ML20062E843

Requests Beco Provide Addl Financial Info Re Deferred Taxes, Depreciation & Deferred Fuel for Subj Facil

ML20062E843
Person / Time
Site:	05000471
Issue date:	07/14/1978
From:	Vassallo D Office of Nuclear Reactor Regulation
To:	Rhonda Butler BOSTON EDISON CO.
Shared Package
ML20062E842	List: ML20062E839 ML20062E843
References
NUDOCS 7812130072
Download: ML20062E843 (4)

Text

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,. o JUL 14 53 Cocket :io,. 50-471 , . .

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As a rescit cf cw review of the infer:atiers previded by letters, dated '

4ay 5,.1978,.Har 25,1973 azzi June 23,1978, concerning the financial. - -

"p1m for Pilgrim.Cniti 2?.we cannot concitade that the. infer =sticu previded  ;

desxsutrates a r-r-Me assurance that. the Scat =n Edisen (~ y will i cctsin the. ner-anary funds- to ccver its.sbare of t=e esti=mted v,.uounctica '

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r In r eing with our review of this matter, we ceIieve it apprcpriateito - -

advise you-of two pcssible. paths to cursue; (1) c=ntirne to review the- ~

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.,, current- fwumr plaar by requesting scre sun;cetive data for year current-.  ;

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. 'assumpticos f9r the projected. years 1973 and 1979, or (2) recuest that g i y:xx submit an alter sate ,f 4 -4mi plan unaec revisect. anci =cre conservative n

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In our revieir of the c=rrent Pilgria Unit 2- financial plac, we find that s -

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. the years 1978 and 133 are ci critieni sicnificance to the Boston Edisco ' '- l C -p.1.'s scare of the-plan Durizz, these years, ==eWons urx5erlying X '

the projecticas reflect a substantial increase in rat earnings, principal.Iy. -  !

in the third and f::crth gosrters orogecatica If tbese pr :cecticas were . ' '  ;

,achiawd, such facts would militate strcngly in making a favorable -

l fMm witit regard to- the f 4-i=J plani However, -u these projec:icas  :

not be; reali=ed by the acatonwrifw C::cpanT, sucstantial.dcubt wecid be ~g  !

cast upcn- the follcwing years of the projecticas and upcn the ccrrewf5 . j re-1eness of. the plan ., _g. . ,. .

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, , Is order $:sr us to. Barther -%c the; submitted finmcing =lan, ycn sbould '

W tan iW w. mica-1ieat in the Parlosure. ;4e are c=ncerned, .'mver, that. tte reaaremiensess cf the currently prm=4 financial plan. will strerogly depend en acnievicg the projec:ed third and fourth cuarter earnincs l fer 1978. Je, therefere, bellere it still. qcesticeable ::at f.e will :e .!

' acle to reach a faveracle find 1=g with regard to ne reoscraclenesa of tte  ;

clan, even after receiving ene infer =aticn requested in ::e E x::lesure, j

' tncut first reviewing tte ac+ .M achieved earnings t .rce:;a at lease ,::e wi a tnird quarter. =nis, of course, would result in a delay in eing a=le to . ~

ccsg:lete tte review. ,

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. -2 Alternatively ve ceuld further ccnsider the des =cstration of fire.ncial qualificaticas by evaluating a fi:w.ncing plan wnict: reflects,tne possibility of a acre ::xxiest i::y.revement in- firancial cenditico ?cr

'e  ;' thia psrgose, the acaten Edison My eM4 sdr:rit an alternne f1=aneire

. . . plan under revised arx1 =cre c=nservative assu::;tiens. . 'ese myticos

. - eu cenaidee the effect of cnly modest i=pecvementa in tt.e earni=g.s

'~.i arzi :::arket grfce.'to becjc value- ratio. for the. years 1978 arxi .197S crec recent . ,

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.Please advise unrla.is- to'your ' plans for subnitting the infer. atica described -

_ above_ Ir. yen have any questions ressrding the. requested infer.-atien, ' '

- please let.us knew.r- -.

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. Sincerily, '

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Goston Edison Cctnpany cc: !!r. James E. Larsen Hencrable Ellyn R. Weiss Project Engineer Assistant Attorney General Boston Edison Company Cer=cnweal th of Massachusetts 800 Boylston Street Cne Ashburton- Place,19th '?loor Scston, Massachusetts 02199 Scston, Massachusetts 031C5 Dale G. Stcodley,' Counsel Henry Herrman, Esq.

Boston Edison Ccapany 151 Trem nt Street, 27K 800 Boylston Street Boston, Massachusetts 02111 Boston, Hassachusetts 02199 Mr. & Mrs. Alan R. Cleeton George H. Lewald, Esq. 22 Mackintosh Street l Ropes & Gray Franklin, Massachusetts 02038 l

225 Franklin Street Boston, Massachusetts 02110 U. M. S ides cuality Assurance Manager William S. Abbot t Boston Edison Company Attorney & Counsellor at Law RFD #1 Rocky Hill acad 50 Ccngress Street, Suite 925 Plyrc.outh, Massachusetts 02360 Besten, Massachusetts 02109 i

't . R. A. Fortney

'8. N. Pushek EDS Nuclear Bechtel Power Corp. 220 Montgomery Street P. O. Gox 3695 San Francisco, California 94104 San Francisco, California 94119 Jchn D. Fassett Vice Presicent and General Counsel United Illur.inating Company 80 Temple Street

• New Haven, Ccnnecticut C6506 Mr. R. Newman Cerroustion Engineering, Corp.

1000 Prospect Hill Road Windsor, ccnnecticut 06095 W. C. Tallnan, President Public Service Ccmpany of .

New Hampshire 1000 Elm Street Manchester, New Hampshire 03105 4

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. ENCLOSURE RE0 VEST FOR ADDITIONAL ,

FINAllCI AL IllFORMATION HLGRTM UNIT 2 Provide detailed financial state.ments with explanatory narratives describing the basis for increases in items referred to in the Boston Edison Company's previous submittal, " Financial Schedule in Support of Increased Cash Flow."

Specific items to be addressed are:

(1) Deferred taxes (explain the basis for increases projected during the years 1978 and 1979, consistent with the company's accounting change in use of AFUDC normalization from FERC methodology to that directed by the Massachusetts OPU, and providing narratives of other significant changes, with com-putations thereof).

(2) Depreciation (describe assets to be added or retired for the year 1978, accompanied with rates. of depreciation, with supporting computations of amounts as stated).

(3) Ocferred fuel (explain basis of -increased source of funds from this account from 1977 to 1978, citing regulatory accounting changes, if, any, and computations documenting increased amounts

- as stated).

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