ML20049H239
| ML20049H239 | |
| Person / Time | |
|---|---|
| Site: | Clinch River |
| Issue date: | 01/15/1982 |
| From: | Feld S Office of Nuclear Reactor Regulation |
| To: | Rathbun D NRC OFFICE OF POLICY EVALUATIONS (OPE) |
| Shared Package | |
| ML20049H240 | List: |
| References | |
| FOIA-82-272 NUDOCS 8201300066 | |
| Download: ML20049H239 (1) | |
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Dennis Rathbun, OPE FROM:
Sidney Feld, AEAB
SUBJECT:
COST SAVIflGS ASSOCIATED WITH EARLY SITE PREPARATI0t1 ACTIVITIES - CRBRP As you requested I have reviewed the DOE cost estimate for the CRERPh In this review I assumed that as a consequence of early site preparation activities all future expenditures will be made earlier by one to tao years.
Given DOE's planned uxpenditures over the period 1982 - 1994 and an assumed 8'; per year escalation, monetary savings of between$120 - 240 million could be achieved.
However, real resources savings will not be achieved.
The same real resources (nuantities of steel, cement, labor, etc.) will still be required whether initial site preparation begins in the 1982 or 1983-84 time period.
Furthermore, in an economic sense the real resource costs will actually rise.
The DOE cost analysis gives no weight to the time preference of money.
DOE ignores interest during construction because from an appropriations standpoint the interest paid by the government is not charged against the CR account.
- evertheless, interest is in fact being borne by the government and this does represent a real (opportunity) cost to the nation.
Thus, a shif t in costs closer in time, as proposed here, will result in a larger real net cost to society.
In a r.onetary sense, hcwever, DOE is correct.
The total coney costs of the project will be lower if work begins in 1982 than if it begins in 1983 or 1984.
I DOE's response to itRC Question 320.7R, fiovember *18,1981.
a Sidney Feld Antitrust and Econonic Analysis Branch Division of Engineering i
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