost of clean-up or restoration. This produced a short-fall from the revised TMI-2 cost estimate of $455 million. In this first alternative to the Base Case ferecast we have assumed that this shortfall would be reflected in charges to customers which would require additional revenues of $76 million per year (on a levelized basis) from 1981 to 1986..These charges.might be in the form of an increased expense allowance-in anticipation of higher expenditures to be made and charged to income. In this case, earnings and coverages would be unchanged. Presumably, marketability of securities would be enhanced by removal of the uncer-tainty as -to, the availability of funds for this project. In terms of the three operating companies, this current expense allowance would mean: For Met-Ed, additional rates of $38 million per year or 4.2 mills per kwh. This would be a 6.1% increase over the level of rates assumed in the base forecast during the 1981 to 1986 period. For Jersey Central, additional rates of $19 million per year or 1.3 mills per kwh. This would be a 1.4% increase. For Penelec, additional rates of $19 million per year or 1.5 mills per kwh. This would be a 2.3% increase. The schedule 'and the graph on the next two pages summarize the impact on our customers. m

4 22'. General Public' Utilities Alternative Ratemaking to Recover Currently the Unfunded TMI-2 Costs (S Millions) JC ME PN Total 1981-1986 Unfunded TMI-2 Costs S 114 227 114 S 455 Total Customer Revenues S8 355 S3 741 S4 950 $17 046 Unfunded Cost Expressed As: - Million Dollar per year over the 1981-1986 period S 19 5 38 19 S 76 - Mills per KWH over the 1981-1986 period 1.3 4.2 1.5 - % Increase in Average Customer Bills over the 1981-1986 period 1.4% 6.1% 2.3% 1 .l 1

4 4 J0P&Le AUEAAGE CUST0fE4 COST IN CENTS /KUN MET-ESt AMERAGE CUST0fqER COST IN CENTS /KUd I3 I I I I I I I I I I I 83 I I I I I I I I I I I la 18 II C II ~ Ego C E SO N N 8

8 8

E,. 0,CtAUS, 8 Py P 7 E E R8 R8 -***~ 5 g E C y4 ...=***...., U 4 H SAGE NEW8eUES N 3 3 3 2 - 845E

  • TAN SURCHARGE REUDGES g

3 - I I I I I I I I I I I I I I I I I I I I I I O e 6/80 '80 *st '84 '83 '84 '85 '88 *87 '88 '88 8/80 *SO '88 '88 *S3 #84 '85 '86 '87 '88 '88 Ese OF PEA 108 END SF PERIOS PEreELECs AWAAGE CUST0fER COST IN CEMTS/EUN I3 I I I I I I I I I I I 18 gg Alternative Ratemaking to Recover C E10 Currently the Unfunded THI-2 Costa N g 8 ~ - Base Forecast

  • Total Customer Cost 1

P7 - - Customer Cost including Unf unded TMI-2 Costs E EfERG, CLAUSE RS,,,,,..-***~.....,.... Unfunded Costs, 1981-1986 g4 H JCP&L .13 cents /kwh additional 3 4 Met-Ed .42 cents /kwh additional 845E + TAX SUACatheGE REUEMugg Penelec .15 cents /kwh additional a t 3 - I I I I I I I I I g 0 5/80 '80 '81 *02 *S3 '84 *85 '86 '87 '88 '88 W j EMS OF PERIOS i i-s i J

I e 24. VII. Ratemaking to Allow Financing of the Unfunded TMI-2 Costs A second alternative to the Base Case Forecast is one which assumes that.the GPU Companies are granted rate relief such that they are able to finance the unfunded clean-up costs. We describe this additional rate relief as an allowance of i the revenues to service the capital costs, other than equity return, associated with the TMI-2 investment. This assumes additional annual revenues of 562 million beginning in the fourth quarter of 1981 representing the depreciation expense, the interest on debt and the preferred stock dividends and associated taxes. The first step was to add these revenues to the Base Case Forecast without funding the additional clean-up cost in order o measure the -incremental effect (relative to the Base Lase Forecast) on various financial indicators which are the following (see p. 25 to 28) : Return on-equity is in the 8.5% to 9.5% range with TMI-1 in service until TMI-2 returns to service. - ~ A common dividend could be instituted in 1981 and be scaled up to $1.20 per share in 1985. System common equity ratio improved to 37%, short-term debt is $125 million lower in 1985; Met-Ed's reliance on short-term debt declines significantly; subsidiary coverages increase. Under this scenario, the financial indicators do not appear much different from those of other utilities. Only the low dividend payout (40%) varies from the norm because of the need for.the System to retain enough earnings to avoid external equity sales while TMI-2 is out of service. The next step, while. using this ratemaking assumption, was to include as a financing requirement the unfunded TMI-2 costs during the 1981-1985 period (S415 millian - see p. 29 to 32). While earnings per share and ability to pay cash dividends on common stock would be impaired scmewhat, the dividend is still greater than the base case forecast and it appears 'tduit the System could finance the entire cost of clean-up and restoration. --=,.-%. ,,,.,,,,.w,. . - ~,,, .--p.e.

25. GPU CONSOLIDATED Source & Application of Funds With Revenues For TMI#2 Fixed Charges 1981-1985 1981 1982 1983 1984 1985 External Financing in Base Case: Long-Term Debt S 85 S 130 $ 175 $ 300 S 215 Short-Tees Debt (101) (16) 22 36 (18) Common Equity - TRAESOP 7 7 Total S (t6) S 114 S 197 $ 343 $ 204 Adjustaents: Long-Term Debt S S (50) $ (25) S 70 S Short-Term Debe 12 (36) (50) (20) (29) Common Equity Preferred Stock 45 To tal S 12 S (36) $ (55) S (45) $ 41 Revised External Financing: Long-Term Debt S 85 $ 130 S 125 S 275 S 285 Short-Term Debt (89) (52) (28) 16 (47) Common Equity 7 7 Preferred Stock 45 Total S ( 1) S 78 $ 142 S 298 $ 245 System S/T Debt Outstanding S 165* $ 113* $ 85* $ 101* 54* GPU S/T Debe Outstanding S 32 S 38 $ 35 S 15 S 2 Capitalization % Long-Term Debt 52% 53% 52% 52% ,53% Preferred Stock 10 9 10 9 9 Common Equity 34 36 36 37 37 Short-Term Debt 4 2 2 2 1 Total 100: 100% 100% 100% 100% Return on Common Equity 4.5% 8.7% 8.4% 9.3% 9.5% Earnings Per Share S 1.06 S 2.13 S 2.21 $ 2.55 $ 2.72 Dividends Per Share S .40 .60 .80 S 1.00 S 1.20 Annualized Rate Incr. S 62

  • Includes $13 Million Bonds 1

l 1

r 26. JCP&L Source & Application of Funds With Revenues For TMI#2 Fixed Charges 1981-1985 1981 1982 1983 1984 1985 External Financing in Base Case: Long-Term Debt S 50 $ 50 S 50 $ 150 $ 50 Short-Term Debt (89) (5) 1 (23) 20 Capital Contr. - Ret. Earn. 20 25 20 15 To tal $ (39) $ 65 S 76 S 147 $ 85 Ad justments: Long-Term Debt S S (50) $ (25) S 50 S Short-Term Debt (2) (16) (8) 30 (25) Capital Conte. - Ret. Earn. Preferred Stock 45 Total $ (2) $ (16) $ (13) 5 S 25 . Revised External Financing: Long-Term Debt S 50 $ 50 S S 125 S 100 Short-Term Debt (91) (21) (7) 7 (5) Capital Conte. - Ret. Earn. 20 25 20 15 Preferred Stock 45 Total S (41) S 49 $ 63 S 152 $ 110 S/T Debt Outstanding S 29 S 8 1 S 8 3 Capitalization Long-Term Debt 51% 52% 49% 51% 52 *. Preferred Stock 11 11 13 12 11 Common Equity 37 37 38 37 37 Short-Term Debt 1 Total 100% 100% 100% 100% 100% Return on Common Equity 5.7% 8.5% 8.3% 9.3% 9.5% Bond Coverage 2.28 2.55 3.34 2.66 3.03 Preferred Coverage 1.37 1.52 1.54 1.46 1.50 Annualized Rate Incr. S 18 Incr. Cust. Cost Mills /ICJH 1.4

27. MET-ED Source & Application of Funds With Revenues For TMI12 Fixed Charges 1981-1985 1981 1982 1983 1984 1985 External Financing in Base Case: Long-Term Debt S S 30 $ 50 $ 50 S 65 Short-Tera D4bt (12) 21 3 (41) Capital Contr. - Ret. Earn. 4 18 17 23 24 Total 4 $ 36 $ 88 $ 76 $ 48 Adjustuents: Long-Term Debt S S $ 20 Short-Term Debt (7) (30) (37) (7) 34 Capital Contr. - Ret. Earn. 4 19 20 (23) (24) Total S (3) $ (11) $ (17) $ (30) $ 30 Revised External Financing: Long-Term Debt S 30 S 50 $ 50 $ 85 Short-Term Debt (7) (42) (16) (4) (7) Capital Conte. Ret. Earn. 8 37 37 Total S 1 S 25 S 71 SJ S 78 S/T Debt Outstanding $ 84* $ 42* S 26* S._ 22* 15* Capitalization % Long-Term Debt 48% 49% 48% 50% 52% Preferred Stock 13 12 12 12 11 Common Equity 33 36 39 37 37 Short-Term Debt 6 3 1 1 Total 100% 100% 100% 100% 100% Return on Comnon Equity 2.0% 9.3% 8.5% 9.3% 9.5% Bond Coverage 1.83 2.84 2.75 2.72 2.53 Preferred Coverage 1.15 1.65 1.60 1.61 1.61 Annualized Rate Incr. -S 29 Ince. Cust. Cost-Mills /IGH 3.7

  • Inciudes $13 Million Bonds

o 28. PENELEC Sourcs & Application of Funds With Revenuts For TMIi2 Fixed Charges 1981-1985 1981 1982 1,983 1984 1985 9 External Financing in Base Case: Long-Ters Debt S 35 S 50 $ 75 S 100 S Id0 Short-Tees Debt 13 11 (2) 55 2 Capital Conte. - Ret. Earn. 20 20 40 45 To tal S 48 S 81 S 93 $ 195 S 147 Adjustments: Long-Term Debt S S S S S Short-Terz Debt (2) 2 (20) (25) Capital Conte. - Ret. Earn. 20 25 Preferred S:ock Total S (2) 2 S S Revised External Financing: Long-Term Debt S 35 S 50 S 75 S 100 $ 100 Short-Term Debt 11 13 (2) 35 (23) Capital Contr.-Rec. Earn. 20 20 60 70 Preferred Stock Total $ 46 S 83 $ 93 S L95 $ 147 S/T Debt Ducatending S 11 $ 24 S 22 S 57 S 34 Capitalization % Long-Tern Debt 54% 54% 56: 54% 55: Preferred Stock 13 12 11 10 9 Common Equity 32 32 31 33 34 Short-Term Debt 1 2 2 3 2 Total 100: 100: 100* 3: 100% Return on Common Zquity 7.4% 10.8% 10.6% 10.9% 11.1% Bond Coverage 2.21 2.59 2.39 2.39 2.19 Preferred coverage 1.40 1.51 1.46 1.48 1.47 Annualized Rate Incr. S 15 Incr. Cust. Cost Mills /KWH 1.5 6-l

29. GPU CONSOLIDATED Source & Application of Funds With Revenues For TMIf2 Fixed Charges - Add'1 Restoration Costs 1981-1985 1981 1982 1983 1984 1985 ' External Financing in Base Case: Long-Term Debt S 85 $ 130 $ 175 $ 300 $ 215 Short-Term Debt (101) (16) 22 36 (18) Common Equity - TRAESOP 7 7 Total $ (16) $ 114 $ 197 $ 343 $ 204 Adjustments: Long-Term Debt $ 15 $ 10 $ 50 $ 35 $ 60 Short-Term Debt 38 11 (8) 1 1 Common Equity Preferred Stock. Total $ 53 $ 21 $ 42 S 36 $ 61 Revised External Financing: Long-Term Debt $ 100 $ 140 $ 225 $ 335 $ 275 Short-Term Debt (63) (5) 14 37 (17) Common Equity 7 7 Preferred Stock Total $ 37 $ 135 $ 239 $ 379 $ 265 System S/T Debt Outstanding $ 191* $ 186* $ 200* $ 237* $ 220* GPU S/T Debt Outstanding $ 31 $ 35 $ 30 $ 40 $ 57 Capitalization % Long-Ierm Jebt 52% 52% 52% 53% 54% Preferred Stock 10 9 9 8 7 Commen Equity 34 35 35 34 35 Shore-Term Debt 4 4 4 5 4 Total 10 0% 1002 100% 100% 100% Return on Common Equity 4.4% 8.3% 7.9% 6.9% 6.7% Earnings Per Share $ 1.04 $ 2.04 $ 2.05 $ 1.88 $ 1.90 Dividends Per Share S .40 .55 .70 .80 .90 Annualized Rate Incr. S 62

  • Includes $13 Killion Bonds-I H

30. JCP&L Source & Application of Funds With Revenues For TMId2 Fixed Charges - Add'l Restoration Costs 1981-1985 / 1981 1982 1983 1984 1985 External Financing in Base Case: Long-Term Debt S 50 $ 50 $ 50 $ 150 S 50 Short-Term Debt (89) (5) 1 (23) 20 Capital Conte. - Ret. Earn. 20 25 20 15 Total 5 (39) $ 65 $ 76 S 147 $ 85 Adjustments: Long-Term Debt S $ 10 s 25 S S 50 Short-Term Debt 8 (1) (9) 19 (23) Capital Contr. - Ret. Earn. Preferred Stock Total S 8 9 16, S 19 $ 27 Revised External Financing: Long-Term Debt S 50 $ 60 $ 75 S 150 $ 100 Short-Term Debt (81) (6) (8) (4) (3) Capital Contr. - Ret. Earn. 20 25 20 15 Preferred Stock Total S (31) 74 $ 92 S 166 S 112 S/T Debt Outstanding S 39 S 33 S 25 S 21 $ 13 Capitalization % i Long-Term Debt 50% 51% 52* 54 % 55% Preferred Stock 11 11 10 9 9 Common Equity 37 36 37 36 35 Short-Term Debt 2 2 1 1 1 To tal 100% 100: 100% 100: 100% Return on Common Equity 5.7% 8.4% 8.1% 8.9% 9.2% Bohd Coverage 2.28 2.50 2.92 2.30 2.64 Preferred Coverage 1.36 1.46 1.47 1.41 1.44 t .innualized Race Incr. $ 18 Incr. Cust. Cost-M111s/1C4H 1.4 i

e o 31. MET-ED Source &. Application of Funds With Revenues For TMI#2 Fixed Charges - Add'l Restoration Costs ' 1981-1985 1981 1982 1983 1984 1985 External Financing in Base Case: Long-Term Debt $ 30 $ 50 $ 50 $ 65 Short-Term Debt (12) 21 3 (41) Capital Contr. - Ret. Earn. 4 18 17 J 24 Total 4 $ 36 $ 88 $ 76 $ 48 Adjustments: Long-Term Debt 3 $ 25 $ 35 $ 10 Short-Term Debt 14 (9) (3) 37 Capital Contr. - Rec. Earn. 3 15 14 (23) (24) To tal 17 15 $ 30 9 $ 23 Revised External Financing: Long-Tera Debt $ 30 $ 75 $ 85 $ 75 Short-Term Debt 14 (12) 13 (4) Capital Conte. Ret. Earn. 7 33 31 To tal $ 21 $ 51 $ 119 $ 85 $ 71 4 S/T Debt Outstanding $ 105* $ 93* $ 105* $ 105* $ 101* Capitalizatios % Long-Tern Debt 47% 47% 47% 49% 50% Preferred Stock 12 12 11 11 10 Common Equity 33 34 35 33 33 Short-Term Debt 8 7 7 7 7 Total 100% 100% 100% 100% 100% Return on Common Equity 1.8% 8.3% 7.3% 7.7% 7.4% Bond Coverage 1.83 2.84 2.56 2.36 2.27 Preferred Coverage 1.L2 1.50 1.38 1.36 1.31 Annualized Rate Incr. S 29 Ince. Cust. Cost-Mills /KWH 3.7

  • Includes $13 Million Bonds

32. PENELEC Source & Application of Funds With Revenues For TMI#2 Fixed-Charges - Add'l Restoration Costs 1981-1983 1981 1982 1983 1984 1985 External Financing in Base Case: Long-Term Debt S 35 S 50 $ 75 $ 100 $ 100 Short-Term Debt 13 11 (2) 55 2 Capital Contr. - Ret. Earn. 20 20 40 45 Total S 48 S 81 S 93 $ 195 $ 147 Adjustments: Long-Term Debt S 15 S S - S - S - Short-Term Debt-(6) 6 17 (23) (30) Capital Conte. - Ret. Earn. 20 25 Preferred Stock Total S 9 S 6 $_11 S (3) $ (5) Revised External Financing: Long-Term Debt S 50 $ 50 $ 75 S 100 $ 100 Short-Term Debt 7 17 15 32 (28) Capital Contr. Ret. Earn. 20 20 60 70 Preferred Stock Total S 57 SJ $ 110 $ 192 S 142 S/T Debt Outstanding S 7 SJ S 41 S 73 S 45 Capitalization % Long-Term Debt 55% 55% 55% 54% 54% Preferred Stock 13 12 11 10 9 Common Equity 32 31 31 32 34 Short-Term Debt 2 3 4 3 To tal - 100% 100% 100% 100% 100% Return on Common Equity 7.3% 10.5% 10.2% 10.1% 10.1% Bond Coverage 2.14 2.51 2.32 2.34 2.15 Preferred Coverage 1.37 1.48 1.41 1.46 1.46 Annualized Rate Incr. S 15 Incr. Cust. Cost-Mills /KWH 1.5 l l

e CENERAL FUSLIC tir!LITIES Construction Forecast ($ MAllions) t 1980

1281, 1982 1983 1984 1985 1986 1987 1988 1989 81 New Generst ion rocked Saver

$ 14 $ 4 3 Sayreville Converal en* (8 001 JC) - 1985 2 5 20 23 Seuard #7 (601 FM) - 1987 5 19 20 ~ 38 70 109 1 33 49 coal #1 - 1991 2 10 17 32 71 157 247 Coal #2 - 1993 3 11 21 38 . 82 Fumped Storage - 1994 other 1 2 5 I I 15 15 400 - 5 6 9 9 7 26 42 72 ' 56 57 Total $ 24 $ 31 $ 35 $ 64 $l15 $156 $2 89 $228 $266 $ 4 86 Esisting Generation 76 79 80 73 70 68 61 53 63 64 Transeteston nu tar io Nyd ro 2 3 48 66 1 38 ID V 7 17 21 4 25 56 IS 1 10 47 other 17 37 53 59 58 65 56 58 46 46 Distribut t on 82 101 11 3 121 12 5 133 138 139 152 165 Huclear Fuel 40 30 27 33 94 60 145 lb0 177 192 LoaJ Kanagement 15 30 30 General 6 to 10 24 8 7 7 5 5 ___jl Total $254 $323 $418 $4 78 $633 $545 $641 $644 $719 $1 011 Fayment of Setentione NE $ 33 Other 30 5 - Total Construc tion $g $g $g4 $]4 $]6 $g $g6 $g6 $g $1 011

  • As same s t ha t the Federal Covernment provides funJing for 50Z of the conversion costs starting in 1983.

>d 13 ' 93 O D(L Vu >( L.

~- e.. MAY 23, 1980 CAPACITY PLAN GPU INSTALLED CAPACITY & OBLIGATION 15 g4 w OeLIGATION.ASEO ON 13 GPU LOAD MANAGEMENT 00AL e T g

  • a c

g g H 12 .k

    • ta g' ga 0

l a u s ~' g g,5 5 S 11 ~. el ei ~7.eu t0TAL CAeACITv 8 G a { f t5 A OeLIGATION D H , g - r6 el. H 10 g W, LT cs C4 E 5 CS (5 g 'u u o u 7 O FIAN P W HASE gg g f4 c4 (4 S g . 4. -d'E-15 -1 g I q 33-CI O ct ct n $7 ini-a int-a g "Q g -y-(2 M M _g E 3 et 1 -j }_ -{ F g M.7 c c2 c2 u i G 6 ini. u et E 51 en ci 53 2 u i - A ini-a us 1L g Tai-i T 4 J,'8 o T 6 ea 3 EXISTING INSTALLE, CAPACITY u LESS RETIRinENTS t-* D. ed-OX 2 g f 1 -- a 3 i 0 .2 .2 .4 YEAR j i i i I

4 e MAY 23, 1980 CAPACITY PLAH JERSEY CENTRAL INSTALLED CAPACITY L OBLIGATION 7000 6500 i, ~ JEks&Y CEntant TOTAL ~ CAPACITY 00 LIGATION 5500 g g t-r t. g l W OBLICATION BASES ON { 5000 JEASEY CENTRAL LOAp E nn U g ,, g ,d 3 a m nANAcEnENT c04t) a 3 s 3 i g g g y M 4500 g 1-u u cnL 6 E g c0AL s =A 4000 ~~ l U ~ ~ ~' ~ '4 co. 4 ~ A 3500 H- " ED 8'***'E T rien Puncuast g c0AL 2 5E 5 0 0 B T 3000 Tpt - COAL I-5 int-2 2500 -int - ini-t COAL 2 COAL I 2000 - dk E TMI-2 sQ i 'nt-T e l $500 - -y w i EXISTING INSTALLED CAPACITY 1000-_ LESS AETIREMENTS O i i ts 500 -- r t O-- 1 j 81 sa a3 84 35 as 37 sa sg 90 93 93 93 94 95 96 97 90 99 2000 i, YEAR 1 i }

MAY 23, 19R0 CAPACITY PLAN MET-ED INSTALLED CAPACITY & OBLIGATION 5000 4500 4000 3500 N M 8 E esticarsoH sASED ON G 3000 nti-ro Loan M g NET-ED TOTAL CAPACITY 8Q { f" y L-n OBLIcAr!ON o o g 35 A 2500 )" "A

cat, T

sa# * - Ps y T ($ coat s es cn ~~en s2000 B Q g 7 _ ; /g t eg eg eg U U "3 '3 ~ ini-a int-a cl 11 ct tt ch ct et i 1500 di ci ci ct E int-8 ini-t Tnt-a int-a j i 1000 l Ynt - w Tnt-3 o* l Existinc insrattEn cAeactiv i 500 tess act acntnis a i 4 0 si sa s3 s+ ss as av se se so 91 sa 93 se es 96 97 se se 2000 YEAR 4

e 9 4 MAY 23, 1980 CAPACITY PLAN PENELEC INSTALLED CAPACITY L OBLICATION 5000 4500 ontle4TIoM sasEs oN PENELEC LOAD MANAGEnENT COAL p g 1 4000 e { o a PENELEC TOTAL CAPACITV g o a OsLIGATION u M E4 g c1 07 3500 PS PS y g g g COAL 3 g Q g E 6EuAno 7 L G 3000 ps es L U ~) ' int-a a-sEuAas ? -COAL 3 c-mi ' _. A A inI-a e-TMI-1 A 2500 TMI-1 .T int-a sEuAno 7 I I_; S 2000 inI-1 1 1500 ~ w 64 1000 - EXISTING INSTALLED CAPACITY LESS sETIREMENTS A l O M 4' 500 O l si sa a3 at as es s7 se as so et sa e3 e4 es ss 97 se se a000 YEAR i I 1 1 l

l SOLIS L g -- Hy STOSl CAL CD T kS$T DAS 9 1% O D 08 MA MSHfD-DOT LlHf -- LAST AAS 419798 ORIGlHAL SUSCET GPU SYSTEM HO2 FUEL OIL PRICES -- ACTUAL (4/80) & PROJECTED l 80 llIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIi1.l_lIIIIIIIIIIIIII 76 72 / 68 N 64 P fra R 60 I 38 58 C 88 54 ' Z E 52 Z Current Forecast Z l 48 M 4[ P / E 44 ,43 R 49 9 B 36 A 35 32 R - Budget Forecast for 1980 R 28 8 M'2 p. 28 - ) E 2 L 24 Ja A3 20 gg M

p Budget Forecast for 1979 12 g

p. F 8 4 n ~IIIIbIIIiIIIiIIIiII!iIIIiIIIi!!I IIIiIIIbIIIiIIIiIIIiII! I 0 1972 1973 1974 1976 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 I a

-w NewsRelease General Public Utilities Corporation 100 Interpace Parkway Parsocany, New Jersev 07054 201 263-6500 Furtner informaton KENNETH C. McKEE i For release IMMEDIATELY August 8,1980 80-056 j PARSIPPANY, NJ, August 8 -- General Public Utilities Corporation (GPU) released today an updated cost and scheduling plan for the cleanup and recovery of its damaged Three Mile Island Unit 2 (TMI-2) nuclear generating plant. Immediate emphasis continues to be on maintaining the plant in a safe condition while cleaning it up, said William G. Kuhns, GPU Chairman. "The revised plan projects fuel removal from the reactor by mid-1983," he said, "with an expenditure for cleanup of about S500 million. Follow-on restoration of Unit 2 to the pre-accident operating condition, including a new fuel core, would require another $260 million, based upon completion in late 1985." The above program cost estimates are in 1980 dollars, and do not include any costs associated with the fixed charges on the S800 million investment in TMI-2, Kuhns stated. He pointed out that increases over preliminary estimates made about one year ago of a four-year, S400 million program to accomplish the task are attributed to a combination of new items added to the work scope, higher estimates for many of -MORE-L

J the original tasks and the increased costs associated with a more lengthy time schedule. " Major elements of the cleanup program," Kuhns said, " include: processing of the 700,000 gallons of contaminated water in the containment building and the reactor coolant system; decontamination of the containment building and removal of contaminated equipment and material; detailed reactor inspec-tion including removal of the reactor head and internals; and the_ removal and transfer of the fuel core to the spent fuel pool. At this point, the future decision to restore the plant to operation must await detailed inspection of the major plant components. The estimate does not include the cost of modifi - cations to meet post-accident regulatory requirements." He said that the Company has contracted with the Bechtel engineering-construction organization to play a major role in the cleanup, decontamination and reactivation of the damaged unit. The agreement, he noted, provides for Bechtel services 1 in the area of technical planning, studies and analyses for.the recovery project and for engineering, ' construction, construc-tion management, procurement and related services. Kuhns described the Bechtel organization as " uniquely i l qualified to undertake a project of this magnitude and of major i I. importance to the' future of commercial nuclear power. Bechtel's -MORE-

4 ~ technical resources, prior experience in nuclear projects, organizational capability and management commitment combine with those represented by GPU -to form a very solid base for accom-plishing the : massive cleanup and restoration effort." "While the recovery program presented today outlines a logical and consistent set of steps'for accomplishing cleanup, the program is currently limited' by several factors," Kuhns said. "These include: the establishment of regulatory criteria, the degree of public acceptance and the resolution of questions involving waste-disposal. An immediate limitation could be. regulatory approval of the Submerged Demineralizer System (SDS) for water cleanup and acceptance of the Programmatic Environmental Impact Statement (PEIS) now being drafted by the Nuclear Regula-tory Commission and planned for initial release shortly. The PEIS, when approved, should provide the basis for regulatory criteria and should assist in achieving public acceptance." Until satisfactory resolution of these problems, Kuhns said, the Company does not plan to accelerate the level of effort beyond the current rate of about S100 million a year. Cash flow requirements for the updated ' cleanup esti. mate average about $125 million a year, Kuhns pointed out. On a System-wide basis these annual cleanup costs would approximately equal the energy savings the GPU customers would realize on - the' return to service of the undamaged Unit 1, he added. -MORE- _ _ _. ~ __. _ _ _.,

. IIe said the S300 million of available insurance will approximately cover cleanup costs through 1981 and that the insurance coverage offers time for exploring and~ organizing broad-based assistance from government and the nuclear industry. "There is growing recognition of the need to address a number of nuclear power matters associated with plants now in service or under construction by assessing the cost involved to the users of nuclear power across the country, rather than having the customers of a single utility bear a disproportionate burden," Kuhns said. "Whether it be TMI or other possible nuclear plant or system failures, nuclear waste -disposal or other tasks, GPU believes that a national program of financial support, perhaps in some form of a surcharge on nuclear generation or nuc1' ear plant capacity, is appropriate. "For example, a surcharge on all nuclear kilowatt-hours of generation that would cost the average 500 kilowatt-hour customer less than 10 cents a month' (even for those utilities with the highest fraction of nuclear generation) would produce a fund of more than $100 million a year to address these matters. The Company will be working with industry and government leaders i during the next several mont'as in developing a framework for the funding and management of cuch a program. A national response is warranted and we will vigorously seek such support," Kuhns I concluded. 1 l

. cs Enc 1csura 3 General Public Utilities TMI-2 Clean-up & Restoration Costs Used-in tha August 14 NRC Presentation ($ Millions) 1979 Costs not charged to Expense $ 95.00 Clean-up and Restoration: - 1980 to 1985 w/o Escalation 690.00* - 1 year extension in schedule 50.00 - Escalation (s8%/yr.) 140.00 - Replacement Fuel Core 70.00* - AFC on Fuel Core 13.00 0 & M Costs charged to Expense 17.00 - 1979 & 1980 17.00 - 1981 to 1985 75.00 Total $1,150.00

  • These components represent the $760 million that has appeared in the press.

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