ML20054K424
| ML20054K424 | |
| Person / Time | |
|---|---|
| Issue date: | 06/27/1977 |
| From: | Case E Office of Nuclear Reactor Regulation |
| To: | |
| Shared Package | |
| ML20054K420 | List: |
| References | |
| FOIA-81-432 SECY-77-355, NUDOCS 8207020059 | |
| Download: ML20054K424 (169) | |
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MUcLEAR REGULATORY COMht SSloN v
comww Mnwfrea SECY-77-355 hy
_fi m e 77. 1977 f '
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The Connissioners m
21 From:
E. G. Case, Acting Director, Office of Nuclear yg Reactor Regulation d[#
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W Thru:
Executive Director for Operations A
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Subject:
ALTERNATIVE HEANS TO ADDRESS NEED FOR BASELCAD FACILITY 33
Purpose:
In response to the request of the Secretary to the Commission to Lee V. Gossick, April 25, 1977, to
$vb infom the Connission as to the staff's current
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method of treating. the questions of conservation and the need for baseload facility in power reactor
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policy options for the future treatment of this issue.
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,..U Category:
This paper coyus a major policy question.
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1 Issue:
Whether the Comission should continue with the 4
'My present practice of having the NRC staff make
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independent NEPA evaluations of need for baseload facility in individual cases, pursue some generic i
a treatment of one or more aspects of the issue, or 1
propose legislation to rely on State determinations eq of need for facility.
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Decision Criteria: The criteria that should be considered by the Comission
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in making a decision are:
j 1.
Costs to the public should be commensurate with effectiveness in protecting environmental values.
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2.
Alternatives must be reasonably capable of p
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1 3.
The licensing process of NRC must be improved,
'or at least not substantipily impeded.
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.p Halcoln L. Ernst, NRR
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c E.
s Alternatives:
A.
Continue the present practice of having the NRC I
make independent evaluations regarding need for baseload facility in each application for a nuclear E
J B.
Initiate rulemaking in one or more areas to E
Jevelop guidelines for scope of treatment and criteria k
3 for decisionmaking on this issue so that tests of reasonabler.ess can be applied on a nore specific and W
vilsh unifonn basis.
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Participate in regional hearings regarding need for baseload facility in an attempt to remove this Na issue from case-by-case decisionmaking.
D.
Consider methods to make better use of State expertise on this issue in NR.'s decisionmaking process so as to avoid unnecessary NRC duplication i
of effort to the maximum extent possible.
' 15 E.
Propose legislation in this area to rely on f5... !$3 State determinations regarding need for baseload 9%
$g.h facility and thus avoid any Federal duplicat 'on of State analyses and :'acisionmaking.
CW'N F.
Adopt a suitable mixture of the above alternatives.
FrM 4
.e. e p N' -VO iT Discussion:
The issue of need for power was discussed previously M
in SECY-75-64. Enclosure A provides a sumary of that staff paper. At that time, rulemaking was
.M[f suggested by SD, but NRR and HMSS did not concur Tim since they preferred continuation of the ad hoc gg c
approach.
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Since that time we have addressed adequately, with few delays, the question of need for baseload 99p a substantial expenditure of public resources.g at yriM facility in fr.dividual licensing cases, althou M
"$@p However, the following points would cause one to j
reflect regarding the future course that should be taken by NRC:
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- Enclosure C is a copy of the staff's draft Environmental Standard 54v y@3d Review Plan, which details the type of analysis now perfonned in that 1
(f area for a CP application.
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b The changing factors affecting need for o
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facility are becoming better understood, M
although many are still controversial and subject to much speculation.
States are expanding the scope and depth Jg of their need for facility analyses.
h Although there is no explicitly documented comprehen-4 sive NRC policy statement in the area.of need for 3
facility, ihe staff, the Boards, and the Comission g1 have attempted to implement a consistent regulatory Sj approach to this issue, which can be construed to be y
de facto comprehensive policy. This policy is j'{4 Escribed below, since it forms the basis of what
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the NRC function is perceived to be in this area.
On It is the policy of the NRC with regard to need g%
for a proposed nuclear power plant to establish
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whether there is a reasonable likelihond that
.?,9 there will be a need for baseload generating 25 capacity within several years of the proposed W
comencement of comercial operation. If there W
is, and if the ensuing environmental impacts A
are deemed acceptable on a cost-benefit basis, the alternative of not constructing baseload
'O capacity woula not be a viable NEPA alternative, since the question then is not whether envi-ronmental impacts will be incurred, but rather when they will be incurred.
The NRC does not attempt to pass judgement on p/l the precise year of need, since the NRC recog-3 nizes the various uncertainties involved in y
forecasting the future. Also, there art. Other factors that could influence a utility's n
decision to add baseload capacity, such as the 3
economics of power systems planning and load W
management and a desire to diversify fuels used within the system.
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Q The RRC has interpreted NEPA and the Calvert Cliffs' I
decision as requiring a consideration of the need 3
for the nuclear facility as a condition for licensing.
This role was greatly expanded as a result of the Hine Mile Point 2 and Midland At.AB decisions, which
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contain directives to include a treatment of energy E
4 conservation. The technical staff has developed l
anclytical approaches that are designed to be an independent responsible check on the applicant's forecasts. The basic approach to the issue has been j
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to compare these independent staff forecasts of growth in demand to those of the applicant and to thereby reach t conclusion as to the reasonableness of the applicant's forecast. Other issues such as impending natural gas shortages affecting a utility have been treated where applicable.
At this time, it is appropriate to reconsider from a policy standpoint the appropriate level of analysis 4
and the manner in which this issue should be treated, W
having dealt with the need for the facility issue adequately in the past on a case-by-case basis, although perhaps not with optimal efficiency.
In considering alternatives to the present way of e EJO treating the need for facility question, the follow-j.;CW ing staff conclusions should be kept in mind:
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Under NEPA the NRC must explore appropriate alternatives, including the alternative of not Myy
[?!iMh building the facility. While the NRC is required to make findings relative to need, these findings should only address the general likelihood of need fy g within the approximate timeframe of the applicant's 70 sh proposed date of commercial operation. NRC's dk!
responsibilities under NEPA do not extend to assuring
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financial strategy in their capacity construction Md i
plans as a condition of license.
di.W 2.
While there is a NEPA function to be performed tWP
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in the review of need for baseload facility, the
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degree of the Federal government's oversight of Q%
industry in this area becomes questionable whenever MT the environmental impacts of alternatives are igj,95 5
@ffy essentially compr.rable and the major question rests E
on the timing as to when these impacts shall be U-h w
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capacity when needed. One of the prinary NEPA 3h functions in this situation thus becomes one of t/M whether any significant options are foreclosed by TC too early a decision.
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The financial comitment that a utility must hd make to construct a nuclear power plant, combined K
with the regulatory approvals that must be obtained Wh k
from the State, makes it likely that there will be d.
reasonable justification that a plant is needed within the general timeframe of the date of opera-k((
tion proposed by the applicant, hfj 4.
While the Calvert Cliffs' decision does require Mik the NRC to make independent evaluations and judgments, f@Kj iG there is nothing in that decision that wo;1d pre-clude the NRC from utilizin State information and expertiseinthisanalysis.gj Where State decisions W
to grant Certificates of Public Convenience and M
Necessity are supported by reasonable, independent Qi analysis of need for baseload facility, the question g
Q arises of whether the costs to be incurred by the y
public are commensurate with the diminishing degree M
of environmental protection afforded.
4;
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5.
In the past, NRC consideration of the various aspects of need for facility have likely had a a
a salutary effect in highlighting items of growing i.~.:
national concern ;uch as conservation, fuei diversi-
,9 fication, energy cost, ratesetting, and st.bstitution.
Due to increasing national attention and accunulating analyses of those itms, however, it is not likely 7,y that NRC's continuing treatment will have a reasurable future salutary effect.
A 6.
Although the question of conservation is of S
great interest today, it is only one of several yi important parameters affecting the need for baseload t
facility. The realizable impacts of additional O
conservation on electric demand over the next 10-15 years will likely come slowly, and the magnitude and D a 2f nclosure D is a copy of a letter to Mr. Golloop of the State of New E
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York conceptualizing what might be accomplished with NRC/ State
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cooperation. The response back from the State was very positive and initiatives are being pursued with New York in this area.
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likelihood of any change will depend strongly on the programs, mandates, and incentives that are actually successfully implem*nted, and for which NRC has no jurisdiction. Examples of issues that have a potential for impacting the need for baseload facility are provided in Enclosures B and E.
Based on the detailed discussion in Enclosure B, the following is a sumary of the pros and cons of various alternatives.
Alternative A - This alternative is that the NRC should
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.j continue with current initiatives regarding improving its A
methodology to address important issues such as conservation.
l The pros and cons of this alternative are summarized below:
3 P_ro : (a) The eventual outcome of any proposed legisla-Q r
tion and/or of rulemaking would be uncertain, thus the status quo should be viably maintained.
s (b) Issues have been identified that are likely to rE be even more contenticus in the future that
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need generic research (such as conservation).
Y TKm (c) The staff has demonstrated a capability to reach 4%
decisions in this area.
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M: (a) This course of action, taken alone, is likely
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not cost effective in the long term for NRC.
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w :s (b) This course of action would be duplicative of Jyb what many States do now in their analyses, and
.fiy States are likely to improve their efforts in 95M this area in the future.
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},&ia Alternativc B - This alternative is that a rulemaking 4Q
$jflA should be initiated on various aspects of the determination
- i of need for baseload capacity.
yq#p The staff would consult with CEO, the States, and others
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g[@yy and then recomend whether a rulemaking should be proposed, lt j
detail the scope of any proposed rule, and recomend o
whether a public hearing should be held on any proposed
.l rulemaking. The staff believes that detailed methodology rev+
should not be the subject of the rulemaking. Ratter,
^4F what meld be desired would be guidelines for the scope tM of treatment and criteria for decisionmaking appropriate p' ' if, k- ?
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1 t for the need for baseload facility detennination for CP's Tj and OL's, and an identificat. ion of the decisionnaking d
fN-criteria appropriete to reopen the issue once an LWA 'or a CP has been issued.
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For example, delineation of the degree of accuracy with 1s U'l which an applicant must predict the actual year of need for the plant would serve as a decisionmaking teol of substantial benefit to NRC's current practice. Another Q@.
example is that the staff believes that definitive cri-teria could be developed for the reconsideration of the need for facility question after a substantial investment W
of capital has been made in the construction of the h.d facility. Thus rulemaking could perhaps provide a better definition of the criteria important to possible reopening 4]
of this question so that tests of reasonableness can be hil applied on a more specific and unifom basis at, fer M
example, the OL stage. A tMrd example is that rule-b 4(TF making could treat ways ar.
Ins to incorporate, to the 9
extent legally possible, State data, expertise, and
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$3 recocinend that these issues could not be resolved by 9
rulemaking (i.e., that a generic resolution of the l
problem is not reasonably possible).
9 The pros and cons of this alternative are sumarized 71 below:
pro: (a) It is not clear that any proposed legislation would be enacted; and, if not, the establish-if:_,
ment of scope of treatment and the basis for decisionn3 king for CP's and OL's in the rules aM would be of benefit to the NRC and to the il
- public, c,;q,1 (b) Even if legislation were eventually enacted, the public record developed in the ruleraking would be of benefit to the States in their o
treatment of this issue.
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Con: (a) In many areas the rulemaking would be difficult and would have to be carefully scoped to obtain g
a bottom line that would be useful.
r Uld (b) In some areas the manpower expended might not be cost beneficial in the exercise of NRC's l,,g
!! EPA responsibilities; however, it could be p}j; cost bir.aficial to States and other parties to 6
develop mb a full and public record.
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-a Alternative C - This alternative deals with NG partici-h) pation in regional hearings. The staff believes that, kj$
while the NRC should be receptive to any requests to g[W participate in regional hearings, the NRC should not take i
2 the leed in any such hearings, since the subject would involve al types of generating capacity. /$1 s0, if such hearings are held, the NRC should take appropriate steps to try to make the determinations from such hearings dispositive of the need for baseload facility issues in W:E subsequent applications for nuclear po,.er plants, other-wise the NRC manpower expended would yield little benefit in the discharge of NRC's licensing responsibilities.
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The pros and cons of this alternative are suonarized below:
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hWikl P_ro : (a) Such regional planning efforts could have Qg-decisionmaking value, if structured properly.
90
$$W (b) Such regional planning has social value to d
f.@r which HRC cculd contribute.
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-Con: (a) Unless very carefully structured, the NRC M
2,M78d manpower expended in regional hearings could carily exceed the manpoer that would have been fj expended on individual cases.
(b) Authority to utilize the results of such hearings
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would likely require rulemaking.
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V+;c Alternati re D - This alternative is to ccntider making 4'o ???
better use of State expertise in NRC's decisionmaking "T
process so as to avoid unnecessary NRC duplication of
{h effort to the maxir.cn extent oossible. Currently, NRR is
&c s working with the State of New York to explore the possi-sj,3 bility of utilizing State expertise and analyses in NRC's fys ng
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.h review and decisionmaking process. Other States have
$f also expressed interest and will be'following the New N<
York negotiations with interest.
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The pros and cons of this alternative are suninarized g"
below:
jh N: (a) A number of States are interested in coopera-3Hg -
tive review efforts, and these efforts would jjy also have benefit to the States in the event
{g that legislation is enacted.
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(b) This would be an exemplary action to improve State cooperation.
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,g (c) The long tem effects could be a substantial y r,J reduction in NRC resources in this area by the phi appropriate utilization of existing State hi expertise and analyses.
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.1 Con: (a) There would be a front-end increase in NRC 7
staffing requi.ed in this area to negotiate on c
M I a technical and legal basis the appropriate utilization of State expertise.
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(b) There would be a risk of occasional State /
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confrontation, since the NRC would responsible for judging the adequacy 3:,'
..e resultant State analyses.
9J (c) Unless carefully structured and implemented.
Y there would be litigative risks associated with iT argumerts involving a possible invalid delegs-JJ tion of NEPA functions to the States.
1 ~:e 90 Alternative E - This alternative is that the Atomic
?Y h1 Energy Act be araended to pemit the need for baseload facility detemination to be made by the States individu-U;9%
ally or in combination, or by Federal power marketing Q',j agencies (in consort with the affected States), subject C
to reliability requirements of the Federal Power Act o
ff (ref. huREG-0195, " Improving Regulatory Effectiveness in y:. ~
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A Federal /StateSitingActions,"). This m uld have the<
l effect of amendhg NEPA in this area of NRC's review.
.y The legislation recornended in NUREG-0195 also inbludes
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provisions for regional planning regarding need for power 6~
and the location of the site, provisions for the States to perfom environmental assessnents under Federal guide-lines, and other recocre,endations. Any discussion in this staff paper regarding State certification of need for power should not be construed as being necessarily opposed to the broader recomendations in NUREG.0195.
I However, while core sweeping regulatory reform may have merit, the staff would also not be opposed to a narrowing s
of any refom to encompass only the need for powr issue and various other procedural changes, if it was deter-mined that Icgislation to implement other reforms would
.+-
likely not be enacted or might not be useful at this time.
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NUREG-0195 makes reference to the criteria that the States should follow as a conditian of a delegation to perfom environmental assessments. With regard to any delegation of
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need for baseload facility to the States, the staff would recommend identifying in the legislation some general criteria that should te addressed by the States in their gyj evaluations. The staff would also recornend no Federal NEPA E
overview function in the area of need for baseload facility, since if general criteria are established in the legisla-
- Qif, tion, reasonable implementation would likcly be achieved g,;
through appropriate political and legal processes at State M
level s.
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C The pros and cons of this alternative are sumarized.
below:
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Pro: (a) Elimination of unnecessary duplication of
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effort by State and Feceral agencies, since g
States have inhe*ent powers in this area that
- g they are currently beginning to exercise in a M
more extended, in-depth manner.
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(b) Savings of NRC, applicant, and other public
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resources by eliminating an independent Federal review that has little social value today, g
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The Commissioners %A r) recognizing that it previously had a salutary l @
effect primarily in that it highlighted areas of subste.ntial national importance.
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(c) The timitig appears good for the submission of
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such legislation.
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Con: (a) If legislation regarding need for baseload 4,
facility is tied t_co, tightly to the overall o
s question of acceptance of environmental assess-f ments perforined by States under Federal guide-y.
ifnes, tt.e chances of enactment would be lessened.
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(b) There would he some opposition to need for i
facility legislation, since it would be per-ceivec at. a dilution of Federal au.hority under g.:;ff)
NEPA, particularly if general criteria for the e
States to follow were not included.
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Alternative F - This alternative is one that considers a
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mixture of the abose alternatives. There are various sub-alternatives under this, with their own individual pros and D, V:.06d Alternative A and E only. While this has merit and wculd cons. h r example, one siternative would be to proceed with
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not tend to dilute any legislative initiatives with rulemaking N
t ' )3 initiatives; it wot.ld not be a progressive recomendation, since NRC would be relying on legislative refom and wuld be 37.t's dormant regarding rossible improvecents in regulatory effec-
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tiveness under its existing statutcry require-ents. Alter-y,..,
natives A, B, and E could be I. :rsued sia.rltaneousi) with g"
considereble rnerit, but this has disadvantages in that botn legislation and rulemak'ng might ultirately prove to be not a
viable alternatives, which muld nean that NRC would have lost vali.able time with regard to fr:: proving its capabilities for ad hoc response to contentions in this area, and would
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not be in position to draw usefully upon existing State
- i, expertise to reduce unnecessary dupitcation of effort. The staff considered various mixes of the above alternatives,
("3 and detemined that the most useful mix night be sfruttaneous W'
implementation of Alternatives A B, C, D, and E, with the g
expressed points of emphasis, as follows:
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Alternative E is the most appropriate path to follow at this time.
2.
Alternatives B, C, and D should be implemented also, since the tining or even ultimate success of Alterna-tive E is not predictable.
3.
Alternative A must be followed in any event, pending the outcore of any of the other alternatives.
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The actual decision to ir.plee. ant Alternative B (rulemaking) should be contingent on the outcorre of the staf f ef forts (including discussions with CEQ, the States, and others) to define explicitly the proposed rules to be considered.
The pros and cons of implementing Alternatives A, B, C, D, and E as described above are sumarized below:
.l Pro: (a) Legislation appears to be by far the most c
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cost-effective way to proceed, since it elimi-nates any duplication of NRC and State ef forts in this area for those States that conform to the requirenents of the legislation, h
c 1 (b) Rule.aking has the potential for establishing Trfy the decisionmaking criteria in a fomal manner, NM which could improve the effectiveness of fiRC's pfb reviews in this area. Even if legislation were enacted subsequent to rule'..aking, the pubile pp record deveioped could be of use to the States, i'yn (c) Working with the States and participating in 33 any regional hearings could be of benefit to M;
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either NRC or the States whether or nat legis-lation is subsequently enacted.
idk d@Z (d) In sumary, most of the advantages of all the alternatives are achieved by proceeding simultaneously.
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Cm: (a) If Alternative E had a high probability -)f M
success, there would be significant fiRC re-sources saved by not proceeding simultaneously M
with Alternatives B, C, and D.
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Alternative E is the most appropriate path to follow h
at this time, f,i 2.
Alternatives B, C, and D should be implemented also, 9
since the tining or even ultimate success of Alterna-
! j tive E is not predictable.
3.
Alternative A must~ be followed in any event, pending g, 3 6
the outcome of any of the other alternatives, m.
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The actual decision to implement Alternative B
'Wf (rulemaking) should be contingent on the outcome of
@gg the staff ef forts (including discussions with CEQ, the States, and others) to define explicitly the eg proposed rules to be considered.
' h The pros and cons of implementing Alternatives A, B, C, jp D, and E as described above are sumarized below:
a.s.[
M: (a) 1.egislation appears to be by far the most W
cost-effective way to preceed, since it elimi-3-l nates any duplication oi NRC and State efforts i
in this area for those States that conform to the requirerents of the legislation.
i8
[~f7 (b) Rulemaking has the potential for establishing l.
the decisionnaking criteria in a formal manner, ef which could improve the effectiveness of NRC's reviews in this area. Even if legislation were enacted subsequent to rulemaking, the public 3,
H record developed could be of use to the States.
P,
?. i (c) Working with the States cnd participating in any regional hearings could be of benefit to 4'
t either NRC or the States whether or not legis-lation is subsequently enacted.
J (d) In sunnary, most of the advantages of all the L
l alternatives are achieved by proceeding simultaneously.
- (a) If Alternative E had a high probability of Co,:
a%
success, there would be significant NRC re-Q sources saved by r.ot proceeding simultaneously with Alternatives B, C, and D.
q I
7.-
a
{
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(*M*ff*"*"r3 f.7 % M e""_ W 00 0_At 5, 5**N U ?, A & N = N
- ~~
1 I
ll a
.wv fM The Commissioners e d
(b) -Rulemaking initiatives (Alternative B) could be
^
perceived by some to dilute legislative efforts; however, the staf f would not be prepared to offer any rulecuking proposal until fall of v
1977, and at that time a better judgment could h
be made regarding the likelihood of success of i-3 the legislative initiative.
?
Recomenda tions:
That the Comission:
l 1.
Approve Alternative E
/
2.
Note:
,m 11 a.
That Alternatives B, C, and D will be j
implemented by the staff, pending enact-ment of any legislation under Alternative E.
f
~)
w
,t b.
Alternative A will be continued until such time as NRC's statutory requirements are altered.
9
+
L c.
Any specific proposals for rulemaking V
9 k@.3'Gk (Alternative B) from the staff will be p%
considered by the Comission at a subseqtent time. Such proposals will be develope 1
~ hd.A after suitable discussions with CEQ, W;T'JP States, and others.
. 1T1 f! %
Coordination:
The Offices of Nuclear Reactor Regulation Standards
.M i
Developrwnt, Nuclear Material Safely and Safewards, hMN"I j
and State Programs concur in the recommendations.
WM The Executive legal Director has no legal objection
@ hj to the recomendations, g[L;jf <
+-
OGC/0PE coments are responded to in Enclosure G.
2[{WY The OGC coments were aimed at the implementation of
't Aeschliman, and staff is currently improving its treat-
~fl:jY ment of conservation as noted in Enclosure B.
OPE c45 concurs in the staff recomendations and believes that
- .gQ'n the staff should place significant near-term emphasis hjg%
A on Alternative B, since AEA law changes in Alterna-
.3 tive E will likely take some time to implement and, x,4 thus, must be viewed as a long run solution.
1,r]
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N The Cc mtssioners I
's Scheduling:
This paper was requested by the Comission. The staff hj is prepared to discuss this paper with the Comission at
!k its convenience. It is anticipated that this paper will be scheduled at an o efI eeting (in fth;0GC concurs)
M at a future date.
/
k
'Ib 4
l9, Edson G. Case, Ac ing Director nd Office of Nuclear Reactor Regulation f
p
- y/
Enclosures:
,, :N A.
Sumary of Previous Commission Decision Mjj on Purpose of Facility G'y B.
flRC Staff Analysis of Alternative Means to Address Energy Conservation
('.C,,
ia and Need for Baseload Facility C.
Draft Environmental Standard Review Plan on Necd for Baseload facility p;.
D.
Letter dated March 28, 1977, to Mr. Lawrence A. Gollomp from gK Harold R. Denton P
E.
Memorandum, Shapar to Case, " Discussion of Energy Conservation and
.i Related Alternatives In Environmental Statements," dated 6/10/77.
F.
Value-Impact Assessment i
G.
OGC/0FE Coments DISTRIBUTIO?4 Comissioners Comission Staff Offices Exec Dir for Operations Secretariat 97j
- i
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N StM4ARY OF PREVIOUS C0ffilSSION DECISION 6j
[
ON PURPOSE OF FACILITY s
1 j
W A.
INTRODUCTION On December 9,1975, the Commission considered a policy paper en s
the subject of " Standardizing the Factors which Constitute the ' Purpose j
- of the Facility,' and Element of the Cost Benefit Analysis in Environ-mental Impact Statements" (SECY-75-648). The purpose of the paper was a
C to address the alternative means of fulfilling the requirement under the National Environmental Policy Act (NEpA) and Part 51,10 CFR that the 9
' Purpose of the Facility' be evaluated as part of a cost benefit analysis s
h w
of an applicant's proposal to construct and operate a nuclear generating g
l';
w station. The alternatives discussed were rulemaking, the present case-3Q;.f
,mm,((.'
by-case appreoch, and the proposal of new legislation. The Comission decided to continue present policy of a case-by-case review but to consider bb'd
'(?$$$
f in the future the possibility of remedial legislation.
VOj:
Wh Background Issues q..a g n
Prior to 1973, the methods used by applicants and the staff to iq$
forecast electrical demand were not substantially challenged by intervenors.
fb
&!)
However, an emphasis on conservation of energy, unstable ecoromic condi-43 R%
tions, and other general concerns of intervenors resulted in contentions
,WlE M~ C in the construction pennit review for some stations. In June 1974, a OfS) n:va.
- . ~:C m:;u, 1
Enclosure "A"
?C.,(
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petition for rulemaking was filed by the Sierra Club rcquesting that the
%.W AEC require that applicants for construction permits and operating
[h licenses for nuclear power reactors include price elasticity of demand 61 studies in their Environmental Reports.
m e@k Technical Issues Associated with SECY-75-648 sh b
A r smber of technical issues in the analysis of need for a facility fV; were mentioned in Enclosure A of SECY-75-648. Among th'ese were the Qn
- j;z following:
.y Ig; 1.
Adequacy of forecasting techniques for long range planning.
W 1Dy 2.
Effect of future energy prices and other factors on forecast of
- f')
Eli energy needs.
3.
Effect of rate structures on forecast of electricity demand.
,[, C
' llu 6fy 4
Effects of energy conservation and fuel substitution on electrical 9:
7._
energy demand.
5.
The possibility of proroting energy conservation through the altera-tion of methods of operating individual generating units or systems of
'n a
units.
,'.J 6.
Effects associated with differences betwen a regional need and a
{g'h local need for power.
- .1E The paper did not address these technical issues in any depth.
Rather they are mentioned primarly to indicate the complexity of any analysis of need for facility.
Alternative Courses of Action All alternatives (rulemding, legislation, and continuation of the 4
case-by-case apprcach) were assumed to include policy level discussions n.
2 Enclosure "A"
.W N M
-e g
a g
g jgga bmm Mb w r 's.. < h' o[,g%
w
. )
Q initiated by the Nuclear Regulatory Comissior:, between the Council on
[
Environmental Quality, the Federal Power Comission, the Federal Energy
)
Administration, NRC, and other interested Federal agencies to ensure that the final NRC policy rccognized and considered the pertinent authorities of the agencies and the pertinent aspects of Federal energy policy.
l Rulemaking would establish one or more accer. table methodologies for evaluation of the " Purpose of the Facility" and/or define the anticipated l
future demand for electricity on a national or regional basis. It appeared i
\\
to offer the best prospect for minimizing contested issues having a l@
potential for licensing delays and duplication of effort since the rule would resolve some issues that would otharwise need to be resolved in case-by-case licensing reviews. pulemaking proceedings, including possible hearings, would however take substantial time and effort and might " stretch"
,.,f
[m NRC expertise and create the impression that NRC was intruding into areas where other agencies have primary jurisdiction.
i,gn
,.n 6[(3%S$
The range of possible rules envisioned include the following:
a.
"Present law and policy does not support any narrowing of 2My
[n M the scope and methodology of NRC evaluation of the [need for facility]
mm NhN factor, with the result that the NRC must continue to consider a wide and g
]y..,
complex range of factors and methodologies."
ya b.
"Present law and policy supports a more narrow scope and 6'.51 p"&
methodology of the NRC evaluation."
c.
"Either a or b above, but certain policy and/or factual QM j
W issues would be decided on a generic basis in the rule (e.g., impact on yQ.:~,
.g,.g electric energy demands by rational energy conservation policies).
NG W
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Enclosure "A" 4
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Continuation of the case-by-case approach would lead to policy g
development through an evolutionary process. From a series of Licensing T
y.i N;
Board, Appeal Board and Comission decisions on specific cases, f4RC would b9 issue, from time to time as appropriate, Regulatory Guides to reflect evolving policy changes. Infomation and views of the public would be
[
s 1
solicited and considered prior to the issuance of the Regulatory Guides.
The implementation of this approach could occur within present staf f g..
manpower resources through application of staff judgments concerning
%u analytical rethodologies and priorities in considering specific subissues h
g.g from case-to-case. The approach would not, however, reduce substantially w{
contcsted issues having a potential for licensing delays because each
{h such licensing action is subject to litigation, and results in some mq duplication of effort.
%yu Y?,i A proposal was also made to recommend legislation which would place
(
h%
the burden for estabitshing the need for the station on the Federal or
@m In State agency which is responsitJa for assuring that ti.at particular need
- 1...
<!,3 is fulfilled. Under this alternative, the Feaeral Energy Administration
- 1. +.
f.N would establish that the (nuclear) station is needed rather than an
.v;1',
rig alternative form of generation in order to meet fiational goals of fuel 4~
dd availability. The legislation would also define how the other agencies'
)$
- q reviews would be utilized in the fiRC's fiEpA cost-benefit balance.
$pn Properly written legislation had the greatest potential for minimiz-
.J ';3 ing duplication of reviews and contested issues having a potential for r -.
t si I'
licensing delays. In addition, since the needs for the station would be y
g; l
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d 4
Enclosure "A" l
.,l xx&/mam m mwmu.maamm'sAe f f?
,I
?
- f j '
.y t
- +ver q
1 established by other agencies NRC manpower could be more efficiently l
employed in other aspects of the environmental review.
The prospects for GPS clearance and favorable Congressional con-i sideration were, however, uncertain and any amendment to NEPA was viewed as being highly controversial.
l d
Evaluation of Alternatives None of the alternatives, in and of themselves, would have chanced h1:
1 n.
f the basic facts and technical issues involved.- And a final NRC policy j
1 k su i
would not evolve until all the issues were satisfactorily resolved.
c e.-
I Of the three alternatives, rulemaking has as a potential objective d
the early resolution of all technical issues. Policy evoluti:n through a.
)
f[X X
history of Comission and court decisions on specific cases, while facing
.h f
these technical issues one-by-one, would still eventually have to face n
s.
J them in toto in order to attain a stable, final policy.
M.,1 iiMK da'%
Transferring all or a part of the subissues to the FPC, a State K?}
agency, or the FEA by legislation would not make the problems disappear, j {o
.a. ;
but only shift in part the burden for their reselution outside of HRC G;M 3 ~\\
1.yh 'i'ij I/[ges.;
Reconrnended Course of Action Mrb There was a difference of opinion among the staff on the appropriate g--;y ggy$
Ty, course of action. However, after weighing the relative merits and
'gg deficiencies of each alternative and the policies underlying each choice, 4.93pJ pgpc the Office of St,andards Development recomended that the Cocrnission:
't! Y
[g n... -.x j
1.
approve rulemaking; and DyN[.y 2.
direct The staff to prepare an issue paper with recoernendations on r
.. n '.
the scope of the rulecuking and the procedures and format of the rule-fc.w.L n;4,;
Making proceeding.
6y
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Ecciosure "A" M
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I g
The Offices of Nuclear Reactor Regulation and Nuclear Material MN Safety and Safeguards prefered continuation of the case-by-case approach.
In their views the " case-by-case" pree.edure had not caused any significant licensing delays thus far and had been irgroved to minimize delays in g
the future. Also, rulemaking on this very complex issue would require
%)
additional NRR nanpower in the short c ' and was not likely to reduce
's NRR workload in the long term. This was ~ atuse NRR would be required w.t G
)
A both to continue the current " case-by-case" approach and devote additional 4
1
{,,
manpower tu the rulemaking activities. Finally, legislation was perceived
)
as the only method to significantly reduce NRR's orkload. However, that
?
k office doubted that the time was ripe for success in this area.
4 4
i:h*%
The Executive Legal Directior had no objection in principle to any U
h3[7f of the alternatives. However, he questioned whether a legislative remedy
{
. ;.s;
'h,)
(or amendment to NEpA) was viable in the present political climate.
I 1
/
- . m j.
He also believed that it would be advantageous for the >Comission to have before it a fairly well defined scope of the proposed rule and a
,mp
{.g more precise objective for that rule.
pr l,ij e-
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6 Enclosure "A" 4<
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W EHCLOSURE B W7@
- %9 NRC STAFF ANALYSIS OF ALTERNATIVE MEANS TO
%.36 ADDRESS EhERG'l C014SERVATION AND NEED FOR BASELOAD FACILITY hj-%
U)N G
Table of Contents j
.c SECTION TITLE PAGE I
Statement of Policy 2
II Statement of the Problen 0
~~ %
ex III Staff Reco1enendations 8
5
)
IV Summary of Past Experience 17 s
b@<
f V
Current Treatment of Issue 25 VI Current Plans to. Improve Staff Anr?ysis
. 28 F::LQj VII Treatment of Conservation Issue 31 f.w.;
\\
VIII Detailed Discussion of Options to 41
-ddj Wll.fp Reform NRC Practice A.
Continuation of Present Practice 44 g S'd'..
..., n B.
Generic Rulemaking 47 C.
Regional Hearings 70 ff[ 2 4,s.
D.
Expanded State Role 74 f,((
- c.--w 59 -
m..,M, E.
Legislation 80 lr$;.v:
IX Resource and Dollar Impacts of Options 82
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b I.
STATEMENT OF POLICY g
s Although there is no explicit comprehensive policy statement in the area of need for facility, the staff, the Boards, and the Commission
.-h have attempted to implement a consistent regulatory approach to this v
d issue, which can be construed to be de facto comprehensive policy.
.dId
.! }
Ihis policy can be described as follows:
s
.s%
l
)
.e d
'Q "It is the policy of the NRC with regard to need for a proposed nuclear
$9 gBM power plant to establish whether there is a reasonabis likelihood that
.;A there will be a need for baseload generating capacity within several Q?$
years of the proposed camencement of commercial operatico. If there yg h.#.}Nf is, and if the ensuing environmental impacts are deemed acceptable on L
'.h a cost-benefit basis, the alternative of not constructing baseload j
0' 5
/
- c.J capacity would not be viable NEPA alternative, since the question then l
%.D l
j;. y;s is not whether environt. ental impacts will be incurred, bJt rather when
~'f, they will be incurred. The NRC does not attempt to pass judgment on
%)
the precise year of need, since the NRC recognizes the various uncertain-d.
ties involved in forecasting the future. Also, there are other factors
,lk#
.gr that could influence a utility's decision to add baseload capacity, b;;';.
{ #:}
such as the economics of power system planning and load management and My a desire to diversify fuels used within the system."
y, T
49
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m 2
Enclosure "B"
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I II. STATEMEKr 0F THE PR08LE14 The NRC has interpreted the HEPA and Calvert Cliffs decision as requiring a consideration of the need for the nuclear facility as a condition for licensing. This ! 'le was greatly expanded as a result of the Nine Mile Point 2 and Midland ALAB decisions which contain 1
directives to include a treataient of energy conservation. The technical 4
staff has developed analytical approaches and has obtained sufficient
.I experience so that the issue is being treated in a competent manner.
The' treatment of the issue has been designed to be only an independent responsible check on the applicant's forecasts, inasmuch as the financial g
commitment that a utility must make to construct a nuclear power
.:n I
plant, combined with the regulatory approvals that must be obtained from the State, makes it likely that there will be reasonable justific4-4p
&y&
tion that a plant is needed within the general time frame of the date fygb j
%CE of oparation proposed by the applicant. The basic approach to the 4..,.
-pa;.
issue has been to compare independent forecasts of growth in demand to AM g.N
.M those of each applicant and to thereby reach a conclusion as to the nm reasonableness of the applicant's forecast. Other issues such as g.[
impending natural gas shortages affecting a utility have been treated DJ
.k where applicable.
bi
- ,./
[.:$.h h At this time, it is appropriate to reconsider from a policy standpoint
$h GL the appropriate level of analysis and the manner in which this issue g[
(-T a
- k).1 p[b n
y, ah.
3 Enclosure "B" o
2
- m..
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should be treated, having dealt with the need for the facility adequately
[
fn the past on a case-by-case basis, although perhaps not with optimuta 1
efficiency.
r' In response to the request of the Secretary to the Comission to Lee ni V. Gossick, April 25, 1977, tha staff prepared the following analysis W
4 I
of HRC's past, present, and future handling of the need for baseload I
ay capacity question, how the issue of conservation fits into this pro 51em, f
and viable options that might be considered for the future treatment
$,; 5.)
of this question. The staff has also made recommendations regarding l
- >j the future course for NRC to follow. In considering this entire issue
,M one must inherently answer several basic questions, as follows:
]
s Q))1 Does the NRC, in actuality, have a positive requiatory role that f%jk,
should be played under NEPA in this area?
l
/
4, j hv
.'c If the pragmatic and/or legal answer to the above is affirmative, Qft then are there better ways of accomplishing this objective than
)
7; ;'
- p,{d our current approach?
s.mf
- qWb k' h f,y' If the pragmetic and legal answer to the regulatory role question
,. J.'S J'i is in the r.egative, tnen does the NRC have an important salutary J
c:, h role to be played to highlight, for the record, issues of national
.. y
.9M concern such as conservation, fuel diversification, substitution,
.u sn
.-%6 energy costs, and reduction of peak demand?
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4 Enclosure "B"
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-Qy If the answer to the salutary role question is affirmative, then
(
are there better ways of accomplishing this objective thea our current approach?
\\
I bW If the answer to both the regulatory and salutary role questions 6
are marginal or in the negative, then is there a legal, useful, q
and viable way that all or portions of the NRC's current activities h
li In this area can be eliminated or greatly constrained?
i
(
I 7.n reaching these decisions regarding policy in this area, the Commis-sf on may wish to consider whether frosi a public interest standpoint II the work being performed by the NRC in this area really serves a purpose that offsets the total resources expended by addressing the need for power question at the Federal level. To elucidate this a
h s
/
question the following thoughts are tenportant.
4
$. n 1
11[ 2 a afll r
1.
While the NRC review processes have undoubtedly had some moderating g
.n tue influence on utility forecasts of electricity demand, it is a W
sr$9 fact that the NRC has never--even during the plant delays occurring
@p x.-
af ter the oil embargo--found it necessary, to date, to refuse to M
w Issue a timely CP or an OL on the basis of lack of reasonat,le f.d2)i yf
- g
- :
justification of need for facility.
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Enclosure "B" A,- d V :w gr7 *iy
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' '; J J u :B r>wa:','-%;,Q Q;.i*,N;@.f. %..a-,.%iOhQ.W:2xhiD&fr: ' n _.C%QJ; W;E'$l.iE_6_Y_n 4
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2.
The changing factors affecting need for facility are becoming l s:
I k
better understood, although many are still controversial and
?.i
- J Qtt subject to much speculation.
g, 3.
States are expanding the scope and depth of their need for facility analyses.
w p>d 5M In addition to the above points, the staff has reached other conclu-
' $(6 sions that may help the Commission in the consideration of policy in m:h this area as follows.
h'T 1.
Under NEPA, the NRC must explore appropriate alternatives, includ-N@s ing the alternative of not building the facility. While the NRC f,
.:.a:
_W' is required to make findings relative to need, these findings Q
,!r should only address the general likelihood of need within the a4 Q.
approximate time frame of the applicant's proposed date of commer-V5i cial operation. NRC's responsibilities under NEPA do not extend
'{
on. j i
'y g to assuring that electric utilities are following an optimal
)
h>^4 Q
financial strategy in their capacity construction plans as a J.f RJ n.T condition of license.
v.M.
g ke
.li) 2.
While there is a NEPA function to be performed in the review of 4M y
need for baseload facility, the degree of the Federal government's
- n "rs oversight of industry in this area becoces questionable whenever v
ijn
%0$ ci s r
'.w.
6 Enclosure "B" t
,1
-s NH~.%A {
5 Am - Yb
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3 e
~ '~~ ll
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1 2
l the environmental impacts of alternatives are essentially com-a parable and the major question rests on the timing as to when i
(
l I
these impacts shall be incurred as opposed to the impacts of not having capacity when needed. One of the primary NEPA functions in this situation becomes one of whether any significant options f
are foreclosed by too early a decision.
l I
M'j; 3.
The financial commitment that a utility must make to construct a nuclear power plant, combined with the regulatory approvals that must be obtained from the State, makes it likely that there will
~
h be reasonable justification that a plant is needed within the general time frame of the date of operation proposed by the f
f;%g
.s applicant.
g b3ib l
K@
4.
While the Calvert Cliffs decision does require the NRC to make i:-
Q?:m~{,
ir. dependent evaluations ar.d ji dg:::ents, there is nothirl in that decision that would preclude tie NRC from utilizing State informa-
[
f tionandexpertiseinthisanaysis.E Where State decisions to
.h[
)
dkW grant Certificates of Public Convenience and Necessity are supported by reasonable, independent analysis of need for baseload facility, the question arises of whether the costs to be incurred by the
'96N fMJ:
- y_ m a
g3 Q'<%;
E# nclosure D is a copy of a letter to Mr. Gollomp of the State of 1
E New York conceptualizing what might be accomplished with NRC/ State
??? V' cooperation. The response back fro:n the State was very positive and 4 73 initiatives are being pursued with New York in this area.
@y5
- n Q
- yl) m,ig.
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- G y; 4 7
Enclosure "R" da
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I 1 M Fd
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public e commensurate with the diminishing degree of environ-
%.C mental protection afforded by further NRC review of this issue.
. 4, hw In the past, NRC consideration of the various aspects of need for 5.
- ggId facility have likely had a salutary effect in highlighting items
%f
$?@
of growing national concern such as conservation, fuel diversifica-4 3
$w tion, energy cost, ratesetting, and substitution. Due to increas-h q
[
ing national attention and accumulating analyses of those items, y.-- <
jff however, it is not likely that NRC's continuing treatment will G
have a measurable future salutary effect.
@F
%q 98 6.
Although the question of conservation is of great interest today, DY
.:W it is only one of several important parameters affecting the need
}
for baseload facility. The realizable impacts of additional
'j, conservation on electric demand over the next 10-15 years will l
likely come slowly, and the magnitude and likelihood of any y
j; change will depend strongly on the programs, mandates, and incen-
~.,
gi.1 tives that are actually successfully implemented, and for which f,ni, NRC has no jurisdiction.
m:
. j!
III. STAFF RECOMMENDATIONS
'.J Y
Basea on the staff conclusions regarding statement of the problem
. i provided in Section II and on the detailed discussion of options and
+
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Enclosure "B" y
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Ma ecs
$?'b pros and cons provided in Section VIII, the staff has the following reconnendations and rationale regarding the handling of the need for baseload capacity issue:
g,.
5f 1.
The staff strongly recommends that the Atomic Energy Act should be amended to permit the need for baseload facility determination g
to be made by the States individually or in combination, or by F"
Federal power marketing agencies (in consort with the affected States), subject to reliability requirements of the Federal Power f.P.%
Act (ref. NUREG-0195, " Improving Regulatory Effectiveness in Yb' 3 (4hg Federal / State Siting Actions," June 1977. This would have the effect of amending NEPA in this area of NRC's review.
h-h r,w.n
[@u j
The Icgislation recomended in NUREG-0195 also includes pro-Nk
.;m.
visions for regional planning regarding need for power and the T'2C wy location of the site, provisions for the States to perform l '-f;yi p.-
3 environmental assessments under Federal guidelines, and other
,rf d vntc recomendations. The recommendation of this staff analysis Y2 G ri[
regarding State certification of need for power should not be 7A 3.W.y construed as being necessarily opposed to the broader recommenda-
[@
tions in NUREG-0195. However, while more sweeping regulatory h,M[
reform may have merit, the staff would also not be opposed to a q((.9:Q
.g d
(::.M E e options discussed in Section VIII are not mutually exclusive, and the
't Th c
' I.[
staff recommends that a mix of these options would be the most appropriate course of action to follow at this time.
,W i
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Enclosure "B" g
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%7A narrowing of any reform to encompass only the need for ba:eline v~;j facility issue and various other procedural changes, if it was
.9 pt=5 determined that legislation to implement other reforms would Wl y$
2Jfl likely not be enacted or might not be useful at this tirne.
t$
h F
>;. y.a K f fhf NUREG-0195 makes reference to the criteria that the States should
.gr b;t follow as a condition of a delegation to perform environmental
,-Mi assessments. With regard to the delegation of need for baseload g..
j]
facility to the States, the staff would reconnend identifying in J.t.
dD the legislation some general criteria that should be addressed by
$li the States in their evaluations. The staff would also strongly
?' liv 6,:
JE recommend no Federal NEPA overview function in the area of need Ph for baseload facility, since if general criteria are established a i F,
in the legislation, reasonable implementation will be achieved
.g through appropriate political and legal processes at the State I4 levels.
7!,;
The pros and cons of this recornendation are summarized below:
I
)
%,g;
.a
,y Pros l
m Elimination of unnecessary duplication of effort by State i
t;i and Federal agencies, since States have inherent powers ir.
7
]
this area, that they are currently beginning to exercise in a mort extended, in-depth manner.
10 Enclosure "B"
^ 7W' Q;;~ &GiWWJ5: %, TT.i "ly.+ff...\\,W :y ;f Q$& -%.:g. hR.w-?W'M u:
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Savings" of MRC, applicant, and pubile resources by eliminat-ing an independent federal review that has little social value today, recognizing that it previously had a salutary effect primarily in that it highlighted areas of substantial
- n. tional importance.
The timino appears good for submission of such legislation.
l Cons i
If legislation regarding need for baseload facility is tied g tightly to the overall question of acceptance of environ-mental assessments performed by States under Federal guide-f lines, the chances of enactment would be lessened.
{f v,
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Wl.Yf, A
There would be some opposition to need for facility Icgisla-3($
26 tion, since it would be perceived as a dilution of Federal
/
1 authority under HEPA, particularly if general criteria for
-a the States to follow were not included.
.k m
NI,ii 2.
A rulemaking should be considered on various aspects of the
[h9
- W determination of need for baseload capacity.
- %i i.'.tf1 QA
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11 Enclosure "B" Ifc. y.J 4._
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sepel WN lW$
g*d N,
w NC It is reco:nsended the staff consult with CEQ, the States, and ifl T
$@/
others and then prepare a staff paper to recomend whether a f-g$;
rulemaking should be proposed, detail the scope of any proposed L 9.]
n.T rule, and reco. amend whether a public hearing should be held on s,.
jr. ;p
,j any proposed rulemaking. The staff believes that detailed
%d?,h methodology should not be the subject of the rulemaking. Rather,
%'.)d d
TD Jh what would be desired would be guidelines for the scope of treatment ryn and criteria for decisionmaking appropriate for the need for eMp baseload facility determination for cps and OLs, and an identifica-p
@j'Ni tion of the decisionmaking criteria appropriate to reopen this M
issue once an LWA or a CP has been issued.
NF I.E
/
m,.;
[M For example, delineation of the degree of accuracy with which an
,v y
- p applicant must predict the actual year of need for the plant
,.$}n q
(" window-of-launch") would serve as a decisionmaking tool of
,7, substantial benefit to NRC's current practice, and the staff 4/'
believes that such a delineation could likely be accomp'ished with a reasonable expenditure of manpower. Another example is
.c W-that the staff believes that in most instances there turns out to j~
pf be little merit to the reconsideration of the need for facility
-l question af ter a substantial investment of capital has been made
~N.
In the construction of the facility. Rulemaking could provide a better definition of the criteria important to possible reopening t
cf this question so that tests of reasonableness can be applied
>j r
b 12 Enclosure "B" 3
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w on a more specific and uniform basis at, for example, the OL
.jl stage.
ll Any proposed rulemaking could treat ways and means to incorpo-Ml rate, to the extent legally possible, State data, expertise, and I
decisionsaking into NRC's review and decisionmaking process.
g, i
l It may well be that, upon close examination, the staff will i
recommend that certain issues could not be resolved by rulemaking (i.e., that a generic resolution of the problem is not reasonably possible). However, even for these issues there could perhaps be a salutary benefit to a rulemaking proceeding, since a record b <
would be established that could prove beneficial to the NRC staff Q.
and to the States in their treatment of need for facility.
ii[.q',' @.
vr
$WO w1 7.'E l
The pros and cons of this recocv'iendation are summarized below:
g,; g l
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r,ftaf It is not cle r that any proposed legislation would be j;pG.a 1.
.h$
enacted, nd, if not, the establishment of scope of treat-ment and the basis for decisionrnaking for cps and Ols in the
,9fL rules would be of benefit to the NRC and to the pubile.
WO w u. +
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13 Enclosure "B
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>r Even if legislation were eventually enacted, the public E/{f g
r,.4.,
r,ih record developed in the rulemaking would be of benefit to
,.y the States in their treatment of this issue.
%G ba w o.
a.3;:!; 9
. ~ :;<
4 Con
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~
In many areas the rulemaking would have to be carefully T,,C..
I 4.)
4" 'i scoped to obtain a bottom line that would be useful, and in d
3; o q
,t[$
some areas the manpower expended might not be cost bene-64h p jg ficial in NRC's exercise of its NEPA responsibilities.
%a n
$ft However, it could be cost beneficial to States and other 3';{k parties to develop such a full and public record.
m If%N M:., f
?,
.i 3.
Pending the outcome of the above, NRC should continue eith current initiatives regarding improving its i
..s a
i methodology to address important issues such as conservation and should augment its initial overtures to work with the I
various States to determine whether cooperative agreements
?
can be work..d out to utilize State data, expertise, and j
.,Y analyses and tu c'..cact joint hearings.
,s
-?
The pros and cons of this recommendation are suenarized below:
.i t s 14 Enclosure "B"
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$hh tre kW Nsd y.jp 3p The eventual outcome of any proposed legislation and/or of t M'$
rulemaking would be uncertain; thus the status quo should be
,.s.,
viably maintained.
p,J q 9
%, a1 Nk
$f;.*M Issues have been identified that are likely to be even more
'i..,- (
'$7,}h contentious in the future that need generic research (such P{f6/d; as conservation).
pc:13:
h7
- PE!.;
& a A number of States are greatly interested in cooperative J( ?)I review efforts, and these efforts would also have benefit to
-wA 3m the States in the event that legislation is enacted.
O.S "d2d 0:?.?:,
_c o.n.
y.N.
- l-[d n:.
There would be a front-end increase in NRC staffing required
'!;f-~';
Y.[,.
In this area to negotiate on a technical and legal basis the p.y appropriate utilization of State expertise.
,(-
S *J;I.,
I$
There would be a risk of occasional State / Federal confronta-i l
tion, since the NRC would still be responsible for judging Yl.,
i
.n the adequacy of the resultant State analyses.
]y pl:. 4 l
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15 Enclosure "B"
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Unless ' carefully structured and implemented, there would be p
g litigative risks associated with arguments involving a c
k,,$..
possible invalid delegation ofiNEPA functions to the 3'
States.
UnM
[us-gy, 4.
While the NRC should be.. receptive to any requests to partici-
'5"[.p Ppj$
pate in regional hearings, the NRC should not take the lead N.r 1 NI);
inanysuchhearings,sincethesubjectwouldinvolveaf Vu N?
types o'. generating capacity. Also, if such hearings are
&$"N held, the NRC should take appropriate steps to try to make C' kl
%Y,,s,
mQr_,
the determinations from such hearings dispositive of the U:4
[MKQ need for baselead facility issues in subsequent applications bh$
gog,;
for nuclear power plants, otherwise the NPC manpower expended L,h q E
w0'Jld yield little benefit in the discharge of NRC's licensing P
, J-responsibilities.
A.-
.v-6' '.
R The pros and cons of this recommerJation are sumarized
_a
- c., v,,
below:
y,3 ma EQ.
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.+1 J-16 Enclosure "B" p
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eld j;S
,*C.D Such regional planning efforts could have decisionmaking W
Md value, if structured properly.
[F
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g 6h Con 47'.]
c,
b Unless very carefully structured, the NRC manpower expended h
in regional hearings could easily exceed the manpower that we would have been expended on individual cases.
v+ w M
EN~
e N Authority to utilize the results of such hearings would
$Q D#
likely require rulemaking.
ftil,!
D' l
IV. SU8HARY OF PAST EXPERIENCE i" *C
- n 4h.3'
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i;Q5" i
need for power, usually based on historic trends in load growth, has J:.y
. :s been considered an essential part of applicants' environmental reports
$:hi w
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and Staff environmental impact statements. Prior to late 1973 the N
l'f:
staff depended to a large degree on trend extrapolation in analysis of
. /f+i
- v..
need for facility. There was no explicit treatment of energy conserva-l3c4
~
h.hi tion. Rnserve margin served as the criterion of need. The Federal w
Power Commission was considered the lead expertise in this area.
/O'k 7
l
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17 Enclosure 'B" S
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Their input was to assess the applicant's projected building program on the reserve margins of the utility, given the trend in growth of I
power and energy demand.
65d I
Beginning in late 1973 the staff began to improve need for facility y,hjj
.pp g!Q analysis by adopting forecasting methods whicn more comprehensively
.w 9 considered the various determinants of need for electrical energy and a
.4 Major determinants which the staff began to treat more fully w'%
power.
h l
were price of electricity, alternative rate structures, economic and g
g w
pM population growth, energy conservation and substitution, and availability
$? $
and price of alternative energy sources. Oil and gasoline shortages T@$
kfM VG^*
beginning in late 1973, attributed to the Arab oil embargo, raised
- 4. 4; ip j the concern for energy conservation. This, together with the economic l 'l ^d!jfj recession and mild weather at that time, caused growth in energy and
{
3 ir b:
- ' [g;,-
peak power demand to virtually stop in 1974 and 1975. Thus the trend
. sw extrapolation method was severely challenged.
.Qc:
i
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, 'l.
- y..
,N Changes in the staff's approach to treatment of need for faci *ity were
,. c
.w Qh aided by greatly increased concern for energy trends on the tart of y
9l%
intervenors and the ASLB and by hiring of HRC staff with experience in
- .. a,
- . Q demand analysis and forecasting. The breadth and depth of need for q
power analysis first was called into serious question in the Nine Mile he
@pf Point 2 hearing held in December of 1973. In that hearing, testimony
.v;
($5 was given on forecasting methodology, price elasticity and conservation.
<d i
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iB 18 Enclosure "B" j
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l The Licensing Board had concluded that the demand forecasts of the parties did not ' provide a reliable basis for determining the year of
,4 need for Unit 2.
The majority of the Licensing Board ruled that Unit
, $3 2's availability to substitute for existing fossil-fueled generating plants, which were subject to the distinct possibilities of increasing fuel costs and possibly curtallment should oil shortages recur, was a benefit sufficient to justify its construction at that time. The Appeal Board rejected the findings based on the " substitution" theory since inter.enors were not given fair notice that it was an issue in the tearings. The Appeal Board agreed that the Licensing Board had properly discounted the intervenors' favored forecasting method, and it found two of the trend extrapolatic.) forecastingt presented in the 4f case acceptable. Although the year of need, based on reserve margin gW requirement, varied between the two forecasts, the Appeal Board found 4g f.'7 Kv 5
tha two units would be needed in the "early 1980's." The effects of M'?
M the energy conservation measures on load gro.th were found to be
->;7.1 Uh
" inconclusive" and " speculative."
H
.@w fe The AEC issued two decisions in the " energy conservation" area in late FWi
' /.y 1973 and early 1974. In the Niagara Mohawk proceeding, the AEC reversed j]
a Licensing Board ruling excluding evidence offered by intervenors on p
,e l
certain energy conservation contentions. No attempt was made to
[
a:';.
s define " energy conservation" for purpose of the licensing r.ontext. In g.
sy a brief opinion, the AEC stoted that--
y ds y
4, 19 Enclosure "&'
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(~ A This matter arises at a time of deep national concern over energy c
sources and supply -- a concern which this Commission fully a
shares. In view of our responsibilities under the National Environmental Policy Act, we cannot agree that the subject of eiergy conservation must be altogether ruled out of licensing
&N tcoceedings. It is true that the parameters of our statutory
.ower to compel conservation are not clear. But it does not f, }l follow that all evidence should therefore be barred at the threshold.
f'ii Su%*quently, on the basis of Niagara Mohawk, intervenors in the Mi&dJ ;,roceeding moved to reopen the record on the ground that nuxer sus alleged " energy conservation" issues had been erroneously g
1 exclad. The Commission responded that before Licensing Boards need erplore energy conservation alternatives, intervenors "must state it.-
clea, tnd reasonably specific energy conservation contentions in a
%l S i, tiely fanion. Beyond that, they have a burden of coming forward up$
with sc.r af firmative showing if they wish to have these novel conten-j C,4d tioni s olored further." Consumers Power Co. (Midland Plant, Units I pg s,:q
.cii 2) 7.'..t 19, 32 (January 24,1974). The " affirmative showing"
[.h reqeire.' o. s further elaborated as follows:
w in knl We Purpr* :q ?nergy conservation issues roust meet a threshold NM tes'. - th.y must relate to some action, methods or developments
[pj #
i that wouid, in their aggregate effect, curtail demand for electri-city to a level at which the proposed facility would not be r.ee ded.
... Beyond that, the issue must pertain to an ulternative re.
y t h a t. '> '1..tsonably available." Natural Resources Defense Council s b r,tAq, 4: 3 F2d 827, 834 (C.A.D.C. 1972). [ Footnote omitted.]
{$&
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- 84e 20 Enclosure "B" Ii r - e.$
5.5hE5h5$. E.5 ?OWEUENSY INY' Y
- =ac a -
+ -"" " "" gig pytmamm ree:s_m r m
- =.-
l MGQ Furthermore, the impact of proposed energy conservation alterna-
~I.N tives on demar.d must be susceptible to a reasonable degree of proof. Largely speculative and remote possibilities need not be
$@',y weighed against a convincing projection of demand. Here, as with gy' many other issues under the National Environmental Policy Act of a
I 1969, a rule of reason applies. See %t. ural Resources Defense
)
Council v. Morton, supra.
{,;$
Measured by these standards, the Commission held the MIDLAND inter-I venors' contentions on energy conservation " fell far short." However,
"]
6
}
in the Aeschliman v. E decision, the District of Columbia U. 5.
r f
Circuit Court of Appeals ruled that the Commission " erred in promulgat-ing a ' threshold test' which essentially requires intervenors to prove h
t w;,
an alternative satisfies the ' rule of reason' before the Commission J
c[ g,,J will investigate it."
(Aeschliman v. NRC, 547 F.2d 622, 638 (D.C.
g4 a
Cir. 1976).
W'M h
$f[29$
M t
However, it should be noted that the Court's ruling in Aeschliman does l.d h g'rl l
not preclude the establishment through rulemaking of guioelines for fjl@
> v.;j ' s. t:
the scope of treatment and criteria for decisionmaking appropriate for 2%.
eym rj:k the need for baseload facility determination for construct.on permits P
- s. a v and operating licenses. Such guidelines as the Commission may decide L%Q Q:g upon in rulemaking could, of course, be subject to subsequent legal
,%, M
$1 challenge, or even to further modification at NRC's initiative in the
,g light of new information or changing developments.
7.pd lf?]
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.pp
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.o
[5g The most obvious issue in which energy conservation has applied are k!d cases of promotional advertising. Since the Niagara Mohawk proceeding, 1
w
[
applicant's have been under pressure to show that promotional advertis-ing has been eliminated and that information on energy saving opportuni-
$di ties be substituted. Beyond this, the other aspect of energy conserva-g[,,
y
.y tion to achieve recognition as a valid consideration is rate restructure.
b"y J,
" Energy conservation" contentions relating to rate structures may b
l M
present much more difficult problems for the regulatory process.
l W1 Historically and to the present time, utilities have proposed and a%
State ratesetting agencies generally have approved rate structures Mg which provide discounts for high-volume use, particularly by industrial ad im M
users. Obviously, such rate structures encourage denand to some W
Q1 extent. The Board opinions in both Niagara Mohawk and Midland hold
- h 7
that conservation contentions addressed to rate structures of this kind are relevant to need for power and therefore validly raised in f
pt "J'j licensing proceedings. The NRC staff has essentially dealt with this issue by affirming the general desirability of rate restructure, but N
arguing that this cannot be made a condition in the NRC licensing because the issue is a State responsibility. Since this is the case, 1
~ l the NRC staff has not developed extensive technical knowledge of M
desirable forms of rate restructure. Given a rate structure, a range
'1
-y of growth forecasts can be developed but NRC cannot require that a specific rate structure be implemented.
- . ?
a Q t
1 e
22 Enclosure "B" y
kJ '
5[
S
.r
bk r
9
$?
yud
' 7 The extent -f NRC's obligation to consider modifications of rate f
v structures as NEPA alternatives was raised by a petition for rule-
[$
f))
4 making filed with the AEC in May 1974 by the Sierra Club and the
+ -
Prince George's Environmental Coalition. The petition was noticed
'1 for comment in the Federal Register, and following review of the e
petition and the consents received, the Commission, which was given f3 L 1 the responsibility under the Energy Reorganization Act, denied the Q
petition, leaving the issue for cases-by-case development. The I* %
H petition asked NRC to require applicants for construction permits
}j q
to conduct and submit studies of price elasticity of demand for M
[$'
electricity in their service areas, based upon "econometric" principles.
Y These studies were to have analyzed projected demand under various g g@
Mi?
possible rate structures, such as peak load pricing and inversion WN.7 n.m of traditional volone discount rates. The intended effer.t of the NN.
y 4,.. '
proposed rule was to exert pressure for changes in rates so as to
(;[
,qj.A reduce demands for electricity and need for additional generating Wi
'D j
capacity. While the Sierra Club petitioners presented an appealing
[2;:;.pt e e..a NEPA argument, broad implementation of such a rule could have drawn
- $sdU the NRC indirectly but deeply into the ratemaking area, an area jyf '
reserved to State PUC's under section 271 of the Atomic Energy Act.
,J5
. T;j
'M %.
' f, \\
/;M t -
The NRC staf f developed procedures for dealing with these matters.
Mf]
g%
D, l
On the issue of conservation, a staf f paper was prepared which g? ' '
..,g
,1
?Nt f&
N\\
l 3
~
s 23 Enclosure "B" d
13
^ ~t* *'Q^
b
- - ; gQQ* h.'y
- s:
.3
.[ g h * *.-[;.
,,}Oz g 3 ~* - ' ' L' a. a~ m. ~- .-w-m.x .. n;. x. 2_ -. c n .o.d w ~x-h
g urnumme-f ' fs ,' pj,%' r.oJ 2:3 bQ bM: evaluated a number of potential actions to conserve energy incitding, h in addition to the above items, various types of load management, rate WA increases, and energy saving actions, such as improved appliance and [99 lighting efficiencies. This paper was subsequently included in all Th g environmental statements as the staf f's analysis of conservation w Y 1{g potential. UM dip Idlfh While the paper did perhaps expedite hearings on the conservation %h5 issue, it tended to reinforce the general tendency to view energy l LW MN; conservation as something separate and distinct from traditional $> 1 factors which tend to determine the level of energy use. For A, Q example, any action that changes relative prices of alternative [vsaj energy sources or price of energy relative to other prices would .p be inseparable from other factors considered in an economic analysis i t j 7.d., af demand. It is the staff's view that energy conservation must be v treated as part of the process of evaluation of need for power and ,.c c.,, not as a separate entity. Except for candatory requirements, such
- v. '
as possible legislation as to levels of insulation or appliance rf -M and machinery efficien:y, most aspects of conservation are best
- . s
>q, treated as a part of the model for forecasting the demand growth, s i 1 fsk.
- /9
? 1 4 24 Enclosure "B"
- x N
^
\\ 'li N M@ g.%n,yli 3 The NRC staff perceived the need to develop electricity demand fore-iy . f casts using state-of-the-art analytical procedures, however, there was .-y dj a time lag before the experience was obtained and a forecasting capability pd was developed. Thus, the first adjustment to be made was to employ / national forecasts of electrical energy growth and the forecasts of economic and population growth for the service area relative to the nation, to estimate electricity demand in the service area. Parallel n g. to this effort was a review of available electricity growth forecasts ] to establish reasonable ranges of growth rates and to detemine factors generally found to be significant in electrical demand forecasting. D r The next step was for the staff to sponsor research in electricity 3 .L ~N r j% demand forecasting. This is an applied econometric approach based on it j judgement of causal factor inputs and is developed to provide state by 4:y;jj \\ A s.% j state forecasts. The staff selected Oak Ridge Nationa) Laboratory to gq:f. g develop the model. Researchers at the lab had been involved with '[h., [1 electricity demand models for several years. They had the background y,d W*'-2*; and experience to be responsive to the staff's needs. 'j littY an,c W(p[q M/, ; V. CURRENT TREATHENT OF ISSUE MN f%fj Relatively few new issues in the need for power area have arisen in %M the past two years compared to the earlier level of activity. C;G ,s -.,h = %,( '. y,%.+M r:.Q ij0h .o W. 25 Enclosure "8" 3 3 3 Q ' /f R.; " f*.h Q M y g g23 & M[Q%] W g: t
[ .w { A? 3 @% Issues such as the impact of alternative rate designs, conservation, and the adequacy of o'ne's forecasting methodology have already been b;p 9p g well defined and well integrated into the staf f's analysis, although $3f ' Mk, the issue of conservation will have to be updated from time to time -J hik to evaluate trends and the impact of new programs, mandates, and d: }JZy incentives for conservation. Furthermore (except for a likely !Dh;") increase in conservation issues), the level of controversy attributed M LS$ D'd to these issues has diminished somewhat over the past year or two. For MU <.. m CM example, with respect to forecasting methodology, the straight g;:p F[ trend extrapolation uethod of forecasting is essentially no longer l 1 W hjj in evidence in NRC proceedings. Although some utilities still rely 43 ggfl heavily on trend extrapolation, the projections are tempered with I ( >t:;. T[' judgement to reflect variability in the rate of growth of explanatory 9. factors which influence electricity demand growth. In many instances,
- y...
the utility also retains consultcats i.o develop econometric forecasts,
- i
.? which among other things, accommodates intervenors' cc,ncerns. The l' staff, too, has placed greater emphasis on the more systematic
- , 3 -
models of forecasting electricity demand. These factors have .a.j enabled the staff to direct more of its current efforts towards l O, - improving and strengthening the enlarged analysis it must now perform. l y I The staff's analytical capabilities are substantially improved due o to the availability of the state-by-state forecasting model. The initial results are available and have been used in a few cases as l: i a part of the staff's presentation on need for power. Although r 6 I \\ 1 i y J
- 1y 26 Enclosure "B" l
f v;pmmq7 mmwr ] ; f . l w&,. } m? [ ; D % l:l ] s } -Q 1: L n =.w x
- w. ~ vm w
=-m an
) - 1
- Gi ASLB decisions have not yet been made concerning forecasts using this model, the hearing experience leads us to believe that no significant problems will arise. It incorporates the factors which have come to be accepted as the major demand determinants and 1
provides us more explicit regional forecasts than was previously the case. 1 l The NRC has taken the approach that forecasts nsed by the staff are 4 confirmatory to determine the general reasonableness of the applicants' p forecasts. This seems to be proper under the general procedures of J a NEPA review and the general guidelines as to the importance of the conclusions of the need for power analysis. However, with the {h, large number of delays of plants by utilities, allegedly because of (among other reasons) a revision of demand forecasts, it is possible %'(E z' that a rore complete analysis by the staff would have also identified g;..e , e; the need for such a delay. MZ/q 4?$ m.:n %l$ f.3 Current practice calls for consideration of other reasons for h!S i licensing the nuclear facility, if it cannot be concluded that %+h] growth in demand is sufficient to warrant the plant. A primary l@lC)M % g_ reason is the shortage of oil and natural gas and the desirability Q,y) .a ,i?21 of reducing national dependence on oil imports and regional advantages aG of an improved fuel mix. Another reason is that in some cases a y M plant may justifiably be brought on early to replace high cost } Mf] r plants now operating. g 7.g G: G:.d }} 27 Enclosure "B" i ~ ?' % 1-w,'Etc.,- =..- M.~# T*:; .,y ~ > 1 W 'x y ~ ~T 3"M-T: '- L 4* I T.X h *.2 i. .{ 3 -de- , I . N a 2 d[ ". h % Aw. '/ 5 ' r,..'., ' - - A ",I ' K ,,[P .L, 2 ',Y I A. L-i.: w iL -
- _' a
~ su s : - <m-5. ~: .~u. I
-1 hdn p.at 5
- JS In the initial period of development of a systematic analysis, and h
continuing to the present time, consideration has been given to 4:u !
- wjj, acceptar.ce criteria of" forecasts, e.g., that if the staff's and
'h.g!s;/V.e. applicant's forecast are within some percent of each other, the ~ d4g applicant's forecast would be determined acceptable. This has never f been put into practice using precise quantitative limits. Indeed, w there is no way of doing such which is not arbitrary. At the same time, in almost every case the staff forms judgements as to whether the a N applicant's forecasts are acceptably close to the staf f's independent nf:n Jy validity check. Likewise, ASLB's must reach a similar judgment and (;D.; JW include any intervenors' forecasts which have been made. Licensing j]$k .l4 {Tj Boards, even though usually without a comprehensive background in this W/:d .g;;\\ area, seem to be performing fairly well at distinguishing the quality <:[i ,y of the forecasting procedures and the abilities of technical witnesses ,..m f i in this area. ..g s 1 l VI. CURRENT PLANS TO IMPROVE ANAlv"ES 3 r ; E 7 The staff is currently involved in the development and implementation g. f-of plans to improve upon its need for baseload facility and the treat- .s ment of specific energy policy issues which potentially affect current . s g,j.- and future analyses. The staff's current plans entail an upgrading of I'? j both the quality of analyses and the quantification of impacts due to y-alternative energy policy actions such as conservation, rate structure ~ alternatives proposed by Public Utility Commissions, load management UD options, and cogeneration possibilities. q,.- 1 28 Enclosure "B" 1 s u =w" = *~ " & .LwY n& % P' ~ ' w b-y - _ _J
1 w At the present time, the staff has an ongoing contract with Dak M3 WiM h*y;;; Ridge National Laboratory to model and forecast electricity prices f and demands by States and regions in the United States. Models and Yg 432 forecasts are being developed on a disaggregated scale by residential, %( g commerical, and industrial consuming sectors. Relevant sectorial determinants of electricity demand growth such as population, f; f-income, technology, saturation, electricity prices, and prices of 1, Q'fy;$ substitute energy sources Will be explicitly accounted for in the a 4.- Oak Ridge forecasts. Demand projections will be converted into py generation capacity forecasts after allowing for interregional and interstate differentials in capacity factors and generation mixes 7JW by type of fuel, size, etc. Scenario and sensitivity analyses will Q WP be conducted, in order to allow for forecast uncertainty in exogenous
- P,Y an factors. These forecasts are expected to significantly improve the lb$
[n.h staff's need for baseload facility analyses, and will therefore c J hecome an integral part of future analyses. y l ,T I;.t d m..< The staff also has funded a study to improve the treatment of y,- ti$ energy conservation, rate structure alternatives, load management M 4*f options, and cogeneration possibilities in its need for baseload Y,% Kf ) analyses. Since all of these alternatives have been announced as -}; being desirable components of this Nation's energy program, it is W 3 anticipated that they will become increasingly important in influencing ,lr ~ tne future course of electricity consumption levels and patterns. j;.,y W The staff has research plans which will lead to the quantification gy ';;;n 3 -4 ^g. W ! 29 Enclosure "B" W" _- - 3 +9'***f ,~-~[~ ^% ~ l & {_ R } -n ; r ,,+. ' e w; -*;fi...;,L;N*,l.s' ' ;:iA s n'n:: !; _; [ ~ ~ 'i,% ~L l [r .Jv, lA? S *?- 2*.
- Q i
D s 4A 1.;.Qd of potential impacts on electricity usage, and hence need for M i 4 (- incremental ganerating capacity, resulting from the adoption of i ?M these alternatives. Further plans call for the integration of j{::N's' these research results with the electricity modeling and fore-a w k[ casting efforts provided through Oak Ridge, thus furnishing a direct and more systematic approach to alternative policy considera-QQ'y' f tions in the need for facility analyses.
- k;+
1. s ;of.t. qm. w n i1 spl r.ij Additionally, the staff has current plans to improve our under-AM EMT standing of the factors influencing the costs and benefits of k3 [.@% 7 different timing decisions. The staff recognizes that, as a result $j u+ 2 g A ; '"4 of the lack of accuracy in forecasting future electrical demands,
- ms.
M::m, m,a there are associated economic penalties of having baseload plants y;x l L,j available before they are needed and of not having the plants ~[. available until after they are needed. Plans have been developed to provide estimates of the possible asymmetric direct and indirect cost penalties to both electric utilities and the cons ming public of building baseload geneeating units sooner versus later than cp . Jr needed. As for its treatment of optimal economic generating mix, [ the staff plans to develop a quantitative approach for identifying , 1.yy and separately analyzing the demand for baseload capacity in the context of total generating capacity needs. Because of the economic l ' '*a characteristics of nuclear generating facilicies, they serve primarily, I e > l 4,.c if not solely, as baseload units. Therefore, the staff's plans i call for an improved methodology for analyzing that portion of n:: r 30 Enclosure "B" 7%7 m 4 m 7. & x.,; g.,w- -r Y 7 y.' % f ! T w ! f ' ' %T T Jf"K [I)) _,L.$ l W U N f h ' Y Y U D Y O : : " 2 $y# 2:hSWN
lj u.h future projected electricity demands which contribute to the need y t p for baseload generating capacity. p i l i The staff has also been encouraging, and plans to continue fostering, p:%p N an improved information flow among NRC and other Federal agencies and organizations with responsibilities in energy programs and policies. The staff plans to establish and maintain liaison with h tAy these organizations in order to keep abreast of the development of new techniques, data bases, programs, and policies which may sub-
- fj sequently lead to additional improvements in the staff's need for jg baseload facility analyses.
M VII. TREATMENT OF CONSERVATION ISSUE O The Problem of Public Confidence "?h. {k$ v., a: There is probably no other aspect of need for baseload facility g~ analysis which creates a greater problem of public confidence for
- 27 5
NRC than the lack of good information and procedures for ef fectively ld er evaluating the collective impact of conservation measures in con-M tributing to a slackening in the rate of electricity demand growth. @1 The NRC, of course, fully supports the desirability in the national Ml G l interest of conserving electrical'and other forms of energy. .T However, a serious problem arises when intervenors and other critics j ,4 of HRC's treatraent of this subject, in support of their positions, ,j N. reference published or oral statements by high level government 1,7 dM .y 31 Enclosure "B" f
- .s
~
- +
- 5^ff{ ~ < {. O *.V ' ' '. ~~ j " ; 4
- 2
' ' 'T'E y y _. 7 \\;: =,. ;- t v,- e s ,w: ., g,,. ~ , -,.y - ^:u: W l >*.1.f,?^1
- h i,-
l1 c ;, s _w._2 U:fi -' J;EO %N ;..' 2E& v in :>_% d_ L_ _ l
Si { 4 *.m4 ().' fjA .i [9 ,e$ %V[? W,. officials and othat respected authorities. Such statements exhort A. r y* c4.. consumers to avoid waste and provide outstanding examples of energy EEn 5 dEDYI idM savings that are potentially achievable if the most cost-efficient 'O?tNi technologies (such as the use of insulating materials, more energy ~ OM %(iW GSU efficient motors, etc.) are adopted, or if voluntary sacrifices are ~ $!N made in the quality of living such as reflected in lower or higher K.g .4 (f^[g.s. thermostat settings in space heating or cooling. 4 )NEW) 97l,5.l0 The enormous variety of existing technologies which utilize elec-pg iA hh trical energy, the prospective improvements of such technologies W:$/ %i (which may or may not happen or on a timely basis) and the lack of h.Al%p: d.j, detailed quantitative data to analyze such possibilities greatly eg;; impede the tractability of assessing an important segment of the jf.;st Q *Y.' The key problem of the staff is not to certify what conservation. = ~ ;* y is potentially achievable, but rather what will be the most likely .? y';s pf. " batting averaqe" of our society regarding the attain:.ent of these c'- M potent:als within a specified period of time. There has frequently n.. Mg been a substantial, though seldom quantified, gap between the best T',' g available technology and the average technology as practiced by industry and commerce even when "best" is interpreted in the tradi- ..r. g, .s tional framework of maximizing profits. Residential practice may .'., a x a compare even less favorably. t'" -h' '.. .g
- M ' 'n There is also the matter of voluntary action that is apart from the economic incentive rechanisms of the marketplace. Many would 1
I k_6 f, j;f e- .C ' in 32 Enclosure "B" r{ - ' ; WPQ Eos ]7 ;,< f ', -- r ryy " mom p s--savrswa x ,. _y ' [.. ,F 8 T.% 3: ~._L- . GlQ r.. c 2 "
- s l;g jQ 4
'/ ,t' ]
- j. { $
y ,L, + 4 t ?' ' ' v - _ w, s O_ . AQU2 l l
t 1I j h apparently agree with Wassily tecntief, who in reference to exhorta-tions to reduce the consumption of gasoline for public-spirited l' reasons, had the following to say:1 fi I .4 ...it is self interest which moves, not belief in the commen good. Sometimes people are inspired and ready to act in the common good and are willing to forget I' self interest. But this lasts for only a short period of time. On the other hand, many would apparently agree with the. views of 4 Kenneth Boulding. (both Leontief and Boulding are past presidents of g the prestigious American Economic Association) that economic k; j behavior can only be properly understood if religious ar41 social f.c"- values are included along with more conventional economic. concepts.2 [$/ The behaviorist principles of Boulaing's " economics of love" are scarcely new and were previously explored in the writings, among
- ,Q[
- tN others, of John Locke, and Max Weber. If one concedes that both y
R Leontief's self interest econornics and Boulcing's love economics m have some merit in forecasting the future impact of electrical N
- M, j
n; energy conservation measures, the NRC staff is placed in an exceed-g;Q m ingly difficult and awkward position because: I db 1. There is no adequate research data to determine the mix or f(; Mh relative irportance of these contrasting theories of hetero-Ay,d genious behavior a:nong consumers; W H.N Leonard Silk, The Econonomists (New York: Basic Books, Inc., 1976), 17E. I
- p. 171.
2 "p Ibid., pp. 191-239. 33 Enclosure "B" L . :.~ Y [. .] a, "g '[ p: 5
- [.
8 7 v / ;wL al:n W3i M:ga%:v. w g p -::. 2._i n $ ~ W i % s -^3 ~,; v :< 14 MDfW?D: 1 'i w b_-t.
W; 4., y ( [*A i -(t;A %d 4
- p+%,
1 8 4Er w ',' j 2. Regional climatic, socioeconomic and cultural differences -p. i.'.g. would appear to have some significant, though dimly t.nder-T.... t '. 5 -; stood, importance in these matters;
- ,$.}
jc l'A - p 3. Insufficient time has elapsed since the Arab oil embargo of October 1973 has created some urgency for conservation measures My as a partial solution to the energy crisis to provide adequate + tv empirical data to judge the degree and persistence of response lGB to moral suasion; and 3q;. 1n.mu (:.hi v U$wi 4. Interpretation of such data as does exist is encumbered by m -0.1 7-s1 reductions in demand due to other motivational factors such as y[ price increases, economic recession, inforntional deficiencies, 'O and lag effects in social response in perceiving the need for, m.. ; .[ and overall effectiveness of, new measures such as conservation. ?i$4] ..S W'] It should be noted that, on purely intellectual grounds, forecasts
- [9 of what will most likely happen will always be less than estimates ek of what potentially could happen in a maximum or optimistic sense.
9 ] The difference in quantities resulting from the contrasting phil-osophical purposes of these two types of exercises invites the 'j appearance, at least, of a promotional bias. i 3 34 Enclosure "B" N ,w m g-rntm m?"!TL7Ee ^'EiFLN EDOEOE
o \\ St l A flatter of Definitions i y Conservation as a public issue has been on the political scene in the United States since at least the start of the twentieth century. It has been variously interpreted as the reduction of consumption, the avoidance of waste, the " wise" use of resources, and the planned i l. managesent of a natural resource to prevent exploitation, destruc-h t I tion, or neglect. Our society has a number of times experienced a l rise and fall of anxieties over the depletion of certain nonrenewable resources as new technologies led to expanded discoveries of these g resources, made such resources of an inferior quality available at reasonable cost, or provided substitute resources at reasonable i sf cost. Indeed, some would argue that the techno-economic equations d %eg,; of the marketplace is all that is needed to solve our problems of f i resource depletion: rising prices will create a wise allocation of {,'. scarce resources and stimulate technological innovative processes d$ i @q of the kind heretofore experienced. %( J@ Y.M ':g2s Nevertheless, the situation appears to be somewhat different this '
- i'
$..4 ? time around. There exists widespread public concern that the pro-Nk-0 M.4 spects of the " technological fix" for surmounting the problem of ?[fyj Psh resource depletion in the face of a world population explosion and
- 'jl'j r :.;,
the cumulative impacts of industrial expanrion and economic growth yg N on resource depletion create the spectre of limits to growth and
- 7. [c.,n even a decline in the quality of life. Moreover, there is greater
[.d acq concern over social equity considerations in solving problems of $Q a Mr S'U sm + r ' * ^' Y 35 Enclosure "B" u.R L---, m, ;.y,3'; , ~ T "7'; '.-,. N.Y> C'i $l} ^& ^f ;; E h f. E1 %~ X 5Y1 ' .r . ~. - e- ________-.J
5J 5 resource depletion which not only have spatial or regional dimensions but temporal dimensions as well. That is to say, there is growing awareness of the possibility that failure to make " extra efforts" e it N on behalf of conservation by the present generation may unfairly h...q s deprive the quality of living of future generations including our immediate offspring. These concerns are perhaps greatest in the h area of energy conservation, especially since the advent of the oil $$f embargo of October 1973. &GW M Thus, there has been a governmental response in the last several qh [,Jjk years to pursue a wide variety of conservation measures ranging
- t.
- ff from exhortations for voluntary reductions of consumptions to h'h legislated mandatory requirements, support of technological research W
and other administrative programs of assistance, and a variety of l1 economic incentive proposals of both positive and negative types. Yet, there is a great deal of confusion as to whether and which measures will be legislated, how strong will be the mandates or 1 ,'3 :, inducements, and what will be the degree of consumer response. A As a pragmatic matter, it is probably desirable to treat the 9: " conservation" impact of electrical price increases or rate restruc- / turing apart from the remaining set of conservation measures in our
- t
analytical treatment. For one thing, price increases reflect ,x risings costs of power generation as w il as any conservation ~ directed corponent, and a consumer survey financed by the Long d s c 36 Enclosure "B" 7 7 E N E C C s.77I N bdh N
y. 4 Island Lighting Company confirmed that those in the energy business Q 1 W.. would use the term conservation to mean "saving energy resources" gd h whereas consumers used the term principally in the context of g 3, @D n "saving money resources."3 Respondents' claims gave no evidence to s. xQQ suggest that there has been a widespread " conservation ethic." -e.w Horeover, rate restructuring, especially in the form of higher peak (pg gyN gy prices, has tended to be more capital saving than energy saving, r ar-gz l since it tends to shift energy consumption to offpeak periods thus p$fg in% % [&e? 88 increasing the requirements for and capacity factors of lower cost +- baseload units. iMc,f@N kf The Unsystematic and Compounded Treatment of Uncertainties W yj i$ ,0% d.y$ s The applicant's and HRC's present treatment of the impact of con-h.,: d[1 servation measures on electrical demand growth is best characterized hh
- 7 '['f as disjointed and unsystematic. There are a number of reasons for Tal
-t e -c ?v:. this state of affairs: mM a,:nu h.t h . :n.. There is a myriad of unrelated or only weakly related con- @4..Q servation measures involving a heterogeneity of end uses of k..:Qj n
- U electricity. At the macro or aggregate level of analysis, the QQ
- x. :.
factoring out of nonconservation causes of demand growth and $[.s a4'.'*_ I; ' .f Report of Herber Electrical Systems of the New York Power Pool, (New York 'Jih State, 1976), pg. 284. , 'caq. h'$ ~3 s., 37 Enclosure "B" L.;Q L&_1 y ~ S ? '* " y- -;zwr-xM.Q
- g.
m, :g =.x_ n ' c; )~ w ~ E :+, ' asr
- ; a w
- x < ^; w " ~'"='*
- w..
l l l
og,.{ ~, v. $.1:y, 4 reduction in order to assess the historical aggregative impact ( )a "i of conservation has a high order of intractability. At the 4 e l i IU micro or detailed level of analysis pertaining to each end use r 4 4(. W of electricity there are imposing gaps of historical data for l .g p R analytical purposes. bw There are many governmental decisions on behalf of inducing con-h JW servation which have not yet been made or that are subject to l g I w modification leading to numere"< options and uncertainties in g[ the way of the kind, level, and timing of such conservation m 4+ measures. .e d;i .v r ' There is a heterogeneity of consumer situations and dispositions f([g$ [ Q'M that create uncertainty as to the kind, level, and timing of T.d Q 09 response, if any, to the various options faced by the consumer .'O f.r implementing conservation measures. Tw Regarding the latter point, the results of the recently published ,*~
- T 1975 Annual Housing Survey indicates that about 75 percent of yh
,v. t [ households living in single-family homes and mobile homes or trailers t r% report their homes are protected by attic or roof insulation, 57 ' N. " percent have storm windows and 60 percent have storm doors.4 lhe >:.4, j percentage of homes which are candidates for improveo insulation
- s w',f W,
4 General Housing Characteristics, Part A, Series H-150-75A (Washington, D.C. 20402: U.S. Government Printing Office,1977). / q 38 Enclosure "B" r-r . M \\ , uJQ'L,w -dQ -J L L_3:y% a,-63:t c La,7;G?M ^;M;]<Ql& ~ 'N# Td ~' ^ - ~ * ' dei f[ ,( ~ h
- '.,,]
e is"k ) [**' '~ 7^ 4"]' m_ F TMf7fv74FDVP Y-a;.:.w. ,c_. s
-e-i. } t n is already a somewhat limited target. Other limitations may arise because soce window casements are not suited to adding storm windows h:rp 9 or there would be lack of responsiveness to rising energy prices or econonic incentives afforded.by government because of shortage of h.*(( v:9 investment capital by certain homeowners, short tenure expectations . f.s ? N if especially by the elderly or those with transient occupations, lack of y ? i (#Yd;; +h'I specific information by homeowners on expected monetary savings versus costs or simply inertia. - >g r . *E ^ The predicament in forecasting the likely reduction of demand due to i electricity price increases and rate structure changes is quite different, 4,j %' h $l for the most part, from nonprice motivations for conserving electricity. .j The NRC has no mandated responsibility for the review of the equity of 6 j v. a,. a present rate structures and any attempts by NRC to make assumptions, W:;M h$ forecasts, or recomendations about future average price increases or "vg' h ad j% rate structure modifications within an applicant's general service iMsf S,F area, lacking statutory responsibility, might be viewed as unjustifiable j23 N ., J L M interference in the ratesetting deliberations of the authorized bodies ,cg(W k such as the state established public utility comissions. }.y-v i. 4'Mt m i C;q.3 Here the problem is one of entering into a speculation of what other f-
- u. m 7 duly constituted authorities will decide regarding price increases e v,1 (especially which one of an exceedingly large nur.ber of rate structure R.,
5
- i change alternatives will be chosen) plus the timing of such decisions
- , 'it yl 4
~pr .N,,,.N
- a
+p. A g wp,a g b i,h 39 Enclosure "B" Y9 --'P--_ " - { } 7--- J % ' '~* "-- F "L f *,_** -5 [r __.a u w _ _,. d_- mme, 2 E - w w - WAC % m 1.
- Sam
d and then entering into an additionally complex and speculative process as to what such postulations would hold, if any, in the way of signifi-hh cantly reduced requirements for baseload generating facilities. For %m example, rate structure changes such as higher rates for peak period ..y consumption and lower rates for offpeak consumption would reduce @!h.9 requirenents for peaking capacity and increase requirements for baseload y capactly such as nuclear plants. Foreover, there a wide variety of >]%' f views as to the expected impact on demand of higher electricity rates 7g g]=[- 3t for different classes of consumers under the subject of own price 4,q. h,% elasticities and cross price elasticities.5 5 um hj)M %f.. ! lr4 6. There are serious weaknesses in much of the debate on price elasticity M g-[ impacts, especially the often ignored point that sole reliance on me:m hyN correlations from historical data on price elasticity behavior is .::;u @L scarcely appropriate in forecasting price elasticities. This would be g so even if historical data were aJailable at'the level of detail %*b needed to explore past impacts of price changes on different end uses f-of electricity (each of which would have a separate price elasticity) ' y plus the changing outlook in the d of end uses as each consumer v,, ,~^ makes his own decisions as to how to adjust to the uncertainties of . :_W MJ prices and supply continuity for different fuel sources. }. 5 ' N' For a fuller discussion see, " Supplemental Testimony of Sidney E. , "r.1. Feld on Contentions I-19, I-20, and I-21(a), (d), (e)," in the Hatter y y of Wolf Creek Generating Station, Unit 1 Docket No. STN-50-482, January 6, 1976. ~ y y 40 Enclosure "B" f. 3.. = l Ti.yllJQ V:q U T m sr -, F. m q -> q 7 - r Q,; * ' Q ~ E _2O 'y4 v : N 2 M1L. :oh a 50M /.G _ O J :' i kk1 -i _ _=-s w-N-
90 fn re-1 A questionable useful social purpose is likely to be served by NRC / a I speculations on such issues and, in fact, harm to NRC's image in ( exceeding its regulatory authority would likely result including, but P. not limited to, the risk of appearing promotional if it is concluded 9 (YN that rate changes are unlikely to be decided upon that will appreciably L $9 $1I$ reduce the requirement for additional baseload generating capacity as W proposed by the applicant. Thus, the compounded nature of speculations on the 'uture decisions of
- bd governmental egencies plus the uncertainty of their impact on electrical l
W demand growth as involved in rate restructuring or incentives for p + %5@0 Fy ;j i promoting energy conservation measures takes on the character of a ~ " possibility upon a possibility." In sum, the diverse nature of conservation measures pertaining to a large variety of end uses of f,((N W;$ electricity, the large gaps of information for assessing their impact, Q# w the cont *oversiality of methodologies, and the coapounding of specula- ),Q
- w tions required to assess a host of conservation options and their
' ' (,, t acceptance by a heterogeneity of consumers all raise a serious question
- d;[
.p_ as to what degree of accuracy forecasts can be made in this area.
- .,
- ,4 M;:
VIII. DETAILED 0!SCUS$10N OF OPTIONS TO REFORM NRC PP.ACTICE yG,,;; W3g [bL} There is a general desire for a periodic re-examination of iegulatory practices with a view to reforming those policies or procedures which s. G
- ', 7 a
41 Enclosure "B" 7j; ~ 3 - -wr sy~K g,; - - z.c; ;.,,.p,: ,3,.,, . 3 L '. 7,m v ? OO ~ !L EL 5 ? U- 'U' b .: L .: = s. . > :_ 3 l l __.__________----_J
L:; ($3}j have outlived their usefulness or whose historical development have ViB W. Indicated their limited, or even negative, overall value' in serving M f public interests. rm, .h 'I, $ The above review of NRC's practices indicate; a wide range of per-4 sistent difficulties in the treatment of need for baseload facility in $.,,3.e our environmental impact statements and supplemental hearing testimonies. 1 7h Even with the completion of the abcVe outlined measures for improving Mg MIJ our current practice, there is ample reason to question whether NRC h?tQ should remain in the business of deciding need for baseload facility hRg issues or whether some other form of institutional arrangement involving,
- u;<
40 perhaps, an expanded state role might better serve public interests. fi:
- es This question basically arises because of the utilities' legal require-Q gi ment to provide sufficient electric service and the State's responsi-p,
- j;.
bilities in the area of approval of added capacity and ratesetting.
- f
- [.
Given the inherent controversiality of forecasting methodologies, the asymmetry of cost penalties of forecasting error (which, it is felt, favor building a plant earlier rather.han later than a more accurate 3 forecast would tave warranted), and the inherent responsibilities of j the utilities and the States regarding capacity additions, it is unlikely that NRC would find sufficient cause to deny the applicant a .m construction permit on the basis of even a disagreement of several N years over the proposed inservice date for the baseload facility. w 1 1 For a review c,f electrical demand forecasting methodologies and the asymetry of cost penalties for forecasting error see, Hiller B. Spangler, "Probabilistic Methods of Assessing Risk in Cost-Benefit Analysis of Nuclear Power Plants and Alternative Energy Sources,",Enerny and the Environe.ent: Cost-Benefit Analysis, ed. by P.. A. Karam and K. Z. Horgan (hew York: Pergamn Press,1976), ( m pp. 446-478. 42 Enclosure "B" --n 7 my7-w m m g 7 7 f{'- ~ " ',. P T j.
- i%{
,y p wu u== n~ .=.x nc -- < ~.~ -~
l Ties, there is a need to' examine what, If anything, should be dcne I i to refora our current practice in the treatment of need for baseload' facility. The rationale of considering reform in regulatory practices j l k in treating need for baseload f acility does not, howe'ver, reflect a lack of confidence in NRC capability to prepare technically competent L h y decision criteria and analyses but is more of a social policy question involving the weight that NRC should give these analyses in a decision whether to override private investor decisions regarding j the timing of investments in baseload facilities. State public utility ccounissions already make decisions of this nature; and,- moreover, it is the States themsel 3.s who most ultimately bear the th political and cost pensities for any decision errors of this kind. ,? I h The pros and cons of five basic policy options are examined in this .a 1 chapter: Vfe x:n 6M dyp Continuation cf present practice 7;@g %q };h Generic rulemaking; ,eq Regional hearings on need for baseload facilities; gf An expanded role of State and Federal Agency inputs to @Ony HRC's decisionmaking process; Legislative action to alter NRC's decisionmaking responsibilities. J@8 ,sf g In the discussion of the relative merits of each of these policy ?@p] 3 g[..( 7: options, it is noted that there is often a wide range of administrative d
- m
b t*;;j O ' 43 Enclosure "B" .,b w: A -M.,- e -. - .r-r,---... fiQ d bl { ;I. z a-, = -2 r=' rr lt :gf- :. - (f* as ~w '3 a_, l -.~n ,e.= .. ~ ~. summmma 8
4 i f controls la reducing the disadv:ntages cited in the varfrus options ,x i ~ as well as in augmenting the advantages by an appropriate allocation {#Q4 of resources and other management techniques. 1 5 .i j A. Continuation of Present Practice n . - J Objectives f{f ; UI t, w j g,. g In continuing present NRC practice, the objective is not to preserve 2, w $5 the status quo. If nothing else, the changing character or emphases W @pg}} g of hearing intervention on need for baseload facility issues would h continue to demand improvements in our treatment as it has in the 4h1 E)f@s r past. For example, the impact of conservation measures and co- %.j generation on demand reduction and issues involving reserve margin WIPJ .ICIc,gj and reliability criteria would appear to bring greater emphasis as to M:,6,h future hearing issues than in the past. Rather, the objectives 7 n J.gf associated with a continuatior. of present NRC practice would be to y~,- improve our basic approach through generic research on forecasting ? " ff. methodology in areas such as the impact of mandatory and " incentive"
- 1"q M.
corservation initiatives, enlarge our multi-disciplinary skills to ,ner ..; n M deal more ef fectively with the subject coeplexities, and irr.plement .Me., J, U and improve our star.dard review plan and Regulatory Guide 4.2 to y.y ppy improve the quality and uniformity of treatment. The collective w /. d impact of these measures in a continuation of the pre ant NRC [ approach would be to provice a better basis for decisionmaking, to M}U improve the defensibility of such decisions, and hence likely
- ll, *
.n.
- ,.e 44 Enclosure "B" r
.u. ,,, t -,..,m n'., a - n" ' * * *. 4 ' ' ~ " *w~ ' 'n a, ,w h w.
- 540C$t-M:~ A-O AO~'N '; <
~
i reduce the frequency or duration of treatment.of need-for baseload facility issues at hearings with commensurste advantages in reoucing costs of delay to the ratepayer and improving NRC's image of objectivity and professionalism. l .1 5 Pros: {l q E It is expected that successful and timely implementation of measurcs to improve our current practice would make it more cost 6 effective, consistent, and creditable in line with the above objectives. $W
- y. j Familiarity with present NRC practice poses fewer risks and ej uncertainties than options involving major reforms.
e5*l . y.; l0 M,: g?d 3 The staff has demonstrated a capability to reach decisions in M%p e this area, although at some substantial cost in manpower, con-3g ... _ r tract dollars, and hearing delays. 6 i*: p- - c d '0 Cons: Q OXP rIE ? 2C Even with the indicated improvenerits, our approach and its conclu-M h,. sions will likely remain controversial ar.d continue to involve troublesome hearing issues. $lt
- t.K aR N,..M
- g -t o G.& av?, 45 Enclosure "B" 30 - EW~mg'e.=m& '...;*~~,;3 2rHW ? T <.,. q;;.. ?y ;f :y, 3 'T RC 3.' ;.;.. y m, ^ i h_ s w - g. m. , u . 43.,: m,< g < < c ?y ,S. s. ne. 2 ~ i- _s ' Ya " ~ ~ e
s. 9 ( l Multi-disciplinary skills are required for a comprehensive treatment of need for baseload facility issues which are difficult t for onc person to attain and difficult to integrate the contribu- $g tive inputs of several persons. This includes expertise in a EW. number of fields such as power systems planning, econometric and PrA kit [$n1 judgnental forecasting, technological change, economics, and g$ E" $( decision theory. Shortcomings of expertise has, in some instances, O bl :9 created a poor image of NRC performance and this problem cannot E R wholly be eliminated given the outlook for resource constraints. y. kM Given the important responsibilities of the utilities and the Fy ..- c States in this area, the complexity cnd uncertainty of forecasting -y methodology, and the asymmetry of cost penalties for forecasting g< kN error, little useful social purpose is likely to result from the du? $'X-NRC's continued treatment of this subject which is commensurate Epp with the substantial costs to NRC plus the costs imposed on h.h MN lf f*; ratepayers by considerin) these issues during licensing hearings. 3y t, 0, s . t. 4 .w < u Given that realistic forecasts of the amount of demand reduction ' Ec - ,o h.$.?;l;k due to conservation s.easures are likely to be substantially ,. y :. f(( smaller than estimated potential reductions under highly favorable 39 .'.' d assumptions of voluntary and induced conservation, the NRC can n: :n scarcely escape an undesirable image of promotionalise for its tip p ', ey .:n + involvement in such analyses, since the staff would adhere to a . c, . I,..m' policy of conservative realistic forecasts in its decisionmaking. [ t -;,;, m 46 Enclosure "B" r_ - f 8 n .v. w- ~ w. w%a.wh -*c -1. mm -.t , m %x < sm., . rn zu u a u narm e-Uu 1 l i i
While there is a NEPA function to be performed in the review of need for baseload facility, the degree of the Federal Government % T oversight of private investors in the timing and dollar cost comparison of inve,stment alternatives constitutes a questionable invasion of the risk taking responsibility for financial decisions generally accorded to the private sector in our political econoay whenever the environmental impacts of alternatives are essentia'ly comparable and the major question rests on the timing as to when these impacts shall be incurred " opposed to the impacts of not having capacity when needed.$ B. Generic Rulemaking e Over the past year there has been a growing awa.'eness within NRC of an I intensified interest on tne part of many states in exercising an @y experided role regarding the analysis of.ieed for baseload facilities %) g@ib: f in the issuance of Certificates of PLblic Convenience and Necessity. t This raises the spectre of possibly wasteful duplication of oota g;- DT n.k: 3/ E.Sd - It is recognized tl.at privately owned utilities being publicly regulated
- .M do not have the same degree of risk as other private enterprise. However, g@
in terms of the rationale herein presented, it is true that utilities must compete with other industry for sources of capital and for managerial and ,d professional talent and their profit and loss statements resulting from y good or poor investment and management decisions can affect their bcnd f.3 ratings and financial outlook. This is not to say that the Federal Gi,J Government might not exercise other measures to encourage private
- M enterprise investment to engage in activities more conducive to the
- 4. N national interest other than direct interference with financial deci-
'i 'sions on a case-by-case basis. ) .-, +.1
- a. --
I.w. 47 Enclosure "B" h Qf y ) f,~ -[
- k_
~ A L w m.: r = f w & w & & m ;. @'-^^ ,),b g
- en.px ym.ewse
,mgaw amWwxU u. x = M m
4 \\ i _g r \\ /, hl. /,. (% %'4 p g .g i l 9 gathering and analytical effort as well as contradictory or contro- / versial divergencies of methodological procedures between NRC and the States in preparing need for baseload facility analyses and the y!. treatsnent of hearings issues on the same licensing action. The NRC is dMd bd already taking steps involving closer coordination with States over h1 g methodological procedures and the development of a common data base. G ,f In some cases, arrangements for joint public hearings are being explored. w; j 4 ? Thus, one of the main, although certainly not the only, objectives for f 56 Q considering generic rulemaking at this time is to develop criteria and b procedures that will result in a more effective coordination of NRC (Ui kyl) and State roles in the treatment of need for baseload facility issues 1% that will be less wasteful of resources and provide a sounder basis @${t .g g for conclusions regarding the reasonableness of the utility's proposed hu::t
- F inservice date for the baseload generating facility for which licenses W
are applied. g As an option for regulatory policy reform, the success of the rulemaking [ action, among other factors, will crucially depend on the careful 7- ; delineation of objectives and the structural design of the rulemaking 9-.,( proceedings. As a result of our case-by-case experience in dealing r. 2( with need for baseload facility issues as well as insights gained from 1 the OSP workshops on need for power and success factor criteria pertain-ing to proposals for legislative reform, we have a sound basis for s predicting the variety of viewpoints that will likely be registered by c. e 6 l 48 Enclosure "B" & ";' K H W ?'r! M '" ? TF ' M i -- [ ~ ? _ I '. A % W W -.: _' OIT2U
,;p w QT-TMs!Ywn 1 e;wn various participants in rulemaking proceedings. The NRC was successful iff ~,- in conducting rulemaking on Early Site Reviews without a hearing, -i a principally because public interest groups were generally favorably L. $!l disposed toward the basic concepts of ESRs. However it is likely that Q9,JT NRC policy objectives regarding generic rulemaking on need for baseload b facility will prove sufficiently controversial that hearings may be 4. ,f.. '[ useful or necessary, at least for some of the suboptio.'s discussed below. ggy hS!i In view of the complexity of issues in the treatment of need for
- .& u.
baseload facility and variations in their importance for policy [$ n reform, it is desirable to consider, as one option, comprehensive gh T d generic rulemaking which would treat criteria and methodology such as gg those proposed by NRC on a preliminary basis.E# These criteria have i
- .1-,.
been favorably received for subsequen'. discussion by representatives h! ~ a m of the States of Iowa, New York and California and have been accepted 't, by OSP for inclusion in its recent report on Improving Reg latory .2Ng WS Effectiveness.
- j. &
M W;j e ?[ *, c., 2 ~k," b# ee Appendix 0 for letter f rom Harold R. Denton to Lawrence A. Golicap of the S State of New York, March 28, 1977. 3g-l e y ,9 , ::e -g o g. 4 II F +^ Q 0 'r pf 49 Enclosure "B" -- - - - - - m v-~% -*== O . _ m.,,-- n. gw-n~. ., J., _ : . [ : ;N. .Ll ..Ys l? Q 1
.,4 JA' h i,, ?V. [;i.N Q fMib The following are examples of some questions that might be addressed 4Ej $%?p by parties to a rulemalting hearing on comprehensive aspects of need gf fi for baseload facility analysis and some possible proposed NRC rules b;/6@ related to these questions: 3.gg ) q$$ Question 1: Can ay methodology of forecasting electrical demand D.8$ Ut,y growth be demonstrated to be the clear, best choice over all otner MU[d candidates and, if so, how is the validation of "best" to be performed? T+,y p,+g;y -k.,i 4r;& (Possible Elements of Proposed Rule: No specific methodology of 449) forecasting electrical demand growth shall be stipulated for utility kM iri applicants or State agencies in treating this subject in meeting TB HRC's interpretation of NEPA requirements. The parties will be free Mil Cc'A to make a reasonable choice of basic types of forecasting method- -n. ologies such as econometric, judgmental, or a hybrid model.) 'y' m .,h p " I [!= Question 2: What causal f actors af fecting demand growth should be .E3 J.w - evaluated in conson by whatever methodology is selected so that l tests of reasonableness can be applied on a more specific and uniforn -7. JQ @4 basis in a comparison of forecasting results, thus pinpointing key [. iW ~ J areas of fundamental disagreement? 7.a-(Possible Elements of Proposed Rule: The list of causal factors, o such as those suggested in the Denton to Golloop letter of Appendix 0, shall be explored in common by all forecasting methodologies by A e k O k, a,,.,.s1 ,-.-.r y, ._ ( : &, : _; [ d'!@ 1" --.3- . m r. w ~, n m e n -,f. , u .1 ' ' Y2' ~ - ~ ~. ._'4 d'fE _ O ! "I _1.Jt a- -_ da L- 'A, A *- ' d.! : _._ - [ +
- f 3
s
n I e y I f utilities and States to facilitate the application of tests of reasonableness by NRC in meeting NEPA requirements.) e Question 3: What considerations shall be employed to determine an appropriate " window-of-launch" involving an acceptable rance of years for an inservice date of the proposed baseload f acility in lieu of a k ?J precise year of need and what regional or utility system-specific variations are reasonable in applying the window-of-launch concept in i need for baseload facility analysis? ihM (Possible Elements of Proposed Rule: The application of the window-t of-launch concept to need for baseload facility analysis shall be based principally on estimates of the range of uncertainty for key Ip w g[tjjf[ causal factors as these impact demand growth forecasts for the h, l service area of the utility' and other areas receiving significant A.jil power from the proposed facility, estimates of the asymmetry of cost 30 'h penalties for forecasting error borne by the affected ratepayers, q:g consideration of any options that might be foreclosed by having too b, g large a window-of-launch, and any significant differences in overall M
- h Q
environmental impacts that might occur by deferral of the facility y 5 a for several years. Normally, the NRC will make a favorable finding U regarding the applicant's proposed year of need for baseload f acility, N c if its evaluation of year of need falls within years of the ?+ [ 1N applicant's proposed year of need.) -Mj 9; Y, .-s +&D e y s '. i 51 Enclosure "B" >n y -- - _-- yv, ^ ~ T 'r?j
- r..r
- ' ~
'=L; ~ ~ ,,-s ~ .J S ER .. m.;-. q'
- 3 w t_
.s s _x _h ? 1:i:. u ~ 2 =~, ~ ' ,k!+"- ' I' ' o
= y 1 Pros: kb Ih i A comprehensise rulemaking would provide a useful pub 1'c forum %.ta. i bN for a more focused and extensive debate on the treateent of EM G1 methodological issues than is found in a typical case hearing. h 'jsO w:1 N a7 M It would lead to the development of accessible public records on h2 2- "f/) a comprehensive and systematic structuring of the interrelated nt,, l j"f q issues involved in need for baseload facility treatment for the v4 purpose of facilitating an effective coordination of NRC and n@:f .e ? State roles in reviewing the applicant's need for facility bJ'% analysis. M 5?p, T 7% It would provide in in-depth airing of divergent views encompass-
- V
(( ing a more balanced perspective of the complexities and contro-3.g versial issues to be dealt with in need for baseload facility analyses, which would likely lend support for criteria such as e. those set forth in the Goiloop (Enclosure D) letter which fall -l, between an overly rigid and overly permissive treatment of methodology. 3 -a NRC and laboratory staff as well as officials of utilities and - z.i responsible State agencies will likely gain valuable insight from cs { ,.i 4, these hearings which will probably lead to improved methodolegical ~ 4. .I 52 Enclosure "S" yW v.,.mmm ym y~. px.[r! } y ' "%,,j'.)d'. : C'.,
- Tl@
+ ~ "f
== ' i !^w =AY L . a:: : 2 1, ch I - %*~ - ': -5 =-
1l lle l I 1 practice regardless of whether decisions trisult from the rule-making which alter NRC/ State government roles or our basic ? f.t approach in dealing with need for basstload facility issues. ,.jj 2 Cons: Because of the complexity of need for baseload facility issues, their controversial r.ature, and the wide variety of parties to be heard from in the proceedings, comprehensive rulemaking is "5 likely to be a fairly lengthy and costly process which would f likely entail a hearing (possibly 30 to 45 days of hearings plus F e, extensive staff preparation time). I y n., NN Mg.'h Key NRC staff resources will be diverted from other productive ,r assignments during a comprehensive rulemaking procedure. @D Dealing with so many controversial issues in a comprehensive rulemaking, including those subjects of lesser importance, could k Arm detract from focusing on the more crucial issues and increase the ,hh d disadvantages cited above versus rulemaking on a more limited
- ps9;
?h:4;h*: scope of issues. JMd K2t Nlifh W M el; ' p..)j ,if N ?}'. l. .,a l,1 53 Enclosure "B" y, '.-- 7, ~7;. f , ~ - ~-.
- .a;
' m.:.' c c~c.- e e 4 ~. =~ = ~ ~ =
.h 2. Segmented Rulemaking on 'aroups of Related Issues, CP Stage N9 pvn %k5i a. Reserve Margins and Reliability Criteria 4 Objectives @J As noted in an earlier section, NRC practice in the treatment 7 9,4 $sy of reserve margins and reliability criteria is generally to af: rely basically on the range of total system reserve margins 1 3llj and reliability criteria as supplied to the FPC by the , Elf (!)d regional electric reliability councils. Given the financial ..g.a fg;y difficulties and uncertainties faced by utilities in their % [... investment outlook, there has been a tendency, in a number hf wh?{ }] of instances, to press reserve margins and reliability
- b?4 criteria to lower and lower levels.
In other instances, e, d[ economic advantages and nublic interest benefits of placing ,1 ] on reserve baseload facilities involving hign priced or [q imported fuels lead to reserve margins and system relia-s ,p bilities which justifiably exceed the upper range of the ?:.i 4g criteria provided by regional electric reliability councils. s I;.N Moreover, reserve margin requirements involve other issues } . l including (i) bulk power and energy transactions on a power j pool and regional planning basis, (ii) failure rates and, j i i hence, plant availability factors associated with nuclear versus fossil-fueled plants, and (iii) the definition of "baseload" facilities and the fluctuating relationship of r-1 .'t i I i 54 Enclosure "B" .4
- A y m a-,.. g e m y w g n 3 Q'
- p r'-~.;"ya,1vy Q Q 2?: 1.Q C
C J AV= G:::% ?' -JW L=u .w.
- 1 ..,~. b I 4 m such units to intermediate and cycling units on a seasonal, [ 1 n' diurnal and day-of waek basis. NRC positions on a number of these issues is presently not well established and supported R by appropriate data sources. Greater State involvement in ,r need for baseload facility and the growing advantages of l } improved regionally coordinated power systems planning ~ r indicate an objective for NRC to develop better rationalized M{,?i positions or policies on the treatment of these related (f, ; l P issues. .3 1 7 p Pros: Rulemaking on this set of issues alone would provide a J*Ny
- .. wr
$s greater focus of attention on the need to formulate p.yp policy in their treatment and provide important N.t. c.., information and insights on present utility practices dl' ? w... and state deliberations on these matters which :ould be of value in our own policy formulation as well as Q -.c d:@dA l developing improved practices of NRC/ State level - e, @W cooperation including regional planning measures favorable to the public interest. ' V L.~ K . < lf .x A limited rulemaking of this sort could provide insight [ ,y n into some of these budding issues before they cause f;; hearing delays in specific cases. /7 ..y l 55 Enclosure "B" m
- r-~s
,.73 y 7,.., y myy _ . (-- w q m q #iy ~ ': ?_"U_[ '
- i... _ ' L.,.. ; -
p ~~;.. .a ^ t _Jz- "D-x -5 - ind "w-l
~ I "55 Y, y,,, Mi h5 Cons: I-l%1 NYb m;w A number of other, and currently more controversial, g$ j 4ej aspects of need for baseload facility treatment would 6 J . y.9 be neglected by such a narrow focus of rulemaking
- 1 gy,}
unless, of course, this suboption were coupled with h@$ one or more other key suboptions falling short of a ' ({glj y; C comprehensive rulemaking, 7A r), f +,. My NRC staff is less fortified to deal with some of the "W tp n l VMA issues inv31ved in this grouping, raising uncertainties h $ Q;j, w-over bottom line conclusions of the rulemaking except ce Jf$.s1 in the sense of demonstrating the general lack of ' k'cj systematic rationalization of the interrelated issues
- r. : ?
'ay participants and the divergence of views which would re a y;.., serve to indicate the need for a development of flexible NRC policy and the importance of support for various i- ', areas of generic research to better understand future c. ] C, ).'; directions of policy development. 9-4 b. Demand Growth Forecast Considerations ~ ~ -. ' Objectives In our preliminary criteria for dealing with causal factors affecting electrical demand growth (see Golloep letter, v. <s(( SG Enclosure "B" Q., W ::~~ ' ,3,.s.,;-% n-r-r-~rmyyr-~ ny-r~~mvv, ?; .( 'gy .g.4 .,,g.:o.. ,f- -,7 y 1 $j[p ._-e e a.1 e 3+< .. c .u. .~x _f. o.. ., a,, e __ _;. O, _, a .~
3 m . Enclosure D), six groupings of causal factors were identified: (i) economic and demographic growth factors, (ii) price Qq increases and rate structure changes, (iii) voluntary and &\\ induced conservation measures, (iv) degree of regional Q P saturation of key uses of electricity, (v) fuel substitution, pd! f1 and (vi) technological change affecting demand. Another yd 4 factor which might be added to this list is " cogeneration" (i.e., sales of steam as well as electricity produced by p$ L:c h p#.j baseload facilities, or alternatively, production of steas and electricity by industrial firms for their own use or M sales to other industries thus detracting from electricity M >M s -demand growth for utilities). Cogeneration of the former type has not been a very important issue since a component of f' ii-T demand for steam sales has infrequently appeared in utility si:i) i l,#1 demand projections and contract provisions for such sales .g l l would need to be established at the preliminary phase of g i investment decision. The second type of cogeneration is also i not very advanced on the American scene, making its treatment y i highly speculative at this time. J.@ I i d I 'lf In view of the strong interrelatedness of most of the other '[ causal factors and their potential importance to electrical M i i demand projections, it is possible that the first six of the ]., l above factor groupings could all be included in a rulemaking J/ I option whose pros and cons are to be appraised as a unified i whole rather than as separate suboptions. Thus, the principle [ 57 Enclosure "B" .y 29? "I
- 'v.
d} m _ m. = m
G4 A_l.1; h:i@b.n ebjective of this defined scope of rulemaking would be to ,n h. g %\\& O IJ d focus attention to policy formulation on a related set of (g?C 3 er issues which has provided the greatest frequency and source h@jh of difficulties in case-by-case hearings to date. The first i M three questions and proposed rules addressed under comprehensive 5 L' f rulemaking (see B-1 above) would also be appropriate to this +... - hY! -/ more limited scope of rulemaking on demand growth forecast 3p,5 W. fh$kt considerations. 2hw n] ?Y s l @ 39 Pres: - 2.%: S
- ';i'
,,.:yW
- q./ r.l
%p.:?,v The completion of rulem king proceedings on this sizeable, s,gx,qii though circumscribed, grouping of issues would accomplish y ,p N,T, a considerable part of the NRC objectives listed above s ,-y .. ~.:~ i ';'J that are associated with a comprehensive rulemaking on ab
- 4..
need for baseload facility. s dgr 5,j A lesser amount of manpower and other resources would
- 9.;,N
/ 1 be required for this limited scope versus comprehensive ,,.j rulemaking. c';; , - y I 5My NRC staff has a fairly strong background of experience s - p to deal effectively with the set of issues to be raised in this rulemaking option. 1 /A 58 Enclosure "B" Q..t:, rn-.m a-.4.,-rea g - r- # ' r - P~ 'W " " ' l,. 3 Q +- ,~ ?, - l -
- -E!
-..N- N- - 1A [ ^
ax.:Q cc:,, n:+
- .>ay Mh.;l q
Cons: . y .'s) y Although providing a substantial portion of the objectives .[J} m-g of a comprehensive rulemaking, limiting attention only C.l C2'! to demand forecasting issues would fail to provide a g@:3 systemmatic and balanced perspective on the policy kNh ~
- NE development of need for baseload facility treatment.
, _,q For example, intervenors in case-by-case hearings are Q generally prone not to focus attention on nondemand 95lf l y;, '%y O cos'siderations (see below) which might, in a number o'f .j{ff n {. instances, singly or collectively justify the addition @4 of baseload f acilities even with quite limited or no 9 [L5 .no growth of electrical demand. Moreover, this lirmited
- MS we scope would neglect the treatAent of issues of growing importance and difficulty associated with reserve 7 ;;
ST) margins and reliability criteria as discussed above. ?,;j h; 7_. -., Considerable commitment of staff resources would be [, required to deal with this option (perhaps 10 to 15 N .Vi J' " days cf rulemaking hearings plus substantial preparation 3;,, tire). 4 j ': c c. Engineering Economic Analysis of Advantages in
- ^
- 4 Adding Baselcad Facilities i
x 59 incin<ure "B" .5 _m,-ve,- ,.., -,., -. _ =,. ~- 5-r-- -r -A - ^- A ' &^ ^^' s
,g%w t e& 4.} Objectives g,) This rulemaking option would involve the development of t ..YQii f+t 4': policy on the need for baseload facility criteria, especially M$1 W;fb3N where persuasive justification of facility construction is s [ydl +$ provided by an analysis of cost relationships leading to a p ii determination of economic benefits of proposed or potential c. s f, ; G actions for placing higher cost units in retirement or on b-reserve, especially those units whose high operating costs W ns Qp}-f( have resulted from a sharp escalatfor, of fuel prices in it.gs ktgj recent years or units whose cost of retrofitting of air y> g y po11utica controls and other coal handling and ash oisposal Mk G
- $[4 techniques would be prohibitively expensive to meet environ-h;ad-$kh mental requirements.
%_ V,.J y(t'y w IT;' ' n:..- Pros:
- k.,,
?::
- y i
The importance of cost considerations to current utility decisions in adding baseload facilities to their generating systes is not realistically reflected in present NRC .,.4 q'G F. g. ; treatment of need for baseload facility analysis which .O 'i :W focuses more heavily on demand growth forecasts plus ' (.{ reserve margin and reliability criteria.
- c. %
.k. ,,4 2 Y Ji 60 . Enclosure "B"
- ~;* T.g... mm m
- w "*-*^m"'. ~ -.= N - ;, - m~% : n - "O 4 q ig - r_ 4
- >(
__ Q-b ,c u- - - ~ -. _u-p i
? 5 O In view of increased expectalions of & aand reductions 4. I due to conservation measures, the importance of this justification u r baseload addition is likely to grow p (ggl f d in the immediate future. f@ a f jij The staff effort required for the limited scope of this g j option is not unduly great since the principal burdel rg ? k of testimony for the staff would be the conceptual-Q Q' P ization nf the rationale with tae bulk of the supporting h..i q t l data provided by utility and other witnesses. b, t i r 1 d Cons: g j l y 4 &S Although of some considerable significance to a well-M 7 q . d [ rounded policy developecnt in need for baseload facility f).. treatment, a hearing on tnis subject alone would appear 1, f ? highly iubalanced and, perhaps, promotional for this k
- c reason.
g; q ,yj g 4 Witnesses with expertise in this area would be limited I principally to power systens engineers et ployed by .-k utilities, vendors, and engineering consulting firns. 7 y c.- A wide variety of utility experiences and methodologies 1 4 l. for analyzing cost relationships involving a heterogenous 2 1 61 Enclosure "B" y -.m j wy,< r -,. py -~; y:q .:.Tf ' s ^ E ' e 2_.._. 7 m a. m .1_ _t
l <rt 'llN /r.,E aix of generating units by fuel type, age, capacity, j y f;. y availability factor, operating and maintenance cost, 7p) gg - fuel cost and outlook for retrofitting air pollution W 'a +,g controls, etc would enlarge the difficulties of developi.sg M,IM h coherent conclusions from such an esercise other than bdr W}V4f to understand better the nature of such variations and 9 J,p $g their causes and, hence, to build appropriate flexibility 3 4 -j N,M into our policy development of this treatment. t ' 3 .v.M, -,<f #.. fs,%- d. Public Interest Advantages of Improved Fuel Mix in 16 '5 DN'S Adding Baseload Facilities f.w %g g bi% Objectives M:9, .4-..
- kh',
Th 6 element of potential justification fer the addition of v,, .U 'I ' ' baseload facilities involves an analysis of public interests g. f of national and regicnal ir.portance stemming frcm an improved mix of fuel for the applicant's system so as to reduce vulnerability of unexpected interruptions of a given fuel e' Ji type (such as imported oil) or risk of a sudden and dramatic _ 7 [? rise in prices for any fuel used in the applicant's system. rc ~ ' q,, Public interests involved in this criterion might alone, or o combination with economic advantages in retiring or placing cr. on reserve high-cost units, support the need for adding baseload facilities even if there is forecasted little or no growth in the demand for electricity in the applicant's r-service area. The Nine Mile Point 2 initial decision to o gqq w: pmt _ wwmw.n' 5?waw * ..r 7_J V8% i ~ m'Jf.] sZ TC'E.rE I- %[+ i' 2 "* ^
0 y1 kkd r 'hn? issue a construction permit was principally based on this l ~6 I ed consideration, which is of considerable leportance to the IEI,E*' goals of reducing our dependence on foreign sources of oil. l 1he principle cdjective of rulemaking on this criterion gg
- Auld be to further advance and formalize our policy in the 4
y treatment of this important aspect.
- Pros, j
1.ittle staff effort would be required in the rulemaking kh proceedings on this subject, since it is anticipated 1 c that the chief witnesses would be solicited from a lead Federal agency nther than the NRC and perhaps other ,gcp outside experts on national security implications of W.sd t s' w;,, reducing dependence on oil imports. Jpyf rqa , s. 7^.1 -+>:. er _. i A neglected area of policy formulation wNid be bolstered. 7, ; p ,Kg:. Cons: eMaf-Ql d k 1 A rulemaking focusing on just this one item would ge{ ' s :c)J appear unbalanced and possibly promotional even if the ,;pf;1 We key witnesses were from other federal agencies or TEQ 1 , s s? outside parties.
- Cil p'..d N,'(d
.I 3. Rule =aking on " window-of-launch" i - l y).i 53 Enclosure "B" ,mpm?p*;q' m p:.s ps'~7~:mgq W K:n *-- lf>v. Q u =2 + .x. m sw._ Lm... Ja Q Y' N.
- N_..'
' ' ~ :a' d - ' ' '"
cn h Oblectives Q'<m$ Rufemaking on the " window-of-launch" concept currently c.
- ,S utilized oy the NRC staff is another basically different approach to policy development in the treatment of need for w
baseload facility issues than either a comprehensive analysis of tre several criteria for justifying facility additions h or the segmented suboptions involving grewings of related n? ~ Rd. issues. The window-of-launch concept was first introduced VX dh in recogn8 tion that the uncertainties of evthodologies for idy forecasting electrical desand make the determination of a yq, precise year of need or scheculed inservice date *r the
- ,p"y
,M proposed baseload unit an impracticality. Moreover. the l 'W
- 78. '
asymmetry of cost penalties for forecasting error likely i!0 o'. ' would favor starting construction on a facility earlier <r rather than later than a " correct" forecast would have ,i justified, which would indicate that highly accurate 4 c forecasts of year of need are not highly sensitive to the protection of public interests. A co piicating factor is i that the wide r'nge of reserve margin criteria generally ^ reconriended by regional electric reliability councils t ,y provide for a significant margin of forecasting error regarding year of need; thus, it is not clear what the social cost would be of operating below the reserve ( j margin, which complicates the calculation of cost i i l penalties. However, it wculd appear that a wirdow-of- ) launch involving a period of several years surrounding 64 Enclosure "B" .-.-....a- ,,,-,y..-e ,-..vr 7 '. - - :rn n ma-~p'vrrw ; -, - -n?"m ; v mm yL [ =.. -.se 1 s-o y. r I l Q g.,_,... ,,'_- ' -. v,=w,- --rww.- z.. 'N-- 4"#*"""<*"*" z~c
sm% the. proposed Inservice date of the planned baseload unit h'Js:g hJ would proeide a reasonable and adequate test for the ) [ 4 justification of baseload additions to capacity. The sain f d1 objective of a rulemaking proceeding on the window-of-launch "{k
- .m concept would be to engage the public and other interested y
parties in a discussion of the acceptability of this concept hf)'sj d and to provide informed inputs which would help establish
- G!hi useful criteria on detercining the limits or outer ranges of
$-A)Q. a window-of-launch for our licensing review. kh:$ $/h Pro 5: .hw%a cty::. o n >s Q?$y? ) v.u A successful outcome of such a rulemaking exercise 4OL would tend to reduce case litigation of the finer 53AT2
- llIr features of debate over alternative dernand forecasting q}t.
viu sethodologies hich art difficult for non professionals a '. 0 to pursue in their entirety. Moreover, professional ~1, forecasters themselves are of ten in strong disagreement f:n-3 over the detailed features of forecasting methodologies $6' ,,f which can be highly confusing to licensing boards as ./jJ well as the public. y W- ,:-:-M N It is possible that a rulemaking proceeding on the ~;m window-of-launch concept would provide widespread D[ acceptability of this criteria which, for a sizeable ^% y;; M. 65 Enclosure "R" u,,o ny yz ..,, = - ec .m n,y z,-,--- 7 _:;,- _ a._ = ~^L -.L L- ~ =w' U'- - ' NA "I . - _Q s .n m ' p _g., -. w-=wy:-*~.) npr;mmer, ,y
- -A Ct..
.y - - --e x: a ..-,-a _qr w 2 + -. aL
';f:?. rs
- a. n vrs7 y:.g g
the proposed inservice date of the planned baseload unit' %.. n FG would provide a reasoaahie aad aoequate test for the
- io +
)p$Ni justification of baseload additions to capacity. The sain q ]p:g objective of a rulemaking proceeding on the window-of-launch Wiyp concept would be to engage the public and other interested .,$ll pl.% parties in a discussion of the accepta':ility of this concept Mi D and to provide informed inputs which would help establish r*IY'M1 ry 4 4:r4 useful criteria on determining the limits or outer ranges of ri j;i. +y,1 a window-of-launch for our licensing review. y%g; i ksk Mn fd Pros:
- .," s I$f.-
v.
- - y
- r.. -<
~,f A successful outcome of such a rulemaking exercise 'gr, would tend to reduce case litigation of the finer 7l i,.,
- u. g-
~ features of debate over alternative demand forecasting ,( methodologies which are difficult for non professionals to pursue in their entirety. Moreover, professional forecasters themselves are often in st ong disagreement ';8 K over the detailed features of forecasting methodologies
- 7. ' ]
which can be highly confusing to licensing boards as
- 7.,
well as the public. [' It is possible that a rulemaking proceeding on the window-of-launch concept would provide widespread o acceptability of this criteria which, for a sizeable r _ 65 Enclosure "B" a.,.,g-sn,~ -ny m wer m.m-m,-;r m m y; -; i ( _ ::, 2 i __ _i _+ i - ~^^ ~ .4. -R .w. [ [ a1*, e". _?_'I-I-- ~ - - ' ~ ~ l
fraction of CP applications for baseload facilities, c would obviate.the need to examine supplemental or {g%) substitute criteria of justification, ^C 3 t I The level of staff effort for this scope of rulemaking n option is not so great as the comprehensive rulemaking option (perhaps five to ten hearing days would suffice iM d9 plus preparation time -- also, it is likely that a s hearing would not be useful or necessary for this s LM limited subject). (*> iVC g.g Cons: pm acti s$.g v The pragmatic nature of the window-of-launch concept N,M could limit witnesses or commenters principally to the ]%.':: 7.' NRC staff, utility representatives, engineering consultants, 'SD +c etc. and might hold reduced interest because of different [' s professional orientations and experience limitations
- +
.. ssrm for more academically oriented witnesses who would (fg U$$ v possibly serve as apprt riate witnesses on certain u.cn
- e. fg-?
methodological aspects of a comprehensive rulemaking on [fy 4:g1 need for baseload facility issues. 'Q >.,N.' N S .c f4 7:o Hore importantly, a rulemaking confined to window-of-Q; m., launch, even if successful in gaining ac'ceptance and in '= C l i o'y ' w; ; 7-c.c j -W 66 Enclosure "B" _h - - +. m -}-, 3 ; - yy ,m ;. br2 c C m w: - _m - i ' -'. a ;.,. v-
- 1,, mss _ _ -
.,,m y ge-y. 6.,, ,, g 7. --,. ,.--.7 _y , _3y, '(> _, 7 d,. 7,;....,_ [ i {g F_1- -- 3.---- - -.n7 t t " + a f '_ C _of 1 I (;gl 1 3 - b'- s ' - 6gQ f 2 5_d I d2_ f,y
1 l 1 [ td 1 &n promoting refinement of this concept, would not serve s 3 T to develop policy guidance for treating those CP i 4 k applications where the more improtant and least Y&h {w.'tg controversial justification may be the cost saving ..n y${h.7 advantages of high cost unit replacement and public hbN w? J interest in attaining a better fuel mix. p - as T. - 0 x s gg] 3 4. Rulemaking on Treatment of Need for Baseload Facility, Ot 5:y d #3 Stage, and cn Criteria for Reopening the Question af ter CP p ( is Issuance f: ? r il ' q Dd6 Objectives -w ,hh[ There has been a general tendency of intervenors at the m-- \\cqf" '4$ operating licensing stage to raise contentions on need 4-G for baseload facility that are more appropriate to the scope f. 9. of analysis of a CP review. The NRC staff feels such a '[ broad scope of analysis at the OL stage is unwarranted and 'n 0g M wasteful of resources serving no useful social purpose. In h,:- accordance with decision theory, analysis at the OL stage yg;, must be forward looking, which means that sunken investment ,e a 3 [(;, l costs are to be ignored as a decision criteria. Thus, the b* question of demand growth may no longer be relevant, since 6 l . t.u it is abundantly easy to demonstrate on economic grounds [ alone that the sum of fuel plus operating and maintenance costs (i.e., variable costs) of a nuclear plant once t \\. 4 ^ 1 67 Enclosure "R" m.,;.;m .-.7 n p - y - - r -mre e p<*wv v pe y ;,.g c . _. y.-. c., A ,e ( C. { ~ _v.?:. x_ l 'WO N
- -Y
' *!A ' ' *"' ~ ^ ^ '" __3 L w F T"%.g 7 n u G_:: h" ' * 's F*, ~ " ~~ l l; - s i_^D, __ g l _ _, ' ' -1 : ' 2E" - "'l
l constmeted is a far superior alternative for operat' ion than' all other fossil baseload units in the applicant's: system. r, The Ilkelihood that demand for baseload energy will have -.k q fallen to the point where it is economically advantageous not to operate a new nuclear unit, once constructed, is not easily imagli.able. Thus, the principal objecti.e of rulemaking N, on the need for operation of the constructed b.aseload facility "i at the OL stage would be to develop the tests for reasonableness that could be used to define areas of importance for analytical treatment at the OL stage which would, as a minimum, provide rationale that rules )ut analysis of the need for demand growth analysis and all its related issues, W fccusing instead only on an analysis of the least costly ...s variable cost alternatives among the existing baseload units
- 4l%n in the applicant's system and the newly constructed unit for hi j
L,YNi which an OL is applied.
- +-
p o L' i Pros: ..C. c_ f0 The successful outcorce of a rulemaking action on h l 4 -:4 this policy development option would, as a miniscum, g O be to rule out any treatment of demand growth
- g rl forecasts in the OL analysis so long as economic fv)j advantages can be reasonably demonstrated for
(,I gy Ch. O I p,% 'j iq 63 Enclosure B" ! _i 7 7 ;..,. .7 r, g- ~ ; _. 7; q m.s - - gg r - ']g [ . I_( - - 1J' i v'O- - =: M m ' (3 3 _ ,s?-) T ^~ ~ ^ 5 , ~,
l y operating a new baseload unit (once constructed) as Wws't yy.. ; opposed to all other baseload units,in the applicant's .g VM -fj*pg system having higher variable costs. This would save g 5@ gp the applicant effort in the' preparation of the environ- . ggf $1;T e -t..,/ mental report, NRC staff effort of analysis in preparing f iy ( the environmental impact statement, and hearing board r (,j.jg.l and public effort by ruling out all intervenor inter- ^*qD r (.ep rogatories on demand growth forecasts including such p{vy Mf/([ issues as conservation and the development of solar h) ' y!(.9 energy at the OL stage, k$Lb IXfl., %Wj There is a possibility that the results of rulemaking Eh "9h; action could be to preclude any consideration of this .*a w subject at the OL stage, through the development of tests of reasonableness regarding the merit of f. [j r.. alternatives. e, .1a , ~,,, Cons: ,s ~ n,n if The preceding would require moderate NRC resources. n.p W '..I NOTE: Exploration of this subject may identify v. criteria that could be used in addressing this subject after CP issuance where sub-stantial construction has already occurred, e 69 Enclosure "B" . =: c;U rJ 7 .m 7 -
- - m
,m .m 'j^4. -,: my -~~y,mmr;#tn ~'* * ' ; < g g f &,t... s-7. ~ o ? :- * ' y s c -i-. - < - - - - - ~ ~ ^ ^~ 3e _M,Tp-- - - id'
- ,..= 7
^~^ ^ ' ' ~ ^^. 6,. L, "
- x. -
yv -t Q _ b,, s. ?,' = l- ^ *---. .e..- . -.s r_ - ~r' r r ~ ~ ' ^ I ~ Q dl* L-
h-I'h..d which would have many of the above pros and
- g
~- firq.
- cons,
] 'i 3 A - < C. Regional Hearings on Need for Baseload Facility h'h e N 5 Objectives $f In a growing number of cases a substantial fraction of the power to
- c be generated by proposed baseload facilities will be consumed outside I%
9 i the service area (or State) in which the plant is to be built. In tne g, case of the Seabrook and Summit Nuclear Plants the export sales would be half or more of the unit's net rated capacity. This trend can be Wu i1 expected to continue since the utilization of the lowest cost and ' f, j j$C environmentally least disruptive sites in many regionc is forcing %e pt Qy location of new sites to greater distances from load centers where W y electrical demand is experiencing its greatest growth. Moreover, the 7j consumptive losses of water for closed cycle cooling systems increasingly associated with new baseload facilities ;s begirming to assume regional W '..n importance in numerous river basins where water availability is being pressed to its limits in meeting growing demand due to the cumulative 3.o j' igact of electric generating needs and other consumptive uses. ~ Ul ) i ~ 'y _ At present, regional planning analysis for baseload facility additions Jr l is highly coordinated in only a few regions such as New England. (( the Northwest, TVA, and Middle South Utilities. In most other regions L'? [. 4 ,t, ); e 70 Enclosure "B" y'~ R. 37 3 -.w*y ' myon ~. , ;.g j,_y-f: gt. z,,, yx, ;,
- a. __ _
2- _N
- Y-bb** '
h 5-'-' i' ~d ['bi, _. ' ' % : ?'? " ? M. W.G id L " ;1L L %. ; 7 Q 'Lw 3 & T' N
Oh.w, only werk coordin ticn cf regional baseload power facilitics exists in p the form of notification to the FPC of intended plans for the addition Efl5I.i ,, J.h, i Ki.lUS and deletion of baseload units of a given fuel type by utilities (,y Ib.fi/ operating within one of nine electric reliability council regions. N.s.. a k 1 \\ wrc ypp gry it.ese are sof t planning exercises inasmuch as there are nn,arctions
- e. N -
- NYA1, if a utility should change its provisional plans, thus arnounced, by W y:
,h
- cancelling the proposed units, altering the fuel type and plant size, u
yh% or changing the proposed inservice dates. By contrast, licensing j%yg, actions of the kind engaged in by NRC, while requiring a modicum of
- g.-
gj,g6'4 analysis of regional or power pool demand growth and potential power .,, og N[,h sales and purchases between utilities, has a decision focus on a hard (@2cb. ' Y or firm planning decision relative to the proposed baseload facility. E e - b e# t eg. 4 C.. C.l The inclusion of soft planning information such as is now available Qi i* for the region within the context of a hard planning decision is an 7 obvious mismatch. An objective of NRC exploring the option of conduct- _d ing, or the desirability of a lead Federal agency sponsoring, regional hearings on the need for baseload facilities could be to shed light on ,, l what, if anything, should be donc to strengthen regionti coordination W,,J,:., of baseload facility planning and what positive bearing this might i yield in bridging the present mismatch between soft regional planning m i ., [ information and the hard planning information requirements of current 4 licensing practice. A related problem is the examination of whether e l ~_ the current organization of the nine regional electric reliability
- ,i.
.s -, y J 71 Enclosure "B" 1NWO ' q Q'T Ql[J '. ' T' E. f 'y:
- ~ ~ '
vyfr-ya : m- - f r s.-e--ya-3 4 v.; y c ,.~ y;.y w, O ' g,e +,, 6* s.y, ,y + U"- s L_ x. _- _ M h# d C ' :.s 0 -
- ii D"-
-A-l l l l 1 EI i 5 " -a - l' *- i _.. ' i _bYs_s. r l l
i coum ils provides the most appropriate modules for the encouragement of greater regional coordinatica of planning baseload facility additions [9 in view of the growing importance of water related impacts and other )! environmental concerns in facility siting decisions. Issues such as i these serve to interrelate need for baseload facility analysis in the g applicant's service area with both siting considerations and need for h ~n j k. baseload facility in a much wider regional context. p j Pros r, 7 i I d Such hearings, if carefully structured and appropriately focused, Y': i could provic'e useful insight to the NRC and other participants on h. 54 i the desirable opportunities and a realistic assessaqnt of difficul-P, 4 ties of aromoting greater regional coordination in the related .v satters of need for baseload facility analysis and facility
- i. %
siting along with clearer expectations regarding the outlook for [] bridging soft regional planning information with the hard planning h h f ed Q information requirements of licensing actions w et er per orm ) at the Federal or State levels. The New England Region and the g vna W TVA Region are examples of regional hearings which would be h potentially most beneficial. M lg 4 y If properly structured and.2 cognized under NRC rules, the results of such hearings might be utilized directly in subsequent k[ irl .m. 'Yb' .-1 y.. l l 72 Enclosure "B" ~,.. ^h" f *]9Ep4, og +. ,;? \\{ Y_. ed 'C. s __,<t ,_ i .. ~ r rt: ._;l~ f e9 t g r T F g-T g g jip-g.gw,, -sM Me ' ' ' ' "y{,Nfeg u __aw __m-w .: n- _g _ _,u
NRC CP proceedings as sufficient justificction of ne:d fer ['? baseload facilities. V19 ay.;.c3 w ,fg Cons: bia).) ms ' ' f5bf There is cause for considerable skepticise that such regional ..r x, g ~ g.#g;. hearings, except 'r. the cases noted above, would accomplish such,
- /p r' ?
y 1,.i if anything, in the near term at least regarding the mismatch .w@p:.1 b.",li between soft regional planning information and licensing require- .y '. :, p4)p..q . cj i ments for hard planning information. 3 SP.yjas g',y.1 . n :,s ,s. \\'16 g%W Such hearings would provide a partial duplication of regional MK i.yn'Qj need for baseload facility aspects considered from a generic TM M*; $gQ methodological standpoint in the comprehensive rulemaking option \\%:.Q TQgjy (B-1) or in the more limited rulemaking option (B-2-a) dealing (%.gf with reserve margins and reliability criteria, assuming either of .g" n~ these two options are pursued along with regional hearings. i.g l Such regional hearings would afford questionable benefits relative [,, to costs for an improved NRC treataent of nced for baseload xo
- [
facility issues in a number of the regions where coordination of c v j ,,. M power system planning between States is not y'et very advanced. t . 7 y .,..N.,7-I t w' 'N t i g ,, 7 - f 73 Enclosure "8" }, j-, '- -l:b S V '. ~ ":, ' - ; - n s,. c, - m r~ ry: -, -..
- .r.y+
- ; ; ~ -n---- ~. .,,. y, : ~ .. % N 4 I' _y " e 7 '_ A s g ^ t L. _w_. m m- '4 +f L t
- g g%
f s s. w gp * *- a l f.h ,.,^ ,e 't' d' ,.S N * ',
- . ') -
- ~~
. -f ,. _= _ .k O g_
N-The hearings c:uld be fairly c:stly of HRC staff cffort, yet the [a h Qd absence of H2C staff participation from such hearings would tend g g ~a to weaken the benefits for NRC policy development and our leadership IP.' b ,i in promoting a greater coordination of NRC and State efforts to e improve licensing practices and avoid wasteful dupilcetion and licensing delays. g d i f" Since these hearings would have to bis repeated perhaps every } couple of years, the number of hearings involved would be within a factor of two of the number of CP case related hearings required; y thus, it is questionable whether such hearings would be cost
- .j q
h [ effective even if optimal results are obtained. k) . i N a Vg -.1 D. Use of State Analyses for Forecasts in NRC's Treatment of Need 1 74 for Baseload Facility j;, 4 Objectives The NRC's treatment of need for baseload facility already makes con-siderable use of input data, analyses ar.d forecasts from ot'er Federal u-agencies such as the FEA, OBE, and FPC. Where State prepared forecasts ? of electrical energy demand or forecasts of demand growth factors are F. available, these are also used by the NRC staff. The NRC currently h has a contract with ORNL to develop a generic methodology along with p actual forecasts of electrical demand growth at the State level. Some + t.l.. j .d 74 Enclosure B" gr< pyg -,y. ;. ;
- p,. 7 :.; -
n;y-wSW.,- ~. m _ - 5 n,. ~ ;D b,7.p'.%,* ~ Q'? '? l ? r. i. '}: . [ Tid: . [J r.- y ,.,.,, t.. m s : 1 n~ ~r L'Y T _.., _ v_ l * : y $ ' * ' :_._Q : > 3_, L ; W '6 , ~ ' ~ D? O'.< t A_ wyr;w gn.u- ; w.c : - x g u s : m ;;;n, m ; c f
,Ma % M GTOT,75 M W A N EU?#7'3sk W D'W T 7*%%W5M!?tS a ~ .u t of these forecasts have recently been introduced into our licensing Qy 3 reviews of need for baseload facility. Moreover, as seen in the Golloep letter (Enclosure D) the NRC is actively exploring the possi-bility of utilizing the consulting or staff services of a responsible
- C]
State agency to provide analytical inputs to NRC's licensing review of 'kh ~ need for baseload facility much in the way NRC now contracts for the services of ERDA national laboratories for similar review inputs in f w, accordance with guidelines provided by the NRC. N[ The alternatives which must be considered at this time are wheth?r an expansion in the use of State analyses or a clearer policy formulation h. $7 in relation to tt'e character and controls exercised over such inputs sj[ g&f I should te examined under one or more of the ether options: M M.; Continuation of preser,*e practice (A)
- l:
lvy Generic rulenaking (B) d l.; ' Regionil hearings on need for baseload facility (C) MS -a, $hl The principle objective to be sought in the selection of one of these Q a: alternatives for promulgating a further development of this kind is tu k'j me ,Uh:- improve the overall cost effectiveness of our treatment of need for 4 baseload f acility ist,ues, ,M;, S t: ';Y. I
- j.. '
7_- ;? ?.) .p 75 Enclosure "B" b.1 --~ ---- ~ ~ - -- ~ m WM
,f* MMY5sLS P.' y-n G H,i,
- h!
1. Continuation of Present Practice ' ?N yj. i.A:, , 5 Pros: f.[ 50 rg [G$ Since considerable activity of this kind is already
- n
-tf; under way to improve our present practice, there is a f) cost-of effort advantage of placing emphasis on this T!1 -( ; option for further progress in policy development J.' 1 y'fc affecting this coordinative thrust wi'.h State and other _.9
- 1.,
Federal agencies. O w = ' t.1 Cons: yc s s Without a concurrent exercise of one or more options .e discussed below tha use of State agencies for contract h inputs might proceed at a somewhat slower pace or ~ possibly with greater difficulties than with the q exchanges of information involving State representation in rulemaking action, regional hearings, or legislative action directed to this subject. l
- 4 76 Enclosure "B"
.---e ,1~_m m num 2'=- ". -.'v.t { ' G I.[s* . ] '{; _. #'. 'i ' 4 . ~- U j.,, 7 -y . - g - J r-i>. ^ - ^ * .,7,.g3 s e 1 W 5
y ~ m, b The dif ficulties and management problems in directing contracted State inputs to such reviews in accordance d 4 $f) I with guidelines established by NRC would prove to be {. substantially greater than with the use of ERDA national kN i laboratories. .[M MM 6Yt%' A policy directed at implementing widespread usuage of 1 8 E 1 State expertise in this area would entail substantial 9 p ..n'^ near-term commitment of staff resources. 3 ~y w 2. Generic Rulemaking h Gi.%y$ pzfg Pros: yn 1 :.
- cao.
.e u. c ;n :..y This sort of Federal / State cooperation would likely My @;gt have enhanced benefit with rulemaking, since policy
- ' ; wJ7
.qw .. f L,ei developments on the treatment of need for baseload $Me T1N 9NY-m l facility will have clarified and certified the precise degree of compromise between an overly permissive and . gy. p an overly rigid set of decision criteria on the accepta-ffjy( s.sm bility of methodological procedures and decision criteria 33% .m,. involved in need for baseload facility and related $8,,5
- litDF issues.
1;fiQ Y.W ; i N. ~ J@ [. N..I ll:- -J 77 Enclosure "B" _"d k d +, I ea' w
fyj,:A a..j ~ q@<m#j rn w a-The publicity given to this sort of NRC/ State cooperation d,?)j 5, e' $m h{ in preparing need for baseload facility reviews would N;@ likely accelerate the number of cooperative arrangements. gp hl$N hD3 Rulemaking in this area could identify areas where kk YXJ State analyses could be incorporated directly into 2;ij PjDJ NRC's decisionmaking process, thus saving staff resources ?p.Y y; h and avoiding duplication of effort. yp;ty .tf 9%u r e4; P. $M/' Cons: $(NY\\ 1T Extra staff effort (believed to be small) may be M,..
- MQ.
- {',F required in the rulemaking proceedings to focus on
'i enhancing the benefits of contracting with States to " TE provide analytical inputs to NRC's review of need for
- , ~
baseload faci 1ity. 1 l [, _P ' . i; f,M 3. Regional Hearings on Need for Baseload Facility a v r . (i, ~. Pros: sq The enhanced advantages of State contracted inputs to NRC reviews would most likely be even greater with regional hearings than with rulemaking, since a large } y o i 78 Enciosure "B" =- = ' W !'? - ' v. ? ? . mi:. ' ' f e~_:'=.o'i W 5.,~ m _ __mu -, g,- ;.- e r z.n _ mg. x_ou .u w _ w r: 1
dd a P' number of States could be expected to participate in f rt.q'.:. I hearings of this kind, k.$ The lack of uniformity in State procedures and utility .]4 l + l N system characteristics af fecting need for baseload facility treatment would become far more apparent in regional hearings, and provide thereby assistance to ,g NRC in overcoming difficulties arising from such differences. k>.w - h Cons: A [
- *a l$E)J
~..h. The likely delays in staging sequential regional 4 6,.'j hearings would retard the above bancitts of the hearings 7 ., 4, 41 fnr a nu.-ber of the regions following later in the p,%f M:L schedule. 3f; I ,e W e,:: e, r ;. f,. Ul ..- Q .l. The inclusion in regional hearings of the programmatic .n N.y thrust for contracted State inputs to NRC reviews of J9 . 3
- i:
need for baseload facility, unless presented in low Ffp e.w key, may receive a poor reception from a number of c9N.! ?fb States which may have inadequate staff resources to ,..7 gg.. cooperate in such a program or which for other reasons u.2. d v. may find this approach less appealing. 5-4 ,,a 79 Enclosure "B" ~ ^ -,a N' ?"::.ya .~ ,W Y r T } 'w O L A* L '." ' ' ' " e 'r- ^O'w -y L *2 i L
~ y: c,p p!N i: F 13 D E. Legislation %N gh gA ,g Objectives A.1h Options for legislative proposals are quite varied as seen in the OSP M legislative initiative as set forth in the draft report, Improving ~ Pf1 Q2 Reaulatory Effectiveness (March 28,1977). The principal objective for the legislative initiative covered in this staf f paper is limited LW;l tl to modifying only the NEPA provisions affecting need for baseload 'Z v3 i1'. facility treatment in such a way as to serve one or more of the follow- ,yQ, ing goals: r /i? ta b A complete disengagement of NRC responsibility for reviewing need 'jg -: 4' ,-]. for baseload facility in its licensing actions, or 4 4 The enabling of NRC to reassign its complete responsibility for review of need for baseload facilities to States who qualify by meeting certain criteria esttblished in the legislation or in 4 '1 accordance with guidelines provided by the NRC, possibly established by rulemaking action (partially discussed in D-2 and 0-4 above). For non qualifying States, NRC would retain some, or all, of its 1 present NEPA review responsibilities according to the specific 1 form of legislation in this regard. 80 Enclosure "B" f 5 R iT.~" " ~~' C -~ ' J r' -; ='
- 7. _
w m.~..m.,. ~.- ? 'i%+ ' AS ?' -4 $ - A (,_ . pt : e!: -:n-
W%) Pros-I w L .c LtL The social benefits to be gained from legislative initiative will de ?y M vary in accordance with the specific design of the legislation in dealing with one or more of above goals. The greatest social q (I gain would result if legislation succeeded in removing all Federal l responsibility for reviewing the question of need for faci'ity, E timing, and other financial risk taking decisions presently ? F i' associated with NRC's need for baseload facility analysis and s treatment of related issues, provided that the delegated States y review these questions in accordance with acceptable criteria. L Y)Iid It'.y cu A considerable redaction of NRC staff effort in dealing with need (( my for baseload facility issues could be acccmplished with a com-t. mensurate gain in benefits by the utilization of staff resources "[ for other pursuits of deserving priority.
- ,:g.
y y ,a Cons:
- T Q' ff.
The prospect for timely completion of legislative action in h N:i.T achieving the above benefits is uncertain. i.'f te s.. %{f,i I The chances of successful legislation for repealing or stream-hh v: m lining NRC treatment of need for baseload facility may be improved f a O.s GC' ,b 4 ' 'a 1 81 Enclosure "B" ' " ~ 7 7;g ' FlF 4 %. m= ,=*W ,[ 5 .,, q=y e .,c 5 J,y ' 6p; N't + ..f wn - =
- u 3_ G, c=
wm = ^lL%, __.t I
3 V5% o yw.n 9 m k N$'h h1 somewhat if not encumbered by companion legislative initiatives A;M Miy dealing with siting issues. Since the analysis of siting options l [i,( a has been described by the courts as the " linchpin" of NEPA require-ments, it may prove to be more successful in reducing opposition y ' LM+ to NEPA amendment to deal exclusively with reforming the need for k g, E0,,$.) baseload facility treatment as presently interpreted i;nder NEPA, h%., [b P for which a relatively strong case can be made. c:a MMN g4;e w IX. RESOURCE AND DOLLAR INPUTS OF OPTIONS g -g ks llA, I w W A. Present Practice: The manpower requirements for the staff include Ny fg about 2 man years / year in project management effort and 3 to 4 r:ff_% man years / year in technical support for a total of 5 to 6 man-0 D.vd .r~ {,yh years / year. Contractual services are estimated to be $150,000 to .[ $200,000/ year for technical support and $20,000/ case for environ-f,f4 mental statements. These estimates do not include OELD and ASLB effort which is e-timated to be 10% to 20% of the environmental hearing effort. 3.y,. y ,y .M A comon expenditure by applicants for the environmental portion .ic s, 1;I of their application for a construction permit is about $1 to Wy $1.5 million. Conservatively $100,000 to $150,000 is attributed ,;? to the need for facility evaluation. .y TQ s n ,.t: 7 82 Enclosure "B" s n, w -~ E.; 1n~'-f, m' " 9_ - 'At F' 9 t r446-g,,.jp;g-m. .c y. 3,. 'r c y )$- .fi g _ _ - e)je v 3, c n7,':i, sa c~ A vu A,, ~ -.. a < N
- E
.'y.' ,t_ :-
s l ~ N N s 1 Delays in the envirotwental statement preparation and the hearing a fj y{ s process to reach a partial initial decision for the environmental l portion of the CP application have not been significant in recent p p ?j cases. Postponement or delays announced by applicants have been e C4 } substantial. Many such delays are probably more closely associated I with financial ard business decisions rather than the need for facility issue in the NEPA process, although recently reduced CL demand has undoubtedly contributed to the utility decisions on dg timing of facilities. j d When an application for a construction permit is delayed several 9 months for any reason, the need for facility input must be re-p N 1 evaluated in the context of later data which generally doubles g: the case cost. However, the establishment of decisionmaking h//jd .ps criteria and tests of reasonableness in this area could obviate L'I $f wpA %l:.\\ _ the need for reevaluation in many instances. Recent estimates indicate the applicant's cost of delay at the CP issuance stage JU2 $fs,y? is approximately $5 million/nonth assuming the plant is needed ?C according to the applicant's schedule. If the delay is as much 'K y v.w:n Pg as six months, the premiu:2 to make up each month of delay is L4Q pl ~d about $9 million.
- p.N q,3 n'
4l?n If it is assumed that the average environmental hearing is delayed h y, by the need for facility issue (i.e., it is the critical path QH .tr l C/DJ ' t ;.. I l ..b. (rd 83 Enclosure "B" .x s..D ' ' 3 pm = 7 - # #T' N "O - 3o -h y ^. ~. -a , -~ y . g; -e y -7, .q. -; y, i s l/y t s.., m r[ '/; \\ ,$~3i fil
- j-3'. Np-
,y .g.4, "[, ;d..- _Y' m'i ~ ; hil ' ~
- W
^ e--.
Nh , w f-g ites) for one to two weeks, the cost to the appiicant and ultimately h to the consumer far outweighs the cost to the staff. 'q C. y 4 .itNJ, MOY B. Rulemaking: It is assumed that extensive hearings will be - A.x< e f(% required if a generic rulemaking is proposed on the full scope of ?v 5;$1 the need for baseload facility issue. National scale rulemaking imp %?j would take several months and at least 3 man-years of steff + 1_,. .n u Qt effort and about $250,000 in contractual support exclusive of N ph 55 OELO and hearing board efforts. Other parties participating in D";M Q such hearings are likely to invest a total greater than the m ).$ combined NRC costs. If the conclusions of the rulemaking define Pf;, ga and limit the scope of the decision process necessary for NRC \\ t. k .y s firdings associated with the need for facility required by the W+We, .l treatment of alternatives in baseload the NEPA process, significant +,: - cost reduction associated with delays may be realized. Treatment a,, 1/"'. of limited groupings of related issues is apt to oe less ef ficient s and productive than treatment of the full scope of issues. 1 ,e 1 Treatment of the window-of-launch concept could be very beneficial inasmuch as time consumed during hearings probably derives from a s i .f one to four year differential in need for facility projections in D consideration with reserve margins. L s >u 84 Enclosure "B" jiy ~ ~.ym. m c~,n- -,. +~ : 7-a? l-,,- Q "; - 7 ~ ( ~; ' r s * ,e - ,1 g,e. s g, t e / s e e O d - _. = - - d - 44 -
- =#f
= d- ^-' " -- ^- $ b.. b
I 2 $ $? It is assumed that a rulemaking on need for baseload facility at the OL Stage or the criteria for reopening this issue after the issuance of an LWA or CP would not require hearings and a moderate f/h Mk staff effort of less than a man year each would be required. Mdi (-, C. Regional Hearings: One approach is to have such hearings con- . 1 ducted by other Federal agencies or by interstate and regional } agencies. If NRC participated without the reed for power issue f 1 being dispositive, a substantial amount of staff duplication ~ \\ could result. A carefully circumscribed regional hearing where p y$f; +. e NRC participation would occur only if the hearing resulted in a 0& $6 dispositive finding for one or .se proposed facilities a saving 4 E&2 of staf f ef fort could result. This approach would require rule-f!@y AN p;e making. Dollar and manpower requirements would likely be about iW the same or perhaps somewhat less than current costs; if one YM considers the cost of rulemaking and the fact that such hearings h would have to be repeated periodically. g .m Y Q3 D. State Agencies: Contractual services for technical support may y43 SU.d be reduced by 50% or more and the $20,000 for contractual services r il nG'a for ES input would be eliminated. Staff effort of project manage- $g .,p ment, technical support, and standards development of criteria kd s: and guides to work with the many States rather than two laboratories ~ would be increased by a factor of three'or more with additional .g a a manpower needed during early startup phases. Q/f = :l
- f. 'b 85 Enclosure "B"
~ s, g_ rd I I ,-yp 7
- *(
[ ~f ^ n ~ ~, s n e ?- k' a ^- "- -
f$i) mp k The impact on applicants will vary depending upon the scope and e.j M.'.9j3 detail required by the particular State agency. Their require-IE 13.1 l,* '...M ments in the need for facility review may well surpass those f?: 47.? J3 necessary for an NRC NEPA decision. In this case, the State's n.e.y Dj,f need for facility analysis woiild repisce the staff's need for facility analysis in the NEPA process and the impact could delay MOW the NRC decision, although it may reduce the ultimate delay to Nd (yQ the applicant resulting from a separate dual process. a V:ff* b*j k[IIf ff[ E. Legislative: While this approach could increase NRC staff require- 'k: ments slightly in the near-term, it is cler.- that this approach v@x.? s would significantly reduce the NRC requirements ur. der the NEPA g~ gq > < l s. process. If the issuance of a Certificate of Public Convenience &::4%. ;; s hI.! and Necessity by a State agency could be taken as an adequate ,,y. x [ '. N. showing for the need for facility issue by NRC, additional impact ,e is, will occur in those States that do not at present perform detailed 7,, -i independent analyses of this question. w e '(. 3 M l> _,..Os- ,giv 9. - n_,' ^ , y. r. y m H a s .c.
- .s. s
, ;.P n 86 Enclosure "B" l< 1: l ' * ' } l,;[<} S my; - ~;mvmmq),y*} '..?
- '~
"~ 3 ( ; : ' ' ^. [- s4 -3 i. . :;i,; n,, -- (, -c f - N,,_ ([ ~ n.., _ _ n c. _s 4 _ ';..E g. ~.
T TABLE 5-1 RELATIVE COST EVALUATION G '*j Probability of Additional NRC Implementation Cost Future Annual Cost h '] .3 y. Option Hearings NRC ApplTcant NRC AppHeant PRESENT PRACTICE Base Base Base Base B5se H A. b,V B. RULEMAKING Very Large Moderate to Significant u 'A ' i 1. Full Scope of Issue Very High increase Increase large Decrease Decrease 2. Grcupings of Related Large Slight to floderate y .Wd Issues High Increase Increase Moderate Decrease "A Decrease h 4 0 3. Window-of-Launch Moderate Moderate Moderate d i. d Concept Moderate Increase Increase Decrease Cacrease for a lit and Moderate Little Moderate Moderate E - ,,s Criteria for Reopening Low Increase Effect Decrease Decrease N Large large Significant Significant C' REGIONAL HEARINGS y Increase Increase Decrease Cecrease t, s t ). 'd f D. STATE Large Littse Significant Slight B ;y, q[f AGENCIES Very Low Increase Increase Increase Decrease 2 ij; - 9 ... g W I) E. LEGISLATIVE None Li.tl e Little large Possible Increase Increase Decrease Significant n D Decrease A ; .q ', x -Q y. ',-19 ,o o )7 % pr.$ - Assuming that " bottom-line" is reached that would be dispcsitive of subsequent CP reviews. n 3 .ru , _ :f d 5 Sl _\\p J .. n 5 x 5^
/ A.. t.. / c,. x , ; ; ;,,." < d > .g,' ' ' 'yQ2]%,Qq$lW[i$.i>> O$ }l6 A % % ;Q M Sk N%Q hh *T N GbW5 - ~ ~ ~ i. n. Gli@ @ Mbwl TAELE S-1 RELATIVE COST EVAlt!ATION Probability of Additional NRC 1: plementation Cost Future Annual Cost Optien 1;carinn. f.RC Applicant NT:C Appitcant A. PRESENT PP.ACTICE Base Base Base Base B. RULEMAKING Very Large Moderate to Significant l' l. Full Scope of Issue Very High Increase Increase Large Decrease Occrease 2. Groupings of Related targe Slight to Moderate Issues High Increase Increase Moderate Decrease Decrease l 3. Window-of-Launch Foderate Moderate Moderate Concept Moderate Increase Increase Decrease Decrease 4. OL Stage - f(eed for Facility, and Mdera ce Little Modertte Moderate Criteria for Reopening Low Increase Effect Cecrease Decrease N h Significant Large Large Significant C. REGIONAL HEARINGS Increase Increase Decrease Decrease D. STATE Large Little Significant Slight AGENCIES Very Low Increase Increase Increase Decrease J E. LEGISLATIVE None l i ttle Little large Possible Increase Increase Decrease Significant Decrease P. E ssuming that " bottom-line" is reached that would be dispositive of subsequent CP reviews. A N
W C. 9, h I b k..T * ' &$l Enclosure C , d U Section 8.1 k-[2'3 l 1 Seview Craft i Q '; April 1977 W ew/ 'EWIRO* ENTAL STAY)ARO REVIEW PtAN A. m% .+ D FOR ES SECTION 8.1 CESCRIPTIC4 CF THE P0wtR SfSTEM We3 'h/ K(Q u 8.1.1 SERV!CE AREA 8.1.2 REGIONAL RELATIONSHIPS N'\\, es}- PEV! 9 INPUTS W4 Eeviremental Report Secti'ns I !;r w f 1.1 System Cemand and Reliability 4R "g i Envircrumental Reviews 2.1 Site Location s.a Standards and Guides hace '#7;'t 92ti j &q 4 Coesultation with local. State, and Federal agencies l Q { Pesp3nses to requests fer addittemal infoPaticn I 1 I A;pitcant's aanual report i -A l M ody's Pubtle titt11ty Manua_1 ,y i Ja I Knnual report of appropriate electric reltability council to the Federal Fewer Comissien (FPC) in response to Creer ho. 353 3 5'; ~ FFC Form 12. Pcwer System State-ent ', N s y k,,.,l Fewer pool annual reports cr stuales ,-.Q l REV! N 09truTs jyf; g q~:. L,d Envi mnrvntal State
- nt Sections i
I i.- I ,,U 8.1 Description of the Power System ~O 3.1.1 Serv f ee Area l
- ,d 8.1.2 Regional Relationships Othee Envire n etti Paviews
. ;q5 +' i 8.2 Electrical Energy and Feakload Deeand f l 8.3 Power Supply 8.4 Staff Assessment of heed .. U 9.1.1 Alternatives hot Requiring Nw Generating Capacity / I 9.2.1 Alternative Sites: Geographical Considerations .b;q l ,'1 { S.1 1 Enclosure C .m, ,w Y' _p lW f " L A L-=M6 N' " ^ ^ '
_ _ _ _.. _ _ _ _. - - - ~ ~ ^ - -**~ " Q, h.. X %nw gi& h5 ~ sej ,x iW: r Q t.y% i April 1977 99 I. PURPOSF ANO $00PE ( m,; [,lK The purpose of this entfranmental standard revfew plan (ESRP) is to direct N, the staff's descriptfon of the applicant's power systes as it presently exists ~ h.% including both its service area and its regional relationships (e.g.. power pool
- b agreenents, electrical transfer capabilities diversity interchange agrecuents.
wheelingcontracts,etc.). w b... f iJg$.A The scope of the revfew directed by this plan will include a description of [hh (1) the service area or areas. (2) the types of custcmers and major electrical load centers to be served by the proposed project, and (3) system factors that fit p are unique to the applicant's power system. This review will fom the bast's for I */d] Section 8.1 of the enviromnental statement and will provide input to ES Sec-
- b. Tv tions 8.2. 8.J. and 8.4 Ws M;G$
' *fih,: II. REQUIRED DATA AND INF0pMATION gl'? The following data or information will usually be required: (- l . gs 1 -,y3 3 Y' ' d 'l A. A map indicating the geographical and political boundaries of the l service area. The map sh>uld indicate rejer electrical load centers and r.ejor 1 intertte transfer capabilf tfes with reighboring uttitty systems. i e 8. The current population and the nwber and types of austomers in the U service area. <.- u o f,^,' C. The percentage of electricity (in tems of total electrical energy) -3' I.74 that the applicant supplies to each State in its service area. Include per-centages for residential, connercial, and industrial customers. i ) ,pp f,y,' 1 D. Identification of the power pool (if applicable) or alternative mutual-assistance arrargemnts in which the appittant is a participant and the consult-ments of its reabers in teres of reserve margin requirements, planning, and 4 j3 int ownership of generating capacity. ~ l l pa 8.1 2 Enclosun C l l i l w
- g:
t I l 1 I 'yuns + %~~'"; fyl$ A ,( . = - - yju nm en- >a ~ -M5 W" ^ (
. - -, q-l j l f pcj fbb Vka y1 Accli 1977 di ( E. The planning and coordir.ating functions of the appropriate electric M relfability council. F. A map of the power pool (if applicable) and the electric reifabiltry council regica that identif fes geographical bounda'i?s and tre Federal Power Consission's (FPC) power supply areas. TS !!!. ANALYSIS PDOCEDUpE The reviewer can obtain most of the required information for this analysis V, from Section 1 of the appiteant's environmental repo-t. Supplanentary informa-tion can be obtained from thody's Utility Manual. the applicant's annual report. .;g and data filed by the applicant witt, the Federal Power Comission. I S \\ d The reviewer will examine the geographical boundaries of the applicant's I service area, the power pool (if applicable), and the electric reliability <x region of which the appifcant is a part. Major electrical load centers should kh l be identiffed in the applicant's service area and indicated cn the map of the j 9 service area. These load centers will be checked by examintr.g FPC Form 12 O.< I5}!d Schedule 17, which provides similar information. The current pcpulation and the nw.ber and types of custaners in the service area will be examined. The reviewer will ider.tify the major ty[.es of irdustry and careerce existing in the service area. 1 The revfewer will identify the electric reliability council region in which ?A, (%o the appitcant is a member and examina any power pool agreements in which ths applicant may be a participant. The reviewer will also examine the applicant's M,m. major power purchases / sales with neighboring utility companies. This infonnation can be obtained frm FFC Form 12. Schedule 8. Any wheeling or diversity inter-t,4 m/ change agreements will also be examined. i g. g -b i l Al M l .a [ ; I 8.1 3 Enciesure C 1 4 [t i e n i -_w ' T:: \\'.L- " -J "lT 'l Y,'- - - * ~ Q^ ~^mM**'TJR.??}]#?;,1.'_. Ph ' : T ms"f p n 1,~ m'
- a. n+w% -
u- =
- h. _ _ ~
. 3 o
- b O.,. 4, ym 4.1 M
f y,b M J April 1977 E @' y 4 IV. FYsMlAfl01 K S.);)' ~ The reviewer will ensure that the information and data derived from the ,a uj analysts are adequate to serve as a basts for characterizing the applicant's ..U y^ 9,. w,. service area and its regional relationships. The reviewer will identify any g,Q unusual features that affect subsequent evaluettens of the need for power (e.g.. g6 1arge industrial custcoers, a noncontfgeus service area). Ir. such cases, the revf ewer will ensure that these features mill be accounted for and that they hylI@! have been esplained. t S[fe4 24$ M V. INPtfr TO THE ENVIOMEhTAL STATEMENT "f hy> The depth and extent of the input to the envircrunental statement util be f 1 Pf.M - governed by the cmplexity of the appitcant's servlee arca(s) and the number of ?M %w joint owners of the proposed facility. TM following infonnation will usually !N61 be included: k) d '.M, A. A brief introductory paragraph ;ctor to E5 Sections 8.1.1 and 8.1.2 [ p that provides the name(s) cf the applicant (s). the percentage share of the A g._, [j
- proposeg plant that each applicant will cun. the station name. the nuenber of
} generating units proposed. the net electr*cJ1 rating of each proposed unit, and i the applicant's proposed enth and year af initial corrertfal operation of each ) un1t. u c\\ ) r B. ES Section 8.1.1 will include r4:s ti.at indicate the geographical and political boundaries of the applicant's se-vice area, the power pool (if appit! a s N cable), and the apprcpriate electric rellatility region. The service area map [. will indicate electrical transfer capabilf tfes between the applicant and neigh-V. V boring utilities and also the major electrt:41 load centers. The population [';.; served by the appilcant should be stated aler g with the area of the systes (in [( squaremiles). Major types of customers s*culd be identified and any atypical b.(. r, situations should be identified (e.g.. an estremely large industrial. customer). p t~ The primary types of industry and cormerce for the region should be identiffed. , ' " b.i m ? .,1 2 1 8.1-4 i+ I J A* + i e 'i 7- ? 7" ~ i[ 7._ 3-- ~,7 %,.w.~ m y< y r y v*'T"="7*%,y. 1 e p. t _ m _s _.s Q~ {d z: L3!W W Ji= '^
M...:f, o e $d ge '% W' t' y l April 1971 b wat C. ES Section 8.1.2 will include a brief description of any power pool of gy 4 which the appifcant is a macer and will identify the electrfe alf abflity 47 council to which the' applicant belongs. A trief discussion of any major existing ~ ~ or proposed power sales / purchases or diversity interchanges agreements withirr p 3 the region will be included to the ES. If the appitcant is a merber of a power pool, a orief discussion should be presented regarding the legal convettments of the power pool members in terus of reserve margin rea.uirerents. planning, and '9 sharing generating capacity. ,y ? $$ i The reviewer will provide inputs or ensure that inputs will be riade to .j the following ES sections: F, wd A. Section 9.2 The reviewer wf11 provide as input to ES Section 8.2 CM identiffcation of any anomalies of the applicant's service area that may affect 3'.) energy and peak 1 cad demand forecasts (e.g., an extremely large industrial cus-p toner). f yQ (- 8. Section 8.3. The reviewer will provide as input to ES Section 8.3 N=C ff.:1@r factors that may affect power supply such as diversity interchange agreements. s.. wheeling arrangenents, etc. l .t* 1 C. Section 8.4. The reviewar will provide as input to ES Section 8.4 TN power pooling agreeents as they might impact reserve margin criteria. ] , T i.3 D. Sectier. 9.1.1. The reviewer will provide as input to TS Sec-E-Q[, tien 9.1.1 fac*ars that might encourage or irpede the pcssibility of purchasing l' electrica' power rather than installing new generating capacity. ' ), ['} E. Section 9.2.1 The reviewer will provide as input to ES Sec-gl
- e' d.
,3 9.* tion 9.2.1 identification of the geographical boundaries of the applicant's service area (s). / W ,e ; j b 8.1-5 l4 ,1 k "A .p ',c am- - - TW'jWT V~~ F 15 ~ ^T . M y i^ y, mF=_ ~ ~ x ~ - xa -n w
e s.e ~t,
- A n,5e L
,1,/w.s n &n...s.. v. fg [ p," d April 1977 _.A -..o V;LYNf. WJ.9 J VI, strtpthcts s,4.. e s I 'k 1. Federal Power Ccruission. Nations 1 Powr_ Survey Parts !.tv. U. $. Governmnr = gy{4K Priating Of flee. Washington D. C.,1970. /,.j;n'y b. sd b/q (ds~'W G.my M.%,- s Q,*Ih.'1 .. 'r.W I J *$!s 'b';)4 i'thb. 1..$. ghhh y itA er , up h,;y,,,cg p. m* w v,,. [ 'e.*l. 5 7 A.a pre i :.' 's A l.g *l* e,'f. 3 s 6 l?, y'$1 4 5, 3 8 4;. ' :i,,~; o ..n s , y i s 3 4 '. g a .j Y t t a %28 4 g / Y a ei J.:. 3 e.e p.i A 4 3' ,t % 3.9 [ ?'. 7+ + 0 e e 4 % A 4 / ;, Enclosure C ( 8.1 6 r i. j + 4 4 I y*
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kp'% *3 .CWp'P& l'h ( Section P.2.1 Review Craft April 1977 ENVIRONMENTAL STWJC FEVird Pt A1 d aen F04 E5 SECTION 8.2.1 POWER AND ENER*T RIQUtaEMENTS 8.2.1.1 ELECTRICAL ENERGY CENAh3 8.2.1.2 PEAKLOAD CENAN3 6? REVIEW ! W rs gyr}' fnef ronrwntal Re:wt Sections f.r.,% t f v 1.* System Canand and Reltability 'M Enwfr e mental Reviews t.;o 'Q 'e (f H 8.1 Description of the Power Systes 8.2.2 Factors Affecting Growth cf Cemand Standards and Cutoes p%.N None kW 0;., g ( Other 7 .x A 7 ' 5.T;% t censultation with local, State, and Federal agencies Federal Pewr Cornission Forr.s 3. 5. and 12
- ff; f-1
.g Jf * / Responses te requests for additional information [dtson Electric Institute. 5sf es to Menufact*arin1 and Mining Estib11th-5, ('1 ments Classiffed try 5!C Code-linTfern scatistical eeoort to American cas Association. Edison Liectric
- l. ~ rM Institute, and Fles9clal An91ysts (':* fr. vest:r-c%r.ed utilitf es only)
~P' - A AppHcable regional electrfetty fo ecasts Applicable regional ecencrite and cc yaphic forecasts
- j. 2
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Envf rmswntal Statemant Sectfeas _ -x .Q,! 8.2.1 Power and Energy Requireme,ts .,d. 8.2.1.1 Electrical Energy Coand F; 8.2.1.2 Peakload Deriand y>, 1 Other Fnviremental Reviews .I r@S 8.2.2 Factors Af fecting Grewth of Ce-and P ~.' 8.4 Staff Assessment of heed '<j .s i I"' 8.2.1 1 7' s .jq k i;l h*y ~ s.sl { -,< r +^'q 9 a a ma ' *~i _.._eJr****M+' ,s ,w,,,, -.7 e1E** v s-fr .T7 e _~ . Y- ?. l?L
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(y,N 6 ' Od F 'TS..,g, ? m. f q e April 1977 nA p A,s.$ p' m.3 PURPC$E AND SCOPE + v t, 4pw(;g-g4 The purpose of thts environmental standard review plan (ESKP) is to direct I.; Y $ h the staff's analysis and evaluation of the historic and projected electricity - .Y W,. Consumption and peakload demands in the applfcant's servfce area. The scope of F gfr 4 a yadd MI[I the review directed by this plan wfl1 include a detailed analysts aad evaluation ' ppb of the appilcant's treatment of these projections and, where needed, an indepen-r,w+n dent assessment of forecasts of the service area growth in electricity consusp. n}; N[}'{l;r."ds tion and peakload demand. r ~ $ f si Jt}gy II. pEQUIPIO DATA 4 0 14FORMAff0N
- .,. 1 T/Ib s w N.W The following information will usually be required
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4Q , r;r ' q A. [M:1 Historfcal and projected electrical energy use by major categorfes in f the servfce area. j' W6 Date will cover the 15 years prior to the date of asolication s through the third year of connertf al operation of all proposed units. Major [ fgdjy categorfes are those that account for 5 percent or more of the service-area [,, .M) C. conseption, including residentfal, connercial, industrial, agricultural, large special 1 cads (such as federal installations cr hfgh-electricity-intensive m t A;/ Q f ndustries), street Ifghting, muntclpal systems and co ops, other utilf tfes, and .); ,y rapid transit systews. n.~ a d 8. k Forecasts of all aggregate long.ran;e consumption and system peakload demand made during the 15 years prior to the date of application. ,.) C. The yearly increase in total klah s' ales for the 15 years prior to the f ..; j! date of appifcation, and an average annual compound growth rate for this period. 7x.>d D. <?q.h A nomalfred kWh sales growth rate that accounts for unusual changes r. (e.g., weather and fluctuations in rajor loads not representative of system pc 7 grwth), a if st of the changes considered, and the method of normalf aatton. ~. _; [ f'4*Ag ' /!; sg i l b T i, I Enclosure C - - F. 8.2.1 2
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l Y-I ? 1 April 1977 l 1 9 i E. A descriptica of the rethodology or sethodologies used in forecasting l ) (e.g..econometric,entrapolation,judpental,andsurveys)showingallmajor l,' factors considered in' arriving at the forecast, how these factors were intreduces g to the forecast, and an estimate of their Itkely effect on the growth of.khh. l l l sales and peakload demand in the service area. l T. 1 F. The historic and projected service area season of peakload dedand j (suneer-winter) for the 15 years prior to the date of appiteation through the third year of commercial operation of all proposed units. g 5 G. The historic and projected service-area Inad factor (average 1 cad / peakload) for the 15 years prior te the date of application through the third year of cunnercial operation of all proposed units. Where shifts in load factor l or load-factor trends are evident identification of the principal factors a contributing to these shifts or trends. Y. The yearly increase in system peakload demand for the 15 years prior g g.g to the cate of application, and an average annual compound growth rate for this f6'9 f s perlod. .sg 1. A norme11aed system peakload rate that accounts for unusual changes hh (e.g.. weather. interruptible contracts. and fluctuations in major loads not Y J representative of system crowth), a list of the changes considered ae4 tN f, /.t i method of nor,r.altz.tte. .q ; J. Load duration curves for the current year and for the first year of corrercial operation of the first proposed unit. M ~ M K. The minious hourly load for ihe current ye.ir and for the first year of %'{ comrcial operation of the first prepesed unit. idi )CF -<q NQ u.s wnk
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W. 2 wy% %.y - _. gJgg Apr'il 19TJ r;y Q. g# III. AMAtYSIS PPOCEDURE W;s ( k"*Gz. Idd The neviewer will analyze the historical data ad forecasts of demand 6.c@/s. s factors for completecess and agreeaent with other forecasts, eronesizing the gg ~ 9 SQ, -@b forecasted growth in kWh sales. M ~ m. h 4.- 4).. V ) $*,ad Tte reviewer will analyze the forecasting methodologies employed to the. c 1 Q estent nWed to reach ;onclusions regarding their acceptability. Relevant U' jdf[ factors to be considered by the reviewer include price of ele;tricity, censerva. [A.h tion and substitution. price of alternative fuels, income eco' oste ar.tivity. "$j number of customers weather, and saturation levels. !![kQg y
- 5 The reviewer will consider how the demsnd influencing factors are talen n
into account. p:7,Q,%d If scientific methodologies are employed, the reviewer will determine if they pass standard tests of acceptibility (e.g.. statistical tests fff of significance). p A; 3 L if[y.l'Y j y ~ by the applicant's methodologies, these will be analyzed to determine the cegree If parameter estimates (t.g. price and income elasticities) are obtafnel (-
- l) dM M;.Mb to which they agree with other estimates that are generally available. The Q' g J5.y reviewer will corpare the appifcant's latest projections with those projections -
i . -hpj;. 1 made earlier (ce the same or overlapping time pertods. 3 Wh ~v IV. EVALUATICM S, The reviewer will evaluate the applicant's forecasts and the date and e 7,_ methodology used to make these forecasts and rsac!, one of the folicatrg conclu, stons: J 't.-. N '9,
- ;.'. p.
A. The appitcant's forecast and all data and rethodologies are vertfi4 ..,-- h,; ? by the staff analyses and the reviewer concludes that the inethodology. underlytng ,.o ,q .Q{A assumptions. and results are similar to those that would have been used and s + - T +.S;'+ obtained by the staf f. A 9 p# b a. m Enclesgre C w. ','3< 8.2.1 4 I \\ .,1 ~ ,{ g l j 8 ~ .s N, l s s I 's 7: g 9 4 e .A
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'l i . ;'?, kl 2 I' j ape 111977 8 The oppilcant's forecasts, methodologfes, and data used cannot te verified by the staff. In this case, the staff will perfom an independent AN assessment using independent forecasting models and underlying assumptions. " y'W' The following approach has been found acceptable for conducting independent 2 i assessments of forecasts of service area growth in electricity consuwotton and ) i peakload demand. The reviewer will consider todependent forecasting'models (e.g.. Oak Ridge State Model. FEA regional redel) to obtain from each a growth j rate forecast that is viewed as reasonable by the staff. The reviewer will always deterstne if other models (e.g., for the service area or specffically for q tt.e region) are avellable and will consider their use for this assessment. l The Csk Rfdge State Model will be considered for all cases. hg In applying the selected models, the staff will conduct a parametric analy- [n Sis, hssed on a range of plausible growth rates, against which the appifcant's y? $y/d projected growth rate will be compars4 to determine reasonableness. The results of other forecast scjeia wlil be compared with the parametric analysts results of the Oak Ridge Model. ( \\ The selection of additional models will be baseo partfally on geographfe QM
- 3 compatthfif ty and pirttally on the model sophistication.
Q q'l Where Ir possible. all I j^ salels used will be adjusted to reflect Igortant service area trends and charac. te ristics. The revfe.er will use the results of these rodels to prepare compar. 'g iy able peakiced forecasts. (See Appendix A cf this ESEP for a disc'Jssion of reakload der.and assesse. cat.) i ,.3 ,V. INPUT TO THE ENv!P0vwfNTtt STAfiufNT This section of the enviromental statement will acromplish the following cbjectivws: (1) public disclosure of the appilcant's forecasts of peakload and elec..-ical energy demand and (2) presentation of the stsff's evaluation regarding the completeness and adequacy of these forecasts. i Mr;
- n 7 )
si p'. 8.2.1 5 En losure C ) :-d l
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Y liw,,' > Apri1 1977 y A. r-When the reviewer has determined that the applicant's forecasts are ( .[ '#. W.j complete and adequate, the following infomation will usually be included in J.*j, this section: a M ']f 1. The forecast methodology used by the applicant. d n 1,y 2. Samaries of the data used, together with the staff's evaluition (G i of the data. ? y:1 t w: N l. w D E 3. The forecasts made by the applicant and the basis for the staff's it evaluation of the adequacy of these forecasts. ..$v., m.3.e % >~ 8 When the reviewer has performed an indepencent analysts, the following re I y 1 information will usually be included in this section: .A W k. C n P % Qj 1. For each model, a description of the model, the explanatory
- J verf ables used, the parameter estimates generated, and the assmed growth rates for each of the explanatory variables.
t%%Q Q4p #Q 2. A description and justlfication of any changes made in the model T.(M, ; by the reviewer. These will typically be with respect to assumed growth rates ~ L*, ' '* (.,v in explanatory variables and in some cases adjustments to elasticity estimates. T {'95M 3. A descriptio of the assumptions and techniques used to csneart ...I the energy growth forecasts to peakload gecath forecasts. .e ,r,' 4 The ranges for energy growth and peakload growth that have been deterentned to be reasonable. Uj s Q:f
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The reviewer will provide inputs or ensure that inputs will be rade to the .g.;j following ES sections: e n </ sectten 8.2.7. The reviewer util provide the reviewer of ES Section 8.2.2 y; i.[. with the historic and projected growth data that are considere' apprepriate for x. . l - ' y, M the applicant's service area. .p ( ,~l Enclosure C s.., ; 8.2.1 6 o,, + 4 4 1iAt .~. .'4..,* 4. t. I y I 4. p a.'i =,:+q q q-m 'T;m?,M % il' % $ " N h fI? M.%., mC.. 7,qY. c,; '~ ~ o ~, . v dL b ',: n %,A ~~ 'a ., a e ? .y + A ' s .y.. ~ 'r.,_.'* ' ), q y;
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v 4 Appendia A to ESAP 8.2.1 Review Draft fj April 1977 ( i ENVIRf40i[NTAL STAh0ARD PEviEW HA1 g ,? ~ FOR E5 SECTICM 8.2.1 POWER AND GENERATING EEOUIREFENTS ,be PPPENDIX A ASSESSING PEAR 1CAO CEFA30 The forecasts of electricity consumption beceme the t, asis on whic.$ peakload demand is projected. Once electrical energy growth is forecasted, the rev? ewer nust make a determination as to whe*.her peakload demand will be likely to gron at a faster or Slower rate. A In most instances, applicants are forecasting faster growth for peakload l than for electricity consumption. This is often supported by the histortcal trend in the service are. as well as for the nation as a whole. (For all U. 5. utilities, between 1963 and 1973 electrical energy consunction grew at 5.9% per year and nonceinc.ident peakload grew at 85 per year.) In addition the FEA g reference case assumes a continued deterforation cf the load factor with peakload A I I growing half a percr-t fester than electrical conss9 tion. If the reviewer \\ 20 accepts the applicant's predictions, the reviewer may concluda that peaklead Ig will grvw faster than electrical energy consumption by the sare amount as the j spplicant is predteting. That is, if the appitcant is predicting 51 for energy (f consweption and 6% for peckload, and the staff's ccs'parative range for electrical Q / consurption growth is between 4.5 and S.8%. the staf f's peakload rarse should te 7 _, between 5.5 and 6.8% (or 11 hiseer). Howaver. tre reviewar ny always select an D independent differential (e.g. the FEA's asssption of caly a 0.5% differential) depending en condittens s;ectf f c to the, service area. t s _d.',1 i It may also be the case that the app 1tcant is forecasting peakload demand growth below that treing projected for electricity consurotiois. This rosy be justified, for enaaple. if the applicant is cornitted to 44 sqgressive load ,'!a ,J
- s ranagerent program. The eoviewer will evaluate t'e merits of such programs or p
any other load management pregram ad assess the Itke11 hood of their success. h H Based on this evaluation. the reviewer may chout to accept the applicant's 1; a growth differential or intrchce another differential based en either the historic ( trend. FEA's differential, or sore comdination of factors. 3.iy Enclosure C '] 3.2.1.A 1 p ll .i p s -5 sN ( $O w bl l [.
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$'m:*h. ~ ii g,..ll.:.) p.M>w4 .gh/h eng'. ' b'- f/[N2@$ Section 8.2.2 Review Draft .?. April 1977 to amM ( .Q ENVIRONMENTAL STAN"wt0 REVIEW PLAN I a%d = ki FOR ES SECTICs 8.2.2 FACTORS AFFECT!M GROWTH CF DEMAND g
- f?gy 8.2.2.1 ECCNOMIC AND DEMOGRA0 HIC TRENDS p
s:.. 8.2.2.2 CCNSERVATION A.YJ $;SSTITUTION iM{ 8.2.2.3 PRICE AND RATE STRUCTURE reo se'N i[.. $ -CE A RtV!EW YNP'f75 e%get Envirtuwiental Report Sections Sk k,[4p. 1.1 ' Systee Oceand and Relfability ,ng Envirormental Reviews 6'O' 8.1 Cescription of the Power Systee ((fjag 8.2.1 Power and Energy Requirements a.,..., {* M"i Standards and Guides g.'O,( c o f Energy Policy and Conservation Act T4 f-7, . y")f+.. m / Energy Conservation and Production Act
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\\ Other Consultation with local, State, and FMeral agectes .+ Responses to requests for additienal ufer::tica ,'"} Public Uttitty Corraission rate schedules for natural gas Appitcant's rate book ] s. REVIEW C'JmJTS ~;
- t -
.g ry;-[ %, Envf rersental State-ent Sections "tT Iq. 8.2.2 Factors Affecting Growth of Demand J,4 8.2.2.1 Eco.-omic and certographic Trends ~~d ~;i[v.', y 8.2.2.2 Conservation and Substituttoi ~ 8.2.2.3 Prtce and Rate Structure itt 7q Other Ens trorvretal Reviews Mk 8.2.1 Power and Energy Pecuiretrents n_, 8.4 Staff Assess.:ent of Need J'j h. 9.1.1 Alternatives Not Requiring New Generatirg Capacity
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[Q Enclesum C 8.2.2-1 ' :.q l J 'd ' Ng c C C.
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~~~ ~~~~~ ~ ~~~~'~~"~~~ ~ ~ - l b a p h r I April 1977 l I 1. PURPOSE O D SC00E 3 d The purpose of this envirorm: ental standard review plan (ESRp) is to direct h*'E 1 i the staff's" identification, analysis and evaluation of those important factors l contributing to the rate of growth of electricity denand in the applicant's ~ l I service area. This review will provfde input to reviews dealfng with the assess-g's ment of the appiteant's forecast (ES Section E.2.1), baseload capacity planning. I and a final assesscent of the need for the plant (ES Section 8.4). l
- i I I
The scope of the review directed by this plan will include economic and j demographic trends, conservation. Substitution, and price and rate structure as these factors may affect the rate of growtn of electricity demand. l !!. REQUIRED DATA AND INFCDP.ATICN l I The following date or information will usually be required: k f phic appreatmation) of the following variables: population. necer of house. hA A. Historical and estimated growth for the service area (or close geogra- /. l holds, per capita income. constner price index. manuf acturing output. gross regional product. saturation by major appilance, trends in size of household, g and prices of alternative fuels. Data will cover the 15 year *, pricr to the date A of appilcaticn thro sh the third year o! cucsercial eperation of all proposed hj M units. GC kB B. Historical ter.perature-adjusted peakload data since 1373. fj b: s C. For the 5 years preceding date of application. the percentage of W %g residences in the applicant's service area relying on oil and the percentage l relying on gas for space conditioning, water heating. and cparating asjor appli-g ances. Similarly, for industries in the service area, the percentages of total Q energy requirements being met by oil and gas over this same tire period. pQ l Enclosure C ( W1 8.2.2-2 g6 y 33 I' ? lb 1 Il ,i n q
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~, gg ' ~ ( hy s*w %v I April 1977 - 59 D. From date of application to 3 years after inttf al coariercial operation ( of the first proposed unit, the generally known availability of oil and gas to {[L;QVjg!; ultimate customers 4n the service area (e.g.. gas curtallments, status of gas' Q hookupstonewcustomers). . h 'l d' E. hor the 15 years prior to the date of application through tne third 7 year of creusercial operation of all proposed units, the historic and projected a, growth for the service area of the real price of electricity by major customer class. kV' d F. The current and 'rojected (at time of first-unit startup) rate struc-t,ar...N{ y tures for major customer classes. N a. [jd G. .syplicant's efforts to conserve and promote customer conservation of electrical energy. [h,! ,,, p {c,1f.C III. Ann ysts PROCEDURI ~ Q, %:- 3.y Q A. Econcefe and Ocmograehfe Trends ,e, 7 .a ..g The revfewer will analyze the appitcant's estimates of the effects of 1~
- [
w,, u b , economic and demographic trends on the applicant's projected growth of electricity $.l,i., demand in the service area. The reviewer will also obtain er prepare independent y forecasts for the economic and denographic variables identified by the applicant x -."'*y as affecting the rate of growth of electricity demand within the service area. r w ify The reviewer may consider additional variables when it appears that they could ((h affect electricity demand growth. Forec'ests prepared for service areas other f %.J than the appifcant's may be used when in the reviewer's judgment they are sufficiently ,4 f;2' y sfmtlar to provide a meaningful comparison. !;,, wp - I m.;Wi i For each variable used by the applicant the reviewer will (1) compare ,2 - the applicant's projected grusta rates with gresth rates developed or obtained I ,.o... 1 o .qp3 q by the reviewer. (2) identify differences, and (3) analyze significant differen-i Jc tials as they contribute either positive or riegative effects to the app 1tcant's ' h., alt I. 8.2.2-3 Enclosum C I* sn.,.m >,-y, gWS? w .W.. G
- y a ;;
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- cm + I ( April 1977 forecasted growth rate of electricity denand. The reviewer will compare the ( historic growth of the above variables with the forecasted growth rates and a identify differences as' positive or negative influences on projected electricity ' ~ demand growth. B. Conservation and Substitution
- The reviewer will estimate the icportance of conservation and si.bstitu-tion in the service area by preparing an estimate of the effect of these factors f
on projected kWh sales and peak denand in the service area for the prcposed initial year of plant operation (first unf t). This estir. ate will be contrasted with that of the app 1tcant a4 any significant differences between the two estimates will be noted. The reviewer will also contrast the annual compound growth rate in kWh sales and peakload for the perfods 1964-to-1973 and 1973-to-present year and will compute the percentage increase or decrease between these two periods. The reviewer will identify those elements that could have contributed ( ~ to disintshed growth. This should include at a minimus: conservation, higner "g prices of electricity, ecoroele reession and allder than usual weather. The ?i reviewer will estimate the relative effects of conservation, price, recessten, h ard weather on diminisW grcwth using the follcwi..g analysis: f3 m 1. Compare the real rate cf increase in the average price of a ki h h of electricity in the service area since 1973 ar.d centrast with the real rate of increase nationally. g.y .n
- MQ 2.
Compute the real rate of increase in the gross regional product (f}[ l for the service area (or geographic approminattorn since 1973 with the real rate fj I of increase in gross national product. gtM <v<. [ 3 Revfew peakload growth since 1973 (adjusted for temperature) and discuss positive or negative effect on observed grcwth rate. g! ^t i kW Ap for this ESRP, substitutten is defined as the substitution of electrfeity M for other fuels, g 8.2.2-4
- a
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l m gy' 44 g p April 1977 '8h The revtewer will consider the effect of substitution on growth using f the followfng analysts: ~ %u Q:M 1. keview the importance of oil and gas in the $s ..e area relative 4 to their availability. Consider any curtallments or denials to new custeers (residential. Industrial, and comercial) if they exist. Cetermine the service h area dependence on fossil fuels and tre demand-to-available-supply ratio. KM. M 2. Identify trends in new hones (all-electric versus other), purchases i t of new appliances (electric versus cther), and shif ts in industrial energy k.: *G L,7 g requirements. Deterr.ine if electricity is capturing or losing an increasing U 4 share of the new and replacement market. NIS hp The reviewer will detemire the extent to which the future substitution hD. of electrical energy for fuels in, short supply (011 and natural gas) may tend to g.m increase the demand for electric power and thus offset the tapacts of conserva-g h/h) tfon measures. m@dh The reviewer will consider any estimates de, eloped by the appifcant a MM. M N.y/.d with respect to the impact of substitution on realf red growth rate and will detemine any adjustments to growth forecasts that may have been made to reflect 14 this. w--. s.-r.m j On a basis specific to the service area, the reviewer will consider lf the following factors is they contribute to electricity demnd growth:
- i-
[ 1. The extent to which tecnological breakthroughs, government ,;j'j. legislation and subsidies and large conservation invest:nents may provide greater / .I conservatten savings than have been enerienced in the past. y97 h d. 2. The extent to which energy sources (e.g., synthetic natural Y, gas) or energy conversion systems (e.g.. solar space heating) currently under x}t development may reasonably be expected to corspete with the use of electricity. .N The reviewer will consult with the reviewer of ES Section 9.1. Alternative ~ n., ^g} Energy Sources and Systers, to ccrnplete this portion of the review. en ..9 8.2.2 5 Enclosure C . k _.y ,f q1 > *y. g I I % P. m.. m.ia m \\ ,m r a t %h N._ ~[. ] ([ $ I ,e N F., %%'s T ? {. N ~. " ' 3 -- m. Q~-@- Q' 7 (- ~.s h M j9 % -q '_ ~ h= m wD ryyrw"mW'~ .T. Y. ! s t - wm e t . eu r,m e ~_m
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3. The possibility that long-term savings ray not te particularly significant. ( a 4. The possibility that energy conservation would result in increased use of electric power. . i ') 5. The possibility of
- double counting" energy savings (e.g.. conserva.
tion is an economic response). ( G C. Price and Pate Structure i h6 The revfewer will determine how and to what extent the applicant has considered price response in demand forecasts. Mere the applicant has developed and/or used an econonetric rnodel, the reviewer will identify the M appilcant's price elasticities and forecasted growth rates for the price of In addition, the reviewer may obtain independent forecasts of N electricity. A growth in the real price of electricity. These forecasts will be compared with pq, the treatment of prf ce in the appifcart's analysis. ' p.!) (* The reviewer will censider alternative rate structures thct would s,wK 5 moderate lead grrvth or reshape Icad curves. The rate structures to be considered g Include peakload pricing. Inverted rates, and flattened rates. fj The reviewer will analyre the arpiteant's present atterupts and future plans to i ?reve the 1 ,7 system load factor via rate restructuring (e.g., hfper tall rate during peak l h< periods and demand charges that are based on maxina de and) and will estimate anticipated effects on ann al electricity comumption aM peakload demand.
- $M u
?gl IV, EVAlt!ATIC't es
- d The reviewer will detemine to what extent economic and demographic trends.
Vi, .r Q conservation and substitution, and price and rate structure are likely to affect f3 f.f. the rate of growth of electrf cal demand. This will include the following: 4, s y.;a' A. e. The effect of ecenomic and derographic variatles on the expected gecwth (N~d of electricity demand. jj 8.2.2-6 Enclosure C t.
- rt.
Q i Y h d.st I y ~51 v y .1 \\ ~ c m .I sg wT77 -li a - _f., ,, my;;. rv n' 7 ' '. r 2. Y T W i-TT :T.?_-]_lw: Y U:. _,,. ';Y' ..c s Lm ' - J*h.X' ,l _'~y
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- fre ( "
The effect of the growth in the real price of electricity on the. Y. CK& expected growth of electricity demand. N ' A.1 s
- gp D.
The capability of present and proposed rate structures to prUnote load management. O gy fbNu fh The reviewer will ensure that the data and analyses submitted by the appitcant are accurate and in sufficient detall to allow one to conclude that hh the forecast sutaltted by the applicant properly reflects the factors listed Nt* ( g'# M-C
- i above in itses A through D.
If the reviewer concludes that the appifcant has ^ q taken reasonable account of these factors in its forecast the reviewer ct.n 37 o o sn y endorse the applicant's forecast. Y' iff)dy .d g ft)j If the revfewer determines by analysis that' adequate coristderation has h { not been gtven to the factors listed in items A through D he is directed to { Wi.d.. ~ the envi,ronmental review for ES Section 8.2.1. here the reviewer. will develop' _,].m an independent range of electricity demand growth to determine if the differences i g in the treatment of these factors affect the reasonableness cf the applicant's py ultimate growth rate. [ '. p l V. INPUT TO TNE ENVIEWe[NTA1. STATEh!'(T A h; 4 Normally ES Section 8.2.? will be divided fr.to three subsections consisting v. of a discussion of the appilcant's treatr.;ent of economic and demographic trends. e( p ' M X. conservation and substitution. and price and rate structure. The following e information will be included: in I GU
- A.
Section 8.2.2.1. Economte and Dmocrachte TreNs. This section will .,;..b >~ J., ; > include a comparison cf the applicant's estizatas of the effect of econmic and T" uI Y demographic trends on electricity demnd growth with indepeMent analyses of those effects. l Any significant differences will be noted, and the reviewer utit s' l indicate what appears to te the most appropriate esti:Hte. ,.3 y g g g,7 Enc %un C 2 { 3 +, f j, l t a# f, a _k p,,p-mm~mq;+ ', jf. l}^Va- .Q
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y-- I l h' l . r. April 19U e ( B. Section 8.2.2.2 Conservation and Substitution. The reviewer will provide a qualitative assessment as to the effectiveress of consenation in the last several years given the rHative severity of price increases, recession, and weather. Successful ef forts undertaken by the applicant to promote conserv'a-J tion on the part of its customers and with respect to its own Internal use of l j power will be included. d The reviewer will discuss the extent to which the substitution of electrical energy for short. supply fossil fuels may increase demands for electri-l cal power and will describe how this potential demand may affect the 1:npacts of f conservation measures. r 4 The reviewer will present on a basis specific to the service area any y other significant factors that could affect the growth of electri:lty demand in w the service area. I C. Sactfon 8.2.2.3 Price and Rate Structure. The revfewer will describe the appilcant's present and przposed price and rate structure and will discuss how price and rate structure may affect the growth of electricity demand. py M[i The reviewer =111 provide inputs or ensure that inputs will be made to the 93 following ES sections: p. <e A. Section R 2.1. The reviewer will preside data cn the applicant's power and energy requirements to support the forecast analysis in ES Section 8.2.1. J.y M.4 pv 8.. Section 8.4 The reviewer will provide informtion pertaining to baseload-MJ [/ [N capacity planning to support the evaluation of the r.ced for the plant in ES 5ection 8.4. e-if}- d C. Sectfen 9.1.1. The reviewer will provide inforn tion pertaining to, g those factors affecting growth of electricity demand that could affect the choice $d of alternative energy sources end systems. D Ab m ( h-E" $"" C 8.2.2-8 W. D2 dd . '*p hW %? .3 I ~ G g a ,;. ~ ; ', r p J " 'jQ ?g ._, _ _.IOjG 5:f.$m; 9 g 3-, .m 4.. w ;. = -, 8, my,._ A - 2 WM_- m ;,y.mp,b q s,y. _7 m +,. ?; W + ? l. ~ ~ 45 c :.<~ o ....,0..,.. - ;= - ~ a, g.7 -e s c y,, i
m ..i M b April 1977 @y 'G .e
- M @D II
( VI. REFERDeCES ... Ad i W QA , $dy 1. Wat'er Resources Council,1972 CBERS Projections. Volumes I through Vll. [ U. S. Goverrrent Printing Office. Washington D.C. April 1974. ~ div4, NY'.M 2. Department of Cocenerce. Bureau of tr.e Census. County Business Patterns. f J.o t O U. S. Government Prfnting Of fice. Washington. 0.C. (most current issue). s 1 I aM 3. Department of Corrnerce. Bureau of the Census. Census of Population. Govern. WM t w. *f eent Prfnting Office. Washington. D.C., (rest current issue).
- Vjf$u hq 4 egg 4 Department of Conrierce. Census of muf acturers. U. 5. Government Printing hPg$'
Office. Washington. D.C.. (most current issue). $.Yf Q[ C : ' (If S. Depart:nent of Comnerce. Census nf Business. U. S. Government Printleg Offlee. Washington. 0.C., (most current issue). d-y.p g/t%g-g ('
- f. MN 6.
Federal Energy Administration.1976 Kattenal Er.erov Outlook U. S. Govern. .wfa ment Printing Of fice. Washington, D.C.. February 1976. W. .v$pe t yp p 7. Federal Energy Administration. The Ef fects of Price on Energy Conservation. A s.y ,: M. U. S. Goverraent Printing Of fice. Washtraton, D.C.. August 18. 1975. 9@f,f,% V. p; 1D 8. Federal Pcwer Ccanission. "FPC Staf f Sepert Surrarizes 13. Mon:h Utility s,t v O., -v Energy Savings." No. 21622. August 7.1975. < - i 9. G. S. Gill and R. D. [111 son. Interfuel Substitutien-The Case of Electricitz
- g and Naturel Gas, presented at the Western Association's Ann.41 Feetings in a
San Diego. CA. June 1975. Oak Ridge hattonal Laboratory. i- ,o 10. M. L. Baug. nan..-4 P. . Joskow Interfuel Substitution in the Consumption ss.<a M-of Enerqy in the Un' t?d Ststes - Fart !- ., xs Fes16ntial.nd Ccm+ecial Sector. Massachusetts Institute of Technology May 25, 1974. 3: t c,. '.. o.. s 11. U. S. Congress. Conservatten aM Ef ficieat use of En.rgy Peport of the -t, Comittee on Science and Astrenaatics. U. S. Pouse of Representatives. 93rd Congress. Second Session. Dece-ter 18, 1974. l Enclosure C ~ 8.2.2-9 7, l"3 m v '. e .c f .p ."r T*p, (;(5.=, i ~~$ 5 .5 /. _. " I. f 7- -y 3...' ' - e. : -V,., ',-1.,s y '<C 9 mp. - m- .--m.. e. t 7='-~,m7*s7,. - ,y n . e ;,,7 *,?. s : - 0 .a :J -J . r. 7 < S S,. 4'. ~. ,s 112 % 51 *' '-t %u %-i f '^ " V ;.i.. ' ' ' u, %) - 'l^-. L ' ~ K: n * ~ ' (.,,- 7 x ~ (_, ,g N -Jr- '-d- -.." - ~ ,t 4 r. s ,s ,_.g,. _. _ ,,m'., - a g .L6' C g
- g --
r A. . ~ + 4 7 e Apell 1977, + ( l
- 12. National Science Foundation Enerqy Conservation Research Proceedings of the NSF/PMN Conference on Energy Conservation Pesearch, Airlie House VA, February 18-20, 1974.
l ~ j 13. L. 5. Germain, Enerqv Conse-vation. Lawrence Livermore Laboratory, University 1 of California Livermore, CA, Novencer 20,1973. 14. L. A. Guth, National Economic Research Associates, Residential Ceaand for Electricity and Crowth of Peak Load, July 1974. j ( m k 15. K. P. Andersen, Residential Energy Use: An Econometric Analysis, The Rand Corporation, Santa Monica, CA, R-1237-NSF, Octoter 1973. l l l
- 16. Id. S. Chern, and B. D. Holctro. A #egional Model for Electric Enercy.
Part !. New England. Middle Atlantic, and South Atlantic Peqions, Cak \\ Ridge National Laboratory Energy Division. April 1977 (Draft). I 17. V. K. Smith and C. J. Cicchetti, " Measuring the Price Elasticity of Demand ( for Electricity: The U. 5. Experience," Energy Systes Forecatting, Planniciand Pricing: Proceedings of a French-Am rican Conference, University of Wisconsin, Madison, VI,1975. .J d p Y 18. E. Berlin and C. J. Cicchetti. Perspectiva on P%er, Ballinger Publishing [( J W Co., Cambridge, MA, p. 38, 1975. s< ,3 h 19. L. D. Chapr.an, G. G. Akland, et al., Oak Ridge National Laboratory, Electricity 4 $s T.,q Cem nd: Project independence and the Clean Air Act, NSF-EP-83, Neverter 1975. ~ 20. C. F. Phillips. The Econanics of Paquistien, Richard D. Irwl:.. Homewood, IL,1969. 7
- 1 l
21. J. C. Bonbright Princtsles of Public Utility Rates New York: Columbia l h>:. '.^ University Press, New York, hT, 1951.
- d.,
22. C. J. Cicchetti ard J. Jurewitz, ed., Studies in Electrie Utt11ty paquistion, Ballinger Publishing JJ., Cambridge, MA,1975. .d 4 Enclosure C Td. 8.2.2-10 r wll l I ) a II' 5 1 1 rr n A ..g v: ~ gy.3,; y,n~ - m, ' f q., T ss. - - e
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, _...; 7 - ~ 7 ..~ N 5 7. .Aarti 1977 / '*i hh.h.g.. .. c. ,c- -. ~t 3 4 ~ ~,, > -~ n.g.c.. i a . J. T. Wenders. " Pep lead Pricing H tu flectric' ttility todostrf," Bg 23.
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-)$*r] Joarnn of E cv. ~ *L, n. :32.N1. : c'4 M. \\ - ~ y F lfo.t. of t t. or Petces on flatricity Const.rpticn," p~ ) n 1 n. G i re i.
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..ff? ~ m -, _ %.. S. .( ..14 n, - .,. V a u,s.,, f'- g-Section 8.3 .J. i '7lb / 6, ',, [(%g'Q T . Review Draft e Q..-.. c(, , lq April 1977 1 ?. ~ ENY!POMfmt STMDMD PEVIEW Ptu g_ FOR ES SECT!DN 8.3 PC%ER SUPPLY 8.3.1 EXISTING M0 PLAMED GEAERATING CAPACITY F f 8.3.2 Pt,9 CHASES MD SALES d t REVIDi INPUTS s l" fnvfreemental Peport Sections I, 1.1 System Demand and Reliability 0 W Envittreental Pavf ews 8.1 Description of the Power System ' ' 8.2 Electrical Energy and Peakload Demand d Ar/ardsandGuides 1 M Clean Air toendments of 1970 \\* FWPCA Amendments { ( '. Applicable State and local standards 4 1 Othei Y' i.' ?? g Consultatfore with local. State, and Federal agencies i " hsponses to requests for additional inforvation - Re p plicant's snnual report pl (j g (Reliability Council reports !{ j ,, sFederal Pov Comissten Fom 12. Schedules 1. 8. 9 y N. b 9 REV!!V C'JTPUTS c-o 6 9 Environmental Statament Sections 4h 1 a N ' I 8.3 Power Sucply 'j g 8.3.1 Existing and P.lar:ned Generating Capacity y. . f.a8.3.2 Purchases and Sales
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.~ )iy' ~. - ) n;j kf . $$d " WO !.h, April 19ff N v %t a r6% I. PURPOSE AND SCOPE l T hf*% The purpose of this envirormental standard review plan (ESRP) is to direct N @1 the staf f's review and evaluation of the appIlcant's present and planned generating-Lh, I capaht11ty and the present and planned purchases and sales of power and energy. Q:' g k Q Q. The scope of the rinview directed by this plan will include consideration of the h u.$g type (e.g., coal-fired) and function (e.g., baseload) of the applicant's plants, c}yme, the nature of purchases and sales (firm and nonfire) of power and energy, and any pgjgj proposed additions, retirements, redesignations, deratings, or upratings of the d-(&ff.- ,-,,47 g Q Mf.O appItcant's plants. b--E nW> krY s D II. SEQUIRED CATA AND INFORMATION dypw. QAnW [gi;"I The following data and information will usually be required: 4.%yd Q s .-j A. Planned generating capability at the espected peakload period of each g ggfiV year, beginning with the year of application (current year) and continuing through %.ht the third year of commercial operation of the proposed project, s pq ; p@f'3[O Q Z?. f, I B. A listing of each generator with a capacity of 100 PNe or greater in I %7' N operation at the time of appilcation, planned and prcoosed capability additions mx.4u &I thereaf ter, including schedated date of operation, retirements or deratings, 0 Q redesignation (e.g., baseload to intermediate), and upratings for 3 years af ter /
- ]
operation of the proposed project. Each seasrator should be categorized as to type (i.e., hydroelectric, coal, oil, gas, nuclear, pumped storage) and function " <;..a., L c d (i.e.,baseload, intermediate, peaking). Estimates of projected capacity factor 4, [ [ ranges and average variable costs" for each unit tabulated should ba orovided. [ Small peaking units may be lurped into a single category for sir. . t g;p p or: @M C. Cefinition of the tens baseload, interrediate, peaking, firm and $k? nonfirm sales and purchases as applicable to the appilcant's system. 4 -u. = q ';v q.. 2 w,...s e M, % 4. ^ 2Y1 "The average variable costs include fuel costs and varia 1c operating and [ Qy maintenance costs in sills /Wh calculated for the initial year of operation of ( r
- , 'W S the proposed project.
ai) 'W i Enclosure C Ed 8.3-2 6
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l l J l I 4 l s g April 1977 l h ( D. The ratio of baseload capacity to total capacity for the 15 years prior d, to the date of application, and for each year through the third year of coanercial } operation of the proposed project, .? { E. The energy to be generated by function and type of all facilities for the first year of commercial operation of the proposed prcject. E ,8 F. Factors that af fect or may af fect power plant availability (e.g.. plant reliability, environmental regulations, scarcity of fuels). I e' G. Annual net fire and nonfire power sales and purchases or interchange b agreceents for t;.e year of application and for each subsequent year through the b third year of commercial operation of the proposed project. [ a III. Ayt.YSISPROCfDURE p f
- t
'fi The reviewer will segregate the applicant's plants by fuel type and consider the present and future availability of the indicated fuel. The reviewer will Q identify any factors (e.g., air quality regulations, forced outages of long dura-tion) that have affected past plant a.ailability or capacity f actor and will ij consider how these factors sny af fect planned availability or capacity factor j y The reviewer will relate the applicant's definitions of baselo.d, inter-i mediate and peaki'g plant: to other accepted uses of these terms. (The perfor-1 mance of the appli. int's present plants can be found in federal pc.er Commission (FPC) Form 12, Schedule 1.) Where the applicant's designations co not conform to E
- cepted uses, the reviewer will deterraine the reason for the dif ferences.
.9 YP .v O fi The reviewer will analyze the applicant's present and planned generation miu 7 in light of the applicant's present and planned purchases and sales (firm and i nonfire) of pcwer and energy. Honfire purchases and sales of power will be gf ,I included in the reviewer's consideratten of the capability of the applicant's b. 1 system, and firs sales and purchases of power will be incluced in his considera-tion of the applicant's peakload responsibility. The reviewer will con i;%. ine 7.J. 3 n ,.l T H f. g,3 3 j Enclosure C l !] f = a ._g.,, 3 'm g, q -- 7q'%f_% )kQ 4,.. 3.. l E l, -F Wy'M 'E'"""' , y"; g. Ww-y, ,. yaw;q.;M-- s. 7.- p- . p 3 y. .43y.,,..A_.e g x, y y".. A, ?,* ,r-
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ne /. April 1971 kg. { applicant's role as either a ret purchaser or net seller and will quantify shifts k in the applicant's position over time; that is, whether the applicant is becoming W V; more or less dependent on purchasing power frce or selling power to other systees. be! g/ The reviewer witl identify and determine the reasons for any unusual purchases or ~ vs 2M sales that have occurred. + 1,..c p-i The reviewer will also consider the posstDility of rprDr gyg.a$ reduction in overall capacity requirements for the region that could be accour- ? nr 1M} plished by the wheeling and pooling of power. .(beg's r[hh; Where the appifcant plans deratings, redesignations, or retirements (whose total is 200 W or more) within approximately 2 years (before or after) of the
- )?[fk proposed date of commercial operation of the proposed project, the reviewer will
', $? NM determine the reasons for such a change. The reviewer will determine the reasons q,%p;?. g for all 100 W or larger unit redesignations or retirements. The reviewer will p 8[D analyze the historical, present, and projected ratio of baseload capacity to .k hd[ total capacity and will detemire reasons for a7 large variations in this ratio over tine. 4;4. N ~ x.v?- !(. EVAtt!ATIM (. w 1 The reviewer will detemire whether or not: ,, > f lY . ;;,, q A. The description of present and planned capacity correctly identifies . }4..irxv[ baseload, intermediate, and peaking units and that planned additions are reasonable; / a s LT 9 f,.X 8. t if l-Q-The description of present and planneo purchases and sales of power and q x.. v Q,, energy correctly identifies the as,plicant's capabilities to sell or need to purchase; u 3 5 -m"; +
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YQ P',ans for redesignation or re-rating of generatin2 capacity have teen y e ~KMlQ, explained and are reasonable; I.40' M..,l t ef - D. E tS/ The proposed baseload fraction of the a;nlicant's total capacity is appropria te. .' y 4 1 0:j j e / v'W, p.4, ?. f m.oc I n* !N 8.J-4 p-m y 0;&n: t,.o-r i f"J7, ' h1 f. I e e em Qf.H Q Y { d.? L i
w .h i _{ ? t L 'Y r a w h saT l april 1977 i V. [NPUT TO THE EWICo+ ENTAL STATEMENT g' This section of the envirornental statement will nomally be divided into twp c subsections: 8.3.1 Existing and Planned Generating Capacity, and 8.3.2. Purchases sh L J and Sales. l A. ES Section 8.3.1 will sumartre the applicant's present and planned generating capacity. The spplicant's present capacity by type and any planned additions, upratings, deratings, and retirewnts (by unit) should be shown in a table. The capacity in the applicant's power pool and reliability counct) will [, also be surmarized and supported by a table (or tables) when appropriate. The g reviewer may refer to the reliability council's annual report to the FPC for the [sf relevant infomation. $/. l 8. [5 Section 8.3.2 will surnerize the effect of the applicant's purchases g l l and sales on load and capability. The reviewer must distinguish between (1)
- M' energy and power sales (cr purchases), (2) firm and nonfirm sales (or purchases),
k i k i and (3) on-peak and off-peak sales (er ;vrthases). The reviewer should ccesult ~ / \\ FPC Form 12. Schedules 8 and 9. A table c.ay support the discussion. ,4 l f ,,, j;q + j The reviewer will previde inpett or ensure that inputs will be made to the j [O i, folic =ing ES Sections: Ve I l A. Section 8.4 The reviewer alli ensure that descriptions of the appli-i i cant's existing and planned sources of power and energy satisfy the requirements .s, g-l of the reviewer of ES Section 8.4. I l The reviewer will previde the reviewer of ES Section 9.1 8. Section 9.1. with any data concerning restrictions on the use of energy sources available to t the applicant. i -- O 'm n VI. REFT 2EhCES l < i i f L. None M 4 a' Enclosure C g 8.3-5 d I O 9 4 1 = 1
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j ge.g; W@ @fM l wy w .A Section 8.4 f,nUk Revtew Draf t bd April 1977
- p knrA
( [gm[2 ENVIRONMEMTAL STANDARD REVIEW PLAN ,a FOR ES SECTIDM 8.4 STAFF ASSESSMENT CF NEED k(Ifl. M 8.4.1 ASSES 907 CF BASELCAD GEhERATING CAFACITY a g 8.4.2 RESERVE MARGIN ASSESSMENT '~ suW 8.4.3 CAPACITY /PEAKLOAD C3tPAAISONS i ped k 8.4.4 SCHE 3JLE EVALUATION G.ht.M 8.
4.5 CONCLUSION
QMhl MND REV!EW INPt!TS yM '?k& Environmental Report Sections l in h AC
- 3
%a 'y.?I 1.1 System Demand and Reifability 1.3 Consequences of Delay 9, fgt[(s Environmental Reviews Qf1 ( v Z e,2m 8.1 Description of the Power Systen 4 ' M. 8.2.1 Power and Energy Requirements M '< 8.2.2 Facters Affectig Grc=th of 0= mand He,
- M
( 8.3 Power Supply Standards and Guides ? s sa I ' g? 2 Other s u, ?)'
- Applicant's annual report Consultation with local. State, and Federal ager.cies
' Q' Responses to requests fcr additional infomation ~l y Annual report of appropriate Electric Reif ability Council to the . 'e, j Federal Power Cassission in response to Order No. 333-3 G.4 < Qt '. / w: q Enviroevental Stateeent Sectim - ~ 8.4 Staff Assessment of Need 8.4.1 Assesseent of Baselcad Generating Capacity 8.4.2 Reserve P.argin Assessment 8.4.3 Capacity /Featload C:mparisons 8.4.4 Schedule Evaluation 8.4.5 Conclusion ,i Other Envirervaantal Reviews \\ ;i 9.1 Alternatives to the Project: Energy Sources and Systees 10.4 Beneftt-Cest Ealance Enclosure C 8.4-I x W 5 M' '
- n-
,/- / 4
-_.7 y a yg%92gg 4?%tJZL D.I M C W M g g Q ;~Q~ W^P'At%1 T 'S $?M E+T ^- 't e Pt R < I April 1977 cp ; 1. PURPOSE DO SCCPE } gg
- =
The purpose of this environmental standard review plan (ESEP) is to direct. i, the staf f's review and assessment of the need fcr new baseload generating capacity. -b4 This will include an assessment of the tlaing of the need for the additional capacity. ~ ) k~ The scope of the review directed by this plan will include a comparison of baseload capacity with baseload demand, a reserve margin assessment, a comparison f of total capacity in relation to peak 1 cad demand, a schedule evaluation, and an uittsate conclusion regarding the need for the electrical production capability a of the proposed facility. ' d .M.y.) II. REQUIRfD CATA AND INF0 NATION y[A ( f $1nce the principal inputs to this ESRP are se environmental reviews for j;7 $J E5 Sections 8.2 and 8.3, the required data of those sections should ce used in Q/ this section. In Mdition, the follo.ing data amj information will usually be ( [ required: Ll,2'h k A. Projected baseload demand from the present to 3 years after initial 62 commercial operation of all prcposed units. y B. Raserve margin criteria for the a;;1(cant's service area. DT y? 'f, C. The applicant's calculated reserve margins extending frem the present ]ffj to the first 3 years af ter initial operation of all proposed units. 4-* g Q.3 D. Historical data on installed and actual reserve margins at the time of --T summer and winter peat hourly demand for the 15 years prior to the date of application. g ( ~ f.@] i E. The relationship between reserve sargin (espressed as percent) and !.kA c:. system reliability level (expressed as one day's cutage in 10 years, 5 years. u.t etc.). ( Y,'n Enc 1cture C T 8.4-2 4m a T-i ^,U , an i IDb1 " N. ' ' *#1mme r - M enar g*M '~ , _n Emv_ um. m_2r! M PI_e ra c if %t i
L E MICRM ^~ ~^ $lN5$- q,Qag>> 2 w q mVWG;;%;hW^i;'. ',iSR.h NY ~ r ,qs.m ,ir,h2 %wr .~ y. i .tec i .QMM MW l$ Wb. mbm April 1977 mn.; M*. ,. My;q ^ I!!. AV1YSIS PROCEDURE G0f :.. ( y % c.e ,q% The revie.er will calculate baseload demand as that portion of forecasted, f t, ' kWh sales occurring at loads equal to or less than the average load. The forecasted u +h.a,1 hk growth rates of kWh sales to be used in this analysis include the appitcant's' j;g.q forecast, and the high, midrange, and low forecasts developed by the staff (ES
- r /.'t-Sectica 8.2.1).
If the range of ressenable forecasts developed by the staff a' includes the applicant's growth rate, the reviewer util perform the analysis for
- g[
the high and low forecast of the range and the appifcant's forecast. If the n[ 1 7 range of forecasts falls totally below the applicant's forecast. the reviewer j [#l, will use the high, midrange, and low kWh sales developed by the staff. If the j range of forecasts falls totally abcie the appifcant's forecast. the reviewer W util use the appitcant's forecast ird the icw and midrange staff forecasts. s;b - C:4- ! 's.M The reviewer will analyze the peerer supply data (e.g., capacity factors, n , q.; +e variable costs, redesignations) and estimate the baseload capacity of the system h using the evaluation of ES Section 8.3. s ( The reviewer will compare the supoly of baselcad capacity with denand for
- mly, baseload capstity for the first 3 years of ccmssercial operation of all prSposed
'l I units. The reviewer will identify the reserve margin
- retirements currently in
.h acceptance for the a:pitcant's service area and will identify the organization z responsible for establishing this requirement. The reviewer will detennine if the reserve margin requirements at the time the proposed units are sc.ieduled to
- j begin operation are different from the ct
- rrent reserve margin requirements. The
-) Reserves are defined in this ESRP as the difference between accredited net i generating cepacity and peakload resconsibility; the reserve nargin is this difference divided by tre pestload responsibility. L <3 e 1'h Enc 1csure C 8.4-3 .i 1 4 t [ A;*i,v m g,em.v.c.mceer h- - ~" ['-b .___-,s--orw-w g ' ^ ~^
kl ~ l l! l l Aprft 1917 reviewer will contact the approprf ate regf onal relf ability council, other rella. ' h bility councils, power pools, and the Federal Power Cornf ssion to compare this ( n reserva margin requiremant with requirements reccrriended by these organizations. The rbiswer will calculate the appifcant's accredited generating capacity (f.e., total installed capacity plus nonfirm purchases and less nonffm sales) { j for the perfod extending from 1 year prior to cassertfal operation of the prg.osed p ~ l first unit to the third year of ccumertfal operation of the proposed last unit l I The reviewer will calculate peakload* responsibilf ty based on the growth rates for peakload demand calculated for ES Sectfon 8.2.1. s h For reviews requiring additional staff analysis, the reviewer wf11 calculate s $1 r peakload responsiblitty based on three forecasted growth rates for peakload e demand. Thece will be determined by contrasting the app 1feant's projected growth y 1 rate for system peakload with the range of growth rates developed by the staff M:. If the range of reasonable forecasts developed by the staff y.~ for the system peak. Includes the applicant's forecast, the reviewer will perform the analysis for g the high forecast of the range, the applicant's forecast, and the low forecast \\" y tv of the range. If the range of forecasts falls totall'y below the appitcant's M ,;fu forecast the reviewer will use the staff forecasts. If the range of forecasts falls totally above the applicant's forect.st the reviewer will use the appifcant's [$3 l M forecast and the staf f's low and midrange forecasts. d m t; For each estf aate of peakload responsibility ** and for each year under con-ifL.b sideration, the reviewer will calculate reserve margin as: %h y For each growth rate used, calculate system neakload for the relevant B years and adjust for fim purchases and sales and interruptible contracts M i to obtain peakload responsiblifty. 3 ee Peakload responsibility is defined as systen Icad plus ffru sales and 4 yIh less ff ra purchases. Ej Mj _f a '.j D 8.4 4 Inclosure C f a 5,kI O g b q x 2 j'TX*" u_ O L=b=.., ":.--nr rvy.0,7 7; ' Y%m %a g _WLWO b M' h'"' ~
m g;--- ew $N@if1 ? ~ l* v?& m m k l h Yi MPAT/.I
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April 1977 4 '.Qia W ).: m. ~ Nk*hl ( Reserve Margin Feenload Responsibility Gf Peak 1 cad Responsibility - Accredited Generating Capacity a g op.{V i Eased on the reserve margins and the projections for baseload danand, the [h {E 1 d/ reviewer will determine the timespan representing the probable dates when plant ~ r 4%$ capacity will initially be needed. .-ci > w., The reviewer will prepara an analysis of the costs and benefits of not having sufficient and timely capacity additions and also the costs and benefits @k y(; 2:f;T Ej of adding capacity too soon. For these purposes, the reviewer will assume the ,- 3 [i[; applicant's proposed date of ceczercial operation of all proposed units and consider the effects of the load saterializing 3 years earlier than this date QQ ~ and 3 years later than this date. The reviewer say shif t the 6 year timespan ,gp where conditions specific to the service area suggest this to be appropriate. Es\\;C. Appendix A to this plan contains suggested examples of some of the elements to ~. 'fD be considered in this analysis. The reviewer is cautioned that treatment of l this subject will require. at a minimus, participation by the socioeconomic and p; ben
- fit-cost revfewers.
- .,h' f
.~' IV. WALUATIC't si.N projected peakload responsibility plus the reserve requirement exceeds the total accredited generating capacity, and absent special circumstances, these findings justify the cenclusion that new capacity is warranted. Although this criterion does rot show a need for baseload capacity. it does demonstrate a need j for new capacity that is independent of type. This criterion, coupled with an ~,.. affirmative indication that there is a nead for baseload capacity, justifies a .j .' I* baseload addition within the timespan determined by the reviewer's forecast analyst s. i ) s , d if the above criteria cannot be eet it fr.ay still be possible that the i 'I proposed facility will be needed on some other basis. Additional considerations { i include the following: 1: Yl .] A. The applicant's need to diversify sources of energy (e.g.. using a mix ~b of nuclear fuel and coal for baseload generation); 8.4-5 Enclosure C -ij I ,l i i " Y *. f [M'M T".Y = "," c 11.' 'Ar o < - W."
- w m
as ~_s , _ =.g w m- - .2w n .n n
1 ,f l k i W 9 t '(' 1 n. ,1 h April 1977 ,:1 8. The potential to reduce the average cost of electricity to consurers; ( W P, 4 l C. The nation-wide need to reduce re11ance on scarce fuels; I lI D. Where a significant benefit-cost advantage is associated with plant 2 operation before system demand for the plant capacity develops. (This will kJ require the reviewer's benefit-cost evaluation of the consequences of not having' ) ~ sufffcient baseload capacity or of adding this capacity too soon.) l i J. 1: i If none of the above criteria can be satisfied. the reviewer may conclude '3 that there is no need for additional taseload generating capability of the scale i represented by the appilcant's proposal during the timespan considered. ( 4 V. 1NPUT TO THE ENVIRO'FENTAL STATDtENT ] = }l 1 c This section of the environmental statement will te planned to accorelish A the following objectives: (1) public disclosure of the applicant's forecast of ) need for the proposed project. (2) a presentation cf the staff's analysis of the ( applicant's forecast, and (3) a presentation of the staff's conclusion of whether + additional capact'y is needed within the ticespan developed by the staff. The following information will usually be included in ES Section 8.4. c A. A table showing baseload denands, baseload capacities, and resulti..g '2 M.. deficit or surplus (see Table 8.4-1). l H Q 8. A table showing peakloa1 responsibilities, accredited generating capacities. and resulting reserve margin (see Table 8.4-2). ij j, ,G C. A brief description of the reserve margin deemed desirable by the staff based on its evaluation of applicant's analysis and supplerentary sources cf inf oma tion. , i., j f 1 1 ( l Enclosum C ~
- 8. 4-6 l
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i ^ ^ ) - m-( z3= ;M ) E G A 3T T hS W k EA 0 - C H HE g S GA IC R HF _ O . e a h f S P RU T' i S NT ( AS CA IC LE E PR h C PO N AF 4 A l. S L h I A D B A M Y T f' E I T C C DS S A NA P EC ' hlS E A f T C WR A OO R D LF A H C T L k W t O s R A G B E E 1 R H 3T 1 m 4 T hS I EA 8 R C E HE E C ) CR L N m HF IC B U } A [ T E 3 C O N A W 'S L l. A D T 8 C NT AS l I O LE Y D CA T A IC C L FR l* A t FO P s AF A A C B D N } A T O DS e L NA n [ IC i s E l A WR n B OO o LF em oc o t d 7 e DY t l^ Al c 0t) e j tam 1c p x sP( e AA BC s i it nu r l, A 4 5 6 7 3 a A 6 3 0 8 8 e I 9 9 9 9 9 y Y 1 3 1 1 1 a)w mN;Ea n I- ,4 -, ;rd , k a;i o " ay: >)m t)4l,~1y;q.%s,*'ff, 4 h,.pl dgq , 9 ,, s j ppt.., s .,- l d ~.'*., j,, ~ r . et 'i. g/.X
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L.v h : 1 *7 A ] ; G _ S Q S $^^h N - ^- - - ^^^ "^^ 2 = **ai k- =-,,- 3 __y2 2 ;._ _ . - _3 =. 24 _- i r I .F .? 9 p - d w', .i {. .:l a 4 l)., s 'r- $1. I.l TA3LE 8.4-2 , -:.. l ?' RESERVE MARGIN L'NCER TEEE CR0hTH RATE SCDIARIOS i;;> YEAR ACCREDITED SYSTD4 PEAKLOAD RESPCEIBILITY (MW) RESERVE MAGIN (5 0F PEAKLOAD RESPONSIBILITY) 5 se GENERATIM CATACITT LOW-END APPLICANT'S HIGH-IN3 5 (KJ) FCRECAST F(ALCA5T FCRECAST FCRECAST FCRICAST FORECAST LO'-END APPLICANT'S HIGM-END d 1 r=7 ' -i 19C4 r 1935* d .rl. r y .~w: m 39 3 r
- f,,..
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- 1937
[ 21 1938 ,p# , (t year unit is expected to come online .g N g c'r W} g < a e ^ :'M. a E +< n ,i.I C
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4['j f N_ $h -!N-f[ffd O rts 1971 My - WO e D. - + vh n i ( The staff's concluston as to whether u not addf tforel capacity (represented by the proposed plant) is needed within the afmespan develosed t,yN h s "1,, the staff. pye T 4,o/: y?[y n E. A tabulation of costs and beneff ts associated with bringing the proposed W
- u. 3y%g>
plant onifne as scheduled but not having the electrical demand caterf al.lte as W1 projected. %*C'& C% t I ' 74.Q) The reviemer will provide inputs or ensure that inputs wl.11 be redt to the IkM rt following E5 sectionst h' w.L'/ c
+ t(s *'4,
x s 7 d<,* [.__-1 ? h. l p Regarding the first criterion, no specific technique of forecasting (econo-metric or judgmental) will be required. However. no forecast will be accept- ~ I able unless it includes consideration of the following causal factors which tra QQ' a t ~ potentially might have a significant impact on feture electricity demand 3') growth in the service area or power pool region (to be evaluated whether M w.,, \\ Ihrfhp the impact is deemed significant or not): h,'; 4 y growth in regional population, number of households or residential 4 (i) customers, cocrercial and industrial activity (especially large 74A } a Q firms that are heavy users of electricity); A /M (11) a sensitivity analysis of the impact of high and low assumptions 6.a N of rising real prices of electricity, but not necessarily a r specific form of rate restructuring; ,g .h f (iii) the collective impact of voluntary and government-induced con-Y% f servation Teasures that are reasonably foreseeable to occur within q f h the forecast period of relevance to the icrediate investment decision; y,' i':, regional saturation and baseload implications in the use of elec-(iv) 7.,.,,6,, tricity in both su-rcr and winter space-conditioning and for p ~ P l /s other appliances using substantial electricity;
- fG.,,.
.a. (v) the relationship of fuel substitution in the region such as the h /l,'ij use of heat pu: ps or solar energy in space heating and cooling, r it : the growth of all-electric systems in new building construction, (/:( ,,p{T industrial conversion frca gas to electric furnaces, etc., includ- ,2f P~j ing the stimulus of alternative scenario assumiptions.on relative '[ price movements and fuel interruption uncertainties for the key 'i fuel options; and ,n _.al. d \\ u_: i - ~ ~ - o s n j i 3 r 4 a discussion of the outlook.for technological advances improving (vi) s the efficiencies of electrical consumption or in developing new ' ~ I ~ a ~ uses for electricity of importance to the regional analysis. Forecasts of electrical denund should be provided separately for the major ( In residential, industrial, commercial and other. custo.wr classes: ascertaining r.eed for power, the unreliabilities inherent in forecasting 4 rethodologies would not require a precise year of need, or scheduled inservice date, but rather a " window of launch" of several years would suffice correspcnding to a range of high and low forecasts of demand growth 4,; k[ The asym-for baseload capacity additions with feasible interconnection. %g metry of cost penalties for positive or negative errors in forecasting p' o S that could reasonably be expected for the region served by the applicant's g system should be related to the analysis of a " window of launch." M 3egarding the second and third criteria, in some cases it might be expected y e that these public benefits might individually or together support the need -y [ for adding the proposed facility even if there is forecast little or no M - L It ] growth in the demand for electricity in the applicant's service area. h is recognized that the consequent level of reserve margin may justifiably I (,. exceed, for a temporary period, the conventional reliability criterion Cf as recoepended by the regional electric reliability council. l V2 h
- t..
[ Enclosure D J-
- i U
i in Q, ^ *O 1 -msm ' O m ~A MTK '~; aun r> _ -- ,w_., mme \\ =; 7-
- a
.l w, oomm., ' f-* \\ NUCLEAR REGut.ATORy emamew %m, y unansueton.o.c. asses .tp a lb i eel %,***=*/ (%.y June 10, 1977 ~ -.Q ~ .o .] [IQpm MEMORANDUM FOR: Edson G. Case, Acting Ofrector ,; ;q f.y$ i. Office of Nuclear Reactor Regulation ~ 6: c::ap dM!d FRON: Howard K. Shapar Executive Legal Director J %@I M D SL'BJECT: DISCUSSION OF ENERGY CONSERVATION AND RELATED 3 ALTERNATIVES IN ENVIRONMENTAL STATEMENTS [W & 2f [gg.'Qh As I am sure you are aware, in the past months thue has be'$ increasing ynt " Administration, media, and public attention devoted to eners conserva-tion measures and related technologies for reducing need for new electric Q gj It is likely that in the coming year or 50 issues baseload capacity. regarding energy conservation and related technology alternatives for h. f(,5fM reducing the need for baseload generating capacity will be raised more t; g/ frequently in contested reactor licensing cases. Thus, I.would like to A call to your attention a potentially serious legal problem with the p?,/, y type of discussion of energy conservation measures in some power reactor .If9 >. construction permit environmental impact statements. Np,.t } NEPA requires consideration of energy conservatico measures and alter-s , f.[,1 natives to new electric baseload capacity in environmental impactThus, ,,a.i g statements for construction permits for nuclear power reactors. jf.ls.$ such energy conservation measures es rate structure changes (pesk lood ( pricing, etc.) and utility funding of conservation 1:rprovements, as ~g J ; well as related alternatives that would serve to reduce the need for 'N, baseload generating capacity, such as use of heat pumps, solar space f-heating, and co-generation must be discussed. Conservation measures and alternatives that could only serve as partial substitutes for a .1-nuclear reactor of the size proposed must be considered along with measures and alternatives that could serve as a complete substitute. Finally, the NRC staff is under an independent obligation to evaluate f. 1, these matters, and cannot simply sit back and let the issues be raised by i.nervenors or licensing boards. .I 6 It is in this light that we re-examined an envircrrtental impact state-ment for a nuclear poder reactor that has just been through the NRC - ' / LWA review process through final Appeal Board decision--the state-ment for Hartsville Nuclear Plant Units lA, 2A, IB, and 2B (ALAB- ). In Hartsville the staff environmental impact statecent did not 2 discuss these matters in detail. Solar power (presumably including solar spcce heating) and other new technologies were simply dismissed Enclosure E W. 9 DM '=$ .M GmD N,YI _ .IC-) .Aj' g g / I' .*w I 1 ':c l t.h./. 2-as not "sufficiently developed." The short discussion of energy con-- servation is essentially limited to constner education and price- [.. z.h induced conservation. Indeed, cost figures for solar space heating and information on effectiveness of such systems had to be supplied g by a witness for latervenors in the case. I believe that a more extensive and in-depth discussion of these natters is required to cunply with NEPA. Alternatives and energy h conservation measures that may only partially substitute for the W proposed reactor, and thus suggest a smaller reactor or other smaller unit as an alternative, also need to be discussed in more 2 detail. Further, I believe that it would be wise to set forth in 'fi reasonable detail in the envircnmental impact statement why it is that new technologies can be dismissed as not sufficiently developed when the proposed reactor will likely be operating some forty years j I in the future. A I understand that some recent environmental impact statements do M discuss these matters in more detail. However, we need a reason-p ably consistent approach, and there are serious legal risks y associated with any policy of " holding back" detailed discussion 9]j of these matters until they are raised by an intervenor or licens-g ing board. g; Finally, Milt Grossman will be happy to discuss these matters ,j; further with you and your staff and has developed a list of ( materials (relating to the foregoing) that you may find useful. M q ~ { . 3 f/ h Od?ff 9 e ,Howard K. Shapar f 'm f l Executive Legal Director 'l p p p .) lC e l 6 f J .Q ' l N I Enclosure E 4 9-u-{ }KgY. ""4 .F I -s i - t. i 74-I-~~ e 7 l I l ,m y y> w4 RECD INFORMATION AND ANALYSES REGARDING ENERGY CONE 4 TION AND ALTERNATE ENERGY SOURCES M@ ~ WM President Carter's Energy Address on Energy of April 21, 1977, (H. Doc._ 4/d 95-128, 95th Cong.,1st Sess.), set a goal of reducing the annual Conser-growth in energy consumption to less than 2 percent a year. ig,y gbgj vation and improved energy efficiency were announced as the cornerstones of this effort. They were to be fostered by a system of Government ggg rewards, mandates and penalties. As spelled out in this addres: and ydp "The National Energy P'an " Energy Planning and Policy, Executive Office JA of the President (April 79, 1977), forced changes in demand patterns, 7<g lM conservation, and the use of alternative energy sources is to cause a @ fit F decrease in the use of oil and gas and because a slower rate of growth &'f.f in the use of electricity generated at central stations from coal or S nuclear fuels than in the. >ast. See The National Energy Plan, supra. @d
- p. 95.
@4 4 Other prominent studies suggesting that a new and more detailed look Q( * $ must be taken at the ability and desirability of conservation and alternative energy sources to lessen the fonnerly projected need for % fj growth in centrally produced electric generating capacity include $xPgj " Nuclear Power Issues and Choices," p. 129, Nuclear Policy Study Group, e Ford Foundation, Ballanger Publishing Co. (1977); Amory 8. Lovins, y }V[dv " Energy Stratecy: The Road Not Taken," Foreign Affairs Quarterly, p. f 65 (October 1976); Correspondence between tecry B. Lovins and Hans .6% %'" Mj Bethe,ForeignAffairsQuarterly(April 1977);M.H.RossandR.H. ..,4 Williams, " Energy Efficiency - Our Most Underrated Energy Resources," %3 Bullctin nf the Atomic Scientists, p. 30 (hovember 1976). M: These studies have raised the question of whether d rand should be &g met, and have suggested various methods of reducing demand, of con-v': N. serving energy and of supplying energy. We shall briefly discuss some of the core recent and prominect proposals. It should first be noted that in the past various methods of altering demand were based on voluntary actions. Now preposals have t.en made tL change the , 'C demand for centrally produced electricity by law, enher indirectly 8 s Second, it by price and tax incentives, or directly by randate. e7-should be noted that 1985 and 1990 are getting closer, and alter-h,. native energy sources predicted for those times are coming closer Sy? to technical and economic feasibility. .w t :.. ~;J f Reduction in Need for New Capacity _ In Nuclear Power Issues and Choices, p.149, it is estimated that approximately one-third of ali energy produced in the United States ^ L D:1 is " rejected" energy. The President has pointed to conservation [? and energy efficiency as the fastest and probably least costly means N9 1 of mitigating our energy shortage. The folicwing approaches are _r likely to receive serious attention: c, ,% d 0 h Enclosure E D ~ [ ' ' ( i J 2- . i., ~ 1. Mandatory Buildir.g Efficiency Standards I The Naticnal Energy Plan, pp. XV-XVI, 40-41, looks to bringing 90 v k percent of existing residences, all new residences and many other 9 buildings up to nandatory Federal energy standards by 1985. Pro-l, posed Adainistration methods of doing this include tax credits. the provision of and billing for insulation and conversion services by public utilities, guaranteed loans, grants to non-profit organi-zations and low-income families. Proposals have also been made to i allow cr force utilities to stop serving energy inefficient i cus torners. In addition to achieving greater efficiency from improved insulation, making buildings energy efficient also implies l forced conversions from resistance heating to more efficient modes by 1985. Twenty percent of U. S. energy is used te heat and cool { buildings, and such mandatory changes in haating mcdes and insula-J tion could have a significant effect on utility demand. 2. Mandatory Apolitnce Efficiency Standards Mandator) efficiency standards are proposed for home appliances, which include furnaces, hot water heaters, air-conditioners and i i refrige:ators. Home appliances account for 20 percent of U. S. ( energy consu ption. National Energy Plan, p. 41. 9 3. Industry Efficiency Standards Various measures are proposed to make industry, which uses 37 percent of the nation's energy, more energy efficient. Measures ) i [ 7 proposed include a 10 percent investment tax credit, a require- ) // ment of energy efficient equipment as a condition of service, and the use of solar energy systems. National Energy Plan, pp. 43-44. ji Various load management measures such as cogeneration, peak p pricing and interruptible service are also relevant. The nature i S of an aoplicant's industrial lead may be significantly affected by such programs. See Nuclear Power Issues and Choices, pp.151-Q 4 152. n is i 4. Cogeneration _ ft b, At one time cogeneration provided 15 percent of U. S. energy y needs. Tax credits and utility refoms, including fair rates 5 for cogenerated energy, are proposed to encourage cogeneration. 3 See National Energy Plan, pp. 45-46; Nuclear Power Issues and []-l* Choices, pp. 152-153. 3 e Enclosure E 2.s 1 L6 s
- q 3
,,._,m g-7,yey, --e 7,,. -p ~ mq. u, .n., : :.: _ , _ -_w _ ' -. _ _;_ _ ;, ~ .y @d i A e N,$ - 5..Trensmission Efficiencies ~ b-h Improved transmission technology may need to be considered in' ~ ,q 4p. h . judging the need for a facility or the option of building k[phe sqb' alternate fuel facilities at other sites. See Nuclear Power Issues and Choices _, p. 153-154. Ofgy,; 6. Reduction of Reserve Capacity rM Questions have been raised as to whether the reserve require-dp;% ments and other rules of the tarious Reliability Councils and ldbi regicnal power pools are consistent with national goals of $kj conserving resources and energy. Studies are now being r.ade of T;Wie:p whether the prMer.t reliability goal of a loss of load only 1 GhA f once in ten years is worth attaining. See New York Pulbic Service Mg? Comission, Case 269R5, Opinion Analyzing Plans Pursuant to 9149-b Qg of the Public Service t.aw, December 7, 1976. Proposed mandatory y;jfQM utility interconnection, sales, pooling and wheeling could affect M .b the need for the particular plant in view of conditions in the [Qf,{J See National Energy Plan, p. 74. area. DG hyh 7. Rate Refom vn h@H Amng the rate refom measurts being discussed are peak pricing. fyrM.a prohibition of declining block rates, and mandatory interruptible N+y, f See National Eneroy Plan _, pp. XVI and 46; Nuclear Sp power rates. djygyy Power Issues and Choices _, pp. 148-150. bi pEj@pp 8. Smaller Facilities and Delayed Authorizaticn n o,n The totality conservation and energy efficiency strategies may
- NG make smaller facilities and delayed authorizations realistic riW alternatives to licensing the proposed facility.
, s 1,;-. - v,; EW 1; Alternate Supplies of Energy 6M There appears to be a good deal of new infomation and opinion about 9%;\\ the technological development and comercial availability of alter-ki.Q.g. nativa energy sources. In the case of construction pemits, we are d*b '.1 looking at alternate energy sources available after 1935. See . 727 i.$ JQ National Energy Plan, pp. 100-103. Among the matters being discussed .( T are: ... ; Q.f ,ca Q; 1. More Costly Energy Sources n ';u Some consideration has been given to the societal effects of using [9.I ; more costly sources of energy, rather than nuclear energy, and to W:.' the effects upon the country's productivity. See Nuclear Power PJ ,3 .s . i m Enclosurt E ? t ' p 6 [x"l-
- . p w ~,.
g wv a ~y ~ p ~., w.~.,.y yr ., 4, ~ _m s u.. _ z,, m .ma a w m t 4-i [ 1 Issues and Choices, pp. 49-65; Cf. National Energy Plan, pp. 97-98, A 50-55. The issue could arise in our consideration of alternatives-. 2. Solar Energy Solar power is now thought to be competitive with more traditional fonns of energy in many parts of the country for space and water
- ?
heating. See National Energy Plan, pp. XIII, 75-77; Nuclear Power Issues and Choices, p. 130. It is a national goal to use solar [ energy in 2-1/2 million homes in 1985. To stimulate a solar heat-ing market, tax incentives are proposed for individuals, industry, and agriculture. More distant solar technologies such as tnermal- [ electric, photovoltaic, wind, ocean-gradient, etc., probably will ]0 not be available alternative sources of energy in the time periods with which we are involved. 3. Geothermal Energy l There is some indication that, in addition to hydrothermal l convection, energy may be obtained frcra hot dry rocks and geo-f pressurized domes in the 1980's and 1990's. National Energy Plan, I pp. 77-78; Nuclear Power Issues and Choices, pp. 138-143. ~ 4. Coal p Coal accounts for 90 percent of our energy reserves and only 18 percent of our production of energy. Along with nuclear power, the use of coal is being encouraged. See National Energy Plan, pp. 63-69; Nuclear Power Issuas and Choices, pp. 96-108. hew technologies such as solvent refined coal and fluidized bed cor.be:tica my becme factm s by 1985. A l 5. Hydroelectric Pcwer 'I Y Increased use of hydroelectric power from smaller facilities or +! upgraded facilities in the applicant's service area has been si f proposed. National Eneroy Plan, pp. 73-74. Q Th k? p 3
- A j
Enclosure E h O ]- - - - h' T q '~. ~ ^ ' ' ' m
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- - i s-' 2-J"'" me r n b ~;j t ' ( i p '. b < Nh ' M0 VALUE-IMPACT ASSESSMENT ~- .t ON g q RECOMENDED p0LICY REGARDING TREATMENT OF b ? jJ NEED FOR BASELOAD FACILITY Wi;l N pWh 1. The Proposed Actipn, /Y.&,,7 k A sumary of the proposed Comission action recomended by the j hg staff is as follows: . ~. ; The principal recomendation is to develop legislation to 7 a. '*d.1 } permit States to make dispositive findings regarding need for baseload facility, using general legislative criteria which establish minimum considerations in making such g.i evaluations. [ b. Consider at a later date proposed rulemaking which could v.r. e w fy be designed to (1) identify guidelines for the scope of g.s n 4 r U '- treatment and criteria for decisionmaking for CP and OL y.7.. y cE.,? applications and for the reopening of the issue once an .M : jj3,p' LWA or a CP has been issued and (2) define the role that W. ' I O,. e ; State analyses can play in the NRC decisionmaking process. 57b, c. Continue with the present method of handling applications, gy '- i{h q including improvements in analysis techniques in areas n., K:;q, such as conservation as well as implementation of ad hoc i n cooperative efforts to utilize appropriately State
- r 4 3.t expertise in NRC decisionmaking.
- 11-
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. O, / r d. Cooperate as requested in the conduct of any regional ge,, ', 2 hearings regarding need for power, with price emphasis g 4 % e a' ,4J ~+ g 6 gg V ,g /J'* 7 g,, - -'
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,g, tys' =, , 4FlJ* f f' a ,g, { 9 4 1 f '( s,)"#4, 'g- % Q. ' iiS _ g ' ' e l ' ; i a _,W _ E' _'
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+ra m _ _ i, f " r: 's e g .a f 7 ( l l k on striving for a conclusion to any such hearings that J. I ~ A f could be utilized in a dispositive fashion for one or !5 more aspects of NRC's consideration of need for base-A1 rv e~ load facility. h I The detailed pros and cons of each of the alternative courses ?. I i of action as well as the costs of implementation of those p various alternative courses of action are discussed in the L These discussions will not be repeated here. {h staff paper. y q since they are largely inherent in the following discussion g [ of value-impact. 3 I ? 6 A 2. Value of Proposed Action h facets of the total value of the recommended h.0 F There are many h A summary assessment of value is as follows: ,g y action. j;; Five years worth of experience should permit the s,' a. / Commission to establish fair and reasonable generic tha t are rules regarding d~ccisionmaking in this area 1 in full conformance with NEpA's naridate to provide e D independent evaluations. If so, such would be useful the staf f, the Boards, and the public, to the applicant, since critical manpower and other resources could be -{ s focused on the areas of analysis of prime importance to ( NRC decisionmaking. This would not only have the ,j 6 potential for reduction of overall resources currently I a applied to this area of analysis and review, but would ej reduce the likelihood of delays in the Cp and OL
- u A
decisionmaking process. 0 Enclosure F
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y b. Rulersking would not only. bring into better focus the 2.,,.,, gp decisionmaking criteria, but it would also uniquely place M on the public record all disparate viewpoints on this sub- {k) T a; ject. Such vispoints on the record would be of value not ?] Mot only to staff analysis in this area but also to the States, i %^% should legislation be passed that permits State action to be t ) dispositive of the issue. M9 c. Almost all States require the issuance of a Certificate of Public Convenience and Necessity or some other similar N ' R1 f;f=E;MY y A, certificate before a utility can add capacity to its fB &g; p(gej, system. Many States are also developing increased inde-Wpm MQd pendent expertise in the evaluation of need for capacity. , &? F yp Some States do substantially more independent analysis of l ,f, o a. !bt'g need for capacity than does the ?"tC. Since the trend is for ] Q /q the States to become more deeply involved in this issue, and wy;j p since it is unlikely that a utility would propose the addition A of a billion dollar facility unless there is a reasonable Y[ establishment of need, it appears that there u substantially .L i-I y; s.r '@ ;fd less importance to NRC's continued federal presence in this =n9a s.J.'7 area. Legislation to permit the States to make dispositive ,9%i riW-decisions would eliminate unnecessary duplicative reviews by X'-lq c n }ypM NRC and would focus on the importance of proper State decisions,
- 5 c.
g'f0/ which is really where such regional decisions should be made. ~ _' S g This would have the potential of an annual savings to NRC of s y!.,p 5-6 man-years of NRR staff time, $400,000 contrartual funding, i '. E and about 15% of OELD, ASLB, and ALAB manpoer currently devoted
- 1 a
[. f'. to environmental hearings. Enclosure F I I .s. m u u n, -~~ ~ 3 3. Cost of Proposed Action y In addition to the current manpower and contractual expenditures N g3 required to conduct reviews of need for baseload facility, to improve 4 g'., analyses in areas such as conservation, and to implement ad hoc M 3.] cooperative efforts with States, there would be a near-term increase q1 in resources required to implement the staff recommendations. These increases are as follows: a. Preparation of legislation would require minimal NRC staff effort G T (less than 0.5 man-years). However, the long-term savings to NRC (71 ,M would be substantial. There wc.Id be an increased cost to some Xg States to perform a reasonable independent analysis of need for facility, but the overall (applicant, Federal State, and public) L5 long-term commitment of resources in this area would be reduced P1y due to elimination of duplicative Federal review, since many States already perform such a review and others are increasing H their efforts in this area. b. Proposing rules that are focused on decisionmaking criteria and j 1 on the circumstances under which hRC may utilize State analyses would require less manpower than if the rulenaking were r heavily focused on detailed methodology. A properly focused u j rulemaking in accordance with the staff recomendation would g likely require about two man-years to total NRC staff effort, , 1..- plus perhaps another man-year if public hearings were held. ]? 'Y 5 Enclosure F w '- -1 ym 3; y nyyp. w.q( ~ .[ ~ :e, ;g[ y' ~ . -Q . -y 3; e
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41 However, the long-term costs would likely be minimal or kI)N,@;;,p( PE. negative for all parties (NRC, the utilities, and the public) .7}5th M 1 r: s p w.,.,h.n, due to a clearer identification of the decisionmaking hh y.! r)y a :rw.y criteria, a possible reduction in required NRC analyses because [%.k@7T i.* s;f of formalized utilization of State expertise, and a possible b t e,., 9.,h. decrease in delays in NRC's CP and OL decisionmaking process. s y: gig dyMd NRC's general participation in regional hearings sponsored by .. wr.G c. %_,<.}P27,' some other Federal agency could have a minirr.al manpower impact gigsa.fi.. p%S' (less than one man-year). However, this mode of involvement t gy/w$ WMN likely would not be useful. In order to be useful, NRC
- (;;M&*,sq would need to perform its own analyses of need for facility h%[)da
}yEMY as input to these hearings, and a minimum NRC resource g.j~pg{ft .k expenditure equivalent to one CP application would be required .m$:.h,lT
- ' A
?!-QI for each hearing (a minimum of about one man-year of total NRC p: l,P t'3[ staff time plus $40,000 contractual). This type of expenditure ,p+ would not be cost-beneficial to NRC, unless the results of such u.
- g r'. c <
t a hearing could be utilized to constrain substai.tially the NRC l'. ' - y analysis required for a future application for CP in that _ ;G ', " ~. < region.
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~ _j l -.3.,~... -e, 3_* l.s N6 ~ ea {' ' OGC/0PE Comments f Comments received by OGC and OPE are attached. Staff h response to these comments is given below. y 'P OGC - The basic thrust of the OGC comments is that the
- 4.,
Commission may be falling short of its fCPA obligations on Q A energy conservation issues, and that pending enactment of dy legislation or initiation of the suggested rulemaking the d M staff should be directed to respond in greater detail to M timely raised energy conservation contentions, at least ad until further guidance is obtained from the Supreme Court m N g.j in the review of the Aeschliman case. 'S ,l'; Staff's response to the comment is that staff will respond
- (
in greater detail to timely raised contentions, and it is y ti d) also currently sponsoring research to upgrade analysis in ) k this area. This will permit better investigation a' d reply y Q+ to contention ~s, as well as an improved treatment in the EIS. b j This improved treatment will also be of benefit in any 1 subsequent rulemaking proceedings. A general description .; c f of the upgrading regarding energy conservation is provided on ,a ..T pages 29 and 30 of Enclosure B. g 4 ] p J Enclosure G 3 ,'g 6 . n'., U 'y e & f g' F . w c. ~ e'... ' - ~ 10, z1 . s7.. j $..- s,. -\\ ~ J, + ' -_( - p.' <- - 7).. ~ JW < ;V. -4., ,, p 1 a ,e y .e i '. a ' ~
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1 ?R $,4:3., U: S*j.w P ' '::,,4; 2 N 7:L .. a.17 '" g F near-term h.EieZI* OPE - The basic OPE comment is that significant
- r 9(- c Also, there is a s
y khh; ?) emphasis should be placed on rulemaking. cp Yb5'. i suggestion that the draft Federal Register Notice be changed
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M b(j;1*h to include the reference to possible law changes which are 7 S.y.e made in the draft press release. %w, W ei Federal Register kdb k Sta f f response is that both the draf t
- +. DCU
[ Notice and the draf t press release have been eliminated that c.n r y from the staf f paper, because of 50 and ELO concern jf,f.g" simultaneous rulemaking might tend to weaken both approaches, vty;:i 9[i...*3Q h?Q,k) and because ELO did not believe that it would be useful to fijff 'OS$HU request public comment on possible subjects of rulenaking as & v.+; ua A: v The opposed to more specific proposals for rulemaking. j.9 J -.,
- j..y',7 revised staff paper does, however, show that the Con. mission rv.-
the rulemaking alternative should be pursued by notes that j; [y' the sta f f, any proposed rules should be subsequently submitted ,,. s ;<3 . Es {:w,;y g to the Commission, and the s ta f f should solicit the comments a W,'4 rj,Jyf 5tl?k the CEQ, the Sta tes, and others in the prepara tion of any of pf{ff r.; s L-![?' proposed rulemaking. ' reg. e 6 r;m ! QN;, .s,., I f ,, - " 1- fj ? Enclosure G ,,o:V.. e a J N s b T ( ,o -w-r L. ~ ~~;' X, t ,.. i. l l [ UNitro sf AMS [g \\ fduCLEAM HtiGUL/.TOAY cOMMisstCN t e fvAsmm4 TON. u. c. 20MS ~ 3.... /y s ~. t Juce 16, 1977 i l I AEMCRA.'uX24 FOR: T. A. F.ern, Assistant to tr.e Executive irector for Operations FRf#: oa:nes L. Kelley, Assistant General Ccunsel l.
SUBJECT:
ALTERNATIVE tVAh5 TO R CHESS NEED FCR BASELCAD FACILITY l This responds to your memorar.d:o cf Jure 13 recuesting our corcents on a draft Corrnission paper from NRR on alternative means to address j the need for a baselcad facility. In view of the short review time afforded, we have not mace specific ccreents en the details of the report at this time. Acknowledging that NEPA prescntly rec;aires Coacission review of the need-for-power issue on an ir.dtwidual basis for eacn licensed f acility, the' staff paper reco rends that NEPA t.e ar. ended to peruit need for powar to be determir.e3 by states or tay " Federal po er eurketing egencies" in lieu cf tr.c present ftEPA necnanisn, tr.at 1 a rule.-Wng proceeding be initiated to estaclisn criteria for j addressin; this issue untti legislaticn is acepted, anc that " current j initiatives * 'mith the states be continued. The reccerendaticns for legislation to perr.it h*C deference to state need-for-pcwer ceterminations and a ruiemeking proccading to estab-l lish generic criteria for-handling need-for-power and conservation issues are efforts which rtsy streamline reesent practices. However, as noted by the court in the Ver :n: Yanked case, the Cyrntssien v.ust meet its HEPA obligations (itner on a case-by-case b? sis in adjudica-li-tory proceedings cr generically in rulemaking proceedings. As noted by t.no Aesch1_irr.an court, the Cornissien r.sy be falling short of its .'t MEPA obligations on energy conservation issues. Pending enact =ent
- l a
of the suggested legislation or initiaticn of the suggested rulerak-a ing proceeding, it rc:ssins cur view that the staff should be directed 4 to respotxi in greater detail to ti..cly rcised energy conserystion l' issues in Cor:aission proceedings, at least until further guidance on 'J-this issus is available froci the Supreme Court in its review of the Aesch11 nn case, g 6 CO.'tTACT : ) John Griggs J 63-41233 Enclosure G ,,m. _x 1- - NDT C-- U - .m
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^ Q: y:... : 1 y..-. . <v y h Af This is not to say that' current staff practices in preparing EIS's et p are inadequate. As noted in the NRR paper, substantial cansideration (d[f r of enargy conservation 1s progranced inte each EIS. Rather where ip >.5j-specific energy cJnservation/noed-for-poteer contentions are, timely Of.f ",;fl raised by intervenors in licensing proceedings. present legal requits-9 ;j;.W ; annts may call for investigatica.and.rsply by the staff beycod what d'7 o $ ..; lj;iQ is contained in the EIS. It is in'tha.arca of response to specific contentions that present practicas saay not taeet the requirerents of Q.My n Aeschlimn. Shculd Aeschltran not be reversed by the Supreme Court, pk' p there is a risk that pending proceedings could be vulr.erable to NOA g;M a%e& J a ttack. -..a ,f.. P Q._ t.;" Q'v * ;,r;;,:k 37 (
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Lynn Connor Doc-Search Associates P.O. Box 57 Cabin J ohn, Md. 20818 October 27, 1981 EREEDOM OF INFORMATION EI REQUESI Division of Rules and Records U.S. !Juclear Regulatory Commission b A ~j/, gg Unshington, D.C. y_ FREEDOM OF IUFORMATIO!! ACT REQUEST
Dear Sirs:
This is a Freedom on Information Act request for docu-ments that I have been unable to locate in the Public Document Room. Would you please place the following documents there: 1) Status Report to the ACRS in the matter of WEC ECCS upper head injection evaluation model conformance to 10 CFR 50, Appendix K, dated 8/13/76. 2) Secy 77-355 Thank you. Sincerely, W W Lynn Connor t; i ,f 1 ,2}}