ML20003E097
| ML20003E097 | |
| Person / Time | |
|---|---|
| Site: | McGuire, Mcguire  |
| Issue date: | 03/25/1981 |
| From: | Tedesco R Office of Nuclear Reactor Regulation |
| To: | Parker W DUKE POWER CO. |
| References | |
| NUDOCS 8104020238 | |
| Download: ML20003E097 (5) | |
Text
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o UNITED STATES
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j NUCLEAR REGULATORY COMMISSION
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.E WASHmGTON, D. C. 20$55
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March 25, 1981 Docket Nos.
50-369 and 50-370 g
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/s Duke Power Company
~b gy ATTN: Mr. William 0. Parker, Jr.
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1-i Vice President - Steam Production
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0 kgl@hg P. O. Box 33189
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Charlotte, North Camlina 28242' 7
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Dear Mr. Parker:
As you are aware, the U.S. Congress requires that the Nuclear Regulatory Comission provide the Subcomittee on Energy and Water Development a monthly report on the major actions taken on operating reactors and on licensing reviews of new facilities.
In a letter dated February 17, 1981, the Subcomittee on Energy and Water Development requested that the monthly report be amended to incit.de various information for each impacted plant. One category of additional infonnation requested-is the utility's best estimate of the monthly cost to maintain each impacted unit in an inactive status while awaiting a full power operating license.
It is requested that you provide such an estimate including separate costs of replacement energy and the capital expense during the delay period. The NRC will provide the information received to Congress. For your information, enclosed is NRR's estimate of the cost of delay which we plan to include in the March 1981 report to Congress.
Your estimate should be provided orally to the Project Manager by noon Friday, March 27, 1981 and confirmed in writing by April 3,1981. Please follow fomat enclosed-in providing this information.
Sincerely,
_ (.,' :k. - =..
Robert L. Tedesco, Assistant Director for Licensing Division of Licensing
Enclosure:
NRR's Estimate of Cost of Delay cc: See next page 8104020 M
4 Mr. Willia O. Parker, Jr.
Vice President, Steam Production Duke Power Cercany P. O. Box 2178 422 Soutn Church Street Charlotte, North Carolina 232*2 cc:
Mr. W. L. Forter Mr. Tem Dcnat Duke Power Coc;any Resicent Ins:ector McGuire NDS P. O. Box 2175 c/o U.S. Nuclear Regulatory Ccamissicn 422 South Church Street Pos: Office Sox 215 Charlotte, Norin Carolina 25242 Cornelius, North Carolina 25031 Mr. R. S. Howard shelleySlur,Escaire Power Systems Division 1402 '.ichers Avenue Westinghouse Electric Corcoratien Durhan, Ncrth Carclina 27707 P. O. Box 355 Pittsburgh, Pennsylvania 15230 Dr. P.icnard F. Ccle
- drinistrative Judge Mr. E. J. Keith U. S. Nuclear Regula cry Commissicn EDS Nuclear Incercora:ec Washing:cn, D. C.
20555 220 Men:gerery Street San Francisco, California 9:104 Mr. J. E. Ecughtalic; NUS Corecration 2535 Countryside Sculevard Clearsater, Florida 23515 Mr. Jesse L. Riley, : resident The Carclina Environmental Study Grcuo 554 Henley lace Charlotte, North Carolina 2S207 J. Michael "cGarry, !II,-Esc.
Cebev0ise & Liber an 1200 Seventeen:n Street, N. W.
Wasnington, D. C.
20035 Robert M. La:c, Esc., Chairman Atcric Safety and Licensing Board U. S. Nuclear Regula:c y Commission Washingten, D. C.
20555 Dr. E=r.e:n A. Luecke A ccic Safety anc Licensinr. Roard U. S. Nuclear F9;uia:Ory Cen=1ssion Washington, D. C.
20555
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COST OF DELAY Table 1 identifies ten nuclear units where the estimateo construction e
completion date precedes the cotDietion of the licensing effort. The NRR staff was asked to de/elop estimates of the costs that will be incurred as a result of these licensing delays.
These estimates appear in the attached Table 2.
One should be cognizant that the estimates are highly sensitive to underlying assumptiens which are subject to much uncertainty (fuel price escalation, sources of replacement energy available, expected performance of the nuclear unit in its initial comercial start-up, etc. ).
Thus, the values reported in Table 2 should only be viewed as benchmark estimates.
Cost of Reclacement Energy l
The selection of an alternative, energy source is not something one can readily predict. Logically, the utility will rely upon the least expensive alternative i
available. Hcwever, what is available will depend on the system capacity mix i
and the demands existing on the system during the delay period. Depending
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on these factors, replacement energy may be supplied by some combination of
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base, intermediate, and peaking units utilizing varying fuel sources, or thru outside purchases.
For the purpose of this assessment, the staff has assumed that all replace ent
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energy will be made-uo by capacity already en the applicant's system. Where a system is heavily cemitted to a particular energy source, replacement energy is viewed as coming totally from that source.
If a system's capacity is heavily distributed among two or more fuel sources, tr.e reolacement er.ergy is assumed to be equally distributed among those energy sources.
It is assumed that the nuclear unit would have operated at an average capacity factor of 60% during the delay period. The fuel costs in mills per kWh are based on the following assumptions. The fuel cost for coal, oil, and natural gas is based on actual values (c per Pfi BTU) paid by each utility as of June 1980.
These values were converted to mills per kWh based on averege plant heat rates of 11,000 STU per kWh for oil and gas-fired plants and 10,000 ETU per kWh for coal fired plants. These cos,ts were then escalated at a nominal 10t per year
. to reflect estimated costs in the 1981-83 timeframe. The nuclear fuel cost is based on a 1977 estimate of 7.83 mills per kWh (assumes no recycle), and escalated at a nominal rate of 5% per year to reflect estinated cost in the 1981-83 timeframe. These nuclear fuel cost assumptions are based on Table 11 of NUREG -O'SO (Coal and Nuclear: A Comparison of the Cost of Generating Baseload Electricity by Region).
Capital Excense Durina the Delay Period The capital expense represents the interest charges associated with carrying the capital investment during the delay period. For the purposes of this analysis it is assumed that interest accrues on the completed capital cost of. the facility at the annual rate of 10t per year.
It is our position that this does not represent'a real cost to the utility or its ratepayers but
.rather shifts the financial burden from one group to the other (transfer payments) and shifts payments in time. Thus for example, if during the delay
-
- not enclosed
period the state PUC does not allow the interest payments to be passed through to the ratepayer, the stockholders and the utility will be rer,; ired to absorb this cost as it is incurred.
However, once the nuclear un..
does become operational, these additional interest charges will be capitalized and recovered by the utility and its stockholders over the unit's useful life.
However, because of current cash flow considerations the utility would prefer that the ratepayer absorb the capital expense as soon as practical.
Alternatively, whereas the ratepayers will be relieved of carrying the capital cost of the unit during the delay, they will be assessed higher carrying charges in the future once the unit becomes operational.
It is argued that what they will be saving in carrying charges during the delay period can be invested by them at the current opportunity cost of money to enable them to repay the additional carrying charges of the future.
This neutral position with respect to increased capital expense is subject to a number of simplifying assumptions:
During the period of delay, the money retained by customers a.
which would otherwise bA' paid in rates if the unit were operating can be invested at financial returns equivalent to those costs paid by the utility in carrying the plant in its construction work in pr::gress account.
b.
There is adequate regional power supply in the short-term such that there is no need to make real economic resource comitments to expedite completion of other generating capacity.
The delayed nuclear unit does not deteriorate during the c.
delay period such that its useful operational life is shortened.
d.
The delayed start-up does not result in the unit being technologically obsolete during the end of its useful life which has now been stretched out because of the delayed start-up.
s
t COST OF REPLAC[tfNT ENERGY AND CAPITAL EXPENSE INCURRED Diff TO IICENSING DEt AYS (ALL CoiT [S1IHATES ARE IN CUPRENT 00t L Ang COST -
0F REPLACEMENT-thERGY ITAt.
C ital Average Esti.
Tota)
Replace.
Estimated Expense Cost of Incre-mated Replace-ment Capital Delay Capital Replace-Nuclear-mental Length ment Energy Cost During Expense
"*"I I"'I I"'I "I
Energy Cost Per of Unit at Celay Per REPLACEMENT FUCL fuel Cost Cost Delay Cost Month Completion Period Month ggg g 6
6 6
6 Inti t68e ' COAL OIL GAS Mills /kWh Mills /6Wh M11Jsfjyh Months il n 10 11 x 10 11 = 10 gy, jo Sumer 900 50 50 31.1 10.0 21.1 8
66.4 8.3 800 53.3 6.7 Diablo Canyon 1
.1084 100 62.2-9.5
~
52.7 12 300.2 25.0 1050 105.0 8.8 Diablo Canyon 2 1106 100 68.4 10.0
58.4 5
141.4 28.3 840 35.0 7.0 San Onofre 2 1100 100 60.3 9.5 50.8 6
147.0 24.5 1820 91.0 15.2 Zimer 792 50 50 44.6-10.0 34.6 3
36.0 12.0 1030 25.8 8.6 McGuire 1 1180 100 16.9 9.5 7.4 11 41.8 3.8 770 70.6 6.4 Susquehanna 1 1050 50 50 37.2 10.0 27.2 8
100.0 12.5 1840 122.7 15.3 Waterford 3 1110 100 50.)
10.5 40.2 3
58.5 19.5 1230 30.8 10.3 Shoreham I 820 L 100 41.3 10.0 31.3 1
11.2 11.2 2210 18.4 18.4 Comanche Peak 1 1150 100 26.6 10.5 16.1 2
16.2 8.1 1120 18.7 9.3 i
- See accompanying text for explanation and underlying assumptions
.