ML20151T457

Applicant Response to Order of 880413.* Quality & Safety of Operations,Maint or Const Has Not Been Compromised in Any Manner by Loss & Replacement of 11 Vendors,Ceasing to Do Business W/Project.Certificate of Svc Encl

ML20151T457
Person / Time
Site:	Seabrook
Issue date:	04/22/1988
From:	Dignan T PUBLIC SERVICE CO. OF NEW HAMPSHIRE, ROPES & GRAY
To:
References
CON-#288-6149 OL-1, NUDOCS 8804290028
Download: ML20151T457 (7)

Text

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'l DOCKETED Apr1@P22, 1988 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION ,88 NH 25 P5 :57 before the OFFICE w IU NL '

00CKEithG4 M4Vi F ATOMIC SAFETY AND LICENSING APPEAL BOARD BRANC*i

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In the Matter of )

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PUBLIC SERVICE COMPANY ) Docket Nos. 50-443-OL-1 OF NEW HAMPSHIRE, EI AL. ) 50-444-OL-1

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(Seabrook Station, Units 1 ) (Onsite Emergency and 2) ) Planning and Safety

) Issues)

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APPLICANTS' RESPONSE TO ORDER OF APRIL 13, 1988 On April 13, 1988, this Appeal Board issued an order directing the Applicants to inform the Board as to the status of the monthly payments from Public Service Company of New Hampshire (PSNH) to the Seabrook Project.

Since the filing for protection under Chapter 11 of the U.S.

Bankruptcy Code by PSNH on January 28, 1988, PSNH has made all monthly payments to the Seabrook Project. These include the payments for February, March, and April. The May payment, we are advised, is due on May 2, 1988, and we are further advised by the 1

General Counsel of PSNH, that PSNH has the necessary funds and fully expects to make that payment.

No direct action has been taken in the Bankruptcy proceedings to stop the payments to the Seabrook Project as of this date. As the Board is aware, the creditors' committee has passed a resolution supporting "the continued payments as 8804290028 880422 DR ADOCK05000g3 y

e projected of [PSNH's) allocable share of costs of the Seabrook project . . . absent any material and adverse change in circumstances." The third mortgage bond holders of PSNH at one point petitioned the bankruptcy court for certain discovery, which discovery could be viewed as a prelude to seeking a cut off of Seabrook payments. This effort was rejected by the court as premature.

As to the rationale for the payments continuing: PSNH is under an obligation to make the payments by virtue of the joint ownership agreement. Seabrook remains the major asset of FSNH, and the only likely source of sufficient funds to enable the payment of all or substantially all of the unsecured claims against the estate. In addition, we are advised that PSNH believes that the power from Seabrook is necessary in order that PSNH will be able to continue to meet its power needs in the early 1990s.

As to the actions of other joint owners: We respectfully refer the Board to "Other Seabrook Participants" at pages 5 - 6 of the Form 10-K filed by PSNH with the United States Securities and Exchange Commission under date of March 30, 1988. A copy of this section is attached hereto and marked "A."

All bills have been, or are being, paid oxcept that 35%

(PSNH's aliquot share) of invoices for services rendered and goods received before the filing with the Bankruptcy Court (but l not paid as of that date) have been held up, pending Bankruptcy Court approval of disbursement of these moneys, which are already l

2 l

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l In addition, 35% of in the hands of the disbursing agent.

certain post petition payments for certain consultants and professionals are being withheld pending bankruptcy court approval. These funds also are in the hands of the disbursing agent. The withholding of the two 35% amounts described above has resulted in eleven vendors ceasing to do business with the l

project as a matter of choice. These vendors have been replaced.

The quality and safety of operations, maintenence or construction has not been compromised in any manner by the loss and replacement of these eleven vendors.

Respectfully submitted, JW Thomas W. Tignan, Jr.

George H. Lewald Kathryn A. Selleck Ropes & Gray 225 Franklin Street Boston, MA 02110 (617) 423-6100 Counsel for Anolicants 3

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Other Seabrook Participants. Other Seabrook Joint Owners subject to the jurisdictico of regulatory authorttie New Haropshire, Connecticut, Vermoot and Massachusetts, and the Federal Energy Regulatory Commismoa ("FERC'),

have been or are presently involved in proceediags in e ochjunsdiction teg atding the Se abrook Plant includio g p regarding the prudence of eranagement of design and construction of the Plant. The Company cannot predict the outcome of these proceedings.

W' ~e the Massachusetts Municipal Wholesale Electric Company ("MMWEC") has from time to time enerienced difSenny in secunag Massachusetts regnimory approval for its long-<erm financing for the Seabrook Plant and has also been the subject of lawsuits by certano ofits members designed to invalidate certain take-or-pay power contracts related to the Seabrook Plant and to withboid payments under those contracts, these regulatory problems and lawsuits han not affected MMWBC's cane ===d payment ofits share of Seabrook Plant costs. However, MMWEC has noti 6ed the Joint Owners that, by the end of 1938,its abstity to continue payment ofitr share of Setbrook P!not costs will be dependent upon approval by the Maaaachnaatts Department of Pubile Utilities of a funber Anaar'ng of approximately $ 100 millico. Certain eatities, with which MMWEC has purchased power contracts obligaang the payment of Seabrook Plant costs, including Eastem Maine Electric Cooperative, Inc., which has filed for protection under the Federal Banimrptcy Code, have discoatinued payment of their share of ruch cosu to MMWEC. MMWEC has instituted litigation against two of these entines seeking, among other things, the resumpoon of such payments to it under the purchased power contracts.

Since Febra ary 1986, the Vermont Electnc Gene racon and Transmission Cooperatin,Inc. ("Vermont Cooperatin"),

which holds an approx 1mase 0.4% ownership interest in the Seabrook Plant, has discoonnued payment ofits share of the Seabrook Plant costs, as well as its payments as a member of MMWEC, Certen Joint Owners, including the Company, have since then been providing funds against future paymenu due from Vermont Cooperative to assure that funds are available to meet the Vermont Cooperanve's share and it is anacapated that these arrangements will cnarinna In January 1988, the New Hampsnire Electne Cooperanve, Inc. ("NHEC"), which holds an approximate 2.2% own.

ership interest in the Seabrook Plant notified the otherloint Owners that it was suspendtng pannent ofits sbare of Seabrook Plant cosu.Two Jomt Owners have since then been provid:n3 fundsforthe NHECs share of Seabrook Plant cosu on a similar basis to that for the Vermont Cooperanve. The NHEC has also annouoced that it bas defaulted on papnenu of pnncipal and interest oo its loans with the Rural Electn6 cation Admintstation ("REA") and has begun discussions with the REA regarding a restructunog of its debt.

EUA Power Corporation the bolder of an approximate 12.1% ownership interest and a subsidiary of Eastem Uttlities Associates ("EUA"), has noufied the Joint Owners tbs it wtil not have suf6cient funds to m ake the cash interest pannents due in May to the holders of cmain debt secunties issued to Anarn its share of ongoing Seabrook Plant cosu, absent successful completion of nesoccoes with such bolders for modiScations to the pannent terms of such secunnes. EUA has indicated that it also intetais to seek re gulaten approval for the issuance of secunnes by EUA Power Corpornuon. the proceeds of wbich will enable EUA Powsr Corporation to meet its share of future Seabrook Plant cosu.

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DOLKEILD CERTIFICATE OF SERVICE UitFC I, Thomas G. Dignan, Jr., one of the attorneys for the Applicants herein, hereby certify that on April 22, 198@$ IMH 25 P5 :57 made service of the within document by depositing copies thereof with Federal Express, prepaid, for delivery to g i n, .

where indicated, by depositing in the United States maik( g.c _OCdfiINO 'R"VIC first class, postage paid, addressed to): BHANCH Alan S. Rosenthal, Chairman Howard A. Wilber Atomic Safety and Licensing Atomic Safety and Licensing Appeal Panel Appeal Panel U. S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission East West Towers Building East West Towers Building 4350 East West Highway 4350 East West Highway Bethesda, MD 20814 Bethesda, MD 20814 Thomas S. Moore Mr. Ed Thomas Atomic Safety and Licensing FEMA, Region I Appeal Panel 442 John W. McCormack Post U.S. Nuclear Regulatory Office and Court House Commission Post Office Square East West Towers Building Boston, MA 02109 4350 East West Highway Bethesda, MD 20814 Administrative Judge Sheldon J. Robert Carrigg, Chairman Wolfe, Esquire, Chairman Board of Selectmen Atomic Safety and Licensing Town Office Board Panel Atlantic Avenue U.S. Nuclear Regulatory North Hampton, NH 03862 Commission East West Towers Building 4350 East West Highway Bethesda, MD 20814 Judge Emmeth A. Luebke Diane Curran, Esquire Atomic Safety and Licensing Andrea C. Ferster, Esquire Board Panel Harmon & Weiss 5500 Friendship Boulevard Suite 430 Apartment 1923N 2001 S Street, N.W.

Chevy Chase, MD 20815 Washington, DC 20009 pr. Jerry Harbour Stephen E. Merrill, Esquire Atomic Safety and Licensing Attorney General Board Panel George Dana Bisbee, Esquire 4 U.S. Nuclear Regulatory Assistant Attorney General Commission Office of the Attorney General East West Towers Building 25 Capitol Street 4350 East West Highway Concord, NH 03301-6397 Bethesda, MD 20814

Adjudicatory File Atomic Safety and Licensing Sherwin E. Turk, Esquire Board Panel Docket (2 copies) Office of General Counsel U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission East West Towers Building One White Flint North, 15th Fl.

4350 East West Highway 11555 Rockville Pike Bethesda, MD 20814 Rockville, MD 20852

• Atomic Safety and Licensing Robert A. Backus, Esquire Appeal Board Panel Backus, Meyer & Solomon U.S. Nuclear Regulatory 116 Lowell Street Commission P.O. Box 516 Washington, DC 20555 Manchester, NH 03105 Philip Ahrens, Esquire Mr. J. P. Nadeau Assistant Attorney General Selectmen's Office Department of the Attorney 10 Central Road General Rye, NH 03870 Augusta, ME 04333 Paul McEachern, Esquire Carol S. Sneider, Esquire Matthew T. Brock, Esquire Assistant Attorney General Shaines & McEachern Department of the Attorney 25 Maplewood Avenue General P.O. Box 360 One Ashburton Place, 19th Flr.

Portsmouth, NH 038^1 Boston, MA 02108 Mrs. Sandra Gavutis Mr. Calvin A. Canney Chairman, Board of Selectmen City Manager RFD 1 - Box 1154 City Hall Route 107 126 Daniel Street Kensington, NH 03827 Portsmouth, NH 03801

• Senator Gordon J. Humphrey R. Scott Hill-Whilton, Esquire U.S. Senate Lagoulis, Clark, Hill-Washington, DC 20510 Whilton & McGuire (Attn: Tom Burack) 79 State Street Newburyport, MA 01950

• Senator Gordon J. Humphrey Mr. Peter S. Matthews One Eagle Square, Suite 507 Mayor l Concord, NH 03301 City Hall (Attn: Herb Boynton) Newburyport, MA 01950 Mr. Thomas F. Powers, III Mr. William S. Lord Town Manager Board of Selectmen Town of Exeter Town Hall - Friend Street 10 Front Street Amesbury, MA 01913 Exeter, NH 03833

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H. Joseph Flynn, Esquire Brentwood Board of Selectmen Office of General Counsel RFD Dalton Road Federal Emergency Management Brentwood, NH 03833 Agency 500 C Street, S.W.

Washington, DC 20472 Gary W. Holmes, Esquire Richard A. Hampe, Esquire Holmes & Ells Hampe and McNicholas 47 Winnacunnet Road 35 Pleasant Street Hampton, NH 03841 Concord, NH 03301 Judith H. Mizner, Esquire Charles P. Graham, Esquire 79 State Street, 2nd Floor Murphy and Graham Newburyport, MA 01950 33 Iow Street Newburyport, MA 01950 2"

5'homas G. ettfiian, Jr.

(*=U.S. First Class Mail.)

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