ML20106J522

Affidavit of Am Madsen Re Erroneous E Gleason Assertion That Facility Not Needed Until 1997.Certificate of Svc Encl. Related Correspondence

ML20106J522
Person / Time
Site:	Shoreham File:Long Island Lighting Company icon.png
Issue date:	12/12/1984
From:	Madsen A LONG ISLAND LIGHTING CO.
To:
Shared Package
ML20106J518	List: ML20106J515 ML20106J522
References
OL-4, NUDOCS 8502150668
Download: ML20106J522 (11)

Text

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c LILCO, December _~,ED cxKEi

'12, 1984 l

34b' UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION (T!4.2 E $Nd k

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Before the Commission In the Matter of

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LONG ISLAND LIGHTING COMPANY

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Docket No. 50-322-OL-4

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(Low Power)

(Shoreham Nuclear Power Station,

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Unit 1)

)

AFFIDAVIT OF ADAM M.

HADSEN Adam M. Madsen, being duty sworn, deposes and says:

1.

I am Adam M.

Mad sen.

I have prepared this affidavit for use in Docket 550-322-OL-4 concerning the licensing of the Shoreham Nuclear Power Station (Unit 1)

(Shoreham) which is pending before the Nuclear Regulatory Commission.

2.

I am Vice President of Corporate Planning for Long Island Lighting Company.

As such, I am responsible for all activities of LILCO's Departments of Facilities Planning, Financial Planning and Analysis, Economic Research and Strategic Planning.

Additional details concerning my professional qualifications are included in Attachment A to this Affidavit entitled " Professional Qualifications of Adam M.

Madsen."

0502150668 841214 PDR COMMS NRCC CORRESPONDENCE PDR

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. 3.. L This Af fidavit lis submitted 'in response tol the Affidavit'of Eugene Gleason which~ erroneously asserts th t-Shorehamils not needed-unti1L1997.

Shoreham is required i

immediately to provide 'aureliable supply of electricity.to Long

Island,'not 13, years from'now.

In summary, many of. the bases for the Gleason Affidavit's conclu'sions are incorrect.

The I

forecast used - for his conclusions has f aiready been proven grossly 1 incorrect.in that-it significantly-underestimated con-sumption of electricity on Long Island:' 'for_-1983, by 470,000 i

megawatt-hours, and ' for : 1984 by 655,'000 megawatt-hours.

He i

-used electric rates that'are patently incorrect.' He -ignored i

i both the $20 million worth of oil which will be saved each month once Shoreham is Lin operation and the $1.9 million capac-ity penalty charges which will be saved in 1985.

He utilizes a statewide energy forecast that has already been proven incor-rect by 4,000 GHW for 1983 and 7,000.GHW'for 1984.

Finally, he-ignores the obvious reliability danger posed by Long Island's nearly complete reliance on foreign oil, a reliance which could turn into disaster at the next disruption of oil supply.

4.

According to LILCO's current load forecast, without

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Shoreham in service, generation deficiences will exist on Long Island as follows:

7

-1985'-- 202 MW 1986 -- 273 MW-1987 ---344:MW 1988 -- 368 MW

'1989 -- 397cMW-If 'LILCO continues to own an 18%' share of Nine Mile Point #2, about one-half of the 1988 and 1989' deficiency will be elimi-nated; but-for 1985, 1986 and 1987, there is.very little pros-pect, other than operating Shoreham, for relieving the deficiency.

.Some small partial relief may come from a small purchases from the P ASNY Fitzpatrick unit ~.

In addition, some i

nominal relief may come from refuse fired power plants.

Nei-ther of these will substantially reduce the deficiency, however.

5.

Loss-of-load. probability analyses indicate that 4

these generation deficiencies could cause 6 to 12 brownouts per -

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year on Long Island -

an unsatisfactory level.

Even though there may be excess generating capacity off Long Island, it will not effectively improve reliability of service to Long Island because of the limited transmission capacity to southeast New York as well as the limited interconnection transmission capacity to Long Island.

The earliest in-se rv ice date for a new transmission interconnection to Long Island is between 1991 and 1993.

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6.

The State Energy Office's (SEO) conclusion that Shoreham is not needed for 13 years is based on a forecast for i

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Long Island that has already been proven wrong.. :That forecast compares with the actual experience of the last two years as

- follows:

f Year SEO Forecast Experienced 1983 12,679 GWH 13,149 GWH 1984 -

- 12,909 GWH 13,574 GHW Thus,'the load experienced in 1984 is already more than 5% higher than the-SEO forecast.

7.

The SEO incorrectly forecast that sales of elec-tricity on Long Island would decline-for years.

By 1988,'the SEO forecast predicted sales on Long Island almost=10% lower I

than the 1984: sales actually experienced.

In fact, the-level i

of sales actually experienced 1984 was not forecast by the-SEO i

1 to occur until 1994.

8.

Another fallacy in the SEO forecast results from price elasticity.

The SEO used the wrong rate increases.

The SEO forecast that the actual price of electricity would' rise-as follows:

1985 --'18.6%

1986 -- 19.3%

1987.-- 15.9%

1988 -- 11.2%

i LILCO has publicly stated that it will not request any new rate e

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increases to'beLeffective in 1985.and the maximum rate

- increases in the future are expected to be 9% per year or if demand will increase: with lower rates, SEO's lower.

Thus,

. analysis predicts an understated demand.

The combination of SEO's rate increase assumptions and erroneous load levels in 1984 led to SEO's ' erroneous concusion concerning the need' for Shoreham.

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9. 'LILCO will incur significant additional costs for even a month's slip in Shoreham's service date.

Each month of

- delay results in.the burning of approximately $20 million worth a

f of-oil.

In addition,

..f Shoreham moves ahead promptly and achieves an October 1985 in-service date, it will save $1.9 million in generation capacity deficiency penalty costs from the New York Power Pool- (NYPP) in 1985.

A slip to November 1 or later. eliminates this saving.

3 10.

Another concern is reliability of fuel supply on Long Island, which is nearly 100% dependent on foreign oil.

Shoreham presents the only opportunity to make a significant dent in this reliability problem.

11.

Based purely on capacity needs, it may be true that for the State as a whole there apparently is enough generating capacity on line or under construction so the State may not need Shoreham's capacity under.the mid-1990s.

This remote ca-pacity, however, will'do nothing to solve LILCO's locel 4

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reliability problems.

It will do nothing for the oil dependency problem.on Long Island or the brownout problem on Long Island because of the inadequate interconnection capacity to Long Island.

12.

Additionally, the SEO forecast for New York State may be too low.

The SEO forecasted 118,000 GHW for New York State in 1983; the actual was 122,000 GWH, or 3.3% higher.

The SEO forecasted 119,000 GWH for 1984; the actual is 126,000 GWH, or 5.9% higher.

In fact, the SEO forecast for 1989 equals the load actually experienced in New York State in 1984.

Furthermore, the SEO analyses of installed generation by 1999 includes over 3500 MW of generating capacity that is neither under construction or licensed.

13.

The statements in the Affidavit of Eugene J.

Gleason regarding LILCO's study entitled Shoreham Operation /Versus Abandonment (An Economic Analysis) in June 1983 mischaracterize that study. 'The study was prepared under my direction and did not assert that LILCO did not_need Shoreham until 1994 and 1996.

These were the earliest dates LILCO could complete the licensing and construction of two 400 j

MW coal units to replace Shoreham if it were to be abandoned.

Figure 2 on page 8 of that report, as well as the tables on pages 9 and 10, show clearly that even with the lower load i

forecast at that time, LILCO was deficient in installed generating capacity starting in 1985.

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Adam M.

Madsen Subscribed and sworn to before me

- this / P" day of December,1984 l

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My Commission. Expires:

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t ELIZADEfH A. DRt00Y Notary Public, State of New York No. 30-4606123 Qualified in Nassau County Commission expires Mar. 30,19.. 2 wy

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ATTACHMENT A PROFESSIONAL QUALIFICATIONS OF ADAM M.

MADSEN I was elected Vice_ President of Corporate Planning in March 1984.

I am responsible for the activities of four Facilities Planning, Financial Planning and departments:

From 1978 Analysis, Economic Reseach and Strategic Planning.

responsible through March 1984 I was Manager of Engineering, Planning, Electrical for the activities of four departments:-

Engineering, System Engineering and Engineering Design.

Previously I was Manager of the Planning Department where I was respon,sible for planning all of LILCO's electric and gas In 1978 I was appointed LILCO's member of' the New facilities.

York Power Pool Planning Committee, having served as its I am a member of Northeast Coordinating Council's Chairman.

Joint Coordinating Committee and I am presently an alternate to the Northeast Coordinating Council's Executive Committee.

I have a Bachelor's degree in Electric Engineering from Manhattan College and a Master of Science degree in Nuclear.

I am also a Engineering from Long Island University.

registered Professional Engineer in the State of New York.

I have testified with respect to LILCO's activities concerning electric system planning, economics and operations

inla number'of proceedings before the Public Service

_ Commission, the.New York State Board on Electric Generation Siting and the Environment (Siting Board) and the-Nuclear' Regulatory. Commission (NRC).

In particular, I testified in the Jamesport Article VII transmission proceeding, in ~ the Jamesport construction permit licensing hearings before the,NRC's Atomic Safety.and Licensing Board.

-I also testified in PSC proceeding (1) analyzing.the economics of completing Shoreham versus vari-ous conservation alternatives; (2) determining the accounting and ratemaking treatment applicable to the extraordinary prop-erty loss resulting from'the Siting Board's rejecton of~the New Haven' project; (3) concerning measures to facilitiate coal conversations in New-York; (4) regarding LILCO's electric and -

gas rate increase requests; (5) the proceeding concerning ratemaking principles applicable to the Shoreham Nuclear. Power-,

Station; and (6) most recently the Jamesport prudency case.

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4 geuac C h-LILCO, Dsc&mb3r 14,.1984

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' CERTIFICATE OF SERVICE ccog gp

.U3NRC In the Matter of LONG ISLAND LIGHTING COMPANY (Shoreham Nuclear Power Station, Unit Y) DEC 17 41:20 Docket No. 50-322-OL-4 (Low Power)

CFFICE or Sy I hereby certify that copies of AFFIDAVIT OF IADihMcM.& h, g,$EN -

i" were served this date_upon.the following by U.S. mail,3Tdsst-class, postage prepaid.

Chairman Nunzio.J. Palladino Judge Elizabeth B.. Johnson

. United States Nuclear Oak Ridge National' Laboratory Regulatory Commission Building 3500

'1717 H Street P.O. Box X Washington, DC 20555 Oak Ridge, TN 37830 Commissioner James K Asselstine Eleanor L. Frucci, Esq.

United States Nuclear

' Atomic Safety and Licensing Regulatory Commission Board, United States 1717 H Street, N.W.

, Nuclear Regulatory Commission Washington, DC 20555 Washington, DC 20555 t

Commissioner Frederick M. Bernthal Edwin J. Reis, Esq.

United States Nuclear Bernard M. Bordenick, Esq.

Regulatory CommTssion United States Nuclear 1717 H_ Street, N.W.

Regulatory Commission Washington, DC 20555 Washington, DC 20555 Commissioner Thomas M. Roberts Herbert H. Brown,.Esq.

United States Nuclear Alan R. Dynner, Esq.

Regulatory Commission Lawrence Coe Lanpher, Esq.

1717 H Street, N.W.

Kirkpatrick &-Lockhart Washington, DC 20555 8th Floor 1900 M Street.

N.W.

Commissioner Lando W.

Zech, Jr.

Washington, DC 20036 United States Nuclear Regulatory Commission 1717 H Street, N.W.

Fabian Palemino, Esq.

Washington, DC 20555 Special Counsel to the Governor Executive Chamber, Room 229 Judge Marshall E. Miller State Capitol Chairman, Atomic Safety Albany, NY 12224 and Licensing Board

' United States Nuclear James B. Dougherty, Esq.

Regulatory Commission 3045 Porter Street-Washington, DC 20555' Washington, DC 20008 Martin _Bradley Ashare, Esq.

Judge Glenn~O. Bright Suffolk County Attorney l

Atomic Safety and Licensing H.

Lee Dennison Building Board, United States Veterans Memorial Highway Nuclear Regulatory Commiscion Hauppauge, NY 11788 Washington, DC 20555 l

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.se i

.c Stephen B. Latham, Esq.

Mr. Martin Suubert John-F..Shea, Esq.

c/o Congressman William Carney Twomey, Latham & Shea 1113 Longworth House Office 33 West Second Street Building Riverhead, NY.11901 Washington, DC 20515 The Honorable-Peter Cohalan Docketing and Service Suffolk County Executive Branch (3)

County Executive /-

Office of the. Secretary Legislative Building United States Nuclear Veterans Memorial Highway Regulatory Commission.

Hauppauge, NY 11788 1717.H Street, N.W.

Washington, DC 20555 Jay Dunkleberger New-York-State Energy Office Agency Building 2 Empire State Plaza Albany, NY 12223 S

" Robert'M. Rdlf4 Hunton & Williams Post Office Box 1535 Richmond, Virginia 23212 DATED:

December 14, 1984 l