ML20037B757

Transcript of 801030 Hearing Before Nj Board of Public Utils in Newark,Nj Re Util Petition for Rate Increase. Pp 3,121-3,212

ML20037B757
Person / Time
Site:	Crane
Issue date:	10/30/1980
From:	NEW JERSEY, STATE OF
To:
Shared Package
ML20037B755	List: ML20037B754 ML20037B756 ML20037B757
References
PUC-3518-80, NUDOCS 8011210378
Download: ML20037B757 (92)

Text

{{#Wiki_filter:, 3121 f VOLUME 20 ^

rd JERSEY DE?AICMENT OF BNERG"E SOARD OF PUDLIC UTILITIES 2

3l NEWARK, WIA JEJtS3Y THURSDAY, CCTO3ER 30, 1980 4I l 5 In the Matter of the Petition of a 6 Jersey Central Power and Light CAL DOCK 3T NO. Cr>mpany for approval of an increase PCC 3515-80 I in rates for einetric servies and n 7( for amendment to tna Levelized 14PU DOCKET NO. 804-235 8l Energy Adjust =ent Clause and fac-l ter for such service. 807-488 9i 10, DEFORS: HO3. STEPiiEN G. MAR 311ALL I Administrativa Law Judge 3i z 12 l O. l ^>>=^=^ucss-13 1 4 )

For the Petitioner, Jersey Central 14 ' Power and Light Company, appears 5

15 KIRSTEN, FRIEDMAN & CHERIN, ESQS., j 3Y JACK D. KIRSTEN, ESQ., and 16 DOLOR 3S DELABAR, ESQ., l 17 Academy Gtreet 17 Newark, New Jersey IS, and 19 ' WILLIAM F. HYLAND, ESO., Of Counsel 0 JAMES 3. LIBER.uN, ESQ., Of Cotmsel 20 ll d 21 !! 22jl l J. H. CUE 37:ER & A000CIATES 24 Cors.orce Street

lewark, New Jersey 23 ;

(201) 623-1974 i O 24 ! 250 a i f 801 1210SM I )

I 312: I O i x,,,. x = x x C c <C<itiou.a> 2' For Department of Public Advocata, Divisica of Aate Counsel, appeari ALFRED L. MARD3LLI, ES')., l Deputy Director .I RAYMOND MAKUL,RSQ., Deputy Public Advocate 10 C e rce Q urt 6l Newark, New Jersey For the Staff of the Board of Public Utilities, appears: 8 I 3" 9 Deputy Attorney C aeral 10 l I. PAUL SLCVI:4, i Supervieing Rate Analfat 11, For the Board of Chesen Freeholdtsrs of ~ g Ocean County, appearsa 13 ' BERRY, SUMERILL, PIGCM., KAGIJJ & i PRIVCTERA, ESQS., 3,3, [ SY JOHN C. GA:IRADNI%, ESO., I 34 Washington Street 15 j j Toma River, 2;ew Jersey i 1 16 l l 17 18 19 ' 20 l 21 i 22 23 I ! O 24, 25 i

A 3123. I Ih JL'LGE MARSHALL: Cood afternoon, ladies I O 2 aod neoeie.en. rhis ts the conei=ned he.rin. i I 3j in the matter of the Petition of Jersey 4j Central Pe er & Light campany, OAL Docket 5l No. PUC-3518-80, with Stephen Marshall, pre-6l siding. l 7l 1 believe today is scheduled for the i 8! direct testimony and cross-exanination of 9l Ifr. Arnold, ths Petitioner's witnssa. Are 10 Y there any other matters the g reies with to ?. 11 bring up before that? 1 12 ' g MR KIRSTEN: Just one preliminavy I3 Q

ratter, your Honor.

f During the cross-e: wAmation of Mr. I4 ' F l 15 Nes.ron yesterday, there was a request for the 16 Iceter which he described as a letter of i II understancing, with the Ontario Hydro people. 18 19 ll 20 21 22 23 J q H 24 1 O 2sa I i

iI 3174 e 1 Im. KIESTS:1 (Centinning) De have 2 submitted, in rssponse to that request, 3 actually tue letters, one dated October 7, 4l 1980 frce Ontario Hydro addressed to Mr. i 5i pieckamp and a letter from !tr. Dieckamp to 6 Ontario Hydro dated September 26, 1900. I would suggest they be =arked for identi- ~ 8 fication as JC-S15. I 9j JU000 :tAaG: TALL: If there is no objec-10 l tion, they will be so rarked JC-615. l -i l' :i (Le tter dated October 7, 1900 from 2 1 12. Cntario Hydro to ?fr. !!crman Dieckamp and () 13 letter icted Septesbor 26, 1930 fres !1r. f 14 Herman Diockamp to Ontario Hydro marked 15 JC-015 for identification.) i 16 MR. KIRST2:3 2 Mr. Itardelli ladicated 1~ 'tnat he had requested about 10 minut-rs for i 18 l some other matters. Mr. Arnold is available 19 l for hearing this morning. I advised 6very-20 l cne, and I would liks to advise you, sir, 21 that Mr. Arnold has a centlict this after-22 l! noon on a very important matter which requires 23 him to leave at 3:30, and within those time []} 24 l restrainta, I want to put him on the stand 1 25 ! and perhaps the Company could start with I l l

1 3125 1 his examination and if there is a need to O 2 interrupt his testirony 13 take care of Mr. 3 uardelli's natter, we can do that. 4 M% NARDELLI: My thought was to have 5 Mr. Arnold go on the stand, give his direct 6 testimony, and then we would present two 7 public witnesses, at which time Mr. Arnold 8 would resume the stand for his cross examina-9l tien. l 10 [ m'DGU MAltstfALL: If there is no objec-I ~ 11 ; tica, that seems quit.s all right. l 12 l 3 0 D E It T C. ARHOLD, sworn en echalf of Petitioner, C 13 testifies as follows: f 14 l T:lE SSINOGRAP!!ERt Plass state your l 13, name for the record. 1 I I 5 16 THE "ITNESS: My name is Robe:3 C. i 17 Arnold. 1 18 DIRECT EXA!!rNATION 19 l BY MR. KISSTEN: 20 l Q Hr. Arnold, will you plesso tell un brierly l 21 your educational and proisasional bachground. 22 I l A Yes, sir. 23 i I I am a 1939 graduate of the University i i 94 O ! or xich19an, scaoot of unstneerin2 I have a aa,neio= or ~ 25 !

Science degree in science engineering.

l I 1

Arnold-d rcce 3126 1 I vent through the University of Michigan O 2 on a Naval Reserve Officer Training Corps scholarship program 3 and went on active duty with the United States Navy immediately l 4 aftur graduation, i 5 61 7 8 9 10 ij 11 ' 12 O "l I 14 ! l 15 l 16 i i 17 ! IS. I l 19 ; 1 20 1 21 l 22 23 24 O 25 f l l . ~ _ _ _ _ _ _ _. _ _ _, _.

C Arnold-direc' 3127. ('*"**""*"*-) ' * * d *" th* ^'"7 "" * "'i"

• O 2

duty for ten years. The first four years of which were in 3 various destroyer assignments and training schools related 4 to those assignments. The last six years ucre in the Navy 5l Huclear Propulsion Program, as well as the training tcur of 6 duties associated with that program. 7 I was on the stuff of cac of the prctotype 8 I training centers, both in the capacity cf being responsible 1 9j for a portion of the trcining progra:a and al::o in various 10 ! ~ l technical disciplines, including radiological controls cud i 11 ! reactor centrols. 12 Ol 1 qualified for tha equivalent of what would a be in the cesrscrcizi nucicar pcuer plant as a senior reactor i 14 l operator. I surved on board of the USS I.cng Eccch on a 15 l j prepulsica cesignacnt in which cc p city I una recpensibic 16 l l for the reactor plant, steam propulalon plant, and the l 17 l reactor controls, as well as the chc:siccry and the radio-i 18 l logical ecntroit pregrca. l 19 i l Upon leaving the Navy, resigning with th<t 20 I rank of Lieutenant Ccmander,1 joined Metropolitan FJicon 21 i Company as a senior casinacr en the at:aff of the Superin-i 22 tendent of Production. l' hat van in Septenher of 1969. 23 I was pinced in charga of that departacnt in 24 January of 1972 cnd progreceed through a ceries of crgnal-25 zation developments within the generation area of Het-Ed,

Arnsid-direct 31$3. I 1 during which sty scope of as'nagement responsibility expanded O i 2 as we became closer and closer to the commercial operation 3 of Tdl Unit No. 2. E was made a vice president of Metropoli-4 tan Edison Company in December of 1973. 5 "Dil Unit No. I went into commercial operation 6 in Septacher, 1974, and I was responsible for not only I Three Milo Island Unit No. l's operation, but also for l i 8 Met-Edison's other generating facilities. 9! i 10 l i 11 ! 12 Oi '3 ' l 14 15 i: 15, 17 ' IS j 19 l 20 : i 21 ' 22, 23 l 94 ' O ~ 25 i a

, Arnold-diroet 3129 1 A (Continuing) In June of 1977, I was r6 assigned O 2 to the GPU Service Corporation as Vice President of Generation, at which time I became responsible for design and construction l 3 4 of the GPU system generating facilities. At t!.at time TMI 5 Unit number 2 was still is the construction phase, we were 6 reoctivating the Forked River unit and we were finishing up 7 two major coal projects in central Pettneylvania. 8; At the time of the accident of T!!I Unit L 1 9 Number 2, I was in Parsippany on the assiernreent I described. i 10 ' I went to the Three Mile Island site two days after the i 11 { necident, and I have been there ever since. And, we have 1 12 made a series of organizational changes in the interim. ,i O 13 ; 1-92caincdrs orth '"I===b-i 14 l 2 recovery about a week after the accident. Subrequently, I l i l s 15, beesme in charge of all of Three 2 tile Island in about July 5 l 16 of 1974 -- excuse ne, July of 1979, in eenjunction with an 17 integration of the Met Ed and GPU Servics Corporation genera-18 l tion's technical staff supplied to nuclear facilitice, 19 This was thn first step in the establish-l 20 j ta%1t of the GPU Nuclear Corporation which we announced in l 0l January of 1980 to undertake the direction of all of GPU 21 22 ynuclear facilities. h I 23 I was designated as the prospective 24 l president of the new corporation, and we currently are at O i 25 ! the stage whars we have established within the GPU system h i

I Arnold-direst 3130 1 what we call the GPU Muchar Group. O 2 M,wer level down it is the equivalent, 3 in organization and structure, to what wo will have with the 4 nuclear corporation. But, the plant operations still remain 5 the respeasibility of the operating company who holds the 6 license. 7 So in conjunction with that, I have 4 g been =ade a senior vice president of Jersey Central and 9! also a senior vice president of Metropolitan Edinon Company i 10 l and continue to be a vice president of the GPU Nuclear -- 1 i gg l excuse me, of the GPU Service Corporation. So that I hold 2" 12 l executive positions in all three corporations to be able () 13 l to fulfill oy responsibilities for the direction of all of l f 34 j our nuclear activities and resources that are established 15 l among there three corporations. 8 16 O You are the President designata of the CPU j 17 Nuclear Corporation? A Yes. In fact, we have formed on paper that 18, .19 corporation, and I an currently the President of the corpora-20

tion, il 21 22 l

23 l ([) l 25 l l l k

l D Arnold-dir::ct $131. 1 Q And in tht't organization, in addition to the 2 TML plants, that also includes Oyster Creek? 3 A Yes, sir, it does. I might say that I think 4 it would be of benefit for those that are here, because of 5 his involvement currently and potential involvement in pro-6 ceedings in the future before the Board of Public Utilities, 7 to introduce Mr. Phil Clark, who is the Executive Vice 8l President of the GPU Nuclear Corporation and also en officot 9I in all three of the Cosepar.ics, of which I a:n an offierr. I 10 j Q He is your second in cemand? l 11 l A Yes. I i 12 Q Mr. Arnold, would yea tell ue briefly A nt Oi 13 ! the atzeus of the 24I-2 recevery ope-etice 137 14 i A Yes. Three Mile IsLsnd Unit No. 2 is cur-i j : l - 15 "' rently in a position where we here effcetively &c:m*eni-16 nated the plant othw than the reactor buildicg. We have 17 l processed the contaminated water that was collected in the 58 auxiliary and fuel handlins buildings eftar the accident 19 to remove the centaminnes frota that water. 20 t We have about 30 percent of the surface de-21 contamination of those buildings coc:pleted. 22 In the containnect buildins, subacquent to the 93 ~ accident, we were faced with a cican-ap of c.ontamiminta in 94 basically three forms; that is, t.he cantanination in the ~ 95 air within the building, nurface contar.itnation within thz i l f

Arnold-dircet 3132. I building, and the contaninated water that was collected O 2 in the hai.ement of ths building. We have e this point 3 disposed of the cont *=f nated air by voting of the Krypton 4 that was contained within the building and at least in 5 Central Pennsylvania that received a considerable amount 6 of media coverage, and that occurred in the latter part of 7 June and early July. 8 We have made three entries into the building 9 ;l to gather technical information on conditions within the i 10 building, but we have not yet started the surface decon-11 i enMn= tion nor have we started processing of the water. e 12 I We have a syste:a under construction which we term a sub-i Q; 13 =crged dcmineralizer systrW. That system is scheduled to a j 14 l be ready to process water in l' arch of 1981. We do not yet 15 l have appraval frco the Nucicar Regulatory Cearsission to i 16 l utiliza that systc:a for the processing of water. 17 l The water processing and the major portion I l 18 62 the surface decontnafnation inside the building had to 19 be ccopleted before ve can gain access to the reactor 20 vesel head aron which unist he removed so that we can re-21 move the fuel. 22 If I could sort of 1 guess identify the major 23 events in the overall cican-up activity, they are the pro-24 cessing of the water and the removal of the fuel. They 25 represent the steps necessary to make substantive improvements

(

Arnold-direct 3133. .I j in the level of risk that exists at the plant to further O off-site re1 eases of r.dio.ctive m e t.1. The staeus of 2 3 activity at the plant right now is that it's at a relatively 4 low level. 5 The only major effort directed toward clesn-6 up at this point is the processing or, excuse me, is the 7 contpietion of the installation and start-up and testir4 of 8 the submerged deciineralirin3 syste:n. We hava reduced the 9 level of effort in engineering, design and construction 10 l that are necessary to proceed with clean-up inside the con-I j 11 ; tainment building of the surface centmination beenuse of i 12 two factors, either one of whici eculd frenhly Sc ifmitirp,. g 13 One is the limited ficaneist resources availabic to the 14 l Ccepany to utilize for cican-up and the other is a status I { 15 of regulatory approvals for proceeding with that work. i 16 We expect that the regulatory appr:nal situ- -i i ation will improve substantially or at Icact we hope it 18 vill improve substantially with the issuance of the pro-19 I gr - tic environmental 1:npact stater.ent. Th.st str.tesent i 'O ; is currently out for review and we do not anticipate that ~ 21 the statement will be issued in final form until abcut the j 22 end of March of 1931, and that frankly la probably seneuhat 23 l of an optimistic date. 24 ! O i 25 I I

r Arnold-Circet 3134 A (Continutng) I think that in terms of the O a' r 22 erar* c=* <r *

===>2 t th =2

==e, it ~222 2 3 Probably require approximately 2% to 34 years of work inside 4 the containment building once we have gotten to the point 5 where we are undertaking major decontainination efforts linsidet.hebuilding. 6 7 The initiation of that part of the work 8 14, I think, at least a year nad perhaps somewhat Icager 9i " Y-Q W uld you also briefly tell us the status of 10 f the TIG-1 unit and its prospective restart? I 11 a t 12 A T:n-1 has been shut down since the accident. i* 13 i It wse scheduled to return to power the day of the accident, O; ! having co=pleted a nor=al refueling outage, j 34 g ._ I _Q on July 2nd of 1979,the Nuclear Regula-l tery Co=aission issued an order directing that Three !!ile 16 17 Icland Unit Nucher 1 would not be permitted to operate until jg hearings had been held before an Atomic Safety and Licensing 19 Board as to the ability to operate it safely. It identified 20 !.in that order that the NRC would subseq,ently issue another rder te set forth the concerns they had as to whether or 21 l 22 :n t it could cperate safely. That order was issued on ll 1.3 ! August 9,1373, which identified approxi:aately - or/ identified 23 08 areas to be reviewed before the Atomic Safety and Licensing g 3 ard, and they included the modifications that were being 25 i l I

Arneld-dircct 3135 1 required to be made of all operating plants to the extenk l O i 2 they were applicable and obviously varied somewhat from one 3 type to another; the status of preparation for response to 4 emergencies by the company in the states the financial 5 capability of the Company; the treatment of radioactive 6 wasta from both Unit 1 and Unit 2; the separation of Unit 1 7 from Unit 2 and the cegree of indeperdance of the cleanup

8) from the safs operation of Unit 1 and vice versas the manage-4 9

sent capability of the Company; and, the status of the 10 training of the operators. 11 ! The majority of these items were not t l 2 12 ' g unique to Three Mile Island Unit '.fuzber 1 or to Metropolitan i O rai oa co=>>ar-2 tat =x *a * *a =ccie=== =2 rir r i= a i l j 14 > the issue of the canagement of the facility and of our ( 15 activity because we were the ones that had the accident. i 16 l Also, the existence of Unit 2 in the i 17 l contaminated state and activities involved with decontamina- ! 18 l , tion of it are obviously unique to the operation of Unit 1, 19 but I don't know that all the issues being addressed are -- l 20 ! at least for approximation, were issues that existed with l 21 regard to any operating facilities. l 22 Nonetheless, we were required in the 23 iNRC orders to nave hearings on all of those issues followed developed 24 l by a decision based upon the record /during thosa hearings O 4 25 lby the riuclear Regulatory Cc=zission as to whether or not il i i i

4 1 } Arnold-direct I. 3134

1) Unit 1shouldbepermittedtooperate.

2 The hearing and related activities were 3' forecast in August of 1972 to take about one year, and on 4 that forecast the hearings thamselves would have started la b early February of 1980. The hearings, in fact, sta ;ted on 6 October 15, 1300 and rather than the two zeonths that was I 7 provided for in that forecast, I think it's reasonable to 8l azpect that the hearings will take on the order of 4 to 5 i 9 months at least with some vulnerability to even extend beyond i 10 ) that period. i 11 subsequent to the completion of the 12 hearings themselves, there is the tinte necessary for the t Oj " "'d *

• • '*2 * " '** ""*"d*** "* * "" '*** ** ***

14 l 52 clear Regulatory com:nission and the various administrative l 15 processes involved in arriving at that point, so that we 1, 16 l would anticipats that it's likely to be the latter part of i 17 i 1931 before ws will have authorization from the NRC to i 18 hproceed with the operation of Unit 1. Ih In the :::eantime, we have been proceeding 20 'with the nodific4tions to upgrade the systems of the plant, 21 to enhance the safety of operation, the organizational 22 ! changes, staffing changes which I described briefly initially, 1 23 lthe modifications of the procedures and training of the i 24 people, the upgrading of the emergency plan, the interaction O il 25 vith the.Stata and local authorities with regard to the plan. l

Arnold-direct 3137 1 all directed at e return to power operations August 30 of 2 1991. We are still targeting our effort toward achieving 3 that date. Itowever, I think that based on wha ?. we know right 4 now ws prcbably will not be able to quite meet that date. 5 'io have identified at this point on the ordsr of two months 6 slippage in that achedule or potential slippage in the 7 schedule, and that in conjunction with the status of the 8 hearings and the prosnoais for the completion of those, I 9l think, laads to an expectation that we are looking at the l 10 ) end of 1331 as the earliest return to power operations for 11 Onit tiumaar 1. i l' 12 i (1) 13 l 14 i i ~T l ~5-~~ 15 l 3 5 16 l l 17 I l l 18 l 19 j i 20 l l 21 ' i 22 23 l t 04 () 25 i l i d l

0 Arnold-circet

3t33, A

(Continuing.) I think that we can be ready 1, {# ) from a hardwars and from a software stantipaint to operata 2 We the plant consintent utch the progrees of the hearings. 3 i are attempting to pace our expenditures to achieve a readi-4 I ness to restart, to be consistent with the prognosis for i 5 6 the hearings. But, thera is certainly an ability to acceler-7 ato these efforts to soca extent if the bearing process were. 8 to appear to improve in its tining. 9, We currently are continuing with the prepara-i 10 i tions for the restart. I think it's prehably important to ij 11 i realire that as the bearing ti=a period is stretched out, i 12 I the require =ents that the Eucitar Reguintory Cerenission has Oi i= - ed - us as m de s to se c=glete pr er to restare, 13 f 14 have also increased. 15,, They inclu:'e in their requirc-nents the rfdi-i 16 l tional insights and understandings of what creds to be done on all plants as they-hsve occurred therirt the last ycer-17 18 and-a-half. I think that's sencrally the status there. 19 E. KU.W TMnk m cir. Tase 20 are all the questions I have. 21 MR. HARDELLI: Judge 14arehc11, my plan 22 was at this point to present two public vit- '3 nesses for a total of about ten minutes. The. r Q 24 l general wbject to be discussed ore probic:ns 25 ' with discontinuance and so forth. Would that ~

3139o I g be satisfactory? I might say that we would V 2 recu.va wi.th the crosn-eranir.ation af ter that 3 presentsrd.ca. 4 JUDGE l'JMF1.LL: Is there any ejec-5 tion? 6 (No response.) 7 eMC liar $11ALL: All rirJht, we will S proceed tM way. 9 MR. NARDELLI: All right, I'll begin 10 ' gy c,11ggg 33, pyg g,3 p,ggy, i 11 i t I }9 g ~j D1AUE L. ? A T. E Y, previcusly storn, restnea A 4 V 13 i l the stand. 14 ' TICE. n".LIRZCT U2.HIUt. TIC'i { 15 { 37 33, gjg gggy 16 Q its. Fahey, do you have a staccaent to taahe? 17 A Yes, I m:re do. First, I wcut to thank you 18 again. It will only,taka a few ocnents of everybody's time. 19 I j I dght start by saying that i dispute any 20 ! testiecuy that was just given by the Vice President of CPU, 21 et ceterc. His ac:a has just Icft x, although -- Q Mr. Arnold. 23 A Mr. Arr.old. I firmly del'. eve that ~C41-1 and O r.41-2 cr.m me.er be returned to r.ervice decause of a coolina 25 devien that la depende.nt on ute cad the other. And, I I

/ F&h y-r: direct 3140. I dispute all the testinsny and I hope t!we in the near future O 2 before this it. cndcd that I might give my rebuttal to this 3 in a more accurate way aftcr I investigata all tais testi-4I many through tr&nscripts. 5 If 1 may return, of course, that will be de-6I cided by the Judga and everybody else, but if 1 may return I 7 I do uish to givo :rf rebuttal to this stacerc.ent at that 8! ti:ne. 9! My main reason for being hero today again is 10 ' the discontimemco of acrvice that I had been threncened i { 11 1:ith. As Ycer h a r kacus, tha last time I testified. i p: 3 which I believe nas the 21st, I was threstcned. At that l b,. 13 time Mr. Kirsten choan to stand up in front of a group of people here and threaten ice. I use the word " threaten" be-1 -{ 15 caune that's what I beliuve happ e d t.o me. Eu told to 1 16 l had 43 hours to pay ray bill. II 1 did noc pcy it, I weald 17l' be disconnected. 18 l 1 then caae hoe.e that dry and said, "iJc11, I 19 cm z.at goi.ng to be thrcttened. I am not going to pay my 20 ! bill because 1 believe I'm within the right." Not that I 'l ~ am withholdin6, Your.k: or, the energy adjustccr.t char;;e, because 1 know it has been heard and duly approved by the I 23 l Supreme Court under the Ledi-Flo case, then it rtpreacntad i O one or Wo or three dollars of our bill at that given time 25 in October of 1979. I am questianiros the fact that shall l

Fchcy-rcdirect 3141. t I the racepayer for any uninsured cost, any repiscenent fuel O 2 or anything related to any extended outage due to refueling 3 of any nuclear plant, such as Thrsa.'411e Island -- Oyster 4 Croek and then Thres Mile Island, the accident that occurred 5 that our board of Public Utilities of the State of New 6 Jersey is most willing to have the ratepayers pay, should 7 they pay? 8 Now, again, I have been threatened. I was 9 given the 43 hours. 10, 5 l II : 2 12 ! i l O; 13 i i i 14 i i j

5 i l

i

i 16 il l

17 ' 18 19 l l 20 l l 21 22 23 ' 94 O ~ 25 1

c l Fahey-redirect 3142 1 A (Continuing) When I came home I made oestaat O 2 with Er. Nardelli and he informed me that i had 72 hours. 3 I said: "vfhere did I get the 72 hours from?* Re said that l 4 the Doard said that I had 72 hours. He said that the Board i 5 of Public Utilities said that I had 72 hours to pay. I Mr. 6 informed /Ta~rdelli that no one contacted am. Was this again 7 behind closed doors? 8 Bnt, on the other hand, I had written 9l a letter to the Board of Public Utilities and I have aske.d 10 ; for a hearing. I have asked that the due process of law i l 11 l ba grantad to me and to let a Judge decide. 12 l Now, the reason I stopped payment on g O; 13 on. checx of $5s is secau.e I did not,sceive an itemised i I4 j i bill. I was told at the Lakewood office that I was no } 15 longer in the computer systeen so, therefore, they could not i 16 l tell es why sr/ bill rose fro:: 690 to $155 and change, when I l l 17 valked in there to pay mytill. That's all I asked them. 18 ! I issormed the Board of Publia Utilitios 19 l - I was on the phone with tha Board of Public Utilities 20 for four hours trying to make a reasonable deferred payment i 21 and I asked then: 'Can you please find out why my bill rose 22 and why they won't give ne an itanized bill?" 23 l The Board of Public Utilities informed 24 l ms that you do knew the rules and regulations and, th5refore, O i 25 we must maka contact with the utility company girst l

Pshey-redirect 3143 1l before we car. tell you how much money you must pay the O 2 utility company. I told thee, I said, "Well, I'm more than 3 willing to pay my $100 because that was the amount that I had 4 used at the time of being disconnected."

• hat was not in 5

ques tion. The balance was in question. i 6 so consequently Mr. Kirsten again 7 threatened me. I was not turnad off in 48 hours, I was not i8' turned off in 72 hours, but I received another letter, a l l 9 threatening letter fe m the GPU, certified, that if I don't 10 j pay up within - by tenorrow - I will be disconnected again { j 11 l by the 31st. ~ l 12 The Board of hdlic Utilities has not 3 O; '3

=v r a =r 2 st

a=1 n=v

== siv =

a= rt=2 4 ** 14 under due process of law. All I want is to 'oe heard. Then 15 if they feel, if the utility ccmpany feels they have a solid l-i 16 case, than shut me off. If they don't feel they have a solid ( 17 case, then don't shut me off. I 18 ' What happened yesterday was something 19 ; vary, very disheartening and very challenging to the People'sI 20 Utility Fight. 21 We have always been concerned about the 22 threatening letters that the GPU and JCP&I. have been sending 23 h out to the utility companies who withhold the energy adjust-11 24 1 ment charge. O i 25 kgain, I use the word, thraatening. p

Fahay-rOdiroct 3144 1 Yesterday, movbers of the People's Uiility Fight sak over 2 Hr. and Mrs. Charles Blanchard's house and challenged the 3 utility company on whatner ther will actually turn off a 4 customer withholding the energy adjustment charge, again i 5l excluding the fact that we do know it was he.ard before under t 6l the Redi Flo case. I ~! <l But, the facts that are evident right t 8 now and the increases that are evident, up to 62 perosat of 9l the billa representing i"M*, are very high. The seniors, 10 the middle class, it hits all walks of people. This is what E 11 l wa are challenging. Do they have the right to be granted 12 i all of these increases withcut due process of law? l 13 I am knowledgeable to the fact that right 14 ! now it will be heard in the Supreme Court in the near future 15 to show who is at fault. That I have received over the i 16 weekend. I an glad this is happening. 17 But until then, I think today there 18 should be a decision that should be made as to, can the 1 19 utility disconnect or can't they disconnect on these grounds? 20, If they can't disconnect, then these 21 ! threatening letters should be stopped. 22 This should not be centinuad. 23 l I have Mr. Charles 31anchard who is 24 !here with me today and he will testify that he was not O 1 25 ldi; connected yesterday after reisiving threatening lotters 0 1

n ? ahoy-radirect 3143 r Ij to be disconr.ected. 2 'hy was he not disconnected yesterday? 3' l, 4 i 5' l 5 !+ i S; 9 10l ~ 11 't i 12 Q 13 ! 14 l 5 15 i: 16, i I i 17 i 18 I 19 ' 20 21 t' 22 ; 23 \\ 04 O ~ 25, tj i. l 3 j P

4 Fahey-redirect 3146. I I A (Continuing.) If the Conspany stands by the O I fact that they k.now they are right and they advertise in i 3;l the paper or give press releases to tha fact that if you 4! do not pay your LEAC tmder the laws of the State of New l i 7 5 Jersey, which the Redi-Flo casa came under -- of course. 6l they don't mention the Redi-Flo ease, but if you don't pay i 'l they have the right to diccense..t. 1 hey don't say the7 S: will. 9 % are here today to find out whether they I 10 will or uhether they t:cn't. Lo they have the right to dis-11 cennect under the reason why we are submitting today? I' I ~ i Humber one, thculd the rstep.yer pay -- i. ell, before I start Q 2 13 that, I have to read this: .I 14 ~; i 'Tna Peopic's Utility Yight cembers are ask-15 ing the Public Advocate, Al Nardelli and Stanicy an Hess to investigate the legality of GPU and JC1'6L's threatening 17 l letters directed to ratepayers who withhold energy adjust-IS { ment charge, which states the racepayer is subject to dis-19 i continuance of service. Said letter was approved by the 20 j j Board of Publie Utilities in Ucwark, Ncv Jersey. 21 ll "On October 29th, 1980, a FU7 r.e=ber, Peopich 22 j Utility Fight, was to be ter-af nnted frem service by JCPGL 23 l for non payment of energy adjustment charga, I believe, of of O i $142 of his till. Charloo Blanchard disregarded the 25 threatenin5 letter and the discontinuance noti 2 to force i I,!

3147. Fahey-redirect I Q this issue to a head as to whether JCP&L can discontinue service before cur coorplaints are duly heard in the proper 3 court. Should the ratepayer be responsible for unincured 4 clean-up costs? Should the racepayer be responsible for ~ replacement power from the accident of Three mile Island? a 6 abould the racepsyer be responsible for extended outages, 7I j uuch as the taost raccut one in Oyster Creek? 8 Three kiile Island, Forked River are no longer l 9; l used and useful. Tnus, a racepayer should not be Ir.sponsible 10 ! to pay for construction when, in fact, we are not receiving 11 ' f I the power. 12 i "Since the accident ar Three iille Island, the 8 O 13 ratepayers have had six increases totaling over 300 million j 14 which increcced hills by 50 percent and placed entirely too i 5 15 4 uany ratepayers into su extrar.a financial cifficulty. The j~ 16 : People's Utility Fight clearly stated in the past and will 17 i continue to state that no racepayer will pay for mismanage-18 ; =cet, possible nc3113cnce and had investment, plus said 19 ! l alucations in previous paragraphs in this docu:nent. 20 : on the contrary, the preferred stockholders a 21 ' vill." And, again, in previous testimony, Your Honor, I 23 l have aska.d many, many questions and to this day 1 have asked where the spant fuel account is. I have asked where the O deposit 7.cney is. I hwe asked where the containment of 25 i funds are once the plant is no longer being functional } I

Tchey-rcdirect 3148. I havra ast ed rasny questions. I after a 30-year period. t i O have aswed for an open audte i=to cm and JcPa, a pus 11. 2 audit. 3 The only thing I ask now is, an I entitica 4 to this or is the Public Advocate representing the people 5 6 of the State of New Tersey; is he, you kn,.w., being that he 7 is entitled to it, can he than give su the information to 8 give back to the people that I represect? These are all 9 questions that are soing unenswered. Dut, I would surely 10 like to know before any of those rcte inercases are granted 11 l what stand do we have in crder to be knowledgeable of this? 12 Do we have the right, does JCPE or GW have i 13 to be answerable to the people of the State of New Jersey Q l 14 ! or do we have to go throu3h the Public Adycente, which I 15 don't mind at all, but I would like tha snswer one wcy or i: 16 the other, whether it be through the Public Advocata er 17 ! whether it be -- cod I a:a directins the quoccion to *cm-18 l cver it may be. l 19 I We belfcve th3t vc do wsst the answers and 20 l we would like to era thua in black and white as to where i 21 all this money is. W re in the money for tho.cter readers, 22 or the meter rentals -- or most recently they changed it. 23 ye s 7.25 per conth, I believe, and it ccane to 60 d.111:n e l 24 I or $00,300,000 a year. "hcre ic no expense involved with O. 25 that. That's fe:nd toney. l i

Fah;y-redirOct 3149 i

A (Continuing) ifhere is this money in this rate O

hearing, and i it true that enerer.dsustne.t shar,e is h.in. c 2 3 rolled back into rate base without our knowledge? And is it 4 true that toserrow there is a hearing going on at the Bos cd 5 of Public Dtilities where somebody is petitioning or JCP&L 6 is petitioning the Board of Publio Utilities that they don't 7 want public intervonors anymore? 8 These are all things that are corting 9l from my telephone. And, I will be back up here torrorrow and or gg our group will be here again tomorrow / E the proper hearing l gi data and at'the proper hearing room. But, is this true? 12 If it weren't for the fact that I have people contacting me, i 13 l S's wouldn't know all this. And I think it should be e ctinued, O 14 l that people should be able to intervene providing it's not i l l~ g 15 repetitious and providing that they are very knowledgeable. l ? i 16 l And I think the People's Utility Fight has proosnted verf i l I l i 37 knovisdgeable people with a very good background. j i That's it, Your I!onor, and I thank you. 18 i 19 ! JUD C MARSHALL: Thank you. I will 20 l note for the record that there is no hearing 21 scheduled for to=orrow. Also, I'm limitad to 22 decide only those questions that are sent to 23 re by the Board of Public Utilitics. 1 HR. HARD3LLI It might be helpful, 24 25, Judge Marshall, if at some point the Company l \\ l

4 Pahoy-diract 3150 1 did put on the record how they are treating g) \\ 2 any fundt being collectcl through rates for 3 daconnissioning and spent fuel, if th2re is 4 a separata account for that. 5 The deperita, I think. m' have on the 6 record already. I believe that it's not in 7 a separate account and our witness" will be 8 taking the stand on that. 9 cut as a transcript request, perhaps 10 the Company could antwar Miss Fahey's quas- !j 11 tion specifically, at leant regarding spent 12 fuel and decen=lasioning. 4 {) 13 l

n. xIns;nti:

As far as decomnissioning, i a 14 l the Company proposed that that money be put 5 15 li into e separate trust fund. It was Rate 16 Counsol's soggestion that it not be used in 17 that manner, but that it be credited at a 18 fund which would to used by the Ccapany as 19 other mcnics and that the return on that 20 fund be, in fact, paid to the ratopayors 21 l through a credit to rate bacc. That's tho i 22 vsy it's baing dono, just as our depreciation 23 reservea are being handled. I 24 The question of the trust fund was O' 25 actually propoasa by the company. l

l l 79 hey-rodirOct 3151 1 M2. NARDCLLI: On that, I think the 2 record should reflect that this proposal -- 3 and Mr. Kirsten is certainly right about the 4 fact that the Corpany did propose it, it was 5 made and dealt with prior to the accident at l 6 Three Mile Island. And I think as a result I of the company's financial situation since e 1 8 the accident that all partica might want to 9 rathink their positics as to whether there 10 should bs a separate fund for it, i l j 11 JUDGE 21A33 HALL If you vidh to present 12 witusases on that issue and brief it in the 13 f final briefs, that is your option. (') I l 14 j Tsn wrTg:SS: May I ack Mr. Kirsten a I 15 qusstion? Do I have the right to ask Mr. 3 16 ' Kirsten a question relating to this? 17 Oo I have the right, Hr. Kirsten? 18 MR. KIRSTE!is I'm not hers to answer 19 your questions, Madam. 20 THE WITNESS: May I m.ske a statement, 21 then, for the record? 22 MR. KIRETEN: Mr. llardelli asked me 23 for a statament on the record, and he is a 24 ! party to these procaedings, and I tried to () l l 25 ! respond to his roquest.

~ 733du + Pchcy-redirCct 1 TILE '?ITNESS: May I htye scr.ethine on 2 the record? tiny I say scmething? 3 JUDGP MARSHALL: Yes. () yaE 'fITIESS: If I'm correct in what Mr. .g 5 Kirnten wr.s anying, it's that he has naed this 6 money, but has lowerad our rate base? If I 7 an act correct, pleaso correct me, n or.ebody. 8 I think that that is a very inappropriate way 9 to run a corpor?. tion that is in such a dis-10 astarcus way as yours because numbor one, is the ratwpayer paying extrenaly, possibly 5 11 12 extortionist ratos right ncy which we will 2 13 find out in the future? But socendly, we aro 4 1 J 14 ; going to be cuarred double for something we () 15 I paid already which is the spent fuel account, and I don't belicee you have the right no ~ 16 natter where it caro fren or who gave it to 17 18 : you, I don't believe you have the right to i 19 cae that r.cney, if you don' t have it avt ilablo 20 at the given time when it'c needed. f.nd the same thing trith the containnent 21 s of the plant in the 20 or 30 years or 10 years, 22 whatever the life expectancy is that's lef t 23 Of that-24 This is r.cnty you have already taken 25 () i

I Earrey-rodirnet 3153 t I from the ratepayers. And, your future of 2 those nuclear plants that you solely desire 1 3 to put s11 your eggs in ono baskst, and our 4 utcckbroker and cur accountant has frequently 5 testified again.st it, is extreenly frustrating 6 and econc:.2ically inaf fordablo as far as the i. 7 ratepayers are concerned. 8 9 10 ij 11 2 12 i O l 14 d 15 3 3 16 17 18 19 20 1 21 22 23 24 O 25

t Fahoy- ~ 3M' a

13. FAHEY:

(Continuing.) Noir, I m ' O

=

wh>= 7=='r sat =s== da 46=== th <===r-2; 1 3I of your plant or your defending of the plant, 4 ;, lir. Kirsten, but somethf g drastically needs 5j to be done, whethcu you reorganize or what i 6{ y u do. But you cannot any longer look to 7l the ratepayer and expect to get a return to l l l' sj pay for your problems or your possible mis-9'

zanagec2ent which is almost a proven fact.

i And, only the Supreme Court in the near future 10 11 vill decide than And I will tell you, t'ae People's j 12 i 13 Utility Fight vill be involved on that issue 1 i j 14 and vill be testifying as such. And, I would I i 15 appreciata it if your Company from henceforth i 16. does tot threaten ni enyrcre, including your-i 17 : self. n \\ l IS And I will tell ycu scacLhing else on h l 19j the record. If cy electric is terstnated l 20 tcoorrow witnout duo process of law, which I ~ 25 y dcn't know shether you cre involved Lith, or n W 22 ll if the N crd of Public Utilities does not l 3 i 23 ' allou ne the cice to express my case as to why i I 24 l I stopped payment oe.cne chock, $55, then I l I O 25 vill hold your Ca:;pary liablo for cnything i i ll 1 l

Fahty-3155. I that happens to myself or my children. 1he O 2 first tiaw you discennected :nc on a delinquent 3 notice ubich I disregarded, juct tossed aside 4 aryself, and then after I became ir.volved in 5 this fL ht, many other people did, too, that 1 6, , dss a different story. 2ut this time I don't 7 lusow Wether you are harassing ma or whcchar 8 ycu are harassing Mr. LLinchcrd that's geing 9l to ecce up next to testify, but I don't thirdc 10 we deserva haras:n.cnt and I den't vent it. k. I am willing to pay my fair share but II 12 i j I will not psy for anything that I feel in O 13 0 2 unjust or unreasonabic. Undzr the Constitu-i 14 i l tien of the State of ;iew Jer:cy and under the 15 i j j sonopoly Icus ths: protect us, the Fair Trade, i 16 l all of it, I will fall under that and I hope 17 l i to:corrcu that I will have alscericity in my I 18 I home. 19 l If thoro is any law that i =1;;ht find -- 20 and I asaireo that you would do the case ching l 21 to me, if there is any le4 that protecta ce, 22 I will find that lau and if anything happens 23 l l I to nra or wJ children, you vill be respcasible, 94 'l O you or the notrea of e=stic cet11 tie =, c=.= oc ~ 25 the tuo,1;honever is alluuing this to happen i

i i j 3156.

i Fahey-j 1

1 tomorrow.

G 2

1 chank you very much. I know I es-3 tended zy time but I thank you. 4 4 5 6 i 7 8 i 9 10 11 1-12 1 2 I O 13 t 14 I 5 15 16 17 t 18 19 i 20 21 22 23 24 25

Dlanchard 3157 MR. NARDELLI: I call Charles Blanchard. 3 O Judas Mxn.HxLL, I we 1d ;ost ot. for 2 the record that Mrs. Fahey was also sworn la 3 previously, and I believe that Mr. Blanchard 4 s 5 has also been sworn in previously. 6 MR. MARDELLI: Yes, sir. CHA2LES P. 3 L A M C H A R D, previously sworn, 7 g resumes stand, and testifies as follows I 9 THE WITNESS Judge Marshall, I'd like i to make a few statements about the cap Laws is New 10 I f 33 l Jersey. It sesas the workers are the ones that are l 12 l appliad to this cap Law, that this cap Law applies l 5 l

Q to.

13 { g' JCP&L has had sevsn increases in approzi-i 1 i mately 19 nonths, and I think that we ars being held 5 15 l i E 16 ! hostaga for extortica purpcssa. The energy adjust: ment chargo, in my 17 I 33 l estimation, la only a by-pass for rate increases, i 19 l and en u ccascionable charge. We are backing two l freeholders from Ocean County, George Buckwald and 20 Damian Murray, both Republicans, and Lou Weinstein 21 l l for U.S. Senator for New Jersey, who is a Demccrat. g I have had lotters f_~na JCP&L, Juns 23 2nd, and they say that my partial payment was Q g! credited to =y account, that the energy adjuatsent 25

31anchcrd 3153 f is a legal part of the bill and has been approved by r' (s) 2 the Ucard of PUC, Public Utility Commissioners, and 3 if payc.ent is not received, it will appaar as a 4 previous balanca cf a subsequent bill and will 5 aventually generats a delinquency notice and that 6 this matter will cause your service to be subject 7 to disconnection, if it is not paid in full. 8 Mow, that was in June. As a matter of 9 fact, I got two of these in June. 10 Then, I had sent with each one of my 11 bills, as you know, a statement saying that we were l 12 l withholding the energy adjust =cnt charge. I have a 13 ' copy here. I believe Diano Fahey gave you one the ) 14 last time she nas up here -- why we were withhciding, i I 5 15 because ve think it la illegal -- 16 A VOICE: Stay I ask ene thing? Can I 17 ask that na road that statopent note? t 18 THE WITNCSS: This isn't the latent 19 one, but it's basically -- 20 A VOICC: In that the latest one? 21 ?!!O WITNESS: Mo, it's not the latcat. 22 This snya, "We horchf notify you of our intent to 23 withhold - " Do you want me to road this all? j. 24 JUDGU ltARSilALL: Do you want to go l \\ l 25 off the record and engage in a conversation with l

I i 91enchcrd 3159 1 Ms. Yahey? C) 2 T11E WITIESS t Yts, that would be better. 3 (Whereupon, there was an o*f the 4 record discussion.) 5 JUDGE MARSHALL: All right, back on 6 the record. ~ 7 TH3 WITNESS t This notice I had sent 8 to the Board of Public Utilities and also to several 9, Congressaan, each time I paid ny bill, and I would i 10 l leave one with the Jersey Central Pcwer and Light i 11 ' Companys

• We hereby notify you of our intent to e

12 withhold the LEAC portion of our monthly bill. We 3 i () 13 act on this based on our Constitutional Right under f 14 the Faderal and State Ccastitutions and hereby denand 5 15 that you ancwer the allagatien that: 3 5 16 i The revenus generated by this super-l 17 fluous, exceeding what in sufficient or necessary-18 f surplus, charge is not strictly used for the purchase 19 l of fuels rather that theco Collars, in part or total, 20 are being spent on the cleanup, repair or replacement 21 of equipment damaged at Three Mile Island. 22 We herthy cr.crcise our right and charge I 23 the Doard of Public Utilities with the responsibility 24 for full discicouro on this charge as it in our O-25 opinion that this chargo is not a just and reasonable l

blanchard 3160 I rate for replacement ruel, such rate as specified 2 under tne f.ew Jersey Constitution for the proper 3 collection and utilization of funds for a utility 4 monopoly." And than at the base of the letter here, 5 wa, like I said, the Scard of Public Utilities 6 received one and Diane Fahay's office received one, I and, of cour se, I addad a few more to it mytelf en 8i' my own, which I have receipts here, cortified letter 9 receipts to E4tene Bedell, in Xsansbur.9 and Thomas 10 Gagliano in Host Long 3 ranch. i i 11 i l. 12 i 5 l l i l = I. 14 2 5 15 e i 16 17 l f 18 l 19 j l 20 1 21 ! 22 23 il 24 l (2) 3 t 25 l l

Clancherd

3131, 1

m WITNESS: (Catinuing.) I have received 2 a delinquent notica Octobar 1. I had paid be bill 3 in the morning and in the afternoon e.211 I had this 4l in nry mailbox, and then I received another ene. I 5 didn't pay the energy adjustment charge; I just paid I 6, the kilowatt hours, and then the last time we were 7 up here, I have a letter that I brought up here -- 8l I had this delinquent bill sent to =a en the 22rd l 9 in my trailbox, in my nailbox on the 23rd, saying 10 that I was goins to be shut off on October 29th. 11 Now, I say in r27 letter here, d ich I vant 12 3 recognirnd, that we of the 2eople Utility Fir,ht, g Oi '3 1=s eth== rresident, uta=e veher, are in the i il i f process of the Levelized EncrSy Adjust =ent Charge, 14 ' 15, whereas it is katres as the LEACll acccunt, th.10 ' 's the ! 16 way it sticks to us, and we cust rid ourselvaa of 17) this unjust chargs tc all custo:ers of JC?2., that l 1 18l we are testing the locality of this charau.:nd we 19 d H de not sish to pay for mistakes nado by a nis-i 'Ol managed Company as JCPf>L has done to THI and CJster i 21 9 Creek. ,,U This act of turn-off or threat of t tra-off L i '3 > ~ is direct harassnent by 14r. J. Kirsten, ler yer for 4 n JCP&L, and I enn back the tact statement by cur U court appearance in Newark, Meu Jersey, en Cetober 21 a l i ,i

e Blanchard 3162. I when Mr. J. Kirsten turned in rage and gave Diana O 2 Fahey 43 hours' notice of turn-off. Now, two days 3 later, on October 23, ISSO, other mashers of the 4 PUF received delinquent notices and they gave a turn

• 5 off date of October 29, 1980.

These cotices were 6 given for noc paying the Levelized Energy Adjustment 7 Charges, wnich is in disputo', the disputed part of S our bill, cud I would like to prescat this to Your 9 Honor. 10 Now, we waitad all day yestcrdcy, that was l 'lednesday, Wetticas Wadocsdcy, and we waited all day 11 12 and one of our ce62rs called the Utility Company and i i l O:

==*=d a c" the = hue =** hour =====. cad th=7 r frc== i j 14 ' 3:50 in the morning to 3:30 in the afternoon, and l i 15 : thero was no chutoff. 5 16 l 1 am here not only for myself but for other l 17. peopla who ara really hurting. Nov, my energy adjust-i IS i =ent bill for the pont six months, lot us cay, is i l 19 $142.05, which doesn't scan anything to ma, really. 20 1 have it in escrow in a bank account, a special 21 account. But, 1 am fighting for the rest of the 22 people of tha State of Ucw Jersey that has JCP6L. 23 How, ecven increases in 19 months is a little O 6'* """ ""d """=" d "" "'" "" "* "hi d""" 25 ! coming into this world, grandchildren. Where are l I w -a

31anchard 3163. I they going to so? The bills will be so hi.Th they O 2 won't be sh13 to afford enen. And, again, I say 3 these raises are unconscionable. 4 I think that's about ic, your Honor, 5 JUDG MARSHALL: Mr. Hardelli, anything? 6 FURTHER DIRECT ICud4INATICN 7 3Y hR. NISDE1. tis 8 Q Mr. Blanchard, have you notified the Eoard 9 of Public Utilitics that you are withholding this accant 10 and that ycu are requesting a hearing en whatcyor your con-i 11 g tentions are? 12 A k' ell, I have listad en the virhholding state-O 13 i.ents thae we have - 1 put my necoune nurher and each c:enth e i l I4 b 1 tell then that I didn't give them the am:n:nts that I-with-i l 15 l held, but each month when I get ::7 bill, I go to the bank i 16 and put the encrcy adjustxnt charga in the bank, in :: hat 17 savings account, and then 1 3o to Jerney Central and I hand I her the bill with one of theno overy centh. 19 i Q Excuse me, Mr. Blanchard. My question is: 90 ~ H ave you notified the liev Jersey Board of Public Utilities 'l ~ l that you are withholdi.13 a certain au:a of raoney and have you requested a hearing from the Board on the reasons uhy 23 you are withholdig it? Q j A Uell, I believe this statement -- 25 ! l Q Yes, that in your reitcons. Is that addressed

alanchard-dircet 3164. I to the New Jersey Board of Public Utilities? 2 A Yes. 3 Q That was my question. 4 A This is addressed to the Board of Public 5 Utilities,1100 Daymond Loulevard. 6l Q And in that letter, excuse me, I guess 1 I t 7l diould reacaber because I believe you read it, but did you s request sons cort of hearing from the Board or -- l 9i A Yes. We said that they should help us with 10 this; that we dreand an answer for the allegation under i j 11, the Federal and State Constitutions, and hereby demand that 12 you answer the allegation. That's right under the second O 3 ra=====>h. j 14 3 a 15 16 i i 17 ; 18 l 19.; 1 20 ! n l 21 i 22 23 24.i l O l 25 3 l-l a N l

i I

4

31:nchard-r dircct 3155 i l 1 PJt. MA2D2LLI: I would just ask Deputy Attorney () 2 General Bello and a otther of the 3oard's Staf f, Paul 3 31svin, to just check the file on these two casen 4 just to see if the Ooard knows the facts and if the 5 Board wishos to ta.'te a position. That's all I am 6 adking thsa to do, to find out if the Board is tware 7 of these two cases and if the Board is satisfied that 8l the cases are being handled by the utility in ths 9 proper vanner. 10 JupG3 nAasat.LL: we will go off the record i 11 shortly and you can discuss that off the record. 12 Tan WITNESS: Excuse me, Your Honor. Will Q] 13 this help? (Indicating) i l j 14 ) JUDG3 MAR <iHALL: ?.r. Nardelli? 15 l 753 WIT.1ESS: Would this help? (Indicating) i i 16 i NR. N AEDELLI: I den't need it. Perhaps Coputy i 17 l Attorney General Sc11o might want to seo if. I 18 l HS. BELLO: I would want to ask the witness 19, if he ever received a response from the Board con-20 corning this letter. i 21 THE WITNESS: Tes, I have. I sn glad you 22 mentioned that. 23 October 27th from Mr. Coorge H. Sarbour, 24 President. O 25 "This is to ackncvlodge roccipt of your i n

Ulanchard 3166 1 correspondsace in rofersaca to your action in with-O holding the Mvelised f:nergy Adiustment Charge por-i 3 tien of your bill. i 4 Let me first explain that the LEAC was designed 5 in order for the Corpany to recover those costs of 6 producing energy which are not recovsred in the base 7 rates. By definition, anly fuel costs associated 8 with the eganarstica of electrical pcuer are to be included in this type of chargo and certainly no f 9 10 ravenues are accrued to the Company by the establish-11 l g sent or change in the L2AC rate. I2 g The Eoard's Staff has cicsely analyzed and i i r i d3crat=t=^ctacrease=, cercan u== O i I4'i you that no clean-up costs related to the Three Mile 15 l Island accident have been paaned to tha ratopafbrs 1 16 I in any charge. 17 The Ecard has taken sevtral steps to minimira 18 the electricity cost paid by the censursors.

However, 19 JCP&L as well as the.Coard has no control over car-20 tain factors such as the cost of oil and general 21 inflationary trsnds that directly or indirectly l

22 affect tne cost of electric gensration. i 23 The large increase you note in the LEAC is 24 prinarily due tc the exclusion of nuclear generation O 25 l from JCP&L's total generation. It is ieportant to 1 i l i ( a

Simucnard-redirect h67 I' point out that in 1978 over 50 percent of JCP&L's O electrical generation was nuclear, which is an 3 extremely low cost form of electrical generation. 4 When the nuclear generating capacity was lost because of the Three Mile Island accident, 6 l JCP6L had to replace this nuclear generated electricity l 7' l by oil-fired generating units. S! Needless to say, that given tne rising oil 9 prices, the cost of oil generated pcwor is much b 10 higher than thatganarated by nuclear ena.m. i II I should point out that prior to any revision j i 12 i I i in the ISAC, tha Board conducts public hearings within j 13 { the Cospany's service arsa as well as evidenciary i 14) i proceedings in Newark, in accordance with the pro-I 15 visions of the New Jersey Administrative code. j 16 i The revised energy adjust =ent factor is filed at 17 i { ths Board with the Co'.:tpany's tariff. j 18 I may further add that a tariff required by l 19 law to be filad by a utility company is not merely 90 ~ a -contracts it is the law. The Board is, therefore, eJ 9~3 l duty bound to inforn you that withholding payrant of d 92 ! q the Lovelized Energy Adjustment Chargo cannot be ~ 93i sanctioned. Those arrearage pay::ents chould ho ~ l l 24 g paid within a reasonable time or the utility my 95 1 i j lawfully discontinue servin to you." ~ i a 4 i 1 1 J

Blanchard-rtdirect 3103 I 1 This is signed by Georp M. Darbour. 'Jhat 's ! O it, Your Honor. 3 JUDGE MARS!LEL: Thank you. 4 TITE tiIT2 FESS: This is signed by Ceorge It. 5 Barbour. It is not a rubber stanp. 6 MS. EnLLos Judge Marshall, in zeaponse to 7 Mr. Nardelli, I believe that President Barbour, in 8 that letter, has set forth the basic positica of 9 the Board, and that is that the LI:AC is a legitimate 10 charge, that it has v. ten sat in accordance with 5 'j 11 l hearings at which tim the public's representative, I 12 g the Public Advocate, has appeared. O i 13 ' aut. s xr. uorde1u h.s ww.seee, I viu 14 check the file and bring the Bosx4's attention to f 15 l the fact that obviously the witness does not cim-i 16, sider that a catisfactory answer. 17 18 19 20, 21 22 23 24 25 i i

r 47 31anchard-redirect 3169. 1 THE W1T;112S: No. I still feel thate 7our I I Us 2l Honor, that I feel those charges are being bypassed 3 in the energy adjust:2 eat charge, that they are in 4 excess. Now, hafore Three Mile Island, it was 52 cents 5 on my bill. Now the uny I figure it out, it's about 6 340 percent on the bill because it went from 52 cents 7 to $17.92 for the basic - for just about the assa 8[ hilmet hours, which is lihn paying enocher mortgage, i 9l and people with total electric are in dire straights. 1 10 ;l As a matter of fact, we hevo one of our sacm-II : bers dcun in Delaware right nou because she can't 12 ' afford to turn her elec:ric ca. irae just

• ass an in-i 13 f cc:ne of Social 3ccurity dicability benefi :, chnt's I4 l

what it is, and they ccn' t neet their billa. They i have total electric, which.iercey Cen:ral said "Cc=c 1 on in, folka, uc cro giving you a icw raca, se cotal ! 16 h elect.-tc." Ucu, all senior cicirens arc on cc:al I i IS ' electric and =any of cur ycungcr cc.abers of our club 19 J are on total c1cceric, and now the race is high. They 'O Ij can't handle it. I cean, everybody doesn't cake ~ 21 : thoucands of dollara like !!r.1;iraten or I or any-i o, ~~ i body else. 23lI These pcopic are in dire st.raights. 1~ney asskq O i lihe ctso a :ech.

=.can, macre are ener sotue to 25 '

go?

'.f 31cachard-rcdirect 3170. 1 Thank you very much. OG 2 '11SS FET: liay I take a moment to taka the i 3 stand assin to give rabuttal co a statement that was 4l made? 5 JUDGE 1GnsilALL: Is there any objsetion from 6 any of tha partics? 7 C:o rae.anse.) 8 JUSCE ;G25.MLL: lli right. 9 IC. KIRSTFl: Tour llonor, I would just say 10 that Mr. Arnold is under a ti:sc constraint, as was 11 i

sentioned before, and un would like to finish with I", 1 hi:2 thi.x af ternoon.

g i i O* 23 ! ic1.:t.a t. Your 11ono=, 1 ar111 chink that.e i. t i I4 I can flaiah with !!r. Arnold by 3:30. f i l 15 JUDG': FARS'MI.L: All right. I 16 I II OIAN% L. ? A 11 E 'I, previously sworn, resumes 18 ( the stand. i 19 i TIC UIT'. T.SS : Ila certainly don't want to take 90 ~ any tis::a away frcxs lir. Arnc1d and S.e are here also 21 Oc listen to IIr. Arnoldis cost 2 mony, too, and te take 2~9 notes. Su:, the Scard of Pub 11c Utilitics' member -- 23 I 4 2 so: ry, I d:,,M C kncu your na:ce. O its 3 tto: c =t= setio. aerut7 attorae7 e 25 Ceaeral, and I rrpresent the Board of Public Utilities l

fehay-redircet 3171. 1 in chia pr W ling. O 2 THE WITUE33: I think that Carla Bello does l i 3 not fully understand eur position. We are not chal-4 longing the 1*Sality of the LF.ac, as I emphasized 5 before, and 1 stressed before. We know it has been 6 heard and duly approved in the Court in October of 7 1979, in the Redi-Flo casa. A long-term goal of S Peoples Utility-71ght is to challenge that, although 9 ve are well awaru that the Public Advocate's office 10 had appealed the case, too, cnd unfortunately lost. k II Eventually, we will hopefully recpen tha caso. i, How, that is not our challenge. Wo recognize that it O-j ~13 a has been duly approved. What we are deeply concerned i 14 i about now is the effects of Three Mile Island on the 15 4 people and the extrene increasce, the exorbitant j q 16 amount of increases that have been happening and been 17 i granted, and the effects of these increases en the 18 people. 19 Most of all, are these increanco just and 20 reasonable? Should the Utility pay? Should the pre-21 ferred stockholdera pay? And, I think this is uhat 22 dealing with, should the racep:rfers pay or ahould 23 we put tha responaibility on the preferred stock-i 24 L Q j tolders? 25 ! I All right, the ccemou stockholders are not i

-F Frhey-rodirect 3172. i-I being paid, unfortunately, and I will go on record 2 that I do not like the idea that the comumen stock-3 holders are not being paid for one simple reason. 4l These poopic are retired and they look forward to 5 those dividends incorporated and within their Social 6l Security checks, and this is what they look forward i 7 to. This is their life and they are being penalized. 8l The preferred stockholders are going along 9' and reaping the benefits and not absorbing any of 10 the cccolications or the possible negligence that 11, they possibly could have incurred. 4 12 Mio are the preferred stockholders? Are they g 13 the cwners of the Cc=pany? l ul _ _T 15 1 16 l 17 l 18 F 19, 20 ll i l 21 il 9 22 ; 23 4 O 1 25 ! i i

Fahry-redire;t 3173 1 T!!E UITNESS: (Continuing) So, again, we are O 2 not here - and those letters, those threatening 3 letters being sent out, I wish they would stop 4 immediately because we do know that this has been 5 duly approvsd in the Suprow Court before. What we 6 don't want frem this day forward is to have any more 7 I of theas thesataning letters. Ifa you want to challenge us,Mr.Kirsten,givetheordartoturnoffMr. Charles l Sl l 9l Blanchard and then we will go to a higher court. You l 10 ' give the order tomorrow to turn me off, and I will go I l' j 11 to a higher court. But, when you do this, you better 12 l be assursd of that, and I hope that we have covered l l C ourselves quite well in this courtroom as to what we 13 i I' 14 l are talking about and that's without at attorney that l' l' 15 vo have done this thus far. i 16 But, don't threaten us any=cre. If you want l 17 l to go ahead and turn off the people, I know there is l l t i 18 ! cne with a $1,000 withheld in the energy charge. l 19 l Why dcn't you pick on them and not just the two of l 20 l; um that testified.

fhy don't you pick on somebody l

21 else that han $400 withheld? 22 Youtarn off the whole State, but you do it, 23 but dou't turn ms cff and don't you turn off Charles 24 ! Blanchard. O 25 ; MR. KIRSTEN If you give me those names, I I L

3174 Pahey-redircct I will be glad to check into it. 2 711n : FITNESS: You have those names. It's just 3 that we didn't forward them to you. We didn't come up and expose ourselves. You did that to harasa us, 4 but if you fasi you are on solid ground, on solid 5 ground that we, number one, must pay for your unin-6 7 sured ecsts that you did not cover for Three Mile 8l Island and replacement fuel which is highly questica-l able, did you purchase it at the most reasonable 9i 10 ! possinle cost, and why did you rs=. sin with the grid for all those years until People's Utility-Fight i put pressure on you and cur elected officials i responded. Wher4 you answer all those questions and 13 fN 4 I these questions will bo thrown to you in a higher 14 i 15 and if anything happens to Mr. Charlos

court, 16 i Blanchard or myself or anybody else that you decide i

l to turn off sola1y, quote, unquote, for withholding these chargen, that's not what we are challenging, 18 19 we are not challsaging tha:a because they have been 20 heard and have been duly approved. We challenge tio result of it and who is at I fault. '3 ! Now, you show fault, that we are at fault and ~ 24 we will pay, but we are not at fault, showing fault j will come in the Supreme Court of this State of New 95 ! ~ I

3175 lTsh07-redirect 0 O Jersey. And, until that time, I don't think you have ih 2 the right to disconnset any of us.

• 's are not out 3

hecs to bea'a you dcwn. We are cut hors to defend 4 curselves. 5 You shcw ra - yca prepare a Show Cause Order 6 for r.a why you are terminating my service tomorrow 7 and for 21r. Blanchard cnd anybody else in this court-9 S roca or for any people who are withhciding -- I will 9j darand a Show cause Order frc:= you which wculd -- l 10 l MR. KIRSTCU I thinh I understand your posi-i l j 11 i tion, Mrs. Fahcy. I have heard it for the sixth 12 l time today. i O: i ruz $<2razzs> 1 eca 2 tat =x e-r ac='* **1== '3 m' l l 14 i you havo -- I don't thinX you over heard :-2. I don't ? 15 l know why -- I don ' t knov why yeu ^ didn % have the 3 i ~ 16 ! nerve to stand up and tell r.s in a court of law when i 17 I was ever up here and I was told befers that that 18 I couldn't say anything because I was sitting back I 19 the re and -- l 20 MR. KIRS LMs This is the sixth ti:ae,Your 21 Honor -- 22 THE WITMRSS: Why not call ca up to the stand 23 and tell me that you were going to disecnnect my 24 service and threaten ce while I vaa back thara. l O l 25 MR. KIM TTNs Your Honor, this is tha dixth l

-F Fahey-redirect 3175 1 time that we have had to listen to this. We have a O 2 time pressurs today, and I think that if there is 3 nothing further to be edded to this record, then we 4 should proceed. 5 T!ts hit!1ESS: I hope I have covered myself 6 quite well. I do realize that you do have a timing 7 problen, and I an quite interested in Mr. Arnold's 8 testimony, too. I do hope that I am protecting my-9 self without an attorney, you know, enough that I 10 l am here as a representative of a large group of i i 11 people, and the reason why we are withholding the 1 l 12, LEAC charges. I hope that part of it came across I (]) 13 l at least, and the other question of why they didn't 14 l terminate service yentarday. If they can't do it, 15 ! tall us. If they are going to beat around the bush, i 16 ' tell us. That is what we would lika to have answered. I 17 We don't want to ba threatened any more. Me want 18 the right of dun process of law. Let a Judge decide, 19 and I think that's no more than fair. 20 l JUDGE MAnsuALL: All right, thank you. 21 At this time we will take a break for about 22 five minuta. 23 (Whereupon, a racass was takon.) i 91 I ) l l 25 i 1 I ( l i

6? Arnold-croi.o 3177. 1 (After the receas.) D 1 D JUDG2 IIAR3lALL: Each on the record. 2 3 lir. Iludelli or Ifr. Makul, do you wish 4 to proceed with the crose-examination of Mr. 5 Arnold? 6 131. ICEL: Yes. 7 8 RO33RT C. A R Ii O L D, previously micrn, resurmas 9ll the otand. i i C.A33-ZZ.E11 HAT 1GI 10 l i i 11 LY IC. iMEL: 12 l Q Gecd afterncen, :'r. Arnold. l O 23 r=oci7 cur testicour =crticr. couta I take te l I4

12: your current po:iti:n is tha T:11-1 would -- thn re-l 15 c urt is officially caticated as August 30, 1981, but there 16 is a very realistic poselbl!'.ty that it vat 1d slip an codi-17 01 =21 cuo I.:enths?

18 A Ho, I don't think I catagoriced August 30th 19 as en official dato. I think the way. to categori::e it in 90 that it's a cargct data to which ue have been vorhing toward ~ 'I for apprcxinstely the Icat fcur to sin conth:, c=d es the ~ o, aleuents of the work effort cod schedule, that this is ~~ 93 ~ liaxly to be acccuplished ca, have beccxne clear that it is -- l ~ Q it indicates at this time that va vill have acce slipp.gc '5 ~ in the acccuplid=. cat of char verk reistive to tha Aucaat 20th

Arnold-cross 3173. I dats. O 2l Q You did refer to a date of.or a pensible re-i 3l otart ti:ne, I think, throwing in rece contingencico, the 4 ecd of 1931. Is that correct? 5 A Ycs. 6 Q Vould that ecan Nove:6er er Veestabar of 19817 7 A Yec. I think that that time frame is the S

a>st lih01y tir.c for ratrrn to pacer operatiens based t~pa 9

khat we know tod y. 10 Q Civen test it to ec-Octcher 20, 1950, that 11 m ans that ul2: yru veuld perceive as the rest likely re-l' turn to aervico date veuld $c et Wat a year away. /') s. .ms 13 ,c s., y a f 14 l Q Mr. Arnold, do ycu recall..af couple of me.:hs l 15 af ter the Tarce Mile Island accididt, Fif arc rtd F.ny 1979 16 tir.a fr.nm, what the cocinated Dil-1 return-to-acrvice dato II oas aa of that time perapcctive? I I8 i A 'la s. At that tina, bcsod uysn a Ictror, I l bellave the dsts of hich ual June 25':h, the latter part 90 c' Jrna, anyray, of 1979, and the correctirc setion we ~ 'l idea:1?y in that !ctter that v2 neuld want to accccplich ~ i o, l prior to the retra of the unit ta scrrien, a projected ~~ '3 a retu n to scril:a 12 abnt Octc52r or lic scher of '79. ~ 94 ! Q So an o", cry, ity 197?, ycu ver: looking at ~ 25 c 2 turn to Scrrice in ::12 0.cnth1. i l l 1

l.rnold-czcas 3179. i 1 A ics. O 1 V 2 Q Now, about in s:.y Usrch or april of 1900,1,hnt 3 vs.s the -- 14acd on your knmiledge as it voc then, that pas 4

our best estimate of a return-to-servica date?

5 A I thi:A that uns pt:b:bly cbcut the 1 cat time i 6 during t.hich - the inst time I appeared in n proceeding 7 here in Up Jcr:cy cnd diucucced the T.*II-2 nitucticn. I 8 have not revitucd that tot,tir ;;ay but ::y rccollection is that 9 st that tima Uc were looking c:vard on objective of coc-10 pleting the work nces.csary fcr etcrt-up by the end of 1900, ) i j 11 ht with ::cca ncecrtcinty as to that vould be needed csd the I 19 g tinn period for ccccepliching it, that it could slip into p I3 d

• " third gesrter of '31.

a 14 [ Q Co, in other ucrde, in Ipril 1900, haced en l 15 ! ycur beet kne.ul,:dg2 ct that th::, ic uc; going to be sc=e-I 16 whe:o frc= 8 co 12 conths in the futuro. i I A ies. i 18 I Q It appears, lir. Arnold, Lla: the ill restcrt, 19 based on y:,ur best Icmaladge at any particular cisc, always i seetu to be about a yet.: in tha futurc. l 1 91 ~ i A I think that that recounting the blad of his-l 29 ~ l tory of tSo schedulos is the right perspective frcct which l 23 l to approach a question. If va go back to the June 1979 1 94 Q tian period, tacra was identified a: that tina a nu &er of ~ 25 items which all hbcoch 5 Uiles desi;;ard plon:s brd ta I L

J Arcold-cross 3130. I accoceplish in a alatively short ti:4a frc:ac. Plants were 2 cith:r scheduled for shutdowns in the very nc.tr future after 3 these ite== vert identified, or were required to stay down 4 if thej vero in a sintdom taode until they ccc:pleted car-5l tain it:ns. 6 In addition to those itae.e, we identified 7 ee=c addition:1 corrcetivo nessures tee tranted to pu: into 8 place before va rotunted Unit 1 to curvice, including the 9 re-c.uninntion of all of our operatera by the liucicar 10 3e ulatory Cc=c:issica -- that 19, all of cur licensed i i IIloperaters. l l' - i j W felt at that time that that scope of work ~ O

• i 13 t'e entirely =dequate es a basis for the safe operation of 14 !

[ Unit 1, and we ladica:cd that in the June latter to th: It.: Clear l'cGulatory CO.ui33103. ~ 16 ! l 17 i IS 19, l' 20 ! I 21 22 23 f i 4i 9 O t 25 i l l ~

Arscid-croso 3181 1 A (Continuing) The 'Juclear Regulatory Coaalasion 2

aede thw decisica to require that the Company go throug'a 3

the Atomic safety and I.icsasing 3osrd evidenciary type of 4 hearing cu the issues that wars identified in their Augaat 5 Sth order. It added a substnntial additional increment of f 6l work effort which we had to accomplish not uniquely -- not 7 in the sense that ne one elas had to do 1% but which we had 8

to accctplish before return to cporation where other plants 9

were per:alttad to schedule t. hat consistent with the operational 10 neads od their plants. i !j 11 In general, thcas requiremanes were 12, divided into -- or a portion of those requirenents, those 8 l l' Ijl that ware referred to sg lotsons laurned correctiva actions, 1 g 14 ! were divided into two categories, so-called short-term require-15 i nents c*.d Icng-tern rostire:vsnts. ~ ~ I 5 16 The snort-tarn requirecents were in 17 lgeneral raquired to be cc=pleted by June 1, 1980 and the l l 18 longer ter:a by January 1,1981. 19 !!.wr, those items were identified not in l 20 detail, in the acuse of having analysed what the implications i 21 ; ware of complating those items, but had been identified only l 22 in a general cenza, in a ec ceptual nonse, and they referred 23 principally to :.edifications to the plant systess. l 24 ; ?he initial order from the Nuclear O 25 neguistory cor=.la:2 ion that -- wil, net 'tnitial, but the 1 i

Arnald c:ono 3132 g August 9th order statr$ we would have to complete those short* 2 term itens befcre return to operation and.show satisfactory I gregress on the long-tsrm items. 3 4 What, in effect, turned out to be the 5 casa is that because of having to noet these prior to hearings 6 and the Nuclear Regulatory Commission having to issue a' 7 aafety evaluation report, in which they stated their conclu-8 gions and judgnenta about the adequacy of our actions on 9 tnose lessona learned and the othat cct. tit:aents that we.ra 10 cade as part of the restart, we were Lae first plant in 11 i which the specific engincoring and technical details as to i 12 what would be required for those correctivo ecasures vers Q 13 dealt with, a t i 14 l That is, TnI-l became the lead plant, I I d 15 ! really, for resolving in detail what was required to fulfill 3 16 the conceptual description of the changes that vare neccacary 17 and under lossons learned. For the short-t9rm items it becane 18 19 obvious as one got into those issues that they could not 20 be cceploted by the first of January of 1920, and that won 21 true not only for us, but it was true for other planto en well, and that inpoct of those short-term lossons learnod 22 23 accomplishr.ent were the prittary canso of the requirczant stratening out into late '01 -- excuse ma, lato 10E9, 24 25 cort of the first najor slip. I i

1 Ju aold-czosa 3183 1 A (Continuing) As it became obvious that the O 2 hearing schedule w:s going to stretch out substantially 3 longer than the osa year that was forecasted or given as a 4 target schedulo for the hearings in the August 9th Order, 5 the NRC took the position that we would also have to com-plate the short-tern items. 7 "he experience with the short-term items 8 iwas basically the sana. That is, that we and others within 9 the industry cculd not complate those requirecents by January l 10 1 1, 1981. This w.s recognized by the Nuclear Regulatory Com-11 nission, I believe it was late this summer. i 12 MR KIMT:IO I'm sorry, you meant the y: 13 Icng tern? 14 T;IE WITM*t3S: Excuss me, the long-torn I; i

j 15 !

igges, I

16 l A (Coritinuing) This vaa recognized by the i 17 ll Nuclear Ragulatory Cetmission, I believo, in lata su:c:cer i i 18 I 1900 when they issued a document which gave relief for I 19l' accomplishment of the long-ter:a items from the January 1, 20 l 1981 deadline. 1 21 Q Ifas that relief postponed? 22 A tiell, they apread it out, depending on the 23 individual ito:as.,And, I think they vcnt as lots as 1982 1 24 ! or early 1982. Son.e of then were like mid-1931 and acto O I 25 l the end of 1931. I b il

Arnold-cr:ca 3184 1 Q The schedule which you are now citing where O ene =est 11ke1r return to service d te of TsI-1 would se, 2 3 say, Auguat -- I'm sorry, around neverter or December of 1941, 4 does that include completion of the long-term iters? 5 A Tha s.ajority of them, yes, but my recollection 6 is that it doesn't include all of then. 7 0 Does that nean that barring further grace g periods from the NRC that T:!I-1, if it returned to service 9 in acvomber or coes.-ber of 1961, night havs to be shut down 10 all over again to cceplete the itens that have to be compinted fer 1932? 33 E 12 A Well, I don't think that it's probably realistio 3 13 to put that kind of a conatruction en what's likely to happen f 14 because, obviously, we see oursolves gotting into that kind of a ituation, if we do, vs will attspt to aceslarate the a 15 i i g; accenplisinent of those itens so they are cc pleted before i ' the restart an( would not require a shutdown shortly af ter 17 18 ,otartup. l 19 ' 0 But if, to got that additional work done, 20 ro.guires more time, then the noventer-Decenber 1931 date could slip a little further, couldn't it? 21 A I can t disputo that as a suppcsition. 22 23 3ut, I don't think it's a vary realistic one. I think that 24 as wo gear ur off rt, ur levsl of aff rt to the progreus 25 of the hearings, we will 50 able to gauge the timing of the

Y I Arnold-crona 3135 1 co=pletion of those items or the lack of the completion of () those itans to the completion of the regulatory process, 2 3 and we would certainly expect to not have that kind of an 4 L2 pac %+ 5 Q Hten the haarings are completed, the THI-1 6 restart hearings, I believe it was seven or eight areas that 7 you covered in that ragard, when they are completed, what S happens if they find ths THI situation is wanting in one or 9 more of those general categories? 10 For exacple, I holisvc you indicated 11 that the Atomic Safsty Licensing Dcard is going to b2 re-E 12 viewing the itcdificationa underway. 13 A Yes. f. 14 Q The status or preparedness for enorgency 15 rospense, doesn't your schedula assume that the Atomic I 16 Licensing Board will find what the company has submitted to 17 be satisfactory in all respects? 18 A I don't think it assumes daat it will be 19 satisfactory in all respects, Mr. Makul. but I thiah that we 20 have a good baais for a high degree of confidence that we 21 will have casentially satisfied all the Board's requirements. 22 The process of deciding on what corrective 23 actions are necessary, w hat's necessary to implament the 24 shortand long-tern lessons learned takes place with extensiva O 25 dialogus with the Nuclear Regulatory Staff, with the know1coge i l

I I I rncid-crosa 3126 A et. 1 of what other plants are doing in response to these same I: O i 2 concerns and the Company's plans and activitives are revic,wed 3 by the Advisory enemittee on reactor safeguards which is an 4 advisory comittee of the Nuclear Regulatory Comatission. 5 so, there is a lot of dialogue, examina-6 tion, pz.oviding of insight into these issues well in advance 7 of going into hearings. 8 I think the other aspect, if I could go 9, back to what I understood to be the thrust of the initial l 10 l part of your question, is that -- I don't think this hearing i l j 11 wuld result in a substantially different approach on the 2 12 Ipart of the Board than other operating licensa hearings. 5 i O: '3 x=d. that's th = in tae< eat that th r ri=d snar===a ite-- M which regr3rs further action er additienal action beyond what 0 15 ;the Cc::ipany has ccepleted before the plant can rzturn to 16 )' service, these things are identified by the Board and they i 17 ara usually in effect qualificatiens placed on the rsec=:nenda-1 18 tiens of the Board and the Conpany has the cpportunity to a il 19 respond to those. II 20 ! It's typically the case that the Nuc1sar i 21 Ragulatory Cc=:Lission would issue the operating license with 22 requironents either that cartain activities be completed p i 23 prior to the plant starting up or that they be completod d 24 by the time the plant reaches a cartain stage of startup 25 i i. t i

I a 's f Arnold-cross 3137 i y or be completed by a certain calendar time, depending on th6 1 2 nature of what they were. i j 3 1 i i 5 I 1 6 P a 8 i l 1 9 i: 1 I! 10 i 2 11 i 1 12 I f O 23 i 14 g 1 l 3 i 2 16 i i 17 18 t I l 19 I i 20 i e } 21 i I 22 i l 23 I i i i 24 i O l 25 u f, I ~ i

w 4c ..rceld-cresa 3188. A (Centir:uire,.) The PAI-2 eperating licenso 3 3 2 initially he.d several peger of mmlificatienn when it uns 3, icrued. The cost prevalent beinc, tho fire protection : nodi-I 4 ficatica. So I think should the roard decide ecre was 5 nece.asary to provide adequate ancurence for safe operations, 6 they vculd identify, in the course of issuing that opinica, 7 what those corrective acticas veuld be. 8 Q Would it be fair to say, then, that rhile the i 9 potenti.el entsts for a decision out of a liccusing Scard i 10 i shich would ecScire you to go back and start over again on l 11 scsc ncy codificattione that ycu think the nature of the pro-e 12 ceeding is such that yen vill learn dwt cdditionni =cdifi-O i '3 ! catte== or chc=s== =tcht de =c=a==arr ta the =t<>e =r the i I j 14 l preccedin*;7 f 15 A I think we already incn that for the scept of i-16 ! the pre ent hearin:;:, so thct I think that the only vulner-17 ebility we would breis is to ee::e rev insight gained by the is industry concerning the proble=s. 19 4 You necu for est::cle rene additicual prnbitu 20 which =sy have crepped up at onether :r.tclear cito elsevhere 21 which is now requiring an e rcrcll recpense by cli lictnre 22 reacto s? 23 3

yg3, 24 O

Senething like, juct to pick ena cut of the 25 j pa3er, :Se Indian reint tp e credlen er c 7sti.1 River? l i i

e Arncid-croes 3189. A Yes. If one of tlwse hinds of prohluss or 3 O pt n===pericaces were encided to have sc.a seneric erp11-2 cation that retuired our perticular plant design to be re-3 4 sponsive, then I think that would be the case. But I also 8 5 think one atuays has that 5 ainerability whether they era in 6 the course of hearings or up in the operatira area. 7 There is the potential for that to develop 8 anywhere. 9 Q l'ow, Mr. Arcold, recently the Pennsylvania 10 Pub 11e Utility Co=misnien turned dcun Metropo11 tan Edison's l 11 l requa.st for a $35 nil 11cn c=crgency increase. I'n sure I i I 12 l you're arrara of that? l t '3 ' ^ 'c= > I c== - O: J. j 14 l Q Now, Metropolitan Edison, as you also !c:cw, i 15 ! 1o a 50 percent owner of III-1. Aa a reault of this refusal by the Pencylvania PUC to grant the ccorgency increase, i r 16 l 17 l this affected in any vay tha overall budget availablo for 18 l 211 1 vork? 19 A The planned icvel of e:Genditures as of nid-20 1980 for the balance of 1980 and '81 are the level of ex-21 ' penditures that va are continuing to coply, or the icvel 22 of resmirees un are trying, to apply to the Unit i rescart 23 preparotton. Althm13h we reviened the activitics at Tit! 24 in light of the very tigit financisi conditions that exist

• 5 for Metropolitan Edisen Ccrqany and did cut them twck fro:a i

l Arecid-crcco

3190, I

the icyc1 that was actually being expended in the Auguaf-f q b 2 September time frame of 1960, the level to which we have l 3 adjusted them is the budget invel. 4 tiw, we are currently Lu the process of de-5 veloping the 1951 budget and my expectation is that we will 6 probably increase the luel of resources being appli d co 7 1961, that is, increase che budget for 1931 for til Ualt 8 No. I chove that level that was pimacd an of the atiddle 9l or 13p3, l 10 t intst we are basically keying to is to insure i 11 that we will be abic to restarr the etit by thw ud of the 12 lIyear if the hearing process is cesplated. g i h, Q lioli, 1 hnys a publicction here uhtch is put 13 14 out by 4TJ or one of its affiliates called: " Tail, Today." j 15 ~ We publichcd t frca Three Ifile Island. a i 1 16 Q And this is the Sept.esdser l')CO ist,ue which 17 was published after the Pe:insylvania IUC's decittica to re-18 fuse the $35 uillion eaargency rata incranac. 19 Gn Page 4, we have au entire peac hora, "GPU 90 program under uuy since accidene, station initiates strin-21 gent cose-cutting creasures." And, under Unit I;o. 1, you 22 list specific accivitics which I. asauaa these are the '3 activicies whien are :.a che lea;-usra plan, und yaa have 24 O accicus required. !ct I correct that these are actions re-G quired ao a reault of the coct-cutting :2casures?

'.xnold-eross 3191. 1 A Yes; the acticas required hare are those things (G 2 that we undertook to bring the icyc1 of egenditures d:rm 3 to the budgeted level. 4 Q Well, just to cite what they arc, the first 5 one is, "Significent reductica in overtinc vith prior ap-6 provc1 by directoro for exce.pt pere::nnel and managers for 7 r,sa-eruipt personnel." '.het kind of cvertiesc was occurring 8 for thst hind of activities t/aich arc : s: bein; reduced? '1 9 l-Well, the activitier *,::cing pursceti were ceross i t 10 l the whole spectit. a of cctions to pr:pcrc for rcstart frem ,i 11 prolighting to the ergineering. f r c:dificacicas to the e i l ! cccatructica wc:'c Esocisted with tha acdifientims and for ~ j l\\ -T 13 ' V necessar7 tr.alatenance wor's. 14 ' g i b'e v:re running on the order of 25 or 30 per-I-l 4 l i cent of straight tiac dollars for cv.::tl.sa dollara on pay-16 I I roll. And, ce have reduced dat desu to chout the 3 to 10 17 percent level. 18 19 20 21 22 23 i 0 94 ! 25 l

Arc 31d-croco 3192 i 0 Well, were these activities that are being 2 reduced, are these activities that were specifically in con-3 mection with the return of Unit Number 1 to service or some-4 thing that is even longer in scope? 5 A They are really a mixture of the both. They 6 are a mixture of those things that are specifically identified 7 as necessary to return to service, and those things that 8 '.ars part of having a facility thers of the nature of TAI which 9 :ons has to maintain and take care of. l 10 l Q I wonder if you could cite some specific I l it lexa=ples of work that was reduced which was not work directly 12 ;cennected with - rastart of TMI-1. 5 i Q 13' A Cne of the probler.s identified on a generic 14 ;l basis within the industry was the design of hangars and i l i s 15 'ln particular, tha way in which the hangars were physically E 16 attached to their supports. 17 All plants have had to go through and l inspect that part of the facility installations, and thesa 18 19 ;have to do with safety gatens. And, they had to do reanalyses 20 iwhere that was indicated and upgrade the pipo hangars whars 21 Ja analysis indicated or the inspections indicatad it was 22.hseded. 23 That was an area that is a good crample is 24.of cne that Mot required or was not reghired prior to O 1 25 irestart, but obviously is required as part of having the N' facility there and wnich we intend to complete befors restart.I

Arnsid-cros] 3193 1 But, we have reduced the level of ' s 2 effort, we let it stretch out in time and, in particular, 3 reduced the overtime -- in that case, we have eliminated the 4 overtime being applied to it. 5 JUDCS !mASEALL: Mr. Makul, do you 6 wish to have that publication intreduced 7 into the record as evidence? 8 M2. MAIUL Well, no, not really. I 9 caly quoted a little bit of it so I don't 10 think it's necessary to introduce the whola i I 11 l thing. i 12 JUpc3 M.usIIALL: All right, fine. 8 O i l o "o* =**== "== =*=* $7 "r

==2*r to "'- f 14 l 3erillo on October 20, 1980 and the cover letter says: 5 j 2 15 " Dear Tony Attached is tha diarnary update report nu:ther i i i i ~ 16 ! 12 datad October 15, 1930 as to the status of TMI Unitz 17 Number 1 and Ncnbsr 2." l I 1' i 18 l And, in this letter under Unit Number 1 19 l { status, it statoss "A rsview is under way to nors clearly 20 define those modifications which, in fact, cust be completed 21 by rostart and those on which reasonable progress is 22 acceptable. The goal is to reduce the nu:nbar of nodifications 23 'scw classified as nandatory, in order to reduce the scopo 24 lof work and inprova the schedula." O i 25 ! Do I take it that at 1 cast as of Oci:ober l 1 l l

lf Arnold-cr:co 3194 1 15th it is not known exactly how many modifications are i O 2 necessary before restart? 3 A I think thebetter way to characterize it is 4 that those issues are always subjec t to additional discession And, what we have seen over! i 5 as more infornation is developed. 6 the last year as we have been working on the plant modifica-7 tions and had the enginesring and technical details of what's 8 required to be accenplished is that time in which it will be 9l required to accenplish them ia longer than the NRC had l l 10 ; anticipated or we had anticipated when the requirement to I i 11 ' completa the iten or itema was imposed upca us, i 12 : So that we have been reviewing the l } 13 current list of coenitmnts for restart to identify those, 14 particularly the long-term ones for which vo believe a 15 reasonable case can be made for not requiring them to be, i l 16 in fact, cceploted befors restart, but only having shown 17 satisfactory progress en them. And, we anticipate talking - \\ 18 [in the near future with the Nucisar 3eguintrs;y Cornission's f d 19 !3taff and identifying to thom where we are on se:w of ths l 20 j' items which we think sona change should be made in the status i 21 fof those iterss as te where they nhould be at at the tirae il il 22 m start tp. i l ">3 i Q Is it safe to assume that the nore itens which i 24 hast be ecmpleted, the longer it will take to comp 15te O 1 25 lthem, given the resources at Three Mile Island? l l l t. I a i

Arnold-cros3 3135 l 1 A wEll, if you impose on r.e the requirement O 2 that I fix the resources being applied as a function of 3 time to some selected level and then the work required is 4, inczwased, then obviously the tir:e to accoeglish it is 1 5hincreased. I 6l I don't know that we are in that situa-7l tion at this point. freet 8 I We would like to obtain some relief /soms 9 f of those itors just to reduce the secpe of the work that we 10 ! currently have undezway. i h j i 11 ll We believe it's frankly in the best 12 l interest of ereryone to get the scope of work reduced to i O 13 where it can be more offectively managed and acec=plished, i; 14 ' I think that the work we do do is dene 15 more efficiently in diract prcportion and scope of it.

And, 16 I don't think it naeds to go to the conclusion that the l

17 scope stay the sa=s as it is right new as required for 18 restart and that we will not be able to ec=plete it because 19 l of a rosource linitation or because of the amount of work I 20 ! before that tire period necessary to support a restart by 21 the end of 1981. 22 Would you like ma to trf again on that? 23 f 24 i O L 25 p N i

4G ert:old-crosu O1Mo 4 Vell, I mrst aduit that I an acueuhatecc-O certain as to uhat you said. I guces to rephtaca the quos-tion, in c:t'er to cer.plete more itcas, a directica to com-r plota core or less given the financial cvailcbilith to ths CPU Corporation u d its affiliates, and given the physical 5 limitati ns of hets meny people you can offeetively have 6 working in a limited space at cue time, and given your 7 e g engineering and design linitations, you only have so many 9 design people to come up with the specifications as to stat must be ccepleted, directional 17 h. wing coro codifications 3g j j s 33 necessar/ to be coepicted before start-up, vould that re-12 cult in a lont,er ti=a schedule to canpleto the grsnd total I i (] ) 13 l of all the iteas? v A The distinction l'n trying to make is between 14 i s 15 l what I call trends,- an htriurie properly identified how e I these things inter-relata to each other, frcm in a sense 16 i i 17}i the defined case that we have for Unit No.1. IS I do not belicyc at this ti:nc that we are i 19 j oither no restricted by resources, particularly within 20 ! Metropolitan Edison, or by the availability of design en-i S ncers or the a cunt of people that it requires within the 21 22 plant to do the work that we vould be pre-copted from being 23 l ebic to eccc=plich the current ecopo of woch defined for l 24 res tart. O 25 I thin'c that that scope is a very ambitious

n Arnold-cross 3197. I I think we can do it more efficiently sud I thinL one. G 2 there are some items for which it'r reasonaM.e not to re-3 quire that thcy be completed prior tr> restart. And,'those 4 are the positions that un are presenting to the Nuclear 1 5' Reguletory C<.mnission's Stcff to, hopefully, gain their 6 concurrenco. 1 7! Att if re don't gain their concurrence or if 8 the 3 card should decida that a reinxation would not be 9l cypropriato, cy expectation is that we could still complete 10 i I the identified, the preacntly identified scope of work for 11 ' ~ i the restart cocr.iscent with the return to service by the 12 l ? end of the ycar. Q How, niso in this sutnery it states, "Testi-i 14 i cany on plcat modifications and on ceparation of Unit 1 15 g frca Unit 2 van filed before the ML3 on September 15th. I 16 Twenty-eig,ht of the cantantions, approxinately one-third, 17 I l vere addrected." 18 l Decs that zean that two-thirds of the conten-19 l i i tic =c cr appronfmately 56 of thant were not addressed in the 201 p testinony? 21 j A Yes. The ASLS hearingc have identified the 22 ; y ow.:ence in which the cententions that are t 2 be considered 23 i in tha courso of the hearings will be taken up. They have 24 ' l O ideneirica tha acaeaute ro= the ti==t th=== are or con-25 tentiona and that identifies that uo subnit our testimony

l 1 Arnold-crcss .n,.98. I on those first threc areas of cententicr.c t:nd hev ::!nny con-O) 2 centioca of the totc1 nunber of contentions that testimony 3 addresses. 4 ife vill subsequently be filing testimony on 4 5 the balance of the contentienn in accor:Mnce with the i i 6l u2hedule octablished by the ASL3. l c 7 Q liow, quoting, frs t caather parag aph, it ncys, i Sl "The five broad arcan of 20L3 invcatigation vill 52: 1, 9l analysis.ind nodifications of plant desty.. 2, entryncy I 10 l

pinnning,

,, canascent espability. 4, firancisi qualifi-11)! cation. j 5, indtgendence of Unit !'o.1 f:ca l'ait Mo. 2." 12 g !!r, earlier you neated that -- or it's in O, here soceplaco, it says that test's. m. ,1:.nt nadift:a-I3 I4 tions cod on separatica of 'Ini: "c.1 frect Unit Ha. 2 res 15 filed before the ASR cn Scytcr_Scr 15th. Eots the C.7:p ay I i 16 ' intend to filo tasti2ony on the other three area.2, uarg:ccf I planning, nanager. cat capability and fi:ianctc1 qualificationL 1 18 i A hs. Those uculd be filed in acccrdance with 19 ' the schedulina of the h3arings on the contantiens that apply; 'O to those areas. Zut I might also sf J that for the purpesas 91 E ~ j of that report, I triad to kind of group the varicus areas ll 90 ll of the hearings lato those five est2gorias rather than give ~~ 23 0 i a more detailed list that : sip,ht -- at leant the einht that 94 ~ were in the original August 9th ordar and a cc ele.of core Q 25[' i added, but those nem to r.c to capture the general nature

Arnold-croso 31 % of the contentions and issues to be heard before the Board. 1 O Q Well, either on the basis of the eight that 3 you cited today in your direct testimony or the five that 3 are in this eucrsa y, det is this schedule for the Company 4 5 to file testimena.y in the areas that ycu hr.ve not filed tes-6 ti:nony so far? 7l A It hsn not yet been is e d no far by the 8l ASLB. I 9l Q There h7s not be r2 My scher'ule issued? i A That's e m ect. 10 ; 11 5 ,l 12 !! O; 13, s 14 i I 15, ~ ~ 5 i: 16 t i 17 ' i I l IS ! l 19 j 20 i 21 ' 22 ' i 23 I l O 4l 25 ! 1

5C Arnold-cro:o 3200. 1 Q Has there becs ny direction frosa the ASLB O V 2 as to shat kind of questions the testimony to be filed 3l should be responsive to7 i I 4l A Yes. The estsbiish= cat of tha contentions 5 to be considered before the T,oard in effect define the scope 1 6 of the testimony that has to be prepared. If I sa going 7 over sainething that you aircady cra familiar with, please 8 interrupt me. 9> j Q Well, I think it's worth hile for the record, l 10 l no natter tho =sy be f ntlier with it. i. 4 i II : A The w.y in t.hich the procc : works as das-l' I i cribed by a lay. nan, such as =y:cif, is that the Hucicar ~ p 13 ' l V { Regulatory Comission identifies chooe ic. sues which they 14 ' i i feel need to he considered before the ASLB :nd a record 15 ' de.veloped en thcac issues co the Cctriisci:n csn nake a 16 l judgment as to whether or not the unit can operste with 17 j adequate assurance of public health and cafety. i 18 The Board then throuch pre-hearing confereneca 19 has the parties to the hc: rings, that is, the applicant i 20 or the Licenace in this caco, R trepolitan Edicca, the 21 Eucicar Ecculatory Cecr.isaica's Staff, and the variors 22 intervenern, plus the State of Fecasylvcnia and two or 23 three of their at;encies work to identify what cra es11cd 24 i O l " c "' *"" * =" "'ich *= " "'" '5 " c i* t c " '" * "" ": = 25 l cern which one or more of the parties believco sbauld bc l l i

Arnold-crosa 3201 I appropriately introduced into the hearing process under one O of the issues ideneified by the a C s tasoes to se con-i 2 1 3 sidered. 5 4 The Board then sehen a determinstion as to 5 which centrations will be accepted and which enes are out-6 side the scope of the NBC Gr-Jer and then testinony is pre-7 pared and presented en these cententions in order to de-8 velop the record that presu= ably covers the scope of the i 9 concerns indicated by the issues identified by the E C. 10 l So we have the 58 or whatever the cinber of i i 11 contentions is that are identified in t' tat report and they 12 l cil fall within ene rtr c: ore of the eight or so itens that Q; 13 j the NRC identified as issues to be considerede Then tho

i i

j 14 l cententiets are 6 cuped in categories cnd then sequenced by 15 i the Board as to how they will beer thca, or the acquenee in 16 : which they vill hear the=1. i 17 And, testi:nony is prepared in advance, sub-18 mitted to all the parties,.such as to expedito the hearing i 19 i itself on those c>ntentions. 20 l Q I have a THI-2 related question at this point. 21 ! I recall reading in one of the trade jcurnal.s that the 22 Bechtel Corporation, e.ho I belic m is ycur prime contractor i 93 l on your clean-up -- is that correct, first of all? ~ l 24 1 A The cont-acter for the cican-up of the cen-O 95 f tainement buildin3 ~ I

Arnold-crcOc-crcco 3202 1 Q Yes. i recall reading that uey are seeking O 2 fre2 ht-Ed or GIV or the affiliates, either singularly or 3 as a group, some sort of an indesanification against pos - 4 sible negligence suits connectad with a possible accidentd. 5 releare of radiation or other types of releases in connec-6 tion with the cican-up. 7 Could you expand on that? Are you familiar 8 with that at aill i 9! A 1 think. I'm familiar with what you're refer-10 ring to, although I am not familiar with the particular ,i 11 report that you apparantly read. But in the course of 1,~i j l negotiating the contract with the Bechtc1 Corporatica, they O; '3 ; were of course concernea about uhat their liahtlity uc.ild 14 ' be under the contract as is always the caso in cuch cen-O j tract negotiatians. And, their liability for accidental 5 16 ! I releases, their liability for property dcutga en the cito 17 were two of the lasues that hcd to be addresacd in this 18 - l negotiation as they were, in others. 19 ' 20 21 r 22 23 ! i i O l ~. 25 l l

Arnold-creaa 3203 i i 1 A (Ccatinuing) Without having the contracts 2 availsble to ra3 to rafresh ny namory, I think that the rea-3 sonable way to characterine it is that those issues were 4 settled within that contract consistent with insurance 5 coverago available to the parties and the typical contracting 6 practices in those arecs. 7l 2 7.re thers typical centracting practices with l 8! respect to clccups of nuclear accilsnts? i 9! A No, but it is tyylcal contracting practice with' 10 l regard to liability at nuclear plants. I 11 Tor extaple, public lichility is providad 12 l under the Prica Anderson Act. And, anycne who works at a 13 l nuclear facility obtains their liability coverage under 14 l tho n=br:11a of the utility or the cperators of the facility 15 ' who have the covsrags under Prico Anderson. So that a i: 16 ; contractor at the sito would not have public liability them-t 17 ! selves, they would not have to provido public liability r i 18 ! coversgs themselvas. They would obtain their public liability i l i 19 coverage througn tha utility, and that would be incorporated 20 in the terms of the contract. 21 ll 0 I guses to put it in strict laynan's terns, 22 l if Dechtal has an accidunt, you look to the utility and 23 Prico Anderson, if you're seeking damages? 24 l A Yss. And, from a practical standpoint, that's 25 "I l l whern you want to be abla to look. l l I l

Arnold-cross 3204 .40 1 MR. MAKUL I believe Mr. Nardelli O 2 has a question er two. 3i CRO3S EXAMINATION I 4 BY MR. HARDZLLI: 5 Q Mr. Arnold, do you recall testifying back in 6 March of this year before the Board of Public Utilities? I 7 A I recall being here and I was trying to 8j rer. cuber what the data was. Certainly I expect it was about 9 : March. 10 l Q Wculd it be fair to say that TMI-l is no closer 11 l to restart today than it was back in March of 19:07 =: 12 0 Ii one can make a distinction between, perhaps, A 7 O; 13, what th. ttuth 1., inderene.ne or our one.=staneing of it. 14 I think it is ccrrect to say that cur undarstanding of the i 15 situatien is essentially equivalent as far as hcw cicae we i 16 ! ara to raatart. 17 ! O About a year? 18 A Yes. 19 !y l Q In each case? 9 20 A Yes. l Q Now, thers was some reference made earlier by 21 1 l 22 ons of the public witnesses to the cleanup costs, the uninsured ii i 23 0 cleanup costs. l d i t 24 lii O It is my understanding that the rates { 25 beingchargad to Jersey Central customers do not ref1 set any [ t l 1

-3 ~ t Arnold -cross 3205 1 of thoso' costs. Are you in a position to be able to confira 2 or deny that? 3 A Mr. Ukrdelli, I'm not an accounting witness. 4 I don't have the expertise in that area, and I really think 5 it would ha preferabia to have another witness address that. 6 MR. NARD 5LLI I have no further ques-7 tions at~this time, Judge Marshall. 8 N JUDGE MARSHALL: Dces the Staff have 9 -any questicas of this witness? 10 y3. 3ELLO: Ito quaations. 11 JUDC: :4AICHALLs Mr. Sahradnik? 12 MR SA3RAONI:s I have just a few .s'O i. qu..tions. 13 O a l 14jCICSSE2AMINATIGN l ~ ' 15 3T MR. CNUULCTII: l ( 16 1 Q Mr. Arnold, what is the Co::pany's bast estimate i-l 17 to data for the start-up of the THI-2 plant? l i 18 A We have not really tried to make a beat esti= ate l l l 19, of t$utt, in terms of making a forecast for what we think L 20 will happen. I think the sost that we can say is that as l l l l 21 part of thetchedule and cost effort that we undertook frca 1 22 about Decachor of 1973 through July of 1980, ws developed \\ 23 the sequonce and what wa thought in that earlier ti:se pariod 24 of six or eight months ago to be a raalistic cchedule for 25 I

Arnold-croso 3206 I the accomplishment of that sequence of events to cosplete O 2 the cleanup and then to restore the unit to its original 3 design configuration. 4 5 6 7 8 9 10 i 11 12 l 2 2 Q 13 l 14 l 15 16 17 i i 18 l 19 20 21 22 23 I i O 25 l l i

Arnold-crosa 3207. A (Continuing.) We concentrated very masch in 1 o V 2" that effort on the cl.?an-up espccts of it, nasch : sore so 3 than duelopirc the sequence of events or 1 Min: at the 4 tbna reqeircnents in prticular for the sequence of events 5 associated with the rabididing of the unit in preparation 6 for its return to operations. 7 Q If I might cut in, you had a mentionod a 8 2-1/2 to 3 year period before. Ucs that estimte for the 9 cocIpletion of the cican-up? f 10 ) A Yes, thrcunh rec.crial of the fuel attd a :::ajor i j 11 l portion of the deccataalr.atica of tha reactar building. 12 Q In respect to the canpletion of the cican-up, O 13 I then, we are talking 4>.ut 19G3-347 a i 14 i A Yes. l l 15 l Q Uhich ene? 16 A The cchedulo that t,c hcd duvulcped, based en 17 l that effort in the Intter part of 137), cnd the first half 18 of 1930, uculd have the ccro rcccved, uid-1333, and approxi-19 mately ecother year-And-a-half, or to the end of 19% to 90 rebuild the unit to its original design configuration. I 21 ' I think, that wn icst at 1 est a ycur at this 22 time in pursuing thena cican-up setivitten re.intivo to the l 93 ' l l schedule that tie. were devcleping carlier this ye r. i og I Q So ycur but (sthanco, then, would bo scce-95 y where near the end of 19347

't Aracid-cross 3203. 1 A for ecupletien of cican-up? O 2 Q For completica of cican-t7.. 3 A 1 think that frc:a shors we cre today, th: 's 4 probably thz most opth!: tic ti=c that we could czpect. 5 Q Am 1 correct in stating that bayand the cican-6 up, the questions concerning rchuilding as wall as re-7 licensing would ccca into cffcet? f 8 A Yes; they uuuld be boycnd the cican up. We 9 will not really knou sufficient technicci infor=ntion to 10 l n:cke a judpcat shont the cppropriatences cf rc: cert until i Il ' i vc cre uc11 into the cican-up cnd in pcrticular hevo access I to the insidc cf the :caccor vessel. ~ 13 i { Q So, thca, can I interprc.t your ancm r as 14 i stating thcc there has not been a decisica by the Cc=peny 1 j j as to whether or not 'IMI-2 will netv.nlly So reatarted? r 16 You ccnnot cvalucta s:hether to rcatart or perhaps scrap or 17 l tako secas alternative neacure until the eccpiction of the i 18 l! clean-up; is that correct? 19 i A I think that's true but I wrald like to be I i l 20 i a littic bit careful of how cbcoluto that': understecd. l 21 I It seens to us that the prisary issuo right ncu and tho j ~~ l primary conenrn, the pri=a17 focus of cur efferts end ro-23 ccurces, has to be en the acccaplish:xnt of cican-up.

2nd, 24 O

it's aust too arc =cturc to ceer=sa the sucotten of recenrt i 25 ! 2 1 at this tinc. l i

_) 32M Arnold-cross 1 A (Continuing) However, we have looked at - I we have looked as, for instance, is there any information 3 available which would indicate to us that restart would be 4 precluded. Do we know right now anything that would say 5 restart is not an option. And, the answer to that has been, 6 no. 7 We know at tais tine of no technical 8 basis for not being able to restart Unit Number 2 eventually. 9 Q uith respect to cleanup, it's my understanding at the prosent time that the cleanup costs are being funded 11 I through your insurance recovery, is that correct? Can you 12 O 13lanswerthat? i l A Again, I'm not an accounting witness and I 14 l

i

' think that one has to first understand that Unit Number 2 15;l has a cost associated with it beyond just those activities g 16 ! i j that are addressing cleanup. Even without accomplishing any 17 I cleanup, thers is costs associated with the facility's' l 18 l existence and the fact that wa pave to take care of the I 19 facility. 20 There are also costs ass 3ciatad with 'l the investment that's there and those kinds of considerations. ~ oo j So that whon one looks at the efforts ~~ 23 that are being applied to makn a not gain in the decontamination o'g f of the facility, that's whatws aventually term cleanup. Q ~ 95 ! And by and large, up until this point, the insurance coverags ~

7 Arnold-cross 3210 1 has covered those cleanup costs. O Q There le going to come a efua woen the coat 3 of cleanup will exceed the cost of the insurance recovery, 4 correct? 5 A No quantica that the cleanup total effort l 0 associated with returning the unit to a decontaminated con-7 dition will considerably exceed ths insurance coverage. 8 Q And the completica of the cleanup phase of 9 TMI-2 is going to then depend upon the Company to find some 10 external source of financing the cleanup costa other than 11 insurance proce* ds, corroch? 12 g A m:11, I think I can only testity to the kind l i of -- the avuus c-a-wa a a -n-fu-aat owert war. O: i i j I4 j If One wants to really pursue the i 15 ' financing from that technical standpoint, I'm not the one i f ~ 16 lto addrocs that. But epita cloarly, other roscurces are 17 going to have to be mado available beycud insurance proceeds IS l to accomplish the clectnup. I9 MR. SA11RADMII: s Your Honor, it is 20 3:30, andI know Mr. Arnold is pressed for 21 time. 22 I do have soms other questions, but I 23 think that can be addrensed to a difforent 24 witneos. They would be in the raab of O i "51 j accounting. l l ll

i Arnold-cross 3211 1 JUDGE MARSHALL: Mr. Eirstaa, do you O have any quantions for this witness on 3 redirect? l 4 ltR. KIFSTEH: No, sir. 5 JUDGB MARSHALL: The Public Advocate? 6 HR. HARDCLLIs No, Judge Marshall. I JCCGE HMtSHALL: Does Staf f? 8 MS. BELLO: do questicas. 9 JUDGE MARSHALL: Thank you very much, 10 Mr. Arnold. II I Arc there any other :r.atters to be 1 to I g "l covered today? 1 oo you ian to so oer *sa recora2 O a i M2. tIA2DCLLI Yes, let's <;o off the I4 I5 i record. l I 16 (Whereupon, there.fs.3 cn off tho l II record discussion.) 18 gyggg 33333,.J.,Ls Sack cnthe record. I 19 l This will conclude tcday's hosring. Us 20 l. Will =cet back hers en Nadnanday, 9 400 21 o' clock in the norning. Thank you for 22 attending. l 23 (AOJOUMCD TO lii;DN23 DAY, IKWE:GER 24 5, 1980, 9200 A.M., TtUA2:t, MI7 JERSEY.) O 25., i l t

3212 1 3IEIhIT8 2 Number Descriptica Page i 3 JC-815 Letter dated October 7,1930 fro:n 4 Ontario Hydro to Mr. Herman Dieckarp i and letter dated September 26, 1930 5 from Mr. Herman Diecka:ap to Ontario Nyd o 3124 7 8 INDEx 9 witness Direct cross Redirect 10 i i l ROBERT C. AIMOLD Il ! i By Mr. Kirsten 3125 12 l i j 3 By Mr. tiakul 3177 O i i Dy Mr. Nardo111 3204 14 i j By Mr. Sahradnik 3205 s 15 i 16 DIANE L. Pt.113Y 3139 17 By Mr. Hardelli 3170 1 18 I I I l CHARLES P. BLAllCHARD 19 i I Dy Mr. Hardolli 3157 ~ 21 I 22 23 ; I I 24 I 25 i i}}