ML20098D028
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Washington Public Power Supply System P.O. Box 968 3000 GeorgeWashingtonWay Richland, Washington 99352 (509)372-5000 December 2, 1983
. Mr. Jim Petersen Nuclear Regulatory Commission Room AR5037 Washington, D.C. 20555
Dear Mr. Petersen:
In response to a request from Bill Dircks which was transmittea to the Supply System from you to Jim Perko via November 23rd telephone conver-sation, enclosed is a copy of the WNP-2 Amended Annual Operating Budget-for. Fiscal Year 1984. In addition, enclosed is the Executive Board Action Memorandum No. 58 (which provides background information and summary data) and the respenses from the Bonneville Power Administra-tion and the Participants' Review Board.
It should be noted that this budget was based on a February 1,1984 commercial operation date and contains only five months of operating cost.
Page 5 of the document shows a summary of all costs in the o :dget and does specify the decommissioning amount.
.ery truly yours, Q, v 2 W._
/ G. C. Sorensen, Manager Regulatory Programs GCS/lbc Attachments cc: R. Auluck - NRC N. S. Reynolds kk9fgfj27e40824 l COHEN 84-603 PDR l
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Washington Public Power Supply System I P.O. Box 968 3000GeorgeWashingtonWay Richland, Washington 99352 (509)372-5000 ACTION MEMORANDUM NO. _g AMENDED ANNUAL OPERATINB BUDGET FISCAL YEAR 1984 NUCLEAR PROJECT NO. 2 ISSUE The Executive Board is requested to approve the amended Annual Operating Budget, fiscal year 1984, (July 1,1983.through June 30,1984) for Nuclear Project No. 2.
BACKGROUND The Executive Board approved the Annual Operating Budget. Fiscal Year 1984 for Nuclear Project No. 2 on May 13,1983, by Resolution No. 139. For budgeting purposes, commercial operation is to be declared on February 1,1984 for Proj-ect No. 2. The Annual Operating Budget included hbt service and related expenditures for the succeeding period of July 1,1983 through June 30, 1984 plus operating expenses for the initial operating period February 1 through June 30,1984. The operating expenses include ali expenditures paid'by the Supply System during the fiscal year associated with the ownership, operation, maintenance, repair, renewals or replacements of the project including all payments and deposits of whatever nature provided for in Bond Resolution No. 640.
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This amended Annual Operating Budget has been prepared pursuant to the provi-sions of Bond Resolution No. 640 and the Project and Net-Billing Agreements to provide funding for the estimated cash requirements for fiscal year including annual costs (debt service and project operating costs) and the costs to com-plate construction. The Agrerleents provide that after September 1,1977
("date certain") debt service and certain related requirements (and such other amounts as may be agreed upon by the Supply System and the Bonneville Power Administration (BPA)) be net-billed. The inclusion of the estimated costs to complete construction in the amended annual operating budget per agreement with BPA was necessitated by the unavailability of conventional end/or alter-native sources of financing. The scheduled bond sale of $149,000,000 in July 1983 has been eliminated; no additional bond sales are anticipated.
The AmeWed Annual Operating Budget is used to determine the Participants monthly share of project costs. Based on the budgeted expenditures, the Supply System will prepare and deliver to the Participants and the BPA, an amended billing statement reflecting the amount to be paid by the Participants on'a monthly basis in accordance with the terms of the Net-Billing Agree-ments. Net-billing deficiencies, if any, will be paid by BPA.
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This on Board budget & ne 30, was 1983 mailed to the SPA Administrator and th for review and action .
e Participants Review Operating Budget shall become, theeffective after submittal. amended Annual unless proved within seven days SALIENT POINTS OF THE AMENDED ANNUAL BUDGET _
an increase of $123,440,000The total eamended net funding req 1984 Budget. as compared to the original approo be $405,440,000; ved fiscal year related in July 1983.
costs Thisof increase resulted from the inclusion$14
$21,000,000,to and a reduc ti complete construction ae costs of of due to the elimination of theon plannedinbond debt saleservice and D_ISCUSSION Approval of the Amended Annual Operating Budget formal basis upon which to sent amended billing stat, as submitted, w R_EC0mENDATION. ements to the Participants.
It is the recomunendation of the Managing Director that th approve the Amended Annual Operating Budget e Executive for Nuclear P Board mitted, stipulated subject in the Project to theand rightsNetof Billing BPAAgreements and the Participart's ect No. 2 as sub- Revi ew Board as ATTACMENT _
Project No. 2 Fiscal Year 1984 Washington a Public Power Suppl perating Budget, Nuclear CONCURRENCE N e' D.W.'Mazur,4anagnggirector
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WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984 1
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Corporate Budgets
< June 30, 1983 i.
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[ WASHINGTON PUBLIC POWER SUPPLY SYSTEM L NUCLEAR PROJECT N0. 2 AMENDED ANNUAL OPERATING BUDGET s, .. FISCAL YEAR 1984 l
TABLE OF CONTENTS Page INTRODUCTION 1 ASSUMPTIONS 2-4 STATEMENT OF FUNDING REQUIREMENTS 5 EXPLANATION OF ANNUAL COST ITEMS 6-22 EXPLANATION OF CONSTRUCTION COST ITEMS 23-24 MONTHLY STATEMENT OF FUNDING REQUIREMENTS 25
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- WASHINGTON PUBLIC' POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET J FISCAL YEAR 1984 INTRODUCTION This WNP-2 Fiscal Year 1984 Amended Annual Budget has been prepared by the Supply System pursuant to the provisions of Bond Resolution No. 640 and the Project and Net-Billing Agreements to provide funding for the estimated cash -
requirements for the fiscal year including annual costs and the costs to-complete construction. The Agreements provide that after September- 1,1977
("date certain") debt service and certain related-requirements (and such other amounts as may be agreed upon by the Supply System and the Bonneville Power Administration (BPA)) be net-billed.
This amended budget includes revised annual costs of $261,000,000 'as compared to $282,000,000 in the original budget, a reduction of $21,000,000 oue to the elimination of the planned bond sale in July 1983. Accordingly, bond interest expense, reserve and contingency fund requirements, trustee and paying agent fees, and investment income were reduced. Additionally, the. estimated cost to complete construction of $144,440,000 is included because conventional'and/
or alternative suurces of financing are presently unavailable.
The total net funding requirements including annual (debt service and project operating costs) and construction completion costs for fiscal year 1984 are estimated to be $405,440,000. This amount will be reflected in the amended billing statements to be sent to the 94 Project Participants and will be paid on a monthly basis in accordance v.ith the terms of the Net-Billing Agreements.
Net-billing deficiencies, if any, will be paid by BPA.
For further information, see the . Construction Budget, Fiscal Year 1984 Update, Nuclear Project No. 2 which identifies total project construction costs and related funding requirements.
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[ WASHINGTON PUBLIC POWER SUPPLY
\ NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984 ASSUMPTIONS ,
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budgeted on a cash basis asis. (recognized whTh reflect the availability of the ments. Investment tinco investme iene received is n
- 2. ncome to offset cash require-B_ond Issue.
Conventional at this time. financing for the completi will be funded by BPA in accordance Agreements; $144,440,000 with the tEst n of $138,948,000 fiscal year 1984. will be requi erms of the Net-Billing be more than offset by receiptsred from to fund construction costs in sales of excess construction presently anticipated. contract recoveries, materialsIt year 1984 wil' is ex
- 3. No additional bond sales aresalvages Workino Capith System's required amount of workingIn accord greater ville Power amount Administration. as may becapital decidedshall uponbe by$3,000,000640 th (S or such provided via net-billings in fiscalThe initial $3,000,000e Supply System a emount is presently anticipated year 1978. for #is working capital was cal year 1984No increase in this
WASHINGTON PUBLIC POWER SUPPLY SYSTEM.
NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984
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ASSUMPTIONS
- 4. Investment Income Interest income and security gains and losses are combined to yield composite returns as fc11ows:
Bond Fund Interest and Principal Account 8.5%
Bond Fund Reserve 9.25%
Reserve and Contingency Fund 9%
Revenue Fund 8%
- 5. For budgeting purposes, commercial operation is to be declared on February 1, 1984. Operating expenses are budgeted only during the period February 1 through June 30,1984. Differentiatien between construction and normal operating expenditures is predicated upon the nature of the expenditure, not necessarily the timing of it. The budget includes estimated costs for construction completion to be expended in fiscal year 1984. Construction costs subsequent to commercial operation include tasks associated with construction wrap-up (deferred construction items, plant unitization, execution of punchlist projects, settlement of backcharge claims and litigation, fine-tuning plant equipment to maximize generation). All costs to physically complete the plant will be designated as construction costs. Additionally, recoveries, salvages and sales of excess mat-erials/ construction equipment are credits against construction costs.
- 6. The Supply System's decomissioning plan reflects a 40-year plant life, 3 years to prepare for storage, 50 years of protective storage and 3.5 years for facility dismantlement and site restoration. The estimated total decomissioning cost of $114,000,000 in 1982 dollars ($74,308,000 in 1978 dollars) is based on a decomissioning study performed for the Nuclear Regulatory Comission by Battelle Pacific Northwest Laboratory in 1978. A sinking fund including all investment income earned thereon will be established for the 40-year operating life of the plant to provide funds necessary to pay for the preparation of passive safe stcrage, annual maintenance and final decomissioning. The sinking fund requirements at the year 2024 are based on:
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- a. Six percent (6%) escalation of projected decomissioning cash
- flow requirements (stated in 1978 dollars) from 1978 through 2081.
- b. Nine percent (9%) present worth factor to state escalated decom-missioning costs in 2024 dollars.
! Payments to the sinking fund are assumed :o be made on a graduated ascending rate using a 6 percent factor. -
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WASHINGTON PUBLIC POWER SUPPLY SY i NUCLEAR PROJECT NO. 2 ANNUAL OPERATING BUDGET FISCAL YEAR 1984 ASSUMPTIONS 7.
Nuclear fuel acquisition. is billed as needed at an amount to provid project requirements for materialse and cash for new fuel service tions of market requirements. price have been used for the remai ontract. d Projec-n er of the plant acquisition to support a September 1985 thereafter.
or refu through -Enrichment fiscal year 1988.services deliveries haverefuelings pr lished eviously been estab-expected services to be delivered to meet the requirements of theU contract. enriching than the contract with Exxon Nuclear specifiesBecause r priced at market price rather than contract price, acquisition ha show adjustments to contract prices. .
Subsequent to 1988Later years will deliveries 8.
for operation at a capacity factor of .
70 perce equirements i
they are incurred. Cost for shipping and disposal of spent n specifies that a fee of one mill be paid (00E) for each kilowatt hour of electricity generat to the Dep n of Energyd will accept and dispose of spent nuclear fuel e. In return DOE electricity that has beenare reviewed based by BPAon astaff.
planning schedule for operatiE on of WNP-2 tion of an " assigned three-month period" e purfor thThe "Act" provide kilowatt hours generated and sold by the Purchaser' poses o reactor and for establishing fees due and s nuclear payable power to DOE System has proposed an assigned three-month 1983. .
period b The Supply The first period will be November 1983 eginningthru Janu November second period will be February 1984 thruary 1984; April the and s 1984 on this schedule, the first accounting periodoapplicabl on. Based ating budget will be February 1984 thru Aprile to 1984 the oper-that in May. the fees estimated to be $2,133,000 .
It is anticipated for this period will be paid The waste disposal fee for nuclear fuel used dur ear 1984 tests is included in the construction budget g the power ascens. ion
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RCW S4.28.025 requires payment of a tax for the act or privilege of electricity for use or sale equal togenerating 1.5 percen i
of tionenergy of con produced for use or sale except for value wnolesale energy use n the opera-facilities.ponent parts of the power plant and associated tran an accrued liability of $2,053,000For the operating period (Feb
,1984),
operating costs for the period. has been computed based The tax period is based on a calendaron the to year and the taxes are due the succeeding May1 .
as a budget line item in fiscal year 1984. e, are not incladed t
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- i. , NUCLEAR PROJECT NO. 2 I
AllENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984
] STATEMENT OF FUNDING RE0VIREf1ENTS
($ in Thousands) 1984 1984 Original Amended Budaet Budget Annual Costs Nuclear Fuel $ 13,015 $ 13.015 Weste Disposal 2,713 2.133 Operations 17,213 17,273 Maintenance 4.727 4,727 Administrative and General Direct (Insurance) 2,697 2,697 Overhead Allocation 2,724 2,724 Deconunissioning 358 358 Taxes -
Capital Additions 5.300 5,300 Bond Interest D: pense 236,390 217.020 Provision for Bond Retirement 15,940 15,940 Reserve and Contingency Fund Recuirements 25.233 23,296 Trustee and Paying Agent Fees 641 322 Subtotal $326,431 $304,805 Less: Investment Income $ 21,137 $ 20,511 Prior Year's Surplus:
Reserve & Contingency Fund 23,294 23,294 Subtotal $ 44,431 $ 43,805 Net Funding Requirements - Annual Costs $282,000 $261,000 Construction Costs (a)
Peginnin; Balance (b) - Construction Fund $ - $ 51,164 Receipts Investment Income - 6,550 Fuel Sale - 2,116 Other - 6,700 Total Receipts $ -
$ 15.366 Total Available $ - $ 66,530 Less: Disbursements Plant Design / Engineering $ - $ 21,673 Prepurchased Equipment - 7,466 Plant Construction / Completion - 84,/55 Owner's Resources - 54,208 Nuclear Fuel - 7,786 Contingency - 34,688 Financing - 394 Total Olsbursements $ - $210,970 Net Funding Requirements - Construction Costs $ - $144,440 TOTAL NET FUNDING REQUIREriENTS * $282,000 $405,440 (a) See Construction Budget. Fiscal Year 1984 Update, Nuclear Project No. 2 for detail information. ,
(b) The beginning balance facludes actual receipts and disbursements through April 30,1983 and an estimate of receipts and disbursements for the remainder of fiscal year 1983.
WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984 EXPLANATION OF ANNUAL COST ITEMS
_ NUCLEAR FUEL The nuclear fuel cycle consists of four basic elements prior to inse the fuel assemolies in a nuclear reactor.These elements include acquisition of the uranium concentrates, conversion of the uranium concentra hexafluoride, enrichment of the uranium hexafluoride and fabricatio enriched uranium into fuel assemblies.
expected to be delivered to meet the requirements of the fixed services contract.
detailed explanationSee Assumptions of the 7 and waste disposal 8 for additional information and a fee.
The following schedule indicates the cash requirements for nuclear fu
($ in Thousands) 1984 Budget Uranium Conversion $12,632 Enrichment 373 Other - ~
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$13.015 Waste Disposal
$ 2,133 e
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WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984
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EXPLANATION OF ANNUAL COST ITEMS OPERATIONS The following schedule outlines operation requirements by program:
($inThousands) 1984 Budget Planz Operations $ 2,618 Tecnnical 6,444 Trtining 663 Plant Administration 5,303 14alth Physics / Chemistry 2,245 Total $17,273 A scope description of each program is detailed below:
Plant Operations: Plant operations includes the cost of labor, supporting materials, supplies, services and related expenses required to safely' effic- ,
iently and economically operate the Project No. 2 power generation plant.
The staff consists of managers, supervisors, operators and technicians who are responsible for operating the plant in compliance with federal, state and local laws. Included are expenses incurred for heat transfer materials and water used for production of steam and for cooling purposes and expenses incurred in the operation cf turbo-generators, steam turbines and their auxiliary apparatus, switchgear and other electrical equipment.
Technical: Technical includes the cost of labor and expenses incurred in conducting technical / engineering activities in support of plant operation.
This includes licensing / nuclear safety issues and plant engineering support in the areas of systems analysis, fuel management and performance engineering.
Training: Training includes the cost of labor, expenses and materials incurred in conducting training and requalificatien activities associated with the opera-tion of the plant. Plant operator, health physics / chemistry, general site employee, emergency and security training are included in this category.
Plant Administration: Plant administration includes the cost of labor, mater-ials and other expenses incurred in the general supervision and direction of the plant administration activities associated with operation of a nuclear power generation plant. This includes general administrative support (i.e.,
clerks, word processing, duplicating and transportation) and program support (i.e., security, industrial safety / fire protection, comunications, quality
, assurance, computer service and procurement).
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WASHINGTON PUBLIC POWER SUPPLY SYST NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984 EXPLANATION OF ANNUA'. COST ITEMS OPERATIONS (Cont'd)_
Health Physics / Chemistry:
material and support of plant other expenses incurredcby operations. health physics / h emistr r, inspection, monitoring, and analysis activitiesThis includes emergenc surveillance, A detailed Page 9 schedule outlining the cost ty program and overhead, materials / equipment, internal services and other. , travel outside egories: laborservice which applies to the detailed schedules for operationA count categoriesdescriptio istrative and general (direct and overhead allocati and admin-
, maintenance, overhead other salar includes salaries, benefits, overtime on) follows. Labor and materials, yoffice costs.
supplies Materials off / equipment includes general n and ope pro parts), and project materials fuels and oils .
(i.e. , ject equipmen -
costs of services by consultants for system technical and legal assistance, and financial programming, design Outside a)nd include services engineering /
includes reactor business training travel, training and and fees. feest rel management.
ocation travel; and operatorTrave billing services services. (i.e., duplicating, graphics Internal services include direct costs f
, and vehicles impact payments.Other includes property and liability insurance ) an
, regulatory, and 8
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3 WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 2' AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984 OPERATIONS ,
($ in Thousands)
Internal
- Program Title Average Labor Materials / Outside Travel / Services (WBS) Hanmonths & Overhead Equipment Services Training & Other Total Plant Operations 72 $1,478 $1,085(a) $ 50 $ 2' '$' 3 $ 2,618 i Technical 96 2,276 10 3,590 ID) 88 '480 6,444 Training 22 427 75 50 34 77 663 Plant Administration 241 3,732 533(c) 132 35 871(d) 5,303 Health Physics / Chemistry 51_ 1,058 306 756I ') 7 118 , 2,245 Total 482 $8,971 $2,009 _$4,578 g $1,549 $17,273 (a) Includes fuels and oils, chemicals and gases, resins, and purchase of offsite electricity during outage in May.
(b) Includes contracts for nuclear safety and regulatory issues, environmental activities, system design engineering services, and general vendor support.
I (c) Includes communication services, computer inforniation systems, procurement services, safety and fire
, protection equipment, and security force material.
(d) Includes program services of quality assurance, word processing, and vehicle services.
(e) Includes contract for Rent-a-Tech HP personnel and HEPA/ charcoal filter testing.
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WASHINGTON PUBLIC POWER SUPPLY NUCLEAR PROJECT NO.'2
- Af1 ENDED ANNUAL OPERATING BUDGET FISCAL -YEAR 1984 EXPLANATION OF ANNUAL COST ITEMS- _
-MAINTENANCE
'The following schedule outlines maintenance requi rements by program:
($ in Thousands) 1984 Budget Plant Maintenance Technical $4,082 Training 300 345 Total _
$.4.s121.
' Scope descriptions of each program e ow:
are detailed b l Plant Maintenance:
materials, supplTes, iently and economically mainta services and related expensesPla , supporting The staff consists of mananers,in the Project No. 2 power n. genera instrument and control technicians supervisors, foremen, electricians; mech maintaining corporate policy.the plant in compliance with
, and laborers whofederal are responsible for
, state and local laws and maintaining the plant aThe materials, supplies and services c e to expenses incurred in via the nuclear process.nd associated equipment to produce e Technical:
conducting technical / engineering activities in s es incurred in This includes equipment engineering.the plant engineering port support of plantacti i maintenance.
v ties of performance and Irainino:
general supervision and direction of training an es incurred in the associated with maintenance of a nuclear power ualification ge activities includes the cost of labor materials and neratingexpstation. Also and maintaining training pr,ograms related to maintenaenses A Page on detailed 11 schedule outlining the cost nce by of a nuclear plant.
prog ram and major account follows t
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NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984 i
MAINTENANCE.
($ in Thousands) l Internal Program Title Average Labor Materials / Outside Travel /. Services (WBS) Hanmonths & Overhead Equipment Services Training & Other Total Plant Haintenance 128 $2,316 $1,690(a) $ 69 $3 $4 $4,082 Technical 7 189 -
94 17 -
300 _.,
Training 5 113 25 -
207(b) -
345 Total 140 $2,618 $1,715 $163 $227 j{ $4,727 i
(a) Includes materials and supplies to operate the decontamination laundry and sanitary waste water plant, payment for operational spares which have been ordered, payment for BPA contract for relay meter calibration and consumables/ materials for routine corrective / preventative maintenance.
1 (b) Includes training for development of simulator program and providing ongoing training for maintenance {
personnel.
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NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984 -
_ EXPLANATION OF ANfJUAL COST ITEMS ADMINISTRATIVE AND GENERAL - DIRECT-Administrative and general direct includes the ~ cost catego auditing, finance, insurance, and fees and memberships. ,
Legal-includes general support to the operatin side services to support expected litigation. g project and $200,000 of out-o -> independent and State of Washington auditors. Auditing is cost of the accounting supporting plant operation financial functions. Finance is on-site' memberships include all costs for our participation i Fees and Nuclear Power Operations (INPO). e Institute of See costs. Page 13 for a detailed schedule of direct administrative . eneral an 4
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WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT N0. 2 t
, AtlENDED ANNUAL OPERATitlG BUDGET FISCAL YEAR 1984 ADMINISTRATIVE AND GENERAL - DIRECT
($ in Thousands) .
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Internal Program Title Average Labor Materials / Outside Travel / Services (WBS) !!anmonths & Overhead Equipment Services Training '& Other Total Finance 3 $ 72 $- $- $- $- $ 72-22 - 200 - -
222 Legal 1 Auditing - - -
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23 43
- - - 2,100("I 2,100 Insurance - -
Memberships 10 250(b)' - - - 260
$104 $250 $220 $- $2,123 .$2,697 Total i (a) Includes five months of nuclear property ($1,965,000) and nuclear liability insurance ($135,000) premiums.
(b) Includes annual membership in INP0.
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- WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984 EXPLANATION OF ANNUAL COST ITEMS ADMINISTRATIVE AND GENERAL - OVERHEAD ALLOCATIO Administrative and general overhead allocation,000 budgeted'at $2 72 Project No. 2 Annual Budget includes those items deter for ,
i the rather than activities of the project specific Supply System. and are required for administrativem and general ned
, Auditing, LegalDirectors, Administrative Auditor, a Managing Director a Internal Human Capital Funding, Resources., PublicControl, Investments, Records Affairs,. Technical General Acco Generation and Quality Assurance are also included
, Safety, Power A schedule outlining total corporate expense for fiscal y head allocation for the period February 1 through June 30 ear 1984 and The overhead allocation is based on WNP-2 operation and mai,1984 i laborlabor direct dollars (after February 1,1934) compared dollars. to total ntenance S direct upply System project e
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.e WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJEC1 NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR'1984 ADMINISTRATIVE AND GENERAL - OVERHEAD ALLOCATION
($ in Thousands)
Internal Program Title Average Labor Materials / Outside Travel / Services (WBS) Manmonths & Overhead Equipment Services Training & Other Total Finance Programs 81 $1,554 $ 31 $ 384 $ 44 $ 602 $2,615 Administration 96 2,006 262 876 250 463 3,857 Corporate Technical 29 722 14 61 47 244 1,088 Internal Services - - - - -
(24) (29)
- Variance Management Adjustment (a) (120) (1,901) - - - - (1 ,901)
Total to be Allocated 86 $2,381 $307 $1,321 j341 .$1,280 $5,630 (2/1 - 6/30/84)
Total Cost Allocated $2,724 to Project No. 2 Operations .
(a) The management adjustment is an assumed reduction in manpower which will be determined at a later time through restructuring of the organization.
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WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984' EXPLANATION OF ANNUAL COST ITEMS DECOMMISSIONING estimated to be $358,000.The decommissioning costs for the on Assumption 6, Page 3. une 1984 is Payments to the sinking funds are made on a graduated ascending rate based onr.a 6 percent facto
- TAXES
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Generation taxes have not beenengruary June 30, 1984 o
included Budget for 1 thru in requirement will of notfiscal this be paid year.until May 1985 and, therefore detail . See Assumption 9, Page 4 for further, are not a cash CAPITAL ADDITIONS Project No. 2 plant and associated .
mercial equipmentForm operation of as designed and constructed, is a licensable e.
e plant, an practice and knowledge of the experience of other plants of and capabilities Prudent similar design modifications as,early as the first year of operationhowe .
The schedule areas. on Page 17 is a representative listing of potential problem representative other utilities. 'of the types of problem areas c, but is whic een experienced by j
requirements as Project No. 2 continues .
egulatory and licensing operation necessary are identified for safety, plant reliability and economic reasonsOther m
!. plant improveme,nts. .they will be added to the list As these items addit of capital u ure l
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r WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT N0. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984-CAPITAL ADDITION ITE!!S
($inThousands)
Description Amount PlannedItems(a) e Simulator Modifications and Certification $1,600 e Design Engineering for Plant Modifications 800
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e . Capitalized Equipment (Including GELI Counter, 220 Miscellaneous Plant Test and Monitoring Equip-ment, and Environmental Monitoring Equipment)
Potential Items (b) e Extended Fuel Cycle Provisions 5 o Feedwater Heater Level Control Changes e Recirculating Flow Control Changes ,
e Water Chemistry /0xygen Control e Reactor Level Control /Feedwater Turbine 2,680 Changes )
e RWCU Pump Seal Replacement e Preparation of Recirculation Stress Improvement e Containment Atmospheric Control ,
Total $5,300 (a) Planned items include: (1) simulator modifications and certifications--
improvements to simulator to match plant changes, improve fidelity and achieve certification per standards; (2) design engineering for plant modifications--engineering required to do initial design work on modifi-cations; and (3) capitalized equipment--additional equipment, including GELI counter, various plant test and monitoring equipment, and environ-mental monitoring equipment.
l (b) Potential items include a representative listing of potential problem areas of high probability which have been experienced by other utilities.
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EXPLANATION OF ANNUAL COST ITEMS
_ BOND INTEREST EXPENSE In accordance pay theBond interest with debt Bond areResolution No. 640 from (S Fundon bond transferred monthly the and the t) be as follows: Interest Account. evenue Fund The annual interest expense is estimated
($ in Thousands)
Series Outstanding Annual Interest Expense Bonds 6/30/84 Weighted Average Original
_Couper Rate % Amended ~
1973 1984
$ 138,000 _ 1984 1974 5.58 1974A 70,700 $ 7,777 $ 7,777 116,000 7.05 4,991 1975A 119,000 7.57 4,991 1976 8,811 118,240 6.77 8,811 1976A 8,069 8,069 194,715 6.50. 7,704 1978 5.83 7,704 176,395 11,360 1979 6.52 11,360 175,675 11,535 1979A 121,835 6.32 11,535 11,134 1980 200,000 7.41 11,134 1981A 9,057 9,057 210,000 9.33 18,659 1982A 300,000 11.21 18,659 23,537 1982B 178,720 14.43 23,537 1982C 43,326 43,326 196,280 13.45 24,040 1983(Assumed) _ 149,000(3) 13.77 24,040 27,020 13.00 27,020
__19,370 Total $2,315,560 _
_9.30 $236,390 5217,020 (a) The 1983 series is not included in the total for L average coupon rate percentage or amended 1984 expense.
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WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 2
-AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984
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EXPLANATION OF ANNUAL COST ITEMS PROVISION FOR BOND RETIREMENT The redemption obligation established by Bond Resolution No. 640 (Section 6.2) is satisfied by transferring the annual retirement in approximately equal monthly installments from the Revenue Fund to the Bond Fund Principal Account.
($inThousands)
> 1984 1984 S_cheduled Retirement for July 1 Original Amended Series 1974A $ 2,500 $ 2,500 1975 3,500 3,500 1976 1,030 1,030 1976A 2,820 2,820 1978 2,025 2,025 1979 2,355 2,355 1979A 1 ,71 0 1 ,71 0 Total $15,940 $15,940 RESERVE AND CONTINGENCY FUND REQUIREMENTS In accordance with Bond Resolution No. 640 (Section 6.5), funds equal to 10 percent of the aggregate bond interest and principal obligations are trans-ferred monthly from the Revenue Fund to the Reserve and Contingency Fund.
The unused money collected will be used to reduce the funding requirements in the subsequent year. The Reserve and Contingency Fund requirements are computed as follows:
($ in Thousands) 1984 1984 Original Amended Budget Budget Interest Expense $236,390 $217,020 Provision for Bond Retirement 15,940 15,940 Total $252,330 $232.960 Reserve and Contingency Fund $ 25,233 $ 23,296 Requirements
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WASHINGTOM PUBLIC POWER SUPPLY S NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL' YEAR 1984 EXPLANATION OF ANNUAL COST ITEMS_
^
' RESERVE AND CONTINGENCY FUND REQU _
to makeup any deficiencies in the ontingency FundInterest shall be used Ac
~suchConstruction deficiency Fund or .the Reserve Account.-R e in the moneys inoperation and after commer,cial the Reserve to any andoneContingency or more e of on Fu th
- a. e following:
b.
To pay the cost of renewals and replacements e Project.
to th c.
To pay the cost of normal ~ additions to and exteast ons of the Project.
- To~ pay extraordinary operation and maintenance ordinary costs of fuel and the cost of preventincosts, including unusual loss or damage (including major repairs)g or correcti to the Project.
TRUSTEE AND PAYING AGENT FEES Per Bond Resolution No. 640 _
- and Paying Agents are to be p(aid from the ConstructioSec 1977.
5illings.
Thereafter, these costs will be paid by the P n Fund until Sep articipants via net and Paying Agent fees as ,compared to $32 00 for Bond Fund Trustee t
The decrease is related to thee elimination 1983.
of th amended 1984 budget.
planned bond sale in July 4
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WASHINGTON'PUBLIC POWER SUPPLY SYSTEM
~ NUCLEAR PROJECT NO.'2 AMENDED ANNUAL OPERATING BUDGET.
. FISCAL YEAR 1984
. EXPLANATION OF ANNUAL COST ITEMS f
' INVESTMENT INCOME
' Investment: income received by the Revenue Fund, Reserve and Contingency Fund, and various Bond Fund Accounts is estimated to be as follows:
.($ in Thousands) 4 1984 1984
( Original Amended
-Bond Fund Reserve Account $14,750 $14,295
' . Bond Fund. Interest Account. . 4,108 '3,937 ,
Reserve and Contingency Fund 1,375 1,375 Bond Fund Principal Account 664 -664 Revenue Fund 240 240 Total $21,137 $20,511 Investment income is acquired through investing funds in the Bond Fund Reserve Account, Bond Fund Interest Account, Reserve and Contingency Fund, Revenue Fund and Bond Fund Principal Account. The decrease in the amended i
. fiscal year 1984 budget as compared to the original 1984 budget is related i to less money in the Interest and Reserve Accounts to invest without a bond sale. A brief description and frestrictions of each fund account follows:
f Bond Fund Reserve Account: The Bond Fund Reserve Account includes an amount with respect to each series of bonds then outstanding equal to the largest amount of interest required to be paid on the bonds of such series during any '
6-month period from the date of such bonds to the final maturity date thereof.
After September.1,1977 (date certain), any excess may be transferred to the Supply System and deposited in the Revenue Fund. Prior to June 25th such excess for any interest received from July 1 thru May 31 will be transferred
- to the Revenue Fund, and interest accrued after June 1st may be transferred no earlier than June 30th.
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' WASHINGTON PUBLIC POWER SUPPLY SYSTEM
= NUCLEAR PROJECT NO. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984 o
EXPLANATION OF ANNUAL COST ITEMS
_ INVESTMENT INCOME (Cont'd)
Bond Fund Interest Account:
This account was created for the purpose of pa 4
.the interest on outstanding bonds as the interest becomes due and payable Transfers January 1st. of excess funds over needs are made to the Revenue Fund J Reserve and Contingency Fund:
The fund includes an amount equal to 10 percent of the aggregate of the amounts required to be paid not later.than the of each month from the Revenue Fund into the Interest Account, Principa and the Bond Retirement Account in the Bond Fund plus the amounts requ used to makeup any deficiencies in the Interest Account, Principal Account or Bond Fund Retirement or Bond Account Fund Reserve Account. for which funds are not available in If moneys and value of government obliga-the amount of the excess shall be paid in the Bo 4 , , ,
1 deficiencies therein and any balance remaining after satisfaction of defic shall be paid into the Revenue Fund no earlier than June 30th.
i Revenue Fund:
i' Supply System from its ownership and operation of the Proje The fund shall be used and applied for the purpose of paying the-principal of and prem t any, and interest on the bonds issued pursuant to Bond Resolution N the cost of operating and maintaining the Project including making repairs renewals, replacements, additions, betterments and improvements to and l'
of the Project and for paying all other charges or obligations.
be applied to reduce annual power costs or the purchase or redemption .
Bond Fund Principal Account:
i outstanding serial bonds as they mature.This account was created for the purpose ferred each July 1st to the Revenue Fund. Excess moneys in the account are tran-PRIOR YEAR'S SURPLUS
' Reserve and Contingency Fund:
Contingency Fund requirements, $23,294,000To satisfy the Bond Resolutions's Re 1983.
fiscal year. Amounts collected and unused reduce the funding needs of the nex i
such excess. The entire amount collected in fiscal year 1983 constituted 1
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WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO. 3 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984
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EXPLANATION OF CONSTRUCTION COST ITEMS During the financial planning process for fiscal year 1982, a zero base esti-mate and schedule development concept was used to establish baselines clearly 1_ fining project scope, schedule and cost. The fiscal year 1984 construction costs reflect the baselire budgeting concept in lieu of zero base estimating.
The costs have been updated to reflect:- (1) changes authorized through the change management process, (2) experience to date, and (3) new or revised management direction. Escalation has been calculated separately for each individual contract and/or major segment of the budget. Escalation for pre-purchased equipment, construction contracts, architect-engineer / construction manager services and Supply System resources was calculated in accordance with contract terms, applicable actual published indices for the fiscal year, and the following assumptions:
Compound Annual % Rate Calendar Year.
1983 1984 Labor - Manual 7 7
- Nonmanual 6 6 Equipment / Materials 6 6 An explanation including scope descriptions for the receipt budget line items is detailed below:
Investment Income: The current effective yield on the construction funds is approximately 9 percent. It is assumed that the shape of the yield curve will remain normal as it has recently trended. This means that the short-term instruments will yield less. These rates are projected to decrease so that an average return of 9 percent is achieved in fiscal . year 1984. Funds for con-struction from BPA will be received monthly as required and will generate minimal construction fund income. In the months of June and July 1983, all accrued interest income will be received as investments mature.
Fuel Sale: Fuel sales include the sale of uranium originally procured for the initial core, but presently not needed either for the initial core or subse- ,
quent reloads.
Other: Other receipts include anticipated contract recoveries, salvages and sales of excess construction materials.
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WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT N0. 2 AMENDED ANNUAL OPERATING BUDGET FISCAL YEAR 1984 EXPLANATION OF CONSTRUCTION COST ITEMS
_ DISBURSEMENTS Financing costs include all expenditures incurred ir. connection ssu-anceand bonds (planned notes. and actual), initial sale and subsequent servicing Included in the fiscal year 1984 estimate are amounts incur red for legal expenses and financial advisor's fees during prepar for the bond sale previously scheduled for July 1983.
For scope descriptions and further detail information n for plant nuclear fuel and contingency see Constructio Nuclear Project No. 2.
ources, 4
NET FUNDING REQUIREf1ENTS - CONSTRUCTION COSTS The net amount for construction coststois be funded in fiscal year 1984 through
$144,440,000. - the net bill ng process to complete construction through net-billing:The schedule below outlines the ba
($ in Thousands)
Fiscal -
Year Amount 1984 1985 $144,440 1986 7,802 1987 (15,494) 2,200 Total $138,948 Fiscal recovery.
contract year 1986 includes a net anticipated receipt ofor$18 cost 250 000 u
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leASHINGTON PUBLIC POWER SUPPLY Sf5TEtt
- g taKLEAR PROJECT No. 2
- AMfNDED AnnutL OPERA!!NG SUDGET FISCAL TEAR 1984 H0tilla.Y STAitttENT OF FunnlHG REQUIR[HENTS
($ In Thousands)
M h Sept, h NoA Dec. Jan. Feb. Mar. h M M Total Annual Costs nuclear Fuel 1 -
$ - $ - $ - $ - $ - 5 - $ 2 $ 2.860 $ 3 $ 375 $ 9.775 $ 13.015 Weste Disposal - - - - - - - - - -
2.133 - 2.133 Operations '- - - - - - -
3.455 3.451 3.506 3.558 . 3.303 17.273 Maintenance - - - - - - - 933 987 966 949 892 4.727 Admin. & General Direct - - - - - - - 750 500 499 480 468 2.697 overhead A11oc. - - - - - - - 622 578 534 499 491 2.724 Decommissiontag - - - - - - - - . . - 358 350 Tames Capital Additions - - - - - - -
3.060 1.060 1.060 1.060 1.060 5.300 Sond' interest Espense 18.085 18.085 18.085 18.005 18.085 18.085 18.085 18.085 18.005 18.085 18.085 18.085 217.020 Sond Settrement 1,328 1.328 1.32. 1.329 1.328 1.328 1.328 1.329 1.328 1.328 1.329 1.329 15.940 Seserve & Cont. Fund 1.941 1.941 1.941 l 942 1.948 1.941 1.941 1.942 1.941 1.941 1.942 1.942 23.296 -
Trustee & Paying Agent - 55 104 - - - - 59 104 - - - 322' fees , _ , _
Subtotal j_21.354 $ 21.409 l 21.458' l 21. M6 $ 21.%4 1 21.M4 1 21. % 4 $ 28.237 530.894 527.922 130.410 D7.703 1 304.805 Less:
Investment lacone $ 9.164 $ 24 $ 20 $ 20 $ 20 $ 20 $ l.942 '$ 20 $ 20 $ 20 $ 20 $ 9.225 $ 20.511 Prior Vr.'s Surplus:
Seserve & Cont. 23.294 - - - - - - - - - - -
23.294 Subtotal 1 32.458 1 20 5 20 $ 20 $ 20 1 20 5 1.942 5 20 1 20 $ 20 $ 20 $ 9.225 1.43.805 a
Net Funding Seq. -
Annual Costs
$(11.104) 5 21.389 $ 21.438 $ 21.136 1 21.334 $ 21.334 $ 19.412 $ 28.217 130.874 127.902 $30.390 $28.478 $ 261.000 Construction Costs Seginning Salance - $ 51,164 $ 16.963 $ - $ - 1 - 1 - $ - $ - $ - 5 - $ - 5 - 1 51.164 Construction Fund .
Seceipts: .
. Investment income $ 6.550 $ -
$ - $ - $ - $ - $ - $ - $- $- $- $- $ 6.550 Fuel Sale 2.116 - - - - - - - - - - -
2.116 8
Other 100 100 100 200 200 3.600 300 300 300 300 500 700 6.700 Total Seceipts 1 8.766 5 100 5 100 $ 200 $ 200 $ 3.600 $ 300 $ 300 1 300 $ 300 $ 500 1 700 5 15.366 I Total Available $ 59.930 $ 17.063 $ 100 $ 200 $ 200 1 3.600 1 300 $ 300 $ 300 1 300 1 500 $ 700 $ 66.530 Less: Disbursements ~
Plant Destgn/Engrg. $ 4.375 $ 3.285 $ 3.115 $ 2.175 $ 1.250 $ 6.348 $ 740 $ 385 5- $- $- $- $ 21.673 Prepurchased Equip. 1.265 1.532 I.019 976 905 547 523 393 306 - .- - 7.466
' Plant Constr./ Compt. 21.013 19.946 -16.146 11.364 6.183 4.179 3.693 1.358 586 287 - -
84.755 8
(hener's tesources 8.169 9.025 8.023 6.010 5.589 ' 5.663 4.647 4.259 1.100 637 566 522 54.208 Nuclear fuel 4.720 97 1.312 48 42 2 3 1.562 .- - - -
7.786 Contingency 3.425 3.800 4.000 3.90C 3.900 3.300 3.300 3.363 1.300 1.300 1.400 1.700 34.688 i Financing - 200 85 - 10 - - 10 79 - 10 - 394 ,
i Total Disbursements 1 42.967 1 37.885 1 33.698 $ 24.473 1 17.879 1 R 4 $ 12.906 1 11.330 1 3.371 $ 2.224 1 1.976 $ 2.222 l 210.970 l
End6st Salance 1 16.%) }L2h822) }(33.541) j(24.273) }{l1679) }Q6 4H) 1E606.) }{11030) 1(3.071) j(1.924) }(1.476) 1(1.522) S(144.440) l Net funding Sequired 1 - }_20.8?? $ 33.598 5 24.273 } E 679 116dB $ 12.606 $ 11.030 5 3.071 5 1.924 5 1.476 5 1.522 1 144.440 from BPA - Construc-tion Costs TOTAL NCT FUN 0!NG SEQ. j(1),104) } 42,231 ]55,016 } 45,60') Qg j,37,7J3 }_32,018 },39,247 }33,945 }?9,826 $ 866, }30,0_0_0 g
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h!4 Department of Energy Bonneville Power Administration omCE OF THE ADMINISTRATOR P.O. Box 3621 Portland, Oregon 97208 in ,,pey r,r , . DLP 2 NO3 BPWP-G-83-14 Mr. D. W. Mazur, Managing Director pashington Public Power Supply System
'P.O. Box 968
' Richland, Washington 99352
Dear Mr. Mazur:
We have reviewed the Supply System's 1GP-3 FY 19S4 Interim Amended Annual Budget as requested in your October 26, 1983, letter. This document was prepared to include ICP-3's cash requirements through June 30, 1984, for the extended construction delay and is consistent with the Management Plan for Extended Construction Delay of IMP-3 and our May 27, 1983, proposal regarding the project.
The FY 1934 ICP-3 funding requirement contained in the Interim Amended Annual Budget is $207,009,000. Of this amount, $159,000,000 is for nayment of debt service and $48,009,000 is for payment of the Supply System's share of extended construction delay costs.
Cash requirenents will be provided either by the 103 participants through net billing or by net billing deficiency payments by Bonneville Power Administration as required.
We do not disapp ro ve the FY 1984 IdP-3 Interim Amended Annual Budget.
S i nc e re ly ,
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y/:+Q)4.G/j/ ;r /f ?%-M*%}
Adminis t ra to ec:
. Supply. System Executive Board Supply System Board of Directors Participants' Review Board L
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524 SOUTH AUBURN STREET
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M P. O. Boz 6270 BENTON COUNTY - Qijl jD J.sj xEn~Ewicx. waswiscros
."d'o,.. s.2 2 n s PUBLIC -UTILITY DISTRICT NO. I u . coo. .
PARTICIPANTS' REVIEW BOARD o
Project No. IMP-3 Specification No.
Description:
tmP-3 Interim Amended Annual Budget, Fiscal ' Year 1984 Contract Awarded to:
Cost: .
Engineer Recommendations:
PRB Comments: No' recommendations.
Participants' Review Board Action:
The Participants' Review Board members have reviewed your request and recommendation on the above modification. Pursuant to the Not Billing Agreement, the members of the Participants' Review Board have no recommendations.
ffobert G. Grav6s "
Ik dkun Chairman Participants' Review Board cc: PRD members ,7'/) c[ )
. Mr. W. M. Ilobe rg f Bonneville Power Administration A. . Mr. J. Road Washington Public Power Supply System ,
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