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{{#Wiki_filter:, OAK RIDGE NATIONAL LABORATORY L' OPERATED BY UNION CARBIDE CORPORATION NUCLEAR DIVISION O POST OFFICE BOX Y OAK RIDGE. TENNES5EE 37830 June 13, 1975 Mr. Regis R. Boyle Cost Benefit Analysis Branch Directorate of Licensing Nuclear Regulatory Commission Washington, D. C. 20555
Dear Mr. Boyle:
The enclosed memo describes the revised CONCEPT calculations for the Washingten Public Power Supply System's Nuclear Projects No. I and 4 requested by J. C. Petersen and presents results from those calculations. Capital cost estimates for plants provided with heat rejection systems utilizing mechanical draft evaporative cooling towers are presented. The estimates produced by the CONCEPT code are not intended as substitutes for detailed engineering cost esticates, but were prepared as a rough check on the applicant's estimate and to provide consistent estimates for the nuclear plant and fossil-fired alternatives. If I can be of further assistance, please contact me. Sincerely yours, M lh8. L. L. Bennett, Director Studies and Evaluations Program LLb:sf Enclosure cc: H. I. Bowers M. L. Myers J. C. Petersen, DL T. H. Row 8409{0544840824 PDR 603 PDR OHEN8
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COST ESTIMATES FOR ALTERNATIVE BASE-LOAD
. GENERATION SYSTEMS A recently developed computer program was used to rough check the applicant's capital cost estimate for the proposed nuclear power station and to estimate the costs for fossil-fired alternative generation systems.
This computer program, called CONCEPT I-8 was developed as'part of.the program analysis activities of the~ AEC Division of Reactor Research and Development, and the work was performed in:the Studies and Evaluations Program at the Oak Ridge National Laboratory. The code was designed primarily for use in examining average _ trends in costs, identifying important elements in the cost structure, determining sensitivity to technical and economic factors,
- and providing reasonable long-range projections of costs. Although cost estimates produced by the CONCEPT code are not intended as' substitutes for detailed engineering cost estimates for specific projects, the code has been organized to facilitate modifications to the cost models so that costs may-be tailored to a particular project. Use of the computer provides a rapid means of calculating future capital costs of a project with various assumed sets of economic and technical ground rules.
DESCRIPTION OF THE CONCEPT CODE The procedures used in the CONCEPT code are-based on the premise that any
. central station power plant involves approximately the same major cost compo-nents regardless of location or date of initial operation. Therefore, if the trends of these major cost components can be established as a function of plant type and size, location, and interest and escalation rates, then a cost estimate for a reference case can be adjusted to fit the case of interest.
The application of this approach requires a detailed " cost model" for each plant type at a reference condition and the determination of the cost trend relationships. The generation of these data has comprised a large effort in the development of the CONCEPT code. Detailed investment cost studies by an architect-engineering firm have provided basic cost model data for light water reactor nuclear plants,"-5 and fossil-fired plants.'~7 These cost data have been revised to reflect plant design changes since the 1971 reference date of the initial estimates. The cost model is based on a detailed cost estimate for a reference plant at a designated location and a specified date. This estimate includes a detailed breakdown of each cost account into costs for factory equipment, site materials, and site labor. A typical cost model consists of over a hundred individual !. cost accounts, each of which can be altered by input at the user's option. 1 The AEC system of cost accountse is used in CONCEPT. f f i L l l l L
2 To generate a cost estimate under specific conditions, the user specifies the following input: plant type and location, net capacity, beginning date for design and construction, date of commercial operation, length of construction workweek, and rate of interest during construction. If the specified plant size is different from the reference plant size, the direct cost for each two-digit account is adjusted by using scaling functions which define the cost as a function of plant size. This initial step gives an estimate of the ! direct costs for a plant of the specified type and size at the base date and I location. The code has access to cost index data files for 20 key cities in the United States. These files contain data on cost of materials and wage rates for 16 construction crafts as reported by trade publications over the past fif teen years. These data are used to determine historical trends of site labor and material costs, providing a basis for projecting future costs of site labor and materials. These cost data may be overridden by user input if data for the particular project are available. This technique of separating the plant cost into individual components, applying appropriate scaling functions and location-dependent cost adjustments, and escalating to different dates is the heart of the computerized approach used in CONCEPT. The procedure is illustrated schematically in Fig. 1. ESTIMATED CAPITAL COSTS The assumptions used in the CONCEPT calculations for this project are listed in Table 1. Table 2 summarizes the total plant capital investment estimates for the proposed nuclear station. As stated previously, the above cost estimates produced by the CONCEPT code are not intended as substitutes for detailed engineering cost estimates, but were prepared as a check on the applicant's estimate and to provide consistent estimates for the nuclear plant and fossil-fired alternatives. l l l l l
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c 1 d 4 Table 1. . Assumptions Used in CONCEPT Calculations (Revised June 1975) Plant name Washington Public Power Supply System Plant type Two-unit PWR Alternate plant types none Unit size 1240 MWe-net, each unit Plant location Actual Satsop, Washington CONCEPT calculations Seattle Interest during construction 7%/ year, simple Escalation during construction Site labor 8%/ year Site materials 8%/ year Purchased equipment 8%/ year Site labor requirements 8.5 manhours /kWe Length of workweek 40 hours Start of ' design and construction date NSS ordered Unit 4 July 1974 Fossil alternatives none
- Commercial operation dates Unit 1 September 1980 Unit 4 March 1982 i -
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.- 5 Table 2. Plant Capital Investment Summary for a 2480-MWe Pressurized Water Reactor Nuclear Power Plant Using Mechanical Draft Evaporative Cooling Towers (Revised June 1975)
(Washington Public Power Supply System, Nuclear Projects No. I and No. 4) Unit 1 Unit 4 Total Net capability, NW(e) 1240 1240 2480 Direct Costs (Millions of Dollars) Land and land rights 0 0 0 Physical plant Structures and site facilities 70 63 133 Reactor plant equipment 102 111 213 Turbine plant equipment 104 114 218 Electric plant equipment 40 39 79 Miscellaneous plant equipment 7 5 12 Subtotal (physical plant) 323 332 655 Spare parts allowance 2 2 4 Contingency allowance 23 23 46 Subtotal (total physical plant) 348 357 705 Indirect Costs (Millions of Dollars) Construction facilities, equipment 21 17 38 and services Engineering and construction manage- 53 46 99 ment services Other costs 17 14 31 Interest during construction 1034 los 4 101 ,, a g204 q .
. Total Costs Plant capital cost at start of project Millions of dollars 542 535 1077 Dollars per kilowatt 437 431 434 Escalation during construction 203 205 408 Plant capital cost at commercial
- operation-Millions of dollars 745 MS* 740 Fe;
- 1485 /T 7 Dollars per kilowatt 601 597 599 i
4 *, l. .' Q)) i," . 'J l/Y';herY A$ & O f f 0 Cf: *:/ D 1 A*L!!
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i; ... . 6 REFERENCES
- 1. CONCEPT: A Computer Code for Conceptual Cost Estimates of Stear:t-Electric Pouer Plants - Status Report, USAEC Report WASH-1180 (April 1971).
- 2. R. C. DeLozier, L. D. Reynolds, and H. I. Bowers, CONCEPI Computerized Conceptual Cost Estimates for Steam-Electric.
Pouer Plants - Phase I User's Manual, USAEC Report ORNL 'IM-3276, Oak Ridge National Labcratory, October 1971.
- 3. H. I. Bowers, R. C. DeLozier, L. D. Reynolds, and B. E. Srite, CONCEPT II: A Computer Code for Conceptual Cost Estimates of Steam-Electric Pouer Plants - Phase II User's Manual, USAEC Report ORNL-4809, Oak Ridge National Laboratory, April 1973.
- 4. 1000-MWE Central Station Power Plant Investment Cost Study, Volume I, Pressurized Water Reactor Plant, USAEC Report WASH-1230 (Vol. I), United Engineers and Constructors, Inc. ,
Philadelphia, Pa., June 1972.
- 5. 1000-MWE Central Station Pouer Plant Investment Cost Study, Volume II, Boiling Mzter Reactor Plant, USAEC Report WASH-1230 (Vol. II), United Engineers and Constructors, Inc. , Philadelphia, Pa., June 1972.
- 6. 1000-MWE Central Station Pouer Plant Investment Cost Study, Volume III, Coal-Fired Fossil Plant, USAEC Report WASH-1230 (Vol. III), United Engineers and Constructors, Inc., Philadelphia, Pa., June 1972.
- 7. 1000-MWE Central Station Pouer Plant Investment Cost Study, Volume IV, Oil-Fired Fossil Plant, USAEC Report WASH-1230 (Vol. IV), United Engineers and Constructors, Inc., Philadelphia, Pa., June 1972.
- 8. Guide for Economic Evaluation of Nuclear Reactor Plant Designs, USAEC Report NUS-531, NUS Corporation, January 1969.
l
Washington' Public Power Supply System 3000 G';orge Washington Way P.O. Box 968 Richland. Washington 99352 0908 (509)372 5000 1 August 15, 1983 G01-83-0395 birector of fluclear Peactor Regulation Attentica: Mr. A. Schwencer, Chief Licensing Branch 110. 2 Division of Licensing U.S. Iluclear Regulatory Commission Washington, DC 20555
Dear Mr. Schwencer:
As we discussed via telephone on' August 4,1983, the Supply System was declared in default on its obligations of Projects 4 and 5 on July 22, 1983. A copy of an internal Supply System nemorandum on this topic is atta:hed. . Also attached is a copy of a telegram from the Bonneville Power Administration, cor.fiming their intent and authority to fund completier, of WNP-2 frem Bonneville revenues. We will keep you advised should the situation change. Very truly yours, ( GN , G. C. Sorensen,11anager ( Acting) 11uclear Safety and Regulatory ' Programs cc: R. Auluck, flRC
- 11. Thadani, llRC A. Vietti,11RC tis Reynolds, D&L WS Chin, BPA A. Toth, tiRC W iP-2 f d6/V/)&,
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r ~. ,. . x,; . Washington Public Power Supply System P.O. Box 968 3000GeorgeWashingtonWay Richland, Washington 99352 (509)372 5000 Docket No. 50-397 ) December 15, 1981 G02-81-525 SS-L-02-CDT-81-106 Mr. A. Schwencer, Chief Licensing Branch No. 2 Division of Licensing U.S. Nuclear, Regulatory Commission Washington, D.C. 20555
Dear Mr. Schwencer:
Subject:
NUCLEAR PROJECT N0. 2 QUESTIONS CONCERNJiiG FINANCIAL INFORMATION
Reference:
Letter, A. Schwencer to R. L. Ferguson, "WNP-2 FSAR Request for Additional Information," dated November 12, 1981 Enclosed are sixty copies of the responses to the NRC questions trans-mitted to the Supply System by the reference letter. Thase questions will be incorporated into an amendment to the WNP-2 FSAh within two (2)
, months.
Seven copies of each of the sollowing reports are being submitted as enclosures to this letter:
- 1. Washington Public Power Supply System Quarterly Report, dated September 27, 1981
- 2. Washington Public Power Supply System 1981 Annual Report
- 3. Washington Public Power Supply System $750,000,000 Official Statement Very truly yours, G. D. Bouchey, De IDirector Safety and Security CDT/rch
. Enclosure cc:kR Auluck - NRC .
WS Chin - BPA
>R Feil - NRC Site i
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- 0. 600.001 Ja . ' Indicate _the estimated annual costs by year to operate the subject facility'for the first seven full years of commercial operation. The types of costs included in the estimates should be indicated and should include (but not necessarily be limited to) operation and main-tenance expenses with fuel costs shown separately,-de-preciation, taxes, and reasonable return on investment.
(Enclosed is a form which should be used for each year of the.seven year. period.) Indicate the projected plant capacity of each unit for each year. In addition, pro-vide similar data essuming plant capacity factors of 50% and 60%.
- b. Indi: ate the average unit price per kWh experienced on system-wide sales of electric-power to all customers for the-most recent 12-month period.
Response
- a. The estimated annual projected costs for the operation of WNP-2 for the seven year period February 1984 through June 1991 are presented as Table 600.001-1, based on Supply System generation estimates. Tables 600.001-2 and 600.001-3 present WNP-2 operating costs for the same period based on 50% and 60% plant factors, respectively.
- b. The Supply System operates each Project as an independent utility and, accordingly, does not maintain financial records on a system-wide basis. Results for the Hantord Generating Project and the Packwood Lake Hydroelectric Project for the twelve-month pericd ending October 30, 1981, are as follows:
HGP Packwood Revenues $15,703,000 5794,000 Generation (mWh) 1,452,287 90,248 a Mills per kWh 10.8 8.8
- )
..- (l TABLE 600.001-1 '
L5ilHAil0 ANPPAL COST OF OPERAllNG F4UCLEAR GENERATING llNIT WNp-2. FOR FISCAL YEAR ENDING JUNL 30 l (Dollars in Thousands) III 1984 1985 1986 1987 1988 1989 1990 1991
. Operation and Maintenance Expenses ,
Nuclear power Generation: Nuclear fuel Expense (2) $ 39.364 $ 99.066 $ 88.192 $ 91.847 $ 99.066 $ 109.359 $ 120.671 $ 128.638 Other Operating Expenses (3) 9.773 30.818 39.197 42.408 45.910 49.924 54.299 59.065' Maintenance Expenses 4,967 14.252 142581 _ 15,1CJ 16,269 17a _009 11 632 l_8 L80 , Total 54.104 144,.136 142.570 _1.49.444 161,245 176,292 1923 602 205.9A Transmission Expenses (4) - - - -- - - - - Administrative and General Expenses Property and Liability Insurance 1.661 4.641 4.755 4.867 ' 5.034 5.125 5.227 5.332 Other A&G Expenses 7.727 15,934 132 893 14,620 16 141 19 394 21 480 1 Total 9.388 20.$75 18,648 _19,J_87 7 i,.175 '17; 22,ll {486 2h71 26,,id f- :I l Total O&M Ex; enses 63.492 164,711 161.2_I_8, 168_,931 182.420, 19R.903 ,2,17,723 232,795'
-{
~J Depreciation Expense 30,415,_ 73.176 13,6,08 14.148 74.743 75.420 16,164 16,972_ 1 Taxes Other than Income taxes:
, Property Taxes (4) - - - - - - - '- 1 Other (5) 1.959 5 105 5 378 5 615 5.870 .6 131 6 442 .6 131 - Total I 959 7 ,,l_05 D18 5 NIT 5.8J0 1,,IF~ 3.,'442 ~ 6,HT~ - Income Tapes-(6) - - - - - - - Total Operatin9 Expenses M,.866 $242.992 $240.204 $248.694 $263.038 $280254 J2_9J,829 J31,6 1 51 6 Generation (6Wh X 10 ) 2.376 5.980 6.461 6.745 6.745 6.745 6.745 f.115 (1) 5 months only (2) plant factor: 600lst 12 months; 651-2nd 12 months; 70%-thereaf ter (3) Includes prowlsion for detoneelssioning - (4). Plant output is transmitted by the Bonneville power Administration (5) Ihe Supply System is assessed a privilege tax in lieu of property taxes (6) The Supply System is exempt from income Tax liability
TABLE 600.001-2 [511rMTED ANNUAL E05T or OPERAllNG
~
PMICLEAR GLNERAllfiG IINIT tlNP.2 IOR I!5EAL YEAR ENDING JUNE 30 (Dollars in Thousands) III 1986 1987 1988 1989 1990 1991 1981 - 1985 - ~~ ~~ ~~ ~ - Operation and Maintenance Expenses Nuclear Power Generation: Nuclear Fuel Expense (2) $ 32.803 1 79.822 1 70.604 5 66.011 $ 65.605 $ 70.433 $ 74.703 5 19.213 Other Operating Expenses (3) 9.773 30.018 39.197 42.408 45.910 49.924 54.299 59.065-Haintenance Expenses 4,967 14,252 14 581 15 189 16 269 17 17 18 121,.784 137,009 366 l'46[632~~~~lW,280.BB-634 Total 47,MI 12.4_,h97 - V 4,,3_B2_ '123l6b8 Transmission Expenses (4) - Administrative and General I.ipenses Property and Liability Insurance 1.661 4.641 4.755 4.867 5.034 5.125 5.227 5.332 Other A&G Expenses 7 727 15.934 093 14.620 1 17 486 1 21 Total -TI3B8 76~,F75 13,648 13, 19 '48T 2[6141I15' '-~ ~2[hi 2[939462 l' T'~~76,480t R J][ Total O&M Enpenses 56,931 14524_67 143,030 143,,095 148,959_ J 9 3977 17L255 1832 3]_0,, Depreciation Expense 30,415 73.176 733 608 14.148 74.748 15.420 76,164 16,99_2_ Taxes Other than income Taxes: - - - Property Taxes (5) - - - - Other (5) I,861 4.816 _5 105 5,228 5,368 . 5,547 ,_ 5,75 L ,,5,990_ Total 1,861 ._4.816 5.105 5 . 72.8 5.368 _ 51 54],_ _ 5,752,,_ _ _ 1 9_90_ Income Taxes (6) TotalOperatingExpenses,L89207t ,,},223d59,_}_2,2_j,743_},222,471_},229,07L}_240,,944_},,253_,171 2 $ _2,663,3_52_ . 6 4.818 4.010 4.818 4.818 4.813 Generation (kWh X 10 ) I 980 4.818 4.818 (1) 5 months only 1 (2) Plant factor: 50% I;3) Includes prowlsion for decomissioning (4) Plant output is transmitted by the Bonneville Power Administration L5) Ihe Supply System is assessed a privilege tax in lieu of property taxes (6) The Supply System is exempt from income Tax liability ,
TABLE 600.001-3 . , E5flMAIED ANNUAL COST Or OPERAllNG NUCLEAR GENERAllNG lit!!T WNP-2 IOR T15 CAL YEAR INDING JilNE 30 (Dollars in thousands) III 1904
~ 1985~ 1986 1987 1988
~
1989
~-
1990 1991 Operation and Maintenanct Expenses Nuclear Power Generation: Nuclear Fuel Expense (2) $ 39.364 1 95.786 $ 80.004 $ 78.842 $ 82.945 $ 89.460 $ 97.116 $ 104.676 Other Operating Espenses (3) 9.773 30.818 39.197 42.408 45.910 49.924 54.299 59.065 Maintenance Expenses 14,252 IM81 153 189 16 269 17,009- 17,632 la 280 Total
~
$[4967
,]D4 140 2 856 1332 782 136_,U9 145b2f 156d33 169,647 18{,,0X Transmission Expenses (4) -
Administrative and General Impenses Property and liability Insurance 1.661 4.641 4.755 4.867 5.n34 5.125 5.227 5.332 Other A&G Expenses 7 727 15,934 893 14 620 16 141 17,486 19 394 480 Total 9',.35-8 E 515 13,
- 19. 9 8 lbd 2f,.175 22.MI 24_,'M1 21,8]{
26 Total O&M Espenses 63.492 161,431 152.430 155.926 166.299 179,004 193.668 208,S)1 Depreciation Expense 30.415 13.176 73.608 74.148 74.748 75.420 76d64 _16;~992~
~
Tames Other than income Tames: Property Taxes (5) - - - - - . - - Other(5) le599 5.056 246 5 420 628 5 6.089 6 372 Total' I.959 5,056 5,146~ 5 5.420 5,328 5 5,833831 6.68 F 6,,) F Income Taues (6) - - Total Operatin9 Expenses .$ 95.066 $_ .239.663 $ 231t 284 $ 235.494 $ 245.675 $ 260,257 $ 275 921 $_2,92._191 6 Generation (lWh X 10 ) 2.376 5.782 5.782 5.182 5.782 5.782 5.782 5.782 (1) 5 months only (2) Plant factor: 60% (3) includes provision for deconenissioning (4) Plant output is transmitted by the Bonneville Power A&ninistration (5) The Supply System is assessed a privliege tax in lieu of property taxes (6 )- The Supply System is enempt from income Tax liability
- f. .
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WNP-2 ygg [Cl(g,) O. 600.002 Indicate the estimated costs of permanently shutting down the facilityr a list of what is included in such costsi the assumptions made in estimating the costs, the type of shutdown contemplatede and the source of funds to cover these costs.
Response
It is planned to decommission the WNP-2 facility at the end of its operating life by placing the facility in protective sto-ace for fifty years and then dismantle it with shipment of waste
-materials to appropriate repositories. The general activities necessary for placing it in protective storage are:
- 1. Detailed planning and preparation for placing in protective storager
- 2. Final shutdown of the nuclear reaction,
- 3. Plant cooldowne
- 4. Fuel discharge into the spent fuel pooli
- 5. Shipment of the fuel to a permanent disposal siter
- 6. General decontamination of the facilityr
- 7. Shipment of radioactive wastes to a disposal siter S. Deactivation of plant systems not needed during the protective storage period,
- 9. Confinement of residual radioactivity, as appropriater
- 10. Installation of intrusion alarms and barriers, and
- 11. Establishment of continuous surveillance.
Nonradioactive equipment and facilities will be salvagede scrapped or converted to beneficial usess as appropriate. The total cost for decommissioning the facility is estimated to be $57,000r000 in 1978 dollarsi including 526r800r000 for placing it in protective storage. A breakdown of the costs for shutting the plant down and placing it in pr ot ec t ive storage is attached as Table 600.002-1.
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WNP-2 I g- .The primary assumptions used for estimating these costs.are:
. 1. 1978 dollars, Y
l 2. '1978 technology and nuclear regulations,
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- 3. All radioactive wastes' shipped to offsite reposit-ories,
- 4. Thirty' full power years of plant operation,
- 5. ALARA occupational exposure philosophy,
- 6. No unforeseen difficulties experienced while placing the plant in protective storager and
- 7. Radiation dose rates based on measured data from operating plants.
Decommissioning of the Project will be financed by use of a decommissioning sinking fund. Payments into the fund during operation of the plant, together with investment income thereone will result in the accumulation of sufficient monies
-to finance the subsequent decommissioning. Periodically, at ~
intervals no longer than five years during commercial operations, the decommissioning technology and regulatory climate will be reviewed to determine if the payments into the sinking fund 9, should be changed, and the payments will be adjusted accordingly. I g iii (idi muie iii nu
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'TABL 600.002-1 9
ESTIMATED COSTS-FOR PREPARATIONS
'FOR PASSIVE: STORAGE Estimated Costs Cost icategory -($ mill ion s)
-Disposal of Radioactive Materials 5 1.2 (Radioactive-Wastes) 11.3 Staff Labor Energy-2.1 Special~-Tools and ' Equipment. 0.4
' Miscellaneous Supplies 1.4 Specialty Contractors 0.2 ,
0.5 Nuclear Insurance:
- S pen t. Fuel Sh'ipment ~ 3.8*
Fuel' -Channel Disposal 0.6 Contingency (25%) 5.3 TOTAL $26.8 e b
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g- - ~ WHP-2 Q.. 600.003
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Provide'an estimate-cf the~ annual cost to maintain the shut - down; facility in a safe condition. Indicate.what is included in the estimater assumptions made in estimating the costsi and the source of funds to cover these costs.
Response
.The facility will be placed in protective storage as described above in the response.to Question 600.002. The estimated annual cost for maintaining the protective storage is $75,000 in 1978 dollars. A breakdown of these costs is attached as Table 600.003-1.
The primary assumptions used-for estimating these costs are:
- 1. 1978 costs,
- 2. 1978 technology and nuclear regulations,
- 3. Multiple reactor siter and
- 4. Specialty contractors will be hired for site security, equipment maintenance, and radiation and environmental surveillance.
The source of funds for the protective storage will be the decommissioning sinking fund referred to in the response to Question 600.002.
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-WNP-2 l
TABLE ~600.003-1 E S T If1 AT E D ANNUAL' COSTS FOR
-WNP-2' PROTECTIVE STORAGE Estimated Annual Cost Category Cost ($)
S 6,500 Surveillance and' Maintenance Representative 5,075 Secretary 2,710 Repairman 8,800 Security 7,500 Third Party Inspection Environmental Radiological Monitoring. 14,230 Program Personnel 1,000 Quality Assurance Specialist , 1,000 Equipment and Supplies 5,000 Annual Allowance for Repairs 5,000 Utilities and Services 650 License Fee 2,500 NEL-PIA Insurance 14,991 Contingency (25%)
$74,956 TOTAL i a I
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- WNP-2 0.- 600.004 Provide copies of WPFSS's' quarterly' financial report for the mott recent period. Also, p rovide _-a copy of the most recent' " Annual Financial Report".-
Response
A: c opy of ~ the Supply System's most' recent quarterly-financial report' covering the period July'1, 1981 through October 1, 1981, and a-copy of the Supply System's 1981 Annual Report ~
-have been submitted to the NRC.-(See Reference 1.)
I' . W f1P -2
REFERENCE:
Letter G02-31-525, G. D. Bouchey to A. Schwencer, 1.
" Q u e s t i o n ', Concerning financial Information", dated December 15, 1981.
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- o. 600.005
~Provideccopies of the official statement for W P P S S ' s . c.o s t '
recent security-issueLand copies-of the preliminary state-ment for any cending issue (s).
Response
A! copy of the September 1r 1981 official st at ement- for nuclear projects 1, 2, and 3~has been submitted to the NRC.- ~(See Reference.1 to Question 600.004.) The next bond issuance is anticipated for early 1982. No pretininary bond statement has as yet been prepared for that issue. 6 mm __ _ _ - _ ___-
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WNP-2
.Q. 600.006~
Describe the legal basis for1WPPSS's rate-setting authority and how it may-be used to ensure that sufficient funds will be available-'to operate the facility and to eventually shut it down and maintain it in a safe shutdown condition.
Response
The Supply' System is a joint operating agency and a municipal corporation of the State of Washington organized under
. Chapter 43.52 offthe Revised Code of Washington, as amended.
The Supply System is composed of 19 operating public utility
-districts of the St ate of Washington and the cities of Richlandr Seattle, Tacomar and Ellensburg, Washington. Pursuant to its statutory authorityr the Supply System is empowered.to acquirer construct, and operate plants and facilities for.the generation and transmission of electrical power and energy, but, as.a supply agencyr does not distribute power or sell.at retail.
Ratherr it is reimbursede pursuant to the provisions of the WNP-2 Net Billing Agreements, by the 94 Participants for.all WNP-2 costsi. whether or not the Project is completede operabler or operating. See response to Question 600.007. 1 l I
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. #5 WNP-2 Q. 600.007 Describe the contractual provisions between WPPSS and its member' municipal systems and ensure that sufficient funds-will be available to operate the facility:and to eventually shut it down and maintain it in a safe shutdown condition.
Describe the municipals' rate-setting authority and the rate covenants from the municipals to WPPSS that ensure satisfaction of these requirements. Response: _ WNP-2 will be used for the generation of electrical energy. It will be financed, constructed, operated, and owned by the Supply System. Net Billing Agreements.between the Supply
' System, the Bonneville-Power Administration ("BPA"), and 94.
statutory preference customers of BPA ("the Participants"), provide for the payment of project costs and the allocation of project capability. The 94 Pa rt icipant s in WNP-2 consist of 27 municipalities, 21 public utility districts, 1 irrigation district, and 45 cooperatives. Of the total capability of WNP-2, the municipalities have contracted to purchase 22.6%, _the districts have contracted to purchase 56.9%, and the co-
- operatives have contracted to purchase 20.5%. Under the Net Billing Agreements, each Participant will assign its share of the project capability to BPA. 8PA's purchase of the capability of WNP-2 was authorized and approved by Congress in the Public Works Appropriations Acts of 1970 and 1971. BPA is obligated under the Net Billing Agreements to pay the Participants of WNP-2, ond such Participants are obligated to pay the Supply System, the total annual costs of WNP-2, including debt service on the Net Billed Bonds issued on the Project, less amounts paio from other sources, whether or not WNP-2 is completed, operable, or operating and not withstanding the suspension, reductions, or curtail-ment of WNP-2's output. Payments of project costs by the Participants to the Supply System will be credited against the billing made by BPA to the Participants for power and certain services. Each Participant has covenanted that it will establish, maintain, and collect rates or charges for power and energy and other services furnished through its electric utility properties which shall be adequate to provide revenues sufficient to make required payments to the Supply System.
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e .. WNP-2 For a more in-depth discussion of these contracts and their t e r rr.s r see "Bonneville Contracts" under the c apt ion "Donneville Power A d rr i n i s t r a t i o n " in the September 1, 1981, official statement for Nuclear Projects 1, 2, and 3. (See Reference 1 to Cuestion 600.004.)
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- o. 600.008 Indicate'the. amount of WPPSS's most recent- ' rate relief actien Provide and provide. copies of?the order authorizing the rates.
details'of tFe amount and timing of any' prospective rate increases.
Response
.The Supply System does.not engage in the distribution of power
'to retail customers. It is authorized, among other things, to acquires -constructs .and operate plants, works, and facilities for the generation and transmission of power to utilities. The Supply System does-not have " rates", but is reimbursed for the costs of each project by the Participants tgerein. In any events as a municipal corporation of the
-State of Washington, the Supply System is not'under the juris-diction.of any regulatory agency having control over " rates and services" incidental to the proposed activity.
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- a. 600.009 Indicate the current limit on WPPSS's bonded indebtedness and any prospective or requested increase in the limit. Indicate the current outstanding indebtedness that is applied to this limit.
Response
The September 1, 1981 bond issuance for WNP-2 was for 5210,000,000. The Supply System has now issued $1,695,000,000 of revenue bonds for WNP-2. It is estimated that the remaining financial requirements, based on the 1982 construction budget and the currently scheduled February 1984 commercial operation date, are $811,000,000. The WNP-2 1981 bonds are part of an issue of bonds authorized to be issued pursuant to the revised code of Washington, Chapter 43.52, as amended, and Resolution No. 640, adopted by the Board of Directors of the Supply System on June 26, 1973,- as amended (the " Project No. 2 Resolution"), to pay the cost of the acquisition and construction of WNP-2. The WNP-2 1981 bonds were issued pursuant to a resolution supplemental to the Project No. 2 Resolution, Resolution No. 1184 (the " Project No. 2 Supplemental Resolution") adopted by such Board on September 4, 1981. [ On November 3, 1981, the majority of voters of the State of Washington approved Initiative Measure No. 394. If enacted into law, the initiative will require the Supply System, after July 1, 1982, to obtain the approval of the voters of its 23 ' member governmental entities in order to issue bonds to finance the cost of construction of each of its projects. Tn the event voter approval for the issuance of bonds with respect to any project is not obtained and alternative sources or methods to finance completion of construction of such project is not avail-able, the Supply System may be obligated to terminate the project. A termination of any of the Supply System's projects could have adverse effects on the projects of the Supply Syst em not terminated. However, such termination would not affect the obligation of Bonneville or the Participants under the WNP-2 Net Billing Agreements.
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