ML19343B844

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Testimony on Behalf of Util Re Tx Pirg Contention 1 Re South Texas Project 3 Versus Allens Creek Site.Listing of Cost Savings Encl
ML19343B844
Person / Time
Site: Allens Creek File:Houston Lighting and Power Company icon.png
Issue date: 12/18/1980
From: Mccuiston R
HOUSTON LIGHTING & POWER CO.
To:
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ML19343B832 List:
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NUDOCS 8012300711
Download: ML19343B844 (22)
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{ DIRECT TESTIMONY OF '

ROBERT M. McCUISTION 1

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'li ON BEHALF OF HOUSTON LIGHTING & POWER COMPANY '

! RE TEXPIRG CONTENTION 1/STP 3 VS. AC 1 i

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DIRECT TESTIMO'NY OF ROBERT M. McCUISTION RE STP 3 VS. AC 1 1

Q. Please state your name and position.

2 A. My name is Robert M. McCuistion. I am the Vice President for Power Systems Development of Houston Lighting

& Power Company.

s Q. Please describe your educational background.

A. I hold a Bachelor of Science degree in Electrical 7

Engineering from The University of Texas, which I received 3

in 1942.

9 Q. Are you a Licensed Professional Engineer?

10 A. Yes. I am a Licensed Professional Engineer in the 11 State of Texas.

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Q. Are you a member of any professional organica-13 tions?

14 A. Yes. I am a member of the National Society of Professional Engineers, the Engineers Joint Council, the 16 Institute of Electrical and Electronic Engineers, the Na-tional Water Resources Association and the Texas Water la Conservation Association.

19 Please describe your employment experience.

Q.

20 A. I began my employment with HL&P in 1946. I worked I

1 21 in various engineering jobs in the Company and in May, 1971 22 I became the Vice President of Engineering. I held this 23 position until I assumed the duties of Vice President, Power 24 Systems Development, in February, 1980-.

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1 2 Q. What are your present responsibilities?

A. I am responsible for power plant siting, and the 3

location of power plant sites for Houston Lighting & Power 4

_ Company's new power plants.

3 l , Q. Is this a new area of responsibility for you?

l A. No. Power plant siting has been one of my areas 7

of responsibility for several years. In fact, I was in charge of the Company's site evaluation process at the time 9

we selected both the STP site and the Allens Creek site. It 10 was my view then and now that both of these sites are ex-11 cellent sites for the location of nuclear plants.

Q. What is the purpose of your testimony?

~3 l A. The purpose of my testimony is to address TexPirg 14 Contention 1, which is as follows:

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l "The South Texas site is an obviously superior 6

alternative to the Allens Creek site because:

17 a. South Texas is already the 1ccation of two nuclear plants which are currently under construction and 13 disturbing an unspoiled site is not justified; i , b. the cooling lake at South Texas is large enough to

' 9 accommodate one more unit such as the proposed

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c. constructing another nuclear facility at South 21 Texas would involve significantly less land use i than constructing the proposed facility at the j 22 Allens Creek site; 23 d. construction of an additional facility at South l Texas will involve the use of significantly less 24 water than will the proposed facility.

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Consumptive water use is a critical issue in Texas; indeed, the Legislature has required that ground water users in the Houston area convert to 3

surface water to reduce subsidence, which is a major problem in this area; 4

e. construction of an additional facility at South 5 Texas-would require less use of additional land for transmission lines than would the proposed 6 facility; and 7 f. the population density in the vicinity of the South Texas site is and will in the future be 3 significantly~ less than that in the vicinity of the proposed fecility. The residual risk to the 9 public from operation of an additional facility at South Texas would therefore be less than that 10 associated with the operation of a facility at the proposed site.

! 11 l I will be assisted in this task by a-panel of witnesses who l

12 have addressed various parts of this contention. Subpart 13 (a) of TexPirg's contention is correct insofar as it asserts 14 that there are two nuclear units under construction; however, 35 as I will describe later, TexPirg is incorrect in assuming 16 that the Allens Creek site will remain undisturbed even if

'7 ACNGS Unit 1 were moved to STP. I will also testify that 1

1 18 TexPirg's contention is premised on the erroneous assumption 19 that we have a contractual right to construct a third unit 20 at STP. Subpart (b) is correct but I will explain that 21 there is no assurance that we can obtain additional water to 22 operate a third unit at STP. As to subpart (c) of the l

23 contention, Mr. Hussey will explain that preemption of the 24 land at the Allens Creek site is not environmentally l

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significant. Mr. Finley and Mr. VanSickle will address subpart (d) -- Mr. Finley's testimony establishes that the 3

Allens Creek project will not adversely impact water supplits 4

_ in the Brazos River basin, and Mr. VanSickle will testify a

that the City of Houston has no plans to import water from 0

the Brazos River.

I will address subpart (e). Subpart (f)

, 7 will be addressed by Mr. White, who will provide current population estimates for the area around the Allens Creek 9

site. Dr. Hamilton will address the comparative risks to 10 the surrounding populations from accidents at either site.

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The testimony presented on cubpart (f) will also cover 12 Bishop Contention No. 1. Mr. Schoenberger will appear en

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the same panel and will address Hinderstein Contention No. 5 dealing with coastal sites.

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Q. Taking these points in order, is it correct to

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assume that if ACNGS Unit 1 were to be moved to the STP site

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there would be no disruption of the Allens Creek site?

' 8 A. No, it is not. We would still plan to use the l

19 site fcr construction of a power plant.

20 Would you please explain the basis for your last Q.

21 answer? ,

22 A. The Allens Creek site is one of the highly desir-l 23 able sites in or near our service area, and it is now avail-l 24 able to the Company for construction of new generating i

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2 capacity. I believe that the Company would construct other

, ' facilities at tnat site. The reasons for this are e avious.

s First, the Company owns all of th- site. It is a significant task to acquire a site this large and the fact that the 2

, Company already owns the site would weigh heavily in favor l

  • l of its use for another power plant. Second, the Company has 7

a contract for a water supply from storage reservoirs in the s

3razos River Sasin for development of future power plants 9

alony the Brazos River. This supply is not contingent upon 10 any particular kind of power plant being conscacted at the

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Allens Creek site. Third, the site has been extensively reviewed frcm an environmental standpoint and there are no

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inherent difficulties with siting a plant at that location.

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Fourth, the site is ideally located for purposes of trans-

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portation routes both from the standpoint of railway and

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highway access.

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Q. Does HIAF have a contractual right to construct

,3 its own unit at ti ~TP site?

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A. EIAF does not have a contractual right to con-20 :s cact an individually-owned nuclear unit at the STP site.

l l 21 ' tinder the terns of the S*"? Participation Agreement, no i

22 l:s ingle participant has the right to construct its own 22 individua.' unit at the STP site. The centractual provision l,

24  ; reflects the fact that the STP site was chosen with a view l .

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toward the proximity of the site to the respective major 2

load centers of the STP Participants, those areas being in 3

and around Houston, Austin, San Antonio and Corpuc Christi.

4 This centralized location makes the site hign y desirable l 5 for expansion to accommodate future joint plants, and in

! b contemplation of that value, the STP Participation Agreement l

7 defines the rights of the parties with respect to the loca- ,

i 8 tion of future units. Neither HL&P nor any other Participant 9 has the right to build a third unit at the South Texas 10 Project site except in conjunction with one or more of the l 11 existing Participants and unless the two or more Participants 12 desiring to build the unit own in excess of a 50% interest 13 in Units 1 and 2. If two participants owning in excesa of a l 14 50% interest go forward with plans for a third unit, then 15 each Participant is entitled to participate up to its present l 16 interest in a third unit, and if one or two Participants 17 having less than a 50% interest do not participate, those 13 choosing to join in the construction of the third unit have ,

19 the right to share the portion of the third unit attributable 20 to the interest of any Participant not joining. Units 1 and 21 2 are owned by the Participants in the following undivided 22 shares:

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City of San Antonio, Texas, acting through the City Public Service 3 Board of San Antonio (CPSB) 28.0%

4 Central Power and Light Company (CPL) 25.2%

5 Houston Lighting & Power Company (HL&P) 30.8%

City of Austin. Texas (COA) 16.0%

7 Accordingly, if HL&P proposed to construct a third unit at 8

the South Texas Project site, it could do so only if CPSB or 9

CPL joined, and it would have no assurance that it would be 10 entitled to more than a 30.8% interest in the unit and the 11 power generated thereby.

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Q. How does this contract affect your ability to pro-

^3 ject how much power you could obtain from a third unit at

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STP?

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A. It makes any projection speculative. The deter-16 mination of our percentage entitlement could not be made 1

until we had gone through the process of starting the plan-18 ning of a third unit and soliciting participation. This 19 means we could only plan with assurance on obtaining 370 MW 20 out of a third unit as compared with 1200 MW for the Allens 21 Creek project. Stated differently, EL&P is precluded by the 22 terms of the STP Participation Agreement from ccanstructing a 23 third unit at the STP site with capacity equivalent to ACNGS 24

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and fully committed to RTAp.

Q. Has TexPirg's contention been brought to the 3

attention of the other STP Participants?

4 A. Yes, it has. We thought they should be told about 5 the contention and our position on the contention.

6 Have the other Participants advised EL&P as to Q.

7 whether they agree with HL&P's interpretation of the Partici-3 pation Agreement?

9 A. Yes, we have been advised through the STP Manage-10 ment Committee. The Management Committee representatives of 11 the other Participants have all advised EL&P that they 12 construe the Participation Agreement as preventing HL&P from 13 building an individually owned unit at STP. Moreover, these 14 nmne representatives have advised us that they would not 15 recommend an amendment tc 2he contract to permit us to build 16 our own unit at STP.

17 Q. Turning to subpart (a) of TexPirg's contention, is 13 the cooling lake at STP large enough to accommodate an 19 additional unit at STP?

20 A. The lake would be big enough if we had the water.

21 The size of the lake is not the critical factor. The critical j2 factor is being able to replenish the water that evaporates 23 from the lake in the cooling process.

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1 2 Q. TexPirg has alleged that the size of the STP

, cooling lake is attributable to the fact that it was a

designed for four units. Is that allegation accurate?

4 A. No. The size of the lake was dictated by the water availability in the Colorado River. We had to build O

the lake to its present size in order to store enough run of 7

the river water for reliabic operation of two units. Coin-S cidently, the lake would accommodate four units if we had 9

enough fresh water from upstream reservoirs.

10 Q. Are you saying that additional water supplies

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would be required if a third unit is built at STP?

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A. Yes, I am. As described in Section So,2 of the

^3 FES Supplement, a th.rd unit would increase water consump-T

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tion by about 18,000 acre feet per year. We would have to U

obtain additional water supplies to replenish the reservoir 16 as a result of the additional water consumption that would result with a *-hird unit. We would nave to obtain this

~3 additional water supply from the Colorado River.

19 Are the existing arrangements for water supply at Q.

20 STP adequate for a third unit?

21 A. No. The existing arrangements for the STP cooling i 22 water supply contemplate that a '.02,000 acre-feet per year 23 appropriation from the Colorade River, under Permit No. 3233 24 issued by the Texas Water Rights Commission (TWRC) on February 24, 1976, will be the basic source of supply. An i

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1 evaluation of this supply, based on a 23 year historical i 2 pattern of river flows and allowing for all existing senior -l 3 rights, was used as the basis for both the appropriation and l the STP construction permits. This evaluation reflects that 5 in most years less than 102,000 acre-feet will be available

6 for diversion under Permit No. 3233. In fact, our study i

l 7 shows that under the terms of the permit, the average annual 3 availability is only about 55,000 acre feet.

! 9 Q. What would be the effect of adding a third unit to 10 the lake?

l 11 A. Based on historical river flows, our evaluatic'ns 12 indicate that the water available for diversion under Parmit

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13 No. 3233, when stored in the 7,000 acre reservoir at tbe l 74 South Texas Project site, will provide a dependable supply l

for the operation of two units without annual releases from la_

l upstream reservoirs. These same studies indicate that the l e. .

. consumptive use of another 18,000 acre feet of water each year would not be available; therefore, a fixed amount of g

water each and every year from upstream reservoirs would be g

necessary to provide a dependabla supply for more than two units.

21 Q. Do you have the right to take water from upstream reservoirs every year?

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1 l A. The STP Participants have a contract with the 2

j Lower Colorado River Authority (LCRA), owner and operator of 3 upstream reservoirs on the Colorado River above Austin, 4 Texas, to provide water from the LCRA reservoirs "necessary 5 for the normal operation and maintenance of the integrity of 6

l [ Units 1 and 2]". This contract does not call for specific 7 amounts of water from the LCRA renarvoirs each year as would 3 be necessary if a third unit were located at STP. By contrast, 9 there is an ample supply of water from the existing storage 10 on the Brazos River and Brazos River water has been committed 11 to EL&P by contract for one or more units at the Allens 12 Creek site.

13 Q. Are you able to predict whether there may be 14 additional water available in the future from the Colorado 1

l 15 River or from the LCRA reservoirs?

16 A. No. The subject of water availability on the r

l 17 Colorado River has been greatly complicated by two presently 13 pending legal proceedings. As a result of my involvement in 19 obtaining water supplies for HL&P's power plants I have 20 followed this litigation because of its potential impact on 21 water availability in the Colorado. Until there is a final t

l 22 decision in those proceedings, there is not any way to 1

23 accurately assess whether there is an adequate water supply 34 for additional units at the STP site.

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Q. Would you describe the two proceedings?

2 A. The first proceeding Aavolves the adjudication of 3 water rights in the Colorado River under the Texas Water 4 Rights Adjudication Act (Section 11.301, et seq., of the l

5 Texas Water Code). The outcome of this proceeding could 6 result in an increase in the water available under Permit 7 No. 3233; however, there has been no final determination on l

! 8 this question by the Texas Water Commission (TWC), the 9 adjudicatory arm of the Texas Department of Water Resources 10 (TDWR). Any such determination is subject to an appeal to

11 the courts, and in light of the importance of this pro-12 ceeding to the numerous water users on the Colorado River 13 there is a reasonable expectation of one or more such appeals.

14 The second proceeding involves an application for Stacy 15 Reservoir, a proposed reservoir on the upper reaches of the 16 Colorado River with planned capacity of about 550,000 acre-feet 17 of water. This application was granted by the TWC. The 13 LCRA protested this new reservoir before the TWC, asserting 19 that the new reservoir would significantly decrease the 20 yield of the LCRA's reservoirs near Austin, Texas. If LCRA 21 is correct, there is a serious question as to whether we 22 could obtain additional water from LCRA reservoirs. LCRA, 23 the City of Austin, which relies on the Colorado River for 24 its municipal water supply, and others have appealed the TWC 1

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decision. The matter is now pending before an intermediate 2

appellate court of the State of Texas. In short, absent -'

3 final resolution of either or both of these legal proceedings, 4

which cannot be reasonably anticipated within the time frame 5

required for a decision on HL&P's proposed Allens Creek Unit 6 1, it is not possible to make an accurate assessment as to 7

whether there is additional water available for a third unit 3 at the South Texas Project site.

9 Q. Is salt water a feasible coolant for a third unit .

10 at STP?

11 A. Theoretically we could use salt water for cooling 12 a third unit, but it would be very costly since we would 13 have to build intake and discharge pipes all the way to the 14 coast. We would not use the existing lake for storage and 15 cooling since STP Units 1 and 2 have been designed for i

16 freshwater cooling. We would have to build either a new 17 cooling lake or a cooling tower depending on which proves to la be the best choice for the site. If you had to go the route 19 of salt water cooling then you are essentially comparing 20 Allens Creek with a virgin coastal site, because the largest 21 environmental impact associated with the construction of a 22 large power plant is its condenser cooling system. Since a 23 new system would be required to accommodate a third unit l 24 I'

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1 cooled by salt water, we are in essence dealing with a new 2 ~.~,&P site. As shown in Mr. Schoenberger's testincny, . has 3

cc= pared the Allens Creek site with coastal sites very near S~P and Allens Creek cones cut quite favorably in such a 5 cenparison.
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I 1 either site is essentially the same. Although the corridors 2 for the Allens Creek lines would be the wider of the two, -

-3 the area of impact would be about the same for both lines.

4 Q. Is there any difference in impacts in present land l 5 use?

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6 A. No. Both projects are al=ost exclusively in rural 7 areas. Since we continue to allow farming and ranching on g our rural power line easements, the present use of the land g will continue under the lines associated with either site.

19 The only areas taken out of production would be the area at

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the base of the towe s. Since the lines would be virtually 12 the same length the number of towers should be about the 13 same. Thus, from a land use standpoint the impacts are

, . indistinguishable from one line to the other.

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,3 Q. Mr. McCuistion, would there be any cost or delay inv lved in noving ACNGS Unit 1 to the S'"? site, if you 6

,. assume that it could be done?

at A. Yes. There would be significant costs and delays.

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,, Q. Please describe the delay problems.

A. First, vou must take into consideration the fact 20 l

that HI.&P has obtained or applied for nearly r_ll of the 42 perm'its for Allens Creek required by state and federal agencies. The complete status of our permits is described in Chapter 12 of the Allens Creek Environmental Report and

1 Supplement. We have received permits from the Environmental ,

2 Protection Agency, the U. S. Army Corps of Engineers, the .-

3 Texas Water Rights Commission and the Texas Water Quality 4 Board. EL&P has also received a certificate of Convenience i

l 5 and Necessity from the Public Utility Commission for the l

l 6 Allens Creek Nuclear Genarating Station and associated 7 transmission lines. EL&P has had consultations with ap-3 proximately 15 other state agencies. NRC review has pro-9 gressed to an advanced stage. Although one might expect 10 expedited review of an additional unit at the STP site, 11 additional NRC staff, ACRS and ASLB review of some significant 12 duration would be required and clearly the necessary approvals 13 would not be forthccming within the time frame contemplated 14 for approval of the ACNGS. We would have to duplicate 15 much of the permitting effort at other state and federal agencies. It would be difficult, if not impossible, to 16

,, prosecute all of these permits in two years or less.

g Q. Would there be a cost penalty associated with g

moving ACNGS Unit 1 to the STP site?

I l ,0 A. Yes. There would be three types of costs: (1) l invested costs that would be permanently lost; (2) additional engineering and plant costs; and (3) the cost resulting from delay in getting the plant into operation.

Q. What are the invested costs that would be perm-

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l 1 anently lost?

2 A. EL&P has invented millions of dollars in site l 3 studies, detailed engineering, legal fees, etc., virtually

4 all of which would be lost and would have to be duplicated l

5 for location of any additional unit at STP, or anywhere l 6 else. I estimate that these costs would be approximately 7 S45 million.

3 Q. Have you made an evaluation of the increased 9 engineering and plant costs associated with the move?

10 A. Yes. That evaluation is shown on Applicant Exhibit 11 'No. (RMMc 1). As you can see the biggest cost saving 12 is the S40,000,000 which results from elimination of the Allens Creek reservoir. This assumes, of course, that we 13 could get additional fresh water for a third unit at STP.

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One must assume that if we were forced to mov^ ACNGS Unit 1

,, to the STP site the only sure source of cooling water at

_o this time would be salt water. Thus, it is more realistic 37 l to assume that we would have to build a new salt water t

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! cooling lake or a salt water cooling tower, and a water

19 conveyance system from the Gulf to STP. The $25%,000,000 l cost for the conveyance system alone substantially exceeds 21 the S40,000,000 " savings", and therefore the net cost is
22 l really an additional cost penalty rather than a cost savings.

23 Q. What costs are associated with delays?

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A. First, you have to make an estimate of the delay 2 involved. The additional engineering and site studies i 3 required for location of ACNGS Unit 1 at STP would take two 4 years to prepare, at a minimum. At that point the project l

5 would just be at the point in the licensing process that it

6 is now. Under this scenario it is inpossible to get the i

7 project on line by 1989. Each year that the project is 3 delayed beyond 1989 will cost at least $500 million in 9 differential fuel costs alone. (See testimony of Dr. Guy).

10 If one assumes that we have a two year delay (i.e. to 1991) 22 in order to make the transition, the fuel cost differential 12 w uld be at least $1,000,000,000. Escalation would add another $100 million per year, or $200 million for two 13 3 ,,

years.

Q. What would be the total cost associated with 3

moving ACNGS Unit 1 to the STP site?

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3 A. The total cost associated with moving ACNGS to STP

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would be about $1.3 billion, assuming: (1) only a two year r

! delay; and (2) use of fresh water at STP. If we had to use l 19 l salt water for the third unit the cost penalty would be i

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! increased substantially. Moreover, the differential fuel l 21 costs and escalation would continue to escalate for each l 22 additional year of delay beyond two years. In short, there l

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are severe cost penalties associated with moving ACNGS i 24 l l

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to STP.

7 Q. Does that conclude your testimony?

3 A. Yes.

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23 24 If ACNGS Is Moved To STP Site

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Detail of items Costs Saved-a/ Costs Incurred

1. Site improvements (assume 2/3 of AC cost for drainage, roads, grading -c/ -d/

saved) $3,616,000 $1,205,000

2. Circulating water discharge canal ~c/

(not needed at STP) 1,665,000 0

3. Concrete (10-20% more concrete required d/

at STP due to soils) -

7,750,000-15,000,000

4. Redesign and enlarge llVAC system due to changes in chilled water system (in- d/

crease AC cost 10-20%) 2,000,000-4,000,000

5. Larger piping,. hangers and valves required at STP (5-10% cost d/

increase) -

4,600,000-9,200,000

6. Electrical (4 kV transformer for c/

AC not needed at STP) 800,000

7. Redrafting of 200 completed AC drawings -

6,450,000-9,400,000 d/

8. Engineering design (redesign 14 d/

of 78 AC systems) 6,668,000

9. Purchasing (rebid 25 of 242 AC specs) 200,000
10. Additional studies (i.e., geote'chnical hydrological; meterological; seismic; ecological; radiological) 4,050,000 c/

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Item Costs Saved d Costs Incurred W

I. Reservoir $40,000,000-c/ $ 0 A. UllS (construct embankment for e/

STP-type UllS) -

3,000,000 1 II. Construction d/

l A. Direct (Items 1-6) 6,081,000 15,555,000-29,405,000 B. Indirect (management and 16,488,000- d/

3 supervision) 30,588,000 d/ 12,201,000-22,635,000 Engineering and Services (Items 7-10)

$/

1 III. -

17,368,000-20,318,000

< b/ E/

IV. Material Replacement 6,500,000 S/

V. Land taxes 1973-1980 476,000 g/

200,000,000 c/

VI. Escalation for Two Years g/ ff VII. Differential fuel costs for two years 1,000,000,000 62,569,'000-76,669,000 1,255,100,000-1,282,334,000 Therefore the not cost of leaving ACNGS and

moving to STP falls in the range of

y

$1,178,431,000-$1,219,765,000

.I a/ Costs were obtained from latest AC cost

. f/ From IIL&P Corporate Planning Dept.

! estimate and PMO judgment.

g/ Two years required to return to presen-

] b/ Replacement of equipment (condensor, tubes, state of licensing.

etc.) due to design changes, j c/ Prom latest AC cost estimate.

4 df Prom AC PMO judgment.

e/ Prom latest STP cost estimate.

,

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