ML20128D928

Forwards Financial Testimony for Monticello Nuclear Generating Station,For Inclusion in Main Body of Safety Evaluation

ML20128D928
Person / Time
Site:	Monticello
Issue date:	01/03/1973
From:	Carroll R US ATOMIC ENERGY COMMISSION (AEC)
To:	Ziemann D US ATOMIC ENERGY COMMISSION (AEC)
References
NUDOCS 9212070425
Download: ML20128D928 (7)

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ATOMIC ENERGY COMMISSION W ASHINGTON. D.C. 20545 k

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Operating Reactors Branch ensing Contr. for Accounting THRUt W. E. Campbell /

NORTHERN STATES POWER COHi'ANi, MONTICELLO NUCLEAR GENERATING PLANT, UNIT 1, DOCKET NO. 50-263 Enclosed is my financial testimony on the subject matter.

The testimony has been prepared for inclusion in the main body of the staff's Safety Evaluation with a financial analysis of the applicant attached as an appendix.

L /(JDL. Carroll Raymo l [ Oued Staff Accountant Accounting Procedures Branch, OC Enciosures As stated cci J. Gallo, OGC R. Diggs, Licensing P. Fine, Licensing i

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UNITED STATES

• ATOMIC ENERGY COMMISSION kf # W ASHINGTON. D.C. 20$45 1L- 1 JAf; ?> T3 D. L. Ziemann, Chief 1 signed) WalLr E. Carupbeu Operating Reactors Branch #2, Licensing THRUt W. E. Campbell, Asst. Contr. for Accounting NORTHERN STATES POWER CCMPANT, MotCICELLO NUCLEAR GENERATING FLANT, UNIT 1, DOCRET NO. 50-263 Enclosed is my financial testimony on the subject matter.

The testimony has been prepared for inclusion in the main body of the staff's Safety Evaluation with a financial analysis of the applicant attached as an appendix.

/( ean / (' adt Raymond-L. Carroll Staff Accountant Accounting Procedures Branch. OC Enclosurest As stated cc: J. Gallo, OGC R. Diggs, Licensing P. Fine, Licensing g

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I l FINA CI A1,_ QUA1.l FICAT10NS ,

The Commission's regulations which relate to the financial data and pf information required to establish financial qualifications for an applicant for an operating license are 10 CFR 50.33(f) and 10 CFR 50, [

Appendix C. The basic application of Northern States Power Co. , as amended, and its certified annual financial statements provide the

! financial information required by the Commission's regulations. This information includes the estimated annual costs of-operating the Monticello Nuclear Generating Plant for the five-year period 1973-1977

. plus the estimated costs of permanently shutting down the facility and t maintaining it in a safe shutdown condition.

i Our evaluation of the financial data submitted by the applicant, l

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summarized below, provides reasonabic assurance that tbc applicant

possesces or can obtain the necessary funds to meet the requirements of 10 CFR 50.33(f) to operate the Monticello fluclear Plant, and if

necessary permanently shut down the facility and naintain it in a safe i

shutdown condition. ,

i The Monticello Plant is used to augment NSP's other electrical-

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l i generating capacity. The total costs to operate the f acility will i

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come-from operating revenues. The estimated annual' costs to operate j

.the Monticello Nuclear Generatirs Plant for the five-year period I 1973 through 1977 are.(in millions of dollars): $26.2, $26.5 $26.1,

- $26.5, and'$26.0 in that order. These costs include interest, l

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depreciation, return, taxes, maintenance and miscellaneous supplies, operating and maintenance labor, insurance, and fuel costs. In addition, the applicant estimateu the cost of-permanently shutting down the unit at the cod of its useful life will be about $10 million.

It is estimated that an annus1 cost of $5,000 will be incurred there-af ter to maintain the facility in a cafe thatdown condition. Amounts required to permanently shut down the plant and nalntain it in a - saf e shutdown condition following retireatent will be obtained from the company's pool of funds.. Approximately one-half of thece funds are derived from internni sources and one. half from sale of securities.

We examined the finnneial information cubmitted by Northern States Power to determine whether it is financially qualified to meet -its estimated costs. The inf ormation contained in Northern States Power Company's (NSP)' calendar year 1971 financial report indicates that operating revenues for 1971 totaled $386.6 million; operating expenses were $308.5 million, of which $38.8 million represented depreciation.

The interest on long-term debt was earned 2.7 times; and the net income for the year was $58.2 million, of which $42.2 million was distributed as dividends to stockholders-and the remainder of $16.0-As of Deccober 31, million was retained for use.in the business.

j- 1971, the company's assets totaled $1,433.6 million, most.of which1 was invested in utility plant -($1,344.6 million); retained earnings amounted to $146.9 million. Financial' ratios computed from the 1971 I

statements indicate _an adequate financial. condition, e.g.. long-term debt tertotal cdpitalization . 54,'and to net utility plant - .50;-

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net plant to capitalization - 1.08; the operating ratio .80s and t- .

I the rates of return on common . 13.07., on stockholders' investment 10.17., and on total investment . 6.77.. The record of NSP's operations

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4 over the par.t 4 years reficets that operating revenues increased from  ;

$270.7 million in 1967 to $386.6 million in 1971; not income increased from $38.5 million to $58.2 million; and net investment in plant from 1 i

5650.4 million to $1,3t4.6 millions while the number of timus interest l .

i earned declined from 3.1 to 2.7. lioody' r, Investors Service. ratos the

' Company's first mortgage bonds as Aa (high quality).- The Company's ,

curreist Din and'Dradstreet credit rating is-SA1.

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s 5 A copy of our financial analysis. of the coinpany reficcting there ratios i.

and other pertinent financial data is attached.as an appendix, r

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NOR11tlM'N STATES l'0WMM C( MPANY

• 130CKLT NO. 50-263 FINA13CIAL ANALYSIS (dollars in millions)

Cnlendar Year roded December 31

_1971 _1970 ,1j)69 Long-term debt $ 672.2 $ 572.1 $ 528.6 Utilit.y pinnt (not) 1,344.6 1,173.7 1,04'.4 s Ratio - debt to finel plant .50 .49 .51 Ut111t y plant (net) 1,344.6 1,173.7 1,045.4 Capitallentfon 1,250.4 1,099.8 981.6 Ratio of net plant to capitali:.ation 1.08 1.07 1.06-Stochhniders' equity 578.2 527.7 453.0 Tot el acceto 1,433.6 1.262.5 1,130.2 l'roprietary ratio .40 .42 .40 Earninen available to :ommon equity 48.4 42.3 38.4 Cc.m.on e qu it y 372.7 357.2 307.5 Rote of cornings on :ommon equity 13.0% 11.8% 12.5%

lie t inecme 58.2 $0.0 45.3 Stoelholders' equity 578.2 527.7 453.0 .,

C Rate of em nin.?,c un r.tockholderc' equity 10.1% 9.5% 10.0%

liet income before into rcr t' 95.7 80.9 69.8 .

Liabilities and capital 1,433.6 1,262.5 1,130.2 Rate of earnings on total inver.tment 6.7% 6.4% 6.2%

Net income before interest 95.7 80.9 69.8 Inteu rt on long-term debt 35.5 28.2 22.2 No. of times long-term interest earned 2.70 2.9 3.1 Net income 58.2 50.0 45.3 Total rcvenuec 405.0- 365.7 331.8 Net income ratio .14 .14 14 Total utility operating expenses ,308.5_ 283.7 261.7 Total utility operating rcvenues 386.6- 352.4 323.6 Operating ratio . .80 .81 .81 .

Utility plant-(trors) 1,665.5- -1,476.1_ 1,324.8 Utility' operating revenues 386.6 352.4- 323.6 Rat.io of plant investment to revenues 4.31 4.2 4.1 1971 1970 Capitalir.ntion:

,/poun t,  % et Total Amount %LofTotn5 longatcrm debt $_ 672.2l 53.8% $ 572.1.- L52.0%

Preferred stock 205.5 16.4 170.5 15.5 Conrnon stock 6 curplus 372.7 29.8 357.2_ _32.5 Total i

$1.250.4 100.07. J$1,099.8 100.0%

Moody'ai Fond Racing: First Mortgage Aa Debentures -A Ddn & Bradstreet credit Rating: 5A1.

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.i FINA CIA) QUALIFICATIONS t s

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! The Commission's regulations which relate to the financial data and -.'

1 l information required to establish financial qualifications for an t

) applicant for an operating license ore 10 CFR 50.33(f) and 10 Cra $0,-

Appe'ndix C. The basic application of Northern States' Power Co., as j amended, and its certified annual financial ctatements provide 6he-  !

-financial--information required by the Commission's regulations. This 5

t information includes the estimated annual costs of operating the Monticello Nuclear Generating Plaid for the five-year period 1973-1977

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] plus the estimated costs of permanently shutting down the~ facility and maintaining it in a safe shutdown condition.

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Our evaluation of the financial data _ submitted by the applicent, 2

suunnarized below, provides reasonabic assurance that the applicant possesses or can obtain the necessary funds to meet the requirements ,

. . of 10 CFR 50.33(f) to operate the Monticello Nuclear Plant, and if

neccusary permanently shut'.down the facility and maintain it in a safe shutdown condition.

The Monticello Plant is used to augment HSP's other electrical j generating capacity. The total coste to operate the facility will como_from_ operating _revenuca. .The_uttimated. annual costo to operate the Monticello Nuclear Cencratiq; Plant for the five year period

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} 1973 through.1977. are (in millions:of dollars):? $26.2, $26.5, $26.1,  :

$26.5, and $26.0 in that order. These costs _ include interest,

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