ML20147D468

Requests Addl Info to Complete Reeval of Appl'S Financial Capability Re Proposal to Increase Ownership Participation & Addl Info for Eval of Financial Capability of Proposed New Owners.Response Requested by 781101

ML20147D468
Person / Time
Site:	Seabrook
Issue date:	10/04/1978
From:	Varga S Office of Nuclear Reactor Regulation
To:	Tallman W PUBLIC SERVICE CO. OF NEW HAMPSHIRE
References
NUDOCS 7810140079
Download: ML20147D468 (11)

Text

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g g UNITED STATES NUCLEAR REGULATORY COMMisslON W ASHINGTON, D. C. 20555 o 8

\**,l<*/ October 4, 1978 Docket Nos. 50-443 50-444 Mr. W. C. Tallman, President Public Service Company of New Hampshire 1000 Elm Street Manchester, New Hampshire 03105

SUBJECT:

REQUEST FOR ADDITIONAL FINANCIAL INFORMATION, SEABROOK STATION UNITS 1 AND 2 By letter of May 15, 1978, from Public Service Company of New Hampshire, the applicants amended the License Application filed on March 30, 1973 and requested Commission approval of the partial transfers of the Construction Permits for Seabrook Station, Units 1 and 2. To complete our reevaluation of the financial capability of applicants proposing to increase their ownership participation and our initial evaluation of the financial capability of proposed new owners, we need the additional information requested in the enclosure. The requested information should be provided by November 1,1978. If you cannot meet that date, please advise us of an alternate date by when the requested information will be provided.

Sincerely, b

3Ay teven I. <rga&A

, Chiq A Light Water Reactors B nch 4 Division of Project Management

Enclosure:

Request for Additional Financial Information cc: Listed on following page l S @l&@p79 1

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Public Service Company of New Hampshire l

ces:

John A. Ritscher, Esq.

Ropes and Gray 225 Franklin Street Boston, Massachusetts 02110 Ralph H. Wood, Esq.

General Counsel Public Service Company of New Harrpshire 1000 Elm Street Manchester, New Hampshire 03105 Mr. John Haseltine, Project Manager Yankee Atomic Electric Company 20 Turnpike Road Westboro, Massachusetts 01581 Mr. BnJce B. Beckley, Project Manager Public Service Company of New Hampshire 1000 Elm Street Manchester, New Hampshire 03105 Ms. Elizabeth H. Weinhold  !.

Bradstreet Road Hampton, New Hampshire 03842 Robert A. Backus, Esq.

O'Neill, Backus, Spielman & Little 116 Lowell Street  !

Manchester, New Hampshire 03105  :

i Norman Ross, Esq. *  !

30 Francis Street Brookline, Massachusetts 02146 '

Karin P. Sheldon, Esq.

Sheldon, Harmon and Roisman 102515th Street, N. W. '

Washington, D. C. 20005 Ellyn R. Weiss, Esq.

l Sheldon, Harmon and Roisman 102515th Street, N. W.

Washington, D. C. 20005 Laurie Burt, Esq.

Office of the Assistant Attorney General Environmental Protection Division One Ashburton Place Boston, Massachusetts 02111 '

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Public Service Company of New Hampshire ,

ces (continued)

Samuel Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D. C. 20555 (Board Notification)

Alan S. Rosenthal, Esq.

Atomic Safety and Licensing Appeal Board U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Dr. John H. Buck Atomic Safety and Licensing Appeal Board U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Michael C. Farrar, Esq.

Atomic Saf ety and Licensing Appeal Board U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Ivan W. Smith, Esq.

Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Dr. Ernest Salo, Professor

• Fisheries Research Institute - WH-10 College of Fisheries University of Washington Seattle, Washington 98195 Dr. Marvin M..Mann Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D. C. 20555 l

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ENCLOSURE SEABROOK STATION, UNITS 1 AND 2 DOCKET NOS. 50-443 & 50-444 REQUEST FOR ADDITIONAL FINANCIAL INFORMATION Responses to each of the information items should be provided for each owner and proposed owner if the applicable code letter, i.e., A, B, or C from the following list, is shown in the parenthesis following the information number.

A. Investor-Owned Applicants Montaup Electric Company New Bedford Gas & Edison Light Company Vermont Electric Power Co.

Maine Public Service Company Bangor Hydro-Electric Company B. Municipal and Governmental Applicants '

Town of Hudson, Massachusetts, Light and Power Department l Massachusetts Municipal Wholesale Electric Company Taunton Municipal Lighting Plant Commission C. Cooperatives Vermont Electric Cooperative, Inc.

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REQUEST FOR ADDIT _IONAL FINANCIAL INFORMATION SEABROOK STATION, UNIT N05.1 A 2 1 (A B.C) Provide copies of the joint ownership agreement (contract) among .the applicants. The staff will later require copies of the agreement 6fter it is executed. The executed agreement must necessarily be in sub- '

stantial conformity with the agreement previously approved.

Provide a detailed explanation of the provision governing progress pay-ments to be made to the main applicant by each additional participant for its share of all costs of design and construction of Seabrook Station Units 1 and 2. This may be accomplished by reference to pertinent portions of the joint ownership agreement.

2 Provide the following information for each applicant:

a(A) Complete the attached schedule entitled, " Sources of Funds for System-Wide Construction Expenditures During the Period of Construction of Subject Nuclear Power Plant," through the years of earliest estimated completion of Unit Nos 1 and 2. Indicate the c ssumptions upon which the

" Sources of Funds" statement is based. These assumptions include, but ,.

are not necessarily limited to: (a) rate of return on average common stock equity; (b) preferred stock dividend rate; (c) long-term and short- 2 term debt interest rates; (d) market / book ratio with respect to the pro-jected common stock offerings; (e) common stock dividend payout ratio; (f) target and year by year capital structure; (g) resultant SEC and __

indenture interest coverages during each year of the period of construction; and (h) annual growth rate in kWh sales and price per kWh. Provide a brief explanation of the basis for each assumption.

If nuclear fuel for the facility is to be acquired by lease or other arrangement than purchase, briefly describe the terms of the lease or --

other arrangement. -

b(A) Indicate the percentage ownership in the facility and ad difference between this and the participant's percentage entitlement to the electrical capacity and output of the units. Explain the reason for '

the difference, if any.

lc(A) Provide copies of the 1977 Report to Stockholders, copies of the prespectus for the Company's most recent security issue and copies of the most recent 1

SEC Form 10-K. Provide copies of the preliminary prospectus for any pending security issue. Continue to submit copies of the Annual Report J for each year thereafter as required by 10 CFR S0.71(b).

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d (A) Provide copies of the most recent Officer's Certificete or Net Earnings Certificate prepared in conjunction with the issuance of mortgage bonds or debentures and showing interest coverage calculations using the tests set forth in the applicable indenture. Explain bondable property addition pr visions as they relate to restrictions on the issuance of new long-term cebt. Provide copies of the portions of the indenture relating to interest coverage tests or alternative earnings tests and bondable property additions. Provide calculations of net earnings and interest coverage for the most recent 12-month period using the definitions of net earnings and annual interest requirements (on debt presently outstanding) using the most restrictive test set forth in the mortgage bond indenture.

Assuming a range of interest rates considered redistic by the utility, state the additional amount of first mortgage bonds which could be issued under the most restrictive test based on net earnings as defined by the indenture for the most recent 12-month period.

e (A)

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If the corporate charter contains a preferred stock coverage requirement, provide copies of that portion of the charter. Assuming a range of dividend yields considered realistic by the utility, state the additional amount of preferred stock that could be issued by applying the most restrictive test for preferred dividend coverage for the most recent 12-month period.

f (A) Prnvide a detailed explar.ation of all other restrictions or constraints on the issuance of short and long-term debt, preferred stock, preference stock and common stock. Short-term debt should include bank lines of credit and commercial paper, if any. Indicate compensating balance require-ments for bank loans.

g (A) Describe the nature and am e of the Company's most recent rate relief action and the anticipated effect on revenues. Provide copies of the rate .

order and opinion. In addia. ion, indicate the nature and amount of any '

pending rate relief action (s). Use the attach . fonn to provide this  ;

information. Provide copies of the submitted, financially-related testimony and exhibits of the staff.and company in the most recent 1-'e relief action or pending rate relief request.

Describe aspects of the Company's regulatory environment including, but not necessarily limited to, the following: prescribed treatment of allowance for funds used during construction and of construction work in progress (indicate percentage and amount includea in rate base); form of rate base (original cost, fair value, other); accourting for deferred l income taxes and investment tax credits; and fuel adjustment clauses in effect or proposet.

h(A) Provide a list of generating units, transmission and distribution facilities and general plant projects to be constructed during the period of construction of the subject nuclear power plant, showing the type of facility, net capacity of each generati.19 unit, the dollar amounts to be expended for each facility during each of the years involved, and in-suvice date of each facility.

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.i(A) Complete the attached form entitled, " Financial Statistics" for the most recent 12-month period and for the years ending December 31, 1977 and December 31, 1976.

3(B) For each municipal and governmental applicant:

a. Provide a detailed statement of the projected sources of funds and respective dollar amounts for the esplicant's total contributions to the capital costs of Seabrook :tttion, Units 1 and 2. Include a detailed explanaticn of the assumptiens upon which the projc:,ted sources of funds are based.

b. If the applicant is to finance its ownership share with bonds, indicate the source of funds for payment of interest charges and principal.

c. Describe the nature, amount, rating, and success of the applicant's most recent revenue and general obligation bond sales. Indicate the current totel outstanding indebtedness in each category for each entity.

d. Provide copies of the most recent (December 1977 Annual and most recent six-month and 12-mostb) Financial Statements of the applicant.

e. Is each participant's fercentage ownership share in the facility equal to its percentage entitlement in the electrical capacity and output of l the plant? If not, explain the difference (s) and any resultant effect ,

on any participant's obligation to provide its share of design and construction costs.

f. Describe the rate-setting authority of the applicant and how that authority may be used to ensure the satisfaction of financial obligations under the Purchase and Ownership Participation Agreements for Siebrook Station.

4(C) For the cooperative applicant:

a. Indicate the percentage ownership in the facility and any difference between this and the cooperative's percentage entitlement to the electrical capacity and output of the units. Explain the reason for the difference if any.

b. Provide a detailed statement of the projected sources of funds and respective dollar amounts for the cooperative participant's total contribution to the subject project. Include a detailed explanation of the assumptions upon which the projected sources of funds are based.

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c. Indicate the amounts of the respective dollar payments to be made by the cooperative system participant upon execution of the ownership agreement. Provide estimates of the total additional payments to be made subsequent to the execution of the agreement and through completion of the units.

d. If financing is to be provided through REA guaranteed sources, the applicant must provide copies of favorable letters of intent from REA regarding the proposed REA loans. These must be provided prior to issuance of amendments to the construction permits. Indicate whether the REA has provided loans to the applicant in the past. jr Provide copies of excerpts from state statutes on which the cooperative is relying a: authority to incur debt and to take other actions necessary -

to acquire partial ownership of the subject facility.

e. Describe the rate-setting authority and rate covenants of the cooperative and how that authority will be used to ensure the satisfaction of financial obligations in relation to the design and construction of Seabrook Station, Units 1 and 2.

f. Provide copies of the December 1977 and the most recent twelve months financial statements and other relevant financial information.

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ATTACHMENT FOR ITEM NO. 2.g.

RATE DEVELOPMEliTS Electric Gas Steam Granted Test year utilized Annual amount of revenue increase requested-test year basis (000's)

Date petition filed -

Annual amount of revenue increase allowed-test year basis (000's)

Percent increase in revenues allowed Date of final order Effective date Rate base finding (000's)

Constructior work in progress ' included ih Rate base (000's)

Rate of return on rate base authorized Rate of return on common equit; authorized Revenue Effect (000's)

Amour.t received in year granted Amount received in subsequent year (If not available, annualize amounts received in year granted)

Pendinc aests Test yea utilized Amount (000's) .

Percent increase Date petit. ion filed Date by which decision must be issued Rate of return on rate base requested Rate of return on common equity requested Amount of rate base requested Amount of construction work in progress requested for inclusion in rate base 6

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ATTACINENT FOR ITEM NO. 2.1 FINANC1AL STATISTICS 12 months ended 1977 1976 (dollars in millions)

Earnings available to comon equity Average comon equity Rate of return on average,comon equity Times total interest earned before FIT:

Gross income (incl. AFDC) + current and deferred FIT + total interest charges +

amortization of debt discount and expense Times long-tenn interest earned before FIT:

Gross income (incl. AFDC) + current and deferred FIT + long-term interest charges

+ amortization of debt discount and expense Bond ratings (end of period)

Standard and Poor's Moody's Times interest and preferred dividends earned after FIT:

Gross income (incl. AFDC) + total interest charges + amortization of dabt discount and expense + preferred dividends AFUDC Net income after preferred dividends 3

Market price of comon Book value of comon Market-book ratio (end of period)*

Earnings avail, for comon less AFDC +

depreciation and amortization, deferred taxes, and invest. tax credit adjust.-

l deferred Comon dividends Ratio Short-term debt Bank loans Commercial paper Capitalization (Amount & Percant)

Long-term debt Preferred stock Comon equity CIf subsidiary company, use parent's data.

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