ML20031A516
| ML20031A516 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie  |
| Issue date: | 09/11/1981 |
| From: | Howard J FLORIDA POWER & LIGHT CO. |
| To: | |
| Shared Package | |
| ML20031A509 | List: |
| References | |
| ISSUANCES-A, NUDOCS 8109230606 | |
| Download: ML20031A516 (8) | |
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BCARD In the Matter of
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FLORIDA POWER & LIGHT COMPANY
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Docket No. 50-389A (St. Lucie Plant, Unit No. 2)
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SUPPLEMENTAL AFFIDAVIT OF JOE L. HOWARD I am Joe L. Howard. My business address is 9250 W. Flagler Street, 1
Miami, Florida, and I am employed as Vice President-Treasurer and Chief Financial Officer of Florida Power & Light Company (FPL).
j In the course of my employment, and with the benefit of certain i
information supplied by Ernest L. Bivans, Vice President-System Planning l
of FPL, I made, in late 1980, an analysis of the projected impact on i
other FPL rate-payers of the addition of substantial new wholesale i
l loads. The projections spanned the period 1981 through 1995, Since thia material was prepared several months ago, the computations and i
assumptions involved may have changed somewhat. For one thing, FPL's recently consummated purchases of coal-produced energy from the Southern Company would be factored into an analysis performed today. However, I j
t believe that a study performed today would confirm the conclusion that t
the addition of wholesale loads to FPL's system would increase the costs borne by all other customers.
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The analysis was performed with the assistance of my staff and j
I using FPL's corporate financial model. The expected impact on FPL's I
customers was quantified for each of four hypothetical cases, involving the addition of 500 Mw or 1000 Mw of additional wholesale load to FPL's 8109230606 810914.
PDR ADOCK 050003e9 M
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1 system, assuming, for each quantity (i) that the leads were added without any meaningful notice, and, (ii) in separate cases, that eight years notice was provided to FPL before the additional loads were first served.
For the purposes of the comparison, the " base case" consists of the FPL load forecast and associated generation and transmission expansion program as of January 1, 1980.
Mr. Bivans (with the assistance of his staff) prepared hypothetical resource plans to serve the loads in each of the cases analyzed, and performed simulations to determine estimated fuel costs for each case, taking into account the assumed modificaticns in the resource plans.
Using this information, my staff and I analyzed capital requirements and total revenue requirements in each case (includin6 the base case), and determined the change in revenue requirements from all customers included in the base case in each of the four cases as compared with the base case.
In order to determine the net impact on all customers other than the new wholesale customers, we estimated the revenue which would be received from the new wholesale customers, assuming that wholesale ratee would ren.ain designed as they were in 1980s and that increases in rate level would trace increases in FPL's average system costs.
The addition of the hypothetical new loads was determined to adversely affect FPL and its ratepayers in two *uasic ways:
- 1) In the "without notice" cascs, service of the additional loads was found by Mr.
Bivans to require the purchase of oil in order to generate almost eli of the excess energy required, until new coal-fueled facilit$ts could be constructed.
S.'.nce the cost of producing energy with oil is considerably higher than FPL's average system fue3 cost, all of FPL's cuscarcrs will l
- pay a higher fuel charge. 2) In all four cases, it will be necessary to construct additional new fac,ilities in order to supply the increased loads and maintain planned reserve margins.
Mr. Bivans estimated that coal-fueled generating facilities constructed for service between 1988 and 1995 would cost $760 per Kw in 1980 dollars, a cost much higher than FPL'c embedded cost of generating plant now or as projected at that In addition to the higher cost of new facilities, I projected time.
that the capital required for their constru; tion will cost considerably more than FPL's embedded cost of capital. These effects, again, will increase the cost of electricity to the consumer.
The impect oa the average customer for each of the four cases In the least relative to the " Base Case" is shown in Attachment A.
burdenrome casa, where the company would be required to serve 500 Mw of additional wholesale load after suitable notification, the customer would, on the average, pay around $770 more on his electric bill over In the harshest case, where 1000 Mw is added with the 15 year period.
no prior notice, the average customer would pay about $2,500 more over the same period. The cumulative burden on all of FPL's customers (excluding the new wholesale customers) ranges from $2.3 billion in the least burdensome ("500 Mw with notice") case to $7.2 billion in the "1000 Mw without notice" case. This is shown on Attachment B.
For purposes of this affidavit, and using the data derived in my ase in revenues collected 1980 analysis, I calculated the percentage incre from all customers,~other than the hypothesized new wholesale customers,.
l which would result from addition of the new loads assumed in the four The results are shown on Attachment C, which indicates that cases.
cumulative revenues from 1988 to 1995 would increase 3.0% from the Base Case to the "500 Mw with notice" case; in the "1000 Mw without notice" case, cumulative revenues f rom 1981 to 1995 would be 6.6% higher than the Base Case.
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In addition, my analysis indicated that FPL's shareholders would be d
adversely af f ected by the increased financing requirements associate with serving these additional loads. The impact would be especially burdensome if additional shares of common stock must be marketed at a price below book value, for the reasons given in my affidavit of Aui,ust 7, 1981.
Further affiant sayeth not.
p'L.Ro'wsrd Subscribed and sworn to before me this /L ay of _ 2M'#/
4 1981.
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DLS/CRR 9-29-80 ATTACHMENT A CUMULATIVE BURDEN OF ADDITIONAL PR AND FR ON AVERAGE EXISTING CUSTOMERS 2600 D $2472 (1000 W without 2400 g
notice) 2200 2000 1000 C $1660 (f) i Z 1600 (1000 W with l
O notice)
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N B $1071 (500 W without 1000 notice) 800 A $769 (500 W with 600 notice) 400 200
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1980 1983 1986 1989 1992 1995
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YEAR u
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i DLS/C 2 9-29-80 ATTACFiMENT B 4
CUMULATIVE BURDEN OF ADDITIONAL PR AND FR ON ALL EXISTING CUSTOMERS 8000 D $7235m (1000 m without i
7000 notice) 6000 (A
c $5069m 1
Z (1000 m with O.__5000 notice)
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4000 i
49 B S3112m 3000 (500 W withour.
j notice) i A $2348m (500 W with 2000 notice)
I 1000 1980 1983 1986 1989 1992 1995 YaR
Y ATTACHMENT C Cumulative Increase in Revenues Paid CASE By All Existing Customers mil _ lions 500 MW with notice
$ 2348 3.0%
500 MW without notice
$ 3112 2.8%
1000 bni with notice
$ 5069 6.4%
1000 MW without notice S 7235 6.6%
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4 ATTACHMENT D YOUNG V. UNITED STATES, NO. 79 CIV. 3430 (S.D.N.Y. JUNE 23, 1981) a 6
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