ML20055B293

Responds to Interrogatories Set 19 Re Const Cost of Crbr

ML20055B293
Person / Time
Site:	Clinch River
Issue date:	04/16/1982
From:	Feld S Office of Nuclear Reactor Regulation
To:	Leech P Office of Nuclear Reactor Regulation
Shared Package
ML20049H240	List: ML20054H334 ML20054H337 ML20054H779 ML20055B281 ML20055B284 ML20055B286 ML20055B288 ML20055B290 ML20055B291 ML20055B292 ML20055B293 ML20055B294
References
FOIA-82-272 NUDOCS 8207210198
Download: ML20055B293 (3)

Text

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P a o APR 161982 i

f1EMORANDUM FOR: Paul Leech, Project Manager Clinch River Breeder Reactor l Program Office l

l FROM: Sidney Feld, Acting Chief l

Ar.titrust and Economic Analysis Branch

SUBJECT:

RESPONSE TO INTERROGATORIES - SET 19

! 44. Isn't it true that the purpose of contingency costs in the construction

! costs of the CRBR is to cover contingencies arising after comencement of construction?

Response

A. The contingency construction cost estimate covers unforseen costs j

that may occur in the future and provides protection against known and specific risks. Contingency allowances have not been made to provide protection against changes in schedule, escalation rates different than the 8f. assumed, or for new scope added to the project.

B. None C. None D. Sid Feld (same as F) l E. None

! F. Sid Feld, Economist, Antitrust Economic Analysis Branch, ET, NRR,

45. Did the Staff obtain from the Applicants a specific cost of the design features and characteristics?

Response

l A. No. A cost breakout was provided but at a fairly high level of aggregation, e.g., R:1 equipment, 30P equipment, RM engineering, AE engineering, and similar levels of aggregation for Development and Operating Costs.

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, *J B. Applicants response to NRC item 320.7R, Nov.1981 C. None D. Sidney Feld, Economist, AEAB, NRR E. None F. Same as D.

46. If not, how does the Staff know whether the balance in the contingency costs is reasonbly adequate in light of all other uncertainties?

Response

A. The latest official cost estimate provided by the applicant contains a remaining contingency cost on total plant investment of $153.8 million on a to-go total plant investment of $1,701.9 million. There-fore, the contingency allowance is 9% of the total fyture plant investment. The NRC typically relies on the CONCEPT code as its independent check on capital cost estimates submitted by applicants.

l In the CONCEPT model the contingency allowance is set at 10% of l the total plant investment exclusive of interest and escalation.

l The staff views the 9% value used for CR as in reasonable agree-l ment with this independent measure, and concludes that the applicant's l remaining contingency cost is reasonable.

B. Applicant's response to NRC item 320.7R, Nov.1981 CONCEPT Code.

C. None D. Sid Feld, Economist, AEAB, NRR E. None F. Same as D.

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I C. R. Hudson II, Concept Users Manual, Oak Ridge National Laboratory, ORNL-5470, January 1979.

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47. Describe in detail how the Staff independently has evaluated the reason-ableness of the contingency cost figure in light of the past history of cost escalations of the CRBR.

Response (

A. See response to item 46. Also, the staff contends that as work l continues on the CRBR, the cost estimates become firmer and are less subject to cost contingencies. We note that project design work is about 90% complete and as of the end of fiscal year 1981, more than $500 million worth of hardware has been delivered or is on order with suppliers.

B. None C. None D. Sidney Feld, Economist, AEAB E. None F. Feld ys7 SID:!LY TELD Sidney Feld, Acting Chief Antitrust and Economic Analysis Branch Division of Engineering DISTRIBUTION:

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