ML20038B950
| ML20038B950 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 12/01/1981 |
| From: | Ellis J Citizens Association for Sound Energy |
| To: | |
| References | |
| NUDOCS 8112090348 | |
| Download: ML20038B950 (6) | |
Text
W M##N 12/1/81 C,ASE'S RESPONSE TO APPLICANTS' ATTEMPT TO LIMIT CONTENTION 25 TO ONLY COVER OPERATING COSTS n
. 'f2 I E *' -
In their 11/24/81 Trial Brief on Contentions 9, 25 and Board Question 2 ~(page 8, i
footnote 2), Applicants state:
. "At the prehearing conference on December 1, Applicants will as thboNd P1 :10 to confirm that the scope of Contention 25, in accordance with its h
plain meaning, is limited to the issue of financial qualifications to 7 m ar.Y operate Comanche Peak, and does not involve financial qualifications to!. SEiiVICE d ecommis s ion."
WD CASE has always been aware that Applicants would have to include decommissioning costs and nuclear waste costs in the costs of operating Comanche Peak, and we have always considered our contention in that context.
In our answers on 2/17/81 to the NRC Staff's First Set of Interrogatories to, and Request for the Production of Documents from, Intervenor CASE filed 1/19/81, CASE provided the following information:
Question C25-1. " State specifically those requirenents of the Atomic Energy Act which you contend have not been met because of what you contend to be Applicants' lack of financial qualifications to operate the proposed facility."
Answer:
"42 U. S. Code Section 2232(a):
'Each application for a license hereunder shall be ia writing and shall specifically state such information as the Commission, by rule or regulation, may rietermine to be necessary to J
decide such of the technical and financial qualifications of the Applicants,
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the character of the Applicant, the citizenship of the Applicant, or any other qualifications of the Applicant as the Commission may dean appropriate
~T for the license. '"
Question C25-2.
" State specifically the requirements in 10 CFR 2 art 50, Appendix C which you contend have not been met because of what you contend -
to be Applicants' lack of financial qualifications to operate the proposed facility."
Answer:
"'The kind and depth of information described in this guide is not intended to be a rigid and absolute requirement.
In some instances, additional pertinent material may be needed. In any case, the applicant should include information other than that specified if su :h information is pertinent to establishing the applicant's financial ability to construct and operate the proposed facility.'
'The Commission reserves th: right,
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f ~l $oitever, to require additional financial information at the construction by permit stage, at the operating license stage, and during operation of
(\\r the Yacility, particularly in cases in which the proposed pner generating-
/S'.(i 45 11ty will be commonly ownal by two or more existing compaaies or in u,1ch1 financing depends. upon long-term arrangements for the sharing of the over from the facility by two or more electrical generating companies.'
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' Sect $ n 50.33(f) requires that all applications for operating licenses.
3 show that the applicant possesses the funds necessary to cover estimated i
' N/g goperating costs, or has reasonable assurance of obtaining the necessary N s funds, or a combination of the two.
In addition, each application for
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a license for a facility other than a medical or research reactor is required to show that the applicant possesses or has reasonable assurance of obtaining the funds necessary to pay the estimated costs of operation for the period of the license or for 5 years, whichever is greater, plus M
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tha c timated crtc of p;rmanently chutting down tha fccility cnd main-caining it in a saf e condition.
For purposes of the latter requirement, it will ordinarily be sufficient to show at the time of filing of the b
application, availability of resources sufficient to cover estimated operating costs for each of the first 5 years of operation plus the esti-mated costs of permanent shutdown and maintenance of the facility in safe condition.'"
Questic.n C25-3.
" State specifically what is meant ' by the phrase ' financially s
qualified' as it is used in the contention."
Answer:
"' Financially qualified' in this contention means able to adequately comply with the regulations referencal in C25-2 above and the requirements of the Atomic Energy Act, as amended,10 CFR 50.57(a)(4) and 10 CFR 50, Appendix C."
Question C25-4 "What do you contend Applicants must do to demonstrate that they have met the requirements of the Atomic Energy Act, as amended, and 10 CFR Part 50, Appendix C with respect to their financini qualifications to operate the proposed facility?"
]
Answer:
"See answer to C25-2 above. Satisfactorily answer CASE's questions and prove that Applicants have financial integrity and are financially qualified to operate CPSES."
Question C25-5.
"What is the basis for your response to Interrogatory C25-4?"
Answer:
"The Atomic Energy Act, as amended,10 CFR 50.57(a)(4) and 10 CFR 50, Appendix C."
Question C25-6.
"What do ycu contend is necessary in order for the Commission to make the finding, pursuant to 10 CFR 50.57(a)(4), that the Applicants are financially qualified to engage in the activities authorized by an operating license? State the basis for your position in this regard."
Answer :
"See answers to C25-2 preceding; make certain that the questions raised by CASE are accurately and completely answered satisfactorily; make the Applicants prove that they have financial integrity and are financially qualified to operate CPSES."
Question C25-7.
" State specifically the basis for Contention 25."
Answer:
"See answer to C25-5 above."
Both Applicants and NRC Staf f have now confirmed that decommissioning costs f
will have to be included in electric rates, as CASE had assumed. This means that such costs will in actuality be a part of the continuing operating costs of Comanche Peak, to be recovered as a part of the utilities' operating expenses in the form of depreciation rates.
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In tha pr& filed dircct tc timony of Applictnto' role witn:2s on financini qunli.
fications, Erle A. Nye, the following is stated on page 5:
"Q.
What are the estimated operating costs for Comanche Peak?
"A.
Estimates of the total annual costs of operating and maintenance expenses for both Comanche Peak units are set forth in Table 20.1 in the NRC Staff's Safety Evaluation Report, NUREG-0797 (July 1981)...For conserva-tism, the estimates are presented for plant f actors of 50%, 60% and 70%.
These estimates include all costs associated with the capital investment, taxes, and operation and maintenance (including nuclear fuel). Decommission-ing costs are included as a component of depreciation expense."
(Emphasis add ed. )
And on page 6, it is stated:
" Operating and maintenance costs, including depreciation and capital costs, are properly recovered through rates charged electric customers. Such treatment for. Comanche Peak will be requested from the Texas PUC."
(Emphasis added.)
Further, NRC Staff's Motion for Summary Disposition of Contention 25 (Financial Qualifications), filed 10/28/81, specifically addresses decommissioning as one of the items regarding which the Staff alleges there is no factual issue requir-ing adjudication upon a hearing (page 13, paragraph 2 co' tinued to page 14, and n
Statement of Material Facts As to Which There Is No Genuine Issue to Be Heard, items 8 and 9, pages 3 and 4).
It is also specifically addressed in the 11/20/81 4
NRC Staff Testimony of Jim C. Petersen Regarding Financial Qualifications (Con-tention 25)(pages 8 and 9) and in the 11/24/81 NRC Staff's Trial Brief Regarding Contentions 9 and 25 and Board Question No. 2 (pages 13 and 14).
It is apparent that the NRC Staff is treating CASE's Contention as though it includes decommissioning.
l Applicants' statement in their 11/24/81 Trail Brief of their intention to attempt-to further limit consideration of CASE's Contention 25 to somehow exclude decam-missioning costs and financing was a surprise to this Intervenor.
It is obvious that, not only have they deliberately chosen not to address decommissioning in rate hearings, but they want to avoid having to address decommissioning in these proceedings as well. CASE urges that the Board deny Applicants' motion.
Applica nt s ' latest maneuver to avoid dealing with decommissioning costs and fit.ancing has now raised a new question which needs to be addressed in these proc eeding s.
If decommissioning costs are not to be included by Applicants in rate hearings as operating costs through depreciation, just exactly how do Applicants think they will be able to get them ircluded in electric rates by the P which,UC7 There is certainly no statement in State laws or PUC regulations 3
indicates that decommissioning costs under any other guise will be allowed.
Since the Comanche Peak plant is to be the first nuclear power plant in the State of Texas, decommissioning costs have never had to be really considered in rate cases before. There is no guarantee at this time that Applicants will be able to get decommissioning costs included in electric rates under depreciation or anything else. Applicants own past efforts to avoid the subj ect of decommission-ing costs in rate hearings (see CASE's 11/18/81 Answer to NRC Staff's Motion for Summary Disposition of Contention 25, pages 13 thrmagh 22) may in itself make such inclusion more difficult now.
-4 Indeed, there is soma qucstion in CASE's mind as to the proper inclusion of decommissioning costs in depreciation rates; and it may also be questionable in the opinions of the PUC and/or the cities retaining original jurisdiction over electric rates. The Texas PUC's Substantive Rules state:
"052.02.03.031 Rate Base (a) Rate Base The rate base is the adjusted value of the invested capital used and useful in rendering service to the public. Components to be included in determining the overall utility rate base.are as follows:
(1) Adjusted value of utility plant used by and useful to. the public utility in providing service; adjusted value shall be a reasonable balance, as provided by the Act, between original cost less de-preciation and current cost less an adjustment for both age and condition...
(3) Working capital allowance to be composed of but not limited to the following :...
(B) Reasonable prepayment for operating expenses; and (C) A reasonable allowance up to one-eighth (1/8) of total annual operations and maintenance expenses, excluding allowance for (A) and (B) above. Operatiens and maintenance expenses do not include depreciation, other taxes or federal income taxes. The amount -of operations and maintenance expense may be reduced for fuel expense, depending on the method of passing fuel cost to the consumer and for other items.
(b) Original Cost Original cost is the amount of money actually paid (or the money value of any consideration other than money exchanged) for property at the time when it was first dedicated to the public use.
(c) Reserve for Depreciation Reserve for depreciation is the accumulation of recognized losses in service value, of the original cost of an item or facility not restored by maintenance, caused by age, wear, tear and obsolescence.
Depreciation shall be computed on a straight line basis over the expected useful life of the item or facility...
(e) Adjustment for Age and Condition For rate making purposes, depreciation expense, including accumulated depreciation on original cost, and the adjustment for age and condition on current cost shall be consistent with each other.
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"052.02.03.032 Coat of. Service (a) Cost of Service Cost of service is equal to that amount of revenue required to (1) cover all reasonable and necessary expenses properly incurred by -
the utility in rendering service to the public and (2) provide a fair and reasonable return on the adjusted value of invested
' I capital used and useful in rendering such service. Cost of service shall include but not be limited to the following:
(1) Operations and maintenance expenses incurred in furniishing normal utility service and in maintaining utility plant used by and useful to the utility in providing such service; (2) Depreciation expense based on original cost and computed on a straight line basis as approved by the Commission..."
It is not clear from the PUC rules exactly where decommissioning might fit into the electric rates charged to ratepayers. As indicated in CASE's 11/18/81 Answer to NRC Staff's Motion for Summary Disposition of Contention 25, Applicants Juve successfully avoided the subj ect of deconnissioning costs and how they will be handled in rate hearings. Therefore, Applicants are not now able to claim with any degree of certainty that they will be able to charge decommissioning costs to ratepayers through depreciation. They may make bald assertions that this will be the case, but certainly their assertions are not binding on the regulatory bodies which will ultimately make the decision regarding such costs.
CASE believes that it is more probable that the Texas PUC will institute hearings on a -generic basis to determine the proper method of including decommissioning costs in the ratemaking process.
It may be that it will even require the passage of a State law in this regard.
CASE does not know for certain -- neither do the Applicants or the NRC Staff.
In any event, CASE urges that the Board deny Applicants' request to unreasonably.
limit CASE's Contention 25 to exclude decommissioning costs.
Respectfully submitted, Mrs.)i Juanita Ellis, President CASE (Citizens Association for Sound Energy) 1426 S. Polk Dallas, Texas 75224 214/941-1211, work, usually Tuesdays and Fridays only 214/946-9446 9
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of I
APPLICATION OF TEXAS UTILITIES 1
Docket Nos. 50-445 GENERATING COMPANY, ET AL. FOR AN 1
and 50-446 OPERATING LICENSE FOR COMANCHE 1
PEAK STEAM ELECTRIC STATION 1
UNE TS #1 AND #2 (CPSES) 1 CERTIFICATE OF SERVICE By my signature below, I hereby certify that true and correct. copies of r A w ' c. 1?/1 /81 Response to Applicants' Attempt to Limit Contention 25 to Only Cover Operatine Costs have been sent to the names listed below this ist g,or December 1981, by I1XE1XG11EEymailXing11yxn3ul@30L%.E==digiAXXtfh62MX1HREEMMEXHyXMX Hand Delivery where indicated by
- and First Class Mail elsewhere.
Administrative Judge Marshall E. Miller (David J. freister, Esq.
o U. S. Nuclear Regulatory Commission Assistant". Attorney General Atomic Safety and Licensing Board Panel Environmental Protection Division Washington.
D.
C.
20555 P. O. Box 12548, Capitol Station Austin, TX 78711
- Dr. Kenneth A. McCollan
--.- Dean Division of Engineering, T,. Marshall Gilmore, Esq.
drehitecture and Technology 1060 W. Pipeline
- Road Oklahoma State University Hurst, Texas 76053 Stillwater, Oklahana 7W74 Dr. Richard Cole, Member' Atomic Safety and Licensing Atomic Safety and Licensing Board Board Panel U. S. Nuclear Regulatory Commission U. S. Nuclear Regulatory Commission Washington, D. C.
20555 Washington, D. C.
20555
- Nicholas S. Reynolds, Esq.
Atomic Safety and Licensing Debevoise & Liberman Appeal Panel 1200 - 17 th S t., N. W.
U. S. Nuclear Regulatory Commission Washington, D. C.
20036 Washington, D.'
C.
20555
- Marj orie Ulman Rothschild, Esq.
Docketing and Service Section Office of Execut'ive Legal Director Office of the Secretary U. S. Nuclear Regulatory Commission U. S. Nuclear Regulatory Commission Washington, D.
C.
20555 Washington, D.
C.
20555 HAO',v [h T)ASE (Citizens Association for
/ frs'. ) Juanita Ellis, President Sound Energy)
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