ML20095C108

Informs of Errors in City of Philadelphia Record Citations Re Statement of NRC Witness Acharya.Also Forwards Commonwealth of PA Public Utility Commission 840807 Order to Show Cause.Related Correspondence

ML20095C108
Person / Time
Site:	Limerick
Issue date:	08/16/1984
From:	Bush M PHILADELPHIA, PA
To:	Brenner L Atomic Safety and Licensing Board Panel
References
OL, NUDOCS 8408220379
Download: ML20095C108 (5)

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LAW DEPARTMENT

'A d 15tn noor. Municipe! Sences Budoing m% en ..eign . p. .ic2

' 4 CITY OF PHILADELPHIA x BARB /SA W. MGHER, City Solicitor HARD% MerBUSH, DeputyICfty Solicitor (215) 686-5248-9 August 16, 1984 G 20 P3:31

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Ew.cp Honorable Lawrence Brenner, Chairman Atomic Safety & Licensing Board U. S. Nuclear Regulatory Carmission Washington, D.C. 20555 RE: PHI 1ADELPHIA ELECIRIC COMPANY (Lirrerick Generating Station, Units 1 and 2 - -Docket Nos.

50-352 anc. 50-353 /)(_

Dear Chainnan Brenner:

Upon review of the responses filed by the NRC Staff ("NRC"),

I have noted several errors in the City's record citations whicn should be corrected for the convenience of the Carmission. The statenent of Staff witness Acharya that "(t)he jtrigment of the Staff is that the probability of severe accidents that could result in large consequences could be higher by about a factor of 30" appears at Tr. 11,286-287 and not at the page originally cited on page 13 of the City's subnission. _.

In addition, the Staff has correctly noted that the City erroneously stated that the Staff's uncertainty range of a factor of 40 too low contained a 57. chance of being exceeded. The Company's estimated value for its separate study was 5%.

For the conveneince of the Ccnmission, I am also attaching to this letter the recently issued Order To Show Cause of the Pennsylvania Public Utility Camlission - Limerick Unit No. 2 Nuclear Generating Station Investigation, I-M0381, August 7,19% (entered) which is referred to at page 5 of the City of Philadelphia's subnission.

Respectfully, 8408220379 840816 (i), -

PDR ADOCK 05000352 G PDR MAR'IHA W. BUSH, Deputy City Solicitor MWB:ddb cc: Judge Richard F. Cole Jtrige Peter A. Morris All Parties of Record SO3

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- Z . 21_ j PENNSYLVANIA l

~PUBLIC UTILITY COMMISSION 1 Harrisburg, PA 17120

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Public Meeting held July 6, 1984 09. . . .

Comunissioners P' resent: '

- Linda C.' TAliaferro, Chairman, dissenting 20 py . ,

Michael Johnson' .

James H. Cawley, dissenting -

Frank Fischl Bill-Shane M@ "" igj 6' Limerick Unit No. 2 Nuclear Generating Docket No.

Station Investigation I-840381 ORDER TO SHOW CAUSE

-BY THE COMMISSION: /

By order entered October 10, 1980 this Co= mission instituted an-investigation at Docket No. I-80100341 into certain issues concerning Philadelphia Electric Company's (PECO) construction of the Limerick Nuclear Generating Units 1 and 2 in order to gather information in an orderly and er;peditious manner prior to PECO seeking to include Limerick in its rate base as used and useful property. At the conclusion of said investigation we-found that the simultaneous construction of Units 1 and 2 was not financially feasible if .PECO was to insure the continued maintenance of safe and reliable service to the public. PECO was then given the option of either suspending or cancelling the construction of Unit 2. In the event PECO refused to suspend or cancel the construction of Unit 2, we declared that we would not approve;any new securities issuances, it whole or in part,'for the construction of Unit 2. The Commission's decision was upheld by the Pennsylvania Supreme Court.

Pennsylvania Public Utility Commission v. Philadelphia Electric Company, 501 Pa.-153, 460 A.2d 734 (1983).

3 Subsequent to the Ccurt's decision, PECO elected to suspend construction 'at-Unit 2 in accordance with the Commission's orders. On February 22, 1984 we accepted PECO's response to our order requiring suspension or cancellation as being in compliance with the Commissi.on's Orders of August 27, 1982, June 10, 1983 and December 23, 1983.

- In.the Order entered February 22, 1984 we also recognized that PECO's decision to suspend construction meant that the company intended to resume construction of Unit 2 upon completion of Unit 1. We also '

recognized that PECO, at some future date, mi@ t seek Commission approval of securities financing for' construction of Unit 2. Pursuant to Section 1903(a), we would then have to consider whether the proposed

' financing _is "necessary or proper for the present and probable future capital needs" of .the company. We therefore directed PECO to file

. certain information concerning Unit 2 no less than 120 days prior to the filing of any securities certificate for the financing of Unit 2.

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. Since the companv's anticipated in service date for Limerick Unit 1 is April, 1985, it is reasonable to assume that ?ECO will resume construction of Unit _2 upon completion of Unit 1. However, we believe that serious questions exist regarding-the need for the additional generating. capacity represented by Unit 2, the cost effectiveness of Unit 2-as compared to other alternatives, and the effect upon ?ECO's financial health and its- ability to provide saf e and adequate service at reasonable rates f In addition, we are concerned about the potential effect of the cost burden of Unit 2 upon PECO's existing custoner base.

Recent actions by some of PECO's industrial customers to generate their own power or to switch to alternate suppliers =ay come to typify these classes of customers. The loss of revenues from such customers could, of course, exacerbate PECO's financial situation and t= pact its ability to serve'other PECO customers.

For the- aforementioned reasons and to enable us to exercise informed judgment when security certificates te finance Unf . 2 are presented'to us for registration, we believe that certain issues must be examined prior _to any commitment by PECO to the resumption of' construction on Unit 2. In order to gather information in an orderly and expeditious manner prior to having to render any decision on the resumption of construction c2 Unit 2, it is necessary to institute an . investigation into such matters and to order PECO to show cause why the completion of Limerick Nuclear Generating Station, Unit 2, would be in the public interest. The following issues should be examined in this proceeding:

1. _Is construction of Unit 2 necessary for PECO to maintain adequate reserve margins?

2. Are there less costly alternatives - such as cogeneration, additional conservation measures, or purchasing power-from neigh-boring utilities or the P.J.M. interchange

' :for PECO to-obtain power.or decrease

-consumption?-

3. How will the capital requirements necessary

'to complete Unit 2 affect PECO's financial health and its ability to provide adequate F

-service?

4. Should the Commission reject any securities filings, or impose any.other appropriate remedy, to guarantee the cancellation of Unit 27

5. If Unit 2 is cancelled, what, if any,

' percentage of the' sunk costs should PECO be permitted to recover from its ratepayers?-

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! -6. If construction of Unit 2 is found to be l

in the public interest, should the Co==ission

[ adopt an " Incentive / Penalty Plan" as an inducement to cost efficient and timely construction?

In recognition of the co=plexity of. these issues and the need to proceed with such an examination prior to the co:pletien of Unit 1 and the resumption cf construction of Unit 2, ve cannot delay instituting this investigation until the time frame established in our February 22, 1984 order at Docket No. I-80100341. An exa=ination of the issues listed herein must be commenced at.this time. TIdEREFORE, II.IS ORDERED:

1. That the Philadelphia Electric Conpany is directed to show cause why the completion of Limerick Nuclear Generating Station, Unit 2, is in the public interest.

2. That pursuant to the Order to Show Cause a for=al investi-gation'is'hereby instituted and that this investigation shall include, but not necessarily be limited to, an esa=1 nation of the following issues:

- Is construction of Unit 2.necessary for PECO to maintain adequate reserve =argins?

- Are there less costly alternatives - such cz cogeneration, additional conservation measures, or purchasing power fro: neigh-boring utilities or the P.J.M. interchange

- for PECO to obtain power or decrease consumption?

- How will the capital requirements necessary to complete Unit 2 affect PECO's financial health and its ability to provide adequate service?

.- Should the Commission rej ect any securities filings, or Lapose any other appropriate remedy, to guarantee the cancellation of Unit 2?

- If Unit 2 is canec11ed, what, if any, percentage of the sunk costs should PECO

- be permitted to recover fro: its ratepayers?

- If construction of Unit 2 is found to be in the public interest, should the Commission adopt an " Incentive / Penalty Plan" as an inducement to cost efficient and timely construction?

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3. That this investigation be ref erred to the Office of

'Ad:lnistrative Law Judges for hearing and Initial Decision.

4 .That a copy of this Order be served upon all parties to the Comission's Investigation at Decket No. I-80100341.

3Y TdE CO M SSION,

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Jerry R. h ",

Sec.

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(SEAL)

ORDER ADOPTED: . July 6, 1984 ORDER ENTERED: August 7, 1984 se e s d

.D gg M E y 30lif\0033

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