ML20127J258

Testimony of Gf Johnson Re Financial Qualification of Util for Provisional OL

ML20127J258
Person / Time
Site:	Monticello
Issue date:	03/26/1970
From:	Johnson G NORTHERN STATES POWER CO.
To:
Shared Package
ML20127J241	List: ML20127J238 ML20127J258
References
NUDOCS 9211190248
Download: ML20127J258 (14)

Text

_. , _ __ - _ - - - -

}

UNITED STATES OF AMERICA ATOMIC ENERGY COMMISSION In the Matter of NORTHERN STATES POWER COMPANY Docket No. 50-263 (Monticello Nuclear Generating Plant)

FINANCIAL QUALIFICATIONS OF NORTHERN STATES POWER COMPAIN <

TESTIMONY OF G. F. JOHNSON PERSONAL QUALIFICATIONS AND RESPONSIBILITIES

1. My name is'G. F. Johnson, my residence is 4721 Annaway Drive, Minneapolis, Minnesota, and I am Vice President-Finance and Treasurer of Northern States Power Company, a Minnesota corporation (the " Company"). I am also a director of Northern States Power Company, a Wisconsin corporation (the " Wisconsin Company"), a wholly-owned subsidiary of the Company. The Company and the Wisconsin' Company collectively are sometimes referred to as "NSP".

2. I have been employed by the Company for over forty years, beginning in 1927 following graduation from the University >

of Minnesota with a degree in electrical engineering. For 25 years as a-rate engineer, I was' responsible for the design and administration of rates for electric, gas, steam, and telephone service. In formal rate cases, I testified before the Wisconsin and North Dakota state public service commissions and made many informal presentations on rate matters before municipal authori-ties in Minnesota.

I am a registered professional engineer _in 9211190248 700326 PDR T

ADOCK 05000263 pyg

)

1 ,

the State of Minnesota.

Effective September 1, 1952, I was appointed to the then newly-created position of Operations Controller of the Company and in that capacity designed a new operating budget system j - which is st.ill in effect. Effective September 1, 1955, I was i

j elected Assistant Vice President-Finance, and effective November 1, 1956, Vice President-Finance. Effective February l

i 1, 1967, I was elected to the additional office of Treasurer.

I have been the principal financial officer of the Company since August 1965.

3 My administrative duties involve supervision of the Rate, the Budget Control and Forecasting, and the-Depreciation and Economic-Studies departments.

4. I am responsible for formulating, developing, and exe, cuting the financial plans and programs of the Company. I also participate in the financial planning for the Wisconsin Company.

To develop such plans, forecasts of NSP operations are made for l

periods of five years or more. On the basis of such forecasts,

- general plans for financing are worked out for several years in advance with specific plans-being-developed for the current l,

year. A financing program for each year involves scheduling l

the issuance of permanent capital securities, the preparation and filing of applications with the Federal Power Commission and-the Public Service Commission of North Dakota, and the pre-paration and filing of a registration statement with the Securities and Exchange Commission. Short-term borrowings

! are arranged for and made to meet interim financial require-l ments.

I L 2

. q i .

I As Treasurer of the Company, I am responsible for the i

care and custody of the Company's funds. This-involves the I administration of the deposit and the disbursement of funds, the maintenance of appropriate balances in banks, the handling of relationships with banks, and the investment of surplus

cash. When cash is needed, I arrange for borrowings from i

i banks or the sale of commercial paper.

j THE NSP SYSTEM

1. The. Company and the Wisconsin Company are predominantly h

i operating public utility companies en6 aged in the generation,

. transmission, and' distribution of electricity throughout a 1

j 40,000 square mile service area and the distribution of natural

, gas in 76 communities within this area. The Company also:sup-plies some heating and telephone- service.

I

2. The Company-is subject to the jurisdiction of the

! Federal Power Commission, under the Federal Power Act, as to f certain activities including, among others, rates ~for electric

! energy in interstate commerce and the issuance of certain securities. The Company is also subject to the jurisdiction s

{ of the Public Service Commission of the State of North Dakota l as to certain activities including, among others, rates for.

i retail sales within the state and the issuance of certain

. securities. The Wisconsin Company is subject to the juris-diction of the Public Service Commission of Wisconsin as to i

certain activities' including, among others, rates-for retail service within the state and the issuance of certain securities.

3

1 l 3. The Company serves customers in Minnesota, North Dakota, and South Dakota and the Wisconsin Company, in Wisconsin. Of-

! the approximately 2.9 million people served by NSP, 62% are in the Twin Cities Metropolitan area.

Revenues of the NSP system totaled $291.3 million for the year 1968 of which $240.5 million or 82.6% was from electric i operations, $47 2 n:1111on or 16.2% from gas operationa, and

! $3.6 million or 1.2% from heating and telephone operations, f

1 NSP's revenues in 1969 were $323.6 million of which $267 4 million or 82.6% was from electric operations, $52.5 million or 16.2% from gas operations, and $3 7 million or 1.2% from

heating and telephone operations. NSP had 846,912 electric l ct'stomers and 207,623 gas customers at December 31, 1968. As of December 31, 1969, NSP had 864,295 electric customers and 212,734 gas customers.

4. The growth of the NSP electric business is indicated by the.following data on kilowatt-hour sales, customers, and i peak demand for the years 1969-1965, inclusive.

! 1969 1968 1967 1966_ 1965

Kwh sales (millions) '13 697 12 541 11 564 10 554 9 567 t

Increase over prior year 92% 8.4% 9.6% 10.3% 7.8%

Customers 864 295 846 912 827'901 813 315 799 003 Increase over prior

! year 2.1% 2.3% 1.8% 1.8% 1.9%

Peak demand (megawatts) 2 953 2 767 2.484 2 245 - 1 991

= Increase over prior year 6.7%- 11.4% 10.7% 12.8% 5.7%

l  ;

i 4-

, NSP FINANCING

1. Of the funds required for NSP construction expenditures

over the last ten years (1960-1969), 43.6% have been obtained i

from operations and 53 3% from new capital throughLthe sale of J

first mortgage bonds, preferred stock, and: common stock. All construction is financed on the basis of annual requirements

) with no separate financing being made for any specific projects.

NSP revenues have been more than adequate to cover operating expenses.

! 2. In the five-year period, 1965 through 1969, when con-j struction expenditures totaled $530.4 million and operating expenses totaled $1,109.0 million, tha Company sold an aggre-f gate of $287 7 million.and the Wisconsin Company $9.9 million in securities. The Company sold five bond issues for a total of $192.9 million, two preferred stock issues for $40.1 million,

{ and two common stock issues for $54.7 million.. The Wisconsin Company sold one bond issue for $9.9 m1111on. Bonds sold by NSP in recent-years have been rated Aa by Moody's, i

l FINANCING OF MONTICELLO NUCLEAR PLANT f- The estimated cost of operating the Monticello Nuclear Plant for a five-year period is.$44 million. This cost does l not' include annual carrying charges, but does include fuel, operating, and maintenance costs. This compares with NSP's total revenues during the past five-year period of 1965-1969 1-of $1,376.8 million. Detailed information relating to NSP's financial qualifications for the requested provisional operat-ing license are set forth.in Amendments 9 and 16 to the Applica-i tion.

5

. , - - . .-y .., . ..,+;--- _ .._~,..m.,- -...~rwv.-,- .,,--.,,v... w

' * ~

p.

4 .

FINANCIAL PROTECTION AhRANGEMElffS Effective June 9, 1969 the Nuclear Energy Liability

Insurance Association (NELIA) issued NELIA Policy NF-174 to

- the Company, the named insured, in the amount of $1 million, f This is a continuous policy and will be'in effect for the limits required by the Atomic Energy Commission-until cancelled.

This is stand-by insurance reflecting NELIA commitment to furnish nuclear liability insu*ance in the amounts of financial protection required by the AEC for reactor licensees according f to Part 140 of the Rules and Regulations of the AEC. Part 140.i3 requires the Company to maintain financial protection in the amount of $1 million to cover its possession of nuclear fuel prior to loading in the reactor. The Company has this financial protection in the form of a NELIA policy for the 4

required amount.

Indemnity Agreement No. B-42, effective October 3, 1969, 4

has been issued by the AEC for tha receipt, possession, in-l spection and storage of the nuclear fuel for Monticello which provides Government indemnity in the amount of $500 million in excess of $1 million, the financial protection required of the Company by the AEC in the form of nuclear energy liability g insurance. When fuel loading is commenced-in the reactor, the

- amount of financial protection required-will increase to $82 million.

The two nuclear-pools, namely the Nuclear Energy Liability Insurance Association and the Mutual Atomic Energy Liability Underwriters (MAELU), are committed to furnish $82 million of i

6

l.-

-[) (h 1 .

l nuc]?ar insurance, when fuel loading d.s authorized ~, as fol-lows:-

NELIA $63,550,000 MAELU. $18,450,000 i

Attached to this testimony are copies of letters dated I

l March 16, 1970, from NELIA and MAELU committing'these groups-i

to provide the required level _of financial protection.

! CONCLUSIONS

1. The Company-.is financially qualified'to engage in the activities authorized by the provisional operating license in l accordance with the rules and regulations of the Commission.

I 2. The Company has made necessary arrangements to furnish l to the Commission proof of financial protection in accordance f

, with 10 CFR Part 140, " Financial Protection Requirement 3 and i-

Indemnity Agreements", of the Commission's regulations.

Dated this 26th day of March, 1970.

l i

I

+

i i

f i

?

i 7 4

.,,,,_..m ,, _ . . , . .

• • ~"'""*""""'-

, Nuc eat Energy lisii1 Insurance AssocirLon . . .. t.. ,,.... ...... e......

85 John St'eet. Ne* York, N Y.10038 . phone-(212) 227 5342 c .aba.a'.' c. s w.", C.~

• a, t.. e .. .i.i i ....ae. + u h Empi.,.<..C.mm.rti.I 4. . i.mp ni.e Joeeph Merrone e ...... . , in. e ,

a~.'~'.- ..., . ... ..,ia ...,e . ,..,

""' ',* "..$ ,. . . . . .. ..~.c~.,.~~....~

a.,.i .oi.w in,..: . c......

t6.t,. i. sa. ...,e . ,

March 16, 1970 Mr. John W. Ikiley Wesley J. Yelley Co.

1804 First National Bank Eldg.

Minneapolis, Minnesota 55402 Northern States Power Company NELIA Policy NT-174 (Monticello Plant)

Dear Johnt

...is is to confirm our telephone coversation today wherein I indicated NELIA's willingnosa to increase the limit of liability under the captioned policy, from the current $1,000,000 to $63,550,000 upon your request.

Best regards, e

CRB GC Char es R. B -des l

Underwriting Manager l

l I An 0,ganization of Capital Stock Insurance Companies l

Theodore Germ DevW (* Tressler

$ w er ery Menorer Mutun Atom ENRGY LUWUTY UNDRWERS One East Wacker Drive Chicago, Illinois 60601 Telephone 461-4090 NEW YORK OFilCE rn m,d Avenue, New York 17. New Yort teiephe.. m 7.osoo 1

- March 16, 1970 Mr. John We Kelley Vesicy J. Kelicy Company 1804 First National Bank Building l

Minneapolis, Minnesota 55402 Northern States Power - Montecello Plant

Dear Sir:

1 This is to advise that Mutual Atomic Energy Liability Linder-writers is willing to issue a polley for limit s of $18,450,000 for nuclear liability insurance at the captioned location upon your request.

Ve ry t ruly you rs ,

. t. /

li l. (( L<j if D. E. Kuirenga .,

SC:ar Secretary j

4 Governing Committeen Amerleen Metvel Debtsey Inwrence Company Uberty Matvel lawenee Compsey Len.bermene Mve vel Convelry Compesy Fanployers Matvel WoWaty inevrence Compeer of Wl.sende 14erdwere Mutvel Coeveh Company Michigen Mve,el UeVRty Cesapeny

' ~

.) (i e

STATE OF MINNESOTA ?

as. AFFIDAVIT 0011NfY OF HENNEPIN l

0. F. JOHNSON, being first duly sworn, on oath says that he is Vice President-Finance and Treasurer of Northern States Power Company, a Minnesota corporation, that he has read the foregoing statement of his testimony, and that the same is true and correct.

w C$D m G. f. Johnson l

Subscribed and sworn to before me this 26th day of March, 1970.

dj u w e/

ff  :

PEAnc s.ovocAN Notary Public. Hennepin County, Minn.

My Commission Empises June 23,1971.

(Notarial Seal) l

_ _ _ . . _ _ _ _ ~ _ _ _ _ _ . _ _ _ _ . _ . _ ____.__.. _. . _ . _ . . _ _ _

UNITED STATES OF AMERICA  ;

• l d

ATOMIC ENERGY COMMISSION 4 In the Matter of )

)

l NORTHERN STATES POWER COMPANY )

) Docket No. 50-263-

Monticello Nuclear Generating Plant )

} Unit 1 )

CERTIFICATE OF SERVICE I hereby certify that copies of FINANCIAL QUALIFICATIONS OF NORTHERN STATES POWER COMPANY - TESTIMONY OF G. F. JOHNSON,

dated March 26, 1970, in the above capitioned matter were served upon the following by deposit in the United States mail this 26th day of March, 1970.

Valentine B. Deale, Esq. Mr. L. J. Barthel

. 1001 Connecticut Avenue, N.W. Chairman, Wright _ County Suite 504 Board of Commissio'ners l Washington, D. C. 20036 Buffalo, Minnesota i

! Dr. John C. Geyer Mr. Thomas F. Engelhardt (6) '

Chairman, Department of Geography Office of the General Counsel I and Environmental Engineering U. S. Atomic Energy Commission Johns Hopkins University Washington, D. C. 20545 Baltimore, Maryland 21218 Mr. A. A. Wells, Chairman l Dr. Eugene Grouling Atomic Safety and Licensing Professor of Physics Board Panel Duke University U. S. Atomic Energy Commission Durham, North Carolina 27706 Washington, D. C. 20545

Dr. Rolf Eliassen Mr. Stanley T. Robinson, Jr. (30)

Department of Civil Engineering Chief, Public Proceedings Branch Stanford University Office of the Secretary Stanford, California 94305 U. S. Atomic Energy Commission i Washington, D. C. 20545 James P. Gleason, Esq.

205 Commonwealth Building Mr. Joseph B. Knotts, Jr.

1625 K Street Counsel for AEC Regulatory Staff Washington,-D. C. 20006 U. S. Atomic Energy Commission R. N. Barr, M.D.

Secretary and Executive Officer State Department of Health'

itate of Minnesota University Campus Minneapolis, Minnesota- 55440 Donald E. Nelson Counsel for Northern States Power Company

Dated at Minneapolis, Minn.,

+%4.

9Ath amu nf March. 1970

, w - ,; _; . ..

9'

', .y -

g bM pl l f' I .n amm n mamma in g % *v

AttMB M a'assammann )g. ,

l , ~

- . T.g i > theunster et =  % Qty 84hyC l )> f\ (?N -

l ===ame semes soumi seems J, a ssau e n 'e' t' 's e . m ie ,s ' i

(mmMeenas helaar emesseMas /  :

stemt e tt 1)' )) M,V Q f Tp MEM l

! I korety eart1% met espies et a telagene toen saamassen Enrinemsstal l centre 1 ettamume Amoestatten givies smaltas eMeeso $m tes oestiassa j matter huse home serest en the smineenag W espostt to the Dettet States mesi, rtset enase er ear ents, mas speh agr et Marsh SMO:

i vateottes s. sense, nes., mesmeen essau ameneer meg.

Atende anseer sua mesmaing 3eert Shem, PLtemen, hetta, TrestrMes j zoal oseneettent Avemme, s. v. 6 m eten sette pob gas sesentesmen street s l

washtastem, s c. soo36 unshtesman, s. c. spool . v.

I sense P. ensemen, neg., Altermose ser, s, r. sesstsey, Tsme pnetammt -

entsemn l Atause seeser sua unemotas noese states numer osapeur i ses emmamesm1m seguins bak siestant sman i ades E street, s. W. senesestas, estemassem spbot i usadastem, n. s. asses I

ser.SeneM B. Ylee President l Br. Juhm C. esper, theismus amt gamesel l Departenut et ensempty est Bertham states Pomer omessy l Beviseammutal Bagtmeestas 434 WhetastItall the Jetas msg M - m gveengty getamm ystie ,Stuneesem Spb01 amitsmare, samy1mes masa Emmerable Base 84 E. Imesmoor 3r. Dessee Greeling sessemer , stato et tse e Freenmoor et Phystes 94. San 1, stimmesets $5301 meio matversity 8'elum, perth carelina FT106 Bar. I J. Barthal, Oneirase ursapia con g nears er I ar. nett E11 asses omsdamtemere l Department et civil misineertas Beres3o, gammaesta $5313 l Stenamed aniversity l stenfest, Om11feesta sb3e5 ar. B. 3. serr, sessetssy

[ est manadive strimer thamme F. Bass 3hes44, Bot. State tapartmaet et gamle

assenteer steer messeetty

5. 5. Aboute hasy commissten asemesyants, 33460 l

umhtestem, p. c. seeks J

N-*a w-a 64 JHe_DaWe4.h a.m A m4 A A s-_gAi4.h-.e-u-4.a. awAi-W-u.4a,,...-MaJmd-_6. s amteswa_,...me-A_es.#mm4.im_m--mwg4.;m.a-m4,mm.

--_r_..mm - m., - - --. ----

j' r

, so ass see a i D. Asha P. BaAst$4h, SupeuMw 31 rester i M ake DatamWen eastusa Agunny

! 137 Betsmuse 8tsest 8. 8.

! imanagene,mammess,enspue ceumsmosamer et osmeerveuse

! Mate tapesteset et Osmosen Man j 84. Pusa,unemesses pgaa 1

l

! 1R sm.t, m b einse - - T 3

4 4

i 1

I

, -- th$2 < w ////Ob/bl%:

j we.mWh W l est We !MW j E.4 74 Oe ':;%

i b , h1L4f l We 3I.Mi

! E. den.d

}

l i

d 1

i i

6 i

1t i

a i

t e

4 1

i J

i 4

I a

. 6 t

l.

__ , . .. __....., _ . _ _ _ . , _ . - . _ , , _ . . _ _ , - . . - . . . _ . . c..--_.___,,_.__.

i, f~, p. j . 2 60..2.69 --

o . ,

4 t

l j j, ,

c,. -.r'"~T

-E- ,

. M Q ay.kled b o'*'*" ** "'*C 4

• j i'A0 !!!a 25 /,'a 3 44 U .W C : . ti d ofWN l  ; g g;, .< U.S.' ATOM'O [..*!Th Gy COMj(,:.

i.

I #A Ll.UI j i u, u */ i: i L n.,,

a ( 3 4 )C (0 6 . 4 Ad663 ,

I r

<; 4 M 1 ys . ). P of P i .41 NN rAPO!.! S Mi NN' a n . '/3d A C S T '

v 9;i..e a T/ O al A N i NER61' C 0hiilSSl h

• I*

cQ . 'i..n-m_,,  :< 004 I 'l l 'l ti bT PEOHiddNSI W AS'IUC .

,- . ' _t

t w.:..a... -

j o u :. i d .w N 1.5 UUr..N! WIT Lt;TTEN OF'MAf@i'it3go HgouCS,TINO Le: AV E

.( 14.' T .. , . v e. h > 1.1 At

0 tO;Ak tivu (N. uU/F ALO MIN 4df;OT6 QN APHIL N TH l . . :. D. .d. :.C i :.J TO -incl. DOL OUR FULL I4611.1/40 A00dESS IT ! $ it? V E ke'N D c &A z.v.uiiW.i .41N MO7A c.NVlHONdCNTAL CON THOL. C I Til.6NS AS SOC I All O9

-l j to m i SACHA*.'u. .s)ni.ET $AIN bt'AUL.641Nd6SOTA S5101

• A l ,

j nu s, ui. rNw Tsu ; /

. DocKE1I3 -

. ( a4 7 ) .. -

t-

" f/4R251970 u r (N.O $f b * $ 'a g ,

r n rr::xc:

i a 0 ...' h r. 2Gis e . -

, 1.,7 'OL'L

-", //

j v3M.c.itus 07dN .. .

. . , , ,,, ,, 7 ,3 , , , , , , , , , /3 gg,,s

{ <

'4 i

! w .. . . .. . l c . . . . . n. . 4.. .w i

~

h. .::'Q. s $',09.. $ h$b.hb6$.' , ' Y'Y *b^ 'Y$': 'bv?. ' ' ' ' ' '

i s'> i

' ~ ~ ' * * ~ ~ . , - . , _

.~ ,

\

4 i- .

i i i +

t 4

< s q

~

4 9

• 4.------4 --w---..>.,.~-e.,.------ww<ww-w, -m. c ,...,irvrw- w ,~w-~,.- y._