ML20065A871

Nuclear Lemon,Ratepayer Savings from Retiring Pilgrim Npp

ML20065A871
Person / Time
Site:	Pilgrim
Issue date:	11/30/1987
From:	MASSACHUSETTS PUBLIC INTEREST RESEARCH GROUP
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ML20065A837	List: ML20065A871
References
FRN-59FR2542, RULE-PR-51 NUDOCS 9404010096
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Text

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!. Massachusetts Public Interest Research Group (MASSPIRG) 9gg40ggo96940304 NOVEMBER 1987 S1 59FR2542 PDR, p i

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. . . - . . . . . . . . . - . - . . ~ - . . . .- . . . . . . .

NUCLEAR LEMON RATEPAYER SAVINGS FROM RETIRING THE PILGRIM NUCLEAR POWER PLANT l

1 Massachusetts Public Interest Research Group (MASSPIRG) 29 Temple Place Boston, MA 02111 (617) 292-4800 l

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$ , Research Director and Author:

Alan J. Nogee  ;

Research Assistant:

Susan Boehm November 1987

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ACKNOWLEDGMENTS The author gratefully acknowledges the assistance of Susan Boehm, a graduate student at the John F. Kennedy School of Government. Thanks alsa to Stephen Bernow, of the Energy Systems Research Group. David Sdtlissel, of Schlissel Engineering Associates, and Chris Granda, of the

.egislative Energy Committee for invaluable technical input. Armond Cohen, of the Conservation Law Foundation; Joshua Kratka, Rachel Shimshak, Michael L'Ecuyer, and William Ryan, of MASSPIRG; and Deborah Horvitz, my wife, provided helpful editorial comments c.o early drafts of this work.

ABOUT TIIE AUTIIOR Alan Nogee has been an Energy Policy Analyst for over ten years. He is author of two major national reports on utility policy - Rate Shock:

Confronting the Cost of Nuclear Power, and Gamblingfor Gigabucks: Ezcess Capacityin the Electric UtilityIndustry - and numerous articles. He has j testified or spoken by invitation to the energy committe'es of the U.S. Senate, House of Representatives, National Governors' Association, National Conference of State Legislatures, and regulatory agencies and legisladve  !

f committees in several states. Before joining MASSPIRG in May,1987, he was an Energy Analyst with Environmental Action Foundation,in Washington, D.C., and for consumer and environmental groups in Philadelphia, Pennsylvania.

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TABLE OF CONTENTS

. . . . . ._. ._ 1

1. Introduction .- Nuclear Costs and Cancellations.._... _ .

)

4 2.The High Cost of Operating Pilgrim . . ~. . . . . . . . . . .

A. Edison ignores nuclear cost trends. . . . . . . _ ... 5 i B. MASSPIRG assumptions are still conservadve._.. .. . _. _ 7

3. Economic Benefits of Retiring Pilgrb . . . . . _ 3

.S A. Replacement power cosis less than Pilgrim _. .. . . ..

B. Other shutdown costs. ..

. . . . . 10 C. Ahernative scenarios show savings from retiring Pilgrim. .. -

-12 15

4. Conclusions and Recommendations . . . . . _ .

16 Appendix A. Annual Costs of Pilgrim vs. Alternatives ~.. .. .._. _.

Appendix B. MASSPIRG Nuclear Cost Estimates .. . . . . . . . . . . 23 )

.29 Appendix C. Causes of Nuclear Cost Escalation . . _ . . . . . . . .

32 Notes.. - _ _

LIST OF FIGURES Figure 1. Pilgrim Capital Cost -

_.. - 2 Mgure 2. Electricity Generation cost - 1988.. .. _. . - - _ _ J 1

Figure 3. Pilgnm Capital Cost Projection (BECO Anumptions)_ . - . ~ . _ _ _

4 Figure 4.Pdgnm Cost Components (BECO Assumptions) _ ._ .-

6 Figure 5. Pdgrim Annual Generation Costs (Alternative). ._

Figure 6. Pdgrun Total Costs (Alternative) . ._ . - _7 O

Figure 7. Alternatm Project Fuch .

Figure 8. Pdgrun vs. Alternative Annual Generation Costs _ - . . . . _ _ _ . . _ . 9 10 Figure 9. Pdgnm vs. Replacement Power Costs (BECO Assumptions). . -

11 Figure 10. Pilgrim Operation vs. Retirement (BECO Assumptoins) .. ~. .~

-__ 13 Figure 11. Pilgrim Operation vs. Retirement (Present Value) -- _

- 14  :

Figure 12. Cumulative Savings from Retiring Pilgrim... . . .....~.m .. .~

- - 14 Figure 13. Savings from Retiring Pilgrim (Sensitivity to Sunk Costs) .. . _

23 Figure 14. National Average Capital Additions - . ._ ... .-_...._ .

M Figure 15. Pilgrim & National Average Capita! Additions. ... .. . _

4 l Figure 16. Capital Additions Projections _

Figure 17. Camulative Savings from Retiring Pilgrita (Sensitivity to Capital Additions)... 24 M

Figure 18. Pdgrim vs. National Average O&M Costs . _...__ . . ~...

26 Figure 19. O&M Cost Projectiom - ___ _..  :- .

Figure 20. Cumulative Savings From Retiring Pilgrim (Sensitivity to O&M Costs). j Figure 21. Pilgrim vs. National Average Capacity Factor- -

27- - .

_ _ . 27 -l Figure 22. Capa&y Facor Projectiom 9t l Figure 23. Cumulative Savings from Retiring Pilgrim (Sensitivity to Capacity Factor) 1 l

LIST OF TABLES l Table 1. Alternative Assumptions Used in MASSPIRG Projections.__ . . -

12 .

Table 2. Additional Conservatisms in All Scenarios-- . . _ . . . .. . _ - . _ - 12 l 11 Table 3. Savings to Ratepayers From Retiring Pilgrim . ---_ --

Table 4. Oldest U.S. Operating Nuclear Reactors. .. -

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- . _ . . - 31 Table 5. Retired U.S. Rcactors . ..

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EXECUTIVE

SUMMARY

This study examines the costs and utility's assumptions about future benefits of permanently closing the Pilgrim performance and major costs Pilgrim nuclear plant, and replacing it are compared to past performance and with alternatives that are currently avail- cost trends at Pilgrim and other U.S.

able to Boston Edison (BECO). Using nuclear plants, and alternative assump-conservative assumptions which are likely tions and cost projections are to underestimate Pilgrim's costs, and to developed, overestimate the cost of alternatives' In order to err on the side of underes-MASSPIRG has found that: . .

nmatmg Pilgrim costs, MASSPIRG

1. Utility customers would save at least uses a number of unrealistically low

$1.5 billion (present value) over the next Edison estimates in all projections. The 25 years by closing Pilgnm,if future costs of nuclear fuel, nuclear waste dis-Pilgrim costs were to follow historical posal and of dismantling Pilgrim at the trends for the plant. These savings would end of its operating life me unchanged occur even if ratepayers had to pay for the from BECO projections. It is assumed full utility investment in the plant to date, that the 15-year-old Pilgrim plant could including the same profit the companies operate for a total of 40 years, although would have earned if the plant had no nuclear plant has operated for operated. longer than 26 years. To be as favorable to Pilgrim as possible, MASSPIRG also

2. If trends at Pilgrim improved to the ssumes that the cost of replacement most optimistic levels that could Parts and safety upgrades wd, llevel off, reasonably be hoped for, utility customers and that Pilgrim performance wdl not would still save money by retiring Pilgrim, deteriorate with age.

even if they had to pay for the full sunk in-vestment in the plant. Replacement power for re dily available from at sour-st two lea, Pilgrim is

3. Even under Edison's own assump-tions, which are unrealistic, ratepayers ,7"es.

""" First, Pilgrim s owners could

--- would likely benefit from Pilgrim r'etire . " '**"Y. at is cummly , -_

wasted by inefEclent lighting, applian-ment,if the Massachusetts Depanment of Public Utilities required utility customers ces, and other eyctrical eppment A and investors to share the cost of past in- [ePort to Edison s Board of Directors vestment in Pilgrim according to tradition- *b*,ted & potend to rduce h utility s electric demand by 1,000 al regulatory practice, megawatts (Mw), at an average cost of This study starts with the smne figures iess than two cents per kilowatt hour and uses the same methods of analysis saveo. Second, Pilgrim's owners could employed by BECO in a recent presenta- purchate electricity from small power tion to the Massachusetts Executive Of- produceis and cogenerators. Indepen-  !

fice of Energy Resources (EOER).The dent power producers have bid to supp-1

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. _ - _ _ _ - _ . ._ 1

ly Boston Edison with 1,848 Mw by 1992. reasonnole level of Pilgrim costs with Pilgrim capacity is 670 Mw. the highest level of replacement power costs. The "NationalTrend Case" as-While some of the m. dependent sumes that the rate of escalating costs facilines have environmental problems, at Pilgrim improves to the level of the the combmed potential of the efficiency "

average nuclear plant with Pilgrim's improvements and independent power characteristics (age, type, location, producers could replace Pilgnm and meet etc.), and a moderate level of replace- -

Edison's projected demand growth with ment power costs. The " Pilgrim Histori-over 1,000 Mw to spare. In order to over-calTrend Case" assumes that Pilgrim estimate the cost of replacing Pilgrim,it is costs continue to escalate at their his-assumed that all the efficiency savmgs g toric rates, and assumes the lowest to displace demand growth, with the cost level of replacement power costs.

of power to replace Pilgrim based on a range of bids from cogeneration and All cases show savings to ratepayers small power facilities. from retiring Pilgrim. MASSPIRG therefore recommends that the Pilgrim The table and figure below summarize plant be permanently closed.The.

the savings to ratepayers from retiring Department of Public Utilities should Pilgrim under various assumptions. Ihe allow no recovery of any future utility

' Pilgrim Optimistic Case" (most favorable .

investment in the plant.

to Pilgrim) combines the lowest PILGRIM OPERATION Vi RETIREMENT 4.5 Present Value (Billion 1987 $)

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1. Inkeducticn - Nuclear Costs and Cancellations i I

i at the end ofits operating life (decom-  ;

The Pilgrim nuclear power plant,in Plymouth, Massachusetts, is the focus of missioning) -- could not be reliably es- )

intense controversy over health and safety timated then or now, since the required 1 issues. (See, for example, No Exit: The technologies still have not been MASSPIRG Survey of Pilgrim Evacuation demonstrated.

I Planning, September 1987.) Relatively lit- During the 1970s, the cost of build-  :

tie attention, however, has been paid to .

ing new nuclear plants escalated the increasing cost of operating the dramatically. Nuclear construction Pilgmn plant. costs increased by over twice the inDa-When Pilgrim was first turned on in tion rate, and nearly twice as fast as the late 1972,it appeared to be a rala*ively in- ccst of building cod-fired plants.3 expensive source of electric power. Built Major causes of the increases included for $232 million, Pilgrim's construction technical problems that were identified cost about three tim,es as much per as nuclear plants gained operating ex-kilowatt of capacity as an oil- fired plant.. perience, new safety regulations im-But uranium fuelwas so much cheaper posed by the Nuclear Regulatory than oil, especially after the oil embargo Commission (NRC), and management i of 1973, that the total cost of owning and failures to anticipate and respond ade-operating the nuclear plant was less. quately to these pressures.

Itis worth noting that some nuclear As a result of increasing nuclear con-costs - such as for research and develop- stniction costs, and a drop in electricity ment, fuel processing and insurance - demand growth, many orders for were heavily subsidized by federal tax dol- nuclear plants were canceled in the lars.1 The Price-Anderson Act, passed by 1970s and 1980s. Over 110 nuclear the U.S. Congress in 1957, limited in- plants - almost half of the total num-l dustry liability for miclear accidents, ber that utilities had o'rdered - were thereby relieving it of having to consider canceled in various stages of construc-fully the economic risks of nuclear genera- ~ tion, including a second unit planned i

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tion. Cther c6st's Zfor disposing of forihe Pilgrim site.5 nuclear wastes and dismantling the plant

' Power plant capacity is menstred in watts. A kilowatt (Kw) is equal to 1,000 watts, enough pour to light ten 100-watt light bulbs. A megawatt (Mw) equals one million watts or 1,000 kilowatts. An amount of electricity generated over a period of time is measured in kilowatt bours. A one megawatt plant operating at full capacitt for i hour would produce 1,000 kilowatt hours (Kwh) of electricity. Pilgrim's capacity is 670 MW, of which Boston Edison owns 74.27 percent. Other owners are: Commonwealth Electric - 11

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percent, Eastern IJtilities - 10.5 percent, Massachusetts Municipal Wholesale Electric - 3.73 percent, and Newport Electric - .5 percent. For simplicity, Pilgrim will be treated in this report as ifit were entire-ly owned by Bosten Edison.

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The same factors that caused construc- sunk S614 million into Pilgrim above its tion costs to skyrocket for new nuclear $232 million original cost, bringing the plants have also increased the costs of total investment in the plant to $846 older plants. Large expenses have been re- million (Figure 1). Even after adjusting quired for replacement equipment and for inflation, Boston Edison has spent .

safety improvements, called " capital addi- 40 percent more for replacement and tions," and for major repairs. In addition new parts for Pilgrim than it initially '

to work needed to bring older plants up spent building the plant.

4 to new safety standards, many nuclear Largely as a result of these capital parts and systep have worn out sooner additions, Boston Edison's own es-than expected. For the U.S. nuclear m- timates show that in 1988, electricity dustry as a whole, capital additions m-creased by an average of 13 percent a Figure 1 year, after adjusting for inflation, between PILGRIM CAPITAL COST 1970 and 1986. Operation and main- Mation s (Nomina 0 oon tenance costs mereased by an average of .

over 11 percent a year, after inflation, 800I '<1. '

during the same period. In addition, the ki majority of nuclear plants failed to per- 700 600 j- r >

form as reliably as their owners expected, i -

500 experiencing many more shutdowns than other types of power plants.I 400)

As a result of these increasing capital 300. ,

and operating costs, some utilities have 200. Z begun to take a hard look at the cost of 300. ?f 4 /

continuing to operate nuclear plants. In I j $

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e March,1986, the Washington Public 1m ~ h =

Year Power Supply System (WPPSS) tem-pararily closed its two-year-old operating from Pilgrim will cost 6.53 cents per reactor because it was more expensjve t Kwh. almost twice as much as power operate than oil or gas-fired plants. In from oil-fired plants, at a cost of 3.34 May,1987, the Dairyland Power Coopera-

, cents per Kwh (Figure 2).

• tive, m Wisconsin, permanently shut down its 18-year-old 12 Crosse nuclear BECO also recognizes that con-plant becauseitwas noiongercompeti - tinued Pilgrim operation will require - -

tive with alternatives.9 ongoing capital additions. Edison es-Uma es that keeping Wm muning The Pilgrim nuclear P ant l has been mil require another $1.4 bilh,on invest-subject to the same cost trends as other ment in capital additions over the 25 nuclear plants. In fact, between 1980 and years it estimates for Pilgrim's remain-1985, Pilgrim had the second most expen-  ; ;g p ,s total capital cost sive capital additions per kilowatt of any would then equal over $2'25 billion dol-nuclear U.S. power plant, and has be-lars - almost ten times the initial con-come one of the most struction cost of the plant (Figure 3).

plants in the country.pnsive By the end ofnuclearMoreover, independent estimates dis-1987, Boston Edison (BECO)will have cussed in the following chapters of this 2

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Figure 2 management are resolved. During this.

time, Boston Edison has chosen to ELECTRICITY GENERATION COST - i!%8

$ per KWh make major upgradesin the Pilgrim 0.07 i -

plant - budgeting over $150 million in 0 U6 capital additions and nearly $100 mil-

,4 lion in maintenance costs in 1987 - to 0.05 return the Pilgrim plant to service. This 0.04 on / )- study looks at whether it makes more

' economic sense to retire Pilgrim than 0.02. j-

, to continue investing hundreds of mil-0.01 f lions of dollars in it. Chapter 2 looTcs at o . //.w#././/f:g/[#x

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Boston Edison's projections'of Pilgrim costs, compares BECO assumptions

about nuclear cost trends to the histori-report indicate that capital additions and cal trends at Pilgrim and other nuclear other costs are actually likely to exceed plants around the country, and BECO estimates.These escalating costs develops more realistic estimates of fu-require serious consideration of whether ture Pilgrim costs. Chapter 3 examines .

continued investment in and operation of the cost of retiring the Pilgrim plant -

Pilgrim is economical. .

and replacing it with alternatives cur- l In April,1986, the Pilgrim plant ex- rently available to Boston Edison.

perienced two " unexplainable automatic Chapter 4 summarizes the report's i shutdowns," or " scrams." The NRC or- overall fm' dings and presents j dered the plant to remain closed until MASSPIRG's recommendations.

serious problems with Pilgrim and its 4

Figure 3  !

-I Pit. GRIM CAPITAL COST PROJECTION 2.4 BECO Assurnetions - BHIlon $ (Nominal) t . . f 1 j

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S c = = #j 0.2 0 awz 1m zwz zuur zui2 twz 1m iwe avut Year Pilgrim Historical BECO Projection a

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2.The High Cost of Operating Pilgrim I- A. Boston Edison projections crease from 6.53 cents per kilowatt

• hour (Kwh)in 1988 to 16.76 cents per Kwh in 2012 (Figure 4), primarily as Ir,May,1987, Boston Edison the result of inflation. Another way of developed projections of Pilgrim's future looking at the cost of Pilgrim is to and costs in response to a request by the Mas- up the total bill to ratepayers for the sachusetts Executive Office of Energy plant's costs over the remainder ofits 2

i Resources (EOER). Edison's projections expected life. The "present value" of were also sent to the Office of the Attor- BECO's estimate of future Pilgrim ney General, the Department of Public costs (discounting future dollars at the Utilities, and upon request, to 10.55 percent annual rate Edison uses MASSPIRG. to account for the declining value of m ney ver time)is $3.3 billion in 1987 J BECO projects that the cost of dollars. j electricity from the Pilgrim plant will in-Figute 4 PILGRIM COST COMPONENTS BECO Assumptions -$ per Kwh 0.17 GW

! 0.16 _

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0 Z 3 W hh 0.09 O.08 _ * .

0.07 p

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-(See next page for explanation.)

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w a.;_-;;  ;.ioW Pygrim Costs"Are Calculated 1

3 The pophes the cppose page shows how much Boston Edu,onc:rpects to chargeits customets each i f yar for ele:tricityfrcm rih;r::4basedon the standard rules of utiftty regulation.Electnccompanies !

are allowed to recover most cperathypad fuel expenses directly in rates as they areincurred each  ;

- year.Utilitymyecter.:inm:jer plantand eqmpmentis tecovered over the operatinglife of the plant i

~; through 4eprecid.n chvges. Utditics are alsoallowed to charge customers for their fmancmg costs; j

~ Includhga pmEt on their investment. -

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. The b'o~tted setth.c of each barinih3 graplt shows thn Guancing charges, or return.that BECO em pacts to esen ca hs Pilgrim investmear. "Ilic return consists of interest payments on debt borrowed to

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. ~fdancefW.,andthe prodts EECO eqiecitregulators to allowit.io carn onits investutentin ths .

~.~ plant.Ther.e:1azec up repasest#M4m of BECO's Pilgrim investment. Theibird area fiam' ~>

m ,tlelMtm de36 cper#=d +mm foun chargeswhich include labor and direct 2: Operptirqexpens: Clan 06.3! EIS thetests fornucicar bi~@ ding cmTent nsimutes of wastu .

_ . .dssposalec:b.The mt am of thagrapitshowshowmuch monc5is coUected to pay for dema=W-V -T thbbut at the cad cf h5 operatinslife. Tbc top.' area indicatesehcanaexpementsuch -

QXmsatsmacdjploro;;crtytaxes.;<- y 1 .. __-

~ J3ECO expefts to carru 14Ajarc:-t rite of return oniti Pilgrim investment. About38 perceas of

_ that muunt bpaid to thaIcdcral scra.rnmect for income taxrAEvery biHion do11artinvested in .

J'ilgrhn ~tht:s itt-A- t-tieto $1M t.'llimiincharger,per y:arin tates.Each ycar.1140 of thn inw:stme'nt I 15?i'hrit'1IrrMd Ltiratdayert fordepreciatiorq andthat.amountissubtracted.froatthinest . -

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I 'fcar's# rats b5ss/rnitcobut h the niEity'& books represantingthe amodat o ~

2gylsoncitpadio(a ccr.iprD/h CE- 1 -Q cdst_charjes are calculated to mornmulaici. thal .'.

MM65IIidML$doktr$L encitimateswillbemw=j~tiidismantlethenucicarplantindbo-

_ yer A111.FwpcTty tems r.rrgabo6t 18 pekenthf the valoc oObeplaint in rate b'asr~Jaar==a- f

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-$,,mts,mcregepertima from 35 25 milliona ycar.'- -

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.:-Th:costper :ilmvdtEcAriscalculairsby(nidmgthetotalapycalcostby thenumberofKwfi' _

generated pe)rrat. IGW per3cor is si function of capacity facroc(Ace Chapter 3, Scerion B) sa

. plied byBMI br.tt jierWsrthres the 6M000 kilownti size oldie plant, Edison nisnmet a 70 perecat '

capacity fxfor fotfuture Pi' stim oper$ tion. J~~ _

But based onIdttoric nuclear cost B. MASSPIRG projections trends, Edhon is greatly underestimating Pilgrim ecsts. Projceting the total cost of electricity frcm a power plant involves MASSPIRG has compared Edison

~~

making numercumumptions about assumptionsin each of these areas to various ecst components, as well as the actual performance and cost trends at overall operating performance of the Pilgrim and other nuclear plants plant. Three assumptions in p:rticular around the country. The specific results dominnte the fmal resulu: the rate of capi- of these comparisons are presented in tal additions, operation c:d mtintenance Appendix B. In general, Edison projec-(O&M) expenses, and tha amount of time tions assume that the past performance the plant can be expected to operate of Pilgrir'n and other nuclear plants (capacity factor). provide no guide to future costs. Consis-tent historical trends - both at Pilgrim l l

and et nuclear plants around the s

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i resotved generic nuclear sar'et ssues, country - are assumed to immediately stop. the aging of reactor parts, and the potential for both small and large O&M costs, which have m.ereased na-nuclear accidents to create new tionally by 11.4 per year, after adjusting regulatory requirements."(See Appen- ,

for maation, and by 13.8 percent annually  !

dix C for additional discussion.) .

at Pilgrim, are projected to merease at only 0.5 percent per year henceforth. It is therefore important to examine l Capital additions, which have escalated more realistic assumptions for nuclear -

nationally at 13 percent per year after in- costs. MASSPIRG looks at three alter- l l

flation, and much faster at Pilgrim, are native assumptions for each major also forecast by Edison to increase by 0.5 nuclear cost component. In a " Pilgrim  ;

percent per year in the future. Despite Historical Case," future costs are as- l the fact that Pilgrim has had a lifetime sumed to continue to escalate inline capacity factor of only 50 percent, and the with historical trends for die Pilgrim national average for nuclear plants is 60 plant. In a "NationalTrend Case,"

percent, Edison predicts that Pilgrim will Pilgrim cost trends are predicted to im-average a 70 percent capacity factor in the prove to match those of the average j future. plant having Pilgrim's characteristics.

. . For a " Pilgrim Optimistic Case," it is as-Nuclear utilities around the country sumed that future Pilgrim costs willim-have been makmg similar assumptions for prove to a level substantially better many years. Each year, the utilities than would be expected based on either (

project that nuclear costs will freeze at Pilgrim or national trends, then-current levels. Instead, real costs

' Die detailed basis of MASSPIRG's l have continued to rise.The basic forces that have run up nuclear costs in the past alternative projections are presented in will continue to increase costs in the fu- Appendix B. Figures 5 and 6 illustrate ture. These factors include technical the effect of the revised assumptions on  :

problems discovered as nuclear plants the annual cost per Kwh and on the gain more operating experience, un- total present value of Pilgrim costs to Figure 5 PILGRIM ANNUAL GENERATION COSTS , , 0.45 Alternative Scenario Analysis

__. _ . _0.40 __._ . .., _ __ _ . . _ . _ _ . _ _ _ _ . . .

0.35 _

0.30 _

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0.25 - /<

0.20 _

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0.0S 1992 1996 2000 2004- 2008 2012 196S-a BECO . Opt . NatTend , Pilg Trend 8

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figuro 6 RANGE OF PILGRIM TOTAL COSTS 4.5 Present Value (Billion 1987 $)

4.0 l 3.5 3 5 -

30 2.5 C -

ki 2.0 ,  ?;). '

1.5 d- i

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, j 0@ignnFTmnd Nauvifal-Trend - [p$iiistic uEDO' a Pilgrim ratepayers, respectively, operated for only 26 years, and 14 reac-tors have been retirea after less than 20 All three MASSPIRG cases share a years of operation. Pilgrim s operating number of extremely conservative assump-license currently expires in the year tions. In general, nuclear costs are as- 2008, and would have to be extended sumed to be increasing according to

. by the NRC m order for the plant to  !

1 Im. ear trends (i.e., a constant number of dollars per year, after adjusting for infla- Perate until 2012.

Real nuclear fuel costs are assumed to tion) rather than according to exponential remain stable, even though ap-trends (i.e., a constant percentage in-Pmunately half o% umuum used m,  !

crease per year, after inflation). The trend ,

domestic nuclear plants is imported, of increasing capital additions is still as-. much ofit from politically unstable i sumed to level off m. a few years, despite countries such as South Africa.12 evidence that it may actually be accelerat-BECO's estimates for nuclear waste dis-ing. Plant performance is not assumed t posal and for dismantling the radioac-deteriorate with age, despite evidence ot-tive plant are used, despite the fact that i declining capacity factors, particula,rly at the necessary technologies have not yet salt-water-cooled plants like Pilgrim.

, been demonstrated and there is there-For simplicity, and to be as favorable fore enormous uncertainty around es-to Pilgrim as possible, this report also timating these costsJmditis assumed _ . _

adopts a number of other Edison assump- that no serious nuclear accidents occur tions which are biased in favor of Pilgrim.. at Pilgrim or at any other U.S. nuclear The Pilgrim plant is assumed to be plant.The conservative nature of these operable until the year 2012 - a total of assumptions is discussed in more detail 40 years from when it entered service, in Appendix C.

The oldest commercial nuclear plant has 7

't j ,

a 1

'l i

1

3. Economic Benefits of Retiring Pilgrim .

r There are three categories of potential Another readily available source of costs to ratepayers for retiring Pilgrim at replacement power for Pilgrim would this time. First, there is the cost of re- be the purchase of electricity from new placement power. Second, there are costs plants built and owned by independent to shut the plant down and decommission small power producers, generally it, which must be paid whether the plant referred to as " Qualifying Facilities" or is retired now or later. Third, there is the "QFs." Since the passage of the federal l potential cost of paying for past invest- Public Utility Regulatory Policies Act ment in the plant. Each cost will be con- (PURPA) of 1978,which required I sidered separately. utilities to purchase power from inde-pendent producers at fair prices, there A. Replacement power has been a rapid increase in the development of such facilities '

throughout the country.

The main cost of retiring Pilgrim would In January,1987,in response to i

be to replace the electricity produced by rules enacted by the Massachusetts the nuclear plant. As demonstrated in the Department of Public Utilities, Boston recent New England Energy Policy Coun- Edison sent a Request for Proposals to cil study, Power to Spare, the least expen- i potential developers to supply 200 sive means of obtaining new power . megawatts (Mw) of Edison's power supphes is to ,mine the electricity that is needs by 1992. The utility's projection now wasted by mefficient lighting, ap-of future oil costs was set as the ceiling phances, and other electncal equipment

, price for acceptable offers. In June in,our offices, factones and homes. Edison received bids from 61 projects,-

Utilities around the United States have representing a total of 1848 Mw.The .

tound that they can finance efficiency im- number of proposals received was well provements for their customers at an _

__ g g; y, e tadondafan average cost ofless than two cents per in its April 1987 forecast, the New Kwh. That is less expensive than opera- England Power Pool had projected that tion and maintenance costs alone a1 only 1391 Mw ofindependent power Pilgrim. A report to Boston Edison,s would be available for the entire region Board of Directors in March,1987, found by the year 2002.is that cost-effective efficiency improve-ments could reduce electric demand in The majority of the proposals were ,

Boston Edison's service territory by as for cogeneration facilities -- which much as 1,000 Mw over the next 15 produce useful heat and electricity in years." the same process - and other small power facilities using a variety of fuels 8 S t

i

Figuro 7 forecast of power needeci to meet in-M 3 M Mbif M j M M E N 3 creased demand through the year 2012 by over 1,100 Mw.M Cther (15.6%[) !GM

/'

'D%  ;/Ny;%

sotm, 3,, g,,33)

Nine QF projects, representing 350 Mw, were selected by Edison as an ini-

'  ; tial" Award Group" for final contract Wooo k Peat Q.4%)

. Did Lt..S.A, negotiation. The average Award Group

= ~

M9 bid was significantly below the price of was 00.5%) g ";M Ef Pilgrim generated electricity, even 19$ ( ,5 . E ' h ino ;o.3 m using all of Boston Edison's Pilgrim

%y; Q / cost assumptions (Figure 8).

.s.m, .

7,

'Nw' If Pilgrim were to be replaced, there C '""" would be a second round of bidding. It (Figure 7). Over 240 Mw would be is quite likely that many bids would be produced using renewable energy sour- lowered given the large, and previously ces, such as biomass, wind or hydropower. unknown, surplus of potential supply over Edison's uemano. In the first Some of the projects, particularly the round, potential developers were bid-200 Mw of plants which would burn ding primarily against BECO,s extreme-refuse as fuel, may present environmental ly high projection of oil price increases.

problems. MASSPIRG does not neces- . .

The uti.lity forecasts oil prices to m-sarily endorse all of the proposed QFs. crease at an average rate of over ten However, the combm.ation of energy ef-percent a year, approxiniately five per-ficiency improvements and the large num- .

cent above the assumed inflation rate ber of smallpower and cogeneration between now and the year 2012. Oil projects provides a more than adequate prices would increase from their cur-pool of potential replacement power for rent $20 per barrel to $166 per barrel Pilgn.m. The combined potential of ener- .

m 2012, or to over $53 a barrel tn 1987 gy efficiency improvements and m. de- .

dollars adjusted for m. flation.

pendent power projects exceeds Edison's share of the Pilgrim plant and its < .

Figuro 8 ,

PILGRIM VS. CF ANNUAL GENERATION COSTS

- . _ _ _ .. _ . . _ . _ . . _. . BECO Projection - $ per Kwh .

q

S 0:1g:-  ; 1,2 2 2 0 j4 : 2 2 2 8:13 .

1, g 1 A

- 2 2 2 2 2 2 g j{ 4 m p]

g:ggr

-g:

3 g 2

< s =2hsZ s: 2 2 2 n 2 :

2 2 3 3 R

_-2  : B  :  % . M M *2 1 2 32 m :2 3

+ + ;.

8:89 -]

: :m 2 :4 2 2 gm m 2 x 2 2 2 2 23 s cu g.gg g,: 2 2 2 2 2 2 2 2 m m 2 2 2 2 2 2 :3L

• 3 my 8:8a:: L :., 2 2 2 2 2 1 2 2 2 g A 2 2 3 2 2 2 2 3 22g223 2 2 2 2 2: 2 2 2 g .

1:.gp*2 00 2 22.22-222 $,:::22 2 2 m

h mm t = . 2 am e

um 2 Year a Pi; grim - Award Group 9

t 1,

' +

To be as favorable to Pilgrim as pos- accident at another nuclear plant, as sible, however, the Award Group bids are weil as by incidents at the plant itseil, assumed by MASSPIRG to represent the The diversity of the QF projects makes low end of a range of replacement power it more likely that a given amount of costs. Efficiency savings are assumed to power will be availabic all times. .

be used entirely to displw:e demand The QF contracts also provide in-growth rather than m replace Pilgrim. Wiodom igoMwial sks, .

The average bid of the next block of 740 since they are based on payment per Mwis used as a middle estimate of Kwh produced.Their private owners Pilgrim replacement costs. And the thus assume the nsks of cost overruns, average bid of all the non-Award Group ects is a ted as a high estimate of pro trab ity, Mos o 11 e d Group contracts are tied to the Consumer Price Index, thereby requiring utility Using BECO's assumption of a 70 per-cent capacity factor for Pilgrim, the total customers to bear only the risk of unan-present value of replacement power R aure 9 needed would range from $2.5 billion, PILGRIM VS. REPLACEMENT POWER COSTS based on the Award Group, to $2,9 bil- BECO Assumptions B11 tion $

lion, based on the average non-Award Group bid, through the year 2012 (Figure jj:[ffyM 3:g 9). If one assumes lower Pilgrim capacity 6 . _ .l factors, replacement power would cost ljf R  :  !.

even less,  ;

5 P

All the proposed QFs have projected / .

/x

> l in-service dates before 1992, with 400 Mw ,

j

,i  ;

expected to be available by the end of 1990. For this study, it is assumed that all k:'g/g/j E. :

l QFs begin operation in 1992. Until that r av. w ~ W . m u. - v"=d time, replacement power costs are as- a Pilgrim a Beplacement power i

sumed to equal energy costs from reserve '

oil-fired plants, plus an additional charge ticipated generalinflation. With by the New England Power Pool for Pilgrim, however, mtepayers are ex-providing reserve capacity.The 1987 New pected to bear the risk of au cost in-England Power Poolforecast shows a creases, including inDation, a.; well as . _.__

more than adequate reserve margin of the risk that the plant does not perform generating capacity through 1992 - even as reliably as expected.

if the Pilgrim, Seabrook, and Maine Yankee plants are not in service.1 B. Other shutdown cosk Reliance on non-utility power plants poses certain obvious risks to a utility' A decision to retire Pilgnm at this .

smce it will not control the construction time would involve some costs in addi-or operation of the QF plants.These n,sks tion to replacement power. Decommis-must be weighed against risks associated sioning costs, for instance, would still with Pilgrim, however. Pilgrim could be have to be incurred whenever Pilgrirn closed by federal regulators because of an 10 3 9

i 1

is retired. Actually, since the cost of Figure 10 decommissioning is likely to increase as PILGRIM OPERATION VS. RETIREMENT the plant becomes more radioactive,it 4 BECO Assumotions BRilon$

would almost certainly be cheaper to 18' decommission it earlier. To be conserva-3-

tive, however, these potential savings are '

not considered here. Costs that would 2.5 . ,

clearly have to be incurred to shut Pilgrim 2 l l down must be added to the cost of re- 3.s . 4 '

s 4 placement power (or subtracted from the 3' ' '

i cost of Pilgrim) to evaluate the economics "8

of early retirement of the plant.

0- -

In addition to direct decommissioning

= PH e Rep.Pwr. a Shutdwn as Sunk costs of S126 million in 1987 dollars, BECO estimates that closing Pilgrim will , in addition to its investinent in the require additional operanon and main- plant itself, Edison also includes a 550 tenance costs over a five year decommis- million investment in an inventory of sioning period.The total decommis-nucleai-fuel and $20 million in sioning and shutdown costs add S206 mil- materials and supplies in Pilgrim sunk lion, in addition to the cost of replace- costs. After the Pilgrim 2 unit was can-ment power, to the present value cost of celed,however, BECO was able to retinng Pilgrun. Edison fails to melude recover 64 percent of its investment in i these costs m its analysis of continuing t nuclear fuelby sellingit to other operate Pilgrim, however, presumably be- utilities.18 In the MASSPIRG 1 cause the costs would be incurred after scenarios, therefore, it is also assumed I the year 2012 - the last year BECO looks that BECO will recover 64 percent of at. In the MASSPIRG scenarios, the its current investment in fuel, materials present value of the post-operanon costs and supplies through sales to other are included in both early and late retire-

. utuities, ment scenarios.

If Pilgrim were retired,it would ac-C. Sunk costs. tually be up to the Department of Public Utilities (DPU) to determine };

who should pay for Pilgrim sunk costs '~

Another potentialcost to retiring ~ ~ ~UndeTa'Fohey id6ptid~id aYesteffiT Pilgrim is repayment of the money that Massachusetts Electric Company case Edison has invested in the plant to date - in 1984, the DPU ruled that sunk cost '

generally referred to as " sunk costs." recovery would no longer be allowed Pilgrim sunk costs will total $846 million for investments that were not "used and by the end of 1987. In its analyses of the useful" to utility customers, such as i cost of retiring Pilgrim, BECO effectively plants that were cangeled while still .

assumes that ratepayers would pay for under construction.1 - In a 1985 the utility's, entire investment in Pilgrim, decision on excess capacity, the Depart-along with the same rate of profit it ment modi 5ed its policy to allow would earn if the plant were operated utilities to recover uneconomic invest-(Figure 10). ments over time, but without charging 11

ratepayers for financing charges.3 This 0. Alternative scenarios silow policy, which is followed by most state savings from retiring Pilgrim.

utility commissions, results in a sharing of sunk costs between utility ratepayers and investors. Stockholders are also able to Three scenarios were constructed to '

share their losses with the federal govern- cover the widest reasonable range of as-rnent, which allows generotts tax dedue- sumptions for the costs of operating or

! tions forinvestment losses.'I retiring Pilgrim. The Pilgrim Optimistic -

Case combines all the assumptions f

( -

I  :+ Table:hALTERNATIVF/ ASSUMPTIONS USED IN %fASSPIRG PILGRIM.- ~

1

~ Q:Ii.' . ' . ' .

'. _fROJECTIONSf ' .T((

'O&Mx

.MCapaptyi .)tablial$ j Replacement;: '

1

Additions <  : Expenses:t  : Powerc t

_ . .~~ + +::lO .. Factor :-

[

jEUkriNb. 5hh$m:1 { Pilgrim ;. Pilgrim ... 5Averge of!:'

> Histancala. = Hrstorical Historical :  ! Award Group

Historicatk "

MTrend Chse@ :1~50%5 *' 110ycars .

OFss ..  !

j,NAitoaak ijhationAl%f .. INhtional ' National . Average ois ,

Trend; i Next 740 MW- l 2 Trend" .. Trend ... ) Trend :

Case;: 2Pilgrimto 4/86.:li;5 years QPs M :k:::

.. ..:56W.~".. ..

< Average ofi . .

? Pilgria'i 6.. . I.Nationilavp;. )::Filgrim 2% heal!.

._ , OptimistE l;iallBWRr:M 51tm Historical; Escalation? fM1327.MW7

5 years

/.  :: Unsigned OFs;::

yCasej R632E 3.JB  !$.700 [0.5NiReal::. 10.50f, Re~alj Mrage ob ., l allWMWK

""7 Edison  ?: Escalation;  ; EscalatfoE l

l

!Tnsigned QFN.

g.;., ;3.x 1

Table 1ADDITIONAliCONSERVATISMSIN ALIJSCENARIOS1 1

t

• * . ... "::.. .iil h0C$e$ $O 5 .;;. . ;...-_ .

)

front'carent BECO assumpdonsT.

m

.,: jllsposald.MK.c:a}.:

p y

.,No :ingenses_. .; . . . . . , , _ . . . . . . . . . ,

l l l

$, m. : r:.:.,,,sni;i:j _ . . .AsaviA 1 6[frosOtti$ eco,mmissioning; , j ., , , , ,  ; ,,, , ,

~

,- *,:,,....?,' . . . , . , , . ,

- 2.Capacityheto('?'.$ . Y..No decliamg ef"feet f"ro' m saltewater coojin' g?

.a...  :: :v::a,... ... . g.c. 7

~..

) Cap' ital Additli mNo merenses after 5:10 years:. ~

?:BECO-assumed decreases in 1ast five years of opeintion .

.d.i '

.jv 1 2:.!40 tepeat of 1984 and 1987 major re pairs .

.2O&M aie:n:f . . . . . . ' . W .. . . . . ..  :

.. CapitarAddiflonsi Linear rattier'ihan exponentialtrend lacreases.

.,x. .. . . , .

SMiscellad. ..:.eoust 240-y' e"arlifetime.i

" g.  :.' ~ ' J Noincicasesin'nudearinsurance

No serious accidents " ~

=:t  :)No societalcostsi ..

E No;nucleaf subsidies induded in Pigdm costs ;

12 h

i 4

- _ _ _ _ _ _ _ _ _ _ _ _ _ _ . _ - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ [

Figura 11 PILGRIM OPERATION VS. RETIREMENT 4.5 Present Value (Binion 1987 $)

4.0 _

3.5 ._

3.0 _

~

~

~

E b

04;; uu;7g Isd Nat

l reuv vpuu uuu Repi. Power Shutdown a Sunk

a Pilg. m a most favorable to Pilgrim -- the most op- summarizes the assumptions employed l timistic projections of Pilgrim costs, and in each scenario, ; Table 2 lists the addi-l the highest price for replacement power, tional assumptions favorable to Pilgnm u that were made in all MASSPIRG l equal to the average bids of all non-Award Group QFs.The National Trend scenarios.

Case assumes that Pilgrim costs improve , The alternative scenarios indicate to the level predicted by the national that the present value of savings to trend for a plant with Pilgnm's charac- ratepayers from retiring the plant teristics. A nuddle estimate of replace- would range from $46 million to $1.6 ment power is used, equal to the pnce of billion over 25 years, even if ratepaye'rs Weleast eynsive 740 Mw of QF bids .

were te pay for all sunk costs (Table 3i after the Award Group.The Pilgrim His- Figure 11). The $1.6' billion savings is toncal Case assumes that all Pilgnm cost appror.inutely equal to $540 for the components follow the same trends they avel age Eckm esidential customer. If '

have m, the past, and that replacement investor' wer . i9 pay sunk costs, the power could be obtamed for the price of savings from tet: ring Pilgrim would in-the Award Group bids from QFs. Table 1 crease to a ranse of $769 million to iSAVINGS TO. RATEPAYERS FROM,RE'11RIqG PILGRlhi; yg . .

' Ratepayers Pay $ ' investors Pay Sunk Costs - ' Sunk Cpsts~

.Filgrim Historical: $1'56 billion.; .52.28 billibn .

]:{

Mnnd Case F ,,

jNatload $8t3 million.:: .$O4'bOIUn

, . 3 Trend Ca' set

$49 million 5773: illion h T NgNmF Optimistih ;

f Case a

-$611 million : .$168inillion

$BEC01_ c. .

%sumpt!Sast 13

$2.3 billion. Detailed annual costs foi all 13 illustrates the effect of changing scenarios are presented in Appendix A. only the assumption about how regulators might deal with Pilgrim sunk Figure 12 illustrates how the present costs if the plant were retired.The nud-value of the cumulative savings from retir- ,

die line represents the usual regulatory ing Pilgrim changes over time in each Practice for plants canceled under con-scenario, assuming that ratepayers pay for stmcuon, where ratepayers would the full sunk costs, including a profit on ,

repay 11 sunk costs over time but with Pilgrim investment to date.The cumula- the utility earning no profit on its sunk tive savings at any point in time is equal investment. In this case, it is assmned to the difference between total Pilgrim that Pilgrim sunk costs would be costs and the total costs of replacement charged to ratepayers over the same 25 power, shutdown and sunk costs to that year period as they would have been if U.** the plant had operated. Under tradi -

Graphs of cumulative savings are espe- tional regulatory practice, ratepayers cially useful for lookiag at the effect of would save money, at least through the changing only one assumption at a time year 2008, by retiring Pilgrim, even if on the beneSts of retiring Pilgrim, Figure all BECO assumptions about the plant's future costs hold.

Figure 12 CUMULATIVE SAVINGS FROM RETIRING PlLG.

1.6 Present Value (Billion 19875) 1.4 _ f i:$:

0.8

/

jj -r S.

-0.4:

i ~%

l

-0.6 _  %,,_J, 481960- 1992 100S 2000- 2004- 2000 2012

, BECO . Opt. . IT8f3 rend . Pilg. Trend Figure 13 CUMULATIVE SAVINGS FROM RETIRING PILG.

000 BECO Assumptions Except Sunk Costs

$7 [  %

~~~

300 _

nj:p~

.,00 x J00 1C iM2 1E 200G- 2004 N 2000- 2012

. Investors pay _ dR3 fed . Customers pay 14

4. Conclusions and Recommendations Retiring Pilgrim would clearly save reasonable assumptions about Pilgrim utility customers money, under a wide costs used to set a target for acceptable range of reasonable assumptions, even if bids. Energy efficiency contractors, ratepayers have to pay a full return on the who could sell energy savings to the sunk costs of the plant. The Pilgrim utility, should also be encouraged to nuclear plant should therefore be im- compete with QFs in bidding to replace mediately and permanently retired. Pilgrim.

While no state official or agen :y has A similar process for dealing with the direct authority to order the shutdown new power plant construction has or retirement of a nuclear plant, the Mas- recently been proposed to the DPU by sachusetts Department of Public Utilities the state Executive Office of Energy ,

(DPU)is responsible for determming Resources.22 Decisions to continue in-what, if any, utility investments and expen- vesting in plants that have already been i ses can be charged to ratepayers, under a in operation are no different from l broad statutory mandate to ensure just decisions to start new construction, or l' and reasonable electric rates. Ifit were to to complete partially built plants. In determine that ongoing investment in each case, the ongoing investment must Pilgrim were uneconomical, the DPU be weighed against potential alterna-could prohibit its owners from financing tives. New utility investment in power or charging ratepayers for future invest- plants should be allowed onlyifit ment in the plant. would be "used and useful" - necessary to provide reliable electric service and MASSPIRG therefore recommends the most economical alternative.To '

that the DPU disallow recovery of any ad- the extent that the Pilgrim plant cannot ditional Pilgrim investment, including the meet that test - and this report finda

$150 milh,on m capital additions Boston that it cannot - the plant should be per-

--- --Edison has-budgeted to spend in 1987. A ~

-Inanently reiifed.' '

~

second round of bidding from potential power suppliers should be initiated, with 15 S

t-1

. i

4 A?*EMEIZ A

.uCTUAL COSTS OF FILGRDI VS. AL EFSATWEi BECO ASSUMPTIONS lear Cap- 7atal /m. Accum- Net De- Ma- Fuel Avg. Re- In- De- In- Lo- De- Fuel OL*! <- :!L5 RIM TOT /d -> ; ; - Ws -

ttal Plant e- ulated Plant fer- ter- Rate tum ctse pre- sur- cal cae tenua1 Cost In- Cost- l Cast 4- Year pre- Depre- Yea & red ials Base on Tax cia- ance Tax als- Costs in cre- in in 4s M- End cia- cia- End 7ax Rate tion ston- Cects men- Ce is Cents Cat tion ing per tal pe- l per tions .an Base

( in millions of do!!ars ) inn (mil.)kwn  : M - (sil',

1987 150 846 24 176 670 -104 20 51 562 58 27 24 5 11 4 1 97 227 5.5 1 0.0 l 3.3 34

, 1998 40 886 28 204 682 y 13 21 51 621 64 30 28 5 11 5 27 99 268 6.5 92 2.2 l 3.5

• 1989 40 926 29 233 693 +122 22 50 623 64 ~,0 29 5 11 5 24 107 276 6.7 126 3.1 ! 3.6 i49 1990 70 996 32 265 731 -130 23 50 640 66 31 32 5 12 5 24 120 294 7.2 152 3.7 : 3.7 152 1991 40 1036 34 299 737 -138 24 50 654 68 32 34 6 12 5 24 125 '05 . 7.4 169 4.1 ! 4.2 13 1992 42 1078 36 335 743 -143 26 50 655 68 32 36 6 12 6 24 131 314 7.6' 185 4.5 : 5.7 232 1993 44 1122 38 373 749 -147 27 54 661 68 32 38 6 12 6 26 138 326 7.9 202 4.9 I 6.1 251 1994 46 1168 41 414 754 -146 28 56 670 69 33 41 6 12 7 27 145 339 8.3 240 5.8 ! 6.6 272 1995 27 12!7 43 457 760 -143 30 60 683 71 33 43 7 12 7 29 152 353 8.6 258 6.3 ; 7.2 273 1996 51 1268 46 503 765 -139 31 66 697 72 34 46 7 13 7 31 160 370 9.0 278 6.8 : 7.8 320 1997 54 !!:2 49 553 769 -136 33 67 706 73 35 49 7 12 8 32 168 384 9.3 294 7. 2 8.5 349 1998 56 1378 53 606 771 -133 34 75 721 74 35 53 8 12 8 36 176 403 9.8 316 7.7 9.2 378 1999 59 1437 57 663 774 -129 36 75 726 75 36 57 8 12 9 36 185 418 10.2 334 8.1  : 10.2 420 2000 62 1499 C 725 774 -126 35 84 739 76 36 62 9 13 9 40 194 439 10.7 358 8.7 ! 11.1 457 2001 65 1564 67 792 772 -121 40 84 742 77 36 67 9 13 10 40 204 455 11.1 377 9.2 12.0 491 2002 68 1633 73 866 767 -115 42 92 752 78 37 73 9 12 11 44 214 478 11.6 402 9.8 13.2 541 2003 72 1705 80 946 759 -105 44 94 755 78 37 80 10 12 11 45 225 498 12.1 425 10.3 i 13.9 573 2004 75 17B0 88 1035 746 -43 44 99 760 79 37 88 10 12 12 47 236 522 12.7 451 11.0 : 15.1 621 2005 79 1859 9P 1133 727 -78 48 105 762 79 37 98 11 11 13 50 248 547 13.3 478 11.6 i 16.5 677-2006 83 1942 110 1242 700 -60 51 111 761 79 37 110 11 11 14 53 260 575 14.0 500 12.4 17.8 729 2007 87 2030 124 1366 663 -37 53 118 754 78 37 124 12 11 15 56 273 605 14.7 540 13.2 l 18.6 765 2008 70 2100 140 150!. 594 -9 43 125 718 74 35 140 13 9 16 59 287 633 15.4 570 13.9 : 19.9 819 2009 56 2156 155 1661 494 26 34 94 619 64 30 155 13 8 17 63 301 652 15.9 591 14.4 l 21.2 870 N10 45 2200 172 1834 367 66 27 62 500 52 24 172 14 6 19 67 316 669 16.3 610 14.8 ; 22.5 922 2011 36 2236 192 2026 210 115 22 31 361 37 18 192 15 3 21 71 332 688 16.7 629 15.3 l 23.8 979 2012 21 2265 239 2265 0 0 17 0 3 0 0 239 15 0 11 75 348 688 16.8 645 15.7 25.3 1038 2013 139

'?

2014 70 2015 70 2016

- - - 2017 70 2018 70 Total Present 3297 2302  ! 29!!

Value .

16

't e

i i

0?TI'tISTIC ASE

. ;r - Ca- Total Ann Accuc- Net Oc Na- Fuel Avg. Re- !n- De- In- a- Ce- Fuel Okh W PILGTt1H TOTAL --- .s- ;Fs --

tal Plant Ce- ulated Plant fer- ter- Rate turn e.ae pre- sur- cal ces Anruatcest In- Cost  ! Cat Ad- Year pre- Depre- Year- red tais Base cn Tax cla- ance Tax mis- Costs in cre- in !n ,ncta di- End cla- cla- End Tax Rate tion sion- Cants men- Cents ; Cents C::st tions tion tton Base in9 Fer tal per i per

( in sillitms of dollars ) bd1 (mal.)Lun  ! kun iatl.

1987 150 846 24- 176 670 -104 20 51 562 58 27 24 5 11 4 1 97 226 6.1 8 0.2 : 3.3 20

'988

. 45 891 28 204 687 -113 21 51 624 64 30 28 5 11 5 24 99 266 7.2 98 2.7 3.5  !!0 1989 50 941 30 234 707 -122 22 50 633 65 31 30 5 11 5 21 107 275 7.4 134 3.6 ; 3.a 135 1990 70 1011 32 266 745 -130 23 50 653 67 32 !2 5 12 5 21 120 2?5 7.9 160 4.3 : 3.7  !!S 1991 60 1071 35 301 770 -139 24 50 675 70 33 35 6 12 5 21 125 308 8.3 179 4.8 : 4.2 157 1992 66 1137 38 339 798 -145 26 50 695 72 34 38 6 13 6 21 131 321 8.6 199 5.4 5.7 210 1993 69 1206 42 381 825 -150 27 54 722 75 35 42 6 13 6 23 138 338 9.1 220 5.? I 6.1 227 1994 73 1279 45 426 853 -150 28 56 751 78 37 45 6 14 7 24 145 355 9.6 263 7.1 : 6.6 246 1995 76 1356 49 476 880 -148 30 60 783 81 38 49 7 14 7 26 152 374 10.1 285 7.7 : 7.2 266 1996 80 1436 54 530 906 -147 31 66 816 84 40 54 7 15 7 28 161 396 10.7 310 8.4 1 7. 8 229 1997 84 1520 59 589 931 -145 33 67 943 87 41 59 7 15 8 29 172 418 11.3 334 9.0 l 3.5 316 1998 89 1609 65 654 954 -144 34 75 876 91 43 65 8 15 8 32 183 445 12.0 364 9.8 ; 9.2 I42 1999 93 1702 71 726 976 -142 36 75 899 93 44 71 8 15 9 32 195 468 12.6 390 10.5 l 10.2 37, 2000 98 1799 79 805 995 -139 38 84 929 C6 45 79 9 16 9 ~ 34 208 498 13.4 422 11.4 : 11.1 412 2001 102 1902 87 892 1010 -136 40 84 947 98 46 87 9 16 10 36 222 524 14.1 451 12.2 i 12.0 443 2002 108 2009 97 988 1021 -130 42 92 971 100 47 97 9 16 11 40 236 .556 15.0 485 13.1 1 13.2 882 l

2003 113 2122 108 1096 1026 -120 44 94 987 102 48 108 10 16 11 40 251 586 15.8 517 14.0 1 13.9 517 2004 119 2241 121 1217 1024 -108 46 99 1002 104 49 121 10 16 12 43 267 622 16.8 555 15.0 l 15.1 561 2005 125 2366 136 1353 1013 -91 48 105 1013 105 50 136 11 15 13 45 284 659 17.8 593 16.0 : 16.5 611 2C06 131 2496 154 1507 990 -68 51 111 1018 105 50 154 11 15 14 48 303 700 18.9 637 17.2 l 17.8 658 2007 137 2634 176 1683 951 -39 53 118 1014 105 50 176 12 14 15 51 322 745 20.1 683 18.4 ! 18.6 691 2008 110 2744 201 1864 859 -2 43 125 970 100 47 201 13 13 16 54 343 786 21.2 726 19.6 1 19.9 740 2009 88 2831 226 2110 '721 44 34 94 849 88 42 226 13 11 17 57 365 818 22.1 760 20.5. ; 21.2 78!

2010 70 2902 252 2362 540 101 27 62 695 72 34 252 14 8 19 60 ~B9 848-22.9 790 21.3 ! 22.5 831 2011 56 2958 284 2646 312 171 22 31 508 53 25 284 15 5 21 64 414 879 23.7 822 22.2 : 23.3 883

012 45 3003 357 3003 0 263 17 0 257 27 13 357 15 0 11 68 440 930 25.1 886 23.9 ! 25.3 937' 2013 176 2014 88 2015 88 2016 88 2017 88

.2018 __ . _ . _ _88______...__.__.___...___- .

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NATIONAL TRErD CASE 4 ear . Cap- Total kn. Accw Net Oe- Ma- Fuel Avg. Re- In- De- E ' o- Ik- Fuel O&M & FILGRIN TOTAL M i < - GFs M Rate' turn come pre- w - 71 cce Annua! Cost In- Cost  : Cast ital Plant 2e- ulated Plant fer- ter-Ad- Year pre- Depre- Year- red fals Base on Tax cia- ante Tax ets- Costs in cre- in  ; in Annual di- End cia- cia- End Tax Rate ttm sion- Cents w n- Cents : Cents Cost -

tion tion Base ing per tal per I per ttons

( in atllions of dollars ) hn (st i. )kW) I kW1 (mil.)

1987 150 846 24 176 670 -104 20 51 562 58 27 24 5 11 4 1 97 226 6.9 9 0.2 1 3.3 27 1988 62 908 28 204 704 -113 21 51 632 65 31 28 5 11 5 22 99 265 8.1 97 3.0 i  !.4 113 1989 68 976 31 235 741 -123 22 50 657 68 32 31 5 12 5 19 107 278 8.5 137 4.2 3.6 117 269 782 -132 23 50 686 71 34 34 5 12 5 19 120 299 9.1 165 5.0 3. 6 119 1990 75 1051 34 1991 82 1133 37 306 827 -141 24 50 719 74 35 37 6 13 5 19 125 315 9.6 187 5.7 ' : 4.2 136 1992 00 1223 42 348 875 -148 26 50 758 78 37 42 6 14 6 19 131 332 10.1 210 6.4 l 5.7 186 1993 94 1318 46 394 923 -155 27 54 803 B3 '9 46 6 14 6 21 138 353 10.8 236 7.2 l 6.1 200 1994 99 1417 51 445 971 -156 28 56 850 88 42 51 6 15 7 21 145 375 11.4 283 8.6 : 6.5 215 1995 104 1521 57 502 1019 -157 30 60 900 93 44 57 7 16 7 23 152 398 12.1 309 9.4 : 7.0 230 1996 109 1630 63 565 1065 -157 31 66 951 98 46 63 7 17 7 25 161 425 12.9 339 10.3 : 7.5 248 1997 115 1745 70 635 1109 -157 33 67 995 103 49 70 7 17 8 26 174 454 13.8 370 !!.3 l 8.2 268 713 1152 -157 34 75 1044 100 51 78 8 18 8 29 188 408 14.8 407 12.4 8.7 288 1998 121 1865 78 1999 127 1992 87 000 1192 -157 36 75 1083 112 53 87 8 18 9 29 204 519 15.8 441 13.4 1 9.6 314 2000 133 2125 97 897 1228 -156 38 B4 1127 117 55 97 9 19 9 32 219 557 16.9 481 14.6 1 10.3 340 2001 139 2264 108 1005 1259 -154 40 64 1159 120 57 100 9 20 10 32 236 591 18.0 518 15.8 1 11.0 362 2002 146 2411 121 1126 1284 -149 42 92 1196 124 58 121 9 19 11 35 254 631 19.2. 560 17.0 1 12.0 394 2003 154 2".64 136 1262 1302 -139 44 94 1224 126 60 136 10 20 11 36 272 671 20.4 602 18.3 1 12.7 417 2004 161 2726 154 1416 1310 -125 46 99 1249 129 61 154 10 20 12 38 292 716 21.8 649 19.8 ! 13.6 448 2005 170 2896 174 1590 1305 -106 48 105 1267 131 62 174 11 19 13 40 313 763 23.2 698 21.2 l 14.7 404 2006 178 3074 199 1790 1284 -80 51 til 1277 132 62 199 11 19 14 42 336 816 24.8 753 22.9 ! 15.8 519 2007 187 3261 230 2019 1241 -44 53 118 1275 132 62 230 12 18 15 45 359 873 26.5 811 24.7 1 16.5 541 2008 150 3410 263 ' 2282 1128 2 43 125 1223 126 60 263 16 16 47 385 926 28.2 866-26.3 I 17.6 578 2009 120 3530 297 2579 950 61 34 94 1080 112 53 297 14' 17 50 411 967 29.4 909 27.6 18.6 612 2010 96 3625 33! 2912 713 135 27 62 890 92 44 333 -.* 11 19 53 440 1004 30.6 ?47 28.8 l 19.7 648 2011 77 3702 376 3288 414 '27 22 31 655 68 32 !76 15 6 21 56 470 1043 31.7 086 30.0 l 20.9 688 2012 61 3763 475 3763 0 346 17 0 333 14 16 475 15 0 11 o0 501 1113 '33.9

• 1069 32.5 ; 22.2 731

- 201 2013 100 2014 100

_.2015 -

100 2016 2017 100 100 2018 i

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tia- Fuel Avg. Fe- In- De- In- Lo- De- Fuel DM (- PILSRit! TOTAL -)  ; :- Ofs ~ '

e Cao- Total Ann. Accue- Net De-Ital Plant De- ulated Plant fer- ter- Rate turn ceae pre- sur- cal. com Mnua1 Cost in- Cost l Cost M- Year pre- Depre- Year- red tais Base on Tax cia- ante Tax mis- Costs in cre- in in Annea.

di- End cla- cia- End Tax Rate tion sion- Cents een- Cents l Cents Cos:

tions tien tion Base ing per tal per i per

( in aillions of dollars } kwh (eil.)kWt  ! kwh lail.

37 150 646 24 176 670 -104 20 51 562 58 27 24 5 11 4 1 97 226 7.7 8 0.3 : 3.3 24 G 66 912 28 205 708 -113 21 51 634 65 31 28 5 11 5 19 79 263 9.0 . ?5 3.3 l 3.3 99 3 89 73 985 31 236 750 -123 22 50 663 69 32 31 5 12 5 17 107 277 9.4 136 4.6 3.5 102 "C0 80 1066 34 270 796 -132 23 50 697 72 34 34 5 13 5 17 120 200 10.2 165 5.6 3.4 10i di 88 1154 38 308 846 -142 24 50 734 76 36 38 6 13 5 17 125 316 10.8 188 6.4 l 4.0 118 02 97 1251 43 351 000 -149 26 50 778 80 38 43 6 14 6 17 131 335 11.4 213 7.2 5.7 1l 7

'3 106 1356 48 398 958 -156 27 54 830 86 41 48 6 15 6 18 138 357 12.2 240 8.2 '

6.0 177 W 116 1472 53 452 1020 -159 28 56 888 92 43 53 6 16 7 19 146 382 13.0 290 9.9 6.4 IS7 43 126 1598 60 512 1086 -160 30 60 953 99 47 60 7 17 7 20 159 415 14.2 326 11.1 6.8 199 iN6 138 1734 68 580 1156 -161 31 66 1024 106 50 68 7 18 7 22 173 452 15.4 366 12.5 7.2 '10

' N7 150 1886 77 657 1229 -162 33 67 1092 113 53 77 7 19 8 23 189 489 16.7 405 13.8 : 7.6  :"!

^*8 107 2043 87 744 1299 -164 34 75 1167 121 57 87 8 20 8 26 26 532 18.1 451 15.4 : 8.0 236 M9 165 2209 99 843 1366 -165 26 75 1230 127 60 99 8 21 9 26 223 572 19.5 494 16.8 l 8.5 250

^ YJ 174 2382 !!2 954 1428 -165 38 84 1298 134 63 112 9 22 9 29 241 619 21.1 543 18.5 ! 9.1 264

";l 182 2565 127 1081 1484 -164 40 84 1352 140 66 127 9 23 10 29 260 663 22.6 590 20.1 l 9.5 2H.

W2 191 2756 144 1225 1532 -160 42 92 1410 146 69 144 9 23 !! 31 280 713 24.3 642 21.9 l 10.1 29) m 201 2957 163 1388 1569 -150 44 94 1457 151 71 163 10 23 11 32 302 763 26.0 695 23.7 i 10.7 314

}:4 211 3168 186 1574 1594 -135 46 99 1499 155 73 186 to 24 12 34 325 Bl? 27.9 753 25.6 ! 11.3 332 F 5 222 3390 21 3 1787 1603 -113 48 105 1532 158 75 213 11 23 13 36 349 878 29.9 813 27.7 ! 12.0 352 M 6 233 3623 244 20I3 1590 83 51 111 1553 161 76 246 !! 23 14 '8 375 944 32.2 881 30.0 1 12.7 373

007 244 3867 285 2318 1549 -41 53 118 1557 161 76 285 12 22 15 40 403 1014 34.6 952 32.5 l 13.1 3U

% 3 195 4062 329 2647 1415 15 43 125 1500 155 73 329 13 19 16 42 432 1080 36.8 1020 34.8 1 13.9 407

• J9 156 4219 373 3021 1198 88 34 94 1335 138 65 373 13 17 17 45. 463 1133 38.6 1074 36.6 14.6 4W 010 '25 4344 420 3441 903 178 27 62 1108 115 54 420 14 13 19 48 496 1179 40.2 1121 38.2 1 15.5 43 311 100 4444 476 3917 527 292 22 31 822 85 40 476 15 7 21 50 531 1226 41.8 1169 39.8 ! 16.5 '53 Gl? 80 4524 607 4524 0 444 17 0 421 44 21 607 15 0 11 54 568 1318 44.9 1274 43.4 17.5 5!

N!! 227

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414 114 t*5 ,

114 016 114

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t . - . . . - - .

$ i i

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. . :. ; ':..,',..:sncin A 1.c's.g2!cas and Methods Cn:i!:i Ad:':Jons:

9.!iC.C; Esc.-Ation of e , proximately .5 percent per year, after adjusting for inflation, from about $30 mil. ,

'ioa per :.w.r 0905 constar.t ciollars). Declines by 23 percent a year over last Gye years of plant's life.

OrtMt: Liacar growth at S2.5 rdIlion per year for five years to approximately 550 million per year (19 % do:lers), fo" owed by same escalation and decline as BECO. Derived from linear regression of Pilgrim hi;torical e:=:ri:nce between 1973 and 1976, treating the four years with expenditures significant.

ly above de trend line as one-time expenditures which will not recur.

.'!-'! nl Trend; Linear growth at $3.2 million per year for five years to $69 million per year (1986 $), fol-low:d by sate pctiern as BECO. Derived from ESRG multi-variate regression equation applied to Pilgrim.

?5;&~ Tre-A Linear g-ov.s et $3.5 million per year for 10 years to 592 million per year year (1986$), followed by same p:.: tern as BECO. Derived from linear regression, excluding two largest outliers.

Plant in Service Year End:

Calcula:cd as in BECO Er.hibit 1.

= Capital Additions + Prior Total Plant Year End Armual Depr:ciation:

= (Half of Year's Capital Additions + Prior Year Net Plant) / Remammg Life Defernd Texca:

Calen!>ted cs in BECO Exhibit 2.

Prior Year Accumulated Deferred Taxes + (Tax Rate x (Year's Tax Depreciation - Year's Book Dei teciati~-))

Year's Tax D:preciation calculated as in BECO Exhibit 2 (150% Double Declining Balance).

Materir.!s & Sctplier:

Frca DECO Exhibit 1.

Nuchar Fuelin Rate Base:  !

Frem BECO Edibit 1. l

. . . . . . - . - . _ . - . . . . . _ - - . - . . .. - -- l Averae Rate Base Calculated as in BECO Exhibit 1. 1 I

= N : plant Year End + Deferred Taxes + Materials & Supplies -.- Nuclear Fuelin Rate Base - Half of Year's Capital Adddans Return on Rata Base:

Ca'culated as in BECO Exhibit 1.

~

= Average Rate Dase x 10338%

1 I

M M

t E

Incorne Taxes:

Calculated as in BECO Exhibit 1.

= Average Rate Base x 4.89%

Insurance From BECO Exhibit 1.

Local Taxes Calculated as in BECO Exhibit 1.

= Average Rate Base x 13%

Decommissioning contribution:

P.om BECO Exhibit 1.

]

Sinking fund to accumulate $126 million (19863) by 2012.

l Fuel- '

Calculated from BECO Exhibit 1. i BECO's annual fuel estimate adjusted by ratio of assumed capacity factor to BECO's assumed capacity )

factor of 70%. l O&M Costs:

BECO: 0.5% per year from 1990 1 Ontimistie- 2% real growth from year when BECO projection crosses National Trend line.

Natinn21 Trend Same as BECO to 1990. Linear growth of $34 million per year thereaber (19865);

derived from ESRG equation applied to Pilgrim characteristics.

Pesemistie Same as BECO to 1990. Then linear growth of $4.4 million per year (19865) per year derived from linear regression of PBgrim historical O&M costs from 1973 to 1986.

Present value of O&M shutdown costs is included in present value of year 2012 O&M. Year 2013 O&M is assumed to be 40% of prior year: 20% for the five years thereafter. Based on BECO Exhibit 2.

+ ,

Annual Costs:

= Return + Income' Tax + Depreciation + Insurance + LocalTax + Decommusioning + Fuel +

O&M Costs in Cents per Kwh:

= Annual Cost / Annual Generation Annual Generation = Capacity (670000 Kw] x 8760 hours0.101 days <br />2.433 hours <br />0.0145 weeks <br />0.00333 months <br /> /yr. x Capacity Factor Capacity Factor:

BECO: 70,%

Ontimistim Average of seven BWRs between 400 - 799 Mw for 19771986

- 63.159 %

21 ht .

t f

', h  !

From North American Electric Reliability Council. Ecuinment Avnilability Renort 1075 - 19 %

National Trend:

56 percent; derived from ESRG regression equation for Pilgrim and equal to Pilgrim % lifetime capacity factor before its shutdown in April,1986.

j Pilcrim Trend- .

l 50 percent; Pilgrim's lifetime capacity factor as of October 1987.

Incrernental Costs:

Incremental cost comparison is BECO's preferred way of comparing future Pilgrim costs with alterna-tives. Comparing Pilgrim incremental costs (which subtract shutdown and sunk cost charges from Pilgrim total costs) to alternative costs is the same as comparing Pilgrim total costs to alternative costs plus shut-down and sunk cost charges.

As in BECO Fxhibit 2

= Annual Cost Cost of service on sunk costs Cost of service on sunk costs includes return and depreciation (amortization) on sunk costs as of end of l 1987 (846 million); plus O&M costs of $40 million in 1988 and $20 million per year in 1989 1993; plus in-( surance of $23 million per year 19881993; plus 7toperty taxes declining from $9 million in 1988 to $1 mil-

! lion in 1993 and thereafter; plus decomnussiom n. In BECO Case, $50 million in nuclear fuel and $20 l million in materials and supplies is included in sunk cost rate base.In MASSPIRG scenarios,it is assumed that 64% of the investment in fuel and supplies is sold to other utilities, and 3M'6 inch:ded in rate base.

l Replacement Power Costs:

Pilerim Trend Case-

= Average Award Group Bid; from John Whippen, Manager, Energy Resource Plannmg & Forecasting, Boston Edison, Letter to RFP Respondents, October 13,1987.

Natinnn! Trend ene

= Estimated average bid from next 764 Mw supply block after Award Group.

l

= RFP Ceiling Price -((RFP Ceiling Price - Average Award Group Bid) x ((Average Supply Block Ratepayer Benefit Score - 1) / (Average Award Group Ratepayer Benefit Score 1)))

The average Ratepayer Benefit Score of the Award Group was 131; the average Ratepayer Benefit Score of the next 764 Mw supply block was 1.22. Each year, the supply block price was assumed to capture 22f31 of the benefits of the award group, or 70.9% of the difference between therezhng price and the Award Group. ,

RFP Ceiling Price from John Whippen, Letter to RFP Recipient, February 19,1987.

Ratepayer Benefit Scores from Frank McCall, Letter, October ,1987.

Pilcrim Trend Case:

= Estimated average bid of the entire 1327 Mw of acceptable OFs not in the Award Group. Calculated as above. Average savings = 52.4% of Award Group.

Present Value:

The calculation of present value of a future cash stream discotmts future cash flows to reflect the time value of money. A dollar in hand today is worth more than a dollar next year, by the amount ofinterest that could be carned (or the interest payments that could be deferred) by having the dollar for the year's time.

Discount rate' = 10.55%, from BECO Exhibit 1.

22 s

I r 1,

' - ~ _ . , . .

c - ,

Appendix B MASSPIRG NUCLEAR COST ESTIMATES A. Capital additions measure national cost trends, this report uses equations developed by the Energy Systems Research Group Nuclear plants have required steadily (ESRG), a Boston- based consulting increasing capital additions in order to group that has studied nuclear costs for replace worn-out parts and meet new numerous state regulatory and con ,

safety standards. On average nuclear capi- sumer agencies around the county. '

tal additions have increased at 13 percent ESRG has analyzed nuclear cost trends a year since 1970, after adjusting for infla- using " multi-variate regression analysis

tion (Figure 14). Replacement of some -- a technique which relates changes in reactor parts, such as cracked pipes in nuclear costs to a number of factors Boiling Water Reactors (BWRs)like such as plant type, size, location.

Pilgrim, and steam generators in Pres- vintage fin-service date), and year of surized Water Reactors (PWRs), have re- operation.

quired as much as $100 million or mor per plant. In general, plants with Pilgrim's characteristics have experienced far Pilgrim cost trends were analyzed by a greater capital additions than the na-statistical technique called " linear regres- tional average. BWR capitai additions ,

sion analysis." An equation was deter- have escalated faster than at PWRs, for mined for the straight line that best fits instance, and salt-water cooled plants, Pilgrim's historical cost pattern, after ad- like Pilgrim, have experienced more justing for the effects of inflation. To capital additions than fresh-water Figure 14 F~mura 15 NATIONAL AVERAGE CAPITAL ADDITIONS PILGRIM & NAT. AVG. CAPITAL ADDITIONS 50Constant 1986 Dollars per Kilowatt 280 Constant 1986 Dollars per Kw 45' 260. y 240. t 40- 220.

35~ 200. "

~

30.

• 1804 r! - - - -

Il 160]

25~

20,

/ b"I i 140 120 3

?

,f I j I

/

l l 100.  !\ l \'

15-l $ l \j k\  ;

10) 7^q'  ; 40j ,

/ , 4/j S j 0' t l 20q O.

g

- M Vl 1974 is76 isB2 -20'i i986 i974 is76 1982 1986 Year

. National Average Pilgrim Year il o . National Avg. __ ESRG Regression I

23

}

Figure 16 CAPITAL ADDITIONS PROJECTIONS 180 Constant 1986 Dollars 170 _ T 160 _ }

• 150 _ -

140 _

130 _

• 120 _

- Pi$trn Histonce 90 _

80 _

70 ~

fa *' ad "*ad 60 j 50 .J 40 _ 3 nionm opemistic R o W BECo 0 . <

-101973 iV is/7 is6i i960 1969 1983 i997 2001 20Vo 2009 Year a Pilgrim Historical cooled plants. ESRG's regression analysis tions over the period of 1972 to 1986 has found that capital additions are re- were 3.3 times the national average per lated to plant size, type, cooling water, kilowatt, and considerably higher than age, year of initial operation, and whether the regressionline forplants of the a plant has one or two units at a site. same characteristics (Figure 15)-'

Capital additions at the Pilgrim plant Figure 16 displays alternative projec-have been among the highest of any U.S. tions of future Pilgrim capital addi-nuclear plant. Total Pilgrim capital addi- tions. Except for one moderately Figure 17 CUMULATIVE SAVINGS FROM RETIRING PILG.

Sonsstivity to Capital Additions 200

. . . 100 :-

-- - - - -. - . . . _ - . - . . _ . -  :. 2.

-100 _ -

Qc -

-200 _  %

1

-300 ~ .;

-400 _ .

-500 _, .

Goa 00 20vu 2ue 2v06 2012 1966 is2 is9t> ,

BECO Opt. N rend . P0g. Trend c, _ .

24 i

expensive sepair pic .r.ea for 390. . rate for five years. The Pilgrim Tremi Edison forecasts several years oi declin. case assumes that capital additions con-ing real expenses for capital additions, fol- tinue at their historic rate (with 1984 lowed by a steady outlay of less than $30 and 1987 additions still defined as non-million a year through the year 2007. recurring costs) for 10 years.

Capital additions are estimated to decline Figure 17 illustrates the effect of by 20 percent per year over the last five changing only the assumption about fu-years of the plant's life. Even Boston ture capital additions, holding all other Edison appears to have little confidence

, BECO assumptions the same.If m its capital additions estimates. Pilgrim capital additions were to follow however: the NationalTrend (an improvement We have provided a reasonable es- from the historical performance of the timate of Pilgrim's costs for the next plant), it would cost ratepayers very lit-25 years. However, as you know, many tie to retire the plant, even assuming factors external to the company, such full payment of Pilgrim sunk costs, in-as NRC mandated modifications, eqn cluding a profit, significantly impact Pilgrim's costa."

B. Operation and maintenance MASSPIRG's optimistic projection of costs Pilgrim capital additions starts with the as-sumption that the four years with the highest capital additions (1980,1982, nuc ar cap us, opera-1984,1987) were caused by unique events tion and maintenance (O&M) costs

-such as the replacement of cracked have also been increasing over time, at recirculation pipes in 1984 - which will not recur. The remnining years still show ""***'"E"#*** f 114 Percent a year for the nuclear m. dustry as a whole. At a consistent underlying pattern of capital Pilgrim, total O&M costs have in-additions increases which is likely to per-sist into the future. To be ultra- conserva. Figure 18 tive, the Optimistic Case here assumes PILORIM VS. NATIONAL AVG. O&M COSTS that this trend continues only for another five years. Capital additions are also con- 140, Constant 1986 Dollars per Kw servatively assumed to decrease over the 130. T 120.

1:ist five years of the plant's life, even / '

though other utilities have testified that a higher rate of capital additions may be

~

90 needed to keep them running-(See-Ap - g ----- - ~ ~~

pendix B.) Edison's estimate for 1990 70 capital additions is assumed to represent 60 #

a particular planned expenditure which is included in MASSPIRG's Optimistic 50.

40.

/ j/ /

Case as well. 30. . j The NationalTrend Case assumes that ~j' M -

2

. Pilgrim's rate of capital additions declines to the level described by the ESRG 0 / 1974 is75 ic h regression equation, and continues at that kvg._. ESRG Regression

, Pilgrim . Natio 25 S

_ _.t.

Figure 19 O&M COST PROJECTIONS cr. Million Constant 1986 S

5$ q m

?) ,/ yaonal Trena Pilgnm Hs np / %gnm optimiste (f:l:;; 5

/

j

/ BEco I-

1. 1978 1983 1988 1993 1998 2003 2008 19r/3

, HNo"rical creased at an annual rate of 13.8 percent, Not surprisingly, O&M cost in-after inflation. Total Pilgrim O&M expen- creases are correlated with many of the ditures between 1972 and 1986 have ex- same variables as capital additions --

ceeded the national average per kilowatt plant size, age, number of units at a by 78 percent. Pilgrim O&M expenses site, and salt-water cooling. After the were less than the regression line for Three Mile Island Accident in 1979, plants with Pilgrim's characteristics until O&M costs increased at all plants by an 1983, however (Figure 18). Figure 18 sug- average of $8.55 per kilowatt. In addi-gests that management decisions to defer tion, plants located in the northeast maintenance in the early years of Pilgrim have had O&M costs averaging about operation may have contributed to some $8 per kilowatt above plants in other of the plant's later problems, regions.

Figure 20 CUMULATIVE SAVINGSfROM RETIRING PILG.

O Sensitivity to O&M Costs I l

-100 _

N"x N ^

-500 _ y 600 _

-700 20C0 2004 2005- 2$12 1988 1992 1998 2 BECO _ Opt. . daYfrend , Pilg. Trend 126 s

. Figure 21 i)ilige in consmm dollars. Incr aung :a I

HISTORICAL CAPACITY FACTORS only 0.5 percent per year.

1.00 Percent ,

The MASSPIRG Optimistic Case 0.90. I projects O&M costs increasing at only 0.80.  ! two percent a year, after adjusting for

'a inflation, after 1994.The National 0.70

\ /}  !\

Trend and Pilgrim Trend cases assume x \ /( l 0.60 a h that O&M costs eventually resume 1 0.50 ) \ / their historical pattern of increase.

0.40i 0.30. g Figure 20 displays the effect of 0.20. changing only the O&M assumption on 0.10 f:k

,g' \j cumulative savings from retiring Pilgrim. While significant, the overall 0.0g9.,-

.' N-imPactis not as large as that from o Pilgrim Yedr" National Avg.

changing capital additions assumptions.

Alternative projections of O&M costs C. Capacity f actor are shown in Figure 19. Edison projects substantialincreases in O&M costs over the next several years, compared to both The best measure of nuclear plant Pilgrim and national trends. A portion of performance is capacity factor -- rough-the near-term O&M costs also includes ly, the percentage of time a plant is in-replacement power costs during extended service at full power.The capacity Pilgrim shutdowns that customers are ex- factor of a given plant reflects periods pected to pay over severalyears.25 After that it is shut down for refueling, main-1990, however, BECO projects that real tenance and repair. It also accounts for O&M costs, like capital additions, will sta- times when plants may be forced to Figure 22 CAPACITY FACTOR PROJECTIONS 1.00 0.90 _. , gg o 0.80 _ 7 0.70 _ \

_ g, 0.M _ f \ [,\ a j Nationai Trend ca6.

0.50 ./ T+ ~

0.40 \

0.30 - -

f O.20 I /

) ESAG Regremon Une ,

0.10 _: f l lum isis ww woo iwa iwo <.wd cwu Year a 2-Year Rolling Avg.

27

't

( -

{  ?

i

operate at reduced power levels. the Pilgrim plant, aseraged fi3,l' pet.

cent between 1976 and 1986.2 Capacity factors of individual nuclear plants tend to vary a great deal from year ESRG's regression analysis to year, partictdarly since most plants are describes capacity factor as a function refueled every other year, and may be of plant size, general type, type of cool-taken out of service for several months ing water and steam system, and plant during that time. Across the entire in- age. It shows that nuclear plants have .

dustry, however, nuclear capacity factors generally tended to increase capacity have tended to average consistently just factors over their first four yean of l under 60 percent." Pilgrim's lifetime operation, and experience only slight capacity factor to date is only 50 percent, gains in performance over the sab-At the point it was shut down in April, sequent eight years. Reactors tint are 1986, the plant had averaged a capacity cooled with salt water, like Pilgrim, factor of 56 percent (Figure 21). have tended to decline in perfonnance

""A Y

• I' Some varieties of nuclear plants have averaged better performance than others. Figure 22 illustrates ESRG's tegres.

Between 1975 and 1985, for example, sion equation forecast for a plant of Pressurized Water Reactors (PWRs) Pilgrim's characteristics, and the averaged capacity factors of 60.8 percent, capacity factor projections used in the compared to only 56.6 percent for Boiling three alternative Pilgrim cost sce;iarios. l Water Reactors (BWRs)like Pilgrim. A two-year rolling average of Pilgrim's Smaller plants, however, have generally historical capacity factor is also shown. l' achieved higher capacity factors than Averaging each year's capacity factor larger plants. Capacity factors of BWRs with the previous year's helps to between 400 Mw and 799 Mw, excluding smooth out the year-to-year ups and Figure 23 CUMULATIVE SAVINGS FROM RETIRING PILG.

SensitMty to Capacity Factor 200

" ~ ~

~

100 _

O Ke e-

~

- - 7 00 i

200 ~  %,.  %

4 00 - N N

-400 _

M- .

m .

600 -  %

-700 zuu4 zuuu zd12 Ivus 1992 iwo zuuu Year Opt. Nat. Trend Pilg, Trend BECO . o 3 r

)

downs in capacity factor caused by refuel- assume that the declimng prformance ing shutdowns every other year, of salt-water cooled reactors shown by  :

ESRCs regression equadon wm not l Boston Edison assumes that Pilgrim mndme. l will operate at a 70 percent capacity fac-tor over the remainder ofits life. Most of the costs of owning and Pilgrim's lifetime capacity factor of 50 operating a nuclear plant are " fixed percent ranks 79th among 94 nuclear costs"which do not vary with how much i plants.'8The probability of Pilgrim electricity the plant actually produces 1 moving from the bottom fifth to well .in a given year. The mtal cost of operat- l above the average capacity factor is quite ing Pilgrim over the next 25 years there- I low, particularly in light of the trend of fore does not vary much with capacity declining ca.pacity factors in salt-water factor. A lower capacity factor means cooled reactors, that more energy would have to be pur-c sed to repjace Ngnm, howner, A 63.2 percent capacity factor - the na-and means a c 3her cost for each Kwh tional average for small BWRs excluding generated by Pilgrim.

Pilgrim-is used in MASSPIRG's Op- Figure 23 illustrates the impact of timistic Case. A 56 percent capacity factor C Padty factor m the econoscs of

-- equal to Pilgrim's performance before retirmg Pilgrim. Even if Pilgrim were the 1986 shutdown and the peak capacity ble to maintain the 56 percent factor predicted by the regression equa- C Pacity factor it achieved before its tion -is used in the National Trend Case. ,

April 1986 shutdown,it would save Finally, the PilgrimTrend case assumes ratepayers muey thmugMe year that the plant will continue to average a 2003 to retire the plant, evenif all 50 percent capacity factor over tne rest of other BECO assumptions hold. ,

its life. These estimates all conservatively i e

- - = = - - + . - ~ + - . - -...--%,.. .., ,, _ . _

h a

29 i

+ , .

Appendix C .

Causes of Nuclear Cost Escalation 4 The continuing existence of the factors resolved only 208 of 482 totalissues .

that have contributed to past escalation of identified through that time. Moreover, nuclear capital additions and operations new issues were being identified at the .

and maintenance costs make it likely that rate of 11 per year, while the agency's '

those expenses will continue to escalate at schedule called for the resolution of historic rates for the foreseeable future. only 12 totalissues per year. As of The forces driving'the cost escalation in- August, 1987,163 issues remained on .

clude the persistence of unresolved safety the unresolved issues list.30 )

issues, ongoing technical problems that New generic issues are likely to be i

are discovered as the nuclear industry discovered as a result of operatmg ex-gains more operating experience, and the Perience, particularly as reactors age.

aging of reactor components. In addition The possibility of additional major to increasing costs, premature aging nuclear accidents also contributes to problems also cast serious doubt on the likelihood of new regulations.The whether the Pilgrim plant could be NRC staff has estimated that the prob-operated for a 40-year lifetime, as Bostoil ability of a full core melt accident at a

< Edison projects. 119. nuclear plant may be as high as 45 mt during the next 20 years.31

1. Unresolved generic safety issues. . ,

O_tMr analysts have estimated the prob-  ;

abihty to be higher. j The Nuclear Regulatory Commission One unresolved safety problem that maintains a list of unresolved safety issdes is of particular concern to Pilgrim is the . ,

which are generic to nuclear power reac- ' strength of the containment shellwhich tors. As these issues are resolved, they fre- is designed to prevent release of radfoactiv~e~inat~eriillsT6 the envirottr-- - - - ~

._ quently require significant new eipenses to implement them. ment in the event of an accident. An NRC task force has estimated that the .

Before the 1979 accident at Three Probability of failure of the Mark I con-Mile Island (TMI), the NRC had resolved taimnem desgn usW Ngn,m and 20 of 142 issues identified in its 1978 Task ther U.S. plants may be as high as 90 Action Plan, according to a 1984 General Accounting Office report." The TMI ac. Percentin some accident scenanos. ,

mmPared to a failure probabihty of cident added many new issues to the .

about 10 percent with other contain-Comun.ssion

. . ,s list, and postponed action ment designs.32 -

on many of the previously identified problems. By July 1984, the agency had 3

u t ,

' f- , _ - . . . _ _ . , ,, ._ , . - -

Another commission tasx force is cur- A discussea :n :ne n eisn er rently studying the Mark I problem, but is cooling systems a; reactocs tocatec ca not expected to make reconunendations oceans. such as Pilgrim, have been as-for more than a year.There is a substan- sociated with more corrosion than tial probability that fixing the Mark I con- fresh-water systems, in addition, the tainment problem willimpose costs Pilgrim plant has been subject to much exceeding current BECO estimates. higher levels of radiation contamina-tion that many other nuclear plants.

2. Ongoing technical problems. The average Pilgrim worker was ex-posed to 1949 rems a year between 1984 and 1986, compared to 645 rems There is persistent evidence that per year at Millstone 1, in Connecticut, nuclear technology has not yet " matured," a plant the same type and about the and that reactor operation will continue same age as Pil@35 to be plagued with safety- related and non-safety related problems that reduce 4. Nuclear plant litetimes, capacity factor and require new O&M and capital additions expenditures to fix.

The number of Licensee Event Reports In addition to causing increasing (LERs)-which document mishaps at costs for replacement of parts and nuclear plants - has steadily increased. In operation and maintenance expenses, 1986, there were 2,957 LERs filed with reactor aging casts serious doubt on the the NRC, approximately the same as the ability of nuclear plants to operate for record 2,997 LERs for 1985, and well the 40 year period assumed by Edison above the 2,435 LERs reported in 1984.33 in its evaluation of Pilgrim economics.

Nuclear plant capacity factors have failed Boston Edison's operatinglicense to increase as the nuclear mdustry for Pilgrim currently expires in 2008, predicted they would as plants matured, after 35 years of operation.The utility has recently applied for an extension of

3. Aging of reactor components, its license to the year 2012. No license extensions for any nuclear plants have yet been considered or granted by the The need to replace worn plant com- NRC, however, and there is no way at ,

ponents and systems has greatly outpaced this time of predicting whether such ex-industry expectations. A 1984 NRC staff tensions will be granted in the future.

report identiSed 5,893 events in safety-re-

-lated systemsoccurring between-1969 and-- - - Niagara Mohawk Corporation, the.-

1982 (17 percent of all LERs) as age-re- chief owner and operator of the Nine lated. Additional aging problems have oc- Mile Point I nuclear plant. requested curred in non- safety-related systems. permission from the New York State Agingproblems have been caused by Public Service Commission to use a wear and tear, corrosion, internal and ex- depreciation life of the plant that is five

- ternal radiation contamination, contact, years shoner than the plant's operating

. vibration, stress corrosion, erosion, and a * !! cense:

, category of miscellaneous problems." Recognizing the regulatory pres-sures from the Nuclear Regulatory 31 y

Conunission. relicensing should not tures would not increase in real terms be assumed. If it should happen that it over the entire last 25 years of the is possible to relicense the plant, the plant's projected life, and would capital expenditures required would decrease at 20 percent per year over be of such a magnitude that the unit, the last five years. ,

for depreciation purposes, should be To date, no commercial nuclear plant considered as being new at that has yet operated for longer than 27 ,,

tiue? years (Table 4), and a significant num-

. . ber of reactors have been retired with Niagara Mohawk,s testimony, in addi-

. . . considerably fewer years of operation.

tion to contradictmg BECO,s assumption of relicensing, also contradicts Edison's (Table 5) assumption that capital additions expendi-m .c. :i

' .l

[.Tabli420LDESTUNOPERATINGNUCLEAR'REACTORSit _

LPlanti: [IAation e [laitial;[ Age!:;Cafpacityx n:s 7.y"" ._

8 Operneloa :

'}""  ;,3,;.

.. Malac . '*

• li

$1960, 2 M M854

• i! Big RocIfPsitj.:: s ;;:yja -

isSenOnofrrJ:!: 22::: tex 5 d[ MMK ChC .JAMpi. . ...

- 5 San Cisacate-CA1 w 31962hi:Sj

.J.1967:!.: k20 + *+.1450s -

175:i:: fiz -

~ ,,.,li.B=hNecks ..:,,,x. sqy.g=CEldninMeckl Crit  :!:!1967GA.i::m/6001 z.....

"$.:lDyster Creek. .. . .F""  :; 3:

?qforlisidRhe4NM 11969j:!181:CiijiS507.P" ~

fiiNinEMiliPointtif 45ScubelNY::t:.;"5 539s:s !W: "!642i d+i -

~"'.;;;;. f "' "5]i:y:7: ,.,.g.,  ?,, ..]:[ g:NYX 8 R:7 - M:::

. .,..,"" yresd @ d'MiC. "M ...

f $@Wni:;:.2 ' .

M .

,:.,,-: $1970) i:,TI:/1969i(iiil8;!  ; OD~3.794lli

~ ?RobinsoW2i" 4:M3!aE*rv;;;Hartsville;SC 4  :;1MOL:?;m 17690  ;

ifoint:Beschfili -  :!Two Creeks,:WI) 51970;f17;i .

[485,)

" Millstonelli; " -

ii.Waterford,(CI t /:1970::- [172

. 1660?  ;

r L e _

m.....

. . r.:

"v w: -~

"7 -

f!Tabis52 RETIRED U.S/ REACTORS:::,

~ ~ .= _

.;;g: 2,b. _

~ ~ ~ ~ ~ ;^

~.

e ,ee . wNh- -5# ig- .. . . .. 'lT .

" " " ~

. MF - z!ggOgsationli? :1.Yeari! s,l

~2.4........

, ..,:..... ....: ,....:- . . . . . ~ . . .  :? ~. n. *\

Mhg hggd[ . . . . .} 979 - . . .f. {[}  %' '.] :l- .

?PathStiders - 91966 W i19673 119 iiW '

[Hallamlj# :::c: si::xj;1963E: 31961] iti; m{.256T

.l

?Piqua:s  !:;:19631 E1966; 3 2,.. 4 45i CVTR -:(i1963:f i:19673 T3 : ~ . -65 "

)

@BMsE '

- M964i, "19681 A4 l:.50 :'

4

s+;i:iiElkRiver -

l1963i9 i:1968 l 7 w f;22-

~ *

'.fennin :. _..... ,119665- t1W2i i6e '

f6Ly 4

. 3PeacliB6tiomf - -

911967N 5;19744 ?8:i- . s40:1 ,,

iN::lladian PoinOlk~ !s1962!:( ~ - ::019745 412 ' 7 265' s 21963s L-19764 3131 A'.

ifHanboldt Bay":c ..= -

65?:.

3.:Dresden&liiit 9 9601: 1978g i 19- U207l,

_ .g 32 ,

t i $

~

Notes

~

'A federal study estimated subsidies for research and development, mmmg and fuel enrichment at almost

$40 billion by 1981. (Joseph Bowrmg, " Federal subsidies to Nuclear Power,* unpublished report, Office of Economic Analysis, Energy Information Admmistration, March 1980. Another estimate af construction subsidies to nudear power plants runs as high as $15.6 billion for the year 1984 alone. (H. Richard Heede.

Richard E. Morgan, and Scott Ridley, ne Hidden Costs ofEnergy: How Taxpayers Subsidize Energy Development, Center for Renewable Resources, Washington, D.C., October,1985) 2 See Nuclear Waste Fee Adequacy: An Assessment, U.S. Department oi Energy, Office oiCivilian Radioac-tive Waste Management, DOE /RW 0020, June 1987, pp. 7-10; Commercial Nuclear Power: Prospects for the United States and the World, U.S. Department of Energy / Energy Information Administration, DOE /EIA-0438(86, p. 20);" Nuclear Power Plant Decommissioning: Cost Estimation for Power Planmng and Rat =WnS" Energy Systems Research Group, Boston, July,1987.

3 Charles Komanoff, Power Plant Cost Escalation, Komanoff Energy Assoczates, New York,1981.

4 David Schhssel Trends for Nuclear Capital Additions and O&M Costs," Direct Testimony Before the Public Service Commission of the State of Missouri Appearmg for the Office of the Public Counsel, Case No. ER-85-128, Case No. EO-85-185, June 28,1985.

Nuclear Plant Cancellations: Causes, Costs and Consequences, U.S. Department of EnergyiEnergy lufor-mation Admmistration, DOE /EIA-0392, April 1983.

'Schhssel, op. cit.

' Richard HeIlman and Caroline J.C. Hellm an. De Competitive Economics of Nuclear and CoalPower, Lenngton Books: Toronto,1983.

sRichard McCormack, " Whoops!" Energy Daily, April 23,1986, p.1

' Joseph Kriesberg, Nuclear Power Too Cartly to Continue. Drnft critical Mau Enerev Proiect.

Washienn D.C November 1987 10 lbid., from U.S. Department of Energy communication.

"Schhssel, op. cit.

12 William Blundell,

• Doubts Pervade Nuclear Fuel lndustry: Utility Pacts Unclear; Uranium Producers Ailing," The Wall Street /oumal, October 10,1985; Kennedy Maize, "Domenici s Uranium Bill Would Trim imports to 50 Percent of U.S. Needs," ne Energy Daily, February 20,1986.

" Power to Spare: A Plan forIncreasing New England's Competitiveness nrough Energy Efficiency, New

• Enghnd Energy Policy Council, J uly 1987. -

"FinalReport of the Boston Edison Review Panel. March 1%7.

~

~ ~ l'NEPOQCForecast Repoit ofCapacin(Energy, Loadiand Tmnsmission 1987; 2002, New England Power Pool, West Springfield, MA, April 1,1987.

Boston Edison,Requestfor Propasalsfrom Qualifying Cogeneration and Small Power Production Facilities, Appendh C, Erhibit 4, p.18.

op. cit.

'*FinalRepon: Asset Duposal and Contract Settlement Associated With Pilgnm 2 Cancellation, Boston Edison Company, Report #10, May,1987.

"Westem Massachuseus Electne Company, D.P.U. 84-25.

• Western Massachusetts Electric Company, D.P.U.85-270

• 'NuclearPlant Cancellations, op. cit, 1

l l

33

't

(

) i

. i

A U Harvey Salgo, Raymond Czahar, and Paul Raskin. ' Proposal of the Executive Of fice of Energy Resour.

ces, D.P.U. 2o-36, April 4,1986.

23 Equations for this study were taken from the Testimony of Stephen Bernow on " Excess Capacity and Cost Benefit Analysis of Vogile Generating Station" on behalf of the Georgia Office of Consumers' Utility Counsel before the Georgia Public Senice Commission, Docket No. 3673-U, August,1987. ,

" Carl Gustin, Vice President, Corporate Relations, Boston Edison, Letter to Sharon Pollard, Secreatu

• of Energy Resources Commonwealth of Massachusetts, June 8,1987. Also referred to as Exhibit 1. Ex-

• hibit 2 is Carl Gustin letter of July 1,1987..

25 Gustin, personal communication, October 1987.

^

"ESRG; Equipment Availability Report 19761985, North American Electric Reliability Council, Prin-ceton, NJ.

2'1 bid.

28 From Monthly Operating Reports filed with the U.S. Nuclear Regulatory Commission, courtesy of Stephanie Murphy, Nuclear Information and Resource Service, Washington, D.C.

3* Management Weaknesses Affect Nuclear Regulatory Commission Efforts to Address Safety Issues Common to Nuclear Power Plants," General Accounting Office, GAO/RCED-8419, September 19, 1984).

30" Efforts to Ensure Nuclear Power Plant :'aiety Can Be Strengthened," General Accounting Office, GAO/RCED47-141, August,1987. '

31 NRC Testimony to U.S. House of Represenatives, Subcommittee on Energy Conservation and Power, April 1986.

32 Brian Jordan, *Denton Urges Industry to Settle Doubts About Mark 1 Containment,* Inside N.R.C, June 9,1986, p.1.

33 Jc.shua Gordon,1986 Nuclear Power Safety Repon, Public Citizen, Washmgton, D.C., September 1987.

Nurvey of Operating Experience from LERs to Identify Aging Trr ,ds, Status Report," Nuclear Regulatory Commission, NUREG/CR 3543, January 1984.

" David Wessel, "Pilgrun and Millstone, Two Nuclear Plants, Have Disparate Fates," The Wall Street /our-nal, July 28,1987., p.1.

" John S. Ferguson, Prepared testimony on behalf of the Niagara Mohawk Power Corporation in New York Public Service Commission Case #28225, p. 27.

- - . . . - - - - . - - * .- -- + - . .

._....-.___-.n O

I l

1

-34 i.

i

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