ML20090A614
| ML20090A614 | |
| Person / Time | |
|---|---|
| Site: | Midland |
| Issue date: | 05/18/1977 |
| From: | Feld S Office of Nuclear Reactor Regulation |
| To: | Atomic Safety and Licensing Board Panel |
| Shared Package | |
| ML17198A223 | List:
|
| References | |
| CON-BOX-13, FOIA-84-96 NUDOCS 8006240712 | |
| Download: ML20090A614 (40) | |
Text
.-
ATTACHME'lT A O
UNITED STATES OF AMERICA NUCLEAR REGULATORY CO:stISSICN SEFORE THE AMMIC SAFETY AND LICDSI'IG BOARD In the Mattar of
)
)
CONSLWERS PO'4ER COMPANY
)
Cockat Nos. 50-329
)
50-330 (Midland Plant, Units 1 and 2)
)
REPORT PREPARED SY S. FELD AND W. GUNDERSEN FOR THE ATOMIC SAFETY AND LICDSING SCARD ON ALLEGED DISCREFANCIES BE7dED CONSUMERS POWER'S RATE FILING OF JANUARY 31, 1977 AND TESTIMONY FRESENTED TO NE ATCMIC SAFETv AND LICDSING 30ARD IN WE M!OL ?10 PROCEEDING Intmducticn 22 haff, as directed by the Atcmic Safety and Licensing Board, has reviewed the rate filing of Consumers Power Company (Licensee) before the !!ienigan Public Service Comission of January 31, 1977. This rata filing is essen-tially a detailed justification for cata revisicn on the Consumers Pcwer's systan.
Counsel for All Intervenors Except Ocw (Intervenors) has enarged that significant contradictions exist between tastimony provided to the Atomic Safety and Licensing Board by tne Licensee snd reoresentaticns made before the Henigan Public Service Comission in the rate filing.O Clea rly,'
similar infornation and analyses do appear in the information filed in botn proceedings and certain differences in treatment can be obsarted. However, the Staff riview concludes that:
M l
}
The allegations were made at the :tarch 21, 1977 hearing sessicn in nis l
proceeding at 7r. pages 5033 thecugh 5045.
j l
4'or? -
gfz.Y#712 8006 ten)im 1tr
-2 r
1.
The discrepancies have a negligible effect on the conclusions reached by the Licensee in this NRC proceeding and in no way would alter those conclusions; 2.
The discrepancies do not produce any systematic of as, i.e.,
where differences were cbserved, the different treatz:ent in the NRC proceeding was not always beneficial to the Licensee's case relative to the treatment used in the rate filing; 3.
The discrepancies, wi-h the exception of a 'aw 7.inor ernes, are fully exp ainacle in :ha:.ney ei-her reflect (a) a basic
- nilosognical difference in -he intant of 2e informa:icn pre-sented, or (b) differences in the cut-off data used to prepare the analyses which precluded the input of more recent infonnation and management decisions.
I.
Staff "teview of the January 31, 1977 Rate cilinq The Staff has identified those areas in the rate filing that centain material relevant to testimeny presented by the Licensee in the 'IRC pr:ceeding and has reviewed them for c:nsistency.
This review included meetings and discussions with the Licensee in order to obtain additional infonnation.M In all, five areas for review have been identified:
l t
U A reeting was held between the Licensee and 2e 'IRC Staff in Chicago on April 5,1977.
The Licensee has orovided tne 5:aff with infor ation it recuested in letters of April 13, 1977 and May 10,1977 (distributed at hearing on that data) from the Licenset to the 3 card with cooies to all parties in this proceeding.
- 1.
fleed for Pcwer cortcastad energy and sewer leads, and I
capacity planning, s;:ecifically treat ent of sales to co-ops and municipalities, and plans to temporarily derate Palisades; 2.
Alternative Energy Sources - Coal fired generating plants, specifically projected coal prices; 3.
System Relia:111 y a::d Resene.Mrgin Analysis - scecifically randem cutage ra:es; 4.
Cos: of Replacement Pcwer (delay costs) - s:ecifically planned capacity, fossil fuel costs, outage rates, scheduled maintenance, heat rate, sales to ca-cos and municipalities, nuclear fuel costs, and use of differen: todels.
5.
Treatment of Decomissioning Costs.
1.
NEED FOR POWER - Forecasted Energy and Power Loads and Capacity Planning The material in the rate filing pertinent to these issues appear in the direct testimony of.t.
E. H. Kaiser, Mr. J. M. 3rager, and
'tr. P. L. Sickel.
A.
FORECASTD E?!ERGY A:!C PCWER LOACS In W. J.
'4. Srager's testi.mny there is a ciscussion of :rojected load factors, energy sales, energy requirements, efficiency facters,-
l
M
-s y
s.
N 4-and : ear. Icad devancs cr:ug-1926.
These ve'ues, as eil as 5--
ciscussion of mes, are compiatelj ::nsistant 412 Oe '.icansee' "-
presentatica at the NRC hearing s N
In Mr. P. L. 31ckel's testi=cny them is' a discussien of foreca=
utnocology and projected grosta ercugn 1986 by major cust:mer class.
This sresentation is tsully cettsistent nith de war-J1 71 1977 Aancran: : =s Envirer. enta] Re:ce. and me -i sc: tas ti-cf 7. '. Bickei at ze 'iRC tearing.
In Mr. E. H. Kaiser's testimony, peak load demand forecasts are used in his Exhibit F2 to deveico projected reserve margins.
h
- eak icad forscast is identical to eat used by Mr. Brager and i---
the NRC proceecing.
3.
CAPACI'( PUNNING With' respect to capacity planning, Mr. Xaiser's Schedule F1 appee.e-in the rate application reports major capacity additions, chanm...
and retirements through 1986.
I B e planc : safe of 60 S of Camchell 3, 74 :M of Midland 2, an=
98
- of Midland 1 are identical as bet:netn me rate filing and Cp's cacacity pianning as described at me NRC hearing.
l 9
ye gy 9'r
-em-
+
e ap 9 yy v
w e
.S.
Mr. Kaiser's Schedule F1 reports the retirement of Morrow 1 and 2 in 1983.
Tnis results in a reduction in cacacity of 65 MW.
Tnis decision was neached after the Licensee filed its testimony in the NRC proceedingY and is not incorporated in t:he Licensee's case cefore the NRC. However, if it had been, it would have resulted in a greater need for Midland then was presented by the Licensee.
Mr. Kaiser's Senedule F2 ; resents CP's net capacility tnrcugn 1986 -
the folicwing differences are noted becseen tais exhibit and values used in the ilRC ;:receeding:
1.
Rate filing indicates an additional 11.W derating on Palisades frca 1977 thrcugh 1980 due to cooling tewer recuiremenu.
2.
Rate filing indicates a 10 W derating at Big Rock frem 1977 through Ig84 due to ECCS limitations.
l 3.
Rate filing indicates retirement of Morrew 1 and 2 cessencing in 1983 of 66 W.
J#' The testimony of the Licensee and the ?:RC Staff aera filed in this preceeding en Novecter 5, 1976.
Final decisicns with regard to the rate case application were not reached by the Licensee until tid to end December 1976. Uedated =at Mal was not cresented in the ?!RC proceeding.as its effects were judged by the Licensee to be insignificant.
The Staff concurs in tnis conclusion reached ty the Licensee.
d
. The above three items are not c:nsidered by the Li:ansee in the MRC precencing because they were decisi:ns :r.ade af er the testi-
- nony in tae NRC proceeding was filed.
(See fcctncte 3). Mcwever, if they had been incorporated into the NRC proceeding, each item wculd have enhanced t::e Licensee's need for the Midland units.
Two additional discrecancies exist because the rata filing is esti atinc. sinter net ca: ability.vhereas -he '!RC :nceecing is ::n-ce*1ed mith the su::ver net cacasili y.
~~ey are*
159 !".
sart er carate; and a 159
.'*J -educticn in net ca= ability in 1983 because that portien af the Laddington sale terninates in 'ucust of 1923.
Thus, the rate filing shews higher capaoilities because the sumer derste is not applicable to winter esti:na es and whe-eas the additional Ldedingt:n cacacity will be available for t.9e win:?r peak of 1983, it will not be available for that year's sumer ceak.
The Staff agrees that the sumer ceak is the relevant peak to use in the NRC preceeding to determine reliability and that these differences are fully justified. A aiscussion of *he sumer derate and teminaticn of Luddington sale appear in the Licensees Envireneental 9eport, p.1.1-20, and Table 1.1-8, resoectively.
In all other respects, including the pr:cesed derating of the Palisades 'Jnit due to stet:n generator tubing problens (71W in 1973, 35 W additienal in 1979 und 1980, and a.::rclete :u age in 1951 and 1982), tne rate filing and CP's ecsition at the 'IRC hearing are identical with eseect to cacacity planning relevant to need for ocwer.
~
. 2.
AL~ER*lATI'IE E.'iERGY SCURCES - Projected Coal Prices Projected c:a1 prices are imoortant to the *:RC case in two major respects:
coal prices imoact on the cost of tiidland vs. coal fired alternatives, and coal prices impact on the cost of delay as used in the production cost runs.
This discussicn is ifmited solely to the treatment of coal prices in the rate filing as they relate.;
the alternatives analysis. A :cre deta' led discussion :n coal pri:es as : ey i=ac: cn the ecsts cf deiay wi'i te cresented in Secticn 4 of this re: ort.
For the alternatives analysis, the cost of new y c:ntracted c:ai t
is the relevant censideration and the testimony by Mr. R. Wilkenson in tne !!RC hearine oro. des tne basis for these projectad values.
The discussion on coal prices in the rate filing a:cears in the direct testimony of :ir. J. M. Srager ard Mr. J. E. 'lan Reenen.
Their concern is to project the expected averace cast of coal for each coal fired unit on the CF system. These data are necessary to estimate revenue requirements which are, of course, critical 1
to a decisien on rate relief.
They are not, hcwyer, c:mearable to the estimates develoced by R. Wilkenson.
Clearly, tne averace cost reflects a rfriad of factors in additien to the cest of newly con-tracted coal.
Fcr example, the values cresented by 3rager anc Van Reenen nast censider the mix between existing and new contract coal, the point in time at which new centracts replace old enes,
, shifts fr:m hign sulfur to icw sulfur c al, and shifts in ccal supplies frem cce ciant to another.
Each of these factors will cause the average prica and resulting escalation rate to vary from those used by Wilkenson in his testi:cny.
Table 1 cresents the forecasted coal prices by generating plant fcr the pericd 1977 thr ugh 1982 -as deoicted in the rate filinc. L 1 Tae ef'ect
-# :hese fac::rs can be seen by reviewing saveral :f :ne data :oints.
For example, the price of delivered coal to Xarn 1 12 is forecasted to increase by aimos: 55" between 1977 and 1978.
If an existing centract were to be in for:e between :nese two years, :ne wculd ex:ect escalatica cf 12." based on Nii%ensen's testfrony. Mcwever, in actuality these units will begin switching to icw sulfur c:a1 in 1977 with ccmoiete c:nversien by 1980.
Thus, the resulting value of 51.81 which a: pears in the rate filing reflects that portien of Karn's coal supply. subject to the higher price of this new lcw sulfur l
coal.
Alternatively, the rate filing shews less than a ai escala:icn rata in coal deliveries to Campbell 1 12 in 1973.
This escalation is well belcw Wilkenson's assumed 125 escalaticn because lower cricec l
coal fran 'deadock 718 will be diverted to Camobell 1 & 2 in 1978.
l
- Testimony of J.li. Brager of Censumes Fewer Co. before the 'if enican l
-Public Service Connission, January 18,1977 Exhibit JMS 9..
a
~~~
"* ~' ~
~ "
.g.
Tacle 1 - Coal Prices 2. aport in Rata Filing l
1977 1978 1979 M
1981 1982 (COST IM CENTS PER MILLION 8.T.U)
- leadock 7-3 100 145 162 178 206 227 Karn 1-2 117 181 199 218 211 255 uhiting 1-3 132 150 155 220 2:2 263 Car:beli 1-2 1:6 110 121 134 127 1 52 Cabo 1-3 100 137 154 194 212 211 1
l Cobb 4-5 100 137 152 194 2'd 241 l
Camobell 3 222 256 302 Fcr these reascns, it is not oossible 3 c:rcietely rec:ncile 'itikensen's estimatas on new scurce c:al with the coal data cresented in *Me rata filing. Such a reconcilation is not achievable as the :urcoses for which the ccal cost data are being used are different in *he 0.c croceedings.
For the rate filing, average coal cast data for each CP unit is required.
These coal costs rsflect the many factors discussed above.
For the NRC proceeding, the appropriate coal c sts for an alternatives analysis is the cost of newly contracted coal.
So while the coal costs differ in the two sroceedings, the acclicatien of each is c:rrect.
o It shculd be further pointed cut tnat there is an ex:: licit statement in
'lan Reenen's tastimeny that in developing his estimates, he assumed -tal price increases of 53 annually for 1977 and 1973, and 4 annually fer 1979-1982.
Rose real price increases represent the exact real price increases used by !Jilkinson in his testincny before the 'IRC.
Bus, while assoluta coal ccsts in the.ao pr:ceedings may differ, t::e trea=en: cf escalatten is censistent.
3 - 5?5 I'! RE'.:A3:L:7' A::0 ?!3ERVE :' ARC-::! A:'.?.LYS*5
' vesti;ation revealed tha the use cf rancem cunge ratasE by Ocns;.rers j
P:wer Cxpany for the develecment of recuired reserie margins was essentially c:nsistant in 'acth the !!.C hearings and the January 31, 1977 rate filing.
In totn cases, the imcact of historic outage ratas and projected cutage estas :as avaluatad to reflect t.e sensitivity of randem cutage rata variations as related to the reliacility of the systam.
The cnly ranece outage rate variation bet:seen data employed for the rate filing as c=::arad to the 'tidiand case was the assigned historic randem cutage rats of.he 3ig Rock (71 :ill) unit.
The random outage rata f:r Big Rcck used for the tiidland hearings as 29.35 as ccepared to 13.5% in the January 31, 1977 l
rate filing.
This historic rata of 18.65 is the correct number and its acclication in the Midland proceeding testimony wc!!d favor the delay of i
5# Randcr.: outage rates include forced outages and short-tern maintenance outages.
Short-tern maintenance cutages are,-in effect, for:ed cutacts that can be ;ostcened Ocytnd the next weekend if necessary anc, t trefore.
do not affect operating reserve'recuireren s but us :s facterec into required installed reserve calculations.
the Midland Units but would be negligabie adjus=en: resulting in a decrease in reserie margin recuirements of only 0.225.
Other minor variations in input parameters for the loss of load probability studies were:
1.
Slight sariations in the planned maintenance schedule 2.
Retirecent date of Morrow Units 1 and 2.
Maintenance senacules are revisac frequently in mos: :cwer systems.
Cne reason is the im:act of unforeseen f:rced outages that cc:ur and, while the unit is shut dcwn during the forced outage, certain r utine maintenance functions will be perforced that will effectively reduce or delay the scheduled cutage at the later date.
This prudent practice is widely used because of the c:vicus ecencmic benefits. Another reascn for revised maintanance scnedules is the revised delivery datas of reclacetent parts i
needed during the scheduled overhaul.
The maintenance schedules used in the ::RC hearings vary slightly frem those' used in the rate filing for j
the years 1981, 1982, and 1983.
Tnese minor variations would not affect the required reserve margins.
Morrew units 1 and 2 were assumed to be in seriice througn 1986 in the Midland prcceeding LOLP evaluations while, in the rate filing, these two units were retired in 1983.
Since the total :apability of tne two units l
is only 66 W, ne resuitant affect is' negligible.
Hcwever, the retirement s
N
,-v--
- ~
w-w-mw
=w e-m
- -r
~
~
i 12-of the t'crr w Units would favor :entinued constructicn of the.'lidland f
units anc, therefore, was a conservative application in deter =ining the need for pcwer in the Midland preceeding.
5catements made by Mr. E. H. Xaisek before the Michigan Public Service i
Cc mission on January 31, 1977, in regard to the applicatien of randem i
outage ratas as they affect recuired reserve c*argin are c:nsistant with the retaccol:gy e picyed by Mr. Gord:n L. HeinsU ef:re tne Licensing b
Scarc at the.'"dland Hearings anc also c:nsistant wi n the inf:rmatien contained in the Envircemental Report Supplacent.3/
4 - COST OF REPLACEMENT PO'AER (DP. LAY COSTS)
Attacugn the rate filing not c:n=ern itself witn ne :csts of delay, it dcas ;rovice much information that is pertinent to the Licensee's analysis of this subject as presented at the MRC proceeding.
- Clearly, there are certain discrepancies between the two cases.
Mcwever, as this review will attemot to demonstrate, all of the differences are fully explainable.
Furthermore, even if the rate filing data had.
been used instead of the data actually used at the NRC hearing, the effect on delay costs would have been negligible.
In fact, the Licensee has adjusted for most of tne inc:nsistencies and the and result is Only abcut a 25 reducticn in delay costs.
5/ Fage 5, Direct Testimony of E.H. Xaiser Paragraph II, pp. 8 and 9, Testi..ony of Garden L. Heins.
/ Table 1.1-10, Figure 1.1-2, caragraph 1.1.3.
-e w
9 m
e
_--y-.3 p
w-
.4-m
. A.
TREATMCT CF THE SALE OF PCRTICriS OF :CLA 10 AND CAMBELL 3 C.1P.ttm Both the rate filing and the TiRC preceeding acknctsledge identical sales and buy-backs of portions of Midland Units 1 anc 2 and Campbell 3 to i
municipalities and co-ops. This consistent treat:nent was already discussed in Section 1 of this report.
Mcwver, when Censumers ?cwer calculated the costs of delaying tiidland 1 and 2, it did so with respect to the full cacability of these units, irdependent of these sales. The Staff agrees, t
. hat in order to assass the f ::ac: cf caiaying -he cceration of '4fdland, to:21 cutput of the plant :=st be censidered, because *.ne delay of.tdiand will affect the total output of tnese units and the effects will extand beyond the CF systac.
Therefore, what accears to be a discrepancy is, in the Staff's coinicn, a basic philosophical difference in the ;:urpose of tne inforsati:n presentac.
3.
rat:DCM CUTAGE RATd l
Both the ra:e filing, and tne preducticn ecst rms used in the !GC oreceeding rely on projected esneem outage rates.
Of the 27 fossf1
~
units on the CP system, the outage rates frem both sets of data are perfectly consistent with respect to 18 units.
However,'for the remaining 9 units, slight discrepancies are noted. A tyof cal dif-ference can be cbserved by reviewinc the outage ratas recorted 'er Karn 2.
These values are recreduced belcw:
/
j
/
. HRC Proceedian Rate Case Pmducticn Cos: R':n l
1981 1982 1983 1984 1981 1922 1983 198a Karn 2.0744
.0744.0744.0744
.0676
.0744
.0744
.0744 The values reported in the rate case are constant over the 1981-84 period whereas in the production cost runs the 1981 value is icwer by.0068.
'4here diffe~"ces are noted, the difference reflects the fact that for j
l the production cost runs the randcm cu age rates as develoced by C?'s o;: era:icns divisicn were used whereas fer the ra:a filing : constan.
value was used.
/
s i
!n any event, the effect of differences of such small magnitude on delay costs is truely minimal.
In fact, even if the differences were l
more significant the effect on delay costs wcu;d still be of miner h
importance.
This is so because the delay costs are calculated as the difference betwen creductica costs incurred wi2 Midland on line as scheduled vs. Midland delayed.
Since the same randem cutage rates would be used in each case, the effect of using a different set of j
outage rates in calculating delay costs would essentially cancel out.
y O
l C.
SCHECULED.wAI.'ITEi!N CE Both the rate filing, and the creduction cost runs used in the 1RC proceeding provide esti: nates of scheduled maintenarce.
Of the 27 fossil units on the CP system, the scheduled c:afntenance from both sets of data are cerfeccly censistent with respect to 23 units.
For the remaining 4 units s1 frat discrepancies are noted.
For three of these cases the total number of weeks of scheduled :afntenance are the same over t.He 1981-82 :eri:d with :he discreca.ncy cnly cc:ur-i g in the assignment of sc.leduled naintenance o a s:acific year.
In the case of 'deadock 8, 4 additicnal weeks of scheduled maintenance were planned under the prcducticn cost runs.
For clarification, the differences are reareduced below:
'!RC Proceecinc Rate Case Preducticn Cost : tun 1981 1982 1983 1984
,1981 1982 1983 1984 i
Camp 1 4
4 4
3 3
a a
a
' dead 8 4'
4 4
4 4
3 a
a
'Whi t 1 2
2 2
6 5
2 2
2 l
Whit 3 2
2 2
6 2
2 6
2 i
il
~
l t
16-The explanation for *hese dif'erences rests en the availability of 4
updated infor aticn.
(See fc:tnote 3).
The new schedules were availasie when the rata case was being :recared but were not available at :ne t.m the Midland case was prepared. The Staff recogni:es that scheduled l
mafitenance is an iten constantly subject to revision and up-date.
In any event, the differences are very minor and because the sare scheduled maintenance wculd be used in the Midland en Ifne ard Midland delay cases, the ef#ect cf us'ne di'ferent scheduled aintena-ce values in ca!culating ce!ay c:sts wcuid be cegif tibia.
D.
HEAT RATES Soth the rate filing, and the production cos: runs used in tne.'IRC croceeding prcvide esti.ates cf orojected heat rates.
In the rate casa, a ecdel using actual 1975 heat rates was used to deveios tne projected heat rates whereas 'n the '4RC croceeding a differen: medel which utili:ed actual heat rates over tne 1971-74 period was used.
The results of the two a:proaches producw a number of inconsistencies.
In'all, heat rates between the t'.e cdels are identical for cnly 2 units, the heat rates are higher in the rate case for 4 units, and lower for all other units.
Although the differences are many, tha size of the differences are srall.
In all but two cases, values vary by less than 5',, wita -:est of these bef-;g in the 1 to M range.
Tee largest di'ferences tanc to ec:ur areng those units for wnien the rate case resulted in higher values for the heat rates.
l
1 17-An important reascn for the differences is that each model assumes differer.t operating levels for the units and the 'a. eat rate will vary as a function of unit use.
In addition, the.moceis themselves have certain limitations with -eseect to plotting the heat rate curves.
The fact that heat -ates accear to be higher in the.'!RC oroceeding oroduces higher prc:ucticn costs than '.rould have occurned if the data ' rem ':he cata ' fling had seen asad.
Mcwever, cnce acain because the data are used in both the 'if dland as schedu!ad and 'ifdland delay cases, and differerias are the focus of the cost of delay analysis, tne net effect is =nimi:ed.
E.
GH CUTF'T FCR PALISACES AiG 3:G RCCX Tne rate filing anc the.',;2C pr:ceeding centain f: recasts of the ?.4h output of..iisades and Big Rock in the 1981-84 time ceriod.
The estimates in the or: duction cost runs overstate thesa out;:uts relative to t6e rate case.
- or Palisades, the difference is minor, on the order of less than 0.5"..
For Sig Rock the differeace is aceroximately 8*.
To the extent these outputs are overstated in the.'!RC proceeding,
(
the costs of dalay are understated.
i
.+.
er
.9 m
g m
.,ym5 9,w.-9
,.wj
.w
_,,w,,
,p,,
,m e
e_,
)
With resoect to Palisades the difference is due solely to the canner in which Palisades cu:;ut is entered.
In the rate case, Palisades MWh cutput is a given, provided by the nuclear production.cecole at CP.
In the production cost runs this value must be calculated as a part of the cecuter run. The oregramer cannot exactly duplicate the desired number because the computer rules him.
In the :ase of Big R:ck, the same arcoism cust be verc:re.
"cwever, tnat adjustrene d:es not fully exclain the much larger discrecancy which ext::s here.
Referring back to Section 1 of this reocrt it is noted that the rate filing has taken ac::unt of a 10 MW derating on Bic Rock that is not reflected in the ?!RC proceeding.
This discrecancy exists becausa the decisien to derate cc:urred aftar the 'IRC asa was prepared.
This c:upled with the minor inaccuracy pecduced by the cc: cuter l
fully explains the apparent discrepancy.
F.
.WCLEAR PdEL COSTS - PALISADES, SIG RCCX, A :D MIDLA:iD l
1 - Palisades - The-nuclear fuel costs for Palisades are aaproxica:ely 45 higher in I?9' and 7% lower in 1983 and 1984 than those reported in the rate filing.
The discrapancies are due to di'ferent PWh outputs assumed in the two cases and the fact that these values are continually updated and the rate filine whi:5 was or:duced at a latar data reflected mere recent data.
Mcwever, adjustina for these differences will not affect the esticate of cost of delay.
L 6
L
.o 3
)
Palisades will coerate at its naximun level possible indepenrient of whether.'ifdland is delayed :r not.
Consecuently, Palisades cannot contribute to the increcental cost of delay.
11 - Big Rcck - The nuclear fuel costs for Big Rock are significantly Icwer in the NRC proceeding thar. those recorted in the rate filing.
For examole, in 1984 the estinatad c st is less than one-third that recorted in the cata fi'irg.
The ex=1anation is that the c:st of 3f g F.ock ger.eration has nc: been us datad in the recucticn cast runs.
This is justifiable because this data is unnecessary input to the cost of delay.
Te cut:ut of Big het is fixed f:r the as scheduled and delay cases and thus, when the difference is taken, the costs will wash :ut.
iii - Midland - The Midland fuel ecs:s for 1981-84, exoressed in mills /Cih are significantly higher. in t3e production cost run than those recorted in the rate filing.
This is so, because t.te production cost runs reflect the uodated nuclear fuel esticates of February 4,1977 that was submitted at tae NRC hearing whereas the rate fili,1g is predicated on the earlier estimates of November 1976.
i l
If the values reonrte.1 in the este #ilina were used in the creducticn cost run, the cost of delay wouid increase.
Bus, relative to the rate filing, these values a-e conservative in Petr estimation of delay costs.
. G.
PROJECTED FOSSIL FUEL COSTS The cost of delaying Midland is a direct function of the estimated fossil fuel costs on tne Consumers Pcwer system in the 1931-84 time I
period. That is, the higher the fossil fuel cost estimates, the greater will be the delay costs. However, because the same values are applied to both the as scheduled and delay cases, the effect of using a different set of values will te minimized.
Es;imated fuel costs are -ecorted in :ne Licansee's credue:i:n cast rans used in the.'!RC roceeding and in the licensee's rate filing before the MPSC.
01screcancies between the two sets of data can be O
cbserved.
However, in all but five instancas the differences are extremely minor, on the order of 1" cr less.
These differences are due to round off errors and a slight variaticn in hcw infiaticn and real price increases were handled:
e.g., rate case - assumino $1.00 per MBTU 'orice, a 125 srice increase reoresenting 65 inflation was calculated as --
$1.00 (1.06) (1.C6) = $1.1226 whereas in the production cost run, with the very same assumptions it was calculated as --
$1.00 (1.12) = $1.12 In any event, because of these factors, the creducticn cost runs produce slightly Icwer estima+.es than tacse accearint in the rate filing and thus, are conservative.
~
s 21 -
Nre significant fuel cost differen:es are noted for Karn 1 and ?,
Camcbell 3, Weadeck 1-6, Karn 3 and 4, and Gaylord 011 1 Gas.
With respect to Karn 1 and 2, the croducticn cost runs have about a 26",
higher < cal cost for the 1981-84 period which tands to overstate delaw costs.
The icwer value used in t.he rata case reflects a 'nanacement decision, made after the NRC testixny was prepared.
(See fcotnote 3).
- can:ract for these units' coal sacoly ccw at a icwer ::st ratner 2an wait until a later ca:a.
The :recucticn c:sts ans On enich :he Feins celay costs are based are in errer as they do not use the coal cost data for the Karn 1 12 Units : resented in the cata filing.
'41 t.1 res:ect :: Campbell 3. the pr:cucticn ecst runs have about 105 higher c:a1 esti: rate f:r the year 1584 anich also overstates teiay costs.
Tne icwer value, u' sed in t".e rate case, represents the estimated c:st of coal to Campbell 3 based on a :nore recent management decisi:n (See footnote 3) to begin ::ntracting for it new.
In the l
production cost runs, the estimate was tased on an earlier management decision to contract for deliveries at a later date.
In addition, included within this estimate is the higher cost of ccal to Campbell 4 which was scheduled to c:ne en lire in 198a.
This plant had been incefinitely delayed prior to the filing of Consumers testiecny in the Midland creceeding Tne production :cs: runs on which the Heins delay costs are based a-a therefore in ermr as they do not use the coal cost data for tne ;acchell 3 unit presented in the rite fili'1g.
1
\\
l
~
22-
- lita respect to 'deadock 1-6, and Karn 3 & 4, tne rate filing has abcut a 2C higher fuel cost estimate for the year 1952 which : ands to under-state the ecsts of delay.
In the pecduction cost runs, the Nrrew fuel j
costs were incorrectly inputed for these units whereas in the rate filing the correct values were used.
'Jith respect to Gaylord Gas and Oil, the rate filine assu=es that for
- ne years 1931 to 1983 tnesa : nits will :cerata 11 ent.*s on ::as acc 1 month on oil, whareas in the procuc-ion cost r;ns :as is assured l
for the entire cerf ed. Since oil results in higher fuel costs, the procuction c:st run is consereative relative to the ra.a fili::g wita respect to delay costs.
f H.
CONCLtJ5ICri - CCS7 CF CELAY The productica cost runs which support the Heins testi:ncny centain two errors in coal costs ef eh produce a ncn-conser/ative effect n delay cos ts.
These are the coal costs for the Karn 1 & 2 and the Ca..obell 3 i
uni ts. The Licensee indicates that it examined the effects of these l
coal cost incresses and~certain other rate case assumptions and fcund the effects to t;e negligible.
l A production cost run was :nade on February 16, 1977.
It inc:rocrated the rate case assurrotions on Big Rock cut:ut, Camotell 2 and (ar9 1 & 2-l fuel costs, the retirmaent of.*4cerow, and Palisades fusi costs.
Cn a 1981 present worth basis, these adjust: rents resultad in abcut a 25 1
l t
l O
23-reducticn in delay ccsts over these rescrtad te the A:=ic Safety anc Licensing Scarc in revisad Exhibit 14 (Tasticeny of G.L. Meins).
Basid l
l cn this analysis, the Licensee concluded that the effects.:ere no:
significant and for this reason, it did not update the Heins testimony in this area.
The Staff has reviewed the Februar/ 16, 1977 mreducticn ecs: run and has concluded that the inpact of the varicus adjus-ents, including reduced coal costs for Car.:ebell 3 and '<arn 1 & 2 is Mnfmal.
l l
htc ccccutar run cid nc: correct.ne 3:licuiig ciffarences:
(1)
Treat: ent of 'idland capacity (2)
Randem cutage rates (3)
Scheduled maintenance (1)
Heat rates (5)
Big Rcck fuel costs (6)
Fossil fuel ccsts a.
handling of escalation and ecund off errers 1
b.
Wesdock 1.6, and Xarn 3 & A.
l The Staff concludes that adjust:nents are not required in these instances because: (a) with respect to item (1) it would be inc:nsistant wit 5 3
the desired purcase of the creduction cost run; (b) with resuct.o items (2), (3), (4), and (5), ne effect wculd be negligible: and
(:) with resoect to fa and Eb, it would only tand to crir? the estimated delay costs back tcwards their initial values.
~
. 5.
~tECTIT OF DEC0 tat!SSICII:G CGS'S The caterial in :ne rate filing ;:ertinent to this issue ac;: ears in the airect tastimcny of Mr. J. S. Ferguson.
I Mr. Ferguson estinates the cost for ent:mbent at the end of life, and the annual cost of sur<eillance, beginning at that ti.e, for all nuclear ocwer clants already in coeration en the C? systam.
- Bus, nis estinate is acs11: scie Oc the hiisades antt Big Ecck Doin: 'lu: lear P' ants.
D.e iaiue he ar-ives a: is 245 of the :stal cacital c:s c'
- nese plants.
~his translatas to an estimated cosa cf 567 millica for
+
teth units.
However, since -hese costs are not incur *3d until the year 2000 for Big Rcek Point and 2007 for Palisades, because that is w en their acerating licenses exsire, tnis estimate reFects tne a
c:s: in collars accroxicately 30 years of' inta the future.
In tne '4idland proceeding, the licensee has estimatad the cost of deccmissioning the Midland 'luclear Pcwer Plant, Units 1 & 2 at !a3 million.
There is hcwever, one fecortant difference between this estimate and that developed by Ferguson.
The Midland estimate is the 1981 cost of decemissiening in 1981 dollars.
If one wished to c:ecare it with Fergusen's value, cne would have to calculate the c st at Me end of Midland's useful life. Acolying the same escs'atien rates used by Fer7:sen (6-1/2P, er annum cut thrcugh 19Ba and 5P, per annum thereafter) results in a future cost of abcut 5460 millien in the year 2015.
5 i
=-
,5
~
. Tnis value is significantly larger than the Ferguson estimate an::
suggests that in the !!idland preceeding the dec:::r.issi::ning esti ate is nign relative to what wculd have been the case had t*e Fercusen analysis been used.
Consequently, in the NRC proceeding the dec::missioning cost used dcas not bias the analysis in favor of-Midland.
l "cwever, thers are otner 1 cortant differences te:1een :ne two estimates that bear mentioning.
cr exammie, the <idlanc cec-...izsi:ntnq ::s:
assumes c::mplete dismantling wnich is a higher level of dec:missicnina than that assa:ed by Ferguson. Also, when the Midised est mata is i
i future worthed for ccmcarative purposes, it is future valued be seen l
3 and 15 years :ncre than Big Reck Point and Palisades. CorrectSg 'or l
l each of these factors tends to bring the Midland estima:e closer in line with the Ferguson value.
II.
Staff Resconse to the Allegations of Or. :tichard J. -'m At the hearings conducted in Chicago the week of May 9,1977, testimony o
was presented by Cr. Richard J. Tim which identified the folicwing alleged inc:nsistencias between the rate filing m.atarials and t.9e Censurer's testfecny presented in the Midland cr:ceeding:
l s'
~
-2s-1.
Differences in Cametelt 3 Coal Prices (Midland Interiences' Exhibits 50 and 51).
l 2.
Differing Treat:nent of Capacity Sales of Midland Units 1 and 2 and Cam; bell 3 (Midland Interrenors' Exhibits 52 and 53).
i 3.
Differences in Plant Capacity Factors (Midland Inter /ences' Exnibits il and 55).
t l
In accition, Dr. Ti :n alleged at the hearing that Censumers Fewer C:mpany l
was forcing bulk purchases of pewer in the Midland delay casas and therecy distorting delay c:sts.
This contention is also examined in this pcrtien of the reocrt.
l l
1.
DIFFERE' icd 5 IN CAMPBEU. 3 COAL PRICES l
At the hearing, Dr. Tim expressed concern that the Camcbell 3 coal costs were being inflated fer delay cost purposes.
(Tr. 5995).
Cn pages 20-21, (Section 4, Item G), the Staff identified the dissrepancy in the 1984 fuel prices for coal delivered to the Campbell 3 unit and presented the bases for the higher price as reportad in the pecduction cost runs.
Furthermore, en pages 22-23, (Section 4, Iten H), the Staff reported the effect of adjusting for this difference, as well as other discrepancies, and noted that delay costs would be reduced by accroximately 25.
l l
l
e'
. As reported in Midland Intervenors' Exhibits 50 and 51 and during cross-l examinaticn, Dr. Tics also expressed cencern over the 1981 thrcugh 1983 coal prices for Campbell 3.
Tne Staff centends that Dr. Tim is in error in this regard. First, when Dr. Tim calculated the current dollar Campbell 3 coal ccsts frem the Van Reenen Exhibit, he assured the real dollar estimates reflected 1977 base values rather than 1975 basa values. Bus,
i j
he ignored an additienal year's escalation that should have been added
- the Van ?.eenen vahes.
Ccrncting f:r this results in te ra a 'iling values being slightly higrer nan these re;:crted for -he 'ticlanc rocaecing wnich if anything wculd result in icwer delay costs in the Midland case i
than would have occurred had the ccrrect Van Reenen values been used.
Furthermore, rather than use the Van Reenen tastimony which required l
l certain calculaticns on Dr. Tim's part, he c uld have used 'fr. 3rager's Exhibit JMS-9 frem the rate filing which already reported these values in current dollars.
Had Dr. Tim used these data he may have realized that his Van Reenen calculations were in error and that,, relative to the rate filing values,1:he Midland case treatment of Campbell 3 coal prices between 1981-83 is conservative as to their impact on delay costs.
~
L l
2.
DIFFERING TREATME".T OF CAPACITI SALES OF MIDLAND UNITS 1 AND 2 AND CAMP 9 ELL 3 Midland Intervenors' Exhibits 52 and 53 nere initially prepared for the rate filing by E. H. Kaiser of Consumers Fewer.
Or. Tim asserts that the treat-ment of delaying Campbell 3 on these Exhibits support: his contention that,
.]
1
~
\\.
l l
in delaying a facility a portion of which has been sold to a third party, it is appropriate to reduce the plant's capability by that portion being sold to the third party. Consequently, Dr. Ti.m questiens the correctness
'of Cp's position that if Midland is delayed, the effect shculd be judged in terms of the total ca;acity of these units independent of sales to third parties.
(Tr. 5996).
It is de Staff's ;:csi-1:n that One :ur:ose cf CP's analysis.:ust be fully unders.:cd and exacined. C? is attameting to calculate the costs l
of delaying te Midland :: nits and in fact these costs would be spread over 100". of Midland's capacity and not just that portien cwned by the Licensee.
As explained on page 13 of this report, (Section 4, Item A), the Staff's view is'that the approach taken by Consumers is correct and that wnat i
appears to be a discrecancy is a basic philosophical difference in the l
purpose of the infomation presented.
Under corss-exmination Dr. Tim was asked to coment on the merits of CP's position as sta:ed :n page 4 of its April 13, 1977 letter to the Licensing Board and set :ut belcw.
n
~.
29-i, The rate filing is concerned only wi:h the cost of seriice and rates of charges to Consumers Pcuer cust::mers and there-fore locks only at Censumers Power's system; as such, it only considers the portion of jointly owned units which Consumers power is projected to own. On the other hand, this proceeding must consider the total cost or effect of a potential delay of the Midland units, and, as such, must consider their total energy output, not just that portion which Consumers Power is expected to own.
It should be noted that the buy-back t
provisiens for jointly cwned units are treated the same in both cases. Consequently, since the studies were made with different objectives in mind, their results cannot be directly compared; i
}
Cr. "'i m did agree (Tr. 5:05-6010) with the fundmental distinction being a
made in this quota and tnus the Staff believes that the '.icensee, the lRC S:aff, and the Midland Intervenors' all agree nat a cifference is warranted, although Dr. Tim believes that the underlying analysis in the Midland proceeding was nct adequate.
In sumary, the. issue appears not to be the existance of a discrepancy but rather the extent of the analysis required in the Mid!and proceeding in calculating delay costs.
In the Staff's view, the correct approach is the one taken by the Licensee.
s 3.
DIFFERetCES IN PLANT CAPACITY FACTCRS Or. Tim testified (Tr. 6019-6020) that substantial differences were evidence in the capacity factors of given generating units for a given year when comparing data developed for the Censumers Power Cen'cany rate 3
1
i
\\
30_
filing data developed for the Midland hearings.
Dr. Ti.m did not attempt to suggest nich, if any, of the capacity factors were :ost representative, but expressed concern that the existence of such dif ?cences established that inputs to the different ecmouter models used for the rate filing and Midland proceedings also had to differ considerably.
This ccmparison was presented by Dr. Tinn at the hearing in Midland Intirvenors' Exhibits 54 and 55.
~he Staff disagrees with Dr. Tim's conclusicn that t.1e differences in
- apacity factors can cnly be explained in terms of different incuts to the two ccrnouter models under consideration.
As the first portien of l
this report makes clear at pages 22-53, (Section 4, Item H), the input differences to the two ecmputer medals under censideration are negligible and have an effect of approximataly 2". en costs.
The prime reason for the capacity factor differences is a difference in ecmouter mcdeling.
The rate case model dispatches Consumers' own generacing units against only the Consumers' load.
Purchase and Intercharge eneraa are treated on a historic basis.
This type of approach has been consistently used in Consumer's rate applications to the Michigan Public Service Cxinission. Such an approach would not be correct for the celay costs analysis presented by Consumers in this preceeding.
To accurately develop taose costs, a ecmouter medel is required which dispatches the ecmbined
.Mehigan Electric Cecrtinated Systam (MECS) generation a;ainst the MECS load.
7
This is what Consumers has actually done in performing its delay cost calculations with its pecducticn cost program.
The cacacity factors for the Consumers facilities should de.rease as icw cost generation available from other MECS members would displace the higher cost generation of those units. Tnis is the behavior seen en Midla.nd Intervenors' 2xhibit No. 55 with two axceptions.
First, Camp:e'l i; nits 1 and 2 have increased capacity fac :rs.
Tcis is explainable as these are Censu.mes' icwest cost unhs and neule ce run harder to supply the ecmbined MECS lead.
Second, the Morrcw 1-4 units have a sharp increase in capacity fact:r.
- his is due to the fact that in the rate case, Wendeck Units 1 thrcugn 5 and (arn Units 3 and 4 are rur. harder : nan the.'!crmw Units since the Karn and Weadock Units are subject to a "take or pay" clause in their No. 5 fuel oil centract.
Failing to run these units would prcduce ecencmic penalties so they are run in the rate case cdel :.teraby Icwering the Morrow capacity factors.
The "take or pay" provision expires in 1981 and so would not influence the 1984 production cost runs which show a
- r es:endingly higher capacity factor for the Mcrrow Units.E
e -cePng of the "take or pay" arevision was not changed in tne rate
- 19 :r: gram for 1984 as that year, as well as all years beyond 1980 are
- nsecuence in a rate case apolication.
The modeling in the i
v::ac:f:n cost run for the Micland celay cost ca'culati:ns is cor ect, t
l 3
Cne other difference on Midland Intarvermrs' Exhibit.':o. 55 requires explanation and this is the capacity factor -aiated to Big Rock.
The capability rating of Sig Rock was assumed to be 61 M in the rate case study as compared to the 71 m rating used in the Midland hearinn __
rne assumed energy produced in the rate case study in 1984 was 4C9,0CC
.% hrs. as ccmpared to 44A.C27 Whrs. used in the Midland study.
The 5 aff has calculated tne ca:acity fact:rs f:r 3f g Rcck under the do P-assumstiens and fcund.ne casacity fact:rs set forth in Caiurm's C and
-~--
to be correct for the assur:stions made. So the Big Rock ca:acity fact _.
difference is readily explainable as related to differences in generat n nd rating. These di'farances are negligible in terms of their cost i. -
as was elaborated on in the first portion of this repert.
In sunnary, the differences in capacity factors are mainly attributabla_-
to the use of two different computer models.
The production cost ces=L 1lodel was the correct model to apply for the Midland delay costs. The rate case model is the one which has been historically used in Consura. ____
l rate filings. The Morrow 1-4 and Sig Rock capacity factors cannot be i
related to model differences.
Rather different input assumptiens were leade which are readily explainable and have negligible imcact en delay Costs.
,,----u-.
3.-en...,-
,-..--,~,,,-,--r-
..,.%y,,.
.-4,-+.-.
r FORCED PUROfASES CO.TNION Dr. Tim alleged at de hearing that Censwers ? wer was forcing purchases of bulk pcwer in their prcduction cost runs thereby distorting the c:s:s j
of replacement power associated with a delay of tne Midland IJnits.
(Tr.
5992-6004).
In his testimony, Dr. Tim referred ta a prcduction cost c:mcuter run numered C4-043 wHch did not include the "Furchase 10" category.E :n Dr. Tim's view, the lack of any " Purchase 10" in tMs ex: uter run su::cr:s his argument t.a: ~ nsumrs ina::rocriately incieded
brenase 10" '.- the celay :ases anaty:ed in ::is ;receecing.
Tne Staff has reviewed tne allega:icas of Cr. Ti.m and ccncludes that t.7ey are unfcuncec. The particular corputer run referred to by Jr. Tim, C4-C43, was cnly cne of a large nunter cf pr:ducticn cost c=cutar runs used by Consumers P::ner t: c:nduct sensitivity stuties.
- ts use wcuic net have been a;sr=riate in examining the Midland delay cases. Rather, that run and others wculd have been used to detar?.ine 2e accropriate level of " Purchase IO" for use in the Midland delay cases.
E " Purchase 1G* MTers to bulk power purchases which Censumers Power schedules to maintain a 20% installed reserie margin in the event that the Midland units are delayed.
4 i
e l
l 1
I i
l t
Y 34-A preducti:n cost ccccutar pregram attamots to redel the actual Operation l
of a scwer systam under given assu:!ed c nditiens of: demand, energy f:r lead, generation availability, purchase sewer octions, incre: ental heat rates, fuel costs, fuel availability, centractuti constraints, regulat:ry i
censtraints, and t-ans:sission limitations. At present, no excuter exdel i
has :een developed taat can :uplicate the actual Operation of a scwer systam under this series of given cceditiens.
Despito ce lini atiens of =deling, the pr:cuccien c:st c r: uter pr:g-ams avai!abie to the utility industry :: day centribute greatly :: the decisicn-maki::g pr: cess.
Varicus tecnni:;ues are ased to expensate for the li-itaticns.
The iteration cathed is one such tecnnique ased by the utility indust /
to :siler ce c::: uter Out:: ts of scecific : ara eters, sucn as "%rerase 10" ocwer.
By this rathed, an assurac capacity fact:r is assigned to the fir i capacity ;urchase to establish the imact, if any, on the Output of generating units having '<newn costs that are icwer than t:e cr:fected purchased energy cost.
If the results snow a reducticn in such icw c:st generation, another capacity factor is assigned in an iterativ e prccess until the proper capacity factor for the purchased firm capacity is established.
)
'Aith goed judgement and experience, tne pr:cer value can be establisted in a Itaited number of itarsti::ns.
l
)
35-(
f This is the procedure that Ccnsumers Power Cc=cany used to deter rine the proper ca:acity factcr to assign to the " Purchase 10" pcwer required in the 'tidiand delay casa prcduction cost c::moutar runs. Cc= cuter runs were made using three different capacity fact:rs for the " Purchase 10" pcwer.
l l
A zero percent capacity factor casa was run tc establish the maxicum generation l
l that coulc be expected from the Icw cost generating units. A 90 percent c:acity factor was then used ::, es ablisn the sensitivity and provide a basa frc::: anicn in:er::la:icn c:uld mininize tne w:cer of internions recuired :c esta51tsa :ne procer value. A 70 :er:en: ca:aci:y factor was i
fcund to be tne pr:cer assig =ent sinca the i=cac: on the icw ccst units was negligible.
\\
l Tne use of a 70 per:en: cacacity fac:cr :y Consumers Power :o deveico the cuantities of "Purenasa 10" required was ressenable and did not resui: in I
forcing any unnecessary purchases. Tnis can he verified by examining the several c:mputer runs ; sed in the iterative precess to deveico the 70 percent figure.
1 i
-J
/
o 36-The follcw-ng tabulation details the 1982 reduction in generation frem relatively lcwer ccst units wnen the "F:rchase 10" pcwr is assigned a 73t capac'.ty facter as c::mpared to a zero percent capacity fact:r: (Listing icwest cost units first).
Unit Total Generatien-Hrs x 1,000 Genersting Unit Ratino-MJ Zerot 70',
Cecrease Cac;tell 41 267 1,525 1,345 0
Can te11 *2 372 2,395 2,395 3
Waacccx +3 159 962 957 5
Weadeck (7
' 159 997 993 4
Ccbb f5 167 1,072 1,C72 0
Cebo f4 153 969 968 1
' hiting fl ICS 590 525 5
i
- 4hiting f3 133 792 7",8 1
I Whiting #2 106 676 571 5
Camobe!I #3 722 4,579 4,528 31 Cath f2 63 327 323 a
l Cobe f3 68 347 341 5
Cobb #1 68 345 340 5
Xarn #2 254 1,641 1,613 23 Xarn #1 255 1,458 1,ul 17 Toal R2cucti:n =
110
-,y-,
,-..__,.-..,_-.,_,--.--,,_,.----y---y-
_-,.-vy._
.-,-.,,--,w_,-
._,_c~--,.
.,.3--,,,m_,.-.
--. - - --, - -w
s
-371 The above data is extracted from the 12/31 delay case where 190 W of
" Purchase 10" pcwer was required to maintain the 20 reserve margin.
The total energy purchased under the " Purchase 10" demand of 190 N for 1982 was 896,216 hhrs.
The 110,000.%hr. cuttac,k en the relativeiv Icw cost units represents approximately 12.3 percent of the energy purchased.
Standing alone, the above figures may suggest that a 1cwer capacity factor than 7C'; could be justified to avoid forced purchases..usever, ot::er tiements must be factered into the ultiesta cenclusien. Fcr exae:ie, wnen " Purchase 10" pcwr is available during the peak hours (.is it was),
there is less need for pumped storagg capacity to meet the peak cemands.
It folicws that less pumping pcwer will be required during :ne off peak hours to provide this ;eaking energy and a corrascending reductice in generation frem the icwer cest unit results.
Ganerating u.11ts that are scre competitive (economically) with " Purchase 10" energy at a given hour, may not be czpatitive when the substitutien must go t'1 rough the pumping process.
The penalty factor for a given unit to provide punoing power is about 1.4.
For example, assuming purchased power at 20 mills per kilowatt hour, a generator with an incremental production cost of la 1111s/hhr is the econcmic choice between t'e t'.Jo sources.
Mcwever, if the energy aust be generatec off-peak to su;oly pu.cing pcwor to be used the following day on-peak, then the generatien 4111 cost 18 x 1.4 or 25.2 mills / kwhr ccmpared to " purchase 10" at 20 mills /kwnr.
. Naturally, the ' Purchase 10" pcwer is cheacer and sh:uld be used aven thougn the initial cost cf the geceration is only 13 tills /bhr.
In sunmary, the Staff does not concur with Dr. Tinn's conclusion thac Constzers Pcwer Ccmpany was forcing "?ur.hase 10" pcwer.
Rather, Censumers assigned reascnable values to the bulk power capacir/ required as well as the capacity fac ce assigned, and thus the delay costs wen prc:erly 3
alcuistec.
4 Cerciusi:n Tne Staff has fcund ne discrepancies bet.een the rata filing anc :ne Consumers Fewer testimony to warrant fur.her :ansidentien by tais Board.
In general, tne allegaticr.s made by Dr. Tina are eit.er enf:undec or c:nsti, ate a difference of epinion as :c the accre; riate eccel to,se for calculating delay costs.
In car.afn instances, the Staff has detac:ac inconsistencies and errors in the natarials reviewed. These inc:nsistencies 3
and errors appear randan in nature ano es not reflec: any intent :n.he : art of the Licensee to introduce a systemati: bias.
The impac: of these 1:aas on the conclusions presented by the Licensee to this 3 card is minimal.
7,,.-
-n--
-,.,...y.-
r
m Al l Au1Mt.il 5 s
UNITED STATES OF AMERICA 2fCLEAR REGULATCRY CCfMISSICN BEFORE THE ATOMIC SAFETY 2110 L*CE?iSI.*1C BCARD In the Matter of
)
)
C0ilSUMERS PWER CCMPAr.Y
)
Occket dics. 50-329
)
50-330 (Midland Plants, Units 1 and 2)
)
AFFIDAVIT OF SIO!:EY E. FELD Sidney E. Feld deposes and says under oath as 'olicws:
1.
I am a Regional /E. tir:ncental Ecenc='st in tne Civisien of Site Safety and Envircnmental Analysis, U.S. fluclear Regulatory Ccmissien.
.y professicnal qualifica ons were ad=itted into evidence in :nis proceeding on FebrJary 16, 1977 follcwing Ir.
2.
I assistad in :he ;recarecien of the "Reper: Prepared by S. Feld a-d.
W. Gundersen for :ne At:mic Safety and Licansing Scarc en Alleged Discrepancies 3etzeen Censumers Fewer's Rate Filing of 'anuary 31,1977 and Testiseny Presented to the At:mic Safety and Licensing Scard in the Midland Proceeding" ccnststing of 38 ; ages.
I hereby certi#y that this report is trw and correct to the best of my kncwledge and beifef.
//Eb I
5teney E. Felo Subscribed and swcrn to haf:re me tais n& day cf.4y,1977.
bd_ d 3. ~4-_T tiotary Puolig My Consission expires: QL i; gent..
\\
I
- . 8 O
. 4TTACH!ENT C
/
t UNITED STATES OF AMERICA
- .*UCLEAR REiiULATORY CCmISS*0M SSFORE TFE ATCitIC SAFETY At:0 L!CDSING 30ARD In the Matter of
)
1 CCi!SUMERS PCWER COMPANY h
Occket t.'as. 50-329
)
50-330 (Midland Plants, Units 1 and 2)
)
AFFIDAV!T OF '3ALTEit J. GL'T:0ERSE?!
'4 alter J. kedarsen :eposas ar.d says under ca.h as folicn:
1.
I am amicyed by the Fedara! Pcwer C,cnissicn as.tssistant to ce Chief of Division of 7:wer Sacoly and Reli cility.
./ professicnal a
qualifications are attsched to my tastiecny and were admitted into evidence in this proceeding on '. arch 24,190 foll: wing Tr. 5101.
2.
I assistad in the ;reparati:n of de 1e:crt Freparid by S. Feld i
and 'd. Gundersen for the Atonic Safety and Licensing 3 card on Allegec Discrepancias Between Construrs Pcwer's Rata Filing cf January 31, 1977 and Testime:1y Presented to the At:mic Safety and Licensing 3 card in the Midland Proceeding" consisting of 38 onges. I tersby certify tsat this report is true and cor set te the best of my knowledge and teMef.
j.'~.-
Wal:er J. Gurnersen Suescribed and sworn to before as this gday of tay,1977.
Ow 0 O.%A-4
.iocary ?ualicq My Comurission expires: A.4A.1973, g
i*
-