ML20003B552
| ML20003B552 | |
| Person / Time | |
|---|---|
| Site: | Three Mile Island  |
| Issue date: | 11/13/1980 |
| From: | PENNSYLVANIA, COMMONWEALTH OF |
| To: | |
| Shared Package | |
| ML20003B456 | List: |
| References | |
| NUDOCS 8102120394 | |
| Download: ML20003B552 (155) | |
Text
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\ 2 ! THE PENNSYLVANIA PUBLIC UTILITY COMMISSION 1
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3l 4I In re: R-80051196-Pennsylvania public Utilitsi Commission, et al. versus Metropolitan Sdison Company Investigatiort 5j into a requested $76.5 million dollar rate increase. 6, C-80072105-Metropolitan Edison Comoany versus j Pennsylvania Public Utility Commission Complaint 7i against temporary base ratos fixed by the Commission in its Order of May 23, 1980 at I-79040308. f O R-80051197-Pennsylvani.1 Public Utility Commission, 9l et al. versus Pennsvivania Electric Company Intestigation into a requested $67.4 million dollar 10 rate increase. 11 ]' C-80072106-pennsy_1vania Electric Company versus I vennsylvania public Utility Commission Complaint l 12 against temporary base rates fixed by the Commission in its Order of May 23,1980 at I-79040308.
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Hearings. < 14 l --ooo-- i
.1 1a i: Harrisburg, Pennsylvania 9
16 ; l November 13, 1980 p 17 ! 4 --oCo-- 18 j
!l 19 'i Pages 348 to 493 .
L 20j l 214 N : 22 l MOHRBACH & MARSHAL, INC. 1 Q 27 North Lockwillow Avenue 23 Harrisburg, Pennsylvania 7s 17112 (_f 241 9M I ! vchtCACH & M ANSHAL. f;tc. - 27 N. LOOKWNLOW AVE. - H ARRI3GURG. PA. 17112 sl oe i co:35)%
< r 348 4
1! Before
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THE PSNNSYLVANIA PUBLIC UTILUY COMMISSION 3f ~~OOo-- 4 j In re: E-80051196-Pennsylvania Public Utilit'y Commission, p et al. versus Metropolitan Edison Company Investiga-5! tion into a requested $76.5 million dollar rate
; increase.
6j
.i C-80072105-Metropolitan 2dison Ccmoany versus
?) Pennsylvania Public Utility . Commission Complaint y against temporary base rates fixed by the Commission in its Order of May 23, 1980 at I-79040308.
3{ 9 R-80051197-Pennsvivania o ublic Utility Commission, 1 I; et al. versus Pennsylvania Ilectric Company 10 'i Investigation into a requested $67.4 million dollar [ rate increase. 11 l j C-80072106-Pennsylvania Electric Compan:r versus 12 d Pennsylvania Public Utility Commission Complaint j against temporary base rates fixed by the Commission ggg in its Order of May 23, 1980 at _-79040308. ({ 13 (. 1 14 J Hearings. i 15 ' --oCo-. j 16: Stenographic report of hearing held in Hearing Room No. 1, North Office 17 ' Building, Harrisburg, Pennsylvania, l - 18 - T hursday , 1 November 13, 1983 1 19 l st 10:10 o'cicek a.m. ! i 20 --o00--
;n JOSEPH P. MATUSCHAK, ADMINISTRATIVE LAW JUDG3 27, - --o0o--
23 4 _ l h ( AN *
\_- E 25 MCi'U AC:4 0 ?! A!!SH AL. IMC
- 27 l'. t.CC:<WILLCb' AVE. - M ARTitSDURG. P A. 17112 -
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3 APPEABANCES: G J V S' STEVEN A. McCLAREN, ESQUIRZ i Deputy Chief Coinsel
, JULIAN S. SUFFII.N, ESQUIRE j Assistant Counsel -
4 ji P. O. Box 3265 d Room 28, North Office Building
#l Harrisburg, Pennsylvania 17120 For - Commission Tria1 Staff 6 .t i
! SAMUEL B. RUSSELL, ESQUIRE 7I W. EDNIN OGDEN, ESQUIRE 3
ERIC L. B. STRAHN, ESQUIRE gl AIAN M. SELTZER, ESQUIRE i q Ryan, Russell & McConaghey
- 330 Penn Square Center
,0 P. 0. Box 699 1 '
Reading, Pennsylvania 19603 For - Metropolitan Edison Company and 11 ' Pennsylvania Electric Company e 12 CRAIG BURGRAFF, ESQUIRE O, ,,ii DAVID BARASCH, ESQUIRE Q *#' ASHLEY SCHANNAEUR, ESQUIRE 1425 Strawberry Square
^* l Harrisburg, Pennsylvania 17120
,,,' For - Offica of Consu=er Advccate
. i
. BERIMRD A. RYAN, JR. , ESQUIRE i
,6]
1 800 North Third Street ;
., ,.. .! Harrisburg, Pennsylvania 17102 !
-'! For - Bethlehem Steel Corporation a i 18 I KENNETH A. WISE, ESQUIRE l wj 213A North Front Street l ^1 Harrisburg, Pennsylvania 17101 l- ,
For - Louise Riley and S.P.A.G.
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,, ROBERT JUDE JENISCU, E.eQUIRE R. D. 1, Box 280-6
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i ij Wellsville, Pennsylvania 17365
** I For - Pro Se 23 ;
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- - *!C H3DACH O *.tA.3SMAL. ;NC. - 27 fl. LCCXWILLO'V AVI. - H A R RI S E L',* G. P A. 171f: -
o y 349-A 3 i i i 1 1 Ar?EARANCES: (Continued) c n
! e:
j ROBERT E. KELIY, ESQUIRE P. O. Box 1003 f 3i ;
] Harrisburg, Pennsylvania 17108 {
4j For - Victaulic Co. of America l 1 1 3 ;) JOHN J. SPEIcanx, ESQUIRE Merkel, Spang & Weidner 6 Pi 0. Box 1256 ' 528 Washington Street 7 .] Reading, Pennsylvania 19603 4 For - American Society of Utility Investors s! 9
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. : 0 : ! ? 3 L C:i & V A?.S h* AL. ': - 27 ?f. L3CKWILLOW AY.- id %M M15 S L P.3. Pt. 171f:
t i 350 a fl 1fi INDEX TO WTDTESSES 4 l O V o ; WITNESS:
~
Direct Cross l j - i SfMarvinRaber 426 431 4ilWalter T. Hood 434 434 1 5 f Robert C. Arnold 359 365 6' 1 7 ;f A 3 u 9 N, INDEX TO EXHIBITS 4 10'4 MET-ED IDENTIFIED l
^, i No. C-33 -
Document entitled Typical Bill y! Comparisons, Penelee and idet-Ed Compared to other Pennsylvania p # ll Utilities . .. ... . . ..... 353 13 j v ,
..; No. C-34 - Document entitled Request for Support
"? of the $9 Application Fee made at an informal conference with Pa PUC Staff 15 on 10/16/80 . . . . ...... 353 1
6 ,d No. C Docu: rent entitled NT 75 . . . . . . 353 x
^7 l! No. C Document entitled NT 70 . ... .. 353 18 No. C Document entitled NT 75 . . . . . . 354 l No. E Document entitled GPU Steckholder l
20 Survey 1930 . ... . . 354 i I No. F Document entitled Agreement of 21 354 Settlement and Compromise . . . .. i
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'3 Document entitled Opinion No. 97 No. F 1
., FEnc ... .. 354 l
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No. G Document entitled Response to i f Prosecutog Staff Tlaluation Intsr-rogatory ilo. 6 354
- 10; 3 3A CH a 7 t AR S H AL. IN C. - 27 N. LO OXWILI CW A VI. - H A F N 3 3 U ".G. ** A- 371f2
< t 350-A 3
I IFDEX TO EERIBITS ! ih
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(Continued) (_ 3)
,1 1ET-ED IDENTIFIED 1
# #s No. G Document entitled Response to .
4 Prosecutory Staff Valuation Inter-rogatory No. 7 . . . . . . . . . 354 54) j No. G Decument entitled Response to Prosecutory 6j Staff Valuation Interrogatory No. 8 . 354 4
?j No. G Document entitled Response to Prosecutory i Staff Valuation Interrogatory No. 9 . 354 4
3
; No. G Document entitled Response to Prosecutory ;
91 Staff Valuation Interrogatory No. 10 . 354 i
}
10 PENELEC 4 11 0 No. I Decument entitled Response to Inter-rogatory No.15 by Abex Corp. , et al. 354 12 1 13y ] No. I Document entitled Response to Inter-rogatory No. 107 of Set Four of g ( j Consumer Advocate Interrogatories . . 354 14 P No. E Document entitled GPU Stockholder 15 ! Survey 1980 . . . . . . . . . 355 16 No. G-1 - Document entitled Rate Base-Original l d Cost and Trended Cos t at Future Test l 17 Year End, March 31, 1981 . . . . 355 18 , No. G-2 - Document entitled Rate Base-Original l Cost and Trended Cost at Historic Test Year End, March 31, 1980 19 j . . . . 355 20 -l No. G-3 - Document entitled Original Cost j Functional Plant and Depreciation 21 '* Reserves at Future Tast Year End, March 31, 1981 . . . . . . . .. 355 22 l No. G-4 - Docuuent entitled Original cost and . i 23 Trended Original Cost Functional Plant i i 2 -; ' and Depreciatica Reserves at Future Test Year End 3/31/S1 . . . . . . .. 355 ' g 25 \ i
'8CUnDAC4 & *1AMSM AL. litC. - 0; ric !.0cgW:LL OW A VE. - H WIS S U *G. P A. 17112 d
( v i 350-B i j: HDEX TO EXHIBITS 1,] (Continued.) O 2 i; gzxztsC 1 Dest 111ED I 3i No . G- 6 - Document entitled Original Cost [ Functional Plant and Depreciation 44 Reaerves Activity for Future Year Ending 3/31/81 . . . . . . . . . 355 aY j No. G-8 - Document entitled Trended Cost-Plant 6' sad Depreciation Reserves Activity Updated from 9/30/79 through 3/31/80. 355
?b, jl No. G-9 -
Document entitled Calculation of 8#' Depreciation Accrua1 on Data at 3/31/81 . . . . . . . . . 355 9;
; No. G Document entitled Calculation of 10 ,', Depreciation Accrual Eliminations on l Data at 3/31/81 . . . . . . . . . 355 11 i No . G Document entitled Original Cost 12 ; '
Functional Plant and Depreciation Reserves at Historical Test Year End [ 13 3/31/80 . . . . . . . . . 355 14 l No. G Document entitled Original Cost and Trended Origina1 Cost Funetional 15! Plant and Depreciation Reserves at I' Historical Test Year End 3/31/80 . . 356 16: q No. G Document entitled Original Cost 17 k Functional Plant and Depreciation ll Reserves Updated With Activity frcm 13 jl 9/30/79 to 3/31/80 . . . . . . 356 l' 19! No. G Document entitled Calculation of Depreciation Accrual on Data at
- 20) 3/31/80 . . . . . . 356 21 No. G Uccument entitled Calculation of
; Depreciation Accrual Eliminations on 22 I1 Data at 3/31/80 . . . . . . 356 23 ;2 Ho. G Document entitled Capital Recovery i p 4 Study Report on Plant Investments at j d 24] 9/30/79 Volume 1 and volume 2 . . . 356 l 1 i
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' UG3/.Cif n .tA t SF AL. IMC. ~ 27 f t.1.CCKWILt.OW .Wtt.
- H ARRISSU 'tG. PA. 17172
t F 351
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1)A THE ADMINISTRATIVE IAW JUDGS : Bofore we get l 2 + started, we have a joint hear.ing tod ay and we'll have a i 3 j number of joint hearings involving both Metropolitan Edison 4 Ccmpany and Penelac. 5)i The question arises as to the nature of the 6: transcript, as to the page numbers. It appears that as of 9 1 7 ] this moment, the page numbers of Penalec are higher than a 8} Met-Ed.
, We will continue paging the joint hearings in il 9Iaccordance with the pcses of Penelec. If they don't coincide 10 with Met-Ed, we will laava those pagas blank so that anyone ,
i 11 I looking at the transcript will be looking at the same page l 4 i 12 ) numbers in either case. Do you Counsel understand? We will ( 13 1 j follow the paging of cenelec. If the page numbers of e M1i Met-Ed do not coincide, for instance, if there is a 5 page f 1 0:jdifference,wewillleavethoseblankandcontinueonwith a 16 4 the same page numbers in both cases so if you have the i 17 transcript, you can refer to either case and it will be the , t l Id 1 same page number. Otherwise, there will be a lot of 1 19 confusion. I Is there!any preliminary matters? l 20 f 21 MR. OGDEN: Your Honor, we have distributed 7.2 scme exhibits this morning. I clarked them for identification l 23 ! at thi.s point in tima? ; Ig Ml THE ADMINISTRATIVE LAW JUDGS: Very well. ! i 25 MR. OGDSN: We have distributed to the q
- t OHRD ACH Q MAR SH AL. 'MC. - 27
. *f. LOOKWILLOW A*/C. " Ht MRISSURG PA. 17t12
)
352 a ! 3 I I ifpartiesandhandedtothereporters3copiasofthefollowing I O 2! .xhibits : c-33 through c-37, s-27, and 1 am sorry, chis is in 3i Met-Ed. , F-23 and F-24, G-22 through G-26, I-28 and I-29. i , 4- In addition, in Met-Ed we have distributed 3 ; to the parties responses to several rate structure and rate l tt t 6j of return interrogatories. We have not had those marked for 7 hthe record at this time. e In the Penelec proceeding we have banded to 9 f the parties and to the reporter copies of Exhibit E-23, I-28, ~ 10 1-29 and the following substitute passs for exhibits in the I 11 ! G series. 12 - I might note that Mr. Garland will be here O 134to=orrowendwi11bePresentingsometestimonyestoche
.i 14 reason for these substitute pages.
15 ) They consist of Exhibit G-1, page 2; G-2, a 1.3 ?page 2; G-3, pages 2 and 3; G-4, page 2; G-6, page 2; G-8, 17 lPs3es 1 and.2; G-9, page 1; c-10, pages 1 and 2; G-12, i 16.lPages2and3;G-13,page2;G-15,page2;G-17,page1; 19 jG-18, pages 1 and 2; G-19, Volutte 1 substituto pages for some .f zo of sections 1, 2A 23 and 20 and Volume 2 of Exhibit G-19, i 21 isome substitute pages for certain sections lA,13, 3C, 33 and 1 22! 43-1 23 ! I j st might note for the reporter's benefit 4 i (G,) 3441 have a typewritten sheet of the various changes and I would ; V J 23 ibe glad to make that available to the reporter or any of the
'4CHR3 ACH & Td ARSH '.L. ;fic. - 27 f., LGCKWILLGW AVE. - MARRISQUf'G. PA. 17112
$53 4
1
.s 1jparties if any desire to have it.
2 Your Honor, in addition for both casas,1 2
; mentioned there were certain responses in the rate of return 4
4jarea. Let me identify what' requests were responded to. 5 lp Responses to the Consumer Advocate rate of return 1 6{' interrogatories which are being made available for inspection Y- and copying today are numbers 41, 43, 49, 52, 53, 54, 55 and 8.
; 36.
ci
', Responses to the Consumer Advocate rate of 10 return interrogatories which were distributed to the active
. i 11 j parties include number 40. 42, 44, 45, 46, 47 48, 50 and 51. j
- n. i I think that concludes the marking of the ,
' 13 exhibits.
14 15 (The following documents were, produced and marked for identification as follows: 16' i 1 (A document entitled Typical bill comparisons) Penelce and Met-Ed. compared to other Pennsylvania Utilities was marked Met-Ed
,8 2
Exhibit C-33 for identification) 19 l (A document entitled request for support of , the $9 appli ation fee made at an informal
'O.
conference with PAPUC Staff on 10/16/80
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i 4 1 uas marked Met-Ed Exhibit C-34 for , identification.) I l 4 22 j (A document entitled NT75 was marked Met-Ed j . Exhibit C-35 for identification.) I . d, :.J (A ' document entitled NT 70 was marked Met-Ed ;g Exhibit C-36 for identification.) W 25 ii f.1 C H R CA OH 2 ? t A R S H A L. I N C. - 2' N. L OCXWl'. LOW AVE. - F# A R R I S B U R G, PA. 17112
-m i
354 d 1 (A document entitled N.T . 75 was marked () ' Met-Ed Exhibit C-37 for identificaticn.) l (A document entitled GPU Stockholder Survey 3.! 1980 was marked Met-Ed Exhibit E-27 for
! identification.) .
4,
! (A document entitled Agreement of Settlement 5[ and Compromise was marked Met-Ed Exhibit 6;
j F-23 for identifiestion.) ( (A document antitled opinion number 97 FERC
? I was marked Met-Ed Exhibit No. F-24 for identification.)
l (A document entitled Response to Prosecutory 9i Staff Valuation Interrogatory No. 6 was marked i Met-Ed Exhibit G-22 for identification.) l 10 ' (A document entitled Response to Prosecutory 11 . Staff Valuation Interrogatory No. 7 was
. marked Met-Ed Exhibit G-23 for identification.)
l 12 l (A document entitled Response to Prosecutory l i 13 Staff Valuation Interrogatory No. 8 was i marked Met-Ed Exhibit G-24 for
.14 identification.)
in (A document entitled Response to Prosecutory Staff Valuation Interrogatory No. 9 was i 16 l marked Met-Ed Exhibit G-25 for identification.) 17 4 f (A document entitle d Response to Prosecutory 18 3 Staff Valuation Interrogatory No. 10 was y marked Met-Ed Exhibit G-26 for 19 7 identifica tion. ) d 20 ji (A document entitled Rasponse to ! Interrogatory No.15 by Abzu Corporation, 1 21s et al. was markad Penelec Exhibit I-28 for l W identification.) 22f
- (A document entitled Response to l 23- Interrogatory No. 107 of Set Four of the i :; Consumer Advocate Interrogatories was ,
' p(_)s 24i marked Penelec Exhibit.1-29 for 1 i identification.) - 25 :!
'i
?/C;{R3 ACH ts "AftiM AL. INC. - 27 N. LCOtWILLOW AVE. - HAHtt$auM 3, PA. 17312
355 ,
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d t (A document entitled GPU Stockholder Survey 2l . 1980 was marked Penelec Exhibit E-23 for 2 identification.) g 3)* (A doccment entitled Rate Base-Original Cost and Trended Cost at Future Test Year 2nd, 4 3 March 31, 1981 was marked Penelec Exhibit
! G-1 for identification.)
5$ j (A document entitled Rate Base-Original. Cost 6k and Trended Cost at Historic Test Year End, i March 31, 1980 was marked Penelec Exhibit l
?1 G-2 for identification.)
3d (A documcat entitled Original Cost Functional s Plant and Depreciation Reserves at Future 9i Test Year End, March 31, 1981 was marked
$ Penclec Exhibit G-3 for identification.)
10 }p (A document entitled Original Cost and 11 j Trended Original Cost Functional Plant and j Depreciation Reserve 8 at Future Test Year 12 1 End 3/31/81 was marked Penelec Exhibit G-4 j for identification.) 13 ::
.j (A document entitled Original Cost 7unctional Md plant and Depreciation Reserves Activity for Future Year Ending 3/31/81 was marked 15 ]! ?snelec Exhibit G-6 for identification.)
i 16 , (A document entitled Trended Cost-Plant and j Depreciation Reserves Activity Updated from 17 . 9/30/79 through 3/31/80 was marked Penolec g Exhibit G-8 for identification.) 18 6' l (A document entitled Calculation of 19 Depreciation, Accrual on Data at 3/31/81 I
) was marked Penelec Exhibit G-9 for l 2C f identification.)
)
22 j (A document entitled Calculation of 3 Depreciation Accrual: Eliminations on Data i l 22l at 3/31/81 was marked Penelec Exhibit G-10 l
$ for identifidation.) -
23 1 (A document entitled Original Cost Functional c 2+ i Plant and Depreciation Reserves at Historicdig V E Test Year End 3/31/80 was marked Penelee jW Uk 7xhibit G-12 far identification.) ! l1 F2CM81B ACM te .' \ F159 AL. tNC. " 27 N. LSCKWILLO'./ AVE. " H A R R f S 3 0
- G. P A. 17112
356 1 (A document entitled Original Cost and /'T Tranded Original Cost Functional Plant and V~ 2{s Depreciation Reserves at Historical Test 1 Year End 3/31/30 was marked Penelec Exhibit 3l G-13 for identification.) l 4' (A document entitled Original Cost Functional
. Plant and Depreciation Reserves Updated 3f With Activity from 9/30/79 to 3/31/80 was marked Penelec Exhibit G-15 for identifica-O
; tion.)
7 (A document entitled Calculation of Depreciation Accrual on Data at 3/31/80 was 8{ marked Penclec Exhibit G-17 for identifica-j tion. ) (A document entitled Calculation of M , Depreciation Accrual Eliminations on Data
., at 3/31/80 was marked Penelec Exhibit G-18 11 ' for identification.)
(A document entitled Capital Recovery Study . 12 ( O 4 *** '" " ' """ '""***=""'" "' '7 i
'- (j volume 1 and volum.e 2 was marked G-19 for identification.)
14 j . 33 THE ADMINISTRATIVE LAW JUDGE: Is there any 16 jother preliminsry matters? l 17 MR. SPEICHER: My nace is John Speicher. I s 18' am with Merkel, Spang and Weidner in Raading, Pennsylvania 19 i and ree represent the American Society of Utility Industrials. 20 g Our client is a non-profit corporation whose members at this 7.; time exceed 3300 people, all of whom are coczon stock share- l 2 This morning I have filed a petition to 22 ] holders in GPU. a 23 j intarvene in these matters and have also filed three formel O u ! co=Pl aines, tuo =oma'.einee 1 re ascinet cae v= etic utstier : n l Ccamission and one is against Metropolitan 3disen, all decling
.4CHAEACM ft !.1 % R S HAL. IN C. - 27 N. lac 4W'LLOW AV'." - 14 A;t ttIS SUR G. PA. f?112
357 F i 1 lwith the ma' ters ptesently before Your Honor. 2 It is our clients' position that through h 3 these three complaints and the petition to intervene we 4$wouldliketoformallyinterveneinthepresentmatters. Wo 1 5 j wculd be willing, of' course, to accept the record of all 6]a these hearings as they presently exist and ask that Your Honor 7 bonsider these ma,<.ters at your earliest possible time.
.I
'3 THE ADMINISTRATIVE LAW JUDG3: You want to 9 ; intersene in both cases?
i 10 l MR. SPEICER: Yes, we do. 1
'll I THE ADMINISTRATIVE LAW JUDG3: Any objectionst?
12 , MR. BARASCH: I would like to review this 4 ( 13 l complaint and petition for intervention before we state h 14 wher.her we have an objection or not. 15 MR. McCIARIN: I will join in that. 10 j THE ADMINISTRATIVE LAW JUDG3: We will defer 1 E7 ruling on your petition for the time being, Mr. Speicher. 18 )) MR. UISE: Your Honor, will copies of the 19 petition to intervane ba made available to active parties? i 20 THE ADMINISTRATIVE LAW JUDG3: I believe 21 Mr. Speicher indicated he had soms. l i 22 MR. SPEICHER: I hava scme svailable copies I s
-,1 ## j of the petition. .I can also bring core tomorrow morning if j
l
/ 24 4 the parties would liite.
J I could get a head count. I could lh i 2i- have all available copics to=orrow morning. I MOMRSACH Es MA~t SHAL. IPic. - 27 N. LSCKWfbLOW AVC.- H A RRIS SL'nG, PA. 171f2 =
358 i ii TIE ADMINISTRATIVE IAW JUDCI: Vcry well. i h %f , There is another petition to intervene by the ! 3[Hammermill Paper ' Company which is a customer of Penelec. They 4l wish to intervone in the Penelec case. - i 5 Any objections to the peticion of Hammermill 6I Paper Company to intervene? 7 , MR. SUFFIAN: No objection. 8 j THE ADMINISTRATIVE IAU JUDG3: The petition 9; indicates that Hacunermill ? aper Company is a customer of - 9 10 Penelec which purchases large amounts of power. 11 h .14R. BARASCH: We would have no objection ti 12,jbased on that allegati.od. 13 TIE ADMINISTRATIV3 LAW JUDGI: Very well. 14 [The petition of Hammermill Paper Company to intervene is 15 } granted. i 16 MR. BARASCH: At whataver point we are 17 finished with preliminary matters, before we see the first 18 , witness, I would like to request a two minute recess before 19 i we get to that point. 20 THE ADMINISTRATIVE LAW JUDG3: Are there any 1 21- other preliminary matters? Let's talm a short recess. 22' (Whereupon, a short recess was taken.) 23 O 24 I w 25I
- l :.ICHAS ACH ca MARSHAL. IMC. ~ 27 fl. LCSXWILLOW A VC. " HARRISGtJf1G. PA. 17112
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- ; ROBERT C. ARNOLQ, called as I witness en i 1 .
I ;, banall of the Respondents, havink been dul; ewcrn acccrding 9 3 f to law, was em:nined and tescified as follows : { 4 - 5l DIRECT EXAMINATION 1 6 ? BY fft. STRAHN: d e l 7 ;! Q Please state your full name for the record. il S A My name is Robert C. Arnold. t 9 Q What is your business address?
'a 10 jj A 100 Interpace Parkway, Parsippany, New y,3 Jersey.
;t
's 12 ] Q By whom are you employed and in what 1
13 L capacity ? O
.le:, l A I am employed by the GPU Service Corporation 13 [ and I am in charge of all of the nuclear activities of the 16 Genaral Public Utilities System, and in that capacity I am 17 c an officer of the GFU Service Corporation, Vice-President, l
i 1 and I am also a Senior Vice-President of Metropolitan 18 j l 19 0 Edison Ccmpany and Jersey Central Power and Light Company. I currently am located full time at Three 20(
!i 21; Mile Island and provide direct management and overall l 22 Supervision of all activitics related to Ta' ree Mile Island.
?
23 1 Q Mr. Arnold, what is the purpose for your n 3, . i.j appearing today? L*. A I Gm here to respond to questions and sub-
. ChRE/.CN & li A*t JMAt. :N C. ~ 17 N. t.CCKV/Lt.3 #/ AYE. - H A R.TG OU R S. P A.
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Arnold-direct 360 gl questions of the Public Advocate, specifically Nblic Advocate h 2' Interrogstory Question 9 and three subquestions to that, i 3 Questions 9A, 9B and 9C. i 4' MR STRAHN: I would note for the record that 5j Mr. Arnold is referring to Consumer Advocate Interrogatory t 6' No. 9 in the Met-Ed case and Consumer Advocate Interrogatory No. 8 in the Penelec case, Phm first sets of interrogatories 7l 6i from the Consumer Advocate in those respective cases. i 9 BY MR. STRAHN: 10 Q Mr. Arnold, referring to the interrogatory, 11 the first part of it begins : Provide the most recent estimata i 12 for the return of Df1-1 to service including an identification of the various regulatory steps required to return the unit O 13 ! p, to service and the anticipated schedule for the completion i 15 t of these steps. 16,! Can you give us a response to that, please? 17 :i A Yes, sir. The schedule for return of TMI-l
;g to service will be determined by the schedule of the Atomic to Safety and Licensing Board, normally referrad as the ASLB, 20 ] hearings and the resultant Nuclear Regulatory Commission 21 ecisions .
Our most likely estimate for return of full 22 23 i Power service is the fourth quarter of 1981. 1 O uiI This assumcs that the restart of TMI-1 will _5 -l be authorized before the end of the third quarter followed
,, i 3
4 m m = u m . m . m =. - - i.. c m u ., m . _ m ,. _ . . ,,,,,
. o Arncid-direct 361 g...._ -
1 l by two to three months of start-up testing and ascension to j (' , full power. 3l The NRC preceedings can be grouped into threel 3 4 general steps . - 5j Step one is an initial prehearing, discovery I 6jandwrittentestimonyphase. . I Step tuc; is the conduct of the hearings them-7$ , 3 selves and the issuance by the ASLB of a recommended decision. Step three is a forma 1 NRC reviN of the 9 )! .I In J ASLB's recc= mended decision and an crder authorizing restart, J 11 j In the Nuclear Regulatory Commission's
.i 12 li August 9,1979 order,180 days were tentatively allocated 13 for s tep one, 155 daye for step two, and 35 days were assumed h 1,4 for step three.
I 15 '; . This schedule would have meant the start of s 16 the ASLB hearings in February 1980, two months of hearings 17 followed by a recommended ASLB decision in July 1980, and a l IS " Commission order by September 1980. k l 19 : The actual start of hearings cccurred on 1 2 3 .. tober 15, 1980 and there appears to be no possibility that a tne hearings will be completed in less than five or six i
. ,2 m nths from that date.
3 Q Thank you. .Now I direct your attention to l
~u. ,.
sub-Paragraph A of the interrogatory where it states : lh
?.5 For each regulatory step indicate the I
'~
*?OMn2M A a ttMSM AL. INC. - 27 '. L OO KWILL O V/ AVE." NA*.;33yRG PA 17110
. . Arnold-direct 362
., j responsible regulatory body, the steps required to be
^i l 4
7(- j ccmpleted before each body uill coeplete its approval for (/ 3 3 j the return to service, and the relevant jurisdiction of each
. body over return to service and operation of TMI-1.
?'
_; Can you give us a response to that, please? os A Yes , sir. For all the regulatory steps the 6 v NRC retains primary jurisdiction. For one hearing issue the 7 3 Federal Emergency Management Agency also retains a regulatory 9 approval jurisdiction over state and local emergency plans. These_ steps required' to be completed by the 10 I
! NRC are identified in the answer to Question ~95 -
11 l The Federal Energy Management Agency must 12 ( 13 , e mplete its review and approval of state and local emergency (_#) I t plans prior to the restart of TMI-1. 14 g h Q Sub-Paragraph B asks that ycu provide the 15 1 t-
! assumptions made in determining the anticipated schedule 161 for completion of each of the regulatory steps required prior 7[
i to the return of TMI-l to service. 18 .. 1 Could you give us those major assumptions, 19 f please?
' 0l.,
s
,1 A There are five major assumptions underlying al ;l 4
the anticipated return to service schedule. I 22 ;j : l
- s i i The first one is that the ASLB hearing tig 33 E 1
1 uill not exceed six months. () ,, j The second is that the Nuclear Regulato., i ) wa
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Arnold-direct 363
!l
- 1. i Commission will prcmptly decide whether the issue of ,
2 , psychological dis tress is to be considered in the restart i 3 hearing, and , if so, that hearings on the issue can be f A.i acccmmcdated within the six months hearing time. 5, Third, that D11-1 plant modifications required 6l Prior to restart will not differ significantly from the short-7[ term items identified in the Commission's August 9,1979 s order and that TMI-l will not be required to meet longer c , term requirements prior to restart, which at the time of 1 10 restart have not been required for other operating nuclear
't g2 i; power plants .
13 Fourth, that by the time of the ASLE recommenced ( 13 ' decision n1I-l will have completed all actions required by o I 34, that decision to be completed prior to restart, that the 13, Director of Nuclear Reactor Regulation will promptly certify 16; such completion to the Commission, and tha t in accordance i 17 jl with Section 6 of the Commission's August 9,1979 order t 13 3 Commission will within 35 days lift the suspens ion of TMI-l's
?
19 ' operating authority currently in effect. 20'3 Fifth is tha t the Commission will modify 31 ~il its August 9,1979 order so as to permit prior to restart 22 f authorization the conduct of hot functional testing of plant
]
;3 i systems with heat generated solely from the reactor coolant
.,g pumps and with the reactor remaining fully shut down and non-g critical.
! MOMR BJ OH & M ATt 3HAL. INC. ~ 27 ?!. b 3OKWILL OW AVE.
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*
- 364 Arnold-diract 1; A request for modificacion af the August 9, r
] 2f 1979 order is being prepared by Met-Ed.
3 Q I direct your attention to sub-Paragraph C I
,t of the interrogatory where it asks whether or not the company i
5! anticipates that there uill be appeals from a possible NRC 6f decision to the Federal Court system and indicate what I time has been allowed for such appeals in the TMI-1 return i 7 r 3! schedule. Can you respond to that, please? 9-Io ; A Yes, sir, the question of whether appeals from a possible NRC decision will be made to the Federal 11 l 12 , Court system is highly specuLstive as is the question whether Q the courts might stay the NRC decision pending determination : 13 14 ( of the 5ppeal. . . u ,, .
~
15 : We would hope and anticipate'~that the ASLB . . _ . . hearing would provide a clear concise record which will lead 16l 17 to a favorable orde.- for restart. 13 .l While we have no factual knowledge of appeals 19 that may be filed, it is our understanding that one intervenor, j l l 3g) rhe . Union of Concerned Scientists, has indicated a potential n: appeal to the courts en the issue of post-accident hydrogen 22: c ntrol within containment. 23 We cannot verify whether this or other i appeals will in fcet be filed. No time has been allcwed f Oj 'y 4 i 35 for delay due to such appeals in the TMI-1 restart schedule. I GNn3ACM a :tARSH AL, t::C. - 27 10 LO*.:tWILLCW AVE. " HARRISSURG. PA. *7182
.. ,... _,. _ _ _ _ _ . . __ _ _ . _ . , _ . . . . _ , _ - . . , , _ . , - ~ , , _ , . .
Arnold-direc t ,365 ,
'i i
- ! 12. ST2AHH: Thank you. That is all we have ,
1 b 2 l of the witness, Your Henor.
!e yi THE ADMINISTRATIVE LAU JUDGE: Does the 4 i Ccasission otaff have any cross-examination?'
5 MR. SUFFIAN: Yes, we do, Your Honor. 6 i 7f CROSS-EXAMINATION 8[ BY MR, SUFFIAN: 9: Q Mr. Arnold, I would ask you to pardon me if 10 i I cover some of the things you have just stated a few moments 11 ago. We have not had time to review tha t. We just heard i 12 j tha t now. i 13 3 A Yes , sir. I believe you stated that you expect TMI-l 14 f Q , l 15 ("e to be in service in the fourth quarter of 1981 and that it 4 16 Q util be authorized to restart in the third quarter, is that ! 17 i! correct? s 18 l A I don't believe that in my response I used l d 19 i the terminology of in service and I think some discussion i 20 f tha t would be necessary to identify which of the dates 21 i should be called in service. 2 1 What I testified to is that we would anticipalte 62 ]j i i uthorization to resume operation of the unit in the third ! 23 l + ! _ I cuarter, and if that is done, we would expect to be through
- Mi {g g the start-up testing program that will be necessary to the i !
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, , Arnold-cross 366
}
y; point of return to full power operation during the fourth h ! n , quarter. ; O e 3 #*7"*
- 7 "# Y" 3
4 f this authorization in the third quarter and start-up in the i 3j fourth quarter will depend upon the hearings before the ASLB and the decision of the NRC and when it takes place? . 6{ t
,, A Yes.'
3 Q How certain is the schedule that you have 9j! sat forth for the different activities before the ASLB and f g; the NRC that they will aonere to the time limit set forth Il i thar you testified to?
.,lg A
g/ A T don't think that I can quantify that d s. certainty . In a qualitative sense I have described it as 13 O - a most likely estimate, and if I might stand on that some-14 : 5 g f what, the estimated time for the duration of the hearings
,, provided with the August 9,1979 order was 60 days.
o. g As we have gone through the prehearing g processes it seems clear to us that it will not be completa gg, in 60 days and our best estimate' right now of how long they 4, vill take, given the contentions that have been admitted g !! ol j into the hearings, is six months. In terms of the balance of the schedule for 1
., j the hearing process, that is, the post-hearing development i wg
'l
;j of the recommendations of the ASLB, the oppertunities for O', "i
, . .; filing.t by the various parties to the hu rings, and the !
c.; . it W.S. .CM C *1 AR 5 MAL ?MC.
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Arnold-cross *357 ' y--- - I I
, j subnission of a recommended decision to the NRC by the ASLB l 4 :
(' , snould not, in my judgment be significantly longer because g
!i the hearing was longer.
't I
I think that the tima allowed of approximately 4 90 days for that in the August 9,1979 order is still an a' 1 6, appropriate assumption for the current schedule estimate. j, O. Then you are saying that even with these
*P 3 dnewdevelopmentsyouexpectstart-uptobeinthefourth a
pl quarter of 1981, that these won't change your estimate that t i you have testified to? 79 g A No, I think my testimony is that I expect j 12 3 start-up to occur in the third quarter -- ( 13 Q I thought that was authorization in the g third quarter? 14 it A And we would anticipate that we would be 13 16; at the point to go immediately into, or within a matter of
.1 17 h a very few weeks, perhaps two or three weeks , to go into the a
18 [ start-up of the reactor once we have received authorization. i 19 j Q Now have you testif ed that you expect 20 return to full power of THI-l in 'ne fourth quarter of 1981? l 21 A Yes. u i Q In the fourth quarter of 1981? l 22 ;4 I
, ., i A Yes, sir.
u.
,,j Q Uill that also include return to commercial A w3 :W I
g sarvice in the fourth quarter of 1981? ,
! wwuen a emsm. me. - 2 x. ocewc.uw m. - mms .o. n. 27,,2
- . Arnold-cross 368 i
4 i 3 j A I think commercial service is an accounting '
~h !
,, [; distinc:Lon not an operational distinc tion. As far as I '
J "i' ; 3 j know, from an accounting standpoint the unit is still in service even though it is not recognized in rate base for 4 ti 5' rates set by the Pennsylvania and the New Jersey Coremissions. i 6 So I don't know,' frankly, how to answer that question from an accounting standpoint. We would be producing 7 g h power and delivering that power to our custcmers about the end of the third qu'arter, beginning of the fourth quarter of 9 10 1981 with our present schedule, and we would have escalated I gl through the power ascension testing we anticipate by the and 12 j f the fourth quarter. ' 23 - '"*" "'" ' " **"* '""" '"* '**""" ' '" ' O power uould be equated with being capable of serving the y ;l commercial customers fully?
.g j ;
16, A No, I would not make that distinction. I
. ,,, ]. guess from an operational standpoint I would expect that 13 l cace the unit is synchronized with the grid and starting to 19 generate energy, that as we have handled units returning 39, from long outages in the past, that effectively coranences l' return to operation.
"y ;i i Q Let me see if I understand your answer. I 22 i
,,., am not quite suce. When the unit returns fully to service,
,,[ ct full pcuer. will the unit be able to fully serve the i Q a:i l needs of ccm:nercial custcmers ? i u.).
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Arnold-croso 359 e, 1 A I hope I don't appear to be difficult, but. i 2 j when ycu put in the qualifiers to fully sarve the needs of O a
., l customers I am just not sure.
1 4g When we come back on line, witile there is a i 3 ) power escalation period in which we do testing, that is not 6 different than the process that we go through with other units, 3 7 j both fossil and nuclear, although the scope of the program 3 6.] varies, and we do restrict the scheduling of the operation
] -
9 of the unit during that start-up testing in terrs of its 10 , dispatching from the system operators, so that in the sense 111 of having it available unrestricted for the dispatching of 9 1 12.f its operation or service to our customers, that would occur 13 ij with the completion of the testing and that completion would O 1.t. 3j not be achieved until we had gone to full power. i 15 ii' Q So when you do go to full power then you , l 16 will be able to meet the needs of the commercial customers ! d i 17( with Unit l? I k i is j A Unit 1 uill be able to make its full 0 19 contribution to meeting thoce needs. 20i Q Mr. Arnold, are you saying that the energy
.1 l 21 from TMI-l will be available to the dispatcher for coc=ercial 22 purposes when TMI-l is restarted and when it is at full powerf 23 l A I think as I wculd understand the cuestion, I
24 j the 1:ay in which the energy from the unit is handled frc: an h l i 2c ] accounting standpoint, that energy is available to the !
*!C H'.S A::M L MAR $ WAL. INC. - 27 N. LDCICWILt.OW AVI. " H A M .t 3 E U R 2. P A. 17112
. -M
Arnold-cross 370
, : dispatchers for commercial application, that is, acrvice to 11 L
cur customers, as soon as tha unit is synchronized with the
~
grid and prior to going to full power. 3 :
.! There is really no other place to put the 4i Power but into the grid and supply the customers with it.
5 6 Q Mr. Arnold, how long is the tasting stsge 7
,! for TMI-l?
A We anticipate the s tart-up testing program 8l 9 will take two to four months. 10 ,! O. And when wnl tMt comence? g A In the third quarter under the schedule that 12 i we have and subject to the assumptions that I have identified y' - in my testimony. O G Q So you are stating that t i.e test energy 14 f q e es q stage um be aW Wy meet ecmercia 1 15i lo,:: needs and you will ba ' .. power during the testing stage, i 17 j during that tvo to three-month period which starts in the third quarter? yg A No, sir, I am not. I am saying that during gg p
' **' Perhaps four-month period in which uo are 20 doing the start-up testing we will be operating at less than I
full power until' toward the end of that period. The energy 22: i l that is developed from the time we synchronize the generato:: t with the grid on up through the time that the generator is
~i b, i ,
(V g fj loaded at the caximum capability of the unit as a whole, is l A : 4- INC.
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?tCHitO ACH a MARSMAt 17133 r-
Arnold-c ross ,371 , l
, beins delivered ince the grid.
('- y Q And that is in the fourth quarter that that "I
.; would take place?
'i i A It will, we believe, occur partially in the 4
third quarter and partially in the fourth quarter, with the 6] full power output being at the latter part of that period in L ek the fourth quarter. 1 a Q How is the test energy treated? Is it 9 I capitalized? Is it expensed during the fourth quarter? A I think Mr. Huff is probably going to be the 10 3[onetorespondtothat. i 12 ' Q How do you e:cpect the station to operate once it reaches full power? ( 13 i g. 14 ! A Ue expect it to be a base loaded unit and 15 t be operating at the full capability of the unit on an hour - 16 t -hour basis, with the exception of forced or scheduled l 17 \ shutdowns. 4 13 ;! The dispatching cost element for the unit 19 is such that it is one of the least incremental cost units h 20; available for the grid, consequently it invariably operates k to the maximum extent that it ir currently capable of doing. 21j
,,[ Q What do you expect the espacity-factor to be 23 dudng the inithi weeks of operation?
~y]
6 A Our experience with TMI-l prior to the l 1
~4
__i accic anc is that outside of scheduled shutdown it experienced! 4 :
'5 J NC ma ACM & MA9 3N AL. IMC. - 27 ?l. L3OKV/!LLOV/ AVI. - H A n n t33U Ft G, ,*A. 17112
Arnold-cross 371-A e y abou. an 85, 86 percent capacity factor. h 2I I believe for energy projection considerations { that is about the capacity factor we assume, but I would have to check the records to verify that. 4,1 5 6 (Transcript continues on next page.) I
?! I f
8i 9l-f I 10 'p 11 , f' 12 ; O 13 i i 14 i 15 :h t 16 11 17 ,h i 18 { f .
~ 19 !.
l 20j ( l 21l i 22i j s 23 i 8 O 24i 25 .$i
;I
*10HTICACH (.s f.tARSHM INC. - 27 N.1.3 3Xw%t.OW AVii. = HA RRISSURG, PA. 17112 a
Arnold-cross 372 k if Q And that is during the initial weeks of C 2 operation that will be 85 days, 60 percent capacity factor?
!. A No. Perhaps I misunderstood your question.
2N ' t jThat was for after we had completed the testing program and 5 it was available for di'spatching in accordance with system 6ineeds. During the testing program this capacity factor J. 7 (depends upon the experience during the testing program 8 lobvicusly, but I would expect it would be on the order over 9l the two to four months period of 30 percent to 60 percent. 10 i i, - Q So during that testing period it will be 11 30 percent to 60 per 2nt, you say? 12 A Yes. 3 13 c Q And then after it is fully syncronized and 14 ; your full power output, it will be at the 85 percent to 15 3 86 percent level? 1 lIj 4 A It is fully syncronized upon initial 17 isyncronization, but other than that, I think yoursat'tement ,
]
13 is correct, that after we have completed the test program and i 1 d }h ave released the unit to the dispatchers for dispatching in 1 jaccordance with system neei, I would anticipate that we w>uld 5 2I jadd about 85 percent capacity factor. I am just not sure if 22 that is what we.used as the assumption for energy output in f i 23 [our generation torecasc. . 1 2, Q Wou ld it continue at that 85 percent to h 23 ! 86 percent level during the first full year of operation? !
\! '
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Arnold-crass 373 p I !Wculd that be the average capacity factor during the first F 2 hfull year of operation that you estimate? 3 A Baced upon the experience that we had prior 4 I to unit one's shutdown for refueling before the accident, 3! that was our experience. During the period of' scheduled 6 f operations. I would expect that that period would be more . 7 i like 10 months rather than 12 months before we would be O shutting down for subsequent refueling after completion of i
'~
9 j the , test program. i 10 .q Q How long would that take, the subsequent 11 [ refueling? , 12 f A I think you may find that first refueling 13 fwill need to be somewhat longer than routine.refuelings Qs t 14 because of some of the modifications that we would have to 15 complete during the first refueling. I think that right 16l now, 8 to 10 weeks refueling shutdown is reasonable. That 17f compares with what we would hope to do during the routine 18 shutdown of about six weeks. 19 What modification would take place during Q 40 1i! the refueling? 21 A Lee ce see if I can sort of generalize c n 22! the answer and meet your needs. If not, we can perhaps cok 23 ' at them item by item, but as a result of the various reviews 2' and investigations done relative to the TMI-2 accident, a ' ,e1 '
~~gnumber of corrective actions were identified by the. Nuclear d MQHRBACH a MARSHAL. !!4C. - 27 N. LeCMWILLOW AVE. " HADRISSURG. PA. 17812
-~
l Arnold-cross 374 0 1 Regulatory Comission as being required to improve the icvel 2 { of safety of the operations of nuclear stations. Some of 3 those were identified as short-term items, some were idenfified
- 41) as long-term items.
5 The Nuclear Regulatory Commissions' order of li G August. 9,1979 required us to complete all short-term' items 6 7, prior to restart of the unit and to complete, or excuse me, O to make reasonable progress on the long-term items. The 9: number of long-term items has expanded since the August 9,1979 10 j order and the schedule for the original long-term items and 11,3'
; the items have been codified by the NRC over the last year or so, so that the ones that we would be doing during the first
( 13
, refueling after return to normal operations would be thof.e 9
3 14 li lcng-term items that we were not able to complete prior to i 15 i' the restart of the unit. 16 ' Does that account for the longer shutdown Q 17 for the refueling for the first year? You say 6 to 8 vecks i 10 for the first year you anticipate for shutdown while the t i 19 average is 6 weeks. i 20} A I think I said 8 to 10, but it is anticipaa-21i icg that those modifications will impact on the schedule that 22 I am forecasting somewhat longer than normal shutdown. I do 23 not know of any other work in the way of maintenance, tot jh 2<0 example, that we will have to do during that shutdown that ! I "jwouldtendtoextendusbeyondthe6neekperiod. 4 uoHR 3 ACH & M AR SH AL. It4C .*7 N. L3CMWILLGW AVE. - M ARRISS UR G. PA. 17112
. . Arnold-creas 375 3
1 Do you expect any other reason to cause a Q h 2 shutdown during the first year of operations besides the 3 refueling? 4y A I think the industry's experience, as well as 5Ithat unit experience, is that there are occasional unscheduled 6 { shutdowns to accomplish maintenance or because of malfunction-1 7 ,ing of systems that shut the unit down automatically and 0( which have to be corrected prior to returning the unit to 9 service. That is it is to account for those experiences that 10 I forecast or project in the 85 percent capacity factor during 11 l the period of scheduled operation instead of 100 percent 12 l capacity during that period, so I am in effect forecasting i 13 about 15 percent reduction in unit output from its A
,' f theoretical capability from those types of experiences.
15 ; Q Could you tell me whether the refuelirg 16; will be done annually? 17 A Vell, there may be some variations in that 10 - scheduling. Our prosent plan is to conduct refuelings l 19l basically on an annual basis. 20; Q When did you expect to ask the licensin:; 21 ? board to turn TMI-1 back on or have you already asked then 23 to turn it back on?
'3i l 4' j A The licensing board does not have the O 2^'l authority to turn TMI back on or to give us permission to D start up. In the NRC'a order of August 9, 1979, or aise the N voHRS ACH & M AMSH AL fNC. - 27 N. LOGsCWRLOW AVL - H ARRISBURG. PA. 17111 -
l L
Arnold-cross 376
.i 1 July 2, 1979 order--I don't recall for sure which one nou--
,9 O 2 specifically states that the Cocmission itself would make 3 that decision.
{- . 4! Q To turn it back on? 5f A yes, t 6i Q Or whether it should be turned back on? 7 A Whether or not TMI-l will return to service. 0' Q The NRC makes the decision when it is 9f returned to service and whether or not it returns to service, t 10 'h is that correct? 11 ; A Yes, 12 i Q Okay. Have you requested of the NRC that 13 ! TMI-l be returned to service? 9 A I think the most meaningful answer to that 34f 15 l is yes, and let me explain some of the history in terms of M l background for that answer. j il 17: Shortly after the accident, we notified the 1 18 ! NRC in writing that TMI-1 was currently in cold shutdown 0 191conditic'n and we would not take it out of cold shutdown l M l.uithout ample notification to tha Nuclear Regulatory 3 21 j Cocaission of our plans for doing that. [ 22 ]) In June of 1979 we identified to the l 23 j Nucicar Regulatory Commission those correctiva actions which 4 24 h intended to complete prior to the return of unit 1 to e 23
;; service. Thos e included the items identified by the Co=rission MOHR 3 ACH 3 YAR SH AL. INC. - 27 Pt. Lc ci< WILLOW AVE. - H A A etGGuit G. PA. 17 t t 2 -
, , 377 0 1 2 fat that time as being required for our utility nuclear plant 1 2 and some items that we unilaterally docided that we would 3 complete prior to restart. That letter was in effect announcir g 4,our intention to restart and was in effec't superceded by the 5l July and August orders of the NRC. 6l Prior to the NRC issuing the August 9,1979 7 horder, we called for evidentiary hearings that are in progress 8! that I described. We presentod--I am not sure of the right 9 f[eechnical term--but in effect briefs or petitions to the NR 10 [providing our arguments or opinions or judgements as to why 11 jit was-both unnecessary and inappropriate for evidentiary 4 12lhearingstoberequiredtobecompletedbeforerestart. 13 The Nuclear Regulatory Commission ordered 14[the contrary to those positions on our part and put us on the 15 path we are currently following. We have identified in lattert. 16 !to the Nuclear Regulatory Commission since then the company's 17 Iponcerns still with that process and we are currently in the , i 18 p'orocess of drafting another letter for reviewing the situation c 19 as to whether or not another appeal might not be appropriate 20 [co the Nuclear Regulatory Coanission as to the tearing procesu 21 pnd whether or not that process can be shortened. 3 22 l- Q Am I correct in understanding that a leteer I 23 .,as drafted to the NRC raquesting that TMI be taken out of 1 ' 24 cold storage and permittad to be placed in service after 23[certainconditionsweremet,certainconditionswhichwere 2 aCHRBACH & MARSHAL. mC. ~ :W N L3CKWILLSW AVE. - H ARmSBURG. PA, Im2 J
Arnold-cross .378 . I specified by the NRC, is that correct? Did you just testify I
\
P 2 to that in the beginning of your an uer? g 3 A Yes.
,; , Q Could we have a copy of that letter?
5 A Yes. It has been entered in other proceedinga' 6 ' before this Cocmission, but we would be happy to supply it. 1
?' Q Okay. Am I also correct in understanding, i
G lI think you said prior to the July and August 1979 orders a 9 petition was filed with the NRC requesting that hearings not 10 take place and that TMI be permitted to be placed in service 1 11;because those conditions, which the NRC had dictated, had been 12 mot. Did you also just testify to that? , 13 i A No, I didn't. What I said was that wo a
.T 14 presented positions that argued ior not requiring evidentiary 15l hearings prior to restart.
]
16 J Q Okay. l l A We argued that the options existed for less 17 ld 1G 3 formal proceedings which would not be as time consuming, cnd 1 i 19 ' opticns also existed for evidentiary hearings but not as a k 20 prerequisite to the restart. 31'i Q Was it in a letter to the NRC that you 22 specifically requcated that TMI-l be permitted to be 23 placed back in service because the conditions had been met , u jthat the NRC dictated?
~~j 25j A Wall, in the interest of being precise, the
*!CHMB ACH 4 M AR SH A*.. IN C. - 27 N. t.SCMW;LLoy/ AYC. - HAitRIS BtJRG. PA.
17112 - -
geGEX@-wesa yzn> g f 1l June letter informed them of cur intent to return the unit to { C 2I' scrvice. It presumed we had the authority to do so upon 3' fulfilling all our licensed conditions. Those licensed h 4; conditions, in our opinion, included conformance with the 5 gorders and bulletins issued at that time by the NRC to all g 5
?
6j operating plants, as well as some items that we identified 7 7 ourselves as being important to the safety of operations. 3f Q Okay, so it was in the June 1979 letter to 9' the NRC that you specified or you stated your intene to i return TMI-1 to service having complied with the NRC's 10 l 11 kconditions? d 12 h A Yes. 13 ' Q Have you any letter or correspondance o s 14 Ospecifically requesting of the NRC that TMI-l be placed back 15 I,in service or have you asked them for a date when TMI-l can 16 )jbe placed back in service? 17 ! A I guess as I understand the thrust of your N 18 dquestion, the answer would be no. However, the whole order 19 i process and the hearing process have been the subject of 20 a:any discussions, correspondance between us and the Commission 1 21 and our desire to return the unit to service as soon as we ena( 221 ; consistent with the safety of operations, has manifested it 23' to the Cecmission. 1 24'4 Q When did you actually expegt at any time. to l 25 ; ask the NRC to have the TMI-l returned to service? eiomucs a masm me. - a n. teuwn. cow avr. .umsauna. n. im2 -J
Arnold-cross __ 380 I t Iq A I think that cy answer is still that in my g 2 ! Judgment, ue have a continuous request before the NRC to do I 5 i so and ue are reviewing whether or not there are additional 4 - 4 j arguments that can be advanced for changing the requirecents i 5 lAs! mposed by the NRC prior to restart based upon the expe 6[of everyone over the last 18 months. 1 7] Q Okay, but there has beon no formal request 2 3 qof the NRC that TMI-1 be turned back on? I mean it is the , 9
.,understanding between the parties, but there has been no 10 formal request?
II A And I consider that to be a formal request. 12 5 Q The implicit understanding? g W 13 i A It is.quite explicit in the documentation. 14 Q If it were not for the hearings apparently 15 in progress which you set forth in your testimony earlier, 16 how long would you expect it to take before TMI-l could be l'i ]placed back in service? 13 ) A From where we are right now, with the work j 1 l 19 we have in progress, ubich one has to understand we have the 30 plant to coma extent taken apart as we put into place the l 213 c:odifications, I would estimate that we could have ~the plant I i 22}back on line in about 4 months if the requirements that we 23 lhad to fulfill ucre the same as the requirements that other i ,9 24 ; plants have to fulfill. 4 4> J! MR. SUFFIAN: Thank you, Mr. Arnold. Staff MOHitc ACM & M AR SM AL. tHC. - 27 N. L OCICWtLLMV AVE.- H ARRISBURG, PA. 17114 - d
Arnold-croco 381 l 1 as no further cross-examination. 2 THE ADMINISTRATIVE IAW JUDGE: Consumar 3ihdvocate? 4l MR. BARASCH: Thank you, You'r Honor. 5 Y MR. BARASCH: I 6 Good morning, Mr. Arnold. Q
'7 I A Good morning, sir.
i 8( F Q This may be a little disjointed. I am going 9i to try not to have it disjointed. New in. Phase II of the 0 10 litigation that we were conducting in the earlier part of this d 11 l year that led to the decision in May of 1980, you testified 12 :In that regarding the possibility of TMI-l's restart, didn't F 13 jyou, sir?. O 14 ' A Yes, sir. 151 And to my memory, and correct me if I am Q 16 wrong, in those proceedings you basically testified that 17 lGrU espected the NRC to conclude their deliberations such i 18 f that you would be able to bring the plant back January 1,19El is that correct? 19 lJ l 20$ A Well, the record will speak for.itself on 1
?si i that. The' schedule has been modified through the last year i
22 jfairly substantially. l 23 Q I understand that, but I think at the time , i, 24i we were presenting testimony for that proceedings, you [ O' 25 referred to the beginning of 1981 as your forecast at the d McH.10 A CH & FA AR $ MAL. t?4 C.. - 27 N. L9CKWILLOW AVE. " M A R .915 8 U R G. PA. 17112 -
Arnold-cross' 382 s 1 ) time and even more specifically, as I recall the proceedings, i 2 g and I am not really asking you to tell me what the record 9 1 3 [ says, but tell me what your understanding of the problem was. i. 4 As we move back in time a ye'ar or ten
- 5) months, my memory is that initially the company, through you, I
6 [ was indicating a return towards the end of 1980 and that by i 1 I i 7 ( the time that we got to the and of those procacdings, the a G company was saying, admitting the delays in the hearing 9 f process, that we would expect to return to power generation 10 the middle of 1981, is that basically a correct description 11 { of your testimony? 12 i A Yes, I think that is accurate, t
-~
13 j 4 r Q Now in May of 1980, this Commission removed 4 1d . TMI-l from rate base, correct? 15i A Yes, sir. 16 \ - Q And at that time the plant was not 17l generating any power, is that correct? 18; A Yes, sir. t 19 l Q And to the best of wha't you understand, the L 20 jcommission was of the opinion that based upon the evidence 1 l 21i before them the: the return of that plant was neither 22l imminent in terms of time nor certain in terms of outcome, 23 } is that correct, sir? !
-9 A I don't think I would want to offer a e
25' judgment as to the basis for the commission's decision and McHRCACH O #4 ARSHAL. INC. - 27 M. LOCKWILLOW AVE. - H ARRISBUMG. PA. 17112 -
Arnold-cross 383 1 (what ums contained in ths order. I 2 Q Have you read that order, sir? 3 A Yes, I have. 4 Q Are you familiar with the words or concepts 5 that I just described to you? 6 l4 A It has been six months or so since I read the 7 ordar, but I don't recall anything inconsistent with what you 6 p,are saying. 9[Y Q At the present time TMI-l isn't generating 10 i;any kilowatt hours of electricity, is it? J
- 11) A No, sir.
4 12 Q And under the trial of this case, we can 13 czpect the Commission will be making a decision in this case I4I no later than April of 1981, is that correct, sir? I5
, Under the nine month filing requirement, if a
16fuewentthefulllength,youwouldhavethefinaldecisionin 17; April of 19817 4 2h
- s A Yes, sir. I would hope it would be advanced 19pfrom" that somewhat.
20 h Q But at the very least, you are guaranteed l 21 ycu will get the full amount of your rate relief on the 22 fCommission decision by the end of April,1981? A That is my understanding of the procedural E3 )I. 24 limitations. a
] Q Okay. Now I think you just testified here
') McHRSACH & MARSH AL. INC. - 2,7 ?l. LSCKWILLOW AVE.- HARRISSURG. PA. 17112
Arnold-crose 384 - 1 lthat you expect the company to reach full power generation in , s O 2 the fourth quarter of 1981, is that correct, sir? $ 3 A Yes. 4 4Q Q And is it fair to say, now you are talking in i 5 terms of quarters, and I am talking in terms of months, but G we are really talking about a period that at a minimum would 7 f be six to eight conths after the latest possible data decision 3 could be made in this case. 9 A For a full power operation that is probably 1 10 $ correct. A 11 Q And a couple months earlier for the beginning
)
12 t of the test generation? 13 1 A Yes. 14 ! Q Now, other than the passage of the six some 15 $ odd months that have gone by between the Commission's decisica i 16Iin May and appearance here today, you have no more . deft,iro 3.. 17 f information in the form of an order or a letter or any other t 13 directive from the NRC that you, in fact, are going to be a 19jpermittedtostartthatplant,
! do you?
s l 20h A I don't agrec with that, no. Well, perhzps I! l 21 ' we don't have the examples you give, but I think we have 22 l significantly more information now than we had siz or eight 1 23 { months ago. We have, first of all, the scope of the hearings a j 2 defined. We have the issues identified la those hearings or '$ {' I l 25 1. that will be the subject of those hearings and I think we are ! MCHR BACH & M AM 5 MAL. lHC. - 27 N. f.CCsCWlU.OV/ AVE.- H A R Rt33tJRG. PA. I7112 -
asemwanswee e y I sw in th2 position whero we can stato with e very hi;h degree 2 f confidence that those issues that are currently the subject O 3l1;o pf this hearing, the Atomic Safety and Licensing Board a 4 A! earings, with the exception of financial capability are
;l /
5 within the control of the company to take those actions 6 identified as being necessary to satisfy whatever concerns 7 ccme out of the hearings. O i Q Now can I stop you there for a second? You i 9 mentioned the financial capabilities. Isn't it also true you 10 l have a question mark over psychological stress' area as well? 11 i f A We have a question mark over that as to 12l whether the NRC is going to permit it to be the subject of the / 13 l hearings. O 14 ! 8 Q Well if we assume for tha sake of argument 15 that they made that determination, you would not charactize i 16 psychological stress issues as being one the company has much 17 control over, uould you? 18 ] A I think, as I read the Atomic Safety and l 19 iLicensing Board's recommendation to the Commission and the 3
,0 argument that is presented in that recommendation for 21f admitting psychological stress as an issue in the hearing, my i
221 answer would be yes, because as I read that recommendation, 23 what the ASL3 is saying is that uhile one cannot expect to 24: be able to quantify psychological stress to the extent a O ->
"; judgment could be made that would make yet a "go-no 3o issue,>; l McHRD ACH a M ARSHAL. INC. - 17 N. LOCXWILLO.y AVE. " HARRLSSURG. PA. 17112 l
1 1
Arnold-crose 386 , 3 I
. lthe board could take testi=ony and could make judgments 1 .
as 2 lthoseactions- which could be taken which would reduce the g I 3, lovel of stresa that would constructively address that issue i 4 Jand I think that many of those things would fall to the 5; company to accomplish. There may be some that would fall to i 6 ' the state or fall to the local government or fall to the , 1 7 ;j federal government which obviously wouldn't have any control, Oh but I think the major jeopardy to the process, the major
'l 9kvulnerabilitythatwehavewithregardtopsychological t
10 stress is the possibility of it extending the hearing 11 I schedule, not determining the final outcome, i 12 f Q I don't really want to get into that aspect lo : of it, but just sticking with the question of what concrete g 14 directives, orders, letters do you have from the Cocnission 15 j that could indicate that the outcome of the proceeding is h 16 f any more clear now, I am speaking to outcome not timing, than 17 [ it was back in May of this year. Q 18 r A Well, as I unde: stood your initial question, 19 it had to do with the information that influenced the i 20! judgments on that outcome. s 21 Perhaps we misunderstcod each other. If I Q 22 could take you back, I was trying to ask you inititally what, 23 lI said information, but I guess uhat I meant to say uas what 4 e 24 communications in any substantive fashion have you had from gl oc
'~ ] the tryers of the fact in this case, the people who will make q: '
r.iosnarca a mansart. inc. - 27 w. t3c:cwittow Avt. - wra iissuns. nr. 3 7$ i: l 1
crnol@-cross K7 a I ' this determination, that would giva you reason to bola.en, that C 2j the ultimate outcome is any more certain now in favor of a O 3! favorable decision from the NRC as to restart than it was in 4 fApril of this year when you were also in the inidst of trying to 5!; get the hearing process off the ground? 6 A Well, I think the hearing process, setting up 7l the Board, the assignment to the Board, makes it unrealistic 4 3 to expect the Nuclear Regulatory Commission, regardless of 9, their judgments on it, would be issuing any such document. I 10 i No, we do not have any subsequent documents 11 from the Commission itself that would address what decision 12 they are going to make based upon the the ASLB's record and 13 ! recommendations. O 14 r I might say, though, in terms of having it d. 15 f on a relative basis, relative to six or eight months ago, it d 16 :,was my judgment even then that the outcome on the restart of 5.7 unit one would be in the affirmative because the whole history 18 of the industry is that two or three exceptions which had very 19hspecialcircumstancesassociatedwiththemwasthatthe i. 20 i ccrrections necessary or the additional action necessary ::o I 21)be
?
taken to satisfy the Commission on safety of operatice inre
- 1 27 l capable of being done. Thera is no fatal flaws in the issues 23 that were raised by the NRC's orders that I am aware of wi':h 24, the possible exception of financial capability.
O 25 If I could add parhaps just one additions. i nosasica a un,su.. me. - n n. s.oexwuow avz. - wanntssuno. n. 1 im2
Arnold-cross 388 I l a 1 [ coment to that, while the decision is made by the Comission l 1 p 2 and the Atomic Safey and Licensing Board is required to g 3 . develop the record and make the recomandation, the NRC staff a 4 is required to evaluate the issues raised and' provide 5 : testimony as to the circumstances relative to those issues, 6llthe judgment of the Comission as to whether or not those 7 issues have been ade.quately addressed by the company for the 0, ASL3 bearings. They issue a safety evaluation report and j yet 9 q while they have some open items /in that process, the staff 10 f has issued a safety evaluation report which affirms the d 11 ' progress that the company is making on the items and does not l 12 f identify
+
any issues which they feel would prohibit the ability 13;to restart the unit.
> 0 I
14 l Q Mr. Arnold, earlier this morning I believe i J 15 j you cade a statenant about a series of assumptions that lia 1 16 ] behind the conclusions that you have given us about restart 17 dates and I would like to discuss some of those assumptions 13 ) with you. This is going from my notes which obviously may not 19 be precisely what you said. 20h As I understand it, it is your testimony thct 1 21! one of your basic assumptions in terms of timLng is that the , 1 . : 22: ASLB hearings should not exceed a period of time of five or 23 ) six months, is that correct? i j 24j A I specifically did state that the assumption h 25)iwas, that. the assumption one was that the ASLB Laaring tima
! xe snares a :. Answic. f.NC.
- M N. WCM:U.OW AVE. - HIRat!SSURG. PA. 87112 J 9
i Arnold-cross 389 y l 1,billnotexceedsixmonths. l 2 Q Now they start in mid.0ctober of this year. 3 l Wow I believe that is what' you testified so I am going with 4 lyour assumptions, puilding it up that would mean that you i 3 woul'd expect hearing to come to an end by mid-April of 1981, 1 6 ft3 that correct?
.e '
'7 ,' A Yes, sir.
- f. Q Now then how much time have you allctted to 9 your schedule between the conclusion of the hearings by the 10 tieSLB and the issuance of an ASLB order?
4 11 J A The ASLB wfll not be' issuing an order. The a
. r 12 4ASLB issues a decision or recommendation.
13 j Q Fine. The schedule profrides approximately 14,three months with that same ti=e period which was identified i 15 in the target schedule published by the Nuclear Regulatory i 16 lCommission with their August 9,1979 order, so that would
')
17 i'mean the issue would be framed in such a fashion to be 16 presented to the NRC for ultimate determination by July 15, 19' 19817 1 20 : A Approximately, yes. 31; Q And then if I would remember correctly, you 32 )are assuming a period of abcut 30 days between the time the l 23 ;lNRC has the recommendations of the ASLB in front of it and i i 24 / the issuance of an order, is that correct? 25 2 A I think we allowed actually five weeks, 35 , l l awauca a masm. me. - 27 n. uarmu.ow m. - HARMBURG. M. m t2 a
ht Arnold-cross '390 W 9 1gdays. C 2 Q Now at the present time would you describe 3 i the hearings as being on schedule, that is on the revised i 4Ischedule? ' S* A Yes, sir. The ASLB did not identify the c
- ll1 specific date as far as I can recall for dealing with specific contingents that they scheduled in your initial parts of the 8
hearing. They scheduled the sequence of them basically but I 9 think the progress we are making on those issues is consistent 1 10 tj with the six month time period we have allowed in this 1 11 schedule. 12 Q Wasn't GPU supposed to file some testimony 13 regarding its financial liability in these proceedings? 34' Isn't that one of the matters that the company was supposed 15 to present the evidence on? 1N l A In the Atomic Safety and Licensing Board 1 17 3 proceedings? M Yes, sir. l Q
,9 k A Yes.
?.0 :
Q And easn't' that testimony initially due about
- 21) two weekscago and I will ask the second question, isn't it '
t 22 true to this date that the company has not presented the 23 j testimony on financial liability? l
'l4 j 4
A Mr. Barasch, I think there is some i g il
^d g misunderstanding, to the best of my knowledge, and as confirmadt
'4CPR3 ACH f4 v. A R 3H AL, IN O, - 27 FL t.GCKWi*.1.OW AVE. - If ARRisBURG, PA. 17112 I
. . li n
i by my licanning engineer that is supporting the ASLB hatring C 2 effort, we have not been given a schedule date by the ASLB 3 Ifor submittal of our testimony on fianneial qualifications. 4 4
,4jWehavebeenprovidingtotheNRCstafffairlyfrequently a
,, 5 jfinancial information update on previous information.
i 6 jFinancial qualification issue is on e of the last ones in the 1 7 @ sequence schedule for the hearings and none of the parties,
?
a to my knowledgr , have been asked yet to provide their h 9 l testimony on it. c 10 j (Testimony continuad on next page.) 11 12 l 4 13 )s O .u. ,: 13 s, l 17 -; i' 18 ' 1 19 1 0 3 20j 21 3i 22 y 23 <' b i 24,. # i v $ h (d 25 $, . i d 17112 sowRo A:s a ruasu . inc. - 27 N : scat t cw Av2 - H AR A13 3 UR G. P A. l l
Arnold-cross .391 0 Q In other words, to the best of your knowledge.,
,d i ;
(- vou are not aware of the fact tha t Mr . Graham a nd Mr . Mc fer
~
2 ;j g 9 were supposed to be appearing nnd present evidence on the ai . NRC cuestion of financial viability a week or two ago and 43 that in fact because testimony was not prepared at that time
! that aspect of the proceeding was delayed?
6. 1 A I am very confident that the ASLB did not 7- i g, have those two gentlemen scheduled for witnesses. Q And that they were act e::pected to present 9 I i testimony to the Commission a week or two ago? 10 - j A They were not expected to present testimony 11 i3
- to the Atomic Safety and Licensing Board in any of the
,2 A
,, hearing --
(- llh Q I am not talki.ng about an appearance on the _4 1 ih
?
- .: g s ta nd .
.. I am talking about the submission of exhibits or l
testimony in advance of appearance on the stand. Io,
! A Yes, and that is the way I initially under-1_,< ,
tha t 6 )i stood the question and my answer is the same for that, a 9 !] they had not b'een scheduled by the Atomic Safety and Liceasing
.. Leard to provide their written testimony on those icsues .
3 20! l . Mr. Barasch, I thought maybe I could find 21: I scme inforestion that might help clear up what the misunder _, [ s tanding is . , 1 Q I will pursue it a little further and see
~l lllI
,L where it leads. Was there any other information thst 1ir.
l 20 .;
,l noue. ca s urm_. eie. - 27 n. Loc::witto e, Av . - s *aircauna. *t. :vii2 a
Arnold-cross 392 a I
; Graham and Mr. Hafer, that basically the financial people !
1 ('-
,~~
., i were supposed to be providing to the Commission a week or
~ .
! \ \ two ago that ir fact was never provided due to incbility to 3 perform the work? 4 5r A Again, my understanding is that you are 6 talking about the Board -- That is right. 7! Q gn A Not the Commission. p 9 Q Well, was there anything that was supposed to 10 ; he Provided to the NRC? I am assuming that everything goes
,l [
i to the ASLB before it goes to the NRC and maybe that is an 12 erronecus assumption. t t
. 13 - A That is correct. The Board is the one that
(') k# develops the record and for the hearing issues the informatiou 14 ; u 15 g is provided to the Board. I am not awaro of any information i 16 j requested or submitted by the company to provide on its own 1
.i
-4 :, : initiative to the Commission.
J We are cbligated to provide information and 1G ] j 19 have been providing information to the Commission staff. 1 i Q Is this in the nature of discovery? l 20{ I A I guess it is analogous. -It is not quite 3 , t the same process as discovery proceedings, but we are ; 42ss i l
,2
_: obligated and are interacting with Commission staff to ! an,
; provide them with the financial information tha t let's th.2m ID ;
(_ J ,.. . do their evaluation .?nd develop their testimony on finarcial
- C H3 2 ACN a '1 A3f MM is lC. - 17 "4 1.3 3 4W1L OW AVI. - H A9PiSSU9 G. PA.
??112 - - -
O I i i 1 l capability, I C 2 1 cm not aware of any cocaicments to the . 3 Commission staff which we have failed to fulfill in either Oi 4 timing or content. 5 4 Q Perhaps I am interested in a different i 6! subj ec t. I assume you must have overall responsibility i 7 within GPU for the positioning of the company in the NRC 8 h proceedings -- obviously not as a lawyer -- but as the person i 9: in charge of the presentation of GPU's case. 10 ' A Yes. 11 ! Q Are you aware of any internal dcadlines for i 12 g the filing of drafts of testimony or the like within the
) /' 13 ! company which Mr. Hafer and Mr. Graham have passed deadlines 14 o upon? O 1
4 15 A No, I am not, but I might well not be aware 1 16i if that had happened. 17 l Q I wonder on that last question perhaps you , 1 a l 18 ] don't have the information but maybe your assistant does and 19 l you can consult with him. F l
- 20. THE ADMINISTEATP/E LAW JULGE: Will you be 21( very long, Mr. Barasch?
22j MR. BARASCH: I have got quite a bit more, l d, 23 : Your Honor. 24;i THE AFAINISTRATIVE IAW JUDGE: Let's taEe a i a, 1 ten-cinute recess. ne.<r. . sex e suum, me. - 27 a occwu. ow e. .t - mmsuna. n. irit: lh
. . B ..
1l (Short recess.)
, ) i
( 2 2 ROBERT C. ARNOLD, resumed. 9 O s!W m An'iralSrR^rivs < 1.^w 3urCs: vou =ev a 4 ij proceed with rour increased speaking volume, Mr. Barasch. i h 5( MR. BARASCH: Thank you, Your Honor. 6 BY MR. BARASCH: 7 Q Mr. Arnold, another one of the assumptions 8 h that were set forth by you this morning as -I paraphrase it G 9 from my notes was that the NRC would promptly decide whether 10 i psychological stress was going to be considered as an issue il i. 11 j in the preceedings. Do you recall that, sir? 12 l' A Yes , sir. 1 I
' 13 Q Now maybe you could enlighten c . This is 14 O)
R. ; a matter that was determined by the ASLB and then was 15 i certified to the NRC for a finsi decision as to whether or i 16 ii not the issue should be included? How is this issue before 1 4 17i the flRC today? 13 A In the NRC's August 9 order -- 19 ) Q Mr. Arnold, before you answer the questica, y 20i I see you have a document in front of you. Is tMt dccument i 21- the August 9th order or is that document some other -- 1 a 22 j A The docucent is one which has a copy of 23i the August 9 order and I am reading directly from the August , i ; 24j 9 order.
.s O( 25l t Q Thanks. l
__ *-;OMMAC 1 : ?. TAMS *4 &L. fl40. - 17 !! LOCK'i1LOY! AVI r' 4't f!I5 3 U N G.
- A. 17110
-~-.. .....-. . ~ . _
- r -- c- - - w - '-~r 7 mm.-'e '+-N * & *'r+- pt - - - *t 1
Arnold-cross , 395 , i t
,i A "'4hile rasl and substantial con 7ern attacLes c'~w ,,
^ to issues such as pcychological stres: and others arising from the continuing impact of aspects of the Three Mile Islano bh 2 4,
~la accident unrelated directly to exposure to radiation on the 4s
_ j part of the citizens living near the plant, the Cc= mission 3 il 6 ] has not determined whether such issues can legally be Any party wishing to raise j 7 ,4 relevant to this proceeding. i such subjects as contentions or as aspects of separate c .- . A i
, contentions should brief the Atcaic Energy Act and National l 4 ;
1 0,i Environmental Policy Act issues he believes appropriate to t r i
,, ] the Board as part of the contention acceptance process set 4
, h out in the Commission's regulations . The Board should than {
A ., 9 i t certif'y such issues to the Cczmission for a final decision la_
* * , 'q' prior to the issuance of its prehearing conference order Ih 5
, ) pursuant to 10 CFR 2.752(C), either with or without its 12 :
7 l 16,] recommendation on such issue as it deems appropriate under i ,
. _ ij the circums ta nc es . "
u 4 Q So we have been through the contention 1 8 .4 i r process now, correct? 9 l
< I l
g. A Yes.
) Q And in fact the ASLE did submit that l.
J 3 question up to the NRC for determination? 221 . 4 A Yes. i 23
,,j Q What date was that dene on. sir?
A-l { __; A I don't have the enact date with me: Mr.
'g
.s a .
nenc4:n a vAnsn:.. me. - :t n. te:<w: stew ws. 4uras:us. gr. : m --
6 Arnold-cross e , n ' i i 1 .3' Barasch. My recollection is that was about May or June of i 1 Eq , this year.
%-) (
. ; Q And that recommendation by the ASLB, I think a.
we kind of got to this obliquely a minute ago, was that the 4?
,l
- $, issue in fact should be part of the proceeding, ian't that 6 j correct, sir?
A Yes. 7[ g' Q It did make an affirmative recommendation to the NRC not merely certifying the question up without 9 !
,0j.expre:- ng an opinica?
A A Yes., sir, that is correct. 1,1 12; Q S it was probably May or June, as you say. 1 3 S a peri d of about five or six months has gone by since
/ -~
T \' -l
.. that issue was certified to the Commission for a decision?
an - I _. A To the best of my recollection, yes , sir. 13 1 I
. . ] It has been a significant period of time.
i l
.-i Q Now in view of that significant period of :
=t a ;
i, , 8
* *' ""* * *"* *
- Y*** *E " ** *"0l** *"*E **
J i 2 9 4 that the NRC is going to promptly dispose of that question ! 1 I gg of psychological stress so that it will not impact the hear-i u ing schedule? Si:: months have already gone by and there 3 hasn't been any action, right?
,,. A I don't know that I would agree that there
, i
_. , has been no action. Six months or so have passed since the i (~ns
.z e .
certifiestion 'oy the Board to the NRC of that issue.
' 17112
- ?'G-' A3 ACH 0: f1 AR 3H AL. tMC. - 27 M. LSC'0WLLL3W AVE. - H Wt!SOUN G. CA.
Arnol.1-cross 397 _- We have to make some ase,umptions as to hou
~
( 2 those regu'.atory processes will proceed both as to outcome I and as to timing, and we have identifie d that as a major assumption underlying our schedule, that there will be a 4f
,, decision in the very near future by the NRC on that issue,
-i and if that decision is to admit the issue into contention 6f 7
in the hearings, that such admission will not lead to an 8; extension of the hearings beyond the six-month duration. 9l Q I would like to pursue that particular matter with you a ccuple steps . As an observer of the 10 j 1 g proceedings before the NRC, what conclusions , if any, have I y h you drtwn from the fact that the Commission so far has taken ! I 73 I six mon:hs to determine this issue? Do you have any h w, ;; information at all as to why the process has taken that long? Let me continue, as a kind of a multi-psrt g]i 16 question, have you received any indication that the matter 3 4 bas ever coce up to the Co= mission for determination anc 77 2gl they were unable to reach a decision? Is it that they have 1 19 l not issued any staff reports to the full Commission? Do you 20 have any ides why it is it has taken them six months to take l . a determination on that matter? i I 41 1 l 2, A Other than the information provided to the l 23 Commission by the Atomic Safety and Licensing Board uhich is } i . yl part of the public record we do not get documents that r.sy h a a ; g l; be being utilized by the NRC in their consideration of this. ' MMiR?ACH & LtARSM AL. ::C. - 27 M. LCCKWRLOW AVE. " M A R 4 f S 6 Le st C. PA. 17112 -
Arnold-cross 398 5 3 There has been on the agenda for a closed g meeting of the Commission this subject on three cccasions 4 that we are aware of. As to what the discussions were that 3)I cook place during those meetings, we do not have information. 4j l My own judgment is that the implication of 5l 6 it taking this long to decide is that the most likely outcome i % 7' is that it will be denied. 3 Q But as you justsaid, your speculation as to k 9; the passage of time and what that means as to the ultimate to outcome, is not based on any substantive knowledge at all i i of what is going on in that room, is that correct, sir? _n.- 7 A Yes, that is correct. But, on the other 12 13 ! hand, I think that the Ccamission did indicate in their O i i original order very clearly that they wanted the issues 14 15 presented before the Board addressed in on aggressive and 16 timely : canner. - They identified a schedule that they would 17 h ll 18 !! like the Board to attempt to meet which is much shorter than 19 the actual e::perience. 20[ So I think the Commission's attitude touard 3 21 3 timely resolution of these issues is quite well doc"mented i n! in the public record. 3i ., Q Do you know when the approximately threa , o y 3 cecasions were that the NRC had this matter on their aganda 3 y 35j in a closed-door sessien? ! i n - 'J AR R!3 Stag. p A. f7152 ! M OM110 ACM G *t A8: $F AL. ? NC. - 27 Pf.' L OCC.VIkk SW A'/*
Arnold-cross 399 r
,f A I don't kaow the specific dates. The
~l g C 2 i:
recollection of my staff memoer is that it has been within ; 4l the last two or three months. o ;J 4, Q The NRC at the present time has four l 3 {l commissioners , is that correct, sir? i 6! A Yes. 7 Q And there is a fifth commissioner whose aj appointment had been made by the President of the United a' States and was pending before the Senate before the election, i 10 is that correct? 11 A Yes, sir. 12l Q Now when you described that assumption in ( 13 " terms of a prompt decision, I assume that you are talking i 14 prospectively. You are saying promptly in terms of hopefully
;g 'l soon after today the Commission will make a decision? It is
.i 7
16 il not because you would describe the six-month delay as being d 17l prompt? r 13 A Your presumption is correct. I 19 Q Now at ,what point, looking ahead frcm today, 20,F would an NRC decision no longer be prompt, in your opinion, 31; in terms of what this assumption presumes? 22 A If it is 1 nger than one month from now that i 23 j the decision comes from the NRC and the decision is to Edmit 1 24 that issue into contention, then I think that it would .!g
! i 23.] jeopardize ecmpleting hearings on that issue by mid-April f
- tOliftSACM L MAR SMAL. tN" - 27 N. LOCKWILLP)W AVE. - H ERRIEst'RC. PA.
17112 -'
Arnold-cross 400 l E t Ih f 1981-h 2 Q Thank you very much. I believe you also 3 h indicated that another assumption was that the TMI adjustments i 1 a! retrofits , whatever might be required by the' NRC at the end
*I 3 h of this prccceding, it is your assumption that they will not 6 .
be significantly different frem the items already identified 7 by the NRC in their letter of August 9,1979, is that a afcorrect? That was one of your premises, right? i 9f A The premise applies to the short-term items 10 f as they are termed in the August 9th~ order. 11 Q The ones that would be necessary prior to il 123il restart? p' v 13 ;
\
A Yes, sir. 14 ! Q Is it also implicit in your assumptions that 53 TMI-1 uill not be required to meet any short-term requirement s 3 16 beyond those being expected of other nuclear plants in the 17 United States ? 18 [ A To the best of my knowledge, all of the u 4 19 ll corrections, modifications , upgradings that are identified
;i s
20 ] as shcrt-tsrm items are required of everyone and the full
!I 31 lt scope of them, to the extent that they are applicable tc, a 22 particular facility, is required.
a 23 l Q I understand that, but locking at the qt estioja i 24 the other way around, is it also implicit in your assumi tions 25 f that any requirements placed upon GFU at the end of the NRC f I_ ';C h't 3 AOM f.1.t Aft S H AL. f MO. - 27 N. f.OC.T4 rLLOW A .3. " H A8tRfS3U;ts. PA. 17?f: -
Arnold-cross '401
- f A
i proceedings would not result in further pre-start adjustments.l r u 2 i if ycu will, beyond those being required of every other nuclea* 3' facility in the United States, or should I say every similarlyl 4 engineered nuclear facility in the United Stdces ? 5 A As I understand the question, Mr. Barasch, I 6' think that is the assumption, and I think it is the issue that t 7' I was addressing the second part of my Assumption No. 3 in O I which I stated that TMI-l vill not be required to meet longer 1 . 9 term requirements prior to restart, which at the time of re-10.d start have not been required for other operating nuclear power 11 j plants. il 12 0 Q It was that part of your statement that I was 1 pi g not sure I heard. Mcw you have also . assumed that any short-g 2 4 lil term modifications, changes in your operations that would be 9 a 15 ] required would be completed by the time that the NRC comes 0 16 'i up with a hypothetically favorable decision on restart, is I 17 l; that correct, sir? d' 18 0 A Tha e is eorrec t. The one qualification I 19 xould add to that is that some of the short-term issues have 1 20 over the intervening time been given additional clarificationi 31 lj or additional specificness, which has made the schedule for s 22 ; fulfilling those short-term items longer for everyone. 23 I think tha t all of the short-term items /] 34 ss they are currently understood to be imposed, we anticipate 25j could be complete by the time a decision was mde or a
*:C HitPA C:4 fa M ARGMAL. IN O. - 07 N LOCKWILLOW AVC. = H AR RISSUM 3, PA. 17132 _
. . i i recommendation was made by the Atomic Safety and Licensing j 2 j Board and would be able to be so certified by the Director l 3 of Nuclear Reactor Regulation.
t 4i Q And that no further restrictions or requests 4 5 ] for modifications would come out of or appear as a condition i 6l in a finat NRC order? 7i A Yes. 8; Q That includes , I assume, an assumption tlut - 9! the NRC, when and if it were -to order you tha t you could i 10 j begin to bring the plant back, would not be placing you under 11 h any operating restrictions such as saying, okay, you are 12 i going to be permitted to return TMI-1 to service but that l 13 t for a period of -- this is totally hypothetical -- for a O 14 : period of severet yeere ue don e went you operating chet 15 5 plant beyond 70 percent of its rated capacity, something 16 p like that? 17,i i A That is correct. The only assumption as to a t' opereting restrictions that would even relate to that questio i la ', 19 I think is that, as has been done with plants recently issued-1 20! Operating licenses, the initial authorication to begin i 21, operation has usually had, for example, a 5 percent power 22 ! level limitation pending review of the results of that 23 operation up until that point by the Director of nuclear ,
;_gj Reacter Regulation and his approvat of proceeding beyond i C[ i i
'v 2s ] 5 percent level of operation. !
't i- ?! 3130ACM a "4 A-tG)( AL. tHO. - 07 N. LC CXWILLOW AVI. - H ARM 13 SURG. ? A. 175t2
Arnold-cross 403 , 4 6 I chink we may very well -- in fact I think
,q
{ ; { it is going to be appropriate in terms of concerns in the 3 , communities around Three Mile Island that we have that sort
,9 , of review of the er.perience during the start'-up program by k
3 ! the Nuclear Regulatory Commission, and that we pre-establish i 6, certain power levels and milestones during the restart tests 7 9 at which additional operation would not occur until the NRC e had independently reviewed and agreed that we were ready to i 9, proceed beyond that point. 10 Q And you fully expect that the NRC would y l] probably require some sort of series of triggers, safety 12 triggers along the line? r- 13 j A Not necessarily. It has only been done for a O g l! the 5 percent level previously, to my knowledge, because of i 15 (j a general uncertainty. There have sometimes been occasions 16 where there was a specific issue that. needed to be resolved 1 17 j' before going above some power level that was determined by T 18 j the iscue. 19 ' But the approach that I am describing has 20; not been the practice of the NRC and we are proposing it to 21i them. I 22 ) Q We kind of went through a very complicated i 23I ; cuestion and answer here. I think put simply, you are u: operating under the assumption that at the end of the test-V ~'j h 35; ing program the MRC would basically have given you permissiorj
' l
*iaictr.ACII O. M AM SH AL. IMC. - 27 s '. LOC 4V/ILLOW AVE. - if ARMIOE U RG, P A.
t7112 -
' " ~ ~ ' ' ^
Arnold-crcs8 403-A l f
,! to operate this plant at its full rated capacity and there
-@t
*. ould not be any forward-locking restriction upon the a:nount
,i of generation that you would be permitted to produce at that
, aLa I plant? .
6i,
^ " " ' 18
- rr* '> Mr 3*r"$ch-5f .
6! a (Transcript continues on next page.) 7{ ! i r 9i .I I 10 I i 11 !- f I 12 j
~
l 13 . I w 14' k 13 3 1: 1, 16 j; t 17
-i 18 i 19,
( 20$ t 31i 22i 1
- 23 i
't 1
24
=n ' '
'i !13 M?.31,.OH & MA R SH AL. fif C. *.7 PL L33%WNL OW AVE., - H AR *t iS 3U R G. P A. 17812
l .. . . .... _. . .. ._ _ . - . _ Arnold-cross 404 4 4 1' Q Now you were down for refueling from this i O 2 i, accident and in your opinion, and it is not your idle 4 3j. opinion, based on the reviews of the numerous documents and i. 4 i correspondance 'with the NRC, do you have any reason to believe l 5 (that the NRC ordered TMI-l shutdown because from an engineering i 6 ppoint of 'view that plant was unable to operate or to continue 3
?lcobeshutdown?
63 A Could I have the question read back or 9 rephrased? i 10 Q I will rephrase it. Based upon your i 11 [ conversations with the NRC and communication with the NRC, 12 ! many of which I believe are in this record or previous ( 13 records in this proceeding, do you have any indication or 14 reason to believe that the reason' why TMI-1 was kept in ISI shutdown posit. ion after tha accident was due to concern about 16 g the mechanical or engineering safety of that plant or in the 1 17I alternative is it much more related to the fact that GPU was 18I operating another nuclear facility a couple hundred yards away I I 19 ;that had a very serious nuclear accident? 20 lg A I would like to again quote from the I 21l August 9th order since I think that is the best source for 22 I the information on the issue that you are addressing. 23 ) "As a result of a preliminary review of the II 24 Three Mile Island Unit number 2 accident chronology, tha NRC
.h 25 hstaff initially identified several human errors that had ,
3 nosso Acn a M ARswAL. tric. - 27 N. LeCKW11. LOW AV: . - H AR RIS S U R S. PA. 17112
6&s&E X F a c es e 1 occurred in tha accid:nt and contributed significantly to its p ; b 2l severity; All' holders of operating licenses, except O 3, Metropolitan Edison Company, whose plants were already shut i 4 f down were subsequently instructed to take a number of 5[ immediata actions to avoid repetition of error in accordance 6 f with bulletins issued by the Commission's Office of Inspection 7 and Enforcement. G! In addition, the NRC staff began an i immadiate reevaluation of the designed features of the 9f , I 10 { B & W reactor to determine whether additional safey corrections i 11 I or improvements were necessary with respect to these reactors. I 12 l This evaluation involved numerous meetings with B & W and 13 certain of the effected licensees. c The evaluation identified O i 14 ! design features, as discussed above, which indicated the 15 B & W designed reactors are unusually ~ sensitive to certain 16j off normal transient conditions originating in the secondary 17 system.
,1 18 As a result, an additional bulletin.was (
19 issued by 1.e."--parenthetical 1,7the office of Enforcement 20 and Inspectien- "which instructed holders of operating 21! licences for B & W designed reactors to take further actica J2'f including immediate changes to deeraase the reactor high 23 pressur( trip point and incresso the pressurizer pilot p e 2v .'! operated ralief valve setting." 25f Also, as a result of this evaluation, the
- . tow 15 ACH & t1 ARSH AL. INC. - 27 N. LGCKWrLLOW AVE. - H A 1RTSBURG. PA. 17112
~
Arnold-cr@ss 406 8 a I .!NRC staff identified certain other safey concerns and it goes I. 3 3fontorefertothose. $ 3; Dropping down a little further in the ordce 1 4 ! it says: "In addition to the items identified for other 5i B & W reactors, the unique circumstances at TMI require that 6.9 additional safety concerns identified by the NRC staff be 1 74 resolved prior to restart." 8 f' They then go on to list so=e four items which 9! are generalizations of the specific ones that they then make' 10 the subject of the specific order, so my conclusion is that 11 !it uas core related to the company being the one that had the j U ! accident and that the existance of the damaged plant on the (
.- .?
l# i same site were the reasons for treating us uniquely, that the h 14 technical issues raised by the accident were not sufficient n . 15ftorequiretheunit to remain shutdown. 16 P Q If I could ask C:unsel, is that already an 1: 17 f exhibit in this case? - d 18 } MR. STRAHN: I don't believe it is. We can l ! 9 3 l 19 I aske a copy of it available if you would like to. 20l THE WITNESS: We could ce::tainly provide tho
)
21! reference to its cristence in other cases. , S I 22 MR. BARASCH: Well, if we did that, perhaps l l 23 lwe would incorporate that specific exhibit from the previcus i 24; proceedings, chich I think would be Phase II. I 25 THE ADMINISTRATIVE LAW JT1DGE: If you want it ' il y osa.ica 4. u,as.ixt. iac. r s. t=sxwatow avr - $4Anaiseveo. PA. i7si:
- . Arnold-cross 407
- r. t e i
, f as an erhibit in this case, you better have it and mark it and i
4 2 either the company or you can mark it as an exhibit. I don't 3 vant to be put in a position of having to dig out some other ; 4 leases that I was not involved in. 3 5 ; M10. BARASCH: If you could, provide that as 6: a data request in this proceeding. A 7f BT MR. BARASCH: 8 Mr. Arnold, char.ging the subject a little bit,
.- Q 9 iI gather you are aware of the fact that Penclec and Met-Ed 10 have made filings for 1981 energy cost rate before this 11 commission. Are you aware of those filings, sir?
12 A I am aware of the filings having been made, 13 l but I am not very familiar with the back-up information that (] -
*4 f supports them.
15 )1 Q Did you have any discussions with those 16 lJ persons at GPU, Met-Ed or Penelee that were responsible for a 17 ! making thst filing relative to that filing before it was , is ! made? 19 ' MR. STRAHN: Your Honor, this is getting ,
^
0 loutside of the scope of Mr. Arnold's direct testimony,
' MR. 3ARASCH: I think it isn't and I think we 21la 32 f will get there in about orn more question.
"J ',
THE ADMINISTPaTIVE LAW JUDGE: We will over-4; I h i 24 rule the objection for the time being and see where we are
] ^C S
~(going.
.? SMRS ACM Ta f, TAR SH AL. tNC. - 27 N. L4G!?W%L 9W AVE - H A RRtSOURG. P A. 17112
Arnold-cross
'408 1;l TIE WITNESS: I think the e:: tant of my 2 interaction on that is that my staff was responsible for 3l developing the forecast of energy cutput and timing of that 4 E energy output from Three Mile Island Unit Number 1 which I 5[ would anticipata uas part of the basis for the filing that t
0 :' was made. 9
*! BY MR. BARASCH:
O Q In developing the millage charge that was 1. 9 placed in the file? 10 f A Yes. I i il 'j a Q Do you know what your staff gave to the i I people, I believe it would be Mr. Carter who ultimately made 13 f that decision, as far as a date for the beginning of the 5 h
.14 l generation at TMI?
2 15 < Mr. Arnold, if you don't know the answer, i. 16 " then an answer that you don't know is just fine with c:e. ! 17 :t] A I don't have that data with me. 13 j Q Are you aware of the fact that Metropolitan i 19l Edison and Penclee's ECR filings are premised on the fact 20 l that TMI-l will not be producing any electricity during 1981 31 and that, in fact, the millage rates aosume that TMI-l does . 22' not produce any pouer for Met-Ed or Pencice until 1982? 33 A No, I am not aware of that specific feature l 24 of it,
.i h
5l Q And if that were the case, would you agraa
;40:-:na ACM Cs MAR 5H AL. !?it:. - 27 .*L Lo'agWILLOW AVE. ~ H A R R IS S U P. G. P A. 17112 -
Arnold-cros3 409
)
1; that that is inconsistent with the testimony that you are 2 giving here ac far as what you believe to be the time when 3 ! this plant will begin to produce any power? 4i MR, STRAHN: Well, Your Hono'r, I don't know 5 that is a proper question. I THE ADMINISTRATIVE IAW JUDGE: Yes, that is 6< i 7 I argumentative. You can reach that conclusion. i 8' MR. BARASCH: I could perhaps restate the 9 f question. 10 j THE ADMINISTRATIVE IAW JUDGE: You may restats i 11 j it if you like. i 12I3Y MR. BARASCH: 13 Q You are testifying in the third and fourth 14 f quarter of this year TMI-1 will be producing power, a net 15 ! flow of power out of that plant, aren't you sir? i 16l A Yes. That is the schedule we projected for - 17 test start-up energy to be available during the latter part of 18hthethirdquarterandtheendofthefourthquarter. 19; Q And is it fsir to say that avery kilowatt i 20 hour of electricity that is generated from TMI that flows 21 into your system will reduce the amount of power the company 22l will'have to purchase from elscuhere? 23 .' A I think that is the effect of generatio2 of t I d pt 24 j TxI, yes . Q I would like to turn your sttantion, 23 l 17112 d MOFRS ACH A M ARSH AL. INC. - 27 N. LCCICWILLOW AVill. - H ARi415 0 tJR G. 18 A.
Arnold-croso 4Io
'4 1 j 3Mr. Arnold, to another area of concern regarding TMI-2.
Q -r f What is your understanding at the present c4~ of the present l 3 catimated clean-up and rostoration costs at THI-2? 4 1 MR. STRAHN: Your Honor, this is outside the x8
-[scopo of his direct testimony. I object. ,
THE ADMINISTRATIVE LAW JUDGE: Will you 6f 7[ respond to that objection? 8 MR. BARASCH: Well, I just asked a si::;ple 5 9
, qucation. If Mr. Arnold is not going to be the witness for 10 l the company to testify to matters relating to TMI-2, I would 11ij just like to know who is. I will put tho question to the t
12 ; appropriate witness. I
~3 < '
MR. OGDEN: Your Honor, what is the purpose i 9 1 of getting into TMI 2 in this proceeding anyway? It is 4{ 15 i irrelevant. BY MR. BARASCH: If I could ask, Your Honor, is it the ( II h 12 company's contention that TMI-2 has nothing to do with the J~o' besc rate case in this case? j 70
~
THE ADMINISTRATIVE LAW JUDGE: You can ask
*1d
" .,Counscl.
22 , MR. STRAHN: There is no claim being made ! -,1
] for TMI-2 in rate base.
l
^1 THE ADMINISTRATlTE LAW JUDGE: I think it 4 V j lg E not relevant in the context of thia rate proccading. I don'r n c>m ea cu :. r u n s u -~ me. - a n. ocxv.m.w., .m u w sw ac. n. : n a ._.
Arnold-cross 411 i l l 1)believethecompanyismakinganyclaimforany-- n
! i 2 -
MR. BARASCH: Your Honor, if I could. I I 3( believe there are several issues in this proceeding that 4{ relate to TMI-2. The company is making a ser'ics of 5; assumptions about the capital needs and the needs to go into 6; the. capital market and I assume that the need to address TMI i 7: clean-up costs is going to have something to do with the l 8 company's need for further financing in the near future as t 9 wall as subsequent rate cases we may see coming down the pika. 10 { THE ADMINISTRATIVE LAW JUDGE: Couldn't the 11 ! cost of financing the clean-up of TMI-2 have an affect on the to 13, costs / support that financing in this rate case? i MR. STRAHN: Well, I would think that that 12 f 14 fmight be the case, Your Honor, yes. . , l 15 g THE ADMINISTRATIVE LAW JUDGE: In that event,i M ! we will overrrule the objection. 1 17,f BY HR. BARASCH: , 10' Q The question simply is the latest estimate U ) of the clean-up and restoration costs of TMI-2, the . . m 20: that the company is noct operating on, something in the 21 vicinity of $900,000,000 in the fall, I am not ' sura. 22, MR. STRAHN: I think in fairness to i j 23 ) Mr. Arnold, the intention of having him here today was to ' l 24 testify on TMI-l restart ~proccedings. - 25 ' THE ADMINISTRATIVE IAW ~ I: If he can't
!!OHil2 ACH a ?t A:1SH AL. if 4C. - 07 N.' l OCXY/f t.t.,0W 4 V2. - J R G, P A. 17112
Arnold-cross 412 , i 3 1fansweritnov,hecansubmit the information later. , I I C 3 HR. BARASCH: I will take all these qacstions g 3~ and caswers as data requeets if the company wants to do it 41 that way. ' I just .didn't know at what other point we would 7 5 L be seeing Mr. Arnold. 4 6 TIE WITNESS: I would like to summarize or
?jgeneralizeperhapsisabetterword,onourcostingschedule 3 estimates on Unit 2 and if that does not provide sufficient y
9 h information, then we can provide a moro detailed response 4 10 lator. 11 From about November of 1979 through June of 12 i 1980 we had a very intense effort to identify the schedule 13 for the sequence of events that had to be carried out to g 14 accomplish the clean-up of the station and some effort, 13' although not.nearly as detailed as to what would be involved 16 in rebuilding the station for return to service, that resulted 17 in an estimate for the clean-up cost from the beginning of 18 1980 through the decontamination of the plant of $500 million 19 ' in 1980 dollara. 20; It forecaat a cost to rebuild the station to
)
21 'its original dasigned configuration including the provision 22 for a new core of $260 million again in 1980 dollars. If one 33 adds to that the approximately $95 aillion that was spent in i
% 1979 subsequent to the accideat, thetotalisabout$850 milling 25.l of those three elements. The $850 million does not include l mnmen s unsuu. me. - a w uo= muon m: - umsws a nn1
~
Arnold-cross 413 5 1 appronicately $15 million per year of equivalent normal O 2!0andacoses. 1
.3 ,
In responding to the NRC's draft proo raniatic - 4l environmental impact statement last week, we identified or 5 estimated that the difference in the progress of work to date
.6 i from what was contained in the base schedule that last 7 smmmr's cost estimate utilized would increase the cost of G;l the clean-up. Excuse me, that componcot plus additional 9 extensions wo expected to incur because of the rate in which 10 the regulatory interfaces were taking piace and the
.a
' ll ' presumption of a limitation on the funds that would be
'l 12 ; availabic to the company with which to conduct the clean-up O 13 ! wou1d altosether read to the extension of the echedute of l 14 2 to 3 years and an increase in the cost in 1980 dollars of U, about $150 million, so if we added $150 million to the 16f $500 million of 1980 to completion of clean-up, that is 17 f $650 million and then if we add to that the 1979 expenses 18 ; that is approximately $750 million in 1980 dollars. We 19 l provided just for a kind of reference how we would ase that
' 1 20 itotal growing from the effects of inflation by assuming a 21 i 10 percent per year inflation rate and that.would taka the 22 $750 million to about $1 billion, that only covered the 23 clean-up costs. Wa did not make a resvaluation of the cost lOa 243 of reduisd which ==s $260 m1111on in 1980 do11ers. rhet wou1d g 51 be over and above tha approximately $1 billion and real time ! youn:Aca a maass4L. i:::. - 27 n. i.ocxwrotovr ava. - sAneissuno. er. ivinz
Arnold-crasa 414 g-- I i 1 dollar flow for clean-up,. lIlh (' 2' Q And there was another 2 to 3 years of delay l { 31 that would at least add as a considaration anothar 2 to 3 1 1 4 years of $15 million per year for o and M for TMI? 5( A vaa. 3 l Si Q What we are talking about here is thia ; 1 i l 7jderivative 'for' or identical to the Bechtel study that we 8 have heard mentioned in the newspapars. Is that where these 4 1 1
? I nu=bers ara coming frcm?
l 10 1 A I am not sure. i 11 i Q There have been soen press releases of the t
- i 12 cocpany at which time, as I recall, they say the cetimate is 13 in the vicinity of $1 billion. I am wondering if we.cara 9
14 talking about the same thing. There is a Bechtel study or 15- something that has been connected with the company. i 15 ' A We have contracted with Bechtel Corporation l l 17 ' to be the major contractor for the decontamination of the l 13 contain=ent building and rebuilding of the unit. They had 19 l a very substantial participation in the development of these , i 20;ccsts and schedule estimates. Their portion of it now is i 21 pret:y much limited to the containment building, decontamina-l 22]tionandrebuildportion. Other parts would be outside the
'l 23 ' scope of their contract for principally estimated by ;
I 24 General Public Utilities. llI 3 (/ l 15f Q To make sure I understand this, your $1 billion , I I' t camcw n unsari. tsc - 27 f f Locen:.Lew avn. auamsete,to. PA. mu
. . Arnold-cross 415 I
1 number does not included any consideration of finance charges, 2 AFUDC related dollars that will eventually be capitalized, 3j is that correct? i . 4 A Well, again, I don't know how these expenses 5 i will be treated from an accounting standpoint, 6l Q You are just talking about dollars oi i i 7 ! espenditures, is that correct. t A That is correct. I am not including any 8li 9 capital cost related elements. 10 ( Q One other question in regard to your last . i l 11 answer. You had given us a set of numbers and you made a 12 I statement,of course, this doesn't include $13 million worth n U 13 ltof O and >f expense. y Are those amounts, that $15 million 14 i figure, in fact being spent by the company today and e=pected 15 j to be spent over the up-coming years and merely not being 16 l counted as a cost of clean-up and restoration or are those t
- 17 dollars , in fact, the company is not spending?
18 .] A They are the former. They are dollara that 19[iwe are in fact soending them on activities that are 20 equivalant to normal O and M expenses and we have not 21 included them in the catimate of the cost for clean-up of the i 22: station. r 23 ;, Q Finally, Mr. Arnold, how does G?U or you as l i 24 the person at GPU with responsibility for TMI plan to proceed M ) at TMI-2 with thn cican-up and perhaps restoration in view of j i nc e.=3c>i a xxassnit. inc. - 27 n. i.ecxwitt ow av:. ;4 AftRISSUR3. 'A. 17110
Arnold-cros: 416 2
. I 1 this Commission's September 18th order. !
C 2 A I believe it was limiting the use of rate I " payar funds for clean-up. Well, it is my understanding,
's 4 ! ezpaccation, that the order was not intended to prohibit 1
5 i those activities which are neccesary to maintain the plant 9 6 .in a safe condition and prior to the assurance of that order i
?jwehadinformedtheCommissionandtheNRCofourintentto 8 3i reduce the level of effort on clean-up substantially because
.i d
9j of the limited funds that we had available and because of tha 10 l need to conserve the insurance coverage acnics. It is cicar ,
- r. I "1 jj tihat we are going ~ to have to have additional resources from i
12! somewhere to accomplish the clean-up and I do not anticipate J f 13 pick-up in the level of effort from that that we have h M identified as the current situation in which I believe is 15 only that necessary to keep the plant safe and address , 3 i i 161 relative irrmediate safety issues until those additional il l 17 resources for major cican-up activities had been identified. l 18 l (Testimony continued on acnt page.) i l 19 1 2
^0i 21 22N l
23 .j 3.h I
\q
$b
'f CNRC A CH & *,l a,* $ H At IN C. - 27 f t.1.O O.<'l#1' OW A V T. " .U A M mS eU M S PA. 17112
Arnold-crcss 417 f y li Q Whethar it be from a reversal of the e omcission's determination of Septecher 18 or advancement q 2p C J d 3 [ f money from other sources other than ratspayers, for h 4. instance ? . 5 A Yes. 6j MR. BARASCH: That is all the queJtions I f 7j have of the witness, Your Honor.
~
8 THE ADMDiISTRATIVE LAW JUDGE: Let's recess i I ' g: until quarter of two. i 10 MR. STRAHN: Would it be possible, before we
! \
31 j recess, to determine whether anyone else has any interest in f 12 ; questioning Mr. Arnold? 13 . THE ADMINISTRATIVE 1AW JUDGE: Is there any O y, further cross-examination of this witness? MR. WISE: I anticipate none other than 15l 16 w uld be covered by Mr. Kelly. i 17 ! MR. KEl1Y: I have some questions, Your Honor. 18 I don't think it should take too long. I take it your intereat 19 , was finishing Mr.. Arnold before lunch? MR. STRAHN: Yes, if at all possible. He 20{ 21 ! has a very tight schedule. l 22 MR. KELLY: I don't think I will take more l l 23 ; than ten minutes , if that. j l .i
~y, it THE ADMINISTRATIVE LAU JUDGE: Well, ask :
i O" 3; ji your questions. I will defer ac3ourn2.ng until you conclude ! 1 I ! E s:CH.'t3ACH a U.AR SH AL. !!?C. - 27 !L LOCXWiLLO'.Y AVC. ~ HARMISSUS G. PA. 17112 l t
Arnold-cross 418 si 7
; ] your cross-examination.
h2. STMEN: { g Thank you, Your Honor. e,hBYMR. KELLY: n Q Mr. Arnold, my name is Rober't Kelly. A 4 9 5
. couple points I would like to clear up if I could, first.
6 On the schedule I had somehow for Step 2 , t i l got a figure of 155 days and I think you said in response 1 aj to a cpestion of Mr. Barasch 90 days. I am just curious as 9 ji to whether or not I made a mistake in writing down 155 or i
;g whether I misheard you or what?
i II .h 3 A Step 2 is the conduct of the hearings d 12 l themselves and the. issuance by the ASLB of a recommended 13 decision. O 14 , The 155 days for that is made up of 1 15 ll basically 60 days of hearings and 90 days for post-hearing Process, 16[ 17 )a Q That war the original August 9 proposed d.. wl schedule?
.c:
a A Yes, and what I identified to Mr. Barasch, 39 ih 2G d in response to Mr. Baracch's questions, is that the 90-day _ segment of that is still the same time duration in our
.c 1 !
nresent
' schedule.
22 Q The 60-day hearing schedule has been expacdec 2a to six months , we know that for a fact, but you are assuming h l, g, then that the 90-day decision period or reccmmended decision ' u
*
- 0 h* :4T 4CM L M AR 55d AL. !!30. " 07 !!. t.OOKW1LLOW AV2. - MARRt 9auR G. P A. 17412
Arnold-cross 4 19 I y 1 period will remain the same? I 4 '
"nf rtunately, I don' t think aa know for b 2i i
A 2 '1 certain the duration of the hearings . Our schedule presumes
~N i
that it will be six months , but that the ASIS will still be 3, able to complete its post-hearing requirements to reach a 6l determination in the 90 days originally allocated. 7; Q Even though the hearing process has been aj expanded from 60 days to six months? A Yes, sir. 9 10 Q And another point I would like to clarify, 77 y my understanding is that normally there is an intermedicte 12 procedura or step between an ASLB decision and a Commission i de *** "> ""=" '**"8 '"* ^t "i" Sa'"7 ^9F** * " ""d- "id O 13 p I the August 9th order bypass that ASAB step? It has been a while since I looked at the order. I frankly can't re. call. . 15 16;l A Yes , sir, my understanding is it did. I I i l uill look for the reference if you would like, 77 t
'l Q That is all right, I will look at it later 16 d a
So we don't have to worry about that step. 19 [ myself. A That is correct at this time, sir. 20l 31; Q Mr. Arnold, you indicated that -- well, I don't believe you have indicated yet -- I am sorry, you
'2,!
23 did indicate that if the psychological strecs issues were , i 1 y approved by the Commission, the NEC, that it would still fit i 25 5 within your six-month time schedule, is that right? l H 2
' 17f12-NOM.93 ACH a !.fA?.SHAL. tNC. - 27 ft L 30F. Wit.t OV/ AVE - H Ct fuS a u't S. PA.
l Arnold-cross '420 '
. A If that is what I sahi it uas not intended a l..
to be ray testimony. I intende.- te say that cur schedule made
, j the assu:cption that if we received a decision on that shortly a
from the NRC it would still fit within the six-month duration <
.; Q Shortly being one month?
A That I think is as good a judgment as any. 5lt l
,, l Q Did I also understand you to say, in response l ,
i t a question from Mr. Barasch, that you are reading the 8- . 9 delay in the NRC in ruling on this question as being perhaps
., ! a conclusion that they will not consider this issue? Did 10
; you state that at one point?
11 ; A That is my judgment, Mr. Kelly. 1,4', I l Q Mr. Amid, d y u know if Met-Ed -- I guess 13 fthrough your legal team -- in the NRC proceeding has prepared. Q 14 j. your case on psychological distress? 15; A We have prepared substantial information that will relate to psychological stress testimony, we g believe. Since we do not know what the contention would
;9j actually be, we cannot prepare testimony at this time.
4 But we have engaged consultants with
~0 7 i h
expertise in that area and we have been attempting to do a 21l, sufficient scope of work in that area that we will be ready 22 ,: to proceed more or less immediately with drafting of testi- { 23 ) - h many. 243 E Q Mr. -Arnold, on the long-term items in the i 25!i W ! M c H 93 A O -i a M AR S M AL. !?!C. - 27 N. LQ OXW?LL O'.V AV E. - H AR R!SS U PG. PA. 17112 ^
. . j j l
7 ; August 9th order, to my knowledge you have not addressed the !
, s P m 2 i, question of what would happan if the Commission would include f O 3loneormoreofthoseitemsesbeinsrequiredtobeacccmg11ehed i
4j before DII-1 would be permitted to restart, is that correct? 5j A Some of the long-term action items have 6[ schedules for everyone that would have them cempleted prior i 7i t restart of Unit 1. Those we bave presumed, or probably 8 more accurately it is portions of those items rather than the 9f full item, but those we have presumed that we would have to 10 l complete as other plants do. 11 To the extent that long-term action items L 12 have been given schedules that uculd go beyond our projected ( 13 l- restart date for other licensees, we have made the assumption p) t, 14 that the same criteria would be app 1ied to us. 15 Q But no more than any other licensees through-i y- [ out the nation?- g! t A With a couple minor exceptions, that is correct. 18 : , 19 ] Q But it is true that with regard to TMI-l f l 20j f it has been treated differently by the Conmission to date 31:1 from other plonts? l 22 ) A That is very much our judgment. , l 3 i *1 23 l? Q With regard to assumption number -- I aci . j it
, y q sorry, I gucs /is not one of the numbered assumptions , it is ;
1 %
;5 j a later one -- has Met-Ed preparad any timetable, assuming d-
!.tOHa3ACH & !* AR$13A'
_ , fMO. - 07 N. LGCKWILLOW AYZ. - !{AMRisguftG, PA. 171g
Arnold-cross , 422 , N ! a 1 there would be an appeal frcm the NRC decision? 2j A No, air. 3' i, Q Can you give us any estL' ate if there would ' 4 ) be en appeal? - 5 A I think anybody's estimate at this time 6 would be so speculative as to be of little value: frankly. 1 7, I don't have any idea. 3 Q You haven't discussed this matter with Mr. 9f Trowbridge or any of the attorneys handling the NRC matter? 10 3 A Yes , but from those discuasions my conclusion 11 is that that is uncertain, first of all, as to whether or j l 12 ;i not there would be an appeal. 13 I The second uncertainty is as to whether even I h 14 ' if the courts in effect agree to hear testimony, take 11
,1 l 15 !! testimony on such an appeal, they would stay the effective-f 16 i ness of an order of the Nuclear Regulatory Commission.
I 17 The third uncertainty, of course, is as to 18 the outcome of such a proceeding itself. l 19 ( Q Let's put the first speculation aside. 20 , Assuming there were an appeal, have you cr have you not 21 h develcped a ticatable that an appeal would take? Let's assum;a, I l 22; for the sake of argument, that there were an appeal. j
- 23. A We have not developed such a timetable i 2-1 l because I think it would be extrecely dependent upon the S :9 25j issues that were being raised in the cppeal. -
N 'tOS.*:A OM a f4 AR SH AL.174C. - 27 F . LGCXW:8.L O W A V E. ** H apt!!!5 9 U r13. P A. 17130
Arnold-cross 423 j ! y} Q An appeal of this nature is not an appeal 2, do novo, it is on the record established belou, you are ; i e aware of that, right? - 1 4 A Yes. So there is no need to develop a new record? 3( Q 6, A That is correct, but it may not be an appeal 7 j. based upon all the issues in the recor:1, eithcr, or it may 3
- 3 p encompass the total record.
9 I Q We are not going to get anywhere on this, but juse to sumrnarize, Met-Ed or GPU has not developed any 10 f g kind of timetable dealing with a possible appeal? A I repeat my earlier testimony that no time i l 13 has been allowed for delay due to such appeals in the TMI-l y ] restart schedule, i 15 9 I presume that you have entered inte rio 16 j discussions with Mr. Trowbridge and other counsel in the NRC r proceeding regarding the likelihood of a stay should there 17 y g ll be an appeal? S
- 9 A That is correct.
20 Q With regard to order items in the August 9th a i 3 order, Mr. Arnold, I think you indicated that in the SER, 37 "2
, j the Safety Evaluation Report, the NRC staff has not dealu ,
! t
, ., i '
with a couole of those items, is that correct?
"3
,, 3 A Yes. I don't knew that I quantified it, but '
O' d, . 3g f there are some open issues -- , 1 McM73 A CH a *4 Art 9HAL MIO .*.7 f L LS$X'.Vit.f.0^.Y AVE. - MAR PlF3URG, P A. 17112 -
Arnold-cross -424 l l l Do you know which ones they are?
,1 Q ,
;i I O A They are listed in the dccument. if you e
na would like me to read them m2t from this Safety Evaluation
., J o !!
Report. -
- 3. [(
Q Fine . D]e F 6l A In NUREG 0680, short title, THI-l Restart, l on psges B-5 through 3-10 are listed the order items. On
,, i.
~
3; page B-5 of the table all items are listed as comply, which 4 9 means that the item is completed -- Q Let me ask on the two items I was trying to 10 1.yI get at. Has the NRC staff issued its SER on the financial 1 12 C Pability of the company? i A No , s ir. ( 13 g, Q Is that still cn open question? e
. A That is still an open question. There has o
y, j been a schedule, or perhaps a forecast would be better, of 1
., ,, !! the supplement to the SER dealing with financial capability .;.1 18 and emergency planning for January or early February.
I 19 4 Q How late is that forecast? n d A About two weeks ago.
~
90) Q That means the staff would file its 21 22 i ree =m ndations by those dates and then the other parties 4 25 g w uld then start working from that point? That would be the 3
", . I initial filing by the staff, is that correct, in ate b j ig g; January or February? i e
30H.7C ACM A MAft SHA1 !!40. - 27 N. f;Q ?'. Wit 1.OW AV2. - M AR3U53URG. PA. 17112 _~
- . Arnold-cross 425 i
I g, A That is correct, but I don't think it is l 2 y quite correct to say that the intervencra vould start thsir l 3l work a t that time. i 4! ; Q I didn't mean to say that. These tuo items
! f 5 i you mentioned, financial and emergency planning, are those -
1 6 [ two areas that I believe you earlier identified as being i 7 perhaos the two most important areas beyond GPU or Met-Ed's e ij concrcl, is that right? il 9[ , A Yes, I think so. 10 d MR. KELLY: That is all, Your Honor. 11 THE ADMINISTRATIVE LAW JUDGE: Any furhter 4 12 j cross-examination of this witness? Q 13 : MR BARASCH: None, Your Honor. 14 MR. SurriAN: No. j 15t THE ADMINISTRATIVE LAW JUDGE: Any redirect? 16: FR. STRAHN: No redirect, Your Honor. 17 , THE ADMINISTRATIVE LAW JUDGE: Very well, 1S j let's recess until 2:00. Do you want the witness excused? , 1 1 19 MR. STRAHN: ~ Could we have the witnesa 1 20 ;j excused, please? We are finished with him. ,
'a l f
21;1 THE ADMINISTRATIVE LAW JUDGE: Is th.ere any 23 i. objection to excusing the witness at leas t for today? i i 23 ; MR. 'ET.T.Y : Ho.
.i .
Q 24 MR. BARASCH: No. 25 ll MR. S M 2.AM: No. J .I
*:OMMCACH
- M ARSHAL tlJC. - 27 !!. !.0 0;tWILLOW AVE. - M AR11SSURC. *A.
. 17112
.-..~_. .- _ _. - - . - . -
425-A. n n 7j THE ADMINISTRATIVE I).U JUDGE: Very well, P' 3 d Mr. Arnold, you go do your work. THE FTITNESS: Thank you, sir. I appreciate 3 4 your cooperation. - I-S lil _____ t 6, t 7 (The hearing recessed at 12:55 o' clock p.m.) 0?
)
9' . 10 f 11 ! i 12 ii
?
13 : b i 14 i 15 ' 16: 17 ! l ISl h 1 9 !' 1 i 20? 21! 22lff Il 23] 04j 9..L.: 4 U
*tottN3ACH 0.a MAR GH AL. !!!O. - 07 !!. tCCKW:1. LOW AVE. ~ 14 AMRIS SUR G. PA.
171 l a ----
Rabor-direct 426 i g THE ADMINISTRATIVE LAU JUDGE: Are counsel I Q ,, : ready to proceed? b ~)
,,,, MR. SUFFIAN: Yes, Your Honor.
4l; 5, MARVIN RABER, having been first duly sworn, i 6 f was called as a witness and testified as follows: I 7i g! DIRECT EXAMINATION
.i 9'j BY MR. SELTZER:
Q Mr. Raber, would you state your full name f 10 ! 71 and business address for the record? 12 i A My name is Marvin Raber. My business 13 , address is 100 Interpace Parkway, Parsippany, New Jersey. O+ Mr. Raber, by whom are you employed and 14 l Q in what capacity, sir? 15 16 A I am employed by GPU Service Corporation 17 as Manager of Forecasting and Supply Planning. 18j Q Mr. Raber, would you briefly describe your l 19 i educational and professional background? 20j A My educational background includes a 21 Bachelor's Degree in Chsmiual Engineering frcm the Polytechnical Instituta f Br klyn in 1958 and a Master's Degree in 22f 23fChemicalEngineeringfromNewYorkUniversityin1963. -
. I am a Registered Professional Engineer in
'4:;,
# J I have taken continuing education 3, New York and in Maryland.
f f 3MftBACH L M A MSHAL, tNC. - 27 N. LOCXWILLOW AVE. - f MR M14 5 U *t G. P A. 17112
R:bar-direct 427 1 [ c urscs in finance, for:cesting and d: cision cnking, CPM Methodology and Management C 2 O 3l Prior to joining GPU Service Corporation, i 4 I served as a nuclear and chemical engineer with the United i Nuclear Corporation and its predecessor organization Nuclear 5 i 6 f Development Corporation of America. 4
?i From 1958 to 1966 my respcnsibilities 8 there included design and development of reactors, safety 9l and licensing support for fuel processing operations and 10 technology assessment and development.
11 ; From 1966 to 1970 I was a consultant with 12 fthe Hittman Corporation and was a Vice-President of the
, 13 , subsidiary, Hittman Nuclear and Development Corporation.
t 14 , My responsibilities there included design and development O i' 15 ,. of special purpose reactors, radioactive material shipping 16 j casts, chemical processing plants. I performed consulting F 17 , services involving short and long-range market analyses, l 4 j 1 isytransportation,economicsandlogistics,engineeringmethodology 19 3 development and procurement of nuclear fuel. I l 20 ) From 1970 to 1975 I uas a senior staff l 21; consultant and engineering manager at Combustion Engineering, 22 f Inc. , specifically the Nuclear Power Systems Division. My 23 'j responsibilities included reactor core design, integrateJ l 24 projects and technical management of reload fuel projects, o g 25 !, and engineering services with operational flexibility and 1 a l 2 NO::RDAOH & M ARSHAL Itic. - 17 N. LCOKWNLOW AVE - M ARRl$3tJ:tG # A. 17(3*
r 1, performance improvecents of nuclear power plants. l 5 l 2 I joined GPU Service Corporation in 1978 3j as Manager of Forecasting and Supply Planning. - My responsi-t 4 bilities include development of 20-year kilowatt hour sales 3l and peak load forecasts for each of the three operating i ! 6! companies and economic evaluation of supply alternatives 7l including new capacity, purchase options, retirements and
, af,joint ventures.
9 I am also presently responsible for the l 10 l screening and evaluation of sites for new core-fired
?
11 ! capacity and for the planning and developmental aspects of 12 : water resources for those hydroelectric stations and thermo-i , 3 13fpowerstations. i i 14 l I have co-authored five papers and several l t i 15 i reports on nuclear technology and economics and I ao a co-16! holder of two patents in the nuclear power field. 17 i I am a member of the National and New Jersey l l l ! 18 Societies of Professional Engineers, the American Management i 19 Association, the American Nuclear Society and the Association 1 l 20l of Energy Engineers. 1 Q Mr. Raber, let me direct your attention, 21l 22 if I night, sir, to two documents that have been previously 23; marked in this proceeding as Met-Ed Statement I and Penelec 1
.g f- Statement I. Were these documents either prepared by you or l 25 under ye.ur supervision?
!AG AR&ACH & MAR SHAL. ING. *- 27 ff. LOC (W1LL OW AVE
- HAM RIS SURG. PA. 171t2
Rabtr-direct 429
'I If A Yes, they were.
e (m 2! Q For purposes of the procacding I will note 3 that those documents are marked as bearing the name t 4[B.H.Cherryaswitness. For purposes of this proceeding,
- 4 5 f are you adopting those statements that we just referenced?
6 A Yes, I am. 7 Q Now if I were to ask you today the questions e u
- lthat are contained in both of those statements, would your ,
9 janswers be the same as those contained in those statements? 10 3 A Yes, they would. d 4 fi a 2 ;- 1 y Q With respect to the statements them: elves, i
- =>
- f. l jdo you have any corrections or additions to make to them at i
'- 13 b ;this time?
i 14 5 A Yes, I have two. There is a correction to l
"i tu f be made to Exhibit I-9 for Penelec only. That czhibit l 16 j contains several columns of figures,many rows of figurca.
, i each -
- 7 jThe columns of figures are one for/ year and for the years
- b i "3
j1980through1983theentriesforthetop-mostrowshould i J l 4# jcppear on the second row and the entries shown now for the ! l .2 0 :] second row should appear in the top-most row. 31 More specifically, the numbers there on the f 22i magnitude of 2.4 million should all appear on the second row. !! j of :
" ,l The ni.unbers on the nrder /800,000 should all appear on the i
s. 3 m 5 top row.
!h t .
v i 15 h Q Let to direct your attention at this time to. d ttonn3Acu a t.:usHAL. In::. - E7 tt. LocxwtLL 3vt Avc. - MARRl58URG. PA. 17112
429A g-f 1l cha c=hibits that havo been previously marked in the 2fproceedingasMet-EdexhibitsI-1throughI-29andPenelec \a j 3 s exhibits I-l through I-29 inclusive and ask you if these q - 4r ozhibits were prepared by you or under your supervision or 5i direction? i 6' A Yes, they were. 7i Q And for purposes of this proceeding, am I 8( correct in stating that you are sponsoring or adopting those particular exhibits which I also will note bear the name of 9l 10 B. H. Cherry? 11 A That is correct. 12 { (Testimony is continued on nont page.) i 13 f 14 . l-15 I I I 16 f - 17 18! a 19 L 20' i i 21 22 j 23; 1 I w
-a e -
23[
*10t!!!D ACH a t.t ARSH AL 1NC. - 27 f4. LOCK',(!LLOV. AVI.- M A R tt! S BtJTt G.
- A.
17t12
Rober-direct OJ@ i I MR. SELTZER: Your Honor, that is all we I h e .; ha v a of Mr . Raber at this time. , THE ADMINISTRATIVE IAW .iUEGE: Is the O 3 ,' 4 , Co:rnission prepared -- 5 MR. SELTZER: Excuse me, Ycur Honor, I stand 6,l corrected. Mr. Raber has indicated he has one other e 7 correction he would like to make. i e; THE WITNESS: On both the Penelee and Met-Ed p' Exhibits 1-27 there is an identification of the forecast 10 which should be corrected to the April 1980 forecasc. MR. SUFFIAh:: Pardon me, what page is thac, 11 ] t 12 Mr. Raber ? I THE WITNESS: It is on the very first page ( 13 l 14 , of the exhibit, on the very last line of the response. The $ r 13 " i phrase reads, based on the energy load forecast, and the , 16 h next word in the original is, October 1980, it should read 3 l 17 April 1980. I MR. SUFFIAN: Thank you. 18 )f 9 19 ) MR. BARASCH: Your Honor, could we gc off 20 [ the record for a second, please? i 21 Is that a Penelee exhibit or Met-Ed exhibit 22 you are talking about? g _2 MR. SELTZER: Penelec I-27. t
~,~,
9, f THE WITNESS: I apologize, the Met-Ed i b 4 25 e:<hibit is phrasad differently and that error does not appear, i I AV2. - H APA;3 3'J30. 9 4. t7112
'40r:F.O ACH a 19 A 4 f:FA'.. !!!O. - 27 fL L O COVILL O'."
N e t 1 3 in the Met-Ed exhibit, strictly the Penelec exhibit. i lI l 3; THE ADMINISTRATIVE IE! JUEGE: It should j h be April instead of Oetcher? 3l ? THE WITNESS: That is correc't. 5! THE ADMINISTRATIVE I&! JUDGE: The staff may b 5 Proceed. i 7! a CROSS-EXAMINATION 9 ! BY MR. SUFFIAN: I 10 Q Mr. Rober, on pages 2 of Penelec's and 11 ; Met-Ed's Statement I, I believe you testified that GPU f 12 ' strategy for the 1980's will center on the load management and conservation efforts which are defined in the conservatica 13 ' O l if, j and load management master plan which was previously suppliec to the Commission on March 28, 1980. Could you briefly 15 16 .! describe the type of load management and conservation 17 activities to be implemented by both Penelse and Met-Ed? S is A There are e variety of them and the first 19 I implementation plan, I believe, has also been submitted to k 20;l the Commission and/or the Ccamission staff. 21 The initial phases of implementation deal i
- 22) with items such as storage water heaters which would be l t 23 .. provided under certain conditions to customers, coupled !
1 3j with the use of time-of-day ratas. O' 23,j Q I take it there are several cther specific
. ?10HE:ACH is STAR 1FSAL. ?!4c. - Of ti f.93K'.Y!LLUW AVE. - H1.R a tFat W7. P A. 87112
432
- Raber-cro s f programs under the conserva tion plan? .
101 , p A There are many progrces outlinad in the g h original caster plan document and the implementation of these 3
,iprograms is intended to be a pbcsed process.
*l 9 It is necessary, I think, for us to get some ya feedback from the Ccrumissien and its staff in order to formal-D.
j ize and finalize these implementation plans. 7 q g Q Am I correct that you do have a time schedule for the implementation of these specific programs in the load 9
" S " * """* "# "
10 : J A I believa there is one proposed, yes.
,l; A
Q The one proposed, was that submitted to the commission, to the staff ? Has that been submitted? 13 A May we gc off the record for a moment, please i THE ADMINISTRATIVE IAW JUDGE: We will go 15 16;l off.
,7.
(Discussion off the record.) 1 I THE WITNESS: The master plan and its 18 ' l ,9
' development are being conducted but within our Demand Planning 1 1
7 Department at GPU SC, not within my forecasting and supply
~ 0 .1
,, l planning department, and I am not fully cognizant of all the ol details at this moment that you are starting to ask for in
,2 s .
l r your questions. l o3l If ycu like, I will attempt to get you the g ansvers to your questions or, alternatively, provide a witness. l
)
N 3pr.c AOM a it ANSHAL. Plc. - ? F4. L 2H2XW:Lt.OW AVE. - M A9 ft!$3 U 3G, PA. 1711.1
_ n N l 1 I BY IG. SUFFIAN: b 2' Q Can you specify any one oerson who would be O 3 in charge of implementing these plans? 4 A Yes, that person would be Mr. Walter Hood. 5, MR. SELTZER: Your Honor, Mr. Suffian, if i 6' you please, as Mr. Raber has just indicated, his expertise 7l with respect to this is on a broad basis and has everall 8i responsibility. Mr. Hood is with us here, and if it would 9'; more appropriately expedite response to the questions that 10 , Mr. Suffian may have on titis area, I could propose that we swear in as a witness Mr. Hood and specific questions on 11 { 12 that could perhaps be handled right now. 13 i THE ADMINISTRATIVE LAW JUDGE: Any objection? O 14 : i HR. SUFFIAN: No objection by Trial Staff. 15, THE ADMINISTRATIVE LAW JUDGE: Ering the 1 16[ uitness here and we will swear him in and you can direct 17; your questions to whomever responds . 18 l MR. SELTZER: At this time we would like to 19 call Mr. Hood. 20: 31i WALTER T. IiOOD, called as a witness on
} '
22l behalf of Respondents, having been duly sworn according to 23 law, was examined and testified as follows. C) .
.ss 4 I
MSun3ACH t.: r!AMSMAL &NC. - 27 14. LGC:'Y/f t.LO*.Y A*/2. " H ARRf 580RC PA. 17112 ) f
Hood-direct 434 DIRECT EXAMIMATION 1 p lBYMR.SEisTZER: j! h Q Mr. Hood, will you pleasa state your name l land business address for the record, please?' 4 f A (Hood) My name is Walter T. Hood, and my 5i s ness aMress b M0 Integace Padway, Parsippany, New 6 l l Jers ey . 7: I o Q By whom are you employed and in what capacity? o A (Hood) I am employed by GPU Service Corporation 9 as Manager of Demand Planning. 10i l
! Q Within your job category is it your 21 i j responsibility at the present time to handle the implementatica 13 f what has been referred to as the master plan? $
A (Hood) Yes, it is. I Q And the implementation thereof? 15j
! A (Hood) Yes.
16' l,e ! MR. SELTZER: That is all we have at this i
, time of Mr. Hood.
18: . 4 THE ADMINISTRATIVE LAW JUDGE: Very well, 191 1 i Mr. Suffian, you can ask your questions, then, whichever witness can respond can do so. 31; i MR. SUFFIA% . hack you, Your Honor. 22:
,, 1 "a C20SS-CusMIIIATION
_,l h b *l{BYF12.SUFelAN: 25 .! q Q I would like to ask you if you could { N OF'30ACH & *1 AR SH/' . INO. - 27 il. LOCM*NtLLOVI AVC. - f M P13%
.'G. P A. 17f12
P.aber-Hood-c ress 435 7 e! i 1 ji describe the specific programs which would be included in j 3
- this master oLan for load management and conservation 3, activities ? .
- 4. [ A (Hood) The overall master plan document or 5 concept is broken into two basic pieces of residential, and 6 a commercial and industrial piece.
7 The residential piece includes such things 0; as time-of-day races, storage water heaters, storage space i i 9; heats, energy audit type analyses, and mandatory weatherication o standards for new homes. 11 f The commercial and industrial sector includes 12 , a whole variety of things including scorage space and heat, t 1.3 { cobling, heat recevery systems, curtailable rates, co-0 F 14: generation and an effort by the company to consult with the I 15j various industria1 aad commereia1 customers to improve the 16 efficiency of their product lines and things like that. I i i 17 :j Q What I wculd like to hone in on are the l 18+ specific programs that would oply to these two sectors 19 and they may be separate and they may be overlapping. 1 l 20 l Could you describe those specific programs ' l ti
- 21. for load management and conservation that would apply in j i
22 4 these two sectors that you say the master plan is divided l l t 23 , into? q pf A (Hood) Would you clarify that a little bit? LP . 25 ,; Q You say there is a osster plan and under the f,
*tCM23A CH u M AR SHAL. ! 4C. - 37 N. LCSKWILLOW AYC. - M ARRM3 bRC. ?A. 17112
Raber-Hcod-cross 436 ll 1 g 0 master plan you have two sectors, a separation between the (' _. residential and commercial and industrial and what I would , i i l
! like to focus on are the specific programs for load management i
4l and conservation for these two sectors that 'you have. le I A (Hood) I just identified those. Ot i 6j ; Q Y u identified the two sectors, the residential sector under the caster plan, and the ccemercial and 7 8j r industrial sector. I would like details as to the specific
~
4 g i programs for conservation and load management. Could you go 10hintogreaterdet:211 as to specific programs geared to con-1
. y servation under the master plan?
.t 1 p a
gf A (Hood) Specific conservation or load manage-13 j
?
ment? O p,! ' Q Well, both --
*1 In-h THE ADMINISTRATIVE LAW JUDGE: Would counsel .
I I nd the witness keep their voice up so we can all hear? 16 l h BY MR. SUFFIAM: 17 p Q We can begin With conservation and conclude t gg] uith load management. 4 A (Eccd) As I just said, under the residential 20 pr gr m 92 re talking about time-of-day ra es, storage ! 21 1 d J gj water heating, storage space heating, energy audits or l l y il analyses, and mandarory weatherization for new homes. l I
~i Because it is a very comprehensive plan ig 2., t
;i involving a lot of things , we have chosen to move ahead '
2~, f
- j
' I MONF.3ACH 4: ht /.J: S H AL M IC. ".7 f t L O S K WILL OW AYE. '" H Art *J S H.;/t G P A. 17112
Raber-Hood-cross C/ f. I with various parts of it first. 4 m ,h Our first phase cf the implementa tion plan -- i y -s Q Pardon me, I,didn't catch what you just said. 3{. - A /(Hoc,d)Our first phase implementation plan which is f 4 5} in the draft phase right now addr :sses for the residential 5 group time-of-day races, storate water heating and energy i 7 ( an lysis . al Q You say the first phase implementation plan pi is in the drafting stage now. Do you have any idea when the 10 drafts will be completed? When do you anticipate implement-2 ing these plans? 1~3 l (Hood) 12 ,' A/ You are aware that the Bureau of CEEP has p 13 , an informal investigation into the master plan? V , Continue, 14 : Q I s (Hood) A / We are working with them on an informal I 15 f 16 basis . We have submitted to them last week a preliminary 17 f draft of the plan. We are hoping to have some sort of le d; regulatory go-ahead by early next year,1981, to get moving 19 ; on some of these plans, d j l 20 g Q Once you get the regulatory okay to actually . y 21l implement the plans 3 how long after that will it take to , li l 22[ actua11y implement the plaas? i i 23f A (Hood) We should be ready to go. I mean we ; i 2M are buogeting for it next year. We are planning on doing it. .O So after the go-ahead by CEEP, by the 25ls : Q j 3.10MROACH & :*A?!5HAL. INC. - 27 !L L@C):WILL3W AV EC. - M A Rit?S SUF.G. PA. 17812 t
Raber-Hood-cross 438 d l
~I!
Commission, then you will be ready immediately to institute g i b 3 q the plan? a, A (Hood) Or very shortly thereafter. 4 Q- Do you have any estimates of the currant time t i 5t as to the cost of implementing these plans? 6,. A (Hood) The master plan document contains some detailed numbers as to the costs and I assume - .I don't think 7l g it is in this docket. 9 MR, SELTZER: We have not introduced the 10 master plan document itself as an exhibit. 11 ! THE WITNESS: (Hood) It has been introduced l 12 in prior dockets. g ( 13 i BY MR. SUFFIAN: 14 , Q Are you making any claim that you are aware 13 j f in this rate case, in this proceeding, for the costs for 16! implementing that plan? 17, A (Hood) To the best of my kncwledge we are not . 18 MR SUFFIAN: May we proceed? Are you look-19 ing for it -- 20' MR. SELTZER: I think we may have an answer 21.' in a moment if you bear with us. 22 MR SUFFIAN: All right. 23 MR OGDEN: In checking with Mr. Huff and 24i Mr. Carroll, the accounting witnesses in the case, there are v j{ gj claims in both cases for certain residential conservation
*10MRO ACM & MARSM AL. ?NO. - O* f t. LOOKWILLOW AVC. " HAPJi33*JPG. PA. 1711
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Raber-Hood-cross 439 t' The confusion which may arise is that these aus 1 [ measures. 2 not necessarily connected with the master plcn as such.
] i:-
3 9 These are claims for the companies ' ongoing residentici l - 4l conservation progracs. k MR. SUFFIAN: So you are saying that the 3l 6 claims for the master plan would be separate and in addition
- 7l co the claims that you have already noted for residential i
G! conservation? l 9f: MR. OGDEN: Since I am not a witness I would 10 IlI, prefer to have one of the accounting witnesses, when they 11h i are o- the stand, identify that for you and answer the 4 12 P question. I Perhaps I can direct this MR. SUFFIAN: O 13 )s question to Messrs. Hood and Raber. 14[ 15 BY MR. SUFFLAN: 16 ! Q Referring to Mat-Ed Exhibit B-1, Part 8, II l on page 9, normalization adjustment number 7 -- do you have 17 li 18 that reference? 4 19 y A (Raber) No, I am scrry I don't. t i j 20! A (Hood) It is coming. 4 Q Under nunber five of the line numbers I 21] e 22: read, increased payroll expense due to personnel additions b 23 for RCS -- I take it that is residential conservation' serv , m 24 3 energy audit? : U d A (Hood) Yes, sir. 25) i Oict3AOM ta MAR $9 AL. ';tc. - 07 TL L3CXW.LLOW AYZ. - N ARRISBURG. P A. 17110 1
Raber-Hcod-cross 0' r
; [ Q That together with the normalization adjust-e 2
ment nu ber 8 which is noted on page 18. Schedule No. 6, h 1 2 } normalization adjustment number 9, both refer to the residentisl
*l conservation services program, is that true?
4 J 5 A (Hood) Yes. 6, Q That tota 1 is half a million dollars, I 7 believe, the $284,000 for the RCS energy audit and the 3f$216,000 for the normalizing adjustment, estimated costs i :
! for the RCS program, would you agree with me, subject to 9l check, that that is what it would amount to?
10 f A (Hood) Yes. 1 1f Q Are these costs, costs which would be claimed 12 13 i for the =ast plan, the type of costs incurred in the master h 14 , plan, or is this something separate? 1 A (Hood) The RCS program is something separate. 15 h It is being totally handled by the individual operating 16! 17 l c ompa nies . These companies are totally separate from 18 anything related to the master plan.
;9 Q There is still the possibility, then, that 20!uj there are other costs related to the master plan that are
!I 21 claimed in this rate case but you are not the witnesses to ask that question to?
22 t . 23 ) A (Hood) I am not the witness, but to the best s
. ,,,O of my knowledge there are.
-n ,
h a 25j MR. CiDEN: I think the accounting uitnesses,i 1 , I 510HRO ACH & M AR SH AL. INC. *.7 N. LOCXWLLLTY AVE. - f f ARRIS SUR G PA. 17t12 i
Rabar-Hood-cross 441
?
i 1 Mr. Suffian, would be the appropriate witnesses. 1 2 MR. SUFFIAN: tiessrs. Huff and Carroll? i 3 MR. OGDEN: Yes-4 3Y MR. SUFFIAN: 5; Q Could you tell me whether any of the cosLs 6; incurred in the RCS, residential conservation services energy 7i audit, or residential conservation services, whether any of Sf those costs might overlap or also be included in the master 9l plan? 10 y A (Hood) Because of the potential problems d 11 i between the state and the federal government we are doing 12 : our best to keep the RCS program completely separate from 13 b the master plan, in concept and in actual accounting practices , 14 g to keep those dollars separate. 15 ij Q They would be separate, discrete costs? A i 16 h (Hood) Yes. , 17 ; Q Could you tell me whether the effects of I l F
, tne implementation of the master plan have been reflected is !t
- 19 ', in the energy sales of Met-Ed and Penelee?
20 h A (Raber) They have not because of the time 21[ lag involved in getting the regulatory approval and in i 22 h beginning the implamentation of these plans. The impact d 23.l is expected to be rather s=all, at least through 1931. ; 6 g To the extent timt implamentation may be 24 li ] V' d 23 ) accelerated and a noticeable impact found, the sales forecast: E3 McHTtBACH S. f *AR SH At tNC. - 27 N.1.OCXW:Lt.OW WE. - N AftR rO 9 U P G.
- A. 17!!2 1 ,
> o Raber-Hood-cross 442 1 :
;0
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should be reduced. g b 2j Q A few mome ts ag I believe that Mr. Hood j
?
3 j stated that you expect to have a Commission decision on this 4 4,lmaeter in 1981. A (Hood) We hope. 3, 6 Q Do you kncu about when a decision is expected 7; in 19817 Could you be a little bit more specific, if you can? t 3 A (Hood) No , I ca n ' t . We plan on working with l 9, the Bureau of CEEP in evolving this document from a draft to a final document. Hopefully that should only take about a 10 g' month or six weeks. 12 I think there is still a question up in the g air as to what sort of regulatory approval is actually 13 l i i 74, ; required, whether it is going to be a hearing or policy statement or whatever. 15 l 16; Q Y u have already submitted the initial draft? , 37 i A (Hood) Yes , j
~ il I l
3 gg Q And now you are estimating a month to six 19 weeks for Commission approval of the draft and then perhaps !
- l .
20 ] further hearings and further regulatory process before -- n 37 ! A (Hood) A month to six weeks working with CEEP and coming up with a final document that would go to the 22; , 23f Commiss ion. g I g Q Once the plan has been implemented, hopefully 25 l s metime in 1981, do you have a means of monitoring the plan I b J 1C: rRE AC:t O 't AR$!4 AL. !!!O. - U f t. LOCXWILLOW AVT. - H AR RM 5 t; R G, .e A. 17112
Raber-Hood-cross 443 i y and the savings generated by the plan, the reduced sales 4 O V 6 ;i flowing from the plan? l J
~j A (Hood) We plen on doing a number of things 41 4l r
to try and monitor the impact of the plan, ranging from I' 5 interviews and questioning customers who have been affected 6 f by the plan, doing actual load research on these customers, 7 monitoring them on their bills. and other things deemed aj appropricte to try and monitor and get a handle on what the 9' impact of the plan is. Q Y u have this actually built into the plan, 10
, , monitoring of monthly bills and interviews with customers ? I u.
12 A (Hood) Yes.
,G 13 Q Over what period of time, I mean how often G
will customers ' bills be monitored, how often will the inter-y 13l vieus take place, over what period of time will this occur? I A (Hood) We have not yet developed these 16 , . i 3 7 ( specifics, but it is my opinion that it shculd be a coatinuous e b process. ! IG. . I 19 y Q Done on a daily basis , a monthly basis ? 200t I A (Hood) Maybe not continuous to the extenc ! t i of daily or monthly even, but it should not be done after , i 213 i
!i the first year and then forEotten about. Maybe every sin 22 h
! months you have to look at it again or every year you have I 23 ]
'l 3 to look at it again.
C) 2.u Il Q Generally you are stating there is specified ' 25] h EJc H3 DACH & !.t AR$ H AL. !NC. - 27 i . LG CXWILLOW AVE. - HA R tf SS U MG. P A, 1711E
. o Raber-Hoed-cross 444 n I N
1 in the plan a monitoring -- 2 A (Hood) Yes. i il l 3 Q -- device to determine just . shat the savings
- 4. j are from the plan, but there are no specifics in the plan as s
S dt o how this takes place? 6{ ! A (Hood) The plan calls out our intent to 7 monitor these programs. 6 Q Are you saying that eventually you will be 9 I able to provide the Commission with a schedule showing the 4 i 10 savings resulting from this plan? 3 n i 11 1 A (Hood) Yes , estimated savings. J 9 1 12 i Q Once the plan has been implemented and once 13 , the decision is made that it is a viable working plan, do 6 I 14i you expect changes in the load characteristics of your customers? 15 g 16 A (Hood) Yes. P Q What changes would you expect? 17{ 18 A (Hood) Are you talking about just the first i 19 ; phasa water heater or the total master plan? 20! Q I am talking about the total = aster plan. e 21h A (Hood) Since the master plan contains a n ~ 22; 1 variety of things in conservation and load management, I 23 I would expect a variety of impacts en the load shape ranging 3 0 24 i from cure conservation and general reduction in energy - s. 25 requirement to some significant load shifting from daytime a _ _ _ _ - = , , _ . _ - _ . _ , _ i l
[ , , Raber-Hood-cross 445 1 l
;)1 peak periods to nighttime off peak periods.
2 Q Eave you prepared a study indicating just l ( 3j what you expect the changes in load characteristics to be
! =
4 with the implementation of the plan? 5 A (Hood) Yes. il Q Could you provide staff with a copy of this? i i 6l . j 7l A (Hood) That is contained in the initial ! I gj master plan document. p! Q Thank you. Could either of you describe 10 what the planning is for the Forked River nuclear generating 11 , station? 12 A (Raber) The Board of Directors bas, I believe , 13 in effect canceled the plan.
)
14 Q Canceled the plan? t 15; A (Raber) The plan to construct Forked River, t This is an ongoing issue within the Jersey Cencral rate 16j 17 Proceeding that is in progress at the moment. There was a f i 18 { firm recommendation made tc. the Board of Directors to stop I I 19 { construction of the plant and I believe that was adopted. f 20l Q Then will ycu have any current plans for the 21! P l ant now that the plant has been canceled, for I think b 22 l introduction into service in 19867 l- (Raber) 23 i A / The plant as it stands now is in an early i i 4 n - - 24;j pnase at construction. Tnere 2.s equipment on site uhose N i V ; , 25 j disposition at the cement is uncertain. i l vonneAca a etAa5 MAL. WC. - 27 M. LOC.<W1LLOW AV!t. " H ARMOEUG, PA. 171f* l L
1
.. s l
1 I Raber-Hood-cross 446 1 I. There is proposed within the Jersey Central gg Ih (N.. 2 4 case financial disposition of the investment, but I am not i il 3 iW in a position to describe the details cf that, i 4j Q Turning to Seward No. 7, do you anticipate i 3l any delays in the in-service date of Seward? l Raber) l 1 6l A /(Yes, relative to the date that is presented 7 in the load and capacity information in my pre-filed testimony . 8 The in-service date of Seward-7 has been officially delayed i 9: for two years , to May of 1989. [I 10 , Q Could you tell us what the status of the 11
- c nstruction is for Seward-7 at the present time?
(Raber) 12 A /I believe there has been very little if any ggg ( 1; , actual construction activity on the site. The licensing of i 14 the plant is in progress and will continue to be pursued. 135 Q Mr. Raber, I believe you might be better i 16 , able to answer this. I would refer you to pages 6 of Penelecj I i 17 and Met-Ed Statements I, and on page 6, I am quoting from : 1 i the testimony, economic conditions have changed which have
~
23 { 19 resulted in reduced near term sales and a slip in long-term 20; sales growth. These reductions have led to the preparation i 21l of a revised Msy 23, 1980 lead and capacity forecast. 22 i Now were you also involved in the preparation-23 of the original load and capacity forecast? ggg A (Rober) You are referring to the original ( 2+{ 25 i 1980 icac anc capacity fcrecast? ! h U .. C AP.3ACH & MAaSP AL. It:C. - 27 N. LOCKWILLt"N AY:". - M AM MI53 U:5 3. P A. 17112
. , Rabe- -Hecd-cross 447
- )
~l Q Correc t . .
i O .:
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A (lbber) Which is presented in the ces timony i O l 3 and dated October or thereabouts 1979. Yes, I was, i 4 .) Q What specifically do you mean by economic l
- I;
[ conditions haven't changed? Are these economic conditions t 5 between your involvament in the preparation of the origina1 il yj forecast and the revised forecast? x A (Raber) Yes . 3 [. a o [I Q What would these economic conditions be that have chaeged which would lead to the revised forecast? 10 [h A (Raber) The original 1980 forecast, which
- n. ll 3
I n . was actually, prepared during June and July of 1979, was !
"4
- p. 13 J predicated in part on an economic outlook that included a V a 14 1 sicwdown in the econcey in late 1979.
15, By early 1980 the cuelook called for a 16{ recovery from this cLowdown. 4 i Thi3 c id not happen quite that way in ! 17 )
}
18 j actuality. The economy basically slid sideways for the . 1 1p j latter portion of 1979 through the early portion of 1980. ri 20 f The April 1980 forecast was predicated on t Ti 21 an economic outlook as of March 1980. That outlock also 4 22l called for a slowdown in the econemy and our economic - i l c nsultants -- this is Dsts Resources , Inc. -- expressed a 23 j. i n ,i some sentiment for a mild technical recession at that ooint
^ .
(U '" j l l 23) in ties or later in the year, really, but also some sentiment! nexacAcx a MAaswAL. :Nc - = N. LC;xWILLow Av . - HAmetSBURG. PA. 17112
Raber-Hood-cross 458 3
;) for continued mild greuth.
; This ecencaic outicek ass then cabadied in 3
33 the April 1980 forecast. ' 4 ; 4k I would like to point out that the slowdown l
*N b
3j or technical recession, if you will, that is embodied in the
'E 6 1 basis for the April forecast, was a very mild one, and in !
A i 7i point of fact the actual sales for six months beyond the i i I 6i April forecast have ecme in below these forecast levels, { n < r, 9 particularly in the industria1 sector. i 10 l This is incicative of a continuation of 3 t 11 j conservation trends that were noted in the intervening l 12 { months, noted particularly in the intervening months between I 2 ! i 13 ; the time that the original 1980 forecast was prepared and thd i 14 ) time that the April 1980 fore .ast uss prepared. 1 13 - Q Am I correct in understanding your testimony i 16 ) to be that the original forecast in June and July cf 1979 1 : 17 reflected a late 1979 slowdewn with an early 1980 recovery l
+
1 1 IS j frem the slowdown?
?
19 : A (Picer) That is correct. 20j Q And that the March or April forecast of i 21 34 1980 reflected a so-called mild technical recession and i
's 22l continued mild grouth? I think you stated it in that way.
i I A (Raber) At that point in time it was not 23 "l 21 1 clear whether there would in fact be a slowcown or the 25: econocy and both possibilities were offered by our consultants. ii' v ece.ex a ,m sm. e -- s u= cxu.a.v x, - uu m s se u. m. im:
Rcber-Hood-cross 449 il ] 4 I[ Q Then would you say that the retrised budget O 2 ! for igru ef me was ., ore recee icnerz, =enected mere ; J 3l recessionary effects 3 more impact of the recession than did 4 I the original budget prepared in June and July of 1979? 5l A (Raber) Perhaps I should spend just a moment to define what I mean by a recession when I talk about a 6l ; l 7! recession and perhaps more importantly we should eramine 8 uhat is not included in the definition of the term, recession: 9 itself. 10 . My dictionary defines recession as a slowing i 11 i down of commercial and industrial activity. In the econcmic 12i field the generally accepted definition is two consecutive O quarters of negative growth in the real gross national V' 13 14 , product or GITP, and by real GNP I mean, of course, the GNP i 13l as adjusted for inflation. l 16 There is nothing in the term, recession, that. I 17 connotes magnitude of effect or msgnitude of imoact either ! l l 18! on the economy itself or ~ on electricity sales. l ) l l 19 j Recessions can be very mild or they can be { i ! 20 :t rather severe. The slowdown in the economy that was reflected l 21, in both of those forecasts I would characterize as very mild. 22 Their timing was different. , g3 I Q 57ould you say that the original forecast had f O 24! e more = tid ecouomic devetermear reetected in edae thic aid 0 2,[ the ravised forecast? i J * ! .. NREACH & MAR SI<AL. INC. - 27 14. LOCKWtLLOW AVE. - MARRJSSL'# 3. .*A. 17112 i
Raber-Hood-cross 450 3
,k A (Raber) For what specific time period?
~n C 2 Q Well, the original forecast -- they are both ,
f r, are they not, 19807 3l i A (Raber) The forecasts covereil the period 4)
^
5J1980butotherperiodsaswell. In the original forecast f 1979 was still a part of the forecast. 6l ., Q I am focusing particularly and specifically 7l3 g jj on the test year, the 12 months ended 3-31-81, so I am saying, 9l did the original forecast for sales reflect less in the way i f ec n mi e nditions , downturn in economic conditions, than 10 l g)didtherevisedbudget?
.' What 1 am. referring to, it seems for 2l 13 j Metropolitan Edison the revised budget shows a drop in h kilowatt hour sales from the original budget forecast of 14 L
15; 411 million kilowatt hours. 16 ll 1
,g (Transcript continuec on next page.)
l 18 i 19 i 20l a ' 21! 22 d d a1 - y
!g
'e i V !
23 > l
?to;tacA:!! & M A t $M AL, f MC. - 3r? !!. LOCXWtLLOW AVI. - H A RTt15B'J R G. PA. 171?
' 451 Raber-Hood-cross a i t
If 1 A (Raber) Yes, let me go back and answer your
s 2 lfirst question, if I trcy. Let me characterize the test year l l
3 !by the calendar year 1980 since I happen to have the numbers 4 conveniently available for the calendar year. The GMP 5 f forecast for the calendar year 1980 was actually slightly 5 ;f
! higher in the revised April 1980 forecast basis than in tte 7Isarlier one. The kilowatt hour salas obtained from the 3 amount forecast are,instead lower than what was obtained from
?ithe original 1980 forecast because of conservation trends 10 tcat were noted in each of the customer classes. These !
13 ) trends really became markedly apparent in the intervening I i 12 jmonths, ths 9 months or so between the two forecasts and if i
. .,' i e 3 - you look at the sales for those 9 months, you will find that U j 14 ) they are significantly below the levels forecast back in j
' l 13 $ July of 1979. l 16 i Q Then you are saying that concervation i
17,l measures, as well as econcaic conditions were considered in ' 10jyourpreparationoftherevisedbudgetvis-a-vis
- i ma
- '.your original forecast? :
AC
- i' A (Rchar) Yes, d
l 21 ). Q I would like you to r2far now to Exhibit I-27 t l Also please refer to C-1, Mr. Carter's exhibit. l 22 -{; for Met-Ed. , I 1 23 Referring new to paga 3 of Exhibit 1 27. p and page 2 of C-1, column number 5 on page 2 of C-1, could j w l 23 ) you explain tha drop in residential zagavatt hour sales from L nounu=u a u.usau. ma. - n w u=cwn.uw n - n nmwm. n. ,m:
, -_,y
1 Raber-Hood-cross 452
) I 1l2,663,782 shown for 1981 on I-27, page 3, 2,578,694 megawatt (g m r- !
( ? 2 Sl hours of sales for the revised budget
! 1 3i A (Raber) I am sorry. The numbcrs that you i
4l are quoting from page 3 of 3 of I-27 are the sum of the 5j top five numbers? 6[ 4 Q Yes, per residential. 7 A (Rabor) And the two years that you are S f comparing here, c!', Q I am comparing the original budget and the 10 v' sed budget for 1981, 3/31/81. l A (Raber) Could you tell me again where on l i 11 l 12 l C-1 you are looking? :g 13 On C-1 I am also looking on page 2 and I Q I 14 f am looking under column 5. The first 5 lines would be the l 15 total residential appearing on line number 6 at 2.578 16 - magawaet hours. 17 l) A (Raber) In effect you are asking-- 1 I8 Q I am asking could you explain the drop of 19 megawatt hour sales from the original budget to the revisad 20 ' budget? i I 21i A (Raber) Surely. 22l Q And what pertion of that would be S 23 ~ attributed to conservation? g 2-1 A (Raber)Ibelievemostofthedropisduetoj
- , l These are trends that were bserved in 25]conservationtrends.
N MOhMB ACH & MA.15 MAL. INC. - 27 N. LOCKWILLOW A V E. - H AR RISSUR G. P A. 17112
Rober-Hood-cross 453 y- t 1l late 1979 through the first quarter of 1980 and which are O 2; captured in the short_cerm forecast methodo1ogy by a ro111ng 1 3 javerage technique. , R 4j Q Was it possible for you to separate the drop 3i in megawatt hour sales attributable to conservation as i 6j opposed to the drop attributable to economic conditions?
?j A (Raber) No. I have no way to do that. I 8j can only observe the historic trends and project them into the 9 future, i
10 Q Well, referring to the gene.ral service 11 i customer category on I-27, page 3 of 3, the 1981 where you i 12 ; see the number 3.367 million magawatt hour sales-and this
- 1) drops for the revised, forecast, revised budo,et by about
! r l 14 ! 200,000 megawatt hours and if you add on C-1, page 2, 15 h; column 5, the amounts or the numbers on lines 7 through 11, ; i 1 16 t we find there is a revised budget megawatt hour sales of ; I 17 f 3.60 million, approxircately. Would you say that this , 18 ; 200,000 drop in megawatt hour sales is also attributable to l 19 conservation? j 20}j A (Rsber) These customers are primarily i i 31] cccmercial and industrial customers and the answer to your d
;2 j question is yes. There are consorvatica trands 'noted in both l.
23 categories. O 24.i a would your exg1enecion be the eeme for the
- ] .
23 drop in megawatt hour sales for the customer classes LP and DP.
-I I "OHROACII & MAP.SHAL. INC. - 2"/ !L LOCKWILLOW 4YC - MARRiSEUAG. ?A. 17110 l .
P.aber-Hood-cross 454 1 9 4 i 1i between the original budget and the revised? Would that also i p s 3
~ qbe due to conservatica?
. h' i
3)a A (Raber) This is the area in which t?.e 4 economic slow-down would probably be most visable. e!
, Q So you are saying that the drop in megawatt 5 hour sales for LP and DP customers would not be due to 7 conservation mesaures, but rather to the economic slow-down?
8 A (Raber) Most likely, i t 9: Q Thank you very much. Now referring back to 10 ' my quotation on page 6, you ha. stated that economic 11 conditions have changed which resulted in reduced, rear ' 12 f term sales. What specific period of time are you referring tc
.O 13 {t for yournear term sales? Are you referring to the test year 14' 3/31/81?
15 ! A (Raber) That would be a good characterization, 10 yes. Actually, our short-term forecast e.7tends two or t tree i l 17 h, years into the future from whatever point in time we make it. 18 Then does this extend further than the test Q i 19 , year? I am trying to hunt in what period of time your I
; 4 20: reduced near term sales are for. !
21 A (Raber) I believe that the amount forecast 21! will show lower sales for all periods of time that are 23 ccm:non to both that forecast and the previous one, the one s . 24 ll that was made in .Iuly of 1979. .
. y
--g C Well, both forecasts were for the year ended p Q d resaues a :.an.ut. mc. - u rc 'ca ua. ow avt. - muisaunc. n. im:
. , Rabar-Hood-crocs 455
, i i i 1l12/31/81, were they not?- !
i i
- 3. A (Raber) That period of time ia covered b',
3I chose forecasts. 4 - Q Is a larger time period covered by some other 5i forecast that was submitted? They are limited to that period 6l of time, are they not? I was under the impression that the 7 forecast was for the test year ended 3/31/81. GJ A (Raber) For certain specified purposes, that
~
- 9) is true. We do forecast out for 20 years for other purposes.
I 10 i ] Q What was the revised forec.tst for the May 23, f - 11 j1980 load and capacity? Was that foreca.sc extended beyond !
- i ;
12 i the test year end 3/31/817 ' d 13 A (Raber) In terms of megawatt hour sales? 14 q Q In terms of sales, yes, j i l 15 l! A (Raber) ves, the forecast did extend beycad ;
,6 16 N thst. ,
l !i l 17 3 Q How far beyond that period did it extend? ; , c i i 4 E8 ij A (Raber) Detailed sales were _. ;ecast through ' ' N '
'9Itheendof1982.
i ' 2C [ Q New were the conditions that were considered 21, in that forecast for the 12 s:onths ended 3/31/S1, are they , ! n 22 ] expected to continus? Are they incorporated in that forecast i I U d to continue until 1982, the date you just specified?
- t 2-+ A (Raber) The period beyond the test yaar and
?i on into 1982 wss anci::1 pated to continue a very sluggish ,
. e d Mmm3 ACH & lJA.13H AL. f ttC. *7 !!.* LOCXWILLOV &VL" AAP9135Uft G ?A. 17112
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Raber-Hood-cross 456
- 1 growth trend that was projected to start earlier some time
(_ 2 [within the test year. lg W
/
3l : Q Then are you saying that the econcmic 4; conditions will be someuhat different as incorporated in the i 5 forecast after the test year, that although they might change 6 !. soc:ewhere in the middle of tbc test year, they are e:cpected 5 7{tocontinueafterthetestyearinto1982andtheyarenot 8 reflected lk in the entire test year for March 31, 19817 9 A (Raber) On an annual basis there is 10 [ expected to be very modest growth in the economy on a year-11 lt to-year basis. I 12 ; Q I don't think that answers it. The question
., i 13 t is are the economic conditions that were incorporated in the I
14 forecast for the 12 months ended 3/31/81 the same conditions 15 l that will be in that forecast post 3/31/81 and you seemed l
- 16 j to have indicated a moment ago in your testimony that some of l
P 1 17 f the conditions will change in the middle of 1981, in the i 10 lmiddle of the test year and will continue on to 1982, is that 19 ; 3o7 20[ A (Raber) There is a sluggish growth trend 21' projected beyond the test year, i. 22 Q Could you tell me whether the revised load 23 I and capacity forecast of May 23rd,1980 was the same one 1 ; 24 used by Mr. Carter in the development of normalized budget h 5.5 ) operating revenues ? I think that is Exhibit B-1, Par: A.
? . caaucu a unsm. me. - a u. i.oexwuow m. - saamissuno. et. ivii
Rabtr-Hood-cross 457 l Il; Do you know the ansucr.to that question? O 2l A (Raber).1 em noe eure. Q Well, your testimony states at page 6 that 3l 4l this revised load and capacity. forecast, May 23, 1980 forecast,
- i 5 j was made available to Mr. Carter. Are you saying you don't i
0 know Mr. Carter used it? 7 7 A (Rabeg) I cannot testify that he used it. 8[Itwasmadeavailah_ctohim. 9 Q Okay. Now have you submitted a ecpy of this l 10 f revised May 23, 1980 forecast to the Cortmission? 11 i A (Raber) I think the answer to that question . I 12 i is yes, but I did not personally send the Commission a copy l t O 2 loethetoaa==acveciev ro=ee se aocu eae-t 14 l Q I would like to ask one of the attorneys i 15l whether or not this revised forecast has been submitted. i- . 16 f Staff is unable to locate it. I 17 MR. SELTZER: I am not aware that there is 1 r. 8 hlany submission beyond what is in tha various exhibits and i "s .lrtha testimony. d 20 M1. SUFFIAN: Could you provide that for us?
}
l
'lf r THE WITNESS: Certainly. Pieces of it are l
22! in here in terms of the loading capacity tables. They are 23 , submitted. They are submitted as exhibits. l l 24: MR. SUFFIAN: Quite frankly, we are having a , 13jbitofdifficultyseparatingtheoriginalforacastandthe d ?.10lf RSACH a MAM S:ML. INC. ~ f.7 fC ".')OCVILLOW AVE + " H A MIS B UR G< **A- 17?12
O -
- Raber-Hood-cross 458 h
10 revised and that is why we are specifically requesting the g 2 revised from you now. We haven't been able to locate that. 3 3 MR. SELTZER: If you take a look at I-24. 4L THE WITNESS: Perhaps I can assist you by f 5i distinguishing from the two in the exhibits in the pre-filed l 6 f testimony. I believe that all erhibits prior to Exhibit I-23 73pertaintotheOctober1979loadandcapacityforecast, 0l I exhibits I-23, I-24, I-25 and I-26 are for the May 1980 lead f 9 and capacity forecast. 10 il MR. SUFFIAN: Thank you very much, Mr. Raber. r 11 l BY MR. SUFFIAN: 0 12 Q I would like to refer again to Exhibit C-1, g 13 page 2 of 3, that you were looking at a few moments ago for 14 { Met-Ed. 15I A (Raber) May I ask you if you still want the 15I load and forecast document? 17 [ Q I don't think we will need that. I think we 18 ' will refer to what you just referenced us. t
..i l --~, Now again referring to column number 5, 20 h budgeted usage and megawatt hours, on line 25, total company 4
21 7,889,171 megawatt hours. Was this the total revised sales 22 '; figure from your revised forecast? Is that what this reflects ? 33l A (Raber) I cm sorry. I don't know precisely g ( 24 j. how Mr. Carter got to that number; C i 25j MR. SUFFIAN: Your Honor, that is all the
'tOMR3ACH a M Ar7 5H %L. IMC. - 27 N. LOCKWti.l.OW AVE." H AR rtlS B U R G. PA. 1711.*.
l Raber-Hood-cross 459 i i i 1 ! cross-eramination Trial Staff has of Mr. Raber. 3 However, we l l 8 V 3fuculdliketogoofftherecordandmakeadatarequestto 5 I 3l the company with Your Honor's permission. 4[ t THE ADMINISTRATIVE LAW JUDGE: You don't want 6j to make it on the record? 6$ MR. SUFFIAN: We prefer to make it off the
't 7 frecord. It is a bit complicated.
8( THE ADMINISTRATIVE IAW JUDGE: Very well. 9[ (Whereupon, an off the record discussion was 10 fheld.) 11 MR. SUFFIAN: I believo off the record, l 12 l Staff discussed with the company a data request and I would i 13 l like to summarize that data request at this time on the recordI. J . 14 '. We are requesting the company, the respondantt, l 15: to provide us for, Penelee with a reconciliation of the 16 j, original budgeted sales shown on Exilibit I-27 vith revised i,1 17 ) budgeted sales used by Mr. Carter shown on Exhibit C-1 and 3 { 18 l! we are also asking raspondant to reconci.le this difference t i 19{with the megawatt hour sales shown in Exhibit 3-1. Part 8, 20 page [1 3. Thank you, Your Honor. 31 THE ADMINISTRATIVE IAW JUDGE: Anything i . 22' further? i j
; MR. SUFFIAN: No, Your Honor. j i
24, THE AIMINISTFATIVE IAW JUDGE: Let's take a ! O 15: ten minute recess. i l M OpiR3ACM a ETAR 3 MAL, IMC. - 27 Nc LOCKWILL 3W AVE. - H ArtRisa V9 G, A. 17112
Raber-Hood-cross 460 L. (. 1[, 2 i BY IE., BARASCH: MARVIN RABER and WALTER T. HOOD, resumed. i e l l 3 '{ Q Good afternoon, Mr. Raber. I am David 4 1 4
- Larasch and I am with the Consumer Advocate office.
0 5f A (Raber) Good afternoon. t 6f Q A couple questions I want to ask you follow-
'i.
7 ;] ing up on some cross that Mr. Suffian was doing, r 3! As I understand it, you were comparing an I. 9 !! average forecast with an April,1980 forecast and you ll 10 $ described that forecast as showing basically a lower set i. 11 of sales levels for a period of time as opposed to the 12 original forecast, do you recall that, sir? i O 13 { A (Raber) Yes. L ! Q I thought, to summnrize, you were basically 14 [ 15 saying there were two elements that were probably responsible 161 for the differences between the original forecast and the n 17 new forecast. One would be a further greater recognition , , p 18 i of conservation impacts and the other being the impact of
- 19) the econcaic slowdown. Would you agree with chat?
h 20 d A (Raber) Let me recharacterize that just a b 21; ?.ittle bit. When we started to do the April 1980 forecast 22 we had actual sales data for a period of about nine months 23 to compare with the forecast that had been prepared in July
.h i
V 24 ) of 1979. 3 il
- 25) Q I thought it was October 1979.
a _.__.m_.___._._.. ,,,,,
i Rabet-Hood-cross 461 n ' 1 A (Raber) The publication date was October. O 2 ) The forecast was actually prepared in June and July. Q Okay, fine. 3f . i 4l A (Raber) So I have nine months of data and 5 those data show that the forecast was too high, in spite of 6l the fact that the economic slowdown that was implicit in the ! l l I 7l July 1979 forecast did not materialize -- r Not at that time but rather at a later point 8f Q i 9j in time? Io j A What I am trying to point out la that that 11 is pretty solid evidence of conservation trends, 12 - Q Okay, but I just want to pursue that one i 13 point. Enen you say it did not materialize, what you are 14 l saying is it did not materialize at the time period that 15 ; you originally expected but rather was delayed by several 16l months. 17, A (Raber) In March the outlook at that point 18i. in time for the future economic performance was that at 19 worse there would be a mild -- call it slcwdcwn, call it a 20 3 tectinical recession -- at best there would be no such thing, 21, there would be a continuation of 1.eways movement, perhaps, That was che think4ng that was 22; uith very alow growth. , t 23 embodied in the April 1980 forecast. , a , 24! I would like to point out also that the f
's :! ,
It is lower than the 1 2c,: fl April 1980 forecast is also too h'gh.
- ,:C:4CBA
- CH $ MARSHAL. IMO. - :'" 24. LOG:< WILLOW AV E. - !! A 8t alSS U R G. .*A. 17t12
. . I Raber-Hood-cross 462 d i 4 !
; ;i July 1979 forecast but still too high.
a It is above the C 2 (i actuals that have accun.ulated for afx months for which I l It 3 have data . This is through September. 4 Q I believe you already testified to that. 5; BY THE ADMINISTRATIVE LAW JUDGE: e s 6; , Q What about the GNP for that period, was 7 that stationary? Did that increase? 3 0 j! A (Raber) Do you mean the gross national 1 9I product? L 1' From July, yes. 10 h Q 3
.11 i
A (Raber) No, there was a rather dramatic - 12 drop in the second quarter of 1980. That dramatic drop 13 l was not foreseen in March even though March was immediately l 14l prior to the time when that drop occurred and that dramatic l 13' drop has not been incorporated int 5 the April forecast. 16 [ BY MR. BARASCH: t , 17 i Q Nut into the April forecast but I believe is ; you did tesC.fy -- 19 ' MR. BARASCH: I am sorry, Judge, were you 20[ going to pursue that? i 21j THE AEffD1LSTRATIVE LAW JUDGE: No, go ahead, that is all right. 22j 23 BY MR. BARASCH: , 2;'. 9 Q I believe you testified in the six months > b !! { 25' since the April 1980 forecast you have seen rather marked
'I 7f 0Ni13ACM a MAR SMA!.. t!!C. - C R i.&Cr.W6LLOW AVE. - H A RRIS BUrt G. isA. 17112 W
Rober-Hood-cros:: 463 8 i f sales . levels below your forecast level, I believe that is 2 ] what ycu testified to just now and also in response to Mr. Suffian, is that correct? 3 . 4-g A (Raber) That is correct. 9 3 j Q And I believe what you have said is that to d explain that difference we could lock to -- and I may be 7 overly simplifying matters -- we could 1cok to conservation
,9 j impact in the residential and ccmmercial sectors and the 9 impact of a business sicwdown in the industrial sector, 10 LP, is that what you testified to?
I i A (Raber) Substantially, yes. 11 l i 12 ' Q I can take then from that and state logically that if we were to factor out the impact of the business slow-Q 13 14 !, down on your industrial customers , however that might be 15 quantified, that we would see a smaller disparity between 16 actual and budget than we are seeing at the present time? I 171- It is kind of a logically deductive statement is what I am I ' l 18, trying to ask as a question. i 19 A (Raber) You are suggesting that at least on 20 l' a hypothetical basis if one could factor out the impact of 21 the observed slowdoan relative to the slowdown that was i 22; implied in the basis for the forecast, one might get " actual" 23 , sales that were closer to what had been forecast, and I . y .3uppose on a hypothetica?. basis that would be correct. l 25 !! Q Eut even more than a hypothetical basis, on ! d i
" I MCH3 BACH to M A pts?i AL, !?tC. - 27 N. f.@C;OP.%f.CW AVE. - 11 A RRESS'JR 3. PA. 17112 l
Raber-Hood-crocs 464 G 1 e 1j a logical basis isn't that necessarily the result? If you (m i 3y have tuo elecents tha: make up the differance between your
.g I
3 "idget and your actual and they both have a negative or 4 depressing effect upon sales if you take one out, isn' t it 5 ! logically necessary that ycu are going to end up closer to 1 I 1 6 ) your budgeted level, to your forecasted level I should say? I 73 A (Raber) Qualitatively, yes . 4 Q Tha t is fine. Then there was anocher matter 8) 9, that you were discussing with Mr. Suffian. I believe Mr. In j Suffian was asking you about changes of conditions that were 1 11 cccurring during the test year or in the midst of the future 12 test year in this case and that these factors were expected 13 , not to continue after the end of the test year. He was askin 14 you a question along those lines. Do you remember that, sir? A (Raber) I remember the line of questioning. 13 ) i
- 15) Q And I believe you answer to him was somethingl i
17 j that, yes, when we lock ahead we will see a period of sluggish
+
13 j growth or something like that -- do you remember that answer, 1 4 l 19 j sir? a 20 l A (Raber) Yes. Q Now can I deduce from that answer that what 31) 4 22 [j you are basically saying is that sluggish growth in the I 23 ' future is semething more than the growth levels indicated ; i 24 in the test year? That sluggish is a more optimistic phrase I l 25] than the one you might use to describe the growth patterns '
- mu m.mes a rmsut.. me. - n ri. acuvnu.sw ave. - mmsm s. n
. . Enbar-nood-cross 4.65 that sctually did occur during the test year or expected to 1i Q
occur during the futura test year? 3 A (Raber) Let me answer that question.by 4 referring to some projections of the gross national product t 3; and cimply using that to characterize the economy. t 6!: The outlock as seen today is for a gross 7 caci nal product in calendar 1980 that is on the order of 1 percent below the level that had been foresoen back in af . pl March when ue were preparing for the April forecas t. 10 The same kind of thing holds true for 1981. 11 The current outlook is for a gross national 12 f Product that is perhapc 1.8 percent below the level that had 1 O 23 been f raseen back in M r h of this year. 14 [ All in all, it is not likely that the 15{ economic activity in 1980 or in 1981, and therefore by l I 16; implication in the normalized test year, will be as high 17 l' as had been implied in the April 1980 forecast. Q I am having trouble. I don't think the 18 l 19i answer is responsive to the question. Maybe that is because t 20 the question was not clear. But I don't think you have 21 answered the question. 22 ( A (Raber) Please rastste your question. I. 23 ; Q You referred to a prediction for sluggish , o,
] ~
y j growth characterizations, I assume mm sales in these tuo il f 23 J GPU service territories, in the period of time after the t aonseAca a M4nswe.: anc. - ? n. Lacicwn Lew Av . - HAMRWBURG. PA. 171f2
Raber-IIcod-crosc 466
't l end of the future cest year. What I am trying to find cut a s i "j iW is , when you characterize something as bein;; marked by C 2 i
3j sluggish growth, is that a higher or lower rate of grouth 4, than the growth that actually was experienced during the n 5! future test year or is expected to be experienced in the il future test year? 6,! 4 I am sorry, but I missed something A (Raber) 7) g; in the latter part of that. i Q Let me try stating it another way. We could
- 9) i 1 k at the various exhibits that you are sponsoring in this 10 :
O g proceeding and come up with a demand and KWH growth rate for the year marked by the two end points of March 31, 1980 and 12 l 13 A March 31, 1981 and we would come up with a rate. I believe I y ;- in the course of your cross-examination by Mr. Suffian you n were asked whether or not some of the events that contributegl 15 4 16g c the experience in the futura test year would be expected
-1 to continue into the future and your response to that 17 i
18 question was -- I am doing this from memory -- no, we can 19 expect to see sluggish growth in the period of time after 20jI the test year. 21, 0 What I am trying to find out is, when we ( I start looking at 1982 versus 1981, 1983 versus 1982, are ue 22 ' 23 3 ing to see growth rates that are higher or lower than the j O difference between the end of the historic test year and the , 21h b d end of the future test year in this case? i l 25 ] 1 I d YCN.7DACH & man 5HAL. INC. - 27 N.1.CCKY/lLLOW AVE. ~ N ARRL33 U RG, ?A. 47110
9 e i; I em trfing to understand Mhat you mean by
'(~
,,) the uora, 31uggw. .n.
n I A (Raber) The 3rowth rate for Penelee sales, 3 j
.;) for example, for the test year ending March 1980 relative to 5 the test year ending March 1979 I have as about 1.3 percent, i
6 if The corresponding number for tha test year
? anding 1981 relative to the test year ending 1980 new is G j! 2.3 percent. ,
9i 3 Q Moving ahead, j 1 4 i 10 l A (Raber) Moving ahead one more year it is
;3, y close to 4 percent.
J 12 Q And moving beyond that? 13 l A (Raber) I don't have that figure in front l l
- t
.t4 l]ofce.
13 [ Q But we can expect it to continue' in the l
- 15 l vicinity of 4 percent or not? ;
! l I 17 A (Raber) My guess is that it will not, partly ' i is !; because the master planning impact shculd be seen by then. d Q Turn your attention, please, co your Exhibit 19 ] 20 j I-15, page 1. l i 21 i THE Id211NISTRATIVE IAU JUrGE: W~nich erhibit?; i 22 1% 3ARASG: It is the same a::hibit in both ; I'
?.~. , cases, lour Honor, so we can refer to either one.
24 EY MR. MMSCH: 25 ', Q There you provided a Septemaer 1979 uinter tic::5.?AO!4 *n MAR SFf f.t.. W*0. - 27 it. '.30;; .*lt.'.3W N/C.
- P AJMt S a itt1 57.. 171?:
Rober-Hood-cross 46'S 1 1 1 1I load capacity forecast for all the GPU subsidiaries, right?
% :1 i A (Rabor) That is correct.
e 1 3 Q And there it shows Forked River coming on 4; . line in 1986, and as I understand your ancuer to a question 5 t earlier today that is no longer a valid assumption. n d 6' A (Raber) That is correct. 4 7 Q Isn't it true that your New Jersey affiliate Gj has petitioned the New Jersey Public Service Commission to 9t abandon Forked River? 10 : A (Raber) That is correct. I am hesitant 11 i over the use of the word, abandon. Let's simply interpret 12 ; it loosely and I will accept it. ( 13 :; Q That is fair enough, and as I understood a 14 [ your testimony, there is some consideration now as to' how 15 the company might attempt to write that off or amortize it 16 off against the books of the company, is that correcc? l l 8 17 ij A (Raber) That is an issue in the current E I S ,' proceedings. 19 [ Q But it is one in which the Board of 20-;f Directors at least in principle has decided has to be done? A (Raber) Ye's. 21'. 1 22 y Q If you will turn your attention to I-24, l 231 there ue are looking at your May 23, 1980 load and capacity I i
.4] forecast and there I see that no longer is reflected Forked G
(- ; 73 g River plant, correct? MmIRDACH (4 M AR SH 4 L. IM O. - 0? ?L 1,0 tKWILt. 2'.V AVE. - HA RRISStJRG PA. 17f12
Za'cer-Hood-crose h I
;j A (P. char) That is correct, i 3 j Q I clao notice ':hst an I-24 is rsflected a !
2,'i
] firm purchase of 1,000 magawatts for Jersey Central Power and 3 .? .
Light in December of 1934. I wonder if you could tell me 4 a l uhat that is all about. IThere e is all tha t coming fren and , d 6 h what is the identity of it? 4
,, q A (Raber) That is intended to cortray a firm g j purchase from Ontario Hydro to be obtained through an under-l 9 ? water cable under Lake Erie.
7g Q Has anything occurred tcward bringing that g i power in yet? Eas any construction 'scarted? Where are we l in tha t? 12 E p g A (Raber) No construction has begun. The s A [ negotiations with Ontario Hydro are still in progress and g I believe certain licensing activities are in progress.
)
g} Q Now looking at both I-15 and I-24, in both l p
.7 of these load and capecity forecasts the company has included!
, . , . tne capacity from TMI-1 and TMI-2, that is correct, isn't it?j v4 ,
3e (
~4 A (Raber) Those two units are retained on the i i
20 j r 11s of availchle capacity, yes. , i Q' Eave you developed a forecast that uculd oil i
,,1
.a 3
produce a profile for the company under the assumption that 1
,,, E TMI-2 never returnod to service? :
~ .l, i 4 A (3aber) I an not aura what you mean by a
(], *} , g l forecast that I would have preparad. What cpecifically are !
. m A :n a :tA mu.t. m :. - A? ' . Le .n t" L W A V . - MAnRiscusto. PA. 17112 i - _ . . , , , _ _ _ . , _ . - -.- -_, - . . _ . __ _.._._ _ _._. -._m
Raher-Hood-cresc $70
- l i Ifyoulookingfor? l I' ; Q '4 hat has tne ccapany done in the way of llI 3 j planning or projecting their needs cut into ,the future on l 4 ) the assumption that IMI-2 does not come back on line?
l A 5 A (Raber) The needs of the company are better 6 characterized by the demand forecast. If IMI-2 were to be 7 l not available ta meet these needs at some point in the future' i , 2 ;q then some substitute capacity would clearly be needed.
- 9) Q On a simplistic level, would it be fair to I l
i to say that you could kind of take your I-24 and just subtract 1 11 800 megawatts out or 880 megawatts out? 12 : A (Raber) That would be one way to do it. ( 13 ] Q Our of ycur installed capacity? i4 F l 14 j A (Raber) That is correct, tha t would be one 15]waytodoit. , 4 16 j Q If such a hypothetical assumption were made,
. I 17 b't uculdn't the absence of some 800 to 900 megawatts of ecwer !
I 181 of TMI-2 cause GPU to have to revise its ulans in terms of i I 19 ; meeting the overall demand needs of the systes? 4 20 ) A (Raber) Substitute capacity might have to 1 21j be planned for depending someuhat on the degree of success e 22 in the easter plan activities. d i 25 ' Q Could it pcssibly have the impact of - E
;_, citar:ng Ic -service da tes r s cr.2 of their facilities
- s. ;
;l that GPU is presently attempt ing to bring on line in the nextj
- x ,=a:a 1 .ww . m:. - :: tece :t w .v - :m.aw = an n- 1:v= '
. . . . . ._ _ y Raber-Head-cros3 471 3
1 ! five to ten years? 8 2 A (Raber) If you are thinking should these in-3l ! service dates be moved closer to the. present in time, I have 1 4 k to answer that question with a no, because the present in-I 5' service dates for major capacity units are constrained by 6;- financing considerations. 7; Should those be relieved, then perhaps the i i 8; answer to your question would be yes. 9i Q Thank you. As I understand it, on page 2 j .. 10 ; of your testimony there is a suggestien that prudent planning 11 l should assuma that TMI-2 may not return. I guess in k'eeping 12 l with that expression, that position, do you believe that it P is incumbent upon the company to at the present time begin V 13 pl l 14 ' making provisions for meeting your capacity needs without i 15; TdI-2 ? 16 ! A (Raber) I believe it would be prudent to 17 ;' incorporate such a scenario in our planning, but let me 18, point out that I have testified a few minutes ago that k 19 ! Seward-7 has been delayed relative to the information that 20 y is presented in the pre-filed testimony. 21 i Q Yes, I understand thet. 22 ! A (Raber) We may lay plans but there is no 23; ccchanism of implementing these pisns without regulatory Ov 24: recosnition of the need to imgrement those prees, both in d 25 g a financial sense, a rate-making sense, and in a permitting MOMRS ACM & MAR $tl AL. IMO. - 27 *!. LGCKWILLMV AVZ. " H ARRISCURG. PA. 17tt2
1
~
472 i Rober-Hood-cress '
. or licensing sense. ;
4 i Both kinds of support from the regulatory agencies are required. , T
. Q I wonder if you could define for me what
+t i
I load factor means when we are talking about generation, a a: . c mp ny s generation plant. 6 9
,.' A (Raber) Are you referring to the ratio of 3; net system requirements, megawatt hours generated during a 9; year relative to what could be generated, given -- suppose 7 * *
- 7" * # " "
' O,I Q I think the definition you were starting to g !l give me, sir, was a definition of capacity factor. I think what I am interested in talking to you about, I believe. is 13
! the factor that would express the relationship between 14 :
. [ average demand and peak demand.
to Are you familiar with that g concept, sir? l ,d A (Raber) I think I can visualize what you are a
, ,t ij 18 8#Y "E' 7*8' il 19 j MR. SELTZER! If Your Honor please, I am 1
l 20 {] perhaps a little bit confused.It seems to me that this g pretty clearly may be an area that is not within Mr. Raber's-- okay. } l ,2 ;, 23 j BY MR. BARASCH:
- Q Well, are you fcmiliar with the term, load
; . l
.,, factor? I reo;meAcH ; *4 Ap.3 MAL, anc. - c7 f t. t.ccx*'nLt.3W AVC. - H A R it t s s V M G. P A. 17 f 12 -
. , Paber-Hood-cross 473 1 {l A (Raber) Yes, y
O 2f a a or is eaat e v rase . a 1 cm tsias cut oz cocte==7 3 it A (Raber) Yes, I am familiar with it,
- 4. f Q The way I described it, does that totch your 5; understanding of what that word means ?
6I A (Raber) As I understand what you have said, i 7[ you are looking ae the ratio of averaga demand expressed in i s! megswatts, this is a time average demand, over say a period i 9l of a year, relative to peak decand -- 10 , Q For the system? i A (Raber) For the syctem. 11 l 12 I Q Fine. Nou if we assuced the load factor as Q 13 so defined for Met-Ed and Penelec, for each of thea. is not 14; getting uorse over the passage of time, wouldn't it be true 15 , that IGai consumption would grow at a t least the same rate 16 lh as 131 demand grows?
?
17 7 A (Raber) It should be. 18 3 n 19 (Transcript continues on next page.) 20i 1 21' 22 .j 23- t
] '
i G ; Vv y' !j bh 4 : I
'J o Mit ACH S rtaa sHAL. !NC. - Of N. L3 K7/RLOV/ WE. - HARMissu?c. PA. 17112 I
n e w,_ua.na.cn n., - 4 74 v i
~.
Q Mou tcha a lock over at I-24 again, g / 3 3 please, which as I understand, reprcesnes your lat2st load I s E- ) and capacity forscast. Would you accept, subj ect to che h, j
- o. ,
I 4 g that I-24 shows peak load grouth for Penclce at a growth 5* rate of 2.9 percent in 1981 versus 1980 and 7.4 percent 6 growth between 1982 and 19817 Does that sound right to Y] you, sir? ; 8 A (Raber) You are looking now on paga 1 i 91 of 6 of that e:chibit? 1 1 i f 10 30 Q That is correct. l t c i 11 ; A (Raber) Could you tell me which numbera 12 s you are using to get those? g 13 Wall, we show a sun =cr load for Penelec of ( 1 Q 14 j 1760 versus a beginning number of 1710 which we compute at 13l at a rate of 2.9 percent, and in 1982 a figure of 1890 : 1 Id versus the 1760 or 7.4 percent. I am j ust ask ing you to , 1 i
'?! accept if those numbert are correct. l I
E] A (Raber) Subject to verification, I will ' 1 l 19 i accept them. l i 20i Q Okay. The 1710 represents your projaetad I l ! 21 ., eumer lor.d for the summer of 1980, is that correct? 3 i . L2 J A (Raber) That is correct. l 4 ; 22 I
~
Q Mce just tu~n the ques 2 ion lightly and h 100k at the M9t-Ed figur33 Shown th?r3. W0uld Jou nCCOps 3 S'IDj ec t to ch3ck, that the 1931 sunmar peak that was 3.5 percen:
. c:c:.ics s r u sana .. me. - O' n. Lc ceviLL; z zw' - u"t3nue. ?^ 17: 52
e Raber-Hood-Cross 473
- \
4 1' above the 1980 peak and that the 1982 peak is 4.1 percent 1
/ 2 above the 1981 peak? l A (Raber) Subject to verification, I will 3l 4j accept that.
3 Q Would you turn your attention to I-23, 6 please? Would you accept, subject to check, that the 7; April 1980 forecest of net system requirements in Gigawatt i G l} hours shows Met-Ed growing by 4 percent in 1981 and Penelec t 9 growing by 3.9 percent in the same time? J 10 A (Raber) I will accept that, too, subject to, 21)a verification. 12 h Q Now, from your understanding of the forecasc 13 and planning neau of these companies, particularly as 14 i shown on I-24, if IMI-2 does not return to service, would 15l l1 I be correct that Penelec would still' have a pos'tive 16k uinter reserve margin at least through 1988, 1989 under your, i i 17 [4 May 1980 forecast? 18i A (Raber) You are skipping around a bit. l 15' l The nudeers that we were reading before are from the summer 1 20.3 j load capacity forecast and now you cra addressing -- 4 21i Q I am sorry. Let 5 s stay with summer. I N 22 misspoke. Just going back to the firs age of I-24, 23 ] A - (Raber) The percent serven are indicatad; l ! i e 24) right on that table. l ( -, ,f, I 25!! Q Yes, I understand, and as I understand it !
'l ne:nmn a .:.usm. me. - e m scer.w.aw uz. - man,savne,. u.. m i, I
,- .- Raber-Ik:cd-cross _ _
475 t 1 l you would still have a positive reserve mergin without
/
;'. j TMI-2 until we got out to about 1988, 1989? .
i 31 - A (Raber) That is possibly true for the 4; sumer peak years. l 3k Q Fina, but on the other hand, looking at 4 l 5 Met-Ed numbers, that would hardly be the case, vould it? -
? In fact, they probably don't, excluding TMI-2, don't have 3' enough capacity at the present time? i i
9i A (Raber) I believe that is correct. If 10 you give me a moment, I would like to verify something. That 11 is correct. Met-Ed would be short of capacity in the late u 1980's. O 13 , Q Met-Ed? (' : 14 A (Raber) Excuse me, but I thought you 15 had asked me if Met-Ed would in effect be short of capacity l 15 in the late 1980's, i 17 Q I asked you if the situation is so much ! l l l 13 worse they would be short of the capacity at the present thae; I 19 3 without THI-2. - i lo '- A (Raber) Without TMI-2, they would be.
,\
t
'll Q Okay, fine, and alco, as I undcratand your!
12 l present forecast, that forecast does not call for Met-Ed d i 22 adding any capacity of its own until May of 1991. Am I g 24 , resding these exhibits correctly? l: U ^ I .
, A (Raber) You are now back in I-241 1
- ,=un=:en = w.su.:.. na - u u. ocesw =: w=. - - =s z u n a. .=:- nu:
Raber-Hood-cross 477 l 1i Q Yes, from which I don't think I have m ! Q l
; ;j, strayed.
3 $ A (Rabor) That is correct. ,The first h
- 4. [ capacity addition for Met-Ed is shown in the year 199.1.
m E 5t Q What is that capacity? L 5[ A (Raber) It is a r1rtial ownership of a ' 7 coal unit. 8 Q We don't even have a name for that plant 9lyet, do we? 10 A (Raber) That is correct. It is merely e 11 identified as Coal One. 12 < Q So then would it therefore be true to say Q 13 l that Met-Ed will continue either to rely upon its own i 14 ! more expensive units or on purchase power for a larger 13; portion of its energy needs in the future than it did prior 16 i to March of 1979? I J 17 ' A (Raber) I am not sure what you mean by 18 relying on its own core expensive units. The Met-Ed units 19 cre dispatched in conjunction with all the other units i i 20 " within the PJM system and to the extent that the Met-Ed 21 7 units do not operate and provide energy needed by Met-Ed's i customers, purchases will be necessary, yes. 22 l I t i 23 3 Q I guess the reason for thatconfusien is ! it j Q-24( if we had TMI-1, TMI-2 there would be Met-Ed unito that wouldl u 25 ] either not be called upon to serve Met-Ed or there would be 3
!!CHR3ACH & r.4ARSHA1 INC. - 27 N. L3MW%Lovv AVE. - M ARMt::cuMG. PA. 171fa
1 s l l Raber-Hood-cross 473 I
;j
- 1. hours of the day where ?fet-Ed would not feel the need to go g
,1 f, 2 ' out and purchase power outside of their own needs both insidei l i 3 $ the pooland utside the pool? ,
4 ;l A (Raber) If TMI-l or TMI-2 were available, 5 Met-Ed's purchases of energy frcm other utilities would 6 certainly be reduced. . I l
?p Q I believe it would be fair to say that the 1
6 substantial increase in fuel costs that have been 9 i experienced by Met-Ed ca a consequence of the accident 10 j uill not decline during the 1980's unless TMI-l and/or TMI-2 , 11 li return to service? 12 A (Raber) I cannot offhand think of g 13 ( another vehicle, but that does not mean for sure there isn't la> cue. . U g MR. BARASCH: That is all the questions J 16 j I have for the witness, Your Honor. 1 i 17 j THE ADMINISTRATIVE IsW JUDGE: Any further l l 13 cross-examination? i 9l ' MR. WISE: Yes, Your Honor, , C ' BY MR. WISE: I
, t U! Q Mr. Rober, my name is Kenneth Wise. How !
22 do you do? Mr. Rabor, you testified earlier concerning the i 23 factthatalotofthereviseddounturnindemandwasbecause'g ; y ' of energy conservation. Do you recall that? t._.. : 2 e A (Raber) Yes, I did. 1 M Ot ;i'.O A OM C4 M \.~ SP AL. lf C. - 07 N/ LOCK' /P.L OVI 4VC. ~ 4 M A!S 2 O N G. 9 4. 3711#.
_ _ Raber-Ecod -cross 4 7 9_ _ , 5 1l 4 Q At least that was your reading frcm the
~l Ci 2 darz?
3, A (Raber) Yes, thct is correct. 4 Q And as I understand it, ycu can't really 5 [ quantify uhat portion is conservation and what portion is , 5i downturn in the economy or stagnation in the econcmies?
?{ A (Raber) It is difficult to separate those 4
3* tuo, 9l Q Does Met-Ed or Penalec or GPU have any .
.i 10 j tests that they are going to run,cus'temer surveys or the like 3 i 113 that would verify or quantify what portion is conservation?
4 l 12 A (Raber) Yes, we do surveys onareasonablyf O v 13 regular basis. There was a survey completed within the I- ; last few months that indicates such things as a heavy 15 h penetration of wood burning stoves, particularly among . a i' 16 I Penelec's all-electric customers. To some extent Met-Ed's i i 17 ;.) all-electric customers, thoce classes in particular,' l 1 !! ! IGh Whethes this can be converted into a precice quantification j
- t 19lofhowmuchenergyissavedisproblematical,butwedo e
1 t l 10 h see frcm the surveys that we run that cuatcmers are taking l 1 i 21 k certain steps, that being one of them, and in the commercial ' il l 22 ] area the mandated thermostat' settings for cocanercial
'23 3 buildings, this nac President Carter's mandate as of about !
1 i ( 24 July of 1979 to set thermostats in commercial buildings backj , 23S to about 65 degrees or no higher than 65 degrees during the 6 i S YJ OV ~tCAOH & ,v Alt EH At.. f t4C. - 07 N. t.')C4W%i.G (i W I.
- I M.'t RISS U R G. P A. 17112
. o naber-Hood-crocs 480 r
' ; heating season and no lower than 76 de",raes during the j
(. 7 cooling season. That l'/.s prcduced a one tima conservation l& i
- i 3 j benefit in the cc,um cial area, but assin, I have no way 4 1 of firmly quantifying that. I i
5j Q I am a little lost, I am afraid. How are f
'i 5 you able to make growth estimates if you cannot quantify a
-7 ' significant factor in your projections?
3 A (Raber) Well, in the residential area, F for instance, we can observe the time trends of use per
;.01 customer and the ti.ne trends of the number of cus tomer s in ujboththeall-clectricclassandinthenon-totalelectric I ?.2 classes and these can be projected into the future, j 12 i
Q I don't know if that answers my question, th j { i M My question is -- Well, let me ask the question in a I if' little different way. Do you have any sort of mathematical
- 6 ) equation or anything of this sort to be able to identify
?T what effect conservation is having and will be having on 1 !
s i
'G ; load growth?
i r i I
.5 i A (Raber) At this point and time, I hav-i X no mathematical equation that will tell ce, that will l characterize these conservation trends in the way you suggestl.
~
I 22 Q Are they entered at all into your load ,
" , ' growth projections? .
, . A (Rabar) Yes,'cr zenns of 12 month rolling ! b . n._ averages of the historical data. That would capture it to
!?'IL -- I
- OitraACH 3 4.R C H At.. ; NC. - lll7 f t.1.C Cf."'!' - '.O'. -W I. - . A.ulS 3 U R G. P A.
Raher--}inod-cronn 481 s i 4
; f the extant that the historical data can be proj secad into O e.)thereture.
a obviousi7 thero ts e certein emouue of $uaameae , i 3: involved in making that projection. -
- 1 4 ! Q Do you know what amcuntof judgrent goes 3 into making that projection?
e
, A (Raber) The best way I can answer that 1
4 74 question is to suggest that mu look at the year-by-year G' forecast of sales and that will tell you for each customer 4 In a qualitative sense p s, class what we have infact projected. j 10 we have projected some of these trends will slow down. 1 We do not think that the penatration rate of checo ecod burning stoves will continue at its recent pace level for 12 13 vary much longer. The thermostat setbacks that I mentioned is.31 before get you a one time change basically and then you 4 15 revert back to something resembling the cid growth rata, Q Is it fair to say that over the past five 16 17, years the actual growth rate is comewhat under what Met-Ed s 1 la ' projections have been for the years previous? 19 A (Raber) At least on a short-term basis to j Met-Ed's forecasts have been pretty accurnee and as I recall i 21 some of them have been a bit too high and soma of them have 3g j been a bit too low. ' i 23 l Q Have the projections that Met-Ed has
; as Ov 41: siveu us/aart oz it==u99oret=s eeta sa che eueire rcee
.:.5 relief request been above or below what has actually taken rwmneu e. msut me. - a n ucemus n . - unmasun. n. nm r
i
Raber-Ecod-cross 482
+
i i i Ijplacesubsequently? !ll) l (' .t ,
~'
A (Raber) I don't personally have a knowladga. i ; 3 i of what specifically was in the filings, but on a one-year I T ; 4 lock ahead basis for the last five or so years /hava gone l 6 l back and checked Met-Ed's sales forecast per se withcut any 6' adjustments being applied to them for purposes of rate filings "
? or anything of that nature. They have generally been !
i
", i accurate to within about plus or minus two percent. As I i e~ d j indicated beforg sometimes a little on the high side and l IG sometimes a little on the lov side.
-! Q I would like to direct your attention to
- i
.-t .
2" page 20 of tha testimony which you sponsored. The direct j lll j
~d You mentioned that installed reserve should
(. - i testimony. 14 ) average to be chout 25 percent over a long period of cize. l i i 15 1 Do you see that, about a third of the way down the page? ! I 10 i A (Raber) Yes, that is aorrect on an order of I i 17 j magnitude basis over a long period of time. i
.: i I0 l 4 Q How wsz this figura a:Eivedat? i ai-'
(Raber) Well, the proc ss for computing i 3 A i
-s..
l reserve cargin organization is described in some detail on f i I 31j the pra-filed testimony, especially in Exhibit I-1. i l Those ! 2 i 2% l computations are dcne more or less on a year-by-year basis
-,. i into the futura er alternatively =ay be done for selected i (l)
(, y2ars cnd then an svarsge use per clanning purpcses and thr.t ' is really what was done to arrive at the 25 percent figure, f ic N 5:3f.C f 0 '/7 J p u.. st:0 = ;.7 f t. t.c:,:'Y 1*.L J a avi -- 5 W A;3309 3 ? A. 1 71 ' . - -- - - - ~ ~~
R:bsr-Hosd-cross 483 1 a A few selected calculations were performed. They were ; i O z;roush1 7 n in the vicinity of 25 percent. For planning purpcsos ' i 3 j at that particular point in time we adopted the 25 percent. j
- 4. ') .Q Is this a VJM requirement?
- i 5f A (Raber) The PJM contract requires this 1 5I computation to be done by PJA for all of its member companies t
? H cach year, but they only look ahead for three years. Weusel 8p . that calculation, the same calculation methodology to project i ,
9 l' further ahead than the three years for the purpose of 10 ; capacity planning, 11 Q But the margin of PJM is not GPU's? i 12 A (Raber) Wall, GPU has an obligation to
'13 E PJM and the 25 percent refers to GPU's obligation to PJM.
24 ) Q Do other companies hava different margins? 15 [, A (Raber) Each of the operating companies 1 10 has a reserve operating margin to GPU or put it another way, l' i 17 i the GPU reserve margin obligation is allocated among the 18three }s(operating companies using essentially the same 17 ) methodology that is used to compute the GPU reserve margin s ; 20* obligation to PJM. 31 1 Q Let's say for example Philadelphia
- 1 22 f Electric, do they have the 25 percent reserve margin 33 i 4 obligation?
'i ,]v 24f A (Raber) I do not offhand recall uhat 4
23j Philadelphia's Electric 12. I will be happy to look it
.i up 9
l ror.acAcH 4 .tAnsMAL. It!c. - 17 ff.' Loexn tLLov/ avt. - aAR ais s u R G. PA. 371ft
Raber-2ioed-crcas 484 s 4 1: for you. ! I; Would it ba different from GPU? 4 f Q : 3l A (Raber) In genaral, it uould be different 1 4 h from GPU's. 4 5 !i Q Are there other connecting systems where i 6; the reserve capacity obligation is generally smaller than PJM',s
? system?
1 3j A (Raber) I will be happy to check on that l 4 , 9)foryouifyouwish. Myguessisthatmostotherpowerpools{
,1 1 10 ;' have reserve margin obligations for the pool as a whole that l t
11 ! are roughly comparable to PJM's pcol ac a whole obligation. l 6 13i The reserve margin that PJM has set for itself as a pool l. 13 t;j is 22 percent, ih r, l i 14 Q If I could refer you to Ezhibit I-5, page 4, 13 it mentions under the heading use per customer codel, first i 16 3 item underneath that is marginal price of electricity. Do 1 17.Ii you see that? 18 1 i \A (Raber) Yes, I do. Uj Q Would you e:: plain that and define that
.3 1 l pisase?
Mj A (Raber) Let me point out before I attempt 23; to answer your question that the methodology that is 23 ; discussed hera pertains priaarily to the long-term method-24: ology as opposed to the discreet short-term methodoleg7 ! v E used to generate near tern sales. There is smbodied in this i I
.._ e m.v.a r u wu.. mc. - u n. ac u. u w vc - a r us.s c a o. e '. iv: :
__ __ -- _ - - - _ _ _-. ___ _ _ - - _-. - ._= .-- _- Raber-Hood-cross 485 l 1 f nodel, based on historic data going back 15 or 20 years, j 1 a formulation that attempts to mathematically relate use per C 3)a customer to the price of electricity expressed in real terms, a 4 ;! of course, corrected for inflation. I don't know if that op;answersyourquestion. If you could be more specific as to 6{whatyouwouldlikemetoexplain-- 7 Q kiell,Iwouldlikeyoutoexplainthe
~
term responsive. You are referring to long-rhnge costs, but 3 I don't think you have answered excetly what marginal price, f j l D ' exactly what you are talking about. What is the marginal j 4 11jpriceandwhatareyoutalkingabout? l U A (Raber) The formulation that is included ! l ( U in this model is really a typical bill or average bill M' concept. The price that is required here is really the
!5 I price on a year-by-year basis to a typical custcmar who W . utilizes 500 kilowatt hours per month of electricity. That!
1 l 17 ) typical bill has been tracked over a historical period in '
'3, order to construct the model that we use to guage a !
i G 3 customer'c respcuse on a long-te:m bacia only to changes in l
. i 20; price, f
M! Q Do you have a mathematical formulation l .
}
U ! uhich is available or could you make it available in stating G: the assumptien tihat have gone into the model? M$ A (Raber) I hesitate to do that because the 3 ' q documentations of these riodels in all honesty uns interrupted i J. .:e:e: Acx a.:.ua at, m - u *t. oc.ow ow Av2. - w:msevu. n. m2 -8
Raber-Hcod-crosa 486 T s g a .
" j by the circumstances of the post-TdI environment. I do not j
.4 ) have a document that I can send to you that would describe iO
)f 3 that model. !
i t 4j Q Are you saying the models have changed 1 54 since the accident of TMI? I I l 6 It jue:: isn't very well A (Raber) No. ,! 7 documented. 1 3 p Could you explain uhat you mean? Q I e1
'1 A (Raber) I don't have a report that I can i
.-O i send you that describes the model.
!I , Q Referring to the second item under this 12 , which is real income, is that adjusted to real dollars?
U A (Raber) Yes. 9 ( M Q And is the marginal price of electricity U which you refer to in the line above based on in terms of I lu. ti constant d;11ars? J
. a 17 j A (Raber) Yes, the price of the electricity M j is exoressed in real terms. I believe it was indexed i '9!probablyto1967 dollars.
i l I would like to refer you to Exhibit I-6, Nl , Q 21i page 2. You have an item in this ;;raph on the near right-9i Uj hand side, internal price data, you have an arrow pointing to 1 I a block within a cemi-circle or a circle with the notation ! o non-weather sensitive. I assume t hat is ncn-t:cather i$ i
. 4
' sensitiva factors. Do you have equations for that?
t w:auan e, u a au a. w e. - =r n. nr.n n u - uns wa. n. m ,: -
Raber-Hood-crose 487__ 7--. . ( lj A (Raber) The arrous on this chart as I
,1
@J ' l recall, are not specifically pointed at any one of the football field shaped arrous. They are simply inputs to the 3{
4 cntire rectangular box. 5 Do you have equations that formulate that Q 6 function?
?) A (Raber) There are equations that constitute U' the commarcial model,yes.
l 9 Can you make those available?
, Q l 10 [ A (Raber) I am afraid I have the same f 7
11 , documentation problem that I mentioned before. We really 12 were in the midst of an intensive three year program to 13 icprove our forecasting methodology in our areas and we 14 had developed the mathematics and we had used these in ifhpreparingtheoriginal1980long-termforecast,but 1 16 frankly, we have just not had the resources to do the 17 documentation. a 16 j Please understand, and I am sure you i U appreciate this, that since the TMI accident, and Eiparticularlymorerecently,thecompanyhasbeenoperating 21; under a very severely constrained budget. U, (Testimony continued on next page.) i 23 1 ! (). M .i
, l D .
'!c M:13 ACH 5 Matt S14 AL. Iff C. - 27 R bOCX'N1L DI AVE ~ M A 1 N 68 E k 1 G 8' A- 17112 " - -
Raher-Mend-cross 488 i !
,j Q What are your la tecc cqtutions chat are g uu 1 cvailcble and can chase be cada cvailable?
i i 3j A (Rabor) If you uculd be interested in a l 1 i
! discussion of forecasting methodology utilized by not only v4 1
5; GPU but other utilities uithin Pennsylvania , I can refer you 6" to a report that was assembled under the sponsorship of the l 1 ; 7 Governor's Energy Council, and I am referring to a report g d that was assechled by a consulting firm known as Synergic ! t p Rescurces, Inc. j
' i The report is entitled Eeview of Energy j 10 ul '
31 j Models and Forecasta Applicable to Pennsylvania and was l n published early this yes: : February or March. g y,3 Q I would like to next refer you to Enibit I-7, (. l this would be page 1. You have en the third parcgraph, it
- u. ol-15 states, incustria1 de=and is modeled as a function of i 4
regional output and r21ative ena.rgy pric23. 16 - t p What are relative energy prices? 1
- g. A (Raber) The relative prices of electricity l
l 13 and alternstive fuels, specifically oil Onn/or natural gen . 20; Q Is this cathematical model svailable? Or i i l .q- is your answer the same as -- I t f
- n. A (Raber) The answer has to be the sa=e. We Il u really did not do tha decumanta tion or ccrry che docuraentatic g y, to the point uhere it. aculd be releasabia and understandeble v 4 7.;- ~ cutcida che ccmpany. !
v e :.7,:: A cu a **Aa s er. : ' c. - 17 7 . 1. 8< !Vn'.' O " WE - ' *
. *t nis sun s. PA 17t12
Rabor-liood-cross 489 , I 1 h Q I would like next to refer you to Exhibit I-21 t i
; which is a ecmpendium, I guess, of excarpts from opiniens of i
3l this Cornission. Can ycu briefly state for the benefit of f 4j the Comc:ission and me uhat is the purpose of these excerpts? A (Itaber) Yes, the first purpose was to help 3f W 6 g dispel the notionthat a utility all by itself can decide how 0 7 ii much capacity to build, what kind of capacity to build, and I 8 where and when to build it. , 9 As I had indicated in one of my statements 1 i . 4 a little while ago, activa involvement of regulators is toq! 11 required for all of these kinds of ccnstruction decisions, 12 d and in particular the PUC must provide, through rate making, h 13 l tha financial means to implement these proposed construction 14 { programs and other state and federal agencies must provide 15 [ licenses and permits of various types in order for those 4 16P construction programs to be implemented. i 17, The excerpts that I have prasented here in i i 18 the pre-filed testimony demonstrate that something more than 19 ; passive concurrence with utility plans has been displayed by 20 the PUC in the past. They demonstrate that the PUC has I y 21' provided considerable impetus to utility construction plans, , 22 h and in fact to the accomplishment of those plans in the 1970'b. l 23 l They also demonstrate a past awareness by n 4 k 24 the PUC of the need to consider custcmer needs on a long-4 i 25 j term basis, not only this ueek,- next week, this year, next i 5 muren a unsu: me. - 27 :. L33KW41.0"I AVE.= fiARft!3S*JRG. PA. 17113
Raber-Hood-cross 490 t ; V I 1 [ year, but five years , ten years,15 years into the future. g i I ( 2h It is vital, I think, that this awareness ! ll 3la be continued and directed toward present and. future rate - 4, making proceedings. l 3$h Also I would like to point out that history l 6 '!: has shown that there have been times when insufficient I! 7 l capacity has been planned, and it is possible under certain 0 t1 circumstances for such conditions to arise again in the 9i ; future. 10 Q Seward-7 in the GFU system would be the next 11)I plant due to be completed? 12 l A (Raber) Of any significance, yes. The load g ( 13 ' and capacity forecast shows a couple of minor hyiroelectric 14 plants to be installed before then. They are very small. 15 , Q I think you testified that Seward-7 was only 16 { in the initial planning stage and that GPU has not made a I! 17 li significant financial contribution to date. 13l i A (Raber) That is not quite what I said. 9 19 Seward-7 is well-planned, it is an aavance stage of licensing. 20 ll The company is simply not in a financial position to implemenl 11 21! the conatruction on a schedule that we would probably like ii 22 to implement that construction. 4
- it 43 Q Is that schedule for 1987 or 1989'? g 24 A (Raber) The data report is in the pre-filed i w l 13j testimony say 1987. I indicated before that since this ;
I ! 'I' *C:IMACH & !4 aft s:4AL. IN O. ~ 17 PL LSCKWtLt.3W AVE. - N ARR!s gyetc, p A, g yg g y, I l R,
**
- Raber-Hoed-crcss 491 l i
i 5 l 13 testimony was filed the in-servico date has been delayed to . O 2j 1989. That te sccauee ce financiet constrainte. 3i MR. WISE: That is all I have, Your Honor, l 4i THE ADMINIST3ATIVE LW JUDGE: We will 3 adjourn until temorrou morning at 10:00 o' clock. Who are P 6l the witnesses you have tomorrow? i 7i t MR. CGDEN: Your Honor, we intended to have i 8l Mr. Garland and Mr. Newton here, Mr. Garland on depreciation f 9). methodology, and as I understand it Mr. Newton on inter-10 i connection ' agreements and matters of joint interest with i. 11 ! both companies. 12 { THE ADdINISTRATIVE LAW JUDGE: Very well. Q 13 l MR. SELTZER: Your Honor, if you would excuse 14 i us for one moment, aay I speak to the witness and see if there 15j is any possible redirect? 16i MR. OGDEN: Your Honor, I might also state 17 . for the record that Mr. Huff and Mr. Carroll and Mr. Carter t 18 l' we expect to have here tomorrow as well, so to the extent 19 i'l that we finish up with Messrs. Garland cnd Newton, if the i 20; parties have any questions for any of those three witnesses, i 31l perhaps they could prepared in those aree 3. t I THE ADMINISTRATIVE LAW .RJDGE: Counsel will l 22l 23 j cake a note of that. ! 24 HR. WISE: Euff , who and Cartar? l t- j 25j MR. CGDEN: Mr. Huff, Mr. Carroll and Mr. 1' Tf 0HR3AOH a !" ARSMAt EliO. - 7.7 Mi %3OKWILLOW AV3. = ifARittSDU A G. PA. 17112
492 p i. n i 1[ Carter. O M2. SELTZER: Your Henor, pardon us for :ne s 2j
- i 3J delay. We have no further redirect. If I may rake one state-4 4 ment with respect to a data request that was summarized earlier 5 j this afternoon by Mr. Suffian, that was posed to Mr. Raber 6 ; land his staff, during an afternoon racass ue were able to
?, supply that information and it is my understanding that that y
G ,' request is no longer outstanding. 9 MR, SLTEIAN: Yes, the t is correct, Your Honor. 10 That problem has been settled and the company has providad us 11 iwith the information. 12 TFE ADMINISTRATIVE LAW JUDGE: Is there 13 anything further with this witness? { MR BARASCH: Your Honor, there is only one 14 ) 1 t 5e problem. It was a formal request and we would like to be 16 a advised as to the resolution of the matter. 1 Could you provide that in 17 h MR. SUFFIAN: i i 18l writing? tl MR. SELTZER: Your Honor may we go off the 19 ll a 20j record for a acment? 1, 21i d THE ADMINISTRATIVE Ila JUDGE: Yes. e i: 1 22 y (Discussion off the record.) J d
.?3 J MR. SELT E : We will provide an e:-:hibit .
- 24. l which will be responsive to that dcts request to all parties. .
25 i HR, SDisa.N: Thank you rery cuch. . t wmaacu c runse.u.. nc. - :7 n. i. cmu.cw avz. - unmaun. n. mu -
- v
. 493
( 1i THE ADMINISTRATIVE IAU JUEGE: Very well. 9
~
(\
'v' ; l Ke will adjourn now until tomorrow morning at 10:00 o' clock. i i
3i t v, 3 (The hearing was adjourned at 4:50 o' clock p.m.) 5) s. 7' ! O i 9, I hereby certify that the proceedings and 10 evidence are contained fully and accurately in the notes l h 11 ? taken by ma during the hearing of the within cause, and that 12 this is a true and correct tranceript of the same. Q 13 MC 2 BACH & MARSHAL, INC.
.i M-f
.13
- By N 15 3 J
[/ JAMES P. O'HARA 17 l By I _. ~ , i Eff B.14ARSHAL' { I3 i //-/J - fu l
!? '
10 i, (The foregoing certification of this transcript
?. dcas not apply to any reprcduction of the same by any mcens 21!.! unless undqr the direct control and/or supervision of the j cartifying reporter.) ,
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