ML20062E855

Forwards Findings of Fact,Conclusion of Law & Order Issued by Wi Pub Svc Comm Re Advanced Plans for Constr of Util Facils

ML20062E855
Person / Time
Site:	05000502
Issue date:	08/17/1978
From:	Mittness L WISCONSIN, STATE OF
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Shared Package
ML20062E849	List: ML20062E845 ML20062E851 ML20062E855
References
05-EP-1, 5-EP-1, NUDOCS 7812130087
Download: ML20062E855 (52)

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h 'r - t ." - ' ~ ' To The Party Addressed: g- g gy *,b. [/' , ' E/ tI ix.\ s In the Matter Of: Advance Plans for Ccnstruction of Facilities as Filed with the Cc- dssion for Review and Approval Pursuant to Section 196.491, Wis. Stats. We enclose certified ccpy of Findings of Fact, Conclusion of Law and Order issued in the above-entitled natter. 7ery truly yours.

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YG Lewis T. Mittness Enecutive Secreta ~/

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Encl. . F I 7812130 087 -

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pjU"a') [ N C5as*MOS fes5M AND c2sffPffC SY !AC N PUBLIC SER't:CZ CCMMISSICN CF WISCCNSI2I fc 48 A,ULL tRUS, aNO Ct2EEC* Cch

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Advance Plans for Ccnstruction of Facilitiac ) as Filed with ce Ceauniseica for Review and Approval Pursuant to Section 196.491, Wis. Stats.

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J .4 . FINDINGS CF FACT, CCNC:CSICN OF LAW v m. -e / . /P/+~_ - - AND CRDER 2duc Sarv4e C.wnnsamen of winceni s This order is the first presulgated by this ==nuaiss.,;n pursuant to the Power Plant Si.isq I.aw, Chapter 63 Laws of 1975. I The law and the implementing regulations of the mnemi usion require each electric u ility to file with the ccammission an , Advance Plan which includes, among other -%4ags, the utility's forecast of energy and peak daeand requirements over the next 20 years, p'lans for the consertetica of preposed generating facilities ever the next 15 years, plans for the constructica of preposed transmissica f acilities over the next 10 years, and an analysis of alternatives to the propcsed generatica and trsasmission facilities. The law permi.s the filisg of joint plans hy two er more utilities. The electric utilities is Wiseensis for:ned two gr=ups for the submisaica of foist Advance Plass is 1976. Cne group, , k=cwn herois as the Wisconsis-Upper-Michigan System (*WCMS*) , iscludes the felicwing utilities servisg the easters two-thirds of Wisconsist Madison Gas and Electri= Cr=pany, Wiscensis Electric Pcwer C:spany, Wisc=nsis Pcwor asd *ight C mpany and Wiscensis Punlic Service Corpcratien. The other gr=up, designated for the purpeees of this proceeding as the Westers Wisc=nsis Ctill.ies ( **dWU* ) , isc1 wies: C=cperat.:ve Power Asscciatica (a M*-*esota eccperative) , ::airyland ?cwer C cperative, *ake Superier ::istrict. Pcwor C :spany, Northers States Pcwer <*7any (F4 - esota) , Ner-2ern Statas Pcwer (*-=r*mmy (Wiscensis) and Juver:.cr Watar, *igs: & Pcwer C mpesy.

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The Wisconsin Upper Michigan Systems (Wisconsin) (WCMS) group and the Western Wisconsin Utilities (WWU) group each submitted Les first advance plan under s. 196.491(2), Wis. Stats., in July of 1976. An environmental assessment of the pl.no was issued by the staff of the commaission in January 1977. Both plans were subsequently amended: WUMS submitted a revised plan (exnibit 121 in March 1977, and 'aWU submitted a revised I plan (exhibit 125) in recruart 1978. The WUMS plan was further t revised in oral testimony, and the staff evaluated the ravised a plans in testimony and awh N ts. > Public legislative hearings on the plans and assessment were held in March and April, 1977, in la Crosse, Eau Claire, i Hayward, Milwaukee, Cahkosh, Green Say, Wausau and Wisconsin Rapids. In all, 78 days of both legislative and indjudicatory heamings were held, and the record consists of more than 13,300 pages of transcript and 190 exhibits. Major issues which emerged-La the course of the proceeiing included the status of future nucicar generating capacitf in Wiscensin, the establishment of appropriata reserve levels for utility systems, and the rois of strategies other can capacity additions for meeting needs for power. , Apart from the two utility groups, which par icipated in all paases of .no preceeding, many members of the pualic appeared and ccamented. Active participants in the adjudicatory paase of the r. earings included Safe Haven, Northern Thundar, Wiscensin's Envircamental ::ecsde, citizens for a Setter Envir=nment, Friantis of the Earth and the Sierra Clun, representing various public interest points of view. A full list of appearances is attached t as Appendix A. i I i I 6 6 f I l l i

q' s 3 The coussission has wrestled at length with .his unwieldy , record and the briefs of the several parties and has carefully considered the policy issues involved. Is recognition char. this is the first plan, and that subsequent orders will be built > upon its foundation, the comunission has made the felicwing findings . of fact, conclusion.of law and order. 12$1ngs of Fact illE C::30tISSICM F3CS:

• I

1. The Western Wisconsin Utilities ('M 1 have proposed to construct one 1100-108 nuclear unit near Durand, Wisconsis,  ;

kscwn as the Tyrone mergy Park to be completed.in 1985. I

2. The Wisconsin-Cyper Michigan Syscam utilities (WCMS) proposed the followisq generating capacity additicus e

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Year of Construction Year of Start cesvolecion MW ?me General Locatica 1976 Unit i 1980 580 Coal-Steam Pleasant Prairie Power Plant in Kancsha County 1976 Unit 2 1981 $80 Coal-Steam Pleasant Prairie Plant 1978 1979 21J Comeustica Cer:nantewn Plant in Turbine Washington County 1974 1982 300 Coal-Steam Westen Unit 3 in Marathen County 1979 1983 400 Ccal-6 team Edgewater 5 in Sheboygan County 1980 unit 1 1984 400 Coal-Steam unsited at present Unit 2 *1945 400 Coal-Steam unsited at,present 1980 Unit 1 1987 900 Nuclear- Haven Nuclear Plant in Steam Sheboygan C=untf 50 Cembustion

                                                                ?artine           .

Unit 2 1989 900 Nuclear- Saven Nuclear Plant

                          .                                     Steam 1982                1986        330   Coal-Steam    unsited at present 1983                1984          50  C sbustica    undetarsised Turbine 1985                1986          50   combustien   undete - bed
                                                                 ?artine 1986                1290        300    Coal-Steam   Juneau-Adame C unty 1986 Unit i         1991        900    Nuclear-     undetermined Steam Unit 2         1994       300    Nuclear-      undetermined Steam 1987                 1991       600    Cnal-steam    Czaukee C untf l

1989 1993 300 Coal-steam undet= m L'ed This WUMS plan has been modified twice durtng sne proceeding, asct Ls likely to be fur.ter modified to ac=causedate enanging f=re-casts. For instance, it now seems precacle that no WCMS utilities  ; may dr:p. ene of ete 1384 cc 1995 coal plants which were criqinally preposed for the Kcankoncnq site and are presently uns1:sd. vnthat 12, sucaittad by WCMS in Mar:n 1977, gi res .nese pl. tnt.s as sitad at Kcank=ncag. l 4_ 1 l

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3. Any analysis of the appropriateness of a system generation expansion plan depends en reascnably accarate forecasting of the demand for power on the system. A total of 19 separate forecasts using diverse metacds has been sukuaitted to the c:mmissica in this pecceeding. There are at least two forecasts for each utility involved. Neither Wt:MS nor WWt3 submitted coincident !crocasts of damand on the planning group system, nor was any statewide coincident forecast developed. For future advance plans, tse ecssaissica .

wilj., require both coincident forecases for each planning group, and the group's planned response to demand grcwth which is either higher or icwer than forecasted. Rather than adopting any of the offered forecasts, the ecsuaisaicn has chosen to accept a reascnable range of projected q=owth in demand and to direct the utilities as to how to adjust their planned reserve :marvis if grcwth apprcaches one end of the range or the other. *his censideratica of pt.bable growth predictions in cenjunctica with system planning i eens ~ to the ccimaission a reasonable way of dealing wi.h the unavoidable uncer.ainties of leng-term forecasting, the uncertaintias of wnich were attested to hy sil. par.ies to addressed forecasting issues. Of the !crocasts provided, the most recent predicticas for WUMS, en an apprcximately coincident basis, ranged frem a icw cf 3.2% average annual grewth th=cugh 1388 to a hi;h of 3.39. The ==mmissien accepts this range as reascuable for planning pur;cses, and will permit .he WCMS utilities to pian en if4 of coincident <'amand as a reserve =argin 11 projected demand growth apprcxinates 3.2% and a 14% reserve margin if growta approxinates 3.31. Ois ;olicy corres r.ds to a range of :=tal installad 1988 generasang :apaci:f frem 3647 9t to 10,315 MW. - 5

l This range of capacity would require the authorization i and construction of between approximarely 1600 MW and 2300 MW of generating capacity not already ccustructed or authorized. , These amounca centraec with 3130 MW most recently preposed in the advance plan. A revised schedule for specific plant capacity additicas is not being specified herein. Increased censumption of electric energy, especially during summmer peak periods by residential, cosamercial and industrial customers, causes the projected need for these power plante even af ter reduc. ions it. projected peak d-ad= are included for the effects of load management, time of use rates, interruptible races, conservation, and efficiency improvements. The effect of these demand-reduc _ica measures was estimated to range f ca 920 Mw to 1023 MW. The power , plants required due to projected increased censumption of electrical energy during peak periods are a ma?ce centributer to, increases g electric races. Based on the informatica available at the present ti:me, the ecueission wculd not he perfer: sing its function to insure a reasonably adequate supply of electrie power if it did not allcw the utilities to plan en the basis of ee installation of this capacitf. At the same time the ecnemission will continue to monitor very closely the respcase of the pecple of Wisconsin to the rato structure reforms already implemented or bei=q devoleped, to the load sanagement pecqrama soon to be implemented, and to the energy situatica in general. he ecusaissica will 9 edify the utilities' cenetruc ica prog:sme if the puh11c's reduction in Icad is greater than expected. Any fur-her censtruction pecgram reductions wcul.1 te expected en slow the rate of facrease in future electric rates f:cm .he rata which would otherwise ccour. 4 I

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   .,    s Forecasts for **48U ranged from an annual average growth rate of 11 through 1988 to a rate of 4.71. The ccamission                   ,

does not find this range reasonable for planning purposes, but will allow the '.AfD to plan en an an=ual average grewth rate range for western Wisconsin between 3 and 44, and a 154 western Wisconsin coincident reserve margin. This rate was chossa because of peculiar circtusstances surrounding the WWU plan. The only capacity addition the WWU propose in this planning period is ?frone Energy Park Unit 1. The question of need for this plan will be throughly explored and determined in r the certification proceeding, docket no. CA-5447. Consequently, tse commaission will allow the WWU to assume a 3-44 growth rate i for planning purposes r this rate neither excludes nor compels the ?frene- project. The need for Tyrone will have to be demon-strated separataly, on its owir merits. The individual utility forecasts offered in this preceeding by the utilities, staff, and others varf as to methods and assumptions employed. All of them depend on assumpticas and judgments which sacerially affect the outcome, and most of these assumptiens and judgments are open to legitisato ques-J cn as to their appropriatenese and validity. A sununarf of the varicus forecasts fo11cws: Peak tesand 7erecasts for the Wiseensin Utilities (W) . I WCMS WWU-(Zxcluding SWI,a?) Uti11tv SPYRCA' Utility 3PERCA 1978 summer 6147 539 5575 5517 1975 wints: 5637 5426 5110 4997 1382 summer 7131 6630 70:5 6104 1952 winter 6634 5755 5138 5335 l 1985 sunner 3133 7465 3132 6650 1985 winter 7645 5397 7113 5750 1998 summer 3049 5389 3373 7 91 1388 winter 3753 7076 3081 5391

           ' Systems Planning, Invironmentsi Rev.ew a :* nsu=ar Analyns :tv_ sten =f 75CN.

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e s 0 Forecast methods subeitted in this proceeding cro principally simple trending, aox-Jenkins intervention analysis (a more sophisticated icind of time-trending) , eisd-use analysts, and econometric medeling. P.ach of those methods has its own strengths and weaknesses, and each is more likely to produce accurate forecasts under scae conditions than under others. Consequently, the commissica has determined that all are useful forecasting tools and may be used 1.s future advance plans. None of them, nowever, is so distinctly superior tO the others sa to warnat requiring any utility to use it. A description of the salient features of each* cf these l methods fallowa: i Trend fitting models and univariate Sox-Jenkins models are models which use caly past data and/or time as isput 4 variaolee. The application of these models to forecast future levels of energy demand and peak icad is based on the fundamental assumptica that the future will be an extension of ene past, and that there will be no significant st_~.ctural changes in ene systear being ferocast. It is necessary, therefore, to modify the forecame to reflect expected chaages is, for example, fuel ave 11 ability and price level because thesa facters : sight affect the future differently than they affected the historical pericd medeled. Rapid and significant changee in ene naticnal and Wisconsin energy system which occurred folicwisg the oil embargo clearly indi:ste . hat the fundamental assumpetens undorlyisq =as formula:1cn of trend-fi'tting scdels are questionaale. Box-Jenxins interventica analysis is a scpnis.1:sted mathematical technique for incorporating significant enanges is the histort:21 period and predicting their effect en future

            .rsada. The method dcas not, hcwever, assign a cause to   :.*.e enanges, and ccrrelaticas between snarp c anges is tne .randed fats and social er ecencaic events is .ae tsal wer1d =ust be
                                             .q

 . . 3 drawn with great care, and with reference to data cutside the model, such as various indices of industrial activity.

O i It is also necessary to adjust the forecast for expected changes that have no historical counterpart. For instance, the ef fect of the expectsd tacroduction of significant  ; amounts of load management on a system which had not had any load management prior to the time of the forecast would have to be predicted by an adjus= ment cutside the sachematical model. mis is tree for any of the methods used is tais proceeding. F.nd-use, or component, or system analysis models belcng to the class of capital or appliance stock models. Is this formulation electricity d== mad is derived first through the estimation of the existi=q stock'of, elect-icity censuming appliances 'and seccad. thrcugh .he prediction of ce future growth in the level of appliance saturation. In order to estimate fut==a levels of electricity-censuming capital stock, cne needs data en the past and current sice of appliance stock and its vintage.. Is addition  ; l to adjustisq co elec.=1 city-censumisq stock, households and i businesses, is the show ran can adjust ce u** 'i catica rate of the existing secek withcut alterisq its sica. K=cwledge of ce past changes is the appliance st=ck sico, as well as r past changes is the level of stock utilicatien, is necessarf to derive the forecast of future energy demand based en .he end-use formulatten. O.e ccupilatica of .ae requisite amount of data cf censistant reliability is a centinuisg and sajc p;calem wi.h end-use models. Cn the other hand, end-use medelisq is the only forecastisq mothed used is this prcceeding which is based en disaggregate cus cme tenavicr is .he aifacted serrice tar:1 crf. It also utilices sonst ivity analysis, is vnica tre forecasts: cas change his/her sub ective view of _he futursr wien cearparative ease.

                                                    .g.                          .

Econcastric models are based en multivariate regression analysis. Causal relationships are hypothesi:ed between energy demand and those socio-economic and demographic factors which are responsible for energy use, nose are then tested statistically and various parameters are estimated. In an econometric model, demand for energy is assumed to depend on the overall level of economic activity and demogrcphic factors. The arviel must be modified to incorporate policy decisions which are not incorporated in past data, suca as rate reform, or it can isclude different scenarios for ut111:stion of new energy forms or load management, if tasse variables can be incorporated into the variables which  ! tne model uses. Econometric forecasts directly address the fact eat demand for electricity is derived demand which depends, - among otaer factors, on price of electricity, price of subetitutes, and income. ney do this by incorporating predicticas of such factors as population and econcaic growen, saturation of appliances and price elasticitf of electric d==and. nose forecasts depend on the accuracf of j the predictions of the indicators they incorporate, and also on their appropriateness for he sorrice territorf in questien. St.acistical models based upon trend analysis assume that the future will be like the past. Se 3cx-Jenkins mathed used t in this Advance Plan increases the statistical importance of the most recent past in these ferocasts. Trend medels-dc not specify a structural (causal) relationship between explanat=rf variaales and dependent variables. Ecenemetric models for: sally specify suca structural relatien-  ; snips. Sese models can to simultanecusly estimated. Forecasts t assume enas ene structural medal vill remain unchanged, but variaticas in the lavels of the explanaterf rartables can be , c l I s e

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considered is a simultaneous manner. n is means that ce future is assumed to be less dependent en the past than the statistical trend models. F. d-use models are even less dependent en the past, since under these models the entire structural relationship can be varied, along with variations in the projected levels of the explanatorf variables. The reasonableness of alternative forecasting methods i aust be judged en the basis of each one's ability to produce accurate forecasts. Dere are advantape fs havi=g several forecasts for one utility using different methods. Data limitaticas and other constraints affect the feasibility of imp 1 ==ating scoe methods.for some utilities, ne price and availability of electricity, as well as other esorgy, have been relatively stable until recently. Past usage therefore may not serve as a basis for estimatisg future usage without some consideration of changing price level, tariff st::cture, and availability of fuels. in this advance plan, the ccessissica dizac.sd the utilities to consider several prespective changes. Specifically, the c=mmissica di ected quantification of .no effects en futura load gr:wth of (1) censervaticn, (2) conversien f =m natural gas, (3) Icad management, (4) rate st=ucture ref=rm, and (5) 1:nprovements in end-use officiency. In this pr=ceedisg, conservation has been defined f : forecasting pu peses as the reductica cf Icad by volunts:7 . metacds, various past respcaser to .se =11 encarge, the ensuing censer-rs ima movements, and, is general, all al-- sci

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effcz s at censervatica are iscluded is this definiti:n. ne nest *1kely

                                . f rms of lead =anagement in the :aa: tars         ,

i are residential water heater centrol sad ists t ptable tartifs  !

                 !=r large users. nose s.:stagies apesar to be :=st-:cstified           I at tais .tse, and shculd be ace =untad f=r is f rseasts. Other I

i 11

s applications-for example, control of residential and c-===mecial air conditioning--may prove feasible and are being tested. If gas and oil shortfalls are expected, an estimate must be sede of the impact of those shortfalls on electricity demand. Forecasts of gas availability have changed dramatically during these proceedings. WEPCD and NSP have recently reduced demand forecasts due in part to the projected increase in the availability of natural gas. S e potential impact of changing gas and oil availability en electricirf d= mand

           - suggests close, ongoing sezutiny of this facter.

Rato atructure ref arm includes the impact cf time-of-use pricing, interrJptible and other load-management t.ariff forze. Because there is little historf en which to build elasticirt estimates for these rate forms, estimates of impact are generally judginental until actual data fres current experiments and 1:splementatica become available. End-use efficiency improvement estimates gaantify improve-eents in energy utilization, cuilding ecdes, appliance performance scanaards and conservation policies. Pending legislatica at both the stats and federsi levels will affect estimates of impacts for tais categerf.

4. nors has been in this reccrd a large amtt.nt of decata en the acss recenable netnod of ptanning system re se rves. Se utility witnesses have recencended using a sispie numerical reserve sargin. n e commissien's System Planning staf f has strengly recensmanded the use of preaabilistic naasures  ;

1 I of system reliabilitf. Fer the purpose of ut.ncricing capacity additiens for tais first advance plan, and recognizing tse forecast ascer ainties which underlie the wacle planning prccess as this time, tre cennission has decided to utill:e nunarical reserve sargins fcr datarsining apprcpriate capacitf additicas. O

However, the commission recognizes that it . s charged with I insuring reliable elect-1c service, and that the degree of reliability of service is measured by the probability of baisq able to meet or not meet demands for service. Thus reliability of service is 1sberently a questica of pr:bability and pecbabilistic methcds are necessary for measuring reliability. [ i j The underlyisq po'. icy involved is that as relative gr=wth i rates -increase and as 'the associated increased plant construction f cause's faster rate increases it is is the censumer's interest t to accept a slightly less r:11able system, rather than Lacreased costs. The cesarission is not convisced of the apprcpriateness of the high reserve margias recommended by .td-Ameriza Interpool Network (MAIN) and Mid-Centinent Area Reliability Coordisation Agreement (MARCA) which, as voluntary reliability associations of ceilities, have no direct responsibility to the Wisconsis consumer Therefore, the u.111 ties will be I directed to provide the coussission wi.h cost-benefit analyses  ! t of different reserve levels is the next advance plan. l 3ecause the ?fr=ne applicatica will prehably be prccessed i i before review of the next advance plan has been completed, I the WWU are directed herois to suhait a sisilar analysis is the ?frene proceeding. If the WCMS and WNU is western Wiscensis project future  ! demand g::wes :stes tcward the icw end of .te rasgn fcusd i reascuable ahove, they may plan en the basis of a reserve sargis of 15% cf coiscident haand. Faster estas of gr=wth will be planned for on the tasis of a smaller reserre sarges , as directed herois.

5. An issue was raised is _his p=cceedisq rega.4.isy

                -as desarssility of usisq small : cal-fired generating usats (300-400 MW) scher than usits larger than 400 MW.      *te ssallar units tend to be more reliamia, but also are scre costly per =1:

of capacity. As equally reliable systas can be caisesised w:.t: a s11;ncly Icwor :sser re level if smaller :=its ars 2_111:ad, i i l i

due to their smaller sian and iscreased re114.bility. Ce ' degree of remarve reduction sado possible by the use of small l l generatisq units depends en the size mix of the existing system, f the size of the system involved and the amount of addi ional generating capacit/ added is small-size units. l The potential advantage of icwor resern levels and the advantage of scre readily masching generation additicas to load growth patterns and local generation requirements must be balanced against the disadvantages of higher costs per unit of l capacity, and of a requirement for the isstallatica of scre generatisq units. De coautissica found neither the arguments , , +# I ' for the ex=1usive use of large units nor ce arguments for the

• exclusive use of small units to be compel 11sg en this roccrd. ,

a n o issue of the preferable unit size will be considered is 1 isdividual certificate cases and is future advance plans. t

6. WCMS and WWU each presented a plan which included additienal nucisar generating capacity. ::starvenors and utilities presented markedly different isformation concersisy the additica of fur.her nuclear capacity vt a respect to cost,

                                 ~

eafaey, healta ef f ects, decessaisaicning ecses, possible future unavailability of fuel, and the lacx of available s:crage asd permanent disposal for nuclear wastes. cs the basis of this reccrd, the ccmmissica declises to make a findisq as to the safety I or healts effec.s of nuclear generation. Dese satters vill be censidered is .se upccmisq ?frene asd Haven applicatic=s. Se record made is J.is decket :sgardisq saf ety er health effects i of nuclear generation shall be isecrperstad into those p=cceedings. i ne examiser, the staff and the parties shall be direc ed to i sake overy effort act to duplica.e vast was isecrporated frca 1 tais decxes, and .c prepose and censider caly si,nificast new isfersatien er significastly changed carmtances, i i l l i

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t .. , [ P Se commission determined that nuclear generation > f is likely to be more costly enan coal (in terms of total fixed, *uel and operating costs) when ecasidering present uncertainties in fuel, decommissioning, and waste disposal costs.  ; i j S e commission's finding that coal-fired generation is i likely to be more damaging to the envizcament than nuclear I l generation did not weigh heavily enough to change the commission's } resolution of the

• coal vs. nuclear
• issue.  !

ne questior.s of safe and. available storage for nuclear wastes, methods and cost of decommissioning and availability . and cost of nuclear fuel in the long term are matters of signi- , I ficant. concern. n ose uncertainties are serious enough to  ! laed this commission to suspend the p1maning or application l i

             !cr new nuclear capacity other' than Tyrone I and Haven I. mese                   !

r two plants are already into the certification process, and  ; will be considered individually, each on its own merits in its.cwn docket. l A discussion of the various aspects of the *ccal vs. nuclear" r i controversy as it daveloped on t21s record follows. nere is a wide range of views in this record concerning the { 5 relative economics of nuclear and coal-fired generatica. nose f r views range from nuclear power's being much less ecstly than  ; i coal to coal's being such less costly than nuclear, and include r i

               ,he view that it is impossible to tell. Se WU found nuclear                     ,

pr to be always less costly 7han coal. ne WCMS utilities  ! i and taoir consul. ants found nucisar generation '. ass ecstly under r car.ain assumptions and coal generation less c=stly under other assumptions. De commissica staff found nuclear generatica less costly under certain assumpticas and c=al generatien less costly under etter assumpticus. Intervenors and their eensultants  ;

                .usifor: sly found ccal generation to te less ==stly . man nuclear.            l f

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The commission fi.nds on tais record that coal-fired generation is likely to be less costly than nucicar generatica, when considering the existing uncer.ainties as discussed herein regarding fuel supply, waste dispcsal, and decouraissioning costs. A susumary of the various coal vs. nuclear cost comparisons is attached as Appendix 3 to this order. From this record, there is no envi crunentally benign way to generata bulk elec--icity. While effects f:ca low level radiatica and ther:nal degradation of water attendant on nuclear generation concern this commission, the commissica considers that the air pollution, solid waste, and water quality probless caused by coal-fired generatica are a core-serious threat to a quality envirorunent. Adverse health effects and biological damage say occur at levels of pollutsats which are belcw existing standards. The nuclear fuel issue of supply / demand imbalances is , influenced by federal policies , which af f ect mining, =4 g, on=1chment, reprocessiaq, the breeder, federal uranium requirements (m 1*tary). gr=wth is generating capacity, environmental constraints, and the availability of dcmesti=

                                                               ~

and foreign uranima. Cncertaisties exist is each f acter; however, the record clearly indicates . hat the not effect could tend er inc sase the price of nuclear fuel.

                   *he reliability of domestic uranium :ssource estimates is questicnable.  *he relianilitf of these escisates decreases wits inc sasing forward ccata and with scre speculative esecurce categories the mest reliable. catsgery (313 forward cost preven :sseries) is estimated to an accuracf of     204.

h.e record indicates that .se isersmental lifetime uranit.n requi ement for the Carter Administratien's goal of 280,000 .9f of nuclear pcwor by 2000 wculd squire p cduci=q l l l - l l l i

1 , I l

 .                                                                                          i 1

all domestic

• proven reserves," *pechable resources," and one half of the 'possible resources" available at less than $30 per I i

pound U 3 0s forward cost as currently esti:nated by the Oopart:nent of Energy. It is imprudent to expect that large quantities of low- i cost domestic uraniunt will conti=ue to be discovered and developed. Shortfalls is the availability of domestic uranium for any reason I would be expected to cause increased relianct- on foreign uranium. Significant shifts to iscreased use of forsigt supplies could also result in artificially high uranium prices or productica i limits set by actions of producing countries. Uranium productica (mising and =4??i"g) capability can also be limiting, at least in the short-ters, because it is determined by the availabil1=y of manpower and equipment, l environmental constraints, construction lead ises, ecccomic conditions, and total resour=a base. . Some utilities with nuclear plants built or plan =ed are wiring efferts to resolve scme of these fuel supply u=cer.aisties. by acquiring or attempting to acquire uranium reserres or rights l to reserves to directly satisfy all er part of their icng-range needs. The success of these eff=rts, hcwever, is also uscar-mi, , and, to the extant buyers are competing for a fixed supply, could also tand to increase prices. Although the snary iscrease is uranium prices is recent I years signe effer an ecencaic iscontive for increased shcrt-term  ! pr:ducti:n, tas uncar.21stias of a practical icng-range -

                                                                          -A t=ent         ;
          .o increased nuclear generact. n is this c=untry nigst discoursge                J investments is ursnium exploration, due to .he fisascial risks to the uranium producer durisq the icnv lead time required to                  ,
                                                                                           ,i bring a new sine frem p' am' q to actual productics. ::ue := this
            .1=a 145, it is ct car.ais wasther a fytamic balases will be at.aised between sarkat pricas and supply.                                       l l

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l i The comunission concludes that the uncertainties at this time as to supply of nuclear fuel at a reasonable cost, together with other uncertainties named herein, are serious enougn to militate against ecusaitting this state during this period of uncertainty to amounts of new nuclear capacity beyond that approved herein for planning purycses.  ; Facilities for disposal of radioactive spent nuclear fuel en permanent basis are not available at this time.

 -               There is no reprocessing facilitf presently operating in this cou-try, and the federal government, concerned abcut proliferation of nuclear weapons, has announced a policy of indefinitely deferring reprocessing until and unless the proliferation issue is resolved. Spent fuel from existing plants La presently kept in temport - serrage pools, :mostly on tse site of the reac.or which produced it.

Wisconsin utilities which operate nuclear plants have applied ter permission to expand their on-site pools, but - this is s temporary measure, not a solution to the permanent dispcsa; problem. While the federal government is comunisted to and has embarked on a program for developing storage and permanene, disposal facilities for nuclear wastes, .here is no federal quarantee . hat permanent disposal for spent fuel will be available at any eiven future date, or that when it is made available, its cost will be reasonable. Theprobless'assectatedwithpermanentdisposalofshnt nuclear fuel are both technical and social. There is public and political opposition to nuclear waste disposal sites, and a lack of existing laws and regulations gover=ing storage and disposal. Although federal government and other tactnical reports indicae- that the tocancicqy for per==nt dispcsal is == can be l l I

developed, interrenors point to a lacz of demenstrated waste , disposal technology. Virtually all testimony concurred . hat federal policy regarding nuclear waste management has been indecisive, tardy, not responsive to the industry, and lacking is executien. When existing plants were const.ucted, it was planned and predicted dat spent nuclear fusi would be repr: cessed, P with resultisq monetary value, for future use is the nucisar industry. As it became obvious is the mid 1970's that spent nuclear fuel would require storage for indefinite periods at significant ecsts, and would not be reprecessed to yield monetary salvage value the commai-ssica provided for inclusien of estimated future costs in the recorded c=sts of nuclear hel during the burs-up pericd i.a the reactor. Accordingly, the amount included is operatisq expense for nuclear fuel during ce period that such fuel is is the reactor generatisq energy incicdes the expanded c=sts !=r uranium, fabricatien, processing and stcraga up to the time of placement is the o reactor, and the potential c=st f=r indefisite storage after the spent fuel is .w.d from the reactsr. Thus, in operatics of .he Point 3each plant fuel st= rage  ; l

             = cats new include approximately 7.4d ;er sillien 3TU !==

future esti. sated st= rage costs. Approximately $29,300,000 has tren provided up to his point is time f:: secrage of expended fuel. hs pr=visica to dato appears reasonable wnen ccaparsd with ::epar sent =f Energy indications as to potential c arges f=r persanent storage of suca hel. Until the time that suca huds for storage generated in rates f:r elec ric ser rica are expended, .he accust hancf is utill:ed as a reduc 1:n =f net isves ant rate base. As a . I i l

                                              -L3-1 1

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result, the consumer is receiving a reduction is revenue I requirement equal to the current econcaic c=st of such capital, which is in the range of 15-17%. Another uncertainty which cautions agaisse further i ecsunitment to nuclear capacity is that relating .o the mothed and cost of decessaissioning plants at the ends of their eseful lives. Federal policy as to this aspect of nuclear planning has been indecisive and isadequate. Se technology for several sechods of decessaissioning exists and has been utilized for several smallar nuclear facilities. The projected coats for the different methods of decem-sissioning vary considerably. In addition, potential problems , of scals associated with -la most comprehensive method of i r decesumissionisq (ccaplete dismantlement, removal, and burial of all potentially radicactive plant compenents) adds additional  ! uncertaisty to the projected cost of decenmaissionisq id that sethod shculd be squired by future federal policy. This commission, under statutory previsicas, prescribes annual depreciation ratse for various classes of pub 11= utility plant used by Wisecasis electric utili.ies is providing service. Annual depreciatica ratas are determined en the basis of estimated serrice lives, plus rec =gnition !=r salvage value upcn retirement of facill iss and estesated cost of :smoval to be iscurred upcn retirement. Accer:11:q17, it is necessary and prsper that the ==mmissics, is prescribisg I annual depreciatien rates f=r generating plants, inc1:.:disq nuclear, give censiderstica to .he ecst of :secving such f acilicias and posantial salvage values when plants are ac icager available f:r pr ducisq anergy. Cec =nunissionisq ccats for nucisar plants thus are rec qnized is he prescriptien of annual depesciatien : stas f=r he two nucisar facili.ias under ' l

jurisdictica of this ecsuaission. Although sorrice lives, salvage, and cost of removal l are based on informed judgment for practically all classes of depreciable property, the problem of estimated salvage and cost of removal for nuclear f acili.ies is made scre - difficult by the lacx of national policy as to an acceptabla deccanaissioning method. At the present time prescribed  ! i depreciation rates, to be reexamined is the near future, for  ; Kewaunee Plant include a cost of removal or daccouaissioning [ provision equal to approximately $37 per kst of capacity. Currently, the ccanaission is giving consideratica to a racertification of annual depreciation rates for the Poist Beach Plant wtLich would include a provisica for dec=nunissioning costs within a range of $45 to 361 per kW of capacity. , Crt the basis of analysis, it appears that this cessLission  ! is further advanced than any other State er Federal requiatory conseissics in the recognitica of potential nuclear plass . decenmaissioning costs for financial, accoun.ing and rate-eakisg purposes. The regulatory aspects of cese of removal rec =gnitica for all classes of depreciable property are further ecmplicated by the fact that both Federal and State inccme tax sentutes presently i provide that removal c=sts of depreciable plant are deduc.ible for inccme tax purposes when actually expended rat.:ar t.tas as previsica is annual depreciatien rates during the useful life  ; cf the prcperty. i In recent :acnths, a Wisconsin legislative :=u=cil c=:mmittee has cenaidered .he ace =usting and finateial pr class acacciated wi h decessaissicaisq cf nuclear pcwor plasts in Wiscer. sis. The l 1 I I I

cosmission has furnished comprehensive = data to support suca , legislative analysis and on various os:casions has appeared I before members of the group. Proposed legislative actica may result frca this cessaittee. In the f ace of these uncertainties, the connaissica finds that a cosmit: ment to new nuclear capacity beycnd Haven I and ?frone I would be imprudent. Haven and ?frone j have been in planning for some years, and Wisconsin utilities have made significant predecisional ecaunit: nones to these I projects. Because of the environmental advantages of nuclear power and the existing ccsunitments, the cessaission will caly consider Raven I and ?frane- I, each on its own merits in the certification proceedings. [ Nowever, en this recced, it becomes apparent that

                  ?frone I will require a substantial showing of need to be              .

found necessary and ccavenient to the Wisconsin public. S.e questica cf the local need for the proposed ?frene plast in western Wiscensis depends en the growth rate of demand for electricity in that area. O.e ecsuaissica believes that a reliable demand forecast for that area which projects a grew-d 9 rate of more than 44 per year would tend to demonst= ate sufficient need fer *.his new capacity. A reliable ferocast shewing a grewth l l rate of less than 35 per year would require a descastratica of substantial direct econcaic cr environmental benefit to the Wisconsin censu:cer. A grewth rate between 3 and 44 per year would require the demonstratica of sumstantial direct econcmic or environmental beneft to the Wiscensin .cas - r frem participating in a system which is sacwn to benefit frca the project. I f

   .a. .

7. Co-generation has potential for increasing the officiency of energy use in Wisconsin. The industrial co-genera-tion of cicctric encray appears to provide :nore potential for improving energy ef ficiency than utility co-generatica of steam.

Process stoam appears to be econoveical if sold on an interrup-dble basis. Economic usage of utility co-generatica seem to depend on the simultaneous availability of a high 1 cad f acter plant and a nearby high load factor, high volume user of Icw-temperature energy. The utilization of waste heat is another premising option.

8. Ioad management, whether it be of the time-of-use peicing variety or the regulating end-use variety, can serve as an alternative to capacity additions. It also may be used to conserve scarce fuels such as oil and gas, either by deferring otectrical onergy use from peak periods to off-peak periods or by directly substituting off-peak. electricity for oil and gas in othorvise non-electrical uses. The commission is .cannitted to the implementation of load management. It is prtteeding on i

this basis in other dockets, and has, therefore, rec ted peak  ; domand estimates in this prcceeding.

9. The development of alternative sour:cs of energy has pocontial for improving the Wisconsis energy situatien. There is a wide range of views in this record concerning the econcaics of alternative sources of energy. ticwever, given :ne lack of ceal, oil, gas, or uradum in Wisconsin, it is important to censinue to investigate other energy sources. Wiscensin does have sun, wind, municipal refuse, wcod, and other bio-mass matorial. Use of taase and other alternative saure-1 f==

energy produe:1on, at both the utility and individual level, mas a potential !=r helping to stabilize energy costs and reduce envircnmental degradaticn. It is appr:priata f r Wisconsin utilities to beceme more involved in the explcrata:n and utili-

stien of these alternative energy sour:ss. l l \

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10. *he programe offered in these advance plans to dis- '

courage inef ficient and excessive use of electricity are Limited in scope and direction. Ecwever, the connaissica takes note of some of the programs that are actually being pursued at this time. *he cometissica is vigorously pursuing 1 cad management and time-of-use pricing. It will be analysing the effects and implications of various types of institutional adver-tising in race cases. It is also c=nduc ing a proceeding, 05-EI-1, which will analyze the effect of building codes, extension rules and other conservation measures en electric usage.

11. i'he research programs of fered in these advance plans are limited in secpe and direction. A major research effort of most of the utilities is thel contributions to the Clinch River 3reeder Reactor project. Given the reduced c=sunitment to nuclear energy in this order, and the likely abandonment of the project, it is imprudent fer Wisconsin utilities to nake further contributicas to it. The esamissica and utilities are at this time pursuing research pr grsas, in additien to those offered in these plans, which are nore apprepriate. *t is apparent that, since future Wisconsin electric generatica will rely principally on coal, resear:n efferts saculd be made t= ward burning ecal in an envi:=nsentally ac=eptahle manner.

Progrsras famigned to explore utilizatica of alter.ative energy ! sources and fuels, utilisatica cf waste pr: ducts and waste heat, 1 ! and methods of controlling 1 cad a:e also appr=priate and saculd be pursued. *he c=nuaissica recenumends that funds planned to be used on breeder research be diverted to these and sinilar ends. l

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12. The **UMS transmission plan has been designed to support a generating system which includes generating plants at Lake Koshkonong. The present generating system plan does not include a plant at Lake Koshkonong. The transmission plan is also based on forecasts which have since been revised  ;

downward. These developments will be addressed in the applicable certification proceedings and future advance plans. ,

13. Durisq the course of this proceeding it became apparent that some of the alternative generating and transmission plans preposed by the utill:1es were not actually feasible because of scheduling constraiats. The requisite site analysis could not be done in .ime to put the prcposed plant on line, or the appropriate licenses could not be obtained for t=ansmission lines. The cesunission is verf concerned that this situatica should not recur is future plans and will direct the utilities to ensure that all alternative plans offered are equally feasible at the ti:ne of decision on the plans. .

                                                                                +   !

14. The foregoisq Fisdings of Fact say appear to emphasize (and so it is intended) effor s to sinimize unnecessarf future load growth and thus reduce the amcunt of  ;

generatisq plant and transmissica line construction necessary. , The resulting benefits is tarms of reduced envirensental impac. and 1:wer rates (than otherwise) frca such a course are rather obvious. Se ccamL:ssica also rema',e sasdful of i.s responsibill:7 under .he statutss of assurisy . hat all Wisconsis customers (residential, farm, c=cenercial and industrial) are provided adequate and reliable serrtce for heir present and pro *ected needs. "he advance plans as  ; appr=ved herais are censistent with .he furnisnisq cf reascna=la and adequate serstes to the public. l { l l

U1:Lsate Pindingn of Fact THE CCMMIf,3 ION PIND3:

1. That the evidition of cupac Lty to result in a total syntes size rianging recs 9,647 MW to 10,316 MW Dy 1988 is reason-aale for the WMS system. This range of capacity was deterstined by adding to the 1988 esage of WUMS susuner peak demand forecasts found reasonucle (and listed on page 5) a 15: reserve level for the lower forecasted deraand, and a 14% reserve level for the t.igher forecasted demand.

2. That no forecast offered fne the VmU in this proceeding has been shown to be reasonably determinative for planning purposes, sut that since only one plant is planned for the planning period by thta group, the showing of need for the Tyrone plant say be litigated in the certification proceeding, docket no. CA-5447, under the genersi guidelines deceribed in ;arsgespn 2 of this o rde r. The ccanission finds a total system growth este of netwen 3 and 41 to be useful for planning ;urposes on the WWU system, while recogni=ing :nat indtvidual sumatation growth estes as required for tesnsmission planning say well be above or oelow this esnge This range neither precludes nor sandates the Tyrone project.

3 That no forecasting oathod summitted to One ccmmission tn thta pesceedtng is overwhelmingly superior to any oth3r. O.e cemamission made use of diverse tethods in dertving a foracast for WMS, and enerecy modified the proposed plan. 4 S.ac a reserve oarsin of 15% of coinciden: 'aUMS group d emand is reasonacle for planning purposes if the demand growth rste projected approxt; nates 3 2% per year, and a 141 reserve

nargin is esamonante tf the growth este approxima:es 3 9% per year.

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5 That the present uncertainties in the nuclear fuel cycle regarding waste storage and disposal, uraniura availability, reprocessing, and decommissioning costs make it centrary to the pualic interest for Wisconsin utill:1es to commit themselves .at this tune to a large program of future nuclear expansion. No new applications for nuclear generating plants, other than Tyrone I and Haven I, will De accepted untti such uncertainties are resolved to the satisfaction of the commission.

6. That the progress offered in these advance plans to discourage inefficient and excessive use of electricity are not adequate, and ,further, do not reflect the actual prcgrams being pursued by the utilities and the ccamission in other proceedings.

7 That the research progrsas offered in these advance plans are not adequate, and further, do not reflect the actual pregesas being pursued by the utilities and the ceranission in other proceedings. Specifically, it is not in the public interest , for Wisconsin utilities to make further contributions to the Clinch River Breeder Reactor project in view of its likely abancorunent and in view of the commissicn's findings on continued planning for nuclear generstion, suces.

3. That alternative sources of energy are potentially valuante nno that it is in the public interes t for the utilities to beccme more involved in the development and implementation of such source s.  ;

9. That this record is inadequate to determine .hether planning for future planning periods should te done on a cordinated i basis between the WUMS and VWU groups. .

10. That a range of ;cliution control techniques for f assil-fired genersting facilities should be considered in any preposal to construct such facilities, including best availacle centrol teennology.

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l tl. That enn wuMS tesnamission plan will nave to be revised due to the ::hange in une att,* fo t> the previously-I proposed toantonong coal plant, and also due te forecast reductions since the plan was sunmitted. L2. That meaningful selection of site alternatives in these plans has not been possible due to licensing and con-struction tise constraints, and that this constriction of the commisalon's options is inappropriate and must be avoided in the future. 13 That tne plans as herein modified provide for a reasonaaly adequate supply of electric energy to meet the needs of the public during the planning period.

14. That a reasonable effort has been made *o coordinate the advance plans with plans and polieles of other agencies.

15. That ene WUM3 transmission plan is reasonaale, with the exception of time changes in the tracamission plan associated with forecast reductioras since une submission of the original advance plan, and with the exception of changes associated with the relocation of the formerly proposed Koshkonong coal plant.

16. That the Wu transmission plan is reasonacle, w1:h the modification that the transmission al:arna:ive discussed in staff :estimony shall te included as an alternative to ce furthur Investigated Ln the appropetate certif t: ace proceedings.

17 . That :Me WUM3 generstion expansien plan (exhibi: 12), as modiftel to exclude nuclear capacity other nan Maven 1 and to redes Lgnato the previously proposed Kcanxcnong coal plant ts unstted at present, and subject Oc the acdifications in paragesons 1 and 4 aoove, is in the ;uali: interest considering engineering. economic, health, safety, relittility, effi:iency and environmental fac:ces %.ad alterna:1ve set cds ;

• zeners:isn or scurces of supoly. .

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18. That this record is not adequate to determine whether the WhU pian is or is not Ln the public taceres: considering engineering, economic, heal:n, safety, reliability, efficiency ,

and environmental factors and alternative methods of generation or sources of supply. Conclusion of Law THE CCMMIS3ICN CCNCLUEES: i That it has jurisdt: ion pursuant to s. 196.491, Wis. Stats., and Chapter 68, Laws of 1975, to issue the following order; and that the following order :should issue. Order THE CCMMISSICN THERE?CRE CRCERS:

1. The WOMS utill:1es may continue to plan on adding generating units in such a way as to provide between 9,647 MW and 10,316 MW of capacity in 1988. Ic planning for this range of capact:7 addi: ions, the WUM3 utilities are to plan on a recorve margin equal to 15% of coincident demand for the planning group if :ne $rowth rate of demand projected approaimates 3.2% per year, ara a las margin if the growth este approximates 195 per year. The utill:ies art, within this expansion range, directed to plan so as to maximi:e reliability and minimize cost.

2. The WU art directed Oc bring in a showing in the Tyrone certifica:icn case, docket no. CA-5347, of either:

( 1) rtllasle acinciden: demand projections wnien predict a growen race in escoes of 31 per year L3 western Wiscons'n; or ( 2-) reliante coincident demand forecasts for western Wiscensin whicn predice s grew:h rate of lees than 31 ;er year and also a convincing demonstestion of direct substancial econcais or envirenzen al  ! 1 l f

nenet*1c to tne Wisconsin conoumer fetwo continued participation in the projnce; or (1) a enLiante showing of a cotneident demand growth rate Ln western Wisconsin tetween 3 and 45 per , year and of sunstantial direct economic or environmental direct benufte to the WLaconsin consumer from participating in a system wnich La shown to benefit from the project. Without at least one of these three showings, tne Tyrune application will be dented. 3 All utilities filing advance plans for the next planning perLod shall include a cost-benefit analysis for a range of systes reliability Levels. All utilities filing plans for the next planntng period shall also include an analysis of the projected effect year by year of their proposed and alternative generstion. plana on aversg:r prices per kWh thenughout the planning period. 4 The WWU shall present support (including a cost-benefit analys ts) for their proposed reserve level or reliability level in ene Tyrone proc edLng. The analysis shall include:

a. Consideration of the acility of seasonal power exchanges between winter and summer-peaking utilt:ies.

B. Justif tcation for a 15% noncetneidertt reserve  : 3arsin (unich roughly equates to approximately a 20% reserve margin above 1985 colacident system demands) as proposed when WUMS and MAIN have Saintained adequate relianill:y using approxima:ely a 15: reserve margin aDovo coincident demands.

c. A quantification of any increase in oil consump-

lon untch may be caused by a reduction in reserve policy :s approximately 155 4 ove coincidsnt V4 demands.

I

5. No nuclear generation sna11 ee planned or applied for e1Ln the exception ut Haven Unit I and Tyrone Uni: I until- l reasonacle progresa-satisfactory to the cerusission-has been made in resolving waste disposal., fuel supply, and deccanission-ing tasues. Any utility which desires in the future to incorporate in its advance plan nuclear plants beyond the :mo sentioned acove shall submit to the commission a pect:1on documenting those changes from the present attuation which demonstrace such

  .         progress    Af ter appropriate investigation, the ceramission will rulo on the petition based on its view of the then-current situs =

tion.

6. All utilities shall proceed w1:h the implementation of feasible loso-eanagement strategies as soon as possible.

7. All uttitties shall promote the utill:ation of alternative sources of ener5y by the consumer by proposing este structures in future este cases and other appropriate reeans. The utilities shall investigate and adopt reasonacle alternative generstion strategies.

3. No 'disconsin utill:7 shall provide research funds to the Clinch River Breeder Reactor project. Funds proposed in :ne 1975 plans :o be so alloca:ed snall se reapplied :o research on coal-fired generstion by environmentally acceptacle means,. such as, but not limited to, fluidi:ed bed combustion, techniques for cleaning coal before :crocustion, and utili:ation o f scruccer wt. stas. No fur.ds fot- the Clinch River 3reeder Reactor project snail be included as a recoveracle 1:em in future ts:e cases.

I 9. In proposals for the consLeuction of fossil plants, gli untitties anall provide a cost analysis of technology required to meet applicanle pollution control standards, a cost analysis of technolcgy required to arrive at control of pollution equivalent to the state of the art, and a cost snalysis of an option netween these extremes which the utility judges to 50 most cost-Justified. The acove informa-tion unall be provided regarding air pollutants, waste disposal, notse entssions and waste-water treatment facilities.

10. All utilittes shall file tn their next advance plan an analysis of the costs and benefits of coordinated ,

planning for future generstion additions between WUM3 and W'/U. - Tht's analysts shall include the costs and cenefits assuming , no adntcional transmission ti.is, and also the cost and benefits assusing the transmission system is reinforced as necessary to maximize planned esserve sharing capactlity in the future.

11. Each planning group enich offers a ecmbined plan in future planning proceedings shall develop a coLacident forecast for the group, and shall sucmit alternative plans which specify vnich capacity additions will be deferred or omitted if actual genwth in demand is less than that forecasted, and contingency pinna whien specify the options available Lf actual growth Ln demand is greater than that forecasted.

12. The utiltties shall develop and submit suffi:isnt site data, pursuarit to ss. PSC L L1.24 and 1L1.26, Wis. Adm.

Code, early enougn so snac, at Sne tLae of ec=miss*:n decision an :ne advance plan sucetttal, sll alternatives are ;;ually fessL3te with regar'i to facility design and construction lead timen. i

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13 The uttlt:tes shalt develop incentive rate structures for the sale of electrical energy to, and the purchase of electrical energy from, industrial or commercial firms which co-generate.

14. That the WM3 plan (exhibi: 12) as modified to exclude nuclear capacity other than IIaven I and to redesignate the previously proposed Koshkonong coal plant as unsited, and sucject to the sodifications set forth in parsgrsph 1 of this order, is approved.

15 That the WW plan is not approved, but that the 'AT may continue to plan on the basis of a coincident western and may Wisconsin demand growth race of netween 3 and 41 per year, sake the Jhowtng deltnested in paragrsph 2 of this order in the Tyrone certification proceeding, which application will be considered on its merits; the transatssion plan is approved with the modification that the transmission alternative proposed by staff sna11 ee included as an additional alternative to be further investigated in the appropriate certification proceedings.

16. That the utilities shall file the next advance plans on March 1,1977 l

Cated at wadison, Wisconsin, Sy the Cormaission.

c. . ..~/.., ! '.:, m a ._

rxecut:.ve seerstary 1

05-E7-1 CHARLES J. CICCHETTI, CHAIRMAN, CONCURRING: s This order regrasents the first direct involvement of tae public and taoir appoisted representatives is locq range plannisq of electric generation and distribution facilities. Cur decision addresses most of the Cur decision is a consensus. concerns expressed by the public and other interested parties. While we went further than scsaa may have expected, others will thirdc we have gone set searly far enough. Since it is the first This con-such plan for Wisconsin we felt we sust be cauticus. clusion was reinforced by the f act that :he second advance planning

                                                        *he utilities and public peccess begins in a sh' ort six months.

have a right to knew why I suppcrted our conclusions, and what Therefore, I will at_ach my thoughts this means for the future. is this concurrise opinion. i vorecas tina culy about five years ago, when I was still iscarvening before this Comunissica on rate design, I can recall saff and intervenors alike calling for the development of an independent forecasting capanility. Iurisq that peried electricity censumptics was growing at about seven percent per year and electric atility P

                                                                                ?crecasts generation and transmissica capacity deucled every decade.

Plants were were notatsg more _ nan *self-fulfilling prepnesias.* built, pecmotional advertisisq and pricisy were practiced and Icad This vi=1cus cycle seast sanagement was ignored or abandened. r

.at elec_ricity censumption kept pace wits plant expansics so I f=rscasting seemed :=necessary.

Is any case it was strer. gly tant argued :.at f rsesseisy was a utility management decisten. l I 1 I l l l I l

o I l The philosophy of the early seventies is gone. The Cossaission, :.egislature, intervenors and even the utilities have rejected it. I see this first advance plan, with its forecasted growth :stes of about one-half the earlier trends, as only the first step in the proccss. Ncw that we have the capability of an independent staff forecast, wnich is this case was ccupared te each. utility's forecast, I believe we should take the evolutionary process even further is future advance plans. t Three changes seen aporopriater r

• In the next advance plan, I believe the staff should ,

forecast using each of three methods (eccacmetric, engineerise and Sox-Jenkins) . Utility analysts and intervences should have access to staff working papers, data and assumoticas. Differences related to the underlying assumpticas should be the basis of the hearings. Differunces on methodolegy and data shculd he placed is the hearing file as technical information. If staff capability in .he enroe forecastine areas sencioned is weak, the next advance pian eculd substitute utility experts under .his same fermat. This first plan snould nake it clear that disagreements over forecsses do act make a useful record. It is Ccanissica jud;=ent, using a record based upon what we believe te he an ar., rather , than a science, that is fecer inatire. Forecasting percent estas of grewen should nce,, t taerefcre, take up similar hearis-tre nor be as hotly disputed as in the recent record of this proceeding,

• e Ferocastisq and system planning =ust be censidered tstardependently, :s this first plan we per:tittad .he eastar-.

sumzu.t independent forecasts. Ecwever, utilities t=

crdisatsd system plannasy and constructica are prac icad by the esstarn utill.aas ts keep =csts dcwn. Since 6

the supp'y side is considered as a single system, future forecasting demand must be made for the ceabined eastern utility system.

• Load management, reduced reserve requirements and time of use pricing are means being pursued to hold down costs and reduce environmental impacts. In this first plan these matters were considered. But taoir direct meaning for forecasting was trea.ed, too superficially. Future advance plans must therefore incorpcrate these policy matters acre ccepletely in the forecasting exercist.

Reserve Marcin The record is this proceeding addressed various issues related to reserve margins and system rellamility. Among issues considered were simple percent reserves, icss of icad probability, small 'rersus large plants, fuel diversity, interstate reliability council requirements. Is the end the Caenission reached three conclus .cas.

• For approving advance plan forecasts simple percent reseris s were more useful than these other issues.
• The other policy questions that were sentioned above should centinue to be addressed in future advance plans and used for estaulishing system reliability. The =csc useful fers of taese cen.aiferaticas would be as specific policy questicas.

(Yor exseple, saould Wisecasis utilities censider .he ccacer=s of neigri ring states and reliability c=uncils when determisisq capacity requirements?)

• Carrytag reserres is like huying insurance. 3ut just as generatir.:n and transmission is 7: wisq cers expensive, sc is :sliacility insurance. I believe .=at if htgher : stas of 7 :vta l

l i i l

sto observed in the future we must reduce our insurance costs This order begins that process for the by reducing reserves. castern utilities, but the concept must be more ccepletely understood and pursued in the next advance plan. Generseten_ The simplest conclusion I reached in the advance plan was coal fired electric generatica was econcaically superior to nuclear when the ecsts of weste storage, decessaissicaing and the uncertainty of fuel availability are considered. Coal is also a pechlem if we rely on it for electricity in its conventional for:s. The envircnmental health effects of ccal are quite surtous. My second conclusion was that ecal fired electric generation is envircnmentally inf arier to nuclear.

   '                     Cur envirormental staff and the envircemental intervenors concentrated so much of their energy on the nuclear versus coal issue that there was a serious deficiency in the treat:sent given the pollution effee s of cenventional coal fired electricity                               ,

generation. I had hcped that the utilities might take up the e cause playing ecal's envirec:sental preclass off against nucisar's  ! econcaic ones. While there was some reference that nuclear was envirermentally preferred, it was tee shallcw and genersi to be useful. It is my intention to address the full censideration advance of coal and. its environmental healtn issues in ene next i plan. I believe the Cecart:nent of Natural Rescurces, cur cwn staff, utilities and.intervencrs alike shculd take up this considerstien inM : wir tne same intensity . hat the nuclear dehats received Ln U :. l

I l What tilted ny decisica to join =y celleagues in banning \ l new nucleu applications in Wisconsin until the f ederal govern- l l ment rescives nuclear fuel availability, waste disposal and decommissioning is two and a half decades of broken federal premises and a desire to avcid econcaic catastrophe if the federal government centinues to promote nuclear with unnecessary siting laws, unrealistically strong endorsements and its cwn incredible inaction. I as pleased that Wisconsin now joins Califcznia, Iowa l I t and Maine in laying the nuclear burden upon Washington, where it r has belonged !cz alment three decades. As for the specific nuclear plants for which applica-ticas have been filed I retain full discretion to decide en the serits of each in their individual certificate of authcrity cases. The public deseries to know that believe the need-related burden of peccf which we have placed en the preponents of ?frene , is nearly insucmountable. Ecwever, with tens of sillicas invested, I am willist to give the western utilities the chance of convincing me and making their case that this plant is in the public interest of Wisconsin. With respect te Haven, since it will new be restricted to one unit, the utilities hemselves say request a change. Aasent tha t , Haven, in ny opinion, has seversi na*cr regulaterf stape to overceme. I have voted to keep is alive as an cptica for two reascas. Fir st , seney was spent in gecd fai.h by the utilities under a set cf rules wakh .his advance plan has new Sec=nd, as enanged fer new nuclear applicaticas and plans. stated. I believe .aa: coal fired pIants have sign:.ficant envi..enmental i= pacts. I could nec go any fur her in he case of Haven I ac -*'= 2:.ne. ?cr Wisconsin, even with increased

                                               -:s-                                l i

conservation and increased use of eenewable energy systems, power plants must stili be added and nuclear and coal are the only j economically viable opticas. Under these conditions, there- t l will be more opper unities ahead to consider these issues, and I saall take them. Also to be censidered in determ2.ning the I l ultimate need for Haven I is the expected reduced eastern utility f 1 forecasts and the proposed construction of the coal fired Weston l III, Edgewetar V and Pisasant Prairie II. System Planning A. Cn the "small versus large" coal plant. issue I was not convinced that the case for rejection at this time of either base or intermediate lead coal frca either an econcaic or environmental perspective was made. *his dces not mean that I reject ene analysis. Far frca it. I new believe we have a basis en questica plant site as preposed by utilities, and they in turn now know waat tests of acceptance their preposals sust pass.

3. I. cad management and time of use pricing are ecencaicsity and environmentally cost effective. 1"..is Ccausissien Ecwever, I do not leads une nation in vigorcusly pursuing both.

believe that the advance plan is .ae time to ever-premise er over-claim pecqress. We have to do scre and we will do scre, Future we will make tais progress is individual rate cases. advance plans should dc =cre to relate lead =anagement and ime of use pricing to forecasts, and to compare the cents of taess

                  -cols to the cost of new generatica and ransmissicn.

For tar.s advancs plan I helieve we shculd re:ect saying too suen accut icad management and ise of use pricing and instead take up the attars currently tefore us with v.gcr and 4 1 i

enthusiassa. Cne of our stats's leading incarvenors has recently received a grant to brisg 1 cad management : sore vigorously to the Cmunission's attention. I supported that grant and relish the t.Wght of an informed debate on this subject. While not related to lead management and time of use pricing, several othat issues that wereL raised in the advance plan should get similar separate rate case creatmener

• Institutional. advertising
• Provisions for nuclear weste disposal frca existing plants
• Accountist for decomunissioning costs of existing nuclear plants.

The first principle of utility acecuating should be that beneficiaries of service should pay those costs related to that service. Therefore, storage and daccanaissiening costs should be paid by current ratepayers. We do, unlike most states, collect such costs in current rate cases is Wisecasis. The dellars ecliscted are used to reduce rate base and will thus be available in the future. The Internal Revenue Service has indicated it believes such assessments shculd be taxed as income. We shall contisue to ichby in Washington to enange the IRS. 34 sed upon the evidence in .he advance plan it appears current dec=nesissicning ecsc estimates are too low and suculd be iscreased. Future rate and depreciation cases are the best places to make these adjustments. I plan to suppert them at that time. O. Electricity has not received t.he same consideratics as natural gas is Wisccasis wi.h rsspect .c building ecdas, l types of heating scurces, extansica rules, s:c. "*hese sattars 1 are to be addressed is a separate ;receeding ( c f-C-1) , and taerefore wtll ces be considered is this first advance plan. 1 i 1 l

D. Some of the Less informed political activists in tais country are incredibly misinformed concerning the heat promotion of renewable energy systems such as solar, They are opposed to any utility scornge and wind oenerators. in theso

• pure energy systems by the ' big, involvement In zy opinion, excluding utility dirty, ugly utilities.* choose involvement means that homeowners and industries thougn tnat solar or wind must be prepared to pay for both systems as they were independent.

Involving the utilities in solar and wind, financing, i and proactional tariffs, load management using remote contru , similar ef forts, will mean tant these new ferns will have a Keeping utilities out will keep chance to penetrate the narket. il I solar and wind systeme from achieving their full potent a . do not believe we must *3onopolize* the sun cr the wind to take Instead, I believe that t! e private sector such systems viable.

                                                                       .ay they did in should campete with utility systems in the same ill in the the past on electric and gas appliances, and as hey w
                  'uture for telephone wiring and primary instrum Jtts (i.e. , a telepaone). However, keeping electric, and when available, gas st= rage utilities from pecmoting and selliair solar, wind, heat i

and insulation packages is had energy, envir:nmental and ec===m c policy. In subsecuent rate csses 1 intand to pursue uss issue In tae meantime, I st. 11 1chry tcca he for specific utilities. current Presidentisi administration and the U.S. 0:ngress to keen ence from excludine utilitics fr:m the r<...ewahle energy fucers. . 3. The C11aca River 3 eedst react:r was .ever a gecd project. It was ..ot fust:.fied en ecencaic :: unds, and it was a 1

f., , a tecnnology that would increase the spector of nuclear weapons prolifstation. The President has opposed that project, and he now seems to have been given by Congress the pcwor to f and it. Under such circumstances I do not believe Wisconsin 1 utilities should put any additional ratepayer acney into that project. to F. With my above stated concerns wi-J respect the health related aspects of coal fired elec.ricity generation, I support the use of the best available pollution control technology. The Copartment of Natural Resources has agreed to 1 ( f give us a report on the envi.rsnsental effects of both the . ainiassa permit requirements, as well as more stringent rfstems This is a practi=al up to the best available cont =ol technology. way to share respcasibility between the PSC and ::NR and to gain the most free our 11mitad staffs. My own personal vote is for the S.A.C.T. in all cases, regardless of cost, unless there are offsetting envirensental damages asscciated with such systems as contrasted with sisimum permit recuirusents. Scecific cases will seen let us c.cw whether this cccperative agreement can l work. Cenclusien

never hought muca of the ar. cf planning. I still dcn' . Sus other than the name. the advance plan is a useful policy review. I believe 1: has becugns the public into a domain that for =o icnq was exclusively that of utility manage-ment. At that same tine it has cla.rified for utility management the belief s, biases and fut==e intenti=ns af .he C:mmisst=n.

t - - _ _ _ _

                  -   =                                     __ ,

l l * , , l i j I believo all interested parties hava gained free this experience. r I hope that our second sdvance plan, beginning in early 1979, will continuo cae evolutionary process and that public input i

                                                                                              +

to such far-reaching matters can be increased even further. Charles J. 01cenetti Chairman i 1 1 i t

                                                                                              )

i I t i o 1 1 [ l 6 i i h i i t i I i

                                                                                             =I I

l t t I ' i i I

                                                                    )
        ,                                                           l l

QS-EP-1 APPENDIX A Appearances: State of Wisconsin epartment of Businese Development Wisconsin State AFL-CIO Wisconsin Upper Michigan Systems (Wt:Msl Wis ensin Power & Light Co. Wisconsin Electric Power Co. Western Wisconsin Utilities Dairyland tower- Cooperative Wisconsin's Environmental Cecade, Inc. Citizens for a Better Enviremment Friends of the Eart.% Inc. Wisconsin Farm Sureau Federatica Kieran Powers Carwin Schandel Howard 34st=upil Edward Ausderau Alex Nelfestun John Walek Jim Scholtz Lavers Cass Earl Jaeger Quinn Jchasen Robert 3cnnewell Alan Kopan Robert Galeney 3cyd Stymiest. West Central Wisconsin Regicnal Planning Craunission James K. Richardson Victor J. Andrew Wayne Ocassan Will Fantle Meta G m en John Srsnt Rcbert Ross Roy Oasi James Mason Jim Weingart Robert J. McAle1 wain cuane Crank Larry Wecer R. 7. Evans James C. Mienal E4rold Johnson Garden Olsen Rictard C:saser Ellen Asaceqxo Dick Mar 2 Oonald Scmsen Jacx :.ee i Acn Peacer

                'tieser 7etsrscn Charles Veien Nors 3ussa Harcid Kringla                                      l

' Chucx Accert Z1=er Neisen l Hers 3casit.:

i t l 05=EP-1 Appearances (continued) Tom Laddy Edward Elliott W113taa Maxi Wendelin Senaefer Jean Reid James Schaefer Nicnolas Ricci Edward Klassig Margueriter Tick Jean Schmitt Lee Schmitt JoAnn Zorr. Mrs. Judy Miller Don Belleau carol Wieland Lee Schwalenberg* , Kat31een M. Schuette Sonia Schmitt Carl sujet James M. Olsen - William Suedingen Willian cohr Town of Rudolph William W. Tolley Micnael Hittner Terrt Testolin Mrs. Cornelia Greshek Mrs. Shirley Sieferd William Hoekstra Judith Fisher Louise Mecougall V. 5. Willet Terry Noz:ris Ten Ruesca Max 0. Andrae acbert F. Dickinsam 3111 Bosig Carl Guelcaer Arlen Wanta

              'Maureen Schicsser Henry Arnold Norma Hogan Pat Hanut                            i Naomi Jacchecn Christy Saita-Aanus Katai Schul:e George Dixon 3everly Fischer Mariana Schir:

Gcrden Shipman Silvia 3ecxer Maxine Surress Mr. Surress Helen Molepske Rccert Raml:w Gartrude 31xcn Jenn Smith Glen 'dolepsde Jeanette Hoffssn .i Kirx 3cener I l i l l l 1

                                    *I$*

         .                                                                    l 05-EF-1 Appearances (ccasinued):

Tout accher Todd Lculs Ms. Wochinski Ken Icftaan Mrs. Martin Wochinski Sarah Jenkins Wisconsin Fuhlic Power, Inc. Dennis Duas Safe Haven, Lts. Siarra Club Two Rivers Water & Light Dept. Office of State Planning 5 Energy Nancy Salini Carol Wieland Francis Koerber Thcunas Galazen Northern Thunder . Of the c e sion staff Steven M. Schur Barbara J. Willard Chief Counsel Virgil N. Endres Clarence F. Riederer Lanny L. Smith Engineering Division Jerry E. Mendl cave Scacengeld F1cyd Nelscu  ! Dana Sears Dick Eherle Gabe 3. Stern A. Ravindran Systems Planning, "viremmental Review, Consumer Analysis I i 0 l 1

                                   -Lii-

e . Pursa 2nt to the decisica of the Wisconsin Supreme Court in Wisconsin's Enviremnental Cecado v3. Public Servico Cenetission, Casa 76-768, decided Junu 30, 1978, the followinnt are designated as principal parties in docket no. 05-cP-L. Wisccasin Upper Michigan Systems, by, Foley & Lardner, Attorneys Western Wisconsin Utilities, by, Shaw, Pittman, Potts 6 Trowbridae I Cairyland Power Cooperative, by, William O. Harvey, Attorney Wisconsin Electric Power Company, by, James :akrajshocic Wisconsin Pcwer & Light Company, by, Eugene O. Ge1% Attorney Northern Sta'.es Pcwor Ccapany, by, F. J. Kripps Wisconsin's Environmental Decado, Inc., by, Peter Anderson Friends of the Earth, Inc., by, Rober; 11. Cwen, Attorncy Citizens *or a 3etter Znvironment, by, Oavid .Merritt Saf e !!aven, Ltd. , by, Jane Schaefer

         .                    Northern Thunder, by.

Richard Ihrig, Attorney 31erra Club, by, Thomas conovan, Attorney W'D, by, Nacmi Jacecaen T=wn f Rudolpa, by, Waltar G. Wefel, Jr. Capar :nent of Business evelopment, by, Cavid it. Swanscu l I State Office of Energy 6 Planning, :y, l Teresa Danovica < Sarah Jenkins Madimen WI 53706 "hc.sae. 0414=on Turtle Take, 4t 54HR9

                                                          -Lv-

Appendix 5 Susunary of spectfic Coal vs. Nuclear Compartsons Found In *? tis Recor:1

                     '.)f . Irvint- Bunn

Conclusion:

All inpue variables are too uncertain to enable anyune to doce:nine whccher coal or nuclear is cheaper.' (Tr. 7432-7433) WCl3 - Eugene R. K2 chews Conclusien: If the proposed l'aven nucicar plan:s can maintain a 75*. capacity factor, a nuclear expansien plan is $217,000,000 chespor chan a cost only expansion plan wi:h scrubbers (present wech es 1976) . 11 :he proposed Haven nuclear plancs can only mainesin a 60". capacity f acecr. a coal only expansion plan s' th scrubbers is 364,000,000 cheaper :han a nuclear expansion plan

       ,               (present worth to 1976) .         (Tr.1261-1263, 278L)

As:sumptions : Nuclear fuel cose - 60c/MScu (*76) (Tr. 1278, 1290) Coal cose - $1.lS/M3cu ('76) (E.%. L2; 3.12) Disecunt fac:or - 117. (Tr. 1259) Escatacion races = 67. (Tr.1259) Nuclear planc capical cos: - $360/kW ('76) (Ex. 12) t Coal plane capi:al cose = abouc $350/kW ('76) (varias w1:h size) (!x. 12) Fixeti. charge race (coal) - 16.5*. (Tr.12GO) Tixed charge raca (nucisar) - 16'. (Tr.12G0) gxene and !. undy , Cenelusien: *he :stal cost of ee 900 MW nuclear plants ecuals the :ce.s1 cost of three 600 MW coal plancs vi:heut scr-.=bers. (Tr. 1307) Assumptiens: C:al cose - $1.22/MScu ('76) (Ix. 52; 3) Nucisar fuel cost

• 63C/M3cu (*76) (estir.ated fr = various paramecars) (T.x. 32)

Capaci:7 fac:srs - 70*. (Ex. 31: 5) Discoun: rs:e 12*. (c.x. $2; 4) Coal plant capi:al case = $822/kW ('37) (Ix. 32; 3-2) Nucisar plan: eacital ecs: (including firs: c=ra) =

                                        $1130/kW ('37) (Ex. 52; 3-2)

Esen!acien :ca - 67. (t.t. 52; 10, 13, 16, 17, 13, 19' 22, a.a) Tull C'. IIP .tllowed (7.x, 52; 4) l l l 1 l l

l * * . . l

                       @ vid Comey Conclusions Eapec:sd 1984 costs are as follows: (Ex. 54: 32-

l. Nucione planc (r'4R) - 5.21 /k&.h Western coal plan with scrubbert - 6.55c/kWh Eastern cual plan: without scrubbers - a.13c/kWh Easter:t est plant with scrubbers - 5.19c/kWh Assumptious:

Nuclear plan: esptesi cose = $1020/kW ('84) ,.Tr. 3352) Coal planc capital cose wi:h scrubbers - $833/kW ('84) (Tr. 3352) . Paal planc espital cost without scrubbers = $729/kW ('84) (Tr. 3352) Fixed charge ts:e - 16% (Tr. 3351) Nuclear pisne espacity factor -- 47.6% (Tr. 3352) Coal plant espact:y f actor (no scrubbers) = 72.8%

f. (Tr. 3352) '

Coal planc espacity factor (with scrubbers) = 64.6% (Tr. 3352) Lewis Perl - MERA

Conclusions:

Expec:ed costs levelised to 1987 (Tr. 6592) Nuclear plant (900 KW) - 6.2c/kWh Coal plane with scrubbers (600 MW) - 8.4c/kWh Coal plant withcu: scrubbers (600 .W) - 6.9c/kWh Coal plant with scrubbers (300 MW) - 8.7c/hWh Coal plane without scrubbers (3C0 MW) - 7. 5 c/k'e2L - Assumpetans: Coal plane cast:al ecsc wi:hout scrubbers (600 MW) =

                                     $980/kW ('38) ( x. 96: 23)

Coal clanc esoical cose vi:h scrubbers (600 MV) = 5L114/kW ('38) (Ex. 96; 23) Coal giant escital cost wt:heuc scrubbers (200 550 - 511.4/kW (' 38) (Ex. 96: 23) Coal clane cact:21 cose vt:5 scrubbers (*00 MW) = 51238tkW (' 38) (Ex. 96: 23) Nuc.'. ear pisac :spt:s1 cose = $1415/kW ('98) (Ex. 96; 23) duclear fuel cos: = 93c/M3:u ('at) (Tr. 6713) Coal cost (high sulfur) = 34c/MScu ('75) (Tr. 6598)

• Coal cos: (lew sulfur) = $1.69/M3:u ('75) (Tr. 6598)

Capset:y fac: ors - 65" (Tr. 66C1) Discoun :sta = 1*.% (Tr. 6603) , Fixed :harge es:s (cosi) = 16.467. (Tr. 66C3) Fixed charge rata (r.uclas;) = 15. 9 7". (Tr . 660 3 ) Iscalacien ra:a (1976-1988) = $~. (Tr. 66CL) Iscs14cien ra:s (;osc-1988) = 4.5% (Tr. 66C4) ,

e Renald Knecht - Sierva Club . . Conclusiens : Excec:cd cos:s levelized to 1985 for investor-wuod utilicios (Ex. 175; RLK-19) Nuclear pisne - 9.Sc/kWh Coal planc (Isr-c) - 3.9c/kWh Coal pisac (smsTl) - 8:2c/kWh Assumptions: Nuclear plant capital cost =$1424/kW ('85) (Ex. 174; 15) Coal plant captcal cost (snall) = SL255/kW ('85). (Ex.174; IS) Csal pisac espleal coat (1str.e) - $1111/hW ('S5i, (Ex.174; 18) Nuclesr fuel cost - 3.65 mills /kWh ('76) (Ex. IY5: RLK-16 (7)) . Nuclear fuel escalacien rate

• 7% (Ex. 175: 25)

Coal ecsc - $1.08/MScu ('76) (Ex. 175: KLK-18) coat escalacion ra:c - 6; (Ex. 175: 2930) ' ' Nuclear planc espacity f ae:or = 60% (Ex.175: 30) Csat planc espaci:y fac:or (small) = 7C% (Ex. 175; 30) Coal pisnc capacity faccor (1str.o) = 60% (Ex. 175; 30) Discount rata = 10% (Ex. 175: 26) Fixed chargs race (coal) = IS* (Ex. 175; 32) . Fixed charge race (nuclear) - 17.5% (Ex.175; 32) Vestern Wiscensin Utilities - James Forest An exosn*

• cn plan Conclustens:$26t.cc0.c05 nuclese plan is enesp including h che preposed Tyrene nuclear plancs (present verthed to ,383)sr. s(tx. . ptar.1Lacludina 6; 3-138)no new Assumptiens:

Nuclear plant capi:sl cost = $621/kW (* 7G), $945/kW ('35) (Ex. 125; 3-33) Coal planc caci:al cose - $4Cc-3550/kW ('75) (deper.cing en sise and year 125: 3-63 to 3-08) Nuclear fuel cos)e(Ex.- 49C/MS:u (' 75) (Ex. 145) Casl cosc - $1.04/MScu (excep a: 3herburne s, :s = ,,,, c/M3.,,) . -- (Ex. 126- 3-111)

 ,                          Capacity f5c: cts - spproxim===ly 75, (ma ure) (Ex. *,5 ; 3-175)

Escalacion rs:a (ncn-fuel) - F* (Ex. 125: 3-15, 3-42, 3-46) Discounc esta (NSP) - 10% (Ex. 126: 3-190) Discoune rate (Cs-ops) = 9% (Ex. 126: 3-190) Fixed char e esca (NSP, nuclear) - 13.15?. ( x. 125: 3-139) Fixed castge ts:a (NSP, :esi)

• 13.027. ( x. 126; 3-139) , ,

Fixed chst's rses (Cc-cpc nuclear) = 11. 24*. (Ex. 125: J 639) Flsed chsr s rs:e (Cs-ops, sost) - 13.32" (Ex. 125: 3-139) Cast asesla:1:n ts:: 10" en vart:us cerpenen:s (Ex. 125: 3-111) Mucisar fuel escala:imn tsca - 7.a" (* 76 '92): 61 ('9'-) (Ex. 145) 2-l i

Vireil Endres - PMC. Entineerine Diylpial

Conclusions:

A number of dif ferene eases were considered utilising various espacity factors for the new cost or 60~ nuclearsad various ese plancs (60?. and 70'). and d?.). . For the esso which assumed a 67. oscalscion race andcost espacity faccot.For other cases (higher(Ex. capaci:y 163, Tr.factors 13012)sad escalscion races), coal was more expensive chan nuclear. Assuarpcians: (Ex. 168) Nucless plant capitsl cose (900 MW) = $600/kW ('76) coal plane capi:a1 cos: (600 MW) - $430/kW ('76) r Timed charge race - 13.5% Coal cost = $1.20/HBtu Nuclear fuel cost = 72c/ME:u (Tr.13012) Discounc race = 11*. i a i.* ' Davhl,5cheennold - PSC Sp!?.CA Division WL'MS Anslysis

Conclusions:

?so al:ar .scive exoansien plans wars compared                             i 3cch slcarns:ives had no new nucisar

o the pisnes.

WUMS proposed plan.WLeh no scruebers on the new coal plancs, ena plan (A) vss $23,000,000 cheaper than the WCMS plan, whileScrubbers

he other added plan (3) was equst in cose (presenc wor:hed to 1981).(Ex. 44, Tr. 11347) 3139,000,000 :o A and $202,000,000 to S.

Assumpeirns: Capi:al cos:s = : hose given by WUMS c:ill:ics La Exhibit II. (Tr. 1763) Scrubber costs = chose given in the WC?CO - CLiber: Ccemonwealth study (Tr.11346) Nuclear fuel costs - 40.ac/MScu (* 76) (Tr. 1769) Coal cose = 31.13/M3:u ('76) (Tr. 1769) Escalacien raca - 6% (Tr. 1769) Discounc :s:s = 11% (Tr. 1745) Fixed charge race = 16.5% (Tr. 1746) Nucles; planc espact:y f ae: ors = 75% :hr:ugn (ending1990, :ncr. at 37~.) f alling at 1* ;or vear for 34 years (Tr.1s 76,1803, 5133) 4

  .:*e.

y l.a;.",Q,,x,m,. tt. c :s t , g:.. a

                                        *                                                                                       . . ya .rr,qy~>t'g-                                   ..
                 , '~ :     '
                                                                                                                                   * :S? y.::a h:as,.;;;.

s: . cd Western k'i.scensin U:iti:tes Ar.alysis g . . > .y_ f.

                                                                                                                                                       . . .v ~ - w q i -trT.fr e Conclustense Two alterns:1ve expancien pisne were compared

n the VaU peuposed plan. Each 21:arnatives had no new nuclese P.N.htggy;;

              .". :, ' ~l
                               .              pl nr s. .aud the e.eu eut pisnta at L had : crubbers. Two nuclear.                                      U               ' am e p la.it eapact:y f.ac:ce seensrics ucre considered. rich had capa-city f astors of arrru:dassely 757. :hrour,h 1990. Afect 1990, one 4
                                                                                                                                                 't}".J-           1, ,              g.l. f
       ,, i. , .                              scen rio projce:cd .a Li.velised capacity f accer of 60*.. while the                                     '.M f *, 1                       dq.&
 .. .,                     ?'                 othe: Scunsito projected a icveli:od carsef.:y factor of 50~..                                                                         $y-Unce: t.hc ht,.her c.yact:y fac: r scensrh*. at:crnativo I was                                     s     i ;,                                   .e.
                  ' i 'l i

St.#p C00 r.ere cupunnvu chan the V.N propossi, whlie al:erna- 3*5J'

                                                                                                                                            .'N'"' Q c :,j$-

t. I:, 'y- . Liva 7. was $39.000,000 mors. c3 pensive (presen: worthed to 1.981). '.1. Unds: t .c lower espset:y factor secesrto, sl cenative I wee- <'t y;.

• t '4t. ) 1 $$7.000.000 chusper. med at:crnstive 2 was $30,CCO.CCO cheaper, ,

t-

                                                                                                                                                         @?s '

I% ty. - (Ex. ISL) Yv

 . 7. .%"       . -,,.s-l .s
                                                                                                                                          .>-                                                 g.
      , f*
    ~

Assuspcions: ((QS Capitst ecs:s =: those given by *=W utill:les for lar* i." plants and V.',M3 util::ies f or smalt pl.ints (Tr. L3' e64) L .f-k.h'J, 'c .

          *!                   a                                                                                                              e                     -

b.

                                                      !:uclear fuel cus: = 60c/M5:u ('16) (T:. 11C61.)

• IY * '%r N-c-%

J

                  'e Casi :sse = $1.04/M3tt.('76) (77c/M3:u ac She:hurne si:a)

(Tr. 1106t.. Ex. 126) . W'F[M T..? Escalacien esec = o". .b;# k . ..O .'TdY'l Discounc sta = 1G*. '(Tr. 111861

         '. p. *.;.3                                  Fiaus charge rser.r - LL-13*. (ceepany dependent) (Tr. 11063,

x. 126) l fD . 5,

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E4'-[ Conclusica: The levelised cost of a large. nuclear plant *

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          #                                     is 196L is 22.83C/1cm. The leve11aed cost of.a smaller c=al                                           9:$.q$

L' ; planc is 1ssa is.11.43e/xwn. ,

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j. I Nuclear fuel cost. = 974/N5tta ('76) f-M g*ji'C' csal cast = 133.754/Matu ('75) CS 1

                                   ~,                          Discount facter = 13%

Escalaci=n-races ( f .nel) = 71

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Muclear ;*1 ant capi.a1 coat = 35 35 Atw ( ' 761 Czal plan . capital ==s t = S 34 4 /iw ( ' 7 61 (This figure does not-includa.ec=ubners wh&=h are ace =unted for is e.ta yW.:$ '<.EL[: , escalaciott rats) ~ s: Wr..wt., 'c'_*

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                     -                                         Escalation racast (capital) = 139                                                             % %:*q-6,'(;              .;4e .

( M .y Fiand enarge rate (coal) = 30.34 2 Fised anarge :sta (suelear) = 21.3% ,u2p, C.1 '- '

                   =-                                          capac1: !ac ce (anciaer) = 554
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                                      .                        capactt.f factor (coal) = 65t                                                                                                  c           !
                  ? .  )                                     o a 1 cost. (ccal) = 3.3523c/h1m (*74)                                                        if-j@')? . ink O t t cons (=uslaar) = 3.lille/dets (' 76)                                                                                       ,,r:.-{

raca14 : =ar (O . .m = a s u%c'., J 4

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