ML20098C766
| ML20098C766 | |
| Person / Time | |
|---|---|
| Site: | 05000000, Satsop |
| Issue date: | 07/13/1977 |
| From: | Perko J WASHINGTON PUBLIC POWER SUPPLY SYSTEM |
| To: | |
| Shared Package | |
| ML20093C821 | List:
|
| References | |
| CON-WPPSS-043, CON-WPPSS-43, FOIA-84-603 NUDOCS 8409270191 | |
| Download: ML20098C766 (7) | |
Text
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' UNITED STATES OF AMERICA t
NUCLEAR REGULATORY COMMISSION
~9 In the Matter of
)
)
WASHINGTON PUBLIC POWER
)
SUPPLY SYSTEM, et al.
)
Docket Nos. STN 50-508
)
STN 50-509
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(WPPSS Nuclear Projects
)
No. 3 and No. 5)
)
i r
AFFIDAVIT OF JAMES D. PERKO REGARDING CORRECTIONS TO FINANCIAL QUALIFICATIONS TESTIMONY At the evidentiary hearings conducted in this proceeding on May 24-25, 1977, I submitted prepared testimony regarding the financial qualifications of the Washington Public Power Supply System ('"WPPSS") to design and construct WNP-3 and WNP-5.
In reviewing my testimony, I have determined that the testimony contained certain miscalculations.
Attached hereto are substitute pages 12, 13 and 19 which should be incorporated into my prepared testimony at Transcript following' p.
598.
In my testimony, as of April 30, 1977, the.
total estimated cost for WPPSS' 70% share of WPPSS Nuclear Project No. 3 ("WNP-3") was accurately stated to be $970 million.
However, the total nuclear production plant costs 'and total project cost for WNP-3 were erroneously stated.
The substitute testimony attached hereto corrects the total nuclear production plant costs and the total estimated cost for WNP-3.
The correct total nuclear production plant costs for WNP-3 are $1,300,766,000, and the total estimated cost for WNP-3 is $1,385,716,000. Foot-notes 1/ on page 12 and 4/ on page 19 have been clarified to accurately reflect the fact that assumptions for financing 8409270191 840824 PDR FOIA COHEN 84-603 PDR
- ; l0.
-2 Al expenses were the same for the investor owned utilities as for WPPSS.
In addition, the attached substitute testimony provides conforming totals for expenditures (including fuel and owners' costs) for WNP-3 through the year 1984.
These updated expendit-ures refl,ect the change in total proj.ect cost discussed above.
i4HE
?'
James D. Perko Assistant Director
~
Finance and Administratior Subscribed and sworn to before me this
/3c4 day of July, 1977.
Ad W
Notary Public in and for the State of Washington Residing at h 1 t
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I
s To finance WNP-3, revenue notes in the amount of
-4
$29,000,000 were sold in November 1973 for preliminary planning and initial construction costs and progress pay-ments.
These notes matured and were retired on June 15, 1976.
The Supply System has also issued $250 million of long-term revenue bonds for the Project.
These long-term securities were rated Aaa by Moody's Investor Service, Inc.
and AAA by Standard and Poor's Corporation.
These and all sdbsequent issues are earmarked as being for WNP-3 and proceeds of the sale of securities may be expended for that Project only.
Correspondingly, revenues associated with contracts for the sale and purchase of the output of WNP-3 may be applied only to WNP-3 costs, in-cluding debt service.
An updated estimate of the total costs of WNP-3 (current as of April 30, 1977) is:
WMd WPPSS - 70%
Total Project Costl!
(a) Total nuclear production plant
$910,536,000
$1,300,766,000 costs (b) Transmission and general plant
$ 14,989,000 21,413,000 costs (c) Nuclear fuel inventory cost !
$ 44,475,000 63,537,000 for first core Total Estimated Cost
$970,000,000
$1,385,716,000 l_/
Assums that the Ccmpanies and WPPSS have the same financing expenses.
2/
Nuclear fuel will be purchased rather than leased.
l4
'Si ting, fuel cycle costs, payments to vendors, and preliminary construction expenditures for WNP-3 through 1
April 30, 197'7, exclusive of Companies financing expense, amount to $124,737,000.
The Supply System ownership share i
is $89,779,000.
Current estimates for WNP-3 expenditures (including fuel and owners' cost) through the year 1984 are as follows:
Year WPPSS-70%
Total Project Cost; Thru 1976
$ 74,794,000
$103,961,000 1977
$ 60,418,000
$ 97,748,000 1978
$124,735,000
$185,069,000 1979
$147,652,000
$213,139,000 1980
$202,226,000
$286,669,000 1981
$234,269,000
$324,815,000 1982
$107,287,000
$147,698,000 1983
$ 12,468,000
$ 17,813,000 1984 S
6,151,000 8,804,000 To continue financing WNP-3, in addition to the $250 million revenue bonds already sold, the Supply System will issue approximately $720 million dollars of its tax' exempt revenue bonds in series from time to time during the period of construction.
The Supply System plans to issue these bonds in the following approximate amounts and on the following schedule:
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S-WPPSS 90%
Total Project d st (a) 'Ibtal nuclear production
$1,539,207,000
$1,710,233,000 plant costs 5/
(b) Transmission and general 19,271,000 21,412,000 plant costs (c) Nuclear fuel inventory
$ 160,183,000
$ 177,981,000 cost 6/
'Ibtal Estimated Cost
$1,718,661,000
$1,909,626,000 Siting, fuel cycid costs, payments to vendors and pre-
+
liminary construction expenditures for WNP-5 through April 30, 1977, exclusive of PP&L financing expense, amount to $14,202,000.
The Supply System's ownership' share is $12,823,000.
Current
-estimates for WNP-5 expenditures (including fuel and owners' cost through the year 1984) are as follows:
Year WPPSS-90%
Total Project Cost Thru 1976
$ 10,261,000
$ 11,339,000 1977
$131,228,000
$148,277,000 1978
'$106,537,000
$119,894,000 1979
$142,902,000
$159,438,000 j
1980
$254,777,000
$282,229,000 1981
$251,677,000
$298,019,000 1982
$363,885,000
$398,740,000 1983
$282,080,000
$304,953,000 1984-
$175,314,000
$186,737,000 4/
Assumes that Pacific Power and Light and WPPSS have the same financing expenses.
Sj Including net interest during construction, owners' costs, and allowance for escalation and contingencies.
6f-Nuclear fuel will be purchased rather than leased; inventory cost includes capitalized first core and reload fuel.
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a uf Tills INFORMATION IS NOT T@ BE CONSIDERED A FORECAST Tq: Mr
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Applicant _Vashington Public Power St pplygedear Plant WPNo._3
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Farticipant The Washsnaton unter Pou :r company (SI)
Source of Funds for System-Wide Cons truct_fon Expenditures During Period _
6 of Construction of~!Sjd at Nuclear Power Plant (mi1T4ns of dollars)
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- fecurity issgts gnd D
I9 I#.
l928 IU 19 80 1981 1982 19,,,,,
jg other fundl "
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Tor' con stock Pf20 5 %o-P23.0
$ 74.l l
~$ 15.0
'!%.o
-1 " -o-5 V
Preferred st6ck
"^ 0 -
W
'W
-0,
'I5~6' ~~~ i "15.0 Long-term debt J 0.0 l 3;).o "5T.T~
so.
I 60.0
- 30.0
= 30.o flotes payable (7.0)
_ 90
-(9.0)
-K P
(u.a)
= _ o-
-o-Contributions from parent-net.
-o-
-o-
-o-
-o, -o-Other funds (4.4) 4.6
~~ TCET~
z.
I J.9 t.5) 4.5
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44.2 42.2
}9.9 Total 30 6 58.6
_86.3
'95.
I h Internal funds et 1scor.e ~
_ I;8.o
_20.4 J 4.0, g
}4.0 38.1 43,8 P
Preferreddividends
__ 4-1.4 2.
f 2.7 4.5 5.2 i___.,22.3
?' ~ 4. 7
[28.5
[
--T-Cov on dividends
_ 11.4
__13.2_
[_I5.6
[17.
I Retained earningt
_ 6.6 7.2
_ 7.0
' 6.
9.0 8.9 10,1 Deferred tasts i_ -o-
-o-
~
-o-
_ _ -o,
_- -o- -
Invest. tax tred.
(deferred) 1.9 1.4 2.4 3.
I 1.9 1.6 1.6 Depreciation & amort.
96 10.5 11.3 12.
14.3 17.2 20.1 less: AFDC 1.8
.6
.3
.4
.5
.6 Total
~ 16.3
- _19.7
__20.4
_ _21.
i 24.8 27.2 31.2
~
$ 46 9__
7sd_ $J06,7 i $_117
$ 94.7
$__71.4
$_7 3._4 Construction Expenditures (2)
. ~7 Gear powd brets s
e.a
$ _ 20.5
$ u,1
$ 37
$ 35.7
$ 31.6
$ 30.4 Other 37.1 57.s 72.6 80.
59.0 39.8 4T.0 -
~
_^ $1 Total const. tre's.
$_:,1.g $_7a.3, $ g $JL $-g_ $?1.4__ $_73. 4 -
8.2
$ 13.6 i
$___7.2
$_ __ 1. s
- $,~
Subject nuclear plant
$__ 5.7
$N T, $ 10.
7 P
_ 2.4 2.4 2.4 Interest coverase 2.1
.(2) Exclusive of AFDC (allowance for funds used during construction) ;
~ " " ~ '
(1)Ftrst five years (1976-1980) based on five year financial model data. Last two years projected manually on a consistent baal E
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8 To M c ^ ar"~ ' 'L ' m UCN Sm 491 ~lIfl 717t THE WASHINGTON WATER POWER COMPANY r,,. c G. 5 *'*" "
g
..,r m ' 4%
0 Assumptions for Sowrce of Funds Statement 7 y (a) Rate of Return on Average s'tasaor. Equity - 14.5-1MC Ih (b) Freferred Stock Dividend Rate - 9Z a
(c) Growth Ratest Sales of general business kwhr are estimated to I
increase about 5% per year during the forecast period. As you j
know, kwhr sales to other utilities are subject to resource availability and market conditions and therefore are not C
trenf able.
t b
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Electric and gas revenues included within the forecast ar ir a result of the general business kwhr /thern sale trends and h
include elements of rate relief which were programmed through-out the forecast as needed. The basis of rate relief van the
't debt / equity ratjos sod composite debt cost prevailing at that j
4 point in time and the return on common equity as prev 1ously A
f mentioned.
Operating exper.aea subject to inflation were escalated at 102 I
in 1976, decreasing to 7% in 1977 and finally to 6% for the balance of the forecast. Items such as power and gas purchased j
are generally regw2 aced by osotract and are noe subfat to a
escalation.
(d) Common stock price / earnings ratio or markat/ book ratio with respect to the projected comeson stock offerings: This forecast assumes that market and book values of conson stock are approximately equal, but en an increasing annual rate of about 5%.
No psice/earninas ratio was used for projected cousson offerings.
t (e) Common stock dividend payout ratio a target of 65% was assumed.
(f) Target capital sttw ortet e-target goal of (sot 6% 3GI cosason equity and 30% preferred has been soeuseC (g) Interest coverage requirements: Our most restrictive indenture
' requirement states that annus1 interest requirements must be l
at least twice any JJ consecutive months pre-tax gross earnings.
(
Considering the rate reuef prograwned in the forecerac, ewr results have allowed us to exceed the two times htg. rest coverste test under the indenture. We have not made an SEC e
coverage test.
(h) An interest rate of 97 was assumed on all projected nortgage i
1>ond issues. For short 'ters bank loans, a rate of 79% was i
utuised.
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