ML20236P829

Supplemental Response on Behalf of Seacoast Anti-Pollution League (Sapl) to Applicant Motion for Vacation of Stay.* Sapl Wishes to Suppl 871009 Response Re Imminent Bankruptcy of Util.Related Documentation Encl.W/Certificate of Svc

ML20236P829
Person / Time
Site:	Seabrook
Issue date:	10/20/1987
From:	Backus R BACKUS, MEYER & SOLOMON, SEACOAST ANTI-POLLUTION LEAGUE
To:	NRC COMMISSION (OCM)
Shared Package
ML20236P780	List: ML20236P778 ML20236P791 ML20236P829 ML20236P860
References
OL-1, NUDOCS 8711190024
Download: ML20236P829 (19)

Text

1

. (

UNITED STATES OF AMERICA G 'DI Do W a NUCLEAR' REGULATORY COMMISSION'

,Q g p. .q} .

before the '

pocrenno o -

pencErRA))CU ,

THE COMMISSION B#

/

.In the' matter of ) Docket No. 50-443 OL-PUBLIC SERVICE. COMPANY OF- )

NEW HAMPSHIRE, et al ) Off-site Emergency Planning .

~

)  !

(Seabrook Station, Unit'1). ) l SUPPLEMENTAL RESPONSE ON. BEHALF OF THE SEACOAST ANTI-POLLUTION

. LEAGUE TO APPLICANTS' MOTION FOR VACATION OF STAY j Int'roduction By. pleading dated October 9, 1987, the Seacoast Anti-

. Pollution League (SAPL) filed its Response to the Applicants' September 21, 1987 Motion for vacation'of Stay of authorization of j i

low' power operation at Seabrook.

J In the course of that response,.SAPL respectfully requested until October 16 to file a supplemental brief, on the grounds that it had been fully. occupied with preparing and litigating the New Hampshire radiological emergency plans, now under consideration by an Atomic and Safety and Licensing Board Panel in Concord, New Hampshire.

At this time, SAPL wishes to supplement its response, in regard to the first issue SAPL raised, the imminent bankruptcy of  ;

j Public Service Company of New Hampshire.

Bankruptcy of Public Service Company of New Hampshire

1. Since SAPL filed its response on October 9, the Board of Directors of PSNH has met, and formerly voted to approve h 0 h G

Fftf  ;

.o m; #

5:

i

n + ,

~ 2- :

a .

1 management's decision not to pay an: interest' payment dueJon I OctoberL 15.; Therefore, at=the time the Commissionfreceives this J

pleading, PSNH will' forma 11yJbe in' default on a major, debt K obligation.J'It is'-SAPLs. understanding,that this default can be cured _within~a 30fday grace period,2after which PSNH wouldtbe- -l c ,

i fvulnerable to anLinvoluntary petition.under the Bankruptcy Code. .)

SAPL:has'also learned that, in proceedings pending before the 3 New Hampshire Public Utilities Commission, Doc.ket No. DR 87-151, PSNH has. set out the consequences which'it feels would follow from Ea bankruptcy which appear to be substantially at variance with the information' furnished to'the commission's staff by letter dated September 3,- 1987. That letter answered interrogatories directed to PSNH by the:NRC staff on the effects its financial difficulty i might:have on meeting its obligations as a licensee. In particular,Lon pageid of the Response, PSNH stated:

'"TheLinitiation offbankruptcy. proceedings for PSNH would not of itself" affect the obligations of PSNH.under the joint ownership agreement to pay currently its share of Seabrook's low power operating' costs and to pay ultimately its share of the . cost of permanently shutting down the facility and

maintaining it in a~ safe condition....Even if a bankruptcy

, - proceeding were to intervene, PSNH has no intention of rejecting its contractual obligations under the Joint Ownership Agreement'or abandoning its interest in Seabrook Station. In the event of bankruptcy, PSNH, as debtor in possession ~, will have access to a cash flow from its continuing utility operations substantially equivalent to that currently generated by those operations and must be assumed to have access to external borrowings for administration expenses. These combined resources would be more'than sufficient to meet PSNH's share of the Seabrook L

L station low power' operating costs (as enumerated above) due in principal part because PSNH would have been temporarily relieved of the obligation to pay interest charges on its outstanding unsecured indebtedness incurred prior to the institution of the proceedings. If Seabrook Station were subsequently shut down, these resources would similarly be sufficient to cover PSNH's share of the shut down costs enumerated above....."

l l

(

y ,

5 L

3. , ,

,,l" i  ;

/

L' [ .1 . -32 ,

L ThisLstAtement, flatly stating that there would be no questionTaboutlPSNH'sl ability 1to' meet its_ obligations,Lshould be.

contrasted'Oith a SeptemberE9 data' response filed'in an_ Emergency; j i

~

~

Rate Increase Docket before the New-Hampshire Public. Utility (]

1 Commission, DRL87-151. "This' response to. request no.-20 is attached hereto'. ,

In'thisiresponse, PSNH claims that  !

l "Furthermore,'the ability to. raise cash 1for< future service commitments 7during a: Chapter 11 proceeding would-be=very . .

limited. Also, Chapter 11.would. impact on. service reliability and'availabilityfof power.; Some'PSNH, assets might;be Lrequired.to be sold off during.a bankruptcy,Lsuch as'PSNH's-share'of'its investments in Vermont Yankee and Maine Yankee,.

further exacerbating a current. capacity deficit."

]

SAPLLrespectfully submits that-the. positions of PSNH as to

-the effect of a-bankruptcy'on its ability'to meet its obligations

.have not'been consistently stated to this Commission and to the New Hampshire Public' Utilities Commission, and that the Commission

- should.not. proceed to authorize low power operation in the' face of l

., these different. responses. ,

In ALAB 422, the Appeal of 'he t Licensing Board Decision I

authorizing a construction permit issued July 26, 1977, SAPL )

l previously raised the issue of PSNH presenting conflicting claims ]

on its financial condition to different regulatory agencies, in f

-l that case the Federal Energy Regulatory Consission on the one hand, (in attempting to get the allowance of CWIP charges), and

)

1

v

_4_

the'ASLB (in attempting to demonstrate its financial qualifications under the existing regulation). In responding to this the Appeal Board noted:

"On a close analysis, what Mr. Harrison told the Licensing Board might possibly be reconciled with his testimony before the other bodies." (Slip Opinion, page 100).

The Appeal Board went on, in a footnote, to state as follows:

"That is not to say that we are insensitive to the vice inherent in different stories being told to different legislative or regulatory bodies. At least in the absence of changed circumstances or other substantial cause, such a practice is worthy of condemnation even if, as seems to be the case here, perjury is not involved."

(Footnote 53, page 102.)

Lastly, SAPL would like to point out to the Commission the position of PSNB's lead counsel before the Appeal Board during the construction permit proceedings, where the issue of bankruptcy was 4 raised. At this time, the Commission still had in place a financial qualification requirement argument before the Atomic Safety-and Licensing Board. After issuance of the construction permit, counsel for PSNH was queried about the relevance and applicability of the financial qualification requirement. A copy of the relevant transcript pages is attached hereto.

During the argument, Appeal Board member Michael Farrar asked l

l the following question:

<' j p,. .

. u

!l L

1 Mr. Farrar: Mr. Dignan, can your people ever lose on financial qualifications? I really seriously began to j wonder. /

Mr. Dignan. I am dead serious with it, too. I don't think i we can or should Mr. Farrar... l

.Mr. Farrar: It's really a non-issue.'You.-

Mr. Dignan: No. It's not a non-issue. I think you could;

-have a situation, I don't think you have it here, you could have a situation where, say, some utility came.in, bit off a big chunk.of nuclear, and you took'a look at it and, you l know, the thing was either bankrupt or.close to it, I think you'd have to deny them a license." (See attached transcript at.pages 257-58, 260-261).

Respectfully. submit'ted, Seacoast Anti-Pollution League

By its Attorneys BACKUS,.MEYER - p'LOMON

. Dated: October 20, 1987 ,; " ,

/ // _ '

Robe A(' Bac,kaf' 116 well Street Man'chester, NH-.03105  ;

1 1

L: _

- _ - _ _ _ _ _ __ ____j

i t

CERTIFICATE'OF SERVICE I hereby certify that a copy of the above and foregoing

" Supplemental Response on:Behfalf of the.' Seacoast Anti-Pollution League to ' Applicants' Motion for Vacation of Stpry-was sent this date, first class mail, postage prepaid, tf all naines on- the attached. service list.

Rob ~. B,adkus e (, g y .

g* sr 4 IN

'Q(9l m -

l I

l 1

l 1

i' Q MANCHESTER UNION LEADER

,N OCTOBER 8, 1987-P

• 4** - -

• 9 .>

PSNH Default .

~

~

v On Debt Looms By WENDY MITMAN operates commercially. ed during the current rate in.

CONCORD (AP) - Public Also on Wednesday, PUC crease hearings on an alterna-

• Service Co. of New Hampshire Chairman Vincent Jacopino tive ballout plan.

- management will recommend said the panel is considering ' The alternative plan was pro .

to its board of directors that it broadening the scope of the ' posed by Consolidated Utilities

,~ default on a $37 million interest . hearings by combining the rate ' and Communications Inc. of payment due next week, a utill ' request with review of the debt New York, a consortium of ty official said yesterday. , _ . restructuring plan whi~ch had bondholders which claims to been slated to begin on Oct.14. own or control enough Public Charles Bayless, the compa- ..The commission then set a Service bonds to defeat the ny's financial vice president, Monday deadline for all parties company's debt restructuring'

.. told the New Hampshire Public in the case to submit comments plan. CUC.has until Monday to  !

e Utilities Commission that the on consolidating the two issues. file testimon'yon its proposal.

': board has the option of reject- The commission suggested , CUC Chairman Martin Whit-ing the recommendation when combining the cases after PUC man told The Union Leader his; it meets Tuesday. staff lawyer Martin Rothleider company now controls more.

.:Bayless offered no predic- said testimony may be present- PSNH > - . Page 22 tions on creditors' reactions ~if _- . .

the company defaults on the l'

~

Oct.15 payment. However, the !

. company has said possible non-payment might prompt credi-tors to take the company to bankruptcy court. . .i The PUC is holding hearings .

. on a 15 perc'ent emergency rate hike request which the compa-

ny says it needs to avoid filing'

} for bankruptcy protection from t its creditors. The utility also says it needs to restructure $1.1 billion of its debt to remain sol.

vent. -

The company is strapped by its $2.1 billion investment in the Seabrook , nuclear plant. State

. ~ law bars it from recovering for

.j its investment until the plant 1

l l

1 .

1*

e

n'60t*- OBO mEltn Cn Fu3fic @rcCce. h5FtTifzr:d invsstersTy mortgagt bonds, cr more than scenarios cf life '.undtr bink-y"i m " ' 50 percznt; of ths; company's ruptcy. i third mortgage debt. Whrn ths "The bankruptcy Ef a public t--

\. CUC plan wasinitizlly unvail d utility is to uncIrtain . . ..wp

'b.. about three man said, theweeks ago,. Whit firm owned only can havetellbutthem options I don't they mayl think anybody

$70 million of that category of knows ' what will happen . '. .

.. . . bonds. I've heard the whole gamut of Y In an ' interview, Whitman what may happen " he said.

'W> " '

said PSNH's plan is " dead in - "I know from . talkingilto i J, ~ the water. We have no intention creditor groups that they would "

of exchanging our bonds or let* want to come in full steam and ting their plan go forward." ~ increase rates . . . I think you Third mortgage bondholders would see a lot of pressure and .

could be key to the success of a lot less concern for the cus.

the company's proposal. . ," t6mers" under bankruptcy, he Public Service + has . already rejected CUC's bailout: plan,' said.. Bayless said the 15 percent saying the utility ; has little increase "is . fairly make or room to negotiate. break."

Utility, lawyer Martin Gross "You can take bites out of it said the company might run 'here and bites out ofit there but '

out of money in the . time it every bite you take will add up takes regulators to considei the sooner or later," Bayless said.

J' CUC plan. .

ic "Any effort to prolong thesehearings, . Also during FrancisWednesday's

- . Jeffries, proceedings is an effort I have 'i

. ~ to be concerned about," Grossofficer president andand of Duff chief- executive Phelps Inc.,  ;

said, a Chicago-based investment re- '

Consumer Advocate Michael search firm, said unless Public 1 -

'i Holmes countered that while Service gets the rate increase,

" haste may help Mr. Gross and -

1.

, his client . . . it certainly im itcember,will be out evenof with money strictincost-De.

perils the ratepayer," cutting. .

.:'i

+

Iacopino said the commission - Considering thelCUC plan

'. - has to hear any . information would take.so long that Public

'. M that may help it decide both Service would still , need the

- ~ matters. " rate increase to survive, . he

. . The CUC plan would freeze rates for three years and place. said.

Staff wrlier .Tohn Distaso .

Public Service's 36 percent in-; contributed to this report.

terest in Seabrook into a new,j separate company to help al leviate the company's financial, ] i burden. CUC is also willing to: -

invest as much as $100 million:

to reorganize the utility. , ,

,CUC lawyer Elias Farrah said the group wants a witness; to testify on the plan to elaboy rate on it and to clarify other' '

. witnesses' testimony.

Bayless said it's unclear whether the company's res-tructuring plan will succeed without CUC support.

"We are actively looking at that to determine if we need the third mortgage bondholders to go along. . . . obviously as a

. company we would have a lot )

more cash and would be a lot! >

more comfortable if they did.l But we have not determined if it would be fatal to the plan if ,

they did not," Bayless said.

The company is looking at a closing date for the plan of as late as April 1, "but certainly we would like to have it before that," he said. -

h- ,

\

I

=_.____-.._-_j. _

' * ' * ~

l: .;-

Enclosure to NYN-87104 I i

NRC Question 1:

i Please providh detailed estimates of'(a) the total cost  !

L, to operate Seabrook Unit No. 1 at. low power only.(up to five-percent power); and (b).the' total cost to permanently shut' down the facility after low power operation.only and to maintain it in a safe condition. Also provide an estimate of the cost to store or dispose. of the irradiated fuel assuming low power operation only. Describe in detail the assumptions underlying the estimates. Include assumptions as to power level, duration of operation, method of fuel disposal or storage and method of permanent shutdown and safe maintenance.

L Response to NRC Question la:

The current. operating budget for Seabrook Station averages'510 million per month. In conjunction with the performance of. low power testing, certain incremental costs beyond the current operating budget will~be incurred. These costs, which cover all required manpower, material and electrical power for preparatory work, heatup and actual performance of low power testing, are estimated to be

$3,658,000, which will be incurred over a three month period. A further breakdown is included in Table 1.

PSNH's share of this cost is 35.56942%, as defined in the Joint Owners' Agreement, or approximately $1,301,000.

In addition to the above costs, there will be increased costs-incurred for premiums on insurance coverage for Seabrook Station associated with the receipt of the low power license and upon completion of low power testing. It is expected that this cost for insurance will increase by approximately $2,785,000 per annum, of which $1,565,000 will be paid upon receipt of the icw power 14 cense and $1,220,000 will be paid, in installments, following completion of the testing. PSNH's share of these increased premiums, aggregating approximately $991,000, would be payable at the times indicated above.

Resoonse to NRC Question lb:

Seatr::k Stat on's low power testing program calls for five :: ::x days of : intermittent testing at between 1/100th of 1% power and 1/10th of 1% power followed by two days of

intermittent testing at'2% pcwer and one-half day of intermittent testing at 3% power. These tests will result in a fuel burn-up of approximately equivalent to 1-1/2 ,

I l

t ATTACHMENT 3

e

• ieffective' full' power hours and will occur over a period pf three weeks.

Upon completion of the testing program, the unit would be_ cooled down and maintained in a cold shutdown (Mode 5)-

condition. Depending on the licensing status at that time,

' certain systems could be placed in a lay-up condition to afford maximum protection of plant equipment. The costs associated with these efforts are included in the normal operating budget _of $10-11 million per month.

If the unit was permanently shut down at some point

.following low power testing, the fuel would be moved to the spent-fuel storage pool. In addition, the reactor coolant systems, decay heat removal systems and associated auxiliaries would be decontaminated, as.necessary,.following this short duration of low power testing. These systems would be cleaned by flushing the systems, hydrolysing, and/or localized chemical cleaning. This e, leaning process would be repeated as necessary until contamination levels have been reduced below required control limits. The radiological controlled area would then be limited to the Fuel Storage Building and associated auxiliaries. The operating costs during this phase are not expected to exceed the normal budget of $10-11 million per month.

In the unlikely event of a decision to permanently shut down the unit, the Joint Owners would seek to sell or transfer ownership of the fuel to others such that the fuel could be removed from the site. It is estimated that it would take 2-3 years before the fuel could be removed from the site.

In order to dete'r'mine the actual salvage value of the fuel after the low power testing program, a market analysis would have to be undertaken at that time together with a study of special costs for handling and shipping the fuel.

Although the Joint Owners have not performed a rigorous study of these costs. a review waa performed i ts late 1986 which indicated that the salvage value of the fuel would approximately offset the costs of handling and transportation of the fuel to a third party resulting in no net cost to the Joint Owners for the disposal of the fuel.

Following a permanent shutdown of the unit and during the transition period when the fuel remains on-site, certain personnel and program costs would be incurred to ensure the proper storage of the fuel in the on-site spent fuel storage pool. These direct cests are estimated te be apprcx mately 5700,000 per month wh::h includes costs for :perati:ns, maintenance, health physics, envircamental monitoring, security and electric power.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - . . - - - - - _ _ . - - _ - . _ .-----a

e 4 "

'In inddition, - cortain nuclear: liability and nuclear property. insurance' costs,Jestimated not to. exceed,$2.5 canLalso'be expected to be in:'irred.

million p',er year, Finally, hhere.are other' miscellaneous costs which are directlygrelated.to maintenance of the facility,nincluding such items as taxes, legal, accounting, and~other administrative' costs, which are,not. included'in the $700,000 monthly estimate provided above. While Ethe amount of these costs 1cannot be precisely. estimated, they-areLnot expected to exceed the' current level of;such expenditures or approximately $2.2 ' million per month, 'which, includes $1'.8.

million for taxes. Therefore, the estimated total monthly-operating cost for Seabrook Station while,the fuel is being stored'on site 11n the fuel storage building is'not expected

.to exceed $3.1 million. t As indicated in ' response. to question 1(a)', all the above monthly; costs are.for the entire. unit. PSNH's. share of

'those potential costs would-be-in proportion'to its ownership share (i.e., 35.56942%), or $1.1.million per month.

NRC Question 2:

Please provide a detailed statement of.the source of

~

. funds for covering total costs of low power operation and total _ costs.of permanent shutdown of the facility and maintenance-in a safe condition after a period of low power operation only. Identify each of the sources as to when it will be'available and estimated dollar amount. Indicate the assumptions' underlying the projection of each source of

' funds.

Response to NRC Question 2:

The Seabrook Project is currently being funded by several utility companies (the " Joint Owners") which are participants under the Agreement for Joint Ownership, Construction'and Operation of New Hampshire Nuclear Unite, dated May 1, 1973, as amended-(the " Joint Ownership Agreement"). The Ownership Shares of these utilities are i shown in Table 2. Approval for funding is determined by the Joint Owner Executive Committee or the Joint Owners collectively in accordance with the procedures set.forth in the Joint Ownership Agreement. Once a funding level has i

been established, each Joint Owner is obligated under the ~

Joint Ownership Agreement to provide its Ownership Share of the operat;ng expenses of the Seabrook Project. Invoices are rendered as required and payments are due monthly. Each Joint Cwner raises such funds as part of 1:s normal financial. sources. The Seabrook Froject maintains a positive cash balance to be available to meet its monthly f

I i>

f

\

l

obligations and to provide additional flexibility should fluctuations in monthly cash requirements occur. This  !

account balance, supplemented by the Joint Owner payments, is the source for meeting Seabrook Station's cash operating requirements.

l NRC Question 3: ,

l In the event that Public Service Company of New Hampshire (PSNH) were to enter bankruptcy proceedings how would this affect PSNH's ability to pay its share of Seabrook's low power operating costs and the costs of permanently shutting the facility down and maintaining it in a safe condition? If PSNH were unable to pay its share of costs, what are the sources and likelihood of availability of funds to cover the PSNH's share? Please describe in detail?

Response to NRC Question 3 The initiation of bankruptcy proceedings for PSNH'would not of itself affect the obligations of PSNH under the Joint Ownership Agreement to pay currently its share of Seabrook's low-power operating costs and to pay ultimately its share of the costs of permanently shutting doun the facility and maintaining it in a safe condition. (To the extent that such obligations are contained in executory contracts a debtor with bankruptcy court approval has a right to reject or affirm such contracts. However, because of the magnitude of PSNH's investment in Seabrook Station (approximately 69% of its total assets) and the potential significant level of revenues to be derived from the sale of Seabrook Station electricity by PSNH, PSNH intends to make every available effort to protect that asset. Even if a bankruptcy proceeding were to intervene, P SI has no intention of rejecting its contractual obligations under the Joint Ownership Agreement or abandoning its interest in ,

Seabrook Station. In the event of bankruptcy, PSNH, as debtor in persession, will have accecs te a cash flow from )

its continuing utility operations substantially equivalent  ;

to that currently generated by those operations and must be I assumed to have access to external borrowings for administration expenses. These combined resources would be more than sufficient to meet PSNH's share of the Seabrook Station low power operating costs (as enumerated above) due in principal part because PSNH would have been temporarily relieced of the obligation to pay interest charges on its outstand:ng unsecured indebtedness incurred prior to the

nstitution of the proceedings. :f Seabrc:P 5tation were i subsequently shut dcwn, these resources would s;malarly be  !

sufficient to cover PSNH's share of the shutdown costs enumerated above. Furthermore, if Seabrook Station were 1

w' -

yn n.' .

P

' shut ^down after completion of low-power testing,,it is

. reasonable to conclude that because of the; presence of.the

..nucl ear fuel'andLthe NRC license conditions with respect

.thereto, PSNH's obligation to Seabrook Station could not be ,

l avoided by it, as a debtor in possession ~(Midlantic National i Bank v. New Jersey Dept. of Environmental Resources,.474 U.S.f494 (1986)).and that.the cost-of meeting those obligations would-be an administration expense (In re-

-Sterns,-68 B.R. 774 (D.1Me. 1987)).

Given the' nature;of the on-going utility' operations'of i PSNH af ter an: assumed bankruptcy filing and'the ability and j

. obligation of PSNH,. as debtor in possession, to fulfil 1 Lits commitments'to the Seabrook Project and it.s present

' intention to do so, PSNH cannot. hypothesize any plausible situation:in which those obligations would remain unpaid.

V .-

l i

d m

9 5-s r

q<

I O C NBPUC Docket No. DR 87-151 PUBLIC~ SERVICE COMPANY OF NEV HAMPSHIRE l

RESPONSE TO DATA REQUEST '

FROM THE ,

NHPUC STAFF SET NO. 1 Request #20 Haking the same assumptions as the question immediately before, at what point, if any, vould it be in the customers interest for PSNH to file bankruptcy?

Response Please see response to previous question.

If PSNB is correct in its position that it is constitutional 1y entitled to just and reasonable rates which provide an opportunity to maintain its, financial integrity subject only to a restriction against exploitative rates, it would never be in.the. customers' interest for PSNH.to file bankruptcy.'. A Chapter 11 filing would not affect PSNH's entitlement to just and reasonable

(~} rates and would lead to additional costs, such as legal U fees, that are otherwise avoidable. Furthermore, the ability to raise cash for future service commitments.

during a chapter 11 proceeding would be very limited.

Also, Chapter 11 vould impact on. service reliability and the availability of power. Some PSNH assets might be required to be sold off during a bankruptcy, such as PSNH's share of its investments in Vermont Yankee and Maine Yankee, further exacerbating a current capacity deficit. Small power producers could likely find it much '

more difficult to raise cash to. develop projects since many are dependent on PSNH's ability to purchase output in their presentations to financini sources. PSNH, in bankruptcy, vould be faced with a need to find or build replacement capacity and to finance its acquisition or construction at costs which vould not be competitive.

Frederick R. Plett is responsible frr this response.

Big ytt/VL 0 1YU

,.7

l .' -

g m

~, . *', . . . . . . '

251 w

+s At this time the ownership remains as it was, that M 1 f,

2 transfer still has not taken place.

.i 3 14R. FARRAR: It's nice that your peoplo have a l

' ., f. ,

1

'y; >

', l5 d contract with those pcopic that said they can't back out. l i,

a . w: '

y v. ".., ,!. .'

5 Dut they said they're bac).ing out.  ;

)

e Tht.y said they are going to

- 6  !!R. dim 1AM: tio, sir. (

7 try to sell their participation. They are going to livo by [-

f And have been contribut- O

[

y.

8 ' that contract until they sell it.

ing to the coot of the project. This is'the way every one

? 9 10 of the joint companics in ticu rngland has operated. The f  ;

f. 4 i.

,: 11 stock of Vermont Yankco and 11aine Yankcc Corporations, ,

Y '

[

12 those are donc by the stock route instend of actual owner- '

[ .

13 ship of the unit, you cornit youracif int.o an agree.acnt to _

, [, it su'rv.wt the proicct, a core hell or high vater agreement, 15 we en11 it. And you're on the hook. 'l ,

[ Ilow , if you want out for o;.c rea ;on or nr.other, ,}

/ 16 V

t 17 you got to fin.2 a fir...ncic ly s;eali fied ; rticijant; and s i'

o.. the hool.. .1o enere in no gap in q la 12 you don't, yon're j ), thu financial qualification as long as you qualify the ~

20 original group, because there won' t be a tranafor over s 21 until such tino as the now ontity io qualified or it's sold .

to existing ontity and the staff is catisfied they can , ,

'fh y .. i .*; Ji Er,.22 . *h

(, .

^

23 take a biggor piece. ajj j

Mr. Dignan, can your pcopic ever lose

h. *'

, (.l,'g ',24 ,

HR. PARRAR I really neriously' began to k'h .

, l

[ ,

,./ 25

.on financial qualifications? h i Q .',; . l . , ,, ; ~,. ,

h.h[

) .

s ' .. ' ,,

z m 1 .. ,,

7, e- p;;. , ..a. 1 6 %- tax .er: % -

.i '. -

- % > A. ? ..

> - \

r..

t t '

LI.._....._....., , , , , ,

)

i

• W 4:o.lO W 09hn 6%ummtr irvow ryg NRcis Appd 2s,

%j wonder.'

e 2 I'm <!ead serious with' it, too. I

!!R. DIO::A:1: 1 l

3 don't th ink we can or should, !!r. IMrrar. t'ho t you raise, if we gt.;t acadenic, and inaybe we shouldn' t, is'the statute l h i

5 was put in there for a very good rc snon when it was put l

L 6 there, as I unid. Thorc was no Complianco Division or

~ #

ariything ulce at the time; and the worry of the Congress was 8 we have got this no.v technology, we don' t want ocaple.

a; up

' playing around with it who don' t h:ve the cash to pick g

10 the check if there's radiation lying around.

l

' II Indecd, if you read the whole power reactor 12 d velopment caso, which was the first case, there was real D cor.ccrn and demonstration there was ca:ih on the linc. As I.

9 Id , we . ave . one 'trourth and gone con nrelal with theno reactors, I

15 there's maybe been a relaxation of worry about the initial g;

bo 16 problen that Lothered Congreau leccaunc you have the

{

t.op vi things 30 propic aren't gr 17 Coui.liance Division on 18 going to be cutcing corncru.

n 19 11R. FARRAR: tiait a minute, wait a minute. That's a very nice arguinent, except it. doesn't work. The more we 20 4

look into how often these pcopic get out there, the fewer 21 32 times it scens they got out there.

j

- 23 HR. DIC11Ati: Yes, but on the cutting corners ,

N business, the QA records, at 1 cast our experience has brien it's go!.nej to keep that f rom hnpponinry. I know yott havo 25 p

N n

1 6 1 h ,

1 260 2

specific things, like when you go for an operating licenso l% 3 it's five years and shut down, and that sort of thing. -

4 so that they have, the statute as it speaks 5

financial qualifications could be argued into a situation 6

wherc yoa nad to have all the noney in t,hc bank before ii you started'to turn earth.

7 It's cicar by the regulations tna t 's not , wha t in r.ican t.

8 9

Now, what has developed is thu conccpt of looking at financial qualifications, do you have a financially sound 10 utility, and is there any reason to believo you don't have jo '

11 i a sane regulator. h And on that basis we find fina'ncial U qualifit.,ttion. i If you don't find financial qualification on g 13 that basis, I'll be perfectly candid with you, I think it's i t 14 j

N a s,and ..ay of finding, nobody can build a power plant, and .'

g3

, we can all start building coal pinnts right now beenunc 16 that's the way we built coal plants, on the theory that 17 ra te reli f, a.; 1:,

..es c.. :.n r , will La fcr th::o.;in.j. ' ,

, 'j That's the way we put up transmission in this 19 buninet:, that'-

t h e i n v * < r!n .w t h ! nn ' *n slo .

20 I 11R. FAP.RAR: It's reelly a non-issue. You --

MR. DIGNAN: No. It's not a noa-issue. I think you could have a situation, 1 don't think you have it here, 23 you could havc a situation whero,say, sor.1o utility came

1. ' )

in, bit of f a big chunk of nucicar, and you took a look at 25 it and, you know,. the thing was either bankrupt or cloco f

i

! 3%. ,

-j J \

"r:; e 261 &

8 to it, I think you'd havo to deny them a licenso.

l ,, 2 I.think it's going to be a non-issue on most ,

3 casos .to como beforo you in the sense of anything roa3 .

4 simply because most utilities who are, you know, in Chapter S 11 or close to it, aren't running around trying to build G

6 anything, never nind a nuclear power pinnt. I did want 7 to say a word, and I gubss I did, but I'm afraid I'm almost 8 '

out of time. I had one hour and I see I have two minutes

\

• 9 Left.

l l 10 t!R. FARRAR: Mr.Dignan, if you are asking me, l

l 11 there is a lot nore here than you are going to cover in 12 two minutos. And I'm willing to sit here -- i l

l 13 DR. DUCK: Go ahead, but let's take a break now. l l -

m W

l l 14 MR. ROSE!!TilAL: You, I think it may be good to take 15 a break at this point. Wo will receso for 10 minutes.

16 (Brief recess.)

17 51 R '. ROSE!P:'llt.L: Uc are going to give you sono

( 13 additional tinae, Mr. DA9..an, J.or the reation. tha t. there havo 19 bcon some points t. hat have boon stressed by your adversaries 20 today thn tyou haven' t had an opportunity to renpond tc. And 21 while we aro making an endeavor to kcop this within the 22 allotted timo periods, we are not going to make a total 23 fetish of it.

(.!

24 I wondor whether you'd be so kind as to address 23 balutly the question of weighting of the transic'nt G

.y.! /. , ', l' k yj l , ' '..: -

,jh ,

,.s . @yg

}

- CERTIFICATE OF SERVICE AND SERVICE LIST Lando W. Zech, Jr., Chrmn* Thomas Dignan, Esq.*

Joseph Flynn, Asst.Gn.Cnsl Ropes & Gray Fed. Emerg. Mgmt. Agcy. U.S. NRC 500 C St. So. West Washington, D.C. 20555 225 Franklin St.

20472 Boston, MA 02110 Washington, D.C.

)

Docketing & Serv. Sec.*

Office of Selectmen Thomas M. Roberts

• Office of the Secretary ;

Town of Hampton Falls U.S. NRC U*S* NRC Hampton Falls, N.H. 03844 Washington, D.C. 20555 -

Washington, D.C. 20555

• Jane Doughty Sherwin E. Turk, Esq.* Kenneth Rogers SAPL Office of Exec. Legl. Dr. U.S. NRC 5 Market Street U.S. NRC Washington, D.C. 20555 Portsmouth, N.H. 03801; Washington, D.C. 20555

• MaynardYoung,Chairmanf Phillip Ahrens, Esq. Frederick M. Bernthal "

Asst. Atty. General U.S. NRC nt a oa State House Sta. #6 Washington, D.C. 20555 Rye, N.H. 03870 Augusta, ME 04333

• George Dana Bisbee, Esq.

Carol Sneider, Esq,' Kenneth M. Carr orney General s M .'

Office of the Atty. Gen. U.S. NRC State of New Hampshire '

20555

~

One Ashburton Place 19 Fl* Washington, D.C. Concord, N.H. 03301 Boston, MA 02108 Richard A. H;mpe, Esq. Paul McEachern, Esq. William S. Lord New Hampshire Civil Def. Matthew Brock, Esq. Board of Selectmen Hampe & McNicholas 25 Maplewood Ave. Town Hall - Friend St.

P.O. Box 360 Amesbury, MA 01913 35 Pleasant St.

Concord, N.H. 03301 Portsmouth, N.H. 03801 Diane Curran, Esq. Sandra Gavutis Rep. Roberta Pevear Harmon & Weiss Town of Kensington Town of Hampton Falls 20001 S Street, NW # 430 Box 1154 Drinkwater Road Washington, D.C. 20009 East Kingston, N.H. 038f Hampton Falls, N.H. 03844 Judi.th.H. Mizner, Esq. Edward Thomas Mr. Robert Harrison FEMA Pres, & CEO Silverglate, Gertner, PSNH Baker, Fine, Good & Mizner 442 J.W. McCormack (POCH)

Boston, MA 02109 P.O. Box 330 88 Broad Street Manchester, N.H. 0310!

Boston, MA 02110 f Alan S. Rosenthal, Chainran Howard A. Wilber Gary J. Edles Atanic Safety and Licensing Atomic Safety and Licensing Atcmic Safety and Licensing l Appeal Panel Appeal Panel Appeal Panel US NBC US NRC US NRC Washington, DC 20555 Washington, DC 20555 Washington, DC 20555 Admin. Judge Sheldon J. Wolfe Dr. Drmeth A. Luebke Dr. Jerry Harbour Atomic Safety & Licensing Atanic Safety and Licen Atanic Safety and Licensing US NRC Board Panel Board Panel US NBC East West Towers Build. US NEC Washington, DC 20555 4350 East West Highway Washington, DC 20555 Bethesda, MD 20814

__.