ML20197F789
| ML20197F789 | |
| Person / Time | |
|---|---|
| Site: | Satsop, Washington Public Power Supply System |
| Issue date: | 03/29/1982 |
| From: | Jenny Murray NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| References | |
| CON-WNP-1285 NUDOCS 8205120457 | |
| Download: ML20197F789 (7) | |
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i MEMORANDUM FOR:
Harold P,.
Denton, Director
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Office of Nuclear Reactor Regulation FR0ft:
James P. Murray Director and Chief Counsel Rulemaking and Enforcer.ent Division OELD
SUBJECT:
2.206 REQUEST TO REV0KE CONSTRUCTION PERftITS FOR WPPSS NUCLEAR PROJECTS 4 & 5 Attached is a petition filed under 10 CFP. 2.206 by the Coalition for Safe Power which requests issuance of an order to show cause why the construction remits for WPPSS Nuclear Project Units 4 and 5 shculd not be revoked. The Coalition believes that such action is appropriate, because WPPSS has decidcd to teminate the projects. You should note that NRR currently has for action another petition filed by the Coalition that requests revocation cf the WPPSS Unit 4 construction pemit on the basis of an alleged naterial false statenent.
Although you could grant the petition (and have granted a similar petitien to revoke the Tyrore construction pemit), no compelling reasons require you to take such ection at this time. WPPSS is apparently pursuing options to transfer the pemits and has expressed a desire to retain the pemits while it pursues a transfer or other temination options. Even though WPPSS does not intend to conplete the project, you do not have to issue an order to show cause at this instant, because ellowing the pemits to renain in effect does not raise a " substantial health or safety issue." See Northern Indiana Public Service Co. (Bailly Nuclear-1), 7 NRC 429, 433 (1978). WPPSS' decision to halt construction poses in itself no hazard to public CONTACT: Stephen Burns x27268 g--r : ;
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. heal.th and safety. */ In the absence of such hazards, you are well within your discretion to pemit WPPSS to pursue its various options.
Although the NRC has no interest in seeing that WPPSS salvages its investment in Units 4 & 5, there is no reason for us to obstruct WPPSS' efforts, particularly when no health and safety concerns are posed. You may deny, therefore, the 2.206 petition at this time. Your denial would have to be coupled with a denial, if that is appropriate, of the earlier 2.206 petition on WPPSS Unit 4.
You could postpone any action on the petition until WPPSS' plans are fim. Thus, you would be able to grant the petition if it became cicar at some future date that WPPSS had no realistic expectation of transferring the pemits and fomal temination of the pemits seemed appropriate.
Alternatively, you could deny the petition if WPPSS had a reasonable expectation of transferring the pemits (subject, of course, to 10 CFR 50.80 and related procedural requirements) and no other reasons warranted revocation. However, it may take a year or more for a clear picture to emerge. In the meantime, the petitioner might make repeated complaints for failure to act on the petition and even seek judicial review to compel action.
As part of your consideration of the petition, you could compel WPPSS under 10 CFR 50.54(f) to fomally explain its intentions and its reasons for retai6ing the construction pemits. A 50.54(f) le'tter would provide you the same infomation that an answer to an order to show cause would, but the 50.54(f) letter, unlike an order to show cause, has no risk of throwing the staff into litigation.
I would be happy to discuss these various options with yob and will assist your staff in developing an appropriate response to the petition.
In the meantime, you should acknowledge receipt of the
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Arguably, if WPPSS is able to transfer the pemits to another utility, some questions might be raised about the adequacy of construction in light of the project's abandonment by WPPSS (e.o.,
if QA records were not preserved). Such questions go, however, to the issue of whether the pemits should be transferred (and on what conditions) or whether the facility has been constructed properly such that construction may continue or an operating license may be granted. "Let the buyer beware" - i.e., the risk of such problems falls on any proposed transferee of the pemits, and you are not required to protect the transferee from such risks.
In all events, it appears from Attachment C to the Coaliticn's petition that WPPSS has taken steps to preserve plant equipment and records and Region V is monitoring WPPSS' activities in accordance with WPPSS' temination plans.
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3-petition. A draft acknowledgment letter to the petitioner and a draft Federal Register notice are enclosed for your use. If these drafts are not changed, they necd not be returned to me for fomel concurrence, but please assure that I receive a copy of the signed letters and that all other correspondence related to the petition receives my concurrence.
Please infom me whom your staff contact on this petition will be.
Jarres P. Hurray Director and Chief Counsel Ruleriaking and Enforcement Division, OELD cc:
D. Eisenhut, NRR R.Engelken,RV bec:
J. Gray, ELD S. Treby, ELD Distribution NRC Central ELD Rdr Rdg Subj 2.206 chron Murray chron Burns chron Cunningham Christenbury RH/KC/ SB/DF/AG n
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NRC FORM 318 flo 80) NRCM cao OFFICIAL RECORD COPY mam mi-au m
Docket Nos. 50-460 & 50-509 (10CFR2.206)
Nina Bell Coalition for Safe Power Suite 527 408 S.W. 2nd Portland, Oregon 97204
Dear Ms. Bell:
This letter is sent to acknowledge receipt of your petition under 10 CFR 2.206 on behalf of the Coalition for Safe Power which requests that I
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issue an order to show cause why the construction permits for the Washington Public Power Supply System's Nuclear Project Units 4 and 5 should not be revoked. Your petition is based upon WPPSS' recent decision to terminate the projects.
I am considering whether the relief you request is necessary or appropriate in light of the matters raised in yJur petition and other relevant information. As provided in 10 CFR 2.206, I Lw'ill infonn you within a reasonable time of my decision on your petition.
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. Enclosed for your information is a copy of a notice that is being referred to the Office of the Federal Register for publication.
Sincerely.
Harold R. Denton, Director Office of Nuclear Reactor Regulation cc w/ incoming:
Robert L.Ferguson Managing Director, WPPSS P.O. Box 968 Richland, WA 99352 Nicholas S. Reynolds, Esq.
Debevoise & Liberman 1200 Seventeenth St. N.W.
Washington, D.C. 20036 9
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NUCLEAR REGULATORY COMMISSION
[DocketNos. 50-460&50-509]
WASHINGTON PUBLIC POWER SUPPLY SYSTEM (WPPSS Nuclear Project No. 4 & 5)
Receipt of Petition Under 10 CFR 2.206 Notice is hereby given that by petition dated March 17, 1982, the Coalition for Safe Power, Portland Oregon, has requested pursuant to 10 CFR 2.206 that the Director of Nuclear Reactor Regulation order the Washington Power Supply System (WPPSS) to show cause why the construction permits for its Nuclear Project Nos. 4 and 5 should not be revoked. The Coalition believes such action is appropriate in view of WPPSS' decision to terminate construction of the projects. As provided in 10 CFR 2.206, appropriate action will be taken on the petition within a reasonable time.
Copies of the petition are available for public inspection in the Commission'spublicdocumentroomat1717HSfreet,N.W., Washington, C.C., and in the local public document rooms. a,t the Richland Public Library, Swift and Northgate Streets, Richland, WA 99352 and the W. H.
Abel Memorial Library,125 Main Street, South, Montesano, WA 98563.
Dated at Bethesda, Maryland, this day qf, April 1982.
For the Nuclear Regulatory Commission Harold R. Denton, Director Office of Nuclear Reactor Regulat. ion k
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' UNITED STATES OF AMERICA
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BEFORE THE DIRECTOR
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In the Matter of
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WASHINGTON PUBLIC POWER SUPPLY
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Docket Nos. 50-460 SYSTEM, ~et al.
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50-509
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Permit Nos. CPPR-174
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WPPSS Nuclear Projects Nos. 4& 5)
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CPPR-155
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CERTIFICATE OF SERVTCE
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I hereby certify that the Coalition For Safe Power's "Show Cause Petition...Regarding Washington Public Power Sup11y System Projects 4 & 5" has been served on persons listed below by depositing said petition in the U.S. Mail, with proper postage affixed, fisst class, on March 17, 1982 in Portland, Oregon.
Harold Denton, Director Office of Nuclear Reactor Regulation US NRC Washington D.C. 20555 Secretary of the Commission t
US NRC Washington D.C. 20555 Robert Ferguson WPPSS~
3000 Ceorse Washington Way P.O. Box 968 Richland, Wa.,99352
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-/ 7 Nina Bell @ r$ v sin Coalition For Safe Power Dated this 17th day of March 1982.
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE DIRECTOR In the Matter of
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Docket Nos. 50-460 SYSTEM, et al.
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50-509
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Permit Nos. CPPR-174 (WPPSS Nuclear Projects Nos. 4 & 5)
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CPPR-155 SHOW CAUSE PETITION. BROUGHT PURSUANT TO 10 CFR 2.206(a) REGARDING WASHINGTON PUBLIC POWER SUPPLY SYSTEM PROJECTS 4 & 5, MARCH, 1982 Introduction 1.
This petition is brought by the Coalition for Safe Power (hereinafter refered to as " Coalition") before the Director, Nu-clear Reactor Regulation purauaat to Chapter 10 of the Code of Federal Regulations, Part 2.206 (a).
The petition alleges that the decision of the Washington Public Power Supply System (WPPSS)
Board of Directors made on January 22, 1982 to terminate the projects 4 and 5 is basis upon which to revoke their respective construction permits.
Description of Petitioner 2.
The Coalition is a non-profit citizens organization, founded in 1969 to work for safe energy.
Its work includes research and education.
The Coalition, through its officers and attorneys, has represetned its members before the Commission, as well as state agencies on questions of nuclear power safety and licensing and h f electric utility rates.
The Coalition has been granted full par-hg ty status in four proceedings before the commission including the o
original application for construction permit for the Skagit Nuclear g
Projects, Units 1 and 2, application for construction permits of Pebble Springs Nuclear Plants, Units 1 and 2, and two license S
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amendments for the Trojan Nuclear Power Plant.
The. Coalition has.also filed several Show Cause petitiops before the Nuclear Regulatory Commission.
Authority 3.
Pursuant to 10 CFR 2.206(a) the Coalition requests that the Director, Nuclear Reactor Regulation, institute a pr6ceeding pursuant to 10 CFR 2.202 to revoke the WPPSS construction permits Nos. CPPR-174 and CPPR-155 based *on the inability of WPPSS to raise the necessary construction funds for the projects and the concurrent decision by the Board of Directors to terminate the plants.
Statement of Facts 4.
On May 29, 1981, the Managing Director of WPPSS, Robert Ferguson, asked the Board of Directors to slow construction on WNP-4 and 5 because of continuing problems in financing the pro-jects.
In his speech (Attachment A), Mr. Ferguson states:
Quite frankly, funding the five projects at this $23.8 billion estimated cost level pre-sents a very very difficult problem in today's financial market, j
Completing all five projects at this budget level will require that we raise something in excess of $3 billion this year, and quite frankly, this challenges us with one of the most difficult funding programs in the United States.
(pg. 2) 5.
On June 16, 1981 the WPPSS Board of. Direct 6ss Voted to support the Managing Director's request for a one year morato-rium on the projects.
Cessation of construction occured in July 1981.
6.
By letter dated February 1, 1982, Mr. Robert Ferguson informed Mr. William J. Dircks, Executive Director for Opera-tions, U.S. Nuclear Regulatory Commission (Attachment B) that l
the WPPSS Board of Directors had, on January 22, 1982, adopted a resolution terminating projects 4 and 5.
7.
The NRC, in a letter from R.L. Tedesco, Assistant Direc-tor for Licensing, Division of Licensing to Mr. Ferguson, dated March 2, 1982, confirmed the intent of WPPSS to terminate the projects.
(Attachment C) 8.
It is common knowledge that the decision to " mothball" the projects was made due to lack of construction funds with which to complete their construction.
It is also common know-ledge that the ability of WPPSS to raise the necessary funds for controlled " termination" is in serious jeopardy.
Conclusions of Law
- 9. 42 U.S.C.
$2236 (a) and 10 CFR 50.100 provide that a construc-tion permit may be revoked because of " conditions which would warrant the Commission to refuse to grant a license on an origi-nal application..."
10.
42 U.S.C. 52236(a) and 10 CFR 50.100 also provide that a construction permit may be revoked "for failure to construct...
a facility in accordance with the terad of the const'ruction per-mit..."
11.
Thus, the inability of WPPSS to construct the projects (see para. 4,5, and 8) and the unwaivering and unequivocal in-tent of WPPSS to abandon the projects (see. para. 6 and 7) fufill the respective conditions of the Atomic Energy Act and Chapter 10 of the Code of rederal Regulations as set forth in paragraphs 9 and 10 above.
Relief Requested 12.
WHEREFORE, Petitioners pray that the Director, pursuant to 10 CFR 2.202(a), Order the Washington Public Power Supply s
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System to show cuase as to why Construction Permits,Nos. CPPR-174.and CPPR-155, for Projects 4 and 5 respectively, should not be revoked.
Respectively submitted, a,1b Dated this day, the W ina Bell 16th of March, 1982.
Coalition for Safe Power O
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Attccha;nt A AN INFORMATION SERVICE OF THE WASHINGTON PUBLIC POWER SUPPLY SYSTEM june 12,1981
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.. ___ _.. r; Ferguson recommends WNP-4/5 slowdown Saying the decision was " pure the need for power from these energy can be saved through hell" to make, Managing Director projects.
conservation.
Robert Ferguson has asked the Sup-In the next year alone, the Supply A recent energy forecast by the ply System bosrd of directors to slow System would have to raise more Pacific Northwest Utilities Confer.
down construction of units 4 and 5 than 53 billion to continue work on ence Committee projects a decline for ony yeir.
all five plants, far more than the in power demand in the region.
The Supply System has ever had to Finally, the Washington Legislature Fergu/ recommendation came after ton drew the bottom line on a borrow before.
mandated that an independent study proposed fiscal 1982 construction "The numbers as they appear are of the feasibility and need for %NP.
budget of $23.9 billion for all five just too large to handle without the 4/5 be undertaken.
nuclear power plants.
total commitmant and support of the "We have to put that question Ferguson's surprise announcement state and region," Ferguson said.
(need for power) to bed," Ferguson May 29 set in motion a series of He identified several recent events told a press conference in Richland, high level meetings throughout the that have created an atmosphere of WA. last week.
region as board members and parti-
" uncertainty" both with the public At the same press conference, cipants discussed and debated the and on Wall 5treet.
Ferguson indicated he pinned his recommendation.
They include a recent Bonneville main hepes on gaining the needed Supply System Board President Power Administration study indicat.
regional consensus from the legisla-Stanton Cain said the Ferguson ing a potentially large amount of tive study and from the new recommendation was just that and Regional Power Council.
that the final decisions rest with the "An endorsement of the council 88 Participants that are owners of the plus the study wevid go a long way two projects and with the board of InSide towards relievmg t e uncertamty h
directors.
that surrounds the 4/5 nsue," he
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d-On June 10 the Supply System was e full (eXl Of ~
'8i schedu!ed to submit its detailed By law, the new regional council analysis of the budget to the boart"s fefgU500,5 j rnust come up with an energy plan Commmittee on Treasury Finance, speech, Page 3 for the Pacific Northwest in two and Audits.
years, but Fe<guson espressed hope that the council would deal with the On the following day the commit-tee was scheduled to make its report 9 fn(ery/ety gyj(h 44 issue sooner, to either the Executive Committee or Speaking before a sut,comrrittee 4/5 Study of the u.5. House of Representative.
the full board.
The earliest that the board of.
head, Page 4- -
lm week, EPA-Admenniraior Peter directors could act on the slowdown Johnson urged that this study be would be at a special meeting of the completed in one year,"m view of board June 16, Cain said.
G [Uff $ peed the risk to the region's power supply and the entreme costs associeted in making his recommendation, ahead On WNP-2*
Ferguson repeated his belief that with the prospective moratorium."
WNP.4 and WNP 5 will be needed Page 2 Johnion pcinied out that EPA hai to provide the electric power a legal obligaaen under the regional
.ieeded to ensure the economic power act to meet the region's well.being of the Pacific Northwest.
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elecoc pciwer requirements.
But he said it would be entremely Meanwhile, Ferguson stated he is OII YO Ol difficult to taine the money needed committed to continuing construc-to complete all fne projects while
$a(50p, Page 7 tion of proieci 1,2. and i ai qu<W people in the region are questioning and as economically as possible.
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i Attachment B Fage 2 of 2 Washington Public Power Supply System P.O. Box 968 3000GeorgeWashingtonWay Richland. Washington 99352 1509) 372-5000 4
February 1, 1982 GO-1-82-0041 Docket Nos:
50-509 50-513 Mr. William J. Dircks Executive Director for Operations U. S. Nuclear Regulatory Comission Washington, D. C.
20555
Dear Mr. Dircks:
Subject:
TERMINATION OF SUPPLY SYSTEM NUCLEAR' PROJECTS 4 AND 5 (WNP-4 and WNP-5) 22,'1982, the Washington Public Power Supply System Board of On January Directors adopted a resolution terminating the Supply System's Nuclear Projects Nos. 4 and 5.
Constructionworkonthesetwo(2) projects essentially was halted by the Supply System in July 1981, with the intent that an extended construction delay would continue un,til June 30, 1983. We advised the staff of this construction deferral by letter to Mr. H. R. Denton dated Catober 26,1981.
Those projects were under cc,nstruction pursuant to Construction Pernits CPPR-174 and CPPR-155, respectively. At the time that work was halted,-
. WNP-4 was 24% complete and WNP-5 was 16% complete.
J The Supply System has developed a plan for termination of these projects which contemplates two phases. Phase One involves efforts to sell the The Supply System will maintain the plant plants intact to a new owner.
structures and equipment in a licensable condition at least through Phase One and possibly thereafter, and will comply with the conditions
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intend by and during these efforts to retain the Construction Pennits.
We are willing to meet with your staff to brief it on details of the efforts contemplated.
Phase'Two of the termination plan will comence only after the Supply System determines, subject to the rights of the Participants and Pacific Power and Light (10% owner of WNP-5), that it is no longer prudent to expect that the projects can be sold in their entirety within a reasonable time and without unreasonable expense. No definite time period has been set for completion of the first phase and initiation of the second.
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Page 2 February 1, 1982 WNP-4/5 Termination In Phase Two, plant equipment and materials will be sold or othemise disposed of in a prudent manner, in accordance with applicable contractual and legal procedures.
With regard to WNP-4, the application for an Operating License for WNP-1 and WNP-4, including the FSAR, FER a.nd General Information Document, was submitted to the NRC on November 25, 1981 Because we intended at that time to resume construction of WNP-4 following the extended delay, the application addressed both WNP-i and WNP-4. Recent events dictate that the application address only WNP-1 now and until further notice.
Very truly yours,
- w R. L. Ferguson Managing Director GCS/sm cc: HR Denton NRC V Stello NRC EG Adensam NRC
'A Schwencer NRC RH Engelken NRC Region'.V..._._,
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Mr. Robert L. Ferguson, Managing Director Washington Public Power Supply System P.O.' Box 968 Richland, Washington 99352 Dea r-Mr.-Fe rgu s on:-- - -
Subject:
Termination of Washington Nuclear. Projects 4 and 5 In your letter of February 1,1982, to Mr. W. J. Dircks, you discussed the Supply System's intent to maintain the structures and equipment at Washington Nuclear Project (WNP) Nos. 4 and 5 in a licensable ' condition at least through the period you have termed Phase One and to comply with all existing construction permit conditions and requirements. Our preliminary assessment of this decision does not indicate that any additional near-term action other than that taken or, planned is necessary at this time on the part of the Supply System.
It is our understanding that the Supply System intends to carry out the management plan presented to the Region V Office on December 10, 1981, insofar as maintaining ~
the plant equipment and records. The NRC Resident Inspectors and Regional Inspec-tors intend to conduct their activities (inspection surveillance, audit) on both units in accordance with this plan until such time as the Supply System announces -
termination of phase one.
The staff has ceased its review of the operating license (OL) application for WNP-4 as you requested. We are continuing our acceptance review of the'WNP-1 OL applica-
-tion.-You should, amend the pindiiig Xp~ plication for ~ operating licenses ~for WNP-l' and WNP-4 to reflect the present status of the WNP-4 project. Because the staff expects to coglete its acceptance review for WNPJ1 only by mid-March 1982, it may be advisable for. you to await the outcome,of that review and amend your application to delete WNP-4 at that time. We could then docket and notice the application for an operating license for WNP-1 only-Other aspects of the termination of WNP-4 and WNP-5 could also be discussed at that time.
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edesco, @ stant Director k
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FROM:
R. T. Dodds, Chief, Reactor Project Section 2, Reactor Construction Branch
SUBJECT:
EXTENDED CONSTRUCTION DELAY AT WNP-4 AND WNP-5 DOCKET NOS. 50-513 AND 50-509 A meeting was held in Region V with representatives of the Washington Public Power Supply System on December 10, 1981 to review the licensee's plans for the extended construction delay ("mothballing") of the subject facilities.
IE Report Nos. 50-513/81-11 and 50-509/81-21 contain a summary of the results of that meeting. Enclosed is a copy of the licensee's management plan for mothballing the subject facilities.
The intent of the RV inspection program for WNP-4/5 during the mothball period will be to assure that the licensee has established and implemented plans, instructions and procedures for the preservation and maintenance of equipment, materials, structures and records in a timely manner in conformance with the established QA program. Our inspections will initially include the following:
Review Management Plan Review and evaluate list of equipment, materials, and structures, including preservation requirements. Also consider " minimum attention with risk" category items Evaluate program for segregation of " wasted" material when a3propriate Initially examine records retention program and conduct inspections thereaf ter of records of different organization / contractor's approximately quarterly Monthly tour of plants Quarterly inspection of stored materials l
Quaterly review of maintenance and/or surveillance records a
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Semiannually review results of licensee's QA audits N
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Once we have gained some confidence in the licensee's program, then we l
will reevaluate our planned inspection program. Irregardless, the l
Senior Resident Inspector will probably tour some area (plant or storage facilities) monthly.
If you have any questions on our activities for these projects, you may i
contact me at 463-3720.
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l R. T. Dodds, Chief l
Reactor Project Section 2 i
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R. W. Hernan, NRR L. L. Wheeler NRR cc w/o enclosure:
B. H. Faulkenberry 1
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~r MANAGEMENT PLAN FOR EXTENDEO CONSTRUCTION DELAY OF WNP-4/5 f
OCTOBER 14, 1981 (RevisionPackage,datedOctober 27, 1981, Included)
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'js CONTENTS 1.0 OVERVIEW
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2.0 FINANCIAL 4
3.0 LICENSE MAINTENANCE 9
4.0 ENGINEERING C0fiSIDERATIONS 13 E.0 QUALITY CONSIDERATIONS 17 6.0 DOCUMENTATION AND RECORDS 19 7.0 COMMERCIAL ACTIONS 2) 8.0 PROGRAMMATIC ACTIONS 28 9.0 REQUIRED ACTIONS 29 10.0 MANAGEMENT OF THE EXTENDED CONSTRUCTION DELAY 33
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APPENDIX A--BOARD OF DIRECTORS' RESOLUTION No.1187 AND RESOLUTION No. 1198
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APPEN0!X B--
WNP-4 and 5 FY-1982 AND 1983 BASELINE BUDGET AND CASH FLOW PREPARATION CRITERIA PHASE I AND II
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n November 6,1981 MANAGEMENT PLAN FOR EXTENDED CONSTRUCTION DELAY OF WNP-4/5 1.0 OVERVIEW l.1 INTRODUCTION This Management Plan is a description of the general policy and guidelines to be followed in bringing the WNP-4/5 Projects to an extended construction delay status. The Supply System will use this plan as the basis for all management direction with respect to efforts on Projects 4 and 5.*
The extended construction delay status is to be executed within severely limited funding constraints while preserving the assets of the Projects for a two-year period.
The term commonly used to describe this extended construction delay is " mothball."
k 1.2 REASONS FOR THE DELAY 8ecause of the severe problems in financing the construction of Units 4 and 5 in parallel with the other three Supply System Projects, the Governors of Washington and Oregon appointed a special Blue Ribbon Panel of senior businessmen to evaluate the situation and provide their recommendations. The reconnended action, on September 18, 1981, was to place WNP-4 and 5 in a minimum cost status while preserving the assets for a period of at least two years beginning July 1, 1981. The Participants Committee representing the 88 participants in WNP-4/5 approved a resolution on September 24,
- 1981, supporting these reconnendations.
The Supply System Board of Directors directed implementation of those recommendations on September 25, 1981, in Resolution No.1187 (See Appendix A) and further directed preparation of an amended construction budget for fiscal. years 1982 and 1983 reflecting the same.
- !t is anticipated that an oversight role will be provided by the Participants f
Comnittee, 10U's and OSI's. This plan will be amended at that time to reflect l
tneir role.
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I October 14, 1981 1.3 CHANGES TO THE PLAN Changes to this plan will require approval of the Managing Director.
1.4 FUNDAENTAL PRINCIPLES GOVERNING WFP-4/5 EXTENDED CONSTRUCTION DELAY 1.4.1 Initiation The delay is to be initiated immediately and is to be based primarily on absolute minimization of all costs between now and July 1983.
1.4.2 Maintenance of Assets The plant assets are to be maintained. This will include:
o conducting preventive maintenance of critical equipment
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o conducting minimum activities necessary to preserve the licenses o maintaining sufficient and accurate documentation on all quality, safety, and code-related materials and installations o maintaining insurance coverage.
1.4.3 Supply System Transformation flanagement actions will be taken to transfom the Supply System and its contractors into an efficient / effective organization building three plants, not five.
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October 14, 1981 1.4.4 Lead Unit Impacts Management actions will be designed to minimize the impact on Units 1 and 3 cost and schedule.
1.5 MANAGEMENT PRINCIPLES The management of the extended construction delay will be conducted by line management. A task force has been assigned to assist in managing the efforts described in this plan. The functions of the task force are given in Section 10 of this report.
In managing the delay, maximum utilization will be made of existing procedures, repo-ts and systems.
9 3
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November 24, 1981 2.0 FINANCIAL t
2.1 GENERAL It is emphasized that funding of the WNP-4/5 mothballing will be a not to exceed amount for the period July 1,1981 through June 30, 1983. At the present time, agreement has not been reached concerning the availability and specific timing of certain fundirg. A preliminary financial baseline for the mothballing period is shown in Table 1.
Table 2 summarizes by major t,udget line item the preliminary estimated cash requirements.
2.2 BUDGET AND CASH FLOW REQUIREMENTS The construction delay on WNP-4 and 5 necessitates an amended 1982 construction budget for all five projects. Amended 1982 construction budgets and related cash flows for WNP-1, 2 and 3, and the WNP-4/5 FY-1982 and 1983 baseline budget and cash flow as outlined in Appendix B f
are to be prepared and submitted for action by the Board of Directors in i
January 1982.
2.3 GENERAL BUDGET GUIDANCE 2.3.1 Scope The scope of the mid-year review will include the following for all five projects:
l o all budget line items o revised estimate at completion, based on actual cost through September 1981 and estimate to completion for WNP-1, 2 and 3.
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October 14, 1981 b!
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5, TABLE 1.
j w
j11)d}'n\\ii 1.,, ai-i FINANCIAL BASELINE
($ in Millions)
Beginning Balance (Cash on Hand 7/1/81)
$ 59 Revenues Transfer of fuel assets (Actual 8/81)
$ 61 Cost-sharing 4.djustment 5
Rei.1 vestment income 105 PP&L ownership share of WNP-5 23 Regional participation 150 Total Revenues 344 Cash Requirements i
WNP-4 Actuals.7/1/81 - 9/27/81
$ 69 Estimated 9/28/81 - 6/30/83 109 Total 5178 WNP-5 Actuals 7/1/81 - 9/27/81 5 66 Estimated 9/28/81 - 6/30/83 159 l
l Total
$225 i
WIF-4 and 5 Actuals 7/1/81 - 9/27/81
$135 l
Estimated 9/28/81 - 6/30/83 268 Total 403 f
Ending Balance (Cash on Hand 7/1/83)
$ ~
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O October 14, 196 TABLE 2.
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WNP-4/5 CASH REQUIREMENTS
- 7/1/81 - 6/30/83
($ in Millions, last working day.of the month)
WMP-4 WNP-5 WNP-4/5 Actual Estimated Actual Estimated Actual Estimated 7/81-9/81 9/81-6/83 Total 7/81-9/81 9/81-6/83 Total 7/81-9/81 9/81-6/83 Total Constr. Contracts
$44.4
$ 59.8
$104.2
$ 37.0
$52.1
$89.1
$81.4
$111.9 $193.3 t
Prepurchased Equip.
7.6 7.0 14.6 17.5 67.2 84.7 25.1 74.2 99.3 Architect-Engineer 6.0 4.0 10.0 3.5 9.3 13.3 9.5 13.8 23.3 Constr. Manager 5.9 2.9 8.8 2.6 4.6 7.2 8.5
- 7. 5 16.0 Owner's A8G 4.7 3.3 8.0 3.7 4.4 8.1 8.4 7.7 16.1 Omer's Constr.
.3 4.0 4.3 1.3 1.0 2.3 1.6 5.0 6.6 Subtotal
$68.9
$ 81.0
$149.9
$65.6
$139.1
$204.7
$134.5
$220.1 1354.6 Nuclear Ft.e1
.2
$ 27.5
$ 27.7
.7
$ 20.0
$ 20.7
.9
$ 47.5
$ 48.4 TOTAL
$69.1
$108.5
$177.6*
$66.3
$159.1
$225.4*
$135.4
$267.6
$403.0*
- Not to exceed amount.
Fr1 g-6 I. h
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Novemb r 24, 1981 4
g o associated cash flow forecasts o for WNP-4 and 5 only, special emphasis must be given to the cost estimates and related cash flow forecasts for fiscal years 1982 and 1983 based on slowdown / mothball directives. Specific preparation criteria for this is provided in Appendix B.
o For WNP-1 and 3 only, the amended 1982 construction budget estimates shall assume that WNP-1 and 3 are single units and require identification of costs that would shift to the twin-unit (4/5) if restarted on July 1, 1983 consistent with the principle of equity, i.e., " cost allocated on the basis of proportion of respective benefit."
l 2.3.2 Responsibilities Responsibilities for preparation, review and approval of revised estimates remain the same as defined for the 1982 budget.
2.3.3 General Guidelines The overall estimating approach to be used for the mid-year budget review is from the standpoint of " variance" from the 1982 budget. Focus should be directed to impacts that have occurred subsequent to preparation of the 1982 budget. For example:
o Impacts resulting from the extended construct Ln delay on WNP-4 and 5.
~
o Changes authorized through Change Management act an. These would not impact the bottom line of the budget, but would involve t qnsfers from contingency to other budget line items (or vice versa).
o Impacts resulting from implementation of Amendment No.1 to " Policy Statement on Equitable Cost Sharing for Twin-Unit WPPSS Projects."
Such impacts are to be uniquely identified in the budget with actual costs incurred during the extended construction delay being recorded as
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contingency assets or liabilities, as appropriate.
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Nnvember 24 1981 0
Major estimating assumptions to be used are as follows:
i o For the purpose of estimating WNP-1 and 3 cost that would shift to the twin units (4/5) if restarted, assume that the construction restart notification will be given on July 1, 1983 for WNP-4 and 5 without any advance notice.
o Cost-sharing allocations will be made as specified in the Amendment No. I to " Equitable Cost Sharing for Twin-Unit WPPSS Projects."
o Assumptions for inflation are to remain the same as those used in the 1982 budget.
The 1982 budget will continue to be the baseline for performance measurement on WNP-1, 2 and 3.
The revised estimate and related cash flows for fiscal years 1982 and 1983 for WNP-4 and 5 will become the new baseline for these projects.
2.4 Required Action I
A list of specific required actions is given in Section 9.2.
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October 14, 1981
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3.0 LICENSE MAINTENANCE
3.1 DESCRIPTION
OF LICENSES 3.1.1 License Requirements The Supply System currently possesses NRC construction permits for both WNP-4 and WNP-5. NRC regulations do not require that any phase of construction of a total project be completed on a specific schedule.
The only requirement relating to construction schedule is that construction be completed by the latest completion date specified in the construction permit.
The latest completion date may be extended by the NRC for " good cause."
(42 USC, 2235; 10CFR50.55) 3.1.2 License Extensions
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It has been common for NRC licensees to seek construction permit amendments to extend latest completion dates.
Such amendments are usually granted routinely.
" Good cause" for such amendments can be demonstrated by factors beyond the licensee's control such as labor difficulties, changing regulatory requirements, and adverse economic conditions.
3.1.3 WNP-4/5 License Status A request to extend the latest completion date on the WNP-4 pennit to June 1, 1987, was submitted recently to the NRC.
Under NRC Regulations, the construction pennit will remain in effect pending NRC action on the request (10CFR2.109).
The latest completion date specified in the WNP-5 permit is July 1, 1986.
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y October 14, 1981 3.1.4 WNP-4/5 License Extensions While the NRC Staff has the authority to require licensees to "show cause" why permits should not be modified, suspended or revoked in view of significant new information (see 10CFR2.202), -the issuance of a "show cause" order solely because construction on WNP-4 and WNP-5 is interrupted is considered to be unlikely, particularly in view of the state of completion of the projects and the likelihood of eventual. resumption of construction and project completion.
Based on precedents where other utilities have deferred construction (e.g.,
Duke Power deferral of Cherokee Unit 1, 2 and 3), it is expected that the NRC Staff will view the information regarding a deferral of construction on WNP-4 and WNP-5 primarily as it relates to their own resource needs and review priorities.
3.1.5 NRC Overview of Delay The NRC Inspection and Enforcement staff will have a most direct interest in j
the plans for, and activities associated with, preservation of the facility records and hardware.
It will be important to consider their concerns when formulating our plans for deferral of WNP-4 and WNP-5 construction and to keep them closely informed of our activities.
3.1.6 Site certification Agreements The " licenses" issued by the Washington Energy Facility Site Evaluation Council (EFSEC), known as the Site Certification Agreements, do not specify dates for completion of construction.
Consequently, many of the points and activities discussed above vis-a-vis the NRC are not applicable. However, in early October, EFSEC did express an interest in a full briefing on the impact I
of the decision to defer WNP-4 and WNP-5 with an eye to possibly changing the 10
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October 14, 1981 I
various permits and licenses issued by the State or to changing EFSEC-required programs and activities.
Changes anticipated would make permits and activities more reflective of reduced construction / operation activities and of the possibly extended construction period.
During October, Supply System staff will be analyzing the pertinent permits and programs to form the basis for Supply System proposals for appropriate changes or reductions.
3.2 ACTION PLAN FOR PRESERVING THE WNP-4/5 LICENSES 3.2.1 Notifications Informal notification of NRC management and staff was accomplished almost intnediately upon completion of the Governors' Panel Report.
Mr.
R.H.
Engelken, Director of NRC Inspection & Enforcement, Region V, was informed by Mr.
R.L.
Ferguson, Supply System Managing Director, in a meeting on
^
September 17, 1981.
Mr.
Harold
- Denton, Director of Nuclear Reactor Requlations (NRR), was informed by Dr. G.D. Bouchey, Deputy Director of Safety
(
& Security, in a meeting on September 24, 1981.
In addition, various NRC inspectors have been informed of the situation at WNP-4 and WNP-5 on a continuous basis.
Formal notification of both the NRC Staff (Bethesda) and Inspection and Enforcement (Region V) of the Supply System action regarding deferral of WNP-4 and WNP-5 construction was accomplished ~oy a letter to the Director, NRR, with copy distribution to the Director of Inspection and Enforcement, Region V.
No other formal submittals are considered necessary et this time to maintain the WNP-4 and WNP-5 construction permits or to satisfy normal practices of keeping the NRC informed of significant activities.
The EFSEC was notified of the construction interruption by a letter dated October 5, 1981.
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November 6, 1981 3.2.2 Licensing Acclications Our current plan is to file applications for operating licenses for WNP-1/4 in December 1981 and for WNP-3/5 in April 1982. In reviewing these plans in view of the WNP-4/5 deferral, it is concluded that the operating licensa applications in both cases should be submitted as originally planned.
This approach conserves manpower resources for both the Supply System and the NRC, results in no added cost for the WNP-4/5 Projects, and minimizes the necessity for public hearing on Projects 4 and 5 if construction is resumed and the plants are completed.
There is no filing fee for the operating licenses applications; thus, this action would represent no additional cost to WNP-4/5.
A final consideration is whether or not to request a further extension of the latest completion date on the pending WNP-4 construction permit or on the
{
WNP-5 construction permit. The pending WNP-4 amendment application requests a latest completion date of June 1,1987.
It has been concluded that the NRC should be allowed to process the pending application as submitted. After the construction delay period, the need for another extension of the latest completion date will be re-evaluated.
Similarly, no action is considered necessary at this time to extend the latest completion date for WNP-5.
This matter will be addressed at a later date.
3.2.3 Required Action i
A list of specific required actions is given in Section 9.2.
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October 14, 1981 4.0 ENGINEERING CONSIDERATIONS Engineering guidance on activities to be conducted for the preservation of the assets in WNP-4/5 is provided in this section. Final determinations are to be made by the Program Directors in consultation with the Technical Director.
Engineering planning and considerations for entering an extended construction delay range from complete preservation and completion of all necessary functions to simply walking off and leaving the work as is.
The degree of preservation work is primarily a function of economics at the time of implementation.
As a minimum, safety, code or quality requirements will in themselves demand a certain level of preservation activity.
Using economics as a basis, four classes of equipment / materials / structures can be defined:
o that which will be preserved at all costs o that which will receive minimal attention and is assumed.at a risk to be suitable for service later o that which can be sold or used elsewhere o that which is simply left as is.
The equipment / structure / materials that are encompassed by each of these classes can only be determined by an item by item evaluation by technically knowledgeable persons, with final decisions made by the Ofrectors responsible for managing the extended construction delay within a defined funding level.
4.1 EQUIPMENT TO BE PRESERVED AT ALL COSTS For that equipment / material / structures required to be preserved, the following considerations must be evaluated:
o Preservation and storage should be in accordance with manufacturer's recomendations, applicable design requirements and/or ANSI N45.2.2.
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I October 14, 1981 o Complete surveillance and record keeping functions must be maintained throughout the mothballing period.
The condition of the equipment must periodically be verified and all protective measures maintained intact.
All records including drawings, purchasing / manufacturing documents, code o
data reports or partial code data reports, qualification documentation, construction deficiency reports and any other applicable documents must be completed to the extent possible, and must be properly filed with the responsible party, Construction drawing revisions, ctupleted engineering directives and an o
accurate status reccrd of work completed must be identified and filed with the responsible party, o Concrete coating systems that are partially installed should be considered for completion.
4 o Unit 5 exposed rebar and structural steel which must be preserved should be sandblasted and coated with two coats of zinc-rich paint. Loose rebar should be stored in laydown area under cover. Unit 4 exposed rebar and structural steel should be left as is with sandblasting prior to usage, if required.
If more economic than sandblasting and coating, concrete encasement should be completed.
4.2 MINIMUM ATTENTION WITH RISK For equipment / material / structures determined to require minimum attention, the following considerations must be evaluated:
o Preservation and storage should be in accordance with manufacturer's recommendations, applicable design requirements, and/or ANSI N45.2.2.
However, these requirements may be modified based on the degree of exposure for a particular piece of equipment.
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6 October 14, 1981 Minimal surveillance should be established to assure protective measures
+
o remain adequate, i.e., heaters operable, covers intact, etc.
All records, including drawings, purchasing / manufacturing documents, code o
data reports or partial code data reports, qualification documentation and any other applicable documents must be completed to the extent possible and filed with the responsible party.
o Construction drawings, revisions and completed engineering directives should be identified and filed with the responsible party when practical.
4.3 AlikRNATE USAGE When cost effective, an attempt should be made to sell, trade or use the excess material / equipment in accordance with appropriate business practices.
Engineering should identify those items which may be disposed of.
(
4.4 LEFT AS IS Those items identified as more costly to maintain for the mothballing period than to replace should receive no attention. Those items that cannot be used elsewhere and have a specified shelf-life of insufficient length to warrant preservation, should receive no attention.
Alternatively, items in this category might be sold as scrap.
4.5 ECONOMIC CONSIDERATION Preservation of certain specialty, nonsafety-related items should be given j
close consideration. Examples of high-dollar specialty items are the turbine and generator.
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October 14, 1981 4.6 REQUIRED ACTION The Program Directors, in consultation with the Technical Director, shall define all equipment / structures / materials to be preserved given the economic considerations discussed in this ' plan.
These items are to be identified by October 23 so that specific commercial direction may be given to appropriate construction contractors and equipment vendors.
Nanconformances relating to hardware, structures, and documentation should be dispositioned and verified.
(If nonconformances can be closed out at the contractors expense, they should be closed out.)
At a minimum, unresolved nonconformances should be recorded and their status noted for future action.
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October 27, 1981 5.0 QUALITY CONSIDERATIONS Planning for the WNP-4/5 extended construction delay must address Quality Assurance program considerations that are necessary to preserve licenses and permits and to protect plant equipment and facilities so as not to preclude a resumption of construction after the delay.
5.1 REGULATORY REQUIREMENTS The regolatory rsquirements that must be met to preserve the assets in Projects 4 and 5 are given in the following subsections.
5.1.1 Quality Assurance Program The Design and Construction Quality Assurance Program must be continued and modified as necessary to cover the extended construction delay.
5.1.2 Preservation and Storage Requirements As discussed in Section 4, Engineering Considerations, equipment received and in storage should be maintained in accordance with manufacturer's reconnendations and/or applicable design requirements and standards, or approved alternatives.
Implementation of the preventive maintenance program shall be verified by Quality Assurance through site surveillances.
l 5.1.3 Procedures / Instructions Surveillance procedures shall be required to verify that the quality of materials, components and structures (including partially completed structures) will be adequately preserved during the period of suspended construction.
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i October 14, 1981 5.1.4 Records Documentation for work performed, including maintenance and qualification records, must be reviewed, accepted, maintained, and stored in a permanent record storage facility to which the Supply System has assured access.
The status of construction tests and inspections performed prior to suspensi3n of work must also be documented, reviewed and stored in a permanent retords facility accessible by the Owner.
5.1.5 Americ{n Society of Mechanical Engineers (ASME)
Contractors who have performed but not completed ASME Code work should prepare a partial da.a report ud have it signed by their Authorized Nuclear Inspector.
The report shcu d describe exactly what work has been performed.
i Also, all quality assurancq @ cumentation should be turned over for review and
(
acceptar.ce prior to contrsO demobilization.
Preservation and storage retairements should be established and implemented for ASPE material being stored. Also, materials / items being stored should be well identified with identification tags that will withstand the environmental conditions where placed.
5.2 REQUIRED ACTION The WNP-4/5 Program Director.s are responsible for developing the specific implementation plan to meet these requirements.
These plans are to be defined, documented and a copy provided to Corporate Quality Assurance by October.10,1981, in order to meet the comitment to brief the NRC on November 18, 1981.
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i October 14, 1981 I
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6.0 DOCUMENTATION AND RECORDS This section describes the requirements for records and docuinents needed to preserve the assets of WNP-4/5. Records / documentation are a necessary part of the total construction effort.
Insurance of proper documentation must be accomplished at minimum cost.
6.1 PRESENT STATUS OF DOCUMENTATION--WNP-4 6
The status of records for WNP-4 is as follows:
I o Engineering / Design records are in UE & C custody.
QA Class I construction records are in Bechtel and contractor custody.
o ASME Division 2 constructicn records are in UE & C and contractor custody.
o Quality Class II and G construction records are in contractor custody.
i o
i o QA Class I equipment vendor records are in Bechtel and prepurchased equipment contractor custody.
Class II and G equipment vendor records are in Bechtel or prepurchased o
equipment contractor custody.
o Supoly System contractors records are in Supply System custody (fuel racks, security system, spare parts, simulator, etc.).
Supply System-generated records are in Supply System custody.
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7 October 14, 1981
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I 6.2 PRESENT STATUS OF DOCUMENTATION--WNP-5 The status of the records for WNP-5 is as follows:
o Engineering / Design records are in Ebasco custody.
QA Class I construction records are in Ebasco and contractor custody.
o Class II and G construction records are in contractor custody.
o o QA Class I equipment vendor records are in Ebasco and prepurchased equipment contractor custody.
Class II and G equipment vendor records are in contractor custody.
o o Supply System contractors' records are in Supply System custody (fuel racks, secur.ity system, simulator, spare parts, etc.).
t o Supply System-generated records are in Supply System custody.
6.3 RECORDS REQUIRE?ENTS In order to preserve the assets of the projects, all records must be retained as described in the following Subsections.
6.3.1 Architect / Engineer and Construction Manager The AE and/or CM shall retain all quality records currently in his custody, and should obtain custody of those quality records in the custody of the contractors. The guiding philosophy shall be that the AE or CM have custody of the records rather than the contractor.
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October 14, 1981 6.3.2 Supply System The Supply System should retain all quality records currently in our custody for those contracts administered within the Supply System (e.g., fuel racks, security system, etc.).
In addition, the Supply System should obtain custody of those quality records that pertain solely to WNP-4/5 for contracts administered by the Supply System.
6.3.3 Contractors As discussed above, most contractors should present their records to the AE or CM as determined by the Program Director.
However, for selected contractors (for example, the NSSS contractor) where the contractor has not yet turned over quality records to the AE/CM or the Supply System, the Program Director may elect to leave those records in the custody of the contractor.
In this case, the contractor shall provide a list of those records required to support his work and shall describe how and where the records will be stored.
The Supply System will verify the adequacy of those records by audit / surveillance.
6.3.4 All Other Records All other records not currently in the possession of the AE/CM/ Supply System that can be obtained at no additional cost should be obtained. Other records should be obtained only for components that are not accessible due to construction (e.g., embeded piping, underground piping or electrical work, j
etc.). In this case, marked-up drawings and recort?. are adequate.
6.4 RECORDS GENERATED DURING CONSTRUCTION DELAY Records generated during the extended construction delay should be retained as follows:
o Preventive maintenance records shall be retained by the organization responsible for the maintenance.
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October 14, 1981 o Records for equipment received during the construction delay should be j
retained by the CM organization.
6.5 REQUIRED ACTION A list of specific actions required is given in Section 9.2 i
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October 27, 1981 7.0 COPHERCIAL ACTIONS 7.1 GENERAL The guidance and requirements specified in this section are necessary to ensure proper overall planning, support budget fonnulation and cash flow forecasting and control. The total effort will require some time to complete.
However, it is emphasized that the 4/5 Program Directors and the Director of Business Programs are to implement imediately those contractual actions that reduce the continuing conunitment of funds to a minimum. Attention should be given to the largest dollar impacts.
7.2 SPECIFIC ACTIONS 7.2.1 Prepurchase The Projects are to suspend aU WNP-4/5 work on all contracts except for these 4
contracts where the Project is reasonably certain that such suspension will result in greater near-term costs than continuance of work.
The WNP-4/5 Program Directors and Director of Business Programs shall review all contracts and develop their initial plan for resolving each contract by October 28, 1981. A copy of this plan will be provided to the task force.
Data shall reflect the following:
o Priority listing of contracts based on estimate of potential costs.
Inamediate evaluations are to be conducted on large dollar-value exposure contracts.
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i October 14, 1981 I
t o Intended Action--
a.
Suspension of WNP-4/5 work b.
Termination of WNP-4/5 work c.
Partial suspension of WNP-4/5 work d.
Continue work to completion o Consideration of disposing of equipment, material on hand or raw materials in vendors' shops. Such disposal must recognize existing band covenants; additional guidance on this will be provided, o Minimization of impact on WNF-1/3 as a result of the WNP-4/5 actions.
Consideration of engineering quality and documentation requirements, o
Estimated cost / cash flows for WNP-4/5 by specific contract for October, o
November and December 1981.
o Estimate of cost / cash impact on WNP-1/3 as a result of the WNP-4/5 actions recommended.
Cost / cash impact to be followed by contract for October, November and December 1981.
The Program Directors and Director of Business Programs shall prepare individual contract negotiation plans as required to support their commercial action plan'.
Based on these negotiation plans, the projected cost / cash flow should be reviewed and adjusted. An overall negotiation schedule should also be prepared, based on the priorities established above, by November 13, 1981.
Negotiations should begin in accordance with this schedule.
Upon completion of individual negotiations, tt;e cost / cash flow projects should be adjusted, if necessary, and the task force should be advised of any changes.
Necessary contractual documents should be executed in accordance with established commercial procedures.
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o October 14, 1981 7.2.2 Construction The action plans for construction are the same as for prepurchase, recognizing that some of the actions have already taken place.
7.2.3 Headquarters Contracting Activities Service and prepurchase contracts that support, or are funded by WNP-4/5, and are managed by Headquarters will be given the same scrutiny and reports provided thereon as in the case of prepurchase contracts.
This will be accomplished by the Director of Business Programs who will coordinate actions with the others for whom the contracting services are being provided.
7.3 NUCLEAR FUEL The nuclear fuel contracts are under the technical control of the Technical Director. The following actions are to be taken.
I 7.3.1 NSSS/ Fuel Initial core fuel is to be handled in the same manner as the NSSS portion of the contract.
7.3.2 Gardinier The contract with Gardinier is to be terminated. Termination costs are to be appropriately allocated between WNP-1, 4 and 5.
7.3.3 Western Nuclear Current plans are to purchase contractual comitments of uranium under the contract and inenediately resell at the then-current market price.
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October 14, 1981 i
7.3.4 Department of Energy Separative work is currently scheduled to be delivered to the Supply System for WNP-5 in September 1982.
The Supply System's initiatives to sell these services to other utilities are to be continued.
7.3.5 Kerr-McGee UF Conversion Contract 4
This contract involves conversion of UF supplied by Gardinier to UF
- 4 6
Termination of the Gardinier contract eliminates the need for this contract and it is therefore to be terminated.
7.3.6 Kerr-McGee U 3, Conversion Contract No cash flow is expected to be incurred by WNP-4/5 over the 2-year period.
Therefore, no action is to be taken.
7.3.7 Reporting Responsibilities The Technical Director will continue close coordination of actions with the Managing Director and will advise the task force of any changes to plans and will provide reports as required.
7.4 ASSUPPTIONS For purposes of negotiations, the period of construction delay will end o
on July 1, 1983.
Courses of action (i.e., termination, suspension, partial suspension and o
centinuance of the work) taken on specific contracts will be based on goals provided in Deputy Managing Director's memo of October 2,1981.
26 n
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o For purpcses of cost /cssh flows for construction contracts, the cost-sharing formulas provided to the Projects during the week ending
-October 2, 1981, will be utilized.
7.5 REQUIRED ACTION Specific required actions are given in Section 9.2.
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4 October 14, 1981 i.
8.0 PROGRAMMATIC ACTIONS The Supply System is committed to becoming an efficient organization designed to build three nuclear plants as opposed to five. This will require a number of programmatic actions including streamlining organizations and improving the overall manual-to-nonmanual ratios on the projects.
Several management initiatives have been implemented in recent weeks. The Program Directors are also to continue to pursue similar actions with respect to architect engineers, the construction managers and the construction contractors. These types of management initiatives must be implemented to minimize the impact of the extended construction delay on Projects 1 and 3.
In the same sense, all ncngenerating facilities and other activities conducted by the Supply System not directly supporting the construction of Projects 1 and 3 should be evaluated for deferral, suspension, or elimination.
Examples of such activities would be further work on improvement of roads and interchanges, office space, temporary construction facilities, temporary construction utilities, etc. The appropriate Directors are to provide a brief listing of their intended further programmatic actions and timetables to the task force by October 30.
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9.0 REQUIRED ACTIONS 9.1 ACTIONS TAKEN TO DATE The following actions have already been initiated and will be continued as necessary to implement the construction delay:
o Initiated reductions in nonmanual workforce.
o Provided initial guidance on commercial actions.
Subsequent direction was given on October 7, 1981.
Develcped necessary mid-year budget guidance to facilitate revision of o
FY82 budget.
O Initiated necessary early planning activities for the extended construction delay.
j o Initiated actions to reduce construction activities to an absolute minimum.
Issued temporary suspension notices to vendors of prepurchased equipment; o
detailed connercial guidance is to be developed.
o Initated a review of all service agreements to evaluate ponNe reallocation of shared costs or innediate suspension of the contract if reallocation cannot be accomplished and there are no adverse impacts on quality, licensing or preservation of assets.
9.2 PLANNED ACTIONS A consolidated list of actions is contained in Table 3.
The due dates and responsibleindividual(s)arealsoindicated.
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g TABLE 3.
1WNP-4/5MOTHBALLREQUIREDACTIONS& REPORTING
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FINANCE REQUIREMENTS Required Report Item Responsibility Date Issue general guidance Task Force 10/14/81
' WNP-4/5 cash flow thru PrIgramDirectors 10/31/81 Dec. 31, 1981 WNPal/4, 3/5, Hqtrs.
Estimates at completion &
Program Directors 12/14/81 cash' flows complete WNP-1/4, 3/5, Hqtrs.
(WNP-1, 2 and 3)
WNP-4/5 cash flow thru 6/30/83 Board action $f estimates Participants / Board 1/22/82 at completion and e
cash flow (all 5
, prgjects) i
^'"
COMMERICAL REQUIREMENTS
-Develop recomended actions Program Directors 10/28/81 by contract WNP-1/4, 3/5, Hqtrs.
Develop estimated cost / cash Program Directors 10/30/81 flows by contract thru WNP-1/4, 3/S, Hqtrs.-
,~
Deq., 1981 Develop estimated cost / cash Program Directors '
11/16/81
Impact on WNP-1/3 with WNP-1/4,3/5,Hqtrs.
/ Breakdown by contract Based on contractual action Program Directors
11/9/81 selected, issue additional WNP-1/4, 3/5, Hqtrs.
direction to the con-tractors Prepare"overall negotiations Program Directors 11/13/81 schedule WNP-1/4, 3/5, Hqtrs.
8 i
n 30 4
s
+
./
(
g October 27, 1981 i
(Continted)
COMMERCIAL REQUIREMENTS Required Report Item Responsibility Date Complete all negotiation plans Program Directors 1/31/82 WNP-1/4, 3/5, Hqtrs.
Prepare & execute contract Program Directors As required to main-modifications WNP-1/4, 3/5, Hqtrs tain integrity of the financial baseline LICENSING REQUIREMENTS Informal notification of NRC Licensing Complete managementent Notification letter to EFSEC Licensing Complete Notification letter to NRR &
Licensing Complete NRC, Region V Assessment of need for modi-Licensing 10/30/81
(
fication to EFSEC permits Briefing of NRC, Region V, on Quality Assurance 11/18/81 plans for WNP-4/5 Con-struction deferral Briefing of EFSEC on WNP-4/5 Licensing 11/15/81 construction deferral Submittal of WNP-1/4 OL Licensing 12/81 application l
Submittal of WNP-3/5 OL Licensing 4/82 l
application l
l
(
31 i
l
---n-
~
e t
i October 27, 1981 i
'(Continued)
ENGINEERING REQUIREMENTS Required Report Item Responsibility Date Define all equipment / structures / Program Directors 12/14/81 materials to be preserved WNP-1/4, 3/5, Hqtrs.
QUALITY ASSURANCE REQUIREMENTS Develop specific actions with Program Directors 10/30/81 an implementation plan WNP-1/4, 3/5, Hqtrs.
to meet the referenced requirements DOCUMENTATION AND RECORDS REQUIREMENTS Identify all records-related Program Directors As needed for actions which may have WNP-1/4, 3/5, Hqtrs.
negotiations connercial impact Identify location & status of Program Directors As needed for all relevant ~ records WNP-1/4, 3/5, Hqtrs.
negotiations PROGRAM 4ATIC REQUIREMENTS Evaluate & identify all non-Program Directors 10/30/81 generating facilities &
WNP-1/4, 3/S, Hqtrs.
Other activities to be deferred, sus-pended or eleminated.
cd 32 j'
s 1
October 14, 1981 10.0 MANAGEMENT OF THE EXTENDED CONSTRUCTION DELAY The principles for management of the construction delay are presented in Section 1.5 and will be based primarily on implementation by line management with assistance and support by the task force.
10.1 LINE MANAGEMENT RESPONSIBILITIES Management of the extended construction delay is the direct responsibility of the line managers of the Supply System. Each Director will be responsible for accomplishing those activities within his area of responsibility on the defined schedule and within budget.
The integrity of the overall financial baseline defined in Section 2.0 must be maintained and is the collective responsibility of every director.
10.2 TASK FORCE RESPONSIBILITIES
[
The task force is to provide assistance to line management in developing and implementing actions and is to provide a consolidated performance evaluation.
The task force will report to the Deputy Managing Director on all matters related to the extended construction delay.
The functions of the task force will be as follows:
develop and publish a consolidated Monthly Performance Report o
analyze impact of external influences on the ability to perforni against o
the defined baseline l
l o identify any requirements or additional initiatives for executing the delay that may have been overlooked 1
assist the Managing Director / Deputy in review of program actions against o
the plan 33 i
d
)
October 14, 1981 t
assist line management where and when necessary in the implementation of o
the extended construction delay review the experience of other nuclear utilities in extended delays on o
their plants review Supply System performance on accomplishing required tasks o
o review total expenditures versus baseline and funds availability to identify possible variance trends or overruns o identify and analyze potential areas for further savings o update this plan as necessary.
10.3 REPORTING GUIDELINES i
10.3.1 Rolling Cash Flow Reports The Supply System is using a 12-week rolling cash flow forecast and variance reporting system to monitor cash flow during the construction delay.
The 12-week rolling cash flow report will replace the current 8-week rolling cash flow report beginning November 2,1981.
The following infomation is to be j
provided weekly through June 30, 1983:
o updated 12-week forecast o explanations and reasons for variance of actuals i
explanations and reasons of forecast revisions for the comon periods for o
both past forecast and the approved budget baseline; these variance and l
34 l
I e
I I
October 14, 1981 l
revision explanations will address, at the minimum, whether the reason for the variances or revisions were due to a bad estimate, incorrect timing (if the variance is due to incorrect timing, a revised estimate of when the payment will occur and why should be included), or an omission.
This information is to be submitted each Monday by 4:00 p.m.
beginning November 2,1981, to J. J. Read, Manager, Project Budgets.
Project Budgets will consolidate all data, provide sumary analysis and report results by the following day.
A sample of an 8-week forecast is given in Table 4 and a sample of a construction fund cash summary report is shown in Table 5.
10.3.3 Responsib'ilities Required forecast inputs and related responsibilities are as follows:
Item Input Responsibility Construction Contracts DR Cseh/RN Williams f
Equipment Contraces DR Cseh/RN Williams Architect-Engineer DR Cseh/RN Williams Construction Management DR Cseh/RN Williams Owners A&G SW Stave Owners Construction Cost MJ Simons Nuclear Fuel.
WG Jolly Reinvestment Income KJ Kreamer 35 k
e,s
n n
m TABIE 4.
HAMil10GI0sl PUBllc POWR suPitY SYs1HI 10 14-81 8-WEK lt0ttileG CA564 ILOW IORtCAhl leurtt AR PROJECTS 1s05. 4 Aq 5___
($ lu ilmusands)
SEPiffeER 0010BIR NOVE MBE R
- W 9/I3 *WE 9/20
- w 9/27
- w 10/4 E 10/II w 10/18 K 10/25 WE II/l K 11/8 Wt il/15 E II/22 W 11/29 Ml_nn[ngBalance
}60,841
$51,044 143,480
$29. 364
}25,035 118,713 118,517
$10.002
}J,6_
5(/,465) d4 7]O,J $ 559) 2
,a.l,es TueT7ransfer 5 -
6 -
Interest Iransfer 167 122 477 78 55 5.426 37 18 1.957 Private ihmier 894 288 671 209 342 422 457 849 167 178 425 330 Total Receipts Li_,06_i_
$ 410
$ i.148
$ 287 t 397
$ 5,H48
$ 494
[ 867
}2,324 1, _l]8 E
425 330 Disheersamont 5 * *
'lllP 4 C5Estruction
$ 842
$ 3,522
$ 2,207
$ 1,377
$ 923
$ %6 5-500
$ 500
$ 600
$ 500 6 1,000
$ 1,000 Equiseent 421 154 2.124 265 37I 853 225 210 300 200 200 200 g/Of I.108 2,470
%0 2.713 880 2,660 Ouners A&G & Constr.
l.000 83 1.010 1,040 1,000 1,000 1.100 huclear fue) ggnancing 25 Total lasP-4
$ 3.396 L3.759 17.811
$ 1.642
$ 3.294
$ 1.819
$ 4,438
$ 710
} 2d80_
} _l00_
L 4.960
$ 1,200 leeP-5 Cdistruction 3 3,806
$ 3,740
$ 4,184
$ 365
$ %4
$ 3,049
$ 2.469
$ 1.439
$ I,080
$ 1,460 6
682
$ 1,800 Equipment 2,588 4?0 1,407 239 1,212 1,099 1.266 1,706 913 98 472 1.100 Af/06 222 54 473 2,361 225 60 36 5,066 15 225 2.300 400 Owners A8G & Constr.
818 1,389 9
800 800 287 800 800 fluclear Fuel 3
1 224 17 2
Financing 25
__j __
Total isIP-5 L?.462
$ 4.215
$ 7.453
$ 2.974
$ 3,425
[ 4 225, lj,5]l 18498 Q670
$ l 783 L 4.254 IJa_30_0 t
intal Disbursements
$10.858
[7.974
$15.264
$ 4.616
$ 6.719
}_6,044
[9,0_09
$ 9.208 L 6 4_50_
$ 2.483 5 9,214
$ 4.500 fndtng 8alance
}5h044
$4 3,480 129.364
}25,035 118,113
.} l 8,517,
[10,_002 L I,661_
}(2,g$) 1(1,llg) ((13,559) 1(jf,123)
- Actuals "8ased on existing cost sharing guidelines ar d mettwds.
m
.o..
1 TABt WASHINGTON PUBLIC POWER SUPPLY SYSTEM 10 14-81 l
CONSTRUCTION FUND CASH SIM1ARY NUCLEAR PROJECTS N05. 4 ANO 5 WEEK ENDING 10/4/81
($ in Thousands)
ACTUAL FORECAST VARIANCE VARIANCE EXPLANATION d
Beginning Balance
$29,364
$29,364 Receipts Interest Income 78 75 3
Private Owner 209 295 (86)
Total Receipts 287 370
$ (83)
Disbursements WNP-4 Construction
$ 1,377
$ 1,377 Equipment 265 267 (2)
AE/Cil w
Owners A&G & Constr.
'd Nuclear Fuel Financing Total WNP-4
$ 1,642
$ 1,644
$ (2)
WNP-5 j
Construction 365 348
$ 17
~'
i Equipment 239 239 AE/CH 2.361 2,361 Owners A&G & Constr.
9 9
Huclear Fuel Financing Total WNP-5
$ 2,974
$ 2,948
$ 26 Total Disbursements
$ 4.616
$ 4.592
$ 24 Ending Balance
$25,035
$25,142
$(107) 4
D 1
APPENDIX A BOARD OF DIRECTORS' RESOLUTION NO. 1187 AND RESOLUTION NO. 1198 O
'(--
APPENDIX A
)
i g
BOARD OF DIRECTORS 2
RESOLUTION NO. 1187
(
3 A RESOLUTIOil DIRECTING THE MANAGING DIRECTOR TO IMPLEMEfiT THE REC 0lHEN0ATIONS OF THE GOVERNORS' 4
PANEL AND THE PARTICIPANTS' COMMITTEE AND
~
FURTHER DIRECTING IMPLEMENTATION OF THE STEPS s
TO PRESERVE THE ASSETS OF WASINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECTS 4 AND 5 6
7 The fianaging Director reports that on September 18, 1981 the pan'el a
created by the Governors of the states of Washington and Oregon to study 8
the economic consequences to the region of the alternatives available to for Nuclear Projects Nos. 4 and 5 (the Projects) recomended that.the Projects should not be terminated at this time but should by keot in 12 a preservation mode for two to two and one-half years to allow Bonneville 13 and the Regional Council to determine whether the Projects are needed in 18 the region. The panel further recomended that: (i) the public and 15 private utilities, including the Participants, together with the direct k
16 service industrial customer (DSI's), should equitably share.in the regional effc, to preserve the Projects, which was estimated to require -
te direct costs of approximately $150 million to $180 million and (ii) the 1'
Participants should agree to pay 100% of the interest during construction zo on the Projects, and at The Managing Director further reports that on September 24,1981 the -
22 Participants' Comittee adopted a resolution concurring in the recomend.
23 ations of the Governors' Panel and recomending that the Supply System 24 imediately implement the steps-required to preserve the assets of the Projects until June 30, 1983 at the least cost possible, and' prepare and propose for approval by the Board of Directors and the Participants' 27 Comittee an amended Construction Budget for Fiscal Years 1982 and 1983 reflecting the same; NOW, THEREFORE,
(
IT IS RESOLVED that the Managing Director shall imediately im'lement p
30 the steps required to preserve the assets of the Projects until June 30, 1983 31
I 4
I 1
at the least cost possible, and prepare and propose for approval by the Board of Of rectors and Participants' Consnittee an amended Construction 2
Budget for Fiscal Years 1982 and 1983 reflecting the same.
3 ADOPTED by the Board of Directors of Washington Public Power Supoly 4
5 System this 25th day of September,1981.
6 7
Ag; a
President 9
ATTEST:
ja
?k 1
Secretark 13 14 1s 7
16 17 Is 19 2o 21 22 APPROVED AS TO FORM At10 LEGALITY:
23 24
~
f-tS
/
e Counsel me 27 f
\\
29 30 31
4 i
e 1
1 2
3 BOARD OF DIRECTORS k
4 RESOLUTION NO.
1198 1
5 A RESOLUTION DELEGATING CERTAIN I
RESPONSIBILITY AND AUTHORITY TO
'.1 6
THE MANAGING DIRECTOR MITH RESPECT TO AN EXTENDED CONSTRUCTION DELAY OF 7
WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECTS NOS. 4 AND 5 8
9 The Supply System, the Participants in Nuclear Projects 10 Nos. 4 and 3, the co-owner of Nuclear Project No. 5, certain investor-owned utilities and certain industrial customers of 33 B nneville Power Administration have agreed upon the basic 12 i'
elements of a plan for an extended construction delay for 33 y4 Nuclear Projects Nos. 4 and 5; and 15 It.is necessary and desirable that the extended con-16 struction delay be implemented in a timely and efficient g7 manner; and 18 The Board of Directors is authorized by statute to 19 delegate to the Managing Director such authority as the 20 Board shall determine; NOW, THEREFORE, 2g IT IS RESOLVED:
22 1.
The Managinq Director is authorized and directed 23 to implement an extended construction delay of Nuclear 24 Projects Nos. 4 and 5 until June 30, 1983 for the 25 purp se of preserving the Projects as a potential 26 regional enorgy r s urce at the least possible cost.
a :
27 1
i.
23
p 9
)
1 (a)
The authority to exercise all contractual rights 2.
of the Suppiy System pursuant to contracts with l
construction contractors, suppliers, architects 3 '
4 and construction managers, including without 5
limitation the authority to execute changes 6
deleting work and to terminate contracts within 7
provisions, and 8
(b)
The authority to negotiate and execute changes 9
in any and all such contracts.
10 2.
The Managing Director is authorized and directed 11 l
to develop, together with other interested parties 12 and groups, including the Participants in Projects 33 Nos. 1, 3, 4 and 5, the co-owners of Projects Nos. 3 34 and 5, Bonneville Power Administration, the Partici-15 pints' Committee, the Participants' Review Board, the 16 Owners' Committee and the industrial customers of 17 Bonneville Power Administration, an efficient adminis-18 trative procedure..to obtain such concurrence as may be 19 necessary or advisable in actions which he proposes to 20 take for the purpose of implementing the extended 21 construction delay of Nuclear Projects Nos. 4 and 5.
I 3.
This authorization and delegation of authority 22 23 will be subject to contractual arrangements to be entered into pursuant to the Memorandum of Under-24 standing dated October 14, 1981 providing for over-g sight by the participants, direct service industries t
and investor-owned utilities.
g 25 29
,n
I
~
?
o s'
1 l 4.
Policy direction in the implementation of this i
2 l resolution shall be transferred to the Executive i
t 3
Board upon its formation in accordance with Chapter l
4 l 3, Laws of 1981 (First Extraordinary Session).
5 5.
The Managing Director is authorized to redelegate 6
his authority to his subordinates to the extent that 7
he deems advisable.
g ADOPTED by the Board of Directors of Washington Public 9
Power Supply System this 23rd day of October, 1981.
10 11 President 12 l ATTEST:
l L
14 i
8 k
d' 15
) 30 Y
l J
17 18 APPROVED AS TO FORM gg AND LEGALITY:
20 j g,/Jr1 21 22
[
Counsel (
23 24 25 b
27 l
I
(
23 l
29 30
'I t
l
)
I i
APPENDIX B WNP-4 AND 5 FY-1982 AND 1983 BASELINE BUDGET AND CASH FLOW PREPARATION CRITERIA PHASE I AND II
(
OCTOBER 8, 1981 a
4 4
)
WNP-4 AND 5 FY-1982 ANO 1983 BASELINE BUDGET AND CASH FLOW PREPARATION CRITERIA i
PHASE I AND !!
TABLE OF CONTENTS Page I. INTRODUCTION 1
!!. OBJECTIVE 1
!!!. DEFINITIONS 1
IV. BUDGET SCHEDULE 1
V. O! VISION OF RESPONSIBILITY 2
VI. SCOPE OF BUDGET A.
Prepurchased and Construction Contracts 2
B.
C.
Owner Construction Cost 2
0.
Nuclear Fuel Cost 2
E.
Qualifications and Assumptions 3
VII. SPECIAL CONSIDERATIONS s
A.
Cost Sharing 3
8.
Contingency 3
C.
Sales Tax 3
0.
Escalation 3
E.
Controlled Information 3
F.
Summarization 3
G.
Cost Flow and Cash Flow 3
ATTACHMENT 1 - Definitions ATTACHMENT 2 - Responsibilities ATTACFIENT 3 - Format ATTACKtENT 4 - Schedule October 8, 1981 Project Budgets i
)
WNP-4 AND 5 FY-1982 AND 1983 BASELINE BUDGET AND CASH FLOW PREPARATION CRITERIA - PHASE I AND II I.
INTRODUCTION This is the corporate criteria for preparation, review and approval of the FY-1982 and 1983 baseline budget for WNP-4 and 5.
The baseline budget for each of the two nuclear power plant mothballing cost will be prepared in two phases. Phase I will cover the time frame from July 1. 1981 through December 31, 1981. Phase II will cover from January 1, 1982 through June 30, 1983.
This document is the instruction for both Phase I and Phase II and includes general guidelines for the following major segments of the budget:
o Prepurchased Equipment Contracts e Construction Contracts e Architect-Engineer Services e Construction Management Services e Administrative and General Costs e Owner Construction Cost e Nuclear Fuel Contracts e Reinvestment Income
(
II. OBJECTIVE An accurate assessment of the projects' forecasted cost during the period of July 1,1981 through June 30, 1983. These projected costs will be the baseline budget against which cost will be tracked and monitored in accordance with the " Tracking Plan for Monitoring Motaballing Cost Against Budget Baseline". It will also be the basis for cash planning to assure funding availability by the participating parties.
III. DEFINITIONS Selected terms used in this instruction are defined in Attachment 1 of this instruction.
IV. BUDGET SCHEDULE The milestone activities associated with the WNP-4 and 5 FY-1982 and 1983 baseline budget and cash flow preparation, review and approval are shown on.
All dates indicated on Attachment 4 must be strictly adhered to.
(
l i
e WNP-4 and 5 FY-1!
and 1983 Baseline l
Btdget and Cash riow Preparation Criteria - Phase I and II i
Page 2 i
V.
DIVISION OF RESPONSIBILITY Responsibilities for major baseline budgeting preparation and ccordina-tion functions are defined on Attachment 2.
VI. SCOPE OF BUDGET Phase I cash (July 1981 through December 1981) shall be submitted in the format and as a minimum the following is required:
A.
Prepurchase equipment contracts and construction contracts will be identified by contract number, contract description and contractor's name. Cost for each contract as a minimum require-ment shall be identified by the following (selected terms defined in Attachment 1):
(1) Baseline Scope (Included in 1982 Budget Baseline) a Work Invoiced b
Work Not Invoiced c
Existing (Old) Claims (2) Mothballing Scope (Excluded from 1982 Budget Baseline
(
and a Result of Mothballing) a Maintenance b
Demobilization c
Suspension d
Termination B.
Budgeted Architect-Engineer, Construction Management, Administrative and General costs will follow the guidelines as outlined in Amend-ment No. I to " Policy Statement on Equitable Cost Sharing for Twin-Unit WPPSS Projects" dated September-28, 1981.
C.
Owner Construction cost will be identified by contract number or item (i.e., spare parts would be *.he cost of all spare part contracts and purchase orders), contract description and contractor. Cost for i
each category shall be identified (as a minimum) in the same detail as Section A above.
O.
Nuclear Fuel cost will be identified by contract number, contract description and contractor's name. Cost for each contract will be identified (as a minimum) by the following:
(1) BaselineScope(Includedin1982BaselineBudget)
(2) Mothballing Scope (Excluded from 1982 Baseline Budget and a Result of Mothballing)
I
(
f
y
(
)
WNP-4 and 5 FY 1982 and 1983 Baseline
' Budget and Cash Flow Preparation November 6, 1981 Criteria - Phase ! and II Page 3 E.
Qualifications and Assumptions - All major qualifications or stumptions that apply to the baseline budget are to be docu o ted. A sufficient level of detail is necessary to provide a good basis for future changes to the budget.
Phase II cash (January 1982 through June 1983) shall be submitted (as a minimum) in the same detail and in a fomat similar to Attachment 3 for the 18-month period.
VII. SPECIAL CONSIDERATIONS A.
Cost sharing will be based on Amendment No. I to the " Policy Statement on Equitable Cost Sharing for Twin-Unit Projects" dated September 28, 1981. '
B.
Con *.ingency shall not be considered or provided for in the preparation of the WNP-4 and 5 FY-1982 and 1983 baseline budget and cash flow.
C.
Sales tax shall be considered, calculated and included in all cost for prepurchased equipment contracts, construction contracts, owner construction cost and nuclear fuel contracts. The tax rates are
(
5.2% for WNP-4 and 5.3% for WNP-5.
D.
Escalation shall be considered, calculated and included in all cost for prepurchased equipment contracts, construction contracts, owner construction cost and nuclear fuel contracts. The escalation rates shall be calculated in accordance wIth the "1982 Project Construction Budget Preparation Criteria - Phase I",,Section VII.
Subsection E.
E.
The WW -4 and 5 FY-1982 and 1983 baseline budget and cash flow shall be suunarized by major budget segments (i.e., prepurchased i
equipment contracts, construction contracts, etc.) by month from July 1, 1981 through December 31, 1981 and January 1,1982 through June 30, 1983 for Phase II.
F.
Cost flow detail must be developed initially by individual i
contracts on an incremental cost basis rather than a cash basis, i
Cost flow details for each contract shall be then converted to a
" cash" basis and reported on Attachment 3.
Actual cash from July 1, 1981 through September 27, 1981 may be a bottom lined per l
month for each contract scope (baseline scope and mothball scope) and doesn't require the detail breakdown as identified in Section VI of this instruction. The base date for cash flow projections shall be September 27, 1981.
[
k l
i
.'a i
ATTACHMENT 1 (Page 1 of 2)
DEFINITIONS i
A.
BASELINE SCOPE (FY-1982 BASELINE BUDGET) 1.
Work Invoiced Includes all cost for work completed and invoiced including but not limited to direct manual labor cost, support or distributable manual labor cost, labor special cost, nonmanual labor cost, material cost, construction, equipment usage cost, overhead cost, escalation, sales taxes, etc. for any work, services, equipment or material (that is included in the FY-1982 baseline budget scope) that has been invoiced for payment by the Supply System.
2.
Work Hot Invoiced Includes all cost for work completed or future work, as defined above in " work invoiced", for services, equipment or material (that is included in the FY-1982 baseline budget scope) that has been or will be performed in the future and that has not been invoiced for payment by the Supply System (i.e., final demobilization of completed contracts).
3.
Old Claims
(
The projected cost settlement of all contractor identifieri claims and potential claims which have not yet been submitted by contractors (but are included in the FY-1982 baseline budget scope) exclusive of any claims relating to the construction slowdown and/or the subsequent mothballing.
B.
MOTHBALLING SCOPE (NOT INCLUDED IN FY-1982 BASELINE BUDGET) 1.
Maintenance Includes all cost for work associated with securing the in-place comodities, placing material and equipment into storage, monitoring and securing the facilities, maintenance and preservation of materials, equipment, facilities, documentation and warranties (that are exclusive of the FY-1982 baseline budget) solely related to the construction slowdown and/or the subsequent mothballing.
2.
Demobilization Includes all cost for work operations associated with moving off the job site upon notification of temination or suspension including dismantling and removal from site of construction equipment, facilities, personnel, and restoration of the site as required. Demob-ilization is defined here as the " Interrupt Demobilization" and not the " Bid Demobilization" (that is included in the FY-1982 baseline
{
budget). Remobilization is to be considered after June 30, 1983.
r Definitions
)
ATTACHMENT 1 (Page 2 of 2) 3.
Suspension of Contract
' i The projected cost settlement of all contractor identified claims and potential claims resulting from the suspension of work associated with the mothballing (if any). Cost shall include as a minimum all considerations (if any) for nonrecoverable overhead cost, extended overhead cost and other potential claimed cost (not included in the FY-1982 baseline budget) solely as a result of the construction slowdown and/or the subsequent mothballing.
4.
Temination of Contract Includes all projected cost settlements as defined above in " suspension" for contractor identified claims and potential claims resulting from the
" termination of contract" associated with the mothballing (if any).
Temination cost shall also include as a minimum all consideration (if any) for cancellation charges and/or restocking charges for existing orders and other potential claim cost (not included in the FY-1982 baseline budget) which are solely as a result of the construction slowdown and/or the subsequent mothballing.
f.
9
(
L.
.s ATTACHENT WNP-4 AND S (P) = Primary Responsibility FY-1982 AND 1983 BASELINE (I) = Input BUDGET PREPARATION RESPONSIBILITIES (j) h jor Budget Segment WNP-4 WNP-5 Prepurchased Equipment Contracts (P) UE&C Ebasco (I) SS Business Staff /Bechtel SS Business Staff Construction Contracts (P) Bechtel Ebasco I) SS Business Staff SS Business Staff I) Contractors Contractors Architect-Engineer Services (P) SS Business StaffI2)
SSBusinessStaff(2)
I2}
Construction Manager Services (P) SS Business Staff SS Business Staff Supply System Construction Costs (P) See Note 3 below.
See Not'e 3 below.
Owner's A&G Costs (P) SS Dept. k nagersIEI I2)
SS Dept. A nagers Nuclear Fuel (P) SS Fuel Supply k nager SS Fuel Supply knager Peinves'. ment Income (P) SS Treasurer SS Iressurer Notes: (1) This table is only paorided to identify budget preparation reslaonsibilities. Its purpose is not to define approval responsibilities.
(t) In strict a:cordance with AmenJment Ita. I to " Policy Statement on Equitable Cost Sharing for Twin-Unit WpPSS Projacts".
(3) Responsibilities the same as provided in the "1982 Project Construction Budget Preparation Criteria - Phase II'.
F
\\
I ATTACHMENT 3 i
f WNP-PHASTT
)
(
Date:
MOTHBALLING BASELINE BUDGET Sheet of Revision:
AND CASH FLOW FORECAST Contract No.
Contractor:
Contract
Description:
FY-1982 Activities
- JUL
- AUG
- SEP OCT NOV OEC TOTAL Baseline Scope
. Work Invoiced
. Work Not Invoiced
.Old Claims Total Baseline Mothballing Scope
. Maintenance
. Demobilization
{
. Suspension
. Termination Total Mothballing TOTAL SCOPE
- Actuals Assumptions:
I ludeet Acoroval Sign-offs Contract 8udget Accountability Date Program Director Date
(
l
9 I
ATTACHMENT 4
[
WNP-4 AND 5 FY-1982 AND 1983 BASELINE BUDGET AND CASH FLOW MILESTONE ACTIVITIES SCHEDULE Activities Milestone Dates issue Draft Corporate Cniteria 10/7/81 Issue Final Corporate Criteria 10/14/81 Phase I Budget Submitted to Headquarters 10/31 /81 Phase ! Budget Review by Managing Director 11/2/81 Phase !! Budget Reviewed by Managing Director 12/14/81 1
i
(
9
I v.
~
~
e Thett 4.
Ip61steE70s PtmLIC FQES SurPLT ST5IEM 14 14-e1 s-sta settias casa not fee (CA51
_ asettI AS PeSJrCT5 eM. 4 Am 5
($ la Theasteeds)
-esNe -
StPr(satt octante soutsers
- w 9/I3 w 9/2c
- w 9/27
- w Ic/4 d 10/II E 10/18 w 10/25 w II/I E 11/8 mil /15 E 11/22 m 11/29 esalentes esteere
$44.849
$51.e44 343.450
$29. 3f.4
$25.035
[le.713
$1a.517
$10.002
$ I.661 l(2,465) i f4.770) $(13,559) as ransfer 8-I -
E -
6etarost fressfer 167 122 477 7e 55 5.426 37 le 1.957 2
Privete einser ett
- se
_ STI 2o0 342 422 457 e49 M7 17e 425 330 1atal Bacalpas 5 1.8161 4'60
$ 1.14e
$ 287
$ 397
$ 5.e4e
$ 494
$ e67
$ 2.324 5 17e I
425 5
330 2g
- essner u nnets'.
W-4
(
.5 Ceestracties
$ e42
$ 3.522
$ 2.287
$ l.377
$ 923
$ 966
$ See
$ 500
$ 600 5 500 5 1.000 $ l.000
=
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