ML20238D908

Requests That Util Be Allowed to Operate Facility at 5% Power While Awaiting Approval of Evacuation Plan.Related Info Encl

ML20238D908
Person / Time
Site:	Seabrook
Issue date:	08/10/1987
From:	Gabriel E AFFILIATION NOT ASSIGNED
To:	Zech L NRC COMMISSION (OCM)
Shared Package
ML20238D906	List: ML20238D904 ML20238D908
References
NUDOCS 8709110490
Download: ML20238D908 (5)

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e-2. Enclosed please find a copy of a letter which my cousin, Mrs. Gloria Callinan, a widow, sent Governor Michael'S. Dukakis of Mass. concerning the operation of Seabrook.No. 1 power plant at 5% capacity. France is 60% nuclear and the U.S.A. is only 15% nuclear: no new nuclear plants have.been started since the Three-Mile Island. power plant accident. Not allowing Seabrook No. l'to operate' hurts America's economy, when such plants that have been completed cannot i start up, for no real good reason, New England needs the additional l l electrical power. Thank you very kindly for your reconsideration'of allowing PSNH to operate Seabrook No'. 1 at 5% capacity, while awaiting an evacuation l plan for'the plant. Very respectfully yours, . Eda

• k MM Edwin Z ith Gabriel Licenred Mechanical Engineer BSME, ME, MSEE, Tau Beta Pi Honor Society

Enclosures:

1. Copy of letter to Governor Michael S. Dukakis from Gloria Callinan 2 Form letter from Robert J. Harrison, Chairman, PSNH, dated July 29, relative to the utility's' precarious financial situation.

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I l* ',' .* , 51' Flint! Road.

                                                                      .Acton, Mass 01720 August 6, 1987 Honorable Michael S. Dukakis Governor, Commonwealth of Mass.

The State House Boston, Mass. 02133

Dear Honorable Dukakis:

l May I express our' deep appreciation for-having you as'our. great. governor and for your efforts in behalf of the' residents of Massa-chusetts. You could help us even more.if you would' permit Seabrook power plant [ No. I to operate at 5% power capacity. With the uncertain situation. { ' l in the Persian Gulf, our Middle East oil supply.could be cut'off and-our state would have to purchase expensive oil for its oil-fired power plants, causing the cost of electricity to increase for residents like myself. The chance of any kind of an accident occurring is extremely small, much less likely for to-day's plant construction, than the channces of an earthquake occurring in Mass. At.least we know the location of Seabrook No. 1 and can devise some sort of an evacuation plan. We do not know where the next earthquake in Mass, will occur; and thus, l cannot devise an evacuation plan for those residents who might un-knowingly be in a quake area. q Thank you very much for your consideration regarding allowing Sea-brook No. I to operate at reduced power. You are a great governor and we wish you continued success in serv-ing the people of our grea,t state. Very respectfully yours, . a-Gloria Callinan i

Enclosure:

j Newspaper article entitled " Quake experts find East Coast terra not so firma". 1 E___

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            ,-           .                                & s Robert J. Harrison President and Chief Exocutive Officer Public Service of New Hampshire July 29,1987

Dear Shareowner:

At the present time, your Company continues to be faced with many challenges which contribute to uncer-tainty regarding our financial recovery. The trying issues we have been dealing with include Govemer Dukalds' decision not to participate in emergency response planning for Seabrook Station, the Nuclear Regulatcry Commission's refusal so far to grant a low-power (5 percent) license for the plant, the recent drop in the value of our securities, and a disappointing response to our non-Seabrook rate increase request by the New Hampshire Public Utilities Commission (PUC). (An update on Seabrook Station developments, as well as a summary of the recent ratc case decision, are included in a later section of this report to you.) On May 22, PSNH issued unseemed Floating Rate Promissory Notes due May 1,1988, to a group of private investor.. at an interest rate equal to the prime plus nine percent, increasing 25 basis points monthly. Even at this extremely high rate, the Company was able to place only $100 million, instead of a targeted $150 ritillion, of these securities. On July 16, we withdrew our requests for PUC permission to borrow money for Seabrook expenses and non-Seabrook construction. Together, the Wo requested financings represented $545 million. With discounts and related expenses, they would have netted the Company proceeds of approximately $350 million. However, your management made the decision to withdraw these petitions because we believe that, absent a change in the Company's circumstances, the Company ne longer has access to the capital markets. We also concluded that, even if financing were available in the short term,it would not be in the best interests of either the Company's investors or customers. Given developments such as these, shareowners certainly have a right to be concemed. For many of you, your concem is probably heightened by pessimistic meaia reports am] specula-tion regarding your Company's future. I wish that I could give you a definitive answer to the problems which we are confronting today-some-thing that would provide the light at the end of the tunnel, so to speak. Unfortunately,I do not have a cure-all re-sponse. However, I can tell you that we are working jointly with the investment firms of Merrill Lynch Capital Markets and Drexel Bumham Lambert,Inc.,-on an alternate financial plan which is designed to substantially reduce PSNH's need for external financing. The plan includes a voluntary exchange of new securities for certain outstanding debt securities. Until the plan is filed with the Securities and Exchange Commission-which will most probably occur next month-we are prohibited from releasing any further details. r Given the uncertainties surrounding the Company at this juncture, however, compounded by the need for prompt and affirmative regulatory approvals of any new plans, you should be aware that your Company could be forced into bankruptcy proceedings. As we recently reported to the Securities and Exchange Commission in a Fonn 8-K filing, should artadequate plan not be developed and placed into effect before the end of 1987,it will be difficult, if not irnpossible, for the Company to avoid proceedings under the Bankruptcy Code. In conclusion,I want to assure you that PSNH's obligations to the shareowners and other investors in this Company are foremost in the minds of both management and the Board of Directors during these difficult times. You will be receiving additionalinformation from the Company, detailing our proposed plans,in the near future. We believe that these plans will represent the best course of action. As always, we highly value your support and interest as we work to produce some positive developments for your Company. Sincerely, Robert J. Harrison 1000 Elm St., P.O. Box 330, Manchester, NH 03105 Telephone (603) 669-4000

EARNINGS, ENERGY SALES AND DIVIDENDS ~

                                                                                                                                ..M j                         The Company's camings per common and common equivalent share during the second quarter,1987, were 50.09, compared to a loss of $6.89 per share for the corresponding quarter in 1986. For the twelve months ended June 30,1987, earnings per common and common equivalent share were $2.28, compared to a loss of $4.85 for the same twelve-month period in 1986. (As previously reported, the recognition of a $348 million write-off associated with the cancellation of Seabrook Unit 2 and Pilgrim Unit 2 resulted in the losses during 1986.)

i A major factor contributing to weak eamings in the second quarter was a $17 million charge to reflect customer refunds mandated by the PUC's recent rate case decision. The retail rate case, and its impact on eamings, is discussed in more detail in a later section of this report. PSNH's kilowatt-hour sales to its major customer classes continue to grow well above industry averag:s. Residential sales for the twelve months ended June 30,1987 were up 6.6 percent and industrial sales were up 4.8 percent over sales in the corresponding period in 1986. Total prime sales for the period-which include the Company's wholesale transactions-declined 3.3 percent, due to the loss of UNITIL, a major wholesale customer, in October 1986. On July 9,1987, the Board of Directors voted to omit the dividends on shares of the Company's common and preferred stock which would have been payable August 15,1987. Because of the Compan serious financial constraints, the cash conservation associated with this decision Both the was necessary.y's in Company's board and management remain committed to resuming dividend payments as soon as possible, although it is unlikely that this will happen very soon. SEABROOK STATION UPDATE The construction of Seabrook Unit I was completed in mid-1986 and New Hampshire Yankee (NHY), the plant's management organization, has successfully loaded fuel and completed a month-long series of zero-power tests. The current delays in receiving low power and full power authorization and placing the unit into service arise solely from a lack of cooperation by the govemor of Massachusetts in the emergency response planning process for the six Massachusetts communities within a ten-mile radius of the plant. On June 12, the Nuclear Regulatory Commission (NRC) issued an order indicating that it would not lift its

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April 19871tayin low power ~ testing at Seabro'ok StMion ~tinfil K"borif fide"iiiilit9"offsite EHieigeFcy Ia6 Tor

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Massachusetts has been submitted that meeth its "thieshb1d YEqiiirements."~ Ths NRC went on to explam, in its

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order, that an acFeptablibtilitp'-5p5556 rid Flan mus't c5iEpiEsate fo7"thiabsence of govemmental participation in emergency planning." Since the plan that NHY had submitted in early April was previously developed by Massa-chusetts authorities, and assumed cooperation trom officials in this state, it did not fully meet these guidelines. NHY is, however, in the final stages of completing a plan that does compensate for tIie lack of cooperation from Massachusetts authorities, and intends to submit that plan as soon as possible. When the new plan is submitted, NHY presently intends to refile its petition requening reconsideration of the NRC's continued stay on low power testing. Over the longer term, this plan is aho intended to play a key iole in NHY's efforts to olnain full power au-theorization. i A potential rule change by the NRC, which would allow NHY to submit a Massachusetts plan in the absence of state cooperation, could play a key role ist enabling NHY to obtain full power authorization. Over a three-month period which ended in early June, approximately 13 thousand written comments from the public on j the proposed rule change were accepted for review by the NRC. In late Jane, U.S. Secretary of Energy John Her- l rington indicated in a letter to one of the joint owners of Seabrook Station that President Reagan favors this rule i revision, as long as the utility is able to sponsor an adequate emergency response plan. He wrote, "We support the adoption of the proposed rule, and view this proposal as an important step toward maintaining nuclear energy as a major contributor to the nation's energy mix." President Reagan had previously indicated his administration's I support on thi3 issue in an exclusive interview published in a state newspaper, the Union Leader. It is not known  ! when the NRC will reach h final decision on this rule change.

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Emergency response plans for the 17 New Hampshire communities within the ten-mile zone have been signifi-cantly less controversial than the Massachusetts plans. These plans were submitted by New Hampshire Govemor  ; John Sununu in late 1985 and are scheduled for an approximately month-long final review and hearing process j beginning on September 28 in Boston. In preparation for these hearings, on June 5 the Federal Emergency Man-l agement Agency (FEMA) released a summary of its current position on each contested issue regarding the New l _ _ _ _ _ _ _ _ _ <}}