ML20031B394
| ML20031B394 | |
| Person / Time | |
|---|---|
| Site: | Susquehanna  |
| Issue date: | 09/22/1981 |
| From: | Hecht W ALLEGHENY ELECTRIC COOPERATIVE, INC., PENNSYLVANIA POWER & LIGHT CO. |
| To: | |
| References | |
| NUDOCS 8110010326 | |
| Download: ML20031B394 (20) | |
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UNITED STATES OF AMERICA
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NUCLEAR REGULATORY COMMISSION 15 35pA 0 $ s p]* [fb BEFORE THE t
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m ATOMIC SAFETY AND LICENSING BOARD In the Matter of
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PENNSYLVANIA POWER & LIGHT COMPANY
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Docket Nos. 50-387 and
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50-388
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ALLEGHENY ELECTRIC COOPERATIVE, INC. )
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(Susquehanna Steam Electric Station, )
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Units 1 and 2)
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IN SUPPORT OF APPLICANTS' ANSWER p AFFIDAVIT OF WILLIAM F. HECHT E
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TO NRC STAFF'S MOTION FOR
SUMMARY
DISPOSITION OF CONTENTION 4 %
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County of Lehigh
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- SS Commonwealth of Pennsylvania
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William F. Hecht, being duly sworn according to law, deposes and says as follows:
1.
I am Manager-System Planning for Pennsylvania Power &
Light Company ("PP&L") and give this Affidavit in support of Applicants' Answer to NRC Staff's Motion for Summary Disposition of Contention 4.
A summary of my professional qualifications and experience is included in Exhibit
'_'A" to this Affidavit, a document entitled " Applicants' Testimony of William F. Hecht on 3
Contention 4a and 4b", dated September 15, 1981.
KO S
2.
I have reviewed the Affidavit of Sidney E. Feld, dated September 1, 1981, and the Statement of Material Facts As To O$0 en
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.i 2 -
Which There Is No Genuine Issue to Be Heard, both of which were attached to the NRC Staff Motion for Summary Disposition of Contention 4, dated September 2, 1981.
Both Mr. Feld's Affidavit and the Statement of Material Facts establish that the operation of the Susquehanna units will result in substantial economic savings based upon the differential fuel costs.
My analysis, set forth in Exhibit "A" hereto, presents a detailed system cost analysis of the effects of operating the Susquehanna units as compared with the effects of abandoning them.
My analysis shows that the NRC Staff's analysis very conservatively underestimates the likely benefits of operating the Susquehanna units, even though PP&L's reserve margins in the 1980's will be greater than that required to maintain minimum system reli-ability.
t I
j William F.
Hecht Sworn to and subscribed before me this 22 M day of September, 1981.
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{/ Notary Public atM A. SrwtlCK, Notary Pubhc Altentown, Lenigh County, Pa.
My Commission Expires May 14,1984 l
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of
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PENNSYLVANIA POWER & LIGHT COMPANY
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and
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Docket dos. 50-387
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50-388 ALLEGHFEY ELECTRIC COOPERATIVE, INC. )
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(Susquehanna Steam Electric Station, )
Units 1 and 2)
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APPLICANTS' TESTIMONY OF WILLIAM F. HECHT ON CONTENTION 4a AND 4b September 15, 1981 b
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DIRECT TESTIMONY OF WILLIAM F. HECHT Q.
Will you please state your full name, business address, educational and professional background, and employment background.
A.
William F. Hecht, Two North Ninth Street, Allentown, Pennsylvania. I am employed by Pennsylvania Power and Light Company (PP&L) as Man-ager - System Planning.
In this position I am responsible for the planning of PP&L's electric supply system.
My responsibilities include performing economic analysis of total and marginal system costs for generating capacity additions.
I am also responsible for analysis required to support licensing, rate making and other rec -
ulatory matters associated with the economic and. reliability benefits of the Suaquehanna Steam Electric Station to PP&L and the Pennsylvania-New Jersey-Maryland Interconnection.
I also oversee analytical work cancerning bulk power contracts betweer PP&L and other utilities and the power system analysis of effects of load management applications on the power system.
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l I graduated from Lehigh University in 1964, with a Bachelor of Science Degree in Electrical Engineering.
I received a Master of l
l Science Degree in Electrical Engineering from Lehigh University in l
l 1970.
From 1973 through 1975, I was an Adjunct Professor in the i
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I l
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Electrical Engineering Department at Lehigh University.
I am a Registered Professional Engineer in the Commonwealth of Pennsylvania.
I was employed by PP&L in 1964 as an Engineer in the System Planning Department.
I progressed to Project Engineer and later to Senior Project Engineer in the System Planning Department.
I became Exec-utive Director of the Corporate Energy Planning Council in August 1976, and was appointed Manager - System Planning in May,1978.
Q.
Mr. Hecht, would you please present your testimony.
INTRODUCTION I am here to testify on Contention 4, parts a & b, which read as follow:
"The Susquehanna facility (or, at least, Unit 2 thereof) is not needed; and, as a result, the cost-benefit balance is tilted against authorization of operating licenses (or, at least, a license for Unit 2), for the fol-lowing reasons:
i "a.
Information supplied in the Applicants' ER shows that, in the very low growth rate scenario the entire output of both units will be available for sale outside the service area of the Applicants as the units come on line (ER, Table 1.1-15).
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"b.
The electric capacity of the lead Applicant in 1977 was 40% greater than customer demands from existing facilities.
Latest projections of energy use and requirements during the next 30 years for the Applicants' service area, the period equal to the projected plant's
'useful life,' show that the Applicants can meet the needs of their customers through existing facilities and sources."
I will first give brief responses to these contentions. The balance of my' testimony will explain in detail the need for energy and capacity from the Susquehanna Steam Electric Station (Susquehanna) as related to these contentions.
The statement in Contention 4a, that "the entire output of both units will be avaliable for sale outside the service area" is not accurate.
Susquehanna will have the lowest operating costs (other than hydroelec-tric) of any generating facility on t.he PPE system'.
Electric energy generated by Susq'tehanna will displace energy generated by other plants using more costly fuels such as oil and coal, and will be retained for POSL's own customers. The more costly PPE generation that is then avail-l able will displace other even mere costly generation on the Pennsylvania-New Jersey-Maryland Interconnection (PJM) to which PPE belongs.
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As to contention 4b, PPE agrees that with Susquehanna, its generating reserves for several years will be higher than it is obligated to have in l
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order to meet minimum system teliability standards.
Reserve margin is, however, only one of many criteria that should be considered in analyzing the appropriateness of new capacity.
Factors such as diversity of fuel sources, conservation of oil, and overall economics are also basic to such an analysis.
To conclude a unit is or is not needed ba ed solely on one criterion, such as system reliability, without regard to the other fac-tors, is incorrect.
Operation of Susquehanna is desirable because it provides significant operating cost savings and fuel diversity benefits, it conserves substantial quantities of oil, and it provides a supplemental margin of service reliability for unexpected contingencies.
I will now address contention 4a in detail.
In order to fully understand how Susquehanna fits into PP&L's energy picture, it is first necessary to understand how PP&L relates to the PJM Interconnection of which PP&L is a member.
The PJM Interconnection operates on a "one company" philosophy with free-flowing transmission ties among all member companies.
Under the "one company" concept, the most economic generation available among all members is operated first regardless of the individual company's customers' demand (load).
Each company retains for its system its own lowest cost genera-tion, but makes available for sale other, more costly generation which it does not need at that time, and which may be lower in cost than other 4
companies have at their disposal.
As a result, an individual member company's generation usually will not match that company's load, although absent any sales or purchases outside PJti, the sum of tne member com-panies' generation will, of course, match the sum of the member companies' loads.
If a company cannot generate energy at a cost less than that available on the Interconnection, it will then purchase energy and capac-ity it requires from the Interconnection.
When Susquehanna is placed in service, PP&L will credit the energy gener-ated by these units to its custome. s.
As a result, PP&L will have less need for energy generated by other more expensive PP&L units (coal and oil) to satisfy its customer load.
In addition the available energy from these other PP&L units can be used to replace other, still more costly f
generation on PJM.
Both the buyer (s) (other PJM companies) and PP&L benefit in this case since the savings that result are shared equally between the buyer (s) and PP&L.
PP&L's share of these savings directly benefits its customus because such savings are not retained by the com-pany but are passed directly to them.
Therefore it is my conclusion, based on the testimony presented above, that Susquehanna's output will-be credited to PP&L for its customers and that PP&L customers will benefit because of the displacement of other, more costly generation, which otherwise would have been used to supply the load requirement.s.
5
I will now address contention 4b in detail.
There are many criteria that must be factored into an evaluation of the benefits of new capacity.
The reserve margin is but one of these. cri-teria.
Another major criterion is economics. Fuel diversity and reduc-tion of oil dependency are other important concerns.
To judge whether capacity is needed based solely on any one criterion is not prudent planning.
Since consention 4b focuses on the issue of reserves, I will first address this concern.
Then I will discuss the other criteria involved in the i
i analysis.
Reserves On a utility systesy the reserve margin is that capacity in excess of the peak load.
Reserves are necescary because at the time the peak load i
occurs on the system, some generating units may be under repair or other-wise unable to produce the amount of electricity needed to meet the cus-
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l tomers' demands.
Also, the actual peak could be in excess of that pre-dicted or at a different time than predicted, and it is necessary to plan for such a possibility.
With Susquehanna, PP&L's reserve margin in the 1980's will be greater than that required to maintain minimum system reliability. As part of its PJM 6
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responsibilities, PP&L must maintain a reserve margin of about 10% over its winter peak.
Ly the late 1990's, ss PJM tends towards winter peaking (based on PJM forecasts), this requiremer*, is projected to increase to nearly 20%.
PP&I's reserve requirement has been lower than other util-ities within PJM because of the fact that PPE's peak load is in the winter, whereas PJM's overall peak is in the summer. Also PPE has been s
given credit for its good unit performance record, which is better than the average for PJM.
Addressing contention 4b specifically, Chart 1 (attached) shows PPE's projected capacity through 1992 if Susquehanna's capacity were not avail-able.
Also shown are PP&L's projected loads and its PJM reserve margin obligations.
As described in the testimony of Mr. McNair on Load Forecasting, PP&L forecasts a compound annual peak load growth rate of approximately 2 %
(1977-1995).
With this 2 % load grovth, PP&L would require additional major capacity additions by the mid-1980's if Susquehanna were not allowed to operate. With construction lead times of 10-12 years for new base load generation, PP&L would not be able to meet its reserve margin obligation to PJM in the mid-1980's unless relatively high operating cost units, such as oil-or gas-fired combustion turbines, were added.
Certainly the 30 year figure cited in contention 4b is not correct under this case.
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o e
To illustrate how PP&L's required reserve margin is affected by a 1 per-centile variation in the forecast, these requirements are shown on the I
same chart.
A 1 percentile per year increase above PP&L's forecast would result in a much faster reduction in the reserve margin requiring capacity additions before the mid-1980's.
A 1 percentile decrease would result in a situation where additional capacity would be needed by about 1990.
l Susquehanna's impact on PPE's reserve margin can readily be seen by comparing chart #1 to chart #2.
Chart #2 is identical to #1, except that Susquehanna's capacity is added.
As can be seen, PPE's reserve margin situation will benefit substantially by placing Susquehanna in service.
Fuel Diversity The discussion of reserve generating capacity has centered around the issue of reliability, and it is for reliability purposes that reserve margin requirements are generally determined.
Reliability can also be enhanced by diversitying tne methods and fuel sources that a utility uses to generate electricity.
This is another criterion used to evaluate capacity additions.
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Every fuel source is subject to natural or man-made disruptions.
For example, a utility relying solely on coal is extremely vulnerable to a coal miners' strike.
A utility relying mostly on oil is vulnerable to embargoes or other supply problems.
Therefore a diverse mix of fuel sources is desirable to reduce the risk of over-relince on any one fuel.
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0 PP&L's ;dx of generating capacity by fuel sources is currently about 63%
coal, 33% oil, and 4% hydro. The addition of Susquehanna will result in a mix of about 49% coal, 26% oil, 22% nuclear, and 3% hydro. Thus, with Susquehanna in service, the PP&L system will be made mare reliable due to the increased fuel diversity these nuclear units provide.
Economics The benefits of power from Susquehanna can be further established through its economics.
Because this analysis is somewhat complex, I would first like to give a general overview of the economic impact of Susquehanna, then go into detailed analysis.
Susquehanna Costs and Savin 2s Utilities, as any other business, must recover through revenues those costs associated with providing service.
These revenue requirements include operation and maintenance expenses, taxes, recovery of the cost of property investment through depreciation, and a fair rate of return to investors for 3.oney provided to finance construction of facilities. Under the " cost, of service principle", a utility is permitted to recover the total revenue requirements of providing electric service.
Cartain revenue reqcirements are expected to increase when the Susquehanna units are placed in service. These fall into two general categories:
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Capital-related cos'.s - depreciation, return on investment and taxes o
Opnating & maintenance costs - wages, material, contract engineering & labor etc.,
to operate and maintain the units These increased costs are expected to be partially offset by lower fval costs and the benefits of increased sales of energy to other members of PJM.
The fuel cost for elect.icity used by PP&L's customers will be less with Susquehanna. Also, the company will be able to sell more energy from its coal and oil-fired stations to other utilities in PJM, with the sav-ings from the sales directly benefitting PP&L's customers, as described in my contention 4a response.
Capital-Related Costs Essentially, capital-related costs are the revenues required to:
(1) recover the cost of the plant through depreciation; (2) compensate in-vest.ars for the use of the money used to finance the construction of the plant--called return on investment; and (3) pay income and other taxes.
In this analysis, the capital-related costs of Susquehanna are based on the following assumptions:
1 10
- - - -... ~,.. -.
o Book depreciation straight line method 30 year, 5 month life for Unit 1 29 year, 5 month life for Unit 2 o
Tax depreciation 10 year tax life using the accelerated cost recovery system established in the Economic Recovery Act of 1981, and nor-malization of income taxes o
Rate of Return 12.25 percent cost of capital o
Taxes tax laws and rates in effect after enactment of the Economic Recovery Act of 1981 investment tax credit amortized over the' book life of the plant Depreciation represents recovery of the original cost of the plant invest--
ment over the life of the facility.
For a fixed dollar investment, the annual book depreciation cost remains the same each yesr.
For this analysis, 30 year-5 month and 29 year-5 month economic lives for unit I and unit 2, respectively, are used.
Current NRC regulations pro-vide that the operating licenses will' expire 40 ye rs after issuance of the construction permits.
In Susquehanna's case this would mean (assuming no extension) that both units would shut down in 2013, even though their useful lives may be longer. Tbis conservative assumption will result in a lower value for Susquehanna than if the plant were assumed to operate longer and the fixed costs spread over more years.
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Rate of return represents the amount required to compensate investors for the money they provide to finance construction of the units.
Taxes include federal income taxes and state taxes on income, capital stock, utility realty and gross receipts.
The following analyses combira 41."
the above capital-related costs into one rate which is applied to each unit's in-service cost. This is called the carrying charge.
Depreciation expense is a fairly constant amount after both units are in-service.
For a fixed dollar investment in utility plant, the return on investment declines over the life of the facility as the initial invest-ment is reduced through depreciation.
After Susquehanna is placed in service, the return co:sponent is projected to decrease as more of the plant is depreciated.
Taxes generally track the return on the equity investment in the plant.
Deductions of accumulated deferred Income Tax from plant investments also influence the capital related costs. After both units are in service, the total annual capital related cost 's expected to decrease to the end af the units' economic lives.
After Susquehanna is placed in service, PP&L expects there will have to be cectain capital additions or modifications necessary to improve station performance or meet future regulatory requirements.
When placed in serv-ice, these additions will be recovered through a carrying charge, similar to that used for the original plant.
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0 erating and Maintenance Costs (exclusive c.f fuel)
_E The operating and maintenance costs include such items as:
o Wages and employee benefits o
Materi a and supplies o
Work performed by outside contractors o
Rentals o
Insurance Also included in this category of expense are:
o Carrying charges on nuclear fuel in the reactor o
Plant decommissioning costs Excluded from this category is direct nuclear fuel expense, which 'is included in the fuel and interchange costs.
Operation and maintenance of Susquehanna will require personnel, replace-ment parts, maintenance work by specialized outside contractors, rental of equipment, and insurance. These costs are expected to increase because of N
inflation during the life of the units. An annual cost escalation rate of s
10% in the early years, declining to 9% in the later years, is reflected in the operating & maintenance costs used in this analysis.
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Certain costs unique to nuclear generating units are also included in the general category of operating and maintenance costs. When nuclear fuel is placed in the reactor, it remains there for a period of time. The cost of the portion of nuclear fuel not yet used to generate electricity is treat-ed the same as utility plant for ratemahg purposes.
A return on in-vested capital used to finance the investment in nuclear fuel in the i
reactor and related taxes is included in the operating costs component.
At the end of the useful life of Susquehanna, certain expenditures will be required in order to decomission the plant.
I Separate testimony on contention 9 indicates an expected plant decommis-sioning cost of about $191 million (1980$).
Of that amount, about
$153 million is required for decommissioning the radioactive portion of the plant.
This analysis assumes that PP&L will establish a sinking fund during the plant's life to accumulate this latter cost.
This way, these costs will be recovered from the customers v,ho benefit from the power generated by the plant.
Assuming that costs will rise at about 8% a year (in the long term) and a conservative 7% long term yield on its sinking fund, the average total annual charge for decommissioning costs is expected to be about
$18.5 million.
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Fuel Costs and Interchange Revenues Part of the benefit to PPE's customers from the low-cost nuclear genera-tion of the Susquehanna units can be described as follows.
If Susquehanna were not placed in service, PPE ~would be forced to rely on increasing amounts of very expensive oil-fired generation, and increasing amounts of energy purchased from other PJM utilities, most of which is oil-fired.
With Susquehanna, PPE will have low cost nuclear generation available instead of oil.
The savings of nuclear fuel over oil are expected to be substantial.
In addition to the fuel cost savings described above, PPE's customers are expected 'to benefic from the sale of energy by PPE to other utilities as described in my response to contention 4a.
Generation from PPE's coal and oil-fired stations is expected to replace more expensive oil-fired generation of other companies within the PJM. Under the PJM split savings pricing arrangement, 50 percent of the total fuel-cost savings from these sales directly benefit PPE's customers. The remaining 50 percent savings will benefit the purchasing companies' customers.
Thus, the total savings in energy costs to PPE's customers because of Susquehanna include the direct fuel stavings from using the lowest cost nuclear and fossil units to serve PPE's load and 50 percent of the sav-ings from additional interchange power sales.
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i Net Revenues Required From Customers The additional net revenues required from DP&L's customers due to opera-tion of Susquehanna can be determined by combining the increased capital-related and operating costs with the changes in PP&L's total fuel and interchange charges.
These projections of costs which PP&L would expect to recover are referred to as the " base case" in the remainder of my testimony.
These revenue requirements can then be compared to those required if Susquehanna were abandoned as a result of not receiving operating licenses, to determine the net value of Susquehanna to PP&L's customers.
A discussion of the abandonment scenario follows in the detailed analysis.
Detailed Analysis The material that follows provides a detailed economic analysis that shows Susquehanna is economically beneficial over a broad range of assumptions.
As stated before, PP&L forecasts a couipound annual peak load growth rate l
of approximately 2 % per year through 1995.
In order to have a high probability of " capturing" the eventual actual peak load, PP&L brackets its load forecast with a 1% band. Because the load growth assumption is important in the economic evaluation, PP&L perfot sd the following ana-lyses based on an annual load growth rate of 3 % per year, or what is l
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referred to hereafter as the hM load growth, and a growth rate of 1 %
per year, or the low load growth. These 1 percentile variations from the company's 2 % load growth forecast were examined to show the effect of load g. owth variatiocs on the economic impact of Susquehanna.
In these analyses, I will be referring to the value of Susquehanna. Value is defined as the net economic benefit to PP&L customers that results from placing the plant in service versus abandonment of the facility.
This value is detennined in the fir *; analysis presented by quantifying the total cost of service that would result in the base case and if Susque-hanna were abandoned.
Subsequent analyses will show the changes to the net value resulting from varying other assumptions of that analysis.
To determine the value of Susquehanna, it is necessary to examine the difference in PP&L's revenue requirements with the plant in-service, and if Susquehanna were abandoned.
It is assumed that if Susquehanna's operating license were denied, all work would cease on both units by November 1982.
It is further assumed that unit I would be 100% complete. PP&L's total investment in the plant i
at that point, less salvageable equipment, plus cancellation costs, would l
amount to about $2.6 billion.
Added onto this would be PP&L's investment i
in nuclear fuel, which is about $300 million after salvage and cancella-tion costs.
To conservatively understate the abandonment costs, I have assumed, for this analysis, that the recovery of the abandonment cost of Susquehanna from customers would occur over a 30 year period.
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I will now quantitatively discuss each of the revenue requirement compo-nents in the base case and how each is expected to be affected by abandon-ment of Susquehanna.
Carrying Charge Table 1 shows the carrying charges for the Susquehanna plant in the first ten years of its operation.
Line 1 represents the base case with assump-tions stated on pages 10 & 11.
PP&L's cost for unit 1 is expected to be
$1.735 billion, and for unit 2 is $1.415 billion.
Again to conservatively understate the cos. of abandonment of Susquehanna in these analyses, it has been assumed that the abandenment loss would eliminate all Federal and state income tax liabilities as soon as possible. As a result the abandonment case carrying charge is lower than the carrying charge for the base case during the first eight years, as shown on line 2.
After the eighth year the abandonment case carrying charge increases above the base case because at that time all tax benefits arising from the abandonment loss would have been flowed through to Customers.
Line 3 shows the difference between the two revenue requirements for the first ten years of Susquehanna's operation.
In this period, PP&L's reve-nue requirement would decrease by about $450 million if the plant were abandoned, with a January 1982 present worth of about $250 million.
1 18
Operatioc & Maintenance Table 2 lists the various operation and maintenance (0&M) costs, as I described earlier.
The direct O&M costs (line 1) do not uniformly increase in time. This is because the O&M costs are sensitive to whether one or both units are scheduled for maintenance during that year.
The decommissioning cost (line 2) reflects thos'e annual payments into a sinking fund necessary to accumulate the funds described in PP&L's re-sponse to contention 9.
The indirect fuel cost (line 3), is the carrying charge on the fuel in the Core.
In the 10 year period 1983-1992, Susquehanna's total operation and mainte-nance costs are projected to be about $1.6 billion, with a January 1982 present worth of about $680 million. If Susquehanna were abandoned, these l
l expenses would not be incurred.
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Capital Additions Table 3 shows the projected annual value of capital additions to Susquehanna, as well as the associated carrying charge. On average, about 19
$25 million of additional capital equipment and modifications for each unit are expected to be placed in. service during each of the first aine years of operation, after unit 1 is placed in-service.
PPE's share of these costs is about $45 million. A carrying charge rate was applied to the capital cost of these additions just as it was to the plant itself to derive revenue requirements.
This carrying charge results in approxi-mately $8 million a year increase in revenue requirements for every year in this period in wbich there are expected to be capital additions.
If the plant were abandoned, ncne of these additions would be installed, thus these revenues would not be required.
Fuel Costs and Interchange Revenues Tables 4 and 5 show changes in PPE's fuel costs and interchange revenues that wou.d result from abandonment under the low load growth and high load growv scenarios, respectively.
l represent the total cost of fuel consumed by all of PPE's Fuel Costs l
units to meet both PP&L's customer needs and PJM sales. Also ref'.ected are the firm contract arrangements between PPE and other parties.
l Net Interchange Revenues - represent the net amount received by PPE as a result of sales and purchases between PP&L and PJM.
These receipts in-clude both revenues to cover the cost of the fuel consumed and the split-savings margin, as described earlier in my testimony.
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If Susquehanna were abandoned, PP&L's f.lel costs would increase primarily due to increased reliance on high cost oil.
Also, PP&L's revenues from sales of energy to PJM would be substantially less.
The combined effect of these two changes in costs would be to significantly increase PP&L's total operating costs.
Table 4 shows that under the low load growth conditions, without Susque-i hanna, PP&L's revenue requirement for fuel and interchange costs would increase by about $9.2 billion in the ten year period. Table 5 shows that under the high load growth condition, PP&I.'s revenue requirement for fuel and interchange costs would increase by about $11.6 billion. The January 1982 present worths of these figures are $3.8 billion and $4.7 billion, respectively.
Totap Tables 6 and 7 summarize the total revenue requirements under the base case and abandonment case, for both low and high load growth scenarios.
Line 11 shows the annual value of Susquehanna to PP&L.
If Susquehanna were abandoned, PP&L's revenue requirements between 1983 and 1992 would be
$6.8 billion (low growth) to $9.2 bil. lion (high growth) higher than if the plant were to be placed in-service as scheduled. The January 1982 present worths of these values range from $2.7 billion to $3.6 billion.
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These values assume that both units would be abandoned.
If unit I would be licensed, but not unit 2 - and unit 2 thus abandoned - the value of Susquehanna would be approximately half of the figures cited above.
Beyond 10 Years PP&L can, with reasonable certainty, project the total rewnue require-ments in the first 10 years of operation of Susquehanna.
Beyond this initial 10 year period, these projections become less certain. However, definite trends can ba seen that.till qualitatively show how Susquehanna will remain economically attractive throughout its life.
The carrying charge on the initial plant can be reasonably projected over the life.of the plant. In the period beyond 1992, the total annual carry-ing charge for the base case will continue to decrease, as more of the plant is depreciated.
As discussed previously, after the eighth year the abandonment case canying charge is greater than that of the base case.
This relationship continues through the remainder of the 30 year period.
Capital additions will probably continue throughout the life of the plant in response to regulatory requirements. As noted earlier, these costs are expected to add only a small amount to averall capital related charges.
Operation and maintenance costs, exclusive of fuel, vill continue to escalate, at an assumed rate averaging 9% per year.
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s Nuclear fuel costs are projected to escalate na flaster thou fossil fuels, thus the operating savings will tend to increase at that same rate.
In summary, beyond 1992 PPE projects the carrying cost on the initial plant will decline, operating and maintenance costs and capital additions will increase, and operating savings will continue to increase.
Overall it is expected t' at PPE's customers will experience even greater benefits a
in the future than anticipated for the first 10 years of operation.
P2 Benefits Other P2 utilities also benefit economically from Susquehanna's opera-tion.
As I described in my response to contention 4a, the energy from Susquehanna will result in the displacement of high cost oil-fired energy elsewhere on the P2 system by relatively inexpensive PPE coal-and oil-fired energy.
These savings result in reduced fuel and interchange costs for these other P2 companies.
For the period 1983 to 1992, other P2 utilities will save between $2 bil-lion and $3 billion, depending on PPE's load growth.
Effects of a Delay If Susquehanna is not placed in service as scheduled, PP&L's revenue requirements will increase above those required for the base case and thus the value of the plant will decrease.
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1
Tables 8 through 13 show the differences in the appropriate cost compo-nents between the base case and one year delay case.
As can be seen on tables 8, 9, and 10, over the 10-year period the carrying charge and O&M costs increase.
Table 11 shows a decrease in the capital additions.
Tables 12 and 13, for the low and high growth rates respectively, show that a delay will reduce fuel and interchange benefits to PP&L's cus-tomers.
Tables 14 and 15 summarize the changes in PP&L's revenue requirement due to a year's delay.
As can be seen on line 11 of these tables, about
$800 million additional revenue in the ten year period 1983-92 would be required for either high or low load growth rates. However, Susquehanna's value is still about $6.0 billion to $8.4 billion in the ten year period, with a preser.t worth of about $2.4 billion to $3.4 billion.
Effects of Capacity Factor Variations The economic benefits of Susquehanna can be shown to exist even under a wide range of capacity factors.
For this analysis, PP&L used both a l
pessimistic lifetime capacity factor of 50%, and an optimistic factor of 80%.
The only cost that would be significantly affected by this change in capacity factor would be fuel costs and interchange revenues.
Carrying charges, capital additions, and operating and maintenance (excluding fuel) would remain apprcximately the same.
24
1 Tables 16 and 17 show the effect of a 50% lifetime capacity factor upon the fuel costs and interchange revenues, assuming low and high load growth rates, respectively.
This pessimistic forecast of Susquehanna's capacity factor results in a decrease in the plant's value.
In the first 10 years of operation, the value decreases between about $1.9 billion and $2.4 bil-lion.
However, the net value of the plant in this same time period remains substantial, between $4.9 billion and $6.8 billion, or present worth values of $2.0 billion and $2.7 billion.
If we were to assume an optimistic 80% lifetime capacity factor, the value of Susquehanna increases between $1.3 billion and $1.6 billion, with the net value at between $8.1 billion and $10.9 billion. The present worth of these values are $3.3 billion and $4.4 billion.
Tables 18 and 19 show this in detail.
I Summary i
Table 20 summarizes the value of Susquehanna to PP&L, and the effects of i
changes of certain key assumptions, as described above.
Under all of these changes and conditions examined, which assumed both pessimistic and i
optimistic conditions and assumptions, Susquehanna is a net economic l
bcnefit to PP&L and its customers. Most importantly, this benefit begins to accrue from the date of the plant's commercial operation.
25
Effects On Oil Usage As I described earlier, Susquehanna will reduce both PP&L and PJM use of fuel oil, both residual oil used in steam boilers, and the higher priced distillate oil used in combustion turbines and diesel engines.
Table 21 summarizes how much oil is displaced during the first 10 years of Susque-hanna's operation.
This oil will directly or indirectly reduce this nation's requirements for imports of oil from overseas, barrel for barrel, by about 120 million barrels of oil.
Susquehanna will, therefore, serve to meet important national energy goals.
Conclusiens I hree shown that Susquehanna meets the criteria for determining whether additional capacity is justified.
From the study described in my testi-many, I conclude that:
1.
Susquehanna will be economically beneficial to PPD : d its rate-payers 2.
Susquehanna will provide an extra :neasure of reliability to the PP&L and PJM system 3.
Susquehanna will displace expensive and politically insecure imported oil.
26
Q.
Mr. Hecht, does this conclude your testimony?
A.
Yes, it does.
PW:cyc 22/H i
l 4
1 I
t l
)
1 i
l i
k 27 l -
CIIARTS AND TABLES IN SUPPORT OF DIRECT TESTIMONY OF WILLIAM F. IIECilT Contentions laa, lib
0 e
i O
Ci 0
4
CILWP I PPtL PP&L CRPRCITY/ RESERVE OSLIGRTION - NO SSES to 8
NET INSTALLED CRPRCITY 3.5%
caractiv 08t.IGATION 7
2.5%
nance ll, iili I
. ll ll Ol!
a g
1.5%
u.
OIL E
5 2
.y..
I I
I ll Ill!lllllllllll E
u ll lllll l0' cx I
S I
2
]
1
\\
1 t
\\#"'
O 1981 1902 1983 1984 1985 1986' 1987 1988 198S 1990 1991 1992 RESERVE RS A *I 0F CRPRCITY OBLIGATION caracary 3.5%
1 11 l
19 18 O
t1
-8
-13
-16
-20
-23
-27
-29 imuanmu 2. 5%
lil 19 18 7
6 2
- 5
- 8
'-10
-13
-17
-18 i
c-e 4n
,n 4 n n
r m
't CIIART II e
PPtL PPAL CRPRCITT/ RESERVE OBU ORTION 10 8
NET INSTALLED CAPACITY\\
l l g; igjd L p -
e 3.5%-
caracin
-~
OIL
~
7 2.5%
"8 ""
/
- c y L
- j. E Yu l
Nk N
e a
i m
e i
,.g I
l C
i 'l
- I i
ll I
^'
E 5
l o
, il
.i d
l i Ld N,lf NOHL h
1 i l u lll i I I
i L
I s
i i
.:I l
I i
u I
Ilu l
l i
I s i
i k n I
i a
ln.
W
' 4 H8HNR. 2i i. :..
- i:i: ~:.-..' '::!:":i.:. i...' '.:..: : :~. ~ : :.. -... :.
- . i
'i.:
l
- . :~..-. : N.. U.C...L.. E..A...R... '.' ":.:. :"' : :.:. ': ' ' ::.::: ':.. :. :.'. '.' : -
~,.:.::
1 n%%%wdwlsml wm..aggg: g ::......:
g u
i 4
x4 %%4w s M u h u m W W(OROA M X m m NN%Ng% w m m w 0
1981 1982 1983 1954 1985 1986 1987 1988 1989 1990 1991 1992 RESERVE RS R % OF CAPACITY GBL]GRTION 2nractTy 3.5%
lll 19 34 28 23 18 l
11 7
3
-1 L1
-7
^ucarrou 2. 5%
l ti 19 S tl 38 35 30 21 18 15 11 9
7 t-cv. -- u i --
i n ---- --- o n
-- n t-n n
- m m u -
n a-
e 9
- i 1
M k
m o
d C4 CO 31 8=
l
)
iABLE 1 SUSQUEHAtNA EC0tOHIC TESTIt*0HY PPdL CARRYING CHAROES TCR OWlERSHIP SHARE BASE VS. ABANDONNENT CASES (MILLIONS OF CURRENT DOLLARS) 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 TCTAL 1.
BASE CASE
$ 211 579 713 670 631 594 558 523 500 487 5466 2.
ABANDOt#1ENT CASE 489 476 463 450 471
- %7 443 456 660 639 5004 3.
DIFFEREttCE 278
-103
-250
-220
-160
-137
-115
- 67 160~
152
- 462 4.
PRESENT WORTH (1932 $)
221
- 73
-157
-123
- 80
- 61
- 46
- 24 50 43
- 25e I
i l
1 i
4 4
1 7
i l
1 1
I
4 TABLE 2 SUSQUEHAMIA ECONOMIC TESTIMONY PP&L OPERATION & MAINTENANCE COSTS FOR OWNERSHIP SHARE BASE CASE (MILLIONS OF CU4 RENT DOLLARS)
I 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 TOTAL i
n 1.
OPERATION 1 NAINTENANCE
$ 26 71 110 139 144 142 155 192 188 214 1386 1
2.
DECONNISSION1HG 5
13 18 18 18 18 18 18 18 19 163 3.
INDIRECT FUEL 1
- 2
- 7
- 5
- 3 2
4 6
9 10 17
!4.
TOTAL 32 82 121 152 164 162 177 216 215 243 1566 4
5.
1ESENT WORTH (1982 93 25 58 76 85 82 72 70 76 68 68 681 t
I 4
4 i
4
TABLE 3 SUSQUEHA>&lA EcotiONIC TESTIMOHY PP&L CAPITAL ADDITI0tl5 *0R Ol44ERSHIP SHARE
~
BASE CASE (NILLIDHS OF CURRENT DOLLARS) 1983 1 184 1985 1986 1987 1988 1989 1990 1991 1992 TOTAL 1.
IN SERVICE COST 0*
45 45 45 45 45 45 45 45 45 0F ADDITIONS 2.
CUNULATIVE COST 0
45 90 135 180 225 270 315 360 405 OF ADDITIDilS 3.
CARRYING CllARGE 0
0 16 24 32 40 48 56 64 72 360 i
4.
PRESENT WORTH (1982 SI O
6 10 13 16 18 19 20 20 20 142
- THERE WILL BE HO CAP 2YAL ADDITIGnS ACCOUNTED FOR SEPARATELY UNTIL AFTER UNIT 1 IS IN SERVICE.
4 I
i J
l i
f I
TABLE 4 SUSQUEHAtNA ECf310 HIC TEST 1HONY FUEL COST! Ate INTERCHAt4GE CEVEffJES - TEN YEAR ANALYSIS BASE VS. A8Amut#1ENT CASES LOW LOAD GR0l4TH (t1ILLIGHS OF CURRENT DOLLARS) 1983 1984 1985 1986 1987 1988 1939 1990 1991 1992 TOTAL BASE CASF:
1.
PPal TOTAL FUEL COST
$ 892 1066 1149 1297 1329 1581 1853 2057 2291 2600 16115 l
2.
PPAL NET INTERCHANGE REVENUE
-619
-980
-1948
-1262
-1300
-1531
-1886
-2043
-2065
-2553
-15287 l
3.
TOTAL 27'.
86 101 35 29 50
- 33 14 226 47 828 ABAC 0t#1ENT CASE:
4.
PPIL TOTAL FUEL COST 851 1000 1142 1293 1377 1629 1895 2131 2315 2649 16280 5.
PPAL NET INTERCHANGE REVENUE
-430
-503
-M9
-641
-543
-669
-727
-754
-658
-773
-6254 6.
TOTAL 421 497 583 652 834 960 1168 1377 1657 1876 10026 DIFFERENCES:
7.
PPAL TOTAL FUEL COST
- 41
- 66
- 7
- 4 48 48 42 74 24 49 165 8.
PPAL HET INTERCHAtlGE REVENUE 189 478
<!)
622 757 862 1159 1289 1407 1781 9033 9.
TOTAL 148 412 482 618 805 910 125) 1363 1431 1830 9198 10.
PRESENT WORTH (1982 93 117 291 304 347 402 405 476 482 451 513 3789 l
l 4
t TABLE 5 SUSQUEHAt#4A ECONOMIC TESTIt10NY FUEL COSTS At0 INTERCHANGE REVENUES - TEN YEAR ANALYSIS BASE VS. ABA100ft1ENT CASES HIGH LOAD GROWTH (MILLIONS OF CURRENT D0'LARS) i 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 TOTAL BASE CASE:
1.
PP8L TOTAL FUEL COST
$ 924' 1098 1207 1343 1404 1673 1971 2224 2463 2785 17092 2.
PP&L NET INTERCHANGE REVENUE
-478
-802
-787
-886
-866
-879
-1032
-977
-592
-779
-8048 i
3.
TOTAL 446 2 96 420 457 538 794
'w w 1247 1871 2006 9044 ABAt00tt1ENT CASE:
4.
PPAL TOTAL FUEL COST 879 1028 1187 1342 1440 1709 2003 2232 2468 2801 17089 5.
PP&L tlET INTERCHANGE REVENUE
-265
-258
-188
-129 101 211 440 797 1262 1651 3602 6.
TOTAL 614 770 909 1213 1541 l
1920 2423 3029 3730 4452 20691
!BIFFERENCES:
7.
PPSL TOTAL FUEL COST
- 45
- 70
- 20
- 1 36 36 72 8
5 16 3'
8.
PP&L NET INTERCHANGE REVENUE L13 543 599 757 966 1090 1422 1773 1853 2429 11650 9.
TOTAL 168 473 579 756 1002 1126 1454 1781 1858 2445 11647 1
' 10.
PRESENT WORTH (1982 S) 133 334 365 424 501 501 577 629 585 686 4736 i
i 1
TABLE 6 i
SUSQUEHAA,1A ECONOMIC TESTIMottY SutttARY OF TOTAL HET REVENUE RECUIREMENTS ESTABLISHING VALUE OF SUSQUEHAt24A BASE 45 ABAFT;ONNENT CASES LOW LOAD GROWTH (FILLI0t4S OF CURRENT DOLLARS) 1983 1984 1985 1986 1957 1988 1989 1990 1991 1992 TOTAL BASE CASE 3 1.
CARRYING CHARGES 6 211 579 713 670 631 594 558 523 500 487 5466 (TABLE Il 4
2.
OPERATIOli & MAINTENANCE 32 82 121 152 164 162 177 216 215 243 1566 (TABLE 23 4
3.
CAPITAL ADDITI0t{S 0
8 16 24 32 40 48 56 64 72 360 (TABLE 3) i 4.
HET FUEL 1 INTERCHANGE 273 86 101 35 29 50
- 33 14 226 47 828 (TABLE 43 3
l 5.
TOTAL 516 755 951 SSI 856 846 750 809 2005 849 8220 a
A3%)e0t#1ENT CASE 6.
CARRYIHG CHARGES 489 476 463 450 471 457 443 456 660 639 5004 (TABLE 13 7.
OPERATIDH & MAINTENANCE O
O O
O O
0 0
0 0
0 0
8.
CAPITAL ADDITIDilS 0
0 0
0 0
0 0
0 0
0 0
1 9.
HET FUEL & INTERCHANGE 421 497 583 652 834 96 0 1168 1377 1657 1876 10026 (TAULE 43 10.
TOTAL 910 973 1046 1102 1305 1417 1611 1833 2317 2515 15030 i
I
' 11.
VALUE OF SUSQUEHANNA 394 218 95 221 449 571 861 1024 1312 1666 6810
( DIFFE.9EHCE )
12.
PRESENT WORTH (1982 $)
313 154 60 124 224 254 342 362 413 467 2713 i
e
TABLE 7 SUSQU; hat #4A Ecott0MIC TESTIN0 tty SUtttARY OF TOTAL HET REVENUE REQUIREMENTS iSTADLISHING VALUE OF SUSQUEHAl#4A BASE VS. ABAt00ta1ENT CASES HIGH LCAD GROWTH
(
INILLI0tlS OF CURREtlT DOLLARS) 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 TOTAL Sagr catE:
i 1.
CARRYING CHARGES
$ 211 579 713 oso 631 594 958 523 500 487 546/
(TABLE Il 2.
OPERATION & NAINTENANCE 32 82 121 152 164 162 17?
216 215 243 1566 (TABLE 23 3.
CAPITAL ADDITIONS 0
8 16 a4 32 40 48 56 64 72 360 (TABLE 3)
T 4.
NET FUEL & INTERCHANGE 446 2%
420 457 538 794 c69 1247 1871 2006 9044 iTABLE SI N 4 5.
TOTAL 689 965 1270 1303 1365 1590 1752 2042 2650 2806 16436 ABA>O0t#1ENT CASE i
6.
CARRYING CHARGES 489 476 463 450 471 457 443 456 660 639 5004 (TABLE 1) 7.
OPERATION & HAINTENANCE 0
0 0
0 0
0 0
0 0
0 0'
i 8.
CAPITAL ADDITIDilS 0
0 0
0 0
0 0
0 0
0 0
t 9.
h.
FUEL & INTERCH.4NGE 614 770 999 1213 1541 1920 2423 3029 3730 4452 20691 tTABLE 5) i
- 10.
TOTAL 1103 1246 1462 1663 2012 2377 2866 3485 4390 5091 25695 l
11.
VALUE OF SUSQUEHAtelt 414 281 192 360 647 787 1114 14t:3 17k2 2283 9H9 (DIFFERENCE) 12.
PRESENT WORTH (1982 $3 329 199 121 201 323 350 442 510 548 640 3663
(
9 6
9 E
e M
CO 4
C4 O
h d
5 M
M to A
3-
TABLE 8 SUSQUEHAletA ECONONIC TESTIMONY PP&L CARRYING CHARGES FOR OMIERSHIP SHARE BASE VS. DNE YEAR DELAY CASES (MILLIONS OF CURRENT DOLLARS)
J 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 TOTAL 1.
BASE CASE
$ 211 579 713 670 631 594 558 523 500 487 5466 2.
Of1E YEAR DELAY CASE w 0
238 651 802 754 711 670 628 602 589 5645 3.
DIFFERENCE
-211
-341
- 6.
132 323 117 122 105 102 102 179 4.
PRESENT WORTH (1982 41
-167
-241
- 39 74 61 52 44 37 32 29
- 118 s
j
- 90% OF UNIT COSTS:
UNIT 1 8 1957 UNIT 2 1589 TOTAL 6 3555 4
4 4
J 1
4 t
8
4
~
TABLE 9 SUSQUEHAte4A Ecoff)ttIC TESTIMONY PPAL OPERATION & ttAIN*.II'ANCE COSTS FOR OlclERSHIP SHARE ONE YEAR DELAY CASE t.*TLLIONS OF CURRENT DOLLARS) 1983 1984 1985 1936 1987 1988 1989 1990 1991 1992 TOTAL i 1.
OPERATION & MAINTENANCE 9
0 32 88 134 169 181 172 188 239 238 1441 2.
DEC0tt1ISS;..HING 0
5 14 19 19 19 19 19 19 19 153 3.
IHOIRECT FUEL 0
1
- 1 7
- 5 2
2 3
6 2
3 i
O.
TOTAL 0
38 101 746 183 202 193 210 264 259 1597
, 5.
PRESENT HORTH (1982 93 0
27 64 82 91 90 77 74 83 73 660 1
- 9g 4
i i
e t
4 TABLE 10 SUSQUEHA>HA ECONOMIC TESTIMONY PPAL OPERATION & MAIITTENANCE COSTS FOR OWNERSHIP SHARC BASE VS. ONE YEAR DELAY CASES (MILLIONS OF CURRENT DOLLAWS) 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 TOTAL 1.
BASE CASE
$ 32 82 121 152 164 162 177 216 215 243 1566 i
2.
ONE YE#R DELAY CASE O
38 101 146 183 202 193.
210 264 259 1597 3.
DIiFEREHCJ
- 32
- 44
- 20
- 6 19 40 16
- 6 49 16 31 4.
PRESENT WORTH (1982 41
- 25
- 31
- 13
- 3 9
IS 6
- 2 15 4
- 21 1
i i
i
}
}
j i
i i
1 I
i e
4 1
4 e
TABLE 11
- USQUEHAPNA EC0t40t1IC TESTIMONY PP8L CAPITAL ADDITIONS FOR C;'*4ERSHIP SHARE CARRYING Ci!ARGES BASE VS. ONE YEAR DELAY CASES (t1ILLIONS OF CIERENT DOLLARS) 1983 1984 1985 1986 1937 1908 1989 1990 1991 1992 TOTAL 1.
BASE CASE 0
8 16 24 32 40 48 56 64 72 36 0 2.
ONE YEAR DELAY CASE 0
0 8
16 24 32 40 48 56 64 268 3.
DIFFEREt.9CE O
8
- 8
- 8
- 8
- 8
- 3
- 8
- 8
- 8
- 72 4.
PRESENT WORTH (1982 $1 0
- 6
- 5
- 4 8..
4
- 3
- 3
- 3
- 2 34 G
a TABLE 12 SUSQUEHAt#4A ECCNOMIC TESTIt10HY HET FUEL COSTS Ate INTERCHANGE REVENUES - TEN YEAR at4 LYSIS DASE VS. DHE YEAR DELAY CASES LOW LOAD GROWTH (MILLIDHS OF CURRENT DOLLAR 3)
.i 1983 1984 1985 1936 1987 1983 1989 1990
'I991 1992 TOTAL BASE CASE 8
) 1.
PPAL TOTAL FUEL COST
$ 892 1066 1149 12?7 1329 1581 1853 2057 2292.
2600 16115 i
2.
PPAL HET INTERC;iAhGE REVENUE
-619
-980
-1048
-1262
-1300
-1531
-1886
-2C43
-2065
-2553
-15287 3.
TOTAL 273 86 101 35 29 50
- 33 14 226 47 828 2
i
~ONE YEAR DELAY CASE 3 4.
PP8L TOTAL FUEL COST 851 1057 1222 1296 1357 1589 1855 2055 2263 2619 16164 5.
PPAL NET INTERCHANGE REVENUE
-430
-728
-1122
-1170
-1218
-1643
-1768
-2042
-2200
-2402
-14731 1
6.
TOTAL 421 329 100 118 139
- 54 87 13 63 217 1433 l DIFFERENCES:
] 7.
PP&L TOTAL FUEL COST
- 41
- 9 73
- 1 28 8
2 2
- 25 19 49 8.
PPSL HET INTERCHANGE REVENUE 189 253
- 75 25 81
-112 119 1
-136 152 556 4
9.
TCTAL 148 244 2
84 109
-104 121 1
-164 171 605
! 10.
P9ESENT HORTH (1982 $1 117 173
- 1 47 54
- 46 48 0
- 52 48 388 i
4 4
1
TABLE 13 SUSQUEHAt#4A ECOH0 HIC TESTIttoin HET FUEL COSTS AFB INTERCHANGE REVENUES - TEN YEAR ANALYSIS BASE VS. DNE YEAR DELAY CASES l
i HIGH LOAD GRONTH j
(HILLIONS OF CURRENT DOLLARS) 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 TOTAL BASE CASE:
1.
PP&L TOTAL FUEL COST
$ 024 1098 1207 1343 1404 1673 1971 2224 2463 2785 17092 2.
PPSL HET INTERCHANGE REVENUE
-478
-802
-787
-886
-866
-879
-1002
-977
-592
-7/9
-8048 3.
TOTAL 446 296 420 457 538 794 969 1247 1871 2006 9344 f
l OHE YEAR DELAY CAS5:
4.
PP&L TOTAL FUEL COST 879 1090 1281 1360 1422 1677 1973 2223 2440 2789 17134 5.
PP8L HET INTERCHANGE REVENUE
-264
-527
-859
-809
-721
-1024
-875
-977
-797
-572
-7425 6.
TOTAL 615 563 422 551 701 653 1098 1246 1643 2217 9709 DIFFERENCES:
7.
PP8L TOTAL FUEL COST
- 45
- 8 74 17 18 4
2
- 1
- 23 4
42 G.
PP&L HET INTERCHANGE REVENUE 214 275
- 72 77 145
-145 127 0
-205 207 623 9.
TOTAL 169 267 2
94 163
-141 129
- 1
-228 211 665 l
1 30.
PRESENT WORTH (1982 $?
134 189 1
53 81
- 63 51 0
- 72 59 434 l
TABLE 14 SUSQUEHAt#4A ECONOMIC TESTIMONY StetlARY OF TOTAL HET REVENUE REQUIREMENTS ESTABLISHING EFFECT OF OHE YEAR DELAY OF SUSQUEHA}MA BASE VS. DNE YEAR DELAY CASES LOW LOAD GROWTH 1
(MILL' IONS OF CURRENT DOLLARS) 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 TOTAL BASE CASE 8 1.
CARRYING CHARGES
$ 211 579 713 670 631 594 SbC 523 500 487 5466 (TABLE 81 2.
OPERATION & HAINTENANCE 32 82 121 152 164 162 177 216 715 243 1566 (TABLE 10) 3.
CAPITAL ADDITIDHS 0
0 16 24 32 40' 56 64 72 36 0 (TABLE Ill 4.
HET FUEL & INTERCHANGE 273 86 101 35 29 50
- 33 14 226 47 828 (TABLE 12) i 5.
TOTAL 516 755 951 881 856 846 750 809 1005 849 8220 i
ONE YEAR DELAY CASE:
1 6.
CARRYING CHARGES 0
238 651 802 754 711 670 628 602 589 5645 7.
OPERATION & MAINTENANCE 0
38 101 146 183 202 193 210 264 259 1597
]
4.
CAPITAL ADDITIDHS 0
0 8
26 24 32 40 48 56 64 288
.i 9.
HET FUEL & INTERCHANG5 421 329 100 118 139
- 54 87 13 63 217 1433 (TABLE 12) 10.
TOTAL 421 605 860 1022 1100 891 900 697 985 1129 8963 11.
DIFFERENCE
- 95
-150
- 91 201 244 45 240 90
- 20 280 743 12.
PRESENT WORTH #1982 81
- 75
-106
- 57 113 122 20 95 32
- 6 79 217 9
0
TIDLE 15 SUSQUEHAF4A feUNOMIC TESTIMONY
~
=
SUNNARY OF TOTAL HE1 RFVENUE REQUIREMENTS ESTABLISHING EFFECT OF ONE YEAR DELAY OF SUSQUEHAHHA B45E VS. ONE YEAR DELAY CASES HIGH LOAD GROWTH (MILLIONS OF CURRENT DOLLARS) 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 TOTAL CASE CASE 8 1.
CARRYING CHARGES
$ 211 579 713 674 631 594 558 523 500 487 5466 (TABLE 81 2.
OPERATION & MAINTENANCE 32 82 121 152 164 162 177 216 215 243 1566 (TABLE 10) 3.
CAPITAL ADDITIONS 0
8 16 24 32 40 48 56 64 72 36 0 (TABLE 11) i 4.
NET FUEL & INTERCHANGE 446 2 96 420 457 538 794 969 1247 1871 2006 9044 (TABLE 13) 5.
T01al 689 965 1270 1303 1365 1590 1752 2042 2650 2808 16436 ONE YEAR DELAY CASES 6.
CARRYING CHARGES 0
238 651 802 754 711 670 628 602 589 5645 7.
OPERATIDH & MAINTENANCE 0
38 101 146 183 202 19s 210 264 259 1597 8.
CAPITAL ADDITIDHS 0
0 8
16 24 32 40 48 56 64 288 9.
HET FUEL 8 INTERCHANGE 615 563 422 551 701 653 1098 1246 1643 2217 9709 (TABLE 13) 10.
TOTAL 615 839 1182 1515 1662 1598 2001 2132 2565 3129 17239 11.
DIFFERENCE 74
-126
- 88 212 297 8
249 90
- 85 321 803 l
j 12.
PRESENT WORTH (1982 $3
- 59
- 89
- 55 118 148 4
99 32
- 26 90 262 l
l I
u M
~u-E e
a e
B Wv s
O E4
- C H
k E
o v1 I
l l
l l
I
- ~.
TABLE 16
]
SUSQUEHAl#4A ECONOMIC TESTIN0tn NET FUEL COSTS AND INTERCHANGE REVENUES - TEN YEAR ANALYSIS BASE VS. LOW CAPACITY FACTOR CASES j
LOW LOAD GROWTH (HILLIONS OF CURRENT DOLLAPS) 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 TOTAL BASE Cabs.
i 1.
PP8L TOTAL FUEL COST 4 892 1066 1149 1297 1329 1581 1853 2057 2291 2600 16115 2.
PPSL NET INTERCHAl4GE REVENUE
-619
-980
-1048
-1262
-1300
-1531
-1886
-2(+3
-2065
-2553
-15287 3.
TOTAL 273 86 101 35 29 50
- 33 14 226 47 828 LOW CAPACITY FACTOR CASE 4.
PP&L TOTAL FUEL COST 8 94 1065 3150 1298 1339 1590 1868 2072 2299 2608 16183 5.
PP8L NET INTERCHANGE REVENUE
-5 96
-882
-1J66
-1215
-1412
-1391
-1576
-1698
-1842
-2096
-13476 j
6.
TOTAL 298 183 84 83 227 199 292 374 457 510 2707 i
DIFFERENCES:
l 7.
PP&L TOTAL FUEL COST 2
- 1 1
1 10 9
15 15 8
8 68 6.
PPAL NET INTERCHANGE REVENUE 23 99
- 18 47 188 139 310 344 223 456 1811 9.
TOTAL 25 98
- 17 48 198 148 325 359 231 464 1879 i 10.
PRESENT WORTH (1982 Si 20 69
- 11 27 99 66 129 127 73 130 729 i
~............. _...........
TABLE 17
~
SUSquEHAP4(A ECONOMIC TESTIN0NY NET FUEL COSTS AND INTERCHANGE REVENUES - TEN YEAR ANALYSIS l
BASE VS. LOW CAPACITY FACTOR CASES HIGH LOAD GRfAITH (NILLImtS OF CURRENT DCLLARS) 1983 1984 1985 1986 1987 1988 19u9 1990 1991 1992 TOTAL BASE CASES l 1.
PPAL TOTAL FUEL COST
$ 924 1098 1207 1343 1404 1673 1971 2224 2463 2785 17092 1
2.
PP&L NET INTERCHANGE REVENUE
-478
-802
-787
-886
-866
-879
-1002
-977
- d2
-779
-8048 l
l 3.
TOTAL 446 296 420 457 538 794 969 1247 1871 2006 9044 l
l LOW CAPACITY FACTOR CASE:
4.
PPSL TOTAL FUEL COST 924 1096 1208 1344 1413 1680 1979 2237 2455 2805 17140 5.
PPSL HET INTERCHANGE REVENUE
-454
-691
-802
-827
-618
-709
-604
-530
-286
-1
-5702 6.
TOTAL 470 405 406 217 795 971 1375 1707 2169 2624 11438 DIFFERENCES:
7.
PP&L TOTAL FUEL COST 0
- 2 1
1 9
7 8
13
- 8 20 49 6.
PP8L HET INTERCHANGE REVENUC 24 111
- 15 59 248 170 398 447 306 598 2346 9.
TOTAL 24 109
- 14 60 257 177 406 460 298 618 2394 10.
PRESENT WORTH (1982 6) 19 77
- 9 34 128 79 161 163 94 173 919 G
u
t b
TABLE 18 SUSQUEHANNA ECONOMIC TESTINONY q
HET FUEL COSTS AND INTERCHANGE REVENUES - TEH YEAR ANALYSIS j
I BASE VS. HIGH CAPACITY FACTOR CASES i
LOW LOAD GROWTH (MILLIONS OF CURREN1 DOLLARS) 1983
) 84 1985 1986 1987 1988 1989 1990 1991 1992 TOTAL I
i IASE CASES 1.
PP8L TOTAL FUEL COST
$ 892 1066 1149 1297 1329 1581 1653 2057 2291 2600 16115 2.
PPAL HET INTERCHANGE REVENUE
-619
-990
-1048
-1262
-1300
-1531
-1886
-2043
-2065
-2553
-15287 3.
TOTAL 273 86 101 35 29 50
- 33 14 226 47 828 HIGH CAPACITY FACTOR CASE:
4.
PPAL TOTAL FUEL COST 891 1967 1147 1291 1327 1575 1849 2053 2283 2595 16077 l
5.
PP&L HET INTERCHANGE REVENUE
-643
-1044
-1215
-1428
-1368
-1704
-1983
-2140
-2335
-2729
-16589 i
6.
TOTAL 248 23
- 68
-137
-41
-129
-134
- 87
- 52
-134
- 512 DIFFERENCES 7.
PPAL TOTAL FUEL COST
- 1 1
- 2
- 6
- 2
- 6
- 4
- 4
- 8 5
- 38 8.
PP8L HET INTu' CHANGE REVENUE
- 24
- 64
-167
-166
- 68
-171
- 97
- 98
-271
-176
-1302 9.
TOTAL
- 25
- 63
-169
-172
- 70
-179
-101
-102'
-279
-181
-1340 10.
PRESENT WORTH (1982 S)
- 20
- 45
-106
- 97
- 35
- 80
- 40
- 36
- 88
- 51
- 598 I
i i
a
.a TABLE 19 SUWUEHAW ECONOMIC TESTIN0NY HET FUEL COSTS Ate) INTERCHANGE REVEFAJES - TEN YEAR 44ALYSIS i
BASE VS HIGH CAPACITY FACTOR CASES HIGH LOAD GROWTH (NILLIDHS OF CURRENT DOLLARS) 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 TOTAL
{ BASE CASE 8 1.
PP8L TOTAL FI'!L COST
$ 924 1098 1207 1343 1404 1673 1971 2224 2463 2785 17092 2.
PP8L HET IHiERCHANGE REVENUE
-478
-802
-787
-886
-866
-879
-1002
-977
-592
-779
-8048 3.
TOTAL 446 296 420 457 538 794 96 9 1247 1871 2006 9044 j HIGH CAPACITY FACTOR CASE 2 4.
PPSL TOTAL FUEL COST 923 1101 1207 1340 1400 1666 1967 2222 2452 2799 17076 5.
PP8L HET INTERCHANGE REVENUE
-505
-872
-988
-1074
-9%7
-1093
-1134
-1998
- 964
-1005
-9681 4
6.
TOTAL 418 229 219 266 453 573 833 li24 1488 1793 7396 DIFFERENCES:
7.
PP4L TOTAL FUEL COST
- 1 3
0
- 3
- 4 7
- 4
- 2
- 11 14
- 15 O.
PP8L HET INTERCHANGE REVENUE
- 26
- 70
-201
-189
- 81
-214
-132
-121
-372
-228
-1634 j
9.
TOTAL
- 27
- 67
-201
-192
- 85
-221
-136
-123
-383
-214
-1649 10.
PRESENT WORTH (1982 51
- 21
- 47
-127
-108
- 4:~
- 98
- 54
- 43
-121
- 60
- 722 i
O
y4 y
I' l
..}
h H
I_
4 1
a j
TABLE 20 SUSQUEHA)#4A ECONOMIC TESTIN0HY TOTAL CUNULATIVE HET VALUE OF SUSQUEHANNA TO PPAL FOR THE TEN YEAR PERIOD 1
1983 - 1992 (MILLIONS OF CURRENT DOLLARS)
LOW LOAD GROWTH HIGH LOAD GROWTH a
l 1.
BASE CASE 6810 9259 1
2.
ONE YEAR DELAY CASE 6067 8456 4
t 3.
LOW CAPACITY FACTOR CASE 4931 6865 4
4.
HIGH CAPACITY FACTOR CASE 8150 10908
}
i i
i i
i I
4 4
b 4
O 5
1
]
TABLE 21 SUSQUEHAl#4A ECOHOMIC TESTIt10NY TOTAL CUNULATIVE DISPLACEMENT OF OIL BY SUSQUEHANNA i
FOR THE TEh YEAR PERIDO 1983 - 1992 (MILLIONS OF BARRELS) 82 DISTILLATE OIL 86 RESIDUAL OIL TOTAL i
i 1.
PP8L 2
18 20 i
)
l 2.
PJM (EXCLUDING PPAL) 35 65 100 l
i 3.
TOTAL 37 83 120 i
i OIL DISPl.ACEMENT INSENSITTVE TO PPAL LOAD GROWTH.
1 i
i i
e 4