ML19338D559
| ML19338D559 | |
| Person / Time | |
|---|---|
| Site: | Crane  |
| Issue date: | 09/17/1980 |
| From: | Sweeney L JERSEY CENTRAL POWER & LIGHT CO. |
| To: | Vollmer R Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 8009230449 | |
| Download: ML19338D559 (5) | |
Text
,
a Jersey Central Power & Ught Comparty Madison Avenue at Punch Bowl Road Mornstown, New Jersey 07960 (201)455-8200 September 17, 1980 Mr. Richard H. Vollmer Director, Three Mile Island-2 Support Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission 7920 Norfolk Avenue Bethesda, MD 20014 Re: NRC Docket No. 50-289 - THI-l Restart Proceeding
Dear Mr. Vollmer:
By your letter dated September 21, 1979, to R. C. Arnold, and Mr. J. C.
Petersen's data requests sent to C. W. Smyth on November 9,1979, you requested us to keep the NRC informed of significant regulatory developments affecting the GPU companies. Accordingly, the enclosed material (8 copies) has been sent for that purpose.
Enclosed please find a copy for your file of Administrative Law Judge Stephen Marshall's Initial keision, Very truly yours, f.
(4~
h,
- )))lQ
- xdf(gy'lidiIll 0 Lawrence E. Sweeney,
Rate Department rc Enclosure
.cc :
M. Karlowicz (w/ enc)
J. Petersen D. Carroll (w/o ene)
L. Gentieu b
{
8000230 M Jersey Central Power & L:gnt Company is a Member of the General Puche Utikt:es System s
_{'
p,
-=;
5 V:
i.;,+
.s.w.
A
- %*yh lhee.k y
5 tate al Metu ilerseg
. OFFICE OF' ADMINISTRATIVE. LAW A
4 INTERIM OR DER -
OAL DKT NO. PUC 3518-80 AGENCY DKT. NO3J BPU 307-488 and 804-285' N
\\
IN THE MATTER OF:
\\-
THE PETITIONER OF JERSEY CLNTR AL
~ POWER & L*GHT COMPANY FOR AN INCREASE IN RATES ANDl AN AD-JUSTMENT OF THE LEVELIZED ENERGY
' ADJUSTMENT CLAUSE.
Record Closed:' September 9,1380 Decided: september 16, 1980 Agency Received:
Mailed to Parties:
APPEAR AN CES:
. Parties listed or attached Service List
, BEFORE STEPHEN MARSH ALL',- ALJ:
J O.n April 29, 1980, Jersey Central Power and Light Company (hereinafter
~
. Petitioner) filed a petition with the : Board of' Publie. Utilities, requesting an increase in base rates,'.f pursuant to ? N.J.S.A.48_:2-21, et sec.
On June 4,1980, the matter. was -
,ye Jeriey'Is ;4rr Equ.A Orrortwrity Employer f
z
3., 0:t e
7 m
<L ll;;
My~
10AKelyr(NOiPUC3518f80:
g transmitted to the Office 'of Administrative Law for hearing pursuant to N.J.S.A.52: 14F-1, et sec. ; On~ July 21,1980, the Petitioner filed another petition with the Board,' requesting an : increase intits: LevelizediEnergy Adjustment Clause (LEAC), to_ becorhie effective -
September 1,21980. The matter was transmitted to the Office of Administrative Law on July 01,l1980, sand-' v'as-consolidated with t3e earlier petition _ for the increase in the
' Petitioner's base rate's.-
}
The Off'ce of Administrative Law held a series of hearings on the consolidated petitions,~ both in Newark, and at Toms Rtver, Morristown, and Sparta, during the months -
T.
-i
'of August 'and September 1980. By consent of the parties,(with Counsel for Ocean County takingsno position), the Petitioner amended the requested effective date of the_ proposed
' increased LEAC from T Sep'tember 1,
1980 to October 1,
1980, with corresponding adjustments for. recovery' over a five, rather.than a six-month period.
The parties t
submitted briefs or position papers cn the issue of the LEAC on September 8 and 9,1980.
Because the ruling on the LEAC issue would completely resolve one of the petitions, the parties stipulated that the. Board should have a deadline of September 30,1980, to review the matter.
In its initial LEAC filing, the Petitlener requested that the present LEAC of x
21.928 mills /Kwh be increased by an additional 6.264 mills /Kwh (or by c.pproximately' 30%), which would inco ase the Petitioner's annual revenues by approximately $77 million.-'
During the course of the i. earing and prior to briefing, the Petitioner reduced the proposed 1
increase to cnty 5.808 mills /Kwh, which corresponds to annual revenues of approximately l
$72 million.
- l The Public Advocate not only opposed the proposed increase in the LEAC, but also argued for its reduction. The Public Advocate requested the LEAC be reduced by
- I 0.776 mills /Kwh, with a corresponding. revenue roll-back of some $5 million annually. The Counsel for Ocean County concurred with the Public Advocate's position.
L.
The staff of the Board ' of Public Utilities took the position that the
{
Petitioner's LEAC should be neither increased nce decreased'at this time, but held at a level identical with the past six months. The Petit {oner, however, would not be precluded from making a further filing for interim relief, should circumstances now at en uncertain
~
stage develop further clarification during the course of the hearings.
r h
r L~
r
?
L Y
7
s..
i c-10 AK DKT. NO. PUC 3518. The criteria for ruling 'upon ' proposed rate increases are dclineated in
[-
N.J.S.A.48:2-21, under Lwhich, "(t)he burden of proof to show th'e increase...is just and reasonable shall be upon the' public utility...." Before any rate increase can'be granted,
. the Petitioner must fulfill the burden of presenting a preponderance of clear and credible.
evidence in support of the proposed increase.
In a similar manner, any other party t
proposing a decrease or alteration in the existing rate level (previously approved by Board Order) bears the burden.of proof to establish clearly the reasonableness of the proposed
' change.-
In its petition, supporting documents and witness' testimony, the Petitioner has sought to justify the increased LEAC_ by proving a projected increase in operating costs in excess - of $70 million.' The largest component in the additional cost figures was a projected increase in purchased power costs, due to an anticipated extensive outage cf the t
Oyster Creek nuclear power plant in the near future. -During the period of several weeks that the Oyster Creek plant is undergoing the " Lessons-Learned" testing procedures, the Petitioner will face the necessity of obtaining power to meet its customers' demands from other, more expensive, sources.
. The parties agree that an extensive outage of Oyster Creek plant -will occur sometime in the future, but they disagree over its timing and the propriety bf enacting' correspcnding adjustments to the LEAC in next six month period through the instant-ruling. Although the Nuclear Regulatory Commission had initially directed that the tests (and therefore the corresponding outage) be undertaken and completed by January 1,1981, the Petitioner has prepared and submitted a letter of appeal, requesting a postponement of the. testing. Should the Nuclear Regulatory Commission grant the pcstponement, it would delay the onset of the outage and dramatically lessen the Petitioner's cost projections.
. Until the Nuclear Regulatory Commission acts upon that request for postponement, there is a strong element of uncertainty regarding the timing, extent, and corresponding costs of the outage. Insofar as this element of uncertainty is unresolved, the Petitioner has not established the clear preponderance of evidence necessary.to justify an increase in rates, as mandated by N.J.S.A. 48:2-21.
In a similar manner, there a' re also several further elements of uncertainty in the other components of the Petitioner's projected increase in the amount of the LEAC:
changes in sales; P.E/ Salem Pricing Substitution; split savings; and line Icsses. Although the Petitioner has-presented extensive testim ony on these components,
'D w
y.
_t O AK bKT. NO. PUC 3518-80 there. is still' a large element of uncertainty in the projections,. which _ is further
' compounded by the indeterminate' status of costs regarding the Oyster Creek putage. The formulation of any new LEAC involves a series of estimates and prehetions, within which some uncertainty is inevitable, and beccmes largely.a matter of informed judgement on the part of the deciding body. However, in this case the uncertainty in the Petitioner's projections for the, upcoming six-month period contain such an element of indeterminacy that I feel compelled to agree.with the Board staff that the standard of N.J.S.A.48:2-21 has been met.
The' large element of uncertainty regarding the costs contingent upon the timing of the Oyster Creek outage also makes it inappropriate to follow the Public Advocate's recommendation of a decrease in the LEAC at.this time. Customers might be again subject to a rapidly fluctuating energy charge, a situation which the Board has sought to ' avoid by the institution of the LEAC proceedings. Furthermore, the Public Advocate has not presented a clear preponderance of evidence to support its recommended use of a six-month cost projection period, and an 18-month amortization period..
After a review of the rec ~ord in this case, I FIND that there exists a large uncertainty regarding the level of costs during the upcoming six-month period, due to the indeterminacy of.the timing of the outage of the Oyster Creek Nuclear Power Plant and other facters.
I CONCLUDE that both the proposed increase in the LEAC of 5.808 MILLS /KWH requested by the Petitioner and the proposed decrease in the LEAC by.a factor of 0.776 mills /Kwh requested by the Public Advocate be DENIED.
1 i
~
l
$. $ N bD
^
- DATE 3:
/
srEPHEN M ARSH ALL, A.L.J.
. bb 7%
_.; _