ML20101R059
| ML20101R059 | |
| Person / Time | |
|---|---|
| Site: | 05000000, San Onofre |
| Issue date: | 10/28/1983 |
| From: | Petersen J NRC OFFICE OF STATE PROGRAMS (OSP) |
| To: | Saltzman J NRC OFFICE OF STATE PROGRAMS (OSP) |
| Shared Package | |
| ML20101R032 | List: |
| References | |
| FOIA-84-433 NUDOCS 8501180397 | |
| Download: ML20101R059 (2) | |
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OCT 2 8 1983 1
h MEMORANDUM FOR: hrome Saltzman 4
i-Assistant Director for State and Licensee Relations Office of State Programs THRU:
Darrel Nash, Section Leader -
Licensee Relations Section, SLR Office of State Programs FROM:
Jim C. Petersen Licensee Relations Section SLR Office of State Programs
SUBJECT:
INCENTIVE REGULATION OF SONGS 2 AND OF GENERATION FACILITIES BY STATE PUCS NATIONALLY In accordance with your request we'have reviewed both (1) the recent California PUC decision that specifies a target capacity factor and related financial rewards / penalties for SONGS 2; and (2) the recent NARUC study on construc. tion and operating performance incentives in the electric utility l
industry nationally. Following are brief sumaries of each document and suggestions for possible additional. staff action.
In its September 7, 1983 decision, the California PUC softened the reward /
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' penalty provisions that its staff had suggested in the proceeding. The PUC i
provided that additional fuel costs resulting from SONGS 2 capacity factor l
'below 55% and fuel cost savings for capacity factor above 80% would be shared equally (50/50) between the company (stockholders) and ratepayers.
The PUC' staff had recomended that additional costs and savings above and I
below a 65% capacity factor should accrue entirely to the company. The l
California PUC thought that standard was too harsh, particularly in the l
relatively untested area of incentives. The Comission emphasized the l
l utility's obligation to adhere to all NRC rules and regulations and stated l
that the record of its proceedings included examples of other jurisdictions that have instituted nuclear performance standards without apparent detriment to nuclear safety. The PUC agreed with its staff that a performance standard such as a-target capacity factor would not compromise safe plant opera.tirn. The PUC also recognized that nuclear plant outages -
may be due solely to factors outside the utility's control and that it would be flexible toward considering the causes and effects of such events on a case-by-case basis.
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Jerome Saltznan OCT 2 8 1983 The working NARUC staff subcomittee on electricity published a rsport on September 20* that sumarized incentive regulation nf electric utilities by states of the U.S.
The report's sumary characterized incentive regulation and state studies that may lead to incentive regulation as representing "a very significant level of regulatory effort." " Currently, the greatest l
regulatory effort appears to be directed at the efficiency of operation and 4
utilization of generation facilities." My review of the report F discussions with the California PUC author indicate that 36 sutgither have some form of incentive regulation in effect or are studying various i
incentive regulation plans. AccordingtotheNARUCstudy.sevenStateshave_l incentives aimed specifically at nuclear plants and another twelvfLS.tates nave incentives aimed at generating plants generally. __
l Additional OSP cffort in this area could include more research and recortino on the specifics of incentive plans in operation or under study in the various states. we presently nave only very orter sumaries at state activity except for California where we have somewhat more information.
Significant additional work has been done by the National Regulatory Research Institute and published studies are available that could be obtained and sumarized. My contacts with NRR indicate that that office's activity has essentially been limited to coments by Denton and other ~
officials. There is no NRR staff study undarway. My contacts at 00E indicate that a group there is pretty much up-to-date on monitoring State PUC activity in this area. DOE has no intervention or enforcement authcrity in the area.
" Report to the NARUC Comittes on Electricity on incentive Regulation in the Electric Utility Industry," NARUC Subcomittee on Electricity, September 1983.
1 Jim C. Petersen Licensee Relations Section Office of State Programs Distribution:
Subject:
Incentive Regulation by State PUC's; SONGS-2 OSP Dir r/f SLR r/f GWKerr DNash JPetersen 4 - G i
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