ML20027B757
| ML20027B757 | |
| Person / Time | |
|---|---|
| Site: | Midland |
| Issue date: | 09/28/1982 |
| From: | Wilcove M NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| ISSUANCES-OL, ISSUANCES-OM, NUDOCS 8209300071 | |
| Download: ML20027B757 (11) | |
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i 09/28/82 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC' SAFETY AND LICENSING BOARD In the Matter of
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CONSUMERS POWER COMPANY Docket Nos. 50-329 OM & OL
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50-330 OM & OL (Midland Plant, Units 1 and 2)
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NRC STAFF RESPONSE TO INTERVENOR BARBAP.A STAMIRIS' CONTENTION BASED ON NEW JNFORMATION IN THE FES I.
INTRODUCTION On August 24, 1982, Intervenor Barbara Stamiris submitted a new contention challenging the cost / benefit analysis in the Final Environmental Statement (FES) for Midland. The contention reads:
I contend that the new cost production, cost savings ana'ysis of the FES, represented by revised table 2.1 (p. A-32) and the revised cost / benefit analysis (p. 6-4) and revised economic statements derived therefrom do not accurately and fully represent the cost / benefit balance of the Midland plant to the public, and should therefore not be accepted as presented.
In support of the contention, Ms. Stamiris sets forth six separate bases.
As discussed below, the Staff objects to some of these bases, but not all. On September 13, 1982, Ms. Stamiris filed an addendum to her contention.
As discussed on pp. 8 and 9 below, the Staff opposes the addendum.
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't II.
DISCUSSION
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Basis I states that:
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The bases for contending that these new FES statements are inaccurate and incomplete are numerous.
First, the NRC chooses to use the most favorable (i.e., least costly) 1984 production cost data rather than the most representative but less favorable average of 1984-1988 production cost data in their table 6.1 (p. 6-4).
At the same time the NRC uses the 1984-1988 average rather than 1984 data alone to represent the cost savings data.
Rather than use a consistent methodology to represent cost / benefit data, the NRC has chosen to use whichever approach offers the most favorable presentation to plant operation.
By way of explanation, the NRC's use of 15 mill /kwh (fuel) and 6 mill /kwh (0&M) production costs (p. 6-4) is based'on a 1984, 56%
capacity figure (p. 6-3 par.1) for a total cost of 21 mills /kwh to produce electricity.
In so doing the NRC goes beyond even accepting the new table 2.1 data at face.value by enhancing its presentation in table 6.1.
The NRC should use a 13.8 mill /kwh (fuel) and 12 mill /kwh (0&M) averaging of 1984-1988 data for a total of 25.8 mills /kwh to produce electricity, based on an average capacity factor of 54%.
Even the applicant suggests using the 54% capacity average (p. A-30 #15) to replace the staffs DES 58% average capacity factor (p. 2-2 DES), but the staff abandons their averaging approach to use the 1984 data alone.
Staff Response to Basis I The Staff does not object to this basis as support for the contention.
Basis II states that:
BASIS II. LACK 0F SUPPORTING DATA FOR PRODUCTION COST ESTIMATES If the staff were to accept Consumer's new production cost data and comments at face value, this would still not meet the public 17terest regarding a complete and accurate representation of the costs and benefits of operating the Midland plant, for the supporting bases used to justify Consumer's submission of new data in revised table 2.1 are not provided or analyzed.
Consumer's cites the change in Dow's steam reservation l
and their 12-14-81 load forecast revision as bases for their new replacement energy estimates (p. A-31, #16) which account l
i for the increased savings from $200 million/ year (DES) to 5279 million/ year (FES) in table 6.1, yet no documentation or explanations of these bases are included in the FES in order to assess the validity or necessity of the proposed changes l
prior to their acceptance.
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~ Staff Response to Basis II The Staff objects to this basis. Ms. Stamiris does not allege that the new replacement energy estirnates submitted by CPC are inaccurate.
She merely states that there should be more documentation for the data.
In essence, Ms. Stamiris attempts to shift her burden to the Staff.
If Ms. Stamiris wishes to contend that the Staff's assessment of replacement energy estimates is inaccurate, she must supply the basis for her contention.
Philadelphia Electric Company (Peach Bottom Atomic Power Station, Units 2 and 3), ALAB-216, 8 AEC 13, 19-21 (197'4).
Basis III states that:
BASIS III:
" SAVINGS" AS AN ACTUAL BENEFIT IS INVALID The revised FES average cost savings of $279 million per year (based upon note (e) in revised table 2.1, p. A-32) is represented in FES table 6.1 (p. 6-4) as an actual benefit in
" reduced generating costs" and is judged to be a "large" benefit in the overall cost benefit analysis.
As stated in paragraph 2 p. 6-2 FES, "the benefits and costs of operating the plant are summarized in table 6.1" (emphasisaddeo). Yet the dollar figure of $279 million per year actually represents the projected costs of not operating the Midland plant. As such these replacement energy costs have no place in an analysis which purports to represent the costs and benefits of operating the Midland plant.
l The hypothetical energy savings are counted as actual l
dollar benefits "that will accrue from operation of the l
plant," (par. 4, p. 6-2) which they are not. Such an accounting is analagous to crediting your personal checkbook with " savings" from the money you didn't spend, as though it were a deposit. Consumer's Power Co. cannot be allowed to take economic credit for not operating the plant,.in a cost benefit analysis considering plant operation.
Staff Response to Basis III
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, The Staff does not object to this basis as support for the contention.
Basis IV states that:
BASIS IV:
COST SAVINGS INCREASE IS NOT JUSTIFIED Even if the existance [ sic] of a cost-savings figure, represented in Table 6.1 as r. educed generating costs, is allowed to remain in the FES cost-benefit analysis, the significant increase from the estimated $200 million savings per year in the DES, to the $279 million savings per year in the FES is not justified.
The basis for this significant increase between the DES and FES cost savings estimates is due to the corresponding increase in replacement energy costs (in tables (d) below table 2.1 p. 2-3 DES, p. A-32 FES) as submitted by CPC. As noted in my basis II argument about produc' ion costs, these increased replacement energy costs are unsupported by documents or explanations.
In addition the question must be asked regarding the increased cost savings: why would CPC maintain an average 70% reliance on purchased power, (as opposed to the more economical coal power, tables (d) below tables 2.1) if the projected cost of purchased power rose from an average of 50 mill /kwh (DES) to 71 mill /kwh (FES) as it does to produce the increase in cost savings between the DES and FES? An opportunity is needed for both parties to produce evidence on this issue, for there is data available showing that the use of the coal option for replacement energy has not been cost-efficiently taken into account.
(By this suggestion I do not raise need for power or alternate energy arguments, only costs of replacement power as CPC does.)
Staff Response to Basis IV To the extent that this basis alleges that the cost / benefit assess-ment of replacement costs is inaccurate due to an overemphasis on purchased power, the Staff does not object to it as support for the contention; The Staff notes that this basis deals only with the assessment of replacement costs in the cost / benefit analysis. Ms. Stami-ris specifically states that she is not raising need for power or
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For the reasons set forth in the Staff response to Basis II, the Staff objects to the second paragraph of Basis IV as support for this contention.
BASIS V:
COST CONSIDERATIONS ALLOWED ONE PARTY CANNOT BE DENIED ANOTHER PARTY In the economic revisions implemented between the DES and the FES as reflected in section 6, CPC is allowed to take account of "recently revised plant and production cost data based on the latest cost forecasts" (p. A-28, #3) for its revised estimates of increased benefits, while avoiding any accounting of analagous increased costs in the cost / benefit analysis table 6.1.
The data and substance of these new costs forecasts used as bases for the revised benefits is not produced, explained, or analyzed--but is accepted by the NRC in adopting the FES changes to table 6.1.
It is obvious that CPC and the NRC have been allowed to make extensive use of all beneficial cost data in their revised cost benefit analysis of tne FES (even non-existant
[ sic] annual cost-savings). The selective application of cost considerations in an analysis performed for the public which excludes the most significant of all the real costs that the public will accrue with the operation of the plant--ie.
construction costs, is blatently unfair and does not represent the public interest.
For according to Michigan Public Service Commission policy, the construction costs of the Midland plant will become a part of the operating ratebase--only(when the plant produces the power for which it was intended see attachmentA).
The NRC states that their section 6 analysis represents "the benefits and costs of operating the plant." Unless we are to believe that this analysis represents the costs and benefits to the utility as opposed to the public, the construction costs cannot be considered " sunk costs" by any stretch of the imagination in Michigan.
Likewise the exclusion of-construction-cost economic considerations on the bases of the argument that construction
.- costs have already been considered at the c.p. stage, while promulgating new economic benefit considerations from new cost forecasts (p. A-28, #3), is inconsistant [ sic].
Furthermore tne recent Commission observation that
" factors such as increased' financial costs since the c.p.
review should oenerally not be considered at the 0.L. stage, since such factors would be unlikely to tip the cost benefit balance against issuing an 0.L. (emphasis addsd, 47 Fed. Reg.
12940-42 3-26-82) clearly leaves room, in its use of qualifiers for the exceptional cost increase circumstances which Midland represents.
For construction cost estimates considered at the c.p.
stage for Midland were only $265 million, as compared to the not yet final cost estimate of.$3.39 billion today, an increase of over 100 percent which cannot be ignored as un outstanding cost increase to the public who will begin to pay it only when the plant operates.
If the applicant presents the same explanations of "the manner in which construction costs were in fact accounted for in the environmental cost-benefit analysis at the OL stage of review" (tr: 8386-88, 8392, as cited in the Boards 8-14-82 order, p. 26) to this contention as he did at the recent pre-hearing conference, I will strongly object to the acceptance and these or any other arguments which go to the merits of the contention, without an equal opportunity to explore those merits myself, for I consider them erroneous, and misleading and I could produce evidence to support my contrary point of view.
Staff Response to Basis V This basis is virtually the same as Ms. Stamiris' contention 1.a.
submitted on July 9, 1982 and rejected by the Board in its Prehearing Conference Order, LBP-82-63, 15 NRC (1982). Ms. Stamiris therefore is merely resubmitting a rejected contention.
Contention 1.a was extensively discussed at the Prehearing Conference on August 13, 1982.
(Tr.8376-8391). The same arguments raised by the Staff and CPC in opposition to Stamiris contention 1.a.
apply to Basis V as well. This basis should be rejected for the reasons set forth at p. 25 of this Board's August 14, 1982 slip opinion.
These O
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(1) a recent Comission rulemaking (47 Fed.
Reg.12940,12942) noted that increased financial costs since construction permit review should generally not be considered at the operating license stage and (2) as a matter of law, " sunk costs" are not considered in an operating license cost-benefit balance.
Basis VI states that:
BASIS VI:
NEPA REQUIREMENTS Mr.. Bishop raised arguments'at the prehearing conference of Aug. 13, 1982 concerning the necessity of considering the whole cost / bene.*it picture according to NEPA requirements,*
something that wasn't done at the c.p. stage, and something that is not done in the selective use of new cost forecasts taking place with the FES economic benefit revisions already discussed. These NEPA arguments must be taken into account in support of the portion of my contention which asserts that the revised FES cost / benefit analysis is incomplete, and therefore unacceptable in its present form.
1 Staff Response to Basis VI Ms. Stamiris is apparently referring to statements made by Mr. Bishop in support of Stamiris Contention 1.a.
(Tr. 8379, 8385-6, 8390). Mr. Bishop's argument can be summarized by his assertion that the Staff's cost benefit analysis failed to examine the "whole project." He states that "if the whole project is a facility which has nothing built yet and which will operate, you need to look at the entire cost and compare that with the entire benefit and come to some sort of a determination."
(Tr. 8385) This argument ignores the two-step licensing process which was sanctioned by the Supreme Court in PRDC v International
- My lack of a transcript does not allow me to be more specific at this time.
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Union of Electrical, Radio and Machine Workers, 367 U.S. 396 (1961).
See also, Consumers Power Company (Midland Plant, Units 1 and 2),
ALAB-123, 6 AEC 331,355 (1973)., Since we are in the second stage of this licensing process which deals strictly with operation of the plant, the FES addresses the costs and benefits of operating the plant.
Sunk construction costs affect neither the costs nor benefits of such operation. The Staff, therefore, objects to this basis.'
Conclusion To Contention And Staff Response The conclusion to Ms. Stamiris' contention suggests that "at the very least, this contention should be admitted for purposes of discovery to clear up the apparent inconsistencies in data usage addressed in the contention." The Appeal Board has specifically held that "a licensing board is not authorized to admit conditionally, for any reason, a contention that falls short of meeting the specificity requirements [of 10 C.F.R. 2.714(b)]." Duke Power Company, et al. (Catawba Nuclear Station, Units 1 and 2), ALAB-687, 16 NRC (SlipOpinionat11.)
Hence, this contention may be accepted only to the extent that its bases are adequate.
Stamiris Addendum to 8/24/82 Cost / Benefit Contention-Dewatering Costs.
The CJst/ benefit balance to the public of operating the Midland p' ant cannot be valid without taking account of the project operation and maintenance costs of the permanent oc = tar'ag system.
There is no mention of dewatering cost considerations in the DES or FES analyses. The anticipated deterioration, possible repair and or replacement of wells must be projected in addition to routine operating expenses.
This unique aspect of Midland's operation is a significant factor in the cost / benefit analysis which warrants consideration and explanation.
(If already included in operatin these dewatering costs should be delineated.) g expenses, J
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' Staff Response To Addendum By its own terms, this addendum is inadmissible. The Board specifically held that contentions based on newly issued Staff documents must be based on information not previously available. Memorandum and Order, September 2,1982, p. 2.
The addendum states that the DES did not consider costs of dewatering. ' Hence, this addendum is not based on new information in the FES and must be stricken.
Respectfully submitted,
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Michael N. Wilcove Counsel for NRC Staff Dated at Bethesda, Maryland this 28th day of September 1982 1
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UNITED STATES-0F AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC 3AFETY AND LICENSING BOARD In the Matter of
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CONSUMERS POWER COMPANY Docket Nos. 50-329 OM & OL 50-330'0M & OL (MidlandPlant, Units 1and2)
' CERTIFICATE'0F SERVICE
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I hereby certifylthat copic of "NRC STAFF RESPONSE TO INTERVENOR BARBARA STAMIRIS' CONTENTI0N BASED ON NEW INFORMATION IN.THE FES" in the above-captioned proceeding have been served on the following by deposit in the United States mail, first class, or, as indicated by an asterisk through ' deposit in the Euclear Regulatory Commission's internal mail system, this 28th day of September, 1982.
- Charles Bechhoefer, Esq.
Frank J. Kelley Administrative Judge Attreney General of the State Atomic Safety and Licensing Board of Michigan U.S. Nuclear Regulatory Comission Steward H. Freeman Washington, D.C.
20555 Assistant Attorney General Environmental Protection Division 525 W. Ottawa St., 720 Law Bldg.
Lansing, Michigan 48913 Ms. Mary Sinclair 5711 Sumerset Street Dr. Frederick P. Cowan Midland, Michigan 48640 Administrative Judge 7.
6152 N. Verde Trail Michael I. Miller, Esq.
Apt. B-125 Ronald G. Zamarin, Esq.
Boca Raton, Florida 33433 Alan S. Farnell, Esq.
Isham, Lincoln & Beale
- Dr. Jerry Harbour Three First National Plaza Administrative Judge 52nd Floor Atomic Safety and Licensing Board Chicago, Illinois 60602 U.S. Nuclear. Regulatory Comission Washington, D.C.
20555 James E. Brunner, Esq.
Consumers Power Company 212 West Michigan Avenue Jackson, Michigan 49201
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-. Ms. Barbara Stamiris
- Atomic Safety and Licensing Board 5795 N. River U.S. Nuclear Regulatory Comission Freeland, Michigan 48623 Washington, D.C.
20555 James R. Kates
- Atomic Safety and Licensing Appeal
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203 S. Washington Avenue Pri,el Saginaw, Michigan 48605
- 13. Nuclear Regulatory Comission Washington, D.C.
20555 Wendell H. Marshall, President Mapleton Intervenors
- Docketing and Service Section RFD 10 Office of the: Secretary Midland, Michigan 48640 U.S. Nuclear Regulatory Comission Washington, D.C.
20555 Wayne Hearn Steve J. Gadler, P.E.
Bay City Times -,
2120 Carter Avenue 311 Fifth Street St. Paul, MN 55108 Bay City, Michigan 48706 Frederick C. Williams Paul C. Rau Isham, Lincoln & Beale Midland Daily News T
1120 Connecticut Avenue, NW.
124 Mcdonald Street Washington, D.C.
20036 Midland, Michigan 48640 Lee L. Bishop Myron M. Cherry, p.c.
Harmon & Weiss Peter Flynn, p.c.
1725 I Street, N.W.
Cherry & Flynn Suite 506 Three First National Plaza Washington, D.C.
20006 Suite 3700 Chicago, IL 60602 T. J. Creswell Michigan Division Legal Department l
Dow Chemical Company Midland, Michigan 48640 dg l
Michael N. Wilcove Counsel for NRC Staff l
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