ML20002C087
| ML20002C087 | |
| Person / Time | |
|---|---|
| Site: | 05000376 |
| Issue date: | 12/31/1980 |
| From: | Axelrad M LOWENSTEIN, NEWMAN, REIS, AXELRAD & TOLL, PUERTO RICO ELECTRIC POWER AUTHORITY |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| NUDOCS 8101090094 | |
| Download: ML20002C087 (22) | |
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~ Wr4 & Sert #8 j- BEFORE THE ATOMIC SAFETY AND LICENSING BOARD 9
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PUERTO RICO ELECTRIC POWER )
AUTHORITY ) Docket No. 50-376
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North Coast Nuclear Plant, )
(Unit 1) )
AUTHORITY'S REPLY TO INTERVENORS' REPLY I. INTRODUCTION On September 11, 1980, the Puerto Rico Electric Power Authority (Authority) notified the Licensing Board of the withdrawal of its application for a construction permit for North Coast Nuclear Plant, Unit 1, and moved for a termina-tion of the above captioned proceeding.-1/Shortly thereafter, Gonzalo Fernos and the Citizens for the Conservation of Natural Resources, Inc. (Intervenors) filed a motion for directed certification with the Commission requesting that 2/
the Authority's application be dismissed with prejudice.-
Both the NRC Staff and the Authority opposed the motion on procedural and substantive grounds.-3/ In an Order dated October 17, 1980, the Commission declined to grant directed certification g
1/ " Motion for Termination of stoceeding" (September 11, 1980).
2/ " Motion for Direct Certification to Request Application Be Dismissed with Prejudice" (Motion) (September 18, 1980).
/f
-3/ "NRC Staff Response to Intevenors' Motion for Directed Certification" (NRC Staff's Response) (October 8, 1980);
" Authority's Response to Motion for Direct Certification" (Authority's Response) (October 3, 1980).
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_2_
and transferred the Intervenors' Motion '.o the Licensing Board.
On November 19, 1980, the Licensing Board authorized the Intervenors to file a submission opposing the NRC Staff's Response and the Authority's Response to the Motion. In response to the Board's Order, the Intervenors filed a submission which stated that the Authority's application should be dismissed with prejudice because the Authority allegedly "deceiv[ed] the Licensing Board, NRC Staff, and Intervenors alike by not coming out straightforward 1y when deciding not to build the nuclear plant, by secretly reversing the expropriations of the land already acquired to site the nuclear plant, by hiding such actions and information from all other parties while continuing to pursue the application for over four years."d/
In an Order dated December 17, 1980, the Licensing Board authorized the NRC Staff and the Authority to file responsive replies by December 31, 1980, to this argument in the In-tervenors' Reply. The Authority hereby submits its reply pursuant to the Board's Order of December 17, 1980.
II. AUTHORITY'S REPLY TO INTERVENORS' ARGUMENT A. Factual Background As a result of economic considerations and reduced energy demand forecasts, the Authority decided to postpone indefinitely the North Coast Nuclear Plant and to " explore the possibility 4/ "Intervenors' Reply to Applicant's and NRC Staff's Conten-tion that North Coast Nuclear Plant's Withdrawn Applica-tion Should Not Be Dismissed With Prejudice" (Intervenors'
' Reply) (December 3, 1980), p. 4.
! -5/
of selling the plant to another utility." Despite the in-definite postponement, the Authority still believed that
" nuclear power is the only commercially viable alternative for power generation in Puerto Rico," and consequently, it desired "to establish the acceptability of the Islote site
-6/
for a nuclear power station." The NRC Staff agreed "that
, 7/
an early site review for Islote is warranted."-
During the next several years, the Authority continued to submit to the NRC Staff the information required for the Staff's review of the environmental and safety aspects of the l
Islote site.-8/ Such information enabled the NRC Staff to issue l
its Draft Environmental Statement related to the suitability of the Islote site in August 1976, the Final Envircnmental Statement in April 1977, and the Site Safety Evaluation Re-port in April 1979.
By Order of May 1, 1978, the Licensing Board directed the Authority to keep the Board and the parties informed of developments in Puerto Rico. Accordingly, status reports submitted by the Authority to the Licensing Board and the parties described the progress of reviews undertaken by the
-5/ Letter from William Miranda Marin to Bernard Rusche (December 3, 1975).
6/ Id.
7/
Letter from Ben C. Rusche to William Miranda Marin (February 23, 1976).
8/ For example, the Authority submitted Amendment 7 to its Environmental Report on October 26, 1976; Amendment 31 to the PSAR (addressing hydrology, geology and seismology) on March 11, 1977; and the " Analysis of Seismicity Detected by the Puerto Rico Seismic Network" on September 26, 1977.
_4 Authority and other agencies, including an energy study for Puerto Rico by the National Academy of Sciences sponsored by the Puerto Rico Energy Office.-9/ As a result of these reviews, the Authority ultimately informed the Board that its next additional plant would be a coal-fired plant, which will meet the Authority's immediate needs, and that " consideration of nuclear capacity is being deferred for at least one year 10/
and, in all likelihood, for a couple of years."- The Authority had previously informed the Board of its termination of the i --11/
l Westinghouse contracts for the North Coast Nuclear Plant. ,
Thus, throughout this period, it was clear that,since the complicated energy situation in Puerto Rico caused the Authority to defer indefinitely a decision as to when it might proceed with a nuclear plant,there was no need at that time for the Authority to acquire or retain any equipment or real property relating to the North Coast Nuclear Plant. How-12_/
ever, as the Authority consistently informed the NRC and others, the establishment of the acceptability of the Islote site remained a goal of the Authority.
l 9/ Status Report as of December 29, 1978.
10/ Status Report as of December 28, 1979, p. 2.
11/ Status Report as of December 29, 1978.
12/ See, e.a., excerpts from Official Memorandum of October 13, 1976 (Puerto Rico Water Resources Authority, 560,000,000 Power Revenue Bonds, Series D); Official Memorandum of September 26, 1978 (Puerto Rico Water Resources Authority, S32,000,000 Electric Revenue Bonds l
(Series 1978), $93,000,000 Power Revenue Bonds, Series E) l (collectively enclosed as Attachment A hereto).
B. The Authority Did Not Deceive the Licensing Board, the NRC Staff or the Intervenors The Intervenors' Accusation that the Authority is guilty 13/
of " hidden, deceitful action"- is totally unsupported and wholly false. It is based solely upon the Authority's determination to cease expropriation proceedings in 1976. As we shall explain below, that determination had no significance to the NRC Regula-tory review, and lack of formal notification thereof could not and did not deceive anyone.
1 Prior to the Authority's decision to postpone the North Coast Nuclear Plant indefinitely, it had commenced expropriation proceedings with respect to the Islote site and it had made cash deposits in court in connection with those proceedings.
After the postponement decision, when the Authority was experiencing a cash flow problem in mid-1976 it decided not to continue the expropriation process "at this time" and to offer 14/
to return expropriated lands to previous owners.-- This decision provided the Authority an opportunity to recover a portion of the moneys which the Authority had placed in escrow in court.
However, for purposes of the NRC regulatory review, the matter of importance was not the precise status of expropria-tion proceedings but whether the Authority possessed the power 13/ Intervenors' Reply, p. 5.
14/
~~
See the attached Certificate (Attachment B) containing a tr'anslation of an excerpt from the minutes of a special meeting of the Authority's Governing Board held on June 28, 1976.
of eminent domain and thus would be able to acquire the site, if and when it proceeded with the project. Documentation of such power of eminent domain was supplied to the NRC by the 15/
Authority. Cessation of the expropriation process in mid-1976 did not affect the availability of the Authority's power of eminent domain, which continued to exist and could again be exercised if and when the project went forward. Thus, neither the initial actual undertaking of expropriation proceedings nor their subsequent cessation were of significance to the 16/
NRC regulatory review, and the Authority did not notify the NRC of either event since such notification would not have served any useful purposes.
If Intervenors' accusation is based on the belief that an applicant must own the proposed site to qualify for an NRC review, they are wholly wrong.
17/
Neither the Commission's regulations- nor the Douglas
--15/ See Sections 196(h) and 204 of the Puerto Rico Water Resources Act, as amended (22 P.R. Laws Ann., SS 196(h),
204 (1964). The entire Act was submitted as Exhibit 1 of the Authority's response to Question 1.2 relating to Chapter 1 of the Environmental Report (Amendment 2 (March, 1975)). Additional relevant condemnation authority is found in 32 P.R. Laws Ann. SS 2901-20 (1968).
- 16/ Although the existence of a potentially insurmountable legal obstacle to total control of the site by the Authority would have been relevant (see, e.g., Southern California Edison Co. (San Onofre Nuclear Generating Station, Units 2 and 3), ALAB-268, 1 NRC 383 (1975)), the Authority's voluntary cessation of expropriation proceedings did not, of course', constitute such an obstacle.
17/ See 10 CFR SS 2.101(a-1), 2.600 to 2.606.
l
} Point--18/ decision require such an acquisition in order to i ,
4 request an early site review. In fact, another licensing i
board has explicitly held that an early site review should not be suspended simply because the applicant does not own the proposed site. New England Power Co. (NEP, Units 1 and 2),
LBP-78-9, 7 NRC 271, 281-83 (1978). Thus it is readily apparent that the status of land ownership is of no signifi-cance to the early site review process.
l If Intervenors are alleging that, regardless of signifi-cance, anyone was misled regarding the status of ownership of the site, they are also mistaken. The Authority never claimed that it owned the Islote site; it consistently informed the NRC that the site included private lands that would have to be acquired by the Authority, which, of course, 19/
, had the power of eminent domain. The NRC Staff obviously understood that the Authority did not own the site, and both 20/
the Site Safety Evaluation Report (SSER) ~~ and the Final 21/
Environmental Statement (FES)- make clear that the Authority would have to acquire the site later. In fact, when an
--18/
Potomac Electric Power Co. (Douglas Point Nuclear Generating Station, Units 1 and 2), ALAB-277, 1 NRC 539 (1975).
19/ See, e.g., Preliminary Safety Analysis Report (as amended through Amendment 31), pp. 1.2-1, 2.1-1, 2.1-2; Environ-mental Report (as amended through Amendment 7), pp. 2.1-1, Q 4-1.
20/ See, e.g., SSER (April 1979) , pp. 1-2, 2-1.
21/ See, e.g., FES (English Language Version) (April 1977),
- p. 2-1.
-g-ambiguity in this respect in the Draft Environmental Statement (DES) was brought to the NRC Staff's attention by the Authority, it revised the statement in the FES to reflect the Authority's 22/
suggestion.-- Thus, no one could have been misled either by the information filed by the Authority or the resulting issuances of the NRC Staff.
Since the Authority's cessation of the expropriation proceedings was not of significance to the NRC regulatory review and did not mislead anyone, there remains only Inter-venors' implication that nevertheless something nefarious took place because the Authority has allegedly " hidden" its actions. This allegation is palpably erroneous. First, the cessation of expropriation was necessarily implemented through motions filed in court (the motions to desist) which were public documents freely available to the Intervenors.
The very fact that the Intervenors included a copy of one such motion in their petition of April 30, 1980, indicates that 23/
the motions were not secret. Moreover, the Authority 22/ At one point, the DES referred to the " applicant's 520-acre Islote site." DES (English Language Version) (August 1976) ,
~~
- p. 1-1. The Authority commented: "Since the Authority does not own the site, we suggest that the word ' proposed;'
be added after ' applicants'." Puerto Rico Water Resources Authority, Comments on Draft Environmental Statement, Islote Site, p. 2, enclosed in letter from Juan A.
Bonnet, Jr., to NRC (October 26, 1976). The NRC Staff adopted the suggestion at p. 1-1 of the FES.
23/ See#" Exhibit 'A'" to " Petition Requesting Evidentiary Hearing to Request Applicant to Show Cause Why Their Application Should Not Be Dismissed for Lack of Inten-tion to Build" (April 30, 1980).
_ _ = _ . - = __-_. . _ - - - - _ _ . - - - - _ - _ - - - - _ _ - - - - - . . _
_9_
i l
l publicly announced its intention to desist from expropriation, i
and that fact was reported in a local newspaper.--24/ Thus, con-25/
- trary to the :llegations of the Intervenors,-- the Authority i
l never attempted to " secretly revers [e] the expropriations l
of the land." (emphasis added).
i III. CONCLUSION l
As demonstrated in both the Authority's Response and the NRC Staff's Response, this proceeding should be terminated j without prejudice unless it is shown that the public interest would be prejudiced by such action.
Intervenors' accusation of the Authority of " hidden,
! deceitful action" are wholly unsubstantiated and lacking in
, merit. No deception has occurred; the Authority informed the NRC that it did not own all of the land comprising the Islote site and that such land would have to be acquired
! through eminent demain. Since, as long as the Authority was legally able to acquire title, actual ownership of the site was irrelevant to NRC regulatory review, there was no reason for the Authority to notify the NRC regarding the cessation of expropriation proceedings. In short, the cessation had no bearing on the licensing process, and lack of notification
- deceived no one.
24/ San Juan Star (June 30, 1976), p. 6, copy enclosed as Attachment C.
25/ Intervenors' Reply, p. 4.
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1 . !
1 Since Intervenors have not provided the slightest basis
! for denial of the application with prejudice and have raised no matters as to which the Board needs to inquire further, on the basis of the pleadings the Board should deny Inter-venors' Motion and should grant the Authority's motion to terminate the proceeding without prejudice.
Respectfully submitted, l
I i Lowenstein, Newman, Reis &
Axelrad 1025 Connecticut Avenue, NW i
Washington, D.C. 20036
- (202-862-8400) i Date
- December 31, 1980 i
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ATTACHMENT A EXCERPTS FROM OFFICIAL MEMORANDUM OF OCTOBER 13, 1976 OFFICIAL MEMORANDUM OF SEPTEMBER 26, 1978
.' under the provisions of the Acts of Congress now inforce, the bonds ofered hereby and the interest thereon are, in the opinion of Bond Counsel, exemptfrom Federal, State, Commonwealth of Puereo Rico and local taxation.
NEW lSSUE Ratings on the Series D Power Revenue Bonds Moody's: A Slai.dard & Poor's: A
$60,000,000 Puerto Rico Water Resources Authority Power Revenue Bonds, Series D Dated Novernber 1,4976 Due July 1, as shown below Pnnapal and semi. annual interest (January I and July 1, first payment July 1,1977 represenung eight months'interesti payable at the corporate trust omce of The Chase Manhattan Bank ( Nauonal Assocauon),in New York. New York, or at The Chase Manhattan Bank (Natmnal Assocauon), in San Juan, Pueno Raco, or at the corporate trust o5ces of Bank of Amenca Nauonal Trust and Savmss Assocat on,in Los Angeles and San Francisco, Cahrenua, at the opuon of the holder. The Senes D Power Revenue Bonds are issuable as coupon bonds in the denominanon of 35,000 or as registered bonds wnhout coupons in denommations of $5,000 or any muluple thereof and are interchangeable as provided in the 1974 Agreement at Ciubank, N.A., New York. New York, trustee.
The Senes D Power Revenue Bonds may be redeemed upon tturty days' nouce, enher (a) in whole on January I,1987 or on any date thereafter from any moneys avadable therefor, or (b) in part,in inserse order of matunty, on January 1,1987 or on any interest payment date thereafter from moneys in the 1974 Sinking Fund. at the following pnces plus accrued interest January 1.1987 to December 31,1989 103 %
January 1,1990 to December 31,1992 102 January 1,1993 to December 31,1995 101 January I.1996 and thereafter 100 except that an amount of the Senes D Poser Revenue Bonds equal to the respecuve amoruzauon requirements wdl be subjc1 to redempuon on July 1,1992 and on July I in each year thereafter at 100% and accrued interest without premium.
The Series D Poner Resenue Bonds are being issued pursuant to a Trust Agreement. dated January 1.1974, with Citibank. N.A., New York, New York. trustee, and, together with $204,402.000 Power Resenue Bonds outstanding as of September 30,1976 and such additional Power Resenue Bonds as may be issued, are pa3able solel 3 from the net resenues of she Authorit3's electric 53 stem deposited to the credit of the Renenal and Replacement Fund us;3er a Truss Indenture dated Januar3 I,1947, as amended, after the required deposits hase been made to the Sinking Fund and the General Reserse Fund for the Authority's Electric Resenue Bonds. 5860,299,000 of which were outst:nding as of September 30.1976. ~
Neither the credit of the Corrmonwealth of Puerto Rico nor that of any of its political subdisitions is pledged for the payment of the bonds of the Authorit3 Serial Bonds Interest Interest Yield Interest Amount Year Rase Yield Amount Year Rate or Price Amount Year Rate Price
$1,400,000 1977 7% 4.00 % $3.000,000 1982 7 % 6.25% 32.000,000 1987 7.40 % 100 %
600.000 1978 7 4.25 3,500,000 1983 7 6.75 2.000.000 1988 7% 100 1,500,000 1979 7 4.50 3,500.000 1984 7 100 2.000.000 1989 7.60 100 1.500.000 1980 7 5.00 4.500/)00 1985 7.20 100 2,000.000 1990 7.70 100 1.500.000 1981 7 5.30 6.000,000 1986 7% 100 2.500,000 1991 7.80 100 Term Bonds
$22,500,000 8%% due July 1,2015-Price 100'"o (Plus accrued interest)
The Series D Power Revenue Bonds are oferedfor delivery when, as and ifissued and delivered to the Underwriters, subject to the approval oflegality by Brown, Wood, Ivey, Mitchell & Petty, New York, New York, Bond Counsel. The ofering of the Series D Power Resenue Bonds is made only by means of the Opicial Statement, copies of which may be obtainedfrom such of the Underwriters as may lawfully ofer the Series D Power Revenue Bonds in thisjurisdiction. It is expectedthat the Series D Power Revenue Bonds willbe deliveredin definitiveform in New York, New York, on or about November 9,1976.
The First Boston Corporation Blyth Eastmas Dillon & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated Incorporated Kidder, Peabody 61 Co. Smith Barney, Harris Upham & Co.
Incorporated Incorporated
- Bache Halsey Stuart Inc.
October 13,1976
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4 postponement of Nucicar project in 1970 the Authority entered into a contract for the construction of a 600,000 LW nuclear generating plant i 4 for installation at Aguirre. In the ficcal year ended June 30,1974, nuc! car plant development at the Aguirre site ;
was dinoniinued when it was determined that the site did not comply with sei>mologicallicensing requirements.
Thereafter, a location near Arecibo, on the north-central coast, was chosen, and the nuclear unit was scheduled to start commercial operation on J.inuary 1,1981.
Because of the reduction in projected energy demand and load growth, the Authority's estimated
! requirements for additional generating capacity required to maintain an adequate margin of reserve capacity
- relatise to system demand have been reduced As a result of this reduction, the Authority has postponed indefinisely construction of the proposed nuclear plant. Licendng procedures for the Arecibo site, however, have continued, with the objective of obtaining site approval to facilitate powihle conttruction of a nuclear plant at a later date. !
The Authority has expended approximately S82,500,000 as of June 30,1976 related to the construction of the nuclear plant of which the Authority charged to expense 512,954,000 in the year ended June 30,1976 and 5989.000 in the year ended June 30,1975, representing unrecoverable cosis without future benefit related to this
- project. In the opinion of the Authority's management and ofits Consulting Engineers, costs as ofJune 30,1976 I of approximately 551,202,000 plus the costs to comp!cte under the existing contract can be realized by the sale of
~
equipment intended for the nucicar plant. The balance of approximately 517,355,000, related to costs incurred In connection with the licensing requirements of the nuclear plar t for the Arecibo site,is included in construction
..ork in progress in the Authority's financial statements. See Note (8) to Financial Statements of the Authority in Appcndix 1.
i ENVIRON 51 ENTAL REQl' IRE 31ENTS The Authority, as well as other electric utilities and industries, has been subject to increasingly stringent standards for environmental quality. The Authority's capital improvement program for the five fiscal years cnding June 30, 1951 includes approxirnately 565,178,000 in capital expenditures to comply with present environmental tegulations of the Commonwealth's Environmental Quality Board (the "EQB") and the Federal Environmental Proicction Agency (the " EPA"). These costs are applicable to present electric generating units
- within the System. EnvironmentaI requirements imposed by the Commonwealth and the United States or proposed for the future may further increase the cost of plants and facilities and may delay their design and construction. Such requirements may also require modifications of and additions to existing facilities with a consequent increase in capital and operating costs.
i 3
O
r ,, ,
1 (8) Other utility properties:
The Authority has expended approsimately S82,500,000 related to a nuclear plant. This amount includes 531,298,000 related to the site construction and licensing and 551,202,000 related to the nuc! car plant equipment. The plant was original!) planned to be located in Aguirre, Pueno Rico. The Aguirre site did not comply with licencing requirements and, consequently, the development of that site was discontinued. The Authority is presently taking the necessary steps to comply with the appropriate licensing requirements at a new site near Arecibo, Pueno Rico.
Of the 531,298.000 of costs incurred in connection with the construction of the nuclear plant and the licensing requirements, the Authority has identified cenain costs which are not of cortinued benefit to the development of the plant at its new site. The Aiuhority charged to expense 512,954,000 in the year ended June j ; 30,1976, and 5989,000 in the year ended June 30, 1975, representing estimated unrecoverable costs without future benefit. The balance of approximately $17,355,000 related to costs incurred in connection with the licensing requirements of the nuclear plant for the Arecibo site is included in construction work in progress in the accompanying financial statements.
In view of a downward revision of projected energy demands and load growth, the Authority decided to discontinue plans to install the originally ordered nuclear plant equipment and to sell cenain other equipment.
' ! It is the opinion of the Authority's management and its Consulting Engineers that the accumulated costs to date of 551,202,000, plus cost to complete under the contract for the nuclear plant equipment, and the cost of other equipment aggregating 516,949,000, all of which have been classified as other utility propenies, are realizable.
In addition, because of the reduction in the construction program, the Authority also charged to expense 56,800,000 for the estimated loss on disposition of cenain excess construction materials and supplies.
The total estimated loss of 519,754,000 on disposition of the nuclear plant and other equipment, including materials and supplies, is not, in the opinion of Bond Counsel, a Current Expense as defined in the Trust Indenture and Trust Agreement and therefore does not criter into the calculation of the contribution in lieu of taxes.
aM L L 1
l 1
linder the provisions of the Acts of Congress now in force, the Bonds ofered hereby and the interest l thereon are, in the opinion of Bond Counsel, exemptfrom Federal, State, Commonwealth of Puerto Rico and I local taxation.
NEW ISSUES )
Puerto Rico Water Resources Authority
$32,000,000 Electric Revenue Bonds (Series 1978)
$93,000,000 Power Revenue Bonds, Series E Dated October 1,1978 Due July 1. as shown below The Electric Revenue Bonds (Series 1978 ) and the Power Revenue Bonds, Series E (collectively, the
" Bonds") will be tssued in the forms, payable at the places and redeemable in the amounts and on the dates desenbed herein.
The Electnc Revenue Bonds (Series 1978) will be issued pursuant to the Trust Indenture dated January 1,1947, as amended, with The Chase Manhattan Bank (National Association), New Yori. New York, successor trustee, and, together with $833,038,000 Electnc Revenue Bonds outstanding as of August 31,1978 and such addiuonal Electnc Revenue Bonds as may be issued, will be payable solely from the net revenues of the Authonty's electric system as determined under the 1947 Indenture.
The Power Revenue Bonds, Series E will e issued pursuant to the Trust Agreement dated January 1, 1974 with Citibank N.A., New York, New York, trustee, and, together with S272,942,000 Power Revenue Bonds outstanding as of August 31,1978 and such additional Power Revenue Bonds as may be issued, will be payable solely from the net revenues of the Authonty's electnc system deposited to the credit of the Renewal and Replacement Fund under the 1947 Indenture after the required deposits have been made to the 1947 Sinking Fund and the General Reserve Fund under the 1947 Indenture.
Neither the credit of Commonwealth of Puerto Rico nor that of any ofitspoliticalsubdivisions is pledged for the payment of the Bonds.
$32,000,000 Electric Revenue Bonds (Series 1978)
Amount Coupon Assount Coupon Amount Coupon Year Rate Pnce (000) Year Rate Price (000) Year Rate Price (000) 5360 1981
- 50%
. 100 % 5485 1990 7.00 % 100% 51.030 1999 7.55 % 100%
370 1982 5.75 100 535 1991 7.10 100 1.080 2000 7.60 100 380 1983 6.00 100 515 1992 7.20 100 1,110 2001 7.65 100 405 1984 6.20 100 580 1993 7.30 100 1,260 2002 7.65 100 423 1985 6 40 100 665 1994 7.35 100 1,210 2003 7.70 100 440 1986 6.55 100 760 1995 7.40 100 1.820 2004 7.70 100 1987 6.70 100 795 1996 7.45 100 2.290 2005 7.75 100 455 515 1988 6.80 100 885 1997 7.50 100 2.495 2006 7.75 100 465 1989 6.90 100 995 1998 7.50 100 9.675 2007 7.75 100 (Plus accrued intarost)
$93,000,000 Power Revenue Bonds, Series E
$24,000,000 7%% due July 1,1998-Price 100%
$20,000,000 7%% due July 1,2003-Price 95.573%
$49,000,000 7M% due July 1,2008-Price 100%
(Plus accrued interest)
The Bonds are oferedfor dehvery when, as and sfissued and delivered to Merrill Lynch, Pierce, Fenner
& Smith incorporated, subject to the approvaloflegality by Brown, Wood, Ivey, Mitchell& Petty, New York, New York, Bond Counsel. The ofenngs of the Bonds are made only by means of this OficialMemorandum.
It is expected that the Bonds willbe delivered in depnitiveform in New York, New York, on or about October 17, 1978.
Merrill Lynch White Weld Capital Markets Group Merrill Lynch, Pierce, Fenner & Smith Incorporated The date of this Official Memorandum is September 26,1978.
9
i Nuclear Project in 1970, the Authority entered into a contract for the construction of a 613,000 kW nuclear generating plant for installation at- Aguirre. In fiscal 1974, nuclear plant development at the Aguirre site was discontinued when it was determined that the site did not comply with revised seismological licensing requirements, and a location near Arecibo was chosen. In December 1975, the Authonty postponed indefinitely the construction of the Arecibo plant although it is continuing its efforts to license that site in ;
order to maintain its option of constructing a nuclear plant in the future.
From August 1970 to June 30, 1978, the Authority incurred $85.8 million in costs related to the I construction of the nuclear plant, of which $33.5 million was invested in its effort to obtain a construction permit from the Nuclear Regulatory Commission for the Arecibo site and $52.3 million was invested in nuclear equipment. As the licensing procedure is continuing, additional minor hcensing costs may be incurred.
It is the policy of the Authority to record the value of the equipment intended for the nuclear plant at it; estimated net realizable value as agreed upon by the Authority and its Consulting Engineers.
Accordingly, the Authonty has wntten down $2.2 million in fiscal 1976 and $28.0 million in fiscal 1978, which reduced the carrying value of the nuclear equipment to $22.1 million as of June 30,1978. See Note
( 7) to Notes to the Financial Statements of the Authority in Appendix I.
l S3stem Capacity and Load Growth The following table indicates system capacity, power generation and sales, peak loads and load factors for the five years ended June 30,1978.
Nameplate kWh kWh Peak iears Ended Rating Generated Sales Load I oad June 30 (kW) (in millions) (in raillions) (LW ) Factor 1974_. 3,028,000 12,329.3 10.376.9 1,823,000 77.2 %
19T 3,518,650 12,208.9 10,197.2 1,808,300 77.1 1976x 4,037,375 12,349.8 10,574.9 1,853,900 75.8 1977_ 4.387,375 13.290.5 11.229.8 I,95 t.300 77.6 1978. 4,199,225 13,684.8 11.697.6 2.017,400 77.4 The Authority projects a peak load of 2,149,400 kW for fiscal 1979, a 6.5% incre'.se over the peak load of 2,0l7.400 kW for fiscal 1978. The peak load estimate for fiscal 1984 is 2,802,800 kW a 38.9%
increase over the peak load for fiscal 1978.
The Authority's installed reserve capacity requirements are determined through statistical reliability
( evaluations which, when considered with the System's self-contained island location and high kad factor,
! indicate that a relatively high installed reserve capacity of 75% of peak load is required. However, because l ofimprovements to the System, the Authority currently estimates the minimum installed reserve capacity, I
when adjusted for maintenance requirements, forced outage of units and additional reserve for uncenainty, to be 65% of peak load. See " Projected Load Growth" below and " Additional Generating Facilities" under Capitalimprovement Program.
The estimated reserve margin for fiscal 1979, based on the estimated peak load of 2,149,400 kW, i s l
l 94%. This high reserve margin does not include approximately 190,000 kW in jet units and the two older Mayaguez gas units. These units have been dropped from the Authonty's list of available generating units due to their poor state of operation.
Projected Load Crowth The Authority estimates that electric energy kWh sales will increase at a compound annual rate of 5.5% over the ten years ending June 30,1988. The Authority is engaged in a program of restoration and improvement to its existing system (see Capital Improvement Program) and expects that this will be sufficient to maintain adequate reserve capacity to provide for units on maintenance, forced outage of units and an additional reserve to accommodate any minor variations in projected demand through June 30, 1984.
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PUERTO RICO WATER RESOURCES AUTHORITY NOTES TO THE FINANCIAL STATEMENTS-(Comeinued)
(6) Pension plan:
The Authority has a pension plan covering all qualified employees, which is administered by the Employees' Retirement System of Pueno Rico Water Resources Authority, an entity created by authonzation of the Authority's Governing Board. The total pension cost for the year was $17,306.000 (including the portion allocated to utility plant) of which approximately S8,958,000 represented prior service costs. Unfunded past service liability as of June 30,1977 (date oflatest actuarial repon), was
$195,339,000 and is being amortized over a 40-year period. The actuarial report states that as of June 30, 1977, the present value of the unfunded vested benefits exceeds the total assets of the plan ($140,267,000 at cost) by $70,698,000.
(7) Other properties:
From 1970 to 1978, the Authority spent approximately 585,795,000 related to a nuclear plant. This amount includes $33,488,000 related to site construction and licensing requirement, The plant was onginally planned to be located on the south coast of Puerto Rico. Licensing of that site, however, became unattainable under the new revised regulations, and a new licensable site was obtained on the north coast of Puerto Rico. The Authority is taking the necessary steps to comply with all the appropnate licensing requirements in order to maintain its option of constructing a nuclear plant in the future. Costs incurred in connection with the licensing requirements, which in the opinion of management are of continued benefit to the development of the nuclear plant at its final site, are included in construction work in progress, and amounted to Sl9,545,000 as of June 30,1978 and $18,751,000 as of June 30,1977. Previously, total costs written ort related to the site construction and licensing requirements amounted to S13,943,000 ($989,000 in the year ended June 30,1975 and $12,954,000 in the year ended June 30,1976).
The Authonty has postponed the decision as to the installation ofits nuclear plant equipment. The final determination will depend on factors such as additional technological changes and licensing requirements. The Authority has followed the conservative policy of reducing the carrying value of the costs incurred to date of S52,307,000, and additional contract commitments to an amount which in the '
opinion of management and its Consulting Engineers is realizable through the sale of the contract.
Accordingly, the wnte down amounted to $28,000,000 during the year ended June 30,1978 and S2.163,000 during the year ended June 30,1976.
In addition, the Authority has identified certain generating units and construction materials and supplies as being available for sale. Accordingly, these items have been reduced to net realizable value by wnte downs of S992,000 during the year ended June 30,1977 and $4,637,000 during the year ended June 30,1976. >
Other properties stated at net realizable value consisted of the following as of June 30:
197s 19n (Dollars in the. sands )
Nuclear plant equipment _ $22,144 S49,073 Generating units 2,700 582 Construction materials and supplies 6,400 6,400 Plant held for future use - 13,036 12,969
$44.280 569,024 I-10
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ATTACHMENT B '
PUERTO RICO ELECTRIC POWER A UTHORITY Sam.luAn. PufMTo Rico e
[ l G1.o. Box os7 CAmi.s Aooatss a I san Juan. Putato Rco oms Papa 5:
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CERTIFICATE I, Rafael Betancourt Pulliza , Secretary of the Governing Board of the Puerto Rico Electric Power Authority, DO HEREBY CERTIFY: that the following is a true and correct translation of the fourth matter of the Minutes of the Special Meeting of the Governing Board held on June 28,1976:
" Fourth matter: Withdrawal of the petition to expropriate parcel of lands in Bo. Islote, Arecibo, Puerto Rico for the installation of a Nuclear Plant.
The Executive Director informed the Governing Board that inasmuch the construction of the Nuclear Plant in Bo.
Islote has been postponed indefinitely, the Authority should not continue at this time with the proceedings for expropriation of lands for such purposes. He stated also that the Authority has a cash flow problem and there is an amount in excess of
$200,000 deposited in the Court of Expropriation and some of the owners has statc' heir intention :d not to withdraw such @.
funds . The Executi irector recommends the Governing Board that he be aut. M to withdraw and request reimburse-ment in all the cases - 9ropriation of lands in Islote; in those cases in which th ...eresdarties have not withdrawn 9, the funds or in those cases in which the funds has been with-drawn the Authority should recover the total amount collected by the owners. After a brief discussion of this matter on motion presented by Member Andres Rosario Bordonada, duly seconded by Member Berta Cabanillas, the Governing Board unanimously agreed to authorize the Executive Director to withdraw in Court all those cases of expropriation of lands for the installation and construction of the Nuclear Plant to be' located in Islote , in those cases in which the funds has been withdrawn. He was authorized also to withdraw all those cases in which funds were totally or partially withdrawn but the owners should reimburse the Authority before the lands be returned to them. "
o PUERTO RICO ELECTRIC POWER A UTHORITY Sam.luan. Putato Rco e#%,,
[ 't3 G.P.O. Box em7 Casa Acomess t S AN JUAN. Putato Rco ozm b I PAtPa gg +
CERTIFICATE Page No. 2 IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Corporate Seal of the Puerto Rico Electric Power Authority this 22nd. day of December,1980.
fael Betancourt Pulliza Secretary SEAL l
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U 6 TIIB SAN JUAN STAR ~ Wednesday,Jun. sq g .
4m A To .
- .b, r eraw Islot.e exorocriat. ion Sur.t . ,\ \
'th? Water 2+soureca Authority is ready to withdraw ex. as 's cancellation of WRA's plans to build a Sucitar power ,on the road to the construction of the nuclear power plant.
propriabon suita si %I filed regarding properties in Barrio plant in 11arrio filote. Most of the equipment has treen sold enabling the age y to t
Isto e of Arecibo where the nuclear power plant was to be "We 'are still evaluating this whole business," Miranda inves,t in other projects the funds thus bberated.
buiF, but the move does not mesa the project has been can. Marin said, "and are awaiting a report from a cortsultants "It may take us a long time before we are finally a to rell d.
firm - Power Techonology - which should enable un to de. decide if to go ahead with the nuclear plant project." &lar da I" *" '' b' "'*dbe' I*' P'* """ ** # "S** *h in Tl e canouncement was made by WHA Esecutive Director type of power plant we udl needing,, " O ** *
- something like this at's the need of having $200.000 tied 6
,dt;am LI :anda atacta Tuciday. Miranda said the WRA is w Islote, he said, is stdl the perfect location for the plant The funda, be said, will be used in other WRA projects eithdraxing the suits because* H needs to free an estunated which, depermling on the study, could be a regular fossil fuel under way.
$100.000 which was deposited in court by the agency to insure plant or a nuclear plant. So far, he added, the nuclear plant elmpelsition to the owners of the propetties involved, is std) favored by the government. Ilowever, he said, the property owners involved are fully Earlier this year the WRA decided to sell equipment it had aware that the WRA will,in the future, file again for exprop-The With originally deposited some $400,000, but some prop- dat n,once the decision is made.
erty tuners in Barrio Islote have collected the amounts they Purchased for the cotistruction of a nuclear plant in Istote.
were entitled to receive as fair payment for their lots and The agency had already Invested same $80 million la such Miranda Marin bad discussed the matter earlier on haday houses. , equipment, but environmental opposition to the project as well Wth Gov. Ilernandes Coloa and Senate Freefdent Juan Cancet Mcwever, Mirands Stressed) action should not be construed as considerations of a technical asture proved to be a block .Rsos.
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of )
)
PUERTO RICO ELECTRIC POWER ) Docket No. 50-376 AUTHORITY )
)
North Coast Nuclear Plant, )
(Unit 1) )
)
CERTIFICATE OF SERVICE I hereby certify that copies of the Authority's Reply to Intervenors' Reply, dated December 31, 1980, was served on the following by deposit in the United States Mail, first class and postage prepaid, this 31st day of December, 1980.
Sheldon J. Wolfe, Esq., Chairman German A. Gonzalez Atomic Safety and Licensing Mission Industrial Board GPO Box 20434 U.S. Nuclear Regulatory Commission Rio Piedras, PR 00925 Washington, D.C. 20555 German A. Gonzalez Dr. Richard F. Cole Suite 501 Atomic Safety and Licensing Board Condominio Le Mans U.S. Nuclear Regulatory Commission Avenida Munoz Rivera 602 Washington, D.C. 20555 Hato Rey, PR 00919 Mr. Gustave A. Linenberger Gonzalo Fernos Atomic Safety and Licensing Board Chairman U.S. Nuclear Regulatory Commission Citizens for the Conservation Washington, D.C. 20555 of Natural Resources, Inc.
503 Barbe Street Henry J. McGurren, Esq. Santruce, PR 00912 Office of the Executive Legal Director Dr. Thomas Morales-Cardona U.S. Nuclear Regulatory Commission Department of Pharmacology Washington, D.C. 20555 School of Medicine University of Puerto Rico Secretary o'f the Commission GPO Box 5067 U.S. Nuclear Regulatory Commission San Juan, PR 00936 Washington, D.C. 20555 (Original and 2 copies) Eng. Francisco Jimenez Box 1317 Attention: Docketing and Mayguez, PR 00708 Service Section
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Atomic Safety and Licensing Appeal Panel U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Maurice Axelrad Lowenstein, Newman, Reis & Axelrad 1025 Connecticut Avenue, N.W.
Washington, D.C. 20036 (202-862-8400)
Attorneys for Puerto Rico Electric Power Authority l
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