ML19350D055
| ML19350D055 | |
| Person / Time | |
|---|---|
| Site: | McGuire, Mcguire  |
| Issue date: | 04/06/1981 |
| From: | Parker W DUKE POWER CO. |
| To: | Harold Denton, Youngblood B Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 8104130205 | |
| Download: ML19350D055 (2) | |
Text
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DUKE POWER COMPANY Powra Buturwo 422 Socin Cuencu Srazer, CzunwTrz, N. C. asa4a WI LLI A64 C. PA R M E R, J R, TCitPm0mE; ARCA 704 ViCE PetSaDENT srca-paeoweno.
April 6, 1981 273-4c a s g [.W,
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Mr. Harold R. Denton, Director g, N
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9 U.S. Nuclear Regulatory Commission
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g Washington, DC 20555 P.-
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Attention:
Mr. B. J. Youngblood, Chief o.*
Licensing Projects Branch No. I sf',,
Subj ect: McGuire Nuclear Station Docket Nos. 50-369 and 50-370
Dear Mr. Denton:
Mr. R. L. Tedesco's letter of March 25, 1981 request'ed that Duke Power provide information regarding the monthly cost incurred by Duke and its customers due to a delay in the full power licensing of McGuire Unit 1.
This information is to be used by the NRC in a monthly report to the U.S. Congress.
As requested by Mr. Tedesco's letter, Duke verbally provided estimates of a re-placement power cost of approximately $6.9 million per month and an additional capital expense of approximately $9.2 million per month. These estimates were provided via telephone on March 27, 1981.
The replacement power costs were calculated using a probabilistic production costing reliability program, titled PROMOD III. This program is currently used by more than thirty utilities across the United States representing over half of the generating capacity in the country. PROMOD III simulates the future operations of a utility generation syctem by giving proper stochastic treatment to the impact of random forced outages in the calculation of production costs, generation system reliability, and marginal energy costs.
Assuming a delay in operation of McGuire Unit i from July 1, 1981 to March 1, 1982, the cost of replacement power was calculated considering the operating costs of the generating units available to supply power in order to match generation output with electric demand in the most economical manner. Numerous operating restrictions such as spinning and fast start reserve requirements and minimum shutdown restrictions are also considered. The potential sources of Nuclear - 25 0 MWe, Coal - 7417 MWe, Oil-8 replacement power are as follows:
Fuel Combustion Turbines - 599 MWe, Hydroelectric - 842 MWe, Pumped Storage -
610 MWe, and purchases from other utilities. The calculated replacement power cost.was approximately $6.9 million per month.
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Mr. Harold R. Denton, Director April 6, 1981 Page Two The increased capital cost associated with a delay in the full power licensing
.of McGuire Unit I represents the additional carrying charges as well as pro-perty taxes and the capitalized cost of maintaining the operating crew at the site. This cost is approximately $9.2 million per month. The NRC assumption that this cost is not a true cost to the company or the rate payers is in-correct. When there is a capital cost increase, the customer must repay not only the cost increase but also an additional amount to allow the utility and its lenders to derive a fair return on their investment. Current studies show that if the capital cost of McGuire Unit 1 increases by $100 million, our customers will have to pay an additional $18.6 r.illion per year for the twenty-five year life of the plant. Furthermore the amount each customer saves per month during the delay period is only a few dollars. These small quantities can not be invested so as to earn a return equal to the future costs he will incur.
Ver truly yours, n-ib. aL William O. Parker, Jr THH:pw i