ML20008E774
| ML20008E774 | |
| Person / Time | |
|---|---|
| Issue date: | 01/21/1981 |
| From: | NRC COMMISSION (OCM) |
| To: | |
| Shared Package | |
| ML20008E775 | List: |
| References | |
| REF-10CFR9.7 NUDOCS 8103090611 | |
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Text
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UNITED STATES OF AMERICA 2
NUCLEAR REGULATORY COMY!SSION 3
f1 ti; 4
EEETING WITH kiR ON THE FUTURE OF NUCLEAR PC*JER PLANTS 5
d PUBLIC MEETING 7
Nuclear Regulatory Commission 8
Room 1130 9
1717 H Street, N.
W.
Washington, D. C.
10 Wednesday, January 21, 1980 11 12 The Commission met, pursuant to notice, at 13 10:00 a.m.
14 BEFORE:
15 JOHN F. AHEARNE, Chairman of the Commission 16' VICTOR GILINSKY, Commissioner JOSEPH M.
HENDRIE, Commissioner 17 PETER A.
BRADFORD, Commissioner 18 STAFF PRESENT:
19 LEONARD BICKWIT, General Counsel 20 JOSEPH FOUCHARD, Director, Cffice of Public Affairs 21 AIF PARTICIPANTS:
22 FRANCIS F..
STRASZESKY 23 President, Boston Edison Company and Chairman of the Atomic Industrial Forum 24 FLOYD L. CULLER 25 President, Electric Power Research Institute ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
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GORCON C.
HURL 3ERT 2
President, Power Systems Company, Westinghouse Electric Corporation 3
RERMAN R. HILL 4
Executive Vice President, Power Systems Sector, General Electric Company 5
CARL WALSKE 6
President, Atomic Industrial Forum 7
8 9
10 11 12 13 14 15 16 17 18 19 20 l
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1, CONTENTS j
2l INTRODUCTORY REMARKS BY:
PAGE i
I Francis M.
Staszesky 3l President, Boston Edison Company 4
4 PRESENTATION OF:
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l Floyd L. Culler, j
6i President, Electric Power Research Institute on g
Long-Term Energy / Electricity Requirements 9
7 Gordon C. Hurlbert, j
8, President, Power Systems Co., Westinghouse i
Electric Corp. on Westinghouse's View on d
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Future Nuclear Power Growth 34 i_
10 Herman R.
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_E Executive Vice President, Power Systems Section g
11 of The General Electric Company on General Electric's t
View on Future Nuclear Power Growth 45 d
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CHAIRMAN AHEARNE:
The Commission meets this 3
morning, and there are lo ts of comments I could make about 4
new sta rts, et cetera, et cetera, et cetera, but I will put 5
all of those aside and instead Mr. Fouchard will open the 8
meetinc.
7 MR. FOUCH ARD :
As the Commission knows and others 8
at the table know in the Office of Public Affairs we have 9
mounted a modest effort to broaden the outreach of the 10 Commission and its staff with various segments of the people 11 and organizations that are interested in the activities of 12 the NRC.
I 13 So when Carl Malski's letter dated November 3rd
(..
14 came in requestinc i meeting wi th the Commission to discuss 15 a number of matters bearing upon the future of nuclear 18 regulation we welcomed th e letter and also decided that in 17 addition to hearing from this group of distinguished persons 18 in a couple of weeks we are requesting some other 19 organizations with possibly some different perspectives to 20 come in and give us their views on the general subject of 21 the future of nuclear regulation.
22 With that opening, Carl, I will ask you to 23 introduce the people at the table.
24 MR. WALSKI:
Our Chairman, Mr. Staszesky will do 25 that.
i ALCERSoN REPORTING COMPANY. INC.
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CHAIRMAN AHEARNE:
Sefore Carl starts I have to 2-comment on Carl's great success in having thi_s be the l
3 opening meeting following the inauguration of th e ne w 4
President.
5 (Laughter.)
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6 MR. WALSKE.
We also arranged the hostage release 7
at the same time.
8 (Laughter.)
9 CHAIRMAS AHEARNE:
Frank.
10 INTRODUCTOBY REMAEKS BY 11 FRANCIS X.
STASZESKY 12 PRESIDENT, BOSTON EDISCN COMPANY 13 AND CHAIRMAN OF THE ATOMIC INDUSTRIAL FORUM 14 MR. STASZESKY:
Well, Mr. Chairman, although you 15 may not wish to give any remarks about a new start, 16 certainly we are hoping that we will have a new start and we 17 vant to talk about the importance about why we believe a new 18 look is desirable from the point of view of the future 19 electric supply of our country.
20 We do appreciate the opportunity to meet with you 21 and your colleagues for a discussion of the long-term 22 outlook for additional nuclear power plants.
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23 I am Frank Staszesky.
I am here to d a y in the i
24 capacity as Chairman of the Ecard of Directors of the Atomic 25 Industrial Forum.
I am also President of the BCston Edison ALDERSON REPORTING COMPANY,INC.
400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554-2345
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Company.
2 With me today are Floyd L. Culler, second on the 3
left here, and I am st ue you know him, President of the 4
Electric Power Berearch Institute, who will make a 5
presentation on EPRI's studies of long-term requirements for 6
energy and electricity.
7 Gordon Hurlbert on my right is President of the 8
Power Systens Company of the Westinghouse Electric 9
Corporation and will discuss his company's views on future 10 nuclear power growth.
11 Herman Hill on my lef t is Executive Vice President 12 for the Power Systems Sector of the General Electric Company 13 and will discuss his company's views on future nuclear power 14 growth.
15 As you have recognized, Carl Walsko is also with 16 us.
He is President of the Atomic Industrial Forum.
17 While we did not request this meeting tcday to 18 discuss the imoact of regulation on the nation's operating n
reactors or on those in the pipeline, I would be remiss if I 20 did not emphasize the high priority tha t we do a ttach to the 21 continued safe operation of the operating plants and to the 22 timely completion of those in the pipeline.
23 However, today we wan t to look further into the 24 future and certainly beyond the approximate 55 gigawatts of 25 operating reactors and some 90 gigawatts of additional ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2345
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1 reactors scheduled for initial operation in the Eighties.
2 While there are approximately another 2C gigawatts 3
of nuclear capacity committed already for initial operation 4
in the Nineties, we shall argue that the nation's energy 5
needs require that con side ra bly more nuclear capacity than 6
that come into service in the Nineties, nuclear reactors 7
that must be ordered by utilities and licensed by the 8
Nuclear Regulatory Commission in the Eighties.
9 The general thrust of our discussion, which Floyd 10 Culler will initiate, will be first to examine total U.
S.
11 energy demands for the Year 2000 under ocenarios that take 12 full account of conservation possibilities.
13 Then we shall consider the possible contributions 14 of other energy sources to our energy requirements and 15 derive from that the range of our needs to be supplied 16 basically by coal and nuclear.
17 Consideration of coal's potential contribution 18 will in fact leava us with an additional demand which must 19 be met by nuclear electricity under several assumptions.
20 The amount of additional electricity genera tion 21 f rom coal and nuclear for which we shall argue will leave 22 two important questions:
23 First, are we presently headed in the direction of 24 using such increased supplies, and; 25 Second, are the nation's utilities currently able At.DEASoN REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W., WASHINGTON,0.$. $$QBQJKfhf9 wet'G
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to undertake sucn a large expansion.
2 The answer to both is unfortunately "No".
This is 3
a ca-'radition, and we believe it is per aaps the nation 's 4
most important unsddressed energy problem.
5 We are hopeful that the new Administration and the 6
Congress will give it the a tten tion it needs.
Certainly we 7
intend to work to assist in bringing that about.
8 As to the first question, our nation actually 9
needs additional electricity for use in many promising and 10 badly neglected applications which are both attractive and 11 economic:
electrical 3y driven heat pumps for space heating 12 and cooling, electrified mass transit and soon the electric 13 automobile and in numerous industrial uses.
14 Such programs require the general education of our 15 people as to their desirability and in fact their necessity 16 since all of these applications can displace oil and natural 17 gas which are dwindling resources that can be better used 1
18 for other important national needs.
19 As to the second question, the electric utilities 20 can carry out the necessary construction prograr provided 21 financial problems are considersbly eased.
22 First, construction times must be shortened and 23 made predictable by increasine the efficiency of the 24 regulatory process.
That can cut costs.
25 We must also bring to sn end the necessity to ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA A/E., S.W., WASHINGTcN, D.C. 20024 (202) 554-2345
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review issues that have already been reviewed and presumably 2
settled.
3 NRC's regulatory processes should be able to stand 4
the test of yielding a clea r-cut benefit in the form of 5
increased safety or improved reliability of safety systems e
communsurate with the dollars and other resources expended.
7 Expenditures that cannot meet this test do little more than 8
contribute to an already spiraling inflation.
9
'd e believe all of these problems are solvable and 10 if we solve them the nation can meet its energy needs.
11 After Mr. Culler's remarks Mossrs. Hurlbert and 12 Hill will deal with our subject from the viewpoint of the 13 two leading reactor suppliers o f our nation.
14 So first, with your permission, M r. Chairman, Mr.
15 Culler will lead off.
16 CHAIRMAN AHEARNE.
Certainly.
17 18 19 20 21 22 23 i
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1 PRESENTATION OF FLOYD L. CULLER 2
PRESIDENT, ELECTRIC PO*4ER RESEARCH INSTITUTE 3
ON 4.
LONG-TERM ENERGY / ELECTRICITY RECUIREMENTS 5
- 58. CULLER :
Thank you very much.,
6 The information which I will review with you comes 7
from EPRI's annual strategy planning document, the executive 8
summary of which has been passed out.
The little blus 9
stuffer sheets are an annual compilation of numbers 10 relatively correct when compared one to another but not 11 necessarily an absolute.
The blue document is over a year 12 old and the executive summary is recent.
There is a full 13 overview and strategy which we would be delighted to make 14 avalliule to you.
15 CHAIRMAN AHEARNE:
You say it is over a year old.
16 There is a date up here of January
'80.
That is when it va 17 put out?
18 MR. CULLER:
The data are over a year old.
I had 19 it republished and the publisher put on the date of 20 publication.
I can,out of copies.
'Je will have a new issue 21 in June.
22 The purpose of our discussion this mer.ing is to 23 explore various possibilities and needs f or electricity and 24 for total energy in the United States.
25 The question that one debates all the time is is ALCERSw4 REPORT 1NG COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2345
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there a market for nuclear power?
We have based our 2
extrapolations and our views of what will be needed on the 3
premises that you will find on page 14 and with the firm 4
understanding, inspite of much debate, that both energy and 5
GNP and jobs are coupled more loosely now than in the past.
~
6 In the summary you will see that we have followed the 7
decoupling of totsl energy and the GNP.
8 There is one thing that we have noted which I 9
would like to call to your attention.
During this period of 10 total energy decoupling the increased use of electricity 11 with respect to GNP has been constant.
It is particularly 12 true in the industrial sector.
It is true in the 13 residential sector.
I 14 This is a result of pressures coming f rom several 15 sources.
No.
1, there is substitution going and 16 electricity, because it is sort of a common denominator 17 energy form, is one of the substitr.tes being introduced even 18 in the residential and commerciti sectors.
19 Secondly, electricity is the muscle of industry.
20 The moderniration of steel of most industries and 21 conservation has occurred in many cases and substitution by 22 using electricity for broader uses than previously possible 23 when oil and gas were used.
24 CHAIRMAN AREARNE:
You say that link has been 25 maintained even in abstention?
AMERSoN REPORTING COMPANY,!NC.
40J VIRGINIA AVE., S.W., WASHINGTON D.C. 20024 (202) 554-2345
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MR. CULLER:
Yes.
There is a difference between 2
the plots for total energy and fo r electricity.
These are 3
illustrated in the overview and strategy main document which 4
I will be delighted to show you after the meeting.
5 Basically our studies have been done in a 6
systematic way that correrponds to most accepted practice.
7 There are cert,ain premises that I should call to your f
8 attention.
9
~
~ first, we believe that electricity is necessary 10 and energy is necessary to maintain the economy and that it 11 is our job as generators of electricity and providers of 12 energy to provide enough energy to avoid adverse social and 13 economic effects.
Prudent planning would proceed basically k
14 with. the assumption that energy, a seven or eigh t percent 15 factor in total GNP, should not ' constrain the rest of the 16 economy and that energy itself should be sufficient at any 17 time to allow the economy to move as it should.
It sho uld 18 not be the constraint.
19 I will be discussing two scenarios, our 20 intermediate and low case, where we are reasonably certain 21 that e ne rg y is the constraining effect on the economy at 22 least from the econometrics that we and others have done.
23 The second presumption is that over the period of 24 the next 20 to 30 years tha t it is in the national interest 25 to reduce dependence on foreign oil and to conserve oil and i
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
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gas for the special purposes for which it is best suited.
2 That is religion in the world today.
3 That conservation is essential is illustrated by 4
the assumptions.
I will refer to our treatments of 5
conservation, but growth is necessary to accommodate a 6
larger work force and to accommodate the social expectations 7
of the larger force and that growth itself' is forced by
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8 these two variables primarily.
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We t' tin k, too, that it is necessary for us to 10 cospete in international markets broadly and that the basic 11 energy input into our industrial sector, even in 12 argiculture, is an important element in determining costs 15 and our competitiveness in foreign markets.
14 We assume that it is good national policy to use 15 and to substitute of the next 30 years our more plentiful 16 resources in the United Sta tes for those that are depleted.
17 Cne of the most important assumptions I think that 18 is debated all time is tha t we are convined tha t nuclear 19 power is cheaper than any other source for the generation of 20 electricity.
If you wil'1 look at the blue sheets in a 21 little section with a lot of dots on it called " Annual 22 Electricicy For A City of One Million" you vill see there 23 our comparisons of nuclear power.
We think that it is 15 to 24 25 percent less costly now in the United States and probably 25 15 to 40 percent in other nations.
ALDERSON REPORTING COMPANY,INC.
l 400 VIRG!MA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554-2345
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The blue sheet with costs is relatively 2
self-evident.
The three systems that are available to us 3
pow are at the top and those that are developing further and 4
further out in time below.
Those black dots are what the 5
officianadoes think the targets might be for ultimate costs 6
and the gray ones are what we think the current costs are 7
levelired.
8 Nuclear ha s cost ad va ntage.
Therefore, if the 9
utilities follow good policy baseload nuclear plants will 10 protect the customer from larger increases in rates.
11 COMMISSIONER GILINSKI:
Let me ask you do you 12 think you have f actored in realistic assumptions about 13 regulation in both of those columns?
14 MR, CULLER:
Yes, as best we can.
As you know, we 15 are reasonably current on most of the regulations that are 16 coming and we have tried to estimate on a yearly basis.
17 Bechtel and Fluor are going through again now this year for 18 next year's study estimating the effects of regulations that 19 we see coming not only from you but in coal, in sclar and 20 everything else.
'Je try to take a ten-year-ahead view of 21 wha t regulations are like' to be in effect in 1988 and 1990 22 in these estimates.
23 Now, you know wha t estimates are, and that is why 24 I said initially I think these may be correct in a
)
25 comparative sense but you have to be a little careful in an i
ALDERSON REPCRTING COMPANY,INC.
400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (202) 554 2345
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absolute.
We have tried to keep current all the time.
2 CHAIRMAN AHEARNE:
In some sense are these 3
national averages?
4 MR. CULLES:
These are national averages and there 5
are distinct differences by region.
In almost every region 6
of the United States, however, for baseload it is probable 7
that nuclear is cheaper.
8 CHAIRMAN AHEARNE:
Right, but the percentage 9
varies.
10 MR. CULLER:
The percentage varies greatly because 11 of coal transportation or other environmental f actors.
12 Incidentally, our planning is now starting on a 13 regional basis.
Ten years from now our plans will be done 14 and accumulated from regionale rather than L national 15 a ve ra ge.
These are national averages in lumps.
16 COMMISSIONER BRADFORD:
These are plants coming on 17 line in '78 for coal, nuclear and gas?
18 MR. CULLER:
These are essentially levilired costs 19 over the period of the life time.of these plants for 1978 to 20 2007.
We levelired capital and operating costs for tha t 21 period.
So these are plants that would be committed now and 22 come on the line at varying times.
23 In the main overview and strategy we give you the i
24 time that we think will be required to bring them on 25 including the development time.
In the backend of this ALCERSCN REPORTING COMPANY. INC.
I 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2345
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summary you will find a time line for research results for 2
the developing technology shown on the blue sheet, the very 3
last page.
4 Now, the demand for energy and electricity is of 5
course alvsys open to debate.
I call your attention now to 6
page 6, figure 2, and will discuss this basically.'
7 I have stated unequivocably that great uncertainty 8
exists concerning future econcaic growth and its coupling to 9
energy.
70 watch with two lar7e groups of economists this 10 coupling all the time and we maintain two energy modeling 11 forums on the West Coast at Stanford and another back East 12 where we raview all of the models and run them against each 13 other on problems similar to this.
k.,
14 You will note that our projections at the top of 15 figure 2 correspond with most other energy projections being 16 made now.
The little box with total energy and electricity 17 consumption estimates gives you a key to what others have 18 said currently on the projected needs for total energy; t h.e 19 intarmediate case at about 118 or 120 quad, just barely 20 enough to keep the economy going and a low case at about 103 21 quad which we are certain will constrain the economy 22 significantly.
23 Ve think that if we are to avoid adverse social 24 and economic effects and that if recent trends continue in 25 the United States the United States will consume about 120 ALDERSoN REPORTING COMPANY,INC.
400 VIRGINIA AVE, S.W., WASHINGTON, D.C. 20024 (202) 554-2345
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quads or 50 percent more energy than we are consuming now.
2 This estimate is made up with a broad set of considerations 3
based on damographic information, productivity and economic 4
projections through the Year 2000 and beyond.
5 e'irst off, our basic assumptions in demography 6
assume the following: that the population in the Year 2000 7
will be 260 million people and that is the choice f rom the 1
8 United States Bureau of the Census that this is the best way 9
to number, that the civilian work force will be 10 approximately 120 million people.
11 We are assuming a productivity increase averaged 12 over the next 20 years.
That is basically the GNP per 13 worker worker-hour of about 1.8 percent per year.
(
14 Historically up until very recently productivity increases 15 from 1960 through 1973 have been about two and half percent 16 per year.
Our last year's productivity index indicated a 17 minus one-tenth of a percent and we are low compared to most 18 other nations in the world now.
19 However, in order to make ra tional sense out of 20 the economy we assumed a 1.8 percent crowth.
The GNP 21 projections you will find basically in the main overview and 22 strategy.
We selected as an intermediate level $4.25 23 trillion for the Year 2000 and about 53.9 trillion for the 24 lower case.
These are done econometrically and are the 25 projections of the Economic Council in the United States.
ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D C. 20024 (202) 554 2345
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We made the assumption that the GNP growth rate 2
should sustain only the minimum national income 3
expectation.
This is a new wrinkle in our planning.
4 Basically what we mean by minisum expecta tion is tha t the 5
130 million work force or the 260 million people who would 6
be living in the Year 2000 would anticipate the same in,come 7
as the people in similar social status in the previous 8
generation; no increase, no increase at all.
A college 9
educated engineer in the Year 2000 would make the same as a 10 college educa ted engineer now.
11 CHAIRMAN AHEARNE:
Make the same on a deflated 12 basis?
13 MR. CULLFR:
No.
Let me tell you what we assumed 14 there.
First we assumed that his status in the society 15 would be relatively the same.
He would be older on the 16 average because the demographic data says that we will age 17 as a work force.
We multiplied that factor times the i
18 increase in population.
19 Secondly, there is an anticipated probably 15 20 percent increase in the number of people who are college 21 educated.
That adds another 15 percent to the national 22 expected income.
23 Now, we said tha t everybody would remain in the 24 same slot relatively and no increase in overall levels.
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25 this is a sinisus expectation extra pola tion. Secondly, if l
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ALDERSoN REPORTING COMPANY. INC, 1
400 VIRGINIA AVE, S.W. WASHINGioN, D.C. 20024 (202) 554 2345
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the GNP is equal to the minimum expectation there is no 2
growth in personal income and our low case, not the 3
intermediate case, providas a raro expectation income.
4 In the past the GNP has increascd from 1960 to '73 5
at about three and a half percent per year during the same 6
time.
Retrospectively looking at the expectation it was 7
about 1.7 percent.
So that there was a 1.8 or 1.9 percent 8
increase per year over 18 years in gross income to 9
individuals.
i 10 We are making the projections which I will give 11 rou very quickly now on the basis of zero or a one and a 12 half or one percent increase in expectation.
The 13 intermediate case is one percent and the low case is
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14 basically rero expectation.
There is no increase in 15 personal benefits.
The society remains static and any 18 adjustments between levels is done at the loss of those at 17 the top.
There is no upward movement of the whole 18 structure.
19 Now, that gives you a base line and I don't 20 recommend this as providing good social sta bili ty, but it 21 does give you a minimum upon which to base projections of 22 need for energy and tha t is what we did.
We quantified then 23 the gains that would be made by this national expected 24 income.
In time we will work this out but it is a s
25 teasonabla and understandable tc71.
ALDERSoN REPORTING COMPANY. INC.
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It is necessary that I give you some assumptions 2
concerning con serva tio n.
If you will look at page 7,
figure 3
4, you will see a little bit of our considecations there.
4 Basically the historic projection of energy growth 5
as you know would have taken us to the Year 2000 to maybe 6
150 or 160 quads.
We are assigning to conservation the 7
reduction below the trend line to the intermedia te case or 8
our low case and are sayinc that with sone careful 9
consideration we think that within the industrial sector and 10 end-use sector that a 25 percent reduction below the 11 historic level is necessary and probably achievable.
12 To give you some index, however, of what this 13 reduction below trend will require, in figure 4 you will 14 note that if we conserve 25 percent of the earlier trend the 15 industrial sector will have to save 17 quads, and that is a 16 38 percent increase in output productivity for each unit of 17 production in industrial processes.
18 So far as nearly as retrospective data vill yield 19 L,6 information it looks as though the industrial sector may 20 have picked up 17 percent since 1973 and the easy things 21 have been done.
Fron now on it may be substitution of 22 processes.
In steel it will be electric furnaces because 23 electric furnaces save 60 percent of the energy, total 24 energy, electric f urnaces a nd oxygen.
25 In the residential and con =ercial sectors, 11 r
I ALDERSoN REPORTING COMPANY,INC.
400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554-234S
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1 quads.
This means full insulation for 00 percent of all 2
buildings and passive solar for 50 percente of all houses 3
built after 1980.
Forty-two" percent of new homes with solar 4
space heating anf 25 percent of homes with active solar 5
water heatars'.
Now, these are examples and not what we are 6
recommending necessarily.
They are there to give you some 7
feeling for what saving that much energy means.
8 Transportation, 10 quads.
That means that gas 9
mileage of all automobiles have to be 10 to 29 miles per 10 gallon or more.
11 So we have taken off a pretty good slice of what 12 we think the inheren+ intrinsic demand in this GNP growth of 13 meeting expected incomes might be.
14 The next important factor is to give you some
15 f eeling for what we used as the basis for the couplina r
^
16 between price and demand.
Historically energy prices and 17 demand have responded with an elasticity, and I think you 18 are f amilia r with the term, of about
.25.
We have assumed 19 4 in the projections that you are looking at.
The most 20 avid conservationists in CONAES recommended
.6.
Our 21 coupling on price forcing conservation is 4 in th e se 2r trojections.
We haven't achieved that yet in 23 retrospectively looking at what is happening.
24 Last of all, the electricity fraction of energy.
25 I think tha t it is reasonably obvious that it is desirable i
ALDERSoN REPCRTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554-2345
21 1
to return to a ethic that was pcpular in the ene rgy wars 2
before 1970 and even throuch 1973; substitute electricity 3
for oil and gas.
Most of the world is going to this rapidly 4
and we are being lef t behind and I will make comments on 5
this at the close.
~
6 Ihe only basic major substitutes available for us 7
are solar passive heating, the rational use of natural gas 8
that will go up to $10 per billion Btu's by 1988 or '92 or 9
something like that.
10 COMMISSIONER GILINSKI:
What do you see the 11 electrical fraction going up to?
12 MR, CULLER :
Forty-five percent.
It is 30 percent 13 now.
It would be better if it were 55 percent, but we used 14 in these projections 45 percent electricity mostly fro: coal 15 and nuc3 ear.
16 COMMISSIONER GILINSKI:
This is when, in th e Yea r 17 2000?
18 MR. CULLER:
2000.
19 COMMISSIONER GILINSKI:
This is your intermediate 20 case or what?
21 MR. CULLER:
We assumed for the intermediate case 22 45 percent and for the-low case about 42.
23 CHAIRMAN AHEARNE:
'4 h at is your high case?
24 MR. CULLER:
The high case is aro und 50.
25 Ihis is not an unusual projection.
It is concert ALDERSON REPORTING COMPANY. INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 4345
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22 1
with most economic pro $ections that are made.
2 Now, it is important that you understand that 3
electricity is the muscle of industry.
I did a regressive 4
analysis that is wrong on the value of heat in product:
5 manufactured and the value of electricity in products 6
through the leontiev Tables..
Heat is worth about 525 per 7
million Stu',s and electricity is valued in the products that 8
it produces at around $37.50 and both numbers are wrong 9
because it is hard to get these data, but they are
~
10 relatively in proportion.
11 Electricity for production is worth 50 percent 12 sore than heat.
As a consequence electricity is the muscle 13 of industry and it is necessary to sustain the economy.
If 14 we curb electricity growth we will suffer and that is the 15 projection that comes through all of these economic analyses 16 no matter how you look at it.
r 17 Now, we looked at all of the sources, all of the 18 fuels for electricity.
You will find in the big document a 19 section on every one and I think we have been generous in 20 our allowances to hydro, geothermal, cogeneration, solar 21 wind and biomass and to the extent possible a major 22 expansion in coal.
23 I must discuss the restraints on coal.
We think 24 tha t the coal industry, and most projections now sustain 25 this, that the coal industry vill have difficulty expanding ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (202) 554 2345
23 1
at a rate of more than about four and half percent per 2
year.
The necessary production of coal in the Year 2000 to 3
keep minimum expectations is around 2.1 billion tons of 4
which the utility industry will burn maybe 1.a or 1.5.
5 You heard the President's announcement on energy 6
policy two days ago saying that we would expect 38 percent 7
of the world's coal supply by the-Year 2000 and this adds 8
sig nifica n tly, like to 3 billion tons or 2 8 billion tons by 9
the Yest 2000.
10 We think that the mining of coal, just getting 11 enough miners, in the West 16 men out of 100 would have to 12 be a miners by the Year 2000 just to supply that coal.
We 13 have looked at the rail lines, the slurry lines and all and 14 find the transportation networks insufficient to move that 15 much coal without major changes even in the big truck lines.
16 COMMISSIONER GILINSKI:
'J h a t does the National 17 Coal Association say about this?
18 MR. CULLER:
They say give us the coney and we 19 vill get you the coal.
20 (Laughter.)
21 MR. CULLER:
The National Rail Association says 22 give us long-term contracts at 520 a ton and we will rebuild 23 the railroads.
24 Now, the unfortunate part in the regulatory 25 business with the railroads is that recently it is now I
ALDERSON REPORTING COMP ANY, INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2345
24 1.possible for the railroads to charge differential prices for 2
any commofity.
It now costs $22 a ton to ship coal from 3
Montana to Texas and 56 to get it on grade and that occurred 4
over a period of two years.
So that the transportation 5
problems both in cost and feasibility are a restrain on coal. r 6
We say that somewhere around 2 billion tons will 7
bust our guts getting up in capacity.
If you talk through 8-the coal industry you will find a feeling that that is true, 9
but there are still boots and saddle diggers; give us the to money and we will get you the coal.
11 All right, with those constraints, if you will 12 look at figure 5 on page 9 you will see our runouts of P
13 several cases.
The intermediate case for what we consider j
14 to be the high nuclear requirement of 300 gigawatts by the 15 Year 2000 and the low case which we economically consider to 16 be basically a const,raint on the economy.
The low case is t
17 given, too, on the bottom of the high and low nuclear, or 18 150 and 300 gigawatts each.
19 let me give you then the summary of what we 20 project for the intermediate case, the generation mix, 21 assuming first nuclear of 150 gigawatts.
We assume by the 22 Year 2000, and all of our calculations indicate, that the l
23 maximum that we can generate on the supply side is of the 24 order of 1,040 gigawatts, or put in place 1,040 gigawatts f
25 capacity,with a requirement for 1,280 giga va tts.
We ALDERSCN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2345
20 1
anticipate a shortfall wi th 150 gigawatts of nuclear 2
straining it every other source, including 25 percent 3
conservation.
4 COMMISSIONER GILINSKI:
What do you mean by 5
requirement?
6 MR. CULLER:
To meet the scenarios, to maintain 7
the economic conditions which I specified.
8 COMMISSIONER GILINSKI:
What are you assuming is 9
the percentage $towth in primary energy u.se over those years?
10 MR. CULLER:
The intermediate case in primary l
11 energy use is two percent per year with electricity at the 12 intermediate of 4.4 percent.
This is shown in figure 2 on l
13 page 6 in the little table.
The low case is 1.3 percent for
\\-
14 total energy and 3.6 percent.
15 CCMMISSIONER GILINSKI:
Now, that is lower than i
16 you might say the long-term historic.
17 MR. CULLER :
Much lower.
18 COMMISSIONER GILINSKI:
Rut it is higher than the 19 rate for the past ten years.
20 MB. CULLER:
No, not in electrici ty.
21 CCMMISSIONER GILINSKI:
For primary energy.
22 MR. CULLER :
For primary energy it is higher.
The 23 1.3 percent is about the growth for the p ri ma ry.
24 COM7.ISSIONER GILINSKI:
For it would be less than 25 that.
i ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2345
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XR. CULLER:
A little bit, 1.1 or 1.2 cver seven 2
years.
3 COMMISSIONER GILINSKI:
Well, over ten I thought 4
it.was less than one percen t.
5 XR. CULLER:
If you get back before 1973 we were 6
still booming alcng.
Before 1973 we were on an historic 7
growth rate of 2.8 to 3.2 percent.
It was 1974 when we had 8
the depression and the economy started to slide.
9 Seventy-three quads in 73 and it had been 72 in '72 and 68 to in '70 or something like that and there had been a big spurt. i 11 COMMISSIONER GILINSKI Okay, 73 to 79 a little 12 less than one percent.
13 MB. CULLER:
That is right.
Now, that cannot be 14 sustained if the economy is going to recove r.
15 COMMISSIONER GILINSKIa I want to advertise a 16 little SRC card we have.
17 (Laughter.)
1 18 MR. CULLER:
I an adve'rtising our card here.
l 19 (Laughter.)
c 20 COMMISSIONER GILINSKI:
But we have it all on a 21 little three by five card.
L 22 23 CHAIRMAN AHEARNE:
It is on sale at the back.
24 (Laughter.)
25 MR. CULLER:
We think at the intermediate economic ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W, WASHINGTON, D.C. 20024 (202) 554-2345
27 1
case there vill be a shortf all in electricity capacity 2
assuming 45 percent of about 250 or so gigawatts and at the 3
high nuclear case 300 gigawatts of around 90.
Even at the 4
low economic case there is a shortfall with t 't e low nuclear 5
or 150 giga wa tts of r.round 100.
6 CHAIRMAN AHEARNEs Ho w much coal gigawatts do you 7
have there?
8 MR. CULLER:
Coal generation?
9 CHAIRMAN AHEARNE:
Yes.
10 MR. CULLER:
In the high case we assumed 117 11 gigawatts.of industrial electricity and this is in an 12 extrapolation of data, poor data that we managed to collect 13 and 100 for the low case.
We assumed that there would be 14 470 gi;avatts of real, that oil and gas would be reduced to 15 224 gigawatts, that hydro is 100 gigawatts, and that is 16 pretty high, that geothermal is 16 giga wa tts, and tha t is 17 high, that solar, wind and biomass are 10 gigawatts and that 18 is high.
That is electricity now and not heat.
And that we 19 provide storage for about 70 gigawatts.
20 We think we have been generous in allowing time 21 for the new technologies to come in and in allowing 22 transition from oil and gas.
What we foresee with these 23 minimum expectation minipulations of growth forced by 24 population incrense that sometime soon, probably by the 25 middle 1980's, we begin to see a shortage of ALDERSoN REPORTING COMPANY. INC.
28 1
electricity without major commitment to nuclear.
2 Easically it says this, that nuclear is the swino 3
because we have no great op tion of going to oil and gas 4
without significantly hurting ourselves economically and 5
strategically.
6 Coal may b,e restrained by a number of factors, 7
digging, supply, trains and all, and its maximum crowth rate R
historically during World War II was only three and a half E
percent pet year.
We are assuming four and a half percent to growth rate average on coal.
There are scenarios where 11 large quantities of coal liquids are made that would require 12 eight or nine percent growth rates on coal production which 13 we think are impossible.
t 14 Nuclear therefore is important.
150 gigawatts 15 will get us into severe shortages and with reasonable 16 economic conditions 300 gigawatts still provides us with a 17 shortfall in basic electricity generation.
18 COMMISSIONER BR ADFORDo You talked about a 19 shortfall in the mid *e0s.
20 MR. CUILER:
In certain parts of the country you 21 will begin to see electricity shortages.
What is happening 22 in the utilities, and Frank can speak to this better than I, 23 is that companies are not able to take on new demand for new 24 industry.
They cannot commit to a big block of cacacity in 25 certain parts of the United States ten years from now when a i
(
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE S.W., WASHIMIToN, D.C. 20024 (202) $54 2345
29 1
new industrial plant would come in.
2 Now, I hsve been tolf that quite a few of the 3
utilities, because of the uncertainty of what will happen 4
with nuclear licensing, uncertainty of shutdowns, the 5
uncertainly on coal and financial problems, are not in a 6
position now to commit future loads, big block loads in 7
several parts of the United States.
This will increase with 8
time.
9 PGEE, the biggest private utility, last summer ran 10 within three percent of its margin, and tha t is everything 11 out, all of their old plants, including the cid Gold Field 12 hydro where they started, and all of the power that they 13 could bring in from the regions.
They had everything on, 14 every old plant.
15 Now, this is occurring in Florida.
There were 16 rolling blackouts in Florida last week, th ree-hour shutdowns 17 in Florida Power and Light.
18 It will occur regio nally.
There is an excess, a 19 little bit in various parts of the United S ta tes.
20 Nonetheless, these are the preliminary signs of electricity 21 shortages.
22 Nuclear is essentially the only available swing, 23 or one of the two available swings that we have domestically.
24 COMMISSIONER 3RADFORD:
I had starting to ask 25 about shortages in the mid '80 's and you had said unless we ALDERSoN REPORTING COMPANY,INC, n -
o 30 1
have nuclear power.
Wht.t do you have in mind there.
i 2
Obviously no one is going to build a nuclea r plant between i
now and the mid ' 90 's starting f rom scratch.
Are you 4
talking about the plants already under construction being l
5 completed?
8 MR. CULLER:
That is essential.
The six or eight l
7 plants that are sitting around now should come on as soon as 8
possibli.
PGCE is in Sou thern California and we can 't burn 9
coal.
We can't license a coal plant in California.
)
10 So the nuclear stations that are in the pipeline 11 now are becoming necessary and integral.
In addition to 12 that they will come on providing cheaper power at the margin 13 than anything else that can be put on now.
14 COMMISSIONER BRADFORD:
I understand your point 15 with regard to particular regions and the plants awaiting 16 licensing and the ones that are under construction.
But 17 taken as a whole we are still seeing a lot moce 18 cancellations obviously than there are new orders.
19 MR. CULLER:
That is not due entirely to demand.
20 It is due, as Gordon and others will tell you, to other 21 reasons.
The utilities cannot sustain the commite.onts nov 22 required for a nuclear or a coal station of a million and a 23 half to two million dollars.
One station at times is more 24 than the net worth of the company.
there is uncertainty 25 about how long it is going to take to build.
The build time i
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (202) 554 2345
31
^
1 should be six or seven years.
The interest rates can't go 2
into the rate base, no thing can go in.
As a consequence the 3
utilities are strapped financially f or making ccmmitments.
4 The company is put at risk for these baseload expansions.
5 Let me tell you a little bit about what is going 6
on overseas.
I just returned from a Scientific Advisory 7
Committee meeting of the IAEA which I am still a member of 8
for the United States.
9 The realiration that nuclear is important is going to on overseas at a pell-mell pace and things have solidified 11 within the last year or the last six months.
They have 12 gotten over Three Mile Island.
They are reasonably sure of 13 the safety of the nuclear reactors.
You will hear voices to 14 the contrary but the planners are making th is.
15 I cite only one case.
The Japanese are going to 16 increase their comcitments from 28 gigawatts to about 51 17 gigawatts by 1990.
This decision was made in November.
The 18 French will be 60 percent nuclear in electricity by the year 19 2,000.
The Germans will build two reacters a year'for ten 20 years plus one or two breeders.
21 COMMISSIONER GILINSKI:
Of course Japan and Fra nce 22 are in different circumstances.
23 MR. CULLER:
Argentina with its great water 24 resources will have six reactors by the Year 2000 and be 25 ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2345
32 1
totally independent.
They are building Canadian heavy-water I
2 reactors.
They are building their on D C plants and have 2
3 all of the fuel manufacturing plants.
4 All nations are moving heavily into nuclear 5
beendse of the decided cost advantage.
6 CHAIRMAN AREARNE:
Some nations are moving into 7
nuclear with additional factors involved.
8 MR. CULLER :
Of course.
l 9
COMMISSIONER GILINSKI:
But the cost advantage is I
10 here, too, at least as you lay it out in your attachment.
11 What is it about their financiasi circunstances that allows 12 them to move forward?
Is it government utilities or wha t?
13 MR. CULLER:
Partially government utilities.
They 14 are spending much more for oil than we are.
15 COMMISSIONER HENDRIE4
~4 ell, I think f undamen tally 16 in one of these countries the electricity rates are 17 controlled by a multitude of independent ra te commissions 18 regionally which satisfies their own local interests and pay 19 no attention to regional considerations or the overall 20 national effect of depressing a particular enercy supply.
21 MR. STASZESKY:
We have two more centlemen we have 22 brought here, Mr. Chairman.
23 CHAIRMAN AHEARNE:
I can recognize when one has a 24 stirring message there is a tendency to get wrapped up in it.
25 (La ugt.ter. )
ALDERSoN REPORTING CoMS ANY. INC.
400 VIRGINIA AVE., S.W WASHINGTON. D.C. 20024 (202) 554 2345
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"R.
STASZESKY:
Gordon, would you like to go next, 2
please.
3 CHAIRMAN AHEARNE:
Floyd, you have a larger volume.
4 MR. CULLER:
Yes, I do, and I will make it 5
available to you.
6 MR. STASZESKY:
I might say we have the day.
I 7
presume th,a t you gentlemen may not.
i 8
CHAIRMAN AHEARNE:
You are right.
9 MR. STA52ESKY:
We would be happy to continue the 10 discussion as long as you wish, but I would like to have an 11 opportunity for Gordon and Herman to make their comments.
12 13 i
14 15 16 17 18 19 20 21 i
23 t
24 25 j
l i
ALDERSoN REPcRTING COMPANY,INC.
i 400 VIRGINIA AVE., S.W., WASHINGTcN. D.C. 20024 (202) 554 2345
34 1
PRESENTATION OF GORDCN C. HUR LBES T 2
PRESIDENT, PCWER SYSTEMS CO.,
WESTINGHOUSE ELECTRIC CCRP.
3 ON 4
WESTINGHOUSE'S VIEW ON FUTURE NUCLEAR POWER GROWTH 5
- 53. HURLBERT:
Westinghouse believes that there is 6
a nuclear imperative in the vocid and anything that I say 7
has to be taken in that context.
We believe that if we are 8
going to have political stability we have to raise the 9
standard of living of the people of the world and that can 10 only be done with increased energy and tha t nuclear is the 11 only viable source for a gr eat deal of that energy.
12 So anything that I say from this time forward 13 should be in the context that we believe that there is an k-14 imperative and that it is going to happen and it is 15 happening in the rest of the world.
/
18 Our company has on order 41 domestic plants that s
17 are under construction or on order and we have 24 foreign 18 nuclear plants that are on order or under construction at 19 this moment.
20 It is my dudgment that six o f the u1 domestic 21' plants vill be cancelled before additional domestic orders 22 are received.
Barring an oil embargo or increased military 23 activity in the Mideast we do not see a new domestic order 24 until 1983 or 1984 and then only if the government gets its 25 act together.
l
+
l
(
l ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON D.C. 20024 (202) 554-2345
35 1
I cannot see a utility president tr.4s year riskino 2
his shareholders' equity by order a nuclear plant under 3
today's unrettain regulatory climate.
4 Valkorae-1, thirty-one months after it went 5
commercial, has already paid for itself to give you some 6
feel.
The differential in the oil costs and the fuel costs 7
has already recovered for Korea the value of the cost of the 8
plant that they paid us to build the plant.
G While that happens of course GPU stands on the 10 brink of bankruptcy helpless to clean up Three Mile Isl a n d -2 11 or put Three Mile Island-1 back on line.
i 12 While we built Owi and just brought it on line in 13 Japan, sixty-one months after the signing of the contract 14 with Kansi Electric Salem-2, a sister unit adjacent to an 15 already lirensed plant, is unable to be licensed.
16 A magnificent shipyard stands idle in 17 Jacksonville, Florida, with no license to build a floating i
18 nuclear plants more than eight years after application for 19 such a licenso.
20 Now, nuclear business represents less than nine 21 percent cf Westinghouse's sales bill.
So it is not 22 particularly important to our company.
But in my judgment 23 it is vitally important to the industrial base of America.
24 What is going to happen in the nuclear business in 25 the United States is first we are going to close up most of ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
36 1
our manufacturing capacity.
As you ha ve already noticed, we 2
a r e g o.'.. g to close up our very large Ta/pa facility.
3 Westinghouse at least is going to keep its engineering l
4 expertise perhaps gradually dispersing it outside the United 5
States.
6 One of the g reat tragedies of our inability to 7
quickly reach decisions in the United States is that we are 8
going to lose our great leadership that we have had in the 9
safety arena.
If we look a t the past we have sold plants to 10 U. S. safety standards.
Those standands have been 11 recognized as viable safety standards and as the safest and 12 the most cost competitive in the world.
I 13 Because of our inability to arrive at decisions in 14 the United States each coun try is now embarking on its own 15 set of standards.
The French are eagerly working on their 16 set of standards.
There is a good chance the British will 17 develop their own set of standard -
The Japanese are on the 18 verge of deviating f rom American standa rds.
19 The tragedy of that is that instead of having 20 worldwide that recognize the leadership of the United States 21 we are going to have a proliferation of standards and, in my 22 judgment, a weakening of safety standards around the world.
23 So we are going to have less safe plants around the wcrld 24 than we wc.e coing to have la the past.
25 COMMISSIONER GILINSKI:
Could I just interrupt you ALDERSON REPORTING COMPANY. INC.
G3QNIA AXL O.W WASHINGTON D.C. 20024 (202) 554-2345
37 1
and ask you what kind of standards you are talking about?
2 MR. HUBLBERT:
Total regulations.
7 tal regs.
3 Each of these countries are going to develop their own set 4
of regs.
As you know, the German regs. are not any 5
dif ferent but their concept is different.
6 COMMISSIONER GILINSKI:
But we certa-inly have a 7
aore, at least at this point I think, a more complete set of i
8 standards than anyone else.
I was wondering what it is 9
about them that causes others to go off on their own.
10 MR. HURLBERT:
Le t me answer first your question 11 of why the rest of the world is moving very rapidly in 12 nuclear.
Nuclear is only the chearast if you build it 13 rapidly.
The cost of nuclear isn't in the fuel, the cost of 14 the uranium and the fuel fabrication.
It isn't even in the 15 anrichment.
The cost is the capital cost.
The reason tha t 16 these are economic plants overseas are that they can be 17 built rapidly.
18 Most plants in the world are built where effective 19 we get a construction permit and an operating license to the 20 existing set of ragulations.
We build the plant to a set of 21 standard regulations.
In the past it has been primarily 22 U.
S.
standard regulations as of the date of the plant 23 order.
That reduces immeasurably the cost of the plant and 24 in my judgment substan tially improves the safety because 25 there isn't the rip and tear that we have with changes in I
ALDERSoN REPORTING COMPANY,INC, 400 VIRGIN 1A AVE., S.W., WASHINGTON D.C. 20024 (202) 554 2345
38 1
regulations on nearly a daily basis.
2 Now, I would just lik e to add a little bit on what 3
is going on in the world.
In the next 18 months we will be 4
com pe ting f or business for two in Korea, two in Italy, two 5
in Taiwan, fcur in France, that will be through our 6
licensee, two in Spain, four to six in Japan, two in 7
Belgium, two in China, two to twenty in Mexico, two in South 8
Africa and we will be talkinc with Ireland, Portgual, 9
Greece, Egypt and Israel who will be talking about it but I to don't think have the wherewithal to build.
11 COMMISSIONER BRADFORD:
Two to twenty in Mexico?
12 MR. HURLBERT:
Two to twenty in M exico.
13 COMMISSIONER BRADFORD:
Twenty by when?
14 MR. HURL 3ERT:
They want them onstream by the Year 15 2000.
Portillo would like to award two before his speech in 16 September and it will be like England, an order for one or 17 two and an option for 18.
But they are going to move 18 forward just because of economics.
19 Now, we are going to build a lot mo re in th e 20 United S tates, too, because the need is there.
America has 21 been sleep industrially.
We are going to have to 22 reindustrialize this country and we will.
We have 23 awakened.
But it is not g c.' n q to happen and they are not 24 going to build nuclear plants until we can get the 25 u ncer tain ty out of the licensing process.
We need l
ALDERSoN REPORTING COMPANY,INC, i
o 39 1
expeditious licensing.
2 In the short term what is going to happen is how 3
fast we are going to licente units that are now under 4
construction, including Diablo-1 and Three Mile Island-1.
5 It is going to depend on how soon we start granting 8
construction permits.
It is going to be de termined by 7
whether we expediously handle the floating license because 8
it is a forerunner of what we really need which is a generic 9
pl' ant license within an enveloce and site bankinc 10 independent an( a construction permit and an operatinc 11 license essentially at the same time.
Once a plant is 12 licensed, once you obtain a license on that particular plant 13 no reg. changes apply unless there is a significant safety 14 issue.
With those things we will sell one hell of a lot of 15 nuclear power plants.
It is going to happen and it is just 16 a question of how long.
i 17 We have an Administration and we have a Congress 18 that will pass the laws that it takes to make this happen 19 where you do not have the statutory authority-to do it.
I 20 am hopef ul that your leadership under the climate that we 21 have now will let that happen so that we can cet on with the 22 job and have the same stande;d of living for our children 23 tha t we have ourselves.
24 Thank you very much.
25 COMMISSIONER BRAJFORD.
When you sa y a ALDERSoN REPORTING CCMPANY,INC, 400 VIRGINIA AVE., S.W. WASHINGTON. 0.C. 20024 (202) 554 2345
40 1
construction parait and an operating license at the same 2
time, does that mean that you all are really prepared to 3
build a plant on the basis of a design that would be 4
licensed at the CP stage without making significant changes 5
from that until the time the plant is completed and ready to 8
be operated?
7 MR. HURLEERT:
Yes.
8 COMMISSIONER GILINSKIs But we haven't had that 9
situation by and large up to now.
It seems to me tha t is 10 one of the elements in this uncertainty you speak about.
11 Clearly we all want th e system to work better and more 12 smoothly and more predictably.
13 MR. HURLBERT:
The uncertainty is what kills us.
!'~
14 COMMISSIONER GILINSKIs of course.
But a 15 comparison has been made with France.
Well, you have got 16 one vendor selling basically one reactor to one buyer, to 17 one utility tha t does its own construction.
You have get a 18 very different governmental system, too.
You have got one 19 highly centralized state and not the system we have here of 20 50 states.
l l
21 Here we are dealing with several vendors an'd a l
l 22 dozen or so architect / engineers.
We are in volved with 23 upwards of 60 utilities and we have got 50 states that have 24 their interests in all of this.
So it is just a very l
25 different situation.
i ALDERSON REPORTING COMPANY. INC.
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I must say I was impressed.
I had a brief 2
experience on e licensing board which ended becaure the 3
utility withdreo its application.
But in that case they 4
were expanding on a site which had been approved earlier 5
which was well established on which they had three 6
reactors.
They were adding two in fact identical reactors.
7 In that case the NPC staff review took literally six 8
months.
The hearing didn't go forward but I would quess 9
would have certainly not taken more than a year and might 10 have taken six months.
11 What I am trying to say is that given the same 12 conditions that you point to with approval from aboard I 13 think one can get the same results here.
It is that we 14 haven't had the same conditions on the ir.dustrial side.
15 MR. HUBLBERT:
Well, that is not quite true, 16 Commissioner.
In Japan you have a half a dozen utili ti es 17 and you have three vendors.
There it is done essentially as 18 I am saying it is done and there we build them in about five 19 years.
20 CHAIR 3AN AHEARNE:
Go rdon, one af the issues that 21 is often raised at least to us is that the utility and the 22 vendor when they come in with a license application have not 23 solidified all of the major fea tures of the reactor.
So one 24 of the claims that is made is that when it comes time for
".5 tile opera ting license the plant that has been built may not ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON. D.C. 20024 (202) 554 2345
42 i
1 resemble the plant for which the construction permit was l
2 applied.
Is that an accurate description?
3 MR. HURL 3ERT I am not saying tha t we ha ve opted l
4 well either as a supplier industry, as architeat/ engineers 5
or as utilities.
I am suggesting that the industry is in a 6
position in my judgment at least from our point of view to i
7 move forward on the basis that I have suggested.
Obviously i
8 you would have to ask the utilities, the architect / engineers 9
and other vendors.
But there is no reason why you cannot 10 generically license a plant in my judgment.
There is no 11 reason why that can't be generically licensed within an 12 envelope of that site.
That site has to have certain 13 seismic characteristics and so on for maybe two or three 14 plants.
There is no reason why that can't be done.
There 15 is no reason why you can't license sites and then you can 16 put a predetermined plant on that site.
17 That is of secondary importance, though.
Of 18 primary importance is no reg. changes once you have got an 19 operating permit.
There is a very persuasive a rgument why 20 that is all right I think unless there is a major new l
21 decision.
22 CHAIRMAN AHEARNE:
But my question really is, let 23 us say that the NRC decidos and if necessary the Cong tess 1
24 agrees or the NRC decides and it is not necessary for 1
25 Congress to agree that if a plant receives a construction ALDERSoN REPORTING COMPANY,INC, C$i)QlNIA AV19.W WSNGToNo D.C. 20024 08%) 554-2345 y
43 1
permit then it has an operating license against the regs.
2 that were in existence at that time.
Do you think the 3
industry is prepared to make the other side of it that there 4
will be no major changes in that plant?
5 MR. HURlBERT:
I think so.
6 CHAIRMAN AHEARNE:
And that the basic information 7
will be available at the time of the construction?
8 MR. HURLBERTs I think so.
9 COMMISSIONER GILINSKI Let me ask something else 10 about your statistics about Japan about the time it takes to 11 build a plant there.
I am interested to hear what you say.
12 There was a report I think bv the Rockefeller Foundation 13 Group on Energy which compared the length of time it took to
(
14 go from concept to operation in various countries.
As I 15 recall, Japan was pretty much up with the United States on 16 average.
1/
MR. HURLBERT:
Ah, but there is a big difference.
18 Once the site is selected then it is go.
Then we can build 19 it.
They have a very, very difficult time obtaining sites.
20 They just 7 ave 130-man fishing village I think $8 million of 21 reimbursement for the fishing rights to get the latest site 22 where we are going to build the next two.
They have a very,
23 very difficult job getting site s.
That is a long and 24 time-consuming thing.
That is true in many parts of the 25 world.
Italy has an unbelievably difficult time.
Spain has ALDERSON REPORTING COMPANY. INC.
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44 1
a difficult time.
But once the site is selected and they 2
say go, then we build the plant.
3 COMMISSIONER GILINSKIs Well, one could have them 4
use a separate site approval from the building of the plant l
5 and approval of the design now I think sufficient to 6
accommodate the things you are talking abo.:.
It can 7
improved somewhat by widening the class of applicants and so 8
on, and I am all for that and I think everyone else here is.
9 I think we really do have the tools if industrial 10 organizations will come in with essentially complete designs 11 which they haven't up to now.
I mean, we have been faced 12 with preliminary designs.
That is the reason for jockeying 13 at la ter points because the design was not there.
It is not 14 like building an airplane.
It has been more like buildino 15 an airport.
16 (Lauchter.)
17 MR. HURLBERT:
Well, certainly the industry has to 18 get its act together, too, and that includes our customers, 19 the architect / engineers and the vendors.
The opportunity is 20 here if we, being all of us, and you get our act together.
21 I don't mean to take too much time.
22 CHAIRMAN AREARNE:
Perhaps Yr. Hill might like to Z3 go ahead.
24 25 ALCERSoN REPORTING COMPANY,INC, t
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PRESENTATION OF HERMAN R. HILL 2
EXECUTIVE VICE PRESIDENT, POWER SYSTEMS SECTION 3
0F THE GENERAL ELECTRIC COMPAFV 4
ON 5
GENERAL ELECTRIC'S VIE'4 ON FUTURE NUCLEAR POWER GROWTH 6
MR. HILL: 'Let me just make a couple of 7
preliminary comments.
I agree alnost a hundred percent with 8
what Gordon said.
9 I want to refer to a couple of examplas of things to that I think have to be done.
Now, I am not here to sit in 11 criticism of anything that has happened because I think over 12 the last four years we have really had an environment that 13 is not conducive to getting much of anything done, t
14 particular the nuclear.
15 (Laughter.)
16 MR. HILL:
I am in hopes that we are going to have 17 an Administration and an environment now that will let us 18 get on with the things tha t we have to do.
19 I believe that it is generally accepted in this 20 c.$untry that productivity has to improve over what we have 21 had over the lest six or seven years if we are going to 22 con tinue to be a world power.
Certainly our prestice is at 23 a very low point overseas now and not just because of the 24 hostage situation because of our ability to complete in 25 overseas markets because of lack of productivity.
ALDERSoN REPORTING COMPANY,INC, p
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Productivity is directly related to energy.
2 Unless we do something about the energy piece of that 3
equation va are not going to recoup and gain our rightf ul 4
position as a worldwide power again.
L 5
The only options we have in this country for the 6
next 20 or 25 years that I am aware of, and we are working 7
on every one of the renewable resources we know how to work 8
on, but the only options we have got are coal and nuclear.
9 There just aren't any others.
10 We are going down the drain very fast on nuclear.
11 If the present Administration that just went in yesterday 12 doesn 't insediately do something relative to the nuclear 13 option we will have it any longer.
That is my personal 14 opinion.
15 COMMISSIONER GILINSKI May I interrupt you to ask 16 you what you have in mind there?
17 MR. HILL:
Well, wha t I really have in mind is I 18 thin we have got to have a strong fcrceful voice that says 19 we have got to have nuclear in this country; somebody.
We 20 have not been saying that.
We have been talking to each 21 other. The general public really does not conceive that we 22 have to have nuclear today.
We have to do somethinc to 23 influence that I think if we are going to do what we have to 24 do.
25 My numbers agree with Gordon's.
I think there are l
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not going to be any orders placed on nuclear plants until 2
'83 or
'84, at least that is the way I read it and that is 3
pretty close with what Gordon says.
4 CHAIRMAN AHEARNE:
Do you agree with Floyd's 5
argument?
6 JR. HILL:
Well, I might disagree with a couple of 7
his numbers.
I don 't know as the load growth in this 8
country is going to be three and a half percent.
9 CHAIRMAN AHEARNE:
Which side would you put it on?
10 MR. HILL:
I would sa y it would be closer to two 11 and a half to three.
12 CHAIRMAN AHEARNE:
Okay.
So you would say that 13 the demand will be less.
14 MR. HILL But nevertheless, the real problem is 15 still there by whatever number you pick.
Just as fast as 16 the utilities' reserve margins start down, and they have 17 already started down, then we are going to have some lack of 18 electricity in various parts of this country.
Therefore, we 19 are not going to have a productive nation and we are no t 20 going to be able to provide the jobs we have-got to provide 21 for the youngsters coning up.
We are net going to take ca re 22 of the minorities.
They are not getting jo bs today.
This 23 is going to cause social revolution and it is all related to 24 energy.
I think that is what Floyd said very clearly.
25 I just want to tell you that General Electric is ALDERSoN REPORTING COMPANY,INC.
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48 1
not in this business fundamentally because it is a grea t 2
mon ey-maker.
3 (Laughter.)
4 MR. HILL:
General Electric is in this business 5
and intends to try to con tinue its option o f being there 6
when needed simply because we look at it as some other 7
scelal responsibility.,This doesn't make up any crest 8
income producer for General Electric as a percent of its 9
total.
So that is not why we are there.
We are there 10 because we truly believe that it is something that has to be i
i 11 done for this country.
1.1 Let me cite a couple of instances.
This is not in 13 criticism, believe me, of anything.
I just want to cite 4
14 some examples.
15 We currently have got three EWR reactor plants 16 that still do not have construction permits, Adams Creek, 17 Black Fox and Skagit even though the PSARs were submitted in 18 1973 through
'75.
Now whose fault is it?
I don 't know if 19 it is ours or if it is somebody else's, but collectively we 20 have got to de something about that.
All three of these 21 were orderad in 1973 with up to three to five years of 22 construction and $100 to $200 million sunk utility cost per 23 project.
Someone is paying that bill; the consumer is 24 paying it.
25 CHAIRMAN AHEARNE:
But I am sure at least on one, l
i l
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ss you know, on Skagit they shifted the site.
2 3R. HILLS I understand that.
All I am saying is 3
collectively as a country we have to do something about 4
this.
That is the point I am trying to get across.
5 By contrast in Taiwan Oshang was also ordered in 6
1973.
Construction was completed this past October and fuel 7
is being loaded.
That is a fundamental difference of what 8
you can do overseas versus what we are doing here.
So 9
collectivel'y we have got to do something about it.
10 There are four B'AR reactors that now require 11 operating licenses which you fellows know better than I do, 12 LaSalle-1, Grand Gulf, Zimmer and Susquehanna.
These four 13 reactors were ordered in 1967 through
'71.
The PSARs were 14 submitted in 1975 through the year 1977 and fuel loading is 15 expected this year.
Look at'the difference in the time 16 cycle.
17 By contrast Tokai-2 and Fucshima-6 were ordered in 18 October of 1971, fuel was loaded in Tokai in December o f '77 19 and in Fucshima on January of 1979 and Tokai has been 20 operating for 26 months and Fucshima for 16.
21 COMMISSIONER GILINSKI:
Can I ask you about those 22 cases.
Did they have the site approved at that point?
23 MR. HILL I am not positive I can answer that.
24 COMMISSIONEP GILINSKI:
That makes a bic 25 difference.
1 s
ALDERSoN REPORTING COMPANY. INC.
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MR. HILL:
I believe that these are comparable 2
times with respect to the situa tion.
3 COMMISSIONER GILINSKI:
Well, when we are 4
reviewing a plant we s re reviewing the site at the same time.
5
- 38. HILLS I understand.
I am just sorry I don't 8
have the answer for you.
That is all.
7 CHAIRMAN AHEARNE:
As you know, in many of these 8
countries you mentioned, in Taiwan and Korea, for example, 9
the site selection is very much a government action.
10 MR. HILL:
I understand.
11 COMMISSICNER GILINSKIs As it is largely in 12 France.
It is s different political system.
(
13 MR. HILL:
I am not talking about France.
I am 14 talking about Japan, Taiwan.
I 15 CHAIRMAN AHEARNE:
As Gordon just pointed out, as 18 you know in Japan the site selection process is a very 17 caref ul development negotia ted settlement.
On,ce the site is i
18 selected a large part of the hurdle that in this country 19 comer at the same time as the application is filed and 20 proceeds a pace with it.
21 MR. HILL I am aware of that.
22 COMMISSIONER GILINSKI:
Incid e n ta lly, in raising 23 questions about all these figures I don't want you to get 24 the impression that I don't think that we ought to be doing 25 better, all of us collectively.
r i
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MR. HILLS I understa nd.
2 COMMISSIONER GILINSKIs It is just that I think 3
that in making these comparisons we need to be very careful.
4 3R. STASZESKYa I guess, Commissioner Gilinski, I 5
can't restrain myself from commenting 6
(Laughter.)
on the question you were 7
MR. STASZESKYa 8
raising about sites.
Pilgrim-2 does not have a construction 9
permit today.
It was docketed in the Fall of 1973.
It is to on a site that has an operating reactor on it.
11 COMMISSIONER BRADFORD Don't we have a problem 12 with a number of these cases that are being sited in that 13 they are all before hearing boards?
14 CHAIRMAN AHEARNEs Ihe General Counsel would like 15 to say something.
He has finally come up out of the 16 audience.
17 MR. BICKWIT I have been listening to this with 18 great interest.
dy feeling is that what you are saying here 19 is essential for the generic propositions that you are 20 putting forward, that you would not be able to make the 21 points in the way that you are making them without citing 22 these examples and therefore I think it is legitimate even 23 though we do have proceedings.
24 MR. HILLS I am just drawing some comparisons.
25 That is all.
That is my point.
ALDERSoN REPORTING COMPANY,INC.
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52 t
1 Ihe two Japanese plants that I talked about use 2
the same reactor and contain the design of the LaSalle plant 3
which was ordered in 1970.
It is constructed and is 4
awaiting its NRC operating license.
There is a fundamental 5
difference between what has happened.
6 Now, I guess in conclusion all I really want to 7
say is that I be2.ieve we have a new environment that is 8
coming up, I hope.
I believe we ought to take advantage of 9
that collectively and we need collectively for the good of 10 this country to have the nuclear option available.
11 CHAIRMAN AHEARNE:
Thank you.
12 Frank, is that it?
13 MR. STASZESKY:
That completes our presentations.
14 We would be happy to respond to que s tio n s.
P 15 IHAIRMAN AHEARNE:
Let me ask you a question based 16 upon perhaps not your role as AIF but more as a utility 17 executive.
One of the issues that is obviously out here is 18 that there is a projection of increased need in electrical 19 generation.
There is the concern titi muclear power is 20 being able tc meet that due to J t:414 ory problems amongst 21 others, a.
certainly the rease.n you guys are here is 22 because you see regulatory problems.
23 There is the issue that has been raised several 24 times of why aren't utilities, however, willing to to 25 ahead.
I guess the answer is that the length of time it
\\
l ALDERSoN REPCRTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
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takes between commitment and operation is too long.
How 2
much shortar does that have to be to make a break point to 3
where a utility is willing to m ak e that kind of a 4
commitment, or is the cost of a plant so high that unless 5
utility commissions are willing to put construction work in
~
6 progress into the rate base and they still wouldn't be 7
villing to do it?
8 MR. STASZESKY I cannot give you a break point, 9
you know, like seven years or ten years, Mr. Ahearne, 10 because I simply don 't have that number.
11 CHAIRMAN AHEARNE:
No, I understand.
12 MR. STASZESKY:
But I think I can answer it in a 13 little bit different way.
A generating unit today, a new
(_
14 nuclear power plant today, and in some respects coal is not 15 far behind, but the nuclear plant today, its final costs 16 without construction work in progress in the ra te base is 17 double the actual cost of the plant.
In other words, a $2 18 billion plant could be built for a billion dollars for the 19 actual hardware, engineering 20 CHAIRMAN AHEARNE:
Construction and labor.
21 MR. STASZESKY:
--- and the actual cost of the 22 plant.
The balance of the cost is inflation and allowance 23 for funds used during construction, interest, which is 24 capitalired into the plant.
25 So it is because that in increasing at that rate, ALDERSoN REPORTING COMPANY,INC.
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because of the hich inflation rates, double digit infla tion 2
and the inflation rela ted to time, of course, plus the 3
accounting requirement of building the interest costs, the 4
carrying costs into the final costs that with uncertainty as 5
to when th a t comes to an end there is no way you can go 6
forward.
7 So I think we have two things to contend with.
8 One is to reduce the time so that the interest costs are 9
reduced and so that the effects of inflation are reduced, 10 and secondly, to reduce inflation.
Inflation is the great 11 enemy of this country.
I d on 't think anyone in this room 12 would argue with that or probably any thinking person in the 13 country.
We must get infla tion down.
14 But even if we did have inflation down to some 15 reasonable number, if we don 't know when we start when we 16 are going to end and then we continue to have the interest 17 building into the cost of the plant, that is simply not a 18 financially viable thing to do.
19 CHAIEEAN AHEARNE:
So you don't see any 20 construction work in progress treatment as being essential 21 to solving the problem, but putting some kind of specific 22 certainty, er whatever you want to call it, into the 23 reculatory framewot.t you feel would be the critical elemen t?
24
.5R. STASZESKY.
I believe that is a critical 25 element because then at least we could calculate with some ALDERSoN REPORTING COMPANY,INC, 400 VtRGINIA AVE S.W, WASHINGTON, D.C. 20024(202) 554 2345
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what e final costs are but at the moment we don't know the 2
costs.
The only way to cope that I can see with the present 3
situation is to shift the burden of the increased costs to 4
someone else.
In other words, if there is an uncertain ty of 5
what the final cost is, then someone with an infinite 6
resource will have to assume the responsibility to meet the 7
final gosts.
8 If we could determine the final costs with 9
assurance we could then make a judgment that we could or 10 could not finance the plant.
11 CHAIRMAN AHEARNE:
Do you see utilities being 12 willing at the time of going forward with their construction 13 application to agree with the vendor or architect / engineer 14 that that is it, here is the complete design, the 15 essentially complete design and we aren't going to make any 16 changes?
i 17 MR. STASZESKY:
You know, you have to be very 18 careful with what is in people's minds when they use the 19 word " complete."
If that meant that they had made 20 absolutely no change whatscever, I think that is unlikely.
21 Things happen as you go along and you make miner changes in i
22 design.
The basic principles of design tha t would be 23 concerned with safety, the basic principles of meetinc 24 reculations, I believe we could go forward with assttrance 25 that we could maat what is in place at the time we are ALDERSoN REPORTING COMPANY. INC, 400 VIRGINIA AVE., S.W., WASHINGTCN. O.C. 20024 (202) 554 1345
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making the commitment.
2 The problem is that over these long periods of 3
licensing time in fact the regulations do change.
Items 4
that are settled in the process, early in the process, 5
become reopened later in the process if it isn't closed up 6
early on.
7 So when you have a process that runs three years, 8
four years or seven years, almost infinite, you know people 3
are making changes in what is required of the utility.
It 10 isn't just your requirements, it is EPA's requirements, you 11 know, the world doesn't stand still.
12
-B u t, on the other hand, these same requirements 13 are visited on the operating plants.
So I think we have to 14 approach this with reason.
When once it is. agreed that a 15 given fundamental design, and actually the nuclear steam 16 sunply design doesn't change during the course of the 17 process ---
18 CHAIRMAN AHEARNE:
How about the balance of plant?
19 CHAIRMAN AHEARNE:
The balance of plant won 't 20 change f rom any safety or meeting a regulatcry requirement 21 point of view.
It may change from the point of view of 22 improving the efficiency it it is, let's say, a pump or a 23 heater or a device.
I mean, sclid sta te gets build into 24 controls at an increasing rate and these are in fact 25 better.
I think those kinds of changes could be evaluated ALDERSON REPORTING COMPANY. INC.
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outside of the given plant process on a generic basis to 2
assure that whatever change is taking place in the 3
components that go into plants do not introduce or infringe 4
on the regulations and standards that were in effect at the 5
time that the plant was committed.
6 Obviously if a change is made during the course of 7
the design or even during the course of the construction 8
that is so important, some fundamental issue has been found 9
that wasn't.known at the time the plant sta rted, then it to should be visited on all the operating pla n ts.
But if it is 11 not of sufficient importance for that, then I say it is not 12 of sufficient importance to upset the process that was set 13 in motion when the construction permit was issued.
14 CH AIB.5 AN AHEARNE.
Let me ask a final question and 15 then I will turn it over to Vic.
Once the plant has got its 16 construction pe,rmit and is working down tha t line to get an 17 operating license the argument at least that a bunch of our 18 staff makes is that you can back up when the operating 19 lirense material has to be submitted in order usually, and I 20 recognize that we are now running into what would be called 21 unusual situations, but usually such tha t when the unit has 22 completed construction and is ready to fuel load the 23 operating license hearing can be completed.
24 If that is true, then you thesis would be that the 25 engineering change orders required because of changing ALDERSoN REPORTING COMPANY,INC, 400 %IRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
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regula to ry environment stretch out that time from 2
construction permit to operating license; is that correct?
3 MR. SIASZESKY:
Yes.
4 CHAIRMAN AHEARNE:
That would then be the 5
principle regulatory problem that is embedded; is that 6
correct?
7 MR. STASZESKY:
Well, it seems to me that there 8
are two problems.
One is, first of all, the time of the 9
frontend between docketing and receiving the conctruction 10 permit.
Actually when the PSAR is submitted that is based 11 on a body of regulation and sta ndards which are understood 12 at that time.
Through the review process changes may occur 13 so you come back and you change.
This keeps stretching 14 things out.
15 I think even in that period of time it is 16 important to define what body of standards and regulations 17 this pa rticular plant is going to have to meet and 20ve 18 forward expeditiously to see will it or won't it and get 19 that straightened out.
20 Now, supppose that took one year or 15 months.
If 21 in month 11 or month 14 a regulation is changed, I think we 22 should look at see is it absolutely necessary to put that 23 back into this process.
24 MB. CULLER:
". hat is Gordon's idea of sort of 25 grandfathering basically, the argument being that if you ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
59 1
approve the plant initially, the construction permit in 2
concept and operating permit, that reactor is likely to be 3
safe and you ao wit the regulations then in progress.
The 4
next reactor takes on the new standards that are there in 5
effect.
6 COMEISSIONER GIIINSKIs Eut, Floyd, this is all 7
part of an overall dea 1 with allowed us to get started 8
early.
The deal was basically, yes, so far as we can see, 9
this is the basis on which the plant can be built and 10 operated but if we find anything along the way that is 11 pretty important and we think ought to be included it is 12 going to have to be included.
That is really the basis on 13 which everyone went forward.
(
14 Now, when things then come up you can't say, wai t 15 a minute, you said it was safe before so it is safe now.
16 Well, we have learned more and we have discovered along the 17 way we have learned quite a few things.
Now, that is not to 18 say that every decision was a right one or that every 19 change, you now, in retrospect had to be made, but that was 20 the basic arrangement.
I. don't think one can complain about 21 it when we discover one or another important safety problems.
22 Now, it seems to me to have a firmer arrangement, 23 and I think one can have that, and I think it wculd be an 24 impovement, it requires a change on both sides.
I think a 25 prerequisite f or that is that applications be, I won't use ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVEc S.W< WASHINGTON O.C. 20024 (202) 554-2345
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the word " complete" but escentially complete in the sense 2
that instead of dealing with a reactor that is in an 3
engineering sense 20 percent designed one is dealing wi th 4
one that is substantially designed.
5 In those circumstances I think this agency can 6
conduct a review that is a much faster one and also, after 7
having initially approved the basic design, can stick more 8
firmly to those decisions.
9 It is not surprising when one deals with a 10 preliminary design, and in fact at the end of a construction 11 permit proceeding you may sti'll be dealing with a reactor 12 which is, I don't know what, maybe 30 percent or maybe 40 13 percent, or it may be less than that, designed in an 14 engineering sense that there is a lot of uncertainty about 15 the process.
16 Since by and large the vendor part really is 17 f ai rly standard and is complete, that means the baJance of 18 plant is where one needs to put a lot of artenrion and to 19 try to standardize that aspect of it.
20 CHAIEMAN AHEARNE:
Gordon, in your experience in 21 dealing with overseas plants can you contrast the amount of 22 design work that is done on the balance of plant going in as 23 opposed to here?
Is it the same?
24 MR. HUELBEET:
'J e l l, it depends a great deal.
25 Some plants here are essentially duplicates of one that has i
l ALCERSON REPORTING COMPANY,l' f
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61 1
been built bef ore and the architect /enginee ring work is 2
essentially done.
Some of course we are startino right from 3
scratch with a new architect / engineer and a new nuclear 4
steam supply system.
We of course try to sell duplicate 5
plants overseas because you save all the costs of the 6
architect / engineering and you save costs because you have 7
got as-built drawings.
8 The big different is that we only design and build 9
to the regs. as of the date of contract signing.
That is to the big, big difference.
When we build one here in the 11 states our rip and tear and the time is half the cost of 12 building the plant.
Begs. change to the point where half 13 the time of our people are rip and tear.
The result is that 14 the productivity if just terrible.
It just affects our 15 craft people terribly to weld a pipe today and tear it down 16 tomorrow.
It just won't work.
It isn't the union and it 17 isn't the work ethic, but it is the rip and tea r that we 18 do.
Over there we just build it.
19 Sow, lessons learned at Three Mile Island, they 20 reviewed every one and one or two they thought and we 21 recommended were substantial enouch that they ought to put 22 it in, the ones.that affecting the retrofitting here in the 23 states.
The rest of them, most our foreign plants are not 24 being built to the rest of them.
25 It is tha rip and tear, the changes, that we ALDERSoN REPORTING COMPANY,INC.
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estimate coct about $500 million on a nuclear plant, 1250 5250 million in interest and 2
million in conrtruction and 3
inflation.
4 COMMISSIONER GILINSKI:
What fraction of that rip
~
5 and tear do you attribute to the NRC changing its mind and 6
what fraction is simply less than idea construction 7
practices?
8 MR. HURLBERT:
Ninety percent is NRC changes in 9
recs.
We have got a perfect comparison because we build 10 them overseas and we build them in the United States.
11 The point I want to a.c.e is that in my judgment 12 the safety is better when there is not so much rip and 13 tear.
The risk of defective workmanship and the risk of 14 making a mistake grossly outweichs the changes that are made 15 except those changes where we retrofit.
16 CHAIRZAN AHEARNE:
You are saying the quality 17 control is better.
18 MR. HURLBERT:
Well, human nature being what it is.
19 COMMISSIONER GILINSKI:
Let me ask you, how do you 20 compare the quality of construction work here and abroad?
G 21 MR. HURLBERT:
Wall, I think they are are equal.
22 We have elaborate quality control systems here and we have 23 elaborate quality control systems abroad.
I think that a 24 plant in Japan or a plant in Korea or a plant in Yugoslavia 25 or in Boston are built to equal standards.
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MR. MILL:
I would agree with that.
I have been 2
all over those plants in Japan and all over them here and 3
trere is no difference fundamentally.
4 CHAIRMAN AHEARNE:
An y more questions, Vic?
5 COMMISSIONER GILINSKI:
Well, let me just sort of 6
ask a summary question.
What do you see as what is holding 7
up utilities from buying nuclear plants now and in the near 8
future?
9 MR. HURLBERT*
Th e uncer tainty.
10 COMMISSIONER GILINSKI:
Tre they buying coal 11 plants.
1'2 MR. HILL:
Yes, they are putting coal plants in.
13 COXMISSIONER GILINSKI:
What is the increase in 14 the capacity that has been ordered, say, in the last year or 15 two years, or whatever?
Do you know that, Floyd?
16 MR. CULLER:
I don't.
17 MR. WALSKE: I can answer that.
In 1979 they were 18 at grossly six gigawatts of coal.
I don't know whether 19 there were any calculations against those gross orders, but 20 ve cancelled, as you know, much more nuclear than that.
21 In 1980 they were at two and a half gigawatts of 22 coal and I don't know what they cancelled.
We cancelled 23 around 10 plus or minus a little bit gigawatts of nuclear.
24 Mind you, there were a lot of figures tossed 25 around this morning.
We started out talking about ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
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additional plants for the Mineties.
I don 't know what 2
Floyd's number is exactly, but I guess it is at least 150.
3 MR. CULLER:
At least 150 gigawatts nuclear.
4 MR. WALSKE: I would have said maybe 200 of nuclear 5
and 200 of coal additional orders are needed for the 8
Nineties.
My point is you combine the two together.
On the 7
order of the rates now at'30 or u0 gigavstts a year then we I
are talking about next to nothing.
9 COMMISSIONER BRADF0ED:. Do the utilities disagree 10 with you or why aren't they placinc chose orders?
11 MR. WALSKE:
I am not a utility, but I can't 12 resist giving an opinion.
13 COMMISSIONER BRADFORD:
There is something other 14 than just uncertainty at work there.
15 MR. WALSKE:
The first thing is the cost 16 escalation through regulation which I thin's Gordon has 17 detailed very well and the others have also detailed very 18 well.
19 The second thing Frank mentioned, and it is 20 exceedingly important, and that is bringing inflation under e
control because that obviously affects costs.
22 The third thing is that over the years since '73 23 utility profits have been squeered as prices have gone up.
24 In order f or the utility commissions to be a little bit 25 responsive to the customer, and I tnink Sill Lee of Duke i
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Power commented in November that the deficiency is such that 2
utilities ge t about two-thirds of the return on equity that 3
they would need in order to have a viable beat inflation 4
program if you saw these other things that we were talking 5
about, the construction licensing problem plce the inflation 6
problem.
They are still at only about two-thirds of the 7
profitability level.
If you convert that into electric 8
rates it probably means that they need a one-time increase 9
of about 10 or 15 percent on rates and then they need to 10 track inflation and increased costs from that point on.
11 MR. HURL 3ERT.
let me answer that qeastion as I 12 see it.
They don 't need a vr more orders at the present 13 time.
They had substantial
-:ess plants on order when the 14
'73 oil crunch came, substantial.
15 MR. STASZESKY:
Well, they weren't excess when it 16 came; they were excess after.
17 (Laughter.)
18 MR. HURLBERT:
I stand corrected.
The reserve 19 margins in many parts of the country are still excessive by 20 what they would like to have.
So that is why.there haven't 21 been any plants ordered.
They really didn 't need them.
22 CHAIRMAN AHEARNE:
That is why a numbered were 23 cancelled.
24 MR. HURL 3ERT:
And why a number were cancelled.
25 This year they will order about ten gigawatts of coal-fired I
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1 plants and next year they will order about 15 giga watts and 2
the year after that they will order about 20 gigawatts of 3
coal-fired plants.
There were not a riy required new orders 4
from our point of view in the Frost Balt.
All of the nev 5
orders and all of the load growth, Frank is still working 8
off his excess reserve margin.
It will all be on the West 7
Coast,, the Rocky Mountains and the Southeast.
8 We are getting pretty tight in a number of places 9
in the country right now.
Jacksonville rotated blackouts to and Gulf States is getting pretty tigh t The Rocky Mountain 11 region is getting pretty tight.
The Pacific Coast is 12 getting pretty tight, although they just bought four 13 coal-fired plants.
So it is just now coming to where we
(_
14 have worked off our b.acklog and now is the critical time.
15 From our point of view, half of those coal-fired 16 plants would be nuclear plants if we could get our act 17 together between the architect / engineers, the vendors, the 18 utilities and the regulatory body.
19 COMMISSIONER BRADFORD:
When you talk about 20 uncertainty then are you talking about uncertainty as to 21 whether the plants will ultimately be licensed at all or 22 uncertainty as to how much the will cost compared to coal?
23 Because just'lcoking at Floyd 's projections here I assume 24 that if the utilities and the people who lend the money had 25 faith in those projections and had faith also that the ALDERSoN REPCRTING COMPANY,INC.
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demand would be there then the money to build nuclear. plan ts 2
would be forthcoming and the orders would also.
3 MR. HURLRERT:
All of my cost calculations show 4
that you have got to depend on how long it is going to take 5
to build it and you have to depend on what its up-time is 6
going to be and what its capacity factor is going to be 7
before you can make an intelligent decision on cost.
8 Those costs are based on reasonable construction 9
schedules and reasonable up-times.
It is the uncertainty of 10 how long it will take so therefore how much'it will cost.
11 COMMISSIONER BR ADFORD :
What are the construction 12 schedules and the capacity f actors?
13 MR. CELLER:
These assume ten years for nuclear.
k, 14 COMMISSIONER GILINSKI:
That is why I asked 15 earlier whether you thought you had made reasonable 16 assumptions about th e real world.
17 MR. CULLER.
We use all of the architect / engineers 18 and Gordon's people and GE in assembling these data.
It is 19 not going to be right everywhere but it is reasonably 20 current and it is a reasonable assessment of what it takes 21 in time.
There is a schedule of them in the report for 22 various sources.
Sixty-one or 62 is the average for nuclear 23 and I think 65 for coal in the projections for the near term 24 and a little bit better in the far term.
25 COMMISSIONER READFORD:
Then if the time really ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON. D.C. 20024 (202) 554-2345
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were ten years and the capacity factor were to be 60 percent 2
I am still having trouble defining the uncertainty that is 3
preventing people from ordering nuclear as against coal over 4
the next few years.
Is it a sense that in fact the plants 5
won't be licensed?
6
- 33. STASZESKY.
I would like to offer some 7
response.
In the first place all of our economic analysis 8
indicates that nuclear is the most economic final overall 9
cost for kilowatt hours for the Northeast where I am 10 familiar with.
I believe this is true also in many other 11 parts of the country, but I am just going to talk about the 12 area where.I have confidence that I know exactly what I am 13 talking about.
That varies a little bit, depending on who 14 is making the estimates, but it ls in the ?rder of 15 to 20 15 percent better, more economical, for nuclea r.
16 That looks at the same questions we were talking 17 about earlier of what kind of environmental requirements and 18 other regulatory requirements would you anticipate at this 19 point which is what Floyd was f orecasting f or coci and other 20 alternatives as well as for nuclear.
So we would prefer to 21 build nuclear.
22 Now, for my company when lead times were shorter 23 we did a rolling ten-year forecast of what our requirements 24 were and when we saw new generation required out in that 25 period then we built it into our forecast base which ALCERSCN REPORTING CCMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2345
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includes a financial forecast which is part of that 2
forecast.
It isn't just what our needs are going to be but 3
so t' tat we can also start our financial plannino.
4 Because the lead time is stretched out so far we 5
are not doing that on a 15-year base.
On a 15-yea r base, 6
including and anticipating that Pilgrim-2 will be in service 7
ve would need additional capacity in 1992.
'le determined 8
that actually last year.
Our forecast this year doesn't 9
tell us anythino different.
It says the same thing, that we 10 vill need additional capacity in
'92.
So we have built into our financial planning 11 12 forecast the financial requirements for that unit.
Now, in 13 fact, for that particular unit we were not going to build a N
14 nuclear unit.
That is not what is in our forecast.
15 CHAIRMAN AHEARNE:
'4 h y ?
18 MR. STASZESKY:
But be tha t as it may, we put 17 money into 1981 to plan for that unit and that is scheduled 18 for September.
So the question before us is will we go
-19 forward and go to our board of directors for a commitmer' of 20 those funds in September for a unit at that time.
I don't 21 know if we will or we won 't.
n The problem that we really have to examine is what 23 are the uncertainties associated with that investmen t and 24 really caming to what happened, you know, why don't people 25 get these orders down, and our forecast of inflation ALDERSON REPORTING COMPANY,INC.
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problems, the ability to recover investment, the lead time 2
and what seens to be going on in our forecast of regulation 3
f or tha t uni t.
4 Incidentally, that unit was anticipated to ba a 5
coal-fired unit tha t would use gasified or liquefied coal, 6
probably 71sified, and would be a combined cycle frontend.
7 The answer as to "why" was because that is 8
relatively efficient, but because of our six and the mix in 9
all of New England and all of the nuclear power that is to coming into play in New England, Millstone-3 is being built, 11.
Seabrook is being built and so forth, the mix of nuclear 12 versus non-nuclear does affect what the ultimate capacity 13 factor will be on the units and what the final cost per 14 kilowatt will be.
So for that point in time for us that was 15 the right choice.
16 CHAIRMAN AREARNEs Are you saying that because of 17 those other factors that the economics broke against nuclea r 18 for that unit?
19 3R. STASZESKY:
Just for that unit, yes.
But if 20 we just look for a unit, coal versus nuclear, nuclear comes 21 out cheaper.
Actually what we are shooting for in New 22 England is 5 0 to 55 percent nuclear.
1 23 CHAIRMAN AHEARNE:
Is it inco rrec t to concluJe 24 from what you said, Frank, that had the economics broken the 25 oth er way, nuclear ahead, you would have gone nuclear in l
ALCERSON REPORTING COMPANY,INC, t
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spite of these uncertainties that are being talked about?
2 3R. STASZESKY:
We would have put it in our plan.
3 CHAIEMAN AHEARNE:
Okay.
As you pointed out, you 4
are still not sure.
5 MR. STASZESKY:
When the time comes to commit we 6
will look ahead and say how confident am I that this plant 7
9111 be licensed in a timely way and that I know what the 8
final cost will be.
That break point f or us is September cf 9
this year in our plan.
10 Now, if that had happened to be nuclear, I agree 11 with these gentlemen, that unless it was something i
12 tremendously different from what I see today we would not 13 commit a nuclear plant and I don 't know who would based on 14 the uncertainty that is out there which comes to the final 15 question.
16 If yois believe Floyd's numbers, which I do, not 17 the exact numbers, that if we don't have nuclear we are 18 going to have a shortf all of electric supply in this country 19 with ver.y lire results.
I do believe in that.
l 20 So the question is what does a utility do if he 21 doesn't get down there with his order either for a nuclear 22 plant or some other long lead-ti! a plant, and coal is no bed l
23 of roses I might add, the answer, and it is not in the 24 customer's interest and it is not in the country 's inte rest, 25 but the answer is that at the last minute, and the last ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024(202) 554 2345
72 1
minute may be five years or something like that, when you 2
say we can't wait a day longer and you go out and you buy a 3
gas turbine or some thing.
Then the country suffers in many i
4 vays.
It has a higher ccst of electricity, the national 5
security is damaged.and tha t is exactly wha t ha ppens.
6 MR. CULLER:
There is another source of 7
uncertainty and basically it is the nuclear plants are now 8
subject to being down with frequency and the uncertainty 9
that is given perhaps by the whole attitude of questioning 10 by review after review stretching long into time.
The 11 questions of safety lead to the uncertainty in the public 12 mind and on the part of the utilities as to whether or not 13 nuclear is going to make it.
So that there are several 14 sources of uncertainty in addition to the economics.
15 CHAIRMAN AHEARNE:
As time is running out we would 16 lik e to turn to the gentleman who is on my right and ask 17 whether he would like to make any comments.
18 COMMISSIONER.HE3DRIE:
There are, as all of you 19 have noted in various ways this mornin'r an assortment of 20 restraints that now operate to keep new orders from 21 appearing and that apparently are going to continue to 22 operate for some time in that way.
Some of those are within 23 this agency's purview and some of them aren 't.
24 I guess my own sort of horseback cut at it would 25 be that about half the problems are here and half of th e ALDERSoN REPCRTING COMPANY,INC.
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problems are in other places, including not notably the 2
assorted regulatory commissions, the state commissions that 3
all the utilities have to deal with.
4 Nevertheless, tha t doesn ' t say that for any of us 5
ve ought to say, ell, we are only a part of the problem and 6
go and get the rest of it fixed up and come beak here.
I 7
think it would be useful for everybody to try to improve the 8
situation.
9 Now, if you are ever going to build a plant 10 rapidly or at least rapidly once you have come to the 11 conclusion that you want a nuclear plant and have begun to 12 commit appreciable funds to it so that then the interest 13 problem begins to roll two things have got to happen.
14 One of them is there has to be some _'. e ve l u f prior 15 agreement on the plant design so that it is not restrained 16 unduly by the necessary length of staff review processes and 17 arguments over design f eatures.
Well, we have a batch of 18 wha t ara called standard designs out there that have some 19 level of staff approval.
In principle at least thesi could 20 get churned through once more for Three Mile Island related 21 things and there would then be available at least a limited 22 number of reasonably well agreed to plan t configura tions.
23 Now, I say a limited number because my own view is 24 tha t it is going to have to go beyond the nuclear steam 25 supply and the agreed-upon parts of those designs.
You are ALDERSoN REPORTING COMPANY,INC.
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going to have to go out and cover the essential safety 2
systems in the balance of plant, the auxiliary systems.
3 Those are the places that have hung us repeatedly before.
4 Nevertheless, there is a lot of stuff along that j
5 line that has been accomplished or is in the mill on a hold 6
status since Three Mile Island and I think we might very 7
Well get there.
Okay, so that is sort of the design side.
8 But the other side is th'at siting plants is going 9
to continue to be a hassleat some places more than others 10 but not easy any place.
That means if you are going to be 11 able to go rapidly and afficiently once you start co mmitting 12 heavy funds to a plant that you have to get some 13 corresponding level of agreement of the siting.
14 So it seems to me from the utility's standpoint 15 you have got the following problem.
You can't have an 16 economically viable nucle:.r project unless you can do it 1[ rapidly and you can't do it rapidly unless you can get 18 started on the arguments over siting and the inevitable 19 hearings and arguments and compromises and so on and you get 20 yourself into sort of a chicken and egg situation.
21 You aren't going to want to start on that siting 22 venture unless you are confident you can have a viable 23 nuclear project and make an adequa te case f or it on the 24 economics and so on, but you can't make that case until you 25 have got the siting set up.
So now you are bound.
l l
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I wonder how we are going to achieve the situation 2
where utilities or somebody is /illing to come forward and 3
start carryinc out the site. examinations and propcsing for 4
consideration and review the sites that we need.
I suppose 5
to at least some extent and on some systems that already 6
have plants you can come in with putting more units on 7
existing sites and tha t has the advantage that we have 8
looked at those sites and either we like them or we don't 9
lik e them.
Some of the existing sites I don't think we 10 'would be very happy to see proposals for new units.
Please 11 don't bring me Indian Point-4 You know, I have got enouch 12 to worry about.
13 (Laughter.)
14 MR. HURLBERT:
I can't stand another Indian Point.
15 (Laughter.)
16 COMMISSIONER HENDRIEs I can remember when we were 17 almost up to Indian Point 6 back -- well there was a point 18 in the early Seventies or maybe
'69.
19 Anyway, it is not quite clear to me of how do we 20 get to a place where utilities or state siting boards or 21 somebody has got the funds and the willingness to go ahead 22 and fight a series of site battles, because there are going 23 to be battles, and go through hearing processes and get 24 approvals on site contingent on, you know, reactors that 25 fall within some prescribed envelope u.ere in a circumstance ALDERSoN REPORTING COMPANY. INC.
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when you are not going to be able to say th a t you have very 2
much assurance that there will ever be a viable nuclear 3
g e ne ra ting plant project to occupy that site.
4 That is a problem for you it seems to ne in all 5
kinds of ways, justifying the expenditure of the funds for 6
tha t site, examination, review and the licensing process to 7
- e. rate commission when you can't say for use that you are 8
going to build a plant there and generate some power and all 9
sorts of sihilar difficulties.
10 I don't ask you the question of what are you going 11 to do about that.
I would be interested to comment.
I 12 would like to point out that having brought the process of 13 new orders and a licensing process which, if not ideal, at 14 least had some forward motion, having brought all that to a 15 stop or havind had it brought to a stop for us by the events 16 ot the past two years, there is problem in getting it 17 started again.
As is the case with most pieces of 18 machinery, getting the pa rts moving together again to 19 achieve a steady state dynamic condition is pretty hard.
20 MR. STASZESKY.
Mr. Hendrie, I would just comment 21 that I am not positive of the solution but I am reasonably 22 certain that all it needs is leadership.
We have an example 23 in Massachusetts.
We have a Governor who is pro-growth and 24 pro-business and pro-energy not because it is going to do 25 something for him personally but because he has the same concepts ALDERSON REPCRTING COMPANY,INC, 400 VIRG1NIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
77 1
tha t Floyd.vas trying to lay out and that these two 2
gentlemen have both mention ed, which is that for the welfare 3
of society and the growth for the people who exist in the 4
world today, in the United States today, who are going to t
5 form family units, who are going to have anticipations and 6
expectations and certainly the minorities o f our cc antry who 7
have the most to gain from growth in society need increased 8
energy supplies.
That is what our Governor seeks.
9 Ihe fact of the matter is today the unemployment 10 rate in Massachusetts is 4.7 percent, whereas previous to 11 his administration it was difficult to get permission to 12 build anything, whether it be, and never mind a nuclear 13 power plant, whether it be an oil refinery or some kind of a 14 manufacturing facility other than high technology which 15 doesn 't have many impacts on the environment.
These 16 Licenses are now issuing, b ut what is the difference 1 The difference was the leadership and the political leadership 17 18 of the Commonwealth of Massachusetts.
19 My response to your question of how is this 20 brought about, I think it is brought about through 21 leadership and not by sitting back and wringing our hands 22 ond saying what can we do.
We have to get people in place i
23 who are willing to say I believe this is inportant f o r th e welfare of my state or my country and then he has to get out l
24 l
l 25 and tell the people that he believes that.
I don't think we ALDERSoN REPORTING COMPANY-(NC, 400 VIRGINIA AVE., S.W., WASHINGTCN, D.C. 20024 (202) 554-2345
78 1
have seen that in the past four year's.
So that is my 2
response.
3 I wonder if I could offer one other comment, 4
Mr. Ahearne, again just from a personal experience point of 5
view reinforcing this growth in electricity because I think 6
there are a number of people in society who may question, 7
you know, the growth figures.
They say, well, we aren't 8
really going to need it.
So there is always a reluctance to 9
get started with it and that is the problem when something 10 has a long lead time.
It is difficult to really get people 11 convinced that something is going to be needed 10 years away 12 or 12 years away.
13 It is just difficult to'get the process moving 14 when most people are more concerned with the fact of 15 inflation and the increase in their disposable income is 18 actually in a Segative direction based on inflation.
17 Newspapers aren't interested in what is going to happen 10 18 or 12 years from now.
So it is difficult to get people's 19 attention.
But the fact is that this growth is happe ning.
20 In the City of Boston this year, 1981, 1982, 1983, 21 1984, in those four years there will be $1 billion of new 22 commerial construction, hotels, office buildings, growth.
23 Now, in Boston we have a district steam heating system.
24 Unfortunately, the only source of fuel for that district 25 steam heating system is oil and we burn the cheapest oil t
l ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 .02) 554 2345
l e
79 1
there is.
It is residual oil and, unfortun ately, it is half 2
percent oil which increases the cost.
But, nevertheless, it 3
is cheaper oil than anyone elre can buy.
4 We cannot sell the district stean " eating system 5
to these new major' buildings.
'4 h y not?
Because the people 6
putting up those buildings say even if your cost is less 7
today it isn't going to be tomorrow.
011 is absolutely an 8
uneconomic thing for us to put our confidence in oil to 9
supply the energy requirements of those buildings, the space 10 h ea ting.
11 Out of seven new hotels presently committed in the 12 City of Boston four of them are totally electric.
We didn 't 13 sell them.
They sold themselves.
Tha t load is coming on.
14 MR. CULLERS Mr. Chairman, may I comment.
15 CHAIRMAN AHEARNE:
We are about to bring this 16 meeting to a close.
17
' COMMISSIONER BR AD FORD:
I have a corn t,
too.
18 MR. CULLER:
Quickly on the siting.
Inere is the 19 importance of the source term on siting and the degraded 20 core hearings have great influence on siting and I think you 21 recognire this.
It is one of the uncertainties now present 22 in the nuclear picture.
23 COM3ISSIONER BRADFORD:
As one who has been both a 24 state regulator and now a reculator on this Commission 25 (Laughter.)
i s
l ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (202) 554-2345
o 80 I guess a hundred COMMISSIONER 3R ADFORD :
1 2
percent of the problem is as Joe divided it up, but it does give me some perspective on the phrase " regulatory 3
4 uncertainty" which somehow seems to have come into the 5
lexicon at just about the time that I came into regulation.
6 (Laughter.)
7 COMMISSIONER BE ADFORD:
It isn't I think simply n 8
matter of whimsicality in the regulatory agencies or 9
leadership in the sense that it comes and goes depending on 10 who is in charge at the top at the time.
In this agency as 11 I see it regulatory uncertainty in the sense that I think I 12 have been hearing it from you all this morning comes from a 13 set of very specific events and concerns.
14 To some extent it is that the plants as designed 15 and then built, as we talked about earlier, simply are not 16 always the plants that we think that we have licensed and 17 there are just a number of specific cases that one can 18 sight.
We think we have licensed plan ts with qualified 19 equipment and then it turns out on a closer look that the 20 equipment isn 't always qualified.
We think we have licensed 21 plants that can't have fires to do a given amount of damage 22 and then when we go back and look a few years later we 23 discover that the fire protection configura tions aren 't 24 quite what we thought we had licensed.
We think we have licensed full proof scram systems and then we have an 25 ALDERSoN REPORTING COMPANY. INC.
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ep'.sode lite the Browns Ferry one of last year with regard 2
to hydrogen control and some rpecific containments, and one 3
can go on like that.
4 I think the overall sense of regulatory 5
uncertainty that you have does trace back to a set of 6
specific causes.
Now, it may well'be that there are things 7
in our licensing process, things in the ways we set f
8 schedules or set deadlines and sometimes have to shut plants 9
down that can be improved.
10 The fundamental cause or the reason we do these 11 things does stem from sets of events that continue to show, 12 most recently at Indian Point, that the plants have a way of 13 fooling both those who design them and those who regulate 14 them.
That doesn't happen because Jimmie Carter is 15 President for one four-year period and it von't necessarily 16 stop because Ronald Reagan is P resident for the next four 17 years or eigh t years or however long.
18 I agree with Joe that there may be a lot to be 19 gained out of early siting.
It may that what is forthcoming 20 in terms of what we will learn about iodine will offer some 21 encouragement and there may be ways that we can improve the 22 process.
But at the bottom it won't wash to say that the 23 problems that you and we have now come simply from something 24 called regulatory uncertainty because that uncertainty does 25 have a real basis and the basis is in the way the plants are ALDERSoN REPCRTING COMPANY,INC, 9
e 82 1
designed and built.
You have acknowledged it today as well, 2
but I just wanted to re-em phasize that there is a problem on 3
your side of the table as well as on ours.
4 I did have a couple of questions, but I think it 6
is better to do them on the phone.
6 CHAIRMAN AHEARNEs When you go into an outreach r
7 program you reach out and you hear some things which you 8
know and some things you don 't know and some things you like 9
and some things you don't like.
I think it has been an to interesting morning and we will just have to see to what 11 extent both sides go forward.
12 Thank you very much.
13 (Whereupon, at 12.05 p.m.,
the meeting concluded.)
14 15 r
16 17 18 19 20 i
21 22 23 24 25 ALCERSoN REPoATING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2345
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~m; NUCLEAR REGULATORY CO.T4ISSICM This is to certify that the attached proceedings 'cefore the
.s.
4..
- h.
ma-er o f. MEETING WITH AIR ON THE FUTURE OF NUCLEAR POWER PLANTS w
Date c.# P
- a. c.a a. d a..
January 21, 1981 i
Decket !!umb er:
Place of Proceeding: Washington, D. C.
were held as herein appeses, and tha: this is the original transcri;;;
therecf for the file of :he Cc==ission.,
Mary S.
Simons Official Reporter (Typed) n-m Official Reperter (Signature)
)
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