ML20067C570
| ML20067C570 | |
| Person / Time | |
|---|---|
| Site: | South Texas  |
| Issue date: | 12/06/1982 |
| From: | Sinkin L Citizens Concerned About Nuclear Power, INC. |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| ISSUANCES-OL, NUDOCS 8212100125 | |
| Download: ML20067C570 (13) | |
Text
{{#Wiki_filter:. . . 1 DQ,H.EL. Er UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION gI DEC '9 No :46 BEFORE THE ATOMIC SAFETY AND LICE SING E0ARD L?! - In the Matter of ) ( CCil ',b RL::;.;,,'Q CH g l~ Houston Lighting and Power ) Docket Nos. 50-498 OL Company, et al. ( S0-499 OL (South Texas Project, ) Units 1 and 2) ( MOTION TO REOPEN THE RECORD The central issue in this proceeding is the character of Houston Lighting and Power Company (HLLP). A major inquiry of this issue is the nananerial performance of HL&P. Recently, the Texas Public Utility Commission (PUC) conducted hearings on an HL&P rate increase reauest. After the hearings, the hearing examiner ruled that:
-- HL&P should be penalized and recover'only $200' -
million of the $360 million HLLP invested in the now cancelled Allens Creek Nuclear Project because the long delay in the cancellation was " poor manage-ment,
-- HL&P's approach to the ,PUC regarding. recovery for Allen's Creek was " improper an'd imprudent,"
-- the evidence of HL&P mismanagement of the South Texas Nuclear Project was " inconclusive" but the -
charge should be investigated thoroughly when STNP is finished. See Attachments 1 and 2. Subsequently, the Commissioners accepted most of the hearing officer's recommendations and conclusions. But the Commissioners disagreed with the hearing officer and concluded that there was 8212100125 821206 PDR ADDCK 05000498 G PDR v503
sufficient evidence to find nismanagement of STNP. See.Attachement
- 3. The Chairman of the PUC found the " company needs a major change in it management direction." He further suggested that the changes begin with removing members of the Board of Directors.
Part of the financial conclusion by the Commission was a reduction of HLLP's return on equity as a penalty for mismanagement. , Finally, a member of the Commission noted that " repeatedly management has blamed someone else" for their own failures." The harsh criticism by the PUC is especially probative because the Commission is composed of people who regularly assess utility performance and, therefore, qualify as experts on this subj ect. Furthermore, the Texas Public Utility Commission is known nationally as very pro-utility. See Attachment 4. For this public utility connission to 'e so critical of HLLP is unusual and reflects how serious HL6P failures in management have been. Of particular importance to Citizens Concerned A5out Uuclear Power (CCAN") in the close relationship between the findings of the PUC and findings proposed by CCANP in this proceeding. Corporate performance anJ corporate responnibility are central to the character inquiry and to the CCANP Findings of Tact and Conclusions of Law. CCAMP Findings of Fact and Conclusions of Law focus on the s . role of the HL&P Board of Directors, the absence of substantive actions by the Board in reponse to poor corporate performance, and the absence of any changes in the Board by the stockholders.
See e.g. CCANP F0F 4.3-4.7, 5.23, 8.7-8.72, 8.74-8.76, 10.3.1-10.3.2. CCANP also stressed HL&P's failure to take responsibility for their corporate acts and tendency to blame others. See e.c. CCANP F0F 5.24-5.24.9, 6.7, 6.19. Given the special expertise of the PUC and the relevance of their findings and conclusions to the licencing inquiry being conducted by this Board, CCANP urges the Board to reopen the record to pernit taking of evidence regarding the PUC actions. The evidence available includes the hearing examiner's recommendations, the final order of the PUC, the transcript of the Commissioners discussion of their ruling in this docket, and possibly direct , testimony by the Commissioners themselves. For the above and foregoing reasons, CCANP noves the Board to reopen the record. Respectfully submitted , Lanny inkin Counsel for Intervenor Citizens Concerned About Muclear Power, Inc. 2207 D Nueces Austin, Texas 73703 (512) 478-3299 Dated: December 6, 1982
UNITED STATES OF AMERICA NUCLEAR ~ REGULATORT CO!D1ISSION DOCKETED . USH:I
- BEFORE T!IE ATOMIC SAFETY AND LICENSING EOA7:D Certificate of Service '82 EC -9 A10i47
. 4 ,- -
I hereby certify that copies of Citizens Concerned About - - Nuclear Power's MOTION TO REOPEN THE RECORD dated December 6, 1982 have been served on the following individuals and entities by deposit in the United States Mail, first class, postage prepaid, on this 6th day of December 1982. Charles Bechhoefer, Esq. William S. Jordan, Esq. Chief Administrative Judge Harmon and Weiss Atomic Safety and Licensing 1725 I Street, NW Board Panel Suite 506 U. S. Nuclear Regulatory Commission Washington, 2.C. 20006 Washington, D.C. 20555 Jack R. Newman, Esq. Dr. J ames C. Lamb, III Lowenstein, Newman, Reis & Administrative Judge Axelrad 313 Woodhaven Road 1025 Connecticut Avenue, NW Chapel Hill, NC 27514 Washington', D.C. 20036 Ernest E. Hill Jay M. Gutierrez, Esq Administrative Judge Office of the Executive ~ Lawrence Livermore Laboratory Legal D i r e c t o'r University of California U. S. Nuclear Regulatory P. O. Box 808, L-123 Commission Livermore, CA 94550 Washington, D.C. 20555 Mrs. Peggy Buchorn Atomic Safety and Licensing Board Executive Director U. S. Nuclear Regulatory Comm. Citizens for Equitable Washington, D.C. 10555 Utilities Route 1. Box 1684 Atomic Safety and Licensing Brazoria, Texas 77411 Apueal Board U. S. Nuclear Regul atory Comm. Brian Berwick, Esq. Washington, D.C. 20555 Assistant Attorney General for the State of Texas Docketing and Service Section Environmental Protection Office of the Secretary Division U. S. Nuclear Regulatory Comm. P.O. Box 12548 Capitol Station Washington, D.C. 20555 Austin, Texas 78711 Tom Hudson, Esquire % $ Haker and Botts LannpSinkin One Shell Pla::a Houston, Texas 77002
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.. Rep'o'rt a eges poor manag f
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]EHearing examiner bla ANNE MARIE KTLDAY j Chronicle Austin Bureau clear plants figure 51 prominently in her recommendations to the three member til cancellation of the plant in August.
When optimism over the Allens Creek commission, which will ma,ke a final deci- project waned. H1AP hired Energy Man-I s agement Associates in 1981 to re-evaluate t ing is Power sion on the case Nov. 30. USTIN - Houston While Ms. Wilhams said that evidence ' the project. That study concluded that Al-officials were of " poor man- sens Creek "has minimal economic bene-e ettment" of the Allens Creek whether Nuclear HlAP had -in the casethe"was mismanaged ioconclusive" fst when about compared to available
' Project. of having an " overly optimistic South Texas pro
- Ject under construction alternatives." and that "the construction
,'otdlout* on the South Texas Nuclear near Bay City, she was highly critical of and operation of Allens Creek would be i Pgoject aodaf-." improper and impru- filAP management decisions regarding more costly for HIAP ratepayers than .
the Allens Crnk project and of the con . would construction of coal and lignite ,, al-( debt" 1 actions in their $336 million rate uest befwy Jhe Texas Pubhc Utihty duct of the company in its $336 milhon / ternatives," Ms. Williams said in her re-~ Jnission.H i rate request. port to the PUC. Ms. Wilhams said thegnihes Creek
.' ' jn a report to the PUC Wednesday, HlAP mitiated plarg for-the Allens
' bdirme examina Angela Wilhams ree- Creek project, which was i to be' located plant should have beetiden~eeled in early oriamended that IHAP be "penahzed" about 45 miles southwest of Houston near 1980. when various natibnal nuclear is- Ch
} 8190 (rulhon en the Allens Creek Nuclear Walks m Austm County,in August 1972. sues were spotlighted and problems 5 ob-l Projet and that a $1.7 bilhon "ceihng" The plant was origmally planned as a 2- tainmg federal construction permits for pet p bey pliced on the utility's share of the umt. 2 400 megawatt plant. In September the project became evident.
Tesas Nuclear Project. in her report to the comrnission, Ms. to ! 1 Seth 1975. HIAP suspended plans for Allens Wilhams said. "When one takes into ac- ue:
. Wilhams, who presided over two Creek because of higher energy prices count the fact that from 1976 pro to 1979. ca be)ts ks o,f hearings on H1AP's request for and an unstable national economy. Plans tal co.ts for nuclear 'I plants con o 5336,milhon annual systemwide rate in- to construct one 1.200 megawatt imit at ity i
crease, recommended that the company's the site were reactivated in late 1976, and (See filAP, Page !H bat ride hike be hmited to $188 3 milhon. HIAP had proceeded with those plans uti anc
. The Allens Creek and South Texas nu- .. t . the
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7' ' . HL&P criticized for ' poor (From Page 1) " i sion on whether the plant would be can-celed "also improper and imprudent." escalate more rapidly than those for coal. Ahhough HlAP was "strongly recom-the safety regulations promulgated by the mendmg" that Ihe Allens Creek project NHC mereased substantially as a result be canceled. Ms Williams said. "The of the Three Mile Island incident. and company walked a fine line on Allens AUent Creek bacame StaHad at the Nu- Creek from the time this case was filed. clear Reputatory Commiunon m 1979 the Only when it was clear that its balancmg delay m cannuation can be characier- act was workmg to its disadvantage did neo as cseariv imrwonert Fmally. Illa P formally move to cancel. four days mM s oitliculties witn ihe south Texas before the hearmg There can be no argu. project should have been factored into its ment that in the testimony as prefiled. studies on Allens Creek ' representatives at the highest level of in its request for a $336 milhon rate HlAP management were at their equivo-luke. tilAP het sought to recover $362 cal best. merely recommending' cancel-milhon of its $388 milhon investment in lation
, Allens Creek m annual installments over "It was improper for this utihty to ap-the next decade HlAP officials had said proach its regulators awhether those reg-in prefiled testimony m the case that the ulators be the cities. staff. or this company would cancel the Allens Creek commissioni m the context of a rate case.
project only if the cities,and the PUC to test the waters' on uhat sort of mone-allowed the company to recover its m- tary treatment its management decision sestment m the project would receive before that decision was Ms Wilhams called the company's re- made." she said in her report. quest for recovery of its imestment in In her report Ms Wilhams said. "The
} Allens Creek, without announcing a dect- examiner beheves that the ratepayers
18 11
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s management' in report I sued HIAP for damages, "It can be et-should notde'ompensate HIAP for poor pected that a fair assessment of blame management performance in this in, aesociated with the project for the years stance. 1975 to 1981 will eventually be decided in "Ratepayers should not be burdened the courts." Ms. Williams said. with expenditures which were impru- llowever, Ms. Williams quoted one at.
' dently incurred because of manage- torney in the case who "so charmingly ment's deliberate attempt to avoid the put it, while it is true that not all of the facts concerning Allens Creek for over Problems that beset the HIAP system two years." can be laid at managemenrs door, the But Ms Williams said evidence in the time for HIAP to *put up' or ' shut up* has raw was "mennetusive" a5 o whether arrived."
THAP had mismanaged the 2outh Texas Ms. Williams said her recommendation Nuclear Protect that HIAP be limited to a $1.7 billion
~HL&P is managing partner and owns " ceiling" on the South Texas project "in-30 8 percent of the 2-unit,2.500 megawatt dicates some concern about management South Texas project, which is coowned ~ of STNP. The purpose of the ceilmg is to by Central Power and Light and the cities encourage managment to be more ef4i of San Antonio and Auste. I Austin voters cient." -
have directed the Austin City Council to _Because of a tnssibihtv that the seenne sell out of the project.I unit at the prolect "might be canceleda a
'fhe project's two units, which were Ms. wahiams also recommended that the_
originally scheduled to go into operation unhty commissmn order Han to notity_ in October 1980 and March 1982, had art ihe commissmn ot anv mtentmn to cancel original cost estimate of $14 billion. After lhe project withm six months of cancella-cost overruns and construction delays tion. plagued the plant, HIAP last year firedShe also recommended that the PUC Brown & Root Inc. as construction engi- order HIAP to pass through to its rate-neer and replaced the firm with Bechtel payers any amounts the courts may Power Corporation Bechtel now projects award HIAP in its lawsuit against Brown that the two units will ca.st 55.7 bilhon. & Root,and not allow HIAP to charge its and will go on ime in June 1987 and June ratepayers for any amounts the courts
& Root in its coun-1989.
"The word mismanagement has been' may award to Brown tersuit.
- hurled about in this seases indiscrimi.
nately. This is a senous charge, and one . which should be supported by substantial evxtence. On the issue of whether HlAP ln.l Unci.lon ISSUED IO halt did mismanage STNP, the evidence in newswoman,S Bdm.ire r this case is inconclusive, "The record shows that HIAP could SAN DIEGO, Calif. (UPI) ~ A woman have done a better job but whether the ~ who reads the news on television won a company was imprudent and culpably ne- permanent injunction in Superior Court glectful in its role as projectagainst uged an amorous viewer who has del-managercannot her with flowers, cardsbe andconcluded." tele- Ms. Wilha Ms. Williams said the question of blame for deficiencies in the Southphone Texas calls for more thanha-two years. Judge W project will be resolved in the lawsuitraim Aguilar of Chula Wsta to sto' now pending between HIAP and Brown & rassing and phoning Su'ie Woodruff.
' Root. Smee Brown & Root has counter- g 3
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, ,Q det, Post lastis Basene .w rd / g, * " .' *g woWd be only a few cents a month higher than31. a rise of 5.6 percent in HIAP adjusted operat-Ing revenues for a test year that ended March '
N;AUSITN - A TexaT Public Utility Commis. ' the interim rates already in effect.An HIAP of'icial said that, base hearing examiner Wednesday recom- November luel-adjustment charge and includ- But even though her revenue recommenda. Hnded 1Ashting & Powery ing frgochiss taxea g ththummertime bill for a tion was close to what the cities approved, JarhipuesC nanual. . res6dential c&stomer s'lth central air'condi. Wimama 1stt aHther,Houstoa e% le inesase, t three-mem tioning usizyf 2,000 kiloutts bours a tnonth. HIAP managers happy..Both probably - 1C alidr it i * '" . ( would have been $171.13 under the old rates, ' protest parts of her .ha.;iations when# r aml wej lam.-' compared 'aith an interim rate of $184.94 now the three PUC commissioners meet Nov. 30 to kr was <aff 5m higherthan the rats ,_ in effect. HlAP*s $336 million request would finaDy decide the rate case and set pennanent Q rates going into effect sometime in December.. ',{ a timrense vtg i the city of Houston and mon - have The bocsted the new rate to $193.42. wintertime bill for a 2,000 kilowatt. However, Mark Zeppa, PUC staff attorney ; ha 50 allisO cities la' the HIAP' territwy the'utfitty/and only$ milliotr hour using residence (typically one with dec- in the case, called W1111ams' report "wel}rea ,. tad to soned" and said he would suppxt it sasinsti , j"%c
'mee thaq t:6erty rate,,inesase the PUC tric heating) would be 3140.40 a month, com-te be lagffect.until a final pared with a $149.60 bill under the interim attacks from both sides.
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, rates now in e3ect and $151.38 that HIAP Williams displeased city ometals by re mm-y requested. mending that HIAP be allowed to start beco,. . . I
'. not * . The rate iderease WLIliams recommended,
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&,ttuf I giving HLAP about 56 percent of the addition- Please see PUC/page f7A Ic. .
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. ing lawsuit against Brown & Root,'Inc., the eusly consWer ordering seighboring From pa.ge 1 SMP mginer h h Sad, 2 money to e nisdng w new cummes b should be credited to ratepayers, Williams HIAP authorized service area, i said. P Houston Mayor Kathy Whitmire had vering from rateph.ers what it spent on its And if Brown & Root shodd ticover dam- praise and criticism for the hearing exa a herinned Allens Creek Nuclear Project. The ages from HIAP in the lawsuit, the eumlaer er's tTcommendation.
- cit %ss-argued thaptoos the awlmar project t said, HIAP shareholders -act ratepayers - "We are somewhat encouraged by the en amI=rt bedore'their rummr41m consid.,'. : =hm:1<t pick up ti.at bill. .-E : ..
no recovery of the in-es,-
- - . lag . . . although there are still several shonM *Bne urged the ce nmimina Io'erder'HIAP .: on which we enn=at agree," said Whi s eDowed in tids rate case..@ to give one year's notice uten it intends to She aald the city will contest some -
tut,$hewr=mhgar'cipervuled that matentiot.' wask the PUC to include the STNP in its rate *' amendations made by the exam ct4he same thne she atticiand HIAP for !? base, and to stve the PUC six months nati'* ' moves to the fuB Public Utility C- " natshaving $ and ' recommended canrwied.the that project
$HO million by January I before implementing "any substantial " Those objections Inchulp an alloweace forb a' changes associated with the project." now canceDed ADens Creek Nuclear Projait rpent on the project since then be disallowed. Williams did recommend that, as HIAP Ghe urged the PUC commissioners to let and a rate structure that the mayor said 'ex-requested,100 percent of the cost of constme- cessively burdens residential customers.
pnmet stepayeg only $200 mil p $on work in progress (CETP) and anelmaqtuel 9
$3Rt u-@ they seek toy "'Ibe total 5188 million is' te wha et,,*:
., in -process (NFIP) be included in thelcom- recommended at the Oty C
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pany's rate base. She said that is nemeury E the i Under her recommendation, recovery said. The City Council awarded H1AP ' P'to ensure the company's financial $181.5 million increase in base rates, a total . would ht," straight 3nly $20'ai!Ilion line" over inchwiad 14 years, in ratas with. jintegrity." kr the first - that the utility company appeared to the PUC. '
$he recommended a new, more stringent Craham Painter, H1AP public relatiites' ear. HLAP had requested the 53E! mmian be ' review of fuel costs for coal HIAP buys from manager, said company othetals had not had
) mortised in the rates over 10 years with creater amounts in the earlier years, startmg til!*y Fuels,Inc., a sister company with - time to study Wi1Zams* 100 page report, bgt j HIAP in Houston Industries Inc., a holding probably mill fDe exceptions to it by a Novt"tS ' th 3h0 mmtan this year. i geompany. She urged the commission to make , Wmtamm also urged the PUC raamiadan- HIAP file quarterly fuel costs for affniated deadline. p e $a mot to let HIAP earn a return for its "We were surprised at theamount (of - interests and have them approved by the PUC recommended rate increase)," Painter salg. ~ 1arehndws each year on the unamortized staff before they can be passed on to rate-boust si the ADeus Deck inveurment, as payers in the fuel-adjustment clause. "We felt we had documented the chaDenkes' RAP requested. Williams approved a cost.aBocation meth- we face in serving the most rapidly growtaig l And she said the PUC sawmitt give rate- part of the country." I-od that the PUC sta!!, HLAP and its industrial
- payers tl=e benefit of whatever money HIAP and commercial customers agreed to over ulvages by selling equipment and fuel or- oibjections of Houston and other cities in the 1
- lered tw the abandoned plant, ce stich coo- case. The cities objected that the method struction was never started. shifted several millions of dollars of the rate g.
l Dea!!ng with the controversial South Texas burden from industrial and commercial cus- n. . $uclear project, for which H1AP is managing toiners to residential ratepayers. But Wil- yU U d-
-{ -
artner, Ullnams urged the PUC to order a 11ams said the cities presented no evidence to
- 1 M W1 tion cedinJ on H1AP's share of the support the cost allocation plan they pre- . . . COrrtCliflg aft oft 0r:
- ro) set'd cost and put the utility on notice that ferred, wtdch was offered by HIAP in city k) ratepayers will not be made to pay for cost council bearings but withdraum by HIAP in
- verruns past that Ogure unless HIAP can the PUC i,,mdag.
vtm they are ' apt due to mismanagement. The States of ise Angle-Normas Wimame also rejected a three-tier rate Kalght, a lecture by Professer R. Allen l Williams ,took\ acte et many charges of plan proposed by the cities, which they said RAP mi-namapment of the long delayed Brown, King's College, University of would "ewn out" big differences in electric lendon, will be at 1 p.m. Friday in the ro)sct; whose cmst has eeratated from buts between winter and summer. She said George R. Brown Room, M.D. Anderson 1: estbeatm2 4 hmian to 35.5 billion, but the city plan was not " cost. based," would Library at the University of Houston kkieelderT as to mismanarment and who discourage rather than encourage conserva- Central Campus. This is one of a series of 4 0 hiamr b famnelusive acer. She urged tion of electricity, and would aggravate an tree lectures sponsored by the UH de-HIAP problem of peak. load t rrosth, partment of history. The lecture time and r + the [UC.bregatigste ns Reinhad and thatgivethcsoughly rase- HIAP should also be warned that if it in-wrs pmpar hhen. curs " abnormal outages" in providing power room were listed incorTeetly on page 2y< If HLAPshould Ammases % a peud- to customers in the future, the PUC will serl. of Sunday's Post. The Post regrets the error. ~ 7
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Austin American-Statesman a Wednesday, December L 1982 Regulators unleash attack on HL&P By BILL MCCANN ed a 0.5 of a percent penalty on re- problems, including delays in con- advisory group, said the state utility Amencen statesman steet turn on equity against the firm for structing the nuclear plant. HL&P is commission's . action reinforces the what Cowden termed poor managing partner for the project. argument that the city should sue. Critics who have accused the 58888' '"g-Houston Lighting & Power Co.of mis. The hearing record Indicates " Austin is not going to get the at-manag!ng the South Texas Nuclear The result is that a request made many instances of mismanagement, tention of HL&P untilit has a lawsuit Project got an unexpected boost in June by HL&P for a yearly in. Including delays in the South Texas in one hand to go along with.an offer > from the Texas Public Utility Com. crease of $336 million in revenues project and the recently canceled Al- to sell in the other," she said. d mission Tuesday. has been reduced to an estimated len's Creek nuclear project Cowden
$185 million. said. "But repeatedly management Fath was referring to Austin's al. b In slashing HI,AP's request for a tempt to sell its 16 percent share of rate Increase, commissioners ac. Examiner Angela Demerle Wil- has blamed someone else," he said, the controversial nuclear project. g 3
cused the company, which is manag. llems initially recommended a rate In suggesting last week that the HL&P is thought to be the only logi. *1 Ing partner of the nuclear project, of increase of $188 million, t,ut that flg- City of Austin sue HIAP, Austin's ad- cal buyer at this point. Austin voters v being poorly run. Observers said it ure later was corrected to $200 mil- visory Electric Utility Commission authorized the City Council last year was the strongest attack the commis, lion. Cowden said his management recommended charging that the to sell the city's share of the project.
. slon has made against the operation penalty and other modifications will Houston utility had mismanaged the of a utility that it regulates, reduce the examiner's final figure nuclear project, and inviting two oth- HIAP officials have been saying
"" allalong that the f!rm has no plans to Austin is a partner in the South Ligft .6 the San no bli uy A nt.hWafs s@tandal Texas Nuclear Project, and last At Cowden's request, the commis . Service Board to join the suit. cutin s rate re@est cald m week the city's Electric Utility Com- slon also dropped a recommendation duce even further the city s chances mission suggested suing HIAP for by Williams to set a $1.7 billion cell. Shudde Fath, vice chairman of the to sell its share to the utility, mismanaging it. Ing on the. amount HIAP could -
charge its ratepayers for the two-
"The company needs a major unit 2,500-megawatt South Texas change in its management direc- Nuclear Project being built near Bay tions," Public Utilities Commission City. Setting a $1.7 billion ceiling Chairman H. Moak Rollins said dur- might Inappropriately imply that the Ing Tuesday'r, meeting. He suggested commission will allow that figure to the firm begin with some changes in be charged to ratepayers, Cowden i its board of directors. said.The proposed ceiling is equal to HLAP's 31 percent share of the pro-l The three-member commission ject, now estimated at $5.5 billion.
essentially adopted the technical re-port of a staff hearings examiner, Cowden said the examiner's re-with some changes by Commissioner port did not go far enough in criticiz-George Cowden.The changesinclud- Ing the firm's management
&Acktmth Y sstat unnsolnd tamong many hazardous condmons 'Two oeer enervenor groups dropped out this year sometime aft:r the first cf the year. All due to lack of funds, afeer wmal yean of wW cf the workers have said they wal co' ""'*""d " ** l'"'? **' '** " *e Paiod H e ACORN. represented by Wr:t Traas tegni Servic.
the evidence introduced by CASE m June of a trac. ture crack runnes through the enure 7-fooMhach es,and Ciuzens for Faar tJtasy Regulation,a Tar-tinue their oppositicn. The.irhope is tJ s rant County 4ased environmental group. concate base mat teldmg the reactor in una 1 - a others will now Come forward. How- cruk the vulny faded to report to the NRC even *In a related ruling.* Board sad that CASE had ever,the price they have paid may make though the fracture had been there sace 1977. NRC rded requests for design specaricahons for the pipe that wtsh only a fond hope. Them is no mspecion o,,, found ibe crack and knew nomms suppons which were cusionssesigned for Com. about a unt2 C ASE nkased the internai report sent anche Peak, too late. and refused to nde on une doubt the utuities and B&R wif . allin by m utary dunas me daconry phew of
- manufacturer's claun of propnetary information their power to encourage silence. summer proceedmas. Company officials reluctantly protected from public disclosure.The design infor.
Meanwhile, the twm towers are per- adout mat ". crack" eusts and uy me ae *ordag maten couw pron that " thousands or pipe sup. of *e in'arn*I nPart"may ha" impiad h8 it is in ports have design news." both Walsh and Doyle manent fixtures on the ridge known as ee base mat.%ut eat Mustunny in ik doustmut u,4. "How do you decade W ee piant has bun Comanche Peak. Whether they ever be- shaped 3-foot-that concrete wau that surrounds desped property, d eings we held secnt'" Doyk asked. But bliller's ruima dealt with procedural come radioactive or not wH1 be decided se nactor na shieldes. Juana Eths uys hn is"no doubt" as to the wordes;it clearty states it is tencieies,." more important in NRC adauantrat. by three men in Washington, D.C. who ive proceedess enn ble and death matters, niany h ve never set footin SomervellCounty. 'a m base mat. she,,funw saad nenw meh**I NK 8 r th8 Utility h8'e 88Y d CWm'Diat8 say.The ruhng had the etfect howevs.t.of eBoweg O up the clairn that it is ostly in the shield.' the desigo specifsations to nmam a secret. The NRC, caught wab ogg on its face, says the nonce agam.the Samen' nport had be**n fdled wah problem is due to a "mastake m the company s pa- dozens of names of persoes who could cerroborate Beffy Brink a. s ofree-lance wrifer living in per,,,s, and that it m crack is in me stueldag. it their charges, dang wah camet locauons. The NRC is "of inoe consequence," but it it is in the base reisesed anoect"saruuzed wnian wah an names Kounfze. mat. "it could be dangerous, panicularly if water deleted. This tune the Board let it stand, ruhng. seeps in to corrode structural remforcing steel." somewhat convolutedly, that becau,e the Steen FOOTNOTES Then is no way to check the boas mat now since requested anonymity, that protecuan extended to the reactor has already been set.short of removing the wanesses they named as well.even though the
'The Comanche Peak Life Force, made up of antL witnesses themselves had not requestad such pre nuckar activists from Danas. Fon wonh. Denton the reactor at a cost of mabons. Even if the crack is tcctaon. While Dariene and Henry's names wen de-and Austm. scaled the fence twsee m recent years, only in the shieldmg. opponents poet out, seismic disturbances, normal vibrataon, an internal acci- leted, their phone number was not. Nor was the is non. violent protests against the plant. Tnals name of this writer, wSo was contactad by Henry were held in Gkn Rose (TO, I2/W79).h first end- dent, could add senous addnional strein to the con-crete, causes the " shallow crack" to suddenly be- Steer just before he took has allegations to the ing m a hung jury, the second in convictions for 50 NRC.
to 100 protesters. come its weakest Imk.
& N A. d4 um
'83 LEGISLATIVE PREVIEW -
A PUC in the public interest? Here's what it.would take. missioc, the regulatory agency charged plants we need for future growth; banks By Judith Farrell with supervising the private electric demand high interest rates on the money Austin power industry in the public interest. borrowed for that construction. Fuel dis-
"* * * * " ' prices. The HEN PEOPLE TALK about Complain to the PUC about your util- message, in its basic form, .is short and rising utility bills, they use ity rates, and the Commission will give sharp: Texans have had it too easy; W metaphors of power and gu two answers: first, that you don't en"Ey h expense and wm get more beauty - we say that prices soar, spiral, understand the situation; and second, ** * * * * " * * * * ***
**E*"'
t.nd skyrocket. The actual phenomenon, that it's not the utilities
- fault. pay a lot for Lt. And we will have to ac-as experienced by bill-payers, is hardly Ratepayers, however, understand the cept more pollution of our air, soil, and lovely. In the last five years, prices price increases they have undergone
**'*I***",','*!**. t fan gas to coal.
jumped IM9c in Houston,135% in Fort with a special clarity all their own. And. r the even dirtier lignite. We cannot Worth,121% in El Paso,119% in if it's not the utilities' fault, they would ault the utih, ties for any of this, say the Beaumont,76% in Dallas - increases I ke to know whose it is. regulators, and since protecting the fi-higher than the rate of inflation, and far nancial health of the industry i, the best The PUC, in its public response, fol. higher than wage-earners' salary gains. way to sustain it, the PUC is really doing lows the industry account with melliflu. As ratepayer distress rises proportion- us all a favor by granting these high rate ous fidelity. It's all bad news for the cus-ately, cor,sumers all over the state are settlements. tomer: the message is a consistent, agitating for an end to the parade of price That is a grim dilemma offered to the authoritative-sounding monologue with a hikes, and they are challenging the no- public by the PUC: the assertion that the tion that,at whatever cost,the user must large dollar sign at the end. Private utilities are under a lot of pressure, we only alternatives are worse than what we pick up the tab. If they are customers of have, a., d the best we can do is adjust to are told. Sharp-cyed investors demand the big investor-owned utilities, their ut. the situation. If you're wealthy,you pay timate forum is the Public Utility Com. very high returns on their money,or they will desert the industry and leave us all only about 6% of your income in energy to freeze in the dark. Contractors de- costs, and your adjustment will probably
.ludith Forrell is a research analyst for mand huge sums to build the big power be fairly successful. If you're middle-the Texas Consumer Association.
l 10 NOVW6ER 12.1982
- 4 .
mcome and currently spending 15-20% took three years to build,and came in t.t sid:s, utility cwnership of fuel suppliers of your money on energy, by next year something roughly like budget. It mada is incretsing - and the inc:.ntive to hold . you may be joining the ranks of those sense to build,it made sense to take fuel prices down is weakened immeasur . whose utDity bills exceed their mortgage large, long-term fuel contracts, it made ably when purchaser and supplier are pqments. If you are lower income, sense for consumers to finance future parts of the same corporate structure. y:u're already spending 35% of your plans. It's a ready-made " double-dipping" situ-funds on these bills, and your " adjust. Since 1970, that has all made increas. ation for corporate profits; and a utD;ty ment" means going without certain ;,,gy g,,, sense. Current conditions with a heavy investment in a particular fuel is unlikely to show much interest in amounts of food, clothing, medicme, and guarantee th.t "neve" power is three to other necessities. In any event, before i ve times as expensive as "old" power; investigating ahernatives. you succumb quietly to the lesser of two a new plant takes seven to 10 years to If PUC regulatory interests make our unattractive evils, you deserve the as- build; and cost overruns that double or power industry sound like the construc-surance that those are really the only two tion business, they also describe it in in-
~
triple the estimate cost of a new facility choices available. are routine. A new lignite plant for Cen- vestment terms, and place a high priority In fact, they aren't the only two tral Texas was estimated to cost $351 on keeping stocks attractive. We are the choices. The PUC regulatory monologue million when planned; the most recent darlings of Wall Street for our " warm displays two extraordinary characteris- estimate of its actual cost is $700 mil- regulatory climate" and our pro-growth lion. The Comanche Peak nuclear proj- agency. It was, in fact, PUC chairman ect, estimated at s779 million in 1972,is H. M. Rollins, a Clements appointee, Fe may yet lieconse a now projected to cost 53.34 billion, and who assured security analysts in New faco-class system: those scho its original estimated price for power. York last August that in Texas, "the era in the energy system 3.5f per kDowatt,-has climbed to 6.lf. groundswell of dissatisfaction has not The long-staued STNP will now cost six reached the le,ve1 where we are that con-and those scho payfor it. tunes its ongmal estimate,and the Allens cerned about it,,, Creek nuclear facDity recently cancelled Texas is the only state utility commis-tics that suggest its limitations: it has de-has gobbled up well over $300 million sion that receives top marks in a ranking stroyed any lingering idea of utility ac-just in the preliminary planning stages. of regulatory agencies prepared by Mer. countability to the public; and it seems to be talking about regulating the construc- Since even a big utility cannot handle rill Lynch & Co. Saloman Brothers Inc., tion industry, rather than the generation such astronomical costs, our which also rates regulatory agencies, s,s-of power. According to the legislation construction-based ratemaki g practices signs only Texas and Inoiana its highest thtt created it,the PUC must" operate as have flexed to meet the proolem - we ranking. It's also significant that the only l a substitute for competition." Yet by have CWIP, the practice ofincluding in utility company in the nation whose passing onto users all the high costs of the rate base a portion of the cost of bonds are classified AAA by Standard operation today, the PUC shields the construction work in progress. In Texa . and Poor Corp. and Moody's investor utDities from precisely those difficulties we set more ofit, and we get it soone , . Service Inc. is in Texas - Dallas-based end decisions which private business than in any other state. About 60% of our Texas UtDities Co., parent of DP&L, i fr.ces, routinely purchasing prosperity recent rate increases are CWIP; Texans TP&L, and TESCO. for them at the expense of ratepayers. pay about $250,000,000 a year for plants And by employing rate-making policies that won't be completed for years, and Our state's emphasis on based primarily on the value of the plant may in fact never be completed at all. . l ! owned by a power company, the PUC CWIP, which critics refer to as " forced construciton andfarsance practically guarantees that utilities will ratepayer investment," has ballooned has put us a decade behind choose today's unbelievably expensive out of all proportion to the modest al<' ? was intended to be. By shielding utDities Other states in the construction over any of the other energy sources available. Both prac- from the most important " timely price development of tices, by reflecting back to utilities their signal" in the industry today. PUC regu- alternatives. - cwn traditional concems for secure pro- latory principles hamper the develop-fit margins and stable predictability, not ment of any truly competitve critical ..The Texas commission is pro-growth only fail to act as any sort of competition viewpoint. and pro. business as Texas is in general." rt all, but stifle it rather effectively. Thirty nine states allow charges for laurie Gi;bert, a rating officer at Stan-But as the cost of power rises,the pos- new construction. Many impose limits dard & Poor, told the Dallas Times sibihty of the PUC as a substitute for on the dollar amount of what can be Nerald recently. But we pay a high price - competition gain; both plausibility and passed through. Texas, however, has no to win investor praise, both in the bills
- pressing necessity. The PUC cannot limit. "Those charges should be passed we pay and in the effect on the economy
" compete" to hold down fuel and con- on only when a company is in financial of such gigantic pressures on the money struction costs - but it could, and jeopardy," Rep. Ralph Wallace, a market. Experts have begun to describe should, compete in the arena of ideas. Houston Democrat contends. "The way the " massive transfer of wealth" occur-What we have instead is a hidebound it is now, there's no pressu:e for Hous- ring as the energy industry gobbles up body whose regulatory policy is not only ton Lighting and Power to complete the the investment capital of the nation. We industry. oriented; it is based on tried and South Texas Nuclear Project." may 'yet become a two-class system:
.true orthodoxies hoary with noncompeti- The same lack of competitive pressure those who are in the energy industry, and tive converition. It represents an indus- from the PUC holds for other aspects of those who pay for it.
try outlook that worked well enough in regulation which are disturbing consum- Our state's emphasis on construction the past, when power consumption was ers,today.The automatic fuel adjustment and finance has put us a decade behind growing faster than the economy, when pass-through is a mockery when com- other states in the development of alter-expansion meant declining unit costs, panies are not required to submit techni- natives. And it seems clear that the regu-and large central plants meant prosper- cal proof that they are making the best latory policies operate as a powerful in-l ity; when a large central power plant choices for efficiency and economy. Be- centive to keep things that way. As one THE TEXAS OBSERVER 11 l
wit his observed, if the cnly tool you enctmtnt cf thz r.lttr=tivss to the debatz - a chorus not a monologue. h:ve is a hammer, you tend to treat the utilities' grim dilemmt. Every And if we com: to see the problems of everything as a nail. homeowner who insulates an artic or power supply as a subtly shifting range buys a high-efficiency refrigerator con- of suppiy and demand options, we need What then are the alternatives? We can say confidently that power genera- tributes to the new possibilities for rate based policies that offer incentives tion 50 years from now will be radically energy in Texas, knowingly or not. to the utility industry to pursue alterna-different from what it is today,even if we When the management of a factory de- tives much more vigorously than it has - don't know exactly how. ne interval be- cides to co-generate electricity from its done so far. tween will be a major, probably messy own excess heat, or a small business re-Our utilities know more about the al-and disruptive, perhaps exciting transi. quests passive solar design features in its tematives than you or I will ever know, tion. Several things seem certain: we new office building - then the nature of the utility industry changes. He cus-m km huh w should avoid measures which (1) require , g ; g lots of capital;(2) take years to achieve; tomer, , of whatever size or class,is then g ,_ , hd (3) lock the industry into certain ini'exi- not simply the passive recipient of Texas companies are very timid about ble technologies. We should seek alter. kilowatts passed through a meter, but an these options, and tell us they're margi-natives which (1) are flexible; (2) do not active participant in the relationship, M but a h@ h4 rrquire 10 years to completion; (3) are making choices about how the energy State predictions suggest that, if we environmentally sensitive; (4) promise dollar is spent. worked at it, conservation and renewa-technological progress; (5) tend to gen- This relationship suggests t'uo major bles as a group might possibly account crate jobs locally and keep rate-payers implications. First, the public needs to for 20% of our energy by the end of the money withm the commumty, be more actively involved in the rate- century. Yet the California Energy Where are the new ideas about electric making process. If the appliances and Commission, ciperating under a vigorous power? Not at the PUC. Every time a homes we choose, the way we get to commitment to attematives, confidently city decides to try generating power from work, and th: patterns of our new sub- predicts that 63% of its state's energy its trash, or a farmer expenments with a urbs are all part of the energy equation, will come from those sources in the year windmill for irrigation, there is a small we need a diversity of voices raised in 2000. Recommendations I 7 Election of Commissioners. funded through the gross receipts conuruction, and rigorous many-Unlike the current commissioners, tax which, collected from utility factored load forecasting data elected utility commissioners from revenue to fund the PUC, gener. should be required before a utility single-member districts will neces- ates 5 times more than is used. could expect even minimal ap-sarily maintain some accountabil- y Requiring Management Au- proval to plan a new plant. This ity to the public they are elected to dits. %e " management audit" is a policy would help to prevent ruin-i represent and paid to serve. No fairly new regulatory tool, and a ously expensive plant cancella-race would be more clearly under- very good idea. A licensed tions, hold down cost overruns, stood by voters than the election monopoly, even when investor. and, most valuable of all, could of those who will vote on theie util- owned for prefit, should be an. welllead to decisions not to build, ity rates. And election wil' help swerable to the public for the qual. when preliminary studies proved prevent that " capture" of the ity of its decision-making. A man. there were better alternatives. Se-egency by industry interests which agement audit asks how well a vere limitations on approval of tends to happen in regulatory situ- company is run on all levels, from CWIP funding - lower per-ations. personnel to planning, from sys. centages for shorter times, with 7 Creation of an Independent tem organization to rate structure. greater utility accountability - Federal standards suggest a man, would also encourage innovation, Public Counsel. The PUC repre-agement audit for each utility as well as hold costs down. A lue-sents "the public interest," but rative CWIP award is not sunply l that is defined as the sum of all every four years, with follow-up commercia!.indusual,and private audits on trouble spots every two one of several possible ways to years. Gulf States Utilities re, reimburse a utility for costs: it op-interests - and also the utilities. erates as a powerful tool of pobey Industrial and commercial cus- cently declined a management audit on the grounds that it would to promote construction at the ex-l tomers send paid representatives cost 51 million; but that represents pense of other options. l to rate hearings to protect their l interests; utilities include the cost about 0.3% of its annual revenue. The Public Utility Commission of their very thor %n representa- and a management review might. has not developed as a vigorously tion in their rates. Only residential easily save ten times as much. independent agency bringing its ratepayers are without representa- 7 Construction Work Costs and own ideas to the utility industry ! tion. The PUC is " lenient" abou, Approval of Building Permits. and setting standards which they admitting independent advocates Permits 'o build new plants are must stretch to reach: But it.will to hearings,but there is no mecha- currently issued without the rigor- respond to clear legislative man-nisia for paying for them, or or- ous investigations required in date. Ratepayers should look to ganizing a focus for private citi- many other states. Thorough en- the legislature to amend the Public zens. An office of public counsel vironmental impact studies, care- Utility Regulatory Act-and they with an adequate staff could be fut investigation of alternatives to should demand it. J. F. 12 NOVDIBER 12,1982
* . Tliat discrepancy is the me sure of the that is expected to sava n whole genera- the alternatives would widen the energy diffzrence in the two st.tes' e:zrgy tion of plant co;struction there. debite, promote the esmp2titirn cf policies. While they cpstate undtr So we have a regulatory problem, as idus, end involve the public in the.,
constrv: tion-based policies, our utilities much as we have an energy problem. choices being made at the Commission. have serious disincentives to int. ovation. And the best ideas are happening outside O HLAP could get $15 million a year for the regulatory structure. The dour cver 5 years in CWIP for Allens Creek, monologue of the PUC with its grim 9p- Chuck Caldwell's but has not vigorously pursued co- tions must,be displaced by ar. engomg genation, though the industry in its dialogue with the public about the ways y " ' 7 aret offers exciting possibilities. The mil- to manage energy, and its place in our ,
."'A" R ,
G j 1 lions of dollars gone for interest and can- lives. c:;tled pitnt, if it had been spent to de- ' How to begin? The Public Utility H H T'E I velop co-generation, could be working Commission is undergoing Simset Re- 773J New Hampshire At.c., N.W. f:r them now, and their program of al- view this year, with its first major public Washington, D.C. 20009 ternatives could have been years ahead. hearing scheduled for November 10. That review process, with its emphasis
- Dupont Circle / Embassy area But our regulatory policies give no clear on public participation, presents the op.
- Spacious rooms
- Coffee shop secure way 'to handle the technical and Parking
- Best buy ,m D.C.
financial problems involved, so they are portunity to begin the dialogue. Elected Just labelled insuperable. Yet new regu- public membership on the Commission, Present this ad when checling in and latory principles developed in Pennsyl- a public counsel to represent rate- receive a J10 introductory rebate. wania to encourage long-term contracts payers, legislation to limit construction, for co-generation are stimulating activity and a serious commitment to pursuing CALL TOLL FREE 800-424-2463
'OTICAi INTLLIGENCE-7 He criticizes the policies and ideas of tion often appears to be a conflict of and gas PACS,the most among 12 Senate House Speaker Thomas P. "Tip" interest. Under current rules, payment candidates listed, and the only Democrat O'Neill, Jr., and Majority Leader Jim can be accepted for such services. among the top dozen. Gramm received Wright, urges Americans worrying about . - 583,408. Cong. Jack Fields received Workers 7 ud the minimum wage set 548,115, which ranked him fifth. Cong, the economy "to stay the course," and b). Texas law for work not covered by points out that between Reaganomics M Colk m m M mg h w
- 12 recipients.
and himself"there's not a differerice be est d p yees o e n ti 's 0 tween the two. The coalition said the most generous most populous states. Texas law guaran-That's no Republican talking; that's committee was the Dallas Energy Politi-tees at least $1.40 an hour. The measure cal Action Committee, donating Phil Gramm on his recent tour of 21 has not been amended since it was Texas cities campaigning for Rea- 5237,000. The Dow Chemical Co. PAC passed by the legislature in 1%9 and was second with 5223,900, the LTV Cor-ganomics. Although John Tower has reached the current base two years later. given no indication he plans to retire in Workers in California, New York, Penn- Poration PAC was third with 5222,173, 1984, Gramm was obviously positioning sylvania, Illinois, Michigan, and New and the Tenneco PAC fourth with
$202,250. Robert M. Brandon, executive himself on the tour for a run for the Sen- Jersey receive a minimum of 53.35 an director of the coalition, estimated the oD ate - most likely as a Republican. He hour, the same rate as the federal mini-and gas PACS
- total Snations will be 58 has said that if House Democrats meet- mum wage. In North Carolina and Ohio, million when the reports are complete.
; int ni December kick him off the House state laws require employers to pay em.
Budget ComMttee, which is likely, he ployees at least $3.10 and 52.30 an hour, 7 The f al fecision of Houston Light-will consider two options: switching par- respectively. The North Carolina figure ing & Power Co. to cancel its proposed ties or returning to Texas A&M at the wDI increase to the federal base level Allens Creek Nuclear Project 40 miles end of the next congressional session to next year. southwest of Houston dramatires in resume teachmg econonues. Rebecca Harrington, Texas director of Texas the national trend against nuclear Tower has raised more thari 51 million the United Farm Workers, says raising power. HLAP said it has an " indication" this year in the event he fues. He has the state's minimum wage law is one of from the state Public UtDity Cmsn that been rumored to be in line for a White the union's top priorities, but no one is it may be permitted to recover its $362 House Cabinet position if he decides too optimistic about the effort. millier, investment in the abandoned
'against another statewide campaign. Pl ant by rate increases spread over ten F e Doy sen ud Cono PhD 7 Former Gov. Dolph Briscoe now Gramm led the list of recipients of con- Y**#5' snys he'll make the race to replace gressional campaign donations from oD F Three of the nation's ten poorest Tower in 1984, and supporters say and gas industry political action commit- counties are in Texas, according to the Janie's all for it. tees, according to a report from the Oct.18, issue of U.S. News and World Citizen 44bor Energy Coalition. PACS Report. Starr County is third on the list 7 A good idea from BiUy Clayton: the with a per capita income of $2,668.
outgoing House Speaker told a legisla- backed by oil and gas companies, execu. tives, and investors, according to the re- Maverick County is seventh with a per
' tive ethics committee recently that legis-port, have contributed more than 56.8 capita income of 53,100, and Zavala lators w ho arc lawyers should be allowed County is ninth with a per capita income to appear before state agencies for pri- million to congressional candidates through Oct.13. The coalition said of 53,202.
vite chents, but only without pay for the Bentsen received 5143,408 from the oil The two poorest counties on the list legal service. Clayton said such interven-THE TEXAS 00 SERVER 13
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