ML20039C700

Coordinated Response to NRC & Applicant Answers to Petition to Intervene.Contentions Should Not Be Dismissed.Portions of Testimony & Certificate of Svc Encl

ML20039C700
Person / Time
Site:	Limerick
Issue date:	12/11/1981
From:	Hershey S CEPA, HERSHEY, S.P., KEYSTONE ALLIANCE
To:	Atomic Safety and Licensing Board Panel
References
NUDOCS 8112300055
Download: ML20039C700 (10)

Text

{{#Wiki_filter:l ty1Nf UNITED STATES OF AMERICA *j DEC M NUCLEAR REGULATORY COMMISSI N . ~ r r cr.E ~ ',. _ l fi SEM .aMCH BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of PHILADELPHIA ELECTRIC COMPANY DOCKET NOS. 5 -35 $ Y' .C- 'h g (Limerick Generating Station, 2/ C Units 1 and 2) + pL {;, D L t' <3.,, - 1 q, - wlI ,..r '~ g \\l ^/ COORDINATED RESPONSE OF \\- ,.j/ CEPA AND KEYSTONE ALLIANCE \\ hf TO STAFF AND APPLICANT'S ANSWER N. CEPA and Keystone Alliance have coordinated the following. response to the Answers filed by NRC Staff and the Applicant. I. Contention II-1, Need for Power Substantial relevant new information is now available which changes the factual premises considered at the construction permit hearings. PECO has made numerous efforts to sell Limerick or its capacity (see Attachment 1, transcript excerpted from Pennsylvania P.U.C. Docket No. I-80100341), implicitly acknowledging that they do not need Limerick. S lf ( l DO 05 o 2 g PDR s

4 A At the time of the construction permit efflication, PECO fore-cast such increase in demand that there would be, they claimed, blackouts if Limerick were not built. Such growth has failed to take place and the present growth rate is flat. The 1981 peak demand on the PECO system was no larger than the 1974 peak! The population and economic decline of the service territory have changed the circumstances since 1974 and contributed to the flattening of growth. Other factors contributing to that change, which are likely to continue over the life of Limerick, are the popularity of conservation and other alternative energy sources and custcmer reac-tion to price (price elasticity of' demand) which is much greater than anticipated by.PECO during the permit hearings. Demand growth is so flat that PECO will have tremendous excess capacity should Limerick be completed, a development which is the reverse of PECO's forecast at the permit hearings. Lukens Steel Company has recently filed a petition with the Pennsylvania P.U.C. requesting permission to purchase electricity from Pennsylvania Power and Light instead of PECO. Lukens is PECO's second largest customer. Alternative sources of energy have become significant alternatives to Limerick since the permit hearings when they were not even consid-ered. Price increases for electricity since 1974 have made conserva-l tion, solar, hydro, cogeneration, and waste to steam cost-effective alternatives to Limerick, partly because technological developments i t l. _.,- _ _ _

since that time have also improved their viability and marketability. Section 210 of the Public Utilities Regulatory Policies Act, passed since the permit hearings, has created incentive for development of these alternative sources. Technology advancements have also greatly improved the energy efficiency of-the most important home appliances, contributing to the reduction in demand growth; this latter trend can be expected to accelerate with the introduction of new.models now-being test marketed and the expansion of the Japanese sales of these appliances. These alternative : sources of electricity are all environmentally superior to Limerick and must, therefore be considered, as acknow-ledged by both the Staff and the Applicant. II. Contention III-1, Financial-Qualifications The financial condition of PECO is so serious that, ac-cording to PECO's vice president for finance, Mr. Joseph Paquette, the company will not be able to complete Limerick unless granted extraordinary treatment by the PUC (which will not, of course, gua-rantee that even that special break with traditional regulatory prin-ciples will be sufficient). A copy of the transcript fram the pre-viously cited PUC Docket is Attachment 2 in support of this contention..

III. Conclusion It would be inappropriate to foreclose development of these contentions at this stage of the proceedings. The contentions are relevant to the proceedings on the operating license and are to be developed by information significantly different frcm information available at the time of the hearings on the permit application. Respectfully submitted, STEVEN P. HERSHEY, ESQUIRE Attorney for CEPA /.

I 488 t l g 1A C N &% 6 I l 1 l 1 1 believe Mr. Paquette has been sworn. l 1 e 2 Whereupon -l 3 JOSEPH F. PAQUETTE, JR. t i at 4 having been duly sworn, testified as follows: l 5 BY MR. YOUNG: j l 6 g Does that oath apply to the testimony you've already l 1 l given? 7 7, 8 A Yes. 9 MR. YOUNG: If Your Honor please, we would like to i i a i i 10 have identified as PECo Statement number 9 Mr. Paquette's i l l 11 testimony for the purpose of this proceeding. i 12 JUDGE KLOVEKORN: Without objection it will be so 7 %s 13 identified. j 14 (Whereupon, the document was marked as PECo Statement No. de 15 9 for identification. I 16 MR. YOUNG: Mr. Paquette is available for cross-3r 17 i examination. I tas JUDGE KLOVEKORN: Mr. Sayre? 18 I to CROSS-EXAMINATION l i { 20 BY l'o, SAYRE: 1 ir G Good morning, Mr. Paquette. 21 22 A Good morning. i g 7 m sure you know I represent the Trial Staff. 23 ' 24 A Yes, sir. Will Philadelphia Electric be able to finith Lirerick on t!e ..e 25

t i. 489 L L \\ i j /C Forecast 5 schedule without some kind of unusual rate treat-{ V 2 ment, such as interest expense above the line? r l Iy l I 3 A. Based on current economic factors we probably won 4 1 i 1 be able to attract all the capital needed to complete Limerit 4 1 unless we are granted an exceedingly high rate of return on b 5 I .s t equity er some alternative new rate making technique, suchaj 6 k 7 CWIP'and rate base or the interest adjustment which we have 3 in the current rate case; something of that magnitude to' allow us to improve our interest coverage ratio *, and to be a'a 9 I } to attract the capital necessary. to 11 G And 'if you were not granted such rate trea tment, g the equity return that you would~ require would be something q 12 %1 ~ 33 the order of 20 percent? A. It could be that high. I've not do'ne a recent stuc I4 15 but with interest rat'es the way they are today, in the area 15 percent for debt, it could well be close to that number,: 16 Of course, that is not much higher than what we arc 17 which is 16 requesting in the current electric rate case, I8 percent and which I've seen some financial writers recommend ID that it should be the goal for utilities in today's market 2 21 we should be shooting for something closer to 20

anyway, 22 to properly compensate investors today.

f g If you assume that the Commission, for the sake of 2 k '- ) 24 i i this question, grants Philadelphia Electric something in the i 25 [ neighborhood of 15-and-three-quarter percent return on equit) s O

w xa m m mm e r,.srans w - - - m - - - 1 292 d-6 'll Q, . d-r 4.D A M W (,6 1 4 11R. HALL: Objection, Your Honor. Mr. Kasum is ] u 2 a System Planner. He is not responsible for the company's programs with respect to dealing with customers or informing 3 l customers of options for electricity u:, ages, either more 4 ' )I efficient or less efficient usage, or for marketing in any way. J 6' s 7 MR. HERSHEY: Who would be the appropriate wit. mess? l 3 MR. HALL: Mr. Hock would have some knowledge. i i 6 Mr. Williams would have other knowledge. This would depend upon the nature of the question as to who would be most MA.. 10

44 appropriate to answer.

p 11

,u 12 BY MR. HERSHEY: w a Q Mr. Kasum, you indicated t. hat the PJM reserve } I3 14 requirement is 22 percent, and then there was an additional h. is that correct? requirement based on company performance; 15 4 hw i 16 A Yes. II And that based on PECo's company performance, O hv is My { your reserve requirement had been raised to 25 percent; h?$ I s j d 19 ji that correct? i' a ) ?j 't lr. 20 ! A That is correct. bt g$r;w g Q Now, would 22 percent indicate better performance 21 t h6 .s r ll [] i; e., l than 25 percent? 'j h ~~ h A 3es. [j E Q It is true, isn't it, Mr. Kasum, that PECo has been 2' 'f g 5

attempting to sell the capacity of Limerick?

-,c a m m e m w w w. - - m, p74 293, 2 / d( A Yes. 2 0-At page 11 of your testimony, you compare - you t indicate that Limerick will save over $3.98 billion over a ~ ten year period; isn' t that correct? i. A Yes. I 6 O What assumptions did you make in making that i gcomparison? 8 First, to what was that compared? u, A To doing nothing. i 10 ' Q And simply buying or using your own oil-fired? 11. A Yes. l 12 1 Q What capacity factor did you assume? 13 A This comes out of Mr. Lawrence's testimony, and 14[ perhaps, except for saying what numbers I took 'out of his il is !! exhibit and what I did to them to come up with the S3.98 h. 16;. million, I suspect that he should be questioned on the O 17dassumptions, etcetera. Il 33 Q Let's go through with what you did with hic M numbers? 20 A All right. ii 21 1 Do you have Exhibit KGL-l? ...,'\\: '~ O Yes. 1. I

i 4 '

~ If you look a t Schedule Number 2, the rightnand column or number 4, we see that without a Limerick generation and without replacement, we sce a nun 6er 42 in the increase

\\ g3 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSIO4uw 28 P3.06 oi i SEC ? @c_ .g BEFORE THE ATOMIC SAFETY AND LICENSINGiBOARD' In the Matter of PHILADELPHIA ELECTRIC COMPANY DOCKET NOS. 50-352 50-353 (Limerick Generating Station, q Units 1 and 2) J CERTIFICATE OF SERVICE Copie.s of the foregoing have been mailed this date to the following parties: i Lawrence Brenner, Esq., Chairman Mr. Edward G. Bauer, Jr. Administrative Judge Vice President & General Counsel U.S. Nuclear Regulatory Commission Philadelphia Electric Company Washington, DC 20555 2301 Market Street Philadelphia, PA 19101 Dr. Richard F. Cole Administrative Judge Troy B. Conner, Jr., Esq. U.S. Nuclear Regulatory Commission Mark J. Wetterhahn, Esq. s Washington, DC 20555 Conner and Wetterhahn 1747 Pennsylvania Avenue, N.W. Dr. Peter A. Morris Washington, DC 20006 l Administrative Judge t U.S. Nuclear Regulatory Commission Mr. Charles Bruce Taylor Washington, DC 20555 24 West Tenth Avenue Collegeville, PA 19426 Mr. Frank R. Romano j Air and Water Pollution Patrol Mr. Marvin I. Lewis 61 Forest Avenue 6504 Bradford Terrace Ambler, PA 19002 Philadelphia, PA 19149 Atomic Safety and Licensing Atomic Safety and Licensing Board Panel Appeal Panel (5) U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Washington, DC 20555

.. Docketing & Service Section James M..Neill, Esq. Office of the Secretary Associate Counsel for Del-Aware U.S. Nuclear Regulatory Commission Box 511 Washington, DC 20555 Dublin, PA 18917 Environmental Coalition on Walter W. Cohen Nuclear Power Consumer Advocate Dr. Judith H. Johnsrud, Co-Director Office of Attorney General 433 Orlando Avenue 1425 Strawberry Square State College, PA 16801 Harrisburg, PA 17120 Thomas Gerusky, Director Robert W. Adler Bureau of Radiation Frotection Assistant Counsel Dept. of Environmental Resources Commonwealth of Pennsylvaniar DER 5th Floor, Fulton Bank Building 505 Executive House, Third and Locust Streets P.O. Box 2357 Harrisburg, PA 17120 Harrisburg, PA 17120 Director Randall Brubaker Penna. Emergency Management Agency Assistant Counsel Basement, Transportation & Safety Commonwealth of Pennsylvania, DER Building 1315 Walnut Street, Room 1200 Harrisburg, PA 17120 Philadelphia, PA 19107 John Shniper Joseph H. White, III Meeting House Law Bldg. & Gallery 11 South Merion Avenue Mennonite Church Road Bryn Mawr, PA 19010 Schuylkill Road (Rte. 724) Spring City, PA 19475 Alan J. Nogee Robert L. Anthony The Keystone Alliance Friends of the Earth of the 3700 Chestnut Street Delaware Valley Philadelphia, PA 19104 103 Vernon Lane, Box 186 Moylan, PA L9065 Robert J. Sugaxman Del-Aware Unlinited, Inc. Judith A. Dorsey, Esq. Berle, Butzel, Kass & Case Limerick Ecology Action 2115 Bainbridge' Street 1315 Walnut Street, suite 1632 Philadelphia, PA 19146 Philadelphia, PA 19107 Donald S. Bronstein, Esq. William A. Lochstet The National Lawyers Guild 119 E. Aaron Drive l'425 Walnut Street, 3rd Floor State College, PA 16801 Philadelphia, PA 19102 ( A ~.. Dated: December 11, 1981 STEVEN P. HE RS HEY, ESQUIRE N y A _}}