ML20197H521
| ML20197H521 | |
| Person / Time | |
|---|---|
| Site: | Harris, Brunswick, 05000000 |
| Issue date: | 05/06/1986 |
| From: | Bolch T NORTH CAROLINA ELECTRIC MEMBERSHIP CORP. |
| To: | Barham C CAROLINA POWER & LIGHT CO. |
| References | |
| NUDOCS 8605190182 | |
| Download: ML20197H521 (3) | |
Text
NORTH CAROLINA ELECTRIC MEMBERSHIP CORPORATION
}&OO Sumner Boulevani, P.O. Bm 27306. Ralegh,.%th Candina 27611-7306 919/872-0800 May 6, 1986 Mr. Charles D. Barham, Jr.
Senior Vice President and General Counsel Carolina Power & Light Company P.O. Box 1551 Raleigh, North Carolina 27602 l
Dear Charles:
We indicated to you at our last meeting on March 13 that CP&L's offer of February 7, 1986, was unaccep~able to NCEMC because of: (i) elimination of Roxboro #4, (ii) reduce > ownership interest in Brunswick #1 and #2, (iii) lower sellback from Harris #1, and (iv) a generation expansion plan which reduced the economic feasibility of this arrangement.
We also pointed out that the CP&L/ Power Agency agreement, which you have represented is the basis for your offer to us, includes ownership of Roxboro #4, includes a proportionately larger share of Brunswick #1 & #2, and includes a 50 percent, 15-year buyback for both Harris and Mayo.
Charles, as you are aware, the long term interest rates available to NCEMC on the open market have declined considerably in the past few months.
You are also aware that the delay in reaching agreement with CP&L apparently has already resulted in the loss of financing from the Federal Financing Bank at very attractive rates.
The lower interest rate window may not be available for long, and it would indeed be unfortunate if NCEMC and CP&L were to lose this opportunity.
We believe, moreover, that time is of the essence.
In order to move things along, we are now prepared to (i) eliminate joint ownership in Roxboro #4, (ii) reduce ownership interest in Brunswick #1 and #2 to 13.2% (iii) set our joint ownership in Mayo unit 1 at 13.2% with a sell-back of 50% for 15 years, beginning at closing and (iv) propose a " sliding scale" adjustment to l
our proposal of March 13 as as illustrated in the enclosed graph.
Using the graph, for example we would be receptive to a 66%, 15 year sell-back on Harris 1 if we were able to finance at a financing cost of 8% or lower; would be receptive,to a 78%, 15 year sell-back on Harris 1 at financing cost of 9% and would be receptive to a 90%, 15 year sell-back if financing costs are 10%.
We do not believe we would be able to finance if finance costs are higher than 10%.
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Mr. Charles D.
Barham, Jr.
May 6, 1986
-Page Two l
I sincerely hope that CP&L can accept this offer so that our companies can proceed with the drafting of contracts.
Sincerely, v% W Thomas J. Bolch General Counsel Enclosure i
V cc:
Nuclear Regulatory Commission, Attn:
Harold R. Denton, Director i
of Nuclear Reactor Regulation Nuclear Regulatory Commission, Attn:
Benjamin H. Vogler, Deputy Antitrust Counsel James M. Hubbard O. Franklin Rogers l
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