ML20038B662
| ML20038B662 | |
| Person / Time | |
|---|---|
| Site: | Washington Public Power Supply System |
| Issue date: | 11/30/1981 |
| From: | Bell N NORTHWEST ENVIRONMENTAL ADVOCATES (FORMERLY COALITION |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 8112090002 | |
| Download: ML20038B662 (17) | |
Text
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t-6 C0ALITION FOR SAFE POWER Suite 527, Governor Bldg.
408 S.W.
2nd Portland, Or, 97204 November 30, 1981 Mr. Harold R.
- Denton, Director Office of Nuclear Reactor Regulation U.S.
Nuclear Regulatory Commission Washington, D.C.
20555 Re: Show Cause Petition Pursuant to 10 CFR 2.206 (a)
Docket No. 50 460 (CPPR-174)
- 1. This petition is brought by the Coalition for Safe Power (Coali-tion) before the Director, Nuclear Reactor Regulation pursuant to 10 CFR 2.206(a).
The petition alleges material false statements have been made by the Washington Public Power Supply System (WPPSS) in its letter of July 21, 1981 to the Director of the Office of Nu-clear Reactor Regulation, Nuclear Regulatory Commission (Commis-sion) regarding the extension of construction completion aates for nuclear projects No. 1 and 4 (WNP-1&4) located near Richland, Wa-shington.
DESCRIPTION OF PETITIONER 2.
The Coalition is a non-profit citizens organization, founded in 1969, to work for safe energy.
Its work includes research and edu-cation.
The Coalition, through its officers and attorneys, has re-presented its members before the Commission, as well as state agen-cies, on questions of nuclear power safety and licensing, and elec-tric utility rates.
The Coalition's membership is comprised of in-dividuals and organizations residing in Oregon and Washington.
AUTHORITY 3.
Pursuant to 10 CFR 2.206(a), the Coalition requests that the Director of Nuclear Reactor Regulation institute a proceeding pur-suant to 10 CFR 2.202 to suspend the WPPSS Construction Permit No.
CPPR-174, for WNP 4, based on the material false statements al-leged herein.
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SUMMARY
4 The management and directorship of WPPSS knew, as early as March, 1981, that severe cash flow difficulties were imminent for MNP-4 &
5.
It was also known to them at that time that such cash flow difficulties would effect the contruction completion dates of said units.
In fact, the WPPSS Board of Directors voted on June 16, 1981, to delay WNP 4 & 5 for this very reason.
On July 21, 1981, WPPSS filed a request for extension of construction comple-tion dates for Units 1 and 4,
omitting any reference to the afore-mentioned facts. No amendments have been filed by WPPSS to the July 21, 1981 submittal.
STATEMENT OF THE FACTS 5.
On March 26, 1981, WPPSS issued an " Alternative Evaluation, UNP 4 & 5" (Attachment A). The purpose of said report was to:
... examine in sufficient detail the options avai-lable to Supply System managment to selectively reduce the project work at WNP 4/5 to achieve a range of cost deferrals which, in turn, would reduce the near-term forcasted funding require-ments. (pg.I-1)
The study projected the results of delaying WNP 4 & 5 for six and twelve months and states:
This reduction in project activity would have an impact on the planned fuel load and commerical operational dates...must be well understood as part of the decision process. (pg.I-1) 6.
On May 29, 1981, the Managing Director of WPPSS, Robert Fer-guson, asked the board of directors to slow construction on WNP-4 & 5.
The primary reason given was a continuing difficulty in financing the plants.
In his speech (Attachment B), Mr. Fer-guson states:
Quite frankly, funding the five projects at this $23.8 billion estimated cost level pre-sents a very, very difficult problem in today's financial market.
Completing all five projects at this budget level will require that we raise something in excess of $3 billion this year, and quite frankly, this challenges us with one of the most difficult funding programs in the United States. (pg.2) b
- 7. Mr. Ferguson also pointed to a "la'ck of public confidence" which he said has put MPPSS in the position of " carrying out this funding program during a period of uncertainty in this state and region"and "has contributed to the uncertainty in the bond market". He said the lack of confidence in WPPSS stemmed from activities of the Bon-neville Power Adminstration, the Pacific Northwest Utilities Coor-dinating Committee and the Regional Power Council:
All of these activities are before the pu-blic right now and have created a perceived uncertainty, not only for the need for the power from 4 and 5, but with these kinds of costs whether or not the people of this re-gion should be committed to paying $12 bil-lion for units 4 and 5.
...the uncertainty that has been created as to the need for power impacts the Supply Sy-stem dramatically in our daily operations, our credibility in the state, and in our a-bility to raise necessary funding. (Attach-ment B, pg.3)
He said:
...the (budget] numbers as they appear are just too large to handle without total com-mitment and support of the state and the re-gion. (Attachment B, pg.2) 8.
In conclusion he stated:
If we could reach a public understanding on this issue within six months, there is a very real possibility that we can hold the schedule (a one year moratorium] and cost estimates that we have seen today. (Attachment B,
pg. 5)
- 9. The WPPSS Board of Directors voted on June 16, 1981, to support the Managing Director's request for a one year moratorium on WNP-4 and 5.
10.
On July 21, 1981, WPPSS filed a letter captioned " Washington Public Power Supply System Nuclear Projects No. 1 & 4 Extension of Construction Completion Dates".
Such request listed the following primary reasons for delay in the construction of the plants:
1.
Changes in the scope of the projects inclu-ding increases in the amount of material and engineering required as a result of re-gulatory actions, in paticular those subse-quent to the TMI-2 acaident.
2.
Construction delays and lower than estima-ted productivity which resulted in delays in installation of material and equipment and delays in completion of systems neces-sitating rescheduling of preoperational testing.
3.
Strikes by portions of the construction work force.
4 Changes in plant design.
5.
Delays in delivery of' equipment and mate-vials.
11.
WPPSS Director of Nuclear Safety, G.
D.
Bouchery, continues in the letter:
... latest construction completion dates we are requesting for the purpose of construction per-mit duration reflect a reasonable allowance for uncertainty, which is appropriate given the po-tential for continued regulatory changes and la-bor difficulties.
again omitting any mention of cash flow difficulties affecting the completion date of WNP-4
- 12. A search of the documents contained in the Local Public Docu-ment Room and of the NRC Accession List, as of November 21, 1981, has failed to uncover any updates or revisions to the July 21, 1981 submittal.
CONCLUSIONS OF LAW
- 13. -Section 186 of the Atomic Energy Act of 1954 as amended (Act)
(42 USC 2236) provides, in part:
(a) Any license may be revoked for any material ~
false statement in the application of any state-ment of fact required under section 182...
14 North Anna, 7FRC 49S establishes the definition of ma-terial false statements within the meaning of Section 186 of the Act as:
i
...a communication, written or oral, likely to in-fluence the determination of a matter, which com-munication is not true.
7 15.
North Anna, supra, further establishes that ommissions or non-disclosures of material facts can contitute a violation under Sec-tion 186, saying in relevant part:
It seems clear to this Board that a failure to include material information in a submission to, or filing before, the Commission is so critical l
to the Commission's need for full di3 closure of l
information on which to base its independent safety recview that it may compromise a false
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and misleading statement.
cnd:
we conclude that Section 186 applies not only to written and oral statements but to ommissions as well.
- 16. Thus the failure of WPPSS to disclose the facts cited in para-graphs 5.
to 12. above in its July 21, 1981 request for " Extension of Construction Completion Dates" for WNP-1 & 4 constitutes a mate-rial false statement under Section 186 of the Atomic Energy Act of 1954, as amended.
RELIEF REQUESTED 17.
WHEREFORE, Petitioners pray that the Director, pursuant to 2.202(a), Order the Washington Public Power Supply System to show cause as to why the Construction Permit, No. CPPR-174, for WNP 4, should not be revoked due to material false statements made by the licensee in its July 21, 1981 submittal.
Respectfully submitted, t
sss }(
Nina Bell Coalition for Safe Power cc: Robert Ferguson, WPPSS Encls. (?)
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P'1 1#9 AWAmwt A u-ALTERNATIVE EVALUATIONS WNP-4/5
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ALTERNATIVE EVALUATIONS WNP-4/5 ABSTRACT This report contains an analysis of potential cash flow reductions that could be achieved at WNP-4/5 by a managed work force reduction over the next 16 months.
These cost deferrals would reduce the required level of financing now planned in that period for these projects, but the deferrals would also result in fuel load delays and associated project cost increases as well as additional costs for replacement power. The relative significance of these and other pertinent factors are dis-cussed in this report.
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INTRODUCTION E
i The purpose of this evaluatiort s_to examine _injuf_ficient_ detail _the i
options available to Supply System management _to_ selectively _teduce the
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project work at WNP-4/5 +o achieve a ran.ge of_ cost _ deferrals _whichC6 turn, would reduce the nece-term forecasted _ funding _r_equirements..Ihit
. reduction in project acti'. '.ty would have_an_ impact.on_the-planned fuel.
load and comercial operational dates _and the possible cost increases which could occur must be well understood as a part of the decision process. Later operational dates could also cause impacts to the Prof-ect Participants and others in the region with respect to loss of power production and the net increases in costs which might be incurred in purchase of replacement power.
I The evaluations which have been made and summarized in this report de-scribe two periods of planned slowdown at each project -- a six-month and a twelve-month period beginning April 1981. A range of activity levels all the way down to essential shutdown of construction was exam-ined for each situation (in all cases the engineering effort was main-tained at or near current planned levels).
Construction activities were examined on a contract-by-contract basis to determine the effect of various manning levels in achieving cost deferrals on each con-tract.
The composite was then examined to determine net cash deferrals and related impacts on fuel load dates.
All other significant perti-nent cost elements were also examined such that the final result is an ability to track cost deferrals with fuel load delays.
These fuel load delays result in increased project costs because of increased escala-tion and increased interest to fund the additional escalation and in i
extension of fixed costs including extended staffing. All three
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f actors -- cost deferral, fuel load delay, and project cost increase --
are then correlated.
Finally, the net cost increase due to purchasing replacement power is obtained to complete the analysis.
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SUMMARY
OF RESULTS The results of this evaluation are summarized in Chart III-1, Chart III-2 and Table III-1.
The charts are a cross-plot of data developed in the evaluation and indicate the cash flow reductions, the fuel load delays, and the project cost increases of either six-or twelve-month slowing down programs for each project.
The weeks of fuel load delay on the abscissa are plotted against the cash flow deferral (on the lef t ordinate) and against the project cost increase (on the right ordi-nate). As an example, for a six-month program as shown in Chart III-1, given a cash flow reduction goal of $100 million for WNP-4, it can be seen that this would cause a fuel load delay of about 34 weeks.
It can also be seen that a delay of 34 weeks would result in a project cost increase of about $260 million. The project cost increase is primarily due to the added escalation and associated added interest costs caused by the extended construction period.
In a like manner, data for a twelve-month program is displayed on Chart III-2.
The information far each project is independent of the other and it would also be possible to select a six-month program at one project and a twelve-month program at the other.
j Therefore, assuming the goal is a deferral of a specified quantity of i
money, various combinations of events at one or both projects for the same or different periods of slowdown can be selected.
The resultant fuel load delay at each project and the associated project cost in-l crease can then be determined.
The data can also be used 'n the other direction; i.e., for an inten-tional selected fuel load delay based on a reduction in construction effort, the approximate associated cash flow deferral and project cost increase can be determined.
It is interesting to note that while the project cost increases for a given fuel load delay are essentially the same for both projects, there l
is a marked difference in the amount of cash flow deferrals which are achieved for the same fuel load delay at each project.
For example, on Chart III-2, for a twelve-month slowdown program which I
results in a fuel load delay of 30 weeks, the cash flow deferral at
.EP-4 is slia_htly nvar (1gn mi11!cs(33% of the planned cash flow) whereas at WNP-5 the deferral is only abnut 170 million (17% of the planned cash'fiow).
This difference is due to two primary reasons.
First, the planned cash flow at WNP-4 is heavily dominated by construc-tion cost (52% at WNP-4 compared to 38% at WNP-5) while prepurchase contracts are a more significant f actor at WNP-5 (23% warsus 7% at WNP-4).
Only modest reductions (10%) in prepurchase contracts are believed possible in these slowdown scenarios, therefore, WNP-5 has less to offer in deferrals.
Further, although actual construction 5
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activity on WNP-5 was assumed to be reduced to a minimum in the extreme cases, the actual construction costs do not decrease proportionately at I
i-m WNP-5 for these reasons:
(1) a higher level of joint activity is
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planned; i.e., the WNP-3/5 haul road with half the costs flowing to WNP-5,'and (2) a number of contracts are in mobilizaton and, again, j
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by a reduction in specific activity on WNP-5.
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Another observation which can be made in reviewing these charts is that a given dollar deferral will have less impact on project schedules if F
the deferral is accomplished in the longer period program.
For ex-k ample, in a six-month program as shown in Chart III-1, a $100 million
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the schedule by only 14 weeks.
This heavier impact comes from two rea-sons:
(1) in a six-month slowdown there is a seasonal effect on some aork caused by pushing it into a winter period, but more significantly, (2) in extreme cases of work reduction, the remobilization delay is a heavier proportion of the total delay in a six-month program than it e
would be in a twelve-month program.
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The only information not i
taken directly from the charts is the Cost of Replacement Power.
This I
infonnation was developed by a separate analysis performed in part by R. W. Beck and 4ssociates.
In summary, it was assumed that a combina-s tion of secondary' energy in the region together with firm power pur-o chased from outside. the region would be the nQs *- r 44ve available 5
to replace the pher lost by fuel load ys in WNP) and b The tnm-p_csite' value derived from this analysis s $6 million per week h r each o
C proj ect.
This is a minimum value in th ange of possible ext al purchases considered.
From this cost, a.
u f TA per week t-for each' project would be avoided by not operating the projects and x,_
this is associated with fuel depletion and Operating and Maintenance F
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The resultant net cost of replacement power is at least $2 r
million per week for each project.
The example combinations on Table III-l indicate the total deferrals in cash' low which could be accomplished by the identified action on each p roj ect.
The associated fuel load delay, project cost increase, cost of replacement power and total cost increases are shown for each combi-p nation.
There is no particular significance to the specific cases shown -- they are only examples to demonstrate the way in which the
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impacts assodated with different levels of cost deferrals.
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It should be noted here that cash flow reductions refer to actual ex-il penses which could be deferred.
The actual financing deferred is larger
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_f because of the bond resolution requirement to set aside six-months interest from each bond sale and the Supply System policy to set aside what amounts to an additional two years of interest for each bond saie. At interest rates of 12 percent, this is equivalent to approxi-
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mately 30 percent of the proceeds set aside from each sale. When fi-l nancing costs are included, the net result is a need to sell at least j
$1.5 in bonds for every $1 available for actual construction expenses i
2 (including actual interest paid).
Therefore, a $200 million cash flow reduction represents a deferral of a minimum of $300 million of borrow-f ings.
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The data developed can be used to evaluate intentional cash flow reduc-tions in the expectation of possible lower interest rates for bond sales at a later date.
For example, in a case where interest rates rose as high as 15 percent and deferral was contemplated in hopes of large changes in interest rates -- say, down to 10 percent -- the fol-lowing analysis could be made and compared to the data developed in Table III-1.
For each $100 million sold at 15 percent, the levelized payback over 30 years is $15.230 million/ year. At 10 percent, this payback would be $10.608 million/ year. The difference is $4.622 mil-lion per year for 30 years. The present value of that stream of sav-ings depends upon the overall weighted average of borrowing on the project -- currently for WNP-4/5 this is 8.04 percent. Assuming it were 8 percent, the present value of $4.622 million per year for 30 years would be $52.0 million.
(If the weighted average rose to 10 percent, the present value would be $43.6 million). Using the higher figure of $52.0 million for each $100 million of borrowing, an example case can be considered.
For a $300 million deferral shown in Table III-1, it would be possible to defer $450 million in borrowing.
If this deferred borrowing could be placed later at a 5 percent interest rate savings, the present worth of that amount (at the time the proj-ects are ready for operation) would be $234 million.
This possible savings must be compared to the increased cost of $932 million due to the combination of project cost increases and replacement power costs in the same time frame.
Finally, a specific evaluation was made for a total twelve-month con-struction shutdown at both projects where only engineering and protec-
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tion of work in place continues.
This is summarized in Table III-1 and would result in fuel load delays of 71 and 62 weeks at WNP-4 and WNP-5, t
respectively.
The increased project costs would be $1,028 million and the cost of lost power would be $266 million for both projects.
Costs i
deferred would be $394 million.
Using the same assumptions as above, the combined deferral of $394 million in expenses ($590 million in bor-rowing) would result in a potential interest savings of $307 million.
This must be compared to $1,294 million in increases costs -- the ratio d
here of potential costs to potential savings is approximately 4 to 1.
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6-MONTH PROGRAM 2
CASH FLOW REDUCTIONS (DEFERRALS)
-i AND PROJECT COST INCREASES 500 VS. WEEKS OF DELAY
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TABLE III-1 POSSIBLE COMBINATIONS i
2 Fuel Increased Cost Total jj Load Project Replacement Cost J
Deferral Delay Cost Power
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$100M Deferral 5 75M #4 21 wks 5 160M 5 42M 5 202M l
6-Month Program 25 #5 15 wks 105 30 135 22 Totals.......
5100M S 265M
$ 72M S 337M
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$150M Deferral
$110M #4 39 wks $ 300M
$ 78M
$ 378M 6-Month Program 40
- 5 30 wks 200 60 280 Totals.......
$150M 5 520M TIY5R 658M f
$200M Deferral
$150M #4 29 wks $ 220M
$ 58M
$ 278M
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12-Month Program 50 #5 16 wks 125 32 157 Totals......
$200M S 345M
$ 90M 5 435M
$300M Deferral
$200M #4 44 wks $ 340M
$ 8SM
$ 428M 12-Month Program 100 #5 52 wks 400 104 504 Totals......
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740M
$192M 5 932M J
$400M Deferral
$290M #4 72 wks $ 560M
$144M
$ 704M 12-Month Program 110 #5 62 wks 485 124 609 T4'OdM 51,045M
'$76ER 51,313M d
Totals......
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$285M #4 71 wks $ 552M
$142M
$ 694M l
Shutdown - Both Projects 109 #5 62 wks 476 124 600 Totals......
5394M 51,028M 5266M 51,294M
- - Using 56M/wk each plant power value (understated)
-$4M/wk each plant fuel & O&M savings (overstated)
$2R/wk net cost of lost power - each plant (understated)
Att i..J.n.,,r a y, ! - e 5 m.
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Ferguson recommends WNP-4/5 slowdown Saying the decision was " pure
[ the need for power from these energy can be saved through conservation.
hell" to make, Managing Director 6, projects, Robert Ferguson has asked the Sup-In the next year alone, the Supply A recent energy forecast by the Pacific Northwest Utilities Confer-ply System board of directors to slow System would have to raise more down construction of units 4 and 5 than 53 biilion to continue work on ence Committee projects a decline all five plants, far more than the in power demand in the region.
for ony year.
Thefrecommendation came after Supply System has ever had to Finally, the Washington Legislature mandated that an independent study Ferguson drew the bottom line on a borrow before.
propoked fiscal 1982 construction "The numbers as they appear are of the feasibility and need for WNP-budget of $23.9 billion for all five just too large to handle without the 4/5 be undertaken.
nuclear power plants.
total commitment and support of the "We have to put that question Ferguson's surprise announcement state and region," Fergtison said.
(need for power) to bed," Ferguson May 29 set in motion a series of He identified several recent events told a press conference in Richland, high-level meetings throughout the that have created an atmosphere of WA. last week.
region as board members and parti-
" uncertainty" both with the public At the same press conference, cipants discussed and debated the and on Wall Street.
Ferguson indicated he pinned his recommendation.
They include a recent Bonneville main hopes on gaining the needed Supply System Board President Power Administration study indicat-regional consensus from the legisla-y Stanton Cain said the Ferguson ing a potentially large amount of tive study and from the new Regional Power Council.
recommendation was just that and "An endorsement of the council that the final deosions rest with the plus the study would go a long way 88 Participants that are owners of the InSide towards relieving the uncertainty two projects and with the board of that surrounds the 4/5 issue," he
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directors.
On June 10 the Supply Setem was g fgff (gy{ g[
- said, By law, the new regional council scheduled to submit its detaJed fergUSOn 5 must come up with an energy plan analysis of the budget to the board's for the Pacific Northwest in two Commmittee on Treasury. Finance.
speech, Page 3 years, but Ferguson expressed hope and Audits.
that the council would deal with the On the following day the commit-O tee was scheduled to make its report G fn[eryfew wjth 4/5 issue sooner.
Speaking before a subcommittee to either the hecutive Committee or 4/5 study of th; U.S. House of Representatives the full board.
The earliest that the board of head, Page 4 last week. BPA Administrator Peter Johnson urged that this study be directors could act on the slowdown completed in one year,"in view of would be at a special meeting of the board June 16. Cain uid.
9 FU// Speed the risk to the region's power supply and the extreme costs associated in making his recommendation.
ahead on WNP-2 with the prospective moratorium."
Ferguson repeated his belief that WNP-4 and WNP-5 will be needed Page 2 Johnson pointed out that BPA has a legal obligation under the regional to provide the electric power power act to meet the region's needed to ensure the economic well-being of the Pacific Northwest.
e Reactor parts electric power requirements.
Meanwhile. Ferguson stated he is But he said it would be entremely affiVe at committed to continuing construc-6 i
i difficult to raise the money needed to complete all five projects while SalSop, Page 7 tion of projects 1,2. and 3 as quickly and as economically as possible.
, people in the region are questioning 6
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Complete text of Ferguson's speech to board Mr. President, Ladies and (as well as experienced) inflation and you the 1981 budget as it now Centlemen:
interest costs, we have developed appears as a result of this extensive I appreciate your attending this the budget.
review process.
special meeting of rne roard Comparisons were also made of in addition we have also increased because I have a mou serious sub-ccrstruction production rates of our estimates using realistic numbers ject to discuss with you the has installing these materials with other for inflation and consequent wage developed just durmg the past two nuclear installations both in the and materials cost escalation to show weeks.
United States and abroad.
you our current FY-82 budget.
The subject is the FY-82 Budget.
These numbers have never been These are the cold, hard realities As you know..this is the first developed this accurately before.
we face.
budget I have developed for the The plant designs have not in presenting this large initial cost Supply System, and it has been a changed since I became managing estimate this morning,I am at the very difficult process. For that rea-director. I am just stating they were same time presenting a caution. I am son,I am departing from the budget not analyzed as thoroughly before, reminded of a discussion that I had presentation which you have pre-As an example, let me review with with Bill Anders, former AEC com-viously experienced.
missioner, and one of the first Namely,I am discussing the matter astronauts to fly to the moon. I had with you before presenting a formal 1982 Budget at the t,me just been assigned the budget which would only give you (Proposed) responsibility for completing the the choice to agree or disagree.
then troubled Fast Flux Test Facility I am involving the board in the gg at Hanford.
integration of budgetary policy mat-Bill asked me to be sore to give f "$M""""""""7 him a warning light if I saw signs of ters with budget formulation.
The reason for this departure from g
trouble.
past practices is that the budget as it Bottoms-up Adjustment This morning I am giving you a is developing for all five of our warning light.
nuclear power plants is very large.
Q
_ uite frankly, funding,the.fiye,
$3 just last Thursday, through the development process,I drew the External Impacts pr jects at this $23.8 billion esti-
, mated cost level presents a v_ery,,
bottom line on the total estimated q very difficult problem _in_to_da(s FY 82 budget for the first time.
I financial market.
Frankly, though I strongly support the need for bringing all five plants Un dentified Costs
- We not only have high interest.
rates, we have also seen a steady, j
on line at the earliest date and that
^
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movement of money from the long-the Pacific Northwest has the need i term bond market to the shorter-for the power from all five plants, P term market. This is a, period of' the numbers as they appea. are just c uncertainty not only for our funding too large to handle without total
$ bit for funding of sirnilarlInds~of"
-~
~
I rojects throughout the United commitment and support of the p
state and the region.
kStates.
~Why has the budget risen so
_ Completing all five projects. at this, dramatically?
budget level will require that we Because the budget I will present A
roved Bud et
'.e s mething in excess of $3 f 8
to you is one not based on wishes, billion this next year, and quite.
hopes or probabilities. This budget Trankly, this challenges us with one has been arrived at by going back
'of the most difficult funding pro-.
through each of the projects and determining as oblectively as possi-
' grams in the United States.
Moreover, we are' asked to carry
(
ble what the realities are.
f out this funding program during a l
By facing the realities of plant
' period of uncertainty in this state designs and the quantities of con-and region.
crete, pipe, and cable required to
, As you are all aware, we suffer, complete them, the time and labor whether rightly or wrongly, a lack of required to install these materials.
$ in Billions
. public confidence.
and realistic estimates of espected (Continued on pages 4 and 5) 3 i
L
~
pys cs s-POWER LINES Ferguso'n speech to board...
(Contsnued from page 3)
The PNUCC has published a draft and consulting Ae best experts in Just recently the legislature man-report which gives the impression the field of load forecasting and dated an independent study of the that the electric load forecast for the resource planning, units 4 and 5 will feasibility and cost effectiveness of region has dropped off the equival-in fact be needed to provide electric continuing projects 4 and 5 which, as ent of the output of our projects 4 power to ensure the Northwest's you have just seen, are estimated to and 5.
cost some 512 billion.
economic well-being.
In addition, the Regional Planning As I have stated many times Whether or not the state should Council has just begun its data before, forecasting electric demand undertake this study is not the issue.
gathering which will result, some is not the task of the Supply System The fact that it has contributed to the uncertaintfin the bond market.
two years from now,in a regional However, the uncertainty that has power plan.
been created as to the need for Because until the study is completed, All of these activities are before power impacts the Supply System about March of nest year, the the public right nowin'dMye, dramatically in our daily operations, financial cc,mmunity will not really created a perceived uncertainty not our credibility in the state, and in know that the people of this region only for the need for the power our ability to raise necessary recognize the need for and are from 4 and 5, but with these kinds of funding.
committed to building these projects.
costs (which I believe are still the in a recent town meeting at Another reality: The Bonneville lowest cost energy available)
Satsop, I was repeatedly asked ques-Power Administration has recently whether or not the people of this tions about the ability of the Supply published a study which indicates region should be committed to pay-System to produce on its commit-that potentially a great deal of ing $12 billion for units 4 and 5..
ment. There were sincere questions energy can be saved by conser-Now from everything i know and about the need for power.
varion.
believe and after analyzing the data These questions from the public ME.Td@T.
- 4/5 issue puts universit) rl N*
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q The office of Applied Energy Studies occupies a small i
cluster of rooms in one corner of a classroom building on g
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the campus of Washington State University in Pullman.
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undertaken a number of regional energy studies in recent g
years, including preparing the data base for the 1980 State 4.s of Washington Energy Profile.
gg None however is likely to have the long-lasting impact of hv -,<
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its new task which is to deterrrine the need and feasibility of continuing to build Washington Public Power Supply l
1,g System Projects 4 and 5.
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The Washington State Legislature last session mandated l
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3 Research Center through its affiliate at W5U, the Office of
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Applied Energy Studies.
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.3 Professor George Hinman, a physics teacher, heads the
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Graduate students and faculty members, however, will j
not be doing this study. The law mandates that " nationally 3
I g].ni recognized" energy experts be employed.
k_
- g t.*.dk Hinman said he expects the program proposal will be 9
ready for 1,id by early June and that the study could be well b
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4' George Hinman underway by mid-July, it must be completed by March, 1942.
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are honest and real, and I believe for what I consider to be one of the associated with this recommenda-that they need an answer.
most important factors that has not tion. There is a real risk that by not So today I am making a very yet been resolved, namely the kind proceeding there will be a shortfall difficult recommendation. But in of consensus and commitment that !
of power in this region in the future, making this recommendatien, which believe is necessary to all of us to There will also be a layoff in con-will invoke personal hardships, there successfully complete projects 4 and struction workers that willimpact will be some very positive end S.
the people in this state immediately.
results.
Therefore my recommendations Secondly, I recommend that the The first and most positive result are as follows:
board take this opportunity and use of implementing my recommenda.
First, continue to construct, as this interim one-year period to con-tion will be an unequivecal commit.
expeditiously as possible, projects sult with involved parties (partici-ment to build projects 1,2, and 3 1-2-3.
pants, investor-owned utilitie", direct with a_ realistic cost and schedule
,And that the board grant me service industries, BPA and the estimate which also has the real authority to implement an imm,e-regional council) regarding the potential for improvement.
diate construction moratorium on, region's need for power.
Also, there will be the opportunity
)VNP 4/5 for one year, while submit-I would hope that some resolution to reduce the public's fear of com.
ting a budget for FY-82 consistent could be brought to this important mitting ta an obhgation of some 524 with this action, need for power issue within six billion.
This particular action will allow us months, and rn longer than one What I recommend will also dem-to fund projects 1-2 3 with fewer year.
onstrate the contribution of projects difficulties and with full concentra-And third,I eequest the authority 4 and 5 to this state in terms of jobs, tion of effort thereby gaining the to negotiate equitable cost sharing in terms of real investment for the very real possibility of improving on with affected parties as it relates to future, and in terms the public can the completion dates of these three the moratorium.
understand.
pla nts.
(Continued on page 6)
It will also provide an opportunity I am painfully aware of the risks energy office in the limelight it is expected to be primarily an economic study, to recommend "whatever seems appropriate " Hinman answering the basic questions of need. costs and schedules, said.
Hinman said.
Hinman has been a faculty member at WSU since 1%9 Managing Director Robert Ferguson's recent recommen-and has also served as director of the university radiation dation to impose a one-year moratorium on building of center and environmental research center.
units 4 and 5 shoulJn't alter the scope of the study Prior to coming to WSU, he spent six years working for significantly, he said.
General Atomics Corp. of San Diego, a private company "I see no reason not to go ahead as planned," Hinman that supplies reactor parts for the nuclear industry, said.
"!'m not anti nuclear; I've always felt that the technology The program proposalis broken dcwn into five parts:
is reasonable. " Hinman said.
needs and alternatives, finance, cost and schedules, impacts He added, however, that he believed the nation could of temporary power surpluses, deficits and rate changes, get along without nuclear power if it has to.
and power imports and exports.
The main issue is cost. "I see no reason not to use it The contractor chosen to do the cost-schedule module, unless it becomes too expensive," he said.
for example, will likely interview Supply System officials.
Hinman and the subcontractors hired to do the study will the administrative auditor, Senate Inquiry investigators and be working with a special rene-member steering others to come up with an independent estimate.
committee.
Similarly, the finance module consultant would go to the Dr. Peter Shen, the Supply System Technical Director will financial community to find out how interest rates and represent the Supply System on the Committee, and Ray market conditions affect the Supplv System's ability to Foleen will represent the Participant's Committee. The continue funding the two plants.
other members have not yet been selected.
At the conclusion of the study, the office must come up with a recommendation. The legislature left it to the office Story and photo by Todd Crowell 5
I s
py oM POWER LINES Ferguson speech to board...
(Continued / rom page 5) do. And now, as each of you I cannot make the recommenda-I {we could reach a public under-individually has felt the frustration of tion for a moratorium without, at the
- standing on this issue within six this moment, I know you will under-same time, saying that with your months, there is a very real possibil,
stand the saddening shock which support and the state and regional gthat we can hold the schedule now overwhelms me as I draw the support on the need for power that
- and cost estimates that we have seen bottom line on this cost estimate.
we can successfully bring all five
'today. I cannot tell you at this time Reluctantly, I reached the conclu-plants on line within schedule and what the net cost for slowing con-sions and recommendations I have budget.
struction on 4 and 5 will be. But I just outlined. For even now we are I cannot be less than honest with must urge this body to resolve the achieving new production records you, and I must be honest with nsue of the need for projects 4 and on the very projects that I propose myself about this very real problem.
5 at the earliest possible date ther-we bring to a temporary halt.
I took this job to succeed...and eby making the impact on our Our new productivity records we can succeed.
public as small as possible.
reflect the stability we have been Our success is not to be drawn Allow me to close by saying this able to bring to labor, to contract-from others, rather, it will be built presentation, and these recommen-ing, to engineering and to financing, on the foundation of today's reality dations, have been pure hell for me.
The restructured management and by constructing real-world generat.
For the past lu months,I have contracting at the Suppiy System is ing capacity from hard, cold, facts spent eve y waking hour dedicating yielding new benefits. And these and data.
myself to ampleting these projects have been coupled with the strong in this alone we will build for t? a at the earliest possible date and at support we received from the legis.
future.
the lowest possible cost. I assure you lature. Let me say these revelations I would hope that you concur in tha. the management staff feels as I come very hard.
my recommendations.
Facts about Projects 4/5 Key dates Washington Public Power percent of the capability held Supply System units 4 and 5 are by utilities in Washingte r. state.
being' built in the state of WNP-4 is located at h.aford
- June % Tentath date for special Washington to meet power in Eastern Washington and is meeting of the Supply System needs forecast for the Pacific designed to have a generatin_,
Board of Directors.
Northwest by the end of this capacey of 1240 megawatts. It decade.
it 22 pe cent complete.
- June 13--% Negotiations begin for The two projects are jointly Construction ma,agement bond issue to finance construction financed and backed by agree-responsibihty for the project of WNP-4/5.
ment with 88 publicly-owned was awarded to Bechtel Power utilities and the Portland-based Corp. in Oct.,1980 replacing private utikty, Pacific Power United Engineers and Con, o July 24, Supply System 1oard of and Light, known as struction which continues to Directors approves 1982 construc-Participants.
support engineering and some t on budget.
8 Each participant is responsi-construction services. Approxi.
ble for making payments to the mately 3,300 people are Supply System for its share of employed on the project.
e March,1982, independent study of g,
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the plant costs as revenue WNP-5 is located in Grays bonds come due. Bonds sold Harbor County, Wash., about so far for the two projects 66 miles southwest of Seattle.
currently total 52.25 billion.
Construction is 13 percer.t Participation in the two pro-complete. Approximately 1,420 jects encompasses a seven-state people are employed on the l
area, with approximately 70 project.
I i
6
Anodment C 'm I?cP 4 G,
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Washington Public Power Supply System P.O. Box 968 3000GeorgeWashingtonWay Richland, Washington 99352, (509)372 5000 July 21,1981 e.q' @g T '/@
G01-81-206 NS-t-GCS-81-199 11 D)dh u
tMp g 2 8'i3B F a.g Docket Nos.: 50-460 50-513 2
Mr. Harold R. Denton, Director Office of Nuclear Reactor Raquiation o)
U.S. Nuclear Regulatory Commission G
Co a
Washington, D.C.
20555
Dear Mr. Denton:
Subject:
Wtshington Public Power Supply System Nuclear Projects No.1 & 4 (WNP-1/4)
Extension of Construction Completion Dates The Supply System requests amendments to Construction Permit Nos.
CPPR-134 and CPPR-174 for WNP-1 and WNP-4 to extend the " latest completion dates" for WNP-1 and WNP-4, pursuant to 10CRF50.55(b).
Construction Permit No. CPPR-134 currently specifies January 1, 1982, as the latest date for completion of construction for WNP-1 and Construction Pemit No. CPPR-174 currently specifies December 1,1985, as the latest date for completion of construction for WNP-4.
For the reascns set forth below, the Supply System submits that good cause exists to extend the latest completion date for construction permit CPPR-134 to June 1,1986, and to extend the latest completion date for construction pemit CPPR-174 to June 1,1987.
Subsequent to the issuance of the construction pemits delays in the construction of WNP-1 and WNP-4 have occurred.
The primary, factors causing. these.. delays are as follows:
1.
Changes in the scope of the projects including increases in the amount of material and engineering required as a result of regulatory actions, in particular those subsequent to the TMI-2 accident.
{2.
Construction delays and lower than estimated productivity
}
which resulted in delays in installation of material and
{
equipment and delays in completion of systems necessitating rescheduling of preoperational testing.
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-sto72,Orvr e10721 PDR ADOCK 05000460 A
PDR a.
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E lt Extension of Construction Completion Dates Page 2 l
3.
Strikes by portions of the construction work force.
4.
Changes in plant design.
5.
Delays in delivery of equipment and materials.
In estimating new completion dates for WNP-1 and WNP-4, the Supply System has carefully examined the impact of the delays described above on the construction schedules for both units. Also, while the official completion dates are December 1985 and December 1985 for WNP-1 and WNP-4 and while we hope to improve on these dates, the June 1, 1986 and June 1, 1987, latest construction completion dates we are requesting for the purpose of construction permit duration reflect a reasonable allowance for uncertainty,Jhich is appropriate-i given the potential for continued regulatory changes and labor =~~
.d_i f fi cul ties.
Since these arrendments involve no significant safety or environmental 3
considerations, the Supply System requests that the Commission dispense with advance notice of the amendment, pursuant to Section 18S(a) of i,
the Atomic Energy Act of 1954, as amended. 42 USC 2239(a)
Accordingly, the Supply System requests, pursuant to 10CRF50.55(b) that the Nuclear Regulatory Commission amend Construction Permit No. CPPR-134 to specify June 1,1986 as the latest date for completion of WNP-1 and amend Construction Permit No. CPPR-174 to specify June 1, 1987 as the latest date for completion of WNP-4.
The request ugarding amendment of Construction Permit No. CPPR-134 is a Class II amendment, as it has no safety or environmental signifi-
['
cance and is a matter of formality and administrative in nature. The request regarding amendment of Construction Permit No. CPPR-174 is a Class I amendment as it is a duplicate of an amendment for a second essentially identical unit at the same site where both proposed amendments are received, processed and issued at the same time. See i
10CRF170.22.
Enclosed, therefore, are two checks. One is in the amount of $1,200 for the Class II Amendment and the second in the ar.ount of 5400 for the Class I Amendment.
I 4
I
P@ 3 l
l Extension of Construction Completion Dates Page 3 s
The Supply System recently filed a request.with the Comission_for_
a full refund of all fees paid to the NRC.by_the Supply System,_and, noted its intent to pay any future fees under_ protest /until,that request is resolved (see letter of R.L. Ferguson to Chairman Palladino, July 13,1981). Accordingly, we hereby remit the fees prescribed by 10CRF170.22 under protest and subject to refund upon resolution of our request.
Very truly yours, h
f G. D. Bouchey,W;or Nuclear Safety GDB:pp 4
Attachment - Notarization cc:
CR Bryant, Bonneville Power Administration - 399 R Hernan, luclear Regulatory Commission AW f'edici, United Engineers & Constructors, PA - 04U3 r;S Reynolds, Debevoise & Liberman FDCC - 899 L
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g4d4 EXTENSION OF CONSTRUCTION COMPLETION DATES STATE OF WASHINGTON)
Subject:
) ss COUNTY OF BENTON
)
I, G. D. BOUCHEY, being duly sworn, subscribe to and say that I am the Director, Nuclear Safety, for the WASHINGTON PUBLIC POWER SUPPLY SYSTEti, the applicant herein; that I have full authority to execute this oath; that I have reviewed the foregoing; and that to the best of my knowledge, information and belief the statements made in it are true.
DATED h,1,21 /9 T /
, 1981 V
cl J
MmM
~G.
D. BOUCHEY d
On this day personally appeared before me G. D. BOUCHEY to me known to be the individual who executed the foregoing instrument and acknowledged that he signed the same as his free act and deed for the uses and purposes therein mentioned.
GIVEN under my hand and seal this V* day of
'ul., _.
, 1981.
G_
fW)lic in a%for the a.uuoJ Notary Puq State of Washirjgton Residing at ke b
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