ML20204F174
| ML20204F174 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 09/13/1988 |
| From: | Harrison R PUBLIC SERVICE CO. OF NEW HAMPSHIRE |
| To: | NRC OFFICE OF ADMINISTRATION & RESOURCES MANAGEMENT (ARM) |
| References | |
| CON-#488-7059 NYN-88124, OL-1, NUDOCS 8810210527 | |
| Download: ML20204F174 (12) | |
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Robert J. Harrison Prescient and Cniet becuwve ov.e, OX KETED NYN 48124 Pubile Service of Now HompeNre S*Pteaber 13,198Sa3 EP 13 P3 M U. S. Nuclear Regulatory Commission Washington, D.C.
20555 Attention:
Document Control Desk Referencest a) Facility Operating License NSF-56, Docket No. 50-443 b) USNRC Letter dated August 11, 1988, "Financial Coverage for the Cost of Low Power Operation - Request for Additional Information", B. Boger to R. J. Harrison c) PSNH Letter dated August 31, 1988, "Ret Request for Additional Information", NYN-88115 in Docket No. 50-443 Ret Second Supplemental Response to Request for Additional Information
(
Gentlement In reference (b), the NRC requested clarification with regards to the l
applicants' ability to provide financial coverage for the cost of low power operation of Seabrook and the cost of any permanent shutdown of the facility and maintenance in a safe condition following low power operation.
In reference (c), PSNH furnished detailed responses and indicated that a further l
response to NRC Question 4 would be filed on or before September 15, 1988.
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Enclosed herewith is a Supplemental Response to NRC Question 4 in l
reference (b), together with the attachments referred to therein. This l
l provides a description of the further progress which has been made in developing arrangements to cover through 1989 MWEC's share of the costs referred to in reference (b). 59eause these arrangements are inextricably I
interrelated to the broader complex issues af fecting HWEC's role in the l
Project, they could not be put in final form by our self-imposed deadline of l
September 15. However, the final details will be provided as soon as they are available.
If you need any further information or clarification, please contact the undersigned, or Edward A. Brown, President and CEO of New Hampshire Yankee Division.
00913 Very truly yours, N
g
- . J. Harrison h
RJHtic Enclosures cc Service List 1000 Etm SL P.O Box 330. Manches'er. N4 03105 Te'ophone (603) 669-t000. TWX 7102207595
OctKtite une j
'88 SEP 13 P3 M8 I
SERVICE LISI y'
Copies of the foregoing letter with its' enclosure are being sent by federal express to the following individuals:
Lando W. Zech, Jr., Chairman Kenneth M. Carr, commissioner U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission One White Flint North one White Flint North l
11555 Rockville Pike 11555 Rockville Pike Rockville, MD 20852 Rockville, MD 20852 4
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Kenneth C.
Rogers, Commissioner Thomas M. Roberts, Commissioner 1
U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission commission i
one White Flint North one White Flint North 11555 Rockville Pike 11555 Rockville Pike Rockville, MD 20452 Rockville, MD 20852 Frederick M. Bernthal, Commissioner U.S. Nuclear Regulatory Commission One White Flint North i
11555 Rockville Pike
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Rockville, MD 20852
)
Alan S. Rosenthal, Chairman Howard A. Wilber I
Atomic Safety and Licensing Atomic Safety and Licensing i
Appeal Panel Appeal Panel I
U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission 1
East West Towers Building East West Towers Building i
1 4350 East West Highway 4350 East West Highway l
1 Bethesda, MD 20814 Bethesda, MD 20814
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Thomas S. Moore Mr. Richard Donovan Atomic Safety and Licensing FEMA l
Appeal Panel Federal Regional Center i
U.S. Nuclear Regulatory 130 228th Street, S.W.
j Commission Bothell, Washington i
East West Towers Building 98021-9796 J
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4350 East West Highway
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Bethesda, MD 20814 e
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Administrative Judge Sheldon J.
Robert Carrigg, Chairman Wolfe, Esquire, Chairman **
Board of Selectmen i
l Atomic Safety and Licensing Town Office i
i Board Panel Atlantic Avenue i
U.S. Nuclear Regulatory North Hampton, NH 03862
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Commission l
East West Towers Building
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4350 East West Highway Bethesda, MD 20814 1
Administrative Judge Emmoth A.
Diane Curran, Esquire Luebke Andrea C.
Forster, Esquire 4515 Willard Avenue Harmon & Weiss i
i Chevy Chase, MD 20815 Suite 430 1
2001 S Stret t, N.W.
Washington, DC 20009 i
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Dr. Jerry Harbour Stephen E. Merrill, Esquire j
Atomic Safety and Licensing Attorney General Board Panel George Dana Bisbee, Esquire i
U.S. Nuclear Regulatory Assistant Attorney General Commission Office of the Attorney General i
East West Towers Building 25 Capitol Street j
4350 East West Highway Concord, NH 03301-6397 Bethesda, MD 20814 Sherwin E. Turk, Esquire Mr. J. P. Nadeau Office of General Counsel Selectmen's Office U.S. Nuclear Regulatory 10 Central Road i
Commission Rye, NH 03870 l
One White Flint North, 15th Fl.
11555 Rockville Pike Rockville, MD 20852 i
i Robert A.
Backus, Esquire Carol S. Sneider, Esquire j
Backus, Meyer & Solomon Assistant Attorney General i
116 Lowell Street Department of the Attorney I
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P.O. Box 516 General 1
Manchester, NH 03105 One Ashburton Place, 19th Fir.
Boston, MA 02108
)
l Philip Ahrens, Esquire Mr. Calvin A. Canney l
Assistant Attorney General City Manager j
Department of the Attorney City Hall 1
General 126 Daniel Street l
Augusta, ME 04333 Portsmouth, NH 03801 l
- Also Lent to home address, i
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Paul McEachern, Esquire R. Scott Hill-Whilton, Esquire f
Matthew T. Brock, Esquire Lagoulie, Clark, Hill-Shaines & McEachern Whilton & McGuire i
25 Maplewood Avenue 79 State Street P.O. Box 360 Newbu ryport, MA 01950 Portsmouth, NH 03801 t
Mrs. Sandra Gavutis Mr. Peter S. Matthews 1
Chairman, Board of Selectmen Mayor I
RFD 1 - Box 1154 City Hall j
Route 107 Newburyport, MA 01950 j
Kensington, NH 03827 l
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- Senator Gordon J. Humphrey Mr. William S.
Lord
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U.S. Senate Board of Selectmen l
l Washington, DC 20510 Town Hall - Friend Street l
l (Attn Tom Burack)
Amesbury, MA 01913 l
- Senator Gordon J. Humphrey L
One Eagle Square, Suite 507
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Concord, NH 03301 (Attn:
Herb Boynton) l Mr. Thomas F.
Powers, III i
4 Town Manager l
Town of Exeter i
10 Front Street l
I Exeter, NH 03833 l
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H. Joseph Flynn, Esquire Charles P. Graham, Esquire i
j Office of General Counsel Murphy and Graham j
Federal Emergency Management 31 Low Street i
Agency Newburyport, MA 01950 l
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500 C Street, S.W.
i Washington, DC 20472 l
Gary W. Holmes, Esquire Richard A. Hampe, Esquire
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Holmes & Ells Hampe and McNicholas l
47 Winnacunnet Road 35 Pleasant Street l
j Hampton, NH 03841 Concord, NH 03301 l
1 Judith H. Mizner, Esquire 79 State Street, 2nd Floor l
1 Newbu ryport, MA 01950 5
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- U.S.
First Class Mail I
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6 Enclosure to NYN-88124 l
f NRC Ouestion No. 4 1
j Provide a detailed statement of the joint owners' plan for covering the 11.6 percent share of Seabrook costs that is l
I no longer being paid by Massachusetts Municipal Wholesale Electric Company (MMWEC).
Identify any new or prospective l
I owner (s) or other participants) in the project and describa j
in detail the arrangements for their participation and for i
covering the share of costs formerly paid by MMWEC.
Describe I
1 how MMWEC's share of costs will be covered by the time low
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power operation is authorized.
(For this purpose assume that l
g low power authorization is received after September 1, 1988.)
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Suoclemental Resconse to NRC Ouestion 4t On June 1, 1988 when MMWEC announced its intended 1
i "withdrawal from the Seabrook Station nuclear project", and I
j that it would maxe no fu-ther payments to the Seabrook I
i Project and that it would seek an agreement "to take MMWEC out of the project in a financially responsible manner", the i
Project account referred to in Response to NRC Question 2 (see reference (c)) contained a positive balance in MMWEC's i
favor sufficient to cover MMWEC's share of the anticipated
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l billings for the month of June and part of July.
On July 13, j
1988, Northeast Utilities ("NU"), the registered holding I
company parent of The connecticut Light and Power company j
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("CL&P"), one of the Joint owners, announced that it would J
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advance sufficient funds in lieu of the MMWEC obligation to
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permit the Project to meet its obligation through August, i
1988.
On July 20, 1988 $2,249,000 was advanced to the l
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Project by NU, which covered MMWEC's share to September 9, 1988.
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On August 30, 1988 NU delivered to the Project its i
l commitment that CL&P would "cover the shortfall in seabrook l
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Project costs resulting from (MMWEC's) failure to meet its contractual obligation to the project" (see Attachment 1).
j This commitment extends through November 30, 1988.
This i
commitment expressly excludes real estate taxes, but all such 1
j taxes coming due on or before November 30, 1988 have already f
J been paid.
On August 31, 1988, $1,067,000 was advanced to the Project by CL&P which covr, red MMWEC's share for the f
balance of September.
This commitment will permit the f
Project to "cover" the MMWEC share through November 30, 1988.
f on September 10, 1988, MMWEC announced a tentative i
i settlement which, subject to preparation of final contracts l
and obtaining requisite approvals, among other things assures financing of its share of the Project through 1989.
This I
agreement among MMWEC and the other Joint Owners of Seabrook j
"over MMWEC's continued participation in the project... caps
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(MMWEC's) financial exposure to Seabrook and provides a i
j vehicle for... (getting) out of this project" and also
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provides for payment of MMWEC's share of the Project costs j
i until the earlier of commercial operation or cancellation of l
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Seabrook Unit 1.
The relevant substance of th),a agteament j
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follows (see Attachment 2):
An independent power producer i
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("IPP") commits to advance to the Project all funds necessary i
l to pay MMWEC's share of the Project's on-going expenses, including low power operations and real estate taxes, up to l
an aggregate of $30 million.
MMWEC commits to sell, when Unit 1 begins commercial operation, but at a price to be i
negotiated now, the portion of MMWEC's Ownership Share of t
seabrook attributable to those participants in MMWEC that do not desire to retain their interests in MMWEC's Ownership i
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Share.
This arrangement assures the Project a reliable cash 4
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flow more than sufficient to cover MMWEC's share of the l
presently estimated Seabrook operating costs during the f
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period through the ear)ier of commercial operation or the and f
of 1989.
1 The IPP will not become a "participant" or "Joint owner" l
of Seabrook Station by reason of this agreement.
If some or l
all of MMWEC's interest in the Project is ultimately l
i purchased by the IPP or another entity, then an appropriate license amendmer.t would be filed with the NRC at that time requesting any necessary approvals for the transfer of the l
appropriate portion of MMWEC's interest to the purchaser.
j MMWEC remains primarily liable for its share of any shutdown l
costs which would be incurred if permanent shutdown were to l
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j occur up to an aggregate of $10 million, any excess thereof f
attributable to MMWEC's share being assumed by another Joint owner.
While the aggregate of these latter costs as defined l
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in the Joint Ownership Agreement would be substantial, the Response to NRC Question 1 (see reference (c)) indicates that I
the decontamination and disposal costs inherent in any permanent shutdown after only low power testing operations l
3 which would be necessary to "reduce residual radioactivity to l
i a level that permits release of the property for unrestricted use" as contemplated by NRC Regulation are relatively small.
i see 10 CTR $50.2.
If such a shutdown were to be required,
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the Joint Owners would expect that these commitments would be f
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i sufficient to cover MMWEC's shars of such costal however, as l
licensees of the NRC, the remaining Joint owners would meet their collective responsibility to see that the facility was j
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properly brought to permanent shut down in a timely and safe I
manner so as to permit prompt license termination and would then enforce their legal rights to contribution against other
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' to NYN-38124
.rialtTHi!A!iT ITI'ILrl'II!!I (2 pages) o.,,,,i on4... a.,on cone.uca h
hAR Fo D.CcNNEcTICUT C614M270 a:==:=
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Wu.UAM B ELUS ewam.v m emar rrecunve cmeda August 30, 1988 Mr. John F.
G.
Eichorn, Jr.
Chairman & Chief Executive officer Eastern Utilities Associates P.
O. Box 2333 Boston, Massachusetts 01207
Dear John:
This letter is sent to you in your capacity as Chairman of the Seabrook I sject Executive Committee, and is intended to confirm our understandings about the nature and duration of the funding commitment that The Connecticut Light and Power Company (CL&P) is making to cover the shortfall in Seabrook project costs resulting from Massachusetts Municipal Wholesals Electric Company's (MMWEC) failure to meet its contractual obligations to the project.
On or before August 30, 1988, and then on or before the 20th days of September and October, 1988, CL&P will make the payment that is projected by the New Hampchiro Yankee Division (NHY) of Public Service Company of New Hampshire (PSHH) as then being necessary to carry the funding allocable to MMWEC's share of the 1
costs of the Seabrook nuclear project (the Project) through the end of the month following the date in which payment is made.
As of the date hereof, such amounts are estimated to be approximately as follows:
Payment Date
,F_unding Through Amount August 30, 1988 September 30, 1988
$1.1 million September 20, 1988 October 31,' 1988
$1.4 million october 20, 1988 November 30, 1988
$1.7 million
$4.2 million*
- Plus an additional amount estimated at $210,000 as a special assessment with respect to PSNH pension costs attributable to NHY omployees and an additional amount estimated at $800,000 as the ramp-up costs associated with the issuance of a low-power license if those ramp-up costs are incurred prior to November 30, 1988.
CL&P's payment obligations are limited to the Project costs projected by NHY and approved by the Executive committee of the Project, provided, that wi.thout CL&P's written consent CL&P will not be obligated to make payments that on a cumulative basis exceed by more than ten percent the projected amounts given in the above table and the associated foetnote, and provided further, that CL&P will not make any payments with respect to property taxes associated with HMWEC's ownership share of the Project.
We wish to make it clear that these payments are being made only to provide necessary funding to cover the deficiency resulting from MMWEC's fallure to pay.
CL&P has not assumed MMWEC's contractual obligations and is not making these payments on MMWEC's behalf, so these payments should not be construed a,s curing MMWEC's deficiency.
Beyond that, MMWEC retains all of its contractual responsibilities as a joint owner, including responsibility for covering the costs of lov power operation and costs of a permanent shutdown of the facility and maintenance of the facility in a safe condition after a period of low power operation, if any of these costs are incurred prior to November 30, 1988 and exceed the amouGts committed by CL&P in the preceding paragraphs, or if those costs are incurred on or after November 30, 1988.
As a joint owner, MMWEC retains all nuclear risk (including Price-Anderson and decommissioning), and CL&P assumes none of MMWEC's respon.*ibility.
Very truly yours, s
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cc CEOs of Seabrook Joint Owners RPW(VAX)/ltw to NYN-88124 (2 pages)
A P
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news release "*?(@%
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For Immediate Release September 10, 1988 MMVEC AND JOINT OVNERS RE.ACH TENTATIVF SEABROOK SETTLEMENT Massachusetts Municipal Wholesale Electric Company (MMVEC) today announced a tentative settlement with other joint owners of Seabrook over MMVEC's continued participation in the project.
"On June 1,1988, MMVEC adopted a Strategic Plan of Action designed to take itself out of the Seabrook project in a financially responsible manner. Since that time we have been enga5ed in tough negotiations to achieve this objective," said M EC Ceneral Manager 1
Cary L. Hunt. "The tentative settlement caps our financial exposure to j
Seabrook and provides a vehicle for our participating municipal light departments to get out of this project," Hunt said.
"In reachin$ this settlement agreement, we have had to compromise on issues of timing because of the enormous political, regulatory and economic uncertainties surrounding this project," he said, l
Under tertas of the settlement, which must be ratified by t'e N EC Board of Directors and other parties, and is subject to govern = ental j
approvals:
1.
An independent power producer will make all M EC Seabrook payments to the project until the comnoccial operation date or cancellation, and MMVEC will be credited with a3.1 payments made on its behalf since SEC stopped making payments June 1, 1988 thus resolving all issues about an W EC default on its Seabrook obligations; more FOR MCGI MORM ADON CONtAC7 OAVO fUCHEY. P O SOX 426. LUDtOW. MAS 3. 01066 413/849 4141 ASHBURNHAM - BILMONT - SOAlf0N - CHCOPit - CONCORO - DA#v198 - GEORGITOWN - GROTON HiNGHAM - HOLDIN - HOWOtt - HUCSCN - Hutt - iP1wiCH - UTTttTON - MANSFi!LD - MIRRIMAC - MAAtttHEAD MCQttBOROUGH - MCOLifCN - NORTH AlftflOROUGH - PAXTON - PRINCITON - READING - ROWifY - $HREW$$URY -
WilfNELD W1$f80Yt$f0N flMPtiTON WAAIF1tLD SOVfH HADLEY SitRUNG
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u 2.
Upon commercial operation, an independent power producer will purchase or acquire capacity or output associated with interest attributable to any MMWEC participant that wants to get out of the project, contingent upon terms and conditions to be negotiated.
3.
MMWEC's cancellation or abandonmant exposure will be limited to a maximum of $10 million down from the present estimate of $60 million (MMWEC has the funds necessary to cover this exposure in the bank because of its decision to stop making additional investments in Seabrook last June);
4.
MMWEC will receive $3.5 million in cash as reimbursement for legal and other costs; 5.
All claims against MMWEC will be released in exchange for MMWEC releasing all claims against the joint owners and others.
"This tentative agreement provides a clear resolution of the Seabrook issue for our members no matter 5 hat happens to the project from this point forward," Hunt said.
"With this situation stabilized, we can now turn our attention to the remaining strategic objectives of restructuring our debt and moderating our rates for ratepayers," Hunt said.
Documents implementing this tentative settlement agreement are being dratted and Hunt said he expected final approval within about 45 days.
30
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