ML20078F954

Intervenor Exhibit I-46,consisting of 890915 Memo Forwarding Draft Major Elements of Proposed Performance Stds Re Georgia Power Co Rate Case Testimony

ML20078F954
Person / Time
Site:	Vogtle
Issue date:	01/12/1995
From:	Michael Brown SOUTHERN COMPANY SERVICES, INC.
To:
References
OLA-3-I-046, OLA-3-I-46, NUDOCS 9502020340
Download: ML20078F954 (13)

Text

--==:a F4(o SouthemCgppppygervices A intracompany Memo USNRC

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DATE:

September 15, 1989 FROM:

M. T. Brown, Jr.

RE:

GPC Rate Case Testimony 0FFICf CF SECRETARY DOCKETNG / S FU/ICF TO:

Mr. J. M. Farley B R / W Cr!

Mr. R. P. Mcdonald Mr. W. G. Hairston Mr. J. T. Beckham Mr. L. B. Long Mr. C. K. McCoy Mr. C. D. McCrary Mr. R. M. Gilbert Attached for your information is the first draft of the major elements of the proposed performance standards.

Please note that Item 4 will be changed to include the comparison plants submitted by the project VP's.

The attorneys have requested that we submit our comments by 4:30 today.

If you have any questions, please let me know.

O nw it Attachment Mr.T.S.Marvin[

ec:

Mr. S. E. DeWitt Ms. M. J. Childs NUCLEAR REGULATORY COMM! dbl 0N So-4 *n sc L A - 3 NS 00Ckf;t Naf6-9 ts e A

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1.

Canacity Factor Criterion Capacity Factor is the seasure proposed by GDS (Itestimony, p. 30, 1. 5-13).

O' 2.

Evaluation Periods with the first evaluationicovering theThree year average capacity Factor, 1990-92 period being conducted in early 1993, as proposed by GDS (testimony, p. 38, 1.

17-19).

3.

Canacity FactortData Source:

" gray book";, as proposediby GDS (testimony, p.NRC NUREG 0020 (the NRC 30, 1. 11-13).

This feature will permit Georgia PSC staff to compute Capacity Factors.

j

~

i 4.

Seoarate t'a=nerison Grouns for Match and vaation Three-year averages will be developed separately for Hatch based upon boiling water reactors proposed by GDS (testimony, p(BWRs) and for Vogtle (PWRs), as

. 32, 1. 16-18.

by GDS, only units which are in commercial o)peration for eachAlso as prop year of the three-year evaluation period shall be considered in computing the Capacity Factor averages (testimony, p. 31, 1. 13-15.

Further, distinction 13 by)Fitzpatrick's statis*;ical analyses.n the comparison groups is supp More representative comparison groups consist of BWR-4 reactors with over five years since commercial operationi for Hatch (to account for Hatch's vintage ano design) and post-TMI PWRs over 1,000 mW gross for Vogtle (e.g., GDS's Exhibit PS-10, p. 2 of 2).

i comparison units are attached.

Lists of O

5.

nrelusions from ca=narison Grono:

Observations for Hatch and Vogtle would he excluded from the three-year average Capacity Factor, as proposed by GDS Exclusions from the comparison group (also would be made for units testimony, p. 31, 1. 11).

whose three-year average Capacity Factor is not representative of a nuclear plant performing junder normal operating conditions (GDS l

p. 31, 1. 24-25).

Fitzpatrick proposes that deletion of the three-year average for anyjparticular unit be based on a review of the facts ; specific to the observation (e.g., facility shut down in order to make modifications mandated by the NRC or whose retirement resulted in onig a partial year of operation) and concluded that the 50% exclusion critazion proposed b illogical and not su testimony, p.,24, 1.pported by statistical analysee (y GDS was Fitzpatr!.:k that its representatives an(d representatives of the Commission 17 - g. 28, 1. 2).

The Company believes staff could agree on exclusions based upon factual revisw.

the event of an inability tb reach a consensus, thosa units whose In three-year average Capacity considered representative ol Factors fall below 35% would be normal operating conditionsLf a nuclear plant not perfo m ing under 6.

Acceptance B4nd GDS proposed a 3% dead the average Capacity Factor targets (testimony, p. band around 33, 1. 26 - p.

^ Q - page - of (3 q

Exhibit

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34, 1. 11.

GDS belicved that the d cd band icou3 *t nds to be very arbi.trary* (Hearing trcnscript, p. 2346, 1. 7-8) cud was unaware of d tciled ctatictical analyscs to chow a better range (nearing transcript, p. 23447 1. 7-10).

analysis of!the variationicaptured within a 3% dead bandFitzpatrick performed (Fitzpatrick testimony, pt 28, 1. 4 - p. 29, 1. 7.

O statistical standpoint, Fitzpatrick would recommen)d a performance From a points (Fitzpatrick testimony, p. 32,1.1-3). standard dead ba The company 7% dead band is appropriate in order to 1 concurs with this statistical p variation of units' performance which does) not reflect account for normal substandard or exemplary performance, and 2) provides a broader range of " reasonable a performance and, thereby, lessen the potential for undue influence on decisions important to the safe operation of the plants.

7.

calculation of Amount of Reward or Penalty:

coepany concurs with the 50:50 sharing of reward and penalties, The as proposed by GDS (testimony, p. 37

1. 25).

The Company concurs with GDS's alternative recomm,endation that the Company's marginal energy cost be used to compute rewards or penalties (GDS testimony, p. 40, 1. 23 - p. 41, 1. 6.

Georgia Pcwor have used this approach)with little difficulty inThe Com the past, 1988 administrative outageiat Plant Hatch.such as in determining outag i

8.

Marien= Reward or Penaltva GDS calculcted a==wimum reward of $21 the three-year,000,000 and a maximum penalty of $30,000,000 for period 1990Ithrough 1992.

In order to achieve a

" balanced" standard, the Com O

evaluation timeframe).(i.e., pany proposes that the maximum re and penalty be equal

$20,000,000 over the three-year Weinote that the likelihood of the maximum reward is substantially less than the maximum penalty (Fitzpatrick Exhibit GLF-4, p. potential for the

_ of

),

i 9.

Erelusion from Incentive Procrrams The performance incentive prega.am of GDS provides that any Georgia Power unit which operates with an average Capacity Factor of lower than 50%

for the three-automatically; year period will be excluded frost the program and that tha connaission would also retain the flexibility to exclude any unit from the program for performing a separate prudence evaluation (testimony, purposes of

- p. 6, 1. 2)i.

p. 5, 1. 21 "backfits" or;other very unusual circumstances occurred, theA Ccampany could: request the Ciaonission to exclude the affected units even if:the Capacity Factor for the unit does not fall beltw 50% over the three-year 2370,1. 2 - p. 2371, 1. 24). period (Hearing transcript, p.

With the underst*adia unusual circumstances connote events or factors subs;antiallythat very outside of current managesent's control and which historically t

have not beeniexperienced to a significant degree in the 2

O exnie:1 *. geoe.3.

ei.t2.

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opercticn of the a power:plents, tho company cencura with the cuggacted cypro ch of GDS.

The Company cuggests that tho Coussission consider the adoption of a more specific definition of these unusual circumstances, and proposed language is attached.

O Additional Observattons.

l Severdi aspects of the foregoing approach are notaworthy.

t

First, i

the11986-1988 average for GDS's more representative peer group of PMRs is 67.54, comparable to the 68% which Georgia Poser No. 3554-U,; Hearing transcript, p. 258, April 20,1986)

Consequently, there is rtaason to believe that this performance standard will address thei Canadssioners' desire for company accountability.

Second, the maximum reward / penalty, dead band width and potential for Commission review mitigates, to some degree, the. Company's concerns regarding the use of a performance plant or undue concern for short-term econostics. standard whi extent that the domestic nuclear industry improves itsThird, to the i

performance, the performance standard will be higher, as applied in 1993, to : Georgia Powerfs plants.

Fourth, the outlined performance istandaret approach is somewhat simpler to administer than that originally proposed by GDS.

Specifically, GDS's is proposed / which should{ eliminate what the compan i

would be inappropriate use of computer cost estimates (PROMOD).

t In addition,: the comunissicin staff and the Company have had aufficient experience to agree on incremental system production costs for the nuclear plants resulting from a plant not operating O

(fer example, the costs determined for Hatch and Vogtle outage t

durations alleged to have been imprudently incurred in Docket 3741-U.

is the) basis for this proposed standard. Finally, the GDS) proposed pe The Company has limited achieve a fair and equitable standard and which confers unintended results. ability on the company to preclude the program from havin 1

i i

j M

3 Exhit it.1., page Y of I3 gr ___

p.,. - v

COMPARISON UNITS FOR PLANT HATCH MAXIMUM LICENSED DEPENDABLE THREE-

[

UNIT BWR THERMAL CAPACITY COMMERCIAL ENDIN YEAR AVG TYPE POWER NET OPERATION 1988 BROWNS FERRY 1 4

DROWNS FERRY 2 3293 1065 BROWNS FERRY 3 3293 8/1/74 4

1065 0.0 BRUNSWICK 1 3293 3/1/75 4

1065 0.0 BRUNSWICK 2 2436 3/1/77 4

0.0 790 3/18/77 4

COOPER STATION 2436 790 69.7 DUANE ARNOLD 23B1 11/3/75 4

764 60.3 FITZPATRICK 1658 7/1/74 4

538 68.5 HATCH 1 2436 2/1/75 4

757 63.9 HATCH 2 2436 7/28/75 4

757 70.0 PEACH BOTTOM 2 2436 12/31/75 4

768 64.5 PEACH BOTTOM 3 3293 9/5/79 4

1051 67.6 SUSOUEHANNA 1 3293 7/5/74 4

1035 30.6 VERMONT YANKEE 1 3293 12/23/74 4

1032 23.2 4

1593 6/8/83 504 75.0 11/30/72 73.2 SELECTION CRITERIA _*

2. BWR TYPE 4 UNITS 1. GENERAL ELECTRIC BO O

)

3. COMMERCIAL OPERATION DATE WITHIN FIVE YEA COMMERCIAL OPERATION DATE HATCH 1 & 2 M

1. DATA FROM NUREG 0020 GROUP AVERAGE THREE YEAR CAPACITY FACTOR (EXCLUDING PLANT HATCH ) = 44.5%

(EXCLUDING PLANT HATCH) = 68.7% GROU PLANT HATCH THREE YEAR CAPACITY FACTOR = 66 0%

9 Exhibiti,pageIOf'3

COMPARISON UNITS FOR PLANT VOGTLE i

MAXIMUM THREE LICENSEDc DEPENDABLE YEAR AVG UNIT THERMAL CAPACITY COMMERCIAL ENDING IN POWER NET OPERATION 1988 BRAIDWOOD 1 3411 1120 7/29/88 NOTE 3 BRIARWOOD 2 3411 1120 10/17/88 NOTE 3 BYRON 1 3411 1105 9/16/85 64.4 BYRON 2 3411 1105 8/21/87 NOTE 3 '

CALLAWAY 1 3565 1118 12/19/84 76.2 CATAWBA 1 3411 1129 6/29/85 64.1 CATAWBA 2 3411 1129 8/19/86 NOTE 3 COi4MANCHE PEAK 1 NOTE 2 NOTE 2 NOTE 2 NOTE 2 COMMANCHE PEAK 2 NOTE 2 NOTE 2 NOTE 2 NOTE 2 DIABLO CANYON 1 3338 1073 5/7/85 66.7 DIABLO CANYON 2 3411 1087 3/13/86 NOTE 3 MILLSTONE 3 3411 1142 4/23/86 NOTE 3 VOGTLE 1 3411 1083 6/1/87 71.3 VOGTLE 2 3411 1083 5/20/89 N/A WATTS BAR 1 NOTE 2 NOTE 2 NOTE 2 NOTE 2 WATTS BAR 2 NOTE 2 NOTE 2 NOTE 2 NOTE 2 WOLF CREEK 1 3411 1135 9/3/85 67.8 SELECTION CRITERIA:

1. WESTINGHOUSE FOUR LOOP PRESSURIZED WATER REACTORS

2. ELECTRICAL CAPACITY RATING OF 1000 MEGAWATTS AND OVER

3. COMMERCIAL OPERATION DATE WITHIN THREE YEARS OF VOGTLE 1 & 2 COMMERCIAL OPERATION DATE NOTES:

1. DATA FROM NUREG 0020

2. THESE ARE FUTURE PLANTS WHICH MUST BEGIN COMMERCIAL OPERATION BY 5/20/92 TO BE INCLUDED AS COMPARISON UNITS. ~

3. UNIT NOT IN COMMERCIAL OPERATION FOR THE FULL THREE YEAR PERIOD.

4. LIFETIME CAPACITY FACTORS ARE SHOWN FOR PLANT VOGTLE.

GROUP AVERAGE THREE YEAR CAPACITY FACTOR I

(EXCLUDING PLANT YOGTLE),69.9%

GROUP AVERAGE THREE YEAR CAPACITY FACTOR ABOVE $5%

(EXCLUDING PLANT VOGTLE) = 69.9%

PLANT VOGTLE LIFETIME CAPACITY FACTOR =

71.3 %

O Exhibit S,page b of 8 L

.e.s-SouthemCompanyServices A Intracompany Memo o

DATE:

September 15, 1989 FROM:

M. T. Brown, Jr.

RE:

GPC Rate Case Testimony TO:

Mr. J. M. Farley Mr. R. P. Mcdonald Mr. W. G. Hairston Mr. J. T. Beckham Mr. L. B. Long Mr. C. K. McCoy Mr. C. D. McCrary Mr. R. M. Gilbert Mr. W. B. Shipman Mr. D. M. Crowe Mr. M. J. Amick Mr. M. D. Barker Mr. E. D. Hicks Mr. M. K. Tate Attached for your information is a copy of Thursday's tr:nscript of comments by Commissioners Lovett and Andrews regarding performance standards.

If you have any questions, please let me know.

l l

it Attachment I

O Exhibit %,page 7 of A

sENT SY:TROUTMAN SANDERS i 8-15-88 111 28AM i 4048888487*

81208870888130 2 I.

I Page 3747 BEFORE THE GEORGIA PUBLIC SERVICE COMMISSION 1

f 2

l~

3 In the Matter ofi l

4 The Application of GEORGIA POWER COMPANY for authority to increase 5

its rates and charges for retail Docket No. 3840-0, electric service!to produce annum 1 revenues in the enount of 6

approximately $492,206,000 with the rate increase. to lhe phased in over 7

a two-year period.

l g

I 9

Room 177 to 244 Washington Street Atlanta, Georgia 11 Thursday, September 14, 1989 9

The above-entitled matter convened pursuant I

l 14 to, adjournment, at 10:04 a.m.

15 BEFORE:

g ROBERT PAFFORD, Chairman 17 GARY ANDRENS, Commissioner CAS ROBINSON, Commissioner is BELLY LOVETT, Commissioner ROBERT ROWAN, commissioner 19 20l APPEARANCES:

I on behalf of the Analiennt Georais Power Co.:

l JAMES E. JOINRR, Attorney 22 DOUGLAB MILLER, Attorney Troutman, Sanders, Lockerman & Ashmore 23 1400 Candler Building

~

Atlanta, Georgia 30043 24 25 Exhibit 1I-,page8-of d i

J i

~ sNT'ay:TR;UTMAN 3ANDERS I S-15-45 111828AM i 4040588457*

01205870808110 3 s

O Page 3771 1

MR. MILLER:

Mr. Chairman, alght I --

l 2

CHAIRMAN PAFFORD:

Just a moment.

Mr. Lovett.

l 3

COMMISSIONER LOVETT Mr. Miller, I have a requent 4

for you, plasse, sir.

~

~

3 MR. MILLER:

Yes, sir.

l J

6 COMMISSIONER LOVETT:

Thinking back through the i

7 last few days and the issue of performance standards -- and I

e I just want to bring it up now because I don't want you to 9

heiblind-sided med I went you to have some time to think 10 about this.

I1 About several years ago, I had numerous 12 conversations with personnel in your company, and I've l

13 chaaked with them since then and they've confirmed that, l

14 that we had a standing request in and I think it's a matter I

15 of record in different proceedings, that the company come l

forward before the end of this case with their offering of 16 i

17 performance standards.

The company has not done that.

l l

1:

I'm frankly concerned about it.

It puts me in an l

l to impossible position.

I want to have all the inforantion, I 20 want to have all the facts, I want to properly judge your l

l 21

• • • Pany and its performance in its plant, and frankly it l'

just puts as in an impossible position to do that without I

22 I

23 the company's recommendation on performamos standards.

I 24 I don't want to be put in a posture -- and I'm l

O l

25 just speaking for myself and not for the Commission O

Exhiait b,page #i of f 3

[

Stir

• BY8TROUTMAN SANDERS i 8-15-00 111830AH I 4040588457*

31205870000180 4

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I I

O Page 3772 I

)

obviously -- I don 8t want to be put in a posture of I

re p iring the company to do something that they say is 2

l unsafe, and % don't think any member of the commission wants 3

I 4

that.

l i

Here we re getting down, we8ve only got a short 8

3 I

ties loft end you may -- it may take the company three 6

months or six months before it can properly come up sith the i

y g

study that it needs.

Maybe it could be done in'a shorter time -- that I don't k6ow.

9 But I wish you would communicate -- and again I 10 l

~

t1 just want it on the record, I wish you would communicate to O.

the President aflthe company my concern that if he feels l

i 12 l

that it would beinecessary to suspend this case, to g3

, ~1 i

withdraw, put it.in suspension for three months or six 14 i,

i months -- I don't know that the Commission could order that 15 to:be done or that it should, but if it could be done to 17 voluntarily, it would certainly be something that I think 8

you ought to think about, if you could respond back to us to

)

13 i

ses if that is feasible.

)

i, I

t Secondarily, not -- it8s important, and I know it i

20 i

doesn't reflect directly on the case but you've got this 21 I

1seum of the grand jury investigation.

I don 8t know that it 22 t

hasanyimpacta[tallonthecase, but it certainly has a 23 cloud over the case.

And for um to make a decision and O

24 f

something come down later on that could be embarrassing to 23 l

Eh,ibitS.h.,page M of i3

ssWr*BYITROUTRAN SANOCS i 8-15-00 111:30AM 3 4048588457*

01205870008130 4 l

l Page 3772 l

1 obviously -- I don't want to be put in a posture of I

re9uiring the company to do something that they say is 2

l 3

unsafe, and I don't think any member of the commission wants I

4 that.

I 5

Here we're getting down, we've only got a short

'I j

time left and you may -- it may take the company three 6

y months or six months before it can properly come up with the study that it needs.

Maybe it could be done in'a shorter 9

time -- that I don't know.

to But ' wish you would communicate -- and again I l

11 just want it on the recorde I wish you would communicate to j

12 the President of the company my concern that if he feels l

that it would bei necessary to suspend this case, to 33

~1 l

i 14 withdraw, put itiin suspension for three months or six I

1 months -- I don't know that the commission could order that 15 to be done or that it should, but if it could be done y

gy voluntarily, it would certainly be something that I think i

Ig you ought to think about, if you could respond back to us to i

see if that is feasible.

j, f

Secondarily, not -- it's important, and I know it 20 doesn't reflect directly on the case but you've got this 21 1

issue of the grand jury investigation.

I don't know that it 22 has any impact m't all on the case, but it certainly has a 23 t

cloud over the case.

And for um to make a decision and O

monething come down later on that could be embarrassing to 25 I

Exhibit $,page H of O-I

, sayTay:TnouTMAN samoans

8-18-88 :11:30AM i 4048888487*

81208870888180 8

,f Page 3773 i

the Commission that we've left out, or to the company, it 2

hurts um both with the public, and I just wonder.if it's a l

2 good idea to proamed from that standpoint.

I But there's nothing that we can do that I know of, 4

1 3

technically.

There's no information that anybody has, so A

4 really,that's something that I would just as to be I

y considered on.a aluntary basis.

g In three months or six months, we may know something more that we' don't know today.

But time is l

o growing short, and I just wanted to make that personal l

11 request that youjoommunicate my concerns to Mr. Dahlberg, l

12 and then we can discuss them further on the record.

i3 MR. MILLER:

I will communicate your concerns to l

14 Mr. Dahlberg, MrJ I.ovett.

-l 33 COMMISSIONER LOVETT:

Thank you.

I is COMMISSIONER ANDREWS:

Could I make a brief 17 comment?

l 18 CHAIRMAN PAFFORD:

Yes.

l gg COMMISSIONER ANDREWS I would just comment that 20 at: appears to mel that the company has knowingly and i

l 21 Willfully Put the commission to the choice of the staff's Performance plani 22 or none.

And at this point in time I l

believe that this commission is going to have to live with 23 l

24 that and the company is going to have to live with it.

l 25 CMAIRMAN PAFFORD:

Mr. Hawes, do you have

~

l Exhib ti,page '2 of U

1 Southem CompanyServices 1 Intracompany Memo DATE:

September 19, 1989 FROM:

M. T. Brown, Jr.

RE:

GPC Rate Case Proposed Performance Standards TO:

Mr. J. M. Farley Mr. R. P. Mcdonald Mr. W. G. Hairston Mr. J. T. Beckham Mr. L. B. Long Mr. C. K. McCoy Mr. C. D. McCrary Mr. R. M. Gilbert Mr. W. B. Shipman i

Mr. D. M. Crowe Mr. E. F. Cabo Mr. M. D. Barker i

Mr. E. D. Hicks Mr. P. H. Wells Attached is Georgia Power Company's recommendations for changes to the major elements of GDS's proposed performance standards.

These will be submitted to the Georgia Public Service Commission for consideration i

during deliberation of the rate case.

if you have any questions or comments, please let me know.

it i

Attachment cc:

Mr. T. S. Marvin Mr. S. E. DeWitt Ms. M. J. Childs i

Ob Exhibit $, paged 0

.