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1 004746C178 06/27/78 TLX CONSPOWER JKN CGBA 1 JACKSON MICH 6/27/78 h
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NUCLEAR REGULATORY COMMIS$10N (NRC)
FORMERLY US ATOMIC ENERGY COMMISSION ATTI MR JAN STRASMA i
799 ROOSEVELT ROAD GLEN ELLYN, IL 60137
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i MIDLAND, MICH, JUNE 27 -- CONSUMERS POWER COMPANY AND DOW CHEMICAL COMPANY TODAY ANNOUNCED THE SIGNING OF RENEGOT'!ATED CONTRACTS FOR THE SUPPLY TO DOW OF STEAM FROM THE UTILITYl3 MIDLAND NUCLEAR PLANT AND ELECTRICITY FROM THE POWER COMPANYl5 ELECTRIC SYSTEM.
THE AGREEMENT UPDATES AND SUPERCEDES CONTRQCTS ORIGINALLY S!GNED IN 1967 AND IN 1974 TENTATIVE AGREEMENT ON THE NEW CONTRACTS HAD BEEN ANNOUNCED JUNE 9 THE 51.67 BILLION MIDLAND PLANT IS BEING BUILT DIRECTLY ACROSS THE TITTABAWASSEE RIVER FROM DOWIS MIDLAND CHEMICAL PLANT COMPLEX.
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NUCLEAR PLANT IS ABOUT 50 PERCENT COMPLETE.
THE TWO= UNIT PLANT WILL PRODUCE 1,300,000 KILOWATTS OF ELECTRICITY FROM THE UTILITYl3 ELECTRIC CUSTOMERS AND UP TO FOUR MILLION POUNDS OF PROCESS STEAM
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PER HOUR FOR DOW.
ONE UNIT OF THE PLANT !$ SCHEDULED TO BEGIN OPERATION IN 1981 AND THE SECOND IN 1982 STEAM AND ELECTRIC SERVICE TO DOW UNDER THESE 9
CONTRACTS WILL BEGIN UPON COMPLET!0N d? THE SECOND UNIT.
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THE MIDLAND PLANT WILL BE THE WORLDIS FIRST COMMERCIAL =S! ZED DUAL =
l PURPOSE NUCLEAR PLANT.
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BOTH PAUL OREFFICE, PRESIDENT AND CHIEF EXECUTIVE OFFICER OF DOW, 3
AND JOHN D SELBY, PRESIDENT AND CHIEF EXECUTIVE OFFICER OF CONSUMERS POWER, EXPRESSED PLEASURE AT THE CONCLUSION OF THE CON.
9 TRACT.
EACH OFFICIAL SAID THAT THE COMPAN!ES HAD NEGCT!ATED A FAIR 3
AND EQUITABLE CONTRACT WHICH WOULD BE EASY TO ADMINISTER, 8508280061 850712 t
HIGHLIGHTS OF THE AGREEMENT ARE:
gN8 256 PDR THE INITIAL TERM OF THE STEAM CONTRACT IS FOR 35 YEARS,
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AND MAY BE EXTENDED AT DOWIS OPTION YEAR TO YEAR THEREAFTER.
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ANY DISPUTES CONCERNING BREACH OF THE OLD AGREEMENTS HAVE BEEN 9
E4 DISCHARGED BY THE NEW CONTRACT g7g 00N 5
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TO REPLY BY MAILGRAM SEE REVERSE SIDE FOR WESTERN UNION'S TOLL FREE PHONE NUMBERS
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3 CONSUMERS POWER HAS THE OPTION TO SELL A PORTION OF THE MIDLAND
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PLANT TO THIRD PARTIES.
DISCUS $10NS REGARDING PARTIAL OWNERSHIP
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IN THE ELECTRICAL PORTION OF THE FACILITY ARE BEING HELD BY dp CONSUMERS POWER AND A NUMBER OF HICHIGAN MUNICIPAL AND C00PERA.
TIVE UTILITIES,
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3 DOW HAS THE FLEXIBILITY TO USE THE STEAM AT !TS MIDLAND MANU=
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FACTURING COMPLEX IN ANY WAY IT CHOOSES WITH NO LIMITATION 8
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7 ACCORDING TO THE CONTRACT, 00h WILL PAY FOR STEAM ON A MONTHLY BASIS AND THE CHARGES TO DOW WILL REFLECT A COMBINATION OF THE COSTS OF
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EQUIPMENT TO SUPPLY STEAM TO DOW, A REASONABLE RATE OF RETURN ON CONSUMERS POWER COMPANYl3 INVESTMENT IN THIS EQU!PMENT, AND 00WIS SHARE OF OPERATING COSTS,
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3 CONSUMERS POWER EXPECTS TO BEGIN SUPPLYING STEAM TO DOW IN THE SPRING OF 1982 HOWEVER, IF FOR ANY REASON STEAM !$ NOT PROVIDED BY
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DECEMBER 31, 1984, DOW HAS THE OPTION OF WITHDRAWING FROM THE CON =
e TRACT BY PAYING A PORTION OF THE COSTS OF THE FACILITIES INSTALLED TO SUPPLY DOW WITH STEAM.
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COMMENTING ON THE AGREEMENT, OREFFICE SAID "THIS CONTRACT REPRESENTS A $1GNIFICANT STEP FORWARD IN RESOLVING UNCERTAINTY ABOUT ENERGY AND g
AIR OUALITY ISSUES AT DUR MIDLAND PRODUCTION PLANTS, AND THE AGREE.
e HENT SERVES THE PUBLIC INTEREST WELL.
IT REPLACES CONTRACTS WHICH NEITHER $!DE HAS BEEN HAPPY WITH BECAUSE OF ALL THE CHANGING CIRCUM =
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STANCES OF RECENT YEARS IN THE ENERGY AREA."
e SELBY SAID "NOW THAT WE HAVE COMPLETED THESE DELIBERATIONS, THE MAN =
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AGEMENT OF CONSUMERS POWER WILL FOCUS !TS ATTENTION ON COMPLETING cp THE MIDLAND UNITS AND OBTAINING OPERATING LICENSES.
WE EXPECT THAT ANY PUBLIC OR GOVERNMENT INVOLVEMENT IN THAT LICENSING PROCESS WILL
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PLACE PRIMARY CCONSIDERATION ON THE ECONOMIC AND ENVIRONMENTAL BENE.
FITS TO THE GREATER HIDLAND AREA AND TO THE STATE OF MICHIGAN THAT
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WILL RESULT BY PUTTING THIS PLANT INTO OPERATION ON SCHEDULE."
CD THE AGREEMENT CONCLUDES SEVEN MONTHS OF NEGOTIATIONS WHICH BEGAN
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LAST NOVEMBER 2 THE RENEGOTIATIONS BEGAN AFTER EXECUTIVES OF THE dp TWO COMPANIES MET AND AGREED THAT THE CONTRACTS NEEDED TO BE UPDATED TO REFLECT NEa CONDITIONS THAT HAVE OCCURRED SINCE 1974 THE NEW 4
CONDITIONS INCLUDE CHANGING NEEDS OF BOTH PARTIES, PLANT DESIGN O
CHANGES, AND SCHEDULING CHANGES.
O NEGOTIATIONS WERE CONDUCTED BY THREE= MAN TEAMS FROM EACH FIRM.
HEADING THE DOW DELEGATION WAS D. DICK DE LINE, MANUFACTUR!NG HANAGER OF THE MICHIGAN DIVISION, DOW CHEMICAL USA.
THE CONSUMERS POWER y()
NEGOTIATORS WERE LED BY STEPHEN H HOWELL, THE UTILITYl8 V!CE 4)
PRESIDENT = PROJECTS, ENGINEERING AND CONSTRUCTION.
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END TU Cw E
TO REPLY BY MAILGRAM. SEE REVERSE SIDE FOR WESTERN UNION'S TOLL - FREE PHONE NUMBERS 4
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