ML20136C756

Contentions 1 & 2.Alleges Applicant Does Not Meet Financial Requirements That Would Permit Const of Facility.Applicant Data Represents Gross Distortion of Nuclear Power Plant Record Re GE BWRs

ML20136C756
Person / Time
Site:	Allens Creek File:Houston Lighting and Power Company icon.png
Issue date:	09/18/1979
From:	Baker B AFFILIATION NOT ASSIGNED
To:
References
NUDOCS 7910160065
Download: ML20136C756 (4)

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U:TITED STATES OF A:IEUCA

,.  :'UCLIM REGULCO.Tl CC:C"ISSIC:! EESPEg SEP1e19g .

TC: Secretary of the Commission LOCKEm :70. 50-466 U.S. Ituelear Regualtery Cc==ission In the Matt:r of Uashington, D.C. 20555 Eouston Lighting and Fower Al"N Oceketing and C CE"E7 (A *^ ** =2 1**#

Services 3 ranchNRC PUBLIC DCCU,ENIC 9 pyggting Station, Unit 1)

Contentions #1 & y2 of 3ryan L. 3aker Cc=es now 3ryan L. 3aker, granted stcnding by the Licensing Scard as an intervenor in the =atter of AC!GS 1 (August 1,1979), to present centsntiens as required by said 3 card.

CC:TTE!TICH #1:

'" Petitioner contends that the ap;11 cant does not =eet the require ents of 10 C?2 2.104 (b)(1)(dj(iii) and of 10 CFR 50.33(f) that it show that it has sufficient funds available for constru . tion of AC:!GS or that it has " reasonable V assurance" of obtaining such funds, or co=bination of the two. Although cy argu=ent could have been =ade in 1978 using info nation available then, I have 3 opted to use the most recent available infer:stion as more relevant to the current proceedings.

17 argu=ent relies largely on information contained in HIa?'s rate-hike application now pending before ths Texas ?ublic Utilities Co==icsion (?UC),

which gives the cost co:plete and current picture of the applicant's financial health. Therein, applicant stat s that it requires a rate-base increase of 179 cillion dollars in order to finance its a bitious crash progra: of power plant construction. The estimated total cost of new 2.cilities, including ACN33, is said to be 3 9 billion dollars, with 1 7 billion to be spent by 1981 (testi beny of D.D. Jerian, Ela? rate-hike applicatien, p. 6). Thors is reason to believe that this figure is actually t:o low, as I will explain later.

Applicant does not anywhere clai: to have these funds on hand, so the question of financial qualifications, as cutlined under 10 C73 50.33(f), becc=es a questien of whether or not applicant has "rea: enable assuran e" of obtaining this large amount of =eney. A;plicant 's FCC rate-hike application zakes clear that their enly hope of obtaining such funds is te include 100% of Constructicn Works In Progress (C'G) and Nu dear ?uel in Frecess ( TFI?)in the rate lase, i.e. ,

to get the c u rent ratepayers to finance plants which a.re not yet producing electri al.ty.

This is a continuing theme in the rate-hiks application, but the cc pany's position is stated =est succinctly in the testimony of its cc=ptroller Steve Letbetter: "As a =inimum, the level of CUI? and N7!? in rate lase should be the a: cunt required to maintain the Co:pany's financial intepity. . .. As .

Schedule P indicates, 100% inclusien is required to produce results which :culd I enable the Co pany to achieve its financial integrity require =ents." (Testi=cy of Letbetter, p.7, e=phasis added) Later, Mr. Letbetter states: " Construction expenditures in 1950 will be 2.r greater than the current level, but hopefully, i with 100% of cur C'O in rate base, u4t will be in 2 positien to weather ne serious financial burdens pladed en the Cc=pany." (Letbetter, p. 30, emphasis added) l j47 ]64 7910160 06'

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3ryan L. Baker COMTIUTICH i!1 (cont.)

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. Petitioner centends that such "he;efulness" en the part of the applicant scarcely constitutes the " reasonable assurance" of financial integrity outlined in 10 CER 50.33(f), since by applicant's own admissien such assurance is depen:ient on the reco=mendations of the state PUC. This body (the ?UC:) dealt a severe blow to a;;11 cant's " hopes" in Ucvember cf 1978 by granting only a fra etien (339 million) of the rate increase which applicant said it required; it is for this reason (according to cover letter of D.D. Jor:ian) that appli-cant seeks another rate increase this year even though the PUC's own rules of precedure allow such a request only every two years. PUC counsel has reco-m= ended against appliaant's request already. Additionally, the City of Houston's consulting fir = on this matter, Touche Ross of Dallas, has very recently reco-

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nended that applicant get only 43 =illion of its requested 179 =illion dollar increase in rate base. (Houston Fost, Sept. 14, :979)

Finally, it should be noted that even if applicant gets all of its hoped-for C7I? and ITFI?, a substantial portion of it will have to cover cost overruns at its South Texas Project already under construction and will therefore be ,

unavailable f;or use at ACNGS. I base this assertion en applicant's figure of l.6 billion dollars as the construction cost of STP 1 & 2 (from rate-hike appli- (

cation), which is the figure upon which applicant bases its CiE? require =ents, (

and the recent disclosure by 3rown & Rect that the latest cost estimate for both these units is now of the order:of 2 4 billion dollars. Applicant's share of this 800 million dollar discrepancy (30.6% or approximately 250 million dollars) I will cut substantially into the one billion dellars it says it requires for construction of ACNGS, even if the FUC grants applicant 100% of CWI?.

Petitioner asks that the Licensing 3 card not leck upon applicant's " hope-fulnesc" of obtaining 100% of C;C? as "reasenable assurance" of having suffi-cient Funding, but instead require that applicant obtain securs fugding from a private source to be repaid when electricity is available frem ACUGS. Alter-natively, applicant should be required to make some showing that the PUC and the various local gover.1=ents which represent the interests of the ratepayers are willing to make a clear cecnitment to pr6 vide applicant with all the con-struction funds (including such cost increases as may be required in the future) that it =ay need threugh assured inclusion of l'.C% of C;TI? and :TFI? in the rate base. Failing either of thase g als, construction permit shoul:1 be denied for failure to satisfy requirements of 10 CFR 50 33(f).

(Petitionerrecognisesthatconclusiensceffrningfutureactionsofthe e PU are semewhat speculative, but contends that applicant's assu=ptionsof a  !;

favorable disposition by the PUC is also speculative. The FUC begins its hearings en Sept. 27, so the situation vill be clearer by the time of the Special Frchearing Ocnference. I file this cententien now in order to

=ect the Sept. 14 dea:iline set by the 3caini, and intend to keep the Board posted en relevant developments ad they become kncwn to :e.)

CCECICU d 2 Petitioner contends that applicant has skewed its cost-benefit an:. lysis (S.10.4.1.1 of the Final Envirenssntal Statement (FES)) and its consideratien of an alternative energy source (A;;endix S.D. of FIS) in favor of nuclear I generatien of electricity. Specifically, petitioner contends that a;;11 cant's assertien that ACNGS can be errected to curate at an avarage :f 30% of design capacity represents a gross distorti:n ef'thi actual record of nuclear power j

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Bryan L. Eaker CO :T::: TION /2 (cont.) Docket 350-466

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. plants, e$pecially of th dismal reliability of GI's 3 oiling ' Tater Reactors .

( 3'.T2s) . Since applicant gives no basis for its optimistic assumption of an '

8C% capacity factor, peti:icner sn enly assume that it is an article of faith which is nocessary in ord-r to meet the require:c.e.ts et 10 CE. 2.104 (b)(3) and : ??A 102(2)(A,',, a E) .

Petitioner contends that an exasinati:n of the record cf nucler.: power plants, as reported to the ;IC and :*20, vou~d giva a more reasonable idea of the perfe= ance f ACNGS, and that such data should therefore be ussd in lieu of ap;11 cant's hypotheticql 8C$ capacity facor. Charles K:canoff and liancy .

A. 3czer,in their " Nuclear plant Performace/ Updates !ata Through ';ece=ber 31, 1975'.' havs perfo=ed just such an analycia using the ::most conservative statistical techniqu:s. Their analysis correlates capa it type, namufacturer, age, vintage, and prototype /y factor duplicate withUsing status. rsactor their size, reacto fo=ulae, en page 29, one ean obtain a reas;nable projection of the mpacity faa>

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• i l ., e s (n e* \ Vp capacity),seeken,=anufacturer, age, vintage,andprototype/duplicatestatus. '

/\ .d. hr 4W wMa , 2 Using the fc = ula on page 29

^ kene can obtain a reasonable projection 3 of the capacity factor for a 3'n*2 of 1150 My design ocpacity: Capacity factor =

86.9 - 4.27 X 11.5 = 37.6% capacity. It may be argued that the presence of 3rown's Ferry Units 1 & 2 in the data base skews te results, since an "ancialeus" event (fire in the mble tray) shut %/~\ plant;dewn for 13 cenths ending .in September 1976. Using a fo= ula that elisinates data from t -se plants gives a capacity factor of 69 7p 1.6b z 115 = 50.1 j.zz g ,. )-

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?stition:r contands ths.t, based on the most generous figure of 5Ck and assuming v'.thout question applicant's questionable assu=ptien f 30-yecr plant 1..fe; (S.10.4.1.1 of F:S), AO:iGS will not produce "over 200 teravatt-

'v%- A 4W s) hours" of electricity out less than 150 teravatt-hours, and that similarly,

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the Tresedt faIue Tf this~ electricity in 1985 -lo~11ars will be ne(the t

asserted 5 2 billien dollars tut rather en thw order of 3.25 billice i

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dellars. Use 1 a 50% capacity f actory based :n historical data, rsthst than a;;1ica.nt's hy;othetical 30% ca;acity facter, will greatly affect I, I,

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the comparisen of nuclear ocats to cos*a cf all alternative energy sour as (including ocnservation) and ;etititioner centends that a fair a;;11 cation of the princi;les of T511C2(2) necessitates use of the acre realistic f.gure.

Finally, petitioner contends that t ,., large and unreli ts A y

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is ina;;ropriate in nachir.g a;;11 cant's stated goal of maintaining a system-  ;

r 5 wide rese: re es;acity of 15%. If M the 1150 M*J (nocinal) of A0r,;S turn out g)

. 4 to be off-line $C% of the time, th.ts has a far greater in;act on reserve ca;a- ,

y 8 .l city than would be the impact o# veral smaller units (having a combined f i

capacity of a;;rezimately 1150 r') ' N- - - - t---- n heit.g off-linet it may

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,, e m be assumed that the of a}11, the smaller units being off-line at p gp once is far less than $C%. ,

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.. no 3oard shoudd nquire appli ant to re-suhnis anygapa which may be I s: ..SEP 181873 > di i em d *.a stemaou based on the hypothetical ca;acity facter of 3C#., including its cost-benefit i o ,i N 3 aa

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et j analysis 6nd cos;artsongts alternative energy sources. It is suggested )

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, that the figure of $Cf capacity factor veuld be a;;re;;iate, but petitiener

p has no objection to a;;1Acant developing a fisce based on a valid statistical 8

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analysis of acre recent data than that available to ;etitioner, ;revided that

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such data and analysis be made availabi to ;etitioner fer petitioner's l l . l 1

j analysis and comment.

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