ML20148D933

Expresses Concern Re Sale of Facility.Action Will Strengthen Duke Power Co Monopoly

ML20148D933
Person / Time
Site:	Catawba
Issue date:	10/04/1980
From:	Eddleman W AFFILIATION NOT ASSIGNED
To:	Office of Nuclear Reactor Regulation
References
NUDOCS 8010100358
Download: ML20148D933 (4)

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l Rt. 1 Box 383 l Durham nc ;'705 h October 1980 ~

1 Chief .

Utility Finance Brunen flRR h-@3 USN?C dashingten De 20555 ,

Dear. Branch Chior,

'As a person served with electbicity through one of the North Carolina. EMCs involved in the. Duke Power Catswba 1 nuclear scation sale, I am writing to oppose this sale because. it will strengthen Duke's monopolistic position'with respect to 'the 'D:Cs involved, at least for the next'14. years, and quite possibly mucn longer.

Thia is so because Duke Power Co. owns three existing baseland power planta canable of' meeting the entire baseload ' needs in Duke 's

-servic3 area (EMCs' and cities included) of under k000 Yd, PLUS an. ',

additional 2660 Yd. At Duke's currently projected growth rate of around h;i ner year in peak load, with base at around 40% of peak la it has been on tho Duke system recently, it will be the early 1990s before thece.cxisting baseload plants are fully required to neet bace loads in the Duke service a~ea. And if the real, weather-corrected growtn rates of Duke Power load since 1973 are used (under 3% growth ,

in sales per year, a bit over 3% for summer peaks, less tnan 3% per year far winter peaks), we find tne existing base capacity wcn't be in full use until later. And-if energy conservation continues to improve, aa it did when Duke recently "found" 1h00 M'4 of load management to be avallable by the late '30s, over and above its previous load management goal of over 1700 TJ, the situation for baseload power needs will be I

_even lower, even long a until the exieting plants are fully utilited. g "he difficulty with buying into the Catawba nuclear station is 9g THIS DOCUMENT CONTAINS 8010100.3 5 E H POOR QUAllTY PAGES

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~2-that the rapidly escalating capital costs of Catawba give'little hope .

-tnat its busbar electricity costs will ever be-as low as those of' Duke's existing Oconee, Belews Creek and Marshall plants. Meanwhile, Duke is trying to-comulete its McGuire nuclear station, 2360 MW total power, which will certainly cost less to complete than Catauba, given the olants' similar design and the_ fact that Catawba has cooling towers.

Uhus, beyond the existing plants, Duke plans over 2300 MW of baseload nuclear power in- the near future, all of which will be cheaper than Catawba's output. That 2300 MW of power will supoly at least another 10 years ' growth in electric power use (base load) on the Duke system and its wholesale custoners' systems.

Thia will bring us into the first of second decade of the 21st

'l century before there would be any need in thf.s area for the power Catawba might produce -- almost time for' Catawba to be de-commissioned on its current schedule. Post- Three Mile Island safety refits on both McGuire I

and Catawba Will further boost their power production costs (via higher y canital costs), naking Catawba electricity the most expensive power availablo in the Duke service area.

Allowing Duke to sell this expensive power source to customers

'<ho obviously won't need their share of its capacity until about the year 2000, while Duke retains all the cheaper.baseload power sources, will greatly strengtnen Duke 's nonopolistic advantages in the wholesale power market. Duke will have surplus cheaper power to sell from now until.at least the year 2000, if not 2010 or beyond, while the co-ops are stuck with the most expensive baseload source around, not to mendon hl 6her trans.aission costs since most of the co-op customers are farther from Catawba than from one of the existing Duke base stations.(Coonee, Selews Creek und Marshall). And should load growth on the EMCs fall below F% per year, a distinct possibility in view of sheir minimal industrial load and low saturation for electric heating, 7 uke 's advantage would grow' even greater ein the 1990a as the coops are stuck with large

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• l surpluses of. expensive baseload pouor. ,

(All time eatinates and growth  ;

figures in .this paragraph supplied by REA and NCEMC: $$' growth on l > UCEMC ' Duke customers would mean they'd require about their 610 FN share of Catawba output adjusted for 5.5% transmission loss, in the year 1996. ' Given the uncertainties . of load forecasting for much shorter times, 1973 i: such as Duke's projected peaks around 15000 MW for summer 1980, when the actual was 10,350 MW, you can see how the lower-growth situation can readily materialize.)

One"further reservation: If the EMCs in fact buy a shar'e in Catawba 1, are they in effect writing Duke a blank check to pay for .

the post-TMI refits for that nuclear unit? There is no way to estimate

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these costs at present, but given the howls from the nuclear indus try sacking to avoid suen refits, they are sure to be high. If the Catawba 1 contract contains the same sort of language the C tawba 2 sale did, that the costs must be paid "begardless of the comple. tion or operational status of the plant", that language 1~s a bailout by the EMCs for Duke

?ower in the event of any refits, or other difficulties w* th Catawba 1.

The EMCs, with small assets, are not capable of bailing out Duke Power without outrageous hardship to the EMCa' owner-custcmers. Sticking

ustomers outside the Duke system with the Catawba cost overruns would,

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.obviously, . even further strengthen Duke's position as a cheater source af electri. city for new homes, business and industry'. The EMCs are already at a disadvantage since Duke generally offers industry lower rates than the EMCs can offer industry diven Duke 's wholesale prices to the EMCs. 1 It has been alleged, further, that Catawba pu" chase would save l the EMCs in the long run because of the higher cos ts of future Duke i

cons tructi;n beyond Catawba, such as Cherokee and ?erkins and 3 l I

undesignated nuclear uni.ta. The undecignated units were effectively cancelled by 'the Dcks directors ' decision 1 to build no more nuclear 71 ants.

?erkins is delayed indofinitely, Land all conssruction at Cherokee has been stopped also. Carl Horn, 'Jr. , Duke 's chairman of the board, sas

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'huoted recently as saying' Duke would prefer to complete only those plants now under construction (McGuire and Catawba) and build no more. Thus,.

. the argument that future Duke nuclear construction would raise Duke's.

averageicosts and make Catawba economical some time in the 1990a is pare speculation, because. Duke is not actually constructing any of the. plants,they had planned beyond Catawba.

The obvious alternatives for the EMCs are te either do nothing, and takefadvantagelof Duke average baseload power costs which will be VI -lower; than Catauba's power costs for at least the next 15 years, if not'the whole lifetime of the Catawba plant as seems likely; or te pursue a program of constructtrg smaller power plants fueled by peat, wood, refuse, hydro or other sources. tais11atter program would entall a no enormous carital'conmitnents such as Catawba or any nuclear station

'does. If 1 sad growth changed, the small planca under construction could be more readily delayed or cancelled. Cnce the Co-ors buy Catawba, they'd be stuck with the whole share they bought.  ::o coll-back agreenent with Duke could avoid the eventual result that the higher ecc'a of Catawba (including "C refits?) would be passed on to the FMC customers.

Thus the effect of the IMCs buying Catawba woe.1d be to reduce competition in baseload power sales, reduce competition to Duke Power

,- from alternative energz sources the EMCs might develop (e.g. under

7790 's small-producer and co-generator guidelines under sec tic.; 210 of

-he ?ublic Utility Regulatory ?olicies Act)', and raise cocts to the IMC customer-owners. This is not in the oublic interest,'nor in the EXCs' 7 interests, and I hope the Justi'ce Departnent and the N7C will act to s top this sale. '

p/', [ [ p Wells Eadlenan Energy Consultant s-6 I

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