ML20098D047

Answer to NRC & Applicant Motions for Summary Disposition. Neither NRC Nor Applicant Have Met Burden of Proof.Board Should Deny Motions for Summary Disposition & Convene 83110 Evidentiary Hearing

ML20098D047
Person / Time
Site:	05000000, Washington Public Power Supply System
Issue date:	12/13/1983
From:	Bell N COALITION FOR SAFE NUCLEAR POWER
To:
Shared Package
ML20093C821	List: GO2-76-563, Application for Ol.Environ Rept - OL Stage Also Encl. W/O Environ Rept ML20093C818 ML20096H672 ML20096H687 ML20096H696 ML20096H709 ML20098C636 ML20098C644 ML20098C647 ML20098C657 ML20098C670 ML20098C683 ML20098C691 ML20098C698 ML20098C708 ML20098C712 ML20098C722 ML20098C747 ML20098C749 ML20098C757 ML20098C759 ML20098C766 ML20098C771 ML20098C776 ML20098C807 ML20098C837 ML20098C852 ML20098C863 ML20098C876 ML20098C883 ML20098C885 ML20098C910 ML20098C933 ML20098C936 ML20098C944 ML20098C957 ML20098C966 ML20098C976 ML20098C981 ML20098C987 ML20098C998 ML20098D000 ML20098D009 ML20098D014 ML20098D028 ML20098D036 ML20098D047 ML20098D057 ML20098D068 ML20098D070 ... further results
References
CON-WPPSS-136, FOIA-84-603 CPA, NUDOCS 8409270335
Download: ML20098D047 (42)

Text

{{#Wiki_filter:' UNITED STATES OF AMERICA j 'd NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD f 840341 In the Matter of ) WASHINGTON PUBLIC POWER SUPPLY SYSTEM ) Docket No. 50-460 CPA ) (WPPSS Nulcear Project No.1) ) Mr 09A FF INTERVENOR'S ANSWER TO NRC STAFF & APPLICANT'S NOTIONS FOR SUNRY DISPOSITION. I. INTRODUCTION The Coalition For Safe Power, hereaf ter " Coalition", pursuant to 10 CFR 2.749 and in accordance with the July 11, 1983 Order of the Licensing Board in the above captioned proceeding, hereby submits its response in opposition to '# Licensee's Notion For Summary Disposition" dated November 14, 1983 and "NRC Staff Nation for Summary Disposition of CFSP Amended Contention 2" dated November 14, 1983. For reasons set forth below, the Coalition asserts that there are genuine issues of material fact to be heard and the Licensing Board should convene an evidentary hearing on January 10, 1984 as scheduled in its July 11, 1983 order. II. LEGAL STANDARDS The Commission's Rules of Practice provide that any response to summary disposition, with or without affidavits, be served twenty days af ter the service of the motion. 10 CFR 2.749(a). i In this proceeding, the Licensing Board, pursuant to its authority under 10 CFR 2.718, sd December 12, 1983 as the deadline for filing of such responses. 10 CFR 2.749(a) also states that "there shall 8409270335 840824 PDR FOIA CDHEN84-603 PDR m

. 5, 4, be annexed to any answer oposing the motion separate, short and f concise statement of material facts as to which it is contended that there exists a genuine issue to be heard." The Coalition has attached _such a statement hereto. The Applienat argues in its motion for summary disposition that

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• fundamental precepts of the administrative process mandate that at this stage of litigation the intervanor be' require'd to respond to this' motion by presenting material and disputed facts in af fidavit form that support its position.

Motion at 7. (emphasis added) There is no legal precedent for this assertion and 10 CFR'2.749 makes no such requirement: When a motion for summary dispositon is made and supported as provided in this section, a party opposing the motion may not rest upon the mere allegations or denials of his* answer; his answer ( by affidavit or as otherwise provided in this section must set f orth specific f acts * * *

• The Appeals Board recognized this stating s Although Decade replied to the Licensee's motion on October 24, 1981 asserting Chat the motion should be denied, it did not file any affidavit setting forth " specific facts showing that there is a genuine issue of material f act," or a "short and concise statement of the material facts as to which it is contended that there exists a genuine issue to be heard.

Wisconsin Electric Power Company (Point Beach Nuclear Plant Unit 1) ALAB-696, 16 NRC 1245, 1259 (1982). It should be noted that the NRC Staff makes no such assertion. Summary disposition is only authorized where the party an entitled to judgment Ls a matter of law, where it is quite clear what the facts are, and where no genuine issue remains for trial. t l

.es. .g. I { The Appeal's Board has stated:

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• summary dispostion is a harsh remedy.

It deprives the opposing letigant of the right to cross-axamination witnesses, which is perhaps at the very essense of an adjudicatory hearing. Cleveland Electric Illuminatina Company et. al. (Perry Nuclear r. Power Plant, Units 1 and 2), ALAB-443, 6 NRC 741, 755 (1977). i Due to this " harsh remedy" the burden of proof is upon the movant, in this case the Applicant and NRC Staff, to establish the absence a of a genuine issue of material fact even if the party opposing the motion fails to submit controverting evidence. M. at 753-54. The opposing party need not show that he/she will prevail on the issues but that there are genuine issues to be tried. See American Manufacturers Mut. Ins. Co. v. American Broadcastino Paramount Tneaters, Inc., 388 F. 2d 272, 280 (2d.' Cir. 1976); Pacific Gas & ( Electric Company (Stanisius Nuclear Project, Unit No.1) LBP-77-45, 6 NRC 159, 163 (1977). The record must be viewed in the light most f avorable to the party opposing the motion. See Public Service Co. of New Hampshire (Seabrook Station, Units 1 and 2), LBP-74-36, 7 AEC 877 (1974). The Appeals Board recognized this concepts [T]he Commission's summary dispositon rule, like Rule 56 of the Federal Rules of Civil Procedure after which it is modelled, does not require a party opposing a motion for summary disposition to prove its case before trial. Point Beach, supra, at 1258; Perry, supra, at 753, 754 and cases cited therein. ( n {

4 8 A III. SCOPE OF ISSUES { The discussion of the f acts in dispute set out below addresses them in the context of certain legal precedents. While summary disposition is intended to dispose of issues which are factual, 5 not legal, in nature, the scope of the instant proceeding is determined by these cases. flashington Public Power Supply System (WPPSS Nuclear Projects No. I and 2), CLI-82-29, 16 NRC 1221 (1982) f i is the first of these, a Commission decision on the original petitions prior to the submission of contentions. The Commission j i reiterated the findings of an Appeal Board in an earlier decision i (Indiana & Michicon Electric Company (D.C. Cook, Units 1 and 2), ALAB-129, 6 AEC 414 (1973)) that the legislative history behind n*, 10 CFR 50.55(b) was " inconclusive in ascertaining any intent ( about the scope of an extension proceeding." The Commission went on to say, quoting from D.C. Cooks

• * *a determination should be based on " common sense" and the " totality of the circumstances" so as to ascertain "whether the present consideration l!

of any such issue or issues is necessary in order to protect the interest of intervenors of the public ~! interest." 6 AEC at 420. 5 1 The Commission also stated several other positions:

1) a contention cannot be litigated in a Construction Permit Amendment proceeding when an operating license proceeding is pending wherein the issue may be raised; I

2) a contention having nothing whatsoever to do with the causes of delay or the proposed justifications i

I cannot be litigated; } i-i o l l '4 f

3) the inquiry of a CPA should be into the reasons which have contributed to the delay in construction; and

4) that, despite the fact that a holder of a construction permit must establish reasons " founded in f act" explaining the Jelay, that it

• cannot misrepresent those reasons and because it might, "[a] intervenor is thus always free to challenge a request for a permit extension by seeking to prove that,

-on balance, delay was caused by circumstances that do not constitue " good cause." WNP-1 & 2, supra, siip op. at 14. Upon dismissal by this Licensing Board of the petitioner (for lack of a litigable contention) in the aforementioned request for hearing for WNP-2, the Appeals Board further clarified the scope of the issues involved in a request for a construction permit extension. In affirming the Licensing Board's denial, the Appeals ( Board established that the word " dilatory" meant " intentional delay of construction without a valid purpose. ' Washincton Public Power Supply System (WPPSS Nuclear Project No. 2), ALAB-722, 17 NRC (slip opinion at 9). In a footnote, the Appeals Board went on to 1 i say Thus, for example, an intentional slowing of construc-tion because of a temporary lack of financial resources or a slower growth rate of electric power than had been originally projected would constitute delay for a valid business purpose. WNP-2, supra, slip op. at 9, footnote 6. (Intervenor would note here that the issues, raised in Contention No. 2 and subsequent submittals establish the issues to be a nermanent lac'k of financing and lack of need and thus are not bases for a " good cause" deter-l mination.) The Appeals Board also established that ,.e u

-u-

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• the ul.timate '! good cause" determination called for by Section 185 of the Atomic Energy Act is whether good cause exists to extend the construction completion date.

The statutory focus is not so much (or at least, not exclusively) on an applicant's past conduct, but rather on the future. Plainly then, that-ultimate " good cause" determination is expected -~to encompass a judgment about why the plant should be i completed and is not to rest solely upon a judgment ~ as to the applicant's f ault for delay. (emphasis in original) ld,. at 13. d Lastly, the factula issues in dispute are defined by the t j 't contention admitted into litigation and the subsequent responses i i to interrogatories filed by all parties. The motions for summary j ff disposition of the contention do not address the f acts presented E therein, which are discussed in more detail below.

E 7

( IV. GOOD CAUSE 4 Both the Applicant and NRC St'aff state in their respective E motions that the facts on the record show the existance of " good

P cause" as required by 10 CFR 50.55(b),

although each fails to r. , ~n i recognize that " good cause" not only applies to the reason for the i.

E delay but also to the reason for the extension.

i-E Regarding the " good cause" determination for the past WNP-2 j ~ [, suggests a two-prong test. First, the construction delay (s) at n issue must be traceable to the applicant and second, the delay (s) k must be " dilatory". ,I_d. a t 7. The decision to defer ccnstruction of WNp-1 is traceable to the Applicant and was dilatory.

e iE iE

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S E 'E 11 T.* .a.

7-i, The WPPSS Executive Finance Committee investigated options f I for financing its projects, including plant ' deferral, prior to the Bonneville Power Administration (BPA) recommendation. WPPSS } Executive. Board Minutes, April 5, 1982, at 5. Se Finance l Committee then requested a recommendation from BPA on April 6,1982. WPPSS Executive Board Minutes, April 19, 1982, at 5 and Licensee's I Motion-for Summary Disposition at 17. Mereupon the BPA Administrator 3 made his recommendation, in doing so stating that a reason for the ~ recommendation was escalating rates caused abustantially by WPPSS' construction program. Finally on April 29, 1982, the WPPSS 1 Executive Board and Board of Directors voted to adopt resolutions P t. 71 and 1221, respectively, deferring construction of WNP-1. The second test, to determine if the action of the Applicant ( were dilatory is defined to mean " intentional and without a valid purpose." WNP-2, supra, at 13. Again there is clearly a genuine issue yet to be heard. Neither movant claims the actions were not 5 intentional. Both contend no genuine issue exists in the det'er-i 5 mination of a " valid purpose" for the delay. Se Applicant I contends that the " valid purpose" test has been met because ? the BPA made a recommendation and thus deferral of construction was inevitable. Applicant's Motion at 23. We Applicant also ' ]y j claims once BPA made its recommendation it had.no real choica but to seek the instant construction permit extension,

g. at 29.

It i It further asserts that the " Licensee based its decision to defer 1 WNP-1 and its showing of good cause on the BPA recommendation. ~ i: Neither was premised on the underlying basis of the recommendations !!(" 'i-Li concerning WNP-1 developed by BPA..." M. i .5 O e ps O .ec--, m, --m,-.#_.im--v,w,-,d--."_,yv----,..,.----------,.,_r_~----.,_.,.~,_,.-#..--w

I c t I f The facts speak to the contrary: Resolution 71, passed by the WPPSS' Executive Board, was draf ted to provide an expression of concurrence by the Executive Board with the BPA recomendation and to provide the full Board the opportunity to concur in the decision. WPPSS Executive Board Minutes, April 23,1982, at 30. As stated earlier, the BPA recommendation was made at the request of the WPPSS Executive Board Finance Committee. The Finance Committee had looked into plant deferral prior to the BPA recommendation. While the Applicant asserts that the reasons underlying the BPA recommendation are not at issue in this proceeding, the NRC Staff takes a different view and one with which intervenor agrees. See NRC Staff's " Statement of Material Facts As To Which There Is i No Genuine Issue To Be Heard," at 3. The NRC Staff states on page ( 5 of its Motions One reason cited by BPA...is a slower growth rate of electrical power demand...Each of these reasons i constitutes a valid purpose * *

• 3 Although the Coalition does not agree with the NRC Staff's f

conclusions, it does concur that the reasons behind the BPA I recommendation are facts that must be examined in determing I' .j " valid purpose.' While the NRC Staff states that BPA's financial stake in, and financial responsibility { for, WNP-1 is so high as to effectively give BPA control over the planned completion.date for WNP-1.

h. at 3h the Applicant would have the Licensing Board allow it

{ [ to hide behind the actions of the BPA avoiding all scrutiny, by ? 3 stating that BPA is entirely responsible but arguing against arf 5( e l !! ? J l ~~ ---,,-.--e -~-,y- - - -,.,, -,, - -. - - - + we%,,-,e--,--,---.-- 9 ^ 4 investigation into BPA's actions. One overriding reason for BPA's recommendation was that the private utilities, owners of 30% of WNP-3, would not agree to deferral of the WNP-3 project. See Letter from Peter Johnson, BPA Adminis rator, to John J. Welch, Chairman, Finance Committee, WPPSS, dated April 23, 1982. However, the private utilities were more than villing to negotiate with the Applicant and BPA. See Letter f rom W.J. Satre, President, Washington Water Power; Robert H. Shott, Charrman of the Board, Portland General Electric; Don C. Frisbee, Chairman of the Board, Pacific Power & Light; and John W. Ellis, President, Puget Sound Power & Light, to John Welch, Chairman, Finance Committee, WPPSS, dated April 22, 1982 and provided herein as Attachment A. The record to date lacks any evidence to show ( that this avenue was pursued seriously. The Applicant claims it had no other option, but in f act there were several: it could have placed the project in indefinite mothball as it did with projects WNP-4 and 5; terminated the project; or entered inot negotiations with the private utilities, owners of 30% of WNP-3, as mentioned previously. The NRC Staff's claim that a " slower growth rate of ^ electrical demand" was the basis for BPA's recommendation is also i misleading. BPA Administrator, Peter Johnson, stated it was escalating rates casued by the WPPSS construction program which was the significant factor. Additionally, the private utilities would not agree to deferral of WNP-3 in lieu of WNP-1, although WNP-1 was more complete. This was not a decision base soley on prudence. The movants have made no attempt to address these issues. F e 4 e e e 9

• e=

-J.u-3 2 The Applicant and NRC Staff cite Georcia Power Co. (Alvin -W. Vogtle Nuclear Power Units 1 and 2) LBP-77-2, 5 NRC 261 (1977) as an example for " temporary lack of financial resources" constituting W Both f ail to mention that the applicant in that case jE good cause. a 2 showed that future financing was available. Voctie, supra, at 300. B While neither the NRC Staff nor Applicant have addressed the issue E II E of whether there vill ever be a need or financing ability for E E^ WNp-1, the NRC Staff adresses the ' temporary" lack of need in its 5 E motion for summary disposition. The NRC Staff asserts no factual i I basis for its position except the BPA's report, " Analysis of 15j Resource Alternatives" dated April 19,1982(hereinaf ter "WNP-1 i Decision Document"). This document is not in and of itself a reliable forecast, its over a year old, and is now superceded by ( more recent analyses by the same agency (BPA) showing elecrical growth to be even less than projected in 1982. See Attachment B. ' 5. IE Moreover the NRC Staff stated in response to the Coalition's 3 lE First Set of Interrogatories, dated June 30, 1983 that it relied 13 15 for its determination on the need for WNP-1 on NUREG-75/012, the $5 lE FES for WNP-1 dated March,1975, now nearly 9 years cid. 'S -g Additionally, the NRC Staff and Applicant's Motions for s i Summary Disposition ignore the issue of whether good cause r i exists to extend the construction c6mpletion date. 'Ihis issue E the Appeals Board ruled in ALAB-722 is the " ultimate ' good cause' 5 ii detemination called for by Section 185 of the Atomic Energy Act." l5 2 VI;P-2, supra., :at.13. Paramount in the determination of " good cause" i ,3 i( ee I t E r . - ~. 'e, t, [ to extend the construction completion date is a showing that the benefits continue to outweigh the costs -- particularly that power -from theplant will be needed upon completion and can be produced at reasonable cost. Need for power and lack of financing are two components of the BPA recommendation upon which the NRC Staff and Applicant rely to show good cause exists for the delay in completion. The Intervenor raised these as issues in its contention and throughout its responses to interrogatories form the NRC Staff and Applicant. The Intervenor posited the lack of need for power from WNP-1 as a basis on which to not extend the construction permit completion dates, citing among others, the Northwest Conservation Act Coalition Model plan. The Intervenor intends to call Jim Lazar a co-author j f of the Plan, as a witness and will, if required, submit the appropriate affidavit in support of this answer (pursuant to 10 CFR 2.749(c)). Neither the NRC Staff nor Applicant have responded to this previously identified genuine issue of fact in their respective motions for summary disposition. In sum, the movants have not fulfilled the requiremtns set out in ALAB-722 to show that good cause exists to extend the construction completion date for WNP-1 and thus have failed to meet the burden of proof necessary under 10 CFR*2.749. V. REASONABLE PERIOD OF TIME The second provision of 10 CFR 50.55(b) is that the Commission k will, upon good cause shown, extend the completion date,"for a reasonable period of time." As stated in ALAB-722, the original r 3r -

? 4. , i. intent of the provision it effects (namely 10 CFR 50.55(a) which ( mandates earliest and latest dates for completion) was for the Atomic Energy Commission (AEC) to plan for nuclear fuel.

However, l

L the currsnt nonexistence of this federal role has not negated the need to "[ assure) that construction is diligently pursued" and that " completion dates [can be predicted] accurately." WNP-2, suora. h footnote 9 at 12,13. '1hese two goals continue to be of importance according to Letters to the Honorable Thomas P. O'Neill, Jr. and the Honorable George H. Bush from Chairman Nunzio J. Palladino, e f dated February 21, 1983, which sought to eliminate the requirement f for completion dates. The analysis quoted by the Appeals Board in WNP-2 simply states that, in the Commission's point of view, the ( requirement was not having the intended effect. The NRC still {( stands behind the proposition that predicted plant completion dates are important and that construction should be diligently + h pursued. (Congress, in addition, has declined to remove the i 50.55(a) requiremant.) 1 ( This approach is consistent both with NRC's mandate to protect i i the public health and safety as well as its duty pursuant to the

t i

Natinnal Environmental Policy Act of 1969 (83 Stat. 852) implemented i f by Executive Order 11514 and the Council on Environmental Quality's f Guidelines of August 1, 1973 (38 FR 20550). The fending required i i. of the Commission under NEPA prior to issuance of a construction f permit (See g. 10 CFR Part 2 Appendix A, VI (c)(1)(v); (c)(2)(ii), (c)(3)(1)(iii) and 10 CFR 51.20(b)) that the benefits outweigh f the costs are in large part predicated on the need for the facility pj( in question. Need for power dictates when a plant should go on line and thus when construction should commence and be complete. i l E .,_ _ _ _.__ ___.i._,._.*._ E.--..'

13- ~ ~ ~ 4, o 1 }( Thus the Appeals Boardcitation of the Letters, ggga,, recognizes the agency's responsibility to ensure that aplant is both completed f when needed as well as needed when completed. The fact that the initial cost-benefit analysis done by the S NRC was far off the mark is irrelevant to this proceeding except k that without it (and since it is wrong by at least one decade it 1 is useless) there is nothing on the record to support a determination by this Licensing Board as to when the plant should be completed, t if if ever. The Applicant, notwithstanding its assertion on page 35

r of the Motion that the request for an extension is for 2-5 years,

't i is in fact requesting a delay of 9 1/2 years. In trudd, there is TE!i nothing on or off the record upon which any party -- or the Licensing ?: Board -- can rely which states when the plant will be completed. 1r( 'The WPPSS Board does not even intend to make a decision on i Fi the construction delay until October 1984. See Management Plan !*9 Il for E:: tended Construction Delay of WNP-1, dated June 29, 1982 at $Il lj 1 and Comparision of Present WNP-1 Delay Plan with Alternatives, .u lE presented to Participants Review Board, on October 8, 1982 at 2

V

.F (Attachments C and D respectively). The Applicant has proposed i; that the NRC Staff consider June 1,1988 as an earliest fuel load

E

,T !I date (Letter from G.D. Bouchey, Manager, Nuclear Safety & Regulation, 'l j~ WPPSS, to Elinor G. Adensam, Chief, NRR, NRC, April 15, 1983) and h yet informed the Licensing Board that under a proposed plan, 6 .j completion would occur in "approximately 1991." See Letter from N.S. Reynolds to ASLB, March 7, 1983. (It should be noted that this ~ s '2 I u l t v--

-wp c. ,0 6, letter states that Counsel for the Applicant will advise the ( Board of any subsequent decisions -- decisions apparently made on April 27,1983 (33g Presentation to Executive Board Construction Committee by R.A. DeLorenzo, Program Director, FY 1984 Financial Plan, bay 25, 1983, Attachment E.) -- which have not been the subject of any advisory letters received by the Intervenor.) he Northwest Power Planning Council, on the other hand, has j' stated that the plant will not be needed earlier than 1996. 13g Rosolie Affidavit. f Within the context of 10 CFR 50.55(b), reasonableness of the time period requested must be viewed two ways, the first being a matter of sufficiency and the second, does it comport with the intent of the Congress and the Atomic Energy Act. We Applicant ( has requested a 91/2 year delay in completion, 41/2 years for delays already incurred and now necessary for completion and 5 for l deferral. On May 26, 1983, however the BPA issued " Analysis of Alternatives Related to WNP-3", in which it proposed various alternatives related to the completion of WNP-3 which have a corresponding impact of deferral on WNP-1 of 2 to 7 years..ho i document discussed a 5 to 12 year deferral of WNP-1, not a 2-5 year j,; deferral as previously discussed by BPA and as represented by the Applicant to the NRC. While the " Analysis of Alternatives Related lf to WNP-3" (hereinaf ter the"WNP-3 Decision Document") states that

• it does not constitute a change in course for the WNP-1 project "it was assumed that WNP-1 would be brought on line 3 1/2 years after WNP-3" if WNP-3 were delayed 3 or more years.

WNP-3 Decision ( '( Document, at 23 (Attachment F). Contingency 2a (a 3 year delay in \\. WNP-3) which has been chosen by BPA/WPPSS (133 3.g. letter from ,.,. 7;,,. ;

rg -1b-1 i D.E. Dobson, Acting Program Director WNP-3 and 5 WPPSS, to D.M.

(.

Sternberg, Reactor Projects Branch No.1, NRC, dated July 13, 1983 and Analysis of Resource Alternatives Summary & Conclusions, EPA % May 26, 1987 at 7 (Attachments G and H respectively).) includes the deferred " arrival of No.1 to June,1993." WNP-3 Decision Document at 24, Table III.C.1. 15 Intervenor's knowledge the s NRC Staff is unaware of the impact of WNP-3 on WNP-1. 333 Response i to FOIA Request 83-515, submitted by Nina Bell, August 26, 1983, ,e .) dated September 20, 1983 (Attachment I). In f act, the NR,C Staf f s SER was published subsequent to issuance of the WNP-3 Decision f Document so the NRC Staff is apparently content to ignore statements by BPA related to construction schedules for WPPSS projects. In sum, the construction permit amendment to extend the completion date of WNP-1 to 1991 requests a period of time which is not reasonable by I dint of being insufficient. I There are further indications regarding the insufficiency of 2 i the time period requested in the extension. The first of these is ( 9 an additional downward trend in forecasting done by the BPA. Jgg i 1 Attachment B. This alteration caused the agency to lower its base case forecast for 1980-2000 from 1.6 percent to 1.4 percent.

E This further decrease in need for power comes af ter analyses l?

which indicated the lack of need for WNP-1 and, caused its deferral 9 ii II for 2-5 years, as put forth by NRC Staff and Applicant.

i

'I Additionally there are issues related to the long-term 'ii financing of WNP-1. Intervenor has alleged that financing vill 'ii not become available within the time period requested. 133 l 7( Intervenor's 2nd Updated Responses to Applicant's First Set of I I f i Interrogatories, July 13,1983, at 1. Intervenor will present ['

ee J. J.

t Jim Lazar as a witness to testify on this lack of financing 3 neither

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j the NRC Staff nor Applicant have met their burden of proof by showing that financing will exist for WNP-1 within 2 to 5 years a since "mothballing". Currently, in part due to the default on bond obligations for WNP-4 and 5 there is no ability to finance WNP-1. Rosolie Affidavit at 3 None of the bailout plans ? presented to Congress have attempted to raise funds for completion 1 of WNP-1. BPA has shown there is no t ability to finance WNP-1 by recommending the halt of construction on WNP-3 which has a corresponding impact on restart of construction of WNP-1. WNP-3 Decision Document at23. The WNP-3 decision was based on new need for power and new financing project-ions made subsequent to the decision to defer construction of WNP-1 2- [ for 2 to 5 years. Thus, there is even less likelihood financing will exist prior to 1985, by BPA analyses, then when construction ceased. (1985 is the date when construction would have to begin for plant completion by 1991.) The second test of reasonableness is whether the time requested fulfills the intent of Congress upon passage' of the Atomic Energy Act and NEPA. While the Commission noted in WNP-1 and 2, supra, that "the purpose of a construction permit extension proceeding is not to engage in an unbridled inquiry into the safety and environmental aspects of reactor construction and operation" a subsequent Appeals Board ruling determined that "[a] judgment must still be made as to whether continued construction should nonetheless be allowed." WNP-2, supra. In this case the requested 4

[ -as-(- extension is for 9 1/2 years. In determining if this is reasonable the Licensing Board must determircif there is a safety and/or environmental significance to the delay. The WNP-3 Decision Document states: "The NRC Staff has expressed a concern for equipment deterioration during delays which exceed 5 to 10 years. Equipment necessary to safe operation cannot function if degraded. This is a narrow and " bridled" inquiry into the safety significance of construction deferral. 8 h There is also an environmental impact whihc must be weighed in determining if 9 1/2 years is a reasonable period of time. The NRC Staff Saf tey Evaluation Report (SER) dated June 16, 1983 ~

1..

l; (submitted as Attachment 3 to the Motion for Summary Disposition) states: ' ( The Staff has also considered the environmental impacts of the extension of construction permit, and has determined that the proposed action does t' not entail any significantly different construction ^! actvities from those which were considered in the Final Environmental Statement for WNP-1 and 4 (NUREG-75/012), dated March 1975. The staff, the therefore, concludes that the proposed action

i vill not alter the conclusions reached in NUREG-75/012 P

regarding the environmental impacts and cost / benefit l! balances of construction of WNP-1. is b.- SER at 3. The NRC Staff has offered no basis upon which to I conclude that the passing of a decade vill not alter the impact

i of construction activitic More importantly the determinations i

of cost / benefit which includes the cost of power, the alternatives s .f to the project and the need for power.are significantly and rapidly 1 changing. The SER offers no basis for the conclusion that the ,5 ( I o =

r

• primary benefit of WNP-1 -- electricity -- will, in fact, be

-{ needed. Additionally, the SER mentions, in an unrelated section, t-that the NWPPC issued a draf t report entitled " Regional Conservation i k and Electric Power Plan 1983" which states "that its task force of nucleab experts has concluded that it would be difficult to i mothball a nuclear plant for more than five years." SER at 3. l The SER concludes that this finding addresses economic and ~ commercial considerations (not public health and asfety) however e i it does not address this as a possible socio-economic impact I.. under the cost / benefit annlysis required. In fact, there are 9 material issues which remain in dispute despite the issuance of f the SER. Such issues have not been controverted by the facts ~ r set forth in NRC Staff and Applicant's motions. E( The Applicant's position is that the ' reasonableness of the time requested should depend upon the basis used to support a i finding of good cause for the extension. See e.g. Licensee's 1 5. Response to Coalition's 2nd Set of Interrogatories, June 28, 1983, i,} f interrogatory no. 26. The basis offered by the Applicant and E ii accepted by the NRC Staff are the five offered in support of the ?.9 E original application for extension and the BPA recommendation which i 'E encompasses two major factors: lack of financing and lack of need 't f for power form the project. The BPA recommendation must be viewed s E in the context of more recent BPA analyses including the decision to mothball WNP-3 which BPA says will impact WNP-1. Thus, all fs lE parties agree on at least these two criteria with which to judge ' 3. 5-e ,7.- - ...j.., -.-a

f-l l reasonableness. The Coalition has stated clearly in its contention ( and in responses to interrogatories that there is no need for power and no financing ability. Neither the NRC Staff or the Applicant have attempted to address these genuine issues of fact at issue in thid case in their respective motions for summary disposition.

Moreover, Coalition intends to sposor a witness (Mr. Lazar) at the evidentiary hearing to testify on need for WNP-1.

See Bell Affidavit. f 'l VI. CONCLUSION As stated abovej neither the NRC Staff or Applicant have met their burden of proof, controverted all the facts on the record and shown that all genuine. issues of material fact need no further ( hearing. Therefore, the Licensing Board should deny their motions for summary disposition and convene the evidentary hearing scheduled for January 10, 1983. Respectfully submitted e Nina Bell, Intervenor Coalition For Safe Power Dated, this 13th day of December, 1983. ( W e>

• y e

ATTACHEENT A . r^,. ATTACMMCiT 2 i April 22,'if32 v I*.r. Jenn Weich Chair..:n. irinance Cec::ittee Ext:u:iva E:nr.. Washing.=n.Publi: Power Sc;;1y System 1. 9.Q. 4 x 968 ' .r:....

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200:: Ge - Richiane,ge Washingten Yty. :'.. L'ashingt:n Se332,, ~.. ' . Re::.Yeur. Let.ar Gated April 22, 1922.. ...c Daar Mr..Welcn:.-.... .,, ', ~.... ..g..;.,,.. ..r Y: esked whether, as owne s of Wh? No. 3, tre w:uld resis; a ; :;; sal to cefer c:n-inued cons: unien.en th:t project.,The answer is yes. We wil1 O. i ' viscrc=1y re:ist any :=h effort:. .. r :.E.. ' '

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!! :en:fr.uas t: he cur fi = belief tht ti; i: in the best interests of the regien an: its ele: r-;c utility cust=.ers that. WNP M s.1, 2, and 2 all be

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:e::: he defe. red. The general e::ne:ny of the regics, its e.:1:y=sn pi ure, and the long-tem interens cf its ele t-i: Utilit cy expeci:1=s cc=le:ica of the three s. reja:::.y cust=ers t e

1: sc:<2:

Anwering the two specific :;ues:1:r. p-- in y:t: t:, eer re,:nses are as es::as: ( 1 1. Deferral of c:nstr" ti:n of h" P No. 2 w:uld te very detri=en.a1 t: and== w u:d ene.cise our c:=rs=:11 cnd leggi re ::ie: cur cu::: ar: preven: even carerr::, anc 2. We c:ntinue :: ht, c:: we alw:y: h.ve been. int'ere::ed in :ur any arranga.-2n: wr.1ch is in the inte.as of the Eegion coo cur cus:=.e:uir.g -s .and would, of c:.:e, he willing o verk with tha Supply Sysa, SPA and i' c.ht. s c ce ar:.:nc astern 1:i':e sosutions. Sincersi.v. fi f* ~ .s. W. G 4 - d .c V.J. yd,ra, Presiden: 5 Chair =an of ths Bcard kin..J-'Y l$ % ~ Rchart H. Short, Chair:.:n of ths scard C C </ /.s..'.c.G:

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xw gag ~, y gg,~g - ih_h h,hhh h,.kk c =. w.: e" ' p,o lE"WS$W E$$ &WsX.S%Rt%?$J5%. N. \\l. Bonneville Power Administration FOR IMMEDIATE RELEASE k'ednesday, August 17, 1983 j PORT 1.AND, Ore. -- The Bonneville Power Administration's long-term forecast for the use of electricity in the Pacific Northwest is down slightly, the agency said today. Northwest loads in the year 2000 are now expected to total 22,000 average This is some 900 average megawatts less than was forecast a year cegawatts. The difference is almost enough electricity to supply the present needs ago. of a city the size of Seattle. The dotimward revision in the total load was attributed to: - Additional savings in energy due to BPA's conservation program; for lower industrial loads (mainly aluminum companies) whien -- A forecast BPA serves; and slower than expected rate of recovery from -h* curre

• conom"

-- A recession. Many Northwest utilities and the Northwest Power Planning Council base 1980-2000. For their forecasts for electric energy consumption on the period for Northwest power loads this period, BPA in July 1982 issued a forecast showing an annual compounded growth rate of 1.6 percent. 1980-2000 to This week, BPA lowered its base case forecast for the period One reason for the lower forecast up to the year 2000 is that 1.4 percent. electric loads declined during the 1980-1983 period due to the Northwest economic recession. Beginning with this latest forecast, BPA vill issue a new projection for is made. BPA's 20 year energy growth extending from the year the forecast from this year until the year 2003 calls for 'a growth rate of 1.8 forecast The attached summary discusses BPA's forecast methods and its percent. estimates for the period 1983-2003. 4 i i i W-ALM-2281P ( Telephones: Malling Address: Me:ia Ref ations Office (503}230-5359 Media Relations Off ce. ALM Roo n 457 Bonneville Power Admin. i Bo neville Power Aomin. P.O. Box 3621,. 10C2 N.E. Hottacay Stree: FTS 4245359 j Portland. Oregon 97206 l Pemane. Oregon 97232 ~-v-m,-

f* Bnckgrcund Summary Load Faroccst [ The Bonneville Power Administration's forecast for power consumption in the Pacific Northwest between now and the year 2000 is down slightly. i A year ago, BPA predicted that the region's loads at the turn of the century would total 22,900 average megawatts. The new forecast reduces that figure to about 22,000 average megawatts. The difference represents almost enough electricity _to supply the current requirements of Seattle. The downward revision in the forecast is attributed to: -- Additional projected savings in energy due to BPA's conservation program. -- A drop in the forecast for the industrial loads served by BPA (mostly alusinu= plants). -- A slower than expected rate of recovery from the 1961-82 economic recession. The Facific Northwest is emerging from three years of little or no growth in the use cf electricity. The overall load is now lower than it was when the tnree-year 1980-1983 period began. IPA it. July 19E2 issued a forecast for Northwes,t power loads showing an annual ec= pounded growth rate of 1.6 percent for the period 1980 to 2000. t This week, 8PA lowered its forecast for the period 1980-2000 to 1.4 percent. One reason for the lower forecast up to the year 2000 is that Northwest ele:tric loads declined during the 1980-1983 period due to the economic recession. EPA this week also issued a forecast for the 20 year period from 1983 to 2003. The base case load growth forecast for 1983-2003 is 1.8 percent. Tne annual rate of growth is expected to fall somewhere between a low of 1.3 percent and a high of 2.6 percent. The low and high represented by this range reflect the uncertainty inherent in forecasting Northwest electrical loads. In formulating its 1983-2003 estimate, BPA attempted to predict the growth in three major sectors of the economy: residential, commercial and industrial. The co==ercial sector is expected to have the greatest growth. The annual rate of growth anticipated for each sector is: Residential -- a baseline compounded' annual growth of 1.6 percent within a range of 1.3 to 2.6 percent. Co=mercial -- a baseline growth of 2.1 percent within a range of 1 to 3.4 l percent. k o. g 4 O e e g ym,- -w----w ..,,y, _m ,,,-..,,,-.--.y ,-c.-

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,_( Industrial -- a baseline growth of 1.7 percent within a range of 1.4 to 2.5 percent. The following table shows the breakdown of loads for the baseline case. l BASE CASE Pacific Northwest Regional Firm Electricity Loads and Annual Rates of Crowth, 1983-2003 (In Average Megawatts) SECTOR 1983 1985 1990 1995 2000 2003 1983-2003 AARG 2 Residential 5416* 5466* 6094* 6577 7091 7413 1.6 Co=mercial 2963* 3060* 3509* 3853 4279 4526 2.1 Industrial 3963* 4149* 4744* 5030 5386 5589 1.7 DSI (Firs) 1833 2214 2632 2657 2671 2682 1.9 Federal Agency 202 220 262 281 310 323 2.4 ( Irrigation Sel* 657= 658* 706 728 738 1.4 Total Sales 14938 15766 17899 19104 20465 21271 1.8 Losses 1000 1039 1171 1259 1358 1417 1.8 Total Loads 15938 16605 19070 20363 21823 22688 1.8

• Sector totals approximate.

2 AARG= Average Annual Rate of Growth l-For the baseline case, the Northwest's population is expected to grow to a total of 10.9 million persons -- at an average annual rate of 1.5 percent as co= pared with an average annual rate of 0.8 percent for the nation as a wnole. i = l Over the same period, non-agricultural employment is expected to grow by an j average annual rate of 2.4 percent -- from about 3 million in 1983 to 4.8 million in 2003. Real income in the region is expected to increase at an average annual rate of 3.6 percent. The average price of fuels competing with electricity is expected to increase as the century draws to a close. Natural gas prices are likely to grow at an ( l l

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t=.- 3::-js is.g average annual rate of 2 percent. Oil prices will grow at a rate of 2.5 percent, or slightly faster than the price of natural gas. h The projections for the baseline case were produced by merging separate leag-term and near-term forecasts. The long-term forecast employed a supply pricing model and a series of demand models, each of which addressed a 5 specific _ sector of consumption. [ Ine long-range approach did not include such variables as the weather or { economic fluctuations. However, the short-range forecast was designed to j respond to such influences, and this allowed them to become a part of the j final forecast. BPA plans to update its near-term forecasts on a quarterly basis so that current economic information can be incorporated into the [. projections. EPA used contract demands of the direct-service industrial customers for its 1982 forecast. The 1953 forecast assumes, however, that the Alumax plant will not be built. It also assumes greater savings from conservation than did the 1982 forecast. The savings f.gure is up by some 302. average megawatts by the year 2000. The methodelogy was also modified and improv,*6 in 1983. Two charts are attached. The first shows the 1982 and 1983 baseline forecasts. The second shows a breakdown of consuming sectors. August 17, 1983 W-ALM-2280P G i ( ~ \\

I* I 'd Attschment C q 'g'? 9%Q, a 4. NA. COMPARISON OF PRESENT WNP-1 DELAY PLAN ['I WITH ALTERNATIVES o j ITEM PAGE

SUMMARY

EVALUATION 1-10 DESCRIPTION OF ALTERNATIVES 11-22 l EVALUATION OF POWER MARKETING 23-25 VERSUS DELAY DURATION RISK FACTORS OF _L,0N,G-TERM DELAY 26-27 FINANCIAL COMPARISON OF ALTERNATIVES 28 BOND ISSUE SCHEDULE OF ALTERNATIVES 29 ~34 (

SUMMARY

EVALUATION j COMPARISON OF PRESENT WNP-1 DELAY PLAN WITH ALTERNATIVES ISSUE: T The Executive Board has requested an evaluation of alternatives relative to the present WNP-1 delay plan. In response to this request, the Supply System staff has defined alternatives and prepared the following information. BACKGROUND: As of April 1982, WNP-1 was approximately 62 percent complete an[was seven munths ahead of the official fuel load date of December 1985. The Administrator of the Bonneville Power Administration (BPA) recomended to the Executive Board on April 19, 1982, a delay of WNP-1 for up to five years. This recomendation . reflected these considerations: , The lower regional load forecasts as identified by BPA. e e \\ The desire to maximize the region's flexibility to accommodate changing load and economic conditions. The need to keep short-term rate increases to a minimum. e On April 29, 1982, the Board of Directors subsequently approved a two to five "~ year delay for WNP-1 by passing Resoluti-11221 entitled, "A Resolution Direct-ing a Financing and Construction Program for' Projects 1, 2 and 3 and An Extended Construction Delay for Project 1." A decision was required on April 29, 1982, ( to allow financing plans.to proceed for WNP-2 and WNP-3. A WRP-1 plan for'the implementation of Resolution 1221 was ' approved by the Executive Board on May 28, 1982. This delay plan was initiated and staffing levels (which were at 6,375 on May 1,1982) were reduced to 1,176 (Supply System and Contractor personnel); 400 below the Board approved plan. THE NEED TO INVESTIGATE ALTERNATIVES: On September 10, 1982, the Executive Board requested that alternatives to the present plan be evaluated and that one of the alternatives be a " Drop-the-Wrench" i alternative. Meetings were conducted on September 27, 1982 and October 4,1982, between the Supply System, the Construction and Operations Committee and the BPA te assess the present plan a'nif variou's' alternatives. The Construction and ~ Operations Committee and BPA indicated that alternatives to the present plan i should be prepared s ith the objectives of lower staffing levels, minimizing near-i term cash flows to reduce the BPA short-term rates and focusing more on a 5-year delay due to the recent load forecasts. i l A number of factors are considered important in the evaluation of alternatives. These factors include: The number of personnel assigned to WNP-1 and the loss of technical con-e tinuity. ( The early attrition of personnel from WNP-2 should WNP-1 manpower be reduced. e i e D ,...m.. -me -.- _., -,.--,,.__,_.~,,_.,~,.._.-m.,mm-,.,__ 9 "

o o ne a s um inw i ew ee ws,y s im. 4, The uncertainty over load requirements. e The influence of power marketing strategies, i e The reductions in the contractors' availability. ( POWER SALES EVALUATION: It is recognized that there are uncertainties surrounding the Northwest Regional load forecasts and that once such a forecast is developed there will continue to be uncertainties with respect to the forecast accuracy. Therefore the sale of oower outside the region was evaluated in order to assess the conditions ," ~ unoer which power sales and the need for power controlled the decision on pro-ject schedule. The evaluation of power marketing strategies over the range of project delay ourations has been accomplished using the same methodology used by BPA in its .. published short-term marketing. policy for ovaluating alternative resources. Although power from WNP-1 may not appear to.be reouired in the Pacific Northwest until sometime in the early 1990's, power is needed in the Southwest in the late 1980's..to displace oil and gas capacity. The current avoided cost of energy production in California is approximately 50-60 mills /kWh based on gas-fired generation energy costs. This cost is exoected to increase significantly early in 1983 under proposed gas rate increases. Over the next several years 'the availability of gas to displace oil may become more critical. In any event, the pressure on the avoided cost of energy is climbing. It aopears there is a fun-damer.tr.1 economic benefit available to support a sale of su,,lus energy from this project. For example, if the project was completed by 1988 under the present 2-year delay plan and all output until July 1, IJ91 was sold as surplus power at a then current ccst of 47.0 mills /kWh or a 1982 cost of 26.5 mills /kWh. the levelized present value of the project over the short-term would break even with.the delay to 1991. Any sales above the break-even point, up to the avoided cost of gas, would produce an additional-significant benefit to the region. The net benefit to the ratepayers of a 2-year delay will keep rates lower in the intermediate and long-term. As indicated in the BPA study, the long-term economic benefits of any of the alter-natives without the sale of surplus power shows there is little to choose between the various alternatives on a present worth - levelized annual basis.

However, the early completion of the project and the sale of any surplus power at an economically attractive price would produce substantial long-term benefits to the l

region. A 2-year delay coupled with sales of power to other entities through 1991 will result in a present value cost savings of $300 million to $500 million. P?.ESENT WNP-1' DELAY plan: The present delay plan is structured to provide a 5-year delay with a 2-year completion delay option. A minimum staffing level of 960 will be reached in January of 1983. A ramp-up will begin in the first quarter of 1983 and continae ( to an October 1, 1984 staffing level of 3,400. A decision is to be made bx October 1984 recardino the duration of the delay -- two to five yearsm A 2-year delay will result in peak staffing of 6,200 by February 1985 and a 5-year delay will result in peak staffing of 3,900 by February 1985. 1 .?- c.

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\\ WASHINGTON PUBLIC POWER SUPPLY SYSTEM ~ ~ WNP-1 FY 1984 FINhNCIAL PLAN MAY 25,1983 -l PRESENTATION T0: Executivo Board Construction Committoo PRESENTED BY: R. A. De Lorenzo, Program Director M i ~

WNP-1 FY 198's FINANCI AL PLAN INTRODUCTION i BACKGROUND e APRIL 29, 1982: THE SUPPLY SYSTEM'S BOARD OF DIRECTORS AUTil0RIZED AN EXTENDED CONSTRUCTION DELAY OF PROJECT NO. I'. BASED ON THE RECOMMENDATION OF Tile BONNEVILLE POWER ADMINISTRATION ' UP TO A FIVE YEAR DELAY o MAY 28, 1982: EXECUTIVE BOARD DIRECTED IMPLEMENTATION OF CONSTRUCTION DELAY PLAN GRADUAL RESTART TO BEGIN IN JANUARY 1983 I OCTOBER 1984 DECISION POINT FOR A TWO OR FIVE YEAR DELAY STAFF LEVEL WOULD DROP TO 960 BY JANUARY 1983. i e OCTOBER 15, 1982: EXECUTIVE BOARD DIRECIED MODIFICATION TO MAY 28, 1982 PLAN STAFF LEVEL WOULD-DROP TO 500 BY JULY 1, 1983 NO SPECIFIC CONSTRUCTION RESTART ACTIVITY PLANNED BASIS FOR APPROVED FY 83 BUDGET (REVISED OCTOBER 22,.1982) e ' APRIL 27,1983: EXECUTIVE BOARD'S CONSTRilCTION COMMITTEE RECOMMENDED TilAT THE WNP-1 l FY 84 BUDGET, BE PREPARED USING Tile CRITERIA AS JOINTLY DETERMINED BY SUPPLY SYSTEM AND BONNE.VILLE POWER ADMINISTRATION l MAINTAIN ASSETS AND PLANT.LICENSABILITY .MINIMlZE RESTART AND COMPLETION COSTS 10 Tile LARGEST PRACTICAL EXTENT l STAFF LEVEL WOULD DROP TO 300 - 350 LEVEL llY MARCll 1984 3 J w w

I WNP-1 FY 19881 flNANCIAL PLAN CRITERIA FOR EXTENDED CONSTRUCTION DELAY PR (JOINTLY AGREED AMONG Tile SUPPLY SYSTEM, BONNEVILLE POWER ADMINISTRATION AND PART ~ l, BASES ~ 85. ADDITIONAL FUNDING FOR Tile PROJECT WILL e CONSTRAINS CASil FLOW AND STAFFING LEVEL THE PROJECT IS NOT REQUIRED TO BE ON LINE UNTil e ESTABLISHES PROJECT RESTART /RAMPUP DATE e OBJCCTIVES PRESERVATION OF LICENSABILITY AND ASSEls PROVIDES BASIS FOR MINIMUM STEADY-STATE STA t-e l IDENTIFICATION AND.lMPLEMENTATION OF 1 COMPLETION COSTS TO Tile LARGEST PRACTICAL EXTENT e PROVIDES BASIS FOR OPTIMIZING STEADY-STATE ST O -= = - ~ ~ - - -- N a evs'uem r.-grW.3 y',p. yygj gg g=,ydy {%53Qg4,KJg",] gqt,s

f/ I I / I [ ANALYSIS OF ALTERNATIVES RELATED TO WNP-3 MAY 26,1983 ( Bonneville Power Administration l l w- ~

.s.. ALTERNATIVE CONSTRUCTION SCHEDULES The options which will be analyzed in this paper consist of variations in [( the level of construction activities and, the'refore, various commercial operation dates. Alternative 1 (Contingencies la and 1b) is based on the current schedule of a December 1986 connercial operat,fon date. Alternative 2 (Contingencies 2a -2g) assumes a reduction in construction to a minimum preservation state with varying periods of delay or termination. Alternative 3 (Contingencies 3a -3c) assumes that construction is reduced to an intermediate level with varying delays or termination. Constinction on WP-1 has been reduced to a minimum site preservation state, with an expected on line date of 1991. There is no need to change the cer struction status of WP-1 at this time, nor is any new course set for WNP-1 in this document. However, in evaluating alternatives which involve a delay 'of WP-3, it is necessary to make some assumptions about the schedule of WP-1. $For the purposes of this document, it was assumed that WNP-3 would be i completed before WNP-1, barring involuntary termination of WNP-3. If WNP-3 were delayed 3 years or more, it was assumed that WP-1 would be brought on line 3-1/2 years after WNP-3. It would take approximately 3-1/2 years for load growth to absorb the output of WNP-3, assuming load /resoun:e balance at the time WNP-1 comes on line. This is the assumed timing for regional resource-economic analysis. However, it is likely that construction management and other considerations will dictate a different optimal on-line l date for WNP-1. l An alternative e:::motior. al.'

• tve been-that sufficient surplus firm power sales contracts could be executed to justify an earlier completion of l (

WNP-1. This latter assumption was not adopted for purposes of conservatism and because surplus sales are addressed elsewhere in this document. Some analysis was also done of a 3-year delay of WNP-3 with no further l delay of WNP-1. These assumptions about the schedule of WNP-1 were made only i for evaluative purposes, and do not imply any intention to change the status of that project. For purposes of this analysis, " intermediate level" is defined as the i ' level of staffing required to maintain the project in. a standby (optimum restart capability) mode'. The total manning level is estimated at approximately 1,100 personnel comprised almost entirely of nonmanual forces. There are no physical construction activities occurring. The cash requirement necessary to sustain this intermediate level is approximately $10 million per month (70 percent share). j C. SPECIFICATION OF ALTERNATIVES AND CONTINCENCIES CONSIDERED The alternatives and contingencies considered in the analysis are described in Table III.C.1. I, i l' l 23 l l

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Table III.C.1--SPECIFICATION OF ALTERNATIVES AND CDNTINGENCIES p NOTES: Unless otherwise stated, assumptions,in table refer to WNP-3. 1 All alternatives other than Alternative lit assume financing WNP-2 with BPA - revenues. 1 ( All alternatives assume that WNP-2 arrives on schedule in February 1984. Alternative 1: " Maintain WNP-3 on current Schedule." Identification Schedule Assumptions Financing Assumptions Contingency la Maintain current schedule Finance through issuance of (conventional vor Nos.1, 2, 3 (e.g., Supply System bonds financing) No. 2 in February 1984, i No. 3 in December 1986, and No.1 in June 1991) Contingency 1b Maintain current schedule Finance with BPA revenues (financing with for Nos.1, 2, 3 after exhaustion of any BPA revenues) remaining bond-financed construction funds Alternative 2: " Reduce WNP-3 to preservation state as soon as possible." Identification Schedule Assumptions Financing Assumptions Contingency 2a Reduce activity on No. 3 Finance No. 3 with BPA (3-year delay) to preservation state as revenues until construction soon as possible; defer resumes in July 1985 arrival of No. 3 for'3 and with Supply System ( years to December 1987; bonds thereafter. defer arrival of No.1 to Finance No. I with bonds. June 1993. Contingency 2b Reduce activity on No. 3 Finance No. 3 with BPA (5-year delay) to preservation state as revenues until construction soon as possible; defer resumes in July 1987 arrival of No. 3 for 5 and with Supply System years to December 199T; bonds thereafter. defer arrival of No.1 to Finance No. 1 with bonds. June 1995. Contingency 2c Reduce activity on No. 3 Finance No. 3 with BPA (7-year delay) to preservation state as revenues until construction soon as possible; defer resumes in July 1989 arrival of No. 3 for 7 and with Supply System years to December 1997; bonds thereafter. defer arrival of No.1 to Finance No. I with bonds. June 1997. l l e k 24 ~.... ~

( Table III.C.1--SPECIFICATION OF ALTERNATI Financing Assumptions Identification Schedule Assumptions _, Finance No. 3 with BPA l f f Contingency 2d , Reduce activity on No. 3 revenues until construction (8-year delay) to preservation state as resumes in July 1990 soon as possible; defer and with Supply System l arrival of No. 3 for 8 bonds thereafter. ears to December 199T; Finance No. I with bonds. ' e er arrival of No.1 to June 1998. Finance No. 3 with BPA . I Reduce activity on No. 3 revenues until teminated. Contingency 2e to preservation state as (involuntary soon as possible. temination of Terminate No. 3 involun-No. 3 but not tarily on June 1,1988 No.1) due to events revealed et that time. Maintain current schedule for No.1 Finance No. 3 with BPA Reduce activity on No. 3 revenues until determination Contingency 2f to preservation state as is made to tenninate. (involuntary soon as possible. temination of Terminate both No. 3 and both No. 3 and No.1' involuntarily on No.1) June 1,1988 due to. events revealed at that ( time. Finance No. 3 with BPA Reduce activity on No. 3 revenues at reduced level Contingency 2g (commitment of to preservation state as of construction (BPA share = soon as possible. Resume $15 million per month) through BPA revenues for construction on No. 3 June 1988 and with conven-funding at in July 1985 after tional Supply System bond reduced level of No. 2 is completed. This financing thereafter to construction) results in arrival of No. 3 completion. in June 1990, "Imediately reduce level of construction of WNP-3 to inter Alternative 3: hvel.- Financing Assumptions Identification Schedule Assumptions Finance No. 3 with BPA Reduce activity on No. 3 revenues until detemina-Contingency 3a to intermediate level. In tion is made to resume November 1983 detemine construction. Subsequent that full-scale construc-financin9 is with Supply tion can be resumed based l on events revealed at that System bonds I time. No. 3 arrives in August 1987. No.1 arrives l on current schedule (June 1991). 25 8 e e . ~ -..

r ...... -. nema, poizhcong Assumptions Contingency 3b Reduce activity cn No. 3 Finance No. 3 with BPA to intermediate level. On June 1, 1988 revenues through termination. l determine that full-scale construction cannot be ( resumed, based on events revealed at that time which point No. 3 is, at terminated. Contingency 3c Reduce activity on No. 3 Finance No. 3 with BPA to intermediate level. revenues at reduced level In March 1984 resume of construction (BPA share = construction at reduced $15 million per toonth)

level, through September 1987 and with conventional Supply System bond financing thereafter to completion.

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fre c y m ACTS ,'ICENSIUGANDOPERATINGIMP L geensing Impacts 1 Status of Licenses, The Supply' System currently holds WRC f a. NRC Construction Permits _.-2, and -3. Construction Pamits for WNP-1,f a plant to be completed on a specific be any phase of the construction oThe only requirement related Construction Femit. completed by_ the latest completion date specified in the schedule. [ Permits for The la' test completion dates specified in the Construction 7 WNP-1, -2, and -3 are: January 1,1982 WNP-1 February 1,1984 WNP-2 January 1,1985. " good cause" WNP-3 The latest completion dates may be extended by the N ficulties, changing must show that factors beyond his control (labor dif) were the cause (42USC2235; 10CFR50.55). regulatory requirements or financing difficultiesdel it extension. f the WNP-1 The Supply System has pen' ding a request for an extenstio d by the NRC and a latest completion date to June 1991. extension of the WNP-1 Construction Pemit has been grante d Licensing hearing is currently underway before an NRC Atom i i.,effect pending NRC action on the requested extension. ired, provided I Board. an Operating License is received prior to Fe 1984. l ill be necessary A request for extension of the WNP-3 Construction Permit w The length of the extension requested will b l prior to January 1,1985. NP-3 Construction Permit, dictated by the project schedule at that time. this area is to request only one amendment to t i l for a public l NRC must grant an Operating License for each hearing. NRC Operating Licenses. Usually an Operating plant prior to fuel loading and initial operation. t and a Final License application supported by a Final S j letion. The NRC review during the Operating License application is subject to a l i C and For WNP-1, the license application has been accepted j ntly licensing activities (except for public hearings) are not curr ding A request for a hearing on the WNP-1 Operating Li [i proceeding. l { 39 e O

M' -- is currently under consideration by an NRC Atomic Safety and Licensing Bonra. ~ 'No decision has been made as to whether the request for a hearing should be granted. ~ The licensing reviews for WMP-2 are virtually complete with only a ( relatively small number of well-defined open issues remaining to be resolved. The major activitiy is the completion of a large number of items comitted to during the licensing review process. A public hearing on the WNP-2 Operating License is not expected. The WNP-3 Operating License review is in progress. NRC is scheduled to issue the Safety Evalution Report documenting its review and any open items resulting from its review in December 1983. The Supply System is scheduled to submit all technical infonnation necessary to support the NRC milestone by July 1983. A petition for a public hearing on the WNP-3 Operating License is currently under consideration by the Atomic Safety and Licensing Board. A pre-hearing conference has been scheduled by the Licensing Board on August 3-4, 1983, after which a decision will be made as to whether the hearing request should be granted. Washington State Licenses. The Supply System currently holds State Site Certification Agreements for WNP-1, -2, and -3. The State of Washington Site Certification Agreements (RCW 80.50) do not specify dates for completion of construction. However, notification of the Washington Energy Facility Site Evaluation Council (EFSEC) of.significant project changes is required. No additional operating license or authorization is required from the State. b. Impacts of Deferral Alternatives The impact of an additional 2-to 7-year deferral, beyond 1991, of the - f( licensing of WNP-1, cannot be defined with any certainty. The principal risk is the potential for changes in NRC regulations which are tied to the FSAR Docketing or Operating License dates, and these could be imposed on WNP-1. It is not possible to accurately quantify this impact; however, if the highly unstable regulatory environment of the past 10 years continues, the magnitude may be greater. The impact of changing requirements increases for the longer deferral periods (greater than 5 years). WNP-3 will also be exposed to changing requirements if construction is ,j deferred. However, the deferral period under consideration (3 to 8 years for b WNP-3 versus 5 to 12 years for WNP-1) suggests that such deferral will have a f somewhat smaller impact on WNP-3. The NRC staff has expressed a concern for equipment deterioration during delays which exceed 5 to 10 years. While this concern would need to be addressed, deterioration of equipment while under construction or during long idle periods after operation, are normal design and maintenance considerations. Proper support of an equipment maintenance program with reasonable allowance for replacement can minimize the risk in this area. The potential for intervention in the hearing process is increased as a result of the deferral of WNP-3. As indicated previously, a petition for a hearing on the WNP-3 Operating License is under consideration by the NRC. l ( 40 I w w

www ' ihm7, ~ .This petition was filed 4 months late and NRC regulations establish a relatively high threshold for the late petitions. An announcement of a delay i of WNP-3 could impact the Licensing Board decision on this petition. While none of the alternatives under consideration addresses a change in the WNP-2 schedule, the deferral of WNP-3 with its resulting adverse effect on the Supply System organization will undoubtedly impact WNP-2 licensing activities. Voluntary resignations during the past several months have reached an annual rate of 25 percent on a company-wide basis, with the primary cause given as the uncertain financial future of the company. While the attrition-in the Generation and WNP-2 orjanizations has been significantly less (15 percent), a shutdown of WNP-3 would, nonetheless, have an impact on them..Recent experience suggests a 15 to 20 percent loss in the WNP-2, A loss of key Generation and technical organizations supporting WNP-2. personnel in the licensing activity and the technical organizations supporting the completion of a large number of licensing comitment items will be very difficult to accommodate at this point in the WNP-2 program without a schedule impact. Much of the WNP-3 licensing review effort (approximately 1 year duration) may be lost if ramp down is too rapid, and there is a failure to complete and document the NRC staff Safety Evalution Report. A key factor in the final judgment of readiness for operation is adequacy of management systems and stability, quality, and competence of the staff. The WNP-3 rampdown introduces a number of factors with the potential for It is putting additional strain on management which could affect performance. esser,tial that steps be taken te assure continuin5 r:magement comitment and attention to assuring safety and conducting cost-effective operations. ( 2. Ooeratine Impacts a. WNP-1. There are no impacts other than the stated dates of deferra'l in the various alternatives under consideration, b. WNP-2. A deferral of WNP-3 and the associated disruption in the Supply System organization will impact the Project, Generation and technical organiz.itions required to support WNP-2 operation in the same manner as discussed under licensing impacts. In most cases, the same individuals are involved in completing construction, startup, or licensing comitments prior to fuel load and sup1orting operations after fuel load. While it is clear in the long term that t1ere are sufficient personnel resources within the Supply System and its contractors to meet the needs of WNP-2, the short time to fuel load makes it ivery unlikely that a 15 to 20 percent loss in WNP-2 personnel can be compensa'ted for without impacting the schedule. A loss of control room personnel at this time will cause schedule slippage due to the inability to support the test program and could lead to a problem in meeting our FSAR coanit:nent to,five operating shifts. Five operating shifts is not an NRC requirement per se. However, it is very difficult to meet the NRC requirements for any significant tima period with much less than five shifts. While the impact on WNP-2 is highly uncertain, a schedule slippage on the order of a few months should be anticipated as a result of a WdP-3 deferral. t 41 ~

i 'I '$c. WNP-3. Staffing profilcs for the various alternatives under consideration were developed. The primary tpacts beyond those implicit in the deferral dates are associated with the loss and reacquisition of personnel in all of the organizations required for operation. The resulting loss of continuity j i _.( leads to additional effort required to retrain and reestablish momentum during the build up period. The impact on the operation staff under alternative 2a can be substantially reduced by assigning operations the equipment maintenance function during the shutdown. Under all other alternatives, most of the Operations staff is lost. However, assignment of the maintenance function to the Operation staff will minimize the cash flow requirements in this area under all alternatives based on WNP-1 experience. D. kngineering and Technical Concerns 4 1. Geology Of the known factors which generally affect schedule and completion, none are specifically unique to the project except the geology, as related to the magnitude of the Design Basis Earthquake (DBE). Partly as a result of the 1980 eruption of Mount St. Helens, there is current scientific interest in the potential for an earthquake or volcanic activity in Western Washington related t to subduction of the Juan de Fuca plate. The potential development and acceptance of this theory at a later time will have a certain impact on the present design. However, it is not certain such risk is singularly understood. 2. Engineering Design Changes in engineering design occur at any time and may be either favorable or unfavorable related to completing the project. Changes may also ~ ( involve refined analytical methods. When such methods are introduced, significant design changes may be necessary. While it is practically certain l that engineering design practice will change in some. way during a potential delay of the project, it is not certain the effect will be unfavorable or any significant threat to completion. l 3. Equipment Obsolescence Equipment obsolescence occurs as equipment once in use is no longer i manufactured. As this occurs the equipment may become difficult to operate, test or maintain. At the worst, a major item may be replaced. In a protracted delay, physical deterioration may also be of concern for some However, the equipment problems are not unique to delay and is a comronents. routine concern in stored and operating conditions; it is not considered a significant risk to completion of a delayed plant. 5 E. SYSTEM ECONOMICS 1. Overview Decisions on the construction schedule and funding of WNP-3 will have long-lasting and potentially large effects on the system costs of meeting the need for power. A change in construction schedule and/or funding arrangements can increase system costs by subjecting construction costs to real escalation, ( by the possibility of increasing interest rates on borrowed f.unds, by adding 42

E Attoiheent G 'p Washington Public Power Supply System Box 1223 Elma, Washington 98541 (206)482-4428 July 13, 1983 -) l G03-83-546 "A U. S. Lluclear Regulatory Comission Region V F im 'k"1 Office of Inspection and Enforcement g 1450: Maria Lane, Suite 260 m Walnut Creek, California 94596-5368 Y% 'S Attention: Mr. D. M. Sternberg, Chief S Reactor Projects Branch No. 1 g

Subject:

NUCLEAR PROJECT N05. 3 AND 5 WNP-3 EXTENDED CONSTRUCTION DELAY On July 8,1983 the Supply System Executi'te Board voted to implement an imediate extended construction delay of Project 3. Their decision was /. reached after it appeared no prudent financing could be arranged to con-tinue plant construction. This action will result in a reduction in force at the site from 1.750 employees to approximately 350 by July, 1984 Our initial planning is based on a three year construction delay, however, we have been directed to not take actions which would preclude a project restart within the next three to nine months. Detailed planni is underway to cover the project turndown, delay and ( restart, with pr mary focus on preservation of assets and control of quality records. To assure extended construction delay activities are accomplished in accordance with NRC requirements and Licensee comitments, the Supply System is developing an implementation plan. The plan will provide for a review of pertinent quality-relat'ed work and 4nspection records to determine if the associated quality records are in conformance with established procedures and reflect work accomplishment. This plan will be finalized for Supply System approval about August 1,1983. We will keep you informed as our planning progresses and would be pleased \\ to review the plan with you in Walnut. Creek. Should you have any questions or desire f urther information, please contact me directly, i Acting Program Director, WNP-3/5 OET:DRC:nj cc: J. Adams - NESCO D. Smithpeter - SPA Ebasco - New York i WNP-3 Files - Richland R. D. Hill - Puget Sound Power & Light Company i l P. Inman - Washington Water Power Company

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ib INTRODUCTION On May 10, 1983, the Bonneville Power Administration (BPA) asked the ' Washington Public Power Supply System (Supply System) to assist BPA in evaluating a number of issues associated with continued financing of Sppply Syste: Projects WWP-2 and WNP-3 on current construction schedules. The evaluation has taken the form of a series of analyses contained in the document entitled " Analysis of Resource Alternatives," dated May 26, 1983. Our letter to the Supply System focused on four broad areas of incuiry: (1) an evaluation of the prospects of overcoming existing impediments to conventional municipal bond financing of the projects; (2) the effect of the Supply System's inability to meet its WNP-4 and -3 obligations on continued construction of the net-billed projects; (3) an analysis of the resource economics associated with alternative courses of. action relative to WNP-3; and (4) an evaluation of alternative actions related to WNP-3 and their effect on the S;pply System and the region's economy and its institutions. The Analysis of Resource Alternatives document provides a detailed review cf the various issues structured within these four broad ca teg ories. This paper summarizes these analyses and contains BPA's ( conclusions. Of the five nuclear power projects under construction by the Supply Syste=, WNP-1, -2, and 70 percent of -3 are backed by BPA under long-ter= contracts called " net-billing agreements" signed a decade ago. The other nuclear projects, WNP-4 and -5, were not backed by BPA. The latter projects are terminated, and the Supply System I faces a number of serious legal challenges arising out of this i ciren= stance. These legal challenges nov also pose serious problems for ongoing conventional financing of the three remaining projects backed by BPA. VNP-1, near Richland, Washington, is 60 percent co:plete. It was placed in a preservation state last year by the Supply System for fiscal and other reasons. WNP-2, also near Richland, is 98 percent complete and is scheduled to begin producing power 'for the Northwest early next year. WNP-3, the central focus of the analysis, was 74 percent complete on April 30, 1983. i i The Supply System's ability to ensure continued ccnventional financing of the re=aining three projects faces serious impediments resulting froc the legal controversies surrounding terminated projects 4 and 5. The analysis addresses the complex difficulties and their cumulative effect on continuation of the net-billed projects. i 8

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F. As a result of its analysio, BPA is cdvising the Supply Cycten that financing for completion of construction of WP-3 at this time is neither' available nor prudent. through conventional means, from ( outside sources, or through BPA rates. The analysis further shows that the utilities within the region have access to an adequate power supply so that a 3 year delay in construction of WP-3 will not seriously jeopardize the availability of an adequate economical power supply for the benefit of the region's ratepayers. Funds -on hand, together with resources from BPA and others, are curr'ently adequate to cover those costs associated with an orderly For these reasons, BPA transition of WP-3 to a preservation state. believes that the prudent course of action by the Supply System is to delay ongoing construction of WP-3 and to ef f ect transition of that project to a preservation state as soon as possible. 4 ( t I 2

t. SUl0iART 1. Prospects for Financing ( In January, BPA and the Supply System were advised by their financial advisors that three circumstances barred conventional financing. Of those three, only the potential application of The Initiative 394 to the' net-billed projects has been put to rest. - other two--the need for legislation insuring project integrity in the event of a-Supply System bankruptcy and the challenge to the validity of the net-billed contracts--ressin. _ The underwriters, a group : headed by four of the largest investment banking firms in the nation, have advised that they cannot undertake to market bonds until these two remaining bars are removed. Bankruptcy legislation has been considered by the Washington State The Legislature and has been discussed by key members of Congress. i Washington Legislature is not expected to enact such legislation in I its current session. The likelihood of Tederal congressional action I cannot be estimated with confidence. I While a f avorable opinion has been rendered by the U.S. District Court on the question of ne,-billed contract validity, an appeal is t expected before July 115, 1983. A final resolution of this issue through judicial, legislative, or contractual means is required to g issue bonds and such solution is not imminent. Even if these impediments should be removed, recently lowered bond l' ratings, complex litigation, and the prospeAt of a def ault under the WNF-4 and -5 bond resolution and other considerations would make [ financing expensive and questionable. Should a default occur, the underwriters are unable to estimate the interest penalty that may have to be psid. This penalty would burden BPA ratepayers and could threaten project economics. In looking to other means of acquiring construction funds for WNP-3 in particular, BPA and the Supply System have investigated financing through banks and the other project owners. Other financial I institutions, to date, have been concerned with the same impediments which block conventional bond financing. The investigations with r 1 other owners have not ripened to the point where BPA or the utilities can be assured of the legalilty or success of such While efforts will'contihue along these lines, no ventures. reasonable likelihood of success is evident in the near term. l l Therefore, the only assured source of con:truction funds we can count on would be funding construction f rom BPA rates. II. BPA Rates BPA rates have risen rapidly in recent years and substantial additional upward pressure at this time could have serious adverse consequences. ( 3 o.. ^.~

i . Sinea Deccaber 1979, BPA r tss for prcforstes exctooers have rissa 2 f rom' 3.5 nills /kWh to 18,0 mills /kWh (22.8 curr:ntly prtpos d far Is th2 came the next rate period, Novesber 1983 to July 1985). period, rates'f or industrial customers have risen from 2.0 mills /kNb to 24.5 mills /kWh (25.7 is currently proposed for the next rate ( - BPA rates are now at the point where price elasticity of period). demand is beginning to occur, as well as customer and consumer l resistance to further increases. It is particularly inopportune to increase upward pressure on rates at this time since such an event could undermine the beginnings of I the, recovery of the region's industry and commerce f rom a long and deep recession. I Within the context of BPA's current rate proposal, it is possible to finance WNP-2 out of revenues and have sufficient funds to maintain WNP-3 in a preservation state provided action on WNP-3 is begun by Conversely, financing any supply Systes project from June 1, 1983. revenues rather than through borrowing will increase the immediate impact upon BPA's financial situation if there is any deviation in project costs because the total amounts (rather than debt serviceThis, combine only) will impact BPA in the near ters. high ratio of fixed-to-variable costs, would result in a significant increase in BPA financial risk. Financing full construction f or both WNP-2 and -3 f rom revenues would result in major additional upward pressure on rates, on the order of a 20 percent additional increase in the priurity firm rate, and would greatly increase ~2A finat i.31 k. T siternative is. ( therefore, ieprudent. Evaluation of Resource Economics Including Alternatives III. Resource economic analyses have been performed to examine the economic impacts of a variety of alternative actions, including extension of the construction schedule of WNP-3 and different In each case, these analyses have examined financing arrangements. not only the capital and operating costs of WNP-3 and the potential changes that might occur, but also the operation of the entire regional power system including surplus power marketing, resource in any given year. and displacement, the probability of curtailmentThe System Analysis Model (S AM) other such operatioral issues. developed and used by the Regional Council to develop its Plan was used f or these analyses. SAM simulates the operation of the To provide a regional power system over a 20 year planning horizon. basis f or comparing alternatives, system costs were consistent discounted back to present value. In addition, sensitivity analyses were performed on such variables as forecasted load growth and bond I interest rate. The analyses showed, on a net present value basis, that a construction extension of 3 years for WNP-3 would not significantly increase total present value of system costs. Delays beyond 5 years If resource economics were the only would increase costs. L

F censidarction, a esnstructisn cxtcasien would not be cyprrprints becauco th2 prosant.valu2 cf cystco cests for the currant schedula, assuming prudent financing at relatively low interest rates, is approximatsly equivalent to system costs under a 3 year construction [- extension case. The conclusions of the resource economic analysis were tested against various load growth cases utilising a BPA high-and low-load These analyses showed that under a 3 year construction f orecast. extension case, there is sufficient flexibility available to However, lengthy delays - cocperfsate for high load growth. substantially increase the potential costs that would be incurred if The flexibility to accommodate high load high load growth occurred. growth without extreme adverse consequences is provided in part by the investment now being made in developing conservation progras delivery capability. The development of this capability is a premise both of BPA's conservation programs and the Regional Council's Final Plan. The resource economic analyses have also been reviewed in light of load forecast information currently being developed at BPA but not BPA's most recent studies indicate some near-ters yet finalized. changes in loads of DSIs,.public agencies, Federal agencies, and Preliminary long-term load forecast revision efforts system losses. On balance, these future forecast updates are are also underway. expected to yield a forecast somewhat lower than those used in this l This would reinf orce the conclusion that the analysis. load / resource situation permits a construction extension of WEP-3. The economic analysis assumed surplus marketing at prices somewhat ( above those attained to date but which are considered reasonable in A principal impact of a view of current power sales negotiations. 3 year delay in WNP-3 would be to reduce near-term surpluses and to move the project's availability into a time period more nearly =atching regional needs. Surplus revenues would be f oregone during the deJay but comparable output would be available later. 4 For alternatives in which WNP-3 is delayed, socio-economic impacts However, employment and income levels occur in the near term. t increase in later years as construction picks up. All resource economic analyses are predicated upon completion and Maintaining WNP-2 on operation of WNP-2 on its current schedule. schedule, with timely completion and operation, is of overriding importance to BPA and the Supply System. IV. BPA Financial Condition Our mid year review of BPA's financial circumstances has revealed a BPA's net further reduction in this Agency's financial flexibility. revenue shortfall in FY-83, which is currently estimated to preclude paying to the U.S. Treasury any of the previously plannedamor deferral ($152 million), will result in an additional def erral of t ( interest due (122.4 million). Legislative directives require BPA to i i 5 I j: j.-

a s cat ratos to raccup such daforrals altag with all ether SPA c:sts. Du2 to cer.tinu:d rovanus shortic113, BPA's cecumulcted est r3 vert:cs have declined from $379 million at the end of FY 1976 to a projected lov of $15 million at the end of FY 1983. ( Furthermore, as a result of the increasing capital investment in the Federal System and the Supply Systes projects, BPA financial flexibility has become more restricted. Whereas SPA's fixed costs consumed 76 percent of revenues in FY 1981, these costs are expected to consume 87 percent of revenues in TY 1983. Given these circumstances, BPA must husband its fiscal resources and cri'tically review any increase in financial exposure. BPA's only choice is to reduce financial risk and not further encumber the revenue generating capability of the Federal System in the current circumstances. O 1 O ( 6 .~.- .---... ?

f. .a CONCLUSIONS i These analyses 2ead to the finding that conventional financing cannot he achieved due to current impediments. Even if these fopediments were overcome, it would be difficult to achieve prudent financing at reasonable interest rates given other current ci rcums tances. Tinancing alternatives are currently either unavailable or not prudent. Therefore, BPA would approve an action by. the Executive Board to effect, as soon as possiblg, transition of VNP-3 to a preservation state for 3 years, in order to ensure there are sufficient monies available for efficient and proper prese rvati on. PPA and the Supp3y Syster have an obligation to protect the region's investment in the net-billed projects which are all needed to meet expected future regional loads. The tirely completion of WFP-3, its efficient and economic preservation, and its eventual restari are of overriding importance to BPA and the Supply System. BPA plans to finance VNP-2 to completion from revenues and is also financially prepared to protect the investment in VNP-3 and UNP-1 urtil construction can be rest' rted. This course should prove fiscally a sound and prudent while ' assuring that these important resources can be constructed on a time table appropriate for anticipated future regional power needs. ( ( I f 7 ~

f:' NUCLEAR REGULATORY COMMISSION 'g e E -) - usamnow.o.c.aosso g%...,e - ( SEP 2 01983 Ms. Nina Bell Staff Intervenor COALITION FOR SAFE POWER 410 Governor Building 408 5.W. Second Avenue IN RESPONSE REFER Portland, OR 97204 TO F01A-83-515

Dear Ms. Bell:

This is a partial response to your letter dated August 26, 1983 in which you requested, pursuant to the Freedom of Information Act, seven categories of documents regarding nuclear power plants on which construction has ceased but which continue to hold valid construction pennits. We have interpreted Items 1, 2, and 3, as listed on your request, to mean a generic study and analysis of the issues, not plant specific. In accordance with your telephone conversation with Mrs. Pappas, of my staff, on September 13, 1983, you agreed to an extension of time on your ( request. We have identified the 31 documents listed on Append h f., which are responsive to your request. These documents are already available for public inspection and copying at the NRC Public Document Room (PDR), 1717 H Street, NW, Washington, DC 20555. Also, the 6 documents listed on Appendix B are being placed in the PDR. You may obtain access to these records by presenting a copy of this letter to the PDR or requesting folder F01A-83-515. The charge for reproducing records located in the PDR is five cents (50.05) per page, as specified in 10 CFR 9.14(a). A copy of these documents can be purchased by writing directly to the PDR, or by calling (202)634-3273. Upon your agreement to pay the reproduction charges, the PDR will arrange for the records to be reproduced by Literature l Research Company, a private reproduction contractor servicing the PDR. You will be billed by Literature Research Company for the reproduction charges, plus tax and postage. ( l-

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