ML20126D320
| ML20126D320 | |
| Person / Time | |
|---|---|
| Site: | Black Fox |
| Issue date: | 04/04/1980 |
| From: | Gallo J ISHAM, LINCOLN & BEALE |
| To: | Purdom P, Shon F, Wolfe S Atomic Safety and Licensing Board Panel |
| References | |
| NUDOCS 8004250372 | |
| Download: ML20126D320 (4) | |
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ISHAM, LINCOLN & BEALE COUNSELORS AT LAW l
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1120 CON N ECTICUT AVENU E, N.W.
SulTE 325 WAS HI NG TON. D. C. 2 00 3 6 TELEPHON E 202-833 9730 CHICAGO OFFsCE ONE FIR $T NATIONAL PLAZA FORTY SECOND FLOOR CHICAGO,16LINCIS 60603 TELEPMONE 312-568-7500 TELEX:2 + S288 1
April 4, 1980 Sheldon J. Wolfe, Esquire Mr. Frederick J.
Shon, Member Atomic Safety and Licensing Atomic Safety and Licensing Board Panel Board Panel i
U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, D.C.
20555 Washington, D.C.20555 i
Dr. Paul W. Purdom, Director Environmental Studies Group Drexel University 32nd and Chestnut Streets Philadelphia, Pennsylvania 19104 l
Re:
In The Matter Of Black Fox Station, Units 1 and 2, Docket Nos. STN 50-556 and STN 50-557 Gentlemen:
consistent with applicants' policy of full dis-l closure, I am enclosing a ciopy of an order dated April 3, 1980, from the Corporation Commission of the State of Oklahoma.
The order denies a request for approval to sell bonds.
Public Service Company of Oklahoma is pres-ently reviewing the order with a view of filing an appeal with the Oklahoma Supreme Court.
Sincerely, Jose Gallo i
One of the Attorneys l
for the Applicants cc: Service List l
l l
800425077R
h CD.M1SSION OP 7E S~A'iE OT 07,b.HOMA M;POE1; WE CCHPOPATIO :
JS THE P.WTER OP Tile Application of)
PUE!!,2C SERV 1CM CO:4PANY OP OXI.AHOMA )
Cause No. 26B24 for a Certificate of Authority por-)
1$$$$$
mitting it to create, issue and
)
Order No, soll securitics.
)
Hearing:
March 13, 1980 hppearancest See 01ficial Record DY THD COM:41SSION:
On February 21, 1980, Public Service Company of Ok3ahoma (PSC or Applicant) filed its application before this ceconinsion nee):ing authority to issue up to $70 ni311on principal amount first nnrtgago bonds, Series 0, due March 1, 2010.
On tho 6th day of March,1980 this Co: mission entered its Hotice and Order Setting Cause for Hearing and on Match 13, 1980, this matter l
cano on for hearing after due and proper notice before tho Cownission en bane.
At the conclusion of the evidr.nce this cause ces taken under advisement and cones on now for con-sideration and f or Ordt r of the Cccoission.
PINDINGS OF PACT 7))e Comission. finds that A})plicant is a public utility as defined in 17 0.S. 1971 5 181, engaged in the businesn of generating and distributing electric power and onergy in the 1
State of Oklabora, owning, naintaining and operating electric generating plants, transnisnien lines and distribution systems within th3 s state.
Applicant proposes to sell bonds for cash with the proceeds to be used to repay short term borreuings incm red or expected to be incurred to financo cont.tmetion expen6ituren, as ref.lected in Exhibit A to Exhibit 166uitted j
in evidence in this eaune.
Thr evidence in this esuse and in the record new before us in cause Number 26669 entablishes that Applicant han an extenniva construction program.
Short term borrowings totalling approx-instely S80 nillion includes, we ato advised, exp:noitu)cs at.nociated with Northeast 13 power station wbieb was cce,pleted in Deewber, 1979, Nor theast t4 power station which is scheduled for co:Olction in the f all of 1980, and 10ack Fox p:uer station i
9 which ir, in the site preparation stages pending issuance of a const ruction permit f rom the nuclear Regulatory Cc=ission.
J This Cornission recognizes the need for any elecilie utility i
to fin 6 nee construction progrws prudently undertahn by nanap-i
~
cent.
And poacr plants which bro coupicted or very nearly.
4 co:.p)tsted obould be financed at the 1cuest pccr.ible cost to the f
cor.pany nnd to the VatopayesS.
Hwever, p/.:er p3 tints which bre planned by c]ectric utilities but which are in. the prolininary f
stages of construction should be exar.ined clo::cly before approval i
E caf_thbunAtXpgt3 n. I F Q 3 W R,,,,,,, m,,,,,,,,,
pg,t R
5, Securities issues for public utilities are governed by 17 0.S.
1971 55 181 et sequitur.
Section 182 of Titic Seventeen provides in part as follows:-
"The power of-public utilities to issue securities, in case of public utilitics organized under the laws of this state.
.is a privi1cge, the right cf supervision, regul ation, restriction a_n_d control of which is, and (emphasis shall continue to be, vested in the state.
added)
'the exercise of this pc.ser has been assigned to this Conmission.
and the Legislature has specifically dafined the purposes for which securitics m.av bo issued.
Section 104 of Titic Seventeen i
nyecifically provid's that a public utility organized under the e
laws of the State of Oklabona may, when authorized by this t
extension or improvement of its Ta,nocessary for the construction, Commission, issue securities when cilitics.
The testimony of the Applicant's witness in this cause reflocts that PSO docs not consider it necessary to establish need before this request for securities issue can be acted upon f avorably by this Commission.
It is c) car that the Legislature intended this Commission to exarnine need, an reficcted in 17 0.5. 1971 5 184 before extending the security issue privilege to a pubide utility.
i Many f actorr. nust be considered anew in deciding whether l
new clectric generating plant construction is neeconary in today's economic climate, including demand gruath rate, the inphet of conservation mensures, the oficct of spiraling costs r.s.soristed with inflation, and the avnilability of totsi enerey ctpacity within this jurisdiction and the Southwest Power Pool.
Additionally, the Black Fox plsnt planned by PSO faces its own set of peculiar circunstances because of the nature of its-fuel sourec.
Assuping, arguendo, that additional capacity is needed, this Curraission is duty bound to analyze this pr oject in ter.,s of the. overall investment cost, the cost and availability of fuel 4
supply, the of ficiency f actor for this type of generation plant, l
the eff ect a plant of this magnitude (750 megavutts to PSO from Unit (1) will havn on the Applicant's required reserve margin, and the costs associated with decommissioning at the end of the plant's usef ul lif e.
Other questions which require answers include who will pay for clean-up costs associated with nucicar accidents?
And how will nucinar waste paterial be canaged, transported and stored?
The. decision is casier with respect' to' PSO's coal fired i'
p1:nts, simply beeSuse Northeast #3 is corplete and :;ortheast !4 in virtually finished.
This Co r.ission is ready to allow re-
-financing of these plants:
their construction Lis too f ar alony i1 not to recognize the econonic need to refinance at the lowest cost.
As. indleated above, however, mtny f actors need to be resolved before we can approve. construction.of en electric generating pit.nt which is, for the. cost part,- still on the drawing board.
j i
4
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A
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~Bocause of the use for which the prococos of this secur8tw9 R
.
- issue vould be made as ref1cetod above, an approval by this.
Cor:nission of this securitics application would be tantamount to-an arpioval of PSO's construction plans. -Thic record does not -
catablish need for the additional capacity to be provided by the h
Hlack Pox project.. The record in this caco, even when s.upp]c-j riented by the evidence reficetod in Causc No. 20669, does not enswer the questions which nust be as):ca concerning this construc-
)
tion project.
Accordingly this Commission is not in a position to approve or to dicapprovo 1 fin.ancing request which will fur:d this project.
Daring Applicant's Rate Case proceeding (Cause No. 26669),
i PSO separated Black Fox expenditures from consideration by this Comission,
In this case, the Comnission and Con:nission staff requo>ted that Applicant allocato and apportion that portion of itt, short torn financing relating to Black rew.
The company I,
advined on the record that such a separat. ion-could not be made.
The Con.nission takes judicial notico of the fact that accrual t
3 accounting does not lodd itself to an exact tracing of dollar j
j ficm a ticpar ation cou3d, bevover, have been n. ode on a percentage bu.is of the total portion of the construction progran paid for 1
with short term financing.
e
..his C:.:.niasion finds itnif in the position of being l
willing to allow refinancing snd continued construe: ion of the
- ortheaat power plantr. but vr.willing to approve and (f.~.
- 4nt e a rrw con) truction program for which need has not yet been established.
Accordingly, as distasteful an it is, this Ccanihdon finds that this application should be denied, p
Tne Comminsion further finds that the unreco1ved questions concerning Black Pox should be developed on the zecord'at the s
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carlict.t opportunity to that an informed judgment can be made concerning the. prudence of this construction project, i.
07:Dr.R 17 IS, THUREPORE, Till: ORDER OF Tm: COPd1SS10M that the l
Applicat. ion fi3cd herein t.hould be and the same is hereby denied, and that PSO take such steps as are necccsary to present the e
d issue of ermstauction of Black Pox po',cr station to this y
Cemission in the earlicat possibic tine frtno.
.i J.
DONi'. THIS 3rd DAY OF Ai'RIL, 19 BO.
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